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FORM 10-Q
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
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Quarterly Report Under Section 13 or 15(d) of the
Securities Exchange Act of 1934
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For Quarter Ended Commission File
March 31, 1995 Number 0-15464
RADVA CORPORATION
(Exact name of registrant as specified in its charter)
VIRGINIA 54-0715892
(State of Incorporation) (IRS Employer
Identification Number)
Drawer 2900 FSS
Radford, Virginia 24143
(Address of principal executive offices)
Registrant's telephone number, including area code (703) 639-2458
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 and (2) has been subject to such filing
requirements for the past 90 days.
Yes No X
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At October 9, 1995, there were 3,742,060 shares of Registrant's Common Stock,
$.01 par value per share, outstanding.
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RADVA CORPORATION
INDEX
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Page
Number
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PART I. FINANCIAL INFORMATION:
Item 1. Financial Statements
Balance Sheets,
December 31, 1994 and March 31, 1995 3
Statements of Operations, Three Months
Ended March 31, 1994 and March 31, 1995 4
Statements of Cash Flows, Three Months
Ended March 31, 1994 and March 31, 1995 5
Notes to Financial Statements 6-7
Item 2. Management's Discussion and Analysis of
Financial Condition and Results of Operations 8
PART II. OTHER INFORMATION 9
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RADVA CORPORATION
Balance Sheets
(In Thousands)
<TABLE>
<CAPTION>
March 31 December 31
ASSETS 1995 1994
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<S> <C> <C>
Current assets:
Cash.................................. $ 34 $ 189
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Accounts and notes receivable......... 1,541 1,966
Less allowance for doubtful accounts.. 290 275
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Net receivables....................... 1,251 1,691
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Inventories:
Finished goods...................... 528 443
Work in process..................... 101 43
Raw materials and supplies.......... 307 260
Machinery inventory................. 341 240
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Total inventories................... 1,277 986
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Prepaid expenses...................... 117 119
Other current assets.................. 39 30
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Total current assets............ 2,718 3,015
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Property, plant & equipment, at cost..... 8,069 8,160
Less accumulated depreciation......... 4,590 4,593
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Net property, plant & equip..... 3,479 3,567
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Investment in RADOSLAV Joint Venture..... 336 336
Trademark rights......................... 349 367
Accounts receivable - noncurrent......... 58 58
Note receivable-noncurrent............... 484 488
Other assets............................. 496 487
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$ 7,920 $ 8,318
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LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Cash overdraft........................ $ 69 $ -
Current installments of long-term debt 373 373
Notes payable......................... 1,739 1,294
Accounts payable...................... 1,420 1,790
Accrued expenses...................... 521 483
Income taxes payable.................. 10 10
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Total current liabilities...... 4,132 3,950
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Long-term debt, excluding current
installments.......................... 1,415 2,011
Stockholders' equity:
Common stock of $.01 par value.
Authorized 10,000,000 shares; issued
and outstanding 3,742,060.......... 37 37
Additional paid-in capital............ 4,176 4,176
Retained earnings..................... (1,840) (1,856)
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Total stockholders' equity... 2,373 2,357
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$ 7,920 $ 8,318
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</TABLE>
See accompanying notes to financial statements.
3
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RADVA CORPORATION
Statements of Operations
Three Months Ended March 31
(In Thousands, except per share data)
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<CAPTION>
1995 1994
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Net Revenues:
Manufacturing net revenues......... $ 2,562 $ 2,269
Licensing & machinery sales........ 179 -
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Net revenues....................... 2,741 2,269
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Cost and expenses:
Cost of sales...................... 1,981 1,799
Shipping and selling............... 290 277
General and administrative......... 372 292
Research and development........... 11 1
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2,654 2,369
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Operating income (loss)............ 87 (100)
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Other income (deductions):
Interest expense................... (77) (63)
Revenue from the discounted
satisfaction of notes payable.... - 229
Other.............................. 6 5
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(71) 171
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Earnings before income taxes.......... 16 71
Income tax expense.................... - -
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Net earning (loss).................... $ 16 $ 71
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Earnings (loss) per common share...... $ .00 $ .02
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</TABLE>
See accompanying notes to financial statements.
