<PAGE> 1
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 10-K
Annual Report Pursuant to Section 13 or 15 (d) of
The Securities Exchange Act of 1934
For the fiscal year ended December 31, 1995
Commission file number 0-15464
RADVA CORPORATION
(Exact name of registrant as specified in its charter)
Virginia 54-0715892
-------- ----------
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
Drawer 2900 First Street Station
Radford, Virginia 24143
(540) 639-2458
--------------------
Address, including zip code, and telephone number,
including area code, of registrant's principal executive offices)
Securities registered pursuant to Section 12(g) of the Act:
Common Stock, par value $.01 per share
--------------------------------------
(Title of class)
Indicate by check mark whether the registrant (1) has filed all reports
required to be filed by Section 13 or 15(d) of the Securities Exchange Act of
1934 during the preceding 12 months (or for such shorter period that the
registrant was required to file such reports), and (2) has been subject to such
filing requirements for the past 90 days.
Yes X No____________
Indicate by check mark if disclosure of delinquent filers pursuant to Item 405
of Regulation S-K (par. 229.405 of this chapter) is not contained herein, and
will not be contained, to the best of registrant's knowledge, in definitive
proxy or information statements incorporated by reference in Part III of this
Form 10-K or any amendment to this Form 10-K. [ ]
Aggregate market value of voting stock held by non-affiliates of the registrant
as of April 18, 1996 (see ITEM 5 for explanation of calculation): $1,068,406
Number of shares of common stock outstanding as of April 18, 1996: 4,104,727
<PAGE> 2
DOCUMENTS INCORPORATED BY REFERENCE
Part III incorporates information by reference to the registrant's proxy
statement for its annual meeting of stockholders scheduled for May 29, 1996.
DESCRIPTION OF BUSINESS
GENERAL DEVELOPMENT OF BUSINESS
RADVA Corporation (the "Company") was organized in 1962 as a Virginia
corporation to engage in the production of molded and fabricated products from
expandable polystyrene. Historically, the Company has specialized in the
production of customized expanded polystyrene packaging materials used to
protect products during shipment; however, the Company has developed a
composite building panel produced from expanded polystyrene and steel which it
sells under the trademark THERMASTRUCTURE. In November 1995, the Company sold
80% interest in its subsidiary, THERMASTRUCTURE Ltd., which manufactures the
building panels and has rights to market licensing rights to territories in the
United States not previously licensed. The Company continues to market
manufacturing rights to its patented building panel system in territories
outside of the United States. The Company also operates a Custom Mold Division
which produces aluminum molds to supply the tools and dies used in its
protective packaging business and manufactures specialized machinery used in
the production of THERMASTRUCTURE building panels.
INDUSTRY SEGMENTS
The Company's continuing operations includes three principal industry
segments: the manufacture of protective packaging and similar materials, the
manufacture of THERMASTRUCTURE building panels, and licensing and related
machinery sales. Each of these segments is discussed in note 16 to the
financial statements.
PRINCIPAL CLASSES OF PRODUCTS
The following table sets forth the approximate relative percentages of total
net revenues (after intersegment eliminations) generated by the principal
classes of products produced by the Company in each of its principal industry
segments for each of the past three fiscal years.
<TABLE>
<CAPTION>
1995 1994 1993
---- ---- ----
Class of Product
----------------
<S> <C> <C> <C>
PROTECTIVE PACKAGING AND SIMILAR MATERIALS
Protective Packaging 73.6% 68.9% 83.4%
THERMASTRUCTURE Building Panels
License fees & machinery sales 14.0% 10.5% 8.3%
Panel sales & related revenue 12.4% 20.6% 8.3%
------ ------ ------
100.0% 100.0% 100.0%
</TABLE>
PROTECTIVE PACKAGING PRODUCTS
The Company's protective packaging products include inserts and containers
used in shipping products such as electronic equipment and medical supplies.
The products are designed to reduce vibration, absorb shock, and provide
insulation against temperature extremes in accordance with customer
specifications. The products are manufactured at plants in Portsmouth and
Radford, Virginia.
2
<PAGE> 3
In general, the Company's protective packaging products are molded or
fabricated from expandable polystyrene - a thermoplastic which can be expanded
to a pre-selected density and, when injected into a mold and subjected to
controlled heat and pressure, can be formed to practically any shape. The
Company also has the capability to produce protective packaging products from
other cellular plastic materials such as polyethylene and polypropylene and in
July 1985, entered into an agreement with the Atlantic Richfield Company
("ARCO") to purchase a copolymer resin marketed by ARCO under the trademark
ARCEL. The copolymer resin is substantially more expensive than polystyrene
resin but produces a product which can meet customer requirements for reusable
handling units and higher customer specifications for durability. In addition
to custom molded protective packaging products, the Company produces
proprietary packaging products for which the Company owns the molds.
The Company generally sells its protective packaging products to customers
located within 200 miles of its manufacturing plants. The products are shipped
to customers in trucks owned by the Company or by common carrier.
THERMASTRUCTURE BUILDING PANELS
The Company's THERMASTRUCTURE building panels are designed for use in the
construction of residential housing and commercial products. The panels are
manufactured from a composite of expanded polystyrene and steel and offer a
lightweight and durable alternative to traditional building materials such as
timber or metal. The panels can be used in the construction of load bearing
walls or interior partitions and in the manufacture of structural systems for
floors or roofs. The panels also offer substantial design flexibility as they
can be molded into conventional configurations or nonconventional shapes. In
order to promote acceptance of the panels and to demonstrate reliability of the
panels in various climatic conditions, the Company has constructed buildings
using the THERMASTRUCTURE system in various locations throughout the United
States. The Company operated panel manufacturing facilities in Radford,
Virginia and Agat, Guam. The Guam subsidiary was sold in October 1990. The
Company sold 80% interest in its division in Radford which manufactures the
panels in November 1995.
During 1992, the Company began shipping equipment to RADOSLAV, a Joint
Venture in which the Company owns a 31% interest, located at
Pereslavl-Zalessky, Russia, approximately 75 miles north of Moscow. RADOSLAV
produces THERMASTRUCTURE panels for sale in Russia and other European
countries. The Company and three Russian entities, Pereslavlstroy Trust,
Slavich Corporation, and Argamak Corporation are the primary joint venture
participants. The Joint Venture agreement called for the Company to contribute
technology, the right for RADOSLAV to produce THERMASTRUCTURE panels under the
Company's trademarks and U.S. currency that is included in the investment
account. The Russian principals contributed a manufacturing facility of
approximately 24,000 square feet and a sum of Russian currency.
RAW MATERIALS AND SUPPLIERS
The principal raw material used by the Company in the production of
protective packaging products is expandable polystyrene resin. This material
may be obtained from several major suppliers. In addition, the Company uses
several copolymer resins in the manufacture of engineered expanded foam
protective packaging. Although the copolymer resins currently used by the
Company are only available under an agreement with ARCO, similar copolymer
resins may be obtained from other suppliers.
The principal raw materials used by the Company in the production of
THERMASTRUCTURE building panels are expandable polystyrene resin, adhesives,
and coil steel. These materials are available from numerous suppliers in the
United States and elsewhere.
PATENTS AND TRADEMARKS
The Company holds three United States patents relating to the THERMASTRUCTURE
system and certain corresponding patents in Canada, Mexico, and Great Britain.
These patents cover the THERMASTRUCTURE building panels, the manufacture of
THERMASTRUCTURE building panels and a method of combining THERMASTRUCTURE
building panels to construct a house. The Company pursues a policy of filing
for patents on any product development that it considers to be significant.
The Company has registered the trademark THERMASTRUCTURE and WALLFRAME(TM)
in the United States and has applied for registration in Great Britain.
SEASONALITY
The Company ordinarily experiences a reduction in the manufacture and sale of
protective packaging products during the winter months after filling holiday
season orders. The demand for THERMASTRUCTURE building panels is affected by
the level of activity in the construction industry and housing market and can
be expected to decrease during the fall and winter seasons when there has
historically been a decrease in construction activity and housing sales.
3
<PAGE> 4
CUSTOMERS
The Company's protective packaging business has a broad base of customers;
however, one customer accounted for approximately 10.5% of protective packaging
revenues in 1995.
BACKLOG
The Company had approximately $713,000 in backlog orders for protective
packaging products as of December 31, 1995, compared to backlog orders of
approximately $747,000 as of December 31, 1994. Although the Company believes
that such backlog orders are firm, the purchase orders for protective packaging
products generally may be cancelled without cause by the customer. The Company
expects to fill all of these orders during 1996.
COMPETITION
The protective packaging business is highly competitive, and some of the
Company's competitors are large and have greater financial and other resources
than the Company. The Company's competition in protective packaging products
is primarily from four local and regional manufacturers with plants within or
close to the Company's market area. The principal elements of competition in
the sale of protective packaging products are price and the ability to service
customers. Because of shipping costs and other factors, the Company has found
it difficult to compete for protective packaging business beyond a 200 mile
radius of the point of manufacture. The Company believes that its custom mold
division and technical design facility give it an advantage over competitors
within its market area who do not have the capacity to design and produce their
own molds for their protective packaging customers.
RESEARCH AND DEVELOPMENT
The Company maintains two laboratory and testing facilities within its
manufacturing plant in Radford, Virginia. The laboratory and testing
facilities, which consist of 2,000 square feet and 1,800 square feet,
respectively, are used for product testing, development of new products, and
quality control evaluations.
REGULATION
The Company is subject to state and federal laws and regulations affecting
its business, including those promulgated under the Occupational Safety and
Health Act ("OSHA") and by the Environmental Protection Agency. The Company's
manufacturing facilities are subject to compliance with comprehensive OSHA
standards. The Company believes that its manufacturing facilities and
processes are currently in compliance with OSHA and does not anticipate capital
expenditures for environmental control facilities or for compliance with OSHA
standards during 1995. The Company does not believe that its compliance with
federal and state environmental regulations has had or will have a material
effect on its capital expenditures, earnings, or competitive position.
