-----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, U+YyTOD5u0hL7Epe4+lT60/W8aM/4os604BPpb7rs8ZkGfaiZnSvqR1sz+4zP7Qt QBgHN24+ERxtAkC3JKVvfA== 0000950152-99-005009.txt : 19990624 0000950152-99-005009.hdr.sgml : 19990624 ACCESSION NUMBER: 0000950152-99-005009 CONFORMED SUBMISSION TYPE: 8-K/A PUBLIC DOCUMENT COUNT: 2 CONFORMED PERIOD OF REPORT: 19990414 ITEM INFORMATION: ITEM INFORMATION: FILED AS OF DATE: 19990528 FILER: COMPANY DATA: COMPANY CONFORMED NAME: EAGLE PICHER HOLDINGS INC CENTRAL INDEX KEY: 0001059364 STANDARD INDUSTRIAL CLASSIFICATION: MOTOR VEHICLES & PASSENGER CAR BODIES [3711] IRS NUMBER: 133989553 STATE OF INCORPORATION: DE FISCAL YEAR END: 1130 FILING VALUES: FORM TYPE: 8-K/A SEC ACT: SEC FILE NUMBER: 333-49957-01 FILM NUMBER: 99637615 BUSINESS ADDRESS: STREET 1: 250 EAST FIFTH STREET, SUITE 500 CITY: CINCINNATI STATE: OH ZIP: 45202 BUSINESS PHONE: 5137217010 MAIL ADDRESS: STREET 1: 250 E FIFTH ST STREET 2: STE 500 CITY: CINCINNATI STATE: OH ZIP: 45201-0779 FILER: COMPANY DATA: COMPANY CONFORMED NAME: EAGLE PICHER INDUSTRIES INC CENTRAL INDEX KEY: 0000030927 STANDARD INDUSTRIAL CLASSIFICATION: MOTOR VEHICLE PARTS & ACCESSORIES [3714] IRS NUMBER: 310268670 STATE OF INCORPORATION: OH FISCAL YEAR END: 1130 FILING VALUES: FORM TYPE: 8-K/A SEC ACT: SEC FILE NUMBER: 333-49957 FILM NUMBER: 99637616 BUSINESS ADDRESS: STREET 1: 250 EAST FIFTH STREET, SUITE 500 STREET 2: P O BOX 779 CITY: CINCINNATI STATE: OH ZIP: 45202 BUSINESS PHONE: 5137217010 MAIL ADDRESS: STREET 1: 250 E FIFTH ST STREET 2: STE 500 CITY: CINCINNATI STATE: OH ZIP: 45201-0779 FORMER COMPANY: FORMER CONFORMED NAME: EAGLE PICHER CO DATE OF NAME CHANGE: 19660921 FILER: COMPANY DATA: COMPANY CONFORMED NAME: DAISY PARTS INC CENTRAL INDEX KEY: 0001059567 STANDARD INDUSTRIAL CLASSIFICATION: MOTOR VEHICLE PARTS & ACCESSORIES [3714] IRS NUMBER: 381406772 STATE OF INCORPORATION: OH FISCAL YEAR END: 1130 FILING VALUES: FORM TYPE: 8-K/A SEC ACT: SEC FILE NUMBER: 333-49957-02 FILM NUMBER: 99637617 BUSINESS ADDRESS: STREET 1: 250 EAST FIFTH STREET, SUITE 500 STREET 2: C/O EAGLE PICHER INDUSTRIES INC CITY: CINCINNATI STATE: OH ZIP: 45202 BUSINESS PHONE: 5137217010 MAIL ADDRESS: STREET 1: C/O EAGLE PICHER INDUSTRIES INC STREET 2: P O BOX 779 CITY: CINCINNATI STATE: OH ZIP: 45202 FILER: COMPANY DATA: COMPANY CONFORMED NAME: EAGLE PICHER DEVELOPMENT CO INC CENTRAL INDEX KEY: 0001059568 STANDARD INDUSTRIAL CLASSIFICATION: MOTOR VEHICLE PARTS & ACCESSORIES [3714] IRS NUMBER: 311215706 STATE OF INCORPORATION: OH FISCAL YEAR END: 1130 FILING VALUES: FORM TYPE: 8-K/A SEC ACT: SEC FILE NUMBER: 333-49957-03 FILM NUMBER: 99637618 BUSINESS ADDRESS: STREET 1: 250 EAST FIFTH STREET, SUITE 500 STREET 2: C/O EAGLE PICHER INDUSTRIES INC CITY: CINCINNATI STATE: OH ZIP: 45202 BUSINESS PHONE: 5137217010 MAIL ADDRESS: STREET 1: C/O EAGLE PICHER INDUSTRIES INC STREET 2: P O BOX 779 CITY: CINCINNATI STATE: OH ZIP: 45202 FILER: COMPANY DATA: COMPANY CONFORMED NAME: EAGLE PICHER FAR EAST INC CENTRAL INDEX KEY: 0001059570 STANDARD INDUSTRIAL CLASSIFICATION: MOTOR VEHICLE PARTS & ACCESSORIES [3714] IRS NUMBER: 311235685 STATE OF INCORPORATION: OH FISCAL YEAR END: 1130 FILING VALUES: FORM TYPE: 8-K/A SEC ACT: SEC FILE NUMBER: 333-49957-04 FILM NUMBER: 99637619 BUSINESS ADDRESS: STREET 1: 250 EAST FIFTH STREET, SUITE 500 STREET 2: C/O EAGLE PICHER INDUSTRIES INC CITY: CINCINNATI STATE: OH ZIP: 45202 BUSINESS PHONE: 5137217010 MAIL ADDRESS: STREET 1: C/O EAGLE PICHER INDUSTRIES INC STREET 2: P O BOX 779 CITY: CINCINNATI STATE: OH ZIP: 45202 FILER: COMPANY DATA: COMPANY CONFORMED NAME: EAGLE PICHER FLUID SYSTEMS INC CENTRAL INDEX KEY: 0001059571 STANDARD INDUSTRIAL CLASSIFICATION: MOTOR VEHICLE PARTS & ACCESSORIES [3714] IRS NUMBER: 311452637 STATE OF INCORPORATION: OH FISCAL YEAR END: 1130 FILING VALUES: FORM TYPE: 8-K/A SEC ACT: SEC FILE NUMBER: 333-49957-05 FILM NUMBER: 99637620 BUSINESS ADDRESS: STREET 1: 250 EAST FIFTH STREET, SUITE 500 STREET 2: C/O EAGLE PICHER INDUSTRIES INC CITY: CINCINNATI STATE: OH ZIP: 45202 BUSINESS PHONE: 5137217010 MAIL ADDRESS: STREET 1: C/O EAGLE PICHER INDUSTRIES INC STREET 2: P O BOX 779 CITY: CINCINNATI STATE: OH ZIP: 45202 FILER: COMPANY DATA: COMPANY CONFORMED NAME: EAGLE PICHER MINERALS INC CENTRAL INDEX KEY: 0001059572 STANDARD INDUSTRIAL CLASSIFICATION: MOTOR VEHICLE PARTS & ACCESSORIES [3714] IRS NUMBER: 311188662 STATE OF INCORPORATION: OH FISCAL YEAR END: 1130 FILING VALUES: FORM TYPE: 8-K/A SEC ACT: SEC FILE NUMBER: 333-49957-06 FILM NUMBER: 99637621 BUSINESS ADDRESS: STREET 1: 250 EAST FIFTH STREET, SUITE 500 STREET 2: C/O EAGLE PICHER INDUSTRIES INC CITY: CINCINNATI STATE: OH ZIP: 45202 BUSINESS PHONE: 5137217010 MAIL ADDRESS: STREET 1: C/O EAGLE PICHER INDUSTRIES INC STREET 2: P O BOX 779 CITY: CINCINNATI STATE: OH ZIP: 45202 FILER: COMPANY DATA: COMPANY CONFORMED NAME: HILLSIDE TOOL & MANUFACTURING CO CENTRAL INDEX KEY: 0001059573 STANDARD INDUSTRIAL CLASSIFICATION: MOTOR VEHICLE PARTS & ACCESSORIES [3714] IRS NUMBER: 380946293 STATE OF INCORPORATION: OH FISCAL YEAR END: 1130 FILING VALUES: FORM TYPE: 8-K/A SEC ACT: SEC FILE NUMBER: 333-49957-07 FILM NUMBER: 99637622 BUSINESS ADDRESS: STREET 1: 250 EAST FIFTH STREET, SUITE 500 STREET 2: C/O EAGLE PICHER INDUSTRIES INC CITY: CINCINNATI STATE: OH ZIP: 45202 BUSINESS PHONE: 5137217010 MAIL ADDRESS: STREET 1: 250 E FIFTH ST STREET 2: STE 500 CITY: CINCINNATI STATE: OH ZIP: 45202 FILER: COMPANY DATA: COMPANY CONFORMED NAME: MICHIGAN AUTOMOTIVE RESEARCH CORP CENTRAL INDEX KEY: 0001059575 STANDARD INDUSTRIAL CLASSIFICATION: MOTOR VEHICLE PARTS & ACCESSORIES [3714] IRS NUMBER: 382185909 STATE OF INCORPORATION: OH FISCAL YEAR END: 1130 FILING VALUES: FORM TYPE: 8-K/A SEC ACT: SEC FILE NUMBER: 333-49957-08 FILM NUMBER: 99637623 BUSINESS ADDRESS: STREET 1: 250 EAST FIFTH STREET, SUITE 500 STREET 2: C/O EAGLE PICHER INDUSTRIES INC CITY: CINCINNATI STATE: OH ZIP: 45202 BUSINESS PHONE: 5137217010 MAIL ADDRESS: STREET 1: C/O EAGLE PICHER INDUSTRIES INC STREET 2: 250 E FIFTH ST ST CITY: CINCINNATI STATE: OH ZIP: 45202 FILER: COMPANY DATA: COMPANY CONFORMED NAME: EAGLE PICHER TECHNOLOGIES LLC CENTRAL INDEX KEY: 0001059576 STANDARD INDUSTRIAL CLASSIFICATION: MOTOR VEHICLE PARTS & ACCESSORIES [3714] IRS NUMBER: 311587660 STATE OF INCORPORATION: OH FISCAL YEAR END: 1130 FILING VALUES: FORM TYPE: 8-K/A SEC ACT: SEC FILE NUMBER: 333-49957-09 FILM NUMBER: 99637624 BUSINESS ADDRESS: STREET 1: 250 EAST FIFTH STREET, SUITE 500 STREET 2: C/O EAGLE PICHER INDUSTRIES INC CITY: CINCINNATI STATE: OH ZIP: 45202 BUSINESS PHONE: 5137217010 MAIL ADDRESS: STREET 1: C/O EAGLE PICHER INDUSTRIES INC STREET 2: P O BOX 779 CITY: CINCINNATI STATE: OH ZIP: 45202 8-K/A 1 EAGLE-PICHER HOLDINGS, INC. 