UNITED STATES
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, 2004
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 No.) |
1801 Bayberry Court, Suite 200
Richmond, Virginia 23226
(Address of principal executive offices including zip code)
(804) 287-5680
(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 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 ¨ No x
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, 2004 | |
| Common Stock, $0.50 Par Value | 9,136,135 |
CADMUS COMMUNICATIONS CORPORATION AND SUBSIDIARIES
INDEX
2
CADMUS COMMUNICATIONS CORPORATION AND SUBSIDIARIES
CONDENSED CONSOLIDATED BALANCE SHEETS
(In thousands, except share data)
| March 31, 2004 |
June 30, 2003 |
|||||||
| (Unaudited) | ||||||||
| ASSETS |
||||||||
| Current assets: |
||||||||
| Cash and cash equivalents |
$ | 1,557 | $ | 566 | ||||
| Accounts receivable (net of allowance for doubtful accounts of $1,881 at March 31, 2004 and $2,089 at June 30, 2003) |
55,200 | 30,123 | ||||||
| Inventories |
20,683 | 22,347 | ||||||
| Deferred income taxes |
2,043 | 1,981 | ||||||
| Prepaid expenses and other |
5,038 | 6,947 | ||||||
| Total current assets |
84,521 | 61,964 | ||||||
| Property, plant, and equipment, net |
102,940 | 107,853 | ||||||
| Assets held for sale |
455 | 842 | ||||||
| Goodwill |
109,884 | 109,884 | ||||||
| Other intangibles, net |
4,300 | 4,871 | ||||||
| Other assets |
20,976 | 19,512 | ||||||
| TOTAL ASSETS |
$ | 323,076 | $ | 304,926 | ||||
| LIABILITIES AND SHAREHOLDERS’ EQUITY |
||||||||
| Current liabilities: |
||||||||
| Current maturities of long-term debt |
$ | — | $ | 12,800 | ||||
| Accounts payable |
28,216 | 33,681 | ||||||
| Accrued expenses and other current liabilities |
30,716 | 31,255 | ||||||
| Restructuring reserve |
186 | 1,110 | ||||||
| Total current liabilities |
59,118 | 78,846 | ||||||
| Long-term debt, less current maturities |
162,782 | 134,005 | ||||||
| Long-term pension liability |
40,227 | 36,855 | ||||||
| Other long-term liabilities |
20,301 | 22,812 | ||||||
| Total liabilities |
282,428 | 272,518 | ||||||
| Shareholders’ equity: |
||||||||
| Common stock ($0.50 par value; authorized shares-16,000,000 shares; issued and outstanding shares- 9,125,408 at March 31, 2004 and 9,049,592 at June 30, 2003) |
4,563 | 4,525 | ||||||
| Capital in excess of par value |
69,039 | 68,342 | ||||||
| Unearned compensation |
(358 | ) | (514 | ) | ||||
| Accumulated deficit |
(7,815 | ) | (15,157 | ) | ||||
| Accumulated other comprehensive income (loss): |
||||||||
| Foreign currency translation |
7 | — | ||||||
| Minimum pension liability |
(24,788 | ) | (24,788 | ) | ||||
| Total shareholders’ equity |
40,648 | 32,408 | ||||||
| TOTAL LIABILITIES AND SHAREHOLDERS’ EQUITY |
$ | 323,076 | $ | 304,926 | ||||
See accompanying Notes to Condensed Consolidated Financial Statements.
