-----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, GydWorNlqaGffkVR5cCV2gKcRoOy1oxzbyLA7h9IwbInqkyrIvyG6jcaGA//xKTA wlQpxWhOFPHJvjMt48zwVg== /in/edgar/work/0000950152-00-007251/0000950152-00-007251.txt : 20001013 0000950152-00-007251.hdr.sgml : 20001013 ACCESSION NUMBER: 0000950152-00-007251 CONFORMED SUBMISSION TYPE: 8-K PUBLIC DOCUMENT COUNT: 3 CONFORMED PERIOD OF REPORT: 20000929 ITEM INFORMATION: ITEM INFORMATION: ITEM INFORMATION: FILED AS OF DATE: 20001012 FILER: COMPANY DATA: COMPANY CONFORMED NAME: WAXMAN INDUSTRIES INC CENTRAL INDEX KEY: 0000105096 STANDARD INDUSTRIAL CLASSIFICATION: [5070 ] IRS NUMBER: 340899894 STATE OF INCORPORATION: DE FISCAL YEAR END: 0630 FILING VALUES: FORM TYPE: 8-K SEC ACT: SEC FILE NUMBER: 001-10273 FILM NUMBER: 739242 BUSINESS ADDRESS: STREET 1: 24460 AURORA RD CITY: BEDFORD HEIGHTS STATE: OH ZIP: 44146 BUSINESS PHONE: 2164391830 MAIL ADDRESS: STREET 1: 24460 AURORA ROAD CITY: BEDFORD HEIGHTS STATE: OH ZIP: 44146 8-K 1 l84312ae8-k.txt WAXMAN INDUSTRIES, INC. 8-K 1 SECURITIES AND EXCHANGE COMMISSION WASHINGTON, D.C. 20549 FORM 8-K CURRENT REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES AND EXCHANGE ACT OF 1934 Date of Report (Date of earliest event reported): September 29, 2000 Waxman Industries, Inc. ----------------------- (Exact name of registrant as specified in its charter) Delaware 0-5888 34-0899894 - -------- ------ ---------- (State or other jurisdiction (Commission File Number) (IRS Employer of incorporation) Identification Number) 24460 Aurora Road, Bedford Heights, Ohio 44146 ---------------------------------------- ----- (Address of principal executive offices) (Zip Code) Registrant's telephone number, including area code: (440) 439-1830 -------------------------------------------------------------- Not Applicable -------------------------------------------------------------- (Former name or former address, if changed since last report.) 2 ITEM 2. ACQUISITION OR DISPOSITION OF ASSETS. ------------------------------------- On October 2, 2000, Waxman Industries, Inc. (the "Company") announced that it had completed the disposition of all the remaining shares of common stock of Barnett Inc. ("Barnett") owned by Waxman USA Inc. ("Waxman USA"), a Delaware corporation and a wholly-owned subsidiary of the Company (together with the 160,723 shares described below the "Barnett Shares"). The Barnett Shares constituted approximately 44.2% of the outstanding common stock, $.01 par value per share, of Barnett (the "Barnett Common Stock"), a formerly wholly-owned subsidiary of the Company. On September 29, 2000, all of the outstanding shares of Barnett Common Stock were purchased by Wilmar Industries, Inc. ("Wilmar") for $13.15 per share (the "Merger Consideration"), pursuant to that certain Agreement and Plan of Merger, dated as of July 10, 2000 (the "Merger Agreement"), by and among Barnett, Wilmar and BW Acquisition, Inc., a Delaware corporation and a wholly-owned subsidiary of Wilmar ("Merger Sub" and together with Wilmar, the "Purchaser"), pursuant to a merger of Merger Sub with and into Barnett (the "Merger"), and a Certificate of Merger was filed with the Secretary of State of the State of Delaware. On September 1, 2000, Barnett had repurchased from Waxman USA 160,723 shares of Barnett Common Stock for a total consideration of $2,000,000. On October 11, 2000, the Purchaser made a payment to Waxman USA in the amount of $113,507.45, equal to the difference between (a) the Merger Consideration times 160,723 shares and (b) $2,000,000. The aggregate proceeds from the sale of the Barnett Shares have been used to pay taxes, to reduce the Company's credit facility with Congress Financial Corporation by approximately $11.0 million, to pay interest on and redeem the remaining approximately $35.9 million of Waxman USA's 11 1/8% Senior Notes due 2001 (the "Senior Notes") in full and complete