SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
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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): June 22, 1998
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WHX CORPORATION
(Exact name of registrant as specified in its charter)
New York 1-2394 13-3768097
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(State or other jurisdiction (Commission (IRS Employer
of incorporation) File Number) Identification No.)
110 East 59th Street, New York, New York 10022
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(Address of principal executive offices)
Registrant's telephone number, including area code: (212) 355-5200
N/A
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(Former name or former address, if changed since last report.)
Item 7. Financial Statements, Pro Forma Financial
Information and Exhibits.
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(b) Pro Forma Financial Information
1. Unaudited Pro Forma Consolidated Statement of
Operations for the quarter ended March 31,
1998.
2. Unaudited Pro Forma Consolidated Statement of
Operations for the fiscal year ended December
31, 1997.
3. Unaudited Pro Forma Consolidated Balance
Sheet as of March 31, 1998.
(c) Exhibits.
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None
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SIGNATURE
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 hereunto duly authorized.
WHX CORPORATION
Dated: June 22, 1998 By: /S/ RONALD LABOW
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Name: Ronald LaBow
Title: Chairman of the Board
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WHX CORPORATION
UNAUDITED PRO FORMA CONSOLIDATED FINANCIAL INFORMATION
The following Unaudited Pro Forma Consolidated Statement of Operations
for the quarter ended March 31, 1998 and the fiscal year ended December 31, 1997
have been prepared to give pro forma effect to the acquisition of Handy & Harman
by WHX Corporation (the "Company") as if such acquisition had occurred on
December 31, 1997. The pro forma financial information does not purport to be
indicative of the financial position or results of operations of future periods
or indicative of results that would have occurred had the transaction referred
to above been consummated on the date indicated. The unaudited pro forma
adjustments are based on available information and certain assumptions that
management of the Company believes are reasonable.
The unaudited pro forma financial information should be read in
conjunction with the Company's and Handy & Harman's consolidated financial
statements and the notes thereto set forth in the Company's and Handy & Harman's
reports on Forms 10-K and 10-Q filed with the Securities and Exchange
Commission.
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UNAUDITED PRO FORMA CONSOLIDATED STATEMENT OF OPERATIONS
FOR THE QUARTER ENDED MARCH 31, 1998
(IN THOUSANDS)
WHX H&H(1) ADJUSTMENTS PRO FORMA
--- ------ ----------- ---------
Net sales.................................... $304,078 $120,332 $ -- $424,410
Cost of products sold (excluding depreciation) 269,657 91,693 (1,325)(2) 360,025
Depreciation and amortization................ 20,504 3,680 1,432(3) 25,616
Selling, administrative and general expenses. 18,276 13,702 -- 31,978
-------- -------- -------- --------
Operating income (loss)...................... (4,359) 11,257 (107) 6,791
Interest expense on debt..................... 9,847 3,395 10,368(4) 23,610
Other income................................. 15,783 8 (1,248)(5) 14,543
-------- -------- -------- --------
Income (loss) before income taxes and
extraordinary items....................... 1,577 7,870 (11,723) (2,276)
Tax provision (benefit)...................... 489 3,080 (4,103)(6) (534)
-------- -------- --------- --------
Income (loss) before extraordinary items..... 1,088 4,790 (7,620) (1,742)
Dividend requirement for preferred stock..... 5,152 -- -- 5,152
-------- -------- -------- --------
Income (loss) before extraordinary items available
to common stock........................... ($ 4,064) $ 4,790 ($ 7,620) ($ 6,894)
========== ======== ========= =========
(1) Certain H&H line items have been reclassified to conform to WHX's
financial presentation.
(2) Represents pension expense adjustment.
(3) Represents amortization of goodwill on a straight line basis over 40
years.
(4) Represents interest expense on the Notes, amortization of related deferred
financing costs and interest on H&H borrowings used to make payments to
cancel various stock options held by employees and directors of H&H, to
make certain severance payments and various other employee-related
commitments and to pay certain expenses incurred in connection with the
Acquisition.
