QuickLinks -- Click here to rapidly navigate through this documentFiled pursuant to Rule 424(b)(3)
File Number: 333-110531
PROSPECTUS SUPPLEMENT (To Prospectus Dated February 17, 2004) |
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NORCROSS SAFETY PRODUCTS L.L.C.
NORCROSS CAPITAL CORP.
Exchange Offer for
$152,500,000
97/8% Senior Subordinated Notes due 2011
The attached information updates and supplements the Prospectus dated February 17, 2004 of Norcross Safety Products L.L.C. and Norcross Capital Corp. and should accompany each copy of that Prospectus. This Prospectus Supplement does not alter or otherwise change any of the terms or conditions of the Exchange Offer as set forth in the Prospectus.
The Exchange Offer referred to in the attached prospectus expires at 5:00 p.m., New York City time, on March 22, 2004, unless extended.
For a discussion of certain factors that you should consider before participating in this exchange offer, see "Risk Factors" beginning on page 9 of the attached Prospectus.
Neither the SEC nor any state securities commission has approved or disapproved of the notes to be distributed in the exchange offer or passed upon the adequacy of this Prospectus Supplement. Any representation to the contrary is a criminal offense.
This Prospectus Supplement is dated March 16, 2004
NORCROSS SAFETY PRODUCTS L.L.C.
YEAR END 2003 RESULTS
Norcross Safety Products L.L.C. has announced results for its year ended December 31, 2003.
For 2003, net sales were $372.5 million compared to $323.5 million in the 2002 period. Income from operations was $40.9 million in 2003 versus $26.4 million in 2002. EBITDA increased to $54.6 million from $45.4 million in the same period last year. During 2002, NSP recorded a non-cash impairment charge of $2.8 million related to the impairment of its Zimbabwe subsidiary due to adverse economic and political conditions. Additionally in 2002, NSP recorded $9.3 million of restructuring and merger-related charges.
The net sales increase of $49.0 million, or 15.2%, was primarily attributable to increased net sales of general industrial and fire service products. In the general industrial segment, the net sales increase of $35.3 million, or 15.8%, was due to increased government footwear and hand protection contract shipments, favorable Canadian and European exchange rates, and the impact of the acquisitions of Arbin Veiligheid B.V. in December 2002 and Kächele-Cama Latex GmbH in July 2003. In the fire service segment, net sales increased $12.0 million, or 20.6%, due to strong market demand in part due to comprehensive marketing efforts. In the utility/high voltage segment, net sales increased $1.8 million, or 4.3%, primarily driven by new product introductions.
Gross profit increased by $14.2 million, or 12.1%, primarily due to the increase in net sales. Gross profit margin of 35.3% in 2003 was lower than the 36.3% gross profit margin in 2002 primarily due to incremental pension expense, charges for obsolete inventory, and an increase in the LIFO provision.
The increase in income from operations of $14.5 million, or 54.5%, was primarily attributable to the increase in income from operations in the general industrial and fire service segments, which offset a decline in income from operations in the utility/high voltage segment. In the general industrial segment, income from operations increased $13.3 million, or 148.0%, primarily due to: higher net sales in 2003 and the Zimbabwe impairment charge and the restructuring and merger-related charges incurred in 2002. In the fire service segment, income from operations increased $2.7 million, or 25.8%, primarily due to the increase in net sales. In the utility/high voltage segment, income from operations decreased $1.3 million, or 12.9%, primarily due to higher manufacturing expenses and incremental pension expense. Corporate expenses increased $0.3 million primarily due to higher payroll and professional fee expenses.
As of December 31, 2003, NSP had working capital of $105.0 million and cash of $16.3 million. NSP's capital expenditures were $7.2 million in 2002 and $7.4 million in 2003.
1
The following table reconciles EBITDA to net cash provided by operating activities for 2002 and 2003:
| | Year ended December 31
| |
---|
| | 2002
| | 2003
| |
---|
EBITDA (1) | | $ | 45,386 | | $ | 54,606 | |
Subtract: | | | | | | | |
| Interest expense, net | | | (23,170 | ) | | (33,255 | ) |
| Income tax expense | | | (7,795 | ) | | (1,685 | ) |
| Depreciation and amortization expense | | | (18,617 | ) | | (12,749 | ) |
| |
| |
| |
Net (loss) income | | | (4,196 | ) | | 6,917 | |
Add (subtract): | | | | | | | |
| Depreciation and amortization expense | | | 18,617 | | | 12,749 | |
| Amortization of deferred financing costs | | | 2,024 | | | 2,191 | |
| Amortization of original issue discount | | | 1,016 | | | 662 | |
| Gain on sale of fixed assets | | | — | | | (417 | ) |
| Deferred income taxes | | | 5,716 | | | 154 | |
| Minority interest | | | — | | | (3 | ) |
| Write-off of deferred financing costs | | | — | | | 7,284 | |
| Zimbabwe subsidiary impairment charge | | | 2,072 | | | — | |
| Changes in operating assets and liabilities | | | (1,237 | ) | | (6,856 | ) |
| |
| |
| |
Net cash provided by operating activities | | $ | 24,012 | | $ | 22,681 | |
| |
| |
| |
- (1)
- EBITDA does not represent and should not be considered as an alternative to net income or cash flow from operations, as determined by accounting principles generally accepted in the United States (GAAP), and our calculation thereof may not be comparable to that reported by other companies. EBITDA is a basis upon which we assess our liquidity position, and certain covenants in our borrowing arrangements are tied to similar measures. EBITDA is also included because we believe that it presents useful information to investors regarding a company's ability to service and/or incur indebtedness. This belief is based on our negotiations with our lenders who have indicated that the amount of indebtedness we will be permitted to incur will be based, in part, on measures similar to our EBITDA. EBITDA does not take into account our working capital requirements, debt service requirements and other commitments and, accordingly, is not necessarily indicative of amounts that may be available for discretionary use.
