Exhibit 99.1
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CONDENSED CONSOLIDATING FINANCIAL INFORMATION
These statements are provided to comply with the reporting requirements
under the indenture for the 8 3/4% Senior Subordinated Notes due in 2008.
The following condensed consolidating financial information illustrates the
composition of the Parent Guarantor, Issuer, Guarantor Subsidiaries and
non-guarantor subsidiaries. The Issuer, the Guarantor Subsidiaries and the
non-guarantor subsidiaries comprise all of the direct and indirect
subsidiaries of the Parent Guarantor. Management has determined that
separate complete financial statements would not provide additional material
information that would be useful in assessing the financial composition of
the Guarantor Subsidiaries.
In December 1998, Mail-Well I Corporation ("Issuer" or "MWI"), the Company's
wholly-owned subsidiary, and the only direct subsidiary of the Company,
issued $300.0 million aggregate principal amount of 8 3/4% Senior
Subordinated Notes ("Senior Notes") due in 2008. The Senior Notes are
guaranteed by the majority of the U.S. subsidiaries (the "Guarantor
Subsidiaries") of MWI, all of which are wholly owned, and by Mail-Well, Inc.
("Parent Guarantor"). The guarantees are joint and several, full, complete
and unconditional. There are no material restrictions on the ability of the
Guarantor Subsidiaries to transfer funds to MWI in the form of cash
dividends, loans or advances, other than ordinary legal restrictions under
corporate law, fraudulent transfer and bankruptcy laws.
Investments in subsidiaries are accounted for under the equity method,
wherein the investor company's share of earnings and income taxes applicable
to the assumed distribution of such earnings are included in net income. In
addition, investments increase in the amount of permanent contributions to
subsidiaries and decrease in the amount of distributions from subsidiaries.
The elimination entries eliminate the equity method investment in
subsidiaries and the equity in earnings of subsidiaries, intercompany
payables and receivables and other transactions between subsidiaries.
CONSOLIDATING CONDENSED STATEMENT OF FINANCIAL POSITION
December 31, 2001
(in thousands)
Combined Combined
Parent Guarantor Nonguarantor
Guarantor Issuer Subsidiaries Subsidiaries Elim. Consolidated
--------- ------ ------------ ------------ ----- ------------
Current assets:
Cash and cash equivalents $ -- $ (1,589) $ 1,137 $ 1,388 $ -- $ 936
Receivables, net -- 52,042 202,112 36,987 -- 291,141
Accounts receivable - other -- 4,407 32,441 480 -- 37,328
Inventories, net -- 45,162 75,694 19,209 -- 140,065
Note receivable from Issuer 147,436 -- -- -- (147,436) --
Other current assets 295 7,426 33,829 1,947 (10,506) 32,991
-------- ---------- ---------- -------- ----------- ----------
Total current assets 147,731 107,448 345,213 60,011 (157,942) 502,461
Investment in subsidiaries 240,954 308,616 82,168 -- (631,738) --
Property, plant and equipment, net -- 122,892 333,167 77,417 -- 533,476
Intangible assets, net -- 46,143 317,087 79,375 -- 442,605
Note receivable from subsidiaries -- 749,400 -- -- (749,400) --
Other assets, net 1,023 14,411 (29,377) 149,809 (41,500) 94,366
-------- ---------- ---------- -------- ----------- ----------
Total assets $389,708 $1,348,910 $1,048,258 $366,612 $(1,580,580) $1,572,908
======== ========== ========== ======== =========== ==========
Current liabilities:
Accounts payable $ -- $ 50,378 $ 131,892 $ 17,828 $ -- $ 200,098
Other current liabilities 8,768 197,816 (139,844) 85,446 (10,506) 141,680
Note payable to Parent -- 147,436 -- -- (147,436) --
Current portion of long-term debt 139,063 36,157 1,600 1,196 -- 178,016
-------- ---------- ---------- -------- ----------- ----------
Total current liabilities 147,831 431,787 (6,352) 104,470 (157,942) 519,794
Long-term debt -- 645,500 20,626 17,901 -- 684,027
Note payable to Issuer -- -- 749,400 -- (749,400) --
Deferred income taxes -- 28,287 88,150 13,997 (21,508) 108,926
Other long-term liabilities -- 2,382 35,050 844 (19,992) 18,284
-------- ---------- ---------- -------- ----------- ----------
Total liabilities 147,831 1,107,956 886,874 137,212 (948,842) 1,331,031
Shareholders' equity 241,877 240,954 161,384 229,400 (631,738) 241,877
