<PAGE> 1
================================================================================
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
-------------------------
FORM 10-Q
QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d)
OF THE SECURITIES EXCHANGE ACT OF 1934
-------------------------
For the Quarter Ended March 31, 1998 Commission File Number 33-60714
IVEX PACKAGING CORPORATION
(Exact name of registrant as specified in its charter)
<TABLE>
<S> <C>
Delaware 76-0171625
(State or other jurisdiction (I.R.S. Employer
of incorporation) Identification No.)
100 Tri-State Drive
Lincolnshire, Illinois 60069
(Address of Principal (Zip Code)
Executive Office)
</TABLE>
Registrant's Telephone number, including area code: (847) 945-9100
Indicate by check mark whether the registrant (1) has filed all reports
required to be filed by Section 13 or 15(d) of the Securities Exchange Act of
1934 during the preceding 12 months, and (2) has been subject to such filing
requirements for the past 90 days.
Yes X No ____
At April 28, 1998, there were 20,431,268 shares of common stock, par value
$0.01 per share, outstanding.
================================================================================
<PAGE> 2
IVEX PACKAGING CORPORATION
CONSOLIDATED BALANCE SHEETS
(DOLLARS IN THOUSANDS, EXCEPT PER SHARE DATA)
(UNAUDITED)
<TABLE>
<CAPTION>
MARCH 31, DECEMBER 31,
1998 1997
--------- ------------
<S> <C> <C>
ASSETS
Current Assets:
Cash and cash equivalents................................. $ 6,749 $ 5,989
Accounts receivable trade, net of allowance............... 69,713 64,952
Inventories............................................... 66,306 59,706
Prepaid expenses and other................................ 4,625 5,759
--------- ---------
Total current assets............................... 147,393 136,406
--------- ---------
Property, Plant and Equipment:
Buildings and improvements................................ 57,099 56,336
Machinery and equipment................................... 272,700 272,602
Construction in progress.................................. 13,905 9,225
--------- ---------
343,704 338,163
Less -- Accumulated depreciation.......................... (155,536) (149,207)
--------- ---------
188,168 188,956
Land...................................................... 9,188 9,077
--------- ---------
Total property, plant and equipment................ 197,356 198,033
--------- ---------
Other Assets:
Goodwill, net of accumulated amortization................. 34,654 35,278
Deferred income taxes..................................... 34,449 36,647
Management receivable..................................... 14,761 11,135
Miscellaneous............................................. 10,261 10,224
--------- ---------
Total other assets................................. 94,125 93,284
--------- ---------
Total Assets................................................ $ 438,874 $ 427,723
========= =========
LIABILITIES AND STOCKHOLDERS' DEFICIT
Current Liabilities:
Current installments of long-term debt.................... $ 21,561 $ 19,744
Accounts payable.......................................... 38,833 38,675
Accrued salary and wages.................................. 9,105 9,114
Self insurance reserves................................... 6,812 6,799
Accrued rebates and discounts............................. 4,035 4,596
Accrued interest.......................................... 4,261 4,191
Other accrued expenses.................................... 12,229 11,546
--------- ---------
Total current liabilities.......................... 96,836 94,665
--------- ---------
Long-Term Debt.............................................. 325,201 319,055
--------- ---------
Other Long-Term Liabilities................................. 20,895 21,868
--------- ---------
Deferred Income Taxes....................................... 4,216 4,304
--------- ---------
Commitments.................................................
--------- ---------
Stockholders' Deficit:
Common stock, $.01 par value -- 45,000,000 shares
authorized; 20,426,666 shares issued and outstanding at
March 31, 1998 and December 31, 1997.................... 204 204
Paid in capital in excess of par value.................... 328,285 328,322
Accumulated deficit....................................... (334,521) (339,836)
Accumulated other comprehensive income (loss)............. (2,242) (859)
--------- ---------
Total stockholders' deficit........................ (8,274) (12,169)
--------- ---------
Total Liabilities and Stockholders' Deficit................. $ 438,874 $ 427,723
========= =========
</TABLE>
The accompanying notes are an integral part of this statement.
