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 June 30, 1997
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.)
One Post Road, Fairfield, Connecticut 06430
(Address of principal executive offices)
(203) 254-3900
(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 June 30, 1997: 13,562,685
PUBLICKER INDUSTRIES INC.
AND SUBSIDIARY COMPANIES
CONSOLIDATED BALANCE SHEETS AS OF
JUNE 30, 1997 AND DECEMBER 31, 1996
(in thousands of dollars)
June 30, December
31,
1997 1996
(unaudited)
ASSETS
Current assets:
Cash, including short-term investments of $12,713 in 1997 and
$18,173 in 1996 $ 12,762 $18,318
Trade receivables, less allowance for doubtful accounts
(1997 - $60; 1996 - $92) 4,324 3,008
Inventories 2,095 2,506
Other 564 667
Total current assets 19,745 24,499
Property, plant and equipment:
Land 234 234
Buildings 2,326 2,326
Machinery and equipment 3,409 3,322
Less - accumulated depreciation (1,983) (1,778)
3,986 4,104
Goodwill 2,712 2,752
Other assets 1,654 1,740
$28,097 $33,095
LIABILITIES AND SHAREHOLDERS' EQUITY
Current liabilities:
Short-term obligations, including current maturities $ 123 $ 489
Trade accounts payable 1,370 1,564
Accrued liabilities 4,983 5,012
Total current liabilities 6,476 7,065
Long-term debt 1,213 1,273
Other non-current liabilities 9,868 10,761
Total liabilities 17,557 19,099
Shareholders' equity:
Common shares, $0.10 par value,
Authorized, 40,000,000 shares
Issued - 16,058,937 shares in 1997 and 16,037,937
in 1996 1,606 1,604
Additional paid-in capital 48,263 48,240
Accumulated deficit (since January 1, 1984) (32,721) (31,737)
Common shares held in treasury, at cost (6,608) (4,111)
Total shareholders' equity 10,540 13,996
$28,097 $33,095
PUBLICKER INDUSTRIES INC.
AND SUBSIDIARY COMPANIES
CONSOLIDATED STATEMENTS OF INCOME (LOSS)
FOR THE THREE AND SIX MONTHS ENDED JUNE 30, 1997 AND 1996
(in thousands of dollars except per share data)
(unaudited)
Three Months Ended Six Months Ended
June 30, June 30,
1997 1996* 1997 1996*
Sales and revenues:
Sales of goods $ 4,957 $ 3,742 $ 9,072 $ 7,478
Revenues from services 2,212 2,589 3,925 4,594
7,169 6,331 12,997 12,072
Costs and expenses:
Cost of sales 3,476 2,755 6,365 6,263
Cost of services 1,414 1,593 2,659 3,123
General and administrative expenses 1,855 2,218 3,797 4,693
Selling expenses 296 292 596 560
Special charge - 637 - 1,632
7,041 7,495 13,417 16,271
Income (loss) from operations 128 (1,164) (420) (4,199)
Other (income) expenses:
Interest income (156) (160) (350) (170)
Interest expense 92 240 200 594
Cost of pensions - nonoperating 199 186 425 370
Other costs 19 (115) 289 28
154 151 564 822
Income (loss) from continuing operations
before income taxes (26) (1,315) (984) (5,021)
Income tax benefit - 553 - 2,109
Income (loss) from continuing operations (26) (762) (984) (2,912)
Discontinued operations:
Income (loss) from discontinued operations- 403 - 1,288
Gain on sale of discontinued operations - - - 8,764
Net income (loss) $ (26) $ (359) $ (984) $ 7,140
Earnings (loss) per common share:
Continuing operations $ - $ (.04) $ (.07) $ (.17)
Discontinued operations - .02 - .61
$ - $(.02) $ (.07) $ .44
Common shares used in calculation of
earnings per share 13,819,785 16,631,346 14,484,628 16,432,181
*Restated for discontinued operations
PUBLICKER INDUSTRIES INC.
AND SUBSIDIARY COMPANIES
CONSOLIDATED STATEMENT OF SHAREHOLDERS' EQUITY
FOR THE SIX MONTHS ENDED JUNE 30, 1997
(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, 1996 16,037,937 $1,604 $48,240 $(31,737) $(4,111) $13,996
Issuance of
common shares 21,000 2 23 - - 25
Purchase of
treasury shares - - - - (2,497) (2,497)
Net loss - - - (984) - (984)
Balance -
June 30, 1997 16,058,937 $1,606 $48,263 $(32,721) $(6,608) $10,540
(1) Represents 2,496,252 and 678,352 of common shares held in
treasury at June 30, 1997 and December 31, 1996, respectively.
