-----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, TjleXZqVZSquAw7UKMFdOBlu5NB4P1o005xbD8mKLz4/CDBctNj61mGAYyQGEw55 Fb+l9QQlh0VKYV8d8a1uZQ== 0000950152-95-002251.txt : 19951004 0000950152-95-002251.hdr.sgml : 19951004 ACCESSION NUMBER: 0000950152-95-002251 CONFORMED SUBMISSION TYPE: 424B3 PUBLIC DOCUMENT COUNT: 2 FILED AS OF DATE: 19951003 SROS: NYSE FILER: COMPANY DATA: COMPANY CONFORMED NAME: WAXMAN INDUSTRIES INC CENTRAL INDEX KEY: 0000105096 STANDARD INDUSTRIAL CLASSIFICATION: WHOLESALE-HARDWARE & PLUMBING & HEATING EQUIPMENT & SUPPLIES [5070] IRS NUMBER: 340899894 STATE OF INCORPORATION: DE FISCAL YEAR END: 0630 FILING VALUES: FORM TYPE: 424B3 SEC ACT: 1933 Act SEC FILE NUMBER: 033-54211 FILM NUMBER: 95578363 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 424B3 1 WAXMAN 424(B)(3) 1 PROSPECTUS SUPPLEMENT Filed Pursuant to Rule 424(b)(3) (To Prospectus Dated October 21, 1994) File No. 033-54211 WAXMAN INDUSTRIES, INC. 2,950,000 Warrants to Purchase Shares of Common Stock Introduction - ------------ This Prospectus Supplement is a supplement to the Prospectus dated October 21, 1994, as supplemented by a Prospectus Supplement dated September 5, 1995 (the "Prospectus"), relating to the public offering of (i) 2,950,000 Common Stock Purchase Warrants (the "Warrants") and (ii) 2,950,000 shares of the Company's Common Stock, $.01 par value, issuable upon exercise of the Warrants. This Prospectus Supplement is part of, and should be read in conjunction with, the Prospectus. Results of Operations for Fiscal Year 1995 - ------------------------------------------ As previously reported, on August 29, 1995, the Company announced that it has decided to sell the business conducted by its Waxman Consumer Products Group Inc. subsidiary ("Consumer Products") in order to enhance the Company's capital structure and allow the Company to focus on its fast growing Barnett Inc. ("Barnett") mail order and telemarketing business. Accordingly, Consumer Products is reported as a discontinued operation and the consolidated financial statements of the Company have been reclassified to report separately Consumer Product's net assets and results of operations. On September 28, 1995, the Company issued a press release announcing its results of operations for the fiscal year and quarter ended June 30, 1995, a copy of which is attached hereto and incorporated by reference herein. As reflected in the attached press release, the Company recorded a $11.0 million charge, without tax benefit, which represents the estimated loss to be incurred upon completion of the sale of the Consumer Products business. ________________________________________________________________________ The date of this Prospectus Supplement is September 28, 1995 EX-99 2 WAXMAN EX-99 1 WAXMAN EXHIBIT 99 WAXMAN INDUSTRIES, INC. N E W S R E L E A S E NYSE: WAX FOR ADDITIONAL INFORMATION, CONTACT: At The Company: At The Financial Relations Board, Inc.: ------------------------- --------------------------------------- Armond Waxman, President Kathleen M. Brunson 216-439-1830 312-266-7800 (Chicago) Neal R. Restivo, V.P. Finance Regina K. Ryan 216-439-1830 212-661-8030 (New York) FOR IMMEDIATE RELEASE WAXMAN INDUSTRIES, INC. REPORTS ------------------------------- RESULTS FOR FISCAL 1995; ------------------------ OUTLOOK FOR FIRST QUARTER OF FISCAL 1996 ---------------------------------------- BEDFORD HEIGHTS, Ohio -- September 28, 1995 -- Waxman Industries, Inc. (NYSE-WAX), a leading supplier to the U.S. repair and remodeling market, today reported results for the Company's fourth quarter and fiscal year ended June 30, 1995 as well as the outlook for the first quarter of fiscal year 1996. As previously announced, the Company has entered into a letter of intent to sell, for $50 million in cash, 75% of its Consumer Products business, together with certain supporting operations, to a group consisting of HIG Capital Management of Miami, Florida along with certain members of Consumer Products' existing management team. The Company anticipates that the proceeds from any such sale will be used, in part, to retire its $39.2 million of Senior Secured Notes due September 1998 thereby eliminating the mandatory sinking fund requirements relating to these notes which are scheduled to commence in September 1996. As a result of its decision to sell the Consumer Products business, the Company is required, for financial reporting purposes, to treat Consumer Products as a discontinued operation. Consumer Products continues to operate on a normal basis without any disruptions to its customer and vendor relationships. -1- Waxman Industries, Inc. 24460 Aurora Road Bedford Heights, Ohio 44146 2 For the fiscal year ended June 30, 1995, sales from continuing operations totaled $156.0 million compared