SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
_______________
FORM 10-Q
QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d)
OF THE SECURITIES EXCHANGE ACT OF 1934
_______________
For the quarter ended March 31, 1995 Commission File No. 0-16452
-------------- -------
A. P. GREEN INDUSTRIES, INC.
----------------------------
(Exact name of registrant as specified in its charter)
Delaware 43-0899374
-------- ----------
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
Green Boulevard, Mexico, Missouri 65265
--------------------------------- -----
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code: (314) 473-3626
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 registrant's classes of
common stock as of the latest practicable date: As of May 5, 1995, 4,028,532
shares of Common Stock, $1 par value, were outstanding.
Page 1 of 18
<PAGE>
A. P. GREEN INDUSTRIES, INC.
PART I. FINANCIAL INFORMATION
Item 1. FINANCIAL STATEMENTS
CONSOLIDATED STATEMENTS OF FINANCIAL POSITION (UNAUDITED)
March 31, December 31,
1995 1994
----------- -----------
(Dollars in thousands, except per share data)
ASSETS
Current Assets
Cash and cash equivalents $ 2,670 $ 9,637
Receivables (net of allowances -
1995, $2,064; 1994, $1,992) 39,927 43,728
Reimbursement due on paid asbestos
claims 17,033 11,475
Inventories 51,880 53,452
Projected insurance recovery on
asbestos claims 35,540 35,540
Deferred income taxes 4,883 5,355
Other 5,348 4,965
-------- --------
Total current assets 157,281 164,152
Property, plant and equipment, net 93,683 95,412
Non-current projected insurance
recovery on asbestos claims 95,654 97,344
Long-term pensions 9,183 9,166
Other assets 7,155 7,048
-------- --------
Total assets $362,956 $373,122
======== ========
LIABILITIES AND STOCKHOLDERS' EQUITY
Current Liabilities
Accounts payable $ 16,096 $ 22,874
Accrued expenses
Payrolls 5,577 6,044
Taxes other than on income 1,731 1,961
Insurance reserves 7,013 6,995
Current portion of projected
asbestos claims 35,793 35,793
Other 8,896 10,650
Current maturities of long-term debt 147 139
Income taxes 754 1,384
-------- --------
Total current liabilities 76,007 85,840
Deferred income taxes 15,369 15,677
Long-term non-pension benefits 15,382 15,270
Long-term pensions 12,641 12,472
Long-term debt 36,984 37,023
Non-current projected asbestos claims 98,086 99,802
-------- --------
Total liabilities 254,469 266,084
-------- --------
Minority Interest 110 -
Stockholders' Equity
Preferred stock - $1 par value;
authorized: 2,000,000 shares;
issued and outstanding: none - -
Common stock - $1 par value;
authorized: 10,000,000 shares;
issued: 4,476,879 in 1995 and
4,475,629 in 1994 4,477 4,476
Additional paid-in capital 72,761 72,739
Retained earnings 50,688 49,279
Less: Deferred currency translation (2,524) (2,428)
Treasury stock of 448,347
shares, at cost (9,003) (9,003)
Note receivable - ESOT (8,021) (8,021)
Deferred compensation-restricted
stock (1) (4)
-------- --------
Total stockholders' equity 108,377 107,038
-------- --------
Total liabilities and stockholders'
equity $362,956 $373,122
======== ========
See accompanying notes to consolidated financial statements.
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A. P. GREEN INDUSTRIES, INC.
CONSOLIDATED STATEMENTS OF EARNINGS (UNAUDITED)
Three months ended March 31,
(Dollars in thousands, ---------------------------
except per share data) 1995 1994
---------- -----------
Net sales $ 61,889 $ 37,503
Cost of sales 51,451 31,397
-------- --------
Gross profit 10,438 6,106
Expenses and other income
Selling & administrative expenses 7,967 5,969
Interest expense 793 263
Interest income (323) (318)
Other income, net (204) (353)
-------- --------
Earnings before income taxes and 2,205 545
cumulative effect of an accounting change
Income tax expense 757 109
Equity in net income of affiliates 240 -
-------- --------
Earnings before cumulative effect of an
accounting change 1,688 436
Cumulative effect of an accounting change
Postemployment benefits, net of tax - (255)
-------- --------
Net earnings $ 1,688 $ 181
======== ========
Earnings per common share before cumulative
effect of an accounting change $ 0.42 $ 0.11
Cumulative effect of an accounting change
Postemployment benefits, net of tax - (0.06)
-------- --------
Net earnings per common share $ 0.42 $ 0.05
======== ========
Weighted average number of common shares 4,027,918 4,017,265
Dividends per common share $ 0.07 $ 0.06
See accompanying notes to consolidated financial statements.