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 SECURITIES EXCHANGE ACT OF 1934 Date of report (Date of earliest event reported) April 14, 1999 ----------------------- EAGLE-PICHER HOLDINGS, INC. - -------------------------------------------------------------------------------- (Exact name of registrant as specified in its charter) DELAWARE 333-49957-01 13-3989553 - ------------------------------ ---------------- ---------------------- (State or other jurisdiction (Commission (IRS Employer of incorporation) File Number) Identification No.) 250 East Fifth Street, Suite 500, Cincinnati, Ohio 45202 - -------------------------------------------------------------------------------- (Address of principal executive offices) Zip Code Registrant's telephone number, including area code 513-721-7010 ------------------------------ (Not Applicable) - -------------------------------------------------------------------------------- (Former Name Or Former Address, If Changed Since Last Report) 2 TABLE OF ADDITIONAL REGISTRANTS
Jurisdiction of IRS Employer Incorporation or Commission File Identification Name Organization Number Number ---- ------------ ------ ------ Eagle-Picher Industries, Inc. Ohio 333-49957 31-0268670 Daisy Parts, Inc. Michigan 333-49957-02 38-1406772 Eagle-Picher Development Co., Inc. Delaware 333-49957-03 31-1215706 Eagle-Picher Far East, Inc. Delaware 333-49957-04 31-1235685 Eagle-Picher Fluid Systems, Inc. Michigan 333-49957-05 31-1452637 Eagle-Picher Minerals, Inc. Nevada 333-49957-06 31-1188662 Eagle-Picher Technologies, LLC Delaware 333-49957-09 31-1587660 Hillsdale Tool & Manufacturing Co. Michigan 333-49957-07 38-0946293 Michigan Automotive Research Corp. Michigan 333-49957-08 38-2185909
2 3 ITEM 2. ACQUISITION OR DISPOSITION OF ASSETS On April 14, 1999, Hillsdale Tool & Manufacturing Co. ("Hillsdale"), an indirectly wholly-owned subsidiary of Eagle-Picher Holdings, Inc. (the "Company"), acquired all of the outstanding capital stock of Charterhouse Automotive Group, Inc., a Delaware corporation ("Charterhouse"), the indirect parent corporation of Carpenter Enterprises Limited, a Michigan corporation ("Carpenter"). The acquisition was made pursuant to a Stock Purchase Agreement dated April 8, 1999, which was held in escrow until April 14, 1999, and is effective as of March 1, 1999 for accounting purposes. The total consideration paid for Charterhouse was approximately $72.0 million, consisting of $37.9 million for the stock of Charterhouse, a $3.1 million payment to the former president of Carpenter under a phantom stock plan which was triggered by the transaction, and $31.0 million of existing indebtedness of Carpenter. Carpenter is a supplier of precision machined components to the automotive industry. Charterhouse was a holding company whose only asset was the stock of Charterhouse-Carpenter Holdings, Inc., a Delaware corporation ("Carpenter Holdings"), another holding company whose only asset was the stock of Carpenter. Immediately following the acquisition, Carpenter Holdings was dissolved and Charterhouse was merged into Carpenter. A copy of the press release announcing the completion of this transaction is attached hereto as Exhibit 99.1 and incorporated herein by reference. ITEM 7. FINANCIAL STATEMENTS, PRO FORMA FINANCIAL INFORMATION AND EXHIBITS The Company acquired the capital stock of Charterhouse, however Carpenter is the only operating entity. Therefore, the results of operations and cash flows of Carpenter approximate those of Charterhouse and their financial statements are substantially similar. In addition, the financial statements of Carpenter represent the business acquired on a proforma basis. Therefore, the financial information presented herein is that of Carpenter. (a) Financial Statements of Businesses Acquired Number Description ------ ----------- F-1 Condensed Statements of Income for the six months ended December 31, 1998 and 1997. F-2 Condensed Statements of Cash Flow for the six months ended December 31, 1998 and 1997 F-3 Condensed Balance Sheet as of December 31, 1998 F-4 Report of Independent Auditors F-5 Balance Sheet as of June 30, 1998 F-7 Statement of Operations and Retained Earnings for the year ended June 30, 1998 F-8 Statement of Cash Flows for the year ended June 30, 1998 F-9 Notes to Financial Statements (b) Pro Forma Financial Information Number Description ------ ----------- P-1 Pro Forma Condensed Combined Financial Statements-Summary P-2 Pro Forma Condensed Combined Balance Sheet as of February 28, 1999 P-3 Notes to Pro Forma Condensed Combined Balance Sheet P-4 Pro Forma Condensed Combining Statement of Income (Loss) for the Nine Months Ended November 30, 1998 P-5 Pro Forma Condensed Combining Statement of Income (Loss) for the three Months Ended February 28, 1998 P-6 Notes to Pro Forma Condensed Combining Statements of Income (Loss) (c) Exhibits: 2.1 - Stock Purchase Agreement dated April 8, 1999 between Hillsdale Tool & Manufacturing Co., Charterhouse Automotive Group, Inc. and the shareholders of Charterhouse Automotive Group, Inc. 23.1 - Consent of Ernst & Young LLP 99.1 - Press release dated April 14, 1999 announcing the completion of the acquisition. 