-----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, AEqL5TQiWImn05eWsbE8kdymIDe6QIRu5jVE6ZMpHzdB4oc9FIbpuJtwbyGS64vj tje1C6LuQClSllPwgTGfuA== 0000950172-97-000054.txt : 19970127 0000950172-97-000054.hdr.sgml : 19970127 ACCESSION NUMBER: 0000950172-97-000054 CONFORMED SUBMISSION TYPE: 8-K PUBLIC DOCUMENT COUNT: 2 CONFORMED PERIOD OF REPORT: 19970123 ITEM INFORMATION: Other events ITEM INFORMATION: Financial statements and exhibits FILED AS OF DATE: 19970124 SROS: NYSE 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: 1934 Act SEC FILE NUMBER: 001-02267 FILM NUMBER: 97510246 BUSINESS ADDRESS: STREET 1: MEAD WORLD HEADQUARTERS STREET 2: COURTHOUSE PLZ NORTHEAST CITY: DAYTON STATE: OH ZIP: 45463 BUSINESS PHONE: 5134956323 8-K 1 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 January 23, 1997 Date of Report (Date of earliest event reported) THE MEAD CORPORATION (Exact name of Registrant as specified in its charter) Ohio 1-2267 31-0535759 (State of Commission (IRS Employer Incorporation) File Identification Number) Mead World Headquarters, Courthouse Plaza, Northeast Dayton, Ohio 45463 (Address of principal executive offices) 937-495-6323 (Registrant's telephone No.) Not Applicable (Former name or former address, if changed since last report) ITEM I. CHANGES IN CONTROL OF REGISTRANT Not applicable. ITEM II. ACQUISITION OR DISPOSITION OF ASSETS Not applicable. ITEM III. BANKRUPTCY OR RECEIVERSHIP Not applicable. ITEM IV. CHANGES IN REGISTRANT'S CERTIFYING ACCOUNTANT Not applicable. ITEM V. OTHER EVENTS On January 23, 1997, the Registrant issued a news release reporting certain financial results for the year ended December 31, 1996, attached hereto as Exhibit 1.1. ITEM VI. RESIGNATIONS OF REGISTRANT'S DIRECTORS Not applicable. ITEM VII. FINANCIAL STATEMENTS AND EXHIBITS (a) Financial Statements: Not applicable. (b) Pro Forma Financial Information: Not applicable. (c) Exhibits: 1.1 Press release, dated January 23, 1997. ITEM VIII. CHANGES IN FISCAL YEAR Not applicable. Signatures 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 autho- rized. The Mead Corporation (Registrant) Date: January 24, 1997 /s/ David L. Santez Dayton, Ohio David L. Santez, Esq. Assistant Secretary and Associate General Counsel EXHIBIT INDEX Page 1.1 Press release dated January 23, 1997 6 EX-99 2 EXHIBIT 1.1 - PRESS RELEASE EXHIBIT 1.1 Corporate Communications Department World Headquarters Courthouse Plaza Northeast Dayton, Ohio 45463 513-495-6323 MEAD REPORTS YEAR-END AND FOURTH-QUARTER RESULTS DAYTON, Ohio. January 23, 1997--The Mead Corporation today reported full-year net earnings of $195.3 million, or $3.67 per share, compared to $350.0 million, or $6.33 per share, in 1995. Net sales for the year were $4.71 billion compared to $5.18 billion in 1995. While sales volume for many products was ahead of last year, overall sales and earnings declined on sub- stantially lower prices for pulp, paper and containerboard. "While 1996 was a difficult year in the market, it was a solid year for Mead," said Steven C. Mason, chairman and chief executive officer. "It was our third best year ever in earnings per share from continuing operations. We significantly strengthened our positions in coated paper and corrugating medium with major growth projects. We also advanced our company-wide productivity initiative, resulting in a compounded productivity in- crease of 12 percent over the past five years." For the fourth quarter of 1996, net earnings were $29.2 million, or 55 cents per share. Comparable fourth quarter 1995 earnings from continuing operations were $74.1 million, or $1.37 per share. As reported, 1995 fourth quarter net earnings of $81.6 million, or $1.51 per share, included a net gain of $7.5 million, or 14 cents per share, resulting from adjustments related to the sale of Mead's electronic publishing business. Fourth quarter sales were $1.15 billion, compared to $1.14 billion in 1995. Mason said that "demand in some product areas, such as coated paper and corrugating medium, is improv- ing. Other areas, such as carbonless and specialty papers, remain strong. Overall, however, market and price uncertainties remain." He added that Mead has been pleased with the operation of the Rumford, Maine, mill, it acquired for $640 million in November from Boise Cascade. "The integration of the Rumford mill into Mead's paper system is underway, and we are seeing evi- dence of