-----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, UKP2KNkFgSX5IYSqXCFipZ8VsVbg9V7qKvqcn8objEnGlv6LsoSeqXKcxR4mtkuc 9ldA/K8Z/ViuSTHLZiAg7Q== 0000899596-97-000008.txt : 19971114 0000899596-97-000008.hdr.sgml : 19971114 ACCESSION NUMBER: 0000899596-97-000008 CONFORMED SUBMISSION TYPE: 10-Q PUBLIC DOCUMENT COUNT: 4 CONFORMED PERIOD OF REPORT: 19970927 FILED AS OF DATE: 19971112 SROS: NYSE FILER: COMPANY DATA: COMPANY CONFORMED NAME: BELL & HOWELL CO CENTRAL INDEX KEY: 0000899596 STANDARD INDUSTRIAL CLASSIFICATION: OFFICE MACHINES, NEC [3579] IRS NUMBER: 363875177 STATE OF INCORPORATION: DE FISCAL YEAR END: 1228 FILING VALUES: FORM TYPE: 10-Q SEC ACT: SEC FILE NUMBER: 001-13746 FILM NUMBER: 97713784 BUSINESS ADDRESS: STREET 1: 5215 OLD ORCHARD RD CITY: SKOKIE STATE: IL ZIP: 60077 BUSINESS PHONE: 7084707660 FORMER COMPANY: FORMER CONFORMED NAME: BELL & HOWELL HOLDINGS CO DATE OF NAME CHANGE: 19930326 10-Q 1 BELL & HOWELL COMPANY FORM 10-Q, 09/27/97 UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM 10-Q QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the Quarter ended Commission file number September 27, 1997 33-59994 BELL & HOWELL COMPANY (Exact Name of Registrant as Specified in its Charter) Delaware 36-3875177 (State or Other Jurisdiction of (I.R.S. Employer Incorporation or Organization) Identification No.) 5215 Old Orchard Road, Skokie, Illinois 60077-1076 (Address of Principal Executive Offices) (Zip Code) Registrant's telephone number, including area code (847) 470-7660 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 The number of shares of the Registrant's Common Stock, $.001 par value, outstanding as of November 7, 1997 was 23,408,387. TABLE OF CONTENTS PART I. FINANCIAL INFORMATION PAGE - ------ --------------------- ---- Item 1. Financial Statements Consolidated Statements of Operations for the Thirteen and Thirty-Nine Weeks Ended September 28, 1996 and September 27, 1997 ...... 1 Consolidated Balance Sheets - Assets at December 28, 1996 and September 27, 1997 ....... 2 Consolidated Balance Sheets - Liabilities and Shareholders' Equity at December 28, 1996 and September 27, 1997 ......................... 3 Consolidated Statements of Cash Flows for the Thirty-Nine Weeks Ended September 28, 1996 and September 27,1997 ....... 4 Notes to the Consolidated Financial Statements ..................................... 5 Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations ...................................... 8 PART II. OTHER INFORMATION - ------- ----------------- Item 1. Legal Proceedings ................................ 14 Item 6. Exhibits and Reports on Form 8-K ................. 14 SIGNATURE PAGE .............................................. 15 Bell & Howell Company and Subsidiaries Consolidated Statements of Operations (Dollars and shares in thousands, except per share data) (Unaudited)
Thirteen Weeks Thirty-Nine Weeks Ended Ended --------------------- --------------------- Sept. 28, Sept. 27, Sept. 28, Sept. 27, 1996 1997 1996 1997 -------- -------- -------- -------- Net sales $ 218,840 $ 211,722 $ 633,905 $ 629,890 Operating costs and expenses: Cost of sales 140,995 127,817 410,407 392,537 Research and development 9,492 9,344 25,946 29,166 Selling and administrative 47,971 51,411 145,500 149,920 -------- -------- -------- ------- Total operating costs and expenses 198,458 188,572 581,853 571,623 Operating income 20,382 23,150 52,052 58,267 Net interest expense: Interest (income) (5,410) (5,526) (13,676) (15,883) Interest expense 15,832 17,605 46,840 51,694 -------- -------- -------- -------- Net