AMERICAN BANKNOTE CORP /DE/
10-Q, 1996-08-14
COMMERCIAL PRINTING
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                    SECURITIES AND EXCHANGE COMMISSION
                                     
                            Washington, DC 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 June 30, 1996
                                     
                                    OR
                                     
      ..... TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE 
                     SECURITIES EXCHANGE ACT OF 1934
                                     
           For the quarterly period from _________to _________
                                     
                                     
                     Commission File Number 1-3410  
                                     
                                     
                      AMERICAN BANKNOTE CORPORATION
          (Exact name of Registrant as specified in its charter)

            A Delaware                             I.R.S. Employer
            Corporation                            No. 13-0460520
                                     
                                     
             200 Park Avenue, New York, New York   10166-4999
                                     
                   Telephone - Area Code   212-557-9100



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 for the past 90 days.      Yes  X    No    

At August 12, 1996 - 19,807,380 shares of common stock were outstanding.

<PAGE>
                           AMERICAN BANKNOTE CORPORATION
                                        

                                     FORM 10-Q

                                     I N D E X



                                                                    PAGE
                                                                     NO.
PART I - FINANCIAL INFORMATION

 Item 1.  Financial Statements - Unaudited

      Condensed Consolidated Balance Sheets
        June 30, 1996 and December 31, 1995. . . . . . . . . . .      3

      Condensed Consolidated Statements of Operations. . . . . .      4
        For the six months and second quarter ended
        June 30, 1996 and 1995

      Condensed Consolidated Statements of Cash Flows
        For the six months ended June 30, 1996 and 1995. . . . .      5

      Condensed Consolidated Statement of Stockholders' Equity
        For the six months ended June 30, 1996 . . . . . . . . . .    6

      Notes to Condensed Consolidated Financial Statements . . .      7

 Item 2.  Management's Discussion and Analysis of Financial
          Condition and Results of Operations. . . . . . . . . . .   10

PART II - OTHER INFORMATION 

 Item 1.  Legal Proceedings  . . . . . . . . . . . . . . . . . . .   16

 Item 4.  Submission of Matters to a Vote of Security Holders        16

 Item 6.  Exhibits and Reports on Form 8-K . . . . . . . . . . . .   16

<PAGE>
PART I - FINANCIAL INFORMATION
ITEM 1.  FINANCIAL STATEMENTS
AMERICAN BANKNOTE CORPORATION AND SUBSIDIARIES
CONDENSED CONSOLIDATED BALANCE SHEETS
(Amounts in thousands, except for share data)
<TABLE>
<CAPTION>
                                                           June       December
                                                         30, 1996     31, 1995  
ASSETS                                                  (Unaudited)
<S>                                                       <C>         <C>
Current assets 
  Cash and cash equivalents. . . . . . . . . . . . .      $ 15,022     $ 23,525
  Marketable securities - at market. . . . . . . . .         3,373        2,952
  Accounts receivable, net of allowance for
   doubtful accounts of $951 and $816. . . . . . . .        44,890       32,058
  Other receivables. . . . . . . . . . . . . . . . .         9,046        7,772
  Inventories. . . . . . . . . . . . . . . . . . . .        30,509       23,243
  Deferred income tax benefits . . . . . . . . . . .         6,782        5,983
  Prepaid expenses . . . . . . . . . . . . . . . . .         5,185        4,755
        Total current assets . . . . . . . . . . . .       114,807      100,288

Property, plant and equipment, at cost, 
  net of accumulated depreciation and 
  amortization of $56,115 and $46,915. . . . . . . .       252,045      225,974

Other assets . . . . . . . . . . . . . . . . . . . .        25,018       18,342

Excess of cost of investment in subsidiaries 
  over net assets acquired, net of accumulated 
  amortization of $3,964 and $3,119. . . . . . . . .        85,477       34,798
                                                          $477,347     $379,402

LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities
  Revolving credit payable . . . . . . . . . . . . .      $  1,920
  Current portions of long-term debt . . . . . . . .         7,177     $    332
  Accounts payable and accrued expenses. . . . . . .        61,180       44,983
        Total current liabilities. . . . . . . . . .        70,277       45,315

Long-term debt, net of unamortized discount 
  of $1,064 and $1,120 . . . . . . . . . . . . . . .       265,693      194,156

Other liabilities. . . . . . . . . . . . . . . . . .        19,104       20,181

Deferred income taxes  . . . . . . . . . . . . . . .        54,848       60,579

Minority interest. . . . . . . . . . . . . . . . . .        25,939       18,818
                                                           435,861      339,049
Commitments and Contingencies

Stockholders' equity
  Preferred Stock, authorized 5,000,000 shares,
   no shares issued or outstanding . . . . . . . . .           -           -  
  Common Stock, par value $.01 per share,
   authorized 50,000,000 shares; issued 
   20,088,380 shares and 19,391,763 shares . . . . .           201          194
  Capital surplus. . . . . . . . . . . . . . . . . .        68,238       67,091
  Retained-earnings (deficit). . . . . . . . . . . .       (24,898)     (25,461)
  Treasury stock, at cost (281,000 shares) . . . . .        (1,253)      (1,253)
  Pension liability adjustment . . . . . . . . . . .          (218)        (218)
  Deferred compensation. . . . . . . . . . . . . . .          (484)         -  
  Cumulative currency translation adjustment . . . .          (100)         -  
        Total stockholders' equity . . . . . . . . .        41,486       40,353
                                                          $477,347     $379,402
</TABLE>

 See notes to condensed consolidated financial statements.

