UNITED STATES SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-QSB
[X] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d)
OF THE SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended March 31, 1996
OR
[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
For the transition period from to
Commission file number 0-11426
PACKAGING RESEARCH CORPORATION
(Exact name of registrant as specified in its charter)
STATE OF COLORADO 84-0750762
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
2582 South Tejon Street, Englewood, Colorado 80110
(Address of principal executive offices) (Zip Code)
Registrant's telephone number including area code: (303) 936-2363
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
Indicate the number of shares outstanding of each of the registrant's classes of
common stock, as of the latest practicable date.
As of May 14, 1996 there were 3,095,405 shares of Common Stock outstanding.
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PACKAGING RESEARCH CORPORATION AND SUBSIDIARY
INDEX
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Part I. Financial Information
Item 1. Financial Statements
Consolidated Balance Sheets -
March 31, 1996 and December 31, 1995 . ............................................................ 3
Consolidated Statements of Operations -
Three Months Ended
March 31, 1996 and 1995 . ........................................................................ 5
Consolidated Statements of Cash Flows -
Three Months Ended
March 31, 1996 and 1995 . ........................................................................ 6
Notes to Consolidated Financial Statements......................................................... 8
Item 2. Management's Discussion and Analysis of
Financial Condition and Results of
Operations .......................................................................................14
Part II. Other Information ................................................................................17
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PACKAGING RESEARCH CORPORATION AND SUBSIDIARY
CONSOLIDATED BALANCE SHEETS
March 31, December 31,
ASSETS 1996 1995
------ ----------- --------
(Unaudited)
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CURRENT ASSETS:
Cash and cash equivalents $ 131,000 $ 806,000
Accounts receivable, net of allowance
for doubtful accounts and returns of
$58,000 and $54,000 at March 31, 1996
and December 31, 1995, respectively 1,637,000 1,843,000
Inventory, net 3,054,000 2,708,000
Prepaid expenses and other 56,000 63,000
----------- -----------
Total current assets 4,878,000 5,420,000
----------- -----------
PROPERTY, PLANT AND EQUIPMENT, at cost:
Machinery and equipment 1,231,000 1,220,000
Furniture and fixtures 596,000 596,000
Test and demonstration equipment 902,000 926,000
Leasehold improvements 1,164,000 1,164,000
Vehicles 11,000 11,000
--------- ---------
3,904,000 3,917,000
Less - Accumulated depreciation
and amortization (1,542,000) (1,496,000)
----------- ----------
Net property, plant and equipment 2,362,000 2,421,000
----------- -----------
OTHER ASSETS:
Goodwill, Net 13,555,000 13,648,000
----------- -----------
DEFERRED LOAN AND OFFERING COSTS 350,000 372,000
----------- -----------
Total assets $ 21,145,000 $ 21,861,000
=========== ===========
The accompanying notes to consolidated financial statements are an integral
part of these consolidated balance sheets.
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PACKAGING RESEARCH CORPORATION AND SUBSIDIARY
CONSOLIDATED BALANCE SHEETS
March 31, December 31,
LIABILITIES AND SHAREHOLDERS' EQUITY 1996 1995
- ------------------------------------ ----------- --------
(Unaudited)
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CURRENT LIABILITIES:
Trade accounts payable and accrued
liabilities $ 2,785,000 $ 3,053,000
Customer deductions 1,092,000 1,362,000
Vendor notes payable 1,115,000 1,181,000
Other accrued liabilities 358,000 917,000
----------- ---------
Total current liabilities 5,350,000 6,513,000
----------- ---------
LONG-TERM DEBT
Convertible debentures, due 1999-2003 3,200,000 3,200,000
Convertible debentures, due 1999 1,791,000 1,791,000
Bank note payable 773,000 -
Vendor notes payable 494,000 53,000
--------- ---------
Total long-term debt 6,258,000 5,044,000
--------- ---------
MINORITY INTEREST 245,000 -
--------- ---------
SHAREHOLDERS' EQUITY:
Common stock, $.01 par value;
25,000,000 shares authorized;
3,095,405 and 3,095,405 shares issued
and outstanding at March 31, 1996 and
December 31, 1995, respectively 31,000 31,000
Additional paid-in capital 12,475,000 12,699,000
Accumulated deficit (readjusted to reflect
quasi-reorganization effective January 1,
1995) (3,214,000) (2,426,000)
---------- ----------
Total shareholders' equity 9,292,000 10,304,000
---------- ----------
Total liabilities and
shareholders' equity $ 21,145,000 $21,861,000
=========== ==========
The accompanying notes to consolidated financial statements are an
integral part of these consolidated balance sheets.
