<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 SEPTEMBER 25, 1999
------------------
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 LIMITED
(Exact name of registrant as specified in its charter)
ENGLAND AND WALES 98-1066997
(State or other jurisdiction of (I.R.S. Employer Identification No.)
incorporation or organization)
5445 TRIANGLE PARKWAY, SUITE 350,
NORCROSS, GEORGIA 30092
(Address of principal executive offices) (Zip Code)
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 November 3, 1999, Registrant had outstanding 1,000,000
Ordinary Shares and 34,000,000 Preference Shares.
Page 1 of 28
Exhibit Index located on page 27
<PAGE>
PART I - FINANCIAL INFORMATION
ITEM 1. FINANCIAL STATEMENTS
EURAMAX INTERNATIONAL LIMITED AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF EARNINGS
(THOUSANDS OF U.S. DOLLARS)
(UNAUDITED)
<TABLE>
<CAPTION>
QUARTERS ENDED NINE MONTHS ENDED
---------------------------------- ----------------------------------
SEPTEMBER 25, SEPTEMBER 26, SEPTEMBER 25, SEPTEMBER 26,
1999 1998 1999 1998
---------------- ----------------- ---------------- -----------------
<S> <C> <C> <C> <C>
Net sales $ 152,722 $ 160,211 $ 441,308 $ 463,734
Costs and expenses:
Cost of goods sold 122,744 131,728 354,468 381,717
Selling and general 13,923 12,526 41,284 37,341
Depreciation and amortization 3,577 3,075 10,404 9,186
---------------- ----------------- ---------------- -----------------
Earnings from operations 12,478 12,882 35,152 35,490
Interest expense, net (5,687) (5,815) (16,318) (17,949)
Other income (expense), net 360 745 (442) 613
---------------- ----------------- ---------------- -----------------
Earnings before income taxes 7,151 7,812 18,392 18,154
Provision for income taxes 3,041 2,913 7,813 7,298
---------------- ----------------- ---------------- -----------------
Net earnings 4,110 4,899 10,579 10,856
Dividends on redeemable preference shares 1,738 1,514 5,038 4,390
---------------- ----------------- ---------------- -----------------
Net earnings available for ordinary shareholders $ 2,372 $ 3,385 $ 5,541 $ 6,466
================ ================= ================ =================
</TABLE>
The accompanying notes are an integral part of these condensed consolidated
financial statements.
2
<PAGE>
EURAMAX INTERNATIONAL LIMITED AND SUBSIDIARIES
CONDENSED CONSOLIDATED BALANCE SHEETS
(THOUSANDS OF U.S. DOLLARS)
(UNAUDITED)
<TABLE>
<CAPTION>
SEPTEMBER 25, DECEMBER 25,
1999 1998
------------------- -------------------
<S> <C> <C>
ASSETS
Current assets:
Cash and equivalents $ 13,872 $ 19,044
Accounts receivable, net 91,208 81,845
Inventories 78,629 74,735
Other current assets 6,034 4,585
------------------- -------------------
Total current assets 189,743 180,209
Property, plant and equipment, net 118,308 117,080
Goodwill, net 85,747 76,047
Deferred income taxes 8,603 8,588
Other assets 8,074 6,725
------------------- -------------------
$ 410,475 $ 388,649
=================== ===================
LIABILITIES AND SHAREHOLDERS' EQUITY
Current liabilities:
Cash overdrafts $ 3,467 $ 1,513
Accounts payable 58,492 51,862
Accrued expenses and other current liabilities 22,621 20,904
Income taxes payable 9,407 3,478
Accrued interest payable 8,293 4,712
Current maturities of long-term debt 6,266 9,182
------------------- -------------------
Total current liabilities 108,546 91,651
Long-term debt, less current maturities 211,590 208,496
Other liabilities 10,708 13,100
Deferred income taxes 15,978 19,398
------------------- -------------------
Total liabilities 346,822 332,645
------------------- -------------------
Redeemable preference shares 51,377 46,339
------------------- -------------------
Ordinary shareholders' equity:
Ordinary shares 1,000 1,000
Retained earnings 16,888 11,347
Accumulated other comprehensive loss (5,612) (2,682)
------------------- -------------------
Total ordinary shareholders' equity 12,276 9,665
------------------- -------------------
$ 410,475 $ 388,649
=================== ===================
</TABLE>
The accompanying notes are an integral part of these condensed consolidated
financial statements.
3
<PAGE>
EURAMAX INTERNATIONAL LIMITED AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(THOUSANDS OF U.S. DOLLARS)
(UNAUDITED)
<TABLE>
<CAPTION>
NINE MONTHS ENDED
------------------------------------------
SEPTEMBER 25, SEPTEMBER 26,
1999 1998
-------------------- -------------------
<S> <C> <C>
Net cash provided by operating activities $ 24,501 $ 23,165
-------------------- -------------------
Cash flows from investing activities:
Purchases of businesses (23,155) -
Proceeds from sales of assets 660 587
Capital expenditures (10,154) (9,451)
-------------------- --------------------
Net cash used in investing activities (32,649) (8,864)
-------------------- --------------------
Cash flows from financing activities:
Repayments of long-term debt (34,039) (33,371)
Proceeds from long-term debt 34,700 17,573
Proceeds from sale of currency swap - 7,580
Other 1,954 -
-------------------- -------------------
Net cash provided by (used in) financing activities 2,615 (8,218)
------------------- --------------------
Effect of exchange rate changes on cash 361 (2,717)
-------------------- --------------------
Net increase (decrease) in cash and equivalents (5,172) 3,366
Cash and equivalents at beginning of period 19,044 12,914
-------------------- --------------------
Cash and equivalents at end of period $ 13,872 $ 16,280
==================== ====================
Non-cash investing and financing activities:
Payables for non-compete agreement
associated with purchase of business $ 500 $ -
Dividends accrued on redeemable preference shares $ 5,038 $ 4,390
</TABLE>
The accompanying notes are an integral part of these condensed consolidated
financial statements.
4
<PAGE>
EURAMAX INTERNATIONAL LIMITED 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" or the "Group" refers to Euramax
International Limited, formerly Euramax International plc, ("Euramax") and
Subsidiaries, collectively. The Company was re-registered as a private
limited company in the United Kingdom on September 29, 1999, at which time
its name was changed to Euramax International Limited. The re-registration of
Euramax was completed to relieve certain administrative and regulatory
burdens in anticipation of a reorganization of the Company, more fully
described in the following paragraphs.
Euramax is a holding company organized by an investor group to acquire,
through its wholly owned subsidiaries, certain portions of the fabricated
products operations of Alumax Inc. ("Alumax"). The Acquisition was completed
September 25, 1996. Aluminum Company of America acquired Alumax in May of
1998. For detailed information regarding the organization and the
Acquisition, see Note 1 to the Consolidated Financial Statements of the
Company as of and for the year ended December 25, 1998, set forth in the
Company's Form 10-K.
At the time of the Acquisition, the investor group believed a future listing
of the Company on the London Stock Exchange or a future trade sale within the
United Kingdom seemed more likely than a future listing or trade sale within
the United States. Accordingly, the Group was structured with a United
Kingdom holding company. However, since the Acquisition, the investor group
and the board of directors of the Company believe that a future listing or
trade sale of the group in the United Kingdom has become less likely than a
listing or trade sale in the United States (although there are no immediate
plans for any such sale or listing, and any decision to sell the Company or
obtain a listing for its shares will only be made if and when the Company's
board of directors considers this to be in the best interests of the Company
and its shareholders). Additionally, the operation of the Group under a
United Kingdom holding company has resulted in certain financial and
administrative inefficiencies.
The principal purpose of the reorganization will be to put into place a new
holding company for the Group organized in the United States (the
"Reorganization"). The Reorganization will be accomplished in part by means
of a "scheme of arrangement" under section 425 of the United Kingdom
Companies Act 1985, a United Kingdom judicial proceeding requiring the
consent of the registered holders of the Company's Senior Subordinated Notes,
the lenders under the Company's Credit Agreement, and the holders of each
class of shares of Euramax. Subsequent to the Reorganization, the new United
States holding company, Euramax International, Inc., will become the
reporting company for the consolidated Group. In addition, Euramax
International, Inc. and Amerimax Fabricated Products, Inc. will guarantee the
Company's Senior Subordinated Notes. The Company believes that the
Reorganization will have no material adverse effect on the operations of the
Group or on the registered holders of the Senior Subordinated Notes. For
detailed information regarding the Senior Subordinated Notes and the Credit
Agreement, see Note 5 to the Consolidated Financial Statements of the Company
as of and for the year ended December 25, 1998, set forth in the Company's
Form 10-K. The Reorganization is expected to be complete by December 31, 1999.
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
5
<PAGE>
EURAMAX INTERNATIONAL LIMITED AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
(THOUSANDS OF U.S. DOLLARS)
(UNAUDITED)
1. BASIS OF PRESENTATION (CONTINUED):
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 25,
1998. Operating results for the period ended September 25, 1999, are not
necessarily indicative of future results that may be expected for the year
ending December 31, 1999.
On February 5, 1999, the Company's wholly owned subsidiary, Amerimax Home
Products, Inc., purchased certain assets related to the building materials
business of Unimet Manufacturing, Inc. ("Unimet") for approximately $3.3
million, including transaction expenses of approximately $135.4 thousand.
Approximately $2.8 million was paid in cash. The remaining purchase price of
$500.0 thousand, representing consideration for certain non-compete
agreements, will be paid in equal installments over the next five years.
On April 23, 1999, the Company's wholly owned subsidiary, Euramax Coated
Products Limited, purchased all of the issued and outstanding capital stock
of Color Clad plc ("Color Clad") for approximately $3.8 million, including
transaction expenses of approximately $171.5 thousand.
On June 3, 1999, the Company's wholly owned subsidiary, Amerimax Fabricated
Products, Inc., purchased all of the issued and outstanding capital stock of
Atlanta Metal Products, Inc. ("AMP") for approximately $16.5 million,
including estimated adjustments for changes in working capital required by
the purchase agreement and approximately $560.8 thousand of transaction
expenses.
The Color Clad and AMP acquisitions were financed through borrowings of
senior secured revolving loans. Such borrowings were available under the
Credit Agreement, which was amended April 6, 1999. In addition, the purchase
prices of the above acquisitions have been allocated to the acquired assets
and liabilities based upon their estimated fair market values at the
acquisition dates under the purchase method of accounting.
The pro forma operating results of the Company for the nine months ended
September 25, 1999, assuming the above noted companies were acquired on
January 1, 1999, would not have been materially different from the results
presented in the Condensed Consolidated Financial Statements.
Certain 1998 amounts have been reclassified to conform to current year
presentation.
2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES:
For information regarding significant accounting policies, see Note 2 to the
Consolidated Financial Statements of the Company for the year ended December
25, 1998, set forth in the Company's Annual Report on Form 10-K.
In June 1998, the Financial Accounting Standards Board ("FASB") issued SFAS
No. 133, ACCOUNTING FOR DERIVATIVE INSTRUMENTS AND HEDGING ACTIVITIES. SFAS
133 is effective for all fiscal quarters of all fiscal years beginning after
June 15, 2000 (December 31, 2001 for the Company). SFAS 133 requires that all
derivative instruments be recorded on the balance sheet at their fair value.
Changes in the fair value of derivatives are recorded each period in current
earnings or other comprehensive income, depending on whether a derivative is
designated as part of a hedge transaction and, if it is, the type of hedge
transaction. For fair-value hedge
6
<PAGE>
EURAMAX INTERNATIONAL LIMITED AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
(THOUSANDS OF U.S. DOLLARS)
(UNAUDITED)
2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED):
transactions in which the Company is hedging changes in the fair value of an
asset, liability, or firm commitment, changes in the fair value of the
derivative instrument will generally be offset in the income statement by
changes in the hedged item's fair value. For cash-flow hedge transactions, in
which the Company is hedging the variability of cash flows related to a
variable-rate asset, liability, or a forecasted transaction, changes in the
fair value of the derivative instrument will be reported in other
comprehensive income. The gains and losses on the derivative instrument that
are reported in other comprehensive income will be reclassified as earnings
in the periods in which earnings are impacted by the variability of the cash
flows of the hedged item. The ineffective portion of all hedges will be
recognized in current-period earnings. Management is currently reviewing the
provisions of SFAS No. 133 and does not believe that the Company's financial
statements will be materially impacted upon adoption.
3. INVENTORIES:
Inventories were comprised of:
<TABLE>
<CAPTION>
SEPTEMBER 25, DECEMBER 25,
1999 1998
------------------- ------------------
<S> <C> <C>
Raw materials $ 54,249 $ 53,247
Work in process 11,347 10,172
Finished products 13,033 11,316
------------------- ------------------
$ 78,629 $ 74,735
=================== ==================
</TABLE>
4. LONG-TERM OBLIGATIONS:
Effective April 6, 1999, the Company amended its Credit Agreement to, among
other items, allow for the Color Clad and AMP acquisitions, allow for the
prepayment of the Term Loans under the Dutch Guilder facility, and to
permanently waive the 1998 Excess Cash Flow Provision.
For detailed information regarding the Company's long-term obligations, see
Note 5 to the Consolidated Financial Statements of the Company for the year
ended December 25, 1998, set forth in the Company's Annual Report on Form
10-K.
5. COMMITMENTS AND CONTINGENCIES:
LITIGATION
The Company is subject to legal proceedings and claims that have arisen in
the ordinary course of business. Although occasional adverse decisions or
settlements may occur, it is the opinion of the Company's management, based
upon information available at this time, that the expected outcome of these
matters, individually or in the aggregate, would not reasonably be expected
to have a material adverse effect on the consolidated financial position,
results of operations or cash flows of the Company and its subsidiaries taken
as a whole.
7
<PAGE>
EURAMAX INTERNATIONAL LIMITED AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
(THOUSANDS OF U.S. DOLLARS)
(UNAUDITED)
5. COMMITMENTS AND CONTINGENCIES (CONTINUED):
ENVIRONMENTAL MATTERS
The Company's operations are subject to federal, state, local and European
environmental laws and regulations concerning the management of pollution and
hazardous substances.
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 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 Information
System ("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. COMPREHENSIVE INCOME:
For the nine months ended September 25, 1999 and September 26, 1998,
comprehensive income was approximately $7.6 million and $12.5 million,
respectively. Other comprehensive income refers to revenue, expenses, gains
and losses that are reflected in stockholders' equity but excluded from net
earnings. 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, for the
8
<PAGE>
EURAMAX INTERNATIONAL LIMITED AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
(THOUSANDS OF U.S. DOLLARS)
(UNAUDITED)
6. COMPREHENSIVE INCOME (CONTINUED):
nine months ended September 25, 1999 and September 26, 1998, was
approximately ($2.9) million and $1.7 million, respectively.
7. SEGMENT INFORMATION:
For detailed information regarding the Company's reportable segments, see
Note 13 to the Consolidated Financial Statements of the Company for the year
ended December 25, 1998, set forth in the Company's Annual Report on Form
10-K.
The table below presents information about reported segments and a
reconciliation of total segment sales to total consolidated sales and of
total segment EBITDA to total consolidated earnings before income taxes, for
the quarters and nine months ended September 25, 1999 and September 26, 1998.
