<PAGE> 1
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, DC 20549
FORM 10-Q
Quarterly Report pursuant to Section 13 or 15(d) of
the Securities Exchange Act of 1934
For the Quarterly Period Ended June 30, 2000
Commission File No. 333-51569
PARAGON CORPORATE HOLDINGS INC.
(Exact Name of Registrant as Specified in its Charter)
Delaware 34-1845312
-------- ----------
(State or other Jurisdiction of (I.R.S. Employer
Incorporation or Organization) Identification No.)
CO-REGISTRANTS AND SUBSIDIARY GUARANTORS
A.B.Dick Company Delaware 04-3892065
C I, Inc. Delaware 13-3583725
Itek Graphix Corp. Delaware 04-2893064
Curtis Sub, Inc. Delaware 34-1737529
<TABLE>
<S> <C> <C>
Paragon Corporate Holdings Inc. A.B.Dick Company C I, Inc. f/k/a Curtis Industries, Inc.
7400 Caldwell Avenue 7400 Caldwell Avenue 6140 Parkland Boulevard
Niles, Illinois 60714 Niles, Illinois 60714 Mayfield Heights, Ohio 44124
(847) 779-2500 (847) 779-1900 (440) 446-9700
</TABLE>
Itek Graphix Corp. Curtis Sub, Inc.
7400 Caldwell Avenue 6140 Parkland Boulevard
Niles, Illinois 60714 Mayfield Heights, Ohio 44124
(847) 779-1900 (440) 446-9700
(Address, including zip code, and telephone number, including area code, of
registrant's principal executive offices)
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 twelve 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 practical date.
As of July 31, 2000, there were 4,200,000 shares of the registrant's common
stock outstanding.
I
<PAGE> 2
INDEX
PARAGON CORPORATE HOLDINGS INC.
Page
Number
-------
PART I FINANCIAL INFORMATION
Item 1 Financial Statements (Unaudited) 1
Condensed Consolidated Balance Sheets 2
June 30, 2000 and December 31, 1999
Condensed Consolidated Statements of Operations 3
Three and Six Months ended June 30, 2000 and 1999
Condensed Consolidated Statements of Cash Flows 4
Six Months ended June 30, 2000 and 1999
Notes to Condensed Consolidated Financial Statements 5
Item 2 Management's Discussion and Analysis of Financial 15
Condition and Results of Operations
Item 3 Quantitative and Qualitative Disclosures About Market Risk 18
PART II OTHER INFORMATION
Item 6 Exhibits and Reports on Form 8-K 20
Signatures 21
II
<PAGE> 3
Part I. Financial Information
Item 1. Financial Statements (Unaudited)
1
<PAGE> 4
Paragon Corporate Holdings Inc.
Condensed Consolidated Balance Sheets
(In Thousands)
June 30, December 31,
2000 1999
-------- --------
(Unaudited) (Audited)
Assets:
Current assets:
Cash and cash equivalents $ 63,732 $ 15,341
Short-term investments -- 3,610
Accounts receivable, net 36,807 35,943
Inventories 43,897 45,924
Other current assets 5,941 1,923
-------- --------
Total current assets 150,377 102,741
Property, plant and equipment, net 11,823 20,363
Goodwill, net 32,080 30,692
Other assets 4,677 6,860
-------- --------
$198,957 $160,656
======== ========
Liabilities and Stockholder's Equity (Deficit):
Current liabilities:
Revolving credit facility $ 25,856 $ 10,219
Accounts payable 22,221 18,813
Accrued compensation 6,779 6,034
Accrued interest 2,767 2,767
Accrued other 16,351 11,934
Deferred service revenue 13,904 6,037
Due to GEC 817 852
Current portion of long-term debt
and capital lease obligations 2,495 1,498
-------- --------
Total current liabilities 91,190 58,154
Senior Notes 115,000 115,000
Other long-term debt and capital lease
obligations, less current portion 1,245 1,849
Retirement obligations 8,159 3,546
Other long-term liabilities 7,534 2,296
Stockholder's equity (deficit):
As of June 30, 2000 -- common stock,
$0.01 par value, Authorized 5,000,000
shares; issued and outstanding 4,200,000
shares; As of December 31, 1999 --
common stock, no par value, Authorized
2,000 shares of Class A (voting) and 28,000
shares of Class B (non-voting); issued and
outstanding 1,000 shares of Class A and
19,000 shares of Class B, at stated value 42 1
Paid-in capital 106 47
Shareholder note (100) --
Retained earnings (deficit) (23,431) (19,506)
Accumulated other comprehensive loss (788) (731)
-------- --------
Total stockholder's equity (deficit) (24,171) (20,189)
-------- --------
$198,957 $160,656
======== ========
See notes to condensed consolidated financial statements.
2
<PAGE> 5
Paragon Corporate Holdings Inc.
Condensed Consolidated Statements of Operations
(In Thousands)
<TABLE>
<CAPTION>
(Unuadited) (Unaudited)
Three Months Ended Six Months Ended
------------------------------------- ------------------------------------
June 30, 2000 June 30, 1999 June 30, 2000 June 30, 1999
----------------- ------------------ ----------------- -----------------
<S> <C> <C> <C> <C>
Net revenue $ 61,760 $ 44,310 $ 118,920 $ 87,254
Cost of revenue 45,334 32,572 88,449 64,014
-------- -------- --------- --------
Gross profit 16,426 11,738 30,471 23,240
COSTS AND EXPENSES:
Sales and marketing expenses 7,166 6,560 13,628 12,763
General and administrative expenses 7,856 3,846 14,731 8,672
Research and development 731 970 1,625 1,751
Depreciation and amortization 1,467 494 2,726 1,055
Management fee (12) 123 80 192
Acquisition, relocation and severance costs 588 0 1,069 753
-------- -------- --------- --------
17,796 11,993 33,859 25,186
-------- -------- --------- --------
Operating loss (1,370) (255) (3,388) (1,946)
Interest income 136 14 184 517
Interest expense (3,767) (2,847) (7,330) (6,158)
Other income (expense) 135 (76) (5) (54)
-------- -------- --------- --------
Loss from continuing operations before income taxes (4,866) (3,164) (10,539) (7,641)
Income tax expense 94 81 100 52
-------- -------- --------- --------
Loss from continuing operations (4,960) (3,245) (10,639) (7,693)
Discontinued operations (Note D):
Income from discontinued operations, net of
income taxes of $10, $7, $10, $7, respectively 49 1,224 954 2,217
Gain on disposal of discontinued operations 10,260 -- 10,260 --
-------- -------- --------- --------
10,309 1,224 11,214 2,217
Net income (loss) $ 5,349 $ (2,021) $ 575 $ (5,476)
======== ======== ========= ========
</TABLE>
See notes to condensed consolidated financial statements.
