<PAGE>
<PAGE>
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 10-Q
(Mark One)
X QUARTERLY REPORT UNDER 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 __________
Commission File Number 1-13404
THE GENERAL CHEMICAL GROUP INC.
(Exact name of Registrant as specified in its charter)
DELAWARE 02-0423437
(State of other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification Number)
LIBERTY LANE
HAMPTON, NEW HAMPSHIRE 03842
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code: (603) 929-2606
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
--- ---
The number of shares of Common Stock outstanding at October 17, 1997 was
11,186,137.
The number of shares of Class B Common Stock outstanding at October 17, 1997 was
9,768,421.
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
<PAGE>
<PAGE>
THE GENERAL CHEMICAL GROUP INC.
FORM 10-Q
QUARTERLY PERIOD ENDED SEPTEMBER 30, 1997
INDEX
<TABLE>
<CAPTION>
PAGE NO.
---------
<S> <C>
PART I. FINANCIAL INFORMATION:
Item 1. Financial Statements
Consolidated Statements of Operations - Three Months and
Nine Months Ended September 30, 1996 and 1997......................... 1
Consolidated Balance Sheets - December 31, 1996 and
September 30, 1997.................................................... 2
Consolidated Statements of Cash Flows - Nine Months
Ended September 30, 1996 and 1997..................................... 3
Notes to the Consolidated Financial Statements......................... 4-7
Item 2. Management's Discussion and Analysis of Financial
Condition and Results of Operations.......................... 8-9
PART II. OTHER INFORMATION:
Item 1. Legal Proceedings............................................... 10
Item 6. Exhibits and Reports on Form 8-K................................ 11
SIGNATURES............................................................... 12
EXHIBIT INDEX............................................................ 13
EXHIBITS................................................................. 14-15
</TABLE>
<PAGE>
<PAGE>
PART I. FINANCIAL INFORMATION
ITEM 1. FINANCIAL STATEMENTS.
THE GENERAL CHEMICAL GROUP INC.
CONSOLIDATED STATEMENTS OF OPERATIONS
(IN THOUSANDS, EXCEPT SHARE DATA)
(UNAUDITED)
<TABLE>
<CAPTION>
THREE MONTHS ENDED NINE MONTHS ENDED
SEPTEMBER 30, SEPTEMBER 30,
-------------------- --------------------
1996 1997 1996 1997
---- ---- ---- ----
<S> <C> <C> <C> <C>
Net revenues................................... $ 161,967 $ 169,842 $466,668 $ 484,365
Cost of sales.................................. 110,237 117,447 320,360 332,126
Selling, general and administrative expense.... 14,646 15,871 56,178 46,383
--------- --------- -------- ---------
Operating profit............................... 37,084 36,524 90,130 105,856
Interest expense............................... 5,640 5,711 18,349 16,061
Interest income................................ 486 611 1,758 1,934
Foreign currency transaction (gains) losses.... 26 16 (113) 530
Other (income) expense, net.................... (174) 247 234 51
--------- --------- -------- ---------
Income before income taxes and minority interest 32,078 31,161 73,418 91,148
Minority interest.............................. 8,265 6,459 23,034 18,801
--------- --------- -------- ---------
Income before income taxes .................... 23,813 24,702 50,384 72,347
Income tax provision........................... 9,179 9,600 19,392 28,273
--------- --------- -------- ---------
Net income ........................... $ 14,634 $ 15,102 $ 30,992 $ 44,074
========= ========= ======== =========
Earnings per common and common
equivalent share.............................. $ .63 $ .68 $ 1.44 $ 1.95
========= ========= ======== =========
Dividends declared per share................... $ .05 $ .05 $ .075 $ .15
========= ========= ======== =========
Weighted average common and common
equivalent shares outstanding................. 23,165,745 22,168,222 21,476,637 22,598,255
========== ========== ========== ==========
</TABLE>
See the accompanying notes to the consolidated financial statements.
-1-
<PAGE>
<PAGE>
THE GENERAL CHEMICAL GROUP INC.
