Table of Contents
UNITED STATES 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 June 30, 2012
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 1-14447
AMCOL INTERNATIONAL CORPORATION
(Exact name of registrant as specified in its charter)
Delaware | 36-0724340 | |
(State or other jurisdiction of incorporation or organization) | (IRS Employer Identification No.) | |
2870 Forbs Avenue, Hoffman Estates, IL | 60192 | |
(Address of principal executive offices) | (Zip Code) |
(847) 851-1500
(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 ¨
Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files). Yes x No ¨
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer or a smaller reporting company (as defined in Rule 12b-2 of the Exchange Act).
Large accelerated filer x | Accelerated filer ¨ | Non-accelerated filer ¨ | ||
Smaller reporting company ¨ |
Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes ¨ No x
Indicate the number of shares outstanding of each of the issuer’s classes of common stock, as of the latest practicable date.
Class | Outstanding at October 12, 2012 | |
(Common stock, $.01 par value) | 31,959,139 Shares |
Table of Contents
AMCOL INTERNATIONAL CORPORATION
2
Table of Contents
AMCOL INTERNATIONAL CORPORATION AND SUBSIDIARIES
CONDENSED CONSOLIDATED BALANCE SHEETS
(Amounts in millions)
Item 1: | Financial Statements |
ASSETS | June 30, 2012 (unaudited) | December 31, 2011 | ||||||
Current assets: | ||||||||
Cash and cash equivalents | $ | 16.8 | $ | 23.7 | ||||
Accounts receivable, net | 217.2 | 204.8 | ||||||
Inventories | 146.0 | 144.8 | ||||||
Prepaid expenses | 19.2 | 15.7 | ||||||
Deferred income taxes | 4.2 | 5.9 | ||||||
Income tax receivable | 11.0 | 6.9 | ||||||
Other | 4.0 | 6.1 | ||||||
|
|
|
| |||||
Total current assets | 418.4 | 407.9 | ||||||
|
|
|
| |||||
Noncurrent assets: | ||||||||
Property, plant, equipment, and mineral rights and reserves: | ||||||||
Land | 13.9 | 13.9 | ||||||
Mineral rights | 49.8 | 52.5 | ||||||
Depreciable assets | 507.8 | 482.6 | ||||||
|
|
|
| |||||
571.5 | 549.0 | |||||||
|
|
|
| |||||
Less: accumulated depreciation and depletion | 291.4 | 275.5 | ||||||
|
|
|
| |||||
280.1 | 273.5 | |||||||
|
|
|
| |||||
Goodwill | 69.4 | 69.5 | ||||||
Intangible assets, net | 35.8 | 36.6 | ||||||
Investment in and advances to affiliates and joint ventures | 26.8 | 26.4 | ||||||
Available-for-sale securities | 3.0 | 3.8 | ||||||
Deferred income taxes | 9.0 | 8.5 | ||||||
Other assets | 26.5 | 24.4 | ||||||
|
|
|
| |||||
Total noncurrent assets | 450.6 | 442.7 | ||||||
|
|
|
| |||||
Total Assets | $ | 869.0 | $ | 850.6 | ||||
|
|
|
|
Continued…
3
Table of Contents
AMCOL INTERNATIONAL CORPORATION AND SUBSIDIARIES
CONDENSED CONSOLIDATED BALANCE SHEETS
(Amounts in millions)
LIABILITIES AND SHAREHOLDERS’ EQUITY | June 30, 2012 (unaudited) | December 31, 2011 | ||||||
Current liabilities: | ||||||||
Accounts payable | $ | 50.3 | $ | 56.5 | ||||
Accrued income taxes | 10.1 | 2.4 | ||||||
Accrued liabilities | 58.3 | 57.9 | ||||||
|
|
|
| |||||
Total current liabilities | 118.7 | 116.8 | ||||||
|
|
|
| |||||
Noncurrent liabilities: | ||||||||
Long-term debt | 251.0 | 260.7 | ||||||
Pension liabilities | 35.2 | 34.8 | ||||||
Deferred compensation | 9.0 | 8.9 | ||||||
Deferred income taxes | 12.9 | 13.5 | ||||||
Other long-term liabilities | 19.3 | 19.2 | ||||||
|
|
|
| |||||
Total noncurrent liabilities | 327.4 | 337.1 | ||||||
|
|
|
| |||||
Shareholders’ Equity: | ||||||||
Common stock | 0.3 | 0.3 | ||||||
Additional paid in capital | 99.2 | 94.3 | ||||||
Retained earnings | 339.7 | 316.4 | ||||||
Accumulated other comprehensive income (loss) | (18.8 | ) | (15.0 | ) | ||||
Less: Treasury stock | (1.3 | ) | (3.4 | ) | ||||
|
|
|
| |||||
Total AMCOL shareholders’ equity | 419.1 | 392.6 | ||||||
|
|
|
| |||||
Noncontrolling interest | 3.8 | 4.1 | ||||||
|
|
|
| |||||
Total equity | 422.9 | 396.7 | ||||||
|
|
|
| |||||
Total Liabilities and Shareholders’ Equity | $ | 869.0 | $ | 850.6 | ||||
|
|
|
|
The accompanying notes are an integral part of these condensed consolidated financial statements.
4
Table of Contents
AMCOL INTERNATIONAL CORPORATION AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(Unaudited)
(Amounts in millions, except per share amounts)
Six Months June 30, | Three Months June 30, | |||||||||||||||
2012 | 2011 | 2012 | 2011 | |||||||||||||
Continuing Operations | ||||||||||||||||
Net sales | $ | 493.0 | $ | 461.7 | $ | 257.4 | $ | 243.1 | ||||||||
Cost of sales | 353.8 | 341.3 | 182.8 | 181.1 | ||||||||||||
|
|
|
|
|
|
|
| |||||||||
Gross profit | 139.2 | 120.4 | 74.6 | 62.0 | ||||||||||||
Selling, general and administrative expenses | 86.9 | 80.1 | 43.6 | 41.0 | ||||||||||||
|
|
|
|
|
|
|
| |||||||||
Operating profit | 52.3 | 40.3 | 31.0 | 21.0 | ||||||||||||
|
|
|
|
|
|
|
| |||||||||
Other income (expense): | ||||||||||||||||
Interest expense, net | (5.4 | ) | (5.3 | ) | (2.7 | ) | (2.7 | ) | ||||||||
Other, net | (2.7 | ) | 0.1 | (0.5 | ) | 0.5 | ||||||||||
|
|
|
|
|
|
|
| |||||||||
(8.1 | ) | (5.2 | ) | (3.2 | ) | (2.2 | ) | |||||||||
|
|
|
|
|
|
|
| |||||||||
Income before income taxes and income (loss) from affiliates and joint ventures | 44.2 | 35.1 | 27.8 | 18.8 | ||||||||||||
Income tax expense | 11.9 | 9.6 | 7.6 | 5.7 | ||||||||||||
|
|
|
|
|
|
|
| |||||||||
Income before income (loss) from affiliates and joint ventures | 32.3 | 25.5 | 20.2 | 13.1 | ||||||||||||
Income (loss) from affiliates and joint ventures | 2.3 | 0.9 | 1.1 | (0.1 | ) | |||||||||||
|
|
|
|
|
|
|
| |||||||||
Income (loss) from continuing operations | 34.6 | 26.4 | 21.3 | 13.0 | ||||||||||||
|
|
|
|
|
|
|
| |||||||||
Discontinued Operations | ||||||||||||||||
Income (loss) on discontinued operations | - | 0.1 | - | 0.2 | ||||||||||||
|
|
|
|
|
|
|
| |||||||||
Net income (loss) | 34.6 | 26.5 | 21.3 | 13.2 | ||||||||||||
|
|
|
|
|
|
|
| |||||||||
Net income (loss) attributable to noncontrolling interests | (0.2 | ) | - | (0.3 | ) | - | ||||||||||
|
|
|
|
|
|
|
| |||||||||
Net income (loss) attributable to AMCOL shareholders | $ | 34.8 | $ | 26.5 | $ | 21.6 | $ | 13.2 | ||||||||
|
|
|
|
|
|
|
| |||||||||
Weighted average common shares outstanding | 32.0 | 31.6 | 32.0 | 31.7 | ||||||||||||
Weighted average common and common equivalent shares outstanding | 32.3 | 32.1 | 32.3 | 32.2 | ||||||||||||
Amounts attributable to AMCOL shareholders | ||||||||||||||||
Income from continuing operations, net of tax | $ | 34.8 | $ | 26.4 | $ | 21.6 | $ | 13.0 | ||||||||
Discontinued operations, net of tax | - | 0.1 | - | 0.2 | ||||||||||||
|
|
|
|
|
|
|
| |||||||||
Net income | $ | 34.8 | $ | 26.5 | $ | 21.6 | $ | 13.2 | ||||||||
|
|
|
|
|
|
|
| |||||||||
Earnings per share attributable to AMCOL shareholders: | ||||||||||||||||
Basic earnings (loss) per share: | ||||||||||||||||
Continuing operations | $ | 1.09 | $ | 0.84 | $ | 0.67 | $ | 0.41 | ||||||||
Discontinued operations | - | - | - | 0.01 | ||||||||||||
|
|
|
|
|
|
|
| |||||||||
Net income | $ | 1.09 | $ | 0.84 | $ | 0.67 | $ | 0.42 | ||||||||
|
|
|
|
|
|
|
| |||||||||
Diluted earnings (loss) per share: | ||||||||||||||||
Continuing operations | $ | 1.08 | $ | 0.83 | $ | 0.67 | $ | 0.40 | ||||||||
Discontinued operations | - | - | - | 0.01 | ||||||||||||
|
|
|
|
|
|
|
| |||||||||
Net income | $ | 1.08 | $ | 0.83 | $ | 0.67 | $ | 0.41 | ||||||||
|
|
|
|
|
|
|
| |||||||||
Dividends declared per share | $ | 0.36 | $ | 0.36 | $ | 0.18 | $ | 0.18 |
The accompanying notes are an integral part of these condensed consolidated financial statements.
5
Table of Contents
AMCOL INTERNATIONAL CORPORATION AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (LOSS)
(Unaudited)
(Amounts in millions)
Total | AMCOL Shareholders | Noncontrolling Interest | ||||||||||||||||||||||
Six Months Ended June 30, | Six Months Ended June 30, | Six Months Ended June 30, | ||||||||||||||||||||||
2012 | 2011 | 2012 | 2011 | 2012 | 2011 | |||||||||||||||||||
Net income (loss) | $ | 34.6 | $ | 26.5 | $ | 34.8 | $ | 26.5 | $ | (0.2 | ) | $ | - | |||||||||||
Other comprehensive income (loss): | ||||||||||||||||||||||||
Foreign currency translation adjustment | (3.5 | ) | 2.2 | (3.4 | ) | 2.2 | (0.1 | ) | - | |||||||||||||||
Unrealized gain (loss) on available-for-sale securities, net of tax | (0.8 | ) | (6.6 | ) | (0.8 | ) | (6.6 | ) | - | - | ||||||||||||||
Unrealized gain (loss) on interest rate swap agreements, net of tax | - | (0.3 | ) | - | (0.3 | ) | - | - | ||||||||||||||||
Pension adjustment, net of tax | 0.4 | - | 0.4 | - | - | - | ||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
| |||||||||||||
Comprehensive income (loss) | $ | 30.7 | $ | 21.8 | $ | 31.0 | $ | 21.8 | $ | (0.3 | ) | $ | - | |||||||||||
|
|
|
|
|
|
|
|
|
|
|
| |||||||||||||
|
|
|
|
|
|
|
|
|
|
|
| |||||||||||||
Total | AMCOL Shareholders | Noncontrolling Interest | ||||||||||||||||||||||
Three Months Ended June 30, | Three Months Ended June 30, | Three Months Ended June 30, | ||||||||||||||||||||||
2012 | 2011 | 2012 | 2011 | 2012 | 2011 | |||||||||||||||||||
Net income (loss) | $ | 21.3 | $ | 13.2 | $ | 21.6 | $ | 13.2 | $ | (0.3 | ) | $ | - | |||||||||||
Other comprehensive income (loss): | ||||||||||||||||||||||||
Foreign currency translation adjustment | (14.3 | ) | 0.4 | (14.0 | ) | 0.4 | (0.3 | ) | - | |||||||||||||||
Unrealized gain (loss) on available-for-sale securities, net of tax | 0.1 | (3.7 | ) | 0.1 | (3.7 | ) | - | - | ||||||||||||||||
Unrealized gain (loss) on interest rate swap agreements, net of tax | (0.2 | ) | (0.8 | ) | (0.2 | ) | (0.8 | ) | - | - | ||||||||||||||
Pension adjustment, net of tax | 0.2 | - | 0.2 | - | - | - | ||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
| |||||||||||||
Comprehensive income (loss) | $ | 7.1 | $ | 9.1 | $ | 7.7 | $ | 9.1 | $ | (0.6 | ) | $ | - | |||||||||||
|
|
|
|
|
|
|
|
|
|
|
| |||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
The accompanying notes are an integral part of these condensed consolidated financial statements.
6
Table of Contents
AMCOL INTERNATIONAL CORPORATION AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF CHANGES IN EQUITY
(Unaudited)
(Amounts in millions)
AMCOL Shareholders | ||||||||||||||||||||||||||||
Total Equity | Retained Earnings | Accumulated Other Comprehensive Income (Loss) | Common Stock | Treasury Stock | Paid-in Capital | Noncontrolling Interest | ||||||||||||||||||||||
Balance at December 31, 2010 | $ | 395.1 | $ | 279.6 | $ | 28.7 | $ | 0.3 | $ | (8.9) | $ | 95.1 | $ | 0.3 | ||||||||||||||
Net income (loss) | 26.5 | 26.5 | - | |||||||||||||||||||||||||
Cash dividends | (11.4 | ) | (11.4 | ) | ||||||||||||||||||||||||
Issuance of treasury shares pursuant to employee stock compensation plans | 6.4 | 4.5 | 1.9 | |||||||||||||||||||||||||
Tax benefit from employee stock compensation plans | 0.6 | 0.6 | ||||||||||||||||||||||||||
Vesting of common stock in connection with employee stock compensation plans | 2.4 | 2.4 | ||||||||||||||||||||||||||
Purchase of noncontrolling interest | (5.7 | ) | (5.4 | ) | (0.3 | ) | ||||||||||||||||||||||
Sale of subsidiary shares to noncontrolling interest | - | (1.4 | ) | (3.4 | ) | 4.8 | ||||||||||||||||||||||
Other comprehensive income (loss) | (3.3 | ) | (3.3 | ) | - | |||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
| |||||||||||||||
Balance at June 30, 2011 | 410.6 | 294.7 | 24.0 | 0.3 | (4.4 | ) | 91.2 | 4.8 | ||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
| |||||||||||||||
Balance at December 31, 2011 | $ | 396.7 | $ | 316.4 | $ | (15.0 | ) | $ | 0.3 | $ | (3.4 | ) | $ | 94.3 | $ | 4.1 | ||||||||||||
Net income (loss) | 34.6 | 34.8 | (0.2 | ) | ||||||||||||||||||||||||
Cash dividends | (11.5 | ) | (11.5 | ) | ||||||||||||||||||||||||
Issuance of treasury shares pursuant to employee stock compensation plans | 3.9 | 2.1 | 1.8 | |||||||||||||||||||||||||
Tax benefit from employee stock compensation plans | (0.1 | ) | (0.1 | ) | ||||||||||||||||||||||||
Vesting of common stock in connection with employee stock compensation plans | 3.1 | 3.1 | ||||||||||||||||||||||||||
Other comprehensive income (loss) | (3.9 | ) | (3.8 | ) | (0.1 | ) | ||||||||||||||||||||||
Other | 0.1 | 0.1 | ||||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
| |||||||||||||||
Balance at June 30, 2012 | 422.9 | 339.7 | (18.8 | ) | 0.3 | (1.3 | ) | 99.2 | 3.8 | |||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
The accompanying notes are an integral part of these condensed consolidated financial statements.
7
Table of Contents
AMCOL INTERNATIONAL CORPORATION AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(Unaudited)
(Amounts in millions)
Six Months Ended June 30, | ||||||||
2012 | 2011 | |||||||
Cash flow from operating activities: | ||||||||
Net income | $ | 34.6 | $ | 26.5 | ||||
Adjustments to reconcile from net income (loss) to net cash provided by (used in) operating activities: | ||||||||
Depreciation, depletion, and amortization | 21.8 | 19.9 | ||||||
Other non-cash charges | 7.4 | 2.4 | ||||||
Changes in assets and liabilities, net of effects of acquisitions: | ||||||||
Decrease (increase) in current assets | (26.3 | ) | (58.4 | ) | ||||
Decrease (increase) in noncurrent assets | (1.7 | ) | (0.1 | ) | ||||
Increase (decrease) in current liabilities | 2.1 | 22.5 | ||||||
Increase (decrease) in noncurrent liabilities | 1.4 | 1.2 | ||||||
|
|
|
| |||||
Net cash provided by (used in) operating activities | 39.3 | 14.0 | ||||||
|
|
|
| |||||
Cash flow from investing activities: | ||||||||
Capital expenditures | (32.2 | ) | (24.8 | ) | ||||
Investments in and advances to affiliates and joint ventures | 0.1 | (0.8 | ) | |||||
Proceeds from sale of land and depreciable assets | 1.4 | 1.4 | ||||||
Other | 0.8 | 0.3 | ||||||
|
|
|
| |||||
Net cash (used in) investing activities | (29.9 | ) | (23.9 | ) | ||||
|
|
|
| |||||
Cash flow from financing activities: | ||||||||
Net change in outstanding debt | (9.6 | ) | 4.5 | |||||
Proceeds from sales of treasury stock | 3.9 | 6.5 | ||||||
Dividends | (11.5 | ) | (11.4 | ) | ||||
Excess tax benefits from stock-based compensation | 0.2 | 0.7 | ||||||
|
|
|
| |||||
Net cash provided by (used in) financing activities | (17.0 | ) | 0.3 | |||||
|
|
|
| |||||
Effect of foreign currency rate changes on cash | 0.7 | 0.7 | ||||||
|
|
|
| |||||
Net increase (decrease) in cash and cash equivalents | (6.9 | ) | (8.9 | ) | ||||
|
|
|
| |||||
Cash and cash equivalents at beginning of period | 23.7 | 26.8 | ||||||
|
|
|
| |||||
Cash and cash equivalents at end of period | $ | 16.8 | $ | 17.9 | ||||
|
|
|
|
The accompanying notes are an integral part of these condensed consolidated financial statements.
8
Table of Contents
AMCOL INTERNATIONAL CORPORATION AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(Unaudited)
(Dollars in millions)
Note 1: SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
Company Operations
We, AMCOL International Corporation (the “Company”), are a global company focused on long-term profitability growth through the development and application of minerals and technology products and services for use in various industrial and consumer markets. We operate in five segments: minerals and materials, environmental, oilfield services, transportation and corporate.
Our minerals and materials segment mines, processes and distributes minerals and products for use in various industrial and consumer markets, including metalcasting, pet care, laundry care, and drilling industries. Additionally, this segment develops and manufactures synthetic materials principally for personal care applications.
Our environmental segment manufactures and distributes products for use as moisture and vapor barriers in commercial construction, landfills and a variety of other industrial and commercial applications and provides related services.
Our oilfield services segment provides both onshore and offshore water treatment filtration, well testing, pipeline separation, nitrogen, coil tubing and other services to the oil and natural gas industry.
Our transportation segment provides both long-haul trucking and freight brokerage services for our domestic subsidiaries as well as third parties.
