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 thirty-nine week period ended September 30, 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 November 1, 1995
Common Stock, no par value 6,232,447 shares
Exhibit Index at Page 10
Page 1 of 13
LIQUI-BOX CORPORATION
INDEX
Page No.
Part I - Financial Information:
Item 1. Financial Statements
Condensed Consolidated Balance Sheets
September 30, 1995 and December 31, 1994 ............. 3-4
Condensed Consolidated Statements of Income
For the thirteen and thirty-nine week periods ended
September 30, 1995 and October 1, 1994 ................ 5
Condensed Consolidated Statements of Cash Flows
For the thirty-nine week periods ended
September 30, 1995 and October 1, 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
Exhibit 11 - Statement Re Computation of Earnings Per Share 11
Signatures ................................................. 12
Exhibit 27 - Financial Data Schedule ....................... 13
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Liqui-Box Corporation and Subsidiaries
Condensed Consolidated Balance Sheets
UNAUDITED
------------------
September 30, December 31,
1995 1994
------------------ -----------------
Assets
Current Assets:
Cash and cash equivalents ......................... $ 7,859,000 $ 4,341,000
Accounts receivable:
Trade, net of allowance for doubtful accounts
of $529,000 and $594,000 at respective dates 22,336,000 15,209,000
Other ........................................ 851,000 1,065,000
------------ ------------
23,187,000 16,274,000
Inventories
Raw materials and supplies ................... 10,987,000 13,104,000
Work in process .............................. 6,378,000 6,089,000
Finished goods ............................... 4,552,000 5,224,000
------------ ------------
21,917,000 24,417,000
Prepaid expenses .................................. 846,000 472,000
Other current assets .............................. 2,393,000 2,344,000
------------ ------------
Total Current Assets .................... 56,202,000 47,848,000
Property, plant and equipment, at cost:
Buildings and leasehold improvements .............. 8,056,000 8,243,000
Equipment and vehicles ............................ 53,434,000 50,314,000
Equipment leased to customers ..................... 17,441,000 16,367,000
Less accumulated depreciation ................ (55,550,000) (52,467,000)
------------ ------------
23,381,000 22,457,000
Construction in process ...................... 4,498,000 4,291,000
Land ......................................... 468,000 468,000
------------ ------------
28,347,000 27,216,000
Other Assets:
Loans to officers and employees ................... 70,000 76,000
Goodwill, net of amortization ..................... 10,332,000 10,723,000
Deferred charges and other assets ................. 2,852,000 3,322,000
------------ ------------
13,254,000 14,121,000
------------ ------------
Total Assets ............................ $ 97,803,000 $ 89,185,000
============ ============
The accompanying notes are an integral part of the financial statements.
Liqui-Box Corporation and Subsidiaries
Condensed Consolidated Balance Sheets
UNAUDITED
----------------
September 30, December 31,
1995 1994
--------------- -------------
Liabilities and Stockholders' Equity
Current Liabilities:
Short-term borrowings ............................... $ 1,500,000 $ 1,000,000
Accounts payable .................................... 5,877,000 7,247,000
Dividends payable ................................... 685,000 627,000
Salaries, wages and related liabilities ............. 4,177,000 1,639,000
Federal, state and local taxes ...................... 966,000 1,987,000
Other accrued liabilities ........................... 2,827,000 2,117,000
Current obligations under capital lease ............. 27,000 55,000
------------ ------------
Total Current Liabilities .............. 16,059,000 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 .......................... 4,852,000 4,478,000
Cumulative translation adjustment ................... 928,000 729,000
Retained earnings ................................... 96,186,000 88,017,000
Less:
Treasury stock, at cost--1,037,449 and 902,102
shares at respective dates ................ (22,262,000) (20,751,000)
------------ ------------
Total Stockholders' Equity .......... 80,914,000 73,683,000
------------ ------------
Total Liabilities and Stockholders' Equity ........ $ 97,803,000 $ 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 Thirty-nine Weeks Ended
------------------------------------ -----------------------------
September 30, October 1, September 30, October 1,
1995 1994 1995 1994
------------- ---------- ------------- ----------
