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SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-Q/A
AMENDMENT NO. 1
(Mark One)
[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
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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 1-4001
UNION CAMP CORPORATION
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(Exact Name of Registrant as Specified in Its Charter)
VIRGINIA 13-5652423
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(State or Other Jurisdiction of (I.R.S. Employer
Incorporation or Organization) Identification No.)
1600 VALLEY ROAD, WAYNE, NEW JERSEY 07470
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(Address of Principal Executive Offices) (Zip Code)
(201) 628-2000
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(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, and (2) has been subject to such filing requirements
for the past 90 days.
YES X NO
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69,141,424 shares of Registrant's Common Stock, Par Value $1 Per Share, were
outstanding as of the close of business on April 30, 1996.
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PART I. FINANCIAL INFORMATION
Item I. Financial Statements.
UNION CAMP CORPORATION
AND CONSOLIDATED SUBSIDIARIES
CONSOLIDATED STATEMENT OF INCOME
($ in thousands, except per share)
<TABLE>
<CAPTION>
THREE MONTHS ENDED
MARCH 31,
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1996 1995
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<S> <C> <C>
Net Sales $ 978,255 $ 1,021,146
Costs and other charges:
Cost of products sold 678,707 662,829
Selling and administrative expenses 103,499 90,634
Depreciation and cost of timber harvested 68,450 66,364
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Income from operations 127,599 201,319
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Gross interest expense 28,232 32,935
Less capitalized interest (860) (5,078)
Other (income) expense -net 3,478 1,015
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Income before income taxes and minority interest 96,749 172,447
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Income taxes:
Current 22,449 44,401
Deferred 13,349 20,340
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Total income taxes 35,798 64,741
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Minority interest (net of tax) (2,448) (2,699)
Net Income $ 58,503 $ 105,007
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Earnings per share: $ 0.85 $ 1.50
Dividends per share $ 0.45 $ 0.39
Earnings per share are computed on the basis of the average number of common
shares outstanding:
1996: 69,108,949 1995: 70,036,504
</TABLE>
See also the accompanying notes to consolidated financial statements.
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UNION CAMP CORPORATION
AND CONSOLIDATED SUBSIDIARIES
CONSOLIDATED BALANCE SHEET
($ in thousands)
<TABLE>
<CAPTION>
MARCH 31, DECEMBER 31,
1996 1995
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<S> <C> <C>
ASSETS
Cash and cash equivalents $ 28,844 $ 30,332
Receivables-net 497,771 489,967
Inventories at lower of cost or market:
Finished goods 236,057 242,732
Raw materials 109,106 109,181
Supplies 115,813 116,804
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Total inventories 460,976 468,717
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Assets held for resale 1,323 1,289
Other 36,167 43,512
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Total current assets 1,025,081 1,033,817
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Plant and equipment, at cost 6,359,985 6,304,113
Less: accumulated depreciation 2,981,986 2,918,963
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3,377,999 3,385,150
Timberlands, less cost of timber harvested 345,360 274,935
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Total property 3,723,359 3,660,085
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Other assets 178,785 144,441
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Total Assets $4,927,225 $4,838,343
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LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities $ 662,482 $ 620,113
Long-term debt 1,149,623 1,151,536
Deferred income taxes 724,169 709,850
Other liabilities and minority interest 242,099 235,152
Stockholders' equity (Shares outstanding
(1996: 69,128,053; 1995: 69,078,078) 2,148,852 2,121,692
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Total Liabilities and Stockholders' Equity $4,927,225 $4,838,343
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</TABLE>
See also the accompanying notes to consolidated financial statements.
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UNION CAMP CORPORATION
AND CONSOLIDATED SUBSIDIARIES
CONSOLIDATED STATEMENT OF CASH FLOWS
($ IN THOUSANDS)
<TABLE>
<CAPTION>
THREE MONTHS ENDED
MARCH 31,
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1996 1995
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<S> <C> <C>
Cash Provided By (Used For) Operations:
Net income $ 58,503 $105,007
Adjustments to reconcile net income
to cash provided by operations:
Depreciation, amortization, and
cost of company timber harvested 72,875 70,443
Deferred income taxes 13,349 20,340
Other 7,887 2,725
Changes in operational assets
and liabilities:
Receivables (6,769) (65,964)
Inventories 8,146 (12,709)
Other assets 4,389 (1,380)
Accounts payable, taxes and other
liabilities (17,766) 11,594
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Cash Provided By Operations 140,614 130,056
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Cash (Used For) Provided By Investment
Activities:
Capital expenditures:
Plant and equipment (53,155) (56,924)
Timberlands (74,043) (4,766)
Payments for acquired businesses (31,850) --
Proceeds from sale of businesses -- 11,083
Other (13,410) (9,786)
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(172,458) (60,393)
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Cash (Used For) Provided By Financing
Activities:
Change in short-term notes payable 82,230 (3,771)
Repayments of long-term debt (20,845) (15,460)
Dividends paid (31,103) (27,320)
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30,282 (46,551)
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Effect of exchange rate changes on cash 74 179
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Increase (decrease) in cash and cash
equivalents (1,488) 23,291
Balance at beginning of year 30,332 13,256
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Balance at end of period $ 28,844 $ 36,547
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Supplemental cash flow information:
Cash paid during the period for:
Interest (net of amount capitalized) $ 33,847 $ 34,666
Income taxes $ 7,147 $ 14,550
</TABLE>
See also the accompanying notes to consolidated financial statements.
