<PAGE> 1
FORM 10-Q
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
___________________________
(Mark One)
[ X ] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended September, 30 1995
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 1-7210
REPUBLIC GROUP INCORPORATED
--------------------------------------------------------------
(Exact name of registrant as specified in its charter)
DELAWARE 75-1155922
-------- ----------
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
811 East 30th Avenue, Hutchinson, Kansas 67502-4341
---------------------------------------- ----------
(Address of principal executive offices) (Zip code)
Post Office Box 1307, Hutchinson, Kansas 67504-1307
---------------------------------------- ----------
(Mailing Address) (Zip code)
316-727-2700
---------------
(Registrant's telephone number, including area code)
REPUBLIC GYPSUM COMPANY
-----------------------------
(Former Name)
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 .
---- ----
On October 31,1995, there were 10,570,694 shares of the registrant's Common
Stock, $1.00 par value outstanding.
<PAGE> 2
REPUBLIC GROUP INCORPORATED
FORM 10-Q
Quarterly Report
For the Quarter Ended September 30, 1995
PART I. FINANCIAL INFORMATION
Item 1. Financial Statements
Reference is made to pages 2 through 5 hereof which set forth
certain consolidated financial statements of Registrant in
accordance with Part I of Form 10-Q.
The consolidated financial statements include the accounts of
the Registrant and its subsidiaries, Republic Paperboard
Company, Halltown Paperboard Company, Republic Gypsum Company,
Hollis & Eastern Railroad Company, Delta Roofing Mills, Inc.
and LaPorte Minerals Corporation.
<PAGE> 3
REPUBLIC GROUP INCORPORATED
CONSOLIDATED STATEMENTS OF INCOME
Quarters Ended September 30, 1995 and 1994 (Unaudited)
<TABLE>
<CAPTION>
1995 1994
-------------- --------------
<S> <C> <C>
Gross sales ____________________________________________ $ 36,623,000 $ 24,781,000
Less freight and discounts _____________________________ 4,351,000 3,928,000
------------ -------------
Net sales ______________________________________________ 32,272,000 20,853,000
Costs and expenses:
Cost of sales _____________________________________ 23,422,000 14,269,000
Selling and administrative expenses ________________ 3,335,000 2,220,000
------------ -------------
26,757,000 16,489,000
------------ -------------
Operating profit _______________________________________ 5,515,000 4,364,000
Other income (expense), net ____________________________ (415,000) 17,000
------------ -------------
Income before income taxes ______________________________ 5,100,000 4,381,000
Provision for income taxes ______________________________ 1,932,000 1,705,000
------------ -------------
Net income ____________________________________________ $ 3,168,000 $ 2,676,000
============ =============
Net income per share ___________________________________ $ 0.30 $ 0.25
============ =============
Dividends per share ____________________________________ $ .06 $ .05
============ =============
</TABLE>
See accompanying notes to consolidated financial statements.
2
<PAGE> 4
REPUBLIC GROUP INCORPORATED
CONSOLIDATED BALANCE SHEETS
September 30, 1995 and June 30, 1995
<TABLE>
<CAPTION>
September 30, June 30,
ASSETS 1995 1995
------------ ------------
(Unaudited)
<S> <C> <C>
Current assets:
Cash and cash equivalents _______________________________________ $ 4,318,000 $ 3,631,000
Investments and marketable securities, at market _______________ 4,450,000 2,500,000
Accounts receivable, net ________________________________________ 14,469,000 11,223,000
Income tax refunds receivable __________________________________ 177,000 177,000
Inventories:
Finished goods _______________________________________________ 2,185,000 2,752,000
Raw materials and supplies ____________________________________ 5,105,000 5,505,000
------------ ------------
7,290,000 8,257,000
Prepaid expenses _______________________________________________ 328,000 491,000
Deferred income taxes _________________________________________ 749,000 749,000
------------ ------------
Total current assets _________________________________________ 31,781,000 27,028,000
Property, plant and equipment, at cost ___________________________ 104,355,000 102,632,000
Less accumulated depreciation, amortization
and depletion ________________________________________________ 36,429,000 35,020,000
------------ ------------
67,926,000 67,612,000
Other assets _____________________________________________________ 795,000 802,000
------------ ------------
Total assets _____________________________________________________ $100,502,000 $ 95,442,000
============ ============
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Accounts payable _______________________________________________ $ 7,185,000 $ 7,441,000
Accrued payroll and employee benefits __________________________ 1,803,000 1,810,000
Income tax payable _____________________________________________ 2,027,000 95,000
Other current liabilities _______________________________________ 1,803,000 1,002,000
Current portion of long-term debt 3,160,000 3,160,000
------------ ------------
Total current liabilities ____________________________________ 15,978,000 13,508,000
Long-term debt due after one year ________________________________ 24,840,000 24,840,000
Deferred income taxes ____________________________________________ 5,765,000 5,765,000
Other long-term liabilities _______________________________________ 763,000 760,000
Stockholders' equity:
Common stock, $1 par value _____________________________________ 10,570,000 10,560,000
Additional paid-in capital _____________________________________ 12,351,000 12,308,000
Retained earnings ______________________________________________ 30,235,000 27,701,000
------------ ------------
Total stockholders' equity ___________________________________ 53,156,000 50,569,000
------------ ------------
Total liabilities and stockholders' equity _______________________ $100,502,000 $ 95,442,000
============ ============
</TABLE>
See accompanying notes to consolidated financial statements.
