-----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, Aj2O7JuIL7jOcnlOrAjR+PDdFs5tYsb/8xT1+AA2BOp5b2YO8GWIkUjM6oiS1m22 Kxzm1S387XaJ2SnMdcPXwg== 0000950130-95-002342.txt : 19951118 0000950130-95-002342.hdr.sgml : 19951118 ACCESSION NUMBER: 0000950130-95-002342 CONFORMED SUBMISSION TYPE: 10-Q PUBLIC DOCUMENT COUNT: 2 CONFORMED PERIOD OF REPORT: 19950930 FILED AS OF DATE: 19951109 SROS: NYSE FILER: COMPANY DATA: COMPANY CONFORMED NAME: CONTINENTAL CAN CO INC /DE/ CENTRAL INDEX KEY: 0000103392 STANDARD INDUSTRIAL CLASSIFICATION: METAL CANS [3411] IRS NUMBER: 112228114 STATE OF INCORPORATION: DE FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 10-Q SEC ACT: 1934 Act SEC FILE NUMBER: 001-06690 FILM NUMBER: 95588568 BUSINESS ADDRESS: STREET 1: ONE AERIAL WAY CITY: SYOSSET STATE: NY ZIP: 11791 BUSINESS PHONE: 5168224940 MAIL ADDRESS: STREET 1: ONE AERIAL WAY CITY: SYOSSET STATE: NY ZIP: 11791 FORMER COMPANY: FORMER CONFORMED NAME: LOCKWOOD KESSLER & BARTLETT INC DATE OF NAME CHANGE: 19710815 10-Q 1 FORM 10-Q UNITED STATES SECURITIES AND EXCHANGE COMMISSION WASHINGTON, D.C. 20549 FORM 10-Q --------- (MARK ONE) X QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(D) ------- OF THE SECURITIES EXCHANGE ACT OF 1934 For the period ended SEPTEMBER 30, 1995 ----------------------------- OR 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: 1-6690 ------ CONTINENTAL CAN COMPANY, INC. ------------------------------------------------ (Exact name of registrant as specified in its charter) DELAWARE 11-2228114 -------------------------- ------------------------------------ (State of Incorporation) (I.R.S. Employer Identification No.) One Aerial Way, Syosset, New York 11791 - -------------------------------------------------- (Address of principal executive offices) Zip Code (516) 822-4940 ---------------------------------------------- (Registrant's telephone number, including area code) Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceeding 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 ------- ------- The number of shares outstanding of the registrant's Common Stock ($.25 par value) as of November 7, 1995 is 3,196,368. FORM 10-Q PART I FINANCIAL INFORMATION ITEM 1. FINANCIAL STATEMENTS - ----------------------------- Consolidated Balance Sheets as of September 30, 1995 and December 31, 1994 and September 30, 1994. Consolidated Statements of Earnings for the Three Months Ended September 30, 1995 and 1994 Consolidated Statements of Earnings for the Nine Months Ended September 30, 1995 and 1994 Consolidated Statements of Cash Flows for the Nine Months Ended September 30, 1995 and 1994 Notes to Consolidated Financial Statements 2
CONTINENTAL CAN COMPANY, INC. AND SUBSIDIARIES CONSOLIDATED BALANCE SHEETS SEPTEMBER 30, 1995 AND 1994 AND DECEMBER 31, 1994 (UNAUDITED) (In thousands) SEPTEMBER DEC. 31, SEPTEMBER 30, 30, 1995 1994 1994 --------------------------------------- ASSETS: - ------- Current Assets: Cash and cash equivalents $ 13,208 $ 8,776 $ 18,999 Investments - 292 294 Accounts Receivable: Trade accounts 130,678 102,255 113,626 Other 15,258 15,964 9,637 Less allowance for doubtful accounts (5,815) (5,316) (4,552) -------------------------------------- Accounts receivable, net 140,121 112,903 118,711 Inventories 97,865 82,432 81,085 Prepaid expenses and other current 4,615 4,700 1,558 assets --------------------------------------- TOTAL CURRENT ASSETS 255,809 209,103 220,647 --------------------------------------- Property, plant and equipment, at cost: Land, building and improvements 51,507 48,750 47,864 Manufacturing machinery and equipment 235,302 230,365 217,632 Furniture, fixtures and equipment 9,652 8,536 8,508 Construction in progress 37,898 9,505 17,867 --------------------------------------- 334,359 297,156 291,871 Less accumulated depreciation and 141,583 116,786 110,499 amortization --------------------------------------- Net property, plant and equipment 192,776 180,370 181,372 Goodwill, net of accumulated 14,556 13,997 14,191 amortization Other assets 18,691 20,115 21,938 --------------------------------------- TOTAL ASSETS $481,832 $423,585 $438,148 ======================================= See accompanying notes to consolidated financial statements.
