<PAGE> 1
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-K/A
(Mark one)
[X] ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(D) OF THE
SECURITIES EXCHANGE ACT OF 1934
For the fiscal year ended December 31, 1997
OR
[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(D) OF THE
SECURITIES EXCHANGE ACT OF 1934
ANCHOR GLASS CONTAINER CORPORATION
------------------------------------------------------
(Exact name of registrant as specified in its charter)
Delaware 59-3417812
-------- ----------
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
One Anchor Plaza, 4343 Anchor Plaza Parkway, Tampa, FL 33634-7513
- ------------------------------------------------------ ----------
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code 813-884-0000
------------
Securities registered pursuant to Section 12(b) of the Act:
None
----
Securities registered pursuant to section 12(g) of the Act:
Class A Common Stock, par value $0.10 per share
-----------------------------------------------
Series A 10% Cumulative Convertible Preferred Stock, par value $0.10 per share
------------------------------------------------------------------------------
(Title of class)
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. Yes [ ] No [X].
Indicate by check mark if disclosure of delinquent filers pursuant to
Item 405 of Regulation S-K is not contained herein, and will not be contained,
to the best of the registrant's knowledge, in definitive proxy or information
statements incorporated by reference in Part III of this Form 10-K or any
amendment to this Form 10-K. [X]
Aggregate market value of voting and non-voting stock
held by non-affiliates: At this time, there is no market
for any of the stock. See Part II, Item 5.
Number of shares outstanding of each class of common
stock at March 27, 1998: Class A - 490,898 shares,
Class B - 902,615 and Class C - none.
DOCUMENTS INCORPORATED BY REFERENCE
None
<PAGE> 2
ITEM 6. SELECTED FINANCIAL DATA.
SELECTED HISTORICAL FINANCIAL DATA
The following table sets forth certain historical financial information
of the Company. The selected financial data for the period from February 5, 1997
to December 31, 1997 has been derived from the Company's audited financial
statements included elsewhere in the Form 10-K. The following information should
be read in conjunction with the Company's financial statements and "Management's
Discussion and Analysis of Financial Condition and Results of Operations".
<TABLE>
<CAPTION>
PERIOD FROM
FEBRUARY 5, 1997 TO
DECEMBER 31, 1997(1)
----------------------
(dollars in thousands,
except per share)
<S> <C>
STATEMENT OF OPERATIONS DATA:
Net sales $ 569,441
Cost of products sold 523,709
Selling and administrative expenses 25,120
---------
Income from operations 20,612
Other expense, net (2,602)
Interest expense (18,281)
---------
Loss before extraordinary item (271)
Extraordinary item(2) (11,200)
---------
Net loss $ (11,471)
=========
Preferred stock dividends $ (11,302)
=========
Loss before extraordinary item applicable to common stock $ (11,573)
=========
Loss applicable to common stock $ (22,773)
=========
Basic net loss per share applicable to common stock before
extraordinary item $ (3.62)
=========
Basic net loss per share applicable to common stock $ (7.11)
=========
BALANCE SHEET DATA (at end of period):
Accounts receivable $ 56,940
Inventories 120,123
Total assets 614,730
Total debt 163,793
Total stockholders' equity 73,074
OTHER FINANCIAL DATA:
Net cash provided by operating activities $ 25,483
Net cash used in investing activities (257,255)
Net cash provided by financing activities 232,832
Depreciation and amortization 51,132
Capital expenditures 41,634
</TABLE>
- ----------------------------------------------------
1) The Anchor Acquisition was consummated on February 5, 1997.
2) Extraordinary item in the period from February 5, 1997 to December 31, 1997
resulted from the write-off of financing costs related to debt
extinguished.
<PAGE> 3
ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA.
<TABLE>
<CAPTION>
Page No.
--------
<S> <C>
Index to Financial Statements of New Anchor F-1
Report of Independent Public Accountants F-2
Statement of Operations -
Period from February 5, 1997 to December 31, 1997 F-3
Balance Sheet-
December 31, 1997 F-4
Statement of Cash Flows -
Period from February 5, 1997 to December 31, 1997 F-6
Statement of Stockholders' Equity -
Period from February 5, 1997 to December 31, 1997 F-8
Notes to Financial Statements F-9
Index to Financial Information of Old Anchor H-1
Report of Independent Public Accountants H-2
Consolidated Statements of Operations -
Period from January 1, 1997 to February 4, 1997 and
Years Ended December 31, 1996 and 1995 H-3
Consolidated Balance Sheets-
February 4, 1997 and December 31, 1996 H-4
Consolidated Statements of Cash Flows -
Period from January 1, 1997 to February 4, 1997 and
Years Ended December 31, 1996 and 1995 H-6
Consolidated Statements of Stockholder's
Equity (Deficiency in Assets)-
Period from January 1, 1997 to February 4, 1997 and
Years Ended December 31, 1996 and 1995 H-8
Notes to Consolidated Financial Statements H-9
</TABLE>
<PAGE> 4
PART IV
ITEM 14. EXHIBITS, FINANCIAL STATEMENTS, SCHEDULES AND REPORTS ON FORM 8-K.
(a) Financial Statements, Schedules and Exhibits
1. Financial Statements. The Financial Statements of New Anchor and
Old Anchor and the Reports of Independent Public Accountants are
included beginning at page F-1 and beginning at page H-1 of this
Form 10-K. See the index to financial statements in Item 8.
2. Financial Statement Schedules. The following Financial Statement
Schedules are filed as part of this Form 10-K and should be read
in conjunction with the Consolidated Financial Statements of Old
Anchor and the Financial Statements of Anchor.