increased sales volume through our broader distribution system," Mason said. "Mead has made much progress during the last five years. However, we are not satisfied and continue to aggressively seek out opportu- nities to improve our competitiveness in both strong and weak markets." Paper Lower prices for coated paper led to lower earnings for the paper segment during the fourth quarter and the full year. The sales volume of coated, carbon- less, and specialty papers reached record levels for the year. Inventories of coated and uncoated paper peaked at mid-year and declined in the second half as demand strengthened, ending the year below where they began. Mead's specialty paper businesses improved in both sales and earnings for the year, with the Specialty Paper Division achieving exceptionally strong results. During the quarter, all of the segment's mills operated well, and Publishing Paper and Fine Paper shipments were espe- cially strong. Packing and Paperboard Sales and earnings for the segment declined for the full year and the quarter on sharply lower corrugat- ing medium prices, negatively affecting the Containerboard Division. The new Stevenson machine ran above its rated capacity during the quarter, producing 64,000 tons of medium. The division also sold a record volume of medium from its other machine. While coated board shipments were down slightly for the year, 1996 earnings for the Coated Board system improved on a modest increase in beverage packaging prices, more efficient converting operations, strong results in wood products, and cost reductions and higher operating efficiencies at the Mahrt mill in Alabama. Packaging sales growth for the full year was stronger in North America and Latin America. For the quarter, Coated Board sales were unchanged from the prior year period, while earnings were down. Overall Packaging sales im- proved for the fourth quarter and earnings were up slightly. Distribution and School and Office Products Overall, when compared with 1995, segment performance improved in the fourth quarter, but declined for the year. The School and Office Products Division concluded a very strong year. It achieved an increase in sales volume of its value-added school products for the year and recorded a strong operating performance. The division experienced a normal seasonal loss during the quarter following an excellent back to school season. Zellerbach's sales in 1996 were below last year's as a result of lower prices for paper and reduced volume in its three business units. The division contin- ued to improve its operating processes. Zellerbach's operating margin rates improved over the prior year. Sales continued to be weak during the fourth quarter. Northwood Investees While full-year earnings declined for Mead's jointly owned Northwood companies, demand for pulp strengthened in the second half as prices firmed and Northwood returned to profitability following two nega- tive quarters. For the year, lower average pulp prices were offset somewhat by higher prices for wood products and lower purchased wood fiber costs. Northwood took 15.5 days of maintenance and holiday-related downtime during the quarter. Other Mead repurchased 168,000 outstanding shares during the quarter. The company has now repurchased two million shares under its continuing five million share authorization of April, 1995. Following the acquisition of the Rumford mill, Mead's total-debt-to-total-capital ratio stands at just under 36 percent, well within the company's stated objec- tives. 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. STATEMENTS OF EARNINGS (All dollar amounts in millions, except EPS) Fourth Quarter Ended Full Year Ended ------------------ ---------------- Dec. 31, Dec. 31, Dec. 31, Dec. 31 1996 1995 1996 1995 Net sales $1,149.7 $1,144.0 $4,706.5 $5,179.4 Cost of products sold 945.2 901.8 3,803.9 4,104.0 -------- -------- -------- -------- Gross profit 204.5 242.2 902.6 1,075.4 Selling & administrative expenses 147.6 132.5 564.0 552.0 -------- -------- -------- -------- Earnings from operations 56.9 109.7 338.6 523.4 Other revenues 2.2 6.8 13.7 33.7 Interest & debt expense (17.4) (15.9) (57.7) (69.4) -------- -------- -------- -------- Earnings from continuing operations before income taxes 41.7 100.6 294.6 487.7 Income Taxes 16.3 36.0 109.0 184.2 -------- -------- -------- -------- Earnings from continuing operations before equity