United States Securities and Exchange Commission
Washington, D.C. 20549
FORM 10-Q
(Mark One)
(x) QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934
For the quarterly period ended June 30, 1997
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 number 1-6352
JOHN H. HARLAND COMPANY
(Exact name of registrant as specified in its charter)
GEORGIA 58-0278260
(State or other jurisdiction of (I.R.S. Employer Identification No.)
incorporation or organization)
2939 Miller Rd.
Decatur, Georgia 30035
(Address of principal executive offices) (Zip code)
(770) 981-9460
(Registrant's telephone number, including area code)
(Not Applicable)
(Former name, former address and former fiscal year, if changed since last
report.)
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 requirements for the past 90 days. Yes (X) No ( ).
The number of shares of the Registrant's Common Stock outstanding on July
31, 1997 was 30,962,736.
<PAGE>
Item 1. FINANCIAL STATEMENTS
<TABLE>
JOHN H. HARLAND COMPANY AND SUBSIDIARIES
CONDENSED CONSOLIDATED BALANCE SHEETS
<CAPTION>
ASSETS
- ------
June 30, June 30,
(In thousands) 1997 1996
- ---------------------------------------------------------------------
(Unaudited)
<S> <C> <C>
CURRENT ASSETS:
Cash and cash equivalents $ 8,533 $ 22,548
Accounts receivable 66,276 69,814
Inventories 24,861 35,408
Deferred income taxes 10,783 13,830
Other 14,811 9,394
---------- ----------
Total current assets 125,264 150,994
---------- ----------
INVESTMENTS AND OTHER ASSETS:
Assets held for disposal 19,755 35,141
Investments 5,975 8,358
Goodwill and intangibles-net 120,070 133,911
Deferred income taxes 15,614 21,751
Other 31,320 17,381
---------- ----------
Total investments and other assets 192,734 216,542
---------- ----------
PROPERTY, PLANT AND EQUIPMENT 222,274 209,488
Less accumulated depreciation
and amortization 122,675 115,528
---------- ----------
Property, plant and equipment - net 99,599 93,960
---------- ----------
Total $ 417,597 $ 461,496
========== ==========
<FN>
See Notes to Condensed Consolidated Financial Statements.
</TABLE>
<PAGE>
<TABLE>
JOHN H. HARLAND COMPANY AND SUBSIDIARIES
CONDENSED CONSOLIDATED BALANCE SHEETS
LIABILITIES AND SHAREHOLDERS' EQUITY
- ------------------------------------
<CAPTION>
June 30, June 30,
(In thousands, except share amounts) 1997 1996
- ---------------------------------------------------------------------
(Unaudited)
<S> <C> <C>
CURRENT LIABILITIES:
Short-term debt $ 15,041 $ 66,750
Accounts payable - trade 27,084 21,941
Deferred revenues 24,225 26,308
Accrued liabilities:
Salaries, wages and employee benefits 17,584 19,398
Restructuring costs 8,433 7,960
Taxes 1,972 5,670
Other 9,761 11,943
---------- ----------
Total current liabilities 104,100 159,970
---------- ----------
LONG-TERM LIABILITIES:
Long-term debt, less current maturities 109,380 115,087
Other 14,078 20,424
---------- ----------
Total long-term liabilities 123,458 135,511
---------- ----------
Total liabilities 227,558 295,481
---------- ----------
SHAREHOLDERS' EQUITY:
Series preferred stock, authorized 500,000
shares of $1.00 par value, none issued
Common stock - authorized 144,000,000
shares of $1.00 par value,
37,907,497 shares issued 37,907 37,907
Additional paid-in capital 1,802 1,971
Foreign exchange translation adjustments (89) 54
Retained earnings 323,291 303,276
---------- ----------
Total shareholders' equity 362,911 343,208
Less 6,944,761 and 7,135,199 shares of
treasury stock - at cost 172,872 177,193
---------- ----------
Shareholders' equity - net 190,039 166,015
---------- ----------
Total $ 417,597 $ 461,496
========== ==========
<FN>
See Notes to Condensed Consolidated Financial Statement
</TABLE>
<PAGE>
<TABLE>
JOHN H. HARLAND COMPANY AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS AND RETAINED EARNINGS
FOR THE THREE AND SIX MONTH PERIODS ENDED JUNE 30, 1997 AND 1996
(Unaudited)
<CAPTION>
THREE MONTHS ENDED SIX MONTHS ENDED
