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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): February 1, 1997
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RPM, INC.
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(Exact Name of Registrant as Specified in Charter)
Ohio 0-5132 34-6550857
- ---------------------------- --------------- ------------------------
(State or Other Jurisdiction (Commission (I.R.S. Employer
of Incorporation) File Number) Identification Number)
2628 Pearl Road, P.O Box 777 Medina, Ohio 44258
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(Address of Principal Executive Offices) (Zip Code)
Registrant's telephone number, including area code: (330) 273-5090
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(Former Name or Former Address, if Changed Since Last Report)
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ITEM 2. ACQUISITION OR DISPOSITION OF ASSETS
Effective as of February 1, 1997, RPM, Inc. (the "Company")
acquired 100% of the issued and outstanding Common Shares of Tremco
Incorporated, an Ohio corporation ("Tremco") from The B.F.Goodrich Company
("B.F.Goodrich"). The acquisition was accomplished pursuant to a Stock Purchase
Agreement, dated as of October 21, 1996, between B.F.Goodrich and the Company
(the "Stock Purchase Agreement"), as amended by Amendment No. 1 to the Stock
Purchase Agreement, dated as of February 1, 1997, between B.F.Goodrich and the
Company (the "Amendment"). Copies of the Stock Purchase Agreement and of the
Amendment are filed as Exhibits hereto.
Tremco manufactures and sells roofing systems, sealants and
coatings. Tremco is headquartered in Cleveland, Ohio and employs about 1,700
employees at office and manufacturing locations in the United States, Canada,
the United Kingdom, the Netherlands and Australia, with offices and joint
ventures in several other countries. The roofing systems, sealants and coatings
manufactured under the Tremco brand name are sold to customers primarily in
building, construction, building maintenance and retail markets. Tremco had
sales in 1995 of approximately $350 million.
As consideration for the acquisition of Tremco, the Company
paid B.F.Goodrich approximately $230,700,000.00 in cash. The purchase price and
the other terms of the Stock Purchase Agreement were determined through
arms-length negotiations. There are no material relationships between Tremco
and the Company or any of their affiliates, directors or officers.
The cash portion of the purchase price paid for Tremco by RPM
was financed under a Credit Agreement, dated as of February 1, 1997, between the
Company, certain Banks, National City Bank, N.A., as Documentation Agent, and
The Chase Manhattan Bank, N.A., as Administrative Agent (the "Credit
Agreement"). A copy of the Credit Agreement is filed as an Exhibit hereto. The
principal amount advanced and paid on February 3, 1997 is subject to variable
interest rate based on the London Interbank Borrowing Rate (LIBOR) plus 37.5
basis points.
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ITEM 7. FINANCIAL STATEMENTS, PRO FORMA FINANCIAL INFORMATION AND EXHIBITS
(a) Financial Statements of Businesses Acquired.
--------------------------------------------
Tremco Incorporated Combined Financial Statements as of
October 31, 1996
Report of Independent Auditors
Combined Statement of Assets To Be Acquired and
Liabilities To Be Assumed
Combined Statement of Revenues and Expenses
Combined Statement of Cash Flows
Notes to Combined Financial Statements
(b) Pro Forma Financial Information. *
----------------------------------
(c) Exhibits.
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Exhibit No. Description
----------- -----------
2.1 Stock Purchase Agreement, dated as of
October 21, 1996, between B.F.Goodrich
and the Company.**
2.2 Amendment No. 1 to the Stock Purchase
Agreement, dated as of February 1, 1997,
between B.F.Goodrich and the Company.
4.1 Form of Credit Agreement, dated as of
February 1, 1997, between the Company,
the Banks identified on the Signature
Pages thereto, National City Bank as
Documentation Agent, and The Chase
Manhattan Bank as Administrative Agent
23.1 Consent of Independent Auditors.
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* The pro forma financial information required pursuant to Article 11 of
Regulation S-X currently is not available; such information will be
filed as soon as is practicable, but not later than 60 days after the
date this Report is due.
** The Registrant agrees by this filing to supplementally furnish a copy
of the Exhibits and Schedules to this Stock Purchase Agreement to the
Commission upon request.
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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.
RPM, INC.