-------- ---------- ---------- -------- ----------- ----------
Total liabilities and shareholders' equity $389,708 $1,348,910 $1,048,258 $366,612 $(1,580,580) $1,572,908
======== ========== ========== ======== =========== ==========
2
CONSOLIDATING CONDENSED STATEMENT OF FINANCIAL POSITION
December 31, 2000
(in thousands)
Combined Combined
Parent Guarantor Nonguarantor
Guarantor Issuer Subsidiaries Subsidiaries Elim. Consolidated
--------- ------ ------------ ------------ ----- ------------
Current assets:
Cash and cash equivalents $ -- $ 9,596 $ (9,846) $ 712 $ -- $ 462
Receivables, net -- 8,669 151,978 41,883 -- 202,530
Investment in accounts receivable
securitization -- -- -- 75,427 -- 75,427
Accounts receivable - other -- 13,499 5,615 1,063 -- 20,177
Inventories, net -- 51,359 91,815 23,259 -- 166,433
Note receivable from Issuer 147,436 -- -- -- (147,436) --
Other current assets 262 25,741 24,399 3,786 (181) 54,007
-------- ---------- ---------- -------- ----------- ----------
Total current assets 147,698 108,864 263,961 146,130 (147,617) 519,036
Investment in subsidiaries 385,505 357,592 64,348 -- (807,445) --
Property, plant and equipment, net -- 132,522 350,964 86,536 -- 570,022
Intangible assets, net -- 49,455 483,515 86,245 -- 619,215
Notes receivable from subsidiaries -- 784,400 -- -- (784,400) --
Other assets, net 3,481 55,581 1,101 4,001 (18,882) 45,282
-------- ---------- ---------- -------- ----------- ----------
Total assets $536,684 $1,488,414 $1,163,889 $322,912 $(1,758,344) $1,753,555
======== ========== ========== ======== =========== ==========
Current liabilities:
Accounts payable $ -- $ 32,446 $ 107,569 $ 17,700 $ -- $ 157,715
Accrued compensation -- 24,556 31,144 7,486 -- 63,186
Other current liabilities 11,768 100,773 (184,734) 155,374 (181) 83,000
Note payable to Parent -- 147,436 -- -- (147,436) --
Current portion of long-term debt -- 30,767 2,662 7,113 -- 40,542
-------- ---------- ---------- -------- ----------- ----------
Total current liabilities 11,768 335,978 (43,359) 187,673 (147,617) 344,443
Long-term debt 139,063 718,147 18,471 12,921 -- 888,602
Notes payable to issuer -- -- 784,400 -- (784,400) --
Deferred income taxes -- 28,288 66,688 13,469 -- 108,445
Other long-term liabilities -- 20,496 23,992 606 (18,882) 26,212
-------- ---------- ---------- -------- ----------- ----------
Total liabilities 150,831 1,102,909 850,192 214,669 (950,899) 1,367,702
Shareholders' equity 385,853 385,505 313,697 108,243 (807,445) 385,853
-------- ---------- ---------- -------- ----------- ----------
Total liabilities and shareholders' equity $536,684 $1,488,414 $1,163,889 $322,912 $(1,758,344) $1,753,555
======== ========== ========== ======== =========== ==========
3
CONSOLIDATING CONDENSED STATEMENT OF OPERATIONS
Year Ended December 31, 2001
(in thousands)
Combined Combined
Parent Guarantor Nonguarantor
Guarantor Issuer Subsidiaries Subsidiaries Elim. Consolidated
--------- ------ ------------ ------------ ----- ------------
Net sales $ -- $ 450,091 $1,555,706 $253,302 $ -- $2,259,099
Cost of sales -- 373,140 1,210,223 186,027 -- 1,769,390
--------- --------- ---------- -------- -------- ----------
Gross profit -- 76,951 345,483 67,275 -- 489,709
Other operating costs:
Selling, administrative and other 378 54,811 304,012 29,523 -- 388,724
Restructuring, asset impairments
and other charges -- 38,185 7,483 (112) -- 45,556
--------- --------- ---------- -------- -------- ----------
Total other operating costs 378 92,996 311,495 29,411 -- 434,280
--------- --------- ---------- -------- --------- ----------
Operating income (loss) (378) (16,045) 33,988 37,864 -- 55,429
Other loss (income):
Interest expense 7,970 75,811 69,199 2,418 (76,506) 78,892
Other expense (income) (8,923) (67,301) 2,547 1,301 76,506 4,130
--------- --------- ---------- -------- -------- ----------
Income (loss) from continuing
operations before income taxes
and undistributed earnings of
subsidiaries 575 (24,555) (37,758) 34,145 -- (27,593)
Provision for income taxes -- (1,481) (22,162) 15,307 -- (8,336)
--------- --------- ---------- -------- -------- ----------
Income (loss) from continuing
operations before undistributed
earnings of subsidiaries 575 (23,074) (15,596) 18,838 -- (19,257)
Equity in undistributed earnings