3
<PAGE> 6
Paragon Corporate Holdings Inc.
Condensed Consolidated Statements of Cash Flows
(In Thousands)
<TABLE>
<CAPTION>
(Unaudited)
Six Months Ended
-------------------------------
June 30, 2000 June 30, 1999
------------- -------------
<S> <C> <C>
Operating activities:
Net income (loss) $ 575 $(5,476)
Adjustments to reconcile net income (loss)
to net cash used in operating activities:
Gain on sale of business (10,260) --
Provision for depreciation and amortization 4,328 3,273
Changes in operating assets and liabilities (7,025) (3,659)
-------- -------
Net cash used in operating activities (12,382) (5,862)
Investing activities:
Acquisition of business, net of cash acquired (11,986) --
Purchases of property, plant and equipment, net (1,352) (3,034)
Net proceeds from sale of business 60,492 --
Decrease in short-term investments 3,610 5,312
-------- -------
Net cash provided by investing activities 50,764 2,278
Financing activities:
Net borrowings on revolving credit facility 15,637 4,832
Decrease in amounts due to GEC (35) (860)
Proceeds from long-term borrowings 67 808
Principal payments on long-term borrowings (984) (1,322)
Distribution for taxes (4,500) --
-------- -------
Net cash provided by financing activities 10,185 3,458
Effect of exchange rate changes on cash (176) (261)
-------- -------
Increase (decrease) in cash and cash equivalents 48,391 (387)
Cash and cash equivalents at beginning of period 15,341 7,462
-------- -------
Cash and cash equivalents at end of period $ 63,732 $ 7,075
======== =======
</TABLE>
See notes to condensed consolidated financial statements.
4
<PAGE> 7
Paragon Corporate Holdings Inc.
Notes to Condensed Consolidated Financial Statements (Unaudited)
(In Thousands)
A. ORGANIZATION
Paragon Corporate Holdings Inc. ("the Company") is a Delaware holding company
organized in September 1996. The Company has no independent operations or
investments other than its investments in its subsidiaries, except that the
Company has temporarily invested, at the holding company level, the residual
proceeds from the Senior Notes issued during 1998. NES Group, Inc. is the sole
stockholder of the Company.
B. BASIS OF PRESENTATION
The accompanying unaudited condensed consolidated financial statements have been
prepared in accordance with generally accepted accounting principles for interim
financial information and with the instructions to Form 10-Q and Article 10 of
Regulation S-X. Accordingly, they do not include all of the information and
footnotes required by generally accepted accounting principles for complete
financial statements. In the opinion of management, all adjustments (consisting
of normal recurring accruals) considered necessary for a fair presentation have
been included. Operating results for the three and six month periods ended June
30, 2000 are not necessarily indicative of the results that may be expected for
the year ending December 31, 2000. For further information, refer to the
consolidated financial statements and footnotes of Paragon Corporate Holdings
Inc. set forth in the Company's Annual Report on Form 10-K for the year ended
December 31, 1999.
C. ACQUISITION
On January 27, 2000, the Company completed the acquisition of all the
outstanding common stock of Multigraphics, Inc. ("Multigraphics"), a supplier of
high quality pre-press, press and post-press equipment, supplies, and technical
services to the printing industry. Pursuant to the Merger Agreement, the Company
paid $1.25 in cash per share, or $3.6 million, and assumed $7.4 million of
outstanding debt of Multigraphics. The aggregate purchase price was $12.5
million including expenses of the transaction. In addition, the Company loaned
$2.0 million to Multigraphics pursuant to a promissory note agreement executed
by Multigraphics on September 29, 1999. The excess of purchase price over net
assets acquired has been assigned a preliminary value of approximately $32.5
million and will be written off over thirty years. The allocation of purchase
price was based on preliminary estimates, and will be revised upon final
determination of the fair values of the assets and liabilities acquired.
The acquisition was accounted for under the purchase method of accounting and,
accordingly, the results of operations of Multigraphics are included in the
consolidated financial statements from the date of acquisition. The following
pro forma information presents the results of operations for the six months
ended June 30, 2000 and 1999, respectively, as though the acquisition had
occurred on January 1, 1999. The pro forma amounts give effect to certain
adjustments, principally goodwill amortization and depreciation expense related
to the write-off of redundant computer equipment, software, and leasehold
improvements. These pro forma results have been prepared for comparative
purposes only and do not purport to be indicative of the results of operations
which actually would have resulted had the acquisition occurred on January 1,
1999:
5
<PAGE> 8
Six Months Ended
------------------------
June 30, June 30,
2000 1999
-------- --------
Net revenues $126,930 $144,718
Operating loss from continuing operations (3,532) (607)
Net income (loss) 249 (4,957)
D. DISCONTINUED OPERATION
On April 27, 2000, the Company entered into a definitive agreement to sell
substantially all of the assets and related liabilities of its wholly-owned
subsidiary, Curtis Industries, Inc. ("Curtis") which comprised entirely the
Company's automotive and industrial supplies segment. The transaction closed on
May 10, 2000 and the Company received net proceeds of $60.5 million and the sale
resulted in a $10.3 million gain.
The disposition of Curtis represents the disposal of a segment of a business
under APB Opinion No. 30. Accordingly, the consolidated statements of operations
have been restated to reflect the results of Curtis as a discontinued operation.
Net revenues of Curtis for the three-month periods ended June 30, 2000 and 1999
were $6.5 million and $21.1 million, respectively, and $27.7 million and $41.6
million, respectively, for the six-month periods ended June 30, 2000 and 1999,
respectively.
E. USE OF ESTIMATES
The preparation of financial statements in conformity with generally accepted
accounting principles requires management to make estimates and assumptions that
affect the amounts reported in the financial statements and accompanying notes.
Actual results could differ from those estimates.
F. COMPREHENSIVE INCOME (LOSS)
The components of comprehensive income (loss) are as follows:
Three Months Ended Six Months Ended
------------------ ----------------
June 30, June 30, June 30, June 30,
2000 1999 2000 1999
------- ------- ------- -------
Net income (loss) $ 5,349 $(2,021) $ 575 $(5,476)
Foreign currency translation adjustment (274) (70) (241) (261)
------- ------- ----- -------
Comprehensive income (loss) $ 5,075 $(2,091) $ 334 $(5,737)
======= ======= ===== =======
G. FAIR VALUE OF FINANCIAL INSTRUMENTS
The carrying amount of cash and cash equivalents, short-term investments, trade
receivables and payables approximates fair value because of the short maturity
of these instruments. The carrying amount of the revolving credit facility
approximates fair value. The carrying amount of the senior notes exceeds its
fair value at June 30, 2000 by $66,700. The fair value has been determined using
the market price of the related securities at June 30, 2000. On May 10, 2000,
the Company amended its revolving credit agreement, decreasing its credit line
under the agreement to $32.0 million from $37.0 million, reflecting a lower
borrowing base as a result of the sale of Curtis Industries, mentioned above.
