-----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, KINjFzH6E6ZifUCRzvt90kDLlTdgFFJah2pwy+1qbdL5dFvIxXl5iDlPxf/K6whV ZwACcrbl7lsHS9H7Hcua4Q== 0000898822-99-000425.txt : 19990825 0000898822-99-000425.hdr.sgml : 19990825 ACCESSION NUMBER: 0000898822-99-000425 CONFORMED SUBMISSION TYPE: 8-K PUBLIC DOCUMENT COUNT: 2 CONFORMED PERIOD OF REPORT: 19990824 ITEM INFORMATION: ITEM INFORMATION: FILED AS OF DATE: 19990824 FILER: COMPANY DATA: COMPANY CONFORMED NAME: CROMPTON & KNOWLES CORP CENTRAL INDEX KEY: 0000025757 STANDARD INDUSTRIAL CLASSIFICATION: INDUSTRIAL ORGANIC CHEMICALS [2860] IRS NUMBER: 041218720 STATE OF INCORPORATION: MA FISCAL YEAR END: 1225 FILING VALUES: FORM TYPE: 8-K SEC ACT: SEC FILE NUMBER: 001-04663 FILM NUMBER: 99698529 BUSINESS ADDRESS: STREET 1: ONE STATION PL STREET 2: METRO CTR CITY: STAMFORD STATE: CT ZIP: 06902 BUSINESS PHONE: 2033535400 MAIL ADDRESS: STREET 1: ONE STATION PLACE STREET 2: METRO CENTER CITY: STAMFORD STATE: CT ZIP: 06902 8-K 1 FORM 8-K 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): August 23, 1999 Crompton & Knowles Corporation (Exact Name of Registrant as Specified in its Charter) Massachusetts 1-4663 04-1218720 (State or other (Commission (IRS Employer jurisdiction of File Number) Identification incorporation) Number) One Station Place, Metro Center, Stamford, Connecticut 06902 (Address of principal executive offices) (zip code) (203) 353-5400 (Registrant's telephone number, including area code) Item 5. Other Events Crompton & Knowles Corporation, a Massachusetts corporation, and Witco Corporation, a Delaware corporation, commenced a series of joint presentations for shareholders on August 23, 1999. The presentations relate to the planned merger of the two companies. A copy of the presentation is attached as an exhibit hereto and is incorporated by reference herein. Item 7. Financial Statements and Exhibits (a) Financial statements of businesses - Not Applicable (b) Pro forma financial information. - Not Applicable (c) Exhibits. 99.1 Shareholder Presentation dated August 23, 1999. 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 hereunder duly authorized. CROMPTON & KNOWLES CORPORATION By: /s/ John T. Ferguson Name: John T. Ferguson II Title: Secretary Date: August 24, 1999 EXHIBIT INDEX 99.1 Shareholder Presentation dated August 23, 1999. EX-99 2 EXHIBIT 99.1 SHAREHOLDER PRESENTATION [CROMPTON & KNOWLES CORPORATION LOGO] [WITCO CORPORATION LOGO] [CK WITCO CORPORATION LOGO] Shareholder Presentation August 1999 [CROMPTON & KNOWLES CORPORATION LOGO] [WITCO CORPORATION LOGO] Participants Vincent A. Calarco -- Chairman, President & Chief Executive Officer Crompton & Knowles Corporation Dr. E. Gary Cook -- Chairman, President & Chief Executive Officer Witco Corporation Peter Barna -- Chief Financial Officer Crompton & Knowles Corporation Analyst contacts: Rob Bennett 203-552-2282 Bob Harwood 203-573-3441 [CROMPTON & KNOWLES CORPORATION LOGO] [WITCO CORPORATION LOGO] Transaction Summary Shareholder vote set for September 1 Structure Merger of Equals Tax-free stock for stock exchange 1 share WIT = 0.9242 share CNW 1 share CNK = 1 share CNW Purchase accounting Enterprise value: $3.7 billion [CROMPTON & KNOWLES CORPORATION LOGO] [WITCO CORPORATION LOGO] Introducing CK Witco The merger creates a global specialty company with leading market and technology positions, and profitable businesses with strong cash flows... $3.3 billion revenue 44% of revenues from overseas 10,000 employees 63 manufacturing facilities in 19 countries Customer focused culture Solid, profitable businesses with stable cash flows Operating management depth [CROMPTON & KNOWLES CORPORATION LOGO] [WITCO CORPORATION LOGO] CK Witco builds shareholder value CK Witco will provide the opportunity for greater shareholder