SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
------------
FORM 10-Q
------------
(MARK ONE)
(X) QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF
THE SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended December 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 0-12954
-----------------------
CADMUS COMMUNICATIONS CORPORATION
-----------------------------------------------------
(Exact name of registrant as specified in its charter)
Virginia 54-1274108
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification Number)
6620 WEST BROAD STREET, SUITE 240
RICHMOND, VIRGINIA 23230
(ADDRESS OF PRINCIPAL EXECUTIVE OFFICES INCLUDING ZIP CODE)
-------------------
REGISTRANT'S TELEPHONE NUMBER, INCLUDING AREA CODE:
(804) 287-5680
------------------
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 issuer's classes of
common stock as of January 31, 1997.
Class Outstanding at January 31, 1997
----- -------------------------------
Common Stock, $.50 Par Value 7,907,556
<PAGE>
CADMUS COMMUNICATIONS CORPORATION AND SUBSIDIARIES
INDEX
Page Number
-----------
Part I. Financial Information
Item 1. Financial Statements
Consolidated Balance Sheets -- 3
December 31, 1996 and June 30, 1996
Consolidated Statements of Income -- 4
Three and Six Month Periods Ended
December 31, 1996 and 1995
Consolidated Statements of Cash Flows -- 5
Six Months Ended December 31, 1996 and 1995
Notes to Consolidated Financial Statements 6
Item 2. Management's Discussion and Analysis of Financial 8
Condition and Results of Operations
Part II. Other Information
Item 4. Submission of Matters to a Vote of Security Holders 12
Item 5. Other Information 12
Item 6. Exhibits and Reports on Form 8-K 13
2
<PAGE>
PART I. Financial Information
CADMUS COMMUNICATIONS CORPORATION AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
(In thousands, except per share data)
<TABLE>
<CAPTION>
December 31, June 30,
1996 1996
------------ -------------
(Unaudited)
<S> <C>
ASSETS
Current assets:
Cash and cash equivalents $ 1,565 $ 1,141
Accounts receivable, net 70,622 76,889
Inventories 22,198 23,486
Deferred income taxes 2,305 2,150
Prepaid expenses and other 4,996 6,062
----------- ------------
Total current assets 101,686 109,728
Property, plant, and equipment (net of accumulated depreciation
of $92,449 at December 31, 1996 and $87,474 at June 30, 1996) 118,066 116,365
Other assets 3,775 3,824
Goodwill, net 50,951 52,846
------------ -------------
Total Assets $ 274,478 $ 282,763
============ =============
LIABILITIES AND SHAREHOLDERS' EQUITY
Current liabilities:
Short-term borrowings $ --- $ 3,323
Current maturities of long-term debt 526 136
Accounts payable 24,798 26,361
Accrued expenses and other liabilities 19,446 20,351
------------ -------------
Total current liabilities 44,770 50,171
Long-term debt 102,647 106,665
Other long-term liabilities 6,607 9,555
Deferred income taxes 9,800 8,804
Shareholders' equity:
Common stock ($.50 par value; authorized shares-16,000,000 shares; issued and
outstanding shares-7,908,000 at December 31, 1996 and June 30, 1996) 3,954 3,954
Capital in excess of par value 52,971 52,971
Retained earnings 53,729 50,643
------------ -------------
Total shareholders' equity 110,654 107,568
------------ -------------
Total Liabilities and Shareholders' Equity $ 274,478 $ 282,763
============ =============
</TABLE>
See accompanying Notes to Consolidated Financial Statements.
