FORM 10-Q
SECURITIES AND EXCHANGE COMMISSION
Washington, DC 20549
(Mark One)
(X) QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended September 30, 1996
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 1-4684
Blessings Corporation
(Exact name of registrant as specified in its charter)
Delaware 13-5566477
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
200 Enterprise Drive, Newport News, VA 23603
(Address of principal executive offices)
(Zip Code)
757 887 2100
(Registrant's telephone number, including area code)
None
(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 (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
Indicate the number of shares outstanding of each of the issuer's classes
of common stock, as of the latest practicable date.
Class Outstanding as of November 1, 1996
Common stock, $.71 par value 10,134,504
<PAGE>
BLESSINGS CORPORATION
INDEX
PAGE NUMBER
PART I: FINANCIAL INFORMATION
Item 1. Financial Statements
Consolidated Condensed Balance Sheets
September 30, 1996 and December 30, 1995
1
Consolidated Condensed Statements of
Earnings - three and nine months ended
September 30, 1996 and twelve and forty
weeks ended October 7, 1995 2
Consolidated Condensed Statements of
Cash Flows - three and nine months
ended September 30, 1996 and twelve
and forty weeks ended October 7, 1995 3
Notes to Consolidated Condensed
Financial Statements 4
Review by Independent Certified
Public Accountants 8
Independent Accountants' Report 9
Letter in Lieu of Consent of
Independent Public Accountants 10
Item 2. Management's Discussion and Analysis
of Financial Condition and Results
of Operations 11
PART II: OTHER INFORMATION
Item 2. Changes in Securities 14
Item 6. Exhibits and Reports on Form 8-K 15
<PAGE>
PART I. FINANCIAL INFORMATION
BLESSINGS CORPORATION AND SUBSIDIARIES
CONSOLIDATED CONDENSED BALANCE SHEETS
September 30, December 30,
1996 1995*
------------------ -----------------
(Unaudited) (Audited)
ASSETS
Current Assets:
Cash & cash equivalents $ 4,774,100 $ 3,316,900
Accounts receivable less allowance for
doubtful accounts of $1,397,700 &
$1,172,600 23,050,700 21,134,500
Inventories 11,345,700 9,439,100
Prepaid deferred taxes 878,200 878,200
Prepaid expenses 934,900 943,400
------------- -------------
Total Current Assets 40,983,600 35,712,100
------------- -------------
Property, plant and equipment less
accumulated depreciation & amortization
of $41,604,800 & $34,996,500 77,587,300 69,148,100
Goodwill net of accumulated amortization
of $2,394,500 and $1,599,300 24,110,800 24,906,000
Deferred taxes 4,243,900 4,429,200
Other assets 1,833,100 1,898,800
------------- -------------
Total Assets $148,758,700 $136,094,200
============= =============
LIABILITIES & SHAREHOLDERS' EQUITY
Current Liabilities:
Accounts payable and accrued expenses $ 16,506,200 $ 16,284,700
Income taxes payable 1,623,200 701,200
Current installments on long-term debt 3,365,300 7,477,500
------------- -------------
Total Current Liabilities 21,494,700 24,463,400
------------- -------------
Long-term debt 35,653,700 23,747,400
Deferred taxes on income 6,733,200 7,134,700
Deferred supplemental pension liability 2,078,000 1,769,700
Minority interest 10,075,300 8,094,600
Shareholders' Equity:
Common stock 7,252,500 7,252,500
Additional paid in capital 6,012,900 6,174,900
Translation loss (5,792,800) (6,070,800)
Retained earnings 66,062,400 64,678,300
------------- -------------
73,535,000 72,034,900
Common stock in treasury at cost (811,200) (1,150,500)
------------- -------------
Total Shareholders' Equity 72,723,800 70,884,400
------------- -------------
Total Liabilities and Shareholders'
Equity $148,758,700 $136,094,200
============= =============
See accompanying Notes to Consolidated Condensed Financial Statements.
*The balance sheet at December 30, 1995 has been taken from audited Financial
Statements at that date, and condensed.