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A. P. GREEN INDUSTRIES, INC.
CONSOLIDATED STATEMENTS OF CASH FLOWS (UNAUDITED)
Three Months Ended March 31,
---------------------------
(Dollars in thousands) 1995 1994
----------- ----------
Cash flows from operating activities
Net earnings $ 1,688 $ 181
Adjustments for items not requiring cash
Cumulative effect of an accounting change-
Postemployment benefits, net of tax - 255
Equity in net income of affiliates (240) -
Depreciation, depletion and amortization 2,443 2,002
Deferred compensation earned 3 11
Stock compensation to directors 23 28
Provision for losses on accounts receivable 88 17
Gain on sale of assets (11) (43)
Decrease (increase) in assets
Trade receivables 3,712 4,216
Asbestos claim and fee reimbursements
received 1,697 11,255
Inventories 1,572 (2,120)
Receivable and prepaid taxes - 96
Other current assets (140) (203)
Increase (decrease) in liabilities
Accounts payable and accrued expenses (9,211) (5,684)
Asbestos claims paid (7,280) (13,631)
Pensions 169 229
Income taxes (629) (91)
Deferred income taxes 163 39
Long-term non-pension benefits 112 81
-------- --------
Net cash used in operating
activities (5,841) 3,362
-------- --------
Cash flows from investing activities
Capital expenditures (1,003) (1,029)
Decrease in other long-term assets 57 139
Increase in pension assets (16) (104)
Proceeds from sales of assets 132 46
-------- --------
Net cash used in investing activities (830) (948)
-------- --------
Cash flows from financing activities
Repayments of debt (31) (29)
Capital contribution to Intogreen Co. from
minority partner 110 -
Dividends paid (282) (242)
Exercised stock options - 238
Tax benefit on dividends paid to ESOP 3 7
-------- --------
Net cash used in financing activities (200) (26)
-------- --------
Effect of exchange rate changes (96) (282)
-------- --------
Net decrease in cash and cash equivalents (6,967) (4,618)
Cash and cash equivalents at beginning of year 9,637 16,331
-------- --------
Cash and cash equivalents at end of period $ 2,670 $ 11,713
======== ========
See accompanying notes to consolidated financial statements.
-4-
<PAGE>
A. P. GREEN INDUSTRIES, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)
1.MANAGEMENT'S COMMENTS REGARDING ADJUSTMENTS AND RESULTS OF OPERATIONS
---------------------------------------------------------------------
In the opinion of management, the accompanying consolidated financial statements
include all adjustments of a normal and recurring nature necessary for a fair
presentation of the financial position and results of operations for the periods
presented. These financial statements should be read in conjunction with the
Company's Annual Report on Form 10-K for the year ended December 31, 1994. The
results for the quarter ended March 31, 1995 are not necessarily indicative of
the results which may occur for the full year. Certain prior year amounts have
been reclassified to conform to the 1995 presentation.
2.INVENTORIES
March 31, 1995 December 31, 1994
-------------- -----------------
Finished goods & work-in-process
Valued at LIFO:
FIFO cost $35,270 $36,233
Less LIFO reserve (14,352) (14,919)
------- -------
LIFO cost 20,918 21,314
Valued at FIFO 9,464 9,033
------- -------
TOTAL 30,382 30,347
------- -------
Raw materials and supplies
Valued at LIFO:
FIFO cost 17,441 20,007
Less LIFO reserve (5,285) (5,875)
------- -------
LIFO cost 12,156 14,132
Valued at FIFO 9,342 8,973
------- -------
TOTAL 21,498 23,105
------- -------
$51,880 $53,452
======= =======
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3. LONG-TERM DEBT
--------------
In March 1995 the Company's $15 million U. S. long-term line of credit was
extended to May 2, 1997. Approximately $4.6 million of standby letters of
credit were outstanding against the line at March 31, 1995, leaving an
available balance of approximately $10.4 million.
