-----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, UKMalEAeTQY5U+3tWEzarxRPkS9BTukhbWljelPFWYpd2OJYv6l8/U3tJD7PWAQO kHOHGX1IISJ9YpvGUM2Zbg== 0000912057-95-011190.txt : 19951218 0000912057-95-011190.hdr.sgml : 19951218 ACCESSION NUMBER: 0000912057-95-011190 CONFORMED SUBMISSION TYPE: 8-K/A PUBLIC DOCUMENT COUNT: 1 CONFORMED PERIOD OF REPORT: 19951003 ITEM INFORMATION: Financial statements and exhibits FILED AS OF DATE: 19951215 SROS: NYSE FILER: COMPANY DATA: COMPANY CONFORMED NAME: IMCO RECYCLING INC CENTRAL INDEX KEY: 0000202890 STANDARD INDUSTRIAL CLASSIFICATION: SECONDARY SMELTING & REFINING OF NONFERROUS METALS [3341] IRS NUMBER: 752008280 STATE OF INCORPORATION: DE FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 8-K/A SEC ACT: 1934 Act SEC FILE NUMBER: 001-07170 FILM NUMBER: 95602050 BUSINESS ADDRESS: STREET 1: 5215 N OCONNOR BLVD STE 940 CITY: IRVING STATE: TX ZIP: 75007 BUSINESS PHONE: 2148696575 MAIL ADDRESS: STREET 1: 5215 N O CONNOR BOULVARD STE 940 CITY: IRVING STATE: TX ZIP: 75030 FORMER COMPANY: FORMER CONFORMED NAME: FRONTIER TEXAS CORP DATE OF NAME CHANGE: 19881012 FORMER COMPANY: FORMER CONFORMED NAME: PIONEER TEXAS CORP DATE OF NAME CHANGE: 19850416 8-K/A 1 FORM 8-K/A SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM 8-K/A-1 CURRENT REPORT Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934 Date of Report (Date of earliest event reported): October 3, 1995 ------------------------------ IMCO Recycling Inc. - -------------------------------------------------------------------------------- (Exact name of registrant as specified in its charter) Delaware - -------------------------------------------------------------------------------- (State or other jurisdiction of incorporation) 1-7170 75-2008280 - ------------------------------------ ----------------------------------- (Commission File Number) (IRS Employer Identification No.) 5215 North O'Connor Blvd., Suite 940, Irving, Texas 75039 - -------------------------------------------------------------------------------- (Address of principal executive office) (Zip Code) Registrant's telephone number, including area code (214) 869-6575 ---------------------- Not Applicable - -------------------------------------------------------------------------------- (Former name or former address, if changed since last report) Item 7. FINANCIAL STATEMENTS AND EXHIBITS Item 7(a). Financial Statements of business acquired Independent Auditors' Report Balance Sheets at March 31, 1995 and September 30, 1995 (unaudited) Statements of Income and Retained Earnings for the year ended March 31, 1995 and the six months ending Sept. 30, 1995 (unaudited) Statement of Cash Flows for the year ended March 31, 1995 Notes to Financial Statements Item 7(b). Pro forma financial information - Condensed Consolidated pro forma Statement of Earnings for the year ended December 31, 1994 - Condensed Consolidated pro forma Statement of Earnings for the six months ended June 30, 1995 - Condensed Consolidated pro forma Balance Sheet at June 30, 1995 - Notes to pro forma Financial Statements Item 7(c) Exhibits: **10.1 Agreement and Plan of Merger, dated as of October 1, 1995, among IMCO Recycling Inc., IMCO Recycling of Illinois Inc., Alumar Associates, Inc. and the Shareholders. **10.2 Registration Rights Agreement, dated as of October 1, 1995, among IMCO Recycling Inc. and the Shareholders. *23.1 Consent of Altschuler, Melvoin and Glasser LLP - -------------------- * To be filed by amendment. ** Previously filed. 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. IMCO RECYCLING INC. By: /s/ Robert R. Holian ------------------------- Robert R. Holian Vice President and Controller Date: December 15, 1995 [ALTSCHULER, MELVOIN AND GLASSER LLP LETTERHEAD] INDEPENDENT AUDITORS' REPORT To the Board of Directors of Alumar Associates, Inc. We have audited the accompanying consolidated balance sheet of ALUMAR ASSOCIATES, INC. AND SUBSIDIARIES as of March 31, 1995, and the related consolidated statements of income and retained earnings, and of cash flows for the fiscal year then ended. These financial statements are the responsibility of the Corporation's management. Our responsibility is to express an opinion on these financial statements based on our audit. We did not audit the financial