<PAGE> 1
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 MARCH 31, 1997
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 0-5610
------
PAXAR CORPORATION
-----------------
(Exact name of registrant as specified in its charter)
NEW YORK 13-5670050
-------- ----------
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
105 CORPORATE PARK DRIVE, WHITE PLAINS, N.Y. 10604
--------------------------------------------------
(Address of principal executive offices)
914-697-6800
------------
(Registrant's telephone number, including area code)
(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 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
--- ---
APPLICABLE ONLY TO CORPORATE ISSUERS:
Indicate the number of shares outstanding of each of the issuer's classes of
common stock, as of the latest practicable date. (March 31, 1997)
Common Stock, $0.10 par value: 28,360,533 shares
<PAGE> 2
PART I. FINANCIAL INFORMATION
The financial statements included herein have been prepared by PAXAR Corporation
(the "Company" or the "Registrant") without audit pursuant to the rules and
regulations of the Securities and Exchange Commission. While certain information
and footnote disclosures normally included in the financial statements prepared
in accordance with generally accepted accounting principles have been condensed
or omitted pursuant to such rules and regulations, the Company believes that the
disclosures made herein are adequate to make the information presented not
misleading. It is recommended that these condensed financial statements be read
in conjunction with the financial statements and notes thereto included in the
Company's Annual Report on Form 10-K for the year ended December 31, 1996.
In the opinion of the Company, all adjustments, consisting only of normal
recurring accruals and adjustments, necessary to present fairly the financial
information contained herein, have been included.
2
<PAGE> 3
ITEM 1: FINANCIAL STATEMENTS
PAXAR CORPORATION AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF INCOME
(UNAUDITED)
<TABLE>
<CAPTION>
THREE MONTHS ENDED MARCH 31
1997 1996
---- ----
(in thousands, except per share amounts)
<S> <C> <C>
Sales $ 80,455 $ 52,750
Cost of Sales 48,272 33,256
-------- --------
Gross profit 32,183 19,494
Selling, general and administrative expenses 22,356 13,503
-------- --------
Operating income 9,827 5,991
Equity in net income of affiliate -- 552
Interest expense, net (1,713) (512)
-------- --------
Income before taxes 8,114 6,031
Taxes on income 2,412 1,688
-------- --------
Net income $ 5,702 $ 4,343
======== ========
Weighted average shares outstanding 28,948 28,220
======== ========
Earnings per share $ 0.20 $ 0.15
======== ========
</TABLE>
See Notes to Consolidated Financial Statements
3
<PAGE> 4
PAXAR CORPORATION AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
<TABLE>
<CAPTION>
MAR. 31, 1997 DEC. 31, 1996
------------- -------------
(UNAUDITED)
(IN THOUSANDS, EXCEPT SHARE AMOUNTS)
<S> <C> <C>
ASSETS
Current assets:
Cash $ 18,148 $ 4,816
Short-term investments 4,143 1,857
Receivables less allowance for doubtful accounts of $4,371
in 1997 and $751 in 1996 79,748 36,870
Inventories 74,739 30,681
Other current assets 10,176 3,478
Deferred income taxes 4,840 574
--------- ---------
Total current assets 191,794 78,276
--------- ---------
Property, plant and equipment, at cost 143,255 98,517
Accumulated depreciation (40,464) (38,860)
--------- ---------
Net property, plant and equipment 102,791 59,657
--------- ---------
Long-term investments 4,919 4,911
Investment in affiliate -- 20,129
Goodwill 168,876 18,412
Other assets 7,808 774
--------- ---------
$ 476,188 $ 182,159
========= =========
LIABILITIES AND SHAREHOLDERS' EQUITY
Current liabilities:
Due to banks $ 1,715 $ 1,699
Notes payable 5,908 --
Current maturities of long-term debt 572 612
Accounts payable and accrued liabilities 67,776 23,616