3
CADMUS COMMUNICATIONS CORPORATION AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF INCOME
(In thousands, except per share data)
(Unaudited)
| Three Months Ended March 31, |
Nine Months Ended March 31, |
||||||||||||
| 2004 |
2003 |
2004 |
2003 |
||||||||||
| Net sales |
$ | 113,619 | $ | 113,437 | $ | 335,847 | $ | 332,558 | |||||
| Operating expenses: |
|||||||||||||
| Cost of sales |
92,322 | 91,313 | 274,577 | 269,229 | |||||||||
| Selling and administrative |
12,105 | 13,536 | 36,089 | 39,245 | |||||||||
| Restructuring and other charges |
120 | 1,130 | 221 | 10,051 | |||||||||
| 104,547 | 105,979 | 310,887 | 318,525 | ||||||||||
| Operating income |
9,072 | 7,458 | 24,960 | 14,033 | |||||||||
| Interest and other expenses: |
|||||||||||||
| Interest |
3,649 | 3,617 | 10,700 | 11,072 | |||||||||
| Securitization costs |
41 | 131 | 296 | 495 | |||||||||
| Other, net |
142 | 133 | 293 | 264 | |||||||||
| 3,832 | 3,881 | 11,289 | 11,831 | ||||||||||
| Income before income taxes and cumulative effect of a change in accounting principle |
5,240 | 3,577 | 13,671 | 2,202 | |||||||||
| Income tax expense |
1,704 | 1,405 | 4,965 | 1,239 | |||||||||
| Income before cumulative effect of a change in accounting principle |
3,536 | 2,172 | 8,706 | 963 | |||||||||
| Cumulative effect of a change in accounting principle |
— | — | — | (56,301 | ) | ||||||||
| Net income (loss) |
$ | 3,536 | $ | 2,172 | $ | 8,706 | $ | (55,338 | ) | ||||
| Earnings per common share - basic |
|||||||||||||
| Income before cumulative effect of a change in accounting principle |
$ | 0.39 | $ | 0.24 | $ | 0.96 | $ | 0.11 | |||||
| Cumulative effect of a change in accounting principle |
— | — | — | (6.25 | ) | ||||||||
| Net income (loss) per share |
$ | 0.39 | $ | 0.24 | $ | 0.96 | $ | (6.14 | ) | ||||
| Weighted-average common shares outstanding |
9,103 | 9,007 | 9,077 | 9,006 | |||||||||
| Earnings per common share - diluted |
|||||||||||||
| Income before cumulative effect of a change in accounting principle |
$ | 0.38 | $ | 0.24 | $ | 0.94 | $ | 0.11 | |||||
| Cumulative effect of a change in accounting principle |
— | — | — | (6.24 | ) | ||||||||
| Net income (loss) per share |
$ | 0.38 | $ | 0.24 | $ | 0.94 | $ | (6.13 | ) | ||||
| Weighted-average common shares outstanding |
9,289 | 9,034 | 9,210 | 9,024 | |||||||||
| Cash dividends per common share |
$ | 0.05 | $ | 0.05 | $ | 0.15 | $ | 0.15 | |||||
See accompanying Notes to Condensed Consolidated Financial Statements.
4
CADMUS COMMUNICATIONS CORPORATION AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(In thousands)
(Unaudited)
| Nine Months Ended March 31, |
||||||||
| 2004 |
2003 |
|||||||
| Operating Activities |
||||||||
| Net income (loss) |
$ | 8,706 | $ | (55,338 | ) | |||
| Adjustments to reconcile net income (loss) to net cash provided by operating activities: |
||||||||
| Depreciation and amortization |
14,936 | 14,527 | ||||||
| Cumulative effect of a change in accounting principle |
— | 56,301 | ||||||
| Restructuring and other |
221 | 10,051 | ||||||
| Other, net |
(669 | ) | 955 | |||||
| 23,194 | 26,496 | |||||||
| Changes in operating assets and liabilities: |
||||||||
| Accounts receivable |
1,580 | 1,876 | ||||||
| Inventories |
1,664 | (1,623 | ) | |||||
| Accounts payable and accrued expenses |
1,782 | 4,219 | ||||||
| Restructuring payments |
(1,145 | ) | (2,974 | ) | ||||
| Contributions to defined benefit pension plans |
(8,748 | ) | (5,293 | ) | ||||
| Other, net |
2,402 | 244 | ||||||
| (2,465 | ) | (3,551 | ) | |||||
| Net cash provided by operating activities |
20,729 | 22,945 | ||||||
| Investing Activities |
||||||||
| Purchases of property, plant, and equipment |
(9,996 | ) | (9,559 | ) | ||||
| Proceeds from sales of property, plant, and equipment |
844 | 3,350 | ||||||
| Net cash used in investing activities |
(9,152 | ) | (6,209 | ) | ||||
| Financing Activities |
||||||||
| Net payments on receivables securitization program |
(26,657 | ) | (3,310 | ) | ||||
| Proceeds from (payments on) long-term revolving credit facility |
16,700 | (11,500 | ) | |||||
| Dividends paid |
||||||||