-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, HY5yFrWKU1+0YtCGTD3DMgjn5ZeZLO65RSNDk7mePu3BUpOZNnecIZkirvn0KPmK LRLrjWE6K0GgzK9Q4RVXBg== 0000950112-96-001468.txt : 19960701 0000950112-96-001468.hdr.sgml : 19960701 ACCESSION NUMBER: 0000950112-96-001468 CONFORMED SUBMISSION TYPE: 10-Q PUBLIC DOCUMENT COUNT: 2 CONFORMED PERIOD OF REPORT: 19960331 FILED AS OF DATE: 19960514 SROS: NYSE FILER: COMPANY DATA: COMPANY CONFORMED NAME: WORLD COLOR PRESS INC /DE/ CENTRAL INDEX KEY: 0000780117 STANDARD INDUSTRIAL CLASSIFICATION: 2750 IRS NUMBER: 371167902 STATE OF INCORPORATION: DE FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 10-Q SEC ACT: 1934 Act SEC FILE NUMBER: 001-11802 FILM NUMBER: 96562300 BUSINESS ADDRESS: STREET 1: 101 PARK AVE CITY: NEW YORK STATE: NY ZIP: 10178 BUSINESS PHONE: 2129862440 MAIL ADDRESS: STREET 1: 101 PARK AVENUE CITY: NEW YORK STATE: NY ZIP: 10178 10-Q 1 WORLD COLOR PRESS, INC. =============================================================================== =============================================================================== UNITED STATES 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 MARCH 31, 1996 COMMISSION FILE NUMBER 1-11802 [GRAPHIC OMITTED] WORLD COLOR PRESS, INC. (Exact name of registrant as specified in its charter) DELAWARE 37-1167902 (State or other jurisdiction of (IRS Employer Identification Number) incorporation or organization) 101 PARK AVENUE, NEW YORK, NEW YORK 10178 (Address of principal executive offices) (Zip Code) 212-986-2440 (Registrant's telephone number, including area code) 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 in the past 90 days. YES [X] No [ ] At May 10, 1996, 33,749,717 shares of the registrant's common stock, $.01 par value, were outstanding. WORLD COLOR PRESS, INC. QUARTERLY REPORT ON FORM 10-Q FOR THE QUARTERLY PERIOD ENDED MARCH 31, 1996 INDEX Page PART I. FINANCIAL INFORMATION Condensed Consolidated Balance Sheets as of March 31, 1996 and December 31, 1995...................................3 Condensed Consolidated Statements of Operations for the Three Months ended March 31, 1996 and April 2, 1995..........................................................4 Condensed Consolidated Statements of Cash Flows for the Three Months ended March 31, 1996 and April 2, 1995................5 Notes to Condensed Consolidated Financial Statements.........................................................6 - 7 Management's Discussion and Analysis of Financial Condition and Results of Operations................................8 - 9 PART II. OTHER INFORMATION.................................................10 -2- WORLD COLOR PRESS, INC. PART I. FINANCIAL INFORMATION CONDENSED CONSOLIDATED BALANCE SHEETS MARCH 31, 1996 AND DECEMBER 31, 1995 (DOLLARS IN THOUSANDS)
MARCH 31, DECEMBER 31, ASSETS 1996 1995 (Unaudited) (Note) CURRENT ASSETS: Cash and cash equivalents $ 10,911 $ 8,902 Accounts receivable - net 216,479 218,022 Inventories 111,651 130,369 Deferred income taxes 29,354 28,364 Other 7,600 11,060 -------------- ------------- Total current assets 375,995 396,717 -------------- ------------- NONCURRENT ASSETS: Property, plant and equipment, at cost 935,657 924,300 Accumulated depreciation and amortization (459,479) (443,879) --------------- ------------- Property, plant and equipment - net 476,178 480,421 Goodwill - net 249,261 249,473 Other 25,799 24,117 -------------- ------------- Total noncurrent assets 751,238 754,011 -------------- ------------- TOTAL ASSETS $ 1,127,233 $ 1,150,728 ============== ============= LIABILITIES AND STOCKHOLDERS' EQUITY CURRENT LIABILITIES: Accounts payable and accrued expenses $ 180,657 $ 198,522 Current maturities of long-term debt 41,959 37,360 -------------- ------------- Total current liabilities 222,616 235,882 -------------- ------------- NONCURRENT LIABILITIES: Long-term debt 425,650 449,746 Deferred income taxes 12,228 9,258 Other long-term liabilities 93,094 97,076 -------------- ------------- Total noncurrent liabilities 530,972 556,080 -------------- ------------- STOCKHOLDERS' EQUITY: Common stock, $.01 par value - authorized, 100,000,000 shares at March 31, 1996 and December 31, 1995; shares issued and outstanding, 33,749,717 at March 31, 1996 and 32,218,427 at December 31, 1995 337 322 Additional paid-in capital 583,756 574,831 Accumulated deficit (210,448) (216,387) --------------- ------------- Total stockholders' equity 373,645 358,766 -------------- ------------- TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY $ 1,127,233 $ 1,150,728 ============== =============
