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UNITED STATES
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
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April 8, 1999 (March 26, 1999)
Date of Report (Date of earliest event reported)
TYLER CORPORATION
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(Exact name of registrant as specified in its charter)
Delaware 1-10485 75-2303920
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(State or other (Commission (I.R.S. Employer
jurisdiction of File Number) Identification No.)
incorporation or
organization)
2800 W. Mockingbird Lane
Dallas, Texas 75235
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(Address of principal executive offices)
(214) 902-5086
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(Registrant's telephone number,
including area code)
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Item 2. Acquisition or Disposition of Assets.
Effective March 26, 1999, Tyler Corporation ("Tyler") sold all of the
outstanding common stock of its subsidiary, Forest City Auto Parts Company
("Forest City"), to HalArt L.L.C. ("HalArt") for approximately $24.5 million.
HalArt is a privately held company controlled by Arthur M. Hawkins, former
Chairman, Chief Executive Officer and President of Exide Corporation. Harold
Parkison, President of Forest City prior to its sale, is also a shareholder of
HalArt. Proceeds consisted of $12.0 million in cash, $3.8 million in a
short-term secured promissory note, $3.2 million in senior secured subordinated
notes and $5.5 million in preferred stock. The short-term secured promissory
note bears interest at 8 1/2%, becomes due in July 1999, is secured by a first
lien on certain real estate and is subject to mandatory prepayment in certain
conditions. In July 1999, the unpaid balance, if any, of the short-term secured
promissory note will be converted to a senior subordinated note due in March
2002. The senior secured subordinated notes will carry interest rates ranging
between 6% to 8%, become due in March 2002, and will be secured by a second
lien on Forest City inventory and real estate. The preferred stock will be
mandatorily redeemable March 2006. Both the subordinated notes and the
preferred stock will be subject to partial or whole redemption upon the
occurrences of specified events.
The estimated loss on the disposal of Forest City is $8.9 million (net
of taxes of $0.7 million), consisting of an estimated loss on disposal of the
business of $8.5 million and a provision of $0.4 million, after taxes, for
anticipated operating losses from the measurement date to the date of disposal.
The amounts the Company will ultimately realize could differ materially from
the amounts assumed in arriving at the loss on disposal of the discontinued
operations. In determining the loss on the disposal of the business, the
subordinated notes were valued using present value techniques. Also, because
redemption of the preferred stock is highly dependent upon future successful
operations of the buyer and due to the extended repayment terms, the Company is
unable to estimate the degree of recoverability. Accordingly, the Company will
record the value of the preferred stock as cash is received.
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Item 7. Financial Statements and Exhibits.
(b) Pro forma financial information
The sale of the outstanding common stock of Forest City ("the
Transaction") was completed on March 26, 1999, prior to the issuance of the
Company's Form 10-K for the year ended December 31, 1998. The Company
retroactively restated its consolidated financial statements in the filing to
reflect Forest City as a discontinued operation. Therefore, the results of the
Transaction are reflected in the historical consolidated financial statements
included in the Company's Form 10-K for the year ended December 31, 1998, which
is hereby incorporated by reference, and pro forma information is not required.
(c) Exhibits
10.1 Stock Purchase Agreement between HalArt, L.L.C. and Tyler Corporation.
10.2 Subordination and Intercreditor Agreement between Congress Financial
Corporation (Central), Tyler Corporation and Forest City Auto Parts
Company.
10.3 Senior Subordinated Secured Promissory Note due July 26, 1999, in the
amount of $3,825,000.
10.4 Senior Subordinated Secured Promissory Note due March 26, 2002, in the
amount of $1,155,000.
10.5 Senior Subordinated Secured Promissory Note due March 26, 2002, in the
amount of $2,000,000.
SIGNATURES
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.
TYLER CORPORATION
By: /s/ Theodore L. Bathurst
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Theodore L. Bathurst
Vice President and Chief Financial Officer
(principal financial officer)
Date: April 8, 1999
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INDEX TO EXHIBITS
EXHIBIT NUMBER DESCRIPTION
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10.1 Stock Purchase Agreement between HalArt, L.L.C. and Tyler
Corporation.
10.2 Subordination and Intercreditor Agreement between Congress
Financial Corporation (Central), Tyler Corporation and Forest City
Auto Parts Company.
10.3 Senior Subordinated Secured Promissory Note due July 26, 1999, in
the amount of $3,825,000.
10.4 Senior Subordinated Secured Promissory Note due March 26, 2002, in
the amount of $1,155,000.
10.5 Senior Subordinated Secured Promissory Note due March 26, 2002, in
the amount of $2,000,000.