-----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, I6G93dmbGnHhYAG5HxCPYXs7VPBIFmQ6XSvSl8h71CcxfGOyQPc9F9JCUI/kACYX pr3XxePw500UWhJh+PuSDA== 0000826619-97-000002.txt : 19970318 0000826619-97-000002.hdr.sgml : 19970318 ACCESSION NUMBER: 0000826619-97-000002 CONFORMED SUBMISSION TYPE: 8-K/A PUBLIC DOCUMENT COUNT: 2 CONFORMED PERIOD OF REPORT: 19961231 ITEM INFORMATION: Acquisition or disposition of assets ITEM INFORMATION: Financial statements and exhibits FILED AS OF DATE: 19970317 SROS: NASD FILER: COMPANY DATA: COMPANY CONFORMED NAME: GREEN A P INDUSTRIES INC CENTRAL INDEX KEY: 0000826619 STANDARD INDUSTRIAL CLASSIFICATION: STRUCTURAL CLAY PRODUCTS [3250] IRS NUMBER: 430899374 STATE OF INCORPORATION: DE FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 8-K/A SEC ACT: 1934 Act SEC FILE NUMBER: 000-16452 FILM NUMBER: 97557846 BUSINESS ADDRESS: STREET 1: GREEN BLVD CITY: MEXICO STATE: MO ZIP: 65265 BUSINESS PHONE: 3144733626 FORMER COMPANY: FORMER CONFORMED NAME: A P GREEN INDUSTRIES INC DATE OF NAME CHANGE: 19900619 8-K/A 1 AMENDMENT #1 SECURITIES AND EXCHANGE COMMISSION Washington, D. C. 20549 -------------------------- FORM 8-K/A Amendment No. 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): December 31, 1996 A. P. GREEN INDUSTRIES, INC. (Exact name of registrant as specified in its charter) Delaware 0-16452 43-0899374 (State or other (Commission (IRS Employer jurisdiction of File Number) Identification organization) Number) Green Boulevard Mexico, Missouri 65265 (Address of principal executive offices) (Zip Code) Registrant's telephone number, including area code: (573) 473-3626 Item 2. Acquisition or Disposition of Assets Description of Acquisition of Eastern Ridge Lime, L.P. On December 31, 1996, APG Lime Corp., a Delaware corporation and wholly-owned subsidiary of the Registrant, acquired substantially all of the assets and assumed certain of the liabilities of Eastern Ridge Lime, L. P., a Delaware limited partnership ("Eastern Ridge"). The assets included Eastern Ridge's mineral processing facility and quarrying and lime manufacturing business in Ripplemead, Virginia and a leased terminal facility in St. Matthews, South Carolina. In addition to the assumption of certain liabilities, the Registrant paid Eastern Ridge the $10,059,540 purchase price in cash, which was subject to a post-closing adjustment as set forth in the acquisition agreement. Historical and Pro Forma Financial Statements. This Current Report also contains the historical financial statements of Eastern Ridge and the unaudited pro forma financial information of the Registrant, showing the effect of the consummation of the foregoing acquisition. For a description of the historical and pro forma financial statements included herewith, see Item 7(a) and (b) of this report. Item 7. Financial Statements and Exhibits (a) Historical Financial Statements of Eastern Ridge - The following financial statements of Eastern Ridge are filed herewith pursuant to "Item 2 - Acquisition or Disposition of Assets" of this report: Independent Auditors' Report Balance Sheets, December 31, 1995 and 1994 Statements of Operations, Years Ended December 31, 1995 and 1994 Statements of Cash Flows, Years Ended December 31, 1995 and 1994 Statements of Partnership Equity (Deficit), Years Ended December 31, 1995 and 1994 Notes to Financial Statements Balance Sheet, September 30, 1996 (Unaudited) Statements of Operations, Nine Months Ended September 30, 1996 and 1995 (Unaudited) Statements of Cash Flows, Nine Months Ended September 30, 1996 and 1995 (Unaudited) -2- (b) Pro Forma Financial Information of the Registrant - The following pro forma combined financial statements of the Registrant showing the effect of the foregoing acquisition are filed herewith pursuant to "Item 2 Acquisition or Disposition of Assets" of this report: Pro Forma Combined Statement of Financial Position, September 30, 1996 (Unaudited) Pro Forma Combined Statement of Earnings for the Nine Months Ended September 30, 1996 (Unaudited) Pro Forma Combined Statement of Earnings for the Year Ended December 31, 1995 (Unaudited) Notes to Unaudited Pro Forma Combined Financial Statements (Unaudited) (c) Exhibits. See Exhibit Index. -------- -3- Financial Statements Eastern Ridge Lime, L.P. Years ended December 31, 1995 and 1994 with Report of Independent Auditors Eastern Ridge Lime, L.P. Financial Statements Years ended December 31, 1995 and 1994 CONTENTS Report of Independent Auditors............................................ 