-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, AWTmr2D0TS6zk6fZmWyrYGPLQjSDsl6LDhCBGQN3wxxCnNxExaj+bgD+1RpymkPp 1zYUguHToeycMsVpu8WUwQ== 0000912057-97-017048.txt : 19970514 0000912057-97-017048.hdr.sgml : 19970514 ACCESSION NUMBER: 0000912057-97-017048 CONFORMED SUBMISSION TYPE: 10-Q PUBLIC DOCUMENT COUNT: 2 CONFORMED PERIOD OF REPORT: 19970329 FILED AS OF DATE: 19970513 SROS: NONE FILER: COMPANY DATA: COMPANY CONFORMED NAME: EURAMAX INTERNATIONAL PLC CENTRAL INDEX KEY: 0001026743 STANDARD INDUSTRIAL CLASSIFICATION: ROLLING DRAWING & EXTRUDING OF NONFERROUS METALS [3350] FILING VALUES: FORM TYPE: 10-Q SEC ACT: 1934 Act SEC FILE NUMBER: 333-05978 FILM NUMBER: 97601541 BUSINESS ADDRESS: STREET 1: 11 BROOK BUSINESS CENTER STREET 2: COWLEY MILL RD CITY: UXBRIDGE MIDDLESEX E STATE: X0 BUSINESS PHONE: 1895257882 MAIL ADDRESS: STREET 1: 5535 TRIANGLE PKWY CITY: NORCROSS STATE: GA ZIP: 30092 10-Q 1 10-Q UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM 10-Q /X/ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the quarterly period ended March 29, 1997 OR / / TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 FOR THE TRANSITION PERIOD FROM ________ TO _________ COMMISSION FILE NUMBER _________________ EURAMAX INTERNATIONAL PLC (Exact name of registrant as specified in its charter) England and Wales 98-1066997 (State or other jurisdiction (I.R.S. Employer Identification No.) of incorporation or organization) 5335 Triangle Parkway, Suite 550, Norcross, Georgia 30092 (Address of principal executive offices) (Zip Code) Registrant's telephone number, including area code 770-449-7066 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. /X/ Yes / / No As of May 9, 1997, Registrant has outstanding 1,000,000 Ordinary Shares and 34,000,000 Preference Shares. All of these shares were owned by affiliates. PART I--FINANCIAL INFORMATION ITEM 1. FINANCIAL STATEMENTS EURAMAX INTERNATIONAL PLC AND SUBSIDIARIES CONDENSED CONSOLIDATED STATEMENTS OF EARNINGS (Thousands of U.S. Dollars) (Unaudited) SUCCESSOR PREDECESSOR QUARTER ENDED QUARTER ENDED MARCH 29, MARCH 31, 1997 1996 -------------- -------------- Net Sales.......................... $ 114,874 $ 111,395 Costs and expenses: Cost of goods sold............... 92,036 93,457 Selling and general.............. 10,639 10,209 Depreciation and amortization.... 2,695 2,397 ------------- ------------- 105,370 106,063 ------------- ------------- Earnings from operations........ 9,504 5,332 Interest expense, net.............. (5,618) (157) Other income (expense), net........ (40) (118) ------------- ------------- Earnings before income taxes.... 3,846 5,057 Provision for income taxes...... 1,241 1,922 ------------- ------------- Net earnings.................... 2,605 3,135 Dividends on redeemable preference shares........................... 1,233 -- ------------- ------------- Net earnings available for ordinary shareholders............ $ 1,372 $ 3,135 ------------- ------------- ------------- ------------- The accompanying notes are an integral part of these condensed consolidated financial statements. EURAMAX INTERNATIONAL PLC AND SUBSIDIARIES CONDENSED CONSOLIDATED BALANCE SHEETS (Thousands of U.S. Dollars) (Unaudited) SUCCESSOR ------------------------ MARCH 29, DECEMBER 27, 1997 1996 ---------- ------------ ASSETS Current Assets: Cash and cash equivalents................ $ 11,572 $ 12,516 Accounts receivable, net................. 74,285 60,767 Inventories.............................. 82,102 87,235 Deferred income taxes.................... 1,483 1,483 Other current assets..................... 1,875 1,350 ---------- ----------- Total current assets................... 171,317 163,351 Property, plant and equipment, net....... 105,811 107,338 Goodwill................................. 40,583 40,926 Other assets............................. 17,267 15,678 ---------- ----------- $ 334,978 $ 327,293 ---------- ----------- ---------- ----------- LIABILITIES AND SHAREHOLDERS' EQUITY Current liabilities: Accounts payable......................... $ 40,375 $ 38,221 Accrued expenses......................... 29,089 25,511 Current maturities of long-term debt..... 2,000 2,000 ---------- ----------- Total current liabilities.............. 71,464 65,732 Long-term debt, less current maturities.. 208,625 209,740 Other liabilities........................ 4,969 4,722 Deferred income taxes.................... 9,662 9,735 ---------- ----------- Total liabilities...................... 294,720 289,929 ---------- ----------- Redeemable preference shares............. 36,423 35,191 ---------- ----------- Ordinary shareholders' equity: Ordinary shares.......................... 