FORM 10-Q
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
_________________
(Mark One)
[X] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended March 31, 1996
OR
[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
Commission file number 1-3315
PUBLICKER INDUSTRIES INC.
(Exact name of registrant as specified in its charter)
Pennsylvania 23-0991870
(State of incorporation) (I.R.S. Employer
Identification No.)
1445 East Putnam Avenue, Old Greenwich, Connecticut 06870
(Address of principal executive offices)
(203) 637-4500
(Registrant's telephone number, including area code)
Indicate by check mark whether the registrant (1) has filed all reports required
to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during
the preceding 12 months (or for such shorter period that the registrant was
required to file such reports), and (2) has been subject to such filing
requirements for the past 90 days.
Yes X No .
Number of shares of Common Stock outstanding as of March 31, 1996: 15,356,910
PUBLICKER INDUSTRIES INC.
AND SUBSIDIARY COMPANIES
CONSOLIDATED BALANCE SHEETS AS OF
MARCH 31, 1996 AND DECEMBER 31, 1995
(in thousands of dollars)
March 31, December
31,
1996 1995 *
(unaudited)
ASSETS
Current assets:
Cash, including short-term investments
of $23,450 in 1996 $ 24,386 $ 874
Restricted cash 4,500 4,500
Trade receivables, less allowance for doubtful
accounts (1996 - $147; 1995 -$143) 6,715 6,633
Inventories 4,476 4,541
Net assets of discontinued operations - 11,142
Other 2,084 839
Total current assets 42,161 28,529
Property, plant and equipment:
Land 739 731
Buildings 2,794 2,849
Machinery and equipment 4,480 4,337
Less - accumulated depreciation (2,456) (2,467)
5,557 5,450
Goodwill 4,604 4,635
Other assets 2,066 2,203
$54,388 $40,817
LIABILITIES AND SHAREHOLDERS' EQUITY
Current liabilities:
Short-term obligations, including current maturities $8,353 $10,280
Trade accounts payable 6,090 5,235
Accrued liabilities 16,644 13,754
Total current liabilities 31,087 29,269
Long-term debt 2,615 2,752
Other non-current liabilities 11,267 11,390
Total liabilities 44,969 43,411
Shareholders' equity
Common shares, $0.10 par value,
Authorized, 30,000,000 shares
Issued-15,901,937 shares in 1996 and 15,405,937 in 1995 1,591 1,541
Additional paid-in capital 46,952 42,488
Accumulated deficit (since January 1, 1984) (35,233) (42,732)
Common shares held in treasury, at cost - 545,027
shares in 1996 and 1995 (3,891) (3,891)
Total shareholders' equity 9,419 (2,594)
$ 54,388 $40,817
* Restated for discontinued operations
PUBLICKER INDUSTRIES INC.
AND SUBSIDIARY COMPANIES
CONSOLIDATED STATEMENTS OF INCOME (LOSS)
FOR THE THREE MONTHS ENDED MARCH 31, 1996 AND 1995
(in thousands of dollars except per share data)
(unaudited)
Three Months Ended
March 31,
1996 1995*
Sales and revenues:
Sales of goods $9,988 $9,545
Revenues from services 2,015 2,732
12,003 12,277
Costs and expenses:
Cost of sales 8,192 7,249
Cost of services 1,530 1,826
General and administrative expenses 2,915 2,453
Selling expenses 555 535
Special charge 995 -
14,187 12,063
Income (loss) from operations (2,184) 214
Other (income) expenses:
Interest income (10) (86)
Interest expense 410 579
Cost of pensions - nonoperating 184 192
Legal settlements and costs 153 125
737 810
Income (loss) from continuing operations
before income taxes (2,921) (596)
Charge (credit) in lieu of income taxes (1,226) -
Income (loss) from continuing operations (1,695) (596)
Discontinued operations:
Income from discontinued operations (net of charge in
lieu of income taxes of $311 in 1996) 430 599
Gain on sale of discontinued operations (net of charge in lieu
of taxes of $4,894 and income
taxes payable of $1,452) 8,764 -
Net income (loss) $7,499 $ 3
Earnings (loss) per common share:
Continuing operations $ (.10) $(.04)
Discontinued operations .56 .04
$ .46 $ -
Weighted average common shares
outstanding 16,275,902 14,664,858
* Restated for discontinued operations<PAGE>
PUBLICKER INDUSTRIES INC.
