-----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, HaG+naDTE0X4tlYscduYCKjoqYV/RvNmreqESqvNhKYOLk5n6wx/QhVpmShrBz1P QhNdaN80Q71TBGTclUoZig== 0000950136-02-000856.txt : 20020415 0000950136-02-000856.hdr.sgml : 20020415 ACCESSION NUMBER: 0000950136-02-000856 CONFORMED SUBMISSION TYPE: 8-K PUBLIC DOCUMENT COUNT: 3 CONFORMED PERIOD OF REPORT: 20020328 ITEM INFORMATION: Other events ITEM INFORMATION: FILED AS OF DATE: 20020328 FILER: COMPANY DATA: COMPANY CONFORMED NAME: ALLTRISTA CORP CENTRAL INDEX KEY: 0000895655 STANDARD INDUSTRIAL CLASSIFICATION: PLASTICS PRODUCTS, NEC [3089] IRS NUMBER: 351828377 STATE OF INCORPORATION: IN FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 8-K SEC ACT: 1934 Act SEC FILE NUMBER: 001-13665 FILM NUMBER: 02589725 BUSINESS ADDRESS: STREET 1: 5875 CASTLE CREEK PARKWAY, NORTH DRIVE STREET 2: SUITE 440 CITY: INDIANAPOLIS STATE: IN ZIP: 46250-4330 BUSINESS PHONE: 3175775000 MAIL ADDRESS: STREET 1: 5875 CASTLE CREEK PARKWAY, NORTH DRIVE STREET 2: SUITE 440 CITY: INDIANAPOLIS STATE: IN ZIP: 46250-4330 8-K 1 file001.txt FORM 8-K UNITED STATES 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) March 28, 2002 -------------- ALLTRISTA CORPORATION --------------------------------------------------------- (Exact name of registrant as specified in its charter) Delaware 0-21052 35-1828377 (State or other (Commission File Number) (IRS Employer Jurisdiction of Identification Number) Incorporation) 555 THEODORE FREMD AVENUE, SUITE B302, RYE, NEW YORK 10580 ---------------------------------------------------------------------- (Address of principal executive offices) (Zip Code) Registrant's Telephone Number, including area code: (914) 967 9426 ---------------------------------------------------------------------- (Former name or former address, if changed since last report) Item 5. Other Events. On March 27, 2002, the Registrant signed a definitive agreement to purchase substantially all of the assets and assume substantially all of the liabilities of Tilia International, Inc. ("Tilia") upon the satisfaction of certain closing conditions (the "Acquisition"). A copy of the press release announcing the signing of the agreement is attached as Exhibit 99.1 to this Form 8-K and is incorporated by reference herein. Item 9. Regulation FD Disclosure The Registrant is conducting a $150 million senior subordinated note offering to finance a portion of the purchase price in connection with the Acquisition. The offering will be a private placement under Rule 144A and Regulation S under the Securities Act of 1933 and will be made only to qualified institutional buyers or outside the United States. Included in the preliminary offering memorandum for the private placement are the Registrant's Unaudited Pro Forma Condensed Consolidated Financial Statements, which are attached as Exhibit 99.2 to this Form 8-K and are incorporated by reference herein. The Unaudited Pro Forma Condensed Consolidated Financial Statements have not been previously disclosed. In addition, included in the preliminary offering memorandum for the private placement is the following information, which has not been previously publicly disclosed. TILIA'S RESULTS OF OPERATIONS COMPARISON OF 2001 WITH 2000 Net sales for the year ended December 31, 2001 were $183.8 million, an increase of approximately $51.7 million, or 39.2%, compared to net sales of $132.1 million in the year ended December 31, 2000. This increase was primarily attributable to growth in retail revenue, which increased by $51.2 million to $138.1 million, while direct-to-consumer revenue was essentially flat at $45.7 million. The increase in retail revenue is primarily attributable to increases at national accounts, including Costco, Sam's Club, Sears, Target and Wal-Mart. Gross profit in fiscal 2001 was $94.2 million, or 51.2% of net sales, compared to $72.2 million, or 54.7% of net sales, in fiscal 2000. The decline in gross margin was due in part to a change in sales channel mix with more sales being derived from sales to retailers compared to direct-to-consumer sales, as well as price adjustments effected in 2000 and 2001. Operating expenses were 33.8% of net sales, or $62.2 million in fiscal 2001, compared to 36.3% of net sales, or $48.0 million in fiscal 2000. Expenditures for infomercial media advertising and associated costs during fiscal 2001 were $24.0 million, compared to $20.9 million in fiscal 2000. COMPARISON OF 2000 WITH 1999 Net sales for fiscal 2000 were $132.1 million, an increase of approximately $52.1 million, or 65.1%, compared to net sales of $80.0 million in the year ended December 31, 1999. This increase was primarily attributable to growth in retail revenue, which increased by $47.1 million to $86.9 million. The increase at retail is attributable to sales to new customers as well as increased sales to existing