<PAGE>
SECURITIES AND EXCHANGE COMMISSION
----------------------------------
WASHINGTON, D.C. 20549
FORM 10-Q
QUARTERLY REPORT UNDER SECTION 13 OR 15(d) OF
THE SECURITIES EXCHANGE ACT OF 1934
FOR QUARTER ENDED: August 31, 1995 COMMISSION FILE NUMBER:
0-9594
EXACT NAME OF REGISTRANT AS SPECIFIED
IN ITS CHARTER: Lane Plywood, Inc.
STATE OF INCORPORATION OF ORGANIZATION Oregon
I.R.S. EMPLOYER IDENTIFICATION NO.: 93-0411530
ADDRESS OF PRINCIPAL EXECUTIVE OFFICES: 65 N. Bertelsen Rd.
Eugene, Or. 97402
REGISTRANT'S TELEPHONE NUMBER: 503-342-5561
INDICATE BY CHECK MARK WHETHER THE REGISTRANT (1) HAS FILED ALL
REPORTS REQUIRED TO BE FILED BY SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934 DURING THE PRECEDING 12 MONTHS
(OR FOR SUCH SHORTER PERIOD THAT THE REGISTRANT WAS REQUIRED TO
FILE SUCH REPORTS), AND (2) HAS BEEN SUBJECT TO SUCH FILING RE-
QUIREMENTS FOR THE PAST 90 DAYS. YES X NO
----- -------
INDICATE THE NUMBER OF SHARES OUTSTANDING OF EACH OF THE ISSUERS' CLASSES OF
STOCK, AS OF THE LATEST PRACTICABLE DATE:
AS OF: September 15, 1995 -- 204,662 Shares
<PAGE>
LANE PLYWOOD. INC.
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INDEX
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PAGE NO.
--------
Part I. Financial Information
Balance Sheets 2 - 3
Statements of Income and Retained Earnings 4
Statements of Cash Flows 5
Notes to Financial Statements 6 - 7
Management Discussion and Analysis of
Financial Condition and Results of Operations 8 - 9
Part II. Other Information 10
Signature Page 11
<PAGE>
LANE PLYWOOD, INC.
BALANCE SHEETS
<TABLE>
<CAPTION>
ASSETS August 31, November 30,
1995 1994
CURRENT ASSETS:
<S> <C> <C>
Cash and cash equivalents $ 1,560 $ 1,081,608
Accounts receivable--Trade and other 1,823,470 1,658,880
Other 39,836 38,330
Less-Allowance for doubtful accounts (17,034) (17,034)
Inventories--
Plywood and veneer 1,177,511 772,254
Operating supplies 57,387 68,839
Prepaid and other current assets 64,234 195,059
Income Tax Refund 0 0
Deferred taxes 75,317 75,317
Timber and timberlands,held for sale 432,191 432,191
------------ -----------
Total current assets 3,654,472 4,305,444
PROPERTY,PLANT AND EQUIPMENT,at cost:
Land 560,038 565,262
Buildings 1,548,687 1,548,687
Machinery and equipment 7,390,431 7,959,833
Construction in progress 197,012 78,700
------------- -----------
9,696,168 10,152,482
Less-Accumulated depreciation (7,403,084) (7,830,255)
2,293,084 2,322,227
Idle equipment 122,770 122,770
------------ -----------
2,415,854 2,444,997
TIMBER AND TIMBERLANDS,at cost less
depletion 624,976 624,976
LONG-TERM DEFINED BENEFIT COSTS 0 154,622
------------ -----------
Total assets $ 6,695,302 $ 7,530,039
------------ -----------
</TABLE>
The accompanying notes are an integral part of these balance sheets.
2
<PAGE>
LANE PLYWOOD, INC.
