UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
F O R M 10-Q
(X) Quarterly Report Pursuant to Section 13 or 15(d) of The Securities
Exchange Act of 1934
For the Quarterly Period Ended September 30, 1997
( ) 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 1-13662
BOISE CASCADE OFFICE PRODUCTS CORPORATION
State of Incorporation IRS Employer Identification No.
Delaware 82-0477390
800 West Bryn Mawr Avenue
Itasca, Illinois 60143
(630) 773 - 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.
Shares Outstanding
Class as of October 31, 1997
Common Stock, $.01 par value 65,586,125
PART I - FINANCIAL INFORMATION
Item 1. Financial Statements
BOISE CASCADE OFFICE PRODUCTS CORPORATION AND SUBSIDIARIES
STATEMENTS OF INCOME
(expressed in thousands, except share information)
(unaudited)
Three Months Ended September 30
1997 1996
Net sales $ 679,877 $506,694
Cost of sales, including purchases
from Boise Cascade Corporation
of $57,231 and $49,285 509,557 379,193
__________ __________
Gross profit 170,320 127,501
__________ __________
Selling and warehouse operating
expense 127,373 94,515
Corporate general and administrative
expense, including amounts paid to
Boise Cascade Corporation of $653
and $564 11,307 9,097
Goodwill amortization 3,159 1,757
__________ __________
141,839 105,369
__________ __________
Income from operations 28,481 22,132
__________ __________
Interest expense 6,749 2,126
Other income (expense), net 257 (142)
__________ __________
Income before income taxes 21,989 19,864
Income tax expense 9,457 8,144
__________ __________
Net income $ 12,532 $ 11,720
Average shares outstanding 63,086,894 62,449,765
Earnings per share $ .20 $ .19
The accompanying notes are an integral part of these Financial Statements.
BOISE CASCADE OFFICE PRODUCTS CORPORATION AND SUBSIDIARIES
STATEMENTS OF INCOME
(expressed in thousands, except share information)
(unaudited)
Nine Months Ended September 30
1997 1996
Net sales $ 1,878,218 $1,428,884
Cost of sales, including purchases
from Boise Cascade Corporation
of $163,437 and $137,015 1,408,311 1,055,148
___________ ___________
Gross profit 469,907 373,736
___________ ___________
Selling and warehouse operating
expense 351,352 270,525
Corporate general and administrative
expense, including amounts paid
to Boise Cascade Corporation of
$1,947 and $1,780 29,886 23,723
Goodwill amortization 7,686 4,815
___________ ___________
388,924 299,063
___________ ___________
Income from operations 80,983 74,673
___________ ___________
Interest expense 13,895 5,290
Other income (expense), net 390 (100)
___________ ___________
Income before income taxes 67,478 69,283
Income tax expense 28,325 28,406
___________ ___________
Net income $ 39,153 $ 40,877
Average shares outstanding 62,951,608 62,372,100
Earnings per share $ .62 $ .66
The accompanying notes are an integral part of these Financial Statements.
BOISE CASCADE OFFICE PRODUCTS CORPORATION AND SUBSIDIARIES
BALANCE SHEETS
(expressed in thousands)
(unaudited)
September 30 December 31
ASSETS 1997 1996 1996
Current
Cash and short-term investments $ 12,598 $ 9,281 $ 12,762
Receivables, less allowances
of $7,055, $4,125, and $3,887 374,484 258,740 285,337
Inventories 186,571 137,537 171,748
Deferred income tax benefits 13,995 7,257 13,963
Other 24,994 16,537 15,378
___________ __________ __________
612,642 429,352 499,188
___________ __________ __________
Property
Land 27,900 13,488 13,488
Buildings and improvements 111,981 72,091 72,917
Furniture and equipment 180,154 121,556 137,137
Accumulated depreciation (129,447) (85,791) (90,980)
___________ __________ __________
190,588 121,344 132,562
___________ __________ __________
Goodwill, net of amortization
of $20,450, $10,172, and $13,138 433,497 221,266 261,706
Other assets 24,804 9,614 11,906
___________ __________ __________
Total assets $1,261,531 $ 781,576 $ 905,362
The accompanying notes are an integral part of these Financial Statements.