3
<PAGE> 5
REPUBLIC GROUP INCORPORATED
CONSOLIDATED STATEMENT OF CASH FLOWS
Quarters Ended September 30, 1995 and 1994 (Unaudited)
<TABLE>
<CAPTION>
1995 1994
--------------- ----------------
<S> <C> <C>
Cash flows from operating activities:
Net income _____________________________________________________ $ 3,168,000 $ 2,676,000
Adjustments to reconcile net income to net
cash provided by operating activities:
Depreciation, amortization and depletion ____________________ 1,409,000 822,000
Write down of property, plant and equipment _________________ -- 21,000
Deferred income taxes ________________________________________ -- 44,000
(Gain) loss on sale of assets _______________________________ 4,000 (1,000)
Changes in current assets and liabilities:
Accounts receivable ________________________________________ (3,246,000) (2,602,000)
Inventories ________________________________________________ 967,000 (500,000)
Prepaid expenses ___________________________________________ 163,000 (8,000)
Accounts payable and accrued liabilities ____________________ 538,000 687,000
Income taxes payable _______________________________________ 1,932,000 1,661,000
Other non-current assets and liabilities ______________________ 10,000 14,000
------------ ------------
Net cash provided by operating activities ______________________ 4,945,000 2,814,000
Cash flows from investing activities:
Additions to property, plant and equipment ____________________ (1,728,000) (1,297,000)
Purchases of investments ______________________________________ (1,950,000) --
Proceeds from sale of investments _____________________________ -- 500,000
Other _________________________________________________________ 1,000 2,000
------------ ------------
Net cash used by investing activities _________________________ (3,677,000) (795,000)
Cash flows from financing activities:
Dividends paid ________________________________________________ (634,000) (526,000)
Stock options exercised _______________________________________ 53,000 --
------------ ------------
Net cash provided (used) by financing
activities ____________________________________________________ (581,000) (526,000)
------------ ------------
Net increase in cash and cash equivalents ________________________ 687,000 1,493,000
Cash and cash equivalents at beginning of year ____________________ 3,631,000 910,000
------------ ------------
Cash and cash equivalents at end of period ________________________ $ 4,318,000 $ 2,403,000
============ ============
</TABLE>
See accompanying notes to consolidated financial statements.
4
<PAGE> 6
REPUBLIC GROUP INCORPORATED
Notes to Consolidated Financial Statements
September 30, 1995 and 1994 (Unaudited)
(1) In the opinion of management of the Company, the accompanying unaudited
consolidated financial statements reflect all adjustments, of a normal
recurring nature, to fairly present the Company's financial position as of
September 30, 1995, and the results of operations and cash flows for the
quarters ended September 30, 1995 and 1994. The operating results for the
interim period are not necessarily indicative of the results to be expected for
a full year. It is suggested that these consolidated financial statements be
read in conjunction with the consolidated financial statements and the notes
thereto included in the Company's Form 10-K as of June 30, 1995.
(2) Per share computations are based on the weighted average number of common
shares outstanding during each period. Earnings per common and common
equivalent share, on a fully diluted basis, are substantially the same as
primary earnings per share as presented. The number of shares used in the per
share computations were 10,629,000 for the quarter ended September 30, 1995 and
10,592,000 for the comparable 1994 period.
(3) In connection with its preparations for a warehouse addition to its
paperboard mill located in Commerce City, Colorado, a suburb of Denver, the
Company discovered and has been investigating the presence of subsurface
petroleum hydrocarbons. The Company retained an environmental consultant who
concluded that fuel oil, jet fuel, and gasoline additives had migrated in the
subsurface of the Company's property from an adjacent property. The Company
and the adjacent property owner have jointly sponsored additional
investigations and discussions between the parties continue. The Company has
completed the construction of the warehouse addition under approval of the
Colorado Department of Health. At this time, the Company has not ascertained
the future liability, if any, of the above matter.