Our corporate segment includes the elimination of intersegment sales as well as certain expenses associated with research and development, management, employee benefits and information technology activities for our Company. Approximately 73% and 77% of the revenue elimination in the six months ended June 30, 2012 and 2011, respectively, and 74% and 74% of the revenue elimination in the three months ended June 30, 2012 and 2011, respectively, represents elimination of shipping revenues between our transportation segment and its domestic sister companies.
The composition of our revenues by segment is as follows:
Six Months Ended June 30, | ||||
2012 | 2011 | |||
Minerals and materials | 52% | 51% | ||
Environmental | 23% | 27% | ||
Oilfield services | 24% | 20% | ||
Transportation | 5% | 6% | ||
Intersegment sales | -4% | -4% | ||
|
| |||
100% | 100% | |||
|
|
Further discussion of our segment information is included in Note 5, “Business Segment Information.”
9
Table of Contents
AMCOL INTERNATIONAL CORPORATION AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(Unaudited)
(Dollars in millions)
Basis of Presentation
The financial information included herein has been prepared by management. The information furnished herein includes all adjustments that are, in our opinion, necessary for a fair presentation of our results of operations and cash flows for the interim periods ended June 30, 2012 and 2011, and our financial position as of June 30, 2012, and all such adjustments are of a normal and recurring nature. The accompanying condensed consolidated financial information should be read in conjunction with the consolidated financial statements and related notes included in our Annual Report on Form 10-K for the year ended December 31, 2011.
Certain items in the prior year’s condensed consolidated financial statements contained herein and notes thereto have been reclassified to conform to the condensed consolidated financial statement presentation for the three and six months ended June 30, 2012.
The preparation of financial statements in conformity with accounting principles generally accepted in the United States of America (“US GAAP”) requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities, disclosure of contingent liabilities at the date of the financial statements, and the reported amounts of revenues and expenses during the reporting period. Actual results may differ from those estimates.
The results of operations for interim periods are not necessarily indicative of the results to be expected for the full year for a variety of reasons, including the seasonality of both our environmental segment, which varies due to the seasonal nature of the construction industry, and our oilfield services segment, which varies due to seasonal weather patterns in its various geographic markets.
Note 2: | CORRECTION OF ERRORS IN PREVIOUSLY REPORTED FINANCIAL STATEMENTS |
In August 2012, management in our environmental segment conducted a physical count of inventory at its operations in Spain. Upon an evaluation of the results of that physical inventory, we determined that our inventory values as recorded were misstated and that these misstatements affected prior periods.
Our previously issued financial statements dating back to 2008 and prior years contain other errors which were not previously corrected as they were immaterial to our previously issued consolidated financial statements. We assessed the materiality of all the errors in accordance with SEC Staff Accounting Bulletin (“SAB”) No. 99,Materiality and in accordance with the rollover and iron curtain methods as described in SAB No. 108,Considering the Effects of Prior Year Misstatements in Current Year Financial Statements.
10
Table of Contents
AMCOL INTERNATIONAL CORPORATION AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(Unaudited)
(Dollars in millions)
We concluded that these errors were individually and collectively immaterial to our previously issued financial statements. However, under SAB 108, we concluded that there is a reasonable possibility that our financial statements for the twelve months ended December 31, 2012 will be materially misstated if we correct the prior year errors in the current year. As a result, we decided to correct our prior year financial statements even though the errors are immaterial to the financial statements issued in those years. Under SAB 108, correcting prior year financial statements for immaterial errors does not require our previously filed reports to be amended; rather, SAB 108 allows these corrections to be made when we file our prior period consolidated financial statements in our 2012 Form 10-K.
For all periods including and between the twelve months ended December 31, 2008 and the three months ended March 31, 2012, these errors, when combined with the errors in our Spanish operations, decreased net income available to AMCOL shareholders by $2.7. Although there were several errors across various categories, we have summarized the errors into general categories and quantified the amount by which they increased (decreased) net income available to AMCOL shareholders as noted below:
• | Spain – $2.8 decrease for errors associated with accounting for inventory and other items in our environmental segment’s Spanish operations; |
• | South Africa – $0.8 decrease for errors related to the accounting for the acquisition of mineral rights in our minerals and materials segment’s chromite operations in South Africa; |
• | Malaysia – $0.3 increase resulting from correcting errors in our oilfield services segment’s Malaysian operations, largely relating to improper recognition of expenses and errors in accounting for revenues; |
• | DongMing – adjustments to correct errors made in accounting for accounts payable in this China subsidiary; |
• | Tax – $0.2 increase resulting largely from inaccuracies in the accounting for income tax expense in our international operations; and |
• | $0.4 increase for other insignificant errors we have aggregated together. |
Adjustments by category and increase (decrease) to Net income available to AMCOL sharesholders attributable to each category | Prior 2009 | Twelve Months Ended December 31, | Three Months Ended 2012 | Total | ||||||||||||||||||||
2009 | 2010 | 2011 | ||||||||||||||||||||||
Spain | $ | - | $ | (0.8 | ) | $ | (0.6 | ) | $ | (1.1 | ) | $ | (0.3 | ) | $ | (2.8 | ) | |||||||
South Africa | - | (0.3 | ) | - | (0.5 | ) | - | (0.8 | ) | |||||||||||||||
Malaysia | - | - | (0.4 | ) | 0.7 | - | 0.3 | |||||||||||||||||
DongMing | 0.2 | 0.1 | 0.2 | (0.5 | ) | - | - | |||||||||||||||||
Tax | (0.5 | ) | 0.1 | (1.2 | ) | 1.5 | 0.3 | 0.2 | ||||||||||||||||
Other | (0.3 | ) | (0.7 | ) | 0.6 | 0.4 | 0.4 | 0.4 | ||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
| |||||||||||||
Total | $ | (0.6 | ) | $ | (1.6 | ) | $ | (1.4 | ) | $ | 0.5 | $ | 0.4 | $ | (2.7 | ) | ||||||||
|
|
|
|
|
|
|
|
|
|
|
|
11
Table of Contents
AMCOL INTERNATIONAL CORPORATION AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(Unaudited)
(Dollars in millions)
Corrections to annual periods ended December 31, 2009, December 31, 2010 and 2011 and as of December 31, 2010 and 2011
The effect of correcting these errors on our condensed consolidated statements of operations for our years ended December 31, 2009, 2010 and 2011 is as follows:
Year Ended December 31, 2009 | ||||||||||||||||||||||||||||||||
Adjustments | ||||||||||||||||||||||||||||||||
Previously Reported | Spain | South Africa | DongMing | Tax | Other | Total | As Adjusted | |||||||||||||||||||||||||
Continuing Operations | ||||||||||||||||||||||||||||||||
Net sales | $ | 691.9 | $ | - | $ | - | $ | - | $ | - | $ | (3.7 | ) | $ | (3.7 | ) | $ | 688.2 | ||||||||||||||
Cost of sales | 505.6 | 0.7 | 0.5 | (3.8 | ) | (2.6 | ) | 503.0 | ||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |||||||||||||||||
Gross profit | 186.3 | (0.7 | ) | (0.5 | ) | - | - | 0.1 | (1.1 | ) | 185.2 | |||||||||||||||||||||
Selling, general and administrative expenses | 133.4 | 0.3 | 0.1 | (0.1 | ) | 1.5 | 1.8 | 135.2 | ||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |||||||||||||||||
Operating profit | 52.9 | (1.0 | ) | (0.6 | ) | 0.1 | - | (1.4 | ) | (2.9 | ) | 50.0 | ||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |||||||||||||||||
Other income (expense): | ||||||||||||||||||||||||||||||||
Interest expense, net | (12.2 | ) | 0.2 | 0.2 | (12.0 | ) | ||||||||||||||||||||||||||
Other, net | (0.9 | ) | 0.6 | 0.6 | (0.3 | ) | ||||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |||||||||||||||||
(13.1 | ) | - | - | - | - | 0.8 | 0.8 | (12.3 | ) | |||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |||||||||||||||||
Income before income taxes and income (loss) from affiliates and joint ventures | 39.8 | (1.0 | ) | (0.6 | ) | 0.1 | - | (0.6 | ) | (2.1 | ) | 37.7 | ||||||||||||||||||||
Income tax expense (benefit) | 5.3 | (0.2 | ) | (0.1 | ) | - | (0.1 | ) | - | (0.4 | ) | 4.9 | ||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |||||||||||||||||
Income before income (loss) from affiliates and joint ventures | 34.5 | (0.8 | ) | (0.5 | ) | 0.1 | 0.1 | (0.6 | ) | (1.7 | ) | 32.8 | ||||||||||||||||||||
Income (loss) from affiliates and joint ventures | 0.1 | (0.1 | ) | (0.1 | ) | - | ||||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |||||||||||||||||
Income (loss) from continuing operations | 34.6 | (0.8 | ) | (0.5 | ) | 0.1 | 0.1 | (0.7 | ) | (1.8 | ) | 32.8 | ||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |||||||||||||||||
Discontinued Operations | ||||||||||||||||||||||||||||||||
Income (loss) on discontinued operations | 0.3 | - | - | 0.3 | ||||||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |||||||||||||||||
Net income (loss) | 34.9 | (0.8 | ) | (0.5 | ) | 0.1 | 0.1 | (0.7 | ) | (1.8 | ) | 33.1 | ||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |||||||||||||||||
Net income (loss) attributable to noncontrolling interests | 0.1 | (0.2 | ) | - | (0.2 | ) | (0.1 | ) | ||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |||||||||||||||||
Net income (loss) attributable to AMCOL shareholders | $ | 34.8 | $ | (0.8 | ) | $ | (0.3 | ) | $ | 0.1 | $ | 0.1 | $ | (0.7 | ) | $ | (1.6 | ) | $ | 33.2 | ||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |||||||||||||||||
Weighted average common shares outstanding | 30.8 | 30.8 | 30.8 | |||||||||||||||||||||||||||||
Weighted average common and common equivalent shares outstanding | 31.0 | 31.0 | 31.0 | |||||||||||||||||||||||||||||
Amounts attributable to AMCOL shareholders | ||||||||||||||||||||||||||||||||
Income from continuing operations, net of tax | $ | 34.5 | $ | (1.6 | ) | $ | 32.9 | |||||||||||||||||||||||||
Discontinued operations, net of tax | 0.3 | - | 0.3 | |||||||||||||||||||||||||||||
|
|
|
|
|
| |||||||||||||||||||||||||||
Net income | $ | 34.8 | $ | (1.6 | ) | $ | 33.2 | |||||||||||||||||||||||||
|
|
|
|
|
| |||||||||||||||||||||||||||
Earnings per share attributable to AMCOL shareholders: | ||||||||||||||||||||||||||||||||
Basic earnings (loss) per share: | ||||||||||||||||||||||||||||||||
Continuing operations | $ | 1.12 | $ | (0.05 | ) | $ | 1.07 | |||||||||||||||||||||||||
Discontinued operations | 0.01 | - | 0.01 | |||||||||||||||||||||||||||||
|
|
|
|
|
| |||||||||||||||||||||||||||
Net income | $ | 1.13 | $ | (0.05 | ) | $ | 1.08 | |||||||||||||||||||||||||
|
|
|
|
|
| |||||||||||||||||||||||||||
Diluted earnings (loss) per share: | ||||||||||||||||||||||||||||||||
Continuing operations | $ | 1.11 | $ | (0.05 | ) | $ | 1.06 | |||||||||||||||||||||||||
Discontinued operations | 0.01 | - | 0.01 | |||||||||||||||||||||||||||||
|
|
|
|
|
| |||||||||||||||||||||||||||
Net income | $ | 1.12 | $ | (0.05 | ) | $ | 1.07 | |||||||||||||||||||||||||
|
|
|
|
|
|
12
Table of Contents
AMCOL INTERNATIONAL CORPORATION AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(Unaudited)
(Dollars in millions)
Year Ended December 31, 2010 | ||||||||||||||||||||||||||||||||||||
Adjustments | ||||||||||||||||||||||||||||||||||||
Previously Reported | Spain | South Africa | Malaysia | DongMing | Tax | Other | Total | As Adjusted | ||||||||||||||||||||||||||||
Continuing Operations | ||||||||||||||||||||||||||||||||||||
Net sales | $ | 841.0 | $ | - | $ | - | $ | (0.6 | ) | $ | - | $ | - | $ | (14.2 | ) | $ | (14.8 | ) | $ | 826.2 | |||||||||||||||
Cost of sales | 624.1 | 0.6 | (12.7 | ) | (12.1 | ) | 612.0 | |||||||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |||||||||||||||||||
Gross profit | 216.9 | (0.6 | ) | - | (0.6 | ) | - | - | (1.5 | ) | (2.7 | ) | 214.2 | |||||||||||||||||||||||
Selling, general and administrative expenses | 146.9 | (0.1 | ) | (0.3 | ) | (1.5 | ) | (1.9 | ) | 145.0 | ||||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |||||||||||||||||||
Operating profit | 70.0 | (0.6 | ) | 0.1 | (0.6 | ) | 0.3 | - | (0.0 | ) | (0.8 | ) | 69.2 | |||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |||||||||||||||||||
Other income (expense): | ||||||||||||||||||||||||||||||||||||
Interest expense, net | (9.7 | ) | 0.1 | 0.1 | (9.6 | ) | ||||||||||||||||||||||||||||||
Other, net | 1.2 | 0.1 | 0.1 | 1.3 | ||||||||||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |||||||||||||||||||
(8.5 | ) | - | - | - | - | - | 0.2 | 0.2 | (8.3 | ) | ||||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |||||||||||||||||||
Income before income taxes and income (loss) from affiliates and joint ventures | 61.5 | (0.6 | ) | 0.1 | (0.6 | ) | 0.3 | - | 0.2 | (0.6 | ) | 60.9 | ||||||||||||||||||||||||
Income tax expense (benefit) | 19.4 | 0.1 | (0.2 | ) | 0.1 | 1.2 | 0.2 | 1.4 | 20.8 | |||||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |||||||||||||||||||
Income before income (loss) from affiliates and joint ventures | 42.1 | (0.6 | ) | - | (0.4 | ) | 0.2 | (1.2 | ) | (0.0 | ) | (2.0 | ) | 40.1 | ||||||||||||||||||||||
Income (loss) from affiliates and joint ventures | (11.3 | ) | 0.2 | 0.2 | (11.1 | ) | ||||||||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |||||||||||||||||||
Income (loss) from continuing operations | 30.8 | (0.6 | ) | - | (0.4 | ) | 0.2 | (1.2 | ) | 0.2 | (1.8 | ) | 29.0 | |||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |||||||||||||||||||
Discontinued Operations | ||||||||||||||||||||||||||||||||||||
Income (loss) on discontinued operations | (0.9 | ) | - | - | (0.9 | ) | ||||||||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |||||||||||||||||||
Net income (loss) | 29.9 | (0.6 | ) | - | (0.4 | ) | 0.2 | (1.2 | ) | 0.2 | (1.8 | ) | 28.1 | |||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |||||||||||||||||||
Net income (loss) attributable to noncontrolling interests | (0.4 | ) | (0.4 | ) | (0.4 | ) | (0.8 | ) | ||||||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |||||||||||||||||||
Net income (loss) attributable to AMCOL shareholders | $ | 30.3 | $ | (0.6 | ) | $ | - | $ | (0.4 | ) | $ | 0.2 | $ | (1.2 | ) | $ | 0.6 | $ | (1.4 | ) | $ | 28.9 | ||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |||||||||||||||||||
Weighted average common shares outstanding | 31.2 | 31.2 | 31.2 | |||||||||||||||||||||||||||||||||
Weighted average common and common equivalent shares outstanding | 31.5 | 31.5 | 31.5 | |||||||||||||||||||||||||||||||||
Amounts attributable to AMCOL shareholders | ||||||||||||||||||||||||||||||||||||
Income from continuing operations, net of tax | $ | 31.2 | $ | (1.4 | ) | $ | 29.8 | |||||||||||||||||||||||||||||
Discontinued operations, net of tax | (0.9 | ) | - | (0.9 | ) | |||||||||||||||||||||||||||||||
|
|
|
|
|
| |||||||||||||||||||||||||||||||
Net income | $ | 30.3 | $ | (1.4 | ) | $ | 28.9 | |||||||||||||||||||||||||||||
|
|
|
|
|
| |||||||||||||||||||||||||||||||
Earnings per share attributable to AMCOL shareholders: | ||||||||||||||||||||||||||||||||||||
Basic earnings (loss) per share: | ||||||||||||||||||||||||||||||||||||
Continuing operations | $ | 1.00 | $ | (0.04 | ) | $ | 0.96 | |||||||||||||||||||||||||||||
Discontinued operations | (0.03 | ) | - | (0.03 | ) | |||||||||||||||||||||||||||||||
|
|
|
|
|
| |||||||||||||||||||||||||||||||
Net income | $ | 0.97 | $ | (0.04 | ) | $ | 0.93 | |||||||||||||||||||||||||||||
|
|
|
|
|
| |||||||||||||||||||||||||||||||
Diluted earnings (loss) per share: | ||||||||||||||||||||||||||||||||||||
Continuing operations | $ | 0.99 | $ | (0.04 | ) | $ | 0.95 | |||||||||||||||||||||||||||||
Discontinued operations | (0.03 | ) | - | (0.03 | ) | |||||||||||||||||||||||||||||||
|
|
|
|
|
| |||||||||||||||||||||||||||||||
Net income | $ | 0.96 | $ | (0.04 | ) | $ | 0.92 | |||||||||||||||||||||||||||||
|
|
|
|
|
|
13
Table of Contents
AMCOL INTERNATIONAL CORPORATION AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(Unaudited)
(Dollars in millions)
Year Ended December 31, 2011 | ||||||||||||||||||||||||||||||||||||
Adjustments | ||||||||||||||||||||||||||||||||||||
Previously Reported | Spain | South Africa | Malaysia | DongMing | Tax | Other | Total | As Adjusted | ||||||||||||||||||||||||||||
Continuing Operations | ||||||||||||||||||||||||||||||||||||
Net sales | $ | 942.4 | $ | - | $ | - | $ | 0.6 | $ | - | $ | - | $ | 0.8 | $ | 1.4 | $ | 943.8 | ||||||||||||||||||
Cost of sales | 689.5 | 1.2 | 0.3 | - | - | - | (0.1 | ) | 1.4 | 690.9 | ||||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |||||||||||||||||||
Gross profit | 252.9 | (1.2 | ) | (0.3 | ) | 0.6 | - | - | 0.9 | - | 252.9 | |||||||||||||||||||||||||
Selling, general and administrative expenses | 165.2 | 0.1 | - | (0.2 | ) | 0.7 | - | - | 0.6 | 165.8 | ||||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |||||||||||||||||||
Operating profit | 87.7 | (1.3 | ) | (0.3 | ) | 0.8 | (0.7 | ) | - | 0.9 | (0.6 | ) | 87.1 | |||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |||||||||||||||||||
Other income (expense): | ||||||||||||||||||||||||||||||||||||
Interest expense, net | (11.5 | ) | - | - | - | - | - | 0.2 | 0.2 | (11.3 | ) | |||||||||||||||||||||||||
Other, net | 0.2 | - | - | - | - | - | - | - | 0.2 | |||||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |||||||||||||||||||