BOISE CASCADE OFFICE PRODUCTS CORPORATION AND SUBSIDIARIES
BALANCE SHEETS
(expressed in thousands, except share information)
(unaudited)
September 30 December 31
LIABILITIES AND SHAREHOLDERS' EQUITY 1997 1996 1996
Current
Notes payable $ 1,200 $ 37,300 $ 36,700
Current portion of long-term debt 2,997 203 180
Accounts payable
Trade and other 235,880 160,841 185,370
Boise Cascade Corporation 34,530 24,399 21,926
___________ __________ __________
270,410 185,240 207,296
___________ __________ __________
Accrued liabilities
Compensation and benefits 30,496 22,068 31,120
Income taxes payable 4,662 2,084 7,100
Taxes, other than income 15,821 8,845 8,351
Other 39,896 24,988 39,800
___________ __________ __________
90,875 57,985 86,371
___________ __________ __________
365,482 280,728 330,547
___________ __________ __________
Other
Deferred income taxes 371 1,279 4,470
Long-term debt, less current portion 366,731 95,053 140,024
Other 36,043 20,202 25,536
___________ __________ __________
403,145 116,534 170,030
___________ __________ __________
Shareholders' equity
Common stock, $.01 par value,
200,000,000 shares authorized;
65,586,125, 62,469,703, and
62,750,318 shares issued and
outstanding at each period 656 625 628
Additional paid-in capital 356,565 299,097 304,134
Retained earnings 135,683 84,592 100,023
___________ __________ __________
Total shareholders' equity 492,904 384,314 404,785
___________ __________ __________
Total liabilities and
shareholders' equity $1,261,531 $ 781,576 $ 905,362
The accompanying notes are an integral part of these Financial Statements.
BOISE CASCADE OFFICE PRODUCTS CORPORATION AND SUBSIDIARIES
STATEMENTS OF CASH FLOWS
(expressed in thousands)
(unaudited)
Nine Months Ended September 30
1997 1996
Cash provided by (used for) operations
Net income $ 39,153 $ 40,877
Items in income not using (providing) cash
Depreciation and amortization 29,291 18,861
Deferred income taxes (1,754) 1,290
Receivables (14,933) (24,585)
Inventories 9,743 3,064
Other current assets (7,614) 2,546
Accounts payable and accrued liabilities 28,675 8,821
Current and deferred income taxes (7,430) (5,199)
__________ __________
Cash provided by operations 75,131 45,675
__________ __________
Cash used for investment
Expenditures for property and equipment (44,182) (26,332)
Acquisitions (243,984) (145,068)
Other, net (20,504) (12,189)
__________ __________
Cash used for investment (308,670) (183,589)
__________ __________
Cash provided by (used for) financing
Additions to long-term debt 219,999 95,000
Notes payable (35,500) 37,300
Sale of stock 48,463 -
Other, net 413 813
__________ __________
Cash provided by financing 233,375 133,113
__________ __________
Decrease in cash and
short-term investments (164) (4,801)
Balance at beginning of the period 12,762 14,082
__________ __________
Balance at September 30 $ 12,598 $ 9,281
The accompanying notes are an integral part of these Financial Statements.
BOISE CASCADE OFFICE PRODUCTS CORPORATION AND SUBSIDIARIES
NOTES TO FINANCIAL STATEMENTS
(unaudited)
(1) ORGANIZATION AND BASIS OF PRESENTATION. Boise Cascade Office Products
Corporation (together with its subsidiaries, "the Company" or "we"),
headquartered in Itasca, Illinois, is one of the world's premier
business-to-business distributors of products for the office through its
contract stationer business, as well as through its direct marketing
channel. At September 30, 1997, Boise Cascade Corporation owned
approximately 81% of our outstanding common stock.
The quarterly financial statements of the Company and its subsidiaries
have not been audited by independent public accountants, but in the
opinion of management, all adjustments necessary to present fairly the
results for the periods have been included. Except as may be disclosed
in the notes to the Financial Statements, the adjustments made were of a
normal, recurring nature. Quarterly results are not necessarily
indicative of results that may be expected for the year. We have
prepared the statements pursuant to the rules and regulations of the
Securities and Exchange Commission. Certain information and footnote
disclosures normally included in financial statements prepared in
accordance with generally accepted accounting principles have been
condensed or omitted pursuant to such rules and regulations. These
quarterly financial statements should be read together with the
statements and the accompanying notes included in our 1996 Annual
Report.
