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FORM 10-K
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
(MARK ONE)
[ X ] ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934 (FEE REQUIRED)
For the fiscal year (fifty-two weeks) ended December 30, 1995.
OR
[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934 (NO FEE REQUIRED)
For the transition period from N / A to N / A .
------------------------------------
Commission File Number 0-8514
LIQUI-BOX CORPORATION
(Exact name of registrant as specified in its charter)
OHIO 31-0628033
(State or other jurisdiction of (I.R.S. Employer Identification No.)
incorporation or organization)
6950 Worthington-Galena Road, Worthington, Ohio 43085
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code (614) 888-9280
Securities registered pursuant to Section 12(b) of the Act: NONE
Securities registered pursuant to Section 12(g) of the Act:
Common Shares, No Par Value (6,117,606 outstanding at February 26, 1996)
(Title of Class)
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 by check mark if disclosure of delinquent filers pursuant to
Item 405 of Regulation S-K is not contained herein, and will not be
contained, to the best of Registrant's knowledge, in definitive proxy or
information statements incorporated by reference in Part III of this
Form 10-K or any amendment to this Form 10-K. [ ]
Based upon the closing price reported on the NASDAQ National Market
System on February 26, 1996, the aggregate market value of the voting
stock held by non-affiliates of the Registrant was $141,110,000.
Documents Incorporated by Reference:
(1) Portions of the Registrant's Annual Report to Shareholders for the
fiscal year ended December 30, 1995 are incorporated by reference into
Parts I and II of this Annual Report on Form 10-K.
(2) Portions of the Registrant's Definitive Proxy Statement for
its Annual Meeting of Shareholders to be held on April 24, 1996
are incorporated by reference into Part III of this Annual Report
on Form 10-K.
Exhibit Index on Page 12
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PART I
Item 1. Business:
GENERAL DEVELOPMENT OF BUSINESS - Liqui-Box Corporation and its subsidiaries
("Liqui-Box" or the "Company") is one of the largest companies in the world
specializing in the research, development and manufacture of bag-in-box flexible
liquid packaging systems. The Company was incorporated in January, 1962 in the
state of Ohio. Its principal offices are located at 6950 Worthington-Galena
Road, Worthington, Ohio.
Liqui-Box is a major producer of bag-in-box flexible packaging and related
filling equipment systems for the beverage, processed foods, dairy, detergent,
wine and other specialty products industries. The Company is also the leading
supplier of containers and dispensing systems to the bottled water industry.
The Company and its subsidiaries operate 13 manufacturing plants in the United
States and Europe. Through licensees, agents and direct exporters, Liqui-Box
serves markets in many countries worldwide.
DESCRIPTION OF PRINCIPAL PRODUCTS - The principal product of the Company is
plastic packaging. Such packaging includes specialty plastic bags and plastic
blow molded containers; injection molded plastic products used in liquid
packaging and a variety of industrial and commercial plastic packaging films. In
addition, the Company manufactures equipment for filling such packaging products
(less than 2% of total net sales). These products are marketed nationwide
primarily to the edible products industries principally through a direct sales
force. These products are also marketed internationally through a direct sales
force, licensees, agents and the Company's own export operations.
In 1995, the Company maintained its position in its principal markets of
beverage, processed foods and specialty industrial products. In addition, the
two premium drinking water products under the Alaskan Falls label, introduced in
1991, showed improvement in sales and continue to be introduced onto retail
shelves in selected Midwestern states. Sales from our European subsidiary showed
increased unit growth during the year.
COMPETITION - The plastic packaging market is large and highly fragmented. There
are numerous competitors and the major markets in which the Company sells its
products are very competitive. These products are in competition with similar
products produced by other manufacturers, and in some instances, with products
produced by other industries from other raw materials.
The plastic packaging industry is, therefore, highly price competitive. A
substantial number of manufacturers compete in the national and international
markets. None are considered to be dominant. According to information in the
public domain, Liqui-Box supplies less than one percent of the total plastic
packaging market in the United States.
While Liqui-Box's product and customer mix is generally diverse, The Perrier
Group of America constitutes a buying group of customers that is a material part
of the Company's business to the extent that loss of this buying group, with
which the Company has a good relationship, would have a material effect on the
Company's business. The risk associated with such a potential loss is mitigated
by an exclusive 10 year supply agreement between the Company and The Perrier
Group of America. Sales to this customer constituted 17%, 15% and 13% of total
sales in 1995, 1994 and 1993, respectively.
RESEARCH AND DEVELOPMENT - Liqui-Box emphasizes applied research and development
as a vital aspect of meeting the needs of its customers for plastic packaging.
Thus, the Company's research activities focus on the development of new plastic
packaging products and packaging systems to increase quality, improve production
efficiency and/or reduce costs to its customers and to the ultimate consumer.
The Company also devotes significant efforts to the research, development and
improvement of plastic packaging machinery and equipment for use by its
customers and in its own production operations.
2
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R & D expenditures in 1995, 1994 and 1993 were $1,265,000, $2,151,000 and
$1,954,000, respectively. All such activities were entirely Company-funded from
operations. It should also be noted that the funding levels only represent costs
directly charged to research and development. The amounts do not represent the
commitment and work of all employees of Liqui-Box to improving existing products
and processes and to developing new products and processes. Many employees who
are not part of the research and development organization of the Company spend
part of their efforts on developing new products and processes.
Information on research and development can also be found on Pages 14 and 15
[Management's Discussion and Analysis] and on Page 22 [Note 1, Accounting
Policies, of the Notes to Consolidated Financial Statements] of the 1995 Annual
Report and is incorporated herein by reference.
PATENTS AND LICENSES - Liqui-Box holds and maintains patents for packaging
design, fitments and packaging equipment which are used by the Company in its
production and which are also licensed to other manufacturers. Revenues from
royalties from these patents and licenses are not material to the total revenues
of the Company.
ENVIRONMENT - Consumer recognition of environmental friendliness of liquid
plastic packaging systems is growing. Compared to a conventional 5-gallon
plastic pail, the 5-gallon plastic bag-in-box reduces total plastic use by 90
percent. An empty, collapsed 5-gallon bag requires a small fraction of the
disposal space a comparable number of No. 10 cans, five wide-mouth one gallon
jars or one 5-gallon pail occupy. The corrugated box used to transport and store
packaged liquids is completely recyclable. Liqui-Box utilizes proper recycling
codes on all of its products for quick identification in community recycling
programs.
The bag-in-box design is increasingly seen as a major part of the solution to
the problem of environmental waste, storage and disposal. In addition, Liqui-Box
is asking its suppliers to experiment in the use of reprocessed material in the
products furnished to the Company and several promising applications are being
actively explored. The Company has also committed to zero scrap in the waste
stream of its plant operations through sorting and recycling for use in shipping
bags and other non food applications. This commitment represents the elimination
of more than one million pounds of waste annually.
As a major player in the solution of societal environmental problems, the
Company supports such conscientiousness and is not aware of any federal, state
or local statutory or regulatory provisions concerning environmental protection
or the discharge of materials into the environment that will have any material
effect on the capital expenditures, sales, earnings or competitive position of
the Company in the future.
RAW MATERIALS - The primary raw material essential to the Company's business is
plastic resin. There are a number of suppliers for this material and the market
is highly competitive. The Company is confident that its sources of supply of
resin are adequate for its needs in the foreseeable future.
SEASONALITY OF BUSINESS - The demand for some applications of certain plastic
packaging products is seasonal in nature. A mild summer, for example, can reduce
the Company's sales to the beverage industry. However, experience over the years
has shown that these variations generally offset each other and tend to level
the total demand for the Company's products throughout the year. As a result,
the Company usually experiences only minor variations in sales volume
attributable to seasonal demands.
BACKLOG OF ORDERS - Sales of the Company's packaging products generally are
closely coordinated with the product production of its customers. Typically,
orders are filled within 30 days. Therefore, the backlog of orders is not
significant.
EMPLOYEES - Liqui-Box employed 809 individuals in its operations throughout the
United States and in Europe on December 30, 1995. Approximately 11% of these
employees are members of collective bargaining units. The Company considers
itself an industry leader in participative management of its human resources,
placing a premium value on innovation, creativity and attentiveness to solving
customers' problems in packaging. Accordingly, the Company believes its
relations with its employee group to be an asset.
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FOREIGN OPERATIONS AND SALES - The Company's European operations constituted 13%
of consolidated net sales, less than 10% of consolidated income before taxes and
24% of consolidated identifiable assets as of and for the year ended December
30, 1995. European operations constituted 12% of net sales, less than 10% of
consolidated income before taxes and 18% of identifiable assets as of and for
the year ended December 31, 1994. Further information can be found on page 29
[Note 10 of the Notes to Consolidated Financial Statements] of the 1995 Annual
Report and is incorporated herein by reference.
Item 2. Properties:
At December 30, 1995, the Company owned or leased property at eighteen (18)
locations for manufacturing, warehousing, and offices with a total of
approximately 685,000 square feet of floor space. The following table summarizes
the properties owned or leased.
<TABLE>
<CAPTION>
Approximate Owned Expiration
Floor Space or Date of
Use and Location: (Sq. Ft.) Leased Lease
- ----------------- --------- ------ -----
<S> <C> <C> <C>
Executive offices, research and
manufacturing:
Worthington, Ohio 63,000 Owned N/A
Manufacturing:
Ashland, Ohio 26,000 Leased Less than 1 year
Ashland, Ohio 22,000 Owned N/A
Houston, Texas 33,000 Leased 1999
Elk Grove, California 36,000 Leased 1997
Elkton, Maryland 40,000 Leased 2001
Auburn, Massachusetts 30,000 Leased 1998
New Albany, Indiana 61,000 Owned N/A
Ontario, California 61,000 Leased 2003
Upper Sandusky, Ohio 40,000 Leased 1996
Lake Wales, Florida 8,000 Leased Less than 1 year
Lake Wales, Florida 4,000 Leased Less than 1 year
Sacramento, California 74,000 Leased 2002
Sacramento, California 24,000 Leased Less than 1 year
Nazareth, Pennsylvania 32,000 Leased 1996
Romiley, England 53,000 Leased 2006
Romiley, England 12,000 Leased Less than 1 year
Warehouse and other:
Columbus, Ohio (storage) 32,000 Owned N/A
LaMirada, California 34,000 Leased 1999
</TABLE>
The Company believes that its properties, plant, and equipment are all
in good operating condition and are adequate for its expected needs.
Certain of the leases contain renewal options which the Company expects
to exercise to maintain its operations at the facilities.
Item 3. Legal Proceedings:
Not applicable
Item 4. Submission of Matters to a Vote of Security Holders:
Not applicable
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Executive Officers of the Registrant:
The names, ages, and positions of all of the executive officers of Liqui-Box, as
of February 26, 1996, are listed below along with their business experience
during the past five years. Executive officers are appointed annually by the
Board of Directors at the annual meeting of directors immediately following the
annual meeting of shareholders. There are no arrangements or understandings
between any executive officer and any other person pursuant to which the
executive officer was selected.
<TABLE>
<CAPTION>
Name Age Title
---- --- -----
<S> <C> <C> <C>
Samuel B. Davis (1) 54 Chairman of the Board, Chief Executive
Officer, President, Treasurer and Director
Robert S. Hamilton (2) 67 Vice Chairman of the Board and Director
Peter J. Linn (3) 54 Secretary and Director
C. William McBee (4) 53 Vice President, Manufacturing and Director
Juan Jose Perez (5) 40 Vice President, Administration and
General Counsel
</TABLE>
(1) Samuel B. Davis has been Chairman of the Board, Chief Executive Officer
and Treasurer since August, 1982. Mr. Davis became President in
September, 1991 upon the retirement of Robert S. Hamilton.
(2) Robert S. Hamilton has been Vice Chairman of the Board since July, 1989.
Mr. Hamilton was President and Chief Operating Officer from April, 1984
to September, 1991 with a period of retirement from January, 1990 to May,
1990 and another period of retirement from September, 1991 until May
1995.
(3) Peter J. Linn has been Secretary since April 1990. Mr. Linn was Senior
Vice President from February, 1994 until April 1995. From January, 1983
to February, 1994, he held the position of Executive Vice President.
(4) C. William McBee became a director in April, 1995. Mr. McBee became Vice
President, Manufacturing in October, 1994. From February, 1994 to
October, 1995, Mr. McBee was Vice President of Administration. Prior to
February, 1994, Mr. McBee was a General Manager for Stone Container
Corporation, Columbus, Indiana, a manufacturer of corrugated cardboard
containers.
(5) Juan Jose Perez became Vice President, Administration and an executive
officer in October, 1995. Since October, 1994, Mr. Perez has held the
position of General Counsel. Prior to October, 1994, Mr. Perez was a
partner in the law firm of Schwartz, Kelm, Warren & Rameriez.
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<TABLE>
<CAPTION>
PART II
Pages
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The following items are incorporated herein by reference from the indicated
pages of the 1995 Annual Report:
Item 5. Market for Registrant's Common Equity
and Related Stockholder Matters 3
Item 6. Selected Financial Data 3
Item 7. Management's Discussion and Analysis
of Financial Condition and Results of Operation 14-15
Item 8. Financial Statements and Supplementary Data 16-30
Item 9. Changes in and Disagreements with Accountants on
Accounting and Financial Disclosure No response required
PART III
The following items are incorporated herein by reference from the indicated
pages of the Registrant's definitive Proxy Statement for its 1996 Annual Meeting
filed pursuant to Regulation 14A of the Securities Exchange Act of 1934.
Item 10. Directors and Executive Officers of the Registrant 3 - 4
In addition, certain information concerning the executive officers
of the Registrant called for in this Item 10 is set forth in the
portion of Part I of this Annual Report on Form 10-K, entitled
"Executive Officers of the Registrant".
Item 11. Executive Compensation 7 - 11
Neither the Report of the Board of Directors and Stock Option Committee
on executive compensation, nor the performance graph included in the
Registrant's definitive Proxy Statement for its 1996 Annual Meeting,
are incorporated herein by reference.
Item 12. Security Ownership of Certain Beneficial Owners 2 - 3
and Management
Item 13. Certain Relationships and Related Transactions 4 and 11
</TABLE>
6
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PART IV
Item 14. Exhibits, Financial Statement Schedules, and Reports on Form 8-K:
(a) (1) The following consolidated financial statements of Liqui-Box
Corporation and Subsidiaries, included in the Registrant's 1995 Annual
Report, are incorporated by reference in Item 8 and filed as Exhibit 13
to this report. The page numbers indicate the location of the
consolidated financial statements in the Registrant's 1995 Annual
Report.
<TABLE>
<S> <C>
Consolidated Balance Sheets
--December 30, 1995 and December 31, 1994 16-17
Consolidated Statements of Income
--Fifty-two weeks ended December 30, 1995,
Fifty-two weeks ended December 31, 1994 and
Fifty-two weeks ended January 1, 1994 18
Consolidated Statements of Cash Flows
--Fifty-two weeks ended December 30, 1995,
Fifty-two weeks ended December 31, 1994 and
Fifty-two weeks ended January 1, 1994 19
Consolidated Statements of Stockholders' Equity
--Fifty-two weeks ended December 30, 1995,
Fifty-two weeks ended December 31, 1994 and
Fifty-two weeks ended January 1, 1994 20-21
Notes to Consolidated Financial Statements 22-29
Report of Independent Auditors 30
Report of Independent Auditors. The page number indicates the
location in this Form 10-K 11
(a)(2) The following consolidated financial statement schedules of
Liqui-Box Corporation and Subsidiaries are included in Item 14(d). The
page number indicates the location in this Form 10-K.
II - Valuation and Qualifying Accounts 9
</TABLE>
Schedules other than those listed above are omitted because they are not
required or are not applicable.
