1
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): August 27, 1997
THE CERPLEX GROUP, INC.
(Exact name of registrant as specified in charter)
Delaware 0-23602 33-0411354
- --------------------------------------------------------------------------------
(State or other jurisdiction (Commission (IRS Employer
of incorporation) File Number) Identification No.)
1382 Bell Avenue, Tustin, California 92780
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(Address of principal executive offices) (Zip Code)
(714) 258-5600
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(Registrant's telephone number including area code)
Not applicable
- --------------------------------------------------------------------------------
(Former name or former address, if changed since last report.)
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ITEM 2. ACQUISITION OR DISPOSITION OF ASSETS.
On August 27, 1997, The Cerplex Group, Inc., a Delaware corporation
(the "Company"); Cerplex Subsidiary, Inc., a Delaware corporation and a
wholly-owned subsidiary of the Company ("Cerplex Sub"); Modcomp Joint Venture,
Inc., a Delaware corporation and a wholly-owned subsidiary of the Company
("MJVI"); and Modcomp/Cerplex, L.P., a Delaware limited partnership whose
general and limited partnership interests are wholly-owned by Cerplex Sub and
MJVI ("Modcomp") (the Company, Cerplex Sub, MJVI and Modcomp are hereinafter
collectively referred to as the "Selling Entities") consummated the sale (the
"Disposition") of substantially all of the assets of Modcomp to CSP, Inc., a
Massachusetts corporation ("CSP") and CSPI Sub Inc., a Delaware corporation and
a wholly-owned subsidiary of CSP ("CSP Sub") (CSP and CSP Sub are hereinafter
together referred to as the "Purchasers"). Such assets include, without
limitation, cash, accounts receivable and tangible and intangible assets of
Modcomp.
The Disposition was achieved pursuant to an Asset Purchase Agreement
(the "Purchase Agreement") dated as of August 6, 1997, by and among the Selling
Entities and the Purchasers. The Purchase Agreement provides that the
Disposition is effective as of June 30, 1997. No material relationship exists
between the Purchasers and the Company, the Company's affiliates, directors or
officers, or any associate of any of the Company's directors or officers.
The aggregate purchase price (the "Purchase Price") paid by the
Purchasers to the Company was $8,540,000, of which approximately $8,447,000 was
paid in cash at the closing on August 27, 1997. The net proceeds to the Company
were $8,102,000. The remaining $95,000 of the Purchase Price was withheld from
payment pursuant to an escrow agreement between the parties pending the
determination of certain tax liabilities of Modcomp. The Purchase Price was
determined through negotiations with the Purchasers.
ITEM 5. OTHER EVENTS.
The Company completed an amendment to its senior credit agreement with
its senior lender and an amendment to its note purchase agreements with its
subordinated debt holders effective August 20, 1997. Such amendments reset
certain covenants to cure the Company's defaults under such agreements.
In addition, the amendment to the note purchase agreements provides for
the issuance by the Company of warrants to purchase an aggregate of 500,096
shares of the Company's Common Stock to its subordinated debt holders (the "New
Subdebt Warrants") and an increase in the applicable interest rate from 9.5% to
15%. However, the increased interest may be paid in lieu of cash in the form of
additional subordinated notes carrying the same terms as the existing
subordinated notes. In the event the existing and the new subordinated notes are
repaid in full by August 19, 1998, the increased interest will be eliminated and
the New Subdebt Warrants will be cancelled.
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The sixth amendment to the senior credit agreement also provides for
the issuance by the Company of a warrant to purchase 1,262,188 shares of the
Company's Common Stock to its senior lender, as well as increased interest and a
reduced borrowing base.
ITEM 7. FINANCIAL STATEMENTS, PRO FORMA FINANCIAL INFORMATION AND EXHIBITS.
(a) FINANCIAL STATEMENTS OF BUSINESS ACQUIRED.
Not applicable.
(b) PRO FORMA FINANCIAL INFORMATION.
Attached is the pro forma financial information with respect to the
sale by the Company of substantially all of the assets of Modcomp.
(c) EXHIBITS.
EXHIBIT
NUMBER DESCRIPTION OF EXHIBITS METHOD OF FILING
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2.1 Agreement of Merger dated as of August Incorporated herein by
30, 1993, by and among Cerplex reference to Exhibit 2.1 to the
Incorporated, Diversified Manufacturing Company's Registration
Services, Inc. ("DMS"), EMServe, Inc. Statement on Form S-1 (File
("EMServe"), InCirT Technology No. 33-75004) which was
Incorporated ("InCirT") and Testar, Inc. declared effective by the
("Testar"). Commission on April 8, 1994.
