UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 10-Q
[X] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended JUNE 30, 1997
-------------
OR
[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
For the transition period from _______________to__________________
Commission File number 1-9487
ATLANTIS PLASTICS, INC.
(Exact name of registrant as specified in its charter)
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<CAPTION>
FLORIDA 06-1088270
- ------------------------------------------------------------- ------------------------------------
<S> <C>
(State or other jurisdiction of incorporation or organization) (I.R.S. Employer Identification No.)
</TABLE>
1870 THE EXCHANGE, SUITE 200, ATLANTA, GEORGIA 30339
---------------------------------------------- -----------------
(Address of principal executive offices) (Zip Code)
(Registrant's telephone number, including Area Code) (800) 497-7659
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 the number of shares outstanding of each of the issuer's classes of
common stock, as of the latest practicable date.
CLASS SHARES OUTSTANDING AT JUNE 30, 1997
------------ ----------------------------
A, $.10 par value 4,205,028
B, $.10 par value 2,861,979
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ATLANTIS PLASTICS, INC.
TABLE OF CONTENTS
PAGE NO.
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PART I. FINANCIAL INFORMATION
Consolidated Income Statements (Unaudited)
for the six months ended June 30, 1997 and 1996............... 1
Consolidated Balance Sheets (Unaudited)
as of June 30, 1997 and December 31, 1996.................... 2
Consolidated Statements of Cash Flows (Unaudited)
for the six months ended June 30, 1997 and 1996............... 3
Notes to Consolidated Financial Statements (Unaudited)........ 4
Management's Discussion and Analysis
of Financial Condition and Results of Operations.............. 7
PART II. OTHER INFORMATION
Item 1 - Legal Proceedings................................... 11
Item 6 - Exhibits and Reports on Form 8-K.................... 11
SIGNATURES............................................................. 12
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<TABLE>
<CAPTION>
ATLANTIS PLASTICS, INC. AND SUBSIDIARIES
CONSOLIDATED INCOME STATEMENTS
(Unaudited - In thousands, except per share data)
THREE MONTHS ENDED SIX MONTHS ENDED
JUNE 30, JUNE 30,
----------------------- ----------------------
1997 1996 1997 1996
----------------------- ----------------------
<S> <C> <C> <C> <C>
Net sales........................................................... $65,530 $70,576 $129,853 $134,849
Cost of sales....................................................... 56,458 57,684 111,564 110,456
----------- ---------- ---------- -----------
Gross profit..................................... 9,072 12,892 18,289 24,393
Selling, general and administrative expenses........................ 6,426 7,214 12,886 14,694
Impairment of long-lived assets and restructuring charges........... - - 960 -
---------- ---------- ---------- -----------
Operating income ................................. 2,646 5,678 4,443 9,699
Net interest expense................................................ (2,879) (3,255) (5,716) (6,505)
----------- ---------- ---------- -----------
Income (loss) from continuing operations before
income taxes..................................... (233) 2,423 (1,273) 3,194
Income tax (provision) benefit...................................... (79) (1,079) 248 (1,515)
---------- ---------- ---------- -----------
Income (loss) from continuing operations ......... (312) 1,344 (1,025) 1,679
Income (loss) from discontinued operations, net of income taxes ... - (47) - (47)
---------- ---------- ---------- -----------
Net income (loss) ................................ (312) 1,297 (1,025) 1,632
Preferred stock dividends........................................... - (37) - (73)
---------- ---------- ---------- -----------
Income (loss) applicable to
common shares and equivalents.................................... $ (312) $ 1,260 $ (1,025) $ 1,559
========== ========== ========== ===========
INCOME (LOSS) PER COMMON SHARE:
Continuing operations............................................... ($0.04) $0.17 ($0.15) $0.22
Discontinued operations............................................. - - - (0.01)
---------- ---------- ---------- -----------
Net income (loss) ................................ ($0.04) $0.17 ($0.15) $0.21
========== ========== ========== ===========
Weighted average shares outstanding................................. 7,062 7,479 7,068 7,452
========== ========== ========== ===========
</TABLE>
See accompanying notes to consolidated financial statements (unaudited).
