-----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, VMZQWsidsD4Uj6XeeNOMilNUm3WUPZM1YvFIBXtnl+eWDnTxlopnLhdGnD3QdDZV w1kcM5vDqNZS/KQeiRZb8A== 0000950109-98-000272.txt : 19980122 0000950109-98-000272.hdr.sgml : 19980122 ACCESSION NUMBER: 0000950109-98-000272 CONFORMED SUBMISSION TYPE: 8-K PUBLIC DOCUMENT COUNT: 3 CONFORMED PERIOD OF REPORT: 19980121 ITEM INFORMATION: ITEM INFORMATION: FILED AS OF DATE: 19980121 SROS: NYSE FILER: COMPANY DATA: COMPANY CONFORMED NAME: UNISOURCE WORLDWIDE INC CENTRAL INDEX KEY: 0001027282 STANDARD INDUSTRIAL CLASSIFICATION: WHOLESALE-PAPER AND PAPER PRODUCTS [5110] IRS NUMBER: 135369500 STATE OF INCORPORATION: DE FISCAL YEAR END: 0930 FILING VALUES: FORM TYPE: 8-K SEC ACT: SEC FILE NUMBER: 001-14482 FILM NUMBER: 98510502 BUSINESS ADDRESS: STREET 1: P O BOX 3000-0935 CITY: BERWYN STATE: PA ZIP: 19312 BUSINESS PHONE: 6102964470 MAIL ADDRESS: STREET 1: P O BOX 3000-0935 CITY: BERWYN STATE: PA ZIP: 19312 8-K 1 FORM 8-K SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM 8-K Current Report Pursuant to Section 13 or 15(d) of The Securities Exchange Act of 1934 Date of Report (Date of earliest event reported) January 21, 1998 --------------------------- UNISOURCE WORLDWIDE, INC. - -------------------------------------------------------------------------------- (Exact name of registrant as specified in its charter) DELAWARE File No. 1-14482 13-5369500 - -------------------------------------------------------------------------------- (State or other (Commission (I.R.S. Employer jurisdiction File Number) Identification No.) of incorporation) P.O. Box 3000-0935, Berwyn, Pennsylvania 19312 - -------------------------------------------------------------------------------- (Address of principal executive offices) (Zip Code) Registrant's telephone number, including area code: (610) 296-4470 ------------------------ Not Applicable - -------------------------------------------------------------------------------- (Former name or former address, if changed since last report) Item 5. Other Events. ------------ On January 21, 1998, the Registrant issued two press releases, copies of which are attached as exhibits and incorporated herein by this reference as though fully set forth within this Item 5. Item 7. Financial Statements and Exhibits. --------------------------------- (c) Exhibits. -------- (99.1) Press Release dated January 21, 1998. (99.2) Press Release dated January 21, 1998. SIGNATURE Pursuant to 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 hereunto duly authorized. UNISOURCE WORLDWIDE, INC. (Registrant) By: /s/ Thomas A. Decker --------------------------- Thomas A. Decker Senior Vice President, General Counsel and Secretary Dated: January 21, 1998 Exhibit Index ------------- (99.1) Press Release dated January 21, 1998. (99.2) Press Release dated January 21, 1998. EX-99.1 2 PRESS RELEASE DATED 01/21/1998 Exhibit 99.1 News Release Contact Martha A. Buckley JoAnn P. Huston Director, Corporate Communications Manager, Investor Relations 610-722-3511 610-722-3513 UNISOURCE REPORTS FIRST QUARTER EARNINGS; Announces New IT Strategy, Grocery Charge Berwyn, Pennsylvania - January 21, 1998 -- Unisource Worldwide, Inc. (NYSE:UWW) reported today earnings of $0.21 per share, excluding special charges, for its first quarter of fiscal 1998, which ended December 31, 1997. Those results do not reflect a one-time charge of $1.60 per share for the write-off of capitalized development and related costs associated with the company's IT system, as well as a tax charge of $.08 per share on the sale of its US grocery supply business. Including those charges, the company reported a loss of $1.47 per share for the quarter. Revenues for the quarter were $1.9 billion, an 8.1% increase over the first quarter of fiscal 1997. Excluding special charges, operating income declined 18.5% to $36.7 million, and net income declined 29.1% to $14.3 million. "Revenue growth in our base business was very encouraging," noted president and chief operating officer, Charles F. White. "After adjusting for acquisitions and the sale of our grocery supply business, revenues were up 5.5%. Now we must focus on increasing gross profit and decreasing expenses." -more- Unisource said the charge for the write-off of NADS, its North American Distribution System, would be $168 million before taxes ($109 million after-tax), or $1.60 per share. The charge, which is primarily non-cash, is comprised of $155 million for writing off the deferred asset, along with $13 million for other related expenses. In October, Unisource announced an in-depth study under the direction of CFO Richard Bogan to evaluate the cost/benefit relationship of the company's IT system. "Our study has concluded that NADS would not cost-effectively meet our company's information technology needs," Bogan commented. "SAP was designed primarily for manufacturing applications and is more complex than is required for marketing and distribution operations. Also, the extensive and continuing customization required for our business environment makes it prohibitively expensive to install future upgrades and enhancements to the system." Unisource will instead focus on enhancing and consolidating its existing legacy systems. "Although we have many variations, our company is running on three basic operating systems in addition to SAP," Bogan said. "In fact, our primary system, SFD, currently runs nearly 60% of our business. We're confident we'll be able