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 December 31, 1995.
OR
[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OF 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
For the transition period from ________ to ________
Commission file number 1-11427
NEW ENGLAND BUSINESS SERVICE, INC.
----------------------------------
(Exact name of the registrant as specified in its charter)
Delaware 04-2942374
-------- ----------
(State or other jurisdiction of (I. R. S. Employer
incorporation or organization) Identification No.)
500 Main Street
Groton, Massachusetts, 01471
----------------------------
(Address of principal executive offices)
(Zip Code)
(508) 448-6111
--------------
(Registrant's telephone number, including area code)
Indicate by check mark whether the registrant (1) has filed all reports
required to be filed by Sections 13 and 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
--- ---
The number of common shares of the Registrant outstanding on December 31, 1995
was 14,909,676.
<PAGE>
NEW ENGLAND BUSINESS SERVICE, INC.
CONSOLIDATED BALANCE SHEET
(In Thousands Except Share Data)
Dec. 31, June 30,
1995 1995
-------- --------
ASSETS
Current Assets
Cash and cash equivalents $ 10,790 $ 11,604
Short term investments 16,091 11,360
Accounts receivable 32,920 29,332
Inventories 10,872 9,880
Direct mail advertising 2,260 2,939
Prepaid expenses 2,356 2,716
Deferred income tax benefit 11,324 9,678
-------- --------
Total current assets 86,613 77,509
Property and Equipment
Land and buildings 29,589 35,796
Less: accumulated depreciation 16,745 18,833
-------- --------
Net 12,844 16,963
Equipment 73,676 70,890
Less: accumulated depreciation 55,536 51,818
-------- --------
Net 18,140 19,072
Property and equipment - net 30,984 36,035
Property Held for Sale 4,422 2,587
Other Assets - net 4,491 8,415
-------- --------
TOTAL ASSETS $126,510 $124,546
======== ========
<PAGE>
NEW ENGLAND BUSINESS SERVICE, INC.
CONSOLIDATED BALANCE SHEET (Continued)
(In Thousands Except Share Data)
Dec. 31, June 30,
1995 1995
-------- --------
LIABILITIES AND STOCKHOLDERS' EQUITY
Current Liabilities
Accounts payable $ 7,469 $ 7,158
Federal and state income taxes 2,142 2,506
Accrued profit-sharing distribution 2,019 2,408
Accrued payroll expense 4,290 5,731
Accrued employee benefit expense 7,222 6,005
Accrued exit costs/restructuring charge 4,935 2,020
Other accrued expenses 6,971 6,341
------- -------
Total current liabilities 35,048 32,169
Deferred Income Taxes 474 854
STOCKHOLDERS' EQUITY
Preferred stock
Common stock 15,796 15,770
Additional paid in capital 12,921 12,450
Cumulative foreign currency translation
adjustment ( 1,734) ( 1,683)
Retained earnings 80,911 82,412
-------- --------
Total 107,894 108,949
Less: treasury stock ( 16,906) ( 17,426)
-------- --------
Stockholders' Equity 90,988 91,523
-------- --------
TOTAL LIABILITIES & STOCKHOLDERS' EQUITY $126,510 $124,546
======== ========
See Notes to Consolidated Financial Statements
<PAGE>
NEW ENGLAND BUSINESS SERVICE, INC.
CONSOLIDATED STATEMENTS OF INCOME
(In Thousands Except Per Share Data)
Three Months Ended Six Months Ended
------------------ ----------------
Dec. 31, Dec. 23, Dec. 31, Dec. 23,
1995 1994 1995 1994
-------- -------- --------- ---------
NET SALES $ 67,158 $ 69,479 $ 130,946 $ 131,558
OPERATING EXPENSES:
Cost of sales 24,001 24,490 47,386 46,531
Selling and advertising 23,794 22,901 46,816 43,673
General and administrative 12,982 13,227 25,762 24,577
Exit costs 10 0 3,044 0
------- ------- -------- --------
Total operating expenses 60,787 60,618 123,008 114,781
INCOME FROM OPERATIONS 6,371 8,861 7,938 16,777
OTHER INCOME/(EXPENSE):
Investment income 241 341 542 664
------- ------- -------- --------
INCOME BEFORE INCOME TAXES 6,612 9,202 8,480 17,441
PROVISION FOR INCOME TAXES:
Federal 1,998 2,968 2,058 5,708
State 702 885 967 1,665
------- ------- -------- --------
Total 2,700 3,853 3,025 7,373
------- ------- -------- --------
NET INCOME BEFORE LOSS ON
EQUITY METHOD INVESTMENT 3,912 5,349 5,455 10,068
Loss on equity method investment,
net of income tax benefit of
$653 in 1995 0 ( 90) ( 1,002) ( 176)
------- ------- -------- --------
NET INCOME $ 3,912 $ 5,259 $ 4,453 $ 9,892
======= ======= ======== ========
PER SHARE AMOUNTS:
Net Income $ .26 $ . 34 $ .30 $ .64
======= ======= ======== ========
Dividends $ .20 $ .20 $ .40 $ .40
======= ======= ======== ========
WEIGHTED AVERAGE SHARES
OUTSTANDING 14,899 15,415 14,885 15,442
======= ======= ======== ========
See Notes to Consolidated Financial Statements
<PAGE>
NEW ENGLAND BUSINESS SERVICE, INC.
CONSOLIDATED STATEMENTS OF CASH FLOWS
(In Thousands)
Six Months Ended
----------------------
Dec. 31, Dec. 23,
1995 1994
-------- --------
CASH FLOWS FROM OPERATING ACTIVITIES:
Net income $ 4,453 $ 9,892
Adjustments to reconcile net income to cash:
Depreciation and amortization 9,778 6,038
Deferred income taxes ( 2,022) ( 1,896)
Other non-cash items 6,518 1,754
Changes in assets and liabilities:
Accounts receivable ( 5,017) ( 6,395)
Inventories and advertising material ( 330) ( 621)
Prepaid expenses 219 ( 572)
Accounts payable 310 1,342
Income taxes payable ( 364) ( 2,902)
Other accrued expenses ( 517) ( 408)
-------- --------
Net cash provided by operating activities 13,028 6,232
-------- --------
CASH FLOWS FROM INVESTING ACTIVITIES:
Additions to property and equipment ( 4,339) ( 5,996)
Purchase of investments ( 18,195) ( 14,956)
Proceeds from sale of investments 13,449 27,087
Other assets 0 ( 437)
Investment in unconsolidated subsidiary 0 ( 1,800)
-------- --------
Net cash provided by (used in) investing
activities ( 9,085) 3,898
-------- --------
CASH FLOWS FROM FINANCING ACTIVITIES:
Proceeds (payment) of debt 9 ( 36)
Proceeds from issuing common stock 495 382
Issuance (purchase) of treasury stock 520 ( 4,432)
Dividends paid ( 5,954) ( 6,182)
-------- --------
Net cash (used in) financing activities ( 4,930) ( 10,268)
EFFECT OF EXCHANGE RATE ON CASH 173 141
-------- --------
<PAGE>
NEW ENGLAND BUSINESS SERVICE, INC.
