<PAGE>
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 10-Q
COMMISSION FILE NO. 1-2714
(Mark One)
( X ) Quarterly Report Pursuant to Section 13 or 15(d) of the
Securities Exchange Act of 1934
For the quarterly period ended December 31, 1994
-----------------
or
( ) Transition Report Pursuant to Section 13 or 15(d) of the
Securities Exchange Act of 1934
For the transition period from ______________________
to ______________________
ATLAS CORPORATION
--------------------------------------
(Exact name of registrant as specified
in its charter)
DELAWARE 13-5503312
- - - - ------------------------------- ------------------
(State or other jurisdiction of (I. R. S. Employer
incorporation or organization) Identification No.)
370 SEVENTEENTH STREET, SUITE 3150, DENVER, CO 80202
-----------------------------------------------------
(Address of principal executive offices)
(Zip Code)
(303) 825-1200
-------------------------------
(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
--- ---
As of February 9, 1995, 18,577,500 shares of Common Stock, par value $1 per
share, were issued and outstanding.
Page 1 of 14
<PAGE>
PART I. FINANCIAL INFORMATION
ITEM 1. FINANCIAL STATEMENTS.
--------------------
ATLAS CORPORATION AND ITS SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
(In Thousands)
(Unaudited)
<TABLE>
<CAPTION>
December 31, June 30,
1994 1994
------------- ---------
<S> <C> <C>
ASSETS
- - - - ------
CURRENT ASSETS:
Cash and short-term investments $ 11,789 $ 3,767
Trade accounts and other receivables 787 970
Inventories (Note 5) 250 1,367
Prepaid expenses and other current assets 273 212
-------- --------
Total current assets 13,099 6,316
Property, plant and equipment 47,389 50,476
Less, accumulated depreciation,
depletion, amortization and impairment (44,645) (47,637)
-------- --------
2,744 2,839
Investment in unconsolidated
subsidiary (Note 12) 37,474 -
Other assets (Note 7) 6,932 10,692
-------- --------
$ 60,249 $ 19,847
======== ========
LIABILITIES
- - - - -----------
CURRENT LIABILITIES:
Trade accounts payable 619 2,109
Accrued liabilities (Note 7) 4,303 4,446
-------- --------
Total current liabilities 4,922 6,555
Convertible debenture (Note 8) 3,500 3,500
Other long-term liabilities (Note 7) 12,374 12,267
STOCKHOLDERS' EQUITY (DEFICIT)
- - - - ------------------------------
Common stock 18,567 9,410
Capital in excess of par value 68,929 31,555
Retained deficit (48,398) (43,440)
Currency translation adjustment 355 -
-------- --------
Total stockholders' equity
(deficit) 39,453 (2,475)
-------- --------
$ 60,249 $ 19,847
======== ========
</TABLE>
See notes to consolidated financial statements.
Page 2 of 14
<PAGE>
ATLAS CORPORATION AND ITS SUBSIDIARIES
CONSOLIDATED STATEMENTS OF OPERATIONS
(In Thousands, Except Per Share Data)
(Unaudited)
<TABLE>
<CAPTION>
Three Months Ended Six Months Ended
December 31, December 31,
-------------------------- ----------------------
1994 1993 1994 1993
------------ ------------ -------- ------------
<S> <C> <C> <C> <C>
Mining revenue $ - $7,192 $ 2,328 $14,171
Production costs - 6,707 3,031 12,743
Shutdown and standby costs - - 1,275 -
Exploration costs 315 423 1,105 1,273
General and administrative 800 738 1,372 1,835
------- ------ ------- -------
Loss from operations (1,115) (676) (4,455) (1,680)
------- ------ ------- -------
Interest income 273 71 336 127
Interest expense (102) (148) (218) (232)
Equity in unconsolidated
subsidiary (Note 12) (364) - (364) -
Forfeiture of deposit
(Note 11) (1,144) - (1,144) -
Other income 41 46 41 63
------- ------ ------- -------
Loss from continuing
operations (2,411) (707) (5,804) (1,722)
Income from discontinued
operations (Note 10) 846 1,300 846 1,402
------- ------ ------- -------
Net income (loss) $(1,565) $ 593 $(4,958) $ (320)
======= ====== ======= =======
PER SHARE OF COMMON STOCK
AND COMMON STOCK
EQUIVALENTS:
Loss from continuing
operations $ (.15) $ (.09) $ (.40) $ (.23)
Income from discontinued
operations .05 .17 .06 .19
------- ------ ------- -------
Net income (loss) $ (.10) $ .08 $ (.34) $ (.04)
======= ====== ======= =======
Average number of common
and common equivalent
shares outstanding
during each period 16,389 7,836 14,522 7,336
======= ====== ======= =======
</TABLE>
See notes to consolidated financial statements.
