-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, U4mXg/7whuppZnkKGcdazZ+m4cNPAya1pw0O8+czbqVB0Cq0nvRFQfIYJzCZ4db5 rvSwEsy0Vh5nTr+IBh93SQ== 0000950129-04-001674.txt : 20040330 0000950129-04-001674.hdr.sgml : 20040330 20040330145321 ACCESSION NUMBER: 0000950129-04-001674 CONFORMED SUBMISSION TYPE: 8-K PUBLIC DOCUMENT COUNT: 2 CONFORMED PERIOD OF REPORT: 20040330 ITEM INFORMATION: ITEM INFORMATION: Financial statements and exhibits FILED AS OF DATE: 20040330 FILER: COMPANY DATA: COMPANY CONFORMED NAME: PIONEER COMPANIES INC CENTRAL INDEX KEY: 0000830141 STANDARD INDUSTRIAL CLASSIFICATION: CHEMICALS & ALLIED PRODUCTS [2800] IRS NUMBER: 061215192 STATE OF INCORPORATION: DE FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 8-K SEC ACT: 1934 Act SEC FILE NUMBER: 001-09859 FILM NUMBER: 04700246 BUSINESS ADDRESS: STREET 1: 700 LOUISIANA STREET 2: STE 4200 CITY: HOUSTON STATE: TX ZIP: 77002 BUSINESS PHONE: 7132253831 MAIL ADDRESS: STREET 1: 700 LOUISIANA STREET 2: STE 4200 CITY: HOUSTON STATE: TX ZIP: 77002 FORMER COMPANY: FORMER CONFORMED NAME: GEV CORP DATE OF NAME CHANGE: 19930902 FORMER COMPANY: FORMER CONFORMED NAME: FINEVEST FOODS INC DATE OF NAME CHANGE: 19920703 8-K 1 h14122e8vk.txt PIONEER COMPANIES, INC. - DATED 3/30/2004 SECURITIES AND EXCHANGE COMMISSION WASHINGTON, DC 20549 ------------- FORM 8-K CURRENT REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 Date of report: MARCH 30, 2004 ----------------------------------------------------------------- Date of earliest event reported: MARCH 30, 2004 ------------------------------------------------ PIONEER COMPANIES, INC. - -------------------------------------------------------------------------------- (Exact Name of Registrant as Specified in Charter) DELAWARE 000-31230 06-1215192 - -------------------------------------------------------------------------------- (State or Other Jurisdiction (Commission (IRS Employer of Incorporation) File Number) Identification No.) 700 LOUISIANA, SUITE 4300, HOUSTON, TEXAS 77002 - -------------------------------------------------------------------------------- (Address of Principal Executive Offices) (Zip Code) Registrant's telephone number, including area code (713) 570-3200 ----------------------------- NOT APPLICABLE - -------------------------------------------------------------------------------- (Former name or former address, if changed since last report) INFORMATION TO BE INCLUDED IN THE REPORT ITEM 7. FINANCIAL STATEMENTS, PRO FORMA FINANCIAL STATEMENTS AND EXHIBITS (c) Exhibits. Exhibit number Description -------------- ----------- 99.1 Press Release of March 30, 2004 ITEM 12. RESULTS OF OPERATIONS AND FINANCIAL CONDITION On March 30, 2004, Pioneer Companies, Inc., a Delaware corporation (the "Company"), issued a press release announcing its results for the year ended December 31, 2003. Filed herewith is such press release. SIGNATURES Pursuant to the requirements of the Securities Exchange Act of 1934, as amended, the Registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized. PIONEER COMPANIES, INC. By: /s/ KENT R. STEPHENSON --------------------------------- Kent R. Stephenson Vice President, Secretary and General Counsel Dated: March 30, 2004 EXHIBIT INDEX Exhibit number Description -------------- ----------- 99.1 Press Release of March 30, 2004 EX-99.1 3 h14122exv99w1.txt PRESS RELEASE OF MARCH 30, 2004 EXHIBIT 99.1 700 LOUISIANA STREET FAX: 713 225-6475 SUITE 4300 TELEPHONE: 713 570-3200 HOUSTON, TEXAS 77002 (PIONEER LOGO) PRESS RELEASE PIONEER ANNOUNCES 2003 RESULTS Houston, Texas (March 30, 2004) - Pioneer Companies, Inc. [OTC: PONR] today reported that for the year ended December 31, 2003, it had net income of $18.2 million, or $1.79 per diluted share, on revenues of $378.7 million, compared to a net loss of $4.8 million, or $0.48 per share, on revenues of $316.9 million for the year ended December 31, 2002. Pioneer reported a net loss of $5.2 million, or $0.50 per diluted share, in the fourth quarter of 2003 as compared to a net loss of $11.2 million, or $1.12 per share, in the comparable quarter in 2002. Revenues for the fourth quarter of 2003 were $93.3 million as compared to $84.3 million for the same period in 2002. Pioneer realized an average ECU netback of $382 in 2003, compared to $270 in 