<PAGE>
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 June 30, 1998
-------------
or
(_) Transition Report Pursuant to Section 13 or 15(d) of the Securities
Exchange Act of 1934
For the transition period from ________________________
to ________________________
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 3140, 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 August 14, 1998, 27,360,253 shares of Common Stock, par value $0.01 per
share, were issued and outstanding.
Page 1 of 14
<PAGE>
PART I. FINANCIAL INFORMATION
ITEM 1. FINANCIAL STATEMENTS.
--------------------
ATLAS CORPORATION
CONSOLIDATED BALANCE SHEETS
(in Thousands)
<TABLE>
<CAPTION>
June 30, December 31,
1998 1997
- -----------------------------------------------------------------------------------------------------------
(Unaudited)
ASSETS
Current Assets:
<S><C> <C> <C>
Cash and cash equivalents $ 583 $ 583
Accounts receivable trade 926 542
Title X receivable (Note 5) 1,100 1,100
Accounts receivable other 294 541
Inventories 1,009 965
Prepaid expenses and other current assets 43 37
--------------------
Total current assets 3,955 3,768
-------------------- ---------------------
Property, plant and equipment 58,997 60,427
Less, accumulated depreciation, depletion,
amortization and impairment (46,488) (46,027)
-------------------- ---------------------
12,509 14,400
Restricted cash and securities 6,181 6,208
Asset held for sale 3,000 3,000
Title X receivable (Note 5) 13,684 14,765
Other assets 136 175
-------------------- ---------------------
$ 39,465 $ 42,316
==================== =====================
LIABILITIES
Current liabilities:
Trade accounts payable $ 1,992 $ 2,209
Accrued liabilities 2,071 2,189
Short-term debt (Note 4) 5,936 6,017
Deferred gain on joint venture agreement 688 750
Current portion of estimated uranium reclamation
costs (Note 5) 800 800
-------------------- ---------------------
Total current liabilities 11,487 11,965
Long-term debt 1,917 1,917
Other liabilities, long-term (Note 5) 26,679 27,903
Commitments and contingencies (Note 5)
STOCKHOLDERS' EQUITY
Common stock 27,360 27,282
Capital in excess of par value 66,672 66,735
Deficit (94,650) (93,486)
-------------------- ---------------------
Total stockholders' equity (618) 531
--------------------
$ 39,465 $ 42,316
==================== =====================
</TABLE>
See notes to consolidated financial statements.
Page 2 of 14
<PAGE>
ATLAS CORPORATION
CONSOLIDATED STATEMENTS OF OPERATIONS
(In Thousands, Except Per Share Data, Unaudited)
<TABLE>
<CAPTION>
Three Months Ended Six Months Ended
June 30, June 30,
------------------------------------- -------------------------------------
1998 1997 1998 1997
- -----------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Mining revenue $ 963 $ 995 $ 2,099 $ 1,649
Costs and expenses:
Production costs 831 778 1,804 1,392
Depreciation, depletion and amortization 227 186 427 436
Impairment of mineral property 34 1,225 34 1,225
Shutdown and standby costs 88 125 163 232
General and administrative expenses 332 526 656 1,068
Exploration and prospecting costs 20 82 42 639
---------------- ---------------- ---------------- ----------------
Gross operating loss (569) (1,927) (1,027) (3,343)
Other (income) and expense:
Interest expense 137 297 296 607
Interest income (80) (79) (154) (193)
Gain from joint venture agreement (188) (63) (375) (63)
Loss on repurchase of debentures -- 5,411 -- 5,411
Loss on asset held for sale 474 57 474 114
Other (53) 62 (104) (41)
---------------- ---------------- ---------------- ----------------
Loss from continuing operations before
taxes and minority interest (859) (7,612) (1,164) (9,178)
Provision for income taxes -- -- -- --
---------------- ---------------- ---------------- ----------------
Net loss $ (859) $ (7,612) $ (1,164) $ (9,178)
================ ================ ================ ================
Basic and diluted earnings per share of common stock:
Loss from continuing operations $ (0.03) $ (0.31) $ (0.04) $ (0.38)
Loss from discontinued operations -- -- -- --
---------------- ---------------- ---------------- ----------------
Net loss $ (0.03) $ (0.31) $ (0.04) $ (0.38)
================ ================ ================ ================
Average number of common
shares outstanding 27,360 24,582 27,352 24,389
================ ================ ================ ================
</TABLE>
