<PAGE> 1
===============================================================================
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
---------
FORM 10-Q
---------
(MARK ONE)
[X] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934 FOR THE QUARTERLY PERIOD ENDED
MARCH 31, 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: 333-53791
SIMCALA, INC.
(Exact name of registrant as specified in its charter)
DELAWARE 34-1780941
(State of incorporation) (I.R.S. Employer Identification No.)
OHIO FERRO ALLOYS ROAD
MT. MEIGS, ALABAMA 36057
(Address of principal executive offices)
(334) 215-7560
(Registrant's telephone number)
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 the registrant's Common Stock outstanding as of May
6, 1999 was 10,889.
================================================================================
1
<PAGE> 2
PART I. FINANCIAL INFORMATION*
* As used in this Form 10-Q, unless the context otherwise requires, "SAC"
refers to SAC Acquisition Corp., "Predecessor" refers to SIMCALA, Inc. in
respect of periods prior to the Acquisition (as defined herein), and the
"Company" refers to the registrant, SIMCALA, Inc.
2
<PAGE> 3
ITEM 1. FINANCIAL STATEMENTS
SIMCALA, INC.
CONDENSED BALANCE SHEETS
<TABLE>
<CAPTION>
March 31, December 31,
ASSETS 1999 1998
------------- -------------
(unaudited)
<S> <C> <C>
Current Assets
Cash and cash equivalents $ 10,898,423 $ 14,652,789
Restricted Cash 6,147,946 -
Accounts receivable 6,793,676 6,126,286
Inventories 1,903,237 3,416,277
Other current assets 659,305 272,113
------------- -------------
Total current assets $ 26,402,587 24,467,465
Property, Plant and Equipment, net of accumulated
depreciation of $4,038,121 and $2,974,138, at
March 31, 1999 and December 31, 1998, respectively 52,171,714 52,805,557
Intangible Assets, net of accumulated amortization of
$2,044,082 and $1,533,862, at March 31, 1999
and December 31, 1998, respectively 37,742,381 38,252,601
------------- -------------
Total Assets $ 116,316,682 $ 115,525,623
============= =============
LIABILITIES AND SHAREHOLDER'S EQUITY
Current Liabilities
Accounts payable $ 3,269,358 $ 3,330,469
Accrued expenses 1,031,839 1,048,578
Accrued interest payable 3,402,685 1,638,560
Current maturities of long-term debt and capital leases 56,967 72,747
------------- -------------
Total current liabilities 7,760,849 6,090,354
Long Term Debt and Capital Leases - Net of Current Portion 81,026,558 81,034,098
Deferred Income Taxes 11,693,605 11,816,575
------------- -------------
Total Liabilities 100,481,012 98,941,027
------------- -------------
Shareholder's Equity
Preferred Stock (Series B preferred stock, 3,000 shares authorized,
none issued and outstanding, $1.00 par value) - -
Common stock, 20,000 shares authorized - 10,889 shares
issued and outstanding, par value $.01 per share 109 109
Additional paid-in capital 18,806,891 18,806,891
Retained deficit (2,971,330) (2,222,404)
------------- -------------
Total shareholder's equity 15,835,670 16,584,596
------------- -------------
Total Liabilities and Shareholder's Equity $ 116,316,682 $ 115,525,623
============= =============
</TABLE>
See Notes to Condensed Financial Statements.
3
<PAGE> 4
SIMCALA, INC.
CONDENSED STATEMENTS OF INCOME
On March 31, 1998, SAC Acquisition Corp. acquired all of the outstanding capital
stock of the Company and on such date SAC merged into the Company. The purchase
method of accounting was used to record assets acquired and liabilities assumed.
As a result of purchase accounting, the accompanying statements of income and
cash flows of the Company and the Predecessor are not comparable in all material
respects since the financial statements report financial position, results of
operations, and cash flows of these two separate entities.
