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 29, 1997
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 29, 1997, 29,879,810 shares
of $.10 par value common stock.
<PAGE>
BANTA CORPORATION AND SUBSIDIARIES
Quarterly Report Form 10-Q
For the Quarter Ended March 29, 1997
INDEX
PART I Financial Statements: Page Number
Unaudited Consolidated Condensed Balance Sheets
March 29, 1997 and December 28, 1996 . . . . . . . . . . . 3
Unaudited Consolidated Condensed Statements of
Earnings for the Three Months Ended March 29, 1997
and March 30, 1996 . . . . . . . . . . . . . . . . . . . . . 4
Unaudited Consolidated Condensed Statements of
Cash Flows for the Three Months Ended March 29, 1997
and March 30, 1996 . . . . . . . . . . . . . . . . . . . . . 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 SHEETS
(Dollars in thousands)
March 29, December 28,
1997 1996
ASSETS
Current Assets
Cash and cash equivalents $ 49,887 $ 57,417
Receivables 195,572 206,245
Inventories 74,718 69,063
Other current assets 18,314 14,730
-------- ---------
Total Current Assets 338,491 347,455
-------- ---------
Plant and Equipment 658,870 650,243
Less: Accumulated Depreciation (341,759) (330,304)
-------- ---------
Plant and Equipment, net 317,111 319,939
-------- ---------
Other Assets 13,933 11,886
Cost in Excess of Net Assets of
Subsidiaries Acquired 38,975 39,938
-------- ---------
$ 708,510 $ 719,218
======== =========
LIABILITIES AND SHAREHOLDERS'
INVESTMENT
Current Liabilities
Short-term debt $ 2,509 $ 4,620
Accounts payable 84,986 75,428
Accrued salaries and wages 18,094 18,269
Other accrued liabilities 29,334 23,888
Current maturities of long-term
debt 5,448 5,620
-------- -------
Total Current Liabilities 140,371 127,825
-------- -------
Long-term Debt 133,539 133,696
Deferred Income Taxes 21,910 21,805
Other Non-Current Liabilities 14,320 15,300
Shareholders' Investment
Preferred stock-$10 par value;
authorized 300,000 shares;
none issued 0 0
Common stock-$.10 par value;
authorized 75,000,000 shares;
29,879,810 and 30,969,069
shares issued and outstanding,
respectively 2,988 3,097
Amount in excess of par value of
stock 38,991 66,119
Cumulative translation adjustment (123) 1,473
Retained earnings 356,514 349,903
-------- --------
Total Shareholders' Investment 398,370 420,592
-------- --------
$ 708,510 $ 719,218
======== ========
See accompanying notes to consolidated financial statements
<PAGE>
BANTA CORPORATION AND SUBSIDIARIES
UNAUDITED CONSOLIDATED CONDENSED STATEMENT OF EARNINGS
(Dollars in thousands, except
per share amounts)
Three Months Ended
March 29, 1997 March 30, 1996
Net sales $ 275,363 $ 271,270
Cost of goods sold 222,641 221,547
---------- ----------
Gross earnings 52,722 49,723
Selling and administrative expenses 34,385 32,279
---------- ----------
Earnings from operations 18,337 17,444
Interest expense (2,793) (2,861)
Other, net 874 155
---------- ----------
Earnings before income taxes 16,418 14,738
Provision for income taxes 6,400 5,900
---------- ----------
Net earnings $ 10,018 $ 8,838
========== ==========
Earnings per share of common stock $ .33 $ .28
========== ==========
Average common shares outstanding 30,542,086 31,357,429
========== ==========
Cash dividends per common share $ .11 $ .11
========== ==========
See accompanying notes to consolidated financial statements
<PAGE>
<TABLE>
<CAPTION>
BANTA CORPORATION AND SUBSIDIARIES
UNAUDITED CONSOLIDATED CONDENSED STATEMENTS OF CASH FLOWS
(Dollars in thousands)
Three Months Ended
March 29, 1997 March 30, 1996
<S> <C> <C>
Cash Flows From Operating Activities
Net earnings $ 10,018 $ 8,838
Depreciation and amortization 15,164 14,672
Deferred income taxes 105 160
Change in assets and liabilities:
Decrease in receivables 10,673 3,146
(Increase) decrease in inventories (5,655) 1,256
(Increase) decrease in other current assets (3,584) 915
Increase (decrease) in accounts payable
and accrued liabilities 14,934 (6,636)
(Increase) decrease in other non-current assets (2,047) 349
Other, net (2,068) 323
------- -------
Cash provided from operating activities 37,540 23,023
------- -------
Cash Flows From Investing Activities
Capital expenditures, net (11,986) (19,103)
------- -------
Cash used for investing activities (11,986) (19,103)
------- -------
Cash Flows From Financing Activities
Repayment of short-term debt, net (2,111) 0
Repayment of long-term debt (329) (1,572)
Dividends paid (3,407) (3,292)
Proceeds from exercise of stock options 333 1,397
Repurchase of common stock (27,570) 0
------- -------
Cash used for financing activities (33,084) (3,467)
------- -------
Net (decrease) increase in cash (7,530) 453
Cash and cash equivalents at beginning of period 57,417 27,130
------- -------
Cash and cash equivalents at end of period $ 49,887 $ 27,583
======= =======
Cash payments for:
Interest, net of amount capitalized $ 2,521 $ 2,498
Income taxes 1,267 1,062
</TABLE>
See accompanying notes to consolidated 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.
