SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
---------------
FORM 10-Q
(Mark One)
____ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15 (d)
/ X / OF THE SECURITIES EXCHANGE ACT OF 1934
- ----
For the quarterly 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 1-10258
Tredegar Industries, Inc. (Exact
name of registrant as specified in its charter)
Virginia 54-1497771
(State or other jurisdiction (I.R.S. Employer
of incorporation or organization) Identification No.)
1100 Boulders Parkway
Richmond, Virginia 23225
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code: (804) 330-1000
Indicate by check 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 Common Stock, no par value, outstanding as of
October 31, 1995: 8,439,934
PART I - FINANCIAL INFORMATION
Item 1. Financial Statements.
TREDEGAR INDUSTRIES, INC.
CONSOLIDATED BALANCE SHEETS
(In Thousands)
(Unaudited)
Sept. 30 Dec. 31
1995 1994
----------------- -----------------
ASSETS
Cash and cash equivalents $ 11,414 $ 9,036
Accounts and notes receivable 76,149 73,248
Inventories 28,425 35,369
Income taxes recoverable - 2,534
Deferred income taxes 15,802 14,014
Prepaid expenses and other 2,712 696
----------------- -----------------
Total current assets 134,502 134,897
----------------- -----------------
Property, plant and equipment 323,279 318,124
Less accumulated depreciation and
amortization 200,870 194,505
----------------- -----------------
Net property, plant and equipment 122,409 123,619
----------------- -----------------
Other assets and deferred charges 32,142 29,073
Goodwill and other intangibles 30,303 30,756
----------------- -----------------
Total assets $319,356 $318,345
================= =================
LIABILITIES AND SHAREHOLDERS' EQUITY
Accounts payable $ 32,859 $ 31,486
Accrued expenses 39,644 41,288
Income taxes payable 480 -
----------------- -----------------
Total current liabilities 72,983 72,774
Long-term debt 35,000 38,000
Deferred income taxes 21,147 20,336
Other noncurrent liabilities 16,500 15,357
----------------- -----------------
Total liabilities 145,630 146,467
----------------- -----------------
Shareholders' equity:
Common stock, no par value 122,989 136,150
Foreign currency translation adjustment 509 327
Retained earnings 50,228 35,401
----------------- -----------------
Total shareholders' equity 173,726 171,878
----------------- -----------------
Total liabilities and
shareholders' equity $319,356 $318,345
================= =================
See accompanying notes to financial statements.
TREDEGAR INDUSTRIES, INC.
CONSOLIDATED STATEMENTS OF INCOME
(In Thousands, Except Per-Share Amounts)
(Unaudited)
Third Quarter Nine Months Ended
Ended Sept. 30 Ended Sept. 30
----------------------- --------------------
1995 1994 1995 1994
--------- --------- -------- --------
Net sales ............... $ 145,955 $ 132,191 $ 446,720 $ 376,098
Other (expenses)
income, net ........... (286) (199) (635) (270)
--------- --------- --------- ---------
145,669 131,992 446,085 375,828
--------- --------- --------- ---------
Cost of goods sold ...... 121,806 110,463 374,141 315,397
Selling, general and
administrative
expenses .............. 10,444 11,783 35,702 35,337
Research & development
expenses .............. 2,668 2,178 6,435 5,944
Interest expense ........ 951 939 2,528 3,282
Unusual items ........... (728) 6,973 (78) 16,494
--------- --------- --------- ---------
135,141 132,336 418,728 376,454
--------- --------- --------- ---------
Income (loss) from
continuing operations
before income taxes ... 10,528 (344) 27,357 (626)
Income taxes ............ 3,902 (66) 10,212 1,671
--------- --------- --------- ---------
Income (loss) from
continuing operations . 6,626 (278) 17,145 (2,297)
Income from discontinued
energy operations ..... -- 26,753 -- 37,218
--------- --------- --------- ---------
Net income .............. $ 6,626 $ 26,475 $ 17,145 $ 34,921
========= ========= ========= =========
Earnings (loss) per
common and dilutive
common equivalent
share:
Continuing operations $ .75 $ (.02) $ 1.91 $ (.21)
Discontinued energy
operations ........ -- 2.52 -- 3.47
--------- --------- --------- ---------
Net income .......... $ .75 $ 2.50 $ 1.91 $ 3.26
========= ========= ========= =========
Shares used to compute
earnings (loss) per
common and dilutive
common equivalent
share ................. 8,801 10,590 8,990 10,735
========= ========= ========= =========
See accompanying notes to financial statements.
