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): December 2,1994
INTERCO INCORPORATED
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(Exact name of Registrant as specified in charter)
Delaware I-91 43-0337683
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(State of (Commission (IRS Employer
Incorporation) File Number) Identification Number)
101 South Hanley Road, St. Louis, Missouri 63105
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(Address of principal executive offices)
(314) 863-1100
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(Registrant's telephone number)
Item 2. Acquisition or Disposition of Assets
On November 17, 1994, INTERCO INCORPORATED (the "Company")
distributed all of the issued and outstanding shares of common
stock of its wholly-owned subsidiaries, Converse Inc. and The
Florsheim Shoe Company. The distribution was made in the form of
a dividend to shareholders of record of the Company at the close
of business on November 17, 1994. As a result, shareholders of
the Company received one share of Converse Inc. Common Stock for
every three shares of the Company's Common Stock and one share of
The Florsheim Shoe Company Common Stock for every six shares of
the Company's Common Stock held on the record date.
The Company continues to operate its furniture businesses,
Broyhill Furniture Industries, Inc. and The Lane Company,
Incorporated. Converse continues in the athletic and athleisure
footwear business and Florsheim continues in the men's dress,
dress casual and casual footwear business, each as an
independent, publicly-held company.
In connection with the distributions, the Company and
Converse Inc. and the Company and The Florsheim Shoe Company have
entered into distribution and services agreements and tax sharing
agreements, copies of which are filed as exhibits hereto.
Additional information concerning Converse Inc. and the
distribution is contained in Converse Inc.'s Registration
Statement on Form 10, as amended, (File 1-13430), and additional
information concerning The Florsheim Shoe Company and the
distribution is contained in The Florsheim Shoe Company's
Registration Statement on Form 10, as amended, (File 0-24730),
both filed under the Securities Exchange Act of 1934.
Also on November 17, 1994, the Company entered into a $285
million term loan agreement and a $75 million revolving credit
facility with Bankers Trust Company and Credit Lyonnais, and a
$150 million receivables securitization facility with Credit
Lyonnais. Proceeds from these borrowings have been used to repay
the outstanding indebtedness issued in 1992 in connection with
the reorganization of the Company and will be used to fund the
Company's working capital needs.
Item 7. Pro Forma Financial Information and Exhibits
(a) Pro Forma Financial Information
Page Number
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5 Introduction to Pro Forma Consolidated Condensed
Financial Information
6 Pro Forma Consolidated Condensed Balance Sheet as of
September 30, 1994
7 Pro Forma Consolidated Condensed Statement of
Operations for the Nine Months Ended September 30,
1994
8 Pro Forma Consolidated Condensed Statement of
Operations for the Twelve Months ended December 31,
1993
9 Notes to Pro Forma Consolidated Condensed Financial
Information
(b) Exhibits
99(a) Distribution and Services Agreement, dated
November 17, 1994, between INTERCO INCORPORATED
and Converse Inc.
99(b) Tax Sharing Agreement, dated November 17, 1994,
between INTERCO INCORPORATED and Converse Inc.
99(c) Distribution and Services Agreement, dated
November 17, 1994, among INTERCO INCORPORATED,
The Florsheim Shoe Company and certain of its
subsidiaries.
99(d) INTERCO/Florsheim Tax Sharing Agreement, dated
November 17, 1994, among INTERCO INCORPORATED,
The Florsheim Shoe Company and certain of its
subsidiaries.
SIGNATURE
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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.
INTERCO INCORPORATED
BY: Steven W. Alstadt
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Steven W. Alstadt
Controller and Chief
Accounting Officer
December 2, 1994
INTERCO INCORPORATED
INTRODUCTION TO PRO FORMA CONSOLIDATED CONDENSED FINANCIAL INFORMATION
On November 17, 1994, pursuant to a resolution adopted by the Board of
Directors of INTERCO INCORPORATED (the "Company"), a distribution by the
Company to holders of its common stock of all the shares of the common
stock of The Florsheim Shoe Company, and of all the shares of the common
stock of Converse Inc., each a wholly-owned subsidiary of the Company,
became effective. The Company's continuing business consists of the
operations of Broyhill Furniture Industries, Inc. and The Lane Company,
Incorporated.
The following unaudited pro forma consolidated condensed balance sheet
of the Company makes adjustments to the historical balance sheet at
September 30, 1994 as if the distribution had occurred on September 30,
1994. The pro forma consolidated condensed balance sheet gives effect
to the refinancing of most of the Company's indebtedness and the
distributions, all of which occurred concurrently.
The following unaudited pro forma consolidated condensed statements of
operations of the Company make adjustments to the historical statements
of operations for the nine months ended September 30, 1994 and for the
twelve months ended December 31, 1993 in order to present the
consolidated results of operations as if the refinancing and
distribution had occurred at the beginning of the earliest period
presented.
The pro forma consolidated condensed balance sheet and statements of
operations of the Company should be read in conjunction with the
historical financial statements and notes thereto included in the
Company's Annual Report on Form 10-K for the year ended December 31,
1993 and the Company's Form 10-Q for the period ended September 30,
1994. The pro forma consolidated condensed financial information
presented herein is for informational purposes only and may not
necessarily reflect the results of operations or financial position of
the Company had the distribution actually occurred at the beginning of
the periods presented or as of September 30, 1994, and the pro forma
consolidated condensed financial information is not necessarily
indicative of future results of operations or financial position of the
Company.