(2) EARNINGS PER SHARE. Earnings per share of $.20 and $.19 for the three
months ended September 30, 1997 and 1996, and $.62 and $.66 for the nine
months ended September 30, 1997 and 1996, are based upon the average
number of common shares outstanding including common shares issued to
effect acquisitions made by the Company and shares issued as a result of
stock options exercised. Earnings per share is computed independently
for each period. As a result, the total of the per share results for the
first three quarters of 1997 does not equal the per share results for the
nine months ended September 30, 1997.
In February 1997, the Financial Accounting Standards Board issued
Statement of Financial Accounting Standards No. 128, Earnings Per Share,
which will be implemented in the fourth quarter of 1997. The statement
will have no significant impact on previously reported earnings per
share, which will be renamed basic earnings per share.
(3) COMMON STOCK. On September 25, 1997, we issued 2,250,000 shares of
common stock at $21.55 per share to Boise Cascade Corporation.
(4) DEBT. On June 26, 1997, we entered into a $450 million revolving credit
agreement with a group of banks that expires on June 29, 2001, and
provides for variable rates of interest based on customary indices. It
contains customary restrictive financial and other covenants, including
a negative pledge and covenants specifying a minimum fixed charge
coverage ratio and a maximum leverage ratio. This agreement replaced
our $350 million revolving credit agreement. We may, subject to the
covenants contained in the credit agreement and to market conditions,
raise additional funds through the agreement and through other external
debt or equity financings in the future.
At September 30, 1997, borrowing under the revolving credit agreement was
$360 million.
In addition to the amount outstanding under the revolving credit
agreement, we had $1.2 million of short-term notes payable at
September 30, 1997. The maximum amount of short-term notes payable
during the three and nine months ended September 30, 1997, was
$77.4 million. The average amounts of short-term notes payable during
the three and nine months ended September 30, 1997, were $42.6 million
and $39.5 million. The weighted average interest rate for these
borrowings was 5.8% for both periods.
(5) TAXES. The estimated tax provision rate for the first nine months of
1997 was 42.0%, compared with a tax provision rate of 41.0% for the same
period in the prior year. The increase is primarily due to increased
foreign income, including nondeductible goodwill, taxed at a higher
rate.
(6) ACQUISITIONS. During the first nine months of 1997 we completed seven
acquisitions, and during the first nine months of 1996 we completed nine
acquisitions, all of which were accounted for under the purchase method
of accounting. Accordingly, the purchase prices were allocated to the
assets acquired and liabilities assumed based upon their estimated fair
values. The initial purchase price allocations may be adjusted within
one year of the date of purchase for changes in estimates of the fair
values of assets and liabilities. Such adjustments are not expected to
be significant to results of operations or the financial position of the
Company. The excess of the purchase price over the estimated fair value
of the net assets acquired was recorded as goodwill and is being
amortized over 40 years. The results of operations of the acquired
businesses are included in our operations subsequent to the dates of
acquisition.
On January 31, 1997, we acquired the stock of the contract stationer
business of The Office Stop, based in Butte, Montana. On February 28,
1997, we acquired the assets of the contract stationer business of
Florida Ribbon and Carbon, based in Jacksonville, Florida. On April 17,
1997, we acquired the assets of the contract stationer business of
Winterbulk Business Supplies, Ltd., based in Bolton, England. On
April 30, 1997, we acquired the assets of the computer consumables
business of TDI, based in Raleigh-Durham, North Carolina. On May 30,
1997, we acquired the assets of the computer consumables business of
Carlyle Computer Products Ltd., based in Winnipeg, Manitoba, Canada. On
May 31, 1997, we acquired the assets of the promotional products
business of OstermanAPI, Inc., based in Maumee, Ohio. In conjunction
with the acquisition of Osterman, we formed a majority-owned subsidiary,
Boise Marketing Services, Inc. ("BMSI"), of which we own 88%. Our
previously acquired promotional products company, OWNCO, also became
part of BMSI. In January 1997, we also completed a joint venture with
Otto Versand, of which we own 50%, to direct market office products in
Europe, initially in Germany. These transactions, including the joint
venture with Otto and the formation of the majority-owned promotional
products subsidiary, were completed for cash of $99.7 million, $2.9
million of our common stock, and the recording of $14.2 million of
acquisition liabilities.
