<PAGE> 1
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 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) OCTOBER 1, 1999
SPALDING HOLDINGS CORPORATION
(Exact name of registrant as specified in its charter)
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<CAPTION>
<S> <C> <C>
DELAWARE 333-14569 59-2439656
(State or other jurisdiction of (Commission (I.R.S. Employer
Incorporation or Organization) File Number) Identification No.)
425 MEADOW STREET, CHICOPEE, MASSACHUSETTS 01013
(Address of principal executive offices) (Zip code)
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Registrant's telephone number, including area code: (413) 536-1200
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ITEM 5. OTHER EVENTS
On August 21, 1998, Evenflo & Spalding Holdings Corporation announced that it
had completed its restructuring that resulted in the separation of Spalding
Holdings Corporation (the "Company") and Evenflo Company, Inc. into two
stand-alone companies. On August 21, 1998, in conjunction with this transaction,
the Company filed a Current Report on Form 8-K with the Securities and Exchange
Commission.
On October 1, 1999, the Company issued a press release detailing quarterly pro
forma financial information for the fiscal year ended September 30, 1998. In
addition, the press release included results for the Company's transition period
(October 1, 1998 - December 31, 1998) and presented pro forma financial
information for the calendar year ended December 31, 1998. The purpose of the
press release is to assist investors in understanding the 1999 financial results
as compared to the 1998 financial results for the Company on a stand-alone
basis.
ITEM 7. FINANCIAL STATEMENTS AND EXHIBITS
(b) Pro forma Financial Information
-Spalding Holdings Corporation Unaudited Pro Forma Financial
Information for the Nine Months Ended June 30, 1998
-Spalding Holdings Corporation Unaudited Pro Forma Financial
information for the Fiscal Year Ended September 30, 1997
(c) The following is filed as an Exhibit to this Report
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<S> <C>
Exhibit No. Description of Exhibit
99 Press Release Dated October 1, 1999
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SPALDING HOLDINGS CORPORATION
UNAUDITED PRO FORMA FINANCIAL INFORMATION
FOR THE NINE MONTHS ENDED JUNE 30, 1998
(DOLLAR AMOUNTS IN THOUSANDS)
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<CAPTION>
(1)
Spalding (3)
Holdings (2) Pro Forma
Corporation Evenflo Spalding Holdings
(As reported) Company, Inc. Corporation
<S> <C> <C> <C>
Net sales $ 648,590 $ 245,233 $ 403,357
Cost of sales 440,280 197,119 243,161
--------- --------- ---------
Gross profit 208,310 48,114 160,196
SG&A 226,746 49,022 177,724
Royalty income, net (9,829) (1,559) (8,270)
Restructuring costs 9,136 1,443 7,693
--------- --------- ---------
Income (loss) from operations (17,743) (792) (16,951)
Interest expense, net 59,287 8,102 51,185
Currency (gain) loss, net 3,214 510 2,704
--------- --------- ---------
Earning (loss) before income
taxes and equity in net
earnings (loss) of
Evenflo Company, Inc. $ (80,244) $ (9,404) $ (70,840)
========= ========= =========
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(1) Represents results for Spalding Holdings Corporation as previously reported.
(2) Represents stand-alone results of Evenflo Company, Inc. Includes $2,100 of
SG&A expenses and $3,500 of interest expense representing corporate expenses
allocated as a result of the separation of Spalding Holdings Corporation and
Evenflo Company, Inc.
(3) Pro forma Spalding Holdings Corporation. Represents Spalding Holdings
Corporation less the results of Evenflo Company, Inc.
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SPALDING HOLDINGS CORPORATION
UNAUDITED PRO FORMA FINANCIAL INFORMATION
FOR THE FISCAL YEAR ENDED SEPTEMBER 30, 1997
(DOLLAR AMOUNTS IN THOUSANDS)
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<CAPTION>
(1)
Spalding (3)
Holdings (2) Pro Forma
Corporation Evenflo Spalding Holdings
(As reported) Company, Inc. Corporation
<S> <C> <C> <C>
Net sales $ 850,179 $ 296,743 $ 553,436
Cost of sales 560,171 235,925 324,246
--------- --------- ---------
Gross profit 290,008 60,818 229,190
SG&A 258,089 55,612 202,477
Royalty income, net (14,109) (480) (13,629)
Restructuring costs 12,001 9,591 2,410
--------- --------- ---------
Income (loss) from operations 34,027 (3,905) 37,932
Interest expense, net 71,326 7,243 64,083
Currency (gain) loss, net 1,236 47 1,189
--------- --------- ---------
Earning (loss) before income
taxes and equity in net
earnings (loss) of Evenflo
Company, Inc. $ (38,535) $ (11,195) $ (27,340)
========= ========= =========
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(1) Represents results for Spalding Holdings Corporation as previously reported.
(2) Represents stand-alone results of Evenflo Company, Inc. Includes $2,900 of
SG&A expenses and $4,100 of interest expense representing corporate expenses
allocated as a result of the separation of Spalding Holdings Corporation and
Evenflo Company, Inc.
(3) Pro forma Spalding Holdings Corporation. Represents Spalding Holdings
Corporation less the results of Evenflo Company, Inc.
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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, thereunto duly authorized.
