FORM 10-Q
SECURITIES AND EXCHANGE COMMISSION
Washington, D. C. 20549
X QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE
ACT OF 1934
For the period ended September 30, 1996
---------------------------------
OR
TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934
For the transition period from _____________________ to _____________________
Commission file number 1-5599
----------------------
GREAT DANE HOLDINGS INC.
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(Exact name of registrant as specified in its charter)
DELAWARE 54-0698116
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(State or other jurisdiction of (I. R. S. Employer
incorporation or organization) Identification No.)
2016 North Pitcher Street, Kalamazoo, Michigan 49007
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(Address of principal executive office) (Zip Code)
Registrant's telephone number, including area code: (616) 343-6121
------------------------
- -----------------------------------------------------------------------------
Indicate by check mark whether Registrant (1) filed all reports required to be
filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the
preceding 12 months (or for such shorter period that Registrant was required to
file such reports), and (2) has been subject to such filing requirements for the
past 90 days. Yes X No
----- -----
There were 1,002.083 shares of Registrant's only class of common stock
outstanding as of November 12, 1996.
<PAGE-1>
INDEX
GREAT DANE HOLDINGS INC. AND SUBSIDIARIES
Page Number
-----------
PART I FINANCIAL INFORMATION
Item 1 Consolidated Financial Statements (Unaudited):
Consolidated Balance Sheets at December 31, 1995
and September 30, 1996. . . . . . . . . . . . . . . . . . . . 2-3
Consolidated Statements of Operations for
the Three Months Ended September 30, 1995 and
September 30, 1996. . . . . . . . . . . . . . . . . . . . . . . 4
Consolidated Statements of Operations for
the Nine Months Ended September 30, 1995 and
September 30, 1996. . . . . . . . . . . . . . . . . . . . . . . 5
Consolidated Statements of Cash Flows for
the Nine Months Ended September 30, 1995 and
September 30, 1996. . . . . . . . . . . . . . . . . . . . . . 6-7
Notes to Consolidated Financial Statements. . . . . . . . . . 8-9
Item 2 Management's Discussion and Analysis of
Financial Condition and Results of Operations . . . . . . . 10-12
PART II OTHER INFORMATION
Item 4 Submission of Matters to a Vote of Security-Holders . . . . . .13
Item 5 Other Information . . . . . . . . . . . . . . . . . . . . . . .13
Item 6 Exhibits and Reports on Form 8-K. . . . . . . . . . . . . . . .14
SIGNATURE. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .15
<PAGE-2>
Balance-Sheets
CONSOLIDATED BALANCE SHEETS
GREAT DANE HOLDINGS INC. AND SUBSIDIARIES
(in thousands, except share and per share amounts)
(unaudited)
December 31, September 30,
1995 1996
------------- -------------
ASSETS
Cash and cash equivalents $ 41,086 $ 17,147
Accounts receivable, less allowance for
doubtful accounts of $1,564 (1995)
$2,181 (1996) 101,138 122,768
Inventories 84,686 81,071
Other current assets 26,574 30,139
---------- ----------
Total current assets 253,484 251,125
Property, plant and equipment, net 123,864 131,767
Equipment leased to others, net of accumulated
depreciation of $523--Note D --- 13,076
Insurance Subsidiary's investments 110,058 110,429
Cost in excess of net assets acquired,
net of accumulated amortization of $8,752
(1995) and $9,689 (1996) 41,243 40,306
Trademark, net of accumulated amortization
of $2,450 (1995) and $2,712 (1996) 10,996 10,734
Other assets 30,960 43,575
---------- ----------
Total Assets $ 570,605 $ 601,012
========== ==========
<PAGE-3>
Balance-Sheets--Continued
