-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: keymaster@town.hall.org Originator-Key-Asymmetric: MFkwCgYEVQgBAQICAgADSwAwSAJBALeWW4xDV4i7+b6+UyPn5RtObb1cJ7VkACDq pKb9/DClgTKIm08lCfoilvi9Wl4SODbR1+1waHhiGmeZO8OdgLUCAwEAAQ== MIC-Info: RSA-MD5,RSA, YgZRT0lggQHVQlAj5c4ET39RNm/S1CKHDjclNaohBLKHpo3HJRIUIWkfFVv7/WAx vcjQiz+fGZHWmXebh1gQvg== 0000950123-94-001045.txt : 19940614 0000950123-94-001045.hdr.sgml : 19940614 ACCESSION NUMBER: 0000950123-94-001045 CONFORMED SUBMISSION TYPE: 10-Q PUBLIC DOCUMENT COUNT: 1 CONFORMED PERIOD OF REPORT: 19940430 FILED AS OF DATE: 19940613 FILER: COMPANY DATA: COMPANY CONFORMED NAME: BOWNE & CO INC CENTRAL INDEX KEY: 0000013610 STANDARD INDUSTRIAL CLASSIFICATION: 2750 IRS NUMBER: 132618477 STATE OF INCORPORATION: NY FISCAL YEAR END: 1031 FILING VALUES: FORM TYPE: 10-Q SEC ACT: 1934 Act SEC FILE NUMBER: 001-05842 FILM NUMBER: 94533984 BUSINESS ADDRESS: STREET 1: 345 HUDSON ST CITY: NEW YORK STATE: NY ZIP: 10014 BUSINESS PHONE: 2129245500 10-Q 1 BOWNE & CO. FORM 10-Q, 4/30/94 1 - -------------------------------------------------------------------------------- - -------------------------------------------------------------------------------- SECURITIES AND EXCHANGE COMMISSION WASHINGTON, D.C. 20549 ------------------ FORM 10-Q /X/ Quarterly report pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934 For the quarterly period ended April 30, 1994, or / / Transition report pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934 For the transition period from to ------------------------ COMMISSION FILE NUMBER 1-5842 ------------------------ BOWNE & CO., INC. (Exact name of registrant as specified in its charter) NEW YORK (State or other jurisdiction of incorporation or organization) 345 HUDSON STREET NEW YORK, NEW YORK (Address of principal executive offices) 13-2618477 (IRS Employer Identification Number) 10014 (Zip code) (212) 924-5500 (Registrant's telephone number, including area code) NOT APPLICABLE (Former name, former address and former fiscal year, if changed since last report) 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, and (2) has been subject to such filing requirements for the past 90 days. Yes X No The number of shares outstanding of each of the issuer's classes of common stock was 17,376,953 shares of common stock, par value $.01, outstanding as at June 8, 1994. - -------------------------------------------------------------------------------- - -------------------------------------------------------------------------------- 2 FINANCIAL STATEMENTS BOWNE & CO., INC. AND SUBSIDIARIES CONDENSED CONSOLIDATED BALANCE SHEETS
APRIL 30, 1994 OCTOBER 31, (UNAUDITED) 1993 ------------ ------------ (000'S OMITTED) ASSETS Current assets: Cash and cash equivalents........................................................... $ 12,733 $ 33,067 Trade accounts receivable, less allowance for doubtful accounts of $7,517,000 and $6,550,000......................................................................... 112,884 92,857 Inventories......................................................................... 36,238 21,729 Prepaid expenses and sundry receivables............................................. 5,649 4,851 ------------ ------------ Total current assets.................................................... 167,504 152,504 Marketable securities................................................................... 10,742 17,393 Real estate, equipment and leasehold improvements, less depreciation and amortization of $74,180,000 and $68,338,000........................................................... 95,220 88,840 Excess cost of subsidiaries over net assets at date of acquisition...................... 15,269 15,784 Other assets............................................................................ 7,483 9,103 ------------ ------------ Totals.............................................................. $296,218 $283,624 ============ ============ LIABILITIES AND STOCKHOLDERS' EQUITY Current liabilities: Notes payable and current debt...................................................... $ 3,934 $ 5,434 Accounts payable.................................................................... 17,785 14,134 Accrued liabilities................................................................. 32,864 40,037 Income taxes payable................................................................ 8,604 5,114 ------------ ------------ Total current liabilities............................................... 63,187 64,719 Long-term debt -- net of current portion................................................ 3,373 8,836 Deferred employee compensation and benefits............................................. 14,088 13,386 ------------ ------------ Total liabilities....................................................... 80,648 86,941 ------------ ------------ Stockholders' equity: Common stock, par value $.01, issued 19,029,462 shares in 1994 and 18,948,442 shares in 1993............................................................................ 190 189 Additional paid-in capital.......................................................... 23,906 22,903 Retained earnings................................................................... 211,158 192,229 Treasury stock, 1,653,209 shares in 1994 and 1,650,331 shares in 1993, at cost...... (18,119) (18,054) Foreign currency translation adjustment............................................. (1,565) (584) ------------ ------------ Total stockholders' equity.............................................. 215,570 196,683 ------------ ------------ Totals.............................................................. $296,218 $283,624 ============ ============
1 3 BOWNE & CO., INC. AND SUBSIDIARIES CONDENSED CONSOLIDATED STATEMENTS OF INCOME
