<PAGE>
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 JUNE 30, 2000
OR
[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
Commission file number 333-58223
DIAMOND BRANDS OPERATING CORP.
(Exact name of registrant as specified in its charter)
DELAWARE 411905675
(State or other jurisdiction of (IRS Employer
incorporation or organization) Identification No.)
1800 CLOQUET AVENUE 55720
CLOQUET, MINNESOTA
(Address of principal executive offices) (Zip Code)
(218) 879-6700
(Registrant's telephone number, including area code)
Securities registered pursuant to Section 12(b) of the Act: None
Securities registered pursuant to Section 12(g) of the Act: None
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 for the past 90 days. Yes {x} No { }
As of August 11, 2000, 100% of the common stock of the Registrant was owned by
Diamond Brands Incorporated. There is no established public trading market for
such stock.
Documents incorporated by reference: None
<PAGE>
DIAMOND BRANDS OPERATING CORP.
TABLE OF CONTENTS
PART I - FINANCIAL INFORMATION
ITEM - 1. Financial Statements (Unaudited)
Consolidated Balance Sheets
Consolidated Statements of Operations
Consolidated Statements of Cash Flow
Notes to Consolidated Financial Statements
ITEM - 2. Management's Discussion and Analysis of Financial
Condition and Results of Operations
ITEM - 3. Quantitative and Qualitative Disclosures about
Market Risk
PART II - OTHER INFORMATION
ITEM - 6. Exhibits and Reports on Form 8-K
SIGNATURE
<PAGE>
DIAMOND BRANDS OPERATING CORP.
Consolidated Balance Sheets (Unaudited)
(In Thousands, Except Share and Per Share Amounts)
<TABLE>
<CAPTION>
June 30, December 31,
2000 1999
------------ ------------
ASSETS
<S> <C> <C>
CURRENT ASSETS:
Accounts receivable, net of allowances of $1,330 and $1,354 $ 13,272 $ 14,311
Inventories 16,991 12,084
Deferred income taxes 1,857 2,671
Prepaid expenses 592 590
Net assets from discontinued operations 426 1,589
------------ ------------
Total current assets 33,138 31,245
PROPERTY, PLANT AND EQUIPMENT, net of
accumulated depreciation of $21,415 and $20,210 17,388 16,188
GOODWILL 24,021 24,381
DEFERRED INCOME TAXES 5,395 5,395
DEFERRED FINANCING COSTS 5,621 6,085
------------ ------------
$ 85,563 $ 83,294
============ ============
LIABILITIES AND STOCKHOLDERS' DEFICIT
CURRENT LIABILITIES:
Current maturities of long-term debt $ 5,000 $ 4,625
Accounts payable 7,592 5,768
Accrued expenses 10,835 8,826
------------ ------------
Total current liabilities 23,427 19,219
POSTRETIREMENT BENEFIT OBLIGATIONS 1,497 1,497
LONG-TERM DEBT, net of current maturities 170,750 173,000
------------ ------------
Total liabilities 195,674 193,716
------------ ------------
COMMITMENTS AND CONTINGENCIES
STOCKHOLDERS' DEFICIT:
Common stock, $.01 par value; 1,000 shares authorized;
1,000 shares issued and outstanding 1 1
Accumulated deficit (110,112) (110,423)
------------ ------------
Total stockholders' deficit (110,111) (110,422)
------------ ------------
$ 85,563 $ 83,294
============ ============
</TABLE>
The accompanying notes are an integral part of these consolidated
balance sheets.
<PAGE>
DIAMOND BRANDS OPERATING CORP.