CONSOLIDATED BALANCE SHEETS--CONTINUED
GREAT DANE HOLDINGS INC. AND SUBSIDIARIES
(in thousands, except share and per share amounts)
(unaudited)
December 31, September 30,
1995 1996
------------ -------------
LIABILITIES AND SHAREHOLDERS' DEFICIT:
Accounts payable $ 71,989 $ 75,619
Notes payable 3,133 5,000
Income taxes payable 9,305 8,575
Accrued compensation 18,490 17,536
Accrued interest 11,049 5,018
Customer deposits 14,315 824
Other accrued liabilities 43,390 49,569
Current portion of long-term debt 16,260 19,339
---------- ----------
Total current liabilities 187,931 181,480
Long-term debt, excluding current portion 276,918 276,529
Insurance Subsidiary's unpaid losses and
loss adjustment expenses 78,151 84,128
Unearned insurance premiums 12,545 18,875
Deferred income taxes 1,675 1,144
Postretirement benefits other than pensions 52,766 53,914
Other noncurrent liabilities 46,930 54,560
Minority interest 1,748 ---
---------- ----------
Total liabilities 658,664 670,630
Shareholders' deficit:
Common stock, par value $1.00:
Authorized 3,000 shares
Outstanding 1,000 (1995) 1,002.083
(1996) shares 1 1
Additional paid-in capital 14,999 15,044
Retained earnings 23,128 43,479
Unrealized appreciation on Insurance
Subsidiary's investments in certain
debt and equity securities 2,186 231
Amount paid in excess of Motors'
net assets (128,373) (128,373)
---------- ----------
Total shareholders' deficit (88,059) (69,618)
---------- ----------
Total Liabilities and
Shareholders' Deficit $ 570,605 $ 601,012
========== ==========
See notes to consolidated financial statements.
<PAGE-4>
Statements of Operations--3 Months
CONSOLIDATED STATEMENTS OF OPERATIONS
GREAT DANE HOLDINGS INC. AND SUBSIDIARIES
(in thousands, except per share amounts)
(unaudited)
Three Months Ended September 30,
1995 1996
---------- ----------
Revenues $ 295,799 $ 244,193
Cost of revenues (252,851) (206,312)
---------- ----------
Gross profit 42,948 37,881
Selling, general and administrative expense (22,576) (22,834)
---------- ----------
Operating profit 20,372 15,047
Interest expense (11,036) (9,291)
Interest income 2,112 2,663
Other income, net 572 136
---------- ----------
Income before minority equity and
income taxes 12,020 8,555
Minority equity (274) ---
---------- ----------
Income before income taxes 11,746 8,555
Income tax expense (5,050) (3,182)
---------- ----------
Net income $ 6,696 $ 5,373
========== ==========
Weighted average number of shares used in
per share computations 1,000 1,002
========== ==========
Net income per share $ 6,696 $ 5,362
========== ==========
See notes to consolidated financial statements.
<PAGE-5>
Statements of Operations--9 Months
CONSOLIDATED STATEMENTS OF OPERATIONS
GREAT DANE HOLDINGS INC. AND SUBSIDIARIES
(in thousands, except share and per share amounts)
(unaudited)
Nine Months Ended September 30,
1995 1996
---------- ----------
Revenues $ 947,719 $ 779,756
Cost of revenues (810,761) (666,659)
---------- ----------
Gross profit 136,958 113,097
Selling, general and administrative expense (68,934) (66,861)
---------- ----------
Operating profit 68,024 46,236
Interest expense (32,340) (28,009)
Interest income 6,664 7,042
Other income, net 1,758 4,173
Special Credit--Note G --- 4,300
---------- ----------
Income before minority equity and
income taxes 44,106 33,742
Minority equity (1,016) (907)
---------- ----------
Income before income taxes 43,090 32,835
Income tax expense (18,526) (12,484)
---------- ----------
Net income $ 24,564 $ 20,351
========== ==========
Weighted average number of shares used in
per share computations 1,000 1,002
========== ==========
Net income per share $ 24,564 $ 20,310
========== ==========
See notes to consolidated financial statements.
