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 19, 1997
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 December 19, 1997, the Company sold its European and Asia-Pacific Handling
businesses to Extondew Limited and Extonbrook Limited. Extondew and
Extonbrook are English companies organized by Apax Partners & Co. Ventures
Limited, a U.K. based private equity company. The sale was structured as a
sale of all of the shares of Dexion Group Ltd., which was the holding company
for the European business, and all of the shares of Dexion (Australia) Pty
Ltd., Dexion, Inc., and Dexion (North Asia) Ltd., the three entities holding
the Asia-Pacific business. The aggregate purchase price for the shares of
the four purchased companies was $69.4 million. In addition, the disposed
of entities had outstanding indebtedness (net of cash) of $30.3 million as
of the sale date, which was paid or assumed by the buyer. The purchase price
was agreed to after arms-length negotiations, and is believed to be based
upon a multiple of earnings. The transaction was approved by the Company's
board of directors.
Interlake remains in the Handling business through Interlake Material
Handling, Inc., the current operations of which are concentrated in North
America.
Item 7 - Financial Statements and Exhibits
(b) Pro Forma Financial Information
The following unaudited pro forma consolidated financial statements are filed
with this report:
Unaudited Pro Forma Condensed Consolidated Statement of Operations:
Nine Months ended September 28, 1997..........................Page 3
Year ended December 29, 1996..................................Page 4
Unaudited Pro Forma Condensed Condolidated Balance Sheet...........Page 5
This report includes unaudited pro forma condensed consolidated statements
of income for the fiscal year ended December 29, 1996 and the nine months
ended September 28, 1997, and an unaudited pro forma condensed consolidated
balance sheet as of September 28, 1997, 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.
(c) Exhibits
Exhibit 2.1 Share Purchase Agreement by and among The Interlake
Companies, Inc., Interlake DRC Limited, The Interlake
Corporation, Extondew Limited, and Extonbrook Limited,
dated as of December 19, 1997
THE INTERLAKE CORPORATION
UNAUDITED PRO FORMA CONDENSED CONSOLIDATED STATEMENT OF OPERATIONS
For the Nine Months Ended September 28, 1997
(000 omitted)
Historical Pro Forma
The Adjustment The
Interlake Disposed for Interlake
Corporation Operations Disposition Corporation
Net Sales from Continuing Operations $551,509 $195,905 $ 537 (1) $356,141
Cost of Product Sold 433,218 153,247 537 (1) 280,508
Selling & Administrative Expense 74,293 35,345 - 38,948
Operating Profit 43,998 7,313 - 36,685
Non-operating (Income) Expense (983) (340) - (643)
Earnings Before Interest and Taxes 44,981 7,653 - 37,328
Interest Expense (net) 32,229 83 (5,205) (2) 26,941
Income from Continuing Operations
Before Taxes, Minority Interest,
Extraordinary Loss and
Accounting Change 12,752 7,570 5,205 10,387
Provision for Income Taxes 8,011 2,928 1,433 (3) 6,516
Minority Interest in Net Income of
Subsidiaries 3,501 - - 3,501
Income from Continuing Operations
Before Extraordinary Loss and
Accounting Change $ 1,240 $ 4,642 $ 3,772 $ 370
Income from Continuing Operations
per Share $.04 $.01
Average Shares Outstanding 32,479 32,479
THE INTERLAKE CORPORATION
UNAUDITED PRO FORMA CONDENSED CONSOLIDATED STATEMENT OF OPERATIONS
For the Year Ended December 29, 1996
(000 omitted)
Historical Pro Forma
The Adjustment The
Interlake Disposed for Interlake
Corporation Operations Disposition Corporation
Net Sales from Continuing Operations $709,585 $258,803 $ 861 (1) $451,643
Cost of Product Sold 546,151 200,111 861 (1) 346,901
Selling & Administrative Expense 99,739 50,097 - 49,642
Operating Profit 63,695 8,595 - 55,100
Non-operating (Income) Expense (2,088) (942) - (1,146)
Earnings Before Interest and Taxes 65,783 9,537 - 56,246
Interest Expense (net) 45,884 394 (6,714) (2) 38,776
Income from Continuing Operations
Before Taxes, Minority Interest,
Extraordinary Loss and
Accounting Change 19,899 9,143 6,714 17,470