<PAGE>
PUBLICKER INDUSTRIES INC.
AND SUBSIDIARY COMPANIES
CONSOLIDATED STATEMENTS OF CASH FLOWS
FOR THE SIX MONTHS ENDED JUNE 30, 1997 AND 1996
(in thousands of dollars)
(unaudited)
Six Months Ended
June 30,
1997 1996*
Cash flows from operating activities:
Income (loss) from continuing operations $(984) $(2,912)
Adjustments to reconcile income (loss) to net cash provided by
(used in) continuing operations:
Income tax benefit - (2,109)
Depreciation and amortization 427 436
Changes in operating assets and liabilities:
Restricted cash - 4,500
Trade receivables (1,316) (455)
Inventories 411 667
Other current assets 103 186
Other assets (34) 175
Trade accounts payable (194) (198)
Accrued liabilities (578) (8,699)
Other non-current liabilities (893) (1,050)
Net cash provided by (used in) continuing operations
(3,058) (9,459)
Income from discontinued operations - 10,052
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 - 5,827
Increase in net assets of discontinued operations (611) (3,328)
Net cash provided by (used in) discontinued operations (611) (1,107)
Net cash provided by (used in) operating activities (3,669) (10,566)
Cash flows from investing activities:
Proceeds from sale of discontinued operations 1,160 30,740
Capital expenditures (149) (877)
Net cash provided by (used in) investing activities1,011 29,863
Cash flows from financing activities:
Redemption of 13% Subordinated Notes - (7,500)
Repayments of revolving credit lines - (2,928)
Repayments of term loans and notes payable (426) (1,359)
Proceeds from the issuance of common shares 25 591
Purchase of treasury stock (2,497) (26)
Net cash provided by (used in) financing activities (2,898 (11,222)
Net increase (decrease) in cash (5,556) 8,075
Cash - beginning of period 18,318 874
Cash - end of period $ 12,762 $ 8,949
*Restated for discontinued operations
<PAGE>
Note 1 - BASIS OF PRESENTATION
The accompanying unaudited consolidated 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 June 30, 1997 and the results of their
operations and their cash flows for the three and six months ended June 30,
1997 and 1996. Certain information and footnote disclosures normally
included in financial statements prepared in accordance with generally
accepted accounting principles have been omitted. These 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, 1996.
Cash Flow Information
Cash paid for interest during the six months ended June 30, 1997 and
1996 was approximately $349,000 and $531,000, respectively. Cash paid for
income taxes was $912,000 for the six months ended June 30, 1996. No cash
was paid for income taxes during the first six months of 1997.
Net Income (Loss) Per Common Share
Net income (loss) per common share for 1996 was computed using the
weighted average number of common shares and the dilutive effect of share
equivalents (stock options and warrants) outstanding using the modified
treasury method. The effect of stock options and warrants on the
computation for 1997 were not included as they were antidilutive.
In February 1997, the Financial Accounting Standards Board issued
Statement of Financial Accounting Standards No. 128, "Earnings Per Share"
("SFAS No. 128") which establishes new standards for computing and
presenting earnings per share ("EPS"). SFAS No. 128 replaces the
presentation of primary EPS with basic EPS for which common stock
equivalents are not considered in the computation and also revises the
computation of diluted EPS. The statement is effective for financial
statements issued for periods ending after December 15, 1997. Had EPS been
determined in accordance with SFAS No. 128, the Company's basic and diluted
EPS for the three and six months ended June 30, 1996 would have been as
follows:
Three Months Ended Six Months Ended
June 30, 1996 June 30, 1996
Basic EPS $ (.02) $ .47
Diluted EPS $ (.02) $ .46
The application of SFAS No. 128 would have no effect on EPS reported for 1997.
Note 2 - DISCONTINUED OPERATIONS
In 1996, the Company completed the sale of substantially all of the
assets of Masterview Window Company, Inc. ("Masterview"), Fenwal
Electronics, Inc. ("Fenwal") and Bright Star Industries Incorporated
("Bright Star"). The aggregate sales price for the dispositions was
$47,771,000. A portion of the sales prices amounting to $1,919,000 at
December 31, 1996, was held in escrow to cover potential purchase price
adjustments, indemnity claims and certain environmental remediation
activities. In the first six months of 1997, an additional $1,160,000
in cash was received principally relating to the finalization of the
Masterview purchase price adjustment.