(5) Represents reduction in investment earnings related to cash used to fund a
portion of the Acquisition.
(6) Represents income tax benefit on the above adjustments.
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UNAUDITED PRO FORMA CONSOLIDATED STATEMENT OF OPERATIONS
FOR THE FISCAL YEAR ENDED DECEMBER 31, 1997
(IN THOUSANDS)
WHX H&H(1) Adjustments Pro Forma
--- ------ ----------- ---------
Net sales .................................................... $ 642,096 $ 451,110 $ -- $ 1,093,206
Cost of products sold (excluding depreciation) ............... 720,722 337,478 6,408(2) 1,064,608
Depreciation and amortization ................................ 49,445 13,509 5,729(3) 68,683
Selling, administrative and general expenses ................. 68,190 52,540 -- 120,730
Special charge ............................................... 92,701 -- -- 92,701
----------- ----------- ----------- -----------
Operating income (loss) ...................................... (288,962) 47,583 (12,137) (253,516)
Interest expense on debt ..................................... 29,047 14,452 41,472(4) 84,971
Other income ................................................. 50,668 2,920 (9,280)(5) 44,308
----------- ----------- ----------- -----------
Income (loss) before income taxes and
extraordinary items ....................................... (267,341) 36,051 (62,889) (294,179)
Tax provision (benefit) ...................................... (93,569) 15,141 (21,444)(6) (99,872)
----------- ----------- ----------- -----------
Income (loss) before extraordinary items ..................... (173,772) 20,910 (41,445) (194,307)
Dividend requirement for preferred stock ..................... 20,657 -- -- 20,657
----------- ----------- ----------- -----------
Income (loss) before extraordinary items available
to common stock ........................................... ($ 194,429) $ 20,910 ($ 41,445) ($ 214,964)
=========== =========== =========== ===========
(1) Certain H&H line items have been reclassified to conform to WHX's
financial presentation.
(2) Represents elimination of H&H LIFO liquidation gain.
(3) Represents amortization of goodwill on a straight line basis over 40
years.
(4) Represents interest expense on the Notes, amortization of related deferred
financing costs and interest on H&H borrowings used to make payments to
cancel various stock options held by employees and directors of H&H, to
make certain severance payments and various other employee-related
commitments and to pay certain expenses incurred in connection with the
Acquisition.
(5) Represents reduction in investment earnings related to cash used to fund a
portion of the Acquisition.
(6) Represents income tax benefit on the above adjustments.
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UNAUDITED PRO FORMA CONSOLIDATED BALANCE SHEET
AS OF MARCH 31, 1998
(IN THOUSANDS)
WHX H&H(1) Adjustments Pro Forma
--- ------ ----------- ---------
ASSETS
Current assets:
Cash and cash equivalents ............................... $ -- $ 7,172 $ -- $ 7,172
Short-term investments .................................. 833,896 -- (91,475)(1) 742,421
Trade receivables ....................................... 57,606 68,639 -- 126,245
Inventories ............................................. 283,522 77,512 107,000(2) 468,034
Prepaid expenses, deferred charges and other
current assets ........................................ 21,172 11,677 8,462(3) 41,311
----------- ----------- ----------- -----------
Total current assets .............................. 1,196,196 165,000 23,987 1,385,183
----------- ----------- ----------- -----------
Investment in associated companies ......................... 76,383 3,913 -- 80,296
Property, plant and equipment, net ......................... 726,137 95,166 -- 821,303
Deferred income taxes ...................................... 196,644 -- -- 196,644
Prepaid/intangible pensions ................................ 76,714 62,438 (80,996)(4) 58,156
Goodwill and other intangibles ............................. 13,923 64,627 229,173(5) 307,723
Deferred charges and other assets .......................... 34,899 10,025 14,000(6) 58,924
----------- ----------- ----------- -----------
Total assets ...................................... $ 2,320,896 $ 401,169 $ 186,164 $ 2,908,229
=========== =========== =========== ===========
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Trade payables .......................................... $ 139,996 $ 43,796 $ -- $ 183,792
