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Table of Contents

 

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549

 

 

Form 10-Q

 

 

(Mark One)

 

(X)   QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF

THE SECURITIES EXCHANGE ACT OF 1934

 

For the quarterly period ended March 31, 2003

 

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 000-12954

 

 

CADMUS COMMUNICATIONS CORPORATION

(Exact name of registrant as specified in its charter)

 

Virginia

     

54-1274108

(State or other jurisdiction of
incorporation or organization)

     

(I.R.S. Employer
Identification Number)

        

 

1801 Bayberry Court, Suite 200

Richmond, Virginia 23226

(Address of principal executive offices including zip code)

 

 

(Registrant’s telephone number, (804) 287-5680 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     

 

Indicate by check mark whether the registrant is an accelerated filer (as defined in Rule 12b-2 of the Exchange Act). Yes X No     

 

 

Indicate the number of shares outstanding of each of the registrant’s classes of common stock, as of the latest practicable date.

 

Class

     

Outstanding at April 30, 2003

Common Stock, $.50 Par Value

     

9,007,092

 

Table of Contents

 

CADMUS COMMUNICATIONS CORPORATION AND SUBSIDIARIES

INDEX

 

 

        

Page Number

Part I

  

Financial Information

     
          
   

Item 1.         Financial Statements

     
          
   

Condensed Consolidated Balance Sheets —
March 31, 2003 (unaudited) and June 30, 2002   

  

  3

   

Condensed Consolidated Statements of Operations (unaudited) —
Three and Nine Months Ended March 31, 2003 and 2002   

  

  4

   

Condensed Consolidated Statements of Cash Flows (unaudited) —  
Nine Months Ended March 31, 2003 and 2002

  

  5

   

Condensed Consolidated Statements of Shareholders’ Equity —
March 31, 2003 (unaudited) and June 30, 2002   

  

  6

   

Notes to Condensed Consolidated Financial Statements (unaudited)

  

  7

   

Item 2.         Management’s Discussion and Analysis of Financial
                  Condition and Results of Operations

  

14

   

Item 3.         Quantitative and Qualitative Disclosures About Market Risk

  

22

   

Item 4.         Controls and Procedures

  

22

Part II.

 

Other Information

     
   

Item 1.         Legal Proceedings

  

23

   

Item 6.         Exhibits and Reports on Form 8-K

  

23

Signatures

      

24

Certifications

      

25

 

2

Table of Contents

PART I. FINANCIAL INFORMATION

ITEM 1. FINANCIAL STATEMENTS

CADMUS COMMUNICATIONS CORPORATION AND SUBSIDIARIES

CONDENSED CONSOLIDATED BALANCE SHEETS

(In thousands, except share data)

 

    

March 31, 2003

       

June 30, 2002

  
    

(Unaudited)

           

ASSETS

                    

Current assets:

                    

Cash and cash equivalents

   

$

1,815

 

     

$

1,196

 

Accounts receivable (net of allowance for doubtful accounts of
$2,616 at March 31, 2003 and $1,962 at June 30, 2002)

   

 

36,191

 

     

 

34,845

 

Inventories

   

 

21,155

 

     

 

19,545

 

Deferred income taxes

   

 

1,857

 

     

 

3,653

 

Prepaid expenses and other

   

 

5,292

 

     

 

4,791

 

    
    

Total current assets

   

 

66,310

 

     

 

64,030

 

Property, plant, and equipment (net of accumulated depreciation
of $136,838 at March 31, 2003 and $134,908 at June 30, 2002)

   

 

106,923

 

     

 

119,989

 

Assets held for sale

   

 

1,657

 

     

 

4,051

 

Goodwill and other intangibles, net

   

 

111,487

 

     

 

167,788

 

Other assets

   

 

14,781

 

     

 

13,737

 

    
    

TOTAL ASSETS

   

$

301,158

 

     

$

369,595

 

    
    

LIABILITIES AND SHAREHOLDERS’ EQUITY

                    

Current liabilities:

                    

Accounts payable

   

$

35,311

 

     

$

38,322

 

Accrued expenses and other current liabilities

   

 

28,985

 

