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UNITED STATES SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the
Securities Exchange Act of 1934
April 26, 1996
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Date of Report (Date of earliest event reported)
National Picture & Frame Company
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(Exact name of registrant as specified in its charter)
Delaware 0-22502 36-3832862
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(State or other (Commission IRS Employer
jurisdiction of File Number) Identification No.
incorporation)
1500 Commerce Street, Greenwood, MS 38930
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(Address of principal executive offices)
(601) 453-6686
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(Registrant's telephone number, including area code)
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ITEM 5. OTHER EVENTS
On April 26, 1996, National Picture & Frame Company (the "Company") issued
a press release (the "Press Release") in which the Company announced that it has
acquired 100 percent of the stock of Universal Cork, Inc. for $2.25 million. A
copy of the Press Release is filed herewith as Exhibit 99.1.
ITEM 7. FINANCIAL STATEMENTS AND EXHIBITS
(c) Exhibits.
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99.1 Press release dated April 26, 1996
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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 hereunto duly authorized.
National Picture & Frame Company
May 16, 1996
By: /s/ M. Wesley Jordan, Jr.
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M. Wesley Jordan, Jr.
Its: Chief Financial Officer
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[LETTERHEAD OF NATIONAL PICTURE & FRAME CO.]
CONTACTS:
M. Wesley Jordan, Jr., CFO
National Picture & Frame Co.
1500 Commerce Street
Greenwood, MS 38930-1910
601/453-6686
In Chicago:
Christine Harmon
Gale Strenger
847/564-5610
FOR IMMEDIATE RELEASE
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April 26, 1996
NATIONAL PICTURE ACQUIRES UNIVERSAL CORK; COMBINED COMPANIES OFFER ENHANCED
PRODUCTS, INCREASED MARKET SHARE, STRENGTHENED DISTRIBUTION
Greenwood, MS; April 26, 1996 - National Picture & Frame Co. (NNM: NPAF)
announced today that it has acquired 100 percent of the stock of Universal
Cork, Inc. According to National's management, the company paid $2.25 million
for the Universal Cork business which generates about $5-6 million in annual
revenues -- about 8-9 percent of National's estimated FY1996 revenues of $65-
66 million. The acquisition will be financed through National's line of credit
with NationsBank and promissory notes to the sellers. National is a leading
manufacturer and designer of picture frames, framed mirrors and framed art.
Universal Cork manufactures framed board products including bulletin boards,
dry erase boards and blackboards as well as cork tiles, rolled cork and other
cork products including cork stoppers.
"This acquisition is part of our strategic plan to expand National's product
lines and customer base," said Jesse C. Luxton, CEO and president.
"Universal's framed board products fit well with our current line of picture
frames, framed art and framed mirrors. Like National, Universal Cork is a
profitable, high-quality/low-cost producer in its industry. We believe that we
can bring to Universal's products the same fashion-oriented design expertise
that has worked so well for us in products such as framed mirrors."
ACQUISITION CAN EXTEND MARKETING/SALES POTENTIAL
Luxton noted that sales and marketing efforts of both companies could benefit
from the acquisition. "National's distribution is concentrated among mass
merchandisers such as Wal-Mart, Costco, Family Dollar and other large
retailers. Universal Cork has a well-established customer base that focuses on
home improvement and hardware stores. Cross-selling products among these
channels could enhance sales and profitability for both companies," he said.
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NPAF/Page 02
The market for framed board products currently is growing with double-digit-
percentage increases annually, said Luxton. This category includes framed cork
boards, blackboards and dry erase boards. The cork sheet product also shows
strong potential growth, he said. These rolled cork sheets of varying thickness
are used for a wide range of craft and household applications.
Universal Cork's sales network, consisting of 20 representatives, will be
integrated with National's sales and marketing organization to strengthen
distribution of both companies' product lines. "We see Universal's current
business as primarily what we term "continuity" or day-in, day-out business. In
contrast, National has almost a 50/50 division between continuity and
"promotional" business, in which we introduce new products or offer special
pricing to our customers so that they can build promotional events around our
merchandise. As Universal and National join forces, we'll be looking for ways to
build that type of promotional business for the cork products and board products
as well.
"Overall distribution will be enhanced by the distinctive customer bases of the
two companies. National will gain entry into Universal's customer base of
hardware and home improvement stores while Universal will benefit through
introduction of their products to large retailers and other key customers served
by National," he said.
The business cycles of the two companies are highly complementary, with the
strongest sales periods of each balancing the seasonally soft seasons of the
other. "Universal's sales are strongest during the back-to-school season, for
which products are shipped during May, June and July - traditionally soft sales
months for National. This complementary seasonality will help smooth out our
production utilization as well as increasing the consistency of revenues," said
Luxton.
"Finally, Universal enjoys a strong reputation for customer service,
responsiveness and flexibility in its industry. These same attributes have been
developed extensively at National and account for much of our success. We're
confident that the two companies' related product lines, complementary
distribution channels and similar attitudes toward customer service, quality and
low-cost production can work together toward even greater success."
Headquartered in Greenwood, MS, National Picture & Frame Co. is a leading
manufacturer and marketer of picture frames, framed mirrors and framed art sold
primarily through major mass-market retailers such as Wal-Mart, Price Costco,
Family Dollar, Dollar General and Lowe's stores. In fiscal 1995, National
Picture & Frame Co. generated $61 million in net sales. The company's common
stock is traded on the Nasdaq National Market under the ticker symbol NPAF.
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