AND SUBSIDIARY COMPANIES
CONSOLIDATED STATEMENT OF SHAREHOLDERS' EQUITY
FOR THE THREE MONTHS ENDED MARCH 31, 1996
(in thousands of dollars except share data)
(unaudited)
Accumulated
Common Shares Additional Deficit Common Share-
Shares Paid-in Since Treasury holders'
Issued Amount Capital 1-1-84 Shares (1) Equity
Balance-
December 31, 1995 15,405,937 $1,541 $42,488 $(42,732) $(3,891) $(2,594)
Issuance of common
shares 496,000 50 485 - - 535
Net income - - - 7,499 - 7,499
Charge in
lieu of income
taxes(2) - - 3,979 - - 3,979
Balance-
March 31, 1996 15,901,937 $1,591 $46,952 $(35,233) $(3,891) $9,419
(1) Represents 545,027 of common shares held in
treasury at March 31, 1996 and December 31, 1995.
(2) Represents an increase in additional paid-in
capital for charge in lieu of income taxes related
to the utilization of net operating loss
carryforwards which existed as of January 1, 1984,
the date of the corporate revaluation. Such taxes
will never be paid or payable and, accordingly, are
added directly to shareholders' equity (See Note
5).
<PAGE>
PUBLICKER INDUSTRIES INC.
AND SUBSIDIARY COMPANIES
CONSOLIDATED STATEMENTS OF CASH FLOWS
FOR THE THREE MONTHS ENDED MARCH 31, 1996 AND 1995
(in thousands of dollars)
(unaudited)
Three Months
Ended
March
31,
1996 1995*
Cash flows from operating activities:
Income (loss) from continuing operations $ (1,695) $ (596)
Adjustments to reconcile income (loss) to net cash provided by
(used in) continuing operations:
Charge (credit) in lieu of income taxes (1,226) -
Depreciation and amortization 291 269
Provision for doubtful accounts - 19
Changes in operating assets and liabilities:
Trade receivables (82) (700)
Inventories 65 (145)
Other current assets (65) (282)
Other assets 89 (11)
Trade accounts payable 855 (1,059)
Accrued liabilities 833 1,770
Other non-current liabilities (123) (540)
Net cash provided by (used in) continuing operations (1,058) (1,275)
Income from discontinued operation 9,194 599
Adjustments to reconcile income to net cash provided by (used in)
discontinued operations:
Gain on sale of discontinued operations (13,658) -
Charge in lieu of income taxes 5,205 -
Decrease (increase) in net assets of
discontinued operations (1,728) (840)
Net cash provided by (used in)
discontinued operations (987) (241)
Net cash provided by (used in) operating activities(2,045) (1,516)
Cash flows from investing activities:
Proceeds from sale of discontinued operations 30,600 2,240
Capital expenditures (302) (64)
Net cash provided by (used in) investing activities 30,298 2,176
Cash flows from financing activities:
Borrowings (repayments) under revolving credit lines(4,312) (292)
Repayment of term loans and notes payable (964) (51)
Proceeds from the issuance of common shares 535 409
Purchase of treasury stock - (279)
Net cash provided by (used in) financing activities(4,741) (213)
Net increase (decrease) in cash 23,512 447
Cash - beginning of period 874 6,274
Cash - end of period $ 24,386 $ 6,721
* Restated for discontinued operations<PAGE>
Note 1 - BASIS OF PRESENTATION
The accompanying unaudited consolidated condensed financial statements
reflect all normal and recurring adjustments that are, in the opinion of
management, necessary to present fairly the financial position of Publicker
Industries Inc. and subsidiary companies as of March 31, 1996 and the results of
their operations and their cash flows for the three months ended March 31, 1996
and 1995. Certain information and footnote disclosures normally included in
financial statements prepared in accordance with generally accepted accounting
principles have been omitted. These condensed financial statements should be
read in conjunction with the financial statements and notes thereto included
in the Company's Annual Report on Form 10-K for the year ended December 31,
1995.
