<PAGE>
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-Q
[X] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15 (D)
OF THE SECURITIES EXCHANGE ACT OF 1934
FOR THE QUARTERLY PERIOD ENDED DECEMBER 29, 1996
OR
[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(D)
OF THE SECURITIES EXCHANGE ACT OF 1934
Commission File Number 0-26178
BWAY CORPORATION
(EXACT NAME OF REGISTRANT AS SPECIFIED IN ITS CHARTER)
DELAWARE 36-3624491
(STATE OR OTHER JURISDICTION (I.R.S. EMPLOYER
OF INCORPORATION OR ORGANIZATION) IDENTIFICATION NO.)
8607 Roberts Drive, Suite 250
Atlanta, Georgia 30350
(ADDRESS OF PRINCIPAL EXECUTIVE OFFICES)
(ZIP CODE)
(770) 587-0888
(REGISTRANT'S TELEPHONE NUMBER, INCLUDING AREA CODE)
__________________
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
----- -----
There were 6,555,115 shares of Common Stock ($.01 par value) outstanding as of
February 3, 1997.
<PAGE>
BWAY CORPORATION
QUARTERLY REPORT ON FORM 10-Q
FOR THE QUARTER ENDED
DECEMBER 29, 1996
INDEX
<TABLE>
<CAPTION>
PAGE NUMBER
<C> <S> <C>
PART I. FINANCIAL INFORMATION
Item 1. Financial Statements
Consolidated Balance Sheets at December 29, 1996
and September 29, 1996 (Unaudited) 3
Consolidated Statements of Income for the three month
periods ended December 29, 1996 and
December 31, 1995 (Unaudited) 4
Consolidated Statements of Cash Flows for the three
month periods ended December 29, 1996 and December
31, 1995 (Unaudited) 5
Notes to Consolidated Financial Statements (Unaudited) 6-9
Item 2. Management's Discussion and Analysis of Financial Condition
and Results of Operations 10-11
PART II. OTHER INFORMATION
Item 1. Legal Proceedings 12
Item 2. Changes in Securities 12
Item 3. Defaults upon Senior Securities 12
Item 4. Submission of Matters to a Vote of Security Holders 12
Item 5. Other Information 12
Item 6. Exhibits and Reports on Form 8-K 12
</TABLE>
2
<PAGE>
PART I. FINANCIAL INFORMATION
ITEM 1. FINANCIAL STATEMENTS
BWAY CORPORATION
AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS (UNAUDITED)
(IN THOUSANDS, EXCEPT SHARE AND PER SHARE DATA)
<TABLE>
<CAPTION>
- -------------------------------------------------------------------------------
DECEMBER 29, SEPTEMBER 29,
ASSETS 1996 1996
<S> <C> <C>
CURRENT ASSETS:
Cash and cash equivalents $ 864 $ 1,852
Accounts receivable, net of allowance of
$535 at December 29, 1996 and $390
at September 29, 1996 41,023 39,011
Inventories 48,087 37,044
Other current assets 3,289 1,293
Deferred tax asset 2,405 2,405
-------- --------
Total Current Assets 95,668 81,605
-------- --------
PROPERTY, PLANT AND EQUIPMENT - Net 112,040 94,800
-------- --------
OTHER ASSETS:
Intangible assets, net 77,114 64,807
Deferred financing costs, net 1,267 1,336
Other assets 2,165 2,585
-------- --------
Total Other Assets 80,546 68,728
-------- --------
$288,254 $245,133
======== ========
LIABILITIES AND STOCKHOLDERS' EQUITY
CURRENT LIABILITIES:
Accounts payable $ 33,167 $ 36,206
Accrued salaries & wages 4,986 4,252
Accrued income taxes 1,686 759
Other current liabilities 17,107 17,963
Current maturities of long-term debt 144 145
-------- --------
Total Current Liabilities 57,090 59,325
-------- --------
LONG TERM DEBT 139,013 95,053
LONG TERM LIABILITIES:
Deferred income taxes 14,135 14,135
Other long-term liabilities 3,969 3,991
-------- --------
18,104 18,126
-------- --------
COMMITMENTS AND CONTINGENCIES
STOCKHOLDERS' EQUITY:
Common stock, $.01 par value; authorized
24,000,000 shares, issued 6,564,546
(December 29, 1996 and September 29, 1996) 66 66
Additional paid-in capital 37,612 37,612
Retained earnings 36,987 35,569
-------- --------
74,665 73,247
Less treasury stock, at cost, 32,791
(December 29, 1996 and September 29, 1996) (618) (618)
-------- --------
Total Stockholders' Equity 74,047 72,629
-------- --------
$288,254 $245,133
======== ========
</TABLE>
See notes to consolidated financial statements
3
<PAGE>
BWAY CORPORATION
AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF INCOME (UNAUDITED)
