SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-Q
(X) QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934
For the quarterly period ended April 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 0-6187
BANTA CORPORATION
(Exact name of registrant as specified in its charter)
Wisconsin 39-0148550
(State or other jurisdiction (IRS Employer
of incorporation or organization) I.D. Number)
225 Main Street, Menasha, Wisconsin 54952
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code: (414) 751-7777
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 registrant had outstanding on April 1, 1995, 20,143,084 shares of
$.10 par value common stock.
BANTA CORPORATION AND SUBSIDIARIES
Quarterly Report Form 10-Q
For the Quarter Ended April 1, 1995
INDEX
PART I Financial Statements: Page Number
Unaudited Consolidated Condensed Balance Sheets
April 1, 1995 and December 31, 1994 . . . . . . . . . . . . . 3
Unaudited Consolidated Condensed Statements of Earnings for
the Three Months Ended April 1, 1995 and April 2, 1994 . . . . 4
Unaudited Consolidated Condensed Statements of Cash Flows
for the Three Months Ended April 1, 1995 and April 2, 1994 . . 5
Notes to Unaudited Consolidated Condensed
Financial Statements . . . . . . . . . . . . . . . . . . . . . 6
Management's Discussion and Analysis of Financial Condition
and Results of Operations . . . . . . . . . . . . . . . . . 7-8
PART II Other Information and Signatures:
Item 6 - Exhibits and Reports on Form 8-K . . . . . . . . . . . 8
Exhibit Index . . . . . . . . . . . . . . . . . . . . . . . . . 9
PART I Item 1 - Financial Statements
BANTA CORPORATION AND SUBSIDIARIES
UNAUDITED CONSOLIDATED CONDENSED BALANCE SHEETS
April 1, December 31,
1995 1994
(Dollars in Thousands)
ASSETS
Current Assets
Cash $ 619 $ 370
Receivables 163,323 169,613
Inventories 75,816 67,797
Other current assets 11,970 10,644
------- -------
Total Current Assets 251,728 248,424
------- -------
Plant and Equipment 539,545 523,735
Less Accumulated Depreciation 241,715 230,073
------- -------
Plant and Equipment, net 297,830 293,662
------- -------
Other Assets 11,212 11,766
Cost in Excess of Net Assets
of Businesses Acquired 23,735 23,911
------ -------
$ 584,505 $ 577,763
======= ========
LIABILITIES AND SHAREHOLDERS' INVESTMENT
Current Liabilities
Notes payable $ 20,916 $ 56,001
Accounts payable 47,344 44,960
Accrued salaries and wages 18,825 20,239
Other accrued liabilities 23,695 17,469
Current maturities of long-term debt 8,146 8,333
------- ---------
Total Current Liabilities 118,926 147,002
------- --------
Long-term Debt 92,554 67,834
Deferred Income Taxes 19,430 19,218
Other Non-current Liabilities 13,565 12,122
Shareholders' Investment
Preferred stock - $10 par value;
authorized 300,000 shares, none
issued - -
Common stock - $.10 par value;
authorized 75,000,000
shares, 20,143,084 and 20,079,007
shares issued, respectively 2,014 2,013
Amount in excess of par value of stock 57,038 56,780
Retained earnings 280,978 272,794
-------- -------
Total Shareholders' Investment 340,030 331,587
------- -------
$ 584,505 $ 577,763
======= =======
See accompanying notes to consolidated financial statements.
BANTA CORPORATION AND SUBSIDIARIES
UNAUDITED CONSOLIDATED CONDENSED STATEMENTS OF EARNINGS
(Dollars in Thousands, Except Per Share Amounts)
Three Months Ended
April 1, April 2,
1995 1994
Net sales $ 232,954 $ 187,464
Cost of goods sold 183,265 146,400
------- -------
Gross earnings 49,689 41,064
Selling and administrative expense 29,108 24,046
------- -------
Earnings from operations 20,581 17,018
Interest expense 2,268 1,113
Other (expense) income, net (11) 60
------- -------
Earnings before income taxes 18,302 15,965
Provision for income taxes 7,300 6,400
------- -------
Net earnings $ 11,002 9,565
======= ======
Earnings per share of common stock $ .54 .47
======= ======
Average common shares outstanding 20,259,846 20,243,003
========== ==========
Cash dividends per share of common stock $ .14 $ .13
========= ========
See accompanying notes to consolidated financial statements.