<PAGE-6>
Statements of Cash Flows
CONSOLIDATED STATEMENTS OF CASH FLOWS
GREAT DANE HOLDINGS INC. AND SUBSIDIARIES
(in thousands)
(unaudited)
Nine Months Ended September 30,
1995 1996
---------- ----------
Cash flows from operating activities:
Net income $ 24,564 $ 20,351
Adjustments to reconcile net income
to net cash provided by (used in)
operating activities:
Depreciation and amortization 16,957 15,549
Deferred income tax benefit (2,205) (675)
Amortization of cost in excess of
net assets acquired 937 937
Amortization of debt discount 1,365 742
Gain on sale of property, plant
and equipment (416) (243)
Investment gains (182) (346)
Increase in minority equity 1,016 907
Other noncash charges 7,873 9,909
Changes in operating assets and
liabilities:
Accounts receivable (14,874) (22,368)
Inventories (29,852) 3,615
Insurance Subsidiary's reinsurance
receivable (541) (3,085)
Equipment leased to others --- (13,599)
Other assets (12,290) (12,497)
Accounts payable 6,107 3,630
Income taxes (3,564) (733)
Unpaid losses and loss adjustment
expenses 6,847 5,977
Unearned insurance premiums 3,139 6,330
Postretirement benefits other
than pensions 1,245 1,148
Other liabilities (8,887) (12,119)
---------- ----------
Net cash flow provided by (used in)
operating activities (2,761) 3,430
<PAGE-7>
Statements of Cash Flows--Continued
CONSOLIDATED STATEMENTS OF CASH FLOWS--CONTINUED
GREAT DANE HOLDINGS INC. AND SUBSIDIARIES
(in thousands)
(unaudited)
Nine Months Ended September 30,
1995 1996
---------- ----------
Cash flows from investing activities:
Purchases of property, plant and equipment $ (29,871) $ (23,505)
Proceeds from disposal of property, plant
and equipment and other productive assets 921 819
Purchase of investments available for sale (21,778) (21,942)
Purchases of investments held to maturity (582) ---
Proceeds from sale of investments available
for sale 6,558 10,846
Proceeds from maturity and redemption of
investments held to maturity 7,959 8,064
Repurchase of minority interest in SCSM --- (5,500)
Other 1,069 ---
---------- ----------
Net cash flow used in investing activities (35,724) (31,218)
Cash flows from financing activities:
Proceeds from borrowings 124,450 27,690
Repayments of borrowings (82,571) (23,876)
Proceeds from issuance of common stock --- 35
---------- ----------
Net cash flow provided by financing
activities 41,879 3,849
---------- ----------
Increase (decrease) in cash and cash
equivalents 3,394 (23,939)
Beginning cash and cash equivalents 34,875 41,086
---------- ----------
Ending cash and cash equivalents $ 38,269 $ 17,147
========== ==========
See notes to consolidated financial statements.
<PAGE-8>
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
GREAT DANE HOLDINGS INC. AND SUBSIDIARIES
SEPTEMBER 30, 1996
(unaudited)
NOTE A--BASIS OF PRESENTATION
The accompanying consolidated financial statements of the Company have been
prepared in accordance with generally accepted accounting principles for
interim financial information, the instructions to Form 10-Q and Rule 10-01
of Regulation S-X. Accordingly, they do not include all of the information
and footnotes required by generally accepted accounting principles for
complete financial statements. In Management's opinion, all adjustments
(consisting of normal recurring accruals) considered necessary for a fair
presentation have been included. Operating results for the nine months
ended September 30, 1996, are not necessarily indicative of the results that
may be expected for the year ending December 31, 1996. For further
information, refer to the audited consolidated financial statements and
footnotes thereto included in the Company's annual report on Form 10-K for
the year ended December 31, 1995.
NOTE B--PRINCIPLES OF CONSOLIDATION
The consolidated financial statements include the accounts of Great Dane
Holdings Inc. and its subsidiaries, including Great Dane Trailers, Inc.
(Great Dane) and SCSM Holdings, Inc., (formerly Checker Motors Corporation)
("SCSM Holdings") and SCSM Holdings' wholly-owned subsidiaries, including
American Country Insurance Company ("Insurance Subsidiary").
