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FORM 10-Q
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
------------------------
(Mark One)
/X/ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
FOR THE QUARTERLY PERIOD ENDED JUNE 30, 2000
OR
/ / TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
FOR THE TRANSITION PERIOD FROM TO
COMMISSION FILE NUMBER 1-9753
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GEORGIA GULF CORPORATION
(Exact name of registrant as specified in its charter)
DELAWARE 58-1563799
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
400 PERIMETER CENTER TERRACE, 30346
SUITE 595, ATLANTA, GEORGIA (Zip code)
(Address of principal executive offices)
------------------------
Registrant's telephone number, including area code: (770) 395-4500
Indicate by check mark whether the registrant (1) has filed all reports
required to be filed by Section 13 or 15(d) of the Securities Exchange Act of
1934 during the preceding 12 months (or for such shorter period that the
registrant was required to file such reports), and (2) has been subject to such
filing requirements for the past 90 days. Yes /X/ No / /
Indicate the number of shares outstanding of each of the issuer's classes of
common stock, as of the latest practicable date.
OUTSTANDING AS OF
CLASS AUGUST 9, 2000
- ----- -----------------
Common Stock, $0.01 par value............................. 31,486,727 shares
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GEORGIA GULF CORPORATION
FORM 10-Q
QUARTERLY PERIOD ENDED JUNE 30, 2000
INDEX
PAGE
NUMBERS
-------
PART I. FINANCIAL INFORMATION
Item 1. Financial Statements
Condensed Consolidated Balance Sheets as of June 30, 1
2000
and December 31, 1999.................................
Condensed Consolidated Statements of Income for the 2
Three and Six Months Ended June 30, 2000 and 1999.....
Condensed Consolidated Statements of Cash Flows for the 3
Six Months Ended June 30, 2000 and 1999...............
Notes to Condensed Consolidated Financial Statements as 4-12
of June 30, 2000......................................
Item 2. Management's Discussion and Analysis of Financial 13-17
Condition and Results of Operations.....................
Item 3. Quantitative and Qualitative Disclosures About 17
Market Risk.............................................
PART II. OTHER INFORMATION
Item 1. Legal Proceedings................................. 18
Item 4. Submission of Matters to a Vote of Security 18
Holders.................................................
Item 6. Exhibits and Reports on Form 8-K.................. 18
SIGNATURES.................................................. 19
PART I. FINANCIAL INFORMATION.
ITEM 1. FINANCIAL STATEMENTS.
GEORGIA GULF CORPORATION AND SUBSIDIARIES
CONDENSED CONSOLIDATED BALANCE SHEETS
(IN THOUSANDS, EXCEPT SHARE DATA)
JUNE 30, DECEMBER 31,
2000 1999
----------- ------------
ASSETS
Cash and cash equivalents................................... $ 1,038 $ 4,424
Receivables................................................. 153,338 164,376
Inventories................................................. 145,484 112,844
Prepaid expenses............................................ 5,449 5,440
Deferred income taxes....................................... 6,172 6,172
----------- -----------
Total current assets...................................... 311,481 293,256
----------- -----------
Property, plant and equipment, at cost...................... 995,783 985,825
Less accumulated depreciation............................. 347,163 314,275
----------- -----------
Property, plant and equipment, net...................... 648,620 671,550
----------- -----------
Goodwill.................................................... 81,437 82,676
Other assets................................................ 49,934 50,083
Net assets of discontinued operation........................ -- 443
----------- -----------
Total assets................................................ $ 1,091,472 $ 1,098,008
=========== ===========
LIABILITIES AND STOCKHOLDERS' EQUITY
Current portion of long-term debt........................... $ 15,021 $ 22,000
Accounts payable............................................ 162,797 143,898
Interest payable............................................ 5,210 5,926
Accrued income taxes........................................ 905 494
Accrued compensation........................................ 10,585 7,682
Other accrued liabilities................................... 11,187 17,632
----------- -----------
Total current liabilities................................. 205,705 197,632
----------- -----------
Long-term debt, net of current portion...................... 664,316 749,194
----------- -----------
Deferred income taxes....................................... 102,479 93,949
----------- -----------
Stockholders' equity
Common stock--$0.01 par value............................. 315 313
Additional paid-in capital................................ 7,815 5,250
Retained earnings......................................... 110,842 51,670
----------- -----------
Total stockholders' equity.............................. 118,972 57,233
----------- -----------
Total liabilities and stockholders' equity.................. $ 1,091,472 $ 1,098,088
=========== ===========
Common shares outstanding................................... 31,485,060 31,290,862
=========== ===========
See notes to condensed consolidated financial statements.
1
GEORGIA GULF CORPORATION AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF INCOME
(IN THOUSANDS, EXCEPT SHARE DATA)
THREE MONTHS ENDED SIX MONTHS ENDED
JUNE 30, JUNE 30,
------------------------- -------------------------
2000 1999 2000 1999
----------- ----------- ----------- -----------
Net sales................................. $ 413,406 $ 180,713 $ 817,077 $ 359,977
----------- ----------- ----------- -----------
Operating costs and expenses
Cost of sales........................... 332,924 156,129 654,780 311,820
Selling and administrative.............. 11,358 9,625 25,032 19,919
----------- ----------- ----------- -----------
Total operating costs and expenses.... 344,282 165,754 679,812 331,739
----------- ----------- ----------- -----------
Operating income.......................... 69,124 14,959 137,265 28,238
Other expense
Interest, net........................... 17,952 7,359 36,960 14,682
----------- ----------- ----------- -----------
Income from continuing operations before
income taxes............................ 51,172 7,600 100,305 13,556
Provision for income taxes................ 18,421 2,773 36,116 4,947
----------- ----------- ----------- -----------
Income from continuing operations......... 32,751 4,827 64,189 8,609
Discontinued operation
Loss from discontinued operation, net... -- (757) -- (2,005)
----------- ----------- ----------- -----------
Net income................................ $ 32,751 $ 4,070 $ 64,189 $ 6,604
=========== =========== =========== ===========
Earnings / (loss) per share:
Basic
Continuing operations................. $ 1.04 $ 0.15 $ 2.05 $ 0.27
Discontinued operation................ -- (0.02) -- (0.06)
----------- ----------- ----------- -----------
$ 1.04 $ 0.13 $ 2.05 $ 0.21
=========== =========== =========== ===========
Weighted average common shares-basic.... 31,364,961 30,922,192 31,333,119 30,910,525
=========== =========== =========== ===========
Diluted
Continuing operations................. $ 1.04 $ 0.15 $ 2.03 $ 0.27
Discontinued operation................ -- (0.02) -- (0.06)
----------- ----------- ----------- -----------
$ 1.04 $ 0.13 $ 2.03 $ 0.21
=========== =========== =========== ===========
Weighted average common
shares-diluted........................ 31,577,500 31,032,475 31,558,983 31,032,917
=========== =========== =========== ===========
See notes to condensed consolidated financial statements.
