<PAGE>
UNITED STATES SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 10-Q/A
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 September 30, 1997
------------------
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 3050, Denver, CO 80202
-----------------------------------------------------
(Address of principal executive offices)
(Zip Code)
303-629-2440
-------------------------------
(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 November 10, 1997, 27,206,858 shares of Common Stock, par value $1 per
share, were issued and outstanding.
<PAGE>
PART I. FINANCIAL INFORMATION
ITEM 1. FINANCIAL STATEMENTS.
--------------------
ATLAS CORPORATION
CONSOLIDATED BALANCE SHEETS
(in Thousands)
<TABLE>
<CAPTION>
September 30, December 31,
1997 1996
- -------------------------------------------------------------------------------------------
(Unaudited)
<S> <C> <C>
ASSETS
Current Assets:
Cash and cash equivalents $ 240 $ 1,099
Accounts receivable - trade 622 270
Accounts receivable - other 613 469
Inventories 1,029 848
Prepaid expenses and other current assets 96 195
-------- ---------
Total current assets 2,600 2,881
-------- ---------
Property, plant and equipment 65,990 64,166
Less, accumulated depreciation, depletion,
amortization and impairment (45,475) (44,779)
-------- ---------
20,515 19,387
Investment in Vista Gold Corp. (Notes 5 and 9) -- 11,542
Restricted cash and securities 6,220 6,266
Other assets 563 1,605
-------- ---------
$29,898 $41,681
======== =========
LIABILITIES
Current liabilities:
Trade accounts payable $ 2,142 $ 1,544
Accrued liabilities 2,299 2,136
Short-term debt (Note 7) 6,135 2,129
Deferred gain on joint venture agreement (Note 8) 750 --
-------- ---------
Total current liabilities 11,326 5,809
Long-term debt (Notes 6 and 9) 2,300 13,310
Other liabilities, long-term 9,088 9,505
Deferred gain on joint venture agreement (Note 8) 500 --
Minority Interest 593 685
Commitments and contingencies (Notes 4,12,13,14 and 15)
STOCKHOLDERS' EQUITY
Common stock (Notes 8 and 9) 27,207 24,180
Capital in excess of par value 66,774 68,514
Deficit (87,890) (77,867)
Currency translation adjustment -- (133)
Unrealized loss on investments in equity securities -- (2,322)
-------- ---------
Total stockholders' equity 6,091 12,372
-------- ---------
$29,898 $41,681
======== =========
</TABLE>
See notes to consolidated financial statements.
Page 2 of 16
<PAGE>
ATLAS CORPORATION
CONSOLIDATED STATEMENTS OF OPERATIONS
(In Thousands, Except Per Share Data, Unaudited)
<TABLE>
<CAPTION>
Three Months Ended Nine Months Ended
September 30, September 30,
----------------------------- ------------------------------
1997 1996 1997 1996
- ---------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Mining revenue $ 1,140 $ -- $ 2,789 $ --
Costs and expenses:
Production costs 1,098 -- 2,490 --
Depreciation, depletion and amortization 211 -- 647 --
Impairment of mineral property (Note 11) 31 -- 1,256 --
Shutdown and standby costs 96 268 328 829
General and administrative expenses 551 746 1,809 3,592
Exploration and prospecting costs 69 968 708 1,136
----------- ------- -------- --------
Gross Operating Loss (916) (1,982) (4,449) (5,557)
Other (income) and expense:
Interest expense 183 317 790 954
Interest income (103) (113) (299) (442)
Equity in loss of unconsolidated
subsidiary (Note 5) -- 770 -- 2,492
Gain on sale of marketable securities -- -- -- (1,333)
Gain from joint venture agreement (Note 8) (187) -- (250) --
Loss on repurchase of Debentures (Note 9) 8 -- 5,419 --
Other 47 (50) 6 (37)
----------- ------- -------- --------
Loss from continuing operations before
taxes and minority interest (864) (2,906) (10,115) (7,191)
Provision for income taxes -- -- -- --
----------- ------- -------- --------
Loss before minority interest (864) (2,906) (10,115) (7,191)
Minority interest in net loss of subsidiary 19 72 92 256
----------- ------- -------- --------
Net loss $ (845) $(2,834) $(10,023) $ (6,935)
=========== ======= ========= ========
Per share of common stock:
Loss from continuing operations $ (0.03) $ (0.14) $ (0.40) $ (0.35)
Loss from discontinued operations -- -- -- --
----------- ------- -------- --------
Net loss $ (0.03) $ (0.14) $ (0.40) $ (0.35)
=========== ======= ======== ========
Average number of common
shares outstanding 27,161 20,115 25,323 20,086
=========== ======= ======== ========
</TABLE>
See notes to consolidated financial statements.
