UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 12b-25
NOTIFICATION OF LATE FILING
SEC FILE NUMBER: 001-12870
CUSIP NUMBER: 192861 10 2
(CHECK ONE) [ ] Form 10-K [ ] Form 20-F [ ] Form 11-K
[ X ] Form 10-Q [ ] Form N-SAR
For Period Ended: September 30, 2002
NOTHING IN THIS FORM SHALL BE CONSTRUED TO IMPLY THAT THE COMMISSION
HAS VERIFIED ANY INFORMATION CONTAINED HEREIN.
PART I - REGISTRANT INFORMATION
Cold Metal Products, Inc.
2300 Georgetown Drive
Suite 301
Sewickley, Pennsylvania 15143
PART II - RULES 12B-25(b) AND (c)
If the subject report could not be filed without reasonable effort or
expense and the registrant seeks relief pursuant to Rule 12b-25(b), the
following should be completed. Check box if appropriate) |X|
(a) The reasons described in reasonable detail in Part III of this
form could not be eliminated without reasonable effort or
expense;
(b) The subject annual report, semi-annual report, transition
report on Form 10-K, Form 20-F, 11-K or Form N-SAR, or portion
thereof, will be filed on or before the fifteenth calendar day
following the prescribed due date; or the subject quarterly
report of transition report on Form 10-Q, or portion thereof
will be filed on or before the fifth calendar day following
the prescribed due date.
PART III - NARRATIVE
On August 16, 2002, Cold Metal Products, Inc. and its wholly owned subsidiary,
Alkar Steel Corporation, each filed a voluntary petition for Chapter relief
under Chapter 11 of Title 11,
United States Code ("Bankruptcy Code") with the United States Bankruptcy Court
for the Northern District of Ohio, Eastern Division, as Cases Number 02-43619
and 02-43620, respectively. Pursuant to Sections 1107 and 1108 of the Bankruptcy
Code, each company remains in possession of its assets and continues to operate
as a debtor in possession. The filings cover domestic assets only and do not
affect facilities in Hamilton, Ontario, Canada and Montreal, Quebec, Canada.
Unprofitable facilities, burdensome legacy costs, pricing pressures and leverage
were cited as the primary reasons for the filings. On August 15, 2002, the
registrant's facilities in Youngstown, Ohio and Indianapolis, Indiana were
closed.
As Registrant has previously reported, preparation and filing by Registrant of
Annual and Periodic Reports pursuant to Sections 13 or 15(d) of the Securities
Exchange Act of 1934, has been delayed in part by uncertainties regarding
discussions among registrant and its creditors and in part by commencement by
Registrant of proceedings under Chapter 11 of the U.S. Bankruptcy Code.
Registrant has now filed its Annual Report on Form 10-K for the fiscal year
ended March 31, 2002. However, the Chapter 11 process has not yet permitted
Registrant to retain the services of its auditors to review its quarterly
reports on Form 10-Q. As soon as the required reviews have been complete,
registrant will file the Report in definitive form and confirm that such reviews
have been completed.
PART IV - OTHER INFORMATION
(1) Name and telephone number of person to contact in regard to
this notification
Joseph C. Horvath
Vice President and Chief Financial Officer
(Name)
(724) 933-1441
(Area Code) (Telephone Number)
(2) Have all other periodic reports required under Section 13 or
15(d) of the Securities Exchange Act of 1934 or Section 30 of
the Investment Company Act of 1940 during the preceding 12
months or for such shorter period that the registrant was
required to file such report(s) been filed? If answer if no,
identify report(s). [] Yes [x] No
Form 10-Q, quarterly report for the quarter ended
June 30, 2002
(3) It is anticipated that any significant change in results of
operations from the corresponding period for the last fiscal year will be
reflected by the earnings statements to be included in the subject report or
portion thereof? [x] Yes [ ] No
Set forth below are Condensed Consolidated Statements of Operations, together
with a narrative explanation of the changes in the results of operations, for
the quarter and six month periods ended September 30, 2002 and 2001,
respectively, which are unaudited and have not been reviewed by Registrant's
Audit Committee or auditors.
As a result of the Chapter 11 filings, Events of Default, as defined in the
related debt agreements, have occurred subsequent to March 31, 2002. On August
16, 2002, the Company entered into a Debtor-in-Possession Revolving Credit and
Term Loan Agreement (DIP Credit Agreement) with its existing primary lender
group to provide secured debtor-in-possession financing to the Company. The
maximum borrowings under the DIP Credit Agreement are $48 million in the
aggregate, including up to $35 million revolving line of credit $12.8 million
term loan.
Management expects that its debtor-in-possession financing arrangements that
provide up to $48 million of financing will be sufficient to meet planned
working capital, capital expenditures and other cash requirements until such
time as it obtains approval for a plan of reorganization. In addition, the
management is considering whether certain of its operating units should be sold
to improve operating performance and enhance liquidity. Although the Company has
entered into the DIP Credit Agreement, the Company may require additional
financing to meet its cash flow requirements. Restrictive covenants included in
the debtor-in-possession credit facility and oversight by the Bankruptcy Court
limit the Company's ability to incur additional indebtedness, or sell assets
(substantially all of which are pledged), and may otherwise limit the
operational and financial flexibility of the Company.