2
GEORGIA GULF CORPORATION AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(IN THOUSANDS)
SIX MONTHS ENDED
JUNE 30,
------------------------
2000 1999
--------- --------
Cash flows from operating activities:
Net income................................................ $ 64,189 $ 6,604
Adjustments to reconcile net income to net cash provided
by operating activities:
Depreciation and amortization........................... 37,535 22,527
Loss from discontinued operation, net................... -- 2,005
Change in operating assets, liabilities and other....... (484) (13,994)
--------- --------
Net cash provided by continuing operations................ 101,240 17,142
Net cash provided by discontinued operation............... 443 3,622
--------- --------
Net cash provided by operating activities................. 101,683 20,764
--------- --------
Cash flows from financing activities:
Long-term debt proceeds................................. 33,819 115,000
Long-term debt payments................................. (125,675) (124,550)
Proceeds from issuance of common stock.................. 1,762 359
Dividends paid.......................................... (5,017) (4,946)
--------- --------
Net cash used in financing activities..................... (95,111) (14,137)
--------- --------
Cash flows from investing activities:
Capital expenditures.................................... (9,958) (7,119)
--------- --------
Net change in cash and cash equivalents................... (3,386) (492)
Cash and cash equivalents at beginning of period.......... 4,424 1,244
--------- --------
Cash and cash equivalents at end of period................ $ 1,038 $ 752
========= ========
See notes to condensed consolidated financial statements.
3
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
NOTE 1: BASIS OF PRESENTATION
The accompanying unaudited condensed consolidated financial statements have
been prepared in accordance with accounting principles generally accepted in the
United States for interim financial information and with the instructions to
Form 10-Q and Article 10 of Regulation S-X. Accordingly, they do not include all
of the information and footnotes required by accounting principles generally
accepted in the United States for complete financial statements. In our opinion,
all adjustments (consisting of normal recurring accruals) considered necessary
for a fair presentation have been included. For further information, refer to
our consolidated financial statements and footnotes thereto included in our
Annual Report on Form 10-K for the year ended December 31, 1999.
Our operating results for the three- and six-month periods ended June 30,
2000 are not necessarily indicative of the results that may be expected for the
year ending December 31, 2000.
NOTE 2: NEW ACCOUNTING PRONOUNCEMENT
During June 1998, the Financial Accounting Standards Board ("FASB") issued
Statement of Financial Accounting Standards ("SFAS") No. 133, "Accounting for
Derivative Instruments and Hedging Activities." The statement establishes
accounting and reporting standards requiring that every derivative instrument be
recorded in the balance sheet as either an asset or liability measured at its
fair value and that changes in the derivative's fair value be recognized
currently in earnings unless specific hedge accounting criteria are met. Special
accounting for qualifying hedges allows derivative gains and losses to offset
related results on the hedged item in the income statement, and requires that a
company must formally document, designate and assess the effectiveness of
transactions that receive hedge accounting. As amended, SFAS No. 133 is
effective for fiscal quarters of all fiscal years beginning after June 15, 2000,
although earlier adoption is permitted. SFAS No. 133 cannot be applied
retroactively. We have not yet quantified the impact of adopting SFAS No. 133 on
our financial statements.
NOTE 3: ACQUISITION
On November 12, 1999, we completed the acquisition of the assets of the
vinyls business of CONDEA Vista Company. The purchase included substantially all
of the assets and net working capital of the vinyls business as of the date of
acquisition. The acquisition was accounted for as a purchase, and the results of
the vinyls business's operations have been included in our consolidated
financial statements from the date of acquisition. The initial purchase price,
including related fees and expenses, consisted of $263,000,000 of cash and the
issuance of a $10,000,000 two-year, non-interest-bearing note payable to CONDEA
Vista Company. The note was recorded at its net present value of $7,750,000 at
the date of acquisition. The initial purchase price was subject to an adjustment
for actual working capital acquired. During the second quarter of 2000, we paid
CONDEA Vista Company approximately $16,286,000 representing the adjustment for
working capital. The purchase price approximated the fair market value of the
net assets acquired.
NOTE 4: DISCONTINUED OPERATION
On September 2, 1999, we announced our decision to exit the methanol
business at the end of 1999. In connection with the discontinuance of the
methanol business, we incurred a one-time charge of $7,631,000, net of income
tax benefits, related to the write-off of the methanol plant assets, net of
expected proceeds, and an accrual for estimated losses during the phase-out
period. The disposition of the methanol operation represented the disposal of a
business segment under Accounting Principles
4
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
NOTE 4: DISCONTINUED OPERATION (CONTINUED)
Board ("APB") Opinion No. 30. Accordingly, results of the methanol operation
were classified as discontinued, and prior periods were restated, including the
reallocation of fixed overhead charges to other business segments. For business
segment reporting purposes, the methanol business results were previously
classified as the segment "Gas Chemicals."
Net sales and income from the discontinued operation were as follows:
THREE MONTHS ENDED SIX MONTHS ENDED
JUNE 30, 1999 JUNE 30, 1999
------------------ ----------------
IN THOUSANDS
Net sales................................ $ 10,759 $ 19,083
======== ========
Pretax loss from discontinued
operation.............................. $ (1,192) $ (3,157)
Income tax benefit....................... 435 1,152
-------- --------
Net loss from discontinued operation..... $ (757) $ (2,005)
======== ========
Assets and liabilities of the discontinued operation were as follows:
DECEMBER 31, 1999
-----------------
IN THOUSANDS
Current assets.............................................. $3,553
Current liabilities......................................... (3,110)
------
Net assets of discontinued operation........................ $ 443
======
NOTE 5: RECEIVABLES
In May 2000, we amended our receivables transfer agreement pursuant to which
we sell a percentage ownership interest in a defined pool of our trade
receivables. As a result of this amendment, we increased the amount of
participating interest in new receivables we sell from $50,000,000 to
$75,000,000.
