-----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, n8nhEPPPd93p0MKGselP4zoiHqh1XkeiOhz2jr2lQORMxZBX0oG3DEgaG50ZA0MG LOp0VqqrYPb6juO5f8v/DA== 0000745308-94-000003.txt : 19940601 0000745308-94-000003.hdr.sgml : 19940601 ACCESSION NUMBER: 0000745308-94-000003 CONFORMED SUBMISSION TYPE: 10-Q PUBLIC DOCUMENT COUNT: 1 CONFORMED PERIOD OF REPORT: 19940331 FILED AS OF DATE: 19940513 FILER: COMPANY DATA: COMPANY CONFORMED NAME: ST JOE PAPER CO CENTRAL INDEX KEY: 0000745308 STANDARD INDUSTRIAL CLASSIFICATION: 2631 IRS NUMBER: 590432511 STATE OF INCORPORATION: FL FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 10-Q SEC ACT: 1934 Act SEC FILE NUMBER: 001-10466 FILM NUMBER: 94527890 BUSINESS ADDRESS: STREET 1: 1650 PRUDENTIAL DR STE 400 CITY: JACKSONVILLE STATE: FL ZIP: 32207 BUSINESS PHONE: 9043966600 MAIL ADDRESS: STREET 2: P O BOX 1380 CITY: JACKSONVILLE STATE: FL ZIP: 32201 10-Q 1 MARCH 31, 1994 10-Q REPORT 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 March 31, 1994 [ ] 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 0-12001 St. Joe Paper Company (Exact name of registrant as specified in its charter) Florida 59-0432511 (State or other jurisdiction of (I.R.S. Employer incorporation or organization) Identification No.) Suite 400, 1650 Prudential Drive, Jacksonville, Florida 32207 (Address of principal executive offices) (Zip Code) (904) 396-6600 (Registrant's telephone number, including area code) None (Former name, former address and former fiscal year, if changed since last report) 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. YES X NO APPLICABLE ONLY TO CORPORATE ISSUERS: As of March 31, 1994 there were 30,498,650 shares of common stock, no par value, outstanding. ST. JOE PAPER COMPANY INDEX Page No. PART I Financial Information: Consolidated Balance Sheet - March 31, 1994 and December 31, 1993 3 Consolidated Statement of Income and Retained Earnings - Three Months ended March 31, 1994 and 1993 4 Consolidated Statement of Cash Flows - Three months ended March 31, 1994 and 5 1993 Notes to Consolidated Financial Statements 6 Management's Discussion and Analysis of Consolidated Financial Condition and Results of Operations 8 PART II Other Information 12 ST. JOE PAPER COMPANY CONSOLIDATED BALANCE SHEET (Dollars in thousands) March 31 December 31 ASSETS 1994 1993 (Unaudited) Current Assets: Cash and cash equivalents $ 60,605 $ 48,304 Short-term investments 69,501 66,307 Accounts receivable 81,300 74,127 Inventories 75,182 69,398 Other assets 20,456 25,720 Total Current Assets 307,044 283,856 Investment and Other Assets: Marketable securities 150,750 159,523 Other assets 39,917 40,170 Total Investments and Other Assets 190,667 199,693 Property, Plant and Equipment, Net 1,016,385 1,007,722 Total Assets $1,514,096 1,491,271 LIABILITIES AND STOCKHOLDERS' EQUITY Current Liabilities: Accounts payable $ 39,738 $ 41,515 Accrued liabilities 27,308 27,838 Income taxes payable 6,273 2,737 Long-term debt due within one year 27,712 21,309 Total Current Liabilities 101,031 93,399 Accrued Casualty Reserves and Other Liabilities 11,834 11,063 Long-Term Debt due After One Year 38,616 38,947 Deferred Income Taxes and Income Tax Credits 208,496 205,531 Minority Interest in Consolidated Subsidiaries 244,084 238,878 Stockholders' Equity: Common stock, no par value; 60,000,000 shares authorized;30,498,650 shares issued and outstanding 8,714 8,714 Retained earnings 858,146 851,511 Net unrealized gains on debt and marketable equity securities 43,175 43,228 Total Stockholders' Equity 910,035 903,453 Total Liabilities and Stockholders' Equity $1,514,096 $1,491,271 See accompanying notes. -3- ST. JOE PAPER COMPANY CONSOLIDATED STATEMENT OF INCOME AND RETAINED EARNINGS (Unaudited) (Dollars in thousands except per share amounts) Three Months ended March 31 1994 1993 Net Sales and Operating Revenues $167,368 $146,698 Cost of Sales and Operating Revenues 134,526 126,654 Gross Profit 32,842 20,044 Selling, General and Administrative Expenses 13,822 14,906 Operating Profit 19,020 5,138 Other Income (Expense): Dividends 534 229 Interest income 2,504 2,775 Interest expense (963) (979) Gain on sales and other dispositions of property, plant and equipment 384 977 Other, net 1,087 1,321 3,546 4,323 Income before Income Taxes, Minority Interest and Cumulative Effect of Change in Accounting Principle 22,566 9,461 Provision for Income Taxes 7,903 3,636 Income before Minority Interest and Cumulative Effect of Change in Accounting Principle 14,663 5,825 Income