EMPLOYEES
The Company employs approximately 140 persons. None of the Company's
employees is represented by a labor union, and the Company believes that its
employee relations are good.
EXECUTIVE OFFICERS
The following table identifies and sets forth certain information about the
executive officers of the Company.
Name Age Position and Year of Election
---- --- -----------------------------
Luther I. Dickens 63 President (1965)
James M. Hylton 62 Secretary and Treasurer (1969)
4
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ITEM 2. PROPERTIES
REAL ESTATE
The real estate owned or leased by the Company and used in the Company's
primary business operations is described below.
(1) The Company owns approximately 10 acres of land in Radford, Virginia,
and a 71,000 square foot building located on the Radford property. The
building includes approximately 5,000 square feet of office space and
approximately 66,000 square feet of manufacturing space. The Radford property
is subject to deeds of trust which had outstanding balances as of December 31,
1995, aggregating approximately $3,000,000.
(2) The Company owns approximately 7 acres of land in Portsmouth, Virginia,
and a 44,000 square foot building located on the Portsmouth property. The
building includes approximately 2,000 square feet of office space and
approximately 42,000 square feet of manufacturing space. The Portsmouth
property is subject to a deed of trust which had an outstanding balance as of
December 31, 1995 of approximately $3,000,000.
(3) The Company leases approximately 12,000 square feet of manufacturing
space in Radford, Virginia, under a month-to-month lease which requires monthly
rental payments of $985. The property is used by the Company's Custom Mold
Division and is leased to the Company by a partnership in which Mr. Dickens and
Dr. Hylton are general partners.
(4) The Company rents approximately 6,000 square feet of office space in
Radford, Virginia, under a lease which requires monthly rental payments of
$3,700. The property is rented to the Company by a partnership in which Mr.
Dickens and Dr. Hylton have an interest.
PERSONAL PROPERTY AND EQUIPMENT
The personal property and equipment at the main Radford plant and the
Portsmouth plant consist principally of machinery and equipment used to produce
expanded polystyrene products. The personal property and equipment at the
Custom Mold Division in Radford consists of machine shop tools and pattern shop
tools and related aluminum foundry equipment. The personal property and
equipment at the THERMASTRUCTURE Machine Division in Radford consist of
machine shop tools and welding and electronic test equipment used primarily in
the construction of THERMASTRUCTURE panel molding machines.
The Company owns 4 trucks and 12 trailers and leases 6 tractors which it uses
to ship products to customers. The Company owns 1 van and 8 cars which it uses
principally for sales and sales service functions. The Company believes that
its present equipment is adequate, well maintained, and in good operating
condition.
ITEM 3. LEGAL PROCEEDINGS
None.
ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
None.
5
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PART II
STOCK INFORMATION
ITEM 5. MARKET FOR REGISTRANT'S COMMON EQUITY AND RELATED STOCKHOLDER MATTERS
MARKET AND PRICE INFORMATION
The Company's common stock, par value $.01 per share (the "Common Stock"),
has been traded in the over-the-counter market since June 1986. The following
table provides the high and low bid quotations with respect to shares of the
Common Stock for the periods indicated as reported by the Dow Jones Historical
Stock Quote Reporter Service.
<TABLE>
<CAPTION>
1995 1994 1993
---- ---- ----
High Low High Low High Low
---- --- ---- --- ---- ---
<S> <C> <C> <C> <C> <C> <C>
First
Quarter 9/16 7/16 1 1/8 1 7/8 3/4
Second
Quarter 7/8 3/4 5/8 9/16 3/4 5/8
Third
Quarter 1 1/8 3/4 13/16 3/4 5/8 3/8
Fourth
Quarter 1 1/8 1 1 1/4 7/8 1/2 1/4
</TABLE>
The foregoing quotations of high and low bid prices represent prices between
dealers and do not include retail mark-up, mark-down, or commissions. They do
not necessarily represent actual transactions. There was no established public
trading market for the Common Stock before June 1986.
The aggregate market value of the voting stock held by non-affiliates of the
Company as of April 18, 1996 shown on the facing page of this report was
calculated as follows: the number of shares beneficially owned by the officers
and directors of the Company as a group as of April 18, 1996 was subtracted
from 4,104,727, the total number of shares outstanding on that date, and the
resulting figure was multiplied by $.625, the average of the bid and asked
prices of the Company's stock in the over-the-counter market on April 18, 1996.
The foregoing calculation should not be deemed an admission that any of the
officers or directors of the Company is an "affiliate" of the Company.
NUMBER OF STOCKHOLDERS
As of April 18, 1996, there were 318 record holders of the Common Stock.
DIVIDENDS
The Company has not declared cash dividends on the Common Stock during its
three most recent fiscal years. The declaration and payment of dividends is
entirely within the discretion of the Board of Directors of the Company and
will depend upon the earnings, capital requirements, and financial condition of
the Company. The Company anticipates that it will retain earnings for the next
several years to finance the development of its business.
6
<PAGE> 7
ITEM 6. SELECTED FINANCIAL DATA
<TABLE>
<CAPTION>
SELECTED STATEMENTS OF
INCOME (LOSS) DATA: Years Ended December 31,
--------------------------------------------------------------
1995 1994 1993 1992 1991
---- ---- ---- ---- ----
(Dollar amounts in thousands except per share data)
<S> <C> <C> <C> <C> <C>
Net Revenues $10,777 $11,641 $10,405 $10,958 $9,034
Income (loss) from
continuing operations
before income taxes
and extraordinary
items 492 534 93 514 55
Income (loss) from
discontinued
operations -- -- -- -- 105
Income (loss) before
extraordinary items 482 524 93 339 139
Net income (loss) 482 524 93 514 223
Income (loss) per
common share before
extraordinary items .13 .14 .02 .09 .04
Net income (loss) per
common share .13 .14 .02 .14 .06
</TABLE>
<TABLE>
<CAPTION>
SELECTED BALANCE Years Ended December 31,
--------------------------------------------------------------
SHEET DATA: 1995 1994 1993 1992 1991
---- ---- ---- ---- ----
(Dollar amounts in thousands)
<S> <C> <C> <C> <C> <C>
Working capital $2,151 $ (865) $(1,805) $(1,390) $(1,072)
Net property, plant
and equipment 2,308 3,567 2,900 2,847 2,912
Total assets 7,998 8,318 7,206 7,503 6,683
Long-term debt
(including current
maturities) 3,075 2,383 1,515 1,600 1,996
Stockholders' equity 3,179 2,357 1,833 1,741 1,227
</TABLE>
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ITEM 7. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
RESULTS OF OPERATIONS
Results of Operations
The following table sets forth the percentage relationship that certain items
in the statements of operations bear to the net revenues of the Company for
each year during the five-year period ended December 31, 1995. Additional
financial information as to the Company's three industry segments is set forth
in note 16 to the financial statements.
<TABLE>
<CAPTION>
Years Ended December 31,
------------------------------------------------------
1995 1994 1993 1992 1991
---- ---- ---- ---- ----
<S> <C> <C> <C> <C> <C>
Manufacturing net revenues 86.0% 89.5% 91.7% 86.6% 99.6%
Licensing & related
machinery sales 14.0 10.5 8.3 13.4 .4
------ ------ ------ ------ ------
Net revenues 100.0% 100.0% 100.0% 100.0% 100.0%
------ ------ ------ ------ ------
Cost and expense:
Cost of sales 69.4 70.2 74.1 70.2 71.0
Shipping and sales 9.0 9.9 12.7 11.9 13.6
General & administrative 13.5 13.2 10.2 10.7 11.0
Research & development 0.3 0.0 0.0 .2 .1
------ ------ ------- ------ ------
92.2 93.3 97.0 93.0 95.7
------ ------ ------ ------ ------
Operating income (loss) 7.8 6.7 3.0 7.0 4.3
------ ------ ------ ------ ------
Other income (deductions)
Interest expense (2.7) (2.5) (2.5) (2.6) (4.4)
Interest income .1 .1 .3 .2 .5
Other (.0) .3 .1 .1 .2
------ ------ ------ ------ ------
(2.6) (2.1) (2.1) (2.3) (3.7)
------ ------ ------ ------ ------
Income (loss) from
continuing operations
before income taxes and
extraordinary item 4.6 4.6 .9 4.7 .6
Income tax expense (.1) .1 (.0) (1.6) ( .2)
------ ------ ------ ------ ------
Income (loss) from
continuing operations
before extraordinary
item 4.5 4.5 .9 3.1 .4
Income (loss) from
discontinued operations .0 .0 .0 .0 1.2
------ ------ ------ ------ ------
Income (loss) before
extraordinary item 4.5 4.5 .9 3.1 1.6
Extraordinary items .0 .0 .0 1.6 .9
------ ------ ------ ------ ------
Net income (loss) 4.5% 4.5% .9% 4.7% 2.5%
====== ====== ====== ====== ======
</TABLE>
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1995 COMPARED TO 1994
The Company experienced some very positive developments in 1995. The long
sought bank refinancing was achieved in December. The new financing, along
with profits and some additional equity investment, was responsible for a shift
in working capital from a negative $865,000 at December 31, 1994 to a positive
$2,151,000 at December 31, 1995. This is a dramatic swing in working capital
and is expected to enable the Company to operate more efficiently in 1996.
Another development, although not substantially reflected in 1995 operations,
was the signing of a supply contract with one of the Company's largest shape
molding/packaging customer. As a result, sales are expected to increase
significantly in 1996.
Our Portsmouth, Virginia plant had an outstanding year in product improvement
in 1995. As evidence of this good work, we were recently notified by Canon of
Virginia that RADVA was the winner of one of their Outstanding Supplier awards
for which the Company is justly proud. RADVA Corporation was one of only 15
organizations of 110 major suppliers so selected!