SCHEDULE II
ANCHOR RESOLUTION CORP.
VALUATION AND QUALIFYING ACCOUNTS
PERIOD FROM JANUARY 1, 1997 TO FEBRUARY 4, 1997
AND YEARS ENDED DECEMBER 31, 1996 AND 1995
(DOLLARS IN THOUSANDS)
<TABLE>
<CAPTION>
Column A Column B Column C Column D Column E Column F
- -------- -------- -------- -------- -------- --------
Additions
----------------------------
Balance at Charged to Charged to
beginning of costs and other Balance at end
Description period expenses accounts Deductions of period
- ----------- ------------ ----------- ---------- ---------- --------------
<S> <C> <C> <C> <C> <C>
Interim Period 1997
Allowance for doubtful accounts $1,503 $127 $1,630
Year ended December 31, 1996
Allowance for doubtful accounts $1,826 $1,126 - $1,449(A) $1,503
Year ended December 31, 1995
Allowance for doubtful accounts $3,447 $656 - $2,277(A) $1,826
</TABLE>
- ----------------------
(A) Accounts written off
SCHEDULE II
ANCHOR GLASS CONTAINER CORPORATION
VALUATION AND QUALIFYING ACCOUNTS
PERIOD FROM FEBRUARY 5, 1997 TO DECEMBER 31, 1997
(DOLLARS IN THOUSANDS)
<TABLE>
<CAPTION>
Column A Column B Column C Column D Column E Column F
- -------- -------- -------- -------- -------- --------
Additions
----------------------------
Balance at Charged to Charged Balance at
beginning of costs and to other end
Description period expenses accounts Deductions of period
- ----------- ------------ ----------- --------- ---------- -----------
<S> <C> <C> <C> <C> <C>
Period from February 5, 1997 to
December 31, 1997
Allowance for doubtful accounts $1,630 $ 375 $ 360(B) $340(A) $2,025
</TABLE>
- ----------------------------------
(A) Accounts written off
(B) Amount recognized as part of Anchor Acquisition
Schedules not listed above have been omitted because they are not
applicable or are not required or the information required to be set forth
therein is included in the financial statements or notes thereto.
<PAGE> 5
3. Exhibits
<TABLE>
<CAPTION>
EXHIBIT
NUMBER ITEM
--------- ----
<S> <C>
2.1* Asset Purchase Agreement dated as of December 18, 1996 among Anchor Glass Container Corporation, now known as
Anchor Resolution Corp. ("Old Anchor"), Consumers Packaging, Inc. and Owens-Brockway Glass Container, Inc.
2.2* Amendment to Asset Purchase Agreement (the "Asset Purchase Agreement") dated as of February 5, 1997 by and among
Old Anchor, Consumers Packaging, Inc. and Owens-Brockway Glass Container, Inc.
2.3* Order of United States Bankruptcy Court for the District of Delaware approving (i) the Asset Purchase Agreement
and (ii) the assumption and assignment of certain related executory contracts
2.4* Order of United States Bankruptcy Court for the District of Delaware approving the Amendment to the Asset
Purchase Agreement
2.5* Memorandum of Understanding dated February 5, 1997 among Old Anchor, Consumers Packaging, Inc. and the Company
3.1* Amended and Restated Certificate of Incorporation of the Company
3.2* Bylaws of the Company
3.5* Certificate of Designation of Series A 10% Cumulative Convertible Preferred Stock
3.6* Certificate of Designation of Series B 8% Cumulative Convertible Preferred Stock
4.1* Indenture dated as of April 17, 1997 among the Company, Consumers U.S. and The Bank of New York, as trustee
4.2* Form of Initial Notes (included in Exhibit 4.1)
4.3* Form of Exchange Notes (included in Exhibit 4.1)
4.4* Security Agreement dated as of April 17, 1997 among the Company, Bankers Trust Company, as agent under the
Revolving Credit Agreement
4.5* Assignment of Security Agreement dated as of April 17, 1997 among the Company, Bankers Trust Company, as assignor,
and The Bank of New York, as assignee and as trustee under the Indenture
4.6* Pledge Agreement dated as of April 17, 1997 among Consumers U.S. and The Bank of New York, as trustee under the
Indenture
4.7* Intercreditor Agreement dated as of February 5, 1997 among The Bank of New York, as Note Agent, and BT Commercial
Corporation, as Credit and Shared Collateral Agent
4.8* Amendment No. 1 to the Intercreditor Agreement, dated as of April 17, 1997 among The Bank of New York as Note
Agent, and BT Commercial Corporation, as Credit and Shared Collateral Agent
4.9* Registration Rights Agreement dated as of April 17, 1997 among the Company, Consumers U.S., BT Securities
Corporation and TD Securities (USA) Inc.