<PAGE>
<TABLE>
<CAPTION>
BLESSINGS CORPORATION AND SUBSIDIARIES
CONSOLIDATED CONDENSED STATEMENTS OF EARNINGS
(Unaudited)
3 Months Ended 12 Weeks Ended 9 Months Ended 40 Weeks Ended
September 30, 1996 October 7, 1995 September 30, 1996 October 7, 1995
--------------------- ------------------ -------------------- ------------------
Continuing Operations:
<S> <C> <C> <C> <C>
Net sales $40,008,000 $36,767,700 $115,794,700 $120,553,300
------------- ------------ -------------- -------------
Cost of sales 30,162,600 27,731,800 82,855,200 86,047,600
Selling, general and administrative 7,029,200 6,252,800 20,518,400 18,990,600
Foreign exchange loss 75,800 331,000 241,100 3,268,700
Interest & dividends - net 636,800 712,100 2,010,500 1,928,900
------------- ------------- --------------- -------------
Total costs and expenses 37,904,400 35,027,700 105,625,200 110,235,800
------------- ------------- --------------- -------------
Earnings from operations before provision for
taxes on income and minority interest 2,103,600 1,740,000 10,169,500 10,317,500
------------- ------------- --------------- -------------
Taxes on income
Current 1,658,300 671,400 4,404,200 4,576,300
Deferred (1,162,400) 241,800 (336,200) 282,500
------------ ------------ -------------- -------------
Total taxes 495,900 913,200 4,068,000 4,858,800
------------ ------------ -------------- -------------
Minority interest in net income of subsidiary 430,400 414,800 1,671,900 1,329,400
------------ ------------ -------------- -------------
Net earnings $ 1,177,300 $ 412,000 $ 4,429,600 $ 4,129,300
============ ============ ============== ==============
Average number of shares of common
stock outstanding 10,159,871 10,126,421 10,154,754 10,169,648
============ ============ ============== ==============
Common stock outstanding at close of period 10,142,604 10,123,888 10,142,604 10,123,888
============ ============ ============== ==============
Net earnings per share $ .12 $ .05 $ .44 $ .41
============ ============ ============== ==============
Dividends per share $ .10 $ .10 $ .30 $ .30
============ ============ ============== ==============
See accompanying Notes to Consolidated Condensed Financial Statements.
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
BLESSINGS CORPORATION & SUBSIDIARIES
CONSOLIDATED CONDENSED STATEMENTS OF CASH FLOWS
3 Months Ended 12 Weeks Ended 9 Months Ended 40 Weeks Ended
September 30, 1996 October 7, 1995 September 30, 1996 October 7, 1995
----------------- ------------------- --------------------- ------------------
Cash flows from operating activities:
<S> <C> <C> <C> <C>
Net earnings from operations $ 1,177,300 $ 412,000 $ 4,429,600 $ 4,129,300
Adjustments to reconcile net income to net cash
provided by operating activities:
Depreciation and amortization 2,610,200 1,924,400 7,126,600 6,242,700
Amortization - goodwill 265,000 265,000 795,100 795,100
Amortization - other 4,000 6,700 10,000 21,800
Minority interest in net income of con-
solidated subsidiary 430,400 414,800 1,671,900 1,329,400
Provision for losses on accounts receivable 180,000 106,200 360,000 419,200
(Gain) loss on sale of assets 71,000 (700) 49,400 (4,300)
Change in assets and liabilities:
(Increase) decrease in accounts receivable (1,734,700) (863,900) (2,231,300) (1,442,500)
(Increase) decrease in inventories 832,500 2,033,000 (1,894,600) 3,548,300
(Increase) decrease in prepaid expenses 349,700 (296,500) 9,000 565,900
Increase (decrease) in accounts payable
& accrued expenses 1,374,800 4,200,500 23,700 (1,382,500)
Increase (decrease) in taxes on income 957,600 (1,253,700) 1,450,800 (1,236,300)
Increase (decrease) in deferred taxes
on income (1,034,000) 239,500 (405,300) 601,700
(Increase) decrease in other assets (330,100) (87,600) (357,500) (744,400)
Increase (decrease) in other liabilities 207,400 (26,300) 337,200 (20,600)
------------- -------------- -------------- --------------
Net cash prov. (req.) by operating activities 5,361,100 7,073,400 11,374,600 12,822,800
------------- -------------- -------------- --------------
Cash flows from investing activities:
Proceeds from disposition of fixed assets 19,100 601,200 50,000 1,064,700
Capital expenditures (6,751,200) (3 686,700) (15,028,400) (9,524,100)
Decrease in notes receivable 25,000 -- 25,000 --
------------- -------------- -------------- --------------
