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SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-K
(Mark one)
[X] ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934 [FEE REQUIRED]
For the Fiscal Year Ended December 31, 1995
[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934 [NO FEE REQUIRED]
For the transition period from ___________ to _________
Commission File Number: 0-15661
AMCOL INTERNATIONAL CORPORATION
(Exact Name of Registrant as Specified in its Charter)
DELAWARE 36-0724340
(State or other jurisdiction of incorporation or organization) (I.R.S. Employer Identification No.)
One North Arlington, 1500 West Shure Drive, Suite 500
Arlington Heights, Illinois 60004-7803
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code: (847) 394-8730
Securities registered pursuant to Section 12(b) of the Act: None
Securities registered pursuant to Section 12(g) of the Act:
$.01 par value Common Stock
(Title of Class)
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 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 if disclosure of delinquent filers pursuant to Item
405 of Regulation S-K is not contained herein, and will not be contained, to the
best of registrant's knowledge, in definitive proxy or information statements
incorporated by reference in Part III of this Form 10-K or any amendment to the
Form 10-K. [ ]
The aggregate market value of the $.01 par value Common Stock, held by
non-affiliates of the registrant on March 15, 1996, based upon the closing sale
price on that date as reported in The Wall Street Journal was approximately
$275,821,000.
Registrant had 19,177,407 shares of $.01 par value Common Stock,
outstanding as of March 15, 1996.
DOCUMENTS INCORPORATED BY REFERENCE
Portions of the Proxy Statement to be dated on or about April 8, 1996, are
incorporated by reference into Part III hereof.
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PART I
Item 1. Business
INTRODUCTION
AMCOL International Corporation was originally incorporated in South Dakota
in 1924 as the Bentonite Mining & Manufacturing Co. Its name was changed to
American Colloid Company in 1927, and in 1959, the Company was reincorporated in
Delaware. In 1995, its name was changed to AMCOL International Corporation.
Except as otherwise noted, or indicated by context, the term "Company" refers to
AMCOL International Corporation and its subsidiaries.
The Company may be generally divided into three principal categories of
operations; minerals, absorbent polymers and environmental. The Company also
operates a transportation business primarily for delivery of its own products.
In general, the Company's products are used for their liquid-absorption
properties. The Company is a leading producer of bentonite products, which have
a variety of applications, including use as a bonding agent to form sand molds
for metal castings, as a cat litter, as a moisture barrier in commercial
construction and landfills, and in a variety of other industrial, commercial and
agricultural applications. The Company also manufactures absorbent polymers,
predominantly superabsorbent polymers, for use in disposable baby diapers and
other personal care items, such as adult incontinence and feminine hygiene
products.
The following table sets forth the percentage contributions to net sales of
the Company attributable to its mineral, absorbent polymer, environmental and
transportation segments for the last five calendar years.
Percentage of Sales
-------------------
1995 1994 1993 1992 1991
---- ---- ---- ---- ----
Minerals ............................... 44.5% 58.2% 59.3% 63.3% 66.4%
Absorbent polymers ...................... 34.7 22.1 23.6 17.1 12.9
Environmental ........................... 14.5 11.6 9.2 10.4 11.3
Transportation........................... 6.3 8.1 7.9 9.2 9.4
------ ------ ------ ------ ------
100.0% 100.0% 100.0% 100.0% 100.0%
====== ====== ====== ====== ======
Net revenues, operating profit and identifiable assets attributable to each
of the Company's business segments are set forth in Note 2 of the Company's
Notes to Consolidated Financial Statements included elsewhere herein, which Note
is incorporated herein by reference.
MINERALS
The Company's mineral business is principally conducted through American
Colloid Company in the United States and Volclay Limited in the United Kingdom.
Commercially produced bentonite is a type of montmorillonite clay found in
beds ranging in thickness from two to ten feet under overburden of up to 120
feet. There are two basic types of bentonite, each having different chemical and
physical properties. These are commonly known as sodium (western) bentonite and
calcium (southern) bentonite. A third type of clay, a less pure variety of
calcium montmorillonite called fuller's earth, is used as a form of cat litter
and as a carrier for agri-chemicals in addition to other minor applications.
The Company's principal bentonite products are marketed under various
internationally registered trade names, including VOLCLAY and PANTHER CREEK.
The Company's cat litter is sold under various trade names and private labels.
Principal Markets and Products
Durable Goods
Metalcasting. In the formation of sand molds for metal castings, sand is
bonded with bentonite and various other additives to yield the desired casting
form and surface finish. The Company produces blended mineral binders containing
sodium and calcium bentonites, sold under the trade name ADDITROL. In
addition, several high-performance specialty products are sold to foundries and
companies that service foundries.
Iron Ore Pelletizing. The Company is a major supplier of sodium bentonite
for use as a pelletizing aid in the production of taconite pellets in North
America.
Well Drilling. Sodium bentonite and leonardite are ingredients of drilling
mud, which allow rock cuttings to be suspended and brought to the surface in oil
and gas well drilling. Drilling mud lubricates the drilling bit and coats the
underground formations to prevent hole collapse and drill bit seizing. The
Company's primary trademark for this application is PREMIUM GEL.
Other Industrial. The Company is a supplier of fuller's earth products for
use as an oil and grease absorbent in industrial applications. It also produces
bentonite and bentonite blends for the construction industry, which are used as
a plasticizing agent in cement, plaster and bricks, and as an emulsifier in
asphalt.
Consumable Goods
Cat Litter. The Company produces two types of cat litter products, a
fuller's earth-based (traditional) product and a sodium bentonite-based
scoopable (clumping) litter. The Company's scoopable products' clump-forming
capability traps urine, allowing for easy removal of the odor-producing elements
from the litter box. Scoopable litter has grown to 42% of the U.S. grocery
market for cat litter in 1995 from 0.4% in 1989. Both types of products are sold
primarily to private label grocery and mass merchandisers, though the Company
also sells its own brands to the grocery, pet store and mass markets. The
Company's products are marketed under various trade names.
Fine Chemicals. Purified grades of sodium bentonite are marketed to the
pharmaceutical and cosmetics industries. Small amounts of purified bentonite act
as a binding agent for pharmaceutical tablets, and bentonite's expansion quality
also aids in tablet disintegration. Bentonite also acts as a suspension agent
and thickener in lotions and has a variety of other specialized uses as a flow
control additive. Calcium bentonite is used as a catalyst or as a clarifying
agent for edible oils, fats, dimer acids and petroleum products.
Agricultural. Sodium bentonite, calcium bentonite and fuller's earth are
sold as pelletizing aids in livestock feed and as anticaking agents for feeds
during storage or in transit. Fuller's earth and sodium bentonite are used as
carriers for agri-chemicals. Fuller's earth is also used as a drying agent in
blending liquid and dry fertilizers prior to application.
Sales and Distribution
In 1995, the top two customers accounted for approximately 9% of the
Company's mineral sales, and the top five customers accounted for approximately
16% of such sales. Products are sold domestically and internationally to
approximately 3,700 customers.
The Company has established industry-specialized sales groups staffed with
technically-oriented salespersons serving each of the Company's major markets.
Certain groups have networks of distributors and representatives, including
companies that warehouse at strategic locations.
Most of its customers in the metalcasting industry are served on a direct
basis by teams of Company sales, technical and manufacturing personnel. The
Company also provides training courses and laboratory testing for customers who
use the Company's products in the metalcasting process.
Sales to the oil well drilling industry are primarily made directly to oil
well drilling mud service companies, both under the Company's tradename and
under private label. Because bentonite is a major component of drilling muds,
two service companies have captive bentonite operations. The Company's potential
market is, therefore, generally limited to those oil well service organizations
which are not vertically integrated, or do not have long-term supply
arrangements with other producers.
Sales to the cat litter market are made on a direct basis and through
industry brokers. All sales to the iron ore pelletizing industry are made
directly to the end user. Sales to the Company's remaining markets are made
primarily through independent distributors and representatives.
Competition
Bentonite. The Company is one of the largest producers of bentonite
products in the United States. There are at least four other major domestic
producers of sodium bentonite and at least one other major domestic producer of
calcium bentonite. Two of the domestic producers are companies primarily in
other lines of business and have substantially greater financial resources than
the Company. There also is substantial global competition. The Company's
bentonite processing plants in the United Kingdom and Australia compete with a
total of six U.K. and Australian processors. Competition in both the Company's
domestic and international markets is essentially a matter of product quality,
price, delivery, service and technical support, and it historically has been
very vigorous.
Fuller's Earth. There are approximately ten major competitors in the United
States, some of which are larger and have substantially greater financial
resources than the Company. Price, service, product quality and geographical
proximity to the market are the principal methods of competition in the
Company's markets for fuller's earth.
Seasonality
Although business activities in certain of the industries in which the
Company's mineral products are sold (such as well drilling) are subject to
factors such as weather conditions, the Company does not consider its mineral
business as a whole to be seasonal.
ENVIRONMENTAL
Principal Products and Markets
Through its wholly owned subsidiary, Colloid Environmental Technologies
Company (CETCO), the Company sells sodium bentonite, products containing sodium
bentonite and various other products and equipment for use in environmental and
construction applications.
CETCO sells bentonite, and its geosynthetic clay liner products under the
BENTOMAT and CLAYMAX trade names, for lining and capping landfills and for
containment in tank farms, leach pads, waste stabilization lagoons and
decorative ponds.
The Company's VOLCLAY Waterproofing System is sold to the non-residential
construction industry. This line includes a product sold under the registered
trade name VOLCLAY PANELS consisting of biodegradable cardboard panels filled
with sodium bentonite installed to prevent leakage through underground
foundation walls. A waterproofing liner product with the trade name VOLTEX, a
joint sealant product with the trade name WATERSTOP-RX and a waterproofing
membrane for concrete split slabs and plaza areas sold under the trade name
VOLCLAY SWELLTITE, round out the principal components of the product line.
CETCO sells elastomeric urethane coatings for use in vehicular traffic
decks, roofs, balconies and pedestrian walkways. The products, sold under the
trade name ACCOGUARD, are among the more environmentally friendly primers and
coatings available to the construction industry.
CETCO's drilling products are used to install monitoring wells and water
wells, rehabilitate existing water wells and seal abandoned exploration drill
holes. VOLCLAY GROUT, BENTOGROUT and VOLCLAY Tablets are among the trade
names for products used in these applications.
Bentonite-based flocculents and customized equipment are used to remove
emulsified oils and heavy metals from wastewater. Bentonite-based products are
formulated to solidify liquid waste for proper disposal in landfills. These
products are sold primarily under the SYSTEM-AC, RM10 and SORBOND trade
names.
CETCO also specializes in providing absorption equipment and services to
the environmental remediation industry, water treatment systems employing
dissolved air flotation technology and activated carbon purification systems for
the beverage and municipal water treatment industries. Its operations include a
fully equipped engineering and fabrication facility for producing pressure
vessels used in filtration applications. In addition, a network of regional
service centers provides services and distribution to support markets such as
remediation of petroleum-contaminated groundwater. The Company acquired a carbon
regeneration facility during 1995, allowing for the regeneration and reuse of
spent carbon obtained from its service centers.
Competition
CETCO has four principal competitors in the geosynthetic clay liner market.
The construction and wastewater treatment product lines are niche businesses
which compete primarily with alternative technologies. The service center
remediation business has three major competitors, one of which is substantially
larger and with greater resources. The groundwater monitoring, well drilling and
sealants products compete with the Company's traditional rivals in the sodium
bentonite business. Competition is based on product quality, service, price,
technical support and availability of product. Historically, the competition has
been very vigorous.
Sales and Distribution
In 1995, no customer accounted for more than 5% of environmental sales.
CETCO products are sold domestically and internationally. CETCO sells most of
its products through independent distributors and commissioned representatives.
Contract remediation work is done on a direct basis working with consulting
engineers engaged by the customers.
CETCO employs technically oriented marketing personnel to support its
network of distributors and representatives. In the service center business,
salespersons develop business in the regional markets to supplement contract
remediation work performed for national accounts.
Seasonality
Much of the business in the environmental sector is impacted by weather and
soil conditions. Many of the products cannot be applied in harsh weather
conditions and, as such, sales and profits tend to be stronger April through
October. As a result, the Company considers this segment to be seasonal.
Research and Development
The minerals and environmental segments share research and laboratory
facilities. Both CETCO and the U.K. minerals operation have independent research
capabilities. Technological developments are shared between the companies,
subject to license agreements where appropriate.
Mineral Reserves
Both the mineral and environmental segments have sodium bentonite reserves
and processing plants. The discussion of mineral reserves which follows applies
to both units.