7
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Item 14. (continued)
(a) (3) Listing of Exhibits - The following exhibits are included in Item
14(c). The page number indicates the location of the exhibit in this
Form 10-K.
<TABLE>
<CAPTION>
Exhibit No. Description Pages
- -----------------------------------------------------------------------------------------------------------------------------
<S> <C> <C>
3A Amended Articles of Incorporation of the Registrant as filed with the Ohio Secretary of
State on December 14, 1995.
3B Code of Regulations as Amended of the Registrant are
incorporated by reference to the Registrant's Form 10-Q for
the Fiscal Quarter ended July 1, 1995 filed with the
Securities and Exchange Commission (Exhibit 3B) (File number 0-8514). N/A
9 Voting Trust and Right of First Refusal Agreement, effective as of September 29, 1993,
by and among Mary Ann Davis, Samuel B. Davis, as Voting Trustee, and Samuel B.
Davis, individually, is incorporated by reference to Amendment No. 6 to Schedule 13D of
Samuel B. Davis filed on March 6, 1995 (Exhibit 1). N/A
10A-B EXECUTIVE COMPENSATION PLANS AND ARRANGEMENTS
- -----------------------------------------------------------------------------------------------------------------------------
10A 1990 Liqui-Box Stock Option Plan is incorporated by reference
to the Registrant's Form 10-Q for the Fiscal Quarter ended
June 30, 1990 filed with the Securities and Exchange Commission
( Exhibit 19(a)) (File number 0-8514). N/A
10B Summary of Profit Participation Program is incorporated by
reference to the Registrant's Form 10-K for the fiscal year
ended January 2, 1993 filed with the Securities and Exchange
Commission (Exhibit 10E) (File number 0-8514). N/A
11 Computation of Per Share Earnings
13 Annual Report to Shareholders for the fiscal year ended December 30, 1995
21 Subsidiaries of the Registrant
23A Independent Auditors Consent and Report on Schedule (Deloitte & Touche LLP)
23B Consent of Independent Auditors (Ernst & Young LLP)
24 Powers of Attorney
27 Financial Data Schedule
</TABLE>
(b) No report on Form 8-K was filed during the fourteen weeks ended
December 30, 1995. N/A
(c) Exhibits filed with this Annual Report on Form 10-K are attached
hereto. See Index to Exhibits at page 12.
(d) Financial Statement Schedules -- See Item 14.(a)(2)
8
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SCHEDULE II - VALUATION AND QUALIFYING ACCOUNTS
(amounts rounded to the nearest thousand dollars)
LIQUI-BOX CORPORATION AND SUBSIDIARIES
<TABLE>
<CAPTION>
Column A Column B Column C Column D Column E
Additions
--------------------------
Balance at Charged to Charged Balance at
Beginning Costs and to Other End of
Description of Period Expenses Accounts Deductions (1) Period
- -------------------------------- ---------- -------------------------- -------------- ----------
<S> <C> <C> <C> <C>
Reserves deducted from assets:
Fifty-two weeks ended
December 30, 1995:
Allowance for
doubtful accounts $594,000 $723,000 $ 638,000 $679,000
Fifty-two weeks ended
December 31, 1994:
Allowance for
doubtful accounts $635,000 $580,000 $ 621,000 $594,000
Fifty-two weeks ended
January 1, 1994:
Allowance for
doubtful accounts $566,000 $231,000 $ 162,000 $635,000
</TABLE>
(1) Uncollectible accounts written off, net of recoveries.
9
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SIGNATURES
Pursuant to the requirements of Section 13 or 15(d) 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
3/28/96 * Samuel B. Davis
Date: ________________________ By: _________________________________
Samuel B. Davis
Chairman of the Board, Chief Executive
Officer, President, Treasurer and Director
Pursuant to the requirements of the Securities Exchange Act of 1934, this
report has been signed below by the following persons on behalf of the
Registrant and in the capacities and on the dates indicated.
3/28/96 * Samuel B. Davis
Date: ________________________ By: _________________________________
Samuel B. Davis
Chairman of the Board, Chief Executive
Officer, President, Treasurer and Director
(Principal Executive and Financial
Officer)
3/28/96 * Jeanette A. Davis
Date: ________________________ By: _________________________________
Jeanette A. Davis
Director
3/28/96 * Robert S. Hamilton
Date: ________________________ By: _________________________________
Robert S. Hamilton
Vice Chairman and Director
3/28/96 * Peter J. Linn
Date: ________________________ By: _________________________________
Peter J. Linn
Secretary and Director
3/28/96 * C. William McBee
Date: ________________________ By: _________________________________
C. William McBee
Director
3/28/96 * Carl J. Aschinger, Jr.
Date: ________________________ By: _________________________________
Carl J. Aschinger, Jr.
Director
3/28/96
Date: ________________________ By: _________________________________
Russell M. Gertmenian
Director
3/28/96 * James B Holloway
Date: ________________________ By: _________________________________
James B Holloway
Controller
- -----------------------
/S/ Juan Jose Perez
3/28/96
Date: ________________________ *By: _________________________________
Juan Jose Perez
Attorney in Fact
10
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REPORT OF INDEPENDENT AUDITORS
The Board of Directors
Liqui-Box Corporation
Worthington, Ohio
We have audited the accompanying consolidated balance sheet of Liqui-Box
Corporation and subsidiaries as of December 31, 1994, and the related
consolidated statements of income, stockholders' equity, and cash flows for
each of the two years in the periods ended December 31, 1994 and January
1, 1994. Our audits also included the financial statement schedule listed in
the index at Item 14(a). These financial statements and schedule are the
responsibility of the Company's management. Our responsibility is to express an
opinion on these financial statements and schedule based on our audits.
We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to obtain
reasonable assurance about whether the financial statements are free of
material misstatement. An audit includes examining, on a test basis, evidence
supporting the amounts and disclosures in the financial statements. An audit
also includes assessing the accounting principles used and significant
estimates made by management, as well as evaluating the overall financial
statement presentation. We believe that our audits provide a reasonable basis
for our opinion.
In our opinion, the financial statements referred to above present fairly,
in all material respects, the consolidated financial position of Liqui-Box
Corporation and subsidiaries at December 31, 1994, and the consolidated results
of their operations and their cash flows for each of the two years in the
periods ended December 31, 1994 and January 1, 1994, in conformity with
generally accepted accounting principles. Also, in our opinion, the related
financial statement schedule, when considered in relation to the basic
financial statements taken as a whole, presents fairly in all material respects
the information set forth therein.
/s/ Ernst & Young LLP
Columbus, Ohio
March 2, 1995
11
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Index to Exhibits
Listing of Exhibits - The following exhibits are included in Item
14(c). The page number indicates the location of the exhibit in this
Form 10-K.
<TABLE>
<CAPTION>
Exhibit No. Description Pages
- -----------------------------------------------------------------------------------------------------------------------------
<S> <C>
3A Amended Articles of Incorporation of the Registrant as filed with the Ohio Secretary of
State on December 14, 1995.
3B Code of Regulations as Amended of the Registrant are
incorporated by reference to the Registrant's Form 10-Q for
the Fiscal Quarter ended July 1, 1995 filed with the
Securities and Exchange Commission (Exhibit 3B) (File number 0-8514).
9 Voting Trust and Right of First Refusal Agreement, effective as of September 29, 1993,
by and among Mary Ann Davis, Samuel B. Davis, as Voting Trustee, and Samuel B.
Davis, individually, is incorporated by reference to Amendment No. 6 to Schedule 13D of
Samuel B. Davis filed on March 6, 1995 (Exhibit 1).
10A 1990 Liqui-Box Stock Option Plan is incorporated by reference
to the Registrant's Form 10-Q for the Fiscal Quarter ended
June 30, 1990 filed with the Securities
and Exchange Commission ( Exhibit 19(a)) (File number 0-8514).
10B Summary of Profit Participation Program is incorporated by
reference to the Registrant's Form 10-K for the fiscal year
ended January 2, 1993 filed with the
Securities and Exchange Commission (Exhibit 10E) (File number 0-8514).
11 Computation of Per Share Earnings
13 Annual Report to Shareholders for the fiscal year ended December 30, 1995
21 Subsidiaries of the Registrant
23A Independent Auditors Consent and Report on Schedule (Deloitte & Touche LLP)
23B Consent of Independent Auditors (Ernst & Young LLP)
24 Powers of Attorney
27 Financial Data Schedule
</TABLE>
12
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EXHIBIT 3A
AMENDED ARTICLES OF INCORPORATION
of
Liqui-Box Corporation
ARTICLE I
The name of the Corporation shall be Liqui-Box Corporation.
ARTICLE II
The principal office of the Corporation shall be located in
Worthington, Franklin County, Ohio.
.
ARTICLE III
The purposes of the Corporation shall be as follows:
(a) To purchase, manufacture, or otherwise acquire in any
manner, own, use, operate, exhibit, maintain, sell, mortgage, lease, exchange,
license, distribute, or otherwise dispose of and generally deal or engage in or
with machinery, equipment, facilities, devices, materials, supplies, products,
inventions and patents in connection with liquid containers and the filling of
liquid containers, of every kind and description, together with any and all
other incidental, related or supporting businesses or activities;
(b) To engage in any lawful act or activity for which
corporations may be formed under Sections 1701.01 to 1701.98, inclusive, of the
Ohio Revised Code.
The foregoing shall not be construed to limit or restrict in
any manner the general powers conferred on corporations for profit by the laws
of the State of Ohio, and the same shall be construed both as objects and powers
and the enumeration of specific powers shall not be held to limit or restrict
the powers of the Corporation in any manner.
The Corporation reserves the right at any time or from time to
time to change its purposes in the manner now or hereafter permitted by statute,
and any such change authorized or approved by the holders of shares thereof
shall be binding and conclusive on every shareholder of the Corporation as fully
as if each such shareholder had voted therefor. No shareholder, notwithstanding
that he may have voted against
<PAGE> 2
such change or may have objected thereto in writing, shall be entitled to
payment of the fair cash value of his shares.
ARTICLE IV
The authorized number of shares of the Corporation shall be
twenty-two million (22,000,000), of which 20,000,000 shares shall be Common
Shares without par value and 2,000,000 shares shall be Preferred Shares without
par value. Each out standing Common Share and each outstanding Preferred Share
shall entitle the holder thereof to one vote on each matter properly submitted
to the shareholders for their vote, consent, waiver, release or other action,
subject to the provisions of law from time to time in effect with respect to
cumulative voting.
The directors of the Corporation are authorized to adopt
amendments to the Amended Articles of Incorporation in respect of any unissued
or treasury Preferred Shares and thereby to fix or change, to the full extent
now or hereafter permitted by Ohio law: the division of such shares into series
and the designation and authorized number of shares of each series; the dividend
rate; the dates of payment of dividends and the dates from which they are
cumulative; liquidation price; redemption rights and price; sinking fund
requirements; conversion rights; restrictions on the issuance of shares of any
class or series; and such other rights, preferences and limitations as shall not
be inconsistent with this ARTICLE IV.
No holder of Common Shares or Preferred Shares shall be
entitled as such, as a matter of right, to subscribe for or purchase any part of
any new or additional issue of shares of any class whatsoever, or of securities
convertible into any shares of any class whatsoever, whether now or hereafter
authorized and whether issued for cash or other consideration or by way of
dividend.
Of the 2,000,000 Preferred Shares, without par value, of the
Corporation, 500,000 shall constitute a series of Preferred Shares and shall
have, subject and in addition to the other provisions of this ARTICLE IV, the
following relative rights, preferences and limitations.
Section 1. Designation and Amount. The shares of such series
shall be designated as "Series A Preferred Shares" (the "Series A Preferred
Stock"). The number of shares of Series A Preferred Stock may be increased or
decreased by resolution of the Board of Directors; provided that no decrease
shall reduce the number of shares of Series A Preferred Stock to a number less
than that of the shares then out standing plus the number of shares issuable
upon exercise of outstanding rights, options or warrants or upon conversion of
outstanding securities issued by the Corporation.
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Section 2. Dividends and Distributions.
(A) Subject to the prior and superior rights of the holders of
any shares of any series of Preferred Shares ranking prior and superior to the
Series A Preferred Stock with respect to dividends, the holders of Series A
Preferred Stock in preference to the holders of Common Shares, without par value
(the "Common Stock"), of the Corporation and any other junior stock, shall be
entitled to receive, when, as and if declared by the Board of Directors out of
funds legally available for the purpose, quarterly dividends payable in cash on
the first day of January, April, July and October in each year (each such date
being referred to herein as a "Quarterly Dividend Payment Date"), commencing on
the first Quarterly Dividend Payment Date after the first issuance of a share or
fraction of a share of Series A Preferred Stock in an amount per share (rounded
to the nearest cent) equal to the greater of (a) $10.00, or (b) subject to the
provision for adjustment hereinafter set forth, ten times the aggregate per
share amount of all cash dividends, and ten times the aggregate per share amount
(payable in kind) of all non-cash dividends or other distributions other than a
dividend payable in shares of Common Stock or a subdivision of the outstanding
shares of Common Stock (by reclassification or otherwise), declared on the
Common Stock, since the immediately preceding Quarterly Dividend Payment Date,
or, with respect to the first Quarterly Dividend Payment Date, since the first
issuance of any share or fraction of a share of Series A Preferred Stock. In the
event the Corporation shall at any time after February 22, 1989 (the "Rights
Declaration Date") (i) declare any dividend on Common Stock payable in shares of
Common Stock, (ii) subdivide the outstanding Common Stock, or (iii) combine the
outstanding Common Stock into a smaller number of shares, then in each such case
the amount to which holders of shares of Series A Preferred Stock were entitled
immediately prior to such event under clause (b) of the preceding sentence shall
be adjusted by multiplying such amount by a fraction the numerator of which is
the number of shares of Common Stock outstanding immediately after such event
and the denominator of which is the number of shares of Common Stock that were
outstanding immediately prior to such event.
(B) The Corporation shall declare a dividend or distribution
on the Series A Preferred Stock as provided in paragraph (A) above immediately
after it declares a dividend or distribution on the Common Stock (other than a
dividend payable in shares of Common Stock); provided that, in the event no
dividend or distribution shall have been declared on the Common Stock during the
period between any Quarterly Dividend Payment Date and the next subsequent
Quarterly Dividend Payment Date, a dividend of $10.00 per share on the Series A
Preferred Stock shall nevertheless be payable on such subsequent Quarterly
Dividend Payment Date.
(C) Dividends shall begin to accrue and be cumulative on
outstanding shares of Series A Preferred Stock from the Quarterly Dividend
Payment Date next preceding the date of issue of such shares of Series A
Preferred Stock unless the date of issue of such shares is prior to the record
date for the first Quarterly Dividend Payment Date, in which case dividends on
such shares shall begin to accrue from the date
<PAGE> 4
of issue of such shares, or unless the date of issue is a Quarterly Dividend
Payment Date or is a date after the record date for the determination of holders
of shares of Series A Preferred Stock entitled to receive a quarterly dividend
and before such Quarterly Dividend Payment Date in either of which events such
dividends shall begin to accrue and be cumulative from such Quarterly Dividend
Payment Date. Accrued but unpaid dividends shall not bear interest. Dividends
paid on the shares of Series A Preferred Stock in an amount less than the total
amount of such dividends at the time accrued and payable on such shares shall be
allocated pro rata on a share-by-share basis among all such shares at the time
outstanding. The Board of Directors may fix a record date for the determination
of holders of shares of Series A Preferred Stock entitled to receive payment of
a dividend or distribution declared thereon, which record date shall be no more
than 30 days prior to the date fixed for the payment thereof.
