View:
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, 1994
[ ] 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 0-12001
St. Joe Paper Company
(Exact name of registrant as specified in its charter)
Florida 59-0432511
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
Suite 400, 1650 Prudential Drive, Jacksonville, Florida 32207
(Address of principal executive offices) (Zip Code)
(904) 396-6600
(Registrant's telephone number, including area code)
None
(Former name, former address and former fiscal year, if changed
since last report)
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
APPLICABLE ONLY TO CORPORATE ISSUERS:
As of March 31, 1994 there were 30,498,650 shares of common
stock, no par value, outstanding.
ST. JOE PAPER COMPANY
INDEX
Page No.
PART I Financial Information:
Consolidated Balance Sheet -
March 31, 1994 and December 31, 1993 3
Consolidated Statement of
Income and Retained Earnings -
Three Months ended March 31, 1994 and
1993 4
Consolidated Statement of Cash Flows -
Three months ended March 31, 1994 and 5
1993
Notes to Consolidated Financial Statements 6
Management's Discussion and Analysis of
Consolidated Financial Condition and
Results of Operations 8
PART II Other Information 12
ST. JOE PAPER COMPANY
CONSOLIDATED BALANCE SHEET
(Dollars in thousands)
March 31 December 31
ASSETS 1994 1993
(Unaudited)
Current Assets:
Cash and cash equivalents $ 60,605 $ 48,304
Short-term investments 69,501 66,307
Accounts receivable 81,300 74,127
Inventories 75,182 69,398
Other assets 20,456 25,720
Total Current Assets 307,044 283,856
Investment and Other Assets:
Marketable securities 150,750 159,523
Other assets 39,917 40,170
Total Investments and Other Assets 190,667 199,693
Property, Plant and Equipment, Net 1,016,385 1,007,722
Total Assets $1,514,096 1,491,271
LIABILITIES AND STOCKHOLDERS' EQUITY
Current Liabilities:
Accounts payable $ 39,738 $ 41,515
Accrued liabilities 27,308 27,838
Income taxes payable 6,273 2,737
Long-term debt due within one year 27,712 21,309
Total Current Liabilities 101,031 93,399
Accrued Casualty Reserves and Other Liabilities 11,834 11,063
Long-Term Debt due After One Year 38,616 38,947
Deferred Income Taxes and Income Tax Credits 208,496 205,531
Minority Interest in Consolidated Subsidiaries 244,084 238,878
Stockholders' Equity:
Common stock, no par value; 60,000,000
shares authorized;30,498,650 shares
issued and outstanding 8,714 8,714
Retained earnings 858,146 851,511
Net unrealized gains on debt and
marketable equity securities 43,175 43,228
Total Stockholders' Equity 910,035 903,453
Total Liabilities and Stockholders' Equity $1,514,096 $1,491,271
See accompanying notes.
-3-
ST. JOE PAPER COMPANY
CONSOLIDATED STATEMENT OF INCOME AND RETAINED EARNINGS
(Unaudited)
(Dollars in thousands except per share amounts)
Three Months
ended March 31
1994 1993
Net Sales and Operating Revenues $167,368 $146,698
Cost of Sales and Operating Revenues 134,526 126,654
Gross Profit 32,842 20,044
Selling, General and Administrative Expenses 13,822 14,906
Operating Profit 19,020 5,138
Other Income (Expense):
Dividends 534 229
Interest income 2,504 2,775
Interest expense (963) (979)
Gain on sales and other dispositions of
property, plant and equipment 384 977
Other, net 1,087 1,321
3,546 4,323
Income before Income Taxes, Minority Interest
and Cumulative Effect of Change in
Accounting Principle 22,566 9,461
Provision for Income Taxes 7,903 3,636
Income before Minority Interest and Cumulative
Effect of Change in Accounting Principle 14,663 5,825
Income Applicable to Minority Interest in
Consolidated Subsidiaries 6,503 2,363
Income before Cumulative Effect of Change in
Accounting Principle 8,160 3,462
Cumulative Effect of Change in Accounting
Principle for Income Taxes --- 20,518
Net Income $ 8,160 $ 23,980
Retained Earnings at Beginning of Period 851,511 824,968
Dividends 1,525 1,525
Retained Earnings at End of Period $858,146 $847,423
Per Share Data:
Dividends $ 0.05 $ 0.05
Income before Cumulative Effect of Change
in Accounting Principle $ 0.27 $ 0.11
Cumulative Effect of Change in Accounting
Principle --- $ 0.68
Net Income $ 0.27 $ 0.79
Number of Common Shares Outstanding 30,498,650 30,498,650
See accompanying notes.
