EXHIBIT 99.1
SUNBEAM CORPORATION AND SUBSIDIARIES
(DEBTORS-IN-POSSESSION)
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS (UNAUDITED)
(AMOUNTS IN THOUSANDS, EXCEPT PER SHARE AMOUNTS)
Three Months Ended Six Months Ended
---------------------------- ----------------------------
June 30, June 30, June 30, June 30,
2002 2001 2002 2001
------------- ------------- ------------- ------------
Net sales.......................................................... $ 546,771 $ 601,678 $ 992,018 $ 1,078,131
Cost of goods sold................................................. 416,208 474,427 765,986 843,391
Selling, general and administrative expense........................ 106,990 121,270 206,912 230,519
------------- ------------- ------------- ------------
Operating income................................................... 23,573 5,981 19,120 4,221
Interest expense (contractual interest and Debenture discount
amortization for the three and six month periods ended
June 30, 2002 and 2001, respectively, $49,027, $61,922
$96,010 and $123,366)........................................... 5,052 8,541 8,627 35,867
Other (income) expense, net........................................ (2,833) 620 (2,065) 3,799
------------- ------------- ------------- ------------
Income (loss) before reorganization
costs and income taxes.......................................... 21,354 (3,180) 12,558 (35,445)
Reorganization costs............................................... 2,822 5,690 5,488 51,212
Income tax provision (benefit):
Current......................................................... 2,348 (411) 4,282 1,535
Deferred........................................................ 1,084 589 101 (382)
------------- ------------- ------------- ------------
3,432 178 4,383 1,153
Net income (loss).................................................. $ 15,100 $ (9,048) $ 2,687 $ (87,810)
============= ============= ============= ============
Income (loss) per share:
Net income (loss), basic and diluted............................ $ 0.14 $ (0.08) $ 0.03 $ (0.82)
============= ============= ============= ============
Weighted average common shares outstanding and diluted............. 107,304 107,304 107,304 107,304
INTANGIBLE ASSETS
- -----------------
In July 2001, the Financial Accounting Standards Board issued Statement of
Financial Accounting Standards No. 142 "Goodwill and Other Intangible Assets,"
("SFAS No. 142"), which the Company is required to adopt as of January 1, 2002.
As discussed below, the Company has not fully adopted this statement as of June
30, 2002. Under the provisions of this statement, goodwill and intangible assets
that have indefinite useful lives will not be amortized but rather will be
tested at least annually for impairment. The Company discontinued the
amortization of goodwill and identifiable intangible assets that have indefinite
useful lives as of January 1, 2002. Identifiable intangible assets deemed to
have indefinite lives are required to be tested for impairment in the first
interim period in which SFAS No. 142 is initially applied (March 31, 2002 for
the Company). SFAS No. 142 prescribes that an impairment loss be measured as the
difference between the carrying amount and fair value of the asset. In addition,
SFAS No. 142 sets forth guidelines for the evaluation of goodwill for impairment
using a "two-step" transitional goodwill impairment test. SFAS No. 142 requires
the completion of the first step of the transitional goodwill impairment test
(whereby the fair value of reporting units is compared to the carrying value,
including goodwill) no later than 6 months (June 30, 2002 for the Company) after
initial adoption. If there is indication of impairment, the second step
(comparing the implied fair value of the reporting unit goodwill with the
carrying amount of that goodwill) must be completed by the end of the fiscal
year. Given that the Company is in the process of obtaining a
business-by-business valuation for Fresh-Start Accounting purposes, the Company
has delayed the completion of these transitional impairment tests until the
valuation process has been completed. As presented in the Company's Second
Amended Joint Disclosure Statement filed with the Court on September 6, 2002,
and contained in a Current Report on Form 8-K filed with the Securities and
Exchange Commission on September 10, 2002, based on preliminary estimates, the
Company anticipates a material reduction in the carrying value of goodwill and
other intangible assets related to the valuation process. This reduction is
expected to approximate the impact of the implementation of SFAS No. 142.