Page 3 of 14
<PAGE>
ATLAS CORPORATION AND ITS SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS
(In Thousands)
(Unaudited)
<TABLE>
<CAPTION>
Six Months Ended
December 31,
-------------------
1994 1993
--------- --------
<S> <C> <C>
OPERATING ACTIVITIES:
Net loss $ (4,958) $ (320)
Gain from discontinued operations (846) (1,402)
Add (deduct) non-cash items:
Depreciation, depletion, amortization 379 2,939
Equity in unconsolidated subsidiary 364 -
Shutdown and standby costs (net) 584 -
Issuance of stock for 401k plan 68 -
Issuance of stock in lieu of interest payment 90 -
Net change in non-cash items related
to operations (Note 6) 844 (541)
-------- -------
Cash provided by (used in) continuing
operations (3,475) 676
-------- -------
From discontinued operations:
Income from discontinued operations 846 1,402
Change in accounts receivables 475 (400)
Change in other assets - (400)
Change in long-term liabilities - (102)
Change in estimated uranium reclamation costs (746) (188)
-------- -------
Cash provided by discontinued operations 575 312
-------- -------
Cash provided by (used in) operating activities (2,900) 988
-------- -------
INVESTING ACTIVITIES:
Additions to property, plant and equipment (328) (3,400)
Investment in unconsolidated subsidiary (35,640) -
Proceeds from the sale of equipment 516 434
-------- -------
Cash provided by investing activities (35,452) (2,966)
-------- -------
FINANCING ACTIVITIES:
Borrowings from short-term note 3,550 -
Repayment of short-term note (3,550) (2,420)
Proceeds from the issuance of common stock 50,054 4,875
Proceeds from the issuance of convertible debt - 3,500
Costs associated with the issuance of
debenture and stock (3,680) (625)
-------- -------
Cash provided by financing activities 46,374 5,330
-------- -------
Increase in cash and cash equivalents 8,022 3,352
CASH AND CASH EQUIVALENTS:
Beginning of period 3,767 1,734
-------- -------
End of period $ 11,789 $ 5,086
======== =======
</TABLE>
See notes to consolidated financial statements.
Page 4 of 14
<PAGE>
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
1. On August 15, 1994, the Company acquired approximately 37.2% of the common
stock of Granges, Inc., a Canadian precious metals mining company. The
Company follows the equity method of accounting for investments in common
stock of operating companies 20% to 50% owned.
The Company follows the principles of Statement of Financial Account
Standards No. 52, "Foreign Currency Translation," using the U.S. dollar as
the functional currency for the operations of it's unconsolidated Canadian
subsidiary. Accordingly, all assets and liabilities of the foreign
subsidiary are translated into U.S. dollar using the exchange rate
prevailing at the balance sheet date, while income and expense items are
translated at the weighted average exchange rate prevailing for the period.
Exchange gains and losses are deferred and shown as a currency translation
adjustment in shareholders' equity until transferred to earnings when the
net investment in the foreign operation is reduced.
2. The financial information contained in this report reflects all adjustments
which are of a normal recurring nature that the Registrant considers
necessary for a fair presentation of the results of operations for the
periods indicated.
3. There would be no dilution of earnings per share as a result of the Option
Warrants to Purchase Common Stock or stock options during the periods
presented.
4. The Registrant regularly assesses its ability to recover the carrying value
of its assets and recognizes an impairment when it is determined that the
remaining unamortized costs cannot be recovered from undiscounted cash flows
over the remaining mine life.