Results for the three months ended March 29, 1997, are not necessarily
indicative of results that may be expected for the year ended January
3, 1998.
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 29, 1997 and December 28, 1996 were as
follows:
(Dollars in thousands)
December 28,
March 29, 1997 1996
Raw Materials and Supplies $ 44,863 $ 40,980
Work-In-Process and Finished Goods 34,228 32,456
------- -------
FIFO value (current cost of all
inventories) 79,091 73,436
Excess of current cost over carrying
value of LIFO inventories (4,373) (4,373)
------- -------
Net Inventories $ 74,718 $ 69,063
======= =======
3) In March 1997, the Financial Accounting Standards Board issued
Statement of Financial Accounting Standards No. 128, "Earnings per
Share." The new statement requires changes in the manner in which
earnings per share are calculated and is effective for fiscal years
ending after December 15, 1997. The Standard does not allow early
adoption. The Corporation intends to adopt this standard during the
fourth quarter of 1997. The adoption of this standard is not
expected to have a material effect on the Corporation's earnings per
share.
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 decreased by approximately $21.5
million during the first quarter of 1997 primarily because the
Corporation purchased approximately 1.1 million shares of its common
stock under a repurchase program authorized by its Board of Directors.
In April 1997, the Board authorized the purchase of up to an additional
1.5 million shares.
RESULTS OF OPERATIONS
Net Sales
Sales for the first quarter of 1997 were $4.1 million (2%) higher than
for first quarter of 1996. The sales increase was offset by lower paper
prices in the first quarter of 1997 as compared with the first quarter
of 1996. The cost of paper is generally passed on to the Corporation's
customers and, as a result, as paper prices decreased from 1996 levels,
the Corporation's sales also decreased. Comparable paper prices to
those in first quarter 1996 would have increased 1997 revenues by
approximately $22 million. Operating activity levels during the first
quarter of 1997, in all of the Corporation's market classifications,
were above 1996 first quarter levels. Significant sales gains were made
in the book market where the plants previously serving the computer
software documentation publishers successfully refocused their efforts
toward smaller size trade books.
Cost of Goods Sold
Cost of goods sold as a percentage of sales decreased from 81.7% for
the first quarter of 1996 to 80.9% for the first quarter of 1997. This
overall margin gain resulted from several factors. Since the sale of
paper generally has lower margins than manufacturing sales, the
decrease in paper sales increased average margins. Additionally,
increased utilization among most of the Corporation's operating
facilities increased margins.
Selling and Administrative Expenses
Selling and administrative expenses were $2.1 million higher for the
first quarter of 1997 than for the first quarter of 1996. The increase
is primarily due to the higher level of operating activity and the
selling and administrative expenses related to that higher level.
Interest Expense
Interest expense was $68,000 lower in the first quarter of 1996 than
for the first quarter of 1996 due to decreased debt levels.
Income Taxes
The Corporation's effective first quarter income tax rates declined by
1% due to an increase in tax-free interest income earned compared to
the first quarter of 1996.
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 9, 1997
<PAGE>
BANTA CORPORATION
EXHIBIT INDEX TO FORM 10-Q
For The Quarter Ended March 29, 1997
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 29, 1997 AN QUALIFIED IN ITS ENTIRETY BY REFERENCE TO SUCH
FINANCIAL STATEMENTS.
</LEGEND>
<MULTIPLIER> 1,000
<S> <C>
<PERIOD-TYPE> 3-MOS
<FISCAL-YEAR-END> JAN-03-1998
<PERIOD-START> DEC-30-1996
<PERIOD-END> MAR-29-1997
<CASH> 49,887
<SECURITIES> 0
<RECEIVABLES> 198,951
<ALLOWANCES> 3,379
<INVENTORY> 74,718
<CURRENT-ASSETS> 338,491
<PP&E> 658,870
<DEPRECIATION> 341,759
<TOTAL-ASSETS> 708,510
<CURRENT-LIABILITIES> 140,371
<BONDS> 133,539
0
0
<COMMON> 2,988
<OTHER-SE> 395,382
<TOTAL-LIABILITY-AND-EQUITY> 708,510
<SALES> 275,363
<TOTAL-REVENUES> 275,363
<CGS> 222,641
<TOTAL-COSTS> 222,641
<OTHER-EXPENSES> 34,385
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 2,793
<INCOME-PRETAX> 16,418
<INCOME-TAX> 6,400
<INCOME-CONTINUING> 10,018
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 10,018
<EPS-PRIMARY> 0.33
<EPS-DILUTED> 0.33
</TABLE>
