<PAGE> 1
SECURITIES AND EXCHANGE COMMISSION
Judiciary Plaza, 450 Fifth Street, N.W.
Washington, D.C. 20549
FORM 10-Q
[ X ] QUARTERLY REPORT UNDER SECTION 13 OR 15(d)
OF THE SECURITIES EXCHANGE ACT OF 1934
FOR QUARTER ENDED JUNE 30, 1997 COMMISSION FILE NO. O-2655
OR
[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d)
OF THE SECURITIES EXCHANGE ACT OF 1934
DIXON TICONDEROGA COMPANY
- -----------------------------------------------------------------------------
(Exact name of registrant as specified in its charter)
Delaware 23-0973760
- --------------------------------- ----------------------------------
(State or other jurisdiction I.R.S. Employer
of incorporation or organization) Identification No.
195 International Parkway, Heathrow, FL 32746
- ----------------------------------------------------------------------------
(Address of principal executive offices) Zip Code
(407) 829-9000
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 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 close of the period covered by this report.
Class Outstanding as of June 30, 1997
- ---------------------------- -----------------------------------------
Common Stock $1 par value 3,340,587
<PAGE> 2
DIXON TICONDEROGA COMPANY AND SUBSIDIARIES
------------------------------------------
INDEX
-----
Page
----
PART I. FINANCIAL INFORMATION
Item 1. Financial Information
Consolidated Balance Sheets --
June 30, 1997 and September 30, 1996 3-4
Consolidated Statements of Operations -- For The
Three and Nine Months Ended June 30, 1997 and 1996 5
Consolidated Statements of Cash Flows --
For The Nine Months Ended June 30, 1997 and 1996 6-7
Notes to Consolidated Financial Statements 8-10
Item 2. Management's Discussion and Analysis of
Financial Condition and Results of Operations 11-15
PART II. OTHER INFORMATION
Item 6. Exhibits and Reports on Form 8-K 16
Signatures 17
<PAGE> 3
<TABLE>
<CAPTION>
PART I - FINANCIAL INFORMATION
Item 1. DIXON TICONDEROGA COMPANY AND SUBSIDIARIES
- ------- CONSOLIDATED BALANCE SHEETS
June 30, September 30,
1997 1996
------------ -------------
<S> <C> <C>
CURRENT ASSETS:
Cash and cash equivalents $ 2,017,791 $ 2,597,032
Receivables, less allowance for
doubtful accounts of $1,061,185
at June 30, 1997 and $1,352,411
at September 30, 1996 30,837,265 23,442,889
Inventories 34,319,806 31,460,934
Other current assets 3,275,301 3,044,796
----------- -----------
Total current assets 70,450,163 60,545,651
----------- -----------
PROPERTY, PLANT and EQUIPMENT:
Land and buildings 16,807,235 15,711,724
Machinery and equipment 16,950,960 16,537,994
Furniture and fixtures 925,354 917,222
----------- -----------
34,683,549 33,166,940
Less accumulated depreciation (19,104,660) (17,730,505)
----------- -----------
15,578,889 15,436,435
OTHER ASSETS 2,216,076 1,866,054
----------- -----------
$88,245,128 $77,848,140
=========== ===========
</TABLE>
<PAGE> 4
<TABLE>
<CAPTION>
June 30, September 30,
1997 1996
------------ -------------
<S> <C> <C>
CURRENT LIABILITIES:
Notes payable $22,301,417 $14,159,143
Current maturities of long-term debt 1,708,643 1,613,773
Accounts payable 7,321,055 5,461,348
Accrued liabilities 11,739,740 10,934,838
----------- -----------
Total current liabilities 43,070,855 32,169,102
----------- -----------
LONG-TERM DEBT 24,011,163 25,119,305
----------- -----------
DEFERRED INCOME TAXES AND OTHER 1,211,625 1,051,171
----------- -----------
MINORITY INTEREST 1,702,898 3,517,006
----------- -----------
COMMITMENTS AND CONTINGENCIES
SHAREHOLDERS' EQUITY:
Preferred stock, par $1, authorized
100,000 shares, none issued -- --
Common stock, par $1, authorized 8,000,000
shares; issued 3,574,681 shares as of
June 30, 1997, and 3,537,211 shares
as of September 30, 1996 3,574,681 3,537,211
Capital in excess of par value 2,652,949 2,489,674
Retained earnings 15,686,258 13,526,520
Cumulative translation adjustment (2,806,735) (2,669,031)
----------- -----------
19,107,153 16,884,374
Less - treasury stock, at cost
(234,094 shares at June 30, 1997, and
243,433 shares at September 30, 1996) (858,566) (892,818)
----------- -----------
18,248,587 15,991,556
----------- -----------
$88,245,128 $77,848,140
=========== ===========
</TABLE>
The accompanying notes to consolidated financial statements
are an integral part of these statements.