<TABLE>
<CAPTION>
QUARTERS ENDED NINE MONTHS ENDED
---------------------------------------- ---------------------------------------
SEPTEMBER 25, 1999 SEPTEMBER 26, 1998 SEPTEMBER 25, 1999 SEPTEMBER 26, 1998
------------------- ------------------- ------------------- -------------------
<S> <C> <C> <C> <C>
SALES
European Roll Coating $ 31,768 $ 36,937 $ 103,136 $ 122,980
U.S. Fabrication 108,962 111,664 294,750 300,451
European Fabrication 12,637 13,217 45,399 48,963
------------------- ------------------- ------------------- ----------------
Total segment sales 153,367 161,818 443,285 472,394
Eliminations (645) (1,607) (1,977) (8,660)
------------------- ------------------- ------------------- ----------------
Consolidated net sales $ 152,722 $ 160,211 $ 441,308 $ 463,734
=================== =================== =================== ================
EBITDA
European Roll Coating $ 4,522 $ 4,702 $ 15,145 $ 17,511
U.S. Fabrication 11,353 11,358 27,950 25,076
European Fabrication 1,456 1,525 5,337 6,029
------------------- ------------------- ------------------- ----------------
Total EBITDA for reportable segments 17,331 17,585 48,432 48,616
Expenses that are not segment specific (916) (883) (3,318) (3,327)
Depreciation and amortization (3,577) (3,075) (10,404) (9,186)
Interest expense, net (5,687) (5,815) (16,318) (17,949)
------------------- ------------------- ------------------- ----------------
Consolidated earnings before income taxes $ 7,151 $ 7,812 $ 18,392 $ 18,154
=================== =================== =================== ================
</TABLE>
9
<PAGE>
EURAMAX INTERNATIONAL LIMITED AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
(THOUSANDS OF U.S. DOLLARS)
(UNAUDITED)
7. SEGMENT INFORMATION (CONTINUED):
The following table reflects revenues from external customers by groups of
similar products for the quarters and nine months ended September 25, 1999 and
September 26, 1998:
<TABLE>
<CAPTION>
QUARTERS ENDED NINE MONTHS ENDED
------------------------------- ---------------------------------
SEPTEMBER 25, SEPTEMBER 26, SEPTEMBER 25, SEPTEMBER 26,
CUSTOMERS/MARKETS PRIMARY PRODUCTS 1999 1998 1999 1998
- ------------------------- ---------------------------------- -------------- --------------- --------------- ----------------
<S> <C> <C> <C> <C> <C>
Original Equipment Painted aluminum sheet and coil;
Manufacturers ("OEMs") fabricated painted aluminum,
laminated and fiberglass
panels; RV doors, windows and
roofing; and composite
building panels $ 61,435 $ 64,432 $ 198,801 $ 212,855
Rural Contractors Steel and aluminum roofing and
siding 32,926 37,185 87,469 91,819
Home Centers Raincarrying systems, roofing
accessories, windows, doors,
and shower enclosures 26,924 26,569 65,883 67,241
Manufactured Housing Steel siding and trim components
10,903 14,149 35,144 43,591
Distributors Metal coils, raincarrying
systems and roofing accessories
8,761 5,785 20,882 17,622
Industrial and Standing seam panels and siding
Architectural and roofing accessories
Contractors 5,118 6,358 13,776 15,767
Home Vinyl replacement windows; metal
Improvement roofing and insulated roofing
Contractors panels; shower, patio and
entrance doors; and awnings
6,655 5,733 19,353 14,839
-------------- --------------- --------------- ----------------
$ 152,722 $ 160,211 $ 441,308 $ 463,734
============== =============== =============== ================
</TABLE>
10
<PAGE>
EURAMAX INTERNATIONAL LIMITED AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
(THOUSANDS OF U.S. DOLLARS)
(UNAUDITED)
8. SUPPLEMENTAL CONDENSED COMBINED FINANCIAL STATEMENTS:
On September 25, 1996, Euramax purchased the Company from Alumax. 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 The 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 and for the quarters and nine months ended
September 25, 1999 and September 26, 1998, reflect the financial position and
results of operations 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 SEPTEMBER 25, 1999
-----------------------------------------------------------------------------------------------
CO-OBLIGORS AND GUARANTOR SUBSIDIARIES
------------------------------------------------------
EURAMAX EURAMAX
EURAMAX AMERIMAX EUROPEAN EUROPEAN
INTERNATIONAL HOLDINGS, HOLDINGS HOLDINGS
LIMITED INC. PLC B.V. NON-GUARANTOR CONSOLIDATED
(PARENT) (GUARANTOR) (CO-OBLIGOR) (CO-OBLIGOR) SUBSIDIARIES ELIMINATIONS TOTALS
------------ ------------ ------------ ------------- -------------- ------------ -------------
<S> <C> <C> <C> <C> <C> <C> <C>
Net Sales $ - $ - $ - $ - $ 152,722 $ - $ 152,722
Cost and expenses:
Cost of goods sold - - - - 122,744 - 122,744
Selling and general 726 - - - 13,197 - 13,923
Depreciation and amortization - - - - 3,577 - 3,577
------------ ------------ ------------ ------------- -------------- ------------ -------------
Earnings (loss) from
operations (726) - - - 13,204 - 12,478
Equity in earnings (loss) of
subsidiaries 4,611 3,339 (836) 1,816 - (8,930) -
Interest expense, net - (457) (158) (124) (4,948) - (5,687)
Other income (expense), net - - 982 59 (681) - 360
------------ ------------ ------------ ------------- -------------- ------------ -------------
Earnings (loss) before income
taxes 3,885 2,882 (12) 1,751 7,575 (8,930) 7,151
Provision (benefit) for income taxes (225) (178) 263 (13) 3,194 - 3,041
------------ ------------ ------------ ------------- -------------- ------------ -------------
Net earnings (loss) 4,110 3,060 (275) 1,764 4,381 (8,930) 4,110
Dividends on redeemable preference
shares 1,738 - - - - - 1,738
------------ ------------ ------------ ------------- -------------- ------------ -------------
Net earnings (loss) available for
ordinary shareholders $ 2,372 $ 3,060 $ (275) $ 1,764 $ 4,381 $ (8,930) $ 2,372
============ ============ =========== ============= ============== ============ =============
</TABLE>
11
<PAGE>
EURAMAX INTERNATIONAL LIMITED AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
(THOUSANDS OF U.S. DOLLARS)
(UNAUDITED)
8. SUPPLEMENTAL CONDENSED COMBINED FINANCIAL STATEMENTS (CONTINUED):
<TABLE>
<CAPTION>
QUARTER ENDED SEPTEMBER 26, 1998
-------------------------------------------------------------------------------------------------
CO-OBLIGORS AND GUARANTOR SUBSIDIARIES
------------------------------------------------------
EURAMAX AMERIMAX EURAMAX EURAMAX
INTERNATIONAL HOLDINGS, EUROPEAN EUROPEAN
LIMITED INC. HOLDINGS PLC HOLDINGS B.V. NON-GUARANTOR CONSOLIDATED
(PARENT) (GUARANTOR) (CO-OBLIGOR) (CO-OBLIGOR) SUBSIDIARIES ELIMINATIONS TOTALS
------------ ------------- ------------ -------------- -------------- ------------- -------------
<S> <C> <C> <C> <C> <C> <C> <C>
Net Sales $ - $ - $ - $ - $ 160,211 $ - $ 160,211
Cost and expenses:
Cost of goods sold - - - - 131,728 - 131,728
Selling and general - - - - 12,526 - 12,526
Depreciation and amortization - - - - 3,075 - 3,075
------------ ------------- ------------ -------------- -------------- ------------- -------------
Earnings from operations - - - - 12,882 - 12,882
Equity in earnings (loss) of
subsidiaries 4,899 3,759 (490) (147) - (8,021) -
Interest expense, net - (456) (199) (145) (5,015) - (5,815)
Other income (expense), net - - 622 2,891 (2,768) - 745
------------ ------------- ------------ -------------- -------------- ------------- -------------
Earnings (loss) before
income taxes 4,899 3,303 (67) 2,599 5,099 (8,021) 7,812
Provision (benefit) for income
taxes - (212) 71 1,077 1,977 - 2,913
------------ ------------- ------------ -------------- -------------- ------------- -------------
Net earnings (loss) 4,899 3,515 (138) 1,522 3,122 (8,021) 4,899
Dividends on redeemable preference
shares 1,514 - - - - - 1,514
------------ ------------- ------------ -------------- -------------- ------------- -------------
Net earnings (loss) available for
ordinary shareholders $ 3,385 $ 3,515 $ (138) $ 1,522 $ 3,122 $ (8,021) $ 3,385
============ ============= ============ ============== ============== ============= ============
</TABLE>
12
<PAGE>
EURAMAX INTERNATIONAL LIMITED AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
(THOUSANDS OF U.S. DOLLARS)
(UNAUDITED)
8. SUPPLEMENTAL CONDENSED COMBINED FINANCIAL STATEMENTS (CONTINUED):
<TABLE>
<CAPTION>
NINE MONTHS ENDED SEPTEMBER 25, 1999
-------------------------------------------------------------------------------------------------
CO-OBLIGORS AND GUARANTOR SUBSIDIARIES
------------------------------------------------------
EURAMAX AMERIMAX EURAMAX EURAMAX
INTERNATIONAL HOLDINGS, EUROPEAN EUROPEAN
LIMITED INC. HOLDINGS PLC HOLDINGS B.V. NON-GUARANTOR CONSOLIDATED
(PARENT) (GUARANTOR) (CO-OBLIGOR) (CO-OBLIGOR) SUBSIDIARIES ELIMINATIONS TOTALS
------------ ------------- ------------ -------------- -------------- ------------- -------------
<S> <C> <C> <C> <C> <C> <C> <C>
Net Sales $ - $ - $ - $ - $ 441,308 $ - $ 441,308
Cost and expenses:
Cost of goods sold - - - - 354,468 - 354,468
Selling and general 2,148 - - 2 39,134 - 41,284
Depreciation and amortization - - - - 10,404 - 10,404
------------ ------------- ------------ -------------- -------------- ------------- -------------
Earnings (loss) from
operations (2,148) (2) 37,302 - 35,152
Equity in earnings of subsidiaries 12,063 7,478 827 7,626 - (27,994) -
Interest expense, net - (1,369) (25) (257) (14,667) - (16,318)
Other income (expense), net (3) - (498) (4,093) 4,152 - (442)
------------ ------------- ------------ -------------- --------------- ------------- ------------
Earnings before income taxes 9,912 6,109 304 3,274 26,787 (27,994) 18,392
Provision (benefit) for income
taxes (667) (534) (152) (1,495) 10,661 - 7,813
------------ ------------- ------------ -------------- --------------- ------------- ------------
Net earnings 10,579 6,643 456 4,769 16,126 (27,994) 10,579
Dividends on redeemable preference
shares 5,038 - - - - - 5,038
------------ ------------- ------------ --------------- ------------- ------------- -------------
Net earnings available for
ordinary shareholders $ 5,541 $ 6,643 $ 456 $ 4,769 $ 16,126 $ (27,994) $ 5,541
============ ============= ============ ============== =============== ============= ============
</TABLE>
13
<PAGE>
EURAMAX INTERNATIONAL LIMITED AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
(THOUSANDS OF U.S. DOLLARS)
(UNAUDITED)
8. SUPPLEMENTAL CONDENSED COMBINED FINANCIAL STATEMENTS (CONTINUED):
<TABLE>
<CAPTION>
NINE MONTHS ENDED SEPTEMBER 26, 1998
-------------------------------------------------------------------------------------------------
CO-OBLIGORS AND GUARANTOR SUBSIDIARIES
------------------------------------------------------
EURAMAX AMERIMAX EURAMAX EURAMAX
INTERNATIONAL HOLDINGS, EUROPEAN EUROPEAN
LIMITED INC. HOLDINGS PLC HOLDINGS B.V. NON-GUARANTOR CONSOLIDATED
(PARENT) (GUARANTOR) (CO-OBLIGOR) (CO-OBLIGOR) SUBSIDIARIES ELIMINATIONS TOTALS
------------ ------------ ------------ -------------- -------------- ------------- -------------
<S> <C> <C> <C> <C> <C> <C> <C>
Net Sales $ - $ - $ - $ - $ 463,734 $ - $ 463,734
Cost and expenses:
Cost of goods sold - - - - 381,717 - 381,717
Selling and general 128 - - - 37,213 - 37,341
Depreciation and amortization - - - - 9,186 - 9,186
------------ ------------ ----------- ------------- -------------- ------------ ------------
Earnings (loss) from
operations (128) - - - 35,618 - 35,490
Equity in earnings of subsidiaries 11,023 4,216 2,013 4,656 - (21,908) -
Interest expense, net - (1,369) (628) (374) (15,578) - (17,949)
Other income (expense), net - - 349 2,138 (1,874) - 613
------------ ------------ ----------- ------------- -------------- ------------ ------------
Earnings before income taxes 10,895 2,847 1,734 6,420 18,166 (21,908) 18,154
Provision (benefit) for income
taxes 39 (619) (91) 688 7,281 - 7,298
------------ ------------ ----------- ------------- -------------- ------------ ------------
Net earnings 10,856 3,466 1,825 5,732 10,885 (21,908) 10,856
Dividends on redeemable preference
shares 4,390 - - - - - 4,390
------------ ------------ ----------- ------------- -------------- ------------ ------------
Net earnings available for
ordinary shareholders $ 6,466 $ 3,466 $ 1,825 $ 5,732 $ 10,885 $(21,908) $ 6,466
============ ============ =========== ============= ============== ============= ============
</TABLE>
14
<PAGE>
EURAMAX INTERNATIONAL LIMITED AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
(THOUSANDS OF U.S. DOLLARS)
(UNAUDITED)
8. SUPPLEMENTAL CONDENSED COMBINED FINANCIAL STATEMENTS (CONTINUED):
<TABLE>
<CAPTION>
SEPTEMBER 25, 1999
-------------------------------------------------------------------------------------------------
CO-OBLIGORS AND GUARANTOR SUBSIDIARIES
------------------------------------------------------
EURAMAX AMERIMAX EURAMAX EURAMAX
INTERNATIONAL HOLDINGS, EUROPEAN EUROPEAN
LIMITED INC. HOLDINGS PLC HOLDINGS B.V. NON-GUARANTOR CONSOLIDATED
(PARENT) (GUARANTOR) (CO-OBLIGOR) (CO-OBLIGOR) SUBSIDIARIES ELIMINATIONS TOTALS
------------ ------------ ------------ -------------- -------------- ------------- -------------
<S> <C> <C> <C> <C> <C> <C> <C>
ASSETS
Current assets:
Cash and equivalents $ - $ - $ - $ - $ 13,872 $ - $ 13,872
Accounts receivable, net 53 - - - 91,155 - 91,208
Inventories - - - - 78,629 - 78,629
Other current assets - - - - 6,034 - 6,034
------------ ----------- ------------- ------------- ----------- ------------ ------------
Total current assets 53 - - - 189,690 - 189,743
Property, plant and equipment, net - - - - 118,308 - 118,308
Amounts due from parent/affiliates 74,773 86,225 45,834 43,594 45,826 (296,252) -
Goodwill, net - - - - 85,747 - 85,747
Investment in consolidated
subsidiaries 67,177 40,037 1,240 26,108 - (134,562) -
Deferred income taxes - - - - 8,603 - 8,603
Other assets 1,656 - 670 707 5,041 - 8,074
------------ ----------- ------------- ------------- ----------- ------------ ------------
$ 143,659 $ 126,262 $ 47,744 $ 70,409 $ 453,215 $ (430,814) $ 410,475
============ =========== ============= ============= =========== ============= ===========
LIABILITIES AND SHAREHOLDERS' EQUITY
Current liabilities:
Cash overdrafts $ - $ - $ - $ - $ 3,467 $ - $ 3,467
Accounts payable - - - - 58,492 - 58,492
Accrued expenses and other
current liabilities 29 - - - 22,592 - 22,621
Income taxes payable (1,554) (2,622) (1,335) 4,413 10,505 - 9,407
Accrued interest payable - 3,971 1,795 1,737 790 - 8,293
Current maturities of
long-term debt - - - - 6,266 - 6,266
------------ ----------- ------------- ------------- ----------- ------------ -----------
Total current liabilities (1,525) 1,349 460 6,150 102,112 - 108,546
Long-term debt, less current
maturities 70,605 - 27,179 37,216 76,590 - 211,590
Amounts due to parent/affiliates 10,926 93,407 10,684 2,743 178,492 (296,252) -
Other liabilities - - - - 10,708 - 10,708
Deferred income taxes - - - - 15,978 - 15,978
------------ ----------- ------------- ------------- ----------- ------------ -----------
Total liabilities 80,006 94,756 38,323 46,109 383,880 (296,252) 346,822
------------ ----------- ------------- ------------- ----------- ------------ -----------
Redeemable preference shares 51,377 - - - - - 51,377
------------ ----------- ------------- ------------- ----------- ------------ -----------
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) 16,888 14,767 4,475 17,731 (20,349) (16,624) 16,888
Accumulated other
comprehensive loss (5,612) (261) (2,054) (2,531) (4,744) 9,590 (5,612)
------------ ----------- ------------- ------------- ----------- ------------ -----------
Total ordinary
shareholders' equity 12,276 31,506 9,421 24,300 69,335 (134,562) 12,276
------------ ----------- ------------- ------------- ----------- ------------ -----------
$ 143,659 $ 126,262 $ 47,744 $ 70,409 $ 453,215 $ (430,814) $ 410,475
============ =========== ============= ============= =========== ============ ===========
</TABLE>
15
<PAGE>
EURAMAX INTERNATIONAL LIMITED AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
(THOUSANDS OF U.S. DOLLARS)
(UNAUDITED)
8. SUPPLEMENTAL CONDENSED COMBINED FINANCIAL STATEMENTS (CONTINUED):
<TABLE>
<CAPTION>
DECEMBER 25, 1998
-------------------------------------------------------------------------------------------------
CO-OBLIGORS AND GUARANTOR SUBSIDIARIES
------------------------------------------------------
EURAMAX AMERIMAX EURAMAX EURAMAX
INTERNATIONAL HOLDINGS, EUROPEAN EUROPEAN
LIMITED INC. HOLDINGS PLC HOLDINGS B.V. NON-GUARANTOR CONSOLIDATED
(PARENT) (GUARANTOR) (CO-OBLIGOR) (CO-OBLIGOR) SUBSIDIARIES ELIMINATIONS TOTALS
------------ ------------ ------------ -------------- -------------- ------------- -------------
<S> <C> <C> <C> <C> <C> <C> <C>
ASSETS
Current assets:
Cash and equivalents $ - $ - $ - $ - $ 19,044 $ - $ 19,044
Accounts receivable, net - - - - 81,845 - 81,845
Inventories - - - - 74,735 - 74,735
Other current assets - - - - 4,585 - 4,585
------------ ----------- ----------- ------------ ----------- ------------ ------------
Total current assets - - - - 180,209 - 180,209
Property, plant and equipment, net - - - - 117,080 117,080
Amounts due from parent/affiliates 73,197 72,188 43,622 46,447 93,168 (328,622) -
Goodwill, net - - - - 76,047 - 76,047
Investment in consolidated
subsidiaries 57,951 32,559 357 20,846 - (111,713) -
Deferred income taxes - - - - 8,588 8,588
Other assets 1,834 - 756 871 3,264 - 6,725
------------ ----------- ----------- ------------ ----------- ------------ ------------
$ 132,982 $ 104,747 $ 44,735 $ 68,164 $ 478,356 $ (440,335) $ 388,649
============ =========== =========== ============ =========== ============ ============
LIABILITIES AND SHAREHOLDERS' EQUITY
Current liabilities:
Cash overdrafts $ - $ - $ - $ - $ 1,513 $ - $ 1,513
Accounts payable - - - - 51,862 - 51,862
Accrued expenses and other
current liabilities 305 - - - 20,599 - 20,904
Income taxes payable (882) (2,088) (1,207) 1,095 6,560 - 3,478
Accrued interest payable - 1,986 913 967 846 - 4,712
Current maturities of long-
term debt - - - - 9,182 - 9,182
------------ ----------- ----------- ------------ ----------- ------------ ------------
Total current liabilities (577) (102) (294) 2,062 90,562 - 91,651
Long-term debt, less current
maturities 70,605 - 27,179 37,216 73,496 - 208,496
Amounts due to parent/affiliates 6,950 79,987 8,792 7,019 225,874 (328,622) -
Other liabilities - - - - 13,100 - 13,100
Deferred income taxes - - - - 19,398 - 19,398
------------ ----------- ----------- ------------ ----------- ------------ ------------
Total liabilities 76,978 79,885 35,677 46,297 422,430 (328,622) 332,645
------------ ----------- ----------- ------------ ----------- ------------ ------------
Redeemable preference shares 46,339 - - - - - 46,339
------------ ----------- ----------- ------------ ----------- ------------ ------------
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) 11,347 8,124 4,019 12,962 (36,475) 11,370 11,347
Accumulated other
comprehensive loss (2,682) (262) (1,961) (195) (2,027) 4,445 (2,682)
------------ ----------- ----------- ------------ ----------- ------------ ------------
Total ordinary
shareholders' equity 9,665 24,862 9,058 21,867 55,926 (111,713) 9,665
------------ ----------- ----------- ------------ ----------- ------------ ------------
$ 132,982 $ 104,747 $ 44,735 $ 68,164 $ 478,356 $ (440,335) $ 388,649
============ =========== =========== ============ =========== ============ ============
</TABLE>
16
<PAGE>
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
RESULTS OF OPERATIONS
The following discussion should be read in conjunction with the Condensed
Consolidated Financial Statements included elsewhere in this document, as
well as the year-end consolidated financial statements and management's
discussion and analysis included in the Company's Annual Report on Form 10-K
for the year ended December 25, 1998.
BUSINESS STRATEGY
The Company's strategy is to expand its leadership position as a producer of
aluminum and steel products and to further diversify product offerings,
customers and geographic regions in which it operates. Under this strategy,
the Company is pursuing organic growth through product development, new
territories and new customers. Also under this strategy, during the nine
months ended September 25, 1999, the Company successfully completed three
acquisitions. On February 5, 1999, the Company acquired certain assets
related to the building materials business of Unimet Manufacturing, Inc.
("Unimet"). The acquisition was completed to expand the Company's customer
base for metal raincarrying systems sold to the home center, buying
cooperative and building distributor markets in the United States. In
addition, on April 23, 1999, the Company completed an acquisition of all of
the outstanding shares of Color Clad plc, a U.K. corporation ("Color Clad").
Color Clad is a producer of aluminum exterior walls and roofs sold primarily
to U.K. producers of recreational vehicles (caravans). The acquisition
supplements the Company's leading position as a supplier of such products in
Western Europe. Further, on June 3, 1999, the Company acquired all of the
outstanding shares of Atlanta Metal Products, Inc. ("AMP"). AMP is a producer
and distributor of custom and standard metal raincarrying, roofing, and
accessory products for the building and construction market, primarily in the
Southeast. The acquisition has enhanced the Company's position as a supplier
of metal raincarrying and roofing products to the distributor market in the
United States. The Company expects to continue identifying and acquiring
businesses and assets as part of executing its strategy.
RESULTS OF OPERATIONS
QUARTER ENDED SEPTEMBER 25, 1999 AS COMPARED TO QUARTER ENDED
SEPTEMBER 26, 1998
The following table sets forth the Company's Statements of Earnings data
expressed as a percentage of net sales:
<TABLE>
<CAPTION>
QUARTERS ENDED
--------------------------------------------
SEPTEMBER 25, SEPTEMBER 26,
1999 1998
--------------------------------------------
<S> <C> <C>
STATEMENTS OF EARNINGS DATA:
Net sales 100.0% 100.0%
Costs and expenses:
Cost of goods sold 80.4 82.2
Selling and general 9.1 7.8
Depreciation and amortization 2.3 1.9
--------------------------------------------
Earnings from operations 8.2 8.1
Interest expense, net (3.7) (3.6)
Other income, net 0.2 0.5
--------------------------------------------
Earnings before income taxes 4.7 5.0
Provision for income taxes 2.0 1.8
--------------------------------------------
Net earnings 2.7% 3.2%
============================================
</TABLE>
17
<PAGE>
The following table sets forth the Net Sales and Earnings from Operations data
for the United States and Europe for the quarters ended September 25, 1999 and
September 26, 1998:
<TABLE>
<CAPTION>
Net Sales Earnings from Operations
------------------------------------------------ --------------------------------------------
September 25, September 26, Increase/ September 25, September 26, Increase/
IN THOUSANDS 1999 1998 (decrease) 1999 1998 (decrease)
--------------- --------------- ------------ ------------- -------------- ------------
<S> <C> <C> <C> <C> <C> <C>
United States $ 108,961 $ 111,663 (2.4)% $ 8,857 $ 8,716 1.6%
Europe 43,761 48,548 (9.9)% 3,621 4,166 (13.1)%
--------------- --------------- ------------- --------------
Totals $ 152,722 $ 160,211 (4.7)% $ 12,478 $ 12,882 (3.1)%
=============== =============== ============= ==============
</TABLE>
NET SALES. Net sales in the United States for the third quarter of 1999 were
slightly lower when compared to the same period of 1998, reflecting a
decrease of 2.4%. Sales in the United States benefited primarily from
increases in sales to the recreational vehicle ("RV"), distributor and home
improvement contractor markets, while sales continued to lag in the
manufactured housing, rural contractor and industrial and architectural
contractor markets. The increase in sales to the RV market coincides with
what appears to be a record year for shipments of end-use products by the RV
industry in the United States. In recent years the RV industry has thrived in
an environment of low interest rates, low fuel prices and favorable
demographics. Changes to one or more of these factors may preclude shipments
from continuing at the current pace. The favorable increase in sales to the
distributor market is attributable, in part, to the acquisition of AMP (see
Note 1 to the Condensed Consolidated Financial Statements). The home
improvement contractor market also experienced an increase in sales aided by
an increase in the sale of vinyl windows. Lower sales to the manufactured
housing market contributed to the decrease in sales and were primarily the
result of lower realized sales prices caused by competition for a declining
number of manufactured homes produced with steel siding. The Company
continues to explore opportunities to increase its offering of substitute
materials to this market. The decline in sales is also attributable to lower
sales to the rural contractor market, which is primarily due to a decline in
sales to the confinement market resulting from increased federal and state
legislation effecting the swine confinement market. Further, sales to the
industrial and architectural contractor markets lagged primarily due to a
nationwide downturn of non-residential construction and lower realized
selling prices resulting from competition for the reduced number of available
projects. The Company's United States subsidiaries are included in the U.S.