Note: Derived from audited financial statements See notes to condensed consolidated financial statements. -3- WORLD COLOR PRESS, INC. CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS (UNAUDITED) THREE MONTHS ENDED MARCH 31, 1996 AND APRIL 2, 1995 (DOLLARS IN THOUSANDS, EXCEPT PER SHARE DATA)
THREE MONTHS 1996 1995 NET SALES $ 329,111 $ 275,399 COST OF SALES 276,825 231,965 -------- ------------- GROSS PROFIT 52,286 43,434 SELLING, GENERAL AND ADMINISTRATIVE EXPENSES 32,304 28,700 -------- ------------- OPERATING INCOME 19,982 14,734 INTEREST EXPENSE 10,084 7,375 -------- ------------- INCOME BEFORE INCOME TAXES 9,898 7,359 INCOME TAX PROVISION 3,959 2,944 -------- ------------- NET INCOME $ 5,939 $ 4,415 ========== =========== Net income per common and common equivalent share $ 0.17 $ 0.13 Weighted average common and common equivalent shares outstanding 34,827,689 34,440,867
See notes to condensed consolidated financial statements. -4- WORLD COLOR PRESS, INC. CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (UNAUDITED) THREE MONTHS ENDED MARCH 31, 1996 AND APRIL 2, 1995 (IN THOUSANDS)
THREE MONTHS 1996 1995 OPERATING ACTIVITIES: Net income $ 5,939 $ 4,415 Adjustments to reconcile net income to net cash flows provided by (used in) operating activities: Depreciation and amortization 19,962 16,140 Deferred income tax provision 1,980 1,839 Amortization of debt issuance costs 462 493 Changes in operating assets and liabilities: Accounts receivable - net 1,543 (8,588) Inventories 18,718 (30,619) Accounts payable and accrued expenses (17,865) 11,773 Other assets and liabilities, net (3,112) (16,114) ------------ ------------ Net cash flows provided by (used in) operating activities 27,627 (20,661) ------------ ------------ INVESTING ACTIVITIES: Additions to property, plant and equipment - net (12,061) (69,950) Acquisitions of businesses, net of cash acquired (3,000) (107,643) ------------ ------------ Net cash used in investing activities (15,061) (177,593) ------------ ----------- FINANCING ACTIVITIES: Net borrowings (repayments) on debt (19,497) 180,055 Proceeds from issuance of common stock 8,940 66 ------------ ----------- Net cash provided by (used in) financing activities (10,557) 180,121 ------------ ----------- INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS 2,009 (18,133) CASH AND CASH EQUIVALENTS, BEGINNING OF PERIOD 8,902 24,828 ----------- ----------- CASH AND CASH EQUIVALENTS, END OF PERIOD $ 10,911 $ 6,695 =========== ===========
See notes to condensed consolidated financial statements. -5- WORLD COLOR PRESS, INC. NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (DOLLARS IN THOUSANDS) 1. BASIS OF PRESENTATION The accompanying condensed consolidated interim financial statements have been prepared by World Color Press, Inc. (along with its subsidiaries, the "Company") pursuant to the rules and regulations of the Securities and Exchange Commission and reflect normal and recurring adjustments, which are, in the opinion of the Company, considered necessary for a fair presentation. As permitted by these regulations, these statements do not include all information required by generally accepted accounting principles to be included in an annual set of financial statements, however, the Company believes that the disclosures made are adequate to make the information presented not misleading. It is suggested that these condensed consolidated financial statements be read in conjunction with the consolidated financial statements and the notes thereto included in the Company's latest Annual Report on Form 10-K. Certain reclassifications have been made to prior period amounts to conform with the current presentation. 