<PAGE> 1
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 Quarter ended June 30, 2000 Commission File Number 1-9335
--------
SCHAWK, INC.
(Exact name of Registrant
as specified in its charter)
DELAWARE
(State or other jurisdiction of incorporation or organization)
66-0323724
(I.R.S. Employer Identification No.)
1695 RIVER ROAD
DES PLAINES, ILLINOIS
(Address of principal executive office)
60018
(Zip Code)
847-827-9494
(Registrant's telephone number, including area code)
Securities registered pursuant to Section 12(b) of the Act:
Title of Each Class Name of Exchange on Which Registered
------------------- ------------------------------------
CLASS A COMMON STOCK, NEW YORK STOCK EXCHANGE
$.008 PAR VALUE
Indicated 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
--- ---
The number of shares outstanding of each of the issuer's classes of common stock
as of June 30, 2000, are 21,322,070 shares, Common Stock, $.008 par value
DOCUMENTS INCORPORATED BY REFERENCE
Pursuant to the Securities Exchange Act of 1934 Release 15502 and Rule
240.03(b), the pages of this document have been numbered sequentially. The total
number of pages contained herein is 16.
<PAGE> 2
PART I
Schawk, Inc.
Consolidated Balance Sheets
(In Thousands)
<TABLE>
<CAPTION>
JUNE 30, 2000 DECEMBER 31,
(UNAUDITED) 1999
------------------------------
<S> <C> <C>
ASSETS
Current assets:
Cash and cash equivalents $ 579 $ 2,893
Short term investments -- 3,604
Trade accounts receivable, less allowance for doubtful accounts
of $851 at June 30, 2000 and $730 December 31, 1999 42,606 41,441
Inventories 9,898 7,813
Prepaid expenses and other 3,717 3,629
Refundable income taxes 308 252
Deferred income taxes 1,159 1,197
------------------------------
Total current assets 58,267 60,829
Property and equipment, net 47,427 48,777
Excess of cost over net assets acquired, less accumulated amortization
of $8,337 at June 30, 2000 and $7,180 at December 31, 1999 64,012 64,529
Other assets 2,942 3,126
------------------------------
Total assets $ 172,648 $ 177,261
==============================
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Trade accounts payable $ 7,416 $ 6,928
Accrued expenses 15,060 17,116
Income taxes payable 292 356
Notes payable to banks 9,000 8,400
Current portion of long-term debt and capital lease obligations 5,651 5,665
------------------------------
Total current liabilities 37,419 38,465
Long-term debt 54,000 63,370
Capital lease obligations 3,899 4,124
Other 1,099 1,013
Deferred income taxes 2,688 2,403
Minority interest in consolidated subsidiary 1,160 1,228
STOCKHOLDERS' EQUITY:
Common stock, $0.008 par value, 40,000,000 shares authorized, 23,023,134 and
22,907,563 shares issued at June 30, 2000 and December 31, 1999,
respectively; 21,322,070 and 21,205,101 shares outstanding at June 30, 2000
and December 31, 1999, respectively 182 182
Additional paid-in capital 83,254 82,951
Retained earnings 8,826 3,410
Accumulated comprehensive loss, net (262) (263)
------------------------------
92,000 86,280
Treasury stock, at cost, 1,701,064 and 1,702,462 shares of Common
stock at June 30, 2000 and December 31, 1999, respectively (19,617) (19,622)
------------------------------
Total stockholders' equity 72,383 66,658
------------------------------
Total liabilities and stockholders' equity $ 172,648 $ 177,261
==============================
</TABLE>
See accompanying notes.
2
<PAGE> 3
Schawk, Inc.
Consolidated Statements of Operations
Three Months Ended June 30, 2000 and 1999
(Unaudited)
(In Thousands, Except Per Share Amounts)
<TABLE>
<CAPTION>
2000 1999
---- ----
<S> <C> <C>
Net sales $ 54,741 $ 44,453
Cost of sales 32,128 25,907
Selling, general, and administrative expenses 13,869 11,546
Amortization of intangibles 578 440
-----------------------
Operating income 8,166 6,560
Other income (expense)
Interest and dividend income 9 142
Interest expense (1,459) (897)
Other income 77 319
-----------------------
(1,373) (436)
-----------------------
Income before income taxes 6,793 6,124
Income tax provision 2,906 2,526
-----------------------
Net income available for common shares $ 3,887 $ 3,598
=======================
Earnings per share:
Basic $ 0.18 $ 0.17
Diluted $ 0.18 $ 0.17
Weighted average number of common and common
equivalent shares outstanding 21,436 21,619
Dividends per common share $ 0.0325 $ 0.065
</TABLE>
See accompanying notes.