5. Inventories consisted of the following:
<TABLE>
<CAPTION>
December 31, June 30,
1994 1994
------------ -----------
<S> <C> <C>
Raw materials $ - $ 360,000
Work in process - 593,000
Finished goods - 64,000
Other 250,000 350,000
-------- ----------
$250,000 $1,367,000
======== ==========
</TABLE>
6. The components of the net change in items other than cash related to
operating activities as reflected in the Consolidated Statements of Cash
Flows are as follows:
<TABLE>
<CAPTION>
Six Months Ended
December 31,
-------------------------
Add (deduct) items other than cash: 1994 1993
------------ -----------
<S> <C> <C>
Trade accounts and other receivables $ (12,000) $ 13,000
Inventories 388,000 108,000
Prepaid expenses and other current
assets (138,000) 60,000
Other assets 1,917,000 132,000
Trade accounts payable (1,474,000) 519,000
Accrued liabilities (167,000) (877,000)
Other long-term liabilities 330,000 (496,000)
----------- ---------
$ 844,000 $(541,000)
=========== =========
</TABLE>
Page 5 of 14
<PAGE>
7. OTHER ASSETS CONSIST OF THE FOLLOWING:
<TABLE>
<CAPTION>
December 31, June 30,
1994 1994
------------ -----------
<S> <C> <C>
Restricted cash:
Collateral for a $6,500,000 letter
of credit (a) $ 4,225,000 $ 6,500,000
Collateral for Bureau of Land Management
reclamation bonds (b) 1,972,000 1,493,000
Deposit paid for Granges Inc. shares - 1,843,000
Deposit paid for Dakota Mining
Corporation shares (Note 11) - 525,000
Other 735,000 331,000
----------- -----------
$ 6,932,000 $10,692,000
=========== ===========
</TABLE>
(a) Securing the performance of the Registrant's uranium reclamation
obligation.
(b) Securing the performance of the Registrant's Gold Bar reclamation
obligation.
OTHER ACCRUED LIABILITIES CONSISTED OF THE FOLLOWING:
<TABLE>
<CAPTION>
December 31, June 30,
1994 1994
------------ -----------
<S> <C> <C>
Accrued compensation $ 383,000 $ 596,000
Mine reclamation accrual 100,000 300,000
Reclamation and uranium shut down
cost, short-term 1,000,000 1,300,000
Accrued asbestos reclamation costs (Note 9) 892,000 1,400,000
Mine shutdown and standby costs 409,000 -
Other 1,519,000 850,000
----------- -----------
$ 4,303,000 $ 4,446,000
=========== ===========
OTHER LIABILITIES, LONG-TERM CONSISTED OF THE
FOLLOWING:
December 31, June 30,
1994 1994
------------ -----------
Reclamation and uranium shut down
cost, long-term $ 5,452,000 $ 5,899,000
Pension and deferred compensation
arrangements 1,397,000 1,335,000
Mine reclamation accrual 3,253,000 3,100,000
Accrued postretirement benefit obligation 1,218,000 1,203,000
Other 1,054,000 730,000
----------- -----------
$12,374,000 $12,267,000
=========== ===========
</TABLE>
The Registrant believes that all accruals related to estimated shutdown
expenses, reclamation and litigation obligations are adequate, but are
subject to adjustment to reflect actual costs incurred.
8. On September 20, 1993, the Registrant closed under a Securities Purchase
Agreement with Phoenix Financial Holdings, Inc. which provided for the sale
by the Registrant for an aggregate of $8,375,000 of (i) 1,500,000 shares of
the Registrant's Common Stock, (ii) a Redeemable Convertible Debenture due
1998 of the Registrant in the principal amount of $3,500,000, which is
convertible as to principal into Common Stock at the rate of $4.00 per share
and bears interest at the rate of 9% per annum payable in cash or Common
Stock at the rate of $4.00 per share, and (iii) Warrants to purchase for
three years 2,000,000 shares of Common Stock at $3.625 per share. Of such
securities, the 1,500,000
Page 6 of 14
<PAGE>
shares of the Registrant's Common Stock and 750,000 of the Warrants to
Purchase Common Stock were sold to various investors in a private
placement underwritten by First Marathon Securities Limited.
9. During fiscal year 1988, the United States Environmental Protection Agency
(the "EPA") notified the Registrant that it was one of several potentially
responsible parties ("PRPs") for cleanup costs incident to the presence of
asbestos and other materials ("Contaminants") at the Registrant's former
asbestos mine and mill site (the "Mine and Mill Site") near Coalinga,
California and in the City of Coalinga (the "City of Coalinga Site"). A
prolonged period of inquiry and administrative process concerning this
matter followed.
