ITEM 1 - BUSINESS
General
American Business Products was incorporated under the laws of Delaware in December 1967 to acquire the stock of Curtis 1000 Inc., a producer of envelopes and forms which has operated since 1882. Hereinafter, American Business Products, Inc. and its subsidiaries are collectively referred to as the "Company." In April 1986, the Company was reincorporated under the laws of Georgia. The Company is one of the nation's leading producers of printed business supplies, principally envelope products, custom business forms, and custom labels. Additionally, the Company manufactures and distributes books for the publishing industry and also is engaged in specialty extrusion coating and laminating of papers, films, and nonwoven fabrics for packaging.
Business Segments
The Company's product line is composed of three business segments: business supplies printing, book manufacturing, and specialty extrusion coating and laminating.
Business supplies printing consists principally of the manufacture of a wide variety of specialty mailers, envelopes, labels and lightweight packaging; the printing and production of business forms; and other related products and services including digital imaging or on-demand printing of various documents and materials for businesses. The manufacture and distribution of customized specialty labels is a rapidly growing part of this segment. The company produces a complete line of standard and special types and sizes of commercial mailing products including specialty mailers utilizing multi-part forms and envelopes. Business forms products and services include customized continuous forms for computers and word processors, custom cutsheet and roll laser paper for laser printers, the imprinting of variable, customized data on forms, electronic forms, and the management of forms inventories for customers. Business supplies printing accounted for 76% of the Company's sales in 1994, 74% in 1993, and 74% in 1992.
Book manufacturing consists of the printing and binding of both hard cover and soft cover books for the publishing industry. In addition, the Company provides storage and order fulfillment services by shipping orders to publishers' customers from two large distribution centers. This business segment accounted for 9% of the Company's sales in 1994, 9% in 1993, and 9% in 1992.
Specialty extrusion coating and laminating consists of applying plastic coatings in varying degrees of thickness to rolls of paper, film or fabric. The Company also prints and metalizes certain of these products for customers. The materials produced by this segment are used primarily for packaging consumer products such as individual servings of sugar, salt and pepper, sugar substitutes, and candy and ice cream bars, as well as medical and pharmaceutical products. These materials also are used for composite can liners and release liner papers for pressure sensitive products such as labels. This business segment accounted for 15% of the Company's sales in 1994, 17% in 1993, and 17% of sales in 1992.
Financial information regarding the Company's three business segments is presented in the Notes to Consolidated Financial Statements under the heading "Business Segment Information" on page 24 of the Company's 1994 Annual Report, which information is incorporated herein by reference. Portions of the 1994 Annual Report are filed as Exhibit 13 to this Annual Report on Form 10-K.
Production
Substantially all of the Company's products are manufactured by wholly owned subsidiaries of the Company in 36 manufacturing facilities located throughout the United States. (See "Item 2
ITEM 2 - PROPERTIES
The Company's executive offices are located in approximately 21,400 square feet of space at 2100 RiverEdge Parkway, Suite 1200, Atlanta, Georgia 30328. The offices are leased from an unaffiliated party under a lease expiring on January 26, 2003.
The principal properties of the Company include production facilities, administrative/sales offices and warehouses. The Company operates 36 production facilities throughout the United States encompassing approximately 1,924,000 square feet. The Company owns 29 of these facilities while 7 are leased facilities. In addition, the Company and a European joint venture/partner operate production facilities which are owned or leased by the joint venture in Germany, Poland, England, and Luxembourg. The facilities in Germany and Poland are owned by the joint venture, and the facilities in England and Luxembourg are leased.
The Company leases 50 administrative/sales offices and 10 warehouses, all of which are located in the United States. All of the Company's production facilities, administrative/sales offices and warehouses are used in the Company's business supplies printing business except for three of such facilities which are used in the Company's book manufacturing business and one which is used in the extrusion coating and laminating business.
Certain properties owned by the Company are held subject to mortgages. See the information set forth under the heading "Long Term Debt" in the Notes to Consolidated Financial Statements on page 20 in the Company's 1994 Annual Report, which information is incorporated herein by reference.