See notes to consolidated financial statements
Page 3 of 14
<PAGE>
Atlas Corporation
CONSOLIDATED STATEMENTS OF CASH FLOWS
(In Thousands, Unaudited)
<TABLE>
<CAPTION>
Six Months Ended
June 30,
--------------------------------------
1998 1997
- --------------------------------------------------------------------------------------------
Operating activities:
<S> <C> <C>
Net loss $ (1,164) $ (9,178)
Add (deduct) non-cash items:
Depreciation, depletion, amortization 464 435
Impairment of mineral property 34 1,225
Gain on joint venture agreement (375) (62)
Loss on asset held for sale 474 114
Loss on repurchase of debentures -- 5,411
Other -- 87
Net change in non-cash items
related to operations (Note 3) (1,030) 99
------------ ----------
(1,597) (1,869)
------------ ----------
From discontinued operations:
Change in estimated uranium reclamation costs 759 27
------------ ----------
Cash provided by discontinued operations 759 27
Cash used in operating activities (838) (1,842)
------------ ----------
Investing activities:
Additions to property, plant and equipment (281) (1,548)
Proceeds from joint venture agreement -- 1,500
Proceeds from sale of property, plant and equipment 1,674 --
Investment in asset held for sale (474) (1,183)
Proceeds from sale of marketable securities -- 76
------------ -----------
Cash provided by (used in) investing activities 919 (1,155)
------------ -----------
Financing activities:
Net repayment of short-term debt (81) --
Borrowings on short-term debt -- 319
Proceeds from issuance of stock -- 500
Proceeds from issuance of long-term debt -- 2,300
Costs of repurchasing of debentures -- (117)
------------ -----------
Cash provided by (used in) financing activities (81) 3,002
------------ -----------
Increase in cash and cash equivalents -- 5
Cash and cash equivalents:
Beginning of period 583 1,022
------------------ -----------
End of period $ 583 $ 1,027
================== ===========
</TABLE>
See notes to consolidated financial statements.
Page 4 of 14
<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,
1997.
Certain of the comparative figures have been reclassified to conform with the
current year's presentation.
2. In 1997, the Financial Accounting Standards Board issued Statement No. 128,
"Earnings per Share." The new statement replaced the calculation of primary
and fully diluted earnings per share with basic and diluted earnings per
share. Unlike primary earnings per share, basic earnings per share excludes
any dilutive effects of options, warrants and convertible securities. Diluted
earnings per share is similar to the previously reported fully diluted
earnings per share. Adoption of the new standard, which involves restatement
of earnings (loss) per share amounts for prior periods, had no material
effect on the Company's earnings (loss) per share amounts for all 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>
Six Months Ended
June 30,
---------------------------------------
1998 1997
- -----------------------------------------------------------------------------------------------------
Add (deduct) items other than cash:
<S> <C> <C>
Accounts receivable $ (137) $(169)
Inventories (44) (223)
Prepaid expenses and other current assets (6) 104
Other assets 66 172
Trade accounts payable (217) 86
Accrued liabilities (103) 103
Other liabilities, long-term (589) 26
$(1,030) $ 99
================= =================
</TABLE>
Page 5 of 14
<PAGE>
4. Short-term debt consisted of the following:
<TABLE>
<CAPTION>
June 30, December 31,
1998 1997
- -----------------------------------------------------------------------------------------------------------------------
<S> <C> <C>
Redeemable Convertible Debenture, due September 20, 1998, bearing interest at 9% $3,500 $3,500
Advances on sale of concentrates 1,256 968
Other 1,180 1,549
------ ------
$5,936 $6,017
====== ======
</TABLE>
5. The Company is obligated to decommission and reclaim its uranium mill site
located near Moab, Utah. The Company discontinued its uranium operations and
permanently shut down its uranium mill and mines in 1987, and estimated
shutdown expenses and reclamation costs were accrued. Title X of "The
Comprehensive National Energy Policy Act" ("Title X"), enacted in October
1992, provides for the reimbursement of past and future reclamation expenses
related to uranium sites operated under Atomic Energy Commission contracts.
