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, 1998 COMMISSION FILE NO. 0-2655
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, 1998
----------------- -------------------------------
Common Stock $1 par value 3,405,093
<PAGE>
DIXON TICONDEROGA COMPANY AND SUBSIDIARIES
INDEX
Page
----
PART I. FINANCIAL INFORMATION
Item 1. Financial Information
Consolidated Balance Sheets -
June 30, 1998 and September 30, 1997 3-4
Consolidated Statements of Operations - For The
Three and Nine Months Ended June 30, 1998 and 1997 5
Consolidated Statements of Cash Flows-
For the Nine Months Ended June 30, 1998 and 1997 6-7
Notes to Consolidated Financial Statements 8-10
Item 2. Management's Discussion and Analysis of
Financial Condition and Results of Operations 11-14
PART II. OTHER INFORMATION
Item 6. Exhibits and Reports on Form 8-K 15
Signatures 16
<PAGE>
PART I. FINANCIAL INFORMATION
Item 1. DIXON TICONDEROGA COMPANY AND SUBSIDIARIES
- ------- CONSOLIDATED BALANCE SHEETS
June 30, 1998 September 30, 1997
CURRENT ASSETS: -------------- ------------------
Cash and cash equivalents $ 802,604 $ 5,607,587
Receivables, less allowance
for doubtful accounts of
$1,618,972 at June 30, 1998,
and $1,004,537 at
September 30, 1997 36,380,075 25,969,659
Inventories 38,447,516 31,580,175
Other current assets 3,211,436 3,225,881
-------------- ------------------
Total current assets 78,841,631 66,383,302
-------------- ------------------
PROPERTY, PLANT AND EQUIPMENT:
Land and buildings 17,286,138 16,955,803
Machinery and equipment 20,445,572 17,130,035
Furniture and fixtures 1,389,587 944,267
-------------- -----------------
39,121,297 35,030,105
Less accumulated depreciation (21,232,035) (19,542,880)
-------------- -----------------
17,889,262 15,487,225
OTHER ASSETS 2,615,435 2,290,712
-------------- -----------------
$99,346,328 $84,161,239
============== =================
<PAGE>
June 30, 1998 September 30, 1997
------------- ------------------
CURRENT LIABILITIES:
Notes payable $34,354,577 $16,058,080
Current maturities of 1,680,773 1,745,080
long-term debt
Accounts payable 5,646,812 7,077,955
Accrued liabilities 9,023,205 12,712,385
------------- ------------------
Total current liabilities 50,705,367 37,593,500
------------- ------------------
LONG-TERM DEBT 22,597,395 23,555,618
------------- ------------------
DEFERRED INCOME TAXES AND OTHER 1,235,306 1,142,631
------------- ------------------
MINORITY INTEREST 2,604,521 2,006,865
------------- ------------------
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
3,627,934 shares as of
June 30,1998, and 3,591,681
shares as of September 30,1997 3,627,934 3,591,681
Capital in excess of par value 3,049,006 2,770,668
Retained earnings 19,568,432 17,127,698
Cumulative translation
adjustment (3,224,338) (2,768,856)
------------- ------------------
23,021,034 20,721,191
Less-treasury stock, at cost (817,295) (858,566)
(222,841 and 234,094 shares ------------- ------------------
in 1998 and 1997,respectively) 22,203,739 19,862,625
------------- ------------------
$99,346,328 $84,161,239
============= ==================
The accompanying notes to consolidated financial statements
are an integral part of these statements.
