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 March 30, 1996
OR
( ) 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 0-6187
BANTA CORPORATION
(Exact name of registrant as specified in its charter)
Wisconsin 39-0148550
(State or other jurisdiction (IRS Employer
of incorporation or organization) I.D. Number)
225 Main Street, Menasha, Wisconsin 54952
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code: (414) 751-7777
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 / /
The registrant had outstanding on March 30, 1996, 31,164,726 shares
of $.10 par value common stock.
<PAGE>
BANTA CORPORATION AND SUBSIDIARIES
Quarterly Report Form 10-Q
For the Quarter Ended March 30, 1996
INDEX
PART I Financial Statements: Page Number
Unaudited Consolidated Condensed Balance Sheets
March 30, 1996 and December 30, 1995 . . . . . . . . . . . 3
Unaudited Consolidated Condensed Statements of Earnings for
the Three Months Ended March 30, 1996 and April 1, 1995 . . 4
Unaudited Consolidated Condensed Statements of Cash Flows
for the Three Months Ended March 30, 1996 and April 1, 1995 5
Notes to Unaudited Consolidated Condensed
Financial Statements . . . . . . . . . . . . . . . . . . . 6
Management's Discussion and Analysis of Financial Condition
and Results of Operations . . . . . . . . . . . . . . . . . 7-8
PART II Other Information and Signatures:
Item 6 - Exhibits and Reports on Form 8-K . . . . . . . . . . 8
Exhibit Index . . . . . . . . . . . . . . . . . . . . . . . . . . . 9
<PAGE>
PART I Item 1 - Financial Statements
BANTA CORPORATION AND SUBSIDIARIES
UNAUDITED CONSOLIDATED CONDENSED BALANCE SHEET
(Dollars in Thousands)
March 30, 1996 December 30, 1995
ASSETS
Current Assets
Cash $ 27,583 $ 27,130
Receivables 196,537 199,151
Inventories 69,638 70,750
Other current assets 12,942 13,775
------- -------
Total Current Assets 306,700 310,806
------- -------
Plant and Equipment 615,953 592,707
Less Accumulated Depreciation 292,422 278,989
------- -------
Plant and Equipment, net 323,531 313,718
------- -------
Other Assets 12,943 13,292
Cost in Excess of Net Assets of
Businesses Acquired 40,416 40,993
------- -------
$683,590 $678,809
======= =======
LIABILITIES AND SHAREHOLDERS' INVESTMENT
Current Liabilities
Accounts payable $66,485 $68,365
Accrued salaries and wages 18,342 21,784
Other accrued liabilities 23,872 24,848
Current maturities of long-term debt 7,950 7,853
------- -------
Total Current Liabilities 116,649 122,850
------- -------
Long-term Debt 139,005 134,953
Deferred Income Taxes 20,945 20,785
Other Non-current Liabilities 14,525 13,109
Shareholders' Investment
Preferred stock - $10 par value;
authorized 300,000 shares,none issued - -
Common stock - $.10 par value; authorized
75,000,000 shares, 31,164,726 and
20,559,614 shares issued, respectively 3,116 2,056
Amount in excess of par value of stock 71,804 70,138
Cumulative translation adjustment (550) (118)
Retained earnings 318,096 315,036
------- -------
Total Shareholders' Investment 392,466 387,112
------- -------
$683,590 $678,809
======= =======
See accompanying notes to consolidated financial statements.
<PAGE>
BANTA CORPORATION AND SUBSIDIARIES
UNAUDITED CONSOLIDATED CONDENSED STATEMENTS OF EARNINGS
(Dollars in Thousands, Except
Per Share Amounts)
Three Months Ended
March 30, 1996 April 1, 1995
Net sales $271,270 $232,954
Cost of goods sold 221,547 183,265
------- -------
Gross earnings 49,723 49,689
Selling and administrative expense 32,279 29,108
------- -------
Earnings from operations 17,444 20,581
Interest expense (2,861) (2,268)
Other income (expense), net 155 (11)
------- -------
Earnings before income taxes 14,738 18,302
Provision for income taxes 5,900 7,300
------ ------
Net earnings $ 8,838 $ 11,002
====== ======
Earnings per share of common stock $ .28 $ .36
====== ======
Average common shares outstanding 31,357,429 30,389,769
========== ==========
Cash dividends per share of common stock $ .11 $ .09
====== ======
See accompanying notes to consolidated financial statements.