NOTE 6: INVENTORIES
The major classes of inventories were as follows:
JUNE 30, DECEMBER 31,
2000 1999
-------- ------------
IN THOUSANDS
Raw materials and supplies............................ $ 62,658 $ 48,868
Finished goods........................................ 82,826 63,976
-------- --------
$145,484 $112,844
======== ========
NOTE 7: DERIVATIVE FINANCIAL INSTRUMENTS
We have two interest rate swap agreements for a total notional amount of
$100,000,000 maturing in June 2002. We also have an interest rate swap agreement
for a notional amount of $100,000,000 maturing August 2002. We have designated
all of our interest rate swaps as hedges against our senior credit facility
floating rate debt.
5
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
NOTE 7: DERIVATIVE FINANCIAL INSTRUMENTS (CONTINUED)
We do not use derivatives for trading purposes. Interest rate swap
agreements, a form of derivative, are used to manage interest costs on certain
portions of our long-term debt. These financial statements do not reflect
temporary market gains and losses on derivative financial instruments. Amounts
paid or received on the interest rate swap agreements are recorded to interest
expense as incurred. As of June 30, 2000, and December 31, 1999, interest rate
swap agreements were the only form of derivative financial instruments
outstanding. The fair values of these swap agreements as of June 30, 2000 and
December 31, 1999 were $3,727,000 and $3,405,000 (in our favor), respectively.
NOTE 8: EARNINGS PER SHARE
There are no adjustments to "Net income" or "Income from continuing
operations" for the diluted earnings per share computations.
The following table reconciles the denominator for the basic and diluted
earnings per share computations shown on the condensed consolidated statements
of income:
THREE MONTHS ENDED SIX MONTHS ENDED
JUNE 30, JUNE 30,
--------------------- ---------------------
2000 1999 2000 1999
---------- -------- ---------- --------
IN THOUSANDS
Weighted average common shares--basic............. 31,365 30,922 31,333 30,911
Plus incremental shares from assumed conversions:
Options......................................... 153 93 165 102
Employee stock purchase plan rights............. 60 17 61 20
------ ------ ------ ------
Weighted average common shares--diluted........... 31,578 31,032 31,559 31,033
====== ====== ====== ======
NOTE 9: SEGMENT INFORMATION
We have identified two reportable segments through which we conduct our
operating activities: chlorovinyls and aromatics. These two segments reflect the
organization which we use for internal reporting. The chlorovinyls segment is a
highly integrated chain of products which includes chlorine, caustic soda, vinyl
chloride monomer and vinyl resins and compounds. The aromatics segment is also
vertically integrated and includes cumene and the co-products phenol and
acetone. A third product segment, gas chemicals, which included methanol, was
discontinued in the third quarter of 1999. See Note 4 for a discussion of the
discontinuance of our methanol operation.
Earnings of industry segments exclude interest income and expense,
unallocated corporate expenses and general plant services, provision for income
taxes, and income and expense items
6
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
NOTE 9: SEGMENT INFORMATION (CONTINUED)
reflected as "other income (expense)" on our consolidated statements of income.
Intersegment sales and transfers are insignificant.
THREE MONTHS ENDED SIX MONTHS ENDED
JUNE 30, JUNE 30,
--------------------- ---------------------
2000 1999 2000 1999
---------- -------- ---------- --------
IN THOUSANDS
Segment net sales:
Chlorovinyls................................. $334,212 $132,462 $667,938 $253,270
Aromatics.................................... 79,194 48,251 149,139 106,707
-------- -------- -------- --------
Net sales...................................... $413,406 $180,713 $817,077 $359,977
======== ======== ======== ========
Segment operating income:
Chlorovinyls................................. $ 75,173 $ 14,036 $154,747 $ 24,382
Aromatics.................................... (2,900) 3,078 (9,383) 9,217
Corporate and general plant services......... (3,149) (2,155) (8,099) (5,361)
-------- -------- -------- --------
Total operating income......................... $ 69,124 $ 14,959 $137,265 $ 28,238
======== ======== ======== ========
NOTE 10: SUPPLEMENTAL GUARANTOR INFORMATION
Our payment obligations under our 10 3/8% senior subordinated notes are
guaranteed by GG Terminal Management Corporation, Great River Oil & Gas
Corporation, North American Plastics, LLC, Georgia Gulf Lake Charles, LLC and
Georgia Gulf Chemicals & Vinyls, LLC, some of our wholly owned subsidiaries (the
"Guarantor Subsidiaries"). The guarantees are full, unconditional and joint and
several. The following unaudited condensed consolidating balance sheets,
statements of income and statements of cash flows present the financial
statements of the parent company, and the combined financial statements of our
Guarantor Subsidiaries and our remaining subsidiaries (the "Non-guarantor
Subsidiaries"). Separate financial statements of the Guarantor Subsidiaries are
not presented because we have determined that they would not be material to
investors.
In connection with the acquisition of the vinyls business from CONDEA Vista
Company on November 12, 1999, we essentially became a holding company by
transferring our operating assets and employees to our wholly owned subsidiary,
Georgia Gulf Chemicals & Vinyls LLC. Provisions in our senior credit facility
limit payment of dividends, distributions, loans and advances to us by our
subsidiaries.
