1
Exhibit 13.2
EXHIBIT 13.2
2
STATEMENTS OF INCOME (Unaudited) Boise Cascade Office Products Corporation
===========================================================================
Three Months Ended Year Ended
December 31 December 31
------------------ -----------
1996 1995 1996 1995
(expressed in thousands, except per-share data)
Net sales ....................................................... $ 556,680 $ 374,911 $ 1,985,564 $ 1,315,953
Cost of sales ................................................... 412,220 274,791 1,467,368 980,564
------------ ------------ ------------ ------------
Gross profit .................................................... 144,460 100,120 518,196 335,389
------------ ------------ ------------ ------------
Selling and warehouse operating expense ......................... 105,175 67,823 375,700 238,885
Corporate general and administrative expense .................... 10,686 7,409 34,409 24,750
Goodwill amortization ........................................... 1,972 810 6,787 2,287
------------ ------------ ------------ ------------
117,833 76,042 416,896 265,922
------------ ------------ ------------ ------------
Income from operations .......................................... 26,627 24,078 101,300 69,467
Interest expense ................................................ 2,476 217 7,766 685
Other income, net ............................................... 378 537 278 2,588
------------ ------------ ------------ ------------
Income before income taxes ...................................... 24,529 24,398 93,812 71,370
Income tax expense .............................................. 10,057 9,637 38,463 28,191
------------ ------------ ------------ ------------
Net income ...................................................... $ 14,472 $ 14,761 $ 55,349 $ 43,179
============ ============ ============ ============
Earnings per common share and pro forma earnings per
common share (based upon 62,658,813 and 62,444,170 actual
average common shares outstanding for the three months and year
ended December 31, 1996; 62,286,202 actual average common
shares outstanding for the three months ended December 31, 1995,
and 61,660,100 pro forma average common shares outstanding for
the year ended December 31, 1995 ............................... $ .23 $ .24 $ .89 $ .70
============ ============ ============ ============
9
3
BALANCE SHEETS Boise Cascade Office Products Corporation
================================================================================
(Unaudited)
December 31
-----------------------
Assets 1996 1995
- -------------------------------------------------------------------------------------------
(expressed in thousands,
except share information)
Current
Cash and short-term investments ............................ $ 12,762 $ 14,082
Receivables, less allowances of $3,887 and $2,889 .......... 285,337 189,260
Inventories ................................................ 171,748 112,538
Deferred income tax benefits ............................... 13,963 7,588
Other ...................................................... 15,378 12,705
-------- --------
499,188 336,173
-------- --------
Property
Land ....................................................... 13,488 12,411
Buildings and improvements ................................. 72,917 66,217
Furniture and equipment .................................... 137,137 102,074
Accumulated depreciation ................................... (90,980) (91,941)
-------- --------
132,562 88,761
-------- --------
Goodwill, net of amortization of $13,138 and $5,650 ......... 261,706 114,919
Other assets ................................................ 11,906 4,271
-------- --------
Total assets ................................................ $905,362 $544,124
======== ========
- -------------------------------------------------------------------------------------------
Liabilities and Shareholders' Equity
- -------------------------------------------------------------------------------------------
Current
Notes payable .............................................. $ 36,700 $ --
Current portion of long-term debt .......................... 180 214
-------- --------
Accounts payable
Trade and other ........................................... 185,370 116,363
Boise Cascade Corporation ................................. 21,926 23,906
-------- --------
207,296 140,269
-------- --------
Accrued liabilities
Compensation and benefits ................................. 31,120 17,959
Income taxes payable ...................................... 7,100 4,712
Taxes, other than income .................................. 8,351 6,813
Other ..................................................... 39,800 20,382
-------- --------
86,371 49,866
-------- --------
330,547 190,349
-------- --------
Other
Deferred income taxes ...................................... 4,470 2,534
Long-term debt, less current portion ....................... 140,024 198
Other ...................................................... 25,536 11,626
-------- --------
170,030 14,358
-------- --------
Shareholders' equity
Common stock, $.01 par value, 200,000,000 shares authorized;
62,750,318 and 62,292,776 shares issued and outstanding ... 628 623
Additional paid-in capital ................................. 304,134 295,615
Retained earnings .......................................... 100,023 43,179
-------- --------
Total shareholders' equity ................................ 404,785 339,417
-------- --------
Total liabilities and shareholders' equity .................. $905,362 $544,124
======== ========
10
4
STATEMENTS OF CASH FLOWS (Unaudited) Boise Cascade Office Products Corporation
================================================================================
Year Ended December 31
--------------------------
1996 1995
- --------------------------------------------------------------------------------------
(expressed in thousands)
Cash provided by (used for) operations
Net income .............................................. $ 55,349 $ 43,179
Items in income not using (providing) cash
Depreciation and amortization ......................... 27,198 15,355
Deferred income tax benefit ........................... (1,635) (1,914)
Receivables ............................................. (39,036) (34,006)
Inventories ............................................. (25,111) (14,529)
Other current assets .................................... 4,312 (5,405)
Accounts payable and accrued liabilities ................ 40,688 45,579
Current and deferred income taxes ....................... (1,419) 1,463
--------- ---------
Cash provided by operations ........................... 60,346 49,722
--------- ---------
Cash provided by (used for) investment
Expenditures for property and equipment ................. (42,711) (22,246)
Acquisitions ............................................ (180,139) (61,638)
Other, net .............................................. (16,080) 4,309
--------- ---------
Cash used for investment .............................. (238,930) (79,575)
--------- ---------
Cash provided by (used for) financing
Additions to long-term debt ............................. 140,000 --
Notes payable ........................................... 36,700 --
Sale of stock ........................................... -- 123,076
Net equity transactions with Boise Cascade Corporation .. -- (78,447)
Other, net .............................................. 564 (717)
--------- ---------
Cash provided by financing ............................ 177,264 43,912
--------- ---------
Increase (decrease) in cash ............................. (1,320) 14,059
Balance at beginning of the period ...................... 14,082 23
--------- ---------
Balance at December 31 .................................. $ 12,762 $ 14,082
========= =========
11
5
NOTES TO QUARTERLY FINANCIAL STATEMENTS Boise Cascade Office Products
Corporation
================================================================================
Organization and Basis of Presentation. Boise Cascade Office Products
Corporation (together with its subsidiaries, "the Company") was operated as the
Boise Cascade Office Products Distribution Division ("the Division") of Boise
Cascade Corporation ("BCC") prior to April 1, 1995. Effective on that date,
pursuant to an Asset Transfer and Subscription Agreement between the Company
and BCC, BCC transferred to the Company substantially all of the assets and
liabilities associated with the Division, other than $100,000,000 of accounts
receivable, in exchange for common stock of the Company. After the transfer,
BCC holds a total of 50,750,000 shares. The accompanying historical income
statements include the consolidated results of operations of the Division.
