ITEM 1. BUSINESS
GENERAL
Multi-Color is a leading U.S. manufacturer of specialty labels for major global consumer-product companies for liquid detergents, laundry-care products, household cleaners, beverages and health and beauty aids. The Company offers in-mold labels (IML), specialty gravure-printed labels and recently began offering, through acquisitions completed in December 1999 and June 2000, pressure-sensitive and heat-shrink labels. In addition to the Company's label offerings, the Company also produces gravure cylinders for use in the Company's printing processes as well as for sale to outside customers.
The Company believes that it is the world leader in producing IML labels, based on its share of the IML market. IML labels are complex and technologically demanding products. IML labels are labels that are affixed to blow-molded plastic containers as the containers are being molded. The finished IML product is a finely detailed, strikingly attractive label that performs consistently well for plastic container manufacturers and adds marketing value and product security for consumer product companies. The Company sells its labels in the United States, Mexico and South America. Multi-Color currently produces labels for approximately 40 customers.
The Company's executive offices are located at 205 West Fourth Street, Cincinnati, Ohio 45202, and its telephone number is (513)381-1480. Unless the context otherwise requires, the "Company" and "Multi-Color" refer to Multi-Color Corporation.
PRODUCTS
The Company's predecessors began producing paper labels in 1918 and the Company has maintained customer relationships that have existed since that time. Multi-Color provides printed labels to consumer product companies. These labels are used to wrap products or are affixed to finished product containers. The labels are printed for liquid detergents, laundry-care products, household cleaners, juices and health and beauty aids. The Company produces gift wrap as well and also sells unprinted substrates to other label printing companies.
In-Mold Labels (IML): - ---------------------
In 1980, Multi-Color developed the in-mold label in response to the increasing use of blow-molded plastic containers. Working in conjunction with a customer, the Company and a leading supplier of blow-molded plastic containers developed the in-mold label process which applies a label to a plastic container as the container is being formed in the mold cavity. Multi-Color developed the label and the method of applying the heat-activated adhesive to the label. The in-mold label solves many of the quality problems associated with conventional labels and produces a more attractive labeled container.
The in-mold label is a technologically demanding product. Each component of the label producing process, starting with subtrates (the base material for the label) and the laser-exposed gravure cylinder to the printing with up to eight colors - along with over-coats and adhesives - requires a special expertise for success. The Company believes that its strength lies in several areas, two of which are the substrates used in the printing process and the production of the gravure cylinder.
Multi-Color has developed proprietary substrates that the Company uses in its printing process and also sell to other printers, both in the United States and abroad. There are several critical characteristics of a successful substrate. The material needs a proper coefficient of friction so that the finished label is easily and consistently picked up and applied to the blow-molded container. A second is the ability to hold the label's inks, including metallics and flourescents, overlay varnishes and adhesives. Still another, is the ability to lay smoothly, without wrinkle or bulge, when applied to a very hot, just molded plastic container that will quickly shrink, along with the label, as its temperature falls.
Technology for the gravure cylinder is another key competitive advantage for the Company. At the Company's Laser Graphic Systems plant in Erlanger, Kentucky, the Company employs laser-exposing and chemical-engraving technology developed by Think Laboratories of Japan to produce gravure cylinders. Currently, Multi-Color is the only cylinder manufacturer in the United States with this technology. The Think process has several advantages. It is quicker and it is less costly than other engraving processes. Equally important, this technology creates cells with fineness of depth and surface size to eliminate the stairstep edges that have limited the application of gravure printing. It creates smooth and feathered patterns of color. It also gives clear definition to ever smaller type sizes required as companies add more information and more languages to their labels. The Company also uses a copper ballard shell technology that cuts cost and time from cylinder production.
Pressure-sensitive labels: - --------------------------
In December 1999, Multi-Color began offering pressure-sensitive labels to customers in conjunction with the acquisition of Buriot International, Inc. ("Buriot"). In this acquisition, the Company acquired a two year old manufacturing facility which is equipped with an offset press and a flexographic press. Both presses are equipped with interstation ultraviolet (UV) drying equipment. The flexographic press is also equipped for hot foil stamping and rotary screen capabilities.
Heat-shrink labels: - -------------------
In June 2000, Multi-Color began offering heat-shrink labels and tamper-evident bands in conjunction with the acquisition of Uniflex Corporation ("Uniflex"). In this acquisition, the Company acquired a manufacturing facility which is equipped with a gravure press and finishing equipment. Heat-shrink labels are form-fitting labels which can provide for 360 degree printing, enabling customers to cover the complete circumference of a bottle with colorful images.
These acquisitions allow the Company to become a "one-stop-shop" for a customer's label requirements, offering a variety of label applications.
SALES AND MARKETING
Multi-Color receives annual or quarterly requirements for labels from its customers and ships against orders received, except in certain cases where the Company has agreements with minimum purchase requirements.
The Company's marketing efforts are directed toward obtaining new customers and increasing the Company's share of existing customers' overall label requirements by meeting their specialized and technical label needs. The Company's marketing strategy is to emphasize those sectors where Multi-Color's equipment and expertise distinguish the Company from other label producers. The Company maintains a marketing and technical support staff of 15 people who are responsible for developing innovative solutions, including new labels, for customers' label needs.
Approximately 63% of the Company's total sales in fiscal 2000 were to three customers: The Procter & Gamble Company, 39% (divided among six product categories and three separate purchasing groups), Alvin Press, 13% (Alvin Press is a long-standing supplier to the Unilever Corporation) and Wm. Wrigley Jr. Company, 11%. The loss or substantial reduction of the business of any of the major customers in a particular year could have a material adverse effect on the Company.
ACQUISITIONS
The Company is pursuing acquisitions in order to contribute to the Company's growth. The Company believes that acquisitions are one method of increasing its presence in existing markets, expanding into new markets, gaining new product offerings and improving operating efficiencies through economies of scale. The printing industry is highly fragmented and offers many opportunities for acquisitions. During fiscal 2000, the Company completed its first acquisition. In December 1999, the Company, through its wholly-owned subsidiary MCC-Batavia, LLC, acquired the assets of Buriot, a Batavia, Ohio label printing company. Total consideration consisted of the assumption of $6,250,000 of industrial revenue bond debt and the assumption of certain operating liabilities. Assets acquired included property, plant and equipment, inventory, accounts receivable and net cash of approximately $2,078,000.
Recently, in June 2000, the Company completed its second acquisition. The Company, through its wholly owned subsidiary, MCC-Uniflex, LLC, acquired the assets and assumed certain liabilities of Uniflex Corporation, a heat-shrink label printing company with a production facility in Las Vegas, Nevada and offices in Anaheim Hills, California. Total consideration paid was $7,000,000 cash, less cash received of $800,000.
