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FORM 10-Q

 

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C.  20549

 

(Mark One)

 

ý QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934

 

 

 

For the quarterly period ended June 30, 2004

 

 

 

OR

 

 

 

o TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934

 

For the transition period from                   to                                  

 

Registration Number:  333-114032

 

BLUE RIDGE PAPER PRODUCTS INC.

(Exact name of registrant as specified in charter)

 

Delaware

 

56-2136509

(State of incorporation)

 

(I.R.S. Employer Identification
Number)

 

41 MAIN STREET

CANTON, NORTH CAROLINA  28716

(Address of principal executive office)

 

Registrant’s telephone number, including area code:  828-454-0676

 

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 report), and (2) has been subject to such filing requirements for the past 90 days.

 

Yes o  No ý

 

Indicate by check mark whether the registrant is an accelerated filer (as defined in Rule 12b-2 of the Exchange Act).

 

Yes o No ý

 

The number of common shares outstanding at June 30, 2004 was 10,074,288.

 

 


 

BLUE RIDGE PAPER PRODUCTS INC.

 

AND SUBSIDIARIES

 

INDEX

 

 

 

PAGE NO.

PART 1.

FINANCIAL INFORMATION

 

 

 

 

Item 1.

Condensed Consolidated Balance Sheets, June 30, 2004 (unaudited) and December 31, 2003 (derived from audited financial statements)

3

 

 

 

 

Condensed Consolidated Statements of Operations, Three Months Ended June 30, 2004 and 2003 (unaudited) Six Months Ended June 30, 2004 and 2003 (unaudited)

4

 

 

 

 

Condensed Consolidated Statements of Cash Flows, Six Months Ended June 30, 2004 (unaudited) and June 30, 2003 (unaudited)

5

 

 

 

 

Notes to Condensed Consolidated Financial Statements (unaudited)

6-10

 

 

 

Item 2.

Management’s Discussion and Analysis of Financial Condition and Results of Operations

11-18

 

 

 

Item 3.

Quantitative and Qualitative Disclosures About Market Risk

18

 

 

 

Item 4.

Controls and Procedures

18

 

 

PART II.

OTHER INFORMATION

 

 

 

Item 6.

Exhibits and Reports on Form 8-K

19-20

 

2


 

PART I.  FINANCIAL INFORMATION

 

ITEM 1. FINANCIAL STATEMENTS

 

Blue Ridge Paper Products Inc. and Subsidiaries

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS (UNAUDITED)

 

BLUE RIDGE PAPER PRODUCTS INC.

 

Condensed Consolidated Balance Sheets

June 30, 2004 and December 31, 2003

(Dollars in thousands)

(Unaudited)

 

 

 

June 30,
2004

 

December 31,
2003

 

 

 

 

 

 

 

Assets

 

 

 

 

 

Current assets:

 

 

 

 

 

Cash

 

$

1,575

 

$

2,123

 

Accounts receivable, net of allowance for doubtful accounts and discounts of $2,545 and $2,621 in 2004 and 2003, respectively

 

54,038

 

42,646

 

Inventories

 

50,839

 

59,063

 

Prepaid expenses

 

801

 

1,112

 

Income tax receivable

 

32

 

32

 

Other current assets

 

501

 

—

 

Total current assets

 

107,786

 

104,976

 

Property, plant, and equipment, net

 

190,018

 

192,671

 

Deferred financing costs, net

 

7,007

 

7,443

 

Other assets

 

62

 

62

 

Total assets

 

$

304,873

 

$

305,152

 

 

 

 

 

 

 

Liabilities and Stockholder’s Equity (Deficit)

 

 

 

 

 

 

 

 

 

 

 

Current liabilities:

 

 

 

 

 

Current portion of senior debt

 

$

38

 

$

37

 

Current portion of capital lease obligation

 

484

 

474

 

Accounts payable

 

41,636

 

35,748

 

Accrued expenses and other current liabilities

 

31,791

 

33,109

 

Interest payable

 

1,498

 

1,495

 

Total current liabilities

 

75,447

 

70,863

 

Senior debt, net of current portion

 

148,454

 

134,898

 

Parent Pay-In-Kind (PIK) Senior Subordinated Note

 

38,928

 

37,124

 

Capital lease obligations

 

1,114

 

1,359

 

Pension and postretirement benefits

 

19,802

 

19,109

 

Other liabilities

 

1,983

 

2,824

 

Total liabilities

 

285,728

 

266,177

 

Obligation to redeem ESOP shares

 

35,988

 

32,389

 

Obligation to redeem restricted stock units of Parent

 

2,589

 

2,519

 

Commitments and contingencies (See notes)

 

 

 

 

 

Stockholder’s equity:

 

 

 

 

 

Common stock (par value $0.01, 1000 shares authorized and outstanding in 2004 and 2003, respectively)

 

—

 

—

 

Additional paid-in capital

 

47,271

 

47,344

 

Accumulated deficit

 

(57,363

)

(34,125

)

Unearned compensation

 

—

 

(88

)

Accumulated other comprehensive loss

 

(3,370

)

(3,370

)

 

 

(13,462

)

9,761

 

Receivable from Parent

 

(5,970

)

(5,694

)

Total stockholder’s equity (deficit)

 

(19,432

)

4,067

 

Total liabilities and stockholder’s equity (deficit)

 

$

304,873

 

$

305,152

 

 

See accompanying notes to condensed consolidated financial statements.

 

3


 

BLUE RIDGE PAPER PRODUCTS INC.

 

Condensed Consolidated Statements of Operations

Three and Six Month Period Ended June 30, 2004 and 2003

(Dollars in thousands)

(Unaudited)

 

 

 

Three Month Period Ended
June 30

 

Six Month Period Ended
June 30

 

 

 

2004

 

2003

 

2004

 

2003

 

Net sales

 

$

121,445

 

$

115,398

 

$

242,426

 

$

233,343

 

Cost of goods sold:

 

 

 

 

 

 

 

 

 

Cost of goods sold, excluding depreciation and amortization

 

117,692

 

108,659

 

231,257

 

214,679

 

Depreciation and amortization

 

4,062

 

3,563

 

8,324

 

8,078

 

Gross profit (loss)

 

(309

)

3,176

 

2,845

 

10,586

 

Selling, general and administrative expenses

 

6,545

 

6,373

 

13,124

 

12,335

 

Depreciation and amortization

 

442

 

436

 

900

 

860

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