(11.3 | ) | - | - | - | - | - | 0.2 | 0.2 | (11.1 | ) | ||||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |||||||||||||||||||
Income before income taxes and income (loss) from affiliates and joint ventures | 76.4 | (1.3 | ) | (0.3 | ) | 0.8 | (0.7 | ) | - | 1.1 | (0.4 | ) | 76.0 | |||||||||||||||||||||||
Income tax expense (benefit) | 21.8 | (0.2 | ) | 0.3 | 0.1 | (0.2 | ) | (1.8 | ) | 0.5 | (1.3 | ) | 20.5 | |||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |||||||||||||||||||
Income before income (loss) from affiliates and joint ventures | 54.6 | (1.1 | ) | (0.6 | ) | 0.7 | (0.5 | ) | 1.8 | 0.6 | 0.9 | 55.5 | ||||||||||||||||||||||||
Income (loss) from affiliates and joint ventures | 5.5 | - | (0.3 | ) | 0.1 | (0.2 | ) | 5.3 | ||||||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |||||||||||||||||||
Income (loss) from continuing operations | 60.1 | (1.1 | ) | (0.6 | ) | 0.7 | (0.5 | ) | 1.5 | 0.7 | 0.7 | 60.8 | ||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |||||||||||||||||||
Discontinued Operations | ||||||||||||||||||||||||||||||||||||
Income (loss) on discontinued operations | (0.9 | ) | (0.3 | ) | (0.3 | ) | (1.2 | ) | ||||||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |||||||||||||||||||
Net income (loss) | 59.2 | (1.1 | ) | (0.6 | ) | 0.7 | (0.5 | ) | 1.5 | 0.4 | 0.4 | 59.6 | ||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |||||||||||||||||||
Net income (loss) attributable to noncontrolling interests | 0.1 | - | (0.1 | ) | - | - | - | - | (0.1 | ) | - | |||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |||||||||||||||||||
Net income (loss) attributable to AMCOL shareholders | $ | 59.1 | $ | (1.1 | ) | $ | (0.5 | ) | $ | 0.7 | $ | (0.5 | ) | $ | 1.5 | $ | 0.4 | $ | 0.5 | $ | 59.6 | |||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |||||||||||||||||||
Weighted average common shares outstanding | 31.7 | 31.7 | 31.7 | |||||||||||||||||||||||||||||||||
Weighted average common and common equivalent shares outstanding | 32.1 | 32.1 | 32.1 | |||||||||||||||||||||||||||||||||
Amounts attributable to AMCOL shareholders | ||||||||||||||||||||||||||||||||||||
Income from continuing operations, net of tax | $ | 60.0 | $ | 0.8 | $ | 60.8 | ||||||||||||||||||||||||||||||
Discontinued operations, net of tax | (0.9 | ) | (0.3 | ) | (1.2 | ) | ||||||||||||||||||||||||||||||
|
|
|
|
|
| |||||||||||||||||||||||||||||||
Net income | $ | 59.1 | $ | 0.5 | $ | 59.6 | ||||||||||||||||||||||||||||||
|
|
|
|
|
| |||||||||||||||||||||||||||||||
Earnings per share attributable to AMCOL shareholders: | ||||||||||||||||||||||||||||||||||||
Basic earnings (loss) per share: | ||||||||||||||||||||||||||||||||||||
Continuing operations | $ | 1.89 | $ | 0.03 | $ | 1.92 | ||||||||||||||||||||||||||||||
Discontinued operations | (0.03 | ) | (0.01 | ) | (0.04 | ) | ||||||||||||||||||||||||||||||
|
|
|
|
|
| |||||||||||||||||||||||||||||||
Net income | $ | 1.86 | $ | 0.02 | $ | 1.88 | ||||||||||||||||||||||||||||||
|
|
|
|
|
| |||||||||||||||||||||||||||||||
Diluted earnings (loss) per share: | ||||||||||||||||||||||||||||||||||||
Continuing operations | $ | 1.87 | $ | 0.02 | $ | 1.89 | ||||||||||||||||||||||||||||||
Discontinued operations | (0.03 | ) | (0.01 | ) | (0.04 | ) | ||||||||||||||||||||||||||||||
|
|
|
|
|
| |||||||||||||||||||||||||||||||
Net income | $ | 1.84 | $ | 0.01 | $ | 1.85 | ||||||||||||||||||||||||||||||
|
|
|
|
|
|
14
Table of Contents
AMCOL INTERNATIONAL CORPORATION AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(Unaudited)
(Dollars in millions)
The effect of correcting these errors in our condensed consolidated balance sheets as of December 31, 2010 and 2011 is as follows:
ASSETS | December 31, 2010 | |||||||||||||||||||||||||||||||||||
Adjustments | ||||||||||||||||||||||||||||||||||||
Previously Reported | Spain | South Africa | Malaysia | DongMing | Tax | Other | Total | As Adjusted | ||||||||||||||||||||||||||||
Current assets: | ||||||||||||||||||||||||||||||||||||
Cash and cash equivalents | $ | 27.3 | $ | - | $ | - | $ | - | $ | - | $ | - | $ | (0.5 | ) | $ | (0.5 | ) | $ | 26.8 | ||||||||||||||||
Accounts receivable, net | 194.0 | (0.4 | ) | (1.1 | ) | (2.4 | ) | (3.9 | ) | 190.1 | ||||||||||||||||||||||||||
Inventories | 107.5 | (1.0 | ) | (0.9 | ) | (1.9 | ) | 105.6 | ||||||||||||||||||||||||||||
Prepaid expenses | 12.6 | 0.4 | 0.4 | 13.0 | ||||||||||||||||||||||||||||||||
Deferred income taxes | 5.5 | - | 5.5 | |||||||||||||||||||||||||||||||||
Income tax receivable | 8.5 | - | 8.5 | |||||||||||||||||||||||||||||||||
Other | 6.2 | - | 6.2 | |||||||||||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |||||||||||||||||||
Total current assets | 361.6 | (1.4 | ) | - | (1.1 | ) | - | - | (3.4 | ) | (5.9 | ) | 355.7 | |||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |||||||||||||||||||
Noncurrent assets: | ||||||||||||||||||||||||||||||||||||
Property, plant, equipment, and mineral rights and reserves: | ||||||||||||||||||||||||||||||||||||
Land | 11.6 | (0.7 | ) | (0.7 | ) | 10.9 | ||||||||||||||||||||||||||||||
Mineral rights | 51.4 | 13.6 | - | 13.6 | 65.0 | |||||||||||||||||||||||||||||||
Depreciable assets | 454.4 | (2.1 | ) | (2.1 | ) | 452.3 | ||||||||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |||||||||||||||||||
517.4 | - | 13.6 | - | - | - | (2.8 | ) | 10.8 | 528.2 | |||||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |||||||||||||||||||
Less: accumulated depreciation and depletion | 256.9 | (0.2 | ) | (0.2 | ) | 256.7 | ||||||||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |||||||||||||||||||
260.5 | - | 13.6 | - | - | - | (2.6 | ) | 11.0 | 271.5 | |||||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |||||||||||||||||||
Goodwill | 70.9 | 70.9 | ||||||||||||||||||||||||||||||||||
Intangible assets, net | 42.6 | (0.7 | ) | (0.7 | ) | 41.9 | ||||||||||||||||||||||||||||||
Investment in and advances to affiliates and joint ventures | 19.0 | 1.9 | 1.9 | 20.9 | ||||||||||||||||||||||||||||||||
Available-for-sale securities | 14.2 | - | 14.2 | |||||||||||||||||||||||||||||||||
Deferred income taxes | 7.6 | 1.6 | - | 1.6 | 9.2 | |||||||||||||||||||||||||||||||
Other assets | 22.7 | 0.5 | 0.3 | 0.8 | 23.5 | |||||||||||||||||||||||||||||||
- | ||||||||||||||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |||||||||||||||||||
Total noncurrent assets | 437.5 | - | 15.2 | 0.5 | - | - | (1.1 | ) | 14.6 | 452.1 | ||||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |||||||||||||||||||
Total Assets | $ | 799.1 | $ | (1.4 | ) | $ | 15.2 | $ | (0.6 | ) | $ | - | $ | - | $ | (4.5 | ) | $ | 8.7 | $ | 807.8 | |||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
15
Table of Contents
AMCOL INTERNATIONAL CORPORATION AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(Unaudited)
(Dollars in millions)
LIABILITIES AND SHAREHOLDERS’ EQUITY | December 31, 2010 | |||||||||||||||||||||||||||||||||||
Adjustments | ||||||||||||||||||||||||||||||||||||
Previously Reported | Spain | South Africa | Malaysia | DongMing | Tax | Other | Total | As Adjusted | ||||||||||||||||||||||||||||
Current liabilities: | ||||||||||||||||||||||||||||||||||||
Accounts payable | $ | 53.2 | $ | - | $ | - | $ | - | $ | (0.7 | ) | $ | (1.1 | ) | $ | (1.8 | ) | $ | 51.4 | |||||||||||||||||
Accrued income taxes | 4.1 | (0.1 | ) | (0.2 | ) | 0.2 | 1.2 | (0.1 | ) | 1.0 | 5.1 | |||||||||||||||||||||||||
Accrued liabilities | 55.2 | 0.1 | (0.1 | ) | 55.2 | |||||||||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |||||||||||||||||||
Total current liabilities | 112.5 | - | - | (0.2 | ) | (0.5 | ) | 1.2 | (1.3 | ) | (0.8 | ) | 111.7 | |||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |||||||||||||||||||
Noncurrent liabilities: | ||||||||||||||||||||||||||||||||||||
Long-term debt | 236.2 | (0.5 | ) | (0.5 | ) | 235.7 | ||||||||||||||||||||||||||||||
Pension liabilities | 21.3 | - | 21.3 | |||||||||||||||||||||||||||||||||
Deferred compensation | 8.7 | 0.3 | 0.3 | 9.0 | ||||||||||||||||||||||||||||||||
Deferred income tax | 0.4 | 15.8 | 0.4 | - | 16.2 | 16.6 | ||||||||||||||||||||||||||||||
Other long-term liabilities | 19.6 | (1.2 | ) | (1.2 | ) | 18.4 | ||||||||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |||||||||||||||||||
Total noncurrent liabilities | 286.2 | - | 15.8 | - | - | 0.4 | (1.4 | ) | 14.8 | 301.0 | ||||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |||||||||||||||||||
Shareholders’ Equity: | ||||||||||||||||||||||||||||||||||||
Common stock | 0.3 | - | 0.3 | |||||||||||||||||||||||||||||||||
Additional paid in capital | 95.1 | - | 95.1 | |||||||||||||||||||||||||||||||||
Retained earnings | 283.2 | (1.4 | ) | (0.3 | ) | (0.4 | ) | 0.5 | (1.6 | ) | (0.4 | ) | (3.6 | ) | 279.6 | |||||||||||||||||||||
Accumulated other comprehensive income (loss) | 28.9 | (0.1 | ) | (0.1 | ) | (0.2 | ) | 28.7 | ||||||||||||||||||||||||||||
Less: Treasury stock | (8.9 | ) | - | (8.9 | ) | |||||||||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |||||||||||||||||||
Total AMCOL shareholders’ equity | 398.6 | (1.4 | ) | (0.4 | ) | (0.4 | ) | 0.5 | (1.6 | ) | (0.5 | ) | (3.8 | ) | 394.8 | |||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |||||||||||||||||||
Noncontrolling interest | 1.8 | (0.2 | ) | (1.3 | ) | (1.5 | ) | 0.3 | ||||||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |||||||||||||||||||
Total equity | 400.4 | (1.4 | ) | (0.6 | ) | (0.4 | ) | 0.5 | (1.6 | ) | (1.8 | ) | (5.3 | ) | 395.1 | |||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |||||||||||||||||||
Total Liabilities and Shareholders’ Equity | $ | 799.1 | $ | (1.4 | ) | $ | 15.2 | $ | (0.6 | ) | $ | - | $ | - | $ | (4.5 | ) | $ | 8.7 | $ | 807.8 | |||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
16
Table of Contents
AMCOL INTERNATIONAL CORPORATION AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(Unaudited)
(Dollars in millions)
ASSETS | December 31, 2011 | |||||||||||||||||||||||||||||||||||
Adjustments | ||||||||||||||||||||||||||||||||||||
Previously Reported | Spain | South Africa | Malaysia | DongMing | Tax | Other | Total | As Adjusted | ||||||||||||||||||||||||||||
Current assets: | ||||||||||||||||||||||||||||||||||||
Cash and cash equivalents | $ | 23.7 | $ | - | $ | - | $ | - | $ | - | $ | - | $ | - | $ | - | $ | 23.7 | ||||||||||||||||||
Accounts receivable, net | 206.8 | (1.6 | ) | (0.7 | ) | 0.3 | (2.0 | ) | $ | 204.8 | ||||||||||||||||||||||||||
Inventories | 146.6 | (1.8 | ) | 0.2 | (0.2 | ) | (1.8 | ) | 144.8 | |||||||||||||||||||||||||||
Prepaid expenses | 15.7 | - | 15.7 | |||||||||||||||||||||||||||||||||
Deferred income taxes | 5.9 | - | 5.9 | |||||||||||||||||||||||||||||||||
Income tax receivable | 6.9 | - | 6.9 | |||||||||||||||||||||||||||||||||
Other | 6.7 | (0.6 | ) | (0.6 | ) | 6.1 | ||||||||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |||||||||||||||||||
Total current assets | 412.3 | (3.4 | ) | 0.2 | (0.7 | ) | - | - | (0.5 | ) | (4.4 | ) | 407.9 | |||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |||||||||||||||||||
Noncurrent assets: | ||||||||||||||||||||||||||||||||||||
Property, plant, equipment, and mineral rights and reserves: | ||||||||||||||||||||||||||||||||||||
Land | 13.9 | 13.9 | ||||||||||||||||||||||||||||||||||
Mineral rights | 41.9 | 10.6 | - | 10.6 | 52.5 | |||||||||||||||||||||||||||||||
Depreciable assets | 482.3 | 0.3 | 0.3 | 482.6 | ||||||||||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |||||||||||||||||||
538.1 | - | 10.6 | - | - | - | 0.3 | 10.9 | 549.0 | ||||||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |||||||||||||||||||
Less: accumulated depreciation and depletion | 275.5 | - | 275.5 | |||||||||||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |||||||||||||||||||
262.6 | - | 10.6 | - | - | - | 0.3 | 10.9 | 273.5 | ||||||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |||||||||||||||||||
Goodwill | 69.5 | 69.5 | ||||||||||||||||||||||||||||||||||
Intangible assets, net | 36.6 | - | 36.6 | |||||||||||||||||||||||||||||||||
Investment in and advances to affiliates and joint ventures | 26.4 | - | 26.4 | |||||||||||||||||||||||||||||||||
Available-for-sale securities | 3.8 | - | 3.8 | |||||||||||||||||||||||||||||||||
Deferred income taxes | 7.8 | 0.7 | - | 0.7 | 8.5 | |||||||||||||||||||||||||||||||
Other assets | 23.7 | 0.7 | - | 0.7 | 24.4 | |||||||||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |||||||||||||||||||
Total noncurrent assets | 430.4 | - | 11.3 | 0.7 | - | - | 0.3 | 12.3 | 442.7 | |||||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |||||||||||||||||||
Total Assets | $ | 842.7 | $ | (3.4 | ) | $ | 11.5 | $ | - | $ | - | $ | - | $ | (0.2 | ) | $ | 7.9 | $ | 850.6 | ||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
17
Table of Contents
AMCOL INTERNATIONAL CORPORATION AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(Unaudited)
(Dollars in millions)
LIABILITIES AND SHAREHOLDERS’ EQUITY | December 31, 2011 | |||||||||||||||||||||||||||||||||||
Adjustments | ||||||||||||||||||||||||||||||||||||
Previously Reported | Spain | South Africa | Malaysia | DongMing | Tax | Other | Total | As Adjusted | ||||||||||||||||||||||||||||
Current liabilities: | ||||||||||||||||||||||||||||||||||||
Accounts payable | $ | 56.4 | $ | - | $ | - | $ | - | $ | - | $ | - | $ | 0.1 | $ | 0.1 | $ | 56.5 | ||||||||||||||||||
Accrued income taxes | 2.7 | (0.3 | ) | 0.1 | 0.1 | (0.2 | ) | (0.3 | ) | 2.4 | ||||||||||||||||||||||||||
Accrued liabilities | 59.0 | (0.8 | ) | (0.3 | ) | - | (1.1 | ) | 57.9 | |||||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |||||||||||||||||||
Total current liabilities | 118.1 | (1.1 | ) | 0.1 | (0.3 | ) | - | 0.1 | (0.1 | ) | (1.3 | ) | 116.8 | |||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |||||||||||||||||||
Noncurrent liabilities: | ||||||||||||||||||||||||||||||||||||
Long-term debt | 260.7 | - | 260.7 | |||||||||||||||||||||||||||||||||
Pension liabilities | 34.8 | - | 34.8 | |||||||||||||||||||||||||||||||||
Deferred compensation | 8.9 | - | 8.9 | |||||||||||||||||||||||||||||||||
Deferred income tax | 0.8 | 12.6 | - | - | 0.1 | 12.7 | 13.5 | |||||||||||||||||||||||||||||
Other long-term liabilities | 19.2 | - | 19.2 | |||||||||||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |||||||||||||||||||
Total noncurrent liabilities | 324.4 | - | 12.6 | - | - | - | 0.1 | 12.7 | 337.1 | |||||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |||||||||||||||||||
Shareholders’ Equity: | ||||||||||||||||||||||||||||||||||||
Common stock | 0.3 | - | 0.3 | |||||||||||||||||||||||||||||||||
Additional paid in capital | 94.5 | (0.2 | ) | - | (0.2 | ) | 94.3 | |||||||||||||||||||||||||||||
Retained earnings | 319.5 | (2.5 | ) | (0.9 | ) | 0.3 | (0.1 | ) | 0.1 | (3.1 | ) | (316.4 | ) | |||||||||||||||||||||||
Accumulated other comprehensive income (loss) | (14.9 | ) | 0.2 | (0.3 | ) | (0.1 | ) | (15.0 | ) | |||||||||||||||||||||||||||
Less: Treasury stock | (3.4 | ) | - | (3.4 | ) | |||||||||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |||||||||||||||||||
Total AMCOL shareholders’ equity | 396.0 | (2.3 | ) | (1.1 | ) | 0.3 | - | (0.1 | ) | (0.2 | ) | (3.4 | ) | 392.6 | ||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |||||||||||||||||||
Noncontrolling interest | 4.2 | (0.1 | ) | - | (0.1 | ) | 4.1 | |||||||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |||||||||||||||||||
Total equity | 400.2 | (2.3 | ) | (1.2 | ) | 0.3 | - | (0.1 | ) | (0.2 | ) | (3.5 | ) | 396.7 | ||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |||||||||||||||||||
Total Liabilities and Shareholders’ Equity | $ | 842.7 | $ | (3.4 | ) | $ | 11.5 | $ | - | $ | - | $ | - | $ | (0.2 | ) | $ | 7.9 | $ | 850.6 | ||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
The correction of these errors had no effect on the previously reported amounts of operating, investing, and financing cash flows in our condensed consolidated statement of cash flows for the year ended December 31, 2009. The effect of correcting these errors in our condensed consolidated statements of cash flows for the years ended December 31, 2010 and 2011 is as follows:
Year Ended December 31, 2010 | ||||||||||||
Previously Reported | Adjustments | As Adjusted | ||||||||||
Net cash provided by (used in) operating activities | $ | 48.1 | $ | 0.1 | $ | 48.2 | ||||||
Net cash (used in) investing activities | (48.1 | ) | (0.6 | ) | (48.7 | ) | ||||||
Net cash provided by (used in) financing activities | (0.8 | ) | - | (0.8 | ) | |||||||
Effect of foreign currency rate changes on cash | 0.4 | - | 0.4 | |||||||||
|
|
|
|
|
| |||||||
Net increase (decrease) in cash and cash equivalents | (0.4 | ) | (0.5 | ) | (0.9 | ) | ||||||
|
|
|
|
|
| |||||||
Cash and cash equivalents at beginning of period | 27.7 | - | 27.7 | |||||||||
|
|
|
|
|
| |||||||
Cash and cash equivalents at end of period | $ | 27.3 | $ | (0.5 | ) | $ | 26.8 | |||||
|
|
|
|
|
|
18
Table of Contents
AMCOL INTERNATIONAL CORPORATION AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(Unaudited)
(Dollars in millions)
Year Ended December 31, 2011 | ||||||||||||
Previously reported | Adjustments | As Adjusted | ||||||||||
Net cash provided by (used in) operating activities | $ | 38.6 | $ | 0.2 | $ | 38.8 | ||||||
Net cash (used in) investing activities | (54.7 | ) | 0.5 | (54.2 | ) | |||||||
Net cash provided by (used in) financing activities | 11.6 | (0.2 | ) | 11.4 | ||||||||
Effect of foreign currency rate changes on cash | 0.9 | - | 0.9 | |||||||||
|
|
|
|
|
| |||||||
Net increase (decrease) in cash and cash equivalents | (3.6 | ) | 0.5 | (3.1 | ) | |||||||
|
|
|
|
|
| |||||||
Cash and cash equivalents at beginning of period | 27.3 | (0.5 | ) | 26.8 | ||||||||
|
|
|
|
|
| |||||||
Cash and cash equivalents at end of period | $ | 23.7 | $ | - | $ | 23.7 | ||||||
|
|
|
|
|
|
With regards to our consolidated statement of comprehensive income for the year ended December 31, 2009, correcting these errors reduced total comprehensive income by $2.0, reflecting the $1.8 decrease to net income as previously discussed in addition to $0.2 of losses resulting from foreign currency translation.
