UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 10-Q
[X] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15 (D)
OF THE SECURITIES EXCHANGE ACT OF 1934
FOR THE QUARTERLY PERIOD ENDED JUNE 30, 2001
[ ] 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-?
HOMASOTE COMPANY
(Exact name of registrant as specified in its charter)
NEW JERSEY 21-0388986
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
LOWER FERRY ROAD, WEST TRENTON, NJ 08628
(Address of principal executive office) (Zip Code)
Registrant's telephone number, including area code:(609) 883-3300
Indicate by check mark whether the registrant (1) has filed all
reports required to be filed by section 13 or 15 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. (X)Yes ( )No
At August 15, 2001, 348,799 shares of common stock of the
registrant were outstanding.
Results of Operations
Homasote Company and Subsidiary
CONSOLIDATED STATEMENTS OF OPERATIONS
AND RETAINED EARNINGS
(UNAUDITED)
For the three months For the six months
ended ended
June 30, June 30,
2001 2000 2001 2000
--------- --------- ---------- ----------
Net sales $ 6,779,020 $ 6,712,099 $13,647,349 $13,384,816
Cost of sales 4,722,861 4,903,986 10,073,555 9,913,586
--------- --------- ---------- ----------
Gross profit 2,056,159 1,808,113 3,573,794 3,471,230
Selling, general
and administrative
expenses 1,685,149 1,633,916 3,378,655 3,187,057
--------- --------- ---------- ----------
Operating income 371,010 174,197 195,139 284,173
Other income (expense):
Gain on sale of
assets --- 1,350 --- 27,350
Interest income 21,611 15,349 52,209 30,113
Interest expense (30,980) (37,445) (56,876) (64,976)
Insurance settlement --- --- 1,708,472 ---
Other income 7,138 9,793 9,961 25,584
--------- --------- ---------- ----------
(2,231) (10,953) 1,713,766 18,071
--------- --------- ---------- ----------
Earnings before
income tax expense 368,779 163,244 1,908,905 302,244
Income tax expense --- --- --- ---
--------- --------- ---------- ----------
Net earnings 368,779 163,244 1,908,905 302,244
Retained earnings
at beginning of
period 15,130,720 13,468,222 13,608,034 13,329,222
Less dividends
declared and
paid ($0.05 per
share per quarter
in 2001 and
$0 in 2000) (17,440) --- (34,880) ---
---------- ---------- ---------- ----------
Retained earnings
at end of period $15,482,059 $13,631,466 $15,482,059 $13,631,466
========== ========== ========== ==========
Basic and diluted
net earnings per
common share $ 1.06 $ 0.47 $ 5.47 $ 0.87
========== ========== ========== ==========
Weighted average basic
and diluted common
shares outstanding 348,799 348,799 348,799 348,799
========== ========== ========== ==========
See accompanying notes to consolidated financial statements.
Homasote Company and Subsidiary
CONSOLIDATED BALANCE SHEETS
ASSETS
June 30, December 31,
2001 2000
------------ -----------
(UNAUDITED)
CURRENT ASSETS
Cash and cash equivalents $ 1,735,552 $ 56,204
Accounts receivable (net
of allowance for doubtful
accounts of $51,392 in
2001 and 2000) 2,274,430 2,288,016
Inventories 3,917,964 2,924,459
Deferred income
taxes 29,369 29,369
Prepaid expenses and
other current assets 93,879 242,523
----------- -----------
Total current assets 8,051,194 5,540,571
----------- -----------
Property, plant and
equipment, at cost 41,319,954 40,746,146
Less accumulated
depreciation 30,431,676 29,803,778
----------- -----------
Net property, plant and
equipment 10,888,278 10,942,368
Restricted cash 326,869 691,778
Other assets 2,562,218 2,575,488
----------- -----------
$ 21,828,559 $ 19,750,205
=========== ===========
(continued)
LIABILITIES AND STOCKHOLDERS' EQUITY
June 30, December 31,
2001 2000
------------ -----------
(UNAUDITED)
CURRENT LIABILITIES
Short term debt $ 982,256 $ ---
Current installments of
long-term debt 440,000 432,500
Accounts payable 2,342,189 2,441,560
Accrued expenses 644,828 737,586
----------- -----------
Total current liabilities 4,409,273 3,611,646
Long-term debt, excluding
current installments 2,083,333 2,305,833
Deferred income taxes 29,369 29,369
Other liabilities 6,264,519 6,635,317
----------- -----------
Total liabilities 12,786,494 12,582,165
----------- -----------
STOCKHOLDERS' EQUITY
Common stock, par value $.20
per share; authorized
1,500,000 shares;
Issued 863,995 shares 172,799 172,799
Additional paid-in capital 898,036 898,036
Retained earnings 15,482,059 13,608,034
----------- -----------
16,552,894 14,678,869
Less cost of common shares in
treasury - 515,196 shares in
2001 and 2000 7,510,829 7,510,829
----------- -----------
Total stockholders' equity 9,042,065 7,168,040
----------- -----------
$ 21,828,559 $ 19,750,205
=========== ===========
See accompanying notes to consolidated financial statements.