TREDEGAR INDUSTRIES, INC.
CONSOLIDATED STATEMENTS OF CASH FLOWS
(In Thousands)
(Unaudited)
Nine Months Ended
Sept. 30
----------------
1995 1994
--------- ----------
Cash flows from operating activities:
Continuing operations:
Income (loss) from continuing operations .............. $ 17,145 ($ 2,297)
Adjustments for noncash items:
Depreciation ........................................ 17,607 17,600
Amortization of intangibles ......................... 433 1,250
Write-off of intangibles ............................ -- 14,393
Deferred income taxes ............................... (249) (8,243)
Accrued pension income and
postretirement benefits, net ...................... (1,523) (52)
Changes in assets and liabilities, net
of effects from acquisitions:
Accounts and notes receivable ....................... 436 (6,444)
Inventories ......................................... 8,733 4,650
Income taxes recoverable ............................ 2,534 --
Prepaid expenses and other .......................... (2,016) (393)
Accounts payable .................................... (1,209) 4,818
Accrued expenses & income taxes payable ............. (2,533) 6,568
Other, net ............................................ (1,064) (1,215)
-------- --------
Net cash provided by continuing operating activities 38,294 30,635
Net cash provided by discontinued operating activities .. -- 5,665
-------- --------
Net cash provided by operating activities ......... 38,294 36,300
-------- --------
Cash flows from investing activities:
Continuing operations:
Capital expenditures .................................. (15,890) (11,731)
Acquisitions (net of $358 cash acquired) .............. (3,637) --
Investments ........................................... (1,327) (1,400)
Proceeds from the sale of investments ................. 1,478 --
Property disposals .................................... 841 2,263
Other, net ............................................ 414 (24)
-------- --------
Net cash used in investing activities of
continuing operations ............................. (18,121) (10,892)
Net cash provided by disposals of discontinued
operations ............................................ -- 75,393
-------- --------
Net cash (used in) provided by investing activities (18,121) 64,501
-------- --------
Cash flows from financing activities:
Dividends paid .......................................... (1,556) (1,926)
Net decrease in borrowings .............................. (3,000) (61,500)
Repurchases of Tredegar common stock .................... (14,974) (4,438)
Other, net .............................................. 1,735 12
-------- --------
Net cash used in financing activities ............. (17,795) (67,852)
-------- --------
Increase in cash and cash equivalents ..................... 2,378 32,949
Cash and cash equivalents at beginning of period .......... 9,036 --
-------- --------
Cash and cash equivalents at end of period ................ $ 11,414 $ 32,949
======== ========
See accompanying notes to financial statements.
TREDEGAR INDUSTRIES, INC.
NOTES TO THE CONSOLIDATED INTERIM FINANCIAL STATEMENTS
(Unaudited)
1. In the opinion of management, the accompanying consolidated financial
statements of Tredegar Industries, Inc. and Subsidiaries ("Tredegar")
contain all adjustments necessary to present fairly, in all material
respects, Tredegar's consolidated financial position as of September 30,
1995, and the consolidated results of their operations and their cash flows
for the nine months ended September 30, 1995 and 1994. All such adjustments
are deemed to be of a normal recurring nature. These financial statements
should be read in conjunction with the consolidated financial statements
and notes thereto included in Tredegar's Annual Report on Form 10-K for the
year ended December 31, 1994. The results of operations for the nine months
ended September 30, 1995, are not necessarily indicative of the results to
be expected for the full year.