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CONTINENTAL CAN COMPANY, INC. AND SUBSIDIARIES CONSOLIDATED BALANCE SHEETS (CONTINUED) SEPTEMBER 30, 1995 AND 1994 AND DECEMBER 31, 1994 (UNAUDITED) (In thousands) SEPTEMBER DEC. 31, SEPTEMBER 30, 30, 1995 1994 1994 --------------------------------------- LIABILITIES AND STOCKHOLDER'S EQUITY: - ---------------------------------------- Current Liabilities: Short term borrowings $ 41,684 $ 21,855 $ 16,204 Accounts payable - trade 83,412 60,540 60,453 Accrued liabilities: Employee compensation and benefits 21,413 19,072 23,561 Other accrued expenses 23,567 16,143 22,150 Current installments of long term debt and obligations under capital leases 11,133 13,043 13,323 Income taxes payable 1,448 1,160 2,554 Other current liabilities 9,814 5,942 4,880 --------------------------------------- TOTAL CURRENT LIABILITIES 192,471 137,755 143,125 Long term debt, excluding current 122,778 128,363 133,097 installments Obligations under capital leases, excluding current installments 14,012 13,998 13,729 Deferred income taxes 3,763 3,747 3,083 Other 42,756 36,285 37,497 --------------------------------------- TOTAL LIABILITIES 375,780 320,148 330,531 Minority interest 29,899 32,741 35,718 STOCKHOLDERS' EQUITY: - ---------------------------------------- Capital stock: First preferred stock, cumulative $25 par value. Authorized 250,000 shares; no - - - shares issued. Second preferred stock, 4% non-cumulative, $100 par value. Authorized 1,535 shares; no shares issued. - - - Common stock, $.25 par value. Authorized 20,000,000 shares; Outstanding 3,196,368 shares in 1995, 3,151,157 shares in Dec., 1994 and 3,151,157 799 788 788 shares in September, 1994. --------------------------------------- 799 788 788 Additional paid-in capital 43,867 42,872 42,872 Retained earnings 26,340 26,187 26,032 --------------------------------------- 71,006 69,847 69,692 Cumulative foreign currency translation 5,147 849 2,207 adjustment --------------------------------------- TOTAL STOCKHOLDERS' EQUITY 76,153 70,696 71,899 --------------------------------------- TOTAL LIABILITIES AND $481,832 $423,585 $438,148 STOCKHOLDERS' EQUITY ======================================= See accompanying notes to consolidated financial statements.
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CONTINENTAL CAN COMPANY, INC. AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF EARNINGS THREE MONTHS ENDED SEPTEMBER 30, 1995 AND 1994 (UNAUDITED) (In thousands, except per share data) 1995 1994 --------------------- Sales $171,024 $154,492 Cost of sales 143,384 126,489 --------------------- Gross profit 27,640 28,003 Restructuring charges 5,003 - Selling, general and administrative 19,908 17,148 expenses --------------------- OPERATING INCOME 2,729 10,855 Other income (expense): Interest expense, net (5,435) (4,617) Foreign currency exchange gain (loss) 109 (131) Other - net (44) (221) --------------------- NET OTHER EXPENSE (5,370) (4,969) Income (loss) before provision for income taxes and minority interest (2,641) 5,886 Provision for income taxes 479 2,308 --------------------- Income (loss) before minority interest (3,120) 3,578 Minority interest (1,248) 476 --------------------- NET INCOME (LOSS) $ (1,872) $ 3,102 ===================== NET EARNINGS (LOSS) PER COMMON SHARE - $(0.56) $0.94 PRIMARY ===================== NET EARNINGS (LOSS) PER COMMON SHARE ASSUMING FULL DILUTION $(0.56) $0.94 ===================== See accompanying notes to consolidated financial statements.