customers. Gross profit in 2000 was $72.2 million, an increase of $24.9 million, or 52.5%, from $47.3 million in 1999. Gross margin in 2000 was 54.7%, compared to 59.2% in fiscal 1999. The decline in the gross profit margin was due in part to a change in sales channel mix. The retail sales channel, which offers wholesale pricing to retailers, was responsible for 65.7% of net sales in 2000, up from 49.8% of net sales in 1999. Direct-to-consumer sales, which are at list price to consumers, and therefore at higher margins, had a corresponding decline in percentage sales mix. Operating expenses in 2000 were $48.0 million, up $19.1 million, or 66.1%, from $28.9 million in 1999. As a percentage of net sales, operating expenses were 36.3% in 2000 compared to 36.1% in 1999. Expenditures for infomercial media advertising and associated costs during 2000 were $20.9 million, compared to $14.1 million in 1999. The increase was primarily due to increased infomercial media advertising costs and product development costs. PRO FORMA COMBINED FINANCIAL CONDITION, LIQUIDITY AND CAPITAL RESOURCES Upon consummation of the Acquisition and the related financing transactions, the Registrant's primary sources of liquidity will be cash flow from operations and borrowings under our new senior credit facility. Under the new senior credit facility, on a pro forma basis as of December 31, 2001, $50.0 million of term borrowings and no revolving credit borrowings would have been outstanding and revolver and swing short-term availability therefore would have been approximately $50.0 million. As of March 3, 2002, the Registrant's borrowings under its existing credit facility were $10.2 million lower than at December 31, 2001 due to receipt of $15.7 million of the Tax Refunds, offset in part by additional working capital borrowings. Due to seasonality, the Registrant expects increases in working capital through the end of the second quarter of 2002 and to start to repay short term debt in the third quarter of 2002. Borrowings under the Registrant's new senior credit facility will bear interest at a rate equal to LIBOR plus an applicable margin or an alternate base rate equal to the higher of (a) the Bank of America prime rate and (b) the federal funds rate plus .50%, plus, in each case, an applicable margin. Applicable margins will be determined based on the Registrant's total leverage ratio. The new senior credit facility will contain customary affirmative and negative covenants, including, but not limited to, limitations on liens and negative pledges, limitations on mergers, consolidations and sales of assets, limitations on incurrence of debt (including the notes being offered hereby), limitations on dividends, stock redemptions and the redemption and/or prepayment of other debt, limitations on investments and acquisitions, limitations on capital expenditures, limitations on payment of earnouts in cash in connection with the Acquisition, limitations on leases, limitations on burdensome agreements, limitation on transactions with affiliates, and limitations on asset ownership by foreign subsidiaries exceeding more than 10% of our consolidated total assets. In addition, the new senior credit facility will contain financial covenants, including obligations to maintain a minimum net worth, a maximum total leverage ratio, a maximum senior leverage ratio, and a minimum fixed charge coverage ratio. In connection with the Acquisition, the Company will issue subordinated seller notes in the aggregate principal amount of $15.0 million, of which $10.0 million in principal amount will mature in 2003 and will not bear interest and $5.0 million in principal amount will mature in 2005 and will bear interest at a rate equal to the effective interest rate on the Company's new senior credit facility, compounding annually and payable at maturity. On a pro forma basis, the Company's capital expenditures were $8.7 million in 2001 and are largely related to maintaining facilities and improving manufacturing efficiencies. The Registrant believes that existing funds, cash generated from operations and our new senior credit facility will be adequate to satisfy our working capital and capital expenditure requirements for the foreseeable future. RECENT DEVELOPMENTS The Registrant expects that the pro forma net sales and operating income of its consumer products segment for the three months ending March 31, 2002 will be lower than in the corresponding quarter for the previous year, as a result of the planned movement in sales of FoodSaver (Registered Trademark) machines from infomercial sales to retail sales which are typically more concentrated in the fourth quarter of the year. This reduction due to a shift in business mix was partially offset by continuing strong out-of-season demand for home canning products and manufacturing