<TABLE>
<CAPTION>
Company Predecessor
Three months ended Three months ended
March 31, 1999 March 31, 1998
(unaudited)
------------------- -------------------
<S> <C> <C>
Net Sales $14,911,132 $14,853,920
Cost of Goods Sold 13,352,675 11,678,879
----------- -----------
Gross Profit 1,558,457 3,175,041
Selling and Administrative Expenses 687,716 3,824,493
----------- -----------
Operating (Loss) Income 870,741 (649,452)
Interest Expense 1,937,838 313,946
Other Income, Net (195,202) (282,272)
----------- -----------
Loss before Income Taxes (871,895) (681,126)
Income Tax Benefit (122,970) (100,198)
----------- -----------
Net Loss $ (748,925) $ (580,928)
=========== ===========
</TABLE>
See Notes to Condensed Financial Statements.
4
<PAGE> 5
SIMCALA, INC.
CONDENSED STATEMENTS OF CASH FLOW
On March 31, 1998, SAC Acquisition Corp. acquired all of the outstanding
capital stock of the Company and on such date SAC merged into the Company. The
purchase method of accounting was used to record assets acquired and liabilities
assumed. As a result of purchase accounting, the accompanying statements of
income and cash flows of the Company and the Predecessor are not comparable in
all material respects since the financial statements report financial position,
results of operations, and cash flows of these two separate entities.
<TABLE>
<CAPTION>
Company Predecessor
Three Months Ended Three Months Ended
March 31, 1999 March 31, 1998
Cash Flows from Operating Activities: (unaudited)
------------------ ------------------
<S> <C> <C>
Net loss $ (748,925) $ (580,928)
Adjustments to reconcile net loss to net cash
provided by operating activities:
Depreciation and amortization 1,662,596 470,903
Deferred income taxes (122,970) 800,000
Noncash stock option compensation - 903,680
Change in certain assets and liabilities:
(Increase) decrease in accounts receivable (667,390) 20,824
Increase in other receivables - (2,806,751)
(Increase) decrease in inventories 1,513,040 (206,968)
Decrease (increase) in other assets (387,192) 202,831
Increase in accounts payable and accrued expenses 1,582,102 2,364,754
------------ -----------
Net cash provided by operating activities 2,831,261 1,168,345
------------ -----------
Cash Flows from Investing Activities - Purchase of property, plant and equipment (430,140) (1,184,422)
Cash Flows from Financing Activities ------------ -----------
Payments on non-interest-bearing debt (7,541) -
Net borrowings of long-term debt - 39,085
------------ -----------
Net cash provided by (used in) financing activities (7,541) 39,085
Change in Cash and Cash Equivalents and Restricted Cash 2,393,580 23,008
Cash and Equivalents at Beginning of Period 14,652,789 634,877
------------ -----------
Cash and Equivalents and Restricted Cash at End of Period $ 17,046,369 $ 657,885
============ ===========
SUPPLEMENTAL DISCLOSURES OF CASH FLOW INFORMATION:
Cash paid for:
Interest $ 184,405 $ 161,000
============ ===========
Income taxes $ 112,000
===========
</TABLE>
See Notes to Condensed Financial Statements.
5
<PAGE> 6
SIMCALA, INC.
NOTES TO CONDENSED FINANCIAL STATEMENTS
(UNAUDITED)
NOTE 1 - ORGANIZATION AND OPERATIONS
On March 31, 1998, SIMCALA Holdings, Inc. ("Holdings"), through its wholly owned
subsidiary, SAC Acquisition Corp. ("SAC") purchased all of the outstanding
common stock of SIMCALA, Inc. ("SIMCALA" or the "Company") (the "Acquisition").
On such date, SAC was merged into SIMCALA. Holdings and SAC conducted no
significant business other than in connection with the Acquisition. The term
"Predecessor" refers to the Company prior to the Acquisition.