1,000 1,000 Retained earnings (deficit).............. 1,187 (185) Foreign currency translation adjustment.. 1,648 1,358 ---------- ----------- Total ordinary shareholders' equity.... 3,835 2,173 ---------- ----------- $ 334,978 $ 327,293 ---------- ----------- ---------- ----------- The accompanying notes are an integral part of these condensed consolidated financial statements. EURAMAX INTERNATIONAL PLC AND SUBSIDIARIES CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (Thousands of U.S. Dollars) (Unaudited) SUCCESSOR PREDECESSOR QUARTER ENDED QUARTER ENDED MARCH 29, MARCH 31, 1997 1996 -------------- -------------- Net cash provided by (used in) operating activities....................... $ (3,354) $ 796 -------------- -------------- Cash flows from investing activities: Capital expenditures....................... (867) (3,757) ------- ------- Net cash used in investing activities.... (867) (3,757) ------- ------- Cash flows from financing activities: Borrowings on revolving credit facility....... 707 -- Proceeds from sale of assets............... 48 78 Net change in due to parent/affiliate...... -- (7,222) ------- ------- Net cash provided by (used in) financing activities.............................. 755 (7,144) ------- ------- Effect of exchange rate changes on cash...... 2,522 (10) ------- ------- Net decrease in cash and equivalents......... (944) (10,115) Cash and equivalents at beginning of period..................................... 12,516 12,587 ------- ------- Cash and equivalents at end of period........ $ 11,572 $ 2,472 ------- ------- ------- ------- The accompanying notes are an integral part of these condensed consolidated financial statements. EURAMAX INTERNATIONAL PLC AND SUBSIDIARIES NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Thousands of U.S. Dollars) (UNAUDITED) 1. BASIS OF PRESENTATION For purposes of this report the "Company" refers to Euramax International plc and Subsidiaries, collectively. The condensed consolidated financial statements of the Company have been prepared in accordance with the rules and regulations of the Securities and Exchange commission (the "SEC"). In the opinion of the management of the Company, these statements include all adjustments necessary for a fair presentation of the results of operations all interim periods reported herein. All adjustments are of a normal recurring nature unless otherwise disclosed. Management believes that the disclosures made are adequate for a fair presentation of results of operation, financial position and cash flows. These condensed consolidated financial statements should be read in conjunction with the year-end consolidated financial statements and accompanying notes included in the Company's Form 10-K. Operating results for the period ended March 29, 1997, are not necessarily indicative of future results that may be expected for the year ending December 26, 1997. 2. ACQUISITION Pursuant to a purchase agreement between the Company and Alumax Inc. ("Alumax"), on September 25, 1996, the Company purchased, through its wholly-owned subsidiaries, all of the issued and outstanding capital stock of the following Alumax subsidiaries which operated certain portions of Alumax's fabricated products operations: (i) Amerimax Fabricated Products, Inc. and its wholly owned subsidiaries, Amerimax Specialty Products, Inc., Amerimax Building Products, Inc., Amerimax Coated Products, Inc., Johnson Door Products, Inc., and Amerimax Home Products, Inc.; (ii) Euramax Holdings Limited and its wholly owned subsidiaries, Ellbee Limited and Euramax Coated Products Limited; (iii) Euramax Europe B.V. and its wholly owned subsidiary, Euramax Coated Products B.V.; and (iv) Euramax Industries S.A. and its wholly owned subsidiary Euramax Coated Products S.A. For purposes of identification and description, the acquired business is referred to as the "Predecessor" for the periods prior to the Acquisition, "Euramax" or the "Successor" for the period subsequent to the Acquisition, and the "Company" for both periods. The financial statements of the Predecessor include the combined accounts of the entities referred to as Fabricated Products. Such Predecessor financial statements have been prepared as if the Company's businesses had operated as an independent stand-alone entity for all periods presented. Certain obligations were originally recorded by Alumax on behalf of the Company such as post-retirement and post-employment benefit obligations, income taxes, legal and other corporate expenses. These obligations have been allocated to the Company's financial statements using several factors including