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FORM 10-Q
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
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Quarterly Report Under Section 13 or 15(d) of the
Securities Exchange Act of 1934
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For Quarter Ended Commission File
March 31, 2000 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 X No
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At May 5, 2000, there were 3,998,027 shares of Registrant's Common Stock, $.01
par value per share, outstanding.
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RADVA CORPORATION
INDEX
Page
Number
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PART I. FINANCIAL INFORMATION:
Item 1. Financial Statements
Balance Sheets,
December 31, 1999 and March 31, 2000 3
Statements of Operations, Three Months
Ended March 31, 1999 and March 31, 2000 4
Statements of Cash Flows, Three Months
Ended March 31, 1999 and March 31, 2000 5
Notes to Financial Statements 6-7
Item 2. Management's Discussion and Analysis of
Financial Condition and Results of Operations 8
PART II. OTHER INFORMATION 9
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RADVA CORPORATION
Balance Sheets
(In Thousands)
<TABLE>
<CAPTION>
March 31 December 31
2000 1999
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<S> <C> <C>
ASSETS
Current assets:
Cash ....................................... $ (75) $ 42
-------- -------
Accounts and notes receivable .............. 2,361 2,645
Other Accounts Receivable .................. 220 223
Less allowance for doubtful accounts ....... 141 126
-------- -------
Net receivables ............................ 2,440 2,742
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Inventories:
Finished goods ........................... 428 544
Work in process .......................... 27 5
Raw materials and supplies ............... 571 270
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Total inventories ........................ 1,026 819
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Prepaid expenses ........................... 42 48
Other current assets ....................... 45 41
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Total current assets ................. 3,478 3,692
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Property, plant & equipment, at cost .......... 9,328 9,166
Less accumulated depreciation .............. 4,378 4,221
-------- -------
Net property, plant & equip .......... 4,950 4,945
-------- -------
Investment in Thermasteel Corporation ......... 262 262
Trademark manufacturing and
marketing rights ............................. 471 479
Note receivable-noncurrent .................... 2,372 2,334
Other assets .................................. 259 251
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$ 11,792 $11,963
======== =======
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Current installments of long-term debt ..... $ 680 $ 670
Notes payable .............................. 1,185 878
Accounts payable ........................... 848 898
Accrued expenses ........................... 215 213
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Total current liabilities .......... 2,928 2,659
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Long-term debt, excluding current
installments ............................... 3,906 4,069
Other Long-term debt .......................... 58 58
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Total liabilities .................. 6,892 6,786
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Stockholders' equity:
Common stock of $.01 par value .............
Authorized 10,000,000 shares; issued
and outstanding 3,998,027 ............... 40 40
Additional paid-in capital ................. 4,489 4,508
Retained earnings .......................... 371 629
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Total stockholders' equity ........ 4,900 5,177
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$ 11,792 $11,963
======== =======
</TABLE>
See accompanying notes to financial statements
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RADVA CORPORATION
Statements of Operations
Three Months Ended March 31
(In Thousands, except per share data)
<TABLE>
<CAPTION>
Three Months Ended
March 31
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2000 1999
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<S> <C> <C>
Manufacturing net revenues ......... $ 2,537 2,618
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Cost and expenses:
Cost of sales ................... 2,176 1,885
Shipping and selling ............ 213 191
General and administrative ...... 323 335
Research and development ........ -- 2
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2,712 2,413
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Operating income ................ (175) 205
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Other income (deductions):
Interest expense ................ (125) (122)
Other ........................... 42 5
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(83) (117)
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Earnings (loss) before income tax... (258) 88
Income tax expense ................. -- --
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Net earnings (loss) ................ $ (258) 88
======= ======
Earnings (loss) per common share.... $ (.06) .02
======= ======
</TABLE>
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RADVA CORPORATION
Statements of Cash Flows
Three Months Ended March 31
(In Thousands)
<TABLE>
<CAPTION>
2000 1999
---- ----
<S> <C> <C>
Cash flows from operating activities:
Net income (loss) .......................... $(258) $ 88
----- -----
Adjustments to reconcile net income to net
cash provided by operating activities:
Depreciation ............................ 158 129
Amortization ............................ 11 3
Change in assets and liabilities:
Decrease (Increase) in net receivables . 302 132
Decrease (Increase) in inventories ..... (207) 176
Decrease (Increase) in prepaid expenses 6 6
Increase in other current assets ....... (4) (40)
Increase in notes receivable-noncurrent (38) --
Decrease (Increase) in other assets .... (11) 61
Increase (Decrease) in accounts payable (50) (27)
Increase (Decrease) in accrued expenses 2 47
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Total adjustments .................... 169 487
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Net cash from operating activities ... (89) 575
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Increase (Decrease) in minority interest in
consolidated subsidiary .................... -- (95)
Cash flows from investing activities:
Capital expenditures for equipment and other
long-term assets ......................... (162) (412)
Purchase of Treasury stock ................. (20) (12)
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Net cash from investing activities ... (182) (424)
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Cash flows from financing activities:
Proceeds from notes payable ................ 307 --
Principal payments on notes payable ........ -- (536)
Proceeds from long-term debt ............... -- 407
Principal payments under long-term debt .... (153) (165)
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Net cash from financing activities ... 154 (294)
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Net increase (decrease) in cash ............... (117) (238)
Cash at January 1 ............................. 42 246
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Cash at March 31 .............................. $ (75) $ 8
===== =====
</TABLE>
See accompanying notes to financial statements.