CONSOLIDATED STATEMENTS OF CASH FLOWS (Continued)
(In Thousands)
Six Months Ended
---------------------
Dec. 31, Dec. 23,
1995 1994
-------- --------
NET INCREASE (DECREASE) IN CASH AND
CASH EQUIVALENTS ( 814) 3
CASH AND CASH EQUIVALENTS AT BEGINNING
OF YEAR 11,604 3,456
------- --------
CASH AND CASH EQUIVALENTS AT END OF PERIOD $10,790 $ 3,459
======= ========
See Notes to Consolidated Financial Statements
<PAGE>
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
1. Basis of Presentation
---------------------
The consolidated financial statements contained in this report are unaudited
but reflect all adjustments, consisting only of normal recurring
adjustments, which are, in the opinion of management, necessary for a fair
statement of the results of the interim periods reflected. Certain
information and footnote disclosures normally included in financial
statements prepared in accordance with generally accepted accounting
principles have been omitted pursuant to applicable rules and regulations of
the Securities and Exchange Commission. The results of operations for the
interim period reported herein are not necessarily indicative of results
to be expected for the full year.
2. Accounting Policies
-------------------
The consolidated financial statements included herein should be read in
conjunction with the financial statements and notes thereto, and the
Report of Independent Public Accountants incorporated by reference in the
Company's Annual Report on Form 10-K for the fiscal year ended June 30,
1995 from the Company's 1995 Annual Report to Shareholders.
Reference is made to the accounting policies of the Company described in
the notes to consolidated financial statements incorporated by reference in
the Company's Annual Report on Form 10-K for the fiscal year ended
June 30, 1995 from the Company's 1995 Annual Report to Shareholders. The
Company has consistently followed those policies in preparing this report.
3. Inventories
-----------
Inventories are carried at the lower of first-in, first-out cost or market.
Inventories at December 31, 1995 and June 30, 1995 consisted of:
Dec. 31, June 30,
1995 1995
------------ -----------
Raw paper $ 656,000 $ 1,130,000
Business forms and related office products 10,216,000 8,750,000
------------ -----------
Total $ 10,872,000 $ 9,880,000
============ ===========
<PAGE>
4. Equity Method Investment
------------------------
During the first quarter of fiscal year 1996, the Company revalued its
19 percent equity interest in GST Software, plc (GST). The decision to
revalue the equity interest was influenced by the continued operational
losses of GST and a change in the Company's software product strategy.
Accordingly, the Company's investment in GST was written down to $0 as of
September 30, 1995. The revaluation resulted in a $1,002,000 loss, net of
the related income tax benefit of $653,000, and was included in the
consolidated statements of income as loss on equity method investment.
Subsequent to December 31, 1995, the Company sold its 19 percent equity
interest in GST.
5. Exit Costs
----------
During the first quarter of fiscal year 1996, the Company implemented a
program to restructure operations, including a plan to close the Company's
Flagstaff, Arizona manufacturing facility. The program's objectives are
to improve manufacturing efficiency, to outsource select corporate functions
and to reduce fixed costs. The accompanying consolidated statements of
income include a $3,034,000 pretax charge recognized in the first quarter
ended September 30, 1995 for exit costs associated with the program. The
charge for exit costs reduced first quarter net income by $1,839,000 or
$.12 per share.
The $3,034,000 pretax charge for exit costs consisted of anticipated costs
of $1,214,000 related to the facility closure of the and related
termination benefits of $1,820,000. Approximately 110 employees will be
terminated as a result of the restructuring program. The Company also
expects to incur an additional $2,110,000 of operating expense during the
remainder of fiscal year 1996 associated with the program.
As of December 31, 1995, approximately $288,000 has been expended for
termination benefits. The restructuring program is expected to be
substantially complete by the end of fiscal year 1996.
6. Other Charges
-------------
During the first quarter of fiscal year 1996, the Company revalued
certain software-related assets resulting in a first quarter charge of
approximately $3,683,000 and an additional second quarter charge of
$316,000. The revaluation of the software-related assets followed an
impairment of their future realizable value resulting from changes in the
competitive environment and a change in the Company's software product
strategy. As a result of the revaluation, $316,000 was included in cost
of sales for the current quarter, and the amounts of $962,000, $2,030,000,
and $1,007,000 were included in cost of sales, selling and advertising, and
general and administrative expense, respectively, on a year to date basis.
In addition, $632,000 is expected to be charged to cost of sales over the
remainder of fiscal year 1996 as an on-going impact of the revaluation.
<PAGE>
MANAGEMENT DISCUSSION AND ANALYSIS
Liquidity and Capital Resources
- -------------------------------
Cash provided by operating activities for the six months ended December 31,
1995 was $13.0 million and represented an increase from the $6.2 million
provided in the same period last year. The increase was due primarily to
the non-cash expense related to the revaluation of certain software-related
assets, the current year's exit cost charge and changes in the balances of
non-cash assets and liabilities.
Working capital at December 31, 1995 amounted to $51.6 million including $26.9
million of cash and short term investments. This amount compares to working
capital of $52.9 million and cash and short term investment balance of $28.9
million at the same time last year. At the beginning of this fiscal year,
working capital amounted to $45.3 million and cash and short term investments
were $23.0 million. The increase in working capital from year end was due
primarily to increased receivable and cash and short term investment balances.
Capital expenditures for the six months amounted to $4.3 million and were
lower than the $6.0 million expended in 1994. The Company had commitments
for capital projects at quarter end of approximately $2.9 million. The
Company anticipates that capital outlays will continue at the first half pace
throughout fiscal year 1996. These outlays are associated with efforts to
upgrade existing systems, to increase capacity and address strategic
initiatives throughout the Company.
In addition to its present cash and investment balances, the Company has
consistently generated sufficient cash internally to fund its needs for
working capital, dividends and capital expenditures. However, should the
Company need additional funds, it has an unsecured line of credit with a
major bank for $10.0 million. At present, there are no outstanding borrowings
against this line.
