SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D. C. 20549
FORM 10-Q
QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d)
OF THE SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended June 30, 1996
Commission file number 1-9149
THE INTERLAKE CORPORATION
(Exact name of registrant as specified in its charter)
Delaware 36-3428543
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
550 Warrenville Road, Lisle, Illinois 60532-4387
(Address of Principal Executive Offices) (Zip Code)
(708) 852-8800
(Registrant's telephone number, including area code)
Indicate by check mark whether the registrant (1) has 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 the
registrant was required to file such reports), and (2) has been subject to
such filing requirements for the past 90 days. Yes X No ____
As of July 15, 1996, 23,112,999 shares of the Registrant's common stock were
outstanding.
THE INTERLAKE CORPORATION
PART I. FINANCIAL INFORMATION
ITEM 1. FINANCIAL STATEMENTS
The following consolidated financial statements as of and for the periods
ended June 30, 1996 and July 2, 1995 are unaudited, but include all
adjustments which the Registrant considers necessary for a fair presentation
of results of operations and financial position for the applicable periods.
Except as noted, all adjustments are of a normal recurring nature.
Consolidated Statement of Operations
For the Periods Ended
June 30, 1996 and July 2, 1995
(In thousands except per share statistics)
Second Quarter Six Months
1996 1995 1996 1995
(13 Wks) (13 Wks) (26 Wks) (27 Wks)
Net Sales $209,922 $206,421 $409,923 $413,319
Cost of Products Sold 160,548 157,153 313,343 313,132
Selling and Administrative Expense 31,266 31,956 62,013 64,168
Operating Profit 18,108 17,312 34,567 36,019
Non-operating (Income) Expense (1,051) (555) (1,267) (626)
Earnings Before Interest and Taxes 19,159 17,867 35,834 36,645
Interest Expense 13,371 13,097 26,885 27,047
Interest Income (339) (280) (829) (751)
Income Before Taxes, Minority Interest,
Extraordinary Item and Accounting Change 6,127 5,050 9,778 10,349
Provision for Income Taxes 3,255 3,019 5,765 6,508
Income Before Minority Interest,
Extraordinary Item and Accounting Change 2,872 2,031 4,013 3,841
Minority Interest in Net Income of Subsidiaries 1,080 1,336 2,043 2,752
Income Before Extraordinary Item and
Accounting Change 1,792 695 1,970 1,089
Extraordinary Item - (3,448) - (3,448)
Cumulative Effect of Accounting Change - - 1,876 -
Net Income (Loss) $ 1,792 $ (2,753) $ 3,846 $ (2,359)
Net Income (Loss) Per Share:
Primary Per Share Before Extraordinary Item
and Cumulative Effect of Accounting Change $ .08 $ .03 $ .09 $ .05
Per Share Extraordinary Item - (.15) - (.15)
Per Share Cumulative Effect of Accounting Change - - .08 -
Primary Net Income (Loss) Per Share $ .08 $(.12) $ .17 $(.10)
Fully Diluted Per Share Before Extraordinary Item
and Cumulative Effect of Accounting Change $ .05 $ .02 $ .06 $ .03
Per Share Extraordinary Item - (.11) - (.11)
Per Share Cumulative Effect of Accounting Change - - .06 -
Fully Diluted Net Income (Loss) Per Share $ .05 $(.09) $ .12 $(.08)
Weighted Average Shares Outstanding
Primary 23,074 22,570 23,074 22,570
Fully Diluted 31,456 30,204 31,456 30,204
THE INTERLAKE CORPORATION
Consolidated Balance Sheet
June 30, 1996 and December 31, 1995
(Dollars in thousands)
Assets 1996 1995
Current Assets:
Cash and cash equivalents $ 29,206 $ 41,562
Receivables, less allowances for doubtful accounts of
