-----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, FH7R/CMAHkpJm5qoawBpXyBzW7fk666RfxOGNycsOmhbWURb63ytUNDUDxsAEnPK jBzmZJ3X9v6pbRYhdWseSA== 0000912603-97-000006.txt : 19970222 0000912603-97-000006.hdr.sgml : 19970222 ACCESSION NUMBER: 0000912603-97-000006 CONFORMED SUBMISSION TYPE: 8-K/A PUBLIC DOCUMENT COUNT: 3 CONFORMED PERIOD OF REPORT: 19970211 ITEM INFORMATION: Acquisition or disposition of assets ITEM INFORMATION: Financial statements and exhibits FILED AS OF DATE: 19970212 SROS: NASD FILER: COMPANY DATA: COMPANY CONFORMED NAME: SCHNITZER STEEL INDUSTRIES INC CENTRAL INDEX KEY: 0000912603 STANDARD INDUSTRIAL CLASSIFICATION: WHOLESALE-MISC DURABLE GOODS [5090] IRS NUMBER: 930341923 STATE OF INCORPORATION: OR FISCAL YEAR END: 0831 FILING VALUES: FORM TYPE: 8-K/A SEC ACT: 1934 Act SEC FILE NUMBER: 000-22496 FILM NUMBER: 97526049 BUSINESS ADDRESS: STREET 1: 3200 NW YEON AVE STREET 2: P O BOX 10047 CITY: PORTLAND STATE: OR ZIP: 97210-0047 BUSINESS PHONE: 5032249900 MAIL ADDRESS: STREET 1: P O BOX 10047 CITY: PORTLAND STATE: OR ZIP: 97210 8-K/A 1 FORM 8-K/A 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) November 29, 1996 ----------------- SCHNITZER STEEL INDUSTRIES, INC. (Exact name of registrant as specified in its charter) OREGON 0-22496 93-0341923 - ---------------------------- ----------- -------------- (State or other jurisdiction (Commission (IRS Employer of incorporation) File Number) Identification No.) P.O. Box 10047 Portland, OR 97296-0047 - --------------------------------------- ---------- (Address of principal executive offices) (Zip Code) Registrant's telephone number including area code: (503) 224-9900 - -------------------------------------------------------------------------------- Page 1 of 13 Index to Exhibits on Page 10 SCHNITZER STEEL INDUSTRIES, INC. FORM 8-K/A FEBRUARY 11, 1997 Item 2. Acquisition or Disposition of Assets On November 29, 1996, PIC Acquisition Corporation ("PIC"), a wholly owned subsidiary of Schnitzer Steel Industries, Inc. (the "Company"), acquired 4,079,225 shares of Common Stock of Proler International Corp. ("Proler") (representing approximately 86% of the outstanding shares of Proler) for $9.00 cash per share pursuant to a tender offer for all of the outstanding shares of Common Stock of Proler. The tender offer commenced on September 20, 1996 pursuant to the Agreement and Plan of Merger among PIC, Proler, and the Company. PIC subsequently purchased an additional 342,600 shares of Common Stock of Proler, thereby increasing its ownership to approximately 94% of the outstanding Proler shares. On December 6, 1996, the Company completed the merger of PIC with and into Proler. As a result of the merger, all remaining outstanding shares of Proler Common Stock were converted into the right to receive the same $9.00 per share in cash paid in the tender offer and Proler became a wholly owned subsidiary of the Company. The total amount of funds required to acquire Proler pursuant to the tender offer and merger was approximately $42.5 million. The Company borrowed these funds under its existing $100,000,000 unsecured revolving credit facility with The First National Bank of Chicago, The Chase Manhattan Bank, N.A., Wells Fargo Bank, N.A. and Seattle First National Bank. Proler is an environmental services company involved in the recovery and recycling of scrap metals and industrial wastes. Through its joint ventures, Proler exports ferrous scrap to foreign markets from scrap collection, processing and deep water facilities in Los Angeles, California; Providence, Rhode Island; Everett, Massachusetts; and Jersey City, New Jersey. It is the Company's current intention that most of Proler's assets will continue to be used in its business, although the Company intends to review and consider disposing of Proler's businesses outside of its core scrap metal recycling business. Item 7. Financial Statements and Exhibits (a) Financial Statements of Businesses Acquired (1) The audited Consolidated Balance Sheets of Proler as of January 31, 1996 and 1995, and the related audited Consolidated Statements of Operations, Stockholders' Equity and Cash Flows for each of the three years in the period ended January 31, 1996, are incorporated herein by reference from Part IV, Item 14. (a) 1. of Proler's Form 10-K Annual Report (Commission File Number: 1-5276) for the fiscal year ended January 31, 1996. (2) The audited Combined Balance Sheets of Proler's Joint Operations as of January 31, 1996 and 