FORM 10-Q
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
[ X ] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
For the twenty-six week period ended July 1, 1995
OR
[ ] 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 0-8514
LIQUI-BOX CORPORATION
(Exact name of registrant as specified in its charter)
OHIO 31-0628033
(State or other jurisdiction (I.R.S. Employer
of incorporation or organization) Identification No.)
6950 Worthington-Galena Road, Worthington, Ohio 43085
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code (614) 888-9280
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 (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
Indicate the number of shares outstanding of each of the issuer's
classes of common stock, as of the latest practicable date.
Class Outstanding at August 9, 1995
Common Stock, no par value 6,232,447 shares
Exhibit Index at Page 10-11
Page 1 of 31
LIQUI-BOX CORPORATION
INDEX
Page No.
Part I - Financial Information:
Item 1. Financial Statements
Condensed Consolidated Balance Sheets
July 1, 1995 and December 31, 1994 3-4
Condensed Consolidated Statements of Income
For the thirteen and twenty-six week periods
ended July 1, 1995 and July 2, 1994 5
Condensed Consolidated Statements of Cash Flows
For the twenty-six week periods ended
July 1, 1995 and July 2, 1994 6
Notes to Condensed Consolidated Financial Statements 7
Item 2. Management's Discussion and Analysis of
Financial Condition and Results of Operations 8-9
Part II - Other Information - Items 1-6 10-11
Exhibit 3(B) Code of Regulations as Amended 12-28
Exhibit 11 - Statement Re Computation of
Earnings Per Share 29
Exhibit 27 - Financial Data Schedule 30
Signatures 31
LIQUI-BOX CORPORATION
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
UNAUDITED
1. The accompanying financial statements include the accounts
of Liqui-Box Corporation (the "Company") and its subsidiaries.
The information furnished reflects all adjustments (all of
which were of a normal recurring nature) which are, in the opinion
of management, necessary to fairly present the consolidated financial
position, results of operations, and changes in cash flows on a
consistent basis.
Certain amounts in the prior year's financial statements
have been reclassified to conform with the 1995 presentation.
2. The accompanying unaudited consolidated financial statements
are presented in accordance with the requirements for Form 10-Q and
consequently do not include all the disclosures normally required by
generally accepted accounting principles or those which are normally
made in the Company's annual Form 10-K filing. Reference should be made
to the Company's aforementioned Form 10-K for additional disclosures
including a summary of the Company's accounting policies, which have not
significantly changed.
ITEM 2.
MANAGEMENT'S DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS
Net sales in the Second Quarter 1995 were higher than net sales in the
Second Quarter 1994 by 6.6%. For the first two quarters, net sales
for 1995 were 3.3% higher than net sales in 1994. The increase in
sales dollars is attributable to increased selling prices that
mitigate the effect of increases in raw material costs, partially
offset by a decline in unit sales in some of the Company's product
lines.
Gross profit as a percentage of net sales was 26.7% in the Second
Quarter 1995 and 33.5% in the Second Quarter 1994. For the first two
quarters of 1995, gross profit as a percentage of net sales was 26.8%
as compared to 33.2% in 1994. Year to date, the decrease in gross
profit as a percent of sales can be attributed to a minor shift in
product mix, as well as higher manufacturing costs at some plants,
plant consolidations and increases in raw material costs partly offset
by increased selling prices.
For the Second Quarter of 1995, selling, administrative, and
development expenses were 12.7% of sales as compared to 15.8% in the
Second Quarter of 1994. For the first six months of 1995, selling,
administrative, and development expenses were 13.8% of sales as
compared to 16.7% in 1994. The decrease, year to date, reflects the
Company's continuing commitment to control its overhead costs.
Income before taxes as a percentage of net sales was 13.7% in the
Second Quarter 1995 and 17.7% in the Second Quarter 1994. For the
first two quarters, income before taxes as a percentage of net sales
was 12.8% in 1995 as compared to 16.5% in 1994. These decreases are a
result of decreased gross profits which have been partially offset, on
a percentage basis, by declining selling, administrative, and
development costs during the first six months of 1995.
The provision for income taxes was 40.1% of before tax income for the
Second Quarter of 1995 and 40.3% for the Second Quarter 1994. On a
year to date basis, the provision for income taxes was 40.1% of income
before taxes in 1995 and 40.8% in 1994.
At the end of the Second Quarter of 1995 and 1994, Liqui-Box had no
significant backlog of orders. Sales of the Company's products
generally are closely coordinated with the production of its
customers. Typically orders are filled within 30 days.
Total working capital was $37,067,000 at the end of the Second Quarter
1995 and $33,176,000 at year end 1994. The ratio of current assets
to current liabilities was 3.0 to 1 at the end of the Second Quarter
1995 and 3.3 to 1 at year end 1994. Cash provided by financing
activities was $2,624,000 for Second Quarter 1995 compared to cash
used of $8,140,000 for Second Quarter 1994.