Net Sales ....................... $ 48,230,000 $ 42,301,000 $ 124,860,000 $ 116,498,000
Cost of Sales ................... 34,999,000 29,411,000 91,120,000 78,989,000
------------ ------------ ------------- -------------
13,231,000 12,890,000 33,740,000 37,509,000
Selling, administrative and
development expenses ....... 6,166,000 6,025,000 16,721,000 18,378,000
------------ ------------ ------------- -------------
7,065,000 6,865,000 17,019,000 19,131,000
Interest and dividend income .... 67,000 27,000 124,000 114,000
Interest expense ................ (84,000) (41,000) (199,000) (148,000)
Other income (expense) .......... 3,000 (50,000) (76,000) (27,000)
------------ ------------ ------------- -------------
7,051,000 6,801,000 16,868,000 19,070,000
Taxes on income ................. 2,828,000 2,839,000 6,764,000 7,843,000
------------ ------------ ------------- -------------
Net Income ................. $ 4,223,000 $ 3,962,000 $ 10,104,000 $ 11,227,000
============ ============ ============= =============
Earnings per common and common
equivalent share
Primary ......................... $ 0.66 $ 0.61 $ 1.59 $ 1.73
============ ============ ============= =============
Fully Diluted ................... $ 0.66 $ 0.61 $ 1.59 $ 1.73
============ ============ ============= =============
Cash dividends per
common share ............... $ 0.11 $ 0.10 $ 0.31 $ 0.30
============ ============ ============= =============
Weighted average number of
common and common
equivalent shares used in
computing earnings per share
Primary ......................... 6,357,224 6,455,913 6,363,843 6,480,321
============ =========== ============ ============
Fully Diluted ................... 6,357,224 6,455,913 6,363,843 6,480,321
============ =========== ============ ============
The accompanying notes are an integral part of the financial statements.
Liqui-Box Corporation and Subsidiaries
Condensed Consolidated Statements of Cash Flows
UNAUDITED
-------------------------------------
Thirty-nine Weeks Ended
-------------------------------------
September 30, October 1,
1995 1994
---------------- -------------
Operating Activities:
Net income ...................................................... $ 10,104,000 $ 11,227,000
Adjustments to reconcile net income to net cash
provided by operating activities:
Depreciation and amortization ............................ 5,776,000 5,736,000
Provision for losses on accounts receivable .............. 185,000 379,000
Gain on disposal of fixed assets ......................... (172,000)
Changes in operating assets and liabilities:
Increase in accounts receivable ................... (7,066,000) (4,522,000)
Decrease (increase) in inventories ................ 2,511,000 (673,000)
(Increase) decrease in other current assets ....... (423,000) 1,331,000
Decrease in accounts and dividends payable ........ (1,317,000) (995,000)
Increase in salaries, wages and related liabilities 2,538,000 2,142,000
(Decrease) increase in other accrued liabilities .. (311,000) 1,153,000
------------ ------------
Net Cash Provided by Operating Activities ....................... 11,997,000 15,606,000
Investing Activities:
Purchase of Inpaco, net of cash acquired ........................ (200,000)
Net change in property, plant and equipment ..................... (5,742,000) (3,801,000)
Other asset changes, net ........................................ 92,000 (458,000)
------------ ------------
Net Cash Used in Investing Activities ...................... (5,650,000) (4,459,000)
Financing Activities:
Acquisition of treasury shares .................................. (1,780,000) (2,593,000)
Sale of treasury shares ......................................... 315,000 237,000
Cash dividends .................................................. (1,935,000) (1,900,000)
Changes in loans to officers and employees ...................... 6,000 63,000
Proceeds of short-term borrowings ............................... 4,500,000
Repayment of short and long-term borrowings ..................... (4,000,000) (6,000,000)
Principle payments on capital lease obligations ................. (28,000) (24,000)
------------ ------------
Net Cash Used in Financing Activities ..................... (2,922,000) (10,217,000)
Effect of exchange rate changes on Cash ......................... 93,000 (132,000)
------------ ------------
Increase in Cash and Cash Equivalents ...................... 3,518,000 798,000
Cash and cash equivalents at beginning of year .................. 4,341,000 6,376,000
------------ ------------
Cash and Cash Equivalents at End of Third Quarter .......... $ 7,859,000 $ 7,174,000
============ ============
The accompanying notes are an integral part of the financial statements.