(IN THOUSANDS, EXCEPT PER SHARE DATA)
<TABLE>
<CAPTION>
- -------------------------------------------------------------------------------
THREE MONTHS ENDED
--------------------------
December 29, December 31,
1996 1995
<S> <C> <C>
NET SALES $91,166 $58,154
COSTS, EXPENSES AND OTHER:
Cost of products sold (excluding
depreciation and amortization) 77,590 48,623
Depreciation and amortization 3,452 1,684
Selling and administrative expense 5,472 3,307
Interest expense, net 2,049 847
Other, net 199 (48)
------- -------
Total costs, expenses and other 88,762 54,413
INCOME BEFORE INCOME TAXES 2,404 3,741
PROVISION FOR INCOME TAXES 986 1,522
------- -------
NET INCOME $ 1,418 $ 2,219
======= =======
EARNINGS PER COMMON SHARE $0.22 $0.35
======= =======
WEIGHTED AVERAGE COMMON SHARES OUTSTANDING 6,573 6,350
======= =======
</TABLE>
See notes to consolidated financial statements
4
<PAGE>
BWAY CORPORATION
AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS (UNAUDITED)
(IN THOUSANDS)
<TABLE>
<CAPTION>
- -------------------------------------------------------------------------------
THREE MONTHS ENDED
--------------------------
DECEMBER 29, DECEMBER 31,
1996 1995
<S> <C> <C>
OPERATING ACTIVITIES:
Net Income $ 1,418 $ 2,219
Adjustments to reconcile net income
to net cash from operating activities:
Depreciation 2,620 1,413
Amortization 897 424
Provisions for doubtful accounts 135 13
(Gain) / Loss on disposition of
property, plant and equipment 5 ---
Changes in assets and liabilities, net of
effects of business acquisitions:
Accounts receivable 3,882 3,748
Inventories (2,487) (7,529)
Other assets 931 (258)
Accounts payable (4,924) 4,237
Accrued liabilities (1,595) (153)
Income taxes, net 927 990
-------- -------
Net cash provided by operating activities 1,809 5,104
-------- -------
INVESTING ACTIVITIES:
Capital expenditures (3,590) (4,091)
Acquisitions, net of cash acquired (41,765) ---
-------- -------
Net cash used in investing activities (45,355) (4,091)
-------- -------
FINANCING ACTIVITIES:
Net borrowings under bank credit agreement 40,998 ---
Repayments on long-term debt (81) (51)
Increase in unpresented bank drafts 1,641 916
Purchases of treasury stock -- (329)
-------- -------
Net cash provided by financing activities 42,558 536
-------- -------
NET (DECREASE) INCREASE IN CASH AND CASH
EQUIVALENTS (988) 1,549
CASH AND CASH EQUIVALENTS, BEGINNING OF PERIOD 1,852 23,538
-------- -------
CASH AND CASH EQUIVALENTS, END OF PERIOD $ 864 $25,087
======== =======
SUPPLEMENTAL DISCLOSURES OF CASH FLOW INFORMATION:
Cash paid during the period for:
Interest $ 1,595 $ 14
======== =======
Income taxes $ 169 $ 831
======== =======
Details of businesses acquired were as follows:
Fair value of assets acquired $ 46,326
Liabilities assumed (1,561)
Long-term note issued (3,000)
--------
Net cash paid for acquisitions $ 41,765
========
</TABLE>
See notes to consolidated financial statements
5
<PAGE>
BWAY CORPORATION
AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)
1. GENERAL
The accompanying consolidated financial statements have been prepared by the
Company without audit. Certain information and footnote disclosures, including
significant accounting policies, normally included in financial statements
prepared in accordance with generally accepted accounting principles have been
condensed or omitted. The consolidated financial statements as of December 29,
1996 and for the three months ended December 29, 1996 and December 31, 1995
include all normal recurring adjustments necessary for a fair presentation of
the financial position and results of operations for these periods. Operating
results for the three months ended December 29, 1996 are not necessarily
indicative of the results that may be expected for the entire year. It is
suggested that these unaudited consolidated financial statements and the
accompanying notes be read in conjunction with the consolidated financial
statements and the notes thereto included in the Company's Annual Report on
Form 10-K.
