|
Delaware
(State or other jurisdiction of
incorporation or organization) |
82-0429330
(I.R.S. Employer
Identification No.) |
|
PART I. FINANCIAL INFORMATION |
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| ||
ITEM 1. |
Financial Statements (Unaudited): |
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| ||
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ITEM 2. |
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ITEM 6. |
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FIBERMARK, INC.
Condensed Consolidated Statements of Operations
Three Months Ended March 31, 2004 and 2003
(In thousands, except per share amounts)
Unaudited |
|||||||
2004 |
2003 |
||||||
Net sales |
$ |
112,428 |
$ |
105,314 |
|||
Cost of sales |
91,184 |
85,129 |
|||||
Gross profit |
21,244 |
20,185 |
|||||
Selling, general and administrative expenses |
12,088 |
12,238 |
|||||
Income from operations |
9,156 |
7,947 |
|||||
Foreign exchange transaction gain |
(227 |
) |
(16 |
) | |||
Other (income) expense, net |
736 |
(43 |
) | ||||
Interest expense, net (excluding post-petition contractual interest of $92 in 2004) |
8,948 |
8,699 |
|||||
Reorganization expense |
11,985 |
- |
|||||
Loss before income taxes |
(12,286 |
) |
(693 |
) | |||
Income tax expense |
4,564 |
4,710 |
|||||
Net loss |
$ |
(16,850 |
) |
$ |
(5,403 |
) | |
Basic loss per share |
$ |
(2.38 |
) |
$ |
(0.76 |
) | |
Diluted loss per share |
$ |
(2.38 |
) |
$ |
(0.76 |
) | |
Weighted average basic shares outstanding |
7,066 |
7,066 |
|||||
Weighted average diluted shares outstanding |
7,066 |
7,066 |
|||||
See accompanying notes to condensed consolidated financial statements. |
|
FIBERMARK, INC.
Condensed Consolidated Balance Sheets
(In thousands, except share and per share amounts)
Unaudited |
|||||||
March 31,
2004 |
December 31,
2003 |
||||||
ASSETS |
|||||||
Current assets: |
|||||||
Cash |
$ |
14,025 |
$ |
6,111 |
|||
Accounts receivable, net of allowances |
61,784 |
53,752 |
|||||
Inventories |
66,129 |
63,443 |
|||||
Prepaid expenses |
2,443 |
1,671 |
|||||
Total current assets |
144,381 |
124,977 |
|||||
Property, plant and equipment, net |
243,617 |
248,194 |
|||||
Goodwill |
8,440 |
8,602 |
|||||
Other intangible assets, net |
3,630 |
12,745 |
|||||
Other long-term assets |
1,548 |
1,601 |
|||||
Other pension assets |
3,457 |
3,588 |
|||||
Total assets |
$ |
405,073 |
$ |
399,707 |
|||
LIABILITIES AND STOCKHOLDERS DEFICIT |
|||||||
Current liabilities: |
|||||||
Revolving credit line |
$ |
23,966 |
$ |
5,906 |
|||
Current portion of long-term debt |
- |
3,955 |
|||||
Accounts payable |
18,823 |
23,168 |
|||||
Accrued liabilities |
16,708 |
22,013 |
|||||
Accrued income taxes payable |
5,833 |
9,930 |
|||||
Deferred income taxes |
639 |
656 |
|||||
Total current liabilities not subject to compromise |
65,969 |
65,628 |
|||||
Long-term liabilities: |
|||||||
Long-term debt |
- |
338,749 |
|||||
Deferred income taxes |
15,134 |
15,528 |
|||||
Other long-term liabilities |
44,654 |
48,654 |
|||||
Total long-term liabilities not subject to compromise |
59,788 |
402,931 |
|||||
Liabilities subject to compromise |
367,521 |
- |
|||||
Total liabilities |
493,278 |
468,559 |
|||||
Stockholders deficit |
|||||||
Preferred stock, par value $.001 per share; |
|||||||
2,000,000 shares authorized, and none issued |
- |
- |
|||||
Series A Junior participatory preferred stock, par value $.001; |
|||||||
7,066 shares authorized, and none issued |
- |
- |
|||||
Common stock, par value $.001 per share; 20,000,000 shares authorized |
|||||||
7,070,026 shares issued and 7,066,226 shares outstanding in 2004 and 2003 |
7 |
7 |
|||||
Additional paid-in capital |
65,496 |
65,496 |
|||||
Accumulated deficit |
(165,961 |
) |
(149,111 |
) | |||
Accumulated other comprehensive income |
12,288 |
14,791 |
|||||
Less treasury stock, 3,800 shares at cost in 2004 and 2003 |
(35 |
) |
(35 |
) | |||
Total stockholders deficit |
(88,205 |
) |
(68,852 |
) | |||
Total liabilities and stockholders deficit |
$ |
405,073 |
$ |
399,707 |
|||
See accompanying notes to condensed consolidated financial statements. |
|
FIBERMARK, INC.