<PAGE>
BANTA CORPORATION AND SUBSIDIARIES
UNAUDITED CONSOLIDATED CONDENSED
STATEMENTS OF CASH FLOWS
(Dollars in Thousands)
Three Months Ended
March 30, April 1, 1995
1996
Cash Flow From Operating Activities
Net earnings $ 8,838 $ 11,002
Depreciation and amortization 14,672 12,018
Deferred income taxes 160 212
Change in assets and liabilities
Decrease in receivables 3,146 6,290
Decrease (increase) in inventories 1,256 (8,019)
Decrease (increase) in current assets 915 (1,326)
(Decrease) increase in accounts
payable and accrued liabilities (6,636) 7,196
Decrease in other non-current assets 349 554
Other, net 1,178 1,443
------- -------
Cash provided from operating
activities 23,878 29,370
------- -------
Cash Flow From Investing Activities
Capital expenditures, net (19,103) (16,010)
-------- --------
Cash used for investing activities (19,103) (16,010)
-------- --------
Cash Flow From Financing Activities
Repayment of notes payable, net - (35,085)
Issuance of long-term debt - 25,000
Repayment of long-term debt (1,572) (467)
Dividends paid and distributions (4,147) (2,818)
Proceeds from exercise of stock option
and stock issues 1,397 259
------- ------
Cash used for financing activities (4,322) (13,111)
------- ------
Net increase in cash 453 249
Cash at beginning of period 27,130 370
------- ------
Cash at end of period $ 27,583 $ 619
======= ======
Cash payments for:
Interest, net of amount capitalized $ 2,498 $ 2,429
Income taxes 1,062 1,214
See accompanying notes to consolidated financial statements.
<PAGE>
BANTA CORPORATION AND SUBSIDIARIES
NOTES TO UNAUDITED CONSOLIDATED CONDENSED FINANCIAL STATEMENTS
1) Basis of Presentation
The condensed financial statements included herein have been prepared
by the Corporation, without audit, 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, although the Corporation believes that the disclosures
are adequate to make the information presented not misleading. It is
suggested that these condensed financial statements be read in
conjunction with the financial statements and the notes thereto
included in the Corporation's latest Annual Report on Form
10-K.
In the opinion of Management, the aforementioned statements reflect
all adjustments (consisting only of normal recurring adjustments)
necessary for a fair presentation of the results for the interim
periods.
2) Inventories
The majority of the Corporation's inventories used in its printing
operations are accounted for at cost determined on a last-in, first-
out (LIFO) basis, which is not in excess of market. The remaining
inventories are stated at the lower of cost or market using the
first-in, first-out (FIFO) method. Inventories include material,
labor and manufacturing overhead.
Inventory amounts at March 30, 1996 and December 30, 1995 were as
follows:
(Dollars in Thousands)
December 30,
March 30, 1996 1995
Raw Materials and Supplies $ 46,208 $ 44,815
Work-In-Process and Finished Goods 32,284 34,789
------ ------
FIFO value (current cost of all
inventories) 78,492 79,604
Excess of current cost over carrying
value of LIFO inventories (8,854) (8,854)
------ ------
Net Inventories $ 69,638 $ 70,750
====== ======
3) During the first quarter of 1996, the Corporation acquired all of the
outstanding shares of common stock of Packaging Fulfillment
Specialists, Inc. ("PFS") in a share exchange. In this transaction,
the Corporation issued a total of 236,337 shares of its common stock.
This transaction was accounted for as a pooling of interests. However,
since the assets, liabilities, results of operations and cash flows of
PFS are not material in relation to those of Banta Corporation, prior
period financial statements have not been restated to reflect this
transaction.
4) Stock Dividend
On March 1, 1996, the Corporation distributed a three-for-two stock
split effected in the form of a 50% stock dividend. The earnings per
share, dividends per share and average shares outstanding have been
adjusted in the condensed financial statements to reflect the stock
split.
Item 2
MANAGEMENT'S DISCUSSION AND ANALYSIS
OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
FINANCIAL CONDITION
Liquidity and Capital Resources
The Corporation's net working capital increased by approximately $2.1
million during the first quarter of 1996 primarily because cash
provided from operations was used to reduce current liabilities. There
were no other significant changes in the Corporation's liquidity or
capital resources.