with $139.9 million in the prior year period, an increase of 11.5%. Excluding the results of H. Belanger Plumbing Accessories (Belanger), which was sold by the Company in October 1993, sales from continuing operations for the year increased by 12.7%. Operating income from continuing operations for fiscal 1995 totaled $11.1 million compared with $10.4 million in the prior year, an increase of 6.3%. Interest expense from continuing operations totaled $20.1 million in fiscal year 1995 compared with $16.4 million in the prior year, an increase of 22.3%. Cash interest expense from continuing operations was, however, significantly lower than total interest expense for fiscal 1995 primarily as a result of the issuance of the Company's Deferred Coupon Notes in May 1994. Cash interest expense for fiscal 1995 totaled $11.7 million. The Company's operating cash flow from continuing operations for fiscal 1995 totaled $15.1 million and was more than sufficient to cover cash interest requirements. In addition, the Company had availability of $6.1 million under its revolving credit facility at June 30, 1995. Loss from continuing operations totaled $8.7 million for fiscal 1995 compared with $4.3 million in the prior year primarily as a result of the increase in non-cash interest expense. Sales from continuing operations for the fourth quarter totaled $39.1 million compared with $36.1 million in the prior year, an increase of 8.2%. Barnett's sales increased 10.6% for the fourth quarter compared to the prior year period. As a result of weak market conditions in April and May, operating income from continuing operations for the fourth quarter -2- 3 totaled $1.2 million compared with $2.1 million in the prior year period. Also contributing to the lower fourth quarter operating income were decreased production levels at the Company's Mexican manufacturing operation. The reduced production levels were caused by the Company's inventory reduction efforts and are not expected to be recurring. Interest expense from continuing operations totaled $5.7 million for the fourth quarter compared to $4.4 million in the prior year period, an increase of 32%. Loss from continuing operations totaled $4.8 million for the fourth quarter compared with a loss of $2.3 million in the prior year period, as a result of the increase in interest expense as well as the factors discussed above. Discontinued Operations - ----------------------- During the current year fourth quarter, the Company recorded an $11.0 million charge which represents the estimated loss to be incurred upon completion of the sale of the Consumer Products business. The operating loss from discontinued operations for the fourth quarter totaled $3.9 million compared with operating income of $.2 million in the prior year period. The current quarter operating loss includes interest expense of $1.9 million and a $2.8 million charge relating to the downsizing of Consumer Products' distribution network from four locations to three. For the fiscal year ended June 30, 1995, the operating loss from discontinued operations totaled $3.3 million and included interest expense of $6.3 million as well as the restructuring charge discussed above. The prior year operating loss from discontinued operations totaled $2.5 million. -3- 4 Summary of Results - ------------------ For the quarter ended June 30, 1995, the Company incurred a net loss of $19.7 million or $1.68 per share which included $14.9 million or $1.27 per share relating to discontinued operations. In the prior year fourth quarter, the Company incurred a net loss of $2.3 million or $.20 per share which included operating income of $.02 per share relating to discontinued operations. For fiscal year 1995, the Company incurred a net loss of $23.1 million or $1.97 per share which included $14.3 million or $1.22 per share relating to discontinued operations. The prior fiscal year's net loss totaled $51.9 million or $4.44 per share which included $40.8 million or $3.49 per share relating to discontinued operations as well as an extraordinary charge of $6.8 million or $.58 per share relating to the early retirement of debt. Although the Company incurred a significant loss in fiscal year 1995, the majority of such loss related to discontinued operations and was non-cash. The Company generated positive operating cash flow during fiscal 1995 and these funds, along with availability under its revolving credit agreement, provide the liquidity the Company needs to meet its vendor obligations, as well as operating and cash interest requirements. Outlook for First Quarter of Fiscal 1996 - ---------------------------------------- The Company expects sales from continuing operations to increase approximately 9 to 10% for the quarter ended September 30, 1995. Barnett's