3 4 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 thereunto duly authorized. EAGLE-PICHER HOLDINGS, INC. /s/ Carroll D. Curless ----------------------------------- Carroll D. Curless Vice President and Controller DATE May 27, 1999 -------------------- 4 5 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 thereunto duly authorized. EAGLE-PICHER INDUSTRIES, INC. /s/ Carroll D. Curless ------------------------------------ Carroll D. Curless Vice President and Controller DATE May 27, 1999 ------------------------- 5 6 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 thereunto duly authorized. DAISY PARTS, INC. /s/ Gary M. Freytag ---------------------------------- Gary M. Freytag Vice President and Treasurer DATE May 27, 1999 --------------------- 6 7 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 thereunto duly authorized. EAGLE-PICHER DEVELOPMENT COMPANY, INC. /s/ Gary M. Freytag -------------------------------- Gary M. Freytag Vice President and Treasurer DATE May 27, 1999 ------------------------ 7 8 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 thereunto duly authorized. EAGLE-PICHER FAR EAST, INC. /s/ Gary M. Freytag -------------------------------- Gary M. Freytag Vice President and Treasurer DATE May 27, 1999 ---------------------- 8 9 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 thereunto duly authorized. EAGLE-PICHER FLUID SYSTEMS, INC. /s/ Gary M. Freytag ------------------------------ Gary M. Freytag Treasurer DATE May 27, 1999 --------------------------- 9 10 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 thereunto duly authorized. EAGLE-PICHER MINERALS, INC. /s/ Gary M. Freytag -------------------------------- Gary M. Freytag Vice President and Treasurer DATE May 27, 1999 ---------------------- 10 11 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 thereunto duly authorized. EAGLE-PICHER TECHNOLOGIES, LLC /s/ William E. Long -------------------------------- William E. Long President DATE May 27, 1999 ------------------------ 11 12 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 thereunto duly authorized. HILLSDALE TOOL & MANUFACTURING CO. /s/ Gary M. Freytag ---------------------------- Gary M. Freytag Treasurer DATE May 27, 1999 ------------------------- 12 13 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 thereunto duly authorized. MICHIGAN AUTOMOTIVE RESEARCH CORPORATION /s/ Gary M. Freytag ----------------------------- Gary M. Freytag Vice President DATE May 27, 1999 -------------------------- 13 14 EXHIBIT INDEX ------------- Exhibit No. Description ----------- ----------- 2.1 Stock Purchase Agreement dated April 8, 1999 between Hillsdale Tool & Manufacturing Co., Charterhouse Automotive Group, Inc. and the shareholders of Charterhouse Automotive Group, Inc.+ 23.1 Consent of Ernst & Young LLP* 99.1 Press release dated April 14, 1999 announcing the completion of the acquisition.+ *Filed herewith. +Previously filed. 14 15 CARPENTER ENTERPRISES, LTD. CONDENSED STATEMENTS OF INCOME SIX MONTHS ENDED DECEMBER 31 (UNAUDITED)
SIX MONTHS ENDED DECEMBER 31, ----------------------------- 1998 1997 ---- ---- (in thousands of dollars) NET SALES $ 63,510 $ 43,374 -------- -------- OPERATING COSTS AND EXPENSES Cost of goods sold 54,458 36,989 Selling and administrative 905 671 Depreciation 2,861 2,395 Amortization of intangibles 21 21 Loss on disposal of assets 10 -- -------- -------- 58,255 40,076 -------- -------- OPERATING INCOME 5,255 3,298 Interest expense (1,235) (1,453) Other income (expense) 293 354 -------- -------- INCOME BEFORE TAXES 4,313 2,199 INCOME TAXES 1,549 850 -------- -------- NET INCOME $ 2,764 $ 1,349 ======== ========
F-1 16 CARPENTER ENTERPRISES, LTD. CONDENSED STATEMENTS OF CASH FLOWS SIX MONTHS ENDED DECEMBER 31 (UNAUDITED)
SIX MONTHS ENDED DECEMBER 31, ---------------------------------------- 1998 1997 ------- ------ (in thousands of dollars) CASH FLOWS FROM OPERATING ACTIVITIES: Net income $ 2,764 $ 1,349 Adjustments to reconcile net income to net cash provided by operating activities: Depreciation and amortization 2,928 2,461 Loss on sale of equipment 10 - Changes in assets and liabilities (2,854) (2,119) ------- ------- Net cash provided by operating activities 2,848 1,691 ------- ------- CASH FLOWS FROM INVESTING ACTIVITIES: Capital expenditures (4,409) (3,239) Other 10 - ------- ------- Net cash used in investing activities (4,399) (3,239) ------- ------- CASH FLOWS FROM FINANCING ACTIVITIES: Net borrowings (repayments) under revolving credit demand note agreement 10,947 (1,006) Issuance of new long-term debt - 3,196 Reduction of long-term debt (6,385) (2,575) ------- ------- Net cash provided by (used in) financing activities 4,562 (385) ------- ------- Increase (decrease) in cash and cash equivalents 3,011 (1,933) CASH AND CASH EQUIVALENTS, BEGINNING OF PERIOD 1 1,948 ------- ------- CASH AND CASH EQUIVALENTS, END OF PERIOD $ 3,012 $ 15 ======= =======
F-2 17 CARPENTER ENTERPRISES, LTD. CONDENSED BALANCE SHEET DECEMBER 31, 1998 (UNAUDITED)
(in thousands ASSETS of dollars) CURRENT ASSETS Cash and cash equivalents $ 3,012 Receivables, net 12,076 Inventories 5,293 Prepaid expenses 5,486 Deferred income taxes 81 -------- Total Current Assets 25,948 PROPERTY, PLANT AND EQUIPMENT, NET 37,769 GOODWILL, NET 1,201 OTHER ASSETS 2,029 -------- TOTAL ASSETS $ 66,947 ======== LIABILITIES AND SHAREHOLDER'S EQUITY CURRENT LIABILITIES Accounts payable $ 9,333 Long-term debt - current portion 18,553 Income taxes (317) Other current liabilities 1,054 -------- Total Current Liabilities 28,623 LONG-TERM DEBT, LESS CURRENT PORTION 16,293 DEFERRED INCOME TAXES 2,782 OTHER LIABILITIES 74 -------- Total Liabilities 47,772 -------- SHAREHOLDER'S EQUITY 19,175 -------- TOTAL LIABILITIES AND SHAREHOLDER'S EQUITY $ 66,947 ========