$2,955 at June 30, 1996 and $3,425 at December 31, 1995 131,003 132,331
Inventories - Raw materials and supplies 22,521 23,590
- Semi-finished and finished products 56,681 55,140
Other current assets 15,853 15,100
Total Current Assets 255,264 267,723
Other Assets 42,337 43,269
Property, Plant and Equipment, at cost 407,707 402,125
Less - Depreciation and amortization (259,252) (253,315)
148,455 148,810
Total Assets $446,056 $459,802
Liabilities and Shareholders' Equity (Deficit)
Current Liabilities:
Accounts payable $ 70,528 $ 75,266
Accrued liabilities 39,650 47,464
Interest payable 11,235 11,150
Accrued salaries and wages 15,534 15,648
Income taxes payable 14,799 14,665
Debt due within one year 4,231 3,759
Total Current Liabilities 155,977 167,952
Long-Term Debt 437,248 439,856
Other Long-Term Liabilities and Deferred Credits 100,721 104,516
Preferred Stock - 2,000,000 shares authorized
Convertible Exchangeable Preferred Stock - Redeemable,
par value $1 per share, issued 40,000 shares (liquidation value
$57,059 at June 30, 1996 and $54,602 at December 31, 1995) 39,155 39,155
Shareholders' Equity (Deficit):
Common stock, par value $1 per share, authorized
100,000,000 shares, issued 23,228,695 shares 23,229 23,229
Additional paid-in capital 7,247 13,504
Cost of common stock held in treasury (115,696 shares at
June 30, 1996 and 412,500 shares at December 31, 1995) (2,700) (9,625)
Accumulated deficit (289,355) (293,201)
Unearned compensation (8,110) (8,950)
Accumulated foreign currency translation adjustments (17,356) (16,634)
(287,045) (291,677)
Total Liabilities and Shareholders' Equity (Deficit) $446,056 $459,802
THE INTERLAKE CORPORATION
Consolidated Statement of Cash Flows
For the Periods Ended June 30,1996 and July 2, 1995
(In thousands)
1996 1995
(26 Wks) (27 Wks)
Cash flows from (for) operating activities:
Net income $ 3,846 $ (2,359)
Adjustments to reconcile net income to net
cash provided by operating activities:
Depreciation and amortization 10,294 10,389
Extraordinary item - 3,448
Cumulative effect of accounting change (1,876) -
Other operating adjustments 822 2,132
(Increase) decrease in working capital:
Accounts receivable 159 3,178
Inventories (1,068) (7,550)
Other current assets (842) (3,179)
Accounts payable (2,914) (3,636)
Other accrued liabilities (10,247) (8,909)
Income taxes payable 73 1,740
Total working capital change (14,839) (18,356)
Net cash provided (used) by operating activities (1,753) (4,746)
Cash flows from (for) investing activities:
Capital expenditures (10,013) (7,205)
Proceeds from disposal of PP&E 135 90
Acquisitions (310) -
Other investment flows 266 691
Net cash provided (used) by investing activities (9,922) (6,424)
Cash flows from (for) financing activities:
Proceeds from issuance of long-term debt - 110,127
Retirements of long-term debt (2,028) (106,003)
Debt issuance costs - (5,513)
Other financing flows 1,005 1,207
Net cash provided (used) by financing activities (1,023) (182)
Effect of exchange rate changes 342 (1,139)
Increase (Decrease) in cash and cash equivalents (12,356) (12,491)
Cash and cash equivalents, beginning of period 41,562 39,708
Cash and cash equivalents, end of period $ 29,206 $ 27,217
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
Note 1 - Financial Statements
The information furnished in these financial statements is unaudited.
The Registrant and its subsidiaries are referred to herein on a consolidated
basis as the Company.