<PAGE>
AMERICAN BANKNOTE CORPORATION AND SUBSIDIARIES 
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS - UNAUDITED
(Amounts in thousands, except per share data)

<TABLE>
<CAPTION>
                                              Six                Second  
                                          Months Ended        Quarter Ended
                                            June 30              June 30    
                                        1996      1995       1996      1995 

<S>                                     <C>       <C>         <C>      <C>
Sales  . . . . . . . . . . . . . . . .  $130,681  $ 96,659    $ 70,764 $ 47,591

Costs and expenses
 Cost of goods sold. . . . . . . . . .   88,570     70,098      46,566   38,149
 Selling and administrative  . . . . .   19,228     20,509      10,148   10,561
 Depreciation and amortization . . . .    8,697      6,555       5,156    3,310
                                        116,495     97,162      61,870   52,020

                                         14,186       (503)      8,894   (4,429)
Other (expense) income
 Interest expense. . . . . . . . . .    (12,641)   (11,460)     (6,573)  (5,692)
 Foreign exchange gain
   (losses), net. . . . . . . . . .        (136)        58         (82)     (10)
 Other, net. . . . . . . . . . . . .        380      1,070         569      603
                                        (12,397)   (10,332)     (6,086)  (5,099)

 Income (loss) before taxes. . . . .      1,789    (10,835)      2,808   (9,528)

Income tax charge (benefit). . . . .       (501)      (430)        364       80

 Income (loss) before
    minority interest. . . . . . . .      2,290    (10,405)      2,444   (9,608)

Minority interest. . . . . . . . . .      1,727       -          1,079      -  

 Net Income (Loss) . . . . . . . . .    $   563   $(10,405)    $ 1,365  $(9,608)



Weighted average number of common 
 and common equivalent shares 
 outstanding . . . . . . . . . . . .     20,000     19,070      20,210  19,120

 Net Income (Loss) per share . . . .     $ .03      $(.55)      $ .07   $(.50)

</TABLE>


See notes to condensed consolidated financial statements.

<PAGE>
AMERICAN BANKNOTE CORPORATION AND SUBSIDIARIES 
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS - UNAUDITED
(Amounts in thousands)
<TABLE>
<CAPTION>
                                                           Six Months Ended
                                                               June 30
                                                           1996         1995 
<S>                                                     <C>          <C>
Operating Activities
  Net cash from operations, after adjustments 
     to reconcile net income (loss) to 
     net cash provided by or (used in)
     operating activities. . . . . . . . . . . . . .    $  9,693     $ (5,297)
     Marketable securities . . . . . . . . . . . . .        (650)      (1,321)
     Accounts and other receivables. . . . . . . . .     (10,834)       7,642
     Inventories . . . . . . . . . . . . . . . . . .       1,426        2,564
     Prepaid and other assets. . . . . . . . . . . .        (535)      (1,585)
     Accounts payable and accrued expenses . . . . .      (3,809)      (4,732)
     Other . . . . . . . . . . . . . . . . . . . . .      (3,136)      (3,899)
  Net cash (used in) Operating Activities. . . . . .      (7,845)      (6,628)

Investing Activities
  Acquisition of subsidiary, 
     net of cash acquired. . . . . . . . . . . . . .     (77,266)          -  
  Capital expenditures, net  . . . . . . . . . . . .     (10,964)      (2,062)
  Net cash (used in) Investing Activities. . . . . .     (88,230)      (2,062)
       
Financing Activities
  Acquisition borrowings
     Senior Debt . . . . . . . . . . . . . . . . . .      53,493           -  
     Subordinated Debt . . . . . . . . . . . . . . .      18,383           -  
  Minority shareholder investment. . . . . . . . . .       7,179           -  
  Revolving credit borrowings. . . . . . . . . . . .       1,920           -  
  Other borrowings . . . . . . . . . . . . . . . . .       7,349           -  
  Proceeds from issuance of Common Stock . . . . . .          -            18
  Payment of other long-term
     obligations and other . . . . . . . . . . . . .        (685)        (192)
  Net cash provided by or (used in)
     Financing Activities. . . . . . . . . . . . . .      87,639         (174)

Effect of foreign currency exchange rate 
  changes on cash and cash equivalents . . . . . . .         (67)         (27)

Increase (decrease) in cash 
  and cash equivalents . . . . . . . . . . . . . . .      (8,503)      (8,891)

Cash and cash equivalents - beginning of period. . .      23,525       31,658

Cash and cash equivalents - end of period. . . . . .    $ 15,022    $  22,767


</TABLE>


See notes to condensed consolidated financial statements.
<PAGE>
AMERICAN BANKNOTE CORPORATION AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENT OF STOCKHOLDERS' EQUITY - UNAUDITED
SIX MONTHS ENDED JUNE 30, 1996
(Amounts in thousands)