Applicable to Minority Interest in Consolidated Subsidiaries 6,503 2,363 Income before Cumulative Effect of Change in Accounting Principle 8,160 3,462 Cumulative Effect of Change in Accounting Principle for Income Taxes --- 20,518 Net Income $ 8,160 $ 23,980 Retained Earnings at Beginning of Period 851,511 824,968 Dividends 1,525 1,525 Retained Earnings at End of Period $858,146 $847,423 Per Share Data: Dividends $ 0.05 $ 0.05 Income before Cumulative Effect of Change in Accounting Principle $ 0.27 $ 0.11 Cumulative Effect of Change in Accounting Principle --- $ 0.68 Net Income $ 0.27 $ 0.79 Number of Common Shares Outstanding 30,498,650 30,498,650 See accompanying notes. -4- ST. JOE PAPER COMPANY CONSOLIDATED STATEMENT OF CASH FLOWS (Unaudited) (Dollars in thousands except per share amounts) Three Months ended March 31 Cash Flows from Operating Activities: Net Income $8,160 $23,980 Adjustments to reconcile net income to cash provided by operating activities: Cumulative effect of a change in accounting principle --- (20,518) Depreciation and depletion 5,533 16,025 Minority interest in income 6,503 2,363 Gain on sale of property (384) (977) Increase in deferred income taxes 2,965 7,464 Changes in operating assets and liabilities: Accounts receivable (7,173) (1,534) Inventories (5,784) (6,073) Other assets 5,517 2,314 Accounts payable, accrued liabilities and casualty reserves (1,536) (1,121) Income taxes payable 3,536 --- Cash Provided by Operating Activities 27,337 21,923 Cash Flows from Investing Activities: Purchases of property, plant and equipment (25,582) (25,049) Purchases of investments (16,490) (28,411) Proceeds from sales of property 1,771 2,479 Proceeds from sales of investments 21,148 31,439 Cash Used in Investing Activities (19,153) (19,542) Cash Flows from Financing Activities: Net change in short-term borrowings 6,398 4,374 Dividends paid to stockholders (1,525) (1,525) Repayment of long-term debt (326) (315) Dividends paid to minority interest (430) (423) Cash Provided by Financing Activities 4,117 2,111 Net Increase in Cash and Cash Equivalents 12,301 4,492 Cash and Cash Equivalents at Beginning of Period 48,304 42,137 Cash and Cash Equivalents at End of Period $60,605 $ 46,629 Supplemental Disclosure of Cash Flow Information: Cash paid during the year for certain expense items is: Interest $ 838 $ 777 Income taxes $ 2,563 $ 916 See accompanying notes -5- ST. JOE PAPER COMPANY NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Unaudited) (Dollars in thousands ) 1. In the opinion of the Company, the accompanying unaudited consolidated financial statements contain all adjustments (consisting of only normal recurring accruals) necessary to present fairly the financial position as of March 31, 1994 and December 31, 1993 and the results of operations and cash flows for the three month period ended March 31, 1994 and 1993. 2. The results of operations for the three month period ended March 31, 1994 and 1993 are not necessarily indicative of the results that may be expected for the full year. 3. Inventories at March 31, 1994 and December 31, 1993: March 31 December 31 1994 1993 Manufactured paper products and associated raw materials $ 29,945 $ 30,782 Materials and supplies 25,436 27,407 Sugar 19,801 11,209 $ 75,182 $ 69,398 4. The Company and its subsidiaries are involved in litigation on a number of matters and are subject to certain claims which arise in the normal course of business, none of which, in the opinion of management, is expected to have a material adverse effect on the Company's consolidated financial position or results of operations. The Company has retained certain self-insurance risks with respect to losses for third party liability, property damage and group health insurance provided to employees. -6- ST. JOE PAPER COMPANY NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Unaudited) (Dollars in thousands ) The Company is subject to costs arising out of environmental laws and regulations, which include obligations to remove or limit the effects on the environment of the disposal or release of certain wastes or substances at various sites. It is the Company's policy to accrue and charge against earnings environmental cleanup costs when it is probable that a liability has been incurred and an amount is reasonably estimable. As assessments and cleanups proceed, these accruals are reviewed and adjusted, if necessary, as additional information becomes available. The Company is currently a party to, or involved in, legal