SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
_______________
FORM 10-Q/A
AMENDMENT NO. 1
(Mark One)
____ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d)
/ X / OF THE SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended June 30, 1994
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 1-10258
Tredegar Industries, Inc.
(Exact name of registrant as specified in its charter)
Virginia 54-1497771
(State or other jurisdiction (I.R.S. Employer
of incorporation or organization) Identification No.)
1100 Boulders Parkway
Richmond, Virginia 23225
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code: (804) 330-1000
Indicate by check 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
The number of shares of Common Stock, no par value,
outstanding as of July 15, 1994: 10,594,225
PART I - FINANCIAL INFORMATION
Item 1. Financial Statements
TREDEGAR INDUSTRIES, INC.
CONSOLIDATED BALANCE SHEETS
(In thousands)
(Unaudited)
June 30 December 31
ASSETS 1994 1993
Cash and cash equivalents $ 4,608 $ -
Accounts and notes receivable 74,210 70,173
Inventories 31,308 34,211
Deferred income taxes 11,111 11,555
Prepaid expenses and other 1,104 881
Total current assets 122,341 116,820
Property, plant and equipment, at cost 324,265 323,933
Less accumulated depreciation
and amortization 194,797 188,531
Net property, plant and equipment 129,468 135,402
Other assets and deferred charges 26,162 24,456
Goodwill and other intangibles 35,950 45,729
Net assets of discontinued operations 21,983 30,976
Total assets $ 335,904 $ 353,383
LIABILITIES AND SHAREHOLDERS' EQUITY
Accounts payable $ 25,078 $ 19,376
Accrued expenses 36,581 35,380
Income taxes payable 2,673 -
Total current liabilities 64,332 54,756
Long-term debt 70,500 97,000
Deferred income taxes 19,071 23,108
Other noncurrent liabilities 9,692 9,431
Total liabilities 163,595 184,295
Shareholders' equity:
Common stock, no par value 165,839 170,140
Foreign currency translation
adjustment 84 (283)
Retained earnings (deficit) 6,386 (769)
Total shareholders' equity 172,309 169,088
Total liabilities and
shareholders' equity $ 335,904 $ 353,383
See accompanying notes to financial statements.
TREDEGAR INDUSTRIES, INC.
CONSOLIDATED STATEMENTS OF INCOME
(In thousands, except per-share amounts)
(Unaudited)
Second Quarter Ended Six Months Ended
June 30 June 30
1994 1993 1994 1993
Net sales $122,913 $108,042 $243,907 $219,240
Other income (expense), net 160 (192) (71) (462)
123,073 107,850 243,836 218,778
Cost of goods sold 102,684 91,468 204,934 185,482
Selling, general & administrative
expenses 12,259 12,278 23,554 24,706
Research & development expenses 1,927 2,246 3,766 4,175
Interest expense 1,166 1,232 2,343 2,555
Unusual items - (736) 9,521 (2,263)
118,036 106,488 244,118 214,655
Income (loss) from continuing
operations before income taxes 5,037 1,362 (282) 4,123
Income taxes 1,963 688 1,737 1,739
Income (loss) from continuing
operations 3,074 674 (2,019) 2,384
Discontinued operations:
Income from energy segment operations 1,772 2,154 3,207 3,995
Gain on sale of remaining oil & gas
properties (net of income tax of
$2,121) - - 3,938 -
Deferred tax benefit on the difference
between the financial reporting and
income tax basis of The Elk Horn
Coal Corporation - - 3,320 -
Net income before extraordinary item
and cumulative effect of changes
in accounting principles 4,846 2,828 8,446 6,379
Extraordinary item - prepayment
premium on extinguishment of
debt (net of income tax benefits
of $685) - (1,115) - (1,115)
Cumulative effect of changes in
accounting for postretirement benefits
other than pensions (net of tax) and
income taxes - - - 150
Net income $ 4,846 $ 1,713 $ 8,446 $ 5,414
Earnings (loss) per share:
Continuing operations $ .29 $ .06 $ (.19) $ .22
Discontinued operations .16 .20 .97 .37
Before extraordinary item and
cumulative effect of changes
in accounting principles .45 .26 .78 .59
Extraordinary item - (.10) - (.10)
Cumulative effect of changes
in accounting principles - - - .01
Net income $ .45 $ .16 $ .78 $ .50
Shares used to compute earnings per share 10,722 10,895 10,808 10,895
See accompanying notes to financial statements.