revenues or number of employees or other reasonable methods. Corporate expenses of Alumax have been allocated to the Company on a basis management believes is reasonable and represents the expenses as if the Company were a stand alone operation. All significant intercompany accounts and transactions have been eliminated. The purchase price for the Acquisition was approximately $251.2 million, which includes estimated acquisition expenses of approximately $3.9 million, is adjusted to give effect to certain items including cash acquired and working capital, and was allocated to the assets and liabilities of the Company based upon their estimated fair market value at the date of Acquisition under the purchase method of accounting. Such initial purchase price is subject to adjustment based upon the completion of a special audit to determine the change in the Company's working capital (as defined) from December 31, 1995 through September 25, 1996. Management has estimated such change in connection with the preparation of the Consolidated Balance Sheet as of December 27, 1996 and does not expect further adjustments to the purchase price to be significant. Additionally, the allocation of the purchase price was, in certain instances, based on preliminary information and is, therefore, subject to revision when additional asset and liability valuations are obtained. In the opinion of the Company's management, the asset and liability valuations for the Acquisition will not be materially different than initially recorded. The financing for the Acquisition was provided by: (a) $35.0 million of preference and ordinary share capital; (b) $135.0 million of Senior Subordinated Notes; and (c) $100.0 million under a Credit Agreement aggregating $125.0 million. 3. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES For information regarding additional significant accounting policies, see Note 2 to the consolidated financial statements of the Company for the year ended December 27, 1996. 4. INVENTORIES: Inventories were comprised of: SUCCESSOR ------------------------ MARCH 29, DECEMBER 27, 1997 1996 ----------- ----------- Raw materials....................................... $ 58,391 $ 59,429 Work in process..................................... 12,389 12,770 Finished products................................... 11,322 15,036 ---------- ----------- $ 82,102 $ 87,235 ---------- ----------- ---------- ----------- 5. COMMITMENTS AND CONTINGENCIES: The Company has entered into several noncancelable long-term contracts for the purchase of aluminum at market values. The aluminum contracts expire in various years through 1999. Contracted amounts of aluminum are less than the Company's anticipated requirements. The Company and its subsidiaries are not currently parties to any pending legal proceedings other than such proceedings incident to its business. Management believes that such proceedings would not, individually or in the aggregate, reasonably be expected to have a material adverse effect on the consolidated financial position or results of operations of the Company and its subsidiaries taken as a whole. The Company has been named as a defendant in lawsuits or as a potentially responsible party in state and Federal administrative and judicial proceedings seeking contribution for costs associated with the investigation, analysis, correction and remediation of environmental conditions at various hazardous waste disposal sites. The Company continues to monitor these actions and proceedings and to vigorously defend both its own interests as well as the interests of its affiliates. The Company's ultimate liability in connection with present and future environmental claims will depend on many factors, including its volumetric share of the waste at a given site, the remedial action required, the total cost of remediation, and the financial viability and participation of the other entities that also sent waste to the site. Once it becomes probable that the Company will incur costs in connection with remediation of a site and such costs can be reasonably estimated, the Company establishes or adjusts its reserve for its projected share of these costs. Based upon current law and information known to the Company concerning the size of the sites known to it, anticipated costs, their years of operations and the number of other potentially responsible parties, management believes that it has adequate reserves for the Company's potential share of the estimated aggregate liability for the costs of remedial actions and related costs and expenses. In addition, the Company establishes reserves for remedial