Net cash required by investing activities (6,707,100) (3,085,500) (14,953,400) (8,459,400)
------------- -------------- -------------- --------------
Cash flows from financing activities:
Short-term borrowings -- (428,100) 2,078,200 3,971,900
Reduction of long-term debt (914,200) (1,823,400) (14,185,100) (6,838,400)
Proceeds from issuance of long-term debt -- -- 20,000,000 --
Issuance of common stock under stock
option plan -- -- -- 30,800
Issuance and acquisition of treasury stock
- net (237,500) (343,200) 177,300 (935,100)
Dividends paid (1,016,800) (1,015,100) (3,045,500) (3,056,400)
------------- -------------- -------------- --------------
Net cash prov. (req.) by financing activities (2,168,500) (3,609,800) 5,024,900 (6,827,200)
------------- -------------- -------------- --------------
Effect of exchange rate changes on cash 6,700 (68,300) 11,100 (1,172,400)
------------- -------------- -------------- --------------
Net incr. (decr.) in cash and cash equivalents (3,507,800) 309,800 1,457,200 (3,636,200)
Cash and cash equivalents at beginning of period 8,281,900 3,029,800 3,316,900 6,975,800
------------- -------------- -------------- --------------
Cash and cash equivalents at end of period $ 4,774,100 $ 3,339,600 $ 4,774,100 $ 3,339,600
============= ============== ============== ==============
See accompanying Notes to Consolidated Condensed Financial Statements.
</TABLE>
<PAGE>
BLESSINGS CORPORATION AND SUBSIDIARIES
NOTES TO CONSOLIDATED CONDENSED
FINANCIAL STATEMENTS
(See Independent Accountants' Report)
1. The consolidated condensed balance sheet as of September 30, 1996, the
consolidated condensed statements of earnings for the three and nine month
periods ended September 30, 1996, and the twelve and forty week periods
ended October 7, 1995, and the consolidated condensed statements of cash
flows for the same periods then ended have been prepared by the company
without audit. The consolidated financial statements include Nacional de
Envases, S.A. de C.V. (NEPSA), the company's 60% owned Mexican subsidiary.
In the opinion of management, all adjustments (consisting only of normal
recurring accruals) necessary to present fairly the financial position,
results of operations and cash flows at September 30, 1996, and for all
periods presented have been made. The company considers all highly liquid
debt instruments purchased with a maturity of three months or less to be
cash equivalents. For accounting policies, see Notes to Consolidated
Financial Statements in the company's Annual Report to Shareholders for the
fiscal year ended December 30, 1995.
2. Effective with the beginning of the current year, the company changed its
accounting periods from four weeks to one month each with the fiscal year
now being a calendar year. Accordingly, under the new calendar year, the
company's quarters are each comprised of three calendar months of thirteen
weeks each ending March 31, June 30, September 30, and December 31.
Formerly, the company's first quarter was comprised of sixteen weeks, and
the remaining three quarters were each comprised of twelve weeks.
Therefore, the quarter ending October 7, 1995 consisted of twelve weeks
compared to the quarter ending September 30, 1996 which is comprised of
thirteen weeks. Year-to-date amounts in 1996 consist of nine months or
thirty-nine weeks, while year-to-date amounts in 1995 consisted of forty
weeks. Due to the relative similarity of the two periods in 1995 and 1996,
last year's results were not recast.
3. The company translates foreign currency financial statements by translating
balance sheet accounts at the current exchange rate and income statement
accounts at the average exchange rate for the quarter. Translation gains
and losses are recorded in shareholders' equity, and transaction gains and
losses are reflected in income.
<PAGE>
4. The results of operations for the nine months ended September 30, 1996 are
not necessarily indicative of the results to be expected for the full year.
5. Inventories September 30, 1996 December 30, 1995
Raw Materials $ 8,269,200 $ 6,377,600
Finished Goods 3,076,500 3,061,500
------------ ------------
$ 11,345,700 $ 9,439,100
============ ============
Inventories are stated at the lower of cost or market. The cost of
inventories is determined by the first-in, first-out method (FIFO).