The Company operates on a 52/53-week fiscal year ending on the Sunday closest to
September 30 of the applicable year. The first three quarterly fiscal periods
end on the Sunday closest to December 31, March 31 or June 30 of the applicable
quarter.
2. INVENTORIES
Inventories are carried at the lower of cost or market, with cost determined
under the last-in, first-out (LIFO) method of inventory valuation and are
summarized as follows:
<TABLE>
<CAPTION>
DECEMBER 29, SEPTEMBER 29,
1996 1996
<S> <C> <C>
Inventories at FIFO Cost:
Raw materials $13,829 $ 9,300
Work-in-process 16,710 18,601
Finished goods 17,594 9,189
------- -------
$48,133 $37,090
Reduction to LIFO valuation (46) (46)
------- -------
$48,087 $37,044
======= =======
</TABLE>
3. EARNINGS PER COMMON SHARE
Earnings per common share are based on the weighted average number of common
shares outstanding during each period presented, including vested and unvested
shares issued under the Company's previous Management Stock Purchase Plan and
the dilutive effect of the shares from the 1995 Long-Term Incentive Plan.
Weighted average shares outstanding for the first quarter of fiscal 1997 and
1996 were 6.6 million and 6.4 million, respectively.
4. STOCKHOLDERS' EQUITY
Stock Option Plan
Immediately prior to the Initial Public Offering in June 1995, the Company
adopted the Brockway Standard Holdings Corporation 1995 Long-Term Incentive Plan
and the Formula Plan for Non-Employee Directors (the "Plans") for its directors,
officers, and key employees. On August 20, 1996, the Board of Directors i)
adopted, subject to shareholders approval, the Amended and Restated 1995 Long-
Term Incentive Plan (the "Amended Incentive Plan"), which Amended Incentive Plan
increased the aggregate number of shares of common stock authorized for issuance
under the Amended Incentive Plan from 490,000 to 750,000, and ii) froze the
Formula Plan with only 30,000 of the available 100,000 shares of common stock
being granted thereunder.
6
<PAGE>
5. ACQUISITIONS
Milton Can Company
On May 28, 1996, the Company acquired all of the outstanding stock of Milton Can
Company, Inc. ("MCC"). The Company paid $13.4 million in cash, $1 million in
notes and $14.6 million in BWAY stock for 100% equity in MCC. MCC is a
manufacturer of paint, oblong and specialty cans within the general line segment
of the North American metal container industry. The Company issued a total of
810,970 shares in connection with the merger, comprised of 656,174 shares of its
treasury stock and 154,796 newly issued shares. The consideration given to
Milton's shareholders is subject to an adjustment based on the change in working
capital from December 31, 1995 through May 28, 1996. In addition, the Company
repaid MCC's approximately $12.3 million in term and revolving bank debt
concurrent with consummation of the purchase transaction.
Davies Can Company
On June 17, 1996, the Company acquired substantially all of the assets and
assumed certain of the liabilities of Davies Can Company ("Davies"), an
unincorporated division of the Van Dorn Company (a wholly-owned subsidiary of
Crown Cork & Seal Company, Inc.). Davies manufactures paint, oblong and utility
cans within the general line segment of the North American metal container
industry. The Company paid approximately $41.7 million in cash, subject to an
adjustment based on the change in working capital from December 31, 1995 through
June 17, 1996.