TREDEGAR INDUSTRIES, INC.
CONSOLIDATED STATEMENTS OF CASH FLOWS
(In thousands)
(Unaudited)
Six Months
Ended June 30
1994 1993
Cash flows from operating activities:
Continuing operations:
Income (loss) from continuing operations $(2,019) $ 2,384
Adjustments for noncash items:
Depreciation 11,789 11,380
Amortization of intangibles 1,010 1,281
Write-off of intangibles 9,521 -
Deferred income taxes (3,593) 363
Accrued pension income and postretirement benefits 177 115
Gain on sale of investments - (2,263)
Changes in assets and liabilities:
Accounts and notes receivable (4,037) (4,441)
Inventories 2,903 (3,066)
Prepaid expenses and other (230) (654)
Accounts payable 5,702 946
Accrued expenses and income taxes payable 3,625 (4,373)
Other,net (883) (1,429)
Net cash provided by continuing operating activities 23,965 243
Net cash used for extraordinary item - (1,115)
Net cash provided by discontinued operating activities 11,621 8,000
Net cash provided by operating activities 35,586 7,128
Cash flows from investing activities:
Continuing operations:
Capital expenditures (7,885) (5,905)
Investments (1,200) (200)
Proceeds from sales of investments - 5,263
Property disposals 2,569 2,208
Other, net (128) (334)
Net cash (used in) provided by investing
activities of continuing operations (6,644) 1,032
Discontinued operations:
Capital expenditures (16) (313)
Property disposals 7,853 1,685
Net cash provided by investing activities of
discontinued operations 7,837 1,372
Net cash provided by investing activities 1,193 2,404
Cash flows from financing activities:
Dividends paid (1,291) (1,308)
Net decrease in borrowings (26,500) (8,100)
Repurchase of Tredegar common stock (4,333) -
Other, net (47) (124)
Net cash used in financing activities (32,171) (9,532)
Increase in cash and cash equivalents 4,608 -
Cash and cash equivalents at beginning of period - -
Cash and cash equivalents at end of period $ 4,608 $ -
Supplemental cash flow information:
Interest payments (net of amount capitalized) $ 2,619 $ 5,249
Income tax payments, net $ 5,237 $ 3,935
See accompanying notes to financial statements.
TREDEGAR INDUSTRIES, INC.
NOTES TO THE CONSOLIDATED INTERIM FINANCIAL STATEMENTS
(Unaudited)
1. In the opinion of management, the accompanying consolidated
financial statements of Tredegar Industries, Inc. and
Subsidiaries ("Tredegar") contain all adjustments necessary
to present fairly, in all material respects, Tredegar's
consolidated financial position as of June 30, 1994, and the
consolidated results of their operations and their cash flows
for the six months ended June 30, 1994 and 1993. All such
adjustments are deemed to be of a normal recurring nature.
These financial statements should be read in conjunction with
the consolidated financial statements and notes thereto
included in the 1993 Annual Report. The results of operations
for the six months ended June 30, 1994 are not necessarily
indicative of the results to be expected for the full year.
2. Certain prior-period amounts have been reclassified to conform
to the current presentation.
3. The components of inventories are as follows:
(In thousands)
June 30 December 31
1994 1993
Finished goods $ 5,905 $ 5,735
Work-in-process 3,824 5,298
Raw materials 14,670 15,497
Stores, supplies and other 6,909 7,681
Total $ 31,308 $ 34,211
4. Unusual items in 1994 include the write-off of goodwill and
other intangibles in APPX Software, Inc. ($7.6 million after
income taxes or 70 cents per share). The write-off is the
result of management's determination that income generated by
the acquired products, which historically had been marketed
to small and medium-sized companies, will not be sufficient
to recover the unamortized costs associated with the
intangible software assets purchased by Tredegar in December
1992. The goodwill and other intangibles in APPX Software
were being amortized over 5 to 7 years at an annual rate of
approximately $1.5 million after income taxes, or 14 cents per
share. Unusual items in 1993 include gains on sales of
Emisphere Technologies, Inc. ("Emisphere") common stock
($460,000 after income taxes, or 4 cents per share for the
second quarter and $1.4 million after income taxes, or 13
cents per share, for the six months).