Note 2 - Postretirement Benefits/Accounting Change
Based on a review of postretirement life and medical claims cost experience,
the Company changed the assumptions used to calculate the Accumulated
Postretirement Benefit Obligation (APBO) required by Statement of Financial
Accounting Standards No. 106, "Employers' Accounting for Postretirement
Benefits Other Than Pensions." The annual rate of increase of per capita
claims cost was changed from 12% in 1996, decreasing by 1% per year to 6% in
2002, to 7% in 1996, decreasing by 1/2% per year to 5% in 2000 and remaining
at that level thereafter. In addition, the method for determining expected
future medical claims was revised to reflect recent claims experience. The
previously used method applied a weighting factor to recent experience.
These actuarial assumption changes resulted in an expense reduction of $1.5
million in the second quarter of 1996.
The Company changed its method of amortizing unrecognized actuarial gains and
losses to amortize them over a five year period. The method previously used
was to amortize any unrecognized gain or loss in excess of 10% of the APBO
amount over fifteen years. This change has been accounted for as a change in
accounting principle, the cumulative effect of which was recorded as of the
beginning of the year. As a result, 1996 year-to-date income was increased
by $1.9 million.
Note 3 - Computation of Common Share Data
The weighted average number of common shares outstanding used to compute
primary net income per share was 23,074,000 for 1996 and 22,570,000 for 1995,
and for fully diluted net income per share was 31,456,000 for 1996 and
30,204,000 for 1995.
Note 4 - LIFO Inventories
The liquidation of LIFO inventories benefited income before taxes in the
first six months of 1995 by $.8 million.
Note 5 - Income Taxes
The effective tax rate was 59.0% and 62.9% for the 1996 and 1995 six month
periods, respectively. Because most of the Company's interest expense is
borne in the United States at the parent company level, the Company had
substantial taxable income in foreign and state jurisdictions. Taxes due to
foreign authorities were not offset by U.S. federal income tax benefits.
Note 6 - Environmental Matters
In connection with the reorganization of the old Interlake, Inc. (now Acme
Steel Company ("Acme")) in 1986, the Company, then newly-formed, indemnified
Acme against certain environmental liabilities relating to properties which
had been shut down or disposed of by Acme's iron and steel division prior to
the 1986 reorganization. As of June 30, 1996, the Company's reserves for
environmental liabilities totaled $3.7 million, most of which relates to the
Acme indemnification.
Based on its current estimate of its potential environmental liabilities,
including all contingent liabilities, individually and in the aggregate,
asserted and unasserted, the Company believes that the costs of environmental
matters have been fully provided for or are unlikely to have a material
adverse effect on the Company's business, future results of operations,
liquidity or consolidated financial condition. In arriving at its current
estimate of its potential environmental liabilities, the Company has relied
upon the estimates and analysis of its environmental consultants and legal
advisors, as well as its own evaluation, and has considered: the probable
scope and cost of investigations and remediations for which the Company
expects to have liability; the likelihood of the Company being found liable
for the claims asserted or threatened against it; and the risk of other
responsible parties not being able to meet their obligations with respect to
clean-ups. In estimating its potential environmental liabilities, the
Company has not taken into consideration any potential recoveries from
insurance companies, although in May 1994, the Company instituted an action
seeking a declaratory judgment against and recoveries from insurers under
policies covering nearly 30 years. The parties are in discovery and trial is
tentatively set for April 1997. The Company's estimate has not been
discounted to reflect the time-value of money, although a significant delay
in implementation of certain of the remedies thought to be probable could
result in cost estimates increasing due to inflation.
The Company's current estimates of its potential environmental liabilities
are subject to considerable uncertainty due to continuing uncertainty
surrounding one of the sites for which the Company is responsible pursuant to
its indemnity of Acme -- namely, the Superfund site on the St. Louis River in
Duluth, Minnesota (the "Duluth Site"). These uncertainties relate to both
the clean-up of certain contaminated soils at the site, as well as the
remediation of certain underwater sediments. In the light of these
uncertainties, the Company's estimates could be subject to change in the
future.
With respect to the contaminated soils, the Minnesota Pollution Control
Agency ("MPCA") on September 27, 1995, issued a Record of Decision selecting
a remedy consistent with the anticipated industrial development of the site.