2
<PAGE> 3
IVEX PACKAGING CORPORATION
CONSOLIDATED STATEMENTS OF OPERATIONS
(DOLLARS IN THOUSANDS, EXCEPT PER SHARE DATA)
(UNAUDITED)
<TABLE>
<CAPTION>
QUARTER ENDED MARCH 31,
-------------------------
1998 1997
---- ----
<S> <C> <C>
Net sales................................................... $ 136,168 $ 127,864
Cost of goods sold.......................................... 104,671 101,494
----------- -----------
Gross profit................................................ 31,497 26,370
----------- -----------
Operating expenses:
Selling................................................... 7,286 6,137
Administrative............................................ 8,538 8,282
Amortization of intangibles............................... 316 171
----------- -----------
Total operating expenses.................................... 16,140 14,590
----------- -----------
Income from operations...................................... 15,357 11,780
Interest expense............................................ 6,497 11,129
----------- -----------
Income before income taxes.................................. 8,860 651
Income tax provision........................................ 3,545 327
----------- -----------
Net income.................................................. $ 5,315 $ 324
=========== ===========
Earnings per share:
Basic:
Net income............................................. $ 0.26 $ 0.03
=========== ===========
Weighted average shares outstanding.................... 20,426,666 10,352,533
=========== ===========
Diluted:
Net income............................................. $ 0.26 $ 0.03
=========== ===========
Weighted average shares outstanding.................... 20,651,819 10,352,533
=========== ===========
</TABLE>
The accompanying notes are an integral part of this statement.
3
<PAGE> 4
IVEX PACKAGING CORPORATION
CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS' DEFICIT
(DOLLARS IN THOUSANDS, EXCEPT SHARE DATA)
(UNAUDITED)
<TABLE>
<CAPTION>
PAID IN ACCUMULATED
COMMON STOCK CAPITAL OTHER
------------------- IN EXCESS OF ACCUMULATED COMPREHENSIVE STOCKHOLDERS' COMPREHENSIVE
SHARES AMOUNT PAR VALUE DEFICIT INCOME (LOSS) DEFICIT INCOME (LOSS)
------ ------ ------------ ----------- ------------- ------------- -------------
<S> <C> <C> <C> <C> <C> <C> <C>
Balance at December 31, 1996... 1,072,246 $ 11 $177,375 $(303,566) $(1,164) $(127,344)
Issuance of management
shares..................... 218,968 2 33,824 33,826
Common stock split........... 11,175,452 112 (112)
Issuance of common stock..... 7,960,000 79 117,235 117,314
Net loss..................... (36,270) (36,270) $(36,270)
Other comprehensive income
(foreign currency
translation adjustment).... 305 305 305
--------
Comprehensive income
(loss)..................... $(35,965)
---------- ---- -------- --------- ------- --------- ========
Balance at December 31, 1997... 20,426,666 204 328,322 (339,836) (859) (12,169)
Other........................ (37) (37)
Net income................... 5,315 5,315 $ 5,315
Other comprehensive income
(foreign currency
translation adjustment).... (1,383) (1,383) (1,383)
--------
Comprehensive income
(loss)..................... $ 3,932
---------- ---- -------- --------- ------- --------- ========
Balance at March 31, 1998...... 20,426,666 $204 $328,285 $(334,521) $(2,242) $ (8,274)
========== ==== ======== ========= ======= =========
</TABLE>
The accompanying notes are an integral part of this statement.
