-----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, I2HPlbNNCAn+ZxmVLC4hLnuW8gwgPInERA4SCpReX7aHfGK6M9lrLaULB6ewqjJo IZMzVUgFBcE3830zj5t62w== 0000950128-96-000009.txt : 19960117 0000950128-96-000009.hdr.sgml : 19960117 ACCESSION NUMBER: 0000950128-96-000009 CONFORMED SUBMISSION TYPE: 10-Q PUBLIC DOCUMENT COUNT: 3 CONFORMED PERIOD OF REPORT: 19951130 FILED AS OF DATE: 19960116 SROS: NASD FILER: COMPANY DATA: COMPANY CONFORMED NAME: TUSCARORA INC CENTRAL INDEX KEY: 0000821538 STANDARD INDUSTRIAL CLASSIFICATION: PLASTICS FOAM PRODUCTS [3086] IRS NUMBER: 251119372 STATE OF INCORPORATION: PA FISCAL YEAR END: 0831 FILING VALUES: FORM TYPE: 10-Q SEC ACT: 1934 Act SEC FILE NUMBER: 000-17051 FILM NUMBER: 96503887 BUSINESS ADDRESS: STREET 1: 800 FIFTH AVE CITY: NEW BRIGHTON STATE: PA ZIP: 15066 BUSINESS PHONE: 4128438200 MAIL ADDRESS: STREET 1: 800 FIFTH AVENUE CITY: NEW BRIGHTON STATE: PA ZIP: 15066 FORMER COMPANY: FORMER CONFORMED NAME: TUSCARORA PLASTICS INC DATE OF NAME CHANGE: 19920703 10-Q 1 TUSCARORA INC. 1 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 November 30, 1995 [ ] 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 0-17051 Tuscarora Incorporated (Exact name of registrant as specified in the charter.) Pennsylvania 25-1119372 (State or other jurisdiction of (IRS Employer incorporation or organization) Identification No.) 800 Fifth Avenue New Brighton, Pennsylvania 15066 (Address of principal executive offices) (Zip Code) 412-843-8200 (Registrant's telephone number, including area code) Not applicable (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 and (2) has been subject to such filing requirements for at least the past 90 days. Yes X No --- --- As of January 2, 1996, 6,239,913 shares of Common Stock, without par value, of the registrant were outstanding. 2 TUSCARORA INCORPORATED INDEX Page Part I. Financial Information: Item 1. Financial Statements Condensed Consolidated Balance Sheets at November 30, 1995 and August 31, 1995 3 Condensed Consolidated Statements of Income - Three months ended November 30, 1995 and November 30, 1994 4 Condensed Consolidated Statements of Cash Flows - Three months ended November 30, 1995 and November 30, 1994 5 Notes to Condensed Consolidated Financial Statements 6-7 Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations 8-9 Part II. Other Information: Item 6. Exhibits and Reports on Form 8-K 10 2 3 PART I. FINANCIAL INFORMATION Item 1. FINANCIAL STATEMENTS -------------------- Tuscarora Incorporated CONDENSED CONSOLIDATED BALANCE SHEETS
November 30, August 31, 1995 1995 ------------ ------------ (Unaudited) ASSETS ------ Current Assets Cash and cash equivalents $ 1,211,468 $ 2,659,767 Trade accounts receivable, net of provision for losses 23,997,346 23,463,267 Inventories 17,304,209 18,018,610 Prepaid expenses and other current assets 2,291,627 1,452,542 ------------ ------------ 44,804,650 45,594,186 Property, Plant and Equipment, net 68,090,822 67,591,194 Other Assets, net 4,462,574 4,535,879 ------------ ------------ Total Assets $117,358,046 $117,721,259 ============ ============ LIABILITIES AND SHAREHOLDERS' EQUITY ----------- --- ------------- ------ Current Liabilities Current maturities of long-term debt $ 4,821,571 $ 4,819,255 Accounts payable 11,825,408 15,515,024 Accrued income taxes 2,014,563 365,986 Accrued payroll and related taxes 459,343 490,190 Other current liabilities 1,678,390 2,013,544 ------------ ------------ 20,799,275 23,203,999 Long-Term Debt - less current maturities 35,408,647 36,510,150 Deferred Income Taxes 1,855,271 1,849,078 Supplemental Pension Benefits 927,591 976,730 Other Long-Term Liabilities 403,267 407,941 ------------ ------------ Total Liabilities 59,394,051 62,947,898 Shareholders' Equity Preferred Stock - par value $.01 per share; authorized shares, 1,000,000; none issued - - Common Stock - without par value; authorized shares, 20,000,000; issued shares, 6,201,460 at November 30, 1995 and 6,200,158 at August 31, 1995 6,201,460 6,200,158 Capital surplus 2,115,205 2,259,502 Retained earnings 49,953,824 46,799,379 Foreign currency translation adjustment (109,170) (100,460) ------------ ------------ 58,161,319 55,158,579 Less cost of reacquired shares of Common Stock; 13,177 shares at November 30, 1995 and 27,532 at August 31, 1995 197,324 385,218 ------------ ------------ Total Shareholders' Equity 57,963,995 54,773,361 ------------ ------------ Total Liabilities and Shareholders' Equity $117,358,046 $117,721,259 ============ ============
Note: The consolidated balance sheet at August 31, 1995 has been taken from the audited financial statements and condensed. See notes to condensed consolidated financial statements. 3 4 Tuscarora Incorporated CONDENSED CONSOLIDATED STATEMENTS OF INCOME (Unaudited)