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.
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ITEM 2.
MANAGEMENT'S DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS
Net sales in the Third Quarter 1995 were higher than net sales in the
Third Quarter 1994 by 14.0%. For the first three quarters, net sales for 1995
were 7.2% higher than net sales in 1994. The increase in sales dollars is
primarily attributable to increased selling prices that mitigate the effect of
increases in raw material costs, which is partially offset by a slight decline
in unit sales.
Gross profit as a percentage of net sales was 27.4% in the Third Quarter
1995 and 30.5% in the Third Quarter 1994. For the first three quarters of
1995, gross profit as a percentage of net sales was 27.0% as compared to 32.2%
in 1994. Year to date, the decrease in gross profit as a percent of sales can
be primarily attributed to increases in raw material costs partly offset by
increased selling prices.
For the Third Quarter of 1995, selling, administrative, and development
expenses were 12.8% of sales as compared to 14.2% in the Third Quarter of
1994. For the first nine months of 1995, selling, administrative, and
development expenses were 13.4% of sales as compared to 15.8% in 1994. The
decreases reflect the Company's continuing commitment to control its overhead
costs.
Income before taxes as a percentage of net sales was 14.6% in the Third
Quarter 1995 and 16.1% in the Third Quarter 1994. For the first three
quarters, income before taxes as a percentage of net sales was 13.5% in 1995
as compared to 16.4% in 1994. These decreases are a result of decreased gross
profits which have been partially offset by reduced selling, administrative,
and development costs during the first nine months of 1995.
The provision for income taxes was 40.1% of before tax income for the
Third Quarter of 1995 and 41.7% for the Third Quarter 1994. On a year to date
basis, the provision for income taxes was 40.1% of income before taxes in 1995
and 41.1% in 1994.
At the end of the Third 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 $40,143,000 at the end of the Third Quarter
1995 and $33,176,000 at year end 1994. The ratio of current assets to current
liabilities was 3.5 to 1 at the end of the Third Quarter 1995 and 3.3 to 1 at
year end 1994.
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Cash used in financing activities was $2,922,000 for Third Quarter 1995
compared to $10,217,000 for Third Quarter 1994.
Net cash provided by operating activities was $11,997,000 for Third
Quarter 1995 compared to $15,606,000 for Third Quarter 1994.
Liqui-Box's major commitments for capital expenditures as of September
30, 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.
Longer term cash requirements, other than normal operating expenses, are
anticipated for expanding capacity at existing facilities, building filler
machines for lease, repurchases of Company stock and development of new
products and enhancements of existing products. The Company believes that its
existing cash, available line of credit and anticipated cash generated from
operations will be sufficient to satisfy its currently anticipated cash
requirements.
There have been no significant changes in capitalization during the first
nine months of 1995, except for the repurchase of treasury shares in the
aggregate amount of $1,780,000 which were acquired throughout the first nine
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 higher raw material
prices, has had an effect on the Company's operations during the first three
quarters of 1995.
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PART II. OTHER INFORMATION
Item 1-5. Inapplicable
Item 6. Exhibits and Reports on Form 8-K
(a) Exhibit Index
Exhibit 11. Statement Re Computation of Earnings Per Share (page 11)
Exhibit 27. Financial Data Schedule (page 12)
(b) No reports on Form 8-K were filed during the quarter ended September
30, 1995.
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