Fabrication Segment (see Note 7 to the Condensed Consolidated Financial
Statements).
Net sales in Europe for the quarter ended September 25, 1999, were
approximately 9.9% lower than the quarter ended September 26, 1998.
Approximately 48% of the decline reflects the weakening of the Pound
Sterling, Dutch Guilder and French Franc relative to the U.S. Dollar. The
balance of the decline relates to a softer market for industrial consumers of
aluminum and steel coil in the United Kingdom and continental Europe.
Further, the strength of the Pound Sterling relative to other foreign
currencies has restricted the Company's ability to competitively export, to
continental Europe, products produced in the United Kingdom. Offsetting the
decline in sales to a variety of industrial consumers, third quarter 1999
sales to the RV (caravan) sector of the OEM market in both The Netherlands
and the United Kingdom increased. These factors resulted in a net decrease in
sales in the European Roll Coating Segment (see Note 7 to the Condensed
Consolidated Financial Statements).
COST OF GOODS SOLD. Cost of goods sold, as a percentage of net sales,
decreased 1.8% for the quarter ended September 25, 1999, to 80.4% in 1999
from 82.2% in 1998. This decrease is primarily attributable to a decrease in
the average raw material aluminum prices as compared to the prior year.
SELLING AND GENERAL. Selling and general expenses, as a percentage of net
sales, increased 1.3% for the
18
<PAGE>
quarter ended September 25, 1999, to 9.1% in 1999 from 7.8% in 1998. This
increase is primarily attributable to information technology expenses,
product development, salary increases and professional fees related to the
Reorganization. See Note 1 to the Condensed Consolidated Financial Statements
for information regarding the Reorganization.
DEPRECIATION AND AMORTIZATION. Depreciation and amortization, as a percentage
of net sales, increased 0.4% for the quarter ended September 25, 1999, to
2.3% in 1999 from 1.9% in 1998, primarily related to 1999 acquisitions.
EARNINGS FROM OPERATIONS. Despite decreases in net sales for the reasons
stated above, the Company has maintained stable margins on a consolidated
basis. Earnings from operations, as a percentage of net sales, were 8.2% of
net sales for the quarter ended September 25, 1999, and 8.1% of sales for the
quarter ended September 26, 1998.
INTEREST EXPENSE, NET. Net interest expense decreased to $5.7 million for the
quarter ended September 25, 1999, from $5.8 million for the quarter ended
September 26, 1998, primarily due to lower average debt balances.
OTHER EXPENSES, NET. Other expenses were not significant for the quarters
ended September 25, 1999 and September 26, 1998.
PROVISION FOR INCOME TAXES. The income tax provision for the period is based
on the effective tax rate expected to be applicable for the full year. The
effective rate for the provision for income taxes increased to 42.5% from
37.3% for the quarters ended September 25, 1999 and September 26, 1998,
respectively. The increase in the effective rate is primarily due to higher
forecasted U.S. earnings, which are taxed at a slightly higher rate than the
European earnings, and non-deductible goodwill amortization resulting from
acquisitions.
NINE MONTHS ENDED SEPTEMBER 25, 1999 AS COMPARED TO NINE MONTHS ENDED
SEPTEMBER 26, 1998
The following table sets forth the Company's Statements of Earnings data
expressed as a percentage of net sales:
<TABLE>
<CAPTION>
NINE MONTHS ENDED
--------------------------------------------
SEPTEMBER 25, SEPTEMBER 26,
1999 1998
--------------------------------------------
<S> <C> <C>
STATEMENTS OF EARNINGS DATA:
Net sales 100.0% 100.0%
Costs and expenses:
Cost of goods sold 80.3 82.3
Selling and general 9.3 8.1
Depreciation and amortization 2.4 2.0
--------------------------------------------
Earnings from operations 8.0 7.6
Interest expense, net (3.7) (3.9)
Other income (expense), net (.1) 0.1
--------------------------------------------
Earnings before income taxes 4.2 3.8
Provision for income taxes 1.8 1.6
--------------------------------------------
Net earnings 2.4% 2.2%
============================================
</TABLE>
19
<PAGE>
The following table sets forth the Net Sales and Earnings from Operations data
for the United States and Europe for the nine months ended September 25, 1999
and September 26, 1998:
<TABLE>
<CAPTION>
Net Sales Earnings from Operations
--------------------------------------------- ---------------------------------------------
September 25, September 26, Increase/ September 25, September 26, Increase/
IN THOUSANDS 1999 1998 (decrease) 1999 1998 (decrease)
---------------- ------------- ------------ ------------- ------------- ------------
<S> <C> <C> <C> <C> <C> <C>
United States $ 294,749 $ 300,449 (1.9)% $ 21,656 $ 17,375 24.6%
Europe 146,559 163,285 (10.2)% 13,496 18,115 (25.5)%
------------- ----------- ----------- -----------
Totals $ 441,308 $ 463,734 (4.8)% $ 35,152 $ 35,490 (1.0)%
============== ============ ============ ============
</TABLE>
NET SALES. Net sales in the United States, for the nine months ended
September 25, 1999, reflect approximately $6.0 million in sales attributable
to the acquisitions of Unimet and AMP. For the nine months ended September
25, 1999, as compared to the nine months ended September 25, 1998, sales in
the Unites States also benefited primarily from increases in sales to
distributors and home improvement contractors and, also, from increases in
sales to RV manufacturers. Sales decreased to manufactured housing customers,
rural contractors and industrial and architectural contractors, offsetting
sales increases and resulting in a net decline in United States sales of
approximately 1.9%. See "Quarter Ended September 25, 1999 as Compared to
Quarter Ended September 26, 1999 Net Sales" for further discussion of the
factors affecting sales in the United States, as the factors also apply to
net sales for the nine months ended September 25, 1999, as compared to the
nine months ended September 26, 1998.
Sales in Europe for the nine months ended September 25, 1999, as compared to
the prior year, declined approximately 10.2%. Approximately 16% of this
decline reflects the weakening of the Pound Sterling, Dutch Guilder and
French Franc relative to the U.S. Dollar. The balance of the decrease in
sales in Europe is primarily attributable to a softer market for industrial
consumers of aluminum and steel coil in the United Kingdom and continental
Europe and export pricing pressures in the United Kingdom. In addition, net
sales in both the United States and Europe declined due to lower average
aluminum selling prices in 1999 as compared to 1998. The average price of
aluminum on the London Metal Exchange for the nine months ended September 25,
1999, was approximately 4.9% lower than the average for the nine months ended
September 25, 1998. Sales of aluminum-based products were approximately 53.4%
of net sales for the nine months ended September 25, 1999. Offsetting the
decline in sales, sales to the RV (caravan) sector of the OEM market
increased for the nine months ended September 25, 1999, compared to the nine
months ended September 26, 1998.
COST OF GOODS SOLD. Cost of goods sold, as a percentage of net sales,
decreased 2.0% for the nine months ended September 25, 1999, to 80.3% in 1999
from 82.3% in 1998. This decrease is primarily attributable to operational
improvements realized at the Helena, Arkansas paintline facility, and a
decrease in the average raw material aluminum prices.
SELLING AND GENERAL. Selling and general expenses, as a percentage of net
sales, increased 1.2% for the nine months ended September 25, 1999, to 9.3%
in 1999 from 8.1% in 1998. This increase is primarily attributable to lower
net sales, information technology expenses, product development, salary
increases and professional fees related to the Reorganization. See Note 1 to
the Condensed Consolidated Financial Statements for information regarding the
Reorganization.
DEPRECIATION AND AMORTIZATION. Depreciation and amortization, as a percentage
of net sales, increased 0.4% for the nine months ended September 25, 1999, to
2.4% in 1999 from 2.0% in 1998, primarily related to the 1999 acquisitions.
20
<PAGE>
EARNINGS FROM OPERATIONS. Despite decreases in net sales for the reasons
stated above, the Company increased its earnings from operations, as
percentage of net sales. As a percentage of net sales, earnings from
operations increased to 8.0% for the nine months ended September 25, 1999,
from 7.6% for the nine months ended September 26, 1998. The Company's
geographic and market diversity, the diversity of its product offerings, and
productivity improvements, have resulted in stable margins on a consolidated
basis in a period of reduced demand in continental Europe and export pricing
pressures in the United Kingdom. For the nine months ended September 25,
1999, as compared to the prior year, the improvement in earnings in the
United States is primarily due to operational and market improvements, while
the decline in European earnings is primarily attributable to softer European
markets.
INTEREST EXPENSE, NET. Net interest expense decreased to $16.3 million for
the nine months ended September 25, 1999, from $17.9 million for the nine
months ended September 26, 1998, primarily due to lower average debt balances.
OTHER EXPENSES, NET. Other expenses were not significant for the nine months
ended September 25, 1999 and September 26, 1998.
PROVISION FOR INCOME TAXES. The income tax provision for the period is based
on the effective tax rate expected to be applicable for the full year. The
effective rate for the provision for income taxes was 42.5% for the nine
months ended September 25, 1999, and 40.2% for the nine months ended
September 26, 1998. The increase in the effective rate is primarily due to
higher forecasted United States earnings, which are taxed at a slightly
higher rate than the European earnings, and non-deductible goodwill resulting
from acquisitions.
LIQUIDITY AND CAPITAL RESOURCES
LIQUIDITY. The Company's primary liquidity needs arise from debt service
incurred in connection with acquisitions and the funding of capital
expenditures. As of September 25, 1999, the Company had outstanding
indebtedness of $217.9 million, as compared to $217.7 as of December 25,
1998. Included in such indebtedness was approximately $82.9 million under the
Company's Credit Agreement, consisting of $31.9 million under the Company's
Term Loans and $51.0 million under the Company's Revolving Credit Facility.
The undrawn amount of the Revolving Credit Facility at September 25, 1999,
was $49.0 million, which was available for working capital and general
corporate purposes, subject to borrowing base limitations. As of September
25, 1999, this amount was fully available. Although the 1999 acquisitions
were financed with borrowings under the Company's Credit Agreement, the
increase in indebtedness was offset by repayments of debt resulting from
reductions in working capital and cash flow generated from operations.
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. Significant increases in the floating interest rates on
the Term Loans and Revolving Credit Facility would result in increased debt
service requirements, which may reduce the funds available for capital
expenditures and other operational needs. In addition, the Company's
leveraged position may impede its ability to obtain financing in the future
for working capital, capital expenditures and general corporate purposes.
Further, the Company's leveraged position may make it more vulnerable to
economic downturns and may limit its ability to withstand competitive
pressures.
21
<PAGE>
The Company's primary source of liquidity is funds generated from operations,
which are supplemented by borrowings under the Credit Agreement. Net cash
provided by operating activities increased $1.3 million for the nine months
ended September 25, 1999, compared to the nine months ended September 26,
1998.
See Note 1 to the Condensed Consolidated Financial Statements for information
regarding acquisitions completed during the nine months ended September 25,
1999, and the related purchase prices.
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.
CAPITAL EXPENDITURES. The Company's capital expenditures were $10.2 million
and $9.5 million for the nine months ended September 25, 1999 and September
26, 1998, respectively. Capital expenditures in both periods primarily relate
improvements in the Company's paintlines and to purchases and upgrades of
fabricating equipment and information systems. In addition, the Company has
made and will continue to make capital expenditures to comply with
Environmental Laws. Environmental capital expenditures for the nine months
ended September 25, 1999 and September 26, 1998, were not significant.
WORKING CAPITAL MANAGEMENT. Working capital was $81.2 million as of September
25, 1999, compared to $88.6 million as of December 25, 1998. The decrease in
working capital is primarily due to an increase in current liabilities as of
September 25, 1999, compared to December 25, 1998, resulting from the timing
of payments due. The Company expects to continue to aggressively manage
working capital levels.
IMPACT OF THE YEAR 2000 ISSUE
The Year 2000 issue is the result of computer programs being written using
two digits rather than four to define the application year. Any of the
Company's computers and equipment that have date-sensitive software,
including embedded computer chips, may recognize a date using "00" as the
year 1900 rather than the year 2000. This could result in a system failure,
operating equipment failure or miscalculations causing disruptions of
operations, including, among other things, a temporary inability to process
transactions, send invoices, or engage in similar normal business activities.
The Company's plan to resolve the Year 2000 issue involves four phases:
assessment, remediation, testing and implementation. To date, management has
fully completed its assessment of the effect of the Year 2000 issue on its
information systems, including the operating systems and equipment used in
its manufacturing operations. Based on assessments conducted in 1997, the
Company determined that it would be required to modify or replace significant
portions of its software at two of its subsidiaries so that its computer
systems will properly utilize dates beyond December 31, 1999. Based upon
assessments conducted in 1998 with regard to operating equipment, the Company
determined that it would not be required to modify or replace any material
pieces of operating equipment in order for the equipment to properly utilize
dates beyond December 31, 1999.
With respect to remediation, two of the Company's subsidiaries are currently
finalizing conversions to fully integrated third-party software packages that
will process the majority of the Company's key transactions. These
conversions, including the testing and implementation of the new systems, are
22
<PAGE>
expected to be fully complete in the fourth quarter of 1999. Historical costs
incurred through September 25, 1999, are approximately $2.5 million. The
Company estimates the costs to complete the conversions to be approximately
$240.0 thousand, which will be funded through operating cash flows. The total
estimated costs of conversion to the integrated third party software packages
also include the costs of conversion to the Euro (see "European Currency").
The Company is approximately 85% complete with the remediation phase related
to the modification and replacement of the systems software located at the
two subsidiaries. The Company believes that with the current modifications of
existing software, the Year 2000 issue can be mitigated with respect to its
significant processes.
The Company is 100% complete on the testing phase for all other systems and
operating equipment that the Company has assessed as being capable of
properly utilizing dates beyond December 31, 1999.
With respect to third parties, the Company has communicated with a majority
of its major customers and its major vendors and suppliers to determine their
state of readiness with respect to the Year 2000 issue. In addition, the
Company conducted tests with several of its major vendors and suppliers
during 1998 and 1999. All costs associated with supplier and vendor
compliance were borne by the suppliers and vendors. Based upon the
information provided by customers and suppliers and the tests which have been
conducted with suppliers, the Company is not aware of any problems that would
materially impact its results of operations, liquidity or capital resources.
While the Company currently believes that it will be able to modify or
replace its affected systems in time to minimize any detrimental effects on
its operations, failure to do so, or the failure of the Company's major
customers and suppliers to modify or replace their affected systems, could
have a material adverse impact on the Company's results of operations,
liquidity or consolidated financial position in the future. The most
reasonably likely worst case scenario of failure by the Company or its
customers and suppliers to resolve the Year 2000 issue in a timely fashion
would be a temporary slowdown in operations at one or more of the Company's
facilities and a temporary inability on the part of the Company to timely
process orders and billings.
In the event that modifications and replacements of systems are not completed
timely, the Company's individual subsidiaries have identified and considered
various contingency options, including identification of alternate suppliers
and vendors, and including the processing of significant transactions by
other facilities located within the Company whose systems are capable of
properly utilizing dates beyond December 31, 1999.
EUROPEAN CURRENCY
As provided in the 1992 treaty on European Union, on January 1, 1999, a new
single European currency, the "Euro," became a currency in its own right,
replacing the currencies of the eleven initial members of the European Union
("participating countries"). Fixed conversion rates between the participating
countries' existing currencies ("legacy currencies") and the Euro were
established as of that date. The Euro is available for non-cash transactions.
Between January 1, 1999 and January 1, 2002 (the "transition period"), the
participating countries have the option of accounting for their transactions
in either Euros or their legacy currencies. The legacy currencies are
scheduled to remain legal tender as denominations of the Euro until at least
January 1, 2002, but not later than July 1, 2002. Beginning July 1, 2002,
legacy currencies will cease to exist.
23
<PAGE>
SCHEDULE FOR INTRODUCTION OF THE EURO - Three of the Company's European
subsidiaries are located in participating countries, but have elected the
option of continuing to account for their transactions in their legacy
currencies during at least the first half of the transition period. However,
the Company, including subsidiaries located in both participating as well as
non-participating countries, was able to transact business in the Euro as of
January 1, 1999. This includes the ability to make and receive payments in
the Euro, to invoice in the Euro, and to provide pricing in the Euro.
ECONOMIC IMPACT ON THE COMPANY - The increased price transparency resulting
from the use of a single currency in the participating countries may affect
the ability of certain companies to price their products differently in the
various European markets. A possible result of this pricing transparency is
price harmonization at lower average prices for products sold in some
markets. However, due to the niche markets in which the Company operates, the
Company does not anticipate and has not experienced a materially negative
impact on its net sales or earnings from operations resulting from the use of
a single currency by the participating countries.
In addition to the economic impact of pricing transparency, conversion to the
Euro may reduce the Company's exposure to changes in foreign exchange rates
due to the effect of having various assets and liabilities denominated in a
single currency as opposed to various legacy currencies. However, because
there will be less diversity in the Company's exposure to foreign currencies,
movements in the Euro's value in U.S. dollars could have a more pronounced
effect, positive or negative, on the Company's results.
COSTS OF CONVERSION TO THE EURO - The Company's European subsidiaries located
in participating countries have converted or are in the process of converting
to new computer systems to prepare for the Year 2000. These systems will also
be Euro-capable. The conversions are expected to be in the fourth quarter of
1999. The Company estimates that its costs to complete the conversions to the
new systems, which relate to Year 2000 issues, the Euro and operational
improvements, will be approximately $200.0 thousand in the fourth quarter of
1999, and will be funded through operating cash flows. Other costs of
conversion to the Euro are not expected to be material.
RECENT ACCOUNTING PRONOUNCEMENTS
In June 1998, the Financial Accounting Standards Board ("FASB") issued
Statement of Financial Accounting Standards ("SFAS") No. 133, ACCOUNTING FOR
DERIVATIVE INSTRUMENTS AND HEDGING ACTIVITIES. SFAS 133 is effective for all
fiscal quarters of all fiscal years beginning after June 15, 2000 (December
31, 2001 for the Company). SFAS 133 requires that all derivative instruments
be recorded on the balance sheet at their fair value. Changes in the fair
value of derivatives are recorded each period in current earnings or other
comprehensive income, depending on whether a derivative is designated as part
of a hedge transaction and, if it is, the type of hedge transaction. For
fair-value hedge transactions in which the Company is hedging changes in the
fair value of an asset, liability, or firm commitment, changes in the fair
value of the derivative instrument will generally be offset in the income
statement by changes in the hedged item's fair value. For cash-flow hedge
transactions, in which the Company is hedging the variability of cash flows
related to a variable-rate asset, liability, or a forecasted transaction,
changes in the fair value of the derivative instrument will be reported in
other comprehensive income. The gains and losses on the derivative instrument
that are reported in other comprehensive income will be reclassified as
earnings in the periods in which earnings are impacted by the variability of
the cash flows of the hedged item. The ineffective portion of all hedges will
be recognized in current period earnings. Management is currently reviewing
the provisions of SFAS No.
24
<PAGE>
133 and does not believe that the Company's financial statements will be
materially impacted by the adoption.
ENVIRONMENTAL MATTERS
The Company's exposure to environmental matters has not changed significantly
from the year ended December 25, 1998. For detailed information regarding
environmental matters, see "Management's Discussion and Analysis - Risk
Management" set forth in the Company's Annual Report on Form 10-K for the
year ended December 25, 1998.
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," or 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 25,
1998, as well as the Company's other filings with the Securities and Exchange
Commission. The Company assumes no obligation to update publicly its forward
looking statements, whether as a result of new information, future events or
otherwise.
ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK
The following discussion about the Company's risk-management activities
includes forward-looking statements that involve risk and uncertainties.
