UNITED STATES SECURITIES AND EXCHANGE COMMISSION
Washington, D. C. 20549
FORM 10-Q
QUARTERLY REPORT PURSUANT TO SECTION 13 or 15(d)
OF THE SECURITIES EXCHANGE ACT OF 1934
For Quarter Ended April 30, 1994 Commission file number 0-1370
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Longview Fibre Company
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(Exact name of registrant as specified in its charter)
Washington 91-0298760
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(State or other jurisdiction of (I. R. S. Employer
incorporation or organization) Identification No.)
P. O. Box 639, Longview, Washington 98632
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(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code (206) 425-1550
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Not Applicable
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Former name, former address and former fiscal year, if changed since last report
Indicate by check mark whether the registrant (1) has filed all reports
required to be filed by Section 13 or 15(d) of the Securities Exchange Act of
1934 during the preceding 12 months (or for such shorter period that the
registrant was required to file such reports), and (2) has been subject to
such filing requirements for the past 90 days. Yes X No
----- -----
51,877,262 Common Shares were outstanding as of April 30, 1994
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LONGVIEW FIBRE COMPANY - CONSOLIDATED BALANCE SHEET
- - ---------------------------------------------------
(000 Omitted)
Apr. 30 Oct. 31 Apr. 30
1994 1993 1993
A S S E T S ---------- ---------- ----------
CURRENT ASSETS:
Accounts and notes receivable $82,877 $82,563 $76,556
Allowance for doubtful accounts (1,000) (1,000) (750)
Inventories, at lower of cost or market; costs
are based on last-in, first-out method except
for supplies at current averages
Finished goods 15,374 14,977 13,597
Goods in process 11,282 11,231 12,413
Raw materials and supplies 33,702 33,466 30,781
Other 8,191 7,081 1,732
---------- ---------- ----------
Total current assets 150,426 148,318 134,329
---------- ---------- ----------
CAPITAL ASSETS:
Buildings, machinery and equipment at cost 1,189,859 1,164,411 1,137,519
Accumulated depreciation 576,007 548,538 524,619
---------- ---------- ----------
Costs to be depreciated in future years 613,852 615,873 612,900
Plant sites at cost 2,423 2,423 2,423
---------- ---------- ----------
616,275 618,296 615,323
Timber at cost less depletion 151,932 129,372 129,176
Roads at cost less amortization 9,024 9,198 9,613
Timberland at cost 12,304 10,264 9,743
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173,260 148,834 148,532
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Total capital assets 789,535 767,130 763,855
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OTHER ASSETS 31,660 28,925 26,551
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$971,621 $944,373 $924,735
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L I A B I L I T I E S A N D S H A R E H O L D E R S ' E Q U I T Y
CURRENT LIABILITIES:
Payable to bank resulting from
checks in transit 13,696 $8,363 $7,691
Accounts payable 36,740 40,219 39,064
Short-term borrowings 5,000 20,000 19,000
Payrolls payable 11,916 8,973 11,863
Federal income taxes payable 2,047 1,502 3,632
Other taxes payable 14,811 15,010 14,662
Current installments of long-term debt 35,744 19,943 5,625
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Total current liabilities 119,954 114,010 101,537
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LONG-TERM DEBT 342,486 327,486 342,400
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DEFERRED TAXES - NET 100,871 97,693 86,061
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OTHER LIABILITIES 7,326 6,389 4,559
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SHAREHOLDERS' EQUITY
Common stock, ascribed value $1.50 per share;
authorized 150,000,000 shares; issued
51,877,262; 51,881,819 and 51,681,737
shares respectively 77,816 77,823 77,523
Additional paid-in capital 3,306 3,306 --
Retained earnings 319,862 317,666 312,655
---------- ---------- ----------
Total shareholders' equity 400,984 398,795 390,178
---------- ---------- ----------
$971,621 $944,373 $924,735
========== ========== ==========
The accompanying note is an integral part of these financial statements.
<PAGE>PART I. FINANCIAL INFORMATION Page 2
LONGVIEW FIBRE COMPANY - CONSOLIDATED STATEMENT OF INCOME
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(000 Omitted)
Three Months Ended Six Months Ended
April 30 April 30
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1994 1993 1994 1993
---------- ---------- ---------- ----------
Net sales:
Timber $54,790 $50,152 $98,303 $77,335
Paper and paperboard 49,244 46,652 89,065 96,685
Converted products 85,149 82,241 167,900 160,898
---------- ---------- ---------- ----------
189,183 179,045 355,268 334,918
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Cost of products sold, including
outward freight 149,082 141,129 293,807 271,976
---------- ---------- ---------- ----------
Gross profit 40,101 37,916 61,461 62,942
---------- ---------- ---------- ----------
Selling, administrative
and general expenses 12,910 12,866 26,260 24,657
---------- ---------- ---------- ----------
Operating profit:
Timber 35,030 33,916 62,742 48,731
Paper and paperboard (3,297) (2,689) (10,723) (863)
Converted products (4,542) (6,177) (16,818) (9,583)
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27,191 25,050 35,201 38,285
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Other income (expense):
Interest income 178 82 261 233
Interest expensed (5,665) (5,621) (11,185) (11,733)
Miscellaneous 496 107 746 350
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22,200 19,618 25,023 27,135
Provision for taxes on income:
Current 5,400 4,640 6,081 5,888
Deferred 2,814 1,615 3,178 2,795
---------- ---------- ---------- ----------
8,214 6,255 9,259 8,683
---------- ---------- ---------- ----------
Net income $13,986 $13,363 $15,764 $18,452
========== ========== ========== ==========
Dollars per share:
Net income $0.27 $0.26 $0.30 $0.36
Dividends $0.13 $0.10 $0.26 $0.20
Average shares outstanding in the
hands of the public (000 omitted) 51,881 51,682 51,882 51,683
The accompanying note is an integral part of these financial statements.
<PAGE>PART I. FINANCIAL INFORMATION Page 3
LONGVIEW FIBRE COMPANY - CONSOLIDATED STATEMENT OF CASH FLOWS
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(000 Omitted)
Three Months Ended Six Months Ended
April 30 April 30
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1994 1993 1994 1993
---------- ---------- ---------- ----------
Cash provided by (used for) operations:
Net income $13,986 $13,363 $15,764 $18,452
Charges to income not
requiring cash -
Depreciation 15,473 15,125 30,863 30,294
Depletion and amortization 1,989 1,665 3,428 3,099
Deferred taxes - net 2,814 1,615 3,178 2,795
(Gain) loss on disposition of
capital assets 1,048 220 1,133 411
Change in:
Inventories (1,115) (1,199) (684) (1,050)
Accounts and notes receivable (7,429) (7,908) (314) 15,115
Accounts, payrolls and other
taxes payable 2,397 5,358 626 298
Federal income taxes payable (79) 550 545 (425)
Other 25 481 (1,110) 151
Other noncurrent assets (2,206) (534) (2,735) (1,983)
Other noncurrent liabilities 469 -- 937 --
---------- ---------- ---------- ----------
Cash provided by operations 27,372 28,736 51,631 67,157
---------- ---------- ---------- ----------
Cash provided by (used for) investing:
Additions to: Plant and equipment (17,415) (9,954) (30,426) (18,046)
Timber and timberlands (1,743) (1,424) (27,893) (2,171)
Proceeds from sale of capital assets 398 89 490 213
---------- ---------- ---------- ----------
Cash used for investing (18,760) (11,289) (57,829) (20,004)
---------- ---------- ---------- ----------
Cash provided by (used for) financing:
Long-term debt (10,000) (10,000) 30,801 (20,000)
Short-term borrowings 1,000 (6,000) (15,000) (16,000)
Payable to bank resulting from
checks intransit 6,826 3,964 5,333 498
Accounts payable for construction 385 (235) (1,361) (1,260)
Cash dividends (6,745) (5,169) (13,489) (10,337)
Purchase of common stock (78) (7) (86) (54)
---------- ---------- ---------- ----------
Cash provided by (used for)
financing (8,612) (17,447) 6,198 (47,153)
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Increase (decrease) in cash position -- -- -- --
Cash position, beginning of period -- -- -- --
---------- ---------- ---------- ----------
Cash position, end of period $ -- $ -- $ -- $ --
========== ========== ========== ==========
Supplemental disclosures of
cash flow information:
Cash paid during the year for:
Interest (net of amount capitalized) $5,174 $5,361 $11,177 $12,127
Income taxes 3,750 3,854 5,183 6,205
The accompanying note is an integral part of these financial statements.
<PAGE>PART I. FINANCIAL INFORMATION Page 4
LONGVIEW FIBRE COMPANY - CONSOLIDATED STATEMENT OF SHAREHOLDERS' EQUITY
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(000 Omitted)
Three Months Ended Six Months Ended
April 30 April 30
--------------------- ---------------------
1994 1993 1994 1993
---------- ---------- ---------- ----------
Common stock:
Balance at beginning of period $77,822 $77,523 $77,823 $77,527
Ascribed value of stock purchased (6) -- (7) (4)
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Balance at end of period $77,816 $77,523 $77,816 $77,523
========== ========== ========== ==========
Additional paid-in capital:
Balance at beginning of period $3,306 -- $3,306 --
---------- ---------- ---------- ----------
Balance at end of period $3,306 -- $3,306 --
========== ========== ========== ==========
Retained earnings:
Balance at beginning of period $312,693 $304,468 $317,666 $304,590
Net income 13,986 13,363 15,764 18,452
Less cash dividends on common stock (6,745) (5,169) (13,489) (10,337)
Less purchases of common stock (72) (7) (79) (50)
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Balance at end of period $319,862 $312,655 $319,862 $312,655
========== ========== ========== ==========
Dividends paid per share $0.13 $0.10 $0.26 $0.20
========== ========== ========== ==========
Common shares:
Balance at beginning of period 51,881 51,682 51,882 51,685
Purchases (4) -- (5) (3)
---------- ---------- ---------- ----------
Balance at end of period 51,877 51,682 51,877 51,682
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The accompanying note is an integral part of these financial statements.
<PAGE>PART I. FINANCIAL INFORMATION Page 5
NOTE 1: The consolidated interim financial statements have been prepared by
the company, without audit and subject to year-end adjustment, in accordance
with generally accepted accounting principles, except that certain
information and footnote disclosure made in the latest annual report have
been condensed or omitted for the interim statements. Accordingly, these
statements should be read in conjunction with the company's latest annual
report. Certain costs of a normal recurring nature are estimated for the
full year and allocated in interim periods based on estimates of operating
time expired, benefit received, or activity associated with the interim
period. The consolidated financial statements reflect all adjustments which
are, in the opinion of management, necessary for fair presentation.
<PAGE>PART I. FINANCIAL INFORMATION Page 6
LONGVIEW FIBRE COMPANY
MANAGEMENT'S DISCUSSION AND ANALYSIS
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Consolidated Statement of Income
--------------------------------
Three and Six Months Ended April 30, 1994 compared with
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Three and Six Months Ended April 30, 1993
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Net income increased 5% for the second quarter 1994, but decreased 15% for
year-to-date 1994 as compared with like periods in 1993. Operating results
improved in the timber segment and the converted products segment of the
business during the second quarter.
Timber
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Operating profits and sales improved 3% and 9% for the second quarter 1994 as
compared with the second quarter 1993 due to a 10% increase in log volume
sold. Increased operating profits of 29% for the year-to-date period resulted
from a 19% increase in log volume sold and a 7% increase in average price.
During the quarter, demand and prices were at good levels in both the export
and domestic markets. At the present time, there is an adequate supply of
logs for domestic mills in the region; accordingly, prices have declined
modestly. Export markets remain good, but prices for certain log sorts have
declined slightly. As a result, third quarter harvest levels may be reduced.
Paper and Paperboard
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Second quarter 1994 operating results decreased 23% compared with the second
quarter 1993 due primarily to lower average selling prices caused by
proportionately more tonnage sold in the export market. As compared to
year-ago levels, second quarter sales and volume sold increased 6% and 19%
respectively, while average paperboard prices declined 10%. Unsatisfactory
year-to-date operating results were caused by high first quarter costs and
lower prices throughout the period.
Longview primary facilities operated at 86% of capacity during the second
quarter 1994. The rate of incoming orders improved significantly compared
with the second quarter 1993 due to improved export demand for paperboard.
Export paperboard prices have been at depressed levels, but increases were
implemented during the second quarter. Further price improvement is expected.
Paper markets remain weak.
Converted Products
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Sales improved 4% for the second quarter and year-to-date 1994 as compared
with like periods in 1993. Operating losses were reduced due to lower costs
of containerboard used to manufacture boxes, increased volume and a better
product mix.
Although markets remain competitive, improvements continue to be made in
product and customer mix.
Other
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Increased interest expensed for the second quarter was due to a higher level
of borrowing which was substantially offset by lower interest rates.
Income Taxes
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Taxes on income are approximately 37% and 32% of pretax income for fiscal 1994
and 1993 respectively.
<PAGE>PART I. FINANCIAL INFORMATION Page 7
Three Months Six Months
Ended April 30 Ended April 30
% %
Other Data 1994 1993 Change 1994 1993 Change
- - ---------- ---------------------- ----------------------
Sales
Logs, thousands of board feet 67,000 61,000 +10 124,000 104,000 +19
Lumber, thousands of board feet 8,000 7,000 +14 13,000 11,000 +18
Paper, tons 53,000 57,000 - 7 102,000 117,000 -13
Paperboard, tons 41,000 22,000 +86 59,000 46,000 +28
Converted products, tons 128,000 124,000 + 3 255,000 243,000 + 5
Logs, $/thousand board feet $ 769 $ 771 -- $ 755 $ 706 + 7
Lumber, $/thousand board feet 382 371 + 3 383 338 +13
Paper, $/ton FOB mill equivalent 594 596 -- 592 597 - 1
Paperboard, $/ton FOB mill equiv. 294 326 -10 298 324 - 8
Converted products, $/ton 665 661 + 1 659 661 --
Liquidity and Capital Resources
-------------------------------
Capital expenditures for the year were above available funds from cash flow
and, therefore, increased total borrowing. Due to recent new machinery and
equipment programs, the capital backlog is $83,000,000 which is expected to be
expended over the next 12 months. Adequate financing is available. During
the quarter, the company purchased 4,215 shares of its common stock.
<PAGE>PART I. FINANCIAL INFORMATION Page 8
LONGVIEW FIBRE COMPANY
ITEM 1 LEGAL PROCEEDINGS
Nothing to report.
ITEM 2 CHANGES IN SECURITIES
Nothing to report.
ITEM 3 DEFAULTS UPON SENIOR SECURITIES
Nothing to report.
ITEM 4 SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
Nothing to report.
ITEM 5 OTHER INFORMATION
Nothing to report.
ITEM 6 EXHIBITS AND REPORTS ON FORM 8-K
Nothing to report.
<PAGE>PART II. OTHER INFORMATION Page 9
LONGVIEW FIBRE COMPANY
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 thereunto duly authorized.
LONGVIEW FIBRE COMPANY
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(Registrant)
Date May 26, 1994 \s\ L. J. Holbrook
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L. J. Holbrook, Senior Vice President-Finance,
Secretary and Treasurer
Date May 26, 1994 \s\ C. D. Norman
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C. D. Norman, Assistant Treasurer
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