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, 1998
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)
<TABLE>
<S> <C>
Delaware 36-0724340
(State or other jurisdiction of incorporation or organization) (IRS Employer Identification No.)
</TABLE>
1500 West Shure Drive, Suite 500, Arlington Heights, Illinois 60004-7803
(Address of principal executive offices) (Zip Code)
(847) 394-8730
(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
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 17, 1998
(Common stock, $.01 par value) 27,911,455
<PAGE>
AMCOL INTERNATIONAL CORPORATION
INDEX
Part I - Financial Information
Item 1 Financial Statements
Condensed Consolidated Balance Sheet -
June 30, 1998 and December 31, 1997 1
Condensed Consolidated Statement of Operations -
six months and three months ended June 30, 1998 and 1997 2
Condensed Consolidated Statement of Cash Flows -
six months ended June 30, 1998 and 1997 3
Notes to Condensed Consolidated Financial Statements 4
Item 2 Management's Discussion and Analysis of Financial
Condition and Results of Operations 6
Part II - Other Information
Item 4 Submission of Matters to a Vote of Security Holders 12
Item 6 Exhibits and Reports on Form 8-K 12
<PAGE>
Part I, Item I - FINANCIAL INFORMATION
AMCOL INTERNATIONAL CORPORATION AND SUBSIDIARIES
CONDENSED CONSOLIDATED BALANCE SHEET
(Unaudited)
(In thousands)
ASSETS
<TABLE>
<CAPTION>
June 30, December 31,
1998 1997
--------------------- -------------------
Current assets: *
<S> <C> <C>
Cash and cash equivalents $ 7,158 $ 3,077
Accounts receivable, net 97,453 89,611
Inventories 52,180 49,389
Prepaid expenses 4,972 5,109
Current deferred tax asset 3,070 3,084
Total current assets 164,833 150,270
Investment in and advances to joint ventures 4,537 3,035
Property, plant, equipment and mineral reserves 314,714 318,475
Less accumulated depreciation 148,450 143,151
166,264 175,324
Intangible assets, net 17,100 18,101
Other long-term assets, net 1,125 4,279
$ 353,859 $ 351,009
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Notes payable and current maturities of debt $ 18,757 $ 15,024
Accounts payable 24,201 24,902
Accrued liabilities 32,951 27,315
Total current liabilities 75,909 67,241
Long-term debt 91,267 94,425
Deferred credits and other liabilities 13,355 13,400
Stockholders' equity:
Common stock 320 320
Additional paid-in capital 75,971 75,939
Foreign currency translation adjustment (1,503) (1,749)
Retained earnings 117,681 111,588
Treasury stock (19,141) (10,155)
173,328 175,943
$ 353,859 $ 351,009
</TABLE>
*Condensed from audited financial statements.
The accompanying notes are an integral part of these
condensed financial statements.
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,
---------------------------------- -----------------------------------
1998 1997 1998 1997
--------------- --------------- --------------- ---------------
<S> <C> <C> <C> <C>
Net sales $ 247,192 $ 221,408 $ 125,635 $ 113,490
Cost of sales 196,572 175,894 98,550 89,787
Gross profit 50,620 45,514 27,085 23,703
General, selling and administrative
expenses 31,784 28,744 16,094 14,237
Operating profit 18,836 16,770 10,991 9,466
Other income (expense):
Interest expense, net (4,001) (4,360) (1,890) (2,198)
Other income, net (435) (580) (104) (475)
(4,436) (4,940) (1,994) (2,673)
Income before income taxes 14,400 11,830 8,997 6,793
Income taxes 5,184 4,375 3,239 2,511
Net income $ 9,216 $ 7,455 5,758 4,282
Weighted average common shares 28,353,185 28,512,471 28,216,067 28,486,898
Weighted average common and
common equivalent shares 28,940,594 29,148,293 28,766,742 29,111,892
Earnings per share
Basic $ .33 $ .26 $ .20 $ .15
Diluted $ .32 $ .26 $ .20 $ .15
Dividends declared per share $ .11 $ .10 $ .055 $ .053
</TABLE>
The accompanying notes are an integral part of these
condensed financial statements.
