-----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, INVWv2ZnRIVxBxlPOoZWplXlVNXO72or3sjwgAOr/MU268APG2jrPrekIIFU6pWJ 7D3arNQDQ4ksGQLgS02Eqg== 0000950152-98-000969.txt : 19980212 0000950152-98-000969.hdr.sgml : 19980212 ACCESSION NUMBER: 0000950152-98-000969 CONFORMED SUBMISSION TYPE: 8-K PUBLIC DOCUMENT COUNT: 2 CONFORMED PERIOD OF REPORT: 19980123 ITEM INFORMATION: FILED AS OF DATE: 19980211 SROS: NONE FILER: COMPANY DATA: COMPANY CONFORMED NAME: MEAD CORP CENTRAL INDEX KEY: 0000064394 STANDARD INDUSTRIAL CLASSIFICATION: PAPERBOARD MILLS [2631] IRS NUMBER: 310535759 STATE OF INCORPORATION: OH FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 8-K SEC ACT: SEC FILE NUMBER: 001-02267 FILM NUMBER: 98532609 BUSINESS ADDRESS: STREET 1: MEAD WORLD HEADQUARTERS STREET 2: COURTHOUSE PLZ NORTHEAST CITY: DAYTON STATE: OH ZIP: 45463 BUSINESS PHONE: 5134956323 8-K 1 THE MEAD CORPORATION 8-K 1 ================================================================================ 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 23, 1998 THE MEAD CORPORATION (Exact name of registrant as specified in its charter) OHIO 1-2267 31-0535759 (State or other (Commission (IRS Employer jurisdiction of File Number) Identification No.) incorporation)
MEAD WORLD HEADQUARTERS, COURTHOUSE PLAZA N.E., DAYTON, OHIO 45463 (Address of principal executive offices) (Zip Code) Registrant's telephone number, including area code: (937) 495-6323 NOT APPLICABLE (Former name or former address, if changed since last report) ================================================================================ 2 Item 5. Other Events - ------- ------------ On January 23, 1998, the Registrant issued the press release attached hereto as Exhibit 20.1 reporting certain financial results for the year and quarter ended December 31, 1997. 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. THE MEAD CORPORATION February 10, 1998 By: /s/ Gregory T. Geswein ------------------------------------ Gregory T. Geswein Vice President and Controller 2 3 EXHIBIT INDEX Exhibit No. Description ----------- ----------- 20.1 Press Release issued by The Mead Corporation on January 23, 1998 EX-20.1 2 EXHIBIT 20.1 1 Exhibit 20.1 ------------ MEAD LOGO - -------------------------------------------------------------------------------- Corporate Communications Department World Headquarters Courthouse Plaza Northeast Dayton, Ohio 45463 937-495-6323 NEWS MEAD REPORTS YEAR-END AND FOURTH-QUARTER RESULTS DAYTON, Ohio. January 23, 1998 -- The Mead Corporation today reported fourth quarter net earnings of $31.8 million, or 30 cents per share (diluted), compared to 1996 fourth quarter net earnings of $29.2 million, or 28 cents per share. Fourth quarter sales were $1.24 billion, compared to $1.15 billion in 1996. Full-year net earnings were $150.1 million, or $1.41 per share (diluted), compared to $195.3 million, or $1.84 per share, in 1996. 1996 net earnings included a five-cent gain from the sale of a discontinued business. Net sales for the year were $5.08 billion, compared to $4.71 billion in 1996. "While difficult markets and weaker pricing clearly affected the industry and Mead's earnings in 1997, we benefited from our strong mix of businesses and our continued emphasis on productivity," said Jerome F. Tatar, chairman, CEO and president. Paper - ----- Segment sales and earnings improved for both the fourth quarter and the full year, reflecting the acquisition of the Rumford, Maine, mill in late 1996. The Publishing Paper Division achieved record full-year shipments and production at both the Escanaba, Michigan, and Rumford mills. Sales for the year surpassed 1996 levels while earnings were up slightly. Fourth-quarter results improved over the prior-year quarter with higher sales volume and slightly higher pricing. Within the Fine Paper Division, fourth-quarter sales and earnings were off slightly on lower shipments. For the year, division sales and earnings were likewise down slightly from 1996. However, productivity improvements helped offset the impact of lower shipments and selling prices. - more - 2 Page 2 Improvement in Mead's specialty paper businesses was driven by Mead's Specialty Paper Division, which achieved improvements in sales and earnings for both the fourth quarter and the full year based on strong results in all of the division's strategic grades. Packaging and Paperboard - ------------------------ Sales and earnings for the segment improved in the fourth quarter compared to the prior-year period on stronger results from the Coated Board, Packaging and Containerboard divisions. Full-year earnings declined when compared to the prior year as a result of weaker pricing during much of 1997 for corrugating medium. Within Mead's Coated Board System, sales and earnings improved for both the fourth