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): October 4, 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)
(630) 852-8800
(Registrant's telephone number, including area code)
Item 2 - Acquisition or Disposition of Assets
As used herein, the term "Company" means The Interlake Corporation and its
subsidiaries. The terms "Interlake" and "Registrant" mean The Interlake
Corporation, the parent company.
On October 4, 1996, The Interlake Corporation (the "Company") sold its Packaging
businesses ("Packaging") to Samuel Manu-Tech Inc. ("SMT") of Etobicoke, Ontario,
Canada, or entities controlled by SMT, for an aggregate net cash purchase price
of $104.4 million subject to potential downward adjustments based on the net
worth of Packaging. The purchase price was based upon a multiple of operating
earnings and was agreed to after arms-length negotiations between the parties
and approved by their respective boards of directors. The transaction included
the sale in the United States of substantially all of the assets of Interlake
Packaging Corporation ("Interlake Packaging") to Samuel Strapping Systems
(Tennessee), Inc. ("Samuel Tennessee"), and the assumption by Samuel Tennessee
of substantially all of the liabilities of Interlake Packaging; the sale in
Canada by Interlake Packaging and The Interlake Companies, Inc. ("Interlake
Companies") to SMT of all of the outstanding shares of Acme Strapping Inc.; and
the sale in England by Interlake Companies of all of the outstanding shares of
Precis (935) Limited to Samuel Strapping Systems (U.K.), Inc.
Item 7 - Pro Forma Financial Information
(b) Pro forma financial information
This report includes unaudited pro forma condensed consolidated statements of
income for the fiscal year ended December 31, 1995 and the six months ended June
30, 1996, and an unaudited pro forma condensed consolidated balance sheet as of
June 30, 1996, based on the historical financial statements of the Company and
giving pro forma effect to the disposition described above as if it had occurred
at the beginning of the period or as of the date presented, as applicable. In
the opinion of management, all adjustments have been made that are necessary to
present fairly the pro forma data. The pro forma information is presented for
informational purposes only, and is not necessarily indicative of the results
that would have been reported had the sale actually occurred on the dates
specified, nor is it indicative of the Company's future results.
THE INTERLAKE CORPORATION
UNAUDITED PRO FORMA CONDENSED CONSOLIDATED STATEMENT OF INCOME
For the Six Months Ended June 30, 1996
(000 omitted)
Actual Pro Forma
The Adjustment The
Interlake Packaging for Interlake
Corporation Operations Disposition Corporation
Net Sales $409,923 $70,149 $ 99(1) $339,873
Cost of Product Sold 313,343 50,762 99(1) 262,680
Selling & Administrative Expense 62,013 11,750 - 50,263
Operating Profit 34,567 7,637 - 26,930
Non-operating (Income) Expense (1,267) 12 - (1,279)
Earnings Before Interest and Taxes 35,834 7,625 - 28,209
Interest Expense (net) 26,056 - (3,222)(2) 22,834
Income Before Taxes, Minority
Interest, Extraordinary Item and
Accounting Change 9,778 7,625 3,222 5,375
Provision for Income Taxes 5,765 2,566 391(3) 3,590
Minority Interest in Net Income of
Subsidiaries 2,043 - - 2,043
Income from Continuing Operations
Before Extraordinary Item and
Accounting Change $ 1,970 $ 5,059 $2,831 $ (258)
Income from Continuing Operations
per Share:
Primary $.09 $(.01)
Fully Diluted $.06 $(.01)
Average Shares Outstanding:
Primary 23,074 23,074
Fully Diluted 31,456 31,456
THE INTERLAKE CORPORATION
UNAUDITED PRO FORMA CONDENSED CONSOLIDATED STATEMENT OF INCOME
For the Year Ended December 31, 1995
(000 omitted)
Actual Pro Forma
The Adjustment The
Interlake Packaging for Interlake
Corporation Operations Disposition Corporation
Net Sales $831,103 $141,374 $ 184(1) $689,913
Cost of Product Sold 634,386 104,105 184(1) 530,465
Selling & Administrative Expense 125,139 23.295 - 101,844
Operating Profit 71,578 13,974 - 57,604