<PAGE> 5
<TABLE>
<CAPTION>
DIXON TICONDEROGA COMPANY AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF OPERATIONS
FOR THE THREE AND NINE MONTHS ENDED JUNE 30, 1997 AND 1996
THREE MONTHS ENDED NINE MONTHS ENDED
JUNE 30, JUNE 30,
1997 1996 1997 1996
-------- -------- -------- --------
<S> <C> <C> <C> <C>
REVENUES $36,364,351 $33,170,481 $80,579,173 $74,737,845
----------- ----------- ----------- -----------
COST AND EXPENSES:
Cost of goods sold 22,744,511 21,691,475 51,405,772 50,155,519
Selling and
administrative
expenses 9,219,048 7,797,843 22,364,472 18,905,806
Litigation and
related costs -- -- -- 2,039,000
----------- ----------- ----------- -----------
31,963,559 29,489,318 73,770,244 71,100,325
----------- ----------- ----------- -----------
OPERATING INCOME 4,400,792 3,681,163 6,808,929 3,637,520
INTEREST EXPENSE 1,037,313 923,528 2,731,908 2,328,388
----------- ----------- ----------- -----------
INCOME FROM
OPERATIONS BEFORE
INCOME TAXES AND
MINORITY INTEREST 3,363,479 2,757,635 4,077,021 1,309,132
INCOME TAXES 1,262,008 991,721 1,412,715 406,063
----------- ----------- ----------- -----------
2,101,471 1,765,914 2,664,306 903,069
MINORITY INTEREST 205,842 348,083 504,569 588,874
----------- ----------- ----------- -----------
NET INCOME $ 1,895,629 $ 1,417,831 $ 2,159,737 $ 314,195
=========== =========== =========== ===========
EARNINGS PER
COMMON SHARE $ .57 $ .44 $ .65 $ .10
=========== =========== =========== ===========
WEIGHTED AVERAGE
SHARES OUTSTANDING 3,338,814 3,242,358 3,313,443 3,210,596
=========== =========== =========== ===========
</TABLE>
The accompanying notes to consolidated financial statements
are an integral part of these statements.