(4) Reclassification: Certain prior year balances may have been reclassified
to conform with current year presentation.
(5) At September 30, 1995 the Company has commitments to purchase property,
plant, and equipment totalling approximately $1,000,000.
(6) On June 30, 1995 the Company purchased substantially all of the assets of
Halltown Paperboard Company, Halltown, West Virginia from Old Dominion Box
Company for $26.2 million. The following unaudited pro forma information shows
consolidated operating results for the period presented as though the Company's
Halltown operations had been operating at the beginning of the period: Three
Months Ended September 30, 1995 and 1994
<TABLE>
<CAPTION>
1995 1994
-----------------------------------------------------------------------
<S> <C> <C>
Net sales $ 32,272,000 $ 24,511,000
Net income 3,168,000 2,796,000
Net income per share .30 .26
-----------------------------------------------------------------------
</TABLE>
5
<PAGE> 7
Item 2. Management's Discussion and Analysis of Financial Condition and Results
of Operations
Results of Operations
Quarters ended September 30, 1995 and 1994. For the first quarter
ended September 30, 1995, consolidated net income was $3,168,000 or $.30 per
share on net sales of $32,272,000 compared to consolidated net income of
$2,676,000 or $.25 per share on net sales of $20,853,000 in the 1994 quarter.
Operating profits were up $1,151,000 or 26% from the 1994 quarter to the 1995
quarter.
The increase in operating profits, the 55% increase in net sales and
the 18% increase in net income were primarily due to the recent acquisition of
Halltown Paperboard Company, Halltown, West Virginia, and improved recycled
paperboard margins. The recycled paperboard segment experienced a 21% decrease
in raw material costs, principally reclaimed paper fiber, during the September
1995 quarter from the June 1995 quarter. For example, old corrugated
containers (OCC), one major grade of reclaimed paper raw material utilized in
the production of recycled paperboard, had a published price of $165 per ton in
June 1995. This fell to $70 per ton by September 1995. The same decrease in
reclaimed paper fiber costs which benefited the operating margins of the
recycled paperboard mills, to a lesser extent, adversely affected the margins
of the reclaimed paper recycling operations. However, the opposite held true
for the prior fiscal year ended June 30, 1995. Although the gypsum wallboard
segment shipped 4% more this quarter compared to the same quarter last year,
the segment experienced a reduction in operating margins mainly due to higher
costs for gypsum facing paper, the major raw material used in the manufacture
of gypsum wallboard. A slight decrease in delivered net selling prices of
gypsum wallboard from the June 1995 quarter also affected margins. Selling and
administrative expenses were 10% of net sales, decreasing slightly from the
September 1994 quarter.
Declining reclaimed paper costs during the September 1995 quarter
likely will result in decreases in selling prices for recycled paperboard
during the quarter ended December 31, 1995. The impact of such decreases
during the December quarter will depend on the net relationship between
declines in paperstock costs and decreases in selling prices. During fiscal
1995, per ton margins between net selling prices and raw materials costs were
below historical levels during most of the year as selling price increases
lagged rises in reclaimed paper fiber costs. The recent declines in paperstock
costs may provide an opportunity to reestablish per ton margins between
selling prices and raw material costs at or near historical levels, despite
decreases in selling prices.
Environmental Matters
In connection with its preparations for a warehouse addition to its
paperboard mill located in Commerce City, Colorado, a suburb of Denver, the
Company discovered and has been investigating the presence of subsurface
petroleum hydrocarbons. The Company retained an environmental consultant who
concluded that fuel oil, jet fuel, and gasoline additives had migrated in the
subsurface of the Company's property from an adjacent property. The Company
and the adjacent property owner have jointly sponsored additional
investigations and discussions between the parties continue. The Company has
completed the construction of the warehouse addition under approval of the
Colorado Department of Health. At this time, the Company has not ascertained
the future liability, if any, of the above matter.
6
<PAGE> 8
Liquidity and Capital Resources
The following is a summary of certain financial statistics related to
the liquidity of the Company at September 30, 1995, and at June 30, 1995.