2.2 Agreement and Plan of Merger dated Incorporated herein by
November 12, 1993, between The Cerplex reference to Exhibit 2.2 to the
Group Subsidiary, Inc. and Registrant Company's Registration
(conformed copy to original). Statement on Form S-1 (File
No. 33-75004) which was
declared effective by the
Commission on April 8, 1994.
2.3 Certificate of Ownership and Merger of Incorporated herein by
Registrant with and into The Cerplex Group reference to Exhibit 2.2 to the
Subsidiary, Inc. dated as of November 12, Company's Registration
1993. Statement on Form S-1 (File
No. 33-75004) which was
declared effective by the
Commission on April 8, 1994.
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EXHIBIT
NUMBER DESCRIPTION OF EXHIBITS METHOD OF FILING
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2.4 Asset Purchase Agreement effective Incorporated herein by
December 17, 1993 by and between Certech reference to Exhibit 2.4 to the
Technology, Inc., a wholly-owned Company's Registration
subsidiary of the Registrant ("Certech"), Statement on Form S-1 (File
and Spectradyne, Inc. ("Spectradyne"). No. 33-75004) which was
declared effective by the
Commission on April 8, 1994.
2.5 Purchase and Sale Agreement dated as of Incorporated herein by
July 29, 1994, by and among The Cerplex reference to Exhibit 2 to the
Group, Inc., Cerplex Limited, BT Repair Form 8-K filed July 29, 1994.
Services Limited and BT.
2.6 Contract for repair, calibration and Incorporated herein by
warehousing of certain items of BT reference to Exhibit 10 to the
Equipment dated as of July 29, 1994, Form 8-K filed July 29, 1994.
among The Cerplex Group and Cerplex
Limited and BT.
2.7 Formation and Contribution Agreement Incorporated herein by
effective December 1, 1994 by and among reference to Exhibit 2.7 to the
Modcomp/Cerplex L.P., Modular Computer Company's Annual Report on
Systems, Inc., Cerplex Subsidiary, Inc. and Form 10-K for the fiscal year
The Cerplex Group, Inc. ended January 1, 1995.
2.8 Contingent Promissory Note dated Incorporated herein by
December 1, 1994 issued by reference to Exhibit 2.8 to the
Modcomp/Cerplex L.P. to Modular Company's Annual Report on
Computer Systems, Inc. Form 10-K for the fiscal year
ended January 1, 1995.
2.9 Limited Partnership Agreement of Incorporated herein by
Modcomp/Cerplex L.P. effective December reference to Exhibit 2.8 to the
1, 1994. Company's Annual Report on
Form 10-K for the fiscal year
ended January 1, 1995.
2.10 Put/Call Option Agreement effective Incorporated herein by
December 1, 1994 by and among Cerplex reference to Exhibit 2.8 to the
Subsidiary, Inc., The Cerplex Group, Inc., Company's Annual Report on
Modular Computer Systems, Inc. and Form 10-K for the fiscal year
Modcomp Joint Venture Inc. ended January 1, 1995.
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EXHIBIT
NUMBER DESCRIPTION OF EXHIBITS METHOD OF FILING
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2.11 Stock Purchase Agreement dated as of June Incorporated herein by
29, 1995 by and among The Cerplex Group, reference to Exhibit 2.11 to the
Inc., Tu Nguyen and Phuc Le. Company's Quarterly Report
on Form 10-Q for the quarter
ended October 1, 1995.
2.12 Letter Agreement dated April 5, 1996 by Incorporated herein by
and among Modular Computer Systems, reference to Exhibit 2.12 to the
Inc., Modcomp Joint Venture, Inc., AEG Company's Annual Report on
Aktiengesellschaft, the Company, Cerplex Form 10-K for the fiscal year
Subsidiary, Inc. and Modcomp/Cerplex ended December 31, 1995.
L.P.
2.13 Stock Purchase Agreement dated as of May Incorporated herein by
24, 1996, by and among The Cerplex reference to Exhibit 2.13 to the
Group, Inc., Cerplex Limited, Rank Xerox Company's Current Report on
- The Document Company SA and Rank Form 8-K dated May 24, 1996.
Xerox Limited (conformed copy to
original).
