<PAGE> 1
UNITED STATES SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-Q
[X] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934
For the quarterly period ended March 31, 1995
OR
[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934
For the transition period from __________ to __________
Commission File No. 1-7852
POPE & TALBOT, INC.
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Delaware 94-0777139
- ---------------------------------------- ------------------------------
(State or other jurisdiction of I.R.S. Employer Identification
incorporation or organization) Number
1500 S.W. 1st Ave., Portland, Oregon 97201
- ---------------------------------------- -----------------------------
(Address of principal executive offices) (Zip Code)
</TABLE>
Registrant's telephone number, including area code: (503) 228-9161
--------------
NONE
----------------------------------------------------------
Former name, former address and former fiscal year,
if changed since last report.
Indicate by checkmark 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 close of the latest practicable date.
Common stock, $1 par value - 13,363,779 shares as of May 5, 1995
<PAGE> 2
PART I. FINANCIAL INFORMATION
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Page No.
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ITEM 1. Financial Statements:
Consolidated Condensed Balance Sheets -
March 31, 1995 and December 31, 1994 2
Consolidated Statements of Income -
Three Months Ended March 31, 1995 and 1994 3
Consolidated Condensed Statements of Cash Flows -
Three Months Ended March 31, 1995 and 1994 4
Notes to Consolidated Condensed Financial Statements 5
ITEM 2. Management's Discussion and Analysis of
Financial Condition and Results of Operations 6-8
PART II. OTHER INFORMATION
ITEM 4. Submission of Matters to a Vote of Security Holders 9
ITEM 6. Exhibits and Reports on Form 8-K 9-11
</TABLE>
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PART I.
POPE & TALBOT, INC.
CONSOLIDATED CONDENSED BALANCE SHEETS
(Unaudited)
(Dollars in Thousands)
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<CAPTION>
March 31, December 31,
1995 1994
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<S> <C> <C>
ASSETS
------
Current assets:
Cash and cash equivalents $ 5,082 $ 6,847
Accounts receivable 78,731 71,477
Inventories:
Raw materials 82,728 81,156
Finished goods 47,026 46,236
--------- --------
129,754 127,392
Deposits on timber purchase contracts 6,141 5,997
Prepaid expenses 10,922 11,337
--------- --------
Total current assets 230,630 223,050
Properties:
Plant and equipment 555,085 548,430
Accumulated depreciation (283,648) (276,465)
-------- --------
271,437 271,965
Land and timber cutting rights 10,948 10,862
--------- --------
Total properties 282,385 282,827
Other assets:
Restricted bond funds 13,237 15,458
Deferred charges 16,874 13,853
Goodwill, net of amortization 4,154 4,196
--------- ---------
Total other assets 34,265 33,507
--------- ---------
$ 547,280 $ 539,384
========= =========
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Notes payable $ 36,500 $ 20,000
Current portion of long-term debt 928 928
Accounts payable and accrued liabilities 73,989 74,048
Income taxes 2,317 8,600
--------- ---------
Total current liabilities 113,734 103,576
Noncurrent liabilities:
Reforestation 16,335 15,136
Postretirement benefits 13,877 13,641
Long-term debt, net of current portion 177,366 177,471
Deferred income taxes 1,364 1,365
--------- ---------
Total noncurrent liabilities 208,942 207,613
Stockholders' equity:
Common stock 13,972 13,972
Additional paid-in capital 40,858 40,858
Retained earnings 188,031 191,804
Cumulative translation adjustments (7,133) (7,315)
Less treasury shares at cost (11,124) (11,124)
-------- ---------
Total stockholders' equity 224,604 228,195
--------- ---------
$ 547,280 $ 539,384
========= =========
</TABLE>
The accompanying notes are an integral part of these consolidated condensed
balance sheets.
2
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POPE & TALBOT, INC.
