<PAGE> 1
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SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
----------------------
FORM 10-K/A
(MARK ONE)
/x/ ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934 (FEE REQUIRED)
FOR THE FISCAL YEAR ENDED APRIL 29, 1995
OR
/ / TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934 (NO FEE REQUIRED)
COMMISSION FILE NUMBER 0-15077
SHOREWOOD PACKAGING CORPORATION
(Exact name of registrant as specified in its charter)
DELAWARE 11-2742734
(State or other jurisdiction (IRS employer
of incorporation or organization) identification No.)
277 PARK AVENUE
(Address of principal executive offices)
10172
(Zip Code)
(212) 371-1500
Registrant's telephone number, including area code
----------------------
SECURITIES REGISTERED PURSUANT TO SECTION 12(b) OF THE ACT:
<TABLE>
<CAPTION>
TITLE OF EACH CLASS: NAME OF EACH EXCHANGE ON WHICH REGISTERED
- -------------------- -----------------------------------------
<S> <C>
None Not Applicable
</TABLE>
SECURITIES REGISTERED PURSUANT TO SECTION 12(g) OF THE ACT:
Common Stock, $.01 par value
(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 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.
As of July 26, 1995, the aggregate market value of the Registrant's
common stock held by non-affiliates of the Registrant was approximately
$263,950,080. (This figure was computed on the basis of the average of the
high and low selling prices for the Registrant's common stock on July 26,
1995). Non-affiliates include all shareholders of Registrant other than
executive officers, directors and 5% shareholders who are employees of the
Registrant. As of July 26, 1995, there were 19,239,040 shares of the
Registrant's common stock, $.01 par value per share, issued and outstanding.
The information required in Part III of this Form 10-K is incorporated
by reference from the Registrant's definitive proxy statement for the October
19, 1995 annual meeting of stockholders.
The Exhibit Index is Located on Page 27. Total Pages: 29
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<PAGE> 2
ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA
SHOREWOOD PACKAGING CORPORATION AND SUBSIDIARIES
INDEX TO CONSOLIDATED FINANCIAL STATEMENTS
<TABLE>
<CAPTION>
Page
----
<S> <C>
Independent Auditors' Report 3
Consolidated Financial Statements:
Balance Sheets at April 29, 1995 and April 30, 1994 4
Statements of Earnings, 52 weeks ended April 29, 1995, 5
April 30, 1994 and May 1, 1993
Statements of Cash Flows, 52 weeks ended April 29, 1995, 6
April 30, 1994 and May 1, 1993
Statements of Stockholders' Equity, 52 weeks ended 7
April 29, 1995, April 30, 1994 and May 1, 1993
Notes to Financial Statements 8
</TABLE>
2
<PAGE> 3
INDEPENDENT AUDITORS' REPORT
To the Board of Directors and Stockholders of
Shorewood Packaging Corporation
We have audited the accompanying consolidated balance sheets of Shorewood
Packaging Corporation and subsidiaries as of April 29, 1995 and April 30, 1994
and the related consolidated statements of earnings, stockholders' equity and
cash flows for the 52 weeks ended April 29, 1995, April 30, 1994 and May 1,
1993. These financial statements are the responsibility of the Company's
management. Our responsibility is to express an opinion on these financial
statements based on our audits.
We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to
obtain reasonable assurance about whether the financial statements are free of
material misstatement. An audit includes examining, on a test basis, evidence
supporting the amounts and disclosures in the financial statements. An audit
also includes assessing the accounting principles used and significant
estimates made by management, as well as evaluating the overall financial
statement presentation. We believe that our audits provide a reasonable basis
for our opinion.
In our opinion, such consolidated financial statements present fairly, in all
material respects, the financial position of Shorewood Packaging Corporation
and subsidiaries as of April 29, 1995 and April 30, 1994 and the results of
their operations and their cash flows for the 52 weeks ended April 29, 1995,
April 30, 1994 and May 1, 1993 in conformity with generally accepted accounting
principles.
DELOITTE & TOUCHE LLP
/s/ DELOITTE & TOUCHE LLP
New York, New York
June 27, 1995
3
<PAGE> 4
SHOREWOOD PACKAGING CORPORATION AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
(In thousands except share data)
<TABLE>
<CAPTION>
April 29, April 30,
1995 1994
---------- ----------
<S> <C> <C>
ASSETS
Current Assets:
Cash, including cash equivalents of $2,158 in 1995 and
$2,048 in 1994 . . . . . . . . . . . . . . . . . . . . . . . . . . $ 4,100 $ 2,735
Accounts receivable, less allowance for doubtful
accounts of $452 in 1995 and $231 in 1994 . . . . . . . . . . . . 40,801 38,937
Inventories . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 46,641 31,790
Deferred tax assets . . . . . . . . . . . . . . . . . . . . . . . . . 1,424 2,079
Prepaid expenses and other current assets . . . . . . . . . . . . . . 3,986 2,699
-------- --------
Total Current Assets . . . . . . . . . . . . . . . . . . . . . . . 96,952 78,240
Property, Plant and Equipment, at cost - net . . . . . . . . . . . . . . 129,153 135,376
Excess of Cost Over the Fair Value of Net Assets Acquired - net . . . . . 14,906 2,316
Other Assets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4,253 4,418
-------- --------
$245,264 $220,350
======== ========
LIABILITIES AND STOCKHOLDERS' EQUITY
Current Liabilities:
Accounts payable . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 28,122 $ 24,163
Accrued expenses . . . . . . . . . . . . . . . . . . . . . . . . . . . 14,918 10,155
Income taxes payable . . . . . . . . . . . . . . . . . . . . . . . . . 570 2,095
Current maturities of long-term debt . . . . . . . . . . . . . . . . . 21,394 10,419
-------- --------
Total Current Liabilities . . . . . . . . . . . . . . . . . . . . 65,004 46,832
Long-term Debt . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 99,793 120,493
Deferred Credit and Other long-term Liabilities . . . . . . . . . . . . . 1,314 -
Convertible Subordinated Debentures . . . . . . . . . . . . . . . . . . . - 17,500
Deferred Income Taxes . . . . . . . . . . . . . . . . . . . . . . . . . . 11,744 8,414
-------- --------
177,855 193,239
-------- --------
Commitments and Contingencies
Fair Value of Warrants, net of deferred fair value of warrants ($1,357) - -
Stockholders' Equity:
Series A preferred stock, $10 par value; 50,000
shares authorized, none issued . . . . . . . . . . . . . . . . . . . . - -
Preferred stock, $10 par value; 5,000,000 shares
authorized; none issued . . . . . . . . . . . . . . . . . . . . . . . - -
Common stock, $.01 par value; 40,000,000 shares authorized;
21,622,726 issued and 19,227,040 outstanding in 1995 and
20,163,923 issued and 17,845,923 outstanding in 1994 . . . . . . . . . 216 202
Additional paid-in capital . . . . . . . . . . . . . . . . . . . . . . . 38,670 20,244
Retained earnings . . . . . . . . . . . . . . . . . . . . . . . . . . . . 52,255 29,566
Cumulative foreign currency translation adjustments . . . . . . . . . . . (1,497) (2,013)
Less: Treasury stock (2,395,686 shares at cost in 1995
and 2,318,000 shares at cost in 1994) . . . . . . . . . . . . . . . . (22,235) (20,888)
-------- --------
67,409 27,111
-------- --------
$245,264 $220,350
======== ========
</TABLE>
The accompanying notes are an integral part of these financial statements.
