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EXHIBIT 7.1
ANCHOR HOLDINGS, INC. AND SUBSIDIARY, MOLL INDUSTRIES, INC.
CONSOLIDATED PRO FORMA BALANCE SHEETS
(IN THOUSANDS, EXCEPT PER SHARE INFORMATION, AND UNAUDITED)
<TABLE>
<CAPTION>
SEPTEMBER 30,
2000
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ASSETS
CURRENT ASSETS:
Cash and cash equivalents................................................ $ 55
Accounts receivable, net of reserves for doubtful accounts of
$2,156 and $2,194, respectively....................................... 59,488
Inventories, net......................................................... 24,432
Deposits on tooling...................................................... 14,699
Other current assets..................................................... 2,667
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Total current assets............................................. 101,341
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PROPERTY, PLANT AND EQUIPMENT:
Land..................................................................... 2,382
Buildings................................................................ 35,223
Machinery and equipment.................................................. 99,607
Less: accumulated depreciation........................................... (40,940)
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Property, plant and equipment, net.................................... 96,272
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GOODWILL, NET.............................................................. 26,816
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INTANGIBLE AND OTHER ASSETS, NET........................................... 14,431
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Total assets..................................................... $ 238,860
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LIABILITIES AND DEFICIT
CURRENT LIABILITIES:
Current portion of long-term obligations................................. $ 9,335
Short-term borrowings.................................................... 977
Accounts payable......................................................... 38,082
Accrued interest......................................................... 6,617
Accrued liabilities...................................................... 16,757
Deferred tooling revenue................................................. 11,305
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Total current liabilities........................................ 83,073
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LONG-TERM OBLIGATIONS, NET OF CURRENT PORTION.............................. 177,600
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DEFERRED INCOME TAXES...................................................... 1,997
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OTHER NON-CURRENT LIABILITIES.............................................. 6,846
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COMMITMENTS AND CONTINGENCIES.............................................. --
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DEFICIT:
Common stock ($.01 par value, 2,000 shares authorized, 1,551
shares issued and outstanding)........................................ 15
Additional paid in capital............................................... 2,372
Accumulated deficit...................................................... (23,371)
Accumulated other comprehensive income................................... (9,672)
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Total deficit.................................................... (30,656)
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Total liabilities and deficit.................................... $ 238,860
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</TABLE>
The accompanying notes are an integral part of this consolidated
pro forma balance sheet.
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ANCHOR HOLDINGS, INC. AND SUBSIDIARY, MOLL INDUSTRIES, INC.
CONSOLIDATED PRO FORMA STATEMENTS OF OPERATIONS
(IN THOUSANDS, EXCEPT PER SHARE INFORMATION, AND UNAUDITED)
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<CAPTION>
THIRTY-NINE
WEEKS
YEAR ENDED ENDED
DECEMBER 31, SEPTEMBER 30,
1999 2000
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NET SALES.......................................................... $ 343,492 $ 230,678
COST OF SALES...................................................... 301,473 203,362
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Gross profit..................................................... 42,019 27,316
SELLING, GENERAL AND ADMINISTRATIVE
EXPENSES...................................................... 31,754 22,835
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Operating income................................................. 10,265 4,481
INTEREST EXPENSE, NET.............................................. 22,563 16,974
OTHER (INCOME) EXPENSE............................................. (1,226) (43)
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INCOME (LOSS) BEFORE INCOME TAXES.................................. (11,072) (12,450)
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PROVISION FOR INCOME TAXES 133 (2,695)
NET INCOME (LOSS).................................................. $ (11,205) $ (9,755)
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EARNINGS (LOSS) PER SHARE.......................................... $ (7.22) $ (6.29)
============ ============
WEIGHTED AVERAGE NUMBER OF SHARES OUTSTANDING ..................... 1,551 1,551
============ ============
</TABLE>
The accompanying notes are an integral part of these consolidated
pro forma financial statements.
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ANCHOR HOLDINGS, INC. AND SUBSIDIARY, MOLL INDUSTRIES, INC.
NOTES TO CONSOLIDATED PRO FORMA FINANCIAL STATEMENTS
(IN THOUSANDS AND UNAUDITED)
1. BASIS OF PRESENTATION
The consolidated pro forma financial statements of the Company give effect
to the sale of the Cosmetics division, which was effective November 14, 2000. In
connection with the sale of the Cosmetics division, the Company retired certain
of its 11.75% Senior Notes due 2004 ("Senior Notes") and paid down a portion of
its bank debt. Both transactions are reflected in these pro forma statements. In
addition, the statements reflect the sale of the Germany division that has been
reported earlier.
2. SALE OF COSMETICS
The Company sold all of the assets of its Cosmetics division, including all
of the capital stock of Cepillos De Matamoros S.A. de C.V., along with certain
other assets and liabilities located in the United States and France. The sale
was for cash of $67 million, subject to adjustment for the level of working
capital at the time of closing. Subject to changes in estimates management has
made for the working capital adjustment and expenses associated with the
transaction, the Company expects to recognize a gain on the transaction of
approximately $28 million. The transaction is expected to generate approximately
$63.5 million in cash that will be used to reduce leverage.
The pro forma statements reflect the elimination of the 1999 and 2000
activity and balances of the Cosmetics division. While limited services were
provided by corporate, the division operated primarily on a stand-alone basis
with limited activity with other divisions of the Company. The Company has not
assumed any reductions in corporate expenses due to the sale of the division,
except for interest (see Note 3). Summarized results of the division are:
<TABLE>
<CAPTION>
Thirty-nine
Weeks
Year Ended Ended
December 31, September 30,
1999 2000
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Net Sales..................................................................... $ 41,496 $ 33,284
Operating Income.............................................................. 4,476 5,269
Net income.................................................................... 4,309 5,330
</TABLE>
Summarized balance sheet information of the Cosmetics division as of
September 30, 2000 is:
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Net Working Capital..................................................... $ 6,181
Fixed Assets, net....................................................... 15,482
Total Assets............................................................ 38,755
Total Liabilities....................................................... 4,016
Net Equity.............................................................. 34,739
</TABLE>
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3. DEBT RETIREMENT
The Company used the proceeds of the sale of the Cosmetics division in part
to retire a portion of its Senior Notes. The Company tendered for the $50
million of outstanding Senior Notes at a discount of 15%. A total of $41.4
million of the Senior Notes were tendered resulting in a payout of $35.1 million
plus accrued interest of $0.6 million. The retirement of the Senior Notes is
expected to result in a gain of approximately $4.5 million. The Company had
tendered for and retired another $50 million of the Senior Notes earlier in
2000, resulting in a gain of $5.1 million. The Company used bank debt to fund
the initial tender.
The Company used the remaining proceeds to pay down its existing bank debt.
The Company retired $11.4 million of its term debt. The Company anticipates that
the net reduction in the revolving debt balance will be approximately $16
million after all transaction fees are paid.
The accompanying pro forma statements of operations reflect a net reduction
in interest expense of $8.4 million and $6.3 for 1999 and 2000, respectively as
a result of the reduction in debt. Additionally, a reduction of debt of $69.0
million is reflected in the pro forma balance sheet.
