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Previous: J JILL GROUP INC, SC 13G/A, 1999-06-14 |
Next: STARBASE CORP, S-3, 1999-06-14 |
<PAGE>
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, DC 20549
FORM 10-Q/A
(Mark One)
/X/ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934
For the quarterly period ended April 30, 1999
OR
/ / TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
For the transition period from _______ to _______
COMMISSION FILE NUMBER 333-4513
RENCO METALS, INC.
(Exact name of registrant as specified in its charter)
<TABLE>
<S> <C>
DELAWARE 13-3724916
(State or other jurisdiction of (IRS Employer
incorporation or organization) Identification No.)
238 NORTH 2200 WEST
SALT LAKE CITY, UTAH 84116
(Address of principal executive offices) (Zip Code)
</TABLE>
(801) 532-2043
(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
Number of shares outstanding of each of the registrant's classes of common
stock, as of June 14, 1999:
COMMON STOCK, NO PAR VALUE 1,000 SHARES
<PAGE>
Preliminary Note: This amendment is filed to correct the long-term debt
figures in the balance sheets.
PART I - FINANCIAL INFORMATION
ITEM 1 - FINANCIAL STATEMENTS
RENCO METALS, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED BALANCE SHEETS
(DOLLARS IN THOUSANDS, EXCEPT PER SHARE AMOUNTS)
<TABLE>
<CAPTION>
APRIL 30, OCTOBER 31,
1999 1998
ASSETS (UNAUDITED) (AUDITED)
------------- -------------
<S> <C> <C>
Current assets:
Cash and cash equivalents $ 15,885 $ 21,690
Accounts receivable, less allowance for doubtful accounts of
$589 in 1999 and $514 in 1998 24,543 25,749
Inventories, net (note 2) 42,713 34,500
Prepaid expenses and other current assets 3,438 3,024
------------- -------------
Total current assets 86,579 84,963
------------- -------------
Property, plant, and equipment, net 37,012 35,385
Other assets, net 5,306 5,626
------------- -------------
$128,897 $ 125,974
------------- -------------
------------- -------------
LIABILITIES AND STOCKHOLDER'S DEFICIT
Current liabilities:
Current installments of long-term debt $ 23 $ 23
Accounts payable 7,491 7,279
Accrued expenses and other current liabilities 14,442 15,149
------------- -------------
Total current liabilities 21,956 22,451
------------- -------------
Long-term debt, excluding current installments 154,567 154,954
Other liabilities 12,506 14,180
------------- -------------
Total liabilities 189,029 191,585
------------- -------------
Stockholder's deficit:
Common stock, no par value. Authorized, issued, and
outstanding 1,000 shares 1 1
Additional paid-in capital 500 500
Accumulated deficit (60,633) (66,112)
------------- -------------
Total stockholder's deficit (60,132) (65,611)
------------- -------------
Commitments and contingencies
------------- -------------
$128,897 $ 125,974
------------- -------------
------------- -------------
</TABLE>
The accompanying notes are an integral part of these condensed consolidated
financial statements.
<PAGE>
RENCO METALS, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF INCOME
(UNAUDITED)
(DOLLARS IN THOUSANDS)
<TABLE>
<CAPTION>
SIX MONTHS THREE MONTHS
ENDED APRIL 30, ENDED APRIL 30,
--------------------------- ---------------------------
1999 1998 1999 1998
------------ ------------ ------------ ------------
<S> <C> <C> <C> <C>
Sales $ 87,567 $ 94,964 $ 45,947 $ 47,545
Costs and expenses:
Cost of sales 60,313 60,540 31,545 29,606
Depreciation, depletion, and amortization 4,672 4,406 2,336 2,130
Selling, general, and administrative expenses 10,199 12,042 5,520 6,876
------------ ------------ ------------ ------------
Total costs and expenses 75,184 76,988 39,401 38,612
------------ ------------ ------------ ------------
Income from operations 12,383 17,976 6,546 8,933
Other income (expense):
Interest income 363 585 124 269
Interest expense (9,330) (9,450) (4,659) (4,730)
------------ ------------ ------------ ------------
Total other income (expense) (8,967) (8,865) (4,535) (4,461)
------------ ------------ ------------ ------------
Income before income taxes 3,416 9,111 2,011 4,472
Income tax (benefit) expense (note 3) (2,063) 2,720 - 1,358
------------ ------------ ------------ ------------
Net income $ 5,479 $ 6,391 $ 2,011 $ 3,114
------------ ------------ ------------ ------------
------------ ------------ ------------ ------------
</TABLE>
The accompanying notes are an integral part of these condensed consolidated
financial statements.
<PAGE>
RENCO METALS, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(UNAUDITED)
(DOLLARS IN THOUSANDS)
<TABLE>
<CAPTION>
SIX MONTHS
ENDED APRIL 30,
---------------------------
1999 1998
------------ -----------
<S> <C> <C>
Net cash provided by operating activities $ 899 $ 2,875
------------ -----------
Cash flows from investing activities -
Capital expenditures, net (6,268) (1,769)
------------ -----------
Net cash used in investing activities (6,268) (1,769)
------------ -----------
Cash flows from financing activities:
Net borrowings (repayments) under revolving credit agreements (375) 1,752
Repayment of long-term debt (11) (10)
Payment of financing fees (50) -
Dividends - (2,000)
------------ -----------
Net cash used in financing activities (436) (258)
------------ -----------
Increase (decrease) in cash and cash equivalents (5,805) 848
Cash and cash equivalents, beginning of period 21,690 26,607
------------ -----------
Cash and cash equivalents, end of period $ 15,885 $ 27,455
------------ -----------
------------ -----------
SUPPLEMENTAL DISCLOSURES OF CASH FLOW INFORMATION
Cash paid during the period for interest $ 8,836 $ 8,956
Cash paid during the period for income taxes $ 209 $ 3,016
</TABLE>
The accompanying notes are an integral part of these condensed consolidated
financial statements.
