Paxar Reports First Quarter Results in Line With Company Guidance

Apr 25, 2001, 01:00 ET from Paxar Corporation

    WHITE PLAINS, N.Y., April 25 /PRNewswire/ -- Paxar Corporation (NYSE:   PXR)
 today reported sales of $155 million for the first quarter ended March 31,
 2001, an increase of 6% over 2000's first quarter sales of $146 million,
 excluding the sales of IIMAK, which was sold in March 2000.  Including IIMAK,
 sales in the first quarter of 2000 were $160 million.
     Net income was $7.2 million, or $0.17 per share, for the first quarter of
 2001 as compared to pro forma earnings per share of $0.15 in last year's first
 quarter.  The pro forma earnings per share exclude a $40.3 million after-tax
 gain on the sale of IIMAK and IIMAK's $2.1 million contribution to operating
 income. Reported net income for the first quarter of 2000 was $48.6 million,
 or $1.03 per share.
     Commenting on the first quarter, Arthur Hershaft, Chairman and Chief
 Executive Officer, said, "Like many other companies, our business was impacted
 by the slowdown in the U.S. economy.  On a positive note, this slowdown was
 mitigated by better conditions in our European businesses.  Looking forward,
 we are cautiously optimistic about the current quarter based on improved
 incoming orders over the last several weeks."
     Paul J. Griswold, President and Chief Operating Officer, stated, "We
 recognize that our business is not immune to the current economic conditions.
 As a result, we have taken a number of initiatives to enhance our cash
 position.  Specifically, we are sharply focused on cost containment and
 productivity improvements throughout our operations, and will benefit from a
 lower fixed cost base when the economy turns up.  Additionally, we are
 carefully monitoring our capital expenditures to ensure that projects provide
 an immediate return on our investment.  On the balance sheet, we are focused
 on improving our working capital.  In summary, these key initiatives will
 serve to strengthen Paxar operationally and financially, enhancing our
 position as the market leader for the future.
     Mr. Griswold added, "We continue to deliver on our strategy of providing
 one-stop shopping, single sourcing solutions to retailers and apparel
 manufacturers on a truly global basis.  Through select geographic expansion,
 and our broad range of products and services, we are able to provide our
 customers with value-added solutions that meet their multi-national
 manufacturing needs.  In addition, our strong relationships with leaders in
 the global retail market provide us with significant opportunities to cross-
 sell our products to existing customers.  Particularly during these times,
 Paxar's strong balance sheet is a key strength, providing us with the
 flexibility to aggressively pursue select acquisitions in global markets.
 Going forward, we will continue to seek opportunities to leverage our unique
 strengths in the global retail and apparel markets."
 
     Outlook
     Mr. Hershaft concluded,  "It is impossible to predict when the U.S.
 economy will resume its growth.  However, we remain cautious about our outlook
 for 2001.  For the second quarter, we anticipate that earnings per share will
 equal or exceed $0.25 and that sales will be in the range of $165 million to
 $170 million."
 
     Paxar is a global leader in providing innovative, value-added
 identification and tracking solutions to retailers and apparel manufacturers.
 
     Statements in this release about the future outlook related to Paxar
 Corporation involve a number of factors affecting the Company's businesses and
 operations that could cause actual future results to differ materially from
 those contemplated by forward-looking statements.  Forward-looking statements
 include those indicated by words such as "expect."  Affecting factors include
 general economic conditions and the performance of the Company's operations
 within its prevailing business markets around the world, as well as other
 factors set forth in Paxar's 2000 Form 10-K Annual Report.
 
     For more information on Paxar, call Investor Relations: 914-697-6862,
 or visit the company's Web site: www.paxar.com .
 
