SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
_____________
FORM 10-Q
Quarterly Report Under Section 13 or 15(d)
of The Securities Exchange Act of 1934
For Quarter Ended March 31, 1995 Commission file number 0-14825
SEALRIGHT CO., INC.
(Exact name of registrant as specified in its charter)
Delaware 16-0876812
(State or other jurisdiction of (IRS Employer
incorporation or organization) Identification No.)
7101 College Boulevard, Overland Park, Kansas 66210-1891
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code 913-344-9000
_________________________________________________________________
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.
(1) Yes X No (2) Yes X No
As of March 31, 1995, Sealright Co., Inc. had 11,069,991 shares of
Common Stock outstanding. The market value of stock held by non-
affiliates is approximately $115,513,000.
SEALRIGHT CO., INC. AND SUBSIDIARIES
FORM 10-Q
MAY 5, 1995
PART I - FINANCIAL INFORMATION
Item 1. Financial Statements
INTRODUCTORY COMMENTS
The Consolidated Financial Statements included herein have been
prepared by Management, without audit, pursuant to the rules and
regulations of the Securities and Exchange Commission. Certain
information and footnote disclosures normally included in financial
statements prepared in accordance with generally accepted
accounting principles have been condensed or omitted pursuant to
such rules and regulations, although Management believes that the
disclosures are adequate to enable a reasonable understanding of
the information presented. It is suggested that these Consolidated
Financial Statements be read in conjunction with the financial
statements and the notes thereto included in the Company's Annual
Report on Form 10K, for the year ended December 31, 1994.
<PAGE>
<TABLE>
SEALRIGHT CO., INC. AND SUBSIDIARIES
CONSOLIDATED INCOME STATEMENT
FOR THE QUARTERS ENDED MARCH 31, 1995 and 1994
(In Thousands Except Per Share Data)
(Unaudited)
<CAPTION>
1995 1994
<S> <C> <C>
Net Sales $70,614 $ 68,552
Cost of Sales 57,494 54,096
Gross Profit 13,120 14,456
Selling, General & Admin. Expense 8,013 9,433
Operating Income 5,107 5,023
Interest Expense 1,147 982
Other 388 342
Income Before Income Taxes 3,572 3,699
Provision for Income Taxes 1,485 1,551
NET INCOME $ 2,087 $ 2,148
NET INCOME PER SHARE $ 0.19 $ 0.19
AVERAGE NUMBER OF COMMON AND COMMON
EQUIVALENT SHARES OUTSTANDING 11,096 11,063
</TABLE>
<PAGE>
<TABLE>
SEALRIGHT CO., INC. AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEET
MARCH 31, 1995 and DECEMBER 31, 1994
(In Thousands)
(Unaudited)
<CAPTION>
March 31, 1995 December 31, 1994
ASSETS
<S> <C> <C>
Current Assets
Cash $ 126 $ 1,057
Accounts Receivable 30,669 25,281
Inventories (Note 3) 54,000 46,969
Other Current Assets 2,975 2,003
Total Current Assets 87,770 75,310
Property, Plant & Equipment 236,501 232,233
Less: Accumulated Depreciation 87,663 83,685
Total Property, Plant and Equipment 148,838 148,548
Intangibles 17,039 17,516
TOTAL ASSETS $253,647 $241,374
LIABILITIES AND STOCKHOLDERS' EQUITY
Current Liabilities
Current Maturities of Long-Term Debt $ 6,726 $ 6,791
Accounts Payable 18,500 15,929
Accrued Vacation 3,605 3,306
Accrued Workers' Compensation Reserve 2,290 2,473
Accrued Income Taxes 2,489 1,684
Accrued Liabilities 4,565 5,225
Total Current Liabilities 38,175 35,408
Long-Term Debt 82,511 74,135
Deferred Income Taxes 16,424 16,212
Post-Retirement Benefits 2,234 2,215
Pension Liability 512 512
Stockholders' Equity
Common Stock, Par Value $.10
Authorized 20,000,000 shares;
issued and outstanding 11,069,991
and 11,063,127 as of March 31,
1995 and December 31, 1994,
respectively 1,107 1,106
Paid-In Capital 14,886 14,747
Retained Earnings 97,798 97,039
Total Stockholders' Equity 113,791 112,892
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY $253,647 $241,374
</TABLE>
<TABLE>
SEALRIGHT CO., INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENT OF CASH FLOWS
FOR THE QUARTERS ENDED MARCH 31, 1995 and MARCH 31, 1994
(In Thousands)
(Unaudited)
<CAPTION>
1995 1994
<S> <C> <C>
Cash Flows from Operating Activities:
Net Income $ 2,087 $ 2,148
Adjustments to Reconcile Net Income to Net
Cash Provided by Operating Activities:
Depreciation & Amortization 4,724 4,269
Deferred Tax Provision 1,411 1,250
LIFO Reserve Provision 114 128
Changes in Assets and Liabilities:
Accounts Receivable, Net (5,388) (8,182)
Inventories (7,145) (552)
Accounts Payable 2,571 47
Other (1,828) 124
Total Adjustments $(5,541) $(2,916)
Net Cash Used In Operating Activities $(3,454) $ (768)
Cash Flows from Investing Activities:
Capital Expenditures $(4,626) $(8,006)
Proceeds from Disposal of Equipment 1 16
Short-Term Investments -- 10,500
Net Cash Provided by (Used) in
Investing Activities: $(4,625) $ 2,510
Cash Flows from Financing Activities:
Net Borrowings Under Revolving
Credit Agreement $10,000 $ 1,000
Proceeds from Common Stock Issued 140 --
Principal Payments of Long-Term Debt (1,664) (1,740)
Dividends Paid (1,328) (1,272)
Net Cash Provided by (Used In)
Financing Activities $ 7,148 $(2,012)
Net Decrease in Cash $ (931) $ (270)
Cash, Beginning of Year 1,057 2,289
Cash, End of Three Months $ 126 $ 2,019
</TABLE>
<PAGE>
SEALRIGHT CO., INC. AND SUBSIDIARIES
10Q
MARCH 31, 1995
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
NOTE 1 - FINANCIAL STATEMENT PRESENTATION
In the opinion of Management, the accompanying unaudited
consolidated financial statements contain normal interim
adjustments necessary to present fairly the financial position of
Sealright Co., Inc. and Subsidiaries as of March 31, 1995 and
December 31, 1994, and the results of their operations for the
quarters ended March 31, 1995 and 1994.