<PAGE> 6
<TABLE>
<CAPTION>
DIXON TICONDEROGA COMPANY AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS
FOR THE NINE MONTHS ENDED JUNE 30, 1997 AND 1996
1997 1996
-------- --------
<S> <C> <C>
CASH FLOWS FROM OPERATING ACTIVITIES:
Net income $ 2,159,737 $ 314,195
Adjustment to reconcile net income to
net cash provided by (used in)
operating activities:
Depreciation and amortization 1,933,844 1,835,925
Deferred taxes 5,825 23,466
Provision for doubtful accounts receivable 256,624 379,063
Income attributable to currency transactions (22,645) (33,572)
Income attributable to minority interest 504,569 588,875
Changes in assets and liabilities:
Receivables, net (7,710,416) (13,085,833)
Inventories (3,011,051) (62,933)
Other current assets (323,969) (858,097)
Accounts payable and accrued liabilities 2,686,472 3,707,129
Other assets (317,834) (96,156)
----------- -----------
Net cash provided by (used in) operations (3,838,844) (7,287,938)
----------- -----------
CASH FLOWS FROM INVESTING ACTIVITIES:
Purchases of property, plant and
equipment, net (1,480,764) (3,620,732)
----------- -----------
CASH FLOWS FROM FINANCING ACTIVITIES:
Purchase of subsidiary stock (2,519,324) --
Net proceeds from notes payable 8,209,562 10,950,049
Principal reductions of long-term debt (1,015,315) (843,220)
Exercise of stock options 234,997 424,864
----------- -----------
Net cash provided by (used in)
financing activities 4,909,920 10,531,693
----------- -----------
Effect of exchange rate changes on cash (169,553) (75,276)
----------- -----------
<PAGE> 7
Net increase (decrease) in cash and
cash equivalents (579,241) (452,253)
Cash and cash equivalents,
beginning of period 2,597,032 1,513,622
----------- -----------
Cash and cash equivalents,
end of period $ 2,017,791 $ 1,061,369
=========== ===========
Supplemental Disclosures:
Cash paid during the period:
Interest (net of amount capitalized) $ 2,943,414 $ 2,001,122
Income taxes 575,764 303,698
</TABLE>
The accompanying notes to consolidated financial statements
are an integral part of these statements.
<PAGE> 8
DIXON TICONDEROGA COMPANY AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
1. BASIS OF PRESENTATION:
The condensed consolidated financial statements included herein have been
prepared by the Registrant, without audit, pursuant to the rules and
regulations of the Securities and Exchange Commission. Certain information
and footnote disclosures normally included in financial statements prepared
in accordance with generally accepted accounting principles have been
condensed or omitted pursuant to such rules and regulations, although the
Registrant believes that the disclosures are adequate to make the information
presented not misleading. It is suggested that these financial statements be
read in conjunction with the financial statements and the notes thereto
included in the Registrant's latest annual report on Form 10-K/A. In the
opinion of the Registrant, all adjustments (solely of a normal recurring
nature) necessary to present fairly the financial position of Dixon
Ticonderoga Company and subsidiaries as of June 30, 1997, and the results of
their operations and cash flows for the nine months ended June 30, 1997, and
1996, have been included. The results of operations for such interim periods
are not necessarily indicative of the results for the entire year.
Certain fiscal 1996 balances have been reclassified to conform to current
year presentation.
2. INVENTORIES:
Since amounts for inventories under the last-in, first-out (LIFO) method are
based on annual determinations of quantities and costs as of the end of the
fiscal year, the inventories at June 30, 1997 (for which the LIFO method of
accounting are used) are based on certain estimates relating to quantities
and costs as of year end. Under the first-in, first-out (FIFO) method of
accounting, these inventories would be $1,205,000 and $958,000 higher at
March 31, 1997, and September 30, 1996, respectively.
Inventories consist of (in thousands):
June 30, September 30,
1997 1996
------------ -------------
Raw materials $12,745 $12,538
Work in process 4,021 4,268
Finished goods 17,554 14,655
------- -------
$34,320 $31,461
======= =======
3. EFFECT OF CERTAIN NEW ACCOUNTING PRONOUNCEMENTS:
The Financial Accounting Standards Board (FASB) has issued Statement No. 123,
"Accounting for Stock-Based Compensation." The statement is effective for
the Company in fiscal 1997 and requires that certain specific disclosures
regarding the value of stock option grants made in fiscal 1996 and thereafter
be included in its 1997 annual report on Form 10-K. The Company did not adopt
the compensation recognition provision of the Statement, and, accordingly, it
is not expected to affect the future results of operations or financial
position of the Company. The specific disclosures required by this statement
have not been determined at this time.
