<PAGE>
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
------------------------
FORM 10-Q
---------------
[X] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(D) OF THE SECURITIES EXCHANGE
ACT OF 1934
FOR THE QUARTERLY PERIOD ENDED MARCH 28, 1998
OR
[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(D) OF THE SECURITIES
EXCHANGE ACT OF 1934
FOR THE TRANSITION PERIOD FROM TO
COMMISSION FILE NUMBER
333-05978
EURAMAX INTERNATIONAL PLC
(Exact name of registrant as specified in its charter)
<TABLE>
<S> <C>
ENGLAND AND WALES 98-1066997
(State or other jurisdiction of (I.R.S. Employer Identification No.
incorporation or organization)
5335 TRIANGLE PARKWAY, SUITE 550, 30092
NORCROSS, GEORGIA (Zip Code)
(Address of principal executive offices)
</TABLE>
------------------------
Registrant's telephone number, including area code 770-449-7066
Indicate by check mark whether the registrant (1) has filed all reports required
to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during
the preceding 12 months (or for such shorter period that the registrant was
required to file such reports), and (2) has been subject to such filing
requirements for the past 90 days. [X] Yes [ ] No
As of May 12, 1998, Registrant had outstanding 1,000,000 Ordinary Shares and
34,000,000 Preference Shares. All of these shares were owned by affiliates.
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
<PAGE>
PART I--FINANCIAL INFORMATION
ITEM 1. FINANCIAL STATEMENTS
EURAMAX INTERNATIONAL PLC AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF EARNINGS
(THOUSANDS OF U.S. DOLLARS)
(UNAUDITED)
<TABLE>
<CAPTION>
QUARTER ENDED QUARTER ENDED
MARCH 29, MARCH 28,
1997 1998
-------------- --------------
<S> <C> <C>
Net sales......................................................................... $ 114,874 $ 143,089
Costs and expenses:
Cost of goods sold.............................................................. 92,036 119,417
Selling and general............................................................. 10,639 12,079
Depreciation and amortization................................................... 2,695 3,054
-------------- --------------
105,370 134,550
-------------- --------------
Earnings from operations...................................................... 9,504 8,539
Interest expense, net............................................................. (5,618) (6,060)
Other expense, net................................................................ (40) (41)
-------------- --------------
Earnings before income taxes.................................................. 3,846 2,438
Provision for income taxes........................................................ 1,241 1,019
-------------- --------------
Net Earnings...................................................................... 2,605 1,419
Dividends on redeemable preference shares......................................... 1,233 1,413
-------------- --------------
Net earnings available for ordinary shareholders.................................. $ 1,372 $ 6
-------------- --------------
-------------- --------------
</TABLE>
The accompanying notes are an integral part of these condensed consolidated
financial statements.
2
<PAGE>
EURAMAX INTERNATIONAL PLC AND SUBSIDIARIES
CONDENSED CONSOLIDATED BALANCE SHEETS
(THOUSANDS OF U.S. DOLLARS)
(UNAUDITED)
<TABLE>
<CAPTION>
DECEMBER 26, MARCH 28,
1997 1998
------------ ----------
<S> <C> <C>
ASSETS
Current assets:
Cash and cash equivalents............................................................ $ 12,914 $ 13,649
Accounts receivable, net............................................................. 78,085 91,577
Inventories.......................................................................... 87,461 85,977
Other current assets................................................................. 2,314 2,736
------------ ----------
Total current assets............................................................... 180,774 193,939
Property, plant and equipment, net..................................................... 113,187 113,062
Goodwill, net.......................................................................... 76,910 75,645
Deferred income taxes.................................................................. 11,004 10,966
Other assets........................................................................... 15,875 16,144
------------ ----------
$ 397,750 $ 409,756
------------ ----------
------------ ----------
LIABILITIES AND SHAREHOLDERS' EQUITY
Current liabilities:
Cash overdrafts...................................................................... $ 11,470 $ 2,236
Accounts payable..................................................................... 42,575 58,012
Accrued expenses and other current liabilities....................................... 29,792 28,064
Current maturities of long-term debt................................................. 3,924 4,705
------------ ----------
Total current liabilities.......................................................... 87,761 93,017
Long-term debt, less current maturities................................................ 240,292 245,238
Other liabilities...................................................................... 8,266 8,829
Deferred income taxes.................................................................. 17,555 17,541
------------ ----------
Total liabilities.................................................................. 353,874 364,625
------------ ----------
Redeemable preference shares........................................................... 40,382 41,795
------------ ----------
Ordinary shareholders' equity:
Ordinary shares...................................................................... 1,000 1,000
Retained earnings.................................................................... 4,420 4,426
Accumulated other comprehensive income............................................... (1,926) (2,090)
------------ ----------
Total ordinary shareholders' equity................................................ 3,494 3,336
------------ ----------
$ 397,750 $ 409,756
------------ ----------
------------ ----------
</TABLE>
The accompanying notes are an integral part of these condensed consolidated
financial statements.