The Company's uranium reclamation costs are subsidized by this Government
cost sharing program since 56% of its tailings were generated under
government contracts. The total estimated reclamation liability
($21,613,000) and current and future Title X receivables ($14,784,000) are
shown separately in the accompanying consolidated balance sheets, leaving a
net liability to the Company of $6,829,000 as of June 30, 1998.
The Company has submitted five claims to the Department of Energy ("DOE")
under Title X for reclamation costs incurred from the fiscal year ended June
30, 1980 through March 31, 1998. As of June 30, 1998, the status of the five
claims is as follows:
<TABLE>
<CAPTION>
Actual
Gross Amount Reim-bursement Reim-bursements
Gross Claim Approved Receivable Received Balance Due
Claim Date Amount
- -----------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
July 7, 1994 $4,999,000 $4,510,000 $2,530,000 $2,336,000 $ 194,000
June 16, 1995 3,638,000 2,591,000 1,453,000 1,287,000 166,000
May 1, 1996 3,998,000 2,884,000 1,618,000 1,166,000 452,000
May 1, 1997 2,054,000 1,579,000 886,000 567,000 319,000
May 1, 1998 1,602,000 -- /1/ 899,000 -- 899,000 /1/
- ------------------------------------------------------------------------------------------------------------------------
Totals $7,386,000 $5,356,000 $2,030,000
========================================================================================================================
</TABLE>
/1/ Pending.
In addition to the above amounts, the Company includes in the Title X
receivable in the consolidated balance sheet an amount equal to 56% of its
future estimated reclamation costs. Timing of the actual payments for
approved reimbursements is a function of Congressional appropriation of
Title X funding.
6. At the Company's annual meeting dated June 18, 1998, the stockholders of the
Company approved an amendment to the Company's Restated Certificate of
Incorporation increasing the number of authorized shares of common stock
from 50,000,000 shares to 100,000,000 shares and reducing the par value of
the Company's common stock from $1.00 to $0.01 per share. The amendment was
filed with the Delaware Secretary of State and effective on August 13, 1998.
Page 6 of 14
<PAGE>
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
---------------------------------------------------------------
RESULTS OF OPERATIONS
---------------------
"SAFE HARBOR" STATEMENT UNDER THE UNITED STATES PRIVATE SECURITIES LITIGATION
REFORM ACT OF 1995.
Statements which are not historical facts contained in this Form 10-Q are
forward looking statements that involve risks and uncertainties that could
cause actual results to differ from projected results. Factors that could
cause actual results to differ materially include, among others: general
economic conditions, metal and mineral prices, political events in foreign
countries, the risks associated with foreign operations generally, the timing
of receipt of necessary governmental permits, climatic conditions, labor
relations, availability and cost of material and equipment, the actual
configuration of ore bodies, delays in anticipated start-up dates,
environmental risks, the results of financing efforts, including the ability
of the Company to renegotiate its debts, and other risk factors detailed in
the Company's Form 10-K and 8-K filed with the Securities and Exchange
Commission.
RECENT EVENTS
The Company had previously reported that on April 27, 1998, that it had
executed a letter agreement (the "Agreement") with North & South International
Bancorp Limited ("NSIBL"), a Canadian Corporation with offices in Toronto,
Ontario (the "Buyer"), for the sale of all of its controlling interest in
Cornerstone Industrial Minerals Corporation ("Cornerstone"). On June 1, 1998,
the Company announced that the Agreement has been terminated due to non-
performance by NSIBL of its obligations in accordance with the terms of the
agreement. On June 22, 1998, the Company retained Monarch Financial
Corporation to assist in the sale of its interest in Cornerstone. Based upon
the activity to date, the Company expects to begin negotiations with
prospective buyers in the near future.
