KATY INDUSTRIES INC

CIK:0000054681|SEC Filings

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE LOSS (Unaudited) - USD ($) shares in Thousands, $ in Thousands	3 Months Ended		9 Months Ended
	Sep. 30, 2016	Sep. 25, 2015	Sep. 30, 2016	Sep. 25, 2015
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE LOSS [Abstract]
Net sales	$ 23,962	$ 31,048	$ 82,494	$ 83,702
Cost of goods sold	23,307	26,273	73,804	70,530
Gross profit	655	4,775	8,690	13,172
Selling, general and administrative expenses	4,485	3,518	12,319	11,144
Severance, restructuring and related charges	0	1,777	761	3,914
Operating loss	(3,830)	(520)	(4,390)	(1,886)
Interest expense	(1,636)	(1,233)	(4,352)	(2,733)
Other, net	30	35	94	100
Loss before income tax (expense) benefit	(5,436)	(1,718)	(8,648)	(4,519)
Income tax (expense) benefit	(9)	113	(24)	98
Net loss	(5,445)	(1,605)	(8,672)	(4,421)
Other comprehensive loss:
Foreign currency translation	(43)	(94)	(29)	(178)
Total comprehensive loss	$ (5,488)	$ (1,699)	$ (8,701)	$ (4,599)
Loss per share of common stock - Basic & Diluted (in dollars per share)	$ (0.68)	$ (0.20)	$ (1.09)	$ (0.56)
Weighted average common shares outstanding:
Basic (in shares)	7,951	7,951	7,951	7,951
Diluted (in shares)	7,951	7,951	7,951	7,951

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (Unaudited) - USD ($) $ in Thousands	9 Months Ended
	Sep. 30, 2016	Sep. 25, 2015
Cash flows from operating activities:
Net loss	$ (8,672)	$ (4,421)
Depreciation	1,550	2,026
Amortization of intangible assets	808	545
Amortization of debt issuance costs	115	130
Stock-based compensation	(11)	76
Payment In Kind interest expense	1,252	462
Other	(28)	0
Total adjustments	(4,986)	(1,182)
Changes in operating assets and liabilities:
Accounts receivable	1,786	(668)
Inventories	7,011	(2,842)
Other assets	239	(1,762)
Accounts payable	238	6,487
Accrued expenses	14	(1,039)
Payable to related party	288	481
Deferred revenue	(130)	(146)
Other liabilities	122	1,358
Total changes in operating capital	9,568	1,869
Net cash provided by operations	4,582	687
Cash flows from investing activities:
Payment for acquisition, net of cash received	0	(23,855)
Capital expenditures	(2,436)	(2,167)
Net cash used in investing activities	(2,436)	(26,022)
Cash flows from financing activities:
Net borrowings on revolving credit facility	(5,765)	4,375
Proceeds from term loan facility	6,500	24,000
Payment on capital lease obligation	(66)	0
Decrease in book overdraft	(490)	(115)
Direct costs associated with debt facilities	(2,072)	(2,627)
Net cash (used in) provided by financing activities	(1,893)	25,633
Effect of exchange rate changes on cash	25	(309)
Net increase (decrease) in cash	278	(11)
Cash, beginning of period	53	66
Cash, end of period	331	55
Supplemental cash flows disclosure:
Interest paid	1,902	1,637
Income taxes paid	21	30
Supplemental information of non-cash investing and financing activities:
Accrued contingent earn out payment	0	2,000
Capital leases included in accrued expenses and other noncurrent liabilities	407	0
Capital expenditures included in accounts payable	620	1,159
Collateralized debt fees included in accrued expenses	240	0
Capitalization of forgiven related party notes payable	287	0
Capitalization of forgiven related party management fee payable	$ 4,038	$ 0

CONDENSED CONSOLIDATED BALANCE SHEETS (Unaudited) - USD ($) $ in Thousands	Sep. 30, 2016	Dec. 31, 2015
Current Assets:
Cash	$ 331	$ 53
Accounts receivable, net	10,414	12,211
Inventories, net	12,229	19,267
Other current assets	1,622	2,164
Total current assets	24,596	33,695
Other Assets:
Goodwill	8,377	8,377
Intangibles, net	20,068	20,877
Other	1,638	1,747
Total other assets	30,083	31,001
Property and Equipment:
Land and improvements	535	535
Buildings and improvements	6,938	6,269
Machinery and equipment	47,655	44,617
Property and equipment, gross	55,128	51,421
Less - Accumulated depreciation	(38,049)	(36,646)
Property and equipment, net	17,079	14,775
Total assets	71,758	79,471
Current Liabilities:
Accounts payable	21,361	20,440
Book overdraft	428	918
Accrued compensation	1,081	1,149
Accrued expenses	6,386	7,142
Deferred revenue	0	130
Current maturities of long-term debt	4,653	1,143
Revolving credit agreement	18,203	23,969
Total current liabilities	52,112	54,891
Payable to Related Party	0	4,268
Long-Term Debt	24,442	21,435
Other Liabilities	8,317	7,615
Total liabilities	84,871	88,209
COMMITMENTS AND CONTINGENCIES (Note 9)
Stockholders' Deficit
15% Convertible preferred stock, $100 par value; authorized 1,200,000 shares; issued and outstanding 1,131,551 shares; liquidation value $113,155	108,256	108,256
Common stock, $1 par value; authorized 35,000,000 shares; issued 9,822,304 shares	9,822	9,822
Additional paid-in capital	31,436	27,110
Accumulated other comprehensive loss	(1,660)	(1,631)
Accumulated deficit	(139,530)	(130,858)
Treasury stock, at cost, 1,871,128 shares	(21,437)	(21,437)
Total stockholders' deficit	(13,113)	(8,738)
Total liabilities and stockholders' deficit	$ 71,758	$ 79,471