Results of Operations
- ---------------------
In the quarter ended December 31, 1995, net sales decreased 3.3% to $67.2
million from $69.5 million; a decrease of $2.3 million over the same period
last year. This sales decrease was composed of volume decline of 8.6% or
$6.0 million offset by price increases of approximately 5.3% or $3.7 million.
On a year to date basis, net sales decreased 0.5% to $130.9 million from
$131.6 million. This decrease was the result of a volume decline of 4.4% or
$5.8 million offset by price increases of 3.9% or $5.1 million. For both the
quarter and year to date the primary source of the decline occurred in the
Company's business forms lines. The Company's priority for the remainder of
the fiscal year is to counter the decline in the business forms product lines
through increased spending for mail order customer acquisition and retention
programs. In addition, the Company has initiated a process to divest
ownership of the One-Write Plus software line in order to expand the Company's
opportunity to market a full range of third-party software and compatible
forms. Although the Company believes these initiatives will have a positive
impact on revenue trends, the Company's ability to completely reverse the
decline over the remainder of the fiscal year is limited.
<PAGE>
For the quarter, cost of sales increased to 35.7% of sales from 35.2% last
year and to 36.2% from 35.4% on a year to date basis. This increase was due
primarily to one-time costs resulting from the revaluation of certain
software-related assets and investments in color printing technology. See
Note 6 in the Notes to Consolidated Financial Statements.
Selling and advertising expenses increased as a percentage of sales from
33.0% to 35.4% in the quarter. On a year to date basis, selling and
advertising expenses increased from 33.2% to 35.8% of sales. For the
quarter, this increase was due primarily to an operating charge related to
the ongoing restructuring program. For the year this increase was due
primarily to the aforementioned charge as well as to one-time costs resulting
from the revaluation of certain software-related assets. See Note 6 in the
Notes to Consolidated Financial Statements.
General and administrative expenses increased to 19.3% of sales from 19.0% for
the quarter and to 19.7% from 18.7% year to date. For the quarter, this
increase was due primarily to an operating charge related to the ongoing
restructuring program. For the year, this increase was due primarily to the
aforementioned charge as well as to costs resulting from the revaluation of
certain software-related assets. See Note 6 in the Notes to Consolidated
Financial Statements.
During fiscal 1994, the Company recorded a $5.5 million pretax charge related
to a restructuring program. As of December 31, 1995, approximately $.1
million is remaining in the reserve; these amounts will be expended pursuant
to severance and other agreements.
During the third quarter of fiscal 1995, the Company recorded a $2.0 million
pretax charge related to exit costs associated with the closure of the
Company's Wisconsin based SYCOM subsidiary. As of December 31, 1995
approximately $.6 million is remaining in the reserve, of which approximately
$.3 million will be expended pursuant to severance agreements and $.3 million
related to facility closure costs and equipment write-offs over the remainder
of fiscal 1996.
During the first quarter of fiscal 1996, the Company recorded a $3.0 million
pretax charge, or $.12 per share, related to exit costs associated with a
plan to restructure operations including the closure of the Company's
Flagstaff, Arizona manufacturing facility. The objectives of this program
are to improve manufacturing efficiency, to outsource select corporate
functions and to reduce fixed costs. The $3.0 million pretax charge consisted
of (i) approximately $1.8 million of anticipated cash payments related to
postemployment benefits in conjunction with the termination of approximately
110 employees of which approximately $1.5 million remains at December 31, 1995,
and (ii) approximately $1.2 million related to the anticipated non-cash
outflows associated with closure of the Flagstaff facility, all of which
remains at December 31, 1995. The Company also expects to incur an additional
$2.1 million of operating expense during the remainder of fiscal year 1996
associated with the plan to restructure operations. The restructuring program
is expected to be completed over the remainder of fiscal 1996.
Investment income decreased from 1995 to 1994 due to lower balances available
for investment as well as lower investment returns due to decreased interest
rates.
<PAGE>
The provision for income taxes as a percentage of pretax income decreased
from 1994 to 1995 due to a decrease in the proportion of taxable income
resulting from the exit cost charge taken in the first quarter of fiscal 1996
in relation to non-taxable permanent differences.
The loss on investment resulted from the Company's revaluation of its
investment in GST Software, plc. See Note 4 in the Notes to Consolidated
Financial Statements.
<PAGE>
PART II - OTHER INFORMATION
---------------------------
Item 1. LEGAL PROCEEDINGS
To the Company's knowledge, no material legal proceedings are pending
on the date hereof to which the Company is a party or to which any property of
the Company is subject.
Item 2. CHANGES IN SECURITIES
Not applicable.
Item 3. DEFAULTS UPON SENIOR SECURITIES
Not applicable.
Item 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
Not applicable.
Item 5. OTHER INFORMATION
Not applicable.
Item 6. EXHIBITS AND REPORTS ON FORM 8-K
a. Exhibits
Exhibit No. Description
----------- -----------
(2) Not applicable.
(3)(a) Certificate of Incorporation of the Registrant.
(Incorporated by reference to the Company's
Current Report on Form 8-K dated October 31,
1986.)
(3)(b) Certificate of Merger of New England Business
Service, Inc. (a Massachusetts corporation) and
the Company, dated October 24, 1986 amending the
Certificate of Incorporation of the Company by
adding Articles 14 and 15 thereto.
(Incorporated by reference to the Company's
Current Report on Form 8-K dated October 31,
1986.)
(3)(c) Certificate of Designations, Preferences and
Rights of Series A Participating Preferred
Stock of the Company, dated October
<PAGE>
27, 1989. (Incorporated by reference to the
Company's Annual Report on Form 10-K for the
fiscal year ended June 30, 1995, filed
September 15, 1995.)
(3)(d) By-Laws of the Registrant, as amended.
(4)(a) Specimen stock certificate for shares of
Common Stock, par value $1.00 per share.
(Incorporated by reference to the Company's
Annual Report on Form 10-K for the fiscal
year ended June 30, 1995, filed September
15, 1995.)
(4)(b) Amended and Restated Rights Agreement, dated
October 27, 1989 as amended as of October 20,
1994 (the "Rights Agreement"), between New
England Business Service, Inc. and The First
National Bank of Boston, National Association,
as rights agent, including as Exhibit B the
forms of Rights Certificate Election to Exercise
(Incorporated by reference to Exhibit 4 of the
Company's current report on Form 8-K dated
October 25, 1994.)
(10)(a) Separation Agreement dated December 14, 1995
between the Company and William C. Lowe.
(11) Statement re computation of per share earnings.
(15) Not applicable.
(18) Not applicable.
(19) Not applicable.
(22) Not applicable.
(23) Not applicable.