3
<PAGE>
EURAMAX INTERNATIONAL PLC AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(THOUSANDS OF U.S. DOLLARS)
(UNAUDITED)
<TABLE>
<CAPTION>
QUARTER ENDED QUARTER ENDED
MARCH 29, MARCH 28,
1997 1998
-------------- --------------
<S> <C> <C>
Net cash used in operating activities............................................ $ (3,354) $ (3,490)
-------------- -------
Cash flows from investing activities:
Capital expenditures........................................................... (867) (2,951)
-------------- -------
Net cash used in investing activities........................................ (867) (2,951)
-------------- -------
Cash flows from financing activities:
Proceeds from long-term debt................................................... 13,116 10,569
Repayment of long-term debt.................................................... (12,409) (4,547)
Proceeds from sale of assets................................................... 48 50
-------------- -------
Net cash provided by financing activities.................................... 755 6,072
-------------- -------
Effect of exchange rate changes on cash.......................................... 2,522 1,104
-------------- -------
Net increase (decrease) in cash and equivalents.................................. (944) 735
Cash and equivalents at beginning of period...................................... 12,516 12,914
-------------- -------
Cash and equivalents at end of period............................................ $ 11,572 $ 13,649
-------------- -------
-------------- -------
</TABLE>
The accompanying notes are an integral part of these condensed consolidated
financial statements.
4
<PAGE>
EURAMAX INTERNATIONAL PLC AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(THOUSANDS OF U.S. DOLLARS)
(UNAUDITED)
1. BASIS OF PRESENTATION:
For purposes of this report the "Company" refers to Euramax International plc
and Subsidiaries, collectively.
The Condensed Consolidated Financial Statements of the Company have been
prepared in accordance with the rules and regulations of the Securities and
Exchange Commission (the "SEC"). In the opinion of the management of the
Company, these statements include all adjustments necessary for a fair
presentation of the results of all interim periods reported herein. All
adjustments are of a normal recurring nature unless otherwise disclosed.
Management believes that the disclosures made are adequate for a fair
presentation of results of operations, financial position and cash flows. These
condensed consolidated financial statements should be read in conjunction with
the year-end consolidated financial statements and accompanying notes included
in the Company's Annual Report on Form 10-K for the year ended December 26,
1997. Operating results for the period ended March 28, 1998, are not necessarily
indicative of future results that may be expected for the year ending December
25, 1998.
2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES:
COMPREHENSIVE INCOME
Effective December 27, 1997, the Company adopted Statement of Financial
Accounting Standards ("SFAS") No. 130, REPORTING COMPREHENSIVE INCOME. SFAS No.
130 establishes standards for the reporting and display of comprehensive income
and its components in the financial statements. Prior periods have been
reclassified to reflect the adoption of this standard. The adoption of SFAS No.
130 has no material impact on the Company's consolidated results of operations,
financial position or cash flows. Comprehensive income equals net income plus
other comprehensive income. For the quarters ended March 28, 1998, and March 29,
1997, comprehensive income was approximately $1,255 and $2,895, respectively.
Other comprehensive income refers to revenue, expenses, gains and losses which
are reflected in stockholders' equity but excluded from net income. For the
Company, the components of other comprehensive income are principally foreign
currency translation adjustments and minimum pension liability adjustments.
Other comprehensive income (loss), net of tax, was approximately ($164) and $290
for the quarters ended March 28, 1998, and March 29, 1997, respectively. The
statement requires that total comprehensive income be reported for interim
periods but does not require disclosure of the components of other comprehensive
income for interim periods.
For information regarding other significant accounting policies, see Note 2 to
the Consolidated Financial Statements of the Company for the year ended December
26, 1997, set forth in the Company's Annual Report on Form 10-K.
3. INVENTORIES:
Inventories were comprised of:
<TABLE>
<CAPTION>
DECEMBER 26, MARCH 28,
1997 1998
------------ -----------
<S> <C> <C>
Raw materials....................................................... $ 63,768 $ 61,814
Work in process..................................................... 12,029 11,233
Finished products................................................... 11,664 12,930
------------ -----------
$ 87,461 $ 85,977
------------ -----------
------------ -----------
</TABLE>
5
<PAGE>
EURAMAX INTERNATIONAL PLC AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(THOUSANDS OF U.S. DOLLARS)
(UNAUDITED) (CONTINUED)
4. COMMITMENTS AND CONTINGENCIES:
The Company has entered into several non-cancelable long-term contracts for the
purchase of aluminum at market values. The aluminum contracts expire at various
times through 1999. Contracted amounts of aluminum are less than the Company's
anticipated requirements.
The Company and its subsidiaries are not currently parties to any pending legal
proceedings other than such proceedings as are incidental to its business.
Management believes that such proceedings would not, individually or in the
aggregate, reasonably be expected to have a material adverse effect on the
consolidated financial position or results of operations of the Company and its
subsidiaries taken as a whole.
The Company has been named as a defendant in lawsuits or as a potentially
responsible party in state and Federal administrative and judicial proceedings
seeking contribution for costs associated with the investigation, analysis,
correction and remediation of environmental conditions at various hazardous
waste disposal sites. The Company continues to monitor these actions and
proceedings and to vigorously defend both its own interests as well as the
interests of its affiliates. The Company's ultimate liability in connection with
present and future environmental claims will depend on many factors, including
its volumetric share of the waste at a given site, the remedial action required,
the total cost of remediation, and the financial viability and participation of
the other entities that also sent waste to the site. Once it becomes probable
that the Company will incur costs in connection with remediation of a site and
such costs can be reasonably estimated, the Company establishes or adjusts its
reserve for its projected share of these costs. Based upon current law and
information known to the Company concerning the size of the sites known to it,
anticipated costs, their years of operations and the number of other potentially
responsible parties, management believes that it has adequate reserves for the
Company's potential share of the estimated aggregate liability for the costs of
remedial actions and related costs and expenses. In addition, the Company
establishes reserves for remedial measures required from time to time at its own
facilities. Management believes that the reasonably probable outcomes of these
matters will not materially exceed established reserves and will not have a
material impact on the future financial position, net earnings or cash flows of
the Company. The Company's reserves, expenditures and expenses for all
environmental exposures were not significant for any of the dates or periods
presented.