Page 3 of 16
<PAGE>
ATLAS CORPORATION
CONSOLIDATED STATEMENTS OF CASH FLOWS
(In Thousands, Unaudited)
<TABLE>
<CAPTION>
Nine Months Ended
September 30,
----------------------------------
1997 1996
- -----------------------------------------------------------------------------------------------
<S> <C> <C>
Operating activities:
Net loss $(10,023) $ (6,935)
Add (deduct) non-cash items:
Depreciation, depletion, amortization 774 38
Impairment of mineral property 1,256 --
Equity in loss of unconsolidated subsidiary -- 2,492
Deferred gain on join venture agreement (250) --
Gain on sale of marketable securities -- (1,333)
Loss on repurchase of Debentures 5,419 --
Other (35) (241)
Net change in non-cash items
Related to operations (Note 3) 546 (2,797)
------------------- --------------
Cash used in continuing operations (2,313) (8,294)
------------------- --------------
From discontinued operations:
Change in estimated uranium reclamation costs (192) (1,051)
------------------- --------------
Cash provided by (used in) discontinued operations (192) (1,051)
------------------- --------------
Cash used in operating activities (2,505) (9,345)
------------------- --------------
Investing activities:
Additions to property, plant and equipment (3,119) (2,653)
Proceeds from joint venture agreement 1,500 --
Proceeds from issuance of debt released from escrow -- 10,000
Proceeds from sale of marketable securities 76 4,520
------------------- --------------
Cash provided by (used in) investing activities (1,543) 11,867
------------------- --------------
Financing activities:
Repayment of short-term debt -- (2,000)
Borrowings on short-term debt 506 --
Proceeds from issuance of stock 500 --
Proceeds from issuance of long-term debt 2,300 --
Costs of repurchasing of Debentures (117) --
------------------- --------------
Cash used in financing activities 3,189 (2,000)
------------------- --------------
Increase (decrease) in cash and cash equivalents (859) 522
Cash and cash equivalents:
Beginning of period 1,099 1,607
------------------- --------------
End of period $ 240 $ 2,129
=================== ==============
</TABLE>
See notes to consolidated financial statements.
Page 4 of 16
<PAGE>
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
1. The accompanying consolidated financial statements have been prepared in
accordance with generally accepted accounting principles for interim
financial information and with the instructions to Form 10-Q and Article 10
of Regulation S-X. Accordingly, they do not include all of the information
and footnotes required by generally accepted accounting principles for
complete financial statements. There has not been any change in the
significant accounting policies of Atlas Corporation (the "Company") for the
periods presented.
In the opinion of Management, all adjustments (consisting of normal recurring
accruals) considered necessary for a fair presentation have been included.
The results for these interim periods are not necessarily indicative of
results for the entire year. These statements should be read in conjunction
with the consolidated financial statements and notes thereto included in the
Company's Annual Report of Form 10-K for the fiscal year ended December 31,
1996.
Certain of the comparative figures have been reclassified to conform with the
current year's presentation.
2. In February 1997, the Financial Accounting Standards Board issued Statement
No. 128, Earnings per Share, which is required to be adopted on December 31,
1997. At that time, the Company will be required to change the method
currently used to compute earnings per share and to restate all prior
periods. Under the new requirements for calculating primary earnings per
share, the dilutive effect of stock options will be excluded. The impact of
Statement 128 on the calculation of primary and fully diluted earnings per
share for the periods ended September 30, 1997 and September 30, 1996 is not
expected to be material.
There has been no dilution of earnings per share as a result of the exercise
of Option Warrants to Purchase Common Stock or stock options during the
periods presented.