(24) Not applicable.
(27) Article 5 Financial Data Schedule.
b. Reports on Form 8-K.
No reports on Form 8-K were filed during the Company's second
quarter.
<PAGE>
SIGNATURES
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.
NEW ENGLAND BUSINESS SERVICE, INC.
----------------------------------
(Registrant)
February 8, 1996 /s/Russell V. Corsini, Jr.
- ---------------- --------------------------
Date Russell V. Corsini, Jr.
Principal Financial and Accounting
Officer
AMENDED AND RESTATED
(Through January 26, 1996)
BY-LAWS
OF
NEW ENGLAND BUSINESS SERVICE, INC.
ARTICLE ONE
Stockholders
Section 1. Annual Meeting. The annual meeting of the stockholders
shall be held on the fourth Friday of October in each year (or if that be a
legal holiday in the place where the meeting is to be held, on the next
succeeding full business day), or on such later date to which the Directors or
the Chairman of the Board or the President shall postpone such meeting, at the
hour fixed by the Directors or the Chairman of the Board or the President and
stated in the notice of the meeting. The purposes for which the annual
meeting is to be held, in addition to those prescribed by law, by the
Certificate of Incorporation or by these By-laws, may be specified by the
Directors or the Chairman of the Board or the President. If no annual meeting
is held in accordance with the foregoing provisions, the Directors shall cause
the meeting to be held as soon thereafter as convenient.
Section 2. Special Meetings. Special meetings of the stockholder may
be called by the Chairman of the Board, the President or the Directors. No
call of a special meeting of the stockholders shall be required if such notice
of the meeting shall have been waived in writing (including a telegram) by
every stockholder entitled to notice thereof, or by his attorney thereunto
authorized.
Section 3. Place of Meetings. All meetings of stockholders shall be
held at the principal office of the corporation unless a different place
(within the United States) is fixed by the Directors or the Chairman of the
Board or the President and stated in the notice of the meeting.
Section 4. Notices. Except as otherwise provided by law, notice of
all meetings of stockholders shall be given as follows, to wit: A written
notice, stating the place, day and hour thereof, shall be given by the
Secretary (or person or persons calling the meeting), not less than 10 nor
more than sixty days before the meeting, to each stockholder entitled to vote
thereat and to each stockholder who, by law, the Certificate of Incorporation,
or these By-laws, is entitled to such notice, by leaving such notice with him
or at his residence or usual place of business, or by mailing it postage
prepaid, and addressed to such stockholder at his address as it appears upon
the books of the corporation. Notices of all meetings of stockholders shall
state the purposes for which the meetings are called. No notice need be given
to any stockholder if a written waiver of notice,
<PAGE>
executed before or after the meeting by the stockholder or his attorney
thereunto authorized, is filed with the records of the meeting.
Section 5. Quorum. At any meeting of stockholders a quorum for the
transaction of business shall consist of one or more individuals appearing in
person and/or as proxies and owning and/or representing a majority of the
shares of the corporation then outstanding and entitled to vote, provided that
in the absence of a quorum, the stockholders may, by majority vote, adjourn
the meeting from time to time until a quorum shall be present.
Section 6. Voting and Proxies. Each stockholder shall have one vote
for each share of stock entitled to vote, and a proportionate vote for any
fractional share entitled to vote, held by him of record according to the
records of the corporation, unless otherwise provided by the Certificate of
Incorporation or by resolution or resolutions of the Board of Directors
establishing rights of Preferred Stock as provided for in the Certificate of
Incorporation. Stockholders may vote either in person or by written proxy
dated not more than three years before the meeting named therein, unless the
proxy provides for a longer period. Proxies shall be filed with the Secretary
before being voted at any meeting or any adjournment thereof. Every proxy
must be signed by the stockholder or by his attorney-in-fact. A proxy
purporting to be executed by or on behalf of a stockholder shall be deemed
valid unless challenged at or prior to its exercise.
Section 7. Action at Meeting. When a quorum is present, the action
of the stockholders on any matter properly brought before such meeting shall
be decided by the holders of a majority of the stock present or represented
and entitled to vote and voting on such matter, except where a different vote
is required by law, the Certificate of Incorporation or these By-laws. Any
election by stockholders shall be determined by a majority of the votes cast
by the stockholders entitled to vote at the election. No ballot shall be
required for such election unless requested by a stockholder present or
represented at the meeting and entitled to vote in the election.
Section 8. Special Action. Any action to be taken by the stockholders
may be taken without a meeting if all stockholders entitled to vote on the
matter consent to the action by a writing filed with the records of the
meetings of stockholders. Such consent shall be treated for all purposes as a
vote at a meeting.
Section 9. Record Date. The Directors may fix in advance a time
which shall be not more than sixty days prior to (a) the date of any meeting of
stockholders and not less than ten days prior to such meeting, (b) the date
for the payment of any dividend or the making of any distribution to
stockholders, or (c) the last day on which the consent or dissent of
stockholders may be effectively expressed for any purpose, as the record date
for determining the stockholders having the right to notice of and to vote at
such meeting and any adjournment thereof, the right to receive such dividend
or distribution, or the right to give consent or dissent. The Board of
Directors may fix a new record date, or confirm an existing record date, for
the purpose of determining the stockholders entitled to vote at any adjourned
or postponed meeting. In each such case only stockholders of record on such
<PAGE 2>
record date shall have such right, notwithstanding any transfer of stock on
the books of the corporation after the record date.
Section 10. Stockholder List. The officer who has charge of the
stock ledger of the corporation shall prepare and make, at least ten days
before every meeting of stockholders, a complete list of the stockholders,
arranged in alphabetical order, and showing the address of each stockholder
and the number of shares registered in the name of each stockholder. Such
list shall be open to the examination of any stockholder, for any purpose
germane to the meeting, during ordinary business hours, for a period of at
least ten days prior to the meeting, either at a place within the city or
other municipality or community where the meeting is to be held, which place
shall be specified in the notice of the meeting, or if not so specified, at
the place where the meeting is to be held. The list shall also be produced
and kept at the time and place of the meeting during the whole time thereof,
and may be inspected by any stockholder who is present. The stock ledger
shall be the only evidence as to who are the stockholders entitled to examine
the stock ledger, the list required by this Section or the books of the
corporation, or to vote at any meeting of stockholders.
ARTICLE TWO
Directors
Section 1. Powers. The Board of Directors, subject to any action at
any time taken by such stockholders as then have the right to vote, shall have
the entire charge, control and management of the corporation, its property and
business and may exercise all or any of its power.
