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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 September 30, 2002          
 
OR
 
o TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the transition period from                   to                    

Commission File #0-16148

Multi-Color Corporation
(Exact name of Registrant as specified in its charter)

  OHIO   31-1125853
(State or other jurisdiction of (IRS Employer
incorporation or organization) Identification No.)

425 Walnut Street, Suite 1300, Cincinnati, Ohio 45202
(Address of principal executive offices)

Registrant’s telephone number – (513) 381-1480


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

Common shares, no par value - 3,844,076 (as of November 11, 2002)

-1-

Table of Contents

FORM 10-Q  
CONTENTS  
   
PART I - FINANCIAL INFORMATION (Unaudited)  
  Page
   
Condensed Consolidated Balance Sheets at September 30, 2002 and March 31, 2002 3
   
Condensed Consolidated Statements of Income for the Three Months
Ended September 30, 2002 and September 30, 2001		 4
   
Condensed Consolidated Statements of Income for the Six Months
Ended September 30, 2002 and September 30, 2001		 5
   
Condensed Consolidated Statements of Cash Flows for the Six Months
Ended September 30, 2002 and September 30, 2001		 6
   
Notes to Condensed Consolidated Financial Statements 7
   
Management’s Discussions and Analysis of Financial Condition and Results of Operations 9
   
Quantitative and Qualitative Disclosures About Market Risk 11
   
Controls and Procedures 11
   
PART II - OTHER INFORMATION  
   
Item 1. Legal Proceedings 11
   
Item 2. Changes in Securities 11
   
Item 3. Defaults upon Senior Securities 11
   
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
   
Signature 13
   
Certifications 14-15
   

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Table of Contents

Item 1. Financial Statements

MULTI-COLOR CORPORATION
Condensed Consolidated Balance Sheets
(Thousands)

 
   September 30, 2002   March 31, 2002
 
  
 
ASSETS
   (Unaudited)        
 
                
 
                
Current Assets:
                
Cash
   $ 270     $ 1,390  
Accounts receivable, net
     11,207       5,440  
Inventories
     5,654       5,276  
Deferred tax asset
     243       243  
Prepaid expenses and other
     275       229  
 
  
 
Total current assets
     17,649       12,578  
 
                
Property, plant and equipment, net
     29,074       28,089  
 
                
Goodwill
     10,854       6,384  
 
                
Intangible assets, net
     753       859  
 
                
Other
     81       14  
 
  
 
 
                
Total assets
   $ 58,411     $ 47,924  
 
  
 
 
                
LIABILITIES AND SHAREHOLDERS’ INVESTMENT
                
 
                
Current liabilities:
                
Short-term debt
   $ 1,734     $ -  
Current portion of long-term debt
     3,652       3,593  
Current portion of capital lease obligations
     56       14  
Accounts payable
     3,877       3,277  
Accrued expenses
     2,720       2,369  
 
  
 
Total current liabilities
     12,039       9,253  
 
                
Long-term debt, excluding current portion
     18,064       14,484  
 
                
Capital lease obligations, excluding current portion
     4,212       4,207  
 
                
Deferred tax liability
     2,913       1,989  
 
                
Deferred compensation
     345       332  
 
  
 
Total liabilities
     37,573       30,265  
 
                
Shareholders’ investment:
                
Common stock, no par value
     259       253  
Paid-in capital
     10,589       10,304  
Treasury stock, at cost
     (119 )     (119 )
Retained earnings
     10,109       7,221  
 
  
 
Total shareholders’ investment
     20,838       17,659  
 
  
 
 
                
Total liabilities and shareholders’ investment
   $ 58,411     $ 47,924  
 
  
 

The accompanying notes are an integral part of this financial information.