BANTA CORPORATION AND SUBSIDIARIES
UNAUDITED CONSOLIDATED CONDENSED
STATEMENTS OF CASH FLOWS
(Dollars in Thousands) Three Months Ended
April 1, April 2,
1995 1994
Cash Flow From Operating Activities
Net earnings $ 11,002 $ 9,565
Depreciation and amortization 12,018 9,484
Deferred income taxes 212 (618)
Change in assets and liabilities
Decrease (increase) in receivables 6,290 (1,447)
(Increase) decrease in inventories (8,019) 8,055
Increase in other current assets (1,326) (2,086)
Increase in accounts payable
and accrued liabilities 7,196 5,595
Decrease in other non-current assets 554 618
Other, net 1,443 1,056
------ -------
Cash provided from operating
activities 29,370 30,222
------- -------
Cash Flow From Investing Activities
Capital expenditures, net (16,010) (26,489)
Acquisition of business - (16,331)
--------- --------
Cash used for investing activities (16,010) (42,820)
--------- --------
Cash Flow From Financing Activities
(Repayment) issuance of notes payable,
net (35,085) 8,375
Issuance of long-term debt 25,000 -
Repayment of long-term debt (467) (1,188)
Dividends paid (2,818) (2,601)
Proceeds from exercise of stock options 259 655
--------- --------
Cash (used for) provided from
financing activities (13,111) 5,241)
--------- --------
Net increase (decrease) in cash 249 (7,357)
Cash at beginning of period 370 8,230
-------- --------
Cash at end of period $ 619 $ 873
======== ========
Cash payments for:
Interest, net of amount capitalized $ 2,429 $ 1,865
Income taxes 1,214 1,918
See accompanying notes to consolidated financial statements.
BANTA CORPORATION AND SUBSIDIARIES
NOTES TO UNAUDITED CONSOLIDATED CONDENSED FINANCIAL STATEMENTS
1) Basis of Presentation
The condensed financial statements included herein have been prepared
by the Corporation, without audit, pursuant to the rules and
regulations of the Securities and Exchange Commission. Certain
information and footnote disclosures normally included in financial
statements prepared in accordance with generally accepted accounting
principles have been condensed or omitted pursuant to such rules and
regulations, although the Corporation believes that the disclosures
are adequate to make the information presented not misleading. It is
suggested that these condensed financial statements be read in
conjunction with the financial statements and the notes thereto
included in the Corporation's latest Annual Report on Form 10-K.
In the opinion of Management, the aforementioned statements reflect
all adjustments (consisting only of normal recurring adjustments)
necessary for a fair presentation of the results for the interim
periods.
2) Inventories
The majority of the Corporation's inventories are accounted for at
cost determined on a last-in, first-out (LIFO) basis, which is not in
excess of market. The remaining inventories are stated at the lower
of cost or market using the first-in, first-out (FIFO) method.
Inventories include material, labor and manufacturing overhead.
Inventory amounts at April 1, 1995 and December 31, 1994 were as
follows:
(Dollars in Thousands)
April 1, December 31,
1995 1994
Raw Materials and Supplies $ 45,733 $ 37,106
Work-In-Process and Finished Goods 36,423 35,531
------ ------
FIFO value (current cost of all
inventories) 82,156 72,637
Excess of current cost over carrying value
of LIFO inventories (6,340) (4,840)
------ ------
Net Inventories $ 75,816 $ 67,797
====== ======
Item 2
MANAGEMENT'S DISCUSSION AND ANALYSIS
OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
The following is management's discussion and analysis of certain
significant factors which have influenced the Corporation's financial
position and results of operations from the close of the latest fiscal
year-end in comparison to the corresponding interim period in the
preceding year included in the Unaudited Consolidated Condensed Balance
Sheets, Statements of Earnings and Statements of Cash Flows.
