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U.S. SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, DC 20549
FORM 10-Q
(Mark One)
[x] Quarterly report under Section 13 or 15(d) of the Securities Exchange
Act of 1934 for the quarterly period ended June 30, 2004.
[ ] Transition report under Section 13 or 15(d) of the Exchange Act
For the transition period from ________ to ________
Commission file number 001-12127
EMPIRE RESOURCES, INC.
(Exact Name of Registrant as Specified in Its Charter)
Delaware 22-3136782
(State or Other Jurisdiction of (I.R.S. Employer
Incorporation or Organization) Identification No.)
One Parker Plaza
Fort Lee, NJ 07024
(Address of Principal Executive Offices)
201 944-2200
(Registrant's Telephone Number, Including Area Code)
Check whether the Registrant: (1) filed all reports required to be filed by
Section 13 or 15(d) of the Exchange Act during the past 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 whether the Registrant is an accelerated filer (as
defined in Rule 12b-2 of the Exchange Act).
Yes [ ] No [X]
APPLICABLE ONLY TO CORPORATE ISSUERS
State the number of shares outstanding of each of the issuer's classes of
common equity, as of the latest practicable date: 9,599,251 shares of common
stock outstanding as of July 30, 2004.
EMPIRE RESOURCES, INC.
FORM 10-Q FOR THE QUARTER ENDED JUNE 30, 2004
INDEX
PART I FINANCIAL INFORMATION
Item 1 Financial Statements Page
Condensed Consolidated Balance Sheets as of June 30, 2004 (unaudited)
and December 31, 2003 .................................................. 4
Condensed Consolidated Statements of Income for the Three and Six
Months Ended June 30, 2004 and 2003 (unaudited) ........................ 5
Condensed Consolidated Statements of Cash Flows for the Six Months
Ended June 30, 2004 and 2003 (unaudited) ............................... 6
Notes to Condensed Consolidated Financial Statements (unaudited) ....... 7
Item 2 Management's Discussion and Analysis of Financial Condition
and Results of Operations .............................................. 9
Item 3 Quantitative and Qualitative Disclosure of Market Risk ................. 12
Item 4 Controls and Procedures ................................................ 13
PART II OTHER INFORMATION ...................................................... 13
Item 1 Legal Proceedings ...................................................... 13
Item 2 Changes in Securities, Use of Proceeds and Issuer Repurchases of
Equity Securities ...................................................... 13
Item 3 Defaults Upon Senior Securities ........................................ 14
Item 4 Submission of Matters to a Vote of Security Holders .................... 14
Item 5 Other Information ...................................................... 14
Item 6 Exhibits and Reports on Form 8-K ....................................... 14
Signatures ............................................................. 15
2
Introduction
The condensed consolidated interim financial statements included herein
have been prepared by the Company, without audit, pursuant to the rules and
regulations of the Securities and Exchange Commission with respect to Form 10-Q.
Certain information and footnote disclosures normally included in financial
statements prepared in accordance with accounting principles generally accepted
in the United States of America have been omitted pursuant to such rules and
regulations. In the opinion of management, such financial statements reflect all
adjustments necessary for a fair presentation of the results for the interim
periods presented and to make such financial statements not misleading. The
results of operations of the Company for the six months ended June 30, 2004 are
not necessarily indicative of the results to be expected for the full year. It
is suggested that these interim financial statements be read in conjunction with
the consolidated financial statements and the notes thereto included in the
Company's Form 10-K for the year ended December 31, 2003.
3
EMPIRE RESOURCES, INC.