2. During the third quarter, Tredegar announced that it is exploring the sale
of Tredegar Molded Products Company ("Molded Products") and Brudi, Inc.
("Brudi"). Molded Products and Brudi had net assets of approximately $35
million and $27 million at September 30, 1995, respectively. Combined net
sales, ongoing operating profit (loss) and unusual items for Molded
Products and Brudi for the third quarter and nine months ended September
30, 1995 and 1994, and the year ended December 31, 1994, are as follows:
(In Thousands)
Third Quarter Ended Nine Months Ended Year Ended
Sept. 30 Sept. 30 Dec. 31
--------------- ---------------- ------------
1995 1994 1995 1994 1994
---- ---- ---- ---- ----
Combined net
sales ........ $27,856 $ 28,552 $89,460 $ 79,261 $ 105,470
Combined ongoing
operating
profit (loss) 604 (572) 2,411 (2,104) (2,840)
Combined unusual
items (see
pages 13-14) . -- (6,973) -- (6,973) (6,973)
Tredegar is reporting its former Energy segment, which was divested in
1994, as discontinued operations.
3. On September 7, 1995, Tredegar replaced its two revolving credit facilities
dated August 18 and 19, 1994, with one new, 5-year facility that permits
borrowings of up to $275 million (no amounts borrowed at September 30,
1995). The new facility provides for interest to be charged at a base rate
(generally the London Interbank Offered Rate) plus a spread that is
dependent on Tredegar's quarterly debt-to-total capitalization ratio. A
facility fee is also charged on the $275 million commitment amount. The
spread and facility fee charged at various debt-to-total capitalization
levels are as follows:
Debt-to-Total
Capitalization Ratio (Basis Points)
Spread Facility Fee
-------- -------------
Less than or equal to 35% ......... 17.50 12.50
Greater than 35% and less
than or equal to 50% ............ 25.00 15.00
Greater than 50% .................. 31.25 18.75
In addition, a utilization fee of 10 basis points is charged on the
outstanding principal amount when more than $137.5 million is borrowed
under the agreement. The new agreement contains restrictions, among others,
on the payment of cash dividends and the maximum debt-to-total
capitalization ratio permitted (65% through September 30, 1996, and 60%
thereafter). At September 30, 1995, $58.4 million was available for cash
dividend payments and $275 million was available to borrow under the 65%
debt-to-total capitalization ratio restriction.
4. On April 11, 1995, Tredegar's Board of Directors authorized a "Dutch
Auction" tender offer for up to one million shares of the company's common
stock at a price range of $20 to $23 per share. The offer expired on May
15, 1995, and 642,797 shares were tendered and purchased by Tredegar for
approximately $15 million or $23 per share. Between October 30 and November
7, 1995, Tredegar purchased an additional 128,000 shares in broker
transactions at prices ranging from $28 to $29.625 per share.
Under a standing authorization from its board of directors, Tredegar may
purchase an additional 1.2 million shares in the open market or in
privately negotiated transactions at prices management deems appropriate.
In the first quarter of 1995, Tredegar granted stock options to purchase
146,000 shares of Tredegar common stock at prices not less than the fair
market value on the date of grant ($17.375 to $18.75) and for a term not to
exceed 10 years.
Tredegar has historically excluded common stock equivalents (stock
options) from its computation of earnings per common share due to their
immaterial dilutive effect. Immaterial is defined in this context
by Accounting Principles Board ("APB") Opinion No. 15 as dilution of
less than 3%. As a result of the tender offer and the increase in
Tredegar's stock price during 1995, stock options currently
outstanding are dilutive in excess of the threshold set forth in APB
Opinion No. 15. Accordingly, shares used to compute earnings (loss)
per common and dilutive common equivalent share for the third quarter and
nine months ended September 30, 1995, include common stock equivalents
of 353,000 and 267,000 shares, respectively. Fully diluted earnings
(loss) per common share is not materially different from the
earnings (loss) per common and dilutive common equivalent share presented
in the consolidated statements of income.