1
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<TABLE>
<CAPTION>
ATLANTIS PLASTICS, INC. AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
(Unaudited - In thousands)
JUNE 30, DECEMBER 31,
1997 1996
ASSETS ------------ ------------
<S> <C> <C>
Cash and equivalents..................................................... $5,041 $15,905
Accounts receivable, net................................................. 27,726 28,364
Inventories.............................................................. 18,934 16,984
Other current assets..................................................... 5,825 4,825
--------- ---------
Current assets....................................................... 57,526 66,078
Property and equipment, net.............................................. 58,556 58,523
Goodwill, net of accumulated amortization................................ 49,746 50,532
Other assets............................................................. 2,429 2,768
--------- ---------
$168,257 $177,901
========= =========
LIABILITIES AND SHAREHOLDERS' EQUITY
Accounts payable and accrued expenses.................................... $22,592 $27,131
Current portion of long-term debt........................................ 2,527 2,517
--------- ---------
Current liabilities.................................................. 25,119 29,648
Long-term debt, less current portion..................................... 104,041 105,365
Deferred income taxes.................................................... 7,161 6,886
Other liabilities........................................................ 945 1,093
--------- ---------
Total liabilities.................................................... 137,266 142,992
--------- ---------
Commitments and contingencies
Shareholders' equity:
Series A convertible preferred stock, $1.00 par value, 20,000 shares
authorized, issued and outstanding in 1996 ......................... - 2,000
Class A common stock, $.10 par value, 20,000,000 shares authorized,
4,205,028 and 4,225,823 shares issued and outstanding in 1997 and 1996 421 423
Class B common stock, $.10 par value, 7,000,000 shares authorized,
2,861,979 and 2,899,977 shares issued and outstanding in 1997 and 1996 286 290
Additional paid-in capital.............................................. 6,988 6,968
Retained earnings....................................................... 23,296 25,228
--------- ---------
Total shareholders' equity............................................ 30,991 34,909
--------- ---------
$168,257 $177,901
========= =========
</TABLE>
See accompanying notes to consolidated financial statements (unaudited).
2
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<CAPTION>
ATLANTIS PLASTICS, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS
(Unaudited - In thousands)
SIX MONTHS ENDED
JUNE 30,
-------------------------
1997 1996
-------------------------
<S> <C> <C>
CASH FLOWS FROM OPERATING ACTIVITIES:
Net income (loss).................................................. ($1,025) $1,632
Adjustments to reconcile net income (loss) to ----------- -----------
net cash provided by operating activities:
Depreciation................................................... 3,669 4,012
Amortization of goodwill....................................... 796 808
Loan fee and other amortization................................ 285 306
Changes in assets and liabilities:
Decrease (increase) in accounts receivable................. 638 (5,235)
Increase in inventories.................................... (1,950) (1,198)
(Increase) decrease in other current assets................ (1,000) 282
(Decrease) increase in accounts payable and accrued expenses (4,539) 2,469
Increase in deferred income taxes......................... 275 37
Decrease in other liabilities.............................. (148) (136)
Other, net................................................. 41 (7)
----------- -----------
Total adjustments.......................................... (1,933) 1,338
----------- -----------
Net cash (used in) provided by operating activities...... (2,958) 2,970
----------- -----------
CASH FLOWS FROM INVESTING ACTIVITIES:
Capital expenditures............................................. (3,702) (2,022)
Proceeds from asset dispositions................................. - 800
----------- -----------
Net cash used in investing activities.................... (3,702) (1,222)
----------- -----------
CASH FLOWS FROM FINANCING ACTIVITIES:
Borrowings under revolving credit agreements..................... - 11,982
Repayments under revolving credit agreements..................... - (11,982)
Payments on long-term debt....................................... (1,314) (1,343)
Purchase of common stock......................................... (2,994) -
Proceeds from exercise of stock options.......................... 104 115
----------- -----------
Net cash used in financing activities.................... (4,204) (1,228)
----------- -----------
Net (decrease) increase in cash and equivalents.................... (10,864) 520
Cash and equivalents at beginning of period........................ 15,905 1,255
----------- -----------
Cash and equivalents at end of period.............................. $5,041 $1,775
=========== ===========
</TABLE>
See accompanying notes to consolidated financial statements (unaudited).