Non-operating (Income) Expense (1,064) (21) - (1,043)
Earnings Before Interest and Taxes 72,642 13,995 - 58,647
Interest Expense (net) 52,540 - (6,834)(2) 45,706
Income Before Taxes, Minority
Interest, Extraordinary Item and
Accounting Change 20,102 13,995 6,834 12,941
Provision for Income Taxes 11,356 4,786 845(3) 7,415
Minority Interest in Net Income of
Subsidiaries 4,533 - - 4,533
Income from Continuing Operations
Before Extraordinary Item and
Accounting Change $ 4,213 $ 9,209 $5,989 $ 993
Income from Continuing Operations
per Share:
Primary $.18 $.04
Fully Diluted $.14 $.03
Average Shares Outstanding:
Primary 22,691 22,691
Fully Diluted 30,520 30,520
THE INTERLAKE CORPORATION
UNAUDITED PRO FORMA CONDENSED CONSOLIDATED BALANCE SHEET
JUNE 30, 1996
(000 omitted)
Actual Pro Forma
The Adjustment The
Interlake Packaging for Interlake
Corporation Operations Disposition Corporation
Assets:
Current Assets:
Cash and cash equivalents $ 29,206 $ - $ 6,959(4) $ 36,165
Accounts receivables 131,003 23,018 - 107,985
Inventories 79,202 21,386 - 57,816
Other current assets 15,853 2,203 - 13,650
255,264 46,607 6,959 215,616
Other Assets 42,337 2,851 - 39,486
Property, Plant & Equipment 148,455 10,638 - 137,817
Total Assets $446,056 $60,096 $ 6,959 $392,919
Liabilities and Shareholders' Equity (Deficit):
Current Liabilities:
Accounts payable and accruals $136,947 $19,438 $ - $117,509
Income taxes payable 14,799 3,307 - 11,492
Current maturities long term debt 4,231 - - 4,231
155,977 22,745 - 133,232
Long Term Debt 437,248 - (75,607)(4) 361,641
Other Long Term Liabilities and
Deferred Credits 100,721 6,041 - 94,680
Parent Company Investment - 31,310 31,310(5) -
Convertible Exchangeable Preferred
Stock - Redeemable 39,155 - - 39,155
Shareholders' Equity (Deficit) (287,045) - 51,256(6) (235,789)
Total Liabilities and Shareholders' Equity $446,056 $60,096 $ 6,959 $392,919
THE INTERLAKE CORPORATION
NOTES TO UNAUDITED CONDENSED CONSOLIDATED PRO FORMA FINANCIAL STATEMENTS
A. Unaudited Pro Forma Condensed Consolidated Statements of Income
The unaudited Pro Forma Condensed Consolidated Statements of Income
give effect to the sale of Packaging, which occurred on October 4,
1996, as though such sale had taken place as of the beginning of the
respective periods. The unaudited Pro Forma Condensed Consolidated
Statements of Income exclude the net effects of the gain of
approximately $40.0 million on the sale of Packaging.
(1) Restores eliminated sales and cost of products sold between Packaging
and the Company's other operations.
(2) Adjusts net interest expense to reflect assumed reduction in long term
debt out of the proceeds from the Packaging sale.
(3) Adjusts income tax expense to reflect the tax effect of the pro forma
adjustments, excluding the tax effect of the gain on the sale. In
1995 and 1996, the Company reported consolidated income tax expense
that consisted primarily of current and deferred taxes on income
earned in foreign and state jurisdictions. The pro forma adjustment
to income tax expense arises in respect of interest allocated to
Packaging's foreign operations.
B. Unaudited Pro Forma Condensed Consolidated Balance Sheet
The unaudited Pro Forma Condensed Consolidated Balance Sheet as of
June 30, 1996 gives effect to the sale of Packaging, which occurred on
October 4, 1996, as though such sale had taken place as of June 30,
1996.
(4) Assumes application of the net proceeds from the sale of Packaging as
follows (in millions):
Selling Price $104.4
Expenses and Other Adjustments (7.0)
Tax Expense (16.8)
Reduction in Long Term Debt (75.6)
Other Items 2.0
Net Change in Cash Per Pro Forma Balance Sheet $ 7.0
(5) Reflects elimination of Parent Company investment in Packaging.
(6) Reflects gain on the sale of Packaging and elimination of related
accumulated foreign currency translation adjustments.
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.
THE INTERLAKE CORPORATION
/s/ Stephen Gregory
Stephen Gregory
Vice President - Finance
and Chief Financial Officer
October 21, 1996