CONSOLIDATED STATEMENTS OF INCOME
(Unaudited)
(Dollars in Thousands Except Per Share Amounts)
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Three Months Ended
March 31,
--------------------------------
1995 1994
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Revenues:
Wood products $ 69,087 $ 86,258
Pulp and paper products 103,976 82,483
---------- ----------
Total 173,063 168,741
Costs and expenses:
Cost of sales:
Wood products 64,742 60,740
Pulp and paper products 99,384 84,184
Selling, general and administrative 7,571 7,587
Interest, net 3,457 2,151
---------- ----------
Total 175,154 154,662
Income (loss) before income taxes (2,091) 14,079
Income tax provision (benefit) (857) 5,491
---------- ----------
Net income (loss) $ (1,234) $ 8,588
========== ==========
Net income (loss) per common share:
Primary $ (.09) $ .70
====== =====
Fully diluted $ (.09) $ .65
====== =====
Cash dividends per common share $ .19 $ .19
====== =====
Weighted average number of common shares outstanding:
Primary 13,362,729 12,336,311
========== ==========
Fully diluted 13,362,729 13,575,866
========== ==========
</TABLE>
The accompanying notes are an integral part of these consolidated condensed
financial statements.
3
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POPE & TALBOT, INC.
CONSOLIDATED CONDENSED STATEMENTS OF CASH FLOWS
(Unaudited)
(Dollars in Thousands)
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Three months ended
March 31,
-----------------------------------
1995 1994
---- ----
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Cash flow from operating activities:
Net income (loss) $ (1,234) $ 8,588
Adjustments to reconcile net income (loss) to net
cash used for operating activities:
Depreciation and amortization 10,639 8,862
Increase (decrease) in:
Accounts payable and accrued liabilities (59) (4,959)
Income taxes (6,283) (8,138)
Reforestation 1,161 1,182
Postretirement benefits 236 245
Decrease (increase) in:
Accounts receivable (7,254) (4,440)
Inventories (2,362) (5,251)
Deposits on timber purchase contracts (1,902) (52)
Prepaid expenses 415 (59)
Deferred charges and other (1,175) (1,541)
---------- ---------
Net cash used for operating activities (7,818) (5,563)
Cash flow from investing activities:
Capital expenditures (10,265) (21,781)
Proceeds from sale of other properties 241 -
---------- ---------
Net cash used for investing activities (10,024) (21,781)
Cash flow from financing activities:
Net increase in short-term borrowings 16,500 16,000
Proceeds from issuance of long-term debt - 10,000
Reduction of long-term debt (105) (98)
Decrease in restricted bond funds 2,221 -
Cash dividends (2,539) (2,238)
Net proceeds from issuance of treasury stock - 1,926
---------- ---------
Net cash provided by financing activities 16,077 25,590
---------- ---------
Decrease in cash and
cash equivalents (1,765) (1,754)
Cash and cash equivalents at
beginning of period 6,847 3,768
---------- ---------
Cash and cash equivalents at
end of period $ 5,082 $ 2,014
========== =========
</TABLE>
The accompanying notes are an integral part of these consolidated condensed
financial statements.
4
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POPE & TALBOT, INC.
NOTES TO CONSOLIDATED CONDENSED FINANCIAL STATEMENTS
March 31, 1995 and 1994
(Unaudited)
1. General
The consolidated condensed interim financial statements have been
prepared by the Company without audit and are subject to normal
recurring year-end adjustments. Certain information and footnote
disclosure normally included in financial statements prepared in
accordance with generally accepted accounting principles has been
condensed or omitted pursuant to the rules and regulations of the
Securities and Exchange Commission. In the opinion of the Company,
the accompanying unaudited consolidated condensed financial statements
contain all adjustments (all of which are of a normal recurring
nature) necessary to present fairly the financial position of the
Company as of March 31, 1995 and December 31, 1994, and the results of
operations and changes in cash flows for the three months ended March
31, 1995 and 1994. It is suggested that these interim statements be
read in conjunction with the financial statements and notes thereto
contained in the Company's 1994 report on Form 10-K. The results of
operations for the three months ended March 31, 1995 and 1994 are not
necessarily indicative of the results to be expected for the full
year.
2. Income Taxes
The income tax provision is estimated on an interim basis using the
best available information for projected results for the entire year.