Net cash provided by operating activities was $138,000 for Second
Quarter 1995 compared to $8,309,000 for Second Quarter 1994.
Liqui-Box's major commitments for capital expenditures as of July 1,
1995 were, as they have been in the past, primarily for increased
capacity at existing locations, building filler machines for lease and
tooling for new projects. Funds required to fulfill these commitments
will be provided principally from operations with any additional
funding needed coming from an outstanding line of credit with
Huntington National Bank.
There have been no significant changes in capitalization during the
first six months of 1995, except for the repurchase of treasury
shares in the aggregate amount of $852,000 which were acquired
throughout the first six months of 1995 for future corporate use.
Funds for the repurchase of treasury shares came from operating
capital. The Company has not entered into any significant financing
arrangements not reflected in the financial statements.
Management feels that inflation, in the form of high raw material
prices, has had an effect on the Company's operations during the
Second Quarter of 1995.
PART II. OTHER INFORMATION
Item 1-3. Inapplicable
Item 4. Submission of Matters to a Vote of Security Holders
The Annual Meeting of Liqui-Box Corporation was held on
April 26, 1995 to elect four directors for terms expiring in 1997
and to ratify an amendment of Section 2 of Article II of the Regulations
of Liqui-Box Corporation requiring advance notice of shareholder
nominations for election to the Board of Directors. No other matters
came before the meeting.
At the close of business on the record date, 6,269,881
common shares of Liqui-Box Corporation were outstanding and entitled
to vote. Common shares present at the meeting by proxy or in person
were 5,277,289 or 84.169%.
Proposal 1, Election of Directors for term ending in 1997:
Abstain &
Broker
For Withheld Non-Votes
Jeanette A. Davis 5,231,885 45,202 0
Carl J. Aschinger, Jr. 5,131,801 145,217 0
Peter J. Linn 5,199,185 79,389 0
C. William McBee 5,197,900 80,674 0
Directors who term of office continue after the Annual Meeting
are Samuel B. Davis, John A. Maginnis and Robert S. Hamilton.
Proposal 2, Amend Section 2 of Article II of the Regulations
requiring advance notice of shareholder nominations for election
to the Board of Directors:
Broker
For Against Abstain Non-Votes
Amendment 4,920,544 234,825 21,837 0
Item 5. Inapplicable
Item 6. Exhibits and Reports on Form 8-K
(a) Exhibit Index
Exhibit 3(B) Code of Regulations as Amended (pages 12-28)
Exhibit 11. Statement Re Computation of Earnings Per Share (page 29)
Exhibit 27. Financial Data Schedule (page 30)
(b) A report on Form 8-K, dated April 10, 1995, was filed by the
Company on April 10, 1995 in order to report the dismissal, on
April 3, 1995, of Ernst & Young LLP as independent public accountants
for the Company and its subsidiaries, and the hiring of Deloitte & Touche
LLP as independent public accountants on April 7, 1995.
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.
LIQUI-BOX CORPORATION
(Registrant)
Date August 15, 1995 By /S/ Samuel B. Davis
Samuel B. Davis
Chairman of the Board, Chief
Executive Officer, President,
Treasurer and Director
(Duly Authorized Officer)
_________________
Liqui-Box Corporation and Subsidiaries
Condensed Consolidated Balance Sheets
UNAUDITED
July 1, 1995 December 31, 1994
Assets
Current Assets:
Cash and cash equivalents $ 3,108,000 $ 4,341,000
Accounts receivable:
Trade, net of allowance for
doubtful accounts of
$557,000 and $594,000 at
respective dates 21,943,000 15,209,000
Other 912,000 1,065,000
22,855,000 16,274,000
Inventories
Raw materials and
supplies 12,953,000 13,104,000
Work in process and
finished goods 13,696,000 11,313,000
26,649,000 24,417,000
Other current assets 3,375,000 2,816,000
Total Current Assets 55,987,000 47,848,000
Property, plant and equipment,
at cost:
Buildings and leasehold
improvements 8,073,000 8,243,000
Equipment and vehicles 52,928,000 50,314,000
Equipment leased to customers 16,992,000 16,367,000
Less accumulated depreciation (54,033,000) (52,467,000)
23,960,000 22,457,000
Construction in process 3,894,000 4,291,000
Land 468,000 468,000
28,322,000 27,216,000
Other Assets:
Loans to officers and
employees 70,000 76,000
Goodwill, net of
amortization 10,507,000 10,723,000
Deferred charges and
other assets 3,056,000 3,322,000
13,633,000 14,121,000
Total Assets $ 97,942,000 $ 89,185,000
The accompanying notes are an integral part of the financial statements.
