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SECURITIES AND EXCHANGE COMMISSION
Washington D.C. 20549
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FORM 8-K/A
AMENDMENT NO. 1 TO
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the
Securities Exchange Act of 1934
Date of Report (Date of earliest event reported): January 8, 1996
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THE SHERWIN-WILLIAMS COMPANY
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(Exact name of registrant as specified in its charter)
Ohio 1-4851 34-0526850
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(State or other (Commission File (IRS Employer Identification No.)
jurisdiction of Number)
incorporation)
101 Prospect Avenue, N.W., Cleveland, Ohio 44115
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(Address of principal executive offices) (zip code)
Registrant's telephone number, including area code: (216) 566-2000
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N/A
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(Former name or former address, if changed since last report)
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The Registrant hereby amends Item 7 of its Current Report on Form 8-K,
dated January 8, 1996, for the purpose of filing the financial statements of
the Company set forth in Item 7(a)(1) and (2) as exhibits hereto.
Item 7: Financial Statements, Pro Forma Financial Information and
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Exhibits
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(a) Financial Statements and Pro Forma Financial Information:
The following financial statements and pro forma information
are hereby filed as a part of this report:
(1) Audited Consolidated Balance Sheets of the Company
as of December 31, 1994 and 1993 and audited
Statements of Consolidated Income, Statements of
Consolidated Shareholders' Equity and Statements of
Consolidated Cash Flows for the fiscal years ended
December 31, 1994 and 1993 are incorporated herein
by reference from the Company's Annual Report on
Form 10-K for the fiscal year ended December 31,
1994.
(2) Unaudited Consolidated Condensed Balance Sheet of
the Company as of September 30, 1995 and Unaudited
Consolidated Income Statement and Statement of
Consolidated Cash Flows for the nine months ended
September 30, 1995 are incorporated herein by
reference from the Company's Quarterly Report on
Form 10-Q for the quarterly period ended
September 30, 1995.
(3) Unaudited Pro Forma Combined Condensed Balance Sheet
which combines the Unaudited Consolidated Condensed
Balance Sheet of the Company with the Unaudited
Consolidated Balance Sheet of Sherwin-
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Williams as of September 30, 1995, along with a
description of the pro forma adjustments.*
(4) Unaudited Pro Forma Combined Condensed Statements of
Income which combine the consolidated results of the
Company with the consolidated results of
Sherwin-Williams for the year ended December 31,
1994 and for the nine months ended September 30,
1995, along with a description of the related pro
forma adjustments.*
* The pro forma financial information appears on
pages 4-7.
(b) Exhibits
23 Consent of Deloitte & Touche LLP as independent
auditors dated January 19, 1996 (filed herewith).
99.1 Agreement and Plan of Merger, dated as of November
4, 1995, by and among the Company, Purchaser and
Sherwin-Williams, filed as Exhibit (c)(1) to
Sherwin-Williams' Tender Offer Statement on Schedule
14D-1/Schedule 13D filed November 9, 1995, as
amended, and incorporated herein by reference.
99.2 Text of Press Release issued by Sherwin-Williams on
January 8, 1996 (filed herewith).
99.3 Text of Press Release issued by Sherwin-Williams on
January 10, 1996 (filed herewith).
99.4 Audited Consolidated Balance Sheets of the Company
as of December 31, 1994 and 1993 and audited
Statements of Consolidated Income, Statements of
Consolidated Shareholders' Equity and Statements of
Consolidated Cash Flows for the fiscal years ended
December 31, 1994 and 1993 (incorporated herein by
reference from pages 19 through 35 of the Company's
Annual Report on Form 10-K for the fiscal year ended
December 31, 1994).
99.5 Unaudited Consolidated Condensed Balance Sheet of
the Company as of September 30, 1995 and Unaudited
Consolidated Income Statement and Statement of
Consolidated Cash Flows for the nine months ended
September 30, 1995 (incorporated herein by reference
from pages 2 through 7 of the Company's Quarterly
Report on Form 10-Q for the quarterly period ended
September 30, 1995).
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PRO FORMA FINANCIAL INFORMATION
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THE SHERWIN-WILLIAMS COMPANY AND
PRATT & LAMBERT UNITED, INC.
The following unaudited pro forma combined condensed balance sheet as
of September 30, 1995 combines the historical consolidated balance sheet
information of Sherwin-Williams and the Company as if the acquisition were
consummated at September 30, 1995. The unaudited pro forma combined condensed
statements of income for the year ended December 31, 1994 and for the nine
months ended September 30, 1995 combine the historical consolidated income
statement information of Sherwin-Williams and the Company as if the acquisition
had been consummated on January 1 of each respective period. The transaction is
being recorded under the purchase method of accounting after giving effect to
the pro forma adjustments and assumptions described in the accompanying notes.