3. Earnings per Share
Per share information is based on the weighted average number of
common shares outstanding during each period. The computation
includes the assumed issuance of common shares under the Stock Option
and Appreciation Plan, net of an assumed buyback of treasury shares at
the average market price.
Refer to Exhibit 11 of this filing for the computation of average
common shares outstanding and earnings per share.
5
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POPE & TALBOT, INC.
MANAGEMENT'S DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS
MARCH 31, 1995 AND 1994
(unaudited)
RESULTS OF OPERATIONS
Pope & Talbot incurred a loss of $1,234,000, or $.09 per share, in the first
quarter of 1995, well below the earnings of $8,588,000, or $.65 per share (on a
fully diluted basis) in the first quarter of 1994. Overall, 1995 first quarter
revenues of $173,063,000 were essentially unchanged from the first quarter of
1994, although the mix of sales between the Company's two segments changed. A
declining lumber market and less timber availability in Canada generated lower
lumber sales volumes and prices resulting in 20 percent lower wood products
sales. Higher pulp sales prices and volumes resulting from a dramatically
stronger pulp market resulted in pulp and paper segment sales which were 26
percent higher in 1995 than 1994.
In the wood products segment, which comprised 40 percent of first quarter 1995
sales, earnings declined substantially from $24.1 million in the first quarter
of 1994 to $2.9 million in the first quarter of 1995. After a very strong 1994
first quarter, lumber profits declined steadily throughout 1994, and continued
to decline into the first quarter of 1995. Several factors impacted this
earnings decline. Lumber prices peaked in the first quarter of 1994 and then
declined steadily throughout 1994 as interest rates increased and home building
declined. First quarter 1995 lumber prices declined further from the fourth
quarter of 1994. This first quarter 1995 pricing level was approximately 16
percent below first quarter 1994 prices. Approximately 60 percent of the
Company's lumber capacity is in Canada where in mid 1994 the Provincial
Government of British Columbia announced a revision in the prices charged for
government timber. Primarily as a result of this change, costs for logs in
Canada were approximately $2 million higher in the first quarter 1995 than the
first quarter 1994. Lumber sales volume decreased to 162 million board feet,
or approximately 90 percent of 1995 capacity, in the first quarter of 1995 from
189 million board feet, or approximately 97 percent of 1994 capacity, in the
first quarter of 1994. Effective January 1, 1995, the Company reduced its
Grand Forks, British Columbia sawmill to a one-shift basis as a result of
reduced timber harvest levels allowed by the British Columbia government. This
will reduce the Company's annual lumber production capacity from 1994 levels by
approximately 60 million board feet, or approximately 8 percent of the
Company's lumber capacity. The Port Gamble sawmill operated on a curtailed
basis in the first quarter of 1995, while all other of the Company's sawmills
operated at capacity. The Port Gamble, Washington sawmill was periodically
shut down during portions of 1994 and during the first quarter of 1995 operated
on a reduced schedule as a result of a lack of acceptably priced timber in
relation to end-product prices. At the end of the first quarter of 1995, the
Port Gamble sawmill was shut down pending an improvement in the lumber market.
This mill competes with other sawmills and the export market for timber in the
high-priced timber region of the Pacific Northwest and will only operate as
acceptably priced timber is available.
The pulp and paper segment, which comprised 60 percent of the first quarter
1995 revenues, produced a $900 thousand profit in the first quarter of 1995
compared to a $5.4 million loss in the first quarter of 1994. Earnings from
the Company's pulp business in the first quarter of 1995 slightly offset losses
in both tissue and diapers. First quarter 1995 pulp and paper
6
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segment sales were up 26 percent from the first quarter of 1995. This increase
is largely due to pulp revenues which were approximately 80 percent higher than
first quarter 1994 on higher sales volumes and 70 percent higher sales prices.
Additionally, tissue sales were also up approximately 20 percent on higher
sales prices and volumes, while diaper revenues were largely unchanged.