4
<PAGE> 5
SHOREWOOD PACKAGING CORPORATION AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF EARNINGS
(In thousands except per share data)
<TABLE>
<CAPTION>
52 Weeks 52 Weeks 52 Weeks
Ended Ended Ended
April 29, April 30, May 1,
1995 1994 1993
---------- ---------- --------
<S> <C> <C> <C>
Net Sales . . . . . . . . . . . . . . . . . . . . . $357,033 $216,469 $184,122
-------- -------- --------
Costs and Expenses:
Cost of sales . . . . . . . . . . . . . . . . . 276,062 167,215 136,040
Selling, general and administrative . . . . . . 35,801 24,230 20,161
Restructuring charge . . . . . . . . . . . . . . - 3,400 -
-------- -------- --------
311,863 194,845 156,201
-------- -------- --------
Earnings from Operations . . . . . . . . . . . . . 45,170 21,624 27,921
Investment and other income, net . . . . . . . . . 10 903 903
Interest Expense . . . . . . . . . . . . . . . . . (8,979) (6,727) (5,385)
-------- -------- --------
Earnings Before Provision for
Income Taxes, Extraordinary Item
and Cumulative Effect of Change
in Accounting Principle . . . . . . . . . . . . 36,201 15,800 23,439
Provision for Income Taxes . . . . . . . . . . . . 13,692 6,409 8,810
-------- -------- --------
Earnings before Extraordinary Item . . . . . . . .
and Cumulative Effect of Change
in Accounting Principle . . . . . . . . . . . . 22,509 9,391 14,629
Extraordinary Item . . . . . . . . . . . . . . . . - (3,098) -
Cumulative Effect on Prior Years
(to May 2, 1992) Related to
the Adoption of SFAS 109-
Accounting for Income Taxes . . . . . . . . . . - - 1,150
-------- -------- --------
Net Earnings . . . . . . . . . . . . . . . . . . . $ 22,509 $ 6,293 $ 15,779
======== ======== ========
Per Common and Common Equivalent Share Amounts:
Earnings Before Extraordinary Item and
Cumulative Effect . . . . . . . . . . . . . . . $ 1.17 $ .52 $ .78
Extraordinary Item . . . . . . . . . . . . . . . . - (.17) -
Cumulative Effect of Change in
Accounting Principle . . . . . . . . . . . . . . - - .06
-------- -------- --------
Net Earnings per Common and Common
Equivalent Share . . . . . . . . . . . . . . . . $ 1.17 $ .35 $ .84
======== ======== ========
Weighted Average Common and Common
Equivalent Shares Outstanding . . . . . . . . . 19,314 18,089 18,866
======== ======== ========
</TABLE>
The accompanying notes are an integral part of these financial statements.
5
<PAGE> 6
SHOREWOOD PACKAGING CORPORATION AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS
(In thousands)
<TABLE>
<CAPTION>
52 Weeks 52 Weeks 52 Weeks
Ended Ended Ended
April 29, April 30, May 1,
1995 1994 1993
----------- ----------- ----------
<S> <C> <C> <C>
Cash Flows Provided from Operating Activities:
Net earnings . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 22,509 $ 6,293 $15,779
Adjustments to reconcile net earnings to net cash
flows provided from operating activities:
Cumulative effect of change in accounting . . . . . . . . . . . . . - - (1,150)
Depreciation and amortization . . . . . . . . . . . . . . . . . . . 13,335 10,245 8,086
Deferred income taxes . . . . . . . . . . . . . . . . . . . . . . . 4,030 (645) (202)
Other non-cash items . . . . . . . . . . . . . . . . . . . . . . . . 106 729 -
Changes in operating assets and liabilities, net of
effects of businesses acquired:
Accounts receivable . . . . . . . . . . . . . . . . . . . . (1,450) (4,712) (1,372)
Inventories . . . . . . . . . . . . . . . . . . . . . . . . (14,508) 542 (183)
Prepaid expenses and other current assets . . . . . . . . . (1,147) (332) 642
Other assets . . . . . . . . . . . . . . . . . . . . . . . . (520) (3,385) -
Accounts payable and accrued expenses . . . . . . . . . . . 2,888 6,399 444
Income taxes payable . . . . . . . . . . . . . . . . . . . . 1,525 638 (306)
-------- --------- -------
Net cash flows provided from operating activities . . . . . . . . . . . . 26,768 15,772 21,738
-------- --------- -------
Cash Flows Used by Investing Activities:
Business acquisitions . . . . . . . . . . . . . . . . . . . . . . . (259) (103,710) -
Capital expenditures, net . . . . . . . . . . . . . . . . . . . . . (15,585) (9,080) (11,770)
Other . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . - 8 (102)
-------- --------- -------
Net cash flows used by investing activities . . . . . . . . . . . . . . . (15,844) (112,782) (11,872)
-------- --------- -------
Cash Flows (Used by) Provided From Financing Activities:
Net increase (decrease) in short-term debt / revolver borrowings . . 247 (6,361) 3,193
Additions to long-term debt . . . . . . . . . . . . . . . . . . . . - 144,000 -
Repayment of long-term debt . . . . . . . . . . . . . . . . . . . . (10,413) (47,000) (63)
Purchase of treasury stock . . . . . . . . . . . . . . . . . . . . . (1,219) (4,181) (7,240)
Issuance of common stock . . . . . . . . . . . . . . . . . . . . . . 812 740 945
Proceeds from assignment of interest rate swap . . . . . . . . . . . 1,283 - -
-------- --------- -------
Net cash flows (used by) provided from financing activities . . . . . . . (9,290) 87,198 (3,165)
-------- --------- -------
Effect of exchange rate changes on cash and cash equivalents . . . . . . ( 269) 73 47
-------- --------- -------
Increase (decrease) in cash and cash equivalents . . . . . . . . . . . . 1,365 (9,739) 6,748
Cash and cash equivalents at beginning of year . . . . . . . . . . . . . 2,735 12,474 5,726
-------- --------- -------
Cash and cash equivalents at end of year . . . . . . . . . . . . . . . . $ 4,100 $ 2,735 $12,474
======== ========= =======
Supplemental Disclosures of Cash Flow Information:
Interest paid, net of amounts capitalized . . . . . . . . . . . . . $ 9,083 $ 6,886 $ 5,365
Income taxes paid . . . . . . . . . . . . . . . . . . . . . . . . $ 11,312 $ 4,420 $ 9,320
</TABLE>
The accompanying notes are an integral part of these financial statements.