statements of Marport Smelting LLC, an unconsolidated affiliate accounted for by the equity method of accounting. The investment in Marport Smelting LLC was $354,357 as of March 31, 1995 and the equity in its net income was $189,784 for the fiscal year then ended. The financial statements of Marport Smelting LLC, for the year ended December 31, 1994, were audited by other auditors whose report thereon has been furnished to us and our opinion, insofar as it relates to the amounts included for Marport Smelting LLC, is based on the report of the other auditors. We conducted our audit in accordance with generally accepted auditing standards. Those standards require that we plan and perform our audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audit provides a reasonable basis for our opinion. In our opinion, based on our audit, the consolidated financial statements referred to above present fairly, in all material respects, the consolidated financial position of Alumar Associates, Inc. and Subsidiaries as of March 31, 1995, and the consolidated results of their operations and of their cash flows for the fiscal year then ended, in conformity with generally accepted accounting principles. /s/ ALTSCHULER, MELVOIN AND GLASSER LLP Chicago, Illinois May 31, 1995 Exhibit A
ALUMAR ASSOCIATES, INC. AND SUBSIDIARIES Consolidated Balance Sheet Assets (Note 8) September 30, 1995 March 31, 1995 (unaudited) -------------- ----------- Current Assets: Cash $ 440,455 $ 584,000 Accounts receivable, trade 9,640,220 11,568,000 Inventories (Note 3) 3,004,042 3,292,000 Income taxes refundable 235,954 -- Deferred income taxes (Note 10) 6,000 128,000 Prepaid expenses and other current assets 40,557 230,000 Due from affiliates (Note 4) 105,471 -- ----------- ----------- 13,472,699 15,802,000 ----------- ----------- Property, Plant and Equipment (at cost, less accumulated depreciation and amortization- Notes 1, 5 and 8) 2,298,691 2,949,000 ----------- ----------- Other Assets: Investment in affiliate (Notes 1 and 6) 354,357 939,000 Excess of cost over equity in subsidiary's paid-in capital (net of amortization--Note 1) 21,386 -- Deferred income taxes (Note 10) 63,000 -- Other 126,085 5,000 ----------- ----------- 564,828 944,000 ----------- ----------- $16,336,218 $19,695,000 ----------- ----------- ----------- ----------- Liabilities and Stockholders' Equity Current Liabilities: Accounts payable $ 3,266,964 $ 4,549,000 Current portion of long-term liabilities (Note 8) 175,872 84,000 Accrued expenses and other current liabilities (Note 7) 1,020,235 1,483,000 Due to affiliates (Note 4) 21,174 -- Due to stockholders 110,635 -- ----------- ----------- 4,594,880 6,116,000 ----------- ----------- Long-term Liabilities (net of current portion--Note 8) 7,756,929 8,606,000 ----------- ----------- Deferred Income Taxes -- 299,000 Stockholders' Equity: Common stock ($1 par value; authorized 100,000 shares; issued and outstanding 1,000 shares) 1,000 20,000 Paid-in capital 31,295 171,000 Retained earnings 3,952,114 4,483,000 ----------- ----------- 3,984,409 4,674,000 ----------- ----------- $16,336,218 $19,695,000 ----------- ----------- ----------- -----------
The accompanying notes are an integral part of this statement. Exhibit B
ALUMAR ASSOCIATES, INC. AND SUBSIDIARIES Consolidated Statement of Income The Six Months Fiscal Year Ended Ended September 30, 1995 March 31, 1995 (Unaudited) -------------- ------------------ Net Sales (Note 4) $67,172,325 $39,323,000 Cost of Goods Sold (Notes 2 and 4) 60,199,671 31,201,000 ----------- ----------- Gross Profit 6,972,654 8,122,000 Operating Expenses (Note 4) 5,805,313 7,220,000 ----------- ----------- Income from Operations 1,167,341 902,000 Other Expense (net) (Note 9) (130,678) (429,000) Equity in Income of Investee Company (Note 6) 189,784 694,000 ----------- ----------- Income before Income Taxes 1,226,447 1,167,000 ----------- ----------- Income Tax Provision (Note 10): Current 327,000 -- Deferred (48,000) -- ----------- ----------- 279,000 -- ----------- ----------- Net Income (to Exhibit C) $ 947,447 $1, 167,000 ----------- ----------- ----------- -----------
The accompanying notes are an integral part of this statement. Exhibit C