value through increased cash flow and both top and bottom line growth... Top-line growth Bottom-line growth Immediately cash flow accretive EPS accretive in 2001 Lower cost of debt Strategic & financial flexibility through scale Greater stock liquidity [CROMPTON & KNOWLES CORPORATION LOGO] [WITCO CORPORATION LOGO] Top-Line Growth Product lines are complementary but not competitive. This creates significant cross-selling opportunities... Value-added products in leading market positions Significant customer overlap Broad customer offerings Leverage regional and international presence Market oriented sales force World-class technology [Pie Chart Appears Here] Significant Market Overlap: Polyer & Rubber Processing 28% Elastomers & Urethanes 25% Other 16% Agriculture 15% Textiles 10% Lubricants 6% [CROMPTON & KNOWLES CORPORATION LOGO] [WITCO CORPORATION LOGO] Bottom-Line Growth Bottom line growth will be enhanced by merger synergies and lower cost of debt. Merger synergies $60 million - Total synergies $30 million by 2000 $60 million by 2001 Lower Cost of Debt $12 million high yield Uniroyal bonds - year 2000 $ 5 million investment grade company - year 2000 $17 million - lower interest cost [CROMPTON & KNOWLES CORPORATION LOGO] [WITCO CORPORATION LOGO] Consolidation & Globalization in the Specialty Chemicals Industry CK Witco is well positioned to successfully compete in a rapidly evolving industry. Competitive global market place Slower top-line growth Importance of low-cost position Strategic alliances/joint ventures One stop shopping Improved liquidity in equity market [CROMPTON & KNOWLES CORPORATION LOGO] [WITCO CORPORATION LOGO] C&K Restructuring Management has a strong track record in integrating acquired companies, optimizing the business portfolio, improving the cost structure and buying back stock. Management has a very successful record of merging companies. 15 acquisitions in 15 years Crompton & Knowles acquired Uniroyal Chemical in 1996 Debt reduced from $1.1 billion in 1996 to $668 million (June 1999) Improved operating margin from 12.1% in 1996 to 14.5% in 1998 [CROMPTON & KNOWLES CORPORATION LOGO] [WITCO CORPORATION LOGO] C&K Restructuring Flexible portfolio of businesses Sale of 50% interest in Gustafson seed treatment business $180 million cash Sale of Specialty Ingredients business $103 million cash Joint-Venture of nitrile rubber business New 40,000 metric ton facility in Mexico High-cost Ohio plant closed Stock buyback 9.5 million shares repurchased from September 1998 through April 1999 Average price of $17.85 [CROMPTON & KNOWLES CORPORATION LOGO] [WITCO CORPORATION LOGO] Witco Restructuring The Witco assets restructuring will enable the new company to capitalize on growth opportunties with a low-cost structure. Completing third and final year of restructuring $678 million in capital improvements 12 plants closed Consolidation of warehouses, sales and administrative offices, and R&D facilities Employment reduced by 1,535 Working capital reduced by 25% CK Witco to benefit from: Plant modernization and expansion Growth platforms Reduced fixed and variable costs [CROMPTON & KNOWLES CORPORATION LOGO] [WITCO CORPORATION LOGO] Witco Restructuring Business portfolio enhanced Joint ventures Asset swaps Divestitures Oleochemicals and Derivative Group Sale Sold for $249 million, closing August 31 Proceeds will be applied to debt reduction Retained Memphis facility to supply polymer intermediates Retained portion of Mapleton facility to produce aluminum alkyls CK Witco to retain Petroleum Additives business Fit with C&K's lube additives group Broadens product offering [CROMPTON & KNOWLES CORPORATION LOGO] [WITCO CORPORATION LOGO] Business Overview A global specialty chemicals company with a highly diversified portfolio