Section 2. Election. A Board of Directors of such number, not less
than 3, nor more than 9, as shall be fixed by the stockholders, shall be
elected by the stockholders at the annual meeting.
Section 3. Vacancies. Any vacancy at any time existing in the Board
may be filled by the Board at any meeting. The stockholders having voting
power may, at a special meeting called at least in part for the purpose,
choose a successor to a Director whose office is vacant, and the person so
chosen shall displace any successor chosen by the Directors.
Section 4. Enlargement of the Board. The number of the Board of
Directors may be increased and one or more additional Directors elected at any
special meeting of the stockholders, called at least in part for the purpose,
or by the Directors by vote of a majority of the Directors then in office.
Section 5. Tenure. Except as otherwise provided by law, by the
Certificate of Incorporation or by these By-laws, Directors shall hold office
until the next annual meeting of stockholders and thereafter until their
successors are chosen and qualified. Any Director may resign by delivering
his written resignation to the corporation at its principal office or to the
Chairman of the Board, the President or the Secretary. Such resignation
shall be effective upon receipt unless it is specified to be effective at some
other time or upon the happening of some other event.
<PAGE 3>
Section 6. Removal. A Director may be removed from office with or
without cause by vote of a majority of the stockholders entitled to vote in
the election of Directors.
Section 7. Annual Meetings. Immediately after each annual meeting of
stockholders and at the place thereof, if a quorum of the Directors elected at
such meeting is present, there shall be a meeting of the Directors without
notice; but if such a quorum of the Directors elected thereat is not present
at such meeting, or if present does not proceed immediately thereafter to
hold a meeting of the Directors, the annual meeting of the Directors shall be
called in the manner hereinafter provided with respect to the call of special
meetings of Directors.
Section 8. Regular Meetings. Regular meetings of the Directors may
be held at such times and places as shall from time to time be fixed by
resolution of the Board and no notice need be given of regular meetings held
at times and places so fixed, provided however, that any resolution relating
to the holding of regular meetings shall remain in force only until the next
annual meeting of stockholders, and that if at any meeting of Directors at
which a resolution is adopted fixing the times or place or places for any
regular meetings any Director is absent, no meeting shall be held pursuant to
such resolution until either each such absent Director has in writing or by
telegram approved the resolution or seven days have elapsed after a copy of
the resolution certified by the Secretary has been mailed postage prepaid,
addressed to each such absent Director at his last known home or business
address.
Section 9. Special Meetings. Special meetings of the Directors may
be called by the Chairman of the Board, the President, the Treasurer or any
two Directors and shall be held at the place designated in the call thereof.
Section 10. Notices. Notices of any special meeting of the Directors
shall be given by the Secretary to each Director, by mailing to him, postage
prepaid, and addressed to him at his address as registered on the books of the
corporation, or if not so registered at his last known home or business
address, a written notice of such meeting at least four days before the
meeting or by delivering such notice to him at least forty-eight hours before
the meeting or by sending to him at least forty-eight hours before the meeting,
by prepaid telegram addressed to him at such address, notice of such meeting.
If the Secretary refuses or neglects for more than twenty-four hours after
receipt of the call to give notice of such special meeting, or if the office
of the Secretary is vacant or the Secretary is incapacitated, such notice may
be given by the officer or one of the Directors calling the meeting. Notice
need not be given to any Director if a written waiver of notice, executed by
him before or after the meeting, is filed with the records of the meeting, or
to any Director who attends the meeting without protesting prior thereto or at
its commencement the lack of notice to him. A notice or waiver of notice of
a Directors' meeting need not specify the purpose of the meeting.
Section 11. Quorum. At any meeting of the Directors a majority of
the number of Directors required to constitute a full Board, as fixed in or
determined pursuant to these By-laws as then in effect, shall constitute a
quorum for the transaction of business; provided always that any number of
<PAGE 4>
Directors (whether one or more and whether or not constituting a quorum)
present at any meeting or at any adjourned meeting may make any reasonable
adjournment thereof.
Section 12. Action at Meeting. At any meeting of the Directors at
which a quorum is present, the action of the Directors on any matter brought
before the meeting shall be decided by the vote of a majority of those present
and voting, unless a different vote is required by law, the Certificate of
Incorporation, or these By-laws.
Section 13. Special Action. Any action by the Directors may be taken
without a meeting if a written consent thereto is signed by all the Directors
and filed with the records of the Directors' meetings. Such consent shall be
treated as a vote of the Directors for all purposes.
Section 14. Committees. The Directors may, by vote of a majority of
the number of Directors required to constitute a full Board as fixed in or
determined pursuant to these By-laws as then in effect, elect from their
number an executive or other committees and may by like vote delegate thereto
some or all of their powers except those which by law, the Certificate of
Incorporation or these By-laws they are prohibited from delegating. Except
as the Directors may otherwise determine, any such committee may make rules
for the conduct of its business, but unless otherwise provided by the Directors
or in such rules, its business shall be conducted as nearly as may be in the
same manner as is provided by these By-laws for the Directors.
ARTICLE THREE
Officers
Section 1. Enumeration. The officers of the corporation shall be a
President, a Treasurer, a Secretary, and such Vice Presidents, Assistant
Treasurers, Assistant Secretaries, and other officers as may from time to
time be determined by the Directors.
Section 2. Election. The President, Treasurer and Secretary shall
be elected annually by the Directors at their first meeting following the
annual meeting of stockholders. Other officers may be chosen by the Directors
at such meeting or at any other meeting.
Section 3. Qualification. The President may, but need not be, a
Director. No officer need be a stockholder. Any two or more offices may be
held by the same person, provided that the President and the Secretary shall
not be the same person. Any officer may be required by the Directors to give
bond for the faithful performance of his duties to the corporation in such
amount and with such sureties as the Directors may determine.
Section 4. Tenure. Except as otherwise provided by law, by the
Certificate of Incorporation or by these By-laws, the President, Treasurer
and Secretary shall hold office until the first meeting of the Directors
following the annual meeting of stockholders, and thereafter until his
successor is
<PAGE 5>
chosen and qualified. Other officers shall hold office until the first
meeting of the Directors following the annual meeting of stockholders unless
a shorter term is specified in the vote choosing or appointing them. Any
officer may resign by delivering his written resignation to the corporation
at its principal office or to the Chairman of the Board, the President or the
Secretary, and such resignation shall be effective upon receipt unless it is
specified to be effective at some other time or upon the happening of some
other event.
Section 5. Removal. The Directors may remove any officer with or
without cause by a vote of a majority of the entire number of Directors then
in office, provided, that an officer may be removed for cause only after
reasonable notice and opportunity to be heard by the Board of Directors prior
to action thereon.