With regards to our consolidated statement of comprehensive income for the year ended December 31, 2010, correcting these errors reduced total comprehensive income by $1.8 resulting from the $1.8 decrease to net income as previously discussed.
With regards to our consolidated statement of comprehensive income for the year ended December 31, 2011, correcting these errors increased total comprehensive income by $0.5, reflecting the $0.4 increase to net income as previously discussed in addition to $0.1 of income resulting from foreign currency translation.
With regards to our consolidated statements of equity, our retained earnings at January 1, 2009 decreased by $0.6 resulting from the decrease to net income attributable to AMCOL shareholders for the years prior to 2009.
19
Table of Contents
AMCOL INTERNATIONAL CORPORATION AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(Unaudited)
(Dollars in millions)
Corrections to interim periods within 2011
The effect of correcting these errors in our condensed consolidated statements of operations for each of the three months ended March 31 and June 30, 2011 is as follows:
Quarter Ended March 31, 2011 | ||||||||||||||||||||||||||||||||||||
Previously | Adjustments | As Adjusted | ||||||||||||||||||||||||||||||||||
Spain | South Africa | Malaysia | DongMing | Tax | Other | Total | ||||||||||||||||||||||||||||||
Continuing Operations | ||||||||||||||||||||||||||||||||||||
Net sales | $ | 217.8 | $ | - | $ | - | $ | 0.6 | $ | - | $ | - | $ | 0.2 | $ | 0.8 | $ | 218.6 | ||||||||||||||||||
Cost of sales | 160.1 | 0.3 | 0.1 | (0.3 | ) | 0.1 | 160.2 | |||||||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |||||||||||||||||||
Gross profit | 57.7 | (0.3 | ) | (0.1 | ) | 0.6 | - | - | 0.5 | 0.7 | 58.4 | |||||||||||||||||||||||||
Selling, general and administrative expenses | 39.1 | - | 39.1 | |||||||||||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |||||||||||||||||||
Operating profit | 18.6 | (0.3 | ) | (0.1 | ) | 0.6 | - | - | 0.5 | 0.7 | 19.3 | |||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |||||||||||||||||||
Other income (expense): | ||||||||||||||||||||||||||||||||||||
Interest expense, net | (2.7 | ) | 0.1 | 0.1 | (2.6 | ) | ||||||||||||||||||||||||||||||
Other, net | (0.4 | ) | - | (0.4 | ) | |||||||||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |||||||||||||||||||
(3.1 | ) | - | - | - | - | - | 0.1 | 0.1 | (3.0 | ) | ||||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |||||||||||||||||||
Income before income taxes and income (loss) from affiliates and joint ventures | 15.5 | (0.3 | ) | (0.1 | ) | 0.6 | - | - | 0.6 | 0.8 | 16.3 | |||||||||||||||||||||||||
Income tax expense (benefit) | 4.3 | 0.1 | 0.1 | (0.5 | ) | (0.1 | ) | (0.4 | ) | 3.9 | ||||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |||||||||||||||||||
Income before income (loss) from affiliates and joint ventures | 11.2 | (0.3 | ) | (0.2 | ) | 0.5 | - | 0.5 | 0.7 | 1.2 | 12.4 | |||||||||||||||||||||||||
Income (loss) from affiliates and joint ventures | 1.1 | (0.1 | ) | - | (0.1 | ) | 1.0 | |||||||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |||||||||||||||||||
Income (loss) from continuing operations | 12.3 | (0.3 | ) | (0.2 | ) | 0.5 | - | 0.4 | 0.7 | 1.1 | 13.4 | |||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |||||||||||||||||||
Discontinued Operations | ||||||||||||||||||||||||||||||||||||
Income (loss) on discontinued operations | (0.1 | ) | - | (0.1 | ) | |||||||||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |||||||||||||||||||
Net income (loss) | 12.2 | (0.3 | ) | (0.2 | ) | 0.5 | - | 0.4 | 0.7 | 1.1 | 13.3 | |||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |||||||||||||||||||
Net income (loss) attributable to noncontrolling interests | - | - | - | |||||||||||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |||||||||||||||||||
Net income (loss) attributable to AMCOL shareholders | $ | 12.2 | $ | (0.3 | ) | $ | (0.2 | ) | $ | 0.5 | $ | - | $ | 0.4 | $ | 0.7 | $ | 1.1 | $ | 13.3 | ||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |||||||||||||||||||
Weighted average common shares outstanding | 31.5 | 31.5 | 31.5 | |||||||||||||||||||||||||||||||||
Weighted average common and common equivalent shares outstanding | 32.0 | 32.0 | 32.0 | |||||||||||||||||||||||||||||||||
Amounts attributable to AMCOL shareholders | ||||||||||||||||||||||||||||||||||||
Income from continuing operations, net of tax | $ | 12.3 | $ | 1.1 | $ | 13.4 | ||||||||||||||||||||||||||||||
Discontinued operations, net of tax | (0.1 | ) | - | (0.1 | ) | |||||||||||||||||||||||||||||||
|
|
|
|
|
| |||||||||||||||||||||||||||||||
Net income | $ | 12.2 | $ | 1.1 | $ | 13.3 | ||||||||||||||||||||||||||||||
|
|
|
|
|
| |||||||||||||||||||||||||||||||
Earnings per share attributable to AMCOL shareholders: | ||||||||||||||||||||||||||||||||||||
Basic earnings (loss) per share: | ||||||||||||||||||||||||||||||||||||
Continuing operations | $ | 0.39 | $ | 0.03 | $ | 0.42 | ||||||||||||||||||||||||||||||
Discontinued operations | - | - | - | |||||||||||||||||||||||||||||||||
|
|
|
|
|
| |||||||||||||||||||||||||||||||
Net income | $ | 0.39 | $ | 0.03 | $ | 0.42 | ||||||||||||||||||||||||||||||
|
|
|
|
|
| |||||||||||||||||||||||||||||||
Diluted earnings (loss) per share: | ||||||||||||||||||||||||||||||||||||
Continuing operations | $ | 0.38 | $ | 0.04 | $ | 0.42 | ||||||||||||||||||||||||||||||
Discontinued operations | - | - | - | |||||||||||||||||||||||||||||||||
|
|
|
|
|
| |||||||||||||||||||||||||||||||
Net income | $ | 0.38 | $ | 0.04 | $ | 0.42 | ||||||||||||||||||||||||||||||
|
|
|
|
|
|
20
Table of Contents
AMCOL INTERNATIONAL CORPORATION AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(Unaudited)
(Dollars in millions)
Quarter Ended June 30, 2011 | ||||||||||||||||||||||||||||||||||||
Adjustments | ||||||||||||||||||||||||||||||||||||
Previously Reported | Spain | South Africa | Malaysia | DongMing | Tax | Other | Total | As Adjusted | ||||||||||||||||||||||||||||
Continuing Operations | ||||||||||||||||||||||||||||||||||||
Net sales | $ | 242.8 | $ | - | $ | - | $ | - | $ | - | $ | - | $ | 0.3 | $ | 0.3 | $ | 243.1 | ||||||||||||||||||
Cost of sales | 180.7 | 0.3 | 0.1 | - | 0.4 | 181.1 | ||||||||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |||||||||||||||||||
Gross profit | 62.1 | (0.3 | ) | (0.1 | ) | - | - | - | 0.3 | (0.1 | ) | 62.0 | ||||||||||||||||||||||||
Selling, general and administrative expenses | 40.3 | 0.7 | - | 0.7 | 41.0 | |||||||||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |||||||||||||||||||
Operating profit | 21.8 | (0.3 | ) | (0.1 | ) | - | (0.7 | ) | - | 0.3 | (0.8 | ) | 21.0 | |||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |||||||||||||||||||
Other income (expense): | ||||||||||||||||||||||||||||||||||||
Interest expense, net | (2.8 | ) | 0.1 | 0.1 | (2.7 | ) | ||||||||||||||||||||||||||||||
Other, net | 0.5 | - | 0.5 | |||||||||||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |||||||||||||||||||
(2.3 | ) | - | - | - | - | - | 0.1 | 0.1 | (2.2 | ) | ||||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |||||||||||||||||||
Income before income taxes and income (loss) from affiliates and joint ventures | 19.5 | (0.3 | ) | (0.1 | ) | - | (0.7 | ) | - | 0.4 | (0.7 | ) | 18.8 | |||||||||||||||||||||||
Income tax expense (benefit) | 5.9 | 0.1 | (0.2 | ) | (0.1 | ) | (0.2 | ) | 5.7 | |||||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |||||||||||||||||||
Income before income (loss) from affiliates and joint ventures | 13.6 | (0.3 | ) | (0.2 | ) | - | (0.5 | ) | - | 0.5 | (0.5 | ) | 13.1 | |||||||||||||||||||||||
Income (loss) from affiliates and joint ventures | (0.1 | ) | - | (0.1 | ) | |||||||||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |||||||||||||||||||
Income (loss) from continuing operations | 13.5 | (0.3 | ) | (0.2 | ) | - | (0.5 | ) | - | 0.5 | (0.5 | ) | 13.0 | |||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |||||||||||||||||||
Discontinued Operations | ||||||||||||||||||||||||||||||||||||
Income (loss) on discontinued operations | 0.2 | - | 0.2 | |||||||||||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |||||||||||||||||||
Net income (loss) | 13.7 | (0.3 | ) | (0.2 | ) | - | (0.5 | ) | - | 0.5 | (0.5 | ) | 13.2 | |||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |||||||||||||||||||
Net income (loss) attributable to noncontrolling interests | - | - | - | |||||||||||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |||||||||||||||||||
Net income (loss) attributable to AMCOL shareholders | $ | 13.7 | $ | (0.3 | ) | $ | (0.2 | ) | $ | - | $ | (0.5 | ) | $ | - | $ | 0.5 | $ | (0.5 | ) | $ | 13.2 | ||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |||||||||||||||||||
Weighted average common shares outstanding | 31.7 | 31.7 | 31.7 | |||||||||||||||||||||||||||||||||
Weighted average common and common equivalent shares outstanding | 32.2 | 32.2 | 32.2 | |||||||||||||||||||||||||||||||||
Amounts attributable to AMCOL shareholders | ||||||||||||||||||||||||||||||||||||
Income from continuing operations, net of tax | $ | 13.5 | $ | (0.5 | ) | $ | 13.0 | |||||||||||||||||||||||||||||
Discontinued operations, net of tax | 0.2 | - | 0.2 | |||||||||||||||||||||||||||||||||
|
|
|
|
|
| |||||||||||||||||||||||||||||||
Net income | $ | 13.7 | $ | (0.5 | ) | $ | 13.2 | |||||||||||||||||||||||||||||
|
|
|
|
|
| |||||||||||||||||||||||||||||||
Earnings per share attributable to AMCOL shareholders: | ||||||||||||||||||||||||||||||||||||
Basic earnings (loss) per share: | ||||||||||||||||||||||||||||||||||||
Continuing operations | $ | 0.42 | $ | (0.01 | ) | $ | 0.41 | |||||||||||||||||||||||||||||
Discontinued operations | 0.01 | - | 0.01 | |||||||||||||||||||||||||||||||||
|
|
|
|
|
| |||||||||||||||||||||||||||||||
Net income | $ | 0.43 | $ | (0.01 | ) | $ | 0.42 | |||||||||||||||||||||||||||||
|
|
|
|
|
| |||||||||||||||||||||||||||||||
Diluted earnings (loss) per share: | ||||||||||||||||||||||||||||||||||||
Continuing operations | $ | 0.42 | $ | (0.02 | ) | $ | 0.40 | |||||||||||||||||||||||||||||
Discontinued operations | 0.01 | - | 0.01 | |||||||||||||||||||||||||||||||||
|
|
|
|
|
| |||||||||||||||||||||||||||||||
Net income | $ | 0.43 | $ | (0.02 | ) | $ | 0.41 | |||||||||||||||||||||||||||||
|
|
|
|
|
|
21
Table of Contents
AMCOL INTERNATIONAL CORPORATION AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(Unaudited)
(Dollars in millions)
The effect of correcting these errors in our condensed consolidated statement of operations for the six months ended June 30, 2011 is as follows:
Six Months Ended June 30, 2011 | ||||||||||||||||||||||||||||||||||||
Adjustments | ||||||||||||||||||||||||||||||||||||
Previously Reported | Spain | South Africa | Malaysia | DongMing | Tax | Other | Total | As Adjusted | ||||||||||||||||||||||||||||
Continuing Operations | ||||||||||||||||||||||||||||||||||||
Net sales | $ | 460.6 | $ | - | $ | - | $ | 0.6 | $ | - | $ | - | $ | 0.5 | $ | 1.1 | $ | 461.7 | ||||||||||||||||||
Cost of sales | 340.8 | 0.6 | 0.2 | - | - | - | (0.3 | ) | 0.5 | 341.3 | ||||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |||||||||||||||||||
Gross profit | 119.8 | (0.6 | ) | (0.2 | ) | 0.6 | - | - | 0.8 | 0.6 | 120.4 | |||||||||||||||||||||||||
Selling, general and administrative expenses | 79.4 | - | - | - | 0.7 | - | - | 0.7 | 80.1 | |||||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |||||||||||||||||||
Operating profit | 40.4 | (0.6 | ) | (0.2 | ) | 0.6 | (0.7 | ) | - | 0.8 | (0.1 | ) | 40.3 | |||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |||||||||||||||||||
Other income (expense): | ||||||||||||||||||||||||||||||||||||
Interest expense, net | (5.5 | ) | - | - | - | - | - | 0.2 | 0.2 | (5.3 | ) | |||||||||||||||||||||||||
Other, net | 0.1 | - | - | - | - | - | - | - | 0.1 | |||||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |||||||||||||||||||
(5.4 | ) | - | - | - | - | - | 0.2 | 0.2 | (5.2 | ) | ||||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |||||||||||||||||||
Income before income taxes and income (loss) from affiliates and joint ventures | 35.0 | (0.6 | ) | (0.2 | ) | 0.6 | (0.7 | ) | - | 1.0 | 0.1 | 35.1 | ||||||||||||||||||||||||
Income tax expense (benefit) | 10.2 | - | 0.2 | 0.1 | (0.2 | ) | (0.5 | ) | (0.2 | ) | (0.6 | ) | 9.6 | |||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |||||||||||||||||||
Income before income (loss) from affiliates and joint ventures | 24.8 | (0.6 | ) | (0.4 | ) | 0.5 | (0.5 | ) | 0.5 | 1.2 | 0.7 | 25.5 | ||||||||||||||||||||||||
Income (loss) from affiliates and joint ventures | 1.0 | - | - | - | - | (0.1 | ) | - | (0.1 | ) | 0.9 | |||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |||||||||||||||||||
Income (loss) from continuing operations | 25.8 | (0.6 | ) | (0.4 | ) | 0.5 | (0.5 | ) | 0.4 | 1.2 | 0.6 | 26.4 | ||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |||||||||||||||||||
Discontinued Operations | ||||||||||||||||||||||||||||||||||||
Income (loss) on discontinued operations | 0.1 | - | - | - | - | - | - | - | 0.1 | |||||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |||||||||||||||||||
Net income (loss) | 25.9 | (0.6 | ) | (0.4 | ) | 0.5 | (0.5 | ) | 0.4 | 1.2 | 0.6 | 26.5 | ||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |||||||||||||||||||
Net income (loss) attributable to noncontrolling interests | - | - | - | - | - | - | - | - | - | |||||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |||||||||||||||||||
Net income (loss) attributable to AMCOL shareholders | $ | 25.9 | $ | (0.6 | ) | $ | (0.4 | ) | $ | 0.5 | $ | (0.5 | ) | $ | 0.4 | $ | 1.2 | $ | 0.6 | $ | 26.5 | |||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |||||||||||||||||||
Weighted average common shares outstanding | 31.6 | 31.6 | 31.6 | |||||||||||||||||||||||||||||||||
Weighted average common and common equivalent shares outstanding | 32.1 | 32.1 | 32.1 | |||||||||||||||||||||||||||||||||
Amounts attributable to AMCOL shareholders | ||||||||||||||||||||||||||||||||||||
Income from continuing operations, net of tax | $ | 25.8 | $ | 0.6 | $ | 26.4 | ||||||||||||||||||||||||||||||
Discontinued operations, net of tax | 0.1 | - | 0.1 | |||||||||||||||||||||||||||||||||
|
|
|
|
|
| |||||||||||||||||||||||||||||||
Net income | $ | 25.9 | $ | 0.6 | $ | 26.5 | ||||||||||||||||||||||||||||||
|
|
|
|
|
| |||||||||||||||||||||||||||||||
Earnings per share attributable to AMCOL shareholders: | ||||||||||||||||||||||||||||||||||||
Basic earnings (loss) per share: | ||||||||||||||||||||||||||||||||||||
Continuing operations | $ | 0.82 | $ | 0.02 | $ | 0.84 | ||||||||||||||||||||||||||||||
Discontinued operations | - | - | - | |||||||||||||||||||||||||||||||||
|
|
|
|
|
| |||||||||||||||||||||||||||||||
Net income | $ | 0.82 | $ | 0.02 | $ | 0.84 | ||||||||||||||||||||||||||||||
|
|
|
|
|
| |||||||||||||||||||||||||||||||
Diluted earnings (loss) per share: | ||||||||||||||||||||||||||||||||||||
Continuing operations | $ | 0.81 | $ | 0.02 | $ | 0.83 | ||||||||||||||||||||||||||||||
Discontinued operations | - | - | - | |||||||||||||||||||||||||||||||||
|
|
|
|
|
| |||||||||||||||||||||||||||||||
Net income | $ | 0.81 | $ | 0.02 | $ | 0.83 | ||||||||||||||||||||||||||||||
|
|
|
|
|
|
With regards to our condensed consolidated statement of comprehensive income for the three months ended March 31, 2011, correcting these errors increased total comprehensive income by $1.0, reflecting the $1.1 increase to net income as previously discussed in addition to $0.1 of losses resulting from foreign currency translation.