Actual results could differ materially from those projected in the
forward-looking statement. See "Note Regarding Forward Looking Statements"
for additional information regarding the Private Securities Litigation Reform
Act. The Company's management of market risk from changes in interest rates,
exchange rates and commodity prices has not changed from the year ended
December 25, 1998. For detailed information regarding the Company's risk
management, see "Management's Discussion and Analysis - Risk Management" and
"Item 7A. Quantitative and Qualitative Disclosures about Market Risk" set
forth in the Company's Annual Report on Form 10-K for the year ended December
25, 1998.
The Company's exposure to market risk from changes in interest rates and
commodity prices have not changed significantly from the year ended December
25, 1998. The Company's exposure to market risk from changes in exchange
rates has decreased since the year ended December 25, 1998. This analysis
presents the hypothetical increase in foreign exchange loss and increase in
interest expense
25
<PAGE>
related to those financial instruments and derivative instruments held by the
Company at September 25, 1999, which are sensitive to changes in foreign
currency exchange risks. A hypothetical 10 percent decrease in foreign
currency exchange rates would increase the Company's foreign currency
exchange loss by approximately $263.2 thousand for the nine months ended
September 25, 1999, as compared to the hypothetical increase in the Company's
foreign currency exchange loss of approximately $1.9 million for the year
ended December 25, 1998. The decrease in the hypothetical loss for the period
ended September 25, 1999, is primarily attributable to the prepayment of the
Company's unhedged Tranche B Term Loans under the Dutch Guilder facility
(U.S. Dollar denominated debt) during the second quarter of 1999.
All other factors remaining unchanged, a hypothetical 10 percent increase in
foreign currency exchange rates for one year would increase interest expense
by approximately $737.8 thousand as calculated at September 25, 1999, as
compared to the hypothetical increase in the Company's interest expense of
approximately $1.4 million as calculated at December 25, 1998. The decrease
is primarily due to the effect of the weakening of the Dutch Guilder and
Pound Sterling on the Company's currency swap payments (see Note 5 to the
Consolidated Financial Statements for the year ended December 25, 1998, set
forth in the Company's Annual Report on Form 10-K).
PART II - OTHER INFORMATION
ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K
(a)(1) The following consolidated financial statements of Euramax
International Limited and its subsidiaries are included in Part I,
Item 1.
Condensed Consolidated Statements of Earnings for the quarters
and the nine months ended September 25, 1999 and September 26,
1998
Condensed Consolidated Balance Sheets at September 25, 1999 and
December 25, 1998
Condensed Consolidated Statements of Cash Flows for the nine
months ended September 25, 1999 and September 26, 1998
Notes to Condensed Consolidated Financial Statements
(b) The Company filed no reports on Form 8-K during the three months ended
September 25, 1999.
26
<PAGE>
ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K (CONTINUED)
(c) Exhibits:
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).
2.2 Proposals for the acquisition of the entire issued share
capital of Euramax International Limited by Euramax
International, Inc. to be effected by means of a Scheme of
Arrangement under Section 425 of the Companies Act 1985
3.1* Articles of Association of Euramax International Limited
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 Limited, 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 Limited, 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 Limited, 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 Limited, Euramax European Holdings plc,
Euramax European Holdings B.V., Amerimax Holdings, Inc. and
J.P. Morgan Securities Inc. and Goldman Sachs & Co.
10.26*** Incentive Compensation Plan effective January 1, 1997, by
Euramax International Limited
10.27*** Phantom Stock Plan effective January 1, 1999, by Euramax
International Limited
10.28**** Amendment and Waiver dated as of April 6, 1999, among Euramax
International Limited, and its subsidiaries, Paribas (as Agent
and Lender), and the Lenders, to the Amended and Restated
Credit Agreement dated as of July 16, 1997.
27 Financial Data Schedule
- ------------------------------------------------------------------------------
* 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
Registrant's Annual Report on Form 10-K (333-05978) which was filed on
March 12, 1998.
*** Incorporated by reference to the Exhibit with the same number in the
Quarterly Report on Form 10-Q (333-05978) which was filed on April 26,
1999.
**** Incorporated by reference to the Exhibit with the same number in the
Quarterly Report on Form 10-Q (333-05978) which was filed on August 2,
1999.
27
<PAGE>
SIGNATURES
PURSUANT TO THE REQUIREMENTS OF SECTION 13 OR 15(d) OF THE SECURITIES AND
EXCHANGE ACT OF 1934, EURAMAX INTERNATIONAL LIMITED HAS DULY CAUSED THIS
REPORT TO BE SIGNED ON ITS BEHALF BY THE UNDERSIGNED, THEREUNTO DULY
AUTHORIZED.
EURAMAX INTERNATIONAL LIMITED
<TABLE>
<CAPTION>
SIGNATURE TITLE DATE
----
<S> <C> <C>
/s/ J. DAVID SMITH Chief Executive Officer and President November 3, 1999
- ------------------------------
J. David Smith
/s/ R. SCOTT VANSANT Chief Financial Officer and Secretary November 3, 1999
- ------------------------------
R. Scott Vansant
</TABLE>
28
<PAGE>
Exhibit 2.2
THIS DOCUMENT IS IMPORTANT AND REQUIRES YOUR IMMEDIATE ATTENTION. If you are in
any doubt as to the action to be taken, you should immediately consult your bank
manager, solicitor, accountant or other independent professional adviser
authorised under the Financial Services Act 1986.
If you have sold or transferred all your shares in Euramax International
Limited, please send this document and the accompanying proxy forms to the
purchaser or transferee without delay.
- -------------------------------------------------------------------------------
Proposals
for the acquisition of the entire issued share capital of
EURAMAX INTERNATIONAL LIMITED
by
EURAMAX INTERNATIONAL, INC.
to be effected by means of a
Scheme of Arrangement
under Section 425 of the Companies Act 1985
- -------------------------------------------------------------------------------
A letter from the Chairman of Euramax International Limited is set out on pages
5 to 9 of this document.
Notices of meetings of Euramax International Limited to be held on 16 November
1999 are set out on pages 52 to 61 of this document. The action you are
recommended to take is set out on pages 22 and 23 of this document. Whether or
not you intend to be present at the meetings convened by the above-mentioned
notices, you are requested to complete and return the relevant forms of proxy so
as to arrive as soon as possible and in any event no later than 48 hours before
the time fixed for the relevant meeting. Forms of proxy for the Court Meetings
(but not for the Extraordinary General Meeting) will be valid if handed to the
Chairman of the relevant Court Meeting at the meeting.
<PAGE>
CONTENTS
<TABLE>
<S> <C>
DEFINITIONS...................................................................................................1
PART I - LETTER FROM THE CHAIRMAN OF EURAMAX..................................................................5
PART II - EXPLANATORY STATEMENT..............................................................................10
PART III - SCHEME OF ARRANGEMENT.............................................................................24
APPENDIX I - STRUCTURE DIAGRAMS..............................................................................30
APPENDIX II - COMPARISON OF EURAMAX SHARES AND EURAMAX US SHARES.............................................31
APPENDIX III - GENERAL INFORMATION...........................................................................44
APPENDIX IV - COMPARISON OF LAWS.............................................................................48
NOTICES OF MEETINGS..........................................................................................51
Notice of Court Meeting of holders of Voting Ordinary Shares.............................................51
Notice of Court Meeting of holders of Non-voting Ordinary Shares.........................................53
Notice of Court Meeting of Holders of Dollar Preference Shares...........................................55
Notice of Court Meeting of Holders of Sterling Preference Shares.........................................57
Notice of Extraordinary General Meeting..................................................................59
</TABLE>
<PAGE>
EXPECTED TIMETABLE OF PRINCIPAL EVENTS
<TABLE>
<CAPTION>
1999
<S> <C>
Latest time for receipt of forms of proxy for the Court Meetings+
- - from holders of Voting Ordinary Shares 8.30 am on 16 November
- - from holders of Non-voting Ordinary Shares 8.45 am on 16 November
- - from holders of Dollar Preference Shares 9.00 am on 16 November
- - from holders of Sterling Preference Shares 9.15 am on 16 November
Latest time for receipt of forms of proxy for the Extraordinary General Meeting 9.30 am on 16 November
Court Meeting of holders of Voting Ordinary Shares 9.30 am on 16 November
Court Meeting of holders of Non-voting Ordinary shares 9.45 am on 16 November
Court Meeting of holders of Dollar Preference Shares 10.00 am on 16 November
Court Meeting of holders of Sterling Preference Shares 10.15 am on 16 November
Extraordinary General Meeting* 10.30 am* on 16 November
Date of Court hearing of petition to sanction the Scheme 6 December
Scheme Record Date 7 December
Effective Date 8 December
Certificates for Euramax US Shares despatched 9 December
</TABLE>
+ forms of proxy will be valid if handed to the Chairman of the relevant Court
Meeting at that meeting.
* or so soon thereafter as the Court Meeting of the holders of Sterling
Preference Shares has concluded or been adjourned.
<PAGE>
DEFINITIONS
In this document and the appendices hereto, unless the context
otherwise requires, the following words and expressions have the
following meanings:
"ACT" means the Companies Act 1985 (as amended);
"BUSINESS DAY" means a day (other than a Saturday or Sunday) on which
banks are generally open for business in London;
"CAPITAL REDUCTION RESOLUTION" means the special resolution to cancel
the Euramax Shares, to be proposed at the Extraordinary General
Meeting;
"COURT" means the High Court of Justice in England and Wales;
"COURT MEETINGS" means the meetings of the holders of Voting Ordinary
Shares, Non-voting Ordinary Shares, Dollar Preference Shares and
Sterling Preference Shares convened by order of the Court, notices of
which are set out on pages 52 to 59 of this document;
"DIRECTORS" means the directors of Euramax as at the date of this
document;
"DOLLAR PREFERENCE SHARES" means the 33,925,000 14 per cent redeemable
cumulative preference shares of US$1 each in the capital of Euramax;
"EFFECTIVE DATE" means the date on which the Scheme becomes effective
in accordance with its terms;
"EURAMAX" or "THE COMPANY" means Euramax International Limited;
"ENLARGED GROUP" means Euramax US and its subsidiaries following its
acquisition of the issued share capital of the Company pursuant to the
Scheme;
"EURAMAX GROUP" means Euramax and its subsidiaries;
"EURAMAX SHARES" means the Ordinary Shares and the Preference Shares;
"EURAMAX US" means Euramax International, Inc.;
"EURAMAX US SHARES" means the Voting US Shares and the Restricted
Voting Euramax US Shares;
<PAGE>
"EURAMAX US STOCKHOLDERS' AGREEMENT" means the agreement proposed to be
made between Euramax US and the persons who will, following the
implementation of the Scheme be the holders of Euramax US Shares;
"EXPLANATORY STATEMENT" means the explanatory statement relating to the
Scheme, in compliance with section 426 of the Act set out in Part II of
this document;
"EXTRAORDINARY GENERAL MEETING" means the extraordinary general meeting
of the Company convened in connection with the Restructuring Proposals,
notice of which is set out on pages 60 and 61 of this document;
"INSTITUTIONAL DIRECTORS" means the Directors for the time being
holding office and appointed by ACP Holding Company and CVC European
Equity Partners L.P. as the case may be (or to the extent provided in
the Shareholders' Agreement, their respective transferees) pursuant to
article 7 of the articles of association of the Company;
"INSTITUTIONAL INVESTORS" means CVC European Equity Partners L.P., CVC
European Equity Partners (Jersey) L.P., ACP Holding Company and Banque
Paribas, Grand Cayman Branch, and/or (to the extent provided in the
Shareholders' Agreement) their respective transferees;
"MEETINGS" means the Court Meetings and the Extraordinary General
Meeting;
"NON-VOTING ORDINARY SHARES" means the 88,480 Non-voting Shares of US$1
each in the capital of Euramax;
"NOTES" means the 11 1/4 per cent Senior Subordinated Notes due 2006 of
Euramax issued by Euramax, Euramax European Holdings plc and Euramax
European Holdings, B.V.;
"NOTEHOLDERS" means the holders of Notes;
"ORDINARY SHARES" means together, the Non-voting Ordinary Shares and
the Voting Ordinary Shares;
"ORDINARY SHAREHOLDER" means a holder of Ordinary Shares;
"PREFERENCE SHARES" means together, the Dollar Preference Shares and
the Sterling Preference Shares;
<PAGE>
"RATE OF EXCHANGE" means the middle-market sterling to US dollar
exchange rate quoted by National Westminster Bank plc in London at
11.00 am on the Scheme Record Date;
"RESTRICTED-VOTING EURAMAX US SHARES" means shares of Class B
restricted voting Common Stock of Euramax US having a par value of
$0.01 per share;
"RESTRUCTURING PROPOSALS" means the proposals for the restructuring of
the Group set out in this document, including the proposed acquisition
by Euramax US of the entire issued share capital of the Company by
means of the Scheme, as described in the Explanatory Statement;
"SCHEME" means the Scheme of Arrangement under section 425 of the Act
(including a reduction of share capital) the text of which is set out
in Part III of this document;
"SCHEME RECORD DATE" means the business day immediately preceding the
Effective Date;
"SCHEME RESOLUTIONS" means the resolutions to be proposed at the Court
Meetings;
"SENIOR CREDIT AGREEMENT" means the amended and restated credit
agreement dated as of 16 July 1997 for the provision to companies in
the Euramax Group of syndicated senior debt facilities of approximately
US$164.7 million, made between Euramax, Amerimax Fabricated Products,
Inc., Euramax Holdings Limited, Euramax Europe B.V., Euramax
Netherlands B.V., Amerimax Holdings, Inc., Euramax European Holdings
plc, Euramax European Holdings B.V.
and Banque Paribas and other lenders;
"SENIOR DEBT PROVIDERS" means the lenders under the Senior Credit
Agreement;
"SHAREHOLDER" means a holder of Euramax Shares;
"SHAREHOLDERS' AGREEMENT" means the shareholders agreement relating to
Euramax dated 25 September 1996 and made between Euramax (1) J D Smith
and others (2) and CVC European Equity Partners L.P., CVC European
Equity Partners (Jersey) L.P., ACP Holding Company and Bank Paribas,
Grand Cayman Branch (3);
"SPECIAL DIVIDEND" means the dividend in specie of the entire share
capital of Amerimax Holdings, Inc. proposed to be paid by Euramax
pursuant to the Restructuring Proposals;
"STERLING PREFERENCE SHARES" means the 50,000 14 per cent redeemable
cumulative preference shares of L1 each in the capital of Euramax;
<PAGE>
"TERMINATION AGREEMENT" means the agreement proposed to be entered into
on or before the Effective Date for terminating the Shareholders'
Agreement and recording the consent of the parties thereto to the
Scheme;
"VOTING ORDINARY SHARES" means the 911,520 ordinary shares of US$1 each
in the capital of Euramax; and
"VOTING US SHARES" means shares of Class A voting Common Stock of
Euramax US having a par value of $0.01 per share.
<PAGE>
PART I - LETTER FROM THE CHAIRMAN OF EURAMAX
EURAMAX INTERNATIONAL LIMITED
(registered in England no 3162836)
Directors:
R M Cashin
W Ty Comfort
P E Drack
J M Silvestri
J D Smith
R Van Rappard
S M Wallis
Registered Office: Brunel Road
Earlstrees Industrial
Estate, Corby
Northants
NN17 4JW
Date: 19 October 1999
To: HOLDERS OF EURAMAX SHARES
Dear Shareholder
PROPOSED SCHEME OF ARRANGEMENT
Introduction
You will recall that I wrote to you on 5 August 1999 enclosing a notice of an
extraordinary general meeting of the Company for the purpose of proposing a
resolution to re-register the Company as a private limited company. I referred
in that letter to a proposed group restructuring to ensure that the Group's
holding company should be a US company rather than a UK company. This document
sets out the terms of a scheme of arrangement which is a key element of that
restructuring. If the Scheme is implemented, the Company will become a wholly
owned subsidiary of Euramax US and you will become a shareholder in Euramax US
instead of the Company. I am writing to you to explain the background to the
Restructuring Proposals and to outline the terms of the Scheme. Full details of
the Scheme are set out in the Explanatory Statement which forms Part II of this
document.
Background to the Restructuring Proposals
In September 1996, the Company, through its wholly owned subsidiaries, acquired
from Alumax Inc. a number of subsidiaries of that company incorporated in the
US, the UK, the Netherlands and
<PAGE>
France. The funding for the acquisition was provided by a combination of debt
and equity, with substantial capital being provided by ACP Holding Company, an
affiliate of Citicorp Venture Capital Ltd, a New York based private equity
sponsor, CVC European Equity Partners L.P., a London-based private equity
sponsor and certain members of Euramax's management. At the time of this
acquisition, it was envisaged that the institutions would, in due course,
realise their investments by way of a flotation of the Company on the London
Stock Exchange or a trade sale within the UK and, accordingly, the Euramax Group
was structured with a UK holding company. However, in view of the fact that the
greater part of the Euramax Group's operations are based in the US, your board
considers that an exit would be more readily capable of being achieved by a
flotation on the US Stock Exchange or a trade sale within the US at the
appropriate time (although it is emphasised that there are no immediate plans
for any such sale or flotation and any decision to sell Euramax or obtain a
listing for its shares will only be made if and when your board considers this
to be in the best interests of the Company and its shareholders). Additionally,
the operation of the Euramax Group under a US holding company will result in
administrative efficiencies.
The Scheme will result in the existing Euramax Group being headed by Euramax US,
a company incorporated in the US. Following the implementation of the Scheme, it
is proposed that the Group will be further reorganised so that the US
subsidiaries of Euramax will be held directly by Euramax US. It is envisaged
that these steps will include, INTER ALIA, the payment by Euramax of a dividend
in specie comprising the issued share capital of its subsidiary, Amerimax
Holdings, Inc.
In addition to providing a mechanism for the acquisition by Euramax US of the
entire issued share capital of Euramax, the Scheme will be used to create
additional reserves which it is intended should be available for the payment of
dividends, including the Special Dividend.
Diagrams illustrating the structure of the existing Euramax Group and that group
as it will be following the implementation of the Restructuring Proposals are
set out in Appendix I to this document.
The Scheme
The Scheme, which comprises the first step of the Restructuring Proposals, will
involve the following steps:
1. all the Euramax Shares will be cancelled, thereby creating a
reserve in the books of the Company ("Special Reserve");
<PAGE>
2. the Special Reserve will be applied as to part in paying up new
ordinary shares in the capital of the Company in favour of Euramax US
and as to the balance in creating a reserve out of which it is intended
that dividends, including the Special Dividend referred to above, may
be paid; and
3. Euramax US will issue to Shareholders appearing on the Register of
Members of Euramax at the close of business in London on the Scheme
Record Date, shares of common stock in itself on the basis of 38.58164
Euramax US Shares for each Ordinary Share and 0.33583 Euramax US Shares
for each Dollar Preference Share (and so in proportion for any greater
or lesser number of Ordinary or Dollar Preference Shares). In the case
of Sterling Preference Shares, the terms above in relation to Dollar
Preference Shares shall apply as if the nominal value of each such
share were converted to US dollars at the Rate of Exchange. Holders of
Non-voting Ordinary Shares may elect to receive Restricted-voting
Euramax US Shares on a basis proportionate to their holdings of
Non-voting Operating Shares as part of their allocation of Euramax US
Shares. Fractions of Euramax US Shares will be rounded up for the
purpose of determining the entitlements of Shareholders pursuant to the
Scheme.
The Scheme can only be implemented if:
(i) it is approved at each of the Court Meetings and the Extraordinary
General Meeting;
(ii) it receives the consent of Institutional Investors holding at least
66 2/3 per cent of the Ordinary Shares held by all the Institutional
Investors;
(iii) it receives the consent of the Noteholders and the Senior Debt
Providers; and
(iv) it is sanctioned by the Court.
Further information on the Scheme is set out in the Explanatory Statement which
forms Part II of this document.
EURAMAX US AND EURAMAX US SHARES
Euramax US is a new company established in Delaware. The rights attaching to the
Euramax US Shares will be governed by the amended and restated Certificate of
Incorporation and by-laws of Euramax US and the laws of the State of Delaware. A
summary of the principal differences between such rights and the existing rights
attaching to Euramax Shares is set out in Appendix II to this document.
<PAGE>
EFFECT OF THE SCHEME ON DIRECTORS
The management responsibilities of the Directors (as directors of Euramax US
rather than Euramax) will not (to the extent possible under applicable law) be
altered in any material respect as a consequence of the implementation of the
Scheme, nor will the Scheme materially affect the rights (including compensation
and benefits) of the Directors as directors and/or other employees of the
Euramax Group. Details of the interests of the Directors in the Euramax Group
are set out on page 13 of this document.