The Company is a producer of silicon metal for sale to the aluminum and
silicones industries. The Company sells to customers in the metal industry who
are located primarily throughout the United States. Credit is extended based on
an evaluation of the customer's financial condition. During the three months
ended March 31, 1999 and the three months ended March 31, 1998, three customers
accounted for 37%, 31%, and 10% and 40%, 21%, and 10% of net sales,
respectively. At March 31, 1999 and December 31, 1998, three customers accounted
for 41%, 14%, and 8% and 54%, 10% and 8%, respectively, of outstanding
receivables. The Company maintains credit insurance for all customer accounts
receivable.
The Acquisition of the Predecessor for approximately $65.3 million in cash,
including $6.1 million in expenses directly related to the Acquisition and
assumption of approximately $22 million in liabilities, has been accounted for
as a purchase. The Acquisition was financed through the issuance of Senior Notes
in the amount of $75 million and equity contributed of $22 million. The uses of
cash associated with the Acquisition were as follows (in thousands of dollars):
<TABLE>
<S> <C>
The Acquisition $ 65,291
Repayment of indebtedness 9,159
Transaction fees and expenses 6,051
General corporate purposes 16,499
--------
$ 97,000
========
</TABLE>
Accordingly, the purchase price has been allocated to the identifiable assets
and liabilities based on fair values at the acquisition date. The excess of the
purchase price over the fair value of the identifiable net assets in the amount
of $34.5 million has been classified as goodwill. Additionally, the effect of
the carryover basis of senior management of $3.2 million has been considered in
the allocation of the purchase price. The carryover basis adjustment results
from the application of Emerging Issues Task Force ("EITF") Consensus No. 88-16,
Basis in Leveraged Buyout Transactions, and is allocated to property, plant, and
equipment and goodwill based upon the March 31, 1998 balances.
The Acquisition was financed through the issuance of senior notes in the amount
of $75,000,000 and equity contributed of $22,000,000. Senior Management had an
8% ownership interest in the Predecessor, and as a result of the Acquisition,
has a 9% ownership interest in the Company. The sale of the Predecessor's stock
of which 92% was not owned by Senior Management, constitutes a change in control
of the Company.
The condensed financial statements included herein for the periods prior to
March 31, 1998, represent the Predecessor's results of operations and cash flows
prior to the Acquisition and consequently, are stated on the Predecessor's
historical cost basis. The financial statements as of December 31, 1998 and
March 31, 1999, and for the three months ended March 31, 1999, reflect the
adjustments which were made to record the Acquisition. Accordingly, the
financial statements of the Predecessor for the periods prior to March 31, 1998
are not comparable in all material respects with the financial statements
subsequent to the Acquisition. The most significant differences relate to
amounts recorded for property, plant and equipment, goodwill, and debt which
6
<PAGE> 7
resulted in increased cost of sales, amortization, depreciation and interest
expense in the three months ended March 31, 1999.
NOTE 2 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
For a summary of the Company's and the Predecessor's accounting policies, please
refer to the Company's 1998 Annual Report on Form 10-K.
Restricted Cash - In January 1999, the Company entered into an amendment to the
Credit Agreement whereby the Company was required to provide cash collateral of
$6,147,946 for the letter of credit backing the industrial revenue bonds. This
cash, plus interest accrued thereon, is reflected as restricted cash on the
Company's condensed balance sheet as of March 31, 1999.
NOTE 3 - INVENTORIES
As of March 31, 1999 and December 31, 1998, inventories consisted of the
following:
<TABLE>
<CAPTION>
March 31 December 31,
1999 1998
(unaudited)
------------ ------------
<S> <C> <C>
Raw Materials $ 940,891 $ 908,839
Finished Goods 666,345 2,211,438
Supplies 296,000 296,000
------------ ------------
$ 1,903,236 $ 3,416,277
============ ============
</TABLE>
NOTE 4 - PRO FORMA DATA
The following unaudited pro forma financial data has been prepared assuming that
the Acquisition was consummated on January 1, 1997. This pro forma financial
data is presented for informational purposes and is not necessarily indicative
of the operating results that would have occurred had the Acquisition been
consummated on January 1, 1997, nor is it necessarily indicative of future
operations.
