1
Exhibit 13.2
STATEMENTS OF INCOME (Unaudited) Boise Cascade Office Products Corporation
================================================================================
THREE MONTHS ENDED YEAR ENDED
DECEMBER 31 DECEMBER 31
---------------------- -----------------
1997 1996 1997 1996
===========================================================================================
(expressed in thousands,
except share information)
Net sales ..................................... $718,514 $556,680 $2,596,732 $1,985,564
Cost of sales ................................. 533,391 412,220 1,941,702 1,467,368
-------- -------- ---------- ----------
Gross profit .................................. 185,123 144,460 655,030 518,196
-------- -------- ---------- ----------
Selling and warehouse operating expense ....... 131,888 105,175 483,241 375,700
Corporate general and administrative expense .. 11,721 10,686 41,606 34,409
Goodwill amortization ......................... 3,247 1,972 10,933 6,787
-------- -------- ---------- ----------
146,856 117,833 535,780 416,896
-------- -------- ---------- ----------
Income from operations ........................ 38,267 26,627 119,250 101,300
Interest expense .............................. 6,270 2,476 20,165 7,766
Other income, net ............................. 309 378 699 278
-------- -------- ---------- ----------
Income before income taxes .................... 32,306 24,529 99,784 93,812
Income tax expense ............................ 14,573 10,057 42,898 38,463
-------- -------- ---------- ----------
Net income .................................... $17,733 $14,472 $56,886 $55,349
======== ======== ========== ==========
Earnings per share--basic and diluted ......... $.27 $.23 $.89 $.88
======== ======== ========== ==========
2
BALANCE SHEETS Boise Cascade Office Products Corporation
===========================================================================================
(Unaudited)
DECEMBER 31
---------------------------
ASSETS 1997 1996
- -------------------------------------------------------------------------------------------
(expressed in thousands,
except share information)
CURRENT
Cash and cash equivalents .................................. $28,755 $12,762
Receivables, less allowances of $7,591 and $3,887 .......... 357,321 285,337
Inventories ................................................ 197,990 171,748
Deferred income tax benefits ............................... 14,223 13,963
Other ...................................................... 23,808 15,378
------------- -------------
622,097 499,188
------------- -------------
PROPERTY
Land ....................................................... 28,913 13,488
Buildings and improvements ................................. 127,430 72,917
Furniture and equipment .................................... 175,778 137,137
Accumulated depreciation ................................... (129,951) (90,980)
------------- -------------
202,170 132,562
------------- -------------
GOODWILL, NET OF AMORTIZATION OF $24,019 AND $13,138 ........ 438,830 261,706
OTHER ASSETS ................................................ 28,391 11,906
------------- -------------
TOTAL ASSETS ................................................ $1,291,488 $905,362
============= =============
===========================================================================================
LIABILITIES AND SHAREHOLDERS' EQUITY
===========================================================================================
CURRENT
Notes payable .............................................. $23,300 $36,700
Current portion of long-term debt .......................... 2,917 180
------------- -------------
Accounts payable
Trade and other ........................................... 238,773 185,370
Boise Cascade Corporation ................................. 42,097 21,926
------------- -------------
280,870 207,296
------------- -------------
Accrued liabilities
Compensation and benefits ................................. 30,717 31,120
Income taxes payable ...................................... 3,370 7,100
Taxes, other than income .................................. 18,718 8,351
Other ..................................................... 30,848 39,800
------------- -------------
83,653 86,371
------------- -------------
390,740 330,547
------------- -------------
OTHER
Deferred income taxes ...................................... -- 4,470
Long-term debt, less current portion ....................... 357,595 140,024
Other ...................................................... 37,518 25,536
------------- -------------
395,113 170,030
------------- -------------
SHAREHOLDERS' EQUITY
Common stock, $.01 par value, 200,000,000 shares authorized;
65,588,258 and 62,750,318 shares issued and outstanding ... 656 628
Additional paid-in capital ................................. 356,599 304,134
Retained earnings .......................................... 148,380 100,023
------------- -------------
Total shareholders' equity ................................ 505,635 404,785
------------- -------------
TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY .................. $1,291,488 $905,362
============= =============
3
STATEMENTS OF CASH FLOWS (Unaudited) Boise Cascade Office Products Corporation
