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 20, 1995
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 20, 1995, James River Corporation of Virginia
("James River" or the "Company") published a press release
announcing the Company's results for the second quarter and
six months ended June 25, 1995. The Company published its
consolidated condensed balance sheets as of June 25, 1995,
and June 26, 1994, its consolidated statements of operations
for the quarters (13 weeks) and six months (26 weeks) ended
June 25, 1995, and June 26, 1994, its consolidated
statements of cash flows for the six months ended June 25,
1995, and June 26, 1994, and certain segment information for
the six months ended June 25, 1995, and the year ended
December 25, 1994. A copy of the press release which
includes the consolidated financial statements is filed
herewith as Exhibit 99(a).
Also included, as Exhibit 99(b), is certain unaudited pro
forma financial information for James River giving effect to
the proposed spin-off of a substantial portion of its
Communications Papers Business and the specialty-paper based
portion of its Food and Consumer Packaging Business.
Item 7. Financial Statements and Exhibits
(c) Exhibits:
27 Financial Data Schedules for the six months ended
June 25, 1995 (filed electronically only).
99(a) Press release dated July 20, 1995, published
by the registrant -- filed herewith.
99(b) James River's unaudited pro forma consolidated
statements of operations for the quarter (13 weeks) and
six months (26 weeks) ended June 25, 1995, and unaudited
pro forma consolidated condensed balance sheet as of June
25, 1995 -- filed herewith.
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 hereunto duly authorized.
JAMES RIVER CORPORATION OF VIRGINIA
By: /s/ Stephen E. Hare
Stephen E. Hare
Senior Vice President, Corporate Finance
and Chief Financial Officer
Date: July 25, 1995
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
The schedule contains summary financial information extracted from James River
Corporation of Virginia's June 25, 1995 financial statements included as an
exhibit to Form 8-K dated July 20, 1995 and is qualified in its entirety by
reference to such financial statements.
</LEGEND>
<CIK> 0000053117
<NAME> JAMES RIVER CORPORATION OF VIRGINIA
<MULTIPLIER> 1,000
<S> <C>
<PERIOD-TYPE> 6-MOS
<FISCAL-YEAR-END> DEC-31-1995
<PERIOD-END> JUN-25-1995
<CASH> 45,746
<SECURITIES> 0
<RECEIVABLES> 960,038
<ALLOWANCES> 0
<INVENTORY> 896,421
<CURRENT-ASSETS> 2,065,084
<PP&E> 7,191,154
<DEPRECIATION> 2,467,014
<TOTAL-ASSETS> 8,089,038
<CURRENT-LIABILITIES> 1,403,999
<BONDS> 2,857,331
<COMMON> 8,198
0
740,269
<OTHER-SE> 1,454,973
<TOTAL-LIABILITY-AND-EQUITY> 8,089,038
<SALES> 3,449,391
<TOTAL-REVENUES> 3,449,391
<CGS> 2,703,828
<TOTAL-COSTS> 2,703,828
<OTHER-EXPENSES> 8,271
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 120,401
<INCOME-PRETAX> 113,028
<INCOME-TAX> 48,600
<INCOME-CONTINUING> 63,906
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 63,906
<EPS-PRIMARY> 0.42
<EPS-DILUTED> 0.42
</TABLE>
EXHIBIT 99(a)
News Release: Immediate Contact:Celeste Gunter (Financial)
(804) 649-4307
Richard B. Elder (Media)
(804) 343-4785
JAMES RIVER CORPORATION REPORTS IMPROVED SECOND QUARTER 1995 RESULTS
RICHMOND, VIRGINIA, July 20, 1995 -- James River Corporation
today reported net income of $41.8 million for its second quarter ended
June 25, 1995, more than triple the $12.9 million reported in 1994's
second quarter and almost double the $22.1 million posted in the first
quarter of 1995. Earnings of $.33 per share for the second quarter were
similarly improved over the earnings of $.06 per share reported in last
year's second quarter and $.09 per share reported in the first quarter of
1995.
Excluding nonrecurring items, the current quarter's earnings of
$.33 per share compare favorably with a loss of $.01 per share in the
prior year and income of $.15 per share in the preceding quarter.
Results for the second quarter of 1994 included nonrecurring interest
income of $.07 per share, and results for the first quarter of 1995
included nonrecurring severance costs of $.06 per share.
Net sales of $1.8 billion reported in the second quarter were
more than 10% higher than first quarter levels and 51% above the prior
year. Compared to the prior year, $423 million, or 35%, of the sales
growth was attributable to the European Consumer Products Business, which
was not consolidated until July 1994. The remaining sales growth of 16%
represented a combination of improved pricing and stronger volumes in
many product lines.
