<PAGE>
FORM 10-K
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, DC 20549
[ X ] Annual Report pursuant to Section 13 or 15(d) of the Securities
Exchange Act of 1934 (fee required)
FOR FISCAL YEAR ENDED SEPTEMBER 30, 1995
OR
[ ] Transaction Report pursuant to section 13 or 15(d) of the Securities
Exchange Act of 1934 (no fee required)
COMMISSION FILE NUMBER 0 - 14358
PARIS BUSINESS FORMS, INC.
(Exact name of Registrant as specified in its Charter)
PENNSYLVANIA 23-1645493
(State or other Jurisdiction of (I.R.S. Employer
incorporation of organization) Identification No.)
122 KISSEL ROAD, BURLINGTON, N.J. 08016
(Address of principal executive office) (zip code)
Telephone: (609) 387-7300
(Registrant's telephone number, including area code)
Securities registered pursuant to Section 12(b) of the act: None
Securities registered pursuant to section 12(g) of the act:
TITLE
Capital Stock, $.004/par value per share
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 twelve 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 aggregate market value of the voting stock held by nonaffiliates of
the registrant as of November 15, 1995 was $5,157,810.
Number of shares of outstanding common stock as of November 15, 1995,
3,715,317 shares.
Definitive Proxy Statement for the January 26, 1996 annual meeting of
the Stockholders has been filed within 120 days after the end of the fiscal year
covered by this annual report.
<PAGE>
ITEM 1 - BUSINESS
GENERAL
- - -------
Paris Business Forms, Inc. ("Paris"), incorporated in 1964 under the
laws of the Commonwealth of Pennsylvania, is a holding Company with four wholly
owned subsidiaries, viz., two active operating companies in New Jersey and
Texas, one inactive Florida corporation, and a Delaware corporation which owns
the Company's trademarks. Paris Business Products, Inc., a New Jersey
corporation and Paris Business Forms, Inc., a Texas corporation, are the two
operating companies, with plants in New Jersey and Texas, respectively. PBF
Corporation is the Delaware corporation. The Texas and Florida corporations are
both wholly owned subsidiaries of the New Jersey corporation. Paris also has a
30% interest in a corporation, Signature Corporation, formed in 1992, to market
office products through the supermarket and drug chain channels. Xerox and two
individuals own the remainder of the interest in Signature Corporation
The Company converts mill paper rolls to business forms at its two
manufacturing and distribution plants in New Jersey and Texas and distributes
office products, computer products and software through a number of market
channels including forms dealers, paper merchants, stationers, office product
and computer superstores, consumer electronics retailers, buying groups,
catalogs, supermarkets, and drugstore chains. Products include stock and custom
continuous forms; mill cut, value added, and custom cut sheets; paper handling
products for small offices and home offices, computer based printers and
scanners, office products and on-demand laser software. Geographically the
Company markets its products throughout the United States and Canada through
Company sales representatives, independent representatives, brokers, dealers,
and distributors.
Traditionally, the principal focus of the business was the manufacture
of continuous forms designed to run on dot matrix and high speed impact
printers. The Company serves the stock "green bar" continuous forms market, as
well as the custom forms market for commercial businesses providing business
forms to customer specifications. In recent years, with printer technology
changing to laser and inkjet imprinting and the evolution of software to provide
design capability to the user, the demand for continuous forms has begun to
decline and is expected to continue at a negative 5% to 10% annual declining
rate into the future. Accordingly, the Company is changing its focus to the
development and sale of value added and custom cut sheet products used on laser
and inkjet printers. Perfed, punched, lined cut sheets, high quality printing
cuts, collated sets, colored cuts and novelty cut products have been recently
introduced. Additional diversification strategies in hardware and software
products have been successfully embarked on within the past year.
The Company has completed the installation of both a local area and wide
area computer network this past year resulting in significant increases in
productivity internally, with enhanced communication and information exchange in
a client/server environment utilizing an IBM AS400 minicomputer, Compaq
microcomputer server, and over sixty user devices. The Company provides EDI
capability to its customers and suppliers as required by many companies today to
handle orders, shipment confirmations and billing.
COMPETITION
- - -----------
The business forms market is divided into two major markets. One segment
consists of "forms" manufacturers who distribute their own forms directly to end
users. The other segment consists of "manufacturers", like the Company, who
distribute their forms through resellers and retailers. The Company competes
principally with those manufacturers which distribute their products through
forms resellers and retailers.
In the reseller market, the Company competes principally with four
companies in stock computer paper. Although the Company does not compete
directly with the approximate dozen direct sellers, weak industry conditions
have forced the direct sellers to market to the smaller companies which
traditionally
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bought through the indirect market. The Company's selling prices have suffered
accordingly, but lost market share has been minimal. With respect to custom
forms, all of the direct and approximately four hundred regional companies
participate in that market.
SUPPLIERS
- - ---------
The Company purchases registered bond paper, (consisting of a wide
variety of weights, widths, colors, sizes and qualities), and carbonless paper
from the major United States paper mills. The Company believes that it has good
relationships with all of its suppliers.
During the past fiscal year, the major paper mills have shifted some
capacity, or in some cases eliminated capacity, creating a shortage in raw paper
supply for the Company and the paper industry at large. As a result, paper costs
have accelerated at a rapid pace, nearly doubling during the period of July to
December, 1994, and increasing another 25% from January, 1995 to September,
1995. The tight supply conditions have ceased since September, 1995, with
reduced demand from manufacturers and distributors throughout the supply channel
due to high inventory levels. The Company believes, however, that demand-supply
equilibrium will return in early 1996, and that supply allocations could
continue for an indefinite period thereafter.
The Company has partnered or formed strategic alliances with a number of
companies to provide raw material, market support, and/or name recognition for
its value added cut sheet product and non-paper products. Xerox and the Company
have formed Signature Corporation to market office products under the Xerox
brand name through the supermarket and drugstore chains. The Company has
entered into a distribution agreement with Seiko Instruments, Inc. to sell a
label printer product through selected markets in the United States. Recently,
Paris contracted with Microtek, Inc., a billion dollar Taiwanese manufacturer,
to private label manufacture a scanner product with optical recognition software
capability, and with another Taiwan Company, Asco Products, Inc. to provide a
variety of products, viz., a private label paper folder for managing mail
distribution and after-market paper feed trays for Hewlett Packer laser
printers. Currently, the Company represents the largest volume customer of
Boise Cascade for certain specialty retail cut sheet products. The Company
believes the strong relationship between Paris and Boise will provide the
Company a solid footing for future cut sheet supply. Finally, Paris is working
with a number of entrepreneurial startup companies with unique products that fit
well within the existing product offerings. Touch-It Corporation produces heat
sensitive envelopes, folders, and note pads that change color when touched.
Compu-Notes, Inc. produces clip boards, binders and address books made from
recycled circuit boards. Paris is working closely with both of these firms to
introduce their products to certain select markets.
SEGMENTS AND MAJOR CUSTOMERS
- - ----------------------------
The Company operates in three segments or lines of business, including
stock continuous forms and cut sheets, continuous forms and cut sheets and
office products. Financial information for each of the Company's segments
including net sales, operating income, total assets, capital expenditures and
sales to major customers, are included in the accompanying financial statements.
No customer accounts for more than 10% of the Company's custom
shipments. However, one customer, Office Depot, Inc., a leading office
superstore, accounts for more than 32% of stock computer paper shipments. The
loss of Office Depot would have a material adverse affect on net sales and gross
profits. We have no reason to believe that this business is in jeopardy since
our relationship is excellent. The Company has been a major supplier to Office
Depot, Inc. for the past seven years. However, there are no contractual
relationships guaranteeing our continued presence as a vendor.
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EMPLOYEES
- - ---------
As of September 30, 1995, the Company employed approximately 178 people
in manufacturing, sales and administrative functions in its corporate offices
and plants in New Jersey and Texas.
DISTRIBUTION
- - ------------
The Company markets the custom and stock forms products through
approximately 2,500 independent dealers in the United States and Canada, as well
as through retail superstores. The independent distributors rely on several
manufacturers, like the Company, to supply these end users. The distributors
range in size from a single individual to a distributorship with several offices
and an extensive sales force. The Company operates, or contracts for storage
space, in several strategically located warehouses along the east coast,
southeast and southwest regions of the country. These locations are used as the
storage and shipping points for its stock forms. Currently, the Company's
primary method of generating sales contacts is through its own sales force,
sales representatives, extensive marketing programs, referral and reputation.
The sales force consists of a National Sales Manager and five
salespersons covering New England, Mid-Atlantic, Southeast, Midwest and
Southwest regions of the eastern United States. A network of independent sales
representatives covering the entire United States has been assembled in fiscal
1995 to sell the new non-paper products through major resellers and retailers.
Several new marketing positions (Director of Sales, Director of Marketing,
Product Manager, and Director of Communications) have been created to support
the new product line. The individuals filling these positions bring over fifty
years of marketing experience to the Company, particularly in the computer
markets that present many opportunities for our new products.
MANUFACTURING
- - -------------
The Company's custom paper products are manufactured in the New Jersey
plant and consists of five rotary presses and one collator. The rotary presses
range in size from 14" to 22" and provide the Company with the ability to
produce a broad spectrum of form sizes. Each piece of machinery requires a
skilled operator; support personnel are required on some equipment. The custom
forms operation runs primarily two shifts per day, however some equipment runs
three shifts. The estimated annual capacity of the custom business is
approximately $12 million in sales at current prices.
The Company's stock form business is manufactured from two locations.
The New Jersey facility has four presses and one collator, and Texas has two
presses and one collator. The majority of the stock forms is produced to be
sold from inventory. Each plant is also capable of producing customized
computer paper or stock forms upon order. The stock operation is three shifts
per day, five days per week, with overtime on an as needed basis. The estimated
annual capacity of the stock business is approximately $55 million in sales at
current prices.
The Company's equipment is very well suited to produce nearly all of the
forms products required by a forms distributor or retailer. The Company
continues to monitor any new product requirements of its forms distributors and
assess what new equipment or equipment modifications are required to produce the
products.
