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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: May 21, 1998 (May 7, 1998)
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Commission file number 1-11803
AMERICAN PAD & PAPER COMPANY
(Exact name of registrant as specified in its charter)
Delaware 04-3164298
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
17304 Preston Road, Suite 700, Dallas, TX 75252-5613
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code: (972) 733-6200
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Item 5. Other Events.
On May 7, 1998, American Pad & Paper Company (the "Company") issued a
press release announcing first quarter 1998 results. The Company reported a net
loss of $2.1 million, or $.08 per share on net sales of $161.6 million for the
first quarter ended March 31, 1998. Comparatively, the Company reported a net
income of $4.0 million or $.14 per share, on net sales of $149.9 million for the
first quarter ended March 31, 1997. This press release is incorporated herein as
Exhibit 99.2.
Item 7. Exhibits.
99.2 Press release by the Company dated May 7, 1998.
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrants have duly caused this report to be signed on their behalf by the
undersigned hereunto duly authorized.
American Pad & Paper Company
/s/ William W. Solomon, Jr. May 21, 1998
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William W. Solomon, Jr. Date
Chief Accounting Officer
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INDEX TO EXHIBITS
EXHIBIT NO. DESCRIPTION
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99.2 Press release by the Company dated May 7, 1998.
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Exhibit 99.2
CONTACT: Gregory M. Benson
American Pad & Paper Co.
(972) 733-5421
FOR IMMEDIATE RELEASE
Robert P. Jones/Stan Froelich--Press
(212) 850-5600
Ken Pieper
(972) 663-9390
Morgen-Walke Associates
AMERICAN PAD & PAPER COMPANY
ANNOUNCES FIRST QUARTER 1998 RESULTS
May 7, 1998, Dallas, Texas--American Pad & Paper Company (NYSE:AGP) today
reported a net loss of $2.1 million, or $0.8 per share, on net sales of $161.6
million for the first quarter ended March 31, 1998. For the first quarter of
1997, the company reported net income of $4.0 million, or $.14 per share on net
sales of $149.9 million.
The company attributed the loss to continued price competition in the
industry, particularly in commodity products such as continuous form paper. In
addition, sales volume and shipments were reduced as a number of major office
superstores and national discount retail customers continued to reduce their
inventory levels.
"Since mid-November, we have taken aggressive steps to reduce our expenses,
improve product mix, and margins," said Charles G. Hanson III, Chairman and
Chief Executive Officer. "During this time, we reduced our workforce
approximately 10%, and we continue to review opportunities for operating
consolidation and efficiencies in an effort to further drive cost down."
"Another key focus has been to improve our margins through product mix,"
added Mr. Hanson. "To accomplish this we have made selective price increases,
eliminated unprofitable products, and increased our offerings to certain
customers. The effectiveness of these actions is evidenced by the fact that our
operating results improved throughout the first quarter."
"Other steps have been taken to improve the company's liquidity and we are
seeing significant progress," added Mr. Hanson. "We expanded our credit line
with our banks by $30 million and closed the quarter with more than $18 million
in cash. Accounts receivable are down by $10 million from December 1997 levels,
inventories were level with the previous quarter, and current liabilities were
decreased by $16 million."
"While we are making progress, sales volumes have been below satisfactory
levels as our key customers continue to emphasize reductions in inventories,"
stated Mr. Hanson. "Over time, we expect our planned programs to improve margins
and reduce cost leading us back to profitability."
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American Pad & Paper Co., which invented the legal pad in 1888, is a
leading manufacturer and marketer of paper-based office products in North
America. In its 22 U.S. facilities, the Company manufactures and distributes
writing pads, file folders, machine papers, envelopes and other office
products. Name brands include: Ampad, Century, Embassy, Gold Fibre, Huxley,
Karolton, Kent, Peel & Seel, SCM, Williamhouse and World Fibre.
This release contains forward-looking statements relating to future
financial results. Actual results may differ significantly as a result of
factors over which the Company has no control, including the strength of
domestic and foreign economies, slower than anticipated sales growth, price and
product competition and increases in raw material costs. Additional information
which could affect the Company's financial results is included in the Company's
prospectus on file with the Securities and Exchange Commission.
AMERICAN PAD & PAPER COMPANY
COMPARATIVE CONSOLIDATED BALANCE SHEETS
(in thousands, except per share data)
<TABLE>
<CAPTION>
(Unaudited)
Actual Actual
31-Mar-98 31-Dec-97
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ASSETS
<S> <C> <C>
Cash $ 18,356 $ 4,855
Accounts receivable 64,206 74,203
Inventories 157,115 154,359
Total current assets 256,492 250,870
Total assets 647,661 638,401
LIABILITIES AND STOCKHOLDERS' EQUITY
Total current liabilities $ 81,937 $ 98,051
Long-term debt 426,085 398,577
Total liabilities 549,069 537,735
Total stockholders' equity 98,592 100,666
Total liabilities and stockholders' equity 647,661 638,401
</TABLE>
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AMERICAN PAD & PAPER COMPANY
CONSOLIDATED STATEMENTS OF OPERATIONS
(IN THOUSANDS, EXCEPT PER SHARE DATA)
(Unaudited)
<TABLE>
<CAPTION>
Actual Actual
Three months Three months
Ended Ended
31-Mar-98 31-Mar-98
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<S> <C> <C>
Net sales $ 161,595 $ 149,834
Gross profit 19,422 28,708
Income from operations 6,437 15,392
Income before income taxes (4,255) 7,251
Net income (loss) (2,085) 3,988
Earnings per share
Basic $ (0.08) $ 0.15
Diluted n/a $ 0.14
Weighted average number of
common shares:
Basic 27,695 27,436
Diluted n/a 29,390
</TABLE>