1 Financial Statements Balance Sheets............................................................ 2 Statements of Operations.................................................. 3 Statements of Cash Flows.................................................. 4 Statements of Partnership Equity (Deficit)................................ 5 Notes to Financial Statements............................................. 6 Report of Independent Auditors Board of Directors Mississippi Lime Company and Affiliates We have audited the accompanying balance sheets of Eastern Ridge Lime, L.P. as of December 31, 1995 and 1994, and the related statements of operations, cash flows, and partnership equity (deficit) for the years 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 audits. We conducted our audits 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 assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audits provide 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 Eastern Ridge Lime, L.P. at December 31, 1995 and 1994, and the results of its operations and its cash flows for the years then ended in conformity with generally accepted accounting principles. April 24, 1996, /S/ERNST & YOUNG LLP except for Note 5, as to which St. Louis, Mo. the date is October 23, 1996 1 Eastern Ridge Lime, L.P. Balance Sheets (Dollars in Thousands) DECEMBER 31 1995 1994 ------- ------- ASSETS Current assets: Cash and cash equivalents $ 458 $ 318 Trade accounts receivable 702 662 Inventories: Finished goods 303 472 Supplies 131 338 ------- ------- 434 810 Repair parts 833 816 Other current assets 75 41 Intercompany receivable - 34 ------- ------- Total current assets 2,502 2,681 Property, plant and equipment: Buildings, machinery and equipment 17,289 17,864 Land and mineral reserves 4,015 2,267 ------- ------- 21,304 20,131 Less accumulated depletion and depreciation 6,464 4,898 Less valuation allowance 7,729 - ------- ------- 7,111 15,233 Construction in progress 554 802 ------- ------- 7,665 16,035 Noncompete agreement, less accumulated amortization of $1,729 and $1,229 in 1995 and 1994, respectively, and valuation allowance of $271 in 1995 500 1,271 ------- ------- Total assets $10,667 $19,987 ======= ======= LIABILITIES AND PARTNERSHIP EQUITY Current liabilities: Accounts payable $ 1,447 $ 508 Accrued expenses 94 128 Intercompany line of credit and payable 10,743 7,658 Notes payable and accrued interest to related party 302 302 Current maturity of capital lease obligations 214 97 ------- ------- Total current liabilities 12,800 8,693 Capital lease obligations, less current maturities 772 339 Other liabilities 12 27 Partnership equity (deficit) (2,917) 10,928 ------- ------- Total liabilities and partnership equity $10,667 $19,987 ======= ======= See accompanying notes 2 Eastern Ridge Lime, L.P. Statements of Operations (Dollars in Thousands) YEAR ENDED DECEMBER 31 1995 1994 -------- ------- Net sales $ 7,107 $ 7,070 Cost of sales 11,352 10,110 -------- ------- (4,245) (3,040) Selling, administrative and general expenses 1,627 1,584 -------- ------- Operating loss (5,872) (4,624) Other income (expense): Write-down of assets held for sale (8,000) - Write-down of other assets (1,073) - Interest expense (869) (400) Other income 386 46 Other expense (78) - -------- ------- (9,634) (354) -------- ------- Net loss $(15,506) $(4,978) ======== ======= See accompanying notes. 