MINERALS/ENVIRONMENTAL COMMON OPERATIONAL FUNCTIONS
Mineral Reserves
The Company has reserves of sodium and calcium bentonite at various
locations in Wyoming, South Dakota, Montana, Nevada and Alabama, and reserves of
fuller's earth in Tennessee and Illinois. At 1995 consumption rates, based on
internal estimates, the Company believes that its proven reserves of
commercially usable sodium bentonite will be adequate for approximately 30 years
(although reserves for certain specialty uses differ significantly from this
30-year period) and that its proven reserves of calcium bentonite and fuller's
earth will be adequate for approximately 20 years and in excess of 40 years,
respectively. While the Company, based upon its experience, believes that its
reserve estimates are reasonable and its title and mining rights to its reserves
are valid, the Company has not obtained any independent verification of such
reserve estimates or such title or mining rights. The Company owns or controls
the properties on which its reserves are located through long-term leases,
royalty agreements and patented and unpatented mining claims. A majority of the
Company's bentonite reserves are owned. All of the properties on which the
Company's reserves are located are either physically accessible for the purposes
of mining and hauling, or the cost of obtaining physical access would not be
material.
Of the total reserves, approximately 20% are located on unpatented mining
claims owned or leased by the Company, on which the Company has the right to
undertake regular mining activity. To retain possessory rights, a fee of $100
per year for each unpatented mining claim is required. The validity of title to
unpatented mining claims is dependent upon numerous factual matters. The Company
believes that the unpatented mining claims which it owns have been located in
compliance with all applicable federal, state and local mining laws, rules and
regulations. The Company is not aware of any material conflicts with other
parties concerning its claims. From time to time, members of Congress as well as
members of the executive branch of the federal government have proposed
amendments to existing federal mining laws. The various amendments would have
had a prospective effect on mining operations on federal lands and include,
among other things, the imposition of royalty fees on the mining of unpatented
claims, the elimination or restructuring of the patent system and an increase in
fees for the maintenance of unpatented claims. To the extent that future
proposals may result in the imposition of royalty fees on unpatented lands, the
mining of the Company's unpatented claims may become uneconomic, and royalty
rates for privately leased lands may be affected. The Company cannot predict the
form that any amendments might ultimately take or whether or when any such
amendments might be adopted.
The Company's fuller's earth reserves are both owned and leased. The loss
of any of the leased reserves could materially decrease the Company's reserves
of fuller's earth, but it is believed that alternative economical reserves could
be developed.
The Company maintains a continuous program of exploration for additional
reserves and attempts to acquire reserves sufficient to replenish its
consumption each year, but it cannot assure that additional reserves will
continue to become available.
The Company oversees all of its mining operations, including its
exploration activity and the obtaining of necessary state and federal mining
permits.
The following table shows a summary of minerals sold by the Company for the
last five years in short tons:
Tons of Minerals Sold (1)
-------------------------
1995 1994 1993 1992 1991
---- ---- ---- ---- ----
(In thousands)
Sodium Bentonite:
Belle Fourche, SD ............................... 133 203 147 124 96
Upton, WY ....................................... 434 424 351 334 344
Colony, WY ...................................... 809 791 701 776 695
Lovell, WY ...................................... 268 299 273 103 85
Tons of Minerals Sold (1)
-------------------------
1995 1994 1993 1992 1991
---- ---- ---- ---- ----
(In thousands)
Calcium Bentonite:
Aberdeen, MS .................................... 63 70 61 62 43
Sandy Ridge, AL ................................. 170 174 167 155 142
Fuller's Earth:
Mounds, IL ...................................... 203 242 239 225 211
Paris, TN (2) ................................... 54 52 17 -- --
Leonardite:
Gascoyne, ND .................................... 19 17 15 13 20
<FN>
(1) May include minerals of a different type not mined at this location.
(2) Acquired in 1992 and commenced operations in 1993.
</FN>
The Company estimates that available supplies of other materials utilized
in its mineral business are sufficient to meet its production requirements for
the foreseeable future.
Mining and Processing
Bentonite. Bentonite is surface mined, generally with large earthmoving
scrapers, and then loaded into trucks and off-highway haul wagons for movement
to the processing plants. The mining and hauling of the Company's clay is done
both by the Company and by independent contractors. Each of the Company's
processing plants generally maintain stock piles of unprocessed clay of
approximately four to eight months' production requirements.
At the processing plants, bentonite is dried, crushed and sent through
grinding mills, where it is sized into shipping form, then chemically modified
where needed and transferred to silos for automatic bagging or shipment in bulk.
Virtually all production is shipped as processed, rather than stored for
inventory.
Fuller's Earth. Fuller's earth is also surface mined using a combination of
scrapers, dozers and loaders. Crude clay is then loaded into dump trucks and
hauled to the processing plant where it is dried or calcined, crushed and
screened. Inventories of unprocessed clay generally are no more than a two-week
supply. Mining is thus performed on a year-round basis.
Product Development and Patents
The Company works actively with customers in each of its major markets in
order to develop commercial applications of specialized grades of bentonite, and
it maintains a bentonite research center and laboratory testing facility
adjacent to its corporate headquarters as well as one in the United Kingdom When
a need for a product which will accomplish a particular goal is perceived, the
Company will work to develop the product, research its marketability and study
the feasibility of its production. The Company will also continue its practice
of co-developing products with customers or others as new needs arise. The
Company's development efforts emphasize markets with which it is familiar and
products for which it believes there is a viable market.
The Company holds a number of U.S. and international patents covering the
use of bentonite and products containing bentonite. The Company follows the
practice of obtaining patents on new developments whenever feasible. The
Company, however, does not consider that any one or more of such patents is
material to its Minerals and Environmental businesses as a whole.
Regulation and Environmental
The Company believes it is in material compliance with applicable
regulations now in effect with respect to surface mining. Since reclamation of
exhausted mining sites has been a regular part of the Company's surface mining
operations for the past 27 years, maintaining compliance with current
regulations has not had a material effect on its mining costs. The costs of
reclamation are reflected in the prices of the bentonite sold.
The grinding and handling of dried clay is part of the production process,
and, because it generates dust, the Company's mineral processing plants are
subject to applicable clean air standards (including Title V of the Clean Air
Act). All of the Company's plants are equipped with dust collection systems. The
Company has not had and does not presently anticipate any significant problems
in connection with its dust emission, though it expects ongoing expenditures for
the maintenance of its dust collection systems and required annual fees.
The Company's mineral operations are also subject to other federal, state,
local and foreign laws and regulations relating to the environment and to health
and safety matters. Certain of these laws and regulations provide for the
imposition of substantial penalties for non-compliance. While the costs of
compliance with, and penalties imposed under, these laws and regulations have
not had a material adverse effect on the Company, future events, such as changes
in, or modified interpretations of, existing laws and regulations or enforcement
policies or further investigation or evaluation of potential health hazards of
certain products, may give rise to additional compliance and other costs that
could have a material adverse effect on the Company.
ABSORBENT POLYMERS
Since the early 1970s, the Company has utilized a technique called modified
bulk polymerization ("MBP") to manufacture water soluble polymers for the oil
well drilling industry. This technique has been modified to produce
superabsorbent polymers ("SAP"), a category of polymers known for its
extremely high water absorbency. Chemdal Corporation was formed in 1986 to
manufacture and market absorbent polymers, with primary emphasis on SAP. To
date, the Company's sales of SAP have been almost exclusively for use as an
absorbent in personal care products, primarily disposable baby diapers. The
Company produces SAP at its U.S. facility with an annual capacity of 70,000
tons, and at its U.K. facility through Chemdal Limited, with an annual capacity
of 40,000 tons.
Demand for the Company's products in the United States has grown
significantly in recent years as the amount of SAP used in new diaper designs
has increased. SAP is more absorbent than the fluff pulp used in traditional
disposable diapers. The use of SAP in diapers allows for a thinner diaper that
occupies less shelf space in stores and less landfill space. SAP also helps to
hold moisture inside the diaper, thereby causing less irritation to the wearer's
skin and reducing leakage. Based upon the Company's expectations regarding
consumer and retail preferences, the Company believes that SAP will continue to
be used in new diaper designs. While no assurance can be given that markets in
developing countries will follow the trends of developed countries, the Company
also believes that disposable diapers containing increasing amounts of SAP will
gain more acceptance in developing countries as per capita incomes in those
countries rise.
Principal Products and Markets
The Company's SAP is primarily marketed under the trade names ARIDALLAE and
ASAPAE. To date, the Company's customers have been primarily private label and
national brand diaper manufacturers. The Company believes that this segment of
the diaper market has grown faster than the brand name segment, which currently
accounts for the majority of that market. During 1995, the Company began selling
to manufacturers of brand name personal care products and is seeking to increase
its sales to that segment of the market.
Sales and Distribution
The Company sells SAP to the personal care market in the United States on a
direct basis and, in other countries, both on a direct basis and through
distributors. The Company expects to rely increasingly on a direct sales
approach in the personal care market. The Company's direct sales efforts employ
a team approach that includes both technical and marketing representatives. In
1995, the top two customers accounted for approximately 45% of the Company's
polymer sales, and the top five customers accounted for approximately 58% of
such sales.
Research and Development
The Company continually seeks to improve the performance of its absorbent
polymers. It also intends to pursue additional applications for its absorbent
polymers in other markets either directly, or indirectly through marketing or
distribution arrangements. Polymers also have applications in water treatment
and in cosmetics, and acrylic-based polymers can be used in the newer, more
concentrated detergents which use smaller packaging.
The Company owns several patents relating to its MBP process developed in
the 1970s, and to modifications of its MBP process developed in the 1980s which
relate to its SAP manufacturing process. The patents on the MBP process have
begun to expire. The patents relating to the SAP modifications thereto expire at
various times commencing in 2002.
The Company follows the practice of obtaining patents on new developments
whenever reasonably practicable. The Company also relies on unpatented know-how,
trade secrets and improvements in connection with its SAP manufacturing process.
There can be no assurance that others will not independently develop
substantially equivalent proprietary information and techniques, or otherwise
gain access to or disclose the Company's trade secrets, or that the Company can
meaningfully protect its rights to its unpatented trade secrets.
Raw Materials
The process used by the Company to produce SAP primarily uses acrylic acid
and, to a lesser extent, potassium and sodium alkalies and catalysts. The
Company's polymer operations are supplied by three major producers of acrylic
acid. The Company has been able to obtain adequate supplies of acrylic acid to
meet its production requirements to date.
The Company knows of four acrylic acid suppliers in the United States,
three in Europe and four in the Far East. The Company is aware that at least
five of these suppliers manufacture SAP and, therefore, compete with the Company
in this market.
Potassium and sodium alkalies are available on a commercial basis worldwide
with no meaningful limitations on availability. Catalysts are available from a
small number of high-technology chemical manufacturers; however, the Company
does not anticipate any difficulties in obtaining catalysts.
Competition
The Company believes that there are approximately five polymer
manufacturers and several importers that compete with its U.S. operation,
several of which have substantially greater resources than the Company. The
Company's U.K. operation competes with a total of approximately seven producers
and several importers. Only one producer has substantially more production
capacity and several producers have greater resources than the Company. Further,
several of these competitors are vertically integrated and produce acrylic acid,
the primary cost component of SAP. The competition in both the Company's
domestic and international markets is primarily a matter of product quality and
price, and it historically has been very vigorous. The Company believes that its
polymer manufacturing process has enabled it to add polymer production capacity
at a lower capital investment cost than that required by other processes
currently in widespread commercial use.
Regulation and Environmental
The Company's production process for SAP consumes virtually all chemicals
and other raw materials used in the process. Virtually all materials which are
not consumed by the end product are recycled through the process. The Company's
polymer plants, therefore, generate a minimal amount of chemical waste.
The handling of dried polymer is part of the production process, and,
because this generates dust, the Company's polymer plants must meet clean air
standards. The Company's polymer plants are equipped with dust collection
systems, and the Company believes that it is in material compliance with
applicable state and federal clean air regulations. The Company's absorbent
polymer business is subject to other federal, state, local and foreign laws and
regulations relating to the environment and to health and safety matters.
Certain of these laws and regulations provide for the imposition of substantial
penalties for non-compliance. While the costs of compliance with, and penalties
imposed under, these laws and regulations have not had a material adverse effect
on the Company, future events, such as changes in, or modified interpretations
of, existing laws and regulations or enforcement policies or further
investigation or evaluation of potential health hazards of certain products, may
give rise to additional compliance and other costs that could have a material
adverse effect on the Company.
TRANSPORTATION
The Company operates a long-haul trucking business and a freight brokerage
business primarily for delivery of its own products in package and bulk form
throughout the continental United States. Through its transportation operations,
the Company is better able to control costs, maintain delivery schedules and
assure equipment availability. The long-haul trucking subsidiary performs
transportation services on outbound movements from the Company's production
plants and attempts to haul third parties' products on return trips whenever
possible. In 1995, approximately 74% of the revenues of this segment involved
the Company's products.
FOREIGN OPERATIONS AND EXPORT SALES
Approximately 35% of the Company's 1995 net sales were to customers in
approximately 60 countries other than the United States. To enhance its overseas
market penetration, the Company maintains a mineral processing plant in the
United Kingdom A processing plant, 60% owned by the Company, operates in
Australia, as well as a blending plant in Canada. Through a joint venture, the
Company also has the capability to process minerals in Mexico. Chartered vessels
deliver large quantities of the Company's bulk, dried sodium bentonite to the
plants in the United Kingdom and Australia, where it is processed and mixed with
other clays and distributed throughout Europe and Australia. The Company's U.S.
bentonite is also shipped in bulk to Japan. The Company also maintains a
worldwide network of independent dealers, distributors and representatives.