2002, and revenues also improved as a result of higher volumes and prices related to sales of bleach in the western U.S. Pioneer's ECU production was 671,000 tons in 2003, representing 93% of current production capacity. A $44.2 million increase in cost of sales - products for 2003 primarily included increased electricity costs, operating and maintenance costs, costs of products purchased for resale and other variable production costs. The fourth quarter increase of $11.7 million as compared to the year-earlier period resulted from higher costs in the same categories. Selling, general and administrative expenses in 2003 were largely unchanged from 2002, with increased bad debt expense of $2.1 million in 2003 offsetting $2.0 million of higher personnel costs and professional fees in 2002. Fourth quarter selling, general and administrative expenses were $3.2 million and $6.7 million in 2003 and 2002, respectively. The decrease was primarily related to lower personnel costs of $2.5 million and lower professional fees of $0.8 million in 2003. Other significant charges and credits, not specifically related to plant operating and maintenance activities and which affect the comparability of operating income between periods, are as follows (amounts in millions):
Three Months Ended Year Ended December 31, December 31, ------------------------ ------------------------ 2003 2002 2003 2002 --------- --------- --------- --------- Operating income (loss) .................. $ 0.3 $ (4.5) $ 39.8 $ 12.8 Charges (credits) Cost of sales - products .............. $ -- $ -- $ 9.5 $ -- Cost of sales - derivatives ........... -- (2.2) 21.0 (12.9) Change in fair value of derivatives ... -- (10.3) (87.3) (23.6) Asset impairment ...................... -- 16.9 40.8 16.9 Restructuring expenses ................ -- -- 4.1
- ------------------------------- Charges and credits noted above are detailed as follows: o In the first quarter of 2003, cost of sales - products included an increase of $9.5 million in Pioneer's reserves for environmental remediation liabilities, based on a new analysis of environmental concerns at all of Pioneer's plants. o In the first quarter of 2003, Pioneer and the Colorado River Commission settled their dispute over certain derivative positions relating to the supply of power to Pioneer's Henderson facility. As a result, the receivable of $21.0 million that Pioneer had recorded for estimated net proceeds from matured derivatives was reversed, and the net liability of $87.3 million that had been recorded for the net mark-to-market loss on outstanding derivative positions was also reversed. In the prior periods, Pioneer recorded $2.2 million and $12.9 million of benefits in cost of sales related to derivatives positions that had matured in the three and twelve months ended December 31, 2002, respectively. Pioneer also recorded $10.3 million and $23.6 million of benefits related to the change in the fair market value of the remaining derivatives positions in the three and twelve months ended December 31, 2002, respectively. o Due to continued idling of the Tacoma chlor-alkali facility and uncertainty as to when it might be restarted, Pioneer recorded an impairment charge of $16.9 2 million in the fourth quarter of 2002. Pioneer recorded an impairment charge of $40.8 million in the first quarter of 2003, since the settlement with the Colorado River Commission resulted in the use of higher-cost power at the Henderson facility, and recognition of an impairment of the facility's asset value. o Restructuring charges in 2002 included $2.9 million of severance expense, $0.7 million of Tacoma idling costs and $0.5 million of reorganization-related professional fees. Pioneer reported other expense of $5.8 million in 2003, consisting of currency exchange losses. In 2002 there was a currency exchange gain of $0.1 million. For the three months ended December 31, 2003, other expense included $1.3 million of currency exchange loss as compared to $0.1 million of currency exchange gain in the comparable period in the prior year. At December 31, 2003, Pioneer had liquidity of $12.4 million, which included cash of $1.9 million and available borrowings under Pioneer's revolving credit facility of $10.5 million, net of letters of credit outstanding