<TABLE>
<CAPTION>
Three Months
Ended
March 31, 1998
--------------
<S> <C>
Net Sales $14,854,000
Net Loss $(2,377,000)
</TABLE>
7
<PAGE> 8
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
RESULTS OF OPERATIONS.
General
On March 31, 1998, Holdings, through its wholly owned subsidiary, SAC, purchased
all of the outstanding shares of common stock of SIMCALA. On such date, SAC was
merged into SIMCALA. SIMCALA, as the surviving corporation in the Merger, became
a wholly owned subsidiary of Holdings.
The following is a discussion of the Company's results of operations. The
discussion is based upon the three-month period ended March 31, 1999 in
comparison to the three-month period ended March 31, 1998. The financial
statements included herein for the periods prior to March 31, 1998, represent
the Predecessor's results of operations and cash flows prior to the Acquisition
and consequently, are stated on the Predecessor's historical cost basis. The
financial statements as of March 31, 1999, and for the three months then ended,
reflect the adjustments which were made to record the Acquisition. Accordingly,
the financial statements of the Predecessor for the periods prior to March 31,
1998 are not comparable in all material respects with the financial statements
subsequent to the Acquisition. The most significant differences relate to
amounts recorded for property, plant and equipment, goodwill, and debt which
resulted in increased cost of sales, amortization, depreciation and interest
expense in the three months ended March 31, 1999 and will result in such
increases in future years.
The table below sets forth certain statement of operations information as a
percentage of net sales during the quarters ended March 31, 1999 and 1998:
<TABLE>
<CAPTION>
Company Predecessor
Three months ended Three months ended
March 31, March 31,
1999 1998
------------------ ------------------
<S> <C> <C>
Net sales 100.0% 100.0%
Cost of goods sold 89.5 78.6
----- -----
Gross profit 10.5 21.4
Selling and administrative expenses 4.6 25.7
----- -----
Operating income (loss) 5.9 (4.3)
Interest expense 13.0 2.1
Other income, net (1.3) (1.9)
----- -----
Loss before income taxes (5.8) (4.5)
Income tax benefit (0.8) (0.7)
----- -----
Net loss (5.0)% (3.8)%
===== =====
</TABLE>
THREE MONTHS ENDED MARCH 31, 1999 COMPARED TO PREDECESSOR THREE MONTHS ENDED
MARCH 31, 1998
NET SALES
Net sales increased by $0.1 million in the three months ended March 31, 1999, or
0.4%, to $14.9 million from $14.8 million for the same period in 1998. This
increase was due principally to increased sales volume in the first quarter of
1999 as the Company substantially reduced finished goods inventory. This volume
increase was offset however, by a reduction in average selling prices for all
grades of silicon metal. Production of silicon metal in the first quarter of
1999 was 9,170 metric tons, compared with 9,110 metric tons produced in the
first quarter of 1998.
8
<PAGE> 9
GROSS PROFIT
Gross profit decreased by $1.6 million, or 50.9%, to $1.6 million in the first
quarter of 1998 as compared to $3.2 million in the same period in 1998. The
gross profit margin decreased to 10.5% in the first quarter of 1999 from 21.4%
in the same period in 1998. These decreases were principally due to higher
depreciation costs in 1999 associated with the Acquisition.
Average selling price per metric ton decreased to $1,490 in the first quarter of
1999 from $1,661 in the same period in 1998 due to continued excess supply in
the secondary aluminum market coupled with reduced demand for silicon metal in
Asian markets. Average production cost per metric ton decreased to $1,172 in the
first quarter of 1999 from $1,256 in the same period in 1998. This decrease
resulted primarily from improved production efficiencies.
