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 January 31, 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
----- -----
51,881,477 Common Shares were outstanding as of January 31, 1994
<PAGE> Page 1
LONGVIEW FIBRE COMPANY - CONSOLIDATED BALANCE SHEET
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(000 Omitted)
Jan. 31 Oct. 31 Jan. 31
1994 1993 1993
A S S E T S ---------- ---------- ----------
CURRENT ASSETS:
Accounts and notes receivable $75,448 $82,563 $68,648
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 13,992 14,977 13,246
Goods in process 11,205 11,231 13,256
Raw materials and supplies 34,046 33,466 29,090
Other 8,216 7,081 2,213
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Total current assets 141,907 148,318 125,703
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CAPITAL ASSETS:
Buildings, machinery and equipment at cost 1,176,713 1,164,411 1,131,530
Accumulated depreciation 563,376 548,538 513,172
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Costs to be depreciated in future years 613,337 615,873 618,358
Plant sites at cost 2,423 2,423 2,423
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615,760 618,296 620,781
Timber at cost less depletion 153,422 129,372 128,934
Roads at cost less amortization 9,113 9,198 10,170
Timberland at cost 10,990 10,264 9,691
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173,525 148,834 148,795
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Total capital assets 789,285 767,130 769,576
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OTHER ASSETS 29,454 28,925 26,017
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$960,646 $944,373 $921,296
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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 6,870 $8,363 $3,727
Accounts payable 32,547 40,219 33,524
Short-term borrowings 4,000 20,000 25,000
Payrolls payable 12,146 8,973 11,053
Federal income taxes payable 2,126 1,502 3,082
Other taxes payable 15,992 15,010 15,889
Current installments of long-term debt 39,744 19,943 5,625
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Total current liabilities 113,425 114,010 97,900
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LONG-TERM DEBT 348,486 327,486 352,400
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DEFERRED TAXES - NET 98,057 97,693 84,446
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OTHER LIABILITIES 6,857 6,389 4,559
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SHAREHOLDERS' EQUITY
Common stock, ascribed value $1.50 per share;
authorized 150,000,000 shares; issued
51,881,477; 51,881,819 and 51,682,142
shares respectively 77,822 77,823 77,523
Additional paid-in capital 3,306 3,306 --
Retained earnings 312,693 317,666 304,468
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Total shareholders' equity 393,821 398,795 381,991
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$960,646 $944,373 $921,296
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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 AND EARNINGS REINVESTED IN THE BUSINESS
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(000 Omitted)
Three Months Ended
January 31
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1994 1993
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Net sales:
Timber $43,513 $27,183
Paper and paperboard 39,821 50,033
Converted products 82,751 78,657
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166,085 155,873
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Cost of products sold, including outward freight 144,725 130,847
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Gross profit 21,360 25,026
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Selling, administrative and general expenses 13,350 11,791
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Operating profit:
Timber 27,712 14,815
Paper and paperboard (7,426) 1,826
Converted products (12,276) (3,406)
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8,010 13,235
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Other income (expense):
Interest income 83 151
Interest expensed (5,520) (6,112)
Miscellaneous 250 243
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2,823 7,517
Provision for taxes on income:
Current 681 1,248
Deferred 364 1,180
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1,045 2,428
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Net income $1,778 $5,089
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Dollars per share:
Net income $0.03 $0.10
Dividends $0.13 $0.10
Average shares outstanding in the hands
of the public (000 omitted) 51,882 51,684
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
January 31
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1994 1993
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Cash provided by (used for) operations:
Net income $1,778 $5,089
Charges to income not requiring cash -
Depreciation 15,390 15,169
Depletion and amortization 1,439 1,434
Deferred taxes - net 364 1,180
(Gain) loss on disposition of capital assets 85 191
Change in:
Inventories 431 149
Accounts and notes receivable 7,115 23,023
Accounts, payrolls and other taxes payable (1,771) (5,060)
Federal income taxes payable 624 (975)
Other (1,135) (330)
Other noncurrent assets (529) (1,449)
Other noncurrent liabilities 468 --
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Cash provided by operations 24,259 38,421
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Cash provided by (used for) investing:
Additions to: Plant and equipment (13,011) (8,092)
Timber and timberlands (26,150) (747)
Proceeds from sale of capital assets 92 124
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Cash used for investing (39,069) (8,715)
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Cash provided by (used for) financing:
Long-term debt 40,801 (10,000)
Short-term borrowings (16,000) (10,000)
Payable to bank resulting from checks intransit (1,493) (3,466)
Accounts payable for construction (1,746) (1,025)
Cash dividends (6,744) (5,168)
Purchase of common stock (8) (47)
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Cash provided by (used for) financing 14,810 (29,706)
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Increase (decrease) in cash position -- --
Cash position, beginning of period -- --
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Cash position, end of period $ -- $ --
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Supplemental disclosures of cash flow information:
Cash paid during the year for:
Interest (net of amount capitalized) $6,003 $6,766
Income taxes 1,433 2,351
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
January 31
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1994 1993
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Common stock:
Balance at beginning of period $77,823 $77,527
Ascribed value of stock purchased (1) (4)
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Balance at end of period $77,822 $77,523
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Retained earnings:
Balance at beginning of period $317,666 $304,590
Net income 1,778 5,089
Less cash dividends on common stock (6,744) (5,168)
Less purchases of common stock (7) (43)
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Balance at end of period $312,693 $304,468
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Dividends paid per share $0.13 $0.10
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Common shares:
Balance at beginning of period 51,882 51,685
Purchases (1) (3)
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Balance at end of period 51,881 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
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Three Months Ended January 31, 1994 compared with
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Three Months Ended January 31, 1993
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First quarter earnings, which were unsatisfactory, decreased 65% compared with
the first quarter 1993 and decreased 75% compared with the fourth quarter
1993. Operating results improved in the log segment of the business, but
declined in the manufacturing segments of the business.
Timber
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First quarter sales and profits improved 60% and 87% respectively compared
with the first quarter 1993 due to substantial price increases and a 30%
increase in volume sold. Operating results for the first quarter 1994
compared with the fourth quarter 1993 improved 46%. The primary reasons for
this improvement were a 6% increase in average log prices and an 8% increase
in log footage sold. During the first quarter, demand and prices were strong
in both the domestic and export markets; such strength is expected to continue.
Paper and Paperboard
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Operating results declined dramatically in the first quarter 1994 compared
with the first quarter 1993. Underutilization of mill capacity, weak prices,
increased labor costs and temporarily higher chip costs were the primary
causes for the operating loss. A 12-day shutdown was taken during the quarter
to improve the balance between incoming orders and paper machine production.
Extensive planned maintenance and repair work was completed during the
shutdown. The higher chip costs resulted from a spot purchase of high-priced
pine imported from Brazil. Although the pine has proven to be an acceptable
source of fiber, future purchases will be dependent upon satisfactory costs.
Sales declined 20% in the first quarter 1994 compared with the first quarter
1993. Volume of paperboard and paper sold declined 25% and 18% respectively.
Demand and prices were soft in the domestic and export markets. Some
paperboard price improvement is expected in the second quarter. Paper markets
remain weak.
Converted Products
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Operating results deteriorated from year-ago levels due to the increased cost
of containerboard used to manufacture boxes. Sales and volume sold increased
5% and 7%, while average price declined modestly. During the quarter, markets
remained extremely competitive.
Other
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Reduced interest expensed for the first quarter 1994 was due primarily to
lower interest rates and a lower average level of borrowing.
Income Taxes
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Taxes on income are approximately 37% and 32% of pretax income for fiscal 1994
and 1993 respectively.
Ended January 31
%
Other Data 1994 1993 CHANGE
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Sales
Logs, thousands of board feet 56,000 43,000 + 30
Lumber, thousands of board feet 5,000 4,000 + 25
Paper, tons 49,000 60,000 - 18
Paperboard, tons 18,000 24,000 - 25
Converted products, tons 127,000 119,000 + 7
Logs, $/thousand board feet $ 738 $ 611 + 21
Lumber, $/thousand board feet 385 283 + 36
Paper, $/ton FOB mill equivalent 590 598 - 1
Paperboard, $/ton FOB mill equivalent 308 323 - 5
Converted products, $/ton 653 662 - 1
<PAGE>PART I. FINANCIAL INFORMATION Page 7
Liquidity and Capital Resources
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Timberland purchases of $26,000,000 closed during the quarter causing total
debt to increase. Recent new machinery and equipment programs have raised the
capital backlog to $88,000,000 which is to be expended over the next 14
months. Adequate financing is available if needed. During the quarter, the
company purchased 342 shares of its common stock and does not anticipate
sizable purchases during the remainder of the year.
<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 I. 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 2-18-94 \s\ L. J. Holbrook
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L. J. Holbrook, Senior Vice President-Finance,
Secretary and Treasurer
Date 2-18-94 \s\ C. D. Norman
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C. D. Norman, Assistant Treasurer
<PAGE> Page 10