cost savings from the reorganization of the Registrant's Canadian operations in the second half of 2001. TILIA'S BUSINESS Tilia provides patented vacuum packaging systems for household use marketed under the FoodSaver (Registered Trademark) brand. Our seven models of compact, patented counter-top FoodSaver (Registered Trademark) appliances incorporate a vacuum pump and bag sealer to keep foods fresh and are sold at prices ranging from approximately $100 to almost $300. Tilia markets its FoodSaver (Registered Trademark) appliances in tandem with its patented FoodSaver (Registered Trademark) bags and rolls and complementary accessories, including canisters, containers, lids, jar sealers and bottle stoppers. CUSTOMERS Tilia's customers are comprised of national and regional retail chains as well as individual consumers who purchase Tilia's products through direct-to-consumer channels. Its principal retail customers include warehouse clubs, such as Costco and Sam's Club, mass merchants, such as Wal-Mart and Target, department stores, such as Sears and Kohl's, and specialty retailers, such as Lowe's Companies, Inc. In addition, Tilia recently began selling to sporting goods and outdoor stores. Tilia's direct-to-consumer sales have primarily been made through infomercials and catalogs. Tilia contracts with an outside telemarketing company to answer calls on Tilia's toll-free customer care hotline, providing information on food storage, responding to general customer inquiries, and taking orders for additional bags and accessories. SALES AND MARKETING Tilia has an in-house retail sales force that establishes and maintains relationships with mass merchants, warehouse clubs, department stores, specialty stores, sporting goods stores, and other retail chains. Tilia also utilizes manufacturer representative organizations targeting the sporting goods and outdoor segment to help develop and build this distribution channel. Tilia implements its marketing strategy to build brand awareness and drive sales through programs built around in-store demonstrations, infomercials, point-of-purchase displays and traditional public relations and print advertising campaigns. Tilia also has a website through which consumers are able to place orders, and Tilia markets its products in a variety of catalogs, including specialty cooking magazines such as Chef's Catalog. Tilia's products are also sold through prominent retail websites such as Amazon.com and Cooking.com. DISTRIBUTION AND FULFILLMENT FoodSaver (Registered Trademark) appliances, bags and accessories are received separately from various manufacturing partners and are packaged by Tilia for retail and individual customers at company-operated and third-party facilities in California. MANUFACTURING Tilia has established an efficient, cost-effective, outsourced manufacturing network of suppliers. Appliances are currently sourced through three facilities in China; bags and rolls are currently sourced through suppliers in Korea and the United States; and accessories are sourced from Taiwan, China and the United States. Tilia's own research and development department designs and engineers products in the United States and sets strict engineering specifications for the third-party manufacturers. Tilia maintains ownership over all necessary production molds and believes it has excellent relationships with each of its suppliers. INTELLECTUAL PROPERTY Tilia holds patents throughout most primary worldwide markets on both the design of the FoodSaver (Registered Trademark) appliance itself as well as on many of its components. Our patent on the FoodSaver (Registered Trademark) vacuum seal appliance expires in 2009, and our patent on FoodSaver (Registered Trademark) bags expires in 2005. The key elements of the bag are a unique waffle pattern that facilitates air removal, an oxygen barrier layer that prevents air from entering the bag and a heat resistant outer layer to allow easy sealing without burn-through. In addition, Tilia has registered the VacLoc, SaverMate, VacuTop and VacuSave names with the U.S. Patent and Trademark Office and in several countries throughout the world. COMPETITION Tilia competes with marketers of "conventional" food storage solutions, such as plastic bags and containers. In addition, our competitors include manufacturers of sealing appliances that heat-seal bags, but, we believe, do not create a vacuum seal comparable to ours. There are also several companies that manufacture industrial and commercial vacuum packaging products, but these manufacturers have not attempted to enter the household marketplace. We believe that the strength of our proprietary technology coupled with our strong brand name and competitive pricing strategy will prevent others from producing a similar product at comparable price points. 