Consolidated Statements of Operations (Unaudited)
(In Thousands)
<TABLE>
<CAPTION>
Three Months Ended Six Months Ended
June 30, June 30,
------------------------------------------------------
2000 1999 2000 1999
------------ ------------ ------------ ------------
<S> <C> <C> <C> <C>
NET SALES $ 27,419 $ 29,620 $ 50,701 $ 51,886
COST OF SALES 18,819 18,462 33,926 32,368
------------ ------------ ------------ ------------
Gross profit 8,600 11,158 16,775 19,518
SELLING, GENERAL AND ADMINISTRATIVE EXPENSES 2,674 3,398 5,825 6,407
GOODWILL AMORTIZATION 180 180 360 360
------------ ------------ ------------ ------------
Operating income 5,746 7,580 10,590 12,751
INTEREST EXPENSE 4,624 4,799 8,915 9,146
------------ ------------ ------------ ------------
Income from continuing operations before provision
for income taxes 1,122 2,781 1,675 3,605
PROVISION FOR INCOME TAXES 520 1,184 813 1,584
------------ ------------ ------------ ------------
Income from continuing operations 602 1,597 862 2,021
DISCONTINUED OPERATIONS (Note 2):
Loss from discontinued operations, net of income tax
benefit of $0, $593, $0 and $956, respectively -- 892 -- 1,436
------------ ------------ ------------ ------------
Net income $ 602 $ 705 $ 862 $ 585
============ ============ ============ ============
</TABLE>
The accompanying notes are an integral part of these consolidated financial
statements.
<PAGE>
DIAMOND BRANDS OPERATING CORP.
Consolidated Statements of Cash Flows (Unaudited)
(In Thousands)
<TABLE>
<CAPTION>
Six Months Ended
June 30,
----------------------------
2000 1999
------------ -------------
<S> <C> <C>
OPERATING ACTIVITIES:
Net income $ 862 $ 585
Net assets of discontinued operations 1,163 (1,043)
Adjustments to reconcile net income to net cash provided by (used for)
operating activities from continuing operations-
Depreciation and amortization 2,028 1,913
Deferred income taxes 814 628
Change in operating assets and liabilities-
Accounts receivable 1,039 (3,710)
Inventories (4,907) (728)
Prepaid expenses (2) (443)
Accounts payable 1,824 (427)
Accrued expenses 2,009 (35)
------------ ------------
Net cash provided by (used for) operating activities of
continuing operations 4,830 (3,260)
------------ ------------
INVESTING ACTIVITIES:
Purchases of property, plant and equipment (2,404) (1,890)
------------ ------------
Net cash used for investing activities of continuing operations (2,404) (1,890)
------------ ------------
FINANCING ACTIVITIES:
Borrowings under bank revolving line of credit 11,750 9,400
Repayments of bank revolving line of credit (11,500) (3,000)
Repayments of long-term debt (2,125) (1,000)
Distributions to Holdings (551) --
Debt issuance costs -- (250)
------------ ------------
Net cash provided by (used for) financing activities of
continuing operations (2,426) 5,150
------------ ------------
NET INCREASE IN CASH AND CASH EQUIVALENTS -- --
CASH AND CASH EQUIVALENTS, beginning of period -- --
------------ ------------
CASH AND CASH EQUIVALENTS, end of period $ -- $ --
============ ============
SUPPLEMENTAL CASH FLOW INFORMATION:
Cash paid during the year for-
Interest $ 8,567 $ 9,130
============ ============
Income taxes $ -- $ 7
============ ============
</TABLE>
The accompanying notes are an integral part of these consolidated financial
statements.
<PAGE>
DIAMOND BRANDS OPERATING CORP.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)
1. BASIS OF PRESENTATION
The accompanying consolidated financial statements include the accounts of
Diamond Brands Operating Corp. ("Operating Corp") and Operating Corp.'s
wholly owned subsidiaries, Forster Inc. and Empire Candle, Inc. (Empire)
after elimination of all material intercompany balances and transactions.
Operating Corp. and its subsidiaries are collectively referred to as "the
Company". Diamond Brands Operating Corp. is a wholly owned subsidiary of
Diamond Brands Incorporated ("Holdings")
The consolidated financial statements have been restated to reflect the
candle operation as a discontinued operation as further discussed in
Note 2.
The Company is a leading manufacturer and marketer of a broad range of
consumer products including wooden matches, toothpicks, clothespins and
wooden crafts and plastic cutlery and straws. The Company's products are
marketed primarily in the United States and Canada under the nationally
recognized Diamond and Forster brand names
The interim consolidated financial statements of the Company are
unaudited; however, in the opinion of management, all adjustments
necessary for a fair presentation of such consolidated financial
statements have been reflected in the interim periods presented. The
significant accounting policies and certain financial information which
are normally included in financial statements prepared in accordance with
accounting principles generally accepted in the United States, but which
are not required for interim reporting purposes, have been condensed or
omitted. The accompanying consolidated financial statements of the Company
should be read in conjunction with the consolidated financial statements
and related notes included in the Company's Annual Report on Form 10-K.