3 Eastern Ridge Lime, L.P. Statements of Cash Flows (Dollars in Thousands) YEAR ENDED DECEMBER 31 1995 1994 -------- ------- OPERATING ACTIVITIES Net loss $(15,506) $(4,978) Adjustments to reconcile net loss to net cash used in operating activities: Depreciation and depletion 2,218 2,086 Amortization 500 500 (Gain) loss on disposal of property, plant and equipment 1,100 (21) Write-down of assets held for sale 8,000 - Changes in operating assets and liabilities: Accounts receivable (40) 588 Inventories and repair parts 359 (299) Accounts payable 939 (494) Other assets and liabilities (82) (50) -------- ------- Net cash used in operating activities (2,512) (2,668) INVESTING ACTIVITIES Purchase of property, plant and equipment (2,011) (528) Proceeds from sale of property, plant and equipment 54 206 -------- ------- Net cash used in investing activities (1,957) (322) FINANCING ACTIVITIES Net intercompany proceeds 3,119 2,665 Payment of capital lease obligations (171) (11) Proceeds from notes payable to related party - 302 Capital contributions from limited partner 1,661 - -------- ------- Net cash provided by financing activities 4,609 2,956 -------- ------- Increase (decrease) in cash and cash equivalents 140 (34) Cash and cash equivalents at beginning of year 318 352 -------- ------- Cash and cash equivalents at end of year $ 458 $ 318 ======== ======= See accompanying notes. 4 Eastern Ridge Lime, L.P. Statements of Partnership Equity (Deficit) (Dollars in Thousands) LIMITED GENERAL PARTNER PARTNER TOTAL -------- -------- -------- Balance at December 31, 1993 $ 15,975 $ (69) $ 15,906 Net loss (4,928) (50) (4,978) -------- ----- -------- Balance at December 31, 1994 11,047 (119) 10,928 Capital contributions 1,661 - 1,661 Net loss (15,351) (155) (15,506) -------- ----- -------- Balance at December 31, 1995 $ (2,643) $(274) $ (2,917) ======== ===== ======== See accompanying notes. 5 Eastern Ridge Lime, L.P. Notes to Financial Statements (Dollars in Thousands) December 31, 1995 1. BASIS OF PRESENTATION AND BUSINESS The financial statements include the accounts of Eastern Ridge Lime, L.P. (the Company), a limited partnership in which Eastern Ridge Lime, Inc. has a 1 percent general partnership interest with the remaining 99 percent limited partnership interest owned by Mississippi Lime Company. Both Eastern Ridge Lime, Inc. and Mississippi Lime Company are wholly owned by their common parent, the Harry B. Mathews, Jr. Trust for the benefit of Margaret Mathews Jenks. The Company manufactures and sells high-quality lime products primarily to customers in the paper and steel industries. Approximately 43 percent and 14 percent of the Company's tonnage sold for 1995 related to these industries, respectively. Two customers accounted for 22 percent and 14 percent, respectively, of tonnage sold in 1995. The Company has a labor agreement with the United Steel Workers of America, covering substantially all of its production workers. 2. SIGNIFICANT ACCOUNTING POLICIES CASH AND CASH EQUIVALENTS Cash and cash equivalents include demand deposits and other temporary cash investments with maturities of three months or less when purchased. INVENTORIES Inventories are valued at the lower of cost or market. Cost is determined by using average production costs for finished goods and average costs for supplies. Finished goods inventory costs include labor, supplies, and other production costs. REPAIR PARTS Repair parts are stated at cost, determined using monthly averages. Repair parts are classified as current assets in accordance with industry practice; however, certain repair parts may not be utilized within a one-year period. 