SELLING AND ADMINISTRATIVE EXPENSES
Selling and administrative expenses decreased $3.1 million, or 82.0%, to $0.7
million in the first quarter of 1999 as compared to $3.8 million in the same
period in 1998. The decrease was primarily due to recognition of expenses
related to the Acquisition in the first quarter of 1998 with no corresponding
costs in the first quarter of 1999. These expenses included a management bonus
and option compensation expense, and the write-off of certain intangible assets.
OPERATING INCOME
Income from operations increased $1.5 million to $0.9 million in the first
quarter of 1999 from an operating loss of $0.6 million in the same period of
1998, while the operating margin increased to 5.8% from (4.3)% for the same
period in the prior year. The increase was primarily due to the lack of expenses
related to the Acquisition in the first quarter of 1999, offset by the increase
in depreciation expense resulting from the Acquisition.
INTEREST EXPENSE
Interest expense increased $1.6 million, or 517%, to $1.9 million in the first
quarter of 1999 from $0.3 million in the same period in 1998. The significant
change in interest expense resulted from the increased debt associated with the
Acquisition.
OTHER INCOME - NET
Other income - net decreased $0.1 million, or 30.8%, to $0.2 million in the
first quarter of 1999 from $0.3 million in the same period in 1998. The decrease
in other income was primarily due to reduced "Mercedes" benefits realized by the
Company in the first quarter of 1999 offset by an increase in interest income
when compared to the same period in 1998. The "Mercedes" benefits recorded as
Other Income stem from payroll withholding for Alabama income tax that is
retained by the Company pursuant to an Alabama state law. The exercise of stock
options by management in the first quarter of 1998 generated significant
compensation expense against which Alabama income tax was withheld by the
Company. There was no such activity in the first quarter of 1999.
INCOME TAX BENEFIT
The income tax benefit was essentially unchanged for the quarter ended March 31,
1999 when compared to the same period in 1998.
NET LOSS
As a result of the above factors, the net loss for the three months ended March
31, 1999 was $0.7 million compared to a net loss of $0.6 million for the same
period in 1998.
9
<PAGE> 10
LIQUIDITY AND CAPITAL RESOURCES
The Company's primary sources of liquidity are cash flow from operations,
borrowings under its secured credit facility and a portion of the net proceeds
from the offering of its 9 5/8% Senior Notes due 2006 (the "Notes"). The
Company's principal uses of liquidity are to fund operations, meet debt service
requirements and finance the Company's planned capital expenditures, including
the construction of a fourth smelting furnace, engineering work for which, has
already begun.
The Company's cash flows from its operations are influenced by selling prices of
its products and raw materials costs, and are subject to moderate fluctuation
due to market supply factors driven by imports. The Company's silicon metal
business experiences price fluctuations principally due to the competitive
nature of one of its markets, the secondary aluminum market. Historically, the
Company's microsilica business has been affected by the developing nature of the
markets for this product.
Cash and cash equivalents were $11.0 million and $14.7 million at March 31, 1999
and December 31, 1998, respectively, and restricted cash was $6.1 million as of
March 31, 1999. The increase in total cash and equivalents and restricted cash
in the first quarter of 1999 resulted principally from cash provided by
operations.
Depreciation and amortization for the first quarter of 1999 totaled $1.7
million, compared to $0.5 million for the same period in 1998. The increase in
the first quarter of 1999 primarily resulted from a significant increase in
depreciation expense related to the step-up of assets associated with the
Acquisition. In addition, amortization expense increased significantly in the
first quarter of 1999 due to the amortization of the goodwill recorded as a
result of the Acquisition as well as debt issuance costs related to the
Acquisition.
In the first quarters of 1999 and 1998, net cash provided by operating
activities was $2.8 million and $1.2 million, respectively. The increase in the
first quarter of 1999 resulted primarily from the elimination of cash used to
pay for costs related to the Acquisition. In the first quarters of 1999 and
1998, net cash used in investing activities was $0.4 million and $1.2 million,
respectively. The changes primarily reflect different levels of capital spending
during the corresponding quarters of each year. In the first quarters of 1999
and 1998, net cash used in financing activities was insignificant.