The Company has contracted for, and commenced the implementation of, the
portions of the selected soils remedy for which it is responsible. Based on
estimates of consultants and work to date, the Company expects the cost of
such implementation to be between $3 million and $5 million. The Company
expects the soils remediation to be substantially completed by the end of
1996.
With respect to the underwater sediments, the MPCA has requested the Company
to undertake an investigation and to evaluate remedial alternatives. The
Company's consultants commenced this investigation in February 1996. The
Company believes that any estimate of the potential costs of remediating the
underwater sediments will not be meaningful until the investigation is
completed and possible remedial alternatives are reviewed by the Company and
the MPCA. The Company also believes that the range of reasonable remedial
alternatives for the underwater sediments includes that of taking no action,
thereby avoiding the disruption of the natural remediation of the underwater
sediments which has been underway for over 30 years. Thus, the Company
believes the minimum of the range of costs of remedial alternatives to be
zero, and to date has made provision for only the investigation, and not for
the clean-up, of underwater sediments. If after investigation a clean-up is
determined to be appropriate, the range of costs would likely be dependent in
part upon whether the remedy selected called for treating contamination in
place, which might cost several millions of dollars, or provided for removal
and treatment of contaminated sediments, which could cost tens of millions of
dollars.
In March 1996, the citizens' board of the MPCA named the successors to
certain coal tar processors at the Duluth Site (the "tar companies") as
additional responsible parties for a portion of the underwater sediments
operable unit. The Company believes that the tar companies are the cause of
a significant portion of the underwater contamination of the site, while the
tar companies to date have maintained that their contributions were minimal.
The Company's current expectation is that cash outlays related to its
outstanding reserves for environmental matters largely will be made over the
period of 1996 and 1997. If the Company ultimately determines that
additional charges are necessary in connection with the Duluth Site, the
Company believes it is likely that cash outlays would occur near the end of
the decade, or later.
Note 7 - Commitments and Contingencies
The Company is engaged in certain routine litigation arising in the ordinary
course of business. Based upon its evaluation of available information,
management does not believe that any such matters are likely, individually or
in the aggregate, to have a material adverse effect upon the Company's
business future, results of operations, liquidity or consolidated financial
condition.
On July 9, 1990, the City of Toledo, Ohio (the "City"), brought an action in
federal district court (the "Court") in Toledo against the Company, Acme
Steel Company ("Acme" or the "old Interlake" and, together with the Company,
the "Interlake defendants"), Beazer Materials and Services, Inc., succeeded
by Beazer East, Inc. ("Beazer") and Toledo Coke Corporation ("Toledo Coke")
in connection with the alleged contamination of a 1.7 acre parcel of land the
City had purchased from Toledo Coke for purposes of widening a road. The
City alleged various claims under the Resource Conservation Recovery Act
("RCRA") and the Comprehensive Environmental Response, Compensation and
Liability Act ("CERCLA"), and under common law. The Company's alleged
liability arises from its indemnification obligations with respect to Acme,
which as the old Interlake operated coke ovens and by-product recovery
facilities on the site from 1930 through 1978. In 1978 the old Interlake
sold the coke plant to Koppers Company, Inc., which was later acquired by
Beazer, and which agreed to indemnify the Interlake defendants against
environmental liabilities. Koppers, in turn, sold the facility to Toledo
Coke. The Interlake defendants cross-claimed against Beazer under its
indemnity. In June 1995, the Court denied the City's motion for an
injunction under RCRA compelling the defendants to clean up the Toledo Coke
site. The City is appealing the Court's ruling. In January 1996, the Court
ruled that the Interlake defendants were liable under CERCLA for costs of
investigation incurred by the City, and for future costs of remediation to
the extent they are consistent with the National Contingency Plan under
Superfund. The City represents its costs of investigation to have been
approximately $.4 million and the costs of future remediation to be between
$4 million and $10 million. In between the RCRA and the CERCLA rulings, the
Court, in November 1995 granted the Interlake defendants' motion for summary
judgment seeking indemnification by Beazer for the liabilities alleged by the
City. Beazer has appealed the indemnification ruling.