Masterview, Fenwal and Bright Star have been reflected as discontinued
operations in the accompanying 1996 financial statements. Net sales of
discontinued operations for the six months ended June 30, 1996 were
$18,893,000. The aggregate pre-tax gain on sale of discontinued
operations recorded in the first quarter of 1996 of $15,110,000 was offset
by a provision for income taxes of $6,346,000, of which $4,894,000 was
credited directly to paid-in-capital due to the utilization of pre-
corporate reorganization tax loss carryforwards. The pre-tax income
from discontinued operations in 1996 of $2,221,000 was offset by a
provision for income taxes of $933,000 which was also credited directly
to paid-in-capital (see Note 6).
Note 3 - DEBT
In 1995, the Company entered into a three year $17,060,000 credit
agreement ("Loan Agreement"). The Loan Agreement provided for a revolving
credit line ("Revolver"), term promissory notes ("Term Notes") and a credit
facility for future capital expenditure financing. The Loan Agreement was
secured by substantially all of the Company's assets. In connection with
the sale of discontinued operations, the outstanding borrowings under the
Revolver and the Term Loans related to Masterview, Fenwal and Bright Star
were repaid. On February 28, 1997, the Company repaid the remaining balances
outstanding under the Revolver and Term Notes and terminated the
Loan Agreement. The Company recorded a charge associated with the termination
amounting to $210,000 in the first quarter of 1997.
In April 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 June 30, 1997 and December 31, 1996, consisted of the
following:
June 30, December 31,
1997 1996
(in thousands)
Raw materials and supplies $ 1,216 $ 1,589
Work in process 274 250
Finished goods 605 667
$ 2,095 $ 2,506
Note 5 - STOCKHOLDERS' EQUITY
In August 1996, the Board of Directors of the Company authorized the
repurchase of up to 1,000,000 shares of the Company's common stock. The
Board of Directors increased the Company's share repurchase authorization
to 2,000,000 shares in March 1997. Through June 30, 1997, the Company
repurchased 1,938,100 shares of common stock under the buy-back program
for an aggregate cost of $2,691,000.
In connection with an offering of 13% Subordinated Notes in December
1986, the Company issued 3,600,000 warrants ("Warrants") to purchase shares
of the Company's common stock for five years, which period was subsequently
extended by five years. In addition, the Company issued 1,200,000
Underwriter's Warrants to purchase the Company's common stock for five
years, which period was subsequently extended by five years.
Each Warrant and Underwriter Warrant entitled its holder to purchase
1.024 shares of common stock for $1.95 per share (subject to adjustment
in certain circumstances). Unexercised warrants were to expire on December
15, 1996 (December 17, 1996, in the case of the Underwriter's Warrants).
On November 8, 1996, the Company's Board of Directors, acting upon the
recommendation of a special committee of disinterested directors,
determined it would be in the Company's best interests to modify the
Warrants and Underwriter's Warrants owned by any holder who exercises,
at the current exercise price of $1.95 per share of common stock, 25% of
the warrants owned on December 15, 1996 (December 17, 1996, in the
case of the Underwriter's Warrants). Shareholders of the Company
subsequently approved the modification on July 2, 1997 ("Approval Date").
The modification resulted in the following changes to the holder's
unexercised Warrants and Underwriter's Warrants (i.e., the 75% balance
of the warrants owned on December 15, 1996 or December 17,
1996, as the case may be) (the "Remaining Modified Warrants"):
(a)Five-Year Extension The expiration date of the Remaining
Modified Warrants was extended to July 2, 2002.
(b)Increased Exercise Price The exercise price of the Remaining
Modified Warrants was increased from $1.95 per share to (i) $2.00 per
share, during the year ending on the first anniversary of the Approval
Date, (ii) $2.10 per share, during the year ending on the second
anniversary of the Approval Date, (iii) $2.20 per share, during the year
ending on the third anniversary of the Approval Date, (iv) $2.30 per
share, during the year ending on the fourth anniversary of the Approval
Date, and (v) $2.40 per share, during the year ending on the fifth
anniversary of the Approval Date.