OPERATIONS
- - ----------
The Company owns a 159,000 square foot plant and corporate office in
Burlington, New Jersey and leases a 45,000 square foot plant in Fort Worth,
Texas. Of the approximate 200,000 square feet of space, 5% is devoted to
offices, 50% to warehouse and 45% to paper conversion. There are six stock
presses, five custom presses and three collators operating at the two plants.
There are no union affiliations among the 133 hourly and 45 salaried employees
at the Company's two locations. The Company ships via common
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carrier trucks either directly to its customers from its plant warehouses or
through contract distribution sites or cross dock sites.
Production capacity far exceed expected demand in stock continuous forms
products and the Company plans on reducing capacity by 30-50% within the next
12-18 months as a result of expiring equipment leases and the sale of equipment.
Current demand approximates 8,500 cartons per day with capacity at close to
13,000 carton per day.
In April, 1995 the Florida plant was closed and certain equipment was
sold or scrapped. In addition, a press was purchased at the expiration of the
lease and resold at a profit. The Company expects to maintain its present two
plants in fiscal 1996, but will continue to reduce capacity whenever possible in
its stock continuous forms business.
Custom forms capacity has been converted from roll to sheeting
capability and will continue over the next two years to address the shift in
demand from continuous forms to cut sheet forms. Currently, 40% of capacity is
directed to custom cut sheets. By 1997, 100% of production will be allocated to
cut sheet products.
The Company has adequate domestic and foreign paper supply sources with
paper mills and brokers at the present time. However, no new mill capacity is
schedule until 1997. The mills are reallocating capacity to higher grade papers
that yield higher margins and, as a result, are de-emphasizing forms bond used
in continuous form production. During the first six months of calendar 1995,
the mills commenced on an allocation program yielding lower levels of supply to
all their customers, including Paris. In addition, the supply of foreign paper
was absorbed in Europe. The resulting tight supply conditions yielded much
higher market prices for the Company, equal to or greater than the higher raw
paper increases. The Company was able to utilize its long term relationships
with the mills and brokers and buying expertise to obtain lower but adequate
paper tonnage to satisfy its customer base and certain new accounts at higher
price levels. Despite unit volume decreasing approximately 60%, pricing
increased at a much greater rate resulting in margins of 30% compared to the
average in prior years of 15%. Paris has negotiated short term supply contracts
for the near term with Boise Cascade for both forms bond and cut sheet supply,
and anticipates sufficient tonnage in fiscal 1996. The Company cannot predict
if tight market conditions will repeat and whether margin opportunities will be
present again in the coming fiscal year.
Due to the paper mill allocations that occurred in the first nine months
of fiscal 1995, Paris built inventory levels far in excess of normal levels,
reaching in excess of three months supply by September, 1995. The Company, like
many of its competitors and dealers, purchased paper in anticipation of future
shortage and even higher prices during the summer of 1995. As of late
September, supply conditions have softened and demand has slowed due to the high
inventory levels at all distribution points. As a result, the Company has
negotiated a moratorium on paper tonnage during the October to December 1995
period to reduce its raw paper inventories to quantities not to exceed 45 days
supply. Short term selective dumping of product may be necessary if pricing
gets too competitive. The Company believes that more normal inventory levels
throughout the system will occur by the end of calendar 1995 and that 1996 will
see less volatile supply and pricing than in the previous year.
OTHER MATTERS
- - -------------
The corporate structure of the Company's legal entities was reorganized
in fiscal 1995. Paris Business Forms, Inc. (PBFI), the public Company,
transferred substantially all of the operating assets and liabilities to a newly
formed subsidiary corporation, Paris Business Products, Inc. (PBP). The Texas
operating corporation, Paris Business Forms, Inc. (PBFITX) and a newly formed
Florida corporation, Paris Business Products, Inc. (PBPFL), are subsidiaries of
PBP. PBFI is now a holding Company which owns the Burlington, New Jersey plant
and cash and near cash investments. PBP, PBFITX and PBPFL are operating
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corporations. PBF Corporation, a Delaware corporation, owns the Company
trademarks and remains a subsidiary of PBFI.
The Internal Revenue Service is presently engaged in an audit of the
Company's profit sharing plan, corporate tax returns, and employment tax filings
for the periods 1992, 1993 and 1994. The Company believes that total
assessments, interest, and penalties will not exceed $500,000. The Company has
recorded a $500,000 provision on its books as of September 30, 1995.
The Board of Directors have approved a resolution for a Deferred
Compensation Contract with the Chairman of the Board and CEO to pay $100,000 per
year for four years upon termination of employment in recognition of thirty-one
years of service.
ITEM 2 - PROPERTIES
The Burlington, New Jersey facility serves as the corporate office,
manufacturing plant and distribution center. The building has been expanded to
159,000 square feet. The original facility of 116,000 square feet, including
5,000 square feet of office space, was constructed and occupied during the first
half of 1986. The warehouse addition of 34,000 square feet was completed during
the summer of 1988.
The Fort Worth, Texas facility was sold in June, 1994 and replaced by a
45,000 square foot leased facility.
In March 1992 the Company purchased a 70,000 square foot building in
Jacksonville, Florida to expand stock forms operations. The cost of the
building plus improvements was approximately $1.3 million. In April 1995, the
Florida facility was sold for $1,050,000, and the facility was not replaced.
ITEM 3 - LEGAL PROCEEDINGS
There are no material legal proceedings in process as of the date of
this filing.
ITEM 4 - SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
There were no matters submitted to a vote of security holders during the
year ended September 30, 1995.
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PART II
ITEM 5 - MARKET FOR REGISTRANT'S COMMON STOCK AND RELATED SECURITY HOLDERS
MATTERS
(A) The Company's common stock is traded in the over-the-counter market and is
listed on the National Association Of Stock Dealers Daily Quotation Service
(NASDAQ) National Market System. The Symbol for the Company is PBFI. The
registrar and transfer agent is Mellon Bank (East) N.A. The table below shows
the quarterly price range of Paris Business Forms, Inc. common shares, as shown
by the National Daily Quotation Service.
<TABLE>
<CAPTION>
RANGE OF SALE PRICES
--------------------
1995 FISCAL YEAR 1994 FISCAL YEAR
---------------- ----------------
<S> <C> <C> <C> <C>
HIGH LOW HIGH LOW
First Quarter 3 3/8 2 1/2 2 3/8 1 5/8
Second Quarter 4 1/8 2 2 7/8 1 7/8
Third Quarter 5 1/2 3 3/4 2 7/8 2
Fourth Quarter 9 3/4 5 1/8 3 3/4 2 1/8
</TABLE>
(B) The approximate number of shareholders of record as of November 15, 1995
was 200.
(C) The Company last paid cash dividends of $.045 during fiscal year 1991.
Currently, the Company does not plan to pay dividends in the future.
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ITEM 6 - SELECTED FINANCIAL DATA
FOR THE YEAR ENDED SEPTEMBER 30,
(IN THOUSANDS EXCEPT FOR PER SHARE AMOUNTS)
<TABLE>
<CAPTION>
1995 1994 1993 1992 1991
---- ---- ---- ---- ----
<S> <C> <C> <C> <C> <C>
NET SALES $64,916 $57,892 $59,158 $61,755 $60,026
INCOME (LOSS)
FROM OPERATIONS 5,722 222 (1,489) 1,155 729
NET INCOME (LOSS) 3,451 429 (998) 712 460
EARNINGS PER SHARE .91 .12 (.27) .19 .12
TOTAL ASSETS 41,188 24,747 27,041 27,254 25,505
WORKING CAPITAL 15,255 11,866 10,414 9,312 10,570
LONG TERM DEBT 0 2,061 3,179 1,950 2,154
(excluding current portion)
SHAREHOLDERS' EQUITY $21,108 $17,494 $17,065 $18,144 $17,433
CASH DIVIDENDS PER SHARE NONE NONE NONE NONE $ .045
</TABLE>
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ITEM 7 - MANAGEMENT'S DISCUSSION AND ANALYSIS OF THE FINANCIAL CONDITION AND
RESULTS OF OPERATIONS.
LIQUIDITY AND CAPITAL RESOURCES
Working capital increased $3,389,000 and cash and cash equivalents
increased $3,147,000 in the fiscal year ended September 30, 1995. Sources of
working capital included net income of $3,451,000, plus the addition of non-cash
expenses such as depreciation of $1,135,000, loss on the sale of property,
plant, and equipment of $368,000, allowance for doubtful accounts of $330,000,
and other expenses of $129,000. The sale of the Jacksonville, Florida plant for
$1,050,000, and the sale of machinery and equipment for $175,000 also
contributed to the increase in working capital. Offsetting these increases were
the reclassification of a term loan from long term debt to short term debt of
$1,324,000, purchases of equipment of $921,000, repayment of long term debt of
$737,000, and other decreases of $267,000. Cash used in operations was
$1,283,000.
Inventories at September 30, 1995 were $17,347,847 as compared to
$4,315,119 at September 30, 1994 principally due to the Company's accelerated
paper purchases in the last quarter of its fiscal year to protect its paper
supply in light of industry paper allocation programs imposed by the paper mills
during the past year. In addition, inventories of new products accounted for
$400,000 of the increase in inventory levels and, in comparison, inventories
were abnormally low at the beginning of the fiscal year. The additional
investment in inventories was financed through trade credit and utilization of
the Company's working capital line of credit.
The Company has a $6,000,000 line of credit available through a commercial
bank at prime rate less one half a percentage point (9.00% at September 30,
1995). The outstanding balance on the line of credit at September 30, 1995 was
$4,926,500. See note 6 in the Notes to Consolidated Financial Statements for
more detail on the Company's line of credit. The Company also has $5,227,000 in
cash and cash equivalents, and $3,658,000 in diversified marketable securities
at September 30, 1995.
The Company leased two custom presses and two stock form presses in the
fiscal year ended September 30, 1995. One of the custom presses, purchased at
the end of fiscal 1995, was resold. The remaining custom press lease will expire
in 1996 and the leases on the stock form presses expire in 1997. The Company has
a lease on a 45,000 square foot building in Fort Worth, Texas, which expires in
August, 1999.