Cash Flow Information
Cash paid for interest during the three months ended March 31, 1996 and
1995 was approximately $193,000 and $64,000, respectively. No cash was paid for
income taxes during the three months ended March 31, 1996 and 1995.
Net Income (Loss) Per Common Share
Net income (loss) per common share is computed using the weighted
average number of common shares and the dilutive effect of share
equivalents (stock options and warrants) outstanding during each
period. The effect of stock options and warrants on the computation
for 1995 were not included as they were antidilutive.
Note 2 - DISCONTINUED OPERATIONS
On March 29, 1996, the Company sold substantially all of the assets of
Fenwal Electronics, Inc. ("Fenwal") for $25,300,000 in cash, plus the assumption
of certain liabilities. The purchase price is subject to adjustment, which
is not
expected to be material, based on the closing date net book value of assets
sold. On February 16, 1996, the Company sold substantially all of the assets
of Bright Star Industries Incorporated ("Bright Star") for $5,500,000, plus
the assumption
of certain liabilities. The buyer paid $5,300,000 in cash. The balance of the
purchase price will be held in escrow for up to one year to cover potential
purchase price and indemnity adjustments, which are not expected to be
material.
The purchase price is subject to adjustment based on the closing date net book
value of assets sold. The sales of Fenwal and Bright Star resulted in a pretax
gain of $15,110,000 which was offset by a charge in lieu of income taxes of
$4,894,000 and income taxes payable of $1,452,000. An amount equal to
the charge
in lieu of taxes has been credited to additional paid-in capital (see Note 5).
On January 31, 1995, the Company sold substantially all the assets of
Associated Testing Laboratories, Inc. ("ATL") for $2,240,000 in cash, plus the
assumption of certain liabilities.
Fenwal, Bright Star and ATL have been reflected as discontinued
operations in the accompanying financial statements. The operating
results of the
discontinued operations for the three months ended March 31, 1996 and 1995 were
as follows (in thousands):
1996 1995
Net sales $6,402 $ 7,850
Costs and expenses 5,594 7,251
Income from operations 808 599
<PAGE>
Note 3 - DEBT
On October 11, 1995, the Company entered into a three year $17,060,000
credit agreement ("Loan Agreement"). The Loan Agreement provides for a revolving
credit line ("Revolver"), term promissory notes ("Term Notes") and a credit
facility for future capital expenditure financing. The Loan Agreement
is secured
by substantially all of the Company's assets and bears interest at a rate of one
and one-half percent (1 1/2%) in excess of the prime rate.
The Loan Agreement and related documents contain certain covenants
including, among others, maintenance of minimum working capital and adjusted net
worth (as defined). In the event the Loan Agreement, or portions thereof, is
repaid before maturity, the Company must pay a prepayment penalty equal to 3% in
year one, 2% in year two and 1% in year three of the credit facility repaid.
In connection with the sale of discontinued operations, the outstanding
borrowings under the Revolver and the Term Loans related to Fenwal and
Bright Star
were repaid. As of March 31, 1996, the Company has borrowing availability under
the Revolver based on eligible accounts receivable and inventories, as defined,
of approximately $5,500,000.
On April 19, 1996, the Company redeemed all of its outstanding 13%
Subordinated Notes due December 15, 1996. The redemption price was equal to the
principal amount of $7,500,000, plus accrued interest to the redemption date.