By: /s/ Paul A. Granzier
-----------------------------------
Paul A. Granzier
Vice President, Secretary
and General Counsel
Date: February 18, 1997
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Report of Independent Auditors
Board of Directors
The BFGoodrich Company
We have audited the accompanying combined statement of assets to be acquired
and liabilities to be assumed of Tremco Incorporated (as defined in Note A) (a
subsidiary of The BFGoodrich Company) as of October 31, 1996, and the related
combined statements of revenues and expenses and of cash flows for the
ten-month period then ended. These financial statements are the responsibility
of the management of Tremco Incorporated. Our responsibility is to express an
opinion on these financial statements based on our audit.
We conducted our audit in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to obtain
reasonable assurance about whether the financial statements are free of
material misstatement. An audit includes examining, on a test basis, evidence
supporting the amounts and disclosures in the financial statements. An audit
also includes assessing the accounting principles used and significant
estimates made by management, as well as evaluating the overall financial
statement presentation. We believe that our audit provides a reasonable basis
for our opinion.
As described in Note A, the accompanying combined financial statements were
prepared solely to present the assets to be acquired and liabilities to be
assumed pursuant to the Stock Purchase Agreement between The BFGoodrich Company
and RPM, Inc., and are not intended to be a complete presentation of the assets
and liabilities and revenues and expenses of Tremco Incorporated.
In our opinion, the financial statements referred to above present fairly, in
all material respects, the combined assets to be acquired and liabilities to be
assumed of Tremco Incorporated (as defined in Note A) at October 31, 1996, and
its combined revenues and expenses and its combined cash flows for the
ten-month period then ended, in conformity with generally accepted accounting
principles.
/s/ Ernst & Young LLP
----------------------------
Ernst & Young LLP
Cleveland, Ohio
January 22, 1997
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TREMCO INCORPORATED
COMBINED STATEMENT OF ASSETS TO BE ACQUIRED AND LIABILITIES TO BE ASSUMED
OCTOBER 31, 1996
(DOLLARS IN MILLIONS)
Current assets:
Cash and cash equivalents $ 13.8
Accounts receivable, less allowance for doubtful
accounts of $2.0 55.7
Inventory 31.2
Other current assets 2.2
--------
Total current assets 102.9
Property, plant and equipment - net 62.6
Goodwill - net 28.8
Identifiable intangible assets - net 0.8
Other assets 5.5
--------
Total assets 200.6
--------
Current liabilities:
Short-term bank debt 0.7
Accounts payable 26.8
Accrued expenses 21.2
Accrued product warranties 5.5
Foreign income taxes payable 3.1
--------
Total current liabilities 57.3
Long-term debt 0.5
Deferred warranty revenue 8.5
Accrued product warranties 6.4
Other non-current liabilities 8.9
--------
Total liabilities 81.6
--------
Net assets $ 119.0
========
See notes to financial statements.
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TREMCO INCORPORATED
COMBINED STATEMENT OF REVENUES AND EXPENSES
FOR THE TEN-MONTH PERIOD ENDED OCTOBER 31, 1996
(DOLLARS IN MILLIONS)
Net sales $285.4
Operating costs and expenses:
Cost of sales 159.4
Selling and administrative expenses 104.2
-----
263.6
-----
Operating income 21.8
Other income (expense):
Interest expense (0.6)
Interest income 1.7
Other expense-net (0.3)
-----
Income Before Income Taxes $22.6
=====
See notes to financial statements.
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TREMCO INCORPORATED
COMBINED STATEMENT OF CASH FLOWS
FOR THE TEN-MONTH PERIOD ENDED OCTOBER 31, 1996
(DOLLARS IN MILLIONS)
[S] [C]
Operating Activities
Income before income taxes $ 22.6
Adjustments to reconcile income before income taxes to
net cash provided by operating activities:
Depreciation and amortization 8.9
Foreign income taxes (5.3)
Changes in assets and liabilities:
Accounts receivable (13.6)
Inventory (3.5)
Other current assets (.7)
Accounts payable 4.1
Accrued expenses 1.2
Other - net 1.7
-------
Net cash provided by operating activities 15.4
Investing Activities
Purchases of property, plant and equipment (6.8)
Proceeds from sale of property, plant and equipment .5
-------
Net cash used by investing activities (6.3)
Financing Activities
Changes in short-term bank debt (.8)
Repayment of long-term debt (.2)
Intercompany transactions with BFGoodrich - net (18.8)
-------
Net cash used by financing activities (19.8)
Effect of exchange rate changes on cash and cash equivalents .2
-------
Net decrease in cash and cash equivalents (10.5)
Cash and cash equivalents at beginning of period 24.3
-------
Cash and cash equivalents at end of period $ 13.8
=======
Supplemental cash flow information:
Interest paid (net of amount capitalized) $ 0.6
=======
See notes to financial statements.