Homasote Company and Subsidiary
CONSOLIDATED STATEMENTS OF CASH FLOWS
FOR THE SIX MONTHS ENDED JUNE 30,
(UNAUDITED)
2001 2000
----------- -----------
Cash flows from operating
activities:
Net earnings $ 1,908,905 $ 302,244
Adjustments to reconcile net
earnings to net cash
provided by operating
activities:
Depreciation and amortization 641,168 617,387
Gain on disposal of fixed assets --- (27,350)
Changes in assets and liabilities:
Decrease (increase) in accounts
receivable, (net) 13,586 (535,402)
(Increase) decrease in inventories (993,505) 261,333
Decrease (increase) in prepaid
expenses and other current assets 148,644 (67,438)
Decrease in accounts payable (99,371) (396,859)
(Decrease) increase in accrued
expenses (92,758) 131,423
Decrease in other liabilities (370,798) (9,561)
---------- ----------
Net cash provided by
operating activities 1,155,871 275,777
---------- ----------
Cash flows from investing
activities:
Proceeds from sale of equipment --- 27,350
Capital expenditures (573,808) (745,202)
Decrease (increase) in restricted
cash 364,909 (5,291)
---------- ----------
Net cash used in investing
activities (208,899) (723,143)
---------- ----------
(continued)
Cash flows from financing
activities:
Proceeds from issuance of
short-term debt 982,256 427,644
Repayment of long-term debt (215,000) (207,500)
Proceeds from sale of treasury
stock --- 3,450
Dividends declared and paid (34,880) ---
---------- ---------
Net cash provided by
financing activities: 732,376 223,594
---------- ---------
Net increase (decrease) in cash and
cash equivalents 1,679,348 (223,772)
Cash and cash equivalents
at beginning of period 56,204 291,729
---------- ----------
Cash and cash equivalents
at end of period $ 1,735,552 $ 67,957
========== ==========
Supplemental disclosures of
cash flow information:
Cash paid during the period for:
Interest $ 56,876 $ 64,976
---------- ----------
See accompanying notes to consolidated financial statements.
NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS FOR THE
PERIOD ENDED JUNE 30, 2001
Note 1. The consolidated financial information as of June 30, 2001 and
for the three and six-month periods ended June 30, 2001 and
2000 includes, in the opinion of management, all adjustments
(none of which were non-recurring) necessary for a fair
presentation of such periods. The consolidated financial
information for the three and six-month periods ended June 30,
2001 is not necessarily indicative of the results of
operations that might be expected for the entire year ending
December 31, 2001.
Note 2. INVENTORIES
The following are the major classes of inventories as of June
30, 2001 and December 31, 2000:
2001 2000
Finished goods.......$2,706,637 $ 1,996,746
Work in process...... 87,019 66,991
Raw materials........ 1,124,308 860,722
$3,917,964 $ 2,924,459
Inventories include the cost of materials, direct labor and
manufacturing overhead.
Note 3. NET EARNINGS PER COMMON SHARE
Basic net earnings per common share has been computed by
dividing net earnings by the weighted average number of common
shares outstanding during the respective periods. Diluted net
earnings per share is the same as basic net earnings per
common share since the Company has a simple capital structure
with only common stock outstanding in 2001 and 2000.