The loan outstanding at September, 1995 of $1,650,000 is a term loan with
interest at 75% of the prime rate. See note 6 in the Notes to Consolidated
Financial Statements for more detail on the outstanding debt. The Company
anticipates funding its obligations through cash flow from operations.
Inflation is not expected to have a material adverse effect on the
Company's sales or earnings.
1995 COMPARED TO 1994
Net sales for the fiscal year ended September 30, 1995 increased $7,024,000
or 12% as compared to fiscal 1994, due to increases in average selling prices of
59% in stock continuous forms products and 14% in custom forms resulting in
higher revenues of $18,811,000 and $1,031,000, respectively, in these business
segments. Offsetting the favorable price levels in fiscal 1995 was a decline in
unit volume of 30% or $14,662,000 in the Company's core computer paper business
due to the shrinking market for impact printer paper products averaging
approximately 10% per year and the industry paper supply shortages resulting
from paper mill supply allocations in the Company's third and fourth quarters of
fiscal 1995.
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Cost of sales remained relatively stable ($67,000 change) in fiscal 1995
versus 1994. The lower sales volume of 30% was offset by higher unit costs of
equal effect due to raw material paper cost escalation during the year.
Gross profit increased $7,091,000 (145%) from fiscal 1994 to fiscal 1995
principally from the net incremental positive margins of $6,514,000 in the stock
computer paper business segment resulting from selling price increases outpacing
higher unit paper costs and declining volume. Conversely lower margins occurred
in the custom business forms segment of $511,000 where higher unit costs could
not be entirely passed on to customers through higher prices. Sales of new
products yielded incremental profit of $700,000. Cost reduction efforts
resulted in significant savings from the closing of various distribution sites
and the Florida manufacturing plant in the amount of $630,000. The cost of
underutilization of factory capacity of $242,000 accounted for the majority of
the remaining gross profit change.
Selling expenses increased $569,000 (33%) due to marketing and staffing
cost associated with new product introductions, including salaries of $175,000,
promotional materials and related expenses of $110,000, advertising expense of
$108,000, trade show expense of $72,000, and other sundry increases of $104,000.
General and administrative expenses increased $1,097,000 (39%) due to the
following: $400,000 for the adoption of a deferred compensation plan, increased
salaries and benefits of $206,000, an increase in bad debt expense of $197,000,
and other sundry increases of $294,000.
Interest expense increased $18,000 for the fiscal year ended September 30,
1995, in comparison to the prior fiscal year. The change resulted from interest
incurred on a working capital loan of $68,000, offset by a decrease of $50,000
due to the paydown of mortgage debt and a bank term loan.
Other net expense increased $348,000 for the fiscal year ended September
30, 1995 in comparison to the prior fiscal year. The increase was due
principally to the loss on equipment sales and the retirement of dormant and
underutilized fixed assets of $368,000. The shutdown of the Jacksonville,
Florida facility comprised $198,000 of the loss on fixed assets.
1994 COMPARED TO 1993
Net sales for the fiscal year ended September 30, 1994 decreased
$1,266,000 (2%) over fiscal year 1993 sales. The decrease in sales is due to the
continued decline in stock computer forms at a rate consistent with the industry
as well as a slowdown in the custom forms business.
Cost of sales for the fiscal year ended September 30, 1994 decreased
$2,426,000 (4%) from fiscal 1993. The decrease is due to lower paper prices
throughout most of the year and a decrease in volume.
The gross profit for the fiscal year ended September 30, 1994 increased
$1,160,000 (31%) from fiscal 1993. The increase is due principally to lower
paper costs and a significant effort by the Company to control operating costs.
Selling expenses decreased $260,000 (13%) and administration expenses
decreased $648,000 (19%) from Fiscal 1993 to 1994 due to reductions in
personnel, cost reduction programs Company-wide, offset partially by increased
costs for the development of new products.
Income before taxes for fiscal year ended September 30, 1994 increased
$1,711,000 (115%) over Fiscal 1993 principally due to higher profit margins
resulting from lower paper cost and improved pricing strategy, and management's
continuing focus on the reduction of fixed operating expenses.
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ITEM 8 - FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA
INDEX TO FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA
<TABLE>
<CAPTION>
CONSOLIDATED FINANCIAL STATEMENTS: PAGE
<S> <C>
CONSOLIDATED BALANCE SHEET AS OF SEPTEMBER 30, 1995 AND 1994 12
CONSOLIDATED STATEMENT OF OPERATIONS FOR THE YEARS
ENDED SEPTEMBER 30, 1995, 1994, AND 1993 13
CONSOLIDATED STATEMENT OF SHAREHOLDERS' EQUITY FOR
THE YEARS ENDED SEPTEMBER 30, 1995, 1994, 1993 AND 1992 14
CONSOLIDATED STATEMENT OF CASH FLOWS FOR THE YEARS
ENDED SEPTEMBER 30, 1995, 1994 AND 1993 15
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS 16 - 26
REPORT OF INDEPENDENT ACCOUNTANTS 27
SCHEDULE I - MARKETABLE SECURITIES 28
SCHEDULE V - PROPERTY, PLANT AND EQUIPMENT 29
SCHEDULE VI - ACCUMULATED DEPRECIATION OF PROPERTY
PLANT AND EQUIPMENT 30
SCHEDULE VIII - VALUATION AND QUALIFYING ACCOUNTS 31
SCHEDULE IX - SHORT TERM BORROWINGS 32
REPORT OF INDEPENDENT ACCOUNTANTS ON S-X SCHEDULE 33
</TABLE>
FINANCIAL STATEMENT SCHEDULES NOT INCLUDED IN THIS FORM 10-K HAVE BEEN OMITTED
BECAUSE THEY ARE NOT APPLICABLE OR THE REQUIRED INFORMATION IS SHOWN IN THE
FINANCIAL STATEMENTS OR NOTES THERETO.
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CONSOLIDATED BALANCE SHEET
--------------------------
<TABLE>
<CAPTION>
SEPTEMBER 30,
------------
1995 1994
---- ----
<S> <C> <C>
ASSETS
Current Assets:
Cash and cash equivalents $5,227,249 $2,080,539
Marketable securities 3,657,894 2,568,912
Accounts receivable, less allowance for doubtful accounts of
$505,379 and $449,403 at September 30, 1995 and 1994, respectively 6,549,451 6,389,545
Inventories 17,347,847 4,315,119
Prepaid expenses 299,536 294,405
Deferred income taxes 1,233,000 390,000
----------- -----------
Total Current Assets 34,314,977 16,038,520
Property, plant and equipment, net 6,800,179 8,502,500
Other assets 73,112 206,072
----------- -----------
Total Assets $41,188,268 $24,747,092
=========== ===========
LIABILITIES AND SHAREHOLDERS' EQUITY
Current Liabilities:
Current portion of long-term debt $1,650,000 $326,000
Note payable, bank 4,926,500
Accounts payable and accrued expenses 10,775,630 2,915,661
Accrued payroll and related expenses 602,603 631,997
Income taxes payable 1,105,000 298,551
----------- -----------
Total Current Liabilities 19,059,733 4,172,209
Long-term debt 2,060,667
Deferred income taxes 1,020,413 1,019,782
----------- -----------
Total Liabilities 20,080,146 7,252,658
----------- -----------
Commitments:
Shareholders' equity:
Common stock, $.004 par value; authorized 10,000,000 shares;
issued 3,937, 517 shares 15,751 15,751
Additional paid-in capital 8,588,243 8,588,243
Retained earnings 13,682,551 10,231,164
Unrealized gain in marketable securities 121,314
----------- -----------
22,407,859 18,835,158
Less: Common stock held in treasury, at cost; 208,111 and 222,200
shares at September 30, 1995 and 1994, respectively (1,299,737) (1,340,724)
----------- -----------
Total shareholders' equity 21,108,122 17,494,434
----------- -----------
Total $41,188,268 $24,747,092
=========== ===========
</TABLE>
The accompanying notes are an integral part of these financial statements.
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CONSOLIDATED STATEMENT OF OPERATIONS
------------------------------------
<TABLE>
<CAPTION>
YEAR ENDED SEPTEMBER 30,
-----------------------
1995 1994 1993
---- ---- ----
<S> <C> <C> <C>
Net Sales $64,916,361 $57,892,384 $59,158,458
----------- ----------- -----------
Costs and expenses:
Cost of products sold 52,965,236 53,032,423 55,458,620
Selling expenses 2,311,026 1,742,278 2,001,945
General and administrative expenses 3,917,856 2,820,476 3,468,617
Interest expense 203,299 185,532 292,481
Other expense (income), net 237,328 (110,342) (573,781)
----------- ----------- -----------
Total costs and expenses 59,634,745 57,670,367 60,647,882
----------- ----------- -----------
Income (loss) before income taxes and cumulative
effect of change in accounting principle 5,281,616 222,017 (1,489,424)
Provision for income taxes (benefit) 1,830,229 154,841 (491,510)
----------- ----------- -----------
Income (loss) before cumulative effect
of change in accounting principle 3,451,387 67,176 (997,914)
Cumulative effect on prior years (to September 30,
1993) of change in accounting for income taxes 362,000
----------- ----------- -----------
Net income (loss) $3,451,387 $429,176 ($997,914)
=========== =========== ===========
Earnings per share from operations $.91 $.02 ($.27)
Earnings per share from cumulative effect on prior
years (to September 30, 1993) of change in accounting
for income taxes. $.10
----------- ----------- -----------
Earnings per share $.91 $.12 ($.27)
=========== =========== ===========
</TABLE>
The accompanying notes are an integral part of these financial statements.