Spalding Holdings Corporation
(Registrant)
By: /s/ Daniel Frey
----------------
Daniel Frey
Chief Financial Officer
(an officer and authorized signatory)
Date: October 1, 1999
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Exhibit 99
NEWS RELEASE
425 Meadow Street Daniel Frey
Chicopee, MA 01013 Chief Financial Officer
(413) 536-1200
SPALDING HOLDINGS CORPORATION
RELEASES PRO FORMA FINANCIAL INFORMATION
CHICOPEE, MASSACHUSETTS, OCTOBER 1, 1999 -- Spalding Holdings Corporation (the
"Company"), the parent of Spalding Sports Worldwide, Inc. ("Spalding") today
released quarterly unaudited pro forma financial information for the period
October 1, 1997 through September 30, 1998 to reflect the elimination of Evenflo
Company, Inc. ("Evenflo") from the consolidated results that had been previously
disclosed.
The Company is a global manufacturer and marketer of branded consumer products
serving the sporting goods markets. Prior to August 20, 1998, Evenflo was also a
subsidiary of the Company. On August 20, 1998, the Company separated its two
businesses, Spalding and Evenflo, into two stand-alone companies (the
"Reorganization"). After giving effect to the Reorganization, the Company
continues to own 42.4% of the common stock of Evenflo. Effective, October 1,
1998, the Company changed its fiscal year end from September 30 to December 31.
The attached pro forma financial information eliminates Evenflo from the
consolidation and provides information as to the historical performance of the
Company as a stand-alone business without Evenflo's operating results or trading
capital.
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SPALDING HOLDINGS CORPORATION
UNAUDITED PRO FORMA FINANCIAL INFORMATION
(DOLLAR AMOUNTS IN THOUSANDS)
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<CAPTION>
Unaudited
----------------------------------------------------------------------------------
Fiscal Year
Fiscal 1998 Quarters Ended 9/30/98
-----------------------------------------------------------------------------------
Oct - Dec Jan - Mar Apr - June July - Sept Total
1997 1998 1998 1998 Year
---- ---- ---- ---- ----
<S> <C> <C> <C> <C> <C>
Net sales $ 92,556 $ 149,168 $ 161,633 $ 133,545 $ 536,902
Cost of sales 55,545 88,872 98,744 79,670 322,831
--------- --------- --------- --------- ---------
Gross profit 37,011 60,296 62,889 53,875 214,071
pp 40.0% 40.4% 38.9% 40.3% 39.9%
SG&A 46,602 60,927 70,195 58,108 235,832
Royalty income, net (2,738) (2,693) (2,839) (3,654) (11,924)
Restructuring costs 349 4,679 2,665 12,424 20,117
--------- --------- --------- --------- ---------
Income (loss) from operations (7,202) (2,617) (7,132) (13,003) (29,954)
pp (7.8%) (1.8%) (4.4%) (9.7%) (5.6%)
Interest expense, net 15,750 16,745 18,690 17,095 68,280
Currency (gain) loss, net 864 444 1,396 (470) 2,234
--------- --------- --------- --------- ---------
Earning (loss) before income
taxes and equity in net
earnings (loss) of
Evenflo Company, Inc. $ (23,816) $ (19,806) $ (27,218) $ (29,628) $(100,468)
========= ========= ========= ========= =========
EBITDA $ (4,915) $ 248 $ (5,350) $ (7,583) $ (17,600)
========= ========= ========= ========= =========
BANK EBITDA $ (4,548) $ 7,829 $ 4,913 $ 13,006 $ 21,200
========= ========= ========= ========= =========
Net trade receivables $ 117,212 $ 166,993 $ 152,473 $ 130,849
Net inventories 141,475 155,297 141,444 113,706
Trade payables 136,602 164,330 119,015 83,908
--------- --------- --------- ---------
Trading capital $ 122,085 $ 157,960 $ 174,902 $ 160,647
========= ========= ========= =========
Unaudited
---------
Transition 12 Months
Period Ended
Oct - Dec Dec 31,
1998 1998
---- ----
<S> <C> <C>
Net sales $ 56,774 $ 501,120
Cost of sales 77,420 344,706
--------- ---------
Gross profit (20,646) 156,414
pp (36.4%) 31.2%
SG&A 61,354 250,584
Royalty income, net (2,039) (11,225)
Restructuring costs 2,969 22,737
--------- ---------
Income (loss) from operations (82,930) (105,682)
pp (146.1%) (21.1%)
Interest expense, net 13,911 66,441
Currency (gain) loss, net (2,595) (1,225)
--------- ---------
Earning (loss) before income
taxes and equity in net
earnings (loss) of
Evenflo Company, Inc. $ (94,246) $(170,898)
========= =========
EBITDA $ (80,834) $ (93,519)
========= =========
BANK EBITDA $ (36,229) $ (10,481)
========= =========
Net trade receivables $ 81,950
Net inventories 89,166
Trade payables 83,982
---------
Trading capital $ 87,134
=========
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Effective January 1, 1999, Spalding changed its method of valuing U.S.
inventories from LIFO to FIFO to more properly reflect the method of product
consumption. All amounts recorded by the Company prior to January 1, 1999
have been restated to reflect the retroactive application of this accounting
change as required by generally accepted accounting principles. The effect of
this accounting change results in a decrease in EBITDA and BANK EBITDA for the
three months ended December 31, 1997, March 31, 1998 and June 30, 1998 of
$2,124, $1,095 and $415, respectively and an increase in EBITDA and BANK EBITDA
for the three months ended September 30, 1998 of $712.
