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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
JANUARY 28, 1999
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 January 28, 1999 the Company announced the following:
MAIL-WELL ANNOUNCES RECORD FOURTH QUARTER AND 1998 RESULTS; FOURTH
QUARTER SALES UP 77%, NET INCOME UP 71%
ENGLEWOOD, CO--Mail-Well Inc. (NYSE: MWL) announced today record sales
and earnings before unusual items for the fourth quarter and the year
ended December 31, 1998.
Net sales for the fourth quarter increased 77% to a record $431.8
million from $244.6 million reported in 1997. Net income before unusual
items increased 71% to a record $14.0 million from $8.2 million for the
reported, comparative quarter in 1997. Earnings per diluted share
before unusual items increased 29% to a record $0.27 compared to $0.21
for the reported fourth quarter last year.
For the year ended December 31, 1998, net sales increased 68% to a
record $1.5 billion and net income before unusual items increased 68% to
a record $47.6 million. Earnings per diluted share before unusual items
increased 25% to a record $0.94 from $0.75 reported last year.
The fourth quarter reported results will include a previously announced
after-tax charge of $25.9 million, or $0.45 per diluted share, of which
$19.6 million is non-cash. The fourth quarter charge relates to the
restructuring of the U.S. Envelope and High Impact Printing businesses,
the termination of a leveraged Employee Stock Ownership Plan and the
redemption of the Company's $85 million 10.5% Senior Subordinated Notes
due 2004. In addition, accounting principles require that as a result
of these unusual charges, the reported fourth quarter and full year
earnings per diluted share calculation will exclude the normal
adjustment related to the 5% Convertible Subordinated Notes, and the
fourth quarter calculation will also exclude the normal adjustment for
stock options. Including the effects of these unusual items, the fourth
quarter loss per diluted share was ($0.25) compared to $0.06 earnings
per diluted share reported last year and 1998 earnings per diluted share
was $0.45 compared to $0.59 reported last year.
"This was a strong quarter for Mail-Well," said Gerald F. Mahoney,
Chairman and CEO of Mail-Well. "We are very pleased with the progress
made in implementing our previously announced plans to improve
profitability in our U.S. Envelope and High Impact businesses. We also
successfully completed a $300 million Senior Subordinated Notes offering
that will add favorable fixed rate long-term debt to our capital
structure and provide the funds for continuing our acquisition program.
We are excited about 1999 and are focused on creating shareholder value
by driving growth, improving our operating margins and continuing our
acquisition program."
Mail-Well is a leading consolidator in the highly fragmented printing
industry, specializing in four fast-growing multibillion-dollar market
segments: commercial printing, envelope printing, consumer product
labels and documents printing. Mail-Well has more than 11,000
employees, 100 printing plants and numerous sales offices throughout
North America.
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.
Note: News releases and other information on Mail-Well can be accessed
at www.mail-well.com
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(more)
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<TABLE>
MAIL-WELL, INC.
CONDENSED INCOME STATEMENT
THREE MONTHS AND YEAR ENDED DECEMBER 31, 1998
(MILLIONS, EXCEPT PER SHARE AMOUNTS)
<CAPTION>
THREE MONTHS ENDED DECEMBER 31, YEAR ENDED DECEMBER 31,
---------------------------------------- ------------------------------------------
1997 1997
1998 ---------------------------- 1998 ----------------------------
CONDENSED INCOME STATEMENT <F1> AS REPORTED RESTATED <F2> <F1> AS REPORTED RESTATED <F2>
------ ----------- ------------- -------- ------------ -------------
<S> <C> <C> <C> <C> <C> <C>
Net sales $431.8 $244.6 $291.2 $1,504.7 $897.6 $1,073.9
