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, 1995 Commission file number 0-1370
------------------------ ----------
Longview Fibre Company
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(Exact name of registrant as specified in its charter)
Washington 91-0298760
----------------------------------- -----------------------------------
(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 (360) 425-1550
------------------------------
Not Applicable
--------------------------------------------------------------------------------
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
----- -----
51,790,167 Common Shares were outstanding as of April 30, 1995
Page 1
<PAGE>
LONGVIEW FIBRE COMPANY - CONSOLIDATED BALANCE SHEET
---------------------------------------------------
(000 Omitted)
Apr. 30 Oct. 31 Apr. 30
1995 1994 1994
A S S E T S ----------- ----------- ----------
CURRENT ASSETS:
Accounts and notes receivable $104,694 $101,190 $82,877
Allowance for doubtful accounts 1,000 1,000 1,000
Inventories, at lower of cost or market; costs
are based on last-in, first-out method except
for supplies at current averages
Finished goods 18,885 15,106 15,374
Goods in process 15,751 11,390 11,282
Raw materials and supplies 39,383 40,809 33,702
Other 9,839 7,597 8,191
----------- ----------- ----------
Total current assets 187,552 175,092 150,426
----------- ----------- ----------
CAPITAL ASSETS:
Buildings, machinery and equipment at cost 1,281,185 1,230,784 1,189,859
Accumulated depreciation 626,997 599,342 576,007
----------- ----------- ----------
Costs to be depreciated in future years 654,188 631,442 613,852
Plant sites at cost 2,749 2,423 2,423
----------- ----------- ----------
656,937 633,865 616,275
Timber at cost less depletion 184,476 158,659 151,932
Roads at cost less amortization 8,965 9,415 9,024
Timberland at cost 16,161 13,570 12,304
----------- ----------- ----------
209,602 181,644 173,260
----------- ----------- ----------
Total capital assets 866,539 815,509 789,535
----------- ----------- ----------
OTHER ASSETS 32,301 31,448 31,660
----------- ----------- ----------
$1,086,392 $1,022,049 $971,621
=========== =========== ==========
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 $6,573 $12,505 $13,696
Accounts payable 47,572 52,361 36,740
Short-term borrowings 40,000 1,000 5,000
Payrolls payable 12,252 9,862 11,916
Federal income taxes payable 1,562 2,929 2,047
Other taxes payable 14,096 14,680 14,811
Current installments of long-term debt 15,994 45,994 35,744
----------- ----------- ----------
Total current liabilities 138,049 139,331 119,954
----------- ----------- ----------
LONG-TERM DEBT 397,492 366,492 342,486
----------- ----------- ----------
DEFERRED TAXES - NET 112,249 103,234 100,871
----------- ----------- ----------
OTHER LIABILITIES 9,914 8,739 7,326
----------- ----------- ----------
SHAREHOLDERS' EQUITY:
Common stock, ascribed value $1.50 per share;
authorized 150,000,000 shares; issued
51,790,167; 51,830,297 and 51,877,262
shares respectively 77,685 77,745 77,816
Additional paid-in capital 3,306 3,306 3,306
Retained earnings 347,697 323,202 319,862
----------- ----------- ----------
Total shareholders' equity 428,688 404,253 400,984
----------- ----------- ----------
$1,086,392 $1,022,049 $971,621
=========== =========== ==========
The accompanying note is an integral part of these financial statements.
PART I. FINANCIAL INFORMATION Page 2
<PAGE>
LONGVIEW FIBRE COMPANY - CONSOLIDATED STATEMENT OF INCOME
-----------------------------------------------------------
(000 Omitted)
Three Months Ended Six Months Ended
April 30 April 30
---------------------- ----------------------
1995 1994 1995 1994
---------- ----------- ----------- ----------
Net sales:
Timber $53,221 $54,790 $99,432 $98,303
Paper and paperboard 73,862 49,244 144,293 89,065
Converted products 107,132 85,149 218,009 167,900
---------- ----------- ----------- ----------
234,215 189,183 461,734 355,268
---------- ----------- ----------- ----------
Cost of products sold, including
outward freight 176,518 149,082 355,986 293,807
---------- ----------- ----------- ----------
Gross profit 57,697 40,101 105,748 61,461
---------- ----------- ----------- ----------
Selling, administrative
and general expenses 14,691 12,910 29,294 26,260
---------- ----------- ----------- ----------
Operating profit:
Timber 31,744 35,030 59,127 62,742
Paper and paperboard 4,856 (3,297) 5,444 (10,723)
Converted products 6,406 (4,542) 11,883 (16,818)
---------- ----------- ----------- ----------
43,006 27,191 76,454 35,201
---------- ----------- ----------- ----------
Other income (expense):
Interest income 120 178 259 261
Interest expensed (7,087) (5,665) (14,270) (11,185)
Miscellaneous 318 496 605 746
---------- ----------- ----------- ----------
36,357 22,200 63,048 25,023
Provision for taxes on income:
Current 8,591 5,400 14,943 6,081
Deferred 5,224 2,814 9,015 3,178
---------- ----------- ----------- ----------
13,815 8,214 23,958 9,259
---------- ----------- ----------- ----------
Net income $22,542 $13,986 $39,090 $15,764
========== =========== =========== ==========
Dollars per share:
Net income $0.44 $0.27 $0.75 $0.30
Dividends $0.14 $0.13 $0.27 $0.26
Average shares outstanding in the
hands of the public (000 omitted) 51,795 51,881 51,803 51,882
The accompanying note is an integral part of these financial statements.
PART I. FINANCIAL INFORMATION Page 3
<PAGE>
LONGVIEW FIBRE COMPANY - CONSOLIDATED STATEMENT OF CASH FLOWS
-------------------------------------------------------------
(000 Omitted)
Three Months Ended Six Months Ended
April 30 April 30
---------------------- ----------------------
1995 1994 1995 1994
---------- ----------- ----------- ----------
Cash provided by (used for) operations:
Net income $22,542 $13,986 $39,090 $15,764
Charges to income not
requiring cash -
Depreciation 16,383 15,473 32,444 30,863
Depletion and amortization 3,590 1,989 5,538 3,428
Deferred taxes - net 5,224 2,814 9,015 3,178
(Gain) loss on disposition of
capital assets 1,025 1,048 1,017 1,133
Change in:
Accounts and notes receivable (9,139) (7,429) (3,504) (314)
Inventories (6,611) (1,115) (6,714) (684)
Other (1,179) 25 (2,242) (1,110)
Other noncurrent assets (419) (2,206) (853) (2,735)
Accounts, payrolls and other
taxes payable (2,640) 2,397 2,944 626
Federal income taxes payable (4,492) (79) (1,367) 545
Other noncurrent liabilities 587 469 1,175 937
---------- ----------- ----------- ----------
Cash provided by operations 24,871 27,372 76,543 51,631
---------- ----------- ----------- ----------
Cash provided by (used for) investing:
Additions to: Plant and equipment (25,768) (17,415) (57,090) (30,426)
Timber and timberlands (1,178) (1,743) (33,534) (27,893)
Proceeds from sale of capital assets 491 398 595 490
---------- ----------- ----------- ----------
Cash used for investing (26,455) (18,760) (90,029) (57,829)
---------- ----------- ----------- ----------
Cash provided by (used for) financing:
Long-term debt (10,000) (10,000) 1,000 30,801
Short-term borrowings 18,000 1,000 39,000 (15,000)
Payable to bank resulting from
checks in transit 583 6,826 (5,932) 5,333
Accounts payable for construction 511 385 (5,927) (1,361)
Cash dividends (7,252) (6,745) (13,987) (13,489)
Purchase of common stock (258) (78) (668) (86)
---------- ----------- ----------- ----------
Cash provided by (used for)
financing 1,584 (8,612) 13,486 6,198
---------- ----------- ----------- ----------
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) $5,977 $5,174 $13,562 $11,177
Income taxes 13,681 3,750 16,415 5,183
The accompanying note is an integral part of these financial statements.
PART I. FINANCIAL INFORMATION Page 4
<PAGE>
LONGVIEW FIBRE COMPANY - CONSOLIDATED STATEMENT OF SHAREHOLDERS' EQUITY
-----------------------------------------------------------------------
(000 Omitted)
Three Months Ended Six Months Ended
April 30 April 30
---------------------- ----------------------
1995 1994 1995 1994
---------- ----------- ----------- ----------
Common stock:
Balance at beginning of period $77,708 $77,822 $77,745 $77,823
Ascribed value of stock purchased (23) (6) (60) (7)
---------- ----------- ----------- ----------
Balance at end of period $77,685 $77,816 $77,685 $77,816
========== =========== =========== ==========
Additional paid-in capital:
Balance at beginning of period $3,306 $3,306 $3,306 $3,306
---------- ----------- ----------- ----------
Balance at end of period $3,306 $3,306 $3,306 $3,306
========== =========== =========== ==========
Retained earnings:
Balance at beginning of period $332,642 $312,693 $323,202 $317,666
Net income 22,542 13,986 39,090 15,764
Cash dividends on common stock (7,252) (6,745) (13,987) (13,489)
Purchases of common stock (235) (72) (608) (79)
---------- ----------- ----------- ----------
Balance at end of period $347,697 $319,862 $347,697 $319,862
========== =========== =========== ==========
Dividends paid per share $0.14 $0.13 $0.27 $0.26
========== =========== =========== ==========
Common shares:
Balance at beginning of period 51,805 51,881 51,830 51,882
Purchases (15) (4) (40) (5)
---------- ----------- ----------- ----------
Balance at end of period 51,790 51,877 51,790 51,877
========== =========== =========== ==========
The accompanying note is an integral part of these financial statements.
PART I. FINANCIAL INFORMATION Page 5
<PAGE>
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.
PART I. FINANCIAL INFORMATION Page 6
<PAGE>
LONGVIEW FIBRE COMPANY
MANAGEMENT'S DISCUSSION AND ANALYSIS
------------------------------------
Consolidated Statement of Income
--------------------------------
Three and Six Months Ended April 30, 1995 compared with
-------------------------------------------------------
Three and Six Months Ended April 30, 1994
-----------------------------------------
Net income improved 61% for the second quarter 1995 and 148% for the first six
months of 1995 as compared with like periods in 1994. Operating results
improved in the manufacturing segments of the business but declined in the
timber segment.
Timber
------
Second quarter operating profits decreased 9% due to a 6% decrease in log volume
sold, increased costs and a 16% average price decrease for lumber. Average log
prices improved 4% for the second quarter 1995. For the year-to-date period,
operating profits and log footage sold decreased 6% and 2%, respectively, while
average log selling prices improved 3%. During the second quarter, demand and
prices were at very good levels in the export market. Despite a poor lumber
market, domestic log markets remain good due primarily to reduced log supply in
the region.
Paper and Paperboard
--------------------
Operating results improved for the second quarter 1995 because of a 22% increase
in volume sold and price improvements for paper and paperboard of 14% and 67%,
respectively; such improvements were substantially offset by higher costs for
raw material fibers. Second quarter 1995 wood chip costs increased 20% and OCC
(old corrugated containers) costs increased 131% as compared with year ago
levels. An adequate fiber supply is currently available.
Linerboard markets, particularly the export market, were very strong during the
second quarter. Paper markets were fair.
Converted Products
------------------
Sales improved 26% and 30% for the second quarter 1995 and year-to-date 1995 as
compared with like periods in 1994. 1995 operating results improved primarily
due to price increases of 23% for the second quarter and 18% for the
year-to-date period as compared with like periods in 1994. Volume sold is up 2%
for the quarter and 9% for the year. During the quarter, demand was strong and
prices improved.
Other
-----
Increased interest expensed for the second quarter and year-to-date 1995 was due
to higher rates and more borrowing. Second quarter 1995 and 1995 year-to-date
selling, administrative and general expenses were 6% of sales versus 7% for the
like periods in 1994.
Income Taxes
------------
Taxes on income are approximately 38% and 37% of pre-tax income for fiscal 1995
and 1994, respectively.
Three Months Six Months
Ended April 30 Ended April 30
% %
Other Data 1995 1994 Change 1995 1994 Change
---------- ---------------------- ----------------------
Sales
Logs, thousands of board feet 63,000 67,000 - 6 122,000 124,000 - 2
Lumber, thousands of board feet 8,000 8,000 -- 14,000 13,000 + 8
Paper, tons 59,000 53,000 + 11 118,000 102,000 + 16
Paperboard, tons 56,000 41,000 + 37 121,000 59,000 +105
Converted products, tons 131,000 128,000 + 2 279,000 255,000 + 9
Logs, $/thousand board feet $ 802 $ 769 + 4 $ 776 $ 755 + 3
Lumber, $/thousand board feet 321 382 - 16 322 383 - 16
Paper, $/ton FOB mill equivalent 678 594 + 14 655 592 + 11
Paperboard, $/ton FOB mill equiv. 490 294 + 67 453 298 + 52
Converted products, $/ton 815 665 + 23 780 659 + 18
PART I. FINANCIAL INFORMATION Page 7
<PAGE>
Liquidity and Capital Resources
-------------------------------
Capital expenditures for the year were above available funds from cash flow and,
therefore, increased total borrowings. The company has embarked on major
programs of installing improved or specialized equipment in its mill and box
plants to make more specialized products as a means to improve margins. The
backlog of approved projects is $128 million. Adequate financing is available
as needed. During the quarter, the company purchased 15,130 shares of its
common stock. Dividends of $0.14 per share were declared and paid in the second
quarter.
PART I. FINANCIAL INFORMATION Page 8
<PAGE>
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
(a) Exhibits required to be filed by Item 601 of Regulation S-K:
27 Financial Data Schedule
(b) Reports of Form 8-K - Nothing to report
PART II. OTHER INFORMATION Page 9
<PAGE>
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
----------------------------------------------
(Registrant)
Date 5-19-95 \s\ L. J. Holbrook
----------------------- ----------------------------------------------
L. J. Holbrook, Senior Vice President-Finance,
Secretary and Treasurer
Date 5-19-95 \s\ A.G.Higgens
----------------------- ----------------------------------------------
A. G.Higgens, Assistant Treasurer
Page 10
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED
FROM PART I OF THIS FORM 10-Q AND IS QUALIFIED IN ITS ENTIRETY
BY REFERENCE TO SUCH FINANCIAL STATEMENTS.
</LEGEND>
<MULTIPLIER> 1,000
<S> <C>
<PERIOD-TYPE> 6-MOS
<FISCAL-YEAR-END> OCT-31-1995
<PERIOD-END> APR-30-1995
<CASH> 0
<SECURITIES> 0
<RECEIVABLES> 104,694
<ALLOWANCES> 1,000
<INVENTORY> 74,019
<CURRENT-ASSETS> 187,552
<PP&E> 1,493,536
<DEPRECIATION> 626,997
<TOTAL-ASSETS> 1,086,392
<CURRENT-LIABILITIES> 138,049
<BONDS> 0
<COMMON> 77,685
0
0
<OTHER-SE> 351,003
<TOTAL-LIABILITY-AND-EQUITY> 1,086,392
<SALES> 461,734
<TOTAL-REVENUES> 461,734
<CGS> 355,986
<TOTAL-COSTS> 355,986
<OTHER-EXPENSES> 0
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 14,270
<INCOME-PRETAX> 63,048
<INCOME-TAX> 23,958
<INCOME-CONTINUING> 39,090
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 39,090
<EPS-PRIMARY> 0.75
<EPS-DILUTED> 0.75
</TABLE>