<PAGE>
AMCOL INTERNATIONAL CORPORATION AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENT OF CASH FLOWS
(Unaudited)
(In thousands)
<TABLE>
<CAPTION>
Six Months Ended
June 30,
----------------------------------------------
1998 1997
-------------------- --------------------
Cash flow from operating activities:
<S> <C> <C>
Net income $ 9,216 $ 7,455
Adjustments to reconcile net income to net cash
provided by operating activities:
Depreciation, depletion, and amortization 16,220 15,347
Other 1,171 (406)
(Increase)/decrease in current assets (11,656) 707
Increase/(decrease) in current liabilities 4,935 761
Net cash provided by operations 19,886 23,864
Cash flow from investing activities:
Acquisition of land, mineral reserves,
depreciable and intangible assets (15,336) (13,509)
Sale of product line and mineral reserves 13,176 -
Other (2,143) (406)
Net cash used in investing activities (4,303) (13,915)
Cash flow from financing activities:
Net change in outstanding debt 575 (4,626)
Dividends paid (3,123) (2,848)
Treasury stock transactions (8,954) (1,352)
Net cash provided (used) by financing activities (11,502) (8,826)
Net increase (decrease) in cash and cash equivalents 4,081 1,123
Cash and cash equivalents at beginning of period 3,077 3,054
Cash and cash equivalents at end of period $ 7,158 $ 4,177
Supplemental Disclosure of Cash Flows Information
Actual cash paid for:
Interest $ 4,110 $ 4,327
Income taxes $ 1,793 $ 3,272
</TABLE>
The accompanying notes are an integral part of these
condensed financial statements.
<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, 1997, 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, 1997, has been derived from and does not include all the
disclosures contained in the audited consolidated financial statements for the
year ended December 31, 1997. The information furnished herein includes all
adjustments which are, in the opinion of management, necessary for a fair
statement of the financial position and operating results of the interim
periods, 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 1997 Form 10-K which accompanies the 1997 Corporate
Report.
The results of operations for the six-month period ended June 30, 1998, are
not necessarily indicative of the results to be expected for the full year.
Note 2: INVENTORIES
Inventories at June 30, 1998 have been valued using the same methods
as at December 31, 1997. The composition of inventories at June 30, 1998
and December 31, 1997, was as follows:
<TABLE>
<CAPTION>
June 30, 1998 December 31, 1997
----------------------- -------------------------
<S> <C> <C>
Crude stockpile and in-process inventories $ 37,389 $ 34,675
Other raw material, container and supplies inventories 14,791 14,714
$ 52,180 $ 49,389
</TABLE>
Note 3: EARNINGS PER SHARE
Basic earnings per share is computed by dividing net income by the weighted
average number of common shares outstanding. Diluted earnings per share is
computed by dividing the net income by the weighted average common shares
outstanding after consideration of the dilutive effect of stock options
outstanding at the end of each period. The 1997 number of shares and earnings
per share have been restated to reflect the three-for-two stock split in
December 1997 and the adoption of SFAS No. 128.
<PAGE>
AMCOL INTERNATIONAL CORPORATION AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(Unaudited)
(In thousands)
Note 4: DERIVATIVES
From time to time, the Company uses financial derivatives, principally
swaps, forward contracts and options in its management of foreign currency and
interest rate exposures. These contracts hedge transactions and balances for
periods consistent with committed exposures. As of June 30, 1998, derivatives
outstanding were related to foreign currency hedging and an interest rate swap
with a notional amount on $15 million of the outstanding revolving credit.
Note 5: COMPREHENSIVE INCOME
During 1998, the Company adopted Statement of Financial Accounting
Standards ('SFAS") No. 130, "Reporting Comprehensive Income". SFAS No. 130
establishes standards for the reporting and display of comprehensive income and
its components (revenues, expenses, gains and losses) in a full set of general
purpose financial statements, and requires a total for comprehensive income to
be provided in condensed financial statements of interim periods. Comprehensive
income includes all changes in stockholders' equity during the period except
those relating from investments by owners and distributions to owners.