4. LITIGATION
----------
Asbestos-related claims - Personal Injury
-----------------------------------------
A. P. Green is among numerous defendants in lawsuits pending as of March
31, 1995 that seek to recover compensatory, and in many cases, punitive
damages for personal injury allegedly resulting from exposure to asbestos-
containing products manufactured, sold or installed by A. P. Green.
A. P. Green is a member of the Center for Claims Resolution (the Center),
an organization of twenty companies (Members) who were formerly
distributors or manufacturers of asbestos-containing products. The Center
administers, evaluates, settles, pays and defends all of the asbestos-
related personal injury lawsuits involving its Members. Under the terms of
the Center Agreement, each Member's portion of the liability payments and
defense costs are based upon, among other things, the number and type of
claims brought against it. Claims activity for each of the years ended
December 31, 1994 and 1993 was as follows:
1994 1993
-------- --------
Claims pending at January 1 52,122 50,007
Claims filed 14,836 26,100
Cases settled, dismissed or
otherwise resolved (16,038) (23,985)
-------- --------
Claims pending at December 31 50,920 52,122
======== ========
Average settlement amount per claim (1) $ 1,816 $ 1,728
(1) Substantially all settlements are covered by the Company's insurance
program.
On January 15, 1993, the Members were named as defendants in a class
action lawsuit brought on behalf of all persons who have been
occupationally exposed to asbestos-containing products of the Members and
who have unasserted
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<PAGE>
claims for such exposure (the Class) pursuant to Federal Rule of Civil
Procedure 23(b)(3) in the Federal District Court for the Eastern
District of Pennsylvania. At about the same time, the Center negotiated
and filed with the Court a settlement (the Settlement) between the Members
and the Class.
Under the terms of the Settlement, the Members have agreed to pay
compensation to any member of the Class who has, according to objective
medical criteria, physical impairment as a result of such exposure.
Different levels of compensation will be paid depending on the type and
degree of physical impairment. No punitive damages will be paid. The
Settlement provides, among other things, for a cap on the number of claims
to be processed each year during the next ten years and a range of
settlement values for each disease category. Settlement values are based
on historical average payments by the Center for similar cases. Each
Member will be responsible for its percentage share of each claim payment
(no joint and several liability), such shares having been previously
established. Hearings were held to determine the fairness of the
Settlement and the court ruled that the Settlement was fair. This ruling
has been appealed by certain objectors.
In a third party action filed simultaneously with the class action (and in
parallel Alternate Dispute Resolution proceedings), the Members have asked
for a declaratory judgment against their respective insurers that such
insurers cannot use the Settlement as a defense to their payment under
applicable policies of insurance. The Settlement is expressly contingent
upon such declaratory relief. In addition, some Members, including A. P.
Green, have asked for a declaratory judgment against their insurers with
whom they have not reached coverage resolutions. No decision has been
rendered at this date with respect to these issues.
Under the assumption that it receives these court approvals, the Settlement
has provided the Company with a basis for estimating its potential
liability and related insurance recovery associated with asbestos cases.
The Company has reviewed its insurance policies, historical settlement
amounts, the number of pending cases and the projected number of claims to
be filed pursuant to the Settlement and the Company's share of amounts to
be paid thereunder. The Company has also reviewed its contractual
liability for the payment of deductibles under certain insurance policies
insuring the E. J. Bartells Company (Bartells), a former subsidiary,
against asbestos-related personal injury claims, such policies having been
issued when Bartells was owned by A. P. Green. Based upon such reviews,
the Company has estimated its liability for such cases and claims to be
approximately $134.0 million and $135.6 million at March 31, 1995 and
December 31, 1994, respectively, with partially offsetting projected
insurance reimbursements of approximately $131.2 million and $132.9
million, respectively. While management understands the inherent
uncertainty in litigation of this type and the possibility that past costs
may not be indicative of future costs, management does not believe that
these claims and cases will have any additional material adverse effect on
the Company's financial position or results of operations. Management
anticipates that payments for these claims will occur over at least ten
years and can be made from normal operating cash sources.
-7-
<PAGE>
In addition to asbestos-related personal injury claims asserted against A.
P. Green, a number of claims have been asserted against Bigelow-Liptak
Corporation (now known as A. P. Green Services, Inc.), a subsidiary of the
Company. These claims have been and are currently being handled by such
subsidiary's insurance carriers. No claim for reimbursement of defense or
indemnity payments has been made against the Company or such subsidiary by
any such carriers.
