Back to GetFilings.com
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 10-K
---------
ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(D) OF
THE SECURITIES EXCHANGE ACT OF 1934
For the fiscal year ended December 31, 1999. Commission file number 1-8014.
MOORE CORPORATION LIMITED
-------------------------
(Exact name of registrant as specified in its charter)
Ontario, Canada 98-0154502
- ------------------------------- ------------------
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
1 First Canadian Place, Toronto, Ontario, Canada M5X 1G5
- ------------------------------------------------ ------------
(Address of principal executive offices) (Postal Code)
Registrant's telephone number, including area code: (416) 364-2600
------------------
Securities registered pursuant to Section 12(g) of the Act:
Title of Each Class Name of Each Exchange On Which Registered
- ------------------- -----------------------------------------
Common Shares New York Stock Exchange, Inc.
Without Par Value
The common shares without par value of Moore Corporation Limited are also listed
on The Toronto Stock Exchange in Canada.
Securities registered pursuant to Section 12(g) of the Act:
NONE
----------------
(Title of Class)
Indicate by check mark whether the registrant (1) has filed all reports required
to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during
the preceding 12 months (or for such shorter period that the registrant was
required to file such reports), and (2) has been subject to such filing
requirements for the past 90 days. YES X NO
--- ---
Indicate by check mark if disclosure of delinquent filers pursuant to Item 405
of Regulation S-K is not contained herein, and will not be contained, to the
best of registrant's knowledge in definitive proxy or information statements
incorporated by reference, in Part III of this Form 10-K or any amendment to
this Form 10-K. [X]
The aggregate market value of the voting common shares without par value held by
non-affiliates of the registrant as computed by reference to the closing price
on the New York Stock Exchange on February 15, 2000 was $480,984,611.
The number of common shares without par value outstanding as of February 15,
2000 was 88,456,940.
MOORE CORPORATION LIMITED
FORM 10-K
DOCUMENTS INCORPORATED BY REFERENCE
Document Part of Form 10-K
- --------------------------------------------------------------------------------------------------------------------------------
1. Annual Report to Shareholders for the year ended Parts I, II and
December 31, 1999. With the exception of those IV
portions which are incorporated by reference into
this Form 10-K, the Annual Report is not deemed to
be filed.
2. Management Information Circular and Proxy Statement dated March 15, 2000 Part III
for the Annual and Special Meeting of Shareholders to be held on April
28, 2000.
CAUTIONARY STATEMENT
This Annual Report on Form 10-K, contains statements relating to the
future results of the Corporation (including certain anticipated,
planned, forecasted, expected, targeted and estimated results and certain
matters discussed in Part I, Item I - Business and in Part II, Item 7 -
Management's Discussion and Analysis, Results of Operations and Financial
Condition) that are "forward-looking statements" as defined in the U.S.
Private Securities Litigation Reform Act of 1995. Readers are cautioned
not to place undue reliance on these forward-looking statements and any
such forward-looking statements are qualified in their entirety by
reference to the following cautionary statements. All forward-looking
statements speak only as of the date hereof and are based on current
expectations and involve a number of assumptions, risks and uncertainties
that could cause the actual results to differ materially from such
forward-looking statements. Factors that could cause such material
differences include, without limitation, the following: the successful
completion of the restructuring program announced in 1998 within the
timeframe anticipated to execute the respective restructuring actions and
achieving the associated benefits, the successful implementation of the
Enterprise Resource Planning system within anticipated time frames and
achieving associated benefits, the effects of paper price fluctuations,
successful execution of key strategies (including the digital and
Internet strategies), maintenance of growth rates in Customer
Communication Services businesses, the impact of currency fluctuations in
the countries in which the Corporation operates, general economic and
other factors beyond the Corporation's control, and other assumptions,
risks and uncertainties described in this Annual Report on Form 10-K and
from time to time in the Corporation's periodic filings with Securities
Regulators.
2
MOORE CORPORATION LIMITED
FORM 10-K - 1999
TABLE OF CONTENTS
DESCRIPTION PAGE
----------- ----
PART I Item 1 Business 4
2 Properties 11
3 Legal Proceedings 12
4 Submission of Matters to a Vote of 12
Security Holders
PART II Item 5 Market for Registrant's Common Stock 13
and Related Stockholder Matters
6 Selected Financial Data 13
7 Management's Discussion and Analysis of 13
Results of Operations and Financial
Condition
7A Quantitative and Qualitative Disclosures 13
About Market Risk
8 Financial Statements and Supplementary 13
Data
9 Changes in and Disagreements with 13
Accountants on Accounting and Financial
Disclosure
PART III Item 10 Directors and Executive Officers of the
Registrant 14
11 Executive Compensation 16
12 Security Ownership of Management 16
13 Certain Relationships and Related 17
Transactions
PART IV Item 14 Exhibits, Financial Statement Schedules 18
and Reports on Form 8-K
SIGNATURES 19
NOTE: Unless otherwise indicated by the designation "Canadian" or
"Cdn.", all dollar amounts in this Form are expressed in United
States currency.