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. ALLTRISTA CORPORATION By: /s/ Ian G.H. Ashken ----------------------------------- Ian G.H. Ashken Vice President, Secretary and Treasurer Dated: March 28, 2002 EXHIBIT INDEX EXHIBIT NO. DESCRIPTION - ----------- ----------- 99.1 Press Release of the Company, dated March 28, 2002 99.2 Unaudited Pro Forma Condensed Consolidated Financial Statements EX-99.1 3 file002.txt PRESS RELEASE EXHIBIT 99.1 ALLTRISTA TO ACQUIRE TILIA CONTACT: Martin E. Franklin Chairman and Chief Executive Officer Alltrista Corporation 914-967-9400 Investor Relations: Jeff Zack/Ankit Goyal/ Martha Rodriguez Press: Stacy Berns/ Emily Brunner Morgen-Walke Associates 212-850-5600 FOR IMMEDIATE RELEASE ALLTRISTA ANNOUNCES DEFINITIVE AGREEMENT TO ACQUIRE TILIA INTERNATIONAL, INC. RYE, NEW YORK - MARCH 28, 2002 - ALLTRISTA CORPORATION (NYSE: ALC) announced today that it has entered into a definitive asset purchase agreement to acquire the business of Tilia International, Inc. for $160 million. Based in San Francisco, Tilia is a developer and distributor of home food preservation products including FoodSaver(R), the industry's leading line of home vacuum packaging systems. Pursuant to the agreement, Alltrista will acquire Tilia for approximately $145 million in cash and $15 million in seller debt financing. In addition, the agreement includes an earn-out provision with a total potential payment in cash or Alltrista common stock of up to $25 million payable in 3 years, provided that certain earnings performance targets are met. Closing of the transaction, expected in the second quarter, is subject to financing, Hart-Scott-Rodino approval and other customary conditions. The acquisition, which is expected to more than double Alltrista's consumer products revenue, is consistent with Alltrista's strategic focus on food preservation products and niche branded kitchen consumables. On a pro forma basis, more than 70% of 2001 revenue of the combined companies would have been derived from the consumer products business. For the year ended December 31, 2001, Tilia generated sales of $184 million. Tilia, which employs approximately 150 people, will operate as a wholly owned subsidiary of Alltrista. Linda S. Graebner, Tilia's Chief Executive Officer, will continue to lead Tilia in that role. The acquisition is expected to be accretive to earnings per share immediately. On a pro forma basis, the combined company generated 2001 revenue of $425.5 million and earnings before interest, taxes, depreciation and amortization (EBITDA) of $70.3 million, after adjusting for the net loss on Alltrista's divestitures of assets and net special charges and reorganization expenses. On a pro forma basis, diluted EPS for 2001 would have been $3.22, compared to $1.32 for Alltrista on a standalone basis and after adjusting to exclude the impact of Alltrista's November 2001 asset divestitures. To finance the acquisition, Alltrista plans to offer $150 million of senior subordinated notes to qualified institutional buyers in a private placement pursuant to Rule 144A under the U.S. Securities Act of 1933, and refinance its existing indebtedness with a new $100 million senior secured credit facility, of which half is anticipated to be drawn at closing. In addition, financing sources will also include a $23 million cash tax refund that Alltrista received on March 22nd as a result of the economic stimulus package signed on March 9, 2002. The refund is in addition to the $15.7 million tax refund received in January 2002. The senior subordinated notes will not be and have not been registered under the Securities Act of 1933, as amended, and may not be offered or sold in the United States absent registration or an applicable exemption from registration requirements. Alltrista will host a telephone conference call today to review the proposed acquisition. The call will be broadcast live over the Internet at 1:00 p.m. Eastern Standard Time. To access the call, please visit the Company's website at www.alltrista.com. An online archive of the broadcast will be available within one hour of the conclusion of the call and available until midnight on Wednesday, April 3rd. Alltrista Corporation operates two distinct business segments, Consumer Products and Materials Based. Consumer Products is the leading provider of home canning products in North America, primarily under the Ball(R), Kerr(R) and Bernardin(R) brands and also markets other home food preservation and preparation products. The Materials Based group consists of manufacturing operations in injection molded plastics and industrial plastics and is the country's largest producer of zinc strip and fabricated products, including coin blanks for U.S. and foreign mints. This news release contains "forward-looking statements" within the meaning of the federal securities laws and is