3
<PAGE>
CADMUS COMMUNICATIONS CORPORATION AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF INCOME
(In thousands, except per share data)
(Unaudited)
<TABLE>
<CAPTION>
Three Months Ended Six Months Ended
December 31, December 31,
-------------------------------- --------------------------------
1996 1995 1996 1995
------------ ------------ -------------- -------------
<S> <C>
Net sales $ 97,232 $ 85,835 $ 191,154 $ 160,508
Operating expenses:
Cost of sales 76,167 65,090 148,874 121,893
Selling and administrative 15,175 14,988 31,276 28,906
Restructuring gain --- --- (250) ---
------------ ------------ -------------- -------------
91,342 80,078 179,900 150,799
Operating income 5,890 5,757 11,254 9,709
Interest and other expenses:
Interest 2,093 1,395 4,169 2,817
Other, net 272 (23) 783 34
------------ ------------ -------------- -------------
2,365 1,372 4,952 2,851
Income before income taxes and
extraordinary item 3,525 4,385 6,302 6,858
Income taxes 1,343 1,649 2,426 2,606
------------ ------------ -------------- -------------
Income before extraordinary item 2,182 2,736 3,876 4,252
Extraordinary loss on early extinguishment of
debt (net of income tax benefit of $487) --- 795 --- 795
------------ ------------ -------------- -------------
Net income $ 2,182 $ 1,941 $ 3,876 $ 3,457
============ ============= ============== =============
Earnings per share:
Income before extraordinary item $ .27 $ .38 $ .48 $ .62
Extraordinary loss on early
extinguishment of debt --- .12 --- .12
------------ ------------ -------------- -------------
Net income per share $ .27 $ .26 $ .48 $ .50
============ ============ ============== =============
Weighted average common shares
outstanding 8,061 7,458 8,045 6,886
============ ============ ============== =============
Cash dividends per common share $ .05 $ .05 $ .10 $ .10
============ ============ ============== =============
</TABLE>
See accompanying Notes to Consolidated Financial Statements.
4
<PAGE>
CADMUS COMMUNICATIONS CORPORATION AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS
(In thousands)
(Unaudited)
Six Months Ended
December 31,
-----------------------
1996 1995
--------- ---------
OPERATING ACTIVITIES
Net income $ 3,876 $ 3,457
Adjustments to reconcile net income to net cash
provided by operating activities:
Restructuring gain (250) ---
Extraordinary loss on debt prepayment --- 795
Depreciation and amortization 9,187 6,443
Other, net 1,316 786
--------- ---------
14,129 11,481
--------- ---------
Changes in assets and liabilities, excluding debt
and effects of acquisitions
and dispositions:
Accounts receivable, net 4,326 (11,008)
Inventories 1,369 (5,129)
Accounts payable and accrued expenses (3,869) 7,300
Payment to fund pension plan (2,837) ---
Other, net 911 (1,144)
--------- ---------
(100) (9,981)
--------- ---------
Net cash provided by operating activities 14,029 1,500
--------- ---------
INVESTING ACTIVITIES
Proceeds from sale of consumer publishing division 6,500 ---
Capital expenditures (11,959) (11,880)
Proceeds from sales of property, plant, and equipment 1,241 104
Cash paid for businesses acquired --- (8,834)
Other, net (936) (287)
--------- ---------
Net cash used in investing activities (5,154) (20,897)
--------- ---------
FINANCING ACTIVITIES
Net repayment of short-term borrowings (3,323) (3,775)
Proceeds from long-term borrowings 59,000 ---
Repayment of long-term borrowings (63,042) (11,318)
Penalty on early extinguishment of debt --- (1,282)
Proceeds from stock offering, net --- 38,684
Dividends paid (790) (696)
Proceeds from exercise of stock options --- 326
Other, net (296) (58)
--------- ---------
Net cash provided (used) by financing activities (8,451) 21,881
--------- ---------
Increase in cash and cash equivalents 424 2,484
Cash and cash equivalents at beginning of period 1,141 226
--------- ---------
Cash and cash equivalents at end of period $ 1,565 $ 2,710
========= =========
See accompanying Notes to Consolidated Financial Statements.
5
<PAGE>
CADMUS COMMUNICATIONS CORPORATION AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(Unaudited)
1. The accompanying unaudited consolidated financial statements have been
prepared in accordance with generally accepted accounting principles for
interim financial reporting, and with applicable quarterly reporting
regulations of the Securities and Exchange Commission. They do not include
all of the information and footnotes required by generally accepted
accounting principles for complete financial statements and, accordingly,
should be read in conjunction with the consolidated financial statements
and related footnotes included in the Company's Annual Report on Form
10-K for the fiscal year ended June 30, 1996. In the opinion of management,
all adjustments (consisting of normal recurring adjustments) considered
necessary for a fair presentation of interim financial information have been
included.