2.14 Contract of Warranty dated as of May 24, Incorporated herein by
1996, by and among The Cerplex Group, reference to Exhibit 2.14 to the
Inc., Cerplex Limited, Rank Xerox - The Company's Current Report on
Document Company SA and Rank Xerox Form 8-K dated May 24, 1996.
Limited (conformed copy to the original).
2.15 Supply and Services Agreement dated as of Incorporated herein by
May 24, 1996, by and among The Cerplex reference to Exhibit 2.15 to the
Group, Inc., Cerplex Limited, Rank Xerox Company's Current Report on
- The Document Company SA and Rank Form 8-K dated May 24, 1996.
Xerox Limited (conformed copy to the
original).
2.16 Stock Purchase Agreement dated March 28, Incorporated herein by
1997 relating to all of the outstanding stock reference to Exhibit 2.13 to the
of Peripheral Computer Support, Inc. Company's Annual Report on
among the Company, PCS Acquisition Co., Form 10-K for the fiscal year
Inc., and Lincolnshire Equity Partners, L.P. ended December 31, 1996.
2.17 Asset Purchase Agreement dated August 6, Incorporated herein by
1997 by and among the Company, Cerplex reference to Exhibit 2.17 to the
Subsidiary, Inc., Modcomp Joint Venture, Company's Quarterly Report
Inc., Modcomp/Cerplex L.P. and CSP Inc. on Form 10-Q for the quarter
ended June 30, 1997.
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EXHIBIT
NUMBER DESCRIPTION OF EXHIBITS METHOD OF FILING
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4.1 Stock Purchase Agreement dated as of Incorporated herein by
November 19, 1993 by and among the reference to Exhibit 4.1 to the
Registrant, the stockholders of the Company's Registration
Registrant identified in Part A of Schedule I Statement on Form S-1 (File
thereto and the purchasers of shares of the No. 33-75004) which was
Registrant's Series A Preferred Stock declared effective by the
identified in Schedule I thereto (including Commission on April 8, 1994.
the Schedules thereto; Exhibits omitted).
4.2 Registration Rights Agreement dated as of Incorporated herein by
November 19, 1993, by and among the reference to Exhibit 4.2 to the
Registrant, the investors listed on Schedule Company's Registration
A thereto and the security holders of the Statement on Form S-1 (File
Registrant listed on Schedule B thereto, No. 33-75004) which was
together with Amendment No. 1. declared effective by the
Commission on April 8, 1994.
4.3 Co-Sale Agreement dated as of November Incorporated herein by
19, 1993, by and among the Registrant, the reference to Exhibit 4.3 to the
managers listed on Schedule A thereto and Company's Registration
the investors listed on Schedule B thereto. Statement on Form S-1 (File
No. 33-75004) which was
declared effective by the
Commission on April 8, 1994.
4.4 Warrant Agreement dated as of November Incorporated herein by
19, 1993, by and among the Registrant and reference to Exhibit 4.4 to the
the purchasers listed in Annex 1 thereto. Company's Registration
Statement on Form S-1 (File
No. 33-75004) which was
declared effective by the
Commission on April 8, 1994.
4.5 Placement Agent Warrant Purchase Incorporated herein by
Agreement dated as of November 19, 1993, reference to Exhibit 4.5 to the
between the Registrant and Donaldson, Company's Registration
Lufkin & Jenrette Securities Corporation. Statement on Form S-1 (File
No. 33-75004) which was
declared effective by the
Commission on April 8, 1994.
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EXHIBIT
NUMBER DESCRIPTION OF EXHIBITS METHOD OF FILING
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4.6 Observation Rights Agreement dated as of Incorporated herein by
November 19, 1993, between the Registrant reference to Exhibit 4.6 to the
and certain stock purchasers. Company's Registration
Statement on Form S-1 (File
No. 33-75004) which was
declared effective by the
Commission on April 8, 1994.
4.7 Observation Rights Agreement dated as of Incorporated herein by
November 19, 1993, between the Registrant reference to Exhibit 4.7 to the
and certain note purchasers. Company's Registration
Statement on Form S-1 (File
No. 33-75004) which was
declared effective by the
Commission on April 8, 1994.
4.8 Note Purchase Agreement dated as of Incorporated herein by
November 19, 1993, by and among the reference to Exhibit 4.8 to the
Registrant and The Northwestern Mutual Company's Registration
Life Insurance Company, John Hancock Statement on Form S-1 (File
Mutual Life Insurance, Registrant and Bank No. 33-75004) which was
of Scotland London Nominees Limited. declared effective by the
Commission on April 8, 1994.
