-----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, WsJgSWGClJrDsUyGLxS9Cfs0fB41EnNkL2AdOW1V3o5W3ov6u+oWJ20uRzT+gpwn h9PjyXa+d6+6n2HQatPxMQ== 0000950172-97-000955.txt : 19971020 0000950172-97-000955.hdr.sgml : 19971020 ACCESSION NUMBER: 0000950172-97-000955 CONFORMED SUBMISSION TYPE: 8-K PUBLIC DOCUMENT COUNT: 2 CONFORMED PERIOD OF REPORT: 19971015 ITEM INFORMATION: ITEM INFORMATION: FILED AS OF DATE: 19971017 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: SEC FILE NUMBER: 001-02267 FILM NUMBER: 97697600 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 October 15, 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 October 15, 1997, the Registrant issued a news release reporting certain financial results for the quarter ended September 28, 1997, 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 October 15, 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 authorized. The Mead Corporation (Registrant) Date: October 17, 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 October 15, 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 THIRD QUARTER RESULTS DAYTON, Ohio. October 15, 1997 -- The Mead Corporation today reported third quarter net earnings of $50.3 million, or 94 cents per share, compared to 1996 third quarter earnings of $62.7 million, or $1.18 per share. Sales for the quarter were $1.38 billion, an increase of 12 percent from $1.23 billion in 1996. The increase primarily reflects Mead's acquisition in November 1996 of a coated and specialty paper mill in Rumford, Maine. Earnings improved over the prior year within the Paper and Paperboard segments on strong volume. Pricing, which has been weak for most of the year in coated paper and corrugating medium, improved during the quarter. Earnings within the Distribution and School and Office Products segment were much lower on reduced margins. Paper Earnings improved over the prior year on volume growth in coated paper, primarily because of the Rumford mill and strong sales volumes within the Specialty Paper Division. Coated paper pricing, which had been very low earlier this year, strengthened during the quarter. Carbonless paper volumes and prices declined slightly from the prior year. The Paper segment's mills operated well during the quarter. Packaging and Paperboard Earnings within the segment improved on volume growth in corrugating medium and strong volume and operations within the Coated Board System. Within the Coated Board System, beverage volume continued to grow, especially in North America and Latin America, and earnings improved despite strengthening of the U.S. dollar against European currencies. Converting operations improved over the prior year. Open market sales of Coated Natural Kraft (TM) also increased. In the Coated Board Division, startup of the rebuilt Number 1 machine at the Mahrt Mill in Alabama was excellent following its June shutdown. The division also reported strong wood operations during the quarter. Volume growth in corrugating medium over the prior year was driven by the Containerboard Division's new machine at the Stevenson mill in Alabama and strong operations overall. Medium pricing improved during the quarter from very low levels earlier this year. Sales volume at the division's corrugated container plants also increased, although pricing is below prior-year levels. Expansion of the new machine and related environmental improvements continue to be on track for mid-1998 completion. Distribution and School and Office Products Segment earnings declined primarily on weak results within Zellerbach, Mead's distribution company. Zellerbach sales improved slightly during the quarter from the prior-year period but earnings dropped significantly on reduced margins. The division is focusing its efforts on increasing sales volume and is being impacted by increased costs associated with strengthening its sales force. Sales increased in the School and Office Products Division, while earnings declined from the previous year due to sales mix and pressure on margins. Northwood Investees Earnings for Mead's jointly owned Northwood companies declined from the prior year but were about even with those of the second quarter. Prices and volume for lumber declined from the prior year. Pulp prices were up slightly during the quarter and about even with last year's levels. Other The company repurchased more than 350,000 common shares during the quarter and has now repurchased nearly 55 percent of the five million shares authorized for repurchase in April, 1995. "We are pleased with our improved results in the Paper and Paperboard segments, where we have made major investments," said Steven C. Mason, chairman and CEO. "Our disappointing performance at Zellerbach is being aggressively addressed by the new division management specifically through the strengthening of the sales force." Mason, whose October 31 retirement as chairman was previously announced, said, "We are encouraged by the strong markets for many of our products as well as the improvement in pricing in a number of our grades. I have great confidence in the ability of Mead people to continue the significant progress they have made in customer satisfaction, productivity improvement and the building of Mead as a high performance organization." Mason will be succeeded as chairman and CEO by Jerome F. Tatar, currently president and chief operating officer. 