3. 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>
Nine Months Ended
September 30,
---------------------------------------
1997 1996
------------------ -----------------
<S> <C> <C>
Add (deduct) items other than cash:
Accounts receivable $ (496) $ 251
Inventories (181) --
Prepaid expenses and other current assets 99 (89)
Other assets 189 (2,406)
Trade accounts payable 457 (733)
Accrued liabilities 618 127
Other liabilities, long-term (140) 53
------------------ -----------------
$ 546 $(2,797)
================== =================
</TABLE>
Page 5 of 16
<PAGE>
Gold Properties
On March 21, 1997, the Company closed on the sale of its Musgrove Creek
property to Meridian Gold Company ("Meridian") for a total sales price of
$125,000, including $25,000 received in 1996. In addition, Meridian assumed a
reclamation obligation of $55,000, and conveyed to Atlas a 1% net smelter
return royalty on claims previously owned by Atlas. In the event Meridian
places minerals at Musgrove Creek into production, Atlas will receive an
additional $100,000.
Exploration and development expenditures on the Gold Bar claim block will be
funded by Barrick as described above. With completion of the Gold Bar
agreement (Note 8), and with other cost cutting measures recently implemented,
the Company's holding costs on the property will decrease significantly in
1997 to an estimated $350,000. These costs will be funded from cash flow from
operations, debt and equity financing and the Gold Bar sales proceeds.
Carrying costs of Grassy Mountain and Doby George will be funded by the
respective purchasers until a purchase decision is made. While the Company
has made expansion of the Bolivian operations its immediate focus, its long
term strategy is both to grow its Bolivian operations, and to develop and
expand the Company's interests in gold properties when market conditions
improve.
Reclamation Activities
Final reclamation of the uranium mill site near Moab, Utah will commence
following the issuance of a final Environmental Impact Statement on Atlas'
reclamation plan. See below, "Results of Operations - Reclamation Activities".
The total estimated cost of Atlas' proposed reclamation plan is $12-$17
million. As the Department of Energy will reimburse 56% of all reclamation
costs under Title X, Atlas will be reimbursed for approximately $6.7-$9.5
million in reclamation costs, leaving Atlas to fund $5.3-$7.5 million. The
Company has filed claims of $6.8 million for reimbursement of Title X
reclamation costs incurred through March 1997 and has received payments of
$4.3 million, leaving $2.5 million in Title X reimbursements due Atlas. Atlas
also has $4.2 million in restricted cash securing a Nuclear Regulatory
Commission ("NRC") reclamation performance bond. Based upon the amounts due
the Company under Title X, and the restricted cash supporting the performance
bond, the Company is confident that it will be able to fund and/or finance the
anticipated costs for reclamation of its uranium mill and tailings site.
LIQUIDITY
From the suspension of milling operations at the Gold Bar property in
September 1994 until the acquisition of Arisur in October of 1996, the Company
had no mining revenue and has funded its operating losses, capital and working
capital requirements through a combination of the issuance of debt and equity
instruments and the sale of assets.
As of September 30, 1997, the working capital deficit was $8,726,000, compared
to a deficit of $2,928,000 as of September 30, 1996. The Company's current
ratio at September 30, 1997 was .23 to 1, compared to .50 to 1 at September
30, 1996. The decrease during the year is a result of the Company's cash
investment in Arisur of $3,600,000, development and construction costs of
Page 10 of 16
<PAGE>
$3,273,000 at the Tucker Hill perlite property in Lakeview, Oregon,
reclassification of the Company's $3,500,000 convertible debenture due in
September 1998 to a current liability, ongoing general and administrative
expenses of $2,900,000 and other operating and capital expenditures of
$2,400,000. These amounts have been offset by receipts from the sale of Vista
shares of $5,603,000, the proceeds from the CAF loan of $2,300,000 and the
Barrick purchase transaction of $2,000,000.
In order to fund near term capital requirements, the Company expects to
utilize current cash available, cash flow from operations, the proceeds from
the CAF loan, Title X receipts and proceeds from the sale of assets. Longer
term capital requirements will be satisfied from future operating cash flows,
project financing and placement of additional debt or equity.