The Company's pulp business recovered from a substantial loss in the first
quarter of 1994 to profitability in the first quarter of 1995. Losses in the
first quarter of 1994 were the result of a combination of low production rates,
continued low end-product pricing caused by a depressed world pulp market, and
increased costs associated with the start-up of a new pulp dryer. By the first
quarter of 1995, these negative factors improved substantially. The low
production rates in the first quarter of 1994 were the result of a combination
of a continuing poor pulp market and a lack of acceptable take-away capacity.
Completion of a new pulp dryer in the first quarter of 1994 now provides full
take-away capacity for the mill. During the first quarter of 1995, the pulp
mill operated essentially at capacity. The world pulp market has seen a
substantial improvement since the beginning 1994, with industry pricing for a
standard grade of bleached softwood pulp selling at the end of the first
quarter of 1995 for more than 80 percent higher than its December 1993 price.
The Company's diaper business produced a loss in the first quarter of 1995, the
second quarterly loss in a row. In the first quarter of 1994, the Company's
diaper business produced a modest profit. The competitive conditions which
eroded diaper profits as 1994 progressed continued into the first quarter of
1995. Procter & Gamble, a significant producer of disposable diapers,
continued their aggressive pricing through the first quarter of 1995, resulting
in Company diaper prices which were essentially unchanged from the fourth
quarter of 1994; however, these prices were approximately 3 percent lower than
the first quarter of 1994 and almost 6 percent lower than average 1993 prices.
Overall, diaper sales volume in the United States has not changed significantly
in the past two years and competition for sales volume has been intense.
Diaper sales volume for the Company was approximately 81 percent of capacity
during 1994 and dropped slightly from that level in the first quarter of 1995.
A significant factor in the decline in profitability during 1994 and into the
first quarter of 1995 has been increasing raw material costs. The stronger
pulp markets, which have benefited the Company's pulp business, have had a
detrimental effect on the Company's diaper operations. Costs for fluff pulp, a
significant component of disposable diapers, has not risen as fast as the world
pulp markets, but are still 33 percent higher than the first quarter of 1994.
The Company anticipates that pulp markets will continue to strengthen during
the remainder of 1995 and anticipates that fluff pulp costs will likewise
continue to increase.
The Company's tissue business has incurred losses since 1992, and incurred a
significant loss in the first quarter of 1995. Company tissue pricing improved
5 percent in the first quarter 1995 from essentially flat pricing in 1994.
Tissue pricing began to stabilize during 1994 after several years of decline,
and in the first quarter of 1995 the Company instituted a 7 percent price
increase, the first general price increase since 1990. Tissue operated at
capacity during the first quarter of 1995. Although tissue pricing improved in
the first quarter of 1995, production costs, particularly the cost of
wastepaper, the primary raw material component, increased faster than sales
price increases. Wastepaper pricing, which generally follows the pricing
trends of the world pulp markets, has been pushed to record levels by a
combination of strong pulp markets and a shortage of certain wastepaper grades
caused by the start-up in 1994 of new recycled fiber mills in the United
States. As a result of these pressures,
7
<PAGE> 9
wastepaper prices have increased by nearly 150 percent since the first quarter
of 1994 and nearly 40 percent over fourth quarter 1994 levels. These raw
material price increases have outpaced the improvement in tissue sales prices.
The Company's Ransom tissue mill has been reflecting losses in this competitive
tissue market and early in the second quarter of 1995, the Company implemented
a revised, lower compensation structure for the Ransom tissue mill employees
and these union employees struck over this implementation. Ransom represents
approximately 50 percent of the Company's tissue volume and although sales
volumes will be reduced as a result of the strike, it is not anticipated that
this work stoppage will increase tissue losses.
The Company anticipates it will implement further tissue price increases during
the second quarter of 1995, although no assurances can be given that such
tissue price increases will become effective. Additionally, the increases in
wastepaper prices appear to be moderating somewhat. However, even with more
stable wastepaper prices and higher tissue prices, without a substantial change
in industry pricing for tissue, or a lowering of wastepaper costs, it is
anticipated the Company's tissue business will continue to reflect losses.