The Company produces absorbent polymers at its U.S. and U.K. plants, and
serves markets in Western Europe, South America, Asia and the Middle East.
The Company's international operations are subject to the usual risks of
doing business abroad, such as currency devaluations, restrictions on the
transfer of funds and import and export duties. The Company, to date, has not
been materially affected by any of these risks.
See Note 2 of the Company's Notes to Consolidated Financial Statements
included elsewhere herein, which Note is incorporated by reference for sales
attributed to foreign operations and export sales from the United States.
EMPLOYEES
As of December 31, 1995, the Company employed 1,375 persons, 241 of whom
were employed overseas. At December 31, 1995, there were approximately 751, 289,
261 and 24 persons employed in the Company's minerals, absorbent polymers,
environmental and transportation segments, respectively, along with 50 corporate
employees. Operating plants are adequately staffed, and no significant labor
shortages are presently foreseen. Approximately 187 of the Company's employees
in the United States and approximately 33 of the Company's employees in the
United Kingdom are represented by six labor unions, which have entered into
separate collective bargaining agreements with the Company. Employee relations
are considered good.
Item 2. Properties
The Company and its subsidiaries operate the following principal plants,
mines and other facilities, all of which are owned, except as noted:
Location Principal Function
MINERALS
Belle Fourche, SD.................. Mine and process sodium bentonite
Colony, WY (two plants)............ Mine and process sodium bentonite
Upton, WY ......................... Mine and process sodium bentonite
Mounds, IL......................... Mine and process fuller's earth
Paris, TN.......................... Mine and process fuller's earth
Rock Springs, NV................... Mine and process calcium bentonite and diatomaceous earth
Gascoyne, ND....................... Mine and process leonardite
Aberdeen, MS....................... Process calcium bentonite
Letohatchee, AL.................... Package and load calcium bentonite
Sandy Ridge, AL.................... Mine and process calcium bentonite; blend ADDITROLAE
Columbus, OH (1)................... Blend ADDITROLAE; process chromite sand
Granite City, IL (1)............... Package cat litter; process chromite sand
Waterloo, IA....................... Blend ADDITROLAE
Albion, MI (1)..................... Blend ADDITROLAE
York, PA........................... Blend ADDITROLAE; package cat litter
Chattanooga, TN.................... Blend ADDITROLAE
Neenah, WI......................... Blend ADDITROLAE
Toronto, Ontario, Canada........... Blend ADDITROLAE
Geelong, Victoria, Australia (1)... Process bentonite; blend ADDITROLAE
Birkenhead, Merseyside, U.K. (2)... Process bentonite and chromite sand; blend ADDITROLAE;
research laboratory
ENVIRONMENTAL
Lovell, WY......................... Mine and process sodium bentonite
Villa Rica, GA .................... Manufacture BentomatAEgeosynthetic clay liner
Sulphur, LA ....................... Manufacture environmental equipment
Fairmount, GA (1).................. Manufacture ClaymaxAEgeosynthetic clay liner
Morgantown, WV (1)................. Reactivate spent carbon for Regeneration Technologies, Inc.
Salt Lake City, UT (1)............. Sales and engineering for CETCO
Various service centers (1)........ Distribution and service facilities for CETCO recycling services
ABSORBENT POLYMERS
Aberdeen, MS....................... Manufacture absorbent polymers
Birkenhead, Merseyside, U.K. ...... Manufacture absorbent polymers; research laboratory and
headquarters for Chemdal Limited
Palatine, IL (1)................... Chemdal Corporation headquarters; research laboratory
TRANSPORTATION
Scottsbluff, NE.................... Transportation headquarters and terminal
CORPORATE
Arlington Heights, IL (1) ......... Corporate headquarters; CETCO headquarters;
Nanocor, Inc. headquarters; research laboratory
<FN>
(1) Leased.
(2) Certain offices & facilities are leased.
</FN>
Item 3. Legal Proceedings
The Company is party to a number of lawsuits arising in the normal course
of its business. The Company does not believe that any pending litigation will
have a material adverse effect on its consolidated financial position.
The Company's processing operations require permits from various
governmental authorities. From time to time, the Company has been contacted by
government agencies with respect to required permits or compliance with existing
permits, while the Company has been notified of certain situations of
non-compliance, management does not expect the fines, if any, to be significant.
Item 4. Submission of Matters to a Vote of Security Holders
None.
Executive Officers of Registrant
Name Age Principal Occupation for Last Five Years
---- --- ----------------------------------------
John Hughes 53 President and Chief Executive Officer since 1985; a Director since 1984.
Peter L. Maul 46 Vice President since 1993; prior thereto Vice President of Marketing at
Chemstar, Inc. 1986-1992; prior thereto, Vice President at American Colloid
Company.
Roger P. Palmer 59 Senior Vice President since 1994 and President of Colloid Environmental
Technologies Company since August 1994; prior thereto, Vice President since
1990 and Vice President and General Manager of Colloid Environmental
Technologies Company since 1991; prior thereto, Group Sales Manager of the
Building Materials Group.
Clarence O. Redman 53 Secretary of the Company since 1982; a Director since 1989 and Partner and
Chief Executive Officer, Keck, Mahin & Cate (law firm).*
Paul G. Shelton 46 Senior Vice President - Chief Financial Officer since 1994 and President of
AMCOL International's transportation units since May 1994; prior thereto,
Vice President - Chief Financial Officer since 1984; a Director since 1988.
Robert C. Steele 43 Senior Vice President since 1994 and President of American Colloid Company
since May, 1994; prior thereto, Vice President since 1986.
Lawrence E. Washow 43 Senior Vice President since 1994 and President of Chemdal International
Corporation since September 1992; prior thereto, Vice President of the
Company and Vice President and General Manager of Chemdal Corporation since
1986.
- ------------------
<FN>
* Keck, Mahin & Cate has been retained as counsel to the Company.
</FN>
All officers of the Company are elected annually by the Board of Directors
for a term expiring at the annual meeting of directors following their election
or when their respective successors are elected and shall have qualified. All
directors are elected by the stockholders for a three-year term or until their
respective successors are elected and shall have qualified.
PART II
Item 5. Market for Registrant's Common Equity and Related Stockholder Matters.
The Common Stock is traded on The Nasdaq Stock Market under the symbol
ACOL. The following table sets forth, for the periods indicated, the high and
low sale prices of the Common Stock, as reported by The Nasdaq Stock Market, and
cash dividends declared per share. Prices and cash dividends have been adjusted
to reflect three-for-two and two-for-one stock dividends paid in January 1993
and June 1993, respectively.
Cash
Dividends
Stock Price Declared
----------------------- Per
High Low Share
---- ----- ---------
Fiscal Year Ended December 31, 1995:
1st Quarter ........................................ $14.63 $11.87 $ .0600
2nd Quarter ........................................ 16.25 12.75 .0600
3rd Quarter ........................................ 18.25 15.25 .0700
4th Quarter ........................................ 17.37 14.13 .0700
Fiscal Year Ended December 31, 1994:
1st Quarter ........................................ 25.25 13.50 .0600
2nd Quarter ........................................ 16.25 10.50 .0600
3rd Quarter ........................................ 16.00 12.00 .0600
4th Quarter ........................................ 17.75 13.75 .0600
Fiscal Year Ended December 31, 1993:
1st Quarter ........................................ 12.75 9.13 .0500
2nd Quarter ........................................ 15.63 11.25 .0500
3rd Quarter ........................................ 28.50 13.25 .0500
4th Quarter ........................................ 33.00 19.25 .0500
<FN>
- --------------------
As of February 21, 1996, there were 2,304 holders of record of the Common
Stock, excluding shares held in street name.
</FN>
The Company has paid cash dividends every year for over 58 years. The
Company intends to continue to pay cash dividends on its Common Stock, but the
payment of dividends and the amount and timing of such dividends will depend on
the Company's earnings, capital requirements, financial condition and other
factors deemed relevant by the Company's Board of Directors.
Item 6. Selected Financial Data
The following is selected financial data for the Company and its
subsidiaries for the five years ended December 31, 1995. Per share amounts have
been adjusted to reflect a two-for-one stock split and a three-for-two stock
split effected in the nature of stock dividends in June 1993 and January 1993,
respectively. All per share calculations are fully diluted, based on weighted
average number of common and common equivalent shares outstanding during the
year.
SUMMARY OF OPERATIONS
(Dollars in thousands, except per share amounts)
PER SHARE 1995 1994 1993 1992 1991
---- ---- ---- ---- ----
Shareholders' Equity $ 7.90 $ 7.34 $ 7.38 $ 3.48 $ 3.42
Net Income .90 .78 .76 .52 .26
Dividends .26 .24 .20 .16 .15
Shares Outstanding 19,679,480 19,486,520 17,223,854 16,480,644 15,898,944
INCOME DATA
Sales $ 347,688 $ 265,443 $ 219,151 $ 182,669 $ 148,790
Gross Profit 76,562 59,487 49,843 42,454 32,409
Operating Profit 32,397 23,991 21,312 16,510 9,531
Net Interest Expense (6,727) (2,332) (3,036) (3,484) (4,363)
Net Other Income (Expense) 1,217 544 474 (325) 246
Pretax Income 26,887 22,203 18,750 12,701 5,414
Income Taxes 9,082 6,828 5,567 4,105 1,207
Net Income 17,771 15,283 13,120 8,506 4,152
BALANCE SHEET
Current Assets (2) $ 126,337 $ 108,691 $ 95,870 $ 63,072 $ 64,660
Net Property, Plant
& Equipment 175,211 141,420 83,233 61,231 62,245
Total Assets (2) 322,366 263,899 184,029 129,646 132,441
Current Liabilities 35,882 36,617 27,401 21,092 21,534
Long-term Debt 117,016 71,458 16,689 38,312 43,792
Shareholders' Equity (2) 155,494 143,073 127,132 57,338 54,316
RATIO ANALYSIS
Pretax Margin 7.73% 8.36% 8.56% 6.95% 3.64%
Effective Tax Rate 33.78 30.75 29.69 32.32 22.29
Net Margin 5.11 5.76 5.99 4.66 2.79
Return On Ending Assets 5.51 5.79 7.13 6.56 3.13
Return On Ending Equity 11.43 10.68 10.32 14.83 7.64
OPERATING DATA
Operating Margins (1):
Minerals 10.19% 12.72% 9.47% 12.12%
Absorbent Polymers 14.00 13.58 19.97 11.77
Environmental 10.52 5.79 13.85 13.96
Transportation 4.88 4.74 4.02 3.96
Total Operating Margin 9.32 9.04 9.72 9.04
<FN>
- -------------------------
(1) The Company did not restate the segment information prior to 1992.
(2) Restated 1991 through 1994 for change in inventory method.
</FN>
Item 7. Management's Discussion and Analysis of Financial Condition and Results
of Operations
Liquidity and Financial Condition
At December 31, 1995, the Company had outstanding debt of $121.1 million
(including both long- and short-term debt) and cash and cash equivalents of $1.9
million, compared with $75.0 million in debt and $10.4 million in cash and cash
equivalents at December 31, 1994. The long-term debt represented 42.9% of total
capitalization at December 31, 1995, compared with 33.3% at December 31, 1994.
The Company had a current ratio of 3.52 to 1 on December 31, 1995, with
approximately $90.5 million in working capital, compared with 2.97 to 1 and
$72.1 million, respectively, at December 31, 1994. The $18.4 million increase
(25.5%) in working capital resulted from sales growth of 31.0%, and included
increases in accounts receivable of $15.8 million (30.2%), inventories of $6.9
million (17.1%) and prepaid expenses of $3.1 million offset by an $8.5 million
reduction in cash balances. Prepaid expenses include approximately $2.0 million
in income taxes, which will be applied toward 1996 estimated tax payments. The
cash balances were lower, as proceeds of the October 1994 private debt placement
were invested in capital expenditures.
On September 25, 1995, the Company increased its revolving credit
facility from $50 million to $100 million and extended its term from October
1997 to October 2000. The Company had $43.2 million in unused, committed credit
lines at December 31, 1995.
The Company currently anticipates capital expenditures of approximately $40
million for 1996. Capacity expansion of the U.K. polymer operation and a
modification of existing U.S. polymer capacity are anticipated; however, no
acquisitions are included in the estimate.
The current indicated annual dividend rate is $.28 per share. If the
rate remains constant and the Board of Directors continues to declare dividends,
the dividend payments will be approximately $5.4 million in 1996, compared with
approximately $5.0 million in 1995.
Management believes that the Company has adequate resources to fund the
capital expenditures discussed above, the dividend payments and anticipated
increases in working capital requirements through its existing, committed credit
lines, cash balances and operating cash flow. In addition to the capital
expenditures which have been authorized by the Board of Directors, management
continues to explore growth opportunities in the environmental and minerals
markets, as well as further capacity expansion in the polymer segment.