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RADVA CORPORATION
Notes to Financial Statements
March 31, 2000
(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:
Land and improvements............................. $ 184,395
Buildings and improvements........................ 3,123,731
Machinery and equipment........................... 5,356,182
Transportation equipment.......................... 365,960
Office equipment.................................. 297,260
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$9,327,528
==========
(3) Accrued Expenses
Accrued expenses are comprised of the following:
Payroll and employment benefits................... $ 145,424
Other............................................. 69,724
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$ 215,148
(4) Notes Payable
Line of credit with commercial bank,
$1,500,000 limit, interest variable
(8.75% at March 31, 2000)......................... $1,185,204
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$1,185,204
==========
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RADVA CORPORATION
Notes to Financial Statements
March 31, 2000
(5) Long-term Debt
A summary of long-term debt follows:
Installment note payable due in aggregate
monthly installments of $350, including
interest, collateralized by equipment. $ 4,812
Installment notes payable with financing
company, due in monthly installments of
$16,404, including interest at 8.8%;
collateralized by equipment 336,229
Installment note payable, due in monthly
installments of $500, including interest at
10.625%, collateralized by a deed of
trust on certain real estate 22,808
Installment note payable, due in monthly
installments of $428, including interest at
8.5%; collateralized by equipment 4,512
Installment note payable to bank, due in
monthly installments of $11,905, including
interest at 8%, collateralized by equipment 713,787
Installment note payable to bank, due in
monthly installments of $4,762 including
interest at prime, collateralized by equipment 268,027
Installment note payable to bank, due in
monthly installments of $5,556 beginning
July 31, 2000, plus interest at prime. 400,000
Installment note payable to bank, due in monthly
installments of $27,533, including interest
at 7.75%; collateralized by real estate 2,835,933
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Total long-term debt 4,586,108
Less current installments of long-term debt 679,868
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Long-term debt, excluding current installments $3,906,240
==========
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Item 2 - Management's Discussion and Analysis of
Financial Condition and Results of Operations
Results of Operations
The Company incurred a $258,000 net loss in the first quarter of 2000 compared
to a net profit of $88,000 in the first quarter of 1999. This profit reduction
was primarily caused by a reduction in revenues of $81,000 and reduced margins
as a response by the Company to competitive pressures in the industry. The
profit reduction was mitigated by a doubling of profitable sales in a relatively
new product line for the Company. The products which resulted in the greatest
reduction in margins will be phased out in May, 2000 and be replaced by new
products separately priced which management believes will result in greater
revenues.
Cost of sales, as a percentage of manufacturing net revenues, increased from
72.0% in the first quarter of 1999 to 85.8% in the first quarter of 2000. This
increase in the cost of sales percentage is the result of a combination of
factors which include fixed cost being spread over reduced manufacturing
revenues, rapidly rising prices for the Company's primary raw material, and
increased utility and labor cost. In response to rising raw material prices, the
Company has raised prices to its customers, however many of these price
increases will only take effect in the second quarter of 2000.
Shipping and selling expense increased $22,000 and general and administrative
expenses decreased $12,000. A change in customer mix was a factor in increased
shipping expense.
Liquidity and Capital Resources
The Company has been profitable for the years 1991 through 1999. At March 31,
2000 the balance available on the Company's $1,500,000 line of credit was
$314,796 and working capital was $519,000.
Year 2000 Issue
Most of Radva processes utilize the Windows 95 platform and can handle the
Century 2000 date format presently without problems. We have upgraded our
environment to Windows NT Server and Workstations. Our server for EDI is Century
2000 date format compliant and our Accounting Department, which currently uses a
UNIX based system became Y2K compliant in May 1999 with the purchase and
installation of new software and hardware.
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<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, 1999.
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 12, 2000
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<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM BALANCE
SHEET AS OF 3/31/00 AND STATEMENTS OF OPERATIONS AND CASH FLOW FOR THE PERIOD
THEN ENDED AND IS QUALIFIED IN ITS ENTIRETY BY REFERENCE TO SUCH FINANCIAL
STATEMENTS.
</LEGEND>
<MULTIPLIER> 1,000
<S> <C>
<PERIOD-TYPE> 3-MOS
<FISCAL-YEAR-END> DEC-31-2000
<PERIOD-START> JAN-01-2000
<PERIOD-END> MAR-31-2000
<CASH> (75)
<SECURITIES> 0
<RECEIVABLES> 2,581
<ALLOWANCES> 141
<INVENTORY> 1,026
<CURRENT-ASSETS> 3,478
<PP&E> 9,328
<DEPRECIATION> 4,378
<TOTAL-ASSETS> 11,792
<CURRENT-LIABILITIES> 2,928
<BONDS> 3,906
0
0
<COMMON> 40
<OTHER-SE> 4,860
<TOTAL-LIABILITY-AND-EQUITY> 11,792
<SALES> 2,537
<TOTAL-REVENUES> 2,537
<CGS> 2,176
<TOTAL-COSTS> 2,712
<OTHER-EXPENSES> 0
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 125
<INCOME-PRETAX> (258)
<INCOME-TAX> 0
<INCOME-CONTINUING> (258)
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> (258)
<EPS-BASIC> (.06)
<EPS-DILUTED> (.06)
</TABLE>