5. The components of inventories are as follows:
(In Thousands)
Sept. 30 Dec. 31
1995 1994
---- ----
Finished goods ........... $ 4,076 $ 4,970
Work-in-process .......... 3,070 5,243
Raw materials ............ 14,555 18,004
Stores, supplies and other 6,724 7,152
------- -------
Total ................ $28,425 $35,369
======= =======
6. Net income and earnings per share from continuing operations, adjusted for
unusual items affecting the comparability of operating results, are
presented below:
(In Thousands Except Per-Share Amounts)
Third Quarter Nine Months
Ended Sept. 30 Ended Sept. 30
-------------- --------------
1995 1994 1995 1994
---- ---- ---- ----
Net income (loss)
from continuing
operations ......................................................... $ 6,626 $ (278) $ 17,145 $(2,297)
After-tax effects of
unusual items:
Gain on sale of
Regal Cinema
shares .......................................................... (451) -- (451) --
APPX restructuring
charges ......................................................... -- -- 1,560 --
Recovery in
connection with a
Film Products
product liability
lawsuit ......................................................... -- -- (1,068) --
Write-off of Molded
Products goodwill ............................................... -- 3,109 -- 3,109
Charge associated
with the shutdown
of a Molded
Products plant .................................................. -- 1,300 -- 1,300
Write-off of APPX
intangibles ..................................................... -- -- -- 7,642
------- ------- -------- --------
Income from
continuing
operations as
adjusted for
unusual items ..................................................... $ 6,175 $ 4,131 $ 17,186 $ 9,754
======= ======= ======== ========
Earnings (loss) per common and dilutive common equivalent share from
continuing operations:
As reported ....................................................... $ .75 $ (.02) $ 1.91 $ (.21)
As adjusted for
unusual items ................................................... .70 .39 1.91 .91
7. Interest payments (net of amount capitalized) for the nine months ended
September 30, 1995 and 1994 were $1.9 million and $3.1 million,
respectively. Income tax payments (net) for the nine months ended
September 30, 1995 and 1994 were $10.3 million and $17.2 million,
respectively.
Item 2. Management's Discussion and Analysis of Financial
Condition and Results of Operations
Results of Operations
Third Quarter 1995 Compared with Third Quarter 1994
Net income from continuing operations for the third quarter of 1995 was
$6.6 million, or 75 cents per share, compared with a loss of $278,000, or 2
cents per share, in 1994. Unusual items in 1995 affecting the comparability of
operating results include a gain of $728,000 ($451,000 or 5 cents per share
after income taxes) on the sale of shares in Regal Cinema, Inc. Unusual items in
1994 include a charge of $4.9 million ($3.1 million or 29 cents per share after
income tax benefits) for the write-off of certain goodwill in Molded Products,
and a charge of $2.1 million ($1.3 million or 12 cents per share after income
tax benefits) for the shutdown of the Molded Products plant in Alsip, Illinois.
Excluding unusual items, third-quarter 1995 net income from continuing
operations was $6.2 million, or 70 cents per share, compared with $4.1 million,
or 39 cents per share, in 1994. The increase was due to continued strength in
Film Products and Aluminum Extrusions, improved results in Brudi and APPX, and
accretion in earnings per share due to stock repurchases.
Third-quarter net sales from continuing operations increased 10% in
1995 due primarily to higher volume and selling prices in Film Products. Higher
selling prices in both Film Products and Aluminum Extrusions reflect higher raw
material costs.
The gross profit margin increased slightly to 16.5% from 16.4% in 1994.
Selling, general and administrative expenses decreased 11.4% in 1995
primarily due to reductions at APPX and Molded Products, lower bad debt expenses
and commissions at Aluminum Extrusions, lower corporate services costs and lower
pension expense for salaried employees, partially offset by selling, general and
administrative expenses related to the Argentina films business acquired in the
first quarter of 1995 and a $200,000 charge associated with stock appreciation
rights. As a percentage of sales, selling, general and administrative expenses
declined to 7.2% in 1995 from 8.9% a year earlier.