Ball Aerosol
On October 28, 1996, the Company acquired substantially all of the assets
related to the metal aerosol can business (the "Business") from Ball Metal Food
Container Corporation (the "Seller"), a wholly owned subsidiary of Ball
Corporation. The Business consists of a facility in Cincinnati which includes a
material center and substantially all the assets used in connection with the
marketing, distribution, selling, manufacturing, designing, and engineering of
metal aerosol cans. The purchase price for acquiring the business was $44.6
million. At closing, the Company paid Ball consideration of approximately $38.7
million which was comprised of $35.7 million in cash and $3 million in notes.
The purchase price remaining was held by the Company and paid in December 1996.
Separately, the parties entered into supply agreements whereby certain coating,
decorating, and metal processing services will be provided by the Company to the
Seller.
The purchase method of accounting was used to establish and record a new cost
basis for the assets acquired and liabilities assumed for each of the
foregoing transactions. The allocation of the purchase price and acquisition
costs to the assets acquired and liabilities assumed is preliminary at
December 29, 1996, and is subject to change pending finalization of appraisals
and other studies of fair value and finalization of management's plans which may
result in the recording of additional liabilities as part of the allocation of
purchase price. The operating results for MCC, Davies and Ball Aerosol have been
included in the Company's consolidated financial statements since the date of
acquisition. The excess purchase price over the fair market value of net
identifiable assets acquired was in aggregate approximately $55 million.
Management has committed to a plan to exit certain activities of the acquired
companies and integrate acquired assets and businesses with BWAY facilities. In
connection with recording the purchases, the Company established a
reorganization liability of approximately $2.77 million which is classified in
other current liabilities. The liability represents the direct costs expected to
be incurred which have no future economic benefit to the Company. These costs
include charges relating to the closing of manufacturing facilities and
severance costs. Finalization of the Company's integration plan may result in
further adjustments to this reserve. As of December 29, 1996, the Company had
charged approximately $1.09 million against the reorganization liability.
The following pro forma results assume the acquisitions of MCC, Davies and Ball
Aerosol occurred at the beginning of the fiscal year ended September 29, 1996
after giving effect to certain pro forma adjustments, including an adjustment to
reflect the amortization of cost in excess of the net assets acquired, increased
interest expense and the estimated related income tax effects.
7
<PAGE>
<TABLE>
<CAPTION>
THREE MONTHS THREE MONTHS
ENDED ENDED
DECEMBER 29, 1996 DECEMBER 31, 1995
(In thousands, except per share amounts)
- -------------------------------------------------------------------------------
<S> <C> <C>
Net sales $95,567 $97,324
Net income 1,348 713
Earnings per common share:
Net income $ 0.21 $ 0.11
- -------------------------------------------------------------------------------
</TABLE>
The pro forma financial information is not necessarily indicative of
the operating results that would have occurred had the acquisition been
consummated as of the acquisition date, nor is it necessarily indicative of
future operating results.
6. LONG-TERM DEBT
On June 17, 1996, the Company terminated its bank agreement and
entered into a new credit agreement with Bankers Trust Company, NationsBank,
N.A., and certain financial institutions (the "Credit Agreement"). Initial
borrowings under the Credit Agreement were used to repay all obligations
under the Company's previous revolving credit facility. Funds from the
Credit Agreement were also used to prepay the $50 million private placement of
8.35% Senior Secured Notes maturing September 1, 2001.
The Credit Agreement allows the Company and its subsidiaries to borrow up to
$175 million provided certain conditions are met. The interest rates under the
Credit Agreement are based on rate margins for either prime rate as announced
by NationsBank from time to time ("Prime") or LIBOR, at the option of the
borrower. The applicable rate margin is determined on a quarterly basis by a
review of the Company's leverage ratio. Loans under the Credit Agreement are
unsecured and can be prepaid at the option of the Company without premium or
penalty. The Credit Agreement is subject to certain restrictive covenants,
including covenants which require the Company to maintain a certain minimum
level of net worth and a maximum ratio for leverage. In addition, the Company
is restricted in its ability to pay dividends and to make other certain
restricted payments. As of December 29, 1996, the outstanding balance on the
Credit Agreement was $134.8 million. The interest rate being paid by the
Company as of December 29, 1996 was LIBOR plus 1.25%.