Note 4 - INVENTORIES
Inventories at March 31, 1996 and December 31, 1995, consisted of the
following:
March 31, December 31,
1996 1995
(in thousands)
Raw materials and supplies $ 2,934 $ 2,945
Work in process 490 451
Finished goods 1,052 1,145
$ 4,476 $ 4,541
Note 5 - INCOME TAXES
As of March 31, 1996, approximately $94,000,000 of U.S. tax loss
carryforwards (subject to review by the Internal Revenue Service), expiring from
1997 through 2010, were available to offset future taxable income. As a result
of a corporate revaluation during 1984, tax benefits resulting from the
utilization in subsequent years of net operating loss carryforwards existing as
of the date of the corporate revaluation will be excluded from the results of
operations and directly credited to additional paid-in capital when
realized. As of March 31, 1996, approximately $17,000,000 of the
Company's U.S. tax loss carryforwards predated the corporate revaluation.
As of March 31, 1996, deferred tax assets of approximately $33,000,000
relating to the tax benefit of the Company's U.S. tax loss carryforwards were
offset by a full valuation allowance. As of March 31, 1996, approximately
$6,000,000 of deferred tax assets predated the corporate revaluation.
Subsequent
adjustments to the valuation allowance with respect to the deferred tax assets
which predated the corporate revaluation would be directly credited to
additional
paid-in capital.
For the three months ended March 31, 1996, the Company recorded a
charge in lieu of income taxes of $3,979,000 and a provision for income taxes
currently payable of $1,452,000. The charge in lieu of taxes relates to the
utilization of net operating loss carryforwards which existed as of January 1,
1984, the date of the corporate revaluation. Such taxes will never be paid or
payable and, accordingly, an amount equal to the charge has been credited to
additional paid-in capital.
Note 6 - ENVIRONMENTAL LITIGATION
As more fully discussed under Legal Proceedings (and environmental
matters included therein) included elsewhere in this Form 10-Q, the
United States
brought an action in 1990 against the Company and two other parties seeking
recovery of costs incurred by the Environmental Protection Agency ("EPA") and
other federal agencies in responding to releases or threatened releases of
hazardous substances at a facility owned and operated by the Company until early
1986. The Commonwealth of Pennsylvania intervened as a second plaintiff
in 1993,
seeking recovery of costs allegedly incurred by the Pennsylvania Department of
Environmental Protection ("PADEP") in responding to such releases or threatened
releases at the facility. During the fourth quarter of 1993, the Company
recorded
a liability of $14,350,000 to cover the estimated costs of settling this
litigation.
On April 12, 1996, the Court gave final approval to and entered a
Consent Decree among the EPA, the U.S. Department of Justice, PADEP, and the
Company which resolves all of the United States' and PADEP's claims against the
Company, as well as the Company's counterclaim against the United States. The
Company previously funded $4,500,000 into a court administered escrow account.
Following the entry of the Consent Decree, additional payments
totaling $4,850,000
were made in April and May of 1996. Further payments totaling $5,000,000 plus
interest will be made to the United States and Commonwealth of Pennsylvania over
a six year period.
The Company believes that it has sufficient liquidity to comply with
the terms of the Consent Decree as well as meet its operating cash
requirements.
The Company expects to fund the long-term payments required by the Consent
Decree from its available cash resources, availability under the Loan Agreement,
cash provided by operations, the possible issuance of new debt securities
and, if
consummated, the sale of one or more of its subsidiary companies.
Note 7 - SPECIAL CHARGE
During the fourth quarter of 1995, the Company decided to move the
operations of its Greenwald Industries, Inc. subsidiary from a leased
facility in
Brooklyn, New York to a newly acquired facility in Chester, Connecticut. A
special charge of $995,000 was recorded in the first quarter of 1996 which
included $637,000 in severance associated with 110 terminated employees in New
York, $210,000 for lease termination costs and $148,000 for costs incurred
through
March 31, 1996 related to plant and employee relocation and recruiting new
personnel. The Company expects to incur an additional $500,000 related to plant
and employee relocation, recruiting, training and temporary living allowances in
the second quarter of 1996. The move was completed by April 30, 1996. As of
March 31, 1996, the accrued liability related to the special charge was
$811,000.
It is expected that the remaining accrual balance will be substantially expended
by June 30, 1996.