Comprehensive income for the three- and six-month periods ended June 30, 1998
and 1997, consisted of the following:
<TABLE>
<CAPTION>
Six Months Ended Three Months Ended
June 30, June 30,
1998 1997 1998 1997
<S> <C> <C> <C> <C>
Net income $ 9,216 $ 7,455 $ 5,758 $ 4,282
Other comprehensive income
Foreign currency translation adjustment 246 (1,949) (301) 684
Comprehensive income $ 9,462 $ 5,506 $ 5,457 $ 4,966
</TABLE>
<PAGE>
Item II - 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 the Company's
financial position and operating results during the periods included in the
accompanying condensed consolidated financial statements.
Six Months Ended June 30, 1998 vs. 1997
Net sales increased by $25.8 million, or 11.6%, while gross profit
increased by $5.1 million, or 11.2%, and operating profit increased by $2.1
million, or 12.3%. Higher utilization of polymer plant capacity and better
results from the minerals segment accounted for most of the improvement in sales
and profits. Net interest expense decreased by $.4 million, or 8.2%, as a result
of lower average debt levels. Net income increased $1.8 million, or 23.6%, over
the prior-year period. Earnings were $.32 per diluted share for the 1998 period,
compared with $.26 per diluted share for the prior-year period on slightly fewer
weighted average shares outstanding.
A brief discussion by business segment follows:
<TABLE>
<CAPTION>
Six Months Ended June 30,
-------------------------------------------------------------------------------------
1998 1997 1998 vs. 1997
------------------------- ---------------------- ---------------------------
Absorbent Polymers (Dollars in Thousands) $ Change % Change
<S> <C> <C> <C> <C> <C> <C>
Net sales $ 106,703 100.0% $ 90,202 100.0% $ 16,501 18.3%
Cost of sales 85,448 80.1% 71,779 79.6%
Gross profit 21,255 19.9% 18,423 20.4% 2,832 15.4%
General, selling and
administrative expenses 6,161 5.8% 5,620 6.2% 541 9.6%
Operating profit 15,094 14.1% 12,803 14.2% 2,291 17.9%
</TABLE>
Revenues increased by $16.5 million, or 18.3%, over the prior year.
Approximately 52% of the revenue growth was acquisition related. Gross profit
margins decreased by 50 basis points from the prior year, primarily as a result
of the lower margin associated with the acquired business.
<TABLE>
<CAPTION>
Six Months Ended June 30,
-------------------------------------------------------------------------------------
1998 1997 1998 vs. 1997
------------------------- ---------------------- ---------------------------
Minerals (Dollars in Thousands) $ Change % Change
<S> <C> <C> <C> <C> <C> <C>
Net sales $ 83,883 100.0% $ 77,821 100.0% $ 6,062 7.8%
Cost of sales 69,640 83.0% 65,316 83.9%
Gross profit 14,243 17.0% 12,505 16.1% 1,738 13.9%
General, selling and
administrative expenses 8,502 10.1% 7,796 10.0% 706 9.1%
Operating profit 5,741 6.9% 4,709 6.1% 1,032 21.9%
</TABLE>
<PAGE>
AMCOL INTERNATIONAL CORPORATION AND SUBSIDIARIES
MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
CONDITION AND RESULTS OF OPERATIONS
(Continued)
Sales increased by $6.1 million, or 7.8%, from the prior-year period. Much
of the sales growth came from an acquired cat litter business in the United
Kingdom, which has yet to be profitable. Sales to the metalcasting industry
continue to show improvement over the prior year as well. Gross profit margins
improved by 90 basis points, despite the current U.K. cat litter production
difficulties. A more profitable domestic product mix accounted for the
improvement. General, selling and administrative expenses in the international
markets have increased, offsetting cost reductions made domestically.
On April 20, the Company sold its Mounds, IL, plant and mineral reserves,
as well as its other fuller's earth reserves in Paris, TN, and Rock Springs, NV.
The divestiture is expected to result in a loss of sales of approximately $15
million per year with little adverse impact on the gross profit. The Company
will no longer sell fuller's earth minerals domestically as agricultural
carriers, oil and grease absorbents or traditional cat litter, other than to the
specialty pet and farm and fleet markets.
