<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: February 29, 1996 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 PRACTIBLE DATE:
AS OF: April 5, 1996 -- 204662 Shares
<PAGE>
LANE PLYWOOD, INC.
INDEX
Page No.
Part I. Financial Information
Balance Sheets 2
Statements of Income and Retained Earnings 3
Statements of Cash Flows 4
Notes to Financial Statements 5 - 6
Management Discussion and Analysis of
Financial Condition and Results of Operations 7
Part II. Other Information 8
Signature Page 9
<PAGE>
LANE PLYWOOD, INC.
BALANCE SHEETS
<TABLE>
<CAPTION>
ASSETS February 29, November 30,
1996 1995
<S> <C> <C>
CURRENT ASSETS:
Cash and cash equivalents $ 1,560 $ 658,289
Accounts receivable
Trade 1,290,556 1,108,399
Other 132,290 2,187
Less-Allowance for doubtful accounts (17,034) (17,034)
Inventories-- 1,890,158 896,324
Prepaid and other current assets 49,553 58,693
Deferred taxes 0 129,604
Timber and timberlands,held for sale 432,191 432,191
----------- ------------
Total current assets 3,779,274 3,268,653
PROPERTY,PLANT AND EQUIPMENT,at cost:
Land 526,488 526,488
Buildings 1,543,065 1,543,065
Machinery and equipment 7,591,480 8,140,732
Construction in progress 51,337 16,068
----------- ------------
9,712,370 10,226,353
Less-Accumulated depreciation (7,472,043) (7,970,295)
---------- ------------
2,240,327 2,256,058
Idle equipment(Less accumulated depreciation
of $3,871,808) 118,856 118,856
---------- ------------
2,359,183 2,374,914
TIMBER AND TIMBERLANDS,at cost less depletion 615,165 615,165
----------- ------------
Total assets $ 6,753,622 $ 6,258,732
----------- ------------
LIABILITIES AND STOCKHOLDERS' EQUITY
CURRENT LIABILITIES:
Book overdraft $ 247,688 $ 95,202
Current portion of long-term debt 14,922 29,388
Short-term bank borrowing 65,490 0
Accounts payable --trade and other 1,282,328 796,903
Accrued liabilities --
Payroll and related benefits 571,080 486,492
Other liabilities 74,708 256,427
----------- ------------
Total current liabilities 2,256,216 1,664,412
LONG-TERM DEBT,excluding current portion 28,609 95,021
COMMITMENTS 0 0
DEFERRED TAXES 61,604 61,604
POST RETIREMENT HEALTH BENEFITS 150,724 150,724
STOCKHOLDERS' EQUITY:
Common stock,no par value, 2,000,000 shares
authorized, 715,574 shares issued 535,509 535,509
Retained earnings 3,720,960 3,751,462
----------- ------------
4,256,469 4,286,971
----------- ------------
Total liabilities and stockholders' equity $ 6,753,622 $ 6,258,732
------------ ------------
The accompanying notes are an integral part of these statements.
-2-
<PAGE>
LANE PLYWOOD, INC
STATEMENTS OF OPERATIONS AND RETAINED EARNINGS
THREE MONTHS ENDED
FEB. 29, FEB. 28,
INCOME: 1996 1995
<S> <C> <C>
Net sales $ 8,396,698 $ 9,471,082
Cost of goods sold 8,184,376 8,931,658
------------ ------------
Gross profit(loss) 212,322 539,424
Selling,general and administrative expenses 256,302 308,097
------------ -----------
Operating income(loss) (43,980) 231,327
Interest income 5,472 1,372
Interest expense (8,006) 11,685
------------ -----------
Income(loss) before income taxes (30,502) 221,014
Provision(benefit) for income taxes 0 18,000
------------- -----------
Net income(loss) (30,502) 203,014
------------- -----------
Average shares outstanding 204,662 204,662
Net income(loss) per share,
on average number of shares ($.15) $.99
</TABLE>
<TABLE>
<CAPTION>
RETAINED EARNINGS: FEB.29, FEB.28,
1996 1995
<S> <C> <C>
Balance-beginning of year $ 3,751,462 $ 4,051,344
Net income(loss) (30,502) 203,014
------------- -------------
Balance-end of year $ 3,720,960 $ 4,254,358
------------- -------------
</TABLE>
The accompanying notes are an integral part of these statements.