<PAGE> 9
In 1997, the FASB issued Statement No. 128 "Earnings Per Share." This
statement, which is effective for the Company's first quarter of fiscal 1998,
establishes new requirements for the calculation, presentation and disclosure
of earnings per share. There will be a requirement to present two earnings
per share calculations. Basic earnings per share will be calculated on the
weighted average of shares outstanding. The second calculation, diluted
earnings per share, will be based on the weighted average of shares
outstanding plus the effects of potentially dilutive common shares. The
Company estimates that basic earnings per share would be substantially the
same as those presented for all periods. It is estimated that diluted
earnings per share would be $.03 less for the quarter and year to date 1997
periods with no change to the 1996 periods presented.
4. TRANSLATION OF FOREIGN CURRENCIES:
As of January 1, 1997, Mexico is considered as a highly inflationary economy
for the purpose of applying FASB Statement No. 52, "Foreign Currency
Translation." Translation gains and losses will therefore impact the results
of operations going forward. Foreign currency transaction gains included in
net income were approximately $23,000 and $34,000 for the periods ended June
30, 1997, and 1996, respectively.
5. ACCOUNTING FOR INCOME TAXES:
The difference between income taxes calculated at the U.S. statutory federal
income tax rate and the provision in the consolidated financial statements is
primarily due to foreign and state income taxes and other permanent items.
6. CONTINGENCIES:
The Company, in the normal course of business, is party in certain
litigation. Ongoing litigation includes a claim under New Jersey's
Environmental Clean-Up Responsibility Act (ECRA) by a 1984 purchaser of
industrial property from the Company. In April 1996, a decision was rendered
by the Superior Court of New Jersey in Hudson County finding the Company
responsible for $1.94 million in certain environmental clean-up costs
relating to this matter. Including pre-judgment interest on the damage
award, it is estimated that the Company's exposure will not exceed
approximately $3.3 million. The Company is presently pursuing other
responsible parties for indemnification and/or contribution to the payment of
this claim (including its insurance carriers and a legal malpractice action
against its former attorneys). The Company's appeal of this judgment has
been denied by the New Jersey Superior Court Appellate Division and a motion
for reconsideration of this denial is pending. As a result of the judgment,
a provision of approximately $2 million ($1.3 million, net of tax) was
recorded in 1996. This amount was in addition to approximately $1.3 million
($800,000, net of tax) provided in prior periods. No anticipated recoveries
from insurance carriers or other third parties have been considered in these
recorded loss provisions.
The Company has evaluated the merits of other litigation and believes their
outcome will not have a further material effect on the Company's future
results of operations or financial position.
<PAGE> 10
The Company is aware of several environmental matters related to certain
facilities purchased or to be sold. The Registrant assesses the extent of
these matters on an ongoing basis. In the opinion of management (after
taking into account accruals of approximately $400,000 as of June 30, 1997),
the resolution of these matters will not materially affect the Company's
future results of operations or financial position.
7. SUBSIDIARY STOCK REPURCHASE:
In February 1997, the Company repurchased 9,900,000 shares (or approximately
30%) of its subsidiary, Dixon Ticonderoga de Mexico, S.A. de C.V., from a
consortium of Mexican financial institutions. The shares, which were
repurchased for approximately $2.5 million (or 25 cents per share), were
originally issued in 1994, when the Company sold 16,627,760 shares of Dixon
Ticonderoga de Mexico, S.A. de C.V., in an initial public offering on the
Mexico Intermediate Market at a price of approximately 40 cents per share
(U.S. equivalency). The Company applied the purchase method of accounting to
record this repurchase of subsidiary stock.
<PAGE> 11
Item 2.
- -------
MANAGEMENT'S DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS
REVENUES for the quarter ended June 30, 1997, increased $3,194,000 from the
same quarter last year. The changes by segment are as follows:
Increase % Increase (Decrease)
(Decrease) ---------------------
(in thousands) Total Volume Price/Mix
------------ ----- ------ ---------
Consumer U.S. $ 1,481 8 6 2
Consumer Foreign 1,426 20 17 3
Industrial 287 4 4 0
U.S. Consumer revenue increased in the mass retail and educational markets.
Revenue in Mexico increased approximately $1,000,000 and in Canada $400,000
primarily reflecting aggressive efforts in the mass market. Revenue in
Mexico was decreased by $180,000 due to the decline in value of the peso
compared to the U.S. dollar.