 
     PAXAR CORPORATION
     Consolidated Statements of Income
     (in millions, except per share amounts)
 
 
                                                         Three Months Ended
                                                              March 31,
                                                       2001              2000
                                                            (unaudited)
     Sales                                           $155.3            $160.2
     Cost of sales                                     96.5              99.1
         Gross profit                                  58.8              61.1
     Selling, general and administrative
      expense                                          44.9              44.5
     Amortization of intangibles                        1.5               1.3
         Operating income                              12.4              15.3
     Gain on sale of IIMAK                              -                50.3
     Interest expense, net                              2.4               2.9
         Income before taxes                           10.0              62.7
     Taxes on income                                    2.8              14.1
         Net income                                    $7.2             $48.6
 
     Basic earnings per common share                  $0.17             $1.04
     Diluted earnings per common share                $0.17             $1.03
 
     Average common shares outstanding
        Basic                                          42.1              46.7
        Diluted                                        42.6              47.0
 
 
     PAXAR CORPORATION
     Consolidated Balance Sheets
     (in millions)
 
 
                                                     March 31,         Dec. 31,
                                                      2001              2000
                                                   (unaudited)        (audited)
     ASSETS
     Current assets:
     Cash & cash equivalents                          $46.7             $44.3
     Receivables                                      105.6             108.9
     Inventories                                       76.6              80.2
     Other current assets                              19.9              10.1
          Total current assets                        248.8             243.5
     Property, plant and equipment, at
      cost                                            252.3             254.8
       Accumulated depreciation                      (107.0)           (104.6)
          Net property, plant and
           equipment                                  145.3             150.2
     Goodwill                                         182.6             187.1
     Other assets                                      23.3              22.6
                                                     $600.0            $603.4
 
     LIABILITIES AND SHAREHOLDERS' EQUITY
     Current liabilities:
     Due to banks                                      $1.0              $0.9
     Current maturities of long-term debt               0.3               0.1
     Accounts payable and accrued
      liabilities                                      88.8              96.2
     Accrued taxes on income                           24.2              22.7
          Total current liabilities                   114.3             119.9
     Long-term debt                                   165.3             165.8
     Deferred income taxes                              5.3               5.5
     Other liabilities                                  8.2               8.9
     Shareholders' equity                             306.9             303.3
                                                     $600.0            $603.4
 
 
     PAXAR CORPORATION
     First Quarter 2001 Income Statements (Unaudited)
     (in millions, except per share amounts)
 
                                          (A)     (B)     (C)     (D)
                                                       2000 Pro forma
                                                        eliminating:
                                                       Gain on  IIMAK's
                                                        sale   Operations
                                                       of IIMAK         %change
                                             Actual                   (A)vs.(D)
                                          2001    2000
 
         Sales                           $155.3  $160.2  $160.2  $146.4     6%
         Cost of sales                     96.5    99.1    99.1    89.9
           Gross profit                    58.8    61.1    61.1    56.5     4%
 
         Selling, general and
          administrative expense           44.9    44.5    44.5    42.0     7%
         Amortization of intangibles        1.5     1.3     1.3     1.3
           Operating income                12.4    15.3    15.3   $13.2    -6%
 
         Gain on sale of IIMAK              -      50.3     -
         Interest expense, net              2.4     2.9     2.9
           Income before taxes             10.0    62.7    12.4
         Taxes on income                    2.8    14.1     4.1
           Net income                      $7.2   $48.6    $8.3
 
         Ratios:
           Gross margin                   37.9%   38.1%   38.1%   38.6%
           SG&A to sales                  28.9%   27.8%   27.8%   28.7%
           Operating margin                8.0%    9.6%    9.6%    9.0%
           Net margin                      4.6%   30.3%    5.2%   NA
 
         Effective tax rate               28.0%   22.5%   33.1%   NA
 
         Basic earnings per common share  $0.17   $1.04   $0.18   NA
         Diluted earnings per common
          share                           $0.17   $1.03   $0.18   NA
 
         Average common shares
          outstanding:
           Basic                           42.1    46.7    46.7   NA
           Diluted                         42.6    47.0    47.0   NA
 