Condensed Consolidated Statements of Cash Flows
Three Months Ended March 31, 2004 and 2003
(In thousands)
Unaudited |
|||||||
2004 |
2003 |
||||||
Cash flows from operating activities: |
|||||||
Net loss |
$ |
(16,850 |
) |
$ |
(5,403 |
) | |
Adjustments to reconcile net loss to net cash provided by (used in) operating activities: |
|||||||
Depreciation and amortization |
4,663 |
4,150 |
|||||
Amortization of bond discount |
43 |
43 |
|||||
Amortization of deferred gain |
- |
(222 |
) | ||||
Loss on disposal of intangible assets |
- |
35 |
|||||
Deferred income taxes |
3 |
134 |
|||||
Reorganization costs |
11,985 |
- |
|||||
Reorganization payments |
(1,993 |
) |
- |
||||
Changes in operating assets and liabilities: |
|||||||
Accounts receivable |
(9,028 |
) |
(4,163 |
) | |||
Inventories |
(3,293 |
) |
(2,053 |
) | |||
Prepaid expenses |
(777 |
) |
(325 |
) | |||
Other long-term assets |
156 |
5 |
|||||
Accounts payable |
1,423 |
(3,407 |
) | ||||
Accrued liabilities |
10,439 |
10,208 |
|||||
Accrued income taxes payable |
(3,964 |
) |
1,032 |
||||
Other long-term liabilities |
25 |
(59 |
) | ||||
Net cash used in operating activities |
(7,168 |
) |
(25 |
) | |||
Cash flows used for investing activities: |
|||||||
Additions to property, plant and equipment |
(1,952 |
) |
(9,608 |
) | |||
Decrease in other intangible assets |
27 |
- |
|||||
Net cash used in investing activities |
(1,925 |
) |
(9,608 |
) | |||
Cash flows from financing activities: |
|||||||
Proceeds from issuance of debt |
- |
5,595 |
|||||
Net borrowings under revolving credit line |
18,745 |
- |
|||||
Repayment of debt |
(778 |
) |
(1,927 |
) | |||
Debt issuance costs |
(112 |
) |
- |
||||
Debt issuance costs due to reorganization |
(350 |
) |
- |
||||
Net cash provided by financing activities |
17,505 |
3,668 |
|||||
Effect of exchange rate changes on cash |
(498 |
) |
684 |
||||
Net increase (decrease) in cash |
7,914 |
(5,281 |
) | ||||
Cash at beginning of period |
6,111 |
35,567 |
|||||
Cash at end of period |
$ |
14,025 |
$ |
30,286 |
|||
Supplemental cash flow information: |
|||||||
Interest paid |
$ |
311 |
$ |
397 |
|||
Income taxes paid |
$ |
7,909 |
$ |
3,564 |
|||
See accompanying notes to condensed consolidated financial statements. |
|
March 31, 2003 |
||||
Net sales |
$ |
648 |
||
Cost of sales |
664 |
|||
Foreign exchange transaction gain |
16 |
3. | Changes in Accounting Principles and Recently Issued Standards |
4. | Earnings (Loss) Per Common Share |
Three Months Ended March 31, | ||||||
|
| |||||
|
|
2004 |
|
|
2003 |
|
Numerator: |
|
|
|
|
|
|
Loss available to common shareholders used in basic and diluted loss per share |
$ |
(16,850 |
) |
$ |
(5,403 |
) |
|
|
| ||||
Denominator: |
|
|
|
|
|
|
Denominator for basic loss per share: |
|
|
|
|
|
|
Weighted average shares |
|
7,066,226 |
|
|
7,066,226 |
|
|
|
|
|
|
|
|
Effect of dilutive securities: |
|
|
|
|
|
|
Fixed stock options |
|
* |
|
|
* |
|
|
|
| ||||
Denominator for diluted loss per share: |
|
|
|
|
|
|
Adjusted weighted average shares |
|
7,066,226 |
|
|
7,066,226 |
|
|
|
|
|
|
|
|
Basic loss per share |
$ |
(2.38 |
) |
$ |
(0.76 |
) |
|
|
|
|
|
|
|
Diluted loss per share |
$ |
(2.38 |
) |
$ |
(0.76 |
) |
Three Months Ended March 31, | |||||||
2004 |
2003 |
||||||
Net loss, as reported |
$ |
(16,850 |
) |
$ |
(5,403 |
) | |
Total stock based employee compensation expense determined under fair value method |
( 112 |
) |
( 155 |
) | |||
Net loss, pro forma |
$ |
(16,962 |
) |
$ |
(5,558 |
) | |
Basic loss per share, as reported |
$ |
(2.38 |
) |
$ |
(0.76 |
) | |
Basic loss per share, pro forma |
$ |
(2.40 |
) |
$ |
(0.79 |
) | |
Diluted loss per share, as reported |
$ |
(2.38 |
) |
$ |
(0.76 |
) | |
Diluted loss per share, pro forma |
$ |
(2.40 |
) |
$ |
(0.79 |
) |
6. | Comprehensive Income (Loss) |
Three Months Ended March 31, | |||||||
2004 |
2003 |
||||||
Net loss |
$ |
(16,850 |
) |
$ |
(5,403 |
) | |
Currency translation adjustment, net |
|
(2,503 |
) |
|
2,768 |
| |
Comprehensive loss |
$ |
(19,353 |
) |
$ |
(2,635 |
) |
7. | Inventories |
March 31, 2004 |
December 31, 2003 | ||
Raw material |
$ 21,384 |
$ 19,244 | |
Work in progress |
19,718 |
18,233 | |
Finished goods |
16,175 |
16,844 | |
Finished goods on consignment |
3,572 |
3,432 | |
Stores inventory |
4,106 |
4,067 | |
Operating supplies |
1,174 |
1,623 | |
Total inventories |
$ 66,129 |
$ 63,443 |
8. | Goodwill and Other Intangible Assets |
Gross Carrying Value |
Accumulated Amortization | ||||||
March 31,