SUNBEAM CORPORATION AND SUBSIDIARIES
(DEBTORS-IN-POSSESSION)
CONDENSED CONSOLIDATED BALANCE SHEETS (UNAUDITED)
(AMOUNTS IN THOUSANDS)
June 30, December 31,
2002 2001
----------------- ----------------
ASSETS
Current assets:
Cash and cash equivalents................................................ $ 33,630 $ 57,248
Receivables, net......................................................... 210,130 131,375
Inventories.............................................................. 388,739 377,602
Prepaid expenses, deferred income taxes and other current assets......... 38,612 42,160
----------------- ----------------
Total current assets............................................. 671,111 608,385
Property, plant and equipment, net.......................................... 334,195 361,133
Trademarks, tradenames and other intangibles (see note below)............... 544,249 559,505
Goodwill (see note below)................................................. 15,564 6,396
Other assets................................................................ 29,668 25,324
----------------- ----------------
$ 1,594,787 $ 1,560,743
================= ================
LIABILITIES AND SHAREHOLDERS' DEFICIENCY
Liabilities not subject to compromise
Current liabilities:
Short-term debt and current portion of long-term debt.................... $ 35,129 $ 32,707
Accounts payable ....................................................... 150,827 124,133
Other current liabilities................................................ 211,350 225,854
----------------- ----------------
Total current liabilities........................................ 397,306 382,694
Long-term debt, less current portion........................................ 10,339 1,143
Other long-term liabilities................................................. 196,764 194,175
Deferred income taxes....................................................... 93,362 91,425
Liabilities subject to compromise........................................... 2,498,065 2,499,398
Commitments and contingencies
Shareholders' deficiency:
Preferred stock (2,000,000 shares authorized, none outstanding).......... -- --
Common stock (107,422,500 shares issued and outstanding)................. 1,074 1,074
Additional paid-in capital............................................... 1,179,629 1,179,629
Accumulated deficit.............................................. (2,686,337) (2,689,024)
Accumulated other comprehensive loss..................................... (95,415) (99,771)
----------------- ----------------
Total shareholders' deficiency .......................................... (1,601,049) (1,608,092)
----------------- ----------------
$ 1,594,787 $ 1,560,743
================= ================
INTANGIBLE ASSETS
- -----------------
In July 2001, the Financial Accounting Standards Board issued Statement of
Financial Accounting Standards No. 142 "Goodwill and Other Intangible Assets,"
("SFAS No. 142"), which the Company is required to adopt as of January 1, 2002.
As discussed below, the Company has not fully adopted this statement as of June
30, 2002. Under the provisions of this statement, goodwill and intangible assets
that have indefinite useful lives will not be amortized but rather will be
tested at least annually for impairment. The Company discontinued the
amortization of goodwill and identifiable intangible assets that have indefinite
useful lives as of January 1, 2002. Identifiable intangible assets deemed to
have indefinite lives are required to be tested for impairment in the first
interim period in which SFAS No. 142 is initially applied (March 31, 2002 for
the Company). SFAS No. 142 prescribes that an impairment loss be measured as the
difference between the carrying amount and fair value of the asset. In addition,
SFAS No. 142 sets forth guidelines for the evaluation of goodwill for impairment
using a "two-step" transitional goodwill impairment test. SFAS No. 142 requires
the completion of the first step of the transitional goodwill impairment test
(whereby the fair value of reporting units is compared to the carrying value,
including goodwill) no later than 6 months (June 30, 2002 for the Company) after
initial adoption. If there is indication of impairment, the second step
(comparing the implied fair value of the reporting unit goodwill with the
carrying amount of that goodwill) must be completed by the end of the fiscal
year. Given that the Company is in the process of obtaining a
business-by-business valuation for Fresh-Start Accounting purposes, the Company
has delayed the completion of these transitional impairment tests until the
valuation process has been completed. As presented in the Company's Second
Amended Joint Disclosure Statement filed with the Court on September 6, 2002,
and contained in a Current Report on Form 8-K filed with the Securities and
Exchange Commission on September 10, 2002, based on preliminary estimates, the
Company anticipates a material reduction in the carrying value of goodwill and
other intangible assets related to the valuation process. This reduction is
expected to approximate the impact of the implementation of SFAS No. 142.