2. DISCONTINUED OPERATIONS
Effective September 30, 1999, the board of directors of the Company
approved the divestiture of the candle operations of the Company and
recorded a total charge for the loss from discontinued operations of
approximately $18,500,000, net of tax. For segment reporting purposes, the
candle operations were previously reported as the candles reportable
segment.
On December 14, 1999, the Company entered into an agreement for purchase
and sale of the assets of Empire. The agreement provided for the sale of
certain assets and liabilities of Empire for a total consideration of
approximately $2,900,000. The sale resulted in a decrease of the net loss
on disposal of discontinued operations of $2,300,000, net of tax, during
the fourth quarter of 1999.
Net sales from discontinued operations were $0 and approximately
$7,800,000 for the six months ended June 30, 2000 and 1999, respectively
<PAGE>
3. LONG TERM DEBT
In April 1998, the Company completed an offering of $100.0 million of
10 1/8% senior subordinated notes due 2008. The net proceeds to the
Company for the offering, after discounts, commissions and other
offering costs were $95.4 million and were used to repay existing
indebtedness and purchase common stock of the Company. The senior
subordinated notes are fully and unconditionally guaranteed on a senior
subordinated basis, jointly and severally, by all of Operating Corp.'s
direct and indirect subsidiaries (the "Subsidiary Guarantors"). The
Subsidiary Guarantors are Forster, Inc. and Empire Candle, Inc. Separate
financial statements of the Subsidiary Guarantors are not presented
because management has determined that they are not material to
investors. In lieu of the separate guarantor financial statements,
summarized consolidating financial information of Holdings/Operating
Corp. and the Subsidiary Guarantors are presented below (in thousands):
AS OF JUNE 30, 2000
<TABLE>
<CAPTION>
Operating Subsidiary Consolidated
Corp Guarantor (1) Eliminations Total
-------------------------------------------------------------
<S> <C> <C> <C> <C>
Balance sheet data:
Current assets $ 15,639 $ 17,499 -- $ 33,138
Non current assets 97,875 12,255 (57,705) 52,425
Current liabilities 52,269 6,639 (35,481) 23,427
Non current liabilities 171,356 891 -- 172,247
Stockholders' equity (deficit) (110,111) 22,224 (22,224) (110,111)
</TABLE>
SIX MONTHS ENDED JUNE 30, 2000
<TABLE>
<S> <C> <C> <C> <C>
Statement of operations data:
Net sales $ 17,304 $ 33,397 -- $ 50,701
Gross profit 5,733 11,042 -- 16,775
Operating income 3,385 7,205 -- 10,590
Income from continuing operations 176 686 -- 862
Loss from discontinued operations -- -- -- --
Equity in earnings of subsidiaries 686 -- (686) --
Net Income 862 686 (686) 862
</TABLE>
AS OF DECEMBER 31, 1999
<TABLE>
<S> <C> <C> <C> <C>
Balance sheet data:
Current assets $ 17,572 $ 13,673 -- $ 31,245
Noncurrent assets 93,926 15,142 (57,019) 52,049
Current liabilities 48,314 3,618 (32,713) 19,219
Non current liabilities 173,606 891 -- 174,497
Stockholders' equity (deficit) (110,422) 24,306 (24,306) (110,422)
</TABLE>
SIX MONTHS ENDED JUNE 30, 1999
<TABLE>
<S> <C> <C> <C> <C>
Statement of operations data:
Net sales $ 17,094 $ 34,792 -- $ 51,886
Gross profit 5,435 14,083 -- 19,518
Operating income 2,965 9,786 -- 12,751
</TABLE>
<PAGE>
<TABLE>
<S> <C> <C> <C> <C>
Income (loss) from continuing operations (27) 2,048 -- 2,021
Loss from discontinued operations -- 1,436 -- 1,436
Equity in earnings of subsidiaries 612 -- (612) --
Net Income 585 612 (612) 585
</TABLE>
(1) Summarized financial information of the Subsidiary Guarantors includes the
results of operations for Empire Candle, Inc. as loss from discontinued
operations (see Note 2). Current assets of the Subsidiary Guarantors
included net assets of discontinued operations of $426 and $1,589 as of
June 30, 2000, and December 31, 1999, respectively.