<TABLE>
<CAPTION>
Six Months Ended June 30,
-------------------------------------------------------------------------------------
1998 1997 1998 vs. 1997
------------------------- ---------------------- ---------------------------
Environmental (Dollars in Thousands) $ Change % Change
<S> <C> <C> <C> <C> <C> <C>
Net sales $ 42,241 100.0% $ 39,343 100.0% $ 2,898 7.4%
Cost of sales 28,845 68.3% 26,538 67.5%
Gross profit 13,396 31.7% 12,805 32.5% 591 4.6%
General, selling and
administrative expenses 10,520 24.9% 8,874 22.6% 1,646 18.5%
Operating profit 2,876 6.8% 3,931 9.9% (1,055) (26.8%)
</TABLE>
Sales increased by $2.9 million, or 7.4%, with approximately 60% of the
increase coming from acquisitions. Gross profit margins declined by 80 basis
points, primarily as a result of lower margins on overseas sales due to the
stronger U.S. and U.K. currencies. General, selling and administrative expenses
increased by $1.6 million, or 18.5%, reflecting higher international marketing
costs and expanded international infrastructure.
<TABLE>
<CAPTION>
Six Months Ended June 30,
-------------------------------------------------------------------------------------
1998 1997 1998 vs. 1997
------------------------- ---------------------- ---------------------------
Transportation (Dollars in Thousands) $ Change % Change
<S> <C> <C> <C> <C> <C> <C>
Net sales $ 14,366 100.0% $ 14,042 100.0% $ 324 2.3%
Cost of sales 12,640 88.0% 12,261 87.3%
Gross profit 1,726 12.0% 1,781 12.7% (55) (3.1%)
General, selling and
administrative expenses 1,000 7.0% 1,015 7.2% (15) (1.5%)
Operating profit 726 5.0% 766 5.5% (40) (5.2%)
</TABLE>
<PAGE>
AMCOL INTERNATIONAL CORPORATION AND SUBSIDIARIES
MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
CONDITION AND RESULTS OF OPERATIONS
(Continued)
Revenues increased $.3 million, or 2.3%. The 1997 period benefited from a
temporary shift from rail shipments to truck shipments. Gross profit margins
declined by 70 basis points as a result of lower aggregate brokerage volume and
margins.
<TABLE>
<CAPTION>
Six Months Ended June 30,
-------------------------------------------------------------------------------------
1998 1997 1998 vs. 1997
------------------------- ---------------------- ---------------------------
Corporate (Dollars in Thousands) $ Change % Change
General, selling and
<S> <C> <C> <C> <C>
administrative expenses $ 5,601 $ 5,439 $ 162 3.0%
Operating loss (5,601) (5,439) (162) 3.0%
</TABLE>
Corporate costs include management information systems, human resources,
investor relations and corporate communications, corporate finance, and
corporate governance costs. The $.2 million increase in costs is primarily
attributable to the development and launch of the Company's nanocomposite
technology.
Three Months Ended June 30, 1998 vs. 1997
Net sales increased by $12.1 million, or 10.7%, while gross profit
increased by $3.4 million, or 14.3%, and operating profit increased by $1.5
million, or 16.1%. Net interest expense decreased by $.3 million, or 14.0%. Net
income increased by $1.5 million, or 34.4%, over the prior-year quarter.
Earnings were $.20 per diluted share for 1998 quarter compared with $.15 per
diluted share for the prior-year quarter on 1.2% fewer weighted average shares
outstanding. A brief discussion by business segment follows:
<TABLE>
<CAPTION>
Quarter Ended June 30,
-------------------------------------------------------------------------------------
1998 1997 1998 vs. 1997
------------------------- ---------------------- ---------------------------
Absorbent Polymers (Dollars in Thousands) $ Change % Change
<S> <C> <C> <C> <C> <C> <C>
Net sales $ 52,047 100.0% $ 45,041 100.0% $ 7,006 15.6%
Cost of sales 41,416 79.6% 36,211 80.4%
Gross profit 10,631 20.4% 8,830 19.6% 1,801 20.4%
General, selling and
administrative expenses 3,071 5.9% 2,605 5.8% 466 17.9%
Operating profit 7,560 14.5% 6,225 13.8% 1,335 21.4%
</TABLE>
Revenues increased by $7.0 million, or 15.6%, over the prior year.
Approximately 65% of the revenue increase was acquisition related. Volume growth
is anticipated to resume, though the pace of growth is likely to slow from that
of the previous year. Gross profit margins improved by 80 basis points over the
prior year, primarily as a result of lower raw material costs and improved
capacity utilization.