Accrued taxes on income 6,708 3,015
--------- ---------
Total current liabilities 82,679 28,942
--------- ---------
Long-term debt 221,808 19,937
Deferred income taxes 11,266 11,858
Other liabilities 6,606 1,502
Shareholders' equity:
Preferred stock, $0.01 par value, 5,000,000 shares
authorized, none issued and outstanding -- --
Common Stock, $0.10 par value, 100,000,000
shares authorized, 28,360,533 and 28,029,211 shares
issued and outstanding in 1997 and 1996 respectively 2,836 2,803
Paid in capital 69,516 38,312
Retained earnings 83,941 78,239
Foreign currency translation adjustments (2,464) 566
--------- ---------
Total shareholder's equity 153,829 119,920
--------- ---------
$ 476,188 $ 182,159
========= =========
</TABLE>
See Notes to Consolidated Financial Statements
4
<PAGE> 5
PAXAR CORPORATION AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF SHAREHOLDERS' EQUITY
FOR THE THREE MONTHS ENDED MARCH 31, 1997 AND 1996
(IN THOUSANDS, EXCEPT SHARE AMOUNTS)
(UNAUDITED)
<TABLE>
<CAPTION>
FOREIGN CURRENCY
COMMON STOCK PAID-IN RETAINED TRANSLATION
SHARES AMOUNT CAPITAL EARNINGS ADJUSTMENTS
------ ------ ------- -------- -----------
<S> <C> <C> <C> <C> <C>
Balance, December 31, 1995 22,207,820 $2,221 $36,723 $57,002 $ (750)
Net income -- -- -- 4,343 --
Exercise of stock options 6,122 1 50 -- --
Employee stock purchase
plan 11,380 1 158 -- --
Translation adjustments -- -- -- -- (54)
---------- ------ ------- ------- -------
Balance, March 31, 1996 22,225,322 $2,223 $36,931 $61,345 $ (804)
========== ====== ======= ======= =======
Balance, December 31, 1996 28,029,211 $2,803 $38,312 $78,239 $ 566
Net Income -- -- -- 5,702 --
Exercise of stock options 66,224 7 465 -- --
Employee stock purchase
plan 14,640 1 266 -- --
Stock issued-acquisitions 250,458 25 4,734 -- --
Warrants and options
issued-acquisitions -- -- 25,739 -- --
Translation adjustments -- -- -- -- (3,030)
---------- ------ ------- ------- -------
Balance, March 31, 1997 28,360,533 $2,836 $69,516 $83,941 $(2,464)
========== ====== ======= ======= =======
</TABLE>
See Notes to Consolidated Financial Statements
5
<PAGE> 6
PAXAR CORPORATION AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS
(UNAUDITED)
<TABLE>
<CAPTION>
THREE MONTHS ENDED MARCH 31,
1997 1996
---- ----
(IN THOUSANDS)
<S> <C> <C>
OPERATING ACTIVITIES:
Net Income $ 5,702 $ 4,343
--------- -------
Adjustments to reconcile net income to net cash provided by
operating activities:
Depreciation and amortization 3,392 2,106
Deferred income taxes (187) 56
Equity in net income of affiliate -- (552)
Changes in assets and liabilities, net of businesses acquired:
Receivables (3,874) (5,116)
Inventories (2,355) 415
Other current assets (2,831) (1,144)
Accounts payable and accrued liabilities 2,549 2,101
Taxes on income 1,468 1,330
Other liabilities (174) 57
--------- -------
(2,012) (747)
--------- -------
Net cash provided by operating activities 3,690 3,596
--------- -------
INVESTING ACTIVITIES:
Purchases of property, plant and equipment (2,370) (4,072)
Acquisitions, net of cash acquired (82,620) (4,601)
(Increase) decrease in short-term investment (2,286) 1,900
Other 586 71
--------- -------
Net cash used in investing activities (86,690) (6,702)
--------- -------
FINANCING ACTIVITIES:
Decrease in short-term debt (24) (426)
Additions to long-term debt 113,700 8,254
Reductions to long-term debt (17,685) (5,154)
Exercise of stock options / stock purchase plan 738 210
--------- -------
Net cash provided by financing activities 96,729 2,884
--------- -------
OTHER ACTIVITIES:
Effect of exchange rate changes on cash (397) 24
--------- -------
Increase in cash 13,332 (198)
Cash, at beginning of year 4,816 3,466
--------- -------
Cash, at end of period $ 18,148 $ 3,268
========= =======
</TABLE>
See Notes to Consolidated Financial Statements
6
<PAGE> 7
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
DOLLARS IN THOUSANDS, EXCEPT SHARE DATA.