BALANCE SHEETS
<TABLE>
<CAPTION>
August 31, November 30,
1995 1994
<S> <C> <C>
LIABILITIES AND STOCKHOLDERS' EQUITY
CURRENT LIABILITIES:
Book overdraft $ 114,825 $ 0
Current portion of long-term debt 29,077 27,164
Short-term bank borrowing 0 423,508
Accounts payable -- Trade and other 1,454,791 1,234,420
Accrued liabilities --
Payroll and related benefits 637,418 404,003
Other liabilities 119,221 473,554
----------- -----------
Total current liabilities 2,427,332 2,562,649
LONG-TERM DEBT, excluding current portion 99,035 124,428
COMMITMENTS O O
LONG-TERM DEFINED BENEFIT OBLIGATION O 378,230
DEFERRED TAXES 78,196 102,196
POST RETIREMENT HEALTH BENEFITS 61,680 61,680
STOCKHOLDERS' EQUITY
Common stock,no par value, 2,000,000 shares
authorized, 715,574 shares issued 535,509 535,509
Pension liability - excess of assets O (285,997)
Retained earnings 3,493,550 4,051,344
----------- -----------
4,029,059 4,300,856
----------- -----------
Total liabilities and stockholders'
equity $ 6,695,302 $ 7,530,039
----------- -----------
</TABLE>
The accompanying notes are an integral part of these balance sheets.
3
<PAGE>
LANE PLYWOOD, INC.
STATEMENTS OF OPERATIONS AND RETAINED EARNINGS
<TABLE>
<CAPTION>
THREE MONTHS ENDED NINE MONTHS ENDED
AUGUST 31, AUGUST 31, AUGUST 31, AUGUST 31,
1995 1994 1995 1994
<S> <C> <C> <C> <C>
INCOME:
Net sales $10,611,751 $10,081,798 $30,081,854 $26,382,465
Cost of goods sold 9,864,513 9,490,166 28,627,687 25,643,471
----------- ----------- ----------- -----------
Gross profit 747,238 591,632 1,454,167 738,362
Selling,general and
administrative expense 232,615 205,277 855,398 606,742
Pension termination
expense O 0 1,357,676 0
----------- ----------- ----------- -----------
Operating income(loss) 514,623 386,355 (758,907) 132,252
Interest income 5,562 7,043 29,877 14,572
Interest expense 17,643 31,528 47,764 86,289
----------- ----------- ----------- -----------
Income(loss) before
income taxes 502,542 361,870 (776,794) 60,535
Provision(benefit)
for income taxes 171,000 52,000 (219,000) (8,000)
----------- ----------- ----------- -----------
Net (loss) 331,542 309,870 (557,794) 68,535
----------- ----------- ----------- -----------
Average shares
outstanding 204,662 204,662 204,662 204,662
Net (loss)
per share, on average
number of shares $1.62 $1.51 ($2.73) $.33
RETAINED EARNINGS: AUGUST 31 NOVEMBER 30
1995 1994
Balance-beginning of year $ 4,051,344 $ 3,513,848
Dividend declared 0 (51,166)
Net income(loss) (557,794) 588,662
----------- -----------
Balance-end of year $ 3,493,550 $ 4,051,344
----------- -----------
</TABLE>
The accompanying notes are an integral part of these financial statements.
4
<PAGE>
LANE PLYWOOD, INC.