In connection with the acquisition of the Company from Alumax Inc. on September
25, 1996, the Company was indemnified by Alumax for substantially all of its
costs, if any, related to environmental matters for occurrences arising prior to
the closing date of the acquisition during the period of time it was owned
directly or indirectly by Alumax. Such indemnification includes costs that may
ultimately be incurred to contribute to the remediation of certain specified
existing National Priorities List ("NPL") sites for which the Company had been
named a potentially responsible party under the federal Comprehensive
Environmental Response, Compensation, and Liability Act ("CERCLA") as of the
closing date of the Acquisition, as well as certain potential costs for sites
listed on state hazardous cleanup lists. With respect to all other environmental
matters, Alumax's obligations are limited to $125.0 million. However,
notwithstanding the indemnity, the Company does not believe that it has any
significant probable liability for environmental claims. Further, the Company
believes it to be unlikely that the Company would be required to bear
environmental costs in excess of its pro rata share of such costs as a
potentially responsible party under CERCLA.
6
<PAGE>
EURAMAX INTERNATIONAL PLC AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
(THOUSANDS OF U.S. DOLLARS)
(UNAUDITED)
5. SUPPLEMENTAL CONDENSED COMBINED FINANCIAL STATEMENTS:
On September 25, 1996, Euramax purchased the Company from Alumax Inc. The
acquisition was financed, in part, through Senior Subordinated Notes due 2006
(the "Notes"). The Notes are primary obligations of Euramax (the "Parent"). The
United Kingdom and Netherlands holding company subsidiaries of Euramax are
co-obligors under the Notes (the "Co-obligors"). The United States holding
company subsidiary of Euramax (the "Guarantor") has provided a full and
unconditional guarantee of the Notes. The following supplemental condensed
combined financial statements as of March 29, 1997 and March 28, 1998 reflect
the financial position, results of operations, and cash flows of each of the
Parent, the Co-Obligors and Guarantor entities, and such combined information of
the Non-Guarantor Subsidiaries. The Co-obligors and the Guarantor are
wholly-owned subsidiaries of Euramax and are each jointly, severally, fully, and
unconditionally liable under the Notes. Separate complete financial statements
of each Co-obligor and of the Guarantor are not presented because management has
determined that they are not material to investors.
<TABLE>
<CAPTION>
QUARTER ENDED MARCH 29, 1997
-------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C>
CO-OBLIGORS AND GUARANTOR SUBSIDIARIES
-------------------------------------------
<CAPTION>
EURAMAX
EURAMAX AMERIMAX EURAMAX EUROPEAN
INTERNATIONAL HOLDINGS, EUROPEAN HOLDINGS, NON-
PLC INC. HOLDINGS PLC B.V. GUARANTOR
(PARENT) (GUARANTOR) (CO-OBLIGOR) (CO-OBLIGOR) SUBSIDIARIES ELIMINATIONS TOTALS
------------- ------------- ------------- ------------- ----------- ------------ ----------
<S> <C> <C> <C> <C> <C> <C> <C>
Net Sales................. $ -- $ -- $ -- $ -- $ 114,874 $ -- $ 114,874
Cost and expenses:
Cost of goods sold...... -- -- -- -- 92,036 -- 92,036
Selling and general..... -- -- -- -- 10,639 -- 10,639
Depreciation and
amortization.......... -- -- -- -- 2,695 -- 2,695
------ ------------- ------ ------------- ----------- ------------ ----------
Earnings from
operations.......... -- -- -- -- 9,504 -- 9,504
Equity in earnings of
subsidiaries............ 2,605 1,075 1,377 2,354 -- (7,411) --
Interest expense, net..... -- (3,254) (815) (580) (969) -- (5,618)
Other expense, net........ -- -- -- -- (40) -- (40)
------ ------------- ------ ------------- ----------- ------------ ----------
Earnings (loss) before
income taxes........ 2,605 (2,179) 562 1,774 8,495 (7,411) 3,846
Provision for income
taxes................... -- (1,167) (285) (203) 2,896 -- 1,241
------ ------------- ------ ------------- ----------- ------------ ----------
Net earnings (loss)....... 2,605 (1,012) 847 1,977 5,599 (7,411) 2,605
Dividends on redeemable
preference shares....... 1,233 -- -- -- -- -- 1,233
------ ------------- ------ ------------- ----------- ------------ ----------
Net earnings (loss)
available for ordinary
shareholders............ $ 1,372 $ (1,012) $ 847 $ 1,977 $ 5,599 $ (7,411) $ 1,372
------ ------------- ------ ------------- ----------- ------------ ----------
------ ------------- ------ ------------- ----------- ------------ ----------
</TABLE>
7
<PAGE>
EURAMAX INTERNATIONAL PLC AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
(THOUSANDS OF U.S. DOLLARS)
(UNAUDITED)
5. SUPPLEMENTAL CONDENSED COMBINED FINANCIAL STATEMENTS: (CONTINUED)
<TABLE>
<CAPTION>