Section 6. Chairman of the Board. If the Directors shall appoint a
Chairman of the Board, he shall preside at all meetings of the Board and of
the stockholders at which he shall be present. In the absence or disability
of the President, the powers and duties of the President shall be exercised
and performed by the Chairman of the Board. He shall, subject to the Board
of Directors, be responsible for the long-range planning of the corporation.
He shall perform such duties and have such powers additional to the foregoing
as the Board shall from time to time designate.
Section 7. President. In the absence or disability of the Chairman
of the Board, the President shall, when present, preside at all meetings of
the stockholders and of the Directors. Except as otherwise expressly provided
by these By-laws or by action of the Board, it shall be the duty of the
President, and he shall have the power, to see that all orders and resolutions
of the Directors are carried into effect. The President, as soon as
reasonably possible after the close of each fiscal year, shall submit to the
Directors a report of the operations of the corporation for such year and a
statement of its affairs and shall from time to time report to the Directors
all matters within his knowledge which the interests of the corporation may
require to be brought to its notice. The President shall perform such duties
and have such powers additional to the foregoing as the Directors shall
designate.
Section 8. Vice Presidents. Each Vice President shall have such
powers and perform such duties as the Directors shall from time to time
designate.
Section 9. Treasurer. The Treasurer shall keep full and accurate
accounts of receipts and disbursements in books belonging to the corporation
and shall deposit all moneys and other valuable effects in the name and to the
credit of the corporation in such depositaries as shall be designated by the
Directors or in the absence of such designation in such depositaries as he
shall from time to time deem proper. He shall disburse the funds of the
corporation as shall be ordered by the Directors, taking proper vouchers for
such disbursements. He shall promptly render to the President and to the
Directors such statements of his transactions and accounts as the President
and Directors respectively may from time to time require. The Treasurer
shall perform such duties and have such powers additional to the foregoing
as the Directors may designate.
<PAGE 6>
Section 10. Assistant Treasurer. In the absence or disability of the
Treasurer, his powers and duties shall be performed by the Assistant
Treasurer, if only one, or if more than one, by the one designated for the
purpose by the Directors. Each Assistant Treasurer shall have such other
powers and perform such other duties as the Directors shall from time to time
designate.
Section 11. Secretary and Assistant Secretary. The Secretary or an
Assistant Secretary, if one be elected, shall record all proceedings of the
stockholders in a book to be kept therefor and, if there be no Secretary or
Assistant Secretary of the Board of Directors, shall also record all
proceedings of the Directors in a book to be kept therefor. If there be more
than one Assistant Secretary, then the one designated to so record such
proceedings by the Directors shall do so, otherwise a Temporary Secretary
designated by the person presiding at a meeting, shall perform the duties of
the Secretary. Unless the Directors shall appoint a transfer agent and/or
registrar or other officer or officers for the purpose, the Secretary shall
be charged with the duties of keeping or causing to be kept, accurate records
of all stock outstanding, stock certificates issued and stock transfers; and,
subject to such other duties or different rules as shall be adopted from time
to time by the Directors, such records may be kept solely in the stock
certificate books. The Secretary and each Assistant Secretary shall have such
other powers and perform such other duties additional to the foregoing as the
Directors may from time to time designate.
ARTICLE FOUR
Provisions Relating to Capital Stock
Section 1. Certificates of Stock. The shares of the corporation
shall be represented by a certificate or shall be uncertificated. Certificates
shall be signed by, or in the name of the corporation by, the Chairman or
Vice-Chairman of the Board of Directors, or the President or a Vice-President
and the Treasurer or an Assistant Treasurer, or the Secretary or an Assistant
Secretary of the corporation.
Upon the face or back of each stock certificate issued to represent any
partly paid shares, or upon the books and records of the corporation in the
case of uncertificated partly paid shares, shall be set forth the total amount
of the consideration to be paid therefor and the amount paid thereon shall be
stated.
If the corporation shall be authorized to issue more than one class of
stock or more than one series of any class, the powers, designations,
preferences and relative, participating, optional or other special rights of
each class of stock or series thereof and the qualifications, limitations or
restrictions of such preferences and/or rights shall be set forth in full or
summarized on the face or back of the certificate which the corporation shall
issue to represent such class or series of stock, provided that, except as
otherwise provided in Section 202 of the General Corporation Law of Delaware,
in lieu of the foregoing requirements, there may be set forth on the face or
back of the certificate which the
<PAGE 7>
corporation shall issue to represent such class or series of stock, a
statement that the corporation will furnish without charge to each
stockholder who so requests the powers, designations, preferences and
relative, participating, optional or other special rights of each class of
stock or series thereof and the qualifications, limitations or restrictions
of such preferences and/or rights.
Within a reasonable time after the issuance or transfer of
uncertificated stock, the corporation shall send to the registered owner
thereof a written notice containing the information required to be set forth
or stated on certificates pursuant to Sections 151, 156, 202(a) or 218(a) or
a statement that the corporation will furnish without charge to each
stockholder who so requests the powers, designations, preferences and
relative participating, optional or other special rights of each class of
stock or series thereof and the qualifications, limitations or restrictions
of such preferences and/or rights.
Any of or all the signatures on a certificate may be facsimile. In
case any officer, transfer agent or registrar who has signed or whose
facsimile signature has been placed upon a certificate shall have ceased to
be such officer, transfer agent or registrar before such certificate is issued,
it may be issued by the corporation with the same effect as if he were such
officer, transfer agent or registrar at the date of issue.
Section 2. Transfer of Stock. Upon surrender to the corporation or
the transfer agent of the corporation of a certificate for shares duly
endorsed or accompanied by proper evidence of succession, assignation or
authority to transfer, it shall be the duty of the corporation to issue a new
certificate to the person entitled thereto, cancel the old certificate and
record the transaction upon its books. Upon receipt of proper transfer
instructions from the registered owner of uncertificated shares such
uncertificated shares shall be cancelled and issuance of new equivalent
uncertificated shares or certificate shares shall be made to the person
entitled thereto and the transaction shall be recorded upon the books of the
corporation.
Section 3. Equitable Interests Not Recognized. The corporation shall
be entitled to treat the holder of record of any share or shares of stock as
the holder in fact thereof and shall not be bound to recognize any equitable
or other claim to or interest in such share or shares on the part of any other
person except as may be otherwise expressly provided by law.
Section 4. Lost or Destroyed Certificates. The Directors of the
corporation may, subject to any contrary provision of law, determine the
conditions upon which a new certificate of stock may be issued in place of
any certificate alleged to have been lost, stolen, destroyed, or mutilated.