interest expense 10,422 12,079 33,164 35,811 Earnings before income taxes and extraordinary items 9,960 11,071 18,888 22,456 Income tax expense 5,137 4,594 8,868 9,319 -------- -------- -------- -------- Earnings before extraordinary items 4,823 6,477 10,020 13,137 Extraordinary losses -- (9,678) (2,585) (10,650) -------- -------- -------- -------- Net earnings (loss) $ 4,823 (3,201) $ 7,435 $ 2,487 ======== ======== ======== ======== Net earnings (loss) per common share: Primary: Earnings before extraordinary items $ 0.26 $ 0.34 $ 0.54 $ 0.71 Extraordinary losses -- (0.51) (0.14) (0.58) -------- -------- -------- -------- Net earnings (loss) per common share $ 0.26 (0.17) $ 0.40 $ 0.13 ======== ======== ======== ======== Fully Diluted: Earnings before extraordinary items $ 0.26 $ 0.34 $ 0.54 $ 0.70 Extraordinary losses -- (0.51) (0.14) (0.57) ------- -------- -------- -------- Net earnings (loss) per common share $ 0.26 (0.17) $ 0.40 $ 0.13 ======== ======== ======== ======== Average number of common shares and equivalents outstanding: Primary 18,545 18,908 18,584 18,585 Fully Diluted 18,571 18,951 18,591 18,700 The accompanying Notes to the Consolidated Financial statements are an integral part of these statements.
-1- Bell & Howell Company and Subsidiaries Consolidated Balance Sheets (Dollars in thousands) Assets
December 28, September 27, 1996 1997 ------------ ------------ (Audited) (Unaudited) Current assets: Cash and cash equivalents $ 15,500 $ 9,626 Accounts receivable, less allowance for doubtful accounts of $5,294 and $5,716, respectively 186,862 194,590 Inventory 139,831 166,540 Other current assets 11,826 10,658 -------- -------- Total current assets 354,019 381,414 Property, plant and equipment, at cost 363,015 386,514 Accumulated depreciation (207,287) (236,597) -------- -------- Net property, plant and equipment 155,728 149,917 Long-term receivables 54,707 58,296 Goodwill, net of accumulated amortization 189,868 196,491 Other assets 42,464 38,301 -------- -------- Total assets $ 796,786 $ 824,419 ======== ======== The accompanying Notes to the Consolidated Financial Statements are an integral part of these statements.
-2- Bell & Howell Company and Subsidiaries Consolidated Balance Sheets (Dollars and shares in thousands) Liabilities and Shareholders' Equity
December 28, September 27, 1996 1997 ------------ ------------- (Audited) (Unaudited) Current liabilities: Notes payable $ 8,397 $ 4,083 Current maturities of long-term debt 1,667 970 Accounts payable 93,135 60,025 Accrued expenses 78,308 61,678 Deferred income 171,698 173,151 Accrued income taxes 1,143 148 -------- -------- Total current liabilities 354,348 300,055 Long-term liabilities: Long-term debt 548,281 492,421 Other liabilities 61,049 61,318 -------- -------- Total long-term liabilities 609,330 553,739 Shareholders' equity: Common Stock, $.001 par value, 18,359 shares issued and 18,309 shares outstanding at December 28, 1996, and 23,419 shares issued and 23,408 shares outstanding at September 27, 1997 18 23 Capital surplus 1,402 138,508 Notes receivable from executives (1,444) (1,733) Retained earnings (deficit) (165,851) (163,364) Cumulative foreign exchange translation adjustments 616 (2,518) Treasury stock (1,633) (291) -------- -------- Total shareholders' equity (deficit) (166,892) (29,375) Commitments and contingencies -- -- -------- -------- Total liabilities and shareholders' equity $ 796,786 $ 824,419 ======== ======== The accompanying Notes to the Consolidated Financial Statements are an integral part of these statements.