On July 15, 1998, Tombstone Explorations Company Ltd. notified the Company
that it was terminating its exclusive option agreement with the Company to
purchase 100% of the Grassy Mountain gold property. The Company will continue
to market the property to interested buyers until an acceptable offer has been
received.
During 1997, the Company completed transactions on two of its other non-
operating properties. In June 1997, the Company sold 90% of its Gold Bar
property to Barrick Gold Exploration Inc. ("Barrick") for $1 million in cash
and the purchase by Barrick of one million shares of the Company's stock at $1
per share. Under the agreement, Barrick is also required to spend $3 million
in exploration expenditures by June of 1999. To date Barrick has spent in
excess of $1 million on exploration and is presently conducting exploratory
drilling at Gold Bar. At Barrick's election, on or before June 3, 1999, the
balance of the Gold Bar property will be conveyed to Barrick and Atlas may
elect either to receive an additional $15,000,000 in cash and retain a 2% net
smelter royalty, or to participate with Barrick in the further exploration and
development of Gold Bar as a 25% carried joint venture participant. If Atlas
elects to participate as a joint venture partner, Barrick must spend the
first $15,000,000 on the project prior to any contribution being required of
Atlas. If Barrick chooses not to acquire the balance of the properties by June
3, 1999, all of Barrick's interest in the Gold Bar properties will be
reconveyed to Atlas. In September 1997, the Company executed an option
agreement for the sale of its Doby George property for a total purchase price
of $1.6 million, to be paid in
Page 7 of 14
<PAGE>
installments through September 1998. In June 1998, this transaction was
completed early at a discount to the buyer of $40,000.
In February 1997, Arisur signed a financing agreement with the Corporacion
Andina de Fomento ("CAF") for $3 million. CAF is a multilateral financial
institution that supports sustainable development and integration efforts
within the Andean region of South America. Proceeds of $2.3 million, received
in May 1997, paid for mill equipment and expansion programs at the Andacaba
mine and reimbursed Atlas $560,000 of funds previously advanced for said
purposes. As a result of a reevaluation of capital requirements for further
development, the remaining $700,000 that was to be used for the development of
Don Francisco has not been drawn.
CAPITAL RESOURCE REQUIREMENTS
Bolivian operations
The Company is in the process of evaluating a program for its Andacaba mine to
increase its current reserves and to justify increased development. Based upon
the results of the evaluation, the Company anticipates the implementation of a
new operating plan at Andacaba. Implementation of the operating plan would
require additional capital expenditures for underground drilling and/or
development of a decline ramp to provide for increased productivity through
more efficient access to the ore body. Limited development is underway at Don
Francisco and Koyamayu.
It is anticipated that funding for the initial drill program will be financed
with funds from the sale of Cornerstone (see above). Other capital
expenditures would be financed either through renegotiation of the CAF loan
noted above and/or through other long-term project financing and cash flows
from operations as available.
The Company anticipates that the acquisition of additional Bolivian
operations, if any, would be funded with cash flow from operations, project
financing, placement of additional equity or debt and/or the proceeds from the
sale of assets discussed above.
Mineral Properties
Exploration and development expenditures on the Gold Bar claim block are being
funded by Barrick as described above. With the completion of the agreement
with Barrick, it is estimated that the Company's holding costs on the property
will decrease in 1998 to approximately $300,000. These costs will be funded
from the proceeds from the sale of Cornerstone and/or other properties (see
above).
While the Company has made the expansion of the Bolivian lead, zinc and silver
operations its immediate focus, its long term strategy is to grow its Bolivian
operations, and to develop and expand the Company's interests in mineral
properties.