ALUMAR ASSOCIATES, INC. AND SUBSIDIARIES Consolidated Statement of Cash Flows Fiscal Year Ended March 31, 1995 Cash Flows from Operating Activities: Net income for fiscal year $ 947,447 Adjustments to reconcile net income to net cash used in operating activities: Depreciation and amortization 686,876 Deferred income taxes ( 48,000) Equity interest in earnings of affiliate ( 189,784) Changes in assets--decrease (increase) : Accounts receivable, trade ( 3,791,938) Inventories ( 1,351,416) Income taxes refundable ( 190,299) Prepaid expenses and other current assets 99,782 Due from/to affiliates ( 45,836) Due to stockholders 42,221 Other assets ( 23,234) Changes in liabilities--increase (decrease) : Accounts payable 547,215 Accrued expenses and other current liabilities 326,678 ----------- Net cash used in operating activities ( 2,990,288) ----------- Cash Flows from Investing Activities: Acquisitions of property, plant and equipment ( 456,121) Distributions received from affiliate 295,245 ----------- Net cash used in investing activities ( 160,876) ----------- Cash Flows from Financing Activities: Principal payments on long-term debt ( 92,439) Net proceeds under long-term credit agreement 3,452,336 Principal payments on capitalized lease obligations (175,486) ----------- Net cash provided by financing activities 3,184,411 ----------- Net Increase in Cash 33,247 Cash, Beginning of Fiscal Year 407,208 ----------- Cash, End of Fiscal Year $ 440,455 ----------- ----------- Supplemental Disclosures of Cash Flow Information: Cash paid during the fiscal year for: Interest $ 544,448 ----------- ----------- Income taxes $ 529,775 ---------- ---------- Supplemental Schedule of Noncash Investing and Financing Activities: During fiscal 1995, capital lease obligations of $25,484 were incurred when the Corporation entered into leases for new equipment.
The accompanying notes are an integral part of this statement. ALUMAR ASSOCIATES, INC. AND SUBSIDIARIES Notes to the Consolidated Financial Statements March 31, 1995 NOTE 1--SIGNIFICANT ACCOUNTING POLICIES: A summary of significant accounting policies followed by the Corporation is as follows: CONSOLIDATION--The consolidated financial statements include the accounts of Alumar Associates, Inc. and its subsidiaries (the "Corporation"--Note 2). All significant intercompany accounts and transactions have been eliminated in consolidation. The Corporation's 50% investment in Marport Smelting LLC (Note 6) is carried at cost plus the Corporation's cumulative share of earnings (based on the calendar year whose year-end falls within the Corporation's accounting period) less cumulative distributions received. DEPRECIATION AND AMORTIZATION--Provisions for depreciation and amortization of property, plant and equipment are computed, for financial reporting purposes, over the estimated useful lives of the respective assets, under the straight-line method. For income tax reporting purposes, provisions for depreciation and amortization are computed using accelerated methods and statutory lives, as prescribed by the Internal Revenue Code, with deferred taxes provided for the resultant temporary differences. PROPERTY RETIREMENTS--When assets become fully depreciated, are retired, or are otherwise disposed of, the cost of the assets and the related accumulated depreciation are removed from the accounts, and any gain or loss on disposition is reflected as other income or expense. MAINTENANCE AND REPAIRS--Costs of maintenance and repairs are charged to expense. Costs of renewals and betterments, where significant in amount, are capitalized. EXCESS OF COST OVER EQUITY IN SUBSIDIARY'S PAID-IN CAPITAL--The net excess of the Corporation's investment in a subsidiary over the underlying equity is being amortized over 20 years, under the straight-line method. INVENTORIES--Inventories are stated at the lower of cost or market with cost determined under the last-in, first-out (LIFO) method. Management believes the LIFO method results in a better matching of current costs with current revenue. Such LIFO valuation is computed under the "double extension" method, with all inventories constituting a single pool. ALUMAR ASSOCIATES, INC. AND SUBSIDIARIES Notes to the Consolidated Financial Statements March 31, 1995 NOTE 2--NATURE OF ACTIVITIES: Alumar Associates, Inc. and its wholly owned subsidiaries are engaged in the business