2004 |
Dec. 31,
2003 |
March 31,
2004 |
Dec. 31,
2003 | ||||
Amortizable intangible assets: |
|||||||
Debt issue costs |
$ 2,113 |
$ 16,734 |
$ 401 |
$ 6,070 | |||
Acquired technology |
846 |
846 |
53 |
42 | |||
Other |
1,640 |
1,645 |
515 |
368 | |||
Total amortizable intangible assets |
$ 4,599 |
$ 19,225 |
$ 969 |
$ 6,480 |
Three Months Ended March 31, 2004 |
Three Months Ended March 31, 2003 |
||||||||||||||||||
Operating Segments |
Operating Segments |
||||||||||||||||||
German |
North American
Operations |
Total |
German
Operations |
North American
Operations |
Total |
||||||||||||||
Office products |
$ |
- |
$ |
19,652 |
$ |
19,652 |
$ |
- |
$ |
19,464 |
$ |
19,464 |
|||||||
Publishing and packaging |
- |
23,364 |
23,364 |
- |
23,320 |
23,320 |
|||||||||||||
Technical specialties |
55,565 |
13,847 |
69,412 |
48,367 |
14,163 |
62,530 |
|||||||||||||
$ |
55,565 |
$ |
56,863 |
$ |
112,428 |
$ |
48,367 |
$ |
56,947 |
$ |
105,314 |
Three Months Ended March 31, 2004 |
Three Months Ended March 31, 2003 |
||||||||||||||||||
Operating Segments |
Operating Segments |
||||||||||||||||||
German
Operations |
North American
Operations |
Total |
German
Operations |
North American
Operations |
Total |
||||||||||||||
Total sales |
$ |
56,326 |
$ |
57,851 |
$ |
114,177 |
$ |
48,367 |
$ |
57,568 |
$ |
105,935 |
|||||||
Less: inter-segment net sales |
(761 |
) |
(988 |
) |
(1,749 |
) |
- |
(621 |
) |
(621 |
) | ||||||||
Total net sales |
$ |
55,565 |
$ |
56,863 |
$ |
112,428 |
$ |
48,367 |
$ |
56,947 |
$ |
105,314 |
|||||||
Income (loss) from operations |
$ |
11,174 |
$ |
(2,018 |
) |
$ |
9,156 |
$ |
10,117 |
$ |
(2,170 |
) |
$ |
7,947 |
|||||
Depreciation and amortization |
$ |
1,290 |
$ |
3,373 |
$ |
4,663 |
$ |
1,070 |
$ |
3,080 |
$ |
4,150 |
10. | Restructuring Expense |
Balance
December 31, 2003 |
Expense |
Payments |
Balance
March 31, 2004 | |
Severance costs |
$ 1,475 |
$ 0 |
$ 253 |
$ 1,222 |
Pension Benefits |
Post-retirement Benefits |
||||||||||||
2004 |
2003 |
2004 |
2003 |
||||||||||
Service cost |
$ |
341,000 |
$ |
269,000 |
$ |
91,000 |
$ |
83,000 |
|||||
Interest cost |
744,000 |
696,000 |
195,000 |
190,000 |
|||||||||
Return on asset |
(339,000 |
) |
(278,000 |
) |
- |
- |
|||||||
Net amortization & deferrals: |
|||||||||||||
Unrecognized transition obligation |
- |
1,000 |
- |
- |
|||||||||
Unrecognized prior service cost |
103,000 |
103,000 |
2,000 |
1,000 |
|||||||||
Unrecognized net loss |
275,000 |
236,000 |
37,000 |
30,000 |
|||||||||
Recognized settlement loss |
190,000 |
- |
- |
- |
|||||||||
Net periodic benefit cost |
$ |
1,314,000 |
$ |
1,027,000 |
$ |
325,000 |
$ |
304,000 |
Professional fees |
$ 1,993,000 |
|||
Write-off of unamortized bond discount |
1,217,000 |
|||
Write-off of deferred finance costs |
8,775,000 |
|||
Reorganization expenses |
$ |
11,985,000 |
Quarter ended March 31, 2004 |
||||
Net sales |
$ 53,325 |
|||
Cost of sales |
46,982 |
|||
Gross profit |
6,343 |
|||
Selling, general and administrative expenses |
8,610 |
|||
Loss from operations |
(2,267 |
) | ||
Other expense, net |
800 |
|||
Interest expense, net |
9,037 |
|||
Equity in income from subsidiaries |
(7,239 |
) | ||
Reorganization expense |
11,985 |
|||
Loss before income taxes |
(16,850 |
) | ||
Income tax expense |
- |
|||
Net loss |
$ |
(16,850 |
) |
|
ASSETS |
March 31, 2004 |
December 31, 2003 |
|||||
Current assets: |
|||||||
Cash |
$ |
5,128 |
$ |
- |
|||
Accounts receivable, net of allowances |
21,521 |
18,451 |
|||||
Inventories |
39,627 |
36,168 |
|||||
Prepaid expenses |
2,115 |
1,293 |
|||||
Total current assets |
68,391 |
55,912 |
|||||
Property, plant and equipment, net |
143,463 |
145,692 |
|||||
Intercompany receivable |
3,601 |
3,530 |
|||||
Investment in subsidiaries |
89,140 |
115,888 |
|||||
Other long-term assets |
5,820 |
14,905 |
|||||
Total assets |
$ |
310,415 |
$ |
335,927 |
|||
LIABILITIES AND STOCKHOLDERS DEFICIT |
|||||||
Current liabilities: |
|||||||
Revolving credit line |
$ |
- |
$ |
2,753 |
|||
Current portion of long-term debt |
- |
3,955 |
|||||
Accounts payable |
4,589 |
11,423 |
|||||
Accrued liabilities |
8,985 |
15,040 |
|||||
Accrued income taxes payable |
311 |
376 |
|||||
Total current liabilities not subject to compromise |
13,885 |
33,547 |
|||||
Long-term liabilities: |
|||||||
Long-term debt |
- |
338,749 |
|||||
Other long-term liabilities |
19,416 |
33,266 |
|||||
Total long-term liabilities not subject to compromise |
19,416 |
372,015 |
|||||
Liabilities subject to compromise |