3
MOORE CORPORATION LIMITED
FORM 10-K- 1999
PART I
ITEM 1 BUSINESS
a) GENERAL DEVELOPMENT OF BUSINESS
Moore Corporation Limited, a corporation incorporated under the laws of
Ontario, Canada, together with its subsidiaries, referred to herein as Moore
or the Corporation, was established in 1882. At December 31, 1999, Moore had
approximately 15,800 employees worldwide.
Moore is a leading international provider of products and services that help
companies communicate through print and digital technologies. As a leading
supplier of document formatted information, print outsourcing and data based
marketing, Moore designs, manufactures and delivers business communication
products, services and solutions to customers.
Moore operates in two distinct, but complementary market segments: (1) Forms,
Print Management and Related Products which includes Labels and Label Systems
and (2) Customer Communication Services ("CCS"), which includes personalized
direct mail, statement printing and database management. Moore operates on a
decentralized strategic business unit basis within each geographical segment.
In order to better serve customer needs for sales and marketing, Moore also
specializes by industry segment and process application. As of December 31,
1999, the Corporation operated in the following operating segments: (1) Moore
North America, (2) CCS United States, (3) Europe and (4) Latin America. With
the 1998 divestment of the Australasian business and the commencement of the
liquidation process of the China joint ventures, the Asia Pacific operating
segment, which existed in 1998, no longer exists in 1999. For the year ended
December 31, 1999, Moore derived approximately 86% of its revenues from North
America.
Moore is committed to growth. A key element of accomplishing this strategy is
internal development or external purchase of leading-edge technologies. For
1999, research and development expenditures totaled $23 million, compared to
$27 million in 1998 and $30 million in 1997. In the business document arena,
development expenditures were focused on continuing to improve our
market-leading pressure seal-mailers, new label constructions, and growing
our print-on-demand offerings. For the high speed digital printing business,
a new workflow was introduced in our direct marketing business, and a number
of new, higher print quality offerings were introduced that improved the
product appearance and supported new, higher information density bar codes.
For Internet-based applications, the Corporation focused on development of
seamless fulfillment for digital print and communication products, as well as
systems that provide flexible, cost efficient management of forms and
documents that are easily accessible to end users. In 2000, Moore expects to
invest approximately $25 million for research and development.
4
RESTRUCTURING CHARGES
In the third quarter of 1998, the Board of Directors approved a
restructuring program as part of the Corporation's continuing initiative
to enhance Moore's competitive position in its Forms business and to
strengthen its long-term prospects for profitable growth. The
restructuring program is the first step in a comprehensive plan to
substantially improve the Corporation's cost structure and enhance
shareholder value and profitability. Accordingly, a pre-tax restructuring
charge of $630 million was recorded in the third quarter of 1998. During
the fourth quarters of 1998 and 1999, the restructuring provision was
reduced by $15 million and $68 million respectively. After tax, the
impact of the restructuring charge on the 1998 statement of earnings was
$531 million or $6.00 per share. In 1999, the after tax impact of the
restructuring charge reversal was $48 million or $0.55 per share.
Included in the net charge were costs related to the following actions
and activities:
ORGANIZATIONAL INTEGRATION ($122 MILLION). This action covers the
integration of the sales and marketing, and logistics and manufacturing
operations in North America. Included in the restructuring charge are
costs associated with upgrading administrative and transaction processing
systems to improve efficiency and responsiveness in the order-to-delivery
cycle, and the creation of a shared services organization involving
finance, procurement, human resources, communications, information
technology and research and development resulting in workforce
reductions.
NON-STRATEGIC ASSET ELIMINATION ($322 MILLION). The restructuring
includes the sale of certain international and North American businesses
and a revaluation of goodwill related to certain acquisitions.
MANUFACTURING RATIONALIZATION ($103 MILLION). The Corporation is
consolidating Forms manufacturing operations across North America and
internationally, and ceasing production of certain unprofitable products
which resulted in the closure of 10 manufacturing facilities, primarily
in North America. In addition, the print centers in the United States and
Canada will be integrated into the North American manufacturing and
logistics organization.
Costs associated with the restructuring plan included non-cash costs of
$358 million, and cash costs of $189 million, which will be funded
through normal operations and borrowings. Included in the restructuring
program are charges associated with the divestiture of certain
international and North American businesses, and the write-down of
goodwill and property, plant and equipment. The asset write-downs of
$221 million for goodwill and other assets and $137 million for property,
plant and equipment represent mainly a revaluation made for selective
acquisitions and property, plant and equipment, primarily to be
abandoned, under the Moore North America operating segment.
5
The restructuring charge includes amounts to be paid in cash of
$189 million. Cash costs include mainly severance and termination
benefits of $107 million to be paid to employees. Other cash costs of
$82 million include costs for lease terminations, service contract
buyouts and other obligations. Future payments for severance and
termination benefits are expected to be funded through normal
operations and borrowings.