6
<PAGE> 9
H. RECENT ACCOUNTING PRONOUNCEMENTS
In December 1999, the Securities and Exchange Commission issued Staff Accounting
Bulletin (SAB) 101, "Revenue Recognition in Financial Statements," which
summarizes the staffs views regarding the application of generally accepted
accounting principles to selected revenue recognition issues and is effective
for the fourth quarter of 2000. The Company is currently assessing the impact
SAB 101 will have on the Company's results of operations.
I. INVENTORIES
Domestic inventories, which represent approximately 81% of total consolidated
inventory, are determined on the last-in, first-out (LIFO) basis and foreign
inventories are determined on the first-in, first-out (FIFO) basis. Where
necessary, reserves are provided to value inventory at the lower of cost or
market.
Inventories are summarized as follows:
June 30, 2000 December 31, 1999
------------- -----------------
Raw materials and work in process $ 7,735 $ 5,527
Finished goods 37,276 37,290
LIFO reserve (1,114) 3,107
-------- -------
$ 43,897 $45,924
======== =======
J. INCOME TAXES
On March 14, 2000, A.B.Dick Company ("A.B.Dick"), a wholly-owned subsidiary of
the Company, elected C Corporation status for United States income tax purposes
effective January 1, 2000. Accordingly, as of January 1, 2000, A.B.Dick
recognized its existing deferred income taxes. On July 14, 2000, the Company
elected C Corporation status for United States income tax purposes effective May
12, 2000. Accordingly, as of May 12, 2000, the Company recognized its existing
deferred income taxes. Prior to these elections, the Company and its
wholly-owned subsidiaries were treated as Subchapter S Corporations for United
States income tax purposes. For 1999, the Company's United States operations
were not subject to income taxes as separate entities and the Company's United
States income is included in the income tax returns of the Stockholder. Under
the terms of the Tax Payment Agreement with the Stockholder, the Company makes
distributions to the stockholder for payment of income taxes as required. The
foreign subsidiaries of A.B.Dick are subject to foreign income taxes. For the
three months ended June 30, 2000 and 1999, the Company had foreign income tax
expense of $94 and $81 from continuing operations, respectively. For the six
months ended June 30, 2000 and 1999, the Company had foreign income tax expense
of $100 and $52 from continuing operations, respectively.
Deferred income taxes reflect the net tax effects of temporary differences
between the carrying amounts of assets and liabilities for financial reporting
purposes and the amounts used for income tax purposes. The net operating loss
and AMT credit carryforwards principally resulted from the Company's acquisition
of Multigraphics. The acquired carryforwards are subject to the Section 382
limitations imposed by the Internal Revenue Code of 1986, as amended, and the
regulations thereunder. The net operating loss carryforwards expire beginning in
the year 2000. Where the Company has determined that it is more likely than not
that the net deferred tax assets will not be realized, a valuation allowance has
been established.
7
<PAGE> 10
Significant components of the Company's deferred income tax assets and
liabilities at June 30, 2000, are as follows:
Deferred income tax assets:
Accrued liabilities $ 7,473
Capitalized research and development 1,235
Property, plant and equipment 851
Allowance for doubtful accounts 263
AMT credit carryforward 1,800
Net operating loss carryforward 85,722
Other 3,315
Restructuring and integration reserves 1,541
---------
102,200
Valuation allowance (96,513)
---------
Total deferred income tax assets 5,687
Deferred income tax liabilities:
Inventory (5,292)
Other (395)
---------
Total deferred income tax liabilities (5,687)
---------
Net deferred income taxes $ --
=========
K. STOCKHOLDER'S EQUITY
On May 26, 2000, the Board of Directors approved an amendment to the articles
of incorporation that authorized the issuance of 5,000,000 shares of $0.01 par
value common stock and also authorized the exchange of all outstanding shares
of Class A and Class B no par value common stock for the $0.01 par value common
stock.
The Company issued 210,000 shares of its common stock to an officer of its
wholly-owned subsidiary, A.B. Dick, in exchange for a non-interest bearing note
secured by the underlying shares. The outstanding principal balance on this
note amounted to $100,000 at June 30, 2000 and is classified as a reduction of
shareholder's equity (deficit).
8
<PAGE> 11
L. GUARANTOR AND NON-GUARANTOR SUBSIDIARIES
The Company's domestic subsidiaries excluding the Multigraphics LLC, all of
which are directly or indirectly wholly owned, are the only guarantors of Senior
Notes. The guarantees are full, unconditional and joint and several. Separate
financial statements of these guarantor subsidiaries are not presented as
management has determined that they would not be material to investors.