Asbestos-related claims-Property Damage
---------------------------------------
A. P. Green is also among numerous defendants in a property damage class
action suit pending in South Carolina. A. P. Green previously has been
dismissed from a number of property damage cases and believes that it
should be dismissed from the South Carolina case based on the end uses of
its products. A similar suit pending in the State of Oregon involves a
former wholly owned subsidiary of the Company and is being defended by the
Company's insurance carrier. Based upon the Company's history in these
asbestos-related property damage claims, management does not believe that
the ultimate resolution of these matters will have a material adverse
effect on the Company's consolidated financial position or results of
operations.
There was no assumption of asbestos-related liability, either personal
injury or property damage, in connection with the August, 1994 acquisition
of the refractories business of General Refractories Company and affiliated
companies (General).
Environmental
-------------
The EPA or other private parties have named the Company or one of its
subsidiaries as a potentially responsible party in connection with two
superfund sites in the United States. The Company is a de minimis party
with respect to one of the sites and expects to arrive at a settlement
agreement and Consent Decree with respect to it for an amount of not more
than $10,000. With respect to the second, involving a wholly owned
subsidiary of the Company, there does not appear to be any evidence of
delivery to the site of hazardous material by the subsidiary. An estimate
has been made of the costs to be incurred in these matters and the Company
has recorded a reserve respecting those costs.
Other
-----
A. P. Green is subject to claims and other lawsuits that arise in the
ordinary course of business, some of which may seek damages in substantial
amounts, including punitive or extraordinary damages. Reserves for these
claims and lawsuits are recorded to the extent that losses are deemed
probable and are estimable. In the opinion of management, the disposition
of all current claims and lawsuits will not have a material adverse effect
on the consolidated financial position or results of operations of A. P.
Green.
-8-
<PAGE>
A. P. GREEN INDUSTRIES, INC.
PART I. FINANCIAL INFORMATION
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF RESULTS OF
OPERATIONS AND FINANCIAL CONDITION
RESULTS OF OPERATIONS
- ---------------------
Total sales increased 65.0% from $37.5 million for the three months ended March
31, 1994 to $61.9 million for the comparable 1995 three-month period. Gross
profit increased 70.9% from $6.1 million to $10.4 million for the comparable
periods. The impact from the August 1994 General acquisition was to increase
sales by approximately $17.7 million and gross profit by approximately $1.9
million.
Refractory Products and Services
- --------------------------------
Refractory products and services sales were $29.1 million and $53.0 million for
the three-month periods ended March 31, 1994 and 1995, respectively, reflecting
an increase of 82.2%. United States refractory sales increased 83.5% from $26.0
million to $47.6 million for the comparable three-month periods, of which
approximately $15.8 million was due to the General acquisition. Excluding this
acquisition impact, brick, specialties and ceramic fiber volumes all increased,
with a small decline in clays and grogs, for a net volume increase of 23.7%.
Prices on all U.S. refractory product lines were down an average of 2.1% for the
comparable quarters. Pricing improvements are expected in future quarters as
the impact of a March 1, 1995 price increase is more fully realized. U.S.
export sales improved 87.1% from $2.2 million to $4.2 million, largely
resulting from the General acquisition.
Sales of the Canadian subsidiary showed significant improvement from $2.9
million for the three-month period ended March 31, 1994 to $5.5 million for the
comparable 1995 period, an 86.6% increase. The impact from the General
acquisition was to increase Canadian sales by $2.3 million. Excluding this
impact, declines in specialties and pre-cast shape volumes were more than offset
by increases in all other product lines, resulting in an overall volume
improvement of 6.0%. Prices increased for all Canadian product lines, with the
exception of ceramic fiber, by an average of 5.4%. In the first quarter of
1994, a reserve of approximately $315,000 was established for the cost of
Canadian personnel reductions made during that quarter, resulting in a 1994 pre-
tax loss of $63,000 compared to a pre-tax loss of $19,000 during the first
quarter of 1995. The 1995 results included $105,000 in interest expense on the
debt associated with acquisition of the General operation in Canada.
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<PAGE>
Sales in the United Kingdom (U.K.) increased 31.2% from $1.4 million to $1.8
million for the comparable quarter as the U.K. market showed signs of
strengthening. This sales increase resulted in pre-tax earnings of $107,000 in
the first quarter of 1995 compared to a $52,000 loss in the comparable 1994
period.