NOTE C-INVENTORIES
Inventories are summarized below (dollars in thousands):
December 31, September 30,
1995 1996
-------------- --------------
Raw materials and supplies $ 53,097 $ 49,572
Work-in-process 10,501 12,824
Finished goods 21,088 18,675
---------- ----------
$ 84,686 $ 81,071
========== ==========
NOTE D--EQUIPMENT LEASED TO OTHERS
During 1996, Great Dane accepted an order from a customer, the terms of
which contractually obligated Great Dane to reacquire, at the customer's
option, the trailers at guaranteed prices at specified time periods.
Emerging Issues Task Force Issue No. 95-1 precludes Great Dane from
recognizing this transaction as a sale for financial reporting purposes.
Rather, the transaction is required to be accounted for using the principles
of lease accounting. Accordingly, the trailers are included in equipment
leased to others and are being depreciated following Great Dane's normal
depreciation policy.
<PAGE-9>
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--CONTINUED
GREAT DANE HOLDINGS INC. AND SUBSIDIARIES
(unaudited)
NOTE E--INCOME TAXES
The Company's estimated effective tax rate differs from the statutory rate
because of state income taxes as well as the impact of the reporting of
certain income and expense items in the financial statements which are not
taxable or deductible for income tax purposes.
NOTE F--STOCK ISSUANCE
1.042 shares of common stock were issued on each of April 2, 1996, and
January 4, 1996, to an executive officer of the Company in connection with
an agreement between this executive officer and the Company.
NOTE G--SPECIAL CREDIT
On February 8, 1989, the Boeing Company ("Boeing") filed a lawsuit naming
the Company, together with three prior subsidiaries of the Company, as
defendants in Case No. CV89-119MA, United States District Court for the
District of Oregon. On December 22, 1993, the Company entered into a
settlement with Boeing, settling all claims asserted by Boeing in the
lawsuit. Pursuant to the settlement terms, the Company agreed to pay Boeing
$12.5 million over the course of five years, $5 million of which had been
committed by certain insurance companies in the form of cash or an
irrevocable letter of credit as of that date. Accordingly, a $7.5 million
special charge was recorded in 1993 to provide for the cost associated with
this legal proceeding.
Since the date of the settlement with Boeing, and as a result of agreements
negotiated with insurance companies, the total cost to the Company related
to the Boeing lawsuit has decreased to $3.2 million. The lower cost
principally related to an insurance settlement negotiated in the quarter
ended March 31, 1996. Accordingly, a special credit of $4.3 million was
recorded in the quarter ended March 31, 1996, relating to the finalization
of insurance settlements.
NOTE H--MINORITY INTEREST
On July 3, 1996, SCSM Holdings executed an agreement to purchase (the
"Agreement") the balance of the common stock of South Charleston Stamping &
Manufacturing Company ("SCSM") from the minority interest holder for $5.5
million, $1 million of which was paid upon the signing of the agreement. In
connection with the purchase, SCSM Holdings also executed a $4.5 million
promissory note payable in four payments over the next ten months with
interest at 10% per annum. The Agreement provides that if all or
substantially all of SCSM's assets or equity are sold prior to December 31,
1997, the unpaid amount of the promissory note will become immediately due
and the minority interest holder will be entitled to receive an additional
payment equal to 10% of the amount by which the purchase price for SCSM
exceeds $55 million.
<PAGE-10>
ITEM 2
MANAGEMENT'S DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS
GREAT DANE HOLDINGS INC. AND SUBSIDIARIES
FINANCIAL CONDITION, LIQUIDITY AND CAPITAL RESOURCES
Available cash and cash equivalents, cash flow generated from (used
in) operations ($(2.8) million and $3.4 million for the nine months ended
September 30, 1995 and 1996, respectively) and proceeds from borrowings have
provided sufficient liquidity and capital resources for the Company to conduct
its operations during the first nine months of 1995 and 1996.