LIQUIDITY AND CAPITAL RESOURCES
During the first quarter of 1995, operations used cash of $7.8 million. Income
before non-cash charges before depreciation and amortization generated $9.4
million of cash. Accounts receivable increased $7.3 million as a result of a
strong shipping month in March for tissue and diapers and higher pulp and wood
chip sales prices and volumes. Inventories increased $2.4 million during the
quarter. Log inventories in Canada were higher as the Company took advantage
of log buying opportunities combined with seasonal log build-up. Canadian
lumber inventories were up as a result of the inability to secure adequate rail
cars because of a Canadian railroad strike. Late in the first quarter of 1995
this strike was settled. Tissue and diaper inventories declined on a strong
shipping month in March. Log inventories at the Port Gamble sawmill were
reduced as the mill processed existing log inventories but was not able to
replace those inventories with acceptably priced logs. Cash was used to reduce
Canadian income taxes payable as a result of the timing of the recognition and
payment of Canadian taxes.
Capital spending was $10.3 million during the first quarter. The principal
project was continuing progress on a project to modernize the recycled pulping
operations at the Eau Claire tissue mill. It is estimated that approximately
$14 million will be required to complete previously approved projects, the most
significant of which is the Eau Claire pulping modernization. The Company
anticipates that additional projects will be undertaken in 1995, primarily to
sustain existing operations. It is anticipated these projects will be financed
from the remaining portion of a restricted City of Eau Claire revenue bond fund
obtained in connection with the Eau Claire pulping modernization, internally
generated cash, receipt of the countervailing duty refund from the United
States government and, if necessary, from the Company's lines of credit.
The Company returned $2.5 million to the shareholders in the form of dividends.
The Company has available $113 million in short- and long-term lines of credit
of which $101.5 million was outstanding at March 31, 1995.
8
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PART II.
ITEM 4. Submission of Matters to a Vote of Security Holders
The Company's Annual Meeting of Shareholders was held on May 10,
1995. The following members were elected to the Company's Board of
Directors to hold office for three-year terms expiring in 1998.
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<CAPTION>
Nominee In Favor Withheld
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Hamilton W. Budge 10,023,570 1,444,763
Charles Crocker 10,125,791 1,342,542
</TABLE>
Additionally, the following directors were elected in previous years
to three-year terms on the Company's Board of Directors and will
continue their terms of office: Gordon P. Andrews, Warren E.
McCain, Robert Stevens Miller, Jr., Peter T. Pope, Hugo G. L.
Powell, and Brooks Walker, Jr.
The results of the voting on the ratification of selection of Arthur
Andersen LLP as independent public accountants was as follows:
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<CAPTION>
In Favor Opposed Abstained
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<S> <C> <C>
11,383,127 23,128 62,078
</TABLE>
ITEM 6. Exhibits and Reports on Form 8-K
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Exhibits
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4.1 Indenture, dated June 2, 1993, between the Company and Chemical Trust Company of California as Trustee with
respect to the Company's 8-3/8% Debentures due 2013. (Incorporated herein by reference to Exhibit 4.1 to the
Company's registration statement on Form S-3 filed April 6, 1993.)
4.2 Revolving Credit Agreement, dated May 6, 1992, among the Company and United States National Bank of Oregon;
CIBC, Inc.; ABN AMRO Bank N.V.; Continental Bank N.A.; and Wachovia Bank of Georgia, National Association.
(Incorporated herein by reference to Exhibit 4 to the Company's Quarterly Report on Form 10-Q for the quarter
ended June 30, 1992.)
4.3 Rights Agreement, dated as of April 13, 1988, between the Company and The Bank of California, as rights agent.
(Incorporated herein by reference to Exhibit 4(e) to the Company's Annual Report on Form 10-K for the year
ended December 31, 1992.)
4.4 Line of Credit Agreement, dated April 29, 1994, between the Company and Wachovia Bank of Georgia, National
Association. (Incorporated herein by reference to Exhibit 4(a) to the Company's Quarterly Report on Form 10-Q
for the quarter ended March 31, 1994.)