Section 3. Voting Rights. The holders of shares of Series A
Preferred Stock shall have the following voting rights:
(A) Subject to the provision for adjustment hereinafter set
forth, each share of Series A Preferred Stock shall entitle the holder thereof
to one vote on all matters submitted to a vote of the shareholders of the
Corporation.
(B) Except as otherwise provided herein or by law, the holders
of shares of Series A Preferred Stock and the holders of shares of Common Stock
shall vote together as one class on all matters submitted to a vote of
shareholders of the Corporation.
Section 4. Certain Restrictions.
(A) Whenever quarterly dividends or other dividends or
distributions payable on the Series A Preferred Stock as provided in Section 2
are in arrears, thereafter and until all accrued and unpaid dividends and
distributions, whether or not declared, on shares of Series A Preferred Stock
outstanding shall have been paid in full, the Corporation shall not
(i) declare or pay dividends on, make any other
distributions on, or redeem or purchase or otherwise acquire for
consideration any shares of stock ranking junior (either as to
dividends or upon liquidation, dissolution or winding up) to the
Series A Preferred Stock;
(ii) declare or pay dividends on or make any other
distributions on any shares of stock ranking on a parity (either as to
dividends or upon liquidation, dissolution or winding up) with the
Series A Preferred Stock except dividends paid ratably on the Series A
Preferred Stock and all such parity stock on which dividends are
payable or in arrears in proportion to the total amounts to which the
holders of all such shares are then entitled;
<PAGE> 5
(iii) redeem or purchase or otherwise acquire for
consideration shares of any stock ranking on a parity (either as to
dividends or upon liquidation, dissolution or winding up) with the
Series A Preferred Stock provided that the Corporation may at any time
redeem, purchase or otherwise acquire shares of any such parity stock
in exchange for shares of any stock of the Corporation ranking junior
(either as to dividends or upon dissolution, liquidation or winding up)
to the Series A Preferred Stock; or
(iv) purchase or otherwise acquire for consideration
any shares of Series A Preferred Stock or any shares of stock ranking
on a parity with the Series A Preferred Stock except in accordance with
a purchase offer made in writing or by publication (as determined by
the Board of Directors) to all holders of such shares upon such terms
as the Board of Directors, after consideration of the respective annual
dividend rates and other relative rights and preferences of the
respective series and classes, shall determine in good faith will
result in fair and equitable treatment among the respective series or
classes.
(B) The Corporation shall not permit any subsidiary of the
Corporation to purchase or otherwise acquire for consideration any shares of
stock of the Corporation unless the Corporation could, under paragraph (A) of
this Section 4, purchase or otherwise acquire such shares at such time and in
such manner.
Section 5. Reacquired Shares. Any shares of Series A Preferred
Stock purchased or otherwise acquired by the Corporation in any manner
whatsoever shall be retired and cancelled promptly after the acquisition
thereof. All such shares shall upon their cancellation become authorized but
unissued Preferred Shares and may be reissued as part of a new series of
Preferred Shares to be created by resolution or resolutions of the Board of
Directors, subject to the conditions and restrictions on issuance set forth
herein or otherwise required by law.
Section 6. Liquidation, Dissolution or Winding Up.
(A) Upon any liquidation (voluntary or otherwise), dissolution
or winding up of the Corporation, no distribution shall be made to the holders
of shares of stock ranking junior (either as to dividends or upon liquidation,
dissolution or winding up) to the Series A Preferred Stock unless, prior
thereto, the holders of shares of Series A Preferred Stock shall have received
per share, the greater of ten times $50 or ten times the payment made per share
of Common Stock, plus an amount equal to accrued and unpaid dividends and
distributions thereon, whether or not declared, to the date of such payment (the
"Series A Liquidation Preference"). Following the payment of the full amount of
the Series A Liquidation Preference, no additional distributions shall be made
to the holders of shares of Series A Preferred Stock unless, prior
<PAGE> 6
thereto, the holders of shares of Common Stock shall have received an amount per
share (the "Common Adjustment") equal to the quotient obtained by dividing (i)
the Series A Liquidation Preference by (ii) ten (as appropriately adjusted as
set forth in subparagraph C below to reflect such events as stock splits, stock
dividends and recapitalizations with respect to the Common Stock) (such number
in clause (ii), the "Adjustment Number"). Following the payment of the full
amount of the Series A Liquidation Preference and the Common Adjustment in
respect of all outstanding shares of Series A Preferred Stock and Common Stock,
respectively, holders of Series A Preferred Stock and holders of shares of
Common Stock shall receive their ratable and proportionate share of the
remaining as sets to be distributed in the ratio of the Adjustment Number to 1
with respect to such Preferred Stock and Common Stock, on a per share basis,
respectively.
(B) In the event there are not sufficient assets available to
permit payment in full of the Series A Liquidation Preference and the
liquidation preferences of all other series of Preferred Shares, if any, which
rank on a parity with the Series A Preferred Stock, then such remaining assets
shall be distributed ratably to the holders of such parity shares in proportion
to their respective liquidation preferences. In the event there are not
sufficient assets available to permit payment in full of the Common Adjustment,
then such remaining assets shall be distributed ratably to the holders of Common
Stock.
(C) In the event the Corporation shall at any time after the
Rights Declaration Date (i) declare any dividend on Common Stock payable in
shares of Common Stock, (ii) subdivide the outstanding Common Stock, or (iii)
combine the outstanding Common Stock into a smaller number of shares, then in
each such case the Adjustment Number in effect immediately prior to such event
shall be adjusted by multiplying such Adjustment Number by a fraction the
numerator of which is the number of shares of Common Stock outstanding
immediately after such event and the denominator of which is the number of
shares of Common Stock that were outstanding immediately prior to such event.
Section 7. Consolidation, Merger, etc. In case the Corporation
shall enter into any consolidation, merger, combination or other transaction in
which the shares of Common Stock are exchanged for or changed into other stock
or securities, cash and/or any other property, then in any such case the shares
of Series A Preferred Stock shall at the same time be similarly exchanged or
changed in an amount per share (subject to the provision for adjustment
hereinafter set forth) equal to ten times the aggregate amount of stock,
securities, cash and/or any other property (payable in kind), as the case may
be, into which or for which each share of Common Stock is changed or exchanged.
In the event the Corporation shall at any time after the Rights Declaration Date
(i) declare any dividend on Common Stock payable in shares of Common Stock, (ii)
subdivide the outstanding Common Stock, or (iii) combine the outstanding Common
Stock into a smaller number of shares, then in each such case the amount set
forth in the preceding sentence with respect to the exchange or change of shares
of Series A
<PAGE> 7
Preferred Stock shall be adjusted by multiplying such amount by a fraction the
numerator of which is the number of shares of Common Stock outstanding
immediately after such event and the denominator of which is the number of
shares of Common Stock that are outstanding immediately prior to such event.
Section 8. Redemption. The shares of Series A Preferred Stock
shall not be redeemable.
Section 9. Ranking. The Series A Preferred Stock shall rank
junior to all other series of the Corporation's Preferred Shares as to the
payment of dividends and the distribution of assets, unless the terms of any
such series shall provide other wise.
Section 10. Fractional Shares. Series A Preferred Stock may be
issued in fractions of a share which shall entitle the holder, in proportion to
such holder's fractional shares, to exercise voting rights, receive dividends,
participate in distributions and to have the benefit of all other rights of
holders of Series A Preferred Stock.
ARTICLE V
The Corporation shall be authorized to purchase any of its
outstanding Common Shares by purchase or other acquisition upon such terms and
conditions as shall be deemed by the Board of Directors to be reasonable and
fair.
ARTICLE VI
(a) The Corporation shall indemnify any person who was or is a
party or is threatened to be made a party, to any threatened, pending, or
completed action, suit, or proceeding, whether civil, criminal, administrative,
or investigative, other than an action by or in the right of the Corporation by
reason of the fact that he is or was a director, officer, employee, or agent of
the Corporation, or is or was serving at the request of the Corporation as a
director, trustee, officer, employee, or agent of another corporation, domestic
or foreign, non-profit or for profit, partnership, joint venture, trust, or
other enterprise, against expenses, including attorneys' fees, judgments, fines,
and amounts paid in settlement actually and reasonably incurred by him in
connection with such action, suit, or proceeding if he acted in good faith and
in a manner he reasonably believed to be in or not opposed to the best
interests of the Corporation, and with respect to any criminal action or
proceeding, had no reasonable cause to believe his conduct was unlawful. The
termination of any action, suit, or proceeding by judgment, order, settlement,
conviction, or upon a plea of nolo contendere or its equivalent, shall not, of
itself, create a presumption that the person did not act in good faith and in a
manner which he reasonably believed to be in or not opposed to the best
interests of
<PAGE> 8
the Corporation, and with respect to any criminal action or proceeding, he had
reasonable cause to believe that his conduct was unlawful.
(b) The Corporation shall indemnify any person who was or is a
party, or is threatened to be made a party to any threatened, pending, or
completed action or suit by or in the right of the Corporation to procure a
judgment in its favor by reason of the fact that he is or was a director,
officer, employee, or agent of the Corporation, or is or was serving at the
request of the Corporation as a director, trustee, officer, employee, or agent
of another corporation, domestic or foreign, nonprofit or for profit, part-
nership, joint venture, trust, or other enterprise against expenses, including
attorneys' fees, actually and reasonably incurred by him in connection with the
defense or settlement of such action or suit if he acted in good faith and in a
manner he reasonably believed to be in or not opposed to the best interests of
the Corporation, except that no indemnification shall be made in respect of any
claim, issue, or matter as to which such person shall have been adjudged to be
liable for negligence or misconduct in the performance of his duty to the
Corporation unless, and only to the extent that the Court of Common Pleas, or
the court in which such action or suit was brought shall determine upon
application that, despite the adjudication of liability, but in view of all the
circumstances of the case, such person is fairly and reasonably entitled to
indemnity for such expenses as the Court of Common Pleas or such other court
shall deem proper.
(c) To the extent that a director, trustee, officer, employee,
or agent has been successful on the merits or otherwise in defense of any
action, suit, or proceeding referred to in subsections (a) and (b) hereof, or
in defense of any claim, issue, or matter therein, he shall be indemnified
against expenses, including attorneys' fees, actually and reasonably incurred by
him in connection therewith.
(d) Any indemnification under subsections (a) and (b) hereof,
unless ordered by a court, shall be made by the Corporation only as authorized
in the specific case upon a determination that indemnification of the director,
trustee, officer, employee, or agent is proper in the circumstances because he
has met the applicable standard of conduct set forth in subsections (a) and (b)
hereof. Such determination shall be made (1) by a majority vote of a quorum
consisting of directors of the indemnifying corporation who were not and are
not parties to or threatened with any such action, suit, or proceeding, or (2),
if such a quorum is not obtainable or if a majority vote of a quorum of
disinterested directors so directs, in a written opinion by independent legal
counsel other than an attorney, or a firm having associated with it an attorney,
who has been retained by or who has performed services for the Corporation, or
any person to be indemnified within the past five years, or (3) by the
shareholders, or (4) by the Court of Common Pleas or the court in which such
action, suit or proceeding was brought. Any determination made by the
disinterested directors under (1) above in this section or by independent legal
counsel under (2) above in this section shall be promptly communicated to the
person who threatened or brought the action or suit, by or in the right of the
Corporation under subsection (b) hereof, and within ten days after receipt of
such notification, such person shall have the right to petition the Court of
<PAGE> 9
Common Pleas or the court in which such action or suit was brought to review the
reasonableness of such determination.
(e) Expenses, including attorneys' fees, incurred in defending
any action, suit, or proceeding referred to in subsections (a) and (b) hereof,
may be paid by the Corporation in advance of the final disposition of such
action, suit, or proceeding as authorized by the directors in the specific case
upon receipt of an undertaking by or on behalf of the director, trustee,
officer, employee, or agent to repay such amount, unless it shall ultimately be
determined that he is entitled to be indemnified by the Corporation as
authorized in this section.
(f) The indemnification provided by this section shall not be
deemed exclusive of any other rights to which those seeking indemnification may
be entitled under the articles or the regulations or any agreement, vote of
shareholders or disinterested directors, or otherwise, both as to action in his
official capacity and as to action in another capacity while holding such
office, and shall continue as to a person who has ceased to be a director,
trustee, officer, employee, or agent and shall insure to the benefit of the
heirs, executors, and administrators of such a person.
(g) The Corporation may purchase and maintain insurance on
behalf of any person who is or was a director, officer, employee, or agent of
the Corporation, or is or was serving at the request of the Corporation as a
director, trustee, officer, employee, or agent of another corporation, domestic
or foreign, nonprofit or for profit, partnership, joint venture, trust, or
other enterprise against any liability asserted against him and incurred by him
in any such capacity, or arising out of his status as such, whether or not the
Corporation would have the power to indemnify him against such liability under
this section.
(h) As used in this section, references to "corporation"
includes all constituent corporations in a consolidation or merger and the new
or surviving corporation, so that any person who is or was a director, officer,
employee, or agent of such a constituent corporation, or is or was serving at
the request of such constituent corporation as a director, trustee, officer,
employee, or agent of another corporation, domestic or foreign, nonprofit or for
profit, partnership, joint venture, trust, or other enterprise shall stand in
the same position under this section with respect to the new or surviving
corporation as he would if he had served the new or surviving corporation in the
same capacity.
ARTICLE VII
Except as otherwise provided in these Articles of
Incorporation including without limitation ARTICLE VIII, notwithstanding any
provision of the Ohio Revised Code as now or hereafter in force requiring for
any purpose the vote, consent, waiver
<PAGE> 10
or release of the holders of shares of the Corporation entitling them to
exercise two-thirds or any other proportion of the voting power of the
Corporation or of any class or classes thereof, such action may be taken by the
vote, consent, waiver or release of the holders of shares entitling them to
exercise not less than a majority of the voting power of the Corporation or of
such class or classes.
ARTICLE VIII
(a)(1) In addition to any affirmative vote required by law or
under any other provision of these Articles of Incorporation, and except as
otherwise expressly provided in this ARTICLE VIII:
(A) any merger or consolidation of this Corporation or any
Subsidiary (as hereinafter defined in paragraph (c)(8) of this ARTICLE VIII)
with or into (i) any Substantial Shareholder (as hereinafter defined in
paragraph (c)(2) of this ARTICLE VIII) or (ii) any other corporation (whether or
not itself a Substantial Shareholder) which, after such merger or consolidation,
would be an Affiliate (as hereinafter defined in paragraph (c)(7) of this
ARTICLE VIII) of a Substantial Shareholder, or
(B) any sale, lease, exchange, mortgage, pledge, transfer or
other disposition (in one transaction or a series of related transactions) to
or with any Substantial Shareholder of any substantial part (as hereinafter
defined in paragraph (c)(9) of this ARTICLE VIII) of the assets of this
Corporation or of any Subsidiary, or
(C) the issuance or transfer by this Corporation or by any
Subsidiary (in one transaction or a series of related transactions) of any
equity securities (as hereinafter defined in paragraph (c)(11) of this ARTICLE
VIII) of this Corporation or any Subsidiary to any Substantial Shareholder in
exchange for cash, securities or other property (or a combination thereof)
having an aggregate fair market value of $15,000,000 or more, or
(D) the adoption of any plan or proposal for the liquidation
or dissolution of this Corporation if, as of the record date for the
determination of shareholders entitled to notice thereof and to vote thereon,
any person shall be a Substantial Shareholder, or
(E) any reclassification of securities (including any reverse
stock split) or recapitalization of this Corporation, or any reorganization,
merger or consolidation of this Corporation with any of its Subsidiaries or any
similar transaction (whether or not with or into or otherwise involving a
Substantial Shareholder) which has the effect, directly or indirectly, of
increasing the proportionate share of the outstanding securities of any class of
equity securities of this Corporation or any Subsidiary which is directly or
indirectly beneficially owned (as hereinafter defined in paragraph (c)(3) of
this ARTICLE VIII) by any Substantial Shareholder,
<PAGE> 11
shall (except as otherwise expressly provided in these Articles of
Incorporation) require the affirmative vote of the holders of then outstanding
Voting Shares (as hereinafter defined in paragraph (c)(10) of this ARTICLE
VIII) entitled to cast at least eighty percent (80%) of the votes entitled to be
cast by the holders of all of the then outstanding Voting Shares; provided that
such affirmative vote must include the affirmative vote of the holders of Voting
Shares entitled to cast a majority of the votes entitled to be cast by the
holders of all then outstanding Voting Shares not beneficially owned by any Sub-
stantial Shareholder. Each such affirmative vote shall be required
notwithstanding the fact that no vote may be required, or that some lesser
percentage may be specified, by law or in any agreement with any national
securities exchange or otherwise.
