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, 1995 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
- ------------------------------------- -----------------------------------
(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
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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
----- -----
51,805,297 Common Shares were outstanding as of January 31, 1995
Page 1
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LONGVIEW FIBRE COMPANY - CONSOLIDATED BALANCE SHEET
- ---------------------------------------------------
(000 Omitted)
Jan. 31 Oct. 31 Jan. 31
1995 1994 1994
A S S E T S ----------- ----------- ----------
CURRENT ASSETS:
Accounts and notes receivable $95,555 $101,190 $75,448
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 15,656 15,106 13,992
Goods in process 13,107 11,390 11,205
Raw materials and supplies 38,645 40,809 34,046
Other 8,660 7,597 8,216
----------- ----------- ----------
Total current assets 170,623 175,092 141,907
----------- ----------- ----------
CAPITAL ASSETS:
Buildings, machinery and equipment at cost 1,261,580 1,230,784 1,176,713
Accumulated depreciation 615,205 599,342 563,376
----------- ----------- ----------
Costs to be depreciated in future years 646,375 631,442 613,337
Plant sites at cost 2,674 2,423 2,423
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649,049 633,865 615,760
Timber at cost less depletion 186,704 158,659 153,422
Roads at cost less amortization 9,184 9,415 9,113
Timberland at cost 16,145 13,570 10,990
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212,033 181,644 173,525
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Total capital assets 861,082 815,509 789,285
----------- ----------- ----------
OTHER ASSETS 31,882 31,448 29,454
----------- ----------- ----------
$1,063,587 $1,022,049 $960,646
=========== =========== ==========
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 5,990 $12,505 6,870
Accounts payable 46,520 52,361 32,547
Short-term borrowings 22,000 1,000 4,000
Payrolls payable 13,587 9,862 12,146
Federal income taxes payable 6,054 2,929 2,126
Other taxes payable 15,942 14,680 15,992
Current installments of long-term debt 25,994 45,994 39,744
----------- ----------- ----------
Total current liabilities 136,087 139,331 113,425
----------- ----------- ----------
LONG-TERM DEBT 397,492 366,492 348,486
----------- ----------- ----------
DEFERRED TAXES - NET 107,025 103,234 98,057
----------- ----------- ----------
OTHER LIABILITIES 9,327 8,739 6,857
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SHAREHOLDERS' EQUITY
Common stock, ascribed value $1.50 per share;
authorized 150,000,000 shares; issued
51,805,297; 51,830,297 and 51,881,477
shares respectively 77,708 77,745 77,822
Additional paid-in capital 3,306 3,306 3,306
Retained earnings 332,642 323,202 312,693
----------- ----------- ----------
Total shareholders' equity 413,656 404,253 393,821
----------- ----------- ----------
$1,063,587 $1,022,049 $960,646
=========== =========== ==========
The accompanying note is an integral part of these financial statements.
PART I. FINANCIAL INFORMATION Page 2
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LONGVIEW FIBRE COMPANY - CONSOLIDATED STATEMENT OF INCOME
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(000 Omitted)
Three Months Ended
January 31
----------------------
1995 1994
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Net sales:
Timber $46,211 $43,513
Paper and paperboard 70,431 39,821
Converted products 110,877 82,751
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227,519 166,085
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Cost of products sold, including outward freight 179,468 144,725
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Gross profit 48,051 21,360
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Selling, administrative and general expenses 14,603 13,350
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Operating profit:
Timber 27,383 27,712
Paper and paperboard 588 (7,426)
Converted products 5,477 (12,276)
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33,448 8,010
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Other income (expense):
Interest income 139 83
Interest expensed (7,183) (5,520)
Miscellaneous 287 250
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26,691 2,823
Provision for taxes on income:
Current 6,352 681
Deferred 3,791 364
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10,143 1,045
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Net income $16,548 $1,778
=========== ==========
Dollars per share:
Net income $0.32 $0.03
Dividends $0.13 $0.13
Average shares outstanding in the hands
of the public (000 omitted) 51,810 51,882
The accompanying note is an integral part of these financial statements.