-4-
ST. JOE PAPER COMPANY
CONSOLIDATED STATEMENT OF CASH FLOWS
(Unaudited)
(Dollars in thousands except per share amounts)
Three Months
ended March 31
Cash Flows from Operating Activities:
Net Income $8,160 $23,980
Adjustments to reconcile net income to
cash provided by operating activities:
Cumulative effect of a change in
accounting principle --- (20,518)
Depreciation and depletion 5,533 16,025
Minority interest in income 6,503 2,363
Gain on sale of property (384) (977)
Increase in deferred income taxes 2,965 7,464
Changes in operating assets and liabilities:
Accounts receivable (7,173) (1,534)
Inventories (5,784) (6,073)
Other assets 5,517 2,314
Accounts payable, accrued liabilities
and casualty reserves (1,536) (1,121)
Income taxes payable 3,536 ---
Cash Provided by Operating Activities 27,337 21,923
Cash Flows from Investing Activities:
Purchases of property, plant and equipment (25,582) (25,049)
Purchases of investments (16,490) (28,411)
Proceeds from sales of property 1,771 2,479
Proceeds from sales of investments 21,148 31,439
Cash Used in Investing Activities (19,153) (19,542)
Cash Flows from Financing Activities:
Net change in short-term borrowings 6,398 4,374
Dividends paid to stockholders (1,525) (1,525)
Repayment of long-term debt (326) (315)
Dividends paid to minority interest (430) (423)
Cash Provided by Financing Activities 4,117 2,111
Net Increase in Cash and Cash Equivalents 12,301 4,492
Cash and Cash Equivalents at Beginning of Period 48,304 42,137
Cash and Cash Equivalents at End of Period $60,605 $ 46,629
Supplemental Disclosure of Cash Flow Information:
Cash paid during the year for certain expense items is:
Interest $ 838 $ 777
Income taxes $ 2,563 $ 916
See accompanying notes
-5-
ST. JOE PAPER COMPANY
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(Unaudited)
(Dollars in thousands )
1. In the opinion of the Company, the accompanying unaudited consolidated
financial statements contain all adjustments (consisting of only normal
recurring accruals) necessary to present fairly the financial position
as of March 31, 1994 and December 31, 1993 and the results of operations
and cash flows for the three month period ended March 31, 1994 and 1993.
2. The results of operations for the three month period ended March 31,
1994 and 1993 are not necessarily indicative of the results that may be
expected for the full year.
3. Inventories at March 31, 1994 and December 31, 1993:
March 31 December 31
1994 1993
Manufactured paper products and
associated raw materials $ 29,945 $ 30,782
Materials and supplies 25,436 27,407
Sugar 19,801 11,209
$ 75,182 $ 69,398
4. The Company and its subsidiaries are involved in litigation on a number
of matters and are subject to certain claims which arise in the normal
course of business, none of which, in the opinion of management, is
expected to have a material adverse effect on the Company's consolidated
financial position or results of operations.
The Company has retained certain self-insurance risks with respect to
losses for third party liability, property damage and group health
insurance provided to employees.
-6-
ST. JOE PAPER COMPANY
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(Unaudited)
(Dollars in thousands )
The Company is subject to costs arising out of environmental laws and
regulations, which include obligations to remove or limit the effects
on the environment of the disposal or release of certain wastes or
substances at various sites. It is the Company's policy to accrue and
charge against earnings environmental cleanup costs when it is probable
that a liability has been incurred and an amount is reasonably estimable.
As assessments and cleanups proceed, these accruals are reviewed and
adjusted, if necessary, as additional information becomes available.
The Company is currently a party to, or involved in, legal proceedings
directed at the cleanup of two Superfund sites. The Company has accrued
its allocated share of the total estimated cleanup costs for these two
sites. Based upon management's evaluation of the other potentially
responsible parties, the Company does not expect to incur additional
amounts even though the Company has joint and several liability. Other
proceedings involving environmental matters such as alleged discharge of
oil or waste material into water or soil are pending against the Company.