7
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
NOTE 10: SUPPLEMENTAL GUARANTOR INFORMATION (CONTINUED)
GEORGIA GULF CORPORATION AND SUBSIDIARIES
SUPPLEMENTAL CONDENSED CONSOLIDATING BALANCE SHEET
JUNE 30, 2000
PARENT GUARANTOR NON-GUARANTOR
COMPANY SUBSIDIARIES SUBSIDIARIES ELIMINATIONS CONSOLIDATED
-------- ------------ ------------- ------------ ------------
(IN THOUSANDS)
Cash and cash equivalents......... $ 869 $ 158 $ 11 $ -- $ 1,038
Receivables....................... 54,400 288,924 67,727 (257,713) 153,338
Inventories....................... -- 145,484 -- -- 145,484
Prepaid expenses.................. -- 5,172 277 -- 5,449
Deferred income taxes............. -- 6,172 -- -- 6,172
-------- ---------- ------- --------- ----------
Total current assets............ 55,269 445,910 68,015 (257,713) 311,481
-------- ---------- ------- --------- ----------
Plant, property and equipment, at
cost............................ 1,418 994,365 -- -- 995,783
Less accumulated depreciation... 1,038 346,125 -- -- 347,163
-------- ---------- ------- --------- ----------
Plant, property and equipment,
net......................... 380 648,240 -- -- 648,620
-------- ---------- ------- --------- ----------
Goodwill.......................... -- 81,437 -- -- 81,437
Other assets...................... 7,876 41,946 112 -- 49,934
Investment in subsidiaries........ 587,101 56,824 -- (643,925) --
-------- ---------- ------- --------- ----------
Total assets...................... $650,626 $1,274,357 $68,127 $(901,638) $1,091,472
======== ========== ======= ========= ==========
Current portion of long-term
debt............................ $ -- $ 15,021 $ -- $ -- $ 15,021
Account payable................... 192,913 216,308 11,289 (257,713) 162,797
Interest payable.................. 5,228 (18) -- -- 5,210
Accrued income taxes.............. -- 305 600 -- 905
Accrued compensation.............. -- 10,585 -- -- 10,585
Other accrued liabilities......... -- 11,187 -- -- 11,187
-------- ---------- ------- --------- ----------
Total current liabilities....... 198,141 253,388 11,889 (257,713) 205,705
-------- ---------- ------- --------- ----------
Long-term debt.................... 333,513 330,803 -- -- 664,316
-------- ---------- ------- --------- ----------
Deferred income taxes............. -- 102,479 -- -- 102,479
-------- ---------- ------- --------- ----------
Stockholder's equity
Common Stock.................... 315 6 20 (26) 315
Additional paid-in-capital...... 7,815 467,322 55,587 (522,909) 7,815
Retained earnings............... 110,842 120,359 631 (120,990) 110,842
-------- ---------- ------- --------- ----------
Total stockholders' equity...... 118,972 587,687 56,238 (643,925) 118,972
-------- ---------- ------- --------- ----------
Total liabilities and
stockholders' equity............ $650,626 $1,274,357 $68,127 $(901,638) $1,091,472
======== ========== ======= ========= ==========
8
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
NOTE 10: SUPPLEMENTAL GUARANTOR INFORMATION (CONTINUED)
GEORGIA GULF CORPORATION AND SUBSIDIARIES
SUPPLEMENTAL CONDENSED CONSOLIDATING BALANCE SHEET
DECEMBER 31, 1999
PARENT GUARANTOR NON-GUARANTOR
COMPANY SUBSIDIARIES SUBSIDIARIES ELIMINATIONS CONSOLIDATED
-------- ------------ ------------- ------------ ------------
(IN THOUSANDS)
Cash and cash equivalents......... $ 4,151 $ 252 $ 21 $ -- $ 4,424
Receivables....................... 70,008 239,225 125,453 (270,310) 164,376
Inventories....................... -- 112,844 -- -- 112,844
Prepaid expenses.................. -- 4,786 654 -- 5,440
Deferred income taxes............. -- 6,172 -- -- 6,172
-------- ---------- -------- --------- ----------
Total current assets............ 74,159 363,279 126,128 (270,310) 293,256
-------- ---------- -------- --------- ----------
Plant, property and equipment, at
cost............................ -- 985,825 -- -- 985,825
Less accumulated depreciation... -- 314,275 -- -- 314,275
-------- ---------- -------- --------- ----------
Plant, property and equipment,
net........................... -- 671,550 -- -- 671,550
-------- ---------- -------- --------- ----------
Goodwill.......................... -- 82,676 -- -- 82,676
Other assets...................... 7,906 42,128 49 -- 50,083
Investment in subsidiaries........ 513,000 55,588 -- (568,588) --
Net assets of discontinued
operation....................... -- 443 -- -- 443
-------- ---------- -------- --------- ----------
Total assets...................... $595,065 $1,215,664 $126,177 $(838,898) $1,098,008
======== ========== ======== ========= ==========
Current portion of long-term
debt............................ $ -- $ 22,000 $ -- $ -- $ 22,000
Accounts payable.................. 200,302 149,019 64,887 (270,310) 143,898
Interest payable.................. 4,336 1,590 -- -- 5,926
Accrued compensation.............. -- 7,682 -- -- 7,682
Other accrued liabilities......... -- 14,046 4,080 -- 18,126
-------- ---------- -------- --------- ----------
Total current liabilities....... 204,638 194,337 68,967 (270,310) 197,632
-------- ---------- -------- --------- ----------
Long-term debt, net of current
portion......................... 333,194 416,000 -- -- 749,194
-------- ---------- -------- --------- ----------
Deferred income taxes............. -- 93,949 -- -- 93,949
-------- ---------- -------- --------- ----------
Stockholders' equity
Common stock.................... 313 6 20 (26) 313
Additional paid-in capital...... 5,250 467,322 55,587 (522,909) 5,250
Retained earnings............... 51,670 44,050 1,603 (45,653) 51,670
-------- ---------- -------- --------- ----------
Total stockholders' equity...... 57,233 511,378 57,210 (568,588) 57,233
-------- ---------- -------- --------- ----------
Total liabilities and
stockholders' equity............ $595,065 $1,215,664 $126,177 $(838,898) $1,098,008
======== ========== ======== ========= ==========
9
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
NOTE 10: SUPPLEMENTAL GUARANTOR INFORMATION (CONTINUED)
GEORGIA GULF CORPORATION AND SUBSIDIARIES
SUPPLEMENTAL CONDENSED CONSOLIDATING INCOME STATEMENT
SIX MONTHS ENDED JUNE 30, 2000
PARENT GUARANTOR NON-GUARANTOR
COMPANY SUBSIDIARIES SUBSIDIARIES ELIMINATIONS CONSOLIDATED
-------- ------------ ------------- ------------ ------------
(IN THOUSANDS)
Revenues........................... $ -- $817,383 $4,083 $ (4,389) $817,077
Operating costs and expenses
Cost of sales.................... -- 654,780 -- -- 654,780
Selling and administrative....... 2,675 24,587 2,159 (4,389) 25,032
-------- -------- ------ -------- --------
Total operating costs and
expenses......................... 2,675 679,367 2,159 (4,389) 679,812
-------- -------- ------ -------- --------
Operating income................... (2,675) 138,016 1,924 -- 137,265
Other income (expense)
Interest expense, net............ (16,250) (20,710) -- -- (36,960)
Equity in income of