TAXATION
Information relating to the taxation consequences of the Scheme for Euramax
Shareholders is set out in the Explanatory Statement which forms Part II of this
document.
COURT MEETINGS AND EXTRAORDINARY GENERAL MEETING
Shareholders should note that, in order to be effective, the Scheme must be
approved at each of the Court Meetings by a majority in number of the holders of
shares of the relevant class present and voting (in person or by proxy) at the
Court Meetings. In addition, the majority in number voting in favour at each
Court Meeting must together hold not less than 75 per cent of the nominal value
of the shares of the relevant class held by all those Shareholders present and
voting (in person or by proxy) at the Court Meetings. Voting at each Court
Meeting will be by poll.
IT IS DESIRABLE THAT A HIGH PROPORTION OF VOTES ARE CAST AT THE COURT MEETINGS
SO THAT THE COURT CAN BE SATISFIED IN EACH CASE THAT THE RESULT FAIRLY
REPRESENTS THE OPINION OF THE SHAREHOLDERS. ACCORDINGLY, WHETHER OR NOT YOU
PROPOSE TO ATTEND THE MEETINGS IN PERSON, YOU ARE STRONGLY URGED TO COMPLETE,
SIGN AND RETURN THE FORMS OF PROXY IN ACCORDANCE WITH THE INSTRUCTIONS PRINTED
ON THEM AS SOON AS POSSIBLE. FAILURE TO DO SO COULD RESULT IN THE SCHEME NOT
BECOMING EFFECTIVE AND THE RESTRUCTURING PROPOSALS NOT BEING IMPLEMENTED.
To be effective, the Scheme must also be approved by a special resolution in the
terms of the Capital Reduction Resolution to be proposed at the Extraordinary
General Meeting.
ACTION TO BE TAKEN
The action to be taken by Shareholders is set out in the Explanatory Statement,
which forms Part II of this document.
<PAGE>
RECOMMENDATION
The Directors consider the Scheme to be in the best interests of the Company's
shareholders as a whole and unanimously recommend that Shareholders support the
Scheme by voting in favour of the resolutions to be proposed at the Court
Meetings and the Extraordinary General Meeting, as they intend to do in respect
of their respective aggregate beneficial holdings of Voting Ordinary Shares,
Non-voting Shares and Preference Shares, which respectively represent
approximately 6.6 per cent of the issued Voting Ordinary Shares, 0.2 per cent of
the issued Non-voting Ordinary Shares, 2.6 per cent of the issued Dollar
Preference Shares and 45 per cent of the issued Sterling Preference Shares, in
each case as at the date of this document.
Yours sincerely
Stuart M Wallis
Chairman
<PAGE>
PART II - EXPLANATORY STATEMENT
(In compliance with section 426 of the Companies Act 1985)
19 October 1999
TO HOLDERS OF EURAMAX SHARES
1. INTRODUCTION
This statement is made in accordance with Section 426 of the Companies
Act 1985, which requires there to be sent to members of the Company a
statement explaining the effect of the Scheme.
2. OUTLINE OF THE SCHEME
2.1 Under the Scheme, on the Effective Date, the share capital of
Euramax will be reorganised as follows:
(i) all the Euramax Shares will be cancelled;
(ii) Euramax will apply part of the reserve arising on the
cancellation in paying up 1,000 new ordinary shares of L1
each, credited as fully paid to Euramax US;
(iii) Euramax US will issue Euramax US Shares to the
shareholders appearing on the Register of Members of
Euramax at the close of business in London on the Scheme
Record Date in the following proportions:
- 38.58164 Euramax US Shares for every one Ordinary Share
- 0.33583 Euramax US Shares for every Dollar Preference
Share
- 0.33583 Euramax US Shares for every dollar in nominal
value of every Sterling Preference Share as if the nominal
value of the Sterling Preference Share were converted to
dollars at the Rate of Exchange
and so in proportion for any greater or lesser number of
Euramax Shares. Fractional entitlements to Euramax US
Shares will be rounded up to the nearest whole number.
<PAGE>
(iv) It is intended that, subject to the Act, the balance of
the reserve arising on the cancellation will be available
for payment of dividends including the Special Dividend.
(v) Holders of Non-voting Ordinary Shares may elect to receive
Restricted-voting Euramax US Shares in accordance with the
Scheme.
2.2 The Scheme will become effective and binding if each of the
following conditions is fulfilled:
(a) the Scheme is approved at each of the Court Meetings (or
at any adjournment of such meetings);
(b) the Scheme is approved by Institutional Investors holding
at least 66 2/3 per cent of all the Ordinary Shares held
by the Institutional Investors as is required by the
Shareholders' Agreement (which approval will be evidenced
by the execution by such Shareholders of the Termination
Agreement);
(c) the Scheme is approved by the Noteholders in accordance
with the terms of the indenture constituting the Notes;
(d) the Scheme is approved by the Senior Debt Providers in
accordance with the provisions of the Senior Credit
Agreement;
(e) the Capital Reduction Resolution is duly passed at the
Extraordinary General Meeting;
(f) the Scheme is sanctioned (with or without modifications as
provided by the Scheme) and the associated reduction of
capital is confirmed by the Court; and
(g) an office copy of the Court Order is delivered to and
registered by the Registrar of Companies.
If all the above conditions are fulfilled, it is expected that the
Scheme will become effective on 8 December 1999. If the Scheme has
not become effective by 8 December 1999 or any later date to which
Euramax may agree and the Court may allow, it will lapse and not
become effective. Euramax and Euramax US may jointly
<PAGE>
consent to any modification of the Scheme which is approved or
required by the Court.
3. CALCULATION OF ENTITLEMENTS TO EURAMAX US SHARES
The entitlements of holders of Euramax Shares to Euramax US Shares
pursuant to the Scheme have been calculated by attributing to the
entire issued share capital of the Company a value of US$224,971,000
being an amount equal to seven times the earnings before interest, tax,
depreciation and amortisation of the Company as shown in the cumulative
consolidated management accounts of the Company for the 12 month period
ended 24 September 1999 after deducting a sum equal to the long term
debt of the Euramax Group net of cash balances. The resulting figure
("EQUITY VALUE") has been used to allocate value between the Ordinary
Shares and the Preference Shares as follows:
- the Preference Shares have been valued at an amount equal to their
par value and cumulative dividends accrued thereon; and
- the Ordinary Shares have been valued by subtracting from the
Equity Value the amount so attributed to the Preference Shares.
Voting Ordinary Shares and Non-voting Ordinary Shares have been
accorded the same value since their holders are entitled to convert
Non-voting Ordinary Shares into Voting Ordinary Shares, subject to the
provisions of the articles of association of the Company.
4. INFORMATION ON EURAMAX AND THE EURAMAX GROUP
Euramax is the holding company of the Euramax Group. The Euramax Group
is a leading international producer of aluminium and steel products
with wholly owned subsidiaries in the United States, the United
Kingdom, the Netherlands and France. Euramax's products include painted
sheet and coil, siding, roofing, rain carrying systems, windows, doors
and various fabricated trim parts and components.
Further information on Euramax is set out in Appendix III to this
document.
5. INFORMATION ON EURAMAX US AND THE ENLARGED GROUP
Euramax US is a new company established in Delaware. None of its shares
are currently in issue. It will, following the implementation of the
Restructuring Proposals, be the holding
<PAGE>
company of the Enlarged Group. Immediately following the Scheme
becoming effective, Euramax US will have no material assets other than
the share capital of Euramax.
Further information on Euramax US, including the names of its intended
directors, is set out in Appendix III to this document.
Diagrams showing the structure of the existing Euramax Group and the
structure of the Enlarged Group as it will be following the
implementation of the Restructuring Proposals are set out in Appendix I
to this document. A summary of the differences between the Euramax
Shares and the Euramax US Shares which will be issued in their place is
set out in Appendix II to this document.
Certain differences between the laws of England and Wales and the laws
of the State of Delaware affecting companies and their shareholders are
outlined in Appendix IV to this document.
6. DIRECTORS' INTERESTS
At the close of business as at the date of this document, the interests
of the Directors in Euramax Shares, as notified to the Company pursuant
to sections 324 or 328 of the Act and as shown in the register of such
interests maintained under the provisions of Section 325 of the Act
(all of which are beneficial (unless otherwise stated)) were as
follows:
<TABLE>
<CAPTION>
DIRECTOR ORDINARY SHARES PREFERENCE SHARES
<S> <C> <C>
R M Cashin 10,976 411,291
W Ty Comfort Nil Nil
P E Drack 1,600 (1) 48,400
R Van Rappard Nil Nil
J M Silvestri(2) 1,299 37,450 (3)
J D Smith 26,400 193,600
S M Wallis 20,000 230,000
TOTAL 60,275 920,741
</TABLE>
(1) Includes 160 Non-voting Ordinary Shares;
(2) JM Silvistri is also a partner in CCT III Partners LP
which holds 52,293 Voting Ordinary Shares and 1,995,386
Dollar Preference Shares;
(3) Includes 22,500 Sterling Preference Shares.
The effect of the Scheme on these interests does not differ from the
effects of the Scheme on the interests of any other Shareholder.
<PAGE>
Neither the management responsibilities nor the terms of employment of
J D Smith, the sole executive director of the Company, nor the terms of
engagement of the non-executive directors will be altered as regards
compensation and benefits or otherwise as a consequence of the
implementation of the Scheme (to the extent possible under applicable
law) although each director will assume a corresponding role on the
board of Euramax US.
7. SHAREHOLDERS' AGREEMENT
The Company and certain of its shareholders, including members of its
management ("MANAGEMENT SHAREHOLDERS") and the Institutional Investors
are the parties to a Shareholders' Agreement which contains, INTER
ALIA:
- a requirement that the consent of 66 2/3 of the Institutional
Investors (measured by reference to the nominal value of their
shares) is required to a number of actions, including a variation
of the authorised or issued share capital of the Company, the
alteration of its Memorandum and Articles of Association and the
making of any reduction of its share capital;
- a requirement that the consent of a director nominated by ACP
Holding Company (if one is holding office) and a director
nominated by CVC Capital Partners Europe Limited (if one is
holding office) is required to a number of financial and
operational decisions including the making of capital commitments
and acquisitions and disposals in excess of specified limits, the
granting of options to acquire shares and the appointment or
removal of directors; and
- certain restrictive covenants relating to the activities of the
Management Shareholders for a period of 18 months after any of
them ceases to be employed.
The Company has agreed with the Institutional Investors and the
Management Shareholders that those provisions of the Shareholders'
Agreement which are of a continuing nature should continue to apply to
the parties to the Shareholders' Agreement (including any persons who,
although not originally parties to that agreement, have agreed to be
bound by its terms ("Additional Parties")) save that rights which at
present depend upon the holding of Euramax Shares will have effect by
reference to holdings of Euramax US Shares following the implementation
of the Scheme. Accordingly it is proposed that on or prior to the
Effective Date such shareholders will execute the Euramax US
Stockholders' Agreement and
<PAGE>
an agreement terminating the Shareholders' Agreement and incorporating
the consent of the relevant parties (including any Additional Parties)
to the Scheme.
Copies of the Shareholders' Agreement and drafts of the Termination
Agreement and Euramax US Stockholders' Agreement are available for
inspection by Shareholders of Euramax as set out in Appendix III to
this document.
8. SHARE CERTIFICATES
Certificates in respect of the Euramax US Shares to be issued pursuant
to the Scheme will be sent to holders of Euramax Shares on the register
of members of Euramax at the close of business on the Scheme Record
Date. In the case of joint holders, these will be despatched to the
joint holder whose name appears first in the Register of Members.
Certificates will be despatched at the risk of the person(s) entitled
to them.
Upon the Scheme becoming effective, existing certificates for Euramax
Shares will cease to be valid and should, if Euramax so requests, be
sent to Euramax for cancellation. No transfer of Euramax Shares will be
registered after the Record Date.
9. TAXATION
The statements set out below are intended only as a general guide to
current UK law and practice (or US or Dutch law and practice as
appropriate). They apply only to certain categories of person who are
resident in the UK, US or the Netherlands and who hold their shares as
investments and are the beneficial owners thereof. The following
summary does not purport to be a complete analysis or listing of all
the potential UK, US or Dutch tax consequences arising from the Scheme.
If you are in any doubt as to your tax position, you are strongly
recommended to consult your professional adviser. This summary is based
upon UK law and UK Inland Revenue practice (or US law and US Internal
Revenue Service ("IRS") practice or Dutch law and Dutch tax practice)
as in effect at the date of this document, each of which may be subject
to change, perhaps with retrospective effect. Any changes to these laws
and practices may adversely affect the analysis and conclusions as to
the tax consequences of the Scheme. No responsibility is assumed to
update the conclusions due to any such changes.
<PAGE>
9.1 STATEMENT REGARDING THE TAX POSITION OF UK SHAREHOLDERS
9.1.1 CAPITAL REDUCTION AND SCHEME OF ARRANGEMENT
The opinion of leading UK tax counsel has been obtained
regarding the taxation treatment of shareholders of
Euramax who are resident for taxation purposes in the UK
only and who do not hold their Euramax Shares as trading
stock.
Shareholders should not as a result of the implementation
of the Scheme be treated as disposing of their existing
Euramax Shares for the purposes of UK taxation of
chargeable gains ("CGT") and their new holdings in Euramax
US will be taken to be the same assets acquired at the
same time as their original shareholdings in Euramax.
9.1.2 DISPOSAL OF EURAMAX US SHARES
A disposal of Euramax US Shares by a Shareholder resident
and ordinarily resident for tax purposes in the UK may,
depending on the Shareholder's circumstances, and subject
to any available exemption or relief, give rise to a
chargeable gain or allowable loss for CGT purposes. A
Shareholder who is an individual and who has on or after
17 March 1998, ceased to be resident or ordinarily
resident for tax purposes in the UK for a period of less
than five years, and who disposes of Euramax US Shares
during that period, may also be liable to CGT (subject to
any available exemption or relief).
A distinction is drawn between Shareholders potentially
liable to CGT on the disposal of Euramax US Shares, who
are within the charge to corporation tax and those who are
not. In the hands of the latter, Euramax US Shares will be
eligible for taper relief as non-business assets (as
though they were the same assets as the Euramax shares
disposed of) and any gain or loss should only arise on the
disposal of the Euramax US Shares and will be computed by
reference to the CGT base cost of the Euramax Shares for
which Euramax US Shares were received in exchange. In the
hands of the former, Euramax US Shares will attract
indexation allowance and any chargeable gain or allowable
loss arising on their disposal will be computed by
reference to the base cost of the Euramax Shares for which
they were received in exchange.
<PAGE>
9.1.3 DIVIDENDS ON EURAMAX US SHARES
9.1.3.1 Euramax US will be required to deduct and account
to the IRS for US withholding tax at the rate of
30 per cent on dividends paid to its
shareholders. Under the US/UK income tax treaty,
the withholding tax on dividends paid to a UK tax
resident is reduced to 15 per cent. If the UK tax
resident is a corporation which controls,
directly or indirectly, at least 10 per cent of
the voting stock of Euramax US, the withholding
tax on dividends will be reduced to 5 per cent.
9.1.3.2 For a shareholder who is a UK resident individual
liable to income tax, the gross dividend, (i.e.
the sum of the dividend and withholding tax) will
be subject to income tax. Generally, the
withholding tax will be available as a credit
against the UK income tax on the dividend income.
9.1.3.3 For a UK resident corporate shareholder the gross
dividend will be subject to corporation tax.
Generally, the withholding tax will be available
as a credit against the UK corporation tax
payable in respect of the dividend income.
9.1.4 STAMP DUTY
No UK stamp duty is payable on the issue of shares by
Euramax US.
9.2 STATEMENT REGARDING THE TAX POSITION OF US SHAREHOLDERS
9.2.1 CAPITAL REDUCTION AND SCHEME OF ARRANGEMENT
9.2.1.1 The Scheme, which comprises a capital reduction
and scheme of arrangement, should be
characterised for US tax purposes as a
transaction in which the US shareholders of
Euramax should not recognise any gain or loss in
connection with the exchange of their shares in
Euramax. The US shareholders of Euramax will take
a carryover tax basis and holding period in the
shares of Euramax US.
9.2.1.2 Although the US shareholders of Euramax generally
should not recognise any gain or loss, it is
possible that certain US shareholders
<PAGE>
may have to include in gross income as ordinary
income their pro rata share of certain earnings
and profits of the non-US companies in the
Euramax Group. Whilst the US shareholders of
Euramax have legal authority to not recognise
ordinary income, the IRS could take a contrary
position in an audit of the shareholders' tax
return. If the IRS ultimately were to prevail, an
income inclusion to a US shareholder of Euramax
US would be taxed as ordinary dividend income,
and the Shareholder's tax basis in the Euramax US
shares would be correspondingly increased.
9.2.2 DISPOSAL OF EURAMAX US SHARES
9.2.2.1 A disposal of Euramax US Shares will cause US
shareholders to recognise a taxable gain or loss
for US tax purposes. If the Euramax US Shares are
a capital asset in the hands of the shareholder,
such gain or loss will be characterised as a
capital gain or loss. Non-US investors should
generally not be subject to US tax on a disposal
of Euramax US Shares provided that Euramax US
does not constitute a "US real property holding
company" during the period of five years
preceding the disposal.
9.2.3 DIVIDENDS ON EURAMAX US SHARES
9.2.3.1 Dividends paid by Euramax US from its current or
accumulated earnings and profits will be fully
taxable to shareholders as ordinary income. To
the extent dividends are paid to non-US
shareholders, the dividend income will be subject
to a flat 30 per cent withholding tax (or a
reduced rate under an applicable income tax
treaty).
9.2.3.2 Corporate US shareholders of Euramax US will
receive a dividends received deduction of 70 per
cent if their ownership in Euramax US is less
than 20 per cent and a dividends received
deduction of 80 per cent if their ownership is 20
per cent or more.
<PAGE>
9.3 STATEMENT REGARDING THE TAX POSITION OF DUTCH SHAREHOLDERS
9.3.1 CAPITAL REDUCTION AND SCHEME OF ARRANGEMENT
The implementation of the Scheme will not give rise to a
chargeable gain for Shareholders who are individuals and
resident for tax purposes in the Netherlands unless the
individual has a substantial interest (being a
shareholding exceeding 5 per cent of the issued share
capital of Euramax).
Dutch corporate Shareholders may be taxable on any profit
arising from their shareholding in Euramax unless the
participation exemption is applicable. A corporate
shareholder can apply for the participation exemption if
it has a direct interest of at least 5 per cent in the
issued share capital of Euramax US.
9.3.2 DISPOSAL OF EURAMAX US SHARES
A disposal of Euramax US Shares by a shareholder who is an
individual and resident for tax purposes in the
Netherlands will not give rise to a chargeable gain or an
allowable loss unless he or she has a substantial interest
(being a shareholding exceeding 5 per cent of the issued
share capital of Euramax US).
A disposal of Euramax US Shares by a Dutch resident
corporate shareholder which is subject to Dutch
corporation tax (35 per cent) will give rise to a
chargeable gain or allowable loss unless the participation
exemption is applicable. A corporate shareholder can apply
for the participation exemption if it has a direct
interest of at least 5 per cent in the issued share
capital of Euramax US.
9.3.3 DIVIDENDS ON EURAMAX US SHARES
9.3.3.1 Euramax US will be required to deduct and account
to the IRS for US withholding tax at the rate of
30 per cent on dividends paid to its
shareholders. Under the US/Netherlands income tax
treaty, the withholding tax on dividends paid to
a Dutch tax resident is reduced to 15 per cent.
If the Dutch tax resident is a corporation which
controls, directly or indirectly, at least 10 per
cent of the voting
<PAGE>
stock of Euramax US, the withholding tax on
dividends will be reduced to 5 per cent.
9.3.3.2 Individual shareholders resident in the
Netherlands will be subject to Dutch income tax
in respect of cash dividends received (maximum 60
per cent income tax). If the individual has a
substantial interest, the tax rate is currently
25 per cent. Generally, credit for US withholding
tax on the dividends is available.
9.3.3.3 A Dutch resident corporate shareholder will
normally be liable to corporation tax in respect
of dividends received unless the participation
exemption is applicable. Generally, credit for US
withholding tax on the dividends is available.
10. MEETINGS
10.1 COURT MEETINGS
The Court Meetings have been convened pursuant to an Order of the
Court, for the purposes of considering and, if thought fit,
approving the Scheme (with or without modification). Notices of
the Court Meetings are set out on pages 52 to 59 of this document.