NOTE 1: GENERAL
The accounting policies followed during interim periods are in conformity with
generally accepted accounting principles, and are consistent with those applied
for annual periods as described in the Company's Annual Report on Form 10-K for
the year ended December 31, 1996. Other than Balance Sheet amounts as of
December 31, 1995 and 1996, all amounts contained herein are unaudited.
Reclassifications:
Certain reclassifications have been made to prior year amounts to conform to the
current year presentation.
NOTE 2: BUSINESS ACQUISITION
On June 29, 1995, the Company acquired a 49% interest in Monarch Holdings, Inc.
("Holdings"), which had been accounted for using the equity method. On March 3,
1997, the Company acquired the remaining 51% of Holdings for a total purchase
price of approximately $130 million. The Company acquired the 49% equity
interest of Odyssey Partners, L.P. in Holdings for $94.1 million in cash, a
promissory note in the amount of $5.9 million at an annual interest rate of
4.88% payable on January 2, 1998, and five year warrants to purchase (a)
1,000,000 shares of the Company's common stock, par value $0.10, at an exercise
price of $17.50 per share and (b) 200,000 shares of the Company's common stock
at an exercise price of $21.875 per share. The warrants have been recorded at a
fair value of approximately $9.7 million at the date of acquisition. Immediately
following the closing of the acquisition, the Company caused Holdings to merge
with and into the Company. Upon completion of such merger, the Chairman of
Holdings and the President and Chief Executive Officer of Holdings each received
125,229 shares of the Company's common stock valued at $19.00 per share, in
exchange for the shares of Holdings common stock owned by each of them. In the
merger, employees of Holdings received incentive stock options to purchase an
aggregate of 995,575 shares of the Company's Common Stock pursuant to the
Company's 1990 Employee Stock Option Plan in exchange for outstanding options to
purchase Holdings common stock. The options have been recorded at a fair value
of approximately $16 million at the date of acquisition.
The acquisition is being accounted for as a purchase with assets acquired and
liabilities assumed recorded at their estimated fair values at the date of
acquisition. The excess of the purchase price and transaction costs over the
fair value of net assets acquired is recorded as goodwill. The purchase price
allocation related to certain accruals and reserves is not complete and
adjustments to goodwill may be necessary.
The operating results of Monarch Marking Systems, Inc., which became a
wholly-owned subsidiary of the Company as a result of the merger of Holdings
into the Company, are included in the accompanying consolidated statements of
income beginning March 3, 1997. The following unaudited pro forma results of
operations assume the acquisition occurred as of January 1, 1996. These pro
forma results do not purport to be indicative of the results of operations which
may result in the future.