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TREMCO INCORPORATED
NOTES TO COMBINED FINANCIAL STATEMENTS
FOR THE TEN-MONTH PERIOD ENDED OCTOBER 31, 1996
(DOLLARS IN MILLIONS)
NOTE A. BASIS OF PRESENTATION
On October 21, 1996, The BFGoodrich Company ("BFG") entered into a Stock
Purchase Agreement (the "Agreement") with RPM, Inc. ("RPM") whereby RPM agreed
to purchase all of the capital stock of Tremco (as defined below), other than
certain assets and liabilities to be retained by BFG as defined in the
Agreement. The transaction is expected to close as of February 1, 1997, and the
Agreement may be amended by mutual agreement of the parties as of that date. The
accompanying financial statements include the assets, liabilities, and the
revenues and expenses of the businesses to be acquired by RPM. Those businesses
include Tremco Incorporated and the following subsidiaries of Tremco
Incorporated and certain affiliates (direct or indirect subsidiaries of BFG):
Tremco Service Corporation (U.S.); Tremco Limited (Canada); Tremco Ltd. (U.K.)
and subsidiaries; Kamia Chemical GmbH (Germany); Tremco Asia Pacific Pty.
Limited and subsidiaries (Australia); Tremco Far East Limited and subsidiary
(Hong Kong); H&P Extrusions B.V., H&P Mixings B.V. and Tremco B.V. (Holland); Oy
Tremco Ltd. Finland; Tremco A.B. (Sweden) and certain operations in Mexico and
Japan (collectively "Tremco" or the "Company"). The Company operates in the
building maintenance and construction business segment. Tremco manufactures
insulating glass sealants, construction sealants and waterproofing coatings,
commercial glazing products and commercial roofing products.
The accompanying Combined Statement of Assets To Be Acquired and Liabilities To
Be Assumed, Combined Statement of Revenues and Expenses and Combined Statement
of Cash Flows have been prepared from the historical books and records of the
Company. In accordance with the Agreement, these financial statements reflect
the net assets of the businesses to be acquired and their revenues and expenses
and cash flows. Assets and liabilities of Tremco that will not be acquired or
assumed and have no continuing significance to the businesses to be acquired
have been omitted from the Combined Statement of Assets To Be Acquired and
Liabilities To Be Assumed. Assets and liabilities to be retained by BFG
primarily consist of certain property and equipment, current and deferred income
taxes attributable to U.S. operations, liabilities for U.S. defined benefit
pension and postretirement arrangements, bank debt of Tremco Asia Pacific Pty.
Limited, and the intercompany balance with BFG.
Tremco Incorporated and its U.S. subsidiaries are included in the consolidated
federal income tax return of BFG. BFG's policy is to account for all U.S. income
taxes at the parent company level. As a result, no U.S. income tax assets or
liabilities relating to temporary differences and no income tax expense
(benefit) have been reflected in the accompanying financial statements. Foreign
income taxes have been excluded from the Combined Statement of Revenues and
Expenses for presentation purposes. The cash flow effect of accrued foreign
income taxes to be paid by foreign businesses has been included in the Combined
Statement of Cash Flows.
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TREMCO INCORPORATED
NOTES TO COMBINED FINANCIAL STATEMENTS (CONTINUED)
(DOLLARS IN MILLIONS)
NOTE A. BASIS OF PRESENTATION (CONTINUED)
BFG provides various treasury functions for Tremco in the U. S. and maintains a
cash management program under which cash generated by Tremco is transferred to
BFG and working capital requirements of Tremco are paid by BFG. Incident to this
system, BFG maintains an interest-bearing intercompany account to record the net
amount owed to or due from Tremco. Interest income in the accompanying Combined
Statement of Revenues and Expenses includes the interest earned ($1.3) by Tremco
from BFG on this intercompany account balance at BFG's variable rate of
interest. The intercompany account balance with BFG is not to be acquired by RPM
and, accordingly, this balance has been excluded from the net assets at October
31, 1996.
BFG also provides certain services to the Company such as insurance and employee
benefits management, telecommunications, tax and legal, among others. Costs
charged to the Company for these services are allocated by BFG based on
management's estimates of the Company's proportionate share of the total
expenses; however, these allocations are not necessarily indicative of the
expenses that would have been incurred had Tremco been operated as a stand-alone
business. BFG allocates costs related to defined benefit pension and
postretirement plans based on actuarial valuations. Total expenses - net
allocated to the Company by BFG totaled $4.3 for the ten-month period ended
October 31, 1996 (including allocations related to defined benefit pension and
postretirement plans). Net expenses charged to the Company are not settled in
cash and become part of the intercompany account balance with BFG.
