Securities and Exchange Commission
Washington, D.C. 20549
FORM 10-QA
To correct financial data included in Statements of Condensed Operations
Quarterly Report Under Section 13
or 15(d) of the Securities Exchange Act of 1934
For Quarter Ended: March 31, 1994 Commission File Number 1-5558
Katy Industries, Inc.
(Exact name of registrant as specified in its charter)
Delaware 75-1277589
(State of Incorporation) (I.R.S. Employer Identification No.)
853 Dundee Avenue, Elgin, Illinois 60120
(Address of Principal Executive Offices) (Zip Code)
Registrant's telephone number, including area code: (312)379-1121
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 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 March 31, 1994
Common stock, $1 par value 9,017,387
KATY INDUSTRIES, INC.
CONDENSED CONSOLIDATED BALANCE SHEETS
MARCH 31, 1994 AND DECEMBER 31, 1993
March 31, December 31,
1994 1993
(Thousands of Dollars)
CURRENT ASSETS:
Cash and cash equivalents $122,912 $130,289
Marketable securities - available for sale
(1993 at cost; market - $31,223) - Note 1 28,294 15,795
Accounts receivable, trade, net of allowance
for doubtful accounts of $5,809 and $7,97523,673 20,568
Notes and other receivables, net of allowance
for doubtful notes of $10 4,809 3,804
Inventories - Note 1 40,391 40,725
Other current assets 10,426 14,165
Total current assets 230,505 225,346
OTHER ASSETS:
Investments, at equity, and advances to
unconsolidated subsidiaries - Note 2 40,314 45,516
Investments, at cost - Note 3 425 6,704
Notes receivable, net of allowance for
doubtful notes of $1,700 3,027 3,058
Miscellaneous 19,577 19,915
Total other assets 63,343 75,193
PROPERTIES, at cost:
Land and improvements 5,173 3,433
Buildings and improvements 27,656 22,820
Machinery and equipment 57,532 52,488
90,361 78,741
Accumulated depreciation ( 49,615) ( 49,055)
Net properties 40,746 29,686
$334,594 $330,225
<FN>
See Notes to Condensed Consolidated Financial Information.
KATY INDUSTRIES, INC.
CONDENSED CONSOLIDATED BALANCE SHEETS
MARCH 31, 1994 AND DECEMBER 31, 1993
March 31, December 31,
1994 1993
(Thousands of Dollars)
CURRENT LIABILITIES:
Notes payable $ 10,128 $ 10,163
Accounts payable 8,507 8,777
Accrued compensation 4,521 5,058
Accrued expenses 21,784 21,508
Accrued interest and taxes 1,227 1,131
Current maturities, long-term debt 3,214 2,991
Dividends payable 643 643
Total current liabilities 50,024 50,271
LONG-TERM DEBT, less current maturities 5,793 4,289
OTHER LIABILITIES 30,756 31,899
MINORITY INTEREST 205 -
STOCKHOLDERS' EQUITY
Common stock, $1 par value, authorized
25,000,000 shares, issued 9,821,329
shares 9,821 9,821
Additional paid-in capital 51,111 51,111
Foreign currency translation adjustment 4,051 3,880
Unrealized holding gain, net of tax - Note 1 7,631 -
Retained earnings 189,062 192,814
Treasury stock, 803,942 shares ( 13,860) ( 13,860)
Total stockholders' equity 247,816 243,766
$334,594 $330,225
<FN>
See Notes to Condensed Consolidated Financial Information.
KATY INDUSTRIES, INC.
