<PAGE> 1
FORM 10-Q
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
--------------------------------------------
Quarterly Report Under Section 13 or 15(d) of the
Securities Exchange Act of 1934
--------------------------------------------
For Quarter Ended Commission File
March 31, 1997 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 (540) 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______
At May 3, 1997, there were 4,104,727 shares of Registrant's Common Stock, $.01
par value per share, outstanding.
<PAGE> 2
RADVA CORPORATION
INDEX
<TABLE>
<CAPTION>
Page
Number
------
<S> <C> <C>
PART I. FINANCIAL INFORMATION:
Item 1. Financial Statements
Balance Sheets,
December 31, 1996 and March 31, 1997 3
Statements of Operations, Three Months
Ended March 31, 1996 and March 31, 1997 4
Statements of Cash Flows, Three Months
Ended March 31, 1996 and March 31, 1997 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
</TABLE>
2
<PAGE> 3
RADVA CORPORATION
Balance Sheets
(In Thousands)
<TABLE>
<CAPTION>
March 31 December 31
ASSETS 1997 1996
---------- -----------
<S> <C> <C>
Current assets:
Cash.................................. $ 148 $ 24
---------- ---------
Accounts and notes receivable......... 1,847 1,665
Accounts receivable - other........... 1,197 1,197
Less allowance for doubtful accounts.. 182 172
---------- ---------
Net receivables....................... 2,862 2,690
---------- ---------
Inventories:
Finished goods...................... 357 397
Work in process..................... 23 29
Raw materials and supplies.......... 226 243
Machinery inventory................. 329 240
---------- ---------
Total inventories................... 935 909
---------- ---------
Prepaid expenses...................... 138 134
Other current assets.................. 51 30
---------- ---------
Total current assets............ 4,134 3,787
---------- ---------
Property, plant & equipment, at cost..... 5,911 5,564
Less accumulated depreciation......... 3,146 3,067
---------- ---------
Net property, plant & equip..... 2,765 2,497
---------- ---------
Investment in RADOSLAV Joint Venture..... 336 336
Trademark rights......................... 205 223
Investment in Thermastructure, Ltd....... 210 210
Note receivable-noncurrent............... 414 414
Other assets............................. 244 307
---------- ---------
$ 8,308 $ 7,774
========== =========
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Current installments of long-term debt $ 293 $ 293
Notes payable......................... 378 300
Accounts payable...................... 1,181 1,124
Accrued expenses...................... 224 199
---------- ---------
Total current liabilities...... 2,076 1,916
---------- ---------
Long-term debt, excluding current
installments.......................... 2,836 2,678
Stockholders' equity:
Common stock of $.01 par value.
Authorized 10,000,000 shares; issued
and outstanding 4,104,727.......... 41 41
Additional paid-in capital............ 4,512 4,512
Retained earnings..................... (1,157) (1,373)
---------- ---------
Total stockholders' equity... 3,396 3,180
---------- ---------
$ 8,308 $ 7,774
========== =========
</TABLE>
See accompanying notes to financial statements.
3
<PAGE> 4
RADVA CORPORATION
Statements of Operations
Three Months Ended March 31
(In Thousands, except per share data)
<TABLE>
<CAPTION>
1997 1996
---- ----
<S> <C> <C>
Net Revenues:
Manufacturing net revenues......... $ 2,632 $ 2,622
Licensing & machinery sales........ - -
------- -------
Net revenues....................... 2,632 2,622
------- -------
Cost and expenses:
Cost of sales...................... 1,926 1,994
Shipping and selling............... 194 225
General and administrative......... 208 329
Research and development........... 32 3
------- -------
2,360 2,551
------- -------
Operating income (loss)............ 272 71
------- -------
Other income (deductions):
Interest expense................... (88) (73)
Interest income.................... 31 -
Other.............................. 1 6
------- -------
(56) (67)
------- -------
Earnings before income taxes.......... 216 4
Income tax expense.................... - -
------- -------
Net earning (loss).................... $ 216 $ 4
======= =======
Earnings (loss) per common share...... $ .05 $ .00
======= =======
</TABLE>
See accompanying notes to financial statements.
4
<PAGE> 5
RADVA CORPORATION
Statements of Cash Flows
Quarters Ended March 31
(In Thousands)
<TABLE>
<CAPTION>
1997 1996
---- ----
<S> <C> <C>
Cash flows from operating activities:
Net income..................................... $ 216 $ 4
------ ------
Adjustments to reconcile net income to net cash
provided by operating activities:
Depreciation............................ 79 65
Amortization............................ 21 21
Change in assets and liabilities:
Decrease (Increase) in net receivables.... (172) (286)
Decrease (Increase) in inventories........ (26) 34
Decrease (Increase) in prepaid expenses... (4) (8)
Increase in other current assets.......... (21) (93)
Decrease (Increase) in other assets....... 60 3
Increase (Decrease) in accounts payable... 57 (37)
Increase (Decrease) in accrued expenses... 25 20
------ ------
Total adjustments....................... 19 (281)
------ ------
Net cash from operating activities..... 235 (277)
------ ------
Cash flows from investing activities:
Capital expenditures for equipment and other
long-term assets............................ (347) (133)
------ ------
Net cash from investing activities.... (347) (133)
------ ------
Cash flows from financing activities:
Proceeds from notes payable.................... 78 134
Proceeds from long-term debt................... 232 -
Principal payments under long-term debt........ (74) (59)
------ ------
Net cash from financing activities.... 236 75
------ ------
Net increase (decrease) in cash................... 124 (335)
Cash at January 1................................. 24 350
------ ------
Cash at March 31.................................. $ 148 $ 15
====== ======
</TABLE>
See accompanying notes to financial statements.
