-----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, OqmL2yBZzJbd1iiIf9p3Z3pvfy4R0byggMVLrzPGmUGuH2n1pkUqEC5DMlLbQiiU g4q0qklRNpwxEMCtnC56dA== 0000745308-94-000005.txt : 19941116 0000745308-94-000005.hdr.sgml : 19941116 ACCESSION NUMBER: 0000745308-94-000005 CONFORMED SUBMISSION TYPE: 10-Q PUBLIC DOCUMENT COUNT: 2 CONFORMED PERIOD OF REPORT: 19940930 FILED AS OF DATE: 19941114 SROS: NYSE 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: 94559717 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 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 September 30, 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 September 30, 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 - September 30, 1994 and December 31, 1993 3 Consolidated Statement of Income and Retained Earnings - Three Months and Nine Months ended September 30, 1994 and 1993 4 Consolidated Statement of Cash Flows - Nine months ended September 30, 1994 and 1993 5 Notes to Consolidated Financial Statements 6 Management's Discussion and Analysis of Consolidated Financial Condition and Results of Operations 8 PART II Other Information 14 ST. JOE PAPER COMPANY CONSOLIDATED BALANCE SHEET (Dollars in thousands) September 30 December 31 ASSETS 1994 1993 (Unaudited) Current Assets: Cash and cash equivalents $ 40,921 $ 48,304 Short-term investments 81,117 66,307 Accounts receivable 80,240 74,127 Inventories 49,731 69,398 Other assets 31,672 25,720 Total Current Assets 283,681 283,856 Investment and Other Assets: Marketable securities 179,410 159,523 Other assets 45,829 40,170 Total Investments and Other Assets 225,239 199,693 Property, Plant and Equipment, Net 1,020,715 1,007,722 Total Assets $ 1,529,635 $ 1,491,271 LIABILITIES AND STOCKHOLDERS' EQUITY Current Liabilities: Accounts payable $ 39,754 $ 41,515 Accrued liabilities 37,546 27,838 Income taxes payable 4,767 2,737 Long-term debt due within one year 15,865 21,309 Total Current Liabilities 97,932 93,399 Accrued Casualty Reserves and Other Liabilities 12,808 11,063 Long-Term Debt due After One Year 37,971 38,947 Deferred Income Taxes and Income Tax Credits 210,451 205,531 Minority Interest in Consolidated Subsidiaries 247,963 238,878 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 870,243 851,511 Net unrealized gains on debt and marketable equity securities 43,553 43,228 Total Stockholders' Equity 922,510 903,453 Total Liabilities and Stockholders' Equity $ 1,529,635 $ 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 Nine Months ended September 30 ended September 30 1994 1993 1994 1993 Net Sales $ 122,546 $ 98,065 $ 367,918 $ 308,862 Operating Revenues 43,711 43,117 131,592 129,566 Net Sales and Operating revenues 166,257 141,182 499,510 438,428 Cost of Sales 109,748 92,126 317,541 286,858 Operating Expenses 33,796 28,815 98,176 94,920 Cost of Sales and Operating Expenses 143,544 120,941 415,717 381,778 Gross Profit 22,713 20,241 83,793 56,650 Selling, General and Administrative Expenses 14,826 13,368 42,915 42,400 Operating Profit 7,887 6,873 40,878 14,250 Other Income (Expense): Dividends 555 535 1,620 1,590 Interest income 3,159 2,472 7,993 7,252 Interest expense (1,035) (82) (3,002) (3,480) Gain on sales and other dispositions of property, plant and equipment 4,295 63 5,054 954 Other, net 1,087 726 2,877 3,195 8,061 3,714 14,542 9,511 Income before Income Taxes, Minority Interest and Cumulative Effect of Change in Accounting Principle 15,948 10,587 55,420 23,761 Provision for Income Taxes 5,372 9,413 20,187 13,974 Income before Minority Interest and Cumulative Effect of Change in Accounting Principle 10,576 1,174 35,233 9,787 Income Applicable to Minority Interest in Consolidated Subsidiaries 3,056 2,049 11,926 6,447 Income before Cumulative Effect of Change in Accounting Principle 7,520 (875) 23,307 3,340 Cumulative Effect of Change in Accounting Principle for Income Taxes --- --- --- 20,518 Net Income $ 7,520 $ (875) $ 23,307 $ 23,858 Retained Earnings at Beginning of Period 864,248 846,651 851,511 824,968 Dividends 1,525 1,525 4,575 4,575 Retained Earnings at End of Period $ 870,243 $ 844,251 $ 870,243 $ 844,251 Per Share Data: Dividends $ 0.05 $ 0.05 $ 0.15 $ 0.15 Income before Cumulative Effect of Change in Accounting Principle $ 0.25 $ (0.03) $ 0.76 $ 0.10 Cumulative Effect of Change in Accounting Principle --- --- --- 0.68 Net Income $ 0.25 $ (0.03) $ 0.76 $ 0.78 Number of Common Shares Outstanding 30,498,650 30,498,650 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) Nine Months ended September 30 1994 1993 Cash Flows from Operating Activities: Net Income $ 23,307 $ 23,858 Adjustments to reconcile net income to cash provided by operating activities: Cumulative effect of a change in accounting principle $ --- $ (20,518) Depreciation and depletion 46,707 48,899 Minority interest in income 11,926 6,447 Gain on sale of property (5,054) (954) Increase in deferred income taxes 4,920 15,513 Changes in operating assets and liabilities: Accounts receivable (6,113) 8,529 Inventories 19,667 10,169 Other assets (11,611) (19,823) Accounts payable, accrued liabilities and casualty reserves 9,692 9,216 Increase in income taxes payable 2,030 1,207 Cash Provided by Operating Activities 95,471 82,543 Cash Flows from Investing Activities: Purchases of property, plant and equipment (64,015) (75,759) Purchases of investments (111,465) (88,461) Proceeds from sales of property 9,369 11,033 Proceeds from sales of investments 75,521 75,928 Cash Used in Investing Activities (90,590) (77,259) Cash Flows from Financing Activities: Net change in short-term borrowings (5,437) (5,100) Dividends paid to stockholders (4,575) (4,575) Repayment of long-term debt (983) (1,313) Dividends paid to minority interest (1,269) (1,267) Cash Used in Financing Activities (12,264) (12,255) Net (Decrease in Cash and Cash Equivalents (7,383) (6,971) Cash and Cash Equivalents at Beginning of Period 48,304 42,137 Cash and Cash Equivalents at End of Period $ 40,921 $ 35,166 Supplemental Disclosure of Cash Flow Information: Cash paid during the year for certain expense items is: Interest $ 2,815 $ 2,704 Income taxes $ 23,661 $ 1,573 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 September 30, 1994 and December 31, 1993 and the results of operations and cash flows for the three and nine month periods ended September 30, 1994 and 1993. 2. The results of operations for the three and nine month periods ended September 30, 1994 and 1993 are not necessarily indicative of the results that may be expected for the full year. 3. Inventories at September 30, 1994 and December 31, 1993: September 30 December 31 1994 1993 Manufactured paper products and associated raw materials $ 26,402 $ 30,782 Materials and supplies 22,836 27,407 Sugar 493 11,209 $ 50,772 $ 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. Certain self-insurance risks with respect to losses for third party liability, property damage and group health insurance provided to employees have been retained by the Company. In the opinion of management, none of these are expected to have a material adverse effect on the Company's consolidated financial position or results of operations. 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. - 6 - ST. JOE PAPER COMPANY NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Unaudited) (Dollars in thousands ) The Company is subject to substantial costs arising out of environmental laws and regulations, including obligations to remove or limit the effects on the environment of the disposal or release of certain 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. It is not possible to quantify future environmental costs because many issues relate to actions by third parties or changes in environmental regulation. Based on information presently available, management believes that the ultimate disposition of currently known matters will not have a material effect on the consolidated financial position or liquidity of the Company, but could be material to the results of operations in any one period. The aggregate accruals relating to environmental costs were $6.7 million as of September 30, 1994 and December 31, 1993. Environmental liabilities