On March 10, 1995, SC Holdings, Inc., a subsidiary of Waste Management
International Plc ("SC Holdings"), filed a complaint in federal district
court in Trenton, New Jersey, against Hoeganaes Corporation, an Interlake
subsidiary, and numerous other defendants, seeking to recover amounts
expended or to be expended in the remediation of the Cinnaminson Groundwater
Contamination Site in Burlington County, New Jersey. SC Holdings claims to
have spent approximately $10 million in investigation and remediation, and
purportedly estimates the total costs of investigation and remediation to be
approximately $60 million. The site is a broadly-defined Superfund site
which encompasses a landfill formerly operated by SC Holdings and may also
include the groundwater under Hoeganaes' Riverton, New Jersey, facility.
Hoeganaes may have shipped certain materials to the landfill. SC Holdings
alleges that Hoeganaes has liability as both an owner/operator and a
generator. In November 1995, the named defendants filed a complaint against
numerous third-party defendants, bringing the total number of defendants in
the matter to approximately 100. The parties to the litigation are presently
engaged in a court-supervised non-binding allocation process which is
presently expected to last until mid-1997. The Company believes it has
meritorious defenses to both of the alleged bases of liability.
Note 8 - Extraordinary Item
During the second quarter of 1995, the Company issued $100.0 million of 12%
Senior Notes due in 2001, the proceeds of which were used to retire a portion
of the Company's bank debt. Debt issuance costs of $3.4 million associated
with the retired debt were written off and shown as an extraordinary item.
Note 9 - Sale of Packaging Businesses
The Company is presently in negotiation for the potential sale of its
packaging businesses. Any sale would be subject to a number of conditions,
including the signing of definitive purchase agreements, the obtaining by the
buyer of firm financing commitments, the completion of governmental approval
processes, and the approval of certain other third parties, including the
Company's bank group. If consummated, the transaction is expected to close
by September.
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF RESULTS OF OPERATIONS AND
FINANCIAL CONDITION
Results of Operations
Second Quarter 1996 Compared with Second Quarter 1995
Net sales of $209.9 million in the quarter ended June 30, 1996, compared with
net sales of $206.4 million in the prior year period. Sales in the
Engineered Materials segment for the second quarter increased 8% to $67.5
million, due to higher fabrication and repair sales at Aerospace Components.
Sales in the Handling/Packaging Systems segment declined 1% to $142.4
million, due mainly to lower Handling sales in North America and the effect
of exchange rate changes which generated a sales decrease of $2.7 million
compared with 1995. Operating profit increased 5% to $18.1 million from
$17.3 million in 1995. Net income of $1.8 million, or $.05 per share, for
the 1996 quarter compared with a net loss of $2.8 million, or $.09 per share,
for the second quarter of 1995.
Net results in both periods were affected by adjustments. Based on favorable
claims experience the Company changed the assumptions used in the calculation
of the liability for postretirement life and medical benefits, which resulted
in a favorable expense adjustment of $1.5 million which affected both
operating and non-operating income in the second quarter of 1996. In the
second quarter of 1995, an extraordinary item of $3.4 million was recorded to
write off deferred debt issuance costs related to the early retirement of a
portion of the Company's bank debt.
Segment Results
The Company's businesses are organized into two segments: Engineered
Materials and Handling/ Packaging Systems. Businesses in Engineered
Materials are Special Materials (ferrous metal powders) and Aerospace
Components (precision aerospace component fabrication and aviation repair).
Businesses in Handling/Packaging Systems are Handling (U.S. and international
material handling operations) and Packaging (U.S. and international packaging
operations).