<TABLE>
<CAPTION>
September 30, June 30,
1995 1995
------------- -------------
<S> <C> <C>
Working Capital $ 15,803,000 $ 13,520,000
Current Ratio 2.0:1 2.0:1
Cash and investments $ 8,768,000 $ 6,131,000
Long-term debt (including current portion) $ 28,000,000 $ 28,000,000
</TABLE>
The Company obtained a $28,000,000 term loan from a commercial bank
for the purchase of Halltown Paperboard Company pursuant to a loan agreement
dated June 30, 1995. The term loan is to be repaid in semiannual installments
over the next seven years maturing in 2002. At the same time, the Company
entered into a two year, $7.0 million revolving credit facility, which is
renewable every year for an additional year. To date, no amounts have been
borrowed against the credit facility which expires June 30, 1997. Both the
term loan and the revolving credit facility bear interest at a London Interbank
Offered Rate plus an agreed upon margin. The agreed upon margin, which may
range from 75 to 175 basis points for the term loan and 50 to 150 basis points
for the revolving credit facility, is to be established annually based upon the
Company's coverage of fixed charges. Management believes that cash and
investments, and internally generated funds, supplemented as needed by advances
under the working capital line of credit, will be sufficient to meet the
Company's short-term working capital requirements.
The Board of Directors of the Company has approved budgeted capital
expenditures of $9.4 million for fiscal 1996. Cash provided by operations and
existing cash balances should be sufficient to fund these expenditures.
On October 26, 1995, the Board of Directors of the Company declared a
quarterly cash dividend of $ .075 per share on its outstanding common stock to
be paid on December 15, 1995, to stockholders of record on November 30, 1995.
The dividend payment will amount to approximately $792,000 and will be paid
from existing cash balances.
7
<PAGE> 9
PART II. OTHER INFORMATION
Item 1. Legal Proceedings
There are no material pending legal proceedings involving the
Company or any of its subsidiaries, other than ordinary
routine litigation incidental to the Company's business.
Item 2. Changes in Securities
Not applicable.
Item 3. Defaults Upon Senior Securities
Not applicable.
Item 4. Submission of Matters to a Vote of Security Holders
The Company held its annual Meeting of Stockholders on October
26, 1995. At the meeting, the stockholders elected
management's nine (9) nominees for the Board of Directors and
adopted an amendment to the Company's Certificate of
Incorporation changing the Company's Corporate name from
Republic Gypsum Company to "Republic Group Incorporated". The
votes on the name change amendment and the names of the
persons elected to the Board including the votes cast for, the
votes withheld and broker non- votes with respect to each
submitted item are set forth below:
<TABLE>
<CAPTION>
Votes Votes Broker
For Withheld Non-Votes
------- -------- ---------
<S> <C> <C> <C>
Phil Simpson 9,347,933 29,599 0
Stephen L. Gagnon 9,345,933 31,599 0
Bert A. Nelson 9,343,760 33,772 0
Talbot Rain 9,240,968 136,564 0
Gerald L. Ray 9,341,035 36,497 0
Robert F. Sexton 9,346,165 31,367 0
David P. Simpson 9,308,231 69,301 0
L. L. Wallace 9,290,642 86,890 0
David B. Yarbrough 9,296,062 81,470 0
Name Change Amendment 9,022,803 354,729 0
</TABLE>
Item 5. Other Information
Not applicable.
Item 6. Exhibits and Reports on Form 8-K.
(3a) Amended and Restated Certificate of Incorporation of
the Company.
Exhibit 27 Article 5 of Regulation S-X - Financial Data
Schedule.
Reports on Form 8-K. The Company filed a form 8-K, dated July
17, 1995, stating that on June 30, 1995, the Company acquired
substantially all the assets of Halltown Paperboard Company,
Halltown, West Virginia. The form 8-K includes Item 2,
Acquisition or Disposition of Assets, and Item 7, Pro Forma
Financial Information (and Exhibits) in support of Item 2 and
the audited financials of Halltown Paperboard Company.
8
<PAGE> 10
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.