<PAGE>
MANAGEMENT'S DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS
THREE MONTHS ENDED MARCH 31, 1996 AND 1995
Operating Results
Publicker's consolidated sales of $12,003,000 for the first quarter of
1996 decreased by approximately 2% from $12,277,000 for the first
quarter of 1995.
The decrease in sales was due to an 8% decrease in volume offset by a
6% increase
in selling prices. The Company's loss from continuing operations for the first
quarter of 1996 totaled $2,184,000 compared to income from continuing operations
of $214,000 for the first quarter of 1995.
The Company reported net income of $7,499,000 or $.46 per share for the
first quarter of 1996 compared to $3,000 for the first quarter of 1995. The
1996 first quarter results included cost of pensions non-operating of $184,000,
legal settlements and costs of $153,000 and income from discontinued operations
of $9,194,000. The 1995 first quarter results included cost of pensions
non-operating of $192,000, legal settlements and costs of $125,000 and
income from
discontinued operations of $599,000. Interest expense decreased to $410,000 for
the first quarter of 1996 compared to $579,000 for the same period in 1995, due
to a reduction in overall debt levels.
Sales for the Company's manufacturing segment (which includes the
operations of Greenwald Industries, Inc. and Masterview Window Company,
Inc.) for
the first quarter of 1996 were $9,988,000 compared to $9,545,000 for the first
quarter of 1995. The sales improvement was driven by a significant
increase over
the prior year in window unit shipments. This segment had a loss from
operations
of $641,000 for the first quarter of 1996 compared to income from operations of
$1,187,000 for the same period in 1995. Income from operations was negatively
impacted by a $995,000 special charge associated with Greenwald's move
to a newly
acquired facility in Chester, Connecticut and a $372,000 writedown of certain
obsolete inventories. The move was completed by April 30, 1996. A decline in
operating results for the second quarter is anticipated as a result of
additional
move related costs and reduced operating effeciencies due to transitioning
Greenwald to a new workforce.
Sales for the Company's services segment (which consists of one
subsidiary company, Orr-Schelen-Mayeron & Associates, Inc.) decreased by
approximately 26% to $2,015,000 for the first quarter of 1996 compared to
$2,732,000 for the first quarter of 1995. A 4% increase in OSM's fee
schedule was
more than offset by a significant reduction in production employee headcount
versus 1995. The services segment experienced a loss from operations for the
first quarter of 1996 of $395,000 compared to a loss of $11,000 for the same
period in 1995. The decline was due to certain operating inefficiencies
and lower
contract margins. In response to the decline in sales and income from
operations,
OSM reduced headcount and implemented spending and other controls in the first
quarter of 1996. Management expects financial performance to improve in the
second quarter of 1996.
On March 29, 1996, the Company sold substantially all of the assets of
Fenwal Electronics, Inc. ("Fenwal") for $25,300,000 in cash, plus the assumption
of certain liabilities. The purchase price is subject to adjustment,
which is not
expected to be material, based on the closing date net book value of assets
sold.
On February 16, 1996, the Company sold substantially all of the assets of Bright
Star Industries Incorporated ("Bright Star") for $5,500,000, plus the assumption
of certain liabilities. The buyer paid $5,300,000 in cash. The balance of the
purchase price will be held in escrow for up to one year to cover potential
purchase price and indemnity adjustments, which are not expected to be
material.
The purchase price is subject to adjustment based on the closing date net book
value of assets sold. The sales of Fenwal and Bright Star resulted in a pretax
gain of $15,110,000 which was offset by a charge in lieu of income taxes of
$4,894,000 and income taxes payable of $1,452,000.
Liquidity
During the first three months of 1996, cash, including short-term
investments, increased by $23,512,000. Operating activities consumed cash of
$2,045,000 while investing activities provided cash of $30,298,000 and financing
activities consumed cash of $4,741,000. Operating activities principally
consisted of the loss from continuing operations offset by depreciation and
amortization of $291,000 and an increase in trade payables and accrued
liabilities. Investing activities consisted of proceeds of $30,600,000 from the
sale of Fenwal and Bright Star offset by capital expenditures of $302,000.
