FORM 10-Q
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
[X] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(D) OF THE
SECURITIES EXCHANGE ACT OF 1934
For the period ended October 1, 1995
OR
[_] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
For the transition period from ______________ to ______________
Commission File Number 0-17028
IRONTON IRON, INC.
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(Exact name of registrant as specified in its charter)
Ohio 31-117407
- ---------------------------- -------------------
(State or other jurisdiction (I.R.S. Employer
of incorporation or Identification No.)
organization)
5445 Corporate Drive, Suite 200, Troy, Michigan 48098
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(Address of principal executive offices and zip code)
(810) 641-1900
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(Registrant's telephone number, including area code)
Indicate by check mark whether the registrant (1) has filed all
reports required to be filed by Section 13 or 15(d) of the
Securities Exchange Act of 1934 during the preceding 12 months
(or for such shorter period that the registrant was required to
file such reports), and (2) has been subject to such filing
requirements for the past 90 days. Yes X No
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Shares outstanding of each of the issuer's classes of common
stock at November 10, 1995: 23,000 shares of Common Stock, no
par value.
PART I - Financial Information
ITEM 1. Financial Statements
Ironton Iron, Inc.
Interim Condensed Balance Sheets
December 31, October 1,
1994 1995
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(in thousands of dollars)
ASSETS
Current assets:
Cash $ 699 $ 61
Accounts receivable:
Trade 8,093 8,849
Other 712 574
Inventories 1,313 1,491
Other current assets 26 71
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Total current assets 10,843 11,046
Property, plant and equipment:
Land 295 295
Building and improvements 4,765 4,864
Machinery and equipment 24,240 25,067
Construction in progress 1,010 2,033
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30,310 32,259
Less accumulated depreciation 9,957 12,661
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20,353 19,598
Other assets 220 93
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$31,416 $30,737
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See accompanying notes.
December 31, October 1,
1994 1995
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(in thousands of dollars)
LIABILITIES AND NET SHAREHOLDER'S DEFICIENCY
Current Liabilities:
Accounts payable $ 5,545 $ 4,844
Accrued wages and benefits 919 1,206
Accrued workers' compensation 546 301
Other accrued liabilities 1,463 1,083
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Total current liabilities 8,473 7,434
Due to affiliates 37,002 29,903
Redeemable preferred stock 3,038 3,126
Net shareholder's deficiency:
Common stock 2,000 2,000
Additional paid-in capital 43,523 49,523
Accumulated deficit (62,620) (61,249)
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Net shareholder's deficiency (17,097) (9,726)
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$31,416 $ 30,737
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See accompanying Notes.
Ironton Iron, Inc.
Interim Condensed Consolidated Statements of Income
Three months ended Nine months ended
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October 2, October 1, October 2, October 1,
1994 1995 1994 1995
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Net sales $19,124 $17,881 $57,248 $58,935
Cost of Sales 19,779 17,013 51,110 53,866
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Gross margin (655) 868 138 5,069
Corporate charges from parent
companies 1,125 706 3,448 2,473
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Operating profit (loss) (1,780) 162 (3,310) 2,596
Interest expense (714) (299) (1,961) (1,137)
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Income (loss) before income taxes (2,494) (137) (5,271) 1,459
Provision for income taxes -- -- -- --
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Net income (loss) $(2,494) $ (137) $(5,271) $ 1,459
============================= ============================
See accompanying notes.
Ironton Iron, Inc.