Reclamation Activities
The Company is obligated to decommission and reclaim its uranium mill site
near Moab, Utah. Final reclamation will commence following the issuance of a
final Environmental Impact
Page 8 of 14
<PAGE>
Statement on Atlas's reclamation plan. See below, "Results of Operations --
Reclamation Activities." The total estimated cost of Atlas's proposed
reclamation plan is approximately $22 million. As the Department of Energy
will reimburse 56% of all reclamation costs under Title X, Atlas will be
reimbursed for approximately $12.3 million in reclamation costs, leaving Atlas
approximately $9.7 million to fund. The Company has filed claims of $7.4
million for reimbursement of Title X reclamation costs incurred through March
1998 and has received payments of $5.4 million, leaving $2.0 million in Title
X reimbursements currently due Atlas. Atlas also has $4.2 million in
restricted cash securing a Nuclear Regulatory Commission ("NRC") reclamation
performance bond. In order to meet its reclamation obligations, the Company
anticipates using the Title X receivable and restricted cash noted above and,
as necessary, cash flow from operations and/or the sale of assets.
LIQUIDITY
As of June 30, 1998, the working capital deficit was $7,532,000, which
compares to a deficit of $8,197,000 as of December 31, 1997. The Company's
current ratio at June 30, 1998 was .34 to 1, compared to .31 to 1 at December
31, 1997. The increase during the period is a result of the receipt of Title
X payments of $1,080,000 and completion of the Doby sale as noted above. These
increases were offset by capital expenditures of $281,000 and the operating
loss during the period.
In order to fund near term capital requirements the Company is seeking to sell
its interest in Cornerstone. Longer term capital requirements will be
satisfied from project financing, future operating cash flows, placement of
additional equity or debt and/or from the sale of other assets.
The Company has debts totaling $4.4 million coming due in September, 1998,
which it does not currently have sufficient resources to cover. The Company
intends to negotiate with its creditors in an effort to reach revised payment
terms which are mutually acceptable to all parties. In the event that revised
terms cannot be agreed upon, the Company may be forced to consider other
alternatives to protect its interests.
RESULTS OF OPERATIONS
During the three and six months ended June 30, 1998, the Company had mining
revenue of $963,000 and $2,099,000 compared to $995,000 and $1,649,000 for the
same periods of 1997. During 1997, the Company completed a mill expansion
which more than doubled the capacity of the Andacaba Mill. Also, production
during the first quarter of 1997 was significantly less than expected due to
flooding which reduced production from Andacaba. As a result, mill throughput
increased during the three and six months ended June 30, 1998 to 28,793 tonnes
and 55,089 tonnes, respectively compared to 18,289 tonnes and 31,564 tonnes
for the comparable periods in 1997, resulting in the increase in revenue for
the six month period ended June 30, 1998. For the three month period ended
June 30, 1998, the production increases were offset as a result of logistical
difficulties in the shipment of ore, which delayed shipments from Potosi,
Bolivia, resulting in an increase in inventory at the end of the period and a
decrease in revenue. These issues have been resolved and should reverse in the
third quarter. Lower metal prices also negatively impacted revenues during
this period.
Cash production costs were $831,000 and $1,804,000 during the three and six
month periods ended June 30, 1998 compared to $778,000 and $1,392,000 during
the same periods of 1997.
Page 9 of 14
<PAGE>
The increase in production costs during the periods is primarily related to
the increase in production as described above. Total unit costs decreased from
$42 and $44 per tonne processed during the respective three and six month
periods in 1997 to $29 and $33 per tonne in 1998 as a result of efficiencies
associated with the higher production levels.
Shutdown and standby costs at Gold Bar were $88,000 and $163,000 for the three
and six month periods ended June 30, 1998 compared to $125,000 and $232,000
for the comparable periods in 1997. The decrease is a result of cost cutting
measures implemented by the Company as well as a result of the assumption of
certain of these costs under the agreement with Barrick described above.
Exploration costs for the three and six month periods ended June 30, 1998 were
$20,000 and $42,000 compared to $82,000 and $639,000 for the comparable
periods in 1997. The 1997 amount includes a $450,000 charge pursuant to the
Company's joint venture termination agreement with Vista Gold Corp.