sales for the quarter are expected to increase approximately 15%. Commenting on the Company's announcement, Armond Waxman, Co-Chairman of the Board and Co-Chief Executive Officer, said, "We are optimistic about the Company's future as, going forward, Barnett will -4- 5 represent approximately 70% of sales from our continuing operations. We believe that once the sale of Consumer Products has been completed, the Company will be better positioned to take advantage of Barnett's growth opportunities as we will have eliminated all significant debt maturities for the next several years. Also, in connection with the sale we expect to enter into a new secured credit facility which will improve liquidity through greater working capital availability. The sale of Consumer Products is proceeding well and we are optimistic that we will be able to consummate the transaction with HIG Capital Management." Waxman Industries, Inc. is a leading supplier to the repair and remodeling market in the United States. Through it's Barnett mail order and telemarketing business as well as its other smaller operations, the Company markets and distributes a broad range of plumbing, electrical and hardware products to over 49,000 customers in the United States. Through their nationwide network of warehouses and distribution centers, the Company's operations provide their customers with a single source for an extensive line of competitively priced quality products. # # # Financial Tables Follow To receive additional information on the Company via facsimile at no cost, please dial 1-800-PRO-INFO and enter the company code number 166. -5- 6 WAXMAN INDUSTRIES, INC. AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF INCOME (In Thousands, Except Per Share Data) (For the Year and Three Months Ended June 30, 1995 and 1994)
Year Ended Three Months Ended June 30, June 30, 1995 1994 1995 1994 ------- ------- ------- ----- Net sales $155,990 $139,897 $ 39,101 $ 36,141 Cost of sales 105,239 93,663 26,695 24,433 ------- ------- ------- ------- Gross profit 50,751 46,234 12,406 11,708 Operating expenses 39,676 35,812 11,182 9,640 ------- ------- ------- ------- Operating income 11,075 10,422 1,224 2,068 Other income (loss) 558 2,043 (149) 340 Interest expense, net (20,086) (16,427) (5,382) (4,387) ------- ------- ------- ------- Loss from continuing operations before income taxes (8,453) (3,962) (4,307) (1,979) Provision for income taxes 288 301 495 340 ------- ------- ------- ------- Loss from continuing operations (8,741) (4,263) (4,802) (2,319) Discontinued Operations: Loss from discontinued operations (3,332) (2,458) (3,867) 187 Loss on disposal, without tax benefit (11,000) (38,343) (11,000) - ------- ------- ------- ------- Loss before extraordinary charge (23,073) (45,064) (19,669) (2,132) Extraordinary charges, early retirement of debt, without tax benefit - (6,824) - (199) ------- ------- ------- ------- Net loss $(23,073) $(51,888) $(19,669) $ (2,331) ======= ======= ======= ======= Primary and fully diluted earnings (loss) per share: From continuing operations $ (.75) $ (.37) $ (.41) $ (.20) Discontinued operations: Loss from discontinued operations (.28) (.21) (.33) .02 Loss on disposal ( .94) (3.28) (.94) - Extraordinary charges - (.58) - (.02) ------- ------- ------- ------- Net loss $ (1.97) $ (4.44) $ (1.68) $ (.20) ======= ======= ======= ======= Average shares outstanding 11,712 11,666 11,712 11,674 ======= ======= ======= =======
-6- 7 WAXMAN INDUSTRIES, INC. AND SUBSIDIARIES CONSOLIDATED BALANCE SHEET June 30, 1995 and 1994 (In Thousands) ASSETS ------
June 30, June 30, 1995 1994 ----- ------ Current assets: Cash $ 1,496 $ 981 Accounts receivable, net 22,346 19,366 Inventories 38,436 39,448 Prepaid expenses 1,956 1,648 Net current assets of discontinued operations 53,865 51,530 ------- ------- Total current assets 118,099 112,973 ------- ------- Property and equipment, net 12,882 12,525 Net long-term assets of discontinued operations - 13,373 Cost of business in excess of net assets acquired, net and other assets 29,679 31,374 ------- ------- $160,660 $170,245 ======= =======
LIABILITIES AND STOCKHOLDERS' EQUITY ------------------------------------ Current liabilities: Current portion of long-tern debt $ 4,424 $ 2,894 Senior Secured Notes, to be retired with proceeds from the sale of Consumer Products 38,786 - Accounts payable 16,258 13,177 Accrued liabilities 3,875 3,203 ------ ------- Total current liabilities 63,343 19,274 ------- ------- Long-term debt, net of current portion 54,089 53,224 Senior Secured Notes - 38,675 Senior Secured Deferred Coupon Notes 54,875 48,031 Subordinated Debt 48,750 48,750 Stockholders' Equity (60,397) (37,709) ------- ------- $160,660 $170,245 ======= =======
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