With regards to our condensed consolidated statement of comprehensive income for the three months ended June 30, 2011, correcting these errors reduced total comprehensive income by $0.6 resulting from the decrease to net income as previously discussed in addition to $0.1 of losses resulting from foreign currency translation.
22
Table of Contents
AMCOL INTERNATIONAL CORPORATION AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(Unaudited)
(Dollars in millions)
With regards to our condensed consolidated statement of comprehensive income for the six months ended June 30, 2011, correcting these errors increased total comprehensive income by $0.4, reflecting the $0.6 increase to net income as previously discussed in addition to $0.2 of losses resulting from foreign currency translation.
The effect of correcting these errors in our condensed consolidated statements of cash flows for the three months ended March 31, 2011 and six months ended June 30, 2011 is as follows:
Three Months Ended March 31, 2011 | Six Months Ended June 30, 2011 | |||||||||||||||||||||||
Previously Reported | Adjustments | As Adjusted | Previously Reported | Adjustments | As Adjusted | |||||||||||||||||||
Net cash provided by (used in) operating activities | $ | 10.3 | $ | - | $ | 10.3 | $ | 13.9 | $ | 0.1 | $ | 14.0 | ||||||||||||
Net cash (used in) investing activities | (10.3 | ) | 0.5 | (9.8 | ) | (24.4 | ) | 0.5 | (23.9 | ) | ||||||||||||||
Net cash provided by (used in) financing activities | (6.3 | ) | - | (6.3 | ) | 0.4 | (0.1 | ) | 0.3 | |||||||||||||||
Effect of foreign currency rate changes on cash | 0.2 | - | 0.2 | 0.7 | - | 0.7 | ||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
| |||||||||||||
Net increase (decrease) in cash and cash equivalents | (6.1 | ) | 0.5 | (5.6 | ) | (9.4 | ) | 0.5 | (8.9 | ) | ||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
| |||||||||||||
Cash and cash equivalents at beginning of period | 27.3 | (0.5 | ) | 26.8 | 27.3 | (0.5 | ) | 26.8 | ||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
| |||||||||||||
Cash and cash equivalents at end of period | $ | 21.2 | $ | - | $ | 21.2 | $ | 17.9 | $ | - | $ | 17.9 | ||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
23
Table of Contents
AMCOL INTERNATIONAL CORPORATION AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(Unaudited)
(Dollars in millions)
Corrections to three months ended March 31, 2012
The effect of correcting these errors in our condensed consolidated statement of operations for the three months ended March 31, 2012 is as follows:
Quarter Ended March 31, 2012 | ||||||||||||||||||||||||||||||||
Previously | Adjustments | As | ||||||||||||||||||||||||||||||
Spain | South Africa | Malaysia | Tax | Other | Total | |||||||||||||||||||||||||||
Continuing Operations | ||||||||||||||||||||||||||||||||
Net sales | $ | 235.8 | $ | - | $ | - | $ | - | $ | - | $ | (0.2 | ) | $ | (0.2 | ) | $ | 235.6 | ||||||||||||||
Cost of sales | 170.7 | 0.4 | 0.1 | (0.2 | ) | 0.3 | 171.0 | |||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |||||||||||||||||
Gross profit | 65.1 | (0.4 | ) | (0.1 | ) | - | - | - | (0.5 | ) | 64.6 | |||||||||||||||||||||
Selling, general and administrative expenses | 43.6 | (0.2 | ) | (0.1 | ) | (0.3 | ) | 43.3 | ||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |||||||||||||||||
Operating profit | 21.5 | (0.2 | ) | (0.1 | ) | - | - | 0.1 | (0.2 | ) | 21.3 | |||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |||||||||||||||||
Other income (expense): | ||||||||||||||||||||||||||||||||
Interest expense, net | (2.7 | ) | - | (2.7 | ) | |||||||||||||||||||||||||||
Other, net | (2.1 | ) | (0.1 | ) | (0.1 | ) | (2.2 | ) | ||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |||||||||||||||||
(4.8 | ) | - | - | - | - | (0.1 | ) | (0.1 | ) | (4.9 | ) | |||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |||||||||||||||||
Income before income taxes and income (loss) from affiliates and joint ventures | 16.7 | (0.2 | ) | (0.1 | ) | - | - | - | (0.3 | ) | 16.4 | |||||||||||||||||||||
Income tax expense (benefit) | 4.8 | 0.1 | (0.1 | ) | (0.3 | ) | (0.2 | ) | (0.5 | ) | 4.3 | |||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |||||||||||||||||
Income before income (loss) from affiliates and joint ventures | 11.9 | (0.3 | ) | - | - | 0.3 | 0.2 | 0.2 | 12.1 | |||||||||||||||||||||||
Income (loss) from affiliates and joint ventures | 1.2 | - | 1.2 | |||||||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |||||||||||||||||
Income (loss) from continuing operations | 13.1 | (0.3 | ) | - | - | 0.3 | 0.2 | 0.2 | 13.3 | |||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |||||||||||||||||
Discontinued Operations | ||||||||||||||||||||||||||||||||
Income (loss) on discontinued operations | (0.2 | ) | 0.2 | 0.2 | - | |||||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |||||||||||||||||
Net income (loss) | 12.9 | (0.3 | ) | - | - | 0.3 | 0.4 | 0.4 | 13.3 | |||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |||||||||||||||||
Net income (loss) attributable to noncontrolling interests | 0.1 | - | 0.1 | |||||||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |||||||||||||||||
Net income (loss) attributable to AMCOL shareholders | $ | 12.8 | $ | (0.3 | ) | $ | - | $ | - | $ | 0.3 | $ | 0.4 | $ | 0.4 | $ | 13.2 | |||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |||||||||||||||||
Weighted average common shares outstanding | 32.0 | 32.0 | 32.0 | |||||||||||||||||||||||||||||
Weighted average common and common equivalent shares outstanding | 32.3 | 32.3 | 32.3 | |||||||||||||||||||||||||||||
Amounts attributable to AMCOL shareholders | ||||||||||||||||||||||||||||||||
Income from continuing operations, net of tax | $ | 13.0 | $ | 0.2 | $ | 13.2 | ||||||||||||||||||||||||||
Discontinued operations, net of tax | (0.2 | ) | 0.2 | - | ||||||||||||||||||||||||||||
|
|
|
|
|
| |||||||||||||||||||||||||||
Net income | $ | 12.8 | $ | 0.4 | $ | 13.2 | ||||||||||||||||||||||||||
|
|
|
|
|
| |||||||||||||||||||||||||||
Earnings per share attributable to AMCOL shareholders: | ||||||||||||||||||||||||||||||||
Basic earnings (loss) per share: | ||||||||||||||||||||||||||||||||
Continuing operations | $ | 0.41 | $ | - | $ | 0.41 | ||||||||||||||||||||||||||
Discontinued operations | (0.01 | ) | 0.01 | - | ||||||||||||||||||||||||||||
|
|
|
|
|
| |||||||||||||||||||||||||||
Net income | $ | 0.40 | $ | 0.01 | $ | 0.41 | ||||||||||||||||||||||||||
|
|
|
|
|
| |||||||||||||||||||||||||||
Diluted earnings (loss) per share: | ||||||||||||||||||||||||||||||||
Continuing operations | $ | 0.41 | $ | - | $ | 0.41 | ||||||||||||||||||||||||||
Discontinued operations | (0.01 | ) | 0.01 | - | ||||||||||||||||||||||||||||
|
|
|
|
|
| |||||||||||||||||||||||||||
Net income | $ | 0.40 | $ | 0.01 | $ | 0.41 | ||||||||||||||||||||||||||
|
|
|
|
|
|
With regards to our consolidated statement of comprehensive income for the three months ended March 31, 2012, correcting these errors increased total comprehensive income by $0.3, reflecting the $0.4 increase to net income as previously discussed in addition to $0.1 of losses resulting from foreign currency translation.
24
Table of Contents
AMCOL INTERNATIONAL CORPORATION AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(Unaudited)
(Dollars in millions)
The effect of correcting these errors in our condensed consolidated statements of cash flows for the three months ended March 31, 2012 is as follows:
Three Months Ended March 31, 2012 | ||||||||||||
Previously Reported | Adjustments | As Adjusted | ||||||||||
Net cash provided by (used in) operating activities | $ | 20.6 | $ | 0.3 | $ | 20.9 | ||||||
Net cash (used in) investing activities | (15.3 | ) | (0.1 | ) | (15.4 | ) | ||||||
Net cash provided by (used in) financing activities | (12.1 | ) | (0.2 | ) | (12.3 | ) | ||||||
|
|
|
|
|
| |||||||
Net increase (decrease) in cash and cash equivalents | (6.8 | ) | - | (6.8 | ) | |||||||
|
|
|
|
|
| |||||||
Cash and cash equivalents at beginning of period | 23.7 | - | 23.7 | |||||||||
|
|
|
|
|
| |||||||
Cash and cash equivalents at end of period | $ | 16.9 | $ | - | $ | 16.9 | ||||||
|
|
|
|
|
|
Note 3: EARNINGS PER SHARE
The following table provides further share information used in computing our earnings per share for the periods presented herein. Basic earnings per share was computed by dividing net income attributable to AMCOL shareholders by the weighted average number of common shares outstanding during each period. Diluted earnings per share was computed by dividing net income attributable to AMCOL shareholders by the weighted average common shares outstanding after consideration of the dilutive effect of stock compensation awards outstanding during each period.
Six Months Ended June 30, | Three Months Ended June 30, | |||||||||||||||
2012 | 2011 | 2012 | 2011 | |||||||||||||
Weighted average number of common shares outstanding | 32,005,514 | 31,611,265 | 32,035,503 | 31,706,082 | ||||||||||||
Dilutive impact of stock based compensation | 305,042 | 487,247 | 298,002 | 499,683 | ||||||||||||
|
|
|
|
|
|
|
| |||||||||
Weighted average number of common and common equivalent shares outstanding for the period | 32,310,556 | 32,098,512 | 32,333,505 | 32,205,765 | ||||||||||||
|
|
|
|
|
|
|
| |||||||||
Number of common shares outstanding at the end of the period | 31,920,554 | 31,645,359 | 31,920,554 | 31,645,359 | ||||||||||||
|
|
|
|
|
|
|
| |||||||||
Weighted average number of anti-dilutive shares excluded from the computation of diluted earnings per share | 646,046 | 175,614 | 701,099 | 230,665 | ||||||||||||
|
|
|
|
|
|
|
|
25
Table of Contents
AMCOL INTERNATIONAL CORPORATION AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(Unaudited)
(Dollars in millions)
Note 4: ADDITIONAL BALANCE SHEET INFORMATION
Our inventories at June 30, 2012 and December 31, 2011 are comprised of the following components:
June 30, 2012 | December 31, 2011 | |||||||
Crude stockpile inventories | $ | 58.3 | $ | 54.5 | ||||
In-process and finished goods inventories | 61.5 | 64.4 | ||||||
Other raw material, container, and supplies inventories | 26.2 | 25.9 | ||||||
|
|
|
| |||||
$ | 146.0 | $ | 144.8 | |||||
|
|
|
|
We mine various minerals using a surface mining process that requires the removal of overburden. In certain areas and under various governmental regulations, we are obligated to restore the land comprising each mining site to its original condition at the completion of the mining activity. We include an estimate of this reclamation liability in our condensed consolidated balance sheets; it is adjusted to reflect the passage of time and changes in estimated future cash outflows. A reconciliation of the activity within our reclamation liability is as follows:
Six Months Ended June 30, | ||||||||
2012 | 2011 | |||||||
Balance at beginning of period | $ | 9.3 | $ | 7.5 | ||||
Settlement of obligations | (3.2 | ) | (1.2 | ) | ||||
Liabilities incurred and accretion expense | 2.9 | 2.0 | ||||||
Foreign currency | 0.3 | - | ||||||
|
|
|
| |||||
Balance at end of period | $ | 9.3 | $ | 8.3 | ||||
|
|
|
|
Note 5: BUSINESS SEGMENT INFORMATION
As previously mentioned, we operate in five segments. We determine our operating segments based on the discrete financial information that is regularly evaluated by our chief operating decision maker, our President and Chief Executive Officer, in deciding how to allocate resources and in assessing performance. Intersegment sales are not material and are eliminated in the corporate segment. Our reportable measure of profit or loss for each segment is operating profit, which is defined as net sales less cost of sales and selling, general and administrative expenses related to a segment’s operations. The costs deducted to arrive at operating profit do not include several items, such as net interest expense or income taxes. Segment assets are those assets used in the operations of that segment. Corporate assets include assets used in the operation of this segment as well as those used by or shared amongst our segments, including certain cash and equivalent assets, certain fixed assets, assets associated with certain employee benefit plans, and other miscellaneous assets.
26
Table of Contents
AMCOL INTERNATIONAL CORPORATION AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(Unaudited)
(Dollars in millions)
The following tables set forth certain financial information by segment:
Six Months Ended June 30, | Three Months Ended June 30, | |||||||||||||||
2012 | 2011 | 2012 | 2011 | |||||||||||||
Net sales: | ||||||||||||||||
Minerals and materials | $ | 256.3 | $ | 234.1 | $ | 131.1 | $ | 118.3 | ||||||||
Environmental | 112.4 | 126.5 | 61.3 | 74.8 | ||||||||||||
Oilfield services | 116.4 | 90.7 | 61.1 | 45.1 | ||||||||||||
Transportation | 22.8 | 27.5 | 11.7 | 14.8 | ||||||||||||
Intersegment sales | (14.9 | ) | (17.1 | ) | (7.8 | ) | (9.9 | ) | ||||||||
|
|
|
|
|
|
|
| |||||||||
Total | $ | 493.0 | $ | 461.7 | $ | 257.4 | $ | 243.1 | ||||||||
|
|
|
|
|
|
|
| |||||||||
Operating profit (loss): | ||||||||||||||||
Minerals and materials | $ | 44.0 | $ | 29.5 | $ | 22.5 | $ | 13.5 | ||||||||
Environmental | 7.0 | 10.1 | 6.2 | 8.0 | ||||||||||||
Oilfield services | 12.5 | 9.5 | 7.7 | 3.7 | ||||||||||||
Transportation | 0.5 | 1.2 | 0.3 | 0.7 | ||||||||||||
Corporate | (11.7 | ) | (10.0 | ) | (5.7 | ) | (4.9 | ) | ||||||||
|
|
|
|
|
|
|
| |||||||||
Total | $ | 52.3 | $ | 40.3 | $ | 31.0 | $ | 21.0 | ||||||||
|
|
|
|
|
|
|
| |||||||||
As of June 30, 2012 | As of Dec. 31, 2011 | |||||||||||||||
Assets: | ||||||||||||||||
Minerals and materials | $ | 436.9 | $ | 431.1 | ||||||||||||
Environmental | 169.4 | 160.0 | ||||||||||||||
Oilfield services | 197.7 | 194.7 | ||||||||||||||
Transportation | 3.8 | 3.9 | ||||||||||||||
Corporate | 61.2 | 60.9 | ||||||||||||||
|
|
|
| |||||||||||||
Total | $ | 869.0 | $ | 850.6 | ||||||||||||
|
|
|
|
27
Table of Contents
AMCOL INTERNATIONAL CORPORATION AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(Unaudited)
(Dollars in millions)
Six Months Ended June 30, | Three Months Ended June 30, | |||||||||||||||
2012 | 2011 | 2012 | 2011 | |||||||||||||
Depreciation, depletion and amortization: | ||||||||||||||||
Minerals and materials | $ | 9.5 | $ | 10.0 | $ | 4.9 | $ | 5.4 | ||||||||
Environmental | 2.7 | 2.6 | 1.3 | 1.3 | ||||||||||||
Oilfield services | 8.2 | 6.1 | 4.2 | 3.1 | ||||||||||||
Transportation | - | - | - | - | ||||||||||||
Corporate | 1.4 | 1.2 | 0.7 | 0.6 | ||||||||||||
|
|
|
|
|
|
|
| |||||||||
Total | $ | 21.8 | $ | 19.9 | $ | 11.1 | $ | 10.4 | ||||||||
|
|
|
|
|
|
|
| |||||||||
Capital expenditures: | ||||||||||||||||
Minerals and materials | $ | 10.8 | $ | 9.1 | $ | 4.3 | $ | 6.3 | ||||||||
Environmental | 6.3 | 1.8 | 3.7 | 1.1 | ||||||||||||
Oilfield services | 13.0 | 12.9 | 7.0 | 6.5 | ||||||||||||
Transportation | - | 0.2 | - | 0.2 | ||||||||||||
Corporate | 2.1 | 0.8 | 0.6 | 0.3 | ||||||||||||
|
|
|
|
|
|
|
| |||||||||
Total | $ | 32.2 | $ | 24.8 | $ | 15.6 | $ | 14.4 | ||||||||
|
|
|
|
|
|
|
| |||||||||
Research and development (income) expense: | ||||||||||||||||
Minerals and materials | $ | 3.6 | $ | 3.1 | $ | 1.9 | $ | 1.5 | ||||||||
Environmental | 1.2 | 1.1 | 0.6 | 0.6 | ||||||||||||
Oilfield services | 0.4 | 0.2 | 0.3 | 0.2 | ||||||||||||
Corporate | (0.1 | ) | (0.2 | ) | (0.2 | ) | - | |||||||||
|
|
|
|
|
|
|
| |||||||||
Total | $ | 5.1 | $ | 4.2 | $ | 2.6 | $ | 2.3 | ||||||||
|
|
|
|
|
|
|
|
Note 6: EMPLOYEE BENEFIT PLANS
Our net periodic benefit cost for our defined benefit pension plan was as follows:
Six Months Ended June 30, | Three Months Ended June 30, | |||||||||||||||
2012 | 2011 | 2012 | 2011 | |||||||||||||
Service cost | $ | 0.9 | $ | 0.8 | $ | 0.5 | $ | 0.4 | ||||||||
Interest cost | 1.3 | 1.3 | 0.6 | 0.7 | ||||||||||||
Expected return on plan assets | (1.3 | ) | (1.4 | ) | (0.7 | ) | (0.7 | ) | ||||||||
Amortization of acturial loss | 0.5 | - | 0.3 | - | ||||||||||||
|
|
|
|
|
|
|
| |||||||||
Net periodic benefit cost | $ | 1.4 | $ | 0.7 | $ | 0.7 | $ | 0.4 | ||||||||
|
|
|
|
|
|
|
|
As previously disclosed in our Annual Report on Form 10-K for the year ended December 31, 2011, we expect to contribute $1.7 to our pension plan in 2012, of which $0.8 was contributed in the six months ended June 30, 2012.
28
Table of Contents
AMCOL INTERNATIONAL CORPORATION AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(Unaudited)
(Dollars in millions)
Note 7: INCOME TAXES
Our effective tax rate for the six months ended June 30, 2012 and 2011 was 26.9% and 27.4%, respectively. For both periods, the rate differs from the U.S. federal statutory rate of 35.0% largely due to depletion deductions, changes in tax reserves in 2011, and differences in local tax rates on the income from our foreign subsidiaries.
In the normal course of business, we are subject to examination by taxing authorities throughout the world. With few exceptions, we are no longer subject to income tax examinations by tax authorities for years prior to 2004. In general, the United States Internal Revenue Service (“IRS”) has examined our federal income tax returns for all years through 2009.
Note 8: DERIVATIVE INSTRUMENTS AND HEDGING ACTIVITIES
As a multinational corporation with operations throughout the world, we are subject to certain market risks. We use a variety of practices to manage these market risks, including, when considered appropriate, derivative financial instruments. We use derivative financial instruments only for risk management and not for trading or speculative purposes.