In fiscal years 1993 and 1991, the Registrant established a reserve of, and
recorded as an expense, $600,000 and $3,000,000, respectively, to cover the
Registrant's share of costs that may be incurred in connection with the
foregoing matters. This accrual reflects participation by the Bureau of Land
Management which has also been identified as a PRP to the Mine and Mill
Site. In fiscal year 1992, the Registrant instituted legal action against
thirteen insurance carriers which had issued insurance policies over a
period of more than 25 years, with respect to the Mine and Mill Site and the
City of Coalinga Site. During the second, third and forth quarters of
fiscal year 1994, the Registrant reached settlement with a number of the
carriers and recorded respectively, a gain from discontinued operations of
$1,300,000, $222,000 and $475,000. The Registrant continues to negotiate
and believes that the remaining reserve is adequate, but the reserve is
still subject to further adjustment to reflect the actual costs incurred.
The remedial action plan, which has been approved by the EPA, commenced
October 1994 and is scheduled to be completed within the fiscal year.
10. The Registrant is obligated to decommission and reclaim its uranium mill
site located near Moab, Utah. Since the Registrant has discontinued its
uranium operations and permanently shut down its uranium mill and mines,
estimated shut-down expenses, including reclamation costs, of $17,406,000
were accrued at June 30, 1987. The balance in this accrual at December 31,
1994 was $6,452,000 and the reclamation plan extends over the next six to
eight years. Title X of the "The Comprehensive National Energy Policy Act"
("Title X"), which was enacted in October 1992, provides for the
reimbursement of reclamation expenses related to uranium sites with tailings
generated by Atomic Energy Commission contracts. With respect to the
Registrant's discontinued uranium operations, 56% of the tailings were
generated under such contracts and the Registrant's liability for
discontinued uranium operations will be reduced by this Government cost
sharing program. The Registrant believes the accrual, when combined with
anticipated reimbursements of future reclamation costs under the Title X
program, is sufficient to cover future reclamation costs.
Title X provides for the reimbursement of both past and future reclamation
costs. The Registrant has submitted a claim to the Department of Energy
under Title X of approximately $5 million for reclamation costs incurred
from fiscal year 1987 through fiscal year 1994.Under such a claim, the
Registrant would receive reimbursement of approximately $2.8 million. The
Registrant has received notification that the Department of Energy has given
interim approval on approximately $4.5 million of the claim and $2.5 million
in
Page 7 of 14
<PAGE>
reimbursement. The Registrant is currently providing supplemental
information to the original claim in order to obtain approval on the
remaining $0.5 million in costs disallowed under the interim approval. On
December 29, 1994 the Registrant received $846,000 as a partial payment of
the approved interim reimbursement which was recorded as income from
discontinued operations. The timing on the repayment of the remaining
approved reimbursements can not be forecast as the annual funding to the
Title X program is a function of Congressional approval.
11. On August 15, 1994, Atlas completed the purchase from M.I.M. (Canada) Inc.
(M.I.M.) of 12,694,200 common shares of Granges Inc. ("Granges"). The
purchase price was Cdn. $4.00 per share, or an aggregate purchase price of
Cdn. $50,776,800. The shares acquired by Atlas constitute approximately
37.2% of the currently issued and outstanding shares of Granges.
Granges is a Canadian-based precious metals mining company whose shares are
traded on the Toronto Stock Exchange and the American Stock Exchange. At
September 30, 1994, Granges had a reported cash position of approximately
Cdn. $47 million, a large portfolio of exploration properties and a 50.5%
ownership in Hycroft Resources and Development Corporation, which operates
the Crofoot/Lewis gold mine near Winnemucca, Nevada.
Pursuant to an agreement dated May 13, 1994 between Atlas and Granges, Atlas
has representation on Granges' Board of Directors proportionate to Atlas'
share interest. In addition, Atlas agreed not to increase its position from
time to time to more than 40% without making the same offer to all Granges
shareholders. On August 17, 1994, following the completion of the purchase
of the Granges Shares and pursuant to the May 13, 1994 agreement, three of
the four MIM nominees on Granges' eight-person Board of Directors resigned
and were replaced by Atlas nominees.