These statements are unaudited statements which do not include all Notes to
Financial Statements and should be read in conjunction with the Company's 1996
Annual Report. The 1996 Annual Report will be available in March 1997.
Public Offerings. On April 13, 1995, the Company completed the sale of
10,637,500 shares of common stock at a price of $12.50 per share in an initial
public offering in the United States and in a concurrent international offering
("the Offerings"). After the Offerings, BCC owned 82.7% of the Company's
outstanding common stock. The net proceeds to the Company were approximately
$123,076,000. A total of $100,000,000 of such net proceeds was used by the
Company to replace the working capital retained by BCC in the transfer of
assets. Of the remaining proceeds, $21,217,000 was retained by the Company and
was available for general corporate purposes and $1,859,000 was paid as a
dividend to BCC.
Earnings Per Common Share. The unaudited actual earnings per common share of
$.23 and $.89 for the three months and year ended December 31, 1996, and $.24
for the three months ended December 31, 1995, are based upon the actual average
number of common shares outstanding, including common shares issued to effect
acquisitions made by the Company and shares issued as a result of stock options
exercised. The unaudited pro forma earnings per common share of $.70 for the
year ended December 31, 1995, are presented assuming the 50,750,000 common
shares issued to BCC in the organization of the Company and the 10,637,500
common shares issued in the Offerings were issued on January 1, 1995.
Stock Split. The Company effected a two-for-one split of the Company's common
stock in the form of a 100% stock dividend on May 20, 1996, to
shareholders of record at the close of business on May 6, 1996. All references
in these financial statements to numbers of shares of common stock of the
Company and to per share amounts and common stock prices have been adjusted to
reflect the stock split.
Other. On January 31, 1996, the Company acquired the contract stationer
business of Sierra Vista Office Products, Inc., based in Albuquerque, New
Mexico. On February 5, 1996, the Company acquired Grand & Toy Limited, a
Canadian office products distributor. On February 9, 1996, the Company
acquired the contract stationer businesses of Loring, Short & Harmon, Inc.,
based in Portland, Maine, and McAuliffe's based in Burlington, Vermont. On
March 29, 1996, the Company acquired the contract stationer and office
furniture business of Office Essentials based in Milwaukee, Wisconsin. On
April 26, 1996, the Company acquired the contract stationer business of
Crawford's Office Supplies, based in Seattle, Washington. On May 31, 1996, the
Company acquired the contract stationer business of Zemlick Brothers, Inc.,
based in Kalamazoo, Michigan. On July 1, 1996, the Company acquired the
contract stationer business of Pedersen Contact, based in Melbourne, Australia.
On July 31, 1996, the Company acquired the contract stationer business of Mike
Bryan Office Products, Inc., based in Oklahoma City, Oklahoma. On October 31,
1996, the Company acquired the contract stationer businesses of Copytek, based
in Burlington, Vermont; Independent EDP, based in Melbourne, Australia; Pacific
Data Products based in Spokane, Washington and Smith's Office Products based
in Nashville, Tennessee. On November 1, 1996, the Company acquired Oregon
Wholesale Novelty Company, Inc., an advertising specialties company based in
Portland, Oregon. Additionally, on November 1, 1996, the Company acquired the
contract stationer businesses of Bixby Office Supply, based in Grand Rapids,
Michigan; J.B. Allisons based in Fredericton, Canada; and Produit De Bureau
Parallele based in Montreal, Canada. On November 30, 1996, the Company
acquired the contract stationer business of Brissons based in North Bay,
Canada. On December 6, 1996, the Company acquired the contract stationer
business of Thompson's Office Products based in Kalgoorlie, Australia. The
combined annual sales of these acquisitions at the time of announcement were
approximately $460,000,000. The results of operations of the acquired
businesses are included in the Company's operations subsequent to the dates of
acquisition. The Company also started up office products distribution centers
in Las Vegas, Nevada, and Miami, Florida, during the second quarter of 1996.
The effective annual tax provision rate for the year ended December 31, 1996
was 41.0% compared with a tax provision rate of 39.5% for the same period in
the prior year. The increase is primarily due to the amortization of goodwill
arising from certain acquisitions that is not deductible for tax purposes.