<TABLE>
<CAPTION>
                                                                               Foreign
                                     Retained              Pension             Currency
                   Common   Capital   Earnings   Treasury  Liab.     Deferred  Transl.   Total
                   Stock    Surplus   (Deficit)  Stock     Adjust.   Compens.  Adjust.   Equity
<C>                <C>      <C>       <C>        <C>       <C>       <C>       <C>       <C>

Balance -
January 1, 1996    $194     $67,091   $(25,461)  $(1,253)  $ (218)   $  -      $  -      $40,353

Issuance of 
  common shares
  - acquisition
  of affiliate        4         646                                                          650

Issuance of 
  restricted
  common shares
  - deferred
  compensation
  plan                3         501                                    (484)                  20

Foreign 
  currency 
  translation
  adjustment
  for period                                                                    (100)       (100)

Net income                                 563                                               563

Balance -
June 30, 1996      $201     $68,238   $(24,898)  $(1,253)   $ (218)   $(484)   $(100)    $41,486











</TABLE>


See notes to condensed consolidated financial statements.
<PAGE>
AMERICAN BANKNOTE CORPORATION AND SUBSIDIARIES 
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS - UNAUDITED   

Note A - Basis of Presentation

   The accompanying unaudited condensed consolidated financial
statements do not contain all disclosures required by generally accepted
accounting principles.  Reference should be made to the Company's Annual
Report on Form 10-K for the year ended December 31, 1995.  The
accompanying unaudited condensed consolidated financial statements
reflect all adjustments (consisting of normal recurring adjustments)
which are, in the opinion of management, necessary for a fair statement
of the results of the interim periods presented and are not necessarily
indicative of the results which may be expected for a full fiscal year.

   Results of operations for foreign subsidiaries, other than those
located in a highly inflationary country, are translated using average
exchange rates during the period, while assets and liabilities are
translated into US dollars using current rates.  Resulting translation
adjustments are accumulated as a separate component of stockholders'
equity.  Foreign currency transaction gains and losses are included in
earnings.  For ABN-Brazil, which operates in a highly inflationary
country, currency gains and losses resulting from translation and
transactions are determined using a combination of current and
historical rates and are included in earnings.


   Primary and fully-diluted income (loss) per share are the same.

   Cash tax payments for the six months ended June 30, 1996 and 1995,
amounted to approximately $4.3 million and $1.2 million, respectively. 
Cash interest payments for the six months ended June 30, 1996 and 1995
amounted to approximately $11.2 million and $10.5 million, respectively. 
In addition, under interest rate swap agreements, a cash interest
payment of $0.3 million was made in the six months ended June 30, 1995. 
The agreement was terminated in the fourth quarter of 1995.

Note B - Inventories

   Inventories consist of the following (in thousands):
                                               June          December
                                               30, 1996      31, 1995

      Work in process. . . . . . . . . . . .   $  16,165     $  15,874
      Raw materials and supplies . . . . . .      14,344         7,369

         Total inventories . . . . . . . . .   $  30,509     $  23,243



<PAGE>
AMERICAN BANKNOTE CORPORATION AND SUBSIDIARIES 
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS - UNAUDITED

Note C - Long-term Debt

    Long-term debt consists of the following (in thousands):
                                                June         December
                                                30, 1996     31, 1995
      10-3/8% Senior Notes, due 
         June 1, 2002  . . . . . . . . . . .    $ 126,500    $ 126,500
      11-5/8% Senior Notes, due August 1, 
         2002, net of unamortized 
         discount of $1,064 and $1,120 . . .       63,936       63,880
      9.35% Senior Debt, due 
         May 31, 2001 (a). . . . . . . . . .       52,729           -  
      8.07% Subordinated Debt, 
         due May 31, 2001(a) . . . . . . . .       18,101           -  
      Other long-term obligations. . . . . .       11,604        4,108
      Less current portion . . . . . . . . .       (7,177)        (332)

         Long-term debt. . . . . . . . . . .    $ 265,693    $ 194,156

    (a) Issued in connection with acquisition of Australian subsidiary.  
See "Results of Operations - Liquidity and Capital Resources" for
further description of debt.

Note D - Accounts Payable and Accrued Expenses

    Accounts payable and accrued expenses consist of the following (in
thousands):
                                                June          December
                                                30, 1996      31, 1995

      Accounts payable . . . . . . . . . . .    $ 18,088      $ 11,335
      Accrued expenses . . . . . . . . . . .       9,500         2,893
      Customers' advances. . . . . . . . . .       2,450         7,026
      Salaries and wages . . . . . . . . . .       7,590         5,666
      Restructuring and merger -
         related accruals. . . . . . . . . .      12,573         8,838
      Interest payable . . . . . . . . . . .       4,823         4,291
      Other . . .. . . . . . . . . . . . . .       6,156         4,934
         Total accounts payable 
             and accrued expenses. . . . . .    $ 61,180      $ 44,983

<PAGE>
AMERICAN BANKNOTE CORPORATION AND SUBSIDIARIES 
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS - UNAUDITED

Note E - Acquisition of Subsidiary

    On June 3, 1996, the Company acquired a 55% equity interest in
American Bank Note Australasia Ltd., an Australian corporation ("ABAL")
that purchased the assets and business of the Leigh-Mardon Security Group 
of Australia and New Zealand ("Leigh-Mardon") from Amcor Limited ("Amcor"). 
ABAL's products and services include financial and telephone cards,
personalization systems, bank and personal checks, electronic printing
and service applications, driver's licenses, payment systems and
electronic point of sale terminals.  The purchase price including fees and 
expenses in connection with the acquisition and financing was 
approximately $80.0 million, subject to adjustment. (See Note C - 
Long-term Debt for a description of financing.)