4.10** Indenture dated as of March 16, 1998 among the Company, Consumers U.S. and The Bank of New York, as trustee
4.11** Form of Initial Notes (included in Exhibit 4.10)
4.12** Form of Exchange Notes (included in Exhibit 4.10)
4.13** Registration Rights Agreement dated as of March 16, 1998 among the Company, TD Securities and BT Alex. Brown
10.1* Credit Agreement (the "Credit Agreement") dated as of February 5, 1997 among the Company, Bankers Trust Company,
as Issuing Bank, BT Commercial Corporation, as Agent and Co-Syndication Agent, PNC Bank, National Association, as
Co-Syndication Agent and Issuing Bank, and the various financial institutions party thereto
10.2* First Amendment to the Credit Agreement dated as of March 11, 1997 among the Company, Bankers Trust Company, BT
Commercial Corporation, and PNC Bank, National Association
</TABLE>
<PAGE> 6
<TABLE>
<CAPTION>
EXHIBIT
NUMBER ITEM
--------- ----
<S> <C>
10.3* Second Amendment to the Credit Agreement dated as of April 9, 1997 among the Company,
Bankers Trust Company, BT Commercial Corporation, and PNC Bank, National Association
10.4* Third Amendment and Waiver to the Credit Agreement dated as of May 23, 1997 among the
Association, and the various financial institutions party to the Credit Agreement
10.5* Fourth Amendment to the Credit Agreement dated as of September 15, 1997 among the
Association and the various financial institutions part to the Credit Agreement
10.6* Assignment of Security Interest in U.S. Trademarks and Patents dated February 5, 1997
by the Company to BT Commercial Corporation, as Collateral Agent under the Credit
Agreement
10.7* Assignment of Security Interest in U.S. Copyrights dated February 5, 1997 by the Company
to BT Commercial Corporation, as Collateral Agent under the Credit Agreement
10.8* Guaranty dated February 5, 1997, by Consumers U.S. in favor of BT Commercial Corporation
and the other financial institutions party to the Credit Agreement Plan
10.9* Termination Agreement dated February 3, 1997 by and between Consumers Packaging Inc.,
the Company and the Pension Benefit Guaranty Corporation
10.10* Release Agreement among Old Anchor, the Company, the Official Committee of Unsecured
Creditors of Anchor Glass Container Corporation ("Old Anchor") and Vitro, Sociedad Anonima
10.11* Agreement (the "Vitro Agreement") dated as of December 18, 1996 between Old Anchor and
Consumers Packaging, Inc.
10.12* First Amendment to the Vitro Agreement dated as of February 4, 1997 among Vitro, Sociedad
Anonima, Consumers Packaging, Inc., on behalf of itself, and Consumers Packaging, Inc.
on behalf of the Company
10.13* Waiver Agreement dated as of February 5, 1997 by and between Old Anchor and Consumers
Packaging, Inc.
10.14* Assignment and Assumption Agreement dated as of February 5, 1997 by and between Consumers
Packaging, Inc.
10.15* Assignment and Assumption Agreement dated as of February 5, 1997 by and between Consumers
Packaging, Inc. and the Company relating to certain employee Benefit plans
10.16* Assignment and Assumption Agreement dated as of February 5, 1997 between Consumers
Packaging, Inc. and the Company relating to certain commitment letters
10.17* Bill of Sale, Assignment and Assumption Agreement dated as of February 5, 1997 by and
between Old Anchor and the Company
10.18* Assignment of Patent Property and Design Property from Old Anchor to the Company
10.19* Trademark Assignment from Old Anchor to the Company
10.20* Foreign Trademark Assignment from Old Anchor to the Company
10.21* Copyright Assignment from Old Anchor to the Company
10.22* Agreement dated as of February 5, 1997 between the Travelers Indemnity Company and its
Affiliates, including The Aetna Casualty and Surety Company and their Predecessors,
and the Company
10.23* Allocation Agreement dated as of February 5, 1997 between Consumers Packaging, Inc. and
Owens-Brockway Glass Container, Inc.
10.24* Supply Agreement dated as of February 5, 1997 by and between the Company and Owens-Brockway
Glass Container, Inc.
</TABLE>
<PAGE> 7
<TABLE>
<CAPTION>
EXHIBIT
NUMBER ITEM
--------- ----
<S> <C>
10.25* Transition Agreement dated as of February 5, 1997 between Consumers Packaging, Inc., the Company and
Owens-Brockway Glass Container, Inc.
10.26+* Technical Assistance and License Agreement executed December 18, 1996 by Owens-Brockway Glass Container, Inc. and
Consumers Packaging, Inc.
10.27* Assurance Agreement (the "Assurance Agreement") dated as of February 5, 1997 among Owens-Brockway Glass Container,
Inc., Consumers Packaging, Inc., the Company, BT Commercial Corporation, Bankers Trust Company and The Bank of New
York
10.28* Letter agreement relating to Assurance Agreement dated April 17, 1997 addressed to Owens-Brockway Glass Container,
Inc. and signed by Bankers Trust Company and The Bank of New York
10.29* Intercompany Agreement dated as of April 17, 1997 among G&G Investments, Inc., Glenshaw Glass Company, Inc.,
Hillsboro Glass Company, I.M.T.E.C. Enterprises, Inc., Consumers Packaging, Inc., Consumers International, Inc.,
Consumers U.S., the Company, BT Securities Corporation and The Bank of New York, as trustee under the Indenture
10.30* Management Agreement dated as of February 5, 1997 by and between the Company and G&G Investments, Inc.
10.31* Anchor Glass Container Corporation/Key Executive Employee Retention Plan
10.32* Lease Agreement - Anchor Place at Fountain Square (the "Lease Agreement") dated March 31, 1988, by and between Old
Anchor and Fountain Associates I Ltd. Relating to the Company's headquarters in Tampa, Florida
10.33* First Amendment to Lease Agreement effective as of June 16, 1992, by and between Fountain Associates I Ltd. and
Old Anchor
10.34* Second Amendment to Lease Agreement effective as of September 30, 1993, by and between Fountain Associates I Ltd.
and Old Anchor
10.35* Third Amendment to Lease Agreement effective as of February 22, 1995, by and between Fountain Associates I Ltd.
and Old Anchor
10.36* Agreement dated as of March 31, 1996 by and between Fountain Associates I Ltd. Citicorp Leasing, Inc. and Old Anchor
10.37* Amended and Restated Agreement effective as of September 12, 1996, by and between Fountain Associates I Ltd.,
Citicorp Leasing Inc. and Old Anchor
10.38* Sixth Amendment to Lease and Second Amendment to Option Agreement dated as of February 5, 1997, by and between
Fountain Associates I Ltd., Citicorp Leasing, Inc. and Old Anchor
10.39* Building Option Agreement dated March 31, 1988, by and between Fountain Associates I, Ltd. and Old Anchor
10.40* First Amendment to Building Option Agreement effective as of June 16, 1992, by and between Fountain Associates I.