Short-term debt ......................................... 598,994 -- 44,884(7) 643,878
Deferred income taxes - current ......................... 32,196 -- 44,940(8) 77,136
Other current liabilities ............................... 93,937 31,967 -- 125,904
Long-term debt due in one year .......................... 619 -- -- 619
----------- ----------- ----------- -----------
Total current liabilities ............................. 865,742 75,763 89,824 1,031,329
----------- ----------- ----------- -----------
Long-term debt ............................................. 354,554 185,700 350,000(9) 890,254
Pension liability .......................................... 172,767 -- (168,974)(4) 3,793
Other employee benefit liabilities ......................... 429,026 -- 8,504(10) 437,530
Other liabilities .......................................... 49,955 22,748 33,380(8) 106,083
----------- ----------- ----------- -----------
Total liabilities ..................................... 1,872,044 284,211 312,734 2,468,989
----------- ----------- ----------- -----------
Redeemable common stock .................................... 4,163 -- -- 4,163
Stockholders' equity:
Preferred stock ......................................... 589 -- -- 589
Common stock ............................................ 184 14,611 (14,611)(11) 184
Treasury stock (at cost) ................................ -- (44,941) 44,941(11) 0
Unearned compensation ................................... -- (2,857) 2,857(11) 0
Unrealized gain on securities ........................... 19,935 -- (9,612)(12) 10,323
Foreign currency translation adjustment ................. -- (1,784) 1,784(11) 0
Additional paid-in capital .............................. 591,627 17,427 (17,427)(11) 591,627
Accumulated earnings (deficit) .......................... (167,646) 134,502 (134,502)(11) (167,646)
----------- ----------- ----------- -----------
Total stockholders' equity ............................ 444,689 116,958 (126,570) 435,077
----------- ----------- ----------- -----------
Total liabilities and stockholders' equity ........ $ 2,320,896 $ 401,169 $ 186,164 $ 2,908,229
=========== =========== =========== ===========
(footnotes on following page)
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FOOTNOTES TO UNAUDITED PRO FORMA CONSOLIDATED BALANCE SHEET
(IN THOUSANDS)
(1) Reflects the WHX cash used to fund a portion of the purchase price of the
Acquisition and the use of the H&H Shares, valued as of March 31, 1998,
currently owned by WHX to fund a portion of the purchase price of the
Acquisition.
(2) Represents adjustment to reflect inventories at estimated fair value.
(3) Represents adjustment to reduce funded supplemental retirement benefits of
$1,700 and to reflect deferred tax benefits related to cancellation of
stock options, severance payments and other benefits of $10,162.
(4) Represents adjustment of H&H pension asset to fair value and to reflect
the merging of the WHX and H&H defined benefit pension plans, based upon
the historical assumptions of the separate plans.
(5) Represents the excess of acquisition cost over fair market value of net
assets acquired ($229,173). Fixed assets have not been stated at fair
value, as this information is not readily available. The following sets
forth the calculation of additional goodwill associated with the
Acquisition.
Purchase price................................. $417,864
Historical net assets acquired................. (116,958)
Fair market value adjustments.................. (108,155)
H&H acquisition related fees and
expenses, net of tax...................... 36,422
--------
Additional goodwill.......... $229,173
========
(6) Represents deferred transaction fees and expenses related to the issuance
of the Notes.
(7) Represents debt incurred by H&H to make payments to cancel various stock
options held by employees and directors of H&H, to make certain severance
payments and various other employee-related commitments and to pay certain
expenses incurred in connection with the Acquisition.
(8) Represents deferred taxes on fair market value adjustments.
(9) Represents the issuance of the Notes.
(10) Represents adjustment to reclassify historical H&H retiree medical
liabilities from prepaid pension and to reflect liability at fair value.
(11) Represents adjustment to eliminate common shareholder equity accounts of
H&H.
(12) Reflects the elimination of unrealized gain on H&H Shares held by WHX as
of March 31, 1998.
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