satisfaction of such notes and to pay interest due on the Company's 12 3/4% Senior Secured Deferred Coupon Notes due 2004 (the "Deferred Coupon Notes"). The remaining net proceeds have been placed in a segregated account, which will be used to fully satisfy all of the Deferred Coupon Notes. A copy of the agreements referred to above are incorporated herein by reference. A copy of the press release issued by the Company with respect to the foregoing transactions is attached hereto as Exhibit 99.1 and is incorporated herein by reference. ITEM 3. BANKRUPTCY OR RECEIVERSHIP. --------------------------- On October 2, 2000, the Company filed a voluntary petition for relief (the "Joint Plan of Reorganization") under Chapter 11 of title 11 of the United States Code (the "Bankruptcy Code") in the United States Bankruptcy Court for the District of Delaware. Prior to its filing, the Joint Plan of Reorganization had received the approval of the holders of 97% of the Deferred Coupon Notes. The only class of security holders to be affected under the Joint Plan of Reorganization will be the holders of the Deferred Coupon Notes. Pursuant to sections 1107 and 1108 of the Bankruptcy Code, the Company is continuing in the management and possession of its properties as debtor in possession, and thus no trustee has been appointed in the bankruptcy case. The bankruptcy case has been assigned number 00-3815. 3 ITEM 7. RELATED FINANCIAL INFORMATION AND EXHIBITS. ------------------------------------------- (b) Pro Forma Financial Information ------------------------------- UNAUDITED PROFORMA CONDENSED CONSOLIDATED FINANCIAL INFORMATION The accompanying unaudited proforma condensed financial information gives effect to two separate transactions. The accompanying proforma condensed consolidated balance sheets reflect the transactions as if they occurred on June 30, 2000 and utilizes the audited June 30, 2000 consolidated balance sheet contained in the Annual Report on Form 10-K filed by the Company with the Securities and Exchange Commission on August 29, 2000 (the "Form 10-K"). The accompanying proforma statement of operations reflects the transactions as if they occurred on July 1, 1999 and utilizes the audited fiscal 2000 statement of operations contained in the Form 10-K. The accompanying unaudited proforma condensed financial information incorporates by reference the Report of Independent Public Accountants, dated August 28, 2000, which includes an explanatory paragraph with respect to conditions that raise substantial doubt about the Company's ability to continue as a going concern. The first transaction, detailed as Group 1 proforma adjustments, gives effect to the sale of all of the remaining Barnett Common Stock owned by Waxman USA Inc. and the application of the proceeds to repay Waxman USA's 11 1/8% Senior Notes due 2001, reduce working capital borrowings from Congress Financial Corporation and to pay taxes and other expenses associated with the transaction. With the September 29, 2000 sale of the Barnett Common Stock, substantially all of the Group 1 adjustments occurred in the first fiscal quarter ended September 30, 2000. The second transaction, detailed as Group 2 proforma adjustments, gives effect to the Company's completion of its financial restructuring plan, which included the sale of the Barnett Common Stock as an integral element for the jointly sponsored, prepackaged plan of reorganization with the United States Bankruptcy Court (the "Joint Plan"). In order to more effectively complete the restructuring plan, and to cause the remaining Deferred Coupon Note holders to accept the same discount as the committee members, Waxman Industries Inc. filed this Joint Plan on October 2, 2000 with the committee of Deferred Coupon Note holders, the only impaired class of creditors. The vote resulted in 97 percent of the Deferred Coupon Note holders voting, all in favor to accept the Joint Plan. The Company has a confirmation hearing scheduled for November 14, 2000. This information is not necessarily indicative of future consolidated results of operations or financial position and it should be read in conjunction with the separate historic financial statements and related notes of Waxman, incorporated herein by reference. 4 WAXMAN INDUSTRIES, INC. AND SUBSIDIARIES UNAUDITED PROFORMA CONDENSED CONSOLIDATED BALANCE SHEETS JUNE 30, 2000 (IN THOUSANDS) ASSETS