On July 7, 1997, we acquired 100% of the shares of Jean-Paul Guisset
S.A. ("JPG"), a French corporation. JPG is a direct marketer of office
products in France. The negotiated purchase price was FF850.0 million
(US$144.0 million) plus a price supplement payable in the year 2000, if
certain earnings and sales growth targets are reached. No liability has
been recorded for the price supplement as the amount of payment, if any,
is not assured beyond a reasonable doubt. Approximately FF128.5 million
(US$20.5 million) was repatriated to the Company from JPG during the
third quarter of 1997. In addition to the cash paid, we recorded
$5.8 million of acquisition liabilities and assumed $10.1 million
of long-term debt. The acquisition was funded by cash flow from
operations and borrowings under our revolving credit agreement.
On February 5, 1996, we completed the acquisition of 100% of the shares
of Grand & Toy Limited ("Grand & Toy") from Cara Operations Limited
(Toronto). On January 31, February 9, March 29, April 26, May 31,
July 1, and July 31, 1996, we acquired businesses in New Mexico, Maine,
Vermont, Wisconsin, Washington, Michigan, Australia, and Oklahoma City
for cash of $145.1 million, $1.7 million of our common stock, and the
recording of $20.6 million of acquisition liabilities.
Unaudited pro forma results of operations reflecting the acquisitions
would have been as follows. If the 1997 acquisitions had occurred
January 1, 1997, sales for the first nine months of 1997 would have
increased to $2.0 billion, net income would have decreased to $38.3
million, and earnings per share would have decreased to $.61. If the
1997 and 1996 acquisitions had occurred January 1, 1996, sales for the
first nine months of 1996 would have increased to $1.7 billion, net
income would have decreased to $40.2 million, and earnings per share
would have decreased to $.65. This unaudited pro forma financial
information does not necessarily represent the actual results of
operations that would have occurred if the acquisitions had taken
place on the dates assumed.
Item 2. Management's Discussion and Analysis of Financial
Condition and Results of Operations
Three Months Ended September 30, 1997, Compared with Three Months Ended
September 30, 1996
Results of Operations
Net sales in the third quarter of 1997 increased 34% to $679.9
million, compared with $506.7 million in the third quarter of
1996. The growth in sales resulted primarily from acquisitions,
new account development, and product line extensions. Third
quarter 1997 sales growth was constrained due to the United
Parcel Service ("UPS") strike, particularly in our domestic
direct marketing channel. Same-location sales increased 15% in
the third quarter of 1997, compared with sales in the third
quarter of 1996. Excluding our domestic direct marketing channel
and holding paper prices constant, our same-location sales growth
would have been 20%.
Cost of sales, which includes the cost of merchandise sold and
delivery and occupancy costs, increased to $509.6 million in the
third quarter of 1997, which was 74.9% of net sales. This
compares with $379.2 million reported in the same period of the
prior year, which represented 74.8% of net sales. Gross profit
as a percentage of net sales was 25.1% and 25.2% for the third
quarters of 1997 and 1996. The decrease in the third quarter of
1997 was primarily because of competitive pressures on gross
profit.
Operating expense was 20.9% of net sales in the third quarter of
1997, compared with 20.8% in the third quarter of 1996. Within
the operating expense category, selling and warehouse operating
expense was 18.7% of net sales in the third quarters of 1997 and
1996. Corporate general and administrative expense was 1.7% of
net sales in the third quarter of 1997, compared with 1.8% in
1996. Goodwill amortization increased to $3.2 million in the
third quarter of 1997, compared with $1.8 million in the third
quarter of 1996. The increase in goodwill amortization was the
result of recording goodwill arising from our acquisitions.
Income from operations in the third quarter of 1997 increased to
$28.5 million, or 4.2% of net sales, compared to our third
quarter 1996 operating income of $22.1 million, or 4.4% of net
sales.
Interest expense was $6.7 million in the third quarter of 1997,
compared with $2.1 million in the third quarter of 1996. The
increase in interest expense resulted from debt incurred in
conjunction with our acquisition and capital spending programs.
Net income in the third quarter of 1997 increased to $12.5
million, or 1.8% of net sales, compared with $11.7 million, or
2.3% of net sales in the same period of the prior year.