FINANCIAL CONDITION
Liquidity and Capital Resources
The Corporation's net working capital increased by approximately $31.4
million during the first quarter of 1995. This increase was primarily
due to the issuance during the quarter of $25 million of long-term
debt at an interest rate of 7.98%. The proceeds of the debt issued
were used primarily to repay short-term indebtedness. After the
issuance of this debt, the Corporation's ratio of long-term debt to
total capitalization was 21%.
RESULTS OF OPERATIONS
Net Sales
Sales for the first quarter of 1995 were $45.5 million (24%) higher
than the first quarter of 1994. Contributing to the sales increase
were acquisitions completed during 1994, which accounted for about
one-third of the sales increase. Since the Corporation supplies much
of its customers' paper, rising paper prices contributed about one-
fourth of the sales increase. Sales comparisons by market
classification showed increases in the commercial, book and magazine
markets. The largest sales gain was in the commercial market where
Danbury Printing (acquired in 1994) added $11 million in sales and
strong catalog volume carried over from the fourth quarter of 1994.
The book market showed increased sales strength due to gains in
technical manuals and software documentation.
Cost of Goods Sold
Cost of goods sold as a percentage of sales increased from 78.1% for
the first quarter of 1994 to 78.7% for the first quarter of 1995.
This overall margin decline resulted from several factors. Since the
sale of paper generally has lower margins than manufacturing sales,
the increase in paper sales reduced average margins. The inclusion of
the results of the two companies acquired in 1994 for the full first
quarter of 1995 has reduced margins as those companies currently
provide margins below the Corporation's average. Due to the recent
large increase in paper prices, the Corporation recorded a $1.5
million provision for last-in first-out (LIFO) inventory valuation
during the first quarter of 1995. No provision was required for the
first quarter of 1994. During the first quarter of 1995 paper
suppliers announced additional price increases to be implemented in
the second quarter. These increases, if implemented, will impact the
LIFO provision required during the remainder of 1995. Offsetting the
above margin reductions were higher margins in the book market due to
higher activity levels.
Selling and Administrative Expenses
Selling and administrative expenses were $5 million higher for the
first quarter of 1995 than for the first quarter of 1994. The
increase is primarily due to higher levels of activity in general and
the inclusion of $1.9 million of selling and administrative expenses
of the companies acquired in 1994.
Interest Expense
Interest expense was $1,155,000 higher in the first quarter of 1995
than for the first quarter of 1994 due to increased borrowings and
higher interest rates. The Corporation's average level of indebtedness
was approximately $49 million higher during the first quarter of 1995
compared with the same period in 1994. The Corporation's short-term
borrowing rates that were approximately 1.5 percentage points higher
in 1995 than in the first quarter of 1994.
Income Taxes
The Corporation's effective first quarter income tax rates were
approximately the same for the first quarter of 1995 and 1994,
respectively.
PART II: OTHER INFORMATION
ITEM 6. Exhibits and Reports on Form 8-K
(a) Exhibits
3(a) Amendment to By Laws
3(b) Bylaws, as amended
27 Financial Data Schedule
(b) No reports on Form 8-K were filed during the quarter for
which this report is filed.
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.
BANTA CORPORATION
/S/ GERALD A. HENSELER
Gerald A. Henseler
Executive Vice President and Chief Financial Officer
Date May 11, 1995
BANTA CORPORATION
EXHIBIT INDEX TO FORM 10-Q
For The Quarter Ended April 1, 1995
Page Number in Sequential
Exhibit Number Numbering System
3(a) Amendment to By Laws
3(b) Bylaws, as amended
27 Financial Data Schedule