The following table sets forth the fair values of our derivative instruments and where they are recorded within our condensed consolidated balance sheet:
Liability Derivatives | Balance Sheet Location | Fair Value as of | ||||||||
June 30, 2012 | December 31, 2011 | |||||||||
Derivatives designated as hedging instruments:
| ||||||||||
Interest rate swaps | Other long-term liabilities | $ | (9.0 | ) | $ | (9.0 | ) |
Cash flow hedges
Derivatives in Cash Flow Hedging Relationships | Amount of Gain or (Loss) Recognized in Other Comprehensive Income on Derivatives (Effective Portion) | |||||||||||||||
Six Months Ended June 30, | Three Months Ended June 30, | |||||||||||||||
2012 | 2011 | 2012 | 2011 | |||||||||||||
Interest rate swaps, net of tax | $ | - | $ | (0.3 | ) | $ | (0.2 | ) | $ | (0.8 | ) |
29
Table of Contents
AMCOL INTERNATIONAL CORPORATION AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(Unaudited)
(Dollars in millions)
We use interest rate swaps to manage floating interest rate risk on debt securities. Interest rate differentials are paid or received on these arrangements over the life of the swap. As of June 30, 2012 and 2011, we had interest rate swaps outstanding which effectively hedge the variable interest rate on $30.0 of our senior notes to a fixed rate of 5.6% per annum and $33.0 of our borrowings under our revolving credit agreement to a fixed rate of 3.3% per annum, plus credit spread.
Other
We are exposed to potential gains or losses from foreign currency fluctuations affecting net investments and earnings denominated in foreign currencies. We are particularly sensitive to currency exchange rate fluctuations for the following currencies: Euro, pound sterling (GBP), Polish zloty (PLN), South African rand (ZAR), Danish kroner (DKK), Swiss franc (SEK), Indian rupee (INR), Thai baht (THB), Turkish lira (TRY), Chinese renminbi (CYN), and Malaysian ringgit (MYR). When considered appropriate, we enter into foreign exchange derivative contracts to mitigate the risk of fluctuations on these exposures.
We have not designated our foreign currency derivative contracts for hedge accounting treatment and therefore, changes in fair value of these contracts are recorded in earnings as follows:
Derivatives Not Designated as Hedging Instruments | Location of Gain or (Loss) Recognized in Income on Derivatives | Amount of Gain or (Loss) Recognized in Income on Derivatives | ||||||||||||||||
Six Months Ended June 30, | Three Months Ended June 30, | |||||||||||||||||
2012 | 2011 | 2012 | 2011 | |||||||||||||||
Foreign currency exchange contracts | Other, net | $ | 0.3 | $ | (1.3 | ) | $ | 0.7 | $ | (0.2 | ) |
We did not have any significant foreign exchange derivative instruments outstanding as of June 30, 2012 or December 31, 2011.
Note 9: FAIR VALUE MEASUREMENTS
Fair value is the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. Our calculation of the fair value of derivative instruments includes several assumptions. The fair value hierarchy prioritizes these input assumptions in the following three broad levels:
Level 1 – Valuation is based on quoted prices (unadjusted) in active markets for identical assets or liabilities we have the ability to access at the measurement date.
Level 2 – Valuation is based on quoted prices for similar assets or liabilities in active markets, quoted prices for identical or similar assets or liabilities in markets that are not active and model based valuations for which all significant inputs are observable in the market.
30
Table of Contents
AMCOL INTERNATIONAL CORPORATION AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(Unaudited)
(Dollars in millions)
Level 3 – Valuation is based on model based techniques that use unobservable inputs for the asset or liability. These inputs reflect our own beliefs about the assumptions market participants would use in pricing the asset or liability.
The following tables categorize our fair value instruments, measured on a recurring basis, according to the assumptions used to calculate those values:
Fair Value Measurements Using | ||||||||||||||||||||||||
Description | Asset / (Liability) Balance at 6/30/2012 | Quoted Prices in (Level 1) | Significant Other Observable Inputs (Level 2) | Significant (Level 3) | ||||||||||||||||||||
Interest rate swaps | $ | (9.0 | ) | $ | - | $ | (9.0 | ) | $ | - | ||||||||||||||
Available-for-sale securities | 3.0 | 3.0 | - | - | ||||||||||||||||||||
Deferred compensation plan assets | 8.8 | - | 8.8 | - | ||||||||||||||||||||
Supplementary pension plan assets | 7.9 | - | 7.9 | - |
Fair Value Measurements Using | ||||||||||||||||||||||||
Description | Asset / (Liability) Balance at 12/31/2011 | Quoted Prices in (Level 1) | Significant Other Observable Inputs (Level 2) | Significant (Level 3) | ||||||||||||||||||||
Interest rate swaps | $ | (9.0 | ) | $ | - | $ | (9.0 | ) | $ | - | ||||||||||||||
Available-for-sale securities | 3.8 | 3.8 | - | - | ||||||||||||||||||||
Deferred compensation plan assets | 8.0 | - | 8.0 | - | ||||||||||||||||||||
Supplementary pension plan assets | 7.6 | - | 7.6 | - |
Interest rate swaps are valued using discounted cash flows. The key input used is the LIBOR swap rate, which is observable at commonly quoted intervals for the full term of the swap. Available-for-sale securities are valued using quoted market prices. Deferred compensation and supplemental pension plan assets are valued using quoted prices for similar assets in active markets.
31
Table of Contents
AMCOL INTERNATIONAL CORPORATION AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(Unaudited)
(Dollars in millions)
The carrying value of our long-term debt approximates its fair value as the interest rate is near the current market rate yield. The fair value of our long-term debt is determined using current applicable rates for similar instruments as of the balance sheet date. The long-term debt is a Level 3 liability within the fair value category.
Note 10: NONCONTROLLING INTEREST
In January 2011, we acquired the remaining noncontrolling interest in Volclay South Africa (Proprietary) Limited, a part of our chromite operations, for approximately $5.6.
In February 2011, we sold 26% of our interest in Batlhako Mining Limited (“Batlhako”) to Vengawave (Proprietary) Limited, which is a Black Economic Empowerment enterprise (a “BEE”) in the Republic of South Africa. Batlhako is our subsidiary dedicated strictly to mining chromite ore and selling it to one of our other subsidiaries for further processing and sale to the end customer. South African law requires that we have a BEE as a partner in our mining operations, and this transaction was consummated to comply with those regulations.
The following table sets forth the effects of these transactions on equity attributable to AMCOL’s shareholders:
Six Months Ended June 30, | ||||||||
2012 | 2011 | |||||||
Net income attributable to AMCOL shareholders | $ | 34.8 | $ | 26.5 | ||||
Transfers from noncontrolling interest: | ||||||||
Decrease in additional paid-in capital for purchase of the remaining noncontrolling interest in Volclay South Africa (Proprietary) Limited | - | (5.4 | ) | |||||
Decrease in additional paid-in capital for transfer of 26% interest in Batlhako | - | (3.4 | ) | |||||
|
|
|
| |||||
Change from net income attributable to AMCOL shareholders and transfers from noncontrolling interest | $ | 34.8 | $ | 17.7 | ||||
|
|
|
|
Note 11: CONTINGENCIES
We are party to a number of lawsuits arising in the normal course of business. Since the mid-1980s, we and/or our subsidiaries have been named as one of a number of defendants in product liability lawsuits relating to the minor free-silica content of our bentonite products used in the metalcasting industry. The plaintiffs in these lawsuits are primarily employees of our foundry customers. Our oilfield services segment is also party to two unrelated lawsuits alleging damages caused by our coiled tubing operations in Louisiana; one lawsuit alleges damages of $28 and the other of $9. We do not believe that any pending litigation will have a material adverse effect on our consolidated financial statements.
32
Table of Contents
Item 2: | Management’s Discussion and Analysis of Financial Condition and Results of Operations |
Forward-Looking Statements
From time to time, certain statements we make, including statements in this Management’s Discussion and Analysis of Financial Condition and Results of Operations section, constitute “forward-looking statements” made in reliance upon the safe harbor contained in Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended. Such forward-looking statements include statements relating to our Company or our operations that are preceded by terms such as “expects,” “believes,” “anticipates,” “intends” and similar expressions, and statements relating to anticipated growth and levels of capital expenditures. Such forward-looking statements are not guarantees of future performance and involve risks and uncertainties. Our actual results, performance or achievements could differ materially from the results, performance or achievements expressed in, or implied by, these forward-looking statements as a result of various factors, including without limitation the following: actual performance in our various markets; conditions in the metalcasting and construction markets; oil and gas prices and conditions in those industries; operating costs; seasonality of our environmental and oilfield services segments; competition and regulation; currency exchange rates and devaluations; delays in development, production and marketing of new products; integration of acquired businesses; conducting and expanding operations in international markets; and other factors set forth from time to time in our reports filed with the Securities and Exchange Commission (SEC). We undertake no duty to update any forward looking statements to actual results or changes in our expectations.
Overview
We are a global company focused on long term profitability growth through the development and application of minerals and technology products and services for use in various industrial and consumer markets. The majority of our revenue growth has been achieved by sustaining our products’ technological advantages, developing new products and applying them in innovative ways, bringing additional products and services to markets we already serve, and overall growth in the industries we serve. We focus our research and development activities in areas where we can either leverage our current customer relationships and mineral reserves or enhance existing or related products and services.
For our products that use minerals, the principal mineral that we utilize is bentonite. We own or lease bentonite reserves in the U.S., Australia, China and Turkey. Additionally, through our affiliates and joint ventures, we have access to bentonite reserves in Egypt, India, and Mexico. We also market and develop applications for other minerals, including chromite ore from our mine in South Africa.
Bentonite is surface mined when it is commercially feasible to have it shipped to a plant for further processing, including crushing, drying, milling, and packaging. Bentonite deposits have varying physical properties which require us to identify which markets our reserves can serve. Nicknamed the mineral of a thousand uses, bentonite’s unique characteristics include its ability to bind, swell, adsorb, control rheology, soften fabrics, and have its surface modified through chemical and physical reactions. Our research and development activities, including our understanding of bentonite properties, mining methods, processing and application to markets, are some of the core components of our longevity and future prospects.
33
Table of Contents
We operate in five segments: minerals and materials, environmental, oilfield services, transportation and corporate. Both our minerals and materials and environmental segments operate manufacturing facilities in North America, Europe, and the Asia-Pacific region. Our minerals and materials segment also owns and operates a chromite mine in South Africa. Our oilfield services segment principally operates in the Gulf of Mexico and surrounding states and also has a growing presence in South America, Africa and Asia. Additionally, we have a transportation segment that performs trucking services for our domestic minerals and materials and environmental segments as well as third parties.
Our customers are engaged in various end-markets and geographic regions. Customers in the minerals and materials segment range from foundries that produce castings for automotive, industrial, and transportation equipment, including heavy-duty trucks and railroad cars, to producers of consumer goods, including cat litter, cosmetics and laundry care. Customers in our environmental segment include construction contractors, engineering contractors and government agencies. The oilfield services segment’s customer base is primarily comprised of oil and natural gas service or exploration companies. A significant portion of our products have been used in the same applications for decades and have experienced minimal technological obsolescence. A majority of our sales are made pursuant to short-term agreements; therefore, terms of sale, such as pricing and volume, can change within our fiscal year.
A majority of our revenues are generated in the Americas, principally North America. Consequently, the state of the U.S. economy, and especially the metalcasting, industrial construction, and oil and gas exploration and production industries, impacts our revenues.
Sustainable, long-term profitable growth is our primary objective. We employ a number of strategic initiatives to achieve this goal:
• | Organic growth: The central component of our growth strategy is expansion of our product lines and market presence. We have a history of commitment to research and development activities directed at bringing innovative products to market. We believe this approach to growth offers the best probability of achieving our long-term goals at the lowest risk. |
• | Globalization: As we have done for decades, we continue to expand our manufacturing and marketing organizations into emerging geographic markets. We see significant opportunities in the Asia-Pacific and Eastern European regions for expanding our revenues and earnings over the long-term as a number of markets we serve, such as metalcasting and lining technologies, are expected to grow in these areas. We expect to take advantage of these growth areas, either through our wholly-owned subsidiaries or investments in affiliates and joint ventures. |
• | Mineral development:Bentonite is a component in a majority of the products we supply. Since it is a natural material, we must continually expand our reserve base to maintain a long-term business. Our goal is to add new reserves to replace the bentonite mined each year. Furthermore, we need to assure that new reserves meet the physical property requirements for our diverse product lines and are economical to mine. Our organization is committed to developing its global reserve base to meet these requirements. |
34
Table of Contents
• | Acquisitions:We continually seek to acquire complementary businesses, as appropriate, when we believe those businesses are fairly valued and fit into our growth strategy. |
A number of risks will challenge us in meeting these long-term objectives, and there can be no assurance that we will achieve success in implementing any one or more of them. We describe certain risks throughout this report as well as under “Item 1A. Risk Factors” and “Item 7A. Quantitative and Qualitative Disclosure About Market Risk” within our Annual Report on Form 10-K for the year ended December 31, 2011. In general, the significance of these risks has not materially changed since our Annual Report on Form 10-K for the period ended December 31, 2011.
Critical Accounting Policies and Estimates
Management’s Discussion and Analysis of our Financial Condition and Results of Operations describes relevant aspects of our condensed consolidated financial statements, which have been prepared in accordance with accounting principles generally accepted in the United States. We evaluate the accounting policies and estimates used to prepare the financial statements on an ongoing basis. We consider the accounting policies used in preparing our financial statements to be critical accounting policies when they are both important to the portrayal of our financial condition and results of operations, and require us to make estimates, complex judgments, and assumptions, including with respect to events which are inherently uncertain. As a result, actual results could differ from these estimates. For more information on our critical accounting policies, please read our Annual Report on Form 10-K for the year ended December 31, 2011.
Analysis of Results of Operations
Following is a discussion and analysis that describes certain factors that have affected, and may continue to affect, our financial position and operating results. This discussion should be read with the accompanying condensed consolidated financial statements.
The following consolidated income statement review and segment analysis discuss the results for the three and six months ended June 30, 2012 and the comparable results in the prior year. In each section, a discussion of our consolidated results is presented first, followed by a more detailed discussion of performance within our segments.
35
Table of Contents
Three months ended June 30, 2012 vs. June 30, 2011
Consolidated Income Statement Review
The table below compares our operating results for the quarters ended June 30, 2012 and 2011.
Consolidated | Three Months Ended June 30, | |||||||||||
2012 | 2011 | 2012 vs. 2011 | ||||||||||
(In Millions, Except Per Share Amounts) | ||||||||||||
Continuing operations | ||||||||||||
Net sales | $ | 257.4 | $ | 243.1 | 5.9% | |||||||
Cost of sales | 182.8 | 181.1 | ||||||||||
|
|
|
| |||||||||
Gross profit | 74.6 | 62.0 | 20.3% | |||||||||
margin % | 29.0% | 25.5% | ||||||||||
Selling, general and administrative expenses | 43.6 | 41.0 | 6.3% | |||||||||
|
|
|
| |||||||||
Operating profit | 31.0 | 21.0 | 47.6% | |||||||||
margin % | 12.0% | 8.6% | ||||||||||
Other income (expense): | ||||||||||||
Interest expense, net | (2.7 | ) | (2.7 | ) | 0.0% | |||||||
Other, net | (0.5 | ) | 0.5 | * | ||||||||
|
|
|
| |||||||||
(3.2 | ) | (2.2 | ) | |||||||||
|
|
|
| |||||||||
Income before income taxes and income (loss) from affiliates and joint ventures | 27.8 | 18.8 | ||||||||||
Income tax expense | 7.6 | 5.7 | 33.3% | |||||||||
effective tax rate | 27.3% | 30.3% | ||||||||||
|
|
|
| |||||||||
Income before income (loss) from affiliates and joint ventures | 20.2 | 13.1 | ||||||||||
Income (loss) from affiliates and joint ventures | 1.1 | (0.1 | ) | * | ||||||||
|
|
|
| |||||||||
Income (loss) from continuing operations | 21.3 | 13.0 | ||||||||||
Discontinued operations | ||||||||||||
Income (loss) on discontinued operations | - | 0.2 | * | |||||||||
|
|
|
| |||||||||
Net income (loss) | 21.3 | 13.2 | 61.4% | |||||||||
Net income (loss) attributable to noncontrolling interests | (0.3 | ) | - | * | ||||||||
|
|
|
| |||||||||
Net income (loss) attributable to AMCOL shareholders | $ | 21.6 | $ | 13.2 | 63.6% | |||||||
|
|
|
| |||||||||
Earnings per share attributable to AMCOL shareholders | ||||||||||||
Basic earnings (loss) per share: | ||||||||||||
Continuing operations | $ | 0.67 | $ | 0.41 | 63.4% | |||||||
Discontinued operations | - | 0.01 | * | |||||||||
|
|
|
| |||||||||
Net income | $ | 0.67 | $ | 0.42 | 59.5% | |||||||
|
|
|
| |||||||||
Diluted earnings (loss) per share | ||||||||||||
Continuing operations | $ | 0.67 | $ | 0.40 | 67.5% | |||||||
Discontinued operations | - | 0.01 | * | |||||||||
|
|
|
| |||||||||
Net income | $ | 0.67 | $ | 0.41 | 63.4% | |||||||
|
|
|
|
* | Not meaningful |
36
Table of Contents
We measure sales fluctuations by the relevant components: organic, acquisitions, and foreign currency translation. Fluctuation due to foreign currency translation is measured as the change in revenues resulting from differences in currency exchange rates between periods. If applicable, fluctuation due to acquisitions is measured as the change in revenues resulting from acquired businesses within the first year (twelve consecutive months) we own them. Any remaining fluctuation is due to organic components. The following table details the consolidated sales fluctuations by components over the prior year’s comparable period:
Organic | Acquisitions | Foreign Exchange | Total | |||||||||||||
Minerals and materials | 6.0% | 0.0% | -0.7% | 5.3% | ||||||||||||
Environmental | -3.4% | 0.0% | -2.2% | -5.6% | ||||||||||||
Oilfield services | 6.8% | 0.0% | -0.2% | 6.6% | ||||||||||||
Transportation & intersegment shipping | -0.5% | 0.0% | 0.1% | -0.4% | ||||||||||||
|
|
|
|
|
|
|
| |||||||||
Total | 8.9% | 0.0% | -3.0% | 5.9% | ||||||||||||
|
|
|
|
|
|
|
| |||||||||
% of change | 152.5% | 0.0% | -52.5% | 100.0% |
The following table shows the distribution of sales across our three principal geographic regions (Americas; Europe, Middle East, and Africa (EMEA); and Asia Pacific) and the comparable total from the prior year’s period:
Americas | EMEA | Asia Pacific | Total | |||||||||||||
Minerals and materials | 32.0% | 8.1% | 10.1% | 50.2% | ||||||||||||
Environmental | 11.3% | 9.9% | 2.5% | 23.7% | ||||||||||||
Oilfield services | 19.4% | 1.6% | 2.8% | 23.8% | ||||||||||||
Transportation & intersegment shipping | 2.3% | 0.0% | 0.0% | 2.3% | ||||||||||||
|
|
|
|
|
|
|
| |||||||||
Total - current year’s period | 65.0% | 19.6% | 15.4% | 100.0% | ||||||||||||
|
|
|
|
|
|
|
| |||||||||
Total from prior year’s comparable period | 61.1% | 24.8% | 14.1% | 100.0% |
Net sales & gross profit:
Our organic growth in net sales was negatively affected by foreign currency translation. Our minerals and materials and oilfield services segments contributed significantly to the improved results for the quarter, both at the net sales and gross profit level. The domestic operations of each of these segments are also giving rise to the increased concentration of our revenues in the Americas. In addition, overall gross margin increased 350 basis points due to significant margin expansion in each of these segments. The segment discussions herein provide additional detail on these matters.