    The Company invested approximately $7.2 million cash and an Amcor
subsidiary acquired a 45% equity interest for approximately the same
amount. 

    The acquisition was accounted for as a purchase transaction in
accordance with APB No. 16 "Business Combinations."  Based on a
preliminary allocation of the purchase price, the transaction resulted
in approximately $52.9 million as the cost in excess of the fair market
value of the underlying net assets acquired, which cost will be
amortized over 25 years.  The allocation of purchase price as reflected
in the consolidated balance sheet is preliminary and subject to
adjustment upon receipt of final appraisal information and management's
final estimates as to the fair value of assets acquired and liabilities
assumed.

    On an unaudited pro-forma basis, assuming the acquisition had been
made as of January 1, 1995, the consolidated revenues of the Company for
the six months ended June 30, 1996 and 1995 would have increased by
approximately $33.5 million and $39.9 million, respectively, and net
earnings would have increased by approximately $0.4 million ($.02 per
share) and $0.4 million ($.02 per share), respectively.  The Company
believes these unaudited pro-forma results of operations are not
indicative of the actual results of operations that would have occurred
had the purchase been made as of January 1, 1995 or of the results which
will occur in the future.

Note F - Investment in Affiliate

    As of January 6, 1996, the Company acquired 25% of the outstanding
shares of a company that operates a financial and identification card
manufacturing business for $1.3 million.  The purchase price consisted 
of $0.65 million in cash and 386,617 shares of the Company's Common
Stock, valued at $0.65 million.  The acquisition was accounted for as a
purchase transaction, and its operations, recorded from the acquisition
date, were not significant to the consolidated results.
<PAGE>
AMERICAN BANKNOTE CORPORATION AND SUBSIDIARIES 
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS - UNAUDITED

Note G - Compensation Plans

    In 1996, the Company adopted an incentive based compensation plan. 
Under the plan, 310,000 restricted shares of the Company's Common Stock
were issued which vest after four years or earlier if specific goals are
achieved.  The fair value of the restricted shares are being amortized
to earnings over the vesting period.  In addition, certain stock options
were canceled and new stock options were issued to plan participants.


Note H - Commitments and Contingencies

    The Company is involved in various litigations (reference is made to
"Part II - Other Information, Item 1. Legal Proceedings" herein), the
adverse determination of which could have a material adverse effect on
the financial condition or results of operations of the Company in the
event that the Company's insurance was not available to cover such
claims or an award materially in excess of insurance coverage was made. 
The Company believes, however, that it has good and meritorious defenses
to the litigations and intends to vigorously defend against such
actions.
<PAGE>
AMERICAN BANKNOTE CORPORATION AND SUBSIDIARIES 
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS - UNAUDITED

ITEM 2.  MANAGEMENT'S DISCUSSION AND ANALYSIS OF   
FINANCIAL CONDITION AND RESULTS OF OPERATIONS

RESULTS OF OPERATIONS

General

   On June 3, 1996, the Company acquired a 55% equity interest in
American Bank Note Australasia Ltd., an Australian corporation ("ABAL"),
(see Note E). The acquisition was accounted for as a purchase
transaction and its operations recorded since June 3, 1996 were not
significant to the consolidated results.  In the third quarter of 1995,
the Company acquired the printing business and operations of Grafica
Bradesco in exchange for a 22.5% minority interest in ABN-Brazil.  The
acquisition was accounted for as a purchase transaction and its
operations have been included since the July 1, 1995 acquisition date. 
The acquisition of Grafica Bradesco had a significant impact on the 
operations of the Company.

COMPARISON OF RESULTS OF THE SIX MONTHS ENDED JUNE 30, 1996 
WITH THE SIX MONTHS ENDED JUNE 30, 1995

   ABN-Brazil's sales represent 60.8% of consolidated sales for 1996
compared with 37.6% for 1995.  Sales in 1996 increased by $34.0 million
(35.2%) from 1995 primarily due to increases at ABN-Brazil in stored
value telephone card sales ($22.9 million), printing services sales
($21.3 million), Holographic sales ($0.8 million) and increases in sales
as a result of the ABAL acquisition ($5.7 million).  Government sales
decreased primarily due to a decrease in food coupons ($14.5 million)
and currency ($1.8 million) partially offset by increased sales to other
government agencies ($0.8 million).  The reduction in food coupon sales
is due, in part, to the timing of the award of the fiscal 1996 food
coupon contract which resulted in initial deliveries commencing in June
of this year.  The trend in food coupon volume is discussed in
"Liquidity and Capital Resources." The change in various components of
sales may be affected by the timing of contract awards and delivery
requirements of customers.  