Note 4. DEBT
The Company is party to a loan agreement (the "Agreement") and
promissory note with the New Jersey Economic Development
Authority (the "Authority"). Under the Agreement, the
Authority loaned the Company $4,140,000 out of the proceeds
from the issuance of the Authority's Economic Growth Bonds
(Greater Mercer County Composite Issue) 1996 Series E (the
"Bonds") to be used in connection with specified capital
expenditures described in the Agreement. Interest is charged
at the variable rate of interest due on the Bonds (2.60% at
June 30, 2001).
In connection with the Agreement, the Authority also entered
into a trust indenture with a bank to serve as trustee and
tender agent for the loan proceeds. Principal and interest
are payable monthly to the trustee in varying amounts through
2006.
The trust indenture is secured in part by the Agreement and by
a direct pay Letter of Credit facility in the face amount of
$4,209,000, of which $2,523,333 was outstanding at June 30,
2001. The Letter of Credit facility contains financial and
other restrictive covenants. The Agreement, as currently
amended (the "Amended Agreement"), contains financial and
other covenants including minimum tangible net worth, cash
flow coverage, current ratio and maximum liabilities to
tangible net worth (all as defined). The Amended Agreement
further provides for collateralization of the Letter of Credit
facility by substantially all of the Company's assets.
The Company has a $1.0 million unsecured demand note line of
credit agreement with a bank which expired July 31, 2001.
Interest is payable monthly at the bank's index rate (6.75% at
June 30, 2001) less 0.25%. As of June 30, 2001 and December
31, 2000, $982,256 and $0, respectively, was outstanding under
the line of credit. The line of credit was renewed in the
amount of $1.0 million and expires July 31, 2002. The note
provides for prepayments and advances as required to satisfy
working capital needs. The note is collateralized by
substantially all of the Company's assets.
Note 5. RECLASSIFICATIONS
Certain reclassifications have been made to the 2000 financial
statements in order to conform with the 2001 presentation.
Note 6. INSURANCE SETTLEMENT
As previously reported, on January 24, 2001, the Company
received $2,039,286 related to an insurance settlement, which
was net of $210,714 due, or potentially due, to an insurance
adjuster. The amount due to the adjuster is in dispute. The
Company and its bank agreed that $330,814 of the proceeds
received are restricted for use under the terms of its loan
agreement with the New Jersey Economic Development Authority
to pay costs incurred to repair and make certain improvements
to the dryer damaged in the fires. Such amount was recorded
in restricted cash and other liabilities upon receipt. The
balance of the proceeds received, $1,708,472 has been recorded
under other income. The Company intends to reinvest the
proceeds of this settlement in like kind assets (as defined by
the Internal Revenue Code) and, as such, the proceeds are not
currently taxable.
Note 7. RECENTLY ISSUED ACCOUNTING STANDARDS:
In June 1998 the Financial Accounting Standards Board (FASB)
issued Statement of Financial Accounting Standards (SFAS) No.
133, "Accounting for Derivative Instruments and Certain
Hedging Activities." In June 2000 the FASB issued SFAS No.
138, "Accounting for Certain Derivative Instruments and
Certain Hedging Activity, an Amendment of SFAS 133." SFAS No.
133 and SFAS No. 138 require that all derivative instruments
be recorded on the balance sheet at their respective fair
values. The Company adopted SFAS No. 133 on January 1, 2001 as
required. The implementation of this standard did not result
in any impact on the Company's June 30, 2001 financial
statements as the Company presently does not have any
derivative financial instruments.
In July 2001, the Financial Accounting Standards Board issued
FASB Nos. 141 and 142 (SFAS 141 and SFAS 142), "Business
Combinations" and "Goodwill and Other Intangible Assets." SFAS
141 replaces APB 16 and eliminates pooling-of-interests
accounting prospectively. It also provides guidance on
purchase accounting related to the recognition of intangible
assets and accounting for negative goodwill. SFAS 142 changes
the accounting for goodwill from an amortization method to an
impairment-only approach. Under SFAS 142, goodwill will be
tested annually and whenever events or circumstances occur
indicating that goodwill might be impaired. SFAS 141 and SFAS
142 are effective for all business combinations completed
after June 30, 2001. Upon adoption of SFAS 142, amortization
of goodwill recorded for business combinations consummated
prior to July 1, 2001 will cease, and intangible assets
acquired prior to July 1, 2001 that do not meet the criteria
for recognition under SFAS 141 will be reclassified to
goodwill. Companies are required to adopt SFAS 142 for fiscal
years beginning after December 15, 2001. In connection with
the adoption of SFAS 142, companies will be required to
perform a transitional goodwill impairment assessment. The
Company believes that the adoption of SFAS 142, beginning on
January 1, 2002, will have no effect on the Company's
consolidated financial position or results of operations.