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PACKAGING RESEARCH CORPORATION AND SUBSIDIARY
CONOSOLADATED STATEMENTS OF OPERATIONS
(unaudited)
Three Months Ended
March 31,
1996 1995
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REVENUES:
Pasta sauce ................................... $ 2,099,000 $ 1,162,000
Precision equipment sales and service 1,167,000 1,227,000
---------- ----------
Total revenue 3,266,000 2,389,000
---------- ----------
COST OF GOODS SOLD:
Pasta sauce ................................... 1,195,000 861,000
Precision equipment sales and service 693,000 832,000
---------- ----------
Total cost of goods sold 1,888,000 1,693,000
---------- ----------
Gross profit 1,378,000 696,000
---------- ----------
OPERATING EXPENSES:
General and administrative 936,000 609,000
Selling and marketing 245,000 228,000
Advertising and promotion 698,000 308,000
Amortization of goodwill 85,000 37,000
Research and development 15,000 16,000
---------- ----------
1,980,000 1,198,000
INCOME (LOSS) FROM OPERATIONS (602,000) (502,000)
---------- ----------
OTHER INCOME (EXPENSE):
Interest expense (189,000) (64,000)
Interest income 2,000 10,000
Miscellaneous 1,000 -
---------- ----------
Total other income (expense) (186,000) (54,000)
----------- ----------
Income taxes - -
NET INCOME (LOSS) $ (788,000) $ (556,000)
========== ==========
PRIMARY NET INCOME (LOSS) PER COMMON SHARE $ (.25) $ (.26)
========== ==========
FULLY DILUTED NET INCOME PER COMMON SHARE $ * $ *
========== ==========
WEIGHTED AVERAGE COMMON SHARES OUTSTANDING:
Primary 3,095,405 2,141,732
========== ==========
The accompanying notes to consolidated financial statements are an integral
part of these consolidated financial statements.
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PACKAGING RESEARCH CORPORATION AND SUBSIDIARY
CONSOLIDATED STATEMENTS OF CASH FLOWS
(Unaudited)
<S> <C> <C>
Three Months Ended
March 31,
1996 1995
CASH FLOWS FROM OPERATING ACTIVITIES:
Net Income (Loss) $ (788,000) $ (556,000)
Adjustments to reconcile net income (loss)
to net cash provided by (used in)
operating activities:
Depreciation and amortization 219,000 154,000
Provision for obsolescence and warranty reserves 19,000 38,000
Provision for losses on accounts receivable 3,000 3,000
Changes in assets and liabilities -
Decrease in accounts and receivables 203,000 1,082,000
(Increase) in inventory (358,000) 109,000
(Increase) decrease in prepaid expenses and
other assets 55,000 (45,000)
Decrease in accounts payable and accrued
liabilities (808,000) (436,000)
Decrease in customer deposits (39,000) 365,000
Net cash provided by (used in)
operating activities (1,494,000) 714,000
--------- ---------
CASH FLOWS FROM INVESTING ACTIVITIES:
Capital expenditures (8,000) (150,000)
Note receivable advances - (51,000)
Proceeds from disposal of assets 34,000 -
Consideration paid for acquisition of subsidiary - (3,000,000)
---------- ---------
Net cash used in investing activities 26,000 (3,201,000)
---------- ---------
CASH FLOWS FROM FINANCING ACTIVITIES:
Proceeds from bank financing and
short-term borrowings 881,000 27,000
Repayment of bank financing and
short-term borrowings (108,000) (27,000)
Proceeds from exercise of stock options of
subsidiary 20,000 -
---------- ---------
Net cash provided by
financing activities 793,000 -
---------- ---------
NET INCREASE (DECREASE) IN CASH (675,000) (2,487,000)
CASH AND CASH EQUIVALENTS, BEGINNING OF PERIOD 806,000 2,633,000
---------- ---------
CASH AND CASH EQUIVALENTS, END OF PERIOD $ 131,000 $ 146,000
========== =========
The accompanying notes to consolidated financial statements are an
integral part of these consolidated financial statements.