In connection with the Acquisition, the Company replaced its existing credit
facility with a new credit facility (the "Credit Facility") providing
availability for revolving borrowings and letters of credit in an aggregate
principal amount of up to $15.0 million (of which $6.1 million is reserved for
support of a letter of credit issued in connection with the industrial revenue
bond financing of the Company). As of March 31, 1999 and December 31, 1998, no
drawings were outstanding under the Credit Facility.
Ongoing interest payments on the Notes represent significant liquidity
requirements for the Company. With respect to the $75.0 million borrowed under
the Notes, the Company will be required to make semiannual interest payments of
approximately $3.6 million over the life of the Notes.
With respect to ongoing capital spending, the Company expects to spend
approximately $2.5 million to $3.0 million annually to properly maintain its
furnaces and other production facilities. In addition, the Company intends to
add a fourth smelting furnace over the next two years from proceeds of the
Notes, together with internally generated or borrowed cash. The Company
estimates that construction of the furnace will cost approximately $25.0
million.
The agreement governing the Credit Facility (the "Credit Agreement") imposes
restrictions on the Company's ability to make capital expenditures and both the
Credit Agreement and the indenture governing the Notes (the "Indenture") limit
the Company's ability to incur additional indebtedness. Such restrictions,
together with the highly leveraged nature of the Company, could limit the
Company's ability to respond to market conditions, to meet its capital spending
program, to provide for unanticipated capital investments or to take advantage
of business opportunities. The covenants contained in the Credit Agreement also,
among other things, restrict the ability of the Company and its subsidiaries to
dispose of assets, incur guarantee obligations, repay the Notes, pay dividends,
create liens on assets, enter into sale and leaseback transactions, make
investments, loans or advances, make acquisitions, engage in acquisitions or
consolidations, make capital expenditures or engage in certain transactions with
affiliates, and otherwise restrict corporate activities. At March 31, 1999, the
Company was in compliance
10
<PAGE> 11
with all loan covenants, as amended. The covenants contained in the Indenture
governing the Notes also impose restrictions on the operation of the Company's
business.
YEAR 2000
The Company uses several application programs written over many years using
two-digit year fields to define the applicable year, rather than four-digit year
fields. Such programs may recognize a date using "00" as the year 1900 rather
than the Year 2000. This misinterpretation of the year could result in an
incorrect computation, a computer malfunction, or a computer shutdown.
The Company has identified the systems that could be affected by the Year 2000
issue and has developed a plan to resolve the issue. The plan contemplates the
replacement of the Company's sales order system by July 1, 1999 and perpetual
inventory system by June 1, 1999. Management has estimated that the costs
associated with the implementation of the plan to be approximately $50,000
although no assurances can be given in this regard. The Company has not made any
significant Year 2000 expenditures through the end of April 1999.
The Company is reviewing its top suppliers and customers to determine whether
they have similar Year 2000 issues and, if so, when they will become Year 2000
compliant. This will allow the Company to determine whether the suppliers' and
customers' Year 2000 problems will impede their ability to provide goods and
services to the Company. An initial review has indicated that all of the
Company's major suppliers and customers appear to be in the progress of
resolving their Year 2000 issues and that they do not foresee any material
problems.
If the Company cannot successfully and timely resolve its Year 2000 issues, its
business, results of operations and financial condition could be materially
adversely affected. Except for the systems controlling the Company's sales order
and perpetual inventory processes, which can be manually operated in the event
of a systems failure, management is not aware of any systems or operations of
the Company that will be adversely affected as a result of the Year 2000
problem. If, however, any other system or operation of the Company is adversely
affected by the Year 2000 problem, the Company's business, results of operations
and financial condition could be materially adversely affected. The Company has
not developed a contingency plan in the event of a Year 2000 problem. However,
based upon the results of the Company's internal review, it does not believe a
contingency plan is necessary.