The Company's foreign subsidiaries and Multigraphics LLC are not guarantors of
the Senior Notes. Summarized consolidating balance sheets as of June 30, 2000
and December 31, 1999 for the Company, the guarantor subsidiaries, and the
non-guarantor subsidiaries are as follows (in thousands):
<TABLE>
<CAPTION>
Combined Combined
The Guarantor Non-Guarantor
Company Subsidiaries Subsidiaries Eliminations Total
------- ------------ -------------- ------------ -----
<S> <C> <C> <C> <C> <C>
BALANCE SHEET DATA
(JUNE 30, 2000):
Current assets:
Cash and cash equivalents $ 6,968 $ 55,268 $ 1,496 $ -- $ 63,732
Accounts receivable, net 39,412 29,469 7,338 (39,412) 36,807
Inventories -- 35,450 9,136 (689) 43,897
Other 188 3,559 2,194 -- 5,941
-------- -------- --------- --------- -------
Total current assets 46,568 123,746 20,164 (40,101) 150,377
Property, plant and equipment, net -- 10,718 1,105 -- 11,823
Goodwill, net -- 32,080 -- -- 32,080
Investment in subsidiaries 58,265 11,867 -- (70,132) --
Other assets 3,920 757 -- -- 4,677
-------- -------- ------- --------- --------
$108,753 $179,168 $21,269 $(110,233) $198,957
======== ======== ======= ========= ========
Current liabilities:
Revolving credit facility $ 25,856 $ -- $ -- $ -- $ 25,856
Accounts payable -- 20,026 2,195 -- 22,221
Accrued expenses 3,132 17,696 5,069 -- 25,897
Deferred service revenue -- 12,682 1,222 -- 13,904
Due to GEC -- 817 -- -- 817
Current portion of long-term debt
and capital lease obligations -- 1,678 817 -- 2,495
Intercompany -- 44,077 (4,665) (39,412) --
-------- -------- ------- --------- --------
Total current liabilities 28,988 96,976 4,638 (39,412) 91,190
Senior Notes 115,000 -- -- -- 115,000
Other long-term debt and capital lease
obligations, less current portion -- 756 489 -- 1,245
Retirement obligations -- 3,884 4,275 -- 8,159
Other long-term liabilities -- 4,915 2,619 -- 7,534
Stockholder's equity (deficit) (35,235) 72,637 9,248 (70,821) (24,171)
-------- -------- ------- --------- --------
$108,753 $179,168 $21,269 $(110,233) $198,957
======== ======== ======= ========= ========
</TABLE>
9
<PAGE> 12
<TABLE>
<CAPTION>
L. GUARANTOR AND NON-GUARANTOR SUBSIDIARIES - CONTINUED
Combined Combined
The Guarantor Non-Guarantor
Company Subsidiaries Subsidiaries Eliminations Total
------- ------------ -------------- ------------ -----
<S> <C> <C> <C> <C> <C>
BALANCE SHEET DATA
(DECEMBER 31, 1999):
Current assets:
Cash and cash equivalents $ 7,760 $ 5,396 $ 2,185 $ -- $ 15,341
Short-term investments 3,610 -- -- -- 3,610
Accounts receivable, net 31,254 26,155 9,788 (31,254) 35,943
Inventories -- 35,880 10,238 (194) 45,924
Other 398 889 636 -- 1,923
-------- -------- ------- --------- --------
Total current assets 43,022 68,320 22,847 (31,448) 102,741
Property, plant and equipment, net 5 19,040 1,318 -- 20,363
Goodwill, net -- 30,637 55 -- 30,692
Investment in subsidiaries 58,488 15,028 -- (73,516) --
Other assets 6,839 17 4 -- 6,860
-------- -------- ------- --------- --------
$108,354 $133,042 $24,224 $(104,964) $160,656
======== ======== ======= ========= ========
Current liabilities:
Revolving credit facility $ 10,219 $ -- $ -- $ -- $ 10,219
Accounts payable -- 16,167 2,646 -- 18,813
Accrued expenses 3,324 13,968 3,443 -- 20,735
Deferred service revenue -- 4,942 1,095 -- 6,037
Due to GEC -- 852 -- -- 852
Current portion of long-term debt
and capital lease obligations -- 1,448 50 -- 1,498
Intercompany -- 27,123 5,163 (32,286) --
-------- -------- ------- --------- --------
Total current liabilities 13,543 64,500 12,397 (32,286) 58,154
Senior notes 115,000 -- -- -- 115,000
Other long-term debt and capital lease
obligations, less current portion -- 1,717 132 -- 1,849
Retirement obligations -- 3,539 7 -- 3,546
Other long-term liabilities -- 2,296 -- -- 2,296
Stockholder's equity (deficit) (20,189) 60,990 11,688 (72,678) (20,189)
-------- -------- ------- --------- --------
$108,354 $133,042 $24,224 $(104,964) $160,656
======== ======== ======= ========= ========
</TABLE>
10
<PAGE> 13
L. GUARANTOR AND NON-GUARANTOR SUBSIDIARIES - CONTINUED
Summarized consolidating statements of income for the three months ended June
30, 2000 and 1999, respectively, for the Company, the guarantor subsidiaries,
and the non-guarantor subsidiaries are as follows (in thousands):
<TABLE>
<CAPTION>
Combined Combined
The Guarantor Non-Guarantor
Company Subsidiaries Subsidiaries Eliminations Total
------- ------------ -------------- ------------ -----
<S> <C> <C> <C> <C> <C>
INCOME STATEMENT DATA:
(THREE MONTHS ENDED JUNE 30, 2000):
Net revenue $ -- $53,806 $8,742 $ (788) $61,760
Cost of revenue -- 39,677 6,445 (788) 45,334
------- ------- ------ ------ -------
Gross profit -- 14,129 2,297 -- 16,426
Total operating expenses 1,007 13,867 2,899 23 17,796
------- ------- ------ ------ -------
Operating income (loss) (1,007) 262 (602) (23) (1,370)
Interest income (expense), net (2,768) (878) 15 -- (3,631)
Other income (expense) (3,375) 26 (2) 3,486 135
------- ------- ------ ------ -------
Income (loss) from continuing
operations before income taxes (7,150) (590) (589) 3,463 (4,866)
Income tax expense -- 15 79 -- 94
------- ------- ------ ------ -------
Income (loss) from continuing
operations (7,150) (605) (668) 3,463 (4,960)
Discontinued operations:
Income (loss) from discontinued
operations, net of tax -- 242 (216) 23 49
Gain on disposal of
discontinued operations -- 10,260 -- -- 10,260
------- ------- ------ ------ -------
-- 10,502 (216) -- 10,309
Net income (loss) $(7,150) $ 9,897 $ (884) $3,486 $ 5,349
======= ======= ====== ====== =======
</TABLE>
<TABLE>
<CAPTION>
Combined Combined
The Guarantor Non-Guarantor
Company Subsidiaries Subsidiaries Eliminations Total
------- ------------ -------------- ------------ -----
<S> <C> <C> <C> <C> <C>
INCOME STATEMENT DATA:
(THREE MONTHS ENDED JUNE 30, 1999):
Net revenue $ -- $34,143 $11,192 $(1,025) $44,310
Cost of revenue -- 25,528 8,069 (1,025) 32,572
------- ------- ------- ------- -------
Gross profit -- 8,615 3,123 -- 11,738
Total operating expenses 139 8,677 3,062 115 11,993
------- ------- ------- ------- -------
Operating income (loss) (139) (62) 61 (115) (255)
Interest income (expense), net (2,471) (375) 13 -- (2,833)
Other income (expense) -- (65) (11) -- (76)
------- ------- ------- ------- -------
Income (loss) from continuing
operations before income taxes (2,610) (502) 63 (115) (3,164)
Income tax expense -- 5 76 -- 81
------- ------- ------- ------- -------
Loss from continuing operations (2,610) (507) (13) (115) (3,245)
Discontinued operations:
Income from discontinued
operations, net of tax -- 1,077 16 131 1,224
------- ------- ------- ------- -------