of products that have leading market positions. [Pie Chart Appears Here] 1998 Revenue by Business Group Specialty Chemicals: 43% Additives: 32% Polymers & Processing Equipment: 25% Leading Market Positions EPDM #1 in N. America Urethanes #1 Worldwide Rubber Chemicals #3 Worldwide Seed Fungicides #1 Worldwide Seed Treatment #1 in N. America Miticides #1 Worldwide Lubricant Additives #1 in Key Products Plastic Additives #1 in Key Products Polymerization Inhibitors #1 in Key Products Poly Extrusion Systems #1 Worldwide Polymer Stabilizers #1 in N. America Aluminum Alkyl Catalysts #2 Worldwide Silanes #1 Worldwide Silicone Surf. & Catalysts #1 Worldwide Refined Products #2 Worldwide Agricultural Surfactants #1 in N. America Oilfield Emulsions #1 in N. America Metal Working Sulfonates #1 Worldwide [CROMPTON & KNOWLES CORPORATION LOGO] [WITCO CORPORATION LOGO] Expected Business Groupings [Pie Chart Appears Here] Specialty Chemicals 43% Organo-Silicones Industrial Surfactants Crop Protection Gustafson* Refined Products Colors Additives 32% Polymer Additives Rubber Chemicals Lube & Petroleum Polymer & Processing Equipment 25% EPDM Castable Urethanes Urethane Chemicals Baxenden* Nitrile* Davis-Standard * Joint Ventures [CROMPTON & KNOWLES CORPORATION LOGO] [WITCO CORPORATION LOGO] Product Lines Performance Chemicals A leading worldwide producer of rubber and chemicals and additives, for plastics and lubricants. key products antioxidants, antiozonants, accelerators, foaming agents, polymer modifier, petroleum additives, synthetic fluids, polymerization inhibitors, curatives and dispersants markets served Automotive, wire and cables, aerospace, constructions, flooring, electronics, tires, belts, lubricants, hoses, rubber sponge, synthetic rubber products, plastics, petrochemicals, additives Crop Protection Producer of products for use on high value crops to improve crop quality and increase yields. A leading international treatment company providing products to assure germination and healthy seedings. key products Fungicides, miticides, insecticides, herbicides, growth regulants and seed treatment equipment. markets served Food and non-food crops with an emphasis on high value crops such as nuts, citrus, tree and vine fruits, tobacco, cotton and ornamental plants Colors The largest producer of dyes in U.S. key products Textile and industrial dyes and auxilary chemicals for the dyeing process markets served About one-half of sales are to the apparel market. Other textile markets include carpeting and other home and automotive furnishing. Industrial dyes markets are primarily paper, leather and ink. Polymers The #1 supplier of EPDM in North America. The #1 worldwide supplier of castable urethanes. Building the world's largest dedicated nitrile rubber mfg. facility. key products EPDM heat, sunlight and ozone resistant rubber, abrasion-resistant castable urethane prepolymers and oil resistant nitrile rubber. markets served EPDM - used in automotive as well as in roofing, hose and wire and cable insulation. Urethane - industrial and printing rollers, mining, mechanical goods, industrial tires and sporting goods. Nitrile rubber - automotive and industrial applications Polymer Processing Equipment The #1 worldwide producer of plastics extrusion systems. key products Integrated single screw and twin screw extrusion systems with advanced electronic controls, industrial blow molding equipment and controls. markets served Makers of extruded products for the packaging, automotive, appliance, construction, medical, and power and communications cable markets [CROMPTON & KNOWLES CORPORATION LOGO] [WITCO CORPORATION LOGO] Product Lines (Cont.) Performance Chemicals A leading worldwide producer of petroleum additives, urethanes chemicals and refined