Ltd. and Old Anchor
10.41+* Supply Agreement effective as of June 17, 1996 between The Stroh Brewery Company and the Company
10.42 Supply Agreement between Bacardi International Limited and the Company (Withdrawn upon the request of the
registrant, the Commission consenting thereto)
10.43* Warrant Agreement dated as of February 5, 1997 between the Company and Bankers Trust Company
10.44* Form of Warrant issued pursuant to the Warrant Agreement
</TABLE>
<PAGE> 8
<TABLE>
<CAPTION>
EXHIBIT
NUMBER ITEM
--------- ----
<S> <C>
10.45 Rebate Agreement dated as of January 1, 1996 between Bacardi
International Limited and the Company (Withdrawn upon the
request of the registrant, the Commission consenting thereto)
10.46** Fifth Amendment to the Credit Agreement dated as of January 16,
1998 among the Association and the various financial
institutions part to the Credit Agreement
10.47** Sixth Amendment to the Credit Agreement dated as of March 11,
1998 among the Association and the various financial
institutions part to the Credit Agreement
11.1** Statement re: computation of per share earnings
12.1** Statement re: computation of ratio of earnings to fixed charges
for the period from February 5, 1997 to December 31, 1997
12.2** Statement re: computation of ratio of earning to fixed charges
for the years ended December 31, 1993, 1994, 1995 and 1996 and
the period from January 1, 1997 to February 4, 1997
21.1* List of subsidiaries of the Company
23.1*** Consent of Independent Public Accountants
27.1*** Financial Data Schedule of the Company (for SEC use only)
</TABLE>
- ------------------
+ Portions hereof have been omitted and filed separately with the Commission
pursuant to a request for confidential treatment in accordance with Rule
406 of Regulation C.
* - Previously filed as an exhibit to the Company's Registration Statement on
Form S-4 (Reg. No. 333-31363) originally filed with the Securities and
Exchange Commission on July 16, 1997 and incorporated herein by
reference.
** - Previously filed as an exhibit to the Company's Annual Report on Form
10-K for the fiscal year ended December 31, 1997 and incorporated herein
by reference.
*** - Filed herewith.
(b) Reports on Form 8-K
None
<PAGE> 9
INDEX TO FINANCIAL INFORMATION FOR ANCHOR
<TABLE>
<CAPTION>
Page No.
--------
<S> <C>
Financial Statements of New Anchor:
Report of Independent Public Accountants F-2
Statement of Operations -
Period from February 5, 1997 to December 31, 1997 F-3
Balance Sheet-
December 31, 1997 F-4
Statement of Cash Flows -
Period from February 5, 1997 to December 31, 1997 F-6
Statement of Stockholders' Equity -
Period from February 5, 1997 to December 31, 1997 F-8
Notes to Financial Statements F-9
</TABLE>
F-1
<PAGE> 10
REPORT OF INDEPENDENT PUBLIC ACCOUNTANTS
To Anchor Glass Container Corporation:
We have audited the accompanying balance sheet of Anchor Glass Container
Corporation (a Delaware corporation) as of December 31, 1997, and the related
statements of operations, stockholders' equity and cash flows for the period
from February 5, 1997 through December 31, 1997. These financial statements are
the responsibility of the Company's management. Our responsibility is to express
an opinion on these financial statements based on our audit.
We conducted our audit in accordance with generally accepted auditing standards.
Those standards require that we plan and perform the audit to obtain reasonable
assurance about whether the financial statements are free of material
misstatement. An audit includes examining, on a test basis, evidence supporting
the amounts and disclosures in the financial statements. An audit also includes
assessing the accounting principles used and significant estimates made by
management, as well as evaluating the overall financial statement presentation.
We believe that our audit provides a reasonable basis for our opinion.
In our opinion, the financial statements referred to above present fairly, in
all material respects, the financial position of Anchor Glass Container
Corporation as of December 31, 1997, and the results of its operations and its
cash flows for the period from February 5, 1997 to December 31, 1997, in
conformity with generally accepted accounting principles.
ARTHUR ANDERSEN LLP
Pittsburgh, Pennsylvania
February 25, 1998 (Except with respect to the
financing matter as discussed in
Note 14, as to which the date is
March 11, 1998)
F-2
<PAGE> 11
ANCHOR GLASS CONTAINER CORPORATION
STATEMENT OF OPERATIONS
PERIOD FROM FEBRUARY 5, 1997 TO DECEMBER 31, 1997
(DOLLARS IN THOUSANDS, EXCEPT PER SHARE)
<TABLE>
<S> <C>
Net sales ................................................................... $ 569,441
Costs and expenses:
Costs of products sold ................................................. 523,709
Selling and administrative expenses ................................... 25,120
-----------
Income from operations ...................................................... 20,612
Other expense, net .......................................................... (2,602)
Interest expense ............................................................ (18,281)
-----------
Loss before extraordinary item .............................................. (271)
Extraordinary item-
Write-off of deferred financing costs .................................. (11,200)
-----------
Net loss .................................................................... (11,471)
Preferred stock dividends ................................................... (11,302)
-----------
Loss applicable to common stock ............................................. $ (22,773)
===========
Basic net loss per share applicable to common stock before extraordinary item $ (3.62)
===========
Basic net loss per share applicable to common stock ......................... $ (7.11)
===========
Basic weighted average number of common shares outstanding .................. 3,201,148
===========
</TABLE>
See Notes to Financial Statements.