F-3 18 Report of Independent Auditors Board of Directors Carpenter Enterprises, Limited We have audited the accompanying balance sheet of Carpenter Enterprises, Limited as of June 30, 1998, and the related statements of operations and retained earnings and cash flows for the year then ended. These financial statements are the responsibility of the Company's management. Our responsibility is to express an opinion on these financial statements based on our audit. We conducted our audit in accordance with generally accepted auditing standards. Those standards require that we plan and perform the 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 an assessment of 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, the financial statements referred to above present fairly, in all material respects, the financial position of Carpenter Enterprises, Limited at June 30, 1998, and the results of its operations and its cash flows for the year then ended, in conformity with generally accepted accounting principles. /s/ Ernst & Young LLP Detroit, Michigan August 14, 1998 F-4 19 Carpenter Enterprises, Limited Balance Sheet June 30, 1998
ASSETS Current assets: Cash $ 1,245 Accounts receivable: Trade 9,186,727 Tooling 5,109,385 Other 120,033 ----------- 14,416,145 Inventories 3,350,902 Customer tooling in progress 123,794 Prepaid expenses and other assets 327,037 Deferred federal income taxes 81,000 ----------- Total current assets 18,300,123 Property, plant and equipment: Land and land improvements 859,263 Buildings and building improvements 7,260,096 Machinery, equipment and vehicles 44,324,057 Furniture and fixtures 426,592 Construction in process 5,552,755 ----------- 58,422,763 Less accumulated depreciation 22,181,828 ----------- 36,240,935 Deferred financing costs, net of accumulated amortization of $179,476 305,431 Long-term tooling receivable 3,486,475 Goodwill, net of accumulated amortization of $469,536 1,221,563 =========== Total assets $59,554,527 ===========
F-5 20
LIABILITIES AND STOCKHOLDERS' EQUITY Current liabilities: Current portion of long-term debt $ 6,595,465 Current portion of obligation under capital leases 619,912 Revolving credit demand note 335,055 Accounts payable 8,296,933 Accrued liabilities: Wages and vacations 537,364 Employee benefits 466,874 Property, payroll and other taxes 450,487 Interest 136,985 Income taxes payable to parent company 124,497 ----------- 1,716,207 ----------- Total current liabilities 17,563,572 Long-term liabilities: Deferred federal income taxes 2,782,000 Other 66,546 Long-term debt, less current portion 22,571,309 Capital lease obligations, less current portion 160,458 ----------- 25,580,313 Stockholders' equity: Common stock $.001 par value 10,000 shares authorized, 945 issued and outstanding 1 Paid-in capital 2,688,774 Retained earnings 13,721,867 ----------- Total stockholders' equity 16,410,642 ----------- Total liabilities and stockholders' equity $59,554,527 ===========
See accompanying notes F-6 21 Carpenter Enterprises, Limited Statement of Operations and Retained Earnings Year ended June 30, 1998
Net sales $ 99,771,881 Cost and expenses: Cost of products sold 88,628,194 Selling, general and administrative expenses 2,244,264 ------------ 8,899,423 Other income (expense): Interest income 923,342 Interest expense (3,053,491) Loss on disposal of equipment (676,958) Other 53,953 ------------ Income before income taxes 6,146,269 Income taxes 2,099,700 ------------ Net income 4,046,569 Retained earnings beginning of year 9,675,298 ------------ Retained earnings end of year $ 13,721,867 ============
See accompanying notes F-7 22 Carpenter Enterprises, Limited Statement of Cash Flows Year ended June 30, 1998
OPERATING ACTIVITIES Net income $ 4,046,569 Adjustments to reconcile net income to net cash from operating activities: Depreciation and amortization 5,427,208 Loss on disposal of equipment 676,958 Deferred income taxes 153,000 Changes in operating assets and liabilities: Accounts receivable (8,519,741) Inventories (418,774) Prepaid expenses and other assets (249,782) Customer tooling in progress 12,672,946 Long-term tooling receivable (3,486,475) Income taxes payable/receivable 396,700 Accounts payable 571,134 Accrued liabilities 754,471 Other 66,546 ------------ Net cash provided by operating activities 12,090,760 INVESTING ACTIVITIES Proceeds from sale of equipment 550,000 Expenditures for property, plant and equipment (5,216,515) ------------ Net cash used in investing activities (4,666,515) FINANCING ACTIVITIES Net payments under revolving credit demand note (5,414,945) Principal payments of obligations under capital leases (586,274) Proceeds from borrowings under long-term debt 3,195,546 Payments on long-term debt (6,565,522) ------------ Net cash used in financing activities (9,371,195) ------------ Net decrease in cash (1,946,950) Cash at beginning of year 1,948,195 ============ Cash at end of year $ 1,245 ============
See accompanying notes F-8 23 Carpenter Enterprises, Limited Notes to Financial Statements June 30, 1998 1. SIGNIFICANT ACCOUNTING POLICIES OWNERSHIP Carpenter Enterprises, Limited (the "Company") is a 95 percent owned subsidiary of Carpenter Holdings, Inc. ("Holdings"), which is a wholly owned subsidiary of Charterhouse Automotive Group, Inc. ("CAGI"). DESCRIPTION OF BUSINESS The Company is a supplier of machined castings and assemblies serving the North American automotive equipment market's power train, steering and suspension systems. INVENTORIES Inventories are stated at the lower of cost, determined using the first-in, first-out method, or market. PROPERTY, PLANT AND EQUIPMENT Property, plant and equipment are stated at cost. Depreciation is computed on the straight-line method based upon the estimated useful lives of the respective assets. Depreciation expense was $5,293,870 for the year ended June 30, 1998. GOODWILL Goodwill represents the excess purchase price over the fair value of identifiable net assets acquired and is amortized using the straight-line method over 40 years. DEFERRED FINANCING COSTS Costs incurred in connection with obtaining financing are amortized using the straight-line method over the term of the related financing. F-9 24 Carpenter Enterprises, Limited Notes to Financial Statements (continued) 1. SIGNIFICANT ACCOUNTING POLICIES (CONTINUED) RECOVERABLE TOOLING COSTS Tooling costs associated with significant model changes which are not recovered from the customer upon completion are recorded as tooling receivable. These receivables are recovered through increased part prices on units shipped on the related automotive part program. Upon full recovery of the tooling receivable, the part price is decreased to reflect normal operational pricing levels. The estimated amount to be recovered within the subsequent twelve months from the balance sheet date, based upon projected shipping volumes, is classified as current tooling receivables in the balance sheet, with the balance classified as long-term. INCOME TAXES The operations of the Company are included in the consolidated federal income tax return of Charterhouse Automotive Group, Inc. On a separate return basis, the Company provides for federal income taxes currently payable and deferred in accordance with Statement of Financial Accounting Standards No. 109, "Accounting for Income Taxes". Deferred taxes result from depreciation and other less significant temporary differences between taxable income and income for financial reporting purposes. MANAGEMENT ESTIMATES The preparation of financial statements in conformity with generally accepted accounting principles requires management to make estimates and assumptions that affect the amounts reported in the financial statements and accompanying notes. Actual results could differ from those estimates. F-10 25 Carpenter Enterprises, Limited Notes to Financial Statements (continued) 2. INVENTORIES Inventories consist of the following at June 30, 1998:
1998 ---------- Raw materials $1,836,563 Work in process 119,815 Finished goods 1,394,524 ========== Total $3,350,902 ==========
3. LONG-TERM DEBT Long-term debt consists of the following at June 30, 1998:
1998 ----------- Term loans $13,366,774 Subordinated debt, affiliate 2,000,000 Revenue bonds 13,800,000 ----------- Total debt 29,166,774 Less current portion 6,595,465 =========== Long-term portion $22,571,309 ===========
The Company has a financing agreement (the "Agreement") with a lending institution to borrow $19,400,000 as follows: - $9,000,000 under a revolving credit demand note at 0.75% above prime rate (8.75% at June 30, 1998). - $3,200,000 under term loans at 9.8% with monthly principal and interest payments of $33,998 and the remaining balances due July 27, 2000. - $7,200,000 under term loans at 9.55% with monthly principal and interest payments of $151,350 and the remaining balances due July 27, 2000. The Company may prepay the borrowings at anytime. Substantially all of the Company's assets are pledged as collateral for repayment of borrowings under the Agreement. The Agreement contains various restrictive covenants, including maintenance of stipulated levels of working capital, tangible net worth and total debt, and also limits the payment of dividends. At June 30, 1998 no retained earnings are available for the payment of dividends. F-11 26 Carpenter Enterprises, Limited Notes to Financial Statements (continued) 3. LONG-TERM DEBT Effective September 13, 1996, the Company entered into a master demand note with a lending institution whereby the Company may borrow up to $9,000,000. The loan is due on the earlier of demand or October 31, 1997 and bears an interest rate of 1.25 percent above prime. Effective October 31, 1997, the Company entered into an agreement which converted the master demand note to a $9,000,000 term loan at 8.75 percent with monthly principal and interest payments of $307,843 and the remaining balance due June 30, 2000. Subordinated debt consists of borrowings under a loan agreement with a stockholder of CAGI with interest payable quarterly at 14.4%. The debt is subordinated to the Agreement and contains similar covenants. The subordinated debt requires a final principal payment of $2,000,000 on July 31, 1999. This final payment was made on July 31, 1998 at no penalty to the Company. Interest paid to the stockholder of CAGI was $523,000 for the year ended June 30, 1998. The Company has $13,800,000 of Federally Taxable Variable Rate Demand Limited Obligation Revenue Bonds. The revenue bonds bear a variable interest rate based on weekly market conditions (5.65% at June 30, 1998) and have mandatory annual redemptions of $1,700,000 from October 1998 to 2003 and $1,800,000 for 2004 and 2005. These revenue bonds are collateralized by a letter of credit with a financial institution which bears a fee of 1.5% annually. Annual maturities of long-term debt are as follows: Year ending June 30 -------------------
1999 $ 6,595,465 2000 9,108,569 2001 4,762,740 2002 1,700,000 2003 1,700,000 Thereafter 5,300,000 ----------- Total long-term debt $29,166,774 ===========
F-12 27 Carpenter Enterprises, Limited Notes to Financial Statements (continued) 4. PENSION AND PROFIT-SHARING PLAN The Company maintains a 401(k) plan for all employees. The Company matches a portion of the employee contributions in addition to discretionary contributions. Company contributions are fully vested after five years of service. Company contributions are determined semiannually and amounted to $289,000 for the year ended June 30, 1998. The Company also has a discretionary profit-sharing plan covering all employees. Company contributions are determined and distributed quarterly and amounted to $1,130,000 for the year ended June 30, 1998. 5. INTEREST COSTS Interest costs consisted of the following:
YEAR ENDED JUNE 30, 1998 ---------- Total interest costs incurred $3,611,629 Less amount capitalized: Tooling 440,474 Fixed assets 117,664 ---------- Interest expense $3,053,491 ========== Interest paid $3,537,209 ==========