FORWARD-LOOKING STATEMENTS
Certain of the matters discussed in this document, particularly regarding
anticipating future financial performance, business prospects, growth and
operating strategies, the effects of the Acquisition on the Company and similar
matters, and those preceded by, followed by or that otherwise include the words
"may," "would," "could," "will," "believes," "expects," "anticipates," "plans,"
"intends," "estimates," or similar expressions or variations thereof may
constitute "forward-looking statements" for purposes of the Securities Act of
1933, as amended (the "Securities Act"), and the Securities Exchange Act of
1934, as amended. For those statements, the Company claims the protection of the
safe harbor for forward-looking statements contained in the Private Securities
Litigation Reform Act of 1995. Forward-looking statements involve a number of
risks and uncertainties. A variety of factors, including without limitation
those discussed in "Management's Discussion and Analysis of Financial Condition
and Results of Operations" herein and in Item 7 of the Company's Annual Report
on Form 10-K, and in other filings by the Company with the Securities and
Exchange Commission, may affect the future results of the Company and could
cause those results to differ materially from those expressed in the
forward-looking statements.
ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK.
The fair value of the Company's long-term debt and capital leases is affected by
changes in interest rates. Based upon current market conditions, the fair value
and hypothetical increase in fair value of long-term debt and capital leases,
including current portion, is not expected to be materially different from that
as of December 31, 1998.
11
<PAGE> 12
PART II - OTHER INFORMATION
ITEM 1. LEGAL PROCEEDINGS.
Not applicable
ITEM 2. CHANGES IN SECURITIES.
Not applicable
ITEM 3. DEFAULTS UPON SENIOR NOTES.
Not applicable
ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS.
Not applicable
ITEM 5. OTHER INFORMATION.
Not applicable
ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K.
(a) Exhibits
27 Financial Data Schedule (for SEC use only)
(b) Reports on Form 8-K
The Company filed a Form 8-K Current Report dated March 31, 1999
to report a press release announcing the release of the Company's 1998
financial results.
12
<PAGE> 13
SIGNATURE
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.
SIMCALA, Inc.
Date: May 11, 1999 /s/ R. Myles Cowan
--------------------------------------------
R. Myles Cowan
Vice President and Chief Financial Officer
(Principal Accounting and Financial Officer)
13
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM THE
FINANCIAL STATEMENTS OF SIMCALA, INC. FOR THE THREE MONTHS ENDED MARCH 31, 1999
AND IS QUALIFIED IN ITS ENTIRETY BY REFERENCE TO SUCH FINANCIAL STATEMENTS.
</LEGEND>
<MULTIPLIER> 1,000
<S> <C>
<PERIOD-TYPE> 3-MOS
<FISCAL-YEAR-END> DEC-31-1999
<PERIOD-START> JAN-01-1999
<PERIOD-END> MAR-31-1999
<CASH> 17,046<F1>
<SECURITIES> 0
<RECEIVABLES> 6,793
<ALLOWANCES> 0
<INVENTORY> 1,903
<CURRENT-ASSETS> 26,403
<PP&E> 56,210
<DEPRECIATION> 4,038
<TOTAL-ASSETS> 116,317
<CURRENT-LIABILITIES> 7,761
<BONDS> 81,000
0
0
<COMMON> 18,807
<OTHER-SE> (2,971)
<TOTAL-LIABILITY-AND-EQUITY> 116,317
<SALES> 14,911
<TOTAL-REVENUES> 14,911
<CGS> 13,353
<TOTAL-COSTS> 13,353
<OTHER-EXPENSES> 195
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 1,938
<INCOME-PRETAX> (872)
<INCOME-TAX> (123)
<INCOME-CONTINUING> (749)
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> (749)
<EPS-PRIMARY> 0
<EPS-DILUTED> 0
<FN>
<F1> $6,148 of the total cash is restricted.
</FN>
</TABLE>