Actions under the restructuring program commenced in the third quarter
of 1998 and are expected to be completed in the year 2001. The majority
of the restructuring actions were executed in 1999. By reducing
manufacturing capacity and overhead costs, the Corporation expects to
generate annual savings of $120 million by the year 2001.
RESTRUCTURING ACTIONS COMPLETED THROUGH DECEMBER 31, 1998
The Corporation was successful in completing certain actions during 1998,
especially in relation to the European and Australasia Forms businesses
which were exited on more favorable terms than initially anticipated, and
actual and planned workforce reductions at a lower cost. On August 1,
1998, the Corporation disposed of its European Forms business resulting
in a pre-tax loss of $85 million, of which $44 million was provided for
in the 1998 restructuring charge, and $41 million was provided for in
1997. The Australian and New Zealand businesses were divested on
December 30, 1998 resulting in a pre-tax loss of $42 million which was
fully provided for in the restructuring provision. In the fourth quarter
of 1998, the Corporation initiated steps to liquidate its joint ventures
in China at an estimated loss of $8 million as provided for in the
restructuring provision.
In the last six months of 1998, the Corporation undertook substantial
steps to complete the integration of its sales and marketing, and
logistics and manufacturing operations in North America, resulting in the
consolidation of 10 operating units into one business. The creation of
the North American shared services functions began, including the process
of streamlining administrative functions. The Corporation closed two
plants in North America, eliminated numerous management positions in its
North America Forms and Labels operations, and commenced other workforce
delayering actions. The employee base was reduced by approximately 2,900
people by December 1998 due to the impact of the divestitures
contemplated by the restructuring plan (2,600 employees), plant closures
and other workforce reduction actions.
RESTRUCTURING ACTIONS COMPLETED THROUGH DECEMBER 31, 1999
The Corporation completed a number of restructuring actions in 1999
including in the closure of five manufacturing facilities, bringing the
total number of plant closures in North America to seven. Since July
1999, the Corporation started the process of closing and integrating its
warehouses and U.S. print centers into a new manufacturing organization.
Other actions in North America during 1999 included the consolidation of
the Canadian and U.S. sales and administrative offices, the
implementation of a shared services organization, and the continuation
6
of workforce delayering actions. In Europe, the Corporation has
substantially completed the consolidation of its manufacturing facilities
in France and has finalized the liquidation of a joint venture
investment. Since the restructuring program began, the employee base has
been reduced by approximately 3,900 people by December 1999 due to
divestitures contemplated by the restructuring plan (2,600 employees),
plant closures and other workforce reduction actions.
The successful completion of several restructuring actions within all
three noted action areas (Organizational Integration, Non-Strategic Asset
Elimination and Manufacturing Rationalization) at lower than anticipated
costs and the current forecast for outstanding actions have resulted in
the Corporation reversing $68 million of charges under the 1998
restructuring program during the fourth quarter of 1999. These activities
included the sale of certain North American businesses, the favorable
settlement of claims related to the disposition of the European and
Australasia Forms businesses and the negotiation of costs to exit
customer contracts and lease agreements at more favorable terms than
originally planned. The reversal also reflects decisions made by
management, during the fourth quarter, to maintain some businesses that
were originally earmarked for disposal. Gains on disposals have been
credited to the restructuring provision to the extent that an impairment
loss was classified as restructuring in the original provision.
The carrying value of remaining assets held for disposal as at
December 31, 1999 is $9 million. Results of operations related to assets
held for disposal at December 31, 1999 are sales of $39 million ($46
million in 1998) and losses from operations of $1 million in 1999 ($2
million in 1998). Severance and termination benefits charged in 1999 and
1998 relate mainly to capacity rationalization, organizational delayering
and other workforce reduction actions. During 1999, approximately
$17 million (1998 - $13 million) of severance and termination benefits
were paid out to employees.
b) FINANCIAL INFORMATION ABOUT INDUSTRY AND GEOGRAPHIC SEGMENTS
Operating and geographical segment definitions and financial information
for the three years ended December 31, 1999 are presented in Note 20 of
the Notes to Consolidated Financial Statements on pages 43 through 46 of
the Moore Corporation Limited 1999 Annual Report to Shareholders and are
incorporated herein by reference.
c) NARRATIVE DESCRIPTION OF BUSINESS
Products and Services
Moore serves the business communication needs of corporations,
governments and other enterprises through primarily two industry
segments: (1) Forms, Labels and Related Products and (2) CCS. Moore
manages the products and services offered through four different
operating segments: Moore North America, CCS United States, Latin America
and Europe. Due to dispositions made in 1998, the Asia Pacific
7
operating segment, which existed in 1998 and prior, no longer exists in
1999.