THREE MONTHS ENDED APRIL 30, (UNAUDITED) ----------------------- (000'S OMITTED) 1994 1993 -------- ------- Revenues: Net sales............................................................................. $119,187 $89,649 Other................................................................................. 1,545 1,200 -------- ------- 120,732 90,849 -------- ------- Expenses: Cost of sales......................................................................... 63,142 42,749 Selling and administrative............................................................ 26,903 25,354 Depreciation and amortization......................................................... 4,119 3,501 Interest.............................................................................. 326 458 -------- ------- 94,490 72,062 -------- ------- Income before income taxes................................................................ 26,242 18,787 -------- ------- Income taxes: State and local....................................................................... 2,291 1,703 Federal............................................................................... 8,251 5,178 Foreign............................................................................... 830 311 -------- ------- 11,372 7,192 -------- ------- Net income................................................................................ $ 14,870 $11,595 ======== ======= Net income per share...................................................................... $.86 $.67 ======== ======= Dividends per share....................................................................... $.075 $.075 ======== =======
SIX MONTHS ENDED APRIL 30, (UNAUDITED) ----------------------- (000'S OMITTED) 1994 1993 -------- -------- Revenues: Net sales............................................................................. $201,262 $150,675 Other................................................................................. 3,243 2,098 -------- -------- 204,505 152,773 -------- -------- Expenses: Cost of sales......................................................................... 108,398 75,497 Selling and administrative............................................................ 50,150 44,019 Depreciation and amortization......................................................... 7,718 6,786 Interest.............................................................................. 679 1,099 -------- -------- 166,945 127,401 -------- -------- Income before income taxes................................................................ 37,560 25,372 -------- -------- Income taxes: State and local....................................................................... 3,333 2,173 Federal............................................................................... 11,291 7,522 Foreign............................................................................... 1,407 215 -------- -------- 16,031 9,910 -------- -------- Net income................................................................................ $ 21,529 $ 15,462 ======== ======== Net income per share...................................................................... $1.24 $.90 ======== ======== Dividends per share....................................................................... $.15 $.15 ======== ========
2 4 BOWNE & CO., INC. AND SUBSIDIARIES CONDENSED CONSOLIDATED STATEMENT OF RETAINED EARNINGS
SIX MONTHS ENDED APRIL 30, 1994 (UNAUDITED) ----------------- (000'S OMITTED) Retained earnings at beginning of period.................................................... $192,229 Net income.................................................................................. 21,529 Dividends................................................................................... (2,600) -------- Retained earnings at end of period.......................................................... $211,158 ===================
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
SIX MONTHS ENDED APRIL 30, (UNAUDITED) --------------------------- (000'S OMITTED) 1994 1993 Cash flows from operating activities: Net income....................................................................... $ 21,529 $ 15,462 Adjustments to reconcile net income to net cash provided by (used in) operating activities: Depreciation and amortization................................................ 7,718 6,786 Provision for deferred employee compensation................................. 702 (43) Changes in other current assets and liabilities, net of non-cash transactions................................................................. (36,823) (29,009) -------- -------- Net cash used in operating activities............................................ (6,874) (6,804) -------- -------- Cash flows from investing activities: Purchase of securities or other investments...................................... (1,852) (9,447) Proceeds from the sale of securities and other investments....................... 10,439 7,447 Purchase of real estate, equipment and leasehold improvements.................... (13,626) (6,466) -------- -------- Net cash used in investing activities............................................ (5,039) (8,466) -------- -------- Cash flows from financing activities: Payment of debt.................................................................. (9,409) (5,274) Proceeds from borrowings......................................................... 2,612 Proceeds from stock options exercised............................................ 1,003 986 Payment of dividends............................................................. (2,600) (2,576) Purchase of treasury stock....................................................... (65) (121) -------- -------- Net cash used in financing activities............................................ (8,459) (6,985) -------- -------- Effect of exchange rate on cash...................................................... 38 13 -------- -------- Decrease in cash and cash equivalents................................................ $(20,334) $(22,242) ======== ========