<PAGE>
PACKAGING RESEARCH CORPORATION AND SUBSIDIARY
CONSOLIDATED STATEMENTS OF CASH FLOWS
(Unaudited)
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SUPPLEMENTAL DISCLOSURES OF
CASH FLOW INFORMATION:
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1996 1995
Cash received (paid) during the period for:
Interest paid $ 148,000 $ 92,000
Interest received 3,000 -
Income taxes - -
======== ========
</TABLE>
The accompanying notes to consolidated financial statements are an
integral part of these consolidated financial statements.
<PAGE>
PACKAGING RESEARCH CORPORATION AND SUBSIDIARY
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
March 31, 1996
1. Basis of Presentation
The accompanying consolidated financial statements at March 31, 1996
and December 31, 1995, and for the periods ended March 31, 1996 and
1995, have been prepared from the books and records of Packaging
Research Corporation ("PRC" or the "Company") and its majority owned
subsidiary, Mama Rizzo's, Inc. ("MRI"), without audit. All intercompany
accounts and transactions have been eliminated in consolidation. The
statements reflect all normal recurring adjustments which, in the
opinion of management, are necessary for the fair presentation of
financial position, results of operations and cash flows for the
periods presented.
Certain information and disclosures normally included in financial
statements have been omitted under Securities and Exchange Commission
regulations. It is suggested that the accompanying financial statements
be read in conjunction with the annual report on Form 10-KSB for the
year ended December 31, 1995. The results of operations for the period
ended March 31, 1996, are not necessarily indicative of the operating
results for the full year.
2. Organization and Corporate Restructuring
Organization
Prior to February 17, 1995, the Company was primarily engaged in the
business of designing, manufacturing, marketing and servicing a
complete line of standard and customized precision, high-speed filling,
forming and pumping equipment for a wide assortment of processed and
non-processed food and non-food applications. The Company's equipment
is manufactured exclusively in the United States and marketed and sold
throughout the world.
Effective February 17, 1995, the Company expanded its business to
include the manufacturing and distributing of a premium pasta sauce.
Acquisition
1995 Acquisition
On February 17, 1995, the Company, through MRI consummated the purchase
of the assets and certain liabilities of Mama Rizzo's, which is engaged
in the business of manufacturing and distributing pasta sauce under the
name "Mama Rizzo's."
<PAGE>
As consideration for the purchase, the Company initially issued 152,152
shares of the Company's common stock (valued at approximately $950,000
based upon the quoted market price on the date of closing) to M.A.
Yamin, Inc. and assumed through its subsidiary approximately $16.5
million in liabilities including $2,000,000 owed to the Company. The
Company negotiated a settlement with Mama Rizzo's principal creditor
("Ms. Peterson") who was owed approximately $12.2 million for monies
borrowed over time including accrued interest thereon. In satisfaction
for the discharge of this debt, the Company paid approximately $6.3
million in cash with the remaining balance of $5.9 million to be
discharged through the issuance of 913,152 shares of the Company's
common stock at $6.50 per share, the fair market value on such date,
$2,000,000 of which was contingent upon MRI achieving $15 million of
sales during the year ended December 31, 1995. Since sales did not
achieve that level, 307,692 shares were forfeitable on January 1, 1996.
In a separate transaction, the Board of Directors permitted Ms.
Peterson to have the benefit and voting rights of 307,692 option shares
which are issued shares through 1996, with the option to purchase the
shares at any time in 1996 for $1.50 per share. Ms. Peterson also owns
100,000 shares from a settlement from Yamin. At the end of 1995, and
March 31, 1996, Ms. Peterson has a total of 1,013,152 shares of the
3,095,405 issued and outstanding stock, or 32.7%. Until June 30, 1997,
Ms. Peterson has agreed to vote her shares in accordance with the
recommendations to shareholders by management of PRC on all matters
submitted for a shareholder vote, if in her good faith discretion she
reasonably determines that any such management recommendation is in the
best interests of PRC.
This acquisition was accounted for under the purchase method of
accounting. The Company recorded approximatley $13,950,000 of goodwill
in connection with the acquisition. Management believes the goodwill is
realizable through the operations of the pasta sauce segment which is
expected to increase penetration in existing markets and expand into
new markets in the future.
Management expects that the acquisition will diversify and expand the
Company's revenue base as well as increase long-term profitability. To
date, Mama Rizzo's has incurred losses as it has developed and grown
the business. While revenues have increased each year, the costs
associated with purchasing shelf space and establishing a customer base
have increased as well. Management believes that the cost of purchasing
shelf space, and a great percentage of the costs associated with
developing the customer base, are one-time in nature, and, accordingly,
will begin to
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decrease in the near future. As a result, management expects operating
results to improve and profitability to be attained, although there is
no assurance that such improvements will result.