Financing activities consisted of repayments of the Company's revolving credit
line, term loans and notes payable of $5,276,000 offset by $535,000 of proceeds
from the issuance of common shares upon the exercise of stock options.
On October 11, 1995, the Company entered into a three year $17,060,000
credit agreement ("Loan Agreement"). The Loan Agreement provides for a revolving
credit line, term promissory notes and a credit facility for future capital
expenditure financing. The Loan Agreement is secured by substantially all
of the
Company's assets and bears interest at a rate of one and one half
percent (1 1/2%)
in excess of the prime rate. The Loan Agreement and related documents contain
certain covenants including, among others, maintenance of minimum working
capital
and adjusted net worth (as defined).
In connection with the sale of discontinued operations, the outstanding
borrowings under the revolver and the term loans related to Fenwal and
Bright Star
were repaid. As of March 31, 1996, the Company has borrowing availability under
the Revolver based on eligible accounts receivable and inventories, as defined,
of approximately $5,500,000.
On April 19, 1996, the Company redeemed all of its outstanding 13%
Subordinated Notes due December 15, 1996. The redemption price was equal to the
principal amount of $7,500,000, plus accrued interest to the redemption date.
As discussed in Part II Item 1 - Legal Proceedings, on April 12, 1996,
the Consent Decree that settles the Company's environmental litigation with the
United States and the Commonwealth of Pennsylvania was entered by the U.S.
District Court for the Eastern District of Pennsylvania, and became effective.
The Company previously funded $4,500,000 into a court administered escrow
account.
Following the entry of the Consent Decree, additional payments
totaling $4,850,000
were made in April and May of 1996. Further payments totaling $5,000,000 plus
interest will be made to the United States and the Commonwealth of Pennsylvania
over a six year period.
The Company believes it has sufficient liquidity to comply with the
terms of the Consent Decree as well as meet its operating cash
requirements. The
Company expects to fund the long-term payments required by the Consent Decree
from its available cash resources, availability under the Loan Agreement, cash
provided by operations, the possible issuance of new debt securities and, if
consummated, the sale of one or more of its subsidiary companies.
As previously mentioned, the Company completed the sale of
substantially all of the assets of Bright Star and Fenwal in
the first quarter of
1996. The Company is also exploring the sale of Masterview Window
Company and has
engaged a financial advisor to assess the market and identify potential
purchasers. There can be no assurance that this process will yield an offer
which the Company would find acceptable, or whether any offer would result in a
sale of the Masterview business.
During the first three months of 1996, the Company's capital
expenditures totaled $302,000. The Company anticipates that its level of
capital
expenditures for 1996 will be less than those of 1995. The Company has not
entered into any material commitments for acquisitions or capital
expenditures and
retains the ability to increase or decrease capital expenditure levels as
required. The Company anticipates that it will be able to fund its capital
expenditures during 1996 with its available cash resources and its other cash
flows as well as through capital equipment financing.
At March 31, 1996, approximately $94 million of U.S. tax loss
carryforwards (subject to review by the Internal Revenue Service), expiring from
1997 through 2010, were available to offset future taxable income. <PAGE>
PART II. OTHER INFORMATION
ITEM 1. LEGAL PROCEEDINGS
Environmental Matters - Philadelphia, Pennsylvania
This matter has been settled
The Company was a defendant in United States, et al., v. Publicker
Industries Inc., et al., Civil Action No. 90-7984 (E.D. Pa.). The United States
commenced the action in December 1990 against the Company and two other
defendants, Cuyahoga Wrecking Corporation and Overland Corporation. The United
States sought to recover under the Comprehensive, Environmental Response,
Compensation and Liability Act ("CERCLA") costs incurred by the United States
Environmental Protection Agency ("EPA") and other federal agencies
in responding
to releases of hazardous substances at a site located in Philadelphia,
Pennsylvania. The Company owned and operated the site as a manufacturing and
storage facility until 1986, when the Company sold the facility to Overland
Corporation.