<TABLE>
<CAPTION>
Unaudited
Three Months Ended
March 31, 1997 March 31, 1996
-------------- --------------
<S> <C> <C>
Sales $120,134 $115,045
-------- --------
Net income $ 4,254 $ 3,179
-------- --------
Earnings per share $ 0.15 $ 0.11
-------- --------
</TABLE>
7
<PAGE> 8
NOTE 3: INVENTORIES
The components of inventories are set forth below:
<TABLE>
<CAPTION>
March 31, 1997 December 31, 1996
-------------- -----------------
<S> <C> <C>
Raw materials $45,990 $17,359
Work-in-Process 4,085 3,589
Finished goods 24,664 9,733
------- -------
$74,739 $30,681
======= =======
</TABLE>
NOTE 4: LONG-TERM DEBT
An analysis of long-term debt is set forth below:
<TABLE>
<CAPTION>
March 31, 1997 December 31, 1996
-------------- -----------------
<S> <C> <C>
Unsecured revolving bank facility $106,500 $10,233
Unsecured Senior Notes (including $5,856 debt premium) 105,856 --
Economic Development Revenue Bond 8,000 8,000
Secured and unsecured loans on foreign
property, plant and machinery 1,689 1,950
Other 335 366
-------- -------
222,380 20,549
Less current maturities 572 612
-------- -------
$221,808 $19,937
======== =======
</TABLE>
NOTE 5: ACCOUNTS PAYABLE AND ACCRUED LIABILITIES
A summary of accounts payable and accrued liabilities is set forth below:
<TABLE>
<CAPTION>
March 31, 1997 December 31, 1996
-------------- -----------------
<S> <C> <C>
Accounts payable $24,365 $11,977
Accrued payroll costs 9,394 4,403
Other accrued liabilities 34,017 7,236
------- -------
$67,776 $23,616
======= =======
</TABLE>
NOTE 6: SUPPLEMENTAL CASH FLOW INFORMATION
Cash paid for interest and income taxes is set forth below:
<TABLE>
<CAPTION>
Three Months Ended
March 31, 1997 March 31, 1996
-------------- --------------
<S> <C> <C>
Interest $ 328 $471
Income Taxes $1,403 $263
</TABLE>
Cash paid for business acquisition and the fair value of assets acquired and
liabilities assumed is set forth below:
<TABLE>
<CAPTION>
March 31, 1997 March 31, 1996
-------------- --------------
<S> <C> <C>
Estimated fair value of assets acquired,
including goodwill $ 240,460 $ 5,795
Liabilities assumed (157,840) (1,194)
--------- -------
Cash paid $ 82,620 $ 4,601
========= =======
</TABLE>
8
<PAGE> 9
NOTE 7: NEW ACCOUNTING PRONOUNCEMENT
Statement of Financial Accounting Standards No. 128 ("SFAS No. 128" or the
"Statement"), Earnings Per Share ("EPS"), which establishes standards for
computing and presenting EPS, is effective for both interim and annual periods
ending after December 15, 1997. The statement does not permit early application
of its provisions. The statement replaces the presentation of primary EPS with a
presentation of basic EPS, as defined. It also requires dual presentation of
basic and diluted EPS on the face of the statement of income for entities with a
complex capital structure. Had EPS been determined in accordance with SFAS No.
128, the Company's basic EPS and diluted EPS for the three month periods ended
March 31, 1997 and 1996 would have been the following pro forma amounts:
<TABLE>
<CAPTION>
March 31, 1997 March 31, 1996
-------------- --------------
<S> <C> <C>
Pro Forma Basic EPS $0.20 $0.16
Pro Forma Diluted EPS $0.20 $0.15
</TABLE>
NOTE 8: SUBSEQUENT EVENT
On April 11, 1997, Monarch Marking Systems, Inc. ("Monarch") a wholly-owned
subsidiary of the Company, completed the purchase of $100 million of principal
amount of Monarch's 12-1/2% Senior Notes due July 1, 2003 (the "Notes"), which
accounted for all of the issued and outstanding Notes. On April 11, 1997, the
payment date, Monarch paid $120.2 million, consisting of $100 million of
principal, $3.5 million of accrued interest, a $13.7 million premium, and a
consent payment of $3.0 million. Upon payment all of the outstanding Notes were
canceled and the indenture under which they were issued was terminated. The
source of the $120.2 million payment was provided under the $280 million credit
facility with Fleet Bank, N.A. and Wachovia Bank of Georgia, N.A., as lead
lenders.