NOTE B. SIGNIFICANT ACCOUNTING POLICIES
PRINCIPLES OF COMBINATION
The combined financial statements reflect the accounts of Tremco (see note A).
Investments in 20 to 50 percent owned affiliates are accounted for using the
equity method. Equity in earnings (losses) from these businesses, which are not
significant, are included in Other expense-net. Intercompany accounts and
transactions have been eliminated. The operations of Tremco's foreign
operations, excluding Canada, are consolidated on a one-month time lag in order
to achieve the month-end reporting requirements of BFG.
CASH AND CASH EQUIVALENTS
Cash equivalents consist of highly liquid investments with a maturity of three
months or less at the time of purchase.
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TREMCO INCORPORATED
NOTES TO COMBINED FINANCIAL STATEMENTS (CONTINUED)
(DOLLARS IN MILLIONS)
NOTE B. SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
INVENTORIES
Inventories are stated at the lower of cost or market. Certain domestic
inventories are valued by the last-in, first-out (LIFO) cost method. Inventories
not valued by the LIFO method are valued principally by the first-in, first-out
cost method.
LONG-LIVED ASSETS
Property, plant and equipment are recorded at cost. Depreciation and
amortization is principally computed by either the straight-line method or the
sum-of-the-years digits method over the following estimated useful lives:
buildings and improvements, 15 to 40 years; machinery and equipment, 3 to 15
years. Repair and maintenance costs are expensed as incurred.
Tremco was acquired by BFG in 1979. Goodwill was recorded for the excess of the
purchase price over the fair value of the net tangible assets and identifiable
intangible assets acquired, and is being amortized using the straight-line
method over 40 years. Goodwill also includes the excess of the purchase price
over the fair value of the net assets of businesses acquired by Tremco since
1979 and is being amortized by the straight-line method over 10 to 20 years.
Identifiable intangible assets are recorded at cost, or when acquired as a part
of a business combination, at estimated fair value. These assets include
trademarks, patents and other technology agreements and licenses. They are
amortized using the straight-line method over estimated useful lives of 5 to 40
years.
Impairment of long-lived assets and related goodwill is recognized when events
or changes in circumstances indicate that the carrying amount of the asset, or
related groups of assets, may not be recoverable. Measurement of the amount of
impairment may be based on appraisal, market values of similar assets or
estimated discounted future cash flows resulting from use and ultimate
disposition of the asset.
REVENUE RECOGNITION
The Company recognizes revenues from sale of products at the point of passage of
title, which is at the time of shipment. Revenues earned from providing services
are recognized when the service is performed. Revenues from warranties
separately purchased by customers are recognized over an average warranty period
of approximately ten years, on a straight-line basis.
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TREMCO INCORPORATED
NOTES TO COMBINED FINANCIAL STATEMENTS (CONTINUED)
(DOLLARS IN MILLIONS)
NOTE B. SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
FINANCIAL INSTRUMENTS
The Company's significant financial instruments recorded in the Combined
Statement of Assets To Be Acquired and Liabilities To Be Assumed include cash
and cash equivalents, accounts receivable, accounts payable and short-term bank
debt. Because of their short maturity, the carrying amount of these financial
instruments approximates fair value.
USE OF ESTIMATES
The preparation of financial statements in conformity with generally accepted
accounting principles requires management to make estimates and assumptions that
affect the amounts reported in the financial statements and accompanying notes.
Actual results could differ from those estimates.
NOTE C. FINANCING ARRANGEMENTS
SHORT-TERM BANK DEBT
At October 31, 1996, the Company had available unused formal foreign lines of
credit and overdraft facilities of $9.2.
LONG-TERM DEBT
Long-term debt represents notes payable to foreign banks. Notes payable to banks
consist of fixed rate instruments which have principal maturing through 2015.
Fixed interest rates on all notes payable to banks range from 7.6 percent to
12.5 percent.