(2) The term "business combination" as used in this ARTICLE VIII shall
mean any transaction which is described in any one or more of clauses (A)
through (E) of paragraph (a) (1) of this ARTICLE VIII.
(b) The provisions of this ARTICLE VIII shall not be
applicable to any business combination, the terms of which shall be approved,
prior to the date the Substantial Shareholder which is a party thereto or whose
proportionate share of the outstanding securities of any class of equity
securities of this Corporation or any Subsidiary is increased by reason thereof,
or, in the case of a business combination described in clause (D) of paragraph
(a)(1) of this ARTICLE VIII, prior to the date any Substantial Shareholder
affected by such business combination, became a Substantial Shareholder by
two-thirds (2/3) of the whole Board (as hereinafter defined in paragraph (c)(6)
of this ARTICLE VIII), but only if a majority of the members of the Board of
Directors acting upon such matter shall be continuing directors (as hereinafter
defined in paragraph (c)(5) of this ARTICLE VIII).
(c) For the purposes of this ARTICLE VIII:
(1) A "person" shall mean any individual, firm, corporation or other
entity.
(2) "Substantial Shareholder" shall mean any person (other than (i)
this Corporation or any Subsidiary, (ii) any profit-sharing, employee share
ownership or other employee benefit plan of this Corporation or any Subsidiary
or any trustee of or fiduciary with respect to any such plan when acting in
such capacity, or (iii) persons who, immediately after the adoption of this
ARTICLE VIII, are Affiliates of this Corporation owning in excess of ten percent
(10%) of the outstanding Common Shares, and the respective successors,
executors, legal representatives, heirs and legal assigns (provided that any
such legal assign is such an Affiliate immediately prior to assignment, transfer
or other disposition to such assign of such persons) who or which, as of the
record date for the determination of shareholders entitled to notice of and to
vote on any business combination, or immediately prior to the consummation of
any such business combination (other than a business combination referred to in
paragraph (a)(1)(D) of this ARTICLE VIII:
<PAGE> 12
(A) is the beneficial owner (as hereinafter defined in
subparagraph (3) of this paragraph (c)), directly or indirectly, of more than
fifteen percent (15%) of the Voting Shares (determined solely on the basis of
the total number of Voting Shares so beneficially owned [and without giving
effect to the number or percentage of votes entitled to be cast in respect of
such shares] in relation to the total number of Voting Shares issued and
outstanding), or
(B) is an Affiliate of this Corporation and at any time within
three years prior thereto was the beneficial owner, directly or indirectly, of
more than fifteen percent (15%) of the then outstanding Voting Shares
(determined as aforesaid), or
(C) is an assignee of or has otherwise succeeded to any shares
of capital stock of this Corporation which were at any time within three years
prior thereto beneficially owned by any Substantial Shareholder, and such
assignment or succession shall have occurred in the course of a transaction or
series of transactions not involving a public offering within the meaning of the
Securities Act of 1933.
(3) "Beneficial ownership" shall be determined pursuant to Rule 13d-3
of the General Rules and Regulations under the Securities Exchange Act of 1934
(or any successor rule or statutory provision) or, if said Rule 13d-3 shall be
rescinded and there shall be no successor rule or statutory provision thereto,
pursuant to said Rule 13d-3 as in effect on January 1, 1986; provided, however,
that a person shall, in any event, also be deemed to be the "beneficial owner"
of any Voting Shares:
(A) which such person or any of its Affiliates or Associates
[as hereinafter defined in subparagraph (7) of this paragraph (c)] beneficially
own, directly or indirectly, or
(B) which such person or any of its Affiliates or Associates
has (i) the right to acquire (whether such right is exercisable immediately or
only after the passage of time), pursuant to any agreement, arrangement or
understanding (but shall not be deemed to be the beneficial owner of any Voting
Shares solely by reason of an agreement, arrangement or understanding with this
Corporation to effect a business combination) or upon the exercise of
conversion rights, exchange rights, warrants, or options, or otherwise, or (ii)
sole or shared voting or investment power with respect thereto pursuant to any
agreement, arrangement, understanding, relationship or otherwise (but shall not
be deemed to be the beneficial owner of any Voting Shares solely by reason of a
revocable proxy granted for a particular meeting of shareholders, pursuant to a
public solicitation of proxies for such meeting, with respect to shares of which
neither such person nor any such Affiliate or Associate is otherwise deemed the
beneficial owner), or
(C) which are beneficially owned, directly or indirectly, by
any other person with which such first mentioned person or any of its Affiliates
or Associates acts
<PAGE> 13
as a partnership, limited partnership, syndicate or other group pursuant to any
agreement, arrangement or understanding for the purpose of acquiring, holding,
voting or disposing of any shares of capital stock of this Corporation; and
provided further, however, that (i) no director or officer of this Corporation,
nor any Associate or Affiliate of any such director or officer, shall, solely by
reason of any or all such directors and officers acting in their capacities as
such, be deemed, for any purposes hereof, to beneficially own any Voting Shares
beneficially owned by any other such director or officer (or any Associate or
Affiliate thereof), and (ii) no employee stock ownership or similar plan of this
Corporation or any Subsidiary nor any trustee with respect thereto, nor any As-
sociate or Affiliate of any such trustee, shall, solely by reason of such
capacity of such trustee, be deemed, for any purposes hereof, to beneficially
own any Voting Shares held under any such plan.
(4) For purposes of computing the percentage beneficial ownership of
Voting Shares of a person in order to determine whether such person is a
Substantial Shareholder, the outstanding Voting Shares shall include shares
deemed owned by such person through application of subparagraph (3) of this
paragraph (c) but shall not include any other Voting Shares which may be
issuable by this Corporation pursuant to any agreement, or upon the exercise of
conversion rights, warrants or options, or otherwise. For all other purposes,
the outstanding Voting Shares shall include only Voting Shares then outstanding
and shall not include any Voting Shares which may be issuable by this
Corporation pursuant to any agreement, or upon the exercise of conversion
rights, warrants or options, or otherwise.
(5) "Continuing director" shall mean a person who was a member of the
Board of Directors of the Corporation as of January 1, 1986 or thereafter
elected by the shareholders or appointed by the Board of Directors of this
Corporation prior to the date as of which the Substantial Shareholder (or
Substantial Shareholders) in question be came a Substantial Shareholder (or
Substantial Shareholders), or a person designated (before his initial election
or appointment as a director) as a continuing director by a majority of the
whole Board, but only if a majority of the whole Board shall then consist of
continuing directors, or, if a majority of the whole Board shall not then
consist of continuing directors, by a majority of the then continuing
directors.
(6) "Whole board" shall mean the total number of directors which this
Corporation would have if there were no vacancies.
(7) An "Affiliate" of a specified person is a person that directly, or
indirectly through one or more intermediaries, controls, or is controlled by, or
is under common control with, the person specified. The term "Associate" used to
indicate a relationship with any person shall mean (i) any corporation or
organization (other than this Corporation or a Subsidiary) of which such person
is an officer or partner or is, directly or indirectly, the beneficial owner of
ten percent (10%) or more of any class of equity
<PAGE> 14
securities, (ii) any trust or other estate in which such person has a
substantial beneficial interest or as to which such person serves as trustee or
in a similar fiduciary capacity, and (iii) any relative or spouse of such
person, or any relative of such spouse, who has the same home as such person, or
is an officer or director of any corporation controlling or controlled by such
person.
(8) "Subsidiary" shall mean any corporation of which a majority of any
class of equity security is owned, directly or indirectly, by this Corporation;
provided, however, that for the purposes of the definition of Substantial
Shareholder set forth in subparagraph (2) of this paragraph (c), the term
"Subsidiary" shall mean only a corporation of which a majority of each class of
equity security is owned, directly or indirectly by this Corporation.
(9) "Substantial part" shall mean assets having a book value
(determined in accordance with generally accepted accounting principles) in
excess of ten percent (10%) of the book value (determined in accordance with
generally accepted accounting principles) of the total consolidated assets of
this Corporation, at the end of its most recent fiscal year ending prior to the
time the determination is made.
(10) "Voting Shares" shall mean any shares of capital stock of this
Corporation entitled to vote generally in the election of directors.
(d) The affirmative vote of the holders of then outstanding
Voting Shares entitled to cast at least eighty percent (80%) of the votes
entitled to be cast by the holders of all of the then outstanding Voting Shares,
and the affirmative vote of the holders of then outstanding Voting Shares
entitled to cast a majority of the votes entitled to be cast by the holders of
all then outstanding Voting Shares not beneficially owned by any Substantial
Shareholder, shall be required to alter, amend, change or repeal this ARTICLE
VIII, or to adopt any provision inconsistent with this ARTICLE VIII, unless such
proposed alteration, amendment, change or repeal, or other provision, shall be
recommended by two-thirds (2/3) of the whole Board, provided that a majority of
the members of the Board of Directors acting upon such recommendation shall be
continuing directors.
ARTICLE IX
The Board of Directors is authorized in its discretion to fix,
determine and vary the amount of profits or surplus of the Corporation to be
reserved as working capital, or for any other purpose, and to determine what
amount of the funds of the Corporation, if any, may be expediently used in its
business or declared in dividends to shareholders.
<PAGE> 15
ARTICLE X
These Amended Articles of Incorporation supersede the original
Articles of Incorporation of Liqui-Box Corporation and all previously adopted
amendments thereto that are in force at the date hereof.
<PAGE> 1
Exhibit (11)
COMPUTATION OF PER SHARE EARNINGS
LIQUI-BOX CORPORATION
<TABLE>
<CAPTION>
Fifty-two Fifty-two Fifty-two
Weeks Ended Weeks Ended Weeks Ended
December 30, 1995 December 31, 1994 January 1, 1994
--------------------------------------------------------------------
<S> <C> <C> <C>
Primary:
Weighted average number of
common shares outstanding 6,223,395 6,327,969 6,347,450
Net effect of dilutive stock options--
based on treasury stock method
using average market price 173,917 146,659 136,399
----------- ----------- -----------
Weighted average common and
common equivalent shares 6,397,312 6,474,628 6,483,849
=========== =========== ===========
Net Income $12,085,000 $13,327,000 $12,937,000
Earnings per common and
common equivalent share $ 1.89 $ 2.06 $ 2.00
=========== =========== ===========
Fully Diluted:
Weighted average number of
common shares outstanding 6,223,395 6,327,969 6,347,450
Net effect of dilutive stock options--
based on treasury stock method using the
year-end market price,
if higher than average market price 173,917 146,659 157,444
----------- ----------- -----------
Fully diluted shares 6,397,312 6,474,628 6,504,894
=========== =========== ===========
Net Income $12,085,000 $13,327,000 $12,937,000
Earnings per common and
common equivalent share $ 1.89 $ 2.06 $ 1.99
=========== =========== ===========
</TABLE>
<PAGE> 1
Exhibit(13) 1995 ANNUAL REPORT TO SHAREHOLDERS
<PAGE> 2
FINANCIALS
LIQUI-BOX CORPORATION IS A LEADING
MANUFACTURER OF LARGE SIZE BAG-IN-BOX
FLEXIBLE PACKAGING, BLOW-MOLDED CONTAINERS,
BULK LIQUID DISPENSING SYSTEMS AND FILLING
EQUIPMENT FOR THE DAIRY, BOTTLED
WATER, BEVERAGE, PROCESSED FOODS,
SPECIALTY CHEMICALS, WINE AND
PHARMACEUTICAL INDUSTRIES.
THE COMPANY OPERATES TWELVE PRODUCTION
FACILITIES IN THE UNITED STATES AND ONE
IN ENGLAND. LIQUI-BOX PRODUCTS ARE
MARKETED DOMESTICALLY BY A FIELD SALES
FORCE AUGMENTED BY MANUFACTURERS'
REPRESENTATIVES, AND DISTRIBUTED WORLDWIDE
THROUGH OUR OWN REPRESENTATIVES,
LICENSEES, AGENTS AND THE COMPANY'S
OWN EXPORT OPERATIONS.
THE CONTINUED GROWTH OF LIQUI-BOX SINCE ITS
INCEPTION IN 1962 HAS BEEN SPURRED BY A
COMMITMENT TO ABOVE AVERAGE RETURNS TO THE
SHAREHOLDER THROUGH CONTINUOUS PRODUCT
INNOVATION AND BY INGENUITY IN ADAPTING TO NEW
CUSTOMER TECHNICAL REQUIREMENTS. GROWTH
HAS BEEN ACHIEVED IN SPITE OF THE CHALLENGING
TASK OF EDUCATING INDUSTRY AFTER INDUSTRY TO
THE SUPERIOR PERFORMANCE CHARACTERISTICS,
ECONOMIC BENEFITS AND ENVIRONMENTAL
ADVANTAGES OF LIQUI-BOX PRODUCTS,
PARTICULARLY BAG-IN-BOX, OVER
TRADITIONAL PACKAGING.
LIQUI-BOX COMMON SHARES ARE TRADED ON
THE NASDAQ STOCK MARKET(SM) UNDER
THE SYMBOL LIQB.
<PAGE> 3
FINANCIAL HIGHLIGHTS
For the Five Fiscal Years Ended December 30, 1995 (In thousands of dollars,
except for per share data)
<TABLE>
<CAPTION>
SELECTED INCOME STATEMENT DATA (1) 1995 1994 1993 1992 1991
<S> <C> <C> <C> <C> <C>
Net Sales $156,373 $147,772 $130,081 $116,117 $107,790
Income Before Taxes 20,038 22,246 21,594 18,848 16,421
Taxes on Income 7,953 8,919 8,657 7,598 6,790
Net Income 12,085 13,327 12,937 11,250 9,631
Earnings Per Share (2)
Primary $ 1.89 $ 2.06 $ 2.00 $ 1.73 $ 1.48
Fully Diluted $ 1.89 $ 2.06 $ 1.99 $ 1.73 $ 1.48
SELECTED BALANCE SHEET DATA (1)
Current Assets $ 48,699 $ 47,848 $ 44,341 $ 36,771 $ 27,189
Current Liabilities 9,775 14,672 19,452 10,384 12,104
Working Capital 38,924 33,176 24,889 26,387 15,085
Total Assets 90,796 89,185 86,072 68,657 63,512
Long-term Obligations -- -- 55 105 666
Stockholders' Equity $ 79,655 $ 73,683 $ 65,210 $ 55,972 $ 47,740
Cash Dividends Per Share $ .42 $ .40 $ .39 $ .35 $ .33
Book Value Per Share $ 13.02 $ 11.76 $ 10.25 $ 8.77 $ 7.45
</TABLE>
(1) See Note 8 to Consolidated Financial Statements: Acquisitions
(2) See Note 1 to Consolidated Financial Statements: Per Share Data
DATA PER COMMON SHARE
The reported low and high closing prices on the NASDAQ National Market as
reported by the National Quotation Bureau, Inc. and cash dividends per share
were as follows: (See Note 1 to Consolidated Financial Statements: Per Share
Data)
<TABLE>
<CAPTION>
1995 1994 1993
Cash Cash Cash
Dividends Dividends Dividends
Low High Per Share Low High Per Share Low High Per Share
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
First Quarter 31 33 1/2 $.10 35 1/2 38 1/2 $.10 25 1/2 29 1/2 $.09
Second Quarter 31 36 1/4 $.10 34 37 $.10 27 1/2 37 $.10
Third Quarter 28 1/2 32 7/8 $.11 33 1/2 36 1/2 $.10 34 1/2 38 1/2 $.10
Fourth Quarter 27 1/4 30 3/4 $.11 31 1/2 35 1/4 $.10 36 40 $.10
</TABLE>
As of December 30, 1995, there were 840 holders of record of common shares.