4.5 Extension Agreement, dated as of June 30, 1994, to the Revolving Credit Agreement, dated May 6, 1992, among
the Company and United States National Bank of Oregon; CIBC, Inc.; ABN AMRO Bank N.V.; Continental Bank N.A.;
and Wachovia Bank of Georgia, National Association. (Incorporated herein by reference to Exhibit 4.6 to the
Company's Annual Report on Form 10-K for the year ended December 31, 1994.)
</TABLE>
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<TABLE>
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4.6 Modification Agreement, dated as of October 31, 1994, to the Revolving Credit Agreement, dated May 6, 1992,
among the Company and United States National Bank of Oregon; CIBC, Inc.; ABN AMRO Bank N.V.; Continental Bank
N.A.; and Wachovia Bank of Georgia, National Association. (Incorporated herein by reference to Exhibit 4.7 to
the Company's Annual Report on Form 10-K for the year ended December 31, 1994.)
4.7 Modification Agreement, dated as of December 31, 1994, to the Revolving Credit Agreement, dated May 6, 1992,
among the Company and United States National Bank of Oregon; CIBC, Inc.; ABN AMRO Bank N.V.; Continental Bank
N.A.; and Wachovia Bank of Georgia, National Association. (Incorporated herein by reference to Exhibit 4.8 to
the Company's Annual Report on Form 10-K for the year ended December 31, 1994.)
4.8 Revolving Credit Agreement, dated March 15, 1995, between the Company and United States National Bank
of Oregon.
10.1 Executive Compensation Plans and Arrangements
---------------------------------------------
10.1.1 Stock Option and Appreciation Plan. (Incorporated herein by reference to Exhibit 10(a) to the Company's
Annual Report on Form 10-K for the year ended December 31, 1992.)
10.1.2 Executive Incentive Plan. (Incorporated herein by reference to Exhibit 10(b) to the Company's Annual Report
on Form 10-K for the year ended December 31, 1992.)
10.1.3 Restricted Stock Bonus Plan. (Incorporated herein by reference to Exhibit 10(c) to the Company's Annual
Report on Form 10-K for the year ended December 31, 1992.)
10.1.4 Deferral Election Plan. (Incorporated herein by reference to Exhibit 10(d) to the Company's Annual Report
on Form 10-K for the year ended December 31, 1992.)
10.1.5 Supplemental Executive Retirement Income Plan. (Incorporated herein by reference to Exhibit 10(e) to the
Company's Annual Report on Form 10-K for the year ended December 31, 1990.)
10.1.6 Form of Severance Pay Agreement among the Company and certain of its executive officers. (Incorporated
herein by reference to Exhibit 10(f) to the Company's Annual Report on Form 10-K for the year ended
December 31, 1990.)
10.2 Lease agreement between the Company and Pope Resources, dated December 20, 1985, for Port Gamble, Washington
sawmill site. (Incorporated herein by reference to Exhibit 10(g) to the Company's Annual Report on Form 10-K
for the year ended December 31, 1990.)
10.3 Lease agreement between the Company and Shenandoah Development Group, Ltd., dated March 14, 1988, for Atlanta
diaper mill site as amended September 1, 1988 and August 30, 1989. (Incorporated herein by reference to
Exhibit 10(h) to the Company's Annual Report on Form 10-K for the year ended December 31, 1990.)
10.4 Lease agreement between the Company and Shenandoah Development Group, Ltd., dated July 31, 1989, for
additional facilities at Atlanta diaper mill as amended August 30, 1989 and February 1990. (Incorporated
herein by reference to Exhibit 10(i) to the Company's Annual Report on Form 10-K for the year ended
December 31, 1990.)
</TABLE>
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<TABLE>
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10.5 Grays Harbor Paper L.P. Amended and Restated Pulp Sales Supply Contract, dated September 28, 1994 (with
certain confidential information deleted). (Incorporated herein by reference to Exhibit 10(j) to the
Company's Quarterly Report on Form 10-Q for the quarter ended September 30, 1994.)
11.1 Statement showing computation of per share earnings.
21.1 Listing of parents and subsidiaries. (Incorporated herein by reference to Exhibit 22 to the Company's
Annual Report on Form 10-K for the year ended December 31, 1992.)