of processing aluminum dross and slag for customers located primarily in the Midwest who are manufacturers of aluminum products. Approximately 21% of fiscal 1995 consolidated purchases were made from two major suppliers. No other single supplier accounted for more than 10% of consolidated purchases. NOTE 3--INVENTORIES: Inventories, consisting of aluminum dross and recycled secondary ingot, amounted to $3,004,042 (net of a LIFO reserve of $1,829,667) at March 31, 1995. If March 31, 1995 inventories had been determined under the first-in, first-out (FIFO) method of valuation, pretax income would have been $1,513,973 higher for the fiscal year than the amounts reported herein. NOTE 4--BALANCES WITH AFFILIATES AND RELATED-PARTY TRANSACTIONS:
Balances with affiliates, at March 31, 1995, consisted of the following: Due from affiliates: Marport Smelting LLC ("MSLLC"--see Note 6) $97,689 Other affiliate (see below) 7,782 ---------- $ 105,471 ---------- ---------- Due to affiliates: Marport Smelting LLC $ 21,174 ---------- ----------
Transactions with affiliates and related parties, during the fiscal year, consisted of the following: Marport Smelting LLC (see below): Sales $940,562 Purchases and processing fees 2,101,898 Lab fees 16,598 Other affiliate (see below): Sales 315,409 Purchases 346,388
The Corporation is affiliated to another company by virtue of the stockholders of Alumar Associates, Inc. owning 14.25% of that company's common stock. ALUMAR ASSOCIATES, INC. AND SUBSIDIARIES Notes to the Consolidated Financial Statements March 31, 1995 NOTE 4--BALANCES WITH AFFILIATES AND RELATED-PARTY TRANSACTIONS, CONTINUED: The Corporation holds a 50% interest in MSLLC which processes aluminum dross and slag for the Corporation and other customers (see Note 6). Operations between the Corporation and MSLLC are governed by an operation agreement which continues until termination by either party upon not less than six months prior notice. Under the agreement, (a) the Corporation sells MSLLC feed stock at the Corporation's cost plus related freight costs; (b) the Corporation purchases all processed metal from MSLLC at the same price at which the Corporation invoices its customers (MSLLC may also sell processed metal to other parties with the Corporation's consent) ; and (c) the Corporation pays MSLLC on a per pound basis in those instances in which the Corporation is so paid by its customers. NOTE 5--PROPERTY, PLANT AND EQUIPMENT: Property, plant and equipment and accumulated depreciation and amortization, at the balance sheet date, consisted of the following:
Land $ 212,153 Buildings 894,241 Leasehold improvements 1,361,215 Machinery and equipment 1,395,426 Office furniture and equipment 150,827 Capitalized lease equipment 747,537 ---------- 4,761,399 Less accumulated depreciation and amortization (including accumulated depreciation of capitalized lease equipment of $530,139) 2,462,708 ---------- Net book value $2,298,691 ---------- ----------
Depreciation of property, plant and equipment amounted to $684,652 for fiscal 1995. ALUMAR ASSOCIATES, INC. AND SUBSIDIARIES Notes to the Consolidated Financial Statements March 31, 1995 NOTE 6--INVESTMENT IN AFFILIATES:
The carrying value of the Corporation's investment in MSC consists of the following: Carrying value of investment in MSLLC at March 31, 1994 $459,818 Distributions received during fiscal 1995 ( 295,245) Equity in 1994 income of MSLLC 189,784 ---------- Carrying value of investment in MSLLC at March 31, 1995 $ 354,357 ---------- ---------- Summarized financial data for MSLLC, for the year ended December 31, 1994, is as follows: Assets $2,827,027 Liabilities 2,058,327 ---------- Partners' Equity $ 768,700 ---------- ---------- Revenue $8,397,954 Expenses 8,018,387 ---------- Net income $ 379,567 ---------- ---------- NOTE 7--ACCRUED EXPENSES AND OTHER CURRENT LIABILITIES: Accrued expenses and other current liabilities, at the balance sheet date, consisted of the following: Wages, bonuses and payroll taxes $767,957 Other 252,278 ---------- $1,020,235 ---------- ----------
ALUMAR ASSOCIATES, INC. AND SUBSIDIARIES Notes to the Consolidated Financial Statements March 31, 1995