7. CONTINGENCIES
Environmental
The Company is subject to a broad range of federal, state and local
environmental and workplace health and safety requirements, including those
governing discharges to air and water, the handling and disposal of solid and
hazardous wastes and the remediation of contamination associated with the
releases of hazardous substances. The Company believes that it is in substantial
compliance with all material environmental, health and safety requirements.
Environmental investigations voluntarily conducted by the Company at its
Homerville, Georgia facility in 1993 and 1994 detected certain conditions of
soil and groundwater contamination, principally involving chlorinated solvents,
at the facility property. Environmental assessment work conducted by the
Company indicated that the subject contamination is the result of operations
prior to the Company's acquisition of the facility from Owens-Illinois and is,
therefore, subject to indemnification under the 1989 purchase agreement.
Pursuant to the 1989 purchase agreement, the Company and Owens-Illinois have
entered into a supplemental agreement affirming Owens-Illinois' responsibility
for this matter including establishment of procedures for the related
investigation and remediation work to be conducted by Owens-Illinois. Since
Owens-Illinois is conducting the remediation work, management has no way of
determining the actual costs related to the clean-up efforts. As a result,
Owens-Illinois is managing the remediation activities and paying for such work
directly. Preliminary consultant estimates, developed before Owens-Illinois
began conducting the remediation, indicated that the cost of clean-up could
range from $1 million to $6 million, depending on the extent of contamination.
8
<PAGE>
Certain facilities and subsidiaries of the Company were identified as
Potentially Responsible Parties ("PRP"), for disposals occurring prior to their
purchase by the Company, pursuant to the Comprehensive Environmental Response,
Compensation, and Liability Act ("CERCLA"). These matters are, subject to
certain limitations, indemnified by the sellers of the relevant facilities.
Because liability under CERCLA is retroactive, it is possible that in the
future the Company may be identified as a PRP with respect to other sites. No
natural resource damage claims have been asserted to date.
The Company is currently vacating a manufacturing facility that it leased in
Peabody, Massachusetts. The facility has been subject to an ongoing groundwater
remediation pursuant to the Massachusetts Chapter 21E program relating to
historical activities onsite. The landlord at the site has agreed to retain all
liability for the ongoing cleanup. Pursuant to the terms of the Agreement and
Plan of Merger and Reorganization by which the Company acquired MCC, the Company
is indemnified, subject to certain limitation, for any liabilities associated
with this matter.
Management does not believe that the final resolution of these matters will
have a material adverse effect on the results of operations or financial
condition of the Company, and has not accrued a liability with respect to
these matters because it believes that a loss contingency is not probable.
8. RESTRUCTURING
During the quarter ended September 29, 1996, the Company recorded a
restructuring charge comprised of a write-down of assets to be disposed
against operations of $12.9 million. Increased volume resulting from the
acquisitions provided the opportunity for the Company to consolidate certain of
its manufacturing processes to meet increased customer demand and improve
efficiencies, which will result in the disposal of surplus equipment and
currently productive manufacturing equipment for scrap values beginning in
early fiscal 1997 and ending in fiscal 1998. When fully implemented, the
rationalization is expected on an overall basis, to result in reduced overhead
expense, and enhanced operational efficiencies.
9
<PAGE>
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
RESULTS OF OPERATIONS
RESULTS OF OPERATIONS
Net sales during the first quarter of fiscal 1997 increased 56.8% to $91.2
million compared to $58.2 million in the first quarter of fiscal 1996. The
increase in sales resulted primarily from the Company's acquisitions during the
second half of fiscal 1996 and the acquisition of the aerosol can business
from Ball Metal Food Container Corporation in October 1996.