The last major development that needs to be discussed before comparing 1995
revenues and expenses to 1994 revenues and expenses is the sale of 80% interest
in the previously wholly owned subsidiary, THERMASTRUCTURE Ltd. The Company
has been somewhat over extended in the past, making it difficult to effectively
promote and market its THERMASTRUCTURE panel. Therefore, in November, 1995,
the Company negotiated the sale of a license for all areas in the United States
not previously licensed to an organization with a strong marketing background
and the financial strength and commitment to effectively market the panel. The
sale also included THERMASTRUCTURE molding equipment and a plant, net of the
mortgage liability. What was not included was the Company's machine
manufacturing division and international rights. Since management felt that it
was important for RADVA Corporation to maintain an equity position in the newly
organized Company, the sale was accomplished through the sale of 80% of the
stock of THERMASTRUCTURE, Ltd., after taking steps to include only the agreed
upon assets and license rights.
The Company's 1995 revenues of $10,777,000 were lower than 1994 revenues by
$864,000 representing a 7% decrease. This decrease consisted of the following
increases or (decreases) in 1995 as compared to 1994:
<TABLE>
<S> <C>
Shape Molding Division $ 207,000
Miscellaneous:
Gain on discounted note payoff (229,000)
Other miscellaneous (4,000)
THERMASTRUCTURE Division:
Panel sales (1,252,000)
Door Core sales (438,000)
RADVA RU supply sales 566,000
License and machinery sales 286,000
----------
$ (864,000)
</TABLE>
Increased sales by the Shape Molding Division were primarily a result of
price increases however more dramatic increases in sales are expected in 1996.
An unusual decrease resulted from a Company negotiated discount payoff of a
note in 1994. This payoff resulted in a $229,000 gain not repeated in 1995.
The reduction in panel sales was primarily due to unusually large sales of
panels shipped to Mexico in 1994, not matched by similar sales in 1995. The
reduction of these sales was partly a result of the licensee to whom the sales
were made having purchased panel manufacturing equipment from the Company in
1995. The reduced door core sales reflects the Company's decision to
discontinue that product line. The Company began a new project in 1995,
identified above as RADVA RU supply sales. These are building materials
purchased in the United States and shipped to Russia to contractors using
THERMASTRUCTURE panels manufactured by the Company's Russian joint venture.
9
<PAGE> 10
1994 COMPARED TO 1993
The Company's 1994 revenues of $11,641,000 were greater than 1993
revenues by $1,236,000, representing an approximate 12% increase. This
increase consists of the following changes among divisions or profit centers:
<TABLE>
<S> <C>
Shape Molding Division
Shape Molding Division $ (859,000)
Thermastructure Division:
Panel sales 1 ,267,000
Door core sales 279,000
License and machinery sales 549,000
-----------
$ 1,236,000
===========
</TABLE>
Within the Shape Molding Division, reduced sales to several large
customers resulted in reduced total revenues. However, this loss of revenue is
expected to be reversed in 1996 due to the implementation of a new and
significant sales contract with the Company's largest customer.
The increase in Thermastructure panel sales was almost entirely the
result of one large project with one of the Company's licensees. Increases in
license and machinery sales resulted from the booking of a $1,000,000 license
in December, 1994. The agreement originally called for a much larger fee for
all unsold rights (see note 3), however the areas covered by the agreement are
being reduced commensurate with reduced payments.
After eliminating the cost of license and machinery sales of $152,000
and $433,000 in 1994 and 1993, respectively, cost of sales, as a percentage of
manufacturing revenues increased .8%, to 77.0% in 1994 from 76.2% in 1993.
Although the percentage change was small, there were two significant
differences. The cost of sales percentage for Thermastructure panels was
dramatically reduced in 1994, primarily as a result of an approximate
$1,200,000 sales contract with a licensee, and cost of sales in 1993 were
reduced by a $230,000 discounted payoff of amounts owing to a raw material
supplier.
As a percentage of manufacturing revenues, shipping and selling
expenses decreased 2.9% and general and administrative expenses increased 3.6%.
A portion of these changes were caused by a shifting of cost from shipping and
selling to general and administrative expenses in such areas as phone expenses
and wages. In addition to these allocation shifts, general and administrative
travel increased $65,000, from $32,000 in 1993 to $97,000 in 1994, representing
.6% of 1994 manufacturing revenues.
1993 COMPARED TO 1992
The Company's 1993 revenues of $10,405,000 were lower than 1992
revenues by $553,000 or 5%. This reduction is a result of decreased protective
packaging and license and machinery sales of $339,000 and $605,000,
respectively, offset by increased THERMASTRUCTURE and related product sales of
$391,000. The reduction in license and machinery sales was primarily caused by
unusually large revenues of $1,097,000 being recorded in 1992 in connection
with the establishment of a joint venture in Russia. Increased THERMASTRUCTURE
and related product sales was the result of $426,000 sales of a new licensed
product in 1993.
After eliminating the cost of license and machinery sales of $433,000
and $780,000 in 1993 and 1992, respectively, cost of sales, as a percentage of
manufacturing revenue increased 3.4% to 76.3% in 1993. The most significant
change in cost of sale relationships occurred within the shape molding division
responsible for protective packaging and other shape molded products. This
division had an increase in its cost of sales percentage to 75.7% in 1993, from
71.9% in 1992, before a $231,000 cost reduction in 1993 as a result of a
discounted payoff of amounts owing on raw material purchases. The increase in
the shape molding cost of sales percentage appeared to be the result of a
general deterioration of the traditional relationships between revenues and
cost with significant percentage increases in labor, supplies, utilities, and
materials (before the negotiated reduction in amounts owing on raw material
purchases noted above).
Shipping and selling expense increased by .2% manufacturing net
revenues, while general and administrative expenses were down 1.3% of
manufacturing net revenues. Increases in selling expenses were held to a
minimum by reduced engineering salary expenses.
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IMPACT OF INFLATION
The Company's standard purchase order form allows it to increase the
price of its protective packaging products on 30 days' notice and, therefore,
to pass on increases in the cost of raw materials. A significant increase in
the rate of inflation and a concomitant increase in interest rates could
adversely affect the Company since a large portion of the Company's
indebtedness is linked to the prime interest rate.
LIQUIDITY AND CAPITAL RESOURCES
The Company earned net profits of $482,000, $524,000, $93,000,
$514,000, and $223,000 in 1995, 1994, 1993, 1992, and 1991, respectively. The
Company obtained a major refinancing package in 1995 which significantly
improved its working capital position from a negative $865,000 at December 31,
1994, to a positive working capital of $2,151,000 at December 31, 1995. This
financing package consisted of a $3,000,000 term loan and a $500,000 credit
line which had the full $500,000 available at December 31, 1995.
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.
RECENT ACCOUNTING DEVELOPMENT
The Financial Accounting Standards Board (FASB) has issued FASB No.
109, "Accounting for Income Taxes." The Company adopted FASB No. 109
beginning January 3, 1993. FASB No. 109 was implemented by the Company on a
prospective basis and did not have a material impact on the Company's financial
statements.
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ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA
Index to Financial Statements
- -----------------------------
<TABLE>
<CAPTION>
Page
----
<S> <C>
Independent Auditors' Reports..................................................... 13
Balance Sheets as of December 31, 1995 and 1994................................... 14-15
Statements of Operations for the Years Ended
December 31, 1995, 1994, and 1993.............................................. 16
Statements of Stockholders' Equity for the Years
Ended December 31, 1995, 1994, and 1993........................................ 17
Statements of Cash Flows for the Years
Ended December 31, 1995, 1994, and 1993........................................ 18-19
Notes to Financial Statements as of December 31,
1995, 1994, and 1993........................................................... 20-29
Index to Financial Statement Schedules
- --------------------------------------
Schedule V - Property, Plant and Equipment...................................... 30
Schedule VI - Accumulated Depreciation and
Amortization of Property, Plant, and Equipment................................ 31
Schedule VIII - Valuation and Qualifying Accounts................................ 32
</TABLE>
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PERSINGER & COMPANY, L.L.C.
CERTIFIED PUBLIC ACCOUNTANTS
203 W. GRAYSON STREET
GALAX, VIRGINIA 24333
TELEPHONE: 540-236-8135
FAX: 540-236-0797
INDEPENDENT AUDITOR'S REPORT
The Board of Directors and Stockholders
RADVA Corporation
We have audited the consolidated financial statements and the consolidated
financial statement schedules of RADVA Corporation and subsidiary as of and for
the years ended December 31, 1995 and 1994, as listed in the accompanying
index. These financial statements and financial statement schedules are the
responsibility of the Company's management. Our responsibility is to express
an opinion on these financial statements and financial statement schedules
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 RADVA Corporation
and subsidiary as of December 31, 1995 and 1994, and the results of their
operations and their cash flows for the years then ended in conformity with
generally accepted accounting principles. In addition, in our opinion, the
1995 and 1994 financial statement schedules referred to above, when considered
in relation to the basic financial statements taken as a whole, present fairly,
in all material respects, the information required to be included therein.
PERSINGER & COMPANY L.L.C.