4
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RADVA CORPORATION
Statements of Cash Flows
Quarters Ended March 31
(In Thousands)
<TABLE>
<CAPTION>
1995 1994
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<S> <C> <C>
Cash flows from operating activities:
Net income..................................... $ 16 $ 71
Adjustments to reconcile net income to net cash
provided by operating activities:
Depreciation................................... 96 101
Amortization................................... 20 20
Change in assets and liabilities:
(Gain) or loss on sale of equipment ...... (142) -
Decrease (Increase) in net receivables.... 440 ( 63)
Decrease (Increase) in inventories........ (291) (257)
Decrease (Increase) in prepaid expenses... 2 6
Increase in other current assets.......... (9) (21)
Decrease (Increase) in other assets....... (7) (10)
Increase (Decrease) in cash overdrafts ... 69 -
Increase (Decrease) in accounts payable... (370) (16)
Increase (Decrease) in accrued expenses... 38 52
Increase in deferred revenue.............. - 213
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Total adjustments....................... (154) 25
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Net cash from operating activities..... (138) 96
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Cash flows from investing activities:
Proceeds from sale of equipment................ 179 -
Capital expenditures for equipment and other
long-term assets............................ (45) (30)
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Net cash from investing activities.... 134 (30)
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Cash flows from financing activities:
Proceeds from notes payable.................... - 513
Principal payments under notes payable......... (54) (14)
Proceeds from long-term debt................... - -
Principal payments under long-term debt........ (97) (570)
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Net cash from financing activities.... (151) (71)
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Net increase (decrease) in cash................... (155) (5)
Cash at January 1................................. 189 7
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Cash at March 31.................................. $ 34 $ 2
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</TABLE>
See accompanying notes to financial statements.
5
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RADVA CORPORATION
Notes to Financial Statements
March 31, 1995
(1) General
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The financial statements conform to generally accepted accounting principles
and to general industry practices. The financial statements are unaudited.
However, in the opinion of management, all adjustments which are normal and
necessary for a fair presentation of the financial statements have been
included.
(2) Property, Plant and Equipment
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<S> <C>
A summary of property, plant and equipment follows:
Land and improvements............................. $ 295,904
Buildings and improvements........................ 2,809,121
Machinery and equipment........................... 4,114,080
Transportation equipment.......................... 425,551
Office equipment.................................. 424,696
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$8,069,352
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</TABLE>
(3) Accrued Expenses
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Accrued expenses are comprised of the following:
Payroll and employment benefits................... $ 245,196
Interest.......................................... 56,951
Other............................................. 218,802
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$ 520,949
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</TABLE>
(4) Notes Payable
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Demand note, collateralized by certain
accounts receivable and inventory.
Interest at prime plus 4%......................... $ 1,227,203
Unsecured demand note payable.................. 500,000
Unsecured notes payable to stockholder......... 12,107
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$ 1,739,310
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</TABLE>
6
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RADVA CORPORATION
Notes to Financial Statements
March 31, 1995
(5) Long-term Debt
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<S> <C>
A summary of long-term debt follows:
Installment note payable to stockholders due in
monthly installments of $10,000, plus interest at
prime plus one half percent. $ 210,000
Installment notes payable to stockholder, due in
monthly installments of $4,588, including interest
at 7%, collateralized by a deed of trust on
Portsmouth, Virginia real estate. 260,009
Installment notes payable in aggregate monthly installments
of $9,757, including interest, with various maturities
until May 1997; collateralized by equipment. Interest rates
ranging from 7.25% to 12.50%. 125,011
Installment note payable to bank, due in monthly
installments of $5,300, including interest at
8.75% with a final balloon payment in July 1994. 253,182
Installment note payable to bank, due in monthly installments
of 31,225 Austrian shillings, including interest at 12% 16,834
Installment note payable due in monthly installments of
$279, including interest at 8.125% with a final balloon
payment in August 1998, collateralized by a deed of trust
on certain real estate. 31,886
Installment note payable, due in monthly installments of
$1,250, plus interest at prime plus 2%, unsecured. 11,250
Installment note payable to bank, due in monthly
installments of $941, including interest at 9%,
collateralized by a deed of trust on real estate. 86,576
Industrial Development Authority of the City of
Radford, Virginia, due in monthly installments of
$8,592, including interest at 7.75%, collateralized
by a deed of trust on real estate at 609 Rock Road,
Radford Virginia 720,309
Industrial Development Authority of the City of
Radford, Virginia, due in monthly installments of
$674, including interest at 7%, collateralized by
a second deed of trust on real estate at 609 Rock
Road, Radford, Virginia 72,820
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Total long-term debt $1,787,877
Less current installments of long-term debt 372,876
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Long-term debt, excluding current installments $1,415,001
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</TABLE>
7
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ITEM 2 - MANAGEMENT'S DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS
RESULTS OF OPERATIONS
Net earnings were down $55,000 for the quarter ended March 31, 1995 compared to
the quarter ended March 31, 1994. The primary cause of this reduction in
earnings was the recording of $229,000 in earnings from a negotiated payoff of
notes payable in the first quarter of 1994 without comparable income in the
first quarter of 1995. However, the Company's Shape Molding Division, whose
primary products are packaging materials, recorded increased earnings of
$216,000, while licensing and machinery sales also recorded increased earnings
of $133,000. The Company's Thermastructure Panel and Door Core Divisions
recorded decreased earnings of $129,000, which was primarily attributable to
losses in the Door Core Division.