-3- Bell & Howell Company and Subsidiaries Consolidated Statements of Cash Flows (Dollars in thousands) (Unaudited)
Thirty-Nine Weeks Ended ----------------------------- Sept. 28, Sept. 27, 1996 1997 -------- -------- Operating Activities: Net earnings $ 7,435 $ 2,487 Depreciation and amortization 35,560 45,802 Debt accretion 17,928 17,185 Changes in operating assets and liabilities: Accounts receivable 4,840 (8,277) Inventory (43,071) (20,755) Other current assets 1,675 1,625 Long-term receivables 6,006 (3,589) Income taxes (756) (1,137) Accounts payable (981) (34,307) Accrued expenses (3,507) (17,194) Deferred income and other long-term liabilities (8,207) (2,562) Other, net (81) 2,930 ------- ------- Net cash provided (used) by operating activities 16,841 (17,792) Investing activities: Expenditures for property, plant and equipment (30,440) (24,791) Acquisitions (62,568) (11,421) ------- ------- Net cash used by investing activities (93,008) (36,212) Financing activities: Proceeds from short-term debt 11,409 5,144 Repayment of short-term debt (16,058) (8,561) Proceeds from long-term debt 235,384 86,396 Repayment of long-term debt (155,359) (173,315) Proceeds from Common Stock, net (112) 138,846 ------- ------- Net cash provided by financing activities 75,264 48,510 Effect of exchange rate changes on cash 13 (380) ------- ------- Increase (decrease) in cash and cash equivalents (890) (5,874) Cash and cash equivalents, beginning of period 7,262 15,500 ------- ------- Cash and cash equivalents, end of period $ 6,372 $ 9,626 ======= ======= The accompanying Notes to the Consolidated Financial Statements are an integral part of these statements.
-4- Bell & Howell Company and Subsidiaries Notes to the Consolidated Financial Statements (Dollars and shares in thousands, except per share data) Note 1 - Basis of Presentation The consolidated financial statements include the accounts of Bell & Howell Company and its subsidiaries (collectively the "Company") and have been prepared without independent audit, except for the balance sheet data as of December 28, 1996. In the opinion of the Company's management, the consolidated financial statements include all adjustments necessary to present fairly the information required to be set forth therein, and such adjustments are of a normal and recurring nature. Certain information and footnote disclosures normally included in financial statements prepared in accordance with generally accepted accounting principles have been condensed or omitted. The Company's management believes, however, that the disclosures are adequate to make the information presented not misleading. These financial statements should be read in conjunction with the Consolidated Financial Statements and the notes thereto included in Bell & Howell Company's annual report for the fiscal year ended December 28, 1996. Note 2 - Significant Accounting Policies Net Earnings per Common Share. Net earnings per common share are determined by dividing net earnings by the weighted average number of common shares outstanding during the period. If dilutive, stock options are included as common stock equivalents. Inventory. The Company uses the last-in, first-out (LIFO) method of valuing the majority of its domestic inventory. Use of the LIFO method is predicated on a determination of inventory quantities and costs at the end of each fiscal year, and therefore interim determinations of LIFO inventory values and results of operations are by necessity based on management's estimates of expected year-end inventory quantities and costs. The excess of replacement cost over the LIFO values of inventory was $4,489 at December 28, 1996, and September 27, 1997. -5- Note 3 - Public Equity Offering, New Credit Agreement, Debt Redemptions In September 1997, the Company completed a public offering of 5,026 shares of Common Stock (which were issued at a price of $28.625 per share) and entered into a New Credit Agreement which provides a revolving credit facility of $600,000. The net proceeds of the equity offering together with borrowings under the new credit facility were used to purchase $82,347 (accreted value) of the 11 1/2% Senior Discount Debentures pursuant to a tender offer, purchase $8,300 of the 9 1/4% Senior Notes, and repayment of all amounts due under the Company's former credit agreement. Note 4 - Extraordinary Losses The extraordinary losses of $10,650 ($16,641 pretax) in the first nine months of 1997 were comprised of the debt repurchase premium and write-off of unamortized debt issuance costs associated with the repurchase of $97,945 (accreted value) of the 11 1/2% Senior Discount Debentures, $8,300 of the 9 1/4% Senior Notes and $2,100 of the 10 3/4% Senior Subordinated Notes. The extraordinary losses of $2,585 ($4,039 pretax) in