3
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ATLANTIS PLASTICS, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(UNAUDITED)
1. The accompanying unaudited consolidated financial
statements of Atlantis Plastics, Inc. ("Atlantis" or the "Company"),
which are for interim periods, do not include all disclosures provided
in the annual consolidated financial statements. These unaudited
consolidated financial statements should be read in conjunction with
the consolidated financial statements and the footnotes thereto
contained in the Company's Annual Report on Form 10-K for the year
ended December 31, 1996 as filed with the Securities and Exchange
Commission. The December 31, 1996 balance sheet, included herein, was
derived from audited financial statements, but does not include all
disclosures required by generally accepted accounting principles.
Atlantis Plastic Films accounts for approximately two-thirds
of the Company's net sales and produces stretch films (multilayer
plastic films that are used principally to wrap pallets of materials
for shipping or storage) and custom film products which include
high-grade laminating films, embossed films, and specialty film
products targeted primarily to industrial and packaging markets.
Atlantis Molded Plastics accounts for approximately one-third
of the Company's net sales and employs two principal technologies: (i)
injection molded thermoplastic parts that are sold primarily to
original equipment manufacturers and used in major household
appliances, agricultural, and automotive products, and (ii) a variety
of extruded plastic parts for trim and functional applications (profile
extrusion) that are incorporated into a broad range of consumer and
commercial products such as recreational vehicles, residential windows
and doors, office furniture, and retail store fixtures. Plastic
Containers, Inc. ("PCI"), the Company's manufacturer of blow molded
milk, juice, water and industrial containers, was sold in November
1996. See Note 4 of Notes to the Consolidated Financial Statements for
information regarding the fourth quarter 1996 disposition of PCI.
All material intercompany balances and transactions have been
eliminated. Certain amounts included in prior period financial
statements have been reclassified to conform with the current period
presentation.
2. In the opinion of the Company, the accompanying unaudited
consolidated financial statements contain all adjustments (which are of
a normal recurring nature) necessary for a fair presentation of the
financial statements. The results of operations for the six months
ended June 30, 1997 are not necessarily indicative of the results to be
expected for the full year.
3. Net income (loss) per common share was computed by dividing
net income (loss), after deducting dividends applicable to preferred
stock for 1996, by the weighted average number of shares and dilutive
share equivalents outstanding during the period. Fully diluted net
income (loss) per common share is substantially equivalent to primary
net income (loss) per common share.
4. As previously disclosed, during the fourth quarter of 1996
the Company completed the following transactions, generating a total
pretax gain of $6.7 million: (i) in November, the Company sold PCI for
approximately $8.3 million, generating a pretax gain of approximately
$1.4 million, and an after tax gain of approximately $1.9 million, (ii)
in December, the Company sold its Tulsa custom manufacturing facility
4
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for $1.5 million, generating a pretax gain of approximately $350,000,
and an after tax gain of approximately $210,000, and (iii) also during
December, the Company sold its investment in WinsLoew Furniture, Inc.
stock to WinsLoew for approximately $9.3 million, generating a pretax
gain of approximately $4.9 million, and an after tax gain of
approximately $2.9 million.
5. During the first quarter of 1997, the Company recorded
impairment of long-lived assets and other restructuring charges of
approximately $1.0 million, or $586,000 after taxes, related to: (i)
the closing of the Company's Nashville, Tennessee injection molding
facility, including approximately $250,000 in non-cash charges for the
write-down of fixed assets and leasehold improvements associated with
that facility, and (ii) restructuring expenses associated with recently
announced management changes in the Company's stretch film unit.
6. Covenants relating to the Company's 11% Senior Notes
indebtedness restrict the Company from taking certain actions unless
specified interest coverage ratio and other tests are met. The
Company's 1997 decline in operating profitability caused it to fall
below the interest coverage ratio requirement for the trailing four
quarters ended June 30, 1997. Accordingly, the Company cannot pay
dividends or repurchase stock, and its ability to incur new debt or
take certain other actions is restricted in certain respects until it
is again able to meet the interest coverage ratio requirement on a
trailing four quarters basis. Two of the Company's lenders also agreed
to amend certain financial covenants in order to maintain compliance as
of June 30, 1997.