6. Long-term debt:
September 30,1996 December 30, 1995
--------------------- -------------------
Long-term debt consists of the following:
Georgia Loan $ -- $ 2,250,000
Virginia Loan -- 2,700,000
6.55% Note due 2002 10,000,000 --
7.22% Note due 2008 10,000,000 --
NEPSA Credit Agreement 17,968,700 20,312,500
Revolving Credit -- 3,000,000
Mexico Bank Loans 1,050,300 2,962,400
------------ ------------
$ 39,019,000 $ 31,224,900
Less installments due
within one year 3,365,300 7,477,500
------------ ------------
Due after one year $ 35,653,700 $ 23,747,400
============ ============
For further details, see Note 6 of the Annual Report to Shareholders for
the fiscal year ended December 30, 1995.
<PAGE>
7. Shareholders' Equity
During the nine months ended September 30, 1996, shareholders' equity
increased as follows:
Net earnings $ 4,429,600
Dividends declared (3,045,500)
Issuance of common stock under stock
option plan --
Issuance and acquisition of treasury
stock - net 177,300
Translation gain 278,000
-----------
Total increase in shareholders' equity $ 1,839,400
===========
8. Interest and Dividends - Net
3 Months Ended 12 Weeks Ended
September 30,1996 October 7, 1995
----------------- ----------------
Interest expense $ 888,600 $ 813,000
Interest income (251,800) (100,900)
Total interest and --------- ----------
dividends - net $ 636,800 $ 712,100
========= ==========
9 Months Ended 40 Weeks Ended
September 30, 1996 October 7, 1995
------------------ ---------------
Interest expense $2,789,900 $2,413,500
Interest income (763,400) (484,600)
Dividend income (16,000) --
Total interest and ---------- ----------
dividends - net $2,010,500 $1,928,900
========== ==========
9. During the three and nine month periods ending September 30, 1996, the
effective tax rate was 23.6% and 40.0% respectively compared to 52.5% and
47.1% respectively during the twelve and forty week periods ending October
7, 1995. Income taxes have been computed based on the estimated annual
effective tax rate.
10. The purchase of NEPSA on July 5, 1994, resulted in $26,505,300 of goodwill.
This amount is being amortized on a straight-line basis over its estimated
life of 25 years.
11. Cash payments for interest and income taxes were:
3 Months Ended 12 Weeks Ended
September 30, 1996 October 7, 1995
------------------ ---------------
Interest $1,130,100 $ 760,100
Income tax $ 823,700 $1,886,400
9 Months Ended 40 Weeks Ended
September 30, 1996 October 7, 1995
------------------ ---------------
Interest $2,415,000 $2,391,200
Income tax $5,082,900 $5,505,600
<PAGE>
REVIEW BY
INDEPENDENT CERTIFIED PUBLIC ACCOUNTANTS
The Consolidated Condensed Financial Statements as of September 30, 1996 and
for the three and nine month periods then ended have been reviewed prior to
filing by Deloitte & Touche LLP, Independent Certified Public Accountants,
in accordance with established professional standards and procedures for
such a review.
The report of Deloitte & Touche LLP commenting upon their review is included as
Part I - Exhibit 1.
<PAGE>
Independent Accountants' Report
To the Board of Directors
Blessings Corporation
Newport News, Virginia
We have reviewed the accompanying consolidated condensed balance sheet of
Blessings Corporation and subsidiaries as of September 30, 1996, and the related
consolidated condensed statements of earnings and cash flows for the three and
nine months ended September 30, 1996 and the twelve and forty weeks ended
October 7, 1995. These financial statements are the responsibility of the
Corporation's management.
We conducted our review in accordance with standards established by the American
Institute of Certified Public Accountants. A review of interim financial
information consists principally of applying analytical procedures to financial
data and of making inquiries of persons responsible for financial and accounting
matters. It is substantially less in scope than an audit conducted in accordance
with generally accepted auditing standards, the objective of which is the
expression of an opinion regarding the financial statements taken as a whole.
Accordingly, we do not express such an opinion.
Based on our review, we are not aware of any material modifications that should
be made to such consolidated condensed financial statements for them to be in
conformity with generally accepted accounting principles.