Proforma Proforma As Reported Adjustments Adjustments Proforma June 30, 2000 Group 1 Subtotal Group 2 June 30, 2000 ------------- ------- -------- ------- ------------- CURRENT ASSETS: Cash and cash equivalents $ 811 $37,610 (1) $38,421 $(38,938) (A) $ (517) Trade receivables, net 12,068 -- 12,068 -- 12,068 Other receivables 3,656 -- 3,656 -- 3,656 Inventories 15,351 -- 15,351 -- 15,351 Prepaid expenses 1,853 -- 1,853 -- 1,853 -------- -------- ------- --------- -------- Total current assets 33,739 37,610 71,349 (38,938) 32,411 -------- -------- ------- --------- -------- INVESTMENT IN BARNETT 42,896 (42,896) (2) -- -- -- -------- -------- ------- --------- -------- PROPERTY AND EQUIPMENT: Land 585 -- 585 -- 585 Buildings 4,545 -- 4,545 -- 4,545 Equipment 11,061 -- 11,061 -- 11,061 -------- -------- ------- --------- -------- 16,191 -- 16,191 -- 16,191 Less accumulated depreciation and amortization (7,137) -- (7,137) -- (7,137) -------- -------- ------- --------- -------- Property and equipment, net 9,054 -- 9,054 -- 9,054 -------- -------- ------- --------- -------- UNAMORTIZED DEBT ISSUANCE COSTS, NET 2,444 (132) (3) 2,312 (2,014) (B) 298 DEFERRED TAX ASSET 367 (367) (4) -- -- -- OTHER ASSETS 5,746 (2,996) (5) 2,750 -- 2,750 -------- -------- ------- --------- -------- $ 94,246 $(8,781) $85,465 $(40,952) $ 44,513 ======== ======== ======= ========= ========
5 WAXMAN INDUSTRIES, INC. AND SUBSIDIARIES UNAUDITED PROFORMA CONDENSED CONSOLIDATED BALANCE SHEETS JUNE 30, 2000 (IN THOUSANDS, EXCEPT PER SHARE DATA) LIABILITIES AND STOCKHOLDERS' EQUITY
Proforma Proforma As Reported Adjustments Adjustments Proforma June 30, 2000 Group 1 Subtotal Group 2 June 30, 2000 ------------- ------- -------- ------- ------------- CURRENT LIABILITIES: Current portion of long-term debt $ 20,366 $(10,048) (6) $10,318 -- $ 10,318 Accounts payable 6,512 -- 6,512 -- 6,512 Accrued liabilities 3,018 -- 3,018 -- 3,018 Accrued income taxes payable 394 14,000 (7) 14,394 (12,000) (C) 2,394 Accrued interest 8,231 (7,324) (8) 907 -- 907 -------- ------- ------- -------- ------- Total current liabilities 38,521 (3,372) 35,149 (12,000) 23,149 -------- ------- ------- -------- ------- OTHER LONG-TERM DEBT, NET OF CURRENT PORTION 780 -- 780 -- 780 SENIOR SECURED DEFERRED COUPON NOTES, NET 91,818 -- 91,818 (91,818) (D) -- SENIOR NOTES 35,855 (35,855) (9) -- -- -- DEFERRED GAIN ON SALE OF U.S. LOCK 7,815 (7,815) (10) -- -- -- COMMITMENTS AND CONTINGENCIES STOCKHOLDERS' EQUITY: Preferred stock, $0.01 par value per share: authorized and unissued 2,000 shares -- -- -- -- -- Common stock, $0.01 par value per share: 22,000 shares authorized; 9,976 shares issued and outstanding 99 -- 99 -- 99 Class B common stock, $.01 par value per share: 6,000 shares authorized; 2,142 shares issued and outstanding 21 -- 21 -- 21 Paid-in capital 21,752 -- 21,752 -- 21,752 Retained deficit (101,756) 38,261 (11) (63,495) 62,866 (E) (629) -------- ------- ------- -------- ------- (79,884) 38,261 (41,623) 62,866 21,243 Accumulated other comprehensive loss (659) -- (659) -- (659) -------- ------- ------- -------- ------- Total stockholders' (deficit) equity (80,543) 38,261 (42,282) 62,866 20,584 ------- ------ ------- -------- ------- $94,246 $(8,781) $85,465 $(40,952) $44,513 ======== ------- ------- -------- =======
6 WAXMAN INDUSTRIES, INC. AND SUBSIDIARIES UNAUDITED PROFORMA CONSOLIDATED STATEMENT OF OPERATIONS TWELVE MONTHS ENDED JUNE 30, 2000 (IN THOUSANDS, EXCEPT PER SHARE DATA)