Consolidated cost of sales as a percentage of sales increased from 83.2% to
84.1% for the three months ended March 31, 1994 and 1995, respectively. This
increase was primarily due to higher unfavorable labor and brick breakage
variances in the U.S. and increases in inbound freight, raw material and
machinery maintenance costs. Cost of sales as a percentage of sales at the
acquired General plant in Canada also contributed to the increase due primarily
to negative production variances resulting from low volumes and high maintenance
expenses necessary to bring the facility up to an appropriate state of repair.
Refractory operating profits increased 147.7% from $1.2 million to $3.0 million
in 1994 and 1995, respectively.
Industrial Lime
- ---------------
Industrial lime sales increased 5.8% from $8.5 million to $9.0 million for the
respective first quarters of 1994 and 1995, with all of the increase coming out
of the Kimballton, Virginia plant. Volumes at both plants increased an average
of 3.9% across all product lines except road stabilization lime at the New
Braunfels, Texas facility. Average selling prices increased 1.8% for the
comparable periods, with increases coming from all major product lines at the
Kimballton plant, partially offset by declines in all major product lines at New
Braunfels.
The gross margins of the Company's industrial lime operations are sensitive to
volume changes due to the capital intensive nature of the operations and semi-
fixed nature of other costs. As a result of the sales increase, gross profit
and operating profit increased 66.4% and 88.5%, respectively. Also contributing
to this improvement were reductions in workers' compensation, maintenance and
purchased raw materials costs at the New Braunfels plant and lower processing
fuel and depreciation expense at the Kimballton plant, partially offset by
increased maintenance costs at Kimballton. In addition, both facilities had net
favorable production variances during the first quarter of 1995 compared to
unfavorable variances in 1994 resulting from a weather-related production
curtailment at Kimballton and downtime at New Braunfels related to the
installation of a new kiln preheater and dust collection system.
Expenses and Other Income
- -------------------------
Selling and administrative expenses increased 33.5% from $6.0 million for the
three-month period ended March 31, 1994 to $8.0 million for the comparable 1995
period. Increases in salaries and related costs, salaried pensions, travel,
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office expenses, professional fees, rent and amortization of intangibles were
all largely related to the addition of General sales and research personnel and
intangible assets included in the acquisition. Also contributing to the
increase were an increased provision for losses on accounts receivable,
primarily due to the higher sales and accounts receivable levels, and higher
sales and management incentive expenses.
Interest expense increased from $263,000 in 1994 to $793,000 in 1995 due to the
additional debt associated with the General acquisition. There were no bank
line borrowings during the first quarter of either period. Interest income for
the first quarter of 1995 increased 1.6% from the comparable 1994 three-month
period. Other income decreased 42.2% for the comparable three-month periods
primarily due to a reduction in royalty income resulting from cancellation of a
licensing agreement with a significant Mexican licensee during the fourth
quarter of 1994. This was partially offset by higher transaction gains on U.S.
dollar denominated accounts at the Canadian subsidiary compared to the first
quarter of 1994. The Company and its Canadian and U.K. subsidiaries typically
transact business in their own currencies and accordingly are not subject to
significant transaction gains and losses.
Income Taxes
- ------------
The 20.0% effective income tax rate in 1994 as compared to 31.0% in 1995 was
primarily due to depletion expense at APG Lime which, at the lower 1994 earnings
level, had more of a pronounced impact on the effective income tax rate.
Accounting Changes
- ------------------
The cumulative effect of adopting the Financial Accounting Standards Board
Statement No. 112, "Employers' Accounting for Postemployment Benefits," further
reduced 1994 net income by $255,000.
Equity in Net Income of Affiliates
- ----------------------------------
The Company's share of income from two new Colombian affiliates acquired from
General was $240,000 in the first quarter of 1995.