<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,
-------------------------------------------------------------------------------------
1998 1997 1998 vs. 1997
------------------------- ---------------------- ---------------------------
Minerals (Dollars in Thousands) $ Change % Change
<S> <C> <C> <C> <C> <C> <C>
Net sales $ 39,495 100.0% $ 38,563 100.0% $ 932 2.4%
Cost of sales 32,571 82.5% 32,163 83.4%
Gross profit 6,924 17.5% 6,400 16.6% 524 8.2%
General, selling and
administrative expenses 4,169 10.6% 3,921 10.2% 248 6.3%
Operating profit 2,755 6.9% 2,479 6.4% 276 11.1%
</TABLE>
Sales increased by $.9 million, or 2.4%, over the prior-year period,
primarily as a result of the additional sales from the acquired U.K. cat litter
business. Gross profit margins improved by 90 basis points, despite production
losses from the U.K. cat litter business. General, selling and administrative
expenses in 1998 increased by 6.3% as a result of higher spending in overseas
markets, offsetting cost reductions in the United States.
<TABLE>
<CAPTION>
Quarter Ended June 30,
-------------------------------------------------------------------------------------
1998 1997 1998 vs. 1997
------------------------- ---------------------- ---------------------------
Environmental (Dollars in Thousands) $ Change % Change
<S> <C> <C> <C> <C> <C> <C>
Net sales $ 26,546 100.0% $ 22,778 100.0% $ 3,768 16.5%
Cost of sales 17,911 67.5% 15,211 66.8%
Gross profit 8,635 32.5% 7,567 33.2% 1,068 14.1%
General, selling and
administrative expenses 5,813 21.9% 4,565 20.0% 1,248 27.3%
Operating profit 2,822 10.6% 3,002 13.2% (180) (6.0%)
</TABLE>
Sales increased by $3.8 million, or 16.5%. Approximately 46% of the sales
increase came from acquisitions. Gross profit margins declined by 70 basis
points primarily as a result of the strong U.S. dollar and British pound.
General, selling and administrative expenses increased by $1.2 million,
reflecting higher international marketing costs and increased infrastructure
costs associated with building a stronger international presence.
<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,
-------------------------------------------------------------------------------------
1998 1997 1998 vs. 1997
------------------------- ---------------------- ---------------------------
Transportation (Dollars in Thousands) $ Change % Change
<S> <C> <C> <C> <C> <C> <C>
Net sales $ 7,548 100.0% $ 7,108 100.0% $ 440 6.2%
Cost of sales 6,653 88.1% 6,202 87.3%
Gross profit 895 11.9% 906 12.7% (11) (1.2%)
General, selling and
administrative expenses 515 6.8% 511 7.2% 4 0.8%
Operating profit 380 5.1% 395 5.5% (15) (3.8%)
</TABLE>
Revenues increased 6.2%, primarily as a result of increased business
unrelated to the Company's other business activities. Lower gross margins
reflected increased competition in the brokerage business.
<TABLE>
<CAPTION>
Quarter Ended June 30,
-------------------------------------------------------------------------------------
1998 1997 1998 vs. 1997
------------------------- ---------------------- ---------------------------
Corporate (Dollars in Thousands) $ Change % Change
General, selling and
<S> <C> <C> <C> <C>
administrative expenses $ 2,526 $ 2,635 $ (109) (4.1)%
Operating income (loss) (2,526) (2,635) 109 4.1%
</TABLE>
Lower costs associated with the development and launch of the nanocomposite
business accounted for approximately half of the reduction in corporate
expenses.
<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, 1998, the Company had outstanding debt of $110.0 million
(including both long- and short-term debt) and cash of $7.2 million compared
with $109.4 million in debt and $3.1 million in cash at December 31, 1997. The
long-term debt represented 34.5% of total capitalization at June 30, 1998,
compared with 34.9% at December 31, 1997.
The Company had a current ratio of 2.17-to-1 at June 30, 1998, with
approximately $88.9 million in working capital compared with 2.23-to-1 and $83.0
million, respectively, at December 31, 1997.
During 1998, the Company paid dividends of $3.1 million and acquired
property, plant and equipment and intangible assets totaling $15.3 million.