The Company continually seeks to identify and evaluate potential acquisition candidates and from time to time, engages in discussions with such candidates. Presently management has not entered into any agreements relating to new acquisitions and future acquisitions may not occur.
PRINTING OPERATIONS
Multi-Color's printing equipment consists of four gravure printing presses in its Scottsburg plant, an offset press and a flexographic press in its Batavia plant and a gravure printing press in its Las Vegas plant. All of the Company's presses are capable of multi-color, high-speed and high-quality graphic printing. The Company also has a wide variety of cutting and finishing equipment used to process printed material. The wide range of capabilities and versatility provided by the Company's equipment permits it to respond rapidly to changing customer needs, including the development of new products. The Company believes it has sufficient capacity to meet any expected growth of its products. At March 31, 2000 and March 28, 1999, the label backlog was approximately $2,300,000 and $3,000,000, respectively. All backlog is expected to be completed in the next fiscal year.
RESEARCH AND DEVELOPMENT
Multi-Color believes research and development of new products helps it maintain its leading position in the in-mold label business. While the process for making in-mold labels is not patented, Multi-Color believes its experience and expertise related to the production of in-mold labels have enabled it to maintain its leadership in the in-mold label and substrate market.
The Company's emphasis is to develop and market new products for applications where superior technical characteristics are required. Multi-Color developed and is successfully marketing a range of plastic in-mold labels for applications in which plastic containers are subjected to more demanding physical requirements. Also, the Company works closely with container manufacturers developing improved label products that result in increased efficiencies and lower waste which translates to lower cost for its consumer products customers.
Multi-Color's research and development expenditures totaled $320,000 in fiscal 2000, $340,000 in fiscal 1999 and $447,000 in fiscal 1998.
RAW MATERIALS
Multi-Color purchases proprietary products from a number of printing suppliers which is common in the printing industry. To prevent potential disruptions to its manufacturing facilities, Multi-Color has developed relationships with more than one supply source for each of its critical raw materials. Additionally, its raw material suppliers are major corporations, each demonstrating successful historical performance. Although this should prevent any long term business interruption due to the inability of obtaining raw materials, there could be short term manufacturing disruptions during the customer qualification period for any new raw material source.
COMPETITION
The Company has a large number of competitors in its traditional and pressure sensitive label business and three principal competitors in the in-mold label and substrate business. Some of these competitors in the traditional and pressure sensitive label business have greater financial and other resources than the Company. The three competitors in the in-mold label and substrate business are either private companies or subsidiaries of public companies and the Company cannot access the financial resources of these organizations. Multi-Color could be adversely affected should a competitor develop labels similar or technologically superior to the Company's in-mold label. Although price is an important competitive factor in the Company's business, the Company believes competition is principally dependent upon quality, service, and technical expertise and experience. Customer service, quality and qualification requirements present barriers to new entrants into Multi-Color's markets.
EMPLOYEES
As of March 31, 2000, the Company had 277 employees. Multi-Color considers its labor relations to be good and has not experienced any work stoppages during the previous ten years.
REGULATION
The Company operations are subject to regulation by federal and state environmental protection agencies. To insure ongoing compliance with federal and state environmental protection agency requirements, the Company implemented improved plans of control and environmental compliance procedures throughout fiscal 1999 and 2000. An outside environmental consultant was retained by the Company to monitor environmental compliance. Additionally, the Company made capital investments of approximately $659,000 during fiscal 2000 and 1999 to maintain compliance with federal and state environmental requirements and to improve its existing equipment as part of its ongoing environmental compliance strategy.
The United States Food and Drug Administration regulates the raw materials used in labels for food products. These regulations apply to the consumer products companies for which Multi-Color produces labels. Multi-Color uses materials specified by the consumer products companies in producing labels for food products.
ITEM 2.
ITEM 2. PROPERTIES
Multi-Color operates four production facilities. The Scottsburg, Indiana plant has 112,300 square feet and is situated on 14 acres, 30 miles north of Louisville, Kentucky. The Erlanger, Kentucky facility, housing its Laser Graphic Systems division has approximately 12,000 square feet and is located on approximately 3 acres, 10 miles south of Cincinnati. The Batavia, Ohio plant has approximately 29,000 square feet and is situated on approximately 6 acres, 15 miles northeast of Cincinnati. The Las Vegas, Nevada plant has approximately 41,000 square feet and is located within a business park facility. The Company owns the real estate constituting the Erlanger and Batavia facilities. The Scottsburg plant is leased under a 20 year lease agreement. The Las Vegas plant is leased under an agreement expiring in 2003. The land and buildings of all the plant sites with the exception of the Las Vegas plant, are encumbered by mortgages in favor of the lenders under the Company's credit facility. The Company's executive offices are located at 205 West Fourth Street, Cincinnati, Ohio in approximately 5,000 square feet of leased office space. The Company's properties are in good condition, are well-maintained, and are adequate for the Company's intended uses. During April, 1998, the Company sold its 300,000 square foot building located in Cincinnati. The Company leased approximately 50,000 square feet of the Cincinnati plant for warehouse purposes until March 28, 1999.
ITEM 3.
ITEM 3. LEGAL PROCEEDINGS
None.
ITEM 4.
ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
None during the fourth quarter of the fiscal year ending March 31, 2000.
EXECUTIVE OFFICERS
Francis D. Gerace, 47, was promoted to President and appointed a Director on May 18, 1999 and was elected Chief Executive Officer in August, 1999. Prior to that time Mr. Gerace served as the Company's Vice President of Operations from April 1998 to May 1999. Mr. Gerace held various operating positions and was Director of Strategic Business Systems for Fort James Corporation's Packaging Business from 1993 to 1998. From 1974 to 1993, Mr. Gerace held various general management positions with Conagra, Inc. and Beatrice Foods Company.
Steven G. Mulch, 50, was promoted to Senior Vice President of Sales and Marketing of the Company in April of 2000. He previously held the position of Vice President of Corporate Sales and business Development with the company from April 1998 to April 2000. Prior to joining Multi-Color, Mr. Mulch was Vice President and General Manager of a four plant division of Fort James Corporation's Packaging Business from 1991 to 1998. From 1972 to 1991, Mr. Mulch held various positions with Tenneco, Inc. including general manager of the offset carton converting plant in Grand Rapids, Michigan.