It is not possible to quantify future environmental costs because many
issues relate to actions by third parties or changes in environmental
regulation. However, based on information presently available, management
believes that the ultimate disposition of currently known matters will
not have a material effect on the financial position or liquidity of the
Company , but could be material to the results of operation of the
Company in any one period. As of March 31, 1994 and December 31, 1993,
the aggregate environmental related accruals were $6.7 million.
Environmental liabilities are paid over an extended period and the timing
of such payments cannot be predicted with any confidence.
-7-
MANAGEMENT'S DISCUSSION AND ANALYSIS OF CONSOLIDATED
FINANCIAL CONDITION AND RESULTS OF OPERATIONS
Net Sales and Operating Revenues for the quarter ended March
31, 1994 increased $20.7 million (14.1%) compared to the same 1993
period.
Cost of Sales and Operating Expenses increased $7.8 million
(6.2%) for the quarter ended March 31, 1994 compared to the March
31, 1993 quarter which were 80.4% of net sales and operating
revenue for the 1994 quarter and 86.3% for the 1993 quarter.
Selling, General and Administrative Expenses for the first
quarter of 1994 were $1.1 million (7.1%) lower when compared to the
corresponding 1993 quarter.
Operating Profit for the quarter ended March 31, 1994 compared
to the same 1993 period was higher by $13.9 million (270.2%).
The operating results for the Company by industry segments for
the comparable three month period follows (in millions of dollars).
FOREST PRODUCTS
Quarter Ended March 31 %Increase
1994 1993 (Decrease)
Net Sales and Operating Revenue $ 84.5 $ 79.1 6.8
Cost of Sales and Operating Expenses 82.5 76.7 7.6
Selling, General and Administrative
Expenses 7.4 8.6 (14.0)
Operating Profit (Loss) (5.4) (6.2) 13.1
Net sales and operating revenue in the Company's paper mill
operations for the quarter ended March 31, 1994 were up 0.9% due to
tons sold outside being up 16.3% and offset slightly by the average
selling price being down 2.7%. Crest white sales were 50% of total
tons sold in 1994 compared to 44% in 1993. Sales by the Company's
container operations were up 4.1% on an increase of 4.8% in tons
sold partially offset by a 0.6% decrease in selling price. The
revenue on timber sales to outside customers by our land company
was up 72.1% on a 51.3% increase in tons sold and by a 13.8%
increase in per ton selling price.
The cost of sales and operating expenses increased 7.6% for
the 1994 quarter over the same 1993 period as most major expense
items increased because of the increase in production.
-8-
The outlook for linerboard continues to look better as the
industry had the first price increase in sometime in October, 1993
of $25 a ton followed by a $30 a ton increase in March, 1994. The
container operations improved the sales price per ton by $5.42 in
the first quarter of 1994 over the average price per ton they
received in the year 1993.
TRANSPORTATION
Quarter Ended March 31 %Increase
1994 1993 (Decrease)
Net Sales and Operating Revenue $ 43.1 $ 43.3 (0.4)
Cost of Sales and Operating Expenses 31.8 32.9 (3.3)
Selling, General and Administrative
Expenses 3.8 3.8 0.4
Operating Profit 7.5 6.6 13.4
Operating revenue for the three (3) month period ended March
31, 1994 remained relatively flat at the Florida East Coast Railway
Company (FEC) compared to the same 1993 quarter. Traffic due to
Hurricane Andrew was a revenue factor in the first quarter of 1993
but is no longer a factor in making revenue comparisons.
Apalachicola Northern Railroad Company (ANRR) net revenue for the
quarter decreased 4.6% on a decrease in coal, tall oil and stone
and clay product shipments.
Operating expenses for the FEC decreased 3.8% for the first
quarter of 1994 from 1993 and selling, general and administrative
were up 0.5%. ANRR operating expenses for the three month period
were up 3.8% and selling, general and administrative expenses were
down 2.6%.
SUGAR
Quarter Ended March 31 %Increase
1994 1993 (Decrease)
Net Sales and Operating Revenue $ 13.4 $ 12.1 10.9
Cost of Sales and Operating Expenses 10.8 9.6 12.3
Selling, General and Administrative
Expenses 1.1 1.0 7.0
Operating Profit 1.5 1.4 4.5
Net sales and operating revenue in the sugar segment was up
for the 1994 three month period due to an increase in tons sold of
10.9% and a 0.2% increase in the sales price per ton.