Condensed Consolidated Balance Sheets
In Thousands, except shares and per share amounts
June 30, December 31,
--------------------------
2004 2003
--------------------------
(Unaudited)
ASSETS
Current assets:
Cash $ 4,200 $ 1,477
Trade accounts receivable (net) 30,290 25,723
Inventories 31,563 42,048
Other current assets 1,440 5,100
------- --------
Total current assets 67,493 74,348
Furniture and equipment (less accumulated depreciation of $426 and $396) 168 156
------- --------
$67,661 $74,504
======= =======
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Notes payable - banks $28,500 $34,400
Trade accounts payable 19,646 16,895
Accrued expenses 2,452 7,328
Dividend payable 384 762
------- --------
Total current liabilities 50,982 59,385
------- --------
Commitments and contingencies
Stockholders' equity:
Preferred stock $.01 par value, 5,000,000 shares authorized;
none issued
Common stock $.01 par value, 20,000,000 shares authorized; 117 117
11,749,651 shares issued
Additional paid-in capital 10,827 10,803
Retained earnings 8,281 6,848
Accumulated other comprehensive income-- 11 14
cumulative translation adjustment
Treasury stock (2,150,400 and 2,221,400 shares) (2,557) (2,663)
------- --------
Total stockholders' equity 16,679 15,119
------- --------
$67,661 $74,504
======= =======
See notes to condensed consolidated financial statements 4
EMPIRE RESOURCES, INC.
Condensed Consolidated Statements of Income (Unaudited)
In thousands, except per share amounts
Three Months Ended Six Months Ended
June 30, June 30,
--------------------------- -----------------------------
2004 2003 2004 2003
--------------------------- -----------------------------
Net sales $ 51,605 46,873 $ 105,790 91,810
Cost of goods sold 47,782 43,556 98,131 85,297
--------- ---------- ---------- ----------
Gross profit 3,823 3,317 7,659 6,513
Selling, general and administrative expenses 1,829 1,489 3,520 3,011
--------- ---------- ---------- ----------
Operating income 1,994 1,828 4,139 3,502
Interest expense 274 249 573 475
--------- ---------- ---------- ----------
Income before income taxes 1,720 1,579 3,566 3,027
Income taxes 656 589 1,367 1,167
--------- ---------- ---------- ----------
Net income $ 1,064 990 $ 2,199 1,860
===== === ====== =====
Weighted average shares outstanding:
Basic 9,553 9,432 9,549 9,433
===== ===== ===== =====
Diluted 9,903 9,587 9,902 9,564
===== ===== ===== =====
Earnings per share:
Basic $0.11 $0.10 $0.23 $0.20
===== ===== ===== =====
Diluted $0.11 $0.10 $0.22 $0.19
===== ===== ===== =====
See notes to condensed consolidated financial statements 5
EMPIRE RESOURCES, INC.
Condensed Consolidated Statements of Cash Flows (Unaudited)
In thousands
Six Months Ended June 30,
--------------------------
2004 2003
--------------------------
Cash flows from operating activities:
Net income $ 2,199 $ 1,860
Adjustments to reconcile net income to net cash provided by
(used in) operating activities:
Depreciation and amortization 30 34
Translation adjustment (3) 4
Changes in:
Trade accounts receivable (4,567) (5,336)
Inventories 10,485 (4,220)
Other current assets 3,660 1,021
Trade accounts payable 2,751 2,930
Accrued expenses (4,876) (394)
Net cash provided by (used in) operating activities 9,679 (4,101)
------- -------
Cash flows used in investing activities:
Additions to fixed assets (42) (84)
------- -------
Cash flows from financing activities:
Net (repayments) proceeds from notes payable - banks (5,900) 5,000
Purchase of treasury stock 0 (14)
Proceeds - option exercised 130
Dividends Paid (1,144)
------- -------
Net cash (used in) provided by financing activities (6,914) 4,986
------- -------
Net increase in cash 2,723 801
Cash at beginning of period 1,477 1,072
------- -------
Cash at end of period $ 4,200 $ 1,873
======= =======
Supplemental disclosures of cash flow information:
Cash paid during the period for:
Interest $ 474 $ 568
Income taxes $ 1,371 $ 982
Non Cash Financing Activities:
Dividend Declared but not yet paid $ 384 $ 377
See notes to condensed consolidated financial statements 6
Notes to Condensed Consolidated Financial Statements (Unaudited)
- --------------------------------------------------------------------------------
1. The Company
Empire Resources, Inc. (the "Company") is engaged principally in the purchase,
sale and distribution of value added semi-finished aluminum products to a
diverse customer base located throughout North America and Australia. The
Company sells its products through its own marketing and sales personnel and
through its independent sales agents located in the U.S. who receive commissions
on sales. The Company purchases from several suppliers located throughout the
world; however, one supplier, Hulett Aluminium Ltd. ("Hulett") presently
accounts for approximately 62% of the Company's purchases. (See Note 3)
The condensed consolidated financial statements include the accounts of Empire
Resources, Inc. and its wholly-owned subsidiary, Empire Resources Pacific Ltd.,
which acts as a sales agent for the Company in Australia. All significant
intercompany transactions and accounts have been eliminated in consolidation.