are paid over an extended period and the timing of such payments cannot be predicted with any confidence. - 7 - MANAGEMENTS DISCUSSION AND ANALYSIS OF CONSOLIDATED FINANCIAL CONDITION AND RESULTS OF OPERATIONS Net Sales and Operating Revenues for the quarter ended September 30, 1994 increased $25.1 million (17.8%) compared to the same 1993 period. Net sales and operating revenues for the nine months ended September 30, 1994 increased $61.1 million (13.9%) compared to the same 1993 period. Cost of Sales and Operating Expenses increased $22.6 million (18.7%) for the quarter ended September 30, 1994 compared to the September 30, 1993 quarter which were 86.3% of net sales and operating revenue for the 1994 quarter and 85.7% for the 1993 quarter. The cost of sales and operating expenses for the nine months ended September 30, 1994 were up $33.9 million (8.9%) compared to the same 1993 period and were 83.2% of net sales and operating revenues in 1994 and 87.1% in 1993. Selling, General and Administrative Expenses for the third quarter of 1994 were up $1.5 million (10.9%) compared to the corresponding 1993 quarter. These expenses for the year to date were up $0.5 million (1.2%) compared to 1993. Operating Profit for the quarter ended September 30, 1994 compared to the same 1993 period for the Company was higher by $1.0 million (14.7%) and for the nine month period by $26.6 million (186.9%). The operating results for the Company by industry segments for the comparable three month and nine month periods follows (in millions of dollars). FOREST PRODUCTS Quarter Ended September 30, 1994 %Increase 1994 1993 (Decrease) Net Sales and Operating Revenue $101.4 $ 75.9 33.6 Cost of Sales and Operating Expenses 94.6 78.0 21.3 Selling, General and Administrative Expenses 8.9 7.3 22.4 Operating Profit (Loss) (2.2) (9.4) 77.1 -8- Nine Months Ended September 30, 1994 %Increase 1994 1993 (Decrease) Net Sales and Operating Revenue $278.9 $232.9 19.8 Cost of Sales and Operating Expenses 262.4 235.0 11.7 Selling, General and Administrative Expense 23.6 23.2 1.9 Operating Profit (Loss) ( 7.2) (25.3) 71.7 Net sales and operating revenue on sales to outside customers in the Company's paper mill for the quarter ended September 30, 1994 and nine month period 1994 compared to the same 1993 periods, were up 39.7% and up 23.1% respectively, reflecting an increase in tons sold of 32.2% for the quarter and 23.9% year to date and an increase in selling price of 26.1%, for the quarter and year to date of 8.2%. Revenue from sales of crest white for the quarter and nine month period was up 46.7% and up 24.0% respectively, while kraft liner sales for the same periods were up 3.6% and 3.4%, respectively. Revenue by the Company's container operations were up 16.2% this nine month period with tons sold up 12.5% and selling price per ton up 3.3%. Timber revenue on sales to outside customers for the nine month period, by our land company was up 8.5% in 1994 over 1993 on increased tons sold of 9.9% but offset in part by a decrease of 1.3% in the per ton selling price. The cost of sales and operating expenses for the nine month period at the mill increased 7.8% and consisted of the higher cost for water and energy costs, baled waste and chemicals, workman's compensation insurance and repair material expenses. In October, the selling price of kraft linerboard was increased $40 per ton by virtually all companies in the industry, including this Company. This is the fourth increase in the last thirteen months and will have a positive affect on the operating results of this segment of the Company for the fourth quarter of 1994. TRANSPORTATION Quarter Ended September 30, 1994 %Increase 1994 1993 (Decrease) Net Sales and Operating Revenue $ 43.7 $ 43.1 1.4 Cost of Sales and Operating Expenses 33.8 28.8 17.2 Selling, General and Administrative Expenses 3.7 3.8 (2.7) Operating Profit 6.2 10.5 (40.9) -9- Nine Months Ended September 30, 1994 %Increase 1994 1993 (Decrease) Net Sales and Operating Revenue $131.7 $129.6 1.6 Cost of Sales and Operating Expenses 98.2 95.0 3.4 Selling, General