ARTICLE FIVE
Stock in Other Corporations
Except as the Directors may otherwise designate, the Chairman of the
Board, President or Treasurer may waive notice of, and appoint any person or
persons to act as proxy or attorney-in-fact
<PAGE 8>
for this corporation (with or without power of substitution) at any meeting
of stockholders or shareholders of any other corporation or organization the
securities of which may be held by the corporation.
ARTICLE SIX
Inspection of Records
Books, accounts, documents and records of the corporation shall be
open to inspection by any Director at all times during the usual hours of
business. The original, or attested copies, of the Certificate of
Incorporation, By-laws and records of all meeting of the incorporators and
stockholders, and the stock and transfer records, which shall contain the
names of all stockholders and the record address and the amount of stock held
by each, shall be kept in Massachusetts at the principal office of the
corporation, or at an office of its transfer agent or of the Secretary. Said
copies and records need not be all kept in the same office. They shall be
available at all reasonable times to the inspection of any stockholder for any
proper purpose but not to secure a list of stockholders for the purpose of
selling said list or copies thereof or of using the same for a purpose other
than in the interest of the applicant, as a stockholder, relative to the
affairs of the corporation.
ARTICLE SEVEN
Checks, Notes, Drafts and Other Instruments
Checks, notes, drafts and other instruments for the payment of money
drawn or endorsed in the name of the corporation may be signed by any officer
or officers or person or person authorized by the Directors to sign the same.
No officer or person shall sign any such instrument as aforesaid unless
authorized by the Directors to do so.
ARTICLE EIGHT
Seal
The seal of the corporation shall be circular in form, bearing its
name, the word "Delaware," and the year of its incorporation. The Treasurer
shall have custody of the seal and may affix it (as may any other officer
authorized by the Directors) to any instrument requiring the corporate seal.
ARTICLE NINE
Fiscal Year
The fiscal year of the Corporation shall be the year ending with the
last Saturday of June in each year.
<PAGE 9>
ARTICLE TEN
Amendments
These By-laws may at any time be amended by vote of the stockholders,
provided that notice of the substance of the proposed amendment is stated in
the notice of the meeting. If authorized by the Certificate of Incorporation,
the Directors may also make, amend, or repeal these By-laws in whole or in
part, except with respect to any provisions thereof which by law, the
Certificate of Incorporation, or these By-laws requires action by the
stockholders. Not later than the time of giving notice of the meeting of
stockholders next following the making, amending or repealing by the Directors
of any By-law, notice thereof stating the substance of such change shall be
given to all stockholders entitled to vote on amending the By-laws. Any
By-law adopted by the Directors may be amended or repealed by the
stockholders.
ARTICLE ELEVEN
Indemnification
The corporation shall indemnify its officers and directors to the
extent permitted by the General Corporation Law of the State of Delaware.
ARTICLE TWELVE
Principal and Registered Offices
Section 1. Principal Office. The corporation's principal office
shall be 500 Main Street, Groton, Massachusetts or such other place as the
Board of Directors may designate.
Section 2. Registered Office. The corporation's registered office
shall be 229 South State Street, City of Dover, County of Kent, Delaware, or
such other place as the Board of Directors may designate.
<PAGE 10>
December 14, 1995
William C. Lowe
1235-4 Monument Street
Concord, MA
Re: Separation Agreement
Dear Bill:
This letter contains the terms of the agreement between you and New
England Business Service, Inc. ("NEBS" or the "Company") with respect to your
separation from the Company.
1. Termination of Employment. You hereby resign as President,
Chief Executive Officer, Director, member of the Executive Committee and as an
employee of the Company effective as of the date hereof, and, on behalf of the
Board of Directors of the Company, your resignation is hereby accepted. The
foregoing notwithstanding, you shall continue to be eligible to participate in
the Company's employee welfare benefit plans to the extent permitted
thereunder through January 15, 1996. During such period you will continue to
be eligible for all benefits under such plans, but no salary or retirement
benefits will accrue and you will have no authority to act on behalf of the
Company. Your last paycheck will be that deposited on your behalf on
December 15, 1995.
2. Stock Options. You agree that you will not exercise any stock
options held by you and that all such options shall terminate upon termination
of employment as provided in the applicable option grants.
3. Termination Payment. Within three days following the date
hereof, the Company shall pay to you $750,000 in cash by check, subject to
required withholdings. In addition, the Company shall pay in cash by check
an amount equal to $37,500 on each of March 31, June 30, September 30 and
December 31, 1996, subject to required withholdings. In addition, the Company
hereby releases you from all obligations relating to the advance of $106,000
made to you on November 30, 1995, waiving all interest thereon. The Company
will deliver to you the original note executed by you in connection with such
advance within three days following the date hereof. The payments
contemplated hereby are in lieu of all other rights for compensation and
benefits that you have from the Company, including without limitation any such
rights under the Company's 1996 Executive Bonus Plan and Stock Option plans.
<PAGE 2>
4. Restrictions. In consideration of the benefits provided to
you hereunder and other good and valuable consideration, the receipt and
adequacy of which you hereby acknowledge, and in recognition of the
confidential and proprietary business information which you have obtained in
the course of your employment with the Company, you hereby agree to the
following restriction on your activities on and after the date hereof:
a) For a period of eighteen (18) months following the date hereof,
you agree that you will not, directly, on your own behalf or on
behalf of an employer or other affiliate, solicit, identify for
solicitation, or be involved in attempting to recruit any person
who is now a management employee of NEBS while such person is a
management employee of NEBS. This shall not limit (i) your
employer or an affiliate from hiring or soliciting any NEBS
management employee without your direct or indirect involvement,
(ii) you from referring any NEBS management employee who
approaches you to the Human Resources Department of your employer
in a manner which does not otherwise violate the preceding
sentence; (iii) your providing your views on any person who has
previously approached your employer or your employer has previously
solicited without your involvement who is in serious discussions
with regard to employment; or (iv) your giving third party
references at the request of NEBS employees.
b) In addition to any other obligations under applicable law, for a
period of two (2) years following the date hereof, you agree that
you will not, directly or indirectly, on your own behalf or on
behalf of an employer or other affiliate, use or disclose to any
person any trade secrets or other confidential information of
NEBS, including without limitation the existence of the
Manhattan/Patriot project and the status or results thereof. The
foregoing sentence shall not prohibit any disclosure required by
valid legal process. You hereby represent and warrant that, to
the best of your knowledge, you do not have now, and you agree to
promptly return to NEBS, anything tangible or electronically
stored which constitutes, represents, evidences or records any
trade secret or other confidential information of NEBS, retaining
no copies thereof. The terms "trade secret" and other
"confidential" information shall include without limitation all
designs, processes, procedures, formulas, inventions or
improvements, marketing plans, business plans, information and
plans concerning strategic alliances, business acquisition plans,
personnel acquisition plans, and customer lists of the Company to
the extent that the same are confidential.
