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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
DECEMBER 1, 1998
MAIL-WELL, INC.
(Exact Name of Registrant as Specified in its Charter)
COLORADO
(State or Other Jurisdiction of Incorporation)
1-12551 84-1250533
(Commission File Number) (IRS Employer Identification Number)
23 INVERNESS WAY EAST, ENGLEWOOD, CO 80112
(Address of principal executive offices) (Zip Code)
303-790-8023
(Registrant's telephone number, including area code)
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ITEM 5. OTHER EVENTS.
On December 1, 1998 the Company announced the following:
MAIL-WELL ANNOUNCES PLANS TO IMPROVE PROFITABILITY AND TO ISSUE
SENIOR SUBORDINATED DEBT
ENGLEWOOD, CO -- Mail-Well, Inc. (NYSE: MWL) announced today it plans to
improve profitability by reducing its cost structure and to support its
acquisition growth strategy by issuing senior subordinated debt.
The Company announced that as a result of its continuing effort to operate
more cost effectively, it is restructuring parts of its U.S. Envelope and
High Impact Printing businesses. These actions will result in a fourth quarter
pre-tax charge of $14.0 million, $9.7 million of which is non-cash. These
charges are a result of the regionalization of the Company's U.S. Envelope
Operations, closure of three facilities, disposal of some older, less
efficient equipment and related staff reductions. Gerald F. Mahoney,
Mail-Well's Chairman and CEO, stated, "This decision reflects our continued
commitment to remain cost competitive by reducing our overall cost structure.
These initiatives will allow us to better service our customers and more
quickly adapt to changing market conditions."
The Company also announced that it has terminated its leveraged Employee
Stock Ownership Plan ("ESOP") and plans to replace it with a new plan that
will provide similar incentives. Most of the Company's current leveraged
ESOP costs are non-deductible for tax purposes. Under the new plan, the costs
will be tax-deductible which will benefit future cash flow. The termination
will result in the issuance of 1.1 million previously unallocated shares at
a non-cash, pre-tax cost of $9.6 million in the fourth quarter. Under
generally accepted accounting principles, $9.0 million of the charge will be
offset by corresponding credits to components of stockholders' equity.
Finally, Mail-Well announced that it has been examining new financing
opportunities to support its continued growth. With the recent improvement
in the corporate debt market, the Company is considering a private placement
of approximately $200 million of senior subordinated notes. The net proceeds
from the private placement would be used to repay existing debt, which may
include the redemption of the Company's currently outstanding $85 million
10.5% senior subordinated notes due 2004. If the currently outstanding notes
are redeemed, it will result in an estimated pre-tax fourth quarter
extraordinary charge for the extinguishment of debt of $6.5 million, $2.0
million of which is non-cash.
In summary, if all of these initiatives are completed, they result in an
after-tax charge to earnings of $17.6 million, or $.31 per share, of which
$14.9 million, or $.26 per share, is non-cash and an extraordinary charge
related to the extinguishment of debt of $4.0 million or $.07 per share after
tax.
Mail-Well is a leading consolidator in the highly fragmented printing
industry, specializing fast-growing, multibillion dollar market segments:
customized envelopes, high impact printing,
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commercial printing, glue-applied consumer products labels and business
communications documents. Mail-Well has more than 11,000 employees and more
than 90 printing plants and numerous sales offices throughout North America.
Reporting 1997 sales of $900 million, Mail-Well currently has a run rate of
$1.7 billion in revenues.
This press release may make forward-looking statements. It should be
understood that all such statements are subject to various uncertainties and
risks that could affect their outcome. Factors which could cause or contribute
to such differences include, but are not limited to, product demand and sales,
interest rates, ability to obtain assumed productivity savings and availability
of acquisition opportunities. Additional information which could affect the
Company's financial results is included in the 1997 Annual Report, Forms 10-K,
10-Q and 8-K on file with the Securities and Exchange Commission. This press
release does not constitute an offer to sell or the solicitation of an offer
to buy Mail-Well's securities.
Note: News releases and other information on Mail-Well can be accessed at
www.mail-well.com.
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SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf by the
undersigned hereunto duly authorized
Mail-Well, Inc.
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(Registrant)
By: /s/ Paul V. Reilly
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Paul V. Reilly, President and
Chief Operating Officer
Date: December 1, 1998