intended to qualify for the Safe Harbor from liability established by the Private Securities Litigation Reform Act of 1995, including statements regarding the outlook for Alltrista's markets and the demand for its products and the financial impact to Alltrista of the proposed acquisition of Tilia. These projections and statements are based on management's estimates and assumptions with respect to future events and financial performance and are believed to be reasonable, though are inherently uncertain and difficult to predict. Actual results could differ materially from those projected as a result of certain factors. A discussion of factors that could cause results to vary are included in the Company's periodic reports filed with the Securities and Exchange Commission, including its Form 10-K for the fiscal year ended December 31, 2001. EX-99.2 4 file003.txt UNAUDITED PRO FORMA FINANCIAL STATEMENTS EXHIBIT 99.2 UNAUDITED PRO FORMA CONDENSED CONSOLIDATED FINANCIAL STATEMENTS The following unaudited pro forma financial information as of and for the year ended December 31, 2001 has been derived form our audited consolidated financial statements as of such date and for such period and gives pro forma effect to (1) the Dispositions and the Transactions as if they had been consummated as of January 1, 2001, in the case of statement of operations and other operating data; and (2) the Tax Refunds and the Transactions as if they had been consummated as of December 31, 2001, in the case of balance sheet data. See "Terms Used in this Offering Memorandum," "The Acquisition," "Use of Proceeds" and "Management's Discussion and Analysis of Financial Condition and Results of Operations--General--Alltrista Divestitures." The unaudited pro forma financial information is not necessarily indicative of our results of operations or financial position had the events reflected herein actually been consummated at the assumed dates, nor is it necessarily indicative of our results of operations or financial position for any future period. The unaudited pro forma financial information should be read in conjunction with the consolidated financial statements, including the related notes, included elsewhere in this offering memorandum. The pro forma adjustments related to the purchase price allocation and financing of the Acquisition are preliminary and based on information obtained to date and are subject to revision as additional information becomes available. Revisions to the preliminary purchase price allocation and financing of the Acquisition may have a significant impact on the unaudited pro forma information. UNAUDITED PRO FORMA CONDENSED CONSOLIDATED BALANCE SHEET AS OF DECEMBER 31, 2001
DISPOSITIONS- RELATED ALLTRISTA PRO FORMA AS REPORTED ADJUSTMENTS ------------- --------------------- (DOLLARS IN THOUSANDS) ASSETS Current assets Cash and cash equivalents ................. $ 6,376 Accounts receivable, net .................. 13,986 Income taxes receivable ................... 16,252 $ (15,700)(a) Inventories, net .......................... 26,994 Deferred taxes on income .................. 4,832 (4,832)(a) Other current assets ...................... 3,134 --------- ----------- Total current assets ..................... 71,574 (20,532) --------- ----------- Property, plant and equipment, net ......... 43,543 Goodwill, net .............................. 15,487 Deferred taxes on income ................... 25,417 (17,968)(a) Other assets ............................... 5,282 --------- ----------- Total assets ............................... $ 161,303 $ (38,500) ========= =========== LIABILITIES AND EQUITY Current liabilities Short-term and current portion of long-term debt ........................... $ 28,500 $ (23,500)(a) Accounts payable .......................... 14,197 Other current liabilities ................. 20,842 --------- ----------- Total current liabilities ................ 63,539 (23,500) --------- ----------- Noncurrent liabilities Long-term debt ............................ 56,375 (15,000)(a) Other noncurrent liabilities .............. 6,260 --------- ----------- Total noncurrent liabilities ............. 62,635 (15,000) Equity ..................................... 35,129 --------- ----------- Total liabilities and equity ............... $ 161,303 $ (38,500) ========= =========== ACQUISITION- RELATED ALLTRISTA TILIA PRO FORMA PRO FORMA PRO FORMA AS REPORTED ADJUSTMENTS COMBINED ----------- ------------- ------------------- ------------ (DOLLARS IN THOUSANDS) ASSETS Current assets Cash and cash equivalents ................. $ 6,376 $ 18,915 $ (1,875)(b) $ 23,416 Accounts receivable, net .................. 13,986 22,982 36,968 Income taxes receivable ................... 552 -- 552 Inventories, net .......................... 26,994 24,453 51,447 Deferred taxes on income .................. -- 5,632 5,632 Other current assets ...................... 