<PAGE>
ITEM 2.  MANAGEMENT'S DISCUSSION AND ANALYSIS OF   
FINANCIAL CONDITION AND RESULTS OF OPERATIONS

RESULTS OF OPERATIONS - Continued

   Cost of goods sold increased $18.5 million (26.4%) from 1995 and as
a percentage of sales was 67.8% in 1996 as compared to 72.5% in 1995.  
The cost of goods sold increase was due primarily to the increase in
sales at ABN-Brazil related to printing services and stored value
telephone cards.  The net decrease in the percentage of cost of goods
sold is principally due to the inclusion in 1995 of certain losses and 
related costs incurred at the Company's US subsidiary, American Bank 
Note Company ("ABN") and the reduction in fixed costs realized from the
restructuring which was substantially completed in the second quarter of
1996.  The net decrease in the cost of goods sold percentage was after 
including an increase in fixed expenses at ABN-Brazil due to the ramp up 
in production as well as a change in its product mix.

   Selling and administrative expenses decreased $1.3 million from 1995 
(6.2%) primarily due to the reduction in corporate overhead as a result 
of the restructuring and downsizing.  As a percentage of sales, selling 
and administrative expenses decreased to 14.7% from 21.2%.

   Depreciation expense increased $2.1 million in 1996 primarily as a
result of the acquisitions discussed above and capital expenditures
related to the expansion of manufacturing capacity at ABN-Brazil.

   Interest expense increased $1.2 million in 1996 primarily due to
debt incurred to acquire ABAL, debt to fund the purchase of new
equipment and interest incurred in use of the Company's domestic
revolving credit line.

   Foreign exchange gain (loss), net is a result of the Company's 
translation of Brazilian local currency financial statements into 
dollars.

   Income taxes (benefits) are calculated using estimated annual
effective tax rates for each tax jurisdiction and assume various
assumptions such as state and local taxes, utilization of foreign tax
credits and timing of certain deductions. 

   The minority interest represents the 22.5% minority interest in 
ABN-Brazil and since June 3, 1996 a 45% minority interest in ABAL.
<PAGE>
ITEM 2.  MANAGEMENT'S DISCUSSION AND ANALYSIS OF   
FINANCIAL CONDITION AND RESULTS OF OPERATIONS

RESULTS OF OPERATIONS

COMPARISON OF RESULTS OF THE SECOND QUARTER ENDED JUNE 30, 1996 
WITH THE SECOND QUARTER ENDED JUNE 30, 1995

   ABN-Brazil's sales represent 58.8% of consolidated sales for 1996
compared with 39.3% for 1995.  Sales in 1996 increased by $23.2 million
(48.7%) from 1995 primarily due to increases at ABN-Brazil for stored
value telephone card sales ($13.7 million) and  printing services sales
($8.6 million), as well increases in other commercial customer sales
($1.8 million), Holographic sales ($0.6 million) and the ABAL
acquisition ($5.7 million).  Government sales decreased primarily due to
a decrease in food coupons ($6.5 million) and currency ($0.7 million)
sales.  The reduction in food coupon sales is due in part, to the timing
of the award of the fiscal 1996 food coupon contract which resulted in
initial deliveries commencing in June of this year.  The trend in food
coupon volume is discussed in "Liquidity and Capital Resources."  The
change in various components of sales may be affected by the timing of
contract awards and delivery requirements of customers.  

   Cost of goods sold increased $8.4 million (22.1%) from 1995 and as a
percentage of sales was 65.8% in 1996 as compared to 80.2% in 1995.  
The cost of goods sold increase was due primarily to the increase in
sales at ABN-Brazil related to printing services and the production of
stored value telephone cards.  The net decrease in the percentage of
cost of goods sold is principally due to the inclusion in 1995 of certain
losses and related costs incurred at ABN and the reduction in fixed costs 
realized from the restructuring which was substantially completed in 
the second quarter of 1996.  The net decrease in the cost of goods sold 
percentage was after including an increase in fixed expenses at ABN-Brazil 
due to the ramp up in production as well as a change in its product mix.

   Selling and administrative expenses decreased by $0.4 million from
1995 (3.9%) primarily due to of the reduction in corporate overhead, as
a result of the restructuring and downsizing plan.  As a percentage of
sales, selling and administrative expenses decreased to 14.3% from
22.2%.

   Depreciation expense increased $1.8 million in 1996 primarily as a
result of the acquisitions discussed above and capital expenditures
related to the expansion of manufacturing capacity at ABN-Brazil.

   Interest expense increased $0.9 million in 1996 primarily due to
debt incurred to acquire ABAL, debt to fund the purchase of new
equipment and interest attributable to the Company's domestic revolving
credit line.