On May 31, 1994, Atlas, Dakota Mining Corporation ("Dakota") and
VenturesTrident, L.P. and VenturesTrident II, L.P. (collectively, the
"VenturesTrident Partnerships") entered into a letter of intent (the "Dakota
Agreement") providing for (i) the purchase of 1,500,000 common shares of
Dakota (the "VenturesTrident Shares") from the VenturesTrident Partnerships,
for an aggregate purchase price of $6,000,000 and, subject to the completion
of the purchase of the VenturesTrident Shares, (ii) the subscription by
Atlas to 3,100,000 newly-to-be issued convertible preferred shares of
Dakota, carrying a cumulative semi-annual dividend at a rate of 6% per annum
(payable in common shares of Dakota) and convertible at any time into common
shares of Dakota on a one-for-one basis, such shares to be purchased at a
purchase price equal to 120% of the simple average of closing on the
American Stock Exchange for the 20 trading days immediately following the
closing of the purchase of the VenturesTrident Shares (subject to the
minimum price of $3.00 per share and maximum price of $4.00 per share, or an
aggregate minimum purchase price of $9,300,000 and an aggregate maximum
purchase price of $12,400,000). The preferred shares would be redeemable at
the option of Dakota after four years and at the option of Atlas after six
years. Pursuant to the Dakota Agreement, Atlas paid $525,000 to the
VenturesTrident Partnerships as a deposit against the purchase price. The
deposit was non-refundable, to be retained by the VenturesTrident
Partnerships in the event the transaction was not concluded. On July 20,
1994, Atlas and the VenturesTrident Partnerships amended the Dakota
Agreement to provide that, on the closing of the first portion of the
Page 8 of 14
<PAGE>
offering of the Units (see below), Atlas would pay an additional non-
refundable $475,000 deposit to the VenturesTrident Partnerships, with the
remaining $5,000,000 owing to the VenturesTrident Partnerships to be payable
at closing.
On October 28, 1994, the Company determined that it was in the best
interests of its shareholders not to proceed with the acquisition of the
Dakota shares held by the VenturesTrident Partnerships and forfeit its
$1,000,000 in nonrefundable deposits. Costs of $144,000 incurred in
conjunction with the Dakota transaction were also expensed. Under the terms
of the letter of intent as written, the Company believes it had no
obligation to proceed with the related equity infusion into Dakota.
Dakota has issued a press release asserting that the Company has a
contractual obligation to purchase the 3,100,000 convertible preferred
shares of Dakota, and that a portion of the proceeds of the private
placement of Units (which was completed on December 15, 1994) should be
applied to the purchase of such convertible preferred shares. Dakota stated
that it believes that Atlas has a binding obligation to acquire the
convertible preferred stock and it intends to pursue every course of action
available to it in order to enforce its rights under the terms of the Dakota
Agreement. The Company does not know whether any suit shall be commenced,
and it is not possible for the Company to predict the outcome, if and when
any such suit is brought. However, in the event a suit is brought, the
Company intends to defend against it vigorously.
In order to finance the above transactions, Atlas conducted a private
placement of 9,090,909 Units of Atlas securities during the summer of 1994
for a purchase price of $5.50 per Unit, each Unit consisting of one share of
Atlas common stock and one-half of a warrant (exercisable for five years) to
purchase a share of Atlas common stock at an exercise price of $7.00 per
share. The first portion of such private placement, consisting of the sale
of 6,486,809 Units for an aggregate purchase price of $35,677,450, was
completed on August 15, 1994, and the proceeds thereof were applied
primarily to the payment of the Cdn. $48,237,960 balance of the purchase
price for the Granges Shares. In connection with closing the first portion
of the private placement, Atlas entered into a $3.5 million secured, short-
term credit agreement with Gerald Metals, Inc. to cover, among other things,
certain expenses of the private placement. Atlas pledged to Gerald Metals,
Inc. the Granges Shares as part of the security for such loan.
The second portion of the private placement, which consisted of the sale of
an additional 2,604,100 Units for an aggregate purchase price of
$14,322,550, was completed on December 15, 1994 following the approval at a
Special Meeting of the Shareholders of a proposal to increase the authorized
share capital of Atlas. The Special Meeting was required due to the
Company, after completing the first portion of the offering, not having
sufficient authorized common stock to be issued and reserved for issuance in
connection with the second portion of the offering. Upon release of the
funds from the closing of the second portion, Atlas repaid the remaining
balance of $800,000 due on the Gerald Metals, Inc. short-term security
agreement. Accordingly, Gerald Metals, Inc. released all encumbrances and
liens on the assets of Atlas, including the Granges Shares.