Dawn H. Bertsche, 43, was appointed Vice President of Finance, Chief Financial Officer and Secretary of the Company in August 1999. Prior to joining Multi-Color, Ms. Bertsche was Chief Financial Officer for Hill Top Research, Inc from 1997 to 1999 and held the position of Vice President and Controller and other financial positions, for Clopay Corporation from 1987 to 1997. From 1977 to 1987, Ms. Bertsche held various financial management positions with LSI Lighting Systems, Inc. and Price Waterhouse.
John R. Voelker, 57, was appointed Vice President of Sales and Marketing of the Company in June of 1995. Prior to that time Mr. Voelker served as the Company's Vice President National Accounts from 1992 to 1995 and Vice President Multi-Color Graphics from 1989 to 1992.
Thomas J. Vogt, 51, was appointed Vice President of Specialty Labels in December of 1999. Prior to joining Multi-Color, Mr. Vogt was Vice President of Sales at Gar Doc, Inc. from 1994 to 1999. From 1970 to 1994, Mr. Vogt held various officer and stock ownership positions in companies that he formed in the color separation, computer design and label printing industries.
John P. McKeough, 33, was promoted to Vice President of Operations in June, 2000. Prior to that time he served as Plant Manager of the Company's Scottsburg, Indiana facility. Before joining the Company, he held various production management positions at Fort James Corporation's Packaging Business from 1992 to 1999.
M. John Yamasaki, 58, was appointed Vice President of Sales and Product Development, Heat-Shrink Labels in June, 2000. Prior to joining Multi-Color, he was Chief Executive Officer for Uniflex Corporation from 1987 to 2000.
PART II -------
ITEM 5.
ITEM 5. MARKET FOR THE REGISTRANT'S COMMON STOCK AND RELATED STOCKHOLDER MATTERS
The Company's shares trade in the over-the-counter market under the NASDAQ-NMS symbol LABL. The following table sets forth the high and low sales prices of the Company's common stock ("Common Stock") as reported in the NASDAQ National Market System during fiscal year 1999 and 2000. The Company's stock is thinly traded. Accordingly, the prices below may not be indicative of prices at which a large number of shares can be traded or reflective of prices that would prevail in a more active market.
As of June 16, 2000, there were approximately 410 shareholders of record of the Common Stock.
Multi-Color currently intends to retain its earnings to fund the growth of its business and does not anticipate paying any cash dividends on Common Stock in the foreseeable future. The Company's financing agreements currently prohibit the payment of Common Stock cash dividends.
ITEM 6.
ITEM 6. SELECTED FINANCIAL DATA
(1) Multi-Color maintained a fiscal year of 52 or 53 weeks beginning on the Monday nearest to March 31 through March 28, 1999. Beginning with fiscal 2000, the Company now ends all fiscal years on March 31. (2) Fiscal 1998 results include a restructuring charge of $315, a write down of $438 on certain property, and a $668 loss on sale of assets. (3) Fiscal 2000 results include a write down of $779 on certain property and a tax benefit of $2,553.
ITEM 7.
ITEM 7. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
The following discussion and analysis should be read in conjunction with the Company's Consolidated Financial Statements and notes thereto appearing elsewhere herein.
RESULTS OF OPERATIONS
The following table shows, for the periods indicated, certain components of the Company's consolidated statements of operations as a percentage of net sales and the percentage changes in the dollar amounts of such components compared to the indicated prior period.
COMPARISON OF FISCAL YEARS ENDED MARCH 31, 2000 AND MARCH 28, 1999
Net sales increased $3,545,514 or 7.1% to $53,331,400 in 2000 from $49,785,886 in 1999. The increase in net sales is attributed to an increase in in-mold sales of 7% as well as the acquisition of Buriot in December 1999. Net sales related to the acquisition were approximately $1.4 million for 2000. The Company has been focusing efforts on growing the in-mold label sales while exiting the prime label sales. Prime label sales tend to be a commodity and price intensive sale while in-mold label sales, although price sensitive, involve a much higher degree of technically demanding applications.
Gross profit increased $2,085,013 or 30.1% to $9,014,099 in 2000 from $6,929,086 in 1999. In 2000, gross profit as a percentage of sales was 16.9% as compared to 13.9% in 1999. The increased margins are a direct result of the Company increasing its efficiencies in the production process. By following strict process plans of control, the Company has been able to reduce waste, increase press utilization and reduce raw material costs. Also, during 2000, a 61,000 square foot expansion was completed at the Company's Scottsburg plant. This expansion enabled the Company to locate all of the Scottsburg plant operations in one location. Previously, the Scottsburg location had to rent additional space at other warehouses in order to provide adequate space for all operations and inventory at Scottsburg.
Selling, general and administrative expenses decreased $809,640 or 17.0% to $3,954,672 in 2000 from $4,764,312 in 1999. Expenses as a percentage of sales have decreased to 7.4% in 2000 from 9.6% in 1999. In 1999, the penalty incurred by the Company from the Indiana Department of Environmental Management ("IDEM") of $625,000 was expensed. In 2000, due to the completion of certain capital projects, the penalty was reduced by $225,000. This amount reduced selling, general and administrative costs in 2000.
The Company recorded an impairment loss of $779,024 in fiscal 2000 on a press located in the Scottsburg plant. This press is an older press and not as technologically advanced as the other three presses located at the Scottsburg plant. This press will have limited future use as the Company continues to exit the prime label sales market.
Interest expense increased $178,647 or 15.9% to $1,300,212 in 2000 from $1,121,565 in 1999. The increase in interest expense is caused by the rise during the year in interest rates as well as the Company assuming additional long term debt in the acquisition of Buriot.
An income tax benefit of $2,553,129 was recorded in 2000 as the Company is now able to record the benefit of tax loss carryforwards. Previously, due to the Company's history of net income and losses, a valuation allowance was required to be recorded against the tax loss carryforwards and other deferred tax assets. Currently, based on the Company's history of profitability and other factors, including the Company's belief that it is more likely than not that the net operating loss carryforwards will be recognized in full, a valuation allowance is no longer required.
COMPARISON OF FISCAL YEARS ENDED MARCH 28, 1999 AND MARCH 29, 1998
Net sales increased $2,210,000, or 4.6%, to $49,785,886 in 1999 from $47,575,608 in 1998. In-mold and cylinder sales increased 6.4% or approximately $2,600,000 over 1998 levels. The Company has confidence in the long-term growth of the in-mold label and rotogravure cylinder markets, which is supported by the expansion program in process at the Scottsburg label manufacturing facility.
