-----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, Hk3WArLzjHX8PbnFYdxCOEstW/Omb3TYBPpUeaaodcdNaLiFB/08tzR6i2Y7znoY /ajn8dyNMHUsFpcmJikjiQ== 0001036050-98-000715.txt : 19980430 0001036050-98-000715.hdr.sgml : 19980430 ACCESSION NUMBER: 0001036050-98-000715 CONFORMED SUBMISSION TYPE: 8-K PUBLIC DOCUMENT COUNT: 2 CONFORMED PERIOD OF REPORT: 19980428 ITEM INFORMATION: ITEM INFORMATION: FILED AS OF DATE: 19980428 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: 98603142 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) April 28, 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) 1100 Cassatt Road, Berwyn, Pennsylvania 19312 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, FORMER ADDRESS, AND FORMER FISCAL YEAR, IF CHANGED SINCE LAST REPORT) Item 5. Other Events. ------------ On April 28, 1998, the Registrant issued the attached press release. Item 7. Financial Statements and Exhibits. --------------------------------- (c) Exhibits. -------- (99) Press Release dated April 28, 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: April 28, 1998 Exhibit Index ------------- (99) Press Release dated April 28, 1998. EX-99 2 EXHIBIT 99 NEWS RELEASE Contact Martha A. Buckley JoAnn P. Huston Director, Corporate Communications Manager, Investor Relations 610-722-3511 610-722-3513 UNISOURCE REPORTS SECOND QUARTER RESULTS BERWYN, PENNSYLVANIA APRIL 28, 1998 -- Unisource Worldwide, Inc. (NYSE:UWW) reported today earnings per share of $.10 for its second fiscal quarter, which ended March 31, 1998. As anticipated, this performance was substantially below EPS of $.16 for the second quarter of fiscal 1997. Revenues for the quarter grew 8.9 percent to $1.9 billion, while operating income declined by 16.5 percent to $24.2 million. Net income was $6.7 million, a 36.6 percent decrease from the same quarter last year. "Revenues grew through a combination of pricing, volume and contributions from acquired companies," commented Ray B. Mundt, chairman and chief executive officer. "However, our bottom-line performance affirms our decision to significantly restructure this organization. Expenses excluding acquisitions remain stable, but declining gross trading margins continue to impact earnings. The restructuring we are planning will bring our expense to gross profit ratio into appropriate balance by the fourth quarter of fiscal 1999, through a combination of increased gross trading margins and decreased expenses," Mundt noted. -more- For the six months ended March 31, 1998, revenues increased approximately 8.5 percent to $3.7 billion. Operating income was $60.9 million, down 17.7 percent from the same period last year, while net income decreased 31.7 percent to $21 million. Basic earnings were $.31 per share and diluted earnings were $.30 per share, 32.6 and 33.3 percent, respectively, below earnings for the first six months of fiscal 1997. All six-month comparisons exclude special charges of $1.68 per share, related to the company's former IT initiative and the sale of its grocery business, taken in the first quarter of fiscal 1998. Including those charges, the company reported a loss of $1.37 per share for the six-month period. "The planning stage of our restructuring program continues to move forward," Mundt said. "We are already taking action on some of our closures and consolidations, although many of the larger facility decisions will depend on the findings of the Coopers & Lybrand study." The study referred to by Mundt is due to the company by the end of June. "We will have our restructuring plan in place by the end of July and will take the related charge in the second half of our fiscal year," Mundt noted. "We expect to begin to realize the benefits of our restructuring by the middle of fiscal 1999," Mundt stated, "and we remain 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, with annual revenues in excess of $7 billion. Statements made in this press release with respect to the increase in gross