the first nine months of 1996 were comprised of the debt repurchase premium and write-off of unamortized debt issuance costs associated with the repurchase of $34,158 (accreted value) of the 11 1/2% Senior Discount Debentures and $17,920 of the 10 3/4% Senior Subordinated Notes. Note 5 - Foreign Postal Contracts The Company is a subcontractor to the same general contractor on two contracts to provide mail automation systems to foreign postal authorities. The scope and performance of these contracts and the Company's ability to be compensated for additional services are currently being negotiated, the resolution of which may adversely impact contract loss reserves recorded to date. -6- Note 6 - Liquidation and Dissolution of Holding Company Structure In October 1997, the stockholders of Bell & Howell Company (the "Holding Company") approved a plan (the "Plan") to simplify the corporate structure of the Holding Company and its subsidiaries (collectively the "Company"). Although the Plan includes the liquidation and dissolution of the Holding Company, it does not affect the business operations of the Company or the relative interests of the Holding Company stockholders. Essentially all of the Company's assets and operations are owned by and carried on through Bell & Howell Operating Company ("BHOC"), which is a wholly-owned subsidiary of the Holding Company. Upon completion of the Plan, each stockholder of the Holding Company will receive newly issued shares of BHOC Common Stock on a share-for-share basis (and the Holding Company Common Stock will be canceled), the BHOC Common Stock will replace Holding Company Common Stock on the New York Stock Exchange, all current officers and directors of the Holding Company will be elected to identical positions of BHOC and the name of BHOC will be changed to "Bell & Howell Company". -7- Item 2. - ------ Management's Discussion and Analysis of Financial Condition and Results of Operations --------------------------------------------- This section should be read in conjunction with the Consolidated Financial Statements of Bell & Howell Company and Subsidiaries (collectively the "Company") and the notes thereto included in the annual report for the year ended December 28, 1996. Results of Operations - --------------------- Nine Months Year-to-Date 1997 Compared to Nine Months - ----------------------------------------------------- Year-to-Date 1996 - ----------------- The Company's net sales decreased $4.0 million, or 1%, to $629.9 million in the first nine months of 1997 as continued strong sales growth within Information Access (particularly for the transportation & vehicle and education & library markets), as well as the high volume mailing portion of Mail Processing was more than offset by lower revenues in the postal contracting portion of Mail Processing due to shipments of significant one-time contracts to postal authorities in 1996. Information Access net sales increased $15.8 million, or 5%, to $347.9 million in the first nine months of 1997. Within the Information Access businesses, the Company provides access to information in select vertical markets including the transportation & vehicle and education & library markets, and also provides imaging solutions and components to financial institutions, governmental agencies and other paper intensive industries. Net sales to the transportation & vehicle market increased $10.2 million, or 14%, to $85.1 million due to increased sales of electronic parts catalogs and ancillary products to automotive dealerships, and continued strong sales of dealer management systems and electronic parts catalogs to powersports dealerships. In addition to increased new systems placements, the Company continued to experience strong sales of additional product applications and high contract renewal rates related to previously placed systems. Net sales to the education & library market increased $12.8 million, or 10%, to $135.8 million due to a growing electronic subscription base, which continued to reflect strong sales of ProQuest Direct (the Company's on-line electronic product offering), high renewal rates on existing products, and the acquisition of DataTimes Corporation (in September 1996) which added complementary information content, technology and distribution to the Company's electronic product offerings. Sales of electronic content increased 32% over the prior year as customers increasingly -8- demand electronic information solutions and its newer form of on-line delivery. Net sales of microfilm and paper products to the education & library market declined slightly versus the prior year as increased pricing was offset by lower unit volumes. Net sales in the Imaging Solutions and Components business decreased $7.2 million, or 5%, to $127.0 