4.9 Amendment No. 2 to Registration Rights Incorporated herein by
Agreement dated as of April 6, 1994, by reference to Exhibit 4.9 to the
and among the Registrant and certain of its Company's Registration
Securities holders. Statement on Form S-1 (File
No. 33-75004) which was
declared effective by the
Commission on April 8, 1994.
4.10 Amendment to Note Purchase Agreement, Incorporated herein by
dated as of October 27, 1994, by and reference to Exhibit 4.10 to the
among the Company, Northwestern Mutual Company's Annual Report on
Life Insurance Company, John Hancock Form 10-K for the fiscal year
Mutual Life Insurance Company and North ended March 31, 1995.
Atlantic Smaller Companies Trust P.L.C.
(collectively, the "Noteholders").
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EXHIBIT
NUMBER DESCRIPTION OF EXHIBITS METHOD OF FILING
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4.11 Waiver and Amendment Agreement dated Incorporated herein by
April 15, 1996 by and among Company, reference to Exhibit 4.11 to the
The Northwestern Mutual Life Insurance Company's Annual Report on
Company, John Hancock Mutual Life Form 10-K for the fiscal year
Insurance Company and North Atlantic ended December 31, 1995.
Smaller Companies Investment Trust PLC.
4.12 Warrant Agreement dated as of April 15, Incorporated herein by
1996 by and among Company, The reference to Exhibit 4.12 to the
Northwestern Mutual Life Insurance Company's Annual Report on
Company, John Hancock Mutual Life Form 10-K for the fiscal year
Insurance Company and North Atlantic ended December 31, 1995.
Smaller Companies Investment Trust PLC.
4.13 First Amendment to Warrant Agreement Incorporated herein by
dated April 15, 1996 by and among reference to Exhibit 4.13 to the
Company and each of the holders of Company's Annual Report on
warrants listed on Schedule A thereto, with Form 10-K for the fiscal year
respect to that certain Warrant Agreement ended December 31, 1995.
dated November 19, 1993.
4.14 First Amendment to Observation Rights Incorporated herein by
Agreement dated as of April 15, 1996 reference to Exhibit 4.14 to the
between Company and certain note Company's Annual Report on
purchasers. Form 10-K for the fiscal year
ended December 31, 1995.
4.15 Third Amendment to Registration Rights Incorporated herein by
Agreement dated as of April 15, 1996 by reference to Exhibit 4.15 to the
and among Company, the investors of Company's Annual Report on
Company listed on Schedule A thereto and Form 10-K for the fiscal year
the security holders of Company listed on ended December 31, 1995.
Schedule B thereto.
4.16 Warrant Agreement dated April 15, 1996 by Incorporated herein by
and among Company, Wells Fargo Bank, reference to Exhibit 4.16 to the
National Association, Sumitomo Bank of Company's Annual Report on
California, BHF Bank Aktiengesellschaft Form 10-K for the fiscal year
and Comerica Bank-California. ended December 31, 1995.
4.17 Stock Purchase Agreement dated June 10, Incorporated herein by
1996 by and among the Company and the reference to Exhibit 4.17 to the
investors listed on Schedule A thereto. Company's Quarterly Report
on Form 10-Q filed August 14,
1996.
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EXHIBIT
NUMBER DESCRIPTION OF EXHIBITS METHOD OF FILING
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4.18 Fourth Amendment to Registration Rights Incorporated herein by
Agreement dated June 10, 1996 by and reference to Exhibit 4.18 to the
among Company, the investors listed on Company's Quarterly Report
Schedule A thereto, the security holders of on Form 10-Q filed August 14,
Company listed on Schedule B thereto, the 1996.
banks listed on Schedule C thereto and each of the parties
listed on Schedule D thereto.
4.19 Certificate of Designation of Preferences of Incorporated herein by
Series B Preferred Stock of The Cerplex reference to Exhibit 3.3 to the
Group, Inc. Company's Quarterly Report
on Form 10-Q filed August 14,
1996.
4.20 Waiver and Amendment Agreement dated Incorporated herein by
October 31, 1996 by and among the reference to Exhibit 4.17 to the
company and the Noteholders. Company's Annual Report on
Form 10-K for the fiscal year
ended December 31, 1996.