measures required from time to time at its own facilities. Management believes that the reasonably probable outcomes of these matters will not materially exceed established reserves and will not have a material impact on the future financial position, net earnings or cash flows of the Company. The Company's reserves, expenditures and expenses for all environmental exposures were not significant for any of the dates or periods presented. In connection with the Acquisition referred to in Note 1, the Company was indemnified by Alumax for substantially all of its costs, if any, related to environmental matters for occurrences arising prior to the closing date of the Acquisition during the period of time it was owned directly or indirectly by Alumax. Such indemnification includes costs that may ultimately be incurred to contribute to the remediation of certain specified existing National Priorities List (NPL) sites for which the Company had been named a potentially responsible party under the federal Comprehensive Environmental Response, Compensation, and Liability Information System (CERCLA) as of the closing date of the Acquisition, as well as certain potential costs for sites listed on state hazardous cleanup lists. With respect to all other environmental matters, Alumax's obligations are limited to $125.0 million. However, notwithstanding the indemnity, the Company does not believe that it has any significant probable liability for environmental claims. Further, the Company believes it to be unlikely that the Company would be required to bear environmental costs in excess of its pro rata share of such costs as a potentially responsible party under CERCLA. 6. SUBSEQUENT EVENT On May 2, 1997, the Company announced that it has signed a definitive agreement to purchase a business that manufacturers industrial, commercial, architectural and agricultural building panels from aluminum and metal, and is headquartered in Lancaster, Pennsylvania. Completion of the acquisition is subject to certain due diligence and other conditions, and the final purchase price will be determined pursuant to the terms of the purchase agreement. Closing on this transaction is anticipated to be in the latter part of June. 7. SUPPLEMENTAL CONSOLIDATED FINANCIAL STATEMENTS: As described in Note 2, on September 25, 1996, Euramax purchased the Company from Alumax Inc. The Acquisition was financed, in part, through Senior Subordinated Notes due 2006 (the "Notes"). The Notes are primary obligations of Euramax (the "Parent"). The United Kingdom and Netherlands holding company subsidiaries of Euramax are co-obligors under the Notes (the "Co-obligors"). The United States holding company subsidiary of Euramax has provided a full and unconditional guarantee of the Notes (the "Guarantor"). The following supplemental condensed combining financial statements for the periods prior to the Acquisition, (the "Predecessor" periods) reflect the combined historical financial position, results of operations and cash flows of the entities that are the Parent, the Co-obligors and the Guarantor (collectively, the "Anticipated Parent, Co-obligors and Guarantor"), and such combined information of the non-guarantor entities, consisting principally of the operating companies acquired (collectively, the "Non-guarantor Subsidiaries"). The following supplemental condensed combining financial statements as of March 29, 1997 and for the periods subsequent to the Acquisition (the "Successor" periods) reflect the financial position, results of operations, and cash flows of each of the Parent, the Co-Obligors and Guarantor entities, and such combined information of the Non-Guarantor Subsidiaries. The Co-obligors and the Guarantor are wholly-owned subsidiaries of Euramax and are each jointly, severally, fully, and unconditionally liable under the Notes. Separate complete financial statements of each Co-obligor and of the Guarantor are not presented because management has determined that they are not material to investors. For periods prior to the Acquisition, there were no significant intercompany balances or transactions between the Anticipated Parent, Co-obligors and Guarantor entities combined and the Non-guarantor Subsidiaries.
