<PAGE>
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-Q
(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, 1995
--------------------------
or
( ) TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
For the transition period from ______________________ to ______________________
Commission file number 0-15661
-------------------------------
AMCOL INTERNATIONAL CORPORATION
-------------------------------------------------------------------------------
(Exact name of registrant as specified in its charter)
Delaware 36-0724340
- ------------------------------------------ ------------------------------------
(State or other jurisdiction of (IRS Employer Identification No.)
incorporation or organization)
1500 WEST SHURE DRIVE, SUITE 500, ARLINGTON HEIGHTS, ILLINOIS 60004-7803
- --------------------------------------------------------------------------------
(Address of principal executive offices) (Zip Code)
(708) 394-8730
- --------------------------------------------------------------------------------
(Registrant's telephone number, including area code)
American Colloid Company
- --------------------------------------------------------------------------------
(Former name, former address and former fiscal year, if changed since last
report)
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
------- -------
Indicate the number of shares outstanding of each of the issuer's
classes of common stock, as of the latest practicable date.
Class Outstanding at July 24, 1995
- -------------------------------------- ----------------------------------------
(Common stock, $.01 par value) 19,172,275
<PAGE>
AMCOL INTERNATIONAL CORPORATION
INDEX
Page No.
--------
PART I - FINANCIAL INFORMATION
Item 1 FINANCIAL STATEMENTS
Condensed Consolidated Balance Sheet -
June 30, 1995 and December 31, 1994 1
Condensed Consolidated Statement of Operations -
six months and three months ended June 30, 1995
and 1994 2
Condensed Consolidated Statement of Cash Flows -
six months ended June 30, 1995 and 1994 3
Notes to Condensed Consolidated Financial Statements 4
Item 2 MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
CONDITION AND RESULTS OF OPERATIONS 5
PART II - OTHER INFORMATION
Item 4 SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS 13
Item 6 EXHIBITS AND REPORTS ON FORM 8-K 14
<PAGE>
PART I - FINANCIAL INFORMATION
AMCOL INTERNATIONAL CORPORATION AND SUBSIDIARIES
CONDENSED CONSOLIDATED BALANCE SHEET
(UNAUDITED)
(IN THOUSANDS)
ASSETS
<TABLE>
<CAPTION>
JUNE 30, DECEMBER 31,
1995 1994
----------- ------------
<S> <C> <C>
Current Assets: *
Cash and cash equivalents $ 3,983 $ 10,389
Accounts receivable 62,220 50,908
Inventories 40,313 37,450
Advance mining 2,108 2,363
Prepaid expenses 4,179 2,213
Current deferred tax asset 2,526 2,516
--------- ---------
Total current assets 115,329 105,839
--------- ---------
Property, plant, equipment and mineral reserves 266,746 225,532
Less accumulated depreciation 92,100 84,112
--------- ---------
174,646 141,420
--------- ---------
Intangible assets 8,963 9,208
--------- ---------
Other long-term assets 4,299 4,580
--------- ---------
$ 303,237 $ 261,047
--------- ---------
--------- ---------
LIABILITIES AND STOCKHOLDERS' EQUITY
Current Liabilities:
Notes payable and current maturities of debt $ 3,286 $ 3,507
Accounts payable 16,483 19,373
Accrued income taxes 1,721 807
Accrued liabilities 15,829 12,930
--------- ---------
Total current liabilities 37,319 36,617
--------- ---------
Long-term debt 104,748 71,458
-------- ---------
Deferred credits and minority interest 11,120 11,653
--------- ---------
Stockholders' equity:
Common stock 213 213
Additional paid-in capital 74,678 74,279
Foreign currency translation adjustment 209 (1,865)
Retained earnings 78,182 72,157
Treasury stock (3,232) (3,465)
--------- ---------
150,050 141,319
--------- ---------
$ 303,237 $ 261,047
--------- ---------
--------- ---------
</TABLE>
*Condensed from audited financial statements.
The accompanying notes are an integral part of these
condensed financial statements.
