SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, DC 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): March 29, 1996
Tredegar Industries, Inc.
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(Exact Name of Registrant as Specified in its Charter)
Virginia 1-10258 54-1497771
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(State or Other Jurisdiction of (Commission File (IRS Employer
Incorporation) Number) Identification No.)
1100 Boulders Parkway
Richmond, Virginia 23225
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(Address of Principal Executive Offices) (Zip Code)
Registrant's telephone number including area code: (804) 330-1000
Item 2. Acquisition or Disposition of Assets.
On March 29, 1996, Tredegar Industries, Inc. ("Tredegar" or the
"Company") sold all of the outstanding capital stock of its injection molding
subsidiary, Tredegar Molded Products Company, including Polestar Plastics
Manufacturing Company (together "Molded Products"), to Precise Technology, Inc.
("Precise") for cash consideration of $57.5 million. In addition, Tredegar
received unregistered cumulative redeemable preferred stock with a face amount
of $2.5 million, which is not currently marketable. Dividends on the preferred
stock are payable quarterly at an annual rate of 7% beginning June 30, 1996. The
preferred stock is redeemable in full on March 29, 2007 or earlier upon the
occurrence of certain events. Both dividends and redemption are subordinated to
other outstanding debt of Precise.
Molded Products manufactures plastic packaging components for a variety
of personal care, industrial, pharmaceutical and medical markets. Precise is
headquartered in Pittsburgh, Pennsylvania.
Tredegar will record an after-tax gain related to the sale of Molded
Products in the first quarter of 1996. The gain will be partially offset by a
first-quarter charge related to an anticipated loss on the Company's divestiture
of Brudi, Inc. and its subsidiaries (together "Brudi"), which is expected to
occur during the second quarter of 1996. Brudi manufactures masts, carriages and
uprights for forklift trucks. The net gain related to these developments will be
disclosed in the Company's Quarterly Report on Form 10-Q for the three-months
ended March 31, 1996, to be filed by May 15, 1996.
Proceeds from the sale of Molded Products will be invested in cash
equivalents until other opportunities, in existing businesses or elsewhere, are
identified.
Item 7. Financial Statements, Pro Forma Financial Information and Exhibits.
(b) Pro Forma Financial Information.
Introduction to Pro Forma Consolidated Financial Information
Set forth below is pro forma consolidated financial information with
respect to Tredegar and its divestiture of Molded Products. Historical financial
information was excerpted or derived from the audited financial information
contained in Tredegar's Annual Report on Form 10-K for the fiscal year ended
December 31, 1995. The historical information below is qualified in its entirety
by reference to such report and the financial information and related notes
contained therein.
The pro forma consolidated balance sheet presents the financial
position of Tredegar as of December 31, 1995, assuming that Tredegar on that
date sold Molded Products for cash consideration of $57.5 million and invested
related after-tax proceeds in cash equivalents. No value has been assigned by
Tredegar to the preferred stock received from Precise due to the uncertainty of
redemption. Consistent therewith, dividend income on such stock, which will not
be recognized by Tredegar until received, has not been reflected in the pro
forma consolidated statement of income.
The pro forma consolidated statement of income presents the operating
results for the Company for the year ended December 31, 1995, assuming that at
the beginning of the period Tredegar sold Molded Products for cash consideration
of $57.5 million. In accordance with Securities and Exchange Commission rules
and regulations, no pro forma interest income is recognized in the pro forma
consolidated statement of income for funds assumed invested in cash equivalents.
The pro forma financial information of the Company is unaudited and
does not purport to be indicative of the future results or financial position of
the Company or the net income and financial position that would actually have
been attained had the pro forma transactions occurred on the dates or for the
period indicated. See note (3) of the notes to pro forma financial statements
for net income and earnings per common and dilutive common equivalent share
adjusted for unusual items affecting the comparability of operating results and
pro forma interest income.
Tredegar Industries, Inc.
Pro Forma Consolidated Balance Sheet (1)
December 31, 1995
(In Thousands)
(Unaudited)
Pro Forma
Historical Adjust.(2) Pro Forma
Assets
Current assets:
Cash and cash equivalents $ 2,145 $ 48,130 $ 50,275
Accounts and notes receivable 71,673 (9,884) 61,789
Inventories 33,148 (6,927) 26,221
Income taxes recoverable 2,179 - 2,179
Deferred income taxes 14,882 (714) 14,168
Prepaid expenses and other 2,375 (57) 2,318
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Total current assets 126,402 30,548 156,950
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Property, plant and equipment, at cost 326,526 (66,764) 259,762
Less accumulated depreciation and amortization 204,074 (40,860) 163,214
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Net property, plant and equipment 122,452 (25,904) 96,548
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Other assets and deferred charges 35,186 1,796 36,982
Goodwill and other intangibles 30,012 (687) 29,325
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Total assets $ 314,052 $ 5,753 $ 319,805
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Liabilities and Shareholders' Equity
Current liabilities:
Accounts payable $ 31,105 $ (4,268) $ 26,837
Accrued expenses 38,648 (2,239) 36,409
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Total current liabilities 69,753 (6,507) 63,246
Long-term debt 35,000 - 35,000
Deferred income taxes 22,218 (1,209) 21,009
Other noncurrent liabilities 16,560 (703) 15,857
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Total liabilities 143,531 (8,419) 135,112
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Shareholders' equity:
Common stock, no par value 112,908 - 112,908
Foreign currency translation adjustment 445 - 445
Retained earnings 57,168 14,172 71,340
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Total shareholders' equity 170,521 14,172 184,693
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================ ================ ================
Total liabilities and shareholders' equity $ 314,052 $ 5,753 $ 319,805
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See accompanying notes to pro forma financial statements.