PREDECESSOR ---------------------------------------------- FOR THE QUARTER ENDED MARCH 31, 1996 ---------------------------------------------- ANTICIPATED PARENT, CO-OBLIGORS AND NON-GUARANTOR COMBINED GUARANTOR SUBSIDIARIES TOTALS ----------- -------------------- ----------- Net sales.......................................................... $ $111,395 $ 111,395 Cost and expenses: Cost of goods sold............................................... 93,457 93,457 Selling and general.............................................. 10,209 10,209 Depreciation and amortization.................................... 2,397 2,397 ----------- -------------------- ----------- Earnings from operations......................................... 5,332 5,332 Interest income (expense), net..................................... (157) (157) Other expense, net................................................. (118) (118) ----------- -------------------- ----------- Earnings before income taxes..................................... 5,057 5,057 Provision for income taxes......................................... 1,922 1,922 ----------- -------------------- ----------- Net earnings....................................................... $ $ 3,135 $ 3,135 ----------- -------------------- ----------- ----------- -------------------- -----------
Note: Separate columns for the Anticipated Parent, the Co-obligors and the Guarantor are not presented as there were no amounts for such entities for the periods shown. 7. Supplemental Condensed Containing Financial Statements (Continued):
------------------------------------------------------------------------------------------------------- SUCCESSOR FOR THE THREE MONTHS ENDED MARCH 29, 1997 ------------------------------------------------------------------------------------------------------- CO-OBLIGORS AND GUARANTOR SUBSIDIARIES ------------------------------------------------------------- EURAMAX EURAMAX EURAMAX EUROPEAN INTERNATIONAL AMERIMAX EUROPEAN HOLDINGS, PLC HOLDINGS, INC. HOLDINGS PLC B.V. NON-GUARANTOR CONSOLIDATED Thousands of U.S. Dollars (PARENT) (GUARANTOR) (CO-OBLIGOR) (CO-OBLIGOR) SUBSIDIARIES ELIMINATIONS TOTALS ------------- --------------- -------------- ------------- -------------- ------------ ------------ Net sales.............. $ -- $ -- $ -- $ -- $ 114,874 -- $ 114,874 Cost and expenses: Cost of goods sold... -- -- -- -- 92,036 -- 92,036 Selling and general............. -- -- -- -- 10,639 -- 10,639 Depreciation and amortization........ -- -- -- -- 2,695 -- 2,695 ------------- ------------- ------------- ------------- ------------- ------------ ---------- Earnings from operations.......... -- -- -- -- 9,504 -- 9,504 Equity in earnings of subsidiaries......... 2,605 1,075 1,377 2,354 6,434 (13,845) -- Interest expense, net.................. -- (3,254) (815) (580) (969) -- (5,618) Other expense, net..... -- -- -- -- (40) -- (40) ------------- ------------- ------------- ------------- ------------- ------------ ------------ Earnings before income taxes............... 2,605 (2,179) 562 1,774 14,929 (13,845) 3,846 Provision (benefit) for income taxes....... -- (1,167) (285) (203) 2,896 -- 1,241 ------------- ------------- ------------- ------------- ------------- ------------ ------------ Net earnings (loss).... 2,605 (1,012) 847 1,977 12,033 (13,845) 2,605 Dividends on redeemable preference shares.... (1,233) -- -- -- -- -- (1,233) ------------- ------------- ------------- ------------- ------------- ------------ ------------ Net earnings available for ordinary shareholders.. $ 1,372 $(1,012) $847 $1,977 $12,033 $(13,845) $1,372 ------------- ------------- ------------- ------------- ------------- ------------ ------------ ------------- ------------- ------------- ------------- ------------- ------------ ------------
-------------------------------------------------------------------------------------------------------- SUCCESSOR AS OF MARCH 29, 1997 -------------------------------------------------------------------------------------------------------- CO-OBLIGORS AND GUARANTOR SUBSIDIARIES ---------------------------------------------------------- EURAMAX EURAMAX AMERIMAX EURAMAX EUROPEAN INTERNATIONAL HOLDINGS, EUROPEAN HOLDINGS, PLC INC. HOLDINGS PLC B.V. NON-GUARANTOR CONSOLIDATED (PARENT) (GUARANTOR) (CO-OBLIGOR) (CO-OBLIGOR) SUBSIDIARIES ELIMINATIONS TOTALS --------------- ------------- ------------ ------------- -------------- ------------- ------------ ASSETS Current Assets: Cash and cash equivalents.. $ 124 $ -- $ -- $ -- $ 11,448 $ -- $ 11,572 Accounts receivable, net.......... -- -- -- -- 74,285 -- 74,285 Inventories.... -- -- -- -- 82,263 (161) 82,102 Deferred income taxes........ -- -- -- -- 1,483 -- 1,483 Other current assets....... -- -- -- -- 1,875 -- 1,875 --------------- ------------- ------------ ------------- -------------- ------------- ------------ Total current assets...... 124 -- -- -- 171,354 (161) 171,317 Property, plant and equipment, net.......... -- -- -- -- 105,811 -- 105,811 Amounts due from parent/ affiliates..... 