2. Net income per common share is computed based upon the weighted average
number of shares outstanding during the periods presented. Shares issuable
upon exercise of currently exercisable stock options are treated as
common stock equivalents for purposes of computing primary and fully
diluted net income per share. Weighted average shares outstanding reflects
shares issued in connection with the Company's equity offering completed
in the second quarter of fiscal 1996.
3. Inventories are valued at the lower of cost or market. Inventory costs have
been determined by the first-in, first-out method for approximately 70%
of inventories at December 31, 1996 and at June 30, 1996. Costs for the
remaining inventories have been determined by the last-in, first-out
(LIFO) method. Because the inventory determination under the LIFO method
can only be made at year-end based on the current inventory levels and
costs, interim LIFO determination, including that at December 31, 1996,
must necessarily be based on management's estimates of expected year-end
inventory levels and costs. Since future estimates of inventory levels and
costs are subject to many forces beyond the control of management, interim
financial results are subject to final year-end LIFO inventory amounts.
Components of net inventories at December 31, 1996 and June 30, 1996 were as
follows (in thousands):
December 31, June 30,
1996 1996
------------ --------
Raw materials and supplies $ 6,452 $ 8,055
Work in process 15,698 14,482
Finished goods 1,947 2,848
LIFO reserve (1,899) (1,899)
------ ------
Inventories $22,198 $23,486
======= =======
4. Results of operations for the six months ended December 31, 1996, include
recognition of a $0.3 million gain resulting from a restructuring of the
Company's publishing operations. The restructuring gain included income of
$0.7 million related to the September 30, 1996, sale of its consumer
publishing division, for total consideration of $6.5 million, which was
offset by charges of $0.4 million related to the restructuring and
repositioning of its custom publishing division into the Company's Marketing
Group.
5. In October 1996, the Company entered into an agreement for a revolving
credit/term loan facility of $160 million with its banks, replacing the
former $115 million revolving credit/term loan facility. The $160 million
agreement is composed of a $120 million revolving credit facility, expiring
in October 2001 and a $40 million, seven-year term loan expiring in October
2003. The interest rate options and commitment fees are essentially the
same as under the former $115 million facility. Also in October 1996, the
Company entered into an interest rate swap
6
<PAGE>
agreement with a notional amount of $40 million. This swap, which expires
in September 2001, effectively converts $40 million of variable-rate
debt to fixed-rate debt. Under the terms of this agreement, the Company
makes payments at a fixed rate of 6.7% and receives payments based on 30-day
LIBOR.
Also in October 1996, using the additional capacity available under the new
$160 million facility referred to above, the Company repaid $40 million
of 6.74% senior unsecured notes which were borrowed in fiscal 1994 to fund
the Company's fiscal 1994 acquisition of the net assets of the Waverly
Press division of Waverly, Inc. There was no prepayment penalty associated
with this debt retirement.
7
<PAGE>
CADMUS COMMUNICATIONS CORPORATION AND SUBSIDIARIES
MANAGEMENT'S DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS
OVERVIEW
Cadmus Communications Corporation is an integrated communications company
offering products and services in three broad areas: periodicals, graphic
communications, and marketing. Headquartered in Richmond, Virginia, Cadmus is
one of the largest graphic communications companies in North America.
Effective July 1, 1996, the Company reorganized its operational structure into
the Periodicals, Graphic Communications, Marketing, and Publishing groups. In
doing so, the Company also realigned the various product lines which comprise
each group. Under this new structure the Periodicals Group includes the research
journals and magazine product lines; the Graphic Communications Group includes
the financial communications, specialty packaging, promotional printing,
marketing services, and technology solutions product lines; the Marketing Group
includes the direct marketing, catalogs, custom publishing, and multimedia
product lines; and the Publishing Group included the consumer publishing product
line. Effective with the sale of the Company's consumer publishing division in
September 1996, the Publishing Group ceased to exist and custom publishing was
realigned into the Marketing Group. Therefore, all discussion and analysis in
future filings will include references to only the Periodicals, Graphic
Communications, and Marketing groups.