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SUNBEAM CORPORATION AND SUBSIDIARIES
(DEBTORS-IN-POSSESSION)
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (UNAUDITED)
(AMOUNTS IN THOUSANDS)
Six Months Ended
-----------------------------------------------
June 30, June 30,
2002 2001
----------------- ----------------
OPERATING ACTIVITIES:
Net income (loss)........................................................ $ 2,687 $ (87,810)
Adjustments to reconcile net income (loss) to net cash
(used in) provided by operating activities:
Depreciation and amortization....................................... 34,168 47,053
Non-cash interest charges........................................... 1,705 9,707
Non-cash reorganization costs....................................... -- 39,869
Deferred income taxes............................................... 101 (382)
(Gain) loss on sale of property, plant and equipment................ (13) 671
Loss on sale of business............................................ 848 --
Excess reimbursement for Lyon plant casualty........................ (3,417) --
Changes in working capital and other, net of divestitures........... (58,651) (4,429)
----------------- ----------------
Net cash (used in) provided by operating activities.......... (22,572) 4,679
----------------- ----------------
INVESTING ACTIVITIES:
Capital expenditures..................................................... (13,788) (16,687)
Net proceeds from sale of business....................................... 6,300 --
Proceeds from sale of other assets....................................... 135 58
Insurance proceeds from Lyon plant casualty.............................. 6,008 --
----------------- ----------------
Net cash used in investing activities........................ (1,345) (16,629)
----------------- ----------------
FINANCING ACTIVITIES:
Net borrowings (repayments) under revolving credit facilities............ 9,980 (10,813)
Net borrowings under DIP facility........................................ -- 35,000
Net borrowings (repayments) under debt obligations....................... 1,591 (762)
Deferred financing fees.................................................. (4,798) (9,626)
Other, net ............................................................. -- 18
----------------- ----------------
Net cash provided by financing activities.................... 6,773 13,817
----------------- ----------------
Effect of exchange rate changes on cash and cash equivalents................. (6,474) 5,798
----------------- ----------------
Net (decrease) increase in cash and cash equivalents......................... (23,618) 7,665
Cash and cash equivalents at beginning of period............................. 57,248 27,225
----------------- ----------------
Cash and cash equivalents at end of period................................... $ 33,630 $ 34,890
================= ================
INTANGIBLE ASSETS
- -----------------
In July 2001, the Financial Accounting Standards Board issued Statement of
Financial Accounting Standards No. 142 "Goodwill and Other Intangible Assets,"
("SFAS No. 142"), which the Company is required to adopt as of January 1, 2002.
As discussed below, the Company has not fully adopted this statement as of June
30, 2002. Under the provisions of this statement, goodwill and intangible assets
that have indefinite useful lives will not be amortized but rather will be
tested at least annually for impairment. The Company discontinued the
amortization of goodwill and identifiable intangible assets that have indefinite
useful lives as of January 1, 2002. Identifiable intangible assets deemed to
have indefinite lives are required to be tested for impairment in the first
interim period in which SFAS No. 142 is initially applied (March 31, 2002 for
the Company). SFAS No. 142 prescribes that an impairment loss be measured as the
difference between the carrying amount and fair value of the asset. In addition,
SFAS No. 142 sets forth guidelines for the evaluation of goodwill for impairment
using a "two-step" transitional goodwill impairment test. SFAS No. 142 requires
the completion of the first step of the transitional goodwill impairment test
(whereby the fair value of reporting units is compared to the carrying value,
including goodwill) no later than 6 months (June 30, 2002 for the Company) after
initial adoption. If there is indication of impairment, the second step
(comparing the implied fair value of the reporting unit goodwill with the
carrying amount of that goodwill) must be completed by the end of the fiscal
year. Given that the Company is in the process of obtaining a
business-by-business valuation for Fresh-Start Accounting purposes, the Company
has delayed the completion of these transitional impairment tests until the
valuation process has been completed. As presented in the Company's Second
Amended Joint Disclosure Statement filed with the Court on September 6, 2002,
and contained in a Current Report on Form 8-K filed with the Securities and
Exchange Commission on September 10, 2002, based on preliminary estimates, the
Company anticipates a material reduction in the carrying value of goodwill and
other intangible assets related to the valuation process. This reduction is
expected to approximate the impact of the implementation of SFAS No. 142.
3