5. Tredegar is reporting its energy segment as discontinued
operations. In February 1994, Tredegar sold its remaining oil
and gas properties for approximately $8 million. In June
1994, Tredegar announced an agreement to sell its 97%-owned
subsidiary, The Elk Horn Coal Corporation ("Elk Horn"), to Pen
Holdings, Inc. for $71 million. Assuming completion of the
transaction during the third quarter, Tredegar expects to
realize an after-tax gain of approximately $26 million or
$2.43 per share. After-tax proceeds from the sale should be
approximately $50 million. Of this amount, it is expected
that $35 million will be used to repay certain outstanding
debt. Remaining proceeds will be invested in marketable
securities.
Results of energy segment operations are summarized below:
(In thousands)
Second Quarter Six Months
Ended June 30 Ended June 30
1994 1993 1994 1993
Revenues $ 8,443 $7,933 $16,154 $15,931
Costs and expenses:
Operating costs and
expenses 5,530 5,539 10,883 11,019
Interest allocated 133 161 269 334
Unusual items - (1,010) - (1,424)
Total 5,663 4,690 11,152 9,929
Income before income taxes 2,780 3,243 5,002 6,002
Income taxes 1,008 1,089 1,795 2,007
Income from energy segment
operations $ 1,772 $2,154 $ 3,207 $3,995
Unusual items for energy segment operations in 1993 include
gains of $1 million ($663,000 after income taxes or 6 cents
per share) for the second quarter and $1.4 million ($938,000
after income taxes or 9 cents per share) for the six months
related to sales of certain oil and gas properties.
Discontinued operations in 1994 include a gain of $6.1 million
($3.9 million after income taxes or 36 cents per share)
related to the sale of Tredegar's remaining oil and gas
properties, and a deferred tax benefit of $3.3 million (31
cents per share) recognized on the difference between the
financial reporting basis and income tax basis of Elk Horn in
connection with its anticipated sale.
6. Net income and earnings per share, adjusted for nonrecurring
items affecting the comparability of operating results, are
presented below:
(In thousands, except per-share amounts)
Second Quarter Six Months
1994 1993 1994 1993
Net income as reported $4,846 $1,713 $8,446 $5,414
After-tax effects of
nonrecurring items:
Write-off of APPX
Software intangibles - - 7,642 -
Gain on sale of oil & gas
properties - (663) (3,938) (938)
Deferred tax benefit
associated with the
expected sale of Elk
Horn Coal - - (3,320) -
Gain on sale of Emisphere - (460) - (1,410)
Extraordinary charge - 1,115 - 1,115
Cumulative effect of
accounting changes - - - (150)
Net income as adjusted for
nonrecurring items 4,846 1,705 8,830 4,031
Income from discontinued
operations as adjusted
for nonrecurring items (1,772) (1,491) (3,207) (3,057)
Net income from continuing
operations as adjusted
for nonrecurring items $3,074 $ 214 $5,623 $ 974
Earnings per share:
As reported $ .45 $ .16 $ .78 $ .50
As adjusted for
nonrecurring items .45 .16 .81 .37
From continuing
operations as adjusted
for nonrecurring items .29 .02 .52 .09
7. During the second quarter of 1994, Tredegar purchased 303,000
shares of Tredegar common stock for $4.3 million. In the
first quarter of 1994, Tredegar granted stock options to
purchase 381,000 shares of Tredegar common stock at prices not
less than the fair market value on the date of grant ($15.125)
and for a term not to exceed 10 years.
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act
of 1934, the Registrant has duly caused this report to be signed on
its behalf by the undersigned thereunto duly authorized.
Tredegar Industries, Inc.
(Registrant)
Date: August 8, 1994 /s/ N. A. Scher
Norman A. Scher
Executive Vice President,
Treasurer and Chief Financial
Officer (Principal Financial
Officer)
Date: August 8, 1994 /s/ D. Andrew Edwards
D. Andrew Edwards
Corporate Controller
(Principal Accounting Officer)