13
<PAGE>
CONSOLIDATED STATEMENT OF SHAREHOLDERS EQUITY
---------------------------------------------
<TABLE>
<CAPTION>
ADDITIONAL
COMMON STOCK PAID IN RETAINED UNREALIZED TREASURY
SHARES AMOUNT CAPITAL EARNINGS GAIN STOCK TOTAL
------ ------ ------- -------- ---------- -------- -----
<S> <C> <C> <C> <C> <C> <C> <C>
Balance at September 30, 1992 3,937,517 $15,751 $8,588,243 $10,799,902 ($1,259,471) $18,144,425
Purchase of 25,000 Treasury Shares (81,253) (81,253)
Net Loss (997,914) (997,914)
--------- --------- ---------- ----------- ----------- ---------- -----------
Balance at September 30, 1993 3,937,517 15,751 8,588,243 9,801,988 (1,340,724) 17,065,258
Net Income 429,176 429,176
--------- --------- ---------- ----------- ----------- ---------- -----------
Balance at September 30, 1994 3,937,517 15,751 8,588,243 10,231,164 (1,340,724) 17,494,434
Net Income 3,451,387 3,451,387
Issuance of 14,089 Treasury Shares 40,987 40,987
Unrealized Gain on Marketable
Securities, Net of Income Tax Effect:
Effect of Accounting Change
October 1, 1994 36,574 36,574
Increase in Unrealized Gain on
Marketable Securities during 1995 84,740 84,740
--------- --------- ---------- ----------- ----------- ---------- -----------
Balance at September 30, 1995 3,937,517 $15,751 $8,588,243 $13,682,551 $121,314 ($1,299,737) $21,108,122
========= ======== ========== =========== =========== ========== ===========
</TABLE>
The accompanying notes are an integral part of these financial statements.
14
<PAGE>
CONSOLIDATED STATEMENT OF CASH FLOWS
------------------------------------
<TABLE>
<CAPTION>
YEAR ENDED SEPTEMBER 30,
------------------------
1995 1994 1993
---- ---- ----
<S> <C> <C> <C>
Cash flow from operating activities:
Net income (loss) $3,451,387 $429,176 ($997,914)
---------- ---------- ----------
Adjustments to reconcile net income (loss)
to net cash provided by (used in) operating
activities:
Depreciation 1,135,108 1,290,431 1,556,679
(Gain) loss on sale of property, plant
and equipment 367,907 (4,204) (211,801)
(Gain) loss on sale of marketable securities (376,204) (283,352) (89,689)
Provision for bad debts 330,000 166,004 184,871
Provision for equity in loss on investment in
joint venture 129,334 204,000
Deferred income tax credit (842,369) (477,422) (139,824)
(Increase) decrease in:
Accounts receivable (489,906) 1,022,381 (1,433,974)
Inventories (13,032,729) (180,044) 1,266,111
Recoverable income taxes 740,304 (93,644)
Prepaid expenses (5,130) (4,880) (176,515)
Other assets 3,624 124,297 79,193
Increase (decrease) in:
Accounts payable and accrued expenses 7,859,969 (661,820) (1,309,802)
Accrued payroll and related expenses (29,394) 170,162 (353,125)
Deferred revenues (6,910)
Income taxes payable, current 806,449
---------- ---------- ----------
Total adjustments (4,143,341) 2,105,857 (728,430)
---------- ---------- ----------
Net cash provided by (used in)
operating activities (691,954) 2,535,033 (1,726,344)
---------- ---------- ----------
Cash flows from investing activities:
Investment in joint venture (299,999)
Proceeds from sale of marketable securities 429,174 2,249,069 1,473,677
Purchase of marketable securities (1,020,638) (1,750,137) (2,872,922)
Proceeds from sale of property, plant and
equipment 1,120,807 970,092 897,400
Purchase of property, plant and equipment (921,499) (355,959) (895,931)
---------- ---------- ----------
Net cash provided by (used in)
investing activities (392,156) 1,113,065 (1,697,775)
---------- ---------- ----------
Cash flows from financing activities:
Proceeds of long-term debt 3,380,000
Repayments of long-term debt (736,667) (2,442,666) (737,571)
(Purchase) issuance of treasury stock 40,987 81,253
Proceeds of working capital line of credit 4,926,500
---------- ---------- ----------
Net cash provided by (used in)
financing activities 4,230,820 (2,442,666) 2,561,176
---------- ---------- ----------
Net increase (decrease) in cash and cash
equivalents 3,146,710 1,205,432 (862,943)
Cash and cash equivalents, at beginning of year 2,080,539 875,107 1,738,050
---------- ---------- ----------
Cash and cash equivalents, at end of year $5,277,249 $2,080,539 $875,107
========== ========== ==========
Supplemental disclosures of cash flow information:
Cash paid (received) during the year for:
Interest $203,299 $185,532 $292,481
========== ========== ==========
Income taxes $1,753,912 $452,205 ($299,632)
========== ========== ==========
</TABLE>
Supplemental schedule of non-cash investing and financing activities:
The Company acquired 266,667 shares, or 33.3%, of the common stock of a joint
venture corporation for $333,334 in December 1992, including a note payable for
$33,333 due November 1, 1993. Also, marketable securities increased by $183,945
due to net unrealized gains during the year.
The accompanying notes are an integral part of these financial statements.
15
<PAGE>
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
NOTE 1 - BUSINESS OPERATIONS AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES:
Paris Business Forms, Inc. and subsidiaries (collectively, the "Company")
manufacture stock and custom business forms, provide value added services to cut
sheet products, and distribute office products and computer/printer peripheral
products. The Company manufactures stock and custom forms in Burlington, New
Jersey and stock forms in Fort Worth, Texas. The Company markets through
retailers, resellers, and dealers throughout the United States and Canada.
PRINCIPLES OF CONSOLIDATION:
The consolidated financial statements include the accounts of Paris Business
Forms, Inc. and its wholly-owned subsidiaries with appropriate elimination of
intercompany accounts and transactions.
INVESTMENTS IN DEBT AND EQUITY SECURITIES:
At October 1, 1994, the Company adopted Statement of Financial "Accounting
Standards No. 115, Accounting for Certain Investments in Debt and Equity
Securities: ("SFAS No. 115"). The adoption of SFAS No. 115 resulted in an
increase in stockholders' equity of $36,574, net of taxes of $18,841. In
accordance with SFAS No. 115, prior years financial statements have not been
restated to reflect the change in accounting method.
At September 30, 1995, marketable equity securities have been categorized as
available for sale. Such securities are stated at fair value based upon quoted
market prices. Unrealized holding gains and losses, net of tax, are reported as
a separate component of stockholders' equity. At September 30, 1994, marketable
equity securities were stated at the lower of aggregate cost or market value.
INVENTORIES:
Inventories are stated at the lower cost or market. Cost is determined by the
first-in, first-out method (FIFO).
PROPERTY, PLANT AND EQUIPMENT:
Expenditures for renewals and betterments which increase the useful life or
capacity of property, plant and equipment are capitalized at cost. Expenditures
for repairs and maintenance are charged to income as incurred. Gain or loss on
the retirement or disposal of capital assets is reflected in income in the
period of disposal.
Depreciation is computed using the straight-line method over the estimated
useful lives of the assets.
JOINT VENTURE:
The Company is a joint venture participant with Xerox Corporation in Signature
Corporation, Inc. This investment is accounted for using the equity method.
INCOME TAXES:
Effective October 1, 1993, the Company adopted Statement of Financial Accounting
Standards No. 109, "Accounting for Income Taxes", which changed the criteria for
measuring the provision for income taxes
16
<PAGE>
and recognizing deferred tax assets and liabilities on the balance sheet. Income
taxes are provided for the tax effects of transactions reported in the financial
statements and consist of taxes currently due plus deferred taxes related
primarily to differences between the basis of assets and liabilities for
financial and income tax reporting. The cumulative effect of the change on prior
years increased net income by $362,000 in 1994.
PER SHARE DATA:
Earnings per share data have been computed on the basis of the weighted average
number of shares of common stock outstanding (3,715,317 for the years ending
September 30, 1995, 1994 and 1993), plus the dilutive effect of common stock
equivalents (stock options) computed using the treasury stock method which
resulted in an aggregate of 3,795,087 shares in 1995 and 3,715,317 shares in
1994 and 1993.
STATEMENT OF CASH FLOWS AND CASH MANAGEMENT:
For purposes of the statement of cash flows, the Company considers short-term
investments purchased with an original maturity of three months or less to be
cash equivalents.
NOTE 2 - ACQUISITIONS AND DISPOSITIONS
ACQUISITION:
In December 1992, the Company acquired 266,667 shares or 33.3% of the common
stock of a developmental stage joint venture corporation, Signature Corporation,
Inc. ("Signature"), for $333,334 including cash and a note payable for $33,333,
(included in the current portion of long term debt), which was paid November 1,
1993. The Company's rights and obligations related to this investment are
included in the Stock Purchase, Stockholder and License Agreements including
certain common stock warrants and registration rights.
The Company's original investment of $333,334 or 33% of the common stock of
Signature Corporation, Inc., a joint venture, has been written off completely by
the Company's recognition of its equity in the operating losses of Signature of
$129,334 and $204,000 in fiscal 1995 and fiscal 1994, respectively. In
addition, the Company paid expenses of Signature, on its behalf, in the amount
of $88,057 and $99,526 in fiscal 1995 and fiscal 1994, respectively.
The Company invested $921,499 in property, plant, and equipment during the year,
of which $567,221 relates to a custom press and collator, and $160,500 relates
to computer equipment for the installation of a local area network.
DISPOSITION:
The Jacksonville, Florida facility was sold in April 1995, due to plant
rationalization and reorganization. The net sales proceeds were $978,182 and
the loss realized was $56,955. The retirement of other assets related to the
Jacksonville closing resulted in a loss of $141,291. Other costs expended to
complete the plant shutdown totaled $87,625, resulting in total disposition
costs of $285,871.
The Fort Worth, Texas facility was sold in June 1994 and replaced by a leased
facility in the same city. The net sales proceeds were $854,361 and the gain
realized was $89,158. The gain was included in 1994 in other income.