Galax, Virginia
February 12, 1996
13
<PAGE> 14
RADVA CORPORATION AND SUBSIDIARY
CONSOLIDATED BALANCE SHEETS
DECEMBER 31, 1995 AND 1994
<TABLE>
<CAPTION>
1995 1994
<S> <C> <C>
ASSETS
Current assets:
Cash and cash equivalents (Notes 2 and 3) $ 349,946 $ 189,122
---------- ----------
Accounts and notes receivable (Notes 9 and 10) 1,630,776 1,465,545
Receivable - other (Note 5) - 500,000
Receivable - other (Notes 3 and 17) 1,272,308 -
Less allowance for doubtful accounts 203,251 204,670
---------- ----------
Net receivables 2,699,833 1,760,875
---------- ----------
Inventories (Notes 9 and 10):
Finished goods 374,595 442,537
Work-in-process 53,490 42,950
Raw materials and supplies 252,897 259,938
Machinery inventory 282,597 240,053
---------- ----------
Total inventories 963,579 985,478
---------- ----------
Prepaid expenses 90,238 118,984
Other current assets 31,843 30,238
---------- ----------
Total current assets 4,135,439 3,084,697
---------- ----------
Property, plant and equipment, at cost (Notes 6, 9 and 10) 6,451,212 8,160,035
Less accumulated depreciation and amortization 4,143,433 4,592,726
---------- ----------
Net property, plant and equipment 2,307,779 3,567,309
---------- ----------
Other assets, at cost, less accumulated amortization:
Investment in Radoslav Joint Venture (Note 7) 336,103 336,103
Investment in Thermastructure, LTD (Note 17) 210,224 -
Trademark right 295,128 367,193
Account receivable - noncurrent - 58,267
Note receivable - noncurrent 414,131 487,630
Other 298,727 416,414
---------- ----------
1,554.313 1,665,607
---------- ----------
$7,997,531 $8,317,613
========== ==========
</TABLE>
(continued)
14
<PAGE> 15
RADVA CORPORATION AND SUBSIDIARY
CONSOLIDATED BALANCE SHEETS (CONTINUED)
<TABLE>
<CAPTION>
1995 1994
<S> <C> <C>
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Current installments of long-term debt (Notes 3 and 10) $ 241,505 $ 372,876
Notes payable (Note 9) - 1,293,787
Accounts payable 1,267,242 1,790,115
Accrued expenses (Note 8) 465,793 483,570
Income taxes payable (Note 11) 10,385 9,688
----------- -----------
Total current liabilities 1,984,925 3,950,036
----------- -----------
Long-term debt, excluding current installments
(Notes 3 and 10) 2,833,239 2,010,187
----------- -----------
Total liabilities 4,818,164 5,960,223
----------- -----------
Commitments, contingencies and other matters
(Notes 5, 10, 14, and 17)
Stockholders' equity:
Common stock, par value $.01 per share; authorized
10,000,000 shares; issued 4,104,727 shares 41,047 37,421
Additional paid-in capital 4,511,939 4,175,565
Retained deficit (1,373,619) (1,855,596)
----------- -----------
Total stockholders' equity 3,179,367 2,357,390
------------ -----------
$ 7,997,531 $ 8,317,613
=========== ===========
</TABLE>
See notes to consolidated financial statements.
15
<PAGE> 16
RADVA CORPORATION AND SUBSIDIARY
CONSOLIDATED STATEMENTS OF OPERATIONS
YEARS ENDED DECEMBER 31, 1995, 1994 AND 1993
<TABLE>
<CAPTION>
1995 1994 1993
<S> <C> <C> <C>
Net revenues:
Manufacturing net revenues $ 9,266,527 $10,415,712 $ 9,540,937
Licensing and related machinery sales (Notes 5 and 17) 1,510,684 1,225,004 864,207
----------- ----------- -----------
10,777,211 11,640,716 10,405,144
----------- ----------- -----------
Costs and expenses:
Cost of sales 7,475,498 8,170,258 7,707,660
Shipping and selling expenses 972,200 1,147,203 1,324,740
General and administrative expenses 1,456,474 1,532,473 1,059,997
Research and development expenses 29,834 8,500 5,433
----------- ------------ -----------
9,934,006 10,858,434 10,097,830
----------- ------------ -----------
Operating income 843,205 782,282 307,314
----------- ------------ -----------
Other income (expense):
Interest expense (297,833) (294,981) (262,729)
Interest income 11,159 18,424 30,634
Other 4,635 19,141 14,953
----------- ------------ -----------
(282,039) (257,416) (217,142)
----------- ------------ -----------
561,166 524,866 90,172
----------- ------------ -----------
Gain (loss) on sale of assets:
Equipment 2,794 9,000 2,447
Real estate (44,015) - -
----------- ------------- ------------
(41,221) 9,000 2,447
----------- ------------- ------------
Equity in net income (loss) of
investee (27,583) - -
----------- ------------ ------------
Income before income taxes 492,362 533,866 92,619
Provision for income taxes (Note 11) 10,385 (9,688) -
----------- ------------- ------------
Net income $ 481,977 $ 524,178 $ 92,619
========== ============= ============
Income per common share:
Net income $ .13 $ .14 $ .02
========== ============= ============
</TABLE>
See notes to consolidated financial statements.
16
<PAGE> 17
RADVA CORPORATION AND SUBSIDIARY
CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY
YEARS ENDED DECEMBER 31, 1995, 1994 AND 1993
<TABLE>
<CAPTION>
ADDITIONAL RETAINED TOTAL
COMMON PAID-IN EARNINGS STOCKHOLDERS'
STOCK CAPITAL (DEFICIT) EQUITY
----------- ----------- ----------- ------------
<S> <C> <C> <C> <C>
Balance at December 31, 1992 $37,421 $4,175,565 $(2,472,393) $1,740,593
Net income - - 92,619 92,619
------- ---------- ------------- ----------
Balance at December 31, 1993 37,421 4,175,565 (2,379,774) 1,833,212
Net income - - 524,178 524,178
------- ---------- ------------- ----------
Balance at December 31, 1994 37,421 4,175,565 (1,855,596) 2,357,390
Stock issued 3,626 336,374 - 340,000
Net income - - 481,977 481,977
------- ---------- ------------- ----------
Balance at December 31, 1995 $41,047 $4,511,939 $(1,373,619) $3,179,367
======= ========== ============= ==========
</TABLE>
See notes to consolidated financial statements.
17
<PAGE> 18
RADVA CORPORATION AND SUBSIDIARY
CONSOLIDATED STATEMENTS OF CASH FLOWS
YEARS ENDED DECEMBER 31, 1995, 1994 AND 1993
<TABLE>
<CAPTION>
1995 1994 1993
<S> <C> <C> <C>
Cash flows from operating activities:
Net income $ 481,977 $ 524,178 $ 92,619
Adjustments to reconcile net income to net cash
provided by (used in) operating activities:
Depreciation 371,938 416,788 410,682
Amortization 129,927 92,858 84,330
Allowance for doubtful accounts (1,419) 105,765 13,542
(Gain) on sale of investment (1,061,558) - -
Proceeds from sale of investment,
net of cash and cash equivalents sold 687,386 - -
(Gain) loss on sale of assets 41,221 (9,000) (2,447)
Equity loss in investee 27,583 - -
Changes in assets and liabilities:
Decrease (increase) in accounts and notes
receivable (165,231) (72,425) 349,338
Decrease (increase) in receivable - other 500,000 (500,000) -
Decrease (increase) in inventories (101,046) 57,265 73,449
Decrease (increase) in prepaid expenses 2,349 (30,732) 3,198
Decrease (increase) in other current assets (1,605) 37,323 126,817
Decrease (increase) in note
receivable-noncurrent 73,499 43,393 (86,861)
Decrease (increase) in account
receivable-noncurrent 58,267 58,266 (116,533)
Increase in other assets (52,422) (47,372) (198,140)
Increase (decrease) in accounts payable (522,873) 228,501 (396,560)
Increase (decrease) in accrued expenses (134,212) (8,932) 119,245
Increase (decrease) in income taxes payable 697 9,688 -
Increase (decrease) in other liabilities - (274,187) -
Increase (decrease) in deferred revenue - - (262,819)
----------- ----------- ----------
Net cash provided by operating activities 334,478 631,377 209,860
----------- ----------- ----------
Cash flows from investing activities:
Investment in Radoslav - (6,360) (67,000)
Proceeds from sale of assets 39,579 9,000 6,870
Company manufactured equipment and buildings (413,804) (213,870) (228,551)
Capital expenditures on equipment (402,851) (870,538) (239,603)
----------- ----------- -----------
Net cash used in investing activities (777,076) (1,081,768) (528,284)
----------- ----------- -----------
Cash flows from financing activities:
Cash overdraft - (136,266) 136,266
Net proceeds (payments) on notes payable (1,293,787) 20,278 99,484
Proceeds from issuance of long-term debt 3,011,287 1,308,206 961,146
Principal payments under long-term debt (1,454,078) (559,981) (1,046,267)
Proceeds from sale of common stock 340,000 - -
----------- ----------- -----------
Net cash provided by financing activities 603,422 632,237 150,629
----------- ----------- -----------
</TABLE>
continued
18
<PAGE> 19
RADVA CORPORATION AND SUBSIDIARY
CONSOLIDATED STATEMENTS OF CASH FLOWS (CONTINUED)
<TABLE>
<CAPTION>
1995 1994 1993
<S> <C> <C> <C>
Net increase (decrease) in cash $160,824 $181,846 $(167,795)
Cash and cash equivalents at beginning of year 189,122 7,276 175,071
------- -------- ----------
Cash and cash equivalents at end of year $349,946 $189,122 $ 7,276
======== ======= ==========
Supplemental disclosure of cash flow information:
Cash paid during the year for interest $329,700 $274,323 $ 252,728
======== ======== ==========
Cash paid during the year for income taxes $ 9,688 $ - $ -
======== ======== ==========
</TABLE>
Supplemental disclosure of noncash investing activities:
During 1995, 1994 and 1993, the Company transferred other assets
valued at $ -0-, $9,306, and $55,457, respectively, to the investment in
Radoslav Joint Venture.
The sale of eighty (80) percent of the investment in Thermastructure, Ltd
for $2,022,308 resulted in the transfer of the following assets and
liabilities:
<TABLE>
<S> <C>
Assets and liabilities transferred:
Cash and cash equivalents (escrows) $ 53,092
Property, plant and equipment 1,657,849
Prepaid expenses 26,397
Inventory 122,945
Other assets 109,536
Debt assumed (780,784)
Expense of sale 9,522
Investment retained (20%) (237,807)
-----------
$ 960,750
===========
</TABLE>
See notes to consolidated financial statements.