367,521 |
- |
|||||
Total liabilities |
400,822 |
405,562 |
|||||
Stockholders deficit |
(90,407 |
) |
(69,635 |
) | |||
Total liabilities and stockholders deficit |
$ |
310,415 |
$ |
335,927 |
|
Net cash used in operating activities |
$ |
(10,358 |
) | |
Net cash used in investing activities |
(441 |
) | ||
Net cash provided by financing activities |
16,881 |
|||
Effect of exchange rates on cash |
(954 |
) | ||
Increase in cash and cash equivalents |
5,128 |
|||
Cash at beginning of period |
- |
|||
Cash at end of period |
$ |
5,128 |
Accounts payable |
$ |
5,438 |
||
Accrued interest payable (formerly included in accrued liabilities) |
15,537 |
|||
Long-term debt |
343,186 |
|||
Other long-term liabilities |
3,360 |
|||
Liabilities subject to compromise |
$ |
367,521 |
CONSOLIDATING STATEMENTS OF OPERATIONS |
Three Months Ended March 31, 2004 | ||||||||||||
|
Guarantor |
Non-Guarantor |
Eliminations |
Consolidated FiberMark, Inc. |
|||||||||
Net sales |
$ |
56,863 |
$ |
55,565 |
$ |
- |
$ |
112,428 |
|||||
Cost of sales |
49,803 |
41,381 |
- |
91,184 |
|||||||||
Gross profit |
7,060 |
14,184 |
- |
21,244 |
|||||||||
Selling, general and administrative expenses |
9,078 |
3,010 |
- |
12,088 |
|||||||||
Income (loss) from operations |
(2,018 |
) |
11,174 |
- |
9,156 |
||||||||
Foreign exchange transaction gain |
- |
(227 |
) |
- |
(227 |
) | |||||||
Other (income) expense, net |
793 |
(57 |
) |
- |
736 |
||||||||
Equity in subsidiary income |
(7,122 |
) |
- |
7,122 |
- |
||||||||
Interest expense |
9,109 |
126 |
(287 |
) |
8,948 |
||||||||
Interest income |
- |
(287 |
) |
287 |
- |
||||||||
Reorganization expense |
11,985 |
- | - |
11,985 |
|||||||||
Income (loss) before income taxes |
(16,783 |
) |
11,619 |
(7,122 |
) |
(12,286 |
) | ||||||
Income tax expense |
67 |
4,497 |
- |
4,564 |
|||||||||
Net income (loss) |
$ |
(16,850 |
) |
$ |
7,122 |
$ |
(7,122 |
) |
$ |
(16,850 |
) |
CONSOLIDATING STATEMENTS OF OPERATIONS |
Three Months Ended March 31, 2003 |
||||||||||||
|
Guarantor |
Non-Guarantor |
Eliminations |
Consolidated FiberMark, Inc. |
|||||||||
Net sales |
$ |
56,947 |
$ |
48,367 |
$ |
- |
$ |
105,314 |
|||||
Cost of sales |
49,265 |
35,864 |
- |
85,129 |
|||||||||
Gross profit |
7,682 |
12,503 |
- |
20,185 |
|||||||||
Selling, general and administrative expenses |
9,852 |
2,386 |
- |
12,238 |
|||||||||
Income (loss) from operations |
(2,170 |
) |
10,117 |
- |
7,947 |
||||||||
Foreign exchange transaction gain |
- |
(16 |
) |
- |
(16 |
) | |||||||
Other (income) expense, net |
354 |
(397 |
) |
- |
(43 |
) | |||||||
Equity in subsidiary income |
(5,724 |
) |
- |
5,724 |
- |
||||||||
Interest expense |
8,799 |
331 |
(331 |
) |
8,799 |
||||||||
Interest income |
(331 |
) |
(100 |
) |
331 |
(100 |
) | ||||||
Income (loss) before income taxes |
(5,268 |
) |
10,299 |
(5,724 |
) |
(693 |
) | ||||||
Income tax expense |
135 |
4,575 |
- |
4,710 |
|||||||||
Net income (loss) |
$ |
(5,403 |
) |
$ |
5,724 |
$ |
(5,724 |
) |
$ |
(5,403 |
) |
|
CONSOLIDATING BALANCE SHEETS |
March 31, 2004 |
||||||||||||
Consolidated |
|||||||||||||
ASSETS |
Guarantor |
Non-Guarantor |
Eliminations |
FiberMark, Inc. |
|||||||||
Current assets: |
|||||||||||||
Cash |
$ |
7,072 |
$ |
6,953 |
$ |
- |
$ |
14,025 |
|||||
Accounts receivable, net of allowances |
24,931 |
36,858 |
(5 |
) |
61,784 |
||||||||
Inventories |
43,033 |
23,096 |
- |
66,129 |
|||||||||
Prepaid expenses |
2,280 |
163 |
- |
2,443 |
|||||||||
Total current assets |
77,316 |
67,070 |
(5 |
) |
144,381 |
||||||||
Property, plant and equipment, net |
145,670 |
97,947 |
- |
243,617 |
|||||||||
Goodwill, net |
2,450 |
5,990 |
- |
8,440 |
|||||||||
Investment in subsidiaries |
83,916 |
32 |
(83,948 |
) |
- |
||||||||
Other intangible assets, net |
2,363 |
1,267 |
- |
3,630 |
|||||||||
Other long-term assets |
- |
1,548 |
- |
1,548 |
|||||||||
Other pension assets |
3,457 |
- |
- |
3,457 |
|||||||||
Total assets |
$ |
315,172 |
$ |
173,854 |
$ |
(83,953 |
) |
$ |
405,073 |
||||
LIABILITIES AND STOCKHOLDERS' EQUITY (DEFICIT) |
|||||||||||||
Current liabilities: |
|||||||||||||
Revolving credit line | $ | - | $ | 23,966 | $ | - | $ | 23,966 | |||||
Accounts payable |
6,857 |
11,983 |
(17 |
) |
18,823 |
||||||||
Accrued liabilities |
9,034 |
7,674 |
- |
16,708 |
|||||||||
Accrued income taxes payable |
463 |
5,370 |
- |
5,833 |
|||||||||
Deferred income taxes |
- |
639 |
- |
639 |
|||||||||
Total current liabilities not subject to compromise |
16,354 |
49,632 |
(17 |
) |
65,969 |
||||||||
