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EXHIBIT 19
AMERICAN BUSINESS PRODUCTS, INC.
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(LOGO)
TO OUR SHAREHOLDERS:
American Business Products, Inc. kept up its record-breaking growth in the
second quarter as sales increased by more than 12% and net income gained almost
35%.
For the quarter, sales advanced to a record $156.4 million, up 12.2% over the
second quarter of 1994. Net income for the quarter rose 34.9% to a record $5.9
million, or $.37 per share, adjusted for the 3-for-2 stock split paid June 15,
1995. This compares with $4.4 million, or $.27 per share for the second quarter
last year, adjusted for the stock split.
First half sales increased 12% to a record $313.8 million. Income was a record
$11.9 million, or $.74 per share, up 37.2% over $8.7 million, or $.54 per share,
adjusted for the stock split, before the 1994 accounting changes.
This strong performance resulted from across-the-board growth in our core
business supplies segment and our book manufacturing and extrusion coating
segments.
The Board of Directors has declared a regular quarterly dividend of $.14 per
share, as adjusted for the 3-for-2 stock split, payable September 15 to
shareholders of record September 1.
On June 23, ABP acquired certain assets of Electronic Form Systems, Inc., a
developer and provider of electronic forms, automation and electronic
distribution systems for businesses. EFS will operate as a division of Vanier,
positioning the company to penetrate the $25 billion market for software,
communications and workflow automation. We believe this acquisition offers
exciting opportunities for growth in the future.
We anticipate continuing progress in the second half of 1995.
Thomas R. Carmody Robert W. Gundeck
Chairman and President and
Chief Executive Officer Chief Operating Officer
July 26, 1995
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FINANCIAL HIGHLIGHTS (DOLLARS IN THOUSANDS) SECOND QUARTER SIX MONTHS
PERIOD ENDED JUNE 30 1995 1994 1995 1994
Net sales $156,425 $139,370 $313,809 $280,084
Income before cumulative effect of changes in
accounting principles 5,937 4,400 11,886 8,665
Income per common share before cumulative effect
of changes in accounting principles .37 .27 .74 .54
Net income 5,937 4,400 11,886 8,060
Net income per common share .37 .27 .74 .50
Dividends per common share .14 .133 .28 .267
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CONSOLIDATED INCOME STATEMENTS
(DOLLARS IN THOUSANDS, EXCEPT PER SHARE DATA)
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1995 1994
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QUARTER ENDED JUNE 30,
Net Sales.................................................. $ 156,425 $ 139,370
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Cost of Goods Sold......................................... 110,464 97,832
Selling and Administrative Expenses........................ 34,435 32,021
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144,899 129,853
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Operating Income........................................... 11,526 9,517
Other Income (Expense):
Interest expense......................................... (2,197) (2,268)
Miscellaneous -- net..................................... 520 498
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Income Before Income Taxes................................. 9,849 7,747
Provision for Income Taxes................................. 3,912 3,347
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Net Income................................................. $ 5,937 $ 4,400
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Earnings Per Common Share.................................. $ .37 $ .27
Dividends Per Common Share................................. .14 .133
Average Number of Common Shares Outstanding................ 16,051,944 16,025,851
SIX MONTHS ENDED JUNE 30,
Net Sales.................................................. $ 313,809 $ 280,084
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Cost of Goods Sold......................................... 220,832 196,622
Selling and Administrative Expenses........................ 69,359 64,794
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290,191 261,416
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Operating Income........................................... 23,618 18,668
Other Income (Expense)
Interest expense......................................... (4,358) (4,634)
Miscellaneous -- net..................................... 617 735
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Income Before Income Taxes and Cumulative Effect of Changes
in Accounting Principles................................. 19,877 14,769
Provision for Income Taxes................................. 7,991 6,104
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Income Before Cumulative Effect of Changes in Accounting
Principles............................................... 11,886 8,665
Cumulative Effect of Changes in Accounting Principles...... (605)
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Net Income (Loss).......................................... $ 11,886 $ 8,060
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Per Common Share:
Income before cumulative effect of changes in accounting
principles............................................ $ .74 $ .54
Net Income............................................... $ .74 $ .50
Dividends Per Common Share................................. .28 .267
Average Number of Common Shares Outstanding................ 16,023,243 16,024,732
(Unaudited)
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CONSOLIDATED BALANCE SHEETS
(DOLLARS IN THOUSANDS)
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JUNE 30, DECEMBER 31,
1995 1994
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Current Assets
Cash and cash equivalents................................... $ 20,402 $ 25,997
Accounts receivable, less allowances of $2,622 and $2,379... 78,968 72,536
Inventories................................................. 56,503 51,929
Other....................................................... 1,425 2,250
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Total Current Assets................................ 157,298 152,712
Plant And Equipment -- At Cost
Land........................................................ 5,743 5,983
Buildings and improvements.................................. 55,205 52,011
Machinery and equipment..................................... 132,192 127,645
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193,140 185,639
Less accumulated depreciation............................... 99,269 93,199
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93,871 92,440
Intangible Assets From Acquisitions
Goodwill, less amortization of $3,124 and $2,605............ 38,102 31,528
Other, less amortization of $4,357 and $3,973............... 2,054 2,449
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40,156 33,977
Deferred Income Taxes......................................... 10,195 10,495
Other Assets.................................................. 22,640 22,477
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$324,160 $312,101
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Current Liabilities
Accounts payable............................................ $ 39,986 $ 41,674
Salaries and wages.......................................... 10,606 9,771
Profit sharing contributions................................ 3,505 4,397
Income taxes................................................ 1,340
Current maturities of long-term debt........................ 6,158 6,237
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Total Current Liabilities........................... 60,255 63,419
Long-Term Debt................................................ 74,602 75,144
Supplemental Retirement Benefits.............................. 15,096 13,609
Postretirement and Postemployment Benefits.................... 22,505 22,448
Stockholders' Equity
Common stock -- $2 par value; authorized 50,000,000 shares,
issued 16,545,130 and 10,784,229 shares.................. 33,090 21,569
Additional paid-in capital.................................. 5,354 118
Retained earnings........................................... 115,488 118,095
Foreign currency translation adjustment..................... 267 64
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154,199 139,846
Less 189,532 and 121,478 shares of Common Stock in
treasury -- at cost...................................... 2,497 2,365
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151,702 137,481
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$324,160 $312,101
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(Unaudited)
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