19
<PAGE> 20
RADVA CORPORATION AND SUBSIDIARY
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
DECEMBER 31, 1995, 1994 AND 1993
NOTE 1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
Operations
RADVA Corporation and subsidiaries (the Company) produces and sells molded and
fabricated expanded polystyrene foam products such as packaging materials and
containers. The Company has also developed and patented housing construction
panels utilizing expanded polystyrene foam reinforced with steel. In addition,
they build and sell machinery used to manufacture the panels along with the
licensing rights to market the panels. The Company operates facilities in
Radford and Portsmouth, Virginia.
Principles of Consolidation
The consolidated financial statements include the accounts of the Company and
its wholly owned subsidiary, RADVA RU, Inc. and its formally wholly-owned
subsidiary Thermastructure, Ltd, through November 3, 1995 (date of sale of 80%
- -see Note 17). All significant inter-company accounts and transactions have
been eliminated in consolidation.
Cash and Cash Equivalents
Cash and cash equivalents consist primarily of demand deposits. For purposes
of the statements of cash flows, the Company considers all highly liquid
investments with an original maturity of less than three months to be cash
equivalents. The Company includes cash meeting this criteria whose use is
limited by restrictions contained in loan covenants.
Accounts Receivable
Accounts receivable are stated at cost less allowance for doubtful accounts.
The allowance for doubtful accounts is maintained at a level considered
adequate to provide for losses that can be reasonably anticipated.
Inventories
Inventories are stated at the lower of cost or market. Cost of raw materials,
supplies, work-in process and finished goods is determined by the first-in,
first-out method.
Investment in Radoslav Joint Venture
The Company is accounting for its investment in Radoslav, a 31% owned
affiliate, by the equity method of accounting under which the Company's
proportionate results of the affiliate's operations are recognized in the
Company's statement of operations and added to or taken from the investment
account. Distributions received from the affiliate are treated as a reduction
of the investment account.
Other assets
Included in other assets are patents and loan costs, which are amortized over
their respective estimated lives, and trademark rights, which are amortized
over 12 years. Accumulated amortization was $868,133 and $738,206 as of
December 31, 1995 and 1994, respectively.
20
<PAGE> 21
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
NOTE 1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
Property, Plant and Equipment
Depreciation of plant and equipment is provided on the straight-line basis over
the estimated useful lives of the respective assets as follows:
Buildings and improvements 5 to 30 years
Machinery and equipment 5 to 15 years
Automotive equipment 3 to 5 years
Office equipment 3 to 10 years
Leasehold improvements are amortized on a straight-line basis over the terms of
the respective leases.
Additions to property, plant and equipment are recorded at cost. All
expenditures for repairs, renewals and replacements which do not materially
extend the useful life of the property are charged to expense. Other
improvements and betterments are capitalized. With respect to dispositions,
the asset and accumulated depreciation accounts are relieved of cost and
accumulated depreciation with any resulting gain or loss credited or charged to
earnings.
Revenue Recognition
Net revenues represent sales of fabricated foam products, panels and machines
and fees from licensing agreements. Revenues from sales and the licensing
agreements are recognized upon completion of the transaction.
Income Taxes
Deferred taxes are provided on a liability method whereby deferred tax assets
are recognized for deductible temporary differences and operating loss and tax
credit carryforwards and deferred tax liabilities are recognized for taxable
temporary differences. Temporary differences are the differences between the
reported amounts of assets and liabilities and their tax bases. Deferred tax
assets are reduced by a valuation allowance when, in the opinion of management,
it is more likely than not that some portion or all of the deferred tax assets
will not be realized. Deferred tax assets and liabilities are adjusted for the
effects of changes in tax laws and rates on the date of enactment.
Investment tax credits are accounted for by the flow-through method whereby
they reduce income taxes currently payable and the provision for income taxes
in the period the assets giving rise to such credits are placed in service. To
the extent such credits are not currently utilized on the Company's tax return,
deferred tax assets, subject to considerations about the need for a valuation
allowance, are recognized for the carryforward amount.
Fair value of financial instruments
Statement of Financial Accounting Standards No. 107, "Disclosures about Fair
Value of Financial Instruments," requires disclosure about the fair value of
certain instruments. Cash, receivables, accounts payable and accrued
liabilities are reflected in the financial instruments at fair value because of
the short-term maturity of these instruments. The estimated fair value of the
company's financial instruments are disclosed in Note 3.
21
<PAGE> 22
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
NOTE 1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
Receivables and accounting change
On January 1, 1995, the Company adopted Statement of Financial Accounting
Standard 114, Accounting by Creditors for Impairment of a Loan. Statement No.
114 has been amended by Statement of Financial Accounting Standard No. 118,
Accounting by Creditors for Impairment of a Loan - Income Recognition and
Disclosures. Statement 114, as amended, requires that the impairment of
receivables that have been separately identified for evaluation is to be
measured based on the present value of expected future cash flows or,
alternatively, the observable market price of the receivables or the fair value
of the collateral. However, for those receivables that are collateral
dependent (that is, if repayment of those receivables is expected to be
provided solely by the underlying collateral) and for which management has
determined foreclosure is probable, the measure of the impairment of those
receivables is to be based on the fair value of the collateral. Statement 114,
as amended, also requires certain disclosures about investments in impaired
receivables and the allowance for possible bad debts and interest income
recognized. The adoption of Statement 114 had no effect on the consolidated
financial statements.
Use of estimates
The preparation of financial statements in conformity with generally accepted
accounting principles requires management to make estimates and assumptions
that affect the reported amounts of assets and liabilities and disclosure of
contingent assets and liabilities at the date of the financial statements and
the reported amounts of revenues and expenses during the reporting period.
Actual results could vary from the estimates that were used.
Per Share Information
Earnings per share are based on the average number of common shares of the
Company outstanding. The number of shares used in computing per share
information was 3,772,282 in 1995, and 3,742,060 in 1994 and 1993.
Reclassification
Certain reclassifications have been made to prior years' financial statements
to place them on a comparable basis with the current year.
NOTE 2. CASH AND CASH EQUIVALENTS
Cash and cash equivalents consist of the following:
<TABLE>
<CAPTION>
1995 1994 1993
<S> <C> <C> <C>
Petty cash and non-interest bearing accounts $349,946 $106,512 $7,276
Restricted by IDA bonds, series 1995 - 82,610 -
-------- -------- -------
Total cash and cash equivalents $349,946 $189,122 $7,276
======== ======== =======
</TABLE>
NOTE 3. FAIR VALUE OF FINANCIAL INSTRUMENTS
The following methods and assumptions were used to estimate the fair value of
each class of financial instruments for which it is practicable to estimate
that value:
Cash and cash equivalents:
The carrying amount approximates fair value because of the short maturity of
those instruments.
22
<PAGE> 23
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
NOTE 3. FAIR VALUE OF FINANCIAL INSTRUMENTS, CONTINUED
Receivable - other:
The carrying amount is a reasonable estimate of fair value since entire amount
is due within six months of date receivable originated.
Long-term debt:
The fair value of the Company's long-term debt is estimated based on the quoted
market prices for the same or similar issues or on the current rates offered to
the Company for debt of the same remaining maturities with similar collateral
requirements.
The estimated fair values of the Company's financial instruments as of December
31, 1995 are as follows:
<TABLE>
<CAPTION>
1995
---------------------------------
Carrying Fair
Amount Value
---------- ---------
<S> <C> <C>
Cash and cash equivalents $ 349,946 $ 349,946
Receivable - other 1,272,308 1,272,308
Long-term debt 3,074,744 3,074,744
</TABLE>
NOTE 4. RECEIVABLES
Information about impaired receivables as of and for the year ended December
31, 1995 is as follows:
<TABLE>
<S> <C>
Receivables for which there is a related
allowance for bad debts $389,944
Receivables for which there is no related
allowance for bad debts 488,131
--------
Total impaired receivables $878,075
========
Related allowance for possible bad debts $153,349
========
Average balance (based on beginning and
ending of year) $847,686
========
</TABLE>
NOTE 5. ACCOUNTS RECEIVABLE OTHER
In December, 1994, Company entered into an agreement to sell certain
intellectual property rights owned by RADVA/Thermastructure, LTD., which
includes but is not limited to patents, trademarks, and trade secrets
associated with the manufacture and distribution of Wallframe/Thermastructure
Panels and 10% of outstanding shares of Thermastructure LTD. Agreement called
for due diligence period of 45 days from date Company accepted agreement.
Purchaser could rescind agreement if significant adverse matters were
discovered which affects value of acquisition, or ability of Company to perform
the obligation. At conclusion of due diligence period Company and Purchaser
were to execute a final agreement.
As of date of audit report due diligence period had passed without Purchaser
rescinding agreement and no final agreement being executed. Company had
received $500,000 in December, 1994, and another $500,000 in January, 1995.
Since Purchaser did not rescind agreement during the due diligence period and
has not performed as directed by the initial agreement the Company's position
is that the monies received are non- refundable. Therefore, the monies
received are included in 1994 as licensing revenue.
23
<PAGE> 24
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
NOTE 6. PROPERTY, PLANT AND EQUIPMENT
A summary of property, plant and equipment follows:
<TABLE>
<CAPTION>
1995 1994
<S> <C> <C>
Land and improvements $ 204,150 $ 295,904
Buildings and improvements 2,029,944 2,776,465
Machinery and equipment 3,379,584 4,239,999
Transportation equipment 410,140 425,551
Office equipment 427,394 422,116
---------- ----------
$6,451,212 $8,160,035
========== ==========
</TABLE>
NOTE 7. INVESTMENT IN RADOSLAV JOINT VENTURE
The Company owns a 31% interest in Radoslav, a Joint Venture located at
Pereslavl - Zalessky, approximately 75 miles north of Moscow. Radoslav
produces THERMASTRUCTURE panels for sale in Russia and other European
countries. The Company and three Russian entities, Pereslavlstroy Trust,
Slavich Corporation and Argamak Corporation are the primary joint venture
participants. The Joint Venture agreement called for the Company to contribute
technology, the right for Radoslav to produce THERMASTRUCTURE panels under the
Company's trademarks and U.S. currency that is included in the investment
account. The Russian principals contributed a manufacturing facility of
approximately 24,000 square feet and a sum of Russian currency. The results of
operations of Radoslav for the years ended December 31, 1995 and 1994 showed a
modest profit; however, they are not material to the financial statements of
RADVA Corporation and are not included in the statement of operations or the
investment account.