(In thousands, except JUNE 30, JUNE 30,
per share amounts) 1997 1996 1997 1996
- --------------------------------------------------------------------------
<S> <C> <C> <C> <C>
NET SALES $ 139,691 $ 149,645 $ 278,958 $ 301,892
---------- ---------- ---------- ----------
COST AND EXPENSES:
Cost of sales 81,802 79,909 161,291 164,901
Selling, general and
administrative expenses 43,134 43,186 85,309 87,566
Amortization of intangibles 3,501 3,710 7,419 8,357
Restructuring charge (53) 92,483 2,681 94,054
Acquired in-process research
and development cost 7,973 7,973
---------- ---------- ---------- ----------
Total 128,384 227,261 256,700 362,851
---------- ---------- ---------- ----------
INCOME(LOSS)FROM
OPERATIONS 11,307 (77,616) 22,258 (60,959)
---------- ---------- ---------- ----------
OTHER INCOME(EXPENSE):
Interest expense (2,177) (2,551) (4,597) (4,776)
Other - net 2,139 916 1,978 897
---------- ---------- ---------- ----------
Total (38) (1,635) (2,619) (3,879)
---------- ---------- ---------- ----------
INCOME(LOSS)BEFORE
INCOME TAXES 11,269 (79,251) 19,854 (64,838)
INCOME TAXES 4,676 (28,188) 8,239 (22,221)
---------- ---------- ---------- ----------
NET INCOME(LOSS) 6,593 (51,063) 11,615 (42,617)
RETAINED EARNINGS AT
BEGINNING OF PERIOD 319,017 362,172 316,315 361,554
---------- ---------- ---------- ----------
325,610 311,109 327,930 318,937
Cash dividends (2,319) (7,833) (4,639) (15,661)
---------- ---------- ---------- ----------
RETAINED EARNINGS AT END
OF PERIOD $ 323,291 $ 303,276 $ 323,291 $ 303,276
========== ========== ========== ==========
WEIGHTED AVERAGE SHARES
OUTSTANDING 30,997 30,862 31,126 30,709
========== ========== ========== ==========
NET INCOME(LOSS)PER
COMMON SHARE $ .21 $ (1.66) $ 0.38 $ (1.38)
========== ========== ========== ==========
CASH DIVIDENDS PER COMMON
SHARE $ .075 $ .255 $ .15 $ .51
========== ========== ========== ==========
<FN>
See Notes to Condensed Consolidated Financial Statements.
</TABLE>
<PAGE>
<TABLE>
JOHN H. HARLAND COMPANY AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
FOR THE SIX MONTH PERIODS ENDED JUNE 30, 1997 AND 1996
(Unaudited)
<CAPTION>
(In thousands) 1997 1996
- -----------------------------------------------------------------------------
<S> <C> <C>
OPERATING ACTIVITIES:
Net Income(Loss) $ 11,615 $ (42,617)
Adjustments to reconcile net income(loss) to
net cash provided by operating activities:
Depreciation and amortization 19,697 21,404
Provision for restructuring charge 90,481
Acquired in-process research and development cost 7,973
(Gain)loss on sale of assets (1,650) 639
Other 2,159 1,081
Change in assets and liabilities:
Deferred income taxes 7,493 (39,302)
Accounts receivable 3,320 (490)
Inventories and other current assets 3,838 6,486
Accounts payable and accrued expenses (12,792) 5,041
---------- ---------
Net cash provided by operating activities 33,680 50,696
---------- ---------
INVESTING ACTIVITIES:
Purchases of property, plant and equipment (16,189) (15,626)
Proceeds from sale of property, plant and equipment 13,071 652
Payment for acquisition of businesses,
net of cash acquired (34,575)
Long-term investments and other assets - net (7,960) (9,600)
---------- ---------
Net cash used in investing activities (11,078) (59,149)
---------- ---------
FINANCING ACTIVITIES:
Issuance of treasury stock 2,767 2,662
Dividends paid (4,639) (15,661)
Repurchase of common stock (1,979)
Short-term debt - net (28,047) 31,750
Long-term debt - net (4,000)
Other - net (838) (612)
---------- ----------
Net cash (used in)provided by financing activities (36,736) 18,139
---------- ----------
Net (decrease)increase in cash and cash equivalents (14,134) 9,686
Cash and cash equivalents at beginning of period 22,667 12,862
---------- ----------
Cash and cash equivalents at end of period $ 8,533 $ 22,548
========== ==========
<FN>
See Notes to Condensed Consolidated Financial Statements.
