UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 10-Q
(Mark One)
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QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 | ||
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For the quarterly period ended March 31, 2003 | ||
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OR | ||
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TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 [NO FEE REQUIRED] | ||
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For the transition period from _________ to _________ | ||
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| Commission File Number 0-20646 | ||||
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| Caraustar Industries, Inc. | ||||
| (Exact name of registrant as specified in its charter) | ||||
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| North Carolina |
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58-1388387 | ||
| (State or other jurisdiction of incorporation or organization) |
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(I.R.S. Employer Identification Number) | ||
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| 3100 Joe Jerkins Blvd., Austell, Georgia |
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30106 | ||
| (Address of principal executive offices) |
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(Zip Code) | ||
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| (770) 948-3101 | ||||
| (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 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.
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No o |
Indicate by check mark whether the registrant is an accelerated filer (as defined in Rule 12b-2 of the Exchange Act).
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No o |
Indicate the number of shares outstanding of each of issuer’s classes of common stock, as of the latest practicable date, May 9, 2003.
| Common Stock, $.10 par value |
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27,910,819 |
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(Outstanding) |
FORM 10-Q FOR THE QUARTER ENDED MARCH 31, 2003
CARAUSTAR INDUSTRIES, INC.
TABLE OF CONTENTS
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Page |
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| PART I — |
FINANCIAL INFORMATION |
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| Item 1. |
Condensed Consolidated Financial Statements: |
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Condensed Consolidated Balance Sheets as of March 31, 2003 and December 31, 2002 |
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4 | |
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5 | |
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6 | |
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| Item 2. |
Management’s Discussion and Analysis of Financial Condition and Results of Operations |
22 |
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| Item 3. |
38 | |
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| Item 4. |
38 | |
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| PART II — |
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| Item 6. |
40 | |
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2
CARAUSTAR INDUSTRIES, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED BALANCE SHEETS (UNAUDITED)
(In thousands, except share data)
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March 31, |
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December 31, |
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| ASSETS |
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| CURRENT ASSETS: |
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| Cash and cash equivalents |
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$ |
47,001 |
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$ |
34,314 |
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| Receivables, net of allowances |
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109,668 |
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106,149 |
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| Inventories |
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109,699 |
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107,644 |
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| Refundable income taxes |
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752 |
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14,926 |
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| Other current assets |
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10,767 |
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8,498 |
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| Total current assets |
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277,887 |
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271,531 |
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| PROPERTY, PLANT AND EQUIPMENT: |
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| Land |
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14,495 |
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14,337 |
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| Buildings and improvements |
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149,258 |
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150,565 |
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| Machinery and equipment |
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632,050 |
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643,863 |
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| Furniture and fixtures |
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14,967 |
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14,894 |
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810,770 |
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823,659 |
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| Less accumulated depreciation |
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(373,534 |
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(380,264 |
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| Property, plant and equipment, net |
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437,236 |
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443,395 |
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| GOODWILL |
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180,629 |
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180,545 |
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| INVESTMENT IN UNCONSOLIDATED AFFILIATES |
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51,651 |
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52,830 |
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| OTHER ASSETS |
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35,088 |
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36,913 |
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$ |
982,491 |
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$ |
985,214 |
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| LIABILITIES AND SHAREHOLDERS’ EQUITY |
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| CURRENT LIABILITIES: |
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| Current maturities of debt |
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$ |
70 |
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$ |
70 |
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| Accounts payable |
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64,435 |
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60,027 |
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| Accrued liabilities |
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58,420 |
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58,456 |
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| Accrued pension |
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11,279 |
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11,279 |
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| Total current liabilities |
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134,204 |
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129,832 |
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| SENIOR CREDIT FACILITY |
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— |
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— |
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| LONG-TERM DEBT, less current maturities |
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531,209 |
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532,715 |
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| DEFERRED INCOME TAXES |
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59,193 |
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60,630 |
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| PENSION LIABILITY |
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16,232 |
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13,572 |
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| DEFERRED COMPENSATION |
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1,480 |
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1,500 |
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| OTHER LIABILITIES |
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4,659 |
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4,584 |
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| MINORITY INTEREST |
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705 |
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700 |
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| COMMITMENTS AND CONTINGENCIES (Note 12) |
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| SHAREHOLDERS’ EQUITY: |
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| Preferred stock, $.10 par value; 5,000,000 shares authorized; none issued |
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| Common stock, $.10 par value; 60,000,000 shares authorized, 27,910,819 and 27,906,674 shares issued and outstanding at March 31, 2003 and December 31, 2002, respectively |
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2,791 |
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2,791 |
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| Additional paid-in capital |
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182,284 |
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182,224 |
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| Retained earnings |
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72,438 |
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79,566 |
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| Accumulated other comprehensive loss |
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(22,704 |
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(22,900 |
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234,809 |
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241,681 |
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$ |
982,491 |
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$ |
985,214 |
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The accompanying notes are an integral part of these Condensed Consolidated Financial Statements.