proceedings directed at the cleanup of two Superfund sites. The Company has accrued its allocated share of the total estimated cleanup costs for these two sites. Based upon management's evaluation of the other potentially responsible parties, the Company does not expect to incur additional amounts even though the Company has joint and several liability. Other proceedings involving environmental matters such as alleged discharge of oil or waste material into water or soil are pending against the Company. It is not possible to quantify future environmental costs because many issues relate to actions by third parties or changes in environmental regulation. However, based on information presently available, management believes that the ultimate disposition of currently known matters will not have a material effect on the financial position or liquidity of the Company , but could be material to the results of operation of the Company in any one period. As of March 31, 1994 and December 31, 1993, the aggregate environmental related accruals were $6.7 million. Environmental liabilities are paid over an extended period and the timing of such payments cannot be predicted with any confidence. -7- MANAGEMENT'S DISCUSSION AND ANALYSIS OF CONSOLIDATED FINANCIAL CONDITION AND RESULTS OF OPERATIONS Net Sales and Operating Revenues for the quarter ended March 31, 1994 increased $20.7 million (14.1%) compared to the same 1993 period. Cost of Sales and Operating Expenses increased $7.8 million (6.2%) for the quarter ended March 31, 1994 compared to the March 31, 1993 quarter which were 80.4% of net sales and operating revenue for the 1994 quarter and 86.3% for the 1993 quarter. Selling, General and Administrative Expenses for the first quarter of 1994 were $1.1 million (7.1%) lower when compared to the corresponding 1993 quarter. Operating Profit for the quarter ended March 31, 1994 compared to the same 1993 period was higher by $13.9 million (270.2%). The operating results for the Company by industry segments for the comparable three month period follows (in millions of dollars). FOREST PRODUCTS Quarter Ended March 31 %Increase 1994 1993 (Decrease) Net Sales and Operating Revenue $ 84.5 $ 79.1 6.8 Cost of Sales and Operating Expenses 82.5 76.7 7.6 Selling, General and Administrative Expenses 7.4 8.6 (14.0) Operating Profit (Loss) (5.4) (6.2) 13.1 Net sales and operating revenue in the Company's paper mill operations for the quarter ended March 31, 1994 were up 0.9% due to tons sold outside being up 16.3% and offset slightly by the average selling price being down 2.7%. Crest white sales were 50% of total tons sold in 1994 compared to 44% in 1993. Sales by the Company's container operations were up 4.1% on an increase of 4.8% in tons sold partially offset by a 0.6% decrease in selling price. The revenue on timber sales to outside customers by our land company was up 72.1% on a 51.3% increase in tons sold and by a 13.8% increase in per ton selling price. The cost of sales and operating expenses increased 7.6% for the 1994 quarter over the same 1993 period as most major expense items increased because of the increase in production. -8- The outlook for linerboard continues to look better as the industry had the first price increase in sometime in October, 1993 of $25 a ton followed by a $30 a ton increase in March, 1994. The container operations improved the sales price per ton by $5.42 in the first quarter of 1994 over the average price per ton they received in the year 1993. TRANSPORTATION Quarter Ended March 31 %Increase 1994 1993 (Decrease) Net Sales and Operating Revenue $ 43.1 $ 43.3 (0.4) Cost of Sales and Operating Expenses 31.8 32.9 (3.3) Selling, General and Administrative Expenses 3.8 3.8 0.4 Operating Profit 7.5 6.6 13.4 Operating revenue for the three (3) month period ended March 31, 1994 remained relatively flat at the Florida East Coast Railway Company (FEC) compared to the same 1993 quarter. Traffic due to Hurricane Andrew was a revenue factor in the first quarter of 1993 but is no longer a factor in making revenue comparisons. Apalachicola Northern Railroad Company (ANRR) net revenue for the quarter decreased 4.6% on a decrease in coal, tall oil and stone and clay product shipments. Operating expenses for the FEC decreased 3.8% for the first quarter of 1994 from 1993 and selling, general and administrative were up 0.5%. ANRR operating expenses for the three month period were up 3.8% and selling, general and administrative expenses were down 2.6%. SUGAR