<PAGE>
DIXON TICONDEROGA COMPANY AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF OPERATIONS
FOR THE THREE AND NINE MONTHS ENDED JUNE 30, 1998 AND 1997
THREE MONTHS ENDED NINE MONTHS ENDED
JUNE 30, JUNE 30,
1998 1997 1998 1997
---- ---- ---- ----
REVENUES $38,503,363 $36,364,351 $87,153,268 $80,579,173
----------- ----------- ----------- -----------
COST AND EXPENSES
Cost of goods sold 23,313,219 22,744,511 54,018,823 51,405,772
Selling and
administrative 10,490,978 25,787,139 22,364,472 9,219,048
------------ ----------- ----------- -----------
33,804,197 31,963,559 79,805,962 73,770,244
------------ ----------- ----------- -----------
OPERATING INCOME 4,699,166 4,400,792 7,347,306 6,808,929
INTEREST EXPENSE 1,293,039 1,037,313 3,180,233 2,731,909
------------ ----------- ----------- -----------
INCOME FROM
OPERATIONS BEFORE
INCOME TAXES AND
MINORITY INTEREST 3,406,127 3,363,479 4,167,073 4,077,021
INCOME TAXES 1,098,449 1,262,008 1,128,689 1,412,715
------------ ----------- ----------- -----------
2,307,678 2,101,471 3,038,384 2,664,306
MINORITY INTEREST 292,575 205,842 597,656 504,569
------------ ----------- ----------- -----------
NET INCOME $ 2,015,103 $ 1,895,629 $ 2,440,728 $ 2,159,737
============ =========== =========== ===========
EARNINGS PER COMMON
SHARE:
BASIC $ .60 $ .57 $ .72 $ .65
============ =========== =========== ===========
DILUTED $ .54 $ .54 $ .65 $ .62
============ =========== =========== ===========
WEIGHTED AVERAGE
SHARES OUTSTANDING:
BASIC 3,386,602 3,338,814 3,378,798 3,313,443
============ =========== =========== ===========
DILUTED 3,744,365 3,503,410 3,731,420 3,474,112
============ =========== =========== ===========
The accompanying notes to consolidated financial statements
are an integral part of these statements.
<PAGE>
DIXON TICONDEROGA COMPANY AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS
FOR THE NINE MONTHS ENDED JUNE 30, 1998 AND 1997
1998 1997
---- ----
CASH FLOWS FROM OPERATING ACTIVITIES:
Net income $ 2,440,728 $ 2,159,737
Adjustment to reconcile income to net
cash provided by (used in) operating
activities:
Depreciation and amortization 2,169,221 1,933,844
Deferred taxes 204,230 5,825
Provision for doubtful accounts
receivable 200,970 256,624
(Income) loss attributable to
currency transactions 377,801 (22,645)
Income attributable to minority
interest 597,656 504,569
Changes in assets and
liabilities, net of effects
of acquisition:
Receivables, net (9,771,563) (7,710,416)
Inventories (6,000,497) (3,011,051)
Other current assets (20,287) (323,969)
Accounts payable and accrued
liabilities (6,081,270) 2,686,472
Other assets (123,546) (317,834)
----------- -----------
Net cash provided by (used in)
operations (16,006,557) (3,838,844)
----------- -----------
CASH FLOWS FROM INVESTING ACTIVITIES:
Purchases of property, plant and
equipment, net (1,315,099) (1,480,764)
Purchase of Vinci de Mexico, S.A.
de C.V., net of cash acquired (3,289,200) --
----------- -----------
Net cash provided by (used in)
investing activities (4,604,299) (1,480,764)
----------- -----------
CASH FLOWS FROM FINANCING ACTIVITIES:
Purchase of subsidiary stock -- (2,519,324)
Net proceeds from notes payable 16,828,403 8,209,562
Principal reductions of long-term debt (1,235,013) (1,015,315)
Exercise of stock options 355,861 234,997
Other non-current liabilities 109 --
----------- -----------
Net cash provided by (used in)
financing activities 15,949,360 4,909,920
<PAGE>
Effect of exchange rate changes on cash (143,487) (169,553)
----------- -----------
Net decrease in cash and cash
equivalents (4,804,983) (579,241)
Cash and cash equivalents, beginning
of period 5,607,587 2,597,032
----------- -----------
Cash and cash equivalents, end
of period $ 802,604 $ 2,017,791
=========== ===========
Supplemental Disclosures:
Cash paid during the period:
Interest (net of amount capitalized) $ 2,652,631 $ 2,943,414
Income taxes 785,441 575,764
The accompanying notes to consolidated financial statements
are an integral part of these statements.
<PAGE>
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. 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, 1998, and
the results of their operations and cash flows for the nine months ended June
30, 1998 and 1997, have been included. The results of operations for such
interim periods are not necessarily indicative of the results for the entire
year.
Certain fiscal 1997 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, 1998 (for which the LIFO method of
accounting is 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 $945,000 and $803,000 higher at June 30,
1998, and September 30, 1997, respectively.