To become effective the Scheme must be approved at each of the
Court Meetings by a majority in number of the holders of each
class of Shares in the capital of the Company present and voting
(in person or by proxy) at the Court Meetings. In addition, the
majority in number voting in favour at each Court Meeting must
together hold not less than 75 per cent of the nominal value of
the Euramax Shares of the relevant class held by all those
Shareholders present and voting (in person or by proxy) at the
Court Meetings. Voting at each Court Meeting will be by poll.
Each Court Meeting has, therefore, two tests to assess whether the
requisite majority has been achieved. If either of these tests are
not met in respect of any of the Court Meetings, then the Scheme
will not be capable of taking effect.
In addition to the Court Meetings, it is also necessary for the
Scheme to be sanctioned by the Court before it can become
effective. A Court hearing in respect of the Scheme is scheduled
for 6 December 1999 and Shareholders will be entitled to
<PAGE>
attend the hearing and to appear in person or by Counsel to
support or oppose the Scheme.
Upon the Scheme becoming effective, it will be binding on all
holders of Euramax Shares irrespective of whether or not they
attended or of the way they voted at the Court Meetings.
IT IS IMPORTANT THAT AS MANY VOTES AS POSSIBLE ARE CAST AT THE
COURT MEETINGS SO THAT THE COURT MAY BE SATISFIED THAT THERE IS A
FAIR REPRESENTATION OF SHAREHOLDER OPINION. YOU ARE THEREFORE
ASKED TO COMPLETE AND RETURN THE FORM OF PROXY ENCLOSED WITH THIS
DOCUMENT IN ACCORDANCE WITH THE INSTRUCTIONS SET OUT UNDER THE
HEADING "ACTION TO BE TAKEN" ON PAGE 22 OF THIS DOCUMENT.
10.2 EXTRAORDINARY GENERAL MEETING
The Extraordinary General Meeting is being convened for the
purposes of considering and, if thought fit, passing a special
resolution to approve the Scheme and an associated reduction in
capital and to amend Euramax's articles of association so as to
delete the provisions contained therein that confer special rights
on the holders of each class of shares and to provide instead for
a single class of ordinary shares.
All Shareholders other than holders of Preference Shares who hold
less than 5 per cent of the issued Preference Shares and holders
of Non-voting Ordinary Shares are entitled to attend the
Extraordinary General Meeting. However, under the terms of the
Company's existing articles of association, only the holders of
the Voting Ordinary Shares are entitled to vote on the Special
Resolution.
At the Extraordinary General Meeting it is necessary for the
Capital Reduction Resolution to be approved by a majority of not
less than 75 per cent of the votes cast. Voting will be on a show
of hands, unless a poll is demanded, in which case those holders
of Voting Ordinary Shares present (in person or by proxy) will be
entitled to one vote for each Voting Ordinary Share held by them.
The full text of the Capital Reduction Resolution is set out in
the notice of the Extraordinary General Meeting set out on pages
60 to 61 of this document.
<PAGE>
11. ACTION TO BE TAKEN
11.1 FORMS OF PROXY
Forms of proxy are enclosed for use at the Court Meetings and the
Extraordinary General Meeting as follows:-
11.1.1 PURPLE, for use at the Court Meeting of the holders of
Voting Ordinary Shares;
11.1.2 PINK, for use at the Court Meeting of the holders of
Non-voting Ordinary Shares;
11.1.3 ORANGE, for use at the Court Meeting of the holders of
Dollar Preference Shares;
11.1.4 YELLOW, for use at the Court Meeting of the holders of
Sterling Preference Shares; and
11.1.5 WHITE, for use at the Extraordinary General Meeting*.
Whether or not you propose to attend the meetings in person, you
are requested to complete and sign the enclosed forms of proxy
which are relevant to you and return them in accordance with the
instructions thereon as soon as possible and, in any event, so as
to be received no later than one hour before the time appointed
for the relevant meeting. In the case of the Court Meetings only,
the relevant form of proxy may, if not previously returned, be
handed to the Chairman of the relevant Court Meeting at the time
of that meeting.
The return of a form of proxy will not preclude you from attending
the relevant meeting and voting in person if you so wish.
11.2 HOLDERS OF NON-VOTING ORDINARY SHARES
If you are a holder of Non-voting Ordinary Shares and you wish to
receive Restricted-voting Euramax US Shares in respect of all or
part of your holding of Euramax Shares you should write to the
Company at Brunel Road, Earlstrees
- ----------------------
* Note: The holders of the Non-voting Ordinary Shares and Preference Shares
are not entitled to vote at the Extraordinary General Meeting.
<PAGE>
Industrial Estate, Corby, Northants NN17 4JW requesting an
allocation of Restricted-voting Euramax US Shares and indicating
the number and classes of Euramax Shares to which that allocation
is to relate. Your request should be received no later than 15
November 1999 (or such later date as the directors of Euramax US
shall permit).
<PAGE>
PART III - SCHEME OF ARRANGEMENT
No: 3162836
IN THE HIGH COURT OF JUSTICE
CHANCERY DIVISION
COMPANIES COURT
IN THE MATTER OF EURAMAX INTERNATIONAL LIMITED
and
IN THE MATTER OF THE COMPANIES ACT 1985
SCHEME OF ARRANGEMENT
(under Section 425 of the Companies Act 1985)
between
EURAMAX INTERNATIONAL LIMITED
and
THE HOLDERS OF THE SCHEME SHARES
(as hereinafter defined)
(a) In this Scheme, unless inconsistent with the subject or context, the
following expressions have the following meanings:
"BUSINESS DAY" a day (other than a Saturday or Sunday) on which banks are
generally open for business in London;
"DOLLAR PREFERENCE SHARES" the 33,925,000 14 per cent redeemable cumulative
preference shares of US$1 each in the capital of Euramax;
"EFFECTIVE DATE" the day on which this Scheme becomes effective in accordance
with clause 4 of this Scheme;
"EURAMAX" Euramax International Limited;
"EURAMAX US" Euramax International, Inc.;
<PAGE>
"EURAMAX US STOCKHOLDERS' AGREEMENT" means the agreement proposed to be made
between Euramax US and the person who will, following the
implementation of the Scheme, be the holders of Euramax US Shares;
"EURAMAX US SHARES" the Voting Euramax US Shares and the Restricted-voting
Euramax US Shares, to be allotted and issued credited as fully paid by
Euramax US pursuant to clause 2(a) of the Scheme;
"HOLDER" includes a person entitled by transmission;
"NON-VOTING ORDINARY SHARES" the 88,480 Non-voting Shares of US$1 each in the
capital of Euramax;
"ORDINARY SHARES" together, the Non-voting Ordinary Shares and the Voting
Ordinary Shares;
"PREFERENCE SHARES" together, the Dollar Preference Shares and the Sterling
Preference Shares;
"RESTRICTED-VOTING EURAMAX US SHARES" shares of Class B restricted voting
Common Stock of Euramax US having a par value of $0.01 per share;
"SCHEME RECORD DATE" the business day immediately preceding the Effective Date;
"SCHEME SHARES" the Voting Ordinary Shares, the Non-voting Ordinary Shares, the
Dollar Preference Shares and the Preference Shares (a) in issue at the
close of business on the last business day prior to the date of the
meeting of holders of the relevant class of shares convened pursuant to
an Order of the High Court of Justice in England and Wales to approve
this Scheme (or, if such meeting or meetings shall be adjourned to a
later date, on the last business day prior to that later date) and (b)
if any, issued thereafter and before the close of business on the date
two business days before the hearing of the petition to sanction this
Scheme in respect of which the original or any subsequent holder
thereof is bound by this Scheme;
"THIS SCHEME" this Scheme in its present form or with or subsequent to any
modification, addition or condition approved or imposed by the Court;
"SHAREHOLDERS' AGREEMENT" means the shareholders agreement dated 25 September
1996 and made between Euramax (1) J D Smith and others (2) and CVC
European Equity Partners L.P., CVC European Equity Partners (Jersey)
L.P., ACP Holding Company and Bank Paribas, Grand Cayman Branch (3);
<PAGE>
"STERLING PREFERENCE SHARES" the 50,000 14 per cent redeemable cumulative
preference shares of L1 each in the capital of Euramax;
"VOTING EURAMAX US SHARES" shares of class A Common Stock of Euramax US having
a par value of $0.01 per share; and
"VOTING ORDINARY SHARES" the 911,520 ordinary shares of US$1 each in the
capital of Euramax.
(b) The authorised and issued share capital of Euramax is $34,925,000 and
L50,000 made up of 911,520 Voting Ordinary Shares of US$1 each, 88,480
Non-voting Ordinary Shares of US$1 each, 33,925,000 Dollar Preference
Shares of US$1 each and 50,000 Sterling Preference Shares of L1 each.
(c) Euramax US was incorporated on 3 September 1999 as a corporation
organised under Delaware law. The total number of shares which Euramax
US has current authority to issue is 60,000,000 shares of common stock,
par value US $ 0.01 per share including 5,000,000 shares of class B
restricted voting common stock, par value US $ 0.01 per share. None of
its shares are currently in issue.
(d) Euramax US has agreed to appear by Counsel on the hearing of the
Petition to sanction this Scheme and to undertake to the Court to be
bound by it and to execute and do or procure to be executed and done
all such documents, acts and things as may be necessary or desirable to
be executed or done by it for the purpose of giving effect to this
Scheme.
THE SCHEME
1. CANCELLATION OF SCHEME SHARES
(a) The share capital of Euramax shall be reduced by cancelling and
extinguishing the Scheme Shares.
(b) Forthwith and contingently upon the said reduction of capital
taking effect:
(i) the share capital of Euramax shall be increased to L1,000
by the creation of such number of ordinary shares of L1
each as shall have an aggregate nominal value equal to
L1,000;
(ii) Euramax shall apply L1,000 of the reserve arising as a
result of such reduction in paying up in full at par the
shares created pursuant to paragraph
<PAGE>
(i) above, which shall be allotted, credited as fully paid up,
to Euramax US and/or its nominees.
2. CONSIDERATION FOR THE CANCELLATION OF THE SCHEME SHARES
(a) In consideration for the cancellation of the Scheme Shares and the
issue of new shares provided for by clause 1 of the Scheme,
Euramax US shall (subject to sub-clause (c) of this clause 2)
allot and issue credited as fully paid to each person who at the
close of business in London on the Scheme Record Date, is the
registered holder of any Scheme Shares the following number of
Euramax US Shares for the Scheme Shares so held:
- 38.58164 Euramax US Shares for every one Ordinary Share
- 0.33583 Euramax US Shares for every Dollar Preference
Share
- 0.33583 Euramax US Shares for every dollar in nominal
value of every Sterling Preference Share as if the nominal
value of the Sterling Preference Share were converted to
dollars at the Rate of Exchange
and so in proportion for any greater number of shares save that
fractional entitlements to Euramax US Shares will be rounded up to
the nearest whole number of Euramax US Shares.
(b) A holder of Non-voting Ordinary Shares may, by written notice to
the Company received by the Company no later than 15 November 1999
or such later date as the board of Euramax US may permit, elect to
receive, in respect of all or part of that holder's holding of
Euramax Shares, Restricted-voting Euramax US Shares as part of its
allocation of Euramax US Shares.
(c) The provisions of this clause 2 shall be subject to any
prohibition or condition imposed by law.
3. CERTIFICATES AND PAYMENT
3.1 No later than 14 days from the Effective Date, Euramax US shall
make all such allotments of and shall issue such Euramax US Shares
as are required to be issued by
<PAGE>
it to give effect to this Scheme and shall deliver documents of
title for the Euramax US Shares so issued to the persons
respectively entitled to them.
3.2 All deliveries of notices and documents of title required to be
made by this Scheme shall be effected by posting the same in
pre-paid envelopes addressed to the persons respectively entitled
to them at their respective addresses as appearing in the Register
of Members of Euramax at the close of business in London on the
Scheme Record Date (or, in the case of joint holders, to the
address of that one of the joint holders whose name stands first
in the said Register of Members in respect of the joint holding)
or to such other addresses (if any) as such persons may
respectively direct in writing.
3.3 Neither Euramax US nor Euramax shall be responsible for any loss
or delay in the transmission of documents of title posted in
accordance with this clause 3.
3.4 As from the Effective Date, each existing certificate representing
a holding of Scheme Shares shall cease to be of value and every
holder of such shares shall be bound on the request of Euramax to
deliver up to Euramax the certificate(s) for such shares for
cancellation.
4. OPERATION OF THIS SCHEME
4.1 This Scheme shall become effective as soon as an office copy of
the Order of the Court sanctioning this Scheme under Section 425
of the Companies Act 1985 and confirming under Section 137 of the
said Act the reduction of capital provided for by this Scheme
shall have been duly delivered to the Registrar of Companies for
registration and registered by him but such office copy shall not
be delivered unless the Company and all the parties to the
Shareholders' Agreement and any persons who, although not
originally parties to the Shareholders Agreement, have agreed to
be bound by its terms have executed the Termination Agreement and
the Euramax US Stockholders' Agreement.
4.2 Unless this Scheme shall become effective on or before 8 December
1999 or such later date, if any, as the Court may allow, this
Scheme shall never become effective.
4.3 Euramax and Euramax US may jointly consent on behalf of all
persons concerned to any modification of or addition to this
Scheme or to any condition which the Court may approve or impose.
<PAGE>
5. COSTS
Each of Euramax and Euramax US shall bear the costs and expenses
incurred by it in connection with the preparation and implementation of
this Scheme.
Dated: 19 October 1999
<PAGE>
APPENDIX I - STRUCTURE DIAGRAMS
1. PRESENT STRUCTURE OF THE EURAMAX GROUP
[GRAPHIC OMITTED]
2. STRUCTURE OF THE EURAMAX GROUP AFTER THE IMPLEMENTATION OF THE
RESTRUCTURING PROPOSALS
[GRAPHIC OMITTED]
<PAGE>
APPENDIX II - COMPARISON OF EURAMAX SHARES AND EURAMAX US SHARES
1. GENERAL
Under the terms of the Scheme, those persons who are on the Record Date the
holders of Euramax Shares (of any class) will receive shares of common
stock of US$0.01 par value in the capital of Euramax US.
This Appendix contains a summary of the principal differences between the
rights attaching to Euramax Shares and the rights which will attach to
the Euramax US Shares after the implementation of the Scheme.
For the purposes of this Appendix II the following additional definitions have
been used:
"ACP" means ACP Holding Company, a company incorporated in the State of
Delaware, United States of America, whose registered office is at 6099
Riverside Drive, Suite 201, Dublin, Ohio, 43017, which was formerly a
shareholder of the Company;
"ACP DIRECTOR" means a director appointed by ACP;
"ACP HOLDER" means a holder of Ordinary Shares which is any of ACP or any
person to whom ACP has transferred Ordinary Shares pursuant to the
Articles;
"CVC DIRECTOR" means a director appointed by CVC Europe;
"CVC EUROPE" means CVC Capital Partners Europe Limited, a company
incorporated in Jersey whose registered office is at PO Box 87, 18
Granville Street, St Helier, Jersey Channel Islands;
"CVCEEP HOLDER" means a holder of Ordinary Shares which is any of CVC European
Equity Partners, LP, CVC Capital Partners Europe Limited and CVC
European Equity Partners (Jersey) LP or any person to whom any such
person has transferred Ordinary Shares pursuant to the Articles;
"CVC NY" means Citicorp Venture Capital Ltd;
"INSTITUTIONAL INVESTORS" means the CVCEEP Holders, the Paribas Holders and the
ACP Holder or any of them;
<PAGE>
"LISTING" means the admission of any of the Company's shares on any
internationally recognised stock exchange including (without
limitation) any recognised investment exchange for the purposes of the
Financial Services Act 1986 or overseas recognised exchange recognised
by HM Treasury or the sale of the Company's shares in an underwritten
public offering registered under the United States Securities Act of
1933, as amended;
"PARIBAS" means Banque Paribas, Grand Cayman Branch;
"PARIBAS HOLDER" means a holder of Ordinary Shares which is any of Paribas
and/or any Permitted Transferee of Paribas;
"PERMITTED TRANSFEREE" means in relation to a holder of shares in Euramax any
of the persons listed in paragraph 6.1(b) of this Appendix; and
"SALE" means the transfer (whether through a single transaction or a series of
transactions) of 662/3 per cent or more of the Ordinary Shares in issue
to a person and any other person:
(i) who in relation to him is a "connected person", as defined in
section 839 of the Income and Taxes Act 1988; or
(ii) with whom he is acting in concert, as defined in The City Code on
Takeovers and Mergers
other than a person who is an original party to the Shareholders' Agreement
as an Institutional Investor or any other person who in relation to
such Institutional Investor is a "connected person", as defined in
section 839 of the Income and Corporation Taxes Act 1988 or otherwise
defined as such in the Articles.
2. COMPARISON OF CLASSES OF SHARES
2.1 SHARE CAPITAL OF EURAMAX
There are four classes of shares in the capital of Euramax as follows:
2.1.1 Dollar Ordinary Shares;
2.1.2 Non-voting Ordinary Shares;
2.1.3 Dollar Preference Shares; and
<PAGE>
2.1.4 Sterling Preference Shares
and each such class has the rights and is subject to the
restrictions (including restrictions on transferability) set
out in the articles of association of Euramax (the
"Articles").
2.2 SHARE CAPITAL OF EURAMAX US FOLLOWING THE SCHEME
The shares in the capital of Euramax US which will be issued
pursuant to the Scheme will comprise shares of Class A voting
common stock, par value $0.01 and, to the extent that
elections are made to receive the same, shares of Class B
Restricted-voting common stock, par value $0.01.
3. EFFECT OF THE SCHEME ON RIGHTS ATTACHED TO PREFERENCE SHARES
3.1 SUMMARY OF SPECIAL RIGHTS ATTACHED TO PREFERENCE SHARES
The Articles confer on the holders of Sterling Preference and
Dollar Preference Shares (the "PREFERENCE SHAREHOLDERS") the
following special rights:-
3.1.1 DIVIDEND
(a) Preference Shareholders are entitled to a fixed
dividend ("PREFERENCE DIVIDEND") of 14 per cent
(excluding any associated tax credit) on the
nominal amount and premium paid on each
Preference Share and on all accumulated and
unpaid Preference Dividends. This dividend
accrues cumulatively on a quarterly basis and
becomes due on 31 March, 30 June, 30 September
and 31 December of each year. If earlier, the
Preference Dividend is payable on redemption of
the Preference Shares. In every case payment of
the Preference Dividend is subject to the terms
of the Senior Credit Agreement and to the
availability of sufficient profits available for
distribution.
(b) For so long as any Preference Shares remain in
issue, neither the Company nor any of its direct
or indirect subsidiaries may:
(i) declare or pay any cash dividend or make any
cash distribution; or
<PAGE>
(ii) redeem, purchase or acquire for cash
(directly or indirectly) any Ordinary Shares
of the Company if either (1) at the time of
or immediately after such redemption,
purchase, acquisition, dividend or
distribution it has failed to pay all
accrued Preference Dividends or (2) the
Company has failed to redeem any Preference
Shares which have become due for redemption
under the Articles (except that the Company
may buy Ordinary Shares from the managers or
their permitted transferees under the
Articles).
(c) Subject to the Senior Credit Agreement, holders
of 66 2/3 per cent of the Preference Shares in
issue ("MAJORITY PREFERENCE SHAREHOLDERS") may
serve notice on the Company requiring the Company
to ensure that its subsidiaries distribute
sufficient profits to the Company to enable it to
pay any accrued and/or unpaid Preference
Dividends.
3.1.2 RETURN OF CAPITAL
(a) In the event of a return of capital on a
liquidation, dissolution, winding-up of the
Company, or otherwise, the assets of the Company
available for distribution amongst the
shareholders shall be applied in paying to the
Preference Shareholders on a basis pro rata to
their holdings of Preference Shares and in
priority to any payment to the holders of any
other class of shares:
(i) an amount equal to the nominal amount and
premium paid on their Preference Shares; and
(ii) an amount equal to any accrued and/or unpaid
Preference Dividend calculated to the date
of return of capital (and payable whether or
not the Company has sufficient profits
available for distribution to pay the
accrued and/or unpaid Preferred Dividend).
(b) The Preference Shares do not confer any further
rights of participation in the profits or assets
of the Company.
<PAGE>
3.1.3 REDEMPTION
(a) The Company shall redeem all the Preference
Shares remaining in issue on 31 December 2007
("FINAL REDEMPTION DATE").