As Reported Proforma Proforma Proforma June 30, Adjustments Adjustments June 30, 2000 Group 1 Subtotal Group 2 2000 ---- ------- -------- ------- ---- Net sales $81,360 -- $81,360 -- $81,360 Cost of sales 59,259 -- 59,259 -- 59,259 -------- ------- -------- ------- -------- Gross profit 22,101 -- 22,101 -- 22,101 Selling, general and administrative expenses 27,094 (150) (F) 26,944 (474) (F) 26,470 Restructuring, impairment and procurement charges 10,370 -- 10,370 -- 10,370 -------- ------- -------- ------- -------- Operating income (loss) (15,363) 150 (15,213) 474 (14,739) Loss on sale of WAMI, net (2,024) -- (2,024) -- (2,024) Equity earnings of Barnett 6,511 (6,511) (G) -- -- -- Amortization of deferred U.S. Lock gain 202 (202) (H) -- -- -- Interest expense, net of interest income 18,201 (4,959) (I) 13,242 (11,831) (I) 1,411 -------- ------- -------- ------- -------- Loss before income taxes (28,875) (1,604) (30,479) 474 (18,174) Benefit for income taxes (27) -- (27) -- (27) -------- ------- -------- ------- -------- Net loss $(28,848) $10.227 $(18,621) $474 $(18,147) ======== ======= ======== ==== ======== Other comprehensive income (loss): Foreign currency translation adjustment 370 -- 370 -- 370 -------- ------- -------- ------- -------- Comprehensive loss $(28,478) $10,227 $(18,251) $474 $(17,777) ======== ======= ======== ==== ======== Net loss per share: Basic and diluted net loss per share $ (2.39) $(1.50) ======= ======= Weighted average number of common shares outstanding 12,066 12,066 ======= =======
7 WAXMAN INDUSTRIES, INC. AND SUBSIDIARIES NOTES TO UNAUDITED PROFORMA CONSOLIDATED FINANCIAL STATEMENTS JUNE 30, 2000 BALANCE SHEETS PROFORMA ADJUSTMENTS - GROUP 1 (1) Represents the cash proceeds from the sale of 7,186,530 shares of Barnett at $13.15 per share, net of payments for expenses, taxes, retirement of Waxman USA's Senior Notes and reduction of working capital bank debt. Waxman USA has deposited approximately $39.0 million into a segregated account for the benefit of the Deferred Coupon Note holders, as part of the financial restructuring plan of the Company. (2) Represents the write off of the equity investment in Barnett as a result of the Barnett Sale. (3) Represents the write off of debt issuance costs associated with the Senior Notes, which were retired. (4) Represents the write off of the deferred state tax asset associated with the deferred gain on the sale of U.S. Lock. (5) Represents the write off of deferred costs associated with the financial restructuring that were capitalized in the accompanying balance sheets. (6) Represents the reduction of working capital debt with Congress Financial Corporation with a portion of the net proceeds from the Barnett Sale. (7) Represents the net adjustment to accrued taxes based on the Barnett Sale and other adjustments. (8) Represents the payment of accrued interest to the Senior Note holders from March 1, 2000 until June 30, 2000 and accrued interest for the Deferred Coupon Note holders for the semi-annual payment that was due on June 1, 2000. (9) Represents the retirement of the Waxman USA 11 1/8% Senior Notes with a portion of the proceeds from the Barnett Sale. (10) Represents the realization of the deferred gain from the sale of U.S. Lock to Barnett, which was being amortized ratably over the same length of time as Barnett amortized its goodwill associated with its acquisition. As a result of the Barnett Sale, the Company recognizes the remaining unamortized balance immediately. (11) Represents the net profit and loss impact of the above adjustments. PROFORMA ADJUSTMENTS - GROUP 2 (A) Represents the settlement of the obligation to the Deferred Coupon Note holders with the release of the segregated account upon confirmation of the Chapter 11 Joint Plan of Reorganization. (B) Represents the write