Tredegar Industries, Inc.
Pro Forma Consolidated Statement of Income (1)
For the Year Ended December 31, 1995
(In Thousands, Except Per-Share Amounts)
(Unaudited)
Pro Forma
Historical Adjust.(3) Pro Forma
Revenues:
Net sales $ 589,454 $ (84,911) $ 504,543
Other income (expenses), net (669) - (669)
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Total 588,785 (84,911) 503,874
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Costs and expenses:
Cost of goods sold 490,510 (77,973) 412,537
Selling, general and administrative 48,229 (5,090) 43,139
Research and development 8,763 - 8,763
Interest 3,039 - 3,039
Unusual items (3) (78) - (78)
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Total 550,463 (83,063) 467,400
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Income before income taxes 38,322 (1,848) 36,474
Income taxes 14,269 (721) 13,548
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Net income $ 24,053 $ (1,127) $ 22,926
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Earnings per common and dilutive common
equivalent share $ 1.80 $ (0.09) $ 1.71
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Shares used to compute earnings per
common and dilutive common equivalent
share 13,370 13,370 13,370
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See accompanying notes to pro forma financial statements.
Tredegar Industries, Inc.
Notes to Pro Forma Financial Statements
(Unaudited)
(1) The pro forma financial information presented does not purport to be
indicative of the future results or financial position of the Company
or the net income and financial position that would actually have been
attained had the pro forma transactions occurred on the dates or for
the period indicated. See note (3) for net income and earnings per
common and dilutive common equivalent share adjusted for unusual items
affecting the comparability of operating results and pro forma interest
income.
(2) Pro forma adjustments to the consolidated balance sheet as of December
31, 1995 reflect (i) the pro forma after-tax proceeds from the sale of
Molded Products ($48.1 million), (ii) the removal of the financial
reporting basis of Molded Products as of December 31, 1995 ($35.2
million), and (iii) the pro forma after-tax gain on the sale of Molded
Products computed using the financial reporting basis as of December
31, 1995 ($14.2 million, including an after-tax gain of $1.2 million on
the curtailment of participation by Molded Products employees in
Tredegar's benefit plans). Further details regarding the pro forma
adjustments are provided below:
(In
Thousands)
Cash consideration received on the sale of Molded Products $ 57,500
Estimated transaction costs 3,602
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Proceeds from the sale of Molded Products after transaction
costs 53,898
Financial reporting basis of Molded Products
as of December 31, 1995 35,201
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Pro forma pretax gain on the sale before curtailment of
benefit plans 18,697
Pretax gain recognized for the curtailment of participation by
Molded Products employees in Tredegar's:
Defined benefit plan 1,796
Postretirement health care and life insurance plans 243
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Pro forma pretax gain on the sale of Molded Products 20,736
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Pro forma income taxes:
Current (including an estimated tax benefit of $1,055 for
tax basis in excess of financial reporting basis) 5,768
Deferred (39% of curtailment gains) 796
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Total income taxes 6,564
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Pro forma after-tax gain on the sale of Molded Products $ 14,172
================
Pro forma after-tax proceeds on the sale of Molded Products $ 48,130
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(3) Pro forma adjustments to the consolidated statement of income for the
year ended December 31, 1995 reflect (i) the removal of Molded Products
results of operations (net income of $1.7 million, including income
taxes computed on a stand-alone basis at an effective tax rate of 39%)
and (ii) a reduction of $870,000 ($531,000 after income taxes) to
Tredegar's periodic cost for its defined benefit plan and
postretirement health care and life insurance plans for the curtailment
of participation by Molded Products employees in such plans (80%
allocated to cost of goods sold and 20% allocated to selling, general
and administrative expenses). Historical and pro forma net income and
earnings per common and dilutive common equivalent share adjusted for
unusual items affecting the comparability of operating results and pro
forma interest income are presented below:
(In Thousands Except Per-Share Amounts)
1995
Historical net income as reported $ 24,053
After-tax effects of unusual items affecting the
comparability of operating results:
Gain on sale of Regal Cinema shares (451)
APPX Software restructuring charges 1,560
Recovery in connection with a Film Products product
liability lawsuit (1,068)
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Historical net income as adjusted for unusual items 24,094
Pro forma and other adjustments:
Reflected in the statement of income (1,127)
After-tax interest income on the assumed investment
of after-tax divestiture proceeds in cash equivalents
at the Company's 1995 average rate earned of 5.9%
(3.6% after taxes) 1,732
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Pro forma net income as adjusted for unusual items and pro
forma interest income $ 24,699
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Earnings per common and dilutive common
equivalent share:
Historical:
As reported $ 1.80
As adjusted for unusual items 1.80
Pro forma:
As presented in the statement of income 1.71
As adjusted for unusual items and interest income 1.85
(c) Exhibits.
Exhibit No.
99.1 Stock Purchase Agreement by and between Tredegar Investments,
Inc. and Precise Technology, Inc. made as of March 11, 1996.
(Schedules and exhibits omitted; Registrant agrees to furnish a
copy of any schedule or exhibit to the Securities and Exchange
Commission upon request.)
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.
Tredegar Industries, Inc.
(Registrant)
Date: April 11, 1996 /s/ N. A. Scher
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Norman A. Scher
Executive Vice President,
Treasurer and Chief Financial
Officer (Principal Financial
Officer)
EXHIBIT INDEX
Exhibit No. Description
99.1 Stock Purchase Agreement by and between Tredegar
Investments, Inc. and Precise Technology, Inc. made as of
March 11, 1996. (Schedules and exhibits omitted;
Registrant agrees to furnish a copy of any schedule or
exhibit to the Securities and Exchange Commission upon
request.)