QUARTER ENDED MARCH 28, 1998
-------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C>
CO-OBLIGORS AND GUARANTOR SUBSIDIARIES
-------------------------------------------
<CAPTION>
EURAMAX
EURAMAX AMERIMAX EURAMAX EUROPEAN
INTERNATIONAL HOLDINGS, EUROPEAN HOLDINGS, NON-
PLC INC. HOLDINGS PLC B.V. GUARANTOR
(PARENT) (GUARANTOR) (CO-OBLIGOR) (CO-OBLIGOR) SUBSIDIARIES ELIMINATIONS TOTALS
------------- ------------- ------------- ------------- ----------- ------------ ----------
<S> <C> <C> <C> <C> <C> <C> <C>
Net Sales................. $ -- $ -- $ -- $ -- $ 143,089 $ -- $ 143,089
Cost and expenses:
Cost of goods sold...... -- -- -- -- 119,417 -- 119,417
Selling and general..... 23 -- -- -- 12,056 -- 12,079
Depreciation and
amortization.......... -- -- -- -- 3,054 -- 3,054
------ ------------- ------ ------------- ----------- ------------ ----------
Earnings (loss) from
operations.......... (23) -- -- -- 8,562 -- 8,539
Equity in earnings of
subsidiaries............ 1,442 (1,605) 1,133 3,069 -- (4,039) --
Interest expense, net..... -- (583) (177) (6) (5,294) -- (6,060)
Other income (expense),
net..................... -- -- 74 (1,116) 1,001 -- (41)
------ ------------- ------ ------------- ----------- ------------ ----------
Earnings (loss) before
income taxes........ 1,419 (2,188) 1,030 1,947 4,269 (4,039) 2,438
Provision for income
taxes................... -- (228) (31) (394) 1,672 -- 1,019
------ ------------- ------ ------------- ----------- ------------ ----------
Net earnings (loss)....... 1,419 (1,960) 1,061 2,341 2,597 (4,039) 1,419
Dividends on redeemable
preference shares....... 1,413 -- -- -- -- -- 1,413
------ ------------- ------ ------------- ----------- ------------ ----------
Net earnings (loss)
available for ordinary
shareholders............ $ 6 $ (1,960) $ 1,061 $ 2,341 $ 2,597 $ (4,039) $ 6
------ ------------- ------ ------------- ----------- ------------ ----------
------ ------------- ------ ------------- ----------- ------------ ----------
</TABLE>
8
<PAGE>
EURAMAX INTERNATIONAL PLC AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
(THOUSANDS OF U.S. DOLLARS)
(UNAUDITED)
5. SUPPLEMENTAL CONDENSED COMBINED FINANCIAL STATEMENTS: (CONTINUED)
<TABLE>
<CAPTION>
DECEMBER 26, 1997
---------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C>
CO-OBLIGORS AND GUARANTOR SUBSIDIARIES
-------------------------------------------
<CAPTION>
EURAMAX
EURAMAX AMERIMAX EURAMAX EUROPEAN
INTERNATIONAL HOLDINGS, EUROPEAN HOLDINGS, NON-
PLC INC. HOLDINGS PLC B.V. GUARANTOR CONSOLIDATED
(PARENT) (GUARANTOR) (CO-OBLIGOR) (CO-OBLIGOR) SUBSIDIARIES ELIMINATIONS TOTALS
------------- ------------- ------------- ------------- ----------- ------------ ------------
<S> <C> <C> <C> <C> <C> <C> <C>
ASSETS
Current assets:
Cash and cash
equivalents......... $ -- $ -- $ -- $ -- $ 12,914 $ -- $ 12,914
Accounts receivable,
net................. -- -- -- -- 78,085 -- 78,085
Inventories........... -- -- -- -- 87,461 -- 87,461
Other current
assets.............. -- -- -- -- 2,314 -- 2,314
------------- ------------- ------------- ------------- ----------- ------------ ------------
Total current
assets............ -- -- -- -- 180,774 -- 180,774
Property, plant and
equipment, net........ -- -- -- -- 113,187 113,187
Amounts due from parent
/ affiliates.......... 70,492 69,139 40,002 42,591 -- (222,224) --
Goodwill, net........... -- -- -- -- 76,910 -- 76,910
Investment in
consolidated
subsidiaries.......... 43,929 25,857 (213) 13,516 -- (83,089) --
Deferred income tax
asset................. -- 448 -- 2,138 8,418 11,004
Other assets............ 2,070 -- 856 934 12,015 -- 15,875
------------- ------------- ------------- ------------- ----------- ------------ ------------
$ 116,491 $ 95,444 $ 40,645 $ 59,179 $ 391,304 $ (305,313) $ 397,750
------------- ------------- ------------- ------------- ----------- ------------ ------------
------------- ------------- ------------- ------------- ----------- ------------ ------------
LIABILITIES AND SHAREHOLDERS' EQUITY
Current liabilities:
Cash overdraft........ $ -- $ -- $ -- $ -- $ 11,470 $ -- $ 11,470
Accounts payable...... -- -- -- -- 42,575 -- 42,575
Accrued expenses and
other current
liabilities......... 2,010 (1,609) 410 8,369 20,612 -- 29,792
Current maturities of
long- term debt..... -- -- -- -- 3,924 -- 3,924
------------- ------------- ------------- ------------- ----------- ------------ ------------
Total current
liabilities....... 2,010 (1,609) 410 8,369 78,581 -- 87,761
Long-term debt, less
current maturities.... 70,605 -- 27,179 37,216 105,292 -- 240,292
Amounts due to parent/
affiliates............ -- 77,779 3,954 -- 140,491 (222,224) --
Other liabilities....... -- -- -- -- 8,266 -- 8,266
Deferred income taxes... -- -- -- -- 17,555 -- 17,555