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INDUSTRY SEGMENTS
(In thousands)
Three Months Ended March 31,
---------------------------
1995 1994
-------- --------
Net Sales
- ---------
Refractory products and services $ 52,979 $ 29,084
Industrial lime 8,957 8,469
Intersegment eliminations (47) (50)
-------- --------
$ 61,889 $ 37,503
======== ========
Gross Profit
- ------------
Refractory products and services $ 8,409 $ 4,887
Industrial lime 2,029 1,219
-------- --------
$ 10,438 $ 6,106
======== ========
Gross Profit Percentage
- -----------------------
Refractory products and services 15.9% 16.8%
Industrial lime 22.7% 14.4%
16.9% 16.3%
======== ========
Operating Profit
- ----------------
Refractory products and services $ 2,955 $ 1,193
Industrial lime 1,749 928
-------- --------
4,704 2,121
-------- --------
Other Charges to Income
General corporate expenses, net 2,029 1,631
Interest expense 793 263
Interest income (323) (318)
-------- --------
Total other charges 2,499 1,576
-------- --------
Earnings Before Income Taxes and
Cumulative Effect of an Accounting
Change $ 2,205 $ 545
======== ========
Identifiable Assets (at period end)
- ----------------------------------
Refractory products and services $309,683 $260,484
Industrial lime 46,754 45,848
Corporate 6,519 15,916
-------- --------
$362,956 $322,248
======== ========
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Three Months Ended March 31,
---------------------------
1995 1994
-------- --------
Depreciation, Depletion and Amortization
- ----------------------------------------
Refractory products and services $ 1,534 $ 1,056
Industrial lime 655 707
Corporate 254 239
-------- --------
$ 2,443 $ 2,002
======== ========
Capital Expenditures
- --------------------
Refractory products and services $ 871 $ 196
Industrial lime 118 506
Corporate 14 327
-------- --------
$ 1,003 $ 1,029
======== ========
GEOGRAPHIC SEGMENTS
(In thousands)
Three Months Ended March 31,
---------------------------
1995 1994
-------- --------
Net Sales
- ---------
United States $ 56,604 $ 34,437
Canada 5,489 2,942
United Kingdom 1,813 1,382
Intersegment transfers (primarily U.S.) (2,017) (1,258)
-------- --------
$ 61,889 $ 37,503
======== ========
Earnings (Loss) Before Income Taxes and
Cumulative Effect of an Accounting
Change
- ---------------------------------------
United States $ 2,117 $ 660
Canada (19) (63)
United Kingdom 107 (52)
-------- --------
$ 2,205 $ 545
======== ========
Identifiable Assets (at period end)
- ----------------------------------
United States $335,316 $295,551
Canada 17,444 7,861
United Kingdom 3,677 2,920
Corporate 6,519 15,916
-------- --------
$362,956 $322,248
======== ========
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PRICE/VOLUME SUMMARY
1995 AS COMPARED TO 1994
PERCENT INCREASE (DECREASE)
Three
Months
Ended
------
U.S. Refractory Products Sales
(excluding impact of General
Refractories acquisition)
Volume 23.7%
Price (2.1)
Industrial Lime Sales
Volume 3.9
Price 1.8
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FINANCIAL CONDITION
- -------------------
The Company continues to maintain a strong balance sheet.
Summary Information
(Dollars in thousands)
March 31,
----------------------- December 31,
1995 1994 1994
-------- -------- -----------
Working capital $ 81,274 $ 55,166 $ 78,312
Current ratio 2.1:1 2.0:1 1.9:1
Total assets $362,956 $322,248 $373,122
Current maturities of
long-term debt 147 128 139
Long-term debt 36,984 12,126 37,023
Stockholders' equity $108,377 $100,871 $107,038
Debt to total
capitalization (1) 25.5% 10.8% 25.7%
(1) Calculated as total Debt (long-term debt including current maturities)
divided by total stockholders' equity plus total Debt.
The following balance sheet increases resulted from the General acquisition on
August 1, 1994 (in millions):
Receivables, net $12.3
Inventories 22.7
Deferred income taxes 1.1
Other current assets 0.4
-----
Total current assets 36.5
Property, plant and equipment 18.7
Long-term pension assets 0.5
Other long-term assets 5.4
-----
Total assets $61.1
=====
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Accounts payable $ 8.9
Accrued payrolls 1.5
Accrued taxes other than on income 0.6
Accrued insurance 4.7
Accrued other 7.6
-----
Total current liabilities 23.3
Deferred income taxes 1.1
Long-term non-pension benefits 0.1
Long-term pensions 11.6
Notes payable 25.0
-----
Total liabilities $61.1
=====
Working capital $13.2
Working capital increased 47.3%, or $26.1 million, from $55.2 million at March
31, 1994 to $81.3 million at March 31, 1995, including the $13.2 million
obtained through the General acquisition, while the ratio of current assets to
current liabilities increased from 2.0:1 to 2.1:1. Excluding the acquisition
impact, the increase in working capital was primarily due to increases in trade
receivables of $5.0 million, reimbursement due on paid asbestos claims of $8.8
million and closed plants' fixed assets held for sale (included in other current
assets) of $2.5 million, partially offset by a reduction in cash and cash
equivalents of $9.0 million. Also contributing to the working capital increase
was a $1.5 million reduction in accounts payable and $1.2 million in charges
against the accrual for plant closing costs.