quarter and the year on higher worldwide sales volume, strong results in related sawmill operations and improved operating efficiencies at the Mahrt mill in Alabama and the Packaging Division's converting operations. Packaging sales growth was strong in North America, Europe and Latin America. Open market board sales volume improved in North America and Europe. Improved performance more than offset the negative impact of foreign exchange rates, primarily in Europe. Fourth-quarter sales and operating results improved within the Containerboard Division on stronger pricing and increased sales volume. Full-year sales increased over 1996 based on production from the new corrugating medium machine at the division's Stevenson, Alabama, mill. Operating results for the year declined from 1996 as a result of lower prices during much of the year. During April, the #2 machine at the Stevenson mill will be down for a scheduled 17-day period to facilitate completion of its previously announced capacity expansion and environmental upgrade. - more - 3 Page 3 Distribution and School and Office Products - ------------------------------------------- Full-year segment sales and earnings declined as did fourth-quarter operating results. However, sales in the fourth quarter improved compared to the prior year as Zellerbach continued to strengthen its sales organization. Zellerbach's results declined for the quarter and significantly for the year on lower margins, higher selling costs and costs related to the division's performance improvement efforts. Within the School and Office Products Division, sales and operating results improved for the fourth quarter when compared to 1996. The division experienced a normal seasonal loss during the quarter following a successful back-to-school season. Full-year sales were up and earnings were about even with the prior year. The division's Canadian operations, Hilroy, achieved record sales and higher earnings for the year. Northwood Investees - ------------------- For the quarter, earnings from Mead's jointly owned Northwood companies were below those of the prior year due to significantly lower lumber prices and reduced shipments. Full-year results improved slightly from 1996 as higher pulp mill demand and record production were offset by increased log costs and lower prices for oriented structural board. During the quarter, Northwood announced a performance improvement program to reduce costs and improve operating margins. 4 Page 4 Other - ----- A previously announced two-for-one stock split was effective December 1. On a post-split basis, Mead repurchased 880,000 outstanding shares during the quarter and 2.1 million shares during 1997. The company has repurchased more than 60 percent of the shares under its continuing 10 million share repurchase authorization of April, 1995. The Mead Corporation produces coated papers for periodicals, catalogs, books, and commercial printing; carbonless copy paper; uncoated and specialty papers; and pulp and wood products. In the packaging and paperboard sector, the company produces coated paperboard; beverage and food packaging; and corrugating medium and cartons. Mead is a major supplier of value-added school and office products. Mead's Zellerbach division delivers products and services for printing, packaging and industrial supply markets. 5
STATEMENT OF EARNINGS (All dollar amounts in millions, except per share amounts) Fourth Qtr Ended Full Year Ended ------------------ ----------------- Dec. 31, Dec. 31, Dec. 31, Dec. 31, 1997 1996 1997 1996 Net sales $ 1,243.8 $ 1,149.7 $ 5,077.4 $ 4,706.5 Cost of products sold 1,0l3.7 945.2 4,177.3 3,803.9 ----------- ----------- ----------- ----------- Gross profit 230.1 204.5 900.1 902.6 Selling & administrative expenses 161.2 147.6 589.3 564.0 ----------- ----------- ----------- ----------- Earnings from operations 68.9 56.9 310.8 338.6 Other revenues 5.4 2.2 9.9 13.7 Interest & debt expense (24.3) (17.4) (98.2) (57.7) ----------- ----------- ----------- ----------- Earnings from continuing operations before income taxes 50.0 41.7 222.5 294.6 Income taxes 18.2 16.3 81.3 109.0 ----------- ----------- ----------- ----------- Earnings from continuing operations before equity in net earnings of investees 31.8 25.4 141.2 185.6 Equity in net earnings of investees 3.8 8.9 4.3 ----------- ----------- ----------- ----------- Earnings from continuing operations 31.8 29.2 150.1 189.9 Discontinued operations 5.4 ----------- ----------- ----------- ----------- Net earnings 31.8 $ 29.2 $ 150.1 $ 195.3 =========== =========== =========== =========== Earnings per common share - basic: Continuing operations $ .31 $ .28 $ 1.44 $ 1.81 Discontinued operations .05 ----------- ----------- ----------- ----------- Net earnings - basic $ .31 $ . 28 $ 1.44 $ 1.86 =========== =========== =========== =========== Earnings per common share - diluted: Continuing operations $ .30 $ .28 $ 1.41 $ 1.79 Discontinued operations .05 ----------- ----------- ----------- ----------- Net earnings - diluted $ .30 $ .28 $ 1.41 $ 1.84 =========== =========== =========== =========== Cash dividends per common share $ .16 $ .15 $ .61 $ .59 =========== =========== =========== =========== Average common shares outstanding (millions) - diluted 106.0 106.0 106.4 106.4 =========== =========== =========== ===========