3. Pro Forma Statements
PRC and Mama Rizzo's
Prior to February 17, 1995, the Company was engaged in the
manufacturing, distribution and servicing of machines used in the food
processing industry. Effective February 17, 1995 (as described in Note
2), the Company acquired the assets and certain liabilities of Mama
Rizzo's, a company engaged in the business of manufacturing and
distributing a premium pasta sauce.
The following table sets forth condensed unaudited pro forma operating
results of the Company and Mama Rizzo's for the three months ended
March 31, 1995. The pro forma operating results assume that the
acquisition of the assets and certain liabilities of Mama Rizzo's had
occurred on January 1, 1995, instead of February 17, 1995. The
condensed pro forma results are not necessarily indicative of the
results of operations had the acquisition been consummated on January
1, 1995, and may not necessarily be indicative of future performance.
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Revenues $ 4,359,000
Operating loss (871,000)
Net loss (925,000)
Net loss per common share $ (.43)
==========
Weighted average shares common
shares outstanding 2,141,732
</TABLE>
4. Debt
Convertible Subordinated Debentures
In 1993, the Company issued 3,910 units, each unit consisting of
one 8% convertible subordinated debenture of $1,000 due December 31,
1999, and 100 three-year warrants, each for the purchase of one share
of the Company's common stock at an exercise price of $6.50 per share.
The debentures are convertible at any time prior to maturity, unless
earlier redeemed, into common stock at a conversion price of $5.00 per
share. As of both December 31, 1995 and March 31, 1996, $2,119,000 of
debentures had been converted by the debenture holders into 424,000
shares of the Company's common stock.
Convertible Debenture Loan
In December, 1995, the Company entered into a loan agreement with
Renaissance Capital Growth & Income Fund III, Inc. ("Renaissance"), for
$3,200,000, at an interest rate of 9%, convertible into common stock at
$1.50 per share, subject to adjustment of conversion price at January
1, 1997 if the market price of PRC stock for a specified period prior
to that date is less than $1.50. If not reduced or converted prior, the
debentures will mature on January 1, 2003, although mandatory principal
payments will commence on January 1, 1999. The loan is secured by all
the assets of the Company. The loan agreement limits the amount of
additional indebtedness incurred by the Company and also requires that
certain financial performance ratios be met. Under certain limited
circumstances, including a change in control, the par value of the
debenture loan will be automatically increased.
Bank Financing
In July, 1995, the Company entered into an asset based lending
agreement with Norwest Business Credit, Inc. The agreement provided a
line of credit up to $2,000,000, based upon collateral, inventory,
equipment and receivables, at a rate of prime plus 4% and extended
through July, 1998. On December 19, 1995, the loan was paid off with
the proceeds of the Renaissance financing, but $2,000,000 remains
available as a facility for working capital. A fee of .5% per annum is
payable monthly on the unused amount of the facility. At March 31,
1996, $773,000 was outstanding under the line of credit.
Vendor Notes Payable
MRI assumed certain liabilities of Mama Rizzo's which represent
trade payables due at the time of purchase. The Company has also
agreed under certain circumstances to indemnify Stephen and MaryAnn
Yamin, the former owners of Mama Rizzo's and M.A. Yamin, Inc. for
any personal liability or expenses they may incur in connection with
defending Mama Rizzo's liabilities, trade payables and accrued
liabilities not assumed by MRI. In several cases the amount due has
been agreed to and supported by notes payable over a period of time.
Terms ranged from several months to 24 months, with interest ranging
from none to 11% per annum.
5. Minority Interest
From acquisition date of February 17, 1995 through yearend 1995, Mama
Rizzo's, Inc. had been a wholly owned subsidiary with 3,000,000 shares
of common stock issued to the Company. At the time of the acquisition,
MRI options to purchase stock were granted to some of the officers,
directors and employees. Early in 1996, an exchange offer was made to
convert the MRI options to the Company's options and that offer was
accepted by all but three resigned employees who exercised their rights
and purchased 78,700 shares, resulting in a minority interest at the
end of the first quarter of 2.56%.
