-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: keymaster@town.hall.org Originator-Key-Asymmetric: MFkwCgYEVQgBAQICAgADSwAwSAJBALeWW4xDV4i7+b6+UyPn5RtObb1cJ7VkACDq pKb9/DClgTKIm08lCfoilvi9Wl4SODbR1+1waHhiGmeZO8OdgLUCAwEAAQ== MIC-Info: RSA-MD5,RSA, EwrQz/iGCM7KTThuRmWs0tA5ONrXIYZZAD9YYuhl4e8Zj3LcY5NMTIL0sFtK1Hka T+9m000hl8Rkfo6eHglv0w== 0000950130-95-000931.txt : 19950512 0000950130-95-000931.hdr.sgml : 19950512 ACCESSION NUMBER: 0000950130-95-000931 CONFORMED SUBMISSION TYPE: 10-Q PUBLIC DOCUMENT COUNT: 2 CONFORMED PERIOD OF REPORT: 19950331 FILED AS OF DATE: 19950511 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: 95536516 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 MARCH 31, 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 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 ----- ----- The number of shares outstanding of the registrant's Common Stock ($.25 par value) as of May 10, 1995 is 3,165,057. FORM 10-Q PART I FINANCIAL INFORMATION ITEM 1. FINANCIAL STATEMENTS - ----------------------------- Consolidated Balance Sheets as of March 31, 1994 and 1995 and December 31, 1994 Consolidated Statements of Earnings and Retained Earnings for the Three Months Ended March 31, 1995 and 1994 Consolidated Statements of Cash Flows for the Three Months Ended March 31, 1995 and 1994 Notes to Consolidated Financial Statements 2 CONTINENTAL CAN COMPANY, INC. AND SUBSIDIARIES CONSOLIDATED BALANCE SHEETS MARCH 31, 1995 AND 1994 AND DECEMBER 31, 1994 (UNAUDITED) (In thousands) MARCH 31, DEC. 31, MARCH 31, 1995 1994 1994 --------- --------- --------- ASSETS: - ------- Current Assets: Cash and cash equivalents $ 13,248 $ 8,776 $ 16,563 Investments 290 292 297 Accounts Receivable: Trade accounts 109,895 102,255 89,944 Other 18,959 15,964 10,676 Less allowance for doubtful accounts (5,388) (5,316) (3,671) --------- --------- -------- Accounts receivable, net 123,466 112,903 96,949 Inventories 103,129 82,432 83,255 Prepaid expenses and other current 4,383 4,700 4,161 assets --------- --------- -------- TOTAL CURRENT ASSETS 244,516 209,103 201,225 --------- --------- -------- Property, plant and equipment, at cost: Land, building and improvements 51,861 48,750 43,559 Manufacturing machinery and equipment 237,857 230,365 208,651 Furniture, fixtures and equipment 9,659 8,536 7,624 Construction in progress 18,269 9,505 16,297 --------- --------- -------- 317,646 297,156 276,131 Less accumulated depreciation and (129,591) (116,786) (93,122) amortization --------- --------- -------- Net property, plant and equipment 188,055 180,370 183,009 Goodwill, net of accumulated 15,040 13,997 13,610 amortization Other assets 20,391 20,115 23,641 --------- --------- -------- TOTAL ASSETS $ 468,002 $ 423,585 $421,485 ========= ========= ======== See accompanying notes to consolidated financial statements. 3 CONTINENTAL CAN COMPANY, INC. AND SUBSIDIARIES CONSOLIDATED BALANCE SHEETS (CONTINUED) MARCH 31, 1995 AND 1994 AND DECEMBER 31, 1994 (UNAUDITED) (In thousands) MARCH 31, DEC. 31, MARCH 31, 1995 1994 1994 --------- --------- --------- LIABILITIES AND STOCKHOLDER'S EQUITY: - ------------------------------------- Current Liabilities: Short term borrowings $ 33,932 $ 21,855 $ 13,735 Accounts payable - trade 74,172 60,540 57,464 Accrued liabilities: Employee compensation and benefits 21,316 19,072 13,270 Other accrued expenses 18,789 16,143 30,531 Current installments of long term debt and obligations under capital leases 14,295 13,043 15,463 Income taxes payable 1,512 1,160 929 Other current liabilities 9,533 5,942 1,467 -------- -------- -------- TOTAL CURRENT LIABILITIES 173,549 137,755 132,859 Long term debt, excluding current 128,334 128,363 134,653 installments Obligations under capital leases, excluding current installments 15,056 13,998 13,668 Deferred income taxes 4,188 3,747 2,943 Other 37,087 36,285 40,463 -------- -------- -------- TOTAL LIABILITIES 358,214 320,148 324,586 Minority interest 32,803 32,741 34,544 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 3,165,057 shares in 1995, 3,151,157 shares in Dec. 1994 and 2,879,158 791 788 720 shares in March 1994. -------- -------- -------- 791 788 720 Additional paid-in capital 43,132 42,872 41,414 Retained earnings 26,624 26,187 21,290 -------- -------- -------- 70,547 69,847 63,424 Cumulative foreign currency translation 6,438 849 (1,069) adjustment -------- -------- -------- TOTAL STOCKHOLDERS' EQUITY 76,985 70,696 62,355 -------- -------- -------- TOTAL LIABILITIES AND $468,002 $423,585 $421,485 STOCKHOLDERS' EQUITY ======== ======== ======== See accompanying notes to consolidated financial statements. 