-1-
<PAGE>
AMCOL INTERNATIONAL CORPORATION AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENT OF OPERATIONS
(Unaudited)
(In thousands, except number of shares and per share data)
<TABLE>
<CAPTION>
SIX MONTHS ENDED THREE MONTHS ENDED
JUNE 30, JUNE 30,
---------------------------- ----------------------------
1995 1994 1995 1994
------------- ------------- ------------- -------------
<S> <C> <C> <C> <C>
Net Sales $ 162,410 $ 121,858 $ 83,660 $ 64,012
Cost of sales 125,605 96,699 64,231 50,770
----------- ------------ ----------- -----------
Gross profit 36,805 25,159 19,429 13,242
General, selling and administrative
expenses 22,469 16,418 11,651 8,554
----------- ------------ ----------- -----------
Operating profit 14,336 8,741 7,778 4,688
----------- ------------ ----------- -----------
Other income (expense):
Interest expense, net (2,350) (687) (1,282) (343)
Other income, net 900 749 758 672
----------- ------------ ----------- -----------
(1,450) 62 (524) 329
----------- ------------ ----------- -----------
Income from operations 12,886 8,803 7,254 5,017
Income taxes 4,527 2,911 2,552 1,640
----------- ------------ ----------- -----------
Income before minority interest 8,359 5,892 4,702 3,377
Net income of minority interest (40) (49) (14) (24)
----------- ------------ ----------- -----------
Net income $ 8,319 $ 5,843 $ 4,688 $ 3,353
----------- ------------ ----------- -----------
----------- ------------ ----------- -----------
Weighted average common and
common equivalent shares 19,621,263 19,368,152 19,681,117 19,331,456
----------- ------------ ----------- -----------
Earnings per share $ .42 $ .30 $ .24 $ .17
----------- ------------ ----------- -----------
Dividends declared per share $ .12 $ .12 $ .06 $ .06
----------- ------------ ----------- -----------
----------- ------------ ----------- -----------
</TABLE>
The accompanying notes are an integral part of these
condensed financial statements.
-2-
<PAGE>
AMCOL INTERNATIONAL CORPORATION AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENT OF CASH FLOWS
(Unaudited)
(In thousands)
<TABLE>
<CAPTION>
SIX MONTHS ENDED
JUNE 30,
------------------------
1995 1994
----------- ------------
<S> <C> <C>
Cash flow from operating activities:
Net income $ 8,319 $ 5,843
Adjustments to reconcile net income to net cash
provided by operating activities:
Depreciation, depletion, and amortization 9,056 6,670
Other (52) 363
(Increase)/decrease in current assets (16,422) (6,056)
Increase/(decrease) in current liabilities 922 4,734
-------- --------
Net cash provided by operations 1,823 11,554
-------- --------
Cash flow from investing activities:
Acquisition of land, mineral reserves,
depreciable and intangible assets (41,081) (44,058)
Other 1,446 178
-------- --------
Net cash used in investing activities (39,635) (43,880)
-------- --------
Cash flow from financing activities:
Net change in outstanding debt 33,069 19,554
Dividends paid (2,295) (2,242)
Other 632 255
-------- --------
Net cash provided by financing activities 31,406 17,567
-------- --------
Net decrease in cash and cash equivalents (6,406) (14,759)
Cash and cash equivalents at beginning of period 10,389 20,502
-------- --------
Cash and cash equivalents at end of period $ 3,983 $ 5,743
-------- --------
-------- --------
Supplemental Disclosure of Cash Flows Information
(In thousands)
Actual cash paid for:
Interest $ 3,367 $ 1,075
-------- --------
-------- --------
Income taxes $ 3,497 $ 3,317
-------- --------
-------- --------
</TABLE>
The accompanying notes are an integral part of these
condensed financial statements.