to make the necessary system enhancements and consolidations with a minimum of disruption to our operations," Bogan continued. "We'll begin by consolidating the various versions of SFD into one, 2000-compliant, standard SFD application. We expect to accomplish that by the middle of our fiscal year 1999. We'll continue in similar fashion with our other two major systems until we have an integrated, cost-effective IT solution," Bogan concluded. Unisource first quarter earnings also reflect a tax charge of $6 million or $.08 per share resulting from the October sale of its grocery supply business. The tax charge resulted from the fact that the company's basis for tax purposes was significantly lower than for book purposes. -more- In a separate release, Unisource announced that it intends to take a pre- tax charge in the range of $55 to $70 million in its second fiscal quarter to streamline its organizational structure. Ray B. Mundt, chairman and chief executive officer of Unisource, commented, "The combined steps we are taking will position our company for consistent, profitable growth in revenues, earnings and shareholder value for the future. Our initial goal is to reduce expenses to 80% of gross profits by the end of fiscal 1999. "Clearly, with all the change and realignment announced today, 1998 is a transitional year for Unisource. We'll begin to realize the full benefits of these changes in fiscal year 1999. Our earnings in 1998, excluding special charges, will be sufficient to comfortably cover our dividend, as we remain fully committed to our $.20 per share quarterly dividend to shareholders." Unisource Worldwide, Inc. (http://www.unisourcelink.com), headquartered in Berwyn, Pennsylvania, is the largest marketer and distributor of paper products and supply systems in North America. The company's fiscal 1997 revenues were more than $7 billion. This press release contains certain forward-looking statements which involve known and unknown risks, uncertainties or other factors not under the company's control which may cause the actual results, performance or achievements of the company to be materially different from the results, performance or other expectations implied by these forward-looking statements. ### This schedule presents the financial results of Unisource Worldwide, Inc. excluding a special charge in fiscal 1998 of $168 million, $109 million net of tax ($1.60 loss per share) related to the write-off of capitalized development and related costs associated with NADS; and a tax charge of $5.7 million ($0.08 loss per share) associated with the sale of a significant portion of its U.S.- based Grocery Supply Systems business. UNISOURCE WORLDWIDE, INC. FINANCIAL SUMMARY (in thousands, except earnings per share)
Three Months Ended December 31 ------------------------------------------------------- 1997 1996 % Change ------------- ----------- ------------ Revenues Printing and imaging $ 1,172,665 $ 1,097,562 6.8% Supply systems 696,470 630,971 10.4 - ------------------------------------------------------------------------------------------------------ 1,869,135 1,728,533 8.1 Costs and Expenses Cost of goods sold - printing and imaging 1,018,647 935,828 8.8 Cost of goods sold - supply systems 527,486 492,601 7.1 Selling and administrative 286,258 255,000 12.3 - ------------------------------------------------------------------------------------------------------ 1,832,391 1,683,429 8.8 - ------------------------------------------------------------------------------------------------------ Income from Operations 36,744 45,104 (18.5) Interest 12,123 10,361 - ------------------------------------------------------------------------------------------------------ Income Before Income Taxes 24,621 34,743 Provision for Income Taxes 10,334 14,592 - ------------------------------------------------------------------------------------------------------ Net Income $ 14,287 $ 20,151 ============= ============ Basic and Diluted Earnings Per Share $ 0.21 $ 0.30 (30.0) ============= ============ Shares Outstanding 68,567 67,576 ============= ============ Shares Outstanding - assuming dilution 69,066 ============= Operations Analysis: Gross profit %, printing and imaging 13.1% 14.7% Gross profit %, supply systems 24.3% 21.9% Total gross profit % 17.3% 17.4% SG&A as a % of revenues 15.3% 14.8% SG&A as a % of gross profit 88.6% 85.0% Operating income % of revenues 2.0% 2.6%
This information is provided for additional analysis and is not intended to be a presentation in accordance with generally accepted accounting principles. UNISOURCE WORLDWIDE, INC. FINANCIAL SUMMARY (in thousands, except earnings per share)