REPUBLIC GROUP INCORPORATED
November 9, 1995 /s/ Doyle R. Ramsey
------------------------------
Doyle R. Ramsey
Vice President and Chief
Financial Officer
November 9, 1995 /s/ John W. McCracken
------------------------------
John W. McCracken
Controller and Principal
Accounting Officer
9
<PAGE> 11
INDEX TO EXHIBITS
Exhibit Description
- ------- -----------
(3a) Amended and Restated Certificate of Incorporation
27 Financial Data Schedule
<PAGE> 1
EXHIBIT (3a)
RESTATED
CERTIFICATE OF INCORPORATION
OF
REPUBLIC GROUP INCORPORATED
* * * *
REPUBLIC GROUP INCORPORATED, a corporation organized and existing
under and by virtue of the General Corporation Law of the State of Delaware
(the "Corporation"), DOES HEREBY CERTIFY:
1. That the Certificate of Incorporation of the Corporation was filed
with the Secretary of State of the State of Delaware on August 28, 1961 under
the name Republic Gypsum Company;
2. That, in accordance with the requirements of Section 245 of the
General Corporation Law of the State of Delaware, the Board of Directors of the
Corporation duly adopted resolutions authorizing the restatement and
integration of the Corporation's Certificate of Incorporation, as amended;
3. That the following Restated Certificate of Incorporation restates and
integrates the provisions of the Corporation's Certificate of Incorporation, as
amended, that are operative and in effect as of the date hereof, and does not
further amend such provisions, and there is no discrepancy between such
provisions and the following Restated Certificate of Incorporation;
4. That the text of the Certificate of Incorporation, as amended, is
restated and integrated in its entirety as follows:
FIRST. The name of the corporation is
REPUBLIC GROUP INCORPORATED
SECOND. Its principal office in the State of Delaware is located at No.
100 West Tenth Street, in the City of Wilmington, County of New Castle. The
name and address of its resident agent is The Corporation Trust Company, No.
100 West Tenth Street, Wilmington 99, Delaware.
THIRD. The nature of the business, or objects or purposes to be
transacted, promoted or carried on are:
To conduct and carry on the business of mining, buying, transporting,
processing, selling and dealing in gypsum and manufacturing, selling and
dealing in gypsum wallboard and other gypsum products.
<PAGE> 2
To conduct and carry on the business of general contractors and
builders; to design, plan, erect, construct, equip, alter, rebuild, remodel,
improve and repair all kinds of houses, buildings and other structures or parts
thereof and works and excavations therefor; to employ mechanics, laborers,
artisans and workmen, and to make contracts and sub- contracts for work and
materials; to manufacture, buy, sell and deal in lumber and other building
materials of all kinds; to own, manage, operate, lease, purchase and sell
buildings of all kinds and generally to transact all business of a similar
nature necessary or incidental to that purpose, and to do all things necessary
or incidental or connected with the business of contractors and builders.
To lend money, without banking privileges, and generally to engage in
the mortgage, finance and credit business.
To engage in and carry on the business of buying, leasing and otherwise
acquiring lands and interests in lands of every kind and description and
wheresoever situated; buying, leasing and otherwise acquiring and constructing
and erecting, or contracting for the construction and erection of buildings and
structures in and on such lands for any uses or purposes; holding, owning,
improving, developing, maintaining, operating, letting, leasing, mortgaging,
selling or otherwise disposing of such property or any part thereof; equipping,
furnishing and operating apartments, apartment houses, hotels, apartment
hotels, restaurants, residences, office buildings, shopping centers, industrial
complexes, industrial plants, warehouses, or any other buildings or structures
of whatsoever kind.
To build, buy, sell, lease, own and operate grain and commodity
elevators and warehouses for the storage, handling and forwarding of all kinds
of grain, produce, commodities and provisions and the by-products thereof.
To buy and sell and otherwise deal in and with grain, provisions and
other commodities.
Page 2
<PAGE> 3
To search, mine, prospect and explore for petroleum and other oils, gas
and any other useful or valuable minerals and substances or products, either
for its own account or for others; to drill for, remove, produce, acquire by
purchase or otherwise, own, use, store, transport, refine, distill,
manufacture, process, prepare for market, sell and otherwise dispose of
petroleum and other oils, bitumens, bituminous substances of all kinds,
vegetable substances, minerals and gases and all products, by-products and
residual products thereof or therefrom; to drill for, purchase, take, lease as
lessee and otherwise acquire, to own, use, maintain, develop, improve and
operate, and to sell, convey, mortgage, pledge, lease as lessor and otherwise
dispose of and deal in oil, gas and other wells and leases, royalties and other
mineral interests and any articles, materials, machinery, equipment, structures
or property uses therefor or in connection therewith; and to engage in any
trades, businesses and occupations necessary or convenient in connection with
any business of the corporation or incidental, related or contributory thereto.
To transport, ship, manufacture, purchase or otherwise acquire, invest
in, own, mortgage, pledge, sell, assign and transfer or otherwise dispose of,
trade, deal in and deal with goods, wares and merchandise and personal property
of every class and description.
To acquire, and pay for in cash, stock or bonds of this corporation or
otherwise, the good will, rights, assets and property, and to undertake or
assume the whole or any part of the obligations or liabilities of any person,
firm, association or corporation.