NOTE 8. ACCRUED EXPENSES
Accrued expenses are composed of the following:
<TABLE>
<CAPTION>
1995 1994
<S> <C> <C>
Payroll and employee benefits $ 228,107 $ 199,834
Interest 16,751 48,618
Customer deposits 66,158 126,264
Other 154,777 108,854
---------- ----------
$465,793 $ 483,570
========== ==========
</TABLE>
NOTE 9. NOTES PAYABLE
A summary of notes payable follows:
<TABLE>
<CAPTION>
1995 1994
<S> <C> <C>
Demand note, collateralized by certain accounts
receivable, inventory, and a deed of trust on
real property. Interest at prime plus 4% $ - $1,251,100
Unsecured notes payable to stockholders (see Note 13) - 42,687
---------- ----------
Total notes payable $ - $1,293,787
========== ==========
</TABLE>
24
<PAGE> 25
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
NOTE 10. LONG-TERM DEBT
<TABLE>
<CAPTION>
A summary of long-term debt follows:
1995 1994
<S> <C> <C>
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 $ - $ 740,000
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 - 73,559
Installment note payable to stockholders (see Note 13), due in monthly
installments of $10,000, plus interest at 9% - 240,000
Note payable to individual (see Note 17), due February 1997. Interest
payable quarterly at 8%. - 500,000
Installment note payable to stockholder (see Note 13), due in monthly
installments of $4,588, including interest at 7%, collateralized by a
deed of trust on Portsmouth, Virginia real estate. - 278,067
Installment notes payable due in aggregate monthly installments
of $2,999, including interest, with various maturities until June 1998;
collateralized by equipment. Interest rates ranging from 7.25% to 13%. 36,604 140,802
Installment note payable to bank, due in monthly installments of $5,300,
including interest at 9.75% with a final balloon payment in July 1997. - 263,042
Installment note payable to bank, due in monthly installments of $43,467,
including interest at prime plus 2% with a final balloon payment in
December 2000. 3,000,000 -
Installment note payable to bank, due in monthly installments of
31,225 Austrian shillings, including interest at 12%. 6,834 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. 31,306 32,071
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 $896,
including interest at 9%, collateralized by a deed of trust on real estate. - 87,438
---------- ----------
Total long-term debt $3,074,744 $2,383,063
</TABLE>
25
<PAGE> 26
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
NOTE 10. LONG-TERM DEBT, CONTINUED
<TABLE>
<S> <C> <C>
Less current installments of long-term debt 241,505 372,876
---------- ----------
Long-term debt, excluding current installments $2,833,239 $2,010,187
========== ==========
</TABLE>
Substantially all real property, equipment, accounts receivable and inventory
are pledged as collateral on various debt instruments.
The aggregate principal maturities of long-term debt during each of the five
years subsequent to December 31, 1995 follows:
<TABLE>
<CAPTION>
Years Ended December 31,
------------------------
<S> <C>
1996 $ 241,505
1997 241,293
1998 293,150
1999 288,420
2000 2,010,376
Thereafter -
----------
$3,074,744
==========
</TABLE>
NOTE 11. ACCOUNTING CHANGE AND INCOME TAX MATTERS
Effective January 1, 1993, the Company adopted FASB Statement No. 109,
Accounting for Income Taxes. The adoption of Statement 109 changes the
Company's method of accounting for income taxes from the deferred method to a
liability method. Under the deferred method, the Company deferred the past tax
effects of timing differences between financial reporting and taxable income.
As explained in Note 1, the liability method requires the recognition of
deferred tax assets and liabilities for the expected future tax consequences of
temporary differences between the reported amounts of assets and liabilities
and their tax bases.
FASB Statement No. 109 was adopted prospectively. Due to the valuation
allowance that would have been recorded at January 1, 1993, there was no effect
on the income statement for the year.
Net deferred tax assets and liabilities consist of the following components as
of December 31, 1995 and 1994:
<TABLE>
<CAPTION>
1995 1994
<S> <C> <C>
Deferred tax assets:
Bad debt allowance $ 114,892 $ 104,411
Accrued expenses 56,025 42,572
Inventory allowance 8,799 9,914
Loss carryforward 729,001 1,108,120
Investment tax credit carryforward 213,017 213,017
Minimum tax credit carryforward 9,688 9,688
---------- ----------
1,131,422 1,487,722
Less valuation allowance 998,645 1,335,600
---------- ----------
$ 132,777 $ 152,122
========== ==========
Deferred tax liabilities:
Property and equipment $ 132,777 152,122
========== ==========
$ - $ -
========== ==========
</TABLE>
26
<PAGE> 27
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
NOTE 11. ACCOUNTING CHANGE AND INCOME TAX MATTERS, CONTINUED
As noted, the deferred tax assets equal the deferred tax liabilities resulting
in no effect on the income statement or stockholders' equity for the year.
Loss carryforwards for tax purposes as of December 31, 1995 have the following
expiration dates:
<TABLE>
<CAPTION>
Expiration Date Amount
--------------- ------
<S> <C>
2005 $1,918,424
==========
</TABLE>
Investment tax credit carryforwards for tax purposes as of December 31, 1995
have the following expiration dates:
<TABLE>
<CAPTION>
Expiration Date Amount
--------------- ------
<S> <C>
1996 $ 35,358
1998 88,599
1999 40,976
2000 48,084
--------
$213,017
========
</TABLE>
The income tax provision differs from the amount of income tax determined by
applying the U.S. Federal income tax rate to pretax income for the years ended
December 31, 1995, 1994 and 1993 due to the following:
<TABLE>
<CAPTION>
1995 1994 1993
---- ---- ----
<S> <C> <C> <C>
Computed "expected" tax benefit $ 167,403 $ 181,514 $ 31,490
Non-deductible expenses 171,808 81,722 (2,359)
State income taxes, net of federal income tax benefit 39,508 30,660 3,393
Benefit of income taxed at lower rates - - (11,750)
Benefit of operating loss carryforward (378,719) (293,896) (20,774)
Other 10,385 9,688 -
--------- --------- --------
$ 10,385 $ 9,688 $ -
========= ========= ========
</TABLE>
NOTE 12. PROFIT SHARING PLAN
The Company has a profit sharing plan (the Plan) which covers all full-time
officers and employees who have at least one year of service and attained the
age of 21. Contributions to the Plan are made at the rate of 5% of earnings
before profit sharing and income taxes, or the maximum deduction allowed for
federal income tax purposes, whichever is lower and is funded as incurred. The
Plan is a qualified plan under applicable sections of the Internal Revenue
Code. Profit sharing expense for the period ended December 31, 1995, 1994 and
1993 was $25,914, $28,098 and $4,875, respectively.
NOTE 13. RELATED PARTY TRANSACTIONS
The Company has a month-to-month lease on certain operating and warehouse space
with Jalu, a partnership in which the Company's president is a partner. The
space is currently rented for $1,000 per month. The Company also rents on a
month-to-month basis certain office space from Chuckatuck, a partnership in
which the Company's president is a partner. The present rental payment is
$3,700 per month.
27
<PAGE> 28
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
NOTE 13. RELATED PARTY TRANSACTIONS, CONTINUED
The Company has notes payable to the Company's president and
secretary/treasurer totaling $ -0- at December 31, 1995 (see Notes 9 and 10).
A summary of the activity during the year is as follows:
<TABLE>
<S> <C>
Balance, December 31, 1994 $ 560,754
Additional unsecured loans -
Curtailments 560,754
---------
Balance, December 31, 1995 $ -
=========
</TABLE>
NOTE 14. OPERATING LEASES
The Company leases certain of its manufacturing and office facilities and
equipment. Rental expense for the years ended December 31, 1995, 1994 and 1993
was $123,481, $112,980, and $145,570, respectively. All leases have expired;
however, the Company continues to lease these facilities under the previous
lease schedules for $4,685 per month.
NOTE 15. MAJOR CUSTOMER
The percentage of net revenue attributable to the Company's major customers
(exceeding 10% of total revenues) is 10.5% for 1995, 24.6% for 1994, and 15%
for 1993.