</TABLE>
<PAGE>
JOHN H. HARLAND COMPANY AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
JUNE 30, 1997
(Unaudited)
1. Basis of Presentation
The condensed consolidated financial statements contained in this
report are unaudited but reflect all adjustments, consisting only of
normal recurring accruals, which are, in the opinion of management,
necessary for a fair presentation of the results of operations,
financial position and cash flows of the John H. Harland Company and
subsidiaries (the "Company") for the interim periods reflected.
Certain information and note disclosures normally included in
financial statements prepared in accordance with generally accepted
accounting principles have been omitted pursuant to applicable rules
and regulations of the Securities and Exchange Commission. The results
of operations for the interim period reported herein are not
necessarily indicative of results to be expected for the full year.
2. Accounting Policies
The condensed consolidated financial statements included herein should
be read in conjunction with the consolidated financial statements and
notes thereto, and the Independent Auditors' Report included in the
Company's Annual Report on Form 10-K for the fiscal year ended
December 31, 1996. Reference is made to the accounting policies of the
Company described in the notes to consolidated financial statements
included in such Form 10-K. The Company has consistently followed
those policies in preparing this report.
3. Restructuring Charge
In April 1996, the Company announced plans to consolidate its core
printing plants into a network of regional facilities over a two-year
period. As part of this strategy, the Company recorded pretax charges
of $92.5 million in the second quarter of 1996 and incurred costs of
$1.6 million in the first quarter of 1996. The 1996 restructuring
charge related to costs of consolidation of manufacturing operations,
including severance and associated revaluation of assets, and
valuation adjustments related to discontinuing certain subsidiary
product lines. The pre-tax restructuring charge for the six months
ended June 30, 1996 includes the following (in thousands):
- -------------------------------------------------------------------
Write down of equipment and facilities $ 45,132
Write down of intangibles 23,198
Employee severance 17,943
Other 7,781
----------
Total $ 94,054
==========
The Company recorded additional severance payments of $1.2 million and
$3.9 million for the three-month and six-month periods ended June 30,
1997, respectively. In addition, during the second quarter of 1997,
the Company reversed severance charges totaling $1.2 million recorded
in 1996, which will not be paid due to the decision to retain certain
employees and operations. Management expects to incur additional
charges in 1997 and 1998, predominantly related to employee severance.
As part of this restructuring, certain assets, predominantly land,
buildings and equipment at the facilities to be closed, with a
carrying value of approximately $19.8 million are being held for sale.
<PAGE>
The Company generally expects to sell these assets within one year of
the related facility being closed.
4. Acquisition
In May 1996, the Company acquired OKRA Marketing Corporation. The
following represents the unaudited pro forma results of operations
which assume the acquisition occurred on January 1, 1996. These
results include certain adjustments, primarily increased amortization
expense related to intangible assets, one-time expenses and increased
interest expense (in thousands, except per share amounts):
Six months ended
June 30, 1996
- ---------------------------------------------------------------------
Net sales $ 307,571
Net loss 36,525
Net loss per common share 1.18
The pro forma financial information presented above does not purport
to be indicative of either the results of operations that would have
occurred had the acquisition taken place on January 1, 1996 or of
future consolidated results of operations.