To acquire, hold, use, sell, assign, lease, grant licenses in respect
of, mortgage or otherwise dispose of letters patent of the United States or any
foreign country, patent rights, licenses and privileges, inventions,
improvements and processes, copyrights, trade-marks and trade names, relating
to or useful in connection with any business of this corporation.
Page 3
<PAGE> 4
To acquire by purchase, subscription or otherwise, and to receive,
hold, own, guarantee, sell, assign, exchange, transfer, mortgage, pledge or
otherwise dispose of or deal in and with any of the shares of the capital
stock, or any voting trust certificates in respect of the shares of capital
stock, scrip, warrants, rights, bonds, debentures, notes, trust receipts, and
other securities, obligations, choses in action and evidences of indebtedness
or interest issued or created by any corporations, joint stock companies,
syndicates, associations, firms, trusts or persons, public or private, or by
the government of the United States of America, or by any foreign government,
or by any state, territory, province, municipality or other political
subdivision or by any governmental agency, and as owner thereof to possess and
exercise all the rights, powers and privileges of ownership, including the
right to execute consents and vote thereon, and to do any and all acts and
things necessary or advisable for the preservation, protection, improvement and
enhancement in value thereof.
To enter into, make and perform contracts of every kind and description
with any person, firm, association, corporation, municipality, county, state,
body politic or government or colony or dependency thereof.
To borrow or raise moneys for any of the purposes of the corporation
and, from time to time without limit as to amount, to draw, make, accept,
endorse, execute and issue promissory notes, drafts, bills of exchange,
warrants, bonds, debentures and other negotiable or non-negotiable instruments
and evidences of indebtedness, and to secure the payment of any thereof and of
the interest thereon by mortgage upon or pledge, conveyance or assignment in
trust of the whole or any part of the property of the corporation, whether at
the time owned or thereafter acquired, and to sell, pledge or otherwise dispose
of such bonds or other obligations of the corporation for its corporate
purposes.
To loan to any person, firm or corporation any of its surplus funds,
either with or without security.
Page 4
<PAGE> 5
To purchase, hold, sell and transfer the shares of its own capital
stock; provided it shall not use its funds or property for the purchase of its
own shares of capital stock when such use would cause any impairment of its
capital except as otherwise permitted by law, and provided further that shares
of its own capital stock belonging to it shall not be voted upon directly or
indirectly.
To have one or more offices, to carry on all or any of its operations
and business and without restriction or limit as to amount to purchase or
otherwise acquire, hold, own, mortgage, sell, convey or otherwise dispose of,
real and personal property of every class and description in any of the states,
districts, territories or colonies of the United States, and in any and all
foreign countries, subject to the laws of such state, district, territory,
colony or country.
In general, to carry on any other business in connection with the
foregoing, and to have and exercise all the powers conferred by the laws of
Delaware upon corporations formed under the General Corporation Law of the
State of Delaware, and to do any or all of the things hereinbefore set forth to
the same extent as natural persons might or could do.
The objects and purposes specified in the foregoing clauses shall,
except where otherwise expressed, be in nowise limited or restricted by
reference to, or inference from, the terms of any other clause in this
certificate of incorporation, but the objects and purposes specified in each of
the foregoing clauses of this article shall be regarded as independent objects
and purposes.
FOURTH. The total number of shares of Capital Stock which the
Corporation shall have authority to issue is Twenty-Five Million Four Hundred
Eighty-Seven Thousand Four Hundred Ten (25,487,410) shares, divided into Four
Hundred Eighty-Seven Thousand Four Hundred Ten (487,410) shares of Preferred
Stock, without par value, issuable in series, hereinafter called "Preferred
Stock Issuable in Series," and Twenty-Five Million (25,000,000) shares of
Common Stock of the par value of $1.00 each.
