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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):
August 16, 1996
TRANS-RESOURCES, INC.
(Exact name of Registrant as specified in its charter)
Delaware 33-11634 36-2729497
State or other (Commission File (I.R.S. Employer
jurisdiction of Number) Identification No.)
incorporation
9 West 57th Street, New York, New York 10019
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code:
(212) 888-3044
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Item 2. Acquisition or Disposition of Assets
Pursuant to an Asset Purchase Agreement, dated as of May 21, 1996, by
and among Mississippi Chemical Corporation, a Mississippi corporation ("MCC"),
Mississippi Acquisition I, Inc., a Mississippi corporation which is an indirect
wholly-owned subsidiary of MCC ("MI"), Mississippi Acquisition II, Inc., a
Mississippi corporation which is an indirect wholly-owned subsidiary of MCC
("MII"; MI and MII being collectively called the "Designated Buyers"), New
Mexico Potash Corporation, a New Mexico corporation which is an indirect
wholly-owned subsidiary of the Registrant ("NMPC"), and Eddy Potash, Inc., a
Delaware corporation which is a direct wholly-owned subsidiary of the Registrant
("Eddy"; NMPC and Eddy being collectively called the "Sellers"), on August 16,
1996 (the "Closing Date") NMPC and Eddy completed the sale of substantially all
of their assets to MI and MII, respectively, for $45,000,000 plus a working
capital adjustment (described below) and the assumption of specified liabilities
(but excluding, among other things, liabilities, if any, which may arise in
connection with the antitrust litigations in which Sellers are defendants).
NMPC and Eddy had conducted Registrant's potash mining and production
operations. During the year ended December 31, 1995 and the six month periods
ended June 30, 1995 and June 30, 1996, the potash operations contributed
approximately $54,000,000 (14%), $29,000,000 (15%) and $29,000,000 (12%),
respectively, to the Registrant's revenues, excluding intercompany sales.
On the Closing Date, the Designated Buyers paid $10,638,000 pursuant to
the above-mentioned working capital adjustment. The final amount of the
adjustment will be determined after completion (within 75 days after the Closing
Date) of a combined Closing
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Date balance sheet for Sellers, with the amount of any working capital in excess
of $10,638,000 being payable by Designated Buyers and any shortfall from
$10,638,000 being payable by Sellers.
Approximately 50% of the aggregate proceeds received on the Closing
Date were applied to prepay debt secured by the assets of NMPC or Eddy. In
connection with the sale, Registrant's indirect wholly-owned subsidiary,
Vicksburg Chemical Company, entered into a five year potash supply agreement, at
prevailing market rates during the period (subject to certain adjustments), with
MI.
Item 7. Financial Statements, Pro Forma Financial Information and Exhibits.
(a) Financial Statements of Business Acquired.
Not Applicable
(b) Pro Forma Financial Information.
The following unaudited Pro Forma Condensed Consolidated
Financial Statements give effect to the sale of substantially all of
the assets of NMPC and Eddy as described in Item 2 herein, as if such
transactions had occurred at (i) the beginning of each period presented
for the Pro Forma Condensed Consolidated Statements of Operations and
(ii) June 30, 1996 for the Pro Forma Condensed Consolidated Balance
Sheet. The Pro Forma Condensed Consolidated Statements of Operations do
not reflect a net gain of approximately $24.4 million on the sale of
NMPC's and Eddy's assets. In addition, the Pro Forma Condensed
Consolidated Statements of Operations reflect no interest earned on the
sale proceeds.
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The unaudited Pro Forma Condensed Consolidated Financial
Statements are based on historical financial information of Registrant
for the periods referred to above. Pro Forma adjustments are described
in the accompanying notes. The unaudited Pro Forma Condensed
Consolidated Financial Statements should be read in conjunction with
the historical financial statements and the notes thereto included in
the Registrant's Annual Report on Form 10-K for the year ended December
31, 1995 and the Registrant's Quarterly Report on Form 10-Q for the six
month period ended June 30, 1996, previously filed with the Securities
and Exchange Commission.
The unaudited Pro Forma Condensed Consolidated Financial
Statements are presented for informational purposes only and are not
necessarily indicative of what the actual financial position or results
of operations would have been had the transaction occurred on the dates
indicated, nor do they purport to indicate the future financial
position or results of future operations of Registrant. In the opinion
of management, all adjustments necessary to present fairly such
unaudited Pro Forma Condensed Consolidated Financial Statements have
been made.
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Trans-Resources, Inc.
Pro Forma Condensed Consolidated Balance Sheet
As of June 30, 1996
($000's)
Pro Forma
ASSETS: Historical Adjustments Pro Forma
Current Assets:
Cash $17,269 $55,638 (a) $46,632
(26,275) (b)
Accounts Receivable 106,051 (7,104) (a) 98,947
Inventory 62,791 (7,771) (a) 55,020
Prepaid Expenses and Other 46,857 (3,884) (a) 42,973
---------- ---------- ----------
Total Current Assets 232,968 10,604 243,572
Property, Plant and Equipment - net 215,784 (14,286) (a) 201,498
Other Assets 31,370 (139) (a) 31,231
---------- ---------- ----------
TOTAL ASSETS $480,122 ($3,821) $476,301
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See Notes to Pro Forma Condensed Consolidated Financial Statements.
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Trans-Resources, Inc.
