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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, 1995 Commission file number 17088
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AMERICAN BUSINESS PRODUCTS, INC
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(Exact name of registrant as specified in its charter)
Georgia 58-1030529
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(State of Incorporation) (IRS Employer
Identification No)
2100 RiverEdge Parkway, Suite 1200, Atlanta, Georgia 30328
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(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code (404) 953-8300
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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
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Common Stock, $2.00 par value 10,664,131 shares
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(Class) (Outstanding at March 31, 1995)
Page 1 of 8
Exhibit Index on Page 6
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PART I
FINANCIAL INFORMATION
Item 1. Financial Statements
The Consolidated Balance Sheets of the Company as of March 31, 1995, and
December 31, 1994 and the Consolidated Income Statements of the Company for the
three months ended March 31, 1995 and 1994, are incorporated herein by
reference to the Company's Quarterly Report to Shareholders for the three
months ended March 31, 1995, attached hereto as Exhibit 19. Set forth below
are the Condensed Consolidated Statements of Cash Flows of the Company for the
three months ended March 31, 1995 and 1994, along with certain notes to the
financial statements.
AMERICAN BUSINESS PRODUCTS, INC.
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
FOR THE THREE MONTHS ENDED MARCH 31, 1995, AND 1994 (UNAUDITED)
(Dollars in Thousands)
1995 1994
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CASH FLOWS FROM OPERATING ACTIVITIES
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Income from operations $ 5,949 $ 3,661
Adjustments to reconcile net income to net cash
provided by operating activities -5,447 -5,284
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Net cash (used) provided by operating activities 502 -1,623
CASH FLOWS USED IN INVESTING ACTIVITIES
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Decrease in cash value of life insurance 1,274 1,602
Additions to plant and equipment -4,134 -2,827
Other 3 2
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Net cash used in investing activities -2,857 -1,223
CASH FLOWS USED BY FINANCING ACTIVITIES
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(Decrease) in long-term debt -422
Dividends paid -2,246 -2,137
Other 5 -369
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Net cash (used) provided by financing activities -2,663 -2,506
Net (decrease) in cash and cash equivalents -5,018 -5,352
Cash and cash equivalents at beginning of year 25,997 30,151
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Cash and cash equivalents at end of period $20,979 $24,799
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AMERICAN BUSINESS PRODUCTS, INC.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
1. Unaudited Consolidated Financial Statements
The consolidated financial statements have been prepared in accordance
with generally accepted accounting principles which in certain
instances requires the use of management's estimates.
The information contained in these 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. All such adjustments are of a normal recurring nature.
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, 1994.
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. Nature of Operations
The Company manufactures and markets envelope products, business
forms, labels and other supplies for business and industry;
manufactures and distributes hardcover and softcover books for the
publishing industry; and markets extrusion coating and laminating of
papers, films, and nonwoven fabrics for use in medical, industrial and
consumer packaging. The markets for these products are located
principally throughout the continental United States.
4. Net Income Per Share
Net income per common share is based upon the weighted average number
of shares outstanding during each period: 10,662,816 and 10,682,195
for the three month periods ended March 31, 1995, and March 31, 1994,
respectively.
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5. Inventories ($000's)
Inventories consisted of the following at the dates indicated:
March 31, 1995 December 31, 1994
Products finished or in process $27,444 $25,685
Raw materials 26,930 25,560
Supplies 710 684
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Total $55,084 $51,929
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Item 2. Management's Discussion and Analysis of Financial Condition
and Results of Operations
1. Liquidity and Capital Resources
The current ratio increased to 2.6 to 1 at March 31, 1995, from 2.4 to
1 at December 31, 1994.
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 1995 increased by 11.8% over sales
for the same period of 1994. Most of the increase resulted from more
favorable pricing.
Cost of goods sold as percentage of sales decreased slightly to 70.1%
in 1995 from 70.2% in 1994. Selling and administrative expenses
decreased to 22.2% of sales in 1995 compared to 23.3% in 1994 as a
result of the Company's continuing efforts to control expenses.
Interest expense decreased to 1.4% of sales in 1995 from 1.7% in 1994
as a result of reduced debt levels.
The effective income tax rate for the first quarter of 1995 increased
to 40.7% compared to 39.3% in 1994 as a result of several factors
including decreased levels of non-taxable income and increased
provisions for state income taxes.
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PART II
OTHER INFORMATION
Item 6. Exhibits and Reports on Form 8-K.
a. Exhibits attached hereto:
Number Description
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10.1 Executive Compensation Plans and Arrangements:
(a) Second Amendment to 1991 Stock Option Plan
19 Quarterly Report to Shareholders
for the three months ended March 31, 1995.
27 Financial Data Schedules for First Quarter 1995 10-Q
(for SEC use only)
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.
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(Registrant)
DATE: May 9, 1995 /S/ W. C. Downer
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W. C. Downer, Vice President-Finance
(Chief Financial and Accounting
Officer and Duly Authorized Officer)
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AMERICAN BUSINESS PRODUCTS, INC.
INDEX OF EXHIBITS
Number Description
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10.1 Executive Compensation Plans and
Arrangements
(a) Second Amendment to
1991 Stock Option
19 Quarterly Report to Shareholders
for the three months ended March 31, 1995
27 Financial Data Schedules for First Quarter
1995 10-Q (for SEC use only)
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