RESULTS OF OPERATIONS
Net Sales
Sales for the first quarter of 1996 were $38.3 million (16%) higher
than the first quarter of 1996. The sales increase is attributable to
$35 million of sales reported by B.G. Turnkey Services, which was
acquired in October 1995, and higher paper prices in the first quarter
of 1996 than in the first quarter of 1995, which are generally passed
on to our customers through increased sales prices. Operating activity
levels during the first quarter of 1996, in almost all of the
Corporation's product groups, were below 1995 first quarter levels. The
lower level of operating activity was particularly evident during the
first half of the quarter as print projects were delayed and customers
reacted to last year's unprecedented rise in paper prices. However,
activity levels in the magazine market were slightly ahead of 1995, as
a result of capacity added in 1995. Expanded personalization services
contributed to increased sales of direct marketing materials, which are
included in the commercial market classification.
Cost of Goods Sold
Cost of goods sold as a percentage of sales increased from 78.7% for
the first quarter of 1995 to 81.7% for the first quarter of 1996. This
overall margin decline resulted from several factors. First, since the
sale of paper generally has lower margins than manufacturing sales, the
increase in paper sales reduced average margins. Second, the inclusion
of B.G. Turnkey Services in 1996 reduced margins because its project
management services generally provide lower margins than the
Corporation's print business due to the higher material content. Cost
of goods sold as a percentage of sales for B.G. Turnkey Services was
approximately 91.6% for the quarter compared to 80.2% for the balance
of the Corporation's operations.
Due to the paper price increase in 1995's first quarter, a $1.5 million
provision for last-in, first-out (LIFO) inventory valuation was
recorded in that quarter. No such provision was necessary in 1996.
Selling and Administrative Expenses
Selling and administrative expenses were $3.2 million higher for the
first quarter of 1996 than for the first quarter of 1995. The increase
is primarily due to the inclusion of selling and administrative
expenses of the companies acquired in 1995.
Interest Expense
Interest expense was $593,000 higher in the first quarter of 1996 than
for the first quarter of 1995 due to increased debt levels.
Income Taxes
The Corporation's effective first quarter income tax rates were
approximately the same for the first quarter of 1996 and 1995,
respectively.
PART II: OTHER INFORMATION
Item 6. Exhibits and Reports on Form 8-K
(a) Exhibits -
27 - Financial Data Schedule (EDGAR version only)
(b) No reports on Form 8-K were filed during the quarter for
which this report is filed.
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.
BANTA CORPORATION
/S/ GERALD A. HENSELER
Gerald A. Henseler
Executive Vice President and Chief Financial Officer
Date May 10, 1996
<PAGE>
BANTA CORPORATION
EXHIBIT INDEX TO FORM 10-Q
For The Quarter Ended March 30, 1996
Exhibit Number
27 Financial Data Schedule (EDGAR version only)
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
THE SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM THE
CONSOLIDATED FINANCIAL STATEMENTS OF BANTA CORPORATION AS OF AND FOR THE THREE
MONTHS ENDED MARCH 30, 1996 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> DEC-28-1996
<PERIOD-START> DEC-31-1995
<PERIOD-END> MAR-30-1996
<CASH> 27,583
<SECURITIES> 0
<RECEIVABLES> 200,219
<ALLOWANCES> 3,682
<INVENTORY> 69,638
<CURRENT-ASSETS> 306,700
<PP&E> 615,953
<DEPRECIATION> 292,422
<TOTAL-ASSETS> 683,590
<CURRENT-LIABILITIES> 116,649
<BONDS> 139,005
0
0
<COMMON> 3,116
<OTHER-SE> 389,350
<TOTAL-LIABILITY-AND-EQUITY> 683,590
<SALES> 271,270
<TOTAL-REVENUES> 271,270
<CGS> 221,547
<TOTAL-COSTS> 221,547
<OTHER-EXPENSES> 32,279
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 281
<INCOME-PRETAX> 14,738
<INCOME-TAX> 5,900
<INCOME-CONTINUING> 8,838
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 8,838
<EPS-PRIMARY> 0.28<F1>
<EPS-DILUTED> 0.28<F1>
<FN>
<F1>PER SHARE AMOUNTS HAVE BEEN ADJUSTED FOR THREE-FOR-TWO STOCK SPLIT
DISTRIBUTED IN MARCH 1996. PRIOR PERIOD SCHEDULES HAVE NOT BEEN RESTATED
FOR THIS STOCK SPLIT.
</FN>
</TABLE>