The pro forma financial statements have been prepared by management of
Sherwin-Williams based upon the historical information included herein and
other financial information. These pro forma statements do not purport to be
indicative of the results which would have occurred had the acquisition been
made on January 1 of each respective period or which may be expected to occur
in the future. The pro forma statements should be read in conjunction with the
financial statements and notes thereto included in the Annual Report on Form
10-K of Sherwin-Williams for the year ended December 31, 1994, and in the
Quarterly Report on Form 10-Q of Sherwin-Williams for the quarter ended
September 30, 1995, both incorporated herein by reference.
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UNAUDITED PRO FORMA COMBINED CONDENSED BALANCE SHEET
THE SHERWIN-WILLIAMS COMPANY AND
PRATT & LAMBERT UNITED, INC.
Thousands of dollars
September 30, 1995
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Pro Forma Adjustments (e)
Sherwin- Pratt & -------------------------- Pro Forma
Williams Lambert Dr Cr Combined
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ASSETS
Current assets
Cash and cash equivalents $ 211,308 $ 2,944 $ $ 210,000 (a) $ 4,252
Short-term investments 5,000 5,000 (a) 0
Accounts receivable, less allowance 417,218 80,613 497,831
Inventories 465,513 61,811 11,858 (g) 539,182
Other current assets 183,885 6,484 4,150 (g) 186,219
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Total current assets 1,282,924 151,852 11,858 219,150 1,227,484
Deferred pension assets 231,671 231,671
Investment in Pratt & Lambert 395,726 (a) 395,938 (d) 0
212 (c)
Other assets, including goodwill and deferred taxes 152,346 109,331 341,858 (d) 93,579 (b) 502,248
7,708 (g)
Income tax receivable 5,109 (h) 5,109
Property, plant and equipment 964,313 113,152 1,077,465
Less allowances for depreciation and
amortization 521,723 62,620 584,343
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442,590 50,532 493,122
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Total assets $ 2,109,531 $ 311,715 $ 754,763 $ 716,375 $ 2,459,634
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LIABILITIES AND SHAREHOLDERS' EQUITY
Current liabilities
Accounts payable $ 262,587 $ 42,786 $ $ $ 305,373
Short-term debt 20,000 20,000 (f) 180,726 (a) 226,618
45,892 (f)
Other current liabilities 355,534 19,033 212 (c) 374,779
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Total current liabilities 618,121 81,819 20,000 226,830 906,770
Long-term debt 22,711 75,892 75,892 (f) 50,000 (f) 72,711
Other long-term liabilities 289,963 6,345 296,308
Shareholders' equity:
Common stock, at par 100,933 135 135 (d) 100,933
Other capital 168,626 99,193 99,193 (d) 5,109 (h) 173,735
Retained earnings 1,222,065 76,030 93,579 (b) 17,549 (d) 1,222,065
Cumulative foreign currency translation
adjustment (20,375) (1,663) 1,663 (d) (20,375)
Treasury stock, at cost (292,513) (26,036) 26,036 (d) (292,513)
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Total shareholders' equity 1,178,736 147,659 192,907 50,357 1,183,845
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Total liabilities and shareholders' equity $ 2,109,531 $ 311,715 $ 288,799 $ 327,187 $ 2,459,634
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<FN>
(a) Establish investment, remove cash used upon acquisition and record debt incurred to finance the acquisition. Acquisition
price includes payment of spread on stock options of the Company, which spread represents the difference between the
exercise and tender offer per share prices.
(b) Eliminate goodwill previously recorded by the Company.
(c) Record direct costs of acquisition.
(d) Eliminate investment and record initial goodwill based upon purchase price less net book value of assets acquired.
(e) With the exception of the reversal of the LIFO reserve noted in (g) below, all assets and liabilities are included at the
Company's historical values. Sherwin-Williams is in the process of obtaining fair market values for these assets and
liabilities to be used as the basis for establishing the opening balance sheet values for the Company's net assets.
These fair market values will not be available for several months.
(f) Record refinancing of the Company's debt via issuance of short-term and long-term indebtedness.
(g) Record reversal of the Company's LIFO reserve and related tax effect using a 35% statutory federal rate.
(h) Record tax effect, using a 35% statutory federal rate, on the exercise of stock options.
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UNAUDITED PRO FORMA COMBINED CONDENSED STATEMENT OF INCOME
THE SHERWIN-WILLIAMS COMPANY AND
PRATT & LAMBERT UNITED, INC.
Thousands of dollars, except per share data
For the year ended December 31, 1994
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Pro Forma Adjustments (h)
Sherwin- Pratt & ------------------------ Pro Forma
Williams Lambert Dr Cr Combined
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Net sales $ 3,100,069 $ 328,901 $ $ 131,810 (b) $ 3,560,780
Costs and expenses:
Cost of goods sold 1,772,671 231,915 100,325 (b) 2,104,911
Selling, general and administrative expenses 1,018,470 84,571 8,354 (c) 802 (a) 1,127,759
17,166 (b)
Interest expense (income) (5,005) 3,367 16,914 (e) 3,496 (d) 19,081
5,722 (f)
1,579 (b)
Other 15,420 (764) 14,656
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2,801,556 319,089 150,060 136,108 3,266,407
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Income before income taxes 298,513 9,812 294,373
Income taxes 111,942 4,295 2,240 (g) 113,997
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Net income $ 186,571 $ 5,517 $ 180,376
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Net income per share $ 2.15 $ 2.08
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Average shares & equivalents outstanding
(in thousands) 86,862 86,862
<FN>
(a) Remove goodwill amortization of the Company.