<PAGE>
ITEM 2.  MANAGEMENT'S DISCUSSION AND ANALYSIS OF   
FINANCIAL CONDITION AND RESULTS OF OPERATIONS

LIQUIDITY AND CAPITAL RESOURCES

   The Company invested approximately $7.2 million cash during June
1996 in the acquisition of ABAL.  The Company's investment was made
through an unrestricted subsidiary of the Company, American Banknote
Australasia Holdings, Inc. ("ABNAH"), as such term is defined in the
Company's Senior Note indentures

   The transaction was financed by the issuance of ABAL senior debt 
("Senior Debt"), of approximately $53.5 million, to a group of lenders,
represented by Bankers Trust Australia Limited and the issuance of ABAL 
subordinated debt ("Subordinated Debt"), of approximately $18.4 million,
to Amcor Investments Pty. Limited, an affiliate of the sellers. The excess 
proceeds of the financing and equity investments will be used for working 
capital purposes of ABAL.  In addition, ABAL obtained a $4.0 million working
capital facility at closing which has not been utilized. Both the Senior 
and Subordinated Debt are obligations of ABAL owned 55% by the Company 
and 45% by an affiliate of the sellers of the business.  

   The Senior Debt, among other things, provides for principal to be
paid in semi-annual installments commencing March 1997 and to be paid in
full by June 2001.  Seventy-five percent of Surplus Cashflow, as defined
below, is required to be paid to the lenders as mandatory pre-payment of
the term loan portion of the facility on an annual basis.  Interest accrues 
under the term facility of the Senior Debt at a rate of 1.75% plus the 
average 90-day Bank Bill Rate on the outstanding principal balance, or at 
an alternative rate if such Bank Bill Rate is not available. 

   The Subordinated Debt, among other things, provides for principal
and capitalized interest to be paid in accordance with the terms of the
Senior Debt, i.e 25% of available Surplus Cashflow once all other
relevant amounts have been paid under the Senior Debt.  Surplus Cashflow
is ABAL's earnings before interest, taxes, depreciation and
amortization, on a consolidated basis, less interest under the Senior
Debt, cash taxes paid, payments of principal under the Senior Debt,
budgeted capital expenditures, 25% of interest under the Senior Debt and 
any interest paid on the Subordinated Debt (to the extent permitted by the 
Senior lenders) and $2.0 million for working capital retention purposes.  
Interest accrues at a rate of 8.07% per annum plus 4% upon amounts 
outstanding in excess of $16.4 million.  The Subordinated Debt matures 
September 2001, or earlier in certain circumstances.  ABAL is required, 
at any time that the outstanding principal balance under the Senior Debt 
is less than $40 million, to seek to refinance the senior indebtedness, 
with any excess being used for repayment of the Subordinated Debt.  
Refinancing is not required if available on terms substantially less 
favorable than the terms of the current Senior Debt.  The Company does not 
anticipate any cash dividends from ABAL prior to retirement of the Senior 
and Subordinated Debt. 
<PAGE>
ITEM 2.  MANAGEMENT'S DISCUSSION AND ANALYSIS OF   
FINANCIAL CONDITION AND RESULTS OF OPERATIONS

LIQUIDITY AND CAPITAL RESOURCES - continued

   At June 30, 1996, the Company had approximately $15.0 million in
cash and cash equivalents and approximately $11.3 million of availability
under the Company's $20 million credit agreement, of which $2.0 million 
of outstanding letters of credit and $1.9 million of borrowings have been 
utilized, $126.5 million of 10 3/8% Senior Notes outstanding and 
$65.0 million of 11 5/8% Senior Notes outstanding.  

   The significant increases in certain balance sheet amounts at June
30, 1996 compared to December 31, 1995, resulted from the acquisition of 
ABAL during 1996, were approximately as follows: cash $9.0 million, other 
receivables $3.4 million, inventories $8.8 million, prepaid and other current 
assets $1.0 million, property plant and equipment $23.7 million, deferred 
financing and other long term assets $6.8 million, net excess cost of 
investment in subsidiaries over net assets acquired $52.9 million, current 
portion of long-term debt by $4.8 million, accounts payable and accrued 
expenses $17.1 million, long-term debt $67.1 million, long-term deferred 
tax and other liabilities $2.2 million, minority interest $6.5 million.  
In addition to the increases mentioned above, accounts and other receivables
increased as a result of ABAL's operations subsequent to the closing and
a higher level of consolidated sales.

   Certain states have adopted electronic programs which replace the
traditional methods of distribution of public assistance benefits to
recipients, including replacing food coupons with debit-type cards. 
Several state-wide programs have been implemented, while others have
recently awarded contracts.  Other states are evaluating such programs. 
In April 1996, the Food and Nutrition Division of the USDA awarded the
Company a new contract to print food coupons for the fiscal year ended
September 30, 1996, with two one-year renewal options, for the printing
food coupons.  Reference is made to the Company's Annual Report on Form
10-K the year ended December 31, 1995 "Liquidity and Capital Resources."

   Management of the Company believes that cash flows from operations 
together with its existing cash balances and credit facilities, will be
sufficient to service its working capital and debt service requirements
and fund capital expenditures for the foreseeable future.


IMPACT OF INFLATION

   Reference is made to the Company's Form 10-K for the year ended
December 31, 1995 "Impact of Inflation." 

   In 1996, to limit the effect of inflation and other currency risks 
on ABN-Brazil's cash balances, the Company entered into foreign 
currency option contracts, at a nominal cost, to limit the effect 
of currency fluctuations on future expected cash receipts from Brazil.
The options generally cover periods from two to four months.

<PAGE>
PART II    OTHER INFORMATION

ITEM 1.    LEGAL PROCEEDINGS

   Reference is made to the Company's Annual Report on Form 10-K for
the year ended December 31, 1995.