Revenues for the nine months ended June 30, 1997, increased $5,841,000 over
the same period last year. The changes by segment are as follows:
Increase % Increase (Decrease)
(Decrease) ---------------------
(in thousands) Total Volume Price/Mix
------------ ----- ------ ---------
Consumer U.S. $ 1,611 4 2 2
Consumer Foreign 3,997 32 26 6
Industrial 233 1 1 0
U.S. Consumer revenue increased primarily due to the mass market and
educational market segments. Revenue in Mexico increased $3,000,000 despite
a decrease of $300,000 due to the decline of the local currency compared to
the U.S. dollar. Increased sales in the mass market and successful
government bids were the primary reasons for this increase. Revenue in
Canada increased $820,000 primarily in the mass retail market segment.
While the Company has operations in Canada, Mexico and the U.K., historically
only the operating results in Mexico have been materially impacted by
currency fluctuations. There has been a significant devaluation of the
Mexican peso once in each of the last three decades, the last one being in
December 1994. In the short term after such a devaluation, consumer
confidence has been shaken, leading to an intermediate reduction in revenues
in the months following the devaluation. Then, after the immediate shock,
and as the peso stabilizes, revenues tend to grow. Selling prices tend to
rise over the long term to offset any inflationary increases in costs. The
peso, as well as any currency value, depends on many factors including
international trade, investor confidence, and government policy, to name a
few. These factors are impossible for the Company to predict, and thus, an
estimate of potential effect on results of operations for the future cannot
be made. The Company does not employ any currency hedging practices. The
currency risk in Mexico is managed through local currency financing and by
export sales to the U.S. denominated in U.S. dollars.
<PAGE> 12
As of January 1, 1997, Mexico is considered as a highly inflationary economy
for the purpose of applying FASB Statement No. 52 "Foreign Currency
Translation." Translation gains or losses will therefore impact the results
of operations going forward.
Revenues increased $14,457,000 from the prior quarter as follows:
Increase % Increase (Decrease)
(Decrease) ---------------------
(in thousands) Total Volume Price/Mix
------------ ----- ------ ---------
Consumer U.S. $10,242 94 94 0
Consumer Foreign 3,857 83 86 3
Industrial 358 5 5 0
U.S. and Foreign Consumer revenue reflects the seasonality of these segments.
This quarter, historically, represents approximately 33% of annual revenues
while the prior quarter represents only 18%.
OPERATING INCOME increased $720,000 over the same quarter last year. Foreign
Consumer operating income increased $690,000 primarily on higher volume in
Mexico. U.S. Consumer operating income increased $110,000. Higher volume
and related increased manufacturing efficiencies were partially offset by
initial promotional costs associated with increased penetration of the mass
market and for new product introductions.
Operating income for the nine months ended June 30, 1997, increased
$3,173,000 over the same period last year. The prior year included
$2,039,000 for litigation and related costs of a judgment against the Company
under New Jersey's Environmental Clean-Up Responsibility Act (ECRA), as
described in Note 6 to Consolidated Financial Statements. Foreign Consumer
increased approximately $1,400,000 primarily due to higher revenues in
Mexico's mass and government market segments. U.S. Consumer increased
$550,000. Increased manufacturing efficiencies and volume in this segment
were the primary factors for the increase. In addition, these factors
contributed to lower total cost of goods sold (from 67.1% of sales last year
to 63.8% of sales in the current year period). Industrial operating income
decreased $80,000 principally due to competitive pricing pressures on
graphite. Total administrative costs increased due to higher debt
amortization expenses, legal expenses, and new management personnel costs.
Operating income increased $3,285,000 over the prior quarter. U.S. Consumer
and Foreign Consumer increased $2,140,000 and $1,140,000, respectively,
primarily due to the seasonality of revenues, as discussed above.