Net income (loss) $(2,610) $ 570 $ 3 $ 16 $(2,021)
======= ======= ======= ======= =======
</TABLE>
11
<PAGE> 14
L. GUARANTOR AND NON-GUARANTOR SUBSIDIARIES - CONTINUED
Summarized consolidating statements of income for the six months ended June 30,
2000 and 1999, respectively, for the Company, the guarantor subsidiaries, and
the non-guarantor subsidiaries are as follows (in thousands):
<TABLE>
<CAPTION>
Combined Combined
The Guarantor Non-Guarantor
Company Subsidiaries Subsidiaries Eliminations Total
------- ------------ ------------- ------------ -------
<S> <C> <C> <C> <C> <C>
INCOME STATEMENT DATA:
(SIX MONTHS ENDED JUNE 30, 2000):
Net revenue $ -- $ 99,883 $ 20,838 $ (1,801) $ 118,920
Cost of revenue -- 74,356 15,894 (1,801) 88,449
-------- -------- -------- -------- ---------
Gross profit -- 25,527 4,944 -- 30,471
Total operating expenses 1,699 26,166 5,871 123 33,859
-------- -------- -------- -------- ---------
Operating loss (1,699) (639) (927) (123) (3,388)
Interest income (expense), net (5,497) (1,673) 24 -- (7,146)
Other income (expense) (3,294) (47) (150) 3,486 (5)
-------- -------- -------- -------- ---------
Income (loss) from continuing
operations before income taxes (10,490) (2,359) (1,053) 3,363 (10,539)
Income tax expense -- 22 78 -- 100
-------- -------- -------- -------- ---------
Income (loss) from continuing
operations (10,490) (2,381) (1,131) 3,363 (10,639)
Discontinued operations:
Income (loss) from discontinued
operations, net of tax -- 1,187 (356) 123 954
Gain on disposal of discontinued
operations -- 10,260 -- -- 10,260
-------- -------- -------- -------- ---------
-- 11,447 (356) 123 11,214
Net income (loss) $(10,490) $ 9,066 $ (1,487) $ 3,486 $ 575
======== ======== ======== ======== =========
</TABLE>
<TABLE>
<CAPTION>
Combined Combined
The Guarantor Non-Guarantor
Company Subsidiaries Subsidiaries Eliminations Total
------- ------------ ------------- ------------ -------
<S> <C> <C> <C> <C> <C>
INCOME STATEMENT DATA:
(SIX MONTHS ENDED JUNE 30, 1999):
Net revenue $ -- $67,119 $22,202 $(2,067) $87,254
Cost of revenue -- 49,968 16,113 (2,067) 64,014
------- ------- ------- ------- -------
Gross profit -- 17,151 6,089 -- 23,240
Total operating expenses 289 18,317 6,391 189 25,186
------- ------- ------- ------- -------
Operating (loss) (289) (1,166) (302) (189) (1,946)
Interest income (expense) (4,930) (739) 28 -- (5,641)
Other income (expense) -- (70) 16 -- (54)
------- ------- ------- ------- -------
Loss from continuing operations
before income taxes (5,219) (1,975) (258) (189) (7,641)
Income tax expense -- 23 29 -- 52
------- ------- ------- ------- -------
Loss from continuing operations (5,219) (1,998) (287) (189) (7,693)
Discontinued operations:
Income (loss) from discontinued
operations, net of tax -- 2,046 (43) 214 2,217
------- ------- ------- ------- -------
Net income (loss) $(5,219) $ 48 $ (330) $ 25 $(5,476)
======= ======= ======= ======= =======
</TABLE>
12
<PAGE> 15
L. GUARANTOR AND NON-GUARANTOR SUBSIDIARIES - CONTINUED
Summarized consolidating statements of cash flows for the six months ended
June 30, 2000 and 1999, respectively, for the Company, the guarantor
subsidiaries, and the non-guarantor subsidiaries are as follows (in thousands):
<TABLE>
<CAPTION>
Combined Combined
The Guarantor Non-Guarantor
Company Subsidiaries Subsidiaries Eliminations Total
------- ------------ -------------- ------------ -----
<S> <C> <C> <C> <C> <C>
CASH FLOW DATA:
(SIX MONTHS ENDED JUNE 30, 2000):
Net cash provided by (used in) operating activities $ (7,492) $(6,452) $(1,924) $ 3,486 $(12,382)
Investing activities:
Acquisition of business, net of cash acquired (12,472) -- -- 486 (11,986)
Purchases of property, plant and equipment, net -- (1,002) (350) -- (1,352)
Proceeds from sale of business -- 60,492 -- -- 60,492
Decrease in short-term investments 3,610 -- -- -- 3,610
-------- ------- ------- ------- --------
Net cash provided by (used in) investing activities (8,862) 59,490 (350) 486 50,764
Financing activities:
Borrowings on revolving credit facility 15,637 -- -- -- 15,637
Decrease in amounts due to GEC -- (35) -- -- (35)
Proceeds from long-term borrowings -- 27 40 -- 67
Principal payments on long-term borrowings -- (950) (34) -- (984)
Intercompany (75) 2,263 1,784 (3,972) --
Dividends received/(paid) 4,500 (4,500) -- -- --
Distribution for taxes (4,500) -- -- -- (4,500)
-------- ------- ------- ------- --------
Net cash provided by financing activities 15,562 (3,195) 1,790 (3,972) 10,185
Effect of exchange rate changes on cash -- 29 (205) -- (176)
-------- ------- ------- ------- --------
Increase (decrease) in cash and cash equivalents (792) 49,872 (689) -- 48,391
Cash and cash equivalents at beginning of period 7,760 5,396 2,185 -- 15,341
-------- ------- ------- ------- --------
Cash and cash equivalents at end of period $ 6,968 $55,268 $ 1,496 $ -- $ 63,732
======== ======= ======= ======= ========
</TABLE>
13
<PAGE> 16
<TABLE>
<CAPTION>
Combined Combined
The Guarantor Non-Guarantor
Company Subsidiaries Subsidiaries Eliminations Total
------- ------------ ------------- ------------ -----
<S> <C> <C> <C> <C> <C>
CASH FLOW DATA:
(SIX MONTHS ENDED JUNE 30, 1999):
Net cash used in operating activities $(4,903) $ (834) $ (125) $ -- $(5,862)
Investing activities:
Purchases of property, plant, and equipment, net -- (2,631) (403) -- (3,034)
Payment of acquisition liabilities -- -- -- -- --
Decrease in short-term investments 5,312 -- -- -- 5,312
------- ------- ------- ---- -------
Net cash provided by (used in)
investing activities 5,312 (2,631) (403) -- 2,278
Financing activities:
Borrowings on revolving credit facility 4,832 -- -- -- 4,832
Decrease in amounts due to GEC -- (860) -- -- (860)
Proceeds from long-term borrowings -- 588 220 -- 808
Principal payments on long-term borrowings -- (1,305) (17) -- (1,322)
Intercompany (5,178) 5,772 (594) -- --
------- ------- ------- ---- -------
Net cash provided by (used in)
financing activities (346) 4,195 (391) -- 3,458
Effect of exchange rate changes on cash -- (189) (72) -- (261)
------- ------- ------- ---- -------
Increase (decrease) in cash and
cash equivalents 63 541 (991) -- (387)
Cash and cash equivalents at beginning
of period 28 4,174 3,260 -- 7,462
------- ------- ------- ---- -------
Cash and cash equivalents at end of period $ 91 $ 4,715 $ 2,269 $ -- $ 7,075
======= ======= ======= ==== =======
</TABLE>
14
<PAGE> 17
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
OF OPERATIONS
For further information, refer to the consolidated financial statements and
footnotes of Paragon Corporate Holdings Inc. set forth in the Company's Annual
Report on Form 10-K for the year ended December 31, 1999.