and Administrative Expenses 12.2 12.2 --- Operating Profit 21.3 22.4 (5.2) Operating revenue for the third quarter, 1994 and nine month period compared to like 1993 periods increased 1.7% and 1.8%, respectively, at Florida East Coast Railway Company (FEC). This revenue increase for the nine month period of 1994 over 1993 is in the rail traffic volumes of carload rock being up 8.9%, and other carloads up 2.0%. The rail traffic volumes of intermodel units and carload automobiles had a slight decrease of 1.3% and 1.2% respectively. Apalachicola Northern Railroad Company (ANRR) net revenue for the year to date period increased 1.0% mainly on increase in woodchips, pulpwood and recyclable cars handled. Operating expenses for the FEC increased 3.2% for the nine month period and selling, general and administrative expenses increased 1.1%. These expense increases were in the area of depreciation, property taxes, casualty and personal injury insurance. ANRR operating expenses for the 1994 nine months period over 1993 were up 5.9% and selling, general and administrative expenses were down 24.0%. The primary areas of increase in operating expenses were costs connected with train derailment, track laying and locomotive maintenance. SUGAR Quarter Ended September 30, 1994 %Increase 1994 1993 (Decrease) Net Sales and Operating Revenue $ 8.7 $ 9.2 ( 5.3) Cost of Sales and Operating Expenses 6.9 5.4 28.8 Selling, General and Administrative Expenses 0.8 0.7 1.5 Operating Profit 1.0 3.1 (67.1) -10- Nine Months Ended September 30, 1994 %Increase 1994 1993 (Decrease) Net Sales and Operating Revenue $ 36.7 $34.1 7.7 Cost of Sales and Operating Expenses 29.3 26.8 9.3 Selling, General and Administrative Expenses 2.6 2.5 2.9 Operating Profit 4.8 4.8 1.3 Net sales and operating revenue in the Sugar segment were up for the nine month period due to an increase in tons sold of 6.9% and a 0.9% increase in sales price. Cost of sales and operating expenses were up for the nine months period due to increase in dead season expenses, that caused these expenses to increase by 3.7% per ton. In addition, sales of molasses were up 54.3% per ton of sugar. Selling, general and administration expenses increased mainly in the area of pollution control. COMMUNICATIONS Quarter Ended September 30, 1994 %Increase 1994 1993 (Decrease) Net Sales and Operating Revenue $ 7.6 $ 7.0 7.5 Cost of Sales and Operating Expenses 4.6 5.1 (9.4) Selling, General and Administrative Expenses 1.0 1.0 (4.7) Operating Profit 2.0 0.9 115.7 Nine Months Ended September 30, 1994 Net Sales and Operating Revenue $22.6 $22.0 2.7 Cost of Sales and Operating Expenses 13.9 14.9 (6.4) Selling, General and Administrative Expenses 3.1 3.1 1.4 Operating Profit 5.6 4.1 37.0 Net sales and operating revenue for the Communications segment were up for the nine month period. The major item included in this increase was reduced payments to other telephone companies for call termination services but also there was a general increase in all services including local service, long distance and access charges. Cost of sales and operating expenses were lower for the 1994 nine month period on the reduction in the extensive outside plant maintenance program at one of the operating companies. The small increase in selling, general and administrative expenses for the nine month period was attributable to general inflationary influences. -11- REAL ESTATE Quarter Ended September 30, 1994 %Increase 1994 1993 (Decrease) Net Sales and Operating Revenue $ 5.6 $ 6.6 (16.1) Cost of Sales and Operating Expenses 4.3 4.3 ( 1.5) Selling, General and Administrative Expenses 0.4 0.5 ( 7.4) Operating Profit 0.9 1.9 (52.3) Nine Months Ended September 30, 1994 Net Sales and Operating Revenue $ 31.3 $ 21.7 43.8 Cost of Sales and Operating Expenses 13.4 11.9 12.3 Selling, General and Administrative Expenses 1.5 1.5 ( 2.9) Operating Profit 16.4 8.3 97.7 In the Real Estate segment of the Company, Gran Central, Florida East Coast Industries, Inc.'s real estate subsidiary, had a 111.4% increase ($15.1 million) in net sales and operating revenue