FORM 10-Q
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
[ X ] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d)
OF THE SECURITIES EXCHANGE ACT OF 1934
For the thirteen week period ended April 1, 1995
OR
[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d)
OF THE SECURITIES EXCHANGE ACT OF 1934
For the transition period
from___________________________to___________________________
Commission File Number 0-8514
LIQUI-BOX CORPORATION
(Exact name of registrant as specified
in its charter)
OHIO 31-0628033
(State or other jurisdiction
(I.R.S. Employer
of incorporation or organization) Identification No.)
6950 Worthington-Galena Road, Worthington, Ohio 43085
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code (614) 888-9280
Not Applicable
(Former name, former address and former fiscal year, if
changed since last report.)
Indicate by check mark whether the registrant (1) has filed
all reports required to be filed by Section 13 or 15(d) of
the Securities Exchange Act of 1934 during the preceding 12
months (or for such shorter period that the registrant was
required to file such reports), and (2) has been subject to
such filing requirements for the past 90 days.
Yes X No
Indicate the number of shares outstanding of each of the
issuer's classes of common stock, as of the latest
practicable date.
Class
Outstanding at May 12, 1995
Common Stock, no par value 6,252,001 shares
Exhibit Index at Page 9
Page 1 of 12
LIQUI-BOX CORPORATION
INDEX
Page No.
Part I - Financial Information:
Item 1. Financial Statements
Condensed Consolidated Balance Sheets
April 1, 1995 and December 31, 1994 3-4
Condensed Consolidated Statements of Income
For the thirteen week periods ended
April 1, 1995 and April 2, 1994 5
Condensed Consolidated Statements of Cash Flows
For the thirteen week periods ended
April 1, 1995 and April 2, 1994 6
Notes to Condensed Consolidated Financial
Statements 7
Item 2. Management's Discussion and Analysis of
Financial Condition and Results
of Operations 8
Part II - Other Information - Items 1-6 9
Exhibit 11 - Statement Re Computation of Earnings
Per Share 10
Exhibit 27 - Financial Data Schedule 11
Signatures 12
-2-
Liqui-Box Corporation and Subsidiaries
Condensed Consolidated Balance Sheets
UNAUDITED
April 1, 1995 December 31, 1994
Assets
Current Assets:
Cash and cash equivalents $ 6,927,000 $ 4,341,000
Accounts receivable:
Trade, net of allowance
for doubtful accounts
of $528,000 and $594,000
at respective dates 14,533,000 15,209,000
Other 932,000 1,065,000
15,465,000 16,274,000
Inventories
Raw materials and
supplies 12,845,000 13,104,000
Work in process and
finished goods 13,416,000 11,313,000
26,261,000 24,417,000
Other current assets 3,349,000 2,816,000
Total Current Assets 52,002,000 47,848,000
Property, plant and equipment, at cost:
Buildings and leasehold
improvements 8,243,000 8,243,000
Equipment and vehicles 50,784,000 50,314,000
Equipment leased to customers 16,365,000 16,367,000
Less accumulated depreciation (53,756,000) (52,467,000)
21,636,000 22,457,000
Construction in process 5,860,000 4,291,000
Land 468,000 468,000
27,964,000 27,216,000
Other Assets:
Loans to officers and employees 76,000 76,000
Goodwill, net of amortization 10,682,000 10,723,000
Deferred charges and other assets 3,186,000 3,322,000
13,944,000 14,121,000
Total Assets $ 93,910,000 $ 89,185,000
The accompanying notes are an integral part of the financial statements.
Liqui-Box Corporation and Subsidiaries
Condensed Consolidated Balance Sheets
UNAUDITED
April 1, 1995 December 31, 1994
Liabilities and Stockholders' Equity
Current Liabilities:
Short-term borrowings $3,000,000 $1,000,000
Accounts payable 6,795,000 7,247,000
Dividends payable 625,000 627,000
Salaries, wages and related
liabilities 2,502,000 1,639,000
Federal, state and local taxes 2,383,000 1,987,000
Other accrued liabilities 2,512,000 2,117,000
Current obligations under capital lease 55,000 55,000
Total Current Liabilities 17,872,000 14,672,000
Other noncurrent liabilities:
Deferred income taxes 830,000 830,000
Stockholders' Equity:
Preferred stock without par value
2,000,000 shares authorized;
none issued
Common stock $.1667 stated value
20,000,000 shares authorized;
7,262,598 shares issued 1,210,000 1,210,000
Additional paid in capital 4,678,000 4,478,000
Cumulative translation adjustment 939,000 729,000
Retained earnings 89,748,000 88,017,000
Less:
Treasury stock, at cost--
1,010,944 and 994,932
shares at respective dates (21,367,000) (20,751,000)
Total Stockholders' Equity 75,208,000 73,683,000
Total Liabilities and
Stockholders' Equity $ 93,910,000 $ 89,185,000
The accompanying notes are an integral part of the financial statements.