NOTE 2 - ACCOUNTING PRINCIPLES AND POLICIES
The accompanying financial statements have been prepared
consistent with the accounting principles and policies described
more fully in Note 1 of the Company's Annual Report for the year
ended December 31, 1994.
NOTE 3 - INVENTORIES
Inventories at March 31, 1995 and December 31, 1994, were:
<TABLE>
<CAPTION>
1995 1994
(In Thousands)
<S> <C> <C>
Inventories Carried on LIFO Basis
Raw Materials $20,535 $15,139
Work-In-Process 8,308 7,986
Finished Goods 18,491 17,139
$47,334 $40,264
LIFO Reserve (469) (355)
Inventories Carried on LIFO Basis $46,865 $39,909
Inventories Carried on Average or FIFO Basis 7,135 7,060
$54,000 $46,969
</TABLE>
Because the inventory determination under the LIFO method can only be
made at the end of each fiscal year based on the inventory levels and
costs at that time, interim LIFO determinations, including those at
March 31, 1995, must necessarily be based on management's estimate of
expected year-end inventory levels and costs. Since estimates of
future inventory levels and prices are subject to many factors beyond
the control of management, interim financial results are subject to
final year-end LIFO inventory amounts. Accordingly, inventory
components reported for the period ending March 31, 1994, are
estimates based on management's knowledge of the Company's production
cycle, the costs associated with this cycle and the sales and
purchasing volume of the Company.
NOTE 4 - STATEMENT OF CASH FLOWS
Supplemental cash flow information is (in thousands):
1995 1994
Interest Paid (Net of Amount Capitalized) $ 940 $ 969
Income Taxes Paid 71 152
<PAGE>
ITEM 2.
MANAGEMENT'S DISCUSSION AND ANALYSIS OF OPERATIONS
AND FINANCIAL CONDITION
Results of Operations
Net sales for the first quarter of 1995 were $70.6 million, an
increase of 3.0% over the first quarter 1994. Net sales increased
in both the Rigid Packaging Group and Flexible Packaging Group of
the Company. The increase is due to volume increases in two of the
Rigid Packaging product lines as well as increases in two of the
Flexible Packaging plant facilities.
The 2.5 percentage point decrease in the gross profit is due
to increased raw material costs and increased sales of products
with a higher cost raw material composition. Due to contractual
agreements with certain customers, raw material increases have not
been passed on to those customers.
Selling, general and administrative expense decreased from
13.8% of net sales in the first quarter of 1994 to 11.2% of net
sales for the first quarter of 1995. The significant decreases
were workers' compensation expense, relocation expenses,
developmental expenses and professional services. In addition,
efforts are ongoing to control expenses in all areas of selling,
general and administrative cost centers.
Interest expense for the first quarter of 1995, compared to
the first quarter of 1994, increased 16.8%. This increase is
primarily the result of higher indebtedness incurred to complete
the construction of the DeSoto plant and a planned build up in raw
material inventories in advance of higher prices taking effect.
The Company has been identified as a potentially responsible
party (PRP) at several locations by the Environmental Protection
Agency. The effect on Company operations is not expected to be
material due to the minimal quantities of the Company's wastes
involved at the sites and because other corporations included as
primary PRP's at each location have resources available to satisfy
their potential obligations.
Liquidity and Capital Resources
During the first three months of 1995, cash used by operating
activities was $3.5 million. Accounts receivable and inventory
levels rose 17.2% over December 31, 1994 necessitating additional
funding needs for this increase. Compared to the first quarter of
1994, investment in new equipment and facilities has decreased
approximately 42% as the construction of the new DeSoto
manufacturing facility has been completed. The $40 million line of
credit has been used for $28.5 million, leaving an unused balance
of $11.5 million as of March 31, 1995. For the balance of 1995, it
is anticipated additional borrowing will be required, primarily for
working capital purposes.
<PAGE>
PART II - OTHER INFORMATION
Item 1.) Legal Proceeding
None
Item 2.) Changes in Securities
None
Item 3.) Defaults Upon Senior Securities
None
Item 4.) Submission of Matters to a Vote of Securities Holders
None
Item 5.) Other Materially Important Events
None
Item 6.) Exhibits and Reports on Form 8-K
None
<PAGE>
SALES OF UNREGISTERED SECURITIES
None
<PAGE>
SIGNATURES
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.
SEALRIGHT CO., INC.
Date: __ May 11, 1995 _______ ___/s/ Marvin W. Ozley___
By: Marvin W. Ozley
Chairman of the Board
Date: __ May 11, 1995 ______ __/s/ John T. Carper_____
By: John T. Carper
Vice President
Finance & CFO