Page 5
<PAGE> 6
Shares of the Preferred Stock Issuable in Series may be issued from
time to time in one or more series, the shares of each series to have such
voting powers, full or limited, or no voting powers, and such designations,
preferences and relative, participating, optional or other special rights, and
qualifications, limitations or restrictions thereof, as shall be stated and
expressed herein and in a resolution or resolutions providing for the issue of
such series adopted by the Board of Directors of the Corporation. The Board of
Directors of the Corporation is hereby expressly authorized, subject to the
limitations provided by law, to establish and designate series of the Preferred
Stock Issuable in Series, to fix the number of shares constituting each series,
and to fix the designations and the relative powers, rights, preferences and
limitations of the shares of each series and the variations in the relative
powers, rights, preferences and limitations as between series, and to increase
and to decrease the number of shares constituting each series. The authority
of the Board of Directors of the Corporation with respect to each series shall
include but shall not be limited to the authority to determine the following:
(a) The designation of such series;
(b) The number of shares initially constituting such series;
(c) The increase, and the decrease to a number not less than the
number of the outstanding shares of such series, of the number
of shares constituting such series theretofore fixed;
(d) The rate or rates and the times at which dividends on the
shares of such series shall be paid, and whether or not such
dividends shall be cumulative, and, if such dividends shall be
cumulative, the date or dates from and after which they shall
accumulate;
(e) Whether or not the shares of such series shall be redeemable,
and, if such shares shall be redeemable, the terms and
conditions of such redemption, including but not limited to the
date or dates upon or after which such shares shall be
redeemable and the amount per
Page 6
<PAGE> 7
share which shall be payable upon such redemption, which amount
may vary under different conditions and at different redemption
dates;
(f) The amount payable on the shares of such series in the event of
the voluntary or involuntary liquidation, dissolution or
winding up of the Corporation. A liquidation, dissolution or
winding up of the Corporation, as such terms are used in this
subparagraph (f), shall not be deemed to be occasioned by or to
include any consolidation or merger of the Corporation with or
into any other corporation or corporations or a sale, lease or
conveyance of all or a part of the assets of the Corporation;
(g) Whether or not the shares of such series shall have voting
rights, in addition to the voting rights provided by law, and,
if such shares shall have such voting rights, the terms and
conditions thereof, including but not limited to the right of
the holders of such shares to vote as a separate class either
alone or with the holders of shares of one or more other series
of Preferred Stock Issuable in Series and the right to have
more (or less) than one vote per share;
(h) Whether or not a sinking fund shall be provided for the
redemption of the shares of such series, and, if such a sinking
fund shall be provided, the terms and conditions thereof;
(i) Whether or not a purchase fund shall be provided for the shares
of such series, and, if such a purchase fund shall be provided,
the terms and conditions thereof;
(j) Whether or not the shares of such series shall have conversion
privileges, and, if such shares shall have conversion
privileges, the terms and conditions of conversion, including
but not limited to any provision for the adjustment of the
conversion rate or the conversion price; and
Page 7
<PAGE> 8
(k) Any other powers, preferences and relative, participating,
optional, or other special rights, or qualifications,
limitations or restrictions thereof, as shall not be
inconsistent with the provisions of this Article Fourth or the
limitations provided by law.
"No stockholder of this Corporation shall by reason of his holding
shares of any class or a series of any class, have any preemptive or
preferential right to purchase or subscribe to any shares of any class, or a
series of any class, of this Corporation, now or hereafter to be authorized, or
any notes, debentures, bonds or other securities convertible into or carrying
options or warrants to purchase shares of any class, or a series of any class,
now or hereafter to be authorized, whether or not the issuance of any such
shares, or such notes, debentures, bonds or other securities, would adversely
affect the dividend or voting rights of such stockholder, other than such
rights, if any, as the Board of Directors in its discretion from time to time
may grant and at such price as the Board of Directors in its discretion may
fix; and the Board of Directors may issue shares of any class or a series of
any class of this Corporation, or any notes, debentures, bonds, or other
securities convertible into or carrying options or warrants to purchase shares
of any class, or a series of any class, without offering any such shares,
either in whole or in part, to the existing stockholders of any class or a
series of any class."
FIFTH. The minimum amount of capital with which the corporation will
commence business is One Thousand Dollars ($1,000.00).
SIXTH. The corporation is to have perpetual existence.
SEVENTH The private property of the stockholders shall not be subject
to the payment of corporate debts to any extent whatever.
EIGHTH. In furtherance and not in limitation of the powers conferred by
statute, the board of directors is expressly authorized:
To make, alter or repeal the by-laws of the corporation.
Page 8
<PAGE> 9
To authorize and cause to be executed mortgages and liens upon the real
and personal property of the corporation.
To set apart out of any of the funds of the corporation available for
dividends a reserve or reserves for any proper purpose and to abolish any such
reserve in the manner in which it was created.
By resolution passed by a majority of the whole board, to designate one
or more committees, each committee to consist of two or more of the directors
of the corporation, which, to the extent provided in the resolution or in the
by-laws of the corporation, shall have and may exercise the powers of the board
of directors in the management of the business and affairs of the corporation,
and may authorize the seal of the corporation to be affixed to all papers which
may require it. Such committee or committees shall have such name or names as
may be stated in the by-laws of the corporation or as may be determined from
time to time by resolution adopted by the board of directors.