5
<PAGE> 6
RADVA CORPORATION
Notes to Financial Statements
March 31, 1997
(1) GENERAL
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
A summary of property, plant and equipment follows:
<TABLE>
<S> <C>
Land and improvements............................. $ 230,983
Buildings and improvements........................ 2,181,241
Machinery and equipment........................... 2,955,901
Transportation equipment.......................... 340,259
Office equipment.................................. 202,412
----------
$5,910,796
==========
</TABLE>
(3) ACCRUED EXPENSES
Accrued expenses are comprised of the following:
<TABLE>
<S> <C>
Payroll and employment benefits................... $ 178,485
Interest.......................................... 11,266
Other............................................. 35,009
----------
$ 224,760
==========
</TABLE>
(4) NOTES PAYABLE
Demand note, collateralized by certain accounts receivable and
inventory.
<TABLE>
<S> <C>
Interest at prime plus 2%......................... $ 378,010
----------
$ 378,010
==========
</TABLE>
6
<PAGE> 7
RADVA CORPORATION
Notes to Financial Statements
March 31, 1997
(5) LONG-TERM DEBT
A summary of long-term debt follows:
<TABLE>
<S> <C>
Installment note payable to bank, due in
monthly installments of $43,467, including
interest at prime plus 2% $ 2,714,756
Installment notes payable with various
maturities, collateralized by equipment.
Interest rates ranging from 7.25% to 12.50% 233,841
Installment note payable to bank, due in
monthly installments of $3,147.61,including
interest at prime plus 2% 147,691
Installment note payable due in monthly
installments of $500, including interest at
10.375% with a final balloon payment in August
1998, collateralized by a deed of trust on
certain real estate. 31,962
-----------
Total long-term debt 3,128,250
Less current installments of long-term debt 292,845
-----------
Long-term debt, excluding current installments $ 2,835,405
===========
</TABLE>
7
<PAGE> 8
ITEM 2 - MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
RESULTS OF OPERATIONS
RESULTS OF OPERATIONS
Net earnings were $216,000 during the first quarter of 1997 compared to only
$4,000 during the first quarter of 1996. The Shape Molding Division accounted
for $133,000 of these increased earnings on increased revenues of $236,000.
Another significant factor in the increased earnings was the receipt of a
rebate from the Company's medical insurance carrier of $108,000 as a result of
that company's conversion from a "non-profit" to a "for profit" status. This
rebate was treated as a reduction to medical insurance costs in March, 1997.
Cost of sales, as a percentage of manufacturing net revenues, decreased from
76.0% for the first quarter of 1996 to 73.2% for the first quarter of 1997.
This improvement was most notable at the Company's shape molding plant in
Portsmouth, Virginia where cost of materials were significantly reduced.
Shipping and selling expenses, as a percentage of manufacturing net revenues,
decreased from 8.6% for the first quarter of 1996 compared to 7.4% for the
first quarter of 1997. The primary decreases in these expenses occurred at the
Company's plant in Radford, Virginia as a result of cost control measures and
changes in product mix.
General and administrative expenses decreased $121,000, from $329,000 for the
first quarter of 1996 to $208,000 for the first quarter of 1997, primarily as a
result of the $108,000 insurance rebate noted above.
LIQUIDITY AND CAPITAL RESOURCES
The Company obtained a major refinancing package in December, 1995 which
significantly improved its working capital position from a negative $865,000 in
December, 1994 to a positive balance of $2,151,000 in December, 1995. The
working capital position remained high at $2,058,000 on March 31, 1997. This
financing package consisted of a $3,000,000 term loan and a $500,000 line of
credit, of which $122,000 remained available on March 31, 1997.
8
<PAGE> 9
PART II: OTHER INFORMATION
Item 1. LEGAL PROCEEDINGS
See item 3 of the Company's Form 10-K for the fiscal year ended
December 31, 1996.
Item 2. CHANGES IN SECURITIES
Not applicable.
Item 3. DEFAULTS UPON SENIOR SECURITIES
Not applicable.
Item 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITIES HOLDERS
Not applicable.
Item 5. OTHER INFORMATION
Not applicable.
Item 6. EXHIBITS AND REPORTS ON FORM 8-K 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
-------------------------------
William F. Fry
Assistant Secretary/Treasurer
May 4, 1997
9
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM BALANCE
SHEET AS OF MARCH 31, 1997 AND INCOME STATEMENT FOR THE THREE MONTHS THEN ENDED
AND IS QUALIFIED IN ITS ENTIRETY BY REFERENCE TO SUCH FINANCIAL STATEMENTS.
</LEGEND>
<MULTIPLIER> 1000
<S> <C>
<PERIOD-TYPE> 3-MOS
<FISCAL-YEAR-END> DEC-31-1997
<PERIOD-START> JAN-01-1997
<PERIOD-END> MAR-31-1997
<CASH> 148
<SECURITIES> 0
<RECEIVABLES> 606
<ALLOWANCES> 182
<INVENTORY> 935
<CURRENT-ASSETS> 4,134
<PP&E> 5,911
<DEPRECIATION> 3,146
<TOTAL-ASSETS> 8,308
<CURRENT-LIABILITIES> 2,076
<BONDS> 2,836
0
0
<COMMON> 41
<OTHER-SE> 3,355
<TOTAL-LIABILITY-AND-EQUITY> 8,308
<SALES> 2,632
<TOTAL-REVENUES> 2,632
<CGS> 1,926
<TOTAL-COSTS> 2,360
<OTHER-EXPENSES> 0
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 88
<INCOME-PRETAX> 216
<INCOME-TAX> 0
<INCOME-CONTINUING> 216
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 216
<EPS-PRIMARY> .05
<EPS-DILUTED> .05
</TABLE>