Under the terms of the modification, in order to retain the Warrants
and Underwriter's Warrants, each holder must make an exercise election within
30 days from the date of the notice mailing.
As of July 2, 1997, a total of 2,257,050 warrants were outstanding
entitling the warrant holders to purchase, subject to shareholder approval,
an aggregate of 2,311,220 shares of common stock. Members of the Company's
Board of Directors hold 2,190,000 warrants. A charge to income of
approximately $840,000 will be recorded in the third quarter of 1997
based on the fair value of the Remaining Modified Warrants as of the
Approval Date.
Note 6 - INCOME TAXES
As of June 30, 1997, approximately $90,000,000 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 June 30, 1997, approximately $12,000,000
of the Company's U.S. tax loss carryforwards predated the corporate
revaluation.
As of June 30, 1997, deferred tax assets of approximately $34,000,000
relating to the tax benefit of the Company's U.S. tax loss carryforwards were
offset by a full valuation allowance. As of June 30, 1997, approximately
$4,000,000 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 six months ended June 30, 1996, the Company recorded a
charge in lieu of income taxes of $3,718,000 and a provision for income
taxes currently payable of $1,452,000. The charge in lieu of income 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. No income
tax provision or benefit was recognized in 1997 because the tax benefit
associated with the Company's operating losses were offset in full by an
increase in the valuation allowance.
Note 7 - ENVIRONMENTAL LITIGATION
On April 12, 1996, a Consent Decree among the Company, the Environmental
Protection Agency, the U.S. Department of Justice and the Pennsylvania
Department of Environmental Protection ("PADEP") was entered by the U.S.
District Court for the Eastern District of Pennsylvania which resolved all
of the United States' and PADEP's claims against the Company for recovery of
costs incurred in responding to releases of hazardous substances at a
facility previously owned and operated by the Company. The Company had
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. In April 1997, the Company
made additional payments totaling $796,000 plus interest. Further payments
totaling $4,204,000 plus interest will be made to the United States and
Commonwealth of Pennsylvania over the next five years.
Note 8 - 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 $1,632,000 was recorded in the first six
months of 1996 which included $668,000 in severance costs associated with
110 terminated employees, $246,000 for lease termination costs and $718,000
for costs through June 30, 1996, related to plant and employee relocation,
recruiting and training new personnel and for temporary living
allowances. The move was completed by April 30, 1996.
<PAGE>
MANAGEMENT'S DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS
THREE AND SIX MONTHS ENDED JUNE 30, 1997 AND 1996
Operating Results - Second Quarter
Publicker's consolidated sales and revenues of $7,169,000 for the second
quarter of 1997 increased by approximately 13% from $6,331,000 for the second
quarter of 1996. The improvement in sales was due to a volume increase at
the Company's manufacturing segment which was partially offset by a volume
reduction at the Company's services segment. Cost of sales and services
increased from $4,348,000 in 1996 to $4,890,000 in 1997 principally as a
result of the sales and revenues improvement. General and administrative
expenses for the second quarter of 1997 decreased by approximately 16% to
$1,855,000 from $2,218,000 in 1996 as a result of overhead expense
reductions. The Company's pre-tax loss from continuing operations for the
second quarter of 1997 totaled $26,000 compared to a loss of $1,315,000 for
the second quarter of 1996.
The Company reported a net loss of $26,000 for the second quarter of 1997
compared to a net loss of $359,000, or $.02 per share, for the second
quarter of 1996. The 1996 second quarter results included a net loss from
continuing operations of $762,000, or $.04 per share, and income from
discontinued operations of $403,000, or $.02 per share.
Sales for the Company's manufacturing segment (which consists of one
subsidiary company, Greenwald Industries, Inc.) for the second quarter of
1997 were $4,957,000 compared to $3,742,000 for the second quarter of 1996.
The increase in sales was due to a 2% increase in selling prices and a 30%
increase in volume. This segment had income from operations of $844,000
for the second quarter of 1997 compared to a loss from operations of
$159,000 for the same period in 1996. The 1996 results were negatively
impacted by a $637,000 special charge associated with Greenwald's move
to a new facility in early 1996 and a disruption in business activities
caused by the move.