6
<PAGE> 7
SHOREWOOD PACKAGING CORPORATION AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY
(In thousands except share data)
<TABLE>
<CAPTION>
Common Stock Cumulative
$.01 Par Value Foreign
------------------------ Additional Currency
Shares Paid-in Retained Translation
Issued Amount Capital Earnings Adjustments Treasury Stock Total
------ ------ ------- -------- ----------- -------------- -----
<S> <C> <C> <C> <C> <C> <C> <C>
Balance May 3, 1992 . . . . . . . 19,965,394 $ 200 $ 18,561 $ 7,494 $ 485 $ (9,467) $ 17,273
Issuance of Common Stock . . . . 120,412 1 944 - - - 945
Purchase of Treasury Stock . . . - - - - - (7,240) (7,240)
Net Earnings, 52 Weeks ended
May 1, 1993 . . . . . . . . . . - - - 15,779 - - 15,779
Foreign Currency
Translation Adjustments . . . . - - - - (672) - (672)
----------- ---------- -------- -------- --------- --------- ---------
Balance May 1, 1993 . . . . . . . 20,085,806 201 19,505 23,273 (187) (16,707) 26,085
Issuance of Common Stock . . . . 78,117 1 739 - - - 740
Purchase of Treasury Stock . . . - - - - - (4,181) (4,181)
Net Earnings, 52 Weeks ended
April 30, 1994 . . . . . . . . - - - 6,293 - - 6,293
Foreign Currency
Translation Adjustments . . . . - - - - (1,826) - (1,826)
----------- ---------- -------- -------- --------- --------- ---------
Balance April 30, 1994 . . . . . 20,163,923 202 20,244 29,566 (2,013) (20,888) 27,111
Issuance of Common Stock . . . . 112,649 1 939 - - (128) 812
Conversion of Subordinated
Debentures . . . . . . . . . . 1,346,154 13 17,487 - - - 17,500
Purchase of Treasury Stock . . . - - - - - (1,219) (1,219)
Net Earnings, 52 Weeks ended
April 29, 1995 . . . . . . . . - - - 22,509 - - 22,509
Other . . . . . . . . . . . . . . - - - 180 - - 180
Foreign Currency
Translation Adjustments . . . . - - - - 516 - 516
----------- ---------- -------- -------- -------- --------- --------
Balance April 29, 1995 . . . . . 21,622,726 $ 216 $ 38,670 $ 52,255 $ (1,497) $ (22,235) $ 67,409
=========== ========== ======== ======== ======== ========= ========
</TABLE>
The accompanying notes are an integral part of these financial statements.
7
<PAGE> 8
SHOREWOOD PACKAGING CORPORATION AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(In thousands except share data)
1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
a. Principles of consolidation
The consolidated financial statements include the accounts of
the Company and its subsidiaries, all of which are wholly-owned. All
significant intercompany balances and transactions have been eliminated in
consolidation.
b. Recognition of revenue
The Company reports revenue, with the related costs, in the
accounting period in which goods are shipped to the customer.
c. Statement of cash flows
The Company considers all highly liquid temporary investments
with original maturities of three months or less to be cash equivalents.
d. Inventories
Inventories are valued at the lower of cost or market. Cost
is determined principally on the first-in, first-out (FIFO) method. Components
of inventory include materials, labor and overhead costs.
e. Depreciation and amortization
The Company computes depreciation and amortization of
property, plant and equipment substantially by the straight-line method over
the shorter of the estimated useful lives or lease periods of the respective
assets. The excess of purchase price over the fair value of net assets of
businesses acquired is amortized over periods ranging from 10 to 40 years on a
straight-line basis.
The Company periodically evaluates the possible impairment of
the excess of cost over the fair value of net assets acquired by comparing the
undiscounted cash flows from the acquired operations to the net carrying value
of the related asset.
f. Income taxes
The Company and its domestic subsidiaries file a consolidated
Federal income tax return. Deferred taxes are provided for the income tax
effects of temporary differences in reporting transactions for financial
reporting and tax purposes.
The Company adopted Statement of Financial Accounting
Standards No.109 "Accounting for Income Taxes" ("SFAS 109") during the fiscal
quarter ended August 1, 1992. SFAS 109 changed the method of accounting for
income taxes from the deferred method to the liability method. Under the
deferred method, deferred income taxes were recognized using the tax rates in
effect when the tax liability was first recorded and not adjusted for
subsequent changes in the tax rates until paid or recovered. Under
8
<PAGE> 9
SHOREWOOD PACKAGING CORPORATION AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(In thousands except share data)
the liability method, deferred tax assets and liabilities are determined based
on the difference between the financial accounting and tax basis of assets and
liabilities. Deferred tax assets or liabilities at the end of each period are
determined using the currently enacted tax rate. The impact on the provision
for income taxes for fiscal 1993 was not significant. The cumulative effect of
this accounting change increased net earnings in 1993 by $1,150.
United States ("U.S.") income taxes with respect to the
undistributed earnings of the Company's foreign subsidiaries have not been
provided since it is the intention of management that the undistributed
earnings will be reinvested or transferred to the Company without giving rise
to U.S. tax liabilities. The total amount of unremitted earnings of non-U.S.
subsidiaries was approximately $24.9 million at April 29, 1995.
g. Foreign currency translation
Assets and liabilities of foreign subsidiaries are translated
into U.S. dollars at fiscal period-end exchange rates and revenues and expenses
are translated on a monthly basis at weighted average exchange rates for the
respective month. Gains and losses arising from translation are recorded as
foreign currency translation adjustments, a component of stockholders' equity.
Foreign currency transaction gains and losses are included in determining net
earnings.
h. Share information
Weighted average common and common equivalent shares
outstanding include the dilutive effect of outstanding stock options and
warrants for all periods presented.
Fully diluted earnings per share has not been presented as it
is not materially different from primary earnings per share.
Weighted average common and common equivalent shares for the
1995 period include the effect of the shares issued upon conversion of the
Company's Convertible Subordinated Debentures since the date of conversion.
Had these shares been issued as of May 1, 1994, earnings per share for the 1995
period would have been approximately $1.15.
i. Business segment
The Company and its subsidiaries operate in one business
segment, providing printed packaging products to the entertainment, cosmetic,
tobacco and other consumer product industries.
j. Fiscal periods
Reference to 1995, 1994, and 1993 in the accompanying notes to
the consolidated financial statements refer to the fiscal periods ending April
29, 1995, April 30, 1994 and May 1, 1993, respectively.
9
<PAGE> 10
SHOREWOOD PACKAGING CORPORATION AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(In thousands except share data)
k. Reclassifications
Certain reclassifications have been made to the prior years
balances to conform with the current year's presentation.
2. ACQUISITIONS
Effective January 1, 1994, the Company purchased certain of the
United States and Canadian assets of the Premium Packaging Group of Cascade
Paperboard International, Inc. (the "Premium Group") for a cash purchase price
of approximately $96.9 million plus the assumption of approximately $9.9
million of liabilities (primarily accounts payable) and transaction expenses.
In addition, the Company is contingently liable for an additional $5.0 million
of consideration if certain earnings levels related to the combined operations
during the four-year period following the consummation of the transaction are
attained. The Company has issued a warrant to the seller exercisable, subject
to the above-described contingency, for 35,000 shares of Company Common Stock
at an exercise price of $13.50 per share. At the time of the closing of the
transaction, the Company prepaid a total of $31.9 million of Senior Notes. The
transaction and prepayment of the Company's Senior Notes were financed with
senior credit facilities including $120 million in five-year term loans and $24
million of borrowing under a $50 million five-year revolving credit facility.
In connection with the prepayment of the Senior Notes, the Company recorded, in
the third quarter of fiscal 1994, an extraordinary charge of $3.1 million
(after related income tax benefit of $1.9 million) consisting of prepayment
penalties and the write-off of deferred finance costs.
On January 17, 1994 the Company purchased the operating assets of
Heminway Packaging Corporation for a cash purchase price of $3.7 million plus
transaction expenses. This transaction was financed with funds from the
Company's revolving credit facility referred to above. The historical results
of operations of Heminway were not material to the operations of the Company.
These acquisitions were recorded using the purchase method of
accounting and accordingly, the results of their operations are included in the
consolidated results of operations of the Company since the dates of their
respective acquisitions. The excess of cost over the estimated fair value of
the net assets acquired approximated $2.2 million at April 30, 1994. During
fiscal 1995, the Company completed its determination of the allocation of the
purchase price with respect to the acquisitions. The result was to increase
the excess of cost over the fair value of net assets acquired by $12.5
million, increase accrued expenses by $3.4 million and reduce property, plant
and equipment by $9.1 million. Included in the final allocation of the
purchase price is an estimate of the cost associated with closing one of the
Premium Group's facilities. Accumulated amortization of the excess of cost
over the fair value of net assets acquired approximated $543 in 1995 and $414
in 1994.
