-----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, HRgtg0PXWS6JOPYnNruZhYpvX6eu9f1jk/f+VxEYaB+Wl+5tW1L4xQF2fN2Fc5Nf h6uPv6sQls4zEy7MCdCHjQ== 0000850429-98-000016.txt : 19980820 0000850429-98-000016.hdr.sgml : 19980820 ACCESSION NUMBER: 0000850429-98-000016 CONFORMED SUBMISSION TYPE: 8-K/A PUBLIC DOCUMENT COUNT: 1 CONFORMED PERIOD OF REPORT: 19980611 ITEM INFORMATION: FILED AS OF DATE: 19980819 SROS: NYSE FILER: COMPANY DATA: COMPANY CONFORMED NAME: TREDEGAR INDUSTRIES INC CENTRAL INDEX KEY: 0000850429 STANDARD INDUSTRIAL CLASSIFICATION: UNSUPPORTED PLASTICS FILM & SHEET [3081] IRS NUMBER: 541497771 STATE OF INCORPORATION: VA FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 8-K/A SEC ACT: SEC FILE NUMBER: 001-10258 FILM NUMBER: 98694337 BUSINESS ADDRESS: STREET 1: 1100 BOULDERS PKWY CITY: RICHMOND STATE: VA ZIP: 23225 BUSINESS PHONE: 8043301075 8-K/A 1 CURRENT REPORT SECURITIES AND EXCHANGE COMMISSION WASHINGTON, DC 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): June 11, 1998 Tredegar Industries, Inc. - -------------------------------------------------------------------------------- (Exact Name of Registrant as Specified in its Charter) Virginia 1-10258 54-1497771 - --------------------------------- --------------------- ------------------------ (State or Other Jurisdiction of (Commission File (I.R.S. Employer Incorporation or Organization) Number) Identification No.) 1100 Boulders Parkway Richmond, Virginia 23225 - --------------------------------------------- ------------------------------ (Address of Principal Executive Offices) (Zip Code) Registrant's telephone number, including area code: (804) 330-1000 Item 7 of the Current Report on Form 8-K dated June 23, 1998, filed by Tredegar Industries, Inc. ("Tredegar") on June 26, 1998, is hereby amended as set forth below. Item 7. Financial Statements, Pro Forma Financial Information and Exhibits. (a) Financial Statements of Business Acquired. Financial statements of businesses acquired are not required to be filed by Item 7. (b) Pro Forma Financial Information. Set forth below are certain selected historical and pro forma consolidated financial information with respect to recent acquisitions by Tredegar. Historical financial information was excerpted or derived from the audited financial statements contained in Tredegar's Annual Report on Form 10-K for the year ended December 31, 1997, and the unaudited financial statements contained in the Tredegar's Quarterly Report on Form 10-Q for the quarter ended June 30, 1998. The historical information below is qualified in its entirety by reference to such reports and the information contained therein. On June 11, 1998, Tredegar acquired Canada-based Exal Aluminum Inc. ("Exal"). Exal operates two aluminum extrusion plants in Pickering, Ontario and Aurora, Ontario. Both facilities manufacture extrusions for distribution, transportation, electrical, machinery and equipment, and building and construction markets. The Pickering facility also produces aluminum logs and billet for internal use and for sale to customers. On February 6, 1998, Tredegar acquired two Canada-based aluminum extrusion and fabrication plants ("ReyCan") from Reynolds Metals Company ("Reynolds"). The plants are located in Ste-Therese, Quebec, and Richmond Hill, Ontario. Both facilities manufacture products used primarily in building and construction, transportation, electrical, machinery