5. Accounting for Income Taxes
The provision(benefit) for income taxes for the six months ended June
30, 1997 and 1996 includes the following (in thousands):
1997 1996
- ----------------------------------------------------------------------
Current provision $ 6,277 $ 15,193
Deferred provision(benefit) 1,962 (37,414)
---------- ----------
Total $ 8,239 $ (22,221)
========== ==========
6. Inventories
Inventories consist of the following (in thousands):
June 30, December 31,
1997 1996
- ---------------------------------------------------------------------
Raw materials and semi-finished goods $ 19,985 $ 28,190
Finished goods 2,304 2,770
Hardware component parts 2,572 2,504
-------- --------
Total $ 24,861 $ 33,464
======== ========
<PAGE>
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION
AND RESULTS OF OPERATIONS
RESULTS OF OPERATIONS
Second Quarter 1997 compared with Second Quarter 1996
Consolidated net sales for the second quarter of 1997 decreased $10.0
million or 6.7% as compared to the second quarter of 1996. The
Company's Financial Services ("FS") segment sales decreased $11.9
million or 9.1% from the 1996 period. The revenue decrease reflects
the previously disclosed loss of certain financial institution
contracts and the continued wind down of the Company's direct check
operations. In August 1996, the Company entered into a long-term
contract with a direct mail check supplier, which helped offset a
reduction in unit volumes. Although revenue per unit from the contract
is lower than average revenue per unit, the costs to produce these
units are also lower. Revenues from FS's marketing services, which
includes database marketing, decision support and loan compliance
services, increased 2.0% over 1996. Scantron's sales increased by $1.9
million or 9.7% over the 1996 period, due to increases in its core
data collection products and services.
Consolidated gross profit decreased by 17.0% and decreased as a
percentage of sales from 46.6% in 1996 to 41.4% in 1997. Competitive
pricing, a reduction in unit volume and transition costs associated
with rebuilding the Company's printing infrastructure negatively
impacted FS's margins in comparison to 1996. Transition costs included
redundant expenses related to customer service, plant closings and
employee relocations and increased hiring and training costs relating
to the opening of regional facilities. Scantron's gross margin
increased from 42.8% in 1996 to 45.4% in 1997 largely due to
improvements in core products and field services.
Consolidated selling, general and administrative expenses increased as
a percentage of sales from 28.9% in 1996 to 30.9% in 1997. Components
of this increase were costs related to the Company's transition from a
checks and forms printer to a financial marketing services provider,
including costs relating to restructuring the sales and account
management organization and to updating the Company's internal systems
and processes. These increases were partially offset by reduced
marketing expenses relating to the Company's direct check operations.
Charges totaling $92.5 million and $8 million which related to
restructuring and in-process research and development, respectively,
were recorded in the second quarter of 1996. These costs reflect the
Company's plans for plant consolidation and other strategic decisions
related to product development. In the second quarter of 1997, the
Company incurred additional restructure-related charges of $1.2
million relating to severance and reversed $1.2 million of the 1996
charge, relating to retaining certain employees (see note 3 to the
Condensed Consolidated Financial Statements).
The Company's consolidated effective income tax rate for the second
quarter of 1997 was 41.5% compared to 35.6% in 1996. The lower
effective tax rate and associated tax benefit in the second quarter of
1996 were primarily due to the effects of the restructuring charge and
non-deductible acquired in-process research and development charge.
The Company reported net income of $6.6 million or $0.21 per share for
the second quarter of 1997, compared to a net loss of $51.1 million,
or $1.66 per share in the 1996 quarter. Earnings per share for the
second quarter of 1996 were reduced by the charges related to
restructuring and the acquired in-process research and development
discussed previously by $1.80 and $2.06, respectively.
<PAGE>
Year to Date 1997 compared with Year to Date 1996
Consolidated net sales for the six month period ended June 30, 1997
decreased $23.0 million or 7.6% as compared to the same period in
1996. The revenue decrease reflects the loss of certain financial
institution contracts and the wind down of the Company's direct check
operations. In August 1996, the Company entered into a long-term
contract with a direct mail check supplier, which helped offset a
reduction in unit volumes. Although revenue per unit from the contract
is lower than average revenue per unit, the costs to produce these
units are also lower. Revenues from FS's marketing services, which
includes database marketing, decision support and loan compliance
services, increased 7.5% over 1996. The increase was due primarily to
the acquisition of OKRA Marketing on May 31, 1996. Scantron's sales
increased by $2.1 million or 4.9% over the 1996 period largely due to
increased sales of data collection products.