products key products Refined products, urethane chemicals, industrial specialties, petroleum additives, baxenden (J/V) markets served Personal care, fabric care, pharmaceuticals, agriculture, oilfield, urethane products, communication cable, refrigeration, packaging food, textiles, adhesives, printing ink, marine lubricants Polymer Chemicals The #1 worldwide producer of metal working sulfonates and additives & Initiators key products Catalysts and additives, organotin and mixed metal stabilizers, organic peroxides, amide and stearate lubricants, tin stabilizer intermediates, metal organic products, aluminum alkyls, methyl aluminum oxane markets served Polyvinyl Chloride (PVC), Oleofins, Stearates, Marine Paint Additives Organo Silicones The #1 worldwide producer of Silanes, urethanes additives and specialty fluids key products Silanes, Urethane Additives, Specialty Fluids markets served Plastics, Furniture, Textile, Personal Care, Health Care, Adhesives, Sealants, Construction, Automotive, Carpeting, Rubber products, Fiberglass, electronics, antifreeze, coatings, agriculture, insulated appliances, nonwovens and paper processing [CROMPTON & KNOWLES CORPORATION LOGO] [WITCO CORPORATION LOGO] Operating Strategies CK Witco is focused on leveraging core competencies, improving competitive positions and maintaining a low cost structure Build and maintain strong market leadership positions Maintain tight focus on operations Low-cost structure Efficiency gains to increase throughput Focus capital spending on higher-return projects Prudent acquisition strategy [CROMPTON & KNOWLES CORPORATION LOGO] [WITCO CORPORATION LOGO] Financial Objectives EPS growth Target - 10% per year Generate a high and stable free cash flow Target - $150 - $200 Million per year Maintain a strong debt reduction program Target - $125 Million per year minimum Maintain low financial leverage Target - 35% - 45% Maintain maximum financial flexibility Target solid Baa debt rating [CROMPTON & KNOWLES CORPORATION LOGO] [WITCO CORPORATION LOGO] Pro Forma Financial Data (1) Diluted EPS ----------------------------- C&K (5) EARNINGS $ millions CK Witco Standalone 1998 before special items $ 149.9 (2) $ 1.16 (2) $ 1.55 =============================================================================== 1999 $ 1.50 (3) $ 1.60 2000 $ 1.53 (4) $ 1.75 2001 $ 1.91 (4) $ 1.90 EBITDA 1998 Before Special Items $ 592.6 $ 4.60 $ 4.46 TOTAL DEBT Year End 1998 $ 1,762.0 TOTAL EQUITY Year end 1998 $ 1,042.6 INTEREST EXPENSE 1998 $ 134.1 RATIOS Debt to total capital 63% Debt to EBITDA 2.9X EBITDA to interest 4.4X (1) 1998 Data from Joint Proxy Statement (2) Includes Witco for all of 1998 (3) Average CK Witco earnings estimates from Merrill Lynch, Salomon Smith Barney; assumes Witco results included from 9/1/99 (4) Average CK Witco earnings estimates from First Call, shown under CNK (5) Company earnings estimates of June 1, 1999 [CROMPTON & KNOWLES CORPORATION LOGO] [WITCO CORPORATION LOGO] [CK WITCO CORPORATION LOGO] A Winning Combination A leading global specialty chemical company with strong market positions in key segments led by a seasoned management team creating value for shareholders & customers [CROMPTON & KNOWLES CORPORATION LOGO] [WITCO CORPORATION LOGO] Information in this presentation contains "forward-looking statements" which are not historical facts. These statements involve risks and uncertainties that could cause actual results to differ materially including, without limitation, the Company's ability to generate targeted cash flow, revenue and earnings growth, the timing and quantity of merger cost savings, certain global and regional economic conditions and other factors detailed in the Company's Securities and Exchange Commission filings. -----END PRIVACY-ENHANCED MESSAGE-----