1995, and the related audited Combined Statements of Operations, Stockholders' and Partners' Equity and Cash Flows for each of the three years in the period ended January 31, 1996, are incorporated herein by reference from Part IV, Item 14 (a) 1. of Proler's Form 10-K Annual Report (Commission File Number: 1-5276) for the fiscal year ended January 31, 1996. SCHNITZER STEEL INDUSTRIES, INC. FORM 8-K/A FEBRUARY 11, 1997 (3) The unaudited Consolidated Balance Sheet of Proler as of July 31, 1996, and the related unaudited Consolidated Statements of Operations and Cash Flows for each of the six months ended July 31, 1996 and 1995 (Incorporated by reference in the original Form 8-K filed by the Company on December 13, 1996). (b) Pro Forma Financial Information (1) Pro forma balance sheet combining the Company as of August 31, 1996 and Proler as of July 31, 1996 (unaudited). (2) Pro forma statement of operations combining the Company for the fiscal year ended August 31, 1996 and Proler for the twelve months ended July 31, 1996 (unaudited). (c) Exhibits 2. Agreement and Plan of Merger dated September 15, 1996 (Incorporated by reference in the original Form 8-K filed by the Company on December 13 1996). 23.1 Consent of Coopers & Lybrand L.L.P. 23.2 Consents of La Guardia & Petrella, L.L.C. 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: February 11, 1997 ---------------------------- SCHNITZER STEEL INDUSTRIES, INC. By/s/Barry A.Rosen ---------------------------- Barry A. Rosen Vice President, Finance SCHNITZER STEEL INDUSTRIES, INC. PRO FORMA FINANCIAL INFORMATION The following pro forma condensed combined statements (The Statements) give effect to the November 29, 1996 acquisition of Proler International Corp. (Proler) by Schnitzer Steel Industries, Inc. (SSI) for the periods explained therein. The acquisition was accounted for as a purchase. The Statements do not purport to be indicative of the results which would actually have been obtained had the acquisition occurred as of the date or at the beginning of the periods indicated or which may be obtained in the future. The Statements should be read in conjunction with the respective historical financial information of SSI and Proler. SCHNITZER STEEL INDUSTRIES, INC. PRO FORMA COMBINED BALANCE SHEET (unaudited) (in thousands)
SSI Proler Twelve Months Twelve Months Pro Forma Ended Ended ------------------------------- August 31, 1996 July 31, 1996 Adjustments Combined ----------------- --------------- ------------ ------------- ASSETS CURRENT ASSETS: Cash $ 1,896 $ 263 $ $ 2,159 Accounts receivable 23,542 2,148 (100) (3) 25,590 Accounts receivable from related parties 1,058 1,058 Inventories 90,746 2,703 (600) (3) 92,849 Deferred income taxes 3,128 3,128 Prepaid expenses and other 4,118 872 4,990 Assets held for sale 6,203 (3) 6,203 ----------------- --------------- ------------ ------------- TOTAL CURRENT ASSETS 124,488 5,986 5,503 135,977 ----------------- --------------- ------------ ------------- NET PROPERTY, PLANT & EQUIPMENT 150,517 6,273 (1,851) (3) 154,939 ----------------- --------------- ------------ ------------- OTHER ASSETS: Goodwill 43,445 43,445 Investments in joint venture partnerships 9,909 53,642 7,358 (3) 70,909 Advances to joint venture partnerships 4,163 4,163 Other assets 4,967 4,281 9,248 ----------------- --------------- ------------ ------------- 62,484 57,923 7,358 127,765 ----------------- --------------- ------------ ------------- $ 337,489 $ 70,182 $ 11,010 $ 418,681 ================= =============== ============ ============= LIABILITIES AND SHAREHOLDERS' EQUITY CURRENT LIABILITIES: Current portion of long-term debt $ 254 $ 25,900 $ (25,900)(2) $ 254 Accounts payable 17,877 4,672 22,549 Accrued payroll liabilities 4,135 4,135 Deferred revenue 392 392 Current portion of environmental liabilities 2,202 2,202 Other accrued liabilities 6,360 2,905 1,442 (4) 10,707 ----------------- --------------- ------------ ------------- TOTAL CURRENT LIABILITIES 31,220 33,477 (24,458) 40,239 ----------------- --------------- ------------ ------------- DEFERRED INCOME TAXES 15,994 - 15,994 ----------------- --------------- ------------ ------------- LONG-TERM DEBT LESS CURRENT PORTION 44,475 68,356 (1) 112,831 ----------------- --------------- ------------ ------------- ENVIRONMENTAL LIABILITIES, NET OF CURRENT PORTION 20,736 1,200 21,936 ----------------- --------------- ------------ ------------- OTHER LONG-TERM LIABILITIES 1,251 2,617 3,868 ----------------- --------------- ------------ ------------- SHAREHOLDERS' EQUITY: Preferred stock Common stock 10,348 5,351 (5,351) (5) 10,348 Additional paid-in capital 113,747 192 (192) (5) 113,747 Treasury stock (6,057) 6,057 (5) Retained earnings 99,718 33,402 (33,402) (5) 99,718 ----------------- --------------- ------------ ------------- TOTAL SHAREHOLDERS' EQUITY 223,813 32,888 (32,888) 223,813 ----------------- --------------- ------------ ------------- $ 337,489 $ 70,182 $ 11,010 $ 418,681 ================= =============== ============ =============