4.21 Waiver and Amendment Agreement dated Incorporated herein by
December 9, 1996 by and among the reference to Exhibit 4.18 to the
company and the Noteholders. Company's Annual Report on
Form 10-K for the fiscal year
ended December 31, 1996.
4.22 Side Letter dated March 28, 1997 by and Incorporated herein by
among the Company and the Noteholders. reference to Exhibit 4.19 to the
Company's Annual Report on
Form 10-K for the fiscal year
ended December 31, 1996.
4.23 Amended and Restated Note Purchase Incorporated herein by
Agreement dated April 9, 1997 by and reference to Exhibit 4.20 to the
among the Company and the Noteholders. Company's Annual Report on
Form 10-K for the fiscal year
ended December 31, 1996.
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EXHIBIT
NUMBER DESCRIPTION OF EXHIBITS METHOD OF FILING
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4.24 Second Amendment to Warrant Agreement Incorporated herein by
dated April 9, 1997, by and among the reference to Exhibit 4.21 to the
Company and each of the holders of Company's Annual Report on
warrants listed on Schedule A thereto, Form 10-K for the fiscal year
which Second Amendment amends the ended December 31, 1996.
Warrant Agreement dated November 19,
1993 as amended by the First Amendment
to Warrant Agreement dated April 15, 1996.
4.25 Second Amendment to Warrant Agreement Incorporated herein by
dated April 9, 1997 by and among the reference to Exhibit 4.22 to the
Company and each of the holders of Company's Annual Report on
warrants listed on Schedule A thereto, Form 10-K for the fiscal year
which Second Amendment amends the ended December 31, 1996.
Warrant Agreement dated April 15, 1996,
as amended by a Waiver and Amendment
Agreement dated October 31, 1996.
4.26 Amended and Restated Warrant Agreement Incorporated herein by
dated April 9, 1997 by and among the reference to Exhibit 4.23 to the
Company; Wells Fargo Bank, National Company's Annual Report on
Association; BHF-Bank Aktiengesellschaft; Form 10-K for the fiscal year
and Citibank, N.A. ended December 31, 1996.
4.27 Fifth Amendment to Registration Rights Incorporated herein by
Agreement dated as of April 9, 1997 by and reference to Exhibit 4.27 to the
among the Company, the investors listed on Company's Quarterly Report
Schedule A thereto, the security holders of on Form 10-Q for the quarter
the Company listed on Schedule B thereto, ended June 30, 1997.
the banks listed on Schedule C thereto, and
the parties listed on Schedule D thereto.
4.28 Waiver Agreement dated as of June 30, Incorporated herein by
1997 among the Company and the reference to Exhibit 4.28 to the
Noteholders. Company's Quarterly Report
on Form 10-Q for the quarter
ended June 30, 1997.
4.29 Side letter dated July 10, 1997 by and Incorporated herein by
among the Company and the Noteholders. reference to Exhibit 4.29 to the
Company's Quarterly Report
on Form 10-Q for the quarter
ended June 30, 1997.
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EXHIBIT
NUMBER DESCRIPTION OF EXHIBITS METHOD OF FILING
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4.30 Side letter dated August 6, 1997 by and Incorporated herein by
among the Company and the Noteholders. reference to Exhibit 4.30 to the
Company's Quarterly Report
on Form 10-Q for the quarter
ended June 30, 1997.
4.31 Sixth Amendment to Registration Rights Filed herein.
Agreement dated as of August 20, 1997 by
and among the Company, the investors
listed on Schedule A thereto, the security
holders of the Company listed on Schedule
B thereto, the banks listed on Schedule C
thereto, and the parties listed on Schedule D
thereto.
4.32 First Amendment Agreement dated as of Filed herein.
August 20, 1997, by and among the
Company, The Northwestern Mutual Life
Insurance Company, John Hancock Mutual
Life Insurance Company and North Atlantic
Smaller Companies Investment Trust PLC.
4.33 Warrant Agreement dated as of August 20, Filed herein.
1997 by and between the Company, The
Northwestern Mutual Life Insurance
Company, John Hancock Mutual Life
Insurance Company and North Atlantic
Smaller Companies Investment Trust PLC.
4.34 Third Amendment to Warrant Agreement Filed herein.
dated as of August 20, 1997, by and among
the Company and the Noteholders with
respect to that certain Warrant Agreement
dated as of April 15, 1996 by and among
the Company and the Noteholders.