3
<PAGE> 4
Schawk, Inc.
Consolidated Statements of Operations
Six Months Ended June 30, 2000 and 1999
(Unaudited)
(In Thousands, Except Per Share Amounts)
<TABLE>
<CAPTION>
2000 1999
-------------------------
<S> <C> <C>
Net sales $ 107,597 $ 86,430
Cost of sales 63,322 49,420
Selling, general, and administrative expenses 28,477 22,262
Amortization of intangibles 1,157 893
-------------------------
Operating income 14,641 13,855
Other income (expense)
Interest and dividend income 29 374
Interest expense (2,886) (1,780)
Other income 149 530
-------------------------
(2,708) (876)
-------------------------
Income before income taxes 11,933 12,979
Income tax provision 5,138 5,317
-------------------------
Net income available for common shares $ 6,795 $ 7,662
=========================
Earnings per share:
Basic $ 0.32 $ 0.35
Diluted $ 0.32 $ 0.35
Weighted average number of common and common
equivalent shares outstanding 21,448 21,766
Dividends per common share $ 0.065 $ 0.13
</TABLE>
See accompanying notes
4
<PAGE> 5
Schawk, Inc.
Consolidated Statements of Cash Flows
Six Months Ended June 30, 2000 and 1999
(In Thousands)
<TABLE>
<CAPTION>
2000 1999
-----------------------
<S> <C> <C>
OPERATING ACTIVITIES
Net income $ 6,795 $ 7,662
Adjustments to reconcile net income to cash provided by (used in)
operating activities:
Depreciation and amortization 7,582 5,605
Deferred income taxes 267 40
Gain (loss) realized on sale of marketable securities 2 (420)
Minority interest (68) --
Changes in operating assets and liabilities, net of effects from
acquisitions:
Trade accounts receivable (1,165) 1,441
Inventories (2,085) (982)
Prepaid expenses and other (88) 579
Trade accounts payable and accrued expenses (1,023) (750)
Income taxes refundable/payable (64) (702)
-----------------------
Net cash provided by operating activities 10,153 12,473
INVESTING ACTIVITIES
Proceeds from sale of short term investments 3,602 11,614
Purchase of short term investments -- (6,343)
Capital expenditures (5,578) (9,255)
Acquisitions, net of cash acquired (610) (8,363)
Other 112 (2,301)
-----------------------
Net cash used in investing activities (2,474) (14,648)
FINANCING ACTIVITIES
Proceeds from short term borrowings 600 10,855
Issuance of common stock 308 930
Principal payments on debt (9,370) --
Principal payments on capital lease obligations (256) (311)
Common stock dividends (1,379) (2,813)
Purchase of common stock -- (5,990)
Other 104 --
-----------------------
Net cash provided by (used in) financing activities (9,993) 2,671
-----------------------
Net increase (decrease) in cash and cash equivalents (2,314) 496
Cash and cash equivalents beginning of period 2,893 2,226
-----------------------
Cash and cash equivalents end of period $ 579 $ 2,722
=======================
</TABLE>
See accompanying notes.
5
<PAGE> 6
Schawk, Inc.
Notes to Consolidated Interim Financial Statements
(Thousands of dollars, except per share data)
NOTE 1. BASIS OF PRESENTATION
The consolidated financial statements have been prepared pursuant to the rules
and regulations of the Securities and Exchange Commission. Certain information
and footnote disclosures normally included in annual financial statements
prepared in accordance with generally accepted accounting principles have been
condensed or omitted pursuant to such rules and regulations, although Schawk,
Inc. (the Company) believes the disclosures included are adequate to make the
information presented not misleading. In the opinion of management, all
adjustments necessary for a fair presentation for the periods presented have
been reflected and are of a normal recurring nature. These financial statements
should be read in conjunction with the Company's consolidated financial
statements and the notes thereto for the three years ended December 31, 1999.
NOTE 2. INTERIM RESULTS
Results of operations for the interim periods are not necessarily indicative of
the results to be expected for the full year.