NSP also confirmed that it has retained a financial advisor to assist it in its analysis and consideration of various strategic alternatives, including a possible sale of NSP. At this time no agreements or understandings have been reached with any party as to the terms of a possible transaction. NSP does not intend to issue any other press release relating to the subject matter referenced above until such time, if ever, as it enters into a definitive agreement with a third party or parties in connection with any such transaction or series of transactions or determines to terminate this strategic process.
2
Norcross Safety Products L.L.C.
Consolidated Statements of Operations
(Amounts in Thousands) (Unaudited)
| | Year ended December 31
| |
---|
| | 2002(1)
| | 2003
| |
---|
Net sales | | $ | 323,509 | | $ | 372,524 | |
Cost of goods sold | | | 206,167 | | | 241,005 | |
| |
| |
| |
Gross profit | | | 117,342 | | | 131,519 | |
Operating expenses: | | | | | | | |
| Selling | | | 30,440 | | | 36,877 | |
| Distribution | | | 14,665 | | | 17,953 | |
| General and administrative | | | 30,504 | | | 33,254 | |
| Amortization of other intangibles | | | 3,239 | | | 2,583 | |
| Restructuring and merger-related charges | | | 9,269 | | | — | |
| Zimbabwe subsidiary impairment charge | | | 2,785 | | | — | |
| |
| |
| |
Total operating expenses | | | 90,902 | | | 90,667 | |
| |
| |
| |
Income from operations | | | 26,440 | | | 40,852 | |
Other expense (income): | | | | | | | |
| Interest expense | | | 23,292 | | | 33,372 | |
| Interest income | | | (122 | ) | | (117 | ) |
| Other, net | | | (329 | ) | | (1,002 | ) |
| |
| |
| |
Income before income taxes and minority interest | | | 3,599 | | | 8,599 | |
Income tax expense | | | 7,795 | | | 1,685 | |
Minority interest | | | — | | | (3 | ) |
| |
| |
| |
Net (loss) income | | $ | (4,196 | ) | $ | 6,917 | |
| |
| |
| |
- (1)
- December 31, 2002 balances were obtained from audited financial statements.
3
Norcross Safety Products L.L.C.
Consolidated Balance Sheets
(Amounts in Thousands) (Unaudited)
| | December 31, 2002(1)
| | December 31, 2003
| |
---|
Assets | | | | | | | |
Current assets: | | | | | | | |
| Cash and cash equivalents | | $ | 1,762 | | $ | 16,341 | |
| Accounts receivable, less allowance of $2,066 and $2,493 in 2002 and 2003, respectively | | | 49,301 | | | 53,291 | |
| Inventories | | | 62,868 | | | 80,828 | |
| Deferred income taxes | | | — | | | 30 | |
| Prepaid expenses and other current assets | | | 3,168 | | | 3,833 | |
| |
| |
| |
Total current assets | | | 117,099 | | | 154,323 | |
Property, plant and equipment, net | | | 46,608 | | | 56,213 | |
Deferred financing costs, net | | | 4,528 | | | 10,832 | |
Goodwill, net | | | 122,787 | | | 130,032 | |
Other intangible assets, net | | | 5,367 | | | 5,641 | |
Due from NSP Holdings L.L.C. | | | 7,005 | | | 16,113 | |
Deferred income taxes | | | 7,138 | | | — | |
Other noncurrent assets | | | 3,539 | | | 5,535 | |
| |
| |
| |
Total assets | | $ | 314,071 | | $ | 378,689 | |
| |
| |
| |
Liabilities and member's equity | | | | | | | |
Current liabilities: | | | | | | | |
| Accounts payable | | $ | 15,161 | | $ | 18,157 | |
| Accrued expenses | | | 20,834 | | | 27,837 | |
| Deferred income taxes | | | 1,910 | | | — | |
| Current maturities of long-term obligations | | | 54,093 | | | 3,378 | |
| |
| |
| |
Total current liabilities | | | 91,998 | | | 49,372 | |
Pension, post-retirement, and deferred compensation | | | 22,471 | | | 24,318 | |
Long-term obligations | | | 163,244 | | | 253,814 | |
Other noncurrent liabilities | | | 724 | | | 430 | |
Deferred income taxes | | | 6,113 | | | 1,937 | |
Minority interest | | | — | | | 124 | |
| |
| |
| |
| | | 192,552 | | | 280,623 | |
Member's equity: | | | | | | | |
| Contributed capital | | | 116,060 | | | 116,060 | |
| Accumulated deficit | | | (71,708 | ) | | (64,791 | ) |
| Accumulated other comprehensive loss | | | (14,831 | ) | | (2,575 | ) |
| |
| |
| |
Total member's equity | | | 29,521 | | | 48,694 | |
| |
| |
| |
Total liabilities and member's equity | | $ | 314,071 | | $ | 378,689 | |
| |
| |
| |
- (1)
- December 31, 2002 balances were obtained from audited financial statements.