The following unaudited pro forma information for 1994 includes
the operations of the Company inclusive of the operations of the Premium Group
as if the acquisition had occurred at the beginning of the period presented,
including the impact of the Company's new financing agreement described above,
the amortization expense associated with intangible assets acquired,
adjustments related to the fair market value of the assets and liabilities of
the Premium Group as finally determined (including, among other things,
adjustment of depreciation expense) and related income tax effects.
10
<PAGE> 11
SHOREWOOD PACKAGING CORPORATION AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL
STATEMENTS (In thousands
except share data)
<TABLE>
<CAPTION>
Fiscal 1994
-----------
<S> <C>
Net sales $ 300,792
==========
Earnings before extraordinary item and
and cumulative effect of change $ 12,043
==========
in accounting principle
Net earnings $ 8,945
==========
Per Common and common equivalent share amounts:
Earnings before extraordinary item and
cumulative effect of change
in accounting principle $ .67
==========
Net earnings $ .50
==========
</TABLE>
3. INVENTORIES
<TABLE>
<CAPTION>
1995 1994
--------- -----------
<S> <C> <C>
Raw materials and supplies $ 20,767 $ 11,714
Work-in-process 12,043 7,091
Finished goods 13,831 12,985
--------- ---------
$ 46,641 $ 31,790
========= ===========
</TABLE>
4. PROPERTY, PLANT AND EQUIPMENT, AT COST-NET
<TABLE>
<CAPTION>
1995 1994
-------- --------
<S> <C> <C>
Land $ 3,121 $ 2,330
Building and improvements 31,385 30,218
Machinery and equipment 148,176 144,042
Leasehold improvements 2,735 2,371
Construction in progress 4,868 5,081
-------- --------
190,285 184,042
Less accumulated depreciation and
Amortization 61,132 48,666
-------- --------
$129,153 $135,376
======== ========
</TABLE>
11
<PAGE> 12
SHOREWOOD PACKAGING CORPORATION AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(In thousands except share data)
Depreciation and amortization of property, plant and equipment amounted to
$12,792 in 1995, $9,834 in 1994 and $7,888 in 1993. Capitalized interest costs
related to the construction of fixed assets were $377 in 1995 and $131 in 1994
and 1993.
5. ACCRUED EXPENSES
<TABLE>
<CAPTION>
1995 1994
------------ ------------
<S> <C> <C>
Accrued salaries, employee benefits
and payroll taxes $ 6,026 $ 5,523
Other accrued expenses 8,892 4,632
------------- -------------
$ 14,918 $ 10,155
============= =============
</TABLE>
6. LONG-TERM DEBT/CONVERTIBLE SUBORDINATED DEBENTURES
<TABLE>
<CAPTION>
1995 1994
------------ ------------
<S> <C> <C>
Senior term notes (a) $ 108,940 $ 118,912
Long-term revolver (b) 12,247 12,000
------------- -------------
121,187 130,912
Less current maturities 21,394 10,419
------------- -------------
$ 99,793 $ 120,493
============= =============
Convertible subordinated debentures (c) - $ 17,500
============= =============
</TABLE>
- ---------------------
(a) In connection with the acquisition of the Premium Group and the prepayment
of certain obligations, the Company entered into Term Note Agreements
(totaling $96 million in the U.S. and the Canadian equivalent of $24
million in Canada) with a syndicate of banks. The notes are payable in
quarterly installments beginning in August 1994, through May 1999. The
notes bear interest, at the discretion of the Company, at either the bank's
prime rate (9.00% at April 29, 1995) or at the LIBOR rate (maximum
six-month term, 6.06% to 6.38% at April 29, 1995) plus 75 basis points
(reduced from 125 basis points during the year as determined based upon the
Company having attained certain financial ratios as defined). The
effective interest rate on the Senior Term Notes ranged from 5.25% to 7.06%
during 1995. The Company has pledged as collateral 100% and 66%,
respectively, of the outstanding shares of its domestic and foreign
subsidiaries.
(b) Borrowings under this $50 million five-year revolving credit facility are
limited to the sum of 80% of accounts receivable and 50% of inventories
(the "Borrowing Base"). The revolving credit facility has interest terms
and collateral similar to the Senior Term Notes and matures in May 1999.
The interest rate on these borrowings ranged from 6.94% to 9.0% at April
29, 1995.
(c) In September 1994, 100% of the Company's Convertible Subordinated Notes
were converted at $13.00 per share into approximately 1.35 million shares
of common stock.
12
<PAGE> 13
SHOREWOOD PACKAGING CORPORATION AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(In thousands except share data)
The underlying loan agreement for the borrowings referred to in (a)
and (b) above includes covenants related to levels of debt to cash flow,
current assets to current liabilities, fixed charge coverage, net worth and
investments (including investments in the Company's own common stock), and
restricts the amount of retained earnings available for payment of dividends.
Retained earnings free from restrictions at April 29, 1995 approximated $14.4
million. The agreement requires the Company to prepay the term notes to the
extent of 50% of excess cash flow as defined. For the year ended April 29,
1995, there was no excess cash flow as defined.
Based on the borrowing rates currently available to the Company for bank loans
with similar terms, the fair value of the senior long-term debt approximates
the carrying value.
Aggregate maturities of long-term debt are as follows:
<TABLE>
<CAPTION>
Fiscal Year Ending:
-------------------
<S> <C>
1996 $ 21,394
1997 23,879
1998 27,606
1999 28,849
2000 19,459
---------
$ 121,187
=========
</TABLE>
Interest Rate Swap/Cap Agreements
At April 29, 1995, the Company had an outstanding
intermediate-term interest rate swap agreement relating to approximately $33
million of its Senior Term Notes. Under the agreement, the Company pays a
fixed rate of 6.45% and receives a floating rate based on LIBOR, as determined
in 1-month intervals (ranging from 4.5% to 6.3% for 1995). The transaction
effectively changes a portion of the Company's interest rate exposure from a
floating-rate to a fixed-rate basis. The fair value of the interest rate swap
agreement at April 29, 1995 was immaterial to the Company. The agreement
terminates in February, 1997.
At April 29, 1995, the Company had an outstanding interest rate cap
agreement relating to approximately $17 million of its Senior Term Notes.
Under the agreement, the maximum LIBOR rate is 8.5%. The company paid $71 for
this agreement, which is being amortized over the life of the agreement. The
fair value of the interest rate cap agreement at April 29, 1995 was immaterial
to the Company. The agreement terminates in February, 1997.
In October 1994, the Company assigned to a bank an interest rate swap
agreement relating to $42 million of its Senior Term Notes for cash proceeds
approximating $1.3 million. The proceeds have been recorded as a deferred
credit on the accompanying balance sheet which is being amortized as a
reduction of interest expense over the remaining life of the related swap
agreement. At April 29, 1995, $913 of deferred gain remains which will be
amortized: $510 in 1996; $289 in 1997; and $114 in 1998.