-3-
<PAGE>
AMCOL INTERNATIONAL CORPORATION AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(UNAUDITED)
(IN THOUSANDS)
NOTE 1: BASIS OF PRESENTATION
The financial information included herein, other than the condensed
consolidated balance sheet as of December 31, 1994, has been prepared by
management without audit by independent certified public accountants who do not
express an opinion thereon. The condensed consolidated balance sheet as of
December 31, 1994, has been derived from and does not include all the
disclosures contained in the audited consolidated financial statements for the
year ended December 31, 1994. The information furnished herein includes all
adjustments which are, in the opinion of management, necessary for a fair
statement of the results of the interim period, and all such adjustments are of
a normal recurring nature. Management recommends the accompanying consolidated
financial information be read in conjunction with the consolidated financial
statements and related notes included in the Company's 1994 Form 10-K which
accompanies the 1994 Corporate Report.
The results of operations for the six month period ended June 30,
1995, are not necessarily indicative of the results to be expected for the full
year.
NOTE 2: INVENTORIES
Inventories at June 30, 1995 have been valued using the same methods
as at December 31, 1994. LIFO inventory values have been calculated based upon
anticipated ending inventory levels at December 31, 1995, and anticipated mining
costs for fiscal year 1995. The composition of inventories at June 30, 1995 and
December 31, 1994, was as follows:
<TABLE>
<CAPTION>
June 30, December 31,
1995 1994
--------- ------------
<S> <C> <C>
Crude stockpile and in-process inventories $ 27,751 $ 21,922
Other raw material, container and supplies 12,562 15,528
inventories -------- --------
$ 40,313 $ 37,450
-------- --------
-------- --------
</TABLE>
NOTE 3: EARNINGS PER SHARE
Earnings per share are computed by dividing net income by the weighted
average number of common shares outstanding and the dilutive effect of stock
options outstanding at the end of each period.
-4-
<PAGE>
AMCOL INTERNATIONAL CORPORATION AND SUBSIDIARIES
MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
CONDITION AND RESULTS OF OPERATIONS
The following is management's discussion and analysis of certain
significant factors which have affected the Company's financial position and
operating results during the periods included in the accompanying condensed
consolidated financial statements.
SIX MONTHS ENDED JUNE 30, 1995 VS. 1994
Net sales increased by $40.6 million, or 33.3%, while gross profits
and operating earnings increased by $11.6 million, or 46.3%, and $5.6 million,
or 64.0%, respectively. Net interest expense increased by $1.7 million, or
242.1%, as June 30, 1995 debt (both long and short-term) increased by $67.3
million, or 165.0%, over the prior year period. Also, $.9 million of interest
was capitalized in 1995 compared with $.4 million in the 1994 period. Other
income in 1995 included $.6 million related to a gain on the cancellation of an
interest rate swap, while the 1994 period included a government grant of $.5
million. Earnings were $.42 per share for the 1995 period compared with $.30 per
share for the prior year period on 1.3% more shares outstanding.
Interest expense is expected to increase since construction period
interest related to the U.S. polymer facility will no longer be capitalized. The
incremental increase in interest expense is estimated at $.6 million for the
third quarter of 1995.
A brief discussion by business segment follows:
<TABLE>
<CAPTION>
SIX MONTHS ENDED JUNE 30,
------------------------------------------------------------------------------------------
1995 1994 1995 VS. 1994
------------------------- ------------------------------ -------------------------
MINERALS (DOLLARS IN THOUSANDS) $ CHANGE % CHANGE
- -------- -------------------------
<S> <C> <C> <C> <C> <C> <C>
Net sales $ 78,112 100.0% $ 74,776 100.0% $ 3,336 4.5%
Cost of sales 60,864 77.9% 60,345 80.7%
--------- ------ -------- ------
Gross profit 17,248 22.1% 14,431 19.3% 2,817 19.5%
General, selling and
administrative expenses 8,869 11.4% 6,876 9.2% 1,993 29.0%
--------- ------ -------- ------
Operating profit 8,379 10.7% 7,555 10.1% 824 10.9%
</TABLE>
Sales increased by $3.3 million, or 4.5%, over the prior year period.
Continued growth in the durable goods sector, primarily metalcasting, and in
sales of cat litter provided much of the volume growth. The weaker dollar caused
U.K. revenues to be translated at higher rates, accounting for 22.3% of the
segment sales improvement. Price increases in certain markets accounted for much
of the improvement in the gross profit margin. General, selling and
administrative expenses increased as a result of increased research and
development, higher management information systems costs and increased
infrastructure costs.