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UNION CAMP CORPORATION
AND CONSOLIDATED SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
Note 1. The information furnished in this report is unaudited but includes
all adjustments which, in the opinion of management, are necessary for
a fair presentation of results for the interim periods reported. The
adjustments made were of a normal recurring nature.
Note 2. "Other Assets" increased by more than $34 million from year-end
1995, primarily due to a $22.5 million investment to acquire a 50%
interest in a corrugated container plant in Turkey.
Note 3. Included in "Current Liabilities" are $170 million and $90 million
of commercial paper borrowings at March 31, 1996 and year-end 1995,
respectively.
Note 4. Included in "Other Liabilities and Minority Interest" for March 31,
1996 and year-end 1995 are $71.5 million and $69.3 million,
respectively, representing the minority interest in Union Camp's 68%
owned subsidiary, Bush Boake Allen.
Note 5. Certain amounts have been reclassified for 1995 to conform with the
1996 presentation.
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MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
CONDITION AND RESULTS OF OPERATIONS
Net income for the first quarter of 1996 was $58.5 million or $.85 per share,
compared to $105.0 million or $1.50 per share for the first quarter of last
year. The significant earnings decrease reflects the continued unfavorable
pricing climate in both the domestic and export paper products markets. During
the first quarter, these markets continued to be negatively effected by a
sluggish economy and a slowing of demand due to customers adjusting their
inventory levels downward, which reduced average selling prices from the record
levels achieved in mid 1995. Operating income for the quarter was $127.6
million, a 37% decrease from the $201.3 million reported for last year's first
quarter.
Net sales for the first quarter were $978 million, 4% below the previous year's
comparable quarter. Total paper product shipments for the quarter were
approximately 854,000 tons, a 6% decline from last year's first quarter. Lower
selling prices for the company's paper and packaging products and a decline in
shipments of linerboard and corrugated containers were the primary contributors
to the decrease.
Operating income for the paper and paperboard segment was $104.7 million, a 37%
decrease from the $165.8 million reported for the first quarter of last year.
Lower average selling prices and marginally higher manufacturing costs per ton
at the company's paper mills were the primary reasons for this earnings decline.
Both the domestic and foreign paper products markets experienced a decline
towards the end of last year, due to a sluggish economy and customers working
down inventories built earlier in 1995. This trend continued into the first
quarter of this year, which negatively effected average selling prices for both
domestic and export linerboard and uncoated business papers. For the quarter,
average prices for the company's linerboard and uncoated business papers were
down 11% and 6%, respectively, compared to last year's first quarter. As a
result of the slowness in the market, the company took approximately 55,000 tons
of market-related linerboard downtime during the first quarter.
Packaging segment operating income was $12.6 million for the first quarter of
1996, compared to $21 million for last year's comparable quarter. The domestic
corrugated container operations were the primary contributors to the lower level
of earnings for the segment. Higher raw material costs and an 8% decline in
shipments from the first quarter of last year more than offset a 5% increase in
average selling prices. First quarter earnings from the company's overseas
container operations decreased substantially over last year's comparable
quarter. Earnings for the flexible packaging operations improved 21% over the
first quarter of last year, primarily attributable to overall cost reductions
and higher average selling prices.
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The company's non-paper businesses reported a 31% decrease in operating income,
compared to last year's first quarter. The wood products operations were the
primary contributors to this decline, reporting operating income of $5.4
million, 65% below the first quarter oflast year, reflecting a downward trend in
selling prices, in addition to higher wood costs for the quarter. Operating
income for the chemical segment was $17.2 million for the quarter, compared to
$17.6 million for last year's first quarter. Despite continued strong results
for the Bush Boake Allen flavor and fragrance operations, higher manufacturing
costs at the company's tall- oil-based chemical business slightly offset these
gains.
Depreciation expense increased 2% in the first quarter of 1996 from last year's
comparable period, primarily attributable to the start up of the recovery boiler
at the Savannah mill at the end of the first quarter of last year.
Cash flow from operations for the first quarter of 1996 was $140.6 million,
compared to $130.1 million for last year's comparable period. The increase was
primarily due to a decrease in working capital, partially offset by lower
earnings for the first quarter of this year. Capital expenditures for the first
quarter totaled $127.2 million, compared to $61.7 million last year. This
increase is attributable to a large timberland acquisition in early 1996. Total
debt increased $61 million during the first quarter of 1996, primarily
attributable to increased commercial paper borrowings. The ratio of long-term
debt to total capital was 28.6% at March 31, 1996, compared to 28.9% at year-end
1995.
Net working capital was $362.6 million at March 31, 1996, compared to $413.7
million at year-end 1995. The decrease in working capital was primarily
attributable to an increase in short-term commercial paper borrowings at the end
of the first quarter.
In April 1996, the company entered into a definitive agreement to acquire the
outstanding shares of The Alling & Cory Company (Alling & Cory) a paper
distribution business, for a combination of company common stock and cash
totaling approximately $89 million. Alling & Cory had net sales of $764 million
in 1995. The acquisition is subject to approval by Alling & Cory stockholders
and is expected to close mid-year 1996.
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SIGNATURES
Pursuant to the requirements of the Securities Exchange Act
of 1934, the Registrant has duly caused this amended report to be signed on its
behalf by the undersigned thereunto duly authorized.
UNION CAMP CORPORATION
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(Registrant)
Date: July 1, 1996 /S/ Dirk R. Soutendijk
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DIRK R. SOUTENDIJK
VICE PRESIDENT, GENERAL COUNSEL
AND SECRETARY