GENERAL
The Company, through its wholly-owned subsidiaries, is engaged in the
manufacture and distribution of printing equipment and supplies. On May 10,
2000, the Company sold substantially all of the assets and liabilities of its
Curtis Industries Inc. subsidiary previously reported as the automotive and
industrial supplies segment. As a result of the sale, the Company received net
proceeds of $60.5 million and realized a gain of $10.3 million. The results of
operations for Curtis have been reported as a discontinued operation. The
following discussion and analysis of operating results excludes the results of
Curtis. The Company's printing equipment and supplies business is a leading
manufacturer, marketer, and distributor of printing products for the global
quick print, small commercial, and in-plant printing markets.
On January 27, 2000, the Company acquired all of the outstanding common stock of
Multigraphics, Inc. ("Multigraphics"). The acquisition has been accounted for as
a purchase and, accordingly, the consolidated financial statements include the
results of Multigraphics' operations since the date of acquisition. As of March
31, 2000, the Company combined the operations of Multigraphics and A.B.Dick.
RESULTS OF CONTINUING OPERATIONS
THREE MONTHS ENDED JUNE 30, 2000, COMPARED TO THE THREE MONTHS ENDED JUNE 30,
1999:
NET REVENUE
For the three months ended June 30, 2000, net revenue increased $17.5 million or
39.5% to $61.8 from $44.3 million for the quarter ended June 30, 1999. The
increase was principally attributable to the inclusion of the results of
operations of Multigraphics since the date of acquisition. Excluding
Multigraphics, net revenue decreased by $5.9 million or 13.3%. Printing
equipment sales increased $1.5 million or 8.8% over the prior year to $18.4
million. The Multigraphics acquisition accounted for $4.5 million of the
increase, and this was partially offset by sales declines in Asia, Latin
America, and certain European markets due to weaker demand levels. Printing
supplies sales increased $7.6 million or 42.6% from the prior year to $25.3
million. The increase was attributable to the inclusion of Multigraphics sales
of $9.7 million, offset by weakness in certain international markets, a decline
in the supply stream of previously discontinued domestic equipment, and lower
optical equipment supplies sales. The decrease in supply sales on discontinued
products was partially offset by increases in sales of digital equipment
supplies. Repair parts and service revenues increased $8.4 million or 86.5% to
$18.1 million, $9.1 million relating to the inclusion of Multigraphics, and a
decrease of $0.7 million due to the ongoing impact of the discontinuance of
A.B.Dick's line of distributed copier equipment and digital duplicators.
GROSS PROFIT
Gross profit increased $4.7 million or 40.1% to $16.4 million for the quarter
ended June 30, 2000,
15
<PAGE> 18
from $11.7 million for the quarter ended June 30, 1999. Gross profit as a
percentage of sales was 26.6% during the second quarter of 2000 compared to
26.5% for the same period last year. Excluding the impact of the Multigraphics
acquisition, gross profit and gross profit percentage in the current year were
$10.5 million and 27.4%, respectively. The increase in gross profit percentage
is primarily attributable to higher fixed cost absorption in 2000 on
manufactured equipment due to increased volume.
COSTS AND EXPENSES
Costs and expenses increased by $5.8 million to $17.8 million for the quarter
ended June 30, 2000 from $12.0 million for the quarter ended June 30, 1999. The
acquisition of Multigraphics accounted for $4.6 million of the increase. Costs
and expenses for 2000 include $0.6 million in charges for relocation and
severance costs for A.B.Dick following the acquisition of Multigraphics.
Excluding Multigraphics and relocation and severance costs, costs and expenses
in 2000 compared to 1999 increased by $0.6 million due to higher corporate and
depreciation and amortization expenses, offset by reductions in sales and
marketing expenses.
OPERATING LOSS
The operating loss increased to ($1.4) million for the quarter ended June 30,
2000 from ($0.3) million for the quarter ended June 30, 1999. The increase in
operating loss from 1999 resulted primarily from lower revenues and gross
profits for A.B.Dick, along with non-recurring restructuring costs associated
with the integration of Multigraphics.
SIX MONTHS ENDED JUNE 30, 2000, COMPARED TO THE SIX MONTHS ENDED JUNE 30, 1999:
NET REVENUE
For the six months ended June 30, 2000, net revenue increased $31.6 million or
36.3% to $118.9 from $87.3 million for the six months ended June 30, 1999. The
increase was principally attributable to the inclusion of the results of
operations of Multigraphics since the date of acquisition. Excluding
Multigraphics, net revenue decreased by $7.5 million or 8.5%. Printing equipment
sales increased $3.4 million or 10.6% over the prior year to $35.6 million. The
Multigraphics acquisition accounted for $6.6 million of the increase, and this
was partially offset by sales declines in Asia, Latin America, and certain
European markets due to weaker demand levels. Printing supplies sales increased
$13.9 million or 39.1% from the prior year to $49.4 million. The increase was
attributable to the inclusion of Multigraphics sales of $17.2 million, offset by
weakness in certain international markets, a decline in the supply stream of
previously discontinued domestic equipment, and lower optical equipment supplies
sales. The decrease in supply sales on discontinued products was partially
offset by increases in sales of digital equipment supplies. Repair parts and
service revenues increased $14.3 million or 72.9% to $33.9 million, $15.4
million relating to Multigraphics, and a decrease of $1.1 million due to the
ongoing impact of discontinuance of A.B.Dick's line of distributed copier
equipment and digital duplicators.
GROSS PROFIT
Gross profit increased $7.3 million or 31.4% to $30.5 million for the six months
ended June 30, 2000, from $23.2 million for the six months ended June 30, 1999.
Gross profit as a percentage of sales was 25.6% during the first six months of
2000 compared to 26.6% for the same period last year. Excluding the impact of
the Multigraphics acquisition, gross profit and gross profit percentage in the
current year were $20.7 million and 26.0%, respectively. The decrease in gross
profit percentage is attributable primarily to increased freight costs, an
increase in inventory valuation allowances on discontinued products, and lower
service margins due to decreased installations and service contracts on
previously discontinued equipment.