When and as authorized by the affirmative vote of the holders of a
majority of the stock issued and outstanding having voting power given at a
stockholders' meeting duly called for that purpose, or when authorized by the
written consent of the holders of a majority of the voting stock issued and
outstanding, to sell, lease or exchange all of the property and assets of the
corporation, including its good will and its corporate franchises, upon such
terms and conditions and for such consideration, which may be in whole or in
part shares of stock in, and/or other securities of, any other corporation or
corporations, as its board of directors shall deem expedient and for the best
interests of the corporation.
NINTH. Whenever a compromise or arrangement is proposed between this
corporation and its creditors or any class of them and/or between this
corporation and its stockholders or any class of them, any court of equitable
jurisdiction within the State of Delaware may, on the application in a summary
way of this corporation or of any creditor or stockholder thereof, or on the
application of any receiver or receivers appointed for this corporation under
the provisions of section 291 of Title 8 of the Delaware Code or on the
application of trustees in dissolution or of any receiver or receivers
appointed for this corporation under the provisions of section 279 of Title 8
of the
Page 9
<PAGE> 10
Delaware Code order a meeting of the creditors or class of creditors, and/or of
the stockholders or class of stockholders of this corporation, as the case may
be, to be summoned in such manner as the said court directs. If a majority in
number representing three-fourths in value of the creditors or class of
creditors, and/or of the stockholders or class of stockholders of this
corporation, as the case may be, agree to any compromise or arrangement and to
any reorganization of this corporation as consequence of such compromise or
arrangement, the said compromise or arrangement and the said reorganization
shall, if sanctioned by the court to which the said application has been made,
be binding on all the creditors or class of creditors, and/or on all the
stockholders or class of stockholders, of this corporation, as the case may be,
and also on this corporation.
TENTH. The corporation shall indemnify any and all of its directors or
officers or former directors or officers or any person who may have served at
its request as a director or officer of another corporation in which it owns
shares of capital stock or of which it is a creditor against expenses actually
and necessarily incurred by them in connection with the defense of any action,
suit proceeding in which they, or any of them, are made parties, or a party, by
reason of being or having been directors or officers or a director or officer
of the corporation, or of such other corporation, except in relation to matters
as to which any such director or officer or former director or officer or
person shall be adjudged in such action, suit or proceeding to be liable for
negligence or misconduct in the performance of duty. Such indemnification
shall not be deemed exclusive of any other rights to which those indemnified
may be entitled, under any by-laws, agreement, vote of stockholders, or
otherwise.
ELEVENTH. Meetings of stockholders may be held outside the State
of Delaware, if the by-laws so provide. The books of the corporation may be
kept (subject to any provision contained in the
Page 10
<PAGE> 11
statutes) outside the State of Delaware at such place or places as may be
designated from time to time by the board of directors or in the by-laws of the
corporation. Elections of directors need not be by ballot unless the by-laws
of the corporation shall so provide.
TWELFTH. The corporation reserves the right to amend, alter,
change or repeal any provision contained in this certificate of incorporation,
in the manner now or hereafter prescribed by statute, and all rights conferred
upon stockholders herein are granted subject to this reservation.
IN WITNESS WHEREOF, REPUBLIC GROUP INCORPORATED has caused this
restated Certificate of Incorporation to be executed in its corporate name by
its President and its seal to be affixed and attested by its Secretary this 3rd
day of November, 1995.
REPUBLIC GROUP INCORPORATED
By: /s/ Stephen L. Gagnon
-------------------------------
Stephen L.Gagnon
Executive Vice President
ATTEST:
/s/ Janey L. Sowell
- -----------------------
Janey L. Sowell
Secretary
Page 11
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<PERIOD-TYPE> 3-MOS
<FISCAL-YEAR-END> JUN-30-1995
<PERIOD-END> SEP-30-1995
<CASH> 4,318,000
<SECURITIES> 4,450,000
<RECEIVABLES> 15,253,000
<ALLOWANCES> 784,000
<INVENTORY> 7,290,000
<CURRENT-ASSETS> 31,781,000
<PP&E> 104,355,000
<DEPRECIATION> 36,429,000
<TOTAL-ASSETS> 100,502,000
<CURRENT-LIABILITIES> 15,978,000
<BONDS> 0
<COMMON> 10,570,000
0
0
<OTHER-SE> 42,586,000
<TOTAL-LIABILITY-AND-EQUITY> 100,502,000
<SALES> 36,623,000
<TOTAL-REVENUES> 36,623,000
<CGS> 23,422,000
<TOTAL-COSTS> 23,422,000
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