EX-99.1 3 ex99p1.txt CONSOLIDATING CONDENSED FINANCIAL STATEMENTS OF MAIL-WELL CONDENSED CONSOLIDATING FINANCIAL INFORMATION These statements are provided to comply with the reporting requirements under the indenture for the 8 3/4% Senior Subordinated Notes due in 2008. The following condensed consolidating financial information illustrates the composition of the Parent Guarantor, Issuer, Guarantor Subsidiaries and non-guarantor subsidiaries. The Issuer, the Guarantor Subsidiaries and the non-guarantor subsidiaries comprise all of the direct and indirect subsidiaries of the Parent Guarantor. Management has determined that separate complete financial statements would not provide additional material information that would be useful in assessing the financial composition of the Guarantor Subsidiaries. In December 1998, Mail-Well I Corporation ("Issuer" or "MWI"), the Company's wholly-owned subsidiary, and the only direct subsidiary of the Company, issued $300.0 million aggregate principal amount of 8 3/4% Senior Subordinated Notes ("Senior Notes") due in 2008. The Senior Notes are guaranteed by the majority of the U.S. subsidiaries (the "Guarantor Subsidiaries") of MWI, all of which are wholly owned, and by Mail-Well, Inc. ("Parent Guarantor"). The guarantees are joint and several, full, complete and unconditional. There are no material restrictions on the ability of the Guarantor Subsidiaries to transfer funds to MWI in the form of cash dividends, loans or advances, other than ordinary legal restrictions under corporate law, fraudulent transfer and bankruptcy laws. Investments in subsidiaries are accounted for under the equity method, wherein the investor company's share of earnings and income taxes applicable to the assumed distribution of such earnings are included in net income. In addition, investments increase in the amount of permanent contributions to subsidiaries and decrease in the amount of distributions from subsidiaries. The elimination entries eliminate the equity method investment in subsidiaries and the equity in earnings of subsidiaries, intercompany payables and receivables and other transactions between subsidiaries. CONSOLIDATING CONDENSED STATEMENT OF FINANCIAL POSITION September 30, 2001 (in thousands)
Combined Combined Parent Guarantor Nonguarantor Guarantor Issuer Subsidiaries Subsidiaries Eliminations Consolidated --------- ------ ------------ ------------ ------------ ------------ Current assets: Cash and cash equivalents $ - $ (324) $ 356 $ 1,706 $ - $ 1,738 Receivables, net - 53,913 222,288 39,500 - 315,701 Accounts receivable - other - 5,920 24,671 441 - 31,032 Inventories, net - 47,350 81,970 21,368 - 150,688 Note receivable from Issuer 147,436 - - - (147,436) - Other current assets - 57,539 575 3,460 (10,506) 51,068 -------- ----------- ----------- -------- ----------- ---------- Total current assets 147,436 164,398 329,860 66,475 (157,942) 550,227 Investment in subsidiaries 291,072 287,135 77,121 - (655,328) - Property, Plant and Equipment, net - 129,693 337,666 79,075 - 546,434 Intangible assets, net - 45,045 416,832 80,831 - 542,708 Notes receivable from subsidiaries - 784,400 - - (784,400) - Other assets, net 2,863 25,904 54,470 4,395 (41,500) 46,132 -------- ----------- ----------- -------- ----------- ---------- Total assets $441,371 $ 1,436,575 $ 1,215,949 $230,776 $(1,639,170) $1,685,501 ======== =========== =========== ======== =========== ========== Current liabilities: Accounts payable $ - $ 53,155 $ 127,262 $ 21,064 $ - $ 201,481 Accrued compensation - 36,377 85,074 