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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K/A
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934
Date of report (Date of earliest event reported) March 15, 1999
ZARING NATIONAL CORPORATION
---------------------------
(Exact name of registrant as specified in its charter)
Ohio 333-22679 31-1506058
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(State or other jurisdiction of (Commission (IRS Employer
incorporation) File Number) Identification No.)
11300 Cornell Park Drive, Suite 500, Cincinnati, Ohio 45242
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(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code (513) 489-8849
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(Former name or former address, if changed since last report)
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The undersigned Registrant amends Item 7 of its current report on Form 8-K dated
March 15, 1999, filed with the Securities and Exchange Commission on March 30,
1999 to read in its entirety as follows:
Item 7: Financial Statements and Exhibits
(a) Not applicable.
(b) Pro forma financial information .
Zaring National Corporation Pro Forma Consolidated Balance
Sheet as of December 31, 1998 (unaudited)
Zaring National Corporation Pro Forma Consolidated
Statement of Operations for the three months ended March
31, 1999 (unaudited)
Zaring National Corporation Pro Forma Consolidated
Statement of Operations for the year ended December 31,
1998 (unaudited)
Zaring National Corporation Notes to Pro Forma
Consolidated Financial Statements (unaudited)
(c) Exhibits.
10.20 - Amended and Restated Securities Purchase Agreement
by and among Zaring National Corporation, HomeMax, Inc.,
HomeMax Operating Properties, L.L.C. and American Homestar
Corporation dated as of March 15, 1999.
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ZARING NATIONAL CORPORATION
PRO FORMA CONSOLIDATED FINANCIAL STATEMENTS
The accompanying Pro Forma Balance Sheet and Statements of Operations have been
derived from the historical financial statements of Zaring National Corporation
(the Company) and adjusts such information to give effect to the transaction
detailed below:
Effective March 15, 1999, after assignment of certain obligations and other
preclosing activities, the Company sold a 25% interest in HomeMax, Inc.
(HomeMax) to American Homestar Corporation (American Homestar) for a note
receivable of approximately $4.4 million. The note receivable is to be paid in
three annual installments commencing March 15, 2000 and accrues interest payable
quarterly, at prime. The amended and restated securities purchase agreement
includes the following terms:
- - American Homestar issued a $4.0 million subordinated convertible loan to
HomeMax, Inc. concurrent with the sale. This subordinated loan accrues
interest at 6%, payable quarterly, while the principal is payable on June
15, 2002 unless accelerated as a result of available cash flow of HomeMax,
as defined. The subordinated loan is convertible into an additional 25% of
HomeMax at the discretion of American Homestar.
- - The Company retained a $4.0 million receivable due from HomeMax which
accrues interest at 6.0% and is payable quarterly. The $4.0 million of
principal is payable on June 15, 2002, unless accelerated as a result of
available cash flow of HomeMax, as defined.
- - The Company agreed to pay up to $3.0 million in connection with certain
annual lease obligations.
- - Subsequent to the sale, model home inventory will be replaced with
inventory of American Homestar. Costs of replacement, if any, will be
provided by the Company and American Homestar in amounts up to $1.0 million
and $0.5 million, respectively.
- - Subsequent to the sale, the Company and American Homestar agreed to provide
up to $50,000 per quarter to support advertising and promotional
initiatives.
- - American Homestar agreed to provide certain management and consulting
services for up to three years for compensation of at least $0.5 million
plus an additional fee of up to $750,000 based upon quarterly losses during
the first four quarters following closing.
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- - American Homestar and the Company each agreed to provide working capital
loans of up to $0.5 million to HomeMax which will accrue interest at prime.
- - The Company has the option to sell and American Homestar has an option to
buy 50% of HomeMax within three years at a defined priced.
- - The Company received an option, which expires on March 15, 2004, to
purchase up to 150,000 shares of common stock of American Homestar with an
exercise price of $18.00 per share.
The Pro Forma Balance Sheet as of December 31, 1998, assumes the transaction
occurred on December 31, 1998.
The Pro Forma Statements of Operations for the year ended December 31, 1998 and
the three months ended March 31, 1999 assumes the transaction occurred January
1, 1998 and January 1, 1999, respectively.
The pro forma financial information is not necessarily indicative of the results
that would have occurred had the transaction been in effect on the date and for
the period indicated or which may result in the future. In the opinion of
management, all adjustments have been made to fairly present the pro forma
information. The pro forma information should be read in conjunction with the
notes thereto.