CONSOLIDATED BALANCE SHEETS
(IN THOUSANDS, EXCEPT SHARE DATA)
ASSETS
<TABLE>
<CAPTION>
DECEMBER 31, SEPTEMBER 30,
1996 1997
---- ----
(UNAUDITED)
<S> <C> <C>
Current Assets:
Cash and cash equivalents................................... $ 51,700 $ 29,646
Receivables, net............................................ 102,478 121,961
Inventories................................................. 41,429 40,009
Deferred income taxes....................................... 11,264 11,429
Other current assets........................................ 2,153 5,340
---------- ---------
Total current assets.................................... 209,024 208,385
Property, plant and equipment, net............................... 239,819 296,917
Other assets .................................................. 36,294 53,679
---------- ---------
Total assets............................................ $ 485,137 $ 558,981
========== =========
LIABILITIES AND EQUITY (DEFICIT)
Current Liabilities:
Accounts payable............................................ $ 53,772 $ 54,726
Accrued liabilities......................................... 74,205 75,322
Income taxes payable........................................ 5,500 8,260
Current portion of long-term debt........................... 17,392 34,329
---------- ----------
Total current liabilities............................... 150,869 172,637
Long-term debt................................................... 217,217 234,218
Other liabilities................................................ 198,232 211,628
---------- ----------
Total liabilities....................................... 566,318 618,483
---------- ----------
Minority interest................................................ 38,572 45,763
---------- ----------
Equity (deficit):
Preferred Stock, $.01 par value; authorized:
10,000,000 shares; none issued or outstanding.............. -- --
Common Stock, $.01 par value; authorized:
100,000,000 shares, issued 8,009,601
and 12,548,697 shares at December 31, 1996 and
September 30, 1997, respectively........................... 80 125
Class B Convertible Common Stock, $.01 par value;
authorized 40,000,000 shares; issued and outstanding:
14,261,467 and 9,768,421 shares at December 31, 1996 and
September 30, respectively................................. 143 98
Capital deficit............................................. (185,215) (184,124)
Foreign currency translation adjustments.................... (1,435) (1,730)
Retained earnings .......................................... 66,797 107,662
Treasury stock, at cost: 6,325 shares at December 31, 1996
and 1,362,560 shares at September 30, 1997, respectively... (123) (27,296)
---------- ----------
Total equity (deficit).................................. (119,753) (105,265)
---------- ----------
Total liabilities and equity (deficit).................. $ 485,137 $ 558,981
========== ==========
</TABLE>
See the accompanying notes to the consolidated financial statements.
-2-
<PAGE>
<PAGE>
THE GENERAL CHEMICAL GROUP INC.
CONSOLIDATED STATEMENTS OF CASH FLOWS
(IN THOUSANDS)
(UNAUDITED)
<TABLE>
<CAPTION>
NINE MONTHS ENDED
SEPTEMBER 30,
1996 1997
---- ----
<S> <C> <C>
Cash flows from operating activities:
Net income .................................................. $ 30,992 $ 44,074
Adjustments to reconcile net income to net cash
provided by operating activities:
Depreciation and amortization............................... 22,393 24,368
Net loss on disposition of long-term assets................. 379 702
Unrealized exchange loss.................................... 3 753
Restricted unit plan costs.................................. 10,932 994
(Increase) in receivables................................... (18,504) (15,440)
Decrease in inventories..................................... 4,430 3,825
Increase (decrease) in accounts payable..................... 1,536 (1,584)
(Decrease) in accrued liabilities........................... (6,359) (4,220)
Increase in income taxes payable............................ 2,646 2,724
(Increase) decrease in other assets and liabilities, net.... 2,071 1,255
Increase in minority interest............................... 12,238 7,191
--------- ----------
Net cash provided by operating activities................. 62,757 64,642
--------- ----------
Cash flows from investing activities:
Capital expenditures........................................ (35,580) (38,631)
Repayment of related party loans ........................... 14,000 --
Proceeds from sales or disposals of long-term assets....... 312 34
Acquisition of business, net of cash acquired (Note 4)*..... -- (30,131)
--------- ----------
Net cash used for investing activities................... (21,268) (68,728)
--------- ----------
Cash flows from financing activities:
Net proceeds from initial public offering................... 40,600 --
Proceeds from long-term debt................................ 20,000 35,000
Repayment of long-term debt................................. (72,538) (22,251)
Payments to acquire treasury stock.......................... -- (27,174)
Dividends................................................... (556) (3,273)
--------- ----------
Net cash used for financing activities.................... (12,494) (17,698)
--------- ----------
Effect of exchange rate changes on cash.......................... (2) (270)
--------- ----------
Increase (decrease) in cash and cash equivalents................ 28,993 (22,054)
Cash and cash equivalents at beginning of period................. 19,025 51,700
--------- ----------
Cash and cash equivalents at end of period....................... $ 48,018 $ 29,646
========= ==========
Supplemental information:
Cash paid for income taxes.................................. $ 14,729 $ 26,944
========= ==========
Cash paid for interest...................................... $ 18,464 $ 14,204
========= ==========
*Purchase of business, net of cash acquired:
Working capital, other than cash.............................. $ 18,180
Plant, property and equipment................................. (43,350)
Other assets.................................................. (17,538)
Noncurrent liabilities........................................ 12,577
----------
Net cash used to acquire business........................... $ (30,131)
==========
</TABLE>
See the accompanying notes to the consolidated financial statements.