Due to material uncertainties associated with the outcome of the Chapter 11
proceedings in general, and the effects of such proceedings on the business of
the Company and its subsidiaries, including the timing and extent of any sales
of operating entities, and whether or not a plan of reorganization submitted by
the Company will be approved, there can be no assurances that the Company will
obtain sufficient liquidity enabling it to continue to operate in its present
organizational structure.
Net sales for the three months ended September 30, 2002 were $34.7 million, a
decrease of $5.5 million or 13.6% from the Company's net sales for the
corresponding period ended September 30, 2001. Volume of tons shipped decreased
19.3%, which accounted for $7.8 million of revenue decline, offset by the effect
of higher priced product mix that increased revenues by approximately $2.3
million. For the six months ended September 30, 2002 net sales were $77.8
million, a decrease of $7.2 million or 8.5% less than the Company's net sales
for the corresponding period ended September 30, 2001. Volume of tons shipped
decreased 10.3%, which accounted for $8.7 million of revenue decline, offset by
the effect of higher priced product mix that increased revenues by approximately
$1.5 million.
The Company's results of operations for the quarter and six months ended
September 30, 2002 include approximately $30.0 million of restructuring charges.
As a result of the Company's closure of certain operating facilities and its
subsequent bankruptcy filing, the Company incurred approximately $30.0 million
of restructuring costs during the quarter ended September 30, 2002. These costs
included $23.4 million charges for estimated enhanced retirement benefit
obligations attributable to early retirements as a result of the closure of the
Company's operating facilities located in Indianapolis, Indiana and Youngstown,
Ohio; $3.0 million inventory valuation reserves associated with discontinued or
otherwise impaired products; $2.5 million impairment charges for idled fixed
assets; $.9 million of legal and other bankruptcy related advisory fees and $.2
million of other costs related to plant closures. The inventory and facility
impairment adjustments reflect non-cash charges, and, at September 30, 2002, the
enhanced early retirement
obligations represent obligations that are subject to compromise.
In addition, results of operations for the six months ended September 30, 2002
includes a non-cash charge $5.3 million to reflect the impairment of goodwill
arising in connection with its acquisition of Alkar Steel Corporation in March
2000. During the quarter ended June 30, 2002, the Company adopted FASB Statement
of Financial Accounting Standards No. 142, "Goodwill and Other Intangible
Assets," and as permitted by this new accounting standard, the Company accounted
for this charge as a cumulative effect of a change in accounting principle.
Net loss for the three months ended September 30, 2002 was $33.3 million, or
$5.18 per share as compared to net loss of $1.8 million, or $0.28 per share for
the three months ended September 30, 2001. For the six months ended September
30, 2002, net loss was $40.7 million, or $6.33 per share as compared to net
income of $2.3 million, or $0.35 per share for the six months ended September
30, 2001. The restructuring charges and cumulative effect of adopting the change
in accounting principle comprised $35.25 million of net loss for the six months
ended September 30, 2002, or $5.48 per share.
COLD METAL PRODUCTS, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(Dollars in thousands, except per share amounts)
(Unaudited)
Three Months Ended Six Months Ended
September 30, September 30,
2002 2001 2002 2001
---------------------------------- ----------------------------------
Net sales $34,724 $40,190 $77,764 $85,011
Cost of sales 33,621 38,100 73,818 78,983
---------------------------------- ----------------------------------
Gross profit 1,103 2,090 3,946 6,028
Selling, general and administrative expenses 3,928 3,703 8,206 7,434
Restructuring charges 29,980 340 29,980 340
Interest expense 856 917 1,654 1,896
---------------------------------- ----------------------------------
(Loss) before income taxes and cumulative effect (33,661) (2,870) (35,894) (3,642)
of accounting change
Income tax (benefit) expense (391) (1,087) (471) (1,377)
---------------------------------- ----------------------------------
(Loss) before cumulative effect of accounting
change (33,270) (1,783) (35,423) (2,265)
Cumulative effect of accounting change 5,268
---------------------------------- ----------------------------------
Net (loss) $ (33,270) $ (1,783) $ (40,691) $ (2,265)
================================== ==================================
Basic and diluted net (loss) per share $(5.18) $(0.28) $(6.33) $(0.35)
================================== ==================================
Weighted average shares outstanding:
Basic and Diluted 6,427,078 6,404,962 6,427,078 6,401,719
================================== ==================================
COLD METAL PRODUCTS, INC.
has caused this notification to be signed on its behalf by the
undersigned hereunto duly authorized.
Date: November 15, 2002 By s/Joseph C. Horvath
---------------------------------
Joseph C. Horvath
Vice President and
Chief Financial Officer