and equipment, and consumer durables markets. On May 30, 1997, Tredegar acquired an aluminum extrusion and fabrication plant in El Campo, Texas, from Reynolds. The El Campo facility extrudes and fabricates products used primarily in transportation, electrical and consumer durables markets. These acquisitions were accounted for using the purchase method. The operating results and financial position of the five plants have been included in Tredegar's consolidated financial statements since the dates acquired. The pro forma information for the six months ended June 30, 1998, and the year ended December 31, 1997, assumes that, at the beginning of 1997, Tredegar made these acquisitions by using available cash and cash equivalents of $75.5 million and by issuing Class I Shares of Tredegar's Bon L Canada subsidiary valued at $11.2 million (see Note (1) on page 4). Excluded from the pro forma results are cost savings and efficiencies expected from the consolidation of aluminum extrusion operations. Accordingly, the pro forma financial information does not purport to be indicative of the future results or the financial position of Tredegar or the net income and financial position that would actually have been attained had the pro forma transactions occurred on the dates or for the periods indicated. The pro forma financial information is unaudited. 2 Tredegar Industries, Inc. Selected Historical and Pro Forma Financial Information (In Thousands) (Unaudited)
Six Months Ended June 30, 1998 ---------------------------------------------------------------------- Pro Forma Adjustments (1) -------------------------------------- Historical for Purchase Preacquisition Periods Account- ----------------------- ing and ReyCan Exal Other Tredegar Tredegar 1/1/98 to 1/1/98 to Adjust- Pro Historical 2/6/98 6/11/98 ments Forma Results of Operations Revenues: Net sales $ 326,606 $ 5,022 $ 43,179 $ (2,402)(2) $ 372,405 Other income (expense), net 3,301 - - (872)(3) 2,429 ---------- --------- --------- --------- ---------- Total 329,907 5,022 43,179 (3,274) 374,834 ---------- --------- --------- --------- ---------- Costs and expenses: Cost of goods sold 257,571 5,122 39,385 685 (1) 300,361 (2,402)(2) Selling, general and administrative 18,976 199 1,341 (61)(4) 20,455 Research and development 6,947 - - - 6,947 Interest 686 - 742 (742)(3) 686 Unusual items (765) - - - (765) ---------- --------- --------- --------- ---------- Total 283,415 5,321 41,468 (2,520) 327,684 ---------- --------- --------- --------- ---------- Income (loss) before income taxes 46,492 (299) 1,711 (754) 47,150 Income taxes 14,035 (108) 616 (140)(5) 14,403 ---------- --------- --------- --------- ---------- Net income (loss) $ 32,457 $ (191) $ 1,095 $ (614) $ 32,747 ========== ========= ========= ========= ========== Earnings per share: Basic $ .90 $ .90 Diluted .84 .84 Shares used to compute earnings per share: Basic 36,150 340 (1) 36,490 Diluted 38,788 340 (1) 39,128 Other Financial Data Excluding Unusual Items and Technology- Related Investment Activities (6) EBIT $ 42,947 $ (299) $ 2,453 $ (624) $ 44,477 EBITDA 53,366 (223) 2,923 61 56,127 Depreciation 10,385 76 470 541 (1) 11,472 Amortization of intangibles 34 - - 144 (1) 178 Capital expenditures 13,604 36 317 - 13,957 Net income (loss) 28,588 (191) 1,095 (614) 28,878 Diluted earnings per share .74 .74 See accompanying notes to pro forma financial information.