FORM 10-Q
HOMASOTE COMPANY AND SUBSIDIARY
June 30, 2001
MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
RESULTS OF OPERATIONS
GENERAL
The following discussion and analysis and statements made elsewhere
in this Form 10-Q may include forward-looking statements about the
future that are necessarily subject to various risks and uncertainties.
These statements are based on the beliefs and assumptions of management
and on information currently available to management. These
forward-looking statements are identified by words such as "estimates",
"expects", "anticipates", "plans", "believes",and other similar
expressions
Factors that could cause future results to differ materially from
those expressed in or implied by the forward-looking statements or
historical results include the impact or outcome of:
events or conditions which affect the building and
manufacturing industries in general and the Company in
particular, such as general economic conditions, employment
levels, inflation, weather, strikes and other factors;
competitive factors such as changes in choices regarding
structural building materials by architects and builders and
packing products by industrial firms;
Although the ultimate impact of the above and other factors are
uncertain, these and other factors may cause future earnings to differ
materially from results or outcomes we currently seek or expect. These
factors are discussed in greater detail below.
RESULTS OF OPERATIONS
The Company's sales are derived from building material wholesalers
and industrial manufacturers. Sales during the three months ended June
30, 2001 increased by $ 66,921 or 1.0% to $ 6,779,020, from $ 6,712,099
in the three months ended June 30, 2000. Sales for the six month period
ended June 30, 2001 increased by $262,533 or 2.0% to $13,647,349, from
$13,384,816 in the six months ended June 30, 2000. The increase
resulted in part from an increase in the price of most millboard and
industrial products late in the fourth quarter of 2000. This increase
was offset by reduced unit sales due to unusually harsh weather
conditions, primarily in the Northeast region and deteriorating economic
conditions in the building products and packaging industries.
Gross profit as a percentage of sales, was 30.3% and
26.9%,respectively, for the three-month periods ended June 30, 2001 and
2000 and 26.2% and 25.9 %, respectively, for the six-month periods ended
June 30, 2001 and 2000. During the first quarter of 2001, margins were
negatively impacted by a significant increase in the price of natural
gas of approximately 96%, higher repair and maintenance costs and
overtime and other costs incurred due to the shutdown of a millboard
production line for overhaul. These cost increases were partially
offset by the price increase as discussed above.
Second quarter margins were substantially improved over those of
the first quarter due to the productivity and efficiencies realized from
the overhauled production line and reductions of average energy rates.
Efforts to control overtime and other labor and repair and maintenance
costs also contributed to the improved margins.
Selling, general and administrative expenses as a percentage of
sales were 24.9% and 24.3%, respectively, for the three-month periods
ended June 30, 2001 and 2000 and 24.8% and 23.8%, respectively, for the
six-month periods ended June 30, 2001 and 2000. The increase in selling,
general and administrative expenses is attributable primarily to
increased compensation in 2001 and a refund of state sales taxes in the
year earlier period, partially offset by a reduction in sales agent
commission costs.
Interest income increased to $21,611 for the three-month period
ended June 30, 2001, as compared to $15,349 for the three-month period
ended June 30, 2000 and to $52,209 for the six-month period ended June
30, 2001 as compared to $30,113 for the six-month period ended June 30,
2000. The increase in interest income is attributable primarily to the
earnings from an investment of funds received in the insurance
settlement as discussed elsewhere in this report.
Interest expense on debt decreased to $30,980 and $56,876,
respectively, for the three and six-month periods ended June 30, 2001,
as compared to $37,445 and $64,976, respectively, for the three and six-
month periods ended June 30, 2000. The decrease is primarily
attributable to reductions in the Company's cost of borrowed funds.
As previously reported, on January 24, 2001, the Company received
$2,039,286 related to an insurance settlement, which was net of $210,714
due, or potentially due, to an insurance adjuster. The amount due to
the adjusted is in dispute. The Company and its bank agreed that
$330,814 of the proceeds received are restricted for use under the terms
of its loan agreement with the New Jersey Economic Development Authority
to pay costs incurred to repair and make certain improvements to the
dryer damaged in the fires. Such amount was recorded in restricted cash
and other liabilities upon receipt. The balance of the proceeds
received, $1,708,472, has been recorded under other income. The Company
intends to reinvest the proceeds of this settlement in like kind assets
(as defined by the Internal Revenue Code) and, as such, the proceeds are
not currently taxable.