The Company is a holding company and is, therefore, dependent on cash
flow from its operating subsidiaries in order to meet its obligations. The
Company's operating subsidiaries are required, pursuant to financing agreements
with third parties, to meet certain covenants, which may have the effect of
limiting cash available to the Company. Further, the payment of dividends by
the Insurance Subsidiary is currently subject to the notification, reporting
and disapproval requirements of the State of Illinois Department of Insurance.
The operating subsidiaries' plans indicate that sufficient funds are antici-
pated to be available to the Company to meet its short-term obligations.
Certain efforts have been made over the past several years to restruc-
ture the Company. As a result of these efforts, subsidiary debt was restruc-
tured and certain of the 12-3/4% Senior Debentures and the 14-1/2% Subordinated
Discount Debentures were repurchased. However, the Company has been unsuccess-
ful in completing an overall comprehensive restructuring. Management of the
Company continually reassesses the financial condition and prospects of the
Company. As a result of this reassessment, the Company has retained an invest-
ment banking organization to act as its exclusive financial advisor to consider
certain strategic alternatives, including the merger, recapitalization or
potential sale of the entire company or one or more of its subsidiaries. On
November 7, 1996, the Company announced that it had entered into a definitive
Stock Purchase Agreement whereby a U. S. subsidiary of The Mayflower Corporation
Plc. will purchase all of the outstanding shares of SCSM Holdings, Inc. ("SCSM
Holdings") formerly known as Checker Motors Corporation, for $165 million con-
sisting of approximately $137 million cash and the assumption of approximately
$28 million of SCSM's debt. $6 million of the purchase price is to be held in
escrow for some time in order to provide indemnification to the Buyer, Mayflower
and their affiliates. In addition, the aggregate purchase price will be ad-
justed upward or downward, as the case may be, depending upon the actual net
assets of SCSM (as calculated in accordance with the terms of the Purchase
Agreement) on the date immediately preceding the Closing. The proceeds of the
sale after payment of, among other things, SCSM Holdings' bank debt, expenses
and taxes of the transaction and management incentives, will be used to
retire outstanding debentures and for general corporate purposes. At the time
of the closing, the only assets of SCSM Holdings will be all of the issued and
outstanding common stock of South Charleston Stamping & Manufacturing Company
("SCSM"). The acquisition is contingent on the occurrence of certain events,
including, among other things, the approval of the acquisition by the stock-
holders of Mayflower and the placing of newly issued shares of Mayflower on
the London Stock Exchange to partially finance the acquisition. It is expected
that the closing will occur in early December, 1996.
<PAGE-11>
ITEM 2
MANAGEMENT'S DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS--CONTINUED
GREAT DANE HOLDINGS INC. AND SUBSIDIARIES
RESULTS OF OPERATIONS
Three Months Ended September 30, 1996
Compared to Three Months Ended September 30, 1995
-------------------------------------------------
Revenues decreased $51.6 million during the three months ended September
30, 1996, as compared to the same period in 1995. The lower revenues are
principally attributed to lower Trailer Manufacturing revenues ($53.8 million)
primarily associated with lower volume in trailer sales. The volume decline
represents the effect of weakened demand for the movement of freight resulting
in decreased sales of truck trailers. Automotive Products revenues increased
$2.2 million during the three months ended September 30, 1996, as compared to
the same period in 1995. Revenues associated with the production of tooling for
certain customers accounted for the increased revenues for the segment.
The Company's operating profit decreased $5.3 million in the 1996 period
compared to the 1995 period. This decrease is attributed to a decrease of
Trailer Manufacturing operating profits ($5.1 million) which is principally due
to lower volume of trailer sales indicated above. The volume decline represents
the effect of weakened demand for the movement of freight resulting in decreased
sales of truck trailers. The Automotive Products operating profits decreased
$0.1 million, primarily due to the mix of sales.
During the quarter ended September 30, 1996, SCSM Holdings executed an
agreement to purchase the entire minority interest of SCSM for $5.5 million in
cash and notes. As a result of this purchase, no minority equity was charged
to income in the three months ended September 30, 1996, compared to $0.3 million
for the three months ended September 30, 1995.
