FORM 10-Q
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
[X] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE
ACT OF 1934
For the thirteen week period ended March 29, 1997
OR
[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934
For the transition period from___________________________to__________________
Commission File Number 0-8514
LIQUI-BOX CORPORATION
_______________________________________________________
(Exact name of registrant as specified in its charter)
OHIO 31-0628033
(State or other jurisdiction (I.R.S. Employer
of incorporation or organization) Identification No.)
6950 Worthington-Galena Road, Worthington, Ohio 43085
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code (614) 888-9280
Not Applicable
(Former name, former address and former
fiscal year, if changed since last report.)
Indicate by check mark whether the registrant (1) has filed all reports
required to be filed by Section 13 or 15(d) of the Securities Exchange Act of
1934 during the preceding 12 months (or for such shorter period that the
registrant was required to file such reports), and (2) has been subject to
such filing requirements for the past 90 days.
Yes __X__ No _____
Indicate the number of shares outstanding of each of the issuer's classes of
common stock, as of the latest practicable date.
Class Outstanding at May 5, 1997
__________________________ __________________________
Common Stock, no par value 5,749,941 shares
Exhibit Index at Page 9
Page 1 of 12
<PAGE>
LIQUI-BOX CORPORATION
INDEX
Page No.
Part I - Financial Information:
Item 1. Financial Statements
Condensed Consolidated Balance Sheets
March 29, 1997 and December 28, 1996 3-4
Condensed Consolidated Statements of Income
For the thirteen week periods ended
March 29, 1997 and March 30, 1996 5
Condensed Consolidated Statements of Cash Flows
For the thirteen week periods ended
March 29, 1997 and March 30, 1996 6
Notes to Condensed Consolidated Financial Statements 7
Item 2. Management's Discussion and Analysis of
Financial Condition and Results of Operations 8-9
Part II - Other Information - Items 1-6 9
Signatures 10
Exhibit 11 - Statement Re Computation of
Earnings Per Share 11
Exhibit 27 - Financial Data Schedule 12
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<PAGE>
<TABLE>
Liqui-Box Corporation and Subsidiaries
Condensed Consolidated Balance Sheets
UNAUDITED
-----------------------------------
March 29, 1997 December 28, 1996
Assets
<S> <C> <C>
Current Assets:
Cash and cash equivalents $ 18,227,000 $ 15,248,000
Accounts receivable:
Trade, net of allowance for doubtful accounts
of $788,000 and $742,000 at respective dates 15,358,000 16,265,000
Other 712,000 1,141,000
------------- -------------
16,070,000 17,406,000
Inventories:
Raw materials and supplies 9,501,000 8,869,000
Work in process 4,122,000 4,194,000
Finished goods 5,341,000 4,491,000
------------- -------------
18,964,000 17,554,000
Other current assets 1,630,000 1,517,000
------------- -------------
Total Current Assets 54,891,000 51,725,000
Property, plant and equipment, at cost:
Buildings and leasehold improvements 9,667,000 9,872,000
Equipment and vehicles 63,007,000 62,469,000
Equipment leased to customers 20,128,000 18,940,000
Less accumulated depreciation (63,940,000) (62,494,000)
------------- -------------
28,862,000 28,787,000
Construction in process 7,271,000 5,584,000
Land 658,000 658,000
------------- -------------
36,791,000 35,029,000
Other Assets:
Goodwill, net of amortization 9,556,000 9,857,000
Deferred charges and other assets 3,236,000 3,405,000
------------- -------------
12,792,000 13,262,000
------------- -------------
Total Assets $ 104,474,000 $ 100,016,000
============= =============
</TABLE>
The accompanying notes are an integral part of the financial statements.