6. INCOME TAXES At June 30, 1997, the Company had an alternative minimum tax credit carryforward of approximately $454,000 which had been recorded as a reduction of deferred income tax liabilities. This carryforward will be utilized on the June 30, 1998 corporate income tax return. Income taxes paid to, or on behalf of, CAGI and affiliates aggregated $1,550,000 for the year ended June 30, 1998. F-13 28 Carpenter Enterprises, Limited Notes to Financial Statements (continued) 6. INCOME TAXES (CONTINUED) The provision for federal income taxes is summarized as follows:
YEAR ENDED JUNE 30, 1998 ----------- Currently payable $1,946,700 Deferred expense 153,000 ---------- $2,099,700 ==========
The provision for federal income taxes differs from that computed at the statutory corporate as follows:
YEAR ENDED JUNE 30, 1998 ----------- Tax expense at statutory rate of 34% $ 2,089,700 Goodwill amortization 14,300 Other (credit) (4,300) =========== Total $ 2,099,700 ===========
F-14 29 Carpenter Enterprises, Limited Notes to Financial Statements (continued) 6. INCOME TAXES (CONTINUED) Deferred federal income taxes reflect the net tax effects of temporary differences between the carrying amounts of assets and liabilities for financial reporting purposes and the amounts used for income tax purposes. Significant components of the Company's deferred federal income tax assets and liabilities are as follows:
JUNE 30, 1998 ---------- Deferred federal income tax assets: Vacation pay $ 89,300 Capitalized leases 36,000 ---------- Total deferred federal income tax assets 125,300 Deferred federal income tax liabilities: Depreciation 1,536,500 Purchase accounting adjustments 821,000 Interest capitalized 460,500 Prepaid insurance 8,300 ---------- Total deferred federal income tax liabilities 2,826,300 ---------- Net deferred federal income tax liability $2,701,000 ==========
7. COMMITMENTS The Company has agreements with certain employee stockholders which, under certain events of termination, would allow those stockholders the right to put their shares to the Company and require the Company to purchase them at a price equal to book value per share at the time of the put. The agreements and the Company's commitment will terminate upon certain conditions, including the effective date of an initial public offering by the Company. At June 30, 1998, the value of the 45 shares subject to this agreement aggregated $781,384. The Company has a Phantom Stock Plan with an officer under which, in the event of sale of the Company, the officer is to receive a payment equal to 10% of the sales price in excess of the book value of the Company on July 31, 1993, as defined. F-15 30 Carpenter Enterprises, Limited Notes to Financial Statements (continued) 8. CONCENTRATION OF CREDIT RISK AND FAIR VALUE OF FINANCIAL INSTRUMENTS At June 30, 1998 substantially all trade accounts receivable are from major domestic automotive manufacturers. The Company generally does not require collateral from its customers. Credit losses from automobile manufacturers have been within management's expectations. The carrying amount reported in the balance sheet for cash approximates its fair value. The fair values of the Company's long-term debt, which approximates the carrying value at June 30, 1998, are estimated using discounted cash flow analyses, based on the Company's current incremental borrowing rates for similar types of borrowing arrangements. 9. LEASES During October 1994, the Company entered into a sale-lease back transaction for machinery and equipment. The sale-lease back has been accounted for as a capital lease that extends through October 1999. The Company also leases certain buildings, machinery and equipment under non-cancelable leases that expire at various times through 2000. Machinery and equipment includes the following amounts for leases that have been capitalized:
YEAR ENDED JUNE 30, 1998 ---------- Machinery and equipment $3,528,945 Less accumulated amortization 2,532,319 ---------- $ 996,626 ==========
Amortization of leased assets included in depreciation expense amounted to $725,434 for the year ended June 30, 1998. F-16 31 Carpenter Enterprises, Limited Notes to Financial Statements (continued) 9. LEASES (CONTINUED) Future minimum payments under capital leases and non-cancelable operating leases with initial terms of one year or more consisted of the following:
CAPITAL OPERATING YEARS ENDING JUNE 30 LEASES LEASES ---------------------- 1999 $647,822 $191,894 2000 161,956 63,283 2001 -- 21,837 Thereafter -- 9,804 -------- -------- Total minimum lease payments 809,778 $286,818 ======== Amounts representing interest 29,408 -------- Present value of net minimum lease payments (including current portion of $619,912) $780,370 ========
Rent expense aggregated $240,148 for the year ended June 30, 1998. 10. YEAR 2000 COMPLIANCE (UNAUDITED) The Company is in the process of implementing appropriate action to ensure that its computer information systems will be able to interpret the calendar year term "2000". Systems that process transactions based on storing two digits for the year rather than the full four digits may encounter significant process inaccuracies and even inoperability in attempting to process year 2000 transactions. The Company does not expect the costs of software to replace existing year 2000 non-compliant systems to have a material effect on its financial position or results of operations. Management presently believes that, with planned modifications to existing software and conversion to new software, year 2000 compliance will not pose significant operational problems. However, if such modifications and conversions are not completed on a timely basis, or if the Company's suppliers have significant unresolved systems problems, there is a risk that year 2000 compliance could have a material impact on the operations of the Company. 