for the nine month period in 1994 over the same 1993 period. Of this increase, sales of real estate were up 739.9% and rental and other income was up 24.2% Southwood Properties, the Company's real estate division, had a decrease in net sales and operating revenue of 68.9%. This decrease was primarily caused by property sales being down by 72.2% and timber sales being down by 52.4%. Expenses at Gran Central increased 25.7% for the nine month period of 1994 over 1993 and are attributable mainly to increased depreciation, property tax, commissions, utilities, insurance, uncollectible revenue and maintenance expense. Southwood's expenses were down 45.4% on lower salaries, depreciation and for the cost of property sold which is attributable to the decrease in realty sales for the first nine months of 1994 over 1993. OTHER INCOME for the quarter ended September 30, 1994 was up $4.3 million (117.1%) as compared to the same 1993 period. For the nine months ended September 30, 1994, other income was up $5.0 million (52.9%) compared to the same 1993 period. The major reason for this increase for the nine months 1994 period over the like 1993 period was in net interest income (interest income less interest expense) being up $1.2 million (32.3%) and gain on sale and other dispositions of property, plant and equipment having increased $4.1 million (429.8%). -12- TAXES for the third quarter were down $4.0 million (42.9%) and up $6.2 million (44.5%) for the nine month period. The effective tax rate for the third quarter 1994 was 33.7% compared to 88.9% for the third quarter 1993. The effective tax rate for the nine month period is 36.4% for 1994 and 58.8% for 1993. The high effective tax rate for both the quarter and nine month period in 1993 reflected the retroactive increase in the corporate federal income tax rate from 34% to 35%, effective January 1, 1993 which resulted in additional income tax expense for the 1993 third quarter. This amount in 1993 was further increased by an increase in deferred income taxes resulting from the federal income tax rate increase as required by Statement of Financial Accounting Standards No. 109, "Accounting for Income Taxes." NET INCOME (LOSS) BEFORE CUMULATIVE EFFECT OF CHANGE IN ACCOUNTING PRINCIPLE for the third quarter of 1994 of $7.5 million was $8.4 million more than the same 1993 period or up 959.4%. The nine month period ended September 30, 1994 shows an increase of $20.0 million or up 597.8%. The earnings per share for the nine month period ended September 30th of $0.76 is $0.66 more than the like 1993 period. FINANCIAL POSITION The Company continues to have a strong current asset position. Current assets were $283.7 million, down $0.2 million or 0.1% from December 31, 1993. The Company's working capital ratio at September 30, 1994 was 2.9 to 1, a decrease from December 31, 1993 when it was 3.0 to 1. The Company had a net increase in property, plant and equipment at September 30, 1994 of $13.0 million over the December 31, 1993 balance. The Company's net investment in marketable securities has increased $19.9 million compared to December 31, 1993. This was primarily attributable to the investment of proceeds received from Gran Central's sales of real estate as reported in prior reports. The Company has a minimum amount of long-term debt. The non-current long-term debt at September 30, 1994 of $38.0 million was $1.0 million less than at December 31, 1993. There were no other significant changes in the Balance Sheet at September 30, 1994 over December 31, 1993. Stockholder's equity at September 30, 1994 was $922.5 million or $30.25 per share, an increase of $19.1 million or $0.63 per share over $903.5 million or $29.62 per share at December 31, 1993. -13- 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 November 11, 1994 Date -14- EX-27 2
5 1000 QTR-3 DEC-31-1994 SEP-30-1994 40921 81117 80240 0 49731 283681 1630297 609582 1529635 97932 37971 8714 0 0 870243 1529635 367918 499510 317541 415717 0 0 3002 55420 20187 23307 0 0 0 23307 .76 .76
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