SCHNITZER STEEL INDUSTRIES, INC. NOTES TO PRO FORMA COMBINED BALANCE SHEET AS OF AUGUST 31, 1996 The pro forma combined balance sheet presents the audited balances of Schnitzer Steel Industries, Inc. (SSI) as of August 31, 1996 and the unaudited balances of Proler International Corp. (Proler) as of July 31, 1996. The pro forma combined balance sheet assumes that the acquisition of Proler occurred as of August 31, 1996. However, the pro forma combined balances are not necessarily indicative of balances which would have resulted had the acquisition of Proler actually occurred on August 31, 1996. This statement should be read in conjunction with the other financial statements and notes thereto either appearing elsewhere herein or incorporated by reference herein. In August 1996, a consultant was engaged to estimate the costs to cure environmental liabilities related to Proler's properties. In November 1996, under AICPA Statement of Position No. 96-1, Proler recorded a liability of $8,600,000 for the probable costs to remediate these properties based upon the consultant's estimates. The following schedule summarizes preliminary adjustments reflected in the pro forma combined balance sheet : (1) Adjustment to record borrowings under line of credit to finance the acquisition of Proler and to refinance Proler's debt outstanding at the date of acquisition. (2) Adjustment to remove Proler debt which was retired upon consummation of the acquisition. (3) Adjustment to restate reported assets acquired at fair market value. (4) Adjustment to record liabilities for exit costs, employee termination costs and relocation costs. (5) Adjustment to eliminate Proler's equity accounts. Certain reclassifications have been made to the Proler balance sheet to conform with the presentation used by SSI. SCHNITZER STEEL INDUSTRIES, INC. PRO FORMA COMBINED STATEMENT OF OPERATIONS (unaudited) (in thousands, except per share amounts)
SSI Proler Twelve Months Twelve Months Pro Forma Ended Ended ----------------------------------- August 31, 1996 July 31, 1996 Adjustments Combined ---------------- ---------------- -------------- --------------- REVENUES $ 339,352 $ 14,134 $ (4,303) (5) $ 349,183 --------------- ---------------- -------------- --------------- COSTS AND EXPENSES: Cost of goods sold and other operating expenses 290,841 15,684 (8,279) (1)(5) 298,246 Selling and administrative 18,860 5,102 (4,789) (6) 19,173 Research and development 1,310 (1,310) (5) Asset write-downs and other charges 17,159 (17,159) (4) --------------- ---------------- -------------- --------------- 309,701 39,255 (31,537) 317,419 --------------- ---------------- -------------- --------------- Income (Loss) From Joint Ventures 3,291 (789) 2,502 --------------- ---------------- -------------- --------------- INCOME (LOSS) FROM OPERATIONS 32,942 (25,910) 27,234 34,266 --------------- ---------------- -------------- --------------- OTHER INCOME (EXPENSE): Interest (expense) income, net (3,814) (1,067) (2,929) (2)(3) (7,810) Gain on sale of assets 209 209 Other income, net 1,452 387 1,839 --------------- ---------------- -------------- --------------- (2,153) (680) (2,929) (5,762) --------------- ---------------- -------------- --------------- INCOME BEFORE INCOME TAXES 30,789 (26,590) 24,305 28,504 (Provision For) Benefit From Income Taxes (10,006) (143) 743 (7) (9,406) --------------- ---------------- -------------- --------------- NET INCOME (LOSS) $ 20,783 $ (26,733) $ 25,048 $ 19,098 =============== ================ ============== =============== EARNINGS PER SHARE $ 2.24 $ 2.05 =============== =============== SHARES USED IN CALCULATION 9,295,705 9,295,705 =============== ===============