(b) Subject to the terms of the Senior Credit
Agreement, the holders of 66 2/3 per cent of the
Preference Shares (the "MAJORITY PREFERENCE
SHAREHOLDERS") may require the Company to redeem
some or all of the Preference Shares before the
Final Redemption Date by written notice to the
Company served within 28 days of the happening of
either of the following events:-
(i) any Preference Dividend is not paid in full
on the due date (regardless of whether the
Company has sufficient distributable profits
or other requisite funds to make such
payment); or
(ii) the Company fails to make payment in full of
any redemption monies payable in respect of
any Preference Shares which have become due
for redemption (regardless of whether the
Company has sufficient distributable profits
or other requisite funds to make such
payment of redemption monies).
(c) The Majority Preference Shareholders may withdraw
any notice requiring early redemption of
Preference Shares by serving notice to this
effect on the Company before the date for
redemption stated in that notice.
(d) The Company may with the consent in writing of
the Majority Preference Shareholders redeem all
or multiples in aggregate amount of US$500,000 of
the Preference Shares (or if the then outstanding
aggregate amount of the Preference Shares is less
than US$500,000, all the outstanding Preference
Shares) at any time by serving notice on the
Preference Shareholders specifying the number of
Preference Shares to be redeemed and a date
between 14 and 28 days later on which the
redemption is to take place.
<PAGE>
(e) Subject to the terms of the Senior Credit
Agreement the Preference Shares may be redeemed
at any time upon or after a Sale or Listing at
the election of either the Company or the
Majority Preference Shareholders.
(f) On any due date for the redemption of any
Preference Shares the Company shall pay in
respect of each Preference Share falling to be
redeemed:
(i) the nominal amount and the premium paid on
that share; and
(ii) a sum equal to any accrued and/or unpaid
Preference Dividend calculated to the date
of return of capital and payable whether or
not the Company has sufficient profits
available for distribution to pay the
accrued and/or unpaid Preference Dividend
and such amounts shall, subject to the terms of the
Senior Credit Agreement, become a debt due and
payable to the Preference Shareholders, whether
or not the Company has enough profits available
for distribution or other requisite funds to pay
the same.
(g) The Preference Dividend shall cease to accrue in
respect of the Preference Shares on the due date
for redemption of those shares unless on the
presentation of the share certificate (or an
indemnity for any lost share certificate) the
Company fails to pay the monies payable in
respect of such redemption.
3.1.4 TRANSFER
The special provisions relating to transfers of Ordinary
Shares described at paragraph 6.1 below apply equally to
the Preference Shares.
3.1.5 VOTING
Preference Shareholders who hold 5 per cent or more of the
Preference Shares are entitled to receive notice of and
attend and speak at general meetings of the Company, but
may not vote at general meetings unless and for so long
as:
<PAGE>
(a) the Company has not paid the redemption moneys
due on the due date for redemption of any
Preference Shares (regardless of whether the
Company has sufficient distributable earnings and
profits or other requisite funds); or
(b) indebtedness of the Company or any subsidiary
undertaking of the Company amounting (in
aggregate) to at least US$10,000,000 has become
repayable before its specified maturity or is
subject to a demand for repayment.
3.2 EFFECT OF THE SCHEME
The Scheme involves the cancellation of all existing Preference
Shares and the issue to the holders of those shares of Euramax
US Shares which do not carry any special rights to income or
capital. In summary, the rights attaching to the Euramax US
Shares will be as follows:
3.2.1 DIVIDEND
The directors of Euramax US may by resolution of the
board or unanimous written consent declare such
dividends in respect of the Euramax US Shares as they
shall from time to time determine. Further details of
the provisions of Delaware law relating to the
payment of dividends by Delaware corporations are set
out in Appendix IV to this document.
3.2.2 RETURN OF CAPITAL
In the event of a return of capital on a liquidation,
dissolution, winding-up or otherwise of Euramax US, the
Euramax US Shares will share equally in any amounts
available for distribution.
3.2.3 REDEMPTION
The Euramax US Shares will not be designated as redeemable
shares. However, under the laws of Delaware, Euramax US is
permitted to purchase those shares provided that that
purchase will not cause any impairment of its capital.
Further details of the provisions of Delaware law relating
to the
<PAGE>
purchase by Delaware Corporations of their own
shares are set out in Appendix IV to this document.
3.2.4 TRANSFER
Restrictions on the transferability of Euramax US Shares which are
similar to those which currently apply to the Euramax
Shares are incorporated in the certificate of
incorporation of Euramax US.
3.2.5 VOTING
The Euramax US Shares, other than the Restricted-voting
Euramax US Shares which may be issued pursuant to the
Scheme, will confer upon the holders one vote for each
share held. The Restricted-voting Euramax US Shares will
confer upon the holders one vote for every ten shares
held. Restricted-voting Euramax US Shares may be converted
into Voting Euramax US Shares at the option of the holders
thereof in accordance with the amended and restated
certificate of incorporation and by-laws of Euramax US.
4. EFFECT OF THE SCHEME ON THE RIGHTS ATTACHED TO NON-VOTING ORDINARY
SHARES
4.1 SUMMARY OF SPECIAL RIGHTS ATTACHED TO NON-VOTING ORDINARY SHARES
Holders of the Non-voting Ordinary Shares are entitled to receive
notices of general meetings but are not entitled to vote at those
meetings.
Under the Articles, certain shareholders, whose holdings include
Non-voting Ordinary Shares are entitled at any time to convert any
or all of those shares into Voting Ordinary Shares of an
equivalent par value credited with the same premium by
surrendering their share certificates.
4.2 EFFECT OF THE SCHEME
The majority of the Euramax US Shares to be issued pursuant to the
Scheme shall be Voting Euramax US Shares. However, in the event
that any holder of Non-voting Ordinary Shares wishes to receive
Restricted-voting Euramax US Shares in respect of all or any of
its Euramax Shares and such Shareholder notifies the Company of
its wish to receive such shares by no later than 15 November 1999
(or such later date as the
<PAGE>
board of directors of Euramax US shall permit), that Shareholder
may receive Restricted-voting Euramax US Shares in respect of
those Euramax Shares to which such notification relates. The
Restricted-voting Euramax US Shares will be identical in every
other respect with the Voting Euramax US Shares issued to other
Shareholders of Euramax pursuant to the Scheme.
5. SPECIAL RIGHTS CONFERRED ON THE INSTITUTIONAL SHAREHOLDERS
5.1 SUMMARY OF EXISTING SPECIAL RIGHTS OF INSTITUTIONAL SHAREHOLDERS
5.1.1 APPOINTMENT OF DIRECTORS
(a) Under the Articles, CVC Europe (or any successor
thereto as the holding company of the general
partners of CVC European Equity Partners LP and
CVC European Equity Partners (Jersey) LP from
time to time) and ACP are each entitled to
appoint and remove up to two directors to the
board of Euramax , as follows:
(i) if the shareholding of the CVCEEP Holders
and their Permitted Transferees is at least
50 per cent of CVC Europe's initial holding
of Ordinary Shares, CVC Europe may appoint
and remove two directors to and from the
board and if the shareholding of ACP and its
Permitted Transferees is at least 50 per
cent of ACP's initial holding of ordinary
shares ACP may appoint and remove two
directors to and from the board of the
Company;
(ii) if the relevant shareholding is less than 50
per cent of any such initial holding of CVC
Europe or ACP but is at least 10 per cent of
that initial holding, the right conferred
upon CVC Europe or ACP (as the case may be)
shall be to appoint and remove only one
director; and
(iii) if the relevant shareholding is less than
10 per cent of any such initial holding of
ordinary shares, CVC Europe or ACP (as the
case may be) shall have no right to appoint
or remove any directors.
<PAGE>
(b) The directors appointed pursuant to the
provisions described in paragraph (a) above are
not subject to the general appointment and
removal provisions contained in the Articles and
the CVC Holders and ACP Holders have weighted
voting rights enabling them to block any
resolution to remove any such directors appointed
by them.
5.1.2 SPECIAL RIGHTS ON TRANSFER
(a) Shareholders who are also employees of the
Company or any of its subsidiaries or directors
of the Company other than the CVC Directors or
ACP directors may be compelled to offer their
Euramax Shares for sale in the event of them
ceasing to be so employed and ceasing to hold
office as directors of the Company (if relevant).
The relevant provisions state that, within two
months of such a cessation, the ACP director (if
there is one) together with a CVC Europe director
(if there is one) can serve a notice compelling
the departing employee/director to sell all their
shares to the Company or, if the Company cannot
lawfully acquire such shares, to sell such shares
to CVC Europe, ACP and Paribas. The price for any
shares sold under the foregoing provisions will
depend, INTER ALIA, upon:
(i) the reason for such termination of
employment; and
(ii) the duration of employment of the relevant
individual.
(b) Pre-emption provisions also apply to any
Shareholder who wishes to transfer shares
voluntarily other than to a Permitted Transferee
provided that the consent in writing of the
holders of 66 2/3 per cent or more of the
Ordinary Shares is first given. Subject to
that consent, the relevant Euramax Shares must
first be offered to the Institutional Investors
on a basis proportionate to their existing
shareholdings in Euramax.
<PAGE>
5.1.3 PARTICIPATION IN SALES
If any CVCEEP Holder or ACP Holder ("SELLING SHAREHOLDER")
wishes to sell its shares then the Company shall (if such
shares represent less than 50 per cent of the Selling
Shareholder's initial holding of Ordinary Shares) notify
the other holders of Ordinary Shares or (if such shares
represent 50 per cent or more of such initial
shareholding) notify the other Institutional Shareholders
(in either case, the "OTHER SHAREHOLDERS") whereupon the
parties so notified may elect to also sell in the
contemplated sale such number of their Ordinary Shares as
bears the same proportion to their total holding of such
shares as the number of Ordinary Shares to be sold by the
Selling Shareholder bears to its total holding of such
shares.
5.1.4 POWER TO CALL SHAREHOLDERS' MEETINGS
Each of the ACP Directors and the CVC Europe Directors has
individual power to call a shareholders' meeting.
5.1.5 APPOINTMENT OF ALTERNATE DIRECTORS
Each of the ACP Directors and the CVC Europe Directors can
appoint an alternate director without any reference to the
board. Other directors may only appoint a fellow director
or other person approved by a resolution of the board as
their alternate.
5.1.6 CONVERSION OF VOTING ORDINARY SHARES INTO NON-VOTING
ORDINARY SHARES
If ACP or Paribas have a regulatory problem (namely, the
existence of facts or circumstances where a government
regulatory agency believes or ACP or Paribas reasonably
believe there is a substantial risk that the ACP Holder or
the Paribas Holder will not be entitled to hold or
exercise any significant right with respect to the
Ordinary Shares), they may convert all or any of their
Voting Ordinary Shares into the same number of Non-voting
Ordinary Shares of equivalent par value credited with the
same premium ("Voting Shares Conversion Option").
<PAGE>
5.2 EFFECT OF THE SCHEME
Provisions similar, to the extent acceptable under the applicable law,
to those detailed above will, by virtue of the provisions of the
amended and restated certificate of incorporation and by-laws of
Euramax US and the Euramax US Stockholders' Agreement, attach to
the Euramax US Shares to be issued to the Institutional
Shareholders pursuant to the Scheme. However, in view of the fact
that ACP is no longer a Shareholder, the rights which are at
present conferred upon ACP or otherwise arise by virtue of the
holding of Shares by ACP pursuant to the Articles will, following
the implementation of the Scheme, be exercisable by a majority of
the persons who now hold the Euramax Shares originally owned by
ACP (such persons being defined in the by-laws of Euramax US as
"CVC NY Stockholders").
6. EFFECT OF THE SCHEME ON SPECIAL TRANSFER RIGHTS ATTACHED to
ORDINARY SHARES
6.1 SUMMARY OF EXISTING TRANSFER PROVISIONS
(a) The Articles provide that written consent is required of
the holders of 662/3 per cent of the Ordinary Shares (the
"MAJORITY ORDINARY SHAREHOLDERS"), before any Ordinary
Shares can be transferred to any person other than a
Permitted Transferee:
(b) The following are "Permitted Transferees" for the purposes
of the Articles:
(i) in the case of a corporate shareholder, any other
company which is a member of the same group of
companies as that corporate shareholder;
(ii) in the case of a shareholder who holds Ordinary
Shares as nominee or trustee for a limited
partnership or unit trust which is primarily a
vehicle for institutional investors:
- another nominee or trustee for the limited
partnership or trust;
- on a distribution in kind under the relevant
partnership agreement or trust deed, to the
partners of the limited partnership or their
<PAGE>
nominees or the holders of units in the unit
trust or their nominees; or
- to a nominee or trustee for the limited
partnership or unit trust.
(iii) in the case of an Ordinary Shareholder which is
an investment trust which is listed on the London
Stock Exchange, to another investment trust which
is also managed by the manager of the transferor;
(iv) a co-investment scheme (being a scheme under
which certain officers, employees or partners of
an institutional shareholder or of its advisor or
manager are entitled as individuals or through a
body corporate by the other vehicle to acquire
shares which the institutional investor will
otherwise acquire);
(v) in the case of an Ordinary Shareholder which is a
co-investment scheme holding shares through a
body corporate or other vehicle:
- another body corporate or vehicle which
holds or is to hold shares for the
co-investment scheme; or
- the officers, employees or partners entitled
to the Ordinary Shares under the
co-investment scheme; and
(vi) in the case of an Ordinary Shareholder who is an
individual, his family members.
(c) The Ordinary Shareholders also have the right to
participate in sales by any CVCEEP Holder or ACP Holder in
certain circumstances as described in paragraph 5.1.3
above.
6.2 EFFECT OF THE SCHEME
To the extent acceptable under the applicable law, provisions,
similar to those detailed above in paragraph 6.1 will attach to
the Euramax US Shares to be issued pursuant to the Scheme.
However, in view of the fact that ACP is no longer a Shareholder,
the rights which are limited to the holder by ACP of Euramax
Shares will be exerciseable by a majority of the persons who now
hold the Euramax Shares originally owned by ACP.
<PAGE>
APPENDIX III - General Information
1. INFORMATION RELATING TO EURAMAX
1.1 INCORPORATION
The Company was incorporated on 22 February 1996 as a private company
limited by shares under the Companies Act 1985 with registered
number 3162836 under the name Hawkmist Limited. On 27 June 1996,
the name of the Company was changed to Euramax International
Limited. It was re-registered as a public limited company on 19
September 1996 and was re-registered as a private limited company
on 29 September 1999.
1.2 REGISTERED OFFICE
Euramax has its registered office at Brunel Road, Earlstrees Industrial
Estate, Corby, Northants NN17 4SW.
1.3 The directors of Euramax and their functions are as follows:
<TABLE>
<S> <C>
S M Wallis Non-executive Chairman
R M Cashin Non-executive Director
W Ty Comfort Non-executive Director
P E Drack Non-executive Director
J M Silvestri Non-executive Director
J D Smith Chief Executive
R Van Rappard Non-executive Director
</TABLE>
1.4 SHARE CAPITAL
1.4.1 Euramax has an authorised and issued share capital of
$34,925,000 and L50,000 made up as follows:
(a) 911,520 ordinary shares of $1 each;
(b) 88,480 Non-voting Ordinary Shares of $1 each;
(c) 33,925,000 14 per cent redeemable cumulative
preferences shares of $1 each; and
<PAGE>
(d) 50,000 14 per cent redeemable cumulative
preference shares of L1 each.
1.4.2 All the Euramax Shares are in registered form.
1.4.3 Further information regarding the Euramax Shares is set
out in Appendix II.
1.5 DEBT SECURITIES
1.5.1 The Company, Euramax European Holdings plc and Euramax
European Holdings BV (together the "ISSUER") are the joint
issuers of US$135,000,000 in aggregate principal amount of
11 1/4 per cent Senior Subordinated Notes due 2006.
1.5.2 The Notes (which were issued on 10 March 1997 in place of
and by way of an exchange offer for $135,000,000 in
principal amount of 11 1/4 per cent senior subordinated
notes due 2006, previously in issue) (the "INDENTURE") are
constituted by an indenture dated as of 25 September 1996
(as amended) made by the Issuers, Amerimax Holdings, Inc.,
a Delaware corporation, a wholly-owned subsidiary of
Euramax, as Guarantor (the "GUARANTOR"), and the Chase
Manhattan Bank, as Trustee (the "TRUSTEE") ("INDENTURE")
which provides INTER ALIA that:
(a) the aggregate principal amount of the Notes is
$135,000,000;
(b) the Notes bear interest at the rate of 11 1/4 per
cent per annum;
(c) the obligations of the issuers are to be
guaranteed by Amerimax Holdings, Inc, the
sub-holding company of the US subsidiaries of the
Euramax Group;
(d) the Notes are subordinated to all senior debt;
and
(e) the Notes are repayable upon a change of control
and also in the event of a distribution of the
assets of any Issuer or subsidiary of an Issuer
(other than as may be permitted by the terms of
the Notes).
1.5.3 The Notes are not listed in the United States. However,
the Company does maintain a listing for the Notes on the
Luxembourg Stock Exchange, and
<PAGE>
Euramax is subject to the reporting requirements of
Section 15(d) of the Securities and Exchange Act of 1934,
as amended.
1.6 SENIOR CREDIT AGREEMENT
Euramax is a party to the Senior Credit Agreement but has no
indebtedness to the lender under that Agreement.
1.7 OTHER INDEBTEDNESS
At the date of this document there are no amounts owed by the Company
to any person other than amounts owed to the Noteholders under the
terms of the Notes.
2. EURAMAX US
2.1 INCORPORATION
Euramax US was incorporated on 3 September 1999 as a corporation
organised under the laws of the State of Delaware.
2.2 DIRECTORS AND OFFICERS
(a) The directors of Euramax US will be as follows:
S M Wallis
R M Cashin
W Ty Comfort
P E Drack
J M Silvestri
J D Smith
R Van Rappard
(b) The officers of Euramax US will be as follows:
<TABLE>
<S> <C>
F T Geist Executive Vice President
M B Lewis Group Vice President
R S Vansant Vice President, Secretary and Chief Financial
Officer
</TABLE>
2.3 REGISTERED OFFICE
Euramax US has its registered office at 1013 Centre Road, City of
Wilmington, County of New Castle, Delaware 19805 and its
registered agent at this address is The Corporation Service
Company.
<PAGE>
2.4 SHARE CAPITAL
Euramax US will have an authorised share capital of US$600,000 divided
into 55,000,000 shares of Class A voting common stock with a
par value of US$0.01 per share and 5,000,000 shares of Class B
restricted voting common stock with a par value of US$0.01 per
share.
3. US SECURITIES LAWS
The Court approval of the Scheme will be relied upon by the U.S. Securities
and Exchange Commission in its decision not to recommend any
enforcement action based on the exemption under Section 3(a)(10) of the
U.S. Securities Act of 1933, as amended.
4. DOCUMENTS AVAILABLE FOR INSPECTION
Copies of the following documents will be available for inspection at
the offices of Dibb Lupton Alsop, 125 London Wall, London EC2Y 5AE
during normal business hours on any week day (Saturdays, Sundays and
public holidays excepted) from the date of this document up to and
including the date of the Court Meetings and the Extraordinary General
Meeting and at each of those meetings:
(i) the draft amended and restated certificate of incorporation and
by-laws of Euramax US;
(ii) the Shareholders' Agreement;
(iii) the draft Termination Agreement;
(iv) the draft Euramax US Stockholders' Agreement; and
(v) the new articles of association of the Company proposed to be
adopted pursuant to the Capital Reduction Resolution.
Dated: 19 October 1999
<PAGE>
APPENDIX IV - COMPARISON OF LAWS
1. GENERAL
THE FOLLOWING IS A SUMMARY OF CERTAIN DIFFERENCES BETWEEN THE LAWS OF
ENGLAND AND WALES AND THE LAWS OF THE STATE OF DELAWARE, US, WHICH
AFFECT SHAREHOLDERS OF COMPANIES INCORPORATED IN THOSE JURISDICTIONS.
IT IS OF A GENERAL NATURE ONLY AND IS NOT INTENDED TO BE EXHAUSTIVE.
SHAREHOLDERS ARE RECOMMENDED TO SEEK THEIR OWN ADVICE FROM A LEGAL
ADVISOR QUALIFIED TO ACT IN THE RELEVANT TERRITORY IN RELATION TO ANY
ASPECTS OF THE LAWS OF ENGLAND AND WALES AND/OR THE STATE OF DELAWARE
WHICH ARE OF PARTICULAR RELEVANCE TO THEM.