Gross profit increased $2,089,000, or 43.2%, to $6,929,086 in 1999 from $4,840,344 in 1998. Gross profit as a percentage of sales rose to 13.9% in 1999 from 10.2% in 1998. The increase in gross profit was primarily attributable to improved efficiencies and waste reduction realized at the Scottsburg facility during fiscal 1999 offset by the reclassification of plant administration expenses ($900,000), to cost of goods sold and higher cost product produced in the fiscal 1998 fourth quarter and sold in the first quarter of fiscal 1999.
Selling, general, and administrative expenses decreased $1,778,000 to $4,764,312 in 1999 from $6,542,759 in 1998. The decrease in selling, general and administrative expenses is primarily due to the previously mentioned reclassification of plant administrative expenses ($900,000) to cost of goods sold, cost reductions made in administrative overhead, and expense control offset in part by the Company changing its accrual for environmental matters. As previously disclosed, the Company voluntarily notified officials in Indiana that environmental compliance issues existed at the Scottsburg plant. The Company subsequently announced that IDEM had made an initial proposal for an administrative settlement to resolve the compliance issues which included a settlement of claims for penalties in the amount of $1,277,000 and associated costs. The Company reached an agreement with IDEM to resolve these matters during the fiscal 1999 second quarter. In light of those developments and certain developments in Ohio at that time, the Company increased its environmental reserve by $544,000 during the fiscal 1999 second quarter.
During 1998, the Company accrued a restructuring charge of $314,599 for the previously announced closing of the Cincinnati printing plant to handle severance and benefit obligations associated with the plant closing. There were no restructuring charges incurred in fiscal 2000.
The 1998 impairment loss on long-lived assets represents the loss on sale of the Cincinnati plant which was completed two days subsequent to the end of the fiscal year on March 31, 1998. The amount shown represents the difference between the basis in the property and the selling price.
Interest expense increased to $1,121,565 in 1999 from $1,032,579 in 1998 and was the result of higher average borrowings under the revolving credit line combined with higher average short-term rates.
The Company recorded no amounts for income taxes in 1999 as it anticipates utilizing net operating loss carryforward benefits generated in prior periods. There is no net deferred tax balance.
The Company recorded net income for 1999 of $1,484,000 or an increase of $5,555,000 from the net loss of $(4,071,000) in 1998, due to the factors discussed above.
Liquidity and Capital Resources
Cash flows from operations were $4,271,661 in 2000 and $2,276,658 in 1999. The increase is attributable to an increase in net income offset by a reduction in accounts payable due to the Company utilizing more discount terms from vendors.
Capital expenditures were $2,576,588 in 2000 and $1,416,128 in 1999. Capital expenditures were funded either through cash flow from operations or through the Company's revolving credit agreement. Capital expenditures relate primarily to new machinery installed at the Company's various plant locations and leasehold improvements at the Company's Scottsburg facility.
Cash flows from investing activities were $933,125 in 2000 as compared to a cash use of $45,070 in 1999. The increase in 2000 is attributed to the acquisition of Buriot in December 1999.
The Company is dependent on availability under its Revolving Credit Agreement, approximately $1,500,000 at March 31, 2000, and its operations to provide for cash needs. The Company entered into a credit agreement with PNC Bank, Ohio, National Association and Comerica Bank on June 22, 1998 which is a restatement of its prior credit agreements. The credit agreement, which has been amended several times, provides for available borrowings under a revolving line of credit up to a maximum of $5,000,000, subject to certain borrowing base limitations. Under the terms of the credit agreement, the Company is subject to a number of financial covenants. The financial covenants require the Company to maintain certain leverage, working capital and cash flow ratios.
On June 5, 2000, the Company entered into a new credit agreement with PNC Bank and a new lender. The credit agreement provides for a revolving line of credit of up to $5,000,000 and an acquisition facility of up to $7,200,000. Terms and covenants are substantially the same as in prior agreements, however, interest rates are more favorable. The acquisition facility was utilized as of June 5, 2000 when the Company completed its acquisition of Uniflex.
The Company believes that cash flow from operations and availability under the revolving line of credit are sufficient to meet its capital requirements and debt service requirements for fiscal 2001. From time to time the Company reviews potential acquisitions of businesses. While the Company has no present commitments to acquire any businesses, such an acquisition may require the Company to issue additional equity or incur additional debt.
Inflation
The Company does not believe that its operations have been materially affected by inflation.
Impact of Year 2000
The Company's Year 2000 compliance program was designed to ensure that the Company's computer systems and applications would function properly beyond 1999. As a result of this program, the Company experienced no significant problems affecting its business operations related to the Year 2000 issue. The Company does not expect any future problems arising from Year 2000 issues that would have a material impact on the Company's financial statements
ITEM 7A.
ITEM 7A. QUANTITIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK
The Company is exposed to market risks from changes in interest rates and certain of its outstanding debt. The outstanding loan balance under the Company's bank credit facility bears interest at a variable rate based on prevailing short-term interest rates in the United States and Europe. Based on the last fiscal year's average outstanding debt, 100 basis point change in interest rate would change interest expense by approximately $166,000. The Company does not presently use financial or derivative instruments to manage its interest costs. The Company has minimal foreign exchange risks.
ITEM 8.
ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA
Index to Consolidated Financial Statements and Financial Statement Schedules
PART III --------
CONSOLIDATED FINANCIAL STATEMENTS
All Financial Statement Schedules have been omitted because either they are not required or the information is included in the financial statements and notes thereto.
REPORT OF INDEPENDENT CERTIFIED PUBLIC ACCOUNTANTS
To the Shareholders and Directors of Multi-Color Corporation:
We have audited the accompanying consolidated balance sheets of Multi-Color Corporation (an Ohio corporation) as of March 31, 2000 and March 28, 1999, and the related consolidated statements of operations, shareholders' investment, and cash flows for each of the three years in the period ended March 31, 2000. These financial statements are the responsibility of the Company's management. Our responsibility is to express an opinion on these financial statements based on our audits.
We conducted our audits in accordance with generally accepted auditing standards. Those standards require that we plan and perform the audits to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audits provide a reasonable basis for our opinion.
In our opinion, the financial statements referred to above present fairly, in all material respects, the consolidated financial position of Multi-Color Corporation as of March 31, 2000 and March 28, 1999, and the consolidated results of their operations and their consolidated cash flows for each of the three years then ended in conformity with generally accepted accounting principles.
Grant Thornton LLP
May 3, 2000, except for Note 16 as to which the date is June 5, 2000. Cincinnati, Ohio
CONSOLIDATED STATEMENTS OF OPERATIONS
For the Years Ended March 31, 2000, March 28, 1999 and March 29, 1998
THE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS ARE AN INTEGRAL PART OF THESE STATEMENTS.