7. In November 1996, the Board of Directors authorized the
repurchase of up to 1,000,000 shares of Atlantis Class A common stock,
or 14% of the 7.1 million Class A and Class B common stock then
outstanding. In January 1997, the Company issued a mandatory conversion
notice to the holder of the 20,000 outstanding shares of the Company's
Series A Convertible Preferred Stock ("Preferred Stock"). The Preferred
Stock was convertible into 210,244 shares of Class A common stock.
After issuing the mandatory conversion notice, the Company reached an
agreement with the Preferred Stock holder to repurchase all of the
common shares resulting from the conversion notice for $2 million (the
original price paid for the Preferred Stock by the holder), and
completed the repurchase in late March, 1997.
Through March 1997 the Company had repurchased 320,344 shares
(including the 210,244 common shares issued in connection with the
conversion of Preferred Stock, as described above), and options for
55,125 shares, for total consideration of approximately $3.3 million.
The Company has suspended its share buyback program for the reasons
discussed above in Note 6.
8. In February 1997, SFAS No. 128, "Earnings Per Share" and
SFAS No. 129, "Disclosure of Information About Capital Structure" were
issued. SFAS No. 128 specifies the computation, presentation, and
disclosure requirements for Earnings Per Share ("EPS"), and is designed
to improve the EPS information provided in financial statements by
simplifying the existing computational guidelines, revising the
disclosure requirements, and increasing the comparability of EPS data
on an international basis. The Company has not yet determined the
effect on operating results of implementing SFAS 128, however, the
adoption of this statement is not expected to have a materially adverse
effect on consolidated financial position. SFAS No. 129 consolidates
the existing requirements to disclose certain information about an
entity's capital structure, and is not expected to change the Company's
current capital structure disclosures. SFAS 128 and 129 must be
implemented no later than fiscal year 1997.
5
<PAGE>
In June 1997, SFAS No. 130, "Reporting Comprehensive
Income" and SFAS No. 131, "Disclosures About Segments of an Enterprise
and Related Information" were issued. SFAS No. 130 establishes
standards for reporting and display of comprehensive income and its
components in a full set of general-purpose financial statements. The
purpose of reporting comprehensive income is to present a measure of
all changes in equity that result from recognized transactions and
other economic events of the period other than transactions with owners
in their capacity as owners. The FASB believes that SFAS No. 130 should
help investors, creditors, and others in assessing an enterprise's
activities and the timing and magnitude of its future cash flows. SFAS
No. 131 establishes standards for the way that public businesses report
information about operating segments in annual financial statements and
requires that those enterprises report selected information about
operating segments in interim financial reports issued to shareholders.
It also establishes standards for related disclosures about products
and services, geographic areas, and major customers. The Company has
not yet determined the effect on operating results of implementing SFAS
130, however, the adoption of this statement is not expected to have a
materially adverse effect on consolidated financial position. The
Company has not yet determined the impact of SFAS 131 on its future
disclosures. SFAS 130 and 131 must be implemented no later than fiscal
year 1998.
6
<PAGE>
MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
CONDITION AND RESULTS OF OPERATIONS
GENERAL
Atlantis is a leading U.S. manufacturer of polyethylene stretch and
custom films used in a variety of industrial and consumer applications and
molded plastic products for the appliance, agricultural, automotive,
recreational vehicle, and residential window industries.
Selected income statement data for the quarterly periods ended
March 31, 1996 through June 30, 1997 are as follows:
<TABLE>
<CAPTION>
($ IN MILLIONS)
1997 1996
------------ -----------------------------------
<S> <C> <C> <C> <C> <C> <C>
NET SALES: Q2 Q1 Q4 Q3 Q2 Q1
- ---------- -- -- -- -- -- --
PLASTIC FILMS $48.2 $45.7 $44.0 $45.3 $46.8 $41.7
MOLDED PLASTICS 17.4 18.6 20.1 22.9 23.8 22.5
----- ----- ----- ----- ----- -----
TOTAL $65.6 $64.3 $64.1 $68.2 $70.6 $64.2
===== ===== ===== ===== ===== =====
GROSS PROFIT: PERCENTAGE OF NET SALES
- ------------- -----------------------
PLASTIC FILMS 13% 13% 14% 17% 17% 18%
MOLDED PLASTICS 17% 18% 18% 17% 20% 18%
TOTAL 14% 14% 15% 17% 18% 18%
OPERATING INCOME:
PLASTIC FILMS 3% 3% (A) 4% 7% 6% 6%
MOLDED PLASTICS 6% 8% (A) 7% 10% 12% 8%
TOTAL 4% 4% (A) 5% 8% 8% 6%
NET INTEREST EXPENSE: $2.9 $2.8 $2.9 $3.2 $3.2 $3.3
- ---------------------
</TABLE>
(a) Amounts exclude the effects of the first quarter 1997 impairment of
long-lived assets and restructuring charges, which totaled approximately $1
million for the Company. Including these charges, the Plastic Films, Molded
Plastics, and Total Operating Income percentages for the first quarter of 1997
are 2%, 5%, and 3%, respectively.