million as increased sales of production scanners and imaging software systems were more than offset by the impact of divesting certain low margin product lines in Canada and France. Excluding the impact of the divested product lines, Imaging Solutions and Components' net sales in the first nine months of 1997 would have increased by 5% over the prior year. Mail Processing net sales decreased $19.8 million, or 7%, to $282.0 million in the first nine months of 1997. Excluding the impact of a stronger dollar in 1997, sales of high volume mailing systems increased $24.8 million, or 10%, to $263.4 million reflecting strong market demand for inserting and sorting systems. Sales of commercial sorting equipment (which represents 16% of high volume mailing systems sales) increased $4.1 million, or 22%, to $23.4 million as the U.S. Postal Service guidelines governing the operating requirements to qualify for certain financial incentives to properly address, bar code and presort mail have created a more favorable environment for customers to invest in advanced sorting technology. Service revenues (which are primarily annuity based and represent 45% of high volume mailing systems sales) continue to increase, due to both an expanded customer base and increased pricing. Sales of customized mail automation equipment and contractual engineering services to governmental postal authorities decreased $37.8 million to $18.6 million in the first nine months of 1997, primarily as a result of shipments of significant one-time contracts to postal authorities in the first nine months of 1996. In its government postal contracting business, the Company is a subcontractor to the same general contractor on two contracts to provide mail automation systems to foreign postal authorities. The scope and performance of these contracts and the Company's ability to be compensated for additional services are currently being negotiated, the resolution of which may adversely impact contract loss reserves recorded to date. The Company's cost of sales decreased $17.9 million, or 4%, to $392.5 million in the first nine months of 1997, with the gross profit (net sales less cost of sales) percentage increasing by 2.4 percentage points to 37.7%. The higher gross profit percentage in 1997 resulted from a shift in sales mix (as the growth rate in higher gross profit percentage Information Access revenues exceeded the growth rate in lower gross profit percentage Mail Processing revenues), and additionally reflects both improved manufacturing productivity and increased pricing. Research and development expense increased $3.2 million, or 12%, to $29.2 million in the first nine months of 1997 as the Company continued to increase its investment in new product offerings. Such increase primarily related to increased -9- costs to develop new electronic products for the education & library market, to develop a new technology platform for the powersports market and to develop enhanced versions of production scanners. The Company has continually positioned itself to take advantage of new product/technology opportunities (with an increased emphasis on software solutions and electronic products) in each of its businesses. Selling and administrative ("S&A") expense increased $4.4 million, or 3%, to $149.9 million in the first nine months of 1997 reflecting the Company's increased investment in sales and marketing resources. The ratio of selling and administrative expense to net sales of 23.8% in the first nine months of 1997 increased by 0.8 percentage points versus the prior year as various expense leveraging initiatives were offset by the result of the aforementioned shift in sales mix (as the growth rate in higher S&A expense percentage Information Access revenues exceeded the growth rate in lower S&A expense percentage Mail Processing revenues). EBITDA (defined as operating income plus depreciation and amortization) increased $11.8 million, or 14%, to $96.8 million in the first nine months of 1997 resulting from the increased sales to the transportation & vehicle and education & library markets, as well as increased high volume mailing systems sales, and leveraged operating costs and expenses. Operating income increased $6.2 million, or 12%, to $58.3 million in the first nine months of 1997. Information Access EBITDA increased $10.2 million, or 16%, to $75.9 million in the first nine months of 1997. This increase resulted from the higher sales volumes, an improved gross profit percentage reflecting a sales mix emphasizing the Company's more profitable products (i.e., a greater proportion of revenues related to software and publishing and a lower proportion of revenues related to the sale of hardware) which more than offset increased research and development costs associated with