RESULTS OF OPERATIONS
The following table presents the major components from the Consolidated
Statements of Income as a percentage of net sales for the three and six months
ended December 31, 1996 and 1995:
Three Months Ended Six Months Ended
December 31, December 31,
---------------------------------------
1996 1995 1996 1995
---- ---- ----- -----
Net sales 100.0% 100.0% 100.0% 100.0%
Cost of sales 78.3 75.8 77.9 75.9
----- ----- ----- -----
Gross profit 21.7 24.2 22.1 24.1
Selling and administrative expenses 15.6 17.5 16.3 18.0
Restructuring gain --- --- (0.1) ---
------ ------ ------ ------
Operating income 6.1 6.7 5.9 6.1
Interest expense 2.2 1.6 2.2 1.8
Other expenses, net 0.3 0.0 0.4 0.0
----- ----- ----- -----
Income before income taxes and
extraordinary item 3.6 5.1 3.3 4.3
Income taxes 1.4 1.9 1.3 1.6
----- ----- ----- -----
Income before extraordinary item 2.2 3.2 2.0 2.7
Extraordinary loss on early
extinguishment of debt, net of tax --- 0.9 --- .5
------ ----- ------ -----
Net income 2.2% 2.3% 2.0% 2.2%
===== ===== ===== =====
8
<PAGE>
RESULTS OF OPERATIONS (continued)
SALES
Net sales for the second quarter of fiscal 1997 increased 13% to $97.2 million
compared to $85.8 million for the second quarter of fiscal 1996. Excluding the
impact of acquisitions and divestitures, net sales declined by 5%. Lower prices
for paper negatively impacted net sales in the second quarter. Adjusted for
lower paper prices, acquisitions and divestitures, net sales increased 1% for
the second quarter of fiscal 1997.
Net sales for the first six months of fiscal 1997 increased 19% to $191.2
million from $160.5 million in the same period of fiscal 1996 primarily due to
the acquisitions of Lancaster Press, Inc. ("Lancaster") in the fourth quarter of
fiscal 1996 and certain assets of The Software Factory, Inc. (subsequently
renamed "Cadmus Technology Solutions") in the second quarter of fiscal 1996.
Excluding the impact of acquisitions, divestitures and declining paper prices,
net sales increased 1% during the first six months of fiscal 1997 over the same
period of fiscal 1996.
The table below displays net sales for each of these groups expressed as a
percentage of net sales:
Three Months Ended Six Months Ended
December 31, December 31,
-------------------------------------------
1996 1995 1996 1995
---- ---- ---- ----
Periodicals 53.0% 44.6% 52.9% 46.8%
Graphic Communications 34.2 35.5 34.8 35.0
Marketing 12.8 17.0 11.1 15.1
Publishing --- 2.9 1.2 3.1
----- ----- ----- -----
100.0% 100.0% 100.0% 100.0%
===== ===== ===== =====
The Periodicals Group sales rose 33% and 34% in the second quarter and first six
months of fiscal 1997, respectively, due to the combination of the acquisition
of Lancaster and continued growth in research journal sales. Excluding the
effect of Lancaster, sales of research journals increased 4% and 2% for the
second quarter of fiscal 1997 and the first six months of fiscal 1997,
respectively. Magazine sales declined 27% for the second quarter and first six
months of fiscal 1997, as a result of the Company continuing to examine the
working relationships with slower-paying, disruptive, or otherwise non-strategic
customers, as well as declining paper prices.
The Graphic Communications Group reported sales increases of 8% and 19% for the
second quarter and first six months of fiscal 1997. The growth in sales was due
to the acquisition of certain assets of Cadmus Technology Solutions in the
second quarter of fiscal 1996, and continued growth from the Company's specialty
packaging and financial communications product lines. Specialty packaging sales
rose 34% and 45% for the two periods due primarily to growth from existing
clients. Financial communications sales increased by 11% for the two periods
primarily due to increased mutual fund business and growth in full-service
contracts with financial institutions. Offsetting these gains was a decline in
marketing services sales of 2% and 4% for the two periods as a result of delays
in promotional campaigns and programs for quick service restaurant and beverage
clients.
The Marketing Group reported sales decreases of 13% and 12% for the second
quarter and first six months of fiscal 1997, respectively. Excluding the impact
of acquisitions, sales declined by 30% and 25% for the two periods. Custom
publishing sales declined 49% and 27% for the two periods due to large one-time
projects in fiscal 1996 which did not repeat in fiscal 1997. Direct marketing
sales declined 9% and 13% for the two periods due primarily to a change in sales
mix. Direct marketing agency fee income, which excludes pass through costs, rose
12% and 19% for the second quarter and first six months of fiscal 1997.