Gross profit 94.2 55.6 66.3 319.3 199.0 239.7
Selling, administrative and other 59.0 34.5 42.3 200.2 123.9 153.9
Merger expenses 0.0 0.0 0.0 3.3 0.0 0.0
------ ------ ------ -------- ------ --------
Operating income 35.2 21.1 24.0 115.8 75.1 85.8
Interest and other expense 12.1 6.1 6.4 37.1 25.1 28.0
------ ------ ------ -------- ------ --------
Income before income taxes and
extraordinary item 23.1 15.0 17.6 78.7 50.0 57.8
Income taxes 9.1 6.8 7.2 31.1 21.7 22.8
------ ------ ------ -------- ------ --------
Income before extraordinary item $ 14.0 $ 8.2 $ 10.4 $ 47.6 $ 28.3 $ 35.0
====== ====== ====== ======== ====== ========
ADDITIONAL INFORMATION
Depreciation $ 8.0 $ 4.1 $ 6.0 $ 30.6 $ 14.5 $ 21.6
Amortization $ 2.7 $ 1.4 $ 1.6 $ 9.0 $ 4.5 $ 4.8
EBITDA $ 45.9 $ 26.6 $ 31.6 $ 155.4 $ 94.1 $ 112.2
EARNINGS PER SHARE INFORMATION <F3>
Weighted average shares - basic 47.1 36.0 41.0 46.1 35.8 40.6
Earnings per basic share before
extraordinary item $ 0.30 $ 0.23 $ 0.25 $ 1.03 $ 0.79 $ 0.86
Weighted average shares - diluted 56.6 41.4 46.4 56.2 38.2 43.0
Earnings per diluted share before
extraordinary item $ 0.27 $ 0.21 $ 0.23 $ 0.94<F4> $ 0.75 $ 0.82
<CAPTION>
CERTAIN BALANCE SHEET DATA
DECEMBER 31, 1997
DECEMBER 31, 1998 SEPTEMBER 30, 1998 RESTATED <F2>
----------------- ------------------ -----------------
<S> <C> <C> <C>
Cash $ 2.5 $ 0.0 $ 8.1
Long term debt, excluding current portion <F5> 584.9 522.6 330.4
Stockholders' equity 300.8 300.5 171.8
<FN>
<F1> 1998 results are before the effect of restructuring and other
unusual charges recorded in the fourth quarter, as more fully
explained on pages three and four.
<F2> Restatement of previously reported financial statements to
retroactively reflect the May 30,1998 mergers of the
Commercial Printing Group accounted for as poolings of
interests.
<F3> Weighted average shares reflect the 1998 2:1 stock split and the
1997 3:2 stock split.
<F4> First quarter 1998 reported earnings were restated for the
mergers of the Commercial Printing Group. Excluding
this restatement, earnings before restructuring and other
unusual charges for 1998 are $0.96 per diluted share.
<F5> Includes capital lease obligations.
</TABLE>
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<TABLE>
MAIL-WELL, INC.
SEGMENT INFORMATION
THREE MONTHS AND YEAR ENDED DECEMBER 31, 1998
(MILLIONS, EXCEPT PER SHARE AMOUNTS)
<CAPTION>
THREE MONTHS ENDED DECEMBER 31, YEAR ENDED DECEMBER 31,
------------------------------------ -------------------------------------------
1997 1997
1998 --------------------------- 1998 -----------------------------
SEGMENT INFORMATION <F1> AS REPORTED RESTATED <F2> <F1> AS REPORTED RESTATED <F2>
------ ----------- ------------- -------- ----------- -------------
<S> <C> <C> <C> <C> <C> <C>
Net sales
U.S. Envelope $180.4 $164.7 $164.7 $ 683.8 $594.3 $ 594.3
Canadian Envelope 29.3 29.3 29.3 112.1 115.3 115.3
High Impact Color Printing 94.8 50.6 50.6 320.5 188.0 188.0
Commercial Printing 71.5 0.0 43.8 202.3 0.0 165.9
Documents Printing 31.7 0.0 2.8 113.6 0.0 10.4
Label Printing 24.1 0.0 0.0 72.4 0.0 0.0
------ ------ ------ -------- ------ --------
Total net sales $431.8 $244.6 $291.2 $1,504.7 $897.6 $1,073.9
====== ====== ====== ======== ====== ========
Operating income
U.S. Envelope $ 19.2 $ 17.2 $ 17.2 $ 67.2 $ 62.3 $ 62.3
Canadian Envelope 6.9 7.0 7.0 21.0 19.9 19.9
High Impact Color Printing 4.4 2.6 2.6 17.8 10.1 10.1
Commercial Printing 6.7 0.0 2.7 16.8 0.0 10.1
Documents Printing 2.6 0.0 0.2 8.9 0.0 0.6
Label Printing 0.7 0.0 0.0 4.3 0.0 0.0
------ ------ ------ -------- ------ --------
Total from operating segments 40.5 26.8 29.7 136.0 92.3 103.0
Corporate and other 5.3 5.7 5.7 16.9 17.2 17.2
Merger expenses 0.0 0.0 0.0 3.3 0.0 0.0
------ ------ ------ -------- ------ --------
Total operating income $ 35.2 $ 21.1 $ 24.0 $ 115.8 $ 75.1 $ 85.8
====== ====== ====== ======== ====== ========
<FN>
<FN> 1998 results are before the effect of restructuring and other
unusual charges recorded in the fourth quarter,
as more fully explained on pages three and four.