2. INVENTORIES Inventories are summarized as follows: MARCH 31, DECEMBER 31, 1996 1995 Work-in-process $ 31,890 $ 34,366 Raw materials 79,761 96,003 ----------- ----------- Total $ 111,651 $ 130,369 =========== =========== 3. INITIAL PUBLIC OFFERING On January 25, 1996, 15,861,568 shares of the Company's common stock were sold at $19 per share in an initial public equity offering (the "Offering"). All of the shares in the Offering were sold by existing stockholders. The Company did not receive any of the proceeds from the sale of the shares, except that certain members of former management elected to participate in the Offering by exercising certain stock options granted to them by the Company. An aggregate of 1,531,290 shares underlying such options were sold in the Offering, generating proceeds to the Company of $8,940. These proceeds were used to pay expenses of the Offering and for general corporate purposes. -6- WORLD COLOR PRESS, INC. NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (DOLLARS IN THOUSANDS) 4. SUBSEQUENT EVENT On April 25, 1996, the Company entered into a definitive agreement to acquire the outstanding stock of Ringier America, a leading diversified commercial printer whose business includes the printing of catalogs, magazines and soft-cover books, for approximately $415,000, including indebtedness. The transaction is subject to certain conditions including, among others, regulatory approvals and completion of financing. The Company expects to complete arrangements with its bank group during the second quarter of 1996 to expand its credit facilities, primarily to finance this acquisition. -7- WORLD COLOR PRESS, INC. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS (DOLLARS IN THOUSANDS) GENERAL In March 1995 the Company purchased The Lanman Companies, Inc. and its subsidiaries, a group of graphic communications companies, Northeast Graphics Inc., a national commercial printer, and The Wessel Company, Inc., a national commercial printer of direct marketing materials. Collectively, these acquired companies will hereinafter be referred to as the "1995 Acquisitions." Results of operations for this interim period are not necessarily indicative of results for the full year. The Company's operations are seasonal. Historically, approximately two-thirds of its operating income has been generated in the second half of the fiscal year. RESULTS OF OPERATIONS Three Months Ended March 31, 1996 versus Three Months Ended April 2, 1995 Net sales increased $53,712 or 19.5%, to $329,111 in 1996 from $275,399 in 1995. Approximately 12% of the percentage increase was attributable to the 1995 Acquisitions, with the balance resulting from higher paper prices and continued volume growth. Gross profit increased $8,852 or 20.4% to $52,286 in 1996 from $43,434 in 1995. The increase is attributable to the 1995 Acquisitions, increased volume and improved operating efficiencies. The first quarter 1996 gross profit margin of 15.9% was up slightly from the same period in 1995, due to the above factors, partially offset by the effect of the higher paper prices. Selling, general and administrative expenses increased $3,604 or 12.6% to $32,304 in 1996 from $28,700 in 1995. The increase is partially attributable to the 1995 Acquisitions, including the related additional amortization expense for goodwill, as well as increased selling expenses related to higher volume. Interest expense increased $2,709 or 36.7% to $10,084 in 1996 from $7,375 in 1995. The increase is attributable to an increase in average borrowings primarily incurred to fund the 1995 Acquisitions, capital expenditures and working capital requirements, along with a higher average cost of funds. The effective tax rates for the first quarter of 1996 and 1995 were 40%, and were primarily composed of the combined federal and state statutory rates. -8- WORLD COLOR PRESS, INC. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS (DOLLARS IN THOUSANDS) LIQUIDITY AND CAPITAL RESOURCES On January 25, 1996, 15,861,568 shares of the Company's common stock were sold at $19 per share in an initial public equity offering (the "Offering"). All of the shares in the Offering were sold by existing stockholders. The Company did not receive any of the proceeds from the sale of the shares, except that certain members of former management elected to participate in the Offering by exercising certain stock options granted to them by the Company. An aggregate of 1,531,290 shares underlying such options were sold in the Offering, generating proceeds to the Company of $8,940. These proceeds were used to pay expenses of the Offering and for general corporate purposes. Net income from operations plus depreciation and amortization and deferred income taxes was $28,343 and $22,887 for the three months ended March 31, 1996 and April 2, 1995, respectively. The Company's outstanding indebtedness less cash decreased $21,506 from December 31, 1995 to March 31, 1996 as a result of operating cash flow and proceeds from the issuance of common stock upon the exercise of stock options in connection with the Offering, partially offset by the funding of capital expenditures. Inventory levels decreased $18,718 or 14.4% in the first quarter of 1996, reflecting a decline in the price of paper and its return to a more normalized availability. The Company anticipates that 1996 capital expenditures will be approximately $75,000 for the full year. As of March 31, 1996, the Company had undrawn commitments of $74,300 under its acquisition term loan facility and $70,471 under its revolving bank credit facility. During the period ended March 31, 1996, the Company acquired a business. The contribution of this business was not significant to the Company's results of operations for the period presented, nor is it expected to have a material effect on the Company's results on a continuing basis. On April 25, 1996, the Company entered into a definitive agreement to acquire the outstanding stock of Ringier America, a leading diversified commercial printer whose business includes the printing of catalogs, magazines and soft-cover books, for approximately $415,000, including indebtedness. The transaction is subject to certain conditions including, among others, regulatory approvals and completion of financing. The Company expects to complete arrangements with its bank group during the second quarter of 1996 to expand its credit facilities, primarily to finance this acquisition. The Company believes that its liquidity, capital resources and cash flows are sufficient to fund planned capital expenditures, working capital requirements and interest and principal payments for the foreseeable future. -9- WORLD COLOR PRESS, INC. PART II. OTHER INFORMATION ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K (a) Exhibits Exhibits required in accordance with Item 601 of Regulation S-K are incorporated by reference herein as filed with registrant's Annual Report on Form 10-K for the fiscal year ended December 31, 1995, dated March 30, 1996. (b) Reports on Form 8-K No reports on Form 8-K were filed during the quarterly period ended March 31, 1996. 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. WORLD COLOR PRESS, INC. Date: May 10, 1996 By: /s/ MARC L. REISCH ------------------- Marc L. Reisch Executive Vice President, Chief Operating and Financial Officer and Treasurer -10- EX-27 2
5 WORLD COLOR PRESS, INC. FINANCIAL DATA SCHEDULE FOR THE QUARTER ENDED MARCH 31, 1996 (DOLLARS IN THOUSANDS, EXCEPT PER SHARE DATA) THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS OF WORLD COLOR PRESS, INC. AS OF AND FOR THE THREE MONTHS ENDED MARCH 31, 1996 AND IS QUALIFIED IN ITS ENTIRETY BY REFERENCE TO SUCH FINANCIAL STATEMENTS. 1,000 3-MOS DEC-29-1996 MAR-31-1996 10,911 0 216,479 0 111,651 375,995 935,657 459,479 1,127,233 222,616 425,650 0 0 337 373,308 1,127,233 329,111 329,111 276,825 276,825 0 0 10,084 9,898 3,959 5,939 0 0 0 5,939 0.17 0.17
-----END PRIVACY-ENHANCED MESSAGE-----