Forms, Labels and Related Products include a comprehensive line of forms
and services that are both paper-based and electronic-based. The forms
and labels business represented 69% of Moore's revenues of $2.4 billion
in 1999 (1998 - 72% of revenues of $2.7 billion). It encompasses custom
business forms and equipment, print management outsourcing, commercial
printing, on-demand and data based publishing, facilities management,
pressure seal mailing services, pressure sensitive labels, linerless
labels, variable image bar codes, integrated forms/labels combinations
and electronic forms.
Moore North America and the Latin American businesses each provide
predominantly forms and label products and services, while Europe
provides only CCS products and services.
The CCS businesses represented 31% of total revenue in 1999 (1998 - 28%).
The principal operations are conducted through Business Communication
Services ("BCS") and Response Marketing Services ("RMS"). Included in the
RMS group are RMS and Phoenix Group in the United States, RMS in
Continental Europe and Colleagues Direct Marketing in the United Kingdom.
BCS services include statement re-engineering and printing, image and
mail outsourcing, compliance mailings and prepaid calling cards. BCS
accesses, selects and formats customer information and supplies
appropriate marketing-oriented output, which is either paper-based or
electronic. BCS uses proprietary Moore technology to provide
cost-effective product and service offerings.
RMS in the United States and Europe uses proprietary Moore technology to
create, produce and manage effective personalized direct marketing
programs. Phoenix Group is a database marketing organization that
provides research, database expertise, customer relationship management
and teleservicing services. Colleagues Direct Marketing is the largest
independent direct marketing services firm in the U.K. It offers a
variety of services from total campaign outsourcing services to large
scale personalized promotional printing.
Competition
The Corporation derives 76% (1998 - 69%) of its revenue from the United
States marketplace with sales in Forms, Print Management and Related
Products representing the largest component of its United States revenue.
The business forms industry in the United States is going through a
period of consolidation. There are 15 to 20 national forms companies of
which Standard Register, Reynolds & Reynolds, and Wallace Computer
Services Inc. in addition to Moore, are the largest. Other key
competitors are Willamette, Corporate Express and Workflow Management.
Moore believes the top seven companies have in total approximately 42%
8
(1998 - 42%) of the market in comparison to Moore's estimated 14% market
share in 1999 (1998 - 14%). In addition, there are approximately 500
smaller companies organized on a regional and local basis.
There are approximately 675 manufacturing plants in the United States
serving the marketplace.
The industry is very competitive with customers focused on increasing
their revenue, controlling expenses and managing assets more effectively.
Moore's strategy, in line with this environment, is to provide integrated
management of all business documents - both paper and digital - and the
services that support these documents and programs throughout their life
cycle.
In 1999, the United States business forms industry, including pressure
sensitive labels and form/label combinations, sold approximately $11.5
billion of products, approximately the same as 1998. Industry sales are
expected to show slight growth in 2000, as new products are introduced
and new markets entered. The traditional United States forms marketplace
is experiencing competition from commercial printing markets, label
manufacturers, office products suppliers, and direct mail production
companies as well as service bureaus. The trends in the marketplace are
toward electronic commerce, integrated business communications
management; shorter production runs; the logical extension of forms into
direct mail and other targeted communications; and the conversion of most
business information to digital format including changing what is printed
as well as quantity, method and frequency of printing.
Raw Material
Paper continues to be the most significant item of raw material. The
Corporation has long standing business relationships with critical paper
manufacturers. The paper marketplace underwent three price increases in
1999 (year over year in excess of 35% increase in our predominant grades
of paper that form the primary base of our production) resulting from a
bullish marketplace. Without any new supply capacity expected in the
future coupled by a fear of the unknown Year 2000 impacts, demand was
firm throughout 1999. Imports had minimal impact on pricing, as they were
not a major force in 1999.
Intellectual Property
Moore, through years of research and commercialization, has developed a
proprietary portfolio of intellectual property consisting of patents,
trademarks, copyrights and trade secrets. Since its founding, Moore has
recognized the importance of intellectual property and is continually
working to develop new technologies to provide additional value to its
customers.
Moore currently holds approximately 2,477 patents and applications
throughout the world with about 410 patents in the United States. Moore's
technology is constantly evolving and innovation remains
9
important with some 975 currently pending patent applications on file.
Moore holds patents for Intelligent Imaging(R) applications, the ability
to print variable data either alone or in combination with fixed field
formats, pressure sensitive products, such as labels and including
proprietary laminate products, pressure seal configurations and form
constructions, used in self-mailer applications particularly in
compliance and financial reporting, forms handling and processing
equipment, automated systems, for electronic forms and print on demand,
printing solutions, including electrostatic imaging and ink jet, as well
as the more conventional business products which help our customers
effectively manage their continually changing business needs.
Moore endeavors to provide customers with leading edge technology. Also
in 1999, the Corporation realized more than four million dollars in
benefit from the licensing of the Corporation's technology and settlement
of pending litigation.
Moore's proprietary information handling products continue to offer
advantages. The Corporation's traditional base of business forms has been
modified and enhanced to meet the challenges of today's high speed
printing applications. Form/label combinations continue to grow as
product solutions in many areas, such as bar coding applications.