-3-
<PAGE>
<TABLE>
Liqui-Box Corporation and Subsidiaries
Condensed Consolidated Balance Sheets
UNAUDITED
-------------------------------------
March 29, 1997 December 28, 1996
-------------- -----------------
Liabilities and Stockholders' Equity
<S> <C> <C>
Current Liabilities:
Accounts payable 9,149,000 6,640,000
Dividends payable 750,000 758,000
Salaries, wages and related liabilities 3,193,000 1,696,000
Federal, state and local taxes 159,000 1,059,000
Other accrued liabilities 5,018,000 4,104,000
------------- -------------
Total Current Liabilities 18,269,000 14,257,000
Other noncurrent liabilities:
Deferred income taxes 1,554,000 1,379,000
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 6,765,000 6,615,000
Cumulative translation adjustment 1,256,000 1,986,000
Unrealized Gains on Marketable Securities 598,000 605,000
Retained earnings 111,439,000 109,175,000
Less:
Treasury stock, at cost--1,473,809 and 1,432,203
shares at respective dates (36,617,000) (35,211,000)
------------- -------------
Total Stockholders' Equity 84,651,000 84,380,000
------------- -------------
Total Liabilities and Stockholders' Equity $ 104,474,000 $ 100,016,000
============= =============
</TABLE>
The accompanying notes are an integral part of the financial statements.
-4-
<PAGE>
Liqui-Box Corporation and Subsidiaries
Condensed Consolidated Statements of Income
UNAUDITED
-------------------------------
Thirteen Weeks Ended
-------------------------------
March 29, March 30,
1997 1996
Net Sales $ 33,958,000 $ 34,183,000
Cost of Sales 23,336,000 22,883,000
------------ ------------
10,622,000 11,300,000
Selling, administrative and
development expenses 5,616,000 6,056,000
------------ ------------
5,006,000 5,244,000
Interest income 155,000 89,000
Interest expense (8,000) (1,000)
Other income (expense) 247,000 (31,000)
------------ ------------
5,400,000 5,301,000
Taxes on income 2,209,000 2,160,000
------------ ------------
Net Income $ 3,191,000 $ 3,141,000
============ ============
Earnings per common and common
equivalent share
Primary $ 0.53 $ 0.50
============ ============
Fully Diluted $ 0.53 $ 0.50
============ ============
Cash dividends per
common share $ 0.13 $ 0.11
============ ============
Weighted average number of
common and common
equivalent shares used in
computing earnings per share
Primary 6,003,253 6,297,238
============ ============
Fully Diluted 6,006,638 6,297,238
============ ============
The accompanying notes are an integral part of the financial statements.
-5-
<PAGE>
<TABLE>
Liqui-Box Corporation and Subsidiaries
Condensed Consolidated Statements of Cash Flows
UNAUDITED
-----------------------------
Thirteen Weeks Ended
March 29, March 30,
1997 1996
--------- ---------
<S> <C> <C>
Operating Activities:
Net income $ 3,191,000 $ 3,141,000
Adjustments to reconcile net income to net cash
provided by operating activities:
Depreciation and amortization 2,040,000 1,644,000
Provision for loss on accounts receivable 114,000 256,000
Amortization of other noncurrent assets 140,000 268,000
Loss (gain) on disposal of property, plant and equipment (258,000) (7,000)
Deferred Compensation 109,000 118,000
Changes in deferred income tax accounts 175,000 25,000
Changes in operating assets and liabilities:
(Increase) decrease in accounts receivable 1,221,000 (731,000)
(Increase) decrease in inventories (1,409,000) (4,619,000)
(Increase) decrease in other current assets (113,000) (54,000)
Increase (decrease) in accounts payable 2,512,000 5,922,000
Increase (decrease) in salaries, wages and related liabilities 1,497,000 1,631,000
Increase (decrease) in other accrued liabilities 7,000 1,045,000
------------ ------------
Net Cash Provided by Operating Activities 9,226,000 8,639,000
Investing Activities:
Purchases of property, plant and equipment (4,317,000) (3,095,000)
Proceeds from sale of property, plant and equipment 593,000 223,000
Other asset changes, net 317,000 (61,000)
------------ ------------
Net Cash Used in Investing Activities (3,407,000) (2,933,000)
Financing Activities:
Acquisition of treasury shares (1,406,000) (1,328,000)
Exercise of stock options, including tax benefit 46,000 51,000
Cash dividends (750,000) (668,000)
------------ ------------
Net Cash Used in Financing Activities (2,110,000) (1,945,000)
Effect of exchange rate changes on Cash (730,000) 52,000
------------ ------------
Increase in Cash and Cash Equivalents 2,979,000 3,813,000
Cash and cash equivalents at beginning of year 15,248,000 9,424,000
------------ ------------
Cash and Cash Equivalents at End of First Quarter $ 18,227,000 $ 13,237,000
============ ============
</TABLE>
The accompanying notes are an integral part of the financial statements.
