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PROSPECTUS SUPPLEMENT
(To Prospectus Dated October 21, 1994)
WAXMAN INDUSTRIES, INC.
$12,000,000 Principal Amount of 12.25% Fixed Rate
Senior Secured Notes due September 1, 1998
$7,500,000 Principal Amount of Floating Rate
Senior Secured Notes due September 1, 1998
950,000 Common Stock Purchase Warrants
950,000 Shares of Common Stock
Introduction
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This Prospectus Supplement is a supplement to the Prospectus dated October 21,
1994 (the "Prospectus"), relating to the public offering of (i) $12,000,000
principal amount of 12.25% Fixed Rate Senior Secured Notes due September 1,
1998 (the "Fixed Rate Notes") of Waxman Industries, Inc. (the "Company"),
(ii) $7,500,000 principal amount of Floating Rate Senior Secured Notes due
September 1, 1998 (the "Floating Rate Notes") of the Company, (iii) 950,000
Common Stock Purchase Warrants (the "Warrants") and (iv) 950,000 shares of the
Company's Common Stock, $.01 par value, issuable upon exercise of the Warrants.
The Fixed Rate Notes and Floating Rate Notes are collectively referred to
herein as the "Notes." This Prospectus Supplement is part of, and should be
read in conjunction with, the Prospectus.
Decision to Sell Consumer Products Group Subsidiary
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On August 29, 1995, the Company announced that it has decided to sell the
business conducted by its Waxman Consumer Products Group Inc. ("Consumer
Products") subsidiary in order to enhance the Company's capital structure
and allow the Company to focus on its fast growing Barnett Inc. ("Barnett")
mail order and telemarketing business. Barnett, which has historically been
the Company's fastest growing and most profitable operation, has averaged 15%
annual revenue growth for each of the past five years. Upon completion of a
sale of Consumer Products, Barnett will represent approximately 70% of the
Company's consolidated revenues. Consumer Products markets and distributes its
products to mass merchandisers and large D-I-Y retailers while Barnett's focus
is directed primarily to repair and remodeling contractors and independent
retailers. The Company anticipates that the proceeds from any such sale will be
used, in part, to retire the Notes thereby eliminating the mandatory sinking
fund requirements relating to these notes which are scheduled to commence in
September 1996. The Company retained Merrill Lynch & Co. as its financial
advisor in connection with the sale.
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In furtherance of such decision, the Company has entered into a letter of
intent which contemplates the sale of 75% of the Consumer Products business,
together with certain supporting operations, to a group consisting of HIG
Capital Management of Miami, Florida along with certain members of Consumer
Products existing management team for an aggregate purchase price of $50
million. The sale contemplated by such letter of intent, however, is subject
to certain contingencies including a financing contingency. The Company
intends to continue pursuing the sale of Consumer Products in the event that
this transaction is not completed.
In connection with such sale, the Company intends to repay the portion of its
revolving credit facility and term loan which relates to Consumer Products and
refinance the remaining balances using proceeds from a new secured credit
facility. The Company expects that any such new secured credit facility will
improve liquidity through greater working capital availability.
CFO Change
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The Company also announced on August 29, 1995 that it intends to name Andrea
Luiga to the position of Vice President, Finance and Chief Financial Officer.
Ms. Luiga will replace Neal R. Restivo, Senior Vice President, Finance and
Chief Financial Officer who submitted his resignation effective September 30,
1995 to pursue another opportunity. Ms. Luiga is currently Vice President,
Controller of Barnett and has been with Barnett since 1987.
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The date of this Prospectus Supplement is September 5, 1995
