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Previous: ALASKA AIRLINES INC, 10-Q, 1996-05-01 |
Next: AUL AMERICAN LIFE POOLED EQUITY FUND B, 485BPOS, 1996-05-01 |
Page 1 of 7
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 March 31, 1996
OR
( ) TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE
ACT OF 1934
Commission File Number 0-7163
AMERICAN FILTRONA CORPORATION
(Registrant)
Virginia 54-0574583
(State of incorporation) (I.R.S. employer
identification no.)
3951 WESTERRE PARKWAY, SUITE 300
RICHMOND, VIRGINIA 23233
(Executive offices) (Zip code)
Registrant's telephone number: 804-346-2400
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 at least the past 90 days. Yes. X No.
Number of shares of common stock outstanding as of May 1, 1996: 3,740,301
-1-
AMERICAN FILTRONA CORPORATION
INDEX
Page No.
Part I. Financial Information
Condensed Consolidated Balance Sheet 3
Condensed Consolidated Statement of Income 4
Condensed Consolidated Statement of Cash Flows 5
Notes to Condensed Consolidated Financial
Statements 5
Management's Discussion and Analysis of
Financial Statements 6
Part II. Other Information 7
Signatures 7
-2-
PART I. FINANCIAL INFORMATION
AMERICAN FILTRONA CORPORATION
CONDENSED CONSOLIDATED BALANCE SHEET
March 31, 1996 (Unaudited) and December 31, 1995
<TABLE>
<CAPTION>
1996 1995
----------- -----------
ASSETS
<S> <C> <C>
Current assets
Cash and equivalents $ 34,999,123 $ 34,965,864
Accounts receivable 22,215,423 19,003,632
Inventories 17,914,224 19,666,392
Prepaid expenses 1,529,175 1,498,975
------------ ------------
Total current assets 76,657,945 75,134,863
Property, plant and equipment 25,385,881 25,316,307
Other assets
Excess cost over net assets of businesses acquired 5,003,008 5,096,827
Notes receivable 2,434,843 2,434,843
Other assets 256,063 282,767
------------ ------------
7,693,914 7,814,437
------------ ------------
$109,737,740 $108,265,607
============ ============
LIABILITIES AND SHAREHOLDERS' EQUITY
Current liabilities
Accounts payable $ 13,885,114 $ 14,905,395
Accrued expenses 4,290,561 4,929,522
Income taxes 2,298,895 1,054,216
------------ ------------
Total current liabilities 20,474,570 20,889,133
Other liabilities
Notes payable 650,000 650,000
Deferred income taxes (86,424) 159,147
Other liabilities 1,820,112 1,742,599
------------ ------------
2,383,688 2,551,746
Shareholders' equity
Common stock, $1 par value 3,739,101 3,735,392
Additional capital 821,400 758,190
Retained earnings 83,185,877 81,342,934
Cumulative translation adjustment (866,896) (1,011,788)
------------ ------------
86,879,482 84,824,728
------------ ------------
$109,737,740 $108,265,607
============ ============
</TABLE>
-3-
AMERICAN FILTRONA CORPORATION
CONDENSED CONSOLIDATED STATEMENT OF INCOME
Three-Month Periods Ended March 31, 1996 and 1995
(Unaudited)
1996 1995
----------- ------------
Revenues
Net sales $47,700,214 $44,632,733
Investment income 329,985 290,573
----------- -----------
48,030,199 44,923,306
Costs and expenses
Cost of products sold 38,459,662 35,808,297
Selling, research,
administrative and
general 5,187,476 5,293,742
----------- -----------
43,647,138 41,102,039
----------- -----------
Income before income taxes 4,383,061 3,821,267
Income taxes 1,550,000 1,375,000
----------- -----------
Net income $ 2,833,061 $ 2,446,267
=========== ===========
Average shares outstanding 3,737,391 3,736,044
Earnings per share $ .76 $.65
Dividends per share $.265 $.25
-4-
AMERICAN FILTRONA CORPORATION
CONDENSED CONSOLIDATED STATEMENT OF CASH FLOWS
Three-Month Periods Ended March 31, 1996 and 1995
(Unaudited)
<TABLE>
<CAPTION>
1996 1995
----------- -----------
<S> <C> <C>
Operating
Net income $ 2,833,061 $ 2,446,267
Reconciling items
Depreciation and amortization 1,515,984 1,504,452
Deferred income taxes (245,571) (12,000)
(Decrease) from noncash working capital (1,904,386) (2,201,822)
Other - net 145,656 34,116
----------- -----------
2,344,744 1,771,013
Investing
Acquisitions of property, plant and equipment (1,388,286) (944,446)
Financing
Issuance of common stock 87,900 34,075
Repurchase of common stock (20,981) (138,125)
Dividends paid (990,118) (934,485)
----------- -----------
(923,199) (1,038,535)
----------- -----------
Net increase (decrease) in cash and equivalents $ 33,259 $ (211,968)
=========== ===========
</TABLE>
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
NOTE A. BASIS OF PRESENTATION
The accompanying unaudited condensed consolidated financial statements include
all adjustments (consisting only of normal recurring accruals) which the Company
considers necessary to present fairly the financial position, results of
operations, and cash flows for the interim periods.