new product offerings. Information Access operating income increased $5.0 million, or 13%, to $44.3 million in the first nine months of 1997. Mail Processing EBITDA increased $2.2 million, or 8%, to $31.0 million in the first nine months of 1997 as a result of the higher sales of high volume mailing systems and leveraged operating costs and expenses. Mail Processing operating income increased $1.7 million, or 7%, to $24.4 million in the first nine months of 1997. Corporate expenses (excluding depreciation and amortization) increased $0.6 million, or 6%, to $10.1 million in the first nine months of 1997 as productivity improvements were more than offset by inflationary/other cost increases. -10- Net interest expense increased $2.6 million, or 8%, to $35.8 million in the first nine months of 1997, primarily reflecting the increased debt (resulting from acquisitions in 1996 and the increased inventory investment related to postal contracts), which was partially offset by the impact of the repurchases in 1996 and 1997 of portions of the 11 1/2% Senior Discount Debentures and the 10 3/4% Senior Subordinated Notes, which were redeemed with bank borrowings. Net interest income of Bell & Howell Financial Services Company, the Company's financing subsidiary, increased $1.1 million to $6.2 million in the first nine months of 1997, primarily due to continued growth in the lease receivables portfolio. In September 1997, the Company completed a public offering of 5.0 million shares of Common Stock (which were issued at a price of $28.625 per share) and entered into a New Credit Agreement which provides a revolving credit facility of $600.0 million. The net proceeds of the equity offering together with borrowings under the new credit facility were used to purchase $82.3 million (accreted value) of the 11 1/2% Senior Discount Debentures pursuant to a tender offer, purchase $8.3 million of the 9 1/4% Senior Notes, and repayment of all amounts due under the Company's former credit agreement. In the fourth quarter of 1997, the Company redeemed the remaining 11 1/2% Senior Discount Debentures ($130.9 million in accreted value at September 27, 1997), the remaining $71.7 million of the 9 1/4% Senior Notes, and the remaining $55.0 million of the 10 3/4% Senior Subordinated Notes. Income tax expense increased in the first nine months of 1997 as a result of a higher level of pretax profit in the current year. The extraordinary losses of $10.7 million ($16.6 million pretax) in the first nine months of 1997 were comprised of the debt repurchase premium and write-off of unamortized debt issuance costs associated with the repurchase of $97.9 million (accreted value) of the 11 1/2% Senior Discount Debentures, $8.3 million of the 9 1/4% Senior Notes, and $2.1 million of the 10 3/4% Senior Subordinated Notes. The extraordinary losses of $2.6 million ($4.0 million pretax) in the first nine months of 1996 were comprised of the debt repurchase premium and write-off of unamortized debt issuance costs associated with the repurchase of $34.2 million (accreted value) of the 11 1/2% Senior Discount Debentures and $17.9 million of the 10 3/4% Senior Subordinated Notes. Cash used by operations was $17.8 million in the first nine months of 1997 versus cash provided by operations of $16.8 million in the first nine months of 1996. Although EBITDA -11- increased by $11.8 million in the first nine months of 1997, the Company's working capital investment increased in the current year related to the timing of receivable collections and vendor disbursements. The Company operates with a reduced net working capital level principally as a result of substantial customer prepayments for annual service contracts in each of its business segments and prepaid subscriptions in the Information Access business segment. Debt (net of cash and cash equivalents) decreased by $55.0 million to $487.8 million in the first nine months of 1997 as the proceeds from the public equity offering were partially offset by the cash used by operations (which reflects the seasonal nature of the Company's cash collections and disbursements), capital expenditures/acquisitions and continued interest accretion on the 11 1/2% Senior Discount Debentures. Recently Issued Financial Accounting Standards In February 1997, the Financial Accounting Standards Board issued Statement of Financial Accounting Standards No. 128, "Earnings per Share." The standard establishes new methods for computing and presenting earnings per share ("EPS") and replaces the presentation of primary and fully-diluted EPS with basic and diluted EPS. The Company is required to adopt the new standard for periods ending after December 15, 1997. The new methods under this standard do not have a material impact on the Company's current earnings