17
<PAGE>
NOTE 3 - MARKETABLE SECURITIES
Marketable securities classified as current assets at September 30, 1995 and
1994, are summarized as follows:
<TABLE>
<CAPTION>
1995 FAIR VALUE COST
- - ---- ---------- ----------
<S> <C> <C>
EQUITY SECURITIES:
Stocks $ 659,362 $ 554,493
Mutual Funds 543,433 464,356
Limited Partnerships 2,455,100 2,455,100
---------- ----------
Total $3,657,895 $3,473,949
========== ==========
<CAPTION>
1994
- - ----
<S> <C> <C>
EQUITY SECURITIES:
Stocks $1,407,313 $1,411,825
Mutual Funds 473,363 384,935
Limited Partnerships 743,651 772,152
---------- ----------
Total $2,624,327 $2,568,912
========== ==========
</TABLE>
Gross unrealized holding gains and losses at September 30, 1995 and 1994, are as
follows:
<TABLE>
<CAPTION>
1995 UNREALIZED UNREALIZED
- - ----
GAINS LOSSES
---------- ----------
<S> <C> <C>
EQUITY SECURITIES:
Stocks $ 112,121 $ 7,252
Mutual Funds 79,077 0
---------- ----------
Total $ 191,198 $ 7,252
========== ==========
<CAPTION>
1994
- - ----
<S> <C> <C>
EQUITY SECURITIES:
Stocks $ 33,340 $ 37,852
Mutual Funds 88,428 0
Limited Partnerships 42,855 71,356
---------- ----------
Total $ 164,623 $ 109,208
========== ==========
</TABLE>
Proceeds from the sale of securities classified as available for sale for the
year ended September 30, 1995 and 1994 were $429,174 and $2,249,069,
respectively. Fiscal 1995 and 1994 gross realized gains and losses were $412,861
and $36,657, and $356,620 and $73,268, respectively, and are included in other
income. For the purpose of determining gross realized gains and losses, the cost
of securities sold is based upon specific identification.
18
<PAGE>
NOTE 4 - INVENTORIES:
Inventories consist of the following at September 30, 1995 and 1994:
<TABLE>
<CAPTION>
SEPTEMBER 30,
-------------
1995 1994
---- ----
<S> <C> <C>
Raw materials $12,410,366 $1,778,744
Work in progress 76,350 86,496
Finished goods 4,861,131 2,449,879
----------- ----------
Total $17,347,847 $4,315,119
=========== ==========
</TABLE>
NOTE 5 - PROPERTY, PLANT AND EQUIPMENT:
Property, plant and equipment consist of the following at September 30, 1995 and
1994:
<TABLE>
<CAPTION>
SEPTEMBER 30,
-------------
ESTIMATED
USEFUL LIVES 1995 1994
------------ ---- ----
<S> <C> <C> <C>
Land
Building and building $489,600 $677,715
improvements 10-30 years
Machinery and equipment 7-10 years 4,951,312 6,002,356
Furniture and fixtures 10 years 8,352,740 8,813,176
Automobiles and trucks 4-6 years 366,285 364,772
171,351 190,391
---------- ----------
14,331,288 16,048,410
Less - accumulated depreciation (7,531,110) (7,545,910)
---------- ----------
Property, plant and equipment, net $6,800,179 $8,502,500
========== ==========
</TABLE>
Depreciation expense totaled $1,135,109, $1,290,431 and $1,556,679 for the years
ended September 30, 1995, 1994 and 1993, respectively.
19
<PAGE>
NOTE 6 - LONG TERM DEBT:
Long-term debt consists of the following at September 30, 1995 and 1994:
<TABLE>
<CAPTION>
SEPTEMBER 30,
-------------
1995 1994
---- ----
<S> <C> <C>
New Jersey Economic Development Authority (NJEDA) Bond,
interest payable monthly at a rate of 75% of prime (9.00%
at September 30, 1995), principal payable in monthly
installments of $12,500, with the unamortized principal
balance due on February 1, 1996. $1,650,000 $1,800,000
Mortgage note, interest payable monthly at a fixed rate
of 7.0% and principal payable in sixty consecutive
monthly payments of $14,667. The balance of $308,000
was repaid in 1995 with the sale of the Jacksonville,
Florida facility (Note 2). - 586,667
----------- -----------
1,650,000 2,386,667
Less current portion (1,650,000) (326,000)
----------- -----------
Total $ - $2,060,667
=========== ===========
</TABLE>
The Company has a line of credit payable on demand with a commercial bank under
which it can borrow up to $6,000,000 at prime rate (9.00% at September 30, 1995)
minus 1/2%. The line of credit is secured by the Company's accounts receivable
and inventories. Interest is payable monthly. The line of credit expires on
September 30, 1996. The borrowings outstanding at September 30, 1995 were
$4,926,500. There were no borrowings outstanding at September 30, 1994.
The NJEDA industrial revenue note, which at the lender's option, may be extended
beyond its original 10-year term, is secured by a first mortgage on the
Company's Burlington, New Jersey facility, the guarantee of its subsidiaries,
Parisnap, Inc. and Paristock, Inc., the Company's accounts receivable ,
machinery and equipment and a life insurance policy on the Company's president.
Machinery and equipment secured by this loan has net book value of approximately
$3,087,000 at September 30, 1995. The loan covenants contain certain limitations
and requirements including the following:
. Limitations on capital expenditures of $2,000,000 per fiscal year;
. Minimum consolidated tangible net worth, as defined;
. Minimum debt service coverage ratio of 1.15 to 1.00;
. Total liabilities to tangible net worth may not exceed .75 to 1.00;
. Current assets excluding inventory to current liabilities may not be less than
1.25 to 1.00;
. Limitations on additional borrowings, liens, contingent obligations, leases,
officers salaries, sales of assets, mergers, loans and advances, acquisitions
of and dividends on common stock; and cross-collateralization of all debt
facilities with the bank.
A waiver was obtained for the violation of certain covenants during the fiscal
year.
20
<PAGE>
NOTE 7 - INCOME TAXES:
The composition of the provision (credit) for income taxes is as follows:
<TABLE>
<CAPTION>
FOR THE YEAR ENDED SEPTEMBER 30,
--------------------------------
1995 1994 1993
---- ---- ----
<S> <C> <C> <C>
Current:
Federal $2,533,000 $270,263 ($348,405)
State 196,000
---------- --------- ----------
2,729,000 270,263 (348,405)
---------- --------- ----------
Deferred:
Federal (877,771) (115,422) (143,105)
State (21,000)
---------- --------- ----------
(898,771) (115,422) (143,105)
---------- --------- ----------
Total $1,830,229 $154,841 ($491,510)
========== ========= ==========
</TABLE>
The Company utilized approximately $1,900,000 of $2,700,000 of state net
operating loss carryforwards available, among the consolidated entities, to
offset state income taxes of approximately $95,000 for the year ended September
30, 1995. The remainder of state operating loss carryforwards of approximately
$800,000 are expected to be utilized in future fiscal years. There are no
federal net operating loss carryforwards available for the current or future
years.
Reconciliations of income taxes with the amounts which would result from
applying the UNITED STATES statutory rate are as follows:
<TABLE>
<CAPTION>
FOR THE YEAR ENDED SEPTEMBER 30,
--------------------------------
1995 1994 1993
---- ---- ----
<S> <C> <C> <C>
Provision (credit) at statutory rate $1,795,749 $75,426 ($506,404)
Increases (reductions) in taxes resulting from
asset writedowns (200,040) 107,713
State income taxes, net of federal
income tax benefit 113,520
Adjustment of prior year accruals 175,000
Other increases (reductions), net (54,000) (28,358) 14,894
---------- -------- ---------
Total $1,830,229 $154,841 ($491,510)
========== ======== =========
</TABLE>
The components of the deferred tax asset at September 30, 1995 and 1994 are as
follows:
<TABLE>
<CAPTION>
1995 1994
---- ----
<S> <C> <C>
Reserve for doubtful accounts $260,000 $191,000
Reserve for inventory obsolescence
and writedown to net realizable value 510,000 136,000
Accrued compensation 258,000 63,000
Writedown of investment in Signature 142,000
Corporation
Other increases (reductions), net 63,000
---------- --------
Total $1,233,000 $390,000
========== ========
</TABLE>
The deferred income tax liability at September 30, 1995 and 1994 results from
the use of accelerated depreciation methods for tax purposes.
21
<PAGE>
NOTE 8 - SHAREHOLDERS' EQUITY:
The Company adopted a stock option plan effective October 1, 1985. A total of
261,000 shares of common stock were initially authorized and reserved for
issuance under the plan. As a result of stock dividends in 1988 and 1987, the
total stock options authorized is 315,810. The plan provides for the granting to
key employees of both non-qualified stock options and "incentive stock options"
within the meaning of Section 422A of the Internal Revenue Code. Under the plan,
no options may be granted more than ten years after the effective date of plan.
The exercise price of all incentive stock options granted under the option plan
may be no less than fair market value of such shares on the date of grant. Stock
option activity for 1995, 1994 and 1993 is as follows:
<TABLE>
<CAPTION>
1995 1994 1993
---- ---- ----
<S> <C> <C> <C>
Options outstanding at October 1 211,000 173,000 184,420
Options granted 146,000 73,000 37,000
Options expired/exercised (56,700) (35,000) (48,420)
-------- -------- -------
Options outstanding and exercisable at September 30 300,300 211,000 173,000
======== ======== =======
Options available for grant at September 30 15,510 104,810 142,810
======== ======== =======
Options price range at September 30 $1.875 to $1.875 to $3.50 to
$7.975 $9.08 $9.08
</TABLE>
The Board of Directors has approved the purchase of up to 300,000 shares of
stock for the Company's treasury. The amount of treasury shares at September 30,
1995 are 208,111.
22
<PAGE>
NOTE 9 - COMMITMENTS
LEASES:
The Company has certain operating leases, primarily for machinery and equipment
and the Ft. Worth, Texas facility, expiring at various dates. Total rental
expense was $498,547 in 1995, $648,428 in 1994, and $708,075 in 1993.