INTERCO INCORPORATED
PRO FORMA CONSOLIDATED CONDENSED BALANCE SHEET
(UNAUDITED)
September 30, 1994
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Pro Forma Adjustments
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(Dollars in thousands) Refinance Record
Historical Debt Distribution (H) Pro Forma
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Assets
Current assets:
Cash and cash equivalents $ 33,129 $ (11,763) $ (10,473) $ 10,893
Receivables 329,043 2,500 (A) (133,780) 197,763
Inventories 378,120 (216,606) 161,514
Prepaid expenses and other
current assets 37,626 (154) (B) (20,389) 17,083
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Total current assets 777,918 (9,417) (381,248) 387,253
Net property, plant & equipment 223,891 (38,337) 185,554
Reorganization value in excess
of amounts allocable to
identifiable assets, net 93,188 37,051 130,239
Trademarks and trade names, net 150,268 (1,935) 148,333
Other assets 37,210 (576) (B) (25,423) 20,961
9,750 (C)
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$1,282,475 $ (243) $(409,892) $ 872,340
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Liabilities
Current liabilities:
Notes payable $ 25,004 $ $ (25,004) $ -
Current maturities of
long-term debt 10,328 (3,724) (D) (5,045) 16,559
15,000 (D)
Accrued interest expense 11,094 (7,630) (E) (3,252) 212
Accounts payable and accrued
expenses 162,008 (66,648) 95,360
Income taxes payable 3,650 (5,730) (F) 6,257 4,177
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Total current liabilities 212,084 (2,084) (93,692) 116,308
Long-term debt, less current
maturities 566,965 (388,157) (D) (168,930) 409,878
400,000 (D)
Other long-term liabilities 122,601 (20,463) 102,138
Shareholders' equity:
Common stock 50,062 50,062
Paid-in capital 226,891 (32,937) 193,954
Retained earnings 103,872 (10,002) (G) (93,870) -
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Total shareholders' equity 380,825 (10,002) (126,807) 244,016
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$ 1,282,475 $ (243) $(409,892) $ 872,340
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See accompanying notes to pro forma consolidated condensed financial statements.
INTERCO INCORPORATED
PRO FORMA CONSOLIDATED CONDENSED STATEMENT OF OPERATIONS
(UNAUDITED)
Nine Months ended September 30, 1994
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Pro Forma Adjustments
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(Dollars in thousands, Refinance Record
except per share data) Historical Debt Distribution Pro Forma
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Net sales $ 1,371,629 $ $(576,177) $ 795,452
Cost of sales 923,646 (349,969) 573,677
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Gross profit 447,983 (226,208) 221,775
Selling, general and
administrative expenses 348,187 (187,052) 161,135
Royalty income 8,989 (8,613) 376
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Earnings from operations 108,785 (47,769) 61,016
Interest expense 41,564 (28,905) (I) (12,611) 24,124
24,076 (I)
Other income (expense), net (132) 1,032 900
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Earnings before income tax
expense 67,089 4,829 (34,126) 37,792
Income tax expense 27,661 1,847 (J) (12,469) 17,039
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Net earnings $ 39,428 $ 2,982 $ (21,657) $ 20,753
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Net earnings per common share:
Primary $ 0.76 $ 0.40
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Fully diluted $ 0.76 $ 0.40
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Weighted average common and
common equivalent shares
outstanding (in thousands):
Primary 51,620 51,859
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Fully diluted 51,665 51,926
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See accompanying notes to pro forma consolidated condensed financial statements.
INTERCO INCORPORATED
PRO FORMA CONSOLIDATED CONDENSED STATEMENT OF OPERATIONS
(UNAUDITED)
Twelve months ended December 31, 1993
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(Dollars in thousands, Pro Forma Adjustments
except per share data) ---------------------------
Refinance Record
Historical Debt Distribution Pro Forma
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Net sales $1,656,814 $ $(676,281) $ 980,533
Cost of sales 1,114,867 (409,658) 705,209
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Gross profit 541,947 (266,623) 275,324
Selling, general and
administrative expenses 421,372 (221,968) 199,404
Royalty income 11,946 (11,214) 732
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Earnings from operations 132,521 (55,869) 76,652
Interest expense 56,472 (39,347) (I) (17,065) 33,150
33,090 (I)
Other income (expense), net (77) 1,841 1,764
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Earnings before income tax
expense 75,972 6,257 (36,963) 45,266
Income tax expense 30,604 2,393 (J) (14,014) 18,983
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Net earnings $ 45,368 $ 3,864 $ (22,949) $ 26,283
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Net earnings per common share:
Primary $ 0.88 $ 0.51
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Fully diluted $ 0.88 $ 0.51
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Weighted average common and common
equivalent shares outstanding
(in thousands):
Primary 51,375 51,429
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Fully diluted 51,397 51,443
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See accompanying notes to pro forma consolidated condensed financial statements.
INTERCO INCORPORATED
NOTES TO PRO FORMA CONSOLIDATED CONDENSED FINANCIAL STATEMENTS
(A) To record effect of defeasing 10% Secured Notes.
(B) To write off deferred debt issuance costs associated with the Company's previous
working capital facility.
(C) To record deferred debt issuance costs on INTERCO's new bank credit facility
($9,000) and receivables securitization facility ($750).
(D) To record the repayment of INTERCO's portion of long-term debt ($391,881) funded by
borrowings under the new bank credit facility ($285,000) and receivables
securitization facility ($130,000).
(E) To record payment of accrued interest.
(F) To record income tax benefit of financial restructuring expenses.
(G) To record expenses of financial restructuring, net of income taxes. These
nonrecurring charges have not been reflected in the pro forma consolidated condensed
statement of operations.
(H) To record distribution of common stock of The Florsheim Shoe Company and of common
stock of Converse Inc. to shareholders of INTERCO INCORPORATED.
(I) To reverse interest expense on repaid debt and record interest expense on new bank
credit facility, receivables securitization facility and amortization of deferred
debt issuance costs on the facilities.
(J) To record the income tax effect of pro forma adjustments.