14,683 - 136,134 Other current liabilities 14,134 124,804 (152,343) 60,230 (10,506) 36,319 Note payable to Parent - 147,436 - - (147,436) - Current portion of long-term debt - 34,448 7,525 1,202 - 43,175 -------- ----------- ----------- -------- ----------- ---------- Total current liabilities 14,134 396,220 67,518 97,179 (157,942) 417,109 Long-term debt 139,063 709,560 521 207 - 849,351 Note payable to Issuer - - 784,400 - (784,400) - Deferred income taxes - 28,287 83,563 15,868 (21,508) 106,210 Other long-term liabilities - 11,436 32,351 862 (19,992) 24,657 -------- ----------- ----------- -------- ----------- ---------- Total liabilities 153,197 1,145,503 968,353 114,116 (983,842) 1,397,327 Shareholders' equity 288,174 291,072 247,596 116,660 (655,328) 288,174 -------- ----------- ----------- -------- ----------- ---------- Total liabilities and shareholders' equity $441,371 $ 1,436,575 $ 1,215,949 $230,776 $(1,639,170) $1,685,501 ======== =========== =========== ======== =========== ==========
CONSOLIDATING CONDENSED STATEMENT OF FINANCIAL POSITION December 31, 2000 (in thousands)
Combined Combined Parent Guarantor Nonguarantor Guarantor Issuer Subsidiaries Subsidiaries Elim. Consolidated --------- ------ ------------ ------------ ----- ------------ Current assets: Cash and cash equivalents $ - $ 9,596 $ (9,846) $ 712 $ - $ 462 Receivables, net - 8,669 151,978 41,883 - 202,530 Investment in accounts receivable Securitization - - - 75,427 - 75,427 Accounts receivable - other - 13,499 5,615 1,063 - 20,177 Inventories, net - 51,359 91,815 23,259 - 166,433 Note receivable from Issuer 147,436 - - - (147,436) - Other current assets 262 25,741 24,399 3,786 (181) 54,007 -------- ---------- ----------- -------- ----------- ---------- Total current assets 147,698 108,864 263,961 146,130 (147,617) 519,036 Investment in subsidiaries 385,505 357,592 64,348 - (807,445) - Property, plant and equipment, net - 132,522 350,964 86,536 - 570,022 Intangible assets, net - 49,455 483,515 86,245 - 619,215 Note receivable from Subsidiaries - 784,400 - - (784,400) - Other assets, net 3,481 55,581 1,101 4,001 (18,882) 45,282 -------- ---------- ----------- -------- ----------- ---------- Total assets $536,684 $1,488,414 $ 1,163,889 $322,912 $(1,758,344) $1,753,555 ======== ========== =========== ======== =========== ========== Current liabilities: Accounts payable $ - $ 32,446 $ 107,569 $ 17,700 $ - $ 157,715 Accrued compensation - 24,556 31,144 7,486 - 63,186 Other current liabilities 11,768 100,773 (184,734) 155,374 (181) 83,000 Note payable to Parent - 147,436 - - (147,436) - Current portion of long-term debt - 30,767 2,662 7,113 - 40,542 -------- ---------- ----------- -------- ----------- ---------- Total current liabilities 11,768 335,978 (43,359) 187,673 (147,617) 344,443 Long-term debt 139,063 718,147 18,471 12,921 - 888,602 Note payable to issuer - - 784,400 - (784,400) - Deferred income taxes - 28,288 66,688 13,469 - 108,445 Other long-term liabilities - 20,496 23,992 606 (18,882) 26,212 -------- ---------- ----------- -------- ----------- ---------- Total liabilities 150,831 1,102,909 850,192 214,669 (950,899) 1,367,702 Shareholders' equity 385,853 385,505 313,697 108,243 (807,445) 385,853 -------- ---------- ----------- -------- ----------- ---------- Total liabilities and shareholders' equity $536,684 $1,488,414 $ 1,163,889 $322,912 $(1,758,344) $1,753,555 ======== ========== =========== ======== =========== ==========
CONSOLIDATING CONDENSED STATEMENT OF OPERATIONS Three-months ended September 30, 2001 (in thousands)