NOTE 3. DESCRIPTION OF BUSINESS
The Company is a leading provider of digital imaging prepress services for the
consumer products industry. The Company focuses on providing these services to
multi-national clients in three primary markets: consumer products packaging,
advertising agencies and promotion.
NOTE 4. RESTRUCTURING PLAN
The Company has acquired thirteen businesses within the last twenty-four months,
of which 8 business units were acquired during 1999. As a result of these
acquisitions, in the fourth quarter of fiscal 1999, the Company adopted and
began executing a restructuring plan (the Plan) to integrate, consolidate and/or
move certain operations, replace obsolete assets used in its operations with
newly acquired technologies with more efficient throughput and eliminate
redundant activities within the Company's workforce through early retirements,
lay-offs and normal terminations. The Plan included the consolidation of certain
duplicate operations at various Company facilities in Connecticut, Illinois,
Ohio, New Jersey and New York as well as workforce reductions at the Company's
operations in Wisconsin, primarily due to lower sales volumes. A total of
approximately 60 employees (approximately 4% of the Company's workforce) were
impacted by the workforce reduction efforts through early retirements, lay-offs
and normal terminations. The shutdowns and consolidations were started in
December 1999, and are scheduled to be completed by September 30, 2000. As a
result of the Plan, the Company recorded restructuring and other charges of $2.2
million pre-tax in the fourth quarter of 1999, which consisted of $1.7 million
of estimated lease termination costs and $0.5 million of estimated severance
costs. During the three and six months ended June 30, 2000, approximately $0.2
million and $0.3 million, respectively, was charged against the restructuring
reserve.
NOTE 5. IMPAIRMENT OF MACHINERY AND EQUIPMENT
In connection with the adoption of the Plan, the Company performed a
comprehensive review of all of its remaining fixed assets to identify any
obsolete and impaired assets in both the operations being consolidated and the
Company's other operations. As a result of this review, assets with a net book
value $0.9 million pre-tax, consisting of equipment and software, were deemed to
be impaired or obsolete. Accordingly, a charge for that amount was recorded as
part of the restructuring and other charges during the fourth quarter of 1999.
The largest part of the charge related to a short-run digital press that was
written down to its estimated net realizable value of $0.2 million, resulting in
a $0.4 million write-down. The press is currently idle and is being held for
disposal.
6
<PAGE> 7
NOTE 6. INVENTORIES
Inventories consist of the following:
<TABLE>
<CAPTION>
JUNE 30 DECEMBER 31
2000 1999
---- ----
<S> <C> <C>
Raw materials $ 2,534 $ 2,521
Work in process 8,572 6,500
-------- --------
11,106 9,021
Less: LIFO reserve (1,208) (1,208)
-------- --------
$ 9,898 $ 7,813
======== ========
</TABLE>
NOTE 7. INVESTMENTS
The Company liquidated the remaining investment in its portfolio in January 2000
and received proceeds of $3,602. This investment had been written down to a fair
market value of $3,604 as of December 31, 1999. A negligible loss was recorded
in connection with the sale of the investment in January 2000. Realized losses
on investments are included in Other income on the Consolidated Statement of
Operations. The Company had no investments as of June 30, 2000.
NOTE 8. COMPREHENSIVE INCOME
Statement of Financial Accounting Standards 130 (SFAS 130) requires unrealized
gains and losses on the Company's available-for-sale securities and foreign
currency translation adjustments to be included in comprehensive income. During
the quarter ended March 31, 2000, the Company liquidated all of its remaining
available-for-sale securities.
The following tables set forth the components of comprehensive income, net of
related tax:
<TABLE>
<CAPTION>
THREE MONTHS ENDED JUNE 30
--------------------------
2000 1999
------- -------
<S> <C> <C>
Net income $ 3,887 $ 3,598
Increase (decrease) in unrealized appreciation of
investments -- (816)
Foreign currency translation adjustments (175) 253
------- -------
Comprehensive income $ 3,712 $ 3,035
======= =======
</TABLE>
<TABLE>
<CAPTION>
SIX MONTHS ENDED JUNE 30
------------------------
2000 1999
------- -------
<S> <C> <C>
Net income $ 6,795 $ 7,662
Increase (decrease) in unrealized appreciation of
investments -- (244)
Foreign currency translation adjustments 1 409
------- -------
Comprehensive income $ 6,796 $ 7,827
======= =======
</TABLE>
The components of accumulated comprehensive loss, net of related tax as of June
30, 2000 and December 31, 1999 consisted entirely of foreign currency
translation adjustments.