in net earnings of investees 25.4 64.6 185.6 303.5 Equity in net earnings of investees 3.8 9.5 4.3 39.0 -------- -------- -------- -------- Earnings from continuing operations 29.2 74.1 189.9 342.5 Discontinued operations 7.5 5.4 7.5 -------- -------- -------- -------- Net earnings $ 29.2 $ 81.6 $ 195.3 $ 350.0 Per common & common equivalent share: Earnings from continuing operations $ .55 $ 1.37 $ 3.57 $ 6.19 Discontinued operations .14 .10 .14 -------- -------- -------- -------- Net earnings $ .55 $ 1.51 $ 3.67 $ 6.33 Cash dividends per common share $ .30 $ .28 $ 1.18 $ 1.09 Average common & common equivalent shares outstanding (millions) 53.0 54.2 53.2 55.3 BALANCE SHEETS (All dollar amounts in millions) Dec. 31, Dec. 31, 1996 1995 --------- ---------- Current assets: Cash and cash equivalents $ 20.6 $ 292.6 Accounts receivable 578.2 585.7 Inventories 509.3 410.5 Other current assets 81.2 78.5 --------- ---------- Total current assets 1,189.3 1,367.3 Investments and other assets: Investees 154.9 141.0 Other assets 521.3 500.4 --------- ---------- 676.2 641.4 Property, plant and equipment - net 3,120.4 2,364.1 --------- ---------- Total assets $4,985.9 $4,372.8 Current liabilities: Accounts payable $ 358.9 $ 380.5 Accrued liabilities 383.7 368.3 Current maturities of longterm debt 15.1 73.0 Total current liabilities 757.7 821.8 Long-term debt 1,239.7 694.8 Commitments and contingent liabilities Deferred items 742.1 696.0 Shareowners' equity: Common shares 155.5 157.8 Additional paid-in capital 13.2 Foreign currency translation adjustment (2.4) (.8) Retained earnings 2,080.1 2,003.2 --------- ---------- 2,246.4 2,160.2 --------- ---------- Total liabilities and shareowners' equity $4,985.9 $4,372.8 STATEMENTS OF CASH FLOWS (All dollar amounts in millions) Year Ended Dec. 31, Dec. 31, 1996 1995 -------- --------- Cash flows from operating activities: Net earnings $195.3 $350.0 Adjustments to reconcile net earnings to net cash provided by operating activities: Depreciation, amortization and depletion of property, plant and equipment 203.0 190.7 Depreciation and amortization of other assets 47.4 46.0 Deferred income taxes 54.2 89.1 Investees-earnings and dividends 7.1 ( 29.5) Discontinued operations ( 5.4) ( 7.5) Other ( 16.2) ( 65.1) Change in assets and liabilities, excluding effects of acquisitions and dispositions: Accounts receivable 49.0 20.9 Inventories ( 25.8) ( 52.7) Other current assets 6.6 ( 23.4) Accounts payable and accrued liabilities ( 49.2) (325.8) Cash (used in) discontinued operations ( 40.5) ( 5.8) Net cash provided by operating activities 425.5 186.9 Cash flows from investing activities: Capital expenditures (433.4) (263.0) Additions to equipment rented to others ( 40.6) ( 56.0) Payments for acquired businesses (640.4) Proceeds from sale of businesses 19.6 39.8 Restricted funds 461.0 Other 19.2 20.1 Net cash proved by (used in) investing activities (1,075.6) 201.9 Cash flows from financing activities: Additional borrowings 561.1 6.0 Payments on borrowings ( 75.5) (213.5) Cash dividends paid ( 61.9) ( 59.6) Common shares issued 14.3 41.6 Common shares purchased ( 59.9) (354.7) Net cash provided by (used in) financing activities 378.1 (580.2) Decrease in cash & cash equivalents (272.0) (191.4) Cash & cash equivalents at beginning of year 292.6 484.0 Cash & cash equivalents at end of year $ 20.6 $292.6 SALES AND EARNINGS SEGMENT REPORTING (All dollar amounts in millions) Fourth Qtr. Ended Full Year Ended ----------------- --------------- Dec. Dec. Dec. Dec. 31, 31, 31, 31 1996 1995 1996 1995 Industry Segment Sales to Unaffiliated Customers: Paper $ 375.7 $ 278.3 $1,251.3 $1,243.3 Packaging & Paperboard 325.7 347.8 1,371.4 1,428.8 Dist. & School & Office 448.3 517.9 2,083.8 2,507.3 TOTAL NET SALES $1,149.7 $1,144.0 $4,706.5 $5,179.4 Fourth Qtr. Ended Full Year Ended Dec. Dec. Dec. Dec. 31, 31, 31, 31 1996 1995 1996 1995 Industry Segment Earnings from Operations: Paper $51.5 $ 88.0 $193.8 $330.8 Packaging & Paperboard 20.2 37.5 138.6 184.9 Dist. & School & Office (.7) ( 5.2) 69.3 77.3 $71.0 $120.3 $401.7 $593.0 Other revenues - corp. 2.7 8.3 10.7 25.9 General corporate expense (14.6) ( 12.1) ( 60.1) ( 61.8) Interest & debt expense (17.4) ( 15.9) ( 57.7) ( 69.4) Total corporate & other (29.3) ( 19.7) (107.1) (105.3) EARNINGS FROM CONTINING OPERATIONS BEFORE INCOME TAXES $41.7 $100.6 $294.6 $487.7 # # # -----END PRIVACY-ENHANCED MESSAGE-----