Consolidated gross profit decreased by 14.1% and decreased as a
percentage of sales from 45.4% in 1996 to 42.2% in 1997. Competitive
pricing, a reduction in unit volume and transition costs associated
with rebuilding the Company's printing infrastructure negatively
impacted FS's margins in comparison to 1996. The transition costs
include redundant expenses related to customer service, plant
closings, employee relocations and increased hiring and training costs
relating to the regional facilities. Scantron's gross margin increased
from 43.1% in 1996 to 45.3% in 1997.
Consolidated selling, general and administrative expenses increased as
a percentage of sales from 29.0% in 1996 to 30.6% in 1997 due to costs
related to the Company's transition to a financial marketing services
provider. These included costs related to restructuring the sales and
account management workforces and increased expenses relating to
information technologies, offset by reduced marketing expenses from
the Company's direct check operations.
Charges totaling $94.1 million and $8 million which related to
restructuring and acquired in-process research and development,
respectively, were recorded in the six months ended June 30, 1996.
These costs reflect the Company's plans for plant consolidation and
new product strategies. In the six months ended June 30, 1997, the
Company incurred additional restructuring-related charges of $3.9
million relating to severance and reversed $1.2 million of the 1996
charge (see note 3 to the Condensed Consolidated Financial
Statements.)
The Company's consolidated effective income tax rate for the first six
months of 1997 was 41.5% compared to 34.3% for the same period in
1996. The lower effective tax rate and associated tax benefit in 1996
were primarily due to the effects of the restructuring charge, the
non-deductible acquired in-process research and development charge and
non-deductible amortization of intangibles.
The Company reported net income for the first six months of 1997 of
$11.6 million, or $0.38 per share compared to a net loss of $42.6
million or $1.38 per share for the same period in 1996. Restructuring
charges for the six months ended June 30, 1996 reduced earnings per
share by $1.83, while the acquired in-process research and development
charge had a negative impact of $0.26 per share.
FINANCIAL CONDITION, CAPITAL RESOURCES AND LIQUIDITY
Cash flows provided by operating activities in the first six months of
1997 were $33.7 million compared to $50.7 million in 1996. The primary
uses of funds in the first six months of 1997 were for the reduction
of short-term borrowings, capital expenditures and dividends paid to
the Company's shareholders. Expenditures for property, plant and
<PAGE>
equipment totaled $16.2 million in the first six months of 1997,
compared to $15.6 million for the same period in 1996. In addition the
Company generated $13.1 million from the sale of property, plant and
equipment in the first six months of 1997.
In April 1997, the Company's board of directors authorized the
repurchase of up to 1.5 million shares of the Company's outstanding
common stock. In May 1997, the Company paid $2.0 million to repurchase
100,000 shares.
The Company has unsecured lines of credit which provide for borrowings
up to $111.0 million. In the first six months of 1997, the Company
reduced its short-term debt by $28.0 million and at June 30, 1997,
$15.0 million was outstanding under these lines of credit, compared to
$66.8 million as of June 30, 1996. In January 1996, the Company paid a
$12 million note related to the acquisition of dataPRINT.
On June 30, 1997, the Company had $8.5 million in cash and cash
equivalents. The Company believes that its current cash position,
funds from operations and the availability of funds under its lines of
credit will be sufficient to meet anticipated requirements for working
capital, dividends, capital expenditures and other corporate needs.
The Company also believes that it possesses sufficient unused debt
capacity and access to debt and equity capital markets to pursue
additional acquisition opportunities.
OUTLOOK
The Company is progressing through its initiative to improve service
and to increase the profitability of its check printing business by
standardizing products and pricing, centralizing and outsourcing
customer service and consolidating its manufacturing operations, a
program which started in the second quarter of 1996. The Company has
combined various sales and marketing functions into a multi-product
organization focused on serving the financial institution market. This
unit offers an integrated product line of marketing decision support,
direct marketing, print and delivery systems under the Harland brand.
Future plans include developing and acquiring new technology and
businesses to enhance this product line.
The Company has entered into a long-term agreement with APAC
Teleservices, Inc. ("APAC"), to operate two state-of-the-art call
centers for centralized customer service for its check printing
operations. As of June 30, 1997, all of the customer service
functions previously conducted in the Company's imprint plants had
been migrated to APAC's call centers.