The Company believes that all of its properties and equipment are in good condition, adequately utilized and suitable for the purposes for which they are being used.
ITEM 3
ITEM 3 - LEGAL PROCEEDINGS
As of March 20, 1995, there were no material pending legal proceedings, other than routine litigation incidental to the business, to which the Company was a party or of which any of it's properties were the subject, and none are expected by management to materially effect the Company's financial position and results of operations.
ITEM 4
ITEM 4 - SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
No matter was submitted to a vote of the shareholders of the Company during the fourth quarter of 1994.
ITEM 4 (A) - EXECUTIVE OFFICERS OF THE REGISTRANT
Set forth below is information as of March 20, 1995 regarding the executive officers of the Company:
THOMAS R. CARMODY, 61 has been Chairman of the Board of Directors of the Company since April 1994 and Chief Executive Officer of the Company since 1988. He previously served as President of the Company from 1985 until April 1994, as Executive Vice President of the Company from 1982 until 1985 and as Chief Operating Office of the Company from 1982 until 1988. He has been a director of the Company since 1983 and has served with the Company or Curtis 1000 Inc., a wholly-owned subsidiary of the Company, for over 39 years.
WILLIAM C. DOWNER, 58, has served as Vice President-Finance and Chief Financial and Accounting Officer of the Company since August 1982. He has served with the Company or Curtis 1000 Inc., a wholly-owned subsidiary of the Company, for over 27 years.
DAWN M. GRAY, 50, has served as Secretary of the Company since July 1989. She served as Assistant Secretary from October 1976 to June 1989. She has served with the Company or Curtis 1000 Inc., a wholly-owned subsidiary of the Company, for over 28 years.
ROBERT W. GUNDECK, 52, has been President of the Company since April 1994 and Chief Operating Officer of the Company since 1993. He previously served as Executive Vice President of the Company from 1993 until April 1994 and as Vice President - Corporate Development of the Company from 1990 until 1993. From 1988 until 1990 Mr. Gundeck was Director of Acquisitions and Corporate Development of the Company. He has been a director of the Company since 1993, and he has served with the Company for over 7 years.
RICHARD A. LEFEBER, 59, has served as Vice President-Administration of the Company since January 1980. He served as Secretary of the Company from August 1982 to June 1989. He has served with the Company or Curtis 1000 Inc., a wholly-owned subsidiary of the Company, for over 37 years.
The Board of Directors elects officers annually in April for one year terms or until their successors are elected and qualified. Officers are subject to removal by the Board of Directors at any time.
PART II
ITEM 5
ITEM 5 - MARKET FOR REGISTRANT'S COMMON EQUITY AND RELATED STOCKHOLDER MATTERS
Information relating to the market for, holders of and dividends paid on the Company's Common Stock is set forth under the captions "Quarterly Data 1994," "Quarterly Data 1993," "Stock Exchange Listing," and "Shareholders of Record," on pages 14, 15 and 30 of the Company's 1994 Annual Report, which information is incorporated herein by reference.
ITEM 6
ITEM 6 - SELECTED FINANCIAL DATA
Selected consolidated financial data for the Company for each year of the eleven year period ended December 31, 1994 is set forth under the caption "Eleven Year Financial Review" on pages 14 and 15 in the Company's 1994 Annual Report, which information is incorporated herein by reference.
ITEM 7
ITEM 7 - MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
A discussion of the Company's financial condition and results of operations at and for the dates and periods covered by the consolidated financial statements set forth in the Company's 1994 Annual Report is set forth under the caption "Management's Discussion and Analysis" on pages 25 through 27 of the Company's 1994 Annual Report. Such discussion is incorporated herein by reference.
