-----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, DL6GyQmgDBCfZvYSSd0fX7QZ7l5U7q/4xSBbhj7NwUymHS9v+CEpjclBikMTZdon q98LqGpGXFiqIs0UUemu4g== 0000014995-99-000014.txt : 19990421 0000014995-99-000014.hdr.sgml : 19990421 ACCESSION NUMBER: 0000014995-99-000014 CONFORMED SUBMISSION TYPE: 8-K/A PUBLIC DOCUMENT COUNT: 1 CONFORMED PERIOD OF REPORT: 19990420 ITEM INFORMATION: FILED AS OF DATE: 19990420 FILER: COMPANY DATA: COMPANY CONFORMED NAME: DIXON TICONDEROGA CO CENTRAL INDEX KEY: 0000014995 STANDARD INDUSTRIAL CLASSIFICATION: PENS, PENCILS & OTHER ARTISTS' MATERIALS [3950] IRS NUMBER: 230973760 STATE OF INCORPORATION: DE FISCAL YEAR END: 0930 FILING VALUES: FORM TYPE: 8-K/A SEC ACT: SEC FILE NUMBER: 001-08689 FILM NUMBER: 99597452 BUSINESS ADDRESS: STREET 1: 195 INTERNATIONAL PKWY STREET 2: STE 200 CITY: HEATHROW STATE: FL ZIP: 32746-5036 BUSINESS PHONE: 4078759000 MAIL ADDRESS: STREET 1: PO BOX 958413 STREET 2: STE 200 CITY: HEATHROW STATE: FL ZIP: 32795-8413 FORMER COMPANY: FORMER CONFORMED NAME: BRYN MAWR CORP/DE/ DATE OF NAME CHANGE: 19831002 FORMER COMPANY: FORMER CONFORMED NAME: BRYN MAWR GROUP INC DATE OF NAME CHANGE: 19730619 FORMER COMPANY: FORMER CONFORMED NAME: BRYN MAWR CAMP RESORTS INC DATE OF NAME CHANGE: 19700608 8-K/A 1 SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM 8-K/A CURRENT REPORT Pursuant to Section 13 or 15(d) of the Security Exchange Act of 1934 Date of Report (Date of earliest event reported): April 20, 1999 Dixon Ticonderoga Company (Exact name of registrant as specified in its charter) Delaware 0-2655 23-0973760 (State or the Jurisdiction of (Commission File Number) (IRS Employer incorporation) Identification Number) 195 International Parkway, Heathrow, FL 32746 (Address of principal executive offices) (Zip Code) Registrant's telephone number including area code: (407) 829 - 9000 ---------------- ITEM 2. Acquisition or Disposition of Assets - --------------------------------------------- On February 9, 1999, Dixon Ticonderoga Company (the "Company") entered into an Asset Purchase Agreement with Asbury Carbons, Inc., a Delaware corporation ("Asbury") pursuant to which Asbury agreed to purchase the assets comprising the Company's U.S. Graphite and Lubricants Division. On March 2, 1999, the Company completed the sale pursuant to the Asset Purchase Agreement for $23.5 million, plus the assumption of certain trade obligations related to the division. Except as specifically provided in the Asset Purchase Agreement, the Company generally retained all liabilities of the business arising from the operations of the division up through the closing date, including various environmental liabilities. Asbury, a privately-held company based in Wilmington, Delaware, purchased the division for $20.25 million in cash and executed a five-year subordinated note for the balance of $3.25 million. The note is unsecured and bears interest at 9% per annum, deferred until September 2, 2001. The Company's prior relationship with Asbury was limited to the purchase of certain carbon products used in its other businesses. Such purchases approximated $200,000 in fiscal 1998. The Asset Purchase Agreement provides that the note is subject to certain setoffs. The Company placed in escrow $705,000 pending the completion of certain post-closing procedures. Certain disputes (if any) with respect to claims of Asbury for indemnification for loss under the Asset Purchase Agreement would be subject to binding arbitration. On the closing date, the Company entered into various agreements with Asbury or its affiliate, Dixon Southwestern, Inc., pursuant to the Asset Purchase Agreement, including (a) a Noncompetition Agreement prohibiting the Company and its affiliates from competing with the division in all geo- graphic areas except Mexico, Central America and South America, for a period of ten years; (b) a Ground Lease relating to the Company's facility in Burnet, Texas; (c) a Ground Lease with option to purchase relating to the Company's facility located in Lakehurst, New Jersey; (d) an Environmental Agreement pursuant to which the Company agreed to perform remediation activities with respect to the facility in Lakehurst, New Jersey: (e) a Subordination Agreement with respect to the note; (f) a Product Supply Agreement pursuant to which Asbury's affiliate agreed to provide certain graphite products to the Company; and (g) a Texas Services Agreement, pursuant to which Asbury's affiliate agreed to provide certain services to the Company with respect to the Company's remaining property located in Burnet, Texas. The Company's