SCHNITZER STEEL INDUSTRIES, INC. NOTES TO PRO FORMA COMBINED STATEMENT OF OPERATIONS FOR THE TWELVE MONTHS ENDED AUGUST 31, 1996 The pro forma condensed combined statement of operations presents the audited balances of Schnitzer Steel Industries, Inc. (SSI) for the twelve months ended August 31, 1996 and the unaudited balances of Proler International Corp. (Proler) for the twelve months ended July 31, 1996. The pro forma condensed combined statement of operations assumes that the acquisition of Proler occurred as of the beginning of the twelve months ended August 31, 1996. However, the pro forma combined balances are not necessarily indicative of balances which would have resulted had the acquisition of Proler actually occurred at the beginning of the twelve months presented. This statement should be read in conjunction with the other financial statements and notes thereto either appearing elsewhere herein or incorporated by reference herein. The following adjustments are reflected in the pro forma condensed combined statement of operations for the twelve months ended August 31, 1996 : (1) Adjustment to decrease depreciation expense by $982,000 to reflect the restatement to fair value and adjustments in estimated useful lives of Proler's property, plant and equipment as a result of the acquisition. (2) Adjustment to remove interest expense of $1,067,000 incurred by Proler related to debt retired upon acquisition by SSI. (3) Adjustment to record interest expense of $3,996,000 on the borrowings used to fund the acquisition and to refinance Proler's debt outstanding at the date of acquisition. (4) Adjustment to reflect elimination of asset write-downs. (5) Adjustment to eliminate revenues of $4,303,000, cost of goods and other operating costs of $7,297,000 and research and development costs of $1,310,000 related to operations that have been classified as assets held for sale as a result of the acquisition. (6) Adjustment to reflect changes in selling and administrative costs due to the combining of administrative functions as a result of the acquisition. (7) Adjustment of the income tax provision due to the effects of the pro forma adjustments on income before taxes. SCHNITZER STEEL INDUSTRIES, INC. FORM 8-K/A INDEX TO EXHIBITS Exhibit Number Page 2. Agreement and Plan of Merger dated September 15, 1996 (Incorporated by reference in the original Form 8-K filed by the company on December 13,1996). 23.1 Consent of Coopers & Lybrand L.L.P. 11 23.2 Consents of LaGuardia & Petrella, L.L.C. 12 EX-23 2 EX. 23.1 CONSENT OF COOPERS & LYBRAND L.L.P. SCHNITZER STEEL INDUSTRIES, INC. Consent of Independent Accountants We consent to the incorporation by reference in the registration statement of Schnitzer Steel Industries, Inc. on Form S-8 (File No. 33-87008) of our reports dated April 29, 1996, on our audits of the consolidated financial statements of Proler International Corp. and subsidiaries and the combined financial statements of Proler International Corp.'s Joint Operations as of January 31, 1996 and 1995, and for each of the three years in the period ended January 31, 1996, which reports have been incorporated by reference in this Current Report on Form 8-K/A. /S/ Coopers & Lybrand L.L.P. Coopers & Lybrand L.L.P. Houston, Texas February 11, 1997 EX-23 3 EX. 23.2 CONSENTS OF LA GUARDIA & PETRELLA, L.L.C. SCHNITZER STEEL INDUSTRIES, INC. Consent of Independent Accountants We hereby consent to the incorporation by reference in the registration statement of Schnitzer Steel Industries, Inc. on Form S-8 (File No. 33-87008) our report dated March 18, 1996 which appears on page 60 of the Proler International Corp. Annual Report on Form 10-K for the year ended January 31, 1996. We also consent to the incorporation by reference of such report in the Current Report on Form 8-K/A of Schnitzer Steel industries, Inc. dated February 11, 1997 reporting its acquisition of Proler International Corp. /s/ La Guardia & Petrella, L.L.C. La Guardia & Petrella, L.L.C. February 10, 1997 Fort Lee, New Jersey SCHNITZER STEEL INDUSTRIES, INC. Consent of Independent Accountants We consent to the incorporation by reference in the registration statement of Schnitzer Steel Industries, Inc. on Form S-8 (File No. 33-87008) our report dated February 26, 1996 which appears on page 61 of the Proler International Corp. Annual Report on Form 10-K for the year ended January 31, 1996. We also consent to the incorporation by reference of such report in the Current Report on form 8-K/A of Schnitzer Steel Industries, Inc. dated February 11, 1997 reporting its acquisition of Proler International Corp. /s/ La Guardia & Petrella, L.L.C. La Guardia & Petrella, L.L.C. February 10, 1997 Fort Lee, New Jersey -----END PRIVACY-ENHANCED MESSAGE-----