CONSOLIDATED BALANCE SHEETS
As of March 31, 2000 and March 28, 1999
CONSOLIDATED STATEMENTS OF SHAREHOLDERS' INVESTMENT
For the Years Ended March 31, 2000, March 28, 1999 and March 29, 1998
CONSOLIDATED STATEMENTS OF CASH FLOWS
For the Years Ended March 31, 2000, March 28, 1999 and March 29, 1998
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
March 31, 2000, March 28, 1999 and March 29, 1998
(1) THE COMPANY
Multi-Color Corporation (the Company), headquartered in Cincinnati, Ohio, supplies printed labels and engravings to various name brand consumer products companies located primarily in the United States. The Company has plants located in Scottsburg, Indiana, Batavia, Ohio and Erlanger, Kentucky.
(2) SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
FISCAL YEAR References to fiscal 2000, 1999 and 1998 are for the fiscal years ended March 31, 2000, March 28, 1999 and March 29, 1998, respectively. Beginning in 2000, the Company's fiscal year ends on March 31.
PRINCIPLES OF CONSOLIDATION The consolidated financials statements include the accounts of the Company and its wholly-owned subsidiaries. All significant intercompany transactions have been eliminated.
REVENUE RECOGNITION Revenue is recognized on sales of products when the customer receives title to the goods, generally upon delivery.
INVENTORIES Inventories are stated at the lower of FIFO (first-in, first-out) cost or market. Inventories as of year-end consisted of the following:
2000 1999 - -------------------------------------------------------------------------------- Finished goods $2,649,939 $2,390,765 Work-in-process 820,293 1,097,675 Raw materials 1,250,750 955,431 - -------------------------------------------------------------------------------- $4,720,982 $4,443,871 ================================================================================
Effective March 30, 1998, the Company elected to change its method of inventory valuation to encompass a more complete absorption of overhead costs in inventory. The cumulative effect of this accounting change was to increase income for the fiscal year ended March 28, 1999 by $224,000 and has been separately identified on the consolidated statement of operations. Information is not available to determine the effect of the change on net loss for the fiscal year ended March 29, 1998.
PROPERTY, PLANT AND EQUIPMENT Property, plant and equipment consisted of the following as of year-end:
2000 1999 - -------------------------------------------------------------------------------- Land and buildings $ 6,792,596 $ 3,316,508 Machinery and equipment 27,714,065 25,274,804 Furniture and fixtures 1,382,294 1,207,654 Construction in progress 1,663,601 9,900 - -------------------------------------------------------------------------------- 37,552,556 29,808,866 Accumulated depreciation (13,404,514) (12,094,636) - -------------------------------------------------------------------------------- $ 24,148,042 $ 17,714,230 ================================================================================
Property, plant and equipment are stated at cost. In recognition of the losses experienced by the Company at the former Cincinnati location in prior years, the Company recorded a $3,800,000 impairment loss in 1995 on certain long-lived assets at the Cincinnati location to reduce the carrying cost to the fair value as generally determined by an independent appraiser. Additional impairment loss of $438,000 was recorded in 1998 on the Cincinnati location's assets, while assets with an assigned impairment value of $0, $827,000 and $2,038,000 were either sold or disposed of in 2000, 1999 and 1998, respectively. An additional impairment loss of $779,024 was recorded in 2000 on a printing press at the Scottsburg location.
Depreciation is calculated using the straight-line method over the estimated useful lives of the assets, as follows:
Building...........................20-30 years Machinery and equipment.............3-15 years Furniture and fixtures..............5-10 years
GOODWILL Goodwill is amortized using the straight-line method over ten years. In accordance with SFAS No. 121, "Accounting for The Impairment of Long-Lived Assets", the Company evaluates its goodwill on an ongoing basis to determine potential impairment by comparing the carrying value to the undiscounted estimated expected future cash flows of the related assets.
DEFERRED CHARGES Deferred charges, net, consist primarily of costs associated with the Scottsburg Industrial Revenue Bonds issued in 1998 which are amortized over the term of the agreement.
ACCOUNTS PAYABLE Accounts payable includes approximately $464,000 and $737,000 at March 31, 2000 and March 28, 1999, respectively, for outstanding checks.
INCOME TAXES Deferred income tax assets and liabilities are provided for temporary differences between the tax basis and reported amounts of assets and liabilities that will result in taxable or deductible amounts in future years.
EARNINGS (LOSS) PER COMMON SHARE The computation of basic earnings (loss) per common share is based upon the weighted average number of common shares outstanding during the period and the weighted average number of contingently issuable common shares upon satisfaction of all necessary conditions. At March 28, 1999 contingently issuable shares totaled 97,160 and related to common shares issuable under a deferred compensation agreement. At March 31, 2000, the contingently issuable shares had been issued. Diluted earnings (loss) per common share is based upon the weighted average number of common shares outstanding during the period plus, in periods in which they have a dilutive effect, the effect of common shares contingently issuable, primarily from the conversion of Series A & B convertible preferred stock, the exercise of stock options, and common shares issuable under a deferred compensation agreement.
In the third quarter of 1998, the Company adopted Statement of Financial Accounting Standards No. 128, Earnings Per Share ("SFAS 128") . SFAS 128 changed the computation, presentation and disclosure requirements for earnings per share ("EPS"). Under SFAS 128, EPS is presented as basic earnings per share ("basic EPS") and diluted earnings per share ("diluted EPS") and replaces the presentation of primary EPS and fully diluted EPS. The adoption of SFAS 128 resulted in the restatement of earnings per share for all periods presented in the Company's consolidated financial statements.
The following is a reconciliation of the number of shares used in the basic EPS and diluted EPS computations:
Preferred stock dividends of $176,569, $275,183 and $279,408 in fiscal 2000, 1999 and 1998, respectively, have been deducted from the net income or added to the net loss generated in fiscal 2000, 1999 and 1998, respectively, to arrive at the income/loss available to common stockholders for the calculation of basic EPS. Common stock equivalents of approximately 701,630 shares, resulting from convertible shares and stock options, were excluded from the fiscal 1998 computation of diluted EPS because to do so would have been antidilutive.
ADVERTISING COSTS Advertising costs are charged to expense as incurred. Expenses were minimal for the three fiscal years ended March 31, 2000.
RESEARCH AND DEVELOPMENT COSTS Research and development costs are charged to expense as incurred. Expenses were $320,000, $340,000 and $447,000 for 2000, 1999 and 1998, respectively.