The senior credit agreement was amended on March 5, 1999, allowing for
certain non-recurring expenses totaling $6.0 million to be excluded in the
calculation of EBITDA on or before the third quarter of 1999. The
amendment also adjusted the Minimum Fixed Charge Coverage Ratio, Maximum
Leverage Ratio and Interest Coverage Ratio for the next eight quarters.
The Company was in compliance with all covenants as of June 30, 2000.
4. SEGMENT REPORTING
In 1998, the Company adopted SFAS No. 131, "Disclosures about Segments of
an Enterprise and Related Information." The Company has one reportable
segment, consumer products, after the sale of the Company's candle
operations (see Note 2). The consumer product segment consists of plastic
cutlery and straws, matches, toothpicks, clothespins, wooden crafts and
various woodenware items sold primarily to grocery, mass and drug store
channels.
Detailed gross revenue by product sold was as follows for the six months
ended June 30 (in thousands):
<TABLE>
<CAPTION>
2000 1999
------------ ------------
<S> <C> <C>
Cutlery/straws $ 25,015 $ 23,592
Woodware 14,391 15,434
Wooden lights 9,207 10,973
Institutional/other 7,304 7,608
------------ ------------
Total $ 55,917 $ 57,607
============ ============
</TABLE>
<PAGE>
DIAMOND BRANDS OPERATING CORP.
Item 2. Management's Discussion and Analysis of Financial Condition and Results
of Operations.
RESULTS OF CONTINUING OPERATIONS
The Company manufactures and markets consumer products, consisting primarily of
plastic cutlery/straws, wooden matches, toothpicks, clothespins and wooden
crafts. The Company's products are marketed primarily under the nationally
recognized Diamond and Forster brand names, which have been in existence since
1881 and 1887, respectively.
The Company derives its revenue primarily from the sale of its products to
substantially all major grocery stores, drug stores, mass merchandisers and
warehouse clubs in the United States. During the six months ended June 30, 2000,
sales to the Company's top 10 customers accounted for approximately 50.2% of the
Company's gross sales, with one customer accounting for approximately 21.3% of
the Company's gross sales. The following table sets forth, for the period
indicated, certain historical statements of operations data, as well as the
Company's EBITDA and EBITDA margin, for the continuing operations of the
Company, with 1999 comparable results of continuing operations restated to
exclude discontinued operations.
<TABLE>
<CAPTION>
THREE MONTHS ENDED JUNE 30, 2000
COMPARED TO THREE MONTHS ENDED JUNE 30, 1999
2000 1999
-------- --------
(dollars in millions)
Total Total
-------- --------
<S> <C> <C>
Net Sales $ 27.4 $ 29.6
Cost of Sales 18.8 18.5
-------- --------
Gross Profit 8.6 11.1
Gross Profit % 31.4% 37.5%
Selling, General
And Administration Expense 2.7 3.4
Goodwill Amortization .2 .2
-------- --------
Operating Income (1) $ 5.7 $ 7.5
======== ========
Interest Expense $ 4.6 $ 4.8
======== ========
EBITDA (2) $ 6.5 $ 8.3
======== ========
EBITDA Margin (3) 23.7% 28.0%
======== ========
</TABLE>
(1) Excludes amortization of deferred financing costs.
(2) EBITDA represents operating income plus depreciation and amortization
(excluding amortization of deferred financing costs). The Company believes
that EBITDA provides useful information regarding the Company's ability to
service its debt; however, EBITDA does not represent cash flow from
operations as defined by generally accepted accounting principles and
should not be considered as a substitute for net income as an indicator of
the Company's operating performance or cash flow as a measure of
liquidity.
(3) EBITDA margin represents EBITDA as a percentage of net sales.
Net sales for the Company were $27.4 million for the three months ended June 30,
2000, a $2.2 million or a 7.4% decrease from net sales of $29.6 million for the
three months ended June 30, 1999. Net sales of plastic cutlery/straws increased
2.7%, but were offset by 16.2% decreased net sales in all other product lines,
including wooden matches and other woodenware products.