trading margins, reduction of expenses, the development and implementation of the company's restructuring plan, the benefits realized from such restructuring, and the company's future performance are forward-looking statements within the meaning of Section 27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934. These statements represent the company's -more- reasonable judgment with respect to future events and are subject to risks and uncertainties which could cause actual results or circumstances to differ materially. Such risks and uncertainties include delays or difficulties in developing and implementing the plan of restructuring and the effect of such plan on the company's future performance, as well as changes in pulp and paper prices and market conditions within the company's businesses. For further detail and information concerning such risks and uncertainties, please consult Part I, Item 1 of the company's annual report on Form 10-K for the fiscal year ended September 30, 1997, which is on file with the Securities and Exchange Commission. # # # UNISOURCE WORLDWIDE, INC. FINANCIAL SUMMARY (in thousands, except earnings per share) Three Months Ended March 31 1998 1997 % Change Revenues Printing and imaging $ 1,220,247 $ 1,127,175 8.3 % Supply systems 647,673 588,733 10.0 1,867,920 1,715,908 8.9 Costs and Expenses Cost of goods sold - printing and imaging 1,063,979 965,905 10.2 Cost of goods sold - supply systems 490,887 458,024 7.2 Selling and administrative 288,880 263,040 9.8 - ----------------------------------------------------------- 1,843,746 1,686,969 - ----------------------------------------------------------- Income from Operations 24,174 28,939 (16.5) Interest 12,620 10,030 - ----------------------------------------------------------- Income Before Income Taxes 11,554 18,909 (38.9) Provision for Income Taxes 4,867 8,361 - ----------------------------------------------------------- Net Income $ 6,687 $ 10,548 (36.6) ========= ========= Basic Earnings Per Share $ 0.10 $ 0.16 (37.5) ========= ========= Diluted Earnings Per Share $ 0.10 $ 0.16 (37.5) ========= ========= Basic Shares Outstanding 68,611 67,051 ========= ========= Diluted Shares Outstanding 68,758 67,957 ========= ========= Operations Analysis: Gross profit %, printing and 12.8% 14.3% Gross profit %, supply system 24.2% 22.2% Total gross profit % 16.8% 17.0% SG&A as a % of revenues 15.5% 15.3% SG&A as a % of gross profit 92.3% 90.1% Operating income % of revenue 1.3% 1.7% UNISOURCE WORLDWIDE, INC. FINANCIAL SUMMARY (in thousands, except earnings per share) Six Months Ended March 31 1998 1997 % Change Revenues Printing and imaging $ 2,392,912 $ 2,224,737 7.6 % Supply systems 1,344,143 1,219,704 10.2 - --------------------------------------------------------------------- 3,737,055 3,444,441 8.5 Costs and Expenses Cost of goods sold - printing and imaging 2,082,626 1,901,733 9.5 Cost of goods sold - supply systems 1,018,373 950,625 7.1 Selling and administrative 575,138 518,040 11.0 Special charge (1) 168,000 - - --------------------------------------------------------------------- 3,844,137 3,370,398 - --------------------------------------------------------------------- (Loss) Income from Operations (107,082) 74,043 Interest 24,743 20,391 - --------------------------------------------------------------------- (Loss) Income Before Income Taxes (131,825) 53,652 (Benefit) Provision for Income Taxes (2) (37,899) 22,953 - --------------------------------------------------------------------- Net (Loss) Income $ (93,926) $ 30,699 ========= ========= Basic (Loss) Earnings Per Share (3) $ (1.37) $ 0.46 ========= ========= Diluted (Loss) Earnings Per Share (3) $ (1.37) $ 0.45 ========= ========= Basic Shares Outstanding 68,578 67,022 ========= ========= Diluted Shares Outstanding 68,578 (4) 67,813 ========= ========= Operations Analysis: Gross profit %, printing and imaging 13.0% 14.5% Gross profit %, supply systems 24.2% 22.1% Total gross profit % 17.0% 17.2% SG&A as a % of revenues 15.4%* 15.0% SG&A as a % of gross profit 90.4%* 87.5% Operating income % of revenues 1.6%* 2.1% * 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 the Grocery Supply Systems amounted to a loss of ($0.08) per share. (4) Diluted shares outstanding are not adjusted for stock options due to the antidilutive effect on the loss per share. 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)