Liqui-Box Corporation and Subsidiaries
Condensed Consolidated Statements of Income
UNAUDITED
Thirteen Weeks Ended
April 1, April 2,
1995 1994
Net Sales $ 33,646,000 $ 33,857,000
Cost of Sales 24,606,000 22,744,000
9,040,000 11,113,000
Selling, administrative and
development expenses 5,099,000 5,973,000
3,941,000 5,140,000
Interest and dividend income 27,000 45,000
Interest expense (40,000) (62,000)
Other income (expense) 5,000 17,000
3,933,000 5,140,000
Taxes on income 1,577,000 2,133,000
Net Income $ 2,356,000 $ 3,007,000
Earnings per common and common
equivalent share
Primary $0.37 $0.46
Fully Diluted $0.37 $0.46
Cash dividends per
common share $0.10 $0.10
Weighted average number of
common and common
equivalent shares used in
computing earnings per share
Primary 6,399,320 6,507,833
Fully Diluted 6,403,676 6,507,833
The accompanying notes are an integral part of the financial statements.
Liqui-Box Corporation and Subsidiaries
Condensed Consolidated Statements of Cash Flows
UNAUDITED
Thirteen Weeks Ended
April 1, April 2,
1995 1994
Operating Activities:
Net income $2,356,000 $3,007,000
Adjustments to reconcile net income to net cash
provided by operating activities:
Depreciation and amortization 1,971,000 1,861,000
Changes in operating assets and liabilities:
Decrease (increase) in accounts receivable 853,000 (2,623,000)
(Increase) decrease in inventories (1,854,000) 1,034,000
(Increase) decrease in other current
assets (532,000) 290,000
(Decrease) increase in accounts payable (154,000) 595,000
Increase in salaries, wages and related
liabilities 873,000 1,358,000
Increase in other accrued liabilities 395,000 1,939,000
Net Cash Provided by Operating Activities 3,908,000 7,461,000
Investing Activities:
Net change in property, plant and equipment (2,187,000) (1,087,000)
Other asset changes, net 5,000 (6,000)
Net Cash Used in Investing Activities (2,182,000) (1,093,000)
Financing Activities:
Acquisition of treasury shares (757,000) (321,000)
Sale of treasury shares 165,000 71,000
Cash dividends (625,000) (636,000)
Changes in loans to officers and employees 18,000
Proceeds of short-term borrowings 2,000,000
Repayment of short and long-term borrowings (2,000,000)
Net Cash Provided by (Used in) Financing
Activities 783,000 (2,868,000)
Effect of exchange rate changes on Cash 77,000 174,000
Increase in Cash and Cash Equivalents 2,586,000 3,674,000
Cash and cash equivalents at beginning of year 4,341,000 6,376,000
Cash and Cash Equivalents at End of
First Quarter $6,927,000 $10,050,000
The accompanying notes are an integral part of the financial statements.
LIQUI-BOX CORPORATION
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
UNAUDITED
1. The accompanying financial statements include the accounts
of Liqui-Box Corporation (the "Company")
and its subsidiaries.
The information furnished reflects all adjustments (all of
which were of a normal recurring nature) which are, in the
opinion of management, necessary to fairly present the
consolidated financial position, results of operations,
and changes in cash flows on a consistent basis.
Certain amounts in the prior year's financial statements have
been reclassified to conform with the 1995 presentation.
2. The accompanying unaudited consolidated financial statements
are presented in accordance with the requirements for Form 10-Q
and consequently do not include all the disclosures normally
required by generally accepted accounting principles or those
which are normally made in the Company's annual Form 10-K filing.
Reference should be made to the Company's aforementioned Form 10-K
for additional disclosures including a summary of the Company's
accounting policies, which have not significantly changed.
-7-
ITEM 2.
MANAGEMENT'S DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS
Net sales in the First Quarter 1995 were lower than net
sales in the First Quarter 1994 by 1%. The decrease in
sales dollars is attributable to a decline in unit sales in
the majority of the CompanyOs product lines, partially
offset by increased selling prices to mitigate the effect of
increased raw material costs.
Gross profit as a percentage of net sales was 26.9% in the
First Quarter 1995 and 32.8% in the First Quarter 1994. The
decrease in gross profit as a percent of sales can be
attributed to a minor shift in product mix, as well as the
costs associated with plant consolidations, higher
manufacturing costs at some plants and increases in raw
material costs partly offset by increased selling prices.
For the First Quarter of 1995, selling, administrative, and
development expenses were 15.2% of sales as compared to
17.6% in the First Quarter of 1994. The decrease reflects
the CompanyOs aggressive efforts to control its overhead
costs.
Income before taxes as a percentage of net sales was 11.7%
in the First Quarter 1995 and 15.2% in the First Quarter
1994. This decrease is a result of decreased gross profits
which have been partially offset, on a percentage basis, by
declining selling, administrative, and development expenses
for the First Quarter 1995.
The provision for income taxes was 40.1% of before tax
income for the First Quarter of 1995 and 41.5% for the First
Quarter 1994. The effective tax rate for the First Quarter
1995 is consistent with the overall rate for the year ended
December 31, 1994.
