UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of
The Securities Exchange Act of 1934
Date of Report (Date of earliest event reported): June 26, 2015
COLT DEFENSE LLC
COLT FINANCE CORP.
(Exact name of registrant as specified in its charter)
Delaware
(State or other jurisdiction of incorporation)
|
|
|
32-0031950 |
|
333-171547 |
|
27-1237687 |
|
(Registration Number) |
|
(IRS Employer Identification Number) |
|
547 New Park Avenue, West Hartford, CT |
|
06110 |
|
(Address of principal executive offices) |
|
(Zip Code) |
Registrant’s telephone number, including area code: (860) 232-4489
Not applicable
(Former name or former address, if changed since last report)
Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:
¨ Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)
¨ Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)
¨ Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))
¨ Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))
Item 2.02 Results of Operations and Financial Condition.
On June 14, 2015, Colt Defense LLC (“Colt Defense”) and Colt Holding Company LLC and certain of their subsidiaries and affiliates (collectively, the “Debtors”) filed voluntary petitions for relief 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 filing for relief under the Bankruptcy Code, Colt Defense and Colt Finance Corp. (together with Colt Defense, “Colt”) entered into confidential discussions with certain holders (the “Holders”) of Colt’s 8.75% Senior Notes due 2017 (the “Notes”) regarding a potential transaction relating to the Notes. In connection with those discussions, Colt provided certain confidential information regarding the Company pursuant to confidentiality agreements with the Holders. In accordance with terms of those confidentiality agreements, Colt is making the disclosures included in Exhibit 99.1 to this Form 8-K.
The information in this Item 2.02 on Form 8-K is being furnished and shall not be deemed “filed” for purposes of Section 18 of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), nor shall it be deemed incorporated by reference in filings under the Securities Act of 1933, as amended, or the Exchange Act, except as shall be expressly set forth by specific reference in such filing. By filing this Form 8-K and furnishing this information, the Company makes no statement or admission as to the materiality of any information in Item 2.02 or Exhibit 99.1 hereto.
Item 9.01. Exhibits.
|
Exhibit No. |
|
DESCRIPTION |
|
99.1 |
|
Selected Financial Information for the Quarters Ended April 5, 2015 and March 30, 2014, and as of April 5, 2015 and December 31, 2014 |
SIGNATURE
Pursuant to the requirements of the Exchange Act, the registrants have duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.
|
|
COLT DEFENSE LLC | |
|
|
COLT FINANCE CORP. | |
|
|
| |
|
|
By: |
/s/ Scott Flaherty |
|
|
Name: |
Scott Flaherty |
|
|
Title: |
Senior Vice President and Chief Financial Officer |
|
|
| |
|
Dated: June 26, 2015 |
| |
Exhibit 99.1
Selected Financial Information for the Quarters Ended April 5, 2015 and March 30, 2014, and as of April 5, 2015 and December 31, 2014
The financial information below for the quarter ended April 5, 2015, and as of April 5, 2015 and December 31, 2014 is preliminary and may change. Colt Defense LLC (“Colt Defense”) has not yet completed its financial closing procedures for the year ended December 31, 2014. After completing its financial closing procedures for the year ended December 31, 2014, Colt Defense will need to complete its financial closing procedures with respect to the quarter ended April 5, 2015. There can be no assurance that final results for the quarter ended April 5, 2015, and as of April 5, 2015 and December 31, 2014 will not differ from the preliminary financial information included in this Exhibit 99.1, including as a result of annual and quarter end closing procedures and/or audit or review adjustments. The preliminary financial information has been prepared on the basis of currently available information. It does not include all information that may be required under U.S. GAAP or SEC disclosure rules. The preliminary financial information for the quarter ended April 5, 2015,and as of April 5, 2015 and December 31, 2014 has not been subject to quarter-end or year-end closing procedures, and should not be viewed as a substitute for full interim or annual financial statements prepared in accordance with U.S. GAAP that have been audited or reviewed by Colt Defense’s independent registered public accounting firm. Colt Defense’s independent registered public accounting firm has not audited or reviewed, and does not express an opinion or any other form of assurance with respect to the preliminary financial information for the quarter ended April 5, 2015, as of April 5, 2015 or as of December 31, 2014. The preliminary financial information for the quarter ended April 5, 2015, and as of April 5, 2015 and December 31, 2014 could change materially and is not necessarily indicative of the results to be achieved for the year ended December 31, 2015, the quarter ended April 5, 2015 or any future period. As a result of the foregoing considerations and the other limitations described herein, investors are cautioned not to place undue reliance on the preliminary financial information included in this Exhibit 99.1.