Income tax expense is higher for financial statement purposes than would
be computed if the statutory rate were used because of state income taxes and
the impact of the reporting of certain income and expense items in the financial
statements which are not taxable or deductible for income tax purposes.
Net income was $5.4 million for the three months ended September 30, 1996,
as compared to $6.7 million for the comparable period in 1995. The decline in
net income is attributed to the reasons mentioned above.
Nine Months Ended September 30, 1996
Compared to Nine Months Ended September 30, 1995
-------------------------------------------------
Revenues decreased $168.0 million during the nine months ended September
30, 1996, as compared to the same period in 1995. The lower revenues are
principally attributed to lower Trailer Manufacturing revenues ($194.3 million)
primarily associated with lower volume in trailer sales. The volume decline
represents the effect of weakened demand for the movement of freight resulting
in decreased sales of truck trailers. Automotive Products revenues increased
$23.0 million during the nine months ended September 30, 1996, as compared to
the same period in 1995. Revenues associated with the production of tooling for
certain customers accounted for the increased revenues for the segment.
<PAGE-12>
ITEM 2
MANAGEMENT'S DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS--CONTINUED
GREAT DANE HOLDINGS INC. AND SUBSIDIARIES
The Company's operating profit decreased $21.8 million in the 1996 period
compared to the 1995 period. This decrease is attributed to a decrease of
Trailer Manufacturing operating profits ($21.5 million) which is principally
due to lower volume of trailer sales indicated above. The volume decline
represents the effect of weakened demand for the movement of freight resulting
in decreased sales of truck trailers. The Automotive Products operating
profits decreased ($0.2 million) primarily due to the mix of sales, as well as
certain raw material price increases. The profit margins on tooling programs
are lower than margins on contract parts production.
On February 8, 1989, the Boeing Company ("Boeing") filed a lawsuit naming
the Company, together with three prior subsidiaries of the Company, as
defendants in Case No. CV89-119MA, United States District Court for the District
of Oregon. On December 22, 1993, the Company entered into a settlement with
Boeing, settling all claims asserted by Boeing in the lawsuit. Pursuant to the
settlement terms, the Company agreed to pay Boeing $12.5 million over the course
of five years, $5 million of which had been committed by certain insurance
companies in the form of cash or irrevocable letter of credit as of that date.
Accordingly, a $7.5 million charge was recorded in 1993 to provide for the cost
associated with this legal proceeding.
Since the date of the settlement with Boeing, and as a result of agreements
negotiated with insurance companies, the total cost to the Company related to
the Boeing lawsuit has decreased to $3.2 million. The lower cost principally
related to an insurance settlement negotiated in the quarter ended March 31,
1996. Accordingly, a special credit of $4.3 million was recorded in the quarter
ended March 31, 1996, relating to the finalization of insurance settlements.
During the nine months ended September 30, 1996, the Company recorded $2.9
million of other income related to a nonrecurring refund.
During the nine months ended September 30, 1996 and 1995, a $0.9 million
and $1.0 million charge, respectively, was recorded to reflect minority equity
in South Charleston Stamping & Manufacturing Company ("SCSM"), a subsidiary of
SCSM Holdings.
Income tax expense is higher for financial statement purposes than would
be computed if the statutory rate were used because of state income taxes and
the impact of the reporting of certain income and expense items in the financial
statements which are not taxable or deductible for income tax purposes.
Net income was $20.4 million for the nine months ended September 30, 1996,
as compared to $24.6 million for the comparable period in 1995. The decline in
net income is attributed to the reasons mentioned above.
<PAGE-13>
PART II
OTHER INFORMATION
GREAT DANE HOLDINGS INC. AND SUBSIDIARIES
Item 4: Submission of Matters to a Vote of Security-Holders
---------------------------------------------------
On October 10, 1996, the stockholders of the Corporation, by
Unanimous Written Consent, approved a Special Bonus Plan providing
for bonus payments to certain employees of the Company's stamping
subsidiaries, which bonuses are to be paid out of the proceeds of the
sale of one or both of those facilities.