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CONTINENTAL CAN COMPANY, INC. AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF EARNINGS NINE MONTHS ENDED SEPTEMBER 30, 1995 AND 1994 (UNAUDITED) (In thousands, except per share data) 1995 1994 --------------------- Sales $476,436 $405,469 Cost of sales 399,773 332,293 --------------------- Gross profit 76,663 73,176 Restructuring charges 5,003 - Selling, general and administrative 54,632 49,799 expenses --------------------- OPERATING INCOME 17,028 23,377 Other income (expense): Interest expense, net (14,857) (13,671) Foreign currency exchange loss (176) (156) Other - net (44) (219) --------------------- NET OTHER EXPENSE (15,077) (14,046) Income before provision for income taxes, minority interest, extraordinary item and cumulative effect of accounting change 1,951 9,331 Provision for income taxes 2,235 4,477 --------------------- Income (loss) before minority interest, extraordinary item and cumulative effect of accounting (284) 4,854 change Minority interest (781) 228 --------------------- Income before extraordinary item and cumulative effect of accounting change 497 4,626 Extraordinary item, net - (73) Cumulative effect of accounting change, - (263) net --------------------- NET INCOME $ 497 $ 4,290 ===================== Earnings (loss) per common share - primary: Before extraordinary item and cumulative effect of accounting change $ 0.15 $ 1.44 Extraordinary item - (0.02) Cumulative effect of accounting - (0.08) change, net --------------------- NET EARNINGS PER COMMON SHARE - PRIMARY $ 0.15 $ 1.34 ===================== Earnings (loss) per common share - assuming full dilution: Before extraordinary item and cumulative effect of accounting change $ 0.15 $ 1.38 Extraordinary item - (0.02) Cumulative effect of accounting - (0.08) change, net --------------------- NET EARNINGS PER COMMON SHARE ASSUMING FULL DILUTION $ 0.15 $ 1.28 ===================== See accompanying notes to consolidated financial statements.
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CONTINENTAL CAN COMPANY, INC. AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF CASH FLOWS NINE MONTHS ENDED SEPTEMBER 30, 1995 AND 1994 (UNAUDITED) (In thousands) 1995 1994 ------------------- CASH FLOWS FROM OPERATING ACTIVITIES: Net income $ 497 $ 4,290 Depreciation and amortization 25,015 25,973 Minority interest (781) 228 Cumulative effect of accounting - (73) change, net Other adjustments 2,961 (8,955) ------------------- NET CASH PROVIDED BY 27,692 21,463 OPERATING ACTIVITIES CASH FLOWS FROM INVESTING ACTIVITIES: Capital expenditures (29,779) (16,996) Other (1,017) 509 ------------------- NET CASH USED IN INVESTING (30,796) (16,487) ACTIVITIES CASH FLOWSFROM FINANCING ACTIVITIES: Net repayments of long term debt (11,296) (7,967) Net proceeds from short term 17,827 8,558 borrowings Other 959 14 ------------------- NET CASH PROVIDED BY 7,490 605 FINANCING ACTIVITIES Effect of exchange rate changes on cash 46 677 ------------------- Increase in cash and cash equivalents 4,432 6,258 Cash and cash equivalents at beginning 8,776 12,741 of period ------------------- CASH AND CASH EQUIVALENTS AT END OF $ 13,208 $ 18,999 PERIOD =================== See accompanying notes to consolidated financial statements.