INTEREST EXPENSE increased $114,000 and $404,000 for the quarter and nine
months ended June 30, 1997, respectively, over the comparable periods last
year. These increases are primarily due to higher debt incurred for the new
corporate headquarters and subsidiary stock repurchase, as well as higher
effective rates and balances of subordinated debt. Interest expense
increased $142,000 over the prior quarter due to higher seasonal borrowings
to support the Company's peak shipping period.
<PAGE> 13
INCOME TAXES increased $270,000 and $1,007,000 for the quarter and nine
months ended June 30, 1997, respectively, over the same periods last year and
$1,237,000 over the prior quarter. These increases reflect the changes in
before tax income. Effective tax rates for the 1997 period increased due to
the impact of higher foreign tax rates.
MINORITY INTEREST represents 49.9% of the net income of the consolidated
subsidiary, Dixon Ticonderoga de Mexico, S.A. de C.V. through January 1997.
In February 1997, the Company increased its ownership, thus reducing minority
interest to approximately 20%. See Note 7 to Consolidated Financial
Statements.
<PAGE> 14
LIQUIDITY AND CAPITAL RESOURCES
The Company's financial condition has benefited from its recent operating
success and the completion of major financing initiatives. Cash flows from
operating activities in the first nine months of fiscal 1997 improved by
approximately $3.5 million over the same period last year, due principally to
increased receivable collections from strong fourth quarter 1996 revenues.
This improvement was partially offset by higher inventory levels needed to
service the Company's growing Consumer Group business.
Investing activities in the same period last year included approximately $2
million of costs related to the construction of the Company's new corporate
headquarters. Total capital expenditures in fiscal 1997 are expected to
return to more customary levels (approximately $2.2 million). Such
expenditures approximated $1,481,000 in the first nine months of fiscal 1997.
Generally, all major capital projects are discretionary in nature and thus no
material purchase commitments exist. Other capital expenditures will
continue to be funded from operations and existing financing arrangements.
In addition, the Company has financed certain strategic manufacturing
equipment (in the amount of $2.7 million) under a long-term operating lease
arrangement.
In July 1996, the Company entered into new financing arrangements with a
consortium of lenders to provide additional working capital. The new loan
and security agreement provides for a total of $48 million in financing.
This includes a revolving line of credit facility in the amount of $40
million which bears interest at either the prime rate, plus 0.5%, or the
prevailing LIBOR rate plus 2.5%. Borrowings under the revolving credit
facility are based upon eligible accounts receivable and inventories of the
Company's U.S. and Canada operations, as defined. The financing agreement
also includes a term loan in the original amount of $7.75 million. The term
loan bears interest at the same rate, and is payable in varying monthly
installments through 2001. The Company previously executed certain interest
rate "swap" agreements which effectively fix the rate of interest on
approximately $13 million of this debt at 8.75% to 8.87%.
The new financing arrangements are collateralized by the tangible and
intangible assets of the U.S. and Canada operations (including accounts
receivable, inventories, property, plant and equipment, patents and
trademarks) and a pledge of the capital stock of the Company's subsidiaries.
The loan and security agreement contains provisions pertaining to the
maintenance of certain financial ratios and annual capital expenditure
levels, as well as restrictions as to payment of cash dividends. The Company
is presently in compliance with all such provisions. These new arrangements
provide up to $10 million in additional financing as compared with the
Company's previous primary lender agreement. At June 30, 1997, the Company
had approximately $17 million of unused lines of credit available under this
new financing arrangement.
<PAGE> 15
In September 1996, the Company also completed the private placement of $16.5
million of new 12% Senior Subordinated Notes, due 2003. The net proceeds
were used to retire early the remaining $7 million of the Company's prior
issue of Senior Subordinated Notes due 1999, and to reduce short-term
borrowings, thus providing additional working capital. This transaction also
reduced the Company's annual debt service obligations by approximately $3.3
million through 1998. The Company executed a reverse interest rate "swap"
agreement which converts $10 million of the notes to a floating rate of
interest (approximately 10.8% at June 30, 1997). In connection with the
private placement, the Company issued to noteholders warrants to purchase
300,000 shares of Company stock at $7.24 per share. The note agreement
contains provisions which limit the payment of dividends and requires the
maintenance of certain financial covenants and ratios, with which the Company
is presently in compliance.