Liqui-Box Corporation and Subsidiaries
Condensed Consolidated Balance Sheets
UNAUDITED
July 1, 1995 December 31, 1994
Liabilities and Stockholders' Equity
Current Liabilities:
Short-term borrowings $5,500,000 $1,000,000
Accounts payable 5,229,000 7,247,000
Dividends payable 625,000 627,000
Salaries, wages and
related liabilities 3,192,000 1,639,000
Federal, state and local
taxes 1,602,000 1,987,000
Other accrued liabilities 2,744,000 2,117,000
Current obligations under
capital lease 28,000 55,000
Total Current Liabilities 18,920,000 14,672,000
Other noncurrent liabilities:
Deferred income taxes 830,000 830,000
Stockholders' Equity:
Preferred stock without par value
2,000,000 shares authorized;
none issued
Common stock $.1667 stated value
20,000,000 shares authorized;
7,262,598 shares issued 1,210,000 1,210,000
Additional paid in capital 4,666,000 4,478,000
Cumulative translation adjustment 1,060,000 729,000
Retained earnings 92,648,000 88,017,000
Less:
Treasury stock, at cost--
1,010,293 and 902,102
shares at respective dates (21,392,000) (20,751,000)
Total Stockholders' Equity 78,192,000 73,683,000
Total Liabilities and
Stockholders' Equity $ 97,942,000 $ 89,185,000
The accompanying notes are an integral part of the financial statements.
Liqui-Box Corporation and Subsidiaries
Condensed Consolidated Statements of Income
UNAUDITED UNAUDITED
Thirteen Weeks Ended Twenty-six Weeks Ended
July 1, July 2, July 1, July 2,
1995 1994 1995 1994
Net Sales $ 42,984,000 $ 40,340,000 $ 76,630,000 $ 74,197,000
Cost of Sales 31,515,000 26,834,000 56,121,000 49,578,000
11,469,000 13,506,000 20,509,000 24,619,000
Selling, administrative
and development expenses 5,456,000 6,380,000 10,555,000 12,353,000
6,013,000 7,126,000 9,954,000 12,266,000
Interest and
dividend income 30,000 42,000 57,000 87,000
Interest expense (75,000) (45,000) (115,000) (107,000)
Other income (expense) (84,000) 6,000 (79,000) 23,000
5,884,000 7,129,000 9,817,000 12,269,000
Taxes on income 2,359,000 2,871,000 3,936,000 5,004,000
Net Income $ 3,525,000 $ 4,258,000 $ 5,881,000 $ 7,265,000
Earnings per common and common
equivalent share
Primary $0.55 $0.66 $0.92 $1.12
Fully Diluted $0.55 $0.66 $0.92 $1.12
Cash dividends per
common share $0.10 $0.10 $0.20 $0.20
Weighted average number of
common and common
equivalent shares used in
computing earnings per share
Primary 6,380,352 6,489,519 6,389,836 6,500,328
Fully Diluted 6,380,352 6,495,652 6,392,015 6,501,581
The accompanying notes are an integral part of the financial statements.
Liqui-Box Corporation and Subsidiaries
Condensed Consolidated Statements of Cash Flows
UNAUDITED
Twenty-six Weeks Ended
July 1, July 2,
1995 1994
Operating Activities:
Net income $5,881,000 $7,265,000
Adjustments to reconcile net
income to net cash
provided by operating activities:
Depreciation and amortization 3,745,000 3,821,000
Changes in noncurrent deferred
income tax accounts
Changes in operating assets
and liabilities:
Increase in accounts receivable (6,488,000) (6,261,000)
(Increase) decrease in inventories (2,168,000) 1,086,000
Increase in other current assets (559,000) (84,000)
Decrease in accounts and
dividends payable (2,068,000) (1,040,000)
Increase in salaries, wages and
related liabilities 1,553,000 2,699,000
Increase in other accrued
liabilities 242,000 823,000
Net Cash Provided by Operating
Activities 138,000 8,309,000
Investing Activities:
Purchase of Inpaco, net of cash
acquired (200,000)
Net change in property, plant
and equipment (4,079,000) (2,597,000)
Other asset changes, net 24,000 6,000
Net Cash Used in Investing
Activities (4,055,000) (2,791,000)
Financing Activities:
Acquisition of treasury shares (852,000) (977,000)
Sale of treasury shares 247,000 78,000
Cash dividends (1,250,000) (1,270,000)
Changes in loans to officers
and employees 6,000 53,000
Proceeds of short-term borrowings 4,500,000
Repayment of short and long-term
borrowings (6,000,000)
Principle payments on capital
lease obligations (27,000) (24,000)
Net Cash (Used) Provided by
Financing Activities 2,624,000 (8,140,000)
Effect of exchange rate changes on Cash
60,000 56,000
Decrease in Cash and Cash
Equivalents (1,233,000) (2,566,000)
Cash and cash equivalents at
beginning of year 4,341,000 6,376,000
Cash and Cash Equivalents at
End of Second Quarter $3,108,000 $3,810,000
The accompanying notes are an integral part of the financial statements.