12. For the quarter ended September 30, 1994, the Company reported the results
of Granges, Inc. ("Granges"), under the equity method, on a
Page 9 of 14
<PAGE>
current basis. Due to a difference in fiscal year ends and the inability to
obtain timely financial information for Granges for its quarter ended
December 31, 1994, the Company will implement a three month lag period in
reporting the results of operations of Granges. As a result, the Company's
equity in earnings (loss) of unconsolidated subsidiary for the three and six
month period ended December 31, 1994 and the foreign currency translation
adjustment, recorded in the Shareholder's Equity section of the Balance
Sheet as of December 31, 1994, reflects Granges' results of operations and
currency translation adjustments as of September 30, 1994 and for the three
months then ended. A summarized Statement of Operations (Unaudited) of
Granges Inc. for the three month period ended September 30, 1994 is
presented below:
<TABLE>
<CAPTION>
Three Months
Ended
Sept. 30, 1994
--------------
<S> <C>
Sales $15,344,000
Cost of sales 11,869,000
Depreciation, depletion & amortization 1,891,000
-----------
Gross margin 1,584,000
Net income (loss) $(1,148,000)
===========
</TABLE>
Under the equity method, the Company reported a loss of $364,000 for the
period August 15, 1994 (date of acquisition) to September 30, 1994. The
excess of cost of investment over the net assets acquired was amortized on a
unit of production (gold ounces) basis and is included in the reported loss.
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
---------------------------------------------------------------
RESULTS OF OPERATIONS
---------------------
Gold production during the six months ended December 31, 1994
decreased to 7,520 ounces from 37,600 ounces produced during the six
months ended December 31, 1993 as a result of the temporary suspension
of milling in September of 1994 and the processing of lower grade
stockpiled material prior to the interruption. Production for the
three months ended December 31, 1994 was 1,500 ounces compared to
18,700 for the three months ending December 31, 1993. The production
of 1,500 ounces in the second quarter of fiscal year 1995 was due
solely to the final processing of the in-process mill inventory
following the interruption of mill feed. The mining revenues
reflected the decrease in production by declining to $0 and $2,328,000
for the three and six months ended December 31, 1994 from $7,192,000
and $14,171,000 for the three and six months ended December 31, 1993.
The proceeds from the sale of the in-process mill inventory (1,500
ounces) was recorded as a reduction of the shutdown and standby costs
of $1,275,000 recorded in the first quarter of fiscal year 1995.
Production costs of $6,707,000 and $12,743,000 for the three and six
months ended December 31, 1993 decreased to $0, and $3,031,000 for the
three and six months ended December 31, 1994. The decrease is a result
of the suspension of milling in late September 1994. Costs associated
with placing the Gold Bar Mine on temporary shutdown and standby
through the end of the fiscal year were
Page 10 of 14
<PAGE>
estimated at $1,275,000 and were accrued in September 1994.
General and administrative costs for the three and six months ended
December 31, 1994, increased $62,000 and decreased $463,000,
respectively, compared to the comparable periods in fiscal year 1993.
General and administrative costs for the three months ended December
31, 1994 includes approximately $170,000 for the payment of severance
costs under the terms of his employment agreement to Michael P. Gross,
the former Senior Vice President and Chief Operating Officer of the
Company. The six month period ended December 31, 1993 includes
$490,000 in payments to former officers that were made in satisfaction
of employment agreements and severance packages in September 1993
arising out of the change of control discussed in Note 8 of Part 1
above.
The Registrant's revenue and income for the periods set forth above
are not necessarily indicative of the results in any future period due
to the suspension of both mining and milling at the Gold Bar Mine.
Management is continuing its ongoing economic evaluations and
optimization studies.
Working capital was $8,218,000 at December 31, 1994 and $3,354,000 at
December 31, 1993. The Registrant's current ratio is 2.68 to 1 at
December 31, 1994, compared to 1.53 to 1 at December 31, 1993. The
improved working capital position is primarily a result of the
proceeds received on the closing of the second portion of the $50
million financing on December 15, 1994. During the three month period
ended December 31, 1994, the Registrant also renegotiated collateral
requirements for reclamation bonds which reduced the level of cash
collateral required by approximately $2,900,000 and allowed the
Registrant to reduce the loan amount due Gerald Metals, Inc. under the
short-term credit facility. Management will utilize the $8.2 million
in working capital as of December 31, 1994 to address the lack of
cashflow from current operations. The Registrant intends to address
this problem by pursuing: 1) business combination strategies with
Granges Inc. (the Registrant currently owns 37.2% of the outstanding
stock), 2) alternatives for resumption of mining at the Gold Bar Mine,
3) development of the Tucker Hill perlite deposit and 4) acquisitions.