We have previously audited, in accordance with generally accepted auditing
standards, the consolidated balance sheet of Blessings Corporation and
subsidiaries as of December 30, 1995, and the related consolidated statements of
earnings, shareholders' equity, and cash flows for the year then ended (not
presented herein) and in our report dated February 20, 1996, we expressed an
unqualified opinion on those consolidated financial statements. In our opinion,
the information set forth in the accompanying consolidated condensed balance
sheet as of December 30, 1995 is fairly stated, in all material respects, in
relation to the consolidated balance sheet from which is has been derived.
Deloitte & Touche LLP
Richmond, Virginia
October 23, 1996
<PAGE>
October 23, 1996
Board of Directors
Blessings Corporation
Newport News, Virginia
We have made a review, in accordance with standards established by the American
Institute of Certified Public Accountants, of the unaudited interim financial
information of Blessings Corporation and subsidiaries for the three and nine
months ended September 30, 1996 and the twelve and forty weeks ended October 7,
1995, as indicated in our report dated October 23, 1996; because we did not
perform an audit, we expressed no opinion on that information.
We are aware that our report referred to above, which is included in your
Quarterly Report on Form 10-Q for the quarter ended September 30, 1996, is
incorporated by reference in the Registration Statement (Post-Effective
Amendment Number 11 to Form S-8 on Form S-3).
We also are aware that the aforementioned report, pursuant to Rule 436(c) under
the Securities Act, is not considered a part of the Registration Statement
prepared or certified by an accountant or a report prepared or certified by an
accountant within the meaning of Sections 7 and 11 of that Act.
Deloitte & Touche, LLP
Richmond, Virginia
<PAGE>
<TABLE>
<CAPTION>
MANAGEMENT'S DISCUSSION AND ANALYSIS
OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
SUMMARY:
The following tables set forth for the period indicated 1) the amounts and
percentages which certain items reflected in the financial data bear to net
sales of the Company and 2) the percentage increase (decrease) of such items as
compared to the indicated prior period:
Relationship to Net Sales Percent
Period Ended Increase/(Decrease)
______________________________________________________________________________ ___________________
3 Months Ended 12 Weeks Ended
September 30, 1996 Percent October 7, 1995 Percent 1996/1995
------------------ ------- --------------- ------- ---------
<S> <C> <C> <C> <C> <C>
Net Sales $40,008,000 100.0 $36,767,700 100.0 8.8
Cost of sales 30,162,600 75.4 27,731,800 75.4 8.8
----------- ----- ----------- -----
Gross margin 9,845,400 24.6 9,035,900 24.6 9.0
Other costs and
expenses 7,741,800 19.4 7,295,900 19.8 6.1
----------- ----- ----------- -----
Earnings from operations
before taxes on income
and minority interest 2,103,600 5.3 1,740,000 4.7 20.9
Taxes on income 495,900 1.2 913,200 2.5 (45.7)
----------- ----- ----------- -----
Minority interest in net
income of subsidiary 430,400 1.1 414,800 1.1 3.8
----------- ----- ----------- -----
Net earnings $ 1,177,300 2.9 $ 412,000 1.1 185.8
=========== ===== =========== ===== ========
</TABLE>
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<TABLE>
<CAPTION>
MANAGEMENT'S DISCUSSION AND ANALYSIS
OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
Relationship to Net Sales Percent
Period Ended Increase/(Decrease)
_____________________________________________________________________________ ___________________
9 Months Ended 40 Weeks Ended
September 30, 1996 Percent October 7, 1995 Percent 1996/1995
------------------ ------- --------------- ------- ---------
<S> <C> <C> <C> <C> <C>
Net Sales $115,794,700 100.0 $120,553,300 100.0 (3.9)
Cost of sales 82,855,200 71.6 86,047,600 71.4 (3.7)
------------ ----- ------------ -----
Gross margin 32,939,500 28.4 34,505,700 28.6 (4.5)
Other costs and
expenses 22,770,000 19.7 24,188,200 20.1 (5.9)
------------ ----- ------------ -----
Earnings from operations
before taxes on income
and minority interest 10,169,500 8.8 10,317,500 8.6 (1.4)
Taxes on income 4,068,000 3.5 4,858,800 4.0 (16.3)
------------ ----- ------------ -----
Minority interest in net
income of subsidiary 1,671,900 1.4 1,329,400 1.1 25.8
------------ ----- ------------ -----
Net earnings $ 4,429,600 3.8 $ 4,129,300 3.4 7.3
============ ===== ============ ===== =======
</TABLE>
<PAGE>
Safe Harbor Statement under the Private Securities Litigation Reform Act of
1995: Except for the historical information contained herein, the matters
discussed in this quarterly report are forward-looking statements which involve
risks and uncertainties, including but not limited to economic, competitive,
governmental, legal and technological factors affecting the company's
operations, markets, products, services and prices, and other factors discussed
in the company's filings with the Securities and Exchange Commission.