<TABLE>
<CAPTION>
YEAR AMOUNT
- - ---- ------
<S> <C>
1996 $364,862
1997 274,716
1998 166,928
1999 103,125
--------
Total $909,631
========
</TABLE>
SERVICE CONTRACTS:
The Company has an agreement with an outside contractor to perform warehousing
and distribution services for the Fort Worth, Texas facility. The services
include staffing and managing personnel, provision of all equipment, material,
and services in order to maintain the facility, and the design of a warehouse
management system. Total service contract expense was $212,415 in 1995.
<TABLE>
<CAPTION>
YEAR AMOUNT
- - ---- ------
<S> <C>
1996 $209,964
1997 216,264
1998 222,744
1999 229,428
--------
Total $878,400
========
</TABLE>
NOTE 10 - PROFIT SHARING AND DEFERRED COMPENSATION PLAN:
The Company has a noncontributory profit sharing plan which covers substantially
all employees and provides benefits upon retirement, death or termination of
employment. Amounts attributable to participant accounts are based on their
compensation and the meeting of a required vesting schedule. The plan provides
for contributions determined annually by the Board of Directors. The Company's
policy is to currently fund all contributions determined by the Board of
Directors. Contributions totaled $0, $100,000, and $160,000, for the years ended
September 30, 1995, 1994 and 1993, respectively.
The Board of Directors have approved that upon the termination of his
employment, the President and Chairman of the Board, shall receive $100,000 per
year for four years in recognition of past services. Accordingly, $400,000 in
deferred compensation liability has been included in these financial statement.
23
<PAGE>
NOTE 11 - SEGMENT INFORMATION:
The Company currently operates in three basic segments or lines of business.
These segments are (1) stock continuous forms and cutsheets, (2) custom
continuous forms and cutsheets, and (3) office products, including
computer/printer hardware and software products. The following table sets forth
certain financial information with respect to these segments and reconciles such
information to the consolidated financial statements.
<TABLE>
<CAPTION>
YEAR-ENDED SEPTEMBER 30,
------------------------
1995 1994 1993
---- ----- ----
<S> <C> <C> <C>
Net sales of products and services:
Stock forms $55,283,756 $50,081,522 $48,061,199
Custom forms 8,823,616 7,810,862 11,097,259
Office products, hardware/software 808,989
----------- ----------- -----------
$64,916,361 $57,892,384 $59,158,458
=========== =========== ===========
Segment operating income (loss):
Stock forms $6,289,470 $67,299 ($1,299,434)
Custom forms (581,486) 244,616 (444,295)
Office products, hardware/software (398,654)
Corporate 412,913 (14,708) (26,995)
---------- ----------- -----------
$5,722,243 $297,207 ($1,770,724)
---------- =========== ===========
Consolidated income (loss) before taxes:
Segment operating income (loss): 5,722,243 297,207 (1,770,724)
Interest expense (203,299) (185,532) (292,481)
Other income (expense) items (237,328) 110,342 573,781
---------- ----------- -----------
$5,281,616 $222,017 ($1,489,424)
========== =========== ===========
Assets:
Stock forms $23,488,774 $12,979,371 $14,771,960
Custom forms 3,228,294 6,304,754 7,532,904
Office products, hardware/software
Corporate 14,471,200 5,462,967 4,736,246
----------- ----------- -----------
Total consolidated $41,188,268 $24,747,092 $27,041,110
=========== =========== ===========
Capital expenditures:
Stock forms 122,812 291,022 475,464
Custom forms 599,214 20,012 108,400
Office products, hardware/software
Corporate 199,473 44,925 312,067
----------- ----------- -----------
Total consolidated $921,499 $355,959 $895,931
=========== =========== ===========
Depreciation expense:
Stock forms 657,608 801,936 613,755
Custom forms 477,500 488,495 942,924
----------- ----------- -----------
Total consolidated $1,135,108 $1,290,431 $1,556,679
=========== =========== ===========
</TABLE>
Segment operating income is determined by deducting from sales of products and
services, cost of products sold, and selling, general and administrative
expenses directly related or allocable to the segment. Not included in segment
operating income are certain income and expense items such as interest income
and expense, other income and income taxes.
During the years ended September 30, 1995, 1994 and 1993, net sales to one stock
customer, Office Depot, Inc., accounted for approximately 35%, 33%, and 32% of
the total net sales, respectively. The same customer accounted for 20%, 27%, and
27% of the accounts receivable balance at September 30, 1995, 1994 and 1993
respectively.
24
<PAGE>
NOTE 12 - QUARTERLY FINANCIAL DATA (UNAUDITED):
<TABLE>
<CAPTION>
QUARTER ENDED
--------------
(IN THOUSANDS, EXCEPT PER SHARE AMOUNTS)
DEC 31 MAR 31 JUN 30 SEPT 30
------ ------ ------ -------
<S> <C> <C> <C> <C>
1995:
. Net sales $14,017 $19,403 $16,741 $14,755
. Gross profit 1,839 4,070 3,560 2,482
. Income before taxes 547 1,452 1,915 1,367
. Net (loss) income 361 958 1,164 968
. Earnings per share $ 0.10 $ 0.26 $ 0.30 $ 0.25
1994:
. Net sales $15,261 $13,638 $14,506 $14,487
. Gross profit 1,064 997 1,222 1,575
. Income (loss) before taxes (271) (159) 54 597
. Income (loss) before cumulative effect
of change in account principle (179) (105) 36 315
. Cumulative effect on prior years (to
September 30, 1993) of change in
accounting for income taxes (362) 0 0 0
. Net (loss) income (1) 183 (105) 36 315
. Earnings per share $ 0.05 $ (0.03) $ 0.01 $ 0.08
1993:
. Net sales $15,153 $14,666 $14,433 $14,906
. Gross profit 1,323 1,077 840 460
. Income (loss) before taxes 55 (588) (353) (603)
. Net (loss) income 49 (318) (316) (413)
. Earnings (loss) per share $ 0.01 $ (0.08) $ (0.09) $ (0.11)
</TABLE>
(1) Net income for the quarter ended December 31, 1993, previously reported as
$(179) is restated above to reflect the cumulative effect on prior years of
change in accounting for income taxes.
25
<PAGE>
NOTE 13 - OTHER EXPENSE (INCOME), NET:
Other expense (income), net, consist of the following at September 30, 1995,
1994 and 1993:
<TABLE>
<CAPTION>
September 30,
1995 1994 1993
---- ---- ----
<S> <C> <C> <C>
Gain on marketable securities ($376,205) ($283,352) ($89,689)
(Gain)/loss on fixed asset disposal 367,903 (4,204) (260,034)
Equity in joint venture losses, and other expenses 217,390 303,526
Interest income (184,596) (78,098) (72,664)
Other, net 212,836 (48,214) (151,394)
-------------------------------------
Total $237,328 ($110,342) ($573,781)
=====================================
</TABLE>
26
<PAGE>
[LETTERHEAD OF PARENTE, RANDOLPH, ORLANDO, CAREY & ASSOCIATES APPEARS HERE]
REPORT OF INDEPENDENT
CERTIFIED PUBLIC ACCOUNTANTS
============================
To the Shareholders and
Board of Directors
Paris Business Forms, Inc.
Burlington, New Jersey:
We have audited the accompanying consolidated balance sheets of Paris
Business Forms, Inc. and subsidiaries as of September 30, 1995, and 1994, and
the related consolidated statements of operations, shareholder's equity and cash
flows for each of the years in the period ended September 30, 1995. These
financial statements are the responsibility of the Company's management. Our
responsibility is to express an opinion on these financial statements based on
our audits.
We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to obtain
reasonable assurance about whether the financial statements are free of material
misstatement. An audit includes examining, on a test basis, evidence supporting
the amounts and disclosures in the financial statements. An audit also includes
assessing the accounting principles used and significant estimates made by
management, as well as evaluating the overall financial statement presentation.
We believe that our audits provide a reasonable basis for our opinion.
In our opinion, the consolidated financial statements referred to above
present fairly, in all material respects, the financial position of Paris
Business Forms, Inc., and subsidiaries as of September 30, 1995 and 1994, and
the results of its operations and its cash flows for each of the three years in
the period ended September 30, 1995 in conformity with generally accepted
accounting principles.
/s/ Parente, Randolph, Orlando, Carey & Associates
Parente, Randolph, Orlando, Carey and Associates
Media, Pennsylvania
November 2, 1995
27
<PAGE>
PARIS BUSINESS FORMS, INC.
--------------------------
SCHEDULE I
----------
MARKETABLE SECURITIES
---------------------
<TABLE>
<CAPTION>
September 30, 1995
------------------
Name of issuer Number of Market Carrying
and title of issue shares or units Cost value value
- - ------------------ --------------- ---------- ---------- ----------
<S> <C> <C> <C> <C>
Stocks 38,652 $3,009,593 $3,114,462 $3,114,462
Mutual Funds 34,563 464,356 543,432 543,432
---------- ---------- ---------- ----------
Total 73,215 $3,473,949 $3,657,894 $3,657,894
========== ========== ========== ==========
</TABLE>
28
<PAGE>
PARIS BUSINESS FORMS, INC.
--------------------------
SCHEDULE V
----------
PROPERTY, PLANT AND EQUIPMENT
-----------------------------
<TABLE>
<CAPTION>
BALANCE AT BALANCE
BEGINNING ADDITIONS RETIREMENTS AT END
CLASSIFICATION OF PERIOD AT COST AND SALES OF PERIOD
- - -------------- ---------- --------- ----------- ---------
<S> <C> <C> <C> <C>
For the year ended
September 30, 1995:
Land $ 677,715 $ 188,115 $ 489,600
Building and building
improvements 6,002,356 6,999 1,058,043 4,951,312
Machinery and equipment 8,813,176 872,471 1,332,907 8,352,740
Furniture and fixtures 364,772 4,370 2,857 366,285
Automobiles and trucks 190,391 37,659 56,699 171,351
----------- --------- ---------- -----------
$16,048,410 $ 921,499 $2,638,621 $14,331,288
=========== ========= ========== ===========
For the year ended
September 30, 1994:
Land $ 867,631 $ 189,916 $ 677,715
Building and building
improvements 6,642,147 15,492 655,284 6,002,356
Machinery and equipment 8,955,110 313,200 455,134 8,813,176
Furniture and fixtures 342,512 22,260 364,772
Automobiles and trucks 190,391 190,391
----------- --------- ---------- -----------
$16,997,791 $ 350,952 $1,300,334 $16,048,410
=========== ========= ========== ===========
For the year ended
September 30, 1993:
Land $ 867,631 $ 867,631
Building and building
improvements 6,613,013 $ 29,134 6,642,147
Machinery and equipment 11,099,608 866,797 3,011,295 8,955,110
Furniture and fixtures 441,302 98,790 342,512
Automobiles and trucks 289,874 99,483 190,391
----------- --------- ---------- -----------
$19,311,428 $ 895,931 $3,209,568 $16,997,791
=========== ========= ========== ===========
</TABLE>
29
<PAGE>
PARIS BUSINESS FORMS, INC.