The Company will continue to consolidate its core printing plants into
a network of regional facilities and incorporate advanced
manufacturing technology and systems into this network. All but ten of
the plants scheduled for consolidation are anticipated to close by the
end of 1997, with the balance to close in 1998. Management expects to
incur future restructuring charges, predominantly related to employee
severance.
The Company may make further purchases of its common stock in cash on
the open market or in private transactions, which will be funded
through working capital and/or short-term borrowings. Shares held
under its repurchase program will be held in treasury, used for
acquisitions, used to finance the Company's employee benefits programs
or for other corporate purposes.
<PAGE>
RISK FACTORS AND CAUTIONARY STATEMENTS
When used in this Form 10-Q and in subsequent filings by the Company
with the Securities and Exchange Commission, in the Company's press
releases and in written or oral statements made by authorized
representatives of the Company, the words or phrases "should result,"
"are expected to," "will continue," "will approximate," "is
anticipated," "estimate," "project" or similar expressions are
intended to identify "forward-looking statements" within the meaning
of the Private Securities Litigation Reform Act of 1995. These
statements are necessarily subject to certain risks and uncertainties,
including those discussed below, that could cause actual results to
differ materially from the Company's historical experience and its
present expectations or projections. Caution should be taken not to
place undue reliance on any such forward-looking statements, which
speak only as of the date such statements are made. The Company does
not undertake and specifically declines any obligation to publicly
release the result of any revisions which may be made to any forward-
looking statements to reflect events or circumstances occurring after
the date of such statements or to reflect the occurrence of
unanticipated events.
Various factors may affect the Company's financial performance,
including those discussed below, and could cause the Company's actual
results for future periods to differ from any opinions or statements
expressed with respect thereto. Such differences could be material and
adverse.
With regard to the rebuilding of the Company's print infrastructure,
there can be no assurances that the printing plant consolidation and
the centralization and outsourcing of customer service will occur
within the projected time frame or will result in the anticipated
quality improvements or projected costs savings. Many variables, such
as the ability to hire and train employees at the Company's regional
facilities, the development of new technology and information systems
used in the Company's production operations and the amount and timing
of transition costs, may impact the anticipated results.
Check revenues could be negatively impacted by the continuing
expansion of alternative payment systems such as credit cards, debit
cards, and other forms of electronic commerce or on-line payment
systems. Check revenues could also be adversely affected by
competitive check pricing and by the continuing consolidation of
financial institutions.
While the Company believes substantial growth opportunities exist in
Marketing Services, specifically in Decision Support software and
Direct Marketing, there can be no assurances that the Company will
achieve its growth targets. There are many variables relating to the
development of the next generation Decision Support software,
including the timing and costs of the development effort, the
viability of the product, product acceptance and competition. Also,
no assurance can be made as to the Company's ability to expand its
Direct Marketing business and meet projected growth targets.
From time to time, authorized representatives of the Company may make
predictions or forecasts regarding the Company's future results,
including estimated earnings. Any such forecast reflects various
assumptions which are subject to significant uncertainties, many of
which may prove to be incorrect. Further, the achievement of any
forecast depends on numerous factors, many of which are beyond the
Company's control. As a result, there can be no assurance that the
Company's performance will be consistent with any management forecasts
or that the variation from such forecasts may not be material and
adverse. Accordingly, investors are cautioned not to base their entire
analysis of the Company's business and prospects upon isolated
predictions, but instead are encouraged to utilize the entire
available mix of historical and forward-looking information when
evaluating the Company.
In addition, authorized representatives of the Company may
occasionally comment on published projections by independent analysts
regarding the Company's future performance. Such comments should not
be interpreted as an endorsement or adoption of any given estimate or
range of estimates or the assumptions and methodologies upon which
such estimates are based. The Company expressly disclaims any
continuing responsibility to advise analysts or the public markets of
its view regarding the current accuracy of the published estimates of
outside analysts. Persons relying on such estimates should pursue
their own independent investigation and analysis of their accuracy and
the reasonableness of the assumptions on which they are based.