Exploration costs have also been reduced as part of the Company's cost
reduction program and through the allocation of certain costs to joint venture
partners.
General and administrative expenses for the three and six months ended June
30, 1998 were $332,000 and $656,000 compared to $526,000 and $1,068,000 for
the comparable periods in 1997. The reductions reflect the Company's
continued efforts to reduce such expenses. The Company's corporate staff has
been reduced from 11 people in the first quarter of 1997 to 6 at June 30,
1998. Additionally, in December 1997, the Company negotiated a reduction in
the amount of space under lease at its corporate headquarters in Denver,
Colorado, resulting in a reduction of $11,000 per month in leasehold costs.
Strong efforts have also been made to reduce outside consulting fees.
Interest expense incurred during the three and six month periods ended June
30, 1998 was $137,000 and $296,000 compared to $297,000 and $607,000 for the
same periods in 1997. The decrease is primarily a result of the Company's
repurchase of its Exchangeable Debenture in June 1997, reducing interest
expense by $60,000 per month. This reduction has been in part offset by the
increase in interest expense related to the CAF and other loans for the
Bolivian operations.
The Company has reevaluated the estimated realizable value of its interest in
Cornerstone Industrial Minerals Corporation (asset held for sale) at June 30,
1998. Based upon this reevaluation, the Company took a charge of $474,000 to
loss on asset held for sale for the three and six month periods ended June 30,
1998. This is a result of the continuing cash requirements at Cornerstone to
fund operations, the delay in the completion of the sale, and a reassessment
of the expected sales proceeds to the Company.
The Company incurred $87,000 and $281,000 in capital expenditures for the
three and six month period ended June 30, 1998, substantially all of which
related to the mine and mill expansion in Bolivia.
Reclamation Activities
On March 7, 1997, the US Nuclear Regulatory Commission ("NRC") issued its
final Technical Evaluation Report ("TER") which concluded that the Atlas
reclamation plan was in compliance with the technical requirements for capping
the tailings facility on-site. The final
Page 10 of 14
<PAGE>
requirement before NRC can complete the Environmental Impact Statement ("EIS")
and make its final decision on the reclamation plan was completion of the
final biological opinion by the US Fish and Wildlife Service ("FWS"), which
was issued by the FWS on July 29, 1998. The FWS concluded that certain
mitigative measures would offset impacts that may occur to the endangered fish
in the Colorado River from implementation of the on-site reclamation plan. The
final EIS is anticipated in early 1999.
IMPACT OF YEAR 2000
The Company is in the process of reviewing the potential impact of the year
2000 on the ability of the Company's and its third party supplier's computer
systems to accurately process information that may be date sensitive.
Programs that recognize a date using "00" as the year 1900 rather than the
year 2000 could result in errors or system failures. The Company's computer
programs consist of canned software which will be upgraded by the manufacturer
at minimal cost to the Company in order to achieve year 2000 compliance
internally. However, the Company has not yet completed its assessment of the
impact of the year 2000 on third parties upon which it relies and the related
impacts to the Company. The Company places significant reliance on third
parties for its power supply to operate its mining and milling operations and
also on rail, trucking and shipping providers for the transport of its
product. If this issue is not adequately addressed by these third party
providers in a timely manner, it could result in a material financial risk to
the Company.
Page 11 of 14
<PAGE>
PART II. OTHER INFORMATION
Item 1. Legal Proceedings
-----------------
On June 20, 1997 the Company was served with a Complaint in the matter
of Curt Goldschmidt and Ana Maria Goldschmidt (the "Goldschmidts') vs.
Atlas Corporation; Suramco Metals, Inc.; Arisur Inc.; and Harold R.