------------- ------------- ------------- ------------- ----------- ------------ ------------
Total liabilities... 72,615 76,170 31,543 45,585 350,185 (222,224) 353,874
------------- ------------- ------------- ------------- ----------- ------------ ------------
Redeemable preference
shares................ 40,382 -- -- -- -- -- 40,382
------------- ------------- ------------- ------------- ----------- ------------ ------------
Ordinary shareholders'
equity:
Ordinary shares....... 1,000 -- 78 23 4,970 (5,071) 1,000
Paid-in capital....... -- 17,000 6,922 9,077 89,458 (122,457) --
Retained earnings
(deficit)........... 4,420 2,381 1,779 6,358 18,714 (29,232) 4,420
Dividends declared.... -- -- -- -- (70,600) 70,600 --
Accumulated other
comprehensive
income.............. (1,926) (107) 323 (1,864) (1,423) 3,071 (1,926)
------------- ------------- ------------- ------------- ----------- ------------ ------------
Total ordinary
shareholders'
equity............ 3,494 19,274 9,102 13,594 41,119 (83,089) 3,494
------------- ------------- ------------- ------------- ----------- ------------ ------------
$ 116,491 $ 95,444 $ 40,645 $ 59,179 $ 391,304 $ (305,313) $ 397,750
------------- ------------- ------------- ------------- ----------- ------------ ------------
------------- ------------- ------------- ------------- ----------- ------------ ------------
</TABLE>
9
<PAGE>
EURAMAX INTERNATIONAL PLC AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
(THOUSANDS OF U.S. DOLLARS)
(UNAUDITED)
5. SUPPLEMENTAL CONDENSED COMBINED FINANCIAL STATEMENTS: (CONTINUED)
<TABLE>
<CAPTION>
MARCH 28, 1998
---------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C>
CO-OBLIGORS AND GUARANTOR SUBSIDIARIES
-------------------------------------------
<CAPTION>
EURAMAX
EURAMAX AMERIMAX EURAMAX EUROPEAN
INTERNATIONAL HOLDINGS, EUROPEAN HOLDINGS, NON-
PLC INC. HOLDINGS PLC B.V. GUARANTOR CONSOLIDATED
(PARENT) (GUARANTOR) (CO-OBLIGOR) (CO-OBLIGOR) SUBSIDIARIES ELIMINATIONS TOTALS
------------- ------------- ------------- ------------- ----------- ------------ ------------
<S> <C> <C> <C> <C> <C> <C> <C>
ASSETS
Current assets:
Cash and cash
equivalents......... $ -- $ -- $ -- $ -- $ 13,649 $ -- $ 13,649
Accounts receivable,
net................. -- -- -- -- 91,577 -- 91,577
Inventories........... -- -- -- -- 85,977 -- 85,977
Other current
assets.............. -- -- -- -- 2,736 -- 2,736
------------- ------------- ------------- ------------- ----------- ------------ ------------
Total current
assets............ -- -- -- -- 193,939 -- 193,939
Property, plant and
equipment, net........ -- -- -- -- 113,062 113,062
Amounts due from parent
/ affiliates.......... 70,528 73,779 40,102 40,536 -- (224,945) --
Goodwill, net........... -- -- -- -- 75,645 -- 75,645
Investment in
consolidated
subsidiaries.......... 45,207 24,252 953 16,093 -- (86,505) --
Deferred income tax
asset................. -- 448 -- 2,074 8,444 -- 10,966
Other assets............ 2,011 -- 834 880 12,419 -- 16,144
------------- ------------- ------------- ------------- ----------- ------------ ------------
$ 117,746 $ 98,479 $ 41,889 $ 59,583 $ 403,509 $ (311,450) $ 409,756
------------- ------------- ------------- ------------- ----------- ------------ ------------
------------- ------------- ------------- ------------- ----------- ------------ ------------
LIABILITIES AND SHAREHOLDERS' EQUITY
Current liabilities:
Cash overdraft........ $ -- $ -- $ -- $ -- $ 2,236 $ -- $ 2,236
Accounts payable...... -- -- -- -- 58,012 -- 58,012
Accrued expenses and
other current
liabilities......... 2,010 149 1,294 6,922 17,689 -- 28,064
Current maturities of
long- term debt..... -- -- -- -- 4,705 -- 4,705
------------- ------------- ------------- ------------- ----------- ------------ ------------
Total current
liabilities....... 2,010 149 1,294 6,922 82,642 -- 93,017
Long-term debt, less
current maturities.... 70,605 -- 27,179 37,216 110,238 -- 245,238
Amounts due to parent/
affiliates............ -- 81,016 3,202 -- 140,727 (224,945) --
Other liabilities....... -- -- -- -- 8,829 -- 8,829
Deferred income taxes... -- -- -- -- 17,541 -- 17,541
------------- ------------- ------------- ------------- ----------- ------------ ------------
Total liabilities... 72,615 81,165 31,675 44,138 359,977 (224,945) 364,625
------------- ------------- ------------- ------------- ----------- ------------ ------------
Redeemable preference
shares................ 41,795 -- -- -- -- -- 41,795
------------- ------------- ------------- ------------- ----------- ------------ ------------
Ordinary shareholders'
equity:
Ordinary shares....... 1,000 -- 78 23 4,970 (5,071) 1,000
Paid-in capital....... -- 17,000 6,922 9,077 89,456 (122,455) --
Retained earnings
(deficit)........... 4,426 421 2,840 8,699 (49,289) 37,329 4,426
Accumulated other