F-3
<PAGE> 12
ANCHOR GLASS CONTAINER CORPORATION
BALANCE SHEET
DECEMBER 31, 1997
RESTATED
(DOLLARS IN THOUSANDS)
Assets
<TABLE>
<CAPTION>
<S> <C>
Current assets:
Cash and cash equivalents...................................................... $ 1,060
Accounts receivable, less allowance for doubtful accounts of $2,025............ 56,940
Inventories -
Raw materials and manufacturing supplies.................................. 23,303
Finished products......................................................... 96,820
Other current assets .......................................................... 8,082
--------
Total current assets................................................. 186,205
- ----------------------------------------------------------------------------------------
Property, plant and equipment:
Land ..................................................................... 7,769
Buildings................................................................. 63,438
Machinery, equipment and molds............................................ 297,317
Less accumulated depreciation............................................. (43,653)
--------
324,871
- ----------------------------------------------------------------------------------------
Other assets................................................................... 22,462
Strategic alliance with customers, net of accumulated amortization of $811..... 25,389
Goodwill, net of accumulated amortization of $2,857............................ 55,803
---------
$ 614,730
=========
</TABLE>
See Notes to Financial Statements.
F-4
<PAGE> 13
ANCHOR GLASS CONTAINER CORPORATION
BALANCE SHEET
DECEMBER 31, 1997
RESTATED
(DOLLARS IN THOUSANDS)
(continued)
<TABLE>
<CAPTION>
- ---------------------------------------------------------------------------------------------
Liabilities and Stockholders' Equity
- ---------------------------------------------------------------------------------------------
<S> <C>
Current liabilities:
Revolving credit facility ................................................... $ 10,468
Current maturities of long term-debt ........................................ 567
Accounts payable ............................................................ 63,796
Accrued expenses ............................................................ 64,075
Accrued interest ............................................................ 4,576
Accrued compensation and employee benefits .................................. 25,185
-----------
Total current liabilities .............................................. 168,667
- ---------------------------------------------------------------------------------------------
Long-term debt .............................................................. 152,758
Long-term pension liabilities ............................................... 48,826
Long-term post retirement liabilities ....................................... 57,900
Other long-term liabilities ................................................. 57,522
-----------
317,006
Commitments and contingencies
- ---------------------------------------------------------------------------------------------
Redeemable preferred stock, Series A, $.01 par value; authorized
2,239,320 shares; issued and outstanding 2,239,320 shares;
$25 liquidation and redemption value ..................................... 55,983
-----------
Stockholders' equity:
Preferred stock, Series B, $.01 par value; authorized 5,000,000 shares;
issued and outstanding 3,360,000 shares; $25 liquidation and
redemption value ......................................................... 34
Issuable preferred stock, 249,600 shares at $25 per share ................ 6,240
Common stock, $.10 par value; authorized 50,000,000 shares;
Class A, issued and outstanding 490,898 shares ........................ 49
Class B, issued and outstanding 902,615 shares ........................ 90
Class C, none issued and outstanding .................................. --
Warrants, Class C Common stock, issued and outstanding 2,107,843 shares ..... 10,518
Capital in excess of par value .............................................. 92,294
Accumulated deficit ......................................................... (35,611)
Additional minimum pension liability ........................................ (540)
-----------
73,074
-----------
$ 614,730
===========
</TABLE>
F-5
<PAGE> 14
ANCHOR GLASS CONTAINER CORPORATION
STATEMENT OF CASH FLOWS
PERIOD FROM FEBRUARY 5, 1997 TO DECEMBER 31, 1997
(DOLLARS IN THOUSANDS)
<TABLE>
<S> <C>
Cash flows from operating activities:
Net loss ............................................................... $ (11,471)
Extraordinary item ..................................................... 11,200
Adjustments to reconcile loss before extraordinary item
to net cash provided by operating activities:
Depreciation and amortization ................................ 51,132
Other ........................................................ 3,101
Decrease in cash resulting from changes
in assets and liabilities .......................................... (28,479)
-----------
25,483
- ---------------------------------------------------------------------------------------------
Cash flows from investing activities:
Purchase of assets and assumption of liabilities of Old Anchor ......... (200,470)
Expenditures for property, plant and equipment ......................... (40,519)
Payment of stategic alliance with customers ............................ (6,000)
Acquisition related contribution to defined benefit pension plans ...... (9,056)
Other .................................................................. (1,210)
-----------
(257,255)
- ---------------------------------------------------------------------------------------------
Cash flows from financing activities:
Proceeds from issuance of long-term debt ............................... 280,000
Principal payments of long-term debt ................................... (130,278)
Proceeds from issuance of preferred stock .............................. 84,000
Proceeds from issuance of common stock ................................. 1,000
Net draws on revolving credit facility ................................. 10,468
Other, primarily financing fees ........................................ (12,358)
-----------
232,832
- ---------------------------------------------------------------------------------------------
Cash and cash equivalents:
Increase in cash and cash equivalents .................................. 1,060
Balance, beginning of period ........................................... -
-----------
Balance, end of period ................................................. $ 1,060
===========
</TABLE>
See Notes to Financial Statements.