11. SUBSEQUENT EVENT (UNAUDITED) On April 8, 1999, CAGI and its shareholders and Hillsdale Tool & Manufacturing Co. (Hillsdale), a wholly-owned subsidiary of Eagle-Picher Holdings, Inc. entered into a "Stock Purchase Agreement" whereby Hillsdale would acquire all of the outstanding capital stock of CAGI. F-17 32 Carpenter Enterprises, Limited Notes to Financial Statements (continued) 11. SUBSEQUENT EVENT (UNAUDITED) (CONTINUED) The total consideration paid for CAGI was approximately $72.0 million, consisting of $37.9 million for the stock of CAGI, a $3.1 million payment to the former president of the Company under a Phantom Stock Plan which was triggered by the transaction, and $31.0 million of existing indebtedness of the Company. F-18 33 EAGLE-PICHER HOLDINGS, INC. Pro Forma Condensed Combined Financial Statements - Summary Eagle-Picher Holdings, Inc. ("the Company") consummated its agreement to purchase the capital stock of Charterhouse on April 14, 1999 ("the Acquisition"). The total consideration paid was approximately $72.0 million, consisting of $37.9 million for the stock of Charterhouse, a $3.1 million payment to the former president of Carpenter under a phantom stock plan and $31.0 million of existing indebtedness of Carpenter. Approximately $18.6 million of Carpenter's existing debt was repaid in conjunction with the Acquisition. The following unaudited pro forma condensed combined balance sheet as of February 28, 1999 was prepared assuming the sale was consumated as of the balance sheet date. At this date, Carpenter's indebtedness totaled $34.6 million. The Company's condensed consolidated balance sheet as of February 28, 1999 has been previously reported on Form 10-Q. The unaudited pro forma condensed combining statements of income have been prepared as if the acquisition of Carpenter occurred as of December 1, 1997 using the actual amounts of Carpenter debt repaid and corresponding amounts borrowed on the Company's revolving credit facility. Prior to the Acquisition, the Company had a previous revolving credit facility with different terms. The Company also had cash balances in excess of what are considered normal operating levels. It was assumed for these purposes that the acquisition of Carpenter was financed by cash and through the previous revolving credit facility. Eagle-Picher Industries, Inc. was acquired February 24, 1998 by Granaria Industries B.V. (the "Granaria Acquisition"). The Company was formed primarily as an acquisition vehicle and its only operating subsidiary is Eagle-Picher Industries, Inc. As a result of the Granaria Acquisition, the Company's results for the year ended November 30, 1998 were reported in Consolidated Statements of Income (Loss) for the nine months ended November 30, 1998 and the three months ended February 28, 1998 because the financial statements for these periods were not prepared on a comparable basis due to the implementation of purchase accounting. The pro forma statements of income (loss) are presented in a similar manner herein. The pro forma condensed combined financial statements referred to above do not purport to represent what the Company's financial position or results of operations actually would have been if the Acquisition, in fact, occurred on the dates referred to above or to project the Company's results of operations for any period. These pro forma condensed combined financial statements and the accompanying notes should be read in conjunction with the consolidated financial statements and notes thereto included in the Company's Annual Report on Form 10-K for the year ended November 30, 1998. P-1 34 EAGLE-PICHER HOLDINGS, INC. Unaudited Pro Forma Condensed Combined Balance Sheets as of February 28, 1999
CARPENTER PRO FORMA ENTERPRISES PRO FORMA COMBINED ASSETS REPORTED LTD. ADJUSTMENTS COMPANY - ------ -------- ---- ----------- ------- (in thousands of dollars) CURRENT ASSETS Cash and cash equivalents $ 10,325 $ 1 $ - $ 10,326 Receivables, net 127,312 18,495 - 145,807 Inventories 94,405 4,983 - 99,388 Prepaid expenses 10,927 5,706 - 16,633 Deferred income taxes 10,851 81 1,346 b 12,278 -------- -------- -------- -------- Total Current Assets 253,820 29,266 1,346 284,432 PROPERTY, PLANT AND EQUIPMENT, NET 246,688 37,368 6,500 b 290,556 EXCESS OF ACQUIRED NET ASSETS OVER COST, NET 224,889 1,193 17,585 b 243,667 OTHER ASSETS 73,483 1,161 (267)b 74,377 -------- -------- -------- -------- TOTAL ASSETS $798,880 $ 68,988 $ 25,164 $893,032 -------- -------- -------- -------- LIABILITIES AND SHAREHOLDER'S EQUITY CURRENT LIABILITIES Accounts payable $ 47,905 $ 10,982 $ - $ 58,887 Long-term debt - current portion 19,246 19,277 (17,206)a 21,317 Income taxes 2,365 (182) - 2,183 Other current liabilities 72,713 1,204 950 a,b 74,867 -------- -------- -------- -------- Total Current Liabilities 142,229 31,281 (16,256) 157,254 LONG-TERM DEBT, LESS CURRENT PORTION 457,808 15,397 58,587 a 531,792 DEFERRED INCOME TAXES 7,743 2,782 2,275 b 12,800 OTHER LIABILITIES 25,210 86 - 25,296 -------- -------- -------- -------- Total Liabilities 632,990 49,546 44,606 727,142 11 3/4% CUMULATIVE REDEEMABLE EXCHANGEABLE PREFERRED STOCK 89,881 - - 89,881 SHAREHOLDER'S EQUITY 76,009 19,442 (19,442)c 76,009 -------- -------- -------- -------- TOTAL LIABILITIES AND SHAREHOLDER'S EQUITY $798,880 $ 68,988 $ 25,164 $893,032 ======== ======== ======== ========
P-2 35 EAGLE-PICHER HOLDINGS, INC. NOTES TO CONDENSED COMBINED PRO FORMA BALANCE SHEET As of February 28, 1999 (In thousands of dollars) Explanations of specific pro forma adjustments are as follows: (a) Reflects the sources and uses of funds for the Carpenter Acquisition as follows, assuming the Carpenter Acquisition occurred as of February 28, 1999:
Sources of Funds: Revolving credit facility $ 63,584 Accrued liabilities 250 -------- Total sources of funds $ 63,834 ======== Uses of Funds: Common shareholders of Charterhouse $ 37,910 Payment under a phantom stock plan to the former president of Carpenter 3,146 Repayment of existing Carpenter long- term debt - current portion 17,206 Repayment of existing Carpenter long- term debt - long-term portion 4,997 Fees and expenses 575 -------- Total uses of funds $ 63,834 ======== In addition, the Company assumed Carpenter debt totaling $12,471, which was not repaid at the time of closing.