Selected Financial Information of Colt Defense LLC and Subsidiaries (Unaudited, In Thousands):
|
|
|
For the Quarter Ended |
| ||||
|
|
|
March 30, 2014 |
|
April 5, 2015 |
| ||
|
|
|
|
|
(Preliminary) |
| ||
|
Statement of Operations Data: |
|
|
|
|
| ||
|
Net sales |
|
$ |
50,080 |
|
$ |
41,511 |
|
|
Cost of sales |
|
40,386 |
|
42,376 |
| ||
|
Gross profit |
|
9,694 |
|
(865 |
) | ||
|
|
|
|
|
|
| ||
|
Total operating expenses |
|
10,113 |
|
9,465 |
| ||
|
|
|
|
|
|
| ||
|
Net income (loss) |
|
$ |
(7,946 |
) |
$ |
(20,753 |
) |
|
|
|
|
|
|
| ||
|
Adjusted EBITDA |
|
$ |
3,076 |
|
$ |
(6,246 |
) |
|
|
|
As of December 31, 2014 |
|
As of April 5, 2015 |
| ||
|
Balance Sheet Data: |
|
(Preliminary) |
|
(Preliminary) |
| ||
|
Restricted cash, current and long-term |
|
$ |
1,344 |
|
$ |
5,418 |
|
|
Accounts receivable, net |
|
10,972 |
|
15,066 |
| ||
|
Inventory, net |
|
66,781 |
|
53,651 |
| ||
|
Other current assets |
|
3,492 |
|
4,694 |
| ||
|
Accounts payable |
|
15,707 |
|
11,716 |
| ||
|
Accrued interest |
|
3,376 |
|
8,575 |
| ||
|
Accrued expenses |
|
15,930 |
|
15,296 |
| ||
|
Customer advances and deferred revenue |
|
14,754 |
|
13,413 |
| ||
Reconciliation of Net Income (Loss) to Adjusted EBITDA (Preliminary, Unaudited, In Thousands):
Adjusted EBITDA is a non-GAAP financial measure. The term, as the Company defines it, may not be comparable to a similarly titled measure employed by other companies and is not a measure of performance calculated in accordance with GAAP. The measure should be considered in addition to, but not as a substitute for or superior to, other measures of financial performance prepared in accordance with GAAP, such as operating income or loss and net income or loss. Management believes Adjusted EBITDA is useful to an investor in evaluating the Company’s financial performance because it gives investors another measure to evaluate and compare the results of the Company’s operations from period to period by removing the impact of the Company’s capital structure (such as net interest expense), asset base (such as depreciation and amortization) and non-recurring or non-operational items (such as severance costs) from the Company’s operating results. Adjusted EBITDA is used by management as an important measure of the operating performance of the Company and a key metric for making operating decisions because it assists management in comparing the Company’s financial performance on a consistent basis as it removes the impact of the Company’s capital structure, asset base and non-recurring and non-operational items from the Company’s operating results.
|
|
|
For the Quarter Ended |
| ||||
|
|
|
March 30, 2014 |
|
April 5, 2015 |
| ||
|
|
|
|
|
(Preliminary) |
| ||
|
Net income (loss) |
|
$ |
(7,946 |
) |
$ |
(20,753 |
) |
|
Income tax (benefit) expense |
|
(86 |
) |
100 |
| ||
|
Depreciation and amortization (i) |
|
2,289 |
|
2,324 |
| ||
|
Interest expense, net |
|
7,684 |
|
10,427 |
| ||
|
Business development costs (ii) |
|
500 |
|
— |
| ||
|
Severance costs (iii) |
|
145 |
|
286 |
| ||
|
Legal entity restructuring fees (iv) |
|
— |
|
748 |
| ||
|
Sciens fees and expenses (v) |
|
250 |
|
250 |
| ||
|
Contract obligation expense add back (vi) |
|
311 |
|
— |
| ||
|
Pre-petition reorganization fees (vii) |
|
— |
|
229 |
| ||
|
Professional service fees (viii) |
|
— |
|
247 |
| ||
|
Other income, net (ix) |
|
(71 |
) |
(104 |
) | ||
|
Adjusted EBITDA |
|
$ |
3,076 |
|
$ |
(6,246 |
) |
(i) Includes depreciation and amortization of intangible assets.
(ii) Includes transaction costs incurred in connection with contemplated merger and acquisition activities.
(iii) Includes non-recurring severance costs.
(iv) Includes non-recurring professional fees associated with restructuring of the Colt Defense LLC’s ownership.
(v) Includes fees and expenses pursuant to the Company’s agreements with Sciens Management and Sciens International.
(vi) Expenses related to the Company’s contract obligation pursuant to the Company’s machine gun program with the United States government.
(vii) Includes pre-petition reorganization professional fees.
(viii) Includes non-recurring professional fees associated with financing related activities.
(ix) Includes income and/or expenses such as foreign currency exchange gains or losses and other less significant charges not related to on-going operations.
Pension and Postretirement Health Plans
As of December 31, 2004 and December 31, 2013, Colt Defense LLC and its subsidiaries’ unfunded pension benefit obligations were approximately $12.3 million and $1.7 million, respectively.
As of December 31, 2014 and December 31, 2013, Colt Defense LLC and its subsidiaries’ unfunded postretirement health benefit obligations were approximately $26.4 million and $21.1 million, respectively.