SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-Q/A
(Mark One)
(x) QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended March 31, 2000
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>
<CAPTION>
<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 April 14, 2000
(Common stock, $.01 par value) 26,949,038
<PAGE>
Item 5. Other Information
AMCOL INTERNATIONAL CORPORATION AND SUBSIDIARIES
UNAUDITED PRO FORMA CONSOLIDATED FINANCIAL INFORMATION
The following Unaudited Pro Forma Consolidated Financial Information gives
effect to the consummation of AMCOL's sale of its SAP business to BASF and its
proposed use of proceeds as more fully described in AMCOL's Proxy Statement
dated May 1, 2000, as if consummated: on March 31, 2000, in the case of the
Unaudited Pro Forma Balance Sheet; and on January 1, 2000 in the case of the
Unaudited Pro Forma Statements of Operations for the three months ended
March 31, 2000.
The Unaudited Pro Forma Consolidated Financial Information is presented for
illustrative purposes only and does not necessarily reflect what AMCOL's
financial position or results of operations would have been if the sale
transaction and the proposed use of proceeds had been consummated on the above
referenced dates, and may not be indicative of AMCOL's future performance, nor
does it give effect to any transactions other than the sale transaction and the
proposed use of proceeds as described in the Notes to the Unaudited Pro Forma
Consolidated Financial Information or AMCOL's results of operations since
March 31, 2000.
The Unaudited Pro Forma Balance Sheet at March 31, 2000 is based upon
AMCOL's financial position at March 31, 2000. The Unaudited Pro Forma Statements
of Operations for the three months years ended March 31, 2000 are based upon
AMCOL's results of operations for this three month period.
The Unaudited Pro Form Consolidated Financial Information is qualified in
its entirety by, and should be read in conjunction with, AMCOL's unaudited
consolidated financial statements and the notes thereto and Management's
Discussion and Analysis of Financial Condition and Results of Operations
included elsewhere in this Quarterly Report on Form 10-Q.
<PAGE>
AMCOL INTERNATIONAL CORPORATION AND SUBSIDIARIES
UNAUDITED PRO FORMA CONSOLIDATED FINANCIAL INFORMATION
BALANCE SHEET
As of March 31, 2000
(in thousands)
<TABLE>
<CAPTION>
Reclassify SAP Business
To Discontinued Pro Forma
Historical Operations (E) Adjustment Pro Forma
Current assets:
<S> <C> <C> <C> <C>
Cash and cash equivalents $ 5,467 $ 844 $ 1,926 (K) $ 8,237
Accounts receivable:
Trade, net 93,769 (47,682) - 46,087
Other 4,927 (2,347) - 2,580
Inventories 47,506 (14,886) - 32,620
Prepaid expenses 7,239 (243) (1,926) (K) 5,070
Current deferred tax asset 6,924 (541) - 6,383
Net current assets of discontinued operations - 41,660 (41,660) (H) -
Total current assets 165,832 (23,195) (41,660) 100,977
Investment in and advances to joint ventures 10,064 - - 10,064
Property, plant, equipment and mineral rights and reserves:
Land and mineral rights and reserves 12,884 (2,388) - 10,496
Depreciable assets 340,222 (154,323) - 185,899
353,106 (156,711) - 196,395
Less accumulated depreciation 184,225 (76,372) - 107,853
168,881 (80,339) - 88,542
Other assets:
Goodwill and other intangible assets, net 522 - - 522
Long-term prepayments and other assets 2,091 (936) - 1,155
Deferred tax asset 321 - 3,356 (J) 3,677
Net non-current assets of discontinued operations - 79,638 (79,638) (H) -
Total assets $ 347,711 $ (24,832) $(117,942) $204,937
Current liabilities:
Current maturities of long-term obligations $ 22 $ - $ - $ 22
Accounts payable 16,857 (6,811) - 10,046
Accrued income taxes 6,791 (4,133) - 2,658
Accrued liabilities 32,417 (12,251) - 20,166
Total current liabilities 56,087 (23,195) - 32,892
Long-term debt 91,529 - (41,098) (C) 50,431
Deferred income tax liabilities - (3,356) 3,356 (J) -
Other liabilities 9,549 (297) - 9,252
9,549 (3,653) 3,356 9,252
Stockholders' equity:
Common stock 320 - - 320
Additional paid-in-capital 76,646 - - 76,646
Foreign currency translation adjustment (3,099) 2,016 - (1,083)
Retained earnings 146,122 - 313,681 (B) 459,803
Distribution to stockholders - - (393,881) (A) (393,881)
Treasury stock (29,443) - - (29,443)
Total stockholders' equity 190,546 2,016 (80,200) 112,362
Total liabilities and stockholders' equity $ 347,711 $ (24,832) $(117,942) $204,937
</TABLE>
<PAGE>
AMCOL INTERNATIONAL CORPORATION AND SUBSIDIARIES
UNAUDITED PRO FORMA CONSOLIDATED FINANCIAL INFORMATION
STATEMENT OF OPERATIONS
Three Months Ended March 31, 2000
(in thousands, except share and per share amounts)
<TABLE>
<CAPTION>
Reclassify SAP
Business to
Discontinued Pro Forma
Historical Operation Adjustment Pro Forma
<S> <C> <C> <C> <C>
Net sales $ 119,020 $ (50,442) (E) $ - $ 68,578
Cost of sales 91,639 (39,967) (E) - 51,672
Gross profit 27,381 (10,475) - 16,906
General, selling and administrative expenses 17,132 (4,135) (E) - 12,997
Write down of impaired assets - - - -
Operating profit (loss) 10,249 (6,340) - 3,909
Other income (expense):
Interest expense, net (1,180) (280) (E) 875 (F) (585)
Other, net (77) 26 (E) - (51)
Total other income (expense) (1,257) (254) 875 (636)
Income (loss) before income taxes and joint ventures 8,992 (6,594) 875 3,273
Income taxes 3,385 (2,482) (I) 329 (G) 1,232
Income (loss) before joint ventures 5,607 (4,112) 546 2,041
Equity interests in income of joint ventures 130 - - 130
Income (loss) from continuing operations $ 5,737 $ (4,112) $ 546 $ 2,171
Weighted average common shares 26,908,449 26,908,449
Weighted average common and common
equivalent shares 27,429,410 27,429,410
Earnings per share:
Basic $ 0.21 $ 0.08
Diluted $ 0.21 $ 0.08
</TABLE>
<PAGE>
Notes to Unaudited Pro Forma Consolidated Financial Information
(A) For proforma purposes at March 31, 2000, the total distribution to
stockholders is calculated below. The sales price is net of estimated
transaction costs of $12,400,000. (L).
(in thousands, except share and per share information)
Sales price, net of estimated transaction costs $ 644,100 (C)
Less intercompany indebtedness 41,098
Net cash proceeds 603,002
Income taxes 209,121
Distribution to stockholders $ 393,881
Common stock outstanding 26,949,038
Distribution per share $ 14.62
The distribution per share was calculated based on the factors set forth
above, including the amount of intercompany indebtedness and the number of
shares of common stock outstanding at March 31, 2000. The actual amount of
any distribution will be determined after the closing of the sale
transaction and will be based on the amount of indebtedness of the SAP
Business to be repaid and the number of shares of common stock outstanding
at the time of distribution. The number of shares of common stock
outstanding will increase in the event an AMCOL director or employees
exercise vested outstanding options prior to the record date of the
distribution. The actual amount of any distribution will likely be
different from the amount indicated above.
(B) For pro forma purposes at March 31, 2000, gain on sale of the SAP Business
and resulting effect on equity is calculated below.