13
<PAGE> 14
SHOREWOOD PACKAGING CORPORATION AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(In thousands except share data)
7. INCOME TAXES
Earnings before provision for income taxes and extraordinary item is
comprised of the following:
<TABLE>
<CAPTION>
1995 1994 1993
------- ------- -------
<S> <C> <C> <C>
United States $ 21,919 $ 6,586 $20,282
Foreign 14,282 9,214 3,157
--------- -------- --------
$ 36,201 $15,800 $23,439
======== ======= =======
</TABLE>
The provision for income taxes is comprised of the following:
<TABLE>
<CAPTION>
1995 1994 1993
------- ------- -------
<S> <C> <C> <C>
Current
Federal $ 4,982 $ 2,858 $ 6,611
State and local 852 773 1,100
Foreign 3,828 3,423 1,301
------- ------- -------
9,662 7,054 9,012
------- ------- -------
Deferred
Federal 2,339 (394) (47)
State and local 174 (236) (147)
Foreign 1,517 (15) (8)
------- ------- -------
4,030 (645) (202)
------- ------- -------
$13,692 $ 6,409 $ 8,810
======= ======= =======
</TABLE>
The Company's effective income tax rate differs from the statutory
U.S. Federal income tax rate as a result of the following:
<TABLE>
<CAPTION>
1995 1994 1993
-------- --------- ---------
<S> <C> <C> <C>
Statutory US Federal tax rate 35.0% 34.0% 34.0%
State income taxes, net of Federal benefit 1.8 2.3 3.0
Foreign income tax rate differentials 1.0 1.7 .9
Other, net - 2.6 (.3)
------- -------- -------
37.8% 40.6% 37.6%
======= ======== =======
</TABLE>
14
<PAGE> 15
SHOREWOOD PACKAGING CORPORATION AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(In thousands except share data)
The tax effects of significant items comprising the Company's net
deferred tax liability as of April 29, 1995 and April 30, 1994 are as follows:
<TABLE>
<CAPTION>
Deferred tax asset (liability): 1995 1994
------------- -------------
<S> <C> <C>
Property, plant and equipment $ (12,360) $ (7,934)
Other assets (359) (249)
Accounts receivable 509 398
Inventories 666 487
Accrued expenses 138 673
State net operating loss and
investment tax credit
carryforwards 1,285 564
Employee benefits 297 144
Other 195 (128)
------------ -------------
(9,629) (6,045)
Valuation Allowance (691) (290)
------------- -------------
$ (10,320) $ (6,335)
============= =============
</TABLE>
The valuation allowance has been provided against state net operating
loss and investment tax credit carryforwards to reduce them to the amount that
will more likely than not be realized.
8. COMMITMENTS AND CONTINGENCIES
a. Lease Agreements
The Company is committed for annual rentals under noncancellable
operating leases for production and office facilities expiring on various dates
through 2010. Several leases include one year renewal options. The minimum
future rental commitments under noncancellable leases, exclusive of taxes and
utilities, are as follows:
<TABLE>
<CAPTION>
Fiscal Year Ending:
-------------------
<S> <C>
1996 $ 3,861
1997 3,790
1998 2,989
1999 2,686
2000 1,865
Thereafter 11,434
--------
Total minimum rental payments $ 26,625
========
</TABLE>
Rent expense under operating leases approximated $3,451 in 1995,
$2,403 in 1994 and $2,125 in 1993.
15
<PAGE> 16
SHOREWOOD PACKAGING CORPORATION AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(In thousands except share data)
b. Treasury Stock
In January, 1993, the Company's Board of Directors authorized the
purchase of up to 2.0 million shares of the Company's Common Stock from time to
time in the open market. Pursuant to this authorization through April 29,
1995, the Company, utilizing internally generated funds, purchased
approximately 1.2 million shares of its Common Stock for approximately $12.6
million.
c. New Facility
In connection with a planned expansion of the Company's facilities,
the Company anticipates investing approximately $20 million in a new plant and
equipment, of which approximately $.8 million has been disbursed as of April
29, 1995. Funds for this expansion are to be provided from the Company's
existing credit facilities.
d. Legal Matters
In January 1995, the Company commenced a civil action in the Supreme
Court of the State of New York against the former owners of Heminway Packaging
Corporation and certain of its affiliates seeking compensatory and punitive
damages and other relief. The suit contends that the defendants misrepresented
the financial condition and operational capabilities of the acquired business.
The Company is seeking damages in excess of $5.0 million. In June 1995, the
defendants filed an answer and a counterclaim to the Company's complaint,
seeking compensatory damages exceeding $10.0 million and punitive damages of
$7.7 million. Management intends to pursue its claims against the defendants
and to vigorously defend the counter claim, and believes that the ultimate
outcome of these cases will not have a material adverse effect on the
operations or financial condition of the Company.
e. Other Matters
On a continuing basis, the Company monitors its compliance with
applicable environmental laws and regulations. As part of this process the
Company cooperates with appropriate governmental authorities to perform any
necessary testing and compliance procedures. The purchase agreements relating
to the acquisition of the Acquired Companies indemnify the Company from all
costs and expenses relating to environmental matters which existed at the
acquired facilities on or prior to the respective closing dates. The Company
is not currently aware of any environmental compliance matters that it
believes will have a material effect on the consolidated financial statements.
9. STOCKHOLDERS' EQUITY
a. Stock Incentive Plans
In August 1986, the Company established a nonqualified stock option
plan (the "1986 Plan") and authorized the issuance of options to purchase an
aggregate 847,500 shares of common stock to key
16
<PAGE> 17
SHOREWOOD PACKAGING CORPORATION AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(In thousands except share data)
employees, officers and directors at the market price at the date of the grant.
In October 1990, the Company made available for future grant options to acquire
an additional 600,000 shares of common stock under a nonqualified 1990 Stock
Option Plan (the "1990 Plan"). The 1990 Plan is in all material respects
identical to the original nonqualified stock plan. In July 1993, the Company
established the 1993 Incentive Program (the "1993 Program"). The 1993 Program
permits the granting of any or all of the following types of awards: (1) stock
options, including incentive stock options ("ISO's"), (2) stock appreciation
rights ("SAR's"), in tandem with stock options or freestanding, (3) restricted
stock, (4) directors' options to be issued pursuant to a prescribed formula and
(5) restored options. Under the 1993 Program, an additional 1 million shares
were made available for grant. Options become exercisable over four years from
the date of grant at a rate of 25% each year, and expire five years from the
date of grant. Future grants of options will be exercisable over five years
from the date of grant at the rate of 20% of the grant each year and will
expire 10 years from the date of grant.
A summary of changes in stock options and awards follows:
<TABLE>
<CAPTION>
Options Outstanding Options
Available ------------------------------------------
For Future Price
Grant Number Per Share
----------- ---------------- ----------------
<S> <C> <C> <C>
Balance, May 3, 1992 539,513 673,465 $ 4.81 - $ 10.69
Options granted (12,000) 12,000 $ 9.50
Options exercised (117,412) $ 4.81 - $ 10.34
Options canceled 11,446 (11,446) $ 5.57 - $ 8.63
Options lapsed (184,973)
---------- --------- ------- --------
Balance May 1, 1993 353,986 556,607 $ 4.98 - $ 10.69
1993 Program 1,000,000
Options granted (375,500) 375,500 $ 8.63 - $ 13.75
Options exercised (78,117) $ 4.98 - $ 10.69
Options canceled $4,446 (4,446) $ 7.25 -
---------- --------- ------- --------
Balance April 30, 1994 982,932 849,544 $ 4.98 - $ 13.75
Restricted Stock Award (114,497)
Options granted (271,320) 271,320 $ 14.75 - $ 20.25
Options exercised (94,651) $ 4.98 - $ 9.81
Options canceled 43,586 (43,586) $ 8.50 - $ 19.00
--------- -------- ------- --------
Balance April 29, 1995 640,701 982,627 $ 5.57 - $ 20.25
========= ======= ======= ========
</TABLE>
Options previously authorized under the 1986 Plan which were not granted as
of the end of fiscal 1993 were considered to have lapsed and no longer
available for future grant. At April 29, 1995, options to purchase 361,554
shares were exercisable at prices ranging from $5.57 to $14.25 per share.