Second Quarter Segment Results
Net Sales Operating Profit
1996 1995 1996 1995
(in millions)
Engineered Materials
Special Materials $ 43.8 $ 45.4
Aerospace Components 23.7 17.1
67.5 62.5 $11.2 $10.4
Handling/Packaging Systems
Handling 107.1 107.9
Packaging 35.3 36.0
142.4 143.9 7.7 7.6
Corporate Items (.8) (.7)
Consolidated Totals $209.9 $206.4 $18.1 $17.3
Engineered Materials
Sales in the Engineered Materials segment for the second quarter increased 8%
to $67.5 million, due to higher fabrication and repair sales at Aerospace
Components.
For the second quarter, Special Materials' metal powder sales decreased 3%
compared with the same period last year, as volume was affected by lower
shipments to the automotive industry in the aftermath of the General Motors
strike. Profit declined 8% for the quarter, due mainly to the effects of
lower volume, partially offset by an adjustment in expense for postretirement
life and medical benefits.
Aerospace Components' second quarter sales increased 39% compared with the
1995 period, due to significantly higher sales of fabricated components and
improved repair volume. Profit for the quarter increased 111%, due to the
higher volume, a favorable product mix in aviation repair and improved
manufacturing performance.
Order backlogs in this segment were $151.3 million at the end of the quarter,
down from $174.6 million at the end of the second quarter of 1995. Special
Materials' backlog was down 49%, due to lower order rates and customer
inventory reduction efforts. Aerospace Components' backlog increased 7%,
including a significant follow-on order for the Rolls-Royce Trent 800 engine
program.
Handling/Packaging Systems
Sales in the Handling/Packaging Systems segment declined 1% to $142.4
million, due mainly to lower Handling sales in North America and the effect
of exchange rate changes.
For the second quarter, Handling's sales (at comparable exchange rates)
increased 1% compared with the 1995 period. Sales increased 6% in both
Europe and the Asia Pacific region, while North American sales were down 4%.
Handling's profit was down 6% (at comparable exchange rates) compared with
the second quarter of 1995. Lower margins in Europe and Asia Pacific caused
by competitive conditions were partially offset by lower SG&A costs in
Europe. Lower steel and operating costs in North America more than offset
the impact of lower sales.
Packaging's second quarter 1996 sales (at comparable exchange rates) declined
1% compared with the 1995 period. Profit increased 30%, reflecting improved
margins at most units.
Order backlogs in this segment were $102.5 million at the end of the second
quarter, up from $99.3 million at the end of the second quarter of 1995 (at
comparable exchange rates), as the backlog at Handling Asia Pacific reached a
record level on strong Pacific Rim orders.
First Half 1996 Compared with First Half 1995
For the first six months of 1996, net sales declined 1% to $409.9 million
from $413.3 million, however, 1995 was a 27-week period and 1996 was a 26-
week period. Also, changes in exchange rates generated a sales decrease of
$3.7 million compared with 1995. Operating profit dropped 4% to $34.6
million from $36.0 million a year earlier due to the shorter period.
Selling, general and administrative expenses were 15.1% of sales for the
first half of 1996, compared with 15.5% of sales for the 1995 period. Net
income of $3.8 million, or $.12 per share, compared with a net loss for the
1995 period of $2.4 million, or $.08 per share. In addition to the
postretirement life and medical assumption changes described above, the 1996
first half results included a $1.9 million ($.06 per share) benefit from the
cumulative effect of a change in accounting for postretirement life and
medical benefits calculated under FAS No. 106, "Employers' Accounting for
Postretirement Benefits Other Than Pensions."
Net income in the first half of 1995 was reduced by the $3.4 million ($.11
per share) extraordinary item. Income before the accounting change was $2.0
million, or $.06 per share, in the 1996 period, up from income before the
extraordinary item of $1.1 million, or $.03 per share, in the 1995 period.