-6-
<PAGE>
LIQUI-BOX CORPORATION
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
UNAUDITED
1. The accompanying financial statements include the accounts of Liqui-Box
Corporation (the "Company") and its subsidiaries.
The information furnished reflects all adjustments (all of which were of a
normal recurring nature) which are, in the opinion of management, necessary
to fairly present the consolidated financial position, results of
operations, and changes in cash flows on a consistent basis.
Certain amounts in the prior year's financial statements have been
reclassified to conform to the 1997 presentation.
2. In February 1997, the Financial Accounting Standards Board issued Statement
of Financial Accounting Standards No. 128 (SFAS 128), "EARNINGS PER SHARE"
which simplifies the rules for computing earnings per share (EPS) and makes
U.S. requirements compatible with international standards. SFAS 128
simplifies the computation of EPS by replacing the presentation of primary
and fully diluted EPS with basic EPS and diluted EPS. Basic EPS excludes
dilution, and is computed by dividing income available to common
shareholders by the weighted-average number of common shares outstanding
for the period. Diluted EPS is computed in a manner similar to fully
diluted EPS. SFAS 128 is effective for financial statements issued for
periods ending after December 15, 1997, including interim periods. Although
earlier application is not permitted, prior-period EPS data is required to
be restated in financial statements after application of the standard.
Using the new standard, the Company's basic EPS were $.55 and $.51 per
common share for the periods ended March 29, 1997 and March 30, 1996,
respectively.
3. The accompanying unaudited consolidated financial statements are presented
in accordance with the requirements for Form 10-Q for interim reporting
purposes. Reference should be made to the Company's aforementioned Form
10-K for additional disclosures including a summary of the Company's
accounting policies, which have not significantly changed.
-7-
<PAGE>
ITEM 2.
MANAGEMENT'S DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS
Results of Operations
During the First Quarter 1997, Liqui-Box Corporation and its subsidiaries (the
"Company") experienced sales comparable to the First Quarter 1996 in terms of
units and dollars. Unit sales increased 2% and dollar sales decreased 1%.
Gross profit, as a percentage of net sales, was 31.3% in the First Quarter 1997
and 33.1% in the First Quarter 1996. The decrease in gross profit as a percent
of net sales is primarily the result of a change in product mix.
For the First Quarter of 1997, selling, administrative, and development expenses
were 16.5% of sales as compared to 17.7% in the First Quarter of 1996. The
decrease is primarily the result of the Company's continuing efforts to control
costs. In addition, the Company sold a warehouse facility with a gain of
$260,000 during the First Quarter 1997. This amount is included other income on
the financial statements.
Income before taxes as a percentage of net sales was 15.9% in the First Quarter
1997 and 15.5% in the First Quarter 1996.
The provision for income taxes was 40.9% of before tax income for the First
Quarter of 1997 and 40.7% for the First Quarter 1996. The effective tax rate for
the First Quarter 1997 is based on the Company's anticipated tax rate for the
1997 fiscal year.
At the end of the First Quarter of 1997 and 1996, the Company had no significant
backlog of orders, which is industry typical.
Liquidity and Capital Resources
Total working capital at March 29, 1997, was $36,622,000 compared to $37,468,000
at December 28, 1996. This decrease reflects the seasonal needs of the Company.
The ratio of current assets to current liabilities was 3.0 to 1 at the end of
the First Quarter 1997 and 3.6 to 1 at year-end 1996. Net cash provided from
operations was $9,226,000 for the three months ended March 29, 1997 compared to
$8,639,000 for the three months ended March 30, 1996. The increase in cash
provided was the result of improved profitability of the Company, coupled with
better asset and liability management. Net cash used in investing activities was
$3,407,000 for the three months ended March 29, 1997 compared to $2,933,000 for
the three months ended March 30, 1996. The cash was used primarily for purchases
of new plant equipment and improvements to existing property and plant
equipment. Cash used in financing activities was $2,110,000 for the three months
ended March 29, 1997, compared to cash provided of $1,945,000 for the three
months ended March 30, 1996. The cash used in financing activities was primarily
for the acquisition of treasury stock and payment of cash dividends
The Company's major commitments for capital expenditures as of March 29, 1997
were, as they have been in the past, primarily for increased capacity at
existing locations, building filler machines for lease and tooling for new
projects. Funds required to fulfill these commitments will be provided
principally from operations with any additional funding needed coming from
credit facilities that aggregate $30,000,000 with The Huntington National Bank.