RESULTS OF OPERATIONS
The Company's second quarter and year-to-date 1997 sales of $65.6
million and $129.9 million, respectively, were below last year's sales for the
same periods. Excluding sales related to the 1996 disposition of PCI, net sales
in the first half of 1997 increased by $1.5 million. PCI contributed second
quarter and first half 1996 sales of $3.4 million and $6.5 million, respectively
(see Note 4 of Notes to the Consolidated Financial Statements for additional
information on the sale of PCI). Excluding these amounts, second quarter and
year-to-date 1997 Atlantis Molded Plastics sales of $17.4 million and $36.0
million, respectively, were $3.0 million and $3.8 million below last year's
sales for the same periods primarily due to a temporary drop in injection
molding sales during the second quarter related to the closing of the Nashville
facility (discussed below), combined with lower sales of appliance components.
7
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Atlantis Plastic Films' second quarter and year-to-date 1997 net sales
totaled $48.2 million and $93.9 million, respectively, increasing 3% and 6%,
respectively, compared to last year's sales for the same periods, due to an
increase in film volume combined with higher average custom film selling prices.
The Company's second quarter and year-to-date 1997 gross profit as a
percentage of sales decreased to 14%, compared to 18% for the same periods
during 1996, primarily due to continued margin pressures within the stretch film
unit resulting from extremely competitive market forces.
The Atlantis Plastic Films second quarter and year-to-date 1997 gross
profit percentages equaled 13%, compared to last year's percentages of
approximately 17%. Stretch film gross profit continued to be adversely impacted
by intense price competition resulting primarily from industry wide over
capacity. Efforts to improve the future profitability of this unit include the
second half 1996 introduction of three new machine wrap stretch films which have
been well received in the marketplace, the appointment of a new vice president
and general manager in May, 1997 (see Note 5 of Notes to Consolidated Financial
Statements), and continued cost reductions in the areas of production and
overhead expense.
The Atlantis Molded Plastics second quarter and year-to-date 1997 gross
profit percentages equaled 17%, compared to 20% and 19%, respectively, for the
same periods last year. In the profile extrusion unit for the second quarter and
year-to-date periods, gross margins declined slightly compared to the same
periods in 1996. Injection molding gross profits decreased in the second quarter
of 1997 primarily due to the decline in injection molding sales discussed above.
The Company's second quarter and year-to-date 1997 selling, general and
administrative ("SG&A") expenses were $6.4 million (10% of sales) and $12.9
million (10% of sales), respectively, compared to 10% of sales and 11% of sales,
respectively, for the same periods during 1996. The 1997 SG&A expenses cited
above exclude restructuring charges of approximately $1.0 million incurred
during the first quarter of 1997, described below. Excluding 1996 SG&A expenses
associated with PCI, these amounts represented a savings of $574,000 and $1.3
million, respectively, compared with the SG&A expenses for the second quarter
and year-to-date 1996 periods, primarily due to the various cost reduction
programs initiated by the Company during 1995 and 1996.
First quarter 1997 impairment of long-lived assets and other
restructuring charges equaled approximately $1.0 million, or $586,000 after
taxes, related to: (i) the closing of the Company's Nashville, Tennessee
injection molding facility, including approximately $250,000 in non-cash charges
for the write-down of fixed assets and leasehold improvements associated with
that facility, and (ii) restructuring expenses associated with recently
announced management changes in the Company's stretch film unit.