F-6
<PAGE> 15
ANCHOR GLASS CONTAINER CORPORATION
STATEMENT OF CASH FLOWS
PERIOD FROM FEBRUARY 5, 1997 TO DECEMBER 31, 1997
(DOLLARS IN THOUSANDS)
(continued)
<TABLE>
<S> <C>
Supplemental disclosure of cash flow information:
Cash paid during the period for:
Interest ............................................................... $ 11,702
=========
Income tax payments (refunds), net ..................................... $ -
=========
Equipment financing ......................................................... $ 1,115
=========
Increase (decrease) in cash resulting from changes in assets and liabilities:
Accounts receivable .................................................... $ (9,635)
Inventories ............................................................ (1,241)
Other current assets ................................................... (620)
Accounts payable, accrued expenses and other current liabilities ....... (17,495)
Other, net ............................................................. 512
---------
$ (28,479)
=========
</TABLE>
Supplemental noncash activities:
In connection with the Anchor Acquisition, the Company issued $46,983 face
amount of Series A Preferred Stock and $2,454 of Class A Common Stock and
incurred $1,500 of fees. In connection with the Anchor Loan Facility, the
Company issued 1,405,229 warrants to the lenders valued at $7,012.
<TABLE>
<CAPTION>
Anchor Acquisition:
<S> <C>
Fair value of assets acquired .......................................... $ 525,500
Acquisition costs accrued .............................................. (62,500)
Goodwill ............................................................... 59,000
Purchase price ......................................................... (250,000)
---------
Liabilities assumed .................................................... $ 272,000
=========
</TABLE>
In February 1997, the Company contributed $9,000 face amount of Series
A Preferred Stock to the Company's defined benefit pensions plans.
In connection with the issuance of the First Mortgage Notes, the
Company issued 702,615 shares of Class B Common Stock to Consumers and 702,614
warrants valued at $3,506 to the initial purchasers of the First Mortgage Notes.
Also, with the issuance of the First Mortgage Notes, the Company recorded an
extraordinary loss for the write-off of deferred financing fees of the Anchor
Loan Facility.
The Company considers short-term investments with original maturities
of ninety days or less at the date of purchase to be classified as cash
equivalents.
F-7
<PAGE> 16
ANCHOR GLASS CONTAINER CORPORATION
STATEMENT OF STOCKHOLDERS' EQUITY
PERIOD FROM FEBRUARY 5, 1997 TO DECEMBER 31, 1997
RESTATED
(dollars in thousands)
<TABLE>
<CAPTION>
--------------------------------------------------------------------------------------------
Series B Class A Class B Issuable Capital Accumu-
Preferred Common Common Preferred In-Excess lated
Stock Stock Stock Stock Warrants of Par Deficit
--------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C>
Balance, February 5, 1997 $ - $ - $ - $ - $ - $ - $ -
Issuance of 3,360,000 shares of
Series B Preferred Stock to
Consumers U.S. ................ 34 - - - - 83,966 -
Issuance of 200,000 shares of
Class B Common Stock to
Consumers U.S. ................ - - 20 - - 2,480 -
Issuance of 490,898 shares of
Class A Common Stock to
creditors of Old Anchor ....... - 49 - - - 2,405 -
Issuance of 1,405,229 warrants
to purchase Class C Common
Stock in conjunction with the
financing of Anchor Loan
Facility ...................... - - - - 7,012 - -
Issuance of 702,615 shares of
Class B Common Stock to
Consumers U.S. in conjuction
with the financing of the Notes - - 70 - - 3,443 (3,513)
Issuance of 702,614 warrants to
purchase Class C Common
Stock in conjunction with the
financing of the Notes ........ - - - - 3,506 - -
Pay-in-kind dividends payable
to Consumers U.S. on Series B
Preferred Stock ............... - - - 6,240 - - (6,240)
Acquisition of manufacturing
rights ........................ (9,325)
Dividends accrued on Series A
Preferred Stock ............... - - - - - - (5,062)
Net loss ...................... - - - - - - (11,471)
Amount related to minimum
pension liability ............. - - - - - - -
-------------------------------------------------------------------
Balance, December 31, 1997 ......... $34 $49 $90 $6,240 $10,518 $92,294 $(35,611)
===================================================================
<CAPTION>
---------------------------------
Minimum Total
Pension Stockholders'
Liability Equity
---------------------------------
<S> <C> <C>
Balance, February 5, 1997 $ - $ -
Issuance of 3,360,000 shares of
Series B Preferred Stock to
Consumers U.S. ................ - 84,000
Issuance of 200,000 shares of
Class B Common Stock to
Consumers U.S. ................ - 2,500
Issuance of 490,898 shares of
Class A Common Stock to
creditors of Old Anchor ....... - 2,454
Issuance of 1,405,229 warrants
to purchase Class C Common
Stock in conjunction with the
financing of Anchor Loan
Facility ...................... - 7,012
Issuance of 702,615 shares of
Class B Common Stock to
Consumers U.S. in conjuction
with the financing of the Notes - -
Issuance of 702,614 warrants to
purchase Class C Common
Stock in conjunction with the
financing of the Notes ........ - 3,506
Pay-in-kind dividends payable
to Consumers U.S. on Series B
Preferred Stock ............... - -
Acquisition of manufacturing
rights ........................ (9,325)
Dividends accrued on Series A
Preferred Stock ............... - (5,062)
Net loss ...................... - (11,471)
Amount related to minimum
pension liability ............. (540) (540)
-------------------
Balance, December 31, 1997 ......... $(540) $ 73,074
===================
</TABLE>
F-8
<PAGE> 17
ANCHOR GLASS CONTAINER CORPORATION
NOTES TO FINANCIAL STATEMENTS
FOR THE PERIOD FROM FEBRUARY 5, 1997 TO DECEMBER 31, 1997
(DOLLARS IN THOUSANDS)
NOTE 1 - PURCHASE OF ASSETS
Anchor Glass Acquisition Corporation (the "Company"), a Delaware corporation and
a majority-owned subsidiary of Consumers Packaging Inc. ("Consumers"), was
formed in January 1997 to acquire certain assets and assume certain liabilities
of Anchor Glass Container Corporation ("Old Anchor"), now Anchor Resolution
Corp.