ITEM 4.    SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS

   As a result of a vote of stockholders at the Annual Meeting of
Stockholders held on June 13, 1996, it was resolved that:

  1. The Directors nominated for election were elected with the votes
     cast as follows:

     Nominee                      Votes In Favor   Votes Withheld 
     Bette B. Anderson                16,629,586          203,622
     Dr. Oscar Arias S.               16,641,972          191,236
     C. Gerald Goldsmith              15,356,264        1,476,944
     Ira J. Hechler                   15,354,412        1,478,796
     David S. Rowe-Beddoe             15,354,814        1,478,394
     Alfred Teo                       16,648,954          184,254
     Morris Weissman                  16,428,440          404,768

  2. The proposal to approve the amendment to the Deferred Stock and
     Compensation Plan for Non-Employee Directors was approved by a vote
     of 15,191,606 in favor, 1,047,362 against and 594,240 abstained;
     and

  3. The proposal to approve the appointment of Deloitte & Touche LLP as
     independent auditors for the fiscal year ending December 31, 1996
     was approved by a vote of 16,212,050 in favor, 148,533 against and
     472,625 abstained.

ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K

(a)        Exhibits:
  Exhibit
  Number
  
  10.1  Shareholder and Subscription Agreement between, American Banknote
        Australasia Holdings Inc., Leigh-Mardon Pty Limited and American
        Banknote Australasia Limited made on 3 June 1996 is hereby
        incorporated by reference to Exhibit 2.1 to the Company's Current
        Report on Form 8-K dated June 3, 1996 (the "June 3, 1996 8-K"). 

  10.2  Senior Debt Facility Agreement dated June 3, 1996 between
        American Banknote Australasia Limited, ABN Holdings Pty Ltd, ABN
        Pacific Pty Ltd, ABN Security Pty Ltd, ABN New Zealand Limited,
        Dresdner Australia Limited, Societe Generale Australia Limited,
        AIDC Limited, ABN AMRO Australia Limited, Bankers Trust Australia
        Limited, BT Management Services PTY Limited. is hereby
        incorporated by reference to Exhibit 2.2 to the June 3, 1996 8-K.
<PAGE>
  10.3  Subordinated Debt Facility Agreement dated June 3, 1996 between
        American Banknote Australasia Limited, Amcor Investments Pty
        Limited and ABN Holdings Pty Ltd, ABN Pacific Pty Ltd, ABN
        Security Pty Ltd, ABN New Zealand Limited. is hereby incorporated
        by reference to Exhibit 2.3 to the June 3, 1996 8-K.

  10.4  Australian Sale Agreement between Leigh-Mardon Pty Limited (the
        Vendor), ABN Security Pty Ltd (the Business Purchaser), ABN
        Holdings Pty Ltd (the Fortronic Shares Purchaser), ABN Pacific
        Pty Ltd (the PSS Shares Purchaser), Containers Pty Limited (the
        Vendor Guarantor) and American Banknote Australasia Limited (the
        Purchasers' Guarantor) made on 10 April 1996. is hereby
        incorporated by reference to Exhibit 2.4 to the June 3, 1996 8-K.

  10.5  Master Agreement between Leigh-Mardon Pty Limited (the Australian
        Vendor), Containers Packaging (N.Z.) Limited, Kiwi Packaging
        (Cartons) Limited, Leigh-Mardon (NZ) Limited, ABN Security Pty
        Ltd (the Business Purchaser), ABN Holdings Pty Ltd (the Fortronic
        Shares Purchaser), ABN Pacific Pty Ltd (the PSS Shares
        Purchaser), ABN New Zealand Limited (the New Zealand Purchaser),
        American Banknote Australasia Limited (the Purchasers' Guarantor)
        and Containers Pty Limited (the Vendor Guarantor) made on 10
        April 1996. is hereby incorporated by reference to Exhibit 2.5 to
        the June 3, 1996 8-K.

  10.6  New Zealand Sale Agreement between Containers Packaging (N.Z.)
        Limited, Leigh-Mardon (NZ) Limited, Kiwi Packaging (Cartons)
        Limited, ABN New Zealand Limited (the New Zealand Purchaser),
        American Banknote Australasia Limited (the Purchasers' Guarantor)
        and Containers Pty Limited (the Vendor Guarantor) made on 10
        April 1996 is hereby incorporated by reference to Exhibit 2.6 to
        the June 3, 1996 8-K.

  27 Article 5 Financial Data Schedule                    **

      **  Filed electronically herewith

(b)        Reports on Form 8-K
    a)     Form 8-K filed April 16, 1996 - Item 5 Other Events
    b)     Form 8-K filed June 18, 1996
             - Item 2  Acquisition or Disposition of Assets
             - Item 7  Financial Statements, Pro Forma Financial
                       Information and Exhibits
<PAGE>
                               SIGNATURE
                                    
                                    
  Pursuant to the requirements of the Securities Exchange Act of 1934,
the Company has duly caused this report to be signed on its behalf by
the undersigned, thereunto duly authorized.