<PAGE 3>
c) For a period of two (2) years following the date hereof, you agree
that you will not, directly or indirectly, on your own behalf or on
behalf of an employer or other affiliate, interfere (for your
benefit or the benefit of your employer or an affiliate) with the
Company's existing custom print desk in-store NEBS employee services
targeted at home and small office businesses relationship with
Kinko's, Inc., Kinko's Graphics Corporation or their affiliates or
expansion of such existing services to other Kinko's stores. This
subparagraph will not preclude you or any employer of yours from
doing business with such entities or their affiliates.
d) For a period of one (1) year following the date hereof, you agree
that you will not, directly or indirectly, take any of the
following actions or participate with any other person, directly
or indirectly, in connection with any of the following actions
without the prior written consent of the Company or its Board of
Directors: (i) acquire, offer to acquire, or agree to acquire,
by purchase or otherwise, any voting securities or direct or
indirect rights to acquire any voting securities of the Company
or any subsidiary thereof or of any successor to or person in
control of the Company, or any assets of the Company or division
thereof or of any such successor or controlling person; (ii) make
any "solicitation" of "proxies" (as such terms are used in the
rules of the Securities Exchange Commission) to vote, or seek to
advise or influence any person or entity with respect to the
voting of, and voting securities of the Company; (iii) make any
public announcement with respect to, or submit a proposal for, or
offer of (with or without conditions) any extraordinary
transaction involving the Company or its securities or assets;
(iv) form, join or in any way participate in a "group" (as
defined in Section 13(d)(3) of the Securities Exchange Act of 1934,
as amended) in connection with any of the foregoing; or (v) request
the Company or any of its representatives to amend or waive any
provision of this subparagraph 6(d).
5. Communications; Cooperation. For a period of two (2) years
following the date hereof, you and the Company agree that no disparaging or
negative comments will be made concerning the Company or any of its officers,
directors, employees, or plans on the one hand, or you or your performance on
the other. The parties understand and agree that the foregoing sentence shall
not prohibit non-public communications of a normal competitive nature
concerning products and services offered by the Company. Public announcement
of your separation from the Company will only be made pursuant to a mutually
agreed upon press release; provided that this will not restrict any
announcement by your employer. You agree to cooperate with the Company in
connection with the internal transition of management through
<PAGE 4>
January 15, 1996; provided that such cooperation will not require you to
communicate with customers on behalf of NEBS.
6. Entire Agreement. This letter sets forth the entire agreement
of the parties with respect to the subject matter hereof. The benefits
granted to you hereunder are in lieu of any and all other rights or claims
which you may have for severance or other compensation of any kind.
Please acknowledge your agreement to the terms hereof by signing this
letter in the space provided below.
Sincerely,
NEW ENGLAND BUSINESS
SERVICE, INC.
By:/s/ Robert J. Murray
--------------------
Acknowledged and Agreed Robert J. Murray, Chairman,
President and CEO
/s/ William C. Lowe
- -----------------------
William C. Lowe
New England Business Service, Inc.
Statement Re Computation of Per Share Earnings
(In Thousands Except Per Share Data)
Exhibit 11
----------
Three Months Ended Six Months Ended
December 31, 1995 December 31, 1995
------------------ ------------------
Fully Fully
Primary Diluted Primary Diluted
------- ------- ------- -------
Shares
- ------
Weighted Average Shares
of Common Stock 14,899 14,899 14,885 14,885
Add:
Common Stock Equivalents
in the form of Stock Options 154 (1) 175 (1) 130 (1) 164 (1)
------- ------- ------- -------
Weighted Average Common Stock
and Common Stock Equivalents 15,053 15,074 15,015 15,049
======= ======= ======= =======
Earnings
- --------
Earnings per Consolidated
Statement of Income $ 3,912 $ 3,912 $ 4,453 $ 4,453
======= ======= ======= =======
Earnings per Share $ .26 $ .26 $ .30 $ .30
======= ======= ======= =======
(1) Amount considered immaterial for inclusion in earnings per share
calculation as defined in Accounting Principles Board Opinion No. 15.
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
THE SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM THE
CONSOLIDATED BALANCE SHEET OF NEW ENGLAND BUSINESS SERVICE, INC. AND ITS
SUBSIDIARIES AS OF DECEMBER 31, 1995 AND THE RELATED STATEMENTS OF CONSOLIDATED
INCOME AND CASH FLOWS AND IS QUALIFIED IN ITS ENTIRETY BY REFERENCE TO SUCH
FINANCIAL STATEMENTS.
</LEGEND>
<MULTIPLIER> 1,000
<S> <C> <C>
<PERIOD-TYPE> 3-MOS 6-MOS
<FISCAL-YEAR-END> JUN-29-1996 JUN-29-1996
<PERIOD-END> DEC-31-1995 DEC-31-1995
<CASH> 10,790 10,790
<SECURITIES> 16,091 16,091
<RECEIVABLES> 36,424 36,424
<ALLOWANCES> 3,504 3,504
<INVENTORY> 10,872 10,872
<CURRENT-ASSETS> 86,613 86,613
<PP&E> 103,265 103,265
<DEPRECIATION> 72,281 72,281
<TOTAL-ASSETS> 126,510 126,510
<CURRENT-LIABILITIES> 35,048 35,048
<BONDS> 0 0
<COMMON> 15,796 15,796
0 0
0 0
<OTHER-SE> 75,192 75,192
<TOTAL-LIABILITY-AND-EQUITY> 126,510 126,510
<SALES> 67,158 130,946
<TOTAL-REVENUES> 67,158 130,946
<CGS> 24,001 47,386
<TOTAL-COSTS> 36,786 75,622
<OTHER-EXPENSES> (241) 460
<LOSS-PROVISION> 722 1,415
<INTEREST-EXPENSE> 0 0
<INCOME-PRETAX> 6,612 8,480
<INCOME-TAX> 2,700 3,025
<INCOME-CONTINUING> 3,912 4,453
<DISCONTINUED> 0 0
<EXTRAORDINARY> 0 0
<CHANGES> 0 0
<NET-INCOME> 3,912 4,453
<EPS-PRIMARY> .26 .30
<EPS-DILUTED> .26 .30
</TABLE>