Recently, Moore focused its developmental efforts on radio frequency
identification products ("RFID"). RFID labels allow for more efficient
tracking of tagged items thereby reducing process and handling costs.
Linerless label technology is continuing to grow in its acceptance and
supplanting the more conventional pressure sensitive products
particularly in environmentally sensitive areas. Moore's pressure seal
technology provides customers with an innovative way to reduce cycle time
and improve document processing while maintaining the integrity of the
mailers and indicating potential tampering. Moore has commenced a number
of patent infringement actions and has successfully settled two lawsuits
in connection with this effort.
In its CCS businesses, Moore recently obtained several new patents
related to imaging. Systems such as the XL Data System and PC
Configuration allow serially connected printers to produce highly
personalized and variable documents. These systems allow the user to
merge text and graphics while simultaneously performing print commands at
full printer speed. The proprietary MIPS system enables the user to
selectively apply coloured graphics along with variable text. Moore is
currently developing a new generation data system that is expected to
enable customers to supply text graphics and image files directly to the
Corporation's paper and electronic output processes without modification.
Moore is actively pursuing a number of Internet based solutions to match
its emerging e-business strategy.
Moore has currently about 210 Registered US Trademarks with about 1300
registered worldwide. In connection with Moore's widely perceived brand
recognition in the industry, a number of trademark oppositions have been
commenced to prohibit the use of the Moore name or phonetic equivalents
in Moore's field of endeavor.
10
Moore actively pursues copyright protection for its form and stationery
products to prevent copycat production by competitors. In addition, Moore
utilizes copyright protection for certain software and firmware
developments.
Backlog
At December 31, 1999, the backlog of firm customer orders to be handled
in the next 120 days was approximately $115 million. ($127 million at
December 31, 1998). The Corporation has also built a backlog of
approximately $1.6 billion of multi-year contracts for print management.
Working Capital
Short-term securities, accounts receivables and inventory comprise
substantially all of the working capital in the Corporation.
In North America, the Corporation sells its products and services
principally on a "net 30 days" basis, which is the standard industry
payment term. For the Corporation's other subsidiaries the payment terms
are standard within their business segment and country.
Raw material inventory is mainly paper and is comprised of externally
purchased plain paper and a combination of internally converted
carbonless and carbonized paper. Raw material on hand as of December 31,
1999 and December 31, 1998 was 1.1 months and 1.0 months, respectively.
Finished goods inventory is comprised principally of orders
custom-manufactured for customers under forms management agreements under
which the forms are released to the customers over a set period of time.
The cost of warehousing and financing these inventories is included with
the price of the products. The finished goods inventory was 65% of total
inventory at December 31, 1999 (December 31, 1998 - 64%).
Employees
At December 31, 1999, the Corporation employed 15,812 employees (December
31, 1998 - 17,135).
ITEM 2 PROPERTIES
The operations of the Corporation are carried on in 10.9 million square
feet of manufacturing, administrative, warehouse, sales offices and
research space. This is a slight increase from 1998 space of 10.8 million
square feet. The increase is attributable to the actions brought upon by
the restructuring plan. The plan has resulted in the closure of many
manufacturing and administrative locations but these locations are still
included in the total figures until they are sublet or sold.
11
The following table summarizes the manufacturing and administrative space
of the Corporation at December 31, 1999:
Location Number of Plants Square Feet (000'S)
-------- ---------------- -------------------
Manufacturing Plants
--------------------
United States -owned 29
-leased 26
---
55 4,306
---
Canada -owned 4
-leased 4
---
8 690
---
Other Countries -owned 15
-leased 12
---
27 1,599
--- -----
Total Manufacturing 90 6,595
=== =====
Administrative Locations
------------------------
-owned 6
-leased 24
----
Total Administrative 30 1,356
==== =====
In addition to the above listed properties, the Corporation maintains
warehouse facilities and sales offices, most of which are leased.
The Corporation's facilities have been well maintained and, with a few
exceptions in the overseas subsidiaries, are believed to conform to
modern industrial standards in their respective locations. At December
31, 1999, 83.4% of the total square footage was utilized. The utilization
rate is affected by the existence of empty plants resulting from the
restructuring actions as mentioned above. These locations comprise 1.1
million square feet or 10.25% of the total square footage mentioned
above.
ITEM 3 LEGAL PROCEEDINGS
At December 31, 1999, certain lawsuits and other claims were pending
against the Corporation. While the outcome of these matters is subject to
future resolution, management's evaluation and analysis of such matters
indicates that, individually and in the aggregate, the probable ultimate
resolution of such matters will not have a materially adverse effect on
the financial position or results of operations of the Corporation.
ITEM 4 SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
There were no matters submitted to a vote of the shareholders of the
Corporation during the fourth quarter of 1999.