Item 5: Other Information
-----------------
On November 7, 1996, Great Dane Holdings Inc. (the "Company") and
SCSM Holdings, Inc. ("SCSM Holdings"), formerly Checker Motors
Corporation, a subsidiary of the Company, entered into a Stock
Purchase Agreement (the "Purchase Agreement") with Mayflower
Acquisition Corporation (the "Buyer"), a wholly-owned indirect
subsidiary of the Mayflower Corporation Plc, a corporation organized
under the laws of England ("Mayflower"), pursuant to which the Buyer
has agreed to purchase, and the Company has agreed to sell, all of
the outstanding shares of capital stock (the "Stock") of SCSM
Holdings. The closing of the transaction (the "Closing") is
contingent upon the occurrence of certain events, including, among
other things, the approval of the transaction by the shareholders of
Mayflower and a placing of newly issued shares of Mayflower on the
London Stock Exchange to partially finance the acquisition. At the
time of Closing, SCSM Holdings' only assets will be all of the issued
and outstanding shares of the common stock of the South Charleston
Stamping & Manufacturing Company ("SCSM"). SCSM develops, designs,
engineers and manufactures a broad range of sheet metal stampings for
sale to North American original equipment manufacturers.
The Closing is anticipated to occur on December 5, 1996, or two
business days after the approval by Mayflower's shareholders, or on
such later mutually convenient date but in no event later than
December 13, 1996 (the "Closing Date"). All of the assets of SCSM
Holdings (other than the stock of SCSM), including, without
limitation, the shares of stock of Yellow Cab Company, Chicago
AutoWerks Inc., City Wide Towing, Inc., American Country Insurance
Company (and its subsidiary), CMC Kalamazoo Inc., all real property
and other assets, will be either sold, spunoff, dividended,
contributed, assigned, transferred or otherwise disposed of prior to
or simultaneously with the Closing.
The aggregate purchase price to be paid by the Buyer for the Stock is
$165 million, consisting of approximately $137 million cash and the
assumption of approximately $28 million of SCSM's debt. $6 million
of the purchase price is to be held in escrow for some time in order
to provide indemnification to the Buyer, Mayflower and their
affiliates. In addition, the aggregate purchase price will be
adjusted upward or downward, as the case may be, depending upon the
actual net assets of SCSM (as calculated in accordance with the terms
of the Purchase Agreement) on the date immediately preceding the
Closing. The proceeds of the sale after payment of, among other
<PAGE-14>
PART II
OTHER INFORMATION--CONTINUED
GREAT DANE HOLDINGS INC. AND SUBSIDIARIES
things, SCSM Holdings' bank debt, expenses and taxes of the
transaction and management incentives, will be used to retire
outstanding debentures and for general corporate purposes. As of the
filing date, the Buyer and the Company are unrelated corporations,
with no common officers and directors.
Item 6: Exhibits and Reports on Form 8-K
--------------------------------
(a) Exhibits
--------
2.1 Stock Purchase Agreement dated November 7, 1996, by and among
Great Dane Holdings Inc., SCSM Holdings, Inc., Mayflower
Acquisition Corporation and The Mayflower Corporation Plc.
10.1 Special Bonus Plan.
27.1 Financial Data Schedule
28.1 Press Release of Great Dane Holdings Inc. relating to the Stock
Purchase Agreement dated November 7, 1996.
(b) Reports on Form 8-K
-------------------
None
<PAGE-15>
GREAT DANE HOLDINGS INC. AND SUBSIDIARIES
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 thereunto duly authorized.
GREAT DANE HOLDINGS INC.
------------------------------
(Registrant)
/s/ Marlan R. Smith
----------------------------------------
Marlan R. Smith
Treasurer
(Principal Financial Officer and
Principal Accounting Officer)
Date: November 12, 1996