-3-
<PAGE>
<PAGE>
THE GENERAL CHEMICAL GROUP INC.
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE THREE AND NINE MONTHS ENDED SEPTEMBER 30, 1997
(DOLLARS IN THOUSANDS)
(UNAUDITED)
NOTE 1 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
BASIS OF PRESENTATION
The accompanying unaudited consolidated financial statements include the
accounts of The General Chemical Group Inc. and its subsidiaries (the
"Company"). These unaudited financial statements have been prepared by the
Company pursuant to the rules and regulations of the Securities and Exchange
Commission. The financial statements do not include certain information and
footnotes required by generally accepted accounting principles. In the opinion
of management, all adjustments (consisting of normal recurring adjustments)
considered necessary for a fair presentation have been included. Operating
results for the nine months ended September 30, 1997 are not necessarily
indicative of the results that may be expected for the year ending December 31,
1997. The Company's financial statements should be read in conjunction with the
financial statements and the notes thereto included in the Company's Annual
Report on Form 10-K for the year ended December 31, 1996.
The Financial Accounting Standards Board issued Statement of Accounting
Standards No. 128, "Earnings Per Share" ("FAS 128"). The Company is required to
adopt FAS 128 for both interim and annual periods ending after December 15,
1997. FAS 128 requires the Company to present Basic Earnings Per Share which
excludes dilution and Diluted Earnings Per Share which includes potential
dilution. The Company believes that the adoption of FAS 128 will not have a
material effect on the Company's earnings per share calculations.
NOTE 2 - RELATED PARTY TRANSACTIONS
Management Agreement
The Company is party to a Management Agreement with Latona Associates
Inc. (a management and advisory company which is controlled by a stockholder of
the Company). Pursuant to the agreement, the Company was charged $4,217 and
$4,379 for the nine months ended September 30, 1996 and 1997, respectively, for
corporate supervisory and administrative services and strategic advice and
guidance. The Management Agreement expires on December 31, 2004.
NOTE 3 - ADDITIONAL FINANCIAL INFORMATION
The components of inventories were as follows:
<TABLE>
<CAPTION>
DECEMBER 31, SEPTEMBER 30,
1996 1997
---- ----
(unaudited)
<S> <C> <C>
Raw materials....................................... $ 11,022 $ 9,713
Work in process..................................... 4,900 4,440
Finished products................................... 17,403 16,698
Supplies and containers............................ 8,104 9,158
-------- ---------
$ 41,429 $ 40,009
======== =========
</TABLE>
-4-
<PAGE>
<PAGE>
THE GENERAL CHEMICAL GROUP INC.
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS - (CONTINUED)
FOR THE THREE AND NINE MONTHS ENDED SEPTEMBER 30, 1997
(DOLLARS IN THOUSANDS)
(UNAUDITED)
NOTE 4 - ACQUISITIONS
On July 1, 1997 the Company's wholly owned subsidiary, General
Chemical Corporation ("GCC"), acquired all of the outstanding stock of Peridot
Holdings, Inc. ("Peridot"), a leading manufacturer and supplier of sulfuric acid
and water treatment chemicals. Funding for this transaction was provided with
existing cash and borrowings on GCC's revolving credit facility. The acquisition
was accounted for under the purchase method and accordingly, the net assets and
results of operations have been included in the consolidated financial
statements since the date of acquisition, based on preliminary valuation
information availabe to the Company, which is subject to change as such
information is finalized. The excess of purchase price over the estimated fair
values of the net tangible assets acquired has been treated as goodwill.
