-----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, p7tolgUn1CPHKB/tiM8kAuKWcKqZ/aJyrRdaOh4gWOm0AD5YxEb+AedMINxhdK3u QBXIKTiNEoTPFt+EbA0OgQ== 0000011975-94-000028.txt : 19941128 0000011975-94-000028.hdr.sgml : 19941128 ACCESSION NUMBER: 0000011975-94-000028 CONFORMED SUBMISSION TYPE: 10-Q PUBLIC DOCUMENT COUNT: 2 CONFORMED PERIOD OF REPORT: 19941002 FILED AS OF DATE: 19941115 SROS: NYSE FILER: COMPANY DATA: COMPANY CONFORMED NAME: BIC CORP CENTRAL INDEX KEY: 0000011975 STANDARD INDUSTRIAL CLASSIFICATION: 3950 IRS NUMBER: 060735597 STATE OF INCORPORATION: NY FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 10-Q SEC ACT: 1934 Act SEC FILE NUMBER: 001-06832 FILM NUMBER: 94560358 BUSINESS ADDRESS: STREET 1: 500 BIC DR CITY: MILFORD STATE: CT ZIP: 06460 BUSINESS PHONE: 2037832000 MAIL ADDRESS: STREET 1: 500 BIC DRIVE CITY: MILFORD STATE: CT ZIP: 06460 FORMER COMPANY: FORMER CONFORMED NAME: BIC PEN CORP DATE OF NAME CHANGE: 19820607 FORMER COMPANY: FORMER CONFORMED NAME: WATERMAN BIC PEN CORP DATE OF NAME CHANGE: 19720113 10-Q 1 10-Q THIRD QUARTER 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 Quarterly Period Ended October 2, 1994. 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: 1-6832 BIC CORPORATION (Exact name of registrant as specified in its charter) Incorporated in State of New York I.R.S. Employer Number: 06-0735597 Principal Executive Offices: 500 BIC Drive, Milford, Connecticut 06460 Telephone number, including area code: (203) 783-2000 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 report(s), and (2) has been subject to such filing requirements for the past 90 days. Yes _____X_____ No __________ At October 2, 1994, the close of the period covered by this report, registrant had outstanding 23,559,244 common shares, $1.00 par value per share. PART 1. FINANCIAL INFORMATION BIC CORPORATION AND SUBSIDIARIES ITEM 1. CONDENSED CONSOLIDATED FINANCIAL STATEMENTS UNAUDITED CONDENSED CONSOLIDATED BALANCE SHEETS October 2, January 2, 1994 1994 ---------- --------- ASSETS (Thousands) - - ------ CURRENT ASSETS: Cash and cash equivalents $ 36,511 $ 24,094 Accounts and notes receivable: Trade - net of allowance for doubtful accounts of $5,781,000 at October 2 and $4,084,000 at January 2 74,456 47,627 Affiliates 3,830 3,020 Other 4,058 1,372 Inventories: Work in process, finished stock and packaging materials 46,842 49,363 Raw materials 7,332 10,063 Other current assets 27,867 30,446 -------- -------- Total current assets 200,896 165,985 -------- -------- PROPERTY, PLANT AND EQUIPMENT - at cost less accumulated depreciation of $150,010,000 at October 2 and $137,928,000 at January 2 137,825 140,317 OTHER ASSETS 29,999 29,914 -------- -------- TOTAL $368,720 $336,216 ======== ======== LIABILITIES AND SHAREHOLDERS' EQUITY - - ------------------------------------ CURRENT LIABILITIES: Short term borrowings $ 8,123 $ 6,731 Accounts payable: Trade 11,895 11,789 Affiliates 3,786 9,390 Accrued expenses 66,876 60,843 Other current liabilities 3,328 0 -------- -------- Total current liabilities 94,008 88,753 -------- -------- NON-CURRENT LIABILITIES 23,824 20,775 -------- -------- SHAREHOLDERS' EQUITY: Preferred shares ($1 par value; authorized - 1,000,000; no shares issued or outstanding) 0 0 Common shares ($1 par value; authorized - 50,000,000; outstanding 23,559,244) 23,559 23,559 Retained earnings 231,917 205,902 Foreign currency translation adjustment (4,588) (2,773) --------- --------- Total shareholders' equity 250,888 226,688 --------- --------- TOTAL $368,720 $336,216 ========= ========= See Notes to Unaudited Condensed Consolidated Financial Statements. -2- BIC CORPORATION AND SUBSIDIARIES UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF INCOME AND RETAINED EARNINGS FOR THE NINE MONTHS ENDED OCTOBER 2, 1994 AND OCTOBER 3, 1993 1994 1993 ---- ---- (Thousands Except Share Data) NET SALES $369,336 $348,692 COST OF GOODS SOLD 186,844 189,164 --------- --------- GROSS PROFIT 182,492 159,528 ADVERTISING, SELLING, GENERAL AND ADMINISTRATIVE, MARKETING AND RESEARCH AND DEVELOPMENT EXPENSES 112,236 102,153 --------- --------- INCOME FROM OPERATIONS 70,256 57,375 OTHER INCOME (EXPENSE) - NET (1,352) 2,588 --------- --------- INCOME BEFORE INCOME TAXES AND CUMULATIVE EFFECT OF CHANGES IN ACCOUNTING PRINCIPLES 68,904 59,963 PROVISION FOR INCOME TAXES 28,130 24,131 --------- --------- INCOME BEFORE CUMULATIVE EFFECT OF CHANGES IN ACCOUNTING PRINCIPLES 40,774 35,832 CUMULATIVE EFFECT OF CHANGES IN ACCOUNTING PRINCIPLES FOR: POSTEMPLOYMENT BENEFITS, NET OF TAXES OF $410,000 (623) 0 POSTRETIREMENT BENEFITS OTHER THAN PENSIONS, NET OF TAXES OF $6,400,000 0 (9,816) --------- --------- NET INCOME 40,151 26,016 RETAINED EARNINGS - BEGINNING OF YEAR 205,902 187,900 DIVIDENDS PAID (PER COMMON SHARE: 1994 - $0.60, 1993 - $0.54) (14,136) (12,722) --------- --------- RETAINED EARNINGS - END OF PERIOD $231,917 $201,194 ========= ========= WEIGHTED AVERAGE NUMBER OF SHARES OUTSTANDING 23,559,244 23,559,244 EARNINGS (LOSS) PER COMMON SHARE: INCOME BEFORE CUMULATIVE EFFECT OF CHANGES IN ACCOUNTING PRINCIPLES $ 1.73 $ 1.52 CUMULATIVE EFFECT OF CHANGES IN ACCOUNTING PRINCIPLES (0.02) (0.42) --------- --------- NET INCOME $ 1.71 $ 1.10 ========= ========= See Notes to Unaudited Condensed Consolidated Financial Statements. -3- BIC CORPORATION AND SUBSIDIARIES UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF INCOME FOR THE FISCAL QUARTERS ENDED OCTOBER 2, 1994 AND OCTOBER 3, 1993 1994 1993 ---- ---- (Thousands Except Share Data) NET SALES $127,720 $123,056 COST OF GOODS SOLD 63,425 66,057 -------- -------- GROSS PROFIT 64,295 56,999 ADVERTISING, SELLING, GENERAL AND ADMINISTRATIVE, MARKETING AND RESEARCH AND DEVELOPMENT EXPENSES 38,773 36,217 -------- -------- INCOME FROM OPERATIONS 25,522 20,782 OTHER INCOME (EXPENSE) - NET (104) 2,128 --------- --------- INCOME BEFORE INCOME TAXES 25,418 22,910 PROVISION FOR INCOME TAXES 10,624 9,682 --------- --------- NET INCOME (PER COMMON SHARE: 1994 - $0.63, 1993 - $0.56) $ 14,794 $ 13,228 ========= ========= WEIGHTED AVERAGE NUMBER OF SHARES OUTSTANDING 23,559,244 23,559,244 See Notes to Unaudited Condensed Consolidated Financial Statements. -4- BIC CORPORATION AND SUBSIDIARIES UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS FOR THE NINE MONTHS ENDED OCTOBER 2, 1994 AND OCTOBER 3, 1993 1994 1993 ---- ---- (Thousands) NET CASH PROVIDED BY OPERATING ACTIVITIES* $ 41,391 $ 33,679 -------- -------- CASH FLOWS FROM INVESTING ACTIVITIES: Purchases of property, plant and equipment (16,271) (30,351) Proceeds from sale of property, plant and equipment 1,020 464 Deferred charges, deposits and other (163) (1,339) Purchases of trademarks and patents (900) 0 --------- --------- Net cash used in investing activities (16,314) (31,226) --------- --------- CASH FLOWS FROM FINANCING ACTIVITIES: Net increase in short term borrowings 1,440 4,403 Dividends paid (14,136) (12,722) --------- --------- Net cash used in financing activities (12,696) (8,319) --------- --------- EFFECT OF EXCHANGE RATE CHANGES ON CASH 36 (282) --------- --------- INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS 12,417 (6,148) CASH AND CASH EQUIVALENTS, BEGINNING OF YEAR 24,094 25,234 --------- --------- CASH AND CASH EQUIVALENTS, END OF PERIOD $ 36,511 $ 19,086 ========= ========= SUPPLEMENTAL DISCLOSURES OF CASH FLOW INFORMATION: Cash paid during the period for: Interest $ 818 $ 551 ========= ========= Income taxes $ 23,108 $ 26,139 ========= ========= *The 1994 Change in Employers' Accounting for Postemployment Benefits and the 1993 Change in Employers' Accounting for Postretirement Benefits Other Than Pensions had no effect on cash and cash equivalents. See Notes to Unaudited Condensed Consolidated Financial Statements. -5- BIC CORPORATION AND SUBSIDIARIES NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS 1. Basis of Presentation --------------------- The accompanying unaudited condensed consolidated financial statements have been prepared in accordance with the instructions to Form 10-Q and do not include all of the information and disclosures required by generally accepted accounting principles for complete financial statements. In the opinion of management, all adjustments (consisting of normal recurring accruals) considered necessary for a fair presentation have been included. Operating results for the nine-month period ended October 2, 1994 are not necessarily indicative of the results that may be expected for the fiscal year ending January 1, 1995. Certain items in the 1993 unaudited condensed consolidated financial statements have been reclassified to conform to the 1994 presentation. 