8-K 1 e8-k.txt M.A. HANNA COMPANY 8-K 1 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): July 31, 2000 M.A. HANNA COMPANY ------------------ (Exact name of registrant as specified in charter) Delaware 1-5222 34-0232435 -------- ------ ----------- (State or other jurisdiction (Commission File No.) (IRS Employer of incorporation) Identification No.) Suite 36-5000, 200 Public Square, Cleveland, Ohio 44114-2304 ------------------------------------------------------------ (Address of Principal Executive Offices) (Zip Code) Registrant's telephone number, including area code: (216) 589-4000 -------------- N/A ----------------------------------------------------------- (Former Name or Former Address, if Changed Since Last Report) 2 Item 2. Acquisition or Disposition of Assets On July 31, 2000, M.A. Hanna Company, a Delaware corporation (the "Company"), completed the previously announced disposition of substantially all of the assets of the Company's Cadillac Plastic ("Cadillac") business to General Electric Company, a New York corporation ("General Electric"), for $110 million in cash, subject to certain adjustments. The amount of the consideration was the result of arms-length negotiations. The Company and General Electric issued a joint press release on May 11, 2000 announcing that the Company and General Electric had entered into an acquisition agreement regarding the disposition and issued a joint press release on July 31, 2000 announcing the consummation of the disposition. Item 7. Financial Statements and Exhibits (b) Pro Forma Financial Information b. Pro Forma Financial Information The following unaudited pro forma income statement for the year ended December 31, 1999 and for the six months ended June 30, 2000 gives effect to the disposition of substantially all of the assets of the Company's Cadillac business to General Electric assuming the sale had been consummated as of January 1, 1999.
Unaudited --------------------------------------------------------------------------------------- Year Ended December 31, 1999 Six Months Ended June 30, 2000 ------------------------------------------ ------------------------------------------ (dollars in millions, except (dollars in millions, except per share data) per share data) Cadillac Adjusted Cadillac Adjusted Historical Adjustments Pro Forma Historical Adjustments Pro Forma ------------ ---------------------------- ------------ ---------------------------- Net sales $2,304.6 $ (378.2) (a) $1,926.4 $1,219.4 $ (193.8) (a) $1,025.6 Costs and expenses: Cost of goods sold 1,886.0 (303.9) (a) 1,582.1 1,008.0 (158.2) (a) 849.8 Selling and administrative 305.3 (78.3) (a) 227.5 155.6 (37.6) (a) 118.3 0.5 (b) .3 (b) Interest on debt 31.7 (2.2) (a) 24.3 16.3 (1.0) (a) 12.7 (5.2) (c) (2.6) (c) Amortization of intangibles 15.3 (1.8) (a) 13.5 7.5 (0.9) (a) 6.6 Other - net (2.3) 1.6 (a) (0.7) 45.9 .7 (a) 1.2 (45.4) (d) ------------ ------------- ----------- ------------ ------------- ----------- Total operating costs and expenses 2,236.0 (389.3) 1,846.7 1,233.3 (244.7) 988.6 ------------ ------------- ----------- ------------ ------------- ----------- Income (loss) before income taxes 68.6 (11.1) 79.7 (13.9) (50.9) 37.0 Income tax expense (benefit) 33.2 (3.4) (e) 36.6 9.2 5.3 (e) 3.9 ------------ ------------- ----------- ------------ ------------- ----------- Net income (loss) $ 35.4 $ (7.7) $ 43.1 $ (23.1) $ (56.2) $ 33.1 ============ ============= =========== ============ ============= =========== Per share - diluted $ .79 $ .96 $ (.51) $ .74 ============ =========== ============ ===========