Provision for Income Taxes 8,481 3,078 1,252 (3) 6,655
Minority Interest in Net Income of
Subsidiaries 3,893 - - 3,893
Income from Continuing Operations
Before Extraordinary Loss and
Accounting Change $ 7,525 $ 6,065 $ 5,462 $ 6,922
Income from Continuing Operations
per Share $.24 $.22
Average Shares Outstanding 31,670 31,670
THE INTERLAKE CORPORATION
UNAUDITED PRO FORMA CONDENSED CONSOLIDATED BALANCE SHEET
SEPTEMBER 28, 1997
(000 omitted)
Historical Pro Forma
The Adjustment The
Interlake Disposed for Interlake
Corporation Operations Disposition Corporation
Assets:
Current Assets:
Cash and cash equivalents $ 40,223 $ - $ 7,388 (4) $ 47,611
Accounts receivables 128,543 48,586 - 79,957
Inventories 61,356 22,915 - 38,441
Other current assets 13,250 4,058 - 9,192
243,372 75,559 7,388 175,201
Other Assets 44,953 2,594 - 42,359
Property, Plant & Equipment 147,555 26,366 - 121,189
Total Assets $ 435,880 $104,519 $ 7,388 $ 338,749
Liabilities and Shareholders' Equity (Deficit):
Current Liabilities:
Accounts payable and accruals $ 123,251 $ 54,001 $ - $ 69,250
Income taxes payable 33,953 2,792 - 31,161
Current maturities long term debt 10,331 6,476 - 3,855
167,535 63,269 - 104,266
Long Term Debt 367,631 1,248 (70,700) (4) 295,683
Other Long Term Liabilities and
Deferred Credits 91,223 6,624 - 84,599
Parent Company Investment - 33,378 33,378 (5) -
Convertible Exchangeable Preferred
Stock - Redeemable 39,155 - - 39,155
Shareholders' Equity (Deficit) (229,664) - 44,710 (6) (184,954)
Total Liabilities and Shareholders' Equity $ 435,880 $104,519 $ 7,388 $ 338,749
THE INTERLAKE CORPORATION
NOTES TO UNAUDITED CONDENSED CONSOLIDATED PRO FORMA FINANCIAL STATEMENTS
A. Unaudited Pro Forma Condensed Consolidated Statements of Operations
The Unaudited Pro Forma Condensed Consolidated Statements of
Operations give effect to the sale of the European and Asia-Pacific
Handling businesses, which occurred on December 19, 1997, as though
such sale had taken place as of the beginning of the respective
periods. The Unaudited Pro Forma Condensed Consolidated Statements
of Operations exclude the net effect of the gain of approximately
$24.0 million on the sale. In addition, the Unaudited Pro Forma
Condensed Consolidated Statements of Operations exclude Extraordinary
Losses, net of applicable income tax benefits, of $.9 million that
would result from the assumed pay down of $70.7 million of
indebtedness.
(1) Restores eliminated sales and cost of products sold between the
disposed operations and the Company's other operations.
(2) Adjusts net interest expense to reflect assumed reduction in long
term debt from the proceeds of the 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
1996 and 1997, the Company reported consolidated income tax expense
that consisted primarily of current and deferred taxes on income
earned in foreign and state jurisdictions and
provided for additional amounts related to open federal return tax
years. The pro forma adjustment to income tax expense results from
the interest reduction caused by the assumed pay down of long term
debt.
B. Unaudited Pro Forma Condensed Consolidated Balance Sheet
The Unaudited Pro Forma Condensed Consolidated Balance Sheet as of
September 28, 1997 gives effect to the sale of the European and
Asia-Pacific Handling businesses, which occurred on December 19, 1997, as
though such sale had taken place as of September 28, 1997.
(4) Assumes application of the net proceeds from the sale of the European
and Asia-Pacific Handling businesses as follows (in millions):
Selling Price $ 99.7
Expenses and Other Adjustments (4.0)
Tax Expense (11.3)
Reduction in Long Term Debt (70.7)
Assumption of Debt by Buyer (6.3)
Net Change in Cash per Pro Forma Balance Sheet $ 7.4
(5) Reflects elimination of Parent Company investment in the
disposed operations.
(6) Reflects gain on the sale of European and Asia-Pacific Handling
businesses, elimination of related accumulated foreign currency
translation adjustments and the change in outstanding
indebtedness (net of cash) between September 28, 1997 and the
date of the sale.
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
January 5, 1998