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): January 25, 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 January 25, 1995, James River Corporation of Virginia
("James River" or the "Company") published a press release
announcing the Company's results for the fourth quarter and
year ended December 25, 1994. The Company published its
consolidated balance sheets as of December 25, 1994 and
December 26, 1993, its consolidated statements of operations
for the quarters (13 weeks) and years (52 weeks) ended
December 25, 1994 and December 26, 1993, its consolidated
statements of cash flows for the years ended December 25,
1994 and December 26, 1993, and certain segment information
for the years then ended. 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 January 25, 1995, published by
the registrant -- 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/ James R. Hudson, Jr.
James R. Hudson, Jr.
Vice President, Corporate Controller
Date: January 25, 1995
<TABLE> <S> <C>
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<LEGEND>
This schedule contains summary financial information extracted from James River
Corporation of Virginia's December 25, 1994 financial statements, as reported on
its January 25, 1995 Form 8-K, 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> YEAR
<FISCAL-YEAR-END> DEC-25-1994
<PERIOD-END> DEC-25-1994
<CASH> 59,296
<SECURITIES> 0
<RECEIVABLES> 913,501
<ALLOWANCES> 0
<INVENTORY> 844,111
<CURRENT-ASSETS> 1,975,530
<PP&E> 6,925,036
<DEPRECIATION> 2,245,137
<TOTAL-ASSETS> 7,924,328
<CURRENT-LIABILITIES> 1,568,886
<BONDS> 2,667,960
<COMMON> 8,170
0
740,303
<OTHER-SE> 1,413,148
<TOTAL-LIABILITY-AND-EQUITY> 7,924,328
<SALES> 5,417,275
<TOTAL-REVENUES> 5,417,275
<CGS> 4,451,977
<TOTAL-COSTS> 4,451,977
<OTHER-EXPENSES> 9,607
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 185,624
<INCOME-PRETAX> (9,751)
<INCOME-TAX> 4,407
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<EPS-PRIMARY> (.72)
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News Release Contact: Celeste Gunter (Financial)
(804) 649-4307
Richard B. Elder (Media)
(804) 343-4785
JAMES RIVER CORPORATION REPORTS FOURTH QUARTER 1994 RESULTS
RICHMOND, VIRGINIA, January 25, 1995 -- James River Corporation
today reported a net loss of $18.7 million, or $.41 per share after
preferred dividends, for its fourth quarter ended December 25, 1994. The
fourth quarter results included nonrecurring pretax charges totaling
$24.2 million ($16.2 million net of income tax benefits, or $.20 per
share). Excluding these charges, fourth quarter results were a net loss
of $2.5 million, or $.21 per share after preferred dividends. By
comparison, the company reported a net loss of $5.1 million, or $.16 per
share after preferred dividends, in the fourth quarter of 1993 and a net
loss of $0.1 million, or $.18 per share after preferred dividends, in the
third quarter of this year. Net sales for the fourth quarter increased
to $1.7 billion, up 45% from the $1.2 billion reported in the prior year.
Net sales increased by $0.4 billion, or 35% , due to the 1994
consolidation of the company's European Consumer Products Business. The
remaining sales growth of 10% represented stronger pricing or unit
volumes in many product lines.
The nonrecurring pretax charges of $24.2 million included $9.6
million of accruals for severance costs and associated asset write-offs,
partially offset by the reversal of remaining 1992 restructuring program
reserves. The remaining $14.6 million of nonrecurring charges related to
accruals for litigation costs and for environmental liabilities,
principally at inactive facilities.
Income from operations of $36.9 million reported in the fourth
quarter included the full impact of the $24.2 million of nonrecurring
charges. Excluding these charges, recurring operating results of $61.1
million were more than triple 1993's fourth quarter operating profits of
$18.7 million and approximately 30% above third quarter levels.
Fourth quarter operating profits of $24.1 million for the
domestic Consumer Products Business included approximately $3.9 million
of nonrecurring items. Excluding these charges, results improved
approximately 35% over the $20.6 million reported in the prior year,
reflecting the impact of cost reduction initiatives and improving pricing
in commercial towel and tissue markets. Results declined from third
quarter levels, however, due to the combination of normal seasonality,
increasing raw materials costs, and other manufacturing and distribution
costs. During the fourth quarter, the company announced price increases
on Quilted Northern(r) bathroom tissue (5%), Brawny(r) paper towels (7%), and
Dixie(r) tabletop products (7%), each effective as of the beginning of
fiscal 1995.
Fourth quarter operating profits of $6.4 million for the
European Consumer Products Business compared favorably with the $0.5
million results posted in the third quarter, as better pricing began to
be realized in European markets. Further price increases are in progress
to offset rising worldwide pulp costs. Jamont N.V., which represents
James River's European Consumer Products Business, became a consolidated
subsidiary during the third quarter of 1994, when James River increased
its ownership interest from 43.2% to 86.4%.
Operating income for the Food & Consumer Packaging Business
increased to $20.0 million in the fourth quarter, compared to $16.5
million in the strike-impacted third quarter. Results declined, however,
compared to the $28.5 million reported in last year's fourth quarter, as
dramatic increases in the cost of raw materials, including plastic
resins, waste paper, pulp, paperboard, films, and foils, outpaced selling
price recovery during the second half of 1994.
The Communications Papers Business produced fourth quarter
operating profits of $19.9 million, which marked their first profitable
quarter since late 1991. These results compared with operating losses of
$19.4 million in last year's fourth quarter and $4.1 million in the third
quarter. Rapidly improving market conditions and pricing, along with
ongoing cost reductions and product upgrades, contributed to this
turnaround in business performance.
Compared to the prior year, improvements in fourth quarter
income from operations were more than offset by a combination of
increased interest expense, reduced effective income tax benefits, and
increased preferred dividends, which resulted in the overall increase in
per share losses. Interest expense and preferred dividend increases
resulted from the 1994 acquisition and consolidation of Jamont, which was
financed with a combination of debt securities and preferred stock.
For the full year, the company reported a net loss of $13.0
million, or $.72 per share, which included the fourth quarter
nonrecurring charges of $16.2 million net of taxes, or $.20 per share, as
well as after-tax income of $5.4 million, or $.07 per share, for interest
on income tax refunds. By comparison, the company reported a net loss
of $0.3 million, or $.40 per share in 1993. Excluding nonrecurring gains
and charges in both 1993 and 1994, the company lost $2.2 million, or $.59
per share after preferred dividends, in 1994, compared with net income of
$3.3 million, or a loss of $.36 per share after preferred dividends, in
1993. Results declined in 1994 principally because of the near-term
dilutive effect of the acquisition of Jamont.
Excluding nonrecurring items, income from operations for the
full year increased to $171.2 million in 1994 from $114.0 million in
1993, with substantial improvements posted in the domestic Consumer
Products Business and the Communications Papers Business. Offsetting the
improved operating profits were increases in interest expense and
preferred dividends of $48.0 million and $13.0 million, respectively.
Although cash provided by operating activities declined from
$440.6 million in 1993 to $411.1 million in 1994, free cash flow (cash
provided by operations, less cash used for investing activities and
dividends) remained positive at $1.5 million, before the investment in
Jamont.
Commenting on fourth quarter results and the outlook for 1995,
Bob Williams, Chairman and Chief Executive Officer noted, "During 1994,
pricing improvements were experienced earliest and most dramatically in
the more commodity-oriented categories of the pulp and paper industry,
such as market pulp, linerboard, newsprint, and coated and uncoated
business and printing papers. Pricing improvement in the consumer-
related categories in which James River is most heavily focused,
including towel and tissue and tabletop products and packaging for food
and other consumer applications, generally occur later in the cycle, and
are currently being implemented. Even with pricing delays for many of
our product lines, income from operations for the fourth quarter was
substantially better than last year. Momentum is thus building for
increasingly favorable comparisons as 1995 progresses."
CONSOLIDATED STATEMENTS OF OPERATIONS
James River Corporation of Virginia and Subsidiaries
For the Quarters (13 Weeks) and Years (52 Weeks) Ended
December 25, 1994 and December 26, 1993
(in thousands, except per share amounts)
Fourth Quarter Year
1994 (a) 1993 (b) 1994 (a) 1993 (b)
Net sales $1,668,854 $1,154,929 $5,417,275 $4,650,195
Cost of goods sold 1,343,460 968,276 4,451,977 3,858,586
Selling and administrative
expenses 278,846 167,955 808,718 677,586
Severance and other items 9,607 9,607
Income from operations(c) 36,941 18,698 146,973 114,023
Interest expense 62,290 33,332 185,624 137,594
Other income, net (d) 4,552 6,243 28,900 40,235
Income (loss) before income
taxes and minority interests (20,797) (8,391) (9,751) 16,664
Income tax expense (benefit):
Tax on current income (e) (1,048) (2,868) 4,407 7,927
Effect of tax rate change (f) 10,981
Total income tax
expense (benefit) (1,048) (2,868) 4,407 18,908
Loss before minority interests (19,749) (5,523) (14,158) (2,244)
Minority interests 1,075 386 1,199 1,898
Net loss $(18,674) $(5,137) $(12,959) $(346)
Preferred dividend requirements (14,994) (8,204) (45,839) (32,822)
Net loss applicable to
common shares $(33,668) $(13,341) $(58,798) $(33,168)
Net loss per common share $(.41) $(.16) $(.72) $(.40)
Weighted average number of
common shares 81,695 81,628 81,671 81,609
See the accompanying footnotes.
CONSOLIDATED STATEMENTS OF OPERATIONS (continued)
________________
(a) 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 for five months of 1994.
(b) Certain amounts in the prior year's financial statements have been
reclassified to conform to the current year's presentation.
(c) Income from operations for the fourth quarter of 1994 includes
nonrecurring charges of $24.2 million ($16.2 million net of tax
benefits, or $.20 per share), including (i) $9.6 million of severance
costs and asset write-offs, partially offset by the reversal of
remaining 1992 restructuring program reserves and (ii) $14.6 million of
accruals for litigation and environmental costs. For segment reporting
purposes, $3.9 million of the litigation and environmental cost accruals
are reflected in the results for the domestic Consumer Products
Business; the remaining $10.7 million of such costs have been reported
as general corporate expenses.
(d) Other income for 1994 includes $9.0 million ($5.4 million after
taxes, or $.07 per share) of interest income on tax refunds. Other
income for 1993 includes $14.3 million ($8.7 million after taxes, or
$.11 per share) of such interest income and 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.
(e) The fourth quarter and annual 1994 effective tax rates differed
from the federal statutory tax rate primarily because of nondeductible
goodwill amortization expense and certain net foreign losses for which
no tax benefits are currently available.
(f) Income tax expense for 1993 includes an $11 million charge ($.13
per share) to increase the deferred tax liability for the effect of the
increase in the federal income tax rate from 34% to 35%.
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:
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
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:
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
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)
December December
25, 26,
1994 1993
ASSETS
Current assets:
Cash and short-term securities $59,296 $23,620
Accounts receivable 913,501 422,894
Inventories 844,111 666,464
Prepaid expenses and other current assets 63,496 22,939
Deferred income taxes 95,126 83,538
Net assets held for sale 62,868
Total current assets 1,975,530 1,282,323
Net property, plant and equipment 4,679,899 3,571,492
Investments in affiliates 125,097 519,448
Other assets 367,770 324,724
Goodwill 776,032 153,315
Total assets $7,924,328 $5,851,302
LIABILITIES AND CAPITAL
Current liabilities:
Accounts payable $597,141 $252,144
Accrued liabilities 513,599 364,048
Income taxes payable 11,647 4,463
Short-term borrowings 225,132
Current portion of long-term debt 221,367 97,287
Accrued restructuring liability 63,134
Total current liabilities 1,568,886 781,076
Long-term debt 2,667,960 1,942,836
Accrued postretirement benefits other than pensions 545,009 541,823
Other long-term liabilities 231,129 179,956
Deferred income taxes 594,793 430,421
Minority interests 154,930 7,009
Preferred stock 740,303 454,108
Common stock, shares outstanding
1994--81,695 and 1993--81,628 8,170 8,163
Additional paid-in capital 1,211,904 1,219,043
Retained earnings 201,244 286,867
Total liabilities and shareholders' equity $7,924,328 $5,851,302
CONSOLIDATED STATEMENTS OF CASH FLOWS
James River Corporation of Virginia and Subsidiaries
For the Years (52 Weeks) Ended December 25, 1994 and December 26, 1993
(in thousands)
1994 1993
Operating activities:
Net loss $(12,959) $(346)
Depreciation expense and cost of timber
harvested 398,422 358,431
Deferred income tax provision (benefit) (4,598) 11,856
Undistributed earnings of unconsolidated
affiliates (13,698) (6,582)
Severance and other items 9,607
Retirement benefit expense in excess of
funding 14,165 34,688
Amortization of goodwill 12,056 4,714
Change in current assets and liabilities:
Accounts receivable (25,452) (4,132)
Inventories 46,250 13,796
Other current assets (17,583) 14,944
Current liabilities (19,292) (374)
Other, net 24,223 13,581
Cash provided by operating activities 411,141 440,576
Investing activities:
Expenditures for property, plant and
equipment (351,656) (331,065)
Cash paid for acquisitions, net (538,009) (192,736)
Cash received from sale of assets 34,573 130,650
Investments in affiliates (11,906) 1,856
Cash received on redemption of SCI
preferred stock 47,050
Other, net 7,749 10,260
Cash used for investing activities (859,249) (333,985)
Financing activities:
Additions to long-term debt 349,490 456,220
Increase in short-term borrowings 89,982
Payments of long-term debt (145,191) (808,848)
Premiums paid on early extinguishment of debt (24,200)
Preferred stock issued, net of issuance costs 278,754
Dividends paid and other, net (89,251) (81,635)
Cash provided by (used for) financing
activities 483,784 (458,463)
Increase (decrease) in cash and short-term
securities $35,676 $(351,872)
FINANCIAL SUMMARY
James River Corporation of Virginia and Subsidiaries
For the Quarters (13 Weeks) and Years (52 Weeks) Ended
December 25, 1994 and December 26, 1993
(in thousands, except per share amounts)
Fourth Quarter Year
1994 (a) 1993 1994 (a)(b) 1993 (c)
Net sales $1,668,854 $1,154,929 $5,417,275 $4,650,195
Income from operations 36,941 18,698 146,973 114,023
Net loss (18,674) (5,137) (12,959) (346)
Net loss per common
share $(.41) $(.16) $(.72) $(.40)
(a) Includes nonrecurring pretax charges of $24.2 million ($16.2
million net of tax benefits, or $.20 per share) for severance costs,
asset write-offs, and litigation and environmental accruals,
partially offset by the reversal of remaining 1992 restructuring
program reserves.
(b) Includes nonrecurring pretax income of $9.0 million ($5.4
million after taxes, or $.07 per share) for interest income on tax
refunds.
(c) Includes nonrecurring pretax income of $12.1 million ($7.4
million after taxes, or $.09 per share) for interest income on tax
refunds, net of the write-off of an investment. Also includes $11
million of income tax expense ($.13 per share) for the adjustment of
deferred tax liabilities caused by the 1% federal income tax rate
increase.