(a) Represents the elimination of the historical operating results taken from the books and records of the Cadillac business, which is reported as a component of the Company's distribution segment, for the year ended December 31, 1999 and the six months ended June 30, 2000. The Cadillac business is a stand alone business and has its own corporate staffs including finance, information technology and human resources. Accordingly, corporate costs are not allocated to the Cadillac business. (b) Represents the historical other post retirement benefits expense included in the operating results as discussed in (a). These liabilities will be retained by the Company. (c) Represents the reduction in interest expense associated with the reduction in debt resulting from the cash received from the sale of Cadillac. (d) Represents the estimated loss on sale of the Cadillac business to General Electric. (e) Represents elimination of historical income tax expense (benefit). 3 The following unaudited pro forma balance sheet assumes the disposition of substantially all the assets of the Company's Cadillac business to General Electric, assuming the sale had been consummated as of June 30, 2000. Unaudited ------------------------------------- June 30, 2000 ------------------------------------- Cadillac Adjusted Historical Adjustments Pro Forma ---------- ----------- --------- (dollars in millions) Assets Current Assets Cash and cash equivalents $ 39.7 $ - $ 39.7 Accounts receivable 326.3 - 326.3 Inventories 205.9 - 205.9 Other 148.0 110.0 (a) 38.0 -------- ------- -------- Total current assets 719.9 (110.0) 609.9 Property, plant and equipment, net 316.4 - 316.4 Other Assets Goodwill and other intangibles 378.0 - 378.0 Investments and other 128.7 - 128.7 -------- ------- -------- Total Assets $1,543.0 $(110.0) $1,433.0 ======== ======= ======== Liabilities and Stockholders' Equity Current Liabilities Notes payable $ 6.1 $ - $ 6.1 Accounts payable and accrued liabilities 349.7 (13.9)(b) 335.8 Current portion of long-term debt 2.4 - 2.4 -------- ------- -------- Total current liabilities 358.2 (13.9) 344.3 Other liabilities 206.1 - 206.1 Long term debt 460.8 (96.1)(c) 364.7 Total stockholders' equity 517.9 - 517.9 -------- ------- -------- Total Liabilities and Stockholders' Equity $1,543.0 $(110.0) $1,433.0 ======== ======= ======== (a) Represents the historical cost of the net assets that will be sold in connection with the sale of the Company's Cadillac business to General Electric. (b) Represents the assumed payment of expenses associated with the sale of the Company's Cadillac business to General Electric. (c) Represents the assumed paydown of outstanding indebtedness with the remaining proceeds from the sale of the Company's Cadillac business to General Electric. 4 (c) Exhibits. 2.1 Acquisition Agreement, dated May 10, 2000, by and among M.A. Hanna Company, Cadillac Plastic Group, Inc., Cadillac Plastic (Canada) Inc., RA Products, Inc., General Electric Company and ABS Holding. 2.2 Acquisition Agreement Amendment, dated July 31, 2000, by and among M.A. Hanna Company, Cadillac Plastic Group, Inc., Cadillac Plastic (Canada) Inc., RA Products, Inc., General Electric Company and ABS Holding. 99.1 Press Release of M.A. Hanna Company and General Electric Company, dated May 11, 2000, announcing the execution of the definitive acquisition agreement (incorporated by reference to Exhibit 99.1 to M.A. Hanna Company's Form 8-K, dated May 10, 2000). 99.2 Press Release of M.A. Hanna Company and General Electric Company, dated July 31, 2000, announcing the consummation of the disposition. 5 SIGNATURE 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. M.A. HANNA COMPANY By: /s/ John S. Pyke, Jr. ---------------------------------- Name: John S. Pyke, Jr. Title: Vice President, General Counsel and Secretary Dated: August 14, 2000 6 EXHIBIT INDEX Exhibit No. Description ----------- ----------- 2.1 Acquisition Agreement, dated May 10, 2000, by and among M.A. Hanna Company, Cadillac Plastic Group, Inc., Cadillac Plastic (Canada) Inc., RA Products, Inc., General Electric Company and ABS Holding. 2.2 Acquisition Agreement Amendment, dated July 31, 2000, by and among M.A. Hanna Company, Cadillac Plastic Group, Inc., Cadillac Plastic (Canada) Inc., RA Products, Inc., General Electric Company and ABS Holding. 99.1 Press Release of M.A. Hanna Company and General Electric Company, dated May 11, 2000, announcing the execution of the definitive acquisition agreement (incorporated by reference to Exhibit 99.1 to M.A. Hanna Company's Form 8-K, dated May 10, 2000). 99.2 Press Release of M.A. Hanna Company and General Electric Company, dated July 31, 2000, announcing the consummation of the disposition.