comprehensive
income.............. (2,090) (107) 374 (2,354) (1,605) 3,692 (2,090)
------------- ------------- ------------- ------------- ----------- ------------ ------------
Total ordinary
shareholders'
equity............ 3,336 17,314 10,214 15,445 43,532 (86,505) 3,336
------------- ------------- ------------- ------------- ----------- ------------ ------------
$ 117,746 $ 98,479 $ 41,889 $ 59,583 $ 403,509 $ (311,450) $ 409,756
------------- ------------- ------------- ------------- ----------- ------------ ------------
------------- ------------- ------------- ------------- ----------- ------------ ------------
</TABLE>
10
<PAGE>
ITEM 2. MANAGEMENT DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION
AND RESULTS OF OPERATIONS
RESULTS OF OPERATIONS
The following table sets forth the Company's Statements of Earnings Data
expressed as a percentage of net sales:
<TABLE>
<CAPTION>
QUARTER ENDED
------------------------
<S> <C> <C>
MARCH 29, MARCH 28,
1997 1998
----------- -----------
Statement of Earnings Data:
Net sales.............................................................. 100.0% 100.0%
Costs and expenses:
Cost of goods sold................................................... 80.1 83.5
Selling and general.................................................. 9.3 8.4
Depreciation and amortization........................................ 2.3 2.1
----- -----
Earnings from operations............................................. 8.3 6.0
Interest expense, net.................................................. 4.9 4.3
----- -----
Earnings before income taxes......................................... 3.4 1.7
Provision for income taxes............................................. 1.1 .7
----- -----
Net earnings........................................................... 2.3% 1.0%
----- -----
----- -----
</TABLE>
QUARTER ENDED MARCH 28, 1998 AS COMPARED TO QUARTER ENDED MARCH 29, 1997
NET SALES. Net sales increased 24.6% to $143.1 million for the quarter ended
March 28, 1998, from $114.9 million for the quarter ended March 29, 1997.
Approximately $22.4 million of this increase is attributable to net sales of
Fabral, formerly Gentek Building Products, Inc., which was acquired by the
Company on July 17, 1997. Excluding Fabral, net sales increased 5.0% or $5.8
million. Increases in shipments, attributable to aluminum product shipments to
OEM markets in Europe and metal raincarrying systems shipped to home center
customers in North America, combined to increase net sales for the quarter ended
March 28, 1998, by approximately $12.2 million as compared to net sales for the
quarter ended March 29, 1997. In addition, net sales increased approximately
$6.2 million for sales attributable to Amerimax Laminated Products, Inc.,
formerly JTJ Laminating, Inc., acquired by the Company on March 28, 1997. These
increases were partially offset by (i) weakening of the Dutch Guilder and French
Franc compared to the U.S. Dollar, which reduced net sales approximately $2.1
million and $691,000, respectively, (ii) a $9.4 million decline in sales
attributable to divested subsidiaries in 1997 and (iii) other individually
insignificant occurrences. Net sales in the U.S. increased 31.2% to $84.6
million for the quarter ended March 28, 1998, from $64.5 million for the quarter
ended March 29, 1997. Net sales in Europe increased 16.0% to $58.5 million for
the quarter ended March 28, 1998, from $50.4 million for the quarter ended March
29, 1997.
COST OF GOODS SOLD. Cost of goods sold, as a percentage of net sales, increased
3.4% for the three months ended March 28, 1998, from 80.1% in 1997 to 83.5% in
1998. This increase is primarily attributable to sales of a greater percentage
of lower margin product (steel) from the Fabral acquisition ($22.4 million),
partially offset by (i) sales of a greater percentage of higher margin aluminum
products, particularly in Europe, and (ii) an overall improvement in gross
margin attributable to higher sales volume.
SELLING, GENERAL AND ADMINISTRATIVE EXPENSES. Selling, general and
administrative expenses, as a percentage of net sales, decreased 0.9% for the
quarter ended March 28, 1998, from 9.3% in 1997 to 8.4% in 1998. This decrease
is primarily attributable to Fabral, which had lower selling and general
expenses, as a percentage of net sales, than the Company prior to the Fabral
acquisition.
11
<PAGE>
DEPRECIATION AND AMORTIZATION. Depreciation and amortization, as a percentage
of net sales, decreased 0.2% for the quarter ended March 28, 1998, from 2.3% in
1997 to 2.1% in 1998. This decrease was primarily attributable to depreciation
and amortization arising due to divested subsidiaries, as well as an overall
improvement in depreciation expense, as a percentage of sales, as a result of
higher sales volume.