9
<PAGE> 10
ITEM 2: MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
OF OPERATIONS
OPERATING RESULTS:
The following table shows each element of the income statement as a percent of
sales for the periods indicated:
<TABLE>
<CAPTION>
Three Months Ended
March 31, 1997 March 31, 1996
-------------- --------------
<S> <C> <C>
Sales 100.0% 100.0%
Cost of Sales 60.0 63.0
----- -----
Gross Profit 40.0 37.0
Selling, general and administrative expenses 27.8 25.6
----- -----
Operating income 12.2 11.4
Equity in net income of affiliate -- 1.0
Interest expense, net (2.1) (1.0)
----- -----
Income before taxes 10.1 11.4
Taxes on income 3.0 3.2
----- -----
Net income 7.1% 8.2%
===== =====
</TABLE>
FIRST QUARTER 1997 COMPARED TO 1996
Sales were $80.5 for the three months ended March 31, 1997 compared to $52.7
million for the three months ended March 31, 1996, an increase of 52%.
Foreign-based and export sales increased from $20.9 million for the three months
ended March 31, 1996 to $24.5 million for the comparable period in 1997. Sales
from the Company's apparel identification business grew 10% in the three months
ended March 31, 1997 compared with the three months ended March 31, 1996. On
March 3, 1997, the Company acquired the remaining 51% of Monarch Holdings, Inc.
("Holdings") that it did not own (see Note 2 of Notes to Consolidated Financial
Statements). During the month of March, 1997 Monarch Marking Systems, Inc.
("Monarch") which became a wholly-owned subsidiary of the Company upon the
merger of Holdings into the Company, contributed $22.4 million in sales.
The gross profit was $32.2 million in the three months ended March 31, 1997
compared to $19.5 million in the comparable period of 1996, an increase of 65%.
The gross profit margin was 40% for the current period compared to 37% for the
three months ended March 31, 1996.
Selling, general and administrative ("SG&A") expenses were $22.4 million for the
three months ended March 31, 1997 compared to $13.5 million for the comparable
period of 1996, an increase of 65%. As a percentage of sales, SG&A expenses were
27.8% for the three months ended March 31, 1997 compared to 25.6% for the
comparable period in 1996. The increase in SG&A was primarily due to the
acquisition of Monarch.
Operating income was $9.8 million or 12.2% of sales for the three months ended
March 31, 1997 compared to $6.0 million or 11.4% of sales for the three months
ended March 31, 1996.
Interest expense, net was $1.7 million for the three months ended March 31, 1997
compared to $0.5 million for the three months ended March 31, 1996. The increase
was primarily due to the acquisition of Monarch.
Income before taxes was $8.1 million (10.1% of sales) for the three months ended
March 31, 1997 as compared to $6.0 million (11.4% of sales) for the three months
ended March 31, 1996. The increase in pretax profit for the three months ended
March 31, 1997 compared to March 31, 1996 is summarized as follows:
<TABLE>
<CAPTION>
(in millions)
<S> <C>
Sales increase, net of increased SG&A expenses $2.2
Improvement in gross margins 1.6
Equity in net income of affiliate (0.5)
Increased interest expense, net (1.2)
----
Net increase $2.1
====
</TABLE>
10
<PAGE> 11
The effective income tax rate was 30% for the three months ended March 31, 1997
compared to 28% for the three months ended March 31, 1996. The overall effective
tax rate is impacted by many factors including different statutory rates on
foreign income. The lower rate in 1996 was attributable to the inclusion of
equity in net income of affiliate. The tax rate is below the U.S. statutory
federal income tax rate of 35% due to lower rates on income derived from foreign
sources, particularly from Hong Kong and in Italy where the companies acquired
in 1994 receive special tax abatement incentives which expire through 1999.
Net income for the three months ended March 31, 1997 increased to $5.7 million
(7.1% of sales) from $4.3 million (8.2% of sales) in the 1996 period. Net income
per share was $0.20 for the three months ended March 31, 1997 from $0.15 for the
three months ended March 31, 1996.