subsidiaries................... 76,301 1,236 -- (77,537) --
-------- -------- ------ -------- --------
Income before taxes................ 57,376 118,542 1,924 (77,537) 100,305
Provision for income taxes......... (6,813) 42,233 696 -- 36,116
-------- -------- ------ -------- --------
Net income......................... $ 64,189 $ 76,309 $1,228 $(77,537) $ 64,189
======== ======== ====== ======== ========
GEORGIA GULF CORPORATION AND SUBSIDIARIES
SUPPLEMENTAL CONDENSED CONSOLIDATING INCOME STATEMENT
SIX MONTHS ENDED JUNE 30, 1999
PARENT GUARANTOR NON-GUARANTOR
COMPANY SUBSIDIARIES SUBSIDIARIES ELIMINATIONS CONSOLIDATED
-------- ------------ ------------- ------------ ------------
(IN THOUSANDS)
Revenues........................... $316,886 $43,232 $1,566 $(1,707) $359,977
Operating costs and expenses
Cost of sales.................... 280,943 30,877 -- -- 311,820
Selling and administrative....... 18,954 1,180 1,492 (1,707) 19,919
-------- ------- ------ ------- --------
Total operating costs and
expenses......................... 299,897 32,057 1,492 (1,707) 331,739
-------- ------- ------ ------- --------
Operating income................... 16,989 11,175 74 -- 28,238
Other income (expense)
Interest expense, net............ (14,682) -- -- -- (14,682)
Equity in income of
subsidiaries..................... 7,328 -- -- (7,328) --
-------- ------- ------ ------- --------
Income from continuing operations
before taxes..................... 9,635 11,175 74 (7,328) 13,556
Provision for income taxes......... 1,026 3,921 -- -- 4,947
-------- ------- ------ ------- --------
Income from continuing
operations....................... 8,609 7,254 74 (7,328) 8,609
Loss from discontinued operation,
net.............................. (2,005) -- -- -- (2,005)
-------- ------- ------ ------- --------
Net income......................... $ 6,604 $ 7,254 $ 74 $(7,328) $ 6,604
======== ======= ====== ======= ========
10
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
NOTE 10: SUPPLEMENTAL GUARANTOR INFORMATION (CONTINUED)
GEORGIA GULF CORPORATION AND SUBSIDIARIES
SUPPLEMENTAL CONDENSED CONSOLIDATING STATEMENT OF CASH FLOWS
SIX MONTHS ENDED JUNE 30, 2000
PARENT GUARANTOR NON-GUARANTOR
COMPANY SUBSIDIARIES SUBSIDIARIES ELIMINATIONS CONSOLIDATED
-------- ------------ ------------- ------------ ------------
(IN THOUSANDS)
Cash flows from operating
activities:
Net income........................ $64,189 $ 76,309 $ 1,228 $(77,537) $ 64,189
Adjustments to reconcile net
income to net cash provided by
operating activities:
Depreciation and
amortization................ 572 36,925 38 -- 37,535
Equity in net income of
subsidiaries................ (76,301) (1,236) -- 77,537 --
Change in operating assets,
liabilities and other....... 9,693 (11,101) 924 -- (484)
------- --------- ------- -------- ---------
Net cash (used in) provided by
continuing operations........... (1,847) 100,897 2,190 -- 101,240
Net cash used in discontinued
operation....................... -- 443 -- -- 443
------- --------- ------- -------- ---------
Net cash (used in) provided by
operating activities.............. (1,847) 101,340 2,190 -- 101,683
------- --------- ------- -------- ---------
Cash flows from financing
activities:
Long-term debt proceeds........... -- 33,819 -- -- 33,819
Long-term debt payments........... -- (125,675) -- -- (125,675)
Proceeds from issuance of common
stock........................... 1,762 -- -- -- 1,762
Dividends paid.................... (5,017) -- (2,200) 2,200 (5,017)
------- --------- ------- -------- ---------
(3,255) (91,856) (2,200) 2,200 (95,111)
------- --------- ------- -------- ---------
Cash flows from investing
activities:
Capital expenditures.............. (380) (9,578) -- -- (9,958)
Dividends received from
subsidiary...................... 2,200 -- -- (2,200) --
------- --------- ------- -------- ---------
Net cash flow used in investing
activities........................ 1,820 (9,578) -- (2,200) (9,958)
------- --------- ------- -------- ---------
Net change in cash and cash
equivalents....................... (3,282) (94) (10) -- (3,386)
Cash and cash equivalents at
beginning of period............... 4,151 252 21 -- 4,424
------- --------- ------- -------- ---------
Cash and cash equivalents at end of
period............................ $ 869 $ 158 $ 11 $ -- $ 1,038
======= ========= ======= ======== =========
11
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
NOTE 10: SUPPLEMENTAL GUARANTOR INFORMATION (CONTINUED)
GEORGIA GULF CORPORATION AND SUBSIDIARIES
SUPPLEMENTAL CONDENSED CONSOLIDATING STATEMENT OF CASH FLOWS
SIX MONTHS ENDED JUNE 30, 1999
PARENT GUARANTOR NON-GUARANTOR
COMPANY SUBSIDIARIES SUBSIDIARIES ELIMINATIONS CONSOLIDATED
-------- ------------ ------------- ------------ ------------
(IN THOUSANDS)
Cash flows from operating
activities:
Net income....................... $ 6,604 $7,254 $ 74 $(7,328) $ 6,604
Adjustments to reconcile net
income to net cash provided
by operating activities:
Depreciation and
amortization............... 22,212 315 -- -- 22,527
Loss on discontinued
operation, net............. 2,005 -- -- -- 2,005
Equity in net income of
subsidiaries............... (7,328) -- -- 7,328 --
Change in operating assets,
liabilities and other...... (9,799) (6,812) 2,617 -- (13,994)
-------- ------ ------ ------- --------
Net cash (used in) provided by
continuing operations.......... 13,694 757 2,691 -- 17,142
Net cash used in discontinued
operation...................... 3,622 -- -- -- 3,622
-------- ------ ------ ------- --------
Net cash (used in) provided by
operating activities............. 17,316 757 2,691 -- 20,764
-------- ------ ------ ------- --------
Cash flows from financing
activities:
Long-term debt proceeds.......... 115,000 -- -- -- 115,000
Long-term debt payments.......... (124,050) (500) -- -- (124,550)
Proceeds from issuance of common
stock.......................... 359 -- -- -- 359
Dividends paid................... (4,946) -- (2,694) 2,694 (4,946)
-------- ------ ------ ------- --------
(13,637) (500) (2,694) 2,694 (14,137)
-------- ------ ------ ------- --------
Cash flows from investing
activities:
Capital expenditures............. (6,543) (576) -- -- (7,119)
Dividends received from
subsidiary..................... 2,694 -- -- (2,694) --
-------- ------ ------ ------- --------
Net cash flow used in investing
activities....................... (3,849) (576) -- (2,694) (7,119)
-------- ------ ------ ------- --------
Net change in cash and cash
equivalents...................... (170) (319) (3) -- (492)
Cash and cash equivalents at
beginning of period.............. 788 428 28 -- 1,244
-------- ------ ------ ------- --------
Cash and cash equivalents at end of
period........................... $ 618 $ 109 $ 25 $ -- $ 752
======== ====== ====== ======= ========
12
Item 2: Management's Discussion and Analysis of Financial Condition and
Results of Operations.