4.35 Third Amendment to Warrant Agreement Filed herein.
dated as of August 20, 1997, by and among
the Company and the Noteholders with
respect to that certain Warrant Agreement
dated as of November 19, 1993 by and
among the Company and the Noteholders.
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EXHIBIT
NUMBER DESCRIPTION OF EXHIBITS METHOD OF FILING
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4.36 Warrant Agreement dated as of August 20, Filed herein.
1997 by and between the Company and
Citibank, N.A.
4.37 Second Amendment to Observation Rights Filed herein.
Agreement dated August 20, 1997 by and
among the Company, the Northwestern
Mutual Life Insurance Company and John
Hancock Mutual Life Insurance Company.
27.1 Financial Data Schedule. Filed herein.
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ITEM 7. FINANCIAL STATEMENTS, PRO FORMA FINANCIAL INFORMATION AND EXHIBITS.
(b) PRO FORMA FINANCIAL INFORMATION
THE CERPLEX GROUP, INC.
UNAUDITED PRO FORMA CONSOLIDATED BALANCE SHEET
JUNE 30, 1997
(IN THOUSANDS)
ELIMINATION OF PRO FORMA
CONSOLIDATED MODCOMP(1) ADJUSTMENTS(2) PRO FORMA
ASSETS
Current assets:
Cash and cash equivalents $ 21,788 $ (2,856) $ 2,051 $ 20,983
Accounts receivable, net 17,023 (5,825) -- 11,198
Inventories 8,987 (4,169) -- 4,818
Prepaid expenses and other current assets 5,116 (1,178) -- 3,938
------------------------------------------------------
Total current assets 52,914 (14,028) 2,051 40,937
Net assets of Modcomp -- 8,216 (8,216) --
Property, plant and equipment, net 23,836 (733) -- 23,103
Other long-term assets 1,367 269 -- 1,636
------------------------------------------------------
Total assets $ 78,117 $ (6,276) $ (6,165) $ 65,676
======================================================
LIABILITIES & STOCKHOLDERS' DEFICIENCY
Current liabilities:
Notes payable to banks $ 35,897 $ -- $ (6,051) $ 29,846
Notes payable 4,826 -- -- 4,826
Accounts payable 15,117 (1,316) -- 13,801
Accrued and other current liabilities 28,083 (4,960) -- 23,123
------------------------------------------------------
Total current liabilities 83,923 (6,276) (6,051) 71,596
Long-term debt, less current portion 18,114 -- -- 18,114
Long-term obligations 6,214 -- -- 6,214
Stockholders' deficiency:
Preferred stock 657 -- -- 657
Common stock 34 -- -- 34
Additional paid-in capital 58,646 -- -- 58,646
Accumulated deficiency (88,774) -- (114) (88,888)
Cumulative translation adjustment (697) -- -- (697)
------------------------------------------------------
Total stockholders' deficiency (30,134) -- (114) (30,248)
------------------------------------------------------
Total liabilities and stockholders' deficiency $ 78,117 $ (6,276) $ (6,165) $ 65,676
======================================================
See notes to unaudited pro forma consolidated financial statements.
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THE CERPLEX GROUP, INC.
UNAUDITED PRO FORMA CONSOLIDATED STATEMENT OF OPERATIONS
YEAR ENDED DECEMBER 31, 1996
(IN THOUSANDS, EXCEPT SHARE DATA)
ELIMINATION OF PRO FORMA
CONSOLIDATED MODCOMP(3) ADJUSTMENTS(4) PRO FORMA
Net sales $ 191,493 $ (27,179) $ -- $ 164,314
Cost of sales 165,248 (19,261) -- 145,987
---------------------------------------------------------
Gross profit 26,245 (7,918) -- 18,327
Selling, general and administrative expenses 39,488 (5,922) -- 33,566
Restructuring charge 2,084 -- -- 2,084
---------------------------------------------------------
Operating income (loss) (15,327) (1,996) -- (17,323)
Equity in earnings from joint venture 357 (357) -- --
Gain on sale of InCirT Division 450 -- -- 450
Other expense, net 2,881 (92) -- 2,789
Interest expense, net 8,269 83 (703) 7,649
---------------------------------------------------------
Income (loss) before income taxes (25,670) (2,344) 703 (27,311)
Provision for income taxes 1,718 (204) -- 1,514
---------------------------------------------------------
Net income (loss) $ (27,388) $ (2,140) $ 703 $ (28,825)
=========================================================
Net loss per common share $ (2.04) $ (2.15)
========= =========
Weighted average common and common
equivalent shares outstanding 13,419 13,419
========= =========
See notes to unaudited pro forma consolidated financial statements.