Long-term liabilities: |
|||||||||||||
Long-term debt, less current portion |
- |
- |
- |
- |
|||||||||
Intercompany notes payable |
- |
(1,697 |
) |
1,697 |
- |
||||||||
Deferred income taxes |
86 |
15,048 |
- |
15,134 |
|||||||||
Other long-term liabilities |
19,416 |
25,238 |
- |
44,654 |
|||||||||
Total long-term liabilities not subject to compromise |
19,502 |
38,589 |
1,697 |
59,788 |
|||||||||
Liabilities subject to compromise |
367,521 |
- |
- |
367,521 |
|||||||||
Total liabilities |
403,377 |
88,221 |
1,680 |
493,278 |
|||||||||
Stockholders' equity (deficit): |
|||||||||||||
Preferred stock |
- |
- |
- |
- |
|||||||||
Common stock |
7 |
32 |
(32 |
) |
7 |
||||||||
Additional paid-in capital |
65,496 |
3,256 |
(3,256 |
) |
65,496 |
||||||||
Retained earnings (Accumulated deficit) |
(165,961 |
) |
69,341 |
(69,341 |
) |
(165,961 |
) | ||||||
Accumulated other comprehensive income |
12,288 |
13,004 |
(13,004 |
) |
12,288 |
||||||||
Less treasury stock |
(35 |
) |
- |
- |
(35 |
) | |||||||
Total stockholders' equity (deficit) |
(88,205 |
) |
85,633 |
(85,633 |
) |
(88,205 |
) | ||||||
Total liabilities and stockholders' equity (deficit) |
$ |
315,172 |
$ |
173,854 |
$ |
(83,953 |
) |
$ |
405,073 |
||||
|
CONSOLIDATING BALANCE SHEETS |
December 31, 2003 |
||||||||||||
ASSETS |
Guarantor |
|
Non-Guarantor |
|
Eliminations |
|
Consolidated
FiberMark, Inc. |
||||||
Current assets: |
|||||||||||||
Cash |
$ |
(986 |
) |
$ |
7,097 |
$ |
- |
$ |
6,111 |
||||
Accounts receivable, net of allowances |
21,553 |
32,200 |
(1 |
) |
53,752 |
||||||||
Inventories |
39,066 |
24,377 |
- |
63,443 |
|||||||||
Prepaid expenses |
1,497 |
174 |
- |
1,671 |
|||||||||
Total current assets |
61,130 |
63,848 |
(1 |
) |
124,977 |
||||||||
Property, plant and equipment, net |
147,916 |
100,278 |
- |
248,194 |
|||||||||
Goodwill, net |
2,454 |
6,148 |
- |
8,602 |
|||||||||
Intercompany note receivable |
- |
11,209 |
(11,209 |
) |
- |
||||||||
Investment in subsidiaries |
109,779 |
20 |
(109,799 |
) |
- |
||||||||
Other intangible assets, net |
11,317 |
1,428 |
- |
12,745 |
|||||||||
Other long-term assets |
- |
1,601 |
- |
1,601 |
|||||||||
Other pension assets |
3,588 |
- |
- |
3,588 |
|||||||||
Total assets |
$ |
336,184 |
$ |
184,532 |
$ |
(121,009 |
) |
$ |
399,707 |
||||
LIABILITIES AND STOCKHOLDERS' EQUITY (DEFICIT) |
|||||||||||||
Current liabilities: |
|||||||||||||
Revolving credit line |
$ |
2,753 |
$ |
3,153 |
$ |
- |
$ |
5,906 |
|||||
Current portion of long-term debt |
3,955 |
- |
- |
3,955 |
|||||||||
Accounts payable |
10,551 |
12,620 |
(3 |
) |
23,168 |
||||||||
Accrued liabilities |
14,747 |
7,266 |
- |
22,013 |
|||||||||
Accrued income taxes payable |
932 |
8,998 |
- |
9,930 |
|||||||||
Deferred income taxes |
- |
656 |
- |
656 |
|||||||||
Total current liabilities |
32,938 |
32,693 |
(3 |
) |
65,628 |
||||||||
Long-term liabilities: |
|||||||||||||
Long-term debt, less current portion |
338,749 |
- |
- |
338,749 |
|||||||||
Intercompany notes payable |
10,361 |
(1,742 |
) |
(8,619 |
) |
- |
|||||||
Deferred income taxes |
83 |
15,445 |
- |
15,528 |
|||||||||
Other long-term liabilities |
22,905 |
25,749 |
- |
48,654 |
|||||||||
Total long-term liabilities |
372,098 |
39,452 |
(8,619 |
) |
402,931 |
||||||||
Total liabilities |
405,036 |
72,145 |
(8,622 |
) |
468,559 |
||||||||
Stockholders' equity (deficit): |
|||||||||||||
Preferred stock |
- |
- |
- |
- |
|||||||||
Common stock |
7 |
33 |
(33 |
) |
7 |
||||||||
Additional paid-in capital |
65,496 |
35,026 |
(35,026 |
) |
65,496 |
||||||||
Retained earnings (Accumulated deficit) |
(149,111 |
) |
62,219 |
(62,219 |
) |
(149,111 |
) | ||||||
Accumulated other comprehensive income |
14,791 |
15,109 |
(15,109 |
) |
14,791 |
||||||||
Less treasury stock |
(35 |
) |
- |
- |
(35 |
) | |||||||
Total stockholders' equity (deficit) |
(68,852 |
) |
112,387 |
(112,387 |
) |
(68,852 |
) | ||||||
Total liabilities and stockholders' equity (deficit) |
$ |
336,184 |
$ |
184,532 |
$ |
(121,009 |
) |
$ |
399,707 |
|
CONSOLIDATING STATEMENTS OF CASH FLOWS |
Quarter ended March 31, 2004 |
||||||||||||
Consolidated |
|||||||||||||
Guarantor |
Non-Guarantor |
Eliminations |
FiberMark, Inc. |
||||||||||
Cash flows from operating activities: |
|||||||||||||
Net income (loss) |
$ |
(16,850 |
) |
$ |
7,122 |
$ |
(7,122 |
) |
$ |
(16,850 |
) | ||
Adjustments to reconcile net income (loss) to net cash provided by (used in) |
|||||||||||||
operating activities: |
|||||||||||||
Depreciation and amortization |