Quarter Ended March 31 %Increase 1994 1993 (Decrease) Net Sales and Operating Revenue $ 13.4 $ 12.1 10.9 Cost of Sales and Operating Expenses 10.8 9.6 12.3 Selling, General and Administrative Expenses 1.1 1.0 7.0 Operating Profit 1.5 1.4 4.5 Net sales and operating revenue in the sugar segment was up for the 1994 three month period due to an increase in tons sold of 10.9% and a 0.2% increase in the sales price per ton. -9- Cost of sales and operating expenses in 1994 were up due primarily to an increase in dead season expense from the prior year, which was partially offset by an increase in molasses sales. Molasses is a by-product of the production of raw sugar process and is accounted for as a reduction of the cost of sales and operating expense. COMMUNICATIONS Quarter Ended March 31 %Increase 1994 1993 (Decrease) Net Sales and Operating Revenue $ 7.4 $ 7.3 0.8 Cost of Sales and Operating Expenses 4.7 4.7 0.1 Selling, General and Administrative Expenses 1.1 1.0 0.7 Operating Profit 1.7 1.6 2.7 Net sales and operating revenue for this segment of the Company covering the first quarter 1994 was up over the prior year quarter and was attributable to access line growth. Cost of sales and operating expenses and selling, general and administrative expenses were basically the same this period as last year. REAL ESTATE Quarter Ended March 31 %Increase 1994 1993 (Decrease) Net Sales and Operating Revenue $ 19.5 $ 5.5 253.1 Cost of Sales and Operating Expenses 5.2 3.4 54.7 Selling, General and Administrative Expenses 0.5 0.5 6.5 Operating Profit 13.7 1.6 * * Not Meaningful In the Real Estate segment of the Company, Gran Central, Florida East Coast Industries, Inc.'s real estate subsidiary, had a 377.5% increase in net sales and operating revenues in 1994 from 1993 which is mostly from increased sales of realty property. Southwood Properties, the Company's real estate division had a decrease in net sales and operating revenue caused by a decrease in property sales. -10- Cost of sales and operating expenses were up 55.1% and selling, general and administrative expenses were up 12.1 at Gran Central on costs of real property sold and costs connected to the newly rented buildings, such as, property taxes, commissions and depreciation. In our Southwood Properties operations cost of sales and operating expense were up 51.2% and selling, general and administrative expenses were down 6.5% on increased cost of property sales. OTHER INCOME for the quarter ended March 31, 1994 was down $0.8 million (18.0%) as compared to the same 1993 period. This small decrease was in gain on sales and dispositions of property, plant and equipment, miscellaneous items and interest income. TAXES for the first quarter 1994 were up $4.3 million (117.4%) as a direct result of the increase in income. The effective tax rate for the three month period is 35.0% for 1994 and was 38.4% for 1993. NET INCOME BEFORE CUMULATIVE EFFECT OF CHANGES IN ACCOUNTING PRINCIPLE for the first quarter of 1994 of $8.2 million was $4.7 million more than the same 1993 period or up 135.7%. The earnings per share for the three month period ended March 31, 1994 of $0.27 are $0.16 more than the like 1993 period. FINANCIAL POSITION The Company continues to have a strong current asset position. Current assets were $307.0 million, up $23.2 million or 8.2% from December 31, 1993. The Company's working capital ratio at March 31, 1994 was 3.0 to 1, the same ratio that it was at December 31, 1993. The Company had a net increase in property, plant and equipment at March 31, 1994 of $8.7 million over the December 31, 1993 balance. The Company has a minimum amount of long-term debt. The noncurrent long-term debt at March 31, 1994 at $38.6 million was $0.3 million less than at December 31, 1993. There were no other significant changes in the Balance Sheet at March 31, 1994 over December 31, 1993. Stockholder's equity at March 31, 1994 was $910.0 million or $29.84 per share, an increase of $6.6 million or $0.22 per share over $903.5 million or $29.62 per share at December 31, 1993. -11- PART II - OTHER INFORMATION Item 1. Legal Proceedings No change from Form 10-K for the year ended December 31, 1993. Item 5. Other Information The Company is not aware of any other matters of significance to be reported hereunder. 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. St. Joe Paper Company (Registrant) S. D. Fraser Vice President and Director D. M. Groos Comptroller May 12, 1994 Date -12- -----END PRIVACY-ENHANCED MESSAGE-----