STATEMENTS OF CASH FLOWS
FOR THE PERIODS ENDED
<TABLE>
<CAPTION>
AUGUST 31, AUGUST 31,
CASH FLOWS FROM OPERATING ACTIVITIES: 1995 1994
<S> <C> <C>
Net income(loss) $ (557,794) $ 68,535
Adjustments to reconcile net income(loss)
to net cash provided from(used in) operations:
Depreciation 144,000 140,000
Depletion 0 23,532
(Gain) on disposition of property (17,992) 0
Change in working capital:
(Increase)decrease in receivables (166,096) (497,666)
(Increase)decrease in inventories (393,805) (345,052)
(Increase)decrease in prepaids and other
current assets 130,825 (21,937)
Increase(decrease) in accounts payable
and accrued liabilities 224,532 277,384
----------- -----------
Net cash provided(used) by operating activities (636,330) (354,404)
----------- -----------
CASH FLOWS FROM INVESTING ACTIVITIES:
- -------------------------------------
Additions to property (120,397) (81,957)
Proceeds from disposition of property 23,532 171,005
----------- -----------
Net cash provided(used) by investing activities (96,865) 89,048
----------- -----------
CASH FLOWS FROM FINANCING ACTIVITIES:
- -------------------------------------
Increase(decrease) in book cash overdraft 114,825 (50,770)
Proceeds from(payment of) short-term bank borrowing (423,508) (184,234)
Payment of long-term debt (25,393) (66,338)
Pension termination funding adjustments 38,389 0
Dividends paid (51,166) 0
----------- -----------
Net cash provided(used) by financing activities (346,853) (301,342)
----------- -----------
(Decrease) in cash and cash equivalents (1,080,048) (566,698)
Cash and cash equivalents:
Beginning of year 1,081,608 1,199,345
----------- -----------
End of period $ 1,560 $ 632,647
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CASH PAID DURING THE YEAR FOR:
Interest $ 47,764 $ 86,289
Income taxes(net of tax refund received) 0 224,576
</TABLE>
The accompanying notes are an integral part of these financial
statements.
5
<PAGE>
LANE PLYWOOD. INC.
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NOTES TO FINANCIAL STATEMENTS
-----------------------------
(Unaudited)
1.PRINCIPLES OF INTERIM STATEMENTS:
The interim financial statements have been prepared by the Company without
audit and are subject to year-end adjustment. Certain information and footnote
disclosure normally included in financial statements prepared in accordance with
generally accepted accounting principles have been condensed or omitted pursuant
to rules and regulations of the Securities and Exchange Commission. In the
opinion of the Company, the accompanying unaudited financial statements contain
all adjustments necessary to present fairly the position of the Company as of
August 31, 1995 and November 30, 1994 and results of operations and cash flows
for the nine months ended August 31, 1995. It is suggested that these interim
statements be read in conjunction with the financial statements and notes
thereto in the 1994 annual report on form 10-K.
2.INCENTIVE PROFIT SHARING PLAN:
The Company has an incentive profit sharing plan which provides for bonus
payments to eligible employees. The total bonus distribution to eligible
employees is based on 30% of income before income taxes, adjusted for the effect
of major gains or losses on dispositions of assets, if any, and adjusted for the
effect of inventory costs determined under the LIFO method in excess of a base
provision equal to the sum of 5% of stockholders' equity and 10% of long-term
debt at the beginning of the fiscal year.
During the period of March 1, 1981 to July 31, 1983, wage and salary rates
for all employees were either reduced or restored dependent upon the Company's
financial position. An accumulation of lost earnings during this period was
maintained and will be paid out of 20% of the profits earned in accordance with
the incentive profit sharing plan. The amounts of this special class of payments
were accrued in the amounts of $0 in 1995, $77,491 in 1994 and $44,638 in 1993.
At August 31, 1995, the accumulated amount of earnings eligible for future
restoration totaled $868,262. The remaining 10% of profits earned in accordance
with the incentive profit sharing plan are distributed to all eligible
employees, independent of the wage restoration portion. The amount of bonus
accrued for 1995, 1994, and 1993 was $0, $38,745 and $22,319, respectively.
3.NOTES PAYABLE AND LONG-TERM DEBT:
At August 31, 1995, long-term debt consisted of the following:
<TABLE>
<CAPTION>
August 31, Nov. 30,
1995 1994
<S> <C> <C>
Purchase contract at 8.03% due in
1999, $1,666.08 monthly payment
including interest until 1999,
collateralized by certain assets 65,779 76,452
</TABLE>
6
<PAGE>
3.NOTES PAYABLE AND LONG-TERM DEBT:(cont.)