Research and development expenses increased 22.5% compared with 1994
due to higher spending at Film Products, partially offset by the curtailment of
product development spending at APPX.
Interest expense increased slightly due to the write-off of deferred
charges totaling $110,000 associated with revolving credit facilities refinanced
in the third quarter of 1995 (see Note 3 of the Notes to the Consolidated
Interim Financial Statements on page 6). The average interest rate on debt
outstanding during the third quarter was 7.1%, compared with 6.6% in 1994.
Interest expense of $68,000 was allocated to discontinued energy operations in
the third quarter of 1994.
The effective tax rate for continuing operations, excluding unusual
items, decreased to 37.1% in 1995, compared with 37.7% in 1994, primarily due to
a lower effective state income tax rate.
Nine Months 1995 Compared with Nine Months 1994
Net income from continuing operations for the first nine months of 1995
was $17.1 million, or $1.91 per share, compared with a loss of $2.3 million, or
21 cents per share, in 1994. Unusual items in 1995 include a third-quarter gain
of $728,000 ($451,000 after income taxes or 5 cents per share) on the sale of
Regal Cinema shares, a first-quarter charge of $2.4 million ($1.6 million after
income tax benefits or 17 cents per share) for the restructuring of APPX and a
first-quarter recovery of $1.8 million ($1.1 million after income taxes or 12
cents per share) related to a final judgment in a Film Products product
liability lawsuit. Unusual items in 1994 include a third-quarter charge of $4.9
million ($3.1 million after income tax benefits or 29 cents per share) for the
write-off of certain goodwill in Molded Products, a third-quarter charge of $2.1
million ($1.3 million after income tax benefits or 12 cents per share) related
to the shutdown of a Molded Products plant and a first-quarter charge of $9.5
million ($7.6 million after income tax benefits or 71 cents per share) for the
write-off of goodwill and other intangibles in APPX.
Excluding unusual items, year-to-date net income from continuing
operations was $17.2 million, or $1.91 per share, compared with $9.8 million, or
91 cents per share, in 1994. The increase was due to continued strength in Film
Products and Aluminum Extrusions, improved results in Molded Products and APPX,
and accretion in earnings per share due to stock repurchases.
Net sales for the nine-month period increased 19% due primarily to
higher selling prices, reflecting higher raw material costs.
The gross profit margin increased slightly to 16.2% from 16.1%.
Selling, general and administrative expenses increased 1% in 1995
primarily due to the Argentina films business acquired in the first quarter of
1995 and a $700,000 charge associated with stock appreciation rights, partially
offset by reductions at APPX and Molded Products, lower bad debt expenses and
commissions at Aluminum Extrusions, lower corporate services costs and lower
pension expense for salaried employees. As a percentage of sales, selling,
general and administrative expenses declined to 8% in 1995, compared with 9.4% a
year ago.
Research and development expenses increased 8.3% compared with 1994 due
to higher spending at Film Products and Molecumetics, partially offset by the
curtailment of product development spending at APPX.
Interest expense for continuing operations decreased 23% due to lower
average debt levels. The average interest rate on debt outstanding was 7.1% in
1995 (primarily fixed-rate debt) and 6% in 1994 (a mix of fixedand floating-rate
debt). Interest expense of $337,000 was allocated to discontinued energy
operations in 1994.
The effective tax rate for continuing operations, excluding special
items, decreased to 37.1% for the first nine months of 1995, compared with 38.5%
for the same period a year earlier. The decrease was due mainly to a lower
effective state income tax rate.
Segment Results
The following tables present Tredegar's net sales and operating profit
by segment for the third quarter and nine months ended September 30, 1995 and
1994.