<F2> Restatement of previously reported financial statements to
retroactively reflect the May 30,1998 mergers of the
Commercial Printing Group accounted for as poolings of
interests.
</TABLE>
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<TABLE>
MAIL-WELL, INC.
RECONCILIATION OF EARNINGS BEFORE UNUSUAL ITEMS WITH REPORTED RESULTS
THREE MONTHS ENDED DECEMBER 31, 1998
(MILLIONS, EXCEPT PER SHARE AMOUNTS)
<CAPTION>
1998 1997
--------------------------------------------------------------------------------------- -----------------
UNUSUAL ITEMS
OPERATIONS ----------------------------------------------------------- OPERATIONS
CONDENSED INCOME BEFORE RESTRUCTURING ESOP EXTINGUISH- ANTIDILUTIVE AFTER AS
STATEMENT UNUSUAL ITEMS COSTS<F1> TERMINATION MENT OF DEBT EFFECT<F2> TOTAL UNUSUAL ITEMS REPORTED RESTATED
------------- ----------------------------------------------------------- ------------- -----------------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
Net sales $431.8 $0.0 $0.0 $0.0 $0.0 $0.0 $431.8 $244.6 $291.2
Gross profit 94.2 0.0 94.2 55.6 66.3
Selling, administrative
and other 59.0 0.0 59.0 34.5 42.3
Unusual items 0.0 16.7 12.2 28.9 28.9 0.0 0.0
------------- ----------------------------------------------------------- ------------- -----------------
Operating income 35.2 (16.7) (12.2) 0.0 0.0 (28.9) 6.3 21.1 24.0
Interest and other expense 12.1 0.0 12.1 6.1 6.4
------------- ----------------------------------------------------------- ------------- -----------------
Income (loss) before income
taxes and extraordinary
item 23.1 (16.7) (12.2) 0.0 0.0 (28.9) (5.8) 15.0 17.6
Income taxes 9.1 (6.4) (0.7) (7.1) 2.0 6.8 7.2
------------- ----------------------------------------------------------- ------------- -----------------
Income (loss) before
extraordinary item 14.0 (10.3) (11.5) 0.0 0.0 (21.8) (7.8) 8.2 10.4
Extraordinary item,
net of tax benefit 0.0 4.1 4.1 4.1 6.1 6.1
------------- ----------------------------------------------------------- ------------- -----------------
Net income (loss) $14.0 ($10.3) ($11.5) ($4.1) $0.0 ($25.9) ($11.9) $2.1 $4.3
============= =========================================================== ============= =================
MEMO
Interest on convertible
notes, net of tax $1.3 ($1.3) ($1.3) $0.0 $0.4 $0.4
EARNINGS PER SHARE
INFORMATION
Weighted average shares
- basic 47.1 1.4 1.4 48.5 36.0 41.0
Earnings per basic share
before extraordinary item $0.30 ($0.46) ($0.16) $0.23 $0.25
Earnings per basic share $0.30 ($0.55) ($0.25) $0.06 $0.10
Weighted average shares
- diluted 56.6 1.4 (9.5) (8.1) 48.5 41.4 46.4
Earnings per diluted share
before extraordinary item $0.27 ($0.43) ($0.16) $0.21 $0.23
Earnings per diluted share $0.27 ($0.52) ($0.25) $0.06 $0.10
<FN>
<F1> Includes $0.8 million of period costs associated with the
regionalization of the U.S. Envelope business which were not allowed
under generally accepted accounting principles to be included
in the previously announced restructuring reserve.