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<TABLE>
<CAPTION>
ZARING NATIONAL CORPORATION
PRO FORMA CONSOLIDATED BALANCE SHEET
AS OF DECEMBER 31, 1998
(AMOUNTS IN THOUSANDS, EXCEPT SHARE INFORMATION)
(UNAUDITED)
PRO FORMA ENTRIES PRO FORMA
DECEMBER 31, ---------------------------- DECEMBER 31,
1998 DR. CR. 1998
------------ ---------- ------------ ------------
ASSETS
<S> <C> <C> <C> <C>
CASH AND CASH EQUIVALENTS $ 15,699 $4,000 (1) $ - $ 19,699
RECEIVABLES:
Related parties 82 - - 82
Notes 325 4,411 (2) - 4,736
Manufactured housing rebates and other 885 - - 885
INVENTORIES:
Luxury site-built homes 32,365 - - 32,365
Entry level homes 6,405 - - 6,405
Retail distribution manufactured homes 2,746 - - 2,746
Model homes 21,046 - - 21,046
Land, development costs and finished lots 50,280 - - 50,280
PROPERTY AND EQUIPMENT, net 8,108 - - 8,108
HOMEMAX SALES VILLAGES, net 12,336 - - 12,336
INVESTMENTS IN AND ADVANCES TO
UNCONSOLIDATED JOINT VENTURES 201 - - 201
FUTURE TAX BENEFIT 6,053 - - 6,053
CASH SURRENDER VALUE OF LIFE INSURANCE
AND OTHER ASSETS 5,566 - - 5,566
GOODWILL, net 259 - - 259
------------ ---------- ------------ ------------
$162,356 $8,411 $ - $170,767
============ ========== ============ ============
LIABILITIES AND SHAREHOLDER'S EQUITY
LIABILITIES:
Revolving credit facility $ 44,500 $ - $ - $ 44,500
Manufactured housing floor plan facility 7,082 - - 7,082
Term notes payable 41,446 - - 41,446
Accounts payable 14,766 - - 14,766
Other accrued liabilities 6,829 - - 6,829
Customer deposits 3,296 - - 3,296
Deferred gain - - 1,167 (2) 1,167
------------ ---------- ------------ ------------
Total liabilities 117,919 - 1,167 119,086
SUBORDINATED LOAN - - 4,000 (1) 4,000
MINORITY INTEREST IN CONSOLIDATED ENTITIES 1,654 - 3,244 (2) 4,898
------------ ---------- ------------ ------------
COMMITMENTS AND CONTINGENCIES
SHAREHOLDERS' EQUITY:
Preferred shares, no par value, 2,000,000 shares - - - -
authorized, none issued or outstanding
Common shares, no par value, 18,000,000 shares 24,957 - - 24,957
authorized, 4,591,488 issued and
outstanding
Additional paid-in capital 4,286 - - 4,286
Retained earnings 13,540 - - 13,540
------------ ---------- ------------ ------------
Total shareholders' equity 42,783 - - 42,783
------------ ---------- ------------ ------------
$162,356 $ - $8,411 $170,767
============ ========== ============ ============
</TABLE>
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<TABLE>
<CAPTION>
ZARING NATIONAL CORPORATION
PRO FORMA CONSOLIDATED STATEMENT OF OPERATIONS
FOR THE YEAR ENDED DECEMBER 31, 1998
(AMOUNTS IN THOUSANDS, EXCEPT SHARE INFORMATION)
(UNAUDITED)
PRO FORMA ENTRIES PRO FORMA
DECEMBER 31, ----------------------------- DECEMBER 31,
1998 DR. CR. 1998
----------- ----------- ----------- -----------
NET REVENUES:
<S> <C> <C> <C> <C>
Luxury site-built homes $ 243,907 $ -- $ -- $ 243,907
Entry level homes 11,569 -- -- 11,569
Retail distribution manufactured homes 12,411 -- -- 12,411
Financial services 311 -- -- 311
----------- ----------- ----------- -----------
Total net revenues 268,198 -- -- 268,198
EXPENSES:
Cost of sales luxury site-built homes 201,754 -- -- 201,754
Cost of sales entry level homes 9,697 -- -- 9,697
Cost of sales retail distribution manufactured homes 10,724 -- -- 10,724
Financial services 253 -- -- 253
Asset impairment 5,674 -- -- 5,674
Interest 5,940 240(3) 341(4) 5,839
Selling 19,899 -- -- 19,899
General and administrative 24,834 1,250(5) -- 26,084
----------- ----------- ----------- -----------
Total expenses 278,775 1,490 341 279,924
----------- ----------- ----------- -----------
Operating income (loss) (10,577) 1,490 341 (11,726)
----------- ----------- ----------- -----------
OTHER INCOME (EXPENSE):
Income from unconsolidated joint ventures 242 -- -- 242
Other, net 52 -- -- 52
----------- ----------- ----------- -----------
294 -- -- 294
----------- ----------- ----------- -----------
Income (loss) before minority interest and