Consolidated income from operations totaled $128.5 million for
the second quarter, more than three times last year's second quarter and
almost 50% higher than first quarter levels. Second quarter general
corporate expenses included $6.7 million of consulting fee costs ($4.1
million net of tax benefits, or $.05 per share) incurred in connection
with cost reduction programs.
Operating profits in the North American Consumer Products
Business were $58.4 million in the second quarter, 24% above the prior
year and 52% higher than first quarter results, while sales for the
quarter were $687 million, an 11% increase over the prior year. Improved
profitability was driven by better pricing in both retail and commercial
product lines, improved manufacturing performance and growing retail
volumes and market shares.
Operating profits for the European Consumer Products Business
tripled from first quarter levels, to $10.5 million in the second
quarter, on 18% higher sales. Improved profitability was attributable to
a combination of unit volume recovery, stronger pricing and continued
cost reductions.
Second quarter operating profits of $16.5 million for the Food
and Consumer Packaging Business were approximately one-half of the level
reported in the prior year and slightly below the $18.0 million reported
in the first quarter. The decline in profitability was due to
continuing unrecovered raw material cost increases, higher manufacturing
costs and softer demand.
Results for the Communications Papers Business continued the
upturn begun in the second half of 1994. Operating profits rose to $60.2
million for the current quarter, compared to a loss of $26.5 million in
the prior year and profits of $44.5 million in the first quarter. Net
sales were $326 million in the second quarter, representing increases of
48% and 8%, respectively, over the prior year and prior quarter levels.
These results reflect continued pricing recovery, as well as benefits of
productivity improvements and cost reductions effected during the last
cyclical downturn.
For the first six months, excluding nonrecurring items, net
income was $69.2 million, or $.48 per share, in 1995 versus income of
$0.4 million, or a loss of $.20 per share, in 1994.
Cash provided by operating activities totaled $285 million for
the first half of 1995, representing a substantial increase over the $108
million provided in the prior year. In May 1995, the company received
$24.3 million in cash from the sale of certain energy assets. Positive
free cash flow (cash provided by operations, less cash used for investing
activities and dividends) of $63 million was generated during the first
half of 1995, allowing for net payments of long-term debt of $82 million.
During the quarter, the company progressed with the spin-off to
shareholders of Crown Vantage, a new company which will include a
substantial portion of the company's Communications Papers Business and
the specialty-paper based portion of its Food and Consumer Packaging
Business. Crown Vantage is expected to incur $500 million in long-term
debt, the net proceeds of which will be paid to James River as a return
of capital. Crown Vantage will also issue $100 million of notes to James
River. James River plans to use the cash proceeds to reduce its long-
term debt. The spin-off is currently expected to be completed in late
summer.
Bob Williams, James River's Chairman and Chief Executive
Officer concluded, "We are encouraged by the recent improvements posted
by the Consumer Products Business, in both the U.S. and Europe, and the
Communications Papers Business. We remain optimistic that profits for
these operations should continue to strengthen in the second half of the
year from higher average prices and continued favorable markets for our
products, along with a major new cost reduction program. In addition to
the Crown Vantage spin-off, alternatives for the Food and Consumer
Packaging Business continue to be evaluated in order to enhance
shareholder value, reduce debt and improve strategic focus."
<TABLE>
CONSOLIDATED STATEMENTS OF OPERATIONS (a) Quarters Ended (b) Six Months Ended (b)
James River Corporation of
Virginia and Subsidiaries June 25, June 26, June 25, June 26,
(in thousands, except per share amounts) 1995 1994 1995 1994
<CAPTION>
<S> <C> <C> <C> <C>
Net sales $1,812,107 $1,198,145 $3,449,391 $2,303,648
Cost of goods sold 1,403,446 990,697 2,703,828 1,925,563
Selling and administrative expenses 280,115 164,983 522,411 315,315
Severance and other items 8,271
Income from operations (c) 128,546 42,465 214,881 62,770
Interest expense 60,128 36,553 120,401 71,510
Other income, net (d) 7,833 15,434 18,548 17,695
Income before income taxes and minority
interests 76,251 21,346 113,028 8,955
Income tax expense 32,786 8,521 48,600 3,546
Income before minority interests 43,465 12,825 64,428 5,409
Minority interests (1,702) 75 (522) 405
Net income $41,763 $12,900 $63,906 $5,814
Preferred dividend requirements (14,643) (8,201) (29,286) (16,403)
Net income (loss) applicable to common
shares $27,120 $4,699 $34,620 $(10,589)
Net income (loss) per common share $.33 $.06 $.42 $(.13)
Weighted average number of common shares 83,368 81,901 83,237 81,883
</TABLE>
CONSOLIDATED CONDENSED BALANCE SHEETS (a)
James River Corporation of Virginia and
Subsidiaries
(in thousands) June June
25, 1995 26, 1994
ASSETS:
Cash and cash equivalents $45,746 $23,142
Accounts receivable 960,038 445,442
Inventories 896,421 701,453
Other current assets 162,879 176,442
Total current assets 2,065,084 1,346,479
Net property, plant and equipment 4,724,140 3,509,055
Investments in affiliates 126,693 558,880
Other assets 368,455 315,883
Goodwill 804,666 150,957
Total assets $8,089,038 $5,881,254
LIABILITIES AND SHAREHOLDERS' EQUITY:
Accounts payable and other current
liabilities $1,174,515 $651,515
Current portion of long-term debt 229,484 78,669
Total current liabilities 1,403,999 730,184
Long-term debt 2,857,331 2,038,361
Accrued postretirement benefits
than pensions 552,693 542,391
Other long-term liabilities 318,059 215,442
Deferred income taxes 585,704 415,534
Minority interests 167,812 5,461
Preferred stock 740,269 452,808
Common shareholders' equity 1,463,171 1,481,073
Total liabilities and shareholders'
equity $8,089,038 $5,881,254
(a) Certain amounts in the prior year's financial statements have
been reclassified to conform to the current year's presentation.