STATEMENTS OF CONDENSED CONSOLIDATED OPERATIONS
THREE MONTHS ENDED MARCH 31, 1994 AND 1993
1994 1993
(Thousands of Dollars
Except Per Share Data)
Net sales $ 38,423 $ 40,340
Costs and expenses:
Cost of goods sold 27,036 29,077
Selling, general and administrative 9,863 11,495
Depreciation and amortization 1,544 1,496
Interest expense 520 413
Interest income ( 1,225) ( 1,538)
Other, net - Note 3 6,350 ( 6,422)
44,088 34,521
Income (Loss) from continuing consolidated
operations before provision for income
taxes and minority interest ( 5,665) 5,819
Benefit (Provision) for income taxes 1,864 ( 2,752)
Minority stockholders share of loss - 510
Income from continuing consolidated
operations ( 3,801) 3,577
Equity in income of unconsolidated
subsidiaries (net of tax) - Note 2 613 659
Gain as a result of an initial public offering
by an unconsolidated subsidiary (net of tax) -
Note 2 - 835
Income (Loss) from continuing operations( 3,188) 5,071
Discontinued consolidated operation (net of tax) - ( 1,343)
Income (Loss) before cumulative effect of
change in accounting principle ( 3,188) 3,728
Cumulative effect of change in accounting principle - ( 1,418)
Net income (loss) ($ 3,188) $ 2,310
Earnings (Loss) per share:
Income (Loss) from continuing operations ($ .35) $ .56
Discontinued consolidated operations - ( .15)
Cumulative effect of change
in accounting principle - ( .15)
Net income (loss) ($ .35) $ .26
Average shares outstanding (in thousands) 9,017 9,017
Dividends per share - common stock
$1.00 par value $ .0625 $ .0625
<FN>
See Notes to Condensed Consolidated Financial Information.
KATY INDUSTRIES, INC.
STATEMENTS OF CONDENSED CONSOLIDATED CASH FLOWS
THREE MONTHS ENDED MARCH 31, 1994 AND 1993
1994 1993
(Thousands of Dollars)
Cash flows from operating activities:
Net income (loss) ($ 3,188) $ 2,310
Gain as a result of an initial public
offering by an unconsolidated subsidiary - ( 835)
Write off of investment 6,580 -
Gain on sale of assets ( 4) ( 6,075)
Discontinued operation - 1,343
Cumulative effect of change in accounting principle- 1,418
Adjustments to reconcile net income to net cash
flows from operating activities ( 6,057) ( 1,589)
Net cash flows from operating activities( 2,669)( 3,428)
Cash flows from investing activities:
Proceeds from sale of assets 204 11,157
Time deposits and marketable securities activity- 13,787
Collections of notes receivable 108 40
Purchase of subsidiary, net of cash
acquired ( 2,226) ( 125)
Capital expenditures ( 731) ( 1,418)
Net cash flows from investing activities( 2,645) 23,441
Cash flows from financing activities:
Notes payable activity, net ( 36) ( 890)
Principal payments on long-term debt ( 1,467) ( 280)
Payment of dividends ( 564) ( 564)
Proceeds from issuance of long-term debt 4 44
Net cash flows from financing activities( 2,063)( 1,690)
Net increase (decrease) in cash and cash
equivalents ( 7,377) 18,323
Cash and cash equivalents beginning of period 130,289 34,801
Cash and cash equivalents end of period $122,912 $ 53,124
<FN>
See Notes to Condensed Consolidated Financial Information.
(1) Significant Accounting Policies
Consolidation Policy
The financial statements include, on a consolidated basis, the
accounts of Katy Industries, Inc. and subsidiaries (Katy) in which it has
greater than 50% interest.
The information furnished reflects all known adjustments which are,
in the opinion of management, necessary for a fair presentation. Interim
figures are subject to year-end audit adjustments.
Inventories
The components of inventories are as follows:
March 31, December 31,
1994 1993
(Thousands of Dollars)
Raw materials.............. $13,113 $13,710
Work in process............ 8,786 9,582
Finished goods............. 18,492 17,433
$40,391 $40,725
New Accounting Pronouncements
On January 1, 1994 Katy adopted Statement of Financial Accounting
Standards ("SFAS") No. 115 "Accounting for Certain Investments in Debt and
Equity Securities". SFAS No. 115 requires, among other things, that
securities which are available for sale be classified as such and stated
at their fair value with the unrealized holding gain or loss accounted for
as a separate component of stockholders' equity.