4
<PAGE> 5
IVEX PACKAGING CORPORATION
CONSOLIDATED STATEMENTS OF CASH FLOWS
(DOLLARS IN THOUSANDS)
(UNAUDITED)
<TABLE>
<CAPTION>
THREE MONTHS ENDED
MARCH 31,
----------------------
1998 1997
---- ----
<S> <C> <C>
Cash flows from operating activities:
Net income................................................ $ 5,315 $ 324
Adjustments to reconcile net income to net cash from
operating activities:
Depreciation of properties........................... 6,904 6,053
Amortization of intangibles and debt issue costs..... 494 536
Non-cash interest.................................... 3,425
Deferred income taxes................................ 2,198
------- --------
14,911 10,338
Change in operating assets and liabilities:
Accounts receivable.................................. (5,007) (6,796)
Inventories.......................................... (6,798) (2,150)
Prepaid expenses and other assets.................... 1,133 1,034
Accounts payable..................................... 330 (6,561)
Accrued expenses and other liabilities............... (912) 1,728
------- --------
Net cash from (used by) operating activities...... 3,657 (2,407)
------- --------
Cash flows from financing activities:
Payment of senior credit facility......................... (4,125) (1,250)
Proceeds from revolving credit facility................... 12,200 44,900
Management loan........................................... (3,626)
Payment of debt issue costs............................... (140) (210)
Other, net................................................ (253) (406)
------- --------
Net cash from financing activities................ 4,056 43,034
------- --------
Cash flows from investing activities:
Purchase of property, plant and equipment................. (6,652) (5,479)
Acquisitions.............................................. (30,558)
Other, net................................................ (301) (104)
------- --------
Net cash used by investing activities............. (6,953) (36,141)
------- --------
Net increase in cash and cash equivalents................... 760 4,486
Cash and cash equivalents at beginning of period............ 5,989 2,822
------- --------
Cash and cash equivalents at end of period.................. $ 6,749 $ 7,308
======= ========
Supplemental cash flow disclosures:
Cash paid during the period for:
Interest............................................... $ 6,474 $ 2,384
Income taxes........................................... 1,875 349
</TABLE>
The accompanying notes are an integral part of this statement.
5
<PAGE> 6
IVEX PACKAGING CORPORATION
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(DOLLARS IN THOUSANDS, EXCEPT PER SHARE DATA)
NOTE 1 -- ACCOUNTING AND REPORTING POLICIES
In the opinion of management, the information in the accompanying unaudited
consolidated financial statements reflects all adjustments necessary for a fair
statement of results for the interim periods. These interim consolidated
financial statements should be read in conjunction with the consolidated
financial statements and the notes thereto included in the Annual Report on Form
10-K for the year ended December 31, 1997 (the "Form 10-K") of Ivex Packaging
Corporation ("Ivex" or the "Company"). IPC, Inc. ("IPC") is the only direct
subsidiary of Ivex and is wholly owned.
The Company's accounting and reporting policies are summarized in Note 2 to
the consolidated financial statements of the Ivex Form 10-K.
Accounts Receivable
Accounts receivable at March 31, 1998 and December 31, 1997 consist of the
following:
<TABLE>
<CAPTION>
MARCH 31, DECEMBER 31,
1998 1997
--------- ------------
<S> <C> <C>
Accounts receivable................................... $72,317 $67,496
Less -- Allowance for doubtful accounts............... (2,604) (2,544)
------- -------
$69,713 $64,952
======= =======
</TABLE>
Inventories
Inventories at March 31, 1998 and December 31, 1997 consist of the
following:
<TABLE>
<CAPTION>
MARCH 31, DECEMBER 31,
1998 1997
--------- ------------
<S> <C> <C>
Raw materials........................................... $32,192 $32,200
Finished goods.......................................... 34,114 27,506
------- -------
$66,306 $59,706
======= =======
</TABLE>
NOTE 2 -- LONG-TERM DEBT
At March 31, 1998 and December 31, 1997, the long-term debt of the Company
was as follows:
<TABLE>
<CAPTION>
MARCH 31, DECEMBER 31,
1998 1997
--------- ------------
<S> <C> <C>
Senior credit facility.................................. $304,950 $296,875
Industrial revenue bonds................................ 39,720 39,736
Other................................................... 2,092 2,188
-------- --------
Total debt outstanding............................. 346,762 338,799
Less -- Current installments of long-term debt.......... (21,561) (19,744)
-------- --------
Long-term debt..................................... $325,201 $319,055
======== ========
</TABLE>
NOTE 3 -- COMPREHENSIVE INCOME
During the quarter ended March 31, 1998, the Company adopted SFAS 130,
"Reporting Comprehensive Income," which requires the Company to disclose, in
financial statement format, all non-owner changes in equity. As of the quarter
ended March 31, 1998, all such changes in equity resulted from changes in
foreign currency translation adjustments.
