SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, DC 20549
FORM 10-Q
XX QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d)
OF THE SECURITIES EXCHANGE ACT OF 1934 For
the quarterly period ended March 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 0-21052
ALLTRISTA CORPORATION
State of Indiana 35-1828377
345 South High Street, P. O. Box 5004
Muncie, IN 47307-5004
765/281-5000
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 Outstanding at March 30, 1997
------------------ -----------------------------
Common Stock,
without par value 7,480,112 shares
This document contains 12 pages. The exhibit index is on page 11 of 12.
Page 1 of 12
<PAGE>
ALLTRISTA CORPORATION AND SUBSIDIARIES
Quarterly Report on Form 10-Q
For the period ended March 30, 1997
INDEX
Page Number
PART I. FINANCIAL INFORMATION:
Item 1. Financial Statements
Unaudited Condensed Consolidated Statement of Income
for the three month periods ended
March 30, 1997 and March 31, 1996 3
Unaudited Condensed Consolidated Balance Sheet at
March 30, 1997 and December 31, 1996 4
Unaudited Condensed Consolidated Statement of Cash
Flows for the three month periods ended
March 30, 1997 and March 31, 1996 5
Notes to Unaudited Condensed Consolidated Financial
Statements 6
Item 2. Management's Discussion and Analysis of Financial
Condition and Results of Operations 7 - 8
PART II. OTHER INFORMATION 9
Page 2 of 12
<PAGE>
PART I. FINANCIAL INFORMATION
Item 1. Financial Statements
<TABLE>
<CAPTION>
ALLTRISTA CORPORATION AND SUBSIDIARIES
UNAUDITED CONDENSED CONSOLIDATED STATEMENT OF INCOME
(thousands of dollars except per share amounts)
Three month period ended
March 30, March 31,
1997 1996
---- ----
<S> <C> <C>
Net sales $45,642 $51,128
---------- ----------
Costs and expenses
Cost of sales 34,798 37,552
Selling, general and administrative expenses 7,938 7,753
---------- ----------
Operating earnings 2,906 5,823
Interest expense, net (609) (746)
---------- ----------
Income from continuing operations before taxes 2,297 5,077
Provision for income taxes (864) (1,987)
---------- ----------
Income from continuing operations 1,433 3,090
---------- ----------
Discontinued operations:
Earnings from discontinued operations,
net of income taxes of $216 - 267
---------- ----------
Income from discontinued operations - 267
---------- ----------
Net income $1,433 $3,357
========== ==========
Per share of common stock:
Income from continuing operations
Primary earnings per share $ .19 $ .38
========== ==========
Fully diluted earnings per share $ .19 $ .38
========== ==========
Net income
Primary earnings per share $ .19 $ .42
========== ==========
Fully diluted earnings per share $ .19 $ .41
========== ==========
See accompanying notes to unaudited condensed consolidated financial statements.
</TABLE>
Page 3 of 12
<PAGE>
<TABLE>
<CAPTION>
ALLTRISTA CORPORATION AND SUBSIDIARIES
UNAUDITED CONDENSED CONSOLIDATED BALANCE SHEET
(thousands of dollars)
March 30, December 31,
1997 1996
---------- -----------
<S> <C> <C>
ASSETS
Current assets
Cash and cash equivalents $ 1,770 $ 7,611
Accounts receivable, net 29,808 27,621
Inventories
Raw materials and supplies 9,728 9,894
Work in process and finished goods 34,659 32,368
Deferred taxes on income 3,312 3,312
Prepaid expenses 1,338 726
---------- -----------
Total current assets 80,615 81,532
----------- -----------
Property, plant and equipment, at cost 146,566 145,135
Accumulated depreciation (100,747) (99,475)
----------- -----------
45,819 45,660
Goodwill, net 20,272 20,549
Other assets 6,565 6,338
----------- -----------
Total assets $153,271 $154,079
=========== ===========
LIABILITIES AND SHAREHOLDERS' EQUITY
Current liabilities
Notes payable $ 4,780 $ -
Accounts payable 13,277 17,181
Other current liabilities 12,025 15,479
----------- -----------
Total current liabilities 30,082 32,660
----------- -----------
Noncurrent liabilities
Long-term debt 30,000 30,000
Deferred taxes on income 91 92
Other noncurrent liabilities 7,751 7,860
----------- -----------
Total noncurrent liabilities 37,842 37,952
----------- -----------
Contingencies
Shareholders' equity:
Common stock (includes 7,980,068 common
shares issued and 7,480,112 shares
outstanding at March 30, 1997) 41,440 41,457
Retained earnings 54,880 53,475
Minimum pension liability (253) (253)
Cumulative translation adjustment (77) (38)
----------- -----------
95,990 94,641
Less treasury stock (479,602 shares, at cost) (10,643) (11,174)
----------- -----------
Total shareholders' equity 85,347 83,467
----------- -----------
Total liabilities and shareholders' equity $153,271 $154,079
=========== ===========
See accompanying notes to unaudited condensed consolidated financial statements.