Shipes and Eileen A. Shipes in the Superior Court of the State of
Arizona. The Goldschmidts were seeking damages in the amount of
$800,000 for nonpayment of the full purchase price for the sale of Cia
Minera Andacaba S.A. to Suramco Metals, Inc. and Arisur Inc. On June
25, 1998, the Company entered into a settlement agreement and mutual
release of all claims (the "Settlement Agreement") with the
Goldschmidts. The Settlement Agreement provided for the payment by the
Company of $80,000 to the Goldschmidts on the date of signing of the
Settlement Agreement. In addition, at the election of the Goldschmidts,
the Company has agreed to purchase from the Goldschmidts 2,000,000
shares of the Company's stock for $400,000 on September 11, 1998 and
250,000 shares of the Company's stock for $50,000 on December 11, 1998.
In return the Goldschmidts released all claims against the Company, its
subsidiaries and affiliates.
Item 2. Changes in Securities
---------------------
None
Item 3. Defaults upon Senior Securities
-------------------------------
None
Item 4. Submission of Matters to a Vote of Security Holders
---------------------------------------------------
The Company held its annual meeting on June 18, 1998. There were four
issues submitted to the stockholders of the Corporation for a vote as
follows:
1. Two directors were reelected at the meeting, Mario Caron and
Christopher J. A. Davie. Mr. Caron was elected with 14,071,624 votes
for and 4,328,647 votes withheld. Mr. Davie was elected with
14,118,135 votes for and 4,282,136 votes withheld.
2. Ernst & Young, LLP were approved as the auditors for the year ended
December 31, 1998 with 18,209,582 votes for, 133,069 against and
57,620 abstentions.
3. An amendment to the Company's Restated Certificate of Incorporation
increasing the number of authorized shares of common stock from
50,000,000 shares to 100,000,000 shares and reducing the par value
of the Company's common stock from $1.00 per share to $0.01 per
share was approved at the meeting. Votes in favor of the amendment
were 13,560,355, with 4,599,058 shares voting against the proposal
and 240,858 shares abstaining.
Page 12 of 14
<PAGE>
4. A Stockholder proposal relating to cumulative voting was defeated at
the meeting with 8,102,463 shares voting against the proposal,
4,461,533 shares voting in favor, 392,408 shares abstaining and
5,443,867 broker non-votes.
Item 5. Other Information
-----------------
None
Item 6. Exhibits and Reports on Form 8-K
--------------------------------
a. Exhibits
None
b. Reports on Form 8-K
None
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)
By: /s/ James R. Jensen
-------------------
James R. Jensen
Treasurer
Date: August 14 , 1998 /s/ James R. Jensen
-------------------
James R. Jensen
Treasurer (Principal Financial
Officer & Chief Accounting Officer)
Page 14 of 14
<TABLE> <S> <C>
<PAGE>
<ARTICLE> 5
<MULTIPLIER> 1,000
<S> <C> <C>
<PERIOD-TYPE> 3-MOS 3-MOS
<FISCAL-YEAR-END> DEC-31-1998 DEC-31-1997
<PERIOD-START> APR-01-1998 APR-01-1997
<PERIOD-END> JUN-30-1998 JUN-30-1997
<CASH> 583 583
<SECURITIES> 0 0
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<PP&E> 58,997 60,427
<DEPRECIATION> 46,488 46,027
<TOTAL-ASSETS> 39,465 42,316
<CURRENT-LIABILITIES> 11,487 11,965
<BONDS> 3,500 3,500
0 0
0 0
<COMMON> 27,360 27,282
<OTHER-SE> (27,978) (26,751)
<TOTAL-LIABILITY-AND-EQUITY> 39,465 42,316
<SALES> 963 995
<TOTAL-REVENUES> 963 995
<CGS> 1,058 964
<TOTAL-COSTS> 1,058 964
<OTHER-EXPENSES> 627 7,346
<LOSS-PROVISION> 0 0
<INTEREST-EXPENSE> 137 297
<INCOME-PRETAX> (859) (7,612)
<INCOME-TAX> 0 0
<INCOME-CONTINUING> (859) (7,612)
<DISCONTINUED> 0 0
<EXTRAORDINARY> 0 0
<CHANGES> 0 0
<NET-INCOME> (859) (7,612)
<EPS-PRIMARY> (0.03) (0.31)
<EPS-DILUTED> (0.03) (0.31)
</TABLE>