16
<PAGE> 19
COSTS AND EXPENSES
Costs and expenses increased by $8.7 million to $33.9 million for the six months
ended June 30, 2000 from $25.2 million for the six months ended June 30, 1999.
The acquisition of Multigraphics accounted for $8.1 million of the increase.
Costs and expenses for 2000 include $1.1 million in charges for relocation and
severance costs for A.B.Dick following the acquisition of Multigraphics. For the
first six months of 1999, relocation and severance costs for A.B.Dick were $0.8
million. Excluding Multigraphics and relocation and severance costs, costs and
expenses in 2000 compared to 1999 increased by $0.2 million due to higher
corporate and depreciation and amortization expenses, offset by reductions in
sales and marketing expense.
OPERATING LOSS
The operating loss increased $1.4 million to ($3.4) million for the six months
ended June 30, 2000 from ($2.0) million for the six months ended June 30, 1999.
The increase in operating loss from 1999 resulted primarily from lower revenues
and gross profits for A.B.Dick and higher corporate expenses, offset by lower
A.B.Dick operating expenses.
RESTRUCTURING CHARGE
In connection with the acquisition of Multigraphics, the Company is in the
process of integrating the Multigraphics operations into its A.B.Dick business.
As part of this integration, the Company anticipates that it will incur
restructuring costs of approximately $2.0 million comprised primarily of
relocation and severance costs that will be expensed during 2000. Severance and
other costs pertaining to Multigraphics that qualify under EITF 95-3,
Recognition of Liabilities in Connection with a Purchase Business Combination,
are included in the purchase price allocation.
INTERNATIONAL OPERATIONS
The Company transacts business in a number of countries throughout the world and
has facilities in the United States, Canada, the United Kingdom, the
Netherlands, and Belgium. As a result, the Company is subject to business risks
inherent in non-U.S. operations, including political and economic uncertainty,
import and export limitations, exchange controls, and currency fluctuations. The
Company believes that the risks related to its foreign operations are mitigated
by the relative political and economic stability of the countries in which its
largest foreign operations are located. As the U.S. dollar strengthens and
weakens against foreign currencies in which the Company transacts business, its
financial results will be affected. The principal foreign currencies in which
the Company transacts business are the Japanese yen, the Canadian dollar, the
British pound sterling, the Dutch guilder, and the Belgian franc. The
fluctuation of the U.S. dollar versus other currencies resulted in decreases
to stockholder's equity of approximately $0.3 million and $0.3 million for the
six months ended June 30, 2000 and 1999, respectively.
LIQUIDITY AND CAPITAL RESOURCES
Net cash used in operating activities was $12.4 million and $5.9 million for the
six months ended June 30, 2000 and 1999, respectively. Net cash used in
operating activities in 2000 was principally the result of operating losses for
A.B.Dick, interest costs resulting from the issuance of $115.0 million of senior
notes on April 1, 1998, and an increase in inventories of $3.0 million. Net cash
used in operating activities in 1999 was also primarily attributable to
operating losses for A.B.Dick and interest on the senior notes mentioned above.
The net cash provided by investing activities was $50.8 million and $2.3 million
for the six months ended June 30, 2000 and 1999, respectively. The 2000 amount
reflects the cash cost of the Multigraphics acquisition of $12.0 million and the
proceeds from the sale of the net assets of Curtis Industries of $60.5 million.
For 1999, net cash used in investing activities includes the
17
<PAGE> 20
liquidation of short-term investments of $5.3 million used primarily to fund
property, plant, and equipment purchases of $3.0 million.
Net cash provided by financing activities was $10.2 million and $3.5 million for
the six months ended June 30, 2000 and 1999, respectively. The net cash provided
by financing activities in 2000 was primarily the result of net borrowings under
the Company's revolving credit facility of $15.6 million, of which $12.0 million
was used to fund the Multigraphics acquisition and the remainder was used to
fund operations. The net cash provided by financing activities in 1999 was
primarily the result of borrowings under the Company's revolving credit facility
of $4.8 million.
The Company's primary capital requirements (excluding acquisitions) consist of
working capital, capital expenditures and debt service. The Company expects
current financial resources and funds from operations to be adequate to meet
current cash requirements. At June 30, 2000, the Company had cash and cash
equivalents of $63.7 million and unused credit facilities of $1.6 million
available for its use. On May 10, 2000, the Company amended its revolving credit
agreement, decreasing its credit line under the agreement to $32.0 million from
$37.0 million, reflecting a lower borrowing base as a result of the sale of
Curtis Industries mentioned above. At June 30, 2000 the Company was in violation
of certain financial covenants under the terms of the revolving credit
agreement. The Company received waivers of these covenant violations through
September 30, 2000.
CAUTIONARY STATEMENT FOR SAFE HARBOR PURPOSES
This Management's Discussion and Analysis of Financial Condition and Results of
Operations (MD&A) contains forward-looking statements within the meaning of the
federal securities laws. As a general matter, forward-looking statements are
those focused upon future plans, objectives, or performance as opposed to
historical items and include statements of anticipated events or trends and
expectations and beliefs relating to matters that are not historical in nature.
Such forward-looking statements include, without limitation, statements
regarding the future prospects of the business. Such forward-looking statements
are subject to uncertainties and factors relating to the Company's operations
and business environment, all of which are difficult to predict and many of
which are beyond the control of the Company, that could cause actual results of
the Company to differ materially from those matters expressed in or implied by
such forward-looking statements.
ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK
The Company assumed its securities that are available for sale are similar
enough to aggregate those securities for presentation purposes. Under the terms
of the bond indenture, the Company's short-term investments are limited to,
among others, securities issued by or insured by the full faith and credit of
the U.S. government, certificates of deposit or eurodollar time deposits or
commercial paper having the highest rating available from Moody's or Standard &
Poor's. Maturities can be between six months and one year from the date of
purchase, except that maturities in excess of six months cannot exceed 40% of
the total investments.
The Company's interest income and expense are most sensitive to changes in the
general level of U.S. interest rates. In this regard, changes in the U.S.
interest rates affect interest earned on the Company's cash equivalents and
short-term investments as well as interest paid on a portion of its debt. To
mitigate the impact of fluctuations in U.S. interest rates, the Company
generally maintains the majority of its debt as fixed rate by borrowing on a
long-term basis.
18
<PAGE> 21
The Company's earnings are also affected by fluctuations in the value of the
U.S. dollar as compared to foreign currencies, predominantly in European
countries. An additional risk relates to product shipped between the Company's
European subsidiaries. In addition to the impact on the intercompany balances,
changes in exchange rates also affect volume of sales or the foreign currency
sales price as competitors products become more or less attractive.