27.1 Financial Data Schedule.
</TABLE>
The undersigned registrant hereby undertakes to file with the
Commission a copy of any agreement not filed under exhibit
item (4) above on the basis of the exemption set forth in the
Commission's rules and regulations.
Reports on Form 8-K
-------------------
No reports on Form 8-K were filed during the three months ended
March 31, 1995.
11
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POPE & TALBOT, INC.
SIGNATURE
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.
POPE & TALBOT, INC.
-------------------------
Registrant
Date: May 15, 1995 /s/ C. Lamadrid
-------------------------
C. Lamadrid
Senior Vice President and
Chief Financial Officer
<PAGE> 1
Exhibit 4.8
MONEY DESK PROMISSORY NOTE
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Maximum Amount: $25,000,000 Portland, Oregon
Borrower's deposit Accounts: 179-0012-296 Date: June 30, 1995
Deposit Account Branch: SW 2nd & Columbia Expiry: On Demand
</TABLE>
THE PARTIES TO THIS NOTE ARE:
POPE & TALBOT, INC. "BORROWER"
AND
UNITED STATES NATIONAL BANK OF OREGON "BANK"
1. Borrower wishes from time-to-time to borrow from Bank on a revolving
credit basis. Bank wishes to lend to Borrower provided that all advances
hereunder shall be made at the sole option of Bank and subject to all
terms of this Note. The borrowings may be in increments. It is expected
that the amount, maturity, and interest rate may vary from advance to
advance.
2. At or prior to the time of each advance, Borrower and Bank shall agree to:
(a) the amount of the advance;
(b) the interest rate;
(c) the date the advance is to be credited; and
(d) the maturity date of the advance.
3. All advances made hereunder shall be deposited by Bank as instructed by
the Borrower. Unless otherwise agreed in writing by Bank, no part of any
advance may be paid before its maturity date.
4. Interest shall be computed based on the number of days each advance is
outstanding and shall assume a calendar year of 360 days.
5. Borrower agrees to pay Bank the amount of each advance on the agreed upon
maturity date. It is anticipated that Borrower and Bank may agree to
extend the maturity date and otherwise modify the terms of an advance
agreed upon under paragraph 2 above effective on the day after its
maturity date. Each advance shall bear interest at the agreed upon rate
until maturity and thereafter (unless modified in accordance with the
preceding sentence) at the rate provided in numbered paragraph 7 below.
Interest will be accrued daily and paid by Borrower on the maturity date
of each advance, unless otherwise agreed in writing by the parties.
Payments of principal and interest shall be made at the National
Corporate Banking Division of Bank, 555 S.W. Oak Street, Portland, Oregon
in immediately available lawful money of the United States of America.
<PAGE> 2
6. The maximum principal balance outstanding under this Note at any one time
shall not exceed the Maximum Amount stated above and no advance may
mature after the Expiry Date stated above; provided, however, that
exceeding the Maximum Amount or Expiry Date shall not limit or otherwise
affect the right of Bank to repayment of all advances or interest
thereon. The books and records of Bank shall be the sole evidence of the
agreement of Borrower and Bank to make an advance, the date and amount of
funds to be advanced, the maturity date, and interest rate. No separate
note or notes shall be signed by Borrower.
7. If any advance is not paid on its maturity date, or if any interest is
not paid on the date it is due, all advances shall bear interest at a
rate two percent (2%) per annum above the prime rate of Bank, and all
advances and interest shall without notice become immediately due and
payable at the option of the holder of this Note. The prime rate of Bank
is the interest rate which Bank has identified as its prime rate and is
not, for example, the lowest interest rate Bank offers or has offered to
any borrower or class of borrowers.
8. In consideration of Bank making advances, in its sole discretion, upon
the oral request of Borrower, Borrower agrees to repay all such advances
in accordance with the terms of this Note, including advances requested
by persons not authorized to request advances and from or on account of
the improper withdrawal of all or part of such advances from Borrower's
deposit account.