Results of Operations for the Three Years Ended December 31, 1995
Net sales increased by $82.2 million, or 31.0% , from 1994 to 1995, and by
$46.3 million, or 21.1%, from 1993 to 1994. Operating profits increased by $8.4
million, or 35.0%, from 1994 to 1995, and by $2.7 million, or 12.6%, from 1993
to 1994. A review of sales, gross profit, general, selling and administrative
expenses, and operating profit by segment follows:
Minerals
Year Ended December 31,
----------------------------------------------------------------------------------------------
1995 1994 1993 1995 vs. 1994 1994 vs. 1993
---------------- --------------- ------------------ ----------------- -----------------
$ % $ %
----- ----- ----- -----
(Dollars in Thousands)
Net sales....... $154,840 100.0% $154,490 100.0% $129,879 100.0% 350 0.2% $24,611 18.9%
Cost of sales... 122,264 79.0% 121,213 78.5% 104,921 80.8%
------- ------ ------- ----- --------- -----
Gross profit. 32,576 21.0% 33,277 21.5% 24,958 19.2% (701) -2.1% 8,319 33.3%
General, selling and
administrative expenses 16,801 10.9% 13,632 8.8% 12,653 9.7% 3,169 23.2% 979 7.7%
------ ----- ------ ----- ------ ----
Operating profit 15,775 10.1% 19,645 12.7% 12,305 9.5% (3,870) -19.7% 7,340 59.7%
Sales increased in the durable goods and consumables sectors from 1993
to 1994, both domestically and overseas, as a result of an improved economy,
higher U.K. sales volume, $2.3 million higher royalty income and a full year of
sales to the agricultural carrier market. Sales decreased domestically during
1995 as royalties declined by approximately $3.8 million, as anticipated, and
the principal customer for clay carrier products switched to a local, non-clay
alternative at mid-year. Construction and environmental products contributed to
the U.K. operation's sales growth, as did favorable translation exchange rates.
Gross profit margins for 1995 declined from those of 1994 by
approximately 2.3%, compared with a 12.0% improvement from 1993 to 1994. The
1993 to 1994 gross profit margin improvement was primarily related to the
increased royalties, whereas the decline in gross profit margin from 1994 to
1995 was not as severe as would have been anticipated with the royalty decline,
largely due to price increases in certain markets.
General, selling and administrative expenses for 1995 increased by $3.2
million, or 23.2%, over 1994, which were 7.7% higher than the 1993 level. Higher
costs for research and development, and management information systems
contributed to the higher general, selling and administrative expense increase.
A more precise division of expenses shared between minerals and corporate was
accomplished during 1995 than for 1994, causing a higher percentage increase.
The lower royalty level experienced in 1995 is anticipated to continue,
as many of the agreements have been converted to fully paid licenses. Cat litter
volume continues to grow. The cat litter facilities added during 1995, however,
have yet to be fully utilized. This temporary overcapacity, plus lower business
volumes which were experienced in other markets during the last months of 1995,
are likely to depress operating margins in the near-term.
Absorbent Polymers
Year Ended December 31,
----------------------------------------------------------------------------------------------
1995 1994 1993 1995 vs. 1994 1994 vs. 1993
---------------- --------------- ------------------ ----------------- -----------------
$ % $ %
----- ----- ----- -----
(Dollars in Thousands)
Net sales....... $120,762 100.0% $58,591 100.0% $51,820 100.0% 62,171 106.1% $6,771 13.1%
Cost of sales... 94,924 78.6% 43,325 73.9% 36,127 69.7%
------ ----- ------ ----- ------- -----
Gross profit. 25,838 21.4% 15,266 26.1% 15,693 30.3% 10,572 69.3% (427) -2.7%
General, selling and
administrative expenses 8,936 7.4% 7,307 12.5% 5,347 10.3% 1,629 22.3% 1,960 36.7%
------ ----- ------ ----- ------ -----
Operating profit 16,902 14.0% 7,959 13.6% 10,346 20.0% 8,943 112.4% (2,387) -23.1%
Sales of absorbent polymers for 1995 increased by 106.1% over 1994
levels on a unit sales volume increase of 116.1%. This compares to a 13.1% sales
increase from 1993 to 1994 on a unit volume increase of 15.9%. The unit volume
increase in 1995 was largely attributable to the growth in European market
share.
Gross profit margins declined 13.9% from 1993 to 1994 as capacity
expanded from 30,000 metric tons to 80,000 metric tons. Unit sales volume
increased only 16%. Gross margins declined a further 18.0% in 1995 as the cost
of raw materials, principally acrylic acid, increased, and unit selling prices
declined.
The general, selling and administrative expense increase from 1993 to
1994 was directed to the marketing and administrative infrastructure to
accommodate the growth which occurred from 1994 to 1995.
Despite lower unit selling prices and higher raw material costs, the
operating profit margin improved by 2.9% from 1994 to 1995 because of the
increase in volume.
The Company aggressively expanded its capacity from 1993 to 1995 to
produce absorbent polymers. The Company began the three-year period with
worldwide capacity of 20,000 metric tons, and ended with 110,000 metric tons.
The Company's production capability is presently among the largest in the world.
The expansions were undertaken ahead of the industry demand curve. Fourth
quarter 1995 capacity utilization was approximately 56%, thus allowing for
greater output as demand increases. Depreciation on the most recent U.S.
expansion of 30,000 metric tons will be calculated on the units-of-production
basis until the third quarter of 1996. All other depreciation is calculated
using the straight-line method.
Management anticipates lower average unit selling prices as larger
volume customers are expected to account for a greater proportion of the sales.
The average cost of acrylic acid is expected to be lower in 1996 than in 1995,
however it is unknown whether the combination of lower acrylic costs and greater
plant throughput will offset the expected price decline. Management does not
anticipate a return of operating profit margins to the 20% level experienced
during 1993.
Environmental
Year Ended December 31,
----------------------------------------------------------------------------------------------
1995 1994 1993 1995 vs. 1994 1994 vs. 1993
---------------- --------------- ------------------ ----------------- -----------------
$ % $ %
----- ----- ----- -----
(Dollars in Thousands)
Net sales....... $50,420 100.0% $30,726 100.0% $20,108 100.0% 19,694 64.1% $10,618 52.8%
Cost of sales... 34,964 69.3% 22,397 72.9% 12,937 64.3%
------- ------ ------- ------ ------- -----
Gross profit. 15,456 30.7% 8,329 27.1% 7,171 35.7% 7,127 85.6% 1,158 16.1%
General, selling and
administrative expenses 10,151 20.1% 6,549 21.3% 4,387 21.8% 3,602 55.0% 2,162 49.3%
------ ----- ----- ----- ----- -----
Operating profit 5,305 10.6% 1,780 5.8% 2,784 13.9% 3,525 198.0% (1,004) -36.1%
Approximately 50% of the sales increase from 1994 to 1995 was
attributable to acquisitions. A further 14% of the growth came from increased
sales in international markets. Approximately 85% of the sales growth from 1993
to 1994 came from the combination of acquisitions and increased sales of
BentomatAE environmental liner products.
Gross profit margins in 1995 improved by 13.3%. Inventory charges and
changes in distribution during 1994 accounted for the difference between 1994
and 1995. Increased sales of lower margin products and the non-recurring charges
accounted for the 24.1% gross margin decline from 1993 to 1994.
General, selling and administrative expenses increased from 1993 to
1994, primarily as a result of increased staff associated with the acquisitions
and increased staffing in marketing, including the establishment of an
international marketing department. The 1995 increase reflected further
expansion of the international marketing group and additional staff associated
with the Claymax acquisition.
Transportation
Year Ended December 31,
----------------------------------------------------------------------------------------------
1995 1994 1993 1995 vs. 1994 1994 vs. 1993
---------------- --------------- ------------------ ----------------- -----------------
$ % $ %
----- ----- ----- -----
(Dollars in Thousands)
Net sales....... $21,666 100.0% $21,636 100.0% $17,344 100.0% 30 0.1% $4,292 24.7%
Cost of sales... 18,974 87.6% 19,021 87.9% 15,323 88.3%
------- ----- ------- ------ ------- ------
Gross profit. 2,692 12.4% 2,615 12.1% 2,021 11.7% 77 2.9% 594 29.4%
General, selling and
administrative expenses 1,635 7.5% 1,590 7.3% 1,324 7.6% 45 2.8% 266 20.1%
------ ----- ------ ------ ------ ------
Operating profit 1,057 4.9% 1,025 4.8% 697 4.1% 32 3.1% 328 47.1%
Increased brokerage of cat litter and environmental shipments fueled
the growth in transportation revenues from 1993 to 1994. The conversion of
shipments of bentonite used in the manufacturing of liner products from truck to
rail offset the further revenue gains made in the shipment of cat litter
products during 1995. Gross profit margins have benefitted from the high volume
levels, as well as greater truck availability during the three-year period.
Corporate
Year Ended December 31,
----------------------------------------------------------------------------------------------
1995 1994 1993 1995 vs. 1994 1994 vs. 1993
---------------- --------------- ------------------ ----------------- -----------------
$ % $ %
----- ----- ----- -----
(Dollars in Thousands)
General, selling and
administrative expenses $ 6,642 $ 6,418 $ 4,820 224 3.5% 1,598 33.2%
------ ------ -------
Operating loss.. (6,642) (6,418) (4,820)
Corporate costs include management information systems, human
resources, investor relations and corporate communications, finance, purchasing,
research costs for new markets and corporate governance costs.
During 1994, the Company installed a new management information system
and significantly increased research and development activities. These
expenditures continued into 1995. The 1995 expenses reflected a more precise
split of the costs previously shared by minerals and corporate.
The Company is actively engaged in research and development efforts to
create new applications for its reserves of bentonite. The Company has formed a
wholly-owned subsidiary, Nanocor, Inc., to capitalize on its research and
development progress in bentonite-based nanocomposites. When incorporated into
plastics, bentonite-based nanocomposites can produce material with significantly
improved properties that encompass a variety of commercial applications.
Nanocor's technologies are still in the developmental stage, but management
feels that these products have the potential to become a significant part of the
Company's future growth.
An incremental increase in research and development costs of
approximately $2 million is expected for 1996 as Nanocor, Inc. expands its
product development efforts. All costs associated with Nanocor, Inc. will be
carried in corporate for 1996.
Net interest expense
Net interest expense increased by $4.4 million from 1994 to 1995 as a
result of higher borrowing levels primarily associated with capital expenditures
and acquisitions. Net interest expense for 1994 was $.7 million lower than in
1993 as a result of higher levels of capitalized interest.
Other income (expense)
Other income for 1995 included investment grants of approximately $.5
million and a $.6 million gain related to the cancellation of an interest rate
swap, compared with $.5 million of investment grants in 1994 and $.5 million in
recovered defense costs in 1993.
Income taxes
The income tax rate for 1995 was 33.8% compared with 30.8% in 1994 and
29.7% in 1993. The estimated effective tax rate for 1996 is 36%.
Earnings Per Share
Earnings per share were calculated using the weighted average number of
shares, including common stock equivalents, outstanding during the year. Stock
options issued to key employees and directors are considered common stock
equivalents. The 1993 weighted average shares outstanding were approximately
17.2 million shares compared with approximately 19.5 million shares and 19.7
million shares in 1994 and 1995, respectively. An equity offering of 3.5 million
shares was completed in October 1993, accounting for most of the difference in
the shares outstanding between the periods.
Item 8. Financial Statements and Supplementary Data
See the Index to Financial Statements and Financial Statement Schedules
on Page F-1. Such Financial Statements and Schedules are incorporated herein by
reference.
Item 9. Changes in and Disagreements with Accountants on Accounting and
Financial Disclosure
None.
PART III
Item 10. Directors and Executive Officers of the Registrant
The table below lists the names and ages of all directors and nominees of
the Company, and all positions each person holds with the Company.
Board of Directors of the Registrant
Arthur Brown, 55, (2)
Chairman,President and Chief Executive Officer of Hecla Mining Company. Director
since 1990.
Robert E. Driscoll, III, 57, (2, 5)
Former Dean and Professor of Law, University of South Dakota. Director since
1985.
Raymond A. Foos, 67, (2, 3)
Former Chairman of the Board, President and Chief Executive Officer of Brush
Wellman, Inc. (manufacturer of beryllium and specialty materials). Director
since 1981.
John Hughes, 53, (1)
President and Chief Executive Officer, AMCOL International Corporation. Director
since 1984.
Robert C. Humphrey, 77, (1, 3, 4)
Retired Chairman of the Board, NBD Bank Evanston, N.A. Director since 1977,
except for a three-month period in 1989.
Jay D. Proops, 54, (1, 3)
Private investor and former Vice Chairman and co-founder of The Vigoro
Corporation. Director since June 1995.
C. Eugene Ray, 63, (1, 2, 3, 4)
Chairman of the Board since 1988. Former Executive Vice President - Finance of
Signode Industries, Inc. (manufacturer of industrial strapping products).
Director since 1981.
Clarence O. Redman, 53, (1, 5)
Partner and Chief Executive Officer of the law firm of Keck, Mahin & Cate.
Secretary of the Company since 1982. Director since 1989.
Paul G. Shelton, 46, (1)
Senior Vice President - Chief Financial Officer, AMCOL International
Corporation. Director since 1988.
Dale E. Stahl, 48, (1, 3)
President and Chief Operating Officer of Gaylord Container Corporation. Director
since June 1995.