The carrying amount of cash and cash equivalents, trade receivables and payables
approximates fair value because of the short maturity of these instruments. The
carrying amount of the revolving credit facility approximates fair value. The
carrying amount of the senior notes exceeds its fair value at June 30, 2000 by
$66,700. The fair value has been determined using the market price of the
related securities at June 30, 2000.
19
<PAGE> 22
Part II. Other Information
Item 6. Exhibits and Reports on Form 8-K
(a) Index of Exhibits
(b) Exhibit 27 - Financial Data Schedule
(c) Reports on Form 8-K filed in the second quarter of 2000
Form 8-K Current Report dated May 24, 2000, regarding the
disposition of Curtis Industries.
20
<PAGE> 23
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.
PARAGON CORPORATE HOLDINGS INC.
By: /s/ Frank D. Zaffino
--------------------
FRANK D. ZAFFINO
President and Chief Executive Officer and Director
(As duly authorized representative and Principal
Executive Officer)
PARAGON CORPORATE HOLDINGS INC.
By: /s/ Gregory T. Knipp
--------------------
GREGORY T. KNIPP
Acting Chief Financial Officer (As duly authorized
representative and as Principal Financial and
Accounting Officer)
A.B.DICK COMPANY
By: /s/ Gregory T. Knipp
--------------------
GREGORY T. KNIPP
Chief Financial Officer (As duly authorized
representative and as Principal Financial and
Accounting Officer)
C I, INC. F/K/A CURTIS INDUSTRIES, INC.
By: /s/ Gregory T. Knipp
--------------------
GREGORY T. KNIPP
Acting Chief Financial Officer (As duly authorized
representative and as Principal Financial and
Accounting Officer)
ITEK GRAPHIX CORP.
By: /s/ Frank D. Zaffino
--------------------
FRANK D. ZAFFINO
President and Chief Executive Officer (As duly
authorized Officer)
Date: August 14, 2000
<PAGE> 24
PARAGON CORPORATE HOLDINGS INC.
INDEX OF EXHIBITS
<TABLE>
<CAPTION>
Exhibit
Number Description of Exhibit
------ ----------------------
<S> <C> <C>
3.1 (a) Certificate of Incorporation of Paragon Corporate Holdings Inc., as currently in effect. *
(b) Certificate of Amendment to Certificate of Incorporation of Paragon Corporate Holdings Inc.,
as currently in effect, dated May 26, 2000.
3.2 By-Laws of Paragon Corporate Holdings Inc. as currently in effect *
3.3 Certificate of Incorporation of A.B.Dick Company, as currently in effect *
3.4 By-Laws of A.B.Dick Company, as currently in effect. *
3.5 (a) Certificate of Incorporation of Curtis Industries, Inc. as currently in effect. *
(b) Certificate of Amendment to Certificate of Incorporation of Curtis Industries, Inc., as currently in
effect.
3.6 By-Laws of Curtis Industries, Inc. as currently in effect. *
3.7 Certificate of Incorporation of Itek Graphix Corp. , as currently in effect. *
3.8 By-Laws of Itek Graphix Corp., as currently in effect. *
3.9 Certificate of Incorporation of Curtis Sub, Inc., as currently in effect. *
3.10 By-Laws of Curtis Sub, Inc., as currently in effect. *
4.1 Indenture, dated as of April 1, 1998, among Paragon Corporate Holdings Inc., A.B.Dick Company, Curtis *
Industries, Inc., Itek Graphix Corp., Curtis Sub, Inc and Norwest Bank Minnesota, National Association, as
Trustee (containing, as exhibits, specimens of the Series A Notes and the Series B Notes).
4.4 (a) Credit and Security Agreement, dated as of April 1, 1998 amended by Amendment I, between Paragon *
Corporate Holdings Inc. and Key Corporate Capital Inc.
(b) Amendment I, dated as of March 17, 1999, to the Credit and Security Agreement, dated as of April 1, 1998 *
between Paragon Corporate Holdings Inc. and Key Corporate Capital Inc.
(c) Waiver and Amendment to the Credit and Security Agreement, dated March 29, 2000, between Paragon **
Corporate Holdings Inc. and Key Corporate Capital, Inc.
(d) Amendment No. 2 to Credit and Security Agreement dated March 31, 2000, between Paragon Corporate
Holdings Inc. and Key Corporate Capital, Inc.
(e) Amendment No. 3 to Credit and Security Agreement dated May 10, 2000, between Paragon Corporate Holdings
Inc. and Key Corporate Capital, Inc.
10.1 Agreement and Plan of Merger, dated as of November 6, 1997, among Paragon Corporate Holdings Inc., Curtis *
Industries, Inc. and Curtis Acquisition Group.
10.2 Stock Purchase Agreement, dated as of December 19, 1996, between Paragon Corporate Holdings Inc. and GEC *
Incorporated.
10.3 Management Agreement, dated as of April 1, 1998, between Paragon Corporate Holdings Inc. and NESCO, Inc. *
10.4 Tax Payment Agreement, dated as of April 1, 1998, among Paragon Corporate Holdings Inc., A.B.Dick Company, *
Curtis Industries, Inc., Itek Graphix Corp., Curtis Sub, Inc. and NES Group, Inc.
10.5 Agreement dated November 10, 1995 between A.B.Dick Company and Gerald J McConnell. *
10.6 Severance and Non-Competition Agreement dated February 28, 1996 between Curtis Industries, Inc. and A. Keith *
Drewett.
10.7 Agreement dated July 2, 1998 among Curtis Industries, Inc., Paragon Holdings Inc. and A. Keith Drewett. ***
10.8 Agreement and plan of merger, dated September 29, 1999 between Multi Acquisition Corp., a wholly-owned ****
subsidiary of Paragon Corporate Holdings Inc., and Multigraphics, Inc.
10.9 Form 8-K Current Report dated May 24, 2000, regarding the disposition of Curtis Industries Inc.
27.1 Financial Data Schedule
27.2 Restated Financial Data Schedule for the Six Months Ended June 30, 1999
27.3 Restated Financial Data Schedule for the Nine Months Ended September 30, 1999
* Incorporated by reference from Form S-4 Registration Number 333-51569 filed
under the Securities Act of 1933, as amended
** Incorporated by reference from Form 10-K File Number 333-51569 filed March
31, 2000
*** Incorporated by reference from Amendment No. 2 to Form S-4 Registration
Number 333-51569 filed July 17, 1998 under the Securities Act of 1933,
as amended
**** Incorporated by reference from Appendix A of Schedule 14A filed
December 6, 1999, by Multigraphics, Inc.
</TABLE>
22