AMERICAN BANKNOTE CORPORATION



By: s/ John T. Gorman         
  John T. Gorman
  Executive Vice President,
  Chief Financial Officer and
  Chief Accounting Officer


Date:    August 13, 1996


<PAGE>
                             Exhibit Index
List of Exhibits Pursuant to Item 601 of Regulation S-K:
Exhibit
     10.1  Shareholder and Subscription Agreement between, American
           Banknote Australasia Holdings Inc., Leigh-Mardon Pty Limited
           and American Banknote Australasia Limited made on 3 June 1996
           is hereby incorporated by reference to Exhibit 2.1 to the
           Company's Current Report on Form 8-K dated June 3, 1996 (the
           "June 3, 1996 8-K"). 
     10.2  Senior Debt Facility Agreement dated June 3, 1996 between
           American Banknote Australasia Limited, ABN Holdings Pty Ltd,
           ABN Pacific Pty Ltd, ABN Security Pty Ltd, ABN New Zealand
           Limited, Dresdner Australia Limited, Societe Generale
           Australia Limited, AIDC Limited, ABN AMRO Australia Limited,
           Bankers Trust Australia Limited, BT Management Services PTY
           Limited. is hereby incorporated by reference to Exhibit 2.2
           to the June 3, 1996 8-K.
     10.3  Subordinated Debt Facility Agreement dated June 3, 1996
           between American Banknote Australasia Limited, Amcor
           Investments Pty Limited and ABN Holdings Pty Ltd, ABN Pacific
           Pty Ltd, ABN Security Pty Ltd, ABN New Zealand Limited. is
           hereby incorporated by reference to Exhibit 2.3 to the June
           3, 1996 8-K.
     10.4  Australian Sale Agreement between Leigh-Mardon Pty Limited
           (the Vendor), ABN Security Pty Ltd (the Business Purchaser),
           ABN Holdings Pty Ltd (the Fortronic Shares Purchaser), ABN
           Pacific Pty Ltd (the PSS Shares Purchaser), Containers Pty
           Limited (the Vendor Guarantor) and American Banknote
           Australasia Limited (the Purchasers' Guarantor) made on 10
           April 1996. is hereby incorporated by reference to Exhibit
           2.4 to the June 3, 1996 8-K.
     10.5  Master Agreement between Leigh-Mardon Pty Limited (the
           Australian Vendor), Containers Packaging (N.Z.) Limited, Kiwi
           Packaging (Cartons) Limited, Leigh-Mardon (NZ) Limited, ABN
           Security Pty Ltd (the Business Purchaser), ABN Holdings Pty
           Ltd (the Fortronic Shares Purchaser), ABN Pacific Pty Ltd
           (the PSS Shares Purchaser), ABN New Zealand Limited (the New
           Zealand Purchaser), American Banknote Australasia Limited
           (the Purchasers' Guarantor) and Containers Pty Limited (the
           Vendor Guarantor) made on 10 April 1996. is hereby
           incorporated by reference to Exhibit 2.5 to the June 3, 1996
           8-K.
     10.6  New Zealand Sale Agreement between Containers Packaging
           (N.Z.) Limited, Leigh-Mardon (NZ) Limited, Kiwi Packaging
           (Cartons) Limited, ABN New Zealand Limited (the New Zealand
           Purchaser), American Banknote Australasia Limited (the
           Purchasers' Guarantor) and Containers Pty Limited (the Vendor
           Guarantor) made on 10 April 1996 is hereby incorporated by
           reference to Exhibit 2.6 to the June 3, 1996 8-K.
     27    Article 5 Financial Data Schedule
<PAGE>







                               BLANK PAGE



<TABLE> <S> <C>

<ARTICLE> 5
<LEGEND>
This Schedule contains summary financial information extracted from the
financial statements contained in the body of the accompanying Form 10-Q
and is qualified in its entirety by reference to such financial statements.
</LEGEND>
       
<S>                                        <C>
<PERIOD-TYPE>                              6-MOS
<FISCAL-YEAR-END>                          DEC-31-1996
<PERIOD-END>                               JUN-30-1996
<CASH>                                           15022
<SECURITIES>                                      3373
<RECEIVABLES>                                    45841
<ALLOWANCES>                                       951
<INVENTORY>                                      30509
<CURRENT-ASSETS>                                114807
<PP&E>                                          308160
<DEPRECIATION>                                   56115
<TOTAL-ASSETS>                                  477347
<CURRENT-LIABILITIES>                            70277
<BONDS>                                         265693
                                0
                                          0
<COMMON>                                           201
<OTHER-SE>                                       41285
<TOTAL-LIABILITY-AND-EQUITY>                    477347
<SALES>                                         130681
<TOTAL-REVENUES>                                130681
<CGS>                                            88570
<TOTAL-COSTS>                                   116495
<OTHER-EXPENSES>                                 (244)
<LOSS-PROVISION>                                     0
<INTEREST-EXPENSE>                               12641
<INCOME-PRETAX>                                   1789
<INCOME-TAX>                                     (501)
<INCOME-CONTINUING>                                563
<DISCONTINUED>                                       0
<EXTRAORDINARY>                                      0
<CHANGES>                                            0
<NET-INCOME>                                       563
<EPS-PRIMARY>                                      .03
<EPS-DILUTED>                                      .03
        

</TABLE>


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