LIQUIDITY AND CAPITAL RESOURCES
The table below presents the summary of cash flow for the periods indicated:
<TABLE>
<CAPTION>
(in millions)
Three Months Ended
March 31, 1997 March 31, 1996
-------------- --------------
<S> <C> <C>
Net cash provided by operating activities $ 3.7 $ 3.6
Net cash used in investing activities (86.7) (6.7)
Net cash provided by financing activities 96.7 2.9
----- -----
Total change in cash(a) $ 13.7 $(0.2)
====== =====
</TABLE>
(a) Before exchange rate effects
OPERATING ACTIVITIES
Cash provided by operating activities continues to be the Company's primary
source of funds to finance operating needs and capital expenditures. During the
first quarter of 1997, cash provided by operating activities was $3.7 million.
Cash provided by operating activities in the first quarter of 1996 was $3.6
million. Depreciation and amortization was $3.4 million for the three months
ended March 31, 1997 compared to $2.1 million for the three months ended March
31, 1996.
INVESTING ACTIVITIES
During the first quarter of 1997 capital expenditures were $2.4 million compared
to $4.1 million during the first quarter of 1996. Other than projects for
employee safety and environmental improvement, all new capital projects are
carefully analyzed and are required to make a positive contribution on a net
present value basis, generating an attractive internal rate of return on
invested capital. The Company currently anticipates capital expenditures of
$30.2 million for the year ended December 31, 1997.
On March 3, 1997, the Company acquired the 49% equity interest of Odyssey
Partners, L.P. in Holdings for (i) $94,083,750 in cash, (ii) a promissory note
in the amount of $5,907,559 at an annual interest rate of 4.88% payable on
January 2, 1998 secured by a letter of credit issued by Fleet Bank, N.A. and
(iii) five year warrants (the "Warrants") to purchase (A) 1,000,000 shares of
the Company's common stock, par value $0.10 (the "Common Stock"), at an exercise
price of $17.50 per share and (B) 200,000 shares of the Company's Common Stock
at an exercise price of $21.875 per share. The Company financed the cash portion
of the purchase price with the proceeds of a term loan under a $280 million
credit facility with Fleet Bank, N.A. and Wachovia Bank of Georgia, N.A., as
lead lenders. Immediately following the closing of the acquisition, the Company
caused Holdings to be merged with and into the Company, and as a result of the
merger, Monarch became a wholly-owned subsidiary of the Company.
11
<PAGE> 12
On March 13, 1997, Monarch commenced a cash tender offer for its $100,000,000
principal amount 12.5% Senior Notes due 2003 (the "Monarch Notes"). The offer
expired on April 10, 1997. The redemption price was $1,137.50 for each $1,000 of
principal of the Monarch Notes, and the Company paid a consent payment of $30
per $1,000 of principal of the Monarch Notes to each holder that consented to
certain amendments to the Indenture under which the Monarch Notes were issued.
On April 11, 1997, the payment date, Monarch paid $120.2 million to the holders
of all of the outstanding Monarch Notes (see Note 8 of Notes to Consolidated
Financial Statements). Upon payment, all of the outstanding Monarch Notes were
canceled and the indenture under which they were issued was terminated. The
source of the $120.2 million payment was provided under the $280 million credit
facility with Fleet Bank, N.A. and Wachovia Bank of Georgia, N.A., as lead
lenders.
The Company intends to continue its growth, in part by acquisitions of other
complementary or related businesses, and believes that further acquisitions
outside the United States would be of important strategic value.
FINANCING ACTIVITIES
The table below shows the components of total capital at:
<TABLE>
<CAPTION>
(in millions)
March 31, 1997 December 31, 1996
-------------- -----------------
<S> <C> <C>
Long-term debt $221.8 $ 19.9
Shareholder's equity 153.8 119.9
------ ------
Total capital $375.6 $139.8
====== ======
Long-term debt as a percent of total capital 59.1% 14.3%
====== ======
</TABLE>
Long-term debt increased to $221.8 million at March 31, 1997 from $19.9 million
at December 31, 1996. At March 31, 1997, long-term debt as a percent of total
capital was 59.1% compared to 14.3% at December 31, 1996.