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TREMCO INCORPORATED
NOTES TO COMBINED FINANCIAL STATEMENTS (CONTINUED)
(DOLLARS IN MILLIONS)
NOTE D. LEASE COMMITMENTS
The Company leases certain of its office and manufacturing facilities as well as
machinery and equipment under operating leases. The future minimum lease
payments, by year and in the aggregate, under noncancelable operating leases
with initial or remaining noncancelable lease terms in excess of one year,
consisted of the following:
1997 $2.2
1998 1.6
1999 1.1
2000 0.9
2001 0.7
Thereafter 2.9
----
Total minimum payments $9.4
====
Net rent expense for the ten-month period ended October 31, 1996, consisted of
the following:
Minimum rentals $2.4
Contingent rentals 0.8
----
$3.2
====
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TREMCO INCORPORATED
NOTES TO COMBINED FINANCIAL STATEMENTS (CONTINUED)
(DOLLARS IN MILLIONS)
NOTE E. EMPLOYEE BENEFIT PLANS
PENSION PLANS
Substantially all U.S. employees of the Company are participants in BFG's
defined benefit pension plan. BFG allocates pension costs to the Company based
on actuarial valuations. Pension expense of $0.9 was allocated to the Company
during the ten-month period ended October 31, 1996.
In addition, Tremco has several contributory and noncontributory defined benefit
pension plans covering employees outside the U.S., principally in Canada. Plans
generally provide benefit payments using a formula that is based on an
employee's compensation and length of service.
Accumulated benefits and related assets for Tremco's Canadian defined benefit
pension plan as of December 31, 1996, the most recent valuation date, are as
follows:
Actuarial present value of accumulated benefit obligation:
Vested $ 12.1
Non-vested --
-------
Accumulated benefit obligation 12.1
Plan assets at fair value 20.8
-------
Plan assets in excess of accumulated
benefit obligation $ 8.7
-------
Projected benefit obligation $ 14.0
Plan assets at fair value 20.8
-------
Plan assets in excess of projected
benefit obligation $ 6.8
=======
Consisting of:
Unrecognized transition asset $ 0.6
Unrecognized prior service cost (0.5)
Unrecognized net gain 5.2
Prepaid pension cost at December 31, 1996 1.5
-------
Total $ 6.8
=======
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TREMCO INCORPORATED
NOTES TO COMBINED FINANCIAL STATEMENTS (CONTINUED)
(DOLLARS IN MILLIONS)
NOTE E. EMPLOYEE BENEFIT PLANS (CONTINUED)
The major assumptions used in the December 31, 1996 actuarial valuation for the
Canadian pension plan are as follows: discount rate - 8.25 percent; rate of
increase in compensation levels - 4.5 percent; expected long-term rate of return
on plan assets - 9 percent. The plan's assets consist principally of investments
in mutual funds invested in equities, debt and real estate.
The components of net periodic pension income of ($0.1) for the Canadian plan
for the ten-month period ended October 31, 1996 are: service cost - $0.4;
interest cost - $1.0; actual return on plan assets - ($2.6); net amortization -
$1.1.
Prepaid pension cost of $1.8 is reflected in the Combined Statement of Assets To
Be Acquired and Liabilities To Be Assumed at October 31, 1996.
SAVINGS PLAN
The Company also sponsors an unfunded defined contribution plan for employees of
Tremco Canada. Amounts credited to participant's accounts are based on a
percentage of the amount employees contribute to other plans. During the
ten-month period ended October 31, 1996, the Company expensed $0.3, including
interest. A non-current liability of $3.0 is reflected in the Combined Statement
of Assets To Be Acquired and Liabilities To Be Assumed.
The Company also participates in a BFG defined contribution savings plan, which
covers most U.S. salaried employees of the Company. The Company matches from
three to six percent of eligible earnings depending upon investment options
elected. For the ten-month period ended October 31, 1996, Company contributions
amounted to $2.1 under this plan.
OTHER POSTRETIREMENT BENEFIT PLANS
The Company's U.S. employees participate in a BFG defined benefit postretirement
plan that provides certain health-care and life insurance benefits to eligible
employees. The health-care plan is contributory, with retiree contributions
adjusted periodically, and contain other cost-sharing features, such as
deductibles and coinsurance. The life insurance plan is generally
noncontributory. Net periodic postretirement benefit expense for the ten-month
period ended October 31, 1996, allocated to the Company was $0.6.
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TREMCO INCORPORATED
NOTES TO COMBINED FINANCIAL STATEMENTS (CONTINUED)
(DOLLARS IN MILLIONS)
NOTE E. EMPLOYEE BENEFIT PLANS (CONTINUED)
The Company also sponsors a defined benefit postretirement plan that provides
certain health-care benefits to employees of Tremco Canada. Net periodic
postretirement benefit expense for the ten-month period ended October 31, 1996
was $0.3. A non-current liability of $3.7 is reflected in the Combined Statement
of Assets To Be Acquired and Liabilities To Be Assumed.