Goodwill will be amortized on a straight line basis over a period of 30 years.
The acquisition did not have a material pro forma impact on consolidated
earnings or consolidated earnings per share.
NOTE 5 - LONG TERM DEBT
Long-term debt consists of the following:
<TABLE>
<CAPTION>
MATURITIES DECEMBER 31, SEPTEMBER 30,
---------- ------------ -------------
1996 1997
---- ----
(UNAUDITED)
<S> <C> <C> <C>
Bank Term Loan - floating rate............. 1997-2001 $ 82,609 $ 69,565
Senior Subordinated Notes - 9.25%.......... 2003 100,000 100,000
Canada Senior Notes - 9.09%................ 1999 52,000 52,045
$130,000 U.S. Revolving Credit Facility
floating rate............................. 1999 -- 30,000
Construction Loan.......................... 1998 -- 13,937
Other...................................... 1997 -- 3,000
---------- ----------
Total Debt................................. 234,609 268,547
Less: Current Portion..................... 17,392 34,329
---------- ----------
Net Long-Term Debt......................... $ 217,217 $ 234,218
========= =========
</TABLE>
Aggregate maturities of long-term debt at December 31, 1996 for each of
the years in the five year period ending December 31, 2001 are $17,392, $17,392,
$69,392, $17,392 and $13,041, respectively.
In November, 1996, Peridot entered into a Loan and Security Agreement
(the "Loan") which was primarily used to finance the construction of a new
sulfuric acid plant. As of September 30, 1997, the outstanding balance of the
loan was $13,937. If the loan is not repaid at commercial start-up of the new
plant (as defined), it is converted to a term loan. The Company plans to repay
the loan during the fourth quarter of 1997. The Loan bears interest at a rate
generally equal to the London interbank market for dollar deposits plus 5.25
percent.
-5-
<PAGE>
<PAGE>
THE GENERAL CHEMICAL GROUP INC.
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS - (CONTINUED)
FOR THE THREE AND NINE MONTHS ENDED SEPTEMBER 30, 1997
(DOLLARS IN THOUSANDS)
(UNAUDITED)
NOTE 6 - DIVIDENDS
On September 17, 1997, the Company's Board of Directors declared a
quarterly cash dividend of $.05 per share, payable October 15, 1997, to
shareholders of record on October 1, 1997.
NOTE 7- COMMITMENTS AND CONTINGENCIES
Richmond Works July 26, 1993 Incident. On July 26,1993 a pressure relief
device on a railroad tank car containing oleum that was being unloaded at the
Company's Richmond, California, facility ruptured during the unloading process,
causing the release of a significant amount of sulfur trioxide. Approximately
150 lawsuits seeking substantial amounts of damages were filed against the
Company on behalf of in excess of 60,000 claimants in municipal and superior
courts of California (Contra Costa and San Francisco Counties) and in federal
court (United States District Court for the Northern District of California).
All state court cases were coordinated before a coordination trial judge (In Re
GCC Richmond Works Cases, JCCP No. 2906) and the federal court cases were stayed
until completion of the state court cases.
After several months of negotiation under the supervision of a settlement
master, the Company and a court-approved plaintiffs' management committee
executed a comprehensive settlement agreement which resolved the claims of
approximately 95 percent of the claimants who filed lawsuits arising out of the
July 26th incident, including the federal court cases. After a final settlement
approval hearing on October 27, 1995, the coordination trial judge approved the
settlement on November 22, 1995. Pursuant to the terms of the settlement
agreement, the Company, with funds to be provided by its insurers pursuant to
the terms of its insurance policies, has agreed to make available a maximum of
$180,000 to implement the settlement. In addition, the settlement agreement
provides, among other things, that while claimants may "opt out" of the
compensatory damages portion of the settlement and pursue their own cases
separate and apart from the class settlement mechanism, they have no right to
opt out of the punitive damages portion of the settlement. Consequently, under
the terms of the settlement, no party may seek punitive damages from the Company
outside of those provided by the settlement.
Notices of appeal of all or portions of the settlement approved by the
court were filed by five law firms representing approximately 2,800 claimants,
with approximately 2,600 of these claimants represented by the same law firm.