6 Eastern Ridge Lime, L.P. Notes to Financial Statements (Dollars in Thousands) December 31, 1995 2. SIGNIFICANT ACCOUNTING POLICIES (CONTINUED) PROPERTY, PLANT AND EQUIPMENT Buildings, machinery, and equipment are carried at cost and include expenditures for new facilities and those which substantially increase the value or useful lives of existing assets. Maintenance and repairs are charged to expense as incurred. Depreciation is provided over the estimated useful lives of the assets on the sum-of-the-years digits and straight-line methods. Mineral reserves are depleted under the units-of-production method. MINE DEVELOPMENT COSTS Mine development for both underground and surface mines is recorded at cost. Costs incurred to develop a new or previously abandoned mine or to expand the normal capacity of operating mines are capitalized. Development costs incurred to return to or maintain existing normal production capacity and all mine exploration expenditures are charged to expense as incurred. Core or other drilling for determining feasibility or size of potential mining areas is included in exploration expenditures. Initial mapping costs of an area for future development of a new or previously abandoned mine are capitalized. Subsequent map updating is expensed as incurred. Capitalized mine development costs are amortized using the units-of-production method over the estimated life of the mine based on actual tonnage produced. NONCOMPETE AGREEMENT The noncompete agreement is being amortized using the straight-line method over the five-year term of the agreement. CONCENTRATION OF CREDIT RISK The Company manufactures and sells high-quality lime products to customers in diversified industries. The Company performs periodic credit evaluations of its customers' financial condition and generally does not require collateral. At December 31, 1995 and 1994, trade accounts receivable from customers in the paper and steel industries represented approximately 24 percent and 5 percent and 26 percent and 30 percent, respectively, of the Company's accounts receivable. 7 Eastern Ridge Lime, L.P. Notes to Financial Statements (Dollars in Thousands) December 31, 1995 2. SIGNIFICANT ACCOUNTING POLICIES (CONTINUED) USE OF ESTIMATES The preparation of the 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. 3. RELATED PARTY TRANSACTIONS The Company transacts ongoing business with its partners and certain entities that are affiliated with its partners. Related party account balances and expenses for the years ended December 31, 1995 and 1994, include: 1995 1994 ------- ------ Intercompany line of credit $10,400 $7,541 Intercompany receivables 343 117 Intercompany payables - 34 Notes payable and accrued interest to related party 302 302 Management fees 174 129 Intercompany sales - 28 Intercompany purchases 64 68 Intercompany interest expense 789 386 Interest expense to related party 27 10 Intercompany rent expense 17 39 On January 1, 1993, the Company entered into a Line of Credit Loan and Security Agreement with Mississippi Lime Company. Borrowings under the line of credit are limited to $10,400 (at December 31, 1995), are due on demand, and are secured by accounts receivable and equipment of the Company. Interest is payable monthly at prime. 8 Eastern Ridge Lime, L.P. Notes to Financial Statements (Dollars in Thousands) December 31, 1995 4. COMMITMENTS AND CONTINGENCIES LEASES The Company leases certain equipment. These leases have varying terms, and certain leases have renewal and/or purchase options. Future minimum payments under noncancelable leases with initial or remaining terms in excess of one year consist of the following at December 31, 1995: CAPITAL LEASES -------------- 1996 $ 287 1997 287 1998 336 1999 248 ------ Total minimum lease payments 1,158 Less amount representing interest 172 ------ Present value of minimum lease payments (including current portion of $214) $ 986 ====== During 1995 and 1994, the Company entered into capital lease obligations for certain equipment totaling $721 and $431, respectively. Buildings, machinery, and equipment at December 31, 1995 and 1994, include approximately $1,137 and $427 under capital leases, respectively. Accumulated depreciation and amortization for such equipment approximated $243 and $28 at December 31, 1995 and 1994, respectively. Interest expense incurred and paid for the years ended December 31, 1995 and 1994, was $869 and $400, respectively, including capital lease obligation interest expense totaling $53 and $4 in 1995 and 1994, respectively. 