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UNITED STATES SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
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FORM 10-K/A
(Amendment No. 2)
(Mark one)
[X] ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934
FOR THE FISCAL YEAR ENDED DECEMBER 31, 2004
[ ] 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: 0-15661
AMCOL INTERNATIONAL CORPORATION
(Exact Name of Registrant as Specified in its Charter)
DELAWARE 36-0724340
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) 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 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 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. [ ]
Indicate by check mark whether the registrant is an accelerated filer
(as defined in Exchange Act Rule 12b-2).
Yes [X] No [ ]
The aggregate market value of the registrant's $.01 par value Common
Stock held by non-affiliates of the registrant (based upon the per share closing
price of $18.69 per share on June 30, 2004, and, for the purpose of this
calculation only, the assumption that all of the registrant's directors and
executive officers are affiliates) was approximately $413.0 million.
Registrant had 29,524,128 shares of $.01 par value Common Stock
outstanding as of February 28, 2005.
DOCUMENTS INCORPORATED BY REFERENCE
None.
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EXPLANATORY NOTE
AMCOL International Corporation (the "Company") originally filed its
annual report on Form 10-K for the year ended December 31, 2004 with the
Securities and Exchange Commission (the "SEC") on March 31, 2005 (the "Original
Filing"). As permitted by an exemptive order issued by the SEC on November 30,
2004 (SEC Release No. 34-50754) (the "Exemptive Order"), the Company did not
include management's report on internal control over financial reporting,
required by Item 308(a) of Regulation S-K, and the related attestation report of
its independent registered public accounting firm, required by Item 308(b) of
Regulation S-K, in the Original Filing. The Exemptive Order permitted the
Company to file the foregoing by amendment to the Original Filing within forty
five days after the original filing period for such Original Filing.
This Amendment No. 2 on Form 10-K/A (this "Form 10-K/A") to the Original
Filing is being filed solely to (i) replace Item 9A, which now includes
management's report on internal control over financial reporting and the related
attestation report of the Company's independent registered public accounting
firm, (ii) include a consent of the Company's independent registered public
accounting firm with respect to its attestation report, and (iii) replace the
certifications pursuant to Section 302 of the Sarbanes-Oxley Act of 2002
attached to the Original Filing as Exhibits 31.1 and 31.2.
Except for the foregoing, this Form 10-K/A does not modify or update in
any way the Original Filing, which continues to speak as of the date thereof.
An Amendment No.1 was previously filed with respect to the Original
Filing. This Form 10-K/A corrects errors made with respect to the dates
identified for various signatures in such filing and exhibits thereto. This Form
10-K/A is otherwise identical to the Amendment No. 1 previously filed with
respect to the Original Filing.
ITEM 9A. CONTROLS AND PROCEDURES
(a) EVALUATION OF DISCLOSURE CONTROLS AND PROCEDURES
An evaluation was performed under the supervision and with the
participation of our management, including the Chief Executive Officer and Chief
Financial Officer, of the effectiveness of the design and operation of our
disclosure controls and procedures (as defined in Rules 13a-15(e) and 15d-15(e)
promulgated under the Securities Exchange Act of 1934) as of December 31, 2004.
Based upon that evaluation, the Chief Executive Officer and Chief Financial
Officer concluded that, as a result of the material weakness in our internal
control over financial reporting discussed below in "Management's Report on
Internal Control Over Financial Reporting," the Company's disclosure controls
and procedures were not effective as of December 31, 2004 to ensure that
information required to be disclosed in the reports we file or submit under the
Exchange Act is recorded, processed, summarized and reported as and when
required. Notwithstanding the foregoing, management believes that the financial
statements included within the Company's annual report on Form 10-K for the year
ended December 31, 2004 fairly present, in all material respects, the financial
position and results of operations of the Company, in conformity with U.S.
generally accepted accounting principles, for the periods presented.
(b) MANAGEMENT'S REPORT ON INTERNAL CONTROL OVER FINANCIAL REPORTING
Management is responsible for establishing and maintaining adequate
internal control over financial reporting as such term is defined in Rule
13a-15(f) of the Exchange Act. That rule defines internal control over financial
reporting as a process designed to provide reasonable assurance regarding the
reliability of financial reporting and the preparation of our consolidated
financial statements for external purposes in accordance with accounting
principles generally accepted in the United States of America. Because of its
inherent limitations, a system of internal control over financial reporting can
provide only reasonable assurance and may not prevent or detect misstatements.