On March 3, 1997, the Company entered into a six-year, $280 million credit
facility with Fleet Bank, N.A. and Wachovia Bank of Georgia, N.A., as lead
lenders, consisting of a $140 million term loan facility and a $140 million
revolving credit facility. Borrowings under the term loan and revolving credit
facilities bear interest at rates referenced to the LIBOR rate (with applicable
margins varying in accordance with the Company's attainment of specified
financial tests) or the Prime Rate (as defined) and are guaranteed by the
domestic subsidiaries of the Company and a pledge of the stock of Monarch. As of
March 31, 1997, borrowings under the term loan and revolving credit facilities
were $105.0 million and $1.5 million, respectively, and the amount available was
$35.0 million and $138.5 million, respectively.
Except for historical information contained herein, certain statements above are
forward-looking statements that are made pursuant to the safe harbor provisions
of the Private Securities Litigation Reform Act of 1995. Forward-looking
statements involve known and unknown risks and uncertainties that may cause the
Company's actual results in future periods to differ materially from forecasted
results. Factors that could cause actual results to differ materially include,
but are not limited to, the following: economic and other business conditions
that may affect demand in the U.S. and European markets; the mix of products
sold and the profit margins thereon; order cancellations or reduced bookings by
customers or distributors; and discounting necessitated by price competition.
Those and other risks are described in the Company's filings with the Securities
and Exchange Commission (the "SEC") over the last 12 months, including the
Company's Annual Report on Form 10-K for the year ended December 31, 1996,
copies of which are available from the SEC or may be obtained upon request from
the Company.
12
<PAGE> 13
PART II. OTHER INFORMATION
ITEM 6: EXHIBITS AND REPORTS ON FORM 8-K
a) Exhibit Index.
Exhibit 27.1 Financial Data Schedule
b) Reports on Form 8-K
On January 3, 1997, the Registrant filed a Report on Form 8-K dated
December 20, 1996, reporting that it had entered into an agreement to acquire
the 49% equity interest of Odyssey Partners, L.P. in Monarch Holdings, Inc.
On March 18, 1997, the Registrant filed a Report on Form 8-K dated
March 3, 1997 reporting that it had completed the acquisition of the 495
shares of common stock of Monarch Holdings, Inc. from Odyssey Partners, L.P.
and that Monarch Holdings, Inc. had merged with and into the Registrant.
13
<PAGE> 14
PAXAR CORPORATION AND SUBSIDIARIES
SIGNATURES
Pursuant to the requirements of the Securities and Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.
PAXAR Corporation
-----------------
Registrant
by /s/ Joseph Fetzner
---------------------
Signature
Joseph Fetzner
--------------
Full Name of Signing Officer
Vice President Controller
-------------------------
Title of Signing Officer
(Principal Financial and Accounting Officer)
May 14, 1997
------------
Date
14
<TABLE> <S> <C>
<ARTICLE> 5
<S> <C>
<PERIOD-TYPE> 3-MOS
<FISCAL-YEAR-END> DEC-31-1997
<PERIOD-END> MAR-31-1997
<CASH> 18,148
<SECURITIES> 0
<RECEIVABLES> 79,748
<ALLOWANCES> 0
<INVENTORY> 74,739
<CURRENT-ASSETS> 191,794
<PP&E> 143,255
<DEPRECIATION> 40,464
<TOTAL-ASSETS> 476,188
<CURRENT-LIABILITIES> 82,679
<BONDS> 0
0
0
<COMMON> 2,836
<OTHER-SE> 150,993
<TOTAL-LIABILITY-AND-EQUITY> 476,188
<SALES> 80,455
<TOTAL-REVENUES> 80,455
<CGS> 48,272
<TOTAL-COSTS> 48,272
<OTHER-EXPENSES> 0
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 1,713
<INCOME-PRETAX> 8,114
<INCOME-TAX> 2,412
<INCOME-CONTINUING> 5,702
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 5,702
<EPS-PRIMARY> .20
<EPS-DILUTED> 0
</TABLE>