-5-
<PAGE>
AMCOL INTERNATIONAL CORPORATION AND SUBSIDIARIES
MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
CONDITION AND RESULTS OF OPERATIONS
(CONTINUED)
Sales to the agricultural market are expected to decline as a key
customer for clay carrier products switched to an alternative, non-clay product.
The loss of this business, though not material to the Company, will have an
adverse impact on segment results until the business can be replaced.
<TABLE>
<CAPTION>
SIX MONTHS ENDED JUNE 30,
------------------------------------------------------------------------------------------
1995 1994 1995 VS. 1994
------------------------- ------------------------------ -------------------------
ABSORBENT POLYMERS (DOLLARS IN THOUSANDS) $ CHANGE % CHANGE
- ------------------ -------------------------
<S> <C> <C> <C> <C> <C> <C>
Net sales $ 55,248 100.0% $ 26,342 100.0% $ 28,906 109.7%
Cost of sales 43,047 77.9% 19,738 74.9%
--------- ------ -------- ------
Gross profit 12,201 22.1% 6,604 25.1% 5,597 84.8%
General, selling and
administrative expenses 4,417 8.0% 3,400 12.9% 1,017 29.9%
--------- ------ -------- ------
Operating profit 7,784 14.1% 3,204 12.2% 4,580 142.9%
</TABLE>
Revenues increased by $28.9 million, or 109.7%, over the prior year as
sales volume increased 115.3%. The weaker U.S. dollar resulted in higher
translation rates for U.K. sales, accounting for approximately 6 percent of the
segment sales increase. Gross profit margins declined by 300 basis points, as
raw material costs increased and unit selling prices declined from the prior
year. Acrylic acid, the main raw material component of superabsorbent polymer,
is expected to increase approximately 3% from the second quarter 1995 level. Raw
material costs are not expected to decline until the fourth quarter of 1995.
Depreciation on the new facilities in the U.S. and U.K. is calculated
on a units-of-production basis for the first twelve months of operation, and on
a straight-line basis thereafter. The U.K. plant will convert to straight-line
depreciation in the fourth quarter of 1995, and the U.S. plant will switch in
the third quarter of 1996. Depreciation expense will increase when the
transition is made.
The current worldwide capacity for the Company is 110,000 metric tons.
All announced expansions have been completed, though the U.S. plant will still
be in the start-up phase during the third quarter of 1995.
-6-
<PAGE>
AMCOL INTERNATIONAL CORPORATION AND SUBSIDIARIES
MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
CONDITION AND RESULTS OF OPERATIONS
(CONTINUED)
<TABLE>
<CAPTION>
SIX MONTHS ENDED JUNE 30,
------------------------------------------------------------------------------------------
1995 1994 1995 VS. 1994
------------------------- ------------------------------ -------------------------
ENVIRONMENTAL (DOLLARS IN THOUSANDS) $ CHANGE % CHANGE
- ------------- -------------------------
<S> <C> <C> <C> <C> <C> <C>
Net sales $ 18,534 100.0% $ 10,939 100.0% $ 7,595 69.4%
Cost of sales 12,454 67.2% 8,067 73.7%
--------- ------ -------- ------
Gross profit 6,080 32.8% 2,872 26.3% 3,208 111.7%
General, selling and
administrative expenses 5,105 27.5% 2,508 22.9% 2,597 103.5%
--------- ------ -------- ------
Operating profit 975 5.3% 364 3.4% 611 167.9%
</TABLE>
Sales increased by $7.6 million, or 69.4%, over the prior year, with
approximately 53% of the increase coming from businesses acquired during the
past twelve months. Gross profit margins improved to 32.8%. The 1994 gross
profit was adversely impacted by an inventory charge of $.5 million. Without the
charge, the 1994 gross profit margin would have been 30.8%. General, selling and
administrative expenses increased by $2.6 million, reflecting the addition of
personnel and costs associated with the acquired businesses and increased
infrastructure costs.
