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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 June 30, 1996
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.
Delaware 94-0777139
(State or other jurisdiction of I.R.S. Employer Identification Number
incorporation or organization)
1500 S.W. 1st Ave., Portland, Oregon 97201
(Address of principal executive offices) (Zip Code)
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 August 2, 1996
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PART I. FINANCIAL INFORMATION
<TABLE>
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Page No.
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ITEM 1. Financial Statements:
Consolidated Condensed Balance Sheets -
June 30, 1996 and December 31, 1995 2
Consolidated Statements of Income -
Three and Six Months Ended June 30, 1996 and 1995 3
Consolidated Condensed Statements of Cash Flows -
Three and Six Months Ended June 30, 1996 and 1995 4
Notes to Consolidated Condensed Financial Statements 5
ITEM 2. Management's Discussion and Analysis of
Financial Condition and Results of Operations 6-9
PART II. OTHER INFORMATION
ITEM 6. Exhibits and Reports on Form 8-K 10-12
</TABLE>
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PART I.
POPE & TALBOT, INC.
CONSOLIDATED CONDENSED BALANCE SHEETS
(Unaudited)
(Dollars in Thousands)
<TABLE>
<CAPTION>
June 30, December 31,
1996 1995
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<S> <C> <C>
ASSETS
Current assets:
Cash and cash equivalents $ 8,108 $ 13,826
Marketable securities 8,231 -
Accounts receivable 38,171 52,931
Inventories:
Raw materials 30,998 40,458
Finished goods 27,024 28,252
--------- ---------
58,022 68,710
Prepaid expenses and other 16,582 15,616
Discontinued operations assets held for sale - 56,169
--------- ---------
Total current assets 129,114 207,252
Properties:
Plant and equipment 454,492 447,577
Accumulated depreciation (252,811) (232,199)
--------- ---------
201,681 215,378
Land and timber cutting rights 10,316 10,382
--------- ---------
Total properties 211,997 225,760
Other assets:
Deferred charges 16,383 18,655
Deferred income tax assets, net 17,339 16,531
Goodwill, net of amortization 3,946 4,029
--------- ---------
Total other assets 37,668 39,215
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$ 378,779 $ 472,227
========= =========
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Notes payable $ 4,000 $ 43,000
Current portion of long-term debt 457 457
Accounts payable and accrued liabilities 49,640 66,007
Income taxes 105 4,031
--------- ---------
Total current liabilities 54,202 113,495
Noncurrent liabilities:
Reforestation 17,331 16,617
Postretirement benefits 13,182 13,909
Long-term debt, net of current portion 108,289 138,514
--------- ---------
Total noncurrent liabilities 138,802 169,040
Stockholders' equity:
Common stock 13,972 13,972
Additional paid-in capital 35,976 35,976
Retained earnings 152,739 156,810
Cumulative translation adjustments (5,801) (5,955)
Less treasury shares at cost (11,111) (11,111)
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Total stockholders' equity 185,775 189,692
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$ 378,779 $ 472,227
========= =========
</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)
<TABLE>
<CAPTION>
Three months ended Six months ended
June 30, June 30,
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1996 1995 1996 1995
---- ---- ---- ----
<S> <C> <C> <C> <C>
Revenues:
Wood products $ 56,552 $ 62,343 $ 110,599 $ 131,430
Pulp and paper products 54,015 62,148 110,650 126,898
----------- ----------- ----------- -----------
Total 110,567 124,491 221,249 258,328
Costs and expenses:
Cost of sales:
Wood products 51,724 63,666 101,628 128,408
Pulp and paper products 51,880 62,933 109,912 124,882
Selling, general and administrative 3,926 5,047 8,744 10,517
Interest, net 1,932 3,671 4,469 7,128
----------- ----------- ----------- -----------
Total 109,462 135,317 224,753 270,935
Income (loss) before income taxes and
discontinued operations 1,105 (10,826) (3,504) (12,607)
Income tax provision (benefit) 443 (4,511) (1,401) (5,241)
----------- ----------- ----------- -----------