RESULTS OF OPERATIONS:
Net Sales:
The third quarter sales increase of $3.2 million or 8.8% was the result of
increased sales of the Edison Plastics Division. During the third quarter, 1996
the company began to realize the impact of new initiatives seeking new
directions and new markets by posting a domestic unit volume increase of more
than 22% ahead of the comparable 12 week quarter in 1995. The company's Mexican
operation, NEPSA, which continues to be hampered by the on-going recession in
that country posted a modest unit volume increase during the third quarter of
1996 compared to the same quarter in 1995.
Operating Costs and Expenses:
The gross margin percentage during the quarter was the same as last year's
results at 24.6%. However, due to increased sales, gross margin dollars
increased by approximately $800,000. Of particular significance to gross margin
is the state of the polyethylene and polypropylene prices which returned to near
record highs during the quarter. Raw material costs have now leveled and appear
once again set to decline with projections for a softening expected in 1997.
Other costs and expenses were higher in the third quarter of 1996 compared to
the third quarter of 1995 due primarily to an additional week's expense
reflected in 1996 associated with the accounting period change. See Notes to
Consolidated Condensed Financial Statements, Note 2 on page 4.
Taxes on Income:
The effective tax rate as of September 30, 1996 was 40.0% compared to 47.1%
for the same period last year. The decrease was primarily the result of a lower
effective tax rate due to an increase in the availability of tax credits in
Mexico.
Liquidity and Capital Resources:
As of September 30, 1996, the company had working capital of $19,488,900
compared to $11,248,700 at year-end, an increase of $8,240,200. The ratio of
current assets to current liabilities at the end of the quarter was 1.9 to 1 and
at year-end was 1.5 to 1. The increase in working capital was the result of the
company entering into two $10,000,000 long-term notes in connection with a Note
Purchase Agreement closed on February 2, 1996 with a major insurance company.
Part of the proceeds were used to repay existing debt leaving approximately
$12,500,000 to be used to finance major capital projects.
During the quarter, the company obtained an additional $2 million
short-term credit line from a major financial institution. The company was not
utilizing any of either its $25 million revolving credit line or its $12 million
short-term lines of credit at the end of the quarter.
PART II. OTHER INFORMATION
Item 1. LEGAL PROCEEDINGS
On September 12, 1995, a complaint was filed in the Circuit Court of the
Thirteenth Judicial Circuit in and for Hillsborough County, Florida, against the
company by John Falkner and Tom Falkner d/b/a Falkner Farm. The Plaintiffs are
seeking damages in the amount of $5,263,733, based on allegations of negligence,
breach of contract, and breach of warranty by the company with regard to the
alleged premature degradation of agricultural mulch film purchased by Falkner
Farm from the company for a purchase price of $128,960.
From the date suit was filed and currently, the company has been and is
being represented in this proceeding by Florida counsel provided by its insurer,
Travelers Indemnity Co. ("Travelers"). By letter dated September 12, 1996,
Travelers informed the company that it believes most of the claims asserted by
the Plaintiffs are not covered by its insurance policy; however, it continues to
provide representation for the company.
On October 16, 1996, the company filed a suit for Declaratory Judgment
against Travelers seeking a determination by the Court that under the terms of
the company's policy, Travelers is obligated to indemnify the company against
any cost and liability arising from the suit filed by the Plaintiffs.
The company is contesting the Plaintiffs' claims, vigorously. While the
outcome cannot be predicted with certainty, in the opinion of management and the
company's legal counsel, the resolution of these proceedings will not have a
material adverse effect on the consolidated financial position, results of
operations, or liquidity of the company.