3
CARAUSTAR INDUSTRIES, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS (UNAUDITED)
(In thousands, except per share data)
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For The Three Months Ended |
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2003 |
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2002 |
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| SALES |
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$ |
252,902 |
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$ |
218,902 |
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| COST OF SALES |
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206,346 |
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175,493 |
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| Gross profit |
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46,556 |
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43,409 |
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| SELLING, GENERAL AND ADMINISTRATIVE EXPENSES |
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43,594 |
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33,995 |
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| RESTRUCTURING COSTS |
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4,332 |
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— |
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| Operating (loss) income |
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(1,370 |
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9,414 |
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| OTHER (EXPENSE) INCOME: |
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| Interest expense |
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(10,337 |
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(9,302 |
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| Interest income |
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201 |
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376 |
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| Gain on extinguishment of debt |
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87 |
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| Equity in income of unconsolidated affiliates |
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20 |
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3 |
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| Other, net |
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98 |
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134 |
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| Total other expense |
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(10,018 |
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(8,702 |
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| (LOSS) INCOME BEFORE MINORITY INTEREST AND INCOME TAXES |
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(11,388 |
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712 |
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| MINORITY INTEREST IN (INCOME) LOSSES |
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(5 |
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23 |
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| (BENEFIT) PROVISION FOR INCOME TAXES |
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(4,265 |
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236 |
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| NET (LOSS) INCOME |
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$ |
(7,128 |
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$ |
499 |
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| OTHER COMPREHENSIVE (LOSS) INCOME: |
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| Foreign currency translation adjustment |
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196 |
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(55 |
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| Comprehensive (loss) income |
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$ |
(6,932 |
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$ |
444 |
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| BASIC |
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| NET (LOSS) INCOME PER COMMON SHARE |
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$ |
(0.26 |
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$ |
0.02 |
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| Weighted average number of shares outstanding |
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27,911 |
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27,857 |
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| DILUTED |
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| NET (LOSS) INCOME PER COMMON SHARE |
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$ |
(0.26 |
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$ |
0.02 |
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| Diluted weighted average number of shares outstanding |
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27,911 |
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27,888 |
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The accompanying notes are an integral part of these Condensed Consolidated Financial Statements.
4
CARAUSTAR INDUSTRIES, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (UNAUDITED)
(In thousands)
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For the Three Months Ended |
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2003 |
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2002 |
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| Cash (used in) provided by |
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| Operating activities: |
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| Net (loss) income |
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$ |
(7,128 |
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$ |
499 |
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| Gain from extinguishment of debt |
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— |
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(87 |
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| Depreciation and amortization |
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7,748 |
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15,492 |
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| Disposal of property, plant and equipment |
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294 |
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253 |
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| Restructuring costs |
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5,627 |
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| Other noncash adjustments |
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(1,383 |
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189 |
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| Equity in income of unconsolidated affiliates, net of distributions |
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480 |
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997 |
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