3
<PAGE> 4
LIQUI-BOX WORLDWIDE
WORLD HEADQUARTERS Worthington, Ohio
Afghanistan Cyprus Israel Saudi Arabia
Argentina Denmark Italy South Africa
Australia Ecuador Japan Spain
Austria Finland Kenya Sri Lanka
Bahamas France Mexico Sweden
Bahrain Germany Nepal Switzerland
Bangladesh Greece New Zealand Taiwan
Belgium Hong Kong Norway The Netherlands
Bhutan Hungary Pakistan Turkey
Brazil Iceland Panama U.A.E.
Canada India Philippines United Kingdom
Chile Indonesia Poland
China Iran Portugal
MANUFACTURING FACILITIES Ashland, Ohio
Auburn, Massachusetts
Elk Grove, California
Elkton, Maryland
Houston, Texas
Lake Wales, Florida
New Albany, Indiana
Ontario, California
Sacramento, California
Worthington, Ohio
Upper Sandusky, Ohio
Romiley, England
Nazareth, Pennsylvania
CORPORATE INFORMATION
AUDITORS Deloitte & Touche LLP, Columbus, Ohio
TRANSFER AGENT The Huntington National Bank,
Columbus, Ohio
FORM 10-K The Annual Report to the Securities and Exchange
Commission on Form 10-K is available to
shareholders upon written request to the
Chairman of the Corporation.
ANNUAL MEETING The Annual Meeting of Shareholders will be at
the Columbus Marriott North, 6500 Doubletree Ave.,
Columbus, Ohio on April 24, 1996 at 9:00 a.m.
13
<PAGE> 5
MANAGEMENT'S DISCUSSION AND ANALYSIS
1995 COMPARED TO 1994
During 1995, Liqui-Box (the "Company") experienced an increase in sales and a
decline in net income as compared to 1994. The increase in sales can be
primarily attributed to increased selling prices on most products which
partially offset the dramatic increase experienced in 1995 in the cost of the
Company's prime raw material, plastic resin. The cost of most of the resins the
Company uses in the manufacture of its products began to rise dramatically in
1994 and the increases continued into 1995. The cost of many of these resins
began to decline from their peaks in Spring 1995; however, as of the end of
1995, they had not returned to the beginning of 1994 levels.
Gross profit, as a percentage of net sales, was 27.3% in 1995 and 31.0% in 1994.
This decrease is primarily the result of the higher resin costs. The Company has
the ability to raise prices to many of its customers as resin costs increase;
however, there is a time lag between when the Company incurs a cost increase and
the time this cost can be passed on to a customer. To a lesser extent, higher
manufacturing costs at some plants including the costs of certain plant
consolidations negatively impacted gross profit.
Selling, administrative and development expenses in 1995 were $22,712,000 as
compared to $23,413,000 in 1994, a decrease of $701,000. This decrease is
primarily due to a decrease in compensation related costs in 1995 as a result of
the Company's compensation program which bases a significant portion of
employees' total compensation on Company profitability.
Research and development costs were $1,265,000 in 1995 and $2,151,000 in 1994.
Several of the Company's major research and development projects previously
undertaken were completed in 1994. During 1995, the Company embarked upon a
major statistical quality improvement project which took the place of new
research and development projects. This project is intended to not only improve
existing products and processes but also train employees in methodology for
developing new products. The costs of this project are not included in the
Company's research and development costs. The costs directly associated with
this project approximate $785,000. However, there was also an extensive amount
of time and effort put into this project by numerous employees including all the
members of executive management. The above research and development amounts only
include the direct costs and do not represent the time commitment of all
employees of Liqui-Box to improving and developing our products and processes.
In addition, employees who are not directly part of the research and development
area of the Company spent part of their efforts on developing new products and
processes.
At the end of 1995 and 1994, Liqui-Box had no significant backlog of orders,
which is industry typical.
Total working capital at year-end was $38,924,000 and $33,176,000 in 1995 and
1994, respectively, an increase of $5,748,000. The ratio of current assets to
current liabilities was 5.0 to 1 for 1995 and 3.3 to 1 in 1994. Net cash
provided from operations was $21,159,000 for 1995 compared to $17,024,000 in
1994. The increase in cash provided was primarily the result of a conscious
effort to reduce inventory levels at the end of 1995 compared to deliberate
purchases at the end of 1994 to mitigate the effect of upcoming cost increases.
Net cash used in investing activities was $8,066,000 for 1995 compared to
$6,165,000 in 1994. The increase in cash used was primarily for purchases of new
plant equipment and improvements to existing property and plant equipment. Cash
used in financing activities was $8,111,000 for 1995 compared to $12,994,000 in
1994. The cash used in financing activities was primarily for the acquisition of
treasury stock and payment of cash dividends.
Liqui-Box's major commitments for capital expenditures as of December 30, 1995,
were, as they have been in the past, primarily for increasing capacity at
existing locations, building filling machines for lease and tooling for new
products. Funds required to fulfill these commitments will be provided by
operations.
In 1995, the Company made additional purchases of its outstanding common shares
for Treasury. The common shares were bought at prices considered fair by
management and there was cash available for the purchases. The Company felt the
purchases represented a good investment and would secure common shares for
issuance under the Company's employee benefit plans.
There have been no other significant changes in the Company's capitalization
during the past three years. During 1991, financing arrangements were made with
The Huntington National Bank to provide various credit facilities with a total
commitment of $20,000,000. No amounts were outstanding under these facilities as
of December 30, 1995. The $10,000,000 portion of these credit facilities will
expire on May 1, 1996; however, management intends to renew this revolver and
anticipates no difficulty in obtaining the renewal on terms as favorable to the
Company as the existing facility.
Longer-term cash requirements, other than normal operating expenses, are needed
for financing anticipated growth; increasing capacity at existing plants;
development of new products and enhancement of existing products; dividend
payments; and possible continued repurchases of the Company's common shares. The
Company believes that its existing cash and cash equivalents, available credit
facilities and anticipated cash generated from operations will be sufficient to
satisfy its currently anticipated cash requirements for the fiscal year 1996.
During late 1994 and early 1995, the Company experienced dramatic increases in
the costs of plastic resin. However, the Company was able to obtain an adequate
supply for its needs. The costs of plastic resin did begin to decline as 1995
progressed, but they have not returned to the levels at the beginning of 1994.
In 1996, it is uncertain what will happen to plastic resin prices. The Company
anticipates that during 1996 there will be an adequate supply of the major types
of plastic resin it purchases.
Management feels that inflation did have a material effect on the Company during
1995 due to the dramatic increase in plastic resin cost. As indicated above, the
Company has the ability to raise prices; however, there is a time lag between
when the Company incurs a cost increase and the time this cost can be passed on
to a customer.
<PAGE> 6
MANAGEMENT'S DISCUSSION AND ANALYSIS
1994 COMPARED TO 1993
During 1994, Liqui-Box (the "Company") experienced an increase in sales and net
income as compared to 1993. The increase in sales can be attributed to increased
domestic unit shipments and increased sales by our European subsidiary, coupled
with increased selling prices on most products to offset the dramatic increase
in the cost of the Company's prime raw material, plastic resin, experienced in
1994. Many of the resins the Company uses in the manufacture of its products had
increased more than 30% by year end.
Gross profit, as a percentage of net sales, was 31.0% in 1994 and 35.0% in 1993.
This decrease is the result of higher manufacturing costs at some plants, the
cost of moving our Luxembourg facility to our Romiley facility and other plant
consolidations along with the effect of higher raw material costs. Also, certain
rebate costs on long term sales contracts were much higher in the year than
expected.
Selling, administrative and development expenses in 1994 were 15.8% of net sales
as compared to 18.2% in 1993. This decrease is the result of increased sales and
deliberate control of costs that has continued in 1995 with a realignment that
has resulted in a significant reduction in the number of people in these
functions.
Research and development costs were $2,151,000 in 1994 and $1,954,000 in 1993.
There continues to be increased emphasis throughout the Company in 1995 for new
product and process development. It should be emphasized that this only
represents costs directly charged to research and development and does not
represent the commitment of all employees of Liqui-Box to improving existing
products and processes and to developing new products and processes. Many
employees who are not part of the research and development area of the Company
spent part of their efforts on developing new products and processes.
At the end of 1994 and 1993, Liqui-Box had no significant backlog of orders,
which is industry typical.
Total working capital at year end was $33,176,000 and $24,889,000 in 1994 and
1993, respectively, an increase of $8,287,000. The ratio of current assets to
current liabilities was 3.3 to 1 for 1994 and 2.3 to 1 in 1993. Cash used in
financing activities was $12,994,000 for 1994 compared to cash provided by
financing activities of $4,416,000 for 1993.
Liqui-Box's major commitments for capital expenditures as of December 31, 1994,
were, as they have been in the past, primarily for increasing capacity at
existing locations, building filling machines for lease and tooling for new
products. Funds required to fulfill these commitments will be provided from
operations.
In 1994, the Company made purchases of its outstanding shares for Treasury. The
shares were bought at prices considered fair by management and there was cash
available for the purchases. The Company felt the purchases were a good
investment and would secure shares for future employee benefit plans as well as
stock option offerings.
There have been no other significant changes in capitalization during the past
three years. During 1991, financing arrangements were made with The Huntington
National Bank to provide various credit facilities for a total commitment of
$20,000,000. Of these facilities, $1,000,000 was being used as of December 31,
1994.
During 1994, the Company experienced dramatic increases in the cost of plastic
resin even though there was no shortage of supply available to the Company.
Management feels that inflation did have a material effect on the Company's
operations during 1994 due to the dramatic increase in plastic resin cost.
In August 1993, Liqui-Box purchased the assets of the Liquid Packaging Divisions
of Sonoco Products Company and its wholly-owned subsidiary Sonoco Limited. The
Liquid Packaging Divisions have plants located in Elk Grove, California and
Romiley, England. Both of the plants produce bag-in-box packaging that is very
similar to the bag-in-box packaging produced by Liqui-Box. This purchase gives
Liqui-Box additional domestic capacity and a larger presence in the European
market.
15
<PAGE> 7
CONSOLIDATED BALANCE SHEETS
<TABLE>
<CAPTION>
ASSETS DECEMBER 30, 1995 DECEMBER 31, 1994
- --------------------------------------------------------------------------------------------------------
CURRENT ASSETS
- --------------------------------------------------------------------------------------------------------
<S> <C> <C>
Cash and cash equivalents $ 9,424,000 $ 4,341,000
Accounts receivable:
Trade, net of allowance for doubtful accounts
of $679,000 and $594,000, respectively 16,788,000 15,209,000
Other 1,511,000 1,065,000
------------ ------------
Total receivables 18,299,000 16,274,000
Inventories:
Raw materials and supplies 9,003,000 13,104,000
Work in process 5,534,000 6,089,000
Finished goods 4,035,000 5,224,000
Total Inventories 18,572,000 24,417,000
Other current assets 2,404,000 2,816,000
------------ ------------
TOTAL CURRENT ASSETS 48,699,000 47,848,000
- --------------------------------------------------------------------------------------------------------
PROPERTY, PLANT AND EQUIPMENT - at Cost
- --------------------------------------------------------------------------------------------------------
Land, buildings and leasehold improvements 9,711,000 8,711,000
Equipment and vehicles 56,355,000 50,314,000
Equipment leased to customers 17,548,000 16,367,000
Construction in process 1,965,000 4,291,000
------------ ------------
TOTAL 85,579,000 79,683,000
Less accumulated depreciation and amortization (57,140,000) (52,467,000)
------------ ------------
Property, plant and equipment - net 28,439,000 27,216,000
- --------------------------------------------------------------------------------------------------------
OTHER ASSETS
- --------------------------------------------------------------------------------------------------------
Loans to officers and employees 70,000 76,000
Goodwill, net of amortization 10,126,000 10,723,000
Deferred charges and other assets, net 3,462,000 3,322,000
------------ ------------
Total other assets 13,658,000 14,121,000
TOTAL ASSETS $ 90,796,000 $ 89,185,000
------------ ------------
</TABLE>
See notes to consolidated financial statements.
16
<PAGE> 8
CONSOLIDATED BALANCE SHEETS
<TABLE>
<CAPTION>
LIABILITIES AND STOCKHOLDERS' EQUITY DECEMBER 30, DECEMBER 31,
1995 1994
- --------------------------------------------------------------------------------------
CURRENT LIABILITIES
- --------------------------------------------------------------------------------------
<S> <C> <C>
Short-term borrowings $ -- $ 1,000,000
Accounts payable 4,888,000 7,247,000
Dividends payable 673,000 627,000
Salaries, wages and related liabilities 1,295,000 1,639,000
Federal, state and local taxes 329,000 1,987,000
Other accrued liabilities 2,590,000 2,117,000
Obligations under capital lease -- 55,000
------------ ------------
TOTAL CURRENT LIABILITIES 9,775,000 14,672,000
- --------------------------------------------------------------------------------------
OTHER NONCURRENT LIABILITIES
- --------------------------------------------------------------------------------------
Deferred income taxes 1,366,000 830,000
Commitments and contingencies --
- --------------------------------------------------------------------------------------
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 5,178,000 4,478,000
Cumulative translation adjustment 618,000 729,000
Unrealized gain on marketable securities 460,000 --
Retained earnings 97,494,000 88,017,000
Less:
Treasury stock, at cost - 1,144,992
and 994,932 shares, respectively (25,305,000) (20,751,000)
- --------------------------------------------------------------------------------------
TOTAL STOCKHOLDERS' EQUITY 79,655,000 73,683,000
------------ ------------
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY $ 90,796,000 $ 89,185,000
------------ ------------
</TABLE>
See notes to consolidated financial statements.
17
<PAGE> 9
CONSOLIDATED STATEMENTS OF INCOME
<TABLE>
<CAPTION>
- -----------------------------------------------------------------------------------------------------
Fifty-two Fifty-two Fifty-two
Weeks Ended Weeks Ended Weeks Ended
December 30, December 31, January 1,
1995 1994 1994
<S> <C> <C> <C>
NET SALES $156,373,000 $147,772,000 $130,081,000
Cost of Sales 113,723,000 102,000,000 84,510,000
------------ ------------ ------------
Gross Margin 42,650,000 45,772,000 45,571,000
Selling, administrative and
development expenses 22,712,000 23,413,000 23,623,000
------------ ------------ ------------
Operating income 19,938,000 22,359,000 21,948,000
OTHER INCOME (EXPENSE):
Interest and dividend income 221,000 160,000 220,000
Interest expense (222,000) (186,000) (213,000)
Other, net 101,000 (87,000) (361,000)
------------ ------------ ------------
INCOME BEFORE INCOME TAXES 20,038,000 22,246,000 21,594,000
TAXES ON INCOME 7,953,000 8,919,000 8,657,000
------------ ------------ ------------
NET INCOME $ 12,085,000 $ 13,327,000 $ 12,937,000
- -----------------------------------------------------------------------------------------------------
EARNINGS PER SHARE
- -----------------------------------------------------------------------------------------------------
Primary $1.89 $2.06 $2.00
Fully diluted $1.89 $2.06 $1.99
Cash dividends per common share $ .42 $ .40 $ .39
- -----------------------------------------------------------------------------------------------------
WEIGHTED AVERAGE NUMBER OF COMMON
AND COMMON EQUIVALENT SHARES USED
IN COMPUTING EARNINGS PER SHARE:
- -----------------------------------------------------------------------------------------------------
Primary 6,397,312 6,474,628 6,483,849
Fully diluted 6,397,312 6,474,628 6,504,894
</TABLE>
See notes to consolidated financial statements.