6
<PAGE> 7
IVEX PACKAGING CORPORATION
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- CONTINUED
NOTE 4 -- SUBSEQUENT EVENTS
On April 23, 1998, Ivex acquired all of the common stock of Ultra Pac, Inc.
("Ultra Pac"), a Rogers, Minnesota based specialty packaging company, for
approximately $67,000. Ivex assumed approximately $18,700 of Ultra Pac
indebtedness and paid fees associated with the transaction of approximately
$2,300. Ultra Pac is a leading North American producer of PET food packaging
that designs and manufactures plastic containers and packaging for the food
industry, including supermarkets, distributors of food packaging, wholesale
bakeries, produce growers, delicatessens, food processors and foodservice
companies. Ultra Pac had net sales of approximately $56,700 in its fiscal year
ended January 31, 1998.
On April 23, 1998, the Company announced that it intends to file a
registration statement under the Securities Act of 1933, as amended, to register
approximately 500,000 shares of its common stock and approximately 4.5 million
shares of common stock owned by certain selling stockholders (the "Offerings").
The net proceeds of the shares to be sold by the Company will be used to repay
certain indebtedness.
7
<PAGE> 8
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
OF OPERATIONS.
References to the Company or Ivex herein reflect the consolidated results
of Ivex Packaging Corporation.
RESULTS OF OPERATIONS -- FOR THE THREE MONTHS ENDED MARCH 31, 1998 AND 1997
Net Sales
The Company's net sales increased by 6.5% during the first quarter of 1998
over the Company's net sales during the corresponding period in 1997 primarily
as a result of the first quarter 1997 acquisition of M&R Plastics Inc., the
third quarter 1997 acquisition of AVPEX International Corporation and the fourth
quarter 1997 acquisition of Crystal Thermoplastics, Inc. The following table
sets forth information with respect to net sales of the Company's product groups
for the periods presented:
<TABLE>
<CAPTION>
THREE MONTHS ENDED MARCH 31,
-------------------------------------------
% OF % OF
1998 NET SALES 1997 NET SALES
---- --------- ---- ---------
(DOLLARS IN THOUSANDS)
<S> <C> <C> <C> <C>
Consumer Packaging.................................... $ 81,383 59.8 $ 72,048 56.3
Industrial Packaging.................................. 54,785 40.2 55,816 43.7
-------- ----- -------- -----
Total............................................ $136,168 100.0 $127,864 100.0
======== ===== ======== =====
</TABLE>
Consumer Packaging net sales increased by 13.0% during the first quarter of
1998 from the corresponding period in 1997, primarily from incremental sales
associated with the 1997 acquisitions. Additionally, the sales increase is the
result of increased unit sales volume of extruded sheet and film, offset by
decreased average selling prices in 1998 compared to 1997. Sales of converted
plastic and paper products for food applications, excluding the sales relating
to the 1997 acquisitions, increased approximately 6.5% during 1998 compared to
the prior year.
Industrial Packaging net sales decreased by 1.8% during the first quarter
of 1998 from the corresponding period in 1997, primarily due to decreased unit
volume of the Company's protective packaging products and slightly decreased
pricing on the Company's surface protection products (primarily associated with
lower raw material costs). The number of tons and average net selling price of
recycled and specialty paper during the first quarter of 1998 was consistent
with the prior year.
Gross Profit
The Company's gross profit increased 19.4% during the first quarter of 1998
compared to the corresponding period in the prior year primarily as a result of
the increased sales volume, the incremental effects from the 1997 acquisitions
and strong cost control across all businesses. Gross profit margin increased to
23.1% during the first quarter of 1998 compared to 20.6% during the first
quarter of 1997. The increase in gross profit margin resulted from improved
absorption and a favorable product mix associated with the 1997 acquisitions,
improved cost control across all businesses and reduced energy costs for the
Company's recycled and specialty paper business. The gross profit margin
increase was partially offset by the severe weather in Canada during January,
downtime on the European extrusion line for a planned upgrade and decreased
profitability of the Company's polymerization operations.