On February 5, 1997, pursuant to an Asset Purchase Agreement dated December 18,
1996, as amended (the "Asset Purchase Agreement"), among Consumers,
Owens-Brockway Glass Container Inc. ("Owens") and Old Anchor, the Company (the
rights and obligations of Consumers having been assigned to the Company) and
Owens acquired substantially all of the assets of, and assumed certain
liabilities, of Old Anchor.
The Company purchased eleven operating glass container manufacturing facilities
and other related assets (the "Anchor Acquisition"). Owens purchased assets and
assumed liabilities of Old Anchor's Antioch and Hayward, California facilities
and purchased certain other existing inventories. Owens also purchased Old
Anchor's investment in Rocky Mountain Bottle Company, a joint venture with Coors
Brewing Company ("Coors"), and assumed Old Anchor's agreement to manufacture
Coors' glass packaging products in the United States.
The total purchase price approximated $378,000, excluding fees of approximately
$1,500 which were paid by Consumers and recorded as capital in excess of par by
the Company. The portion of the purchase price paid in cash by Owens amounted to
approximately $128,000. The remaining purchase price of approximately $250,000
from the Company was comprised of: approximately $200,500 in cash, $47,000 face
amount (1,879,320 shares) of mandatorily redeemable 10% cumulative convertible
preferred stock ("Series A Preferred Stock") and $2,500 of common stock (490,898
shares with an estimated value of $5.00 per share) (the "Class A Common Stock")
of the Company.
The purchase price paid by the Company is subject to adjustment. On June 13,
1997, Old Anchor delivered to the Company the closing balance sheet which
indicated that Old Anchor believed that is was entitled to additional payments
from the Company and Owens totaling approximately $76,300. On July 28, 1997, the
Company delivered its notice of disagreement to Old Anchor, which requested a
reduction of the purchase price of approximately $96,800. Since that time, the
parties have been negotiating the amount of the adjustment, and have reached a
proposed settlement (the "Proposed Settlement"). The Proposed Settlement
requires the payment by the Company to Old Anchor of an additional $1,000 in
cash and the issuance of 1,225,000 warrants for the purchase of additional
shares of common stock, together valued at approximately $7,100, recorded as an
adjustment to goodwill. In addition, the Company will issue 525,000 warrants to
purchase additional shares of common stock to an affiliate of Consumers U.S.,
valued at approximately $2,600 which has been recorded as an expense. None of
the warrants to be issued will require any payment upon exercise. The effect of
the Proposed Settlement has been reflected in the financial statements for the
period ended December 31, 1997. The Proposed Settlement is subject to final
approval by the Company, Old Anchor and the bankruptcy court.
The Company obtained the cash portion of the purchase price principally from an
$85,000 cash investment by Consumers in $84,000 face amount (3,360,000 shares)
of redeemable 8% cumulative
F-9
<PAGE> 18
convertible preferred stock (the "Series B Preferred Stock") and $1,000 of
common stock (200,000 shares) (the "Class B Common Stock") and a $130,000 bank
loan.
Upon consummation of the purchase and effective February 6, 1997, the Company
changed its name to Anchor Glass Container Corporation.
The Anchor Acquisition is accounted for by using the purchase method, with the
purchase price being allocated to the assets acquired and preacquisition
liabilities assumed based on their estimated fair value at the date of
acquisition. These allocations are based on appraisals, evaluations, estimations
and other studies. Certain acquisition costs and fees, including the costs of
closing and consolidating certain facilities have also been recorded by the
Company at the date of acquisition.. The excess of the purchase price over the
fair value of net asset purchased of approximately $58,660 is classified as
Goodwill on the accompanying balance sheet.
The estimated values of assets acquired and liabilities assumed as of February
5, 1997 after giving effect to the Anchor Acquisition and consideration paid is
as follows:
<TABLE>
<S> <C>
Accounts receivable...................................................... $ 46,000
Inventories.............................................................. 119,000
Property, plant and equipment............................................ 327,000
Goodwill................................................................. 59,000
Other assets............................................................. 32,000
Current liabilities...................................................... (149,000)
Long-term debt........................................................... (2,000)
Other long-term liabilities ............................................. (182,000)
---------
$ 250,000
=========
</TABLE>
The following unaudited pro forma results of operations for the Company for the
year ended December 31, 1997 assumes the Anchor Acquisition occurred on January
1, 1997 (dollars in thousands except per share data):
<TABLE>
<S> <C>
Net sales................................................................$623,518
Loss before extraordinary item........................................... (11,561)
Net loss................................................................. (22,761)
Loss before extraordinary item applicable to common stock................ (24,044)
Loss applicable to common stock.......................................... (35,244)
Basic net loss per share before extraordinary item applicable to
common stock......................................................... (7.51)
Basic net loss per share applicable to common stock...................... (11.01)
</TABLE>
These pro forma amounts represent historical operating results with appropriate
adjustments of the Anchor Acquisition which would give effect to interest
expense and the impact of purchase price adjustments to depreciation and
amortization expense. These pro forma amounts do not purport to be indicative of
the results that would have actually been obtained had the Anchor Acquisition
been completed as of January 1, 1997, or that may be obtained in the future.
