001-35067
|
27-3819646
|
|
(Commission
File Number)
|
(I.R.S. Employer
Identification No.)
|
|
350 East Las Olas Boulevard
Suite 1600
Fort Lauderdale, FL
|
33301
|
|
(Address of Principal Executive Offices)
|
(Zip Code)
|
SWISHER HYGIENE INC.
|
|||
|
By:
|
/s/ William M. Pierce | |
William M. Pierce
|
|||
President and Chief Executive Officer
|
|||
Unaudited Pro Forma Condensed Consolidated Balance Sheet as of June 30, 2015
|
PF-3
|
Unaudited Pro Forma Condensed Consolidated Statemenet of Operations For the Year Ended December 31, 2014
|
PF-5
|
Unaudited Pro Forma Condensed Consolidated Statemenet of Operations For the Three Months Ended June 30, 2014
|
PF-7
|
Unaudited Pro Forma Condensed Consolidated Statemenet of Operations For the Six Months Ended June 30, 2015
|
PF-9 |
Company
Historical
|
Ecolab
Pro Forma
Adjustments
|
Canada
Pro Forma
Adjustments
|
Condensed
Consolidated
Pro Forma
|
|||||||||||||
ASSETS
|
||||||||||||||||
Current assets
|
||||||||||||||||
Cash and cash equivalents
|
$
|
1,672
|
$
|
33,220
|
$
|
2,769
|
$
|
37,661
|
||||||||
Restricted cash
|
231
|
(231
|
)
|
-
|
-
|
|||||||||||
Accounts receivable, net
|
16,024
|
(15,126
|
)
|
(867
|
)
|
31
|
||||||||||
Inventory, net
|
13,592
|
(13,161
|
)
|
(431
|
)
|
-
|
||||||||||
Deferred income taxes
|
497
|
-
|
-
|
497
|
||||||||||||
Other assets
|
3,367
|
(760
|
)
|
(31
|
)
|
2,576
|
||||||||||
Total current assets
|
35,383
|
3,942
|
1,440
|
40,765
|
||||||||||||
Property and equipment, net
|
32,162
|
(31,388
|
)
|
(774
|
)
|
-
|
||||||||||
Other assets
|
||||||||||||||||
Other intangible assets, net
|
25,056
|
(24,827
|
)
|
(229
|
)
|
-
|
||||||||||
Other noncurrent assets
|
1,725
|
(1,525
|
)
|
(18
|
)
|
182
|
||||||||||
Total other assets
|
26,781
|
(26,352
|
)
|
(247
|
)
|
182
|
||||||||||
$
|
94,326
|
$
|
(53,798
|
)
|
$
|
419
|
$
|
40,947
|
||||||||
LIABILITIES AND EQUITY
|
||||||||||||||||
Current liabilities
|
||||||||||||||||
Accounts payable and accrued expenses
|
$
|
21,310
|
$
|
(19,298
|
)
|
$
|
(561
|
)
|
$
|
1,451
|
||||||
Long-term debt and obligations due within one year
|
1,935
|
(1,727
|
)
|
-
|
208
|
|||||||||||
Line of credit
|
611
|
(611
|
)
|
-
|
-
|
|||||||||||
Total current liabilities
|
23,856
|
(21,636
|
)
|
(561
|
)
|
1,659
|
||||||||||
Long term debt and obligations
|
931
|
(931
|
)
|
-
|
-
|
|||||||||||
Deferred income tax liabilities
|
558
|
-
|
-
|
558
|
||||||||||||
Other long-term liabilities
|
4,028
|
(732
|
)
|
-
|
3,296
|
|||||||||||
Total noncurrent liabilities
|
5,517
|
(1,663
|
)
|
-
|
3,854
|
|||||||||||
Commitments and contingencies
|
-
|
-
|
-
|
-
|
||||||||||||
Equity
|
64,953
|
(30,499
|
)
|
980
|
35,434
|
|||||||||||
$
|
94,326
|
$
|
(53,798
|
)
|
$
|
419
|
$
|
40,947
|
(1)
|
The balance sheet of the Company as of June 30, 2015 reflected the assets and liabilities of Swisher Hygiene Inc. and its subsidiaries. Upon completion of the Sale Transaction, the Canadian Sale, and previous sales of non-core business, substantially all of these assets and liabilities would be eliminated, except for those retained assets and liabilities described under the Purchase Agreement. Included in the Ecolab Pro Forma Adjustments column are the sold assets and liabilities, the liabilities to be paid at closing plus the cash proceeds from the sale as described in Note 4 below.
|
(2)
|
Retained assets consist of cash and certain accounts receivable and prepaid insurance.