Operating Expenses
Selling and administrative expenses increased 10.6% during the first
quarter of 1998 primarily as a result of the 1997 acquisitions. As a percentage
of net sales, selling and administrative expenses increased to 11.9% during the
first quarter of 1998 compared to 11.4% during the same period in the prior year
primarily because of the higher selling and administrative expenses associated
with the Company's 1997 acquisitions and reduced sales of the Company's
protective packaging products.
8
<PAGE> 9
Amortization of intangibles increased 84.8% during the first quarter of
1998 compared to the same period in 1997 as a result of increased goodwill and
non-compete agreement amortization associated with the 1997 acquisitions.
Income from Operations
Income from operations was $15.4 million during the first quarter of 1998
compared to $11.8 million during the first quarter of 1997. The increase in
income from operations is primarily a result of the 1997 acquisitions and
improved gross profit. Operating margin was 11.3% for the first quarter of 1998
compared to operating margin of 9.2% during the first quarter of 1997. The
increase in operating margin is primarily due to the increased gross profit
margin partially offset by increased selling and administrative expenses as a
percentage of net sales.
Interest Expense
Interest expense during the first quarter of 1998 was $6.5 million compared
to $11.1 million during the same period in 1997. The decrease is the result of
lower outstanding aggregate indebtedness and lower interest rates associated
with the Company's fourth quarter 1997 initial public offering and debt
refinancing.
Income Taxes
The Company's effective tax rate for the first quarter of 1998 was 40%
reflecting an effective federal tax provision of 35% and an effective state tax
provision approximating 5%. The Company's income tax provision during the first
quarter of 1997 reflects primarily state and foreign tax and federal alternative
minimum tax (due to federal net operating loss carryforwards).
Net Income
Net income increased to $5.3 million during the first quarter of 1998
compared to net income of $0.3 million in the prior year. The increase in net
income is the result of the improved income from operations and decreased
interest expense.
Earnings per share
Diluted earnings per share increased to $0.26 during the first quarter of
1998 compared to $0.03 during the first quarter of 1997. The increase is the
result of the increased net income partially offset by a greater number of
shares outstanding associated with the Company's fourth quarter 1997 initial
public offering.
Adjusted EBITDA
Adjusted EBITDA includes income from operations adjusted to exclude
depreciation and amortization expenses, goodwill write-off and special charges.
The Company believes that Adjusted EBITDA provides additional information for
determining its ability to meet future debt service requirements. However,
Adjusted EBITDA is not a defined term under GAAP and is not indicative of
operating income or cash flow from operations as determined under GAAP.
9
<PAGE> 10
The following table sets forth information with respect to Adjusted EBITDA
of the Company's product groups for the periods presented.
<TABLE>
<CAPTION>
THREE MONTHS ENDED MARCH 31,
--------------------------------------------
% OF % OF
1998 NET SALES 1997 NET SALES
---- --------- ---- ---------
(DOLLARS IN THOUSANDS)
<S> <C> <C> <C> <C>
Consumer Packaging....................... $15,147 18.6 $11,220 15.6
Industrial Packaging..................... 9,103 16.6 8,327 14.9
Corporate Expense........................ (1,673) -- (1,543) --
------- -------
Total.................................. $22,577 16.6 $18,004 14.1
======= =======
</TABLE>
The Company's Adjusted EBITDA increased 25.4% from $18.0 million to $22.6
million and Adjusted EBITDA margin increased from 14.1% to 16.6% during the
first quarter of 1998 compared to the same period in 1997. The 35.0%, or $3.9
million, increase in Consumer Packaging's Adjusted EBITDA in the current quarter
is primarily attributable to the incremental Adjusted EBITDA from the Company's
1997 acquisitions and a favorable mix of extruded sheet and film products. The
increase was partially offset by reduced Adjusted EBITDA associated with the
severe weather in Canada during January, downtime on the European extrusion line
for a planned upgrade and decreased profitability of the Company's
polymerization operations. The increase in Industrial Packaging's Adjusted
EBITDA of 9.3%, or $776,000, is primarily due to decreased energy costs in the
Company's recycled and specialty paper business.