7
<PAGE> 8
MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF
OPERATIONS
(Thousands of dollars, except per share amounts)
Certain statements contained herein that relate to the Company's beliefs or
expectations as to future events relating to, among other things, the success of
the Restructuring Plan, the adequacy of the Company's financing arrangements to
meet future liquidity needs and the Company's expected effective tax rate for
2000, are not statements of historical fact and are forward-looking statements
within the meaning of Section 27A of the Securities Act and Section 21E of the
Exchange Act and are subject to the "Safe Harbor" created thereby. Although the
Company believes that the assumptions upon which such forward-looking statements
are based are reasonable within the bounds of its knowledge of its business and
operations, it can give no assurance the assumptions will prove to have been
correct. Important factors that could cause actual results to differ materially
and adversely from the Company's expectations and beliefs include, among other
things, the continued demand for its services, retention of key management and
operational personnel, the ability of the Company to implement its growth
strategy, the stability of state, federal and foreign tax laws, the ability of
the Company to identify and exploit industry trends and to exploit technological
advances in the imaging industry, as well as other factors detailed in the
Company's filings with the Securities and Exchange Commission.
ACQUISITIONS AND RESTRUCTURING
The Company has acquired thirteen businesses within the last twenty-four months,
of which 8 business units were acquired during 1999. As a result of these
acquisitions, in the fourth quarter of fiscal 1999, the Company adopted and
began executing a restructuring plan (the Plan) to integrate, consolidate and/or
move certain operations, replace obsolete assets used in its operations with
newly acquired technologies with more efficient throughput and eliminate
redundant activities within the Company's workforce through early retirements,
lay-offs and normal terminations. The Plan included the consolidation of certain
duplicate operations at various Company facilities in Connecticut, Illinois,
Ohio, New Jersey and New York as well as workforce reductions at the Company's
operations in Wisconsin, primarily due to lower sales volumes. A total of
approximately 60 employees (approximately 4% of the Company's workforce) were
impacted by the workforce reduction efforts through early retirements, lay-offs
and normal terminations. Also, in connection with the adoption of the Plan, the
Company performed a comprehensive review of all of its remaining fixed assets to
identify any obsolete and impaired assets.
As a result of the Plan and the asset review efforts, the Company recorded
restructuring and other charges of $3.1 million pre-tax in the fourth quarter of
1999, which consisted of $1.7 million of estimated lease termination costs, $0.9
million of costs related to the write-down of impaired or obsolete machinery and
equipment and $0.5 million of estimated severance costs. During the three and
six months ended June 30, 2000, approximately $0.2 million and $0.3 million,
respectively, was charged against the restructuring reserve. Management
currently expects its remaining efforts under the Plan to be completed by
September 30, 2000.
THREE MONTHS ENDED JUNE 30, 2000 VERSUS THREE MONTHS ENDED JUNE 30, 1999
NET SALES of $54,741 for the second quarter of 2000 represented 23.1% increase
from sales of $44,453 for the same period in 1999. The increase was primarily
attributable to revenues from businesses acquired in 1999 as well as internal
growth. Sales from acquired business units accounted for 20.7 points of the
increase while sales to new and existing customers resulted in the remaining 2.4
points increase in net sales.
COST OF SALES for the second quarter of 2000 increased to 58.7% from 58.3% of
net sales for the comparable period in the prior year. The slightly higher cost
of sales resulted from lower gross margins in the business units acquired in
1999 as well as the impact of lower high margin sales in the fiscal 2000 period.
OPERATING INCOME in the second quarter of 2000 increased 24.5% to a record
$8,166 from $6,560 for the same period in 1999. The increase primarily resulted
from higher volumes for most of the Company's operations and improved operating
earnings at business units acquired during 1999. Selling, general and
administrative expenses decreased to 25.3% of sales for the second quarter of
2000 from 26.0% for the comparable prior year period. The decrease resulted from
ongoing cost reductions achieved through the Company's ongoing efforts to
integrate businesses acquired during 1999. Amortization costs associated with
operations acquired during 1999 and earlier increased 31.4% to $578 in the
second quarter of 2000 versus $440 in the comparable prior year period.
8
<PAGE> 9
OTHER INCOME (EXPENSE) - NET increased to $(1,373) of net expense for the second
quarter of 2000 compared with $(436) of net expense for the same period of 1999.