2. Use of Estimates
The preparation of financial statements in accordance with accounting principles
generally accepted in the United States of America requires management to make
estimates and assumptions that affect the reported amount of assets and
liabilities and disclosure of contingent assets and liabilities at the date of
the financial statements and the reported amounts of income and expenses during
the reporting period. The principle estimate made relates to the allowance for
doubtful accounts. Actual results could differ from these estimates.
3. Concentrations
One major customer accounted for approximately 17% of the Company's consolidated
net sales for the period ended June 30, 2004 and 12% for the period ended June
30, 2003.
The Company's purchase of nonferrous metal is from a limited number of suppliers
located throughout the world. One supplier, Hulett Aluminium Ltd., accounted for
62% of total purchases during the period ended June 30, 2004 and three other
suppliers accounted for 25% of total purchases. The Company's loss of any of its
three largest suppliers or a material default by any such supplier in its
obligations to the Company would have at least a short-term material adverse
effect on the Company's business.
On October 16, 2003, Alcoa, Inc. filed a petition with the Department of
Commerce ("DOC") and the International Trade Commission ("ITC") for the
imposition of anti-dumping duties on imports of certain aluminum rolled plate
from Hulett, the Company's principal supplier. The petition relates to one
specific product produced by Hulett - Series 6000 Aluminum Rolled Plate. Hulett
produces numerous other products that the Company presently imports. On May 14,
2004 the DOC issued its preliminary determination of a dumping margin of 4.33%.
Hulett stated in a recent press release that this margin will not affect
Hulett's ability to continue to supply the product to the Company for
distribution in the U.S. market. The Company has been assured by Hulett that it
will continue to ship the product, pending the final results of the DOC
investigation and a final International Trade Commission ruling. In the event
that Hulett, in the
See notes to condensed consolidated financial statements 7
future, ceases supply of the product and if the Company is unable to secure an
alternative source of supply for the product at comparable volumes and prices,
the Company's future results of operations could be adversely affected.
4. Stock Options
The Company accounts for stock-based employee compensation under the
recognitions and measurement principles of Accounting Principles Board ("APB")
Opinion No. 25, "Accounting for Stock Issued to Employees", and related
interpretations. No stock-based employee compensation cost is reflected in net
income as all options granted under the Plan had an exercise price equal to the
market value of the underlying common stock on the date of grant. The Company
has adopted the disclosure-only provisions of Statement of Financial Accounting
Standards ("SFAS") No. 123, "Accounting for Stock-Based Compensation." The
following table illustrates the effect on net income and earnings per share if
the fair value based method had been applied to all awards.
For the Three Months Ended For the Six Months Ended
June 30, June 30,
(In thousands, except per (In thousands, except per
share amounts) share amounts)
-------------------------- -------------------------
2004 2003 2004 2003
---------- ---------- ----------- ---------
Reported net income $1,064 $990 $2,199 $1,860
Stock-based employee compensation determined
under the fair value based method net of taxes (18) (19) (18) (19)
Pro forma net income $1,046 $971 $2,181 $1,841
====== ==== ====== ======
Earnings per share:
As reported
Basic $.11 $.10 $.23 $.20
Diluted $.11 $.10 $.22 $.19
Pro-forma
Basic $.11 $.10 $.23 $.20
Diluted $.11 $.10 $.22 $.19
5. Inventories
Inventories, which consist of purchased semi-finished aluminum products, are
stated at the lower of cost or market. Cost is determined by the
specific-identification method. Inventory has generally been purchased for
specific customer orders.