NOTE 8--LONG-TERM LIABILITIES: Long-term liabilities, at March 31, 1995, consisted of the following: Loan payable to Fremont Financial Corporation ("FFC") pursuant to loan and security agreement dated October 4, 1993, expiring September 30, 1998 (see below) $7,705,640 Demand note payable to the First National Bank of the Mid-South ("Mid-South") (for purchase of property) (in absence of demand payable in monthly installments of $2,284, inclusive of interest at Mid-South's "reference rate" plus 2 1/2% per annum; final payment due June 3, 1998 - - see below) 77,155 Capital improvements note payable to Mid-South (payable in monthly installments of $6,225, inclusive of interest at Mid-South's "reference rate" plus 2 1/2% per annum; final payment due August 16, 1996--see below) 23,924 Capitalized equipment leases (see Note 12) 126,082 ---------- Total long-term liabilities 7,932,801 Less current portion 175,872 ---------- Long-term portion $7,756,929 ---------- ----------
On March 31, 1995, the Corporation amended the existing loan and security agreement with FFC to increase maximum borrowings to $10,000,000 (from the previous $7,000,000), based on up to 80% of eligible accounts receivable (as defined) and the sum of 50% of raw materials and finished goods inventories (subject to certain limitations) ALUMAR ASSOCIATES, INC. AND SUBSIDIARIES Notes to the Consolidated Financial Statements March 31, 1995 NOTE 8--LONG-TERM LIABILITIES, CONTINUED: Borrowings from FFC bear interest at the prime rate plus 1 1/2% per annum. Most of the assets of the Corporation (except real property) are pledged to secure borrowings under the agreement. The agreement contains certain restrictive administrative and financial covenants, including limitation of annual capital expenditures and maintenance of specified levels of net worth. Capital improvements note borrowings are secured by a subsidiary's equipment and a parcel of land, while the demand note borrowings are secured by the land and buildings the subsidiary acquired with the proceeds. In addition, repayment of both notes is guaranteed by the Corporation pursuant to the terms of an inter-creditor agreement, dated July 27, 1992, between the Corporation, Mid-South and FFC. Maturities of the foregoing obligations, at March 31, 1995 (exclusive of the capitalized equipment leases--see Note 12), are as follows: Fiscal Year Ended March 31, ---------------- 1996 $ 101,079 1997 0 1998 0 1999 7,705,640 ---------- $7,806,719 ---------- ---------- Subsequent to the fiscal year-end, the Corporation entered into a promissory note agreement with Heritage Olympia Bank to provide borrowings to fund certain capital improvements. The agreement provides for aggregate borrowings of $300,000 to bear interest at the prime rate plus 1 1/2% per annum and to be secured by certain real property and matures August 1, 2000. ALUMAR ASSOCIATES, INC. AND SUBSIDIARIES Notes to the Consolidated Financial Statements March 31, 1995 NOTE 9--OTHER EXPENSES (NET): Other expense, for fiscal 1995, consisted of the following: Interest expense ($ 583,669) Gain from metal hedging 380,164 Interest income 12,768 Laboratory fees (see Note 4) 16,598 Sundry (net) 43,461 ----------- ($ 130,678) ----------- -----------
NOTE 10--INCOME TAXES: Alumar Associates, Inc. and all of its subsidiaries file a consolidated federal income tax return. Following is a tabulation of the principal items accounting for the difference between the tax provision if computed at statutory rates and the tax provision as provided herein: Federal income tax provision, based on 34% of income before income taxes $ 417,000 State income taxes (net of federal tax benefit) 59,000 Change in valuation allowance--see below ( 148,000) Utilization of AMT carryforward ( 11,000) Other items ( 38,000) ---------- Income tax provision $ 279,000 ---------- ----------
During the current fiscal year, the Corporation utilized a capital loss carryforward of approximately $380,000 to offset a capital gain from metal hedging transactions (see Note 9). Such capital loss carryforward had been fully provided for in the Corporation's valuation allowance at March 31, 1994. Deferred income taxes are provided for temporary differences, which are differences between the tax basis of an asset or liability and the amounts reported in the financial statements, that will result in taxable or deductible amounts in future years when the reported amount of the asset or liability is recovered or settled. Such differences are principally depreciation and certain accrued expenses. At March 31, 1995, the Corporation's net deferred tax assets consisted of: Gross deferred tax assets $ 114,000 Gross deferred tax liabilities ( 45,000) ---------- Net deferred tax assets $ 69,000 ---------- ----------