5. ASSET REALIZATION Subsequent to December 31, 1995, the Board of Directors of Mississippi Lime Company approved a plan to dispose of the operating assets of the Company. On October 23, 1996, Mississippi Lime Company received a letter of intent from another company for the acquisition of substantially all of the Company's operating assets. Based on the expected net proceeds from the pending sale, the Company has recorded a valuation allowance of 9 Eastern Ridge Lime, L.P. Notes to Financial Statements (Dollars in Thousands) December 31, 1995 5. ASSET REALIZATION (CONTINUED) $8,000 related to the assets held for sale. Although the sale is subject to further negotiations and Board approval, the sale is anticipated to be completed by December 31, 1996 with no significant deviation from the terms outlined in the letter of intent. 6. RETIREMENT PLANS The Company sponsors a defined contribution savings plan covering all hourly workers. Contributions by the Company are based on 50 percent of employee contributions, not to exceed 3 percent of compensation. Contributions to this plan were $37 and $35 for the years ended December 31, 1995 and 1994, respectively. 7. TAX STATUS No taxes are reflected in the Company's financial statements because profits and losses of the partnership are passed through to their respective partners according to the ownership percentage of such partners. 10 Eastern Ridge Lime, L.P. Unaudited Balance Sheet As of September 30, 1996 (Dollars in Thousands) Assets Current assets: Cash and cash equivalents $ 122 Trade accounts receivable 957 Inventories: Finished goods 431 Supplies 146 ------- 577 Repair parts 839 Other current assets 54 Intercompany receivable - ------- Total current assets 2,549 Property, plant and equipment: Buildings, machinery and equipment 17,273 Land and mineral reserves 6,235 ------- 23,508 Less accumulated depletion and depreciation 7,956 Less valuation allowance 7,729 ------- 7,823 Construction in progress - ------- 7,823 Noncompete agreement 125 ------- Total assets $10,497 ======= Liabilities and Partnership Equity Current liabilities: Accounts payable $ 1,119 Accrued expenses 214 Intercompany line of credit and payable 10,568 Notes payable and accrued interest to related party 322 Current maturity of capital lease obligations 286 ------- Total current liabilities 12,509 Capital lease obligations, less current maturities 396 Other liabilities 12 Partnership equity (deficit) (2,420) ------- Total liabilities and partnership equity $10,497 ======= Eastern Ridge Lime, L.P. Unaudited Statements of Operations (Dollars in Thousands) Nine Months ended September 30 1996 1995 ------- ------- Net sales $ 4,220 $ 5,728 Cost of sales 7,179 8,034 ------- ------- (2,959) (2,306) Selling, administrative and general expenses 751 890 ------- ------- Operating loss (3,710) (3,196) Other income (expense): Interest expense (645) (563) Write-down of other assets - (1,005) Other income 176 359 Other expense (424) (468) ------- ------- (893) (1,677) ------- ------- Net loss $(4,603) $(4,873) ======= ======= 2 Eastern Ridge Lime, L.P. Unaudited Statements of Cash Flows (Dollars in Thousands) Nine Months Ended September 30, 1996 1995 ------- ------- Operating activities Net loss $(4,603) $(4,873) Adjustments to reconcile net loss to net cash used in operating activities: Depreciation and depletion 1,734 1,580 Amortization 375 375 Changes in operating assets and liabilities: Accounts receivable (254) (53) Inventories and repair parts (149) 497 Accounts payable (328) (24) Other assets and liabilities (430) 753 ------- ------- Net cash used in operating activities (3,655) (1,745) Investing activities Purchase of property, plant and equipment (1,893) (1,305) ------- ------- Net cash used in investing activities (1,893) (1,305) Financing activities Net intercompany proceeds 112 2,987 Capital contributions from limited partner 5,100 - ------- ------- Net cash provided by financing activities 5,212 2,987 ------- ------- Decrease in cash and cash equivalents (336) (63) Cash and cash equivalents at beginning of period 458 318 ------- ------- Cash and cash equivalents at end of period $ 122 $ 255 ======= ======= 3 A. P. Green Industries, Inc. Unaudited Pro Forma Combined Statement of Financial Position As of September 30, 1996