|
(3)
|
Retained liabilities consist of professional fees related to the Sale Transaction, amounts due to board members, certain accrued payroll, accrued contingent litigation fees, accrued interest and defined benefit pension plan. Additionally, the Company may incur fees related to ongoing litigation, although we cannot estimate any potential liability at this time as disclosed in the Company’s Form 10-K. Ongoing litigation includes:
|
a.
|
Miller, et al.v. Swisher Hygiene Inc., et al.
|
b.
|
Arsenault v. Berrard, et al., lilz-cv-4028
|
c.
|
Investigation by the SEC and U.S. Attorney's Office.
|
(4)
|
Reconciliation of net cash received from the Sale Transaction with Ecolab is as follows (in thousands):
|
Gross cash proceeds
|
$
|
40,000
|
||
Less: Assumed indebtedness
|
(1,112
|
)
|
||
Less: Working capital adjustment
|
(492
|
)
|
||
Less: Holdback
|
(2,000
|
)
|
||
Less: Payoff of Debt
|
(2,157
|
)
|
||
Less: Payoff of certain transaction fees
|
(1,250
|
)
|
||
Net cash received
|
$
|
32,989
|
(5)
|
Reconciliation of net cash received from the Canadian Sale is as follows (in thousands):
|
Gross cash proceeds
|
$
|
2,600
|
||
Plus: Accounts Payable
|
169
|
|||
Net cash received
|
$
|
2,769
|
(6)
|
We have assumed that no taxes will be incurred as a result of these sales. However, there are no assurances that the Company will not incur taxes as a result of these sales.
|
Ecolab
|
Non-core and Canada
|
Condensed
|
||||||||||||||
Company
|
Pro Forma
|
Pro Forma
|
Consolidated
|
|||||||||||||
Historical
|
Adjustments
|
Adjustments
|
Pro Forma
|
|||||||||||||
Revenue
|
$
|
193,757
|
$
|
(177,475
|
)
|
$
|
(16,282
|
)
|
$
|
—
|
||||||
Costs and Expenses
|
||||||||||||||||
Cost of sales (exclusive of route expenses and related depreciation and amortization)
|
89,101
|
(86,443
|
)
|
(2,658
|
)
|
—
|
||||||||||
Route expenses
|
50,595
|
(46,949
|
)
|
(3,646
|
)
|
—
|
||||||||||
Selling, general and administrative
|
69,269
|
(55,208
|
)
|
(10,080
|
)
|
3,981
|
||||||||||
Depreciation and amortization
|
21,216
|
(19,524
|
)
|
(1,692
|
)
|
—
|
||||||||||
Impairment loss on assets held for sale
|
2,989
|
—
|
(2,989
|
)
|
—
|
|||||||||||
Impairment loss on goodwill and intangible assets
|
5,821
|
(2,530
|
)
|
(3,291
|
)
|
—
|
||||||||||
Total costs and expenses
|
238,991
|
(210,654
|
)
|
(24,356
|
)
|
3,981
|
||||||||||
(Loss) Income from Continuing Operations
|
(45,234
|
)
|
33,179
|
8,074
|
(3,981
|
)
|
||||||||||
Other Income (Expense), net
|
(1,663
|
)
|
1,620
|
33
|
(10
|
)
|
||||||||||
Net (Loss) Income From Continuing Operations Before Income Tax
|
(46,897
|
)
|
34,799
|
8,107
|
(3,991
|
)
|
||||||||||
Income Tax Expense (Benefit)
|
89
|
44
|
(133
|
)
|
—
|
|||||||||||
Net Loss (Income)
|
(46,808
|
)
|
34,843
|
7,974
|
(3,991
|
)
|
||||||||||
Comprehensive (Loss) Income
|
||||||||||||||||
Employee benefit plan adjustment, net of tax
|
(747
|
)
|
—
|
—
|
(747
|
)
|
||||||||||
Foreign currency translation adjustment
|
(31
|
)
|
—
|
31
|
—
|
|||||||||||
Comprehensive (Loss) Income
|
(47,586
|
)
|
34,843
|
8,005
|
$
|
(4,738
|
)
|
Loss per Share (1)
|
|||||||||
Basic and diluted (continuing operations)
|
$
|
(2.64
|
)
|
$
|
(0.23
|
)
|
|||
Weighted-Average Common Shares Used in the Computation of Loss per Share
|
|||||||||
Basic and diluted
|
17,723,866
|
17,723,866
|
|||||||
(1)
|
All outstanding share amounts and computations using such amounts have been retroactively adjusted to reflect the June 3, 2014 one-for-ten reverse stock split.