18
<PAGE> 10
CONSOLIDATED STATEMENTS OF CASH FLOWS
<TABLE>
<CAPTION>
- -------------------------------------------------------------------------------------------------------------------
Fifty-two Fifty-two Fifty-two
Weeks Ended Weeks Ended Weeks Ended
December 30, December 31, January 1,
1995 1994 1994
- -------------------------------------------------------------------------------------------------------------------
OPERATING ACTIVITIES
- -------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
Net income $ 12,085,000 $ 13,327,000 $ 12,937,000
Adjustments to reconcile net income to net
cash provided by operating activities:
Depreciation and amortization 6,275,000 6,380,000 6,067,000
Provisions for loss on accounts receivable 723,000 580,000 231,000
Amortization of other noncurrent assets 1,091,000 1,114,000 655,000
Loss on disposal of property, plant and equipment 619,000 -- --
Deferred compensation 600,000 86,000 --
Changes in deferred income tax accounts (32,000) (475,000) (432,000)
Changes in operating assets and liabilities,
net of effects from acquisitions:
Accounts receivable (2,832,000) (2,205,000) (1,995,000)
Inventories 5,783,000 (4,264,000) (3,446,000)
Other current assets 665,000 365,000 (2,973,000)
Accounts payable (2,316,000) 2,051,000 1,036,000
Salaries, wages and related liabilities (344,000) 200,000 301,000
Other accrued liabilities (1,158,000) (135,000) (269,000)
------------ ------------ ------------
NET CASH PROVIDED BY OPERATING ACTIVITIES 21,159,000 17,024,000 12,976,000
- -------------------------------------------------------------------------------------------------------------------
CASH FLOWS FROM INVESTING ACTIVITIES:
- -------------------------------------------------------------------------------------------------------------------
Purchase of Inpaco -- (200,000) (276,000)
Purchase of Sonoco -- -- (14,848,000)
Purchase of property, plant and equipment (9,646,000) (6,023,000) (5,367,000)
Proceeds from sale of property, plant and equipment 1,467,000 -- --
Other changes, net 113,000 58,000 (102,000)
------------ ------------ ------------
NET CASH USED IN INVESTING ACTIVITIES (8,066,000) (6,165,000) (20,593,000)
- -------------------------------------------------------------------------------------------------------------------
CASH FLOWS FROM FINANCING ACTIVITIES:
- -------------------------------------------------------------------------------------------------------------------
Acquisition of treasury shares (4,837,000) (3,795,000) (1,579,000)
Exercise of stock options, including tax benefit 383,000 300,000 488,000
Cash dividends (2,608,000) (2,527,000) (2,475,000)
Changes in loans to officers and employees 6,000 78,000 32,000
Proceeds from short and long-term borrowings -- -- 8,000,000
Repayment of short and long-term borrowings (1,000,000) (7,000,000) --
Principal payments on capital lease obligations (55,000) (50,000) (50,000)
------------ ------------ ------------
NET CASH PROVIDED BY (USED IN)
FINANCING ACTIVITIES (8,111,000) (12,994,000) 4,416,000
- -------------------------------------------------------------------------------------------------------------------
EFFECT OF EXCHANGE RATE CHANGES ON CASH 101,000 100,000 (133,000)
- -------------------------------------------------------------------------------------------------------------------
INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS 5,083,000 (2,035,000) (3,334,000)
CASH AND CASH EQUIVALENTS, Beginning of year 4,341,000 6,376,000 9,710,000
----------------------------------------------------
CASH AND EQUIVALENTS, End of year $ 9,424,000 $ 4,341,000 $ 6,376,000
------------ ------------ ------------
</TABLE>
See notes to consolidated financial statements.
19
<PAGE> 11
CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY
<TABLE>
<CAPTION>
ADDITIONAL
SHARES COMMON PAID-IN
OUTSTANDING STOCK CAPITAL
<S> <C> <C> <C>
BALANCE AT JANUARY 2, 1993 6,383,441 $ 1,210,000 $ 4,461,000
------------------------------------------------------------------------------------------------
Net income
------------------------------------------------------------------------------------------------
Cash dividends
------------------------------------------------------------------------------------------------
Purchase of treasury shares (58,969)
------------------------------------------------------------------------------------------------
Proceeds from exercise of stock options 36,024 (156,000)
------------------------------------------------------------------------------------------------
Translation loss
------------------------------------------------------------------------------------------------
------------------------------------------------------------------------------------------------
BALANCE AT JANUARY 1, 1994 6,360,496 1,210,000 4,305,000
------------------------------------------------------------------------------------------------
Net income
------------------------------------------------------------------------------------------------
Cash dividends
------------------------------------------------------------------------------------------------
Purchase of treasury shares (109,121)
------------------------------------------------------------------------------------------------
Proceeds from exercise of stock options 16,291 (4,000)
------------------------------------------------------------------------------------------------
Tax benefit on stock options exercised 91,000
------------------------------------------------------------------------------------------------
Deferred compensation 86,000
------------------------------------------------------------------------------------------------
Translation gain
------------------------------------------------------------------------------------------------
------------------------------------------------------------------------------------------------
BALANCE AT DECEMBER 31, 1994 6,267,666 1,210,000 4,478,000
------------------------------------------------------------------------------------------------
Net income
------------------------------------------------------------------------------------------------
Cash dividends
------------------------------------------------------------------------------------------------
Purchase of treasury shares (164,279)
------------------------------------------------------------------------------------------------
Proceeds from exercise of stock options 14,219 49,000
------------------------------------------------------------------------------------------------
Tax benefit on stock options exercised 51,000
------------------------------------------------------------------------------------------------
Deferred compensation 600,000
------------------------------------------------------------------------------------------------
Translation gain
------------------------------------------------------------------------------------------------
Unrealized gain on marketable securities
------------------------------------------------------------------------------------------------
BALANCE AT DECEMBER 30, 1995 6,117,606 $ 1,210,000 $ 5,178,000
--------- ----------- -----------
</TABLE>
See notes to consolidated financial statements.
20
<PAGE> 12
CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY
<TABLE>
<CAPTION>
CUMULATIVE UNREALIZED GAIN ON
TRANSLATION MARKETABLE TREASURY RETAINED
ADJUSTMENT SECURITIES STOCK EARNINGS
<S> <C> <C> <C>
$ (129,000) $(16,325,000) $ 66,755,000
- ------------------------------------------------------------------------
12,937,000
- ------------------------------------------------------------------------
(2,475,000)
- ------------------------------------------------------------------------
(1,579,000)
- ------------------------------------------------------------------------
644,000
- ------------------------------------------------------------------------
(133,000)
- ------------------------------------------------------------------------
(262,000) (17,260,000) 77,217,000
- ------------------------------------------------------------------------
13,327,000
- ------------------------------------------------------------------------
(2,527,000)
- ------------------------------------------------------------------------
(3,795,000)
- ------------------------------------------------------------------------
304,000
- ------------------------------------------------------------------------
991,000
- ------------------------------------------------------------------------
729,000 (20,751,000) 88,017,000
- ------------------------------------------------------------------------
12,085,000
- ------------------------------------------------------------------------
(2,608,000)
- ------------------------------------------------------------------------
(4,837,000)
- ------------------------------------------------------------------------
283,000
- ------------------------------------------------------------------------
111,000
- ------------------------------------------------------------------------
460,000
- ------------------------------------------------------------------------
$ 618,000 $ 460,000 $(25,305,000) $ 97,494,000
- ------------ ------------ ------------ ------------
</TABLE>
21
<PAGE> 13
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
NOTE 1 - ACCOUNTING POLICIES
Liqui-Box Corporation and subsidiaries (the "Company") is a manufacturer of
dispensing systems, flexible packaging and related filling equipment systems for
the beverage, processed foods, dairy, detergent, wine and other specialty
products industries. The Company operates thirteen manufacturing plants in the
United States and Europe in primarily the plastic packaging industry.
Significant accounting policies of the Company are as follows:
CONSOLIDATION: The consolidated financial statements include the accounts of
Liqui-Box Corporation and its subsidiaries, all of which are wholly-owned. The
Company eliminates all significant intercompany balances and transactions in the
consolidated financial statements.
BASIS OF ACCOUNTING: The preparation of financial statements in conformity with
generally accepted accounting principles requires management to make estimates
and assumptions that affect the reported amounts of assets and liabilities and
disclosure of contingent assets and liabilities at the date of the financial
statements and the reported amounts of revenues and expenses during the
reporting period. Actual results could differ from those estimates.
CASH EQUIVALENTS: The Company considers all highly liquid investments with a
maturity of three months or less when purchased to be cash equivalents.
CONCENTRATION OF CREDIT RISK AND MAJOR CUSTOMER: The Company's exposure to
credit risk is impacted by the economic climate affecting its diverse customer
base and wide geographic dispersion. The Company manages this risk by performing
ongoing credit evaluations of its customers. Reserves for credit losses are
maintained by the Company and losses have been within Company expectations.
Approximately 17%, 15% and 13% of the Company's revenues in 1995, 1994 and 1993,
respectively, were derived from sales to one major customer. Trade receivables
due from this customer were $3,095,000 and $2,182,000 at December 30, 1995 and
December 31, 1994, respectively.
INVENTORY VALUATION: Inventories are stated at the lower of cost or market.
Substantially all of the Company's domestic product inventories are valued on
the last-in, first-out (LIFO) method. If current cost had been used, inventories
would have increased approximately $2,320,000 and $2,458,000 at December 30,
1995 and December 31, 1994, respectively. The impact of partial inventory
liquidations in certain LIFO pools reduced the LIFO provision by approximately
$956,000 in 1995. The Company's inventory of machine parts and inventories of
certain subsidiaries are valued on the first-in, first-out (FIFO) method. These
inventories approximated $9,535,000 and $7,559,000 at December 30, 1995 and
December 31, 1994, respectively.
PROPERTY, PLANT AND EQUIPMENT: Property, plant and equipment is stated at cost.
Depreciation is computed using the straightline method (accelerated methods are
generally used for tax purposes) in amounts adequate to amortize the cost over
the estimated useful lives of the assets as follows: buildings and improvements
- - 5 to 30 years; and equipment - 3 to 7 years.
GOODWILL AND OTHER INTANGIBLES: Goodwill represents the excess purchase price
over net assets acquired and is being amortized using the straightline method
over 20-25 years. Other intangibles resulting from business acquisitions,
comprised mainly of costs related to sales agreements, patents and noncompete
agreements, are being amortized using the straightline method over 3-17 years.
Accumulated amortization of goodwill and other intangibles as of December 30,
1995 and December 31, 1994 approximated $4,696,000 and $3,605,000, respectively.
At each balance sheet date, a determination is made by the Company as to whether
any intangible assets have been impaired based on several criteria, including,
but not limited to, sales trends, operating factors and undiscounted cash flows.
MARKETABLE SECURITIES: Marketable securities consist primarily of common stocks
and are included in other noncurrent assets. The Company classifies its
securities as available for sale and, accordingly, carries such at fair market
value with unrealized gains and losses reported as a separate component of
stockholders' equity.
The fair market value, cost and unrealized gains, net of tax, were $819,000,
$59,000 and $460,000, respectively, at December 30, 1995. The unrealized gain,
net of tax is a supplemental non cash transaction for the statement of cash
flows.
REVENUE RECOGNITION: Revenue from product sales is recognized at the time
products are shipped. Revenue from contracts to manufacture filling machine
systems is recognized on a progress billing basis.
RESEARCH AND DEVELOPMENT: All research and development costs are expensed as
incurred. Such costs amounted to $1,265,000, $2,151,000 and $1,954,000 in 1995,
1994 and 1993, respectively.
ADVERTISING COSTS: Advertising costs primarily relate to trade shows, product
catalogues and product literature. Such costs are expensed as incurred. Total
advertising expenses were $328,000, $551,000 and $794,000 in 1995, 1994 and
1993, respectively.
EARNINGS PER SHARE: Earnings per common and common equivalent share are based
upon the weighted average number of common shares outstanding and equivalent
common shares derived from dilutive stock options.
22
<PAGE> 14
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
FOREIGN CURRENCY TRANSLATION: All assets and liabilities of wholly-owned foreign
subsidiaries have been translated using the current exchange rate in effect at
the balance sheet date. Revenue and expense accounts of such subsidiaries have
been translated using the average exchange rate prevailing during the year and
capital accounts have been translated using historic rates. Gains and losses
resulting from the elimination of long-term intercompany receivable balances and
the translation of the foreign financial statements into U.S. dollars are
reflected as translation adjustments in stockholders' equity.
Foreign currency exchange gains (losses) arise primarily from transactions
denominated in foreign currencies and from forward exchange contracts and are
included in other income (expense) in the amount of approximately ($200,000),
$90,000 and $16,000 in 1995, 1994 and 1993, respectively. The Company enters
into forward exchange contracts to hedge against foreign currency fluctuations
on certain transactions. Transactions hedged with forward exchange contracts
will come due at the approximate time that forward exchange contracts held
expire. Realized and unrealized gains and losses on these contracts are included
in net income. At December 30, 1995, the Company had contracts of approximately
$1,806,000 maturing from January 12, 1996 through May 10, 1996 to exchange
various currencies to pounds sterling.
DISCLOSURES CONCERNING FAIR VALUE OF FINANCIAL INSTRUMENTS: The carrying value
of cash and equivalents; trade and other receivables; accounts payable; and
other current liabilities are estimated to approximate fair value because of the
short-term maturity of these items.
RECLASSIFICATION: Certain reclassifications have been made to the 1993 and 1994
financial statements to conform to the 1995 presentation.
NOTE 2 - TAXES ON INCOME
Deferred income taxes are provided for the temporary differences between the
carrying amounts of assets and liabilities for financial reporting and income
tax purposes by applying enacted statutory tax rates applicable to future years
to the basis differences. The effect on deferred income taxes of a change in tax
rates is recognized in income in the period that includes the enactment date.