Inventories consist of (in thousands):
June 30, September 30,
1998 1997
---- ----
Raw materials $14,354 $11,760
Work in process 3,778 4,400
Finished goods 20,316 15,420
------- -------
$38,448 $31,580
3. EFFECT OF CERTAIN NEW ACCOUNTING PRONOUNCEMENTS:
In 1997, the Financial Accounting Standards Board (FASB) issued Statement No.
130, "Reporting Comprehensive Income," which is effective for the Company in
fiscal 1999. This statement requires the reporting of net income and all other
changes to equity during the period, except those resulting from investments by
owners and distributions to owners, in a separate statement that begins with net
income or in the consolidated statement of operations below net income. The
Company estimates that currently the only component of comprehensive income that
bypasses the statement of operations is foreign currency translation adjustments
presently being reported in the Consolidated Statement of Shareholders' Equity.
<PAGE>
4. TRANSLATION OF FOREIGN CURRENCIES:
Since January 1, 1997, Mexico has been considered a highly inflationary economy
for the purpose of applying FASB Statement No. 52, "Foreign Currency
Translation." Translation gains and losses therefore impact the results of
operations. Foreign currency transaction gains (losses) included in net income
were approximately ($378,000) and $23,000 for the periods ended June 30, 1998
and 1997, 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 accompanying Consolidated Financial
Statements is primarily due to lower effective foreign tax rates, state income
taxes and other permanent items.
Income taxes reconciled to the statutory rates are as follows for all periods
presented:
Three Months Ended Nine Months Ended
June 30, June 30,
1998 1997 1998 1997
Taxes calculated at federal ---- ---- ---- ----
statutory rate $1,158 $1,144 $1,417 $1,386
Foreign income (158) (10) (423) (108)
State taxes 41 52 (5) 25
Other permanent items 57 76 140 110
------ ------ ------ ------
Provisions for income taxes $1,098 $1,262 $1,129 $1,413
6. CONTINGENCIES:
The Company, in the normal course of business, is party in certain litigation.
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 plus prejudgment
interest relating to certain environmental clean-up costs. All Company appeals
have been denied and in January 1998 the Company paid $3.6 million to satisfy
this claim in full, including all accrued interest. The Company continues to
pursue 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 attorney).
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. Moreover, the Company assesses the
extent of any environmental matters on an ongoing basis. In the opinion of
management (after taking into account accruals of approximately $275,000
as of June 30, 1998), the resolution of these matters will not materially
affect the Company's future results of operations or financial position.
<PAGE>
7. ACQUISITION:
In December 1997, the Company's subsidiary, Dixon Ticonderoga de Mexico, S.A. de
C.V., acquired all of the capital stock of Vinci de Mexico, S.A. de C.V.
("Vinci"), and certain assets of a related entity for a final total purchase
price of approximately 28.3 million pesos (approximately $3.5 million) in cash.
Vinci is a well-known manufacturer of tempera and oil paints, chalk and modeling
clay in Mexico. The company also manufactures plastic products (such as rulers
and geometric sets), water colors and crayons. The acquisition was accounted
for under the "purchase" method of accounting and the balance sheet herein
includes the fair value of Vinci's specific assets and liabilities, including
goodwill approximating $320,000. Goodwill is amortized over the estimated
period of benefit of 20 years. The results of Vinci's operations have been
included in the consolidated results of operations since the date of
acquisition.
The following shows pro forma, unaudited data that would have resulted had the
acquisition been consummated as of October 1, 1996:
(in thousands, except per share data)
Three Months Ended Nine Months Ended
June 30, June 30,
1998 1997 1998 1997
---- ---- ---- ----
Revenues $38,503 $38,112 $88,085 $84,617
Net income 2,015 1,967 2,494 1,462
Earnings per
share:
Basic .60 .59 .73 .44
Diluted .54 .56 .67 .42
8. FINANCING ARRANGEMENTS:
In May 1998, the Company's primary financing arrangements with a consortium of
lenders were modified to increase the available revolving line of credit to $45
million during the Company's annual peak borrowing period. The provisions of
the term loan included in this facility remained unchanged (approximate
remaining balance of $5 million).
<PAGE>
Item 2.