off of debt issuance costs associated with the Deferred Coupon Notes. (C) Represents the utilization of the net operating loss carryforward and other adjustments associated with the financial restructuring of the Company. (D) Represents the elimination of the Company's Deferred Coupon Notes. (E) Represents the net profit and loss impact of the above adjustments. STATEMENT OF OPERATIONS PROFORMA ADJUSTMENTS - GROUP 1 AND 2 (F) Represents the elimination of deferred loan cost amortization as follows: Senior Notes $ 150,000 (Group 1) Deferred Coupon Notes $ 474,000 (Group 2) (G) Represents the elimination of the equity earnings in Barnett due to the Barnett Sale. (H) Represents the elimination of the amortization of the deferred gain on the sale of US Lock. (I) Represents the reduction in interest as follows: Senior Notes $ 3,989,000 (Group 1) Congress Financial Corporation $ 970,000 (Group 1) ----------- Total Group 1 $ 4,959,000 ----------- Deferred Coupon Notes $11,831,000 (Group 2) ----------- 8 (c) Exhibits -------- 10.1 Merger Agreement, dated as of July 10, 2000, by and among Wilmar Industries, Inc. ("Wilmar"), BW Acquisition, Inc. ("BW Acquisition") and Barnett Inc. ("Barnett"). (Exhibit 10.1 to the Company's Form 8-K filed July 17, 2000, File No. 0-5888, incorporated herein by reference).* 10.2 Stockholder Agreement, dated as of July 10, 2000, by and among the Company, Waxman USA, Wilmar and BW Acquisition. (Exhibit 10.2 to the Company's Form 8-K filed July 17, 2000, File No. 0-5888, incorporated herein by reference).* 10.3 Agreement, dated as of July 7, 2000, by and between Waxman USA and Barnett. (Exhibit 10.4 to the Company's Form 8-K filed July 17, 2000, File No. 0-5888, incorporated herein by reference).* 23.1 Consent of Arthur Andersen LLP. 99.1 Press release issued by the Company on October 2, 2000. - ------------------ * Incorporated herein by reference as indicated. 9 SIGNATURES Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized. WAXMAN INDUSTRIES, INC. (Registrant) Date: October 12, 2000 By: /s/ Mark W. Wester ----------------------------------- Name: Mark W. Wester Title: Vice President - Finance and Chief Financial Officer 10 INDEX TO EXHIBITS Exhibit No. Page No. - ----------- -------- 10.1 Merger Agreement, dated as of July 10, 2000, by and among Wilmar Industries, Inc. ("Wilmar"), BW Acquisition, Inc. ("BW Acquisition") and Barnett Inc. ("Barnett"). (Exhibit 10.1 to the Company's Form 8-K filed July 17, 2000, File No. 0-5888, incorporated herein by reference).* 10.2 Stockholder Agreement, dated as of July 10, 2000, by and among the Company, Waxman USA, Wilmar and BW Acquisition. (Exhibit 10.2 to the Company's Form 8-K filed July 17, 2000, File No. 0-5888, incorporated herein by reference).* 10.3 Agreement, dated as of July 7, 2000, by and between Waxman USA and Barnett. (Exhibit 10.4 to the Company's Form 8-K filed July 17, 2000, File No. 0-5888, incorporated herein by reference).* 23.1 Consent of Arthur Andersen LLP. 99.1 Press release issued by the Company on October 2, 2000. - ------------------ * Incorporated herein by reference as indicated. EX-23.1 2 l84312aex23-1.txt EXHIBIT 23.1 1 EXHIBIT 23.1 CONSENT OF INDEPENDENT PUBLIC ACCOUNTANTS As independent public accountants, we hereby consent to the incorporation by reference in this Form 8-K of our report dated August 28, 2000 on the Consolidated Financial Statements of Waxman Industries, Inc. and Subsidiaries for the year ended June 30, 2000. It should be noted that we have not audited any financial statements of the Company subsequent to June 30, 2000, or performed any audit procedures subsequent to the date of our report. /s/ Arthur Andersen LLP Cleveland, Ohio October 12, 2000 EX-99.1 3 l84312aex99-1.txt EXHIBIT 99.1 1 EXHIBIT 99.1 [LETTERHEAD WAXMAN] NEWS RELEASE WAXMAN INDUSTRIES, INC. ANNOUNCES SALE OF INTEREST IN BARNETT Comprehensive Financial Restructuring