<TABLE>
<CAPTION>
SIX MONTHS ENDED JUNE 30,
------------------------------------------------------------------------------------------
1995 1994 1995 VS. 1994
------------------------- ------------------------------ -------------------------
TRANSPORTATION (DOLLARS IN THOUSANDS) $ CHANGE % CHANGE
- -------------- -------------------------
<S> <C> <C> <C> <C> <C> <C>
Net sales $ 10,516 100.0% $ 9,801 100.0% $ 715 7.3%
Cost of sales 9,240 87.9% 8,549 87.2%
--------- ------ -------- ------
Gross profit 1,276 12.1% 1,252 12.8% 24 1.9%
General, selling and
administrative expenses 757 7.2% 762 7.8% (5) -0.7%
--------- ------ -------- ------
Operating profit 519 4.9% 490 5.0% 29 5.9%
</TABLE>
Revenues increased 7.3% as increased shipments of cat litter offset
the loss of environmental business to more cost effective rail movements. A 70
basis point decline in gross profit margins accounted for the slight decrease in
operating profit margin.
-7-
<PAGE>
AMCOL INTERNATIONAL CORPORATION AND SUBSIDIARIES
MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
CONDITION AND RESULTS OF OPERATIONS
(CONTINUED)
<TABLE>
<CAPTION>
SIX MONTHS ENDED JUNE 30,
------------------------------------------------------------------------------------------
1995 1994 1995 VS. 1994
------------------------- ------------------------------ -------------------------
CORPORATE (DOLLARS IN THOUSANDS) $ CHANGE % CHANGE
- --------- -------------------------
<S> <C> <C> <C> <C>
General, selling and
administrative expenses $ 3,321 $ 2,872 $ 449 15.6%
--------- --------
Operating loss (3,321) (2,872) (449) 15.6%
</TABLE>
Corporate costs include management information systems, human
resources, investor relations and corporate communications, corporate finance,
research costs for new markets and corporate governance costs.
Higher management information systems costs and research expenditures
accounted for the increase in corporate expenses.
-8-
<PAGE>
AMCOL INTERNATIONAL CORPORATION AND SUBSIDIARIES
MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
CONDITION AND RESULTS OF OPERATIONS
(CONTINUED)
THREE MONTHS ENDED JUNE 30, 1995 VS. 1994
Net sales increased by $19.6 million, or 30.7%, while gross profits
and operating earnings increased by $6.2 million, or 46.7%, and $3.1 million, or
65.9%, respectively. Net interest expense increased by $.9 million, or 273.8%,
as June 30, 1995 debt (both long and short-term) increased by $67.3 million, or
165.0%, over the prior year quarter. Also, $.5 million of interest was
capitalized in the 1995 quarter compared with $.2 million in the 1994 period.
Other income in 1995 included $.6 million related to a gain on the cancellation
of an interest rate swap, while the 1994 period included a government grant of
$.5 million. Earnings were $.24 per share for the 1995 quarter compared with
$.17 per share for the prior year quarter on 1.8% more shares outstanding.
A brief discussion by business segment follows:
<TABLE>
<CAPTION>
QUARTER ENDED JUNE 30,
------------------------------------------------------------------------------------------
1995 1994 1995 VS. 1994
------------------------- ------------------------------ -------------------------
MINERALS (DOLLARS IN THOUSANDS) $ CHANGE % CHANGE
- -------- -------------------------
<S> <C> <C> <C> <C> <C> <C>
Net sales $ 39,015 100.0% $ 37,756 100.0% $ 1,259 3.3%
Cost of sales 29,794 76.4% 30,207 80.0%
--------- ------ -------- ------
Gross profit 9,221 23.6% 7,549 20.0% 1,672 22.1%
General, selling and
administrative expenses 4,633 11.9% 3,587 9.5% 1,046 29.2%
--------- ------ -------- ------
Operating profit 4,588 11.7% 3,962 10.5% 626 15.8%
</TABLE>
Sales increased by $1.3 million, or 3.3%, over the prior year period.
Continued growth in the durable goods sector, primarily metalcasting, and in
sales of cat litter provided much of the volume growth. The weaker dollar caused
U.K. revenues to be translated at higher rates, accounting for 31.6% of the
segment sales improvement. Price increases in certain markets accounted for much
of the improvement in the gross profit margin. General, selling and
administrative expenses increased as a result of increased research and
development, higher management information systems costs and increased
infrastructure costs.