Nine Months Ended September 30, 1997, Compared with Nine Months
Ended September 30, 1996
Net sales for the nine months ended September 30, 1997, increased
31% to $1.9 billion, compared with $1.4 billion a year ago. Same-
location sales increased 14% year to year. Holding paper prices
constant, same-location sales grew 19%.
Cost of sales, which includes the cost of merchandise sold and
delivery and occupancy costs, increased to $1.4 billion for the
nine months ended September 30, 1997, which was 75.0% of net
sales. This compares with $1.1 billion reported in the same
period of the prior year, which represented 73.8% of net sales.
Gross profit as a percentage of net sales was 25.0% and 26.2% for
the first nine months of 1997 and 1996. Sales growth in
technology-related products and competitive pressures on gross
profits contributed to the lower gross profit level in the first
nine months of 1997.
Operating expense was 20.7% of net sales for the first nine
months of 1997, compared with 20.9% in the same period of the
prior year. This decrease resulted, in part, from our changing
sales mix described above and expense leveraging as, for example,
our central procurement and integrated distribution programs ramp
up. Within the operating expense category, selling and warehouse
operating expense was 18.7% of net sales for the first nine
months of 1997, compared with 18.9% in 1996. Corporate general
and administrative expense was 1.6% of net sales for the first
nine months of 1997 compared with 1.7% in 1996. Goodwill
amortization increased to $7.7 million for the first nine months
of 1997, compared with $4.8 million in 1996. The increase in
goodwill amortization was the result of recording goodwill
arising from our acquisitions.
Income from operations for the first nine months of 1997 was
$81.0 million, or 4.3% of net sales, compared to 1996 operating
income of $74.7 million, or 5.2% of net sales.
Interest expense was $13.9 million for the first nine months of
1997, compared with $5.3 million in 1996. The increase in
interest expense resulted from debt incurred in conjunction with
our acquisition and capital spending programs.
Net income for the first nine months of 1997 decreased to $39.2
million, or 2.1% of net sales, compared with $40.9 million, or
2.9% of net sales, in the same period of the prior year.
Liquidity and Capital Resources
Our principal requirements for cash have been to make
acquisitions, fund working capital needs, upgrade and expand our
facilities at existing locations, and open new distribution
centers. The execution of our strategy for growth, including
acquisitions and the relocation of several existing distribution
centers into new and larger facilities, is expected to require
capital outlays over the next several years.
To finance our capital requirements, we expect to rely upon funds
from a combination of sources. In addition to cash flow from
operations, we have a $450 million revolving credit agreement
that expires in 2001 and provides for variable rates of interest
based on customary indices. The credit agreement is available
for acquisitions and general corporate purposes. It contains
customary restrictive financial and other covenants, including a
negative pledge and covenants specifying a minimum fixed charge
coverage ratio and a maximum leverage ratio. At September 30,
1997, $360 million was outstanding under this agreement. We may,
subject to the covenants contained in the credit agreement and to
market conditions, raise additional funds through the agreement
and through other external debt or equity financings in the
future.
In addition to the amount outstanding under the revolving credit
agreement, we had short-term notes payable of $1.2 million at
September 30, 1997. The maximum amount of short-term notes
payable during the three and nine months ended September 30,
1997, was $77.4 million. The average amounts of short-term notes
payable during the three and nine months ended September 30,
1997, were $42.6 million and $39.5 million. The weighted average
interest rate for these borrowings was 5.8% for both periods.
In June 1996, we filed a registration statement with the
Securities and Exchange Commission for 4.4 million shares of
common stock to be offered from time to time in connection with
future acquisitions. As of September 30, 1997, 3.5 million
shares remained unissued under this registration statement.
On September 25, 1997, we issued 2.25 million shares of common
stock at $21.55 per share to Boise Cascade Corporation for total
proceeds of $48.5 million.
Net cash provided by operations in the first nine months of 1997
was $75.1 million. This was the result of $66.7 million of net
income, depreciation and amortization, and other noncash items,
and an $8.4 million decrease in working capital. Net cash used
for investment in the first nine months of 1997 was $308.7
million, which included $44.2 million of expenditures for
property and equipment, and $244.0 million for acquisitions. Net
cash provided by financing was $233.4 million for the first nine
months of 1997, resulting primarily from borrowings we made to
fund acquisitions and from proceeds received from the issuance of
our common stock.