Other income decreased from $9,793 and $25,584 respectively,for the
three and six-month periods ended June 30, 2000 to $7,138 and $9,961,
respectively for the three and six-month periods ended June 30, 2001,
due primarily to decreases in the net price of corrugated paper sold as
scrap.
There was no income tax expense during the three and six-month
periods ended June 30, 2001 because it is expected that federal and
state taxes on projected book income in 2001 will be offset by a
reduction in the valuation allowance resulting in no income tax expense.
As a result of the foregoing, net income increased to $368,779 and
$1,908,905, respectively, for the three and six-month periods ended June
30, 2001, as compared to $163,244 and $302,244, respectively, for the
three and six month periods ended June 30, 2000.
LIQUIDITY AND CAPITAL RESOURCES
Cash flows from operating activities and bank borrowings are the
primary sources of liquidity. Net cash provided by operating activities
amounted to $1.2 million and $0.3 million in the six-month periods ended
June 30, 2001 and 2000, respectively.
Working capital was $3,641,921 at June 30, 2001, as compared to
$1,928,925 at December 31, 2000, an increase of $1,712,996.
Capital expenditures for new and improved facilities and equipment,
which are financed primarily through internally generated funds and
debt, were $0.6 million and $0.7 million in 2001 and 2000, respectively.
The Company has estimated capital expenditures for the remaining six (6)
months of 2001 in the amount of $0.6 million.
Cash flows from financing activities increased from $0.2 million
provided in 2000 to $0.7 million provided in 2001, primarily as a result
of the increase in short term debt of $1.0 million during the period
ended June 30, 2001 compared to $0.4 million during the period ended
June 30, 2000.
The Company is party to a loan agreement (the "Agreement") and
promissory note with the New Jersey Economic Development Authority(the
"Authority"). Under the Agreement, the Authority loaned the Company
$4,140,000 out of the proceeds from the issuance of the Authority's
Economic Growth Bonds (Greater Mercer County Composite Issue) 1996
Series E (the "Bonds") to be used in connection with specified capital
expenditures described in the Agreement. Interest is charged at the
variable rate of interest due on the Bonds (2.60% at June 30, 2001).
In connection with the Agreement, the Authority also entered into
a trust indenture with a bank to serve as trustee and tender agent for
the loan proceeds. Principal and interest are payable monthly to the
trustee in varying amounts through 2006.
The trust indenture is secured in part by the Agreement and by a
direct pay Letter of Credit facility in the face amount of $4,209,000,
of which $2,523,333 was outstanding at June 30, 2001. The Letter of
Credit facility contains financial and other restrictive covenants. The
Agreement, as currently amended (the "Amended Agreement"), contains
financial and other covenants including minimum tangible net worth, cash
flow coverage, current ratio and maximum liabilities to tangible net
worth (all as defined). The Amended Agreement further provides for
collateralization of the Letter of Credit facility by substantially all
of the Company's assets.
The Company has a $1.0 million unsecured demand note line of credit
agreement with a bank which expired July 31, 2001. Interest is payable
monthly at the bank's index rate (6.75% at June 30, 2001) less 0.25%.As
of June 30, 2001 and December 31, 2000, $982,256 and $0, respectively,
was outstanding under the line of credit. The line of credit was renewed
in the amount of $1.0 million and expires July 31, 2002. The note
provides for prepayments and advances as required to satisfy working
capital needs. The note is collateralized by substantially all of the
Company's assets.
Management believes that all cash flows from operations, coupled
with its bank credit facilities, are adequate for the Company to meet
its obligations.