Cost of products sold increased 59.6% in the first quarter of fiscal 1997 to
$77.6 million from $48.6 million in the same period of fiscal 1996. The
increase is due primarily to the increase in net sales. Cost of products sold
as a percentage of net sales increased from 83.6% in the first quarter of
fiscal 1996 to 85.1% in the first quarter of fiscal 1997. The Company's
facilities existing prior to the acquisitions realized reductions in cost of
products sold as a percent of sales as a result of ongoing initiatives to
reduce cost and increase productivity through rationalization and capital
initiatives, and as a result of more effective steel purchasing. Gains were
more than offset by higher costs at the recently acquired facilities where the
Company has initiated an aggressive rationalization program. Although employee
termination costs in connection with plant rationalizations, administrative
workforce reductions, and other plant exit costs associated with the recent
acquisitions have been accrued for through purchase accounting adjustments, the
Company incurred in fiscal 1996, and will incur in fiscal 1997, other non-
recurring costs which, under current accounting pronouncements, will be charged
against operating income.
Depreciation and amortization expenses increased 105.0% to $3.5 million in the
quarter ended December 29, 1996 compared to $1.7 million in the quarter ended
December 31, 1995. The increase is due to increased depreciation and
amortization resulting from the acquisitions and depreciation on capital
expenditures placed in service during fiscal 1996 and the first quarter of
fiscal 1997.
Selling and administrative costs for the first quarter of fiscal 1997 increased
65.5% to $5.5 million from $3.3 million in the first quarter of fiscal 1996. The
increase is due primarily to the recent acquisitions and corporate
infrastructure supporting acquisitions and continued growth plans. Selling and
administrative cost as a percent of net sales increased to 6.0% from 5.7%.
Interest expense increased $0.8 million to $2.0 million in the first quarter of
fiscal 1997 compared to $1.2 million in the same period of fiscal 1996. This
increase is primarily attributable to the increase in the outstanding loan
balance used to finance the acquisitions of the past nine months. Net interest
expense reported in the first quarter of fiscal 1996 was further offset by $0.4
million of interest income from cash on hand.
Net income for the first quarter of fiscal 1997 decreased $0.8 million to $1.4
million from $2.2 million in the first quarter of fiscal 1996. This decrease is
attributable to the rationalization and integration of the acquired businesses
which increased cost of products sold as a percentage of net sales, interest
expense and depreciation and amortization expense.
Earnings per share were $0.22 per share for the first quarter of fiscal 1997
compared to $0.35 per share for the same period of 1996. The weighted average
shares outstanding were 6.6 million and 6.4 million for the respective
quarters.
During the fourth quarter of fiscal 1996, management announced plans to close
six facilities and open one new plant for strategic expansion of the Company's
business. As part of this rationalization strategy, the acquired Covington,
Georgia plant was closed during the fourth quarter of fiscal 1996, the acquired
Peabody, Massachusetts plant and the Memphis, Tennessee plant were closed during
the first quarter of fiscal 1997. The majority of the equipment and business has
been assigned to other Company locations. The Company also opened the new plant
in Memphis, Tennessee to accommodate the strategic expansion of the Company's
business. In addition to these actions, the Company took steps to rationalize
operations at its recently acquired Solon, Ohio facility. Management continues
to review opportunities to consolidate operations and to maximize production
efficiencies by rationalizing overlapping facilities.
10
<PAGE>
LIQUIDITY AND CAPITAL RESOURCES
The Company's cash requirements for operations, capital expenditures and
acquisitions during the quarter ending December 29, 1996 were financed through
two sources: borrowings under the Credit Agreement and internally generated cash
flows. At December 29, 1996, the Company has availability under the existing
Credit Agreement to borrow an additional $15.2 million, plus an additional $25
million if certain conditions are met.
The Company's working capital increased $16.3 million to $38.6 million from
$22.3 million for the quarter ending December 29, 1996. The increase is
primarily attributable to the Ball Aerosol acquisition and a decrease in
accounts payable relating to timing of payments.
The Company used approximately $41.3 million of cash to complete the acquisition
of the metal aerosol can business from Ball Metal Food Container Corporation
during the first fiscal quarter of 1997. The funds were provided by borrowings
from the Credit Agreement. As of December 29, 1996, the outstanding balance on
the Credit Agreement was approximately $134.8 million.