4
Norcross Safety Products L.L.C.
Consolidated Statements of Cash Flows
(Amounts in Thousands) (Unaudited)
| | Year ended December 31
| |
---|
| | 2002 (1)
| | 2003
| |
---|
Operating activities | | | | | | | |
Net (loss) income | | $ | (4,196 | ) | $ | 6,917 | |
Adjustments to reconcile net income to net cash provided by operating activities: | | | | | | | |
| Depreciation | | | 9,033 | | | 10,166 | |
| Accelerated depreciation on long-lived assets to be abandoned | | | 6,345 | | | — | |
| Amortization of goodwill and intangibles | | | 3,239 | | | 2,583 | |
| Amortization of deferred financing costs | | | 2,024 | | | 2,191 | |
| Amortization of original issue discount | | | 1,016 | | | 662 | |
| Write-off of deferred financing costs | | | — | | | 7,284 | |
| Gain on sale of property, plant and equipment | | | — | | | (417 | ) |
| Deferred income taxes | | | 5,716 | | | 154 | |
| Minority interest | | | — | | | (3 | ) |
| Impairment of investment in Zimbabwe | | | 2,072 | | | — | |
| Changes in operating assets and liabilities: | | | | | | | |
| | Accounts receivable | | | (4,081 | ) | | (698 | ) |
| | Inventories | | | (1,158 | ) | | (12,118 | ) |
| | Prepaid expenses and other current assets | | | (473 | ) | | (443 | ) |
| | Other noncurrent assets | | | 402 | | | (395 | ) |
| | Accounts payable | | | 190 | | | 2,474 | |
| | Accrued expenses | | | 5,869 | | | 3,196 | |
| | Pension, postretirement, and deferred compensation | | | (308 | ) | | 1,335 | |
| | Other noncurrent liabilities | | | (1,662 | ) | | (294 | ) |
| | Other | | | (16 | ) | | 87 | |
| |
| |
| |
Net cash provided by operating activities | | | 24,012 | | | 22,681 | |
Investing activities | | | | | | | |
Purchase of businesses, net of cash acquired | | | (10,531 | ) | | (18,757 | ) |
Purchases of property, plant and equipment | | | (7,197 | ) | | (7,432 | ) |
Proceeds from sale of property, plant and equipment | | | — | | | 578 | |
Due from NSP Holdings L.L.C. | | | (1,437 | ) | | (9,108 | ) |
Proceeds from purchase price reduction | | | — | | | — | |
| |
| |
| |
Net cash used in investing activities | | | (19,165 | ) | | (34,719 | ) |
Financing activities | | | | | | | |
Payments for deferred financing costs | | | (44 | ) | | (13,711 | ) |
Proceeds from borrowings | | | 4,564 | | | 286,539 | |
Payments of debt | | | (2,255 | ) | | (220,333 | ) |
Net repayments under revolving credit facility | | | (11,429 | ) | | (30,960 | ) |
Capital contribution | | | 3,000 | | | — | |
| |
| |
| |
Net cash (used in) provided by financing activities | | | (6,164 | ) | | 21,535 | |
Effect of exchange rate changes on cash | | | 1,310 | | | 5,082 | |
| |
| |
| |
Net (decrease) increase in cash and cash equivalents | | | (7 | ) | | 14,579 | |
Cash and cash equivalents at beginning of year | | | 1,769 | | | 1,762 | |
| |
| |
| |
Cash and cash equivalents at end of year | | $ | 1,762 | | $ | 16,341 | |
| |
| |
| |
- (1)
- December 31, 2002 amounts were obtained from audited financial statements.
5
QuickLinks
NORCROSS SAFETY PRODUCTS L.L.C. YEAR END 2003 RESULTSNorcross Safety Products L.L.C. Consolidated Statements of Operations (Amounts in Thousands) (Unaudited)Norcross Safety Products L.L.C. Consolidated Balance Sheets (Amounts in Thousands) (Unaudited)Norcross Safety Products L.L.C. Consolidated Statements of Cash Flows (Amounts in Thousands) (Unaudited)