Regarding the closing of the Nashville facility, Atlantis' injection
molding unit was recently awarded $6.2 million in new business by Whirlpool
Corporation, a major, long-term customer. Partly in connection with this award,
Atlantis closed its Nashville injection molding facility due to a shift in
Whirlpool and other customer business away from the Nashville area, and due to
productivity improvements which have increased manufacturing capacity in the
Company's other injection molding facilities. The Company transitioned the
majority of its Nashville business to its other injection molding facilities
during the second quarter of 1997.
Second quarter and year-to-date 1997 net interest expense equaled $2.9
million and $5.7 million, respectively, lower than the $3.2 million and $6.5
million, respectively, in net interest expense for the same periods last year,
due to reduced debt levels during the first half of 1997. The Company's
effective tax rates differed from the applicable statutory rates during the
first half of 1997 and 1996 primarily due to nondeductible goodwill
amortization.
8
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LIQUIDITY AND CAPITAL RESOURCES
The Company's working capital at June 30, 1997 totaled approximately
$32.4 million (including cash and equivalents of $5.0 million), compared to
$36.4 million (including cash and equivalents of $15.9 million) at December 31,
1996. On June 30, 1997, there were no borrowings on the Company's revolving
credit facility. Unused availability, net of outstanding letters of credit of
approximately $1.5 million, equaled $28.5 million.
Covenants relating to the Company's 11% Senior Notes restrict the
Company from taking certain actions unless specified interest coverage ratio and
other tests are met. As more fully described in Note 6, the Company did not meet
the interest coverage ratio requirement for the trailing four quarters ended
June 30, 1997, and two of the Company's lenders agreed to amend certain
financial covenants in order to maintain compliance as of June 30, 1997. Also,
see Note 7 of the Notes to the Consolidated Financial Statements for information
regarding the Company's common stock repurchase program.
The Company's principal needs for liquidity, on both a short- and
long-term basis, relate to working capital (principally accounts receivable and
inventories), debt service, and capital expenditures. The Company presently does
not have any material commitments for future capital expenditures, and expects
to meet its short- and long-term liquidity needs with cash on hand, funds
generated from operations, and funds available under its revolving credit
facility.
CASH FLOWS FROM OPERATING ACTIVITIES
In the first six months of 1997, net cash used in operating activities
was approximately $3.0 million, compared to cash provided by operations of $3.0
million for the same period last year. Accounts receivable decreased by $638,000
during the first half of 1997 primarily due to a decline in injection molding
sales related to the Nashville facility closing and lower second quarter sales
of appliance components. Inventories increased by $2.0 million primarily due to
lower than normal year-end 1996 film inventories.
Accounts payable and accrued expenses at June 30, 1997 decreased by
$4.5 million compared to the 1996 year-end balance due to: (i) incentive
compensation payments during the first quarter of 1997 related to 1996 operating
results, (ii) payable reductions related to the closing of the Nashville
facility, and (iii) 1997 tax payments related to 1996 taxable income.
CASH FLOWS FROM INVESTING ACTIVITIES
Net cash used in investing activities during the first six months of
1997, consisting of capital expenditures, equaled $3.7 million compared to
capital expenditures of $2.0 million for the same period last year.
CASH FLOWS FROM FINANCING ACTIVITIES
Net cash used in financing activities for the first half of 1997 was
$4.2 million, compared to $1.2 million during the first six months of 1996. Cash
was used during 1997 to repurchase approximately $3.0 million of common stock
(see Note 7 of Notes to the Consolidated Financial Statements), with the balance
used for principal payments on long-term debt.
9
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FORWARD LOOKING STATEMENTS
This Form 10-Q document contains certain forward-looking statements
which are made pursuant to the safe harbor provisions of the Private Securities
Litigation Reform Act of 1995. These forward-looking statements involve risks
and uncertainties that could cause actual results to differ materially from the
forward-looking statements. These risks include, but are not limited to, raw
material costs and the ability to pass price increases on to customers in a
timely fashion, industry overcapacity, product acceptance, technological changes
which could alter the demand for product or adversely impact the competitive
cost of production, etc. All forward-looking statements should be considered in
light of these risks and uncertainties.