3,373 |
1,290 |
- |
4,663 |
|||||||||
Amortization of bond discount |
43 |
- |
- |
43 |
|||||||||
Equity in subsidiary income |
(7,122 |
) |
- |
7,122 |
- |
||||||||
Deferred income taxes |
3 |
- |
- |
3 |
|||||||||
Reorganization costs |
11,985 |
- |
- |
11,985 |
|||||||||
Cash used for reorganization |
(1,993 |
) |
- |
- |
(1,993 |
) | |||||||
Changes in operating assets and liabilities: |
|||||||||||||
Accounts receivable |
(3,378 |
) |
(5,650 |
) |
- |
(9,028 |
) | ||||||
Inventories |
(3,967 |
) |
674 |
- |
(3,293 |
) | |||||||
Prepaid expenses |
(783 |
) |
6 |
- |
(777 |
) | |||||||
Other long-term assets |
156 |
- |
- |
156 |
|||||||||
Accounts payable |
1,744 |
(321 |
) |
- |
1,423 |
||||||||
Accrued pension and other current liabilities |
9,824 |
615 |
- |
10,439 |
|||||||||
Other long-term liabilities |
(129 |
) |
154 |
- |
25 |
||||||||
Accrued income taxes payable |
(469 |
) |
(3,495 |
) |
- |
(3,964 |
) | ||||||
Net cash provided by (used in) operating activities |
(7,563 |
) |
395 |
- |
(7,168 |
) | |||||||
Cash flows from investing activities: |
|||||||||||||
Additions to property, plant and equipment |
(486 |
) |
(1,466 |
) |
- |
(1,952 |
) | ||||||
Increase in other intangible assets |
(25 |
) |
52 |
- |
27 |
||||||||
Net cash used in investing activities |
(511 |
) |
(1,414 |
) |
- |
(1,925 |
) | ||||||
Cash flows from financing activities: |
|||||||||||||
Net borrowings under revolving credit line |
(2,753 |
) |
21,498 |
- |
18,745 |
||||||||
Repayment of debt |
(778 |
) |
- |
- |
(778 |
) | |||||||
Net borrowings (repayments) under intercompany notes |
8,823 |
(8,186 |
) |
(637 |
) |
- |
|||||||
Dividend, net |
12,051 |
(12,338 |
) |
287 |
- |
||||||||
Debt issuance costs |
(112 |
) |
- |
- |
(112 |
) | |||||||
Debt issuance costs due to reorganization |
(350 |
) |
- |
- |
(350 |
) | |||||||
Net cash provided by (used in) financing activities |
16,881 |
974 |
(350 |
) |
17,505 |
||||||||
Effect of exchange rate changes on cash |
(749 |
) |
(99 |
) |
350 |
(498 |
) | ||||||
Net increase (decrease) in cash |
8,058 |
(144 |
) |
- |
7,914 |
||||||||
Cash at beginning of period |
(986 |
) |
7,097 |
- |
6,111 |
||||||||
Cash at end of period |
$ |
7,072 |
$ |
6,953 |
$ |
- |
$ |
14,025 |
|||||
Supplemental cash flow information: |
|||||||||||||
Non-cash investing activities |
|||||||||||||
Settlement of intercompany loans thorugh dividends |
$ |
18,897 |
$ |
(18,897 |
) |
$ |
- |
$ |
- |
|
CONSOLIDATING STATEMENTS OF CASH FLOWS |
Quarter ended March 31, 2003 |
||||||||||||
Guarantor |
Non-Guarantor |
Eliminations |
Consolidated
FiberMark, Inc. |
||||||||||
Cash flows from operating activities: |
|||||||||||||
Net income (loss) |
$ |
(5,403 |
) |
$ |
5,724 |
$ |
(5,724 |
) |
$ |
(5,403 |
) | ||
Adjustments to reconcile net income (loss) to net cash provided by (used in) |
|||||||||||||
operating activities: |
|||||||||||||
Depreciation and amortization |
3,080 |
1,070 |
- |
4,150 |
|||||||||
Amortization of bond discount |
43 |
- |
- |
43 |
|||||||||
Amortization of deferred gain |
(222 |
) |
- |
- |
(222 |
) | |||||||
Equity in subsidiary income |
(5,724 |
) |
- |
5,724 |
- |
||||||||
Loss on disposal of intangible asset |
- |
35 |
- |
35 |
|||||||||
Deferred taxes |
134 |
- |
- |
134 |
|||||||||
Changes in operating assets and liabilities: |
|||||||||||||
Accounts receivable |
1,111 |
(5,274 |
) |
- |
(4,163 |
) | |||||||
Inventories |
(2,631 |
) |
578 |
- |
(2,053 |
) | |||||||
Prepaid expenses |
(349 |
) |
24 |
- |
(325 |
) | |||||||
Other long-term assets |
5 |
- |
- |
5 |
|||||||||
Accounts payable |
(2,731 |
) |
(676 |
) |
- |
(3,407 |
) | ||||||
Accrued pension and other liabilities |
9,658 |
550 |
- |
10,208 |
|||||||||
Intercompany accounts, net |
9,803 |
662 |
(10,465 |
) |
- |
||||||||
Other long-term liabilities |
(205 |
) |
146 |
- |
(59 |
) | |||||||
Accrued income taxes payable |
16 |
1,016 |
- |
1,032 |
|||||||||
Net cash provided by (used in) operating activities |
6,585 |
3,855 |
(10,465 |
) |
(25 |
) | |||||||
Cash flows from investing activities: |
|||||||||||||
Additions to property, plant and equipment |
(7,462 |
) |
(2,146 |
) |
- |
(9,608 |
) | ||||||
Net cash used in investing activities |
(7,462 |
) |
(2,146 |
) |
- |
(9,608 |
) | ||||||
Cash flows from financing activities: |
|||||||||||||
Proceeds from the issuance of debt |
5,595 |
- |
- |
5,595 |
|||||||||
Repayment of debt |
(1,927 |
) |
- |
- |
(1,927 |
) | |||||||
Net borrowings (repayments) under intercompany notes |