Generally speaking, the Company does not make public its own internal
projections, budgets or estimates. Undue reliance should not be placed
on any comments regarding the differences between such independent
estimates and the Company's own expectations regarding its future
operations. The methodologies employed by the Company in arriving at
its own internal projections and the approaches taken by independent
analysts in making their estimates may differ in many significant
respects. Although the Company may presently perceive a given estimate
to be reasonable, changes in the Company's business, market conditions
or the general economic climate may materially impact the results
obtained through the use of differing analyses and assumptions.
RECENTLY ISSUED ACCOUNTING PRONOUNCEMENTS
In June 1997, the Financial Accounting Standards Board issued Statement of
Financial Accounting Standard No. 130, "Reporting Comprehensive Income"
("SFAS 130") and issued Statement of Financial Accounting Standard No. 131,
"Disclosures about Segments of an Enterprise and Related Information"
("SFAS 131"). SFAS 130 establishes standards for the reporting and
displaying of comprehensive income and its components (revenues, expenses,
gains, and losses) in a full set of general-purpose financial statements.
SFAS 131 establishes standards for the way that public business enterprises
report information about operating segments in annual financial statements
and requires that those enterprises report selected information about
operating segments in interim financial reports issued to shareholders. The
Company plans to adopt SFAS 130 and SFAS 131 in 1998. Management does not
expect SFAS 130 or SFAS 131 to have a significant impact on the
consolidated financial statements.
<PAGE>
PART II. OTHER INFORMATION
===========================
Item 4. Submission of Matters to a Vote of Security Holders
(a) The Annual Meeting of Shareholders of the Company was held on
April 25, 1997, in Atlanta, GA. There was no solicitation in
opposition to management's nominees for Directors as listed in
the Proxy Statement and all such nominees were elected.
(c) Below is a brief description of matters voted on at the Annual
Meeting and the results of the voting:
Election of Directors:
Edward J. Hawie
Voting for 25,979,789
Withhold authority 546,836
G. Harold Northrop
Voting for 26,378,662
Withhold authority 147,963
Robert A. Yellowlees
Voting for 26,371,754
Withhold authority 154,871
To ratify the appointment of Deloitte & Touche LLP as the Company's
independent certified public accountants for the year ending December
31, 1997:
Voting for 26,385,183
Voting against 68,720
Voting abstain 72,722
<PAGE>
Item 6. Exhibits and Reports on Form 8-K.
a) Exhibits
Reference No. Description of Exhibit
- ----------------------------------------------------------------
27 Financial Data Schedule
(b) Reports on Form 8-K
There were no reports filed on Form 8-K for the three months ended June
30, 1997.
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.
JOHN H. HARLAND COMPANY
(Registrant)
August 14, 1997 William M. Dollar
Date: _________________ By:_____________________________
William M. Dollar
Vice-President, Finance and
Treasurer
(Principal Accounting Officer)
August 14, 1997 S. David Passman III
Date: _________________ By:_____________________________
S. David Passman III
Senior Vice-President and
Chief Financial Officer
(Principal Financial Officer)
<PAGE>
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
This schedule contains summary financial information extracted from the
Company's financial statements for the six months ended June 30, 1997 and is
qualified in its entirety by reference to such financial statements.
</LEGEND>
<MULTIPLIER> 1,000
<S> <C>
<PERIOD-TYPE> 6-MOS
<FISCAL-YEAR-END> DEC-31-1996
<PERIOD-END> JUN-30-1997
<CASH> 8,533
<SECURITIES> 0
<RECEIVABLES> 69,060
<ALLOWANCES> 2,784
<INVENTORY> 24,861
<CURRENT-ASSETS> 125,264
<PP&E> 222,274
<DEPRECIATION> 122,675
<TOTAL-ASSETS> 417,597
<CURRENT-LIABILITIES> 104,100
<BONDS> 109,380
<COMMON> 37,907
0
0
<OTHER-SE> 152,132
<TOTAL-LIABILITY-AND-EQUITY> 417,597
<SALES> 278,958
<TOTAL-REVENUES> 278,958
<CGS> 161,291
<TOTAL-COSTS> 161,291
<OTHER-EXPENSES> 0
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 4,597
<INCOME-PRETAX> 19,854
<INCOME-TAX> 8,239
<INCOME-CONTINUING> 11,615
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 11,615
<EPS-PRIMARY> .38
<EPS-DILUTED> .38
</TABLE>