STOCK-BASED COMPENSATION The provisions of SFAS No. 123 "Accounting for Stock-Based Compensation" require that employee stock-based compensation either continue to be determined under Accounting Principles Board Opinion (APB) No. 25 "Accounting for Stock Issued to Employees" or in accordance with the provisions of SFAS No. 123, whereby compensation expense is recognized based on the fair value of stock-based awards on the grant date. The Company accounts for such awards under the provisions of APB No. 25 and, accordingly, no compensation cost has been recognized for the stock awards unless required by APB No. 25. The Company has adopted SFAS No. 123 for disclosure purposes.
USE OF ESTIMATES IN FINANCIAL STATEMENTS In preparing financial statements in conformity with generally accepted accounting principles, management makes estimates and assumptions that affect the reported amounts of assets and liabilities and disclosures of contingent assets and liabilities at the date of the financial statements, as well as the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates.
FAIR VALUE DISCLOSURE The fair value of financial instruments approximates carrying value.
COMPREHENSIVE INCOME The Company does not have any comprehensive income items other then net income.
NEW PRONOUNCEMENTS In June 1998, the Financial Accounting Standards Board issued Statement of Financial Accounting No. 133, Accounting for Derivative Instruments and Hedging Activities, which requires entities to report all derivatives at fair value as assets or liabilities in their statements of financial position. This statement is effective for financial statements issued for fiscal periods beginning after June 15, 2000. The Company does not currently have any derivative instruments or hedging activities to report under this standard.
(3) DEBT
The components of the Company's debt are as follows:
The following is a schedule of future annual principal payments payable after one year (including sinking fund payments):
2002 $ 1,661,608 2003 1,500,000 2004 375,000 2005 -- 2006 and thereafter 9,460,000 -------------------------------------------------- $ 12,996,608 ==================================================
On June 22, 1998, the Company restated its credit agreement with an existing lender and a new additional lender. The restated credit agreement provides for a revolving line of credit with borrowings up to a maximum of $5,000,000 subject to certain borrowing base limitations. The interest rate fluctuates and is based on the Company meeting certain ratios. For the year ended March 31, 2000, the average interest rate was 8.12%. At March 31, 2000, the Company had approximately $1,500,000 in available borrowings under the revolving line of credit. The credit agreement expires July 31, 2000. The credit agreement requires quarterly sinking fund deposits of $250,000 until termination of the agreement. The agreement also contains various financial and operating covenants which, among others, require the Company to maintain certain leverage, working capital and cash flow ratios and limits the payment of dividends.
During fiscal 2000, the Company amended its credit agreement for several items, among which allowed the payment of partial quarterly preferred dividends if certain cumulative net income thresholds were maintained, reduced the overall fee structure and reduced the quarterly sinking fund deposit requirement to $200,000 until termination of the agreement
In December 1999, in connection with the acquisition of Buriot International, Inc., the Company assumed the Clermont County Industrial Revenue Bonds. Quarterly payments of $175,000 are required to be made to reduce the outstanding balance.
With respect to the Bonds, the Company has the option to establish the Bonds' interest rate form (variable or fixed interest rate). When a fixed interest rate is selected, the fixed rate assigned will approximate the market rate for comparable securities. When a variable rate is selected, or at the end of a fixed interest rate period, the Bondholders reserve the right to demand payment of the bonds. In the event that any of the Bondholders exercise their rights, a remarketing agent is responsible for remarketing the Bonds on a best efforts basis for not less than the outstanding principal and accrued interest. In the event the Bonds are not able to be remarketed and the letters of credit are exercised, the lender is committed to providing financing for up to 458 days. These letters of credit expire July 31, 2000, with the exception of the letter of credit supporting the Clermont County Industrial Revenue Bonds which expires June 21, 2001.
(4) EMPLOYEE BENEFIT PLANS
The Company has a defined benefit plan covering former hourly employees at its former Cincinnati facility who met certain age and service requirements. The Company's funding policy is to contribute the recommended actuarially determined contribution. Pension costs are based on length of service after May 1, 1985 using the unit credit method.
As the Company sold the Cincinnati facility April 1998, this plan will be terminated in the near future. There is no curtailment gain or loss to be recognized at March 31, 2000.
The change in the Company's benefit obligation is computed as follows:
The change in the Plan's assets is computed as follows:
The following table sets forth the Plan's funded status and amounts recognized on the Company's accompanying balance sheets:
The Company has established a profit sharing/401(k) retirement savings plan which covers those employees who meet certain service requirements and are not participants in the Company retirement plan discussed above. The plan provides for voluntary contributions by the Company's employees up to a specified maximum percentage of gross pay. At the discretion of the Company's Board of Directors, the Company will contribute a specified matching percentage of the employee contributions. Company contributions in 2000, 1999 and 1998 approximated $149,000, $147,000 and $147,000, respectively, which represent one-half of the employee contributions not exceeding 6% of gross pay.
The Company previously entered into deferred compensation agreements with certain officers and management employees. Amounts due under deferred compensation agreements with current officers are classified as long-term liabilities at March 31, 2000 and March 28, 1999. Amounts due under deferred compensation agreements with former officers are classified as short-term liabilities at March 28, 1999. Amounts due to former officers have been paid in full at March 31, 2000. Interest on the long-term deferred amounts, which are included in the balances due, were accrued at 9.75%, 9.75% and 10.5% in 2000, 1999, and 1998, respectively. Expenses in 2000, 1999, and 1998 approximated $54,000, $80,000, and $93,000, respectively.
During 1992 the Company established a supplemental retirement program for former key executives which allows a maximum of $300,000 in loans to such employees with a maximum of $100,000 to any one individual. At March 28, 1999 and March 29, 1998 a $100,000 loan at no interest was outstanding under this program from a former officer. This loan has been paid in full at March 31, 2000.
(5) INCOME TAXES
The provision (credit) for income taxes includes the following components:
The following is a reconciliation between the statutory federal income tax rate and the effective rate shown above:
At year end the net deferred tax components consisted of the following:
2000 1999 - ------------------------------------------------------------------------ Deferred tax liabilities Tax depreciation over book depreciation $(2,464,437) $(2,489,702) - ------------------------------------------------------------------------ Other -- (13,600) - ------------------------------------------------------------------------ $(2,464,437) $(2,503,302) - ------------------------------------------------------------------------ Deferred tax assets: Asset impairment loss $ 264,868 $ 191,014 Deferred compensation 40,460 294,059 Inventory reserves 19,887 -- Other 163,017 209,277 AMT credit carry-forward 171,550 131,115 Tax credit carry-forward 42,019 42,019 State deferred tax asset, net of federal benefit 23,517 96,431 Net operating loss carry-forward 4,315,061 4,370,234 - ------------------------------------------------------------------------ 5,040,379 5,334,149 Valuation allowance -- (2,830,847) - ------------------------------------------------------------------------ $ 5,040,379 $ 2,503,302 - ------------------------------------------------------------------------ Net deferred tax components $ 2,575,942 $ -- ========================================================================
For tax reporting purposes, the Company has approximately $172,000 of alternative minimum tax (AMT) credits available for an indefinite period. The regular tax net operating loss of approximately $12,691,000 can be carried forward and used to reduce future taxable income in addition to tax credits of approximately $42,000, which can be carried forward through the following expiration dates:
The valuation allowance, which decreased by approximately $2,831,000 in 2000, is no longer required as the Company believes that it is more likely than not that all of the net operating loss carryforward will be utilized prior to their expiration dates.