(b) The purchase price and preliminary adjustments to historical book value of Carpenter as a result of the Carpenter Acquisition are as follows, assuming the Acquisition occurred as of February 28, 1998:
Purchase price: Estimated value of consideration $ 63,834 Book value of net assets acquired (19,442) Carpenter debt repaid (22,203) -------- Purchase price in excess of net assets acquired $ 22,189 ======== Preliminary allocation of purchase price in excess Of net assets acquired: Increase in property, plant and equipment to estimated fair value $ 6,500 Contingent liabilities (700) Former Carpenter goodwill and other assets assigned no fair value (1,460) Deferred taxes (929) Excess of acquired net assets over cost 18,778 -------- Total $ 22,189 ========
(c) Represents the elimination of the Carpenter common stock, additional paid-in capital and pre-Acquisition retained earnings. P-3 36 EAGLE-PICHER HOLDINGS, INC. UNAUDITED PRO FORMA CONDENSED COMBINING STATEMENTS OF INCOME (LOSS) NINE MONTHS ENDED NOVEMBER 30, 1998
REPORTED CARPENTER NINE MONTHS NINE MONTHS PRO FORMA ENDED ENDED PRO FORMA COMBINED NOVEMBER 30, 1998 SEPTEMBER 30, 1998 ADJUSTMENTS COMPANY ----------------- ------------------ ----------- ------- (in thousands of dollars) NET SALES $ 645,984 $ 87,344 $ -- $ 733,328 OPERATING COSTS AND EXPENSES Cost of products sold 502,973 73,494 -- 576,467 Selling and administrative 58,460 1,359 -- 59,819 Management compensation 26,808 -- -- 26,808 Depreciation 29,926 4,302 579 a 34,807 Amortization of intangibles 12,317 32 907 b 13,256 Loss on sale of assets 30 677 -- 707 --------- --------- --------- --------- 630,514 79,864 1,486 711,864 --------- --------- --------- --------- OPERATING INCOME 15,470 7,480 (1,486) 21,464 Interest expense (36,313) (2,417) (1,743)c (40,473) Other income (expense) 1,779 802 -- 2,581 --------- --------- --------- --------- INCOME (LOSS) BEFORE TAXES (19,064) 5,865 (3,229) (16,428) INCOME TAXES (BENEFIT) (4,700) 1,807 (813)e (3,706) --------- --------- --------- --------- NET INCOME $ (14,364) $ 4,058 $ (2,416) $ (12,722) ========= ========= ========= =========
P-4 37 EAGLE-PICHER HOLDINGS, INC. UNAUDITED PRO FORMA CONDENSED COMBINING STATEMENTS OF INCOME (LOSS) THREE MONTHS ENDED FEBRUARY 28, 1998
REPORTED CARPENTER THREE MONTHS THREE MONTHS PRO FORMA ENDED ENDED PRO FORMA COMBINED FEBRUARY 28, 1998 DECEMBER 30, 1997 ADJUSTMENTS COMPANY ----------------- ----------------- ----------- ------- (in thousands of dollars) NET SALES $ 205,842 $ 25,217 $ -- $ 231,059 OPERATING COSTS AND EXPENSES Cost of products sold 162,796 21,241 -- 184,037 Selling and administrative 17,141 390 -- 17,531 Management compensation 2,056 -- -- 2,056 Depreciation 8,983 1,430 193 a 10,606 Amortization of intangibles 3,839 10 303 b 4,152 --------- --------- --------- --------- 194,815 23,071 496 218,382 --------- --------- --------- --------- OPERATING INCOME 11,027 2,146 (496) 12,677 Interest expense (6,940) (899) 330 c (7,509) Other income (expense) 820 255 (700)d 375 --------- --------- --------- --------- INCOME (LOSS) BEFORE TAXES 4,907 1,502 (866) 5,543 INCOME TAXES (BENEFIT) 807 568 (197)e 1,178 --------- --------- --------- --------- NET INCOME $ 4,100 $ 934 $ (669) $ 4,365 --------- --------- --------- ---------
P-5 38 EAGLE-PICHER HOLDINGS, INC. NOTES TO PRO FORMA CONDENSED COMBINING STATEMENTS OF INCOME (LOSS) For the Nine Months Ended November 30, 1998 and for the Three Months Ended February 28, 1998 (Dollars in thousands) Explanations of specific pro forma adjustments are as follows: (a) To reflect the additional depreciation due to the fair value adjustment to the Carpenter assets of $6,500. (b) To reflect the difference in the amortization of excess of acquired net assets over cost of $1,252 on an annual basis compared to Carpenter's existing goodwill amortization of $42 on an annual basis. (c) Pro forma interest expense increased $1,743 for the nine months ended November 30, 1998 and decreased $330 for the three months ended February 28, 1998 as follows:
Nine months Three months Ended Ended November 30, 1998 February 28, 1998 ----------------- ----------------- Interest associated with Carpenter's existing debt repaid at the time of closing $(1,788) $ (682) Interest expense on the Company's previous revolving credit facility - 352 Interest expense on the Company's current revolving credit facility 3,531 - ------- -------- Interest expense adjustment $ 1,743 $ (330) ======= =======
(d) To reflect a reduction in interest income on cash balances in the three months ended February 28, 1998. (e) To reflect incremental tax benefits. P-6 EX-23.1 2 EXHIBIT 23.1 1 Exhibit 23.1 Consent of Independent Auditors We consent to the use of our report dated August 14, 1998 with respect to the financial statements of Carpenter Enterprises, Limited, included in the Current Report on Form 8-K/A dated May 27, 1999, as amended, of Eagle-Picher Holdings, Inc. /s/ Ernst & Young LLP Detroit, Michigan May 27, 1999 -----END PRIVACY-ENHANCED MESSAGE-----