Three Months Ended November 30, 1995 1994 ------------ ------------ Net Sales $ 47,295,716 $ 38,919,823 Cost of Sales 35,338,756 29,141,468 ------------ ------------ Gross profit 11,956,960 9,778,355 Selling and Administrative Expenses 6,114,268 5,092,917 Interest Expense 708,067 461,889 Other (Income) Expense (8,821) 123,804 ------------ ------------ Total expenses 6,813,514 5,678,610 ------------ ------------ Income before income taxes 5,143,446 4,099,745 Provision for Income Taxes 1,989,001 1,598,901 ------------ ------------ Net income $ 3,154,445 $ 2,500,844 ============ ============ Net income per share $.51 $.41 ==== ==== Weighted average number of shares of Common Stock outstanding 6,181,618 6,148,073 ========= =========
See notes to condensed consolidated financial statements. 4 5 Tuscarora Incorporated CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (Unaudited)
Three Months Ended November 30, 1995 1994 ----------- ----------- Operating Activities Net Income $ 3,154,445 $ 2,500,844 Adjustments to reconcile net income to cash provided by operating activities: Depreciation 2,799,084 2,429,463 Amortization 145,225 177,750 Provision for losses on receivables 120,521 170,000 Increase (decrease) in deferred income taxes 6,193 (76,211) Gain on sale of property, plant and equipment, net (5,755) (6,357) Stock compensation expense 2,840 2,512 Changes in operating assets and liabilities, net of effects of business acquisition: Decrease (increase): Trade accounts receivable (675,543) (1,655,146) Inventories 704,190 (68,974) Prepaid expenses and other current assets (841,380) (1,124,581) Other assets (65,466) 128,216 Increase (decrease): Accounts payable (3,670,349) (3,614,813) Accrued income taxes 1,648,582 1,256,500 Accrued payroll and related taxes (29,855) (1,613) Other current liabilities (289,915) 845,694 Supplemental pension benefits (49,139) (34,154) Other long-term liabilities - - ----------- ----------- Net cash provided by operating activities 2,953,679 929,130 ----------- ----------- Investing Activities Purchase of property, plant and equipment (3,346,623) (3,515,659) Business acquisition, net of cash acquired - (2,226,438) Proceeds from sale of property, plant and equipment 5,755 11,000 ----------- ----------- Net cash (used for) investing activities (3,340,868) (5,731,097) ----------- ----------- Financing Activities Proceeds from long-term debt - 3,000,000 Payments on long-term debt (1,099,186) (812,047) Proceeds from sale of Common Stock 42,059 25,124 ----------- ----------- Net cash provided by (used for) financing activities (1,057,128) 2,213,077 ----------- ----------- Effects of Foreign Currency Exchange Rate Changes on Cash and Cash Equivalents (3,982) - Net (decrease) in cash and cash equivalents (1,448,299) (2,588,890) Cash and Cash Equivalents at Beginning of Period 2,659,767 3,671,490 ----------- ----------- Cash and Cash Equivalents at End of Period $ 1,211,468 $ 1,082,600 =========== ===========
See notes to condensed consolidated financial statements. 5 6 Tuscarora Incorporated NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Unaudited) 1. Condensed Consolidated Financial Statements The condensed consolidated balance sheet at November 30, 1995 and the consolidated statements of income and consolidated statements of cash flows for the periods ended November 30, 1995 and November 30, 1994 have been prepared by the Company, without audit. In the opinion of Management, all adjustments necessary to present fairly the financial position, results of operations and changes in cash flows at November 30, 1995 and for the periods presented have been made. Certain information and footnote disclosures normally included in financial statements prepared in accordance with generally accepted accounting principles have been condensed or omitted. It is suggested that these condensed consolidated financial statements be read in conjunction with the financial statements and notes thereto included in the Company's 1995 Annual Report to Shareholders and incorporated by reference in the Company's annual report on Form 10-K for the fiscal year ended August 31, 1995. The results of operations for the period ended November 30, 1995 are not necessarily indicative of the operating results to be expected for the full year. 2. Inventories Inventories are summarized as follows:
November 30, August 31, 1995 1995 ------------ ------------ Finished goods $ 10,036,308 $ 9,317,095 Work in process 516,975 421,524 Raw materials 5,086,865 6,576,578 Supplies 1,664,061 1,703,413 ------------ ------------ $ 17,304,209 $ 18,018,610 ============ ============