During fiscal 1995 the Company issued a net 114,497 shares of restricted stock
to certain key employees. A
17
<PAGE> 18
SHOREWOOD PACKAGING CORPORATION AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(In thousands except share data)
portion or all of the shares may vest at the end of fiscal 1997 based upon the
market performance of the Company's common stock. Any shares that do not vest
at such time will otherwise vest at the end of fiscal 2002 if the employee
continues to be employed by the Company.
b. Common Stock Purchase Warrants
During fiscal 1993 and the fourth quarter of fiscal 1994, the Company
issued Warrants to purchase 300,000 shares and 100,000 shares of its Common
Stock at exercise prices of $6.88 and $13.50 per share, respectively, to a
customer who concurrently entered into long-term supply agreements with the
Company. The customer has the choice of either exercising the Warrants or
receiving a cash volume discount based upon certain minimum levels of purchases
from the Company during the terms of the supply agreements. The Warrants are
exercisable immediately whereas the cash volume rebate, if any, is payable
after the expiration of the supply agreements. The Warrants expire August 22,
1997 and August 31, 1998, respectively. At such time as the customer may
choose to exercise either of the Warrants, the related accrued cash rebate will
be transferred to additional paid in capital. The fair values of the Warrants
at their dates of issuance were determined to be $855 and $502, respectively,
and are included in the balance sheet net of a deferred contra account in like
amount. As of April 29, 1995, the Company continues to believe that the
customer will exercise the first Warrant and continues to accrue volume
discounts based upon sales with respect to the second Warrant.
c. Reserved Shares
At April 29, 1995, 2,073,149 common shares were reserved for issuance
under the stock incentive plans and outstanding warrants .
d. Preferred Stock Purchase Rights
On May 4, 1995, the Board of Directors declared a dividend of one
preferred share purchase right (a "Right") for each outstanding share of common
stock. Each Right entitles the holder to purchase from the Company one
one-hundredth of a share of Series B Junior Participating Preferred Stock at a
price of $17.00 per one one-hundredth of a preferred share. The Rights are
exercisable only if an acquiring person acquires, or announces the intention to
acquire, 25% or more beneficial ownership of the outstanding common shares.
The effect of the Rights plan is to provide to the Company's stockholders the
right, upon the occurrence of an acquisition, tender offer or business
combination transaction, to exchange the preferred shares for common stock at a
fraction of the then-current market price of the common stock. The Rights
expire on June 14, 2005 unless extended. The Rights are subject to other
restrictions and terms as described in the Rights Agreement.
e. Related Party Transactions
18
<PAGE> 19
SHOREWOOD PACKAGING CORPORATION AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(In thousands except share data)
CIGNA Corporation and its affiliates ("CIGNA"), was the holder of
$15.0 million of the Company's debentures, which upon conversion represented
1.15 million shares of common stock. Accordingly, CIGNA has been considered a
beneficial owner of more than 5% of the outstanding stock of the Company for
all of the periods presented. Amounts paid to CIGNA for interest and insurance
costs for 1995 were $685, as compared to $2,918 in 1994, and $3,711 in 1993.
In addition, in connection with the financing of the acquisition of the Premium
Group in January, 1994, the Company prepaid $16.9 million of Senior Notes due
to CIGNA, and incurred a pre-tax prepayment penalty to CIGNA of $2.3 million.
This penalty is included in the 1994 financial statements as a part of the
total extraordinary item of approximately $3.1 million (after income tax
benefit of $1.9 million).
In connection with the acquisition of the Premium Group and related
financing, the Company paid a fee of $1.5 million to a firm whose president and
principal shareholder is a director of the Company. In addition, the firm
holds an option to purchase 14,821 common shares at an exercise price of $5.02
per share.
10. RESTRUCTURING CHARGE
As a result of the discontinued use of the long-box as a packaging
medium for compact discs and the related diminished level of sales, the Company
decided at the end of the third quarter of fiscal 1994 to close its
Farmingdale, New York facility effective as of April 30, 1994. In connection
with the closing of this facility and the restructuring of the Company's
operations relating thereto, the Company recorded a restructuring charge before
provision for income taxes amounting to $3.4 million during 1994. Included in
this charge are amounts provided for the termination of leases ($530), disposal
of equipment ($1,020), severance payments ($750) and other related
restructuring items ($1,100). With the exception of the lease commitments, all
of the respective cash outlays related to the closing of the facility were made
by the end of 1995.
11. EMPLOYEE BENEFIT PLANS
(a) Defined Contribution Plans
The Company has profit sharing plans as well as employee savings
plans. Based upon the provisions of each employee savings plan, the Company
matches a portion of the employees' voluntary contributions. The amounts
contributed to the profit sharing plan in the United States are at the
discretion of the Board of Directors, whereas the amounts contributed to the
profit sharing plans in Canada are at the percentages provided for by the
respective plans. Total provisions with respect to defined contribution plans
approximated $1,613, $977 and $824 in 1995, 1994 and 1993, respectively.
19
<PAGE> 20
SHOREWOOD PACKAGING CORPORATION AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(In thousands except share data)
(b) Defined Benefit Plans
In connection with the acquisitions of the Premium Group and Heminway,
the Company assumed the obligations related to two defined benefit pension
plans covering union employees. In addition, the Company established a frozen
plan to accept assets to be transferred from a Premium Group defined benefit
pension plan, which assets relate to non-union employees who have been
transferred to and are now employees of the Company.
The following table sets forth the funded status of the Plans as of
April 29, 1995 and April 30, 1994:
<TABLE>
<CAPTION>
1995 1994
------ ------
<S> <C> <C>
Vested benefit obligation $ 2,782 $ 2,616
======== ========
Accumulated benefit obligation $ 3,029 $ 2,923
======== ========
Projected benefit obligation $ 3,029 $ 2,923
Market value of assets 3,059 3,275
-------- --------
Plan assets in excess of projected
benefit obligation 30 352
Unrecognized transition obligation - -
Unrecognized prior service cost 22 -
Unrecognized loss/(gain) (203) (452)
--------- ---------
Prepaid/(accrued) pension cost $ (151) $ (100)
========= =========
Discount rate and expected rate
of return on plan assets 8% 8%
======== ========
</TABLE>
12. MAJOR CUSTOMER AND CREDIT CONCENTRATIONS
Approximately 17% and 13% of net sales during 1995 were derived from
sales to two customers and their affiliates. Approximately 18% of net sales
during 1993 were derived from sales to one customer and its affiliates. No
other customer accounted for more than 10% of net sales in any of the three
fiscal years ended April 29, 1995.
The Company's customers are primarily large entertainment, tobacco
and other consumer products companies who produce products in the United States
and Canada. At April 29, 1995, approximately 43% and 14% of accounts
receivable related to customers in the tobacco and music industries,
respectively. Approximately 42% of accounts receivable are due from Canadian
companies.