9
<PAGE>
RESULTS OF OPERATIONS (continued)
OPERATING EXPENSES
Cost of sales increased to 78.3% of net sales and 77.9% for the second quarter
and first six months of fiscal 1997 compared to 75.8% and 75.9% of net sales,
respectively, for the same periods of fiscal 1996. These increases were
primarily attributable to margin erosion in the Company's marketing services,
interactive and custom publishing businesses, each of which experienced declines
in sales and higher production costs. Partially offsetting these negative
factors was significant margin improvement from the Periodicals Group as a
result of an improved sales mix and improved manufacturing efficiencies. Direct
marketing cost of sales also declined as a percent of sales due to a change in
mix to higher-value creative services revenues.
Selling and administrative expenses declined to 15.6% and 16.3% of net sales for
the second quarter and first six months of fiscal 1997, compared to 17.5% and
18.0%, respectively, for the same periods of fiscal 1996. This decline as a
percent of net sales is primarily due to the inclusion of Lancaster, which has a
lower selling and administrative ratio than the Company in aggregate, and to
cost controls imposed by management in fiscal 1997. Excluding the Lancaster
acquisition, selling and administrative expenses would have been 17.1% and 18.0%
of sales for the second quarter and first six months of fiscal 1997,
respectively.
In the first quarter of fiscal 1997 the Company recorded a $0.3 million pretax
gain to restructure the Publishing Group operations as it was determined that
the consumer publishing division was no longer consistent with the Company's
strategy to become an integrated, solutions-based communications and marketing
company. Therefore, the consumer publishing division was sold and the Company
recorded a $0.7 million gain from this sale. The proceeds from the sale of this
division were used to pay down debt. In addition, as part of this restructuring,
the Company recorded a $0.4 million charge related to the strategic
repositioning of the custom publishing division into the Marketing Group. The
charge included costs of $0.2 million for termination benefits for five
associates and $0.2 million for costs related to repositioning the client base
to align with the Marketing Group strategies.
INTEREST AND OTHER EXPENSES AND INCOME TAXES
Interest expense increased $.7 million or 50% for the second quarter of fiscal
1997 over the same period of fiscal 1996 and $1.4 million or 48% for the six
month period ended December 31, 1996, over the same period of the prior year.
These increases were primarily attributable to additional debt incurred related
to the Lancaster acquisition in May 1996, partially offset by slightly lower
interest rates.
The effective tax rate was 38.5% for the first six months of fiscal 1997,
consistent with 38.0% for the same period of fiscal 1996.
10
<PAGE>
LIQUIDITY AND CAPITAL RESOURCES
Management believes that the Company has the financial resources and access to
capital necessary to fund internal growth and acquisitions. The Company's major
demands on capital are investments in property, plant, and equipment, working
capital, and acquisitions.
Net cash provided by operating activities totaled $14.0 million for the first
six months of fiscal 1997, representing a $12.5 million increase from $1.5
million provided by operating activities in the comparable prior year period. A
portion of the increase was attributable to a $2.6 million increase in cash
generated from operations (net income plus depreciation and amortization and
other non-cash expenses). In addition, there was a $10.7 million improvement,
from the comparable prior year period, in net cash requirements to fund the
Company's working capital investment, offset by a $2.8 million cash contribution
in fiscal 1997, to the Company's pension plan. The lower level of cash required
to fund the Company's working capital investment was a result of lower sales,
excluding acquisitions, for the first six months of fiscal 1997, improvement in
accounts receivable collection efforts, and lower inventory balances.
Net cash used in investing activities totaled $5.2 million for the first six
months of fiscal 1997, as compared to $20.9 million used in the comparable
prior year period. This reduction was due primarily to proceeds of $6.5
million from the sale of the Company's consumer publishing division in
September 1996 and $1.2 million in proceeds from the sale of certain property,
plant, and equipment. Capital expenditures totaled $12.0 million for the
first six months of fiscal 1997. Major projects included new presses to
support the Company's specialty packaging and financial communications
product lines, the expansion of the Company's Charlotte manufacturing
facility, and new business and manufacturing systems.