NOTE 16. INDUSTRY SEGMENTS
The Company considers its operations to include principally three industry
segments; (1) manufacture of protective packaging and similar materials, (2)
manufacture of THERMASTRUCTURE building products, and (3) licensing and related
machinery sales. Summary data for 1995, 1994, and 1993 is as follows:
<TABLE>
<CAPTION>
1995 1994 1993
<S> <C> <C> <C>
Net revenues:
Protective packaging and similar material $ 7,937,220 $ 8,015,461 $ 8,678,663
THERMASTRUCTURE products and similar materials 1,329,307 2,400,251 862,274
Licensing and related machinery sales 1,510,684 1,225,004 864,207
----------- ----------- -----------
Revenue $10,777,211 $11,640,716 $10,405,144
=========== =========== ===========
Operating income (loss):
Protective packaging and similar materials $ 2,179,442 $ 2,066,357 $ 2,352,444
THERMASTRUCTURE products and similar materials (339,936) 342,345 (71,976)
Licensing and related machinery sales 1,462,207 1,061,756 417,016
----------- ----------- -----------
Segment operating income 3,301,713 3,470,458 2,697,484
General corporate expense 2,458,508 2,688,176 2,390,170
----------- ----------- -----------
Operating profit $ 843,205 $ 782,282 $ 307,314
=========== =========== ===========
</TABLE>
28
<PAGE> 29
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
NOTE 16. INDUSTRY SEGMENTS, CONTINUED
<TABLE>
<CAPTION>
1995 1994 1993
<S> <C> <C> <C>
Capital expenditures:
Protective packaging and similar materials $ 792,338 $ 198,262 $ 114,741
THERMASTRUCTURE products - U.S. operations 10,187 867,010 233,530
General corporate 14,130 19,136 119,883
---------- ---------- ----------
Capital expenditures $ 816,655 $1,084,408 $ 468,154
========= ========== ==========
Depreciation and amortization:
Protective packaging and similar materials $ 278,395 $ 284,804 $ 294,239
THERMASTRUCTURE products 191,117 170,706 158,645
General corporate 32,353 63,442 42,128
---------- ---------- ----------
Depreciation and amortization $ 501,865 $ 518,952 $ 495,012
========= ========== ==========
Identifiable assets at December 31:
Protective packaging and similar materials $2,726,629 $3,399,324 $2,734,968
THERMASTRUCTURE products 505,352 1,069,503 1,093,060
Licensing and related machinery sales 1,057,322 1,603,117 1,278,180
General corporate 3,708,228 2,245,669 2,099,920
---------- ---------- ----------
Assets $7,997,531 $8,317,613 $7,206,128
========== ========== ==========
</TABLE>
NOTE 17. OTHER MATTERS
The Company reached an agreement on February 15, 1994 whereby the Company was
to promptly spin off the THERMASTRUCTURE division into a new wholly owned
corporation. The party to the agreement immediately loaned $500,000 to the
Company with interest payable quarterly at 8% per annum. The terms of the
agreement granted the option to convert the loan into one-sixth (16.67%) of the
common stock of the new corporation and also the right and option to acquire up
to an additional one-third (33.33%) of the new corporation for $1,000,000 or
any portion thereof on a prorata basis. This option was terminated and the
note was repaid in November, 1995.
The Company entered into an agreement dated November 3, 1995 for sale of 80% of
common stock of THERMASTRUCTURE, Ltd. Company received $750,000 down with the
balance to be paid on or before expiration of six months with a minimum of
$750,000 cash. Balance due from sale at December 31, 1995 amounted to
$1,272,308. This transaction resulted in a gain of $1,061,558 and is reflected
in net revenues from licensing and related machinery sales.
NOTE 18. WORKING CAPITAL DEFICIENCY
Company has experienced working capital deficiencies of $ - 0 - , $865,339, and
$1,805,083 for the years ending December 31, 1995, 1994, and 1993,
respectively.
29
<PAGE> 30
RADVA CORPORATION AND SUBSIDIARY
SCHEDULE V - PROPERTY, PLANT AND EQUIPMENT
YEARS ENDED DECEMBER 31, 1995, 1994 AND 1993
<TABLE>
<CAPTION>
OTHER
BALANCE CHANGES
AT ADD BALANCE
BEGINNING ADDITIONS (DEDUCT) AT END
CLASSIFICATION OF YEAR AT COST RETIREMENTS (A) OF YEAR
-------------- ----------- ----------- ----------- -------- -----------
<S> <C> <C> <C> <C> <C>
Year ended December 31, 1993:
Land and improvements $ 204,151 $ 5,000 $ - $ - $ 209,151
Buildings and improvements 2,112,629 54,759 - - 2,167,388
Machinery and equipment 4,207,249 110,274 637,162 228,551 3,908,912
Transportation equipment 363,013 58,004 29,902 - 391,115
Office equipment 405,643 11,566 - - 417,209
---------- --------- ---------- --------- ----------
$7,292,685 $ 239,603 $ 667,064 $ 228,551 $7,093,775
========== ========= ========== ========= ==========
Year ended December 31, 1994:
Land and improvements $ 209,151 $ 86,753 $ - $ - $ 295,904
Buildings and improvements 2,167,388 609,077 - - 2,776,465
Machinery and equipment 3,908,912 118,565 1,348 213,870 4,239,999
Transportation equipment 391,115 51,236 16,800 - 425,551
Office equipment 417,209 4,907 - - 422,116
---------- --------- ---------- --------- ----------
$7,093,775 $ 870,538 $ 18,148 $ 213,870 $8,160,035
========== ========= ========== ========= ==========
Year ended December 31, 1995:
Land and improvements $ 295,904 $ - $ 91,754 $ - $ 204,150
Buildings and improvements 2,776,465 101,015 1,211,264 363,728 2,029,944
Machinery and equipment 4,239,999 272,419 1,182,910 50,076 3,379,584
Transportation equipment 425,551 15,287 30,698 - 410,140
Office equipment 422,116 14,130 8,852 - 427,394
---------- --------- ---------- --------- ----------
$8,160,035 $ 402,851 $2,525,478 $ 413,804 $6,451,212
========== ========= ========== ========= ==========
</TABLE>
(A) During 1995, 1994 and 1993, the Company placed in service certain property
which has previously been classified as inventory.
30
<PAGE> 31
RADVA CORPORATION AND SUBSIDIARY
SCHEDULE VI - ACCUMULATED DEPRECIATION AND
AMORTIZATION OF PROPERTY, PLANT AND EQUIPMENT
YEARS ENDED DECEMBER 31, 1995, 1994 AND 1993
<TABLE>
<CAPTION>
OTHER
BALANCE CHANGES
AT ADD BALANCE
BEGINNING ADDITIONS (DEDUCT) AT END
CLASSIFICATION OF YEAR AT COST RETIREMENTS (A) OF YEAR
-------------- ----------- ----------- ----------- -------- -----------
<S> <C> <C> <C> <C> <C>
Year ended December 31, 1993:
Land and improvements $ 24,331 $ - $ - $ - $ 24,331
Buildings and improvements 797,028 85,703 - - 882,731
Machinery and equipment 3,077,080 243,401 639,919 - 2,680,562
Transportation equipment 252,618 41,040 22,722 - 270,936
Office equipment 294,988 40,538 - - 335,526
---------- --------- ---------- --------- ----------
$4,446,045 $ 410,682 $ 662,641 $ - $4,194,086
========== ========= ========== ========= ==========
Year ended December 31, 1994:
Land and improvements $ 24,331 $ - $ - $ - $ 24,331
Buildings and improvements 882,731 95,429 - - 978,160
Machinery and equipment 2,680,562 248,670 1,348 - 2,927,884
Transportation equipment 270,936 37,153 16,800 - 291,289
Office equipment 335,526 35,536 - - 371,062
---------- --------- ---------- --------- ----------
$4,194,086 $ 416,788 $ 18,148 $ - $4,592,726
========== ========= ========== ========= ==========
Year ended December 31, 1995:
Land and improvements $ 24,331 $ - $ - $ - $ 24,331
Buildings and improvements 978,160 88,847 57,653 - 1,009,354
Machinery and equipment 2,927,884 235,656 725,166 - 2,438,374
Transportation equipment 291,289 32,136 30,698 - 292,727
Office equipment 371,062 15,299 7,714 - 378,647
---------- --------- ---------- --------- ----------
$4,592,726 $ 371,938 $ 821,231 $ - $4,143,433
========== ========= ========== ========= ==========
</TABLE>
(A) During 1995, 1994 and 1993, the Company placed in service certain
property which has previously been classified as inventory.
31
<PAGE> 32
RADVA CORPORATION AND SUBSIDIARY
SCHEDULE VIII - VALUATION AND QUALIFYING ACCOUNTS
YEARS ENDED DECEMBER 31, 1995, 1994 AND 1993
<TABLE>
<CAPTION>
ADDITONS
--------
BALANCE CHARGED CHARGED
AT TO TO BALANCE
BEGINNING COSTS AND OTHER AT END
DESCRIPTION OF YEAR EXPENSES ACCOUNTS DEDUCTIONS(A) OF YEAR
----------- ----------- ----------- ----------- ------------- -------
<S> <C> <C> <C> <C> <C>
Year ended December 31, 1993:
Allowance for doubtful
accounts $ 90,140 $ 13,542 $ - $ 4,777 $ 98,905
======== ======== ===== ======= ========
Year ended December 31, 1994:
Allowance for doubtful
accounts $ 98,905 $105,765 $ - $ - $204,670
======== ======== ===== ======= ========
Year ended December 31, 1995:
Allowance for doubtful
accounts $204,670 $ (1,419) $ - $ - $203,251
======== ======== ===== ======= ========
</TABLE>
(A) Represents uncollectible amounts written off, net of recoveries.
32
<PAGE> 33
ITEM 9. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND
FINANCIAL DISCLOSURE
None.
PART III
ITEM 10. DIRECTORS AND EXECUTIVE OFFICERS OF THE REGISTRANT
Information as to the Company's directors is incorporated by
reference to material contained under the heading "Election of Directors" in
the Company's proxy statement for its annual meeting of stockholders scheduled
for May 29, 1996.
Information as to the Company's executive officers is set forth
under the heading "Executive Officers" in ITEM 1 of this report.
ITEM 11. EXECUTIVE COMPENSATION
Information as to executive compensation is incorporated by
reference to material contained under the headings "Cash Compensation" and
"Compensation Plans" in the Company's proxy statement for its annual meeting of
stockholders scheduled for May 29, 1996.
ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
Information as to the security ownership of certain beneficial
owners and management is incorporated by reference to material contained under
the heading "Principal Stockholders" in the Company's proxy statement for its
annual meeting of stockholders scheduled for May 29, 1996.
ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
Information as to certain relationships and related transactions
is incorporated by reference to material contained under the heading "Certain
Relationships and Related Transactions" in the Company's proxy statement for
its annual meeting of stockholders scheduled for May 29, 1996.