These expenditures, plus $9.0 million in net treasury share transactions, were
funded from operations and from the $13.1 million sale proceeds of the fuller's
earth business assets.
The Company had $40.2 million in unused, committed credit lines at June 30,
1998. These credit facilities, in conjunction with funds generated from
operations, are adequate to fund the capital expenditure program approved by the
board of directors at this time.
Forward Looking Statements
This filing contains certain forward-looking statements regarding the
Company's expected performance for future periods and actual results for such
periods may materially differ. Such forward-looking statements are subject to
uncertainties, which include, but are not limited to, actual growth in AMCOL's
various markets, utilization of the Company's plants, customer concentration in
the absorbent polymers segment, operating costs, raw material prices, weather,
currency exchange rates, and delays in development, production and marketing of
new products, and other factors detailed from time to time in the Company's
annual report and other reports filed with the Securities and Exchange
Commission.
<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
12, 1998.
(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 AMCOL International Corporation:
<TABLE>
<CAPTION>
For Against
------------------------- -----------------------
<S> <C> <C>
Arthur Brown 23,663,291 235,480
John Hughes 23,650,041 248,730
Jay D. Proops 23,655,674 243,097
Lawrence E. Washow 23,636,537 262,234
Paul C. Weaver 23,660,727 238,044
</TABLE>
2. Amendment of the Company's Restated Certificate of
Incorporation to increase the number of shares of common
stock of the Company.
<TABLE>
<CAPTION>
For Against Abstain
----------------------- ----------------------- -----------------------
<S> <C> <C> <C>
22,633,794 873,302 394,675
</TABLE>
3. Approval of the Company's 1998 Long-Term Incentive Plan.
<TABLE>
<CAPTION>
For Against Abstain
----------------------- ----------------------- -----------------------
<S> <C> <C> <C>
16,821,207 4,720,889 458,529
</TABLE>
4. Ratification of Appointment of KPMG Peat Marwick LLP as
independent accountants for the Company for its 1998 fiscal
year.
<TABLE>
<CAPTION>
For Against Abstain
----------------------- ----------------------- -----------------------
<S> <C> <C> <C>
23,655,553 6,313 236,905
</TABLE>
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, 1998. SIGNATURES
<PAGE>
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 20, 1998 /s/ John Hughes
John Hughes
President and Chief Executive Officer
Date: July 20, 1998 /s/ Paul G. Shelton
Paul G. Shelton
Senior Vice President and Chief Financial Officer
<PAGE>
INDEX TO EXHIBITS
Exhibit
Number
3.1 Restated Certificate of Incorporation of the Company (5), as amended (10),
as amended
3.2 Bylaws of the Company (10)
4 Article Four of the Company's Restated Certificate of Incorporation (5), as
amended
10.1 AMCOL International Corporation 1983 Incentive Stock Option Plan (1); as
amended (3)
10.2 Executive Medical Reimbursement Plan (1)
10.3 Lease Agreement for office space dated September 29, 1986, between the
Company and American National Bank and Trust Company of Chicago; (1) First
Amendment dated June 2, 1994 (8); Second Amendment dated June 2, 1997 (13)
10.4 AMCOL International Corporation 1987 Non-Qualified Stock Option Plan (2);
as amended (6)
10.5 Change in Control Agreement dated April 1, 1997, by and between Registrant
and John Hughes (12)
10.6 Change in Control Agreement dated April 1, 1997, by and between Registrant
and Paul G. Shelton (12)
10.7 Change in Control Agreement dated February 16, 1998, by and between
Registrant and Lawrence E. Washow (14)
10.8 Change in Control Agreement dated February 7, 1996, by and between
Registrant and Roger P. Palmer (10)
10.9 Change in Control Agreement dated April 1, 1997, by and between Registrant
and Peter L. Maul (12)
10.10AMCOL International Corporation Dividend Reinvestment and Stock Purchase
Plan (4); as amended (6)
10.11AMCOL International Corporation 1993 Stock Plan, as amended and restated
(10)
10.12Credit Agreement by and among AMCOL International Corporation 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); as
amended, First Amendment to Credit Agreement dated September 25, 1995 (9),
as amended, Second Amendment to Credit Agreement dated March 28, 1996, and
Third Amendment to Credit Agreement dated September 12, 1996 (11)
10.13Note Agreement dated October 1, 1994, between AMCOL International
Corporation and Principal Mutual Life Insurance Company, (7); as amended,
First Amendment of Note Agreement dated September 30, 1996 (11)
10.14Change in Control Agreement dated August 21, 1996 by and between
Registrant and Frank B. Wright, Jr. (11)
10.15Change in Control Agreement dated February 17, 1998 by and between
Registrant and Gary L. Castagna (14)
10.16 AMCOL International Corporation 1998 Long-Term Incentive Plan (15)
21 Subsidiaries of the Company
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,
1993.