--------------------------
SCHEDULE VI
-----------
ACCUMULATED DEPRECIATION OF PROPERTY, PLANT AND EQUIPMENT
---------------------------------------------------------
<TABLE>
<CAPTION>
BALANCE AT BALANCE
BEGINNING RETIREMENTS AT END
CLASSIFICATION OF PERIOD DEPRECIATION AND SALES OF PERIOD
- - -------------- ---------- ------------ --------- ---------
<S> <C> <C> <C> <C>
For the year ended
September 30, 1995:
Building and Building
improvements $1,740,897 $ 231,811 $ 125,917 $1,846,791
Machinery and equipment 5,342,068 872,482 966,152 5,248,398
Furniture and fixtures 273,730 27,757 1,142 300,345
Automobiles and trucks 189,215 3,058 56,698 135,575
---------- ---------- ---------- ----------
$7,545,910 $1,135,108 $1,149,909 $7,531,110
========== ========== ========== ==========
For the year ended
September 30, 1994:
Building and Building
improvements $1,537,610 $ 271,728 $ 68,441 $1,740,897
Machinery and equipment 4,646,659 966,421 271,012 5,342,068
Furniture and fixtures 236,105 37,625 273,730
Automobiles and trucks 174,558 14,657 189,215
---------- ---------- ---------- ----------
$6,594,932 $1,290,431 $ 339,453 $7,545,910
========== ========== ========== ==========
For the year ended
September 30, 1993
Building and building
improvements $1,264,119 $ 273,491 $1,537,610
Machinery and equipment 5,818,919 1,185,651 $2,357,911 4,646,659
Furniture and fixtures 246,513 63,641 74,049 236,105
Automobiles and trucks 232,670 33,896 92,008 174,558
---------- ---------- ---------- ----------
$7,562,221 $1,556,679 $2,523,968 $6,594,932
========== ========== ========== ==========
</TABLE>
30
<PAGE>
PARIS BUSINESS FORMS, INC.
--------------------------
SCHEDULE VIII
-------------
VALUATION AND QUALIFYING ACCOUNTS
---------------------------------
<TABLE>
<CAPTION>
BALANCE AT BEGINNING ADDITIONS CHARGED TO BALANCE AT
OF PERIOD COST AND EXPENSES DEDUCTIONS END OF PERIOD
-------------------- -------------------- ---------- -------------
<S> <C> <C> <C> <C>
For the year ended
September 30, 1995:
Deducted from asset to
which it applies:
Allowance for
doubtful accounts: $449,403 $330,000 $274,024 $505,379
======== ======== ======== ========
For the year ended
September 30, 1994:
Deducted from asset to
which it applies:
Allowance for
doubtful accounts: $511,118 $129,780 $191,495 $449,403
======== ======== ======== ========
For the year ended
September 30, 1993:
Deducted from asset to
which it applies:
Allowance for
doubtful accounts: $326,247 $322,001 $137,130 $511,118
======== ======== ======== ========
</TABLE>
31
<PAGE>
PARIS BUSINESS FORMS, INC.
--------------------------
SCHEDULE IX
-----------
SHORT-TERM BORROWINGS
---------------------
September 30, 1995
------------------
<TABLE>
<CAPTION>
Maximum Amount Average Amount Weighted Average
Category of Aggregate Balance at Weighted Average Outstanding During Outstanding During Interest Rate
Short Term Borrowings End of Period Interest Rate The Period The Period During the Period
<S> <C> <C> <C> <C> <C>
Working Capital $4,926,500 8.75% $5,500,000 $827,000 8.75%
Line of Credit
Payable to Bank
</TABLE>
ITEM 9-CHANGES IN AND DISAGREEMENTS OF ACCOUNTING AND FINANCIAL DISCLOSURE
None.
32
<PAGE>
[LETTERHEAD OF PARENTE, RANDOLPH, ORLANDO, CAREY & ASSOCIATES APPEARS HERE]
REPORT OF INDEPENDENT
CERTIFIED PUBLIC ACCOUNTANTS
ON FINANCIAL STATEMENT SCHEDULES
--------------------------------
To the Shareholders and
Board of Directors
Paris Business Forms, Inc.
Burlington, New Jersey:
We have audited the basic consolidated financial statements of Paris
Business Forms, Inc. and subsidiaries as of September 30, 1995 and 1994, and for
each of the years in the three year period ended September 30, 1995, and have
issued our report thereon dated November 2, 1995, such consolidated financial
statements and report are included elsewhere in this Form 10K. Our audit also
included financial statement schedules of Paris Business Forms, Inc. and
subsidiaries listed in Item 14. These financial statement schedules are the
responsibility of the Company's management. Our responsibility is to express an
opinion on the financial statement schedules based on our audits. In our
opinion, such financial statement schedules referred to above, when considered
in relation to the basic consolidated financial statements taken as a whole,
present fairly in all material respects the information set forth therein.
/s/ Parente, Randolph, Orlando, Carey & Associates
Parente, Randolph, Orlando, Carey & Associates
Media, Pennsylvania
November 2, 1995
33
<PAGE>
PART III
ITEM 10 - DIRECTORS AND EXECUTIVE OFFICERS OF THE REGISTRANT
Directors of the Company are elected for a term of one year. The current
Directors and Officers of the Company, together with their ages, positions,
backgrounds, and business experiences are set forth below:
<TABLE>
<CAPTION>
NAME AGE POSITION WITH THE COMPANY
- - ---- --- -------------------------
<S> <C> <C>
Dominic P. Toscani, Sr. 67 President, Chief Executive
(2), (4) Officer, Treasurer and
Chairman of the Board of
Directors
Dominic P. Toscani, Jr. 37 Senior Vice President,
(2), (4) Secretary and Director
Gerard M. Toscani 35 Senior Vice President
(3), (4) and Director
Thomas A. Baglio 34 Vice President of Sales
Jim Grey 41 Vice President of Operations
John A. Whiteside 47 Chief Financial Officer
Palmer E. Retzlaff 64 Director
(2), (3)
Frank A. Mattei, M.D. 74 Director
(1)
Oscar Tete 71 Director
(1)
John V. Petrycki 55 Director
(1), (3)
</TABLE>
(1) Member of Compensation and Stock Option Committee
(2) Member of Audit Committee.
(3) Member of the Investment and Finance Committee
(4) Dominic P. Toscani, Sr. is the father of Dominic P. Toscani, Jr. and
Gerard M. Toscani.
Dominic P. Toscani, Sr. is the founder of the Company, has served as a
Director and has been responsible for its management since its inception.
Prior to the founding of the Company, Mr. Toscani was a practicing attorney.
Dominic P. Toscani, Jr. became a Director of the Company in 1992. He was
appointed Senior Vice President and Secretary during fiscal 1990 and was the
Company's Vice President of Operations since January 1987. He previously
served as Operations Manager since 1982.
34
<PAGE>
Gerard M. Toscani became a Director of the Company in 1992. He was appointed
Senior Vice President during fiscal 1990 and was the Company's Vice President
of Sales and Marketing since January 1987. He previously served as Sales and
Marketing Manager since September 1982.
Thomas A. Baglio became Vice President of Sales in May of 1992. He served as
Regional Sales Manager for the Company since January 1991. For the three years
prior to January 1991 he was a Sales Manager with SCM Allied Paper.
Jim Grey became Vice President of Operations in September 1993. He has been
with the Company over eight years and has previously served as General Manager
of the New Jersey facility.
John A. Whiteside became Chief Financial Officer in January 1994. He served as
Operations Manager and Controller of a H.J. Heinz Company subsidiary from 1990
until 1994. For the five years prior, he served as the Vice President of
Finance for Ultra Precision, Inc.
Palmer E. Retzlaff became a Director in November 1993. He has been President
of Southwest Grain Co., Inc. since 1973. Previously he was the General Manager
of the Philadelphia Eagles.
Frank A. Mattei was elected to the Board of Directors in March 1986. He has
been a practicing orthopedic surgeon over the past five years and is
associated with North Philadelphia Health System, (formerly Girard Medical
Center), and St. Agnes Medical Center in Philadelphia.
Oscar Tete was elected to the Board of Directors in March 1986. Mr. Tete
retired in 1990. He was an Executive Vice President of First Fidelity Bank in
Burlington, New Jersey since 1972.
John Petrycki was elected to the Board of Directors in August 1995. Mr.
Petrycki retired in 1995. He was President and CEO of PNC Bank in south
central Pennsylvania.
35
<PAGE>
ITEM 11 - SUMMARY COMPENSATION
The following table contains information regarding the individual compensation
of the seven most highly compensated officers of the Company in fiscal years
1995, 1994 and 1993.