Revenues for the Company's services segment (which consists of one
subsidiary company, Orr-Schelen-Mayeron & Associates, Inc.) decreased by
approximately 15% to $2,212,000 for the second quarter of 1997 compared to
$2,589,000 for the second quarter of 1996. A 1% increase in OSM's fee
schedule was more than offset by a reduction in production employee
headcount versus 1996. The services segment had income from
operations for the second quarter of 1997 of $98,000 compared to income of
$257,000 for the same period in 1996.
Operating Results - Six months
Publicker's consolidated sales and revenues of $12,997,000 for the
first six months of 1997 increased by approximately 8% from $12,072,000
for the first six months of 1996. The improvement in sales was due to a
volume increase at the Company's manufacturing segment which was partially
offset by a volume reduction at the Company's services segment. Cost of
sales and services decreased from $9,386,000 in 1996 to $9,024,000 in 1997
as manufacturing efficiency improvements more than offset the effect
of the sales and revenues increase. General and administrative expenses
for the first six months of 1997 decreased by approximately 19% to
$3,797,000 from $4,693,000 in 1996 as a result of overhead expense
reductions. The Company's pre-tax loss from continuing operations
for the first six months of 1997 totaled $984,000 compared to a loss of
$5,021,000 for 1996.
The Company reported a net loss of $984,000, or $.07 per share, for
the first six months of 1997 compared to net income of $7,140,000, or $.44
per share, for 1996. The 1996 results included a net loss from continuing
operations of $2,912,000, or $.17 per share, and income and gains from
discontinued operations of $10,052,000, or $.61 per share.
Sales for the Company's manufacturing segment for the first six months of
1997 were $9,072,000 compared to $7,478,000 for 1996. The increase in
sales was due primarily to a volume improvement. This segment had income
from operations of $1,518,000 for the first six months of 1997 compared to a
loss from operations of $1,653,000 for the same period in 1996. The 1996
results were negatively impacted by a $1,632,000 special charge associated
with Greenwald's move to a new facility in early 1996, a $372,000 writedown
of certain obsolete inventories and a disruption in business activities
caused by the move.
Revenues for the Company's services segment decreased by approximately 15%
to $3,925,000 for the first six months of 1997 compared to $4,594,000 for
1996. The revenue decrease was principally due to a reduction in production
employee headcount versus 1996. The services segment had a loss from
operations for the first six months of 1997 of $112,000 compared to a
$138,000 loss for the same period in 1996.
Liquidity
During the first six months of 1997, cash, including short-term
investments, decreased by $5,556,000 to $12,762,000 at June 30, 1997.
Operating activities consumed cash of $3,669,000, investing activities
provided cash of $1,011,000 and financing activities consumed cash of
$2,898,000. Operating activities principally consisted of the loss from
continuing operations, the annual payment under the settlement of the
environmental litigation and an increase in working capital. Investing
activities consisted of additional proceeds of $1,160,000 received from
the sale of discontinued operations offset by capital expenditures of
$149,000. Financing activities consisted of repayments of the Company's
revolving credit line and term loans of $426,000 and treasury stock
purchases of $2,497,000 offset by $25,000 of proceeds from the issuance
of common shares upon the exercise of stock options.
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. In April 1997, the Company made additional payments
totaling $796,000 plus interest. Further payments totaling $4,204,000 plus
interest will be made to the United States and the Commonwealth of
Pennsylvania over the next five years.
In August 1996, the Board of Directors of the Company authorized the
repurchase of up to 1,000,000 shares of the Company's common stock. The
Board of Directors increased the Company's share repurchase authorization
to 2,000,000 shares in March 1997. Through June 30, 1997, the Company
repurchased 1,938,100 shares of common stock under the buy-back program
for an aggregate cost of $2,691,000.
During the first six months of 1997, the Company's capital expenditures
totaled $149,000. The Company anticipates that its level of capital
expenditures for 1997 will be less than those of 1996. 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 1997 with its
available cash resources as well as through capital equipment financing.
At June 30, 1997, approximately $90 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.
On July 2, 1997, the Company's shareholders approved the modification to
certain outstanding warrants to purchase common stock (see Note 5 to the
Notes to the Consolidated Financial Statements). If all of the warrant
holders exercise the requisite 25% of their warrants prior to the conclusion
of the election period, the Company would realize proceeds of approximately
$1.1 million from the issuance of 577,805 shares of common stock.