(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.
(9) 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, 1995.
(10) 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,
1995.
(11) 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,
1996.
(12) Exhibit is incorporated by reference to the Registrant's Form 10-Q filed
with the Securities and Exchange Commission for the quarter ended March 31,
1997.
(13) Exhibit is incorporated by reference to the Registrant's Form 10-Q filed
with the Securities and Exchange Commission for the quarter ended June 30,
1997.
(14) 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,
1997.
(15) Exhibit is incorporated by reference to the Registrant's Form S-8 (File
333-56017) filed with the Securities and Exchange Commission on June 4,
1998
<PAGE>
Exhibit 4
CERTIFICATE OF AMENDMENT
OF
RESTATED CERTIFICATE OF INCORPORATION
OF
AMCOL INTERNATIONAL CORPORATION
AMCOL International Corporation, a corporation organized and existing under
and by virtue of the General Corporation Law of the State of Delaware (the
"Corporation"), DOES HEREBY CERTIFY:
FIRST: That the Board of Directors of the Corporation adopted resolutions
proposing and declaring advisable the following amendment to the Restated
Certificate of Incorporation of the Corporation: RESOLVED, that the first
paragraph of Article FOURTH of the Company's Restated Certificate of
Incorporation be amended to read as set forth below:
FOURTH. The total number of shares of stock which the corporation shall
have authority to issue is One Hundred Million (100,000,000), and the par value
of each share is $0.01, amounting in the aggregate to One Million Dollars
($1,000,000).
SECOND: That on May 12, 1998, pursuant to resolution of the Board of
Directors, the annual meeting of stockholders of the Corporation was duly called
and held, at which meeting the necessary number of shares as required by statute
were voted in favor of the amendment.
THIRD: That the aforesaid amendment was duly adopted in accordance with the
applicable provisions of Section 242 of the General Corporation Law of the State
of Delaware.
IN WITNESS WHEREOF, said AMCOL International Corporation has caused this
certificate to be signed by Clarence O. Redman, its Secretary, this 12th day of
May, 1998 .
AMCOL INTERNATIONAL CORPORATION
By: /s/ Clarence O. Redman
Secretary
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
(Replace this text with the legend)
</LEGEND>
<CIK> 0000813621
<NAME> AMCOL International Corporation
<MULTIPLIER> 1,000
<CURRENCY> USD
<S> <C>
<PERIOD-TYPE> 3-MOS
<FISCAL-YEAR-END> DEC-31-1998
<PERIOD-START> JAN-1-1998
<PERIOD-END> JUN-30-1998
<EXCHANGE-RATE> 1.00
<CASH> 7,158
<SECURITIES> 0
<RECEIVABLES> 101,174
<ALLOWANCES> 3,721
<INVENTORY> 52,180
<CURRENT-ASSETS> 164,833
<PP&E> 314,714
<DEPRECIATION> 148,450
<TOTAL-ASSETS> 353,859
<CURRENT-LIABILITIES> 75,909
<BONDS> 0
0
0
<COMMON> 320
<OTHER-SE> 0
<TOTAL-LIABILITY-AND-EQUITY> 353,859
<SALES> 247,192
<TOTAL-REVENUES> 247,192
<CGS> 1960572
<TOTAL-COSTS> 228,356
<OTHER-EXPENSES> 435
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 4,001
<INCOME-PRETAX> 14,400
<INCOME-TAX> 5,184
<INCOME-CONTINUING> 9,216
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 9,216
<EPS-PRIMARY> .33
<EPS-DILUTED> .32
</TABLE>