3,134 1,888 5,022 --------- ---------- ----------- --------- Total current assets ..................... 51,042 73,870 (1,875) 123,037 --------- ---------- ----------- --------- Property, plant and equipment, net ......... 43,543 3,267 46,810 Goodwill, net .............................. 15,487 -- 100,935(c) 116,422 Deferred taxes on income ................... 7,449 122 7,571 Other assets ............................... 5,282 1,146 12,000(d) 18,214 (214)(e) --------- ---------- ----------- --------- Total assets ............................... $ 122,803 $ 78,405 $ 110,846 $ 312,054 ========= ========== ============ ========= LIABILITIES AND EQUITY Current liabilities Short-term and current portion of long-term debt ........................... $ 5,000 $ -- $ (5,000)(f) $ -- Accounts payable .......................... 14,197 3,535 17,732 Other current liabilities ................. 20,842 17,305 38,147 --------- ---------- ----------- --------- Total current liabilities ................ 40,039 20,840 (5,000) 55,879 --------- ---------- ----------- --------- Noncurrent liabilities Long-term debt ............................ 41,375 -- (41,375)(f) 215,000 50,000 (g) 15,000 (h) 150,000 (i) Other noncurrent liabilities .............. 6,260 -- 6,260 --------- ---------- ----------- --------- Total noncurrent liabilities ............. 47,635 -- 173,625 221,260 Equity ..................................... 35,129 57,565 (57,565)(j) 34,915 (214)(e) --------- ---------- ------------ --------- Total liabilities and equity ............... $ 122,803 $ 78,405 $ 110,846 $ 312,054 ========= ========== ============ =========
UNAUDITED PRO FORMA CONDENSED CONSOLIDATED STATEMENT OF OPERATIONS AND OTHER OPERATING DATA YEAR ENDED DECEMBER 31, 2001
DISPOSITIONS- RELATED ALLTRISTA PRO FORMA AS REPORTED ADJUSTMENTS ------------- --------------------- (DOLLARS IN THOUSANDS, EXCEPT PER SHARE AMOUNTS) Net sales ........................................ $ 304,978 $ (62,588)(k) (711)(l) Costs and expenses Cost of sales ................................... 233,676 (60,901)(k) Selling, general and administrative expenses..... 52,212 (9,061)(k) (1,670)(l) Goodwill amortization ........................... 5,153 (4,044)(k) Special charges (credits) and reorganization expenses ....................................... 4,978 345(k) Loss on divestitures of assets .................. 122,887 (122,426)(m) ---------- ------------- Income (loss) before interest, taxes and minority interest ............................... (113,928) 134,458 Interest expense, net ............................ 11,791 (3,602)(n) ---------- ------------- Income (loss) before taxes and minority interest ........................................ (125,719) 138,060 Income tax provision (benefit) ................... (40,443) 44,352(o) Minority interest in loss of consolidated subsidiary ...................................... 153 (153)(p) ---------- ------------- Net income (loss) ................................ $ (85,429) $ 93,861 ========== ============= Basic earnings (loss) per share .................. $ (13.43) Diluted earnings (loss) per share ................ (13.43) Weighted average shares outstanding: Basic ........................................... 6,363 Diluted ......................................... 6,363 Other Data: EBITDA(u) ....................................... $ 32,734 $ 3,564 Depreciation and amortization ................... 18,797 8,813 Capital expenditures ............................ 9,707 3,000 ACQUISITION- RELATED ALLTRISTA TILIA PRO FORMA PRO FORMA PRO FORMA AS REPORTED ADJUSTMENTS COMBINED -------------- ------------- ------------------- -------------- (DOLLARS IN THOUSANDS, EXCEPT PER SHARE AMOUNTS) Net sales ........................................ $ 241,679 $ 183,825 $ 425,504 Costs and expenses Cost of sales ................................... 172,775 89,668 262,443 Selling, general and administrative expenses..... 41,481 61,718 $ 1,000(q) 104,199 Goodwill amortization ........................... 1,109 -- 1,109 Special charges (credits) and reorganization expenses ....................................... 5,323 803 6,126 Loss on divestitures of assets .................. 461 -- 461 ---------- --------- ------------- ---------- Income (loss) before income taxes and minority interest ............................... 20,530 31,636 (1,000) 51,166 Interest expense, net ............................ 8,189 344 (8,189)(r) 19,619 18,375(s) 900(t) ---------- --------- ------------- ---------- Income (loss) before taxes and minority interest ........................................ 12,341 31,292 (12,086) 31,547 Income tax provision (benefit) ................... 3,909 8,513 (1,381)(o) 11,041 Minority interest in loss of consolidated subsidiary ...................................... -- -- -- ---------- --------- ------------ ---------- Net income (loss) ................................ $ 8,432 $ 22,779 $ (10,705) $ 20,506 ========== ========= ============ ========== Basic earnings (loss) per share .................. $ 1.33 $ 3.22 Diluted earnings (loss) per share ................ 1.32 3.22 Weighted average shares outstanding: Basic ........................................... 6,363 6,363 Diluted ......................................... 6,377 6,377 Other Data: EBITDA(u) ....................................... $ 36,298 $ 34,051 $ -- $ 70,349 Depreciation and amortization ................... 9,984 1,612 1,000 12,596 Capital expenditures ............................ 6,707 1,984 -- 8,691