<PAGE>
RENCO METALS, INC. AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(UNAUDITED)
(1) BASIS OF PRESENTATION
The accompanying condensed consolidated financial statements have been
prepared from the accounting records of Renco Metals, Inc. (Renco Metals)
and its subsidiaries (the Company), Magnesium Corporation of America
(Magcorp), and Sabel Industries, Inc. (Sabel), without audit (except
where presented data is specifically identified as audited) pursuant to
the rules and regulations of the Securities and Exchange Commission.
Renco Metals is a 100% owned subsidiary of The Renco Group, Inc. (Group).
The financial statements reflect all adjustments (consisting solely of
normal recurring adjustments) which are, in the opinion of management,
necessary for a fair statement of results for the interim periods
presented. The results of operations for the interim periods presented
are not necessarily indicative of the results to be expected for the full
year. These interim condensed consolidated financial statements should be
read in conjunction with the consolidated financial statements and notes
thereto included in the Company's Form 10-K for the fiscal year ended
October 31, 1998.
Renco Metals' 11.5% Senior Notes due 2003 (Senior Notes) are
unconditionally and fully guaranteed, jointly and severally, by both of
its subsidiaries, Magcorp and Sabel (the Guarantors), each of which is
wholly-owned. Separate financial statements of the Guarantors are not
presented because, in management's opinion, such financial statements
would not be material to investors because Renco Metals is a holding
company with no independent operations and its only assets are cash and
its investment in Magcorp and Sabel. Summarized financial information on
the combined Guarantors is presented below:
SUMMARIZED COMBINED GUARANTOR FINANCIAL INFORMATION
<TABLE>
<CAPTION>
SIX MONTHS THREE MONTHS
ENDED APRIL 30, ENDED APRIL 30,
1999 1998 1999 1998
------------ ------------ -------------- ------------
(DOLLARS IN THOUSANDS) (DOLLARS IN THOUSANDS)
<S> <C> <C> <C> <C>
Statement of operations data:
Net sales $87,567 $94,964 $ 45,947 $47,545
Cost of sales $60,313 $60,540 $ 31,545 $29,606
Net income $ 5,422 $ 6,379 $ 1,972 $ 3,103
</TABLE>
<TABLE>
<CAPTION>
OCTOBER 31,
APRIL 30, 1998
1999 (AUDITED)
-------------- ------------
(DOLLARS IN THOUSANDS)
<S> <C> <C>
Balance sheet data:
Current assets $ 84,752 $83,687
Noncurrent assets $ 42,318 $41,011
Current liabilities $ 15,311 $16,300
Noncurrent liabilities $ 17,073 $19,134
</TABLE>
<PAGE>
(2) INVENTORIES
Inventories consist of the following:
<TABLE>
<CAPTION>
APRIL 30, OCTOBER 31,
1999 1998
(UNAUDITED) (AUDITED)
-------------- -------------
(DOLLARS IN THOUSANDS)
<S> <C> <C>
Finished goods $ 32,513 $ 24,451
Brine in ponds 1,117 1,100
Spare parts and supplies 8,859 8,740
Raw materials and work-in-process 1,146 743
--------------- --------------
43,635 35,034
Less LIFO reserve 922 534
--------------- --------------
$ 42,713 $ 34,500
--------------- --------------
--------------- --------------
</TABLE>
(3) INCOME TAXES
On January 15, 1999, Group filed an election with the consent of its
shareholders with the Internal Revenue Service to change its taxable
status from that of a subchapter C corporation to that of a subchapter
S corporation, effective November 1, 1998. At the same time, Group
elected for the Company to be treated as a qualified subchapter S
subsidiary (QSSS). Most states in which the Company operates will follow
similar tax treatment. QSSS status requires the ultimate shareholders to
include their pro rata share of the Company's income or loss in their
individual tax returns. The Company will continue to provide for state
and local income taxes for the taxing jurisdictions which do not
recognize QSSS status; however, management believes this is not material
to the Company. As a result of this change in tax status, the Company
recognized an income tax benefit of $2,063,000 during the three months
ended January 31, 1999, which included the elimination of net deferred
tax liabilities recorded as of October 31, 1998.
<PAGE>
S I G N A T U R E S
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.
RENCO METALS, INC.
(Registrant)
<TABLE>
<S> <C>
JUNE 14, 1999 /s/ IRA LEON RENNERT
- -------------------------- -----------------------------
Date Ira Leon Rennert
Chairman of the Board and
Principal Executive Officer
JUNE 14, 1999 /s/ ROGER L. FAY
- -------------------------- -----------------------------
Date Roger L. Fay
Vice President - Finance
Principal Financial and
Accounting Officer
</TABLE>
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