</TABLE>
Page 4 of 12
<PAGE>
<TABLE>
<CAPTION>
ALLTRISTA CORPORATION AND SUBSIDIARIES
UNAUDITED CONDENSED CONSOLIDATED STATEMENT OF CASH FLOWS
(thousands of dollars)
Three month period ended
March 30, March 31,
1997 1996
----------- ----------
<S> <C> <C>
Cash flows from operating activities
Net income $1,433 $3,357
Reconciliation of net income to net cash used in
operating activities:
Depreciation and amortization 2,523 2,885
Deferred employee benefits 202 232
Other (108) 54
Changes in working capital components (12,540) (9,403)
---------- ----------
Net cash used in operating activities (8,490) (2,875)
---------- ----------
Cash flows from financing activities
Proceeds from revolving credit borrowings
and notes payable 4,780 20,526
Proceeds from issuance of common stock 516 623
Acquisition of treasury stock - (1,227)
---------- ----------
Net cash provided by financing activities 5,296 19,922
---------- ----------
Cash flows from investing activities
Proceeds from sale of property, plant and
equipment 36 15
Additions to property, plant and equipment,
including product line acquisition (2,683) (17,931)
---------- ----------
Net cash used in investing activities (2,647) (17,916)
---------- ----------
Net increase (decrease) in cash (5,841) (869)
Cash and cash equivalents, beginning of period 7,611 2,333
---------- ----------
Cash and cash equivalents, end of period $1,770 $1,464
========== ==========
See accompanying notes to unaudited condensed consolidated financial statements.
</TABLE>
Page 5 of 12
<PAGE>
ALLTRISTA CORPORATION AND SUBSIDIARIES
NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
1. Presentation of Condensed Consolidated Financial Statements
Certain information and footnote disclosures, including significant
accounting policies normally included in financial statements prepared in
accordance with generally accepted accounting principles, have been
condensed or omitted. In the opinion of management, the accompanying
condensed financial statements include all adjustments necessary for a fair
presentation of the results for the interim periods presented. Results of
operations for the periods shown are not necessarily indicative of results
for the year, particularly in view of some seasonality in the Consumer
Products business. The accompanying unaudited condensed financial statements
should be read in conjunction with the Consolidated Financial Statements and
Notes to Consolidated Financial Statements of Alltrista Corporation and
Subsidiaries included in the Company's latest annual report.
2. Contingencies
The Company is subject to and involved in claims arising out of the conduct
of its business including those relating to product liability, environmental
and safety and health matters. The Company's information at this time does
not indicate that the resolution of the aforementioned claims will have a
material, adverse effect upon financial condition, results of operations,
cash flows or competitive position of the Company.
3. Earnings per share
Earnings per share for the periods are computed by dividing net income for
the period by the sum of the weighted average number of shares outstanding
for the period and the common stock equivalents which result from stock
option activity. The Company will adopt the provisions of Statement of
Financial Standards No. 128, "Earnings Per Share", in the last quarter of
1997. Proforma basic earnings per share would have been $.19 per share for
both income from continuing operations and net income in the period ended
March 30, 1997. Basic earnings per share would have been $.40 per share for
income from continuing operations and $.43 for net income in the period
ended March 31, 1996.
Page 6 of 12
<PAGE>
Item 2.
MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION
AND RESULTS OF OPERATIONS
Results of Continuing Operations
The Company reported net sales of $45.6 million for the first quarter of
1997, a decrease of 10.7% from sales of $51.1 million for the same period of
1996. Operating earnings of $2.9 million for the quarter were half of the $5.8
million in the first quarter of 1996. Sales and earnings were lower in the food
containers segment with both companies reporting decreases. Plastic Packaging
Company had reduced sales due to changes in product mix and anticipated reduced
customer orders. While operating efficiencies continue to be excellent at this
operation, these decreases also negatively affected operating earnings. As is
customary in the first quarter, Consumer Products Company operated at a deficit.