The Company's repurchase of its Mexico subsidiary's stock in February 1997
(see Note 7 to Consolidated Financial Statements) was financed through the
aforementioned revolving line of credit facility.
The Company entered into the aforementioned interest rate "swap" agreements
to balance and manage overall interest rate exposure and minimize overall
cost of borrowings. The "swaps" are not presently expected to have a
material effect on total interest expense over the term of the underlying
agreements.
The new and existing sources of financing and cash expected to be generated
from future operations will, in management's opinion, be sufficient to
fulfill all current and anticipated requirements of the Company's ongoing
business and to meet all of its obligations.
<PAGE> 16
PART II. OTHER INFORMATION
Item 6. Exhibits and Reports on Form 8-K
- ------- ---------------------------------
(a) Exhibits
--------
The following exhibits are required to be filed as part of this
quarterly report on Form 10-Q:
(3)(i) Restated Certificate of Incorporation*
(3)(ii) Amended and Restated Bylaws**
(4)(a) Specimen Certificate of Company Common Stock*
(4)(b) Amended and Restated Stock Option Plan***
(27) Financial Data Schedule ****
* Incorporated by reference to the Company's quarterly report on Form 10-Q
for the period ended March 31, 1997, file number 0-2655, filed in Washington,
D.C.
** Incorporated by reference to the Company's Annual Report on Form 10-K
for the year ended September 30, 1996, file number 0-2655, filed in
Washington D.C.
*** Incorporated by reference to Appendix 3 to the Company's Proxy Statement
dated January 27, 1997, filed in Washington, D.C.
**** Filed electronically via EDGAR.
(b) Reports on Form 8-K
-------------------
Not applicable.
<PAGE> 17
SIGNATURES
Pursuant to the requirements of the Securities and Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.
DIXON TICONDEROGA COMPANY
Dated: August 8, 1997 By: /s/ Gino N. Pala
----------------------------
Gino N. Pala
Chairman of the Board,
President, Chief Executive
Officer and Director
Dated: August 8, 1997 By: /s/ Richard A. Asta
----------------------------
Richard A. Asta
Executive Vice President of
Finance and Chief Financial
Officer
Dated: August 8, 1997 By: /s/ John Adornetto
----------------------------
John Adornetto
Vice President/Corporate
Controller and Chief
Accounting Officer
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
This schedule contains summary financial information extracted from the
Consolidated Balance Sheets, the Consolidated Statement of Operations and the
Consolidated Statement of Cash Flows, and is qualified in its entirety by
reference to such financial statements.
</LEGEND>
<S> <C>
<PERIOD-TYPE> 9-MOS
<FISCAL-YEAR-END> SEP-30-1997
<PERIOD-END> JUN-30-1997
<CASH> 2,017,791
<SECURITIES> 0
<RECEIVABLES> 31,898,450
<ALLOWANCES> 1,061,185
<INVENTORY> 34,319,806
<CURRENT-ASSETS> 70,450,163
<PP&E> 34,683,549
<DEPRECIATION> 19,104,660
<TOTAL-ASSETS> 88,245,128
<CURRENT-LIABILITIES> 43,070,855
<BONDS> 0
0
0
<COMMON> 3,574,681
<OTHER-SE> 14,673,906
<TOTAL-LIABILITY-AND-EQUITY> 88,245,128
<SALES> 80,579,173
<TOTAL-REVENUES> 80,579,173
<CGS> 51,405,772
<TOTAL-COSTS> 51,405,772
<OTHER-EXPENSES> 22,364,472
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 2,731,808
<INCOME-PRETAX> 4,077,021
<INCOME-TAX> 1,412,715
<INCOME-CONTINUING> 2,159,737
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 2,159,737
<EPS-PRIMARY> .65
<EPS-DILUTED> .65
</TABLE>