RESULTS OF OPERATIONS
Georgia Gulf manufactures and markets products through two highly integrated
lines categorized into chlorovinyls and aromatic chemicals. Our chlorovinyl
products include chlorine, caustic soda, sodium chlorate, vinyl chloride monomer
("VCM"), and polyvinyl chloride ("PVC") resins and compounds; our primary
aromatic chemical products include cumene, phenol and acetone. During 1999, we
announced our decision to exit the methanol business and had ceased operations
at the end of the year. Additionally, on November 12, 1999, we completed the
purchase of all the assets of the vinyls business of CONDEA Vista Company. The
vinyls business is an integrated producer of VCM, PVC resins and PVC compounds.
We have included the results of operations for the vinyls business in our
consolidated financial statements since the date of acquisition.
THREE MONTHS ENDED JUNE 30, 2000 COMPARED WITH THREE MONTHS ENDED JUNE 30, 1999
NET SALES. Net sales for the quarter ended June 30, 2000 were
$413.4 million, an increase of 129 percent compared to $180.7 million for the
same period in 1999. This increase was due to 49 percent higher sales volumes,
largely attributable to the acquisition of the vinyls business, and an increase
in the overall average selling price of 54 percent.
Net sales of chlorovinyls for the second quarter of 2000 were
$334.2 million, 152 percent higher than net sales for second quarter of 1999 of
$132.5 million. This increase was the result of a 68 percent increase in sales
volume and a 50 percent increase in sales prices. Sales volume increases were
primarily attributable to the vinyls business acquired during the fourth quarter
of 1999 which more than doubled our sales of vinyl resins. The higher sales
prices resulted from continuing strong demand for vinyl products, particularly
VCM and vinyl resins.
Net sales of aromatics for the second quarter of 2000 were $79.2 million, an
increase of 64 percent compared to $48.3 million for the same period in 1999.
This increase was the result of a 47 percent improvement in sales prices and
12 percent higher sales volumes. Sales prices for cumene, phenol and acetone all
increased primarily as a result of significantly higher raw material costs.
COST OF SALES. Cost of sales for the second quarter of 2000 was
$332.9 million, an increase of 113 percent compared to $156.1 million for the
second quarter of 1999. The primary factor for this increase was the additional
sales volumes from the acquired vinyls business. Also contributing to the
increase were higher prices for all purchased major raw materials. As a
percentage of sales, cost of sales decreased to 81 percent in the second quarter
of 2000 compared to 86 percent in the second quarter of 1999. This decrease was
caused by overall sales price increases outpacing higher raw material cost and
also an increase in capacity utilization rates.
SELLING AND ADMINISTRATIVE EXPENSES. Selling and administrative expenses
were $11.4 million for the three months ended June 30, 2000, an increase of
18 percent from the same period in 1999. This increase is primarily attributable
to the effects of the acquired vinyls business and higher profit sharing
expense. Additionally, the ongoing costs of a revolving trade receivables sales
program increased after we sold an additional $25.0 million of trade receivables
during the second quarter of 2000.
OPERATING INCOME. Operating income in the second quarter of 2000 was
$69.1 million, an increase of 362 percent compared to $15.0 million in the
second quarter of 1999. This increase was the result of higher operating income
in chlorovinyls offset in part by decreased operating profit in aromatics. As a
percentage of net sales, operating profit increased to 17 percent of net sales
in the second quarter of 2000 compared to 8 percent for the same period in 1999.
This increase in operating profit as a percentage of net sales was the result of
overall sales price increases outpacing increases in raw material costs.
13
Our chlorovinyls operating profit for the second quarter of 2000 was
$75.2 million, an increase of 436 percent compared to $14.0 million for the same
period in 1999. The most significant factors in this increase are the
improvements in VCM and vinyl resin profit margins coupled with operating income
from the acquired vinyls business.
Our aromatics operating loss for the second quarter of 2000 was
$2.9 million, a decrease of 194 percent compared to operating profit of
$3.1 million in the second quarter 1999. Aromatic sales price increases were
unable to compensate for the significantly higher raw material costs of benzene
and propylene.
NET INTEREST EXPENSE. Interest expense increased to $18.0 million for the
quarter ended June 30, 2000 compared with $7.4 million for the same period in
1999. This increase was primarily attributable to higher debt balances related
to both the acquisition of the vinyls business and the purchase of the
previously leased cogeneration facility during the fourth quarter of 1999.
PROVISION FOR INCOME TAXES. Provision for income taxes was $18.4 million
for the second quarter of 2000 compared to $2.8 million for the second quarter
of 1999. Our effective tax rate in the second quarter of 2000 was 36.0 percent
compared to 36.5 percent for the same period in 1999.
INCOME FROM CONTINUING OPERATIONS. Income from continuing operations for
the three months ended June 30, 2000 was $32.8 million, an increase of
578 percent compared to $4.8 million for the three months ended June 30, 1999.
Income from continuing operations increased significantly as a result of both
overall sales volume and price increases that more than offset higher raw
material costs and additional interest expense.
LOSS FROM DISCONTINUED OPERATION. The discontinued methanol operation
incurred a net loss of $0.8 million in the second quarter of 1999. The methanol
operation was discontinued in the third quarter of 1999.
NET INCOME. Net income for the second quarter of 2000 was $32.8 million, a
705 percent increase from $4.1 million in the second quarter of 1999. This
increase was due to the factors discussed above.
SIX MONTHS ENDED JUNE 30, 2000 COMPARED WITH SIX MONTHS ENDED JUNE 30, 1999
NET SALES. For the six months ended June 30, 2000, net sales were
$817.1 million, an increase of 127 percent compared to $360.0 million for the
same period in 1999. This increase was due to a 50 percent increase in sales
volumes, largely attributable to the acquisition of the vinyls business, and
also a 52 percent higher overall average selling price.