     

 

24,966

 

Current maturities of long-term debt

   

 

13,800

 

     

 

—  

 

Restructuring reserve

   

 

1,433

 

     

 

1,127

 

    
    

Total current liabilities

   

 

79,529

 

     

 

64,415

 

    
    

Long-term debt, less current maturities

   

 

133,859

 

     

 

157,246

 

Other long-term liabilities

   

 

26,907

 

     

 

29,300

 

Deferred income taxes

   

 

5,940

 

     

 

7,120

 

    
    

Total liabilities

   

 

246,235

 

     

 

258,081

 

Shareholders’ equity:

                    

Common stock ($.50 par value; authorized shares-16,000,000
shares; issued and outstanding shares- 9,007,092 at
March 31, 2003 and 8,992,092 at June 30, 2002)

   

 

4,503

 

     

 

4,496

 

Capital in excess of par value

   

 

67,957

 

     

 

67,805

 

Unearned compensation

   

 

(137

)

     

 

(77

)

Retained earnings (deficit)

   

 

(16,408

)

     

 

40,282

 

Accumulated other comprehensive loss

   

 

(992

)

     

 

(992

)

    
    

Total shareholders’ equity

   

 

54,923

 

     

 

111,514

 

    
    

TOTAL LIABILITIES AND SHAREHOLDERS’ EQUITY

   

$

301,158

 

     

$

369,595

 

    
    

 

See accompanying Notes to Condensed Consolidated Financial Statements.

 

3

Table of Contents

 

CADMUS COMMUNICATIONS CORPORATION AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS

(In thousands, except per share data)

(Unaudited)

 

<
   

Three Months Ended

March 31,

       

Nine Months Ended

March 31,

  
   

2003

     

2002

       

2003

       

2002

  

Net sales

  

$

113,437

     

$

112,656

 

     

$

332,558

 

     

$

338,259

 

   
    
    
    

Operating expenses:

                                       

Cost of sales

  

 

91,313

     

 

91,989

 

     

 

269,229

 

     

 

277,712

 

Selling and administrative

  

 

13,536

     

 

12,130

 

     

 

39,245

 

     

 

36,936

 

Amortization

  

 

—  

     

 

1,174

 

     

 

—  

 

     

 

3,551

 

Restructuring and other charges

  

 

1,130

     

 

—  

 

     

 

10,051

 

     

 

—  

 

   
    
    
    
   

 

105,979

     

 

105,293

 

     

 

318,525

 

     

 

318,199

 

   
    
    
    

Operating income

  

 

7,458

     

 

7,363

 

     

 

14,033

 

     

 

20,060

 

   
    
    
    

Interest and other expenses:

                                       

Interest

  

 

3,617

     

 

3,773

 

     

 

11,072

 

     

 

12,107

 

Securitization costs

  

 

131

     

 

220

 

     

 

495

 

     

 

911

 

Other, net

  

 

133

     

 

72

 

     

 

264

 

     

 

230

 

   
    
    
    
   

 

3,881

     

 

4,065

 

     

 

11,831

 

     

 

13,248

 

   
    
    
    

Income from continuing operations before income taxes

  

 

3,577

     

 

3,298

 

     

 

2,202

 

     

 

6,812

 

Income tax expense

  

 

1,405

     

 

1,750

 

     

 

1,239

 

     

 

3,372

 

   
    
    
    

Income from continuing operations

  

 

2,172

     

 

1,548

 

     

 

963

 

     

 

3,440

 

(Loss) from discontinued operations

  

 

—  

     

 

(1,205

)

     

 

—  

 

     

 

(1,236

)

Cumulative effect of a change in accounting principle

  

 

—  

     

 

—  

 

     

 

(56,301

)

     

 

—  

 

   
    
    
    

Net income (loss)

  

$

2,172

     

$

343

 

     

$

(55,338

)

     

$

2,204

 

   
    
    
    

Earnings per common share—basic

                                       

Income from continuing operations

  

$

.24

     

$

.17

 

     

$

.11

 

     

$

.38

 

(Loss) from discontinued operations

  

 

—  

     

 

(.13

)

     

 

—