Eastern Total (Dollars in thousands) A. P. Green Ridge Historical Adjustments Notes Pro Forma - ---------------------- ----------- ------- ---------- ----------- ----- --------- Cash and cash equivalents $ 5,464 $ 122 $ 5,586 $ (122) (a) $ 4,404 (1,060) (b) Receivables, net of allowances 40,837 957 41,794 366 (a) 42,160 Inventories 52,217 1,416 53,633 (301) (a) 53,332 Other current assets 14,748 54 14,802 (51) (a) 14,751 Property, plant and equipment, net 98,418 7,823 106,241 441 (a) 106,740 58 (c) Projected insurance recovery on asbestos claims 117,944 - 117,944 - 117,944 Other long-term assets 18,519 125 18,644 (125) (a) 18,567 48 (c) -------- ------- -------- -------- -------- Total assets $348,147 $10,497 $358,644 $ (746) $357,898 ======== ======= ======== ======== ======== Intercompany and related party accounts and notes $ - $10,890 $ 10,890 $(10,890) (a) $ - Other current liabilities 37,884 1,619 39,503 (1,138) (a) 38,365 Projected asbestos claims 119,283 - 119,283 - 119,283 Other long-term liabilities 71,461 408 71,869 (138) (a) 80,731 9,000 (b) -------- ------- -------- -------- -------- Total liabilities 228,628 12,917 241,545 (3,166) 238,379 Minority interests 1,502 - 1,502 - 1,502 Partnership deficit - (2,420) (2,420) 2,420 (a) - Common stock 8,975 - 8,975 - 8,975 Additional paid-in capital 68,309 - 68,309 - 68,309 Retained earnings 61,030 - 61,030 - 61,030 Other stockholders' equity (20,297) - (20,297) - (20,297) -------- ------- -------- -------- -------- Total liabilities and stockholders' equity $348,147 $10,497 $358,644 $ (746) $357,898 ======== ======= ======== ======== ======== Notes to Unaudited Pro Forma Combined Statements (a) Elimination of assets not purchased and liabilities not assumed, and adjustment to reflect asset and liability values at December 31, 1996. (b) A cash payment of $10,059,540 was made on the date of acquisition, funded by approximately $1.1 million of cash from operations and $9.0 million borrowed against the long-term line of credit. (c) Adjustment of fixed assets and non-compete agreement to fair market value at December 31, 1996.
1 A. P. Green Industries, Inc. Unaudited Pro Forma Combined Statements of Earnings For the Nine Months Ended September 30, 1996
Eastern Total (Dollars in thousands, except per share data) A. P. Green Ridge Historical Adjustments Notes Pro Forma - --------------------------------------------- ----------- ------- ---------- ----------- ----- --------- Net sales $195,720 $ 4,220 $199,940 $ -- $199,940 Cost of sales 161,927 7,179 169,106 (1,209) (d) 167,897 -------- ------- -------- ------- -------- Gross profit 33,793 (2,959) 30,834 1,209 32,043 Selling and administrative expenses 26,599 751 27,350 (126) (e) 27,224 Interest expense 2,343 645 2,988 21 (f) 3,009 Interest income (885) (27) (912) (912) Other income, net (667) 275 (392) (392) -------- ------- -------- ------- -------- Earnings before income taxes 6,403 (4,603) 1,800 1,314 3,114 Income tax expense (benefit) 2,307 2,307 (1,118) (h) 1,189 Other, net (816) (816) (816) -------- ------- -------- ------- -------- Net earnings $ 4,912 $(4,603) $ 309 $ 2,432 $ 2,741 ======== ======= ======== ======= ======== Net earnings per common share $ 0.61 $ (0.57) $ 0.04 $ 0.30 $ 0.34 ======== ======= ======== ======= ======== Notes to Unaudited Pro Forma Combined Statements (d) Adjustment of depreciation, depletion and amortization expense toreflect revised asset values and lives subsequent to the acquisition. (e) Elimination of management service fee paid to Mississippi Lime Company by Eastern Ridge. No such fee will be charged by A. P. Green. (f) Elimination of interest expense related to intercompany debt to Mississippi Lime Company, offset by interest expense