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BALANCE SHEETS (All dollar amounts in millions) Dec. 31, Dec. 31, ---------- ---------- 1997 1996 Current assets: Cash and cash equivalents $ 29.5 $ 20.6 Accounts receivable 586.1 578.2 Inventories 524.5 509.3 Other current assets 77.5 81.2 ---------- -------- Total current assets: 1,217.6 1,189.3 Investments and other assets: Investees 151.1 154.9 Other assets 551.2 521.3 ---------- -------- 702.3 676.2 Property, plant and equipment - net 3,309.8 3,120.4 ---------- -------- Total assets $ 5,229.7 $ 4,985.9 ========== ======== Current liabilities: Accounts payable $ 330.4 $ 358.9 Accrued liabilities 382.6 383.7 Current maturities of long-term debt 1.8 15.1 ---------- -------- Total current liabilities 714.8 757.7 Long-term debt 1,428.0 1,239.7 Commitments and contingent liabilities Deferred items 798.4 742.1 Shareowners' equity: Common shares 154.9 155.5 Additional paid-in capital 53.5 13.2 Foreign currency translation adjustment (20.5) (2.4) Retained earnings 2,100.6 2,080.1 ---------- -------- 2,288.5 2,246.4 Total liabilities and shareowners' equity $ 5,229.7 $ 4,985.9 ========== ========
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SALES AND EARNINGS SEGMENT INFORMATION (All dollar amounts in millions) Fourth Qtr Ended Full Year Ended ---------------- --------------- Dec. 31, Dec. 31, Dec. 31, Dec. 31, 1997 1996 1997 1996 Industry Segment Sales to Unaffiliated Customers: Paper $ 392.7 $ 375.7 $ 1,576.1 $1,251.3 Packaging and Paperboard 368.7 325.7 1,431.8 1,371.4 Distribution and School and Office Products 482.4 448.3 2,069.5 2,083.8 -------- -------- --------- -------- TOTAL NET SALES $1,243.8 $1,149.7 $ 5,077.4 $4,706.5 ======== ======== ========= ======== Fourth Qtr Ended Full Year Ended ---------------- --------------- Dec. 31, Dec. 31, Dec. 31, Dec. 31, 1997 1996 1997 1996 Industry Segment Earnings from Operations: Paper $ 53.4 $ 51.5 $ 194.5 $ 193.8 Packaging and Paperboard 35.5 20.2 129.6 138.6 Distribution and School and Office Products (4.9) (.7) 38.7 69.3 -------- -------- --------- -------- 84.0 71.0 362.8 401.7 Other revenue - corporate 6.4 2.7 l3.0 l0.7 General corporate expense (16.1) (14.6) (55.1) (60.1) Interest and debt expense (24.3) (17.4) (98.2) (57.7) -------- -------- --------- -------- Total corporate and other (34.0) (29.3) (140.3) (107.1) -------- -------- --------- -------- EARNINGS FROM CONTINUING OPERATIONS BEFORE INCOME TAXES $ 50.0 $ 41.7 $ 222.5 $ 294.6 ======== ======== ========= ========
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STATEMENT OF CASH FLOWS (All dollar amounts in millions) Year Ended ---------- Dec. 31, Dec. 31, 1997 1996 Cash flows from operating activities: Net earnings $ 150.1 $ 195.3 Adjustments to reconcile net earnings to net cash provided by operating activities: Depreciation, amortization and depletion of property, plant and equipment 242.3 203.0 Depreciation and amortization of other assets 46.2 47.4 Deferred income taxes 37.2 54.2 Investees - earnings and dividends 1.3 7.1 Discontinued operations (5.4) Other (20.8) (16.2) Change in assets and liabilities, excluding effects of acquisitions and dispositions: Accounts receivable (7.9) 49.0 Inventories (15.2) (25.8) Other current assets 1.3 6.6 Accounts payable and accrued liabilities (29.6) (49.2) Cash (used in) discontinued operations (40.5) ------ -------- Net cash provided by operating activities: 404.9 425.5 Cash flows from investing activities: Capital expenditures (440.7) (433.4) Additions to equipment rented to others (33.7) (40.6) Payment for acquired business (640.4) Proceeds from sale of business 19.6 Other (4.0) 19.2 -------- ------- Net cash (used in) investing activities (478.4) (1,075.6) Cash flows from financing activities: Additional borrowings 719.5 561.1 Payments on borrowings (547.2) (75.5) Cash dividends paid (63.8) (61.9) Common shares issued 43.8 14.3 Common shares purchased (69.9) (59.9) -------- -------- Net cash provided by financing activities 82.4 378.1 -------- -------- Increase (decrease) in cash and cash equivalents 8.9 (272.0) Cash and cash equivalents at beginning of year 20.6 292.6 Cash and cash equivalents at end of year $ 29.5 $ 20.6 ======== ========
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