Six Month Segment Results
Net Sales Operating Profit
1996 1995 1996 1995
(in millions)
Engineered Materials
Special Materials $ 87.1 $ 93.5
Aerospace Components 42.1 33.8
129.2 127.3 $20.3 $21.2
Handling/Packaging Systems
Handling 210.6 213.8
Packaging 70.1 72.2
280.7 286.0 15.2 15.8
Corporate Items (.9) (1.0)
Consolidated Totals $409.9 $413.3 $34.6 $36.0
Engineered Materials
For the first six months of 1996, sales were up 1% from 1995, and profit
decreased 4%. Special Materials' sales declined 7% and profit declined 17%.
As in the quarter, volume was affected by lower shipments to the automotive
industry. Aerospace Components' sales increased 25% and profit increased 97%
due to higher fabrication and repair volume, a favorable product mix in
aviation repair and improved manufacturing performance.
Handling/Packaging Systems
Sales for the first six months of 1996 decreased 2% from 1995, and profit
decreased 4%. Handling sales (at comparable exchange rates) were even with
the 1995 period and profit was down 5% due to the same factors noted above in
the comments on the second quarter. Packaging's sales (at comparable
exchange rates) declined 2%, with higher sales at the U.K. operations offset
by lower North American sales. Profit increased 6% due to higher selling
prices, lower raw material costs and lower SG&A expenses.
Financial Condition
The Company's total debt at the end of the second quarter was $441.5 million,
down $2.1 million from year-end 1995. Cash totaled $29.2 million at the end
of the quarter, compared with $41.6 million at the end of 1995, reflecting
increased working capital requirements and capital expenditures. Capital
expenditures of $6.3 million during the quarter brought the year-to-date
total to $10.0 million, compared with $7.2 million for the first six months
of 1995. The Company anticipates that 1996 capital spending will be
approximately $27.0 million.
Under its bank credit agreement, the Company has available revolving
facilities of up to an additional $40.2 million over the June 30, 1996
revolving indebtedness. Based on current levels of performance, the Company
believes its cash resources and the bank credit facility provide adequate
liquidity.
Sale of Packaging Businesses
As previously announced, the Company is presently in negotiation for the
potential sale of its packaging businesses. Any sale would be subject to a
number of conditions, including the signing of definitive purchase
agreements, the obtaining by the buyer of firm financing commitments, the
completion of governmental approval processes, and the approval of certain
other third parties, including the Company s bank group. If consummated, the
transaction is expected to close by September.
PART II. - OTHER INFORMATION
ITEM 1. LEGAL PROCEEDINGS
The nature of the Company's business is such that it is regularly involved in
legal proceedings incidental to its business. None of these proceedings is
material within the meaning of regulations of the Securities and Exchange
Commission.
The Company is a party in certain litigation and a proceeding before a
governmental agency which relate to the contamination of the environment.
These matters are described in Note 6 and Note 7 of Notes to Consolidated
Financial Statements included herein. Reference is also made to the
Company's Annual Report on Form 10-K for the fiscal year ended December 31,
1995, Part I, Item 3--Legal Proceedings.
ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
On April 25, 1996, at the annual meeting of the Corporation, John A. Canning,
Jr., James C. Cotting and Quentin C. McKenna were reelected as directors to
serve until the 1999 annual meeting of the Corporation. The vote tally was:
For Withheld Broker non-votes
Election of Directors:
John A. Canning, Jr. 18,167,881 1,405,161 0
James C. Cotting 18,159,127 1,413,915 0
Quentin C. McKenna 18,157,128 1,415,914 0
ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K
(a) Exhibits
Exhibit 18. Letter re: Change in Accounting Principle
Exhibit 27. Financial Data Schedule
(b) Reports on Form 8-K
Current Report on Form 8-K dated April 15, 1996.
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.
THE INTERLAKE CORPORATION
July 26, 1996 /s/STEPHEN GREGORY
Stephen Gregory
Vice President - Finance
and Chief Financial Officer