Paul C. Weaver, 33, (1, 2)
Senior Corporate Account Manager for Nielsen Marketing Research. Director since
May 1995.
(1) Member of Executive Committee of the Board of Directors
(2) Member of Audit Committee
(3) Member of Compensation Committee
(4) Member of Nominating Committee
(5) Member of Option Committee
Additional information regarding the directors of the Company is included
under the caption "Election of Directors", "Information Concerning Members of
the Board" and "Compliance with Section 16(a) of the Securities Exchange Act."
in the Company's proxy statement to be dated on or about April 8, 1996, and is
incorporated herein by reference. Information regarding executive officers of
the Company is included under a separate caption in Part I hereof, and is
incorporated herein by reference, in accordance with General Instruction G(3) to
Form 10-K and Instruction 3 to Item 401(b) of Regulation S-K.
Item 11. Executive Compensation
Information regarding the above is included under the caption "Compensation
and Other Transactions with Management" in the Company's proxy statement to be
dated on or about April 8, 1996, and is incorporated herein by reference.
Item 12. Security Ownership of Certain Beneficial Owners and Management
Information regarding the above is included under the caption "Security
Ownership" in the Company's proxy statement to be dated on or about April 8,
1996, and is incorporated herein by reference.
Item 13. Certain Relationships and Related Transactions
Information regarding the above is included under the caption "Compensation
and Other Transactions with Management" in the Company's proxy statement to be
dated on or about April 8, 1996, and is incorporated herein by reference.
Item 14. Exhibits, Financial Statement Schedules and Reports on Form 8-K
(a) 1. See Index to Financial Statements and
2. Financial Statement Schedules on Page F-1.
Such Financial Statements and Schedules
are incorporated herein by reference.
3. See Index to Exhibits immediately following
the signature page.
(b) None.
(c) See Index to Exhibits immediately following
the signature page.
(d) See Index to Financial Statements and Financial
Statement Schedules on Page F-1.
Item 14(a) Index to Financial Statements and Financial Statement Schedules
Page
(1) Financial Statements:
Independent Auditors' Report...................................................................... F-2
Consolidated Balance Sheets, December 31, 1995 and 1994........................................... F-3
Consolidated Statements of Operations,
Years ended December 31, 1995, 1994, and 1993................................................. F-4
Consolidated Statements of Stockholders' Equity,
Years ended December 31, 1995, 1994, and 1993................................................. F-5
Consolidated Statements of Cash Flows,
Years ended December 31, 1995, 1994, and 1993................................................. F-6
Notes to Consolidated Financial Statements........................................................ F-7
(2) Financial Statement Schedules:
Schedule II -- Valuation and Qualifying Accounts.................................................. F-21
All other schedules called for under Regulation S-X are not submitted
because they are not applicable or not required or because the required
information is not material or is included in the financial statements or notes
thereto.
Independent Auditors' Report
The Board of Directors and Stockholders
AMCOL International Corporation:
We have audited the consolidated financial statements of AMCOL
International Corporation and subsidiaries as listed in the accompanying index.
In connection with our audits of the consolidated financial statements, we also
have audited the financial statement schedule as listed in the accompanying
index. These consolidated financial statements and financial statement schedule
are the responsibility of the Company's management. Our responsibility is to
express an opinion on these consolidated financial statements and financial
statement schedule based on our audits.
We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to obtain
reasonable assurance about whether the financial statements are free of material
misstatement. An audit includes examining, on a test basis, evidence supporting
the amounts and disclosures in the financial statements. An audit also includes
assessing the accounting principles used and significant estimates made by
management, as well as evaluating the overall financial statement presentation.
We believe that our audits provide a reasonable basis for our opinion.
In our opinion, the consolidated financial statements referred to above
present fairly, in all material respects, the financial position of AMCOL
International Corporation and subsidiaries as of December 31, 1995 and 1994, and
the results of their operations and their cash flows for each of the years in
the three-year period ended December 31, 1995, in conformity with generally
accepted accounting principles. Also in our opinion, the related financial
statement schedule, when considered in relation to the basic consolidated
financial statements taken as a whole, presents fairly, in all material
respects, the information set forth therein.
KPMG PEAT MARWICK LLP
Chicago, Illinois
March 8, 1996
AMCOL INTERNATIONAL CORPORATION AND SUBSIDIARIES
Consolidated Balance Sheets
(Dollars in thousands, except per share amounts)
ASSETS
December 31,
-----------------------
1995 1994
--------- ---------
Current assets:
Cash and cash equivalents............................................................. $ 1,888 $ 10,389
Accounts receivable:
Trade, less allowance for doubtful accounts of $1,601 and $1,336.................... 65,267 49,144
Other............................................................................... 1,162 1,764
Inventories........................................................................... 47,205 40,302
Advance mining........................................................................ 2,678 2,363
Prepaid expenses...................................................................... 5,355 2,213
Current deferred tax asset............................................................ 2,782 2,516
-------- ----------
Total current assets............................................................... 126,337 108,691
------- ---------
Property, plant, equipment, and mineral rights and reserves:
Land and mineral rights and reserves.................................................. 12,626 12,438
Depreciable assets.................................................................... 263,904 213,094
------- ---------
276,530 225,532
Less accumulated depreciation......................................................... 101,319 84,112
------- -----------
175,211 141,420
Other assets:
Goodwill, less accumulated amortization of $1,937 and $1,424.......................... 14,109 7,895
Other intangible assets, less accumulated amortization of $6,464 and $5,351........... 6,709 5,893
----------- ----------
20,818 13,788
----------- ----------
$ 322,366 $ 263,899
=========== ===========
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Current maturities of long-term obligations........................................... $ 3,875 $ 3,334
Current capital lease obligations..................................................... 194 173
Accounts payable...................................................................... 18,777 19,373
Accrued income taxes.................................................................. __ 807
Accrued liabilities................................................................... 13,036 12,930
---------- ----------
Total current liabilities........................................................... 35,882 36,617
---------- ----------
Long-term obligations:
Long-term debt........................................................................ 116,517 70,756
Long-term capital lease obligations................................................... 499 702
---------- ---------
117,016 71,458
---------- ---------
Deferred income tax liabilities.......................................................... 6,819 5,474
Estimated accrued reclamation............................................................ 4,826 4,839
Other liabilities........................................................................ 1,898 2,041
---------- ----------
13,543 12,354
Minority interest in subsidiary.......................................................... 431 397
---------- ----------
Stockholders' equity:
Common stock, par value $.01 per share. Authorized 50,000,000 shares, issued
21,343,864 shares.................................................................. 213 213
Additional paid-in capital............................................................ 74,967 74,279
Retained earnings..................................................................... 86,703 73,911
Cumulative translation adjustments.................................................... (2,351) (1,865)
---------- ---------
159,532 146,538
Less:
Treasury stock (2,209,653 shares in 1995 and 2,329,522 shares in 1994)................
(4,038) (3,465)
155,494 143,073
$ 322,366 $ 263,899
=========== ==========
See accompanying notes to consolidated financial statements.
AMCOL INTERNATIONAL CORPORATION AND SUBSIDIARIES
Consolidated Statements of Operations
(Dollars in thousands, except per share amounts)
Year Ended December 31,
------------------------------------
1995 1994 1993
---------- ----------- -----------
Net sales...................................................................... $347,688 $265,443 $ 219,151
Cost of sales.................................................................. 271,126 205,956 169,308
--------- -------- ---------
Gross profit.............................................................. 76,562 59,487 49,843
General, selling and administrative expenses................................... 44,165 35,496 28,531
--------- --------- ----------
Operating profit.......................................................... 32,397 23,991 21,312
--------- --------- ----------
Other income (expense):
Interest expense, net....................................................... (6,727) (2,332) (3,036)
Other, net.................................................................. 1,217 544 474
---------- --------- ---------
(5,510) (1,788) (2,562)
------------ ---------- ---------
Income before income taxes and minority interest in net income of subsidiary
26,887 22,203 18,750
Income taxes................................................................... 9,082 6,828 5,567
--------- --------- ---------
Income before minority interest in net income of subsidiary.............. 17,805 15,375 13,183
Minority interest in net income of subsidiary..................................
(34) (92) (63)
--------- -------- --------
Net income................................................................ $ 17,771 $ 15,283 $ 13,120
========= ======== ========
Earnings per share............................................................. $ .90 $ .78 $ .76
========= ========= =========
See accompanying notes to consolidated financial statements.
AMCOL INTERNATIONAL CORPORATION AND SUBSIDIARIES
Consolidated Statements of Stockholders' Equity
(Dollars in thousands, except per share amounts)
Common Stock
--------------------
Number Additional Cumulative
of Paid-in Retained Translation Treasury Loan to
Shares Amount Capital Earnings Adjustment Stock Officer Total
---------- ------ ----------- --------- ------------ -------- ------- -----
Balance at
December 31, 1992. 18,843,864 $ 9,422 $ 1,487 $53,446 $(2,782) $(4,090) $(144) $ 57,339
Net income........... -- -- -- 13,120 -- -- -- 13,120
Cash dividends ($.20
per share)........ -- -- -- (3,323) -- -- -- (3,323)
Repayment of loan to -- -- -- -- -- -- 144 144
officer...........
Cumulative foreign
exchange -- -- -- -- (537) -- -- (537)
translation
adjustment........
Amended par value of
common shares
from $1.00 per
share to $0.01 -- (9,328) 9,328 -- -- -- -- --
per share.........
Two-for-one stock -- 94 -- (94) -- -- -- --
split.............
Purchase of 380
treasury shares... -- -- -- -- -- (3) -- (3)
Sale of 385,438
treasury shares... -- -- 1,051 -- -- 509 -- 1,560
Sale of 2,500,000
common shares..... 2,500,000 25 58,808 -- -- -- 58,833
--------- --- ------- ------- ------- ------- ------- - -------
Balance at
December 31, 1993. 21,343,864 213 70,674 63,149 (3,319) (3,584) -- 127,133
Net income........... -- -- -- 15,283 -- -- -- 15,283
Cash dividends ($.24
per share)........ -- -- -- (4,521) -- -- -- (4,521)
Cumulative foreign
exchange -- -- -- -- 1,454 -- -- 1,454
translation
adjustment........
Purchase of 33,956
treasury shares... -- -- -- -- -- (443) -- (443)
Sale of 420,142
treasury shares... -- -- 3,605 -- -- 562 -- 4,167
--------- -------- --------- -------- --------- --------- ------- --------
Balance at
December 31, 1994. 21,343,864 213 74,279 73,911 (1,865) (3,465) -- 143,073
Net income.......... -- -- -- 17,771 -- -- -- 17,771
Cash dividends ($.26
per share)........ -- -- -- (4,979) -- -- -- (4,979)
Cumulative foreign
exchange -- -- -- -- (486) -- (486)
translation
adjustment........
Purchase of 58,000
treasury shares... -- -- -- -- -- (838) -- (838)
Sale of 177,869
treasury shares -- -- 688 -- -- 265 -- 953
------- ------- ------- ------- -------- -------- ----- --------
Balance at
December 31, 1995. 21,343,864 $ 213 $74,967 $86,703 $(2,351) $(4,038) $ -- $ 15,283
========== ========= ======= ======= ======== ======== ===== =========
See accompanying notes to consolidated financial statements.
AMCOL INTERNATIONAL CORPORATION AND SUBSIDIARIES
Consolidated Statements of Cash Flows
(Dollars in thousands)
Year Ended December 31,
1995 1994 1993
--------- -------- --------
Cash flow from operating activities:
Net income............................................................. $ 17,771 $15,283 $13,120
Adjustments to reconcile net income to net cash provided by operating
activities:
Depreciation, depletion, and amortization............................ 21,289 14,442 10,584
Increase (decrease) in allowance for doubtful accounts............... 265 (500) 574
Increase (decrease) in deferred income taxes......................... 1,345 (651) (38)
Increase (decrease) in estimated accrued reclamation................. (13) 7 129
Increase (decrease) in other noncurrent liabilities.................. (32) 623 (52)
(Gain) loss on sale of depreciable assets............................ (254) (356) (89)
Minority interest in net income of subsidiary........................ 34 93 63
(Increase) decrease in current assets:
Accounts receivable................................................ (15,786) (11,289) (7,581)
Inventories........................................................ (6,903) (10,662) (8,618)
Advance mining..................................................... (315) (325) (60)
Prepaid expenses................................................... (3,142) 238 142
Current deferred tax asset......................................... (266) (396) (205)
Increase (decrease) in current liabilities:
Accounts payable................................................... (596) 8,345 3,216
Accrued income taxes............................................... (807) (1,482) 307
Accrued liabilities................................................ 105 2,133 2,999
-------- -------- --------
Net cash provided by operating activities........................ 12,695 15,503 14,491
------ ------- --------
Cash flow from investing activities:
Proceeds from sale of depreciable assets............................... 775 690 170
Acquisition of land, mineral reserves, and depreciable assets.......... (62,782) (80,958) (33,320)
(Increase) decrease in other assets.................................... (313) 29 831
---------- ---------- ---------
Net cash used in investing activities............................. (62,320) (80,239) (32,319)
-------- -------- -------
Cash flow from financing activities:
Proceeds from issuance of debt......................................... 109,984 77,715 30
Principal payments of debt and capital lease obligation................ (63,864) (22,725) (21,866)
Proceeds from common stock issuance.................................... -- -- 58,833
Proceeds from sale of treasury stock................................... 953 4,167 1,560
Dividends paid......................................................... (4,979) (4,521) (3,323)
Other.................................................................. (837) (499) (71)
--------- --------- ---------
Net cash provided by (used in) financing activities................. 41,257 54,137 35,163
------- -------- --------
Cumulative translation adjustment......................................... (133) 486 (285)
--------- --------- --------
Net increase (decrease) in cash and cash equivalents...................... (8,501) (10,113) 17,050
Cash at beginning of year................................................. 10,389 20,502 3,452
------- -------- --------
Cash and cash equivalents at end of year.................................. $ 1,888 $10,389 $20,502
========= ======= =======
Supplemental Disclosures of Cash Flows Information:
Actual cash paid for:
Interest............................................................... $ 7,791 $ 3,636 $ 3,399
========= ======== ========
Income taxes........................................................... $ 10,066 $ 9,143 $ 4,246
======== ======== ========
See accompanying notes to consolidated financial statements.