4 CONTINENTAL CAN COMPANY, INC. AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF EARNINGS THREE MONTHS ENDED MARCH 31, 1995 AND 1994 (UNAUDITED) (In thousands, except per share data) 1995 1994 -------- -------- Sales $144,460 $115,850 Cost of sales 120,753 95,515 -------- -------- Gross profit 23,707 20,335 Selling, general and administrative 18,000 15,830 expenses -------- -------- OPERATING INCOME 5,707 4,505 Other income (expense): Interest expense, net (4,272) (4,608) Foreign currency exchange gain (loss) (316) 49 Other - net (38) 36 -------- -------- NET OTHER EXPENSE (4,626) (4,523) Income (loss) before provision for income taxes, minority interest and cumulative effect of accounting change 1,081 (18) Provision for income taxes 603 691 -------- -------- Income (loss) before minority interest and cumulative effect of accounting change 478 (709) Minority Interest 41 (520) -------- -------- Income (loss) before cumulative effect of accounting change 437 (189) Cumulative effect of accounting change, - (263) net -------- -------- NET INCOME (LOSS) $ 437 $ (452) ======== ======== Earnings (loss) per common share - primary: Before cumulative effect of accounting $ 0.13 $ (0.06) change Cumulative effect of accounting - (0.09) change, net -------- -------- NET EARNINGS (LOSS) PER COMMON SHARE - $ 0.13 $ (0.15) PRIMARY ======== ======== Earnings (loss) per common share - assuming full dilution: Before cumulative effect of accounting $ 0.13 $ (0.05) change Cumulative effect of accounting - (0.08) change, net -------- -------- NET EARNINGS (LOSS) PER COMMON SHARE ASSUMING FULL DILUTION $ 0.13 $ (0.13) ======== ======== RETAINED EARNINGS: - ------------------ Balance at beginning of period $ 26,187 $ 21,742 Net income (loss) 437 (452) -------- -------- BALANCE AT END OF PERIOD $ 26,624 $ 21,290 ======== ======== See accompanying notes to consolidated financial statements. 5 CONTINENTAL CAN COMPANY, INC. AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF CASH FLOWS THREE MONTHS ENDED MARCH 31, 1995 AND 1994 (UNAUDITED) (In thousands) 1995 1994 -------- ------- CASH FLOWS FROM OPERATING ACTIVITIES: Net income (loss) $ 437 $ (452) Depreciation and Amortization 8,577 8,718 Minority interest 41 (520) Cumulative Effect of Accounting - (263) Change, Net Other Adjustments (2,376) (1,372) -------- ------- NET CASH PROVIDED BY 6,679 6,111 OPERATING ACTIVITIES CASH FLOWS FROM INVESTING ACTIVITIES: Capital expenditures (9,518) (6,794) Other (513) 86 -------- ------- NET CASH USED IN INVESTING (10,031) (6,708) ACTIVITIES NET CASH PROVIDED BY 7,207 4,177 FINANCING ACTIVITIES Effect of exchange rate changes on cash 617 242 -------- ------- Increase in cash and cash equivalents 4,472 3,822 Cash and cash equivalents at beginning 8,776 12,741 of period -------- ------- CASH AND CASH EQUIVALENTS AT END OF $ 13,248 $16,563 PERIOD ======== ======= See accompanying notes to consolidated financial statements. 6 CONTINENTAL CAN COMPANY, INC. AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS MARCH 31, 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 first quarter of 1995 and 1994 were 3,410,079, and 3,039,938, respectively. Prior to their conversion in May 1994, earnings per common share, assuming full dilution, gave effect to the conversion of the Company's outstanding 10-3/4% Convertible Subordinated Debentures as if such Debentures had been converted after elimination of related interest expense, net of income tax effect. (2) Acquisitions During the first quarter of 1995, Ferembal increased its interest in Obalex to 74% by purchasing 10 % of the equity of Obalex from outside investors for $586,000 which approximated book value. (3) Inventories Inventories consist principally of packaging materials. The components of inventory were as follows: (000's omitted) March 31, December 31, March 31, 1995 1994 1994 -------- ------- ------- (in thousands) Finished goods $ 50,162 $43,275 $41,187 Work in process 12,014 7,096 8,779 Raw materials and supplies 44,745 35,985 33,179 -------- ------- ------- 106,921 86,356 83,145 LIFO reserve (3,792) (3,924) 110 -------- ------- ------- $103,129 $82,432 $83,255 ======== ======= ======= 7 ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL - ---------------------------------------------------------- CONDITION AND RESULTS OF OPERATIONS ----------------------------------- Sales during the first quarter of 1995 increased 25% to $144,460,000 as compared to $115,850,000 in the first quarter of 1994. Increased sales in 1995 reflected higher volumes primarily at Plastic Containers, Inc. (PCI) but also at the Company's flexible packaging operations. Contributing to the increase were currency translation rate