The increase in reimbursement due on paid asbestos claims and offsetting
reduction in cash and cash equivalents since March 31, 1994, as well as the
changes in these items since December 31, 1994, were due to negotiations with
insurance carriers temporarily delaying reimbursements from those carriers. A
payment of $6.9 million was received from one carrier in April 1995. In
addition, that carrier has agreed to make future payments directly to the Center
for Claims Resolution, which will have a significant favorable impact on
fluctuations in the Company's cash balances, cash requirements and the balance
in reimbursement due on paid asbestos claims.
The increase in trade receivables, both since March 31, 1994 and the $3.8
million increase since December 31, 1994, was primarily due to the increased
sales level. The $6.8 million reduction in accounts payable since December 31,
1994 was primarily due to a $6.5 million payment in January 1995 to the Center
for Claims Resolution. The $1.8 million reduction in other accrued expenses
since December 31, 1994 was due primarily to charges against the accrual for
plant closing costs.
-16-
<PAGE>
Capital expenditures for the refractories business increased by $675,000 in the
first quarter of 1995 compared to the same period in 1994, offset by reductions
in capital expenditures related to corporate functions and at the lime plants.
The refractories increase was due to both upgrading and modernization of the
acquired General facilities and replacement, modernization and expansion of pre-
acquisition operations.
In March 1995, capital contributions were made by A. P. Green and INTOCAST AG to
form a joint venture partnership, INTOGREEN Co., which will sell and install
cast monolithic ladle linings to the steel industry in the United States, Canada
and Mexico. INTOCAST AG is a world leader in the development of cast ladle
linings. Its contribution to the partnership is reflected on the balance sheet
as a minority interest of $110,000.
-17-
<PAGE>
A. P. GREEN INDUSTRIES, INC.
PART II. OTHER INFORMATION
Item 6. EXHIBITS AND REPORTS ON FORM 8-K
--------------------------------
(a) Exhibits:
Exhibit No.
-----------
27 Financial Data Schedule as of and for the Three Months Ended
March 31,1995
(b) Reports on Form 8-K:
No reports on Form 8-K were filed during the
quarter ended March 31, 1995.
SIGNATURE
---------
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.
A. P. Green Industries, Inc.
(Registrant)
By: /s/Gary L. Roberts
---------------------------------
Gary L. Roberts
Vice President, Chief Financial
Officer and Treasurer
Date: May 5, 1995
-----------------
-18-
<PAGE>
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM A.P. GREEN
INDUSTRIES, INC. QUARTERLY FINANCIAL STATEMENTS ON FORM 10-Q AS OF AND FOR THE
THREE MONTHS ENDED MARCH 31, 1995 AND IS QUALIFIED IN ITS ENTIRETY BY REFERENCE
TO SUCH FINANCIAL STATEMENTS.
</LEGEND>
<MULTIPLIER> 1,000
<S> <C>
<PERIOD-TYPE> 3-MOS
<FISCAL-YEAR-END> DEC-31-1995
<PERIOD-END> MAR-31-1995
<CASH> 2,670
<SECURITIES> 0
<RECEIVABLES> 41,991
<ALLOWANCES> 2,064
<INVENTORY> 51,880
<CURRENT-ASSETS> 157,281
<PP&E> 93,683
<DEPRECIATION> 0
<TOTAL-ASSETS> 362,956
<CURRENT-LIABILITIES> 76,007
<BONDS> 37,131
<COMMON> 4,477
0
0
<OTHER-SE> 103,900
<TOTAL-LIABILITY-AND-EQUITY> 362,956
<SALES> 61,889
<TOTAL-REVENUES> 61,889
<CGS> 51,451
<TOTAL-COSTS> 51,451
<OTHER-EXPENSES> 7,967
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 793
<INCOME-PRETAX> 2,205
<INCOME-TAX> 757
<INCOME-CONTINUING> 1,688
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 1,688
<EPS-PRIMARY> .42
<EPS-DILUTED> 0
</TABLE>