Gross profit was $8.6 million or 31.4% of net sales for the three months ended
June 30, 2000, compared to $11.1 million or 37.5% for the same period in 1999.
The decrease is primarily due to increased raw material costs, as continually
rising polystyrene costs and increased packaging costs adversely impacted gross
margins.
<PAGE>
Selling, general and administrative expenses were $2.7 million for the three
months ended June 30, 2000, compared to $3.4 million for the comparable 1999
period. Year 2000 remediation costs incurred in 1999 and reduced commissions
accounted for the majority of the $.7 million decrease.
RESULTS OF DISCONTINUED OPERATIONS
Effective September 30, 1999, the Board of Directors approved the divestiture of
the Candle operations of the Company and recorded a total charge from the loss
of the discontinued operations of approximately $18.5 million, net of tax. For
segment reporting purposes, the candle operations were previously reported as
the "Candles" reportable segment.
Effective December 14, 1999, the Company entered into an asset purchase
agreement to sell certain assets and liabilities of Empire for total
consideration of approximately $2.9 million. The sale resulted in a decrease of
the net loss from discontinued operations of $2.3 million, net of tax, during
the fourth quarter of 1999. There should be no impact on this year's operating
income due to the candle discontinuation.
RESULTS OF CONTINUING OPERATIONS
<TABLE>
<CAPTION>
SIX MONTHS ENDED JUNE 30, 2000
COMPARED TO SIX MONTHS ENDED JUNE 30, 1999
2000 1999
-------- --------
(dollars in millions)
Total Total
-------- --------
<S> <C> <C>
Net Sales $ 50.7 $ 51.9
Cost of Sales 33.9 32.4
-------- --------
Gross Profit 16.8 19.5
Gross Profit % 33.1% 37.6%
Selling, General
and Administration Expense 5.8 6.4
Goodwill Amortization .4 .4
-------- --------
Operating Income(1) $ 10.6 $ 12.7
======== ========
Interest Expense $ 8.9 $ 9.1
======== ========
EBITDA(2) $ 12.2 $ 14.2
======== ========
EBITDA Margin(3) 24.1% 27.4%
======== ========
</TABLE>
(1) Excludes amortization of deferred financing costs.
(2) EBITDA represents operating income plus depreciation and amortization
(excluding amortization of deferred financing costs). The Company believes
that EBITDA provides useful information regarding the Company's ability to
service its debt; however, EBITDA does not represent cash flow from
operations as defined by generally accepted accounting principles and
should not be considered as a substitute for net income as a indicator of
the Company's operating performance or cash flow as a measure of liquidity
(3) EBITDA margin represents EBITDA as a percentage of net sales..
Net sales were $50.7 million for the six months ended June 30, 2000, a $1.2
million or 2.3% decrease from net sales of $51.9 million for the six months
ended June 30, 1999. Net sales of plastic cutlery/straws increased 8.1%, but
were offset by 9.0% decreased net sales in all other product lines, including
wooden lights and other woodenware products.
<PAGE>
Gross profit was $16.8 million or 33.1% of net sales for the six months ended
June 30, 2000, compared to $19.5 million or 37.6% for the comparable 1999
period. The decrease is primarily due to increased raw material costs, as
continually rising polystyrene costs and increased packaging costs adversely
impacted gross margins.
Selling, general and administrative expenses were $5.8 million for the six
months ended June 30, 2000, compared to $6.4 million for the comparable 1999
period. Year 2000 remediation costs incurred in 1999 and reduced commissions
accounted for the majority of the decrease.
Interest expense for the six months ended June 30, 2000 was $8.9 million
compared to $9.1 million for the comparable 1999 period. Lower debt balances
compared to 1999 account for the decreased interest.
LIQUIDITY AND CAPITAL RESOURCES
The senior credit agreement was amended on March 5, 1999, allowing for certain
non-recurring expenses totaling $6.0 million to be excluded in the calculation
of EBITDA on or before the third quarter of 1999, for the purpose of calculating
covenant compliance. The amendment also adjusted the Minimum Fixed Charge
Coverage Ratio, Maximum Leverage Ratio and Interest Coverage Ratio for the next
eight quarters. The Company was in compliance with all covenants as of June 30,
2000.