Virtually all of these claimants have not specified the amount of their claims
in court documents, although the Company believes that their alleged injuries
are no different in nature or extent than those alleged by the settling
claimants. On May 8, 1996, the California Court of Appeals dismissed each of the
appeals that had been filed challenging the trial court's approval of the class
action settlement. The Court of Appeals dismissed the appeal relating to the
trial court's rulings on plaintiffs' attorney's fees on the ground that the
appealing attorneys lacked standing to appeal. The Court of Appeals also
dismissed each of the other pending appeals, ruling that the trial court's
orders and rulings approving the settlement were not presently appealable, if at
all, by the appealing claimants since they had all elected to opt out of the
settlement. The appealing attorneys and some of the appealing claimants then
filed a petition for review with the California Supreme Court which, on August
15, 1996, elected not to review the Court of Appeals' decision.
On March 11, 1997, the coordination judge dismissed the claims of 1,269
of the approximately 2,750 opt-out claimants, primarily on the grounds that they
had failed to comply with previous pre-trial
-6-
<PAGE>
<PAGE>
THE GENERAL CHEMICAL GROUP INC.
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS - (CONCLUDED)
FOR THE THREE AND NINE MONTHS ENDED SEPTEMBER 30, 1997
(DOLLARS IN THOUSANDS)
(UNAUDITED)
orders. On April 18, 1997, the California Court of Appeals denied a petition for
review of the dismissals filed by attorneys for the dismissed opt-out claimants,
and on June 8, 1997, the California Supreme Court denied the same attorneys'
petition for review of the California Court of Appeals' denial of their prior
petition.
It is possible that one or more of the appealing claimants, once their
opt-out cases are finally litigated through trial, may attempt to refile all or
a portion of the appeals that were dismissed by the Court of Appeals. While
there can be no assurances regarding how an appellate court might rule in the
event of such a refiling, the Company believes that the settlement will be
upheld on appeal. If the settlement is upheld on appeal, the Company believes
that any further liability in excess of the amounts made available under the
settlement agreement will not exceed the available insurance coverage, if at
all, by an amount that could be material to its financial condition or results
of operations. In the event of a reversal or modification of the settlement on
appeal, with respect to lawsuits by any then remaining claimants (opt-outs and
settling claimants who have not signed releases) the Company believes that,
whether or not it elects to terminate the settlement in the event it is reversed
or modified on appeal, it will have adequate resources from its available
insurance coverage to vigorously defend these lawsuits through their ultimate
conclusion, whether by trial or settlement. However, in the event the settlement
is overturned or modified on appeal, there can be no assurance that the
Company's ultimate liability resulting from the July 26, 1993 incident would not
exceed the available insurance coverage by an amount which could be material to
its financial condition or results of operations, nor is the Company able to
estimate or predict a range of what such ultimate liability might be, if any.
The Company has insurance coverage relating to this incident which totals
$200,000. The first two layers of coverage total $25,000 with a sublimit of
$12,000 applicable to the July 26, 1993 incident, and the Company also has
excess insurance policies of $175,000 over the first two layers. The Company
reached an agreement with the carrier for the first two layers whereby the
carrier paid the Company $16,000 in settlement of all claims the Company had
against that carrier. In the third quarter of 1994, the Company recorded a
$9,000 charge to earnings for costs which the Company incurred related to this
matter. The Company's excess insurance policies, which are written by two
Bermuda-based insurers, provide coverage for compensatory as well as punitive
damages. Both insurers have executed agreements with the Company confirming
their respective commitments to fund the settlement as required by their
insurance policies with the Company and as described in the settlement
agreement. In addition, these same insurers currently continue to provide
substantially the same insurance coverage to the Company.
-7-
<PAGE>
<PAGE>
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS.
September 30, 1997 Compared with December 31, 1996
Financial Condition
Cash and cash equivalents were $29.6 million at September 30, 1997 as
compared with $51.7 million at December 31, 1996. During the first nine months
of 1997 the Company generated cash flow from operating activities of $64.7
million and received $12.7 million of net proceeds from long-term debt, used
cash of $38.6 million for capital expenditures, $27.2 million for the
acquisition of treasury stock and $30.1 million for the acquisition of a
business.