EARNINGS FROM OPERATIONS. For reasons stated above, earnings from operations in
the U.S. decreased to $1.3 million in the first quarter of 1998 from $2.0
million in the first quarter of 1997. Earnings from operations in Europe
decreased to $7.2 million for the three months ended March 28, 1998, from $7.5
million for the three months ended March 29, 1997.
INTEREST EXPENSE, NET. Net interest expense in the three months ended March 28,
1998, increased 7.9% from $5.6 million for the three months ended March 29,
1997, to $6.1 million for the three months ended March 28, 1998. This increase
was due primarily to additional interest as a result of debt incurred for the
Fabral acquisition.
OTHER EXPENSES, NET. Other expenses were not significant for the quarters ended
March 28, 1998 and March 29, 1997.
PROVISION FOR INCOME TAXES. The effective rate for the provision for income
taxes increased from 32.3% to 41.8% for the three months ended March 29, 1997,
and March 28, 1998, respectively. This increase was primarily due to
non-deductible goodwill arising from acquisitions made in 1997.
LIQUIDITY AND CAPITAL RESOURCES
LIQUIDITY. The Company's primary liquidity needs arise from debt service on
indebtedness incurred in connection with the Acquisition and the funding of
capital expenditures. As of March 28, 1998, the Company had outstanding
indebtedness for borrowed money of $249.9 million, $41.8 million of Preference
Shares and ordinary shareholders' equity of $3.3 million, representing increases
of $5.7 million, $1.4 million and a decrease of $158,000 from December 26, 1997,
respectively. Included in such indebtedness was approximately $114.9 million
under the Company's credit agreement, consisting of $62.8 million under the
Company's term loan and $52.1 million under the Company's revolving credit
facility. The undrawn amount of the revolving credit facility at March 28, 1998,
was approximately $47.9 million, which was available for working capital and
general corporate purposes, subject to borrowing base limitations. As of March
28, 1998, this amount was fully available. The Company's leveraged financial
position requires that a substantial portion of the Company's cash flow from
operations be used to pay interest on the Notes, principal and interest under
the Company's credit agreement and other indebtedness. Further, the Company's
leveraged position may impede its ability to obtain financing in the future for
working capital, capital expenditures and general corporate purposes. In
addition, the Company's leveraged position may make it more vulnerable to
economic downturns and may limit its ability to withstand competitive pressures.
The Company believes that cash generated from operations and, subject to
borrowing base limitations, borrowings under the Company's credit agreement will
be adequate to meet its needs for the foreseeable future, although no assurance
to that effect can be given.
Principal and interest payments under the credit agreement and interest payments
on the Notes represent significant liquidity requirements for the Company. With
respect to the $62.8 million of term loans, the Company must make scheduled
quarterly principal payments totaling $3.1 million over the remainder of 1998,
$7.8 million in 1999, $4.7 million in 2000, $7.0 million in 2001, $12.4 million
in 2002, $15.9 million in 2003, and $11.9 million in 2004. The term loans and
the revolving credit facility bear interest at floating rates.
The Company's primary source of liquidity is funds generated from operations,
which are supplemented by borrowings under the credit agreement. Operations used
cash of $3.5 million in the three months ended March 28, 1998, compared to $3.4
million used in the three months ended March 29, 1997.
12
<PAGE>
CAPITAL EXPENDITURES. The Company's capital expenditures were $3.0 million and
$867,000 in the three months ended March 28, 1998, and March 29, 1997,
respectively. Capital expenditures in 1998 include approximately $700,000 for
improvements to paintlines in Helena, Arkansas and Corby, England. The balance
of capital expenditures in both periods primarily relate to purchases and
upgrades of fabricating equipment, transportation and material moving equipment,
and information systems.
The Company has made and will continue to make capital expenditures to comply
with Environmental Laws. The Company estimates that its environmental capital
expenditures will be approximately $500,000 in 1998.
Management continues to evaluate the effect of the Year 2000 issue on the
Company. Ongoing assessment continues to support preliminary findings that the
total cost of addressing the issue is not expected to have a material effect on
the Company's business, financial condition or results of operations.
WORKING CAPITAL MANAGEMENT. Working capital was $100.9 million as of March 28,
1998. Excluding Fabral, working capital was $82.6 million as of March 28, 1998,
compared to $99.9 million as of March 29, 1997. The Company believes that
current levels of working capital represent a liquid source of funds available
for future cash flows. The Company believes that reductions in working capital
can be achieved upon completion of current information systems projects being
undertaken in some of the Company's subsidiaries. The Company believes these
systems will offer distinct advantages in monitoring credit, open receivables
and inventory levels, while enabling centralized ordering and inventory
management. However, there can be no assurance that working capital reductions
will be achieved.
NOTE REGARDING FORWARD LOOKING STATEMENTS: The Management's Discussion and
Analysis and other sections of this Form 10-Q may contain forward looking
statements that are based on current expectations, estimates and projections
about the industries in which the Company operates, management's beliefs and
assumptions made by management. Words such as "expects," "anticipates,"
"intends," "plans," "believes," "estimates," variations of such words and
similar expressions are intended to identify such forward looking statements.
These forward looking statements are based on a number of assumptions that could
ultimately prove inaccurate, and, therefore, there can be no assurance that they
will prove to be accurate. All such forward looking statements are subject to
the safe harbor created by the Private Securities Litigation Reform Act of 1995.