72,120 -- -- 3,364 25,758 (101,242) -- Goodwill......... -- -- -- -- 40,583 -- 40,583 Investment in consolidated subsidiaries... 40,698 143,817 34,878 40,128 258,077 (517,598) -- Other assets..... 7,488 3,293 831 1,074 4,581 -- 17,267 -------------- -------------- ------------ ------------- -------------- ------------- ------------ $ 120,430 $147,110 $35,709 $ 44,566 $ 606,164 $(619,001) $ 334,978 -------------- -------------- ------------ ------------- -------------- ------------- ------------ -------------- -------------- ------------ ------------- -------------- ------------- ------------ LIABILITIES AND SHAREHOLDERS' EQUITY Current liabilities: Accounts payable........ $ -- $ -- $ -- $ -- $ 40,375 $ -- $ 40,375 Accrued expenses....... (28) 2,589 1,114 1,003 24,411 -- 29,089 Current maturities of long-term debt........... -- -- -- -- 2,000 -- 2,000 --------------- ------------- ------------ ------------- -------------- ------------- ------------ Total current liabilities.... (28) 2,589 1,114 1,003 66,786 -- 71,464 Long-term debt, less current maturities..... 80,200 29,800 23,900 30,900 43,825 -- 208,625 Amounts due to parent/ affiliates..... -- 99,336 2,067 -- -- (101,403) -- Other liabilities -- -- -- -- 4,969 -- 4,969 Deferred income taxes.......... -- -- -- -- 9,662 -- 9,662 --------------- ------------- ------------ ------------- ---------------- ------------- ------------ Total liabilities.... 80,172 131,725 27,081 31,903 125,242 (101,403) 294,720 --------------- ------------- ------------ ------------- ---------------- ------------- ------------ Redeemable preference shares......... 36,423 -- -- -- -- -- 36,423 --------------- ------------- ------------ ------------- -------------- ------------- ------------ Ordinary shareholders' equity: Ordinary shares......... 1,000 -- 78 23 74 (175) 1,000 Paid-in capital.. -- 17,000 6,922 9,077 456,433 (489,432) -- Retained earnings (deficit)...... 1,187 (1,615) 1,333 2,815 22,029 (24,562) 1,187 Cumulative foreign translation adjustment..... 1,648 -- 295 748 2,386 (3,429) 1,648 --------------- ------------- ------------ ------------- -------------- ------------- ------------ Total ordinary shareholders' equity......... 3,835 15,385 8,628 12,663 480,922 (517,598) 3,835 --------------- ------------- ------------ ------------- -------------- ------------- ------------ $ 120,430 $ 147,110 $ 35,709 $ 44,566 $ 606,164 $ (619,001) $ 334,978 --------------- ------------- ------------ ------------- -------------- ------------- ------------ --------------- ------------- ------------ ------------- -------------- ------------- ------------
-------------------------------------------------------------------------------------------------------- SUCCESSOR AS OF DECEMBER 27, 1996 -------------------------------------------------------------------------------------------------------- CO-OBLIGORS AND GUARANTOR SUBSIDIARIES ------------------------------------------------------------- EURAMAX EURAMAX AMERIMAX EURAMAX EUROPEAN INTERNATIONAL HOLDINGS, EUROPEAN HOLDINGS, PLC INC. HOLDINGS PLC B.V. NON-GUARANTOR CONSOLIDATED Current Assets (PARENT) (GUARANTOR) (CO-OBLIGOR) (CO-OBLIGOR) SUBSIDIARIES ELIMINATIONS TOTALS --------------- ------------- ------------ ------------- -------------- ------------- ------------ ASSETS Cash and cash equivalents.... $ 124 $ -- $ -- $ -- $ 12,392 $ -- $ 12,516 Accounts receivable, net............ -- -- -- -- 60,767 -- 60,767 Inventories...... -- -- -- -- 87,235 87,235 Deferred income taxes.......... -- -- -- -- 1,483 -- 1,483 Other current assets......... -- -- -- -- 1,350 -- 1,350 --------------- ------------- ------------ ------------- -------------- ------------- ------------- Total current assets......... 124 -- -- -- 163,227 -- 163,351 Property, plant and equipment, net............ -- -- -- -- 107,338 -- 107,338 Amounts due from parent/ affiliates..... 74,765 -- -- 3,358 34,074 (112,197) -- Goodwill......... -- -- -- -- 40,926 -- 40,926 Investment in consolidated subsidiaries... 37,416 142,743 33,205 37,026 253,124 (503,514) -- Other assets..... 7,561 3,476 853 1,102 2,686 -- 15,678 --------------- ------------- ------------ ------------- -------------- ------------- ------------ $ 119,866 $ 146,219 $34,058 $ 41,486 $601,375 $(615,711) $ 327,293 --------------- ------------- ------------ ------------- -------------- ------------- ------------ --------------- ------------- ------------ ------------- -------------- ------------- ------------ LIABILITIES AND SHAREHOLDERS EQUITY Current liablilities: Accounts payable........ $ -- $ -- $ -- $ -- $ 38,221 $ -- $ 38,221 Accrued expenses....... 2,330 500 695 898 19,571 -- 23,994 Income taxes payable........ (28) (1,210) (254) (328) 3,337 -- 1,517 Current maturities of long-term debt........... -- -- -- -- 2,000 -- 2,000 --------------- ------------- ------------ ------------- --------------- ------------- ------------ Total current liabilities.... 2,302 (710) 441 570 63,129 -- 65,732 Long-term debt, less current maturities..... 80,200 25,000 23,900 30,900 49,740 -- 209,740 Amounts due to parent/ affiliates..... -- 105,532 884 -- 5,781 (112,197) -- Other liabilities.... -- -- -- -- 4,722 -- 4,722 Deferred income taxes.......... -- -- -- -- 9,735 -- 9,735 --------------- ------------- ------------ ------------- -------------- ------------- ------------ Total liabilities.... 82,502 129,822 25,225 31,470 133,107 (112,197) 289,929 --------------- ------------- ------------ ------------- -------------- ------------- ------------ Redeemable preference shares.......... 35,191 -- -- -- -- -- 35,191 --------------- ------------- ------------ ------------- -------------- ------------- ------------ Ordinary shareholders' equity: Ordinary shares......... 1,000 -- 78 23 74 (175) 1,000 Paid-in capital.. -- 17,000 6,922 9,077 456,433 (489,432) -- Retained earnings (deficit)...... (185) (603) 486 838 9,996 (10,717) (185) Cumulative foreign translation adjustment..... 1,358 -- 1,347 78 1,765 (3,190) 1,358 ------------- ------------- ------------ ------------- -------------- ------------- ------------- Total ordinary shareholders' equity........ 2,173 16,397 8,833 10,016 486,268 (503,514) 2,173 ------------- ------------- ------------ ------------- -------------- ------------- ------------- $ 119,866 $146,219 $ 34,058 $ 41,486 $ 601,375 $ (615,711) $ 327,293 --------------- ------------- ------------ ------------- -------------- ------------- ----------- --------------- ------------- ------------ ------------- -------------- ------------- -----------
INTRODUCTION The Company employed the purchase method of accounting for the Acquisition completed in September, 1996. As a result of the required purchase accounting adjustments, the post-Acquisition financial statements for the period from September 25, 1996 to March 29, 1997 ("Successor") are not comparable to the financial statements for the periods prior to the Acquisition ("Predecessor"). RESULTS OF OPERATIONS The following table sets forth the Company's Statement of Earnings Data expressed as a percentage of net sales:
QUARTER ENDED ------------------------------------ MARCH 29, 1997 MARCH 31, 1996 ------------------------------------ Statement of Earnings Data: Net sales.................................................... 100.0% 100.0% Costs and expenses: Cost of goods sold......................................... 80.1 83.9 Selling and general........................................ 9.3 9.2 Depreciation and amortization.............................. 2.3 2.2 ----- ----- Earnings from operations.................................. 8.3 4.7 Interest expense, net........................................ 4.9 0.1 Other expense, net........................................... 0.0 0.1 ----- ----- Earnings before income taxes.............................. 3.4 4.5 Provision for income taxes................................... 1.1 1.7 ----- ----- Net earnings................................................. 2.3% 2.8% ----- ----- ----- -----
Quarter Ended March 29, 1997 as Compared to Quarter Ended March 31, 1996 Net Sales. Net sales increased 3.1% to $114.9 million for the quarter ended March 29, 1997 from $111.4 million for the quarter ended March 31, 1996. This increase is primarily attributable to an increase in steel shipments to producers of manufactured homes and an increase in aluminum shipments to OEM markets in Europe. These volume increases combined for an $8.6 million net sales increase compared to net sales in the quarter ended March 31, 1996. Net sales also increased approximately $1.6 million due to weakening of the Pound Sterling compared to the U.S Dollar. These increases were partially offset by a (i) strengthening of the Dutch Guilder compared to the U.S. Dollar which reduced net sales approximately $2.4 million, and (ii) lower aluminum selling prices precipitated by an approximate 10% reduction in market prices for bar aluminum sheet. Net sales in the U.S. increased 4.2% to $64.5 million for the quarter ended March 29, 1997 from $61.9 million for the quarter ended March 31, 1996. Net sales in Europe increased 1.8% to $50.4 million for the quarter ended March 29, 1997 from $49.5 million for the quarter ended March 31, 1996. Cost of Goods Sold. Cost of goods sold, as a percentage of net sales, decreased 3.8% for the