Interim Condensed Statements of Cash Flows
Nine months ended
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October 2, October 1,
1994 1995
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(In thousands of dollars)
Operating activities:
Net income (loss) $(5,271) $ 1,459
Adjustments to reconcile net income (Loss) to
cash used in operating activities:
Depreciation and amortization 2,493 2,840
Other 12 --
Changes in assets and liabilities:
Accounts receivable (2,685) (618)
Inventories (695) (178)
Accounts payable and accrued liabilities 1,793 (1,006)
Other assets and liabilities (40) (45)
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Net cash provided by (used in) operating activities (4,393) 2,452
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Investment activities:
Additions to property, plant and equipment (3,484) (1,991)
Other 8 --
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Net cash used in investment activities (3,476) (1,991)
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Financing activities:
Increase due to affiliates 7,365 (1,099)
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Net cash provided by (used in) financing activities 7,365 (1,099)
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Net decrease in cash (504) (638)
Cash at beginning of period 508 699
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Cash at end of period $ 4 $ 61
==============================
See accompanying notes.
Ironton Iron, Inc.
Notes to Interim Condensed Financial Statements
October 1, 1995
1. The condensed balance sheet at December 31, 1994 has been derived
from audited financial statements at October 1, 1995 and for the
periods ended October 2, 1994 and October 1, 1995 are unaudited.
However, in the opinion of management, all adjustments, consisting
only of normal recurring accruals, necessary for a fair presentation
have been included. The results of operations for the period ended
October 1, 1995 are not necessarily indicative of the results to be
expected for the full year.
2. Inventories consist of the following (in thousands of dollars):
December 31, October 1,
1994 1995
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Finished goods $ 356 $ 255
Work on process 400 432
Raw materials 365 523
Supplies and patterns 192 281
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$ 1,313 $1,491
==========================
3. Effective January 1, 1995, the Company's parent, Intermet Foundries,
Inc., contributed $6,000,000 of intercompany debt to additional paid
in capital.
4. Because all common stock of the Company is owned by Intermet
Foundries, Inc., no income or loss per common share information is
included herein.
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS
OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
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Material Changes in Financial Condition
- ---------------------------------------
The company's financial condition has slightly improved since December
31, 1994. The Company generated positive cash from operations due to
better operating results. However, the Company remains dependent on its
parent companies, Intermet Foundries, Inc. and Intermet Corporation, for
continued financial support.
Material Changes in Results of Operations
- -----------------------------------------
The Foundry is coming off a period of operating at near capacity. Almost
half of the Ford I-Beam business has begun its planned phase out. Sales
for nine months of 1995 are comparable to 1994. The Company is working
to secure replacement business.
Plant operations remain improved over 1994. Gross profit rose to 8.6%
for the nine months of 1995 from .2% for the comparable 9 month period in
the prior year. Corporate charges have declined due to the reduced level
of support provided by the parent companies. All of the above led to the
Company reporting a 1995 year-to-date profit compared to a loss for 1994.
Cumulative losses since 1988 when the Company was acquired by Intermet
are approximately $52 million.
There is no income tax provision in 1995 because on a separate income tax
return basis the Company has utilized available net operating losses to
offset any taxes which would be required.
PART II - OTHER INFORMATION
Item 1. Legal Proceedings
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The Registrant has entered into negotiations with the Office of
the Ohio Attorney General with respect to certain past
violations by the Registrant of Ohio water pollution laws and
regulations. The Attorney General's office has advised the
Registrant that it could avoid litigation with respect to such
violations by entering into a consent order. The parties have
tentatively agreed to a penalty of $285,000 and documentation
to effectuate the settlement is being prepared.
Item 2. Changes in Securities
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None
Item 3. Defaults upon Senior Securities
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None
Item 4. Submission of Matters to a Vote of Security Holders
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None
Item 5. Other Information
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None
Item 6. Exhibits and Reports on Form 8-K
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(a) The following exhibit is filed as a part of this report
Exhibit 27 - Financial Data Schedule
(b) None
SIGNATURE
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Pursuant to the requirements of the Securities Exchange Act of 1934,
the Registrant has duly caused this report to be signed on its behalf by
the undersigned thereunto duly authorized.
IRONTON IRON, INC.
By: /s/ Doretha J. Christoph
Doretha J. Christoph
Vice President of Finance
(Principal Financial Officer)
Date: November 15, 1995