LIQUIDITY AND CAPITAL RESOURCES
Recent Developments
The Company intends to use the proceeds of the Offerings to reduce a
portion of the borrowing under the revolving portion of IPC's senior credit
facility (the "Credit Facility"), including a portion of the indebtedness which
the Company incurred in connection with the acquisition of Ultra Pac, the
refinancing of Ultra Pac's indebtedness and related expenses. After giving
effect to the completion of the Offerings and the incurrence of indebtedness
related to the acquisition of Ultra Pac, at March 31, 1998, the Company would
have borrowed approximately $89.6 million under its $175 million revolving
Credit Facility and would have had approximately $39.2 million available under
the revolving portion of the Credit Facility (taking into account letters of
credit under the revolving portion of the Credit Facility). The Company is
currently considering a variety of financing alternatives to increase its
borrowing capacity, although there can be no assurances that the Company will
successfully obtain such additional capacity.
Historical Liquidity and Capital Resources
At March 31, 1998, the Company had cash and cash equivalents of $6.7
million and $115.6 million was available under the revolving credit portion of
the Credit Facility. IPC's working capital at March 31, 1998 was $50.6 million.
The primary short-term and long-term operating cash requirements for the
Company are for debt service, working capital, acquisitions and capital
expenditures. The Company expects to rely on cash generated from operations
supplemented by revolving credit facility borrowings under the Credit Facility
to fund the Company's principal short-term and long-term cash requirements.
The Credit Facility is comprised of a $150.0 million Term A Loan, a $150.0
million Term B Loan and a $175.0 million revolving credit facility (up to $65.0
million of which may be in the form of letters of credit). The Term A Loan is
required to be repaid in quarterly payments totaling $3.75 million in 1997,
$16.25 million in 1998, $21.25 million in 1999, $25.0 million in 2000, $26.25
million in 2001, $31.25 million in 2002 and $26.25 million in 2003 and the Term
B Loan is required to be repaid in quarterly payments totaling $1.5 million per
annum through September 30, 2003 and four installments of $35.25 million on
December 31, 2003, March 31, 2004, June 30, 2004 and September 30, 2004. The
interest rate of the Credit Facility can be,
10
<PAGE> 11
at the election of IPC, based upon LIBOR or the Adjusted Base Rate, as defined
therein, and is subject to certain performance pricing adjustments. The Term A
Loan and loans under the revolving credit facility bear interest at rates up to
LIBOR plus 1.625% or the Adjusted Base Rate plus 0.625%. As of March 31, 1998,
such rate is LIBOR plus 1.375%. The Term B Loan bears interest at rates up to
LIBOR plus 2.00% or the Adjusted Base Rate plus 1.0%. As of March 31, 1998, such
rate is LIBOR plus 1.75%. Borrowings are secured by substantially all the assets
of the Company and its subsidiaries. The revolving credit facility and Term A
Loan will terminate on September 30, 2003 and the Term B Loan will terminate on
September 30, 2004. Under the Credit Facility, IPC is required to maintain
certain financial ratios and levels of net worth and future indebtedness and
dividends are restricted, among other things. The Company believes it is
currently in compliance with the terms and conditions of the Credit Facility in
all material respects.
During 1997, the Company entered into interest rate swap agreements with a
group of banks having notional amounts totaling $100.0 million through November
5, 2002. These agreements effectively fix a portion of the Company's LIBOR base
rate at 6.12% during this period. Concurrently with the implementation of the
swap agreements, the Company also entered into no cost interest rate collar
agreements with a group of banks having notional amounts totaling $100.0 million
through November 5, 2002. These collar agreements effectively fix the LIBOR base
rate at a maximum of 7.00% and allow for the Company to pay the market LIBOR
from a floor of 5.55% to the maximum rate. If LIBOR falls below 5.55%, the
Company is required to pay the floor rate of 5.55%. During 1996, the Company
entered into interest rate swap agreements for the term loans for notional
amounts totaling $60.0 million through January 19, 1999. Such agreements
effectively fix the Company's LIBOR base rate at 5.33% during this period.