2. New Accounting Standards ------------------------ As of January 3, 1994, the Corporation adopted Statement of Financial Accounting Standards No. 112 (SFAS 112), "Employers' Accounting for Postemployment Benefits." This new standard requires that the cost of benefits provided to former or inactive employees be recognized on the accrual basis of accounting. Previously, the Corporation recognized postemployment benefits on a cash basis or at the date the event gave rise to the payment of these benefits. In accordance with the provisions of the Collective Bargaining Agreement between BIC Corporation and Local 134 United Rubber, Cork, Linoleum and Plastic Workers of America, the Corporation provides severance benefits to its unionized employees. The Corporation also provides medical and life insurance benefits to salaried employees receiving long-term disability benefits. The cumulative effect of this change, net of deferred income tax benefit of $0.4 million, reduced net income by $0.6 million or $0.02 per share, which has been reflected in the Corporation's condensed consolidated statement of income for the nine months ended October 2, 1994. Also effective January 3, 1994, the Corporation adopted FASB Interpretation No. 39, "Offsetting of Amounts Related to Certain Contracts." This Interpretation defines the right of setoff and specifies what conditions must be met to have that right. The Corporation enters into forward exchange contracts denominated in foreign currencies providing protection from foreign currency fluctuations. At October 2, 1994, the Corporation had outstanding $3.3 million of forward exchange contracts, under which the Corporation is required to purchase French francs at a contract rate of 6.01 French francs to the dollar during the fourth quarter of 1994. These contracts do not meet the conditions for setoff as set forth in FASB Interpretation No. 39 and accordingly, at October 2, 1994, the Corporation has recorded a current asset and a current liability for the $3.3 million. -6- BIC CORPORATION AND SUBSIDIARIES NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS 2. New Accounting Standards (Continued) ------------------------------------ Effective January 4, 1993, the Corporation adopted Statement of Financial Accounting Standards No. 106 (SFAS 106), "Employers' Accounting for Postretirement Benefits Other Than Pensions." This standard requires accrual of the estimated cost of retiree health benefits during the years an employee provides services rather than the Corporation's past practice of recognizing these costs on a cash basis. SFAS 106 allows recognition of the cumulative effect of the liability in the year of adoption or the amortization of the obligation over a period up to twenty years. The Corporation has elected to recognize the cumulative effect of this obligation on the immediate recognition basis. The cumulative effects as of January 4, 1993 of adopting SFAS 106 were an increase in accrued postretirement health care costs of $16.2 million and a decrease in net earnings of $9.8 million, or $0.42 per share, which have been reflected in the Corporation's condensed consolidated statement of income for the nine months ended October 3, 1993. Also, effective January 4, 1993, the Corporation adopted Statement of Financial Accounting Standards No. 109 (SFAS 109), "Accounting for Income Taxes." Under SFAS 109, the deferred tax provision is determined under the liability method. Under this method, deferred tax assets and liabilities are recognized based on differences between financial statement and tax bases of assets and liabilities using presently enacted tax rates. There was no cumulative effect on prior years of this change in accounting principle. Prior year financial statements have not been restated. 3. Short Term Borrowings --------------------- Short term borrowings totaled $8.1 million at October 2, 1994. The weighted average interest rate on these borrowings is 5.0%. -7- BIC CORPORATION AND SUBSIDIARIES ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS Liquidity and Capital Resources - - ------------------------------- The changes in the financial condition of the Corporation between January 2, 1994 and the end of the third fiscal quarter of 1994 reflect normal operations. Accounts and notes receivable were higher at October 2, 1994 as compared to January 2, 1994 due to higher sales levels. The Corporation's current ratio was 2.14 at October 2, 1994 and 1.87 at January 2, 1994. The increase in other current liabilities reflects the Corporation's adoption of FASB Interpretation No. 39, "Offsetting of Amounts Related to Certain Contracts." Refer to Note 2, New Accounting Standards, for further discussion. Accounts payable - affiliates were $3.8 million at October 2, 1994 as compared to $9.4 million at January 2, 1994. The decrease was primarily due to the timing of inventory purchases. Accrued expenses were $66.9 million at October 2, 1994 as compared to $60.8 million at January 2, 1994. The increase was due to the timing of payments for advertising campaigns and marketing promotions, and an increase in payroll liability attributable to the timing of payments for bonuses. Purchases of property, plant and equipment were $16.3 million for the nine months ended October 