on the $9.0 million borrowed to finance the acquisition at a 7.4% interest rate. The interest rate used equals the current interest rate on the Company's line of credit as of December 31, 1996. (h) Income tax expense (benefit) is calculated using a 34% statutory rate. Eastern Ridge Lime was organized as a partnership prior to the acquisition and, as such, had no direct income tax expense (benefit). A. P. Green Industries, Inc. Unaudited Pro Forma Combined Statements of Earnings For the Year Ended December 31, 1995 Eastern Total (Dollars in thousands, except per share data) A. P. Green Ridge Historical Adjustments Notes Pro Forma - --------------------------------------------- ----------- -------- ---------- ----------- ----- --------- Net sales $249,715 $ 7,107 $256,822 $ -- $256,822 Cost of sales 208,309 11,352 219,661 (1,517) (d) 218,144 -------- -------- -------- ------- -------- Gross profit 41,406 (4,245) 37,161 1,517 38,678 Selling and administrative expenses 31,312 1,627 32,939 (191) (e) 32,748 Interest expense 3,190 869 4,059 (150) (f) 3,909 Interest income (1,513) (1,513) (1,513) Other income, net (1,948) 8,765 6,817 (8,000) (g) (1,183) -------- -------- -------- ------- -------- Earnings before income taxes 10,365 (15,506) (5,141) 9,858 4,717 Income tax expense (benefit) 2,182 2,182 (1,920) (h) 262 Other, net (617) (617) (617) -------- -------- -------- ------- -------- Net earnings $ 8,800 $(15,506) $ (6,706) $11,778 $ 5,072 ======== ======== ======== ======= ======== Net earnings per common share $ 1.09 $ (1.92) $ (0.83) $ 1.46 $ 0.63 ======== ======== ======== ======= ======== Notes to Unaudited Pro Forma Combined Statements (d) Adjustment of depreciation, depletion and amortization expense toreflect revised asset values and lives subsequent to the acquisition. (e) Elimination of management service fee paid to Mississippi Lime Company by Eastern Ridge. No such fee will be charged by A. P. Green. (f) Elimination of interest expense related to intercompany debt to Mississippi Lime Company, offset by interest expense on the $9.0 million borrowed to finance the acquisition at a 7.4% interest rate. The interest rate used equals the current interest rate on the Company's line of credit as of December 31, 1996. (g) In anticipation of the acquisition, Eastern Ridge adjusted the values of long-term assets to fair value as of December 31, 1995. As this adjustment was directly attributable to the acquisition by A. P. Green, it is eliminated for purposes of these pro forma statements as the decline in value would have been recognized by Eastern Ridge prior to the date of acquisition. (h) Income tax expense (benefit) is calculated using a 34% statutory rate. Eastern Ridge Lime was organized as a partnership prior to the acquisition and, as such, had no direct income tax expense (benefit).
2 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. Dated: March 17, 1997 A. P. GREEN INDUSTRIES, INC. By: /s/ Michael B. Cooney ----------------------------------- Michael B. Cooney, Senior Vice President and Secretary EXHIBIT INDEX Exhibit Number Description - ------- ----------- 2.1 Asset Acquisition Agreement dated December 27, 1996, by and among APG Lime Corp., a Delaware corporation, Eastern Ridge Lime L.P., a Delaware limited partnership and Eastern Ridge Lime, Inc., a Delaware corporation, is incorporated herein by reference to A. P. Green's Current Report on Form 8-K dated January 13, 1997. 23 Consent of Ernst & Young LLP EX-23 2 CONSENT OF ERNST & YOUNG LLP We consent to the use of our report dated April 24, 1996, except for Note 5, as to which the date is October 23, 1996, with respect to the financial statements of Eastern Ridge Lime, L.P. included in the current report on Form 8-K dated March 17, 1997 of A.P. Green Industries, Inc. and incorporated by reference in Registration Statements (Nos. 33-21012, 33-38323 and 33-35475) on Form S-8 of A.P. Green Industries, Inc. St. Louis, Missouri March 14, 1997 /s/Ernst & Young LLP -----END PRIVACY-ENHANCED MESSAGE-----