FORM 10-Q
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
QUARTERLY REPORT UNDER SECTION 13 OR 15 (D)
OF THE SECURITIES EXCHANGE ACT OF 1934
For Quarter Ended September 30, 1994 Commission file number 2-85622
DCS CAPITAL CORPORATION
(Exact name of registrant as specified in its charter)
Delaware 38-2449183
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
2030 Dow Center, Midland, Michigan 48674
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code (517) 636-1000
Not Applicable
(Former name, former address and former fiscal year if changed
since last report)
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 registrant was required to file such reports), and
(2) has been subject to such filing requirements for the past 90 days.
Yes X No
300 shares of common stock, par value $1.00 per share, were outstanding at
September 30, 1994.
PART I. FINANCIAL INFORMATION
ITEM 1. FINANCIAL STATEMENTS
The balance sheets of the DCS Capital Corporation as of Sep. 30, 1994 and
December 31, 1993, statements of income and expenses for the three months and
nine months ended Sep. 30, 1994 and 1993, and cash flows for nine months
ended Sep. 30, 1994 and 1993, and notes thereto are attached.
The unaudited interim financial statements referred to above reflect all
adjustments (consisting of normal recurring accruals) which, in the opinion of
management, are considered necessary for a fair presentation of the results
for the periods covered.
DCS CAPITAL CORPORATION
BALANCE SHEETS
September 30, Dec. 31,
1994 1993
Assets
Current Assets:
Cash and Cash Equivalents $300 $300
Receivables from DCS Capital Partnership 43,518,737 46,387,812
Total 43,519,037 46,388,112
Receivables from DCS Capital
Partnership - Long Term 88,039,122 95,022,269
Total $131,558,159 $141,410,381
Liabilities and Stockholder's Equity
Current Liabilities:
Accounts Payable $3,950 $3,500
Notes Payable 24,884,000 30,388,000
Long-term debt due within one year 14,000,000 14,000,000
Accrued interest 4,630,787 1,996,312
Total 43,518,737 46,387,812
Long-term Debt 88,039,122 95,022,269
Stockholder's Equity:
Common stock ($1 par value; authorized,
issued, and outstanding, 300 shares) 300 300
Total $131,558,159 $141,410,381
DCS CAPITAL CORPORATION
STATEMENTS OF INCOME AND EXPENSES
Three Months Ended Nine Months Ended
Sept. 30, Sept. 30, Sept. 30, Sept. 30,
1994 1993 1994 1993
Interest and Other Income:
Interest earned on advances
to DCS Capital Partnership $3,030,060 $2,830,668 $8,562,052 $8,505,793
Administrative Fees from
DCS Capital Partnership 3,950 14,514 86,709 85,493
Total Income $3,034,010 $2,845,182 $8,648,761 $8,591,286
Interest and Other Expenses:
Interest on short-term debt $371,589 $248,791 $985,589 $771,048
Interest on long-term debt 2,658,471 2,581,877 7,576,463 7,734,745
Administrative and other
expenses 3,950 14,514 86,709 85,493
Total Expenses $3,034,010 $2,845,182 $8,648,761 $8,591,286
DCS CAPITAL CORPORATION
STATEMENTS OF CASH FLOWS
Nine Months Ended September 30,
1994 1993
Net Income $0 $0
Cash Flows from Operating Activities:
Decrease (Increase) in Accounts Receivable 2,869,075 2,884,997
Increase in Accounts Payables 450 3,500
Increase (Decrease) in Accrued Interest 2,634,475 2,516,503
Amortization of Discount on Notes 16,853 16,853
Net Cash Provided (Used) by Operations 5,520,853 5,421,853
Cash Flows from Financing Activities:
Proceeds of Bank of America Notes 270,386,759 263,560,000
Repayment of American Notes (275,890,759) (268,965,000)
Repayment of Swiss Notes (7,000,000) (7,000,000)
Net Cash Used by Financing Activities (12,504,000) (12,405,000)
Cash Flows from Investing Activities:
Decrease in Long-Term Receivables 6,983,147 6,983,147
Net Change in Cash 0 0
Cash Beginning Balance 300 300
Cash Ending Balance $300 $300
DCS CAPITAL CORPORATION
ITEM I - NOTES TO FINANCIAL STATEMENTS
Note 1. Summarized Financial Statements of DCS Capital Partnership
BALANCE SHEET
Sept. 30, Dec. 31,
1994 1993
Assets:
Cash $100 $783
Due from Novacor Chemicals Ltd.:
Note receivable 130,554,820 140,512,391
Accrued interest 991,366 923,134
Investment in DCS Capital Corporation 300 300
Total $131,546,586 $141,436,608
Liabilities and Partners' Capital:
Payable to DCS Capital Corporation 131,520,064 141,410,081
Payable to The Dow Chemical Company 25,922 25,927
Partners' Capital 600 600
Total $131,546,586 $141,436,608
DCS CAPITAL CORPORATION
ITEM I - NOTES TO FINANCIAL STATEMENTS
Note 1. (Continued)
DCS PARTNERSHIP
STATEMENTS OF INCOME AND EXPENSES
Three Months Ended Nine Months Ended
Sept. 30 Sept. 30 Sept. 30, Sept. 30,
1994 1993 1994 1993
Income:
Interest on loans to
Novacor Chemicals Ltd. $3,037,515 $2,848,682 $8,621,471 $8,601,454
Total $3,037,515 $2,848,682 $8,621,471 $8,601,454
Expenses:
Interest on advances from
DCS Capital Corporation $3,030,060 $2,830,668 $8,562,052 $8,505,792
Administrative Expenses:
Paid to DCS Capital
Corporation 3,950 14,514 48,914 85,162
Other 3,505 3,500 10,505 10,500
Total $3,037,515 $2,848,682 $8,621,471 $8,601,454
DCS CAPITAL CORPORATION
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION
AND RESULTS OF OPERATIONS
During the first nine months of 1994, Novacor Chemicals Ltd., continued
repaying its loan from DCS Capital Partnership. These funds were used
by DCS Capital Partnership to repay a loan from DCS Capital Corporation
(the Corporation). The Corporation then used the funds to pay interest
and principal on its outstanding debt.
On September 12, 1994, DCS Capital Corporation notified the holders of
its 12.375% Series B Debentures due October 15, 1996, of their intent to
redeem all outstanding amounts for the redemption price of 103% of the
principal plus accrued interest. On October 15, 1994, U.S. $67,085,000
of principal was redeemed resulting in an extraordinary loss of $2,057,491.
The redemption was made in accordance with the terms and conditions of the
Debentures.
SIGNATURE
Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf by the
undersigned thereupon duly authorized.
DCS CAPITAL CORPORATION
Date: J. P. Reinhard
November 7, 1994 J. P. Reinhard
President