Year Ended December 31, 1997 ------------------------------------------------------------------------------------- Pro Forma Adjustments (1) ------------------------------------------------------ Historical for Purchase Preacquisition Periods Account- ------------------------ ing and El Campo ReyCan Exal Other Tredegar Tredegar 1/1/97 to 1/1/97 to 1/1/97 to Adjust- Pro Historical 5/30/97 12/31/97 12/31/97 ments Forma Results of Operations Revenues: Net Sales $ 581,004 $ 18,121 $ 54,715 $ 93,934 $ (4,548)(2) $ 743,226 Other income (expense), net 17,015 - - - (2,835)(3) 14,180 ---------- -------- -------- --------- --------- ---------- Total 598,019 18,121 54,715 93,934 (7,383) 757,406 ---------- -------- -------- --------- --------- ---------- Costs and expenses: Cost of goods sold 457,946 17,915 50,254 85,647 2,203 (1) 609,417 (4,548)(2) Selling, general and administrative 37,035 595 2,419 3,041 (144)(4) 42,946 Research and development 13,170 - - - - 13,170 Interest 1,952 - - 1,740 (1,740)(3) 1,952 Unusual items (2,250) - - - - (2,250) ---------- -------- -------- --------- --------- ---------- Total 507,853 18,510 52,673 90,428 (4,229) 665,235 ---------- -------- -------- --------- --------- ---------- Income (loss) before income taxes 90,166 (389) 2,042 3,506 (3,154) 92,171 Income taxes 31,720 (140) 735 1,262 (341)(5) 33,236 ---------- -------- -------- --------- --------- ---------- Net income (loss) $ 58,446 $ (249) $ 1,307 $ 2,244 $ (2,813) $ 58,935 ========== ======== ======== ========= ========= ========== Earnings per share: Basic $ 1.59 $ 1.58 Diluted 1.48 1.48 Shares used to compute earnings per share Basic 36,864 380 (1) 37,244 Diluted 39,534 380 (1) 39,914 Other Financial Data Excluding Unusual Items and Technology- Related Investment Activities (6) EBIT $ 71,029 $ (389) $ 2,042 $ 5,246 $ (2,059) $ 75,869 EBITDA 89,443 (30) 2,979 6,345 144 98,881 Depreciation 18,364 359 937 1,099 1,876 (1) 22,635 Amortization of intangibles 50 - - - 327 (1) 377 Capital expenditures 22,655 72 477 355 - 23,559 Net income (loss) 48,124 (249) 1,307 2,244 (2,813) 48,613 Diluted earnings per share 1.22 1.22
See accompanying notes to pro forma financial information. 3 Notes to Pro Forma Financial Information (1) Set forth below are the net assets of the operations acquired and the capital used by Tredegar to fund the acquisitions: Tredegar Industries, Inc. Net Assets of Operations Acquired and Capital Used by Tredegar to Fund Acquisitions (In Thousands Except Share Information) (Unaudited)
Historical Basis at Combined Dates Acquired Purchase Combined ----------------------------- Accounting Value at El Campo ReyCan Exal Adjust- Dates 5/30/97 2/6/98 6/11/98 ments Acquired Net Assets of Operations Acquired Cash and cash equivalents $ - $ - $ 1,097 $ - $ 1,097 Accounts and notes receivable 6,659 7,178 14,622 - 28,459 Inventories 3,344 5,731 5,038 127 14,240 Prepaid expenses and other assets 1 160 482 (456) 187 Net property, plant and equipment 3,842 7,304 15,329 27,134 53,609 Prepaid pension assets - 3,115 - 178 3,293 Goodwill and other intangibles - - - 13,071 13,071 Accounts payable, accrued expenses and other liabilities (3,476) (4,799) (11,294) (879) (20,448) Deferred income taxes, net - - (1,702) (5,138) (6,840) --------- --------- --------- --------- ---------- Net assets of operations acquired $ 10,370 $ 18,689 $ 23,572 $ 34,037 $ 86,668 ========= ========= ========= ========= ========== Capital Used by Tredegar to Fund Acquisitions Cash used to: Pay sellers $ 12,702 $ 28,343 $ 12,297 $ 53,342 Repay debt assumed - - 18,811 18,811 Pay transaction costs 767 750 1,779 3,296 Issuance of 380,172 Class I Shares to sellers (economically equivalent to shares of Tredegar common stock) - - 11,219 11,219 --------- --------- --------- ---------- Total capital used to fund acquisi- tions $ 13,469 $ 29,093 $ 44,106 $ 86,668 ========= ========= ========= ==========