The Registrant's capital expenditures in the quarter ended December
31, 1994 were $48,000, all of which were for the development of the
Registrant's Tucker Hill perlite property. Funds required for the
further development of the Gold Bar Mine and the Tucker Hill perlite
property will, to the extent possible, be obtained from current
working capital, joint ventures, and project borrowings.
The Registrant believes that it can meet the estimated closing and
reclamation costs of its uranium and gold mining operations from
current working capital, from the sale of non-core assets, from the
aggregate $6,197,000 cash collateral for a letter of credit and
reclamation bonds relating to these costs and from the proceeds of
reimbursements made under the government cost sharing program
discussed in Note 10 of the financial statements.
Page 11 of 14
<PAGE>
PART II. OTHER INFORMATION
ITEM 1. LEGAL PROCEEDINGS
-----------------
None
ITEM 2. CHANGES IN SECURITIES
---------------------
At the Special Meeting of Shareholders of the Registrant held on
December 15, 1994, a proposal to increase the number of authorized
shares of Common Stock, par value $1, of the Registrant from
25,000,000 shares to 50,000,000 shares was adopted. The increase in
the number of authorized shares of Common Stock has no effect on the
rights of holders of such securities.
ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
---------------------------------------------------
A Special Meeting of Stockholders of the Registrant was held on
December 15, 1994. At the meeting a proposal recommending the
amendment to the Registrant's Certificate of Incorporation to increase
the number of authorized shares of Common Stock, par value $1.00, of
the Registrant from 25,000,000 shares to 50,000,000 was adopted, the
holders of 6,945,218 shares having voted for the proposal, the holders
of 1,003,283 shares having voted against the proposal and the holders
of 53,037 shares having abstained from voting on the proposal.
ITEM 5. OTHER INFORMATION
-----------------
None
ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K
--------------------------------
a. Exhibits
None
b. Reports filed on Form 8-K
On October 28, 1994, a Form 8-K/A was filed amending the
Form 8-K filed on August 26, 1994, reporting the closing of the
securities purchase agreement referred to in Note 11 to the
Financial Statements.
On October 31, 1994, a Form 8-K was filed reporting the decision
of the Registrant not to proceed with the Dakota Share
Acquisition referred to in Note 11 to the Financial Statements.
Page 12 of 14
<PAGE>
On November 28, 1994, a Form 8-K was filed reporting the intention
of the Registrant to pursue a longer term strategy for a business
combination with Granges Inc. and Hycroft Resources and Development
Corporation.
On December 22, 1994, a Form 8-K was filed reporting the closing of
the second portion of the $50 million financing referred to in Note
11 to the Financial Statements.
Page 13 of 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.
ATLAS CORPORATION
--------------------------------
(Registrant)
Date February 10, 1995 /s/ STEVE MANZ
----------------- --------------------------------
Steve Manz
Chief Financial Officer
Page 14 of 14
<TABLE> <S> <C>
<PAGE>
<ARTICLE> 5
<LEGEND>
THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM THE ATLAS
CORPORATION DECEMBER 31, 1994 CONSOLIDATED FINANCIAL STATEMENTS AND IS
QUALIFIED IN ITS ENTIRETY BY REFERENCE TO SUCH FINANCIAL STATEMENTS.
</LEGEND>
<MULTIPLIER> 1,000
<S> <C>
<PERIOD-TYPE> 6-MOS
<FISCAL-YEAR-END> JUN-30-1994
<PERIOD-END> DEC-31-1994
<CASH> 11,789
<SECURITIES> 0
<RECEIVABLES> 787
<ALLOWANCES> 0
<INVENTORY> 250
<CURRENT-ASSETS> 13,099
<PP&E> 47,389
<DEPRECIATION> 44,645
<TOTAL-ASSETS> 60,249
<CURRENT-LIABILITIES> 4,922
<BONDS> 3,500
<COMMON> 18,567
0
0
<OTHER-SE> 20,886
<TOTAL-LIABILITY-AND-EQUITY> 60,249
<SALES> 2,328
<TOTAL-REVENUES> 2,328
<CGS> 3,031
<TOTAL-COSTS> 3,031
<OTHER-EXPENSES> 2,380
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 218
<INCOME-PRETAX> (5,804)
<INCOME-TAX> 0
<INCOME-CONTINUING> (5,804)
<DISCONTINUED> 846
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> (4,958)
<EPS-PRIMARY> (.34)
<EPS-DILUTED> (.34)
</TABLE>