-3-
<PAGE>
LANE PLYWOOD,INC.
STATEMENTS OF CASH FLOWS
FOR THE PERIODS ENDED
<TABLE>
<CAPTION>
Feb.29, FEB.28,
1996 1995
<S> <C> <C>
CASH FLOWS FROM OPERATING ACTIVITIES:
Net income(loss) $ (30,502) $ 203,014
Adjustments to reconcile net income(loss)
to net cash provided from(used in) operations:
Depreciation 50,811 48,000
(Gain) on disposition of property 0 (17,893)
Change in working capital:
(Increase)decrease in receivables (312,260) 182,839
(Increase)decrease in inventories (993,834) 128,388
(Increase)decrease in prepaids and other
current assets 138,744 19,292
Increase(decrease) in accounts payable
and accrued liabilities 373,828 (285,813)
----------- ------------
Net cash provided(used) by operating activities (773,213) 277,827
----------- ------------
CASH FLOWS FROM INVESTING ACTIVITIES:
Additions to property (35,080) (81,115)
Proceeds from disposition of property 0 23,532
----------- ------------
Net cash provided(used) by investing activities (35,080) (57,583)
----------- ------------
CASH FLOWS FROM FINANCING ACTIVITIES:
Increase(decrease) in book cash overdraft 152,486 0
Proceeds from(payment of) short-term bank borrowing 65,490 (423,508)
Payment of long-term debt (66,412) (17,608)
Dividends paid 0 (51,166)
----------- ------------
Net cash provided(used) by financing activities 151,564 (492,282)
----------- ------------
(Decrease) in cash and cash equivalents (656,729) (272,038)
Cash and cash equivalents:
Beginning of year 658,289 1,081,608
End of period $ 1,560 $ 809,570
CASH PAID DURING THE YEAR FOR:
Interest $ 6,495 $ 11,685
Income taxes(net of tax refund received) 111,010 122,000
</TABLE>
The accompanying notes are an integral part of these statements.
-4-
<PAGE>
LANE PLYWOOD, INC.
NOTES TO FINANCIAL STATEMENTS
(Unaudited)
1.PRINCIPLES OF INTERIM STATEMENTS:
The interim finanacial 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 Secruities 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
February 29, 1996 and November 30, 1995 and results of operations and cash flows
for the three months ended February 29, 1996. It is suggested that these interim
statements be read in conjunction with the financial statments and notes thereto
in the 1995 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 the net earnings reduction due to the
reduced wage and salary rates during this period was maintained for this group
of employees and, as provided in the incetive profit sharing plan were to be
paid out of 20% of the future profits when realized and as defined in the
incentive profit sharing plan. The amounts of payments due for 1995 and 1994
under the terms of the plan for this class of employees was $0 and $77,491,
respectively. At February 29, 1996, the accumulated amount of earnings eligible
for future restoration, contingent upon future profits as defined by the plan,
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 February 29, 1996, long-term debt consisted of the following:
Feb. 29, Nov. 30,
1996 1995
Purchase contract at 8.03% due in
1999, $1,666.08 monthly payment
including interest until 1999,
collateralized by certain assets 0 62,076
Purchase contract at 8% due in
1999, $18,802 annual payment plus
interest collateralized by certain
assets 43,531 62,333
------- -------
43,531 124,428
Less-current portion 14,922 29,388
------- -------
28,609 95,021
-5-
<PAGE>
3.NOTES PAYABLE AND LONG-TERM DEBT:(CONT.)
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 (8.25% at February
29, 1996) plus 1% with April 30, 1996 expiration. At February 29, 1996, $65,490
of the line of credit was used.
Under a short-term loan arrangement with the bank, collateralized by one of
the Company's tree farms, the Company may borrow up to $1,000,000 with interest
at the bank's variable basic rate (8.25% at February 29, 1996) plus 1% with
April 30, 1996 expiration. None of this loan has been used and will be allowed
to expire on April 30, 1996
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 February 29, 1996, the Company was in compliance with all loan requirements.