9. This Note shall be governed by and construed in accordance with the law
of the State of Oregon and applicable federal law and shall bind
Borrower, its successors and assigns, and inure to the benefit of Bank,
its successors and assigns. Borrower hereby waives presentment, demand,
notice, and protest and all other waivable demands and notices in
connection with the delivery, acceptance, performance, default or
enforcement of this Note.
10. If litigation is commenced to collect any indebtedness under this Note,
the prevailing party shall be entitled to such additional sum of money as
the court may adjudge reasonable as attorney's fees in the litigation and
appeals therefrom. Further, if the Borrower is in default on any
indebtedness under this Note, even if no litigation is commenced, the
Borrower promises to pay all costs of collecting such overdue amounts.
The right of setoff is hereby granted to the bank but not to any
subsequent holders hereof.
NOTICE TO BORROWER
DO NOT SIGN THIS LOAN AGREEMENT BEFORE YOU READ IT. THIS LOAN AGREEMENT
AUTHORIZES BANK TO REFUSE TO ACCEPT REPAYMENT OF THE LOAN PRIOR TO THE DATE
PROVIDED FOR REPAYMENT IN THE LOAN AGREEMENT.
POPE & TALBOT, INC.
By:
-------------------------------------
Title: Senior V.P. & Chief Financial Officer
-------------------------------------
<PAGE> 1
Exhibit 11.1
POPE & TALBOT, INC.
STATEMENT SHOWING CALCULATION OF AVERAGE
COMMON SHARES OUTSTANDING AND EARNINGS
PER AVERAGE COMMON SHARE
<TABLE>
<CAPTION>
Three Months Ended
March 31,
-------------------------------
1995 1994
---- ----
<S> <C> <C>
Weighted average number
of common shares
outstanding 13,362,729 12,336,311
Weighted average of common
stock equivalent shares
attributable to
convertible debentures - 1,010,880
Application of the "treasury
stock" method to the stock
option plan 9,632 228,675
----------- ----------
Total common and common
equivalent shares,
assuming full dilution 13,372,361 13,575,866
=========== ==========
Net income (loss) $(1,234,000) $8,588,000
Add: interest on convertible
debentures, net of applicable
income taxes - 244,000
----------- ----------
Net income (loss), assuming
full dilution $(1,234,000) $8,832,000
=========== ==========
Net income (loss) per common share,
assuming full dilution $ (.09) $.65
======= ====
</TABLE>
The computation of primary net income (loss) per common share is not included
because the computation can be clearly determined from the material contained
in this report.
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM THE POPE &
TALBOT, INC. CONSOLIDATED CONDENSED FINANCIAL STATEMENTS FOR THE QUARTERLY
PERIOD ENDED MARCH 31, 1995, AND IS QUALIFIED IN ITS ENTIRETY BY REFERENCE TO
SUCH FINANCIAL STATEMENTS.
</LEGEND>
<MULTIPLIER> 1,000
<S> <C>
<PERIOD-TYPE> 3-MOS
<FISCAL-YEAR-END> DEC-31-1995
<PERIOD-END> MAR-31-1995
<CASH> 5,082
<SECURITIES> 0
<RECEIVABLES> 59,237
<ALLOWANCES> 0
<INVENTORY> 129,754
<CURRENT-ASSETS> 230,630
<PP&E> 566,033
<DEPRECIATION> 283,648
<TOTAL-ASSETS> 547,280
<CURRENT-LIABILITIES> 113,734
<BONDS> 177,366
<COMMON> 13,972
0
0
<OTHER-SE> 210,632
<TOTAL-LIABILITY-AND-EQUITY> 547,280
<SALES> 173,063
<TOTAL-REVENUES> 173,063
<CGS> 164,126
<TOTAL-COSTS> 164,126
<OTHER-EXPENSES> 0
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 3,457
<INCOME-PRETAX> (2,091)
<INCOME-TAX> (857)
<INCOME-CONTINUING> (1,234)
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> (1,234)
<EPS-PRIMARY> (.09)
<EPS-DILUTED> (.09)
</TABLE>