ALUMAR ASSOCIATES, INC. AND SUBSIDIARIES Notes to the Consolidated Financial Statements March 31, 1995 NOTE 11--EMPLOYEE BENEFIT PLAN: The Corporation maintains a defined contribution plan which is designed as a qualified cash deferred arrangement pursuant to Section 401(k) of the Internal Revenue Code. Eligible participants (all nonunion employees) may make contributions from their gross pay (limited to 15%) on a pre-tax basis with the Corporation matching such contributions at the rate of 50 cents for each $1.00 contributed by the employee, to the extent of the first 5% of compensation. Such matching employer contributions amounted to $35,161 for fiscal 1995. NOTE 12--LEASE COMMITMENTS: The Corporation is obligated under various equipment leases including short-term and month-to-month leases. Following is a summary of future minimum payments to be made as of March 31, 1995, under capital lease obligations and noncancellable operating leases: Fiscal Year Capital Operating Ended March 31, Leases Leases --------------- ---------- --------- 1996 $ 86,574 $ 151,746 1997 35,232 58,359 1998 21,972 17,120 1999 3,666 3,000 ---------- --------- Total minimum lease payments 147,444 $ 230,225 --------- --------- Less amount representing interest 21,362 ---------- Present value of net minimum lease payments (Note 8) $ 126,082 ---------- ----------
Total rent expense under operating leases was $286,111 in the current fiscal year. Item 7(b). Pro forma financial information On October 3rd, 1995, the Company purchased all of the outstanding stock of Alumar Associates Inc. which owned Metal Mark Inc., the owner and operator of three aluminum recycling plants located in Chicago Heights, Il., Sikeston, Mo., and Pittsburg, Ks. Metal Mark also owns a 50% interest in another aluminum recycling plant located in East Chicago, In. The value of the transaction was approximately $8,500,000, with $4,000,000 paid in cash and the balance consisting of 208,213 shares of IMCO Recycling Inc. common stock. In addition, at closing, the Company also repaid certain of the long-term debt of Alumar in the amount of approximately $8,245,000. The unaudited condensed consolidated pro forma statements of earnings for the year ended December 31, 1994 and the six months ending June 30, 1995 have been derived from historical consolidated financial statements of both the Company and Alumar. The Company's year end is December 31, and Alumar's fiscal year end is March 31. Thus, for the pro forma financial statements, the Company's year ended December 31, 1994, is combined with Alumar's year ended March 31, 1995 to present a full year of operations. Likewise, the Company's operations for the six months ended June 30, 1995 is combined with Alumar's operations for the six months ended September 30, 1995 to present a six month interim period of operations. The condensed consolidated pro forma statements of earnings have been prepared assuming the acquisition occurred as of the beginning of each period. The unaudited pro forma condensed consolidated balance sheet as of June 30, 1995 has been prepared as if the acquisition of Alumar had occurred on that date and reflects the adjustments as shown in the footnotes following the pro forma statements. In the opinion of the Company this information reflects all adjustments necessary to present fairly such pro forma data; however such statements should not be considered indicative of the actual results that would have been achieved had the acquisition been completed on the dates or periods indicated, and they do not purport to indicate the results of earnings as of any future date or for any future periods. The acquisition has been accounted for by the purchase method. Accordingly, the assets and liabilities of Alumar have been adjusted to their estimated fair values, as determined by the management of the Company, to reflect the allocation of the costs of the acquisition by the Company.