<TABLE>
<CAPTION>
Significant components of the Company's
deferred tax liabilities and assets are as follows: As of Fiscal Year End
December 30, 1995 December 31, 1994
Current deferred tax assets:
<S> <C> <C>
Accounts receivable $ 230,000 $ 88,000
Reserves and accruals 403,000 498,000
Other 275,000 54,000
----------- ---------
Net current deferred tax assets $ 908,000 $ 640,000
----------- ---------
Long-term deferred tax liabilities:
Tax over book depreciation $ 987,000 $ 1,281,000
Other 630,000 242,000
----------- ---------
Total long-term deferred tax liabilities 1,617,000 1,523,000
----------- ---------
Long-term deferred tax assets:
Self-constructed assets - 178,000
Intangibles 251,000 180,000
Other - 335,000
----------- ---------
Total long-term deferred tax assets 251,000 693,000
----------- ---------
Net long-term deferred tax liabilities $ 1,366,000 $ 830,000
----------- ---------
</TABLE>
23
<PAGE> 15
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
Significant components of the provision for income taxes are as follows:
<TABLE>
<CAPTION>
1995 1994 1993
Current:
<S> <C> <C> <C>
Federal $ 6,553,000 $ 7,414,000 $ 6,650,000
State 1,432,000 1,980,000 1,575,000
-------------------------------------------------
Total current taxes 7,985,000 9,394,000 8,225,000
-------------------------------------------------
Deferred:
Federal and State (32,000) (475,000) 432,000
-------------------------------------------------
Total taxes $ 7,953,000 $ 8,919,000 $ 8,657,000
-------------------------------------------------
</TABLE>
The following table summarizes the difference between income taxes computed at
the expected Federal statutory rate and actual amounts:
<TABLE>
<CAPTION>
1995 1994 1993
<S> <C> <C> <C>
Expense at Federal statutory rates $7,013,000 $7,665,000 $7,558,000
State income taxes, net of
Federal tax benefit 911,000 1,170,000 1,094,000
Other - net 29,000 84,000 5,000
--------------------------------------------
Total $7,953,000 $8,919,000 $8,657,000
--------------------------------------------
Effective income tax rate 39.7% 40.1% 40.1%
</TABLE>
The Company made federal income tax payments, net of refunds, of approximately
$9,972,000, $6,975,000 and $7,250,000 in 1995, 1994 and 1993, respectively.
NOTE 3 - EQUIPMENT LEASED TO CUSTOMERS
The Company leases various types of filling machinery and equipment to its
customers to support its packaging products. The leases are classified as
operating leases and are generally cancelable at the option of the Company.
Assets available for lease and assets under current lease contracts are included
in the balance sheets as equipment leased to customers. Accumulated depreciation
on these assets at December 30, 1995 and December 31, 1994 approximated
$13,389,000 and $12,397,000, respectively. The future minimum rentals on
noncancelable operating leases for the five fiscal years subsequent to December
30, 1995 are: $497,000, $250,000, $155,000, $110,000 and $33,000.
24
<PAGE> 16
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
NOTE 4 - COMMITMENTS AND CONTINGENCIES
The Company leases property and equipment pursuant to various noncancelable
lease agreements. Certain leases contain renewal options and generally provide
that the Company shall pay for insurance, taxes and maintenance. Future minimum
payments on noncancelable operating leases with initial or remaining terms in
excess of one year for the five fiscal years subsequent to December 30, 1995
are: $1,392,000, $927,000, $766,000, $601,000 and $573,000. Lease payments under
noncancelable operating leases subsequent to the year 2000 aggregate $1,079,000.
Total lease expense including other cancelable and short-term leases was
$2,312,000, $2,309,000 and $2,223,000 in 1995, 1994 and 1993, respectively.
The Company is involved in various litigation arising in the ordinary course of
business. The Company and its legal counsel believe the resolution of such
litigation will not have a material effect on the Company's financial position
or results of operations. However, because of the risks associated with any
litigation, the ultimate outcome may differ.
NOTE 5 - EMPLOYEE BENEFIT PLANS
The Company has a deferred profit sharing plan covering the majority of its
employees not covered by a collective bargaining agreement. Contributions are at
the discretion of the Board of Directors. Expenses related to this plan were
$229,000, $208,000 and $540,000 in 1995, 1994 and 1993, respectively.
The Company also has an Employee Stock Ownership Plan ("ESOP") for the majority
of employees who are not covered by a collective bargaining agreement. Eligible
employees may elect to contribute not less than 2% nor more than 6% of their
annual compensation to the ESOP. For each participating employee, the Company
contributes an amount equal to 50% of the employee's contribution. In addition,
all shares held by the ESOP are treated as outstanding shares in the
determination of earnings per share. Dividends paid on all shares held by the
ESOP are charged to retained earnings. Total ESOP expenses were $17,000, $33,000
and $51,000 in 1995, 1994 and 1993, respectively.
The Company contributes to various retirement plans including a multi-employer
plan for certain employees covered by collective bargaining agreements.
Contributions and expenses related to these plans were $91,000, $105,000 and
$78,000 in 1995, 1994 and 1993, respectively.
NOTE 6 - STOCK OPTIONS
Under its stock option plan, the Company may grant incentive, non-qualified and
deferred compensation stock options, or other stock-based awards, as authorized
by the Board of Directors. The terms and issuance prices of such awards are to
be determined by the Board as limited by Internal Revenue Service rules where
applicable. The maximum number of common shares which may be reserved for
issuance under the plan annually is limited to 3% of the outstanding common
shares, but shares not awarded in one year may be carried over to the next.
In 1991, under the plan, the Company initiated a program entitled LBShares. This
program grants options annually to the majority of non-executive employees based
on the prior year's wages. Options are granted at exercise prices which equal
the fair market value at date of grant. The options become exercisable in 25%
increments on each anniversary of the grant date and are forfeited upon
termination of employment for reasons other than death or disability. The
options expire 10 years after the grant date. The balance of options outstanding
from the grants is 159,300 at December 30, 1995, of which 66,946 are
exercisable.
The option exercise prices range from $22.50 to $37.00 per share (aggregate of
$4,826,000). Options were exercised for the purchase of 14,219, 7,671 and 1,398
common shares during 1995, 1994 and 1993, respectively, at prices ranging from
$22.50 to $24.63 per share.
Annually, the Company also grants shares to Company executives similar to the
LBShares program discussed above. This program was established in 1992 and
options are granted at exercise prices which equal the fair market value at date
of grant. The balance of options outstanding from the grants is 50,242 at
December 30, 1995, of which, 17,185 are exercisable. The option exercise prices
range from $24.63 to $37.00 per share (aggregate of $1,548,000). No options were
exercised for the purchase of common shares under this program during 1995, 1994
or 1993.
25
<PAGE> 17
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
The Company has granted supplemental retirement options to certain Company
executives from 1992 through 1995. Options are granted at exercise prices equal
to 50% of the fair market value at date of grant. The balance of options
outstanding from the grants is 99,164 at December 30, 1995, at option prices
ranging from $12.50 to $18.50 (aggregate of $1,467,000). These options are only
exercisable upon retirement, death, disability or termination other than cause.
These options vest after six months and are subject to specified reductions
based on age and noncompetition arrangements in the event employment is
terminated for any reason other than death, retirement or disability. No options
were exercised for the purchase of common shares under this program during 1995,
1994 or 1993.
At December 30, 1995, other options outstanding under the plan include
non-qualified grants for the purchase of 183,743 common shares and incentive
grants for the purchase of 58,242 common shares. In total, 23,416 options were
exercisable at December 30, 1995. The exercise prices range from $12.83 to
$30.52 per share (aggregate of $4,994,000). The exercise prices for the
incentive stock options were not less than the market value at date of grant and
for the non-qualified options were at or below market value at date of grant.
All incentive and certain non-qualified options become exercisable in 25%
increments on each anniversary of the grant date. The remaining non-qualified
options generally become exercisable in 10% increments on each anniversary of
the grant date. Options were exercised for the purchase of 8,369 and 34,626
common shares during 1994 and 1993, respectively, at prices ranging from $12.83
to $14.12 per share. No options were exercised in 1995.
Compensation expense recorded in 1995 and 1994 related to the option programs
was $600,000 and $86,000, respectively. There was no compensation expense in
1993.
The Company receives tax deductions for the difference between fair market value
and the exercise price of common shares at the time non-incentive options are
exercised. In addition, common shares obtained through the exercise of stock
options which are sold by the optionee within two years of grant or one year of
exercise result in a tax deduction for the Company equivalent to the taxable
gain recognized by the optionee. Additional paid-in capital reflects $51,000 and
$91,000 in 1995 and 1994, respectively, received by the Company pursuant to
these provisions.
In October 1995 the Financial Accounting Standards Board issued Statement of
Financial Accounting Standards No. 123, "Accounting for Stock-Based
Compensation" which becomes effective in 1996. While the Statement defines and
encourages the use of a fair value based method of accounting for employee stock
options and similar equity instruments, the Statement permits existing plans to
continue use of the intrinsic value based method of accounting prescribed by
Accounting Principles Board Opinion No. 25, "Accounting for Stock Issued to
Employees." The Company has not yet determined if it will elect to change to the
fair value method, nor has it determined the impact upon net income and earnings
per share of adopting this standard. Adoption of the new standard will have no
effect on the Company's cash flows.
26
<PAGE> 18
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
NOTE 7 - CREDIT FACILITIES
The Company maintains credit facilities that aggregate $20,000,000 and include
$10,000,000 for a revolving term loan, the availability of which terminates on
April 30, 1997, when, at the option of the Company, outstanding amounts can be
converted to a term note under the terms of the agreement as defined. No amounts
were outstanding under this facility at December 30, 1995. The remaining portion
of the credit facilities of $10,000,000 is a line of credit which expires May 1,
1996. No amounts were outstanding under this facility at December 30, 1995. At
the Company's option, the credit facilities bear interest at either the prime
rate, the London Interbank Offered Rate plus a percentage ranging from .625% to
.75%, or a negotiated rate, as defined. The facilities require the maintenance
of certain financial ratios and restrict future common stock dividends to 50% of
aggregated net income. Interest paid in 1995, 1994 and 1993 was $223,000,
$182,000 and $115,000, respectively.
NOTE 8 - ACQUISITIONS
In August 1993, the Company acquired the Liquid Packaging Divisions of Sonoco
Products Company and its wholly-owned subsidiary Sonoco Limited (collectively
'Sonoco') for $14,848,000. The acquisition was accounted for as a purchase and,
accordingly, the acquired assets were recorded at their estimated fair values at
the date of acquisition. The operating results of Sonoco are included in the
Company's consolidated results of operations from the date of acquisition.
If the acquisition of Sonoco had occurred at the beginning of the Company's 1993
fiscal year, consolidated net sales, net income and earnings per share would
have approximated $136,023,000, $11,711,000 and $1.81 in 1993. This unaudited
pro forma data gives effect to certain adjustments, including amortization of
goodwill, increased interest expense on the acquisition debt and related income
tax effects. This information is not indicative of the results of operations as
they would have been if the companies had constituted a single entity during
such a period.
In March 1995, the Financial Accounting Standards Board issued Statement of
Financial Accounting Standards No. 121, "Accounting for the Impairment of
Long-Lived Assets and for Long-Lived Assets To Be Disposed Of" which becomes
effective in 1996. This standard provides guidance on reviewing long-lived
assets and certain intangibles for impairment. In addition, the standard
requires that long-lived assets and certain intangibles to be disposed of should
be reported at the lower of carrying amount or fair value less cost of disposal.
The Company has not yet fully determined the impact of adopting this standard,
but does not believe it will be significant.
27
<PAGE> 19
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
<TABLE>
<CAPTION>
NOTE 9 - SELECTED QUARTERLY FINANCIAL DATA (Unaudited)
- --------------------------------------------------------------------------------------
($ in thousands, except per share data) Earnings per share
Net Gross Net Fully
1995 Sales Profit Income Primary Diluted
- --------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
First quarter $ 33,646 $ 9,040 $ 2,356 $ 0.37 $ 0.37
Second quarter 42,984 11,469 3,525 0.55 0.55
Third quarter 48,230 13,231 4,223 0.66 0.66
Fourth quarter 31,513 8,910 1,981 0.31 0.31
-----------------------------------------------------------------
Total $156,373 $ 42,650 $ 12,085 $ 1.89 $ 1.89
-----------------------------------------------------------------
<CAPTION>
Earnings per share
Net Gross Net Fully
1994 Sales Profit Income Primary Diluted
- --------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
First quarter $ 33,857 $ 11,113 $ 3,007 $ 0.46 $ 0.46
Second quarter 40,340 13,506 4,258 0.66 0.66
Third quarter 42,301 12,890 3,962 0.61 0.61
Fourth quarter 31,274 8,263 2,100 0.33 0.33
-----------------------------------------------------------------
Total $147,772 $ 45,772 $ 13,327 $ 2.06 $ 2.06
-----------------------------------------------------------------
</TABLE>
See Note 1 to the Financial Statements: Earnings Per Share and Per Share Data
28
<PAGE> 20
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
NOTE - 10. GEOGRAPHIC SEGMENTS
Financial information by geographic area for the three fiscal years ended
December 30, 1995, is summarized as follows:
<TABLE>
<CAPTION>
- ----------------------------------------------------------------------------------------------------------
1995 UNITED GENERAL INTER AREA
STATES EUROPE CORPORATE ELIMINATIONS TOTAL
- ----------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
Trade sales - net $ 135,654,000 $ 20,719,000 $ $ $ 156,373,000
Inter -area sales $ 195,000 $ $ $ (195,000) $
------------- ------------ -------------- ----------- -------------
Net sales $ 135,849,000 $ 20,719,000 $ $ (195,000) $ 156,373,000
------------- ------------ -------------- ----------- -------------
Operating income (loss) $ 26,982,000 $ 709,000 $ (7,753,000) $ $ 19,938,000
Identifiable assets $ 67,044,000 $ 21,666,000 $ 2,086,000 $ $ 90,796,000
<CAPTION>
- ----------------------------------------------------------------------------------------------------------
1994 UNITED GENERAL INTER AREA
STATES EUROPE CORPORATE ELIMINATIONS TOTAL
- ----------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
Trade sales - net $ 129,878,000 $ 17,894,000 $ $ $ 147,772,000
Inter-area sales $ 330,000 $ $ $ (330,000) $
-------------- ------------ -------------- ----------- ------------
Net sales $ 130,208,000 $ 17,894,000 $ $ (330,000) $ 147,772,000
-------------- ------------ -------------- ----------- ------------
Operating income (loss) $ 30,783,000 $ (650,000) $ (7,774,000) $ $ 22,359,000
Identifiable assets $ 71,470,000 $ 16,364,000 $ 1,351,000 $ $ 89,185,000
<CAPTION>
- ----------------------------------------------------------------------------------------------------------
1993 UNITED GENERAL INTER AREA
STATES EUROPE CORPORATE ELIMINATIONS TOTAL
- ----------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
Trade sales - net $ 119,068,000 $ 11,013,000 $ $ $ 130,081,000
Inter -area sales $ 13,000 $ $ $ (13,000) $
-------------- ------------ -------------- ----------- ------------
Net sales $ 119,081,000 $ 11,013,000 $ $ (13,000) $ 130,081,000
-------------- ------------ -------------- ----------- ------------
Operating income (loss) $ 33,268,000 $ (867,000) $(10,453,000) $ $ 21,948,000
Identifiable assets $ 67,943,000 $ 16,529,000 $ 1,600,000 $ $ 86,072,000
</TABLE>
Inter-area transactions are accounted for on the same basis as sales to
unaffiliated parties. Identifiable assets are those assets associated with a
specific geographic area. General corporate assets consist primarily of the
corporate headquarters facility and various other investments and assets that
are not specific to a geographic area. Goodwill and related amortization have
been allocated by geographic area as applicable.
29
<PAGE> 21
REPORT OF INDEPENDENT AUDITORS
To the Shareholders and Directors of
Liqui-Box Corporation:
We have audited the accompanying consolidated balance sheet of Liqui-Box
Corporation and subsidiaries as of December 30, 1995, and the related
consolidated statements of income, stockholders' equity and cash flows for the
year ended December 30, 1995. These financial statements are the responsibility
of the Company's management. Our responsibility is to express an opinion on
these financial statements based on our audit. The consolidated financial
statements of Liqui-Box Corporation and subsidiaries as of December 31, 1994,
and for each of the two years in the period then ended were audited by other
auditors whose report, dated March 2, 1995, expressed an unqualified opinion on
those statements.