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Table of Contents

Item 1. Financial Statements (continued)

MULTI-COLOR CORPORATION
Condensed Consolidated Statements of Income
(Unaudited)
(Thousands except per share amounts)

 
 Three Months Ended
 
 
   September 30, 2002       September 30, 2001  
 
 
 
                  
Net sales
   $ 24,100       $ 18,595  
 
                  
Cost of goods sold
     19,435         15,129  
 
 
 
                  
Gross profit
     4,665         3,466  
 
                  
Selling, general and administrative expenses
     1,669         1,143  
 
 
 
                  
Operating income
     2,996         2,323  
 
                  
Other expense, net
     48         25  
 
                  
Interest expense
     361         375  
 
 
 
                  
Income before income taxes
     2,587         1,923  
 
                  
Income taxes
     987         692  
 
 
 
                  
Net income
   $ 1,600       $ 1,231  
 
 
 
                  
 
                  
Basic earnings per share
   $ 0.42       $ 0.33  
 
                  
Diluted earnings per share
   $ 0.38       $ 0.29  
 
                  
Average number of common shares outstanding
                  
Basic
     3,821         3,740  
 
                  
Diluted
     4,246         4,184  

The accompanying notes are an integral part of this financial information.

-4-

Table of Contents

Item 1. Financial Statements (continued)

MULTI-COLOR CORPORATION
Condensed Consolidated Statements of Income
(Unaudited)
(Thousands except per share amounts)

  Six Months Ended
 
  September 30, 2002   September 30, 2001
 
 
           
Net sales
$
                        45,014 
  
$
                        39,125 
           
Cost of goods sold
  
                           36,202 
    
                           31,672 
 
 
           
    Gross profit
  
                              8,812 
    
                              7,453 
           
Selling, general and administrative expenses
  
                              3,338 
    
                              2,538 
 
 
           
Operating income 
  
                              5,474 
    
                              4,915 
           
Other expense, net
  
                                    96  
    
                                    46  
           
Interest expense
  
                                 697 
    
                                 799 
 
 
           
    Income before income taxes
  
                              4,681 
    
                              4,070 
           
Income taxes
  
                              1,793 
    
                              1,465 
 
 
           
   Net income
$
                           2,888 
  
$
                           2,605 
 
 
           
           
Basic earnings per share
$
                             0.76 
  
$
                             0.70 
           
Diluted earnings per share
$
                             0.68 
  
$
                             0.63 
           
Average number of common shares outstanding
          
Basic
  
                              3,796 
    
                              3,740 
           
Diluted
  
                              4,253 
    
                              4,098 
           

The accompanying notes are an integral part of this financial information.

-5-

Table of Contents

Item 1. Financial Statements (continued)

MULTI-COLOR CORPORATION
Condensed Consolidated Statements of Cash Flows
(Unaudited)
(Thousands)

  Six Months Ended
 
  September 30, 2002   September 30, 2001
 
 
               
NET CASH PROVIDED BY OPERATING ACTIVITIES
$
1,181
    
$
4,831
  
               
CASH FLOWS FROM INVESTING ACTIVITIES:
              
Capital expenditures
  
(1,232
)
    
(832
)
Acquisition of business, net of cash received
  
(6,352
)
    
-
  
Proceeds from sale of property, plant and equipment
  
19
      
13
  
 
 
Net cash used in investing activities
  
(7,565
)
    
(819
)
               
CASH FLOWS FROM FINANCING ACTIVITIES:
              
Increase (decrease) in revolving line of credit, net
  
1,734
      
(94
)
Repayment of long-term debt
  
(1,661
)
    
(1,659
)
Proceeds from issuance of long-term debt
  
5,000
      
-
  
Capitalized loan fees
  
(81
)
    
-
  
Repayment of capital lease obligations
  
(19
)
    
(47
)
Proceeds from issuance of common stock
  
291
      
133
  
Purchase of treasury stock
  
-
      
(68
)
Purchase of outstanding stock options
  
-
      
(412
)
 
 
Net cash provided by (used in) financing activities
  
5,264
      
(2,147
)
 
 
Net increase (decrease) in cash
  
(1,120
)
    
1,865
  
Cash, beginning of period
  
1,390
      
3
  
 
 
Cash, end of period
$
270
    
$
1,868
  
 
 
               
               
SUPPLEMENTAL DISCLOSURES OF CASH FLOW INFORMATION