- -------
MANAGEMENT'S DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS
REVENUES for the quarter ended June 30, 1998, increased $2,139,000 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. $ 446 2 1 1
Consumer Foreign 2,310 27 45 (18)
Industrial (617) (9) (10) 1
The U.S. Consumer revenue increase was primarily in the office supply megastore
market. The increase in Foreign Consumer primarily reflects marketing efforts
in the Mexico mass market and the acquisition of Vinci (see Note 7 to
Consolidated Financial Statements). Revenue decreased $402,000 and $165,000 in
Mexico and Canada, respectively, due to declines in their local currencies
compared to the U.S. dollar. Industrial revenue decrease was primarily due to
competitive pricing pressures in lubricant products.
Revenues for the nine months ended June 30, 1998, increased $6,574,000 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. $ 1,928 4 4 --
Consumer Foreign 5,274 32 46 (14)
Industrial (628) (3) (3) --
U.S. Consumer principally reflects continued increases in the educational market
due to more aggressive promotional programs and a restructured sales force.
Foreign Consumer revenue increase was primarily in Mexico, again due to
increased shipments to the mass market and the acquisition of Vinci. Decreases
of $793,000 and $320,000 in the revenue of Mexico and Canada, respectively, were
due to the decline in their local currencies compared to the U.S. dollar.
Revenues increased $13,650,000 from the prior quarter as follows:
Increase % Increase/Decrease
(Decrease) -------------------
(in thousands) Total Volume Price/Mix
-------------- ----- ------ ---------
Consumer U.S. $ 9,800 83 86 (3)
Consumer Foreign 4,063 60 71 (11)
Industrial (213) (3) (4) 1
The increase in U.S. and Foreign Consumer revenue reflects the seasonality of
these segments. This quarter historically represents over 30% of annual
revenues while the prior quarter represents under 20%.
<PAGE>
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 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's Mexico subsidiary maintains a peso
currency option to protect against short-term devaluation in excess of
approximately 10%. This currency risk in Mexico is also managed through local
currency financing and by export sales to the U.S. denominated in U.S. dollars.
OPERATING INCOME increased $298,000 over the same quarter last year. Foreign
Consumer increased $660,000 primarily in Mexico. The addition of Vinci (see
Note 7 to Consolidated Financial Statements) and increased volume led to this
increase. U.S. Consumer increased approximately $100,000. Industrial decreased
$250,000 on lower revenues. General corporate expenses increased $210,000
primarily due to increased expenditures on information technology. This
contributed to an increase in selling and administrative costs to 27.2% of sales
compared to 25.4% in the same quarter last year.
Operating income increased $538,000 for the nine months ended June 30, 1998,
over the same period last year. Foreign Consumer increased $1,280,000 primarily
in Mexico despite increased currency losses of approximately $400,000. The
increase in Mexico was due principally to the aforementioned acquisition of
Vinci and increased efforts in the mass market. U.S. Consumer decreased
$190,000 due to increased marketing and sales promotion costs. Industrial
decreased $260,000 due to lower revenue. General corporate expenses increased
$290,000, principally due to higher information technology costs. These factors
contributed to an overall increase in total selling and administrative expenses
(29.6% of sales compared to 27.8% in the prior year period.)
Operating income increased $3,339,000 over the prior quarter. U.S. and Foreign
Consumer increased approximately $2,150,000 and $1,400,000, respectively, due to
the seasonality of revenues, as discussed above.
INTEREST EXPENSE increased $256,000 and $448,000 for the quarter and nine months
ended June 30, 1998, respectively, over the same periods last year on increased
borrowings due to the Vinci acquisition and the payment of the legal claim
described in Note 6 to Consolidated Financial Statements. Interest expense
increased $197,000 over the prior quarter due to traditionally higher seasonal
borrowings.
INCOME TAXES decreased $164,000 in the current quarter and $284,000 for the nine
months ended June 30, 1998, as compared with the prior year periods,
respectively, due principally to lower effective foreign tax rates. (See Note 5
to Consolidated Financial Statements.)
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%.
<PAGE>
LIQUIDITY AND CAPITAL RESOURCES
Cash flows from operating activities in the first nine months of fiscal 1987
decreased by approximately $12.2 million over the same period last year, due
principally in the U.S. to the payment of the legal claim (Note 6 to
Consolidated Financial Statements) and large calendar year-end selling and
promotional expense obligations. In addition, the Company's strong growth in
Mexico has increased the subsidiary's working capital needs significantly.