We conducted our audit in accordance with generally accepted auditing standards.
Those standards require that we plan and perform the audit to obtain reasonable
assurance about whether the financial statements are free of material
misstatement. An audit includes examining, on a test basis, evidence supporting
the amounts and disclosures in the financial statements. An audit also includes
assessing the accounting principles used and significant estimates made by
management, as well as evaluating the overall financial statement presentation.
We believe that our audit provides a reasonable basis for our opinion.
In our opinion, such 1995 consolidated financial statements present fairly, in
all material respects, the financial position of Liqui-Box Corporation and
subsidiaries at December 30, 1995, and the results of their operations and cash
flows for the year then ended, in conformity with generally accepted accounting
principles.
/s/Deloitte & Touche LLP
Columbus, Ohio
March 6, 1996
30
<PAGE> 22
OFFICERS AND DIRECTORS
OFFICERS SAMUEL B. DAVIS
Chairman, Chief Executive Officer,
President and Treasurer
ROBERT S. HAMILTON
Vice Chairman
PETER J. LINN
Secretary
C. WILLIAM MCBEE
Vice President, Manufacturing
JUAN JOSE PEREZ
Vice President, Administration
DIRECTORS CARL J. ASCHINGER, JR.
Chairman and Chief Executive Officer,
The Columbus Showcase Company
Retail and Bakery Deli Showcase Manufacturer
JEANETTE A. DAVIS
Trustee,
Jasam Foundation (Private Foundation)
SAMUEL B. DAVIS
Chairman, Chief Executive Officer,
President and Treasurer,
Liqui-Box Corporation
ROBERT S. HAMILTON
Vice Chairman,
Liqui-Box Corporation
PETER J. LINN
Secretary,
Liqui-Box Corporation
RUSSELL M. GERTMENIAN
Partner,
Vorys, Sater, Seymour and Pease
C. WILLIAM MCBEE
Vice President, Manufacturing
Liqui-Box Corporation
"Liqui-Box", "Handi-Tap", "QC/D", "Alaskan Falls", "Inpaco", and "Pacesetter"
are registered trademarks of Liqui-Box Corporation.
31
<PAGE> 1
Exhibit (21)
SUBSIDIARIES OF THE REGISTRANT
LIQUI-BOX CORPORATION AND SUBSIDIARIES
FORM 10-K FOR THE FISCAL YEAR ENDED DECEMBER 30, 1995
Percentage of
Voting Securities
Jurisdiction of Owned by
Subsidiaries Incorporation The Registrant
Alaskan Falls Bottling Company Ohio 100%
Commander Systems, Inc. Ohio 100%
Corporate Design, Inc. Ohio 100%
LB Acquisition Corp. (dba: B-Bar-B) Ohio 100%
LB Communications, Inc. Ohio 100%
LB Development Corp. Ohio 100%
LB Investments, Inc. Delaware 100%
LB Europe Limited England 100%
Inpaco Corporation Ohio 100%
Liqui-Box International, Inc. Ohio 100%
Liqui-Box of Canada, Ltd. Canada 100%
<PAGE> 1
Exhibit 23A
INDEPENDENT AUDITORS' CONSENT AND REPORT ON SCHEDULE
We consent to the incorporation by reference in Registration Statements No.
33-35815, No. 33-35816, No. 33-35817, and No. 33-42452 on Form S-8 of our
report dated March 6, 1996 incorporated by reference in this Annual Report on
Form 10-K of Liqui-Box Corporation for the year ended December 30, 1995.
Our audit of the financial statements referred to in our aforementioned report
also included the 1995 financial statement schedule of Liqui-Box Corporation,
listed in Item 14(a). This financial statement schedule is the responsibility
of the Company's management. Our responsibility is to express an opinion based
on our audit. In our opinion, such 1995 financial statement schedule, when
considered in relation to the basic 1995 financial statements taken as a whole,
presents fairly in all material aspects the information set forth therein.
/s/ DELOITTE & TOUCHE LLP
Columbus, Ohio
March 26, 1996
<PAGE> 1
EXHIBIT 23B
CONSENT OF INDEPENDENT AUDITORS
We consent to the incorporation by reference in the Registration Statement
Number 33-35815 on Form S-8 dated July 13, 1990, and in the Registration
Statement Number 33-35816 on Form S-8 dated July 13, 1990, and in the
Registration Statement Number 33-35817 on Form S-8 dated July 13, 1990, and in
the Registration Statement Number 33-42452 on Form S-8 dated August 29, 1991,
of our report dated March 2, 1995, with respect to the consolidated financial
statements and schedule of Liqui-Box Corporation included or incorporated by
reference in the Annual Report (Form 10-K) for the year ended December 30, 1995.
/s/ Ernst & Young LLP
Columbus, Ohio
March 26, 1996
<PAGE> 1
EXHIBIT 24
POWER OF ATTORNEY
KNOW ALL MEN BY THESE PRESENTS, that the undersigned officer
and/or director of LIQUI-BOX CORPORATION, and Ohio corporation, which
is about to file with the Securities and Exchange Commission,
Washington, D. C., under the provisions of the Securities Exchange Act
of 1934, as amended, an ANNUAL REPORT ON FORM 10-K, hereby constitutes
and appoints SAMUEL B. DAVIS, JUAN JOSE PEREZ, and JAMES B. HOLLOWAY
his/her true and lawful attorneys-in-fact and agents, with full power
of substitution and resubstitution, for him/her and in his/her name,
place and stead, in any and all capacities, to sign such Report and
any or all amendments or documents related thereto, and to file the
same, with all exhibits thereto, and other documents in connection
therewith, with the Securities and Exchange Commission, granting unto
said attorneys-in-fact and agents, and substitute or substitutes, and
each of them, full power and authority to do and perform each and
every act and thing requisite and necessary to be done in and about
the premises, as fully to all intents and purposes and he/she might or
could do in person, hereby ratifying and confirming all that said
attorneys-in-fact and agents or any of them or their or his/her
substitute or substitutes may lawfully do or cause to be done by
virtue hereof.
IN WITNESS WHEREOF, the undersigned has hereunto set his/her hand and
seal as of this 26th day of March, 1996.
/S/ Samuel B. Davis
<PAGE> 2
POWER OF ATTORNEY
KNOW ALL MEN BY THESE PRESENTS, that the undersigned officer
and/or director of LIQUI-BOX CORPORATION, and Ohio corporation, which
is about to file with the Securities and Exchange Commission,
Washington, D. C., under the provisions of the Securities Exchange Act
of 1934, as amended, an ANNUAL REPORT ON FORM 10-K, hereby constitutes
and appoints SAMUEL B. DAVIS, JUAN JOSE PEREZ, and JAMES B. HOLLOWAY
his/her true and lawful attorneys-in-fact and agents, with full power
of substitution and resubstitution, for him/her and in his/her name,
place and stead, in any and all capacities, to sign such Report and
any or all amendments or documents related thereto, and to file the
same, with all exhibits thereto, and other documents in connection
therewith, with the Securities and Exchange Commission, granting unto
said attorneys-in-fact and agents, and substitute or substitutes, and
each of them, full power and authority to do and perform each and
every act and thing requisite and necessary to be done in and about
the premises, as fully to all intents and purposes and he/she might or
could do in person, hereby ratifying and confirming all that said
attorneys-in-fact and agents or any of them or their or his/her
substitute or substitutes may lawfully do or cause to be done by
virtue hereof.
IN WITNESS WHEREOF, the undersigned has hereunto set his/her hand and
seal as of this 13th day of February, 1996.
/S/ Jeanette A. Davis
---------------------
<PAGE> 3
POWER OF ATTORNEY
KNOW ALL MEN BY THESE PRESENTS, that the undersigned officer
and/or director of LIQUI-BOX CORPORATION, and Ohio corporation, which
is about to file with the Securities and Exchange Commission,
Washington, D. C., under the provisions of the Securities Exchange Act
of 1934, as amended, an ANNUAL REPORT ON FORM 10-K, hereby constitutes
and appoints SAMUEL B. DAVIS, JUAN JOSE PEREZ, and JAMES B. HOLLOWAY
his/her true and lawful attorneys-in-fact and agents, with full power
of substitution and resubstitution, for him/her and in his/her name,
place and stead, in any and all capacities, to sign such Report and
any or all amendments or documents related thereto, and to file the
same, with all exhibits thereto, and other documents in connection
therewith, with the Securities and Exchange Commission, granting unto
said attorneys-in-fact and agents, and substitute or substitutes, and
each of them, full power and authority to do and perform each and
every act and thing requisite and necessary to be done in and about
the premises, as fully to all intents and purposes and he/she might or
could do in person, hereby ratifying and confirming all that said
attorneys-in-fact and agents or any of them or their or his/her
substitute or substitutes may lawfully do or cause to be done by
virtue hereof.
IN WITNESS WHEREOF, the undersigned has hereunto set his/her hand and
seal as of this 27th day of March, 1996.
/S/ Robert S. Hamilton
----------------------
<PAGE> 4
POWER OF ATTORNEY
KNOW ALL MEN BY THESE PRESENTS, that the undersigned officer
and/or director of LIQUI-BOX CORPORATION, and Ohio corporation, which
is about to file with the Securities and Exchange Commission,
Washington, D. C., under the provisions of the Securities Exchange Act
of 1934, as amended, an ANNUAL REPORT ON FORM 10-K, hereby constitutes
and appoints SAMUEL B. DAVIS, JUAN JOSE PEREZ, and JAMES B. HOLLOWAY
his/her true and lawful attorneys-in-fact and agents, with full power
of substitution and resubstitution, for him/her and in his/her name,
place and stead, in any and all capacities, to sign such Report and
any or all amendments or documents related thereto, and to file the
same, with all exhibits thereto, and other documents in connection
therewith, with the Securities and Exchange Commission, granting unto
said attorneys-in-fact and agents, and substitute or substitutes, and
each of them, full power and authority to do and perform each and
every act and thing requisite and necessary to be done in and about
the premises, as fully to all intents and purposes and he/she might or
could do in person, hereby ratifying and confirming all that said
attorneys-in-fact and agents or any of them or their or his/her
substitute or substitutes may lawfully do or cause to be done by
virtue hereof.
IN WITNESS WHEREOF, the undersigned has hereunto set his/her hand and
seal as of this 27th day of March, 1996.
/S/ Peter J. Linn
-----------------
<PAGE> 5
POWER OF ATTORNEY
KNOW ALL MEN BY THESE PRESENTS, that the undersigned officer
and/or director of LIQUI-BOX CORPORATION, and Ohio corporation, which
is about to file with the Securities and Exchange Commission,
Washington, D. C., under the provisions of the Securities Exchange Act
of 1934, as amended, an ANNUAL REPORT ON FORM 10-K, hereby constitutes
and appoints SAMUEL B. DAVIS, JUAN JOSE PEREZ, and JAMES B. HOLLOWAY
his/her true and lawful attorneys-in-fact and agents, with full power
of substitution and resubstitution, for him/her and in his/her name,
place and stead, in any and all capacities, to sign such Report and
any or all amendments or documents related thereto, and to file the
same, with all exhibits thereto, and other documents in connection
therewith, with the Securities and Exchange Commission, granting unto
said attorneys-in-fact and agents, and substitute or substitutes, and
each of them, full power and authority to do and perform each and
every act and thing requisite and necessary to be done in and about
the premises, as fully to all intents and purposes and he/she might or
could do in person, hereby ratifying and confirming all that said
attorneys-in-fact and agents or any of them or their or his/her
substitute or substitutes may lawfully do or cause to be done by
virtue hereof.
IN WITNESS WHEREOF, the undersigned has hereunto set his/her hand and
seal as of this 28th day of March, 1996.
/S/ C. William McBee
--------------------
<PAGE> 6
POWER OF ATTORNEY
KNOW ALL MEN BY THESE PRESENTS, that the undersigned officer
and/or director of LIQUI-BOX CORPORATION, and Ohio corporation, which
is about to file with the Securities and Exchange Commission,
Washington, D. C., under the provisions of the Securities Exchange Act
of 1934, as amended, an ANNUAL REPORT ON FORM 10-K, hereby constitutes
and appoints SAMUEL B. DAVIS, JUAN JOSE PEREZ, and JAMES B. HOLLOWAY
his/her true and lawful attorneys-in-fact and agents, with full power
of substitution and resubstitution, for him/her and in his/her name,
place and stead, in any and all capacities, to sign such Report and
any or all amendments or documents related thereto, and to file the
same, with all exhibits thereto, and other documents in connection
therewith, with the Securities and Exchange Commission, granting unto
said attorneys-in-fact and agents, and substitute or substitutes, and
each of them, full power and authority to do and perform each and
every act and thing requisite and necessary to be done in and about
the premises, as fully to all intents and purposes and he/she might or
could do in person, hereby ratifying and confirming all that said
attorneys-in-fact and agents or any of them or their or his/her
substitute or substitutes may lawfully do or cause to be done by
virtue hereof.
IN WITNESS WHEREOF, the undersigned has hereunto set his/her hand and
seal as of this 27th day of March, 1996.
/S/ Carl J. Aschinger, Jr.
--------------------------
<PAGE> 7
POWER OF ATTORNEY
KNOW ALL MEN BY THESE PRESENTS, that the undersigned officer
and/or director of LIQUI-BOX CORPORATION, and Ohio corporation, which
is about to file with the Securities and Exchange Commission,
Washington, D. C., under the provisions of the Securities Exchange Act
of 1934, as amended, an ANNUAL REPORT ON FORM 10-K, hereby constitutes
and appoints SAMUEL B. DAVIS, JUAN JOSE PEREZ, and JAMES B. HOLLOWAY
his/her true and lawful attorneys-in-fact and agents, with full power
of substitution and resubstitution, for him/her and in his/her name,
place and stead, in any and all capacities, to sign such Report and
any or all amendments or documents related thereto, and to file the
same, with all exhibits thereto, and other documents in connection
therewith, with the Securities and Exchange Commission, granting unto
said attorneys-in-fact and agents, and substitute or substitutes, and
each of them, full power and authority to do and perform each and
every act and thing requisite and necessary to be done in and about
the premises, as fully to all intents and purposes and he/she might or
could do in person, hereby ratifying and confirming all that said
attorneys-in-fact and agents or any of them or their or his/her
substitute or substitutes may lawfully do or cause to be done by
virtue hereof.
IN WITNESS WHEREOF, the undersigned has hereunto set his/her hand and
seal as of this 27th day of March, 1996.
/S/ James B. Holloway
---------------------
<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> 1,000
<S> <C>
<PERIOD-TYPE> 12-MOS
<FISCAL-YEAR-END> DEC-30-1995
<PERIOD-END> DEC-30-1995
<CASH> 9,424
<SECURITIES> 0
<RECEIVABLES> 18,978
<ALLOWANCES> 679
<INVENTORY> 18,572
<CURRENT-ASSETS> 48,699
<PP&E> 85,579
<DEPRECIATION> 57,140
<TOTAL-ASSETS> 90,796
<CURRENT-LIABILITIES> 9,775
<BONDS> 0
0
0
<COMMON> 1,210
<OTHER-SE> 78,445
<TOTAL-LIABILITY-AND-EQUITY> 90,796
<SALES> 156,373
<TOTAL-REVENUES> 156,373
<CGS> 113,723
<TOTAL-COSTS> 136,435
<OTHER-EXPENSES> 0
<LOSS-PROVISION> 723
<INTEREST-EXPENSE> 222
<INCOME-PRETAX> 20,038
<INCOME-TAX> 7,953
<INCOME-CONTINUING> 12,085
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 12,085
<EPS-PRIMARY> 1.89
<EPS-DILUTED> 1.89
</TABLE>