Further, because of changing conditions, effectiveness of internal control over
financial reporting may vary over time.
1
Management has assessed the Company's internal control over financial
reporting as of December 31, 2004. In making this assessment, management used
the criteria established in Internal Control-Integrated Framework issued by the
Committee of Sponsoring Organizations of the Treadway Commission (COSO).
In conducting the aforementioned evaluation and assessment, management
identified a material weakness in internal control over financial reporting
relative to our accounting for income taxes. In particular, our design of
internal controls did not address the financial statement accounting
considerations arising from income tax matters or the timing of recording of
changes in accounting estimates relating to income taxes of foreign
subsidiaries. This control weakness resulted in material errors in our
accounting for income taxes, which were identified during the course of our 2004
audit. The material errors led to (i) a restatement of our financial results for
the interim periods ended September 30, 2004 in order to both recognize the
expected federal income tax refunds relating to certain deductions and credits
claimed in amended tax returns filed in September 2004 as well as correct the
deferred income tax assets and income taxes payable recorded by a wholly-owned
Company subsidiary in the United Kingdom and (ii) a restatement of beginning
retained earnings for the year ended December 31, 2001 to reflect our estimate
of the refund resulting from certain state tax deductions claimed in amended tax
returns filed in September 2004. As a result of the foregoing material weakness,
management concluded that the Company's internal control over financial
reporting was not effective as of December 31, 2004.
KPMG LLP, the Company's independent registered public accounting firm,
has issued an audit report on management's assessment of the effectiveness of
the Company's internal control over financial reporting, which audit report is
included below.
(c) CHANGES IN INTERNAL CONTROL OVER FINANCIAL REPORTING
There were no changes in our internal control over financial reporting
(as such term is defined in Rules 13a-15(f) and 15d-15(f) promulgated under the
Securities Exchange Act of 1934) during the fourth quarter of 2004 that
materially affected, or are reasonably likely to materially affect, our internal
controls over financial reporting.
We are working to design and implement appropriate procedures in order
to remediate the deficiencies in our internal control over financial reporting
concerning accounting for income taxes. After the discovery of the
aforementioned material weakness in our internal control over financial
reporting, we began implementing changes to our design of internal control with
respect to accounting for income taxes. Specifically, we restructured the
responsibility for accounting for income taxes, formalized management's
oversight relating to accounting for income taxes by developing procedures to
monitor significant income tax events and the determination of appropriate
accounting treatment for certain deduction and credit positions taken in filing
income tax returns, both amended and original, and developed a program to
provide increased training to improve our accounting for income taxes. Our Tax
Manager is now fully responsible for the financial accounting for income taxes.
In addition, the Controller and Chief Financial Officer will receive quarterly
updates on tax matters, including changes in tax positions that may have a
material effect on the financial statements and matters affecting income tax
returns. The Controller and Chief Financial Officer will review these matters
and document conclusions as to the accounting treatment. Additionally, we will
enhance controls over financial reporting of our foreign subsidiaries to assure
the consolidated financial statements are presented in accordance with U.S.
generally accepted accounting principles and changes in accounting estimates are
recorded in the appropriate reporting period. Last, the Chief Financial Officer
will conduct an annual assessment of the accounting staff's knowledge of U.S.
generally accepted accounting principles and provide additional training where
necessary.
2
REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
The Board of Directors and Stockholders
AMCOL International Corporation:
We have audited management's assessment, included in the accompanying
Management's Report on Internal Control Over Financial Reporting (Item 9A(b)),
that AMCOL International Corporation and subsidiaries (the Company) did not
maintain effective internal control over financial reporting as of December 31,
2004, because of the effect of a material weakness identified in management's
assessment, based on the criteria established in Internal Control--Integrated
Framework issued by the Committee of Sponsoring Organizations of the Treadway
Commission (COSO). The Company's management is responsible for maintaining
effective internal control over financial reporting and for its assessment of
the effectiveness of internal control over financial reporting. Our
responsibility is to express an opinion on management's assessment and an
opinion on the effectiveness of the Company's internal control over financial
reporting based on our audit.
We conducted our audit in accordance with the standards of the Public
Company Accounting Oversight Board (United States). Those standards require that
we plan and perform the audit to obtain reasonable assurance about whether
effective internal control over financial reporting was maintained in all
material respects. Our audit included obtaining an understanding of internal
control over financial reporting, evaluating management's assessment, testing
and evaluating the design and operating effectiveness of internal control, and
performing such other procedures as we considered necessary in the
circumstances. We believe that our audit provides a reasonable basis for our
opinion.