The Company had working capital of $35.7 million at September 30, 1997
as compared with $58.2 million at December 31, 1996. This decrease in working
capital primarily reflects higher current portion of long-term debt coupled with
lower cash balances offset by higher accounts receivable.
Results of Operations
Net revenues for the three and nine month periods ended September 30,
1997 increased 5 percent and 4 percent to $169.8 million and $484.4 million,
respectively, from $162.0 million and $466.7 million for the comparable periods
in 1996. These increases are due to higher sales in the Manufacturing Segment
reflecting higher volumes and higher Chemical Segment sales due primarily to
sales of Peridot Holdings, Inc. which was acquired on July 1, 1997 offset by
weaker pricing of soda ash.
Gross profit for the three and nine month periods ended September 30,
1997 increased 1 percent and 4 percent to $52.4 million and $152.2 million,
respectively, from $51.7 million and $146.3 million for the comparable prior
year periods, reflecting the aforementioned sales changes.
Gross profit as a percentage of sales was 32 percent and 31 percent for
the three month periods ended September 30, 1996 and 1997, respectively. This
decrease is primarily due to the weaker pricing of soda ash. Gross profit as a
percentage of sales was 31 percent for the nine month periods ended September
30, 1996 and 1997.
Selling, general and administrative expense as a percentage of net
revenues was 9 percent and 10 percent for the three and nine month periods ended
September 30, 1997, respectively, versus 9 percent and 12 percent for the
comparable prior year periods. This decrease from prior year to date is
primarily due to a one-time charge recorded in 1996 primarily related to a new
Restricted Unit Plan created by the Company which replaced certain prior equity
programs.
Interest expense for the three month periods ended September 30, 1997 and
1996 was $5.7 million. Interest expense for the nine month period ended
September 30, 1997 was $16.1 million, which was $2.3 million lower than the
comparable prior year level as a result of lower outstanding debt balances for
the majority of 1997.
Interest income for the three and nine month periods ended September 30,
1997 was $.6 million and $1.9 million, respectively, which approximated the
prior year levels.
-8-
<PAGE>
<PAGE>
The foreign currency transaction loss for the three month periods ended
September 30, 1996 and 1997 was $.03 million and $.02 million, respectively. The
foreign currency transaction (gain)/loss for the nine month periods ended
September 30, 1996 and 1997 were $(.1) million and $.5 million, respectively.
These amounts are principally due to the impact of exchange rate fluctuations on
a U.S. dollar denominated loan of the Company's Canadian subsidiary. The impact
of these foreign currency transaction gains on this loan is noncash.
Minority interest for the three and nine month periods ended September
30, 1997 was $6.5 million and $18.8 million, respectively, versus $8.3 million
and $23.0 million for the comparable periods in 1996. The decrease in both
periods reflect lower earnings of General Chemical (Soda Ash) Partners.
Net income was $15.1 million and $44.1 million for the three and nine
month periods ended September 30, 1997, respectively, versus $14.6 million and
$31.0 million for the comparable periods in 1996, for the foregoing reasons.
-9-
<PAGE>
<PAGE>
PART II. OTHER INFORMATION
ITEM 1. LEGAL PROCEEDINGS
The following developments have occurred with respect to this matter
since the filing of the Company's Quarterly Report on Form 10-Q for the period
ended June 30, 1997:
On June 6, 1997, General Chemical Canada Ltd. ("GCCL"), a wholly owned
subsidiary of the Company, received a summons issued by the Ministry of the
Environment and Energy alleging that a release of ammoniated material into the
Detroit River from GCCL's Amherstburg, Ontario facility on August 22, 1995,
violated certain provisions of the Environmental Protection Act and Ontario
Water Resources Act. On October 20, 1997, GCCL entered into a settlement,
approved by the Ontario Court (Provincial Division), Provincial Offences Court,
Central Region, whereby GCCL agreed to perform certain environmental projects at
the Amherstburg facility and, to the extent the projects are completed within
one year from the settlement, pay a penalty of CDN $90,000. In the event the
projects are not completed within one year, the penalty would increase to CDN
$150,000. GCCL intends and expects to complete the projects within the one-year
time frame.
-10-
<PAGE>
<PAGE>
ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K
a) Exhibits:
(11) Computation of Earnings per Common and Common Equivalent Share.
(27) Financial Data Schedule
b) No report on Form 8-K has been filed by the Company during the period
covered by this report.