Combined Combined Parent Guarantor Nonguarantor Guarantor Issuer Subsidiaries Subsidiaries Eliminations Consolidated --------- ------ ------------ ------------ ------------ ------------ NET SALES $ - $ 113,335 $ 387,186 $61,183 $ - $ 561,704 COST OF SALES - 99,152 302,361 45,497 - 447,010 ------- --------- --------- ------- -------- --------- GROSS PROFIT - 14,183 84,825 15,686 - 114,694 OTHER OPERATING COSTS 92 5,687 81,364 7,006 - 94,149 RESTRUCTURING AND OTHER UNUSUAL CHARGES - 5,384 926 42 - 6,352 ------- --------- --------- ------- -------- --------- OPERATING INCOME (LOSS) (92) 3,112 2,535 8,638 - 14,193 OTHER (INCOME) EXPENSE Interest expense 1,738 19,305 17,695 461 (19,980) 19,219 Other (income) expense (1,976) (17,502) 7 479 19,980 988 ------- --------- --------- ------- -------- --------- INCOME (LOSS) BEFORE INCOME TAXES AND EQUITY IN UNDISTRIBUTED EARNINGS OF SUBSIDIARIES AND LOSS ON DISPOSAL 146 1,309 (15,167) 7,698 - (6,014) PROVISION (BENEFIT) FOR INCOME TAXES - 1,380 (9,221) 3,390 - (4,451) ------- --------- --------- ------- -------- --------- INCOME (LOSS) BEFORE EQUITY IN UNDISTRIBUTED EARNINGS OF SUBSIDIARIES AND LOSS ON DISPOSAL 146 (71) (5,946) 4,308 - (1,563) EQUITY IN UNDISTRIBUTED EARNINGS OF SUBSIDIARIES (1,710) (1,638) 4,891 - (1,543) - ------- --------- --------- ------- -------- --------- INCOME (LOSS) BEFORE LOSS ON DISPOSAL (1,564) (1,709) (1,055) 4,308 (1,543) (1,563) NET INCOME $(1,564) $ (1,709) $ (1,055) $ 4,308 $ (1,543) $ (1,563) ======= ========= ========= ======= ======== =========
CONSOLIDATING CONDENSED STATEMENT OF OPERATIONS Three-months Ended September 30, 2000 (in thousands)
Combined Combined Parent Guarantor Nonguarantor Guarantor Issuer Subsidiaries Subsidiaries Eliminations Consolidated --------- ------ ------------ ------------ ------------ ------------ NET SALES $ - $ 113,963 $ 436,933 $64,660 $ - $615,556 COST OF SALES - 90,125 339,997 49,744 - 479,866 ------- --------- --------- ------- -------- -------- GROSS PROFIT - 23,838 96,936 14,916 - 135,690 OTHER OPERATING COSTS Selling, administrative and other 91 18,941 73,421 8,346 - 100,799 Restructuring costs - 544 535 - - 1,079 ------- --------- --------- ------- -------- -------- Total Other Operating Costs 91 19,485 73,956 8,346 - 101,878 ------- --------- --------- ------- -------- -------- OPERATING INCOME (LOSS) (91) 4,353 22,980 6,570 - 33,812 OTHER (INCOME) EXPENSE Interest expense 1,974 18,116 7,409 2,749 (7,571) 22,677 Other (income) expense (2,212) (5,391) (103) 437 7,571 302 ------- --------- --------- ------- -------- -------- INCOME (LOSS) BEFORE INCOME TAXES AND EQUITY IN UNDISTRIBUTED EARNINGS OF SUBSIDIARIES 147 (8,372) 15,674 3,384 - 10,833 PROVISION (BENEFIT) FOR INCOME TAXES - (3,173) 6,000 1,283 - 4,110 ------- --------- --------- ------- -------- -------- INCOME (LOSS) BEFORE EQUITY IN UNDISTRIBUTED EARNINGS OF SUBSIDIARIES 147 (5,199) 9,674 2,101 - 6,723 EQUITY IN UNDISTRIBUTED EARNINGS OF SUBSIDIARIES 6,576 11,775 4,663 - (23,014) - ------- --------- --------- ------- -------- -------- NET INCOME $ 6,723 $ 6,576 $ 14,337 $ 2,101 $(23,014) $ 6,723 ======= ========= ========= ======= ======== ========
CONSOLIDATING CONDENSED STATEMENT OF OPERATIONS Nine-months Ended September 30, 2001 (in thousands)