6 7 3. Claims and Contingencies Two lawsuits are pending against the Company involving claims of sexual discrimi-nation and harassment in which compensatory and punitive damages are sought. The Company is vigorously contesting these lawsuits and believes that, consistent with a policy in place for many years, it promptly, reasonably and effectively responded to all incidents alleged. Other employment related claims are pending before Federal and State agencies. The Company is also involved in legal and administrative proceedings, including one with respect to a Superfund site, which may result in the Company becoming liable for a portion of certain environmental cleanup costs. With respect to these matters, the Company believes that its share of the costs should not be significant. The Company has accrued for its estimated share of the costs resulting from the environmental claims. In the opinion of Management, the disposition of the employment and environmental claims should not have a material adverse effect on the Company's financial position. 4. Reclassification Certain amounts in the Consolidated Statements of Cash Flows for the three months ended November 30, 1994 have been reclassified to be consistent with the presentation for the three months ended November 30, 1995. 5. Subsequent Event On December 1, 1995, the Company exchanged 51,177 shares of its Common Stock and a small amount of cash having an aggregate value of $1,275,000 for all the outstanding capital stock of Alpine Packaging, Inc., a designer and manufacturer of specialty corrugated packaging, custom assembled wood pallets and technical/military specifica-tion packaging in Colorado Springs, Colorado. The Company will issue additional shares of its Common Stock to the Alpine shareholders based on the operating results of the business acquired, accounted for as a separate entity, for each of the years 1995 through 1998. The Company will continue the business acquired at the same location under a long-term lease. The acquisition will be accounted for as a purchase transaction. 7 8 ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS RESULTS OF OPERATIONS - FIRST QUARTER FISCAL 1996 COMPARED TO FIRST QUARTER FISCAL 1995 Net sales for the quarter ended November 30, 1995 totaled $47.3 million, an increase of 21.5% from net sales of $38.9 million for the same quarter of fiscal 1995. Approximately 62% of the increase in net sales was attributable to continued growth in most of the markets and geographic regions which the Company serves. The balance of the increase in net sales is a result of the acquisition of M. Y. Trondex Ltd., a similar business in Northampton, England and Glasgow, Scotland in February 1995. Based on current customer order placement rates and anticipated continued economic strength, sales gains are expected to be favorable for the balance of fiscal 1996. Gross profit for the quarter ended November 30, 1995 was $12.0 million, a 22.3% increase from $9.8 million in the first quarter of fiscal 1995. The gross profit margin increased to 25.3% from 25.1% primarily due to the increased sales level which resulted in improvements in manufacturing efficiency in both the Company's custom molding and integrated materials operations and to a lesser extent, lower EPS raw material costs per pound throughout the quarter. This improvement in the gross profit margin was achieved despite below-average profit margins at the UK operations. Selling and administrative expenses increased $1.0 million or 20.1% for the quarter ended November 30, 1995, but decreased as a percentage of net sales to 12.9% compared to 13.1% for the same period in fiscal 1995. The dollar increase was primarily due to the expenses added as a result of the acquisition in February 1995. Interest expense for the quarter ended November 30, 1995 was $708,000 compared to $462,000 in the first quarter of fiscal 1995. The increase of $246,000 or 53.2% was due to an increase in long-term debt incurred in fiscal 1995 and to higher interest rates throughout the quarter than in the first quarter of fiscal 1995. Income before income taxes for the quarter ended November 30, 1995 increased to $5.1 million from $4.1 million for the same period of fiscal 1995, an increase of $1.0 million or 25.5%. The provision for income taxes for the quarter ended November 30, 1995 increased due to the increased income before income taxes. Net income for the quarter ended November 30, 1995 was $3.2 million, an increase of 26.1% from $2.5 million for the same period of fiscal 1995. The increase was due primarily to the increases in net sales and gross profit. The net sales and net income for the three months ended November 30, 1995 were Company records for a first fiscal quarter. 8 9 LIQUIDITY AND CAPITAL RESOURCES Net cash provided by operating activities for the three months ended November 30, 1995 amounted to $3.0 million compared to $929,000 for the same period in fiscal 1995. Depreciation and amortization for the same three-month periods amounted to $2.8 million and $2.4 million, respectively. Because a substantial portion of cash flow provided from operations results from depreciation and amortization, the Company believes that its liquidity would not be adversely affected should a period of reduced earnings occur. During the three months ended November 30, 1995, the Company's inventories and accounts payable decreased despite the higher manufacturing activity, primarily due to the Company maintaining minimum raw material inventory levels as raw material prices trended lower during