Interest expense for the second quarter of 2000 increased to 2.7% versus 2.0% of
sales in the comparable prior year period. The increase in interest expense
primarily resulted from higher new borrowings used to fund acquisitions.
Interest income and dividend income have steadily declined as the Company has
liquidated its investment portfolio to provide funds for financing acquisitions.
Other income, which consists primarily of gains on sales of investments and
capital gain distributions, also declined in the second quarter of 2000 from the
same period as 1999 as the remainder of the Company's investment portfolio was
liquidated in January, 2000.
INCOME BEFORE INCOME TAXES increased to $6,793 for the second quarter of 2000
from $6,124 for the same period of 1999 for the reasons previously discussed.
INCOME TAX PROVISION increased to 42.8% of pretax income during the first
quarter of 2000 versus 41.2% for the comparable prior year period. The increase
in the effective tax rate is primarily attributable to an increase in
non-deductible goodwill incurred in conjunction with businesses acquired in 1999
as well as an increase in the proportion of the Company's income that is derived
from states with higher tax rates. The Company's annual effective tax rate for
fiscal 2000 is expected to approximate 42.0% - 43.0% while the Company's
effective tax rate for fiscal 1999 was 41.1%.
NET INCOME increased to $3,887 for the second quarter of 2000 from $3,598 for
the same period of 1999 for the reasons previously discussed.
BASIC AND DILUTED EARNINGS PER SHARE was $0.18 for the second quarter of 2000
compared with $0.17 for the same period in 1999. Weighted average common and
common equivalent shares outstanding decreased to 21,436 for the first quarter
of 2000 from 21,619 for the same period of 1999, primarily as a result of shares
repurchased during the latter part of 1999 under the Company's common stock
repurchase program and a decrease in the number of dilutive outstanding stock
options for the quarter ended June 30, 2000.
SIX MONTHS ENDED JUNE 30, 2000 VERSUS SIX MONTHS ENDED JUNE 30, 1999
NET SALES of $107,597 for the first half of 2000 represented a 24.5% increase
from sales of $86,430 for the first half of 1999. Revenues from businesses
acquired during 1999 accounted for 20.5 points of the increase while sales to
new and existing customers resulted in the remaining 4.0 points increase in net
sales.
COST OF SALES for the first half of 2000 increased to 58.8% from 57.2% of net
sales for the first half of 1999. The higher cost of sales percentage in the
2000 period is a result of higher lower margin sales in the first quarter of
2000 combined with higher cost of sales at the business units acquired during
1999.
OPERATING INCOME in the first half of 2000 increased 5.7% to a record $14,641
from $13,855 for the same period in 1999. The increase primarily resulted from
higher volumes for most of the Company's operations in the second of 2000 and
improved operating earnings in the 2000 period at business units acquired during
1999. Selling, general and administrative expenses increased to 26.5% of sales
for the first half of 2000 from 25.8% for the comparable prior year period. The
increase resulted from higher fixed general and administrative expenses during
the first quarter of 2000. Amortization costs increased 29.6% to $1,157 in the
first half of 2000 versus $893 in the comparable prior year period primarily as
a result of increased amortization of goodwill from businesses acquired in 1999
and the latter portion of 1998.
OTHER INCOME (EXPENSE) - NET increased to $(2,708) of net expense for the first
half of 2000 compared with $(876) of net expense for the same period of 1999.
Interest expense for the first half of 2000 increased to 2.7% versus 2.1% of
sales in the comparable prior year period. The increase in interest expense
primarily resulted from higher new borrowings used to fund acquisitions.
Interest income and dividend income have steadily declined as the Company has
liquidated its investment portfolio to provide funds for financing acquisitions.
Other income, which consists primarily of gains on sales of investments and
capital gain distributions, also declined in the first half of 2000 from the
same period as 1999 as the remainder of the Company's investment portfolio was
liquidated in January, 2000.
9
<PAGE> 10
INCOME BEFORE INCOME TAXES decreased to $11,933 for the first half of 2000 from
$12,979 for the same period of 1999 for the reasons previously discussed.