IMCO RECYCLING INC CONDENSED CONSOLIDATED PRO FORMA STATEMENTS OF EARNINGS (IN THOUSANDS EXCEPT PER SHARE INFORMATION) IMCO ALUMAR FOR THE YEAR ENDED FOR THE YEAR ENDED PRO FORMA PRO FORMA DEC. 31, 1994 MARCH 31, 1995 ADJUSTMENTS TOTALS ------------------------------------------------------------------------------------------- REVENUES $101,116 $67,172 $168,288 Cost of Sales 78,478 62,078 $ 105 (b) 140,661 ------------------------------------------------------------------------------------------- GROSS PROFIT 22,638 5,094 (105) 27,627 Selling, general and 94 (d) administrative 6,440 3,927 (1,305) (a) 9,156 Other (Income) expenses 1,635 (440) 1,195 Equity income (190) (190) 973 c Interest Exp 1,014 584 (584) (c) 1,987 Interest Inc (154) (13) (167) ------------------------------------------------------------------------------------------- INCOME BEFORE TAX 13,703 1,226 717 15,646 Provision (benefit) for tax 5,232 279 498 (e) 6,009 ------------------------------------------------------------------------------------------- NET EARNINGS $8,471 $947 $219 $9,637 ------------------------------------------------------------------------------------------- ------------------------------------------------------------------------------------------- Weighted average Common and Common equivalent shares outstanding 11,643,846 208,213 11,852,059 Net Earnings per share $0.73 $0.81 --------------- ------------- --------------- -------------
SEE ACCOMPANYING NOTES TO CONDENSED CONSOLIDATED PRO FORMA FINANCIAL STATEMENTS
IMCO RECYCLING INC CONDENSED CONSOLIDATED PRO FORMA STATEMENTS OF EARNINGS (UNAUDITED) (IN THOUSANDS EXCEPT PER SHARE INFORMATION) IMCO ALUMAR FOR THE SIX MONTHS FOR THE SIX MONTHS ENDED ENDED PRO FORMA PRO FORMA JUNE 30, 1995 SEPTEMBER 30, 1995 ADJUSTMENTS TOTALS ------------------------------------------------------------------------------------------- REVENUES $60,471 $39,323 $99,794 Cost of Sales 45,721 36,290 $ 53 (b) 82,064 ------------------------------------------------------------------------------------------- GROSS PROFIT 14,750 3,033 (53) 17,730 Selling, general and 47 (d) administrative 4,647 2,131 (515) (a) 6,310 Other (Income) expenses 23 23 Equity income (694) (694) 487 Interest Exp 513 406 (406) (c) 1,000 Interest Inc (167) 0 0 (167) ------------------------------------------------------------------------------------------- INCOME BEFORE TAX 9,757 1,167 334 11,258 Provision (benefit) for tax 3,904 0 600 (e) 4,504 ------------------------------------------------------------------------------------------- NET EARNINGS $5,853 $1,167 ($266) $6,754 ------------------------------------------------------------------------------------------- ------------------------------------------------------------------------------------------- Weighted average Common and Common equivalent shares outstanding 11,966,317 208,213 12,174,530 Net Earnings per share $0.49 $0.55 --------------- ------------------- --------------- -------------------
SEE ACCOMPANYING NOTES TO CONDENSED CONSOLIDATED PRO FORMA FINANCIAL STATEMENTS