37
Table of Contents
Selling, general and administrative expenses (SG&A):
Excluding $1.0 million of one-time income related items in our environmental segment resulting from favorable settlements on certain lawsuits in 2012, SG&A expenses increased $3.6 million. The increase occurred principally in our minerals and materials and oilfield services segments due to increased employee headcounts, compensation and benefit expenses. Other items that normally increase with sales, such as travel and bad debts, also contributed to the increase.
Operating profit:
Operating profit and operating margin increased due to the increase in gross profit and gross margin mentioned earlier, partially offset by the increase in SG&A expenses.
Other income (expense), net:
The $1.0 million increase in Other, net relates to fluctuations in foreign currency transactions. In the prior year’s period, we experienced a small gain whereas we have a small loss in the current period.
Income tax expense:
Our effective tax rate for the current quarter was 27.3% versus 30.3% in the prior year’s quarter. Eliminating discrete items, the adjusted effective tax rates were 27.2% and 32.3% for the 2012 and 2011 periods, respectively. The decrease to 27.2% stems from changes in estimates regarding the distribution of income amongst our tax jurisdictions for each year.
Income (loss) from affiliates and joint ventures:
Our income from affiliates and joint ventures increased $1.2 million as the prior year period includes $0.6 million of losses related to our Russian based venture, which we sold in the third quarter of 2011. The remaining increase is due to better performance across our other joint ventures.
Diluted earnings per share from continuing operations:
The improved operating performance of our minerals and materials and oilfield services segments is the primary driver of the increase in diluted earnings per share from continuing operations.
Quarterly Review of Each Segment’s Results
Following is a review of operating results for each of our five reporting segments:
38
Table of Contents
Minerals and Materials
Minerals and Materials | Three Months Ended June 30, | |||||||||||||||||||||||
2012 | 2011 | 2012 vs. 2011 | ||||||||||||||||||||||
(Dollars in millions) | ||||||||||||||||||||||||
Net sales | $ | 131.1 | 100.0 | % | $ | 118.3 | 100.0 | % | $ | 12.8 | 10.8 | % | ||||||||||||
Cost of sales | 95.5 | 72.8 | % | 92.1 | 77.9 | % | ||||||||||||||||||
|
|
|
|
|
|
|
| |||||||||||||||||
Gross profit | 35.6 | 27.2 | % | 26.2 | 22.1 | % | 9.4 | 35.9 | % | |||||||||||||||
Selling, general and administrative expenses | 13.1 | 10.0 | % | 12.7 | 10.7 | % | 0.4 | 3.1 | % | |||||||||||||||
|
|
|
|
|
|
|
|
|
| |||||||||||||||
Operating profit | 22.5 | 17.2 | % | 13.5 | 11.4 | % | 9.0 | 66.7 | % |
Minerals and Materials Product Line Sales | Three Months Ended June 30, | |||||||||||
2012 | 2011 | % change | ||||||||||
(Dollars in millions) | ||||||||||||
Metalcasting | $ | 71.0 | $ | 63.6 | 11.6 | % | ||||||
Specialty materials | 26.2 | 25.8 | 1.6 | % | ||||||||
Basic minerals | 17.5 | 12.6 | 38.9 | % | ||||||||
Pet products | 13.9 | 13.0 | 6.9 | % | ||||||||
Other product lines | 2.5 | 3.3 | -24.2 | % | ||||||||
|
|
|
| |||||||||
Total | 131.1 | 118.3 | 10.8 | % | ||||||||
|
|
|
|
Increased volumes account for approximately 86% of the increase in net sales. Increased selling prices were partially offset by unfavorable fluctuations in foreign currency exchange rates, principally the Turkish lira and South African rand. Our domestic metalcasting and drilling additives (included within our basic minerals product line) are the primary drivers of performance throughout this segment’s improved results. Our metalcasting product line, which includes chromite sales to foundry customers, continues to experience an increase in demand due to growth in demand for automobile and heavy equipment castings. Increased domestic drilling activity and customer stock build-up has favorably impacted our drilling additive sales.
Increased sales volumes accounted for approximately two-thirds of the increase in gross profit while increased selling prices (net of cost increases) accounted for most of the remainder.
Operating profit increased due to the increase in gross profit. Operating margins, however, increased more than gross margins (580 basis points versus 510 basis points) due to greater operating leverage, especially considering the fixed cost nature of our operations.
39
Table of Contents
Environmental
Environmental | Three Months Ended June 30, | |||||||||||||||||||||||
2012 | 2011 | 2012 vs. 2011 | ||||||||||||||||||||||
(Dollars in Millions) | ||||||||||||||||||||||||
Net sales | $ | 61.3 | 100.0% | $ | 74.8 | 100.0% | $ | (13.5 | ) | -18.0% | ||||||||||||||
Cost of sales | 42.7 | 69.7% | 52.5 | 70.2% | ||||||||||||||||||||
|
|
|
|
|
|
|
| |||||||||||||||||
Gross profit | 18.6 | 30.3% | 22.3 | 29.8% | (3.7 | ) | -16.6% | |||||||||||||||||
Selling, general and administrative expenses | 12.4 | 20.2% | 14.3 | 19.1% | (1.9 | ) | -13.3% | |||||||||||||||||
|
|
|
|
|
|
|
|
|
| |||||||||||||||
Operating profit | 6.2 | 10.1% | 8.0 | 10.7% | (1.8 | ) | -22.5% |
Environmental Product Line Sales | Three Months Ended June 30, | |||||||||||
2012 | 2011 | % change | ||||||||||
(Dollars in millions) | ||||||||||||
Lining technologies | $ | 27.5 | $ | 33.3 | -17.4 | % | ||||||
Building materials | 19.1 | 21.7 | -12.0 | % | ||||||||
Drilling products | 10.5 | 8.7 | 20.7 | % | ||||||||
Contracting services | 4.2 | 11.1 | -62.2 | % | ||||||||
|
|
|
| |||||||||
Total | 61.3 | 74.8 | -18.0 | % | ||||||||
|
|
|
|
All of our product lines in this segment experienced decreased sales in the current quarter except for our drilling products, where domestic demand remains strong. Approximately 39% of the decrease is due to fluctuations in foreign currency exchange rates, almost entirely from European currencies. The effect of these fluctuations in foreign currency exchange rates accounts for 56% of the decrease in building materials revenues. Demand for construction products in general and particularly lining products and systems has decreased. In addition, we are strategically reducing our contracting services in Europe, including exiting the Irish market in 2011.
Gross profit decreased due to the decrease in sales. Gross margin, however, increased for several reasons. First, with the reduction in lower margin contracting services and lining products, our sales are more heavily concentrated in our higher margin building materials and drilling products. Our international operations were also able to increase their gross margins by raising prices. Both of these increases were somewhat offset by a decrease in our domestic gross margins resulting from lower volumes, which caused per unit production costs to increase.
SG&A expenses decreased $1.9 million, which includes a $1.0 million benefit from gains recorded upon the settlement of certain lawsuits. Although the segment’s bad debt expenses increased $0.6 million, decreases in headcount and favorable foreign currency exchange rate fluctuations more than offset the increase.
Operating profit decreased due to less gross profit being generated during the period. Operating profit margin decreased as SG&A costs did not decrease in proportion to sales levels.
40
Table of Contents
Oilfield Services
Oilfield Services | Three Months Ended June 30, | |||||||||||||||||||||||
2012 | 2011 | 2012 vs. 2011 | ||||||||||||||||||||||
�� | (Dollars in Millions) | |||||||||||||||||||||||
Net sales | $ | 61.1 | 100.0% | $ | 45.1 | 100.0% | $ | 16.0 | 35.5% | |||||||||||||||
Cost of sales | 41.9 | 68.6% | 33.4 | 74.1% | ||||||||||||||||||||
|
|
|
|
|
|
|
| |||||||||||||||||
Gross profit | 19.2 | 31.4% | 11.7 | 25.9% | 7.5 | 64.1% | ||||||||||||||||||
Selling, general and administrative expenses | 11.5 | 18.8% | 8.0 | 17.7% | 3.5 | 43.8% | ||||||||||||||||||
|
|
|
|
|
|
|
|
|
| |||||||||||||||
Operating profit | 7.7 | 12.6% | 3.7 | 8.2% | 4.0 | 108.1% |
Oilfield service revenues and profits increased due to continued strong demand, both internationally and domestically, for our services in addition to the recent acquisition of certain equipment that increased our service capacities. Our domestic services generated 57% of the increase in sales, the majority of which was derived from our coil tubing and nitrogen services. Our coil tubing services continue to see strong demand in shale rich basins, and we have been more successful cross-selling our nitrogen services with other service lines. Internationally, nearly all of our operations experienced revenue growth in excess of 60%.
The increased revenues gave rise to the increase in gross profit. When combined with the somewhat fixed cost structure of many of our service lines, the additional revenue helped significantly increase gross margins. In addition, our international operations are benefitting from new management put into place in 2011.
The majority of the increase in SG&A expenses stems from increased headcount and compensation expenses in addition to increased bad debt expenses. Operating profit increased due to the increase in gross profit. Like gross margin, the significant leverage garnered from the increased revenue gave rise to an increase in the operating profit margin.
Transportation
Transportation | Three Months Ended June 30, | |||||||||||||||||||||||
2012 | 2011 | 2012 vs. 2011 | ||||||||||||||||||||||
(Dollars in Millions) | ||||||||||||||||||||||||
Net sales | $ | 11.7 | 100.0% | $ | 14.8 | 100.0% | $ | (3.1 | ) | -20.9% | ||||||||||||||
Cost of sales | 10.5 | 89.7% | 13.1 | 88.5% | ||||||||||||||||||||
|
|
|
|
|
|
|
| |||||||||||||||||
Gross profit | 1.2 | 10.3% | 1.7 | 11.5% | (0.5 | ) | -29.4% | |||||||||||||||||
Selling, general and administrative expenses | 0.9 | 7.7% | 1.0 | 6.8% | (0.1 | ) | -10.0% | |||||||||||||||||
|
|
|
|
|
|
|
|
|
| |||||||||||||||
Operating profit | 0.3 | 2.6% | 0.7 | 4.7% | (0.4 | ) | -57.1% |
This segment provides services to third parties as well as AMCOL companies within our other segments. Revenues decreased due to lower shipment volumes as driver availability has decreased due to increased oil and gas opportunities in the Bakken shale region. Operating profits decreased as a result of the decrease in revenues.
41
Table of Contents
Corporate
Corporate | Three Months Ended June 30, | |||||||||||||||
2012 | 2011 | 2012 vs. 2011 | ||||||||||||||
(Dollars in Millions) | ||||||||||||||||
Intersegment sales | $ | (7.8 | ) | $ | (9.9 | ) | 2.1 | |||||||||
Intersegment cost of sales | (7.8 | ) | (10.0 | ) | ||||||||||||
|
|
|
| |||||||||||||
Gross profit (loss) | - | 0.1 | (0.1 | ) | ||||||||||||
Selling, general and administrative expenses | 5.7 | 5.0 | 0.7 | 14.0 | % | |||||||||||
|
|
|
| |||||||||||||
Operating loss | (5.7 | ) | (4.9 | ) | (0.8 | ) | 16.3 | % |
Intersegment sales are eliminated in our corporate segment. These are mostly sales between our transportation segment and our minerals and materials and environmental segments as well as sales between our minerals and materials segment to our environmental and oilfield services segments.
Corporate SG&A expenses increased due to increased compensation and benefit expenses.
42
Table of Contents
Six months ended June 30, 2012 vs. June 30, 2011
Consolidated Income Statement Review
Following table compares our operating results for the periods ended June 30, 2012 and 2011.
Consolidated | Six Months Ended June 30, | |||||||||||
2012 | 2011 | 2012 vs. 2011 | ||||||||||
(In Millions, Except Per Share Amounts) | ||||||||||||
Continuing operations | ||||||||||||
Net sales | $ | 493.0 | $ | 461.7 | 6.8% | |||||||
Cost of sales | 353.8 | 341.3 | ||||||||||
|
|
|
| |||||||||
Gross profit | 139.2 | 120.4 | 15.6% | |||||||||
margin % | 28.2% | 26.1% | ||||||||||
Selling, general and | 86.9 | 80.1 | 8.5% | |||||||||
|
|
|
| |||||||||
Operating profit | 52.3 | 40.3 | 29.8% | |||||||||
margin % | 10.6% | 8.7% | ||||||||||
Other income (expense): | ||||||||||||
Interest expense, net | (5.4 | ) | (5.3 | ) | 1.9% | |||||||
Other, net | (2.7 | ) | 0.1 | * | ||||||||
|
|
|
| |||||||||
(8.1 | ) | (5.2 | ) | |||||||||
|
|
|
| |||||||||
Income before income taxes and income (loss) from affiliates and joint ventures | 44.2 | 35.1 | ||||||||||
Income tax expense | 11.9 | 9.6 | 24.0% | |||||||||
effective tax rate | 26.9% | 27.4% | ||||||||||
|
|
|
| |||||||||
Income before income (loss) from affiliates and joint ventures | 32.3 | 25.5 | ||||||||||
Income (loss) from affiliates and joint ventures | 2.3 | 0.9 | * | |||||||||
|
|
|
| |||||||||
Income (loss) from continuing operations | 34.6 | 26.4 | ||||||||||
Discontinued operations | ||||||||||||
Income (loss) on discontinued operations | - | 0.1 | * | |||||||||
|
|
|
| |||||||||
Net income (loss) | 34.6 | 26.5 | 30.6% | |||||||||
Net income (loss) attributable to noncontrolling interests | (0.2 | ) | - | * | ||||||||
|
|
|
| |||||||||
Net income (loss) attributable to AMCOL shareholders | $ | 34.8 | $ | 26.5 | 31.3% | |||||||
|
|
|
| |||||||||
Earnings per share attributable to AMCOL shareholders | ||||||||||||
Basic earnings (loss) per share: | ||||||||||||
Continuing operations | $ | 1.09 | $ | 0.84 | 29.8% | |||||||
Discontinued operations | - | - | * | |||||||||
|
|
|
| |||||||||
Net income | $ | 1.09 | $ | 0.84 | 29.8% | |||||||
|
|
|
| |||||||||
Diluted earnings (loss) per share | ||||||||||||
Continuing operations | $ | 1.08 | $ | 0.83 | 30.1% | |||||||
Discontinued operations | - | - | * | |||||||||
|
|
|
| |||||||||
Net income | $ | 1.08 | $ | 0.83 | 30.1% | |||||||
|
|
|
|
* Not meaningful
43
Table of Contents
The following table details the consolidated sales fluctuations by components over the prior year’s comparable period:
Organic | Acquisitions | Foreign Exchange | Total | |||||||||||||
Minerals and materials | 5.3% | 0.0% | -0.5% | 4.8% | ||||||||||||
Environmental | -1.7% | 0.0% | -1.4% | -3.1% | ||||||||||||
Oilfield services | 5.7% | 0.0% | -0.1% | 5.6% | ||||||||||||
Transportation & intersegment shipping | -0.5% | 0.0% | 0.0% | -0.5% | ||||||||||||
|
|
|
|
|
|
|
| |||||||||
Total | 8.8% | 0.0% | -2.0% | 6.8% | ||||||||||||
|
|
|
|
|
|
|
| |||||||||
% of growth | 130.4% | 0.0% | -30.4% | 100.0% |
The following table shows the distribution of sales across our three principal geographic regions (Americas; EMEA; and Asia Pacific) and the comparable total from the prior year’s period:
Americas | EMEA | Asia Pacific | Total | |||||||||||||
Minerals and materials | 32.4% | 8.4% | 10.5% | 51.3% | ||||||||||||
Environmental | 11.5% | 8.9% | 2.2% | 22.6% | ||||||||||||
Oilfield services | 19.8% | 1.4% | 2.5% | 23.7% | ||||||||||||
Transportation & intersegment shipping | 2.4% | 0.0% | 0.0% | 2.4% | ||||||||||||
|
|
|
|
|
|
|
| |||||||||
Total - current year’s period | 66.1% | 18.7% | 15.2% | 100.0% | ||||||||||||
|
|
|
|
|
|
|
| |||||||||
Total from prior year’s comparable period | 62.5% | 23.7% | 13.8% | 100.0% |
Net sales:
Our net sales grew organically and were negatively affected by foreign currency translation, primarily due to exchange rates between the U.S. dollar and the euro, Polish zloty, and South African rand. The majority of the increase occurred in our minerals and materials and oilfield services segments, especially these segments’ operations in the Americas. This growth led to the decreased concentration in our EMEA revenues along with the decreased sales in our environmental segment, especially within Europe where we have reduced our involvement in the contracting services market.
Gross profit:
Overall gross profit increased due to the increase in sales mentioned above. Gross margin increased 210 basis points due to the 370 and 180 basis point increases in our minerals and materials and oilfield services gross margins, respectively.
Selling, general and administrative expenses (SG&A):
SG&A expenses increased $6.8 million, of which $3.2 million relates to increased bad debt expenses, impairments, increased professional fees, and favorable settlements of other litigation matters. Favorable foreign currency translation, mostly in our environmental segment, provided a $1.6 million decrease in SG&A expenses. Increased headcount, compensation and benefits expenses are the single largest contributor to the remaining increase.
44
Table of Contents
Operating profit:
Operating profit increased due to the increase in gross profit mentioned earlier, partially offset by the increase in SG&A expenses. Overall, however, operating profits increased more than sales, reflective of our increased operating leverage.
Other income (expense), net:
The increase in Other, net relates to a $1.8 million provision for estimated losses on certain non-operating assets and $1.0 million of increased losses on foreign currency transactions.
Income tax expense:
Our effective tax rate for the current period was 26.9% versus 27.4% in the prior year’s quarter. Our effective tax rate decreased in the current period due to an increase in the benefit from our income earned outside the United States.
Income from affiliates and joint ventures:
Income from affiliates and joint ventures increased as the 2011 amount includes $0.7 million of losses from our investment in a Russian based bentonite enterprise, which we sold in the third quarter of 2011. The remaining increase is due to better performance across our other joint ventures.
Diluted earnings per share from continuing operations:
Diluted earnings per share from continuing operations increased in the quarter due to increased net income from continuing operations.
Year-to-Date Review of Each Segment’s Results
Following is a review of operating results for each of our five reporting segments:
Minerals and Materials
Minerals and Materials | Six Months Ended June 30, | |||||||||||||||||||||||
2012 | 2011 | 2012 vs. 2011 | ||||||||||||||||||||||
(Dollars in millions) | ||||||||||||||||||||||||
Net sales | $ | 256.3 | 100.0% | $ | 234.1 | 100.0% | $ | 22.2 | 9.5% | |||||||||||||||
Cost of sales | 187.3 | 73.1% | 179.9 | 76.8% | ||||||||||||||||||||
|
|
|
|
|
|
|
| |||||||||||||||||
Gross profit | 69.0 | 26.9% | 54.2 | 23.2% | 14.8 | 27.3% | ||||||||||||||||||
Selling, general and | 25.0 | 9.8% | 24.7 | 10.6% | 0.3 | 1.2% | ||||||||||||||||||
|
|
|
|
|
|
|
|
|
| |||||||||||||||
Operating profit | 44.0 | 17.1% | 29.5 | 12.6% | 14.5 | 49.2% |
45
Table of Contents
Minerals and Materials Product Line Sales | Six Months Ended June 30, | |||||||||||
2012 | 2011 | % change | ||||||||||
(Dollars in millions) | ||||||||||||
Metalcasting | $ | 133.8 | $ | 121.0 | 10.6% | |||||||
Specialty materials | 53.0 | 53.2 | -0.4% | |||||||||
Basic minerals | 37.0 | 26.8 | 38.1% | |||||||||
Pet products | 28.1 | 28.1 | 0.0% | |||||||||
Other product lines | 4.4 | 5.0 | -12.0% | |||||||||
|
|
|
| |||||||||
Total | 256.3 | 234.1 | 9.5% | |||||||||
|
|
|
|
Increased volumes accounted for approximately 70% of the increase in sales with increased selling prices comprising the remainder. We have been successful in increasing selling prices in our metalcasting product line and in our drilling additive products (included within our basic minerals product line). Our metalcasting product line, which includes chromite sales to foundry customers, continues to experience an increase in demand due to growth in demand for automobile and heavy equipment castings. Our drilling additive products are also in high demand given the increased drilling activity occurring in the United States.