(b) Record pro forma sales and expenses of United Coatings, Inc. from 1/1/94 through 8/4/94 (the date of the merger between the
Company and United Coatings, Inc.).
(c) Record amortization of excess of purchase price over acquired net assets, based on an estimated life of 40 years. Such
amortization expense is subject to possible adjustment upon completion of appraisal valuation.
(d) Remove interest expense of the Company.
(e) Record additional estimated interest expense resulting from the use of debt to finance the acquisition.
(f) Remove interest income earned on short-term investments.
(g) Record tax effect, using a 35% statutory federal rate, on the net pro forma adjustments.
(h) Sherwin-Williams expects to achieve certain synergies in relation to the business combination. Such synergies have not been
directly identified, and thus are not included in the above pro forma adjustments.
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UNAUDITED PRO FORMA COMBINED CONDENSED STATEMENT OF INCOME
THE SHERWIN-WILLIAMS COMPANY AND
PRATT & LAMBERT UNITED, INC.
Thousands of dollars, except per share data
For the nine months ended September 30, 1995
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Pro Forma Adjustments (g)
Sherwin- Pratt & ---------------------- Pro Forma
Williams Lambert Dr Cr Combined
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Net sales $ 2,532,912 $ 373,391 $ $ $ 2,906,303
Costs and expenses:
Cost of goods sold 1,461,908 275,784 1,737,692
Selling, general and administrative expenses 809,630 72,037 6,265 (b) 1,804 (a) 886,129
Interest expense (income) (5,802) 5,319 12,685 (d) 5,502 (c) 12,448
5,748 (e)
Other 2,274 (600) 1,674
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2,268,010 352,540 24,698 7,306 2,637,943
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Income before income taxes 264,902 20,851 268,360
Income taxes 98,014 9,133 4,526 (f) 102,621
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Net income $ 166,888 $ 11,718 $ 165,739
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Net income per share $ 1.95 $ 1.93
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Average shares outstanding (in thousands) 85,706 85,706
<FN>
(a) Remove goodwill amortization related to United Coatings, Inc.
(b) Record amortization of excess of purchase price over acquired net assets, based on an estimated life of 40 years. Such
amortization expense is subject to possible adjustment upon completion of appraisal valuation.
(c) Remove interest expense of the Company.
(d) Record additional estimated interest expense resulting from the use of debt to finance the acquisition.
(e) Remove interest income earned on short-term investments.
(f) Record tax effect, using a 35% statutory federal rate, on the net pro forma adjustments.
(g) Sherwin-Williams expects to achieve certain synergies in relation to the business combination. Such synergies
have not been directly identified, and thus are not included in the above pro forma adjustments.
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SIGNATURES
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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.
THE SHERWIN-WILLIAMS COMPANY
February 8, 1996 By: /s/ L.E. Stellato
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L.E. Stellato
Vice President, General Counsel
and Secretary
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EXHIBIT INDEX
EXHIBIT NO. EXHIBIT DESCRIPTION
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23 Consent of Deloitte & Touche LLP as independent
auditors dated January 19, 1996 (filed herewith).
99.1 Agreement and Plan of Merger, dated as of November
4, 1995, by and among the Company, Purchaser and
Sherwin-Williams, filed as Exhibit (c)(1) to
Sherwin-Williams' Tender Offer Statement on Schedule
14D-1/Schedule 13D filed November 9, 1995, as
amended, and incorporated herein by reference.
99.2 Text of Press Release issued by Sherwin-Williams on
January 8, 1996 (filed herewith).
99.3 Text of Press Release issued by Sherwin-Williams on
January 10, 1996 (filed herewith).
99.4 Audited Consolidated Balance Sheets of the Company
as of December 31, 1994 and 1993 and audited
Statements of Consolidated Income, Statements of
Consolidated Shareholders' Equity and Statements of
Consolidated Cash Flows for the fiscal years ended
December 31, 1994 and 1993 (incorporated herein by
reference from pages 19 through 35 of the Company's
Annual Report on Form 10-K for the fiscal year ended
December 31, 1994).
99.5 Unaudited Consolidated Condensed Balance Sheet of
the Company as of September 30, 1995 and Unaudited
Consolidated Income Statement and Statement of
Consolidated Cash Flows for the nine months ended
September 30, 1995 (incorporated herein by reference
from pages 2 through 7 of the Company's Quarterly
Report on Form 10-Q for the quarterly period ended
September 30, 1995).
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