SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 10-Q
x Quarterly Report under Section 13 or 15(d) of the Securities Exchange Act of 1934
For the quarterly period ended March 31, 2005
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 Number: 333-97721
Vertis, Inc.
(Exact Names of Registrants as Specified in Their Charters)
|
Delaware |
13-3768322 |
|
(State of incorporation) |
(I.R.S. Employer Identification Nos.) |
|
250 West Pratt Street |
|
|
Baltimore, Maryland |
21201 |
|
(Address of Registrant’s Principal Executive Office) |
(Zip Code) |
(410) 528-9800
(Registrant’s telephone number, including area code)
Indicate by check mark whether the Registrants (1) have 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 Registrants were required to file such reports), and (2) have been subject to such filing requirements for the past 90 days
Yes x No o
Indicated by check mark whether the registrant is an accelerated filer (as defined in Rule 12b-2 of the Exchange Act)
Yes o No x
2
Item 1. FINANCIAL STATEMENTS
Vertis, Inc. and Subsidiaries
Condensed Consolidated
Balance Sheets
In thousands, except per share amounts
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March 31, |
|
December 31, |
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|
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2005 |
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2004 |
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|
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(Unaudited) |
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ASSETS |
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Current Assets: |
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|
|
|
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Cash and cash equivalents |
|
$ |
4,958 |
|
|
$ |
2,638 |
|
|
|
Accounts receivable, net |
|
158,685 |
|
|
178,650 |
|
|
||
|
Inventories, net |
|
45,214 |
|
|
44,601 |
|
|
||
|
Maintenance parts, net |
|
20,921 |
|
|
21,017 |
|
|
||
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Prepaid expenses and other current assets |
|
19,007 |
|
|
12,206 |
|
|
||
|
Total current assets |
|
248,785 |
|
|
259,112 |
|
|
||
|
Property, plant and equipment, net |
|
366,127 |
|
|
379,438 |
|
|
||
|
Goodwill |
|
263,283 |
|
|
359,865 |
|
|
||
|
Deferred financing costs, net |
|
25,045 |
|
|
26,815 |
|
|
||
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Other assets, net |
|
23,950 |
|
|
24,565 |
|
|
||
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Total assets |
|
$ |
927,190 |
|
|
$ |
1,049,795 |
|
|
|
LIABILITIES AND STOCKHOLDER’S DEFICIT |
|
|
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Current Liabilities: |
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|
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Accounts payable |
|
$ |
191,500 |
|
|
$ |
243,905 |
|
|
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Compensation and benefits payable |
|
38,952 |
|
|
36,975 |
|
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Accrued interest |
|
42,154 |
|
|
13,550 |
|
|
||
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Accrued income taxes |
|
10,577 |
|
|
10,294 |
|
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Current portion of long-term debt |
|
6 |
|
|
6 |
|
|
||
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Other current liabilities |
|
28,251 |
|
|
27,120 |
|
|
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Total current liabilities |
|
311,440 |
|
|
331,850 |
|
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||
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Due to parent |
|
5,041 |
|
|
7,410 |
|
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||
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Long-term debt, net of current portion |
|
1,054,798 |
|
|
1,024,042 |
|
|
||
|
Other long-term liabilities |
|
34,394 |
|
|
35,053 |
|
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Total liabilities |
|
1,405,673 |
|
|
1,398,355 |
|
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Stockholder’s deficit: |
|
|
|
|
|
|
|
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Common stock—authorized 3,000 shares; $0.01 par value; issued and outstanding 1,000 shares |
|
|
|
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|
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Contributed capital |
|
409,051 |
|
|
409,059 |
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Accumulated deficit |
|
(883,589 |
) |
|
(753,661 |
) |
|
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Accumulated other comprehensive loss |
|
(3,945 |
) |
|
(3,958 |
) |
|
||
|
Total stockholder’s deficit |
|
(478,483 |
) |
|
(348,560 |
) |
|
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Total liabilities and stockholder’s deficit |
|
$ |
927,190 |
|
|
$ |
1,049,795 |
|
|
See Notes to Condensed Consolidated Financial Statements.
3
Vertis, Inc. and Subsidiaries
Condensed Consolidated
Statements of Operations
In thousands
|
Three Months Ended March 31, |
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|
|
2005 |
|
2004 |
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(Unaudited) |
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Net sales |
|
$ |
385,826 |
|
$ |
390,618 |
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Operating expenses: |
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|
|
|
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Costs of production |
|
308,818 |
|
301,588 |
|
||||
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Selling, general and administrative |
|
47,325 |
|
46,910 |
|
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|
Restructuring charges |
|
10,008 |
|
862 |
|
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Goodwill impairment loss |
|
97,790 |
|
|
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Depreciation and amortization of intangibles |
|
17,303 |
|
19,069 |
|
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|
|
|
481,244 |
|
368,429 |
|
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Operating (loss) income |
|
(95,418 |
) |
22,189 |
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Other expenses (income): |
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|
|
|
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Interest expense, net |
|
32,287 |
|
32,717 |
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||||
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Other, net |
|
1,965 |
|
502 |
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