Income (loss) from continuing operations 662 (6,315) (2,103) (7,366)
Discontinued operations:
Loss from discontinued operations (net of
tax benefit of $1,498 and $1,625 for three and
six months ended June 30, 1995, respectively) - (2,696) - (2,879)
Gain on disposal of discontinued operations
(net of applicable income taxes of $2,074) - - 3,110 -
----------- ----------- ----------- -----------
Net income (loss) $ 662 $ (9,011) $ 1,007 $ (10,245)
=========== =========== =========== ===========
Income (loss) per common share:
Income (loss) from continuing operations $ .05 $ (.48) $ (.15) $ (.56)
Income (loss) from discontinued operations - (.20) .23 (.21)
----------- ---------- ----------- -----------
Net income (loss) $ .05 $ (.68) $ .08 $ (.77)
=========== ========== =========== ===========
Cash dividends per common share $ .19 $ .19 $ .38 $ .38
=========== ========== =========== ===========
Weighted average number of
common shares outstanding 13,363,779 13,363,779 13,363,779 13,363,257
=========== =========== =========== ===========
</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)
<TABLE>
<CAPTION>
Three months ended Six months ended
June 30, June 30,
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1996 1995 1996 1995
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<S> <C> <C> <C> <C>
Cash flow from operating activities:
Net income (loss) $ 662 $ (9,011) $ 1,007 $(10,245)
Adjustments to reconcile net income (loss) to net
cash provided by operating activities:
Depreciation and amortization 7,935 10,873 15,990 21,512
Gain on disposal of discontinued operations -- -- (5,184) --
Increase (decrease) in:
Accounts payable and accrued liabilities (5,495) (18,285) (18,778) (18,344)
Income taxes (138) 423 (3,926) (5,860)
Reforestation (345) (571) 704 590
Postretirement benefits 174 199 348 435
Deferred income taxes, net (807) (7,365) (807) (7,365)
Decrease (increase) in:
Accounts receivable 10,244 8,741 14,610 1,487
Inventories 14,834 29,297 10,934 26,935
Deposits on timber purchase contracts (125) (498) (1,108) (2,400)
Prepaid expenses (944) (2,358) (1,570) (1,943)
Deferred charges and other 341 (2,462) 689 (3,637)
-------- -------- -------- --------
Net cash provided by operating activities 26,336 8,983 12,909 1,165
Cash flow from investing activities:
Capital expenditures (1,180) (8,277) (1,857) (18,542)
Proceeds from disposal of discontinued operations -- -- 50,500 --
Proceeds from sale of Paragon Trade Brands, Inc.
common stock -- -- 4,819 --
Proceeds from sale of other properties 687 60 2,214 301
-------- -------- -------- --------
Net cash provided by (used for)
investing activities (493) (8,217) 55,676 (18,241)
Cash flow from financing activities:
Net increase (decrease) in short-term borrowings 1,500 (10,300) (39,000) 6,200
Net reduction of long-term debt (20,113) (106) (30,225) (211)
Cash dividends (2,539) (2,539) (5,078) (5,078)
Decrease in restricted bond funds -- 7,399 -- 9,620
Net proceeds from issuance of treasury stock -- 15 -- 15
-------- -------- -------- --------
Net cash provided by (used for)
financing activities (21,152) (5,531) (74,303) 10,546
-------- -------- -------- --------
Increase (decrease) in cash and
cash equivalents 4,691 (4,765) (5,718) (6,530)
Cash and cash equivalents at
beginning of period 3,417 5,082 13,826 6,847
-------- -------- -------- --------
Cash and cash equivalents at
end of period $ 8,108 $ 317 $ 8,108 $ 317
======== ======== ======== ========
</TABLE>
The accompanying notes are an integral part of these consolidated condensed
financial statements.
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POPE & TALBOT, INC.
NOTES TO CONSOLIDATED CONDENSED FINANCIAL STATEMENTS
June 30, 1996 and 1995
(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
June 30, 1996 and December 31, 1995, and the results of operations and
changes in cash flows for the three and six months ended June 30, 1996
and 1995. It is suggested that these interim statements be read in
conjunction with the financial statements and notes thereto contained
in the Company's 1995 report on Form 10-K. The results of operations
for the three and six months ended June 30, 1996 and 1995 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.
Refer to Exhibit 11.1 of this filing for the computation of average
common shares outstanding and earnings per share.
4. Discontinued Operations
On December 11, 1995, the Company entered into a definitive agreement
to sell its disposable diaper business (the "business") to Paragon
Trade Brands, Inc. (Paragon). On February 8, 1996, the sale was
completed. The Company sold substantially all the operating assets of
the business, primarily properties and inventories, to Paragon for
$50.5 million in cash and shares of unregistered Paragon common stock
having a value at the time the transaction was closed of approximately
$13.0 million. In the first quarter, pursuant to a stockholders'
agreement between the Company and Paragon, Paragon exercised an option
to repurchase 227,719 shares from the Company resulting in proceeds to
the Company of $4.8 million. The Company's remaining investment in
Paragon common stock is valued at $8.2 million and is included in the
Consolidated Condensed Balance Sheets at June 30, 1996 as marketable
securities. The pre-tax gain on disposition of the business of $5.2
million has been accounted for as discontinued operations and includes
closing costs associated with the transaction and a provision of $0.4
million for operating losses during the phase-out period. The prior
year Consolidated Statement of Income has been restated to reflect the
discontinuation of the diaper business.
5
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POPE & TALBOT, INC.
MANAGEMENT'S DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS
JUNE 30, 1996 AND 1995
(unaudited)
RESULTS OF OPERATIONS
Operating profits in both the wood products and pulp and paper products segments
resulted in second quarter 1996 income of $662,000, or $.05 per share, for Pope
& Talbot, Inc. (the "Company"). The 1996 second quarter income compared to
losses from continuing operations in the first quarter of 1996 and the 1995
second quarter of $2,765,000, or $.20 per share, and $6,315,000, or $.48 per
share, respectively. In addition to the losses from continuing operations, the
first quarter of 1996 had a gain on the sale of the Company's discontinued
diaper business of $3,110,000, or $.23 per share, and the second quarter of 1995
had a loss from discontinued diaper operations of $2,696,000, or $.20 per share.
Second quarter 1996 revenues of $110,567,000 were unchanged relative to the 1996
first quarter, but were 11 percent below the second quarter of 1995 as lower
pulp and wood chip revenues more than offset higher tissue sales.
Wood products segment second quarter 1996 earnings of $3.9 million compared to
income of $3.0 million in first quarter of 1996 and a loss of $2.5 million in
the second quarter of 1995. This segment comprised 51 percent of 1996 second
quarter sales. Included in the 1996 first quarter results was a $2.1 million
gain related to the sale of sawmill equipment at Port Gamble. The Port Gamble
facility was permanently shut down in the fourth quarter of 1995 due to the
increasing difficulty in obtaining an adequate supply of acceptably priced logs.
Adverse winter weather conditions across the U.S. limited upward movement of
lumber prices for much of the first quarter of 1996. At the end of the 1996
first quarter, lumber prices began to improve and this price improvement
continued in the second quarter. Overall lumber prices in the second quarter of
1996 were 14 percent better than during the 1996 first quarter and were 19
percent higher than in the second quarter of 1995. Although lumber prices have
increased in 1996, wood products segment earnings have been restrained as the
market for residual wood chips in the Pacific Northwest and British Columbia has
fallen dramatically since the fourth quarter of 1995, reflecting weakened pulp
markets. The residual chip market moved up steadily during 1995 to peak levels
in the third and early fourth quarters, however, with the falling pulp markets,
chip prices haven fallen sharply since the peaks. Second quarter 1996 chip
prices were about 30 percent less than first quarter averages and were less than
half those obtained in the peak of the 1995 chip market. The residual chip
market in the Pacific Northwest and British Columbia seems to have bottomed in
the middle of the second quarter of 1996. The Company uses residual chips in its
pulp business which mitigates somewhat the impact of these falling chip prices.
However, the Company produces more residual chips in its lumber business than it
consumes in the pulp business, so on balance, declining chip prices have a
detrimental impact on the Company's operating results.
Lumber sales volume of 139 million board feet in the second quarter of 1996
compared to shipments of 162 million board feet in the second quarter of 1995.
The year-to-year volume reduction related mainly to the Port Gamble sawmill
closure. The Company's sawmills operated at capacity in the second quarter of
1996. During the first quarter of 1996, U.S. and Canadian trade negotiators
reached an agreement establishing quotas on Canadian softwood lumber which can
be shipped to the U.S. on a duty-free basis. The 5-year agreement took
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effect April 1, 1996. Although numerous details have yet to be finalized,
including the allocation of quota volume within Canada to the various producers,
the Company believes this agreement will not have a significant effect on the
results of its Canadian sawmill operations. Approximately 73 percent of the
Company's 1996 lumber capacity is located in British Columbia, Canada.
The pulp and paper segment generated income of $0.8 million in the second
quarter of 1996 compared to losses of $2.9 million and $2.6 million in the first
quarter of 1996 and second quarter of 1995, respectively. In the second quarter
of 1996, continued improvements in tissue offset pulp losses caused by a weak
pulp market. Segment revenues of $54.0 million, or 49 percent of Company sales,
were down 13 percent from the second quarter of 1995. This year-to-year revenue
reduction was due mainly to lower pulp pricing and lower brokered wood chip
sales which more than offset stronger tissue volume and prices.
In the Company's pulp business, which comprised 19 percent of second quarter
1996 revenues, second quarter pulp pricing stabilized at the low, end of first
quarter levels following the rapid declines which began in the fourth quarter of
1995. The late 1995, early 1996 price declines followed a period of continuously
improving prices which began in 1994. Prices for the Company's pulp in 1994 were
25 percent higher than 1993 and 1995 prices averaged 70 percent higher than
those in 1994. The Company's second quarter 1996 prices were 42 percent below
the corresponding 1995 period and were 24 percent lower than the 1996 first
quarter prices. Although average prices for the Company's pulp have decreased
significantly, the reductions have not been as large as the declines solely in
market pulp due to the Company's pulp supply agreement with Grays Harbor Paper
Company. Sales of pulp to Grays Harbor represented about 55 percent of the
Company's year-to-date 1996 pulp sales. The Company's agreement with Grays
Harbor adjusts pulp prices based on copy and business printing paper prices
which have declined at a slower rate than market pulp. As discussed for the
Company's Wood Products segment, residual softwood chip prices declined
dramatically into the second quarter of 1996 while sawdust and hardwood chip
prices have been relatively stable. The softwood chip price reductions have
helped somewhat to offset the impact of the falling pulp sales prices.
Approximately 43 percent of the Company's second quarter 1996 pulp sales were
produced from softwood chips, while 48 percent was produced from sawdust and 9
percent from hardwood chips. During the second quarter of 1996, the Halsey mill
operated at near capacity levels compared to 80 percent of capacity in the first
quarter of 1996 and full capacity production in the 1995 second quarter. The
below-capacity first quarter 1996 production related mainly to a market induced
2-week shutdown taken at the end of the first quarter combined with a 3-day
flood-related shutdown in February.
The Company's tissue business, which represented 30 percent of 1996 second
quarter revenues, improved operating performance in the second quarter of 1996
and was profitable for the second consecutive quarter compared to significant
losses incurred in the corresponding 1995 period. This improved profitability
reflected higher tissue prices combined with significantly lower wastepaper
costs. Additionally, the second quarter of 1995 reflected costs associated with
the Ransom labor strike related mill shutdown. Tissue pricing began to stabilize
during 1994 after several years of decline and, during 1995, the Company
benefited from continuously improving prices throughout the year. First quarter
1996 tissue prices were essentially flat relative to the fourth quarter of 1995.
Second quarter 1996 prices fell 2 percent from first quarter levels, but were 20
percent higher than second quarter 1995 prices. The second quarter 1996 price
drop relative to the 1996 first quarter reflected the Company's response to the
second quarter 6 to 8 percent tissue price reductions implemented by Procter &
Gamble and Kimberly-Clark. The Company's price decreases were not implemented
until late in the 1996 second quarter. During 1995, wastepaper pricing was
pushed to record levels
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by a combination of strong pulp markets and shortages of certain wastepaper
grades caused by the start-up of new recycled fiber mills in the United States.
As a result of these pressures, wastepaper prices during 1995 doubled over 1994
pricing although by year-end 1995 wastepaper prices began to decline, consistent
with market pulp prices. This late 1995 decline accelerated through the first
quarter into the early second quarter of 1996 when prices leveled. Second
quarter 1996 wastepaper costs were 60 percent below those in the second quarter
of 1995 and were 22 percent lower than first quarter 1996 costs. During the
second quarter of 1996, the Company's tissue business operated at approximately
95 percent of capacity. This slightly below-capacity second quarter 1996
production reflected below-capacity operations of the Company's Ransom,
Pennsylvania tissue mill which represents 50 percent of the Company's tissue
capacity. Late in the fourth quarter of 1995 the Company settled a seven-month
labor strike at the Ransom facility. During the time since the strike
settlement, the Company has been rebuilding business that was lost as a result
of the strike. By the end of the second quarter, Ransom was operating at near
full capacity levels.
LIQUIDITY AND CAPITAL RESOURCES
During the first half of 1996, operations generated cash of $12.9 million and,
for the second quarter, generated cash of $26.3 million. Income before non-cash
charges for depreciation and amortization generated $17.0 million of cash during
the first six months of 1996. Reductions of accounts payable and accrued
liabilities used cash of $18.8 million. These reductions related mainly to
payment of discontinued diaper business liabilities combined with reductions due
to payment timing on other payables and accruals. Payment of income tax
obligations, primarily the 1995 Canadian tax liability, used $3.9 million cash.
Seasonal reductions in log inventories generated cash of $10.9 million.
Collections of accounts receivables related primarily to the discontinued diaper
operations generated cash of $14.6 million in the first six months of 1996. Cash
generated by operations was also used to pay down debt.
On December 11, 1995, the Company entered into a definitive agreement to sell
its disposable diaper business to Paragon Trade Brands, Inc. (Paragon). The sale
of the diaper business was completed on February 8, 1996. During the first
quarter of 1996, the Company received cash related to the sale of $55.3 million
and Paragon common stock valued at $8.2 million. The Company used the cash
received mainly to pay short- and long-term debt obligations. The Company's
investment in Paragon common stock is reflected as marketable securities in the
Consolidated Balance Sheets.
The Company is presently limiting capital spending, mainly to those projects
required to sustain existing operations. Capital spending for the first half of
1996 was unusually low at $1.9 million and was used for various small,
business-sustaining projects. The Company anticipates that approximately $3
million will be required to complete previously approved projects during the
remainder of 1996. It is anticipated that the capital spending for the remainder
of the year will be financed from internally generated cash and, if necessary,
from the Company's line of credit.
Through the first six months of 1996, the Company returned $5.1 million to
shareholders in the form of dividends. The Company has paid down $69.2 million
of debt during the first half of 1996. Concurrent with the diaper business sale
in February 1996, the Company's amount available under its long-term revolving
credit agreement was reduced from $100 million to $75 million. At June 30, 1996,
$4.0 million was outstanding under this revolving credit agreement.
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FACTORS THAT MAY AFFECT FUTURE RESULTS
Statements in this report or in other Company communications, such as press
releases, may relate to future events or the Company's future performance and
such statements are forward-looking statements. Such forward-looking statements
are based on present information the Company has related to its existing
business circumstances. Investors are cautioned that such forward-looking
statements are subject to an inherent risk that actual results may differ
materially from such forward-looking statements. Factors that may result in such
variances include, but are not limited to, changes in commodity prices and other
economic conditions, actions by competitors, changing weather conditions and
natural phenomena, actions by government authorities, uncertainties associated
with legal proceedings and future decisions by management in response to
changing conditions. Such factors are discussed in this report on Form 10-Q as
well as in the Company's Annual Report on Form 10-K.
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PART II.
ITEM 6. Exhibits and Reports on Form 8-K
Exhibits
--------
2.1 Asset Purchase Agreement by and among Paragon Trade Brands,
Inc., PTB Acquisition Sub, Inc., Pope & Talbot, Inc. and
Pope & Talbot, Wis., Inc. dated December 11, 1995.
(Incorporated herein by reference to Exhibit 2.1 to the
Company's Current Report on Form 8-K filed February 8,
1996.)
3.1 Certificate of Incorporation, as amended. (Incorporated
herein by reference to Exhibit 3(a) to the Company's Annual
Report on Form 10-K for the year ended December 31, 1992.)
3.2 Bylaws. (Incorporated herein by reference to Exhibit 3(b)
to the Company's Annual Report on Form 10-K for the year
ended December 31, 1992.)
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 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.)
4.5 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.)
4.6 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.)
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4.7 Extension/Modification Agreement, dated as of June 30,
1995, 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.; Bank of America
Illinois, fka Continental Bank; and Wachovia Bank of
Georgia, National Association. (Incorporated herein by
reference to Exhibit 4.7 to the Company's Quarterly Report
on Form 10-Q for the quarter ended June 30, 1995.)
4.8 Modification Agreement dated as of October 16, 1995, 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.; Bank of America Illinois; and
Wachovia Bank of Georgia, National Association.
(Incorporated herein by reference to Exhibit 4.8 to the
Company's Quarterly Report on Form 10-Q for the quarter
ended September 30, 1995.)
4.9 Modification Agreement, dated as of January 22, 1996, 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.; Bank of America Illinois; and
Wachovia Bank of Georgia, National Association.
(Incorporated herein by reference to Exhibit 4.1 to the
Company's Current Report on Form 8-K filed February 8,
1996.)
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.)
10.1.7 1996 Non-Employee Director Stock Option Plan. (Incorporated
herein by reference to Exhibit 10.1.7 to the Company's
Quarterly Report on Form 10-Q for the quarter ended March
31, 1996.)
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.)
11
<PAGE> 13
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.)
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 regarding computation of per share earnings.
27.1 Financial Data Schedule.
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 June
30, 1996.
12
<PAGE> 14
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: August 12, 1996 \s\ C. Lamadrid
----------------
By: C. Lamadrid
Senior Vice President and
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 Six months ended
June 30, June 30,
----------------------------- -----------------------
1996 1995 1996 1995
---- ---- ---- ----
<S> <C> <C> <C> <C>
Weighted average number
of common shares
outstanding 13,363,779 13,363,779 13,363,779 13,363,257
Application of the "treasury
stock" method to the stock
option plan - 15,980 - 15,980
----------- ----------- ----------- ------------
Total common and common
equivalent shares,
assuming full dilution 13,363,779 13,379,759 13,363,779 13,379,237
=========== =========== =========== ============
Net income (loss) $ 662,000 $(9,011,000) $ 1,007,000 $(10,245,000)
=========== =========== =========== ============
Net income (loss) per common
share, assuming full dilution $ .05 $ (.68) $ .08 $(.77)
======= ======= ====== =====
</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 JUNE 30, 1996, AND IS QUALIFIED IN ITS ENTIRETY BY REFERENCE TO
SUCH FINANCIAL STATEMENTS.
</LEGEND>
<S> <C>
<PERIOD-TYPE> 6-MOS
<FISCAL-YEAR-END> DEC-31-1996
<PERIOD-END> JUN-30-1996
<CASH> 8,108
<SECURITIES> 8,231
<RECEIVABLES> 38,171
<ALLOWANCES> 0
<INVENTORY> 58,022
<CURRENT-ASSETS> 129,114
<PP&E> 464,808
<DEPRECIATION> 252,811
<TOTAL-ASSETS> 378,779
<CURRENT-LIABILITIES> 54,202
<BONDS> 108,289
0
0
<COMMON> 13,972
<OTHER-SE> 171,803
<TOTAL-LIABILITY-AND-EQUITY> 378,779
<SALES> 221,249
<TOTAL-REVENUES> 221,249
<CGS> 211,540
<TOTAL-COSTS> 211,540
<OTHER-EXPENSES> 0
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 4,469
<INCOME-PRETAX> (3,504)
<INCOME-TAX> (1,401)
<INCOME-CONTINUING> (2,103)
<DISCONTINUED> 3,110
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 1,007
<EPS-PRIMARY> .08
<EPS-DILUTED> .08
</TABLE>