AMCOL INTERNATIONAL CORPORATION AND SUBSIDIARIES
Notes to Consolidated Financial Statements
(Dollars in thousands, except per share amounts)
(1) Summary of Significant Accounting Policies
Company Operations
AMCOL International Corporation (the Company) may be divided into three
principal categories of operations; minerals, absorbent polymers and
environmental. The Company also operates a transportation business primarily for
delivery of its own products. The Company's revenues are derived 44% from the
minerals operation, 35% from absorbent polymers, 15% from environmental and 6%
from transportation operations. The Company's sales were approximately 65%
domestic and 35% overseas.
Principles of Consolidation
The consolidated financial statements include the accounts of the Company
and its foreign and domestic subsidiaries. All subsidiaries are wholly-owned
except for one of the Australian subsidiaries, which is 60% owned by the
Company, and a 49% interest in a Mexican subsidiary, which is accounted for at
cost. All material intercompany balances and transactions, including profits on
inventories, have been eliminated in consolidation.
Use of Estimates
The preparation of financial statements in conformity with generally
accepted accounting principles requires management to make estimates and
assumptions that affect the reported amounts of assets and liabilities and
disclosure of contingent assets and liabilities at the date of the financial
statements and the reported amounts of revenues and expenses during the
reporting period. Actual results could differ from those estimates.
Translation of Foreign Currencies
The accounts and transactions of subsidiaries located outside of the United
States are translated into U.S. dollars at rates of exchange in accordance with
Statement of Financial Accounting Standards No. 52, "Foreign Currency
Translation." The assets and liabilities of these subsidiaries are translated at
the rate of exchange at the balance sheet date. The statements of operations are
translated at the weighted average monthly rate. Foreign exchange translation
adjustments are accumulated as a separate component of stockholders' equity
while realized exchange gains or losses are included in income.
Inventories
Inventories are valued at the lower of cost or market. Cost is determined
by the first-in, first-out (FIFO) or moving average methods. During 1995, in
order to better match revenues and expenses, the Company adopted the FIFO method
for certain inventories that had previously used the last-in, last-out (LIFO)
method for determining cost. The Company has applied this change in method
retroactively to January 1, 1991, which resulted in an increase in retained
earnings of $1,753. The effect on the statement of operations was immaterial.
AMCOL INTERNATIONAL CORPORATION AND SUBSIDIARIES
Notes to Consolidated Financial Statements (Continued)
(Dollars in thousands, except per share amounts)
(1) Summary of Significant Accounting Policies (Continued)
Property, Plant, Equipment, and Mineral Rights and Reserves
Property, plant, equipment, and mineral rights and reserves are carried at
cost. Depreciation is computed using the straight-line method for substantially
all of the assets. Certain other assets, primarily field equipment are
depreciated on the units-of-production method. Mineral rights and reserves are
depleted using the units-of-production method.
Goodwill and Other Intangible Assets
Goodwill represents the excess of the purchase price over the fair value of
the net assets acquired. Goodwill is being amortized on the straight-line method
over periods of 15 to 40 years. Other intangibles, including trademarks and
noncompete agreements, are amortized on the straight-line method over periods of
up to ten years.
Income Taxes
The Company and its U.S. subsidiaries file a consolidated tax return.
Deferred tax assets and liabilities are recognized for the future tax
consequences attributable to differences between the financial statement
carrying amounts of existing assets and liabilities and their respective tax
basis. Deferred tax assets and liabilities are measured using enacted tax rates
expected to be in effect for the year in which those temporary differences are
expected to be recovered or settled.
Exploration Costs and Advance Mining
Exploration costs are expensed as incurred. Costs incurred in removing
overburden and mining bentonite are capitalized as advance mining costs until
the bentonite from such mining area is transported to the plant site, at which
point the costs are included in crude bentonite stockpile inventory.
Research and Development
Research and development costs, included in general, selling and
administrative expenses, were approximately $4,801, $2,353, and $1,764 for the
years ended December 31, 1995, 1994, and 1993.
Earnings Per Share
Earnings per share are computed by dividing net income by the weighted
average of common shares outstanding after consideration of the dilutive effect
of stock options outstanding at the end of each period. The weighted average
number of common and common equivalent shares outstanding was 19,679,480 for
1995, 19,486,520 for 1994, and 17,223,854 for 1993.
AMCOL INTERNATIONAL CORPORATION AND SUBSIDIARIES
Notes to Consolidated Financial Statements (Continued)
(Dollars in thousands, except per share amounts)
(1) Summary of Significant Accounting Policies (Continued)
Cash Equivalents
For purposes of the statement of cash flows, the Company considers all
highly-liquid investments with original maturities of three months or less as
cash equivalents.
Reclassification
Certain items in the 1994 and 1993 consolidated financial statements have
been reclassified to comply with the consolidated financial statements
presentation for 1995.
(2) Business Segment and Geographic Area Information
The Company operates in three major industry segments--minerals, absorbent
polymers and environmental, and also operates a transportation business. The
minerals segment mines, processes, and distributes clays and products with
similar applications to various industrial and consumer markets. The absorbent
polymers segment produces and distributes superabsorbent polymers primarily for
use in consumer markets. The environmental segment processes and distributes
clays and products with similar applications for use as a moisture barrier in
commercial construction, landfill liners and in a variety of other industrial
and commercial applications. The transportation segment includes a long haul
trucking business and a freight brokerage business which provide services to
both the Company's plants and outside customers.
Intersegment sales are insignificant. Operating profit is defined as sales
and other income directly related to a segment's operations, less operating
expenses, which do not include interest costs.
Identifiable assets by segments are those assets used in the Company's
operations in that segment. Corporate assets are primarily cash and cash
equivalents, corporate leasehold improvements and miscellaneous equipment.
Export sales included in the United States were approximately $28,691,
$17,430, and $12,206 for the years ended December 31, 1995, 1994, and 1993. One
customer accounted for approximately 11% of sales in 1995.
AMCOL INTERNATIONAL CORPORATION AND SUBSIDIARIES
Notes to Consolidated Financial Statements (Continued)
(Dollars in thousands, except per share amounts)
(2) Business Segment and Geographic Area Information (Continued)
The following summaries set forth certain financial information by business
segment and geographic area for the years ended December 31, 1995, 1994, and
1993.
1995 1994 1993
-------- -------- --------
Business Segment:
Revenues:
Minerals......................................................... $154,840 $154,490 $129,879
Absorbent polymers............................................... 120,762 58,591 51,820
Environmental.................................................... 50,420 30,726 20,108
Transportation................................................... 21,666 21,636 17,344
-------- -------- --------
Total $347,688 $265,443 $219,151
======== ======== ========
Operating profit:
Minerals......................................................... $ 15,775 $ 19,645 $ 12,305
Absorbent polymers............................................... 16,902 7,959 10,346
Environmental.................................................... 5,305 1,780 2,784
Transportation................................................... 1,057 1,025 697
Corporate........................................................ (6,642) (6,418) (4,820)
--------- --------- ---------
Total $ 32,397 $ 23,991 $ 21,312
========= ========= =========
Identifiable assets:
Minerals......................................................... $134,250 $128,788 $105,561
Absorbent polymers............................................... 126,392 95,121 44,021
Environmental.................................................... 50,264 28,570 11,937
Transportation................................................... 1,235 1,242 1,311
Corporate........................................................ 10,225 10,178 21,199
-------- -------- --------
Total $322,366 $263,899 $184,029
======== ======== ========
Depreciation, depletion, and amortization:
Minerals......................................................... $ 10,748 $ 9,506 $ 8,236
Absorbent polymers............................................... 7,176 3,476 1,940
Environmental.................................................... 2,432 906 229
Transportation................................................... 35 30 25
Corporate........................................................ 898 524 154
--------- --------- ---------
Total $ 21,289 $ 14,442 $ 10,584
========= ========= =========
Capital expenditures:
Minerals......................................................... $ 20,021 $ 23,979 $ 14,808
Absorbent polymers............................................... 24,178 44,606 15,465
Environmental.................................................... 16,775 10,373 1,074
Transportation................................................... 61 66 18
Corporate........................................................ 1,747 1,934 1,955
--------- --------- ---------
Total $ 62,782 $ 80,958 $ 33,320
========= ========= =========
AMCOL INTERNATIONAL CORPORATION AND SUBSIDIARIES
Notes to Consolidated Financial Statements (Continued)
(Dollars in thousands, except per share amounts)
(2) Business Segment and Geographic Area Information (Continued)
1995 1994 1993
-------- --------- --------
Geographic area:
Sales to unaffiliated customers from:
North America.................................................... $255,920 $226,483 $188,598
Europe........................................................... 89,842 37,154 28,974
Australia........................................................ 1,926 1,806 1,579
-------- -------- --------
Total $347,688 $265,443 $219,151
======== ======== ========
Sales or transfers between geographic areas:
North America.................................................... $ 5,416 $ 4,086 $ 1,962
Europe........................................................... 86 103 --
Australia........................................................ -- -- --
-------- -------- --------
Total $ 5,502 $ 4,189 $ 1,962
======== ======== ========
Operating profit from:
North America.................................................... $ 23,047 $ 22,639 $ 19,059
Europe........................................................... 9,471 972 2,055
Australia........................................................ 109 360 261
Adjustments and eliminations..................................... (230) 20 (63)
-------- -------- --------
Total $ 32,397 $ 23,991 $ 21,312
======== ======== ========
Identifiable assets in:
North America.................................................... $246,242 $199,175 $154,176
Europe........................................................... 73,175 65,886 30,412
Australia........................................................ 2,314 1,582 1,276
Adjustments and eliminations..................................... 635 (2,744) (1,835)
-------- -------- --------
Total $322,366 $263,899 $184,029
======== ======== ========
(3) Inventories
Inventories consisted of:
1995 1994
--------- ---------
Crude stockpile inventories..................................................... $ 10,284 $ 9,388
In-process inventories.......................................................... 19,421 15,386
Other raw material, container, and supplies inventories......................... 17,500 15,528
-------- --------
$ 47,205 $ 40,302
======== ========
AMCOL INTERNATIONAL CORPORATION AND SUBSIDIARIES
Notes to Consolidated Financial Statements (Continued)
(Dollars in thousands, except per share amounts)
(4) Property, Plant, Equipment, and Mineral Rights and Reserves
Property, plant, equipment, and mineral rights and reserves consisted of
the following:
December 31 Depreciation/
---------------------- Amortization-
1995 1994 Annual Rates
--------- --------- -------------
Mineral rights and reserves...................................... $ 10,084 $ 10,358
Other land....................................................... 2,542 2,080
Buildings and improvements....................................... 48,969 40,773 2.2% to 20.0%
Machinery and equipment.......................................... 214,935 172,321 5.0% to 33.3%
------- --------
$276,530 $225,532
======== ========
Depreciation and depletion were charged to income as follows:
1995 1994 1993
-------- -------- --------
Depreciation expense.................................................. $ 19,209 $ 13,045 $ 9,086
Depletion expense..................................................... 587 588 515
-------- -------- -------
$ 19,796 $ 13,633 $ 9,601
======== ======== =======
(5) Income Taxes
The components of the provision for domestic and foreign income tax expense
for the years ended December 31, 1995, 1994 and 1993 consist of:
1995 1994 1993
-------- -------- --------
Income before income taxes and minority interest in net income of
subsidiary:
Domestic................................................................. $22,796 $21,810 $17,051
Foreign.................................................................. 4,091 393 1,699
------- -------- -------
$26,887 $22,203 $18,750
======= ======= =======
Provision for income taxes:
Domestic Federal
Current................................................................ $ 5,283 $ 5,416 $ 4,037
Deferred............................................................... 390 (370) (34)
Domestic State
Current................................................................ 1,358 1,548 788
Deferred............................................................... 43 (38) (62)
Foreign
Current................................................................ 1,362 911 985
Deferred............................................................... 646 (639) (147)
-------- -------- --------
$ 9,082 $ 6,828 $ 5,567
======== ======== ========
AMCOL INTERNATIONAL CORPORATION AND SUBSIDIARIES
Notes to Consolidated Financial Statements (Continued)
(Dollars in thousands, except per share amounts)
(5) Income Taxes (Continued)
The components of the deferred tax assets and liabilities as of December
31, 1995 and 1994 are as follows:
1995 1994
-------- ---------
Deferred tax assets:
Accounts receivable, due to allowance for doubtful accounts........................... $ 620 $ 434
Inventories, due to additional costs inventoried for tax purposes pursuant to the Tax
Reform Act of 1986 and reserve for obsolete inventories............................ 848 1,044
Other................................................................................. 7,210 6,018
-------- --------
Total deferred tax assets........................................................... 8,678 7,496
-------- --------
Deferred tax liabilities:
Plant and equipment, due to differences in depreciation............................... (9,379) (6,942)
Land and mineral reserves, due to differences in depletion............................ (2,385) (2,389)
Inventories, due to change in accounting method....................................... (915) (1,098)
Other................................................................................. (36) (25)
---------- ----------
Total deferred tax liabilities...................................................... (12,715) (10,454)
---------- ----------
Net deferred tax liability.......................................................... $ (4,037) $ (2,958)
========== ==========
The following analysis reconciles the statutory Federal income tax rate to
the effective tax rates:
1995 1994 1993
----------------------- ------------------------- ----------------------
Percent of Percent of Percent of
Pretax Pretax Pretax
Amount Income Amount Income Amount Income
-------- ---------- -------- ---------- -------- ----------
Domestic and foreign taxes on income at
United States statutory rate.............. $9,410 35.0% $7,771 35.0% $6,563 35.0%
Increase (decrease) in taxes resulting from:
Percentage depletion...................... (840) (3.1) (781) (3.5) (690) (3.7)
State taxes............................... 1,358 5.0 1,510 6.8 726 3.9
Other..................................... (846) (3.1) (1,672) (7.5) (1,032) (5.5)
------- ------ ------ ------ ------ ------
$9,082 33.8% $6,828 30.8% $5,567 29.7%
====== ====== ====== ====== ====== ======
(6) Long-term Debt
Long-term debt consisted of the following:
December 31,
-----------------------
1995 1994
--------- ----------
Short-term debt supported by revolving credit agreement................................ $ 57,618 $ 7,982
Term note, at 9.68% (Series D)......................................................... 11,420 14,280
Term note, at 7.36% (Series A)......................................................... 25,000 25,000
Term note, at 7.83% (Series B)......................................................... 10,000 10,000
Term note, at 8.10% (Series C)......................................................... 15,000 15,000
Industrial Revenue Bond, at 68% of prime............................................... 1,050 1,283
Other notes payable, at 0% to 10%...................................................... 304 545
-------- ---------
120,392 74,090
Less current portion................................................................... 3,875 3,334
-------- ---------
$ 116,517 $ 70,756
========= =========
AMCOL INTERNATIONAL CORPORATION AND SUBSIDIARIES
Notes to Consolidated Financial Statements (Continued)
(Dollars in thousands, except per share amounts)
(6) Long-term Debt (Continued)
The Company has a committed $100,000 revolving credit agreement which
matures October 31, 2000, with an option to extend for three one-year periods.