6. Earnings Per Share
Earnings (loss) per common share is computed by dividing income (loss)
by the weighted average number of shares outstanding. For primary
earnings per share, the weighted average impact of the common stock
issued in connection with the acquisition of MRI was considered in the
calculation.
7. Commitments and Contingencies
Mama Rizzo's Debt Extinguishment
The Company has become aware that a $2,970,000 note payable from Mama
Rizzo's to Ms. Peterson that was to be assigned to the Company is no
longer held by her but is held by a third party. The Company believes
that the third party is not a holder in due course of the note and,
therefore, should be unable to assert the note against the Company or
MRI because it was past due at the time of the third party's
acquisition. Ms. Peterson remains liable for a prior representation and
warranty in favor of the Company assuring it of her ownership of the
above described note.
Litigation
In the acquisition by the Company's subsidiary MRI of the assets and
certain of the liabilities of Mama Rizzo's, certain liabilities
and claims were not assumed. Some of those creditors have filed suit
for the collection of their claims against P.S.M.S., Inc., the Texas
corporation formally known as Mama Rizzo's Inc., i.e., against the
Corporation which owned the Mama Rizzo's business acquired by the
Company's subsidiary. P.S.M.S., Inc. does not intend to defend those
claims. The Company has been advised by counsel that neither the
Company nor its subsidiary should have liability for those claims or
for judgments emanating therefrom. The Company has however agreed under
certain circumstances to indemnify Stephen and MaryAnn Yamin, the
former owners of Mama Rizzo's and MAY, for any personal liability or
expenses they may incur in connection with those unassumed liabilities
as well as MAY.
To date, four creditors of P.S.M.S., Inc., which liabilities were not
assumed by the Company or its subsidiary in the acquisition of Mama
Rizzo's, have commenced lawsuits against the Company. Two of these
claims have been settled for approximately one-third of the unassumed
liabilities, principally payable over approximately two years.
Agreement has been reached, but not yet finalized, for the settlement
of a third such claim on the same basis. The aggregate amount payable
in these settlements is $246,770.
A fourth claim with respect to a Mama Rizzo's unassumed liability
remains unresolved. This claim involves a liability of approximately
$130,000 and suit has been brought against the Company and its
subsidiary for the collection thereof. The Company has commenced
negotiations for the settlement of this claim on a basis comparable to
the settlements of the other three claims.
Benton Bankruptcy
As previously discussed, Oren L. Benton, a significant shareholder of
the Company, filed for Chapter 11 bankruptcy protection on February 23,
1995. The Company has conducted business with Mr. Benton and his
affiliates in the past. Management does not expect the bankruptcy of
Mr. Benton to have a material adverse affect on the future operations
of the Company.
ITEM 2 Management's Discussion and Analysis of Financial Condition
and Results of Operations
Liquidity and Capital Resources
At March 31, 1996, the Company's cash balance was $131,000
compared to $806,000 at December 31, 1995. Net cash used in
operating activities was $1,494,000 for the three months ended
March 31, 1996, compared to net cash provided by operating
activities of $714,000 during the same period in 1995. The
decrease in net cash flow from operations between periods is
primarily due to decreases in receivable collections, customer
deposits, and reduction of accounts payable and accrued
liabilities.
During the first quarter of 1996, $26,000 of cash was
generated by investing activities. As previously discussed,
during the first quarter of 1995, the Company completed its
acquisition of the assets and certain liabilities of Mama
Rizzo's. The Company used $3,000,000 during the first quarter
of 1995 in connection with the acquisition.
In July, 1995, the Company entered into an asset based lending
agreement with Norwest Business Credit, Inc. The agreement
provided a line of credit up to $2,000,000, based upon
collateral, inventory, equipment and receivables, at a rate of
prime plus 4% and extended through July, 1998. On December 19,
1995, the line was paid down with the Renaissance financing,
but $2,000,000 was available as a facility for working
capital. During the first quarter of 1996, net cash flow of
$773,000 was generated from borrowings under the line of
credit.
In December, 1995, the Company entered into a loan agreement
with Renaissance for $3,200,000, at an interest rate of 9%,
convertible into common stock at $1.50 per share, subject to
adjustment of conversion price at January 1, 1997 if the
market price of PRC stock for a period prior to that date is
less than $1.50. If not reduced or converted prior, the
debentures will mature on January 1, 2003.