ITEM 8
ITEM 8 - FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA
The following Consolidated Financial Statements of the Company and its subsidiaries, together with the Independent Auditors' Report, which are set forth on pages 16 through 24 in the Company's 1994 Annual Report, are incorporated herein by reference:
Consolidated Statements of Income for each of the three years in the period ended December 31, 1994
Consolidated Balance Sheets as of December 31, 1994 and 1993
Consolidated Statements of Cash Flows for each of the three years in the period ended December 31, 1994
Notes to Consolidated Financial Statements
The supplementary consolidated financial information regarding the Company which is required by Item 302 of Regulation S-K is set forth under the caption "Quarterly Data 1994" on page 14 and "Quarterly Data 1993" on page 15 of the Company's 1994 Annual Report. Such information is incorporated herein by reference.
ITEM 9
ITEM 9 - CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL DISCLOSURE
There has been no change of or disagreements with independent accountants by the Company in the past two fiscal years or subsequently.
PART III
ITEM 10
ITEM 10 - DIRECTORS AND EXECUTIVE OFFICERS OF THE REGISTRANT
Information relating to the directors of the Company is set forth in "Proposal 1 - Election of Directors" under the captions "Nominees," "Information Regarding Nominees and Directors" and "Meetings and Committees of the Board of Directors" in the Company's definitive Proxy Statement for its 1995 Annual Meeting of Shareholders to be held on April 26, 1995 (the "Proxy Statement"). Such information is incorporated herein by reference. Pursuant to Instruction 3 of Item 401(b) of Regulation S-K and General Instruction G(3) of Form 10-K, information relating to the executive officers of the Company is set forth in Part I, Item 4(A) of this Report under the caption "Executive Officers of the Registrant." Information regarding compliance by directors and executive officers of the Company and owners of more than ten percent of the Company's Common Stock with the reporting requirements of Section 16(a) of the Securities Exchange Act of 1934, as amended, is set forth in the Proxy Statement under the caption "Compliance with Section 16(a) of the Securities Exchange Act of 1934." Such information is incorporated herein by reference.
ITEM 11
ITEM 11 - EXECUTIVE COMPENSATION
Information relating to compensation of the executive officers and directors of the Company is set forth in "Proposal 1 - Election of Directors" under the caption "Director Compensation" and in "Executive Compensation" in the Proxy Statement. Such information is incorporated herein by reference.
ITEM 12
ITEM 12 - SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
Information regarding ownership of the Company's $2.00 par value Common Stock by certain persons is set forth in "Voting" under the caption "Principal Shareholders" and in "Proposal 1 - Election of Directors" under the caption "Information Regarding Nominees and Directors" and under the caption "Executive Compensation" in the Proxy Statement. Such information is incorporated herein by reference.
ITEM 13
ITEM 13 - CERTAIN RELATIONSHIPS AND RELATED TRANSACTION
The Company is aware of no relationships or transactions between the Company and affiliates of the Company which are required to be reported under this Item 13.
PART IV
ITEM 14
ITEM 14 - EXHIBITS, FINANCIAL STATEMENT SCHEDULES AND REPORTS ON FORM 8-K
(a) Documents filed as part of this Report:
1. Financial Statements
The Consolidated Financial Statements and the Independent Auditors' Report thereon which are required to be filed as part of this Report are included in the Company's 1994 Annual Report and are set forth in and incorporated by reference in Part II, Item 8 hereof. These Consolidated Financial Statements are as follows:
Consolidated Statements of Income for each of the three years in the period ended December 31, 1994
Consolidated Balance Sheets as of December 31, 1994 and 1993
Consolidated Statements of Cash Flows for each of the three years in the period ended December 31, 1994
Notes to Consolidated Financial Statements
2. Financial Statement Schedules
The financial statement schedule filed as part of this Report pursuant to Article 12 of Regulation S-X and the Independent Auditors' Report in connection therewith are contained in the Index of Financial Statement Schedule on page S-1 of this Report. All other schedules for which provision is made in the applicable accounting regulations of the Securities and Exchange Commission have been omitted because such schedules are not required under the related instructions or are inapplicable or because the information required is included in the Consolidated Financial Statements or notes thereto.
3. Exhibits
The exhibits required to be filed as part of this Report are set forth in the Index of Exhibits on page E-1 of this Report.
(b) Reports on Form 8-K:
No current reports on Form 8-K were filed by the Registrant during the last quarter of the period covered by this report.