The Company is highly leveraged. The Company's high degree of leverage may have
important consequences for the Company, including that (i) the ability of the
Company to obtain additional financing, if necessary, for working capital,
capital expenditures, acquisitions or other purposes may be impaired, or such
financing may not be available on terms favorable to the Company; (ii) a
substantial portion of the Company's cash flow will be used to pay the Company's
interest expense and, in the cases of indebtedness incurred in the future,
possible principal repayments, which will reduce the funds that would otherwise
be available to the Company for its operations and future business
opportunities; (iii) a substantial decrease in net operating cash flows or an
increase in expenses of the Company could make it difficult for the Company to
meet its debt service requirements and force it to modify its operations; (iv)
the Company may be more highly leveraged than its competitors, which may place
it at a competitive disadvantage; and (v) the Company's high degree of leverage
may make it more vulnerable to a downturn in its business, the general economy
or interest rate increases. Any inability of the Company to service its
indebtedness or to obtain additional financing, as needed, would have a material
adverse effect on the Company's business.
CASH FLOW - OPERATING ACTIVITIES. Cash provided by operating activities was $4.8
million for the six months ended June 30, 2000. Cash used for operating
activities was $3.3 million for the comparable 1999 period. Cash used for
inventory was $4.2 million higher while cash provided by accounts receivable,
accounts payable and other accrued expenses was $9.5 million higher during the
six months ended June 30, 2000, than the comparable period in 1999.
CASH FLOW - INVESTMENT ACTIVITIES. Capital expenditures of $2.4 million for the
six months ended June 30, 2000, were primarily used to expand capacity at the
cutlery plant. Planned annual capital expenditures for 2000 are $3.2 million.
Capital expenditures for the comparable period in 1999 were $1.9 million.
CASH FLOW - FINANCING ACTIVITIES. Cash used for financing activities was $2.4
million for the six months ended June 30, 2000, as compared to cash used for
financing activities of $5.2 million for the same period prior year. Line of
credit net borrowings were $.25 million for the six months ended June 30, 2000,
compared to $5.4 million for the same period in 1999.
CAUTIONARY STATEMENT FOR PURPOSES OF THE "SAFE HARBOR" PROVISIONS OF THE PRIVATE
SECURITIES LITIGATION REFORM ACT OF 1995
<PAGE>
This document contains statements that constitute forward-looking statements
within the meaning of the Private Securities Litigation Reform Act of 1995. When
used in this document, the words "anticipates," "plans," "believes,"
"estimates," "expects," and similar expressions are intended to identify
forward-looking statements. Such forward-looking statements involve known and
unknown risks, uncertainties and other factors which may cause the actual
results, performance or achievements of the Company to be materially different
from any future results, performance or achievements expressed or implied by
such forward-looking statements. Such factors include, but are not limited to:
the Company's highly leveraged capital structure, its substantial principal
repayment obligations, price and product changes and promotional activity by
competitors, the loss of a significant customer, the difficulties of integrating
acquisitions, adverse publicity and product liability claims and dependence on
key employees. The risk factors described herein could cause actual results or
outcomes to differ materially from those expressed in any forward-looking
statements of the Company and investors, therefore, should not place undue
reliance on any such forward-looking statements. Further, any forward-looking
statement speaks only as of the date on which such statement is made, and the
Company undertakes no obligation to update any forward-looking statement or
statements to reflect events or circumstances after the date on which such
statement is made or to reflect the occurrence of unanticipated events. New
factors emerge from time to time, and it is not possible for management to
predict all such factors. Further, management cannot assess the impact of each
such factor on the Company's business or the extent to which any factor, or
combination of factors, may cause actual results to differ materially from those
contained in any forward-looking statements.
ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK
There were no material changes in reported market risks since December 31, 1999.
See discussion at Item 7A in the Company's annual report on Form 10-K.
ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K
(a) Reports on Form 8-K
No reports on Form 8-K were filed by the company during the quarter ended
June 30, 2000.
(b) Exhibits
Exhibit 27 is filed as part of this quarterly report.
<PAGE>
SIGNATURE
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.
DIAMOND BRANDS OPERATING CORP. (Registrant)
By: /s/ Frank Chalk
----------------------------------
Frank Chalk, Vice President
of Finance and Chief Financial Officer
(authorized officer, principal financial and
accounting officer)
Date: August 11, 2000