================================================================================
YEAR ENDED DECEMBER 31
--------------------------
1997 1996
- --------------------------------------------------------------------------------
(expressed in thousands)
CASH PROVIDED BY (USED FOR) OPERATIONS
Net income ........................................ $56,886 $55,349
Items in income not using (providing) cash
Depreciation and amortization .................... 41,088 27,198
Deferred income taxes ............................ (167) (1,635)
Receivables ....................................... 2,230 (39,036)
Inventories ....................................... 555 (25,111)
Accounts payable and accrued liabilities .......... 35,912 40,688
Current and deferred income taxes ................. (9,039) (1,419)
Other, net ........................................ (7,558) 4,312
------------ ------------
Cash provided by operations ...................... 119,907 60,346
------------ ------------
CASH USED FOR INVESTMENT
Expenditures for property and equipment ........... (66,876) (42,711)
Acquisitions ...................................... (254,025) (180,139)
Other, net ........................................ (29,047) (16,080)
------------ ------------
Cash used for investment ......................... (349,948) (238,930)
------------ ------------
CASH PROVIDED BY (USED FOR) FINANCING
Additions to long-term debt ....................... 211,988 140,000
Notes payable ..................................... (13,400) 36,700
Sale of stock ..................................... 48,463 --
Other, net ........................................ (1,017) 564
------------ ------------
Cash provided by financing ....................... 246,034 177,264
------------ ------------
INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS .. 15,993 (1,320)
BALANCE AT BEGINNING OF THE PERIOD ................ 12,762 14,082
------------ ------------
BALANCE AT DECEMBER 31 ............................ $28,755 $12,762
============ ============
4
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" or "we")
headquartered in Itasca, Illinois, is a distributor of products for the office
through its contract stationer and direct marketing channels. At December 31,
1997, Boise Cascade Corporation owned approximately 81% of our outstanding
common stock. These financial statements are unaudited statements which do not
include all Notes to Financial Statements and should be read in conjunction
with our 1997 Annual Report. The 1997 Annual Report will be available in March
1998.
EARNINGS PER SHARE. Unaudited basic earnings per share for the three and 12
months ended December 31, 1997 and 1996, were computed by dividing net income
by the weighted average number of shares of common stock outstanding during the
periods. Unaudited diluted earnings per share for the three and 12 months
ended December 31, 1997 and 1996, include the weighted average impact of stock
options assumed exercised using the treasury method. In 1997, we adopted
Statement of Financial Accounting Standards No. 128, "Earnings Per Share" (SFAS
128), effective December 15, 1997. The only impact of the adoption was to
reduce earnings per share for the 12 months ended December 31, 1996, by $.01.
COMMON STOCK. On September 25, 1997, we issued 2,250,000 shares of common
stock at $21.55 per share to Boise Cascade Corporation.
ACQUISITIONS AND JOINT VENTURES. On January 31, 1997, we acquired the contract
stationer business of The Office Stop, based in Butte, Montana. On February
28, 1997, we acquired the contract stationer business of Florida Ribbon and
Carbon, based in Jacksonville, Florida. On April 17, 1997, we acquired the
contract stationer business of Winterbulk Business Supplies, Ltd., based in
Bolton, England. On April 30, 1997, we acquired the computer consumables
business of TDI, based in Raleigh-Durham, North Carolina. On May 30, 1997, we
acquired the computer consumables business of Carlyle Computer Products Ltd.,
based in Winnipeg, Manitoba, Canada. On May 31, we acquired the promotional
products business of OstermanAPI Inc., based in Maumee, Ohio. On July 7, 1997,
we acquired the direct marketing business of Jean-Paul Guisset, S.A., based in
Paris, France. On November 28, 1997, we acquired the contract stationer
business of Society Europa, based in Paris, France. The combined annual sales
of these acquisitions at the time of announcement were approximately
$340,000,000. The results of operations of the acquired businesses are
included in our operations subsequent to the dates of acquisition. In
conjunction with the acquisition of Osterman, we formed a majority-owned
subsidiary, Boise Marketing Services, Inc., ("BMSI"). Our previously acquired
promotional products company, OWNCO, also became part of BMSI. In January
1997, we also completed a joint venture with Otto Versand to direct market
office products in Europe, initially in Germany.
INCOME TAXES. The effective annual tax provision rate for the year ended
December 31, 1997, was 43.0%, compared with a tax provision rate of 41.0% for
the same period in the prior year. The increase is primarily due to increased
nondeductible goodwill and foreign income taxed at a higher rate.