As of December 31, 1995, there was $43,167 available in unused lines of credit.
The revolving credit note is a multi-currency agreement which allows the Company
to borrow at various interest rates including, but not limited to, prime and an
adjusted LIBOR rate plus .375% to .75% depending upon debt to capitalization
ratios and the amount of the credit line used.
The Industrial Revenue Bond outstanding at December 31, 1995, is payable in
equal semi-annual installments of $117 until the year 2000. The Aberdeen,
Mississippi, bentonite operations of the Company are pledged as collateral. The
carrying value of the pledged assets at December 31, 1995 was $1,956.
Maturities of long-term debt at December 31, 1995 are as follows:
1996 1997 1998 1999 2000 Thereafter
------- ------- -------- -------- -------- ----------
Short-term debt supported by
revolving credit agreement......... $ 699 $ -- $ -- $ -- $56,919 $ --
Term note, at 9.68% (Series D)........ 2,860 2,860 2,860 2,840 -- --
Term note, at 7.36% (Series A)........ -- 4,000 9,500 11,500 -- --
Term note, at 7.83% (Series B)........ -- -- -- -- -- 10,000
Term note, at 8.10% (Series C)........ -- -- -- -- -- 15,000
Industrial Revenue Bond, at 68% of
prime.............................. 233 233 233 233 118
Other notes payable, at 0% to 10%..... 83 86 40 45 50
------ -------- ---------- ---------- ---------- -------
$3,875 $7,179 $12,633 $14,618 $57,087 $25,000
====== ====== ======= ======= ======= =======
The estimated fair value of the term notes above at December 31, 1995, was
$65,364 based on discounting future cash payments at current market interest
rates for loans with similar terms and maturities.
All loan agreements include covenants which require the maintenance of
specific minimum amounts of working capital, tangible net worth and financial
ratios and limit additional borrowings and guarantees. The Company is not
required to maintain a compensating balance.
(7) Financial Instruments
The Company uses financial instruments, principally swaps, forward
contracts and options, in its management of foreign currency and interest rate
exposures. These contracts hedge transactions and balances for periods
consistent with its committed exposures.
AMCOL INTERNATIONAL CORPORATION AND SUBSIDIARIES
Notes to Consolidated Financial Statements (Continued)
(Dollars in thousands, except per share amounts)
(7) Financial Instruments (Continued)
Realized and unrealized foreign exchange gains and losses are recognized
and offset against foreign exchange gains or losses on the underlying exposures.
The interest differential paid or received on swap agreements is recognized as
an adjustment to interest. The Company had $25,000 interest rate swap in place
at December 31, 1994. During June 1995, the swap was cancelled for a gain of
$632. The gain was recorded as other income.
At December 31, 1995, the Company had $3,825 of forward exchange contracts
outstanding. The fair value of these contracts and the Company's other financial
instruments (except for term notes - see note (6)) approximates their carrying
value.
(8) Leases
The Company leases certain railroad cars, trailers, computer software,
office equipment, and office and plant facilities. Total rent expense under
operating lease agreements was approximately $2,283, $1,920, and $1,721 in 1995,
1994, and 1993, respectively. Rent expense on railroad cars is offset by mileage
earnings paid by the railroads of approximately $115, $124, and $137 in 1995,
1994, and 1993, respectively.
Railroad cars and computer software under capital leases are included in
machinery and equipment as follows:
December 31,
--------------------
1995 1994
------ -------
Railroad cars and computer software........................................ $1,768 $1,768
Less accumulated amortization........................................... 1,291 1,139
------- -------
$ 477 $ 629
======= =======
The following is a schedule of future minimum lease payments for the
capital leases and for operating leases (with initial terms in excess of one
year) as of December 31, 1995:
Operating Leases
-----------------------------------
Capital
Leases Domestic Foreign Total
------ --------- ------- --------
Year ending December 31:
1996...................................................... $ 237 $ 3,710 $ 141 $ 3,851
1997...................................................... 237 2,310 112 2,422
1998...................................................... 171 1,872 69 1,941
1999...................................................... 114 1,652 40 1,692
2000...................................................... 0 937 27 964
Thereafter................................................ 0 774 50 824
-------- --------- ------- --------
Total minimum lease payments................................. 759 $ 11,255 $ 439 $11,694
======== ====== =======
Less amount representing interest............................ 66
-------
Present value of net minimum lease payments.................. $ 693
======
AMCOL INTERNATIONAL CORPORATION AND SUBSIDIARIES
Notes to Consolidated Financial Statements (Continued)
(Dollars in thousands, except per share amounts)
(9) Employee Benefit Plans
The Company has noncontributory pension plans covering substantially all of
its domestic employees. The Company's funding policy is to contribute annually
the maximum amount calculated using the actuarially determined entry age normal
method that can be deducted for federal income tax purposes. Contributions are
intended to provide not only for benefits attributed to services to date, but
also for those expected to be earned in the future. The plan is fully funded for
tax purposes.
Pension cost in 1995, 1994, and 1993 was comprised of:
1995 1994 1993
-------- -------- --------
Service cost................................................................ $ 980 $ 996 $ 746
Interest cost............................................................... 1,094 964 834
Actual return on plan assets................................................ (1,988) 1,354 (995)
Net amortization and deferral............................................... 482 (2,863) (134)
------- ------- -------
Net periodic pension cost................................................... $ 568 $ 451 $ 451
======== ======== ========
The following table summarizes the funded status and amounts recognized in
the Company's balance sheet at December 31, 1995 and 1994:
1995 1994
-------- --------
Actuarial present value of benefit obligations-accumulated benefit obligation,
including vested benefits of $10,716 in 1995 and $8,835 in 1994................... $ 11,469 $ 9,522
======== =========
Projected benefit obligation......................................................... $(15,966) $(13,942)
Plan assets at fair value............................................................ 16,690 15,321
--------- ---------
Projected benefit obligation less than plan assets................................... 720 1,379
Unrecognized net (gain) loss......................................................... (1,101) (1,049)
Unrecognized net obligation at January 1, 1986, being amortized over a period from
19-21 years....................................................................... (1,319) (1,457)
--------- ---------
Pension liability included in accrued liabilities.................................... $ (1,696) $ (1,127)
========= ========
The Company's pension benefit plan was valued as of October 1, 1995 and
1994, respectively. Approximately 94% of the plan assets are invested in common
stocks, corporate bonds and notes, and guaranteed income contracts purchased
from insurance companies. The remainder of the plan assets are invested in cash
and a real estate trust.
The weighted average discount rate used in determining the actuarial
present value of the projected benefit obligation was 7.5% in 1995 and 8.0% in
1994, while the rate of increase in future compensation levels was 5.5% in 1995
and 6.0% in 1994. The expected long-term rate of return on plan assets was 9.0%
in 1995 and 9.0% in 1994.
The Company also has a savings plan for its domestic personnel. The Company
has contributed an amount equal to an employee's contribution up to a maximum of
4% of the employee's annual earnings. Company contributions are made using
Company stock purchased on the open market. Company contributions under the
savings plan were $985 in 1995, $963 in 1994, and $854 in 1993.
The foreign pension plans, not subject to ERISA, are funded using
individual annuity contracts and therefore, are not included in the information
noted above.
AMCOL INTERNATIONAL CORPORATION AND SUBSIDIARIES
Notes to Consolidated Financial Statements (Continued)
(Dollars in thousands, except per share amounts)
(10) Stockholders' Equity
On August 23, 1993, the Board of Directors authorized up to 2,500,000
shares of common stock, $.01 par value per share, to be offered and sold
pursuant to a public offering. The public offering was completed on October 27,
1993. The par value for these additional shares was increased by $25 and
additional paid-in capital was increased by $58,808, the total of which
represents the net proceeds from the sale of 2,500,000 shares of common stock.
On May 10, 1993, the stockholders of AMCOL International Corporation
approved an amendment to the Company's Restated Certificate of Incorporation to
increase the number of authorized shares of common stock of the Company from 12
million to 50 million. The stockholders also approved an amendment to change the
par value of the common stock from $1.00 per share to $0.01 per share.
Additional paid-in capital was increased and common stock reduced by $9,328 for
the change in the par value of the common stock.
On May 10, 1993, the Board of Directors declared a two-for-one stock split
effected in the nature of a stock dividend to stockholders of record on June 8,
1993, which was paid June 23, 1993. The par value of these additional shares was
capitalized by a transfer of $94 from retained earnings to common stock.
All current and prior-year common share and per share disclosures have been
restated to reflect the stock dividends.
(11) Stock Option Plans
1983 Incentive Stock Option Plan
The Company reserved 1,800,000 shares of its common stock for issuance of
incentive stock options to its officers and key employees. Options awarded under
this plan, which entitle the optionee to one share of common stock, may be
exercised at a price equal to the fair market value at the time of grant.
Options awarded under the plan vest 40% after two years and continue to vest at
the rate of 20% per year for each year thereafter, until they are fully vested.
Options are exercisable as they vest and expire ten years after the date of
grant, except in the event of termination, retirement or death of the optionee
or a change in control of the Company.
This plan expired during 1993, though options which were granted prior to
its expiration continue to be valid until the individual option grants expire.
Option price
1995 1994 1993 per share
-------- -------- --------- ---------------
Options outstanding at January 1...................... 873,971 990,667 1,123,076 $2.00 to $11.75
Granted ............................................. 0 0 254,540
$11.75
Exercised............................................. (171,869) (113,756) (363,840) $2.00 to $11.75
Cancelled............................................. (7,334) (2,940) (23,109) $2.92 to $11.75
------ ------ -------
Options outstanding at December 31.................... 694,768 873,971 990,667 $2.92 to $11.75
======= ======= =======
Options exercisable at December 31.................... 471,536 471,225 374,876
======= ======= =======
Shares available for future grant at December 31...... 0 0 0
======= ======= =======
AMCOL INTERNATIONAL CORPORATION AND SUBSIDIARIES
Notes to Consolidated Financial Statements (Continued)
(Dollars in thousands, except per share amounts)
(11) Stock Option Plans (Continued)
1993 Stock Plan
The Company reserved 840,000 shares of its common stock for issuance to its
officers and key employees in the form of incentive stock options, nonqualified
stock options, restricted stock, stock appreciation rights and phantom stock.