(in thousands, except share and per share information)
Sales price, net of transaction costs $ 644,100
Net investment in SAP Business 121,298
Gain before income taxes 522,802
Income taxes 209,121 (D)
Net gain on sale 313,681
Distribution to stockholders 393,881
Net decrease in equity $ (80,200)
(C) The intercompany indebtedness as of the date of closing will reduce the
cash received on the date of closing but will be paid by BASF the day
following the closing date. This amount will be used to repay a portion of
the AMCOL's long-term debt and could vary based on the indebtedness level
at the closing date. As of March 31, 2000 the intercompany indebtedness was
$41,098,000. Increases or decreases in this amount from the pro-forma
amount to the actual amount will proportionately effect interest expense in
future periods, as this amount will directly reduce long-term debt. For
every $1,000,000 of additional debt as of the date of closing annual
interest expense in future periods will decrease by $68,000.
(D) Tax expense for federal and state purposes is calculated at the effective
statutory rate at March 31, 2000 of 40%.
(E) To reclassify the SAP business as a discontinued operation as a result of
the proposed sale of the business.
(F) To record reduction in interest expense arising from the repayment of
indebtedness using the funds received from BASF to settle the intercompany
liability, as discussed in Note C. The reduction in interest expense is the
intercompany interest for the three months ended March 31, 2000.
(G) To record income tax benefit attributable to adjustment (F) at the 2000
effective rate of 37.64%.
(H) To remove the net assets of the SAP business.
<PAGE>
Notes to Unaudited Pro Forma Consolidated Financial Information (continued)
(I) To reclassify the SAP business as a discontinued operation as a result of
the proposed sale of the business. The difference in the income taxes of
the SAP business in the unaudited statements of operations is due to the
additional expenses related to intercompany royalties, intercompany
interest, corporate allocations and the use of a different tax rate. The
tax rate used in the pro-forma financial statements is a consolidated
effective tax rate whereas the tax rate used in the unaudited financial
statements of the SAP business is the effective tax rate for the SAP
business.
(J) To reclassify the net deferred tax asset.
(K) To record the recovery of deferred transaction-related costs from the gross
proceeds of the proposed sale.
(L) AMCOL intends to use the proceeds from the sale to reduce its long-term
debt. As a result of the prepayment, AMCOL will incur prepayment penalties
of approximately $1,300,000, which will be expensed when incurred and have
a tax effect of $520,000 (D). The prepayment penalty is not included in the
transaction costs of $12,400,000 and is not considered in the proforma
presentation.
<PAGE>
UNAUDITED FINANCIAL STATEMENTS OF THE SAP BUSINESS
The following are the unaudited comparative financial statements for the
SAP business. The unaudited financial statements have been derived from
historical financial data of AMCOL and include a balance sheet of the SAP
business as of March 31, 2000, and the related statements of operations and cash
flows for the three month period ending March 31, 2000. This financial
information does not necessarily reflect what the financial position and results
of operations of the SAP business would have been if such business were operated
as a separate, stand-alone entity for the periods presented, and may not be
indicative of the future performance of the SAP business.
The unaudited financial statements of the SAP business are qualified in
their entirety by, and should be read in conjunction with, AMCOL's unaudited
consolidated financial statements and the notes thereto and Management's
Discussion and Analysis of Financial Condition and Results of Operations
included elsewhere in this Quarterly Report on Form 10-Q.
<PAGE>
SAP BUSINESS
BALANCE SHEET
(Unaudited)
(in thousands)
<TABLE>
<CAPTION>
ASSETS March 31, 2000
Current assets:
<S> <C>
Cash and cash equivalents $ (844)
Accounts receivable:
Trade, less allowance for doubtful accounts of $1,836 47,682
Other 2,347
Inventories 14,886
Prepaid expenses 243
Current deferred tax asset 541
Total current assets 64,855
Investment in and advances to joint ventures -
Property, plant, equipment and mineral rights and reserves:
Land and mineral rights and reserves 2,388
Depreciable assets 154,323
156,711
Less accumulated depreciation 76,372
80,339
Long-term prepayments 936
Total assets $ 146,130
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Notes payable and current maturities of long-term obligations $ -
Accounts payable 6,811
Accrued income taxes 4,133
Accrued liabilities 12,251
Due to AMCOL 41,098
Total current liabilities 64,293
Deferred income tax liabilities 3,356
Other liabilities 297
3,653
Stockholders' equity:
Common stock 13,135
Additional paid-in-capital 2,235
Retained earnings 64,830
Cumulative translation adjustment (2,016)
78,184
Total liabilities and stockholders' equity $ 146,130
</TABLE>
See accompanying notes to unaudited financial statements.