A company's internal control over financial reporting is a process
designed to provide reasonable assurance regarding the reliability of financial
reporting and the preparation of financial statements for external purposes in
accordance with generally accepted accounting principles. A company's internal
control over financial reporting includes those policies and procedures that (1)
pertain to the maintenance of records that, in reasonable detail, accurately and
fairly reflect the transactions and dispositions of the assets of the company;
(2) provide reasonable assurance that transactions are recorded as necessary to
permit preparation of financial statements in accordance with generally accepted
accounting principles, and that receipts and expenditures of the company are
being made only in accordance with authorizations of management and directors of
the company; and (3) provide reasonable assurance regarding prevention or timely
detection of unauthorized acquisition, use, or disposition of the company's
assets that could have a material effect on the financial statements.
Because of its inherent limitations, internal control over financial
reporting may not prevent or detect misstatements. Also, projections of any
evaluation of effectiveness to future periods are subject to the risk that
controls may become inadequate because of changes in conditions, or that the
degree of compliance with the policies or procedures may deteriorate.
A material weakness is a control deficiency, or combination of control
deficiencies, that results in more than a remote likelihood that a material
misstatement of the annual or interim financial statements will not be prevented
or detected. The following material weakness has been identified and included in
management's assessment as of December 31, 2004: management identified that the
Company had a material weakness in its internal control over financial reporting
because the design of internal controls did not address the financial statement
accounting considerations arising from income tax matters or the timing of
recording of changes in accounting estimates relating to income taxes of foreign
subsidiaries. This control weakness resulted in material errors in the
accounting for income taxes, which were identified during the course of the 2004
audit. The material errors led to (i) a restatement of the financial results for
the interim periods ended September 30, 2004 in order to both recognize the
expected federal income tax refunds relating to certain deductions and credits
claimed in amended tax returns filed in September 2004 as well as correct the
deferred income tax assets and income taxes payable recorded by a wholly-owned
Company subsidiary in the United Kingdom and (ii) a restatement of beginning
retained earnings for the year ended December 31, 2001 to reflect the estimate
of the refund resulting from certain state tax deductions claimed in amended tax
returns filed in September 2004.
3
We also have audited, in accordance with the standards of the Public
Company Accounting Oversight Board (United States), the consolidated balance
sheets, and statements of operations, comprehensive income, stockholders' equity
and cash flows of AMCOL International Corporation and subsidiaries. We have also
audited the financial statement schedule. This material weakness was considered
in determining the nature, timing, and extent of audit tests applied in our
audit of the 2004 consolidated financial statements and the related financial
statement schedule, and this report does not affect our report dated March 30,
2005, which expressed an unqualified opinion on those consolidated financial
statements and the related financial statement schedule.
In our opinion, management's assessment that AMCOL International
Corporation and subsidiaries did not maintain effective internal control over
financial reporting as of December 31, 2004, is fairly stated, in all material
respects, based on criteria established in Internal Control--Integrated
Framework issued by the COSO. Also, in our opinion, because of the effect of the
material weakness described above on the achievement of the objectives of the
control criteria, AMCOL International Corporation and subsidiaries has not
maintained effective internal control over financial reporting as of December
31, 2004, based on COSO.
KPMG LLP
Chicago, Illinois
April 27, 2005
4
PART IV
ITEM 15. EXHIBITS AND FINANCIAL STATEMENT SCHEDULE
(a)(3) See Index to Exhibits immediately following the signature
page.