Combined Combined Parent Guarantor Nonguarantor Guarantor Issuer Subsidiaries Subsidiaries Eliminations Consolidated --------- ------ ------------ ------------ ------------ ------------ NET SALES $ - $ 343,389 $ 1,187,281 $ 192,371 $ - $ 1,723,041 COST OF SALES - 284,083 922,495 143,497 - 1,350,075 -------- --------- ----------- --------- --------- ----------- GROSS PROFIT - 59,306 264,786 48,874 - 372,966 OTHER OPERATING COSTS 275 41,403 232,226 22,465 - 296,369 RESTRUCTURING & OTHER UNUSUAL CHARGES - 21,260 12,685 (111) - 33,834 -------- --------- ----------- --------- --------- ----------- OPERATING INCOME (LOSS) (275) (3,357) 19,875 26,520 - 42,763 OTHER (INCOME) EXPENSE Interest expense 5,215 57,549 57,090 2,950 (59,940) 62,864 Other (income) expense (5,930) (52,409) (796) 967 59,940 1,772 -------- --------- ----------- --------- --------- ----------- INCOME (LOSS) BEFORE INCOME TAXES AND EQUITY IN UNDISTRIBUTED EARNINGS OF SUBSIDIARIES AND LOSS ON DISPOSAL 440 (8,497) (36,419) 22,603 - (21,873) PROVISION (BENEFIT) FOR INCOME TAXES - 951 (13,571) 10,251 - (2,369) -------- --------- ----------- --------- --------- ----------- INCOME (LOSS) BEFORE EQUITY IN UNDISTRIBUTED EARNINGS OF SUBSIDIARIES AND LOSS ON DISPOSAL 440 (9,448) (22,848) 12,352 - (19,504) EQUITY IN UNDISTRIBUTED EARNINGS OF SUBSIDIARIES (90,906) (81,457) 17,847 - 154,516 - -------- --------- ----------- --------- --------- ----------- INCOME (LOSS) BEFORE LOSS ON DISPOSAL (90,466) (90,905) 5,001 12,352 154,516 (19,504) LOSS ON DISPOSAL - - (70,962) - - (70,962) -------- --------- ----------- --------- --------- ----------- NET INCOME $(90,466) $ (90,905) $ (75,963) $ 12,352 $ 154,516 $ (90,466) ======== ========= =========== ========= ========= ===========
CONSOLIDATING CONDENSED STATEMENT OF OPERATIONS Nine-months Ended September 30, 2000 (in thousands)
Combined Combined Parent Guarantor Nonguarantor Guarantor Issuer Subsidiaries Subsidiaries Eliminations Consolidated --------- ------ ------------ ------------ ------------ ------------ NET SALES $ - $ 339,841 $ 1,174,332 $235,927 $ - $ 1,750,100 COST OF SALES - 271,103 901,662 174,485 - 1,347,250 -------- --------- ----------- -------- -------- ----------- GROSS PROFIT - 68,738 272,670 61,442 - 402,850 OTHER OPERATING COSTS Selling, administrative and other 192 53,648 193,535 34,186 - 281,561 Restructuring costs - 544 535 - - 1,079 -------- --------- ----------- -------- -------- ----------- Total Other Operating Costs 192 54,192 194,070 34,186 - 282,640 -------- --------- ----------- -------- -------- ----------- OPERATING INCOME (LOSS) (192) 14,546 78,600 27,256 - 120,210 OTHER (INCOME) EXPENSE Interest expense 6,062 57,280 23,087 1,898 (22,714) 65,613 Other (income) expense (6,635) (16,256) (645) 795 22,714 (27) -------- --------- ----------- -------- -------- ----------- INCOME (LOSS) BEFORE INCOME TAXES AND EQUITY IN UNDISTRIBUTED EARNINGS OF SUBSIDIARIES 381 (26,478) 56,158 24,563 - 54,624 PROVISION (BENEFIT) FOR INCOME TAXES - (10,069) 21,789 9,659 - 21,379 -------- --------- ----------- -------- -------- ----------- INCOME (LOSS) BEFORE EQUITY IN UNDISTRIBUTED EARNINGS OF SUBSIDIARIES 381 (16,409) 34,369 14,904 - 33,245 EQUITY IN UNDISTRIBUTED EARNINGS OF SUBSIDIARIES 33,531 52,638 13,412 - (99,581) - -------- --------- ----------- -------- -------- ----------- INCOME FROM CONTINUING OPERATIONS 33,912 36,229 47,781 14,904 (99,581) 33,245 DISCONTINUED OPERATIONS - (2,307) 2,009 1,356 - 1,058 -------- --------- ----------- -------- -------- ----------- INCOME BEFORE EXTRAORDINARY ITEM 33,912 33,922 49,790 16,260 (99,581) 34,303 EXTRAORDINARY ITEM 1,838 (391) - - - 1,447 -------- --------- ----------- -------- -------- ----------- NET INCOME $ 35,750 $ 33,531 $ 49,790 $ 16,260 $(99,581) $ 35,750 ======== ========= =========== ======== ======== ===========