MRI assumed certain liabilities of Mama Rizzo's which
represent trade payables due at the time of purchase. The
Company has also agreed under certain circumstances to
indemnify Stephen and MaryAnn Yamin, the former owners of Mama
Rizzo's and MAY, for any personal liability or expenses they
may incur in connection with defending Mama Rizzo's
liabilities not assumed by MRI. Trade payables and accrued
liabilities include amounts due to those vendors, and in
several cases the amount due has been agreed to and supported
by notes payable over a period of time. Terms ranged from
several months to 24 months, with interest ranging from none
to 11% per annum.
The Company is considering alternatives for the possible
restructuring of its businesses, including the possible sale
of some assets. Proceeds of any such restructuring would in
part be utilized for the Company's Mama Rizzo's pasta sauce
business. No final decision however has been made on a
restructuring and any such decision will require the
concurrence of the Company's secured lenders with whom the
Company has initiated preliminary discussions.
At March 31, 1996, there were no material commitments for
capital expenditures.
Results of Operations
A net loss of $788,000 was recorded by the Company for the
three months ended March 31, 1996 compared to a net loss of
$556,000 for the same period of the prior year. Consolidated
revenues increased $877,000 between periods, but this increase
was offset by increases in operating expense of $782,000 and
interest expense of $125,000.
The following discussion pertains to the operating results of
the Company's two business segments. For purposes of this
discussion, the food processing equipment business is referred
to as "PRC" while the pasta sauce business is referred to as
"MRI".
PRC Operating Results
PRC recorded a loss from operations of $190,000 for both the
quarter ended March 31, 1996 and the same period of the prior
year.
PRC revenues decreased $60,000, or 5%, between periods and
gross profit increased $79,000, or 20%. The increase in gross
profit was primarily the result of efficiencies in
manufacturing which resulted in an improvement of $139,000, or
17%, in cost of goods sold.
PRC operating expenses increased $80,000, or 14%, for the
quarter ended March 31, 1996 compared to the prior year
primarily as the result of an increase of $84,000, or 20%, in
general and administrative expense. PRC's general and
administrative expense was 43% of revenue for the period ended
March 31, 1996, as compared to 34% for the prior year. This
increase was primarily the result of increased payroll
expense.
MRI Operating Results
The following discussion pertains to the March 31, 1996 actual
compared to March 31, 1995 pro forma operating results.
A net loss of $444,000 was recorded by MRI for the quarter
ended March 31, 1996 compared to a net loss of $701,000 for
the same period of the prior year. The primary reason for the
decreased loss was a decrease of $275,000, or 17%, in
operating expense (see discussion below).
MRI revenues decreased $1,033,000, or 33%, between periods
while gross profit decreased $6,000, or 1%. This was primarily
the result of reduced manufacturing costs. Cost of goods sold,
as a percent of sales, was 57% for the period ending March 31,
1996 and 71% for the same period in 1995.
MRI operating expenses decreased $269,000, or 40%, between
periods. The primary reason for this decrease was a decrease
of $324,000, or 30%, in selling and marketing expense. General
and administrative expense remained fairly constant between
periods. MRI's general and administrative expense was 20% of
revenues for the period ended March 31, 1996 compared to 12%
for the prior year. MRI's selling and marketing expense was
38% of revenues for the period ended March 31, 1996 compared
to 36% for the prior year.
MRI recorded a loss from operations of $412,000 for the
quarter ended March 31, 1996 compared to $682,000 for the same
period of the prior year. The decrease in loss of $269,000, or
40%, was primarily the result of decreased operating expenses.
PART II - OTHER INFORMATION
Items 1-5 - None Applicable
Item 6 - Exhibits and Reports on Form 8-K
(a) None applicable
(b) None applicable
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.
PACKAGING RESEARCH CORPORATION
Registrant
Dated: May 14, 1996 By:/s/ ROBERT A. FILLINGHAM
------------------ ------------------------
Robert A. Fillingham
President
(Principal Executive Officer)
Dated: May 14, 1996 By:/s/ ROBERT H. PORTER
------------------ --------------------
Robert H. Porter
Chief Financial Officer
(Principal Financial Officer)
<TABLE> <S> <C>
<ARTICLE> 5
<CIK> 0000718474
<NAME> Packaging Research Corporation
<MULTIPLIER> 1
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<S> <C>
<PERIOD-TYPE> 3-MOS
<FISCAL-YEAR-END> DEC-31-1996
<PERIOD-START> JAN-01-1996
<PERIOD-END> MAR-31-1996
<EXCHANGE-RATE> 1.000
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0
245
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