Net Sales by Segment
(In Thousands)
(Unaudited)
Third Quarter Nine Months
Ended Sept. 30 Ended Sept. 30
--------------- ------------------
1995 1994 1995 1994
-------- -------- -------- --------
Plastics ........ $ 83,114 $ 72,075 $250,648 $208,176
Metal Products .. 62,329 59,278 194,689 166,166
Technology ...... 512 838 1,383 1,756
-------- -------- -------- --------
Total net sales $145,955 $132,191 $446,720 $376,098
======== ======== ======== ========
Operating Profit by Segment
(In Thousands)
(Unaudited)
Third Quarter Nine Months
Ended Sept. 30 Ended Sept. 30
--------------- -----------------
1995 1994 1995 1994
-------- -------- -------- ---------
Plastics:
Ongoing operations $ 9,701 $ 8,570 $ 28,384 $ 25,336
Unusual items (a) -- (6,973) 1,750 (6,973)
-------- -------- -------- --------
9,701 1,597 30,134 18,363
-------- -------- -------- --------
Metal Products ..... 4,058 3,100 12,884 7,907
-------- -------- -------- --------
Technology:
Ongoing operations (1,059) (1,779) (4,097) (6,604)
Unusual items (b) 728 -- (1,672) (9,521)
-------- -------- -------- --------
(331) (1,779) (5,769) (16,125)
-------- -------- -------- --------
Total operating
profit ........... 13,428 2,918 37,249 10,145
Interest expense ... 951 939 2,528 3,282
Corporate
expenses, net .... 1,949 2,323 7,364 7,489
-------- -------- -------- --------
Income (loss) before
income taxes ..... 10,528 (344) 27,357 (626)
Income taxes ....... 3,902 (66) 10,212 1,671
-------- -------- -------- --------
Income (loss)
from continuing
operations (c) ... 6,626 (278) 17,145 (2,297)
Income from
discontinued
energy
operations (d) ... -- 26,753 -- 37,218
-------- -------- -------- --------
Net income ......... $ 6,626 $ 26,475 $ 17,145 $ 34,921
======== ======== ======== ========
Notes to Segment Tables:
(a) Plastics segment unusual items in 1995 consist of a first-quarter
recovery related to a final judgment in connection with a product
liability lawsuit. Plastics segment unusual items in 1994 consist of
the write-off in the third quarter of certain Molded Products goodwill
($4.9 million) and costs related to the closing of a Molded Products
plant ($2.1 million).
(b) Technology segment unusual items consist of a charge for the
restructuring of APPX in the first quarter of 1995, a gain on the sale
of Regal Cinema shares in the third quarter of 1995 and a write-off of
goodwill and intangibles in APPX in the first quarter of 1994.
(c) Income from continuing operations, excluding the net effects of unusual
items, was $6.2 million, $4.1 million, $17.2 million and $9.8 million
for the third quarter ended September 30, 1995 and 1994 and the nine
months ended September 30, 1995 and 1994, respectively. See also Note 6
of the Notes to the Consolidated Interim Financial Statements on page
8.
(d) In August 1994, Tredegar divested its Elk Horn Coal subsidiary and
recognized an after-tax gain of $25.7 million. In the first quarter of
1994, Tredegar recognized certain tax benefits associated with the Elk
Horn divestiture of $3.3 million. In February 1994, Tredegar sold its
remaining oil and gas properties and recognized an after-tax gain of
$3.9 million.
Tredegar Film Products sales increased for the quarter and year-to-date
due primarily to higher average selling prices resulting from higher raw
material costs. Higher volume from U.S. disposables contributed to the
improvement in net sales during the third quarter while volume from foreign
operations increased during both periods. Operating profit improved for the
third quarter due primarily to higher domestic backsheet film volume and higher
volume from European operations, but was flat for the nine months due primarily
to lower margins in specialty films.
Third-quarter and year-to-date operating profits in Molded Products
increased due to higher sales volume, flat conversion costs and lower selling,
general and administrative expenses, partially offset by start-up costs at the
new Graham, North Carolina, facility.
At Fiberlux, sales were down slightly for the quarter but increased for
the nine months. Operating profit declined for both the quarter and year-to-date
periods.