-9-
<PAGE>
AMCOL INTERNATIONAL CORPORATION AND SUBSIDIARIES
MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
CONDITION AND RESULTS OF OPERATIONS
(CONTINUED)
<TABLE>
<CAPTION>
QUARTER ENDED JUNE 30,
------------------------------------------------------------------------------------------
1995 1994 1995 VS. 1994
------------------------- ------------------------------ -------------------------
ABSORBENT POLYMERS (DOLLARS IN THOUSANDS) $ CHANGE % CHANGE
- ------------------ -------------------------
<S> <C> <C> <C> <C> <C> <C>
Net sales $ 28,768 100.0% $ 14,137 100.0% $ 14,631 103.5%
Cost of sales 22,745 79.1% 10,693 75.6%
--------- ------ -------- ------
Gross profit 6,023 20.9% 3,444 24.4% 2,579 74.9%
General, selling and
administrative expenses 2,323 8.1% 1,747 12.4% 576 33.0%
--------- ------ -------- ------
Operating profit 3,700 12.8% 1,697 12.0% 2,003 118.0%
</TABLE>
Revenues increased by $14.6 million, or 103.5%, over the prior year as
sales volume increased 109.2%. The weaker U.S. dollar resulted in higher
translation rates for U.K. sales, accounting for approximately 6 percent of the
segment sales increase. Gross profit margins declined by 350 basis points, as
raw material costs increased and unit selling prices declined from the prior
year.
<TABLE>
<CAPTION>
QUARTER ENDED JUNE 30,
------------------------------------------------------------------------------------------
1995 1994 1995 VS. 1994
------------------------- ------------------------------ -------------------------
ENVIRONMENTAL (DOLLARS IN THOUSANDS) $ CHANGE % CHANGE
- ------------- -------------------------
<S> <C> <C> <C> <C> <C> <C>
Net sales $ 10,609 100.0% $ 6,997 100.0% $ 3,612 51.6%
Cost of sales 7,057 66.5% 5,413 77.4%
--------- ------ -------- ------
Gross profit 3,552 33.5% 1,584 22.6% 1,968 124.2%
General, selling and
administrative expenses 2,586 24.4% 1,379 19.7% 1,207 87.5%
--------- ------ -------- ------
Operating profit 966 9.1% 205 2.9% 761 371.2%
</TABLE>
Sales increased by $3.6 million, or 51.6%, over the prior year, with
approximately 60% of the increase coming from businesses acquired during the
past twelve months. Gross profit margins improved to 33.5%. The 1994 gross
profit was adversely impacted by an inventory charge of $.5 million. Without the
charge, the 1994 gross profit margin would have been 29.8%. General, selling and
administrative expenses increased by $1.2 million, reflecting the addition of
personnel and costs associated with the acquired businesses and increased
infrastructure costs.
-10-
<PAGE>
AMCOL INTERNATIONAL CORPORATION AND SUBSIDIARIES
MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
CONDITION AND RESULTS OF OPERATIONS
(CONTINUED)
<TABLE>
<CAPTION>
QUARTER ENDED JUNE 30,
------------------------------------------------------------------------------------------
1995 1994 1995 VS. 1994
------------------------- ------------------------------ -------------------------
TRANSPORTATION (DOLLARS IN THOUSANDS) $ CHANGE % CHANGE
- -------------- -------------------------
<S> <C> <C> <C> <C> <C> <C>
Net sales $ 5,268 100.0% $ 5,122 100.0% $ 146 2.9%
Cost of sales 4,635 88.0% 4,457 87.0%
--------- ------ -------- ------
Gross profit 633 12.0% 665 13.0% (32) -4.8%
General, selling and
administrative expenses 370 7.0% 397 7.8% (27) -6.8%
--------- ------ -------- ------
Operating profit 263 5.0% 268 5.2% (5) -1.9%
</TABLE>
Revenues increased 2.9% as increased shipments of cat litter offset
the loss of environmental business to more cost effective rail movements. A 100
basis point decline in gross profit margins accounted for the 1.9% decline in
operating profit compared with the prior year.