Three Months Ended December 31 ----------------------------------------------- 1997 1996 % Change ------------ ----------- ----------- Revenues Printing and imaging $ 1,172,665 $ 1,097,562 6.8% Supply systems 696,470 630,971 10.4 - ----------------------------------------------------------------------------------------------------------- 1,869,135 1,728,533 8.1 Costs and Expenses Cost of goods sold - printing and imaging 1,018,647 935,828 8.8 Cost of goods sold - supply systems 527,486 492,601 7.1 Selling and administrative 286,258 255,000 12.3 Special charge (1) 168,000 - - ----------------------------------------------------------------------------------------------------------- 2,000,391 1,683,429 - ----------------------------------------------------------------------------------------------------------- (Loss) Income from Operations (131,256) 45,104 Interest 12,123 10,361 - ----------------------------------------------------------------------------------------------------------- (Loss) Income Before Income Taxes (143,379) 34,743 (Benefit) Provision for Income Taxes (2) (42,766) 14,592 - ----------------------------------------------------------------------------------------------------------- Net (Loss) Income $ (100,613) $ 20,151 ============= =========== Basic and Diluted (Loss) Earnings Per Share (3) $ (1.47) $ 0.30 ============= =========== Shares Outstanding 68,567 67,576 ============= =========== Operations Analysis: Gross profit %, printing and imaging 13.1% 14.7% Gross profit %, supply systems 24.3% 21.9% Total gross profit % 17.3% 17.4% SG&A as a % of revenues 15.3* 14.8% SG&A as a % of gross profit 88.6* 85.0% Operating income % of revenues 2.0* 2.6%
* Excludes Special Charge. (1) Represents write-off of capitalized development and related costs associated with NADS. (2) Includes a $5.7 million tax charge related to non-deductible intangible assets associated with the sale of a significant portion of the Company's United States-based Grocery Supply Systems business. (3) The special charge in fiscal 1998 amounted to an after-tax loss of $109 million (($1.60) per share). The tax charge associated with the sale of Grocery Supply Systems amounted to a loss of ($0.08) per share. EX-99.2 3 PRESS RELEASE DATED 01/21/1998 Exhibit 99.2 News Release CONTACT: Martha A. Buckley JoAnn P. Huston Director, Corporate Communications Manager, Investor Relations 610-722-3511 610-722-3513 UNISOURCE ANNOUNCES PLAN TO STREAMLINE COMPANY Berwyn, Pennsylvania (January 21, 1998) -- Unisource Worldwide, Inc. (NYSE: UWW) announced today that it will take a number of significant steps to streamline the company's organization, accelerate profitable growth and improve its return to shareholders. The steps outlined include moving from a regional to a functionally-aligned organizational structure, closing or consolidating underperforming and overlapping locations, and implementing more consistent business practices across the company. As many as 50 locations and approximately 800 employees will be impacted by these moves. The company expects to take a pre-tax charge in the range of $55 million to $70 million in the second fiscal quarter, which ends March 31, 1998, to reflect the costs of the realignment. Ray B. Mundt, chairman and chief executive officer of Unisource, stated: "Our results during our first year as a public company did not meet our expectations. In fact, they have been a significant disappointment. As a result, we have reviewed our entire U.S. organization to determine what steps need to be taken to position this company for consistent and dependable growth in revenues, earnings and shareholder value for the future." -more- Unisource became a separate publicly traded company following a spin-off from Alco Standard Corporation in December 1996. The company's US operations are currently organized into 143 operating divisions and 426 locations, which report through five regional headquarters. "Too much of our capital is invested in assets which are not producing adequate returns for our shareholders," Mundt said. "Additionally, our current organizational structure and diverse business processes are too costly, and inhibit both efficient operation and effective communication." Charles F. White, president and chief operating officer of Unisource, added, "Customers today demand responsive, cost-effective solutions. Streamlining our company and moving to more consistent business processes will accelerate our ability to initiate change and leverage our size and scale, while delivering value to our customers and shareholders." The company will complete its plans and begin implementation by the end of March, 1998. As part of its first quarter earnings release today, the company also announced that it will not proceed with implementation of its SAP-based information system, and will focus instead on consolidating its existing information systems and bringing them into 2000 compliance. To reflect the write-off of the deferred asset and related costs, Unisource took a first-quarter pre-tax charge of $168 million, which is primarily non-cash. "Our management team is committed to grow this company and to provide an appropriate return on our investment, " Mundt stated. "Clearly, with all the change and realignment announced today, 1998 is a transitional year for Unisource. We'll begin to realize the full benefits of these changes in fiscal 1999. Our earnings in 1998, excluding special charges, will be sufficient to comfortably cover our dividend, and we are committed to our $.20 per share quarterly dividend to shareholders," Mundt concluded. -more- Unisource Worldwide, Inc. (http://www.unisourcelink.com), headquartered in Berwyn, Pennsylvania, is the largest marketer and distributor of paper products and supply systems in North America. The company's revenues for fiscal 1997 were more than $7 billion. This press release contains certain forward-looking statements which involve known and unknown risks, uncertainties or other factors not under the company's control which may cause the actual results, performance or achievements of the company to be materially different from the results, performance or other expectations implied by these forward-looking statements. ### -----END PRIVACY-ENHANCED MESSAGE-----