-11-
<PAGE>
<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.
THE GENERAL CHEMICAL GROUP INC.
-------------------------------
(Registrant)
Date October 29, 1997 /s/Richard R. Russell
--------------- --------------------------------------------------
RICHARD R. RUSSELL
President and Chief Executive
Officer (Principal Executive Officer) and Director
Date October 29, 1997 /s/Ralph M. Passino
--------------- ---------------------------------------------------
RALPH M. PASSINO
Vice President and Chief Financial Officer
(Principal Financial and Accounting Officer)
-12-
<PAGE>
<PAGE>
EXHIBIT INDEX
EXHIBIT NO. DESCRIPTION PAGE
- ---------- ----------- ----
11 Computation of Net Earnings per Common and 14
Common Equivalent shares for the three and nine
months ended September 30, 1996 and 1997
27 Financial Date Schedule (EDGAR filings only) 15
-13-
<PAGE>
<PAGE>
<PAGE>
EXHIBIT 11
THE GENERAL CHEMICAL GROUP INC.
COMPUTATION OF EARNINGS PER COMMON AND COMMON EQUIVALENT SHARE
(IN THOUSANDS, EXCEPT PER SHARE AMOUNT)
(UNAUDITED)
Earnings per share were calculated as follows:
<TABLE>
<CAPTION>
THREE MONTHS ENDED NINE MONTHS ENDED
SEPTEMBER 30, SEPTEMBER 30,
------------------- ----------------
1996 1997 1996 1997
---- ---- ---- ----
<S> <C> <C> <C> <C>
Primary
Total income used for primary
earnings per share........................... $ 14,634 $ 15,102 $ 30,992 $ 44,074
======== ======== ======== ========
Weighted average common shares
outstanding.................................. 22,237 20,955 20,996 21,511
Weighted average common
equivalent shares............................ 929 1,213 480 1,087
-------- -------- -------- --------
Weighted average common and
common equivalent share...................... 23,166 22,168 21,476 22,598
======== ======== ======== ========
Primary earnings per common share
and common equivalent shares................. $ .63 $ .68 $ 1.44 $ 1.95
======== ======== ======== ========
Fully Diluted
Total income used for primary
earnings per share........................... $ 14,634 $ 15,102 $ 30,992 $ 44,074
======== ======== ======== ========
Weighted average common shares
outstanding.................................. 22,237 20,955 20,996 21,511
Weighted average common
equivalent shares............................ 1,009 1,287 572 1,287
-------- -------- -------- --------
Weighted average common and
common equivalent shares..................... 23,246 22,242 22,568 22,798
======== ======== ======== ========
Primary earnings per common share
and common equivalent shares................. $ .63 $ .68 $ 1.44 $ 1.93
======== ======== ======== ========
</TABLE>
-14-
<PAGE>
<PAGE>
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND> This schedule contains summary financial
information extracted from Form 10-Q for
the period ended September 30, 1997 and is
qualified in its entirety by reference to
such financial statements.
</LEGEND>
<MULTIPLIER> 1,000
<S> <C>
<PERIOD-TYPE> 9-MOS
<FISCAL-YEAR-END> DEC-31-1997
<PERIOD-START> JAN-01-1997
<PERIOD-END> SEP-30-1997
<CASH> $29,646
<SECURITIES> 0
<RECEIVABLES> 126,859
<ALLOWANCES> 4,898
<INVENTORY> 40,009
<CURRENT-ASSETS> 208,385
<PP&E> 491,201
<DEPRECIATION> 194,284
<TOTAL-ASSETS> 558,981
<CURRENT-LIABILITIES> 172,637
<BONDS> 234,218
0
0
<COMMON> 223
<OTHER-SE> (105,489)
<TOTAL-LIABILITY-AND-EQUITY> 558,981
<SALES> 484,365
<TOTAL-REVENUES> 484,365
<CGS> 332,126
<TOTAL-COSTS> 332,126
<OTHER-EXPENSES> 0
<LOSS-PROVISION> 11
<INTEREST-EXPENSE> 16,061
<INCOME-PRETAX> 72,347
<INCOME-TAX> 28,273
<INCOME-CONTINUING> 44,074
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 44,074
<EPS-PRIMARY> 1.95
<EPS-DILUTED> 1.93
</TABLE>