12
PART II
ITEM 5 MARKET FOR REGISTRANT'S COMMON STOCK AND RELATED
STOCKHOLDER MATTERS
The information regarding the market for and dividends on the common
shares without par value of the Corporation and related security holder
matters appears on page 56 of the Moore Corporation Limited 1999 Annual
Report to Shareholders and is incorporated herein by reference. As of
February 15, 2000, there were 5,005 record holders of the common shares
without par value of the Corporation.
ITEM 6 SELECTED FINANCIAL DATA
The information regarding selected financial data for eleven years
appears on pages 54 and 55 of the Moore Corporation Limited 1999 Annual
Report to Shareholders and is incorporated herein by reference.
ITEM 7 MANAGEMENT'S DISCUSSION AND ANALYSIS OF RESULTS OF OPERATIONS
AND FINANCIAL CONDITION
Management's discussion and analysis of results of operations and
financial condition appears on pages 8 to 25 of the Moore Corporation
Limited 1999 Annual Report to Shareholders and is incorporated herein by
reference.
ITEM 7A QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK
The information appearing under the caption "Market Risk" on pages 22 to
24 of the Moore Corporation Limited 1999 Annual Report to Shareholders is
incorporated herein by reference.
ITEM 8 FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA
The consolidated financial statements of the Corporation, which are
incorporated herein by reference, are described in the accompanying Index
to Financial Statements and Schedule on page F-1. The Corporation's
Selected Quarterly Financial Data for the two years ended December 31,
1999 appears on page 54 of the Moore Corporation Limited 1999 Annual
Report to Shareholders and is incorporated herein by reference.
ITEM 9 CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON
ACCOUNTING AND FINANCIAL DISCLOSURE
There were no disagreements with the independent accountants on
accounting and financial disclosure.
13
PART III
ITEM 10 DIRECTORS AND EXECUTIVE OFFICERS OF THE REGISTRANT
The information regarding the Directors of the Corporation appears on
pages 3 to 5 of the Management Information Circular and Proxy Statement
for the Annual and Special Meeting of Shareholders to be held on April
28, 2000 and is incorporated herein by reference.
EXECUTIVE OFFICERS OF THE REGISTRANT
Name Age Positions Held During Last Five Years
---- --- -------------------------------------
Thomas E. Kierans 59 Chairman of the Board since October, 1997; and Chairman and
CEO, Canadian Institute for Advanced Research; prior to
September, 1999 Mr. Kierans was President and Chief
Executive Officer, C.D. Howe Institute.
W. Ed Tyler 47 President and Chief Executive Officer since April, 1998;
prior thereto, Mr. Tyler held various positions with R.R.
Donnelley & Sons Company; most recently he was Executive
Vice President.
Thomas J. McKiernan 61 Executive Vice President since April, 1998; between October,
1997 and April, 1998, Mr. McKiernan was Vice President and
Interim CEO, Moore Corporation Limited and President, Moore
Customer Communication Services; between September, 1995 and
October, 1997, Mr. McKiernan was Vice President, Moore
Corporation Limited and President, Moore Customer
Communication Services; prior thereto, Mr. McKiernan was
President, Moore Response Marketing Services.
James B. Currie 51 Senior Vice President, Business Development since January,
l999; between September, l996 and December, l998 Mr. Currie
was President, J.B Consulting; between March, 1995 and
August, 1996 Mr. Currie was Executive Vice President,
General Counsel and Secretary of Chicago Title and Trust
Company; prior thereto Mr. Currie was Executive Vice
President, General Counsel and Secretary of Heller
Financial, Inc.
Michael S. Rousseau 41 Senior Vice President and Chief Financial Officer since May,
1999; prior to May, 1999 Mr. Rousseau was Vice President and
Chief Financial Officer of Silcorp Limited.
14
Name Age Positions Held During Last Five Years
---- --- -------------------------------------
Patrick T. Brong 55 Vice President of Moore and President of Logistics and
Operations, Moore North America since July, 1998; between
November, 1997 and June, 1998 Mr. Brong was President, Moore
North America; between April, 1995 and October, 1997, Mr.
Brong was Vice President- Manufacturing, Moore Document
Solutions; prior thereto, Mr. Brong was Vice President -
Manufacturing, Moore Canada.
Sieg E. Buck 50 Vice President, Moore Corporation Limited and President,
Sales and Marketing, Moore North America, Inc. since July,
1998; between October, 1997 and July, 1998, Mr. Buck was
President, Integrated Customer Solutions; prior to October,
1997 Mr. Buck was President, Image Management Services;
between January, 1996 and May, 1997 Mr. Buck was Vice
President, Document Automation Systems; prior thereto, Mr.
Buck was Group President, Bell Sports Corporation.
Charles F. Canfield 50 Vice President, Human Resources and Corporate Communications
since June 1998; between July, 1997 and June, 1998, Mr.
Canfield was Vice President, Human Resources and President,
Moore Canada; prior thereto, Mr. Canfield was Vice
President, Human Resources.