<PAGE>
SAP BUSINESS
STATEMENT OF OPERATIONS
(Unaudited)
(in thousands)
<TABLE>
<CAPTION>
Three Months Ended
March 31, 2000
<S> <C>
Net sales $ 50,442
Cost of sales 39,967
Gross profit 10,475
General, selling and administrative expenses 4,135
Write down of intangible and long-term assets -
Operating profit 6,340
Other income (expense):
Intercompany interest expense (875)
Other interest income, net 280
Intercompany royalties (399)
Other, net (26)
(1,020)
Income before allocations 5,320
Corporate allocations (635)
Income before income taxes and minority interest 4,685
Income taxes 1,874
Net income $ 2,811
Retained earnings at the beginning of the period $ 62,019
Dividends paid -
Retained earnings at the end of the period $ 64,830
</TABLE>
See accompanying notes to unaudited financial statements.
<PAGE>
SAP BUSINESS
STATEMENT OF CASH FLOWS
(Unaudited)
(in thousands)
<TABLE>
<CAPTION>
Three Months Ended
March 31, 2000
Cash flows from operating activities:
<S> <C>
Net income $ 2,811
Adjustment to reconcile net income to net cash provided
by operating activities:
Depreciation and amortization 4,006
Loss on sale or transfer of depreciable assets -
Changes in assets and liabilities:
(Increase) decrease in:
Accounts receivable 4,731
Inventories (5,171)
Prepaid expenses (238)
Deferred income taxes -
Accounts payable (3,069)
Accrued income taxes (1,130)
Accrued liabilitities 2,659
Other liabilities 551
Net cash used in operating activities 5,150
Cash flows from investing activities:
Acquisition of depreciable assets (1,735)
Investment in/advance to subsidiary -
Foreign currency 7
Net cash used in investing activities (1,728)
Cash flows from financing activities:
Payment of cash dividends -
Issuance of notes payable -
Payment of notes payable (936)
Net payments to AMCOL (3,191)
Net cash provided by financing activities (4,127)
Net increase in cash and cash equivalents (705)
Cash and cash equivalents at the beginning of period (139)
Cash and cash equivalents at the end of period $ (844)
</TABLE>
See accompanying notes to unaudited financial statements.
<PAGE>
SAP BUSINESS
NOTES TO UNAUDITED FINANCIAL STATEMENTS
(In thousands)
Note 1: BASIS OF PRESENTATION
The financial information included herein has been prepared by management
without audit. 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 and all such adjustments are of a
normal recurring nature.
Note 2: INVENTORIES
Inventories are valued at the lower of cost or market. Cost is determined
by the first-in, first-out method. The composition of inventories at March 31,
2000, was as follows:
March 31, 2000
Finished Product Inventory $ 10,914
Stores Inventory 3,972
$ 14,886
Note 3: CORPORATE ALLOCATIONS
Corporate allocations include certain expenses of the corporate
headquarters, including salaries and benefits of AMCOL's officers, as well as
costs associated with AMCOL's corporate accounting, human resources and
information technology functions, which were incurred for the benefit of all of
AMCOL's operating units. Such costs have been allocated to the SAP business
based on the relationships of the sales, fixed assets and headcount, as
appropriate, of the SAP business to that of AMCOL as a whole. Management
believes that the methods used to allocate these corporate expenses to the SAP
business are reasonable.
<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: May 3, 2000 /s/ Lawrence E. Washow
Lawrence E. Washow
President and Chief Operating Officer
Date: May 3, 2000 /s/ Paul G. Shelton
Paul G. Shelton
Senior Vice President and Chief Financial Officer
and Principal Accounting Officer