IMCO RECYCLING INC CONDENSED CONSOLIDATED PRO FORMA BALANCE SHEET AT JUNE 30, 1995 (UNAUDITED) (IN THOUSANDS EXCEPT PER SHARE INFORMATION) PRO FORMA PRO FORMA IMCO ALUMAR ADJUSTMENTS TOTALS ------------------------------------------------------------------------------------------- ASSETS CURRENT ASSETS Accounts Receivable $17,319 $11,568 $14,300 i $28,887 (12,245) g Other Current Assets 14,874 4,234 917 f 22,080 ------------------------------------------------------------------ ------------------- TOTAL CURRENT ASSETS 32,193 15,802 2,972 50,967 PROPERTY & EQUIP NET 62,021 2,949 1,144 f 66,114 OTHER ASSETS NET 6,788 944 1,880 f 9,612 ------------------------------------------------------------------ ------------------- TOTAL ASSETS $101,002 $19,695 $ 5,996 $126,693 ------------------------------------------------------------------ ------------------- ------------------------------------------------------------------ ------------------- LIABILITIES AND STOCKHOLDERS' EQUITY TOTAL CURRENT LIABILITIES $ 9,137 $ 6,116 $ 1,240 f $ 19,493 3,000 i 11,300 i LONG-TERM DEBT 11,250 8,509 (8,245) g 22,814 OTHER LONG TERM LIABILITIES 6,635 396 7,031 STOCKHOLDERS EQUITY 73,980 4,674 3,184 h 77,355 (4,483) g,h ------------------------------------------------------------------ ------------------- TOTAL LIABILITIES AND EQUITY $101,002 $19,695 $5,996 $126,693 ------------------------------------------------------------------ ------------------- ------------------------------------------------------------------ -------------------
SEE ACCOMPANYING NOTES TO CONDENSED CONSOLIDATED PRO FORMA FINANCIAL STATEMENTS NOTES TO PRO FORMA FINANCIAL STATEMENTS The pro forma adjustments to the historical financial statements are as follows: (a) To eliminate expenses related to bonus and consulting expenses paid to the former Alumar owners which would not have been incurred had the transaction occurred at the beginning of the periods presented. (b) To reflect additional depreciation expense on the fair value of the assets acquired. Pro forma depreciation is computed on a straight-line method over the estimated useful life of the assets. (c) To reverse interest expense of $584,000 for the year ended March 31, 1995 and $406,000 for the six months ended September 31, 1995 on debt paid off by the Company at acquisition, and to increase interest expense due to the Company's borrowings to fund a portion of the purchase. Interest expense is calculated based upon the actual rate on the funds the Company borrowed. See note (i). (d) Goodwill is amortized on a straight-line-basis over a 15 year term. (e) To reflect the effect upon the income tax provision as if the acquisition had occurred at the beginning of the periods presented. The rate reflects the Company's incremental combined federal and state rates. (f) To record the assets at fair market value at acquisition and record the difference between fair value and purchase price to goodwill. (g) To record the payment of the purchase price and pay off of existing Metal Mark debt. (h) To record the issuance of capital stock as purchase price. (i) To reflect additional debt used for the acquisition. EXHIBIT INDEX Exhibit Sequentially Number Description Numbered Page - ------------------------------------------------------------------------------ **10.1 Agreement and Plan of Merger, dated as of October 1, 1995, among IMCO Recycling Inc., IMCO Recycling of Illinois Inc., Alumar Associates, Inc. and the Shareholders. **10.2 Registration Rights Agreement, dated as of October 1, 1995, among IMCO Recycling Inc. and the Shareholders. *23.1 Consent of Altschuier, Melvoin and Glasser LLP - --------------- * To be filed by amendment. ** Previously filed. -----END PRIVACY-ENHANCED MESSAGE-----