Russell I. Johnson 64 Vice President, Procurement.
Robert M. Jones 49 Vice President and Chief Information Officer since December,
1997; prior to December, 1997 Mr. Jones was Chief
Information Officer of Whirlpool Corporation.
John V. Laurie 47 Vice President and Treasurer since January, 2000; between
November, 1998 and January, 2000 Mr. Laurie was Vice
President and Treasurer of Maple Leaf Foods Inc.; between
February, 1998 and November, 1998 Mr. Laurie was an Analyst
at RBC Dominion Securities; between December, 1996 and
February, 1998 Mr. Laurie was an independent consultant;
prior to December, 1996 Mr. Laurie held several positions
with George Weston Limited most recently as Vice President
of Pensions and Treasurer.
15
Name Age Positions Held During Last Five Years
---- --- -------------------------------------
Peter F. Murphy 44 Vice President and Controller since September, 1999; prior
to September, 1999 Mr. Murphy was Vice President and
Controller of R.R. Donnelley and Sons Company.
Robert Z. Slaughter 45 Vice President and General Counsel since January, 1999;
between April, 1997 and December, 1998 Mr. Slaughter was
Associate General Counsel; prior to March, 1997, Mr.
Slaughter held various positions with Ameritech Corporation,
most recently as Vice President and General Counsel of
Ameritech's custom business services unit.
Joan M. Wilson 44 Vice President and Secretary.
James D. Wyner 56 Vice President, Moore Corporation Limited and President,
Peak Technologies, Inc. since January, 1998; prior to
January, 1998 Mr. Wyner was President, Moore Labels and
Label Systems and a Vice President, Moore Corporation
Limited; prior to June, 1996, Mr. Wyner was Executive Vice
President - Operations, Paxar Corporation.
ITEM 11 EXECUTIVE COMPENSATION
The information regarding the Directors' and Executive Officers'
compensation appears on pages 8 to 15 of the Management Information
Circular and Proxy Statement for the Annual and Special Meeting of
Shareholders to be held on April 28, 2000 and is incorporated herein by
reference.
ITEM 12 SECURITY OWNERSHIP OF MANAGEMENT
The information regarding the Security Ownership of the Directors and
certain significant shareholders appears on pages 2 to 5 of the
Management Information Circular and Proxy Statements for the Annual and
Special Meeting of Shareholders to be held on April 28, 2000 and is
incorporated herein by reference.
The following table shows the beneficial ownership of, or control or
direction over, common shares of the Corporation as of February 15, 2000,
by each of the Corporation's most highly compensated executive officers:
16
Number of Nature of
Name Shares Beneficial Ownership % of Class
---- --------- -------------------- ----------
W.E. Tyler 10,000(1) Sole investment
and voting power (*)
T.J. McKiernan 2,381(2) Sole investment
and voting power (*)
S.E. Buck 306(3) Sole investment (*)
and voting power
R. M. Jones -(4) - (*)
J.D. Wyner -(5) - (*)
M.S. Rousseau 10,000 Sole investment
and voting power (*)
(*) All officers and directors of the Corporation as a group beneficially own
less than 1% of the outstanding common shares.
1 Mr. Tyler has stock options to acquire 329,506 common shares that are
exercisable within 60 days of February 15, 2000.
2 Mr. McKiernan has stock options to acquire 109,400 common shares that are
exercisable within 60 days of February 15, 2000.
3 Mr. Buck has stock options to acquire 15,000 common shares that are
exercisable within 60 days of February 15, 2000.
4 Mr. Jones has stock options to acquire 13,000 common shares that are
exercisable within 60 days of February 15, 2000.
5 Mr. Wyner has stock options to acquire 17,500 common shares that are
exercisable within 60 days of February 15, 2000.
ITEM 13 CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
The information regarding Certain Relationships and Related Transactions
appears on pages 16 to 17 of the Management Information Circular and
Proxy Statement for the Annual and Special Meeting of Shareholders to be
held on April 28, 2000 and is incorporated herein by reference.
17
ITEM 14 EXHIBITS, FINANCIAL STATEMENT SCHEDULES AND REPORTS ON FORM 8-K
Documents filed as part of the report.
1, 2 Financial Statements and Financial Statement Schedules
See Index to Financial Statements and Schedule of Moore
Corporation Limited on page F-1 which index is incorporated
herein by reference.
3 Exhibit # Description
--------- -----------
3(i) Articles of Amalgamation dated January 1, 1993
(Previously filed as Exhibit 3(a) to Form 10-K for
the fiscal year ended December 31, 1992, File I-8014
which is incorporated herein by reference.)
3(ii) Bylaw No. 1, as consolidated text as of April 12,
1990 (Previously filed as Exhibit 3(g) to Form 10-K
for the fiscal year ended December 31, 1989, which
is incorporated herein by reference.)