Adoption of SFAS No. 115 resulted in the reclassification of
marketable securities with a cost of $15,795,000 to securities available-
for-sale. Such securities were also revalued to their fair value on
January 1, 1994 of $31,223,000 and the unrealized holding gain of
$9,257,000, net of related taxes, was accounted for a separate component
of stockholders equity. During the three months ended March 31, 1994
there were no purchases or sales of marketable securities.
(2) Investments, at Equity, and Advances to Unconsolidated Subsidiaries
Katy's investments in and advances to unconsolidated subsidiaries are
comprised of the following:
March 31, 1994 Investments Advances Total
(Thousands of Dollars)
Syratech Corporation $34,053 $ - $34,053
Bee Gee Holding Company, Inc. 6,261 - 6,261
$40,314 $ - $40,314
December 31, 1993 Investments Advances Total
(Thousands of Dollars)
Syratech Corporation $32,977 $ - $32,977
Bee Gee Holding Company, Inc. 6,281 - 6,281
C.E.G.F. (USA) 2,060 4,198 6,258
$41,318 $ 4,198 $45,516
On March 27, 1994 Katy purchased 50% of the outstanding common stock
of C.E.G.F. (USA) for $2,750,000 which purchase results in Katy owning 95%
of C.E.G.F. The excess of the purchase price over the book value of net
assets purchased has been allocated to properties and is being depreciated
over the remaining lives of the assets. As of March 31, 1994 the balance
sheet of C.E.G.F. is included in Katy's Condensed Consolidated Balance
Sheet and beginning in the second quarter of 1994 the income statement of
C.E.G.F. will be included in Katy's Statement of Condensed Consolidated
Operations.
In December, 1992 Syratech Corporation completed an Initial Public
Offering at $16.50 a share. This transaction diluted Katy's ownership
percentage to 28.8% from 36.1%. Katy's share of Syratech's increased
shareholder equity accounts resulted in a credit of $1,369,000 before
income taxes of $534,000 ($.09 per share) to Katy's Statement of Condensed
Consolidated Operations in the first quarter of 1993. At the time of the
Initial Public Offering, Syratech adopted a shareholder rights plan.
Katy's shares are not registered and if sold to a single purchaser would
cause the shareholder rights plan to become effective. Katy accounts for
this investment on a three month lag basis.
The condensed financial information which follows reflects Katy's
proportionate share in the financial position and results of operations of
all of its unconsolidated subsidiaries:
March 31, December 31,
1994 1993
(Thousands of Dollars)
Current assets $35,197 $35,356
Current liabilities ( 12,715) ( 13,864)
Working capital 22,482 21,492
Properties, net 24,959 29,283
Other assets 823 913
Long-term debt ( 5,502) ( 8,979)
Other liabilities ( 5,942) ( 5,234)
Stockholders' equity 36,820 37,475
Unamortized excess of cost
over net assets acquired 3,494 3,843
Investments, at equity,
in unconsolidated subsidiaries$40,314 $41,318
Three Months
Ended March 31
1994 1993
(Thousands of Dollars)
Sales $ 20,894 $ 22,834
Costs and expenses ( 19,575) ( 21,503)
Net income 1,319 1,331
Amortization of excess
of cost over net
assets acquired ( 204) ( 167)
Provision for income taxes( 502) ( 505)
Equity in income of
unconsolidated
subsidiaries $ 613 $ 659
(3) Investments, at Cost
In April, 1994 management of Katy met with Katy's oil exploration
joint venture partners and, based on current facts and circumstances, Katy
has decided not to commit further funds to the oil exploration project and
will not participate in any further activities on the site. Accordingly,
in March, 1994 Katy wrote off its $6,580,000 investment.
In January, 1993 Katy sold its 8% interest, (78,145 shares of common
stock) in Compagnie des Entrepots et Gares Frigorifiques (CEGF), a French
cold storage company, for cash proceeds of $10,953,000 resulting in a pre-
tax gain of $6,081,000.