per share amounts. In June 1997, the Financial Accounting Standards Board issued Statement of Financial Accounting Standards No. 130, "Reporting Comprehensive Income." The Company is required to adopt the new standard for periods ending after fiscal 1997. This statement establishes standards for reporting and display of comprehensive income and its components in a full set of general purpose financial statements. The standard requires all items that are required to be recognized under accounting standards as components of comprehensive income be reported in a financial statement that is displayed in equal prominence with the other financial statements. The standard is not expected to have a material impact on the Company's current presentation of income. In June 1997, the Financial Accounting Standards Board also issued Statement of Financial Accounting Standards No. 131, "Disclosures about Segments of an Enterprise and Related Information." The Company is required to adopt this new standard for periods ending after fiscal 1997. This statement establishes standards for the way companies are to report information about -12- operating segments. It also establishes standards for related disclosures about products and services, geographic areas, and major customers. The Company is currently evaluating the impact of this standard on its financial statements. -13- Part II. Other Information - ------- ----------------- Item 1. Legal Proceedings. - ------ ----------------- The Company is involved in various legal proceedings incidental to its business. Management believes that except for the impact of the resolution of the issues associated with certain foreign postal contracts (referenced in Note 5 to the Consolidated Financial Statements), the outcome of such proceedings will not have a material adverse effect upon the consolidated operations or financial condition of the Company. Item 6. Exhibits and Reports on Form 8-K. - ------ -------------------------------- (a) Exhibits: Index Number Description ------------ ----------- (10.11) Revolving Credit Agreement (11.1) Computation of Earnings Per Common Share (27.1) Financial Data Schedule (b) Reports on Form 8-K. No reports on Form 8-K were filed for the thirteen weeks ended September 27, 1997. -14- 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. Date: November 7, 1997 BELL & HOWELL COMPANY /s/ James P. Roemer -------------------------- James P. Roemer President, Chief Executive Officer and Director /s/Nils A. Johansson -------------------------- Nils A. Johansson Executive Vice President, Chief Financial Officer and Director -15- EX-10.11 2 REVOLVING CREDIT AGREEMENT Exhibit 10.11 Revolving Credit Agreement, dated as of September 22, 1997, among Bell & Howell Operating Company, the Lenders listed therein, and Bankers Trust Company incorporated herein by reference to Exhibit 10.11 to Bell & Howell Operating Company's Registration Statement on Form S-4, as amended, Registration No. 333-36401. EX-11.1 3 COMPUTATION OF EARNINGS PER COMMON SHARE Exhibit 11.1 Bell & Howell Company and Subsidiaries Computation of Earnings per Common Share (Dollars and shares in thousands, except per share data) (Unaudited)
Thirteen Weeks Thirty-Nine Weeks Ended Ended -------------------- --------------------- Sept. 28, Sept. 27, Sept. 28, Sept. 27, 1996 1997 1996 1997 -------- -------- -------- -------- Net earnings (loss): Earnings before extraordinary items $ 4,823 $ 6,477 $10,020 $ 13,137 Extraordinary losses -- (9,678) (2,585) (10,650) ------ ------ ------ ------- Net earnings (loss) $ 4,823 $(3,201) $ 7,435 $ 2,487 ====== ====== ====== ======= Average number of common shares and equivalents outstanding: Primary 18,545 18,908 18,584 18,585 Fully diluted 18,571 18,951 18,591 18,700 Net earnings (loss) per common share: Primary: Earnings before extraordinary items $ 0.26 $ 0.34 $ 0.54 $ 0.71 Extraordinary losses -- (0.51) (0.14) (0.58) ------ ------ ------ ------- Net earnings (loss) per common share $ 0.26 $ (0.17) $ 0.40 $ 0.13 ====== ====== ====== ======= Fully diluted: Earnings before extraordinary items $ 0.26 $ 0.34 $ 0.54 $ 0.70 Extraordinary losses -- (0.51) (0.14) (0.57) ------ ------ ------ ------- Net earnings (loss) per common share $ 0.26 $ (0.17) $ 0.40 $ 0.13 ====== ====== ====== =======
EX-27 4 ARTICLE 5 FINANCIAL DATA SCHEDULE
5 THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM THE COMPANY'S BALANCE SHEET AND STATEMENT OF OPERATIONS AND IS QUALIFIED IN ITS ENTIRETY BY REFERENCE TO SUCH FINANCIAL STATEMENTS. 1,000 9-MOS JAN-03-1998 SEP-27-1997 9626 0 200306 5716 166540 381414 386514 (236597) 824419 300055 492421 0 0 23 (29398) 824419 629890 629890 392537 571623 0 0 35811 22456 9319 13137 0 (10650) 0 2487 .13 .13
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