PART IV
ITEM 14. EXHIBITS, FINANCIAL STATEMENT SCHEDULES, AND REPORTS ON FORM 8-K
(a) (1) Financial Statements (Included in PART II)
See ITEM 8 in PART II
(a) (2) Financial Statement Schedules (Included in PART II)
See ITEM 8 in PART II
(a) (3) Exhibits
The exhibits filed with this report and the documents incorporated by
reference as exhibits to this report are described below.
(3) (a) Articles of Incorporation of the Company (Incorporated
by reference to Exhibit B to Registration Statement No. 0-15464 filed with the
Securities and Exchange Commission on March 9, 1987).
(3) (b) Bylaws of the Company (Incorporated by reference to
Exhibit C to Registration Statement No. 0-15464 filed with the Securities and
Exchange Commission on March 9, 1987).
33
<PAGE> 34
(4) (a) Bond Purchase Agreement dated as of October 1, 1981
among the Industrial Development Authority of the City of Portsmouth, First &
Merchants National Bank, and the Company; Agreement of Sale dated as of October
1, 1981 between the Industrial Development Authority of the City of Portsmouth
and the Company; Assignment Agreement dated as of October 1, 1981 between the
Industrial Development Authority of the City of Portsmouth and First &
Merchants National Bank; $550,000 promissory note of the Company; Deed of Trust
dated as of October 1, 1981 between the Industrial Development Authority of the
City of Portsmouth and Joseph S. Lovering, Jr. and William H. West, as trustees
(Incorporated by reference to Exhibit 4(a) to Registration Statement No.
33-5319 filed with the Securities and Exchange Commission on June 25, 1986).
(4) (b) Letter of Commitment dated October 9, 1984 between the
Company and Sovran Bank, N.A.; $1,000,000 promissory note of the Company; Deed
of Trust dated as of October 10, 1984 between the Company and Joel S. Rhew and
H. Gregory Kilduff, as trustees; Security Agreement dated as of October 10,
1984 between the Company and Sovran Bank, N.A. (Incorporated by reference to
Exhibit 4(b) to Registration Statement No. 33-5319 filed with the Securities
and Exchange Commission on June 25, 1986).
(4) (c) Letter of Commitment dated August 25, 1984 between the
Company and Sovran Bank, N.A. and related promissory note of the Company;
Security Agreement dated August 30, 1983 between the Company and First &
Merchants National Bank (*the predecessor to Sovran Bank, N.A.); Accounts
Receivable and Inventory Reporting Service Instructions dated March 18, 1986;
Collateral Services Rate Agreement dated August 17, 1983 between the Company
and First & Merchants National Bank (Incorporated by reference to Exhibit 4(c)
to Registration Statement No. 33- 5319 filed with the Securities and Exchange
Commission on June 25, 1986).
(4) (d) Letter of Commitment dated September 16, 1987 between
the Company and Sovran Bank, N.A. relating to a $1,000,000 line of credit.
(Incorporated by reference to Exhibit 4(d) of Registrant's 1987 Form 10-K).
(4) (e) In addition to the matters reported in Exhibits (4)(a)
through (4)(d) above, the long-term debt as shown on the consolidated balance
sheet of the Company at December 31, 1989 included additional obligations each
of which is less than 10% of the total assets of the Company. The documents
evidencing these obligations are omitted pursuant to Item 601(b)(4)(iii) of
Regulation S-K and will be furnished to the Securities and Exchange Commission
upon request.
(4) (f) See Article III, Section 4 of Exhibit 3(a).
(4) (g) See Articles II, III, VI, VIII and IX of Exhibit (3)(b).
(4) (h) Form of Stock Purchase Warrant (Incorporated by
reference to Exhibit 4(g) to Registration Statement No. 33-5319 filed with the
Securities and Exchange Commission on June 25, 1986).
(10) (a) Lease Amendment #1 dated August 26, 19897 between the
Company and Gil Gillis, Gwenda Gillis, and Gayla Gillis relating to premises
located at 2500 South Main Street, Highway 293, Kennesaw, Georgia (Incorporated
by reference to Exhibit 10(a) of Registrant's 1987 Form 10-K).
(10) (b) Lease dated February 20, 1986 between Guam Capital
Investment Corporation and the Company relating to premises located at Lot No.
236, Agat, Guam (Incorporated by reference to Exhibit 10(c to Registration
Statement No. 33-5319 filed with the Securities and Exchange Commission on June
25, 1986).
(10) (c) Lease dated April 29, 1986 between Chuckatuck
Partnership and the Company relating to the Company's principal executive
office space in Radford, Virginia (Incorporated by reference to Exhibit 10(d)
to Registration Statement No. 33-5319 filed with the Securities and Exchange
Commission on June 25, 1986).
34
<PAGE> 35
(10) (d) Lease dated July 1, 1987 between the Atlantic
Richfield Company and James M. Chamberlain and Patsy L. Chamberlain, as
trustees of the Chamberlain Family Trust, relating to premises located at 3802
East Broadway, Phoenix, Arizona.
(10) (e) Agreement dated March 31, between the Department of
the Army and the Company relating to the construction of U.S. military housing
in Edgewood, Maryland. (Incorporated by reference to Exhibit 10(e) of
Registrant's 1987 Form 10-K).
(10) (f) Agreement dated September 1, 1987 between Zublin
Delaware, Inc. and the Company relating to the construction of U.S. military
housing in Vilseck, West Germany. (Incorporated by reference to Exhibit 10(f)
of Registrant's 1987 Form 10-K.)
(10) (g) Agreement dated as of July 1, 1985 between ARCO
Chemical Company and the Company relating to the sale of various copolymer
resins (Incorporated by reference to Exhibit 10(g) to Registration Statement
No. 33-5319 filed with the Securities and Exchange Commission on June 25,
1986.)
(10) (h) Agreement dated as of April 11, 1986 between ARCO
Technology, Inc. and the Company relating to a license of certain manufacturing
rights (Incorporated by reference to Exhibit 10(h) to Registration Statement
No. 33-5319 filed with the Securities and Exchange Commission on June 5, 1986.)
(10 (i) Bank of Virginia Trust Company Prototype Plan and
Trust Agreement and accompanying Joinder Agreement (Incorporated by reference
to Exhibit 10(i) to Registration Statement No. 33-5319 filed with the
Securities and Exchange Commission on June 24, 1986.)
(10) (j) 1986 Stock Option Plan for employees of the Company
(Incorporated by reference to Exhibit 10(j) to Registration Statement No.
33-5319 filed with the Securities and Exchange Commission on June 24, 1986.)
(10) (k) Settlement Agreement dated June 19, 1986 among the
Company, Luther I. Dickens, and Great Northern Corporation (Incorporated by
reference to Exhibit 10(k) to Registration Statement No. 33-5319 filed with the
Securities and Exchange Commission on June 24, 1986.)
(10) (l) Purchase Agreement dated December 31, 1987 between
the Company and the Atlantic Richfield Company (Incorporated by reference to
Exhibit 10 to the Company's current report on Form 8-K filed with the
Securities and Exchange Commission on January 13, 1988.
(11) Statement recomputation of per share earnings.
(b) Reports on Form 8-K
None
(c) Exhibits
See ITEM 14(a)(3) above.
(d) Financial Statement Schedules
See ITEM 14(a)(2) above.
35
<PAGE> 36
SIGNATURES
Pursuant to the requirements of Section 13 or 15(d) of the Securities and
Exchange Act of 1934, the registrant has duly caused this report to be signed
on its behalf by the undersigned thereunto duly authorized.
RADVA Corporation
Dated: May 14, 1996 By /s/ LUTHER I. DICKENS
-----------------------
Luther I. Dickens
President
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.
<TABLE>
<S> <C> <C>
Dated: By /s/ LUTHER I. DICKENS May 14, 1996
-------------------------------
Luther I. Dickens
President and Director
Dated: By /s/ JAMES M. HYLTON May 14, 1996
-------------------------------
James M. Hylton
Director
Dated: By /s/ RUSH G. ALLEN May 14, 1996
-------------------------------
Rush G. Allen
Director
Dated: By /s/ J. GRANGER MACFARLANE May 14, 1996
-------------------------------
J. Granger Macfarlane
Director
Dated: By /s/ WILLIAM C. NORTON May 14, 1996
-------------------------------
William C. Norton
Director
Dated: By /s/ WILLIAM H. WILSON May 14, 1996
-------------------------------
William H. Wilson
Director
</TABLE>
36
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
This schedule contains summary financial information extracted from Balance
sheet as of December 31, 1995 and Statement of Operations for the year then
ended, and is qualified in its entirety by reference to such financial
statements.
</LEGEND>
<CIK> 0000792984
<NAME> RADVA CORP.
<S> <C>
<PERIOD-TYPE> YEAR
<FISCAL-YEAR-END> DEC-31-1995
<PERIOD-START> JAN-01-1995
<PERIOD-END> DEC-31-1995
<CASH> 349,946
<SECURITIES> 0
<RECEIVABLES> 2,903,084
<ALLOWANCES> 203,251
<INVENTORY> 963,579
<CURRENT-ASSETS> 4,135,439
<PP&E> 6,451,212
<DEPRECIATION> 4,143,433
<TOTAL-ASSETS> 7,997,531
<CURRENT-LIABILITIES> 1,984,925
<BONDS> 2,833,239
<COMMON> 41,047
0
0
<OTHER-SE> 3,138,320
<TOTAL-LIABILITY-AND-EQUITY> 7,997,531
<SALES> 9,266,527
<TOTAL-REVENUES> 10,777,211
<CGS> 7,475,498
<TOTAL-COSTS> 9,934,006
<OTHER-EXPENSES> 0
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 297,833
<INCOME-PRETAX> 492,362
<INCOME-TAX> 10,385
<INCOME-CONTINUING> 481,977
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 481,977
<EPS-PRIMARY> .13
<EPS-DILUTED> .13
</TABLE>