Net cash provided by operations in the first nine months of 1996
was $45.7 million. This was primarily the result of $61.0
million of net income, depreciation and amortization, and other
noncash items, offset by a $15.4 million increase in working
capital. Net cash used for investment in the first nine months
of 1996 was $183.6 million, which included $26.3 million of
expenditures for property and equipment, and $145.1 million for
acquisitions. Net cash provided by financing was $133.1 million
for the first nine months of 1996, resulting primarily from
borrowings we made to fund acquisitions.
The majority of our 1997 and 1996 acquisitions have been
completed for cash, resulting in higher outstanding balances
under our credit agreement and short-term borrowing capacity.
The increase in borrowings has caused interest expense to
increase for the first nine months of 1997 compared to the same
period of 1996.
Effects of Fluctuations in Foreign Currency Exchange Rates
Our operations in Australia, Canada, France, Germany, and the
United Kingdom are denominated in currencies other than U.S.
dollars. Each of our operations conducts substantially all of
its business in its local currency with minimal cross-border
product movement. As a result, these operations are not subject
to material operational risks associated with fluctuations in
exchange rates. Furthermore, our results of operations were not
materially impacted by the translation of our other operations'
currencies into U.S. dollars. Because we intend to expand the
size and scope of our international operations, this exposure to
fluctuations in exchange rates may increase. Accordingly, no
assurance can be given that our future results of operations will
not be adversely affected by fluctuations in foreign currency
exchange rates. Although we currently are not engaged in any
foreign currency hedging activities, we may consider doing so in
the future. Such future hedges would be intended to minimize the
effects of foreign exchange rate fluctuations on our investment
and would not be done for speculative purposes.
New Accounting Standard
In February 1997, the Financial Accounting Standards Board issued
Statement of Financial Accounting Standards No. 128, Earnings Per
Share, which will be implemented in the fourth quarter of 1997.
The statement will have no significant impact on previously
reported earnings per share, which will be renamed basic earnings
per share.
Year 2000 Computer Issue
Many computer systems in use today were designed and developed
using two digits, rather than four, to specify the year. As a
result, such systems will recognize the year 2000 as "00". This
could cause many computer applications to fail completely or to
create erroneous results unless corrective measures are taken.
We utilize software and related computer technologies that will
be affected by this issue. We are currently implementing, or
have plans to implement, several computer system replacements or
upgrades before the year 2000. These new computer systems will
be year 2000 compliant. We are reviewing what actions will be
necessary to make our remaining computer systems year 2000
compliant. The expense associated with these actions has not
been determined, but is not expected to be material to the
Company.
Business Outlook
We expect our cross-selling efforts in furniture, computer-
related consumables, promotional products, and office papers to
result in additional sales to our existing customers. We also
expect to grow sales by developing business with new customers.
The pace of our revenue growth will partially depend on the
success of these initiatives. It will also depend, in part, on
our plans to make further acquisitions in the U.S. and
internationally. Our level of future acquisition activity will
reflect the extent of economically acceptable opportunities
available to us.
Our gross margins and operating expense ratios vary among our
product categories, distribution channels, and geographic
locations. As a result, we expect fluctuations in these ratios
as our sales mix evolves over time.
Office papers and converted paper products represent a
significant portion of our sales. Reductions in the cost and
selling price of paper, compared to the same quarter last year,
impacted our sales growth, gross margins, and operating expense
leverage in the current quarter. It is unclear to what extent or
when prices might significantly rise or fall and what favorable
or adverse impact those changes might have on our future
financial results.
Risk Factors Associated With Forward Looking Statements
The Management's Discussion and Analysis of Financial Condition
and Results of Operations includes "forward looking statements"
which involve uncertainties and risks. There can be no assurance
that actual results will not differ from the Company's
expectations. Factors which could cause materially different
results include, among others, continued same-location sales
growth; the timing and amount of paper price recovery; the
changing mix of products sold to our customers; the pace and
success of our acquisition program; the success of cost structure
improvements; the success of new product line introductions; the
uncertainties of expansion into international markets, including
currency exchange rates, legal and regulatory requirements, and
other factors; and competitive and general economic conditions.
PART II - OTHER INFORMATION
Item 1. Legal Proceedings
The Company is not currently involved in any legal or
administrative proceedings that it believes could have, either
individually or in the aggregate, a material adverse effect on
its business or financial condition.