 
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SOURCE Paxar Corporation
    WHITE PLAINS, N.Y., April 25 /PRNewswire/ -- Paxar Corporation (NYSE:   PXR)
 today reported sales of $155 million for the first quarter ended March 31,
 2001, an increase of 6% over 2000's first quarter sales of $146 million,
 excluding the sales of IIMAK, which was sold in March 2000.  Including IIMAK,
 sales in the first quarter of 2000 were $160 million.
     Net income was $7.2 million, or $0.17 per share, for the first quarter of
 2001 as compared to pro forma earnings per share of $0.15 in last year's first
 quarter.  The pro forma earnings per share exclude a $40.3 million after-tax
 gain on the sale of IIMAK and IIMAK's $2.1 million contribution to operating
 income. Reported net income for the first quarter of 2000 was $48.6 million,
 or $1.03 per share.
     Commenting on the first quarter, Arthur Hershaft, Chairman and Chief
 Executive Officer, said, "Like many other companies, our business was impacted
 by the slowdown in the U.S. economy.  On a positive note, this slowdown was
 mitigated by better conditions in our European businesses.  Looking forward,
 we are cautiously optimistic about the current quarter based on improved
 incoming orders over the last several weeks."
     Paul J. Griswold, President and Chief Operating Officer, stated, "We
 recognize that our business is not immune to the current economic conditions.
 As a result, we have taken a number of initiatives to enhance our cash
 position.  Specifically, we are sharply focused on cost containment and
 productivity improvements throughout our operations, and will benefit from a
 lower fixed cost base when the economy turns up.  Additionally, we are
 carefully monitoring our capital expenditures to ensure that projects provide
 an immediate return on our investment.  On the balance sheet, we are focused
 on improving our working capital.  In summary, these key initiatives will
 serve to strengthen Paxar operationally and financially, enhancing our
 position as the market leader for the future.
     Mr. Griswold added, "We continue to deliver on our strategy of providing
 one-stop shopping, single sourcing solutions to retailers and apparel
 manufacturers on a truly global basis.  Through select geographic expansion,
 and our broad range of products and services, we are able to provide our
 customers with value-added solutions that meet their multi-national
 manufacturing needs.  In addition, our strong relationships with leaders in
 the global retail market provide us with significant opportunities to cross-
 sell our products to existing customers.  Particularly during these times,
 Paxar's strong balance sheet is a key strength, providing us with the
 flexibility to aggressively pursue select acquisitions in global markets.
 Going forward, we will continue to seek opportunities to leverage our unique
 strengths in the global retail and apparel markets."
 
     Outlook
     Mr. Hershaft concluded,  "It is impossible to predict when the U.S.
 economy will resume its growth.  However, we remain cautious about our outlook
 for 2001.  For the second quarter, we anticipate that earnings per share will
 equal or exceed $0.25 and that sales will be in the range of $165 million to
 $170 million."
 
     Paxar is a global leader in providing innovative, value-added
 identification and tracking solutions to retailers and apparel manufacturers.
 
     Statements in this release about the future outlook related to Paxar
 Corporation involve a number of factors affecting the Company's businesses and
 operations that could cause actual future results to differ materially from
 those contemplated by forward-looking statements.  Forward-looking statements
 include those indicated by words such as "expect."  Affecting factors include
 general economic conditions and the performance of the Company's operations
 within its prevailing business markets around the world, as well as other
 factors set forth in Paxar's 2000 Form 10-K Annual Report.
 
     For more information on Paxar, call Investor Relations: 914-697-6862,
 or visit the company's Web site: www.paxar.com .
 