(6) MAJOR CUSTOMERS
During 2000, 1999, and 1998, sales to three companies and their related subsidiaries and divisions approximated 63%, 57%, and 54%, respectively, of the Company's net sales individually presented as follows:
In addition, the year end accounts receivable balances of these companies approximated 55%, 43%, and 44% of the Company's total accounts receivable balance at year end 2000, 1999, and 1998, respectively.
The loss or substantial reduction of the business of any of the major customers in a particular year could have a material adverse effect on the Company.
(7) STOCK OPTIONS
As of March 31, 2000, 280,500 of the authorized but unissued common shares were reserved for issuance to key employees and directors under the Company's qualified and non-qualified stock option plans. Stock options granted under the plans enable the holder to purchase common stock at an exercise price not less than the market value on the date of grant. To the extent not exercised, options will expire not more than ten years after the date of grant. The applicable options vest immediately or ratably over a three to five year period. A summary of the changes in the options outstanding during 2000, 1999, and 1998 is set forth below:
The following summarizes options outstanding and exercisable at March 31,2000:
The weighted average fair value at date of grant for options granted during 2000, 1999 and 1998 was $2.57, $3.21 and $3.27, respectively. The fair value of options at the date of grant was estimated using the binomial model with the following weighted average assumptions:
Had compensation cost for the Company's stock option plans been determined based on the fair value at the grant date for awards in 1999, 1998 and 1997 consistent with the provisions of SFAS No. 123, the Company's net income (loss) and earnings (loss) per share would have been reduced to the pro forma amounts indicated below:
(8) ACCOUNTS RECEIVABLE
The Company values its trade accounts receivable on the reserve method. The following table summarizes the activity in the allowance for doubtful accounts for fiscal 2000, 1999 and 1998.
(9) CAPITAL LEASE OBLIGATIONS
In fiscal 2000, the Company entered into a sale/leaseback agreement on its Scottsburg, Indiana plant. Upon completion of a 61,000 square foot addition to the plant, the Company sold the plant to a third party for $1,900,000. No gain or loss was recorded upon the sale. Concurrent with the sale, the Company entered into a lease agreement with the third party to lease the plant for a period of 20 years. Monthly lease payments are $46,200.
The Company also entered into capital leases for certain equipment. The amount recorded for the plant and equipment under the capital leases amounted to $5,330,100 and $558,000 at fiscal year end 2000 and 1999, respectively. The accumulated depreciation was $322,902 and $119,766 at year end 2000 and 1999, respectively.
The following is a schedule of future annual minimum lease payments under the capital leases together with the present value of the net minimum lease payments, as of March 31, 2000:
The following is a schedule of future annual minimum lease payments:
2001 $ 734,644 2002 625,083 2003 554,400 2004 554,400 2005 and thereafter 11,950,800 ------------------------------------------------------------ $14,419,327 ============================================================
(10) WHOLLY-OWNED SUBSIDIARY
In July 1996, the Company started a new entity with Think Laboratories, Inc. (Think) of Kashiwa, Japan to develop the market for engraving services in the United States. The new company, Laser Graphic Systems, Incorporated (LGSI), was owned 80% by the Company. Prior to fiscal 2000 for financial reporting purposes, LGSI's assets, liabilities and earnings were consolidated with those of the Company, and Think's interest in the Company was included in the accompanying financial statements as minority interest.
On May 14, 1999, the Company and Think Laboratories, Inc. (Think) entered into an agreement whereby the Company purchased all of Think's equity interest in LGSI for $500,000, payable in quarterly installments of $41,667 through April 2002. Think will continue to provide improvements and technology enhancements for the laser engraving process to the Company.
(11) COMMITMENTS AND CONTINGENCIES
OPERATING LEASE AGREEMENTS The Company has various equipment, office and facility operating leases. Leases expire on various dates through February 2005. Rent expense during 2000, 1999 and 1998 was approximately $281,000, $358,000, and $451,000, respectively.
The annual future minimum rental obligations as of March 31, 2000 are as follows:
2001 $181,000 2002 120,000 2003 87,000 2004 58,000 2005 10,000 ------------------------------------------------------------ Total $456,000 ============================================================
ENVIRONMENTAL MATTERS During early January 1998, the Company discovered problems with the environmental permits relating to the operations of the two newly installed presses at the Scottsburg, Indiana plant. The Company promptly and appropriately notified the Indiana Department of Environmental Management (IDEM) and voluntarily halted production on the involved presses. The Company has successfully resolved the permitting issues with IDEM, but due to a period of non-compliance with required regulatory statues, the Company was assessed a civil penalty of up to $625,000. This amount was recorded in full at March 28, 1999. Under the agreement with IDEM, the Company could reduce the civil penalty by up to $225,000 upon completion of 1 of 3 proposed Supplemental Environmental Projects (SEPs). A SEP was chosen and completed by the Company in fiscal 2000. In April 2000, IDEM approved the SEP completed by the Company and the original civil penalty was reduced by $225,000. This reduction was recorded at March 31, 2000. The remainder of the civil penalty ($400,000) is due in quarterly installments of $33,000 through September 30, 2001.
On March 8, 1999, the Company reached an agreement with the Director of the Ohio Environmental Protection Agency concerning certain alleged violations of environmental laws at the Company's Cincinnati facility which included a civil penalty of $100,000. The penalty has been paid in full at March 31, 2000.
LITIGATION Litigation is instituted from time to time against the Company which involves routine matters incident to the Company's business. In the opinion of management, the ultimate disposition of pending litigation will not have a material adverse effect upon the Company's financial statements.
(12) PREFERRED STOCK
On May 2, 1996, the Company sold to Label Venture Group LLC 52,500 shares of a newly created issue of Series A Convertible Preferred Stock for $2,432,000. Each share of Series A Convertible Preferred Stock is immediately convertible, at the option of the shareholder, into ten shares of the Company's Common Stock and may be redeemed by the Company starting in May 1998. The Series A Convertible Preferred Stock bears a preferred dividend of $4.25 per share and has a liquidation value of $50 per share, plus unpaid dividends. The Company's lenders required $1,000,000 of the proceeds to be deposited into the Company's Sinking Fund Deposit account (Note 3). The remaining proceeds were used to support capital expansion plans.