three months ended March 29, 1997 from 83.9% in 1996 to 80.1% in 1997. This decrease is primarily attributable to (i) lower raw material prices, which declined more rapidly than selling prices, (ii) sales of a greater percentage of margin aluminum products, and (iii) an overall improvement in gross margin attributable to higher sales volume. Selling, General and Administrative Expenses. Selling, general and administrative expenses, as a percentage of net sales, for the three months ended March 29, 1997, approximated prior year expenses for the three months ended March 31, 1996. Depreciation and amortization. Depreciation and amortization increased 11.7% to $2.7 million in the quarter ended March 29, 1997 from $2.4 million in the quarter ended March 31, 1996. This increase was attributable to approximately $350,000 in amortization of goodwill in the quarter ended March 29, 1997 and depreciation on $13.7 million of capital expenditures made in the nine months ended December 27, 1996. Such capital expenditures included approximately $2.0 million for a fabrication facility in Helena, Arkansas and $1.4 million for certain paintline upgrades in Holland and the U.K. Earnings from operations. For reasons stated above, earnings from operations in the U.S. increased from a loss of $169,000 in the first quarter of 1996 to $1.7 million in the first quarter of 1997. Earnings from operations in Europe increased 41.5% to $7.8 million for the three months ended March 29, 1997 from $5.5 million for the three months ended March 31, 1996. Interest expense, net. Net interest expense in the three months ended March 29, 1997 increased substantially to $5.6 million from a level of $157,000 for the three months ended March 31, 1996. This increase was attributable to interest as a result of the Acquisition debt incurred. Other expenses, net. Other expenses were not significant in either periods ended March 29, 1997 or March 31, 1996. Provision for income taxes. The effective rate for the provision for income taxes decreased from 38.0% to 32.3% for the three months ended March 31, 1996 and March 29, 1997, respectively. This decrease was due to a decline in the earnings of the U.S. operations in the first quarter of 1997 compared to 1996 levels, partially offset by higher earnings attributable to the European operations. Earnings in the U.S. are subjected to slightly higher income tax rates than in the European countries, and are also subject to state income taxes. Part II -- OTHER INFORMATION Item 1. Legal Proceedings None Item 2. Changes in Securities None Item 3. Defaults Upon Senior Securities None Item 4. Submission of Matters to a vote of Security Holders None Item 5. Other Information None Item 6. Exhibits and Reports on Form 8-K (a) Exhibits Financial Data Schedule (b) Reports on Form 8-K None SIGNATURES Pursuant to the requirements of Section 13 or 15(d) of the Securities and Exchange Act of 1934, Euramax International plc has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized. EURAMAX INTERNATIONAL plc Signature Title --------- ----- By /s/ J. David Smith ___________________________ Chief Executive Officer and President J. David Smith Dated: May 12, 1997 ___________________________ PURSUANT TO THE REQUIREMENTS OF THE SECURITIES EXCHANGE ACT OF 1934, THIS REPORT HAS BEEN SIGNED BELOW BY THE FOLLOWING PERSONS ON BEHALF OF EURAMAX INTERNATIONAL PLC AND IN THE CAPACITIES AND ON THE DATED INDICATED. /s/ J. David Smith - ------------------------------------------ Chief Executive Officer, President and Director May 12, 1997 J. David Smith /s/ R. Scott Vansant - ------------------------------------------ V.P. Finance and Administration and Secretary May 12, 1997 R. Scott Vansant (Principal Financial and Accounting Officer) /s/ Richard M. Cashin - ------------------------------------------ Director May 12, 1997 Richard M. Cashin /s/ Joseph M. Silvestri - ------------------------------------------ Director May 12, 1997 Joseph M. Silvestri - ------------------------------------------ Director May , 1997 William Ty Comfort /s/ Rolly Van Rappard - ------------------------------------------ Director May 12, 1997 Rolly Van Rappard /s/ Paul E. Drack - ------------------------------------------ Director May 12, 1997 Paul E. Drack - ------------------------------------------ Director May , 1997 Stuart M. Wallis
EX-27 2 EX-27
5 12-MOS DEC-26-1997 DEC-28-1996 MAR-29-1997 11,572 0 77,678 3,393 82,102 171,317 110,753 4,942 334,978 71,464 135,000 0 36,423 1,000 2,835 334,978 114,874 114,874 92,036 92,036 10,679 167 5,618 3,846 1,241 2,605 0 0 0 1,372 0 0
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