NOTE F. GEOGRAPHIC INFORMATION
The Company's operations are principally in the United States, Canada and
Europe. Sales are not concentrated in any one customer. The Company does not
believe that business risks in countries in which it operates, including
currency restrictions, could have a significant adverse effect on cash flow,
liquidity or capital resources.
Net assets of consolidated foreign subsidiaries amounted to $70.3 (including
$13.6 of cash and cash equivalents) at October 31, 1996.
The Company also exports products manufactured in the United States to
affiliated and unaffiliated companies worldwide. Intercompany transfers made at
prevailing prices to foreign subsidiaries amounted to $6.0 for the ten-month
period ended October 31, 1996. Export sales to unaffiliated foreign customers
amounted to $1.0 for the ten-month period ended October 31, 1996.
Operating Identifiable
Sales Income (Loss) Assets
----- ------------- ------
[S] [C] [C] [C]
Geographic Areas:
United States $171.5 $13.1 $ 89.2
Canada 90.7 8.6 63.0
Europe 43.7 1.3 41.9
Other Foreign 13.2 (1.1) 8.5
Inter-area eliminations (33.7) (0.1) (2.0)
---- ----- -----
Total $285.4 $21.8 $200.6
===== ==== =====
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TREMCO INCORPORATED
NOTES TO COMBINED FINANCIAL STATEMENTS (CONTINUED)
(DOLLARS IN MILLIONS)
NOTE G. RESEARCH AND DEVELOPMENT EXPENSE
Research and development expense amounted to $6.8 for the ten-month period ended
October 31, 1996.
NOTE H. INVENTORIES
The major classes of inventories are as follows:
At first-in, first-out or average cost (which
approximates current costs):
Finished products $26.3
Raw materials and supplies 6.5
---
32.8
Reserve to reduce certain inventories
to LIFO basis (1.6)
-----
$31.2
=====
At October 31, 1996, approximately 22 percent of inventory was valued by the
LIFO method.
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TREMCO INCORPORATED
NOTES TO COMBINED FINANCIAL STATEMENTS (CONTINUED)
(DOLLARS IN MILLIONS)
NOTE I. PROPERTY, PLANT AND EQUIPMENT
Property, plant and equipment consists of the following:
Land $ 4.3
Buildings and improvements 39.6
Machinery and equipment 75.0
Construction in progress 7.2
-------
126.1
Less allowances for depreciation
and amortization (63.5)
-----
$62.6
=====
Interest costs capitalized were $0.2 for the ten-month period ended October 31,
1996. Depreciation and amortization of property, plant and equipment for the
ten-month period ended October 31, 1996 was $7.1.
NOTE J. GOODWILL AND IDENTIFIABLE INTANGIBLE ASSETS
Goodwill and identifiable intangible assets include the following:
Goodwill $48.7
Accumulated amortization (19.9)
-----
$28.8
=====
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TREMCO INCORPORATED
NOTES TO COMBINED FINANCIAL STATEMENTS (CONTINUED)
(DOLLARS IN MILLIONS)
NOTE J. GOODWILL AND IDENTIFIABLE INTANGIBLE ASSETS (CONTINUED)
Identifiable intangible assets $ 1.7
Accumulated amortization (.9)
---
$ 0.8
=====
Amortization of goodwill and identifiable intangible assets was $1.8 for the
ten-month period ended October 31, 1996.
NOTE K. ACCRUED EXPENSES
Accrued expenses include the following:
Wages, vacations, pensions and other
employment costs $11.6
Deferred warranty revenue 1.3
Other 8.3
-----
$21.2
=====
NOTE L. COMMITMENTS AND CONTINGENCIES
Tremco has various purchase commitments for materials, supplies and energy
incident to the ordinary course of business.
There are pending or threatened against Tremco various claims, lawsuits and
administrative proceedings, all arising from the ordinary course of business
with respect to commercial and product liability matters, which seek remedies or
damages. Tremco believes that any liability that may finally be determined with
respect to commercial and product liability claims in excess of amounts provided
should not have a material effect on the Company's consolidated financial
position or results of operations. The Company is also involved in legal
proceedings as a plaintiff involving contract and other matters. Gain
contingencies, if any, are recognized when realized.
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