-9-
Cost of sales and operating expenses in 1994 were up due
primarily to an increase in dead season expense from the prior
year, which was partially offset by an increase in molasses sales.
Molasses is a by-product of the production of raw sugar process and
is accounted for as a reduction of the cost of sales and operating
expense.
COMMUNICATIONS
Quarter Ended March 31 %Increase
1994 1993 (Decrease)
Net Sales and Operating Revenue $ 7.4 $ 7.3 0.8
Cost of Sales and Operating Expenses 4.7 4.7 0.1
Selling, General and Administrative
Expenses 1.1 1.0 0.7
Operating Profit 1.7 1.6 2.7
Net sales and operating revenue for this segment of the
Company covering the first quarter 1994 was up over the prior year
quarter and was attributable to access line growth.
Cost of sales and operating expenses and selling, general and
administrative expenses were basically the same this period as last
year.
REAL ESTATE
Quarter Ended March 31 %Increase
1994 1993 (Decrease)
Net Sales and Operating Revenue $ 19.5 $ 5.5 253.1
Cost of Sales and Operating Expenses 5.2 3.4 54.7
Selling, General and Administrative
Expenses 0.5 0.5 6.5
Operating Profit 13.7 1.6 *
* Not Meaningful
In the Real Estate segment of the Company, Gran Central,
Florida East Coast Industries, Inc.'s real estate subsidiary, had
a 377.5% increase in net sales and operating revenues in 1994 from
1993 which is mostly from increased sales of realty property.
Southwood Properties, the Company's real estate division had a
decrease in net sales and operating revenue caused by a decrease in
property sales.
-10-
Cost of sales and operating expenses were up 55.1% and
selling, general and administrative expenses were up 12.1 at Gran
Central on costs of real property sold and costs connected to the
newly rented buildings, such as, property taxes, commissions and
depreciation. In our Southwood Properties operations cost of sales
and operating expense were up 51.2% and selling, general and
administrative expenses were down 6.5% on increased cost of
property sales.
OTHER INCOME for the quarter ended March 31, 1994 was down
$0.8 million (18.0%) as compared to the same 1993 period. This
small decrease was in gain on sales and dispositions of property,
plant and equipment, miscellaneous items and interest income.
TAXES for the first quarter 1994 were up $4.3 million (117.4%)
as a direct result of the increase in income. The effective tax
rate for the three month period is 35.0% for 1994 and was 38.4% for
1993.
NET INCOME BEFORE CUMULATIVE EFFECT OF CHANGES IN ACCOUNTING
PRINCIPLE for the first quarter of 1994 of $8.2 million was $4.7
million more than the same 1993 period or up 135.7%. The earnings
per share for the three month period ended March 31, 1994 of $0.27
are $0.16 more than the like 1993 period.
FINANCIAL POSITION
The Company continues to have a strong current asset position.
Current assets were $307.0 million, up $23.2 million or 8.2% from
December 31, 1993. The Company's working capital ratio at March
31, 1994 was 3.0 to 1, the same ratio that it was at December 31,
1993.
The Company had a net increase in property, plant and
equipment at March 31, 1994 of $8.7 million over the December 31,
1993 balance. The Company has a minimum amount of long-term debt.
The noncurrent long-term debt at March 31, 1994 at $38.6 million
was $0.3 million less than at December 31, 1993. There were no
other significant changes in the Balance Sheet at March 31, 1994
over December 31, 1993.
Stockholder's equity at March 31, 1994 was $910.0 million or
$29.84 per share, an increase of $6.6 million or $0.22 per share
over $903.5 million or $29.62 per share at December 31, 1993.
-11-
PART II - OTHER INFORMATION
Item 1. Legal Proceedings
No change from Form 10-K for the year ended
December 31, 1993.
Item 5. Other Information
The Company is not aware of any other matters
of significance to be reported hereunder.
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.
St. Joe Paper Company
(Registrant)
S. D. Fraser
Vice President and Director
D. M. Groos
Comptroller
May 12, 1994
Date
-12-