Manufacturing net revenues increased $293,000, from $2,269,000 in the quarter
ended March 31, 1995 compared to $2,562,000 in the quarter ended March 31,
1994. This was almost entirely a result of increased sales in the Company's
Shape Molding Division.
Cost of sales, as a percent of manufacturing net revenues, decreased 2.0%, from
79.3% for the quarter ended March 31, 1994 to 77.3% for the quarter ended March
31, 1995. This was primarily the result of reduced labor, utility and supply
costs within the Shape Molding Division only partly offset by increased cost of
materials.
Shipping and selling expenses were up only moderately, $13,000, attributable to
increased sales. However, general and administrative expenses were up $80,000.
While many different general and administrative cost categories increased, some
of the larger increases were: salaries allocated to the License and Machinery
Division, $23,000; bank charges, $13,000; and corporate travel, $10,000.
LIQUIDITY AND CAPITAL RESOURCES
The Company had a working capital deficiency of $1,414,000 at March 31, 1995.
The Company earned net profits of $524,000, $93,000, $514,000, and $223,000 in
1994, 1993, 1992, and 1991, respectively. The Company is working to improve
manufacturing efficiencies and is pursuing various options, such as alternative
sources of financing and sales of licenses and distributorship fees. The
Company is also working on a refinancing package, which, if successful, will
significantly reduce the working capital deficiency.
The Company owns a 31% interest in a joint venture in Russia which calls for a
distribution of profits in hard currency when available. However, should hard
currency not be available, profit distributions will be effected through
commodity transfers and bartering arrangements. These arrangements may be
facilitated by a regional commodity exchange in Russia with which Radva
Corporation is affiliated.
The Company has a revolving credit arrangement under which it could borrow an
amount not to exceed the lower of $1,230,000 or the aggregate of $650,000 and
75% of qualified accounts receivable. The amount available to the Company
under this line of credit was $2,797 at March 31, 1995.
8
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PART II: OTHER INFORMATION
Item 1. Legal Proceedings
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See item 3 of the Company's Form 10-K for the fiscal year ended
December 31, 1994.
Item 2. Changes in Securities
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Not applicable.
Item 3. Defaults Upon Senior Securities
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Not applicable.
Item 4. Submission of Matters to a Vote of Securities Holders
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Not applicable.
Item 5. Other Information
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Not applicable.
Item 6. Exhibits and Reports on Form 8-K
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Not applicable.
Pursuant to the requirements of the Securities Exchange Act of
1934,this form 10-Q has been signed on behalf of the Registrant by
its Assistant Secretary/Treasurer who is authorized to sign on behalf
of the Registrant.
RADVA CORPORATION
/s/ WILLIAM F. FRY
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William F. Fry
Assistant Secretary/Treasurer
October 30, 1995
9
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<ARTICLE> 5
<CIK> 0000792984
<NAME> RADVA CORP.
<MULTIPLIER> 1000
<S> <C>
<PERIOD-TYPE> 3-MOS
<FISCAL-YEAR-END> DEC-31-1995
<PERIOD-START> JAN-01-1995
<PERIOD-END> MAR-31-1995
<CASH> 34
<SECURITIES> 0
<RECEIVABLES> 1,541
<ALLOWANCES> 290
<INVENTORY> 1,277
<CURRENT-ASSETS> 2,718
<PP&E> 8,069
<DEPRECIATION> 4,590
<TOTAL-ASSETS> 7,920
<CURRENT-LIABILITIES> 4,132
<BONDS> 1,415
<COMMON> 37
0
0
<OTHER-SE> 2,336
<TOTAL-LIABILITY-AND-EQUITY> 7,920
<SALES> 2,562
<TOTAL-REVENUES> 2,741
<CGS> 1,981
<TOTAL-COSTS> 2,654
<OTHER-EXPENSES> 0
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 77
<INCOME-PRETAX> 16
<INCOME-TAX> 0
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<EXTRAORDINARY> 0
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<NET-INCOME> 16
<EPS-PRIMARY> .00
<EPS-DILUTED> .00
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