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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 12, 1997
NORWOOD PROMOTIONAL PRODUCTS, INC.
(EXACT NAME OF REGISTRANT AS SPECIFIED IN ITS CHARTER)
TEXAS
(STATE OR OTHER JURISDICTION OF INCORPORATION)
0-21800 74-2553074
(COMMISSION FILE NUMBER) (IRS EMPLOYER IDENTIFICATION NO.)
9311 SAN PEDRO, STE. 900
SAN ANTONIO, TEXAS 78216
(ADDRESS OF PRINCIPAL EXECUTIVE OFFICE, INCLUDING ZIP CODE)
(210) 341-9440
(REGISTRANT'S TELEPHONE NUMBER, INCLUDING AREA CODE)
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ITEM 5 OTHER EVENTS
On August 12, 1997, Norwood Promotional Products, Inc. (the "Company")
announced that it will close the retail division of its Alpha Products Company
and that it is holding discussions with interested parties regarding the sale
of the Alpha Retail business and related assets ("Alpha Retail"). As a result,
the promotional products division of Alpha Products will be relocated to the
Company's existing Radio Cap Company division facilities in San Antonio and
Pittsburgh. Expenses to dispose of the Alpha Retail operations and valuation
adjustments of assets are estimated to be approximately $2.9 million after-tax.
The Company has previously announced the Company's San Antonio corporate office
will be closed, with the operations moving to the Austin executive office. In a
separate transaction, the Key Industries division (Econoline and California
Line) will be realigned with Barlow Group division which management believes
will enable the Company to capitalize on processing capacity and product line
restructuring. In connection with these initiatives, the Company estimates
incurring a one-time charge of approximately $500,000 after-tax.
The Company has previously announced that the letter of intent and all
negotiations related to the acquisition of the Rou bill Group have been
terminated. In conjunction with this event, the Company will recognize a charge
of approximately $475,000 after-tax, in professional fees and organization
costs.
Finally, the Company expects to close a new $125 million Senior Secured Credit
Facility arranged through Merrill Lynch & Co. In conjunction with this
transaction, the Company will recognize approximately $230,000 after-tax, of
unamortized debt financing costs related to the existing credit facility.
For the fourth quarter of 1997, the Company estimates that net income,
excluding Alpha Retail, restructuring charges and other one-time charges, will
be in the range of $0.25 to $0.30 per share, compared to $0.20 per share for
the fourth quarter of 1996. The combined after-tax impact on net income of
Alpha Retail, restructuring charges and other one-time charges for the fourth
quarter is estimated to be approximately $4.7 million or $0.91 per share.
For fiscal 1997, the Company estimates that net income, excluding Alpha Retail,
restructuring charges and other one-time charges, will be in the range of $1.30
to $1.35 per share, compared to $1.01 per share for same period last year. The
combined after-tax impact on net income of Alpha Retail, restructuring charges
and other one-time charges for 1997 is estimated to be approximately $6.2
million, or $1.13 per share.
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Statements in this report, other than statements of historical information, are
forward-looking statements within the meaning of safe harbor provisions of the
Private Securities Litigation Reform Act of 1995. Such statements include known
and unknown risks which may cause the Company's actual results in future
periods to differ materially from expected results. Important factors that
could cause the Company's actual results to differ from those contained in
forward-looking statements are discussed in greater detail in the Company's
Report Form 10-K for the fiscal year ended August 31, 1996 and in other
periodic reports filed by the Company with the Securities and Exchange
Commission.
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Norwood Promotional Products, Inc.
Form 8-K
SIGNATURES
Pursuant to the requirements of the Securities Exchanged Act of 1934,
the registrant has duly caused this report to be signed on its behalf by the
undersigned hereunto duly authorized.
Date: August 12, 1997 By: /s/ J. MAX WAITS
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J. Max Waits, Secretary and Treasurer