Increased selling costs, goodwill amortization and marginally lower sales
resulted in a slightly larger deficit versus 1996. Consolidation of the
manufacturing operations for both the Ball brand and Kerr brand product lines
was completed in late 1996. As a result, this division expects to achieve a
benefit in lower manufacturing costs throughout 1997. Each of the industrial
components segment operations reported decreased sales and operating earnings in
the first quarter of 1997 compared to the same period in 1996. Zinc Products
Company saw penny blank shipments decrease by nearly 50%, as anticipated, due to
high coinage inventories in the Federal Reserve System. These reduced volumes
are expected to continue at least through the second quarter of 1997. Although
earnings were substantially lower than 1996, increased sales in the industrial
products area and a 13% increase in the cost of zinc ingot, which is passed on
to customers, resulted in only a slight decrease in reported sales. A decrease
in x-ray sales resulted in an operating loss similar to the first quarter of
1996 at LumenX. The earnings impact of the sales shortfall was offset to some
degree by cost reductions in several areas of this business. Resin price
decreases and material composition changes accounted for much of the modest
sales decrease in the Industrial Plastics Company. These price decreases are
generally passed through to customers and thus, do not significantly impact
operating earnings. Unimark Plastics Company had a 17% decrease in sales that
reflects some customers' efforts to reduce their inventories and certain other
customers temporarily moving production in-house. Operating earnings suffered
due to the volume loss along with increased selling and marketing expenses at
this division.
Overall gross margin percentages have decreased from the same period in 1996,
primarily as a result of the reduced penny blank shipments at Zinc Products and
lower sales volumes at Unimark Plastics and Plastic Packaging. Increased margins
at Consumer Products reflect the impact of consolidating the closure
manufacturing operation in Jackson, Tennessee into the Muncie facility and lower
raw material costs.
Selling, general and administrative expenses increased as a percentage of
sales during the first quarter of 1997. This results from reduced sales relative
to certain fixed administrative costs, primarily at the corporate office.
Selling, general and administrative expenses fluctuated in the quarter ended
March 31, 1996 in relative proportion to the change in sales volume.
Interest expense, net for the first quarter of 1997 was $609,000, compared
to $746,000 for the same period in 1996. The decrease in interest expense from
1996 is the result of reduced daily average borrowings coupled with interest
earned on short-term investments in the first quarter of 1997. Year-to-date
borrowings under the Company's lines of credit were at a weighted average
interest rate of 5.9% compared to 4.5% a year ago.
The effective income tax rate decreased from 39.6% ti 37.6% in the first
quarter of 1997 versus 1996 due to the formation of new legal entities which
required the Company to change the way it files its state income taxes.
Financial Condition, Liquidity and Capital Resources
Working capital as of March 30, 1997 increased $1.6 million to $50.5
million from the 1996 year end level. The increase in accounts receivable and
inventories is reflective of customary seasonal activity, particularly in the
consumer products business. Short-term borrowings increased approximately $5
million to fund the seasonal working capital needs and benefit payments made in
the first quarter.
Page 7 of 12
<PAGE>
Effective April 26, 1996, the Company sold its Metal Services Company plants,
real estate, equipment and coatings and inks inventory to U.S. Can Corporation
for approximately $14.9 million. Accordingly, results for the Metal Services
business have been reflected as a discontinued operation in the statement of
income. The corporate general and administrative cost allocation made to the
discontinued operation of the Metal Services Company during the first quarter of
1996 was not included in the computation of earnings from discontinued
operations and was not allocated to the remaining segments.
The Company has $30 million of long-term debt with maturity dates beginning in
1998 and continuing through 2004 at a fixed interest rate of 7.8%. In May 1995,
the Company terminated a swap agreement, resulting in a transaction gain of $.5
million. This gain is being amortized over the original three-year term of the
swap and effectively fixes the Company's interest rate on the long-term debt
through December 1997 at 7.19%. The Company participates in a $50 million
revolving credit agreement with a group of banks, of which no borrowings were
outstanding at quarter end or year end. The Company also has available $95
million in committed and uncommitted credit lines of which $4.8 million in
borrowings was outstanding as of March 30, 1997. After reducing outstanding debt
by the cash balance, the debt-to-total capitalization ratio was 27.9% at the end
of the first quarter of 1997. This is higher than the 21.2% at December 31,
1996, as a result of normal seasonal borrowings. As of March 30, 1997,
borrowings on the Company's long-term debt and uncommitted credit lines were at
a weighted average interest rate of 7.0%.
Capital expenditures of $2.7 million in the first quarter ended March 30, 1997
are in line with the 1997 plan. Capital expenditures of $17.9 million in the
previous year's first quarter include the $14.5 million acquisition of the Kerr
home food preservation product line.
On March 27, 1997 the Company entered into a letter of intent to acquire
Viking Industries, an Arkansas-based producer of large thermoformed plastic
products sold to manufactured housing and recreational vehicle industries. The
transaction will be financed through available credit lines and is expected to
be completed in the second quarter of 1997. The transaction is not expected to
have a significant impact on the Company's consolidated results of operations.
The Company is subject to and involved in claims arising out of the conduct of
its business including those relating to product liability, environmental and
safety and health matters. The Company's information at this time does not
indicate that the resolution of the aforementioned claims will have a material,
adverse effect upon financial condition, results of operations, capital
expenditures or competitive position of the Company.