<F2> Under generally accepted accounting principles, the adjustments for
the convertible subordinated notes and outstanding stock options
normally made in computing fully diluted earnings per share are excluded
from the calculation when the effect of including them is to reduce the
loss per fully diluted share or increase the earnings per fully diluted
share.
</TABLE>
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<TABLE>
MAIL-WELL, INC.
RECONCILIATION OF EARNINGS BEFORE UNUSUAL ITEMS WITH REPORTED RESULTS
YEAR ENDED DECEMBER 31, 1998
(MILLIONS, EXCEPT PER SHARE AMOUNTS)
<CAPTION>
1998 1997
--------------------------------------------------------------------------------------- -----------------
UNUSUAL ITEMS
OPERATIONS ----------------------------------------------------------- OPERATIONS
CONDENSED INCOME BEFORE RESTRUCTURING ESOP EXTINGUISH- ANTIDILUTIVE AFTER AS
STATEMENT UNUSUAL ITEMS COSTS<F1> TERMINATION MENT OF DEBT EFFECT<F2> TOTAL UNUSUAL ITEMS REPORTED RESTATED
------------- ----------------------------------------------------------- ------------- -----------------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
Net sales $1,504.7 $0.0 $0.0 $0.0 $0.0 $0.0 $1,504.7 $897.6 $1,073.9
Gross profit 319.3 0.0 319.3 199.0 239.7
Selling, administrative
and other 200.2 0.0 200.2 123.9 153.9
Merger expenses 3.3 0.0 3.3 0.0 0.0
Unusual items 0.0 16.7 12.2 28.9 28.9 0.0 0.0
------------- ----------------------------------------------------------- ------------- -----------------
Operating income 115.8 (16.7) (12.2) 0.0 0.0 (28.9) 86.9 75.1 85.8
Interest and other expense 37.1 0.0 37.1 25.1 28.0
------------- ----------------------------------------------------------- ------------- -----------------
Income before income taxes
and extraordinary item 78.7 (16.7) (12.2) 0.0 0.0 (28.9) 49.8 50.0 57.8
Income taxes 31.1 (6.4) (0.7) (7.1) 24.0 21.7 22.8
------------- ----------------------------------------------------------- ------------- -----------------
Income before extraordinary
item 47.6 (10.3) (11.5) 0.0 0.0 (21.8) 25.8 28.3 35.0
Extraordinary item, net
of tax benefit 0.0 4.1 4.1 4.1 6.1 6.1
------------- ----------------------------------------------------------- ------------- -----------------
Net income $47.6 ($10.3) ($11.5) ($4.1) $0.0 ($25.9) $21.7 $22.2 $28.9
============= =========================================================== ============= =================
MEMO
Interest on convertible
notes, net of tax $5.3 ($5.3) ($5.3) $0.0 $0.4 $0.4
EARNINGS PER SHARE
INFORMATION
Weighted average shares
- basic 46.1 0.4 0.4 46.5 35.8 40.6
Earnings per basic share
before extraordinary item $1.03 ($0.48) $0.55 $0.79 $0.86
Earnings per basic share $1.03 ($0.56) $0.47 $0.62 $0.71
Weighted average shares
- diluted 56.2 0.4 (8.0) (7.6) 48.6 38.2 43.0
Earnings per diluted share
before extraordinary item $0.94 ($0.41) $0.53 $0.75 $0.82
Earnings per diluted shar $0.94 ($0.49) $0.45 $0.59 $0.68
<FN>
<F1> Includes $0.8 million of period costs associated with the
regionalization of the U.S. Envelope business which were not allowed
under generally accepted accounting principles to be included
in the previously announced restructuring reserve.
<F2> Under generally accepted accounting principles, the adjustments for
the convertible subordinated notes and outstanding stock options
normally made in computing fully diluted earnings per share are excluded
from the calculation when the effect of including them is to reduce the
loss per fully diluted share or increase the earnings per fully diluted
share.
</TABLE>
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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.
---------------
(Registrant)
By: /s/Michael A. Zawalski
--------------------------
Michael A. Zawalski
Sr. Vice President and CFO
Date: January 28, 1999