Income or expense related to settlements under these agreements are recorded as
adjustments to interest expense in the Company's financial statements.
IPC's industrial revenue bonds require monthly interest payments and are
due in varying amounts and dates through 2009. Certain letters of credit under
the Credit Facility provide credit enhancement for IPC's industrial revenue
bonds.
The Company made capital expenditures of $6.7 million and $5.5 million in
the three months ended March 31, 1998 and 1997, respectively. The Company was
not committed under any material contractual obligations for capital
expenditures as of March 31, 1998.
The Company is currently undergoing an enterprise-wide assessment of its
Year 2000 expenses. Currently the Company does not anticipate encountering
significant problems in adapting its system to the Year 2000 nor are the
incremental costs associated with becoming Year 2000 compliant considered to be
material, although there can be no assurances that this will be the case.
SPECIAL NOTE REGARDING FORWARD-LOOKING STATEMENTS
Certain statements in "Management's Discussion and Analysis of Financial
Condition and Results of Operations -- Liquidity and Capital Resources"
constitute "forward-looking statements" within the meaning of the Private
Securities Litigation Reform Act of 1995 (the "Reform Act"). Such
forward-looking statements involve known and unknown risks, uncertainties and
other factors which may cause the actual results, performance or achievements of
the Company to be materially different from any future results, performance or
achievements expressed or implied by such forward-looking statements. Such
factors include, among others, the Company's actual performance and highly
leveraged financial condition (see "-- Liquidity and Capital Resources" above).
11
<PAGE> 12
PART II. OTHER INFORMATION
ITEM 1. LEGAL PROCEEDINGS.
From time to time Ivex and its subsidiaries are involved in various
litigation matters arising in the ordinary course of business. Ivex believes
that none of the matters in which Ivex or its subsidiaries are currently
involved, either individually or in the aggregate, is material to Ivex or IPC.
ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K.
None.
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.
IVEX PACKAGING CORPORATION
By: /s/ FRANK V. TANNURA
------------------------------------
Frank V. Tannura
Vice President and Principal
Financial Officer
April 28, 1998
(Date)
12
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM THE
CONSOLIDATED BALANCE SHEET AT MARCH 31, 1998 AND THE CONSOLIDATED STATEMENT OF
OPERATIONS FOR THE THREE MONTHS ENDED MARCH 31, 1998 AND IS QUALIFIED IN ITS
ENTIRETY BY REFERENCE TO SUCH FINANCIAL STATEMENTS.
</LEGEND>
<MULTIPLIER> 1,000
<S> <C>
<PERIOD-TYPE> 3-MOS
<FISCAL-YEAR-END> DEC-31-1998
<PERIOD-START> JAN-01-1998
<PERIOD-END> MAR-31-1998
<CASH> 6,749
<SECURITIES> 0
<RECEIVABLES> 72,317
<ALLOWANCES> 2,604
<INVENTORY> 66,306
<CURRENT-ASSETS> 147,393
<PP&E> 352,892
<DEPRECIATION> 155,536
<TOTAL-ASSETS> 438,874
<CURRENT-LIABILITIES> 96,836
<BONDS> 325,201
0
0
<COMMON> 204
<OTHER-SE> (8,478)
<TOTAL-LIABILITY-AND-EQUITY> 438,874
<SALES> 136,168
<TOTAL-REVENUES> 136,168
<CGS> 104,671
<TOTAL-COSTS> 104,671
<OTHER-EXPENSES> 0
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 6,497
<INCOME-PRETAX> 8,860
<INCOME-TAX> 3,545
<INCOME-CONTINUING> 5,315
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 5,315
<EPS-PRIMARY> $.26
<EPS-DILUTED> $.26
</TABLE>