as of such date. Michael Y. McGovern, Pioneer's President and Chief Executive Officer, stated, "In 2003 Pioneer received major benefits from the settlement of our dispute with CRC and an increase in ECU prices, which reached a three-year high of $406 in the second quarter. However, prices have declined since that peak, and for 2004 we do not currently expect average ECU prices at the 2003 levels, and we currently anticipate a high level of energy costs during 2004. Recently we embarked on an important organizational efficiency project that we believe will produce benefits in other areas of Pioneer's cost structure in the future and make us more competitive." Pioneer, based in Houston, manufactures chlorine, caustic soda, bleach, hydrochloric acid and related products used in a variety of applications, including water treatment, plastics, pulp and paper, detergents, agricultural chemicals, pharmaceuticals and medical disinfectants. The Company owns and operates four chlor-alkali plants and several downstream manufacturing facilities in North America. The Company has filed its annual report on Form 10-K for the year ended December 31, 2003, and has posted it to its Internet web site, so it is readily accessible. 3 Other information and press releases of Pioneer Companies, Inc. can also be obtained from its Internet web site at www.piona.com. Pioneer will conduct a teleconference on April 1, 2004, at 10:00 a.m. Central time in order to discuss its 2003 financial results. Individuals who are interested in listening to the teleconference may call (800) 732-8491 at that time and request to listen to the Pioneer earnings teleconference. A replay of the teleconference will be available from 1:00 p.m. (Central time) on April 1, 2004, until 5:00 p.m. on April 3, 2004, by dialing (800) 633-8284, reservation #21189980. Certain statements in this news release are "forward-looking statements" within the meaning of the Private Securities Litigation Reform Act. Forward-looking statements relate to matters that are not historical facts. Such statements involve risks and uncertainties, including, but not limited to, Pioneer's high financial leverage, global political and economic conditions, the demand and prices for Pioneer's products, Pioneer and industry production volumes, competitive prices, the cyclical nature of the markets for many of Pioneer's products and raw materials, the effect of Pioneer's results of operations on its debt agreements, and other risks and uncertainties described in Pioneer's filings with the Securities and Exchange Commission. Actual outcomes may vary materially from those indicated by the forward-looking statements. Contact: Gary Pittman (713) 570-3200 4 PIONEER COMPANIES, INC. CONSOLIDATED STATEMENTS OF OPERATIONS (IN THOUSANDS, EXCEPT PER SHARE DATA)
THREE MONTHS ENDED YEAR ENDED DECEMBER 31, DECEMBER 31, ------------------------ ------------------------ 2003 2002 2003 2002 --------- --------- --------- --------- Revenues ..................................... $ 93,327 $ 84,288 $ 378,675 $ 316,907 Cost of sales - product ...................... (89,090) (77,791) (340,804) (296,622) Cost of sales - derivatives .................. -- 2,194 (20,999) 12,877 --------- --------- --------- --------- Total cost of sales .......................... (89,090) (75,597) (361,803) (283,745) Gross profit ................................. 4,237 8,691 16,872 33,162 Selling, general and administrative expenses.. (3,164) (6,664) (23,204) (23,893) Change in fair value of derivatives .......... -- 10,300 87,271 23,566 Asset impairment and other items ............. (786) (16,796) (41,158) (20,084) --------- --------- --------- --------- Operating income (loss) ...................... 287 (4,469) 39,781 12,751 Interest expense, net ........................ (4,879) (4,821) (19,064) (18,891) Other income (expense), net .................. (1,282) 70 (5,816) 602 --------- --------- --------- --------- Income (loss) before income taxes............. (5,874) (9,220) 14,901 (5,538) Income tax (expense) benefit ................. 684 (2,018) 3,286 781 --------- --------- --------- --------- Net income (loss) ............................ $ (5,190) $ (11,238) $ 18,187 $ (4,757) ========= ========= ========= ========= Income (loss) per share: Basic .................................... (0.52) (1.12) 1.82 (0.48) Diluted .................................. (0.50) (1.12) 1.79 (0.48) Weighted average number of shares outstanding: Basic .................................... 10,004 10,000 10,002 10,000 Diluted .................................. 10,327 10,000 10,169 10,000