Net cash used in financing activities was $8.5 million in the first half of
fiscal 1997 compared with $21.9 million provided by financing activities in the
comparable prior year period. The excess of cash provided by operating
activities over cash used in investing activities and proceeds from fiscal 1997
dispositions noted above were used to reduce debt by $7.4 million in the first
six months of fiscal 1997.
Total debt at December 31, 1996, was $103.2 million, down from $110.1 million at
June 30, 1996. In addition, the Company's debt-to-capital ratio continued to
improve, down from 50.6% at June 30, 1996 to 48.3% at December 31, 1996, as a
result of these lower debt levels.
In October 1996, the Company entered into an agreement for a revolving
credit/term loan facility of $160 million with its banks, replacing the former
$115 million revolving credit/term loan facility. The $160 million agreement is
composed of a $120 million revolving credit facility expiring in October 2001
and a $40 million, seven-year term loan expiring in October 2003. The interest
rate options and commitment fees are essentially the same as under the former
$115 million facility. Also in October 1996, the Company entered into an
interest rate swap agreement with a notional amount of $40 million. This swap,
which expires in September 2001, effectively converts $40 million of
variable-rate debt to fixed-rate debt. Under the terms of this agreement, the
Company makes payments at a fixed rate of 6.7% and receives payments based on
30-day LIBOR.
Also in October 1996, using the additional capacity available under the new $160
million facility referred to above, the Company repaid $40 million of 6.74%
senior unsecured notes which were borrowed in fiscal 1994 to fund the Company's
fiscal 1994 acquisition of the net assets of the Waverly Press division of
Waverly, Inc. There was no prepayment penalty associated with this debt
retirement.
11
<PAGE>
PART II. Other Information
Item 4. Submission of Matters to a Vote of Security Holders
(a) At the 1996 Annual Meeting of Shareholders of the Company ("Annual
Meeting") held on November 13, 1996, 6,242,938 shares of the
Company's outstanding common stock were present in person or by
proxy and entitled to vote.
(b) At the Annual Meeting, the following matters were voted upon and
received the vote set forth below:
(1) Election of Directors. Each nominee for director was
elected, having received the following vote:
Broker
Nominee For Withheld Non-vote
-------- -------- -------- --------
Jeanne M. Liedtka 5,962,628 280,310 ---
John D. Munford, II 6,228,792 14,146 ---
Wallace Stettinius 6,227,242 15,696 ---
(2) Approval of Proposed Amendment to the 1990 Long-Term
Incentive Plan. The amendment was approved, having received
the following vote:
For: 5,339,813
Against: 720,698
Abstain: 178,628
Broker Non-vote: 3,799
(3) Ratification of designation of Arthur Andersen LLP as
independent public accountants for current year. Designation
of the auditors was ratified, having received the following
vote:
For: 6,093,861
Against: 142,926
Abstain: 6,151
Broker Non-vote: ---
Item 5. Other Information
On February 12, 1997, the Company announced the election of Jerry I.
Reitman and G. Waddy Garrett to the Board of Directors of the Company
as of such date.
12
<PAGE>
Item 6. Exhibits and Reports on Form 8-K
a. Exhibits:
Exhibit Description
------- -----------
Exhibit 10 Cadmus 1990 Long-Term Incentive Stock Plan, as amended
effective August 14, 1996-incorporated by reference
from the Company's Proxy Statement on Schedule 14A
dated November 13, 1996.
Exhibit 27 Financial Data Schedule
Exhibit 99 Press Release announcing new additions to the Company's
Board of Directors.
b. Reports on Form 8-K:
On October 3, 1996, the Company filed a Form 8-K, which included the press
release regarding the Company's sale of all the outstanding capital stock of
Tuff Stuff Publications, Inc. which constituted its Consumer Publishing
Division.
On October 24, 1996, the Company filed a Form 8-K, which included the press
release regarding fiscal 1997 first quarter financial results, as well as a copy
of the prepared remarks made on a conference call to analysts on the same date.
On November 25, 1996, the Company filed a Form 8-K, which included the speech
given by C. Stephenson Gillispie, Jr., President, Chairman and Chief Executive
Officer of the Company, at the Company's 1996 Annual Meeting of Shareholders.
