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 of Report (Date of earliest event reported) July 21, 1994
JAMES RIVER CORPORATION OF VIRGINIA
(Exact name of registrant as specified in its charter)
Virginia
(State or other jurisdiction of incorporation)
1-7911 54-0848173
(Commission File Number) (IRS Employer Identification Number)
120 Tredegar Street, Richmond, Virginia 23219
(Address of principal executive offices, including zip code)
Registrant's telephone number, including area code (804) 644-5411
Item 5. Other Events.
On July 21, 1994, James River Corporation of Virginia
("James River" or the "Company") published a press release
announcing the Company's results of operations for the second
quarter ended June 26, 1994. The Company published its unaudited
financial statements including its condensed consolidated balance
sheets as of June 26, 1994 and June 27, 1993, its consolidated
statements of operations for the quarters (13 weeks) and six
months (26 weeks) ended June 26, 1994 and June 27, 1993, its
condensed consolidated statements of cash flows for the six
months (26 weeks) ended June 26, 1994 and June 27, 1993, and
certain segment information for the six months ended June 26,
1994 and the year ended December 26, 1993. The results of
operations for the six months ended June 26, 1994 are not
necessarily indicative of the results to be expected for the full
year. A copy of the press release which includes the
consolidated financial statements is filed herewith as Exhibit
99.
Item 7. Financial Statements and Exhibits.
(c) Exhibits:
99 Press release dated July 21, 1994, published by
the registrant -- filed herewith
SIGNATURES
Pursuant to the requirements of the Securities and Exchange
Act of 1934, the registrant has duly caused this report to be
signed on its behalf by the undersigned hereunto duly authorized.
JAMES RIVER CORPORATION OF VIRGINIA
By:/s/James R. Hudson, Jr.
James R. Hudson, Jr.
Vice President, Corporate Controller
Date: July 26, 1994
Exhibit 99
News Release: Immediate Contact: Celeste Gunter
(804) 649-4307
JAMES RIVER REPORTS SECOND QUARTER 1994 RESULTS
RICHMOND, VIRGINIA, July 21, 1994 -- James River
Corporation today reported sales and earnings for its second quarter
which ended June 26, 1994. Sales for the quarter were $1.2 billion,
equivalent to the prior year and up approximately 8% above sales of
$1.1 billion in the first quarter of this year. The company reported
net income of $12.9 million for the quarter, slightly below the prior
year, but significantly above the net loss of $7.1 million reported
in the first quarter. On a per share basis after preferred
dividends, earnings of $.06 per share were equal to those of the
prior year's second quarter and improved over the loss of $.19 per
share reported in the first quarter of this year.
Results for the second quarter of 1994 included $9.0
million of non-recurring interest income ($5.4 million after taxes,
or $.07 per share) on the favorable settlement of certain prior
years' income tax returns. Last year's second quarter also included
non-recurring other income of approximately $6.7 million ($4.1
million after taxes, or $.05 per share).
Income from operations totaled $42.5 million, equivalent to
the second quarter of 1993 and more than double the $20.3 million
reported in the first quarter of this year. The upturn from the
first quarter reflects continuing improvements in profitability in
both the Consumer Products and the Food and Consumer Packaging
Businesses, offset in part by the continuing weaknesses in pricing
experienced by the Communications Papers Business.
Operating income for the Consumer Products Business totaled
$47 million, representing increases of 39% compared to last year's
second quarter and 66% compared to first quarter levels. This also
represents the highest level of quarterly profitability for this
business since 1991, driven principally by the company's cost
reduction efforts, as well as strong retail tabletop volumes. While
price increases in commercial tissue products have been announced for
the third quarter, pricing in both retail tissue and tabletop
markets remained competitive during the quarter. Operating income of
$34.3 million for the Food and Consumer Packaging Business
represented improvements of 16% and 29%, respectively, over profits
reported last year and in the first quarter. Operating losses in the
Communications Papers Business widened slightly to $26.5 million,
compared to losses of $25.1 million in the first quarter and $12.3
million in last year's second quarter. Price increases in uncoated
free sheet and other grades were being implemented at the close of
the second quarter, however, average pricing for the second quarter
was below that of the first quarter.
As part of its ongoing efforts to improve the effectiveness
of manufacturing operations and reduce costs, the company announced
plans for the closure of its Sandston, Virginia specialty foodservice
plant. Production from this facility will be consolidated at other
company facilities.