5 PIONEER COMPANIES, INC. CONDENSED CONSOLIDATED BALANCE SHEETS (IN THOUSANDS)
DECEMBER 31, DECEMBER 31, 2003 2002 ------------ ------------ ASSETS Current assets, excluding derivative asset .................................. $ 61,471 $ 62,862 Current derivative asset..................................................... -- 17,834 Net property, plant and equipment ........................................... 189,534 242,269 Other assets ................................................................ 3,931 25,755 Non-current derivative asset................................................. -- 41,362 Excess reorganization value over the fair value of identifiable assets ...... 84,064 84,064 --------- --------- Total assets ................................................................ $ 339,000 $ 474,146 ========= ========= LIABILITIES AND STOCKHOLDERS' EQUITY Current liabilities, excluding derivative liability ......................... $ 48,881 $ 59,466 Current derivative liability................................................. -- 37,614 Long-term debt, less current portion ........................................ 203,803 207,463 Non-current derivative liability ............................................ -- 108,852 Other long-term liabilities ................................................. 67,326 59,499 Total stockholders' equity .................................................. 18,990 1,252 --------- --------- Total liabilities and stockholders' equity .................................. $ 339,000 $ 474,146 ========= =========
6 PIONEER COMPANIES, INC. CONSOLIDATED STATEMENTS OF CASH FLOWS (IN THOUSANDS)
YEAR ENDED DECEMBER 31, ------------------------ 2003 2002 --------- --------- Operating activities: Net income (loss) .......................................... $ 18,187 $ (4,757) Adjustments to reconcile net income (loss) to net cash flows from operating activities: Fresh-start adjustments ................................. -- -- Debt forgiveness income ................................. -- -- Depreciation and amortization ........................... 21,551 24,926 Provision for (recovery of) loss on accounts receivable ............................................ 1,296 (848) Deferred tax benefit .................................... (3,142) (781) Derivatives - cost of sales and change in fair value .... (66,272) (36,443) Asset impairment ........................................ 40,818 16,941 (Gain) loss on disposal of assets ....................... 761 (1,324) Foreign exchange (gain) loss ............................ 5,825 (92) Net effect of changes in operating assets and liabilities ........................................... (4,763) 2,628 --------- --------- Net cash flows from operating activities ........... 14,261 250 --------- --------- Investing activities: Capital expenditures ....................................... (9,998) (10,615) Proceeds from disposal of assets ........................... -- 2,047 --------- --------- Net cash flows from investing activities ........... (9,998) (8,568) --------- --------- Financing activities: Debtor-in-possession credit facility, net .................. -- (6,663) Revolving credit borrowings, net ........................... 2,119 14,704 Repayments on long-term debt ............................... (7,494) (1,649) Proceeds from issuance of stock ............................ 8 -- --------- --------- Net cash flows from financing activities ........... (5,367) 6,392 --------- --------- Effect of exchange rate changes on cash and cash equivalents ........................................... 261 1,091 --------- --------- Net decrease in cash and cash equivalents .................... (843) (835) --------- --------- Cash and cash equivalents at beginning of period ............. 2,789 3,624 --------- --------- Cash and cash equivalents at end of period ................... $ 1,946 $ 2,789 ========= =========
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