differences (approximately $9 million) and resin price pass-throughs to customers (approximately $7 million). Gross profit increased 17% in the first quarter of 1995, as compared to the prior year period. Gross profit as a percentage of sales declined slightly in the first quarter of 1995 as compared to the same period of 1994. The decline primarily reflects resin price pass-throughs to customers at PCI which increase both sales and costs resulting in a lower margin percentage. Selling, general and administrative expense as a percentage of sales declined to 12.5% in 1995 as compared to 13.7% 1994, primarily as a result of the higher sales volume. Because of these various factors, operating income amounted to $5,707,000 in the first quarter of 1995 as compared to $4,505,000 in the first quarter of 1994. Operating profit as a percentage of sales improved over the same periods to 4.0% from 3.9%. Net interest expense declined to $4,272,000 in the first quarter of 1995 as compared to $4,608,000 in the same period of 1994. This decline resulted primarily from lower debt levels in 1995 than 1994. Foreign exchange losses amounted to $316,000 in the first quarter of 1995, reflecting the strength of the deutsch mark against other European currencies. Foreign exchange gains amounted to $49,000 in the first quarter of 1994. Provision for income taxes amounted to $603,000 in the first quarter of 1995 and reflected 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 income in the first quarter of 1995 amounted to $437,000 ($.13 per share). Loss before cumulative effect of an accounting change amounted to $189,000 ($.06 per share) in the first quarter of 1994. A charge amounting to $263,000 ($.09 per share) resulted from the cumulative effect of an accounting change in the first quarter of 1994. Net loss in the first quarter of 1994 amounted to $452,000 ($.15). FINANCIAL CONDITION - ------------------- CAPITAL REQUIREMENTS The Company acquired $9.5 million of capital assets during the first quarter of 1995 consisting primarily of packaging equipment. These assets were acquired for cash. Similar types of 8 assets are expected to be acquired for the remainder of 1995. Total capital spending in 1995 is expected to amount to approximately $31 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 quarter of 1995. Working capital increased slightly to approximately $71 million, and the current ratio amounted to 1.41 at March 31, 1995 compared to 1.51 at December 31, 1994. During the first quarter of 1995, the Company's operating activities generated $6.7 million of cash primarily as a result of depreciation charges. The Company used $10 million in investing activities primarily for the purchase of packaging equipment. The small shortfall was covered by cash from financing activities primarily short term borrowings of $9.6 million, which was also used to repay long term debt with the remainder being added to the Company's cash reserves. At March 31, 1995, the Company had an available credit line under a Revolving Credit Agreement of $2.9 million. In addition, the Company's consolidated subsidiaries had available approximately $39 million in short term credit lines and bank overdraft facilities at March 31, 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. 9 PART II OTHER INFORMATION ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K - ----------------------------------------- (a) Exhibits Required (10) Amendment No. 1 to the 1988 Director Stock Option Plan Page 11 (11) Statement re computation of per share earnings See Note 1(c) on Page 7 (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 No reports on Form 8-K have been filed since December 31, 1994. 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 -------------------------------- Principal Financial Officer and on behalf of registrant DATED: MAY 10, 1995 10 AMENDMENT NO. 1 TO THE 1988 DIRECTOR STOCK OPTION PLAN ------------------------------- The 1988 Director Stock Option Plan is hereby amended as follows: 1. By replacing the words retainer fees in Paragraph VI, Subparagraph A, with the words total fees. 2. By replacing the words Annual Retainer in Paragraph VI, Subparagraph B, with the words Total Fees and by striking the word not in the eighth line of such subpararaph. 3. This amendment shall be effective as of March 6, 1995. 11 EX-27 2 FINANCIAL DATA SCHEDULE
5 1,000 3-MOS DEC-31-1995 JAN-01-1995 MAR-31-1995 13,248 290 128,854 5,388 103,129 244,516 317,646 129,591 468,002 173,549 143,390 791 0 0 76,194 468,002 144,460 144,460 120,753 138,753 4,626 0 4,272 1,081 603 437 0 0 0 437 .13 .13
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