Effective March 31, 1996, 13,242 shares of Series B Convertible Preferred Stock were issued upon conversion of the entire outstanding balance, including accrued interest, of Subordinated Convertible Notes that were issued in October 1995. The Series B Convertible Preferred Stock was issued at $40 per share and also has a liquidation value of $40 per share, plus unpaid dividends. These shares are immediately convertible, at the option of the shareholders, into 132,420 shares of Common Stock and may be redeemed by the Company starting in May 1998.
In fiscal 1999, 1,324 shares of Series B Convertible Preferred Stock were converted into 13,240 shares of Common Stock. In fiscal 2000, the remaining shares of Series B Convertible Preferred Stock were converted into 119,180 shares of Common Stock. Also in fiscal 2000, all of the Series A Convertible Preferred Stock was redeemed for cash for a total consideration of $2,835,000. This amount was paid in full at March 31, 2000.
(13) RESTRUCTURING PLAN
The Company implemented a restructuring plan in fiscal year 1998 which resulted in a pre-tax charge to operating results of $314,599 primarily related to reducing operations at the Cincinnati plant. The restructuring charge included severance pay, employee insurance and certain other costs. These costs were paid in full in fiscal 1998.
(14) ACQUISITION
In December 1999, the Company acquired certain assets and liabilities of Buriot International, Inc. a label printing company located in Batavia, Ohio. Total consideration consisted of assumption of Clermont County Industrial Revenue Bonds in the amount of $6,250,000 and assumption of certain operating liabilities. Assets acquired included property, plant and equipment, inventory, accounts receivable and net cash of approximately $2,078,000. There was no cash consideration paid to the previous owners of Buriot International, Inc. The acquisition was accounted for as a purchase, accordingly the purchase price was allocated to assets and liabilities based on their estimated value as of the date of acquisition. The results of operations of the acquisition are included in the consolidated statement of operations from the date of acquisition.
The following table summarizes, on an unaudited proforma basis, the estimated combined results of the Company and Buriot International, Inc. assuming the acquisition had occurred March 30, 1998. The results include certain adjustments, primarily interest expense, and are not necessarily indicative of what results would have been had the Company owned Buriot International, Inc. during the period presented.
2000 1999 ------------------------------------------------------------------ Net Sales $54,290,707 $51,088,129 Net Income (loss) $4,880,210 $(257,198) Earnings (loss) per share Basic $2.00 $(.23) Diluted $1.74 $(.09) ==================================================================
(15) SUPPLEMENTAL CASH FLOW DISCLOSURES
Supplemental disclosures with respect to cash flow information and non-cash investing and financing activities are as follows:
(16) SUBSEQUENT EVENTS
On June 5, 2000, the Company signed a new credit agreement with an existing lender and a new additional lender. The new agreement provides for a revolving line of credit of up to $5,000,000 and an acquisition facility of up to $7,200,000. Terms and covenants are substantially the same as in prior agreements.
Also on June 5, 2000, the Company acquired certain assets and assumed certain liabilities of Uniflex Corporation, a heat-shrink label printing company. Total consideration paid was $7,000,000 cash,less cash acquired of $800,000.
ITEM 9.
ITEM 9. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL DISCLOSURE
None. PART III --------
ITEM 10.
ITEM 10. DIRECTORS AND EXECUTIVE OFFICERS OF THE REGISTRANT
Part III (except for certain information relating to Executive Officers included in Part 1) is omitted. The Company intends to file with the Securities and Exchange Commission within 120 days of the close of the fiscal year ended March 31, 2000 a definitive proxy statement containing such information pursuant to Regulation 14A of the Securities Exchange Act of 1934 and such information shall be deemed to be incorporated herein by reference from the date of filing such document.
PART IV -------
ITEM 14.
ITEM 14. EXHIBITS, FINANCIAL STATEMENT SCHEDULES AND REPORTS ON FORM 8-K
(a)(1) Financial Statements
The following consolidated financial statements of Multi-Color Corporation, the related notes, and the Report of Independent Certified Public Accountant are incorporated herein.
Consolidated Statements of Operations for the years ended March 31, 2000, March 28, 1999 and March 29, 1998.
Consolidated Balance Sheets as of March 31, 2000 and March 28, 1999.
Consolidated Statements of Shareholders' Investment for the years ended March 31, 2000, March 28, 1999 and March 29, 1998.
Consolidated Statements of Cash Flows for the years ended March 31, 2000, March 28, 1999 and March 29, 1998.
Notes to Consolidated Financial Statements
Report of Grant Thornton LLP, Independent Certified Public Accountants
(a)(2) Financial Statement Schedules
All schedules have been omitted because either they are not required or the information is included in the financial statements and notes thereto.
(a)(3) List of Exhibits
a Filed as an exhibit to the Form 10-K for the 1996 fiscal year and incorporated herein by reference.
b Filed as an exhibit to Registration Statement #33-51772, filed September 10, 1992, and incorporated herein by reference.
c Filed as an exhibit to the Form 10-K for the 1994 fiscal year and incorporated herein by reference.
d Filed as an exhibit to the Form 10-K for the 1990 fiscal year and incorporated herein by reference.
e Filed as an exhibit to the Form 10-K for the 1997 fiscal year and incorporated herein by reference.
f Filed as an exhibit to the Form 10-K for the 1999 fiscal year and incorporated herein by reference.
g Filed herewith.
h Filed as an exhibit to the 1997 Proxy Statement and incorporated herein by reference.
i Filed as an exhibit to the 1998 Proxy Statement and incorporated herein by reference.
j Filed as an exhibit to the Form 10-K for the 1998 fiscal year and incorporated herein by reference.
k Filed as an exhibit to the Form 8-K filed December 31, 1999 and incorporated herein by reference.
l Filed as an exhibit to the 1999 Proxy Statement and incorporated herein by reference.
m Filed as an exhibit to the Form 10-Q for the quarterly period ended June 28, 1998 and incorporated herein by reference.
n Filed as an exhibit to the Form 8-K filed June 20, 2000 and incorporated herein by reference.
(b) Reports on Form 8-K
The Company filed a report on Form 8-K on February 29, 2000 consisting of the financial statements of Buriot International, Inc. and proforma financial information.
The Company filed a report on Form 8-K on June 20, 2000 reporting the acquisition of Uniflex Corporation.
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.