provision for income taxes (10,283) 1,490 341 (11,432)
MINORITY INTEREST IN CONSOLIDATED ENTITIES (141) -- 4,120(6) 3,979
----------- ----------- ----------- -----------
Income (loss) before provision (benefit)
for income taxes (10,424) 1,490 4,461 (7,453)
PROVISION (BENEFIT) FOR INCOME TAXES (4,058) 6,077(7) -- 2,019
----------- ----------- ----------- -----------
Net income (loss) $ (6,366) $ 7,567 $ 4,461 $ (9,472)
=========== =========== =========== ===========
BASIC AND DILUTED EARNINGS (LOSS) PER COMMON SHARE $ (1.34) $ (2.00)
=========== ===========
WEIGHTED AVERAGE SHARES OUTSTANDING 4,737,220 4,737,220
=========== ===========
</TABLE>
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<TABLE>
<CAPTION>
ZARING NATIONAL CORPORATION
PRO FORMA CONSOLIDATED STATEMENT OF OPERATIONS
FOR THE THREE MONTHS ENDED MARCH 31, 1999
(AMOUNTS IN THOUSANDS, EXCEPT SHARE INFORMATION)
(UNAUDITED)
PRO FORMA ENTRIES PRO FORMA
MARCH 31, ------------------------------- MARCH 31,
1999 DR. CR. 1999
----------- ----------- ----------- -----------
NET REVENUES:
<S> <C> <C> <C> <C>
Luxury site-built homes $39,308 $ -- $ -- $39,308
Entry level homes 4,915 -- -- 4,915
Retail distribution manufactured homes 4,573 -- -- 4,573
Financial services 315 -- -- 315
----------- ----------- ----------- -----------
Total net revenues 49,111 -- -- 49,111
EXPENSES:
Cost of sales luxury site-built homes 32,021 -- -- 32,021
Cost of sales entry level homes 4,593 -- -- 4,593
Cost of sales retail distribution manufactured homes 3,894 -- -- 3,894
Financial services 300 -- -- 300
Interest 1,642 60(3) 85(4) 1,617
Selling 4,347 -- -- 4,347
General and administrative 6,374 500(5) -- 6,874
----------- ----------- ----------- -----------
Total expenses 53,171 560 85 53,646
----------- ----------- ----------- -----------
Operating income (loss) (4,060) 560 85 (4,535)
OTHER INCOME (EXPENSE):
Income from unconsolidated joint ventures -- -- -- --
Other, net 54 -- -- 54
----------- ----------- ----------- -----------
Income (loss) before minority interest and
provision for income taxes (4,006) 560 85 (4,481)
MINORITY INTEREST IN CONSOLIDATED ENTITIES 160 -- 458(6) 618
----------- ----------- ----------- -----------
Income (loss) before provision (benefit)
for income taxes (3,846) 560 543 (3,863)
PROVISION (BENEFIT) FOR INCOME TAXES (1,515) 546(7) -- (969)
----------- ----------- ----------- -----------
Net income (loss) $(2,331) $1,106 $543 $(2,894)
=========== =========== =========== ===========
BASIC AND DILUTED EARNINGS (LOSS) PER COMMON SHARE $(.51) $(.63)
=========== ===========
WEIGHTED AVERAGE SHARES OUTSTANDING 4,591,488 4,591,488
=========== ===========
</TABLE>
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NOTES TO PRO FORMA CONSOLIDATED FINANCIAL STATEMENTS
(1) To record the $4.0 million subordinated loan by American Homestar
(2) To record the $4.411 million note receivable due to the Company from
American Homestar, American Homestar's minority interest in HomeMax and
the deferred gain associated with the transaction
(3) To record interest expense on the $4.0 million subordinated loan to
American Homestar
(4) To record interest income on the $4.411 million note receivable from
American Homestar
(5) To record management fees to be paid to American Homestar
(6) To record minority interest associated with HomeMax losses
(7) To record elimination of the tax benefit associated with HomeMax losses
given it would no longer be included in the Company's consolidated
return
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SIGNATURES
Pursuant to the requirements of the Securities Exchange of 1934, the registrant
has duly caused this report to be signed on its behalf by the undersigned
hereunto duly authorized.
Date: May 27, 1999
ZARING NATIONAL CORPORATION
By: /s/ Ronald G. Gratz
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Ronald G. Gratz
Chief Financial Officer,
Secretary and Treasurer
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