During the first quarter of fiscal 1997, the Company's operating activities
provided $1.8 million of cash. Operating activities for the same period during
the prior year reflected cash provided of $5.1 million. The decrease in funds
provided during the three months ended December 29, 1996 reflect lower
earnings, as well as the decrease in accounts payable.
Capital expenditures of $3.6 million in the first quarter of fiscal 1997
represent a decrease of $0.5 million from the first quarter of fiscal 1996. This
decrease is due primarily to timing of expenditures. During the first quarter of
fiscal 1997, the Company took delivery and began the installation of the first
of its new coaters. The new coater is expected to be operational during the
second quarter of fiscal 1997. It is the Company's intention to accelerate the
rate of spending on its targeted capital investment program, designed to
increase productivity and reduce operating costs.
Cash provided by financing activities during the quarter ended December 29, 1996
was $42.6 million compared to $0.5 million provided during the comparable
quarter of the prior year. Cash provided during the first quarter of fiscal 1997
was obtained through operations and from the Credit Agreement. Funds were used
to consummate the Ball Aerosol acquisition discussed above. Management believes
that cash provided from borrowings available under the Credit Agreement and
operations will provide it with sufficient liquidity to meet its operating needs
and continue the Company's capital expenditure initiatives for the next twelve
months. The Company continues to pursue growth strategies and acquisition
opportunities in the North American container industry and in connection
therewith may incur additional indebtedness.
On November 21, 1995, the Company announced Board approval of a limited Common
Stock Repurchase Program to accommodate employee and open market transactions.
The Company has utilized this program to facilitate acquisitions and to fund
its benefit programs. BWAY expects to continue making periodic repurchases of
stock. The cash used for these activities will be provided by cash generated
through operations and borrowing under the Credit Agreement.
The Company has historically financed its operations through cash provided by
operations and by borrowings under its credit agreements. BWAY's future
principal uses of cash will be for payment of operating expenses, funding
capital investments, payment for additional acquisitions, repurchase of common
stock, and servicing debt.
11
<PAGE>
PART II. OTHER INFORMATION
ITEM 1. LEGAL PROCEEDINGS
Not applicable.
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
Effective November 20, 1996, the Company was listed on the New York Stock
Exchange under the symbol "BY".
ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K
(a) See Index of Exhibits.
(b) Report on Form 8-K was filed during the period covered by this filing
reporting the acquisition of the metal aerosol can business from Ball Metal
Food Container Corporation on October 28, 1996. Reports on Form 8-K are
incorporated in this document by reference to the respective filings.
12
<PAGE>
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.
BWAY Corporation
(Registrant)
Date: February 7, 1997 By: /s/ David P. Hayford
-----------------------
David P. Hayford
Senior Vice President &
Chief Financial Officer
Form 10-Q: For the quarterly period ending December 29, 1996
13
<PAGE>
INDEX TO EXHIBITS
LOCATION OF DOCUMENT
EXHIBIT IN SEQUENTIAL
NO. DESCRIPTION OF DOCUMENT NUMBERING SYSTEM
- ------- ----------------------- --------------------
10.1 Asset Purchase Agreement dated October 6, (1)
1996, between Milton Can Company, Inc.,
BWAY Corporation and Ball Corporation.
10.2 Amendment No. 1 to the Asset Purchase (1)
Agreement dated October 28, 1996.
___________
(1) INCORPORATED BY REFERENCE TO THE RESPECTIVE EXHIBIT TO THE COMPANY'S
FORM 8-K, FILED ON NOVEMBER 12, 1996.
14
<TABLE> <S> <C>
<PAGE>
<ARTICLE> 5
<LEGEND>
THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM BWAY
CORPORATION 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> SEP-28-1997
<PERIOD-START> SEP-30-1996
<PERIOD-END> DEC-29-1996
<CASH> 864
<SECURITIES> 0
<RECEIVABLES> 41,558
<ALLOWANCES> 535
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0
0
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