Plan Proceeding ----------------------------------------------------- Bedford Heights, Ohio -- October 2, 2000 - Waxman Industries, Inc. (OTCBB - -WAXX), a holding company for businesses supplying specialty plumbing and other products to the U.S. repair and remodeling market, reported it completed the sale of its remaining interest in Barnett Inc. (NASDAQ - BNTT), raising approximately $92.5 million, which is being utilized for the comprehensive financial restructuring of the Company, including the reduction of debt. Earlier this month, the Company sold 160,723 of its Barnett shares to Barnett, raising $2.0 million. The sale proceeds have been used to reduce the Company's bank facility by approximately $11.0 million, to pay taxes, to redeem the remaining $35.9 million of Waxman USA's 11 1/8% Senior Notes (the "Senior Notes") and to pay interest due on the Waxman Industries' 12 3/4% Deferred Coupon Notes (the "Deferred Coupon Notes"). The remaining net proceeds have been placed in a segregated account, which will be used to satisfy all of the $99.3 million of Deferred Coupon Notes. The completion of the Barnett Stock sale was an integral element of the Debt Reduction Agreement entered into in December 1999 by the Company and an Ad Hoc Committee representing the holders of approximately 87% of its Deferred Coupon Notes and approximately 65% of the Senior Notes. In order to more effectively complete the restructuring plan, and to cause the remaining Deferred Coupon Note holders to accept the same discount as the committee members, Waxman Industries Inc. will file a pre-negotiated plan of reorganization with the Bankruptcy Court. This Plan was jointly developed and will be jointly sponsored by the committee of Deferred Coupon Note holders, the only impaired class of creditors. The Company believes that the Joint Plan should proceed quickly because the holders of approximately 97% of the Deferred Coupon Notes have voted in favor of the Joint Plan. The Company expects to complete its Plan in calendar 2000. The restructuring plan does not involve any of the Company's operating subsidiaries, including Waxman Consumer Products Group, Medal of Pennsylvania, Inc., WAMI Sales Inc., or the operations in Taiwan and China (TWI and CWI). The operating subsidiaries, which have their own bank credit facility, will continue to pay all of their trade creditors, employees and other liabilities under normal trade conditions. CAUTIONARY STATEMENT UNDER THE PRIVATE SECURITIES LITIGATION REFORM ACT OF 1995. Statements on this Press Release may constitute "forward-looking statements" within the meaning of the Private Securities Litigation Reform Act of 1995 that are based on the beliefs of the Company and its management. When used in this document, the words "anticipate," "believe," 2 "continue," "estimate," "expect," "intend," "may," "should," and similar expressions are intended to identify forward-looking statements. Such statements reflect the current view of the Company with respect to future events and are subject to certain risks, uncertainties and assumptions, including, but not limited to, the risk that the Company may not be able to implement its deleveraging strategy, risks associated with currently unforeseen competitive pressures and risks affecting the Company's industry, such as decreased consumer spending, customer concentration issues and the effects of general economic conditions. In addition, the Company's business, operations and financial condition are subject to the risks, uncertainties and assumptions which are described in the Company's reports and statements filed from time to time with the Securities and Exchange Commission. Should one or more of those risks or uncertainties materialize, or should underlying assumptions prove incorrect, actual results may vary materially from those described herein. -----END PRIVACY-ENHANCED MESSAGE-----