15
THE CERPLEX GROUP, INC.
UNAUDITED PRO FORMA CONSOLIDATED STATEMENT OF OPERATIONS
SIX MONTHS ENDED JUNE 30, 1997
(IN THOUSANDS, EXCEPT SHARE DATA)
ELIMINATION OF PRO FORMA
CONSOLIDATED MODCOMP(3) ADJUSTMENTS(4) PRO FORMA
Net sales $ 85,606 $(15,603) $ -- $ 70,003
Cost of sales 76,076 (10,548) -- 65,528
--------
Gross profit 9,530 (5,055) -- 4,475
Selling, general and administrative expenses 20,121 (4,035) -- 16,086
Restructuring charge 4,307 -- -- 4,307
-----------------------------------------------------
Operating income (loss) (14,898) (1,020) -- (15,918)
Gain on sale of PCS 6,607 -- -- 6,607
Other expense, net 998 (683) -- 315
Interest expense, net 3,956 46 (352) 3,650
-----------------------------------------------------
Income (loss) before income taxes (13,245) (383) 352 (13,276)
Provision for income taxes 1,115 (157) -- 958
-----------------------------------------------------
Net income (loss) $(14,360) $ (226) $ 352 $(14,234)
=====================================================
Net loss per common share $ (0.60) $ (0.60)
======== ========
Weighted average common and common
equivalent shares outstanding 23,742 23,742
======== ========
See notes to unaudited pro forma consolidated financial statements.
16
THE CERPLEX GROUP, INC.
NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS
Balance Sheet Adjustments:
(1) To eliminate the individual assets and liabilities of Modcomp
/Cerplex, L.P. ("Modcomp") and include the net amount as "Net
assets of Modcomp" in the unaudited pro forma consolidated balance
sheet at June 30, 1997.
(2) To reflect the sale of Modcomp for net proceeds of $8,102,000.
Concurrent with the sale, a portion of the cash proceeds are used
to reduce senior debt obligation.
Statement of Operations Adjustments:
(3) To eliminate the operating results of Modcomp from the unaudited
consolidated statement of operations.
(4) To reflect the decrease in interest expense resulting from the
reduction of senior debt obligations from the sale of Modcomp.
17
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934,
the Company has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.
Date: September 10, 1997
THE CERPLEX GROUP, INC.
By: /s/ ROBERT W. HUGHES
-------------------------------------------------
Robert W. Hughes
Senior Vice President and Chief Financial Officer
18
INDEX TO EXHIBITS
Sequentially
Numbered
Exhibit Description Page
- ------- ------------ -------------
4.31 Sixth Amendment to Registration Rights
Agreement dated as of August 20, 1997 by and
among the Company, the investors listed on
Schedule A thereto, the security holders of
the Company listed on Schedule B thereto,
the banks listed on Schedule C thereto, and
the parties listed on Schedule D thereto.
4.32 First Amendment Agreement dated as of August
20, 1997, by and among the Company, The
Northwestern Mutual Life Insurance Company,
John Hancock Mutual Life Insurance Company
and North Atlantic Smaller Companies
Investment Trust PLC.
4.33 Warrant Agreement dated as of August 20,
1997 by and between the Company, The
Northwestern Mutual Life Insurance Company,
John Hancock Mutual Life Insurance Company
and North Atlantic Smaller Companies
Investment Trust PLC.
4.34 Third Amendment to Warrant Agreement dated
as of August 20, 1997, by and among the
Company and the Noteholders with respect to
that certain Warrant Agreement dated as of
April 15, 1996 by and among the Company and
the Noteholders.
4.35 Third Amendment to Warrant Agreement dated
as of August 20, 1997, by and among the
Company and the Noteholders with respect to
that certain Warrant Agreement dated as of
November 19, 1993 by and among the Company
and the Noteholders.
4.36 Warrant Agreement dated as of August 20,
1997 by and between the Company and
Citibank, N.A.
4.37 Second Amendment to Observation Rights
Agreement dated August 20, 1997 by and among
the Company, the Northwestern Mutual Life
Insurance Company and John Hancock Mutual
Life Insurance Company.
27.1 Financial Data Schedule.