6. Notes Payable-Banks
The Company operates under a $50,000,000 committed credit facility with three
commercial banks. This facility which was renewed on June 19, 2003, expires on
June 30, 2006. Borrowings by the Company under this line of credit are
collateralized by security interests in substantially all its assets. Under the
agreement, Empire is required to maintain working capital and net worth ratios
as defined by the loan agreement. As of June 30, 2004 and 2003 respectively, the
credit utilized under this facility amounted to $37.8 million and $37.6 million
See notes to condensed consolidated financial statements 8
(including approximately $9.3 million and $7.0 million of outstanding letters of
credit). Interest on borrowings is either (i) the federal funds rate, (ii) the
prime rate of JP Morgan Chase or (iii) LIBOR, plus the applicable margins
defined in the loan agreement.
7. Earnings Per Share
Three months ended Six months ended
June 30, June 30,
2004 2003 2004 2003
---- ---- ---- ----
Weighted average shares outstanding-basic 9,553 9,432 9,549 9,433
Dilutive effect of stock options 350 155 353 131
----- ----- ----- -----
Weighted average shares outstanding-diluted 9,903 9,587 9,902 9,564
===== ===== ===== =====
Basic earnings per share are based upon the Company's weighted average number of
common shares outstanding during each period. Diluted earnings per share are
based upon the weighted average number of common shares outstanding during each
period, assuming the issuance of common shares for all dilutive potential common
shares outstanding during the period.
8. Dividends
On June 14, 2004, the Board of Directors of the Company declared a cash dividend
of $0.04 per share to stockholders of record at the close of business on June
30, 2004. The dividend totaling $384,000 is included in accrued expenses at June
30, 2004 and was paid on July 19, 2004.
9. Commitments and Contingencies
Empire has contingent liabilities in the form of letters of credit to
certain of its suppliers, which at June 30, 2004 amounted to approximately $9.3
million.
The Company hedges metal pricing and foreign currency as it deems
appropriate for a portion of its purchase and sales contracts. There is a risk
of a counterparty default in fulfilling the hedge contract. Should there be a
counterparty default, the Company could be exposed to losses on the original
hedged contract.
Item 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
CONDITION AND RESULTS OF OPERATIONS
Forward Looking Statements
The discussions set forth below and elsewhere herein contain certain
statements that may be considered forward-looking statements under the Private
Securities Litigation Reform Act of 1995. The Company may make written or oral
forward-looking statements in other documents we file with the SEC, in our
annual reports to stockholders, in press releases and other written materials,
and in oral statements made by our officers, directors or employees.
See notes to condensed consolidated financial statements 9
You can identify forward-looking statements by the use of the words
"believe," "expect," "anticipate," "intend," estimate," "assume," "will,"
"should," and other expressions which predict or indicate future events or
trends and which do not relate to historical matters. You should not rely on
forward-looking statements, because they involve known and unknown risks,
uncertainties and other factors, some of which are beyond the control of the
Company. These risks, uncertainties and other factors may cause the actual
results, performance or achievements of the Company to be materially different
from the anticipated future results, performance or achievements expressed or
implied by the forward-looking statements.
Some of the factors that might cause these differences include the
following: changes in general, national or regional economic conditions; an act
of war or terrorism that disrupts international shipping; changes in laws,
regulations and tariffs, the imposition of anti-dumping duties on the products
imported, including those produced by Hulett Aluminium Ltd.; changes in the size
and nature of the Company's competition; changes in interest rates, foreign
currencies or spot prices of aluminum; loss of one or more foreign suppliers or
key executives; increased credit risk from customers; failure of the Company to
grow internally or by acquisition and to integrate acquired businesses; failure
to improve operating margins and efficiencies; and changes in the assumptions
used in making such forward-looking statements. You should carefully review all
of these factors, and you should be aware that there may be other factors that
could cause these differences, including, among others, the factors listed under
"Risk Factors," beginning on page 14 of our Annual Report on Form 10-K for the
year ended December 31, 2003. Readers should carefully review the factors
described under "Risk Factors" and should not place undue reliance on our
forward-looking statements.
