1
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, DC 20549
FORM 10-Q
QUARTERLY REPORT UNDER SECTION 13 OR 15(d)
OF THE SECURITIES EXCHANGE ACT OF 1934
For Quarter Ended March 31, 1994 Commission file number 1-7088
--------------------- ------
AMERICAN BUSINESS PRODUCTS, INC.
- - --------------------------------------------------------------------------------
(Exact name of registrant as specified in its charter)
Georgia 58-1030529
- - --------------------------------------------------------------------------------
(State of Incorporation) (IRS Employer
Identification No)
2100 RiverEdge Parkway, Suite 1200, Atlanta, Georgia 30328
- - --------------------------------------------------------------------------------
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code (404) 953-8300
----------------------------
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 No X
--- ---
Common Stock, $2.00 par value 10,683,102 shares
----------------------------- ----------------------------------
(Class) (Outstanding at March 31, 1994)
Page 1 of 8
Exhibit Index on Page 6
2
PART I
FINANCIAL INFORMATION
---------------------
Item 1. Financial Statements
- - ------- --------------------
The Consolidated Balance Sheets of the Company as of March 31, 1994, and
December 31, 1993 and the Consolidated Income Statements of the Company for the
three months ended March 31, 1994, and 1993, are incorporated herein by
reference to the Company's Quarterly Report to Shareholders for the three
months ended March 31, 1994, attached hereto as Exhibit 19. Set forth below
are the Consolidated Statements of Cash Flows of the Company for the three
months ended March 31, 1994, and 1993, along with certain notes to the
financial statements.
AMERICAN BUSINESS PRODUCTS, INC.
CONSOLIDATED STATEMENTS OF CASH FLOWS
FOR THE THREE MONTHS ENDED MARCH 31, 1994, AND 1993 (UNAUDITED)
---------------------------------------------------------------
1994 1993
---- ----
CASH FLOWS FROM OPERATING ACTIVITIES
Income from operations $ 3,661,000 $ 4,670,000
Adjustments to reconcile net income to net cash
provided by operating activities -5,284,000 -3,928,000
----------- -----------
Net cash (used) provided by operating activities -1,623,000 742,000
CASH FLOWS USED IN INVESTING ACTIVITIES
(Increase) in annuity contracts -7,467,000
Decrease in cash value of life insurance 1,602,000
Additions to plant and equipment -2,827,000 -3,973,000
Other 2,000 104,000
----------- -----------
Net cash used in investing activities -1,223,000 -11,336,000
CASH FLOWS USED BY FINANCING ACTIVITIES
Dividends paid -2,137,000 -2,004,000
Other -369,000 -297,000
----------- -----------
Net cash used by financing activities -2,506,000 -2,301,000
Net (decrease) in cash and cash equivalents -5,352,000 -12,895,000
Cash and cash equivalents at beginning year 30,151,000 30,024,000
----------- -----------
Cash and cash equivalents at end of period $24,799,000 $17,129,000
=========== ===========
2
3
AMERICAN BUSINESS PRODUCTS, INC.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
----------------------------------------------------
1. Unaudited Condensed Consolidated Financial Statements
The information contained in these condensed consolidated financial
statements and notes is unaudited, but in the opinion of management,
all adjustments necessary for a fair presentation of such information
have been made. Certain information and footnote disclosures normally
included in financial statements prepared in accordance with generally
accepted accounting principles have been omitted pursuant to
applicable rules and regulations of the Securities and Exchange
Commission. The condensed consolidated financial statements included
herein should be read in conjunction with the audited financial
statements and notes thereto contained in the Company's Annual Report
on Form 10-K for the year ended December 31, 1993.
2. Consolidation Policy
The condensed consolidated financial statements include the accounts
of the Company and its subsidiaries, all of which are wholly-owned.
Intercompany balances and transactions have been eliminated.
3. Net Income Per Share
Net income per common share is based upon the weighted average number
of shares outstanding during each period: 10,682,195 and 10,686,076
for the three month periods ended March 3l, 1994, and March 31, 1993,
respectively.
4. Inventories
Inventories consisted of the following at the dates indicated:
March 31, 1994 December 31, 1993
Products finished or in process $24,449,000 $24,510,000
Raw materials 23,396,000 20,771,000
Supplies 626,000 406,000
----------- -----------
Total $48,471,000 $45,687,000
=========== ===========
5. The Company adopted Statement of Financial Accounting Standards No.
112, "Employers' Accounting for Post-employment Benefits", on January
1, 1994. The cumulative affect of this change on all periods
decreased net income $605,000 or $.06 per share.
3
4
Item 2. Management's Discussion and Analysis of Financial Condition
- - ------ -----------------------------------------------------------
and Results of Operations
-------------------------
1. Liquidity and Capital Resources
The current ratio increased to 2.8 to 1 at March 31, 1994, from 2.6 to
1 at December 31, 1993.
The Company does not anticipate incurring significant additional debt
and internal cash flows should be sufficient to generate funds for
normal operations.
2. Results of Operations
---------------------
Sales during the first quarter of 1994 increased by 19.5% over sales
for the same period of 1993. Without sales generated by operations
acquired in late 1993, the Company's revenues would have increased by
approximately 3% over the same period in 1993, resulting principally
from an increase in unit sales.
Cost of goods sold as percentage of sales increased to 70.2% in 1994
from 69.4% in 1993 principally as a result of increased price competition
in the Company's major markets. Selling and administrative expenses
decreased to 23.3% of sales in 1994 compared to 23.9% in 1993 as a result
of the Company's continuing efforts to control expenses. Interest expense
increased to 1.7% of sales in 1994 from 1.1% in 1993 as a result of
incurring additional debt to finance two acquisitions in late 1993.
The effective income tax rate for the first quarter of 1994 increased to
39.3% compared to 34.3% in 1993 as a result of several factors including an
increase in the federal statutory rate, decreased levels of non-taxable
income and increased provisions for state income taxes.
4
5
PART II
OTHER INFORMATION
Item 6. Exhibits and Reports on Form 8-K.
- - ------- ---------------------------------
a. Exhibits attached hereto:
Number Description
- - ------ -----------
19 Quarterly Report to Shareholders
for the three months ended March 31, 1994.
b. Reports on Form 8-K.
None
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.
AMERICAN BUSINESS PRODUCTS, INC.
--------------------------------
(Registrant)
DATE: May 13, 1994 /S/ W. C. Downer
-------------------------------------
W. C. Downer, Vice President-Finance
(Chief Financial and Accounting
Officer and Duly Authorized Officer)
5
6
AMERICAN BUSINESS PRODUCTS, INC.
INDEX OF EXHIBITS
Number Description
- - ------ -----------
19 Quarterly Report to Shareholders
for the three months ended March 31, 1994
6