- |
(10,585 |
) |
10,585 |
- |
||||||||
Capital reserve |
- |
(16 |
) |
16 |
- |
||||||||
Net cash provided by (used in) financing activities |
3,668 |
(10,601 |
) |
10,601 |
3,668 |
||||||||
Effect of exchange rate changes on cash |
52 |
768 |
(136 |
) |
684 |
||||||||
Net increase (decrease) in cash |
2,843 |
(8,124 |
) |
- |
(5,281 |
) | |||||||
Cash at beginning of period |
12,535 |
23,032 |
- |
35,567 |
|||||||||
Cash at end of period |
$ |
15,378 |
$ |
14,908 |
$ |
- |
$ |
30,286 |
|
|
· | Reorganization expenses related to chapter 11 amounted to $12.0 million |
· | Other expenses increased $0.8 million in 2004 compared with 2003 largely due to higher amortization of additional deferred financing costs as a result of the GE facility obtained in November 2003 |
· | Increase in income from operations of $1.3 million |
· | Lower costs of trial runs for product transfers and new products of approximately $1.5 million |
· | Reduced variable costs, including labor, of $1.4 million |
· | Lower fixed overhead due to plant consolidations, partially offset by initial inefficiency in transferring production, totaling $1.0 million |
· | Foreign currency translation benefits of $2.1 million |
· | Weaker product mix, which decreased margins by $2.7 million |
· | Price reductions of $0.7 million, primarily in nonwoven wallcovering markets |
· | Higher energy costs of $0.4 million |
Net cash provided by (used in): |
Quarter Ended
March 31, 2004 |
Quarter Ended
March 31, 2003 |
|||||
Operating activities |
$ |
(7,168 |
) |
$ |
(25 |
) | |
Investing activities |
(1,925 |
) |
(9,608 |
) | |||
Financing activities |
17,505 |
3,668 |
|||||
Effect of exchange rates |
(498 |
) |
684 |
||||
Net increase (decrease) in cash |
$ |
7,914 |
$ |
(5,281 |
) |
· | Net losses in 2004 were $16.9 million compared to $5.4 million in 2003, increasing by $11.5 million over 2003 largely due to chapter 11 non-cash reorganization charges of $12.0 million and increased other expenses as described previously. Cash used for reorganization items was $2.0 million in 2004. |
· | Non-cash items included depreciation and amortization of $4.7 million in 2004 and $4.2 million in 2003. |
· | Cash tax payments caused taxes payable in 2004 to decrease by $4.0 million, due largely to significant tax payments in Germany related to fiscal 2002 and 2003 tax years. These tax expenses were previously provided for in our German financial statements. In 2003, taxes payable increased by $1.0 million. |
· | net borrowings under the revolving credit facility were $18.7 million |
· | the company repaid $0.8 million of long-term debt |
· | debt issuance costs for credit facilities were $0.5 million |
· | net proceeds from the issuance of debt were $5.6 million |
· | the company repaid $1.9 million of long-term debt |
2004* |
2005-2007 |
2008-2010 |
Thereafter |
Total | ||||||
Long-term debt |
$ 2.1 |
$ 108.1 |
$ 0.0 |
$ 230.0 |
$ 340.2 | |||||
Letters of credit |
8.0 |
0.0 |
0.0 |
0.0 |
8.0 | |||||
Operating leases |
2.5 |
4.0 |
0.0 |
0.0 |
6.5 | |||||
Sale-leaseback |
0.9 |
2.1 |
0.0 |
0.0 |
3.0 | |||||
Forward purchase contracts |
4.3 |
0.0 |
0.0 |
0.0 |
4.3 | |||||
$ 17.8 |
$ 114.2 |
$ 0.0 |
$ 230.0 |
$ 362.0 |
|
North America* |
Germany |
Combined |
|||||||
Borrowing base |
$ |
24.4 |
$ |
40.0 |
$ |
64.4 |
||||
Less: reserves against availability |
(4.6 |
) |
- |
(4.6 |
) | |||||
|
||||||||||
Net availability |
19.8 |
|
40.0 |
59.8 |
||||||
Less: outstanding borrowings |
- |
(24.0 |
) |
(24.0 |
) | |||||
Letters of credit |
(8.0 |
) |
- |
(8.0 |
) | |||||
|
||||||||||
Unused borrowing capacity |
$ |
11.8 |
$ |
16.0 |
$ |
27.8 |
Borrowing Source |
Base Rate Index |
Margin Over Index |
U.S. |
LIBOR |
3.75% |
U.S. |
Prime rate |
2.25% |
Borrowing Source |
Base Rate Index |
Margin Over Index |
Germany |
Euribor |
3.00% |
Germany |
Euro Index |
4.50% |
|
(a) Exhibits. | |
31.1 |
Certification of Chief Executive Officer and Chief Financial Officer pursuant to 18 U.S.C. Section 1350 dated September 1, 2004. |
32.1 |
Certification of Principal Executive Officer pursuant to Rules 12a-14 and 15d-14 under the Securities Exchange Act of 1934, as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002. |
32.2 |
Certification of Principal Financial Officer pursuant to Rules 12a-14 and 15d-14 under the Securities Exchange Act of 1934, as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002. |
(b) The following reports on Form 8-K were filed for the quarter for which this report is filed: | |