20
<PAGE> 21
SHOREWOOD PACKAGING CORPORATION AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(In thousands except share data)
13. GEOGRAPHIC OPERATIONS
<TABLE>
<CAPTION>
1995 1994 1993
------- -------- ------
<S> <C> <C> <C>
Net Sales
Domestic . . . . . . . . . . . . . . . . . . $ 219,218 $ 142,028 $ 137,405
Foreign . . . . . . . . . . . . . . . . . . 137,815 74,441 46,717
---------- ---------- ----------
$ 357,033 $ 216,469 $ 184,122
========== ========== ==========
Net Earnings
Domestic (a) . . . . . . . . . . . . . . . . $ 13,572 $ 487 $ 13,916
Foreign . . . . . . . . . . . . . . . . . . 8,937 5,806 1,863
---------- ---------- ----------
$ 22,509 $ 6,293 $ 15,779
========== ========== ==========
Identifiable Assets At Year-End
Domestic . . . . . . . . . . . . . . . . . . $ 165,388 $ 152,821 $ 87,371
Foreign . . . . . . . . . . . . . . . . . . 79,876 67,529 25,389
---------- ---------- ----------
$ 245,264 $ 220,350 $ 112,760
========== ========== ==========
</TABLE>
The Company's foreign operations are conducted in Canada.
(a) After an extraordinary charge of $3,098 in 1994 and a cumulative effect
credit of $1,150 in 1993.
21
<PAGE> 22
PART IV
ITEM 14. EXHIBITS, FINANCIAL STATEMENT SCHEDULES AND REPORTS ON FORM 8-K
(a)(1) Financial Statements. See "Index to Financial Statements and
Supplementary Data" in Item 8.
(a)(2) Financial Statements Schedules. The financial statement
schedules have not been included because they are not
applicable or the information is included in financial
statements or notes thereto.
(a)(3) Exhibits
<TABLE>
<CAPTION>
NUMBER DESCRIPTION
- ------ -----------
<S> <C> <C>
3.1 -- Certificate of Incorporation of the Company, as amended, incorporated by reference to the corresponding Exhibit item
to Registration Statement on Form S-1, as amended, as filed with the Commission on September 4, 1986, Commission File
No. 33-8490.
3.2 -- Amended and Restated By-laws of the Company, incorporated by reference to the corresponding Exhibit item to Amendment
No. 1 to Registration Statement on Form S-1, as filed with the Commission on October 20, 1986, Commission File No. 33-
8490.
9.1 -- Intentionally Omitted.
10.1 -- through 10.4 Intentionally Omitted.
10.5 -- Agreement of Lease dated May 20, 1977 between Frank X. Mascioli and Shorewood Packaging Corporation, a New York
corporation, relating to premises located at 55 Engineers Lane, Farmingdale, New York, incorporated by reference to
the corresponding Exhibit item to Registration Statement on Form S-1, as amended, as filed with the Commission on
September 4, 1986, Commission File No. 33-8490.
10.6 -- and 10.7 Intentionally Omitted.
10.8 -- Lease dated June 13, 1979 between Ravin Investments Limited and Shorewood Packaging Corp. of Canada Limited, as
amended as of March 14, 1983, between Pension Fund Realty Limited and Shorewood Packaging Corp. of Canada Limited,
relating to premises located at 2220 Midland Avenue, Scarborough, Ontario, Canada, incorporated by reference to the
corresponding Exhibit item to Registration Statement on Form S-1, as amended, as filed with the Commission on
September 4, 1986, Commission File No. 33-8490.
10.9 -- Lease Agreement dated November 1, 1984 between The Beneficiary Of Land Trust Established With American National Bank
and Trust Company of Chicago and Shorewood Packaging Company of Illinois, Inc., relating to the Countryside Executive
Center in Palatine, Illinois, incorporated by reference to the corresponding Exhibit item to Registration Statement on
Form S-1, as amended, as filed with the Commission on September 4, 1986, Commission File No. 33-8490.
10.10 -- through 10.39 Intentionally Omitted.
10.40 -- Non-Competition Agreement dated as of June 20, 1985 between Shorewood Packaging Corporation of New York and Paul B.
Shore, incorporated by reference to the corresponding Exhibit item to Registration Statement on Form S-1, as amended,
as filed with the Commission on September 4, 1986, Commission File No. 33-8490.
10.41 -- Non-Competition Agreement dated as of June 20, 1985 between Shorewood Packaging Corporation of New York and Marc P.
Shore, incorporated by reference to the corresponding Exhibit item to Registration Statement on Form S-1, as amended,
as filed with the Commission on September 4, 1986, Commission File No. 33-8490.
</TABLE>
22
<PAGE> 23
<TABLE>
<S> <C> <C>
10.42 -- Non-Competition Agreement dated as of June 20, 1985 between Shorewood Packaging Corporation of New York and Floyd
Glinert, incorporated by reference to the corresponding Exhibit item to Registration Statement on Form S-1, as
amended, as filed with the Commission on September 4, 1986, Commission File No. 33-8490.
10.43 -- Non-Competition Agreement dated as of June 20, 1985 between Shorewood Packaging Corporation of New York and Murray B.
Frischer, incorporated by reference to the corresponding Exhibit item to Registration Statement on Form S-1, as
amended, as filed with the Commission on September 4, 1986, Commission File No. 33-8490.
10.44 -- Non-Competition Agreement dated as of June 20, 1985 between Shorewood Packaging Corporation of New York and Charles
Kreussling, incorporated by reference to the corresponding Exhibit item to Registration Statement on Form S-1, as
amended, as filed with the Commission on September 4, 1986, Commission File No. 33-8490.
10.45 -- Non-Competition Agreement dated as of June 20, 1985 between Shorewood Packaging Corporation of New York and Kenneth
Rosenblum, incorporated by reference to the corresponding Exhibit item to Registration Statement on Form S-1, as
amended, as filed with the Commission on September 4, 1986, Commission File No. 33-8490.
10.46 -- through 10.50 Intentionally Omitted.
10.51 -- Lease dated as of April 30, 1987 between Shorewood Packaging Corporation and Blamore Real Estate Company relating to
the premises located at 10 East 53rd Street, New York, New York, incorporated by reference to the corresponding
Exhibit item to Registration Statement on Form S-1, as amended, as filed with the Commission on June 5, 1987,
Commission File No. 33-14395.
10.52 -- through 10.56 Intentionally Omitted.
10.57 -- Asset Purchase Agreement, dated as of August 1, 1988, by and among Goody Products, Inc., Southeastern Box Co., Inc.,
Shorewood Packaging Corporation and Shorewood Box Co., Inc., incorporated by reference to the corresponding Exhibit
item to Quarterly Report on Form 10-Q for the quarter ended July 30, 1988 filed with the Commission on August 30,
1988, Commission file No. 0-15077.
10.58 -- Agreement, dated August 1, 1988, by and between Goody Products, Inc. and Shorewood Packaging Corporation, incorporated
by reference to the corresponding Exhibit item to Quarterly Report on Form 10-Q for the quarter ended July 30, 1988
filed with the Commission on August 30, 1988. Commission file No. 0-15077.
10.59 -- through 10.77 Intentionally Omitted.
10.78 -- Asset Purchase Agreement dated December 23, 1993 by and among Shorewood Paperboard Corporation Limited, Shorewood
Acquisition Corporation of Delaware, Paperboard Industries Corporation and Paperboard Industries Inc. incorporated by
reference to the corresponding exhibit item to Form 8-K Current Report of Shorewood Packaging Corporation filed with
the Commission on January 28, 1994, Commission File No. 0-15077.
10.79 -- Sheeter Purchase Agreement dated December 23, 1993 by and among Shorewood Acquisition Corporation of Delaware and
Paperboard Industries Inc. incorporated by reference to the corresponding exhibit item to Form 8-K Current Report of
Shorewood Packaging Corporation filed with the Commission on January 28, 1994, Commission File No. 0-15077.