On July 5, 1994, subsequent to the end of the quarter,
James River completed the acquisition of an additional 43.2% indirect
ownership interest in Jamont N.V. for a total purchase price of
approximately $575 million. This transaction increased James River's
ownership interest from 43.2% to 86.4% and will result in the
consolidation of Jamont beginning in the third quarter. With annual
sales of $1.5 billion , Jamont is the number two European producer of
towel and tissue products. One-half of the purchase price was
financed with the proceeds from a new series of preferred stock
issued early in the third quarter. The balance of the purchase price
has been financed with a combination of borrowings under existing and
new lines of credit. These borrowings may be refinanced with a
portion of James River's existing $600 million shelf registration of
debt securities.
The Series P 9% Cumulative Convertible Preferred Stock was
issued as a Dividend Enhanced Convertible Stock ("DECS"), in the form
of depositary shares, with each depositary share representing a one-
hundredth interest in a share of the preferred stock. A total of
16.7 million depositary shares were issued, for total gross proceeds
of $287.5 million, after reflecting the exercise of the underwriters'
over-allotment option. The DECS are convertible into common stock at
the option of the holder, at any time, at a rate of .8547 common
shares for each depositary share and are redeemable by the company
beginning in July 1997 at a call price payable in shares of common
stock. If still outstanding, the DECS will automatically convert
into common shares on a one-for-one basis in July 1998.
Subsequent to the acquisition of Jamont, James River will
continue to be comprised of three independent business segments.
The Consumer Products Business is the largest of these, with
worldwide annual sales of $4 billion, or over 60% of total James
River sales. This business produces premium towel and tissue and
tabletop products for both U.S. and European markets. The Food and
Consumer Packaging Business with annual sales of $1.6 billion
represents approximately 25% of total sales, and the Communications
Papers Business with annual sales of $.9 billion represents slightly
less than 15% of total sales. Looking ahead, Bob Williams, Chairman
and Chief Executive Officer, noted that James River will continue to
pursue strategies and structures to enhance recognition of the market
values of these businesses.
He concluded, "We are encouraged by the progress we have
been able to make, particularly in Consumer Products and Food and
Consumer Packaging, through aggressive cost reduction and focused
productivity improvements, while increasing the output of new and
improved products. As increasing pulp prices drive increasing prices
for paper, board, and converted products, the value of James River's
integrated position should be reflected in further increases in
profitability."
CONSOLIDATED STATEMENTS OF OPERATIONS
James River Corporation of Virginia and Subsidiaries
For the Quarters (13 Weeks) and Six Months (26 Weeks) Ended
June 26, 1994 and June 27, 1993
(in thousands, except per share amounts)
Second Quarter Six Months
1994 1993 1994 1993
Net sales $1,198,145 $1,198,134 $2,303,648 $2,311,759
Cost of goods sold 990,697 983,337 1,925,563 1,918,057
Selling and administrative
expenses 164,983 172,609 315,315 333,860
Income from operations 42,465 42,188 62,770 59,842
Interest expense 36,553 33,317 71,510 72,502
Other income, net (a) 15,509 13,730 18,100 17,919
Income before income taxes 21,421 22,601 9,360 5,259
Income tax expense 8,521 8,865 3,546 1,653
Net income $12,900 $13,736 $5,814 $3,606
Preferred dividend requirements (8,201) (8,205) (16,403) (16,413)
Net income (loss) applicable
to common shares $4,699 $5,531 $(10,589) $(12,807)
Net income (loss) per common
share and common share
equivalent $.06 $.06 $(.13) $(.16)
Weighted average number
of common shares and
common share equivalents
--fully diluted 81,901 81,846 81,883 81,795
(a) Other income for the second quarters of 1994 and 1993 includes
$9.0 million ($5.4 million after taxes, or $.07 per share) and $8.9
million ($5.4 million after taxes, or $.07 per share), respectively,
of interest income on refunds resulting from the favorable settlement
of certain prior years' income tax returns. Other income for the
second quarter of 1993 also includes a $2.2 million charge ($1.3
million net of tax benefits, or $.02 per share) for the write-off of
preferred stock received in a prior divestiture.