These forward-looking statements were based on information, plans and
estimates at the date of this report, and we do not promise to update any
forward-looking statements to reflect changes in underlying assumptions or
factors, new information, future events or other changes.
General
Empire is a distributor of value added, semi-finished aluminum products.
Consequently, Empire's sales volume has been, and will continue to be, a
function of its ongoing ability to secure quality aluminum products from its
suppliers. While the Company maintains long-term supply relationships with
several foreign mills, one such supplier, Hulett Aluminium Ltd., ("Hulett")
presently accounts for more than 62% of the Company's purchases.
The Company's ability to succeed is driven in part by continued customer
satisfaction, supplier and customer loyalty and the ability to manage the
competitive economic environment through the expansion and upgrading of its
service to its suppliers and customers. This includes the ability to ship
material on a just in time basis from both private and public warehouses, and
the establishment of a proprietary on-line service modules for customers to
track their shipments. This bolstered the Company's commitment to service and
customer satisfaction. The Company has also used its excellent customer
relationships to leverage sales per employee. Because the Company has always
engaged in a strategy of developing long term relationships, it has been able to
build sales volume without a similar increase in SG&A. The stable customer and
supplier base has enabled the Company to increase its purchases from its
suppliers and to sell the majority of these quantities to its existing customer
base. While this does expose the Company to concentration risks, it has provided
the foundation of the Company's growth and performance.
See notes to condensed consolidated financial statements 10
Results of Operations for the six months ended June 30, 2004 (in thousands)
Net sales increased $13,980, or 15%, during the first six months of 2004
from $91,810 in 2003 to $105,790 in 2004, principally due to expanded shipments
from the Company's existing supplier base and an increase of approximately 8% in
U.S. aluminum metal pricing. Gross profit increased $1,146 or 18%, from $6,513
in 2003 to $7,659 in 2004. During this period gross profit as a percentage of
sales remained relatively constant.
The Company experienced approximately a 17% increase in selling, general
and administrative costs. Legal cost related to the Department of Commerce
anti-dumping case against one of the Company's principal suppliers was
responsible for a large increase in the Company's expenses.
The Company's increased sales led to a rise in net income of 18% from
$1,860 in 2003 to $2,199 in 2004. The Company's ability to increase its supply
has been and will continue to be the main factor for its increased revenues. The
Company successfully placed increased volumes primarily within its existing
customer base which in turn led to increased customer concentration. The
Company's top ten customers represented 46% of sales in 2004 as compared to 36%
during the same period in 2003.
Results of Operations for the three months ended June 30, 2004 (in thousands)
Net sales increased $4,732, or 10%, during the second quarter of 2004 from
$46,873 in 2003 to $51,605 in 2004, principally due to expanded shipments from
the Company's existing supplier base and an increase of approximately 2% in U.S.
aluminum metal pricing. Gross profit increased $506 or 15%, from $3,317 in 2003
to $3,823 in 2004. During this period gross profit as a percentage of sales
remained relatively constant.
The Company experienced approximately a 22% increase in selling, general
and administrative costs. Legal cost related to the Department of Commerce
anti-dumping case against one of the Company's principal suppliers was
responsible for a large increase in the Company's expenses as well as increases
in sales commission accruals attributable to increased sales volume.
The Company's increased sales led to a rise in net income of 7% from $990
for the three month period in 2003 to $1,064 for the three month period in 2004.
The Company's ability to increase its supply has been and will continue to be
the main factor for its increased revenues. The Company successfully placed
increased volumes primarily within its existing customer base which in turn led
to increased customer concentration. The Company's top ten customers represented
46% of sales in the three month period of 2004 as compared to 37% during the
same period in 2003.
Liquidity and Capital Resources (in thousands, except per share data)
Empire currently operates under a $50,000 revolving line of credit,
including a commitment to issue letters of credit, with three commercial banks.
The Company's borrowings under this line of credit are collateralized by
security interests in substantially all of Empire's assets. Empire is required
to maintain working capital and net worth ratios under this credit agreement.
This facility will expire on June 30, 2006.