Different terms and conditions apply to each form of award made under the plan.
To date, only incentive stock options have been awarded. Options awarded under
this plan, which entitle the optionee to one share of common stock, may be
exercised at a price equal to the fair market value at the time of grant.
Options awarded under the plan generally vest 40% after two years and continue
to vest at the rate of 20% per year for each year thereafter, until they are
fully vested, unless a different vesting schedule is established by the Option
Committee of the Board of Directors on the date of grant. Options are
exercisable as they vest and expire ten years after the date of grant, except in
the event of termination, retirement or death of the optionee or a change in
control of the Company.
Option price
1995 1994 1993 per Share
-------- -------- -------- ----------------
Options outstanding at January 1...................... 198,975 84,150 0 $17.75 to $20.50
Granted............................................... 134,450 117,045 84,150 $12.38 to $20.50
Exercised............................................. 0 0 0 $0.00
Cancelled............................................. (11,635) (2,220) 0 $12.38 to $17.75
-------- ------- -------
Options outstanding at December 31.................... 321,790 198,975 84,150 $12.38 to $20.50
======= ======= =======
Options exercisable at December 31.................... 0 0 0
======= ======= =======
Shares available for future grant at December 31...... 518,210 641,025 755,850
======= ======= =======
1987 Nonqualified Stock Option Plan
The Company reserved 340,000 shares of its common stock for issuance of
nonqualified stock options to outside officers and directors, as well as key
employees. The stock options are exercisable at a price per share which may be
no less than the fair market value at the time of grant according to the vesting
provisions of the plan. Options awarded under the plan generally vest 40% after
two years and continue to vest at the rate of 20% per year for each year
thereafter, until fully vested. Options are exercisable as they vest and expire
ten years after the date of grant, except in the event of termination,
retirement or death of the optionee or a change in control of the Company.
Option price
1995 1994 1993 per Share
-------- -------- -------- ----------------
Options outstanding at January 1...................... 140,656 144,400 162,000 $ 2.92 to $17.25
Granted............................................... 17,000 2,256 4,000 $13.25 to $17.75
Exercised............................................. (6,000) (6,000) (21,600) $ 2.92
Cancelled............................................. (800) 0 0 $13.25
------- ------- -------
Options outstanding at December 31.................... 150,856 140,656 144,400 $ 2.92 to $17.75
======= ======= =======
Options exercisable at December 31.................... 137,544 123,284 116,240
======= ======= =======
Shares available for future grant at December 31...... 136,744 153,744 156,000
======= ======= =======
AMCOL INTERNATIONAL CORPORATION AND SUBSIDIARIES
Notes to Consolidated Financial Statements (Continued)
(Dollars in thousands, except per share amounts)
(12) Accrued Liabilities
1995 1994
---------- ----------
Estimated accrued severance taxes.................................................... $ 1,048 $ 1,410
Accrued employee benefits............................................................ 1,837 1,246
Accrued vacation pay................................................................. 1,438 1,172
Accrued dividends.................................................................... 1,344 1,140
Accrued bonus........................................................................ 781 575
Accrued commissions.................................................................. 578 1,125
Other................................................................................ 6,010 6,262
--------- ---------
$ 13,036 $ 12,930
========= =========
(13) Quarterly Results (Unaudited)
Unaudited summarized results for each quarter in 1995 and 1994 are as
follows:
1995 Quarter
--------------------------------------------
First Second Third Fourth
------- ------- ------- -------
Minerals..................................................... $39,097 $39,015 $38,203 $38,525
Absorbent Polymers........................................... 26,480 28,768 31,286 34,228
Environmental................................................ 7,925 10,609 17,790 14,096
Transportation............................................... 5,248 5,268 5,699 5,451
------- ------- ------- -------
Net Sales................................................. $78,750 $83,660 $92,978 $92,300
======= ======= ======= =======
Minerals..................................................... $ 8,027 $9,221 $ 7,624 $7,704
Absorbent Polymers........................................... 6,178 6,023 6,263 7,374
Environmental................................................ 2,528 3,552 4,996 4,380
Transportation............................................... 643 633 719 697
------- ------- ------- -------
Gross Profit.............................................. $17,376 $19,429 $19,602 $20,155
======= ======= ======= =======
Minerals..................................................... $ 3,791 $ 4,588 $ 4,145 $ 3,251
Absorbent Polymers........................................... 4,084 3,700 3,869 5,249
Environmental................................................ 9 966 2,706 1,624
Transportation............................................... 256 263 315 223
Corporate.................................................... (1,582) (1,739) (1,406) (1,915)
-------- -------- -------- --------
Operating Profit.......................................... $ 6,558 $ 7,778 $ 9,629 $ 8,432
======== ======== ======== ========
Net Income................................................... $ 3,631 $ 4,688 $ 4,917 $ 4,535
======== ======== ======== ========
Earnings per common and common equivalent share:............. $ 0.19 $ 0.24 $ 0.25 $ 0.23
======== ======== ======== ========
AMCOL INTERNATIONAL CORPORATION AND SUBSIDIARIES
Notes to Consolidated Financial Statements (Continued)
(Dollars in thousands, except per share amounts
(13) Quarterly Results (Unaudited) (Continued)
1994 Quarter
--------------------------------------------
First Second Third Fourth
------- ------- ------- -------
Minerals..................................................... $ 37,020 $37,756 $ 38,217 $41,497
Absorbent Polymers........................................... 12,205 14,137 16,084 16,165
Environmental................................................ 3,942 6,997 11,016 8,771
Transportation............................................... 4,679 5,122 5,658 6,177
------- ------ -------- -------
Net Sales................................................. $ 57,846 $64,012 $ 70,975 $72,610
======= ====== ======== =======
Minerals..................................................... $ 6,882 $7,549 $ 7,854 $10,992
Absorbent Polymers........................................... 3,160 3,444 4,502 4,160
Environmental................................................ 1,288 1,584 3,441 2,016
Transportation............................................... 587 665 698 665
------- ------ -------- -------
Gross Profit.............................................. $11,917 $13,242 $ 16,495 $17,833
======= ====== ======== =======
Minerals..................................................... $ 3,593 $ 3,962 $ 4,335 $ 7,755
Absorbent Polymers........................................... 1,507 1,697 2,469 2,286
Environmental................................................ 159 205 1,570 (154)
Transportation............................................... 222 268 304 231
------- ------ -------- -------
Operating Profit.......................................... $ 4,053 $ 4,688 $ 6,912 $ 8,338
======= ====== ======== =======
Net Income................................................... $ 2,490 $ 3,353 $ 4,238 $ 5,202
======= ====== ======== =======
Earnings per common and common equivalent share:............. $ 0.13 $ 0.17 $ 0.22 $ 0.26
======= ====== ======== =======
AMCOL INTERNATIONAL CORPORATION AND SUBSIDIARIES
Schedule II
Valuation and Qualifying Accounts
(Dollars in thousands)
Additions
-----------------------
Charged to
Balance at Charged to other Other charges Balance at
beginning of costs and account add (deduct) end of
Year Description year expenses describe describe year
- ------ --------------------------------- ------------- ---------- --------- -------------- ---------
1995 Allowance for doubtful accounts $1,336 $769 $-- $ (504)(1) $1,601
====== ==== === ======= ======
1994 Allowance for doubtful accounts $1,836 $978 $-- $(1,478)(1)(2) $1,336
====== ==== === ======= ======
1993 Allowance for doubtful accounts $1,262 $703 $-- $ (129)(1) $1,836
====== ==== === ======= ======
- -----------
<FN>
(1) Bad debts written off.
(2) During 1994 the Company acquired Aquatec and Hydron which included allowance for doubtful accounts of $60
and $15 respectively.
</FN>
SIGNATURES
Pursuant to the requirements of Section 13 of the Securities Exchange Act
of 1934, the registrant has duly caused this annual report to be signed on its
behalf by the undersigned, thereunto duly authorized.
Date: March 28, 1996
AMCOL INTERNATIONAL CORPORATION
By: /s/ John Hughes
---------------------------------
John Hughes
President; Chief Executive Officer
Pursuant to the requirements of the Securities Exchange Act of 1934, this
report has been signed below by the following persons on behalf of the
registrant and in the capacities and on the dates indicated.
/s/ John Hughes March 28, 1996
- ----------------------------------------
John Hughes
President; Chief Executive Officer
and Director
/s/ Paul G. Shelton March 28, 1996
- ----------------------------------------
Paul G. Shelton
Senior Vice President - Chief Financial
Officer; Treasurer and Director
/s/ C. Eugene Ray March 28, 1996
- ----------------------------------------
C. Eugene Ray
Director; Chairman of the Board
/s/ Jay D. Proops March 28, 1996
- ----------------------------------------
Jay D. Proops
Director
/s/ Robert C. Humphrey March 28, 1996
- ----------------------------------------
Robert C. Humphrey
Director
/s/ Robert E. Driscoll, III March 28, 1996
- ----------------------------------------
Robert E. Driscoll, III
Director
/s/ Raymond A. Foos March 28, 1996
- ----------------------------------------
Raymond A. Foos
Director
/s/ Clarence O. Redman March 28, 1996
- ----------------------------------------
Clarence O. Redman
Director
/s/ Arthur Brown March 28, 1996
- ----------------------------------------
Arthur Brown
Director
/s/ Dale E. Stahl March 28, 1996
- ----------------------------------------
Dale E. Stahl
Director
/s/ Paul C. Weaver March 28, 1996
- ----------------------------------------
Paul C. Weaver
Director
INDEX TO EXHIBITS
Exhibit
Number
3.1 Restated Certificate of Incorporation of the Company (5)
3.2 Bylaws of the Company (1), as amended
4 Article Fourth of the Company's Restated Certificate of Incorporation
(5)
10.1 AMCOL International Corporation 1983 Incentive Stock Option Plan (1); as
amended (3)*
10.4 Executive Medical Reimbursement Plan (1)*
10.5 Lease Agreement for office space dated September 29, 1986, between the
Company and American National Bank and Trust Company of Chicago (1) as
amended (8)
10.6 AMCOL International Corporation 1987 Non-Qualified Stock Option Plan
(2); as amended (6)*
10.7 Change in Control Agreement dated April 1, 1994, by and between
Registrant and John Hughes (6)*
10.8 Change in Control Agreement dated April 1, 1994, by and between
Registrant and Paul G. Shelton (6)*
10.9 Change in Control Agreement dated February 7, 1996, by and between
Registrant and Robert C. Steele
10.10 Change in Control Agreement dated February 7, 1996, by and between
Registrant and Lawrence E. Washow
10.11 Change in Control Agreement dated February 7, 1996, by and between
Registrant and Roger P. Palmer
10.12 Change in Control Agreement dated January 24, 1994, by and between
Registrant and Peter L. Maul (6)*
10.13 AMCOL International Corporation Dividend Reinvestment and Stock Purchase
Plan (4); as amended (6)*
10.14 AMCOL International Corporation 1993 Stock Plan (6)*, as amended
10.15 Credit Agreement by and among AMCOL International Corporation and Harris
Trust and Savings Bank, individually and as agent, NBD Bank, LaSalle
National Bank and the Northern Trust Company dated October 4, 1994, (7);
as amended, First Amendment to Credit Agreement dated September 25, 1996
(9)
10.16 Note Agreement dated October 1, 1994, between AMCOL International
Corporation and Principal Mutual Life Insurance Company (7)
18 Letter regarding change in accounting principles
21 Subsidiary of the Company
23 Consent of Independent Public Accountants
27 Financial Data Schedule
- ----------------
<FN>
(1) Exhibit is incorporated by reference to the Registrant's Form 10 filed
with the Securities and Exchange Commission on July 27, 1987.
(2) Exhibit is incorporated by reference to the Registrant's Form 10-K
filed with the Securities and Exchange Commission for the year ended
December 31, 1988.
(3) Exhibit is incorporated by reference to the Registrant's Form 10-K
filed with the Securities and Exchange Commission for the year ended
December 31, 1989.
(4) Exhibit is incorporated by reference to the Registrant's Form 10-K
filed with the Securities and Exchange Commission for the year ended
December 31, 1992.
(5) Exhibit is incorporated by reference to the Registrant's Form S-3 filed
with the Securities and Exchange Commission on September 15, 1993.
(6) Exhibit is incorporated by reference to the Registrant's Form 10-K
filed with the Securities and Exchange Commission for the year ended
December 31, 1993.
(7) Exhibit is incorporated by reference to the Registrant's Form 10-Q
filed with the Securities and Exchange Commission for the quarter ended
September 30, 1994.
(8) Exhibit is incorporated by reference to the Registrant's Form 10-K
filed with the Securities and Exchange Commission for the year ended
December 31, 1994.
(9) Exhibit is incorporated by reference to the Registrant's Form 10-Q
filed with the Securities and Exchange Commission for the quarter ended
September 30, 1995.
* Management contract or compensatory plan or arrangement required to be
filed as an exhibit to this Annual Report on Form 10-K pursuant to Item
14(c) of Form 10-K.
</FN>