2, 1994 as compared with $30.4 million for the same period last year. The difference was largely due to the 1993 spending for the expansions of the Duncan, South Carolina facility, Clearwater, Florida facility and Cuautitlan, Mexico facility; building improvements for the Gaffney, South Carolina facility and purchases of machinery and equipment for capacity increases in stationery products. Income taxes paid for the nine-month period ended October 2, 1994 were $23.1 million as compared with $26.1 million for the same period last year. The decrease was due to the timing of income tax payments by the Corporation's Canadian subsidiary. Results of Operations - - --------------------- Net sales for the fiscal quarter ended October 2, 1994 were $127.7 million, an increase of 4% from $123.1 million for the same period in 1993. Gross profit was $64.3 million in 1994 as compared with $57.0 million in 1993. Gross profit as a percentage of net sales was 50% in 1994 as compared to 46% for the same period last year. Net income was $14.8 million, or $0.63 per share, compared with $13.2 million, or $0.56 per share, for the same period last year. Net sales for the nine months ended October 2, 1994 were $369.3 million compared with $348.7 million in 1993, for an increase of 6%. Gross profit was $182.5 million in 1994 as compared with $159.5 million in 1993. Gross profit as a percentage of net sales was 49% compared to 46% in 1993. Income before cumulative effect of changes in accounting principles was $40.8 million, or $1.73 per share, compared with $35.8 million, or $1.52 per share for the same period last year. -8- BIC CORPORATION AND SUBSIDIARIES ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS Results of Operations (Continued) - - --------------------------------- The improvement in net sales for the fiscal quarter ended October 2, 1994 reflects improvements in the United States core operations (stationery products, lighters and shavers). The increase in stationery products was attributable to higher average selling prices partially offset by a slight decline in the number of units sold. This decline was due to several customers taking delivery of back-to-school merchandise in the second quarter of 1994 as compared with last year's third quarter. The improvement in lighters primarily reflects an increase in units sold. The shaver improvement was primarily the result of an increase in the number of BIC twin blade shavers sold, and higher average selling prices. The Corporation's foreign operations showed slight increases in net sales. The higher gross profit percentage for the third fiscal quarter of 1994, as compared to the same period last year, reflects the higher average selling prices discussed above also and lower unit costs for stationery products and shavers in the United States. These lower unit costs were primarily due to a favorable mix of products sold, manufacturing efficiencies and favorable foreign exchange rates associated with imports. The Corporation's Mexican operations also contributed to the increase in gross profit. The change in other income (expense) for the third quarter of 1994 as compared to the same period last year was primarily due to a reduction in the provision related to the sailboard litigation in 1993. The $14.1 million increase in net income for the nine-month period ended October 2, 1994 as compared to the same period last year was primarily attributable to the adoption of SFAS 106 in 1993 and to the improvements in gross profit margins in 1994. -9- PART II. OTHER INFORMATION BIC CORPORATION AND SUBSIDIARIES Item 1. Legal Proceedings - None. Item 2. Change in Securities - None. Item 3. Defaults upon Senior Securities - Not Applicable. Item 4. Submission of Matters to a Vote of Security Holders - None. Item 5. Other Information - None. Item 6. Exhibits and Reports on Form 8-K a) Exhibits - None Required. b) Reports on Form 8-K - None. SIGNATURE Pursuant to the requirements of the Securities Exchange Act of 1934, registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized. BIC CORPORATION ---------------------------------------------- (Registrant) Date: November 15, 1994 Robert L. Macdonald ---------------------------------------------- (Signature) Robert L. Macdonald, Vice President - Finance (Principal Accounting Officer) -10- EX-27 2 ARTICLE 5 FDS FOR 3RD QUARTER 10-Q
5 1,000 9-MOS JAN-01-1995 OCT-02-1994 36,511 0 82,344 5,781 54,174 200,896 137,825 150,010 368,720 94,008 0 23,559 0 0 227,329 368,720 369,336 369,336 186,844 186,844 0 1,729 264 68,904 28,130 40,774 0 0 (623) 40,151 1.71 1.71
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