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. STATEMENT OF EARNINGS (All dollar amounts in millions, except per share amounts) Third Qtr Ended Three Qtrs Ended -------------------- -------------------- Sept 28, Sept 29, Sept 28, Sept 29, 1997 1996 1997 1996 Net sales $1,375.6 $1,231.1 $3,833.6 $3,556.8 Cost of products sold 1,134.9 995.1 3,163.6 2,858.7 --------- --------- --------- --------- Gross profit 240.7 236.0 670.0 698.1 Selling & administrative expenses 146.2 141.5 428.1 416.4 --------- --------- --------- --------- Earnings from operations 94.5 94.5 241.9 281.7 Other revenues 2.8 3.5 4.5 11.5 Interest & debt expense (25.9) (12.9) (73.9) (40.3) --------- --------- --------- --------- Earnings from continuing operations before income taxes 71.4 85.1 172.5 252.9 Income taxes 25.8 31.2 63.1 92.7 --------- --------- --------- --------- Earnings from continuing operations before equity in net earnings of investees 45.6 53.9 109.4 160.2 Equity in net earnings of investees 4.7 8.8 8.9 .5 --------- --------- --------- --------- Earnings from continuing operations 50.3 62.7 118.3 160.7 Discontinued operations 5.4 --------- --------- --------- --------- Net earnings $ 50.3 $ 62.7 $ 118.3 $ 166.1 ========= ========= ========= ========= Per common & common equivalent share: Earnings from continuing operations $ .94 $ 1.18 $ 2.22 $ 3.02 Discontinued operations .10 --------- --------- --------- --------- Net earnings $ .94 $ 1.18 $ 2.22 $ 3.12 ========= ========= ========= ========= Cash dividends per common share $ .30 $ .30 $ .90 $ .88 ========= ========= ========= ========= Average common & common equivalent shares outstanding (millions) 53.6 53.0 53.3 53.2 ========= ========= ========= ========= BALANCE SHEETS (All dollar amounts in millions) Sept 28, Sept 29, -------- -------- 1997 1996 Current assets: Cash and cash equivalents $ 20.4 $ 121.9 Accounts receivable 689.0 640.0 Inventories 477.7 412.0 Other current assets 84.4 91.8 ---------- ---------- Total current assets 1,271.5 1,265.7 Investments and other assets: Investees 159.4 136.6 Other assets 558.0 523.9 ---------- ---------- 717.4 660.5 Property, plant and equipment - net 3,229.1 2,478.6 ---------- ---------- Total assets $ 5,218.0 $ 4,404.8 ========== ========== Current liabilities: Notes payable $ 114.2 $ Accounts payable 337.3 300.1 Accrued liabilities 387.5 380.7 Current maturities of long-term debt 9.7 7.3 ---------- ---------- Total current liabilities 848.7 688.1 Long-term debt 1,273.5 720.6 Commitments and contingent liabilities Deferred items 791.2 755.3 Shareowners' equity: Common shares 156.2 155.8 Additional paid-in capital 52.1 11.0 Foreign currency translation adjustment (15.8) (1.7) Retained earnings 2,112.1 2,075.7 ---------- ---------- 2,304.6 2,240.8 ---------- ---------- Total liabilities and shareowners' equity $ 5,218.0 $ 4,404.8 ========== ========== SALES AND EARNINGS SEGMENT INFORMATION (All dollar amounts in millions) Third Qtr Ended Three Qtrs Ended -------------------- -------------------- Sept 28, Sept 29, Sept 28, Sept 29, 1997 1996 1997 1996 Industry Segment Sales to Unaffiliated Customers: Paper 412.8 302.7 1,183.4 875.6 Packaging and Paperboard 369.4 342.9 1,063.1 1,045.7 Distribution and School and Office Products 593.4 585.5 1,587.1 1,635.5 -------- -------- -------- -------- TOTAL NET SALES $1,375.6 $1,231.1 $3,833.6 $3,556.8 ======== ======== ======== ======== Third Qtr Ended Three Qtrs Ended -------------------- -------------------- Sept 28, Sept 29, Sept 28, Sept 29, 1997 1996 1997 1996 Industry Segment Earnings from Operations: Paper 54.7 49.7 141.1 142.3 Packaging and Paperboard 42.5 40.0 94.1 118.4 Distribution and School and Office Products 8.5 21.6 43.6 70.0 -------- -------- -------- -------- 105.7 111.3 278.8 330.7 Other revenue - corporate 3.4 1.7 6.6 8.0 General corporate expense (11.8) (15.0) (39.0) (45.5) Interest and debt expense (25.9) (12.9) (73.9) (40.3) -------- -------- -------- -------- Total corporate and other (34.3) (26.2) (106.3) (77.8) -------- -------- -------- -------- EARNINGS FROM CONTINUING OPERATIONS BEFORE INCOME TAXES $ 71.4 $ 85.1 $ 172.5 $ 252.9 ======== ======== ======== ======== STATEMENT OF CASH FLOWS (All dollar amounts in millions) Three Quarters Ended --------------------- Sept 28, Sept 29, 1997 1996 Cash flows from operating activities: Net earnings $ 118.3 $ 166.1 Adjustments to reconcile net earnings to net cash provided by operating activities: Depreciation and depletion of property, plant and equipment 179.9 145.3 Amortization of other assets 34.1 36.4 Deferred income taxes 24.3 39.9 Investees - earnings and dividends (4.4) 5.3 Discontinued operations (5.4) Other (15.4) (18.7) Change in current assets and liabilities: Accounts receivable (110.8) (54.3) Inventories 31.6 (1.5) Other current assets 3.4 (6.9) Accounts payable and accrued liabilities (17.8) (71.3) Cash (used in) discontinued operations (1.5) ------- ------- Net cash provided by operating activities: 243.2 233.4 Cash flows from investing activities: Capital expenditures (297.1) (278.0) Additions to equipment rented to others (24.8) (31.3) Proceeds from sale of business 19.6 Other (15.3) 11.1 ------- ------- Net cash (used in) investing activities (337.2) (278.6) Cash flows from financing activities: Additional borrowings 564.2 32.8 Payments on borrowings (537.9) (73.8) Notes payable 114.2 Cash dividends paid (47.1) (46.2) Common shares issued 41.9 11.9 Common shares purchased (41.5) (50.2) ------- ------- Net cash provided by (used in) financing activities 93.8 (125.5) ------- ------- (Decrease) in cash and cash equivalents (.2) (170.7) Cash and cash equivalents at beginning of year 20.6 292.6 ------- ------- Cash and cash equivalents at end of third quarter $ 20.4 $ 121.9 ======= ======= # # # -----END PRIVACY-ENHANCED MESSAGE-----