13
<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.
CADMUS COMMUNICATIONS CORPORATION
Date: February 13, 1997
/s/ C. Stephenson Gillespie, Jr.
------------------------------------------------
C. Stephenson Gillispie, Jr.
Chairman, President, and Chief Executive Officer
Date: February 13, 1997
/s/ Bruce V. Thomas
------------------------------------------
Bruce V. Thomas
Vice President and Chief Financial Officer
14
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
This schedule contains summary financial information extracted from Cadmus
Communications Corporation's Consolidated Balance Sheets and Consolidated
Statements of Income and is qualified in its entirety by reference to such
financial statements.
</LEGEND>
<S> <C>
<PERIOD-TYPE> 4-MOS
<FISCAL-YEAR-END> DEC-31-1996
<PERIOD-END> DEC-31-1996
<CASH> 1,565
<SECURITIES> 0
<RECEIVABLES> 73,024
<ALLOWANCES> 2,402
<INVENTORY> 22,198
<CURRENT-ASSETS> 101,686
<PP&E> 210,515
<DEPRECIATION> 92,449
<TOTAL-ASSETS> 274,478
<CURRENT-LIABILITIES> 44,770
<BONDS> 102,647
<COMMON> 3,954
0
0
<OTHER-SE> 106,700
<TOTAL-LIABILITY-AND-EQUITY> 274,478
<SALES> 191,154
<TOTAL-REVENUES> 191,154
<CGS> 148,874
<TOTAL-COSTS> 148,874
<OTHER-EXPENSES> 783
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 4,169
<INCOME-PRETAX> 6,302
<INCOME-TAX> 2,426
<INCOME-CONTINUING> 3,876
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 3,876
<EPS-PRIMARY> .48
<EPS-DILUTED> .48
</TABLE>
EXHIBIT 99
[CADMUS letterhead]
NEWS RELEASE
CONTACT
David E. Bosher
Vice President and Treasurer
(804) 287-5685
CADMUS COMMUNICATIONS CORPORATION
ANNOUNCES NEW DIRECTORS
RICHMOND, VA. February 12, 1997 - Cadmus Communications Corporation (NASDAQ NMS:
CDMS) today announced the additions of Jerry I. Reitman and G. Waddy Garrett to
the Board of Directors of the Company.
Mr. Reitman is currently vice-chairman of International Data Response
Corporation and executive director of the Chicago Direct Marketing Educational
Foundation. He retired from the Leo Burnett Company in 1996 where he was
executive vice-president and executive director of Integrated Communications for
the Chicago-based international advertising agency. Prior to joining Burnett,
Mr. Reitman was chairman of the Reitman Group and was co-founder of SMS Direct,
a unit of Ogilvy and Mather. He also serves as a member of the Board of Trustees
of the Direct Marketing Educational Foundation, as a board member and
vice-chairman of Children's Memorial Foundation of Chicago, and on the Board of
Governors of Children's Miracle Network. Mr. Reitman is a graduate of
Pennsylvania State University with a degree in finance.
Mr. Garrett is chairman and chief executive officer of Alliance Agronomics,
Inc., a Mechanicsville, Virginia-based firm. He serves as a member of the boards
of Ag-Chem Equipment Co., County Bank of Chesterfield, Reeds Jewelers, Inc., and
Smart Route Systems, Inc. Mr. Garrett is a graduate of the United States Naval
Academy, the U.S. Naval Nuclear Power School and the Harvard Business School,
where he earned an MBA.
C. Stephenson Gillispie, Jr., chairman, president and chief executive officer of
Cadmus, noted, "We are extremely pleased and privileged to have these gentlemen
join our board. Jerry Reitman is a leading expert and lecturer on marketing and
will bring a unique set of marketing skills and expertise to our Company. Waddy
Garrett has considerable experience in strategy formulation and in change
management, critical components of our ongoing process to transforming Cadmus
into an integrated communications and marketing company."
Cadmus Communications Corporation is an integrated communications company
offering products and services in three broad areas: periodicals, graphic
communications, and marketing. Headquartered in Richmond, Virginia, Cadmus is
one of the largest graphic communications companies in North America.