Gross profit increased due to increased sales. Increased volumes also accounted for approximately two thirds of the increase in gross margin with increased selling prices, net of cost increases, comprising the remainder.
The trend in operating profit follows that of gross profit. Operating margins, however, increased more than gross margins (450 basis points versus 370 basis points) due to the fact that sales increased more than SG&A expenses.
Environmental
Environmental | Six Months Ended June 30, | |||||||||||||||||||||||
2012 | 2011 | 2012 vs. 2011 | ||||||||||||||||||||||
(Dollars in Millions) | ||||||||||||||||||||||||
Net sales | $ | 112.4 | 100.0% | $ | 126.5 | 100.0% | $ | (14.1 | ) | -11.1% | ||||||||||||||
Cost of sales | 79.3 | 70.6% | 88.4 | 69.9% | ||||||||||||||||||||
|
|
|
|
|
|
|
| |||||||||||||||||
Gross profit | 33.1 | 29.4% | 38.1 | 30.1% | (5.0 | ) | -13.1% | |||||||||||||||||
Selling, general and | 26.1 | 23.2% | 28.0 | 22.1% | (1.9 | ) | -6.8% | |||||||||||||||||
|
|
|
|
|
|
|
|
|
| |||||||||||||||
Operating profit (loss) | 7.0 | 6.2% | 10.1 | 8.0% | (3.1 | ) | -30.7% |
Environmental Product Line Sales | Six Months Ended June 30, | |||||||||||
2012 | 2011 | % change | ||||||||||
(Dollars in millions) | ||||||||||||
Lining technologies | $ | 46.8 | $ | 54.9 | -14.8 | % | ||||||
Building materials | 37.9 | 39.2 | -3.3 | % | ||||||||
Drilling products | 19.1 | 14.7 | 29.9 | % | ||||||||
Contracting services | 8.6 | 17.7 | -51.4 | % | ||||||||
|
|
|
| |||||||||
Total | 112.4 | 126.5 | -11.1 | % | ||||||||
|
|
|
|
46
Table of Contents
Sales decreased as decreases in our lining technologies and contracting services product lines overshadowed increases in our drilling products, where demand remains strong. Demand for lining technology products and systems has decreased in the US and Europe, and we continue to strategically reduce some of our involvement in the contracting services business in Europe.
Foreign currency exchange rate fluctuations accounted for 46% of the total decrease in revenues. Excluding the effect of these fluctuations, building materials product line revenues increased marginally. Our sales for building materials grew in excess of 33% in fiscal year 2011, a period when the overall construction industry was growing in low single digits. We achieved this growth due to new product launches and a broadening of our product portfolio; in light of the historical growth, we have a favorable view of our building materials revenues given this history and the effects of foreign currency exchange rates.
Gross profit decreased due to the decrease in sales, and gross margins have also decreased mostly due to decreased profitability on installation contracts in our Spanish operations. Approximately 61% of the decrease in SG&A expenses reflects the impact of foreign currency exchange rate fluctuations. The remaining decrease includes $1.0 million of non-recurring reductions in expenses resulting from settlements of certain lawsuits.
Operating profit decreased due to the decrease in gross profit, and, without a proportional decrease in SG&A expenses, operating profit margins also decreased.
Oilfield Services
Oilfield Services | Six Months Ended June 30, | |||||||||||||||||||||||
2012 | 2011 | 2012 vs. 2011 | ||||||||||||||||||||||
(Dollars in Millions) | ||||||||||||||||||||||||
Net sales | $ | 116.4 | 100.0 | % | $ | 90.7 | 100.0 | % | $ | 25.7 | 28.3% | |||||||||||||
Cost of sales | 81.8 | 70.3 | % | 65.4 | 72.1 | % | ||||||||||||||||||
|
|
|
|
|
|
|
| |||||||||||||||||
Gross profit | 34.6 | 29.7 | % | 25.3 | 27.9 | % | 9.3 | 36.8% | ||||||||||||||||
Selling, general and administrative expenses | 22.1 | 19.0 | % | 15.8 | 17.4 | % | 6.3 | 39.9% | ||||||||||||||||
|
|
|
|
|
|
|
|
|
| |||||||||||||||
Operating profit | 12.5 | 10.7 | % | 9.5 | 10.5 | % | 3.0 | 31.6% |
The growth in revenues occurred almost equally between our domestic and international operations. Domestically, the growth was largely generated by our coil tubing, nitrogen and filtration services. We continue to experience strong demand for our coil tubing services given the increase drilling in oil and gas rich shale basins. However, we do see an increase in competition for coil tubing services. We have also been more successful in bundling our nitrogen services with other service lines, and our filtration services have experienced an increase in demand.
Internationally, each of our operations experienced strong revenue growth. New contracts, new management instituted in 2011, increased capacity due to the recent acquisition of equipment, and increased demand for fabricated equipment have all contributed to the increase in revenue.
Gross profit increased due to the increased revenue. Gross margins have increased as a result of the significant increase in revenues in our international operations, many of which operate on a relatively fixed cost basis and in more profitable offshore environments.
47
Table of Contents
Of the $6.3 million increase in SG&A expenses, approximately $2.2 million relates to increased bad debt levels. The remainder relates to expenses which normally increase with revenues, such as headcount, compensation and travel expenses.
Transportation
Transportation | Six Months Ended June 30, | |||||||||||||||||||||||
2012 | 2011 | 2012 vs. 2011 | ||||||||||||||||||||||
(Dollars in Millions) | ||||||||||||||||||||||||
Net sales | $ | 22.8 | 100.0% | $ | 27.5 | 100.0% | $ | (4.7 | ) | -17.1% | ||||||||||||||
Cost of sales | 20.4 | 89.5% | 24.4 | 88.7% | ||||||||||||||||||||
|
|
|
|
|
|
|
| |||||||||||||||||
Gross profit | 2.4 | 10.5% | 3.1 | 11.3% | (0.7 | ) | -22.6% | |||||||||||||||||
Selling, general and administrative expenses | 1.9 | 8.3% | 1.9 | 6.9% | - | 0.0% | ||||||||||||||||||
|
|
|
|
|
|
|
|
|
| |||||||||||||||
Operating profit | 0.5 | 2.2% | 1.2 | 4.4% | (0.7 | ) | -58.3% |
This segment provides services to third parties as well as AMCOL companies within our other segments. Revenues decreased primarily due to less loads hauled as driver availability has decreased. Drivers are increasingly recruited away to oil and gas opportunities in the Bakken shale region. Gross and operating profits decreased as a result of the decrease in revenues.
Corporate
Corporate | Six Months Ended June 30, | |||||||||||||||
2012 | 2011 | 2012 vs. 2011 | ||||||||||||||
(Dollars in Millions) | ||||||||||||||||
Intersegment sales | $ | (14.9 | ) | $ | (17.1 | ) | 2.2 | |||||||||
Intersegment cost of sales | (15.0 | ) | (16.8 | ) | ||||||||||||
|
|
|
| |||||||||||||
Gross profit (loss) | 0.1 | (0.3 | ) | 0.4 | ||||||||||||
Selling, general and administrative expenses | 11.8 | 9.7 | 2.1 | 21.6 | % | |||||||||||
|
|
|
| |||||||||||||
Operating loss | (11.7 | ) | (10.0 | ) | (1.7 | ) | 17.0 | % |
Intersegment sales are eliminated in our corporate segment. These are mostly sales between our transportation segment and our minerals and materials and environmental segments as well as sales between our minerals and materials segment to our environmental and oilfield services segments.
Corporate SG&A expenses increased due to increased compensation and benefit costs as well as $0.7 million of expenses incurred to write-off certain information technology investments.
48
Table of Contents
Balance Sheet Review
Financial Position ($ in millions) | As at | |||||||
June 30, 2012 | December 31, 2011 | |||||||
Non-cash working capital | $ | 289.9 | $ | 267.4 | ||||
Goodwill & intangible assets | 105.2 | 106.1 | ||||||
Total assets | 869.0 | 850.6 | ||||||
Long-term debt | 251.0 | 260.7 | ||||||
Other long-term obligations | 63.5 | 62.9 | ||||||
Total equity | 422.9 | 396.7 |
Non-cash working capital at June 30, 2012 increased $15.5 million as compared to the amount at December 31, 2011 due to increased working capital required to support the growth in the business. Given the seasonality of our environmental and oilfield services segments as well as the project nature of some of our services provided in the oilfield services segment, working capital levels have historically increased in the early and middle parts of the year and then decreased later in the year; we do not see a reason why this trend would not continue.
We increased our investments in property, plant and equipment, mostly in our oilfield services and minerals and materials segments, to help grow and maintain those businesses. Increased cash utilization, as evidenced by the decrease in our cash balance from the prior year end, and improved performance of working capital allowed us to not only fund these investments but also reduce our debt balance in the first six months of 2012.
Our accumulated other comprehensive loss increased $3.8 million, primarily due to the revaluation of the net assets of our foreign subsidiaries into our reporting currency, USD, during consolidation. Although all foreign subsidiaries are subject to translation adjustments during consolidation, the exchange rates between the USD and the ZAR, BRL, TRY, and the euro have fluctuated significantly, causing the majority of the change in this account.
Unrealized losses on our available-for-sale securities accounted for $0.8 million of the increase in accumulated other comprehensive loss. These losses are the result of decrease in the value of our equity investment in Ashapura Minechem Limited, a company listed on the Bombay stock exchange, as a result of the decrease in the value of that stock as quoted on the exchange. Fluctuations in the value of this investment also account for the changes in the unrealized gain (loss) on available-for-sale securities as reflected in our Condensed Consolidated Statements of Comprehensive Income (Loss).
Last, our treasury stock account has decreased due to the exercise of stock compensation awards by our employees. We may exhaust our supply of treasury shares during 2012 as we provide them to employees upon exercise of stock compensation awards; if our supply is exhausted, we will issue additional shares as awards are exercised.
49
Table of Contents
Liquidity and Capital Resources
Cash flows from operations, an ability to issue new debt instruments, an ability to lease equipment, and borrowings from our revolving credit facility have historically been our sources of funds to provide working capital, make capital expenditures, acquire businesses, repurchase common stock, and pay dividends to shareholders. We believe cash flows from operations and borrowings from our unused and committed credit facility will be adequate to support our current business needs for the foreseeable future.
We may need additional debt or equity facilities in order to pursue acquisitions, when and if these opportunities become available, and we may or may not be able to obtain such facilities on terms substantially similar to our current facilities as discussed in Item 1A – Risk Factors of our Annual Report on Form 10-K filed for 2011. Terms of any new facilities, especially interest rates or covenants, may be significantly different from those we currently have.
All of the cash and cash equivalents on our Consolidated Balance Sheet as of June 30, 2012 and December 31, 2011 resides in our international subsidiaries. Although the cash overseas is significantly less than the amounts these subsidiaries owe to our domestic subsidiaries, our foreign subsidiaries have cash needs which affect the ability to repatriate this cash. Due to these liquidity needs, we consider our foreign earnings permanently reinvested and have not provided income taxes on approximately $123.8 million of foreign subsidiary earnings as of June 30, 2012.
Following is a discussion and analysis of our cash flow activities as presented in the Condensed Consolidated Statement of Cash Flows presented within Part 1, Item 1 of this report.
Cash Flows | Six Months Ended June 30, | |||||||
2012 | 2011 | |||||||
Net cash provided by operating activities | $ | 39.3 | $ | 14.0 | ||||
Net cash used in investing activities | (29.9 | ) | (23.9 | ) | ||||
Net cash provided by (used in) financing activities | (17.0 | ) | 0.3 |
Cash flows from operating activities increased from the prior year period largely due to improved management of our working capital, increased net income and non-cash charges. Non-cash charges increased primarily due to $3.0 million of increased bad-debt expenses mainly relating to litigation matters in our oilfield services segment, $1.8 million for provision of estimated losses on certain non-operating assets, and $0.7 million of impairment charges relating to corporate information technology assets.
Capital expenditures for the first six months of 2012 and 2011 were $32.2 million and $24.8 million, respectively. In these periods, the expenditures include $4.5 million and $2.8 million, respectively, associated with establishing our South African chromite operations. In the six months ended June 30, 2012, the majority of our capital expenditures occurred in our oilfield services segment (to increase the size of our equipment fleet) and our minerals and materials segment (mostly for expansion). We expect our capital expenditures in our fiscal year for 2012 to exceed the levels experienced in recent years.
50
Table of Contents
Our cash flow from financing activities decreased significantly in the current year’s period as borrowings under our debt facilities decreased. We utilized our cash and efficiently employed our working capital to fund growth in our business. Long-term debt as a percentage of total capitalization decreased 250 basis points to 37.2%. We experienced decreased cash proceeds from the exercise of stock compensation awards. Year-to-date dividends declared were $0.36 per share in both periods.
We have approximately $180.4 million of borrowing capacity available from our revolving credit facility as of June 30, 2012. We are in compliance with the financial covenants related to the revolving credit facility as of the period covered by this report.
We are party to a number of lawsuits arising in the normal course of business. Since the mid-1980s, we and/or our subsidiaries have been named as one of a number of defendants in product liability lawsuits relating to the minor free-silica content of our bentonite products used in the metalcasting industry. The plaintiffs in these lawsuits are primarily employees of our foundry customers. Our oilfield services segment is also party to two unrelated lawsuits alleging damages caused by our coiled tubing operations in Louisiana; one lawsuit alleges damages of $28 million and the other of $9 million. We do not believe that any pending litigation will have a material adverse effect on our consolidated financial statements.
Contractual Obligations and Off-Balance Sheet Arrangements
Item 7 of our Annual Report on Form 10-K, for the year ended December 31, 2011 discloses our contractual obligations and off-balance sheet arrangements. There were no material changes in our contractual obligations and off-balance sheet arrangements.
Item 3: | Quantitative and Qualitative Disclosures About Market Risk |
There were no material changes in our market risk from the disclosures made in our Annual Report on Form 10-K for the year ended December 31, 2011 other than those discussed in Part 1, Item 2 of this report.
Item 4: | Controls and Procedures |
Evaluation of Disclosure Controls and Procedures
Our management, with the participation of our Chief Executive Officer and Chief Financial Officer, has evaluated the effectiveness of our disclosure controls and procedures, as such term is defined in Rules 13a-15(e) and 15d-15(e) under the Securities Exchange Act of 1934, as amended (the “Exchange Act”), as of the end of the period covered by this report. Based on that evaluation, they concluded that, as of the end of such period, our disclosure controls and procedures were effective in recording, processing, summarizing, and reporting, on a timely basis, information we are required to disclose in the reports we file or submit under the Exchange Act.
51
Table of Contents
Changes in Internal Control Over Financial Reporting
In preparing our condensed consolidated financial statements for the three months ended June 30, 2012, we identified immaterial errors in our previously issued consolidated financial statements as discussed in Note 2 of the Notes to Condensed Consolidated Financial Statements in this Form 10-Q. Correcting prior year financial statements for immaterial errors does not require our previously filed reports to be amended, but rather these corrections will be made the next time we file the prior period consolidated financial statements.
In connection with these errors, we evaluated the deficiencies in our internal controls over financial reporting and determined that they do not represent, on an individual or combined basis, a material weakness as of December 31, 2011 or June 30, 2012.
In the quarter ended June 30, 2012, we initiated improvements in our internal controls over financial reporting in the Spanish operations of our environmental segment. These modifications to our internal controls have not materially affected, nor are reasonably likely to materially affect, our internal controls over financial reporting. Other than these modifications, there were no significant changes to our internal control over financial reporting during the quarter ended June 30, 2012.
PART II - OTHER INFORMATION
Item 4: | Mine Safety Disclosures |
The information concerning mine safety violations or other regulatory matters required by Section 1503(a) of the Dodd-Frank Wall Street Reform and Consumer Protection Act and Item 104 of Regulation S-K is included in Exhibit 95.1 to this Form 10-Q.
Item 6: | Exhibits |
Exhibit Number | ||
31.1 | Certification of Chief Executive Officer Pursuant to Rule 13a-14(a)/15d-14(a) | |
31.2 | Certification of Chief Financial Officer Pursuant to Rule 13a-14(a)/15d-14(a) | |
32 | Certification of Periodic Financial Report Pursuant to 18 U.S.C. Section 1350 | |
95.1 | Mine Safety Disclosures | |
101 | The following information from our Quarterly Report on Form 10-Q for the period ended June 30, 2012, formatted in XBRL (eXtensible Business Reporting Language): (i) Condensed Consolidated Balance Sheets at June 30, 2012, and December 31, 2011, (ii) Condensed Consolidated Statements of Operations for the three and six months ended June 30, 2012 and 2011, (iii) Condensed Consolidated Statements of Comprehensive Income (Loss) for the three and six months ended June 30, 2012 and 2011, (iv) Condensed Consolidated Statements of Changes in Equity for six months ended June 30, 2012 and 2011, |
52
Table of Contents
(v) Condensed Consolidated Statements of Cash Flows for six months ended June 30, 2012 and 2011, and (vi) Notes to Condensed Consolidated Financial Statements. |
53
Table of Contents
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.
AMCOL INTERNATIONAL CORPORATION
Date: | October 30, 2012 | /s/ Ryan F. McKendrick | ||||
Ryan F. McKendrick | ||||||
President and Chief Executive Officer |
Date: | October 30, 2012 | /s/ Donald W. Pearson | ||||
Donald W. Pearson | ||||||
Vice President and Chief Financial Officer |
54
Table of Contents
INDEX TO EXHIBITS
31.1 | Certification of Chief Executive Officer Pursuant to Rule 13a-14(a)/15d-14(a) | |
31.2 | Certification of Chief Financial Officer Pursuant to Rule 13a-14(a)/15d-14(a) | |
32 | Certification of Periodic Financial Report Pursuant to 18 U.S.C. Section 1350 | |
95.1 | Mine Safety Disclosures | |
101 | The following information from our Quarterly Report on Form 10-Q for the period ended June 30, 2012, formatted in XBRL (eXtensible Business Reporting Language): (i) Condensed Consolidated Balance Sheets at June 30, 2012, and December 31, 2011, (ii) Condensed Consolidated Statements of Operations for the three and six months ended June 30, 2012 and 2011, (iii) Condensed Consolidated Statements of Comprehensive Income (Loss) for the three and six months ended June 30, 2012 and 2011, (iv) Condensed Consolidated Statements of Changes in Equity for six months ended June 30, 2012 and 2011, (v) Condensed Consolidated Statements of Cash Flows for six months ended June 30, 2012 and 2011, and (vi) Notes to Condensed Consolidated Financial Statements. |
55