Page 8 of 12
<PAGE>
PART II. OTHER INFORMATION
Item 1. Legal proceedings
There were no events required to be reported under Item 1 for the quarter ending
March 30, 1997.
Item 2. Changes in securities
There were no events required to be reported under Item 2 for the quarter ending
March 30, 1997.
Item 3. Defaults upon senior securities
There were no events required to be reported under Item 3 for the quarter ending
March 30, 1997.
Item 4. Submission of matters to a vote of security holders
There were no events required to be reported under Item 4 for the quarter ending
March 30, 1997.
Item 5. Other information
There were no events required to be reported under Item 5 for the quarter ending
March 30, 1997.
Item 6. Exhibits and Reports on Form 8-K
a. Exhibits
11.1 Computation of earnings per share
27 Financial Data Schedule [EDGAR filing only]
b. Reports on Form 8-K
There were no events required to be reported under Form 8-K for the quarter
ending March 30, 1997.
Page 9 of 12
<PAGE>
SIGNATURE
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.
Alltrista Corporation
(Registrant)
Date: May 9, 1997 By: /s/ Kevin D. Bower
------------- ------------------
Kevin D. Bower
Senior Vice President and
Chief Financial Officer
Page 10 of 12
<PAGE>
ALLTRISTA CORPORATION AND SUBSIDIARIES
QUARTERLY REPORT ON FORM 10-Q
March 30, 1997
EXHIBIT INDEX
Exhibit Description Page
- ------- --------------------------------- ---------------
11.1 Computation of earnings per share. 11
27 Financial Data Schedule [EDGAR filing only]
Page 11 of 12
<TABLE>
<CAPTION>
Exhibit 11.1
ALLTRISTA CORPORATION
STATEMENT RE: COMPUTATION OF EARNINGS PER SHARE
(Thousands of dollars except share data)
Three month period ended
March 30, March 31,
1997 1996
---------- -----------
<S> <C> <C>
Primary Earnings Per Share
Income from continuing operations $ 1,433 $ 3,090
Discontinued operation - 267
---------- -----------
Net income $ 1,433 $ 3,357
========== ===========
Weighted average number of common shares
outstanding (000s) 7,471 7,868
Additional shares assuming conversion of
stock options 143 173
---------- -----------
Weighted average number of common and
equivalent shares 7,614 8,041
========== ===========
Primary earnings per common share:
Continuing operations $ .19 $ .38
Discontinued operation - .04
---------- -----------
Net income $ .19 $ .42
========== ===========
Fully Diluted Earnings Per Share
Income from continuing operations $ 1,433 $ 3,090
Discontinued operation - 267
---------- -----------
Net income $ 1,433 $ 3,357
========== ===========
Weighted average number of common shares
outstanding (000s) 7,471 7,868
Additional shares assuming conversion of
stock options 143 225
---------- -----------
Weighted average number of common and
equivalent shares 7,614 8,094
========== ===========
Fully diluted earnings per common share:
Continuing operations $ .19 $ .38
Discontinued operation - .03
---------- -----------
Net income $ .19 $ .41
========== ===========
</TABLE>
Page 12 of 12
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
THIS SCHEDULE CONTAINS SUMMARY INFORMATION EXTRACTED FROM THE
COMPANY'S CONSOLIDATED FINANCIAL STATEMENTS FOR THE THREE MONTHS ENDED
MARCH 30, 1997 AND IS QUALIFIED IN ITS ENTIRETY BY REFERENCE TO SUCH FINANCIAL
STATEMENTS
</LEGEND>
<CIK> 0000895655
<NAME> ALLTRISTA CORPORATION
<MULTIPLIER> 1,000
<S> <C>
<PERIOD-TYPE> 3-MOS
<FISCAL-YEAR-END> DEC-31-1997
<PERIOD-START> JAN-01-1997
<PERIOD-END> MAR-30-1997
<CASH> 1,770
<SECURITIES> 0
<RECEIVABLES> 29,808
<ALLOWANCES> 0
<INVENTORY> 44,387
<CURRENT-ASSETS> 80,615
<PP&E> 146,566
<DEPRECIATION> 100,746
<TOTAL-ASSETS> 153,271
<CURRENT-LIABILITIES> 30,082
<BONDS> 30,000
0
0
<COMMON> 41,440
<OTHER-SE> 43,907
<TOTAL-LIABILITY-AND-EQUITY> 153,271
<SALES> 45,642
<TOTAL-REVENUES> 45,642
<CGS> 34,798
<TOTAL-COSTS> 34,798
<OTHER-EXPENSES> 0
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 609
<INCOME-PRETAX> 2,297
<INCOME-TAX> 864
<INCOME-CONTINUING> 1,433
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 1,433
<EPS-PRIMARY> 0.19
<EPS-DILUTED> 0.19
</TABLE>