U.S. Graphite and Lubricants Division generated revenues of approximately $11.5 million in fiscal 1998 and $2.7 million in the three months ended December 31, 1998. The division sources, refines, blends and markets bulk graphite in various grades and also produces and markets graphite-based lubricants for industrial and commercial applications. It operates manufacturing facilities in Lakehurst, New Jersey and Burnet, Texas, both included in this transaction. The sale included essentially all the operating assets of the division as well as intangible assets, such as tradenames and technology. ITEM 7. Financial Statements and Exhibits - ------------------------------------------ (a) Not applicable. (b) Pro forma financial information: PAGE ---- Introduction 4 Unaudited Pro Forma Condensed Consolidated Balance Sheet as of December 31, 1998 5 Unaudited Pro Forma Condensed Consolidated Statement of Operations for the Year Ended September 30, 1998 6 Unaudited Pro Forma Condensed Consolidated Statement of Operations for the Three Months Ended December 31, 1998 7 Notes to Unaudited Pro Forma Condensed Consolidated Financial Statements 8 (c) Exhibits The following exhibit is required to be filed as part of this report on Form 8-K/A: (2) Asset Purchase Agreement dated February 9, 1999, by and between Dixon Ticonderoga Company, as Seller, and Asbury Carbons, Inc., as Buyer (without schedules or exhibits).* * Incorporated by reference to the Company's current report on Form 8-K dated March 2, 1999, and incorporated herein by reference. The Company agrees to supplementally furnish to the Commission upon request, a copy of any omitted schedule or exhibit. DIXON TICONDEROGA COMPANY UNAUDITED PRO FORMA CONDENSED CONSOLIDATED FINANCIAL STATEMENTS INTRODUCTION The unaudited pro forma condensed consolidated balance sheet as December 31, 1998, assumes that the sale of its U.S. Graphite and Lubricants Division had occurred on December 31, 1998, and accordingly, is reflected in the financial position of Dixon Ticonderoga Company as of that date. The unaudited pro forma condensed consolidated statements of operations for the year ended September 30, 1998, and the three months ended December 31, 1998, present the results of operations of Dixon Ticonderoga Company assuming the acquisition had been consummated as of the beginning of each respective period. The unaudited pro forma condensed consolidated financial statements have been prepared by Dixon Ticonderoga Company and all calculations have been made upon assumptions deemed appropriate, using the Company's prevailing accounting policies. The unaudited pro forma financial information does not purport to be indicative of the results of operations or the financial position which would have actually been obtained if the sale had been consummated on the dates indicated. In addition, the unaudited pro forma financial information does not purport to be indicative of results of operations or financial position which may be achieved in the future. The unaudited pro forma financial information should be read in conjunction with consolidated financial statements and notes thereto contained in the Dixon Ticonderoga Company 1998 Annual Report on Form 10-K and December 31, 1998 Form 10-Q. DIXON TICONDEROGA COMPANY UNAUDITED PRO FORMA CONDENSED CONSOLIDATED BALANCE SHEET DECEMBER 31, 1998 AS PRO FORMA PRO REPORTED ADJUSTMENTS FORMA CURRENT ASSETS: Cash and cash equivalents $ 444,938 $( 7,411)(a) $ 437,527 Receivables, net 22,431,900 ( 1,517,485)(a) 20,914,415 Inventories 45,579,947 ( 6,119,979)(a) 39,459,968 Other current assets 2,063,680 ( 33,323)(a) 2,030,357 ------------- --------------- ------------ Total current assets 70,520,465 ( 7,678,198) 62,842,267 ------------- --------------- ------------ PROPERTY, PLANT AND EQUIPMENT 37,446,250 ( 5,626,289)(a) 31,819,961 Less accumulated depreciation (21,529,408) 3,466,879 (a) (18,062,529) ------------- --------------- ------------ 15,916,842 ( 2,159,410) 13,757,432 ------------- --------------- ------------ OTHER ASSETS 2,698,046 3,250,000 (a) 5,948,046 ------------- --------------- ------------ $ 89,135,353 $( 6,587,608) $ 82,547,745 ============= =============== ============= CURRENT LIABILITIES: Notes payable $ 25,190,802 $( 15,940,103)(a) $ 9,422,901 Current portion of long-term debt 1,871,102 -- 1,871,102 Accounts payable 7,918,726 ( 351,875)(a) 7,566,851 Accrued liabilities 7,013,913 ( 89,475)(a) 4,708,536 (b) 11,171,944 ------------ -------------- ------------ Total current liabilities 41,994,543 ( 11,672,917) 30,032,798 ------------ -------------- ------------ LONG-TERM DEBT 21,446,891 -- 21,446,891 ------------ -------------- ------------ DEFERRED INCOME TAXES AND OTHER 534,770 ( 315,579)(a) 219,191 ------------ -------------- ------------ MINORITY INTEREST 2,676,727 -- 2,676,727 ------------ -------------- ------------ SHAREHOLDERS' EQUITY Common stock 3,662,808 -- 3,662,808 Capital in excess of par value 3,386,005 -- 3,386,005 Retained earnings 19,664,143 5,400,888 (a)(b) 25,353,859 Accumulated comprehensive income (loss) ( 3,413,239) -- ( 3,413,239) ------------ -------------- ------------ 23,299,717 5,400,888 28,989,433 Less treasury stock ( 817,295) -- ( 817,295) ------------ -------------- ------------ TOTAL SHAREHOLDERS' EQUITY 22,482,422 5,400,888 28,172,138 ------------ -------------- ------------ $ 89,135,353 $( 6,587,608) $ 82,547,745 ============ ============== ============ DIXON TICONDEROGA COMPANY UNAUDITED PRO FORMA CONDENSED CONSOLIDATED STATEMENT OF OPERATIONS YEAR ENDED SEPTEMBER 30, 1998 AS PRO FORMA PRO REPORTED ADJUSTMENTS FORMA REVENUES $124,721,758 $(11,491,537)(c) $113,230,221 ------------ ------------ ------------ COSTS AND EXPENSES: Cost of goods sold 76,296,877 ( 6,872,557)(c) 69,424,320 Selling and administrative expenses 38,349,867 ( 2,459,246)(c) 35,890,621 ------------ ------------ ------------ 114,646,744 ( 9,331,803) 105,314,941 ------------ ------------ ------------ OPERATING INCOME 10,075,014 ( 2,159,734) 7,915,280 INTEREST EXPENSE 4,671,646 ( 1,370,000)(d) 3,301,646 ------------ ------------ ------------ INCOME BEFORE INCOME TAXES AND MINORITY INTEREST 5,403,368 ( 789,734) 4,613,634 INCOME TAXES 1,562,069 ( 315,900)(e) 1,246,169 ------------ ------------ ------------ 3,841,299 ( 473,834) 3,367,465 MINORITY INTEREST 704,940 -- 704,940 ------------ ------------ ------------ NET INCOME $ 3,136,359 $( 473,834) $ 2,662,525 ============ ============ ============ EARNINGS PER SHARE: Basic $ .93 $ .79 ============ ============ Diluted $ .85 $ .72 ============ ============ WEIGHTED AVERAGE SHARES OUTSTANDING: Basic 3,387,202 3,387,202 ============ ============ Diluted 3,708,026 3,708,026 ============ ============ DIXON TICONDEROGA COMPANY UNAUDITED PRO FORMA CONDENSED CONSOLIDATED STATEMENT OF OPERATIONS THREE MONTHS ENDED DECEMBER 31, 1998 AS PRO FORMA PRO REPORTED ADJUSTMENTS FORMA REVENUES $ 22,807,169 $( 2,656,624) (c) $ 20,150,545 ------------ ------------ ------------ COSTS AND EXPENSES: Cost of goods sold 14,899,619 ( 1,716,995) (c) 13,182,624 Selling and administrative expenses 7,797,673 ( 554,284) (c) 7,243,389 ------------ ------------ ------------ 22,697,292 ( 2,271,279) 20,426,013 ------------ ------------ ------------ OPERATING INCOME (LOSS) 109,877 ( 385,345) ( 275,468) INTEREST EXPENSE 1,109,072 ( 340,000) (d) 769,072 ------------ ------------ ------------ LOSS BEFORE INCOME TAXES AND MINORITY INTEREST ( 999,195) ( 45,345) ( 1,044,540) INCOME TAXES (BENEFIT) ( 364,200) ( 18,100) (e) ( 382,300) ------------ ------------ ------------ ( 634,995) ( 27,245) ( 662,240) MINORITY INTEREST ( 35,078) -- ( 35,078) ------------ ------------ ------------ NET LOSS $( 599,917) $( 27,245) $( 627,162) ============ ============ ============ NET LOSS PER SHARE: Basic $( .17) $( .18) ============ ============ Diluted $( .17) $( .18) ============ ============ WEIGHTED AVERAGE SHARES OUTSTANDING: Basic 3,431,797 3,431,797 ============ ============ Diluted 3,539,740 3,539,740 ============ ============ NOTES TO UNAUDITED PRO FORMA CONDENSED CONSOLIDATED FINANCIAL STATEMENTS a. To reflect the sale of the Company's U.S. Graphite and Lubricants Division (net after-tax proceeds and assets sold to and liabilities assumed by buyer) and the application of net proceeds to reduce outstanding notes payable. b. To recognize accrued liabilities for ongoing maintenance of unsold real estate, environmental expenses, employee severances and benefit costs and other post-closing obligations. c. To exclude the results of operations of the Company's U.S. Graphite and Lubricants Division after adjustment for allocated corporate expenses not eliminated. d. To adjust interest expense to reflect the reduction in bank debt from net sales proceeds and interest income from note receivable. e. To adjust income taxes on pro forma results of operations at prevailing statutory rates. SIGNATURES Pursuant to the requirements of the Securities and Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized. Dated: April 20, 1999 By: /s/ Gino N. Pala ------------------ ---------------------- Gino N. Pala, Chairman of the Board, Co-Chief Executive Officer and Director -----END PRIVACY-ENHANCED MESSAGE-----