 
     PAXAR CORPORATION
     Consolidated Statements of Income
     (in millions, except per share amounts)
 
 
                                                         Three Months Ended
                                                              March 31,
                                                       2001              2000
                                                            (unaudited)
     Sales                                           $155.3            $160.2
     Cost of sales                                     96.5              99.1
         Gross profit                                  58.8              61.1
     Selling, general and administrative
      expense                                          44.9              44.5
     Amortization of intangibles                        1.5               1.3
         Operating income                              12.4              15.3
     Gain on sale of IIMAK                              -                50.3
     Interest expense, net                              2.4               2.9
         Income before taxes                           10.0              62.7
     Taxes on income                                    2.8              14.1
         Net income                                    $7.2             $48.6
 
     Basic earnings per common share                  $0.17             $1.04
     Diluted earnings per common share                $0.17             $1.03
 
     Average common shares outstanding
        Basic                                          42.1              46.7
        Diluted                                        42.6              47.0
 
 
     PAXAR CORPORATION
     Consolidated Balance Sheets
     (in millions)
 
 
                                                     March 31,         Dec. 31,
                                                      2001              2000
                                                   (unaudited)        (audited)
     ASSETS
     Current assets:
     Cash & cash equivalents                          $46.7             $44.3
     Receivables                                      105.6             108.9
     Inventories                                       76.6              80.2
     Other current assets                              19.9              10.1
          Total current assets                        248.8             243.5
     Property, plant and equipment, at
      cost                                            252.3             254.8
       Accumulated depreciation                      (107.0)           (104.6)
          Net property, plant and
           equipment                                  145.3             150.2
     Goodwill                                         182.6             187.1
     Other assets                                      23.3              22.6
                                                     $600.0            $603.4
 
     LIABILITIES AND SHAREHOLDERS' EQUITY
     Current liabilities:
     Due to banks                                      $1.0              $0.9
     Current maturities of long-term debt               0.3               0.1
     Accounts payable and accrued
      liabilities                                      88.8              96.2
     Accrued taxes on income                           24.2              22.7
          Total current liabilities                   114.3             119.9
     Long-term debt                                   165.3             165.8
     Deferred income taxes                              5.3               5.5
     Other liabilities                                  8.2               8.9
     Shareholders' equity                             306.9             303.3
                                                     $600.0            $603.4
 
 
     PAXAR CORPORATION
     First Quarter 2001 Income Statements (Unaudited)
     (in millions, except per share amounts)
 
                                          (A)     (B)     (C)     (D)
                                                       2000 Pro forma
                                                        eliminating:
                                                       Gain on  IIMAK's
                                                        sale   Operations
                                                       of IIMAK         %change
                                             Actual                   (A)vs.(D)
                                          2001    2000
 
         Sales                           $155.3  $160.2  $160.2  $146.4     6%
         Cost of sales                     96.5    99.1    99.1    89.9
           Gross profit                    58.8    61.1    61.1    56.5     4%
 
         Selling, general and
          administrative expense           44.9    44.5    44.5    42.0     7%
         Amortization of intangibles        1.5     1.3     1.3     1.3
           Operating income                12.4    15.3    15.3   $13.2    -6%
 
         Gain on sale of IIMAK              -      50.3     -
         Interest expense, net              2.4     2.9     2.9
           Income before taxes             10.0    62.7    12.4
         Taxes on income                    2.8    14.1     4.1
           Net income                      $7.2   $48.6    $8.3
 
         Ratios:
           Gross margin                   37.9%   38.1%   38.1%   38.6%
           SG&A to sales                  28.9%   27.8%   27.8%   28.7%
           Operating margin                8.0%    9.6%    9.6%    9.0%
           Net margin                      4.6%   30.3%    5.2%   NA
 
         Effective tax rate               28.0%   22.5%   33.1%   NA
 
         Basic earnings per common share  $0.17   $1.04   $0.18   NA
         Diluted earnings per common
          share                           $0.17   $1.03   $0.18   NA
 
         Average common shares
          outstanding:
           Basic                           42.1    46.7    46.7   NA
           Diluted                         42.6    47.0    47.0   NA
 
 
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 SOURCE  Paxar Corporation