<TABLE>
<CAPTION>
QUARTER ENDED JUNE 30,
------------------------------------------------------------------------------------------
1995 1994 1995 VS. 1994
------------------------- ------------------------------ -------------------------
CORPORATE (DOLLARS IN THOUSANDS) $ CHANGE % CHANGE
- --------- -------------------------
<S> <C> <C> <C> <C>
General, selling and
administrative expenses $ 1,739 $ 1,444 $ 295 20.4%
--------- --------
Operating loss (1,739) (1,444) (295) 20.4%
</TABLE>
Higher management information systems costs and research expenditures
accounted for the increase in corporate expenses.
-11-
<PAGE>
AMCOL INTERNATIONAL CORPORATION AND SUBSIDIARIES
MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
CONDITION AND RESULTS OF OPERATIONS
(Continued)
LIQUIDITY AND CAPITAL RESOURCES
At June 30, 1995, the Company had outstanding debt of $108 million
(including both long and short term debt) and cash of $4 million compared with
$75 million in debt and $10 million in cash and cash equivalents respectively,
at December 31, 1994. The long-term debt to total capitalization at June 30,
1995 was 41.1% compared with 33.6% at December 31, 1994.
The Company had a current ratio of 3.09 to 1 at June 30, 1995 with
approximately $78.0 million in working capital compared with 2.89 to 1 and $69.2
million, respectively at December 31, 1994.
The Company had $8.7 million in unused, committed credit lines at June
30, 1995.
During the first half of 1995, the Company used its operating cash
flow plus $6.4 million of its cash reserves and $33.1 million of debt to pay
dividends of $2.3 million, and acquire property and equipment totaling $41.1
million. In addition, working capital has increased by $8.8 million, primarily
due to sales growth in the polymer and environmental segments.
An acquisition of the assets of Claymax Corporation was made in July,
1995. The transaction included cash payments of approximately $7.5 million for
assets (both tangible and intangible) and inventory. These funds came from
additional long-term borrowings.
Management continues to explore other growth prospects in the
environmental sector, as well as yet further expansion in the polymer segment.
Additional capital will be required if these opportunities are pursued.
The Company is in the process of expanding its committed credit
facilities with the existing bank group. The increase will be required to fund
the Company's growth.
-12-
<PAGE>
PART II - OTHER INFORMATION
Item 4: SUBMISSION OF MATTERS TO A VOTE OF SECURITY-HOLDERS
(a) The Annual Stockholders Meeting of the Company was held on May 9,
1995.
(b) At the Annual Stockholders Meeting, the Stockholders voted on the
following uncontested matters. Each nominee for director was
elected by a vote of the Stockholders; and each matter was
approved by a vote of the Stockholders as follows:
1. Election of the below named Nominees of the Board of
Directors of the Company:
<TABLE>
<CAPTION>
For Against
--------------- ------------
<S> <C> <C>
Arthur Brown 15,052,270.3640 197,948.2820
Robert E. Driscoll, III 15,054,193.0870 196,025.5590
Raymond A. Foos 15,053,148.0870 197,070.5590
John Hughes 15,041,875.3740 208,343.2720
Robert C. Humphrey 15,051,324.9930 198,893.6530
C. Eugene Ray 15,054,140.3640 196,078.2820
Clarence O. Redman 14,789,300.3640 460,918.2820
Paul G. Shelton 15,049,634.3750 200,584.2710
Paul C. Weaver 15,053,194.1090 197,024.5370
</TABLE>
2. The proposal to amend the Company's Restated Certificate of
Incorporation for the classification of the Board of
Directors to three classes with one class being elected each
year:
For Against Abstain
--------------- -------------- --------------
12,052,631.9190 1,203,585.1640 1,994,001.5630
3. The proposal to amend the Company's Restated Certificate of
Incorporation to change the Company's name to AMCOL
International Corporation:
For Against Abstain
--------------- -------------- --------------
14,048,853.7290 308,981.7290 892,383.1880
-13-
<PAGE>
4. Ratification of Appointment of KPMG Peat Marwick LLP as
independent accountants for the Company for its 1995 fiscal
year.