NOTES TO UNAUDITED PRO FORMA CONDENSED CONSOLIDATED FINANCIAL STATEMENTS AS OF AND FOR THE YEAR ENDED DECEMBER 31, 2001 Balance sheet adjustments: (a) Adjustment to reflect the use of the Tax Refunds to repay existing debt, thereby reducing income taxes receivable and deferred tax assets. (b) Adjustment to reflect the use of cash on hand to fund a portion of the purchase price of Tilia. (c) Adjustment to reflect estimated goodwill to be recorded with the Acquisition calculated as the purchase price plus related expenses ($163.5 million) related to the Acquisition less the net equity of Tilia and amounts allocated to specifically identifiable intangible assets ($5.0 million). (d) Adjustment to reflect the following: (i) estimated fair value of Tilia's identifiable intangible assets (primarily patents) of $5.0 million to be amortized over an average five-year life; (ii) estimated expenses of this offering of $5.0 million to be amortized over the ten-year term of the Senior Subordinated Notes due 2012; and (iii)estimated expenses of the new senior credit facility of $2.0 million to be amortized over the five-year term. (e) Adjustment to reflect the write-off of remaining debt issue costs relating to Alltrista's existing senior credit facility. (f) Adjustment to reflect the repayment of Alltrista's existing credit facility in conjunction with the Transactions. (g) Adjustment to reflect the initial borrowing under the new senior credit facility in conjunction with the Transactions. (h) Adjustment to reflect the subordinated seller notes to be issued in conjunction with the Transactions: (i) $10.0 million non-interest bearing note due March 31, 2003, and (ii) $5.0 million note due June 30, 2005. (i) Adjustment to reflect the issuance of the Senior Subordinated Notes due 2012. (j) Adjustment to reflect the elimination of the existing stockholders' equity of Tilia. Statement of operations adjustments: (k) Adjustment to reflect the elimination of the operating results of the TPD Assets. (l) Adjustment to reflect the elimination of the operating results of Microlin, LLC. (m) Adjustment to reflect the elimination of the loss on the Dispositions. (n) Adjustment to reflect the elimination of interest expense related to the debt repayment resulting from the Tax Refunds. (o) Adjustment to reflect an effective tax rate of 35.0%. (p) Adjustment to reflect the elimination of the minority interest's share in the loss of Microlin, LLC. (q) Adjustment to reflect the amortization of estimated identifiable intangible assets. See note (d)(i) above. (r) Adjustment to reflect the elimination of historical Alltrista interest expense in conjunction with the Transactions. (s) Adjustment to reflect pro forma interest expense relating to: (i) the new senior credit facility based upon Alltrista's 2001 effective borrowing rate; (ii) the interest bearing subordinated seller note described in note (g)(ii) above based upon Alltrista's 2001 effective borrowing rate; and (iii) the Senior Subordinated Notes due 2012. (t) Adjustment to reflect amortization of debt issue costs for both the new senior credit facility and the Senior Subordinated Notes due 2012. See note (d) above. (u) "EBITDA" is calculated as income (loss) before interest, taxes and minority interest plus (i) depreciation and amortization, (ii) special charges (credits) and reorganization expenses and (iii) loss (gain) on divestiture of assets and product lines. EBITDA is not intended to represent cash flow from operations as defined by accounting principles generally accepted in the United States and should not be used as an alternative to net income as an indicator of operating performance or to cash flow as a measure of liquidity. EBITDA is included in this offering memorandum because it is a basis upon which our management assesses financial performance. While EBITDA is frequently used as a measure of operations and the ability to meet debt service requirements, it is not necessarily comparable to other similarly titled captions of other companies due to potential inconsistencies in the method of calculation. -----END PRIVACY-ENHANCED MESSAGE-----