3 5 BOWNE & CO., INC. AND SUBSIDIARIES NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS NOTE 1. The financial information included herein as at April 30, 1994 and for the three and six months ended April 30, 1994 and 1993 is unaudited and, in the opinion of the Company, reflects all adjustments (which include only normal recurring accruals) necessary for a fair presentation of the financial position as of those dates and the results of operations for those periods. The information in the Condensed Consolidated Balance Sheet as at October 31, 1993 was derived from the Company's audited annual report for 1993. NOTE 2. Inventories of $36,238,000 in 1994 include raw materials of $5,088,000 and work in process of $31,150,000. In 1993, inventories of $21,729,000 included raw materials of $4,293,000 and work in process of $17,436,000. NOTE 3. Net income per share is calculated by dividing net income by the weighted average number of common shares outstanding during the period. The weighted average number of shares was 17,356,042 (three months) and 17,329,377 (six months) in 1994, and 17,205,163 (three months) and 17,182,876 (six months) in 1993. NOTE 4. Effective November 1, 1993, the Company adopted FASB No. 109, "Accounting for Income Taxes" (SFAS 109), and has applied the provisions prospectively for 1994. The adoption of SFAS 109 had no effect on the tax provisions or net income for the three and six months ended April 30, 1994. 4 6 MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS LIQUIDITY AND CAPITAL RESOURCES The Company has a strong financial position with excellent liquidity. On April 30, 1994, the Company had a working capital ratio of 2.65 to 1 and working capital of $104,317,000. Cash generated from operations, available working capital and borrowings have been used to finance acquisitions, capital expenditures, purchase of treasury stock and payment of dividends. It is expected that such funds and the Company's borrowing capacity will be sufficient to finance the Company's future capital expenditures, acquisition of treasury stock, payment of dividends and possible acquisitions. INFLATION The Company has experienced the effects of inflation through increases in the costs of employee compensation and related fringe benefits, outside services, raw materials and other supplies. Due to price competition, the Company does not always fully recover all of its increased costs. RESULTS OF OPERATIONS The Company provides printing services to produce the varied documentation required by major financial transactions, corporate periodic reports, restructuring plans for bankrupt companies, communication to shareholders and basic commercial printing. The sales value of each project is dependent, among other things, upon the size, complexity and type of document printed, the time allowed for completion and the level of changes required, and may be further impacted by the level of competition. The Company's corporate printing business is seasonal to the extent that the greatest number of proxy statements and annual reports are required to be printed during the Company's second fiscal quarter ending April 30. In addition, the Company's business is generally affected by cyclical conditions in the capital markets. The general necessity for rapid document processing after delivery of copy by its customers requires that the Company maintain physical plant and customer service staff sufficient to meet maximum work loads. Consequently, the Company does not always operate at full capacity. QUARTER ENDED APRIL 30, 1994 COMPARED TO QUARTER ENDED APRIL 30, 1993 Sales increased 33% to $119,187,000. The increase was primarily attributable to increased demand for the Company's financial printing services and additional sales to the mutual fund industry. The increase in sales was partially offset by a decrease in the gross margin percentage from 52% to 47%. The decrease in the gross margin percentage was due to expansion of production facilities, increases in the production workforce and changes in the mix of services. As a result, gross margin increased $9,145,000. Other revenue increased $345,000 to $1,545,000 on higher realized gains from the sale of securities. Selling and administrative expenses increased $1,549,000, or 6%, to $26,903,000 as a result of general increases in the cost of facilities and employee compensation, as well as sales commission and incentive compensation related to increases in sales. Depreciation and amortization increased $618,000, or 18%, primarily as a result of the expansion of facilities and acquisition of equipment. Interest expense decreased $132,000 due to the reduction of the Company's debt. The income tax rate increased from 38% to 43% as a result of an increased proportion of earnings in higher tax jurisdictions, and the higher tax rate and changes in the deductibility of certain expenses under the Omnibus Budget Reconciliation Act of 1993. 5 7 As a result of the foregoing, income before income taxes increased $7,455,000, or 40%, to $26,242,000, and net income increased $3,275,000, or 28%, to $14,870,000. SIX MONTHS ENDED APRIL 30, 1994 COMPARED TO SIX MONTHS ENDED APRIL 30, 1993 Sales increased 34% to $201,262,000 due to increased demand for financial printing services and additional sales to the mutual fund industry. The increase in sales, combined with a 4% decrease in the gross margin percentage, contributed to an increase in the gross margin of $17,686,000. The decrease in the gross margin percentage was due to expansion of production facilities, increases in the production workforce and changes in the mix of services. Other revenues increased $1,145,000 to $3,243,000, due to higher realized gains on the sale of securities. Selling and administrative expenses increased $6,131,000, or 14%, to $50,150,000 principally as a result of sales and incentive compensation and other expenses related to increases in sales and profitability, and to general increases in the costs of facilities and labor. Depreciation and amortization increased $932,000, or 14%, primarily as a result of the expansion of facilities and the acquisition of equipment. Interest expense decreased $420,000 due to the reduction of the Company's debt. The effective overall income tax rate increased from 39% to 43% as a result of an increased proportion of earnings in higher tax jurisdictions, and the higher tax rate and changes in deductions under the Omnibus Budget Reconciliation Act of 1993. As a result of the foregoing, income before income taxes increased $12,188,000, or 48%, to $37,560,000 and net income increased $6,067,000, or 39%, to $21,529,000. 6 8 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. BOWNE & CO., INC. Date: June 10, 1994 RICHARD H. KOONTZ ----------------------------------------------- RICHARD H. KOONTZ (PRESIDENT AND PRINCIPAL EXECUTIVE OFFICER) Date: June 10, 1994 JAMES P. O'NEIL ----------------------------------------------- JAMES P. O'NEIL (VICE PRESIDENT, FINANCE AND PRINCIPAL FINANCIAL OFFICER)
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