For Against Abstain
--------------- -------------- --------------
14,995,340.3090 58,543.6920 196,334.6450
Item 6: EXHIBITS AND REPORTS ON FORM 8-K
(a) See Index to Exhibits immediately following the signature page.
(b) No reports on Form 8-K have been filed during the quarter ended
June 30, 1995.
-14-
<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.
AMCOL INTERNATIONAL CORPORATION
Date: July 24, 1995 /s/ John Hughes
------------------------------ ----------------------------------
John Hughes
President and Chief Executive Officer
Date: July 24, 1995 /s/ Paul G. Shelton
------------------------------ ----------------------------------
Paul G. Shelton
Senior Vice President and Chief
Financial Officer
-15-
<PAGE>
INDEX TO EXHIBITS
EXHIBIT
NUMBER
- ------
3.1 Restated Certificate of Incorporation of the Company(5)
3.2 Bylaws of the Company(1)
4 Article Fourth of the Company's Restated Certificate of
Incorporation(5)
10.1 American Colloid Company 1983 Incentive Stock Option Plan(1); as
amended(3)
10.2 American Colloid Company Pension Plan(3)
10.3 American Colloid Company Salaried Employees' Savings Plan and
Trust(1); as amended(4)
10.4 Executive Medical Reimbursement Plan(1)
10.5 Lease Agreement for office space dated September 29, 1986 between the
Company and American National Bank and Trust Company of Chicago(1);
as amended(8)
10.6 American Colloid Company 1987 Non-Qualified Stock Option Plan (2); as
amended(6)
10.7 Change in Control Agreement dated April 1, 1994 by and between
Registrant and John Hughes(6)
10.8 Change in Control Agreement dated April 1, 1994 by and between
Registrant and Paul G. Shelton(6)
10.9 Change in Control Agreement dated December 15, 1992 by and between
Registrant and Robert C. Steele(4)
10.10 Change in Control Agreement dated December 21, 1992 by and between
Lawrence E. Washow(4)
10.11 Change in Control Agreement dated December 15, 1992 by and between
Registrant and Roger P. Palmer(4)
10.12 Change in Control Agreement dated January 24, 1994 by and between
Registrant and Peter L. Maul(6)
10.13 American Colloid Company Dividend Reinvestment and Stock Purchase Plan
(4); as amended(6)
10.14 American Colloid Company 1993 Stock Plan(6)
10.15 Credit Agreement by and among American Colloid Company and Harris
Trust and Savings Bank, individually and as agent, NBD Bank, LaSalle
National Bank and the Northern Trust Company dated October 4, 1994(7)
10.16 Note Agreement dated October 1, 1994 between American Colloid Company
and Principal Mutual Life Insurance Company(7)
27 Financial Data Schedule
___________________
(1) Exhibit is incorporated by reference to the Registrant's Form 10 filed with
the Securities and Exchange Commission on July 27, 1987.
(2) Exhibit is incorporated by reference to the Registrant's Form 10-K filed
with the Securities and Exchange Commission for the year ended December 31,
1988.
(3) Exhibit is incorporated by reference to the Registrant's Form 10-K filed
with the Securities and Exchange Commission for the year ended December 31,
1989.
(4) Exhibit is incorporated by reference to the Registrant's Form 10-K filed
with the Securities and Exchange Commission for the year ended December 31,
1992.
(5) Exhibit is incorporated by reference to the Registrant's Form S-3 filed
with the Securities and Exchange Commission on September 15, 1993.
(6) Exhibit is incorporated by reference to the Registrant's Form 10-K filed
with the Securities and Exchange Commission for the year ended December 31,
1993.
(7) Exhibit is incorporated by reference to the Registrant's Form 10-Q filed
with the Securities and Exchange Commission for the quarter ended September
30, 1994.
(8) Exhibit is incorporated by reference to the Registrant's Form 10-K filed
with the Securities and Exchange Commission for the year ended December 31,
1994.
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