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UNITED STATES
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): April 19, 1999(April 28, 1999)
AMERICAN PAD & PAPER COMPANY
(Exact name of registrant as specified in its charter)
Commission file number 1-11803
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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<PAGE>
Item 5. Other Events.
On April 19, 1999, American Pad & Paper Company (OTCBB:AMPP) (AP&P)
reported financial results for the first quarter ended March 31, 1999.
This press release is incorporated herein as Exhibit 99.026
Exhibit
99.26 Press release by the Company dated April 19, 1999.
SIGNATURE
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.
American Pad & Paper Company
April 28, 1999 /s/ David N. Pilotte
Date David N. Pilotte
Vice President and Corporate Controller
Principal Accounting Officer
<PAGE>
Exhibit 99.026
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For Immediate Release CONTACT: Mark Lipscomb
(972) 733-5415
American Pad & Paper Reports FIRST Quarter Results
DALLAS, Texas, April 19, 1999, -- American Pad & Paper Company
(OTCBB:AMPP) (AP&P) today reported financial results for the first quarter ended
March 31, 1999.
For the first quarter ended March 31, 1999, the Company reported a net
loss of $12.8 million, or 46 cents per share, on net sales of $137.6 million.
These results include previously announced plant rationalization charges
reflected in cost of goods sold totaling $1.3 million, which negatively impacted
first quarter performance by 5 cents per share. Comparable first quarter results
in 1998 were a net loss of $2.1 million, or 8 cents per share, on net sales of
$161.6 million.
During the first quarter 1999, the Company posted EBITDA performance of
$5.6 million as measured by the Company's bank agreement and reported a
cumulative nine-month EBITDA performance that exceeds the bank covenant
requirements by $7.6 million. Cost controls also had a positive effect as the
Company reduced SG&A expenses in the first quarter by $1.0 million sequentially
over the fourth quarter of 1998.
" The Company continued to make progress in the first quarter, which is
seasonally one of the slowest," said James W. Swent III, Co-Chairman and Chief
Executive Officer of the Company. "Revenue performance was at the lower end of
expectations, but gross margin and expense control helped drive EBITDA to hit
our plan for the first quarter. Inventory grew as expected due to plant
rationalization and second half 1999 seasonal sales requirements. The full year
goal remains to reduce inventory levels by $10 million year over year. Accounts
receivable balances also dropped in the first quarter by $22 million as fourth
quarter sales were collected."
"Looking forward, the goal remains to return to profitability in the second
half of 1999," said Mr. Swent. "Our plant rationalization plan remains on or
slightly ahead of schedule as we drive towards our goal of being the low-cost
producer in our industry. We are also working hard to rebuild our market share
and remain focused on expanding our business in both new and existing channels."
- more -
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Exhibit 99.026
American Pad & Paper Company is a leading manufacturer and marketer of
paper-based office products in North America. Product offerings include
envelopes, writing pads, file folders, machine papers, greeting cards and other
office products. The key operating divisions of the Company are Williamhouse,
AMPAD, and Creative Card. Company revenues in total year 1998 were $662 million.
This release contains forward-looking statements relating to future
results. Actual results may differ significantly as a result of factors over
which the Company has no control, including, but not limited to the following:
changing economic conditions, slower than anticipated sales growth, price and
product competition and changes in raw material costs. Additional information,
which could affect the Company's financial results, is included in the Company's
filings with the Securities and Exchange Commission.
***
(Tables to Follow)
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Exhibit 99.026
<TABLE>
<CAPTION>
AMERICAN PAD & PAPER COMPANY
CONSOLIDATED STATEMENTS OF OPERATIONS
(in thousands, except per share amounts)
(Unaudited)
Three Months Ended March 31,
1999 1998
<S> <C> <C>
Net sales ......................................................... $ 137,631 $ 161,595
Cost of sales ..................................................... 124,771 142,173
------------ ------------
Gross profit .................................................... 12,860 19,422
Operating expenses:
Selling and marketing ........................................... 4,880 4,689
General and administrative ...................................... 7,130 5,432
Loss on sale of accounts receivable ............................. 740 747
Amortization of intangible assets ............................... 1,286 1,587
Management fees and services .................................... 375 530
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Income (loss) from operations ..................................... (1,551) 6,437
Other income (expense):
Interest ........................................................ (10,796) (10,743)
Other income, net ............................................... 306 51
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Loss before income taxes .......................................... (12,041) (4,255)
Provision for (benefit from) income taxes ......................... -- (2,170)
------------ ------------
Loss before cumulative effect of a change in accounting principle . (12,041) (2,085)
Cumulative effect of a change in accounting principle (net of tax)* 726 --
------------ ------------
Net loss .......................................................... $ (12,767)$ (2,085)
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Basic earnings per share
Loss before cumulative effect of a change in accounting principle $ (0.43)$ (0.08)
Cumulative effect of a change in accounting principle ........... (0.03) --
------------ ------------
Net loss ........................................................ $ (0.46)$ (0.08)
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Weighted average shares outstanding:
Basic ........................................................... 27,724 27,695
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</TABLE>
* Effective January 1, 1999, the company adopted Statement of Position (SOP)
98-5 "Reporting on the costs of start-up activities."
<PAGE>
Exhibit 99.026
<TABLE>
<CAPTION>
AMERICAN PAD & PAPER COMPANY
CONSOLIDATED BALANCE SHEETS
(in thousands, except per share amounts)
(Unaudited)
March 31, December 31,
1999 1998
ASSETS
Current assets:
<S> <C> <C>
Cash .................................................. $ 1,270 $ 1,371
Accounts receivable ................................... 38,651 60,660
Inventories ........................................... 120,047 112,169
Refundable income taxes ............................... 1,700 1,700
Prepaid expenses and other current assets ............. 1,726 1,240
Deferred income taxes ................................. 40 40
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Total current assets ................................ 163,434 177,180
Property, plant and equipment ........................... 150,747 152,198
Intangible assets ....................................... 183,158 185,805
Other ................................................... 2,580 2,654
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Total assets .......................................... $ 499,919 $ 517,837
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LIABILITIES AND STOCKHOLDERS' EQUITY Current liabilities:
Current portion of long-term debt ..................... $ 1,242 $ 1,236
Accounts payable ...................................... 38,385 49,598
Accrued expenses ...................................... 45,022 47,078
Restructuring charges ................................. 5,522 5,660
Income taxes payable .................................. 300 300
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Total current liabilities ........................... 90,471 103,872
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Long-term debt .......................................... 382,383 373,675
Deferred income taxes ................................... 16,701 16,972
Other ................................................... 1,101 1,288
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Total liabilities .................................... 490,656 495,807
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Commitments and contingencies
Stockholders' equity:
Preferred stock, 150,000 shares authorized,
no shares issued and outstanding, respectively ....... -- --
Common stock, voting, $.01 par value, 75,000,000
shares authorized, 27,724,045 and 27,724,045
shares issues and outstanding, respectively ......... 277 277
Additional paid-in capital .............................. 301,287 301,287
Accumulated deficit ..................................... (292,301) (279,534)
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Total stockholders' equity .......................... 9,263 22,030
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Total liabilities and stockholders' equity .......... $ 499,919 $ 517,837
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</TABLE>