of subsidiaries (136,792) (113,717) 23,699 -- 226,810 --
--------- --------- ---------- -------- -------- ----------
Income from continuing operations (136,217) (136,791) 8,103 18,838 226,810 (19,257)
Loss on discontinued operations -- -- (116,960) -- -- (116,960)
--------- --------- ---------- -------- -------- ----------
Net income $(136,217) $(136,791) $ (108,857) $ 18,838 $226,810 $ (136,217)
========= ========= ========== ======== ======== ==========
4
CONSOLIDATING CONDENSED STATEMENT OF OPERATIONS
Year Ended December 31, 2000
(in thousands)
Combined Combined
Parent Guarantor Nonguarantor
Guarantor Issuer Subsidiaries Subsidiaries Elim. Consolidated
--------- ------ ------------ ------------ ----- ------------
Net sales $ -- $458,560 $1,658,249 $308,406 $ -- $2,425,215
Cost of sales -- 363,416 1,285,748 229,142 -- 1,878,306
------- -------- ---------- -------- -------- ----------
Gross profit -- 95,144 372,501 79,264 -- 546,909
Other operating costs:
Selling, administrative and other 294 75,804 270,147 42,582 -- 388,827
Restructuring, asset impairments and
other charges -- 1,146 20,916 2,921 -- 24,983
------- -------- ---------- -------- -------- ----------
Total other operating costs 294 76,950 291,063 45,503 -- 413,810
------- -------- ---------- -------- -------- ----------
Operating income (loss) (294) 18,194 81,438 33,761 -- 133,099
Other expense (income):
Interest expense 8,035 78,672 76,752 2,438 (77,528) 88,369
Other expense (income) (8,846) (66,991) (819) 720 77,528 1,592
------- -------- ---------- -------- -------- ----------
Income (loss) from continuing
operations before income taxes and
undistributed earnings of subsidiaries 517 6,513 5,505 30,603 -- 43,138
Provision for income taxes -- 2,435 3,473 12,117 -- 18,025
------- -------- ---------- -------- -------- ----------
Income (loss) from continuing
operations before undistributed
earnings of subsidiaries 517 4,078 2,032 18,486 -- 25,113
Equity in undistributed earnings of
subsidiaries 25,263 23,885 17,203 -- (66,351) --
------- -------- ---------- -------- -------- ----------
Income from continuing operations 25,780 27,963 19,235 18,486 (66,351) 25,113
Income from discontinued operations -- (2,307) 2,009 1,356 -- 1,058
------- -------- ---------- -------- -------- ----------
Income before extraordinary items 25,780 25,656 21,244 19,842 (66,351) 26,171
Extraordinary items 1,838 (391) -- -- -- 1,447
------- -------- ---------- -------- -------- ----------
Net income $27,618 $ 25,265 $ 21,244 $ 19,842 $(66,351) $ 27,618
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CONSOLIDATING CONDENSED STATEMENT OF OPERATIONS
Year Ended December 31, 1999
(in thousands)
Combined Combined
Parent Guarantor Nonguarantor
Guarantor Issuer Subsidiaries Subsidiaries Elim. Consolidated
--------- ------ ------------ ------------ ----- ------------
Net sales $ -- $366,782 $1,224,653 $295,795 $ -- $1,887,230
Cost of sales -- 284,246 959,118 214,540 -- 1,457,904
------- -------- ---------- -------- --------- ----------
Gross profit -- 82,536 265,535 81,255 -- 429,326
Other operating costs:
Selling, administrative and other 200 63,265 157,369 44,253 -- 265,087
Restructuring, asset impairments and
other charges -- -- 1,946 -- -- 1,946
------- -------- ---------- -------- --------- ----------
Total other operating costs 200 63,265 159,315 44,253 -- 267,033
------- -------- ---------- -------- --------- ----------
Operating income (loss) (200) 19,271 106,220 37,002 -- 162,293
Other expense (income):
Interest expense 8,543 47,431 22,018 4,828 (27,573) 55,247
Other expense (income) (8,846) (19,007) (733) 229 27,573 (784)
------- -------- ---------- -------- --------- ----------
Income (loss) from continuing
operations before income
taxes and undistributed
earnings of subsidiaries 103 (9,153) 84,935 31,945 -- 107,830
Provision for income taxes 39 (3,737) 37,415 9,631 -- 43,348
------- -------- ---------- -------- --------- ----------
Income (loss) from continuing
operations before
undistributed earnings of
subsidiaries 64 (5,416) 47,520 22,314 -- 64,482
Equity in undistributed earnings
of subsidiaries 64,418 69,834 18,742 -- (152,994) --
------- -------- ---------- -------- --------- ----------
Net income $64,482 $ 64,418 $ 66,262 $ 22,314 $(152,994) $ 64,482
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