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SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
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FORM 8-K
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CURRENT REPORT PURSUANT TO SECTION 13 OR 15(D) OF THE
SECURITIES EXCHANGE ACT OF 1934
Date of Report (Date of earliest event reported): March 31, 1999
SIMCALA, INC.
(Exact name of registrant as specified in charter)
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DELAWARE 333-53791 34-1780941
(State or other (Commission file number) (I.R.S. Employer
jurisdiction of incorporation) Identification No.)
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OHIO FERRO ALLOYS ROAD
MT. MEIGS, ALABAMA 36057
(Address of principal executive offices)
(334) 215-7560
(Registrant's telephone number, including area code)
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ITEM 5. OTHER EVENTS.
On March 31, 1999, SIMCALA, Inc. (the "Company") issued a press release
announcing the release of its 1998 financial results. The press release issued
in connection therewith is filed herewith as Exhibit 99.1.
ITEM 7. FINANCIAL STATEMENTS, PRO FORMA FINANCIAL INFORMATION AND EXHIBITS.
(a) Exhibits
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Exhibit No. Description
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99.1 Press Release of the Company dated March 31, 1999
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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 hereunto duly authorized.
SIMCALA, INC.
Date: April 6, 1999 By: /s/ R. Myles Cowan
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R. Myles Cowan
Vice President of Finance
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INDEX TO EXHIBITS
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Exhibit
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99.1 Press Release of the Company dated March 31, 1999
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EXHIBIT 99.1
SIMCALA RELEASES 1998 FINANCIAL STATEMENT
(Mt. Meigs, Alabama - March 31, 1999) -- Simcala, Inc., today reported a net
loss for the three months ended December 31, 1998 of $600,000. This compares
with net income of $2.2 million for the same period last year. For the full year
ended December 31, 1998, the company reported a net loss of $2.8 million,
compared to a net income of $6.4 million for the year ended December 31, 1997.
Cravey, Green & Wahlen, an Atlanta-based investment partnership, acquired
Simcala on March 31, 1998.
The company attributed its results to declines in silicon metal prices and lower
production volumes coupled with higher acquisition related non-cash charges for
depreciation and amortization and higher interest expense. "The crisis in Asia
had a far greater impact on our markets in 1998 than anticipated," said Ed
Boardwine, President and CEO of Simcala. "Not only did prices reduce
substantially in the volatile secondary aluminum market, but prices were softer
in the more stable primary aluminum market as well. The softness in this market
can be attributed to non-traditional importers, such as South Africa and
Australia, competing in the U.S. for volume in order to capitalize on their home
country currency devaluation." Mr. Boardwine also said that overall silicon
metal market fundamentals are still good, although this short-term market
disruption is painful to manufacturers.
The company also encountered production problems during 1998. "Our fourth
quarter results improved significantly from the results for the third quarter,"
said Mr. Boardwine. "Our ability to resolve the production problems we
experienced in the third quarter was critical to this improvement." According to
Mr. Boardwine, Simcala's continued focus on cost control added to the improved
financial results in the fourth quarter. "We will continue our operating
programs aimed at increasing our volume. We want to avoid a repeat of the
production problems so that we achieve maximum volume output in 1999 since we
continue to be in a position to sell everything we produce," he said.
Net income for Simcala was also impacted by higher levels of interest expense,
depreciation and amortization. These increased expenses stemmed from higher debt
levels associated with the acquisition together with restatement of certain
assets on the company's balance sheet, also associated with the acquisition.
Simcala is one of the world's largest and lowest cost producers of silicon
metal. It is owned by Atlanta-based Cravey, Green & Wahlen, one of the oldest
and most successful private equity firms specializing in acquisitions in the
Southeastern United States. CGW acquired Simcala through CGW Southeast Partners
III, L.P. investment fund which was formed to make equity and equity-related
investments in acquisitions of middle-market businesses primarily in the
Southeast.
Certain statements in this press release, particularly regarding anticipated
future financial performance, business prospects, capital expenditures, growth
and operating strategies, and similar matters, and statements preceded by,
followed by or that otherwise include the words "may," "would," "could," "will,"
"believes," "expects," "anticipates," "plans," "intends,"
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"estimates," or similar expressions constitute forward-looking statements.
Forward-looking statements are subject to a number of risks and uncertainties.
The following important facts may affect the future results of the Company and
could cause actual results to differ materially from those expressed in the
forward-looking statements: the Company's significant leverage and debt service
requirements; restrictive covenants in the Company's debt agreements; the loss
of business from a key customer; the Company's dependence on its supply of
electrical power; increasing levels of competition in the Company's industry;
the maintenance of effective silicon metal anti-dumping legislation; changes in
the demand for, and the pricing of, silicon metal; the Company's retention of
key personnel; changes in the price of silicon metal; the inability of the
Company, or its major customers or suppliers, to resolve the Year-2000 issue in
a manner that does not have a material adverse effect on the business,
operations or revenues of the Company; changes in accounting policies and
practices; and other risks identified from time to time in the Company's SEC
reports.