At the end of the First Quarter of 1995 and 1994, the
Company had no significant backlog of orders. Sales of the
CompanyOs products generally are closely coordinated with
the production of its customers. Typically orders are
filled within 30 days.
Total working capital was $34,130,000 at the end of the
First Quarter 1995 and $33,176,000 at year end 1994. The
ratio of current assets to current liabilities was 2.9 to 1
at the end of the First Quarter 1995 and 3.3 to 1 at year
end 1994. Cash provided by financing activities was
$783,000 for First Quarter 1995 compared to cash used of
$2,868,000 for First Quarter 1994. Net cash provided by
operating activities was $3,908,000 for First Quarter 1995
compared to $7,461,000 for First Quarter 1994.
The Company's major commitments for capital expenditures as
of April 1, 1995 were, as they have been in the past,
primarily for increased capacity at existing locations,
building filler machines for lease and tooling for new
projects. Funds required to fulfill these commitments will
be provided principally from operations with any additional
funding needed coming from an outstanding line of credit
with Huntington National Bank.
There have been no significant changes in capitalization
during the first three months of 1995, except for the
repurchase of treasury shares in the aggregate amount of
$757,000 which were acquired throughout the First Quarter
1995 for future corporate use. Funds for the repurchase of
treasury shares came from operating capital. The Company
has not entered into any significant financing arrangements
not reflected in the financial statements.
Management feels that inflation, in the form of increased
raw material prices, has had an ongoing and material effect
on the Company's operations during the First Quarter of 1995.
-8-
PART II. OTHER INFORMATION
Item 1-5. Inapplicable
Item 6. Exhibits and Reports on Form 8-K
(a) Exhibit Index
Exhibit 11. Statement Re Computation of Earnings Per Share
(page 10)
Exhibit 27. Financial Data Schedule (page 11)
(b) No reports on Form 8-K were filed during the
quarter ended April 1, 1995. However, a report on
Form 8-K, dated April 10, 1995, was filed by the Company
on April 10, 1995 in order to report the dismissal, on
April 3, 1995, of Ernst & Young LLP as independent
public accountants for the Company and its subsidiaries,
and the hiring of Deloitte & Touche LLP as independent public
accountants on April 7, 1995.
-9-
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.
LIQUI-BOX CORPORATION
(Registrant)
Date May 15, 1995 By /s/ Peter J. Linn
Peter J. Linn
Senior Vice President & Secretary
(Duly Authorized Officer)
(Principal Accounting Officer)
EXHIBIT (11)
LIQUI-BOX CORPORATION
STATEMENT RE COMPUTATION OF EARNINGS PER SHARE
Thirteen Weeks Ended
April 1, April 2,
1995 1994
Primary:
Weighted average number of common
shares outstanding 6,266,804 6,358,374
Net effect of dilutive stock options--
based on treasury stock method
using average market price. 132,516 149,459
Weighted average common and
common equivalent shares 6,399,320 6,507,833
Net Income $2,356,000 $3,007,000
Earnings per common and
common equivalent share $0.37 $0.46
Fully Diluted:
Weighted average number of common
shares outstanding 6,266,804 6,358,374
Net effect of dilutive stock options--
based on treasury stock method
using the quarter-end market price
if higher than average market price. 136,872 149,459
Fully Diluted Shares 6,403,676 6,507,833
Net Income $2,356,000 $3,007,000
Earnings per share
assuming full dilution $0.37 $0.46
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM THE
CONSOLIDATED BALANCE SHEET AND THE CONSOLIDATED STATEMENT OF INCOME
AND IS QUALIFIED IN ITS ENTIRETY BY REFERENCE TO SUCH FINANCIAL STATEMENTS.
</LEGEND>
<MULTIPLIER> 1000
<S> <C>
<PERIOD-TYPE> 3-MOS
<FISCAL-YEAR-END> DEC-30-1995
<PERIOD-END> APR-01-1995
<CASH> 6,927
<SECURITIES> 0
<RECEIVABLES> 16,868
<ALLOWANCES> 528
<INVENTORY> 26,261
<CURRENT-ASSETS> 52,002
<PP&E> 81,720
<DEPRECIATION> 53,756
<TOTAL-ASSETS> 93,910
<CURRENT-LIABILITIES> 17,872
<BONDS> 55
<COMMON> 1210
0
0
<OTHER-SE> 73,998
<TOTAL-LIABILITY-AND-EQUITY> 93,910
<SALES> 33,646
<TOTAL-REVENUES> 33,646
<CGS> 24,606
<TOTAL-COSTS> 29,705
<OTHER-EXPENSES> 0
<LOSS-PROVISION> 37
<INTEREST-EXPENSE> 40
<INCOME-PRETAX> 3,933
<INCOME-TAX> 1,577
<INCOME-CONTINUING> 2,356
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 13,327
<EPS-PRIMARY> 0.37
<EPS-DILUTED> 0.37
</TABLE>