See notes to condensed consolidated financial statements 11
On June 15, 2004 Empire Resources, Inc. announced that its Board of
Directors declared a cash dividend of $0.04 per share. The dividend totaling
$384 was payable on July 19, 2004 to shareholders of record at the close of
business on June 30, 2004. The Board of Directors will review its dividend
policy on a quarterly basis and a determination by the Board of Directors will
be made subject to the profitability and free cash flow and the other
requirements of the business.
Management believes that cash from operations, together with funds
available under its credit facility, will be sufficient to fund the cash
requirements relating to the Company's existing operations for the next twelve
months. Empire may require additional debt or equity financing in connection
with the future expansion of its operations.
Application of Critical Accounting Policies
The Company's condensed consolidated financial statements have been
prepared in accordance with accounting principles generally accepted in the
United States of America. Certain accounting policies have a significant impact
on amounts reported in the financial statements. A summary of those significant
accounting policies can be found in Note B to the Company's financial statements
included in the Company's 2003 Annual Report on Form 10-K. The Company has not
adopted any significant new accounting policies during the six months ended June
30, 2004.
Among the significant judgments made by management in the preparation of
the Company's financial statements are the determination of the allowance for
doubtful accounts and accruals for inventory claims. These adjustments are made
each quarter in the ordinary course of accounting.
As of June 30, 2004 the Company had $30.5 million in trade receivables.
Additionally, the Company had recorded an allowance for doubtful accounts of
$191,000. The allowance for doubtful accounts was not changed during the
quarter. The Company reports accounts receivable, net of an allowance for
doubtful accounts, to represent its estimate of the amount that ultimately will
be realized in cash. The Company reviews the adequacy of its allowance for
doubtful accounts on an ongoing basis, using historical collection trends, aging
of receivables, as well as review of specific accounts, and makes adjustments in
the allowance as it believes necessary. The Company maintains a credit insurance
policy on the majority of its customers. This policy generally has a
co-insurance provision and specific limits on each customer's receivables. The
co-pay may be increased in selected instances and the Company sometimes elects
to exceed these specific credit limits. Changes in economic conditions could
have an impact on the collection of existing receivable balances or future
allowance considerations.
Generally, the Company's exposure on claims for defective material is small
as the Company refers all claims on defects back to the mill supplying the
material. In the event that the Company does not believe the mill will honor a
claim, the Company will record an allowance for inventory adjustments.
Commitments and Contingencies
See notes to condensed consolidated financial statements 12
Empire has contingent liabilities in the form of letters of credit totaling
$9.3 million to certain of its suppliers. There have been no material changes to
the Company's commitments and contingencies from that disclosed in our Annual
Report on Form 10-K for the year ended December 31, 2003.
The Company hedges metal pricing and foreign currency as it deems
appropriate for a portion of its purchase and sales contracts. There is a risk
of a counterparty default in fulfilling the hedge contract. Should there be a
counterparty default, the Company could be exposed to losses on the original
hedged contract.
Item 3. QUANTITATIVE AND QUALITATIVE DISCLOSURE OF MARKET RISK
The Company uses financial instruments designated as fair value hedges to
manage its exposure to commodity price risk and foreign currency exchange risk
inherent in its operations. It is the Company's policy to hedge such risks, to
the extent practicable. The Company enters into high-grade aluminum futures
contracts to limit its gross margin exposure by hedging the metals content
element of firmly committed purchase and sales commitments. The Company also
enters into foreign exchange forward contracts to hedge its exposure related to
commitments to purchase or sell non-ferrous metals denominated in international
currencies. The Company records "mark-to-market" adjustments on these futures
and forward positions, and on the underlying firm purchase and sales commitments
which they hedge, and reflects the net gains and losses currently in earnings.
There have been no material changes to the Company's market risk from that
disclosed in our Annual Report on Form 10-K for the year ended December 31,
2003.