Pro Forma Condensed Consolidated Balance Sheet
As of June 30, 1996
($000's)
Pro Forma
Historical Adjustments Pro Forma
LIABILITIES AND STOCKHOLDER'S EQUITY:
Current Liabilities:
Current Maturities of Long-Term Debt $23,837 $23,837
Short-Term Debt 14,727 14,727
Accounts Payable, Accrued Expenses, etc. 88,442 ($1,921)(a) 86,521
----------- ---------- ---------
Total Current Liabilities 127,006 (1,921) 125,085
--------- ---------- ---------
Long-Term Debt - net:
Senior Indebtedness, Notes Payable & Other 188,992 (26,275)(b) 162,717
Senior Subordinated Indebtedness - net 114,123 114,123
--------- ---------- ---------
Long-Term Debt - net 303,115 (26,275) 276,840
--------- --------- ---------
Other Liabilities 28,769 (64)(a) 28,705
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Stockholder's Equity:
Preferred Stock 7,960 7,960
Common Stock 0 0
Additional Paid-In Capital 8,682 8,682
Retained Earnings 4,737 24,439 (a) 29,176
Cumulative Translation Adjustment (430) (430)
Unrealized Gains on Marketable Securities 283 283
------------ ---------- ---------
Total Stockholder's Equity 21,232 24,439 45,671
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TOTAL LIABILITIES AND STOCKHOLDER'S EQUITY $480,122 ($3,821) $476,301
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See Notes to Pro Forma Condensed Consolidated Financial Statements.
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Trans-Resources, Inc.
Pro Forma Condensed Consolidated Statement of Operations
For the Six Month Period Ended June 30, 1996
($000's)
Pro Forma
Historical Adjustments Pro Forma
REVENUES $240,664 ($29,431)(c) $211,233
COSTS AND EXPENSES:
Cost of goods sold 196,292 (28,351)(c) 167,941
General and administrative 23,085 (1,721)(c) 21,364
--------- --------- ---------
OPERATING INCOME 21,287 641 (c) 21,928
Interest expense (17,048) 1,039 (c) (16,009)
Interest and other income - net 928 (119)(c) 809
--------- ---------- ---------
INCOME BEFORE INCOME TAXES
AND EXTRAORDINARY ITEM 5,167 1,561 (c) 6,728
INCOME TAX PROVISION 2,560 2,560
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INCOME BEFORE EXTRAORDINARY ITEM $2,607 $1,561 (c) $4,168
========= ========= =========
See Notes to Pro Forma Condensed Consolidated Financial Statements.
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Trans-Resources, Inc.
Pro Forma Condensed Consolidated Statement of Operations
For the Year Ended December 31, 1995
($000's)
Pro Forma
Historical Adjustments Pro Forma
REVENUES $385,564 ($53,628)(c) $331,936
COSTS AND EXPENSES:
Cost of goods sold 323,126 (49,098)(c) 274,028
General and administrative 43,193 (3,308)(c) 39,885
-------- ---------- ---------
OPERATING INCOME 19,245 (1,222)(c) 18,023
Interest expense (34,498) 1,140 (c) (33,358)
Interest and other income - net 9,128 (179)(c) 8,949
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LOSS BEFORE INCOME TAXES
AND EXTRAORDINARY ITEM (6,125) (261)(c) (6,386)
INCOME TAX PROVISION 733 733
-------- ---------- --------
LOSS BEFORE EXTRAORDINARY ITEM ($6,858) ($261)(c) ($7,119)
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See Notes to Pro Forma Condensed Consolidated Financial Statements.
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Trans-Resources, Inc.
Notes To Pro Forma Condensed Consolidated Financial Statements
The Pro Forma adjustments reflect the sales of substantially all of the assets
used in the operations of NMPC and Eddy as described in Item 2 herein. The
unaudited Pro Forma Condensed Consolidated Financial Statements reflect the
above transactions as if they had occurred at the end of the period for the
purposes of the Pro Forma Condensed Consolidated Balance Sheet and at the
beginning of each period presented for the Pro Forma Condensed Consolidated
Statements of Operations.
The Pro Forma adjustments for the above transactions are codified as indicated
and are as follows:
(a) To reflect the proceeds of approximately $55.6 million from the
sales and the reduction of the applicable assets and liabilities
and the estimated net gain relating thereto, after giving effect
to estimated transaction fees and other costs.
(b) To reflect the prepayment of approximately $26.3 million of
indebtedness secured by the assets of NMPC or Eddy.
(c) To reflect the elimination of NMPC's and Eddy's operations.
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Item 7- (Continued).
(c) Exhibits.
2.1. Asset Purchase Agreement, dated as of May 21, 1996, by and among
MCC, MI, MII, NMPC and Eddy. Registrant hereby agrees to furnish
supplementally to the Securities and Exchange Commission upon
request a copy of any omitted schedule or exhibit, all of which
are listed at the end of the Table of Contents to the Asset
Purchase Agreement.
2.2. Amendment to Asset Purchase Agreement, dated August 16, 1996.
Registrant hereby agrees to furnish supplementally to the
Securities and Exchange Commission upon request a copy of any
omitted exhibit, all of which are referenced on the first page of
the Amendment.
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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 thereunto duly authorized.
August 30, 1996 TRANS-RESOURCES, INC.
By: /s/ Lester W. Youner
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Lester W. Youner
Vice President, Treasurer and
Chief Financial Officer
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INDEX TO EXHIBITS
Exhibit Description Page No.
- ------- ----------- --------
2.1 Asset Purchase Agreement, dated as of May 21, 1996, by and
among MCC, MI, MII, NMPC and Eddy. Registrant hereby agrees
to furnish supplementally to the Securities and Exchange
Commission upon request a copy of any omitted schedule or
exhibit, all of which are listed at the end of the Table of
Contents to the Asset Purchase Agreement.
2.2 Amendment to Asset Purchase Agreement, dated August 16,
1996. Registrant hereby agrees to furnish supplementally to
the Securities and Exchange Commission upon request a copy
of any omitted exhibit, all of which are referenced on the
first page of the Amendment.
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