INCOME TAX PROVISION increased to 43.1% of pretax income during the first
quarter of 2000 versus 41.0% for the comparable prior year period. The increase
in the effective tax rate is primarily attributable to an increase in
non-deductible goodwill incurred in conjunction with businesses acquired in 1999
as well as an increase in the proportion of the Company's income that is derived
from states with higher tax rates. The Company's annual effective tax rate for
fiscal 2000 is expected to approximate 42.0% - 43.0% while the Company's
effective tax rate for fiscal 1999 was 41.1%.
NET INCOME decreased to $6,795 for the first half of 2000 from $7,662 for the
same period of 1999 for the reasons previously discussed.
BASIC AND DILUTED EARNINGS PER SHARE was $0.32 for the first half of 2000
compared with $0.35 for the same period in 1999. Weighted average common and
common equivalent shares outstanding decreased to 21,448 for the first quarter
of 2000 from 21,766 for the same period of 1999, primarily as a result of shares
repurchased during the latter part of 1999 under the Company's common stock
repurchase program which was partially offset by an increase in the number of
dilutive outstanding stock options for the six months ended June 30, 2000.
LIQUIDITY AND CAPITAL RESOURCES
The Company presently finances its business from available cash held by the
Company and from cash generated from operations. The Company maintains a $65,000
million unsecured credit facility, which expires in May 2004, of which
approximately $ 41,000 was available for borrowings at June 30, 2000. This
facility is subject to certain financial covenants that require the Company to
maintain certain levels of net worth, working capital, and certain other
financial ratios. In addition, the Company maintains a $15,000 unsecured line of
credit and the Company's Canadian subsidiary maintains a Cdn $7,500 unsecured
line of credit, both of which provide financing and working capital flexibility.
Both of these lines of credit are due on demand. As of June 30, 2000,
approximately $6,000 was available under the domestic line of credit and
approximately $5,069 was available under the Canadian line of credit.
Cash from operating activities decreased by approximately $2,320 for the period
ended June 30, 2000 versus the comparable period of the prior year primarily due
to higher required levels of working capital as a result of the acquisitions and
other factors discussed above.
During January 2000, the Company liquidated the remainder of its investments
held for sale and received proceeds of $3,602. This investment had been written
down to a fair market value of $3,604 as of December 31, 1999. A negligible loss
was recorded in connection with the sale of the investment in January 2000. The
Company had no other investments as of June 30, 2000.
At June 30, 2000, outstanding debt of the Company consisted of: (i) unsecured
notes issued pursuant to a Note Purchase Agreement dated August 18, 1995, for
$40,000, the remaining $35,000 of which is due in installments from 2000 through
2005 (averaging seven years) at an average interest rate of 6.92%; and (iii)
$24,000 of borrowings under the Company's unsecured credit facility; and (ii)
approximately US $9,000 of combined borrowings under the Company's domestic and
Canadian subsidiary's lines of credit.
Capital expenditures of $5,578 were made during the first half of 2000 for
machinery, equipment and automation to expand production facilities and improve
productivity. Depreciation and amortization for the first half of 2000 totaled
$7,582.
Management believes that the level of working capital and the cash generated
from operations is adequate for the Company's liquidity needs related to normal
operations, both currently and in the foreseeable future, and that the Company
has sufficient resources to support its growth, either through cash generated
from future operations or through availability under its financing arrangements.
10
<PAGE> 11
SEASONALITY
The historical seasonal impact of the Company's operations is changing due to
its expansion into the advertising and promotion markets and the impact from
recent acquisitions. Due to these changes in the mix of revenues and the impact
of the Company's active acquisition and expansion program, future seasonal
patterns, if any, cannot be accurately predicted at this time.
IMPACT OF INFLATION
The Company believes that over the past three years inflation has not had a
significant impact on the Company's results of operations.
11
<PAGE> 12
PART II - OTHER INFORMATION
Items 1, 2, 3, 4 and 5 are not applicable and have been omitted.
Item 14. Exhibits and Reports on Form 8-K
(A) Reports on Form 8-K
No Forms 8-K were filed during the second quarter of 2000
(B) Exhibit 27 - Financial Data Schedule
12
<PAGE> 13
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, this
report has been signed below by the following persons on behalf of the
registrant and in the capacities indicated on the 13th day of August 2000.
SCHAWK, INC.
------------
(Registrant)
/s/ David A. Schawk
-------------------
President, Chief Executive Officer and Director
/s/ James J. Patterson
----------------------
Senior Vice President and Chief Financial Officer
/s/ Jo Ann Doherty
------------------
Vice President - Finance and Chief Accounting Officer
13