PART I. FINANCIAL INFORMATION Page 3
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LONGVIEW FIBRE COMPANY - CONSOLIDATED STATEMENT OF CASH FLOWS
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(000 Omitted)
Three Months Ended
January 31
----------------------
1995 1994
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Cash provided by (used for) operations:
Net income $16,548 $1,778
Charges to income not requiring cash -
Depreciation 16,061 15,390
Depletion and amortization 1,948 1,439
Deferred taxes - net 3,791 364
(Gain) loss on disposition of capital assets (8) 85
Change in:
Accounts and notes receivable 5,635 7,115
Inventories (103) 431
Other (1,063) (1,135)
Other noncurrent assets (434) (529)
Accounts, payrolls and other taxes payable 5,584 (1,771)
Federal income taxes payable 3,125 624
Other noncurrent liabilities 588 468
----------- ----------
Cash provided by operations 51,672 24,259
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Cash provided by (used for) investing:
Additions to: Plant and equipment (31,322) (13,011)
Timber and timberlands (32,356) (26,150)
Proceeds from sale of capital assets 104 92
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Cash used for investing (63,574) (39,069)
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Cash provided by (used for) financing:
Long-term debt 11,000 40,801
Short-term borrowings 21,000 (16,000)
Payable to bank resulting from checks in transit (6,515) (1,493)
Accounts payable for construction (6,438) (1,746)
Cash dividends (6,735) (6,744)
Purchase of common stock (410) (8)
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Cash provided by (used for) financing 11,902 14,810
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Change in cash position -- --
Cash position, beginning of period -- --
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Cash position, end of period $ -- $ --
=========== ==========
Supplemental disclosures of cash flow information:
Cash paid during the year for:
Interest (net of amount capitalized) $7,585 $6,003
Income taxes 2,734 1,433
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
January 31
----------------------
1995 1994
----------- ----------
Common stock:
Balance at beginning of period $77,745 $77,823
Ascribed value of stock purchased (37) (1)
----------- ----------
Balance at end of period $77,708 $77,822
=========== ==========
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 $323,202 $317,666
Net income 16,548 1,778
Less cash dividends on common stock (6,735) (6,744)
Less purchases of common stock (373) (7)
----------- ----------
Balance at end of period $332,642 $312,693
=========== ==========
Dividends paid per share $0.13 $0.13
=========== ==========
Common shares:
Balance at beginning of period 51,830 51,882
Purchases (25) (1)
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Balance at end of period 51,805 51,881
=========== ==========
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 Months Ended January 31, 1995 compared with
-------------------------------------------------
Three Months Ended January 31, 1994
-----------------------------------
Earnings were $16.5 million for the first quarter 1995 compared with $1.8
million for the first quarter 1994. Sharply higher operating results in the
manufacturing segments were the primary reasons for the improvement. Net
income for the first quarter 1995 increased 63% compared with the fourth
quarter 1994.
Timber
- ------
First quarter sales increased 6% primarily due to a 5% increase in log footage
sold. Log prices held steady with year ago levels, but lumber prices declined
16%. Operating profits declined 1% for the first quarter 1995 compared with
the like 1994 period. During the first quarter, demand and prices were at
good levels in both the domestic and the export markets. Such strength is
expected to continue, but some deterioration could occur.
Paper and Paperboard
- --------------------
Operating results for the first quarter 1995 improved 108% compared with the
depressed first quarter 1994. Paperboard and paper price increases of 36% and
7%, respectively, and an 85% increase in tonnage sold were the primary reasons
for the improved results. Profits were adversely affected by increased wood
chip costs which took effect late in the first quarter. In the near term,
fiber costs are expected to remain high and additional increases are possible
due to increased demand.
The linerboard markets, both domestic and export, were very strong during the
first quarter. Additional price improvement is expected in the second
quarter. Paper markets are fair.
Converted Products
- ------------------
Operating results for the first quarter 1995 compared with the first quarter
1994 improved substantially due to a 17% increase in volume sold and a 15%
increase in average price. First quarter sales improved 34% compared with the
like 1994 period. During the quarter, demand was strong and prices improved.
Additional price increases are expected.
Other
- -----
Increased interest expensed for the first quarter 1995 was due to higher rates
and more borrowing.
Income Taxes
- ------------
Taxes on income are approximately 38% and 37% of pretax income for fiscal 1995
and 1994, respectively.
Three Months
Ended January 31
%
Other Data 1995 1994 CHANGE
- ---------- ----------------------------------
Sales
Logs, thousands of board feet 59,000 56,000 + 5
Lumber, thousands of board feet 6,000 5,000 + 20
Paper, tons 59,000 49,000 + 20
Paperboard, tons 65,000 18,000 +261
Converted products, tons 148,000 127,000 + 17
Logs, $/thousand board feet $ 748 $ 738 + 1
Lumber, $/thousand board feet 323 385 - 16
Paper, $/ton FOB mill equivalent 632 590 + 7
Paperboard, $/ton FOB mill equivalent 420 308 + 36
Converted products, $/ton 749 653 + 15
PART I. FINANCIAL INFORMATION Page 7
<PAGE>
Liquidity and Capital Resources
-------------------------------
Timberland purchases of $32 million closed during the quarter causing total
debt to increase. The company has embarked on major programs of installing
improved or specialized equipment in its mill and box plants to make more
customized products as a means to improve margins. The backlog of approved
projects is $85 million. Adequate financing is available if needed. During
the quarter, the company purchased 25,000 shares of its common stock.
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 on 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
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(Registrant)
Date 3-16-95 \s\ L. J. Holbrook
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L. J. Holbrook, Senior Vice President-Finance,
Secretary and Treasurer
Date 3-16-95 \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> 3-MOS
<FISCAL-YEAR-END> OCT-31-1995
<PERIOD-END> JAN-31-1995
<CASH> 0
<SECURITIES> 0
<RECEIVABLES> 95,555
<ALLOWANCES> 1,000
<INVENTORY> 67,408
<CURRENT-ASSETS> 170,623
<PP&E> 1,476,287
<DEPRECIATION> 615,205
<TOTAL-ASSETS> 1,063,587
<CURRENT-LIABILITIES> 136,087
<BONDS> 0
<COMMON> 77,708
0
0
<OTHER-SE> 335,948
<TOTAL-LIABILITY-AND-EQUITY> 1,063,587
<SALES> 227,519
<TOTAL-REVENUES> 227,519
<CGS> 179,468
<TOTAL-COSTS> 179,468
<OTHER-EXPENSES> 0
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 7,183
<INCOME-PRETAX> 26,691
<INCOME-TAX> 10,143
<INCOME-CONTINUING> 16,548
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 16,548
<EPS-PRIMARY> 0.32
<EPS-DILUTED> 0.32
</TABLE>