4(a) Dividend Reinvestment and Share Purchase Plan dated
March 3, 1994 (Previously filed as Exhibit 4(a) to
Form 10-K for the fiscal year ended December 31,
1993, which is incorporated herein by reference.)
4(b) Shareholder Rights Plan Agreement dated April 12,
1995 (Previously filed as Exhibit 1 to Form 8-K
dated April 27, 1995 which is incorporated herein by
reference.)
11 Statement re computation of per share earnings
13 Annual Report to Shareholders for the year ended
December 31, 1999
21 Subsidiaries of the registrant
23 Consents of PricewaterhouseCoopers LLP dated
February 17, 2000
Reports on Form 8-K No reports on Form 8-K were filed in the forth
quarter of the year ended December 31, 1999.
18
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.
Moore Corporation Limited
-------------------------
(Registrant)
By: s/b W.E. Tyler
--------------------------------------
W.E. Tyler, Director, President and
Chief Executive Officer
By: s/b J.M. Wilson
--------------------------------------
J.M. Wilson, Vice President and Secretary
Dated: February 17, 2000
19
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 dates indicated.
Signature Title Date
--------- ----- ----
s/b T.E. Kierans Director and Chairman February 17, 2000
- ---------------- of the Board
T.E. Kierans
s/b W.E. Tyler Director, President February 17, 2000
- -------------- and Chief Executive
W.E. Tyler Officer
s/b M.S. Rousseau Senior Vice President February 17, 2000
- ----------------- and Chief Financial
M.S. Rousseau Officer
s/b P.F. Murphy Vice President and February 17, 2000
- --------------- Controller
P.F. Murphy
s/b D.H. Burney Director February 17, 2000
- ---------------
D.H. Burney
s/b S.A. Dawe Director February 17, 2000
- -------------
S.A. Dawe
s/b R.J. Lehmann Director February 17, 2000
- ----------------
R.J. Lehmann
s/b J.R.S. Prichard Director February 17, 2000
- -------------------
J.R.S. Prichard
s/b D.R. McCamus Director February 17, 2000
- ----------------
D.R. McCamus
20
MOORE CORPORATION LIMITED
INDEX TO FINANCIAL STATEMENTS AND SCHEDULE
The Consolidated Balance Sheets as at December 31, 1999 and 1998, the
Consolidated Statements of Earnings, Retained Earnings and Cash Flows for
each of the three years in the period ended December 31, 1999, the Notes to
the Consolidated Financial Statements, together with the report thereon of
PricewaterhouseCoopers LLP dated February 17, 2000, appearing on pages 26 to
53 of the Moore Corporation Limited 1999 Annual Report to Shareholders, are
incorporated by reference in this Form 10-K. With the exception of the
aforementioned information and the information incorporated in Items 1, 5, 6,
7 and 8 of this Form 10-K, the Moore Corporation Limited 1999 Annual Report
to Shareholders is not to be deemed filed as part of this report. The
financial statement schedule which follows should be read in conjunction with
the financial statements in the Moore Corporation Limited 1999 Annual Report
to Shareholders. Financial statement schedules not included have been omitted
because they are not applicable or the required information is shown in the
financial statements or notes thereto.
Separate financial statements of associated companies accounted for by the
equity method have been omitted because the proportionate share of their
profit before income taxes and total assets of each company are less than 20%
of the respective consolidated amounts, and investments in such companies are
individually less than 20% of consolidated total assets of the Registrant.
The Report of Independent Accountants on the Financial Statement Schedule
appears on page F-2.
Financial Statement Schedule Page
- ---------------------------- ----
II Allowance for doubtful accounts F-3
F-1
REPORT OF INDEPENDENT ACCOUNTANTS ON
FINANCIAL STATEMENT SCHEDULE
To the Board of Directors of Moore Corporation Limited
Our audits of the consolidated financial statements referred to in our report
dated February 17, 2000 appearing on page 53 of the 1999 Annual Report to
Shareholders of Moore Corporation Limited, (which report and consolidated
financial statements are incorporated by reference in this Form 10-K) also
included an audit of the Financial Statement Schedule listed in the foregoing
index in this Form 10-K. In our opinion, the Financial Statement Schedule
presents fairly, in all material respects, the information set forth therein
when read in conjunction with the related consolidated financial statements.
PRICEWATERHOUSECOOPERS LLP
CHARTERED ACCOUNTANTS
Toronto, Canada
February 17, 2000
F-2
MOORE CORPORATION LIMITED
SCHEDULE II - ALLOWANCE FOR DOUBTFUL ACCOUNTS
(Expressed in United States currency in thousands of dollars)
Additions
Balance at Charged to
Beginning Costs and Deductions Balance at
of Year Expenses (Note 1) End of Year
---------- ---------- ---------- -----------
1997 9,311 6,905 (6,254) 9,962
1998 9,962 7,115 (2,865) 14,212
1999 14,212 2,129 (2,417) 13,924
Note 1 - Primarily write-offs, recoveries and foreign currency translation
adjustments.
F-3