ITEM 4. CONTROLS AND PROCEDURES
As required by Rule 13a-15 under the Securities Exchange Act of 1934, as amended
(the "Exchange Act"), the Company's management conducted an evaluation with the
participation of the Company's Chief Executive Officer and Chief Financial
Officer, regarding the effectiveness of the Company's disclosure controls and
procedures, as of the end of the last fiscal quarter. In designing and
evaluating the Company's disclosure controls and procedures, the Company and
its management recognize that any controls and procedures, no matter how well
designed and operated, can provide only a reasonable assurance of achieving
the desired control objectives, and management necessarily was required to
apply its judgment in evaluating and implementing possible controls and
procedures. Based upon that evaluation, the Chief Executive Officer and
Chief Financial Officer concluded that they believe the Company's disclosure
controls and procedures are reasonably effective to ensure that information
required to be disclosed by the Company in the reports it files or submits under
the Exchange Act is recorded, processed, summarized and reported within the time
periods specified in the Securities and Exchange Commission's rules and forms.
We intend to continue to review and document our disclosure controls and
procedures, including our internal controls and procedures for financial
reporting, and we may from time to time make changes to the disclosure controls
and procedures to enhance their effectiveness and to ensure that our systems
evolve with our business.
See notes to condensed consolidated financial statements 13
There was no change in our internal control over financial reporting that
occurred during the period covered by this Quarterly Report on Form 10-Q that
has materially affected, or is reasonably likely to materially affect, our
internal control over financial reporting.
PART II OTHER INFORMATION
Item 1. Legal Proceedings.
The Company is party from time to time to litigation incidental to its business.
The Company does not presently believe that any such litigation would have a
material adverse effect on its results of operation or financial condition.
Item 2. Changes in Securities, Use of Proceeds and Issuer Repurchases of Equity
Securities.
None.
Item 3. Defaults upon Senior Securities.
None.
Item 4. Submission of Matters to a Vote of Security Holders.
(a) The Company held its annual meeting of stockholders on June 14, 2004.
(b) All of the current directors, being William Spier, Nathan Kahn, Sandra Kahn,
Harvey Wrubel, Jack Bendheim, Barry L. Eisenberg, Peter J. Howard, Nathan
Mazurek and Morris J. Smith, were re-elected as directors at the annual meeting.
(c) At the annual meeting, two matters were voted upon by shareholders. The
results were as follows:
Proposal 1 -- Election of Directors
WILLIAM SPIER
NATHAN KAHN
SANDRA KAHN
HARVEY WRUBEL
JACK BENDHEIM
BARRY L. EISENBERG
PETER J. HOWARD
NATHAN MAZUREK
MORRIS J. SMITH
For all of the above: 9,230,363
Against all of the above: 11,388
Proposal 2 - Ratification of Eisner, LLP as independent accountants:
See notes to condensed consolidated financial statements 14
For: 9,221,839
Against: 14,532
Withheld: 5,380
Item 5. Other Information.
On June 15, 2004, the Company issued a press release to announce a dividend for
the second quarter of 2004 for stockholders of record on June 30, 2004. The
dividend was paid on July 19, 2004.
Item 6. Exhibits and Reports on Form 8-K.
(a) Exhibits
The following are included as exhibits to this report:
Exhibit No. Description
31.1 Certification of Chief Executive Officer pursuant to Rule 13a-14(a) of the
Securities Exchange Act of 1934*
31.2 Certification of Chief Financial Officer pursuant to Rule 13a-14(a) of the
Securities Exchange Act of 1934*
32.1 Certifications of Chief Executive Officer and Chief Financial Officer
pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the
Sarbanes-Oxley Act of 2002*
- -------------------------
* Filed herewith
(b) Reports on Form 8-K
The Company filed a current report on Form 8-K dated May 11, 2004 disclosing the
Company's May 11th press release related to its announcement of first quarter
operating results.
SIGNATURES
In accordance with the requirements of the Securities Exchange Act of 1934,
the registrant caused this report to be signed on its behalf by the undersigned
hereunto duly authorized.
EMPIRE RESOURCES, INC.
By: /s/ Sandra Kahn
-----------------------------
Sandra Kahn
Chief Financial Officer
(signing both on behalf of the registrant and in her capacity as Principal
Financial and Principal Accounting Officer)
Dated: August 16, 2004
See notes to condensed consolidated financial statements 15