RECENT ACCOUNTING PRONOUNCEMENTS
In July 2001, the Financial Accounting Standards Board issued FASB
Nos. 141 and 142 (SFAS 141 and SFAS 142), "Business Combinations" and
"Goodwill and Other Intangible Assets." SFAS 141 replaces APB 16 and
eliminates pooling-of-interests accounting prospectively. It also
provides guidance on purchase accounting related to the recognition of
intangible assets and accounting for negative goodwill. SFAS 142
changes the accounting for goodwill from an amortization method to an
impairment-only approach. Under SFAS 142, goodwill will be tested
annually and whenever events or circumstances occur indicating that
goodwill might be impaired. SFAS 141 and SFAS 142 are effective for all
business combinations completed after June 30, 2001. Upon adoption of
SFAS 142, amortization of goodwill recorded for business combinations
consummated prior to July 1, 2001 will cease, and intangible assets
acquired prior to July 1, 2001 that do not meet the criteria for
recognition under SFAS 141 will be reclassified to goodwill. Companies
are required to adopt SFAS 142 for fiscal years beginning after December
15, 2001. In connection with the adoption of SFAS 142, companies will
be required to perform a transitional goodwill impairment assessment.
The Company believes that the adoption of SFAS 142, beginning on January
1, 2002, will have no effect on the Company's consolidated financial
position or results of operations.
INFLATION AND ECONOMY
The Company will continue to maintain a policy of constantly
monitoring such factors as product demand and costs, and will adjust
prices as these factors and the economic conditions warrant.
The Company utilizes a significant amount of natural gas in the
manufacture of Homasote board. To ensure a consistently effective
supply of natural gas, the Company was party to a two-year purchase
agreement expiring October 31, 2000. Market conditions in the natural
gas industry caused the Company to incur a significant increase in the
cost of this energy resource of approximately 96% effective November 1,
2000. The Company notified its millboard and industrial customers of an
energy surcharge effective with shipments commencing November 27, 2000.
Effective May 1, 2001 the Company contracted with its energy suppliers
to ensure a constant supply of these resources and enable product
pricing to remain at the surcharge inclusion levels. A reduction in the
cost of natural gas and production efficiencies realized during the
second quarter are reflected in revised prices for most products
effective July 30, 2001.
The Company is engaged in a dispute with a former energy supplier
regarding the method of pricing. The Company is filing a declaratory
judgement action against the supplier in the Superior Court of the State
of New Jersey in an effort to define the pricing mechanism according to
the Company's interpretation. The proceedings are at a very preliminary
stage.
OTHER DEVELOPMENTS
The Company is a party to purchase agreement contracts to purchase
readily available wastepaper from two suppliers. Under the terms of the
contracts, the Company is required to make purchases at a minimum price
per ton, as defined, or at the prevailing market price, whichever is
greater. The contracts require minimum quantity purchases by the
Company which are generally below the Company's normal usage. Purchases
in the six months ended June 30, 2001 and 2000 aggregated approximately
$557,000 and $515,000, respectively. The contracts expire in 2009.
Also see the discussion under Inflation and Economy above regarding
a dispute with a former supplier of energy.
QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK
In the normal course of business, the Company is exposed to
fluctuations in interest rates and equity market risks as the Company
seeks debt and equity capital to sustain its operations.
The information below summarizes the Company's market risk
associated with its debt obligations as of June 30, 2001. Fair value
included herein has been estimated taking into consideration the nature
and term of the debt instrument and the prevailing economic and market
conditions at the balance sheet date. The table below presents
principal cash flows by year of maturity based on the terms of the debt.
The variable interest rate disclosed represents the rate at June 30,
2001. Changes in the prime interest rate during fiscal 2001 will have
a positive or negative effect on the Company's interest expense. The
Company had $3,505,589 of debt outstanding as of June 30, 2001. Further
information specific to the Company's debt is presented in note 4 to the
unaudited consolidated financial statements.
ESTIMATED CARRYING YEAR OF INTEREST
DESCRIPTION FAIR VALUE AMOUNT MATURITY RATE
DEMAND NOTE $ 982,256 $ 982,256 2001 6.5%
LONG TERM DEBT
INCLUDING CURRENT
INSTALLMENTS $2,523,333 $2,523,333 Various 2.6%
Part 2
OTHER INFORMATION
June 30, 2001
ITEM 9
EXHIBITS AND REPORTS ON FORM 8-K
(b) Reports on Form 8-K - There are no reports on Form
8-K filed for the six months ended June 30, 2001.
OTHER INFORMATION
Pursuant of 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.
HOMASOTE COMPANY
(Registrant)
James M. Reiser, Vice President
Date and Chief Financial Officer
(Signature)