Metal Products sales increased 5% for the third quarter and 17% for the
nine months due primarily to higher prices in Aluminum Extrusions, reflecting
higher aluminum costs. Volume declined in Aluminum Extrusions for both the
quarter and nine months while operating profit increased for the periods due to
ongoing cost and quality improvements. Economic conditions in key construction
markets and declining aluminum prices continue to put pressure on selling prices
and margins. Sales and operating profit improved at Brudi for the quarter and
nine months due primarily to higher sales and lower bad debt expense.
Ongoing Technology segment results for the third quarter and nine
months showed lower losses due to the restructuring of APPX in the first quarter
of 1995, partially offset by higher research and development expenses at
Molecumetics. The year-to-date results were also adversely affected by a
$329,000 medical technology investment writedown.
Liquidity and Capital Resources
Tredegar's total assets at September 30, 1995, were $319.4 million, an
increase of $1 million over December 31, 1994. The increase is due primarily to
the acquisition of a films business in Argentina and the deferral of costs for
razing the films plant in Fremont, California, in anticipation of the sale of
the land. Inventories declined from strong domestic demand for backsheet and
permeable films. Depreciation exceeded capital expenditures by $1.7 million for
the nine months ended September 30, 1995.
Total liabilities declined slightly while the ratio of current assets
to current liabilities was 1.8 to 1 at September 30, 1995, compared to 1.9 to 1
at December 31, 1994. Debt decreased from $38 million at December 31, 1994, to
$35 million at September 30, 1995, and consisted of a $35 million, 7.2% note
maturing in June 2003 (annual principal payments of $5 million will begin in
1997). On September 7, 1995, Tredegar replaced its two revolving credit
facilities dated August 18 and 19, 1994, with one new, 5-year facility that
permits borrowings of up to $275 million (no amounts borrowed at September 30,
1995 - see Note 3 of the Notes to the Consolidated Interim Financial Statements
on page 6). Net debt (debt less cash and cash equivalents) as a percentage of
net capitalization was 12% at September 30, 1995, compared with 14.4% at
December 31, 1994.
On May 15, 1995, Tredegar completed a "Dutch Auction" tender offer,
repurchasing 642,797 shares of its common stock for approximately $15 million or
$23 per share. Between October 30 and November 7, 1995, Tredegar purchased an
additional 128,000 shares in broker transactions at prices ranging from $28 to
$29.625 per share. Under a standing authorization from its board of directors,
Tredegar may purchase an additional 1.2 million shares in the open market or in
privately negotiated transactions at prices management deems appropriate.
Net cash provided by continuing operating activities in excess of
capital expenditures and dividends increased to $20.8 million in 1995 from $17
million in 1994 due primarily to improved operating results. This excess cash
combined with the $9 million cash and cash equivalents balance at December 31,
1994, and cash from property disposals and other sources ($3.2 million), was
used to fund the films acquisition in Argentina ($3.6 million), repay amounts
borrowed to fund the Dutch Auction tender offer ($15 million), and repay other
borrowings ($3 million), leaving $11.4 million of cash and cash equivalents at
September 30, 1995.
PART II - OTHER INFORMATION
Item 6. Exhibits and Reports on Form 8-K.
(a) Exhibit No.
3 Amended By-laws
4.1 Revolving Credit Facility Agreement dated as of
September 7, 1995 among Tredegar Industries,
Inc., the banks named therein, Chemical Bank as
Administrative Agent and NationsBank N.A. and LTCB
Trust Company as Co-Agents
4.2 Consent and Agreement dated September 26, 1995,
between Tredegar Industries, Inc. and Metropolitan
Life Insurance Company
11 Statement re computation of earnings per share
27 Financial Data Schedule
(b) Reports on Form 8-K. No reports on Form 8-K have been
filed for the quarter ended September 30, 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.
Tredegar Industries, Inc.
(Registrant)
Date: November 9, 1995 /s/ N. A. Scher
---------------- ------------------------
Norman A. Scher
Executive Vice President,
Treasurer and Chief Financial
Officer (Principal Financial
Officer)
Date: November 9, 1995 /s/ D. Andrew Edwards
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D. Andrew Edwards
Corporate Controller
(Principal Accounting Officer)