The results of operation for the three month periods ended February 29,
1996 and February 28, 1995 are not necessarily indicative of the results to be
expected for the full year.
-6-
<PAGE>
LANE PLYWOOD, INC.
MANAGEMENT DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION
AND RESULTS OF OPERATION
LIQUIDITY AND CAPITAL RESOURCES:
Working capital decreased $81,000 during the first three months of 1996
compared to an increase of $179,000 during the first three months of 1995. This
increase is due to the net loss of $31,000 and heavy use of cash to build veneer
inventory. Receivables increased by $312,000, inventories increased by $994,000,
and accounts payable/accrued liabilities increased by $374,000. The higher level
of receivables reflect some rebound in veneer and plywood sales during February.
The higher level of accounts payable is indicative of the increased veneer
purchases. Increased inventories, particularly veneer inventories, are the
results of the higher level of veneer buying and the increased average prices of
the veneer on hand.
Capital expenditures of $35,600 in 1996 have been for the moving and
containment of the layup department's resin tanks. All this year's expenditures
have been paid through the Company's cash account.
The Company maintains a short term investment account at the bank for
investment of excess funds which can be readily transferred back into the
regular checking account if needed. The balance held in this account at February
29, 1996 was $73,000. Of the $2,000,000 line of credit, $65,490 was in use at
February 29, 1996.
RESULTS OF OPERATION:
Operating results for the period ended February 29, 1996 reflect a loss
before taxes of $30,504 compared to an income before taxes of $221,014 for the
period ended February 28, 1995. This change in operations is primarily due to
severe weather conditions which have affected the plywood market and sales
prices.
Plywood sales volume decreased 7% due to a market related reduced
production schedule compared to a 15% increase for the first quarter of 1995.
The average selling price decreased by 9% compared to a 6% increase for the same
period in 1995. The margin of plywood sales to veneer used has decreased 13% due
primarily to the decrease in plywood prices. Veneer cost decreased 7% over the
same period in 1995. Veneer prices have been going back up in the last month of
this quarter due to the lack of availability of face veneer.
Timber supply in the industry continues to be a problem for the Company,
since availibility of logs affects the prices we are paying for veneer from
outside sources. The Company maintains a wide-range purchasing program from
numerous vendors to keep veneer sources available.
-7-
<PAGE>
LANE PLYWOOD, INC.
PART II
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
covered by this report.
-8-
<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: April 9, 1996 LANE PLYWOOD, INC.
\S\ JANIS M. JOHNSON
_____________________________________
Janis M. Johnson, Secretary-Treasurer
(principal accounting financial officer)
\S\ CARL R. WILEY
______________________________________
Carl R. Wiley, President
(principal executive officer)
-9-
<TABLE> <S> <C>
<PAGE>
<ARTICLE> 5
<S> <C>
<PERIOD-TYPE> 3-MOS
<FISCAL-YEAR-END> NOV-30-1995
<PERIOD-END> FEB-29-1996
<CASH> 1,560
<SECURITIES> 0
<RECEIVABLES> 1,422,846
<ALLOWANCES> 17,034
<INVENTORY> 1,890,158
<CURRENT-ASSETS> 3,779,274
<PP&E> 9,831,226
<DEPRECIATION> 7,472,043
<TOTAL-ASSETS> 6,753,622
<CURRENT-LIABILITIES> 2,256,216
<BONDS> 0
0
0
<COMMON> 535,509
<OTHER-SE> 3,720,960
<TOTAL-LIABILITY-AND-EQUITY> 6,753,622
<SALES> 8,396,698
<TOTAL-REVENUES> 8,402,170
<CGS> 8,184,376
<TOTAL-COSTS> 8,440,678
<OTHER-EXPENSES> 0
<LOSS-PROVISION> 17,034
<INTEREST-EXPENSE> (8,006)
<INCOME-PRETAX> (30,502)
<INCOME-TAX> 0
<INCOME-CONTINUING> (30,502)
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> (30,502)
<EPS-PRIMARY> (.15)
<EPS-DILUTED> (.15)
</TABLE>