Six Months Ended March 31 ------------------------------------------ 1998 1997 % Change ------------- ------------ ---------- Revenues Printing and imaging $ 2,392,912 $ 2,224,737 7.6 % Supply systems 1,344,143 1,219,704 10.2 - --------------------------------------------------------------------- 3,737,055 3,444,441 8.5 Costs and Expenses Cost of goods sold - printing and imaging 2,082,626 1,901,733 9.5 Cost of goods sold - supply systems 1,018,373 950,625 7.1 Selling and administrative 575,138 518,040 11.0 - --------------------------------------------------------------------- 3,676,137 3,370,398 - --------------------------------------------------------------------- Income from Operations 60,918 74,043 (17.7) Interest 24,743 20,391 - --------------------------------------------------------------------- Income Before Income Taxes 36,175 53,652 Provision for Income Taxes 15,194 22,953 - --------------------------------------------------------------------- Net Income $ 20,981 $ 30,699 (31.7) =========== =========== Basic Earnings Per Share $ 0.31 $ 0.46 (32.6) =========== =========== Diluted Earnings Per Share $ 0.30 $ 0.45 (33.3) =========== =========== Basic Shares Outstanding 68,578 67,022 =========== =========== Diluted Shares Outstanding 68,901 67,813 =========== =========== Operations Analysis: Gross profit %, printing and imaging 13.0% 14.5% Gross profit %, supply systems 24.2% 22.1% Total gross profit % 17.0% 17.2% SG&A as a % of revenues 15.4% 15.0% SG&A as a % of gross profit 90.4% 87.5% Operating income % of revenues 1.6% 2.1%
This information is provided for additional analysis and is not intended to be a presentation in accordance with generally accepted accounting principles. 7 UNISOURCE WORLDWIDE, INC. CONDENSED CONSOLIDATED BALANCE SHEETS (In thousands, except par values and shares)
MARCH 31, SEPTEMBER 30, ASSETS 1998 1997 - ------ --------- ------------- CURRENT ASSETS CASH $ 52,330 $ 45,384 ACCOUNTS RECEIVABLE, NET 663,313 882,360 INVENTORIES 483,962 495,330 PREPAID EXPENSES AND DEFERRED TAXES 54,751 49,875 ---------- ---------- TOTAL CURRENT ASSETS 1,254,356 1,472,949 ---------- ---------- LONG-TERM RECEIVABLES 6,004 7,790 PROPERTY AND EQUIPMENT, AT COST 442,625 434,762 LESS ACCUMULATED DEPRECIATION 200,658 188,336 ---------- ---------- 241,967 246,426 ---------- ---------- GOODWILL 661,489 668,575 DEFERRED COSTS AND OTHER ASSETS 30,012 163,092 ---------- ---------- $2,193,828 $2,558,832 ========== ========== LIABILITIES AND SHAREHOLDERS' EQUITY - ------------------------------------ CURRENT LIABILITIES CURRENT PORTION OF LONG-TERM DEBT $ 1,128 $ 638 NOTES PAYABLE 19,749 144,882 TRADE ACCOUNTS PAYABLE 466,180 498,503 ACCRUED SALARIES, WAGES AND COMMISSIONS 27,328 33,906 RESTRUCTURING COSTS 5,884 8,172 OTHER ACCRUED EXPENSES 97,254 119,431 ---------- ---------- TOTAL CURRENT LIABILITIES 617,523 805,532 ---------- ---------- LONG-TERM DEBT OTHER LIABILITIES 656,682 661,350 DEFERRED TAXES 16,016 61,082 RESTRUCTURING COSTS 7,533 8,383 OTHER LONG-TERM LIABILITIES 39,165 38,100 ---------- ---------- 62,714 107,565 ---------- ---------- SHAREHOLDERS' EQUITY COMMON STOCK, PAR VALUE $.001, AUTHORIZED - 250,000,000 SHARES, ISSUED AND OUTSTANDING; 3/31/98 - 69,132,689 SHARES; 9/30/97 - 68,792,842 SHARES 69 69 ADDITIONAL PAID IN CAPITAL 824,202 820,213 UNEARNED COMPENSATION (8,927) (5,845) RETAINED EARNINGS 78,275 199,828 FOREIGN CURRENCY TRANSLATION ADJUSTMENTS (36,706) (29,320) COST OF COMMON SHARES IN TREASURY; 3/31/98 - 268 SHARES; 9/30/97 - 32,027 SHARES (4) (560) ---------- ---------- 856,909 984,385 ---------- ---------- $2,193,828 $2,558,832 ========== ==========