RESULTS OF OPERATIONS
During the three and nine month periods ended September 30, 1997, the Company
had mining revenue of $1,140,000 and $2,789,000 compared to no mining revenue
in the same periods of 1996. This is a result of the acquisition of Arisur in
October 1996, which has operating lead, zinc and silver mines in Bolivia,
South America. Mining revenue was less than expected during the nine months
ended September 30, 1997 due to flooding which cut off access to Don Francisco
and Koyamayu and reduced production from Andacaba during the first quarter.
This level of flooding is uncharacteristic and production from all mines has
resumed.
Cash production costs were $1,098,000 and $2,490,000 during the three and nine
month period ended September 30, 1997 compared to no costs during the similar
periods of 1996, for the same reasons as noted above. Production costs were
also adversely impacted by the flooding noted above resulting in lower than
expected operating cash flow of $509,000 for the nine months ended September
30, 1997.
Shutdown and standby costs at Gold Bar of $96,000 and $328,000 were incurred
in the three and nine month periods ended September 30, 1997 compared to
$268,000 and $829,000 for the comparable periods in 1996. The decrease is a
result of cost cutting measures implemented by the Company and the assumption
by Barrick of certain property carrying costs at Gold Bar.
Exploration costs for the three and nine month periods ending September 30,
1997 were $69,000 and $708,000 compared to $968,000 and $1,136,000 for the
comparable periods in 1996. The 1997 amount includes a $450,000 charge
pursuant to the Company's joint venture termination agreement with Vista Gold
Corp., whereas the 1996 figures include a charge of $922,000 for exploration
costs on the Commonwealth property pursuant to the Company's decision not to
exercise its purchase option on the property.
General and administrative expenses decreased during the three month period
ended September 30, 1997 to $551,000 from $746,000 for the comparable period
in 1996. The $195,000 decrease during the period is due primarily to an
overall cost reduction program undertaken in late 1996. The largest reduction
relates to salaries and benefits. General and administrative expenses during
the nine month period ended September 30, 1997 were $1,809,000 compared to
$3,592,000 for the comparable period in 1996. The 1996 amount is a result of
severance costs incurred in 1996 of $530,000 associated with resignation of
David J. Birkenshaw as Chairman and CEO of the Company and also $300,000
related to costs associated with the failed merger discussions with MSV
Resources Inc., Company bonuses paid during the first
Page 11 of 16
<TABLE> <S> <C>
<PAGE>
<ARTICLE> 5
<LEGEND>
This schedule contains summary financial information extracted from Atlas
Corporation September 30, 1997 Consolidated Financial Statements and is
qualified in its entirety by reference to such financial statements.
</LEGEND>
<MULTIPLIER> 1,000
<S> <C> <C>
<PERIOD-TYPE> 3-MOS 9-MOS
<FISCAL-YEAR-END> DEC-31-1997 DEC-31-1997
<PERIOD-START> JUL-01-1997 JAN-01-1997
<PERIOD-END> SEP-30-1997 SEP-30-1997
<CASH> 240 240
<SECURITIES> 0 0
<RECEIVABLES> 1,235 1,235
<ALLOWANCES> 0 0
<INVENTORY> 1,029 1,029
<CURRENT-ASSETS> 2,600 2,600
<PP&E> 65,990 65,990
<DEPRECIATION> 45,475 45,475
<TOTAL-ASSETS> 29,898 29,898
<CURRENT-LIABILITIES> 11,326 11,326
<BONDS> 5,800 5,800
0 0
0 0
<COMMON> 27,207 27,207
<OTHER-SE> (21,116) (21,116)
<TOTAL-LIABILITY-AND-EQUITY> 29,898 29,898
<SALES> 1,140 2,889
<TOTAL-REVENUES> 1,403 3,248
<CGS> 1,309 3,137
<TOTAL-COSTS> 1,309 3,137
<OTHER-EXPENSES> 615 9,276
<LOSS-PROVISION> 0 0
<INTEREST-EXPENSE> 183 790
<INCOME-PRETAX> (864) (10,115)
<INCOME-TAX> 0 0
<INCOME-CONTINUING> (845) (10,013)
<DISCONTINUED> 0 0
<EXTRAORDINARY> 0 0
<CHANGES> 0 0
<NET-INCOME> (845) (10,013)
<EPS-PRIMARY> (.03) (.40)
<EPS-DILUTED> (.03) (.40)
</TABLE>