7 CONTINENTAL CAN COMPANY, INC. AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS SEPTEMBER 30, 1995 (1) Accounting Policies and Other Matters (a) Basis of Presentation Certain information and footnote disclosures normally included in financial statements prepared in accordance with generally accepted accounting principles have been condensed or omitted. It is suggested that these consolidated financial statements be read in conjunction with the financial statements and notes thereto included in the Company's 1994 Annual Report to Stockholders. (b) Adjustments The results for the interim period reported herein have not been audited; however, in the opinion of management, all adjustments necessary for a fair presentation of the interim period statements have been made. (c) Earnings Per Common Share Earnings per common share is based on the weighted average number of common and common equivalent shares outstanding. Common equivalent shares include dilutive stock options (using the treasury stock method) exercisable under the Company's option plans. Weighted average shares outstanding in the third quarter of 1995 and 1994, were 3,330,653 and 3,297,685 respectively and for the first nine months of 1995 and 1994 were 3,342,489 and 3,222,161, respectively. For the first nine months of 1994, earnings per common share, assuming full dilution, gives effect to the conversion of the Company's then outstanding 10-3/4% Convertible Subordinated Debentures (the "Debentures") due May 1, 1994 as if such Debentures had been converted on the issue date, after elimination of related interest expense, net of income tax effect. All Debentures were converted during the second quarter of 1994. (2) Inventories Inventories consist principally of packaging materials. The components of inventory were as follows: (000's omitted)
September 30, December 31, September 30, 1995 1994 1994 ---------------------------------------------- Finished goods $ 46,780 $35,985 $37,141 Work in process 11,109 7,096 8,781 Raw materials 43,178 43,275 35,045 ------------------------------- $101,067 $86,356 $80,967 LIFO reserve (3,202) (3,924) 118 ----------------------- $ 97,865 $82,432 $81,085 ==============================================
8 ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS Sales during the third quarter of 1995 increased 11% to $171,024,000 as compared to $154,492,000 in the third quarter of 1994. Sales in the first nine months of 1995 increased 18% to $476,436,000 from $405,469,000 in the same prior year period. Higher sales in the third quarter of 1995 resulted primarily from volume increases at Plastic Containers, Inc. ($4 million), foreign currency translation rate differences ($7 million), and resin price increase pass throughs ($6 million). Higher sales for the first nine months of 1995 resulted from volume increases at Plastic Containers, Inc. ($20 million), foreign currency translation rate differences ($28 million), and resin price increase pass throughs ($23 million). Gross profit was higher in the first nine months of 1995 than the same prior year period but slightly lower in the third quarter of 1995 than 1994. Gross profit as a percentage of sales declined by approximately 2% in the third quarter and in the first nine months of 1995 from the same periods of 1994. This decline primarily resulted from higher raw material prices at Ferembal, competitive pressure in the flexible film business in Europe, and the effect of resin price increase pass-throughs and third quarter production start-up costs at PCI. Results for the third quarter and first nine months of 1995 included a $5 million restructuring charge for severance and termination benefits at Ferembal, the Company's European can manufacturing subsidiary, to help position Ferembal as a low cost producer. The restructuring, which will affect approximately 9% of the workforce, was prompted by the Company's continuing efforts to reduce costs in the face of increased raw material prices and competitive pressures in the European market. Selling, general and administrative expense as a percentage of sales declined by approximately 0.8% in the first nine months of 1995 versus the same prior year period. Selling, general and administrative expense as a percentage of sales in the third quarter of 1995 was approximately 0.6% higher than in 1994. The reduction in selling, general and administrative expense as a percentage of sales primarily reflects the fixed nature of many of these expenses in relation to increased volume. Because of these various factors, operating income amounted to $2,729,000 and $17,028,000 in the third quarter and first nine months of 1995, respectively, as compared to $10,855,000 and $23,337,000 in the same periods of 1994. Net interest expense increased to $5,435,000 in the third quarter of 1995 from $4,617,000 in the third quarter of 1994. Net interest expense was $14,857,000 in the first nine months of 1995 as compared