10.80 -- Restated and Amended Credit Agreement dated February 25, 1994 between Shorewood Packaging Corporation, Shorewood
Corporation of Canada Limited and NationsBank of North Carolina, N.A. and The Bank of Nova Scotia incorporated by
reference to the corresponding exhibit item to Shorewood Packaging Corporation's quarterly report on Form 10-Q for the
fiscal quarter ended January 29, 1994, as filed with the Commission on March 15, 1994, Commission File No. 0-15077.
</TABLE>
23
<PAGE> 24
<TABLE>
<S> <C> <C>
10.81 -- Trademark License Agreement dated January 14, 1994 between Paperboard Industries Inc. and Shorewood Acquisition
Corporation of Delaware incorporated by reference to the corresponding exhibit item to the Company's annual report on
Form 10-K for the fiscal year ended April 30, 1994, as filed with the Commission on July 29, 1994, Commission File No.
O-15077.
10.82 -- Non-Competition Agreement dated January 14, 1994 between Cascades Inc., Cascades Paperboard International Inc.,
Paperboard Industries Corporation, Paperboard Industries Inc., Shorewood Packaging Corporation, Shorewood Paperboard
Corporation Limited and Shorewood Acquisition Corporation of Delaware incorporated by reference to the corresponding
exhibit item to the Company's annual report on Form 10-K for the fiscal year ended April 30, 1994, as filed with the
Commission on July 29, 1994, Commission File No. O-15077.
10.83 -- First Amendment to Restated and Amended Credit Agreement dated July 18, 1994 between Shorewood Packaging Corporation,
Shorewood Corporation of Canada Limited and NationsBank of North Carolina, N.A. and The Bank of Nova Scotia
incorporated by reference to the corresponding exhibit item to the Company's annual report on Form 10-K for the fiscal
year ended April 30, 1994, as filed with the Commission on July 29, 1994, Commission File No. O-15077.
10.84 -- Amendment, as of January 14, 1994, to Note Purchase Agreement dated as of June 27, 1991 between Shorewood Packaging
Corporation and each of Connecticut General Life Insurance Company, Inc., Mezzanine Partners II, L.P., Life Insurance
Company of North America and The Prudential Insurance Company of America incorporated by reference to the
corresponding exhibit item to the Company's annual report on Form 10-K for the fiscal year ended April 30, 1994, as
filed with the Commission on July 29, 1994, Commission File No. O-15077.
10.85 -- Asset Purchase Agreement dated January 17, 1994 between Shorewood/Heminway Acquisition Corporation and Heminway
Packaging Corporation (omitting schedules and exhibits) incorporated by reference to the corresponding exhibit item to
the Company's annual report on Form 10-K for the fiscal year ended April 30, 1994, as filed with the Commission on
July 29, 1994, Commission File No. O-15077.*
10.86 -- Lease dated as of January 17, 1994 between Shorewood/Heminway Acquisition Corporation and Heminway Packaging
Corporation in respect of premises located at 155 South Leonard Street, Waterbury, Connecticut incorporated by
reference to the corresponding exhibit item to the Company's annual report on Form 10-K for the fiscal year ended
April 30, 1994, as filed with the Commission on July 29, 1994, Commission File No. O-15077.
10.87 -- Letter Agreement dated April 21, 1994 by and among SPC Corporation Limited, (formerly known as Shorewood Paperboard
Corporation Limited), Shorewood Acquisition Corporation of Delaware, Paperboard Industries Corporation and Paperboard
Industries Inc. in respect of working capital adjustment incorporated by reference to the corresponding exhibit item
to the Company's annual report on Form 10-K for the fiscal year ended April 30, 1994, as filed with the Commission on
July 29, 1994, Commission File No. O-15077.
10.88 -- Employment Agreement dated as of May 16, 1994 between Shorewood Packaging Corporation and Howard M. Liebman
incorporated by reference to the corresponding exhibit item to the Company's annual report on Form 10-K for the fiscal
year ended April 30, 1994, as filed with the Commission on July 29, 1994, Commission File No. O-15077.
10.89 -- Consultation and Termination Agreement dated May 6, 1994 between Shorewood Packaging Corporation and Murray B.
Frischer incorporated by reference to the corresponding exhibit item to the Company's annual report on Form 10-K for
the fiscal year ended April 30, 1994, as filed with the Commission on July 29, 1994, Commission File No. O-15077.
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24
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<S> <C> <C>
10.90 -- Shorewood Packaging Corporation Retirement and Savings Plan, and Adoption Agreement, dated March 19, 1994 between
Shorewood Packaging Corporation and its subsidiaries, as employer, and NationsBank of Georgia, N.A., as trustee
incorporated by reference to the corresponding exhibit item to the Company's annual report on Form 10-K for the fiscal
year ended April 30, 1994, as filed with the Commission on July 29, 1994, Commission File No. O-15077.
10.91 (a) Stock Warrant Agreement to purchase 100,000 shares of Common Stock, dated as of January 13, 1994 incorporated by
reference to the corresponding exhibit item on Company's annual report on Form 10-K/A for the fiscal year ended April
30, 1994, as filed with the Commission on April 20, 1995, Commission File No. 0-15077.
10.91 (b) Stock Warrant Agreement dated as of July 23, 1992 to purchase 300,000 shares of Common Stock incorporated by reference
to the corresponding exhibit item on Company's annual report on Form 10-K/A for the fiscal year ended April 30, 1994,
as filed with the Commission on April 20, 1995, Commission File No. 0-15077.
10.92 Second Amendment to Amended and Restated Credit Agreement dated as of November 22, 1994, among Shorewood Packaging
Corporation, Shorewood Packaging Corporation of Canada Limited, NationsBank of North Carolina, N.A. and The Bank of
Nova Scotia incorporated by reference to the corresponding exhibit item on Company's annual report on Form 10-K/A for
the fiscal year ended April 29, 1995, as filed with the Commission on August 11, 1995.
10.93 Lease dated as of February 6, 1995, between Stanley Stahl, d/b/a Stahl Park Avenue Co., and Shorewood Packaging
Corporation (omitting schedules and exhibits), incorporated by reference to the corresponding exhibit item on the
Company's annual report on Form 10-K/A for the fiscal year ended April 29, 1995, as filed with the Commission on
August 11, 1995.
10.94 The 1995 Performance Bonus Plan incorporated by reference to the corresponding exhibit item to Quarterly Report on
Form 10-Q/A for the quarterly period ended July 29, 1995, as filed with the Commission on September 20, 1995.
21.1 -- Subsidiaries of Registrant.
23.1 -- Consent of Deloitte & Touche LLP.
(b) Reports on Form 8-K
No current reports on Form 8-K were filed by the Company during the last quarter of the period covered by this report.
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25
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SIGNATURES
Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange
Act of 1934, the Company has duly caused this amended report to be signed on
its behalf by the undersigned, thereunto duly authorized.
SHOREWOOD PACKAGING CORPORATION
By: /s/ Howard M. Liebman
----------------------------------------------------
Howard M. Liebman
Executive Vice President and Chief Financial Officer
(Principal Financial Officer)
Date: October 19, 1995
<PAGE> 27
EXHIBIT INDEX
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23.1 Consent of Deloitte & Touche LLP 28
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27
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INDEPENDENT AUDITOR'S CONSENT
We consent to the incorporation by reference in Registration Statements No.'s
33-16409, 33-38259 and 33-78614 of Shorewood Packaging Corporation each on Form
S-8 of our report dated June 27, 1995, appearing in this Annual Report on Form
10-K/A of Shorewood Packaging Corporation for the 52 weeks ended April 29,
1995.
/s/ Deloitte & Touche LLP
New York, New York
October 16, 1995
29