On January 9, 1997, the Pension Benefit Guaranty Corporation ("PBGC") notified
Old Anchor that it intended to institute involuntary termination proceedings
with respect to the three defined benefit pension plans then maintained by Old
Anchor, and currently maintained by the Company. However, the PBGC reached an
agreement with Vitro, S.A., the parent of Old Anchor, in which Vitro, S.A.
agreed to provide a limited guaranty to the PBGC with respect to the unfunded
benefit liabilities of the Company's defined benefit plans, if the plans, or any
one of them, are terminated before August 1, 2006. Consequently, the PBGC agreed
not to terminate the plans as a result of the Asset Purchase Agreement and the
assumption of the plans by the Company. In conjunction with the purchase, the
Company assumed all liabilities of the plans and funded $9,056 of plan
contributions,
F-10
<PAGE> 19
previously unfunded following Old Anchor's filing of Chapter 11. Additionally,
the Company issued to the plans $9,000 face amount (360,000 shares) of Series A
Preferred Stock.
NOTE 2 - BASIS OF PRESENTATION AND SIGNIFICANT ACCOUNTING POLICIES
Restatement
The Company has restated the accompanying Balance Sheet and Statement of
Stockholders' Equity for the period ended December 31, 1997. The Company
previously recorded the Acquisition of Manufacturing Rights, discussed below,
at its purchase price of $12,525 and included that amount in the caption
Strategic Alliance with Customers on its Balance Sheet. As discussed below,
because these manufacturing rights were acquired from a related party under
common control, the $3,200 carrying value as recorded by the related party
should have been maintained and accordingly, a restatement has been made. The
Company has now reflected the remaining purchase price as a distribution from
equity. Additionally, as discussed in Note 4, shares of Class B Common Stock
issued to Consumers U.S. upon the issuance of the First Mortgage Notes,
previously recorded as a deferred asset to be amortized over the life of the
First Mortgage Notes, have now been treated as a shareholder distribution.
Business Segment
The Company is engaged in the manufacture and sale of a diverse line of clear,
amber, green and other color glass containers of various types, designs and
sizes to customers principally in the beer, food, iced tea, distilled spirits
and soft drink industries. The Company markets its products throughout the
United States. The Company's international and export sales are insignificant.
Sales to The Stroh Brewery Company represented approximately 15.6% of total net
sales for the period ended December 31, 1997. Revenues are recognized as product
is shipped to customers. The loss of a significant customer, unless replaced,
could have a material adverse effect on the Company's business.
Inventories
Inventories are stated at the lower of cost or market. The cost of substantially
all inventories of raw materials and semi-finished and finished products is
determined on the first-in, first-out method. Manufacturing supplies and certain
other inventories are valued at weighted average costs.
Property, Plant and Equipment
Property, plant and equipment expenditures, including renewals, betterments and
furnace rebuilds which extend useful lives, and expenditures for glass forming
machine molds are capitalized and depreciated using the straight-line method
over the estimated useful lives of the assets for financial statement purposes
while accelerated depreciation methods are principally used for tax purposes.
Generally, annual depreciation rates range from 2.5% for buildings, 6.3% to 20%
for machinery and equipment and 40% for molds. Furnace and machine rebuilds,
which are recurring in nature and which extend the lives of the related assets,
are capitalized and depreciated over the period of extension, generally at rates
of 20% to 25%, based on the type and extent of these rebuilds. Depreciation of
leased property recorded as capital assets is computed on a straight-line basis
over the estimated useful lives of the assets. Maintenance and repairs are
charged directly to expense as incurred.
Strategic Alliance with Customers
The Company has entered into long-term agreements with several customers.
Payments made or to be made to these customers are being amortized as a
component of net sales on the statement of operations over the term of the
related supply contract, which range between 11 and 15 years, based upon
shipments.
Acquisition of Manufacturing Rights
In September 1997, Hillsboro Glass Company ("Hillsboro"), a glass-manufacturing
plant owned by G&G Investments, Inc. ("G&G") (the majority owner of Consumers),
discontinued manufacturing. All of Hillsboro's rights and obligations to fill
orders under a supply contract between Consumers and one of its major customers
was purchased by Consumers and the Company effective December 31, 1997. The
purchase price of the Company's portion of this contract was $12,525, the
majority of which will be paid in 1998. Although this amount was based upon an
independent valuation, because these manufacturing rights were acquired from a
related party under common control, the $3,200 carrying value of these rights
previously recorded on Hillsboro's books was maintained. The excess of the
purchase price over the carrying value has been treated as a distribution to a
shareholder.
Goodwill
Goodwill represents the excess of the purchase price over the estimated fair
value of net assets acquired and is amortized on a straight line basis over a
twenty year period. Amortization expense for the period ended December 31, 1997
was $2,857.
F-11
<PAGE> 20
Income Taxes
The Company applied Statement of Financial Accounting Standards No. 109 -
Accounting for Income Taxes ("SFAS 109") which establishes financial accounting
and reporting standards for the effects of income taxes which result from a
company's activities during the current and preceding years.
Retirement Plans
The Company has retirement plans, principally non-contributory, covering
substantially all salaried and hourly employees. The Company's funding policy is
to pay at least the minimum amount required by the Employee Retirement Income
Security Act of 1974 and the Retirement Protection Act of 1994, which requires
the Company to make significant additional contributions into its underfunded
defined benefit plans.
Postretirement Benefits
Statement of Financial Accounting Standards No. 106 - Employers' Accounting for
Postretirement Benefits Other Than Pensