<PAGE>
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 the quarterly period ended July 31, 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
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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
----- -----
51,775,067 Common Shares were outstanding as of July 31, 1995
Page 1
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PART I - FINANCIAL INFORMATION
Item 1. Financial Statements
CONSOLIDATED BALANCE SHEET
-------------------------- (000 Omitted)
Jul. 31 Oct. 31 Jul. 31
1995 1994 1994
(Unaudited) (Unaudited)
A S S E T S ----------- ----------- ----------
CURRENT ASSETS:
Accounts and notes receivable $106,392 $101,190 $84,573
Allowance for doubtful accounts (1,100) (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 19,080 15,106 15,645
Goods in process 19,666 11,390 10,288
Raw materials and supplies 38,011 40,809 35,793
Other 12,035 7,597 9,125
----------- ----------- ----------
Total current assets 194,084 175,092 154,424
----------- ----------- ----------
CAPITAL ASSETS:
Buildings, machinery and equipment at cost 1,316,694 1,230,784 1,201,853
Accumulated depreciation 641,100 599,342 587,320
----------- ----------- ----------
Costs to be depreciated in future years 675,594 631,442 614,533
Plant sites at cost 2,826 2,423 2,423
----------- ----------- ----------
678,420 633,865 616,956
Timber at cost less depletion 181,267 158,659 160,122
Roads at cost less amortization 8,900 9,415 8,959
Timberland at cost 16,167 13,570 13,562
----------- ----------- ----------
206,334 181,644 182,643
----------- ----------- ----------
Total capital assets 884,754 815,509 799,599
----------- ----------- ----------
OTHER ASSETS 37,240 31,448 33,482
----------- ----------- ----------
$1,116,078 $1,022,049 $987,505
=========== =========== ==========
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 $6,766 $12,505 $6,511
Accounts payable 50,333 52,361 35,734
Short-term borrowings 31,000 1,000 5,500
Payrolls payable 12,290 9,862 12,682
Federal income taxes payable 187 2,929 851
Other taxes payable 14,948 14,680 16,229
Current installments of long-term debt 35,994 45,994 45,744
----------- ----------- ----------
Total current liabilities 151,518 139,331 123,251
----------- ----------- ----------
LONG-TERM DEBT 397,374 366,492 353,367
----------- ----------- ----------
DEFERRED TAXES - NET 116,584 103,234 101,897
----------- ----------- ----------
OTHER LIABILITIES 10,501 8,739 7,896
----------- ----------- ----------
SHAREHOLDERS' EQUITY
Common stock, ascribed value $1.50 per share;
authorized 150,000,000 shares; issued
51,775,067; 51,830,297 and 51,843,837
shares respectively 77,663 77,745 77,766
Additional paid-in capital 3,306 3,306 3,306
Retained earnings 359,132 323,202 320,022
----------- ----------- ----------
Total shareholders' equity 440,101 404,253 401,094
----------- ----------- ----------
$1,116,078 $1,022,049 $987,505
=========== =========== ==========
The accompanying note is an integral part of these financial statements.
Page 2
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CONSOLIDATED STATEMENT OF INCOME (Unaudited)
--------------------------------------------
(000 Omitted)
Three Months Ended Nine Months Ended
July 31 July 31
---------------------- ----------------------
1995 1994 1995 1994
---------- ----------- ----------- ----------
Net sales:
Timber $49,649 $54,131 $149,081 $152,434
Paper and paperboard 87,517 63,624 231,810 152,689
Converted products 116,197 89,586 334,206 257,486
---------- ----------- ----------- ----------
253,363 207,341 715,097 562,609
---------- ----------- ----------- ----------
Cost of products sold, including
outward freight 201,927 175,157 557,913 468,964
---------- ----------- ----------- ----------
Gross profit 51,436 32,184 157,184 93,645
---------- ----------- ----------- ----------
Selling, administrative
and general expenses 15,370 13,899 44,664 40,159
---------- ----------- ----------- ----------
Operating profit:
Timber 26,638 26,923 85,765 89,665
Paper and paperboard 5,159 (4,547) 10,603 (15,270)
Converted products 4,269 (4,091) 16,152 (20,909)
---------- ----------- ----------- ----------
36,066 18,285 112,520 53,486
---------- ----------- ----------- ----------
Other income (expense):
Interest income 163 140 422 401
Interest expensed (7,611) (6,482) (21,881) (17,667)
Miscellaneous 402 242 1,007 988
---------- ----------- ----------- ----------
29,020 12,185 92,068 37,208
Provision for taxes on income:
Current 5,773 3,668 20,716 9,749
Deferred 4,335 1,026 13,350 4,204
---------- ----------- ----------- ----------
10,108 4,694 34,066 13,953
---------- ----------- ----------- ----------
Net income $18,912 $7,491 $58,002 $23,255
========== =========== =========== ==========
Dollars per share:
Net income $0.37 $0.14 $1.12 $0.45
Dividends $0.14 $0.13 $0.41 $0.39
Average shares outstanding in the
hands of the public (000 omitted) 51,780 51,848 51,795 51,871
The accompanying note is an integral part of these financial statements.
Page 3
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CONSOLIDATED STATEMENT OF CASH FLOWS (Unaudited)
------------------------------------------------
(000 Omitted)
Three Months Ended Nine Months Ended
July 31 July 31
---------------------- ----------------------
1995 1994 1995 1994
---------- ----------- ----------- ----------
Cash provided by (used for) operations:
Net income $18,912 $7,491 $58,002 $23,255
Charges to income not
requiring cash -
Depreciation 16,758 15,501 49,202 46,364
Depletion and amortization 3,818 4,993 9,356 8,421
Deferred taxes - net 4,335 1,026 13,350 4,204
(Gain) loss on disposition of
capital assets (131) 1,019 886 2,152
Change in:
Accounts and notes receivable (1,598) (1,696) (5,102) (2,010)
Inventories (2,738) (1,368) (9,452) (2,052)
Other (2,196) (934) (4,438) (2,044)
Other noncurrent assets (4,939) (1,822) (5,792) (4,557)
Accounts, payrolls and other
taxes payable 2,628 1,421 5,572 2,047
Federal income taxes payable (1,375) (1,196) (2,742) (651)
Other noncurrent liabilities 587 570 1,762 1,507
---------- ----------- ----------- ----------
Cash provided by operations 34,061 25,005 110,604 76,636
---------- ----------- ----------- ----------
Cash provided by (used for) investing:
Additions to: Plant and equipment (38,403) (17,322) (95,493) (47,748)
Timber and timberlands (568) (14,396) (34,102) (42,289)
Proceeds from sale of capital assets 311 141 906 631
---------- ----------- ----------- ----------
Cash used for investing (38,660) (31,577) (128,689) (89,406)
---------- ----------- ----------- ----------
Cash provided by (used for) financing:
Long-term debt 19,882 20,881 20,882 51,682
Short-term borrowings (9,000) 500 30,000 (14,500)
Payable to bank resulting from
checks in transit 193 (7,185) (5,739) (1,852)
Accounts payable for construction 1,023 (243) (4,904) (1,604)
Cash dividends (7,249) (6,740) (21,236) (20,229)
Purchase of common stock (250) (641) (918) (727)
---------- ----------- ----------- ----------
Cash provided by financing 4,599 6,572 18,085 12,770
---------- ----------- ----------- ----------
Change 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) $9,519 $6,533 $23,081 $17,710
Income taxes 8,030 5,352 24,445 10,535
The accompanying note is an integral part of these financial statements.
Page 4
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CONSOLIDATED STATEMENT OF SHAREHOLDERS' EQUITY (Unaudited)
----------------------------------------------------------
(000 Omitted)
Three Months Ended Nine Months Ended
July 31 July 31
---------------------- ----------------------
1995 1994 1995 1994
---------- ----------- ----------- ----------
Common stock:
Balance at beginning of period $77,685 $77,816 $77,745 $77,823
Ascribed value of stock purchased (22) (50) (82) (57)
---------- ----------- ----------- ----------
Balance at end of period $77,663 $77,766 $77,663 $77,766
========== =========== =========== ==========
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 $347,697 $319,862 $323,202 $317,666
Net income 18,912 7,491 58,002 23,255
Cash dividends on common stock (7,249) (6,740) (21,236) (20,229)
Purchases of common stock (228) (591) (836) (670)
---------- ----------- ----------- ----------
Balance at end of period $359,132 $320,022 $359,132 $320,022
========== =========== =========== ==========
Dividends paid per share $0.14 $0.13 $0.41 $0.39
========== =========== =========== ==========
Common shares:
Balance at beginning of period 51,790 51,877 51,830 51,882
Purchases (15) (33) (55) (38)
---------- ----------- ----------- ----------
Balance at end of period 51,775 51,844 51,775 51,844
========== =========== =========== ==========
The accompanying note is an integral part of these financial statements.
Page 5
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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 6
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Item 2. Management's Discussion and Analysis of Financial Condition and Results
of Operations.
Consolidated Statement of Incone
--------------------------------
Three and Nine Months Ended July 31, 1995 compared with
-------------------------------------------------------
Three and Nine Months Ended July 31, 1994
-----------------------------------------
Net income improved 152% for the third quarter 1995 and 149% for the first nine
months of 1995 as compared with like periods in 1994. Operating results
improved in the manufacturing segments of the business, but declined modestly in
the timber segment.
Timber
------
Third quarter and year-to-date operating profits decreased 1% and 4%,
respectively, as compared with like periods in 1994. Log footage sold and
average log prices declined 3% for the third quarter 1995, while year-to-date
log footage sold declined 2% and average log prices improved 1%. Volume of
lumber sold and average lumber prices were down from year ago levels.
During the third quarter 1995, demand and prices were at very good levels in the
export market. Currently, export prices are somewhat below their recent peak
while demand remains good. Domestic log markets were fair despite poor lumber
markets.
Paper and Paperboard
--------------------
Operating results improved for the third quarter 1995 due to average price
increases of 25% and 62% for paper and paperboard which were substantially
offset by higher costs for raw material fibers. Year-to-date volume sold
increased 27% while paper and paperboard average prices improved 16% and 51%,
respectively. Third quarter 1995 wood chip costs increased 39% and OCC (old
corrugated containers) costs increased 59% as compared with year ago levels. An
adequate fibre supply is currently available.
Domestic and export prices for paper and paperboard were at good levels during
the third quarter, but demand softened. The rate of incoming orders declined
during the third quarter 1995 as compared with the third quarter 1994. As a
result, a necessary Labor Day shutdown for utility work has been extended to
four days due to lack of orders.
Converted Products
------------------
Third quarter 1995 and year-to-date 1995 sales improved 30% as compared with
like periods in 1994. Operating results improved primarily due to average price
increases of 26% for the third quarter 1995 and 21% for the first nine months of
1995, but were adversely affected by increased costs for containerboard used to
manufacture boxes. Demand and prices were at good levels during the third
quarter.
Other
-----
Increased interest expensed for the third quarter and year-to-date 1995 was due
to higher rates and more borrowing.
Income Taxes
------------
Taxes on income are approximately 37% and 38% of pretax income for fiscal 1995
and 1994, respectively.
Page 7
<PAGE>
Three Months Nine Months
Ended July 31 Ended July 31
% %
Other Data 1995 1994 Change 1995 1994 Change
---------- ---------------------- ----------------------
Sales
Logs, thousands of board feet 62,000 64,000 - 3 184,000 188,000 - 2
Lumber, thousands of board feet 10,000 12,000 -17 24,000 25,000 - 4
Paper, tons 71,000 64,000 +11 189,000 166,000 +14
Paperboard, tons 54,000 61,000 -11 175,000 120,000 +46
Converted products, tons 138,000 133,000 + 4 417,000 388,000 + 7
Logs, $/thousand board feet $ 752 $ 777 - 3 $ 768 $ 763 + 1
Lumber, $/thousand board feet 305 332 - 8 315 359 -12
Paper, $/ton FOB mill equivalent 726 579 +25 682 587 +16
Paperboard, $/ton FOB mill equiv. 549 339 +62 483 319 +51
Converted products, $/ton 845 673 +26 801 664 +21
Liquidity and Capital Resources
-------------------------------
Capital expenditures for the year to date 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
converting plants to make more specialized products as a means to imporve
margins. The backlog of approved projects is $120 million. Adequate financing
is available as needed. During the quarter, the company purchased 15,100 shares
of its common stock. Cash dividends of $0.14 per share were declared and paid
in the third quarter in the aggregate of $7,249,000.
Page 8
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PART II - OTHER INFORMATION
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.
Page 9
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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 9-1-95 \s\ L. J. Holbrook
--------------------- ------------------------------------------------
L. J. Holbrook, Senior Vice President-Finance,
Secretary and Treasurer
Date 9-1-95 \s\ A. G. Higgens
--------------------- ------------------------------------------------
A. G. Higgens, Assistant Treasurer
Page 10
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<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> 9-MOS
<FISCAL-YEAR-END> OCT-31-1995
<PERIOD-END> JUL-31-1995
<CASH> 0
<SECURITIES> 0
<RECEIVABLES> 106,392
<ALLOWANCES> 1,100
<INVENTORY> 76,757
<CURRENT-ASSETS> 194,084
<PP&E> 1,525,854
<DEPRECIATION> 641,100
<TOTAL-ASSETS> 1,116,078
<CURRENT-LIABILITIES> 151,518
<BONDS> 0
<COMMON> 77,663
0
0
<OTHER-SE> 362,438
<TOTAL-LIABILITY-AND-EQUITY> 1,116,078
<SALES> 715,097
<TOTAL-REVENUES> 715,097
<CGS> 557,913
<TOTAL-COSTS> 557,913
<OTHER-EXPENSES> 0
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 21,881
<INCOME-PRETAX> 92,068
<INCOME-TAX> 34,066
<INCOME-CONTINUING> 58,002
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 58,002
<EPS-PRIMARY> 1.12
<EPS-DILUTED> 1.12
</TABLE>