|
(1)
|
The statement of operations for the year ended December 31, 2014 reflected the revenue, costs and other income (expenses) of the Company. Upon completion of the Sale Transaction with Ecolab, the Canadian Sale, and previous sales of non-core businesses, substantially all of the revenue, costs and other income (expenses) would be eliminated, except for those costs and other income (expense) related to retained assets and liabilities described under the Agreement.
|
(2)
|
The Pro Forma Condensed Consolidated Statement of Operations was prepared based on the following assumptions:
|
●
|
All revenue, cost of sales, and route expenses will be eliminated with these transactions.
|
●
|
All selling, general and administrative expenses will be eliminated with the exception of the following:
|
o
|
Professional fees related to retained litigation, audit and review of financial statements, audit committee investigations, financial statement printing, tax preparation, and other costs associated with corporate governance and investor relations.
|
o
|
Compensation expense to Chief Financial Officer and Chief Executive Officer
|
o
|
Insurance expense related to the Company’s directors and officers insurance policy
|
●
|
All other income (expense) items will be eliminated with the exception of the following:
|
o
|
Interest expense attributable to the financing of the Company’s directors and officers insurance policy.
|
●
|
We have assumed that no taxes will be incurred as result of these sales. However, there are no assurances that the Company will not incur taxes as a result of these sales.
|
Ecolab
|
Non-core and Canada
|
Condensed
|
||||||||||||||
Company
|
Pro Forma
|
Pro Forma
|
Consolidated
|
|||||||||||||
Historical
|
Adjustments
|
Adjustments
|
Pro Forma
|
|||||||||||||
Revenue
|
$
|
44,834
|
$
|
(42,146
|
)
|
$
|
(2,688
|
)
|
$
|
—
|
||||||
Costs and Expenses
|
||||||||||||||||
Cost of sales (exclusive of route expenses and related depreciation and amortization)
|
20,706
|
(19,969
|
)
|
(737
|
)
|
—
|
||||||||||
Route expenses
|
11,630
|
(10,759
|
)
|
(871
|
)
|
—
|
||||||||||
Selling, general and administrative
|
15,858
|
(12,097
|
)
|
(1,688
|
)
|
2,073
|
||||||||||
Depreciation and amortization
|
4,530
|
(4,251
|
)
|
(279
|
)
|
—
|
||||||||||
Impairment loss on goodwill and intangible assets
|
166
|
(166
|
)
|
—
|
—
|
|||||||||||
Total costs and expenses
|
52,890
|
(47,242
|
)
|
(3,575
|
)
|
2,073
|
||||||||||
(Loss) Income from Continuing Operations
|
(8,056
|
)
|
5,096
|
887
|
(2,073
|
)
|
||||||||||
Other Income (Expense), net
|
357
|
534
|
(894
|
)
|
(3
|
)
|
||||||||||
Net (Loss) Income From Continuing Operations Before Income Tax
|
(7,699
|
)
|
5,630
|
(7
|
)
|
(2,076
|
)
|
|||||||||
Income Tax Expense (Benefit)
|
5
|
26
|
(31
|
)
|
—
|
|||||||||||
Net (Loss) Income
|
(7,694
|
)
|
5,656
|
(38
|
)
|
(2,076
|
)
|
|||||||||
Comprehensive (Loss) Income
|
||||||||||||||||
Foreign currency translation adjustment
|
8
|
—
|
(8
|
)
|
—
|
|||||||||||
Comprehensive (Loss) Income
|
$
|
(7,686
|
)
|
$
|
5,656
|
$
|
(46
|
)
|
$
|
(2,076
|
)
|
Loss per Share (1)
|
|||||||||
Basic and diluted (continuing operations)
|
$
|
(0.43
|
)
|
$
|
(0.12
|
)
|
|||
Weighted-Average Common Shares Used in the Computation of Loss per Share
|
|||||||||
Basic and diluted
|
17,753,691
|
17,753,691
|
(1)
|
All outstanding share amounts and computations using such amounts have been retroactively adjusted to reflect the June 3, 2014 one-for-ten reverse stock split.
|
(1)
|
The statement of operations for the three months ended June 30, 2015 reflected the revenue, costs and other income (expenses) of the Company. Upon completion of the Sale Transaction with Ecolab, the Canadian Sale, and previous sales of non-core businesses, substantially all of the revenue, costs and other income (expenses) would be eliminated, except for those costs and other income (expense) related to retained assets and liabilities described under the Agreement.
|
(2)
|
The Pro Forma Condensed Consolidated Statement of Operations was prepared based on the following assumptions:
|
●
|
All revenue, cost of sales, and route expenses will be eliminated with these transactions.
|
●
|
All selling, general and administrative expenses will be eliminated with the exception of the following:
|
o
|
Professional fees related to retained litigation, audit and review of financial statements, audit committee investigations, financial statement printing, tax preparation, and other costs associated with corporate governance and investor relations.