Item 2. CHANGES IN SECURITIES
Long-term debt agreements contain various restrictive covenants limiting
the incurrence of additional indebtedness, mergers and acquisitions. The
agreements also include quarterly tests relating to the maintenance of net worth
and cash flow.
Item 6. EXHIBITS AND REPORTS ON FORM 8-K
(a) Exhibits:
Exhibit Number
- --------------
2 Stock Purchase Agreement by and Among Manuel Villarreal Castaneda, et
al, as Sellers, and Blessings Corporation, as Purchaser, dated June
30, 1994; filed with the Commission as an Exhibit to Form 8-K filed
July 8, 1994, such Exhibit is incorporated herein by reference.
3(i) Certificate of Incorporation of Blessings Corporation with all
Amendments through Amendment dated December 15, 1994; filed with the
commission as an Exhibit to Form 10K for the year ended December 31,
1994, such Exhibit is incorporated herein by reference.
3(ii)Bylaws of Blessings Corporation as amended through July 8, 1993;
filed with the Commission as an Exhibit to Form S-8 Registration
Statement filed October 15, 1993, such Exhibit is incorporated herein
by reference.
4 Not applicable
10(a)Blessings Corporation Cost Recovery Supplemental Retirement Income
Plan; filed with the commission as an Exhibit to Form 10K for the year
ended December 31, 1994, such Exhibit is incorporated herein by
reference.
10(b)Blessings Corporation 1991 Stock Option Plan; filed with the
Commission as an Exhibit to Form S-8 Registration Statement filed July
15, 1991, such Exhibit is incorporated herein by reference.
10(c)Blessings Corporation 1993 Incentive Plan; filed with the Commission
as an Exhibit to Form S-8 Registration Statement filed October 15,
1993, such Exhibit is incorporated herein by reference.
10(d)1993 Restricted Stock Plan for Non-Employee and Certain Other
Directors of Blessings Corporation; filed with the Commission as an
Exhibit to Form S-8 Registration Statement filed October 17, 1994,
such Exhibit is incorporated herein by reference.
10(e)Blessings Corporation 1993 Restricted Stock Plan for Key Employee;
filed with the Commission as an Exhibit to Form S-8 Registration
Statement filed October 17, 1994, such Exhibit is incorporated herein
by reference.
10(f)Term Loan Agreement dated August 18, 1994, between Chase Manhattan
Bank, N.A. and First Fidelity Bank, N.A., New Jersey; filed with the
commission as an Exhibit to Form 10K for the year ended December 31,
1994, such Exhibit is incorporated herein by reference.
10(g)Revolving Credit Agreement dated October 16, 1995, between Wachovia
Bank of Georgia, N.A. and First Fidelity Bank, N.A., New Jersey; filed
with the commission as an Exhibit to Form 10K for the year ended
December 30, 1995, such Exhibit is incorporated herein by reference.
10(h)Note Purchase Agreement dated February 2, 1996, between Principal
Mutual Life Insurance Company, filed with the commission as an Exhibit
to Form 10Q for the quarter ended March 31, 1996, such Exhibit is
incorporated herein by reference.
10(i)1995 Non-Employee Directors Stock Option Plan; filed with the
Commission as an Exhibit to Form S-8 Registration Statement filed
September 20, 1996, such Exhibit is incorporated herein by reference.
11 Not required - explanation of earnings per share computation is
contained in Notes to Consolidated Financial Statements
15 A report by Independent Certified Public Accountants filedin Part I.
18 Not applicable
19 Not applicable
22 Not applicable
23 Not applicable
(b) Reports on Form 8-K: There were no reports on Form 8-K for the three
months ended September 30, 1996.
<PAGE>
S I G N A T U R E S
Pursuant to the requirements of the Securities and Exchange Act of 1934, the
registrant has duly caused this to be signed on its behalf by the undersigned
thereunto duly authorized.
BLESSINGS CORPORATION
DATED: November 12, 1996 /s/Wayne A. Durboraw
_________________ _______________________________________
Wayne A. Durboraw, Controller
DATED: November 12, 1996 /s/James P. Luke
_________________ _______________________________________
James P. Luke, Executive Vice President
(Principal Financial Officer)
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<FISCAL-YEAR-END> DEC-31-1996
<PERIOD-END> SEP-30-1996
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