In connection with the acquisition of Exal, 380,172 shares of Class I non-voting preferred shares of Tredegar's Bon L Canada subsidiary were issued to Exal's former shareholders (the "Class I Shares"). The Class I Shares are exchangeable into shares of Tredegar common stock on a one-for-one basis. Each Class I Share is economically equivalent to one share of Tredegar common stock and accordingly accounted for in the same manner. 4 The combined purchase accounting adjustments reflect the revaluation of the historical basis of identifiable net assets acquired to estimated fair value and the recognition of deferred income taxes for differences between the financial reporting and tax basis of related net assets. The revaluation of property, plant and equipment is being depreciated over the estimated remaining useful lives of related assets. No goodwill arose from the acquisitions of the former Reynolds plants since the estimated fair value of the identifiable net assets acquired equaled the purchase price. Goodwill (the excess of the purchase price over the estimated fair value of identifiable net assets acquired) of $13 million was recorded on the acquisition of Exal and is being amortized on a straight-line basis over 40 years. (2) The pro forma adjustments to net sales and cost of goods sold reflect the sale of aluminum logs and billet by Exal to ReyCan during the preacquisition periods. Related intercompany profit in inventory is immaterial. (3) The pro forma adjustments to "Other income (expense), net" relate to interest income removed from the results of operations due to the assumed use of cash and cash equivalents at the beginning of the period to fund the acquisitions. Information used to compute the pro forma interest income adjustments are as follows:
(Dollars In Thousands) Pro Forma Preacquisition Periods ----------------------------------------------------------------------- ReyCan Exal El Campo ReyCan Exal 1/1/98 to 1/1/98 to 1/1/97 to 1/1/97 to 1/1/97 to 2/6/98 6/11/98 5/30/97 12/31/97 12/31/97 Pro forma average cash outflows related to acquisitions $ 29,093 $ 32,900 $ 13,469 $ 29,093 $ 32,909 Average annualized interest rates used for computing pro forma interest income adjustments: Actual yield 5.10% 5.00% 4.20% 4.20% 4.20% Tax-equivalent yield 5.70% 5.70% 5.70% 5.70% 5.70% Average actual interest yield earned for pro forma preacquisition period .50% 2.21% 1.71% 4.20% 4.20% Pro forma interest income removed $ 146 $ 726 $ 231 $ 1,222 $ 1,382
Pro forma average cash outflows include average dividends applicable to the Bon L Canada Class I Shares issued in connection with the Exal acquisition. Exal's interest expense has been eliminated on a pro forma basis since its debt was paid-off by Tredegar with available cash on the acquisition date. (4) The pro forma adjustment to selling, general and administrative expenses represents management fees paid pursuant to agreements with two companies related to former shareholders of Exal that were terminated at the acquisition date. 5 (5) The pro forma income tax benefit related to purchase accounting and other adjustments was computed as follows:
(In Thousands) For the Six For the Months Year Ended Ended 6/30/98 12/31/97 Pro forma impact on income before income taxes of purchase accounting and other adjustments $ (754) $ (3,154) Related pro forma permanent differences: Goodwill amortization 144 327 Tax-exempt interest income removed 221 1,880 --------- -------- Pro forma impact on book taxable income of purchase accounting and other adjustments $ (389) $ (947) --------- -------- Related pro forma income tax benefit at 36% $ (140) $ (341) --------- --------
(6) Other financial data, excluding unusual items and technology-related investment activities affecting the comparability of historical and pro forma operating results, has been presented and computed in a manner consistent with selected financial information included in Tredegar's Annual Report on Form 10-K for the year ended December 31, 1997, and the unaudited financial statements contained in the Tredegar's Quarterly Report on Form 10-Q for the quarter ended June 30, 1998. (c) Exhibits. None. 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 hereunto duly authorized. TREDEGAR INDUSTRIES, INC. Date: August 19, 1998 By: /s/ N. A. Scher ---------------------------- ---------------------------- Norman A. Scher Executive Vice President 7 -----END PRIVACY-ENHANCED MESSAGE-----