Net sales of chlorovinyls for the first half of 2000 were $667.9 million,
164 percent higher than net sales for first half of 1999 of $253.3 million.
Sales volume increased by 78 percent primarily as a result of the vinyls
business acquired during the fourth quarter of 1999, which more than doubled our
sales of vinyl resins. Higher average sales prices of 48 percent resulted from
continuing strong demand for vinyl products, particularly VCM and vinyl resins.
Net sales of aromatics for the first half of 2000 were $149.1 million, an
increase of 40 percent compared to $106.7 million for the same period in 1999.
This increase was primarily the result of a 38 percent improvement in sales
prices as sales volumes remained basically the same. Cumene and acetone prices
increased primarily as a result of continued strong demand and tighter supply.
COST OF SALES. Cost of sales for the first half of 2000 was
$654.8 million, an increase of 110 percent compared to $311.8 million for the
first half of 1999. Increased sales volumes from the acquired vinyls business
were the primary cause of this increase. Also contributing to the increase were
higher prices for all purchased major raw materials. As a percentage of sales,
cost of sales decreased to 80 percent in the first half of 2000 compared to
87 percent in the first half of 1999. Overall sales price
14
increases outpaced higher raw material costs and our plants operated at higher
capacity utilization rates.
SELLING AND ADMINISTRATIVE EXPENSES. Selling and administrative expenses
were $25.0 million for the six months ended June 30, 2000, an increase of
26 percent from the same period in 1999. This increase is primarily attributable
to the effects of the acquired vinyls business and higher profit sharing
expense. During the first quarter of 2000, we incurred transition charges
associated with the acquisition of approximately $0.8 million.
OPERATING INCOME. Operating income in the first six months of 2000 was
$137.3 million, an increase of 386 percent compared to $28.2 million in the
first six months of 1999. Higher operating income in chlorovinyls was offset in
part by decreased operating profit in aromatics. As a percentage of net sales,
operating profit increased to 17 percent of net sales in the first six months of
2000 compared to 8 percent for the same period in 1999. Overall sales price
increases outpaced increases in raw material costs which caused the increase in
operating profit as a percentage of net sales.
Our chlorovinyls operating profit for the first six months of 2000 was
$154.7 million, an increase of 535 percent compared to $24.4 million for the
same period in 1999. The most significant factors in this increase are operating
income from the acquired vinyls business and the improvements in VCM and vinyl
resin profit margins.
Our aromatics operating loss for the first six months of 2000 was
$9.4 million, a decrease of 202 percent compared to operating profit of
$9.2 million in the first six months 1999. This decrease was a result of
significant increases in the cost of benzene and propylene that outpaced selling
price increases for aromatic products.
NET INTEREST EXPENSE. Interest expense for the first half of 2000 was
$37.0 million compared with $14.7 million for the same period in 1999. This
increase was primarily attributable to higher debt balances related to both the
acquisition of the vinyls business and the purchase of the previously leased
cogeneration facility during the fourth quarter of 1999.
PROVISION FOR INCOME TAXES. Provision for income taxes was $36.1 million
for the first six months of 2000 compared to $4.9 million for the same period of
1999. Our effective tax rate for the six months ended June 30, 2000 was
36.0 percent compared to 36.5 percent for the same period in 1999.
INCOME FROM CONTINUING OPERATIONS. Income from continuing operations for
the six months ended June 30, 2000 was $64.2 million, an increase of
646 percent compared to $8.6 million for the six months ended June 30, 1999.
Income from continuing operations increased significantly as a result of both
overall sales volume and price increases that more than offset higher raw
material costs and additional interest expense.
LOSS FROM DISCONTINUED OPERATION. The discontinued methanol operation
incurred a net loss of $2.0 million in the first half of 1999. The methanol
operation was discontinued in the third quarter of 1999.
NET INCOME. Net income for the first half of 2000 was $64.2 million, an
increase of 872 percent from $6.6 million in the first half of 1999. This
increase was due to the factors discussed above.
15
LIQUIDITY AND CAPITAL RESOURCES
For the six months ended June 30, 2000, we generated $101.7 million in cash
flow from operating activities as compared to $20.8 million generated during the
same 1999 period. Major sources of cash flow for the first half of 2000 were net
income of $64.2 million and non-cash provisions of $37.5 for depreciation and
amortization. Total working capital at June 30, 2000 was $105.8 million versus
$95.6 million at December 31, 1999. Significant changes in working capital for
the first half of 2000 included a decrease in accounts receivable, higher
inventories, a lower current portion of long-term debt, an increase in accounts
payable and a decrease in other accrued liabilities. The decrease in accounts
receivable was primarily attributable to the sale of $25.0 million of trade
receivables under a revolving trade receivables sales program. Inventories
increased as a result of higher raw material costs and quantities. Increases in
accounts payable were attributable to the timing of certain payments and higher
trade payable balances related to increased raw material prices. Accounts
payable increases were partially offset by the payment of $16.3 million to
CONDEA Vista Company representing a working capital adjustment related to our
acquisition in November 1999. Decreases in other accrued liabilities were
attributable to the timing of certain payments. Significant working capital
changes for the first half of 1999 included the payment of certain litigation
expenses reimbursed by our insurance carriers later in 1999 and an increase in
accounts payable and accrued liabilities due to the timing of payments.
Debt decreased by $91.9 million during the six months ended June 30, 2000 to
$679.3 million. As of June 30, 2000, we had availability to borrow an additional
$80.2 million under the revolving credit facility. Capital expenditures for the
six months ended June 30, 2000 were $10.0 million as compared to $7.1 million
for the same 1999 period. Capital expenditures for 2000 will be directed toward
certain environmental projects and increased efficiency of existing operations.
We estimate total capital expenditures for 2000 will approximate $30.0 million.
We declared dividends of $0.16 per share or $5.0 million during the first
six months of 2000. As of June 30, 2000, we had authorization to repurchase up
to 5.2 million shares under a common stock repurchase program; however, we have
suspended the stock repurchase program and we did not repurchase any shares
during the first half of 2000.