SUMMARY COMPENSATION TABLE
<TABLE>
<CAPTION>
ANNUAL COMPENSATION LONG TERM
COMPENSATION
----------------------------------------------------------
AWARDS
----------------
NAME AND FISCAL OTHER RESTRICTED
PRINCIPAL POSITION YEAR SALARY BONUS ANNUAL STOCK
COMPENSATION (1) OPTIONS
- - ----------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
Dominic P. Toscani, Sr. 1995 $285,362 $50,000 $8,000 $31,250
Chairman of the Board 1994 $296,400 $10,000 $8,000 $22,500
and President 1993 $293,407 $30,000 $8,000 $40,000
Dominic P. Toscani, Jr. 1995 $179,092 $62,500 $8,000 $31,250
Senior Vice President 1994 $129,538 $30,000 $8,000 $22,500
and Secretary 1993 $119,654 $20,000 $8,000 $40,000
Gerard M. Toscani 1995 $179,092 $62,500 $8,000 $31,250
Senior Vice President 1994 $136,046 $30,000 $8,000 $22,500
1993 $112,798 $20,000 $8,000 $40,000
Thomas A. Baglio 1995 $110,962 $10,000 $ 0 $6,250
Vice President of Sales 1994 $89,614 $ 4,000 $ 0 $11,250
1993 $79,992 $ 0 $ 0 $8,000
James Grey (1) 1995 $77,212 $13,000 $8,000 $6,250
Vice President of Operations 1994 $65,000 $ 2,500 $8,000 $11,250
John A. Whiteside (1) 1995 $84,144 $10,000 $ 0 $6,250
Chief Financial Officer
Donald G. Velardi (1) 1995 $67,192 $ 7,000 $ 0 $6,250
Director of Information Services
</TABLE>
(1) Compensation data for these directors is provided in only the years for
which they served as directors the entire fiscal year.
All officers serve at the discretion of the board of Directors and are
appointed to their respective offices for one year term.
(2) Details of stock options granted to, exercised and held by each individual
are shown on page 9 in the Proxy Statement filed on December 22, 1995 for
the January 26, 1996 Annual meeting.
During the fiscal year 1995 each Director was paid $1,000 for each board
meeting attended. All Directors attend at least 75% of their scheduled Board
Meetings and meetings held by Committees of which they were members.
36
<PAGE>
ITEM 12 - SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS
(AS NOVEMBER 15, 1995)
<TABLE>
<CAPTION>
Title of Name and Address of Amount and Nature of Percent of
Class Beneficial Owner Beneficial Ownership (1) Class (1)
- - -------- ------------------- ------------------------ ----------
<S> <C> <C> <C>
Common Dominic P. Toscani (2) 1,066,998 28.7
Stock and Nancy C. Toscani
122 Kissel Road
Burlington, NJ 08016
Common Frank A. Mattei 1,261,185 34.0
Stock 1016 Mercer Street
Cherry Hill, NJ 08034
Common The Caritas Foundation (3) 359,215 9.7
Stock 700 Hobbs Road
Wayne, PA 19087
Common FMR Corporation 238,500 6.4
Stock 82 Devonshire Street
Boston, MA 02109
</TABLE>
(1) Based on 3,715,317 shares outstanding and 238,000 options currently
exercisable on November 15, 1995.
(2) Includes 955,947 shares personally held; 34,306 shares held by Paris
Business Forms, Inc., Profit Sharing Plan of which Mr. Toscani is the Plan
Trustee; 14,745 shares held by Toscani Investment Company, a family
partnership; and 62,000 options exercisable as of November 15, 1995.
(3) The Caritas Foundation, a tax exempt organization formed under Section
501(C)(3) of the Internal Revenue Code of 1954, as amended, was organized
in 1984 by Dominic P. Toscani, Sr. to promote the objectives of free
enterprise and to support individual freedom. At the present time Reverend
Peter Toscani, O.S.A., is sole trustee of the foundation.
37
<PAGE>
SECURITY OWNERSHIP OF MANAGEMENT
AS OF NOVEMBER 15, 1995
<TABLE>
<CAPTION>
Title of Amount and Nature of Percent of
Class Name of Beneficial Owner Beneficial Ownership (1) Class (1)
- - -------- ------------------------ ------------------------ ----------
<S> <C> <C> <C>
Common Dominic P. Toscani, Sr. 1,066,998 (2) 28.7
Stock President, Treasurer,
and Chairman of the
Board of Directors
Common Dominic P. Toscani, Jr. 101,210 (3) 2.7
Stock Senior Vice President
and Secretary
Common Gerard M. Toscani 100,487 (3) 2.7
Stock Senior Vice President
Common Frank A. Mattei 1,261,185 34.0
Stock Director
Common Oscar Tete 4,102 *
Stock Director
Common Palmer E. Retzlaff 4,000 *
Stock Director
Common All Directors and 2,951,197 79.4
Stock Officers as a group
</TABLE>
* Less than 1%.
(1) The total shares used for this calculation is as of November 15, 1995, and
is based on 3,715,317 shares outstanding and 238,000 options exercisable
as of November 15, 1995.
(2) Includes 955,947 shares personally held; 34,306 shares held by Paris
Business Forms, Inc. Profit Sharing Plan of which Mr. Toscani is Plan
Trustee; 14,745 shares held by Toscani Investment Company, a family
partnership; and 62,000 options exercisable as of November 15, 1995.
(3) Includes 62,000 options exercisable as of November 15, 1995.
ITEM 13 - CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
There are no other material relationships or transactions which qualify
for disclosure under this caption.
38
<PAGE>
PART IV
ITEM 14 - EXHIBITS, FINANCIAL STATEMENT SCHEDULES, AND REPORTS ON FORM 8-K
This consolidated financial statements and related schedules filed as part of
this Annual Report on Form 10-K are included in Part II, Item 8.
EXHIBITS:
The following exhibits (with the exception of Exhibit 3.4, 10.5(b), 10.7 And
22(a)) are incorporated by reference to the Company's registration statement on
Form S-18 (no.-3-3344-W) filed February 13, 1986 with the Securities and
Exchange Commission and effective march 25, 1986. Exhibit 3.4, 10.5(b) And 10.7
are incorporated by reference to the Company's fiscal 1989 Form 10-K filed with
the Securities and Exchange Commission on December 19, 1989. Exhibit 22(a) is
incorporated by reference to the Company's fiscal 1990 Form 10-K filed with the
Securities and Exchange Commission on December 27, 1991.
<TABLE>
<S> <C>
3.1 Articles of Incorporation of the Company.
3.2 Amendment to Articles of Incorporation, dated January 6, 1986.
3.3 Amendment to Articles of incorporation, dated January 7, 1986.
3.4 By-laws of Company, as amended.
4.2(a) Form of Warrant to Purchase Common Stock of Company.
10.5 Company's Profit Sharing Plan, dated October 1, 1979.
10.5(a) Amendment to Profit Sharing Plan, dated October 2, 1985.
10.5(b) Amendment to Profit Sharing Plan, dated October 1, 1986.
10.6 Company's Stock Option Plan, dated October 1, 1985.
10.7 Line of Credit (loan agreement) of $2,000,000 from the Fidelity
Bank.
10.9 Bucks County Industrial Development Authority Loan Agreement for
1,500,000 dated April 10, 1985.
10.9(a) Letter Amendment, dated March 4, 1986 from Special Counsel to
Fidelity Bank.
10.9(b) Letter Amendment, dated March 5, 1986 from Fidelity Bank to
Special Counsel.
10.10 New Jersey Economic Development Authority Note for 3,000,000 by
Company, dated September 10, 1985.
10.10(a) Letter Agreement, dated March 4,1986 from Special Counsel to
Fidelity Bank.
10.10(b) Letter Amendment dated March 5, 1986 from Fidelity Bank to
Special Counsel.
10.10(c) Letter dated, March 24, 1986 from Special Counsel to Fidelity
Bank with respect to the New Jersey Economic Development
Authority Loan.
22(a) List of Subsidiaries.
</TABLE>
REPORTS ON FORM 8-K
None.
39
<PAGE>
SIGNATURES
Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange
Act of 1934, the registrant has duly caused this report to be signed on behalf
by the undersigned, thereunto duly authorized.
PARIS BUSINESS FORMS, INC.
Date: ____________________ By: ______________________________________
Dominic P. Toscani, Sr.,
(President, Chairman Board of Directors)
Date: ____________________ By: ______________________________________
John A. Whiteside
(Chief Financial Officer)
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 and on the dates indicated.
SIGNATURES
<TABLE>
<S> <C>
_______________________________________ _________________________________________
Dominic P. Toscani, Sr. (Date) Frank A. Mattei (Date)
(President, Chairman Board of Directors) (Director)
_______________________________________ _________________________________________
John A. Whiteside (Date) Palmer E. Retzlaff (Date)
(Chief Financial Officer) (Director)
_______________________________________ _________________________________________
Dominic P. Toscani, Jr. (Date) Oscar Tete (Date)
(Director) (Director)
_______________________________________ _________________________________________
Gerard M. Toscani (Date) John V. Petrycki (Date)
(Director) (Director)
</TABLE>
40
<TABLE> <S> <C>
<PAGE>
<ARTICLE> 5
<S> <C>
<PERIOD-TYPE> 12-MOS
<FISCAL-YEAR-END> SEP-30-1995
<PERIOD-START> OCT-01-1994
<PERIOD-END> SEP-30-1995
<CASH> 4,911,031
<SECURITIES> 3,974,112
<RECEIVABLES> 6,044,071
<ALLOWANCES> 505,379
<INVENTORY> 17,347,848
<CURRENT-ASSETS> 34,314,977
<PP&E> 14,331,288
<DEPRECIATION> 7,531,110
<TOTAL-ASSETS> 41,188,268
<CURRENT-LIABILITIES> 19,059,733
<BONDS> 0
0
0
<COMMON> 15,751
<OTHER-SE> 21,092,371
<TOTAL-LIABILITY-AND-EQUITY> 41,188,268
<SALES> 64,916,361
<TOTAL-REVENUES> 64,916,361
<CGS> 52,965,236
<TOTAL-COSTS> 52,965,236
<OTHER-EXPENSES> 6,466,210
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 203,299
<INCOME-PRETAX> 5,281,616
<INCOME-TAX> 1,830,229
<INCOME-CONTINUING> 3,451,387
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 3,451,387
<EPS-PRIMARY> .91
<EPS-DILUTED> .91
</TABLE>