In May 1993, in contemplation of a settlement, the Commonwealth of
Pennsylvania was granted leave by the Court to join in the litigation as a
plaintiff. The Commonwealth of Pennsylvania sought to recover money allegedly
expended by its Department of Environmental Protection ("PADEP") in connection
with hazardous substances at the site. In 1992, at the parties request,
the case was placed on the Court's inactive docket.
During the fourth quarter of 1993, the Company recorded a liability of
$14,350,000 to cover the estimated costs of settling this litigation.
On April 6, 1995, pursuant to an Agreement in Principle to settle the
litigation, the Company deposited $4,500,000 in a Court-administered
escrow account to be held for use as payment of a portion of
the United States' claim against the Company upon entry
of a Consent Decree embodying the agreed terms and conditions.
On April 12, 1996, the Court gave final approval to and entered a
Consent Decree among the EPA, the U.S. Department of Justice, PADEP, and the
Company which resolves all of the United States' and PADEP's claims against the
Company, as well as the Company's counterclaim against the United States. In
accordance with the Consent Decree, on May 13, 1996, the Company made an
additional payment of $4,500,000 into the Court-administered escrow
account. Funds
in the escrow account totaling $9,000,000, plus interest, will be
disbursed to the
United States after resolution by the parties or, if necessary, by the Court of
the Company's potential right to a refund of a portion of the costs which the
United States may have incurred as a result of possibly fraudulent charges by an
EPA contractor who performed response actions at the Site. The Company
will make
further payments to the United States totaling $4,350,000, plus interest, over a
six year period, with approximately equal annual payments, plus interest,
commencing on April 12, 1997, and continuing each year thereafter through and
including April 12, 2002.
Under the Consent Decree, the Company will also pay the Commonwealth
of Pennsylvania a total of $1,000,000. On April 22, 1996, the Company made an
intial payment of $350,000 to the Commonwealth and will make further payments to
the Commonwealth totaling $650,000, plus interest, over a four year period. The
Company will make equal annual payments, plus interest, commencing on April 12,
1997, and continuing each year thereafter through and including April 12, 2000.
The foregoing payments are in settlement of all of the United States'
and the Commonwealth of Pennsylvania's claims against the Company and the
Company's counterclaims against the United States relating to the Philadelphia
site, subject only to certain "reopener" provisions in the event future
discovery
of certain defined types of presently unknown conditions or information
pertaining to the site.
General Litigation
In addition to the foregoing, various other legal proceedings are now
pending against the Company. The Company considers all such proceedings to be
ordinary litigation incident to the character of its business. Certain
claims are
covered by liability insurance. The Company believes that the resolution
of those
claims to the extent not covered by insurance will not, individually or in the
aggregate, have a material adverse effect on the financial position or
results of
operations of the Company.
ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K
(a) None
(b) Reports on Form 8-K: During the first quarter of 1996, the Company
filed two reports:
Form 8-K dated January 16, 1996, relating to the lodging of the
Consent Decree which embodies the settlement of litigation between
the Company and the U.S. Environmental Protection Agency and the
Pennsylvania Department of Environmental Protection.
Form 8-K dated March 1, 1996, relating to the sale of substantially
all of the assets of the Company's Bright Star Industries
Incorporated subsidiary.<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934,
the registrant has duly caused this report to be signed on its behalf by the
undersigned, thereunto duly authorized.
PUBLICKER INDUSTRIES INC.
(Registrant)
Date: May 15, 1996 /s/ James J. Weis
James J. Weis, President
and
Chief Executive Officer
/s/ Antonio L. DeLise
Antonio L. DeLise, Vice
President -
Finance, Principal
Financial and
Accounting Officer
<TABLE> <S> <C>
<ARTICLE> 5
<S> <C> <C>
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<FISCAL-YEAR-END> DEC-31-1996 DEC-31-1995
<PERIOD-END> MAR-31-1996 MAR-31-1995
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<COMMON> 1,591,000 1,541,000
0 0
0 0
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<EPS-DILUTED> .46 .04
</TABLE>