SEGMENT INFORMATION
James River Corporation of Virginia and Subsidiaries
(in thousands)
First Second Third Fourth
Quarter Quarter Quarter Quarter Year
1994 Net sales:
Consumer products $557,224 $621,370 $1,178,594
Food and consumer
packaging 375,737 399,328 775,065
Communications papers 215,044 220,453 435,497
Intersegment
elimination (42,502) (43,006) (85,508)
Total net sales $1,105,503 $1,198,145 $2,303,648
1993 Net sales:
Consumer products $558,805 $615,932 $603,038 $580,361 $2,358,136
Food and consumer
packaging 387,395 389,340 397,546 394,173 1,568,454
Communications papers 215,912 237,718 225,323 222,373 901,326
Intersegment
elimination (48,487) (44,856) (42,400) (41,978) (177,721)
Total net sales $1,113,625 $1,198,134 $1,183,507 $1,154,929 $4,650,195
1994 Operating profit (loss):
Consumer products $28,316 $46,991 $75,307
Food and consumer
packaging 26,633 34,310 60,943
Communications papers (25,059) (26,516) (51,575)
General corporate
expenses (9,585) (12,320) (21,905)
Income from
operations $20,305 $42,465 $62,770
1993 Operating profit (loss):
Consumer products $23,190 $33,885 $33,572 $20,639 $111,286
Food and consumer
packaging 23,309 29,676 22,335 28,507 103,827
Communications papers (20,281) (12,297) (6,389) (19,433) (58,400)
General corporate
expenses (8,564) (9,076) (14,035) (11,015) (42,690)
Income from
operations $17,654 $42,188 $35,483 $18,698 $114,023
CONSOLIDATED BALANCE SHEETS
James River Corporation of Virginia and Subsidiaries
(in thousands)
June 26, June 27,
1994 1993
ASSETS
Current assets:
Cash and short-term securities $23,142 $32,738
Accounts receivable 445,442 438,683
Inventories 701,453 675,904
Prepaid expenses 22,548 28,677
Refundable income taxes 15,429 10,599
Deferred income taxes 63,796 91,440
Net assets held for sale 74,669 166,642
Total current assets 1,346,479 1,444,683
Net property, plant, and equipment 3,509,055 3,582,391
Investments in affiliates 558,880 538,640
Other assets 315,883 334,173
Goodwill 150,957 155,671
$5,881,254 $6,055,558
LIABILITIES AND CAPITAL
Current liabilities:
Accounts payable and accrued liabilities $599,354 $602,339
Payable to OFI 194,872
Income taxes payable 5,183 4,808
Current portion of long-term debt 78,669 102,959
Accrued restructuring liability 46,978 93,552
Total current liabilities 730,184 998,530
Long-term debt 2,038,361 1,874,372
Accrued postretirement benefits other than
pensions 542,391 527,120
Other long-term liabilities 220,903 171,239
Deferred income taxes 415,534 437,591
Preferred stock 452,808 454,228
Common stock, shares outstanding
1994--81,672 and 1993--81,607 8,167 8,161
Additional paid-in capital 1,220,086 1,218,623
Retained earnings 252,820 365,694
$5,881,254 $6,055,558
CONSOLIDATED STATEMENTS OF CASH FLOWS
James River Corporation of Virginia and Subsidiaries
For the Six Months (26 Weeks) Ended
June 26, 1994 and June 27, 1993
(in thousands)
1994 1993
Operating activities:
Net income $5,814 $3,606
Depreciation expense and cost of timber
harvested 178,038 182,088
Deferred income tax provision (benefit) 662 (584)
Undistributed (earnings) losses of
unconsolidated affiliates (4,164) 1,841
Retirement benefit expense in excess of
funding 14,044 16,623
Change in current assets and liabilities:
Accounts receivable (21,496) (20,401)
Inventories (35,665) 4,841
Other current assets (907) 5,731
Current liabilities (32,076) (22,396)
Other, net 3,852 16,679
Cash provided by operating activities 108,102 188,028
Investing activities:
Expenditures for property, plant, and
equipment (143,363) (149,639)
Cash received from sale of assets 8,935 26,148
Investments in affiliates (12,108) (220)
Proceeds received from redemption of SCI
preferred stock 47,050
Other, net 2,777 4,317
Cash used for investing activities (143,759) (72,344)
Financing activities:
Additions to long-term debt 98,568 38,220
Payments of long-term debt (21,083) (455,706)
Dividends paid and other, net (42,306) (40,952)
Cash provided by (used for) financing
activities 35,179 (458,438)
Decrease in cash and short-term securities $(478) $(342,754)