(c) The exhibits required to be filed as part of this Report are set forth in the Index of Exhibits on page E-1 of this report
(d) The financial statement schedules required to be filed as part of this Report are set forth in the Index of Financial Statement Schedules on page S-1 of this Report.
SIGNATURES
Pursuant to the requirements of Section 13 or 15(d) 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.
AMERICAN BUSINESS PRODUCTS, INC.
BY: /S/ Thomas R. Carmody ------------------------------------- Thomas R. Carmody Director, Chairman of the Board and Chief Executive Officer
DATE: March 20, 1995
Pursuant to the requirements of the Securities Exchange Act of 1934, this Report has been signed below by the following persons on behalf of the registrant and in the capacities and on the date indicated.
AMERICAN BUSINESS PRODUCTS, INC.
INDEX OF FINANCIAL STATEMENT SCHEDULES
S-1
INDEPENDENT AUDITORS' REPORT
American Business Products, Inc.:
We have audited the consolidated financial statements of American Business Products, Inc. and subsidiaries as of December 31, 1994 and 1993, and for each of the three years in the period ended December 31, 1994, and have issued our report thereon dated February 24, 1995; such financial statements and report are included in your 1994 Annual Report to Shareholders and are incorporated herein by reference. Our audits also included the consolidated financial statement schedule of American Business Products, Inc. and subsidiaries listed in Item 14. This consolidated financial statement schedule is the responsibility of the Company's management. Our responsibility is to express an opinion based on our audits. In our opinion, such consolidated financial statement schedule, when considered in relation to the basic consolidated financial statements taken as a whole, presents fairly in all material respects the information set forth therein.
/S/ DELOITTE & TOUCHE LLP - ------------------------- DELOITTE & TOUCHE LLP
Atlanta, Georgia February 24, 1995
SCHEDULE VIII
AMERICAN BUSINESS PRODUCTS, INC. AND SUBSIDIARIES VALUATION RESERVES (IN THOUSANDS)
(1) Reserve assumed from Discount Labels, Inc. on September 1, 1993. (2) Deductions represent uncollectible accounts charged off, less recoveries.
S-3
AMERICAN BUSINESS PRODUCTS, INC. INDEX OF EXHIBITS
Where an exhibit is filed by incorporation by reference to a previously filed registration statement or report, such registration statement or report is identified in parentheses.
E-1
(h) Form of 1993 Directors Stock Incentive Plan.
10.2 Agreement for the Purchase of Stock dated as of September 21, 1990 by and among the Company, Edward C. Leavy, Edward C. Leavy, Executor under the will of Jean L. Leavy, and James B. Kauffman relating to the purchase of Jen-Coat, Inc. (Exhibit 2, Current Report on Form 8-K, dated October 1, 1990).
10.3 (a) Stock Purchase Agreement dated September 1, 1993 among the Company, Home Safety Equipment Co., Inc., and William Frederick Conway, Sr., Betty Conway, Allen C. Conway, Winifred Conway Arledge, William Frederick Conway, Jr., Winifred B. Arledge, QSST Trust #1, Winifred B. Arledge, QSST Trust #2, Allen C. Conway, QSST Trust #1, Allen C. Conway, QSST Trust #2, Allen C. Conway, QSST Trust #3, and William Frederick Conway, Jr., QSST Trust #1, William Frederick Conway, Jr., QSST Trust #2 (Exhibit 2, Current Report on Form 8-K dated September 13, 1993).
(b) Non-Competition Agreement dated as of August 10, 1993 by and among William Frederick Conway, Sr., Betty Conway, Allen C. Conway, Winifred Conway Arledge, Sol A. Arledge, and William Frederick Conway, Jr. and the Company (Exhibit 99.1, Current Report on Form 8-K, dated September 13, 1993).
13 Pages 14 through 27, and page 30 of the Company's 1994 Annual Report which are incorporated herein by reference.
21 Subsidiaries of the Registrant.
23 Consent of Independent Auditors.
24 Power of Attorney.
E-2