Item 2. Changes in Securities
Not applicable.
Item 3. Defaults Upon Senior Securities
Not applicable.
Item 4. Submission of Matters to a Vote of Security Holders
Not applicable.
Item 5. Other Information
Not applicable.
Item 6. Exhibits and Reports on Form 8-K
(a) Exhibits.
Required exhibits are listed in the Index to Exhibits and are
incorporated by reference.
(b) Reports on Form 8-K
On July 17, 1997, we filed a Form 8-K with the Securities and
Exchange Commission to report our acquisition of Jean-Paul
Guisset S.A. ("JPG"), a direct marketer of office products
in France.
On September 26, 1997, we filed a Form 8-K with the Securities and
Exchange Commission to report our issuance of 2,250,000 shares of
common stock at $21.55 per share to Boise Cascade Corporation.
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 thereunto duly authorized.
BOISE CASCADE
OFFICE PRODUCTS CORPORATION
As Duly Authorized Officer and
Chief Accounting Officer: /s/Darrell R. Elfeldt
Darrell R. Elfeldt
Vice President and Controller
Date: November 12, 1997
BOISE CASCADE OFFICE PRODUCTS CORPORATION
INDEX TO EXHIBITS
Filed With the Quarterly Report on Form 10-Q
for the Quarter Ended September 30, 1997
Number Description Page
11 Computation of Per Share Earnings
27 Financial Data Schedule
EXHIBIT 11
BOISE CASCADE OFFICE PRODUCTS CORPORATION
COMPUTATION OF PER SHARE EARNINGS
(in thousands, except share information)
For the Three Months For the Nine Months
Ended September 30 Ended September 30
1997 1996 1997 1996
EARNINGS PER SHARE
Shares of Common Stock:
Weighted average
shares outstanding 63,086,894 62,449,765 62,951,608 62,372,100
Net income $ 12,532 $ 11,720 $ 39,153 $ 40,877
Earnings per share $ .20 $ .19 $ .62 $ .66
FULLY DILUTED EARNINGS PER SHARE
Shares of Common Stock:
Weighted average
shares outstanding 63,086,894 62,449,765 62,951,608 62,372,100
Dilutive effect
of options 137,830 185,987 135,759 272,379
Dilutive effect of
contingent shares 430,207 465,303 447,267 484,031
__________ __________ __________ __________
Fully Diluted Weighted Average
Shares Outstanding 63,654,931 63,101,055 63,534,634 63,128,510
Net income $ 12,532 $ 11,720 $ 39,153 $ 40,877
Fully diluted earnings
per share (1) $ .20 $ .19 $ .62 $ .65
(1) Fully diluted earnings per share for the periods presented are not
disclosed in the financial statements because the amounts are not
considered dilutive under the provisions of Accounting Principles
Board Opinion No. 15, "Earnings Per Share."
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
The data schedule contains summary financial information extracted from
Boise Cascade Office Products Corporation's Balance Sheet at September 30,
1997, and from its Statement of Income for the nine months ended
September 30, 1997. The information presented is qualified in its entirety
by reference to such financial statements.
</LEGEND>
<MULTIPLIER> 1,000
<S> <C>
<PERIOD-TYPE> 9-MOS
<FISCAL-YEAR-END> DEC-31-1997
<PERIOD-END> SEP-30-1997
<CASH> 12,598
<SECURITIES> 0
<RECEIVABLES> 381,539
<ALLOWANCES> 7,055
<INVENTORY> 186,571
<CURRENT-ASSETS> 612,642
<PP&E> 320,035
<DEPRECIATION> 129,447
<TOTAL-ASSETS> 1,261,531
<CURRENT-LIABILITIES> 365,482
<BONDS> 366,731
0
0
<COMMON> 656
<OTHER-SE> 492,248
<TOTAL-LIABILITY-AND-EQUITY> 1,261,531
<SALES> 1,878,218
<TOTAL-REVENUES> 1,878,218
<CGS> 1,408,311
<TOTAL-COSTS> 1,408,311
<OTHER-EXPENSES> 388,924
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 13,895
<INCOME-PRETAX> 67,478
<INCOME-TAX> 28,325
<INCOME-CONTINUING> 39,153
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 39,153
<EPS-PRIMARY> 0.62
<EPS-DILUTED> 0
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