-- |
FiberMark, Inc. filed a current report on Form 8-K dated March 31, 2004 announcing fourth quarter and full year results for 2003. |
|
|
|
|
|
FiberMark, Inc. | |
|
|
|
Date: September 1, 2004 |
By: |
/s/ John E. Hanley |
|
||
|
John E. Hanley
Vice President and Chief Financial Officer
(Principal Financial Officer and Duly Authorized Officer) |
|
|
|
|
FiberMark, Inc. | |
|
|
|
Date: September 1, 2004 |
By: |
/s/ Craig D. Thiel |
|
||
|
Craig D. Thiel
Vice President and Corporate Controller
(Principal Accounting Officer) |
|
Number |
Description | |
31.1 |
Certification of Chief Executive Officer and Chief Financial Officer dated September 1, 2004 pursuant to 18 U.S.C. Section 1350. | |
32.1 |
Certification of Principal Executive Officer pursuant to Rules 12a-14 and 15d-14 under the Securities Exchange Act of 1934, as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002. | |
32.2 |
Certification of Principal Financial Officer pursuant to Rules 12a-14 and 15d-14 under the Securities Exchange Act of 1934, as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002. |
|
Date: September 1, 2004 |
/s/ Alex Kwader |
|
|
|
Alex Kwader
Chairman and Chief Executive Officer |
Date: September 1, 2004 |
/s/ John E. Hanley |
|
|
|
John E. Hanley
Vice President and Chief Financial Officer |
|
1. |
I have reviewed this Quarterly Report on Form 10-Q/A of FiberMark, Inc.; |
2. |
Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report; |
3. |
Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report; |
4. |
The registrants other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) for the registrant and have: |
a) |
Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared; |
b) |
[Paragraph omitted in accordance with SEC transition instructions contained in SEC Release 34-47986] |
c) |
Evaluated the effectiveness of the registrants disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and |
d) |
Disclosed in this report any change in the registrants internal control over financial reporting that occurred during the registrants most recent fiscal quarter (the registrants fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrants internal control over financial reporting; and |
5. |
The registrants other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrants auditors and the audit committee of the registrants board of directors (or persons performing the equivalent functions): |
a) |
All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrants ability to record, process, summarize and report financial information; and |
b) |
Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrants internal control over financial reporting. |
Date: September 1, 2004 |
/s/ Alex Kwader |
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Alex Kwader
Chairman and Chief Executive Officer |
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1. |
I have reviewed this Quarterly Report on Form 10-Q/A of FiberMark, Inc.; |
2. |
Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report; |
3. |
Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report; |
4. |
The registrants other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) for the registrant and have: |
a) |
Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared; |
b) |
[Paragraph omitted in accordance with SEC transition instructions contained in SEC Release 34-47986] |
c) |
Evaluated the effectiveness of the registrants disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and |
d) |
Disclosed in this report any change in the registrants internal control over financial reporting that occurred during the registrants most recent fiscal quarter (the registrants fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrants internal control over financial reporting; and |
5. |
The registrants other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrants auditors and the audit committee of the registrants board of directors (or persons performing the equivalent functions): |
a) |
All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrants ability to record, process, summarize and report financial information; and |
b) |
Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrants internal control over financial reporting. |
Date: September 1, 2004 |
/s/ John E. Hanley |
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John E. Hanley
Vice President and Chief Financial Officer
(Principal Financial Officer) |
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