UNISOURCE WORLDWIDE, INC. CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (in thousands) Three Months Ended March 31, ------------------------------- 1998 1997 ------------------------------- Operating Activities Net income $ 6,687 $ 10,548 Additions (deductions) to reconcile net income to net cash provided by operating activities: Depreciation 9,024 7,741 Amortization 5,436 3,795 Provision for losses on accounts receivable 3,390 5,821 Payments related to restructuring costs and special charge (7,914) (2,578) Changes in operating assets and liabilities, net of effects from acquisitions: Increase in accounts receivable (3,398) (14,538) Decrease in inventories 38,103 34,932 (Increase) decrease in prepaid expenses (2,695) 2,968 Increase in accounts payable and accrued expenses 16,655 2,718 Miscellaneous 3,558 (1,264) ----------- -------------- Net cash provided by operating activities 68,846 50,143 ----------- -------------- Investing Activities Proceeds from the sale of property and equipment 347 2,184 Cost of companies acquired, net of cash acquired (10,981) (13,511) Expenditures for property and equipment (11,113) (5,425) Collection of notes receivable - 1,855 Deferred cost expenditures (510) (7,975) ----------- -------------- Net cash used in investing activities (22,257) (22,872) ----------- -------------- Financing Activities Debt repayments (30,805) (17,109) Proceeds (repayments) from credit facility borrowings, net 6,484 (2,890) Proceeds from IKON - 296 Payment of dividends (13,822) (13,418) Other 1,643 - ----------- -------------- Net cash used in financing activities (36,500) (33,121) ----------- -------------- Net increase (decrease) in cash 10,089 (5,850) Cash at beginning of period 42,241 14,596 ----------- -------------- Cash at end of period $ 52,330 $ 8,746 ========== =============
UNISOURCE WORLDWIDE, INC. CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (In thousands)
SIX MONTHS ENDED MARCH 31, -------------------------- 1998 1997 -------------------------- OPERATING ACTIVITIES NET (LOSS) INCOME $ (93,926) $ 30,699 ADDITIONS (DEDUCTIONS) TO RECONCILE NET INCOME TO NET CASH PROVIDED BY OPERATING ACTIVITIES: DEPRECIATION 17,634 15,081 AMORTIZATION 10,951 8,196 PROVISION FOR LOSSES ON ACCOUNTS RECEIVABLE 6,249 9,846 SPECIAL CHARGE 168,000 - DEFERRED TAX BENEFIT (45,500) - LOSS ON DIVESTITURE 5,700 - PAYMENTS RELATED TO RESTRUCTURING COSTS AND SPECIAL CHARGE (9,632) (8,431) CHANGES IN OPERATING ASSETS AND LIABILITIES, NET OF EFFECTS FROM ACQUISITIONS AND DIVESTITURES: SALE OF ACCOUNTS RECEIVABLE 150,000 - OTHER CHANGES IN ACCOUNTS RECEIVABLE 48,325 29,031 (INCREASE) DECREASE IN INVENTORIES (16,264) 8,178 (INCREASE) DECREASE IN PREPAID EXPENSES (6,064) 4,928 DECREASE IN ACCOUNTS PAYABLE AND ACCRUED EXPENSES (48,437) (22,197) MISCELLANEOUS (1,770) (1,012) -------- -------- NET CASH PROVIDED BY OPERATING ACTIVITIES 185,266 74,319 -------- -------- INVESTING ACTIVITIES COST OF COMPANIES ACQUIRED, NET OF CASH ACQUIRED (46,079) (16,766) PROCEEDS FROM DIVESTITURE 48,126 - PROCEEDS FROM THE SALE OF PROPERTY AND EQUIPMENT 939 5,814 COLLECTION OF NOTES RECEIVABLE - 21,105 EXPENDITURES FOR PROPERTY AND EQUIPMENT (19,667) (13,103) DEFERRED COST EXPENDITURES (11,673) (25,645) -------- -------- NET CASH USED IN INVESTING ACTIVITIES (28,354) (28,595) -------- -------- FINANCING ACTIVITIES PROCEEDS FROM BORROWING UNDER CREDIT FACILITY, NET 23,257 586,110 DEBT REPAYMENTS (147,059) (38,748) REPAYMENTS TO IKON - (553,183) PAYMENT OF DIVIDENDS (27,627) (13,418) OTHER 1,463 - -------- -------- NET CASH USED IN FINANCING ACTIVITIES (149,966) (19,239) -------- -------- NET INCREASE IN CASH 6,946 26,485 CASH AT BEGINNING OF YEAR 45,384 14,596 -------- -------- CASH AT END OF PERIOD $ 52,330 $ 41,081 ======== ========
SEE NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS. ### -----END PRIVACY-ENHANCED MESSAGE-----