(b) James River acquired a majority ownership interest in Jamont as
of July 5, 1994. Jamont is currently accounted for on a one-month
lag and has been included as a consolidated subsidiary since July
1994; prior to that time, Jamont was accounted for using the equity
method.
(c) Income from operations for the six months ended June 25, 1995,
included nonrecurring charges of $8.3 million ($5.3 million net of
tax benefits and minority interest, or $.06 per share), primarily for
severance costs in the United Kingdom.
(d) Other income for the second quarter of 1994 included $9.0
million ($5.4 million after taxes, or $.07 per share) of interest
income on income tax refunds.
CONSOLIDATED STATEMENTS OF CASH FLOWS (a)
James River Corporation of Virginia and Six Months Ended(b)
Subsidiaries
(in thousands) June 25, 1995 June 26, 1994
Operating activities:
Net income $63,906 $5,814
Depreciation expense and cost of timber
harvested 234,892 178,038
Deferred income tax provision 8,704 662
Equity in earnings of unconsolidated
affiliates (11,483) (4,164)
Severance and other items 8,271
Retirement benefits expense in excess
of funding 7,505 14,044
Amortization of goodwill 11,399 2,358
Change in current assets and liabilities:
Accounts receivable (16,237) (21,496)
Inventories (37,548) (35,665)
Other current assets (10,433) (907)
Current liabilities 12,376 (32,076)
Dividends received from unconsolidated
affiliates 17,996
Other, net (3,870) 1,494
Cash provided by operating activities 285,478 108,102
Investing activities:
Expenditures for property, plant and
equipment (208,707) (143,363)
Cash received from sale of assets 2,843 8,935
Proceeds on sale of partnership option 24,327
Investments in affiliates (12,108)
Other, net 12,625 2,777
Cash used for investing activities (168,912) (143,759)
Financing activities:
Additions to long-term debt 6,321 98,568
Payments of long-term debt (88,078) (21,083)
Dividends paid (53,800) (40,907)
Other, net 5,441 (1,399)
Cash provided by (used for) financing
activities (130,116) 35,179
Decrease in cash and cash equivalents $(13,550) $(478)
(a) Certain amounts in the prior year's financial statements have
been reclassified to conform to the current year's presentation.
(b) James River acquired a majority ownership interest in Jamont as
of July 5, 1994. Jamont is currently accounted for on a one-month
lag and has been included as a consolidated subsidiary since July
1994; prior to that time, Jamont was accounted for using the equity
method.
<TABLE>
SEGMENT INFORMATION
James River Corporation of
Virginia and Subsidiaries First Second Third Fourth Year-
(in thousands) Quarter Quarter Quarter Quarter to-date
<CAPTION>
<S> <C> <C> <C> <C> <C>
1995 Net sales:
Consumer products:
North America $609,498 $686,669 $1,296,167
Europe 357,640 422,877 780,517
Food and consumer packaging 420,313 431,568 851,881
Communications papers 301,310 325,891 627,201
Intersegment elimination (51,477) (54,898) (106,375)
Total net sales $1,637,284 $1,812,107 $3,449,391
1994 Net sales:
Consumer products:
North America $557,224 $621,370 $626,480 $617,649 $2,422,723
Europe 222,388 408,456 630,844
Food and consumer packaging 375,737 399,328 412,808 422,028 1,609,901
Communications papers 215,044 220,453 227,988 266,216 929,701
Intersegment elimination (42,502) (43,006) (44,891) (45,495) (175,894)
Total net sales $1,105,503 $1,198,145 $1,444,773 $1,668,854 $5,417,275
1995 Operating profit (loss):
Consumer products:
North America $38,425 $58,408 $96,833
Europe 3,547 10,464 14,011
Food and consumer packaging 18,020 16,463 34,483
Communications papers 44,501 60,155 104,656
Severance and other items (8,271) (8,271)
General corporate expenses (e) (9,887) (16,944) (26,831)
Income from operations $86,335 $128,546 $214,881
1994 Operating profit (loss) (f):
Consumer products:
North America $28,316 $46,991 $44,042 $24,063 $143,412
Europe 486 6,410 6,896
Food and consumer packaging 26,633 34,310 16,477 19,968 97,388
Communications papers (25,059) (26,516) (4,099) 19,854 (35,820)
Severance and other items (9,607) (9,607)
General corporate expenses (9,585) (12,320) (9,644) (23,747) (55,296)
Income from operations $20,305 $42,465 $47,262 $36,941 $146,973
</TABLE>
(e) General corporate expenses for the second quarter of 1995 included $6.7
million ($4.1 million net of tax benefits, or $.05 per share) of charges related
to consulting fees in connection with cost reduction efforts.
(f) Operating profit for the fourth quarter of 1994 included nonrecurring
charges of $24.2 million, including (i) $9.6 million of severance costs and
asset write-offs, partially offset by the reversal of prior restructure
reserves and (ii) $14.6 million of accruals for litigation and environmental
costs. Results for the domestic Consumer Products Business reflected $3.9
million of the litigation and environmental cost accruals; the remaining $10.7
million of such costs were reported as general corporate expenses.
EXHIBIT 99 (b)
PRO FORMA CONSOLIDATED STATEMENTS
OF OPERATIONS (g) Quarter Ended Six Months Ended
James River Corporation of
Virginia and Subsidiaries
(in millions, except per share amounts) June 25, 1995 June 25, 1995
Net sales $1,573.4 $2,979.6
Cost of goods sold 1,196.3 2,297.7
Selling and administrative expenses 265.0 494.3
Severance and other items 8.3
Income from operations 112.1 179.3
Interest expense 52.0 104.0
Other income, net 10.5 24.2
Income before income taxes and
minority interests 70.6 99.5
Income tax expense 30.4 42.9
Income before minority interests 40.2 56.6
Minority interests (1.7) (0.5)
Net income $38.5 $56.1
Preferred dividend requirements (14.7) (29.3)
Net income applicable to common shares $23.8 $26.8
Net income per common share $.29 $.32
Weighted average number of common shares 83.4 83.2
PRO FORMA CONSOLIDATED CONDENSED BALANCE SHEET (g)
James River Corporation of Virginia and Subsidiaries
(in millions) June 25, 1995
ASSETS:
Cash and cash equivalents $43.4
Accounts receivable 870.0
Inventories 794.6
Other current assets 144.2
Total current assets 1,852.2
Net property, plant and equipment 4,040.9
Investments in affiliates 126.7
Other assets 437.0
Goodwill 774.4
Total assets $7,231.2
LIABILITIES AND SHAREHOLDERS' EQUITY:
Accounts payable and other current liabilities $1,057.6
Current portion of long-term debt 228.6
Total current liabilities 1,286.2
Long-term debt 2,351.0
Accrued postretirement benefits other than pensions 448.0
Other long-term liabilities 278.0
Deferred income taxes 485.9
Minority interests 167.8
Preferred stock 740.3
Common shareholders' equity 1,474.0
Total liabilities and shareholders' equity $7,231.2
(g) In connection with the announced spin-off of a substantial part of
James River's Communications Papers Business and the specialty paper-
based portion of its Food & Consumer Packaging Business (the "Spin-
Off"), James River has formed a new subsidiary, Crown Vantage Inc.
("Vantage") into which the assets and liabilities of the spun-off
operations will be transferred. The pro forma consolidated statements
of operations and consolidated condensed balance sheet are based on
James River's financial statements, as adjusted to give pro forma
effect to (i) James River's receipt of cash in connection with the
Spin-Off of Vantage, (ii) the receipt of a pay-in-kind note to James
River from Vantage and (iii) the execution of the transition
agreements between James River and Vantage. The pro forma information
is presented as if the Spin-Off had been completed as of June 25,
1995, for the pro forma consolidated condensed balance sheet and as
the beginning of 1995 for each period for which pro forma consolidated
statements of operations are presented. The pro forma financial
information does not purport to represent the actual financial
position as it will finally be recorded, or the results of operations
which would actually have been reported if the Spin-Off had occurred
on the dates or for the periods indicated, or which may be reported in
the future.