2. DIVIDENDS
A private company incorporated in England and Wales may declare dividends
out of its accumulated, realised profits, so far as not previously
distributed or capitalised, less its accumulated, realised losses, so
far as not previously written off in a reduction or reorganisation of
capital. In contrast, a Delaware corporation is able to pay dividends
out of its "surplus" which, for this purpose, is defined as the amount
by which its net assets exceed its share capital. A Delaware
corporation may also declare dividends based on its net profits for the
fiscal year in which the dividend is declared and/or for the preceding
fiscal year.
3. MAINTENANCE OF CAPITAL
Companies incorporated in England and Wales are subject to stringent rules which
are designed to maintain their capital. As a consequence of these
rules, in general, purchases by companies of their own shares may only
be made out of distributable profits or (to a limited extent) the
proceeds of a fresh issue of shares. Payment for shares repurchased
must be made in cash. The rules for maintenance of capital apply
equally to a company's share premium account subject to limited
exceptions, INTER ALIA, permitting the share premium account to be used
to pay up fully paid bonus shares. Shares which have been repurchased
by the company must immediately be cancelled.
In contrast, a Delaware corporation may purchase its own shares for cash
or other property and, provided that its capital is not impaired, out
of its income or capital and there is no requirement that shares so
purchased must be cancelled. Once purchased, such shares may be
retained by the company and be dealt with by the company as it may
determine.
<PAGE>
4. FINANCIAL ASSISTANCE
The laws of England and Wales impose a general prohibition on the provision
by companies of financial assistance for the acquisition of their
shares or shares in their holding companies. The prohibition applies
both to financial assistance given before or at the same time as an
acquisition of shares and to financial assistance given after the
acquisition for the purpose of reducing or discharging a liability
incurred for the purposes of the acquisition. There are a number of
limited exceptions to the general prohibition on a company giving
financial assistance. In general, these are available to private
companies only. They include a so-called "whitewash procedure" which
enables financial assistance to be given by a private company,
provided, INTER ALIA, that the directors make a declaration of solvency
and the assistance is sanctioned by a special resolution of the members
of the company (unless it is a wholly owned subsidiary). There is no
general restriction on a Delaware Corporation giving financial
assistance in connection with an acquisition of its shares.
5. DUTIES OF DIRECTORS
The directors of a company incorporated in England and Wales are subject to
a number of common law and statutory duties including:
(i) a duty to exercise reasonable care and skill in carrying out
their functions;
(ii) fiduciary duties owed by them to the company; and
(iii) statutory duties (including a duty to disclose any interest that
they may have in contracts with the company).
Statute also requires shareholder approval to be obtained for certain
substantial property transactions between a company and its directors.
Delaware law imposes a duty on directors to exercise care in making business
decisions affecting the company and a duty of loyalty which comprises a
duty to protect the interest of the company, a duty to refrain from
conduct which would injure the company and its shareholders and a duty
of disclosure. As is the case under the laws of England and Wales,
directors must avoid any conflict between their duties as directors and
self interest.
<PAGE>
6. TRANSFER OF SHARES
The laws of England and Wales require the execution by a transferor of
shares of a stock transfer form, which must be presented to the board
duly stamped with the appropriate stamp duty and approved prior to the
name of the transferor being entered into the register of members of
the company, at which time legal title to the shares passes. Transfers
of shares in Delaware corporations may be readily effected by endorsing
over the certificate for those shares. The corporation then has a duty
to issue a new certificate to the person entitled thereto, cancel the
old certificate and record the transaction in its books.
7. SHAREHOLDER MEETINGS
The laws of England and Wales and those of Delaware require the holding of
an annual general meeting in each calendar year. However, a private
company incorporated in England and Wales may pass an elective
resolution entitling it to dispense with the holding of annual general
meetings until any member gives notice to the company requiring an
annual general meeting to be held.
8. ACCOUNTING INFORMATION
The laws of England and Wales and the laws of Delaware each require annual
accounts to be filed by companies. However, the financial statements of
Delaware companies whose securities are not publicly traded are not
generally available to the public.
Dated: 19 October 1999
<PAGE>
NOTICES OF MEETINGS
EURAMAX INTERNATIONAL LIMITED
NOTICE OF COURT MEETING OF HOLDERS OF VOTING ORDINARY SHARES
No. 3162836
IN THE HIGH COURT OF JUSTICE
CHANCERY DIVISION
COMPANIES COURT
Mr Registrar James
IN THE MATTER OF EURAMAX INTERNATIONAL LIMITED
and
IN THE MATTER OF THE COMPANIES ACT 1985
NOTICE IS HEREBY GIVEN that by an Order dated 24 September 1999 made in the
above matters the Court has directed a Meeting to be convened of the holders of
the Voting Ordinary Shares (as defined in the Scheme of Arrangement hereinafter
referred to) in Euramax International Limited (hereinafter called the "Company")
for the purpose of considering and, if thought fit, approving (with or without
modification) a Scheme of Arrangement proposed to be made between the Company
and the holders of the Scheme Shares (as defined in the said Scheme of
Arrangement) and that such meeting will be held at the offices of Dibb Lupton
Alsop, Solicitors of 125 London Wall London EC2Y 5AE on 16 November 1999 at 9:30
am, or such later time or date as the Court so directs, at which place and time
the said shareholders are requested to attend.
A copy of the said Scheme of Arrangement and a copy of the explanatory statement
required to be furnished pursuant to Section 426 of the above mentioned Act are
incorporated in the document of which this Notice forms part.
The holders of Voting Ordinary Shares may vote in person at the said meeting or
they may appoint another person, whether a member of the Company or not, as
their proxy to attend and vote in their stead. A purple form of proxy for use at
the meeting is enclosed with this Notice.
In the case of joint holders, the vote of the senior who tenders a vote, whether
in person or by proxy, will be accepted to the exclusion of the votes of the
other joint holders and, for this purpose, seniority
<PAGE>
will be determined by the order in which the names stand in the register of
members of the Company in respect of the joint holding.
It is requested that forms appointing proxies be left at or sent by post or by
facsimile transmission to the Company at Brunel Road, Earlstrees Industrial
Estate, Corby, Northants NN17 4JW marked for the attention of Paul Williams not
less than one hour before the time appointed for the said meeting, but if forms
are not so lodged they may be handed to the Chairman at the meeting.
Holders of Voting Ordinary Shares who have returned forms of proxy are not
thereby precluded from attending the Meeting and voting in person if they so
wish.
By the said Order the Court has appointed Mr Stuart Wallis or failing him Mr
William Ty Comfort or failing him Mr John David Smith to act as Chairman of the
said meeting and has directed the Chairman to report the results thereof to the
Court.
The said Scheme of Arrangement will be subject to the subsequent approval of the
Court.
Dated: 19 October 1999
Dibb Lupton Alsop
125 London Wall
London EC2Y 5AE
Solicitors to the Company
<PAGE>
EURAMAX INTERNATIONAL LIMITED
NOTICE OF COURT MEETING OF HOLDERS OF NON-VOTING ORDINARY SHARES
No. 3162836
IN THE HIGH COURT OF JUSTICE
CHANCERY DIVISION
COMPANIES COURT
Mr Registrar James
IN THE MATTER OF EURAMAX INTERNATIONAL LIMITED
and
IN THE MATTER OF THE COMPANIES ACT 1985
NOTICE IS HEREBY GIVEN that by an Order dated 24 September 1999 made in the
above matters the Court has directed a Meeting to be convened of the holders of
the Non-voting Ordinary Shares (as defined in the Scheme of Arrangement
hereinafter referred to) in Euramax International Limited (hereinafter called
the "Company") for the purpose of considering and, if thought fit, approving
(with or without modification) a Scheme of Arrangement proposed to be made
between the Company and the holders of the Scheme Shares (as defined in the said
Scheme of Arrangement) and that such meeting will be held at the offices of Dibb
Lupton Alsop, Solicitors of 125 London Wall London EC2Y 5AE on 16 November 1999
at 9.45 am, or (so soon thereafter as the preceding Court Meeting of the holders
of Voting Ordinary Shares convened on the same date shall have been concluded or
adjourned) such later time or date as the Court so directs, at which place and
time the said shareholders are requested to attend.
A copy of the said Scheme of Arrangement and a copy of the explanatory statement
required to be furnished pursuant to Section 426 of the above mentioned Act are
incorporated in the document of which this Notice forms part.
The holders of Non-voting Ordinary Shares may vote in person at the said meeting
or they may appoint another person, whether a member of the Company or not, as
their proxy to attend and vote in their stead. A pink form of proxy for use at
the meeting is enclosed with this Notice.
In the case of joint holders, the vote of the senior who tenders a vote, whether
in person or by proxy, will be accepted to the exclusion of the votes of the
other joint holders and, for this purpose, seniority
<PAGE>
will be determined by the order in which the names stand in the register of
members of the Company in respect of the joint holding.
It is requested that forms appointing proxies be left at or sent by post or by
facsimile transmission to the Company at Brunel Road, Earlstrees Industrial
Estate, Corby, Northants NN17 4JW marked for the attention of Paul Williams not
less than one hour before the time appointed for the said meeting, but if forms
are not so lodged they may be handed to the Chairman at the meeting.
Holders of Non-voting Ordinary Shares who have returned forms of proxy are not
thereby precluded from attending the Meeting and voting in person if they so
wish.
By the said Order the Court has appointed Mr Stuart Wallis or failing him Mr
William Ty Comfort or failing him Mr John David Smith to act as Chairman of the
said meeting and has directed the Chairman to report the results thereof to the
Court.
The said Scheme of Arrangement will be subject to the subsequent approval of the
Court.
Dated: 19 October 1999
Dibb Lupton Alsop
125 London Wall
London EC2Y 5AE
Solicitors to the Company
<PAGE>
EURAMAX INTERNATIONAL LIMITED
NOTICE OF COURT MEETING OF HOLDERS OF DOLLAR PREFERENCE SHARES
No. 3162836
IN THE HIGH COURT OF JUSTICE
CHANCERY DIVISION
COMPANIES COURT
Mr Registrar James
IN THE MATTER OF EURAMAX INTERNATIONAL LIMITED
and
IN THE MATTER OF THE COMPANIES ACT 1985
NOTICE IS HEREBY GIVEN that by an Order dated 24 September 1999 made in the
above matters the Court has directed a Meeting to be convened of the holders of
the Dollar Preference Shares (as defined in the Scheme of Arrangement
hereinafter referred to) in Euramax International Limited (hereinafter called
the "Company") for the purpose of considering and, if thought fit, approving
(with or without modification) a Scheme of Arrangement proposed to be made
between the Company and the holders of the Scheme Shares (as defined in the said
Scheme of Arrangement) and that such meeting will be held at the offices of Dibb
Lupton Alsop, Solicitors of 125 London Wall, EC2Y 5AE on 16 November 1999 at
10:00 am, (or so soon thereafter as the preceding Court Meeting of the holders
of Non-voting Ordinary Shares convened for the same day shall have been
concluded or adjourned) or such later time or date as the Court so directs, at
which place and time the said shareholders are requested to attend.
A copy of the said Scheme of Arrangement and a copy of the explanatory statement
required to be furnished pursuant to Section 426 of the above mentioned Act are
incorporated in the document of which this Notice forms part.
The holders of Dollar Preference Shares may vote in person at the said meeting
or they may appoint another person, whether a member of the Company or not, as
their proxy to attend and vote in their stead. An orange form of proxy for use
at the meeting is enclosed with this Notice.
In the case of joint holders, the vote of the senior who tenders a vote, whether
in person or by proxy, will be accepted to the exclusion of the votes of the
other joint holders and, for this purpose, seniority
<PAGE>
will be determined by the order in which the names stand in the register of
members of the Company in respect of the joint holding.
It is requested that forms appointing proxies be left at or sent by post or by
facsimile transmission to the Company at Brunel Road, Earlstrees Industrial
Estate, Corby, Northants NN17 4JW marked for the attention of Paul Williams not
less than one hour before the time appointed for the said meeting, but if forms
are not so lodged they may be handed to the Chairman at the meeting.
Holders of Dollar Preference Shares who have returned forms of proxy are not
thereby precluded from attending the Meeting and voting in person if they so
wish.
By the said Order the Court has appointed Mr Stuart Wallis or failing him Mr
William Ty Comfort or failing him Mr John David Smith to act as Chairman of the
said meeting and has directed the Chairman to report the results thereof to the
Court.
The said Scheme of Arrangement will be subject to the subsequent approval of the
Court.
Dated: 19 October 1999
Dibb Lupton Alsop
125 London Wall
London EC2Y 5AE
Solicitors to the Company
<PAGE>
EURAMAX INTERNATIONAL LIMITED
NOTICE OF COURT MEETING OF HOLDERS OF STERLING PREFERENCE SHARES
No. 3162836
IN THE HIGH COURT OF JUSTICE
CHANCERY DIVISION
COMPANIES COURT
Mr Registrar James
IN THE MATTER OF EURAMAX INTERNATIONAL LIMITED
and
IN THE MATTER OF THE COMPANIES ACT 1985
NOTICE IS HEREBY GIVEN that by an Order dated 24 September 1999 made in the
above matters the Court has directed a Meeting to be convened of the holders of
the Sterling Preference Shares (as defined in the Scheme of Arrangement
hereinafter referred to) in Euramax International Limited (hereinafter called
the "Company") for the purpose of considering and, if thought fit, approving
(with or without modification) a Scheme of Arrangement proposed to be made
between the Company and the holders of the Scheme Shares (as defined in the said
Scheme of Arrangement) and that such meeting will be held at the offices of Dibb
Lupton Alsop, Solicitors of 125 London Wall London EC2Y 5AE on 16 November 1999
at 10:15 am, (or so soon thereafter as the preceding Court Meeting of the
holders of Dollar Preference Shares convened for the same day shall have been
concluded or adjourned) or such later time or date as the Court so directs, at
which place and time the said shareholders are requested to attend.
A copy of the said Scheme of Arrangement and a copy of the explanatory statement
required to be furnished pursuant to Section 426 of the above mentioned Act are
incorporated in the document of which this Notice forms part.
The holders of Sterling Preference Shares may vote in person at the said meeting
or they may appoint another person, whether a member of the Company or not, as
their proxy to attend and vote in their stead. A yellow form of proxy for use at
the meeting is enclosed with this Notice.
In the case of joint holders, the vote of the senior who tenders a vote, whether
in person or by proxy, will be accepted to the exclusion of the votes of the
other joint holders and, for this purpose, seniority
<PAGE>
will be determined by the order in which the names stand in the register of
members of the Company in respect of the joint holding.
It is requested that forms appointing proxies be left at or sent by post or by
facsimile transmission to the Company at Brunel Road, Earlstrees Industrial
Estate, Corby, Northants NN17 4JW marked for the attention of Paul Williams not
less than one hour before the time appointed for the said meeting, but if forms
are not so lodged they may be handed to the Chairman at the meeting.
Holders of Sterling Preference Shares who have returned forms of proxy are not
thereby precluded from attending the Meeting and voting in person if they so
wish.
By the said Order the Court has appointed Mr Stuart Wallis or failing him Mr
William Ty Comfort or failing him Mr John David Smith to act as Chairman of the
said meeting and has directed the Chairman to report the results thereof to the
Court.
The said Scheme of Arrangement will be subject to the subsequent approval of the
Court.
Dated: 19 October 1999
Dibb Lupton Alsop
125 London Wall
London EC2Y 5AE
Solicitors to the Company
<PAGE>
EURAMAX INTERNATIONAL LIMITED
NOTICE OF EXTRAORDINARY GENERAL MEETING
Notice is hereby given that an Extraordinary General Meeting of Euramax
International Limited (the "Company") will be held at the offices of Dibb Lupton
Alsop, Solicitors of 125 London Wall London EC2Y 5AE on 16 November 1999 at
10:30 am (or as soon thereafter as the Court Meeting of the holders of Sterling
Preference Shares, (as defined in the Scheme of Arrangement hereinafter referred
to) convened by direction of the High Court of Justice for the same place and
date shall have concluded or been adjourned) for the purpose of considering and,
if thought fit, passing the following resolution which will be proposed as a
special resolution.
SPECIAL RESOLUTION
THAT:
1. the Scheme of Arrangement dated 19 October 1999 (the "Scheme") proposed
to be made between the Company and the holders of the Scheme Shares (as
defined in the Scheme), a print of which has been produced to this
Meeting and signed for the purpose of identification by the Chairman of
the Meeting, be approved and the directors of the Company be and they
are hereby authorised to take or concur in all steps necessary for
carrying the same into effect;
2. for the purpose of giving effect to the Scheme:
2.1 the capital of the Company be reduced by the cancellation of the
Scheme Shares (as defined in the Scheme) and forthwith and
contingently upon such reduction of capital taking effect, the
capital of the Company be increased to L1,000 by the creation of
such number of new ordinary shares of L1 each as shall have an
aggregate nominal value equal to L1,000 ("New Shares"); and
2.2 of the reserve arising upon the said reduction of capital, L1,000
be applied in paying up in full at par the New Shares, which shall
thereupon be allotted and issued, credited as fully paid up to
Euramax International, Inc.;
3. the Directors be and are hereby authorised for the purposes of Section
80 of the Companies Act 1985 to effect the allotment of the New Shares
provided that (i) the maximum nominal amount of shares which may be
allotted hereunder is L1,000, (ii) this authority shall expire on 31
December 1999 and (iii) this authority shall be without prejudice to
any other authority
<PAGE>
under the said Section 80 previously granted and in force on the date
on which this resolution is passed; and
4. subject to and forthwith upon the Scheme becoming effective the new
articles of association of the Company in the form produced to the
meeting and initialled by the Chairman for the purposes of
identification be adopted as the articles of association of the Company
in substitution for and to the exclusion of all existing articles of
association of the Company.
Dated: 19 October 1999
By order of the board
R. Scott Vansant
Secretary
REGISTERED OFFICE:
Brunel Road
Earlstrees Industrial Estate
Corby
Northants NN17 4JW
Notes:
1. A member entitled to attend and vote at the Meeting convened by this
Notice above is entitled to appoint a proxy to attend and, on a poll,
vote in his place. A proxy need not be a member of the Company.
2. To be valid, forms of proxy must be left at or sent by post or by
facsimile transmission to the Company at Brunel Road, Earlstrees
Industrial Estate, Corby, Northants NN17 4JW marked for the attention
of Paul Williams not less than one hour before the time appointed for
holding the Meeting. A white form of proxy is enclosed.
3. Completion of a form of proxy does not prevent a holder of Voting
Ordinary Shares from attending and voting at the Meeting should he so
wish. THE HOLDERS OF NON-VOTING ORDINARY SHARES AND THOSE HOLDERS OF
PREFERENCE SHARES WHO HOLD AT LEAST 5 PER CENT OF THE PREFERENCE SHARES
FOR THE TIME BEING IN ISSUE ("SUBSTANTIAL PREFERENCE SHAREHOLDERS") MAY
ATTEND THE MEETING BUT MAY NOT VOTE THEREAT, WHETHER BY PROXY OR
OTHERWISE. SUBSTANTIAL PREFERENCE SHAREHOLDERS MAY ALSO SPEAK AT THE
MEETING SHOULD THEY WISH TO DO SO.
<TABLE> <S> <C>
<PAGE>
<ARTICLE> 5
<CIK> 0001026743
<NAME> EURAMAX INTERNATIONAL LIMITED
<MULTIPLIER> 1,000
<S> <C>
<PERIOD-TYPE> 9-MOS
<FISCAL-YEAR-END> DEC-31-1999
<PERIOD-START> DEC-26-1998
<PERIOD-END> SEP-25-1999
<CASH> 13,872
<SECURITIES> 0
<RECEIVABLES> 94,575
<ALLOWANCES> 3,367
<INVENTORY> 78,629
<CURRENT-ASSETS> 189,743
<PP&E> 145,940
<DEPRECIATION> 27,632
<TOTAL-ASSETS> 410,475
<CURRENT-LIABILITIES> 108,546
<BONDS> 135,000
0
51,377
<COMMON> 1,000
<OTHER-SE> 11,276
<TOTAL-LIABILITY-AND-EQUITY> 410,475
<SALES> 441,308
<TOTAL-REVENUES> 441,308
<CGS> 354,468
<TOTAL-COSTS> 354,468
<OTHER-EXPENSES> 51,775
<LOSS-PROVISION> 355
<INTEREST-EXPENSE> 16,318
<INCOME-PRETAX> 18,392
<INCOME-TAX> 7,813
<INCOME-CONTINUING> 10,579
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 10,579
<EPS-BASIC> 0
<EPS-DILUTED> 0
</TABLE>