the period. The Company's accounts receivable increased slightly as a result of the higher manufacturing activity. Capital expenditures during the three months ended November 30, 1995 amounted to $3.3 million, including capital expenditures for environmental equipment of $183,000. Approximately two thirds of the capital expenditures during the quarter was for machinery and equipment and approximately one third of the capital expenditures during the quarter was for land, buildings and improvements. Subsequent to the end of the quarter, the Company exchanged 51,177 shares of its Common Stock and a small amount of cash having an aggregate value of $1.3 million for all the outstanding capital stock of Alpine Packaging, Inc. (see Note 5 to the Condensed Consolidated Financial Statements). The Company has also announced that it will establish custom molding manufacturing facilities in Spennymoor in northeast England and in Storm Lake, Iowa. Total debt of the Company amounted to $40.2 million at November 30, 1995, of which $35.3 million was borrowed under a credit agreement with the Company's principal bank, including $5.5 million out of an available $14.0 million under a revolving credit agreement. Total debt amounted to $41.3 million at August 31, 1995. No borrowings were made during the three months ended November 30, 1995. On December 14, 1995, the Company declared its regular semiannual cash dividend of $.13 per share payable on January 5, 1996 to shareholders of record on December 26, 1995. A cash dividend of $.11 per share was paid in January 1995. Cash provided by operating activities as supplemented by the amount available under the bank credit agreement should be sufficient to enable the Company to continue to fund its operating requirements, capital expenditures and cash dividends, as well as any payments required to satisfy any claims and contingencies referred to under Note 3 to the Condensed Consolidated Financial Statements. The Company will continue to look for the acquisition of similar or related businesses. INFLATION The impact of inflation on the Company's financial position and results of operations has not been significant during the periods discussed. 9 10 PART II. OTHER INFORMATION Item. 6. EXHIBITS AND REPORTS ON FORM 8-K -------------------------------- (a) Exhibits -------- Exhibit No. Document ----------- -------- 11 Computation of Net Income Per Share. 27 Financial Data Schedule. (b) Reports on Form 8-K ------------------- A Form 8-K, dated August 21, 1995, containing a description of the registrant's Common Stock, without par value, was filed on August 22, 1995. The filing of the description was reported under Item 5 and the actual description filed as Exhibit 99 to the Form 8-K. The description, which contains the information required by Item 202 of Regulation S-K, replaces the description of the registrant's Common Stock contained in a Form 8-K dated August 26, 1991 and filed September 4, 1991. 10 11 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. Tuscarora Incorporated (Registrant) Tuscarora Incorporated (Registrant) Date: January , 1996 By /s/ JOHN P. O'LEARY, JR. -------------------------- John P. O'Leary, Jr., President and Chief Executive Officer Date: January , 1996 By /s/ BRIAN C. MULLINS -------------------------- Brian C. Mullins, Vice President and Treasurer (Principal Financial Officer and Principal Accounting Officer) 11 12 Tuscarora Incorporated FORM 10-Q FOR QUARTER ENDED NOVEMBER 30, 1995 EXHIBIT INDEX The following exhibits are filed as a part of this quarterly report on Form 10-Q. Exhibit No. Document ------- -------- 11 Computation of Net Income Per Share. 27 Financial Data Schedule. 12 EX-11 2 TUSCARORA INC. 10-Q 1 Tuscarora Incorporated EXHIBIT 11 - COMPUTATION OF NET INCOME PER SHARE
Three Months Ended November 30, ------------------------------------- 1995 1994 ----- ----- (In thousands, except per share data) PRIMARY Weighted average number of shares of Common Stock outstanding 6,182 6,148 Net effect of dilutive stock options - based on the treasury stock method using average market price 135 85 ----- ----- TOTAL 6,317 6,233 ===== ===== Net income 3,154 2,501 ===== ===== Per share amount $ .50 $ .40 ===== ===== FULLY DILUTED Weighted average number of shares of Common Stock outstanding 6,182 6,148 Net effect of dilutive stock options - based on the treasury stock method using greater of average market price or closing market price 136 94 ----- ----- TOTAL 6,318 6,242 ===== ===== Net income 3,154 2,501 ===== ===== Per share amount $ .50 $ .40 ===== =====
13 EX-27 3 TUSCARORA INC. 10-Q
5 0000821538 TUSCARORA INC. 10-Q 1,000 3-MOS AUG-31-1996 NOV-30-1995 1,211,468 0 24,796,745 799,399 17,304,209 44,804,650 139,636,312 71,545,490 117,358,046 20,799,275 35,408,647 6,201,460 0 0 51,762,535 117,358,046 47,295,716 47,295,716 35,338,756 35,338,756 0 120,521 708,067 5,143,446 1,989,001 3,154,445 0 0 0 3,154,445 .50 .50
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