|
o
|
Compensation expense to Chief Financial Officer and Chief Executive Officer
|
o
|
Insurance expense related to the Company’s directors and officers insurance policy
|
●
|
All other income (expense) items will be eliminated with the exception of the following:
|
o
|
Interest expense attributable to the financing of the Company’s directors and officers insurance policy.
|
●
|
We have assumed that no taxes will be incurred as result of these sales. However, there are no assurances that the Company will not incur taxes as a result of these sales.
|
Ecolab
|
Non-core and Canada
|
Condensed
|
||||||||||||||
Company
|
Pro Forma
|
Pro Forma
|
Consolidated
|
|||||||||||||
Historical
|
Adjustments
|
Adjustments
|
Pro Forma
|
|||||||||||||
Revenue
|
$
|
88,676
|
$
|
(82,756
|
)
|
$
|
(5,920
|
)
|
$
|
—
|
||||||
Costs and Expenses
|
||||||||||||||||
Cost of sales (exclusive of route expenses and related depreciation and amortization)
|
40,668
|
(39,299
|
)
|
(1,369
|
)
|
—
|
||||||||||
Route expenses
|
23,321
|
(21,636
|
)
|
(1,685
|
)
|
—
|
||||||||||
Selling, general and administrative
|
32,370
|
(24,726
|
)
|
(3,421
|
)
|
4,223
|
||||||||||
Depreciation and amortization
|
9,120
|
(8,565
|
)
|
(555
|
)
|
—
|
||||||||||
Impairment loss on goodwill and intangible assets
|
166
|
(166
|
)
|
—
|
—
|
|||||||||||
Total costs and expenses
|
105,645
|
(94,392
|
)
|
(7,030
|
)
|
4,223
|
||||||||||
(Loss) Income from Continuing Operations
|
(16,969
|
)
|
11,636
|
1,110
|
(4,223
|
)
|
||||||||||
Other Income (Expense), net
|
471
|
689
|
(1,168
|
)
|
(8
|
)
|
||||||||||
Net (Loss) Income From Continuing Operations Before Income Tax
|
(16,498
|
)
|
12,325
|
(58
|
)
|
(4,231
|
)
|
|||||||||
Income Tax Expense (Benefit)
|
(23
|
)
|
54
|
(31
|
)
|
—
|
||||||||||
Net (Loss) Income
|
(16,521
|
)
|
12,379
|
(89
|
)
|
(4,231
|
)
|
|||||||||
Comprehensive (Loss) Income
|
||||||||||||||||
Foreign currency translation adjustment
|
(19
|
)
|
—
|
19
|
—
|
|||||||||||
Comprehensive (Loss) Income
|
$
|
(16,540
|
)
|
$
|
12,379
|
$
|
(70
|
)
|
$
|
(4,231
|
)
|
Loss per Share (1)
|
|||||||||
Basic and diluted (continuing operations)
|
$
|
(0.93
|
)
|
$
|
(0.24
|
)
|
|||
Weighted-Average Common Shares Used in the Computation of Loss per Share
|
|||||||||
Basic and diluted
|
17,751,962
|
17,571,962
|
(1)
|
All outstanding share amounts and computations using such amounts have been retroactively adjusted to reflect the June 3, 2014 one-for-ten reverse stock split.
|
(1)
|
The statement of operations for the six months ended June 30, 2015 reflected the revenue, costs and other income (expenses) of the Company. Upon completion of the Sale Transaction with Ecolab, the Canadian Sale, and previous sales of non-core businesses, substantially all of the revenue, costs and other income (expenses) would be eliminated, except for those costs and other income (expense) related to retained assets and liabilities described under the Agreement.
|
(2)
|
The Pro Forma Condensed Consolidated Statement of Operations was prepared based on the following assumptions:
|
●
|
All revenue, cost of sales, and route expenses will be eliminated with these transactions.
|
●
|
All selling, general and administrative expenses will be eliminated with the exception of the following:
|
o
|
Professional fees related to retained litigation, audit and review of financial statements, audit committee investigations, financial statement printing, tax preparation, and other costs associated with corporate governance and investor relations.
|
o
|
Compensation expense to Chief Financial Officer and Chief Executive Officer
|
o
|
Insurance expense related to the Company’s directors and officers insurance policy
|
●
|
All other income (expense) items will be eliminated with the exception of the following:
|
o
|
Interest expense attributable to the financing of the Company’s directors and officers insurance policy.
|
●
|
We have assumed that no taxes will be incurred as result of these sales. However, there are no assurances that the Company will not incur taxes as a result of these sales.
|