ACCOUNTING PRONOUNCEMENTS
In February 1997, SFAS No. 128, "Earnings Per Share" and SFAS No. 129,
"Disclosure of Information About Capital Structure" were issued. SFAS No. 128
specifies the computation, presentation, and disclosure requirements for
Earnings Per Share ("EPS"), and is designed to improve the EPS information
provided in financial statements by simplifying the existing computational
guidelines, revising the disclosure requirements, and increasing the
comparability of EPS data on an international basis. The Company has not yet
determined the effect on operating results of implementing SFAS 128, however,
the adoption of this statement is not expected to have a materially adverse
effect on consolidated financial position. SFAS No. 129 consolidates the
existing requirements to disclose certain information about an entity's capital
structure and is not expected to change the Company's current capital structure
disclosures. SFAS 128 and 129 must be implemented no later than fiscal year
1997.
In June 1997, SFAS No. 130, "Reporting Comprehensive Income" and SFAS
No. 131, "Disclosures About Segments of an Enterprise and Related Information"
were issued. SFAS No. 130 establishes standards for reporting and display of
comprehensive income and its components in a full set of general-purpose
financial statements. The purpose of reporting comprehensive income is to
present a measure of all changes in equity that result from recognized
transactions and other economic events of the period other than transactions
with owners in their capacity as owners. The FASB believes that SFAS No. 130
should help investors, creditors, and others in assessing an enterprise's
activities and the timing and magnitude of its future cash flows. SFAS No. 131
establishes standards for the way that public businesses report information
about operating segments in annual financial statements and requires that those
enterprises report selected information about operating segments in interim
financial reports issued to shareholders. It also establishes standards for
related disclosures about products and services, geographic areas, and major
customers. The Company has not yet determined the effect on operating results of
implementing SFAS 130, however, the adoption of this statement is not expected
to have a materially adverse effect on consolidated financial position. The
Company has not yet determined the impact of SFAS 131 on its future disclosures.
SFAS 130 and 131 must be implemented no later than fiscal year 1998.
10
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Part II. OTHER INFORMATION
ITEM 1. LEGAL PROCEEDINGS.
The Company is not a party to any legal proceeding other than
routine litigation incidental to its business, none of which
is material.
ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K.
(a) Exhibits
27.1 Financial Data Schedule
- ----------------
(b) Reports on Form 8-K:
During the quarter for which this Quarterly Report on Form 10-Q is
filed, no reports on Form 8-K were filed by the Registrant.
11
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SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
Registrant has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.
ATLANTIS PLASTICS, INC.
Date: August 5, 1997 /S/ ANTHONY F. BOVA
-------------------
ANTHONY F. BOVA
President and Chief Executive Officer
Date: August 5, 1997 /S/ PAUL RUDOVSKY
-----------------
PAUL RUDOVSKY
Executive Vice President, Finance and
Administration
12
<PAGE>
EXHIBIT INDEX
EXHIBIT
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27.1 Financial Data Schedule
<TABLE> <S> <C>
<ARTICLE> 5
<MULTIPLIER> 1,000
<CURRENCY> DOLLARS
<S> <C>
<PERIOD-TYPE> 6-MOS
<FISCAL-YEAR-END> DEC-31-1997
<PERIOD-START> JAN-01-1997
<PERIOD-END> JUN-30-1997
<EXCHANGE-RATE> 1
<CASH> 5,041
<SECURITIES> 0
<RECEIVABLES> 28,474
<ALLOWANCES> 748
<INVENTORY> 18,934
<CURRENT-ASSETS> 57,526
<PP&E> 113,793
<DEPRECIATION> 55,237
<TOTAL-ASSETS> 168,257
<CURRENT-LIABILITIES> 25,119
<BONDS> 104,041
0
0
<COMMON> 707
<OTHER-SE> 30,284
<TOTAL-LIABILITY-AND-EQUITY> 168,257
<SALES> 129,853
<TOTAL-REVENUES> 129,853
<CGS> 111,564
<TOTAL-COSTS> 111,564
<OTHER-EXPENSES> 13,846
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 5,716
<INCOME-PRETAX> (1,273)
<INCOME-TAX> (248)
<INCOME-CONTINUING> (1,025)
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> (1,025)
<EPS-PRIMARY> (0.15)
<EPS-DILUTED> (0.15)
</TABLE>