Important factors that could cause future financial performance to differ
materially and significantly from past results and from those expressed or
implied in this document include, without limitation, the risks of acquisition
of businesses (including limited knowledge of the businesses acquired and
misrepresentations by sellers), changes in business strategy or development
plans, the cyclical demand for the Company's products, the supply and/or price
of aluminum and other raw materials, currency exchange rate fluctuations,
environmental regulations, availability of financing, competition, reliance on
key management personnel, ability to manage growth, loss of customers, and a
variety of other factors. For further information on these and other risks, see
the "Risk Factors" section of Item 1. of the Company's Annual Report on Form
10-K for the year ended December 26, 1997, as well as the Company's other
filings with the Securities and Exchange Commission.
13
<PAGE>
PART II--OTHER INFORMATION
ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K
(a)(1) The following consolidated financial statements of Euramax International
plc and its subsidiaries are included in Part I, Item 1.
Condensed Consolidated Balance Sheets at December 26, 1997, and March 28,
1998
Condensed Consolidated Statements of Earnings for the quarters ended
March 29, 1997, and March 28, 1998
Condensed Consolidated Statements of Cash Flows for the quarters ended
March 29, 1997, and March 28, 1998
Notes to condensed consolidated financial statements
(b) The Company filed no reports on Form 8-K during the three months ended March
28, 1998.
(c) Exhibits:
<TABLE>
<C> <S>
2.1** Purchase Agreement dated as of April 28, 1997, among the Company and Genstar Capital
Corporation ("GCC"), Ontario Teachers' Pension Plan Board and the Management
Stockholders of Gentek Holdings, Inc. ("Holdings") as sellers GCC as sellers'
representative; Holdings and Gentek Building Products, Inc. ("GBPI"). (Incorporated by
reference to Exhibit 2.1 of the Registrant's Form 8-K filed August 1, 1997).
3.1* Articles of Association of Euramax International plc
3.2* Memorandum and Articles of Association of Euramax European Holdings plc
3.3* Articles of Association of Euramax International B.V.
3.4* Articles of Incorporation of Amerimax Holdings, Inc.
3.5* Bylaws of Amerimax Holdings, Inc.
4.3* Indenture, dated as of September 25, 1996, by and among Euramax International plc,
Euramax European Holdings plc, Euramax European Holdings B.V., Amerimax Holdings, Inc.
and the Chase Manhattan Bank, as Trustee.
4.4* Deposit Agreement, dated as of September 25, 1996, by and among Euramax International
plc, Euramax European Holdings plc, Euramax European Holdings B.V., and The Chase
Manhattan Bank, as book-entry depositary
4.5* Registration Rights Agreement, dated as of September 25, 1996, by and among Euramax
International plc, Euramax European Holdings plc, Euramax European Holdings B.V.,
Amerimax Holdings, Inc. and J.P. Morgan Securities Inc. and Goldman Sachs & Co.
4.6* Purchase Agreement dated as of September 18, 1996, by and among Euramax International
Ltd., Euramax European Holdings Ltd., Euramax European Holdings B.V., Amerimax
Holdings, Inc. and J.P. Morgan Securities Inc. and Goldman Sachs & Co.
21.1** Subsidiaries of Euramax International plc
27 Financial Data Schedule
</TABLE>
- ------------------------
* Incorporated by reference to the Exhibit with the same number in the
Registrant's Registration Statement on Form S-4 (333-05978) which became
effective on February 7, 1997.
** Incorporated by reference to the Exhibit with the same number in the
Regristrant's Annual Report on Form 10-K (333-05978) which was filed on
March 12, 1998.
14
<PAGE>
SIGNATURES
Pursuant to the requirements of Section 13 or 15(d) of the Securities and
Exchange Act of 1934, Euramax International plc has duly caused this report to
be signed on its behalf by the undersigned, thereunto duly authorized.
<TABLE>
<S> <C> <C>
EURAMAX INTERNATIONAL PLC
</TABLE>
SIGNATURE TITLE DATE
- ------------------------------ -------------------------- -------------------
/s/ J. DAVID SMITH
- ------------------------------ Chief Executive Officer May 12, 1998
J. David Smith and President
V.P. Finance and
/s/ R. SCOTT VANSANT Administration and
- ------------------------------ Secretary (Principal May 12, 1998
R. Scott Vansant Financial and Accounting
Officer)
15
<TABLE> <S> <C>
<PAGE>
<ARTICLE> 5
<CIK> 0001026743
<NAME> EURAMAX INTERNATIONAL PLC
<MULTIPLIER> 1,000
<S> <C>
<PERIOD-TYPE> 3-MOS
<FISCAL-YEAR-END> DEC-25-1998
<PERIOD-START> DEC-27-1997
<PERIOD-END> MAR-28-1998
<CASH> 13,649
<SECURITIES> 0
<RECEIVABLES> 95,394
<ALLOWANCES> 3,817
<INVENTORY> 85,977
<CURRENT-ASSETS> 193,939
<PP&E> 130,705
<DEPRECIATION> 17,643
<TOTAL-ASSETS> 409,756
<CURRENT-LIABILITIES> 93,017
<BONDS> 135,000
41,795
0
<COMMON> 1,000
<OTHER-SE> 2,336
<TOTAL-LIABILITY-AND-EQUITY> 409,756
<SALES> 143,089
<TOTAL-REVENUES> 143,089
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</TABLE>