Our ability to satisfy our debt obligations and to pay principal and
interest on our debt, fund working capital, and make anticipated capital
expenditures will depend on our future performance, which is subject to general
economic conditions and other factors, some of which are beyond our control. We
believe that based on current and anticipated levels of operations and
conditions in our markets, cash flow from operations will be adequate for the
foreseeable future to make required payments of principal and interest on our
debt and fund our working capital and capital expenditure requirements.
We are essentially a holding company and, accordingly, must rely on
distributions, loans and other intercompany cash flows from our wholly owned
subsidiaries to generate the funds necessary to satisfy the repayment of our
existing debt. Provisions in our senior credit facility limit payments of
dividends, distributions, loans or advances to us by our subsidiaries.
OUTLOOK
For the third quarter, we have begun to see signs of an economic slowdown,
especially in the vinyl pipe and siding area, which impacts our chlorovinyl
segment. This has negatively affected July resin shipments. We do not expect
much improvement in the aromatics chain as the costs of raw materials continue
to rise and we had a major phenol plant turnaround in July. Overall, we expect
that our third quarter earnings will be negatively impacted when compared to the
second quarter.
16
YEAR 2000 ISSUE UPDATE
We did not experience any significant malfunctions or errors in our
operating or business systems when the date changed from 1999 to 2000. Based on
operations since January 1, 2000, we do not expect any significant impact to our
ongoing business as a result of the year 2000 issue. However, it is possible
that the full impact of the date change has not been fully recognized. We
believe that any such problems are likely to be minor and correctable. In
addition, we could still be negatively affected if year 2000 or similar issues
adversely affect our customers or suppliers. Currently we are not aware of any
significant year 2000 or similar problems that have arisen for our customers and
suppliers. Expenditures related to year 2000 compliance efforts were not
material.
FORWARD-LOOKING STATEMENTS
This Form 10-Q and other communications to stockholders may contain
"forward-looking statements" within the meaning of the Private Securities
Litigation Reform Act of 1995. These statements relate to, among other things,
our outlook for future periods, supply and demand, pricing trends and market
forces within the chemical industry, cost reduction strategies and their
results, planned capital expenditures, long-term objectives of management and
other statements of expectations concerning matters that are not historical
facts. Predictions of future results contain a measure of uncertainty and,
accordingly, actual results could differ materially due to various factors.
Factors that could change forward-looking statements are, among others:
- changes in the general economy;
- changes in demand for our products or increases in overall industry
capacity that could affect production volumes and/or pricing;
- changes and/or cyclicality in the industries to which our products are
sold;
- availability and pricing of raw materials;
- technological changes affecting production;
- difficulty in plant operations and product transportation;
- governmental and environmental regulations; and
- other unforeseen circumstances.
A number of these factors are discussed in this Form 10-Q and in our other
periodic filings with the Securities and Exchange Commission, including our
Annual Report on Form 10-K for the year ended December 31, 1999.
Item 3. Quantitative and Qualitative Disclosures About Market Risk.
For a discussion of certain market risks related to Georgia Gulf, see
Part I, Item 7A, "Quantitative and Qualitative Disclosures About Market Risk",
in our Annual Report on Form 10-K for the year ended December 31, 1999. There
have been no significant developments with respect to our exposure to market
risk except for the change in the fair value of interest rate swaps disclosed in
Note 6 to the financial statements included herein.
17
PART II. OTHER INFORMATION.
Item 1. Legal Proceedings.
We are involved in certain legal proceedings that are described in our 1999
Annual Report on Form 10-K and our quarterly report on Form 10-Q for the period
ending March 31, 2000. During the three months ended June 30, 2000, there were
no material developments in the status of those legal proceedings that have not
been previously disclosed in our 1999 Annual Report on Form 10-K or in our
quarterly report on Form 10-Q for the period ending March 31, 2000.
Item 4. Submission of Matters to a Vote of Security Holders
The Company's annual meeting of stockholders was held May 16, 2000 in
Atlanta, Georgia for the following purposes: (i) to elect three directors to
serve for a term of three years; (ii) to consider and take action upon the
approval and adoption of the First Amendment to the Employee Stock Purchase
Plan, which increases the number of shares issuable under that plan by 200,000
shares; and (iii) to consider and take action upon the ratification of the
selection of Arthur Andersen LLP to serve as independent public accountants for
the year ending December 31, 2000.
The results of the voting by stockholders at the annual meeting were as
follows:
BROKER NON-VOTES
DIRECTORS FOR WITHHELD OR ABSTENTIONS
--------- ---------- -------- ----------------
John D. Bryan............................ 22,725,693 433,572 0
Dennis M. Chorba......................... 22,386,968 772,297 0
Patrick J. Fleming....................... 22,736,537 422,728 0
In addition, the terms of the following directors continued after the
meeting:
John E. Akitt
James R. Kuse
Charles T. Harris III
Jerry R. Satrum
Edward A. Schmitt
The approval and adoption of the First Amendment to the Employee Stock
Purchase Plan, which increases the number of shares issuable under that plan by
200,000 shares was ratified by the following votes:
FOR AGAINST ABSTAIN BROKER NON-VOTES
- --------------------- -------- -------- ----------------
23,073,612..... 59,013 25,639 1,001
The selection of Arthur Andersen LLP to serve as independent public
accountants for the Company for the year ending December 31, 2000, was ratified
by the following votes:
FOR AGAINST ABSTAIN BROKER NON-VOTES
- --------------------- -------- -------- ----------------
23,653,410..... 14,161 13,748 1,001
Item 6. Exhibits and Reports on Form 8-K.
a) Exhibit
10 Amended and Restated Receivables Transfer Agreement dated as of
May 24, 2000 Among GGRC Corp., as Seller, and Georgia Gulf
Corporation and Georgia Gulf Chemicals and Vinyls, LLC, as Initial
Servicers, and Blue Ridge Asset Funding Corporation, as Purchaser,
and Wachovia Bank, N.A., as Administrative Agent.
b) No reports on Form 8-K were filed with Securities and Exchange
Commission during the second quarter of 2000.
18
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf by the
undersigned, thereunto duly authorized.
GEORGIA GULF CORPORATION
(Registrant)
Date August 11, 2000 /s/ EDWARD A. SCHMITT
------------------------ -------------------------------------------
Edward A. Schmitt
President and Chief Executive Officer
(Principal Executive Officer)
Date August 11, 2000 /s/ RICHARD B. MARCHESE
------------------------ -------------------------------------------
Richard B. Marchese
Vice President Finance, Chief Financial
Officer and Treasurer
(Principal Financial Officer)
19