The results of operations for the three-month period ended March 31, 1996 are
not necessarily indicative of the results to be expected for the entire year.
The financial statements have been prepared in accordance with instructions to
Form 10-Q and, therefore, do not include all information and notes necessary for
a fair presentation in conformity with generally accepted accounting principles.
For additional information regarding significant accounting policies and other
financial data see the Company's December 31, 1995 Form 10-K.
-5-
NOTE B. INVENTORIES
At March 31, 1996 and December 31, 1995 inventories consisted of (in thousands):
1996 1995
------- -------
FIFO
Finished products $ 9,805 $ 8,886
Work in process 1,295 1,408
Raw materials 9,247 11,622
------- -------
20,347 21,916
Less excess of FIFO over LIFO
inventory value 2,433 2,250
------- -------
$17,914 $19,666
======= =======
Inventories stated at LIFO approximated $9,364 (1995 - $10,559).
MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL STATEMENTS
BALANCE SHEET
The Company's strong financial condition and liquidity were maintained in the
1996 first quarter. Cash and equivalents represented 32% of total assets at
March 31, 1996 and December 31, 1995. The ratio of current assets to current
liabilities was 3.7 at March 31, 1996 compared to 3.6 at December 31, 1995.
INCOME STATEMENT
Comparison Between Three-Month Periods Ended March 31, 1996 and 1995
Net sales increased 7% between the first quarters of each year. The bonded
fibers segment had modest growth as a solid increase in tobacco filters was
partially offset by softness in writing instrument and medical diagnostic test
kit components. The plastic products segment growth was led by the Canadian
flexible packaging company with a smaller increase by the plastic extrusion
companies. Investment income increased 14% between the first quarters primarily
as a result of the higher level of investments.
Costs and expenses increased 6%. Cost of products sold increased at about the
same rate as sales. Selling, research, administrative and general expenses
decreased slightly.
Bonded fibers segment operating earnings decreased from an exceptionally strong
1995 first quarter because a shift in the mix of products sold resulted in lower
operating margins. The plastic products segment posted substantially increased
operating earnings that more than offset the decline by bonded fibers
demonstrating the benefit of the Company's diversity. Overall performance of the
plastic extrusion companies was very strong and the Canadian flexible packaging
company had a very modest loss compared to the large loss in 1995's first
quarter. The combination of these factors produced a 15% increase in pretax
income.
Income taxes increased 13% reflecting the higher level of income partially
offset by a slightly lower estimate of the effective tax rate for 1996.
Therefore, net income and related earnings per share increased by 16% and 17%.
-6-
PART II. OTHER INFORMATION
Item 6. Exhibits and Reports on Form 8-K
(b) Reports on Form 8-K -- There were no reports on Form 8-K filed for the
three months ended March 31, 1996.
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.
AMERICAN FILTRONA CORPORATION
(Registrant)
Date May 1, 1996 /s/ John D. Barlow, Jr.
John D. Barlow, Jr., Vice President-Finance
(Chief Financial Officer)
-7-
<TABLE> <S> <C>
<ARTICLE> 5
<MULTIPLIER> 1,000
<S> <C>
<PERIOD-TYPE> 3-Mos
<FISCAL-YEAR-END> Dec-31-1996
<PERIOD-END> Mar-31-1996
<CASH> 34,999
<SECURITIES> 0
<RECEIVABLES> 22,650
<ALLOWANCES> 435
<INVENTORY> 17,914
<CURRENT-ASSETS> 76,658
<PP&E> 63,479
<DEPRECIATION> 38,093
<TOTAL-ASSETS> 109,738
<CURRENT-LIABILITIES> 20,475
<BONDS> 650
<COMMON> 3,739
0
0
<OTHER-SE> 83,140
<TOTAL-LIABILITY-AND-EQUITY> 109,738
<SALES> 47,700
<TOTAL-REVENUES> 48,030
<CGS> 38,460
<TOTAL-COSTS> 43,647
<OTHER-EXPENSES> 0
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 0
<INCOME-PRETAX> 4,383
<INCOME-TAX> 1,550
<INCOME-CONTINUING> 2,833
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 2,833
<EPS-PRIMARY> .76
<EPS-DILUTED> .76
</TABLE>
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