No amounts were outstanding under this facility at March 29, 1997.
-8-
<PAGE>
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 1997.
There have been no significant changes in capitalization during the first three
months of 1997, except for the repurchase of treasury shares in the aggregate
amount of $1,406,000 which were acquired throughout the First Quarter 1997. The
common shares were bought at a price considered fair by management and there was
cash available for these purchases. The Company felt the purchases represented a
good investment and would secure common shares for issuance under the Company's
employee benefit plans. The Company has not entered into any significant
financing arrangements not reflected in the financial statements.
PART II. OTHER INFORMATION
Item 1-5. Inapplicable
Item 6. Exhibits and Reports on Form 8-K
(a) Exhibit Index
Exhibit 11. Statement Re Computation of Earnings Per Share
(page 10)
Exhibit 27. Financial Data Schedule (page 11)
(b) No reports on Form 8-K were filed during the quarter ended
March 29, 1997.
-9-
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.
LIQUI-BOX CORPORATION
_____________________
(Registrant)
Date May 12, 1997 By /s/ C. William McBee
__________________________________
C. William McBee
Vice President - Manufacturing
(Duly Authorized Officer)
Date May 12, 1997 By /s/ James B. Holloway
__________________________________
James B. Holloway
Controller
(Principal Accounting Officer)
-10-
LIQUI-BOX CORPORATION
STATEMENT RE COMPUTATION OF EARNINGS PER SHARE
Thirteen Weeks Ended
------------------------------
March 29, March 30,
1997 1996
Primary:
Weighted average number of common
shares outstanding 5,819,257 6,115,866
Net effect of dilutive stock options--
based on treasury stock method
using average market price 183,996 181,372
---------- ----------
Weighted average common and
common equivalent shares 6,003,253 6,297,238
========== ==========
Net Income $3,191,000 $3,141,000
Earnings per common and
common equivalent share $ 0.53 $ 0.50
========== ==========
Fully Diluted:
Weighted average number of common
shares outstanding 5,819,257 6,115,866
Net effect of dilutive stock options--
based on treasury stock method
using the quarter-end market price
if higher than average market price 187,381 181,372
---------- ----------
Fully Diluted Shares 6,006,638 6,297,238
========== ==========
Net Income $3,191,000 $3,141,000
Earnings per common share
assuming full dilution $ 0.53 $ 0.50
========== ==========
-11-
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM THE
CONSOLIDATED BALANCE SHEET AND THE CONSOLIDATED STATEMENT OF INCOME AND IS
QUALIFIED IN ITS ENTIRETY BY REFERENCE TO SUCH FINANCIAL STATEMENTS.
</LEGEND>
<MULTIPLIER> 1000
<S> <C>
<PERIOD-TYPE> 3-MOS
<FISCAL-YEAR-END> JAN-03-1998
<PERIOD-END> MAR-29-1997
<CASH> 18,227
<SECURITIES> 0
<RECEIVABLES> 16,146
<ALLOWANCES> 788
<INVENTORY> 18,964
<CURRENT-ASSETS> 54,891
<PP&E> 100,731
<DEPRECIATION> 63,940
<TOTAL-ASSETS> 104,474
<CURRENT-LIABILITIES> 18,269
<BONDS> 0
0
0
<COMMON> 1,210
<OTHER-SE> 83,441
<TOTAL-LIABILITY-AND-EQUITY> 104,474
<SALES> 33,958
<TOTAL-REVENUES> 33,958
<CGS> 23,336
<TOTAL-COSTS> 28,952
<OTHER-EXPENSES> 0
<LOSS-PROVISION> 114
<INTEREST-EXPENSE> 8
<INCOME-PRETAX> 5,400
<INCOME-TAX> 2,209
<INCOME-CONTINUING> 3,191
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 3,191
<EPS-PRIMARY> 0.53
<EPS-DILUTED> 0.53
</TABLE>