to $13,761,000 in the same period of 1994. These increases resulted primarily from higher interest rates at the Company's European subsidiaries. Provision for income taxes amounted to $479,000 and $2,235,000 in the third quarter and first nine months of 1995, respectively, as compared to $2,308,000 and $4,477,000 in the third quarter and first nine months of 1994, reflecting a lower level of tax benefits for accounting purposes in loss operations than tax expense in the Company's profitable operations. Minority interest during each period reflects the interests of other shareholders in some of the Company's subsidiaries. Net loss amounted to $1,872,000 ($0.56 per share) in the third quarter of 1995. Net income amounted to $3,102,000 ($0.94 per share) in the third quarter of 1994. Net income in the first nine months of 1995 amounted to $497,000 ($0.15 per share). During the first nine months of 1994, the Company recognized an extraordinary charge amounting to $73,000 ($0.02 per share) related to the purchase and cancellation by PCI of $3 million of its 10.75% Senior Secured Notes, and a charge amounting to $263,000 ($.08 per share) resulting from the cumulative effect of an accounting change. Net income in the first nine months of 1994 amounted to $4,290,000 ($1.34 per share). 9 FINANCIAL CONDITION CAPITAL REQUIREMENTS The Company acquired $9,704,000 and $29,779,000 of capital assets during the third quarter and first nine months of 1995, respectively, consisting primarily of packaging equipment. These assets were acquired for cash. Similar types of assets are expected to be acquired for the remainder of 1995 and total capital expenditures are expected to amount to approximately $33 million. The Company intends to actively pursue acquisition possibilities in 1995. It is presently the Company's intention to finance any acquisitions by leveraging the assets of the business to be acquired, with existing cash, through bank borrowings or, possibly, through the issuance of stock. LIQUIDITY The Company's liquidity position declined slightly during the first nine months of 1995. Working capital declined to approximately $63.3 million, and the current ratio amounted to 1.33 at September 30, 1995 compared to 1.52 at December 31, 1994. For the nine months ended September 30, 1995, net cash provided by operating activities amounted to $27,692,000. The increase in the Company's accounts receivable and inventory in the third quarter of each year is primarily a result of the seasonality of Ferembal's business which peaks at this period because of the harvest of vegetable crops for canning. Net cash used in investing activities, primarily capital expenditures, amounted to $30,796,000 during the first nine months of 1994. In the same period, the Company repaid approximately $11.3 million in long term debt and increased short term borrowings by approximately $17.8 million. The Company expects that, as Ferembal collects receivables and reduces its seasonally high inventories relating to vegetable canning, these short term borrowings will be repaid or refinanced. At September 30, 1995, the Company had an available credit line under a Revolving Credit Agreement of $2.8 million. In addition, the Company's consolidated subsidiaries had available approximately $26 million in credit lines and bank overdraft facilities at September 30, 1995. However, the Company's ability to draw upon these lines for other than its subsidiaries' needs is restricted. The Company expects that cash from operations and its existing banking facilities will be sufficient to meet its operating needs for the remainder of 1995. On a long term basis the Company believes that existing funds, cash generated by operations and its existing banking facilities will be sufficient to meet its cash needs. 10 PART II OTHER INFORMATION ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K ----------------------------------------- (a) Exhibits Required (11) Statement re computation of per share earnings See Note 1(c) on Page 8 (27) Financial Data Schedule Page 12 All other items for which provision is made in the applicable regulations of the Securities and Exchange Commission have been omitted as they are not required under the related instructions or they are inapplicable. (b) Reports on Form 8-K A Report on Form 8-K reporting on Item 5. Other Events was filed on September 21, 1995. 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 thereunto duly authorized. CONTINENTAL CAN COMPANY, INC. (REGISTRANT) By: /s/ Abdo Yazgi -------------- Abdo Yazgi Principal Financial Officer and on behalf of registrant DATED: NOVEMBER 7, 1995 11 EX-27 2 FINANCIAL DATA SCHEDULE
5 1,000 9-MOS DEC-31-1995 JAN-01-1995 SEP-30-1995 13,208 0 145,936 5,815 97,865 255,809 334,359 141,583 481,832 192,470 136,790 799 0 0 75,354 481,832 476,436 476,436 399,773 459,408 15,077 0 14,857 1,951 2,235 497 0 0 0 497 .15 .15
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