Outlook
The Company's primary objective for 1997 is to identify a suitable
acquisition candidate. As mentioned above, in 1996 and 1997, the Company
met its obligations under the terms of the settlement of its environmental
litigation and also repaid the remaining balances outstanding under the
Revolver and Term Notes and terminated the Loan Agreement. As of June 30,
1997, the Company had approximately $12,700,000 in cash on hand. The Company
intends to use such funds, together with other potential indebtedness, to
finance the acquisition purchase price. The Company has not yet identified
any potential acquisition candidates or determined the amount
or source of any indebtedness which would be incurred to finance future
acquisitions.
Special Note Regarding Forward-Looking Statements: A number of
statements contained in this discussion and analysis are forward-looking
statements within the meaning of the Private Securities Litigation Reform
Act of 1995 that involve risks and uncertainties that could cause actual
results to differ materially from those expressed or implied in the
applicable statements. These risks and uncertainties include but are
not limited to: Greenwald's dependance on the mechanical coin meter
market and its potential vulnerability to technological obsolescence;
OSM's dependence on key personnel and general economic conditions in the
Midwest; and the Company's ability to successfully implement its business
strategy including the identification, financing and consummation of an
acquisition.
<PAGE>
PART II. OTHER INFORMATION
ITEM 1. LEGAL PROCEEDINGS
General Litigation
Various legal proceedings are 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) Exhibits required by Item 601 of Regulation S-K.
Exhibit 11: Calculation of earnings per share
Exhibit 27: Financial Data Schedule (EDGAR version only)
(b) Reports on Form 8-K: None
<PAGE>
PUBLICKER INDUSTRIES INC.
AND SUBSIDIARY COMPANIES
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: August 12, 1997 /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<PAGE>
Exhibit 11
PUBLICKER INDUSTRIES INC.
AND SUBSIDIARY COMPANIES
CALCULATION OF EARNINGS PER SHARE
(Unaudited)
Three Months Ended June 30, Six Months Ended June 30,
1997(a) 1996(b) 1997(a) 1996(b)
(in thousands except per share data)
Income (loss) from continuing operations $ (26) $(762) $(984) $(2,912)
Add - Interest savings, net
of tax effect - 27 - 48
Adjusted income (loss) from continuing
operations (26) (735) (984) (2,864)
Income and gains from discontinued
operations - 403 - 10,052
Adjusted net income (loss) $(26) $(332) $(984) $7,188
Average common shares 13,820 15,391 14,485 15,192
Add - Stock options and
common stock purchase warrants - 1,240 - 1,240
Adjusted common shares 13,820 16,631 14,485 16,432
Earnings (loss) per common share
Continuing operations $ - $(.04) $(.07) $(.17)
Discontinued operations - .02 - .61
$ - $(.02) $(.07) $ .44
(a) Earnings per common share is computed using the weighted average number of
common shares outstanding during each period. The effect of stock options
and warrants were not included as they were antidilutive.
(b) Earnings per common share is computed using the modified treasury method.
In accordance with this method, proceeds from the exercise of stock
options and warrants are first used to buy back up to 20% of the Company's
common stock at the average price for the period. Any remaining proceeds
are used to retire debt. An adjustment is made to net income to
reflect interest assumed to be saved on the debt retirement, net of income
taxes.
<TABLE> <S> <C>
<ARTICLE> 5
<MULTIPLIER> 1,000
<S> <C>
<PERIOD-TYPE> 3-MOS
<FISCAL-YEAR-END> DEC-31-1997
<PERIOD-END> JUN-30-1997
<CASH> 12,762
<SECURITIES> 0
<RECEIVABLES> 4,384
<ALLOWANCES> 60
<INVENTORY> 2,095
<CURRENT-ASSETS> 19,745
<PP&E> 5,970
<DEPRECIATION> 1,983
<TOTAL-ASSETS> 28,097
<CURRENT-LIABILITIES> 6,476
<BONDS> 1,213
<COMMON> 1,606
0
0
<OTHER-SE> 8,934
<TOTAL-LIABILITY-AND-EQUITY> 28,097
<SALES> 12,997
<TOTAL-REVENUES> 12,997
<CGS> 9,024
<TOTAL-COSTS> 9,024
<OTHER-EXPENSES> 4,757
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 200
<INCOME-PRETAX> (984)
<INCOME-TAX> 0
<INCOME-CONTINUING> (984)
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> (984)
<EPS-PRIMARY> (.07)
<EPS-DILUTED> (.07)
</TABLE>
