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SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the
Securities Exchange Act of 1934
Date to Report (Date of earliest event reported) August 10, 1998 (July 31, 1998)
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GENERAL BINDING CORPORATION
(Exact name of registrant as specified in its charter)
Delaware 0-2604 36-0887470
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(State or other (Commission (IRS Employer
jurisdiction of File Number) Identification No.)
incorporation)
One GBC Plaza
Northbrook, Illinois 60062
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(Address of principal executive offices) (Zip Code)
Registrants's telephone number, including area code (847) 272-3700
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Form 8-K Current Report
For the Month of August, 1998
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Item 5. Other Events.
On July 31, 1998 the Registrant issued a Press Release reporting its
unaudited 1998 quarter ending June 30, 1998 results, a copy of which is attached
hereto as an Exhibit and is incorporated herein by reference.
Item 7. Exhibits
1. Press Release of July 31, 1998.
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 under
signed thereunto duly authorized.
General Binding Corporation
---------------------------
(Registrant)
Date: August 10, 1998
/s/ Steven Rubin
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Steven Rubin,
Vice President, Secretary
and General Counsel
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EXHIBIT 99.1
[GBC NEWS LETTERHEAD]
Contact : Paul J. Bors
Corporate Treasurer
(847) 291-6187
GBC REPORTS 1998 SECOND QUARTER RESULTS
Northbrook, IL, July 31, 1998 -- General Binding Corporation (Nasdaq: GBND)
today reported sales for the second quarter of 1998 of $230.7 million, a 23%
increase over the $187.4 million posted in 1997. Excluding the one-time,
after-tax charge of $2.06 million, or $0.13 per diluted share, from the
previously-announced sale of its non-strategic U.S. RingBinder business, net
income for the quarter was $5.78 million, or $0.36 per diluted share, a decrease
from the $7.21 million, or $0.45 per diluted share, posted in 1997. Results for
the quarter include Ibico's operations, acquired on February 27, 1998, which are
being integrated into the Company's Office Product Group. Ibico contributed
sales of $30.0 million for the quarter.
As previously announced, operational results for the quarter were adversely
impacted by several temporary factors: weaker-than-expected sales and gross
profit in the Document Finishing Group resulting from a reorganization of the
sales force at the beginning of the year; expenditures made in advance of
expected revenues by the Company's European Office Products Group to secure
expanded business with major retailers; higher expenditures related to
management information systems and Y2K upgrades; and three new manufacturing
facilities not yet operating at expected efficiency levels. Higher levels of
goodwill amortization and interest expense, primarily related to the Ibico
acquisition, also contributed to the lower earnings.
For the first half of 1998, sales were $444.7 million, a 21% increase over
the $367.9 million in sales for last years's period. Excluding the U.S.
RingBinder charge, net income was $12.87 million, or $0.81 per diluted share,
for the first half of 1998, an 8% decrease from the $13.98 million, or $0.88 per
diluted share, for the same period last year. Ibico's sales from the date of its
acquisition through the end of the first half were $41.3 million.
STRONGER PERFORMANCE EXPECTED IN SECOND HALF
"We continue to see evidence that the operational issues are of a
short-term nature, and we expect stronger performance for GBC in the second half
of the year," said President and Chief Executive Officer Govi Reddy. "In our
Document Finishing Group, sales continued to
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ramp up in June, and the sales mix appears to be back on track. Second half
sales for the Group should also materially benefit from two new machine product
introductions. Higher sales in this Group, and the integration of Ibico, which
is continuing smoothly, should also help our new manufacturing facilities reach
their targeted utilization levels since these facilities support both the
Document Finishing Group and the Office Products Group."
In addition, Reddy said, "We are still confident that our earnings for the
year are on target to be at or sightly above last year's, despite the short-term
dilutive effects from the Ibico acquisition. We expect to carry strong momentum
into next year's results, which should materially benefit from the many
important investments we have made over the past year and a half."
GBC is an innovative global technology leader in document finishing, film
lamination, visual communications and paper shredder products. GBC's products
are marketed in over 115 countries under the GBC, Quartet, Ibico, VeloBind,
Shredmaster, Bates, Sickinger, Pro-Tech, and Fordigraph names and are used in
the commercial, business, education, home office and government markets.
This press release includes forward-looking statements involving
uncertainties and risks, and there can be no assurance that actual results will
not differ from the Company's expectations. The words "should," "believe,"
"anticipates," "plans," "may," "expects" and other expressions that indicate
future events and trends identify forward-looking statements. Factors that could
cause materially different results include, among other thins, competition
within the office products and lamination film products markets, effects of
general economic conditions, issues associated with the integration of
recently-acquired operations, the ability of the Company's distributors to
successfully market the Company's products and other risks described in the
Company's filings with the S.E.C. The Company assumes no obligation to update
its forward-looking statements.
For additional information on GBC's second quarter results, please request
a copy of the Company's Form 10-Q, available on August 15, by faxing your
request to GBC Investor Relations at fax (847) 291-6438.
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Exhibit to
1998 Q2 Earnings Release
GENERAL BINDING CORPORATION
THREE AND SIX MONTHS ENDED JUNE 30, 1998
(Amounts in Thousands except Per Share Amounts)
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<CAPTION>
Second Quarter Ended Six Months Ended
June 30 June 30
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CONSOLIDATED SUMMARY OF INCOME 1998 1997 1998 1997
- ------------------------------ ------ ------ ------ ------
(Unaudited) (Unaudited) (Unaudited) (Unaudited)
<S> <C> <C> <C> <C>
Sales $230,708 $187,436 $444,652 $367,941
Cost of Sales, incl. development and engineering 131,183 106,289 253,187 210,858
Selling, Service and Administrative 76,919 60,652 146,585 117,985
Amortization of goodwill and related intangibles 2,822 1,904 5,292 3,533
---------- ---------- ---------- ----------
Operating Income 19,784 18,591 39,588 35,565
Interest Expense 9,934 6,193 17,428 11,421
Loss on sale of U.S. RingBinder 3,500 - 3,500 -
Other (income) expense, net (239) 380 245 840
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Income before Taxes 6,589 12,018 18,415 23,304
Income Taxes 2,872 4,807 7,602 9,321
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Net Income $ 3,717 $ 7,211 $ 10,813 $ 13,983
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Net Income per Share (Basic) $0.24 $0.46 $0.69 $0.89
Net Income per Share (Diluted) $0.23 $0.45 $0.68 $0.88
Avg. Common Shares Outs. (Basic) 15,711 15,764 15,736 15,763
Avg. Common Shares Outs. (Diluted) 15,874 15,881 15,876 15,904
June 30, December 31,
BALANCE SHEET SUMMARY 1998 1997
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(Unaudited)
Assets
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Current Assets:
Cash and Equivalents $ 2,570 $ 3,753
Receivables, net 173,264 160,787
Inventories 170,970 143,569
Other 43,347 19,636
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Total Current Assets 390,151 327,745
Plant and Equipment, net 124,210 113,421
Other Assets 357,739 251,748
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TOTAL ASSETS $ 872,100 $ 692,914
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LIABILITIES AND STOCKHOLDERS' EQUITY
- ------------------------------------
Current Liabilities:
Notes Payable and Current Maturities $ 38,769 $ 40,969
Accounts Payable 39,278 42,979
Accrued Liabilities 73,866 68,154
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Total Current Liabilities 151,913 152,102
Long-Term Debt less Current Maturities 498,245 324,070
Other Long-term Liabilities 13,267 11,368
Deferred Taxes 13,856 14,331
Total Stockholders' Equity 194,819 191,043
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TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY $ 872,100 $ 692,914
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