(Accounts receivable and inventories in Mexico increased $7.6 million during the
period.)
Investing activities included approximately $3.3 million (net of cash acquired)
related to the acquisition of Vinci (see Note 7 to Consolidated Financial
Statements). Total other capital expenditures are expected to approximate less
than $2 million in fiscal 1998. Such expenditures approximate $1,315,000 in the
first nine months, as compared with $1,481,000 in the prior year period.
Generally, all other 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.
The Company has financing arrangements with a consortium of lenders to fund
capital expenditures and provide working capital. The loan and security
agreement as amended, (see Note 8 to Consolidated Financial Statements) provides
for a total of approximately $50 million in financing. This includes a
revolving line of credit facility in the amount of up to $45 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 with a current
balance of approximately $5 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 $10 million of this debt at 8.75% to
8.87%.
The 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. At June 30, 1998, the Company had approximately $14 million of
unused lines of credit available under this financing arrangement. This
facility principally financed the seasonal working capital needs described
above. In addition, the Mexico subsidiary utilized a local seasonal line
of credit for inventory purchaces (approximately $4 million in notes payable
at June 30, 1998).
In September 1996, the Company also completed the private placement of $16.5
million of 12% Senior Subordinated Notes, due 2003. 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. In January 1998, the Company canceled a reverse interest rate "swap"
agreement covering $10 million of the notes, resulting in a deferred gain of
approximately $375,000, being recognized over the remaining original term of the
notes.
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.
<PAGE>
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.
YEAR 2000 COMPUTER ISSUES
The Company is in process of assessing and addressing the impact of the year
2000 on its computer hardware and software. The Company is presently undergoing
an upgrade of its principal operating and application software, which is
believed to be year 2000 compliant. Peripheral applications and/or personal
computer systems may not be compliant in all cases. Management and its outside
management information consultants have developed a plan to assure full
compliance by 1999. Accordingly, the Company does not expect this matter to
materially impact how it conducts business nor its future results of operations
or financial position.
FORWARD-LOOKING STATEMENTS
Any "forward-looking statements" contained in this Quarterly Report on Form 10-Q
involve known and unknown risks (including, but not limited to certain foreign
currency risk), uncertainties and other factors that could cause the actual
results to differ materially from those expressed or implied by such forward-
looking statements.
<PAGE>
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 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>
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 13, 1998 By: /s/ Gino N. Pala
----------------------------
Gino N. Pala
Chairman of the Board,
President, Chief Executive
Officer and Director
Dated: August 13, 1998 By: /s/ Richard A. Asta
----------------------------
Richard A. Asta
Executive Vice President of
Finance and Chief Financial
Officer
Dated: August 13, 1998 By: /s/ John Adornetto
----------------------------
John Adornetto
Vice President/Corporate
Controller and Chief
Accounting Officer
<PAGE>
WARNING: THE EDGAR SYSTEM ENCOUNTERED ERROR(S) WHILE PROCESSING THIS SCHEDULE.
<TABLE> <S> <C>
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<ARTICLE> 5
<S> <C>
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<PERIOD-END> JUN-30-1998
<CASH> 802,604
<SECURITIES> 0
<RECEIVABLES> 37,999,047
<ALLOWANCES> 1,618,972
<INVENTORY> 38,447,516
<CURRENT-ASSETS> 78,841,631
<PP&E> 39,121,297
<DEPRECIATION> 21,232,035
<TOTAL-ASSETS> 99,346,328
<CURRENT-LIABILITIES> 50,705,367
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0
0
<COMMON> 3,627,934
<OTHER-SE> 18,575,805
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<SALES> 87,153,268
<TOTAL-REVENUES> 87,153,268
<CGS> 54,018,823
<TOTAL-COSTS> 54,018,823
<OTHER-EXPENSES> 25,787,139
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 3,180,233
<INCOME-PRETAX> 4,167,073
<INCOME-TAX> 1,128,689
<INCOME-CONTINUING> 2,440,728
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<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 2,440,728
<EPS-PRIMARY> .72
<EPS-DILUTED> .65
</TABLE>