5
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: April 28, 2005
AMCOL INTERNATIONAL CORPORATION
By: /s/ Lawrence E. Washow
------------------------------------
Lawrence E. Washow
President and 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 April 28, 2005
- ---------------------------------------
John Hughes
Chairman of the Board and Director
/s/ Lawrence E. Washow April 28, 2005
- ---------------------------------------
Lawrence E. Washow
President and Chief Executive Officer
and Director
/s/ Gary L. Castagna April 28, 2005
- ---------------------------------------
Gary L. Castagna
Senior Vice President and
Chief Financial Officer;
Treasurer and Chief Accounting Officer
/s/ Arthur Brown April 28, 2005
- ---------------------------------------
Arthur Brown
Director
/s/ Daniel P. Casey April 28, 2005
- ---------------------------------------
Daniel P. Casey
Director
/s/ Robert E. Driscoll, III April 28, 2005
- ---------------------------------------
Robert E. Driscoll, III
Director
/s/ Jay D. Proops April 28, 2005
- ---------------------------------------
Jay D. Proops
Director
/s/ Clarence O. Redman April 28, 2005
- ---------------------------------------
Clarence O. Redman
Director
/s/ Dale E. Stahl April 28, 2005
- ---------------------------------------
Dale E. Stahl
Director
/s/ Audrey L. Weaver April 28, 2005
- ---------------------------------------
Audrey L. Weaver
Director
/s/ Paul C. Weaver April 28, 2005
- ---------------------------------------
Paul C. Weaver
Director
6
INDEX TO EXHIBITS
EXHIBIT
NUMBER DESCRIPTION
- -------- --------------------------------------------------------------------
3.1 Restated Certificate of Incorporation of the Company (5), as amended
(10), as amended (16)
3.2 Bylaws of the Company (10)
4 Article Four of the Company's Restated Certificate of Incorporation
(5), as amended (16)
10.3 Lease Agreement for office space dated September 29, 1986, between
the Company and American National Bank and Trust Company of Chicago;
(1) First Amendment dated June 2, 1994 (8); Second Amendment dated
June 2, 1997 (13)
10.4 AMCOL International Corporation 1987 Non-Qualified Stock Option Plan
(2); as amended (6) 10.9 AMCOL International Corporation Dividend
Reinvestment and Stock Purchase Plan (4); as amended (6)
10.10 AMCOL International Corporation 1993 Stock Plan, as amended and
restated (10)
10.15 AMCOL International Corporation 1998 Long-Term Incentive Plan (15),
as amended (21)
10.26 Employment Agreement dated March 15, 2002 by and between Registrant
and Gary D. Morrison (22)*
10.27 Employment Agreement dated March 15, 2002 by and between Registrant
and Peter M. Maul (22)*
10.28 Employment Agreement dated March 15, 2002 by and between Registrant
and Gary Castagna (22)*
10.29 Employment Agreement dated March 15, 2002 by and between Registrant
and Ryan F. McKendrick (22)*
10.30 Employment Agreement dated March 15, 2002 by and between Registrant
and Lawrence E. Washow (22)*
10.31 Credit Agreement by and among AMCOL International Corporation and
Harris Trust and Savings Bank, individually and as agent, Wells
Fargo Bank, N.A., Bank of America N.A. and the Northern Trust
Company dated October 31, 2003 (23)
10.32 A written description of compensation for the Board of Directors of
the Company is set forth under the caption "Director Compensation"
in the definitive Proxy Statement to be filed with the Securities
and Exchange Commission and delivered to the Company's shareholders
in connection with the Annual Meeting of Shareholders to be held on
May 12, 2005, and is hereby incorporated by reference.*
21 AMCOL International Corporation Subsidiary Listing **
23 Consent of Independent Registered Public Accounting Firm **
23.1 Consent of Independent Registered Public Accounting Firm ***
31.1 Certification of Chief Executive Officer Pursuant to Section 302 of
the Sarbanes-Oxley Act of 2002 ***
31.2 Certification of Chief Financial Officer Pursuant to Section 302 of
the Sarbanes-Oxley Act of 2002 ***
32 Certification of Periodic Financial Report Pursuant to 18 U.S.C.
Section 1350 **
- ----------
(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.
(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.
(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.
(10) 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, 1995.
(13) Exhibit is incorporated by reference to the Registrant's Form 10-Q
filed with the Securities and Exchange Commission for the quarter
ended June 30, 1997.
(15) Exhibit is incorporated by reference to the Registrant's Form S-8
(File 333-56017) filed with the Securities and Exchange Commission on
June 4, 1998.
(16) Exhibit is incorporated by reference to the Registrant's Form 10-Q
filed with the Securities and Exchange Commission for the quarter
ended June 30, 1998.
7
(21) Exhibit is incorporated by reference to the Registrant's Form S-8
(File 333-68664) filed with the Securities and Exchange Commission on
August 30, 2001.
(22) Exhibit is incorporated by reference to the Registrant's Form 10-Q
filed with the Securities and Exchange Commission for the quarter
ended March 31, 2002.
(23) 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, 2003.
* Management compensatory plan or arrangement
** Previously filed as an exhibit to the Company's annual report on
Form 10-K for the year ended December 31, 2004
*** Filed herewith.
8