<TABLE>
<CAPTION>
August 31, Nov. 30,
1995 1994
<S> <C> <C>
Purchase contract at 8% due in
1999,$18,802 annual payment plus
interest collateralized by certain
assets 62,333 75,140
------- --------
128,112 151,592
Less-current portion 29,077 27,164
------- ---------
$ 99,035 $124,428
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</TABLE>
Under a short-term line of credit with the bank, collateralized by
accounts receivable, inventory, and machinery, the Company may borrow up to a
maximum of $2,000,000 with interest at the bank's variable basic rate (8.75% at
August 31, 1995) plus 1% with April 30, 1996 expiration date. At August 31,
1995, none of the line of credit was used.
The loan agreement pertaining to the short-term line of credit with the
bank contains, among other things, certain requirements as to the maintenance of
the working capital, net worth, and debt to net worth, and restrictions as to
the level of capital and lease expenditures, the incurrence of debt, investments
and payment of dividends. Under the most restrictive requirements, the company
must maintain $3,600,000 of stockholders' equity and $775,000 working capital.
At August 31, 1995, the Company was in compliance with all loan requirements.
4.DEFINED BENEFIT PENSION PLAN:
The Company terminated the defined benefit retirement plan effective March
15, 1995 and is in the process of filing the IRS and PBGC forms necessary to
effectuate the termination of the plan. This process may take up to a year to
complete the termination process.
The Company funded the termination of the defined benefit retirement plan
on April 20, 1995 when interest rates and asset levels reached a level at which
the Company could make up the cash difference necessary to purchase annuities
for all participants in the plan. Due to the change in the Mortality Tables
being used to project longevity and a drop in the treasury interest rates after
the November 30, 1994 statement, the amount necessary to fully fund the cash
difference paid by the Company was $1,262,157. Transamerica Life Insurance
Company is in the process of preparing information for all participants in the
Plan.
5.OTHER:
The results of operations for the nine month periods ended August 31, 1995
and August 31, 1994 are not necessarily indicative of the results to be expected
for the full year.
7
<PAGE>
LANE PLYWOOD, INC.
MANAGEMENT DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION
AND RESULTS OF OPERATION
LIQUIDITY AND CAPITAL RESOURCES:
The Company's working capital (defined as current assets less current
liabilities) decreased $515,655 during the nine months ending August 31, 1995
compared to an increase of $255,578 during the nine months ending August 31,
1994. Lower cash, higher book overdraft, higher accounts payable and increased
payment of short term bank borrowing partially offset by higher inventories and
higher receivables were the primary contributors to this decrease in working
capital. The decrease in cash and the increase in book overdraft were primarily
the result of the Company using cash and its book overdraft to fully fund the
benefit liabilities of the Company's defined benefit pension plan (see #4, Notes
to Financial Statements) and to make capital expenditures. A higher level of
receivables reflect increased veneer and plywood sales during the quarter ending
August 31, 1995. The higher level of accounts payable are indicative of the
increase in veneer prices. Increased inventories, particularly veneer
inventories, are the result of a slightly higher level of veneer buying by the
Company.
Capital expenditures of $120,600 during the nine months ending August 31,
1995, include $78,000 for the conversion of the fuel source of the #4 dryer from
wood to natural gas, $19,300 for press platens, $8,400 for replacing the
telephone system wiring, and $12,400 for venting the #2 dryer. All capital
expenditures in the nine months ending August 31, 1995, were paid through the
Company's cash account.
Money market investment funds held at Fidelity Investments, Franklin
Templeton Funds, the Benham Group and Bank of America and $400,000 from the line
of credit were used to fully fund the Defined Benefit Plan in April, 1995.
The Company renewed the line of credit at Bank of America. The line of
credit is currently scheduled to expire on April 30, 1996. Of the $2,000,000
line of credit, none was in use at August 31, 1995. The renewal of the line of
credit was accomplished with significantly the same terms as the prior year.
Additionally, in September, 1995, the Company completed a $1,000,000 short term
finance package. This short term package, should any of it be used, will be
repaid from the harvest of some of the Company's timber assets and is secured by
the Company's Red Hill tree farm.
RESULTS OF OPERATION:
Operating results for the nine month period ended August 31, 1995 reflect
a loss before taxes of $776,797 compared to an income before taxes of $60,533
for the nine month period ended August 31, 1994. This change in operations is
primarily due to the expense of terminating the
8
<PAGE>
defined benefit plan in April, 1995.
For the nine month period ending August 31, 1995, plywood sales volume
measured in 3/8 footage, increased 9%, compared to the plywood sales 3/8
footage, for the nine months ended August 31, 1994; this increase is primarily
due to an increased production schedule. Comparing the same nine month periods,
the average selling price increased by 6%. Comparing the nine month period
ending August 31, 1995, to the nine month period ending August 31, 1994, the
margin of average plywood sales prices compared to the average cost of veneer
used increased 13%. The primary factor contributing to this increase is an
increase in plywood prices and a decrease in veneer prices.
Comparing the nine months ending August 31, 1995, with the same period one
year earlier, veneer average cost decreased 4%; however, the Company increased
the volume of veneer, measured in 3/8 footage, purchased by 9%. Veneer prices
began rising in May, 1995 with the primary contributor to the rise being the
lack of availability of face veneer. Dry veneer sales volume, measured in 3/8
footage, for the nine month period ending August 31, 1995, decreased 9% compared
to dry veneer sales, measured in 3/8 footage, during the same period one year
earlier, and the average selling price per thousand 3/8 footage decreased 2%.
This reduction is due to the slower LVL market.
Timber supply in the industry continues to be a problem for the Company;
lower availability of logs continues to cause increased prices for veneer that
the Company purchases from outside sources. The Company maintains a wide-range
purchasing program from numerous vendors to keep veneer sources available. The
Company is currently expanding the sources and volume of purchases of foreign
veneer to use as face material.
9
<PAGE>
LANE PLYWOOD, INC.
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PART II
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Item 9. Exhibits and Reports on Form 8-K
a. Reports on Form 8-K
The registrant has filed no reports on Form 8-K during the period by
this report.
10
<PAGE>
SIGNATURES
----------
Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.
Date_____________________ LANE PLYWOOD, INC.
------------------
_____________________________________
Janis M. Johnson, Secretary-Treasurer
(principal accounting financial officer)
_____________________________________
Carl R. Wiley, President
(principal executive officer)
11
<TABLE> <S> <C>
<PAGE>
<ARTICLE> 5
<S> <C>
<PERIOD-TYPE> 9-MOS
<FISCAL-YEAR-END> NOV-30-1994
<PERIOD-END> MAY-31-1995
<CASH> 1,560
<SECURITIES> 0
<RECEIVABLES> 1,823,470
<ALLOWANCES> 17,034
<INVENTORY> 1,234,898
<CURRENT-ASSETS> 3,654,472
<PP&E> 9,696,168
<DEPRECIATION> 7,403,084
<TOTAL-ASSETS> 6,695,302
<CURRENT-LIABILITIES> 2,427,332
<BONDS> 0
<COMMON> 535,509
0
0
<OTHER-SE> 3,493,550
<TOTAL-LIABILITY-AND-EQUITY> 6,695,302
<SALES> 10,611,751
<TOTAL-REVENUES> 10,611,751
<CGS> 9,864,513
<TOTAL-COSTS> 232,615
<OTHER-EXPENSES> 0
<LOSS-PROVISION> 17,034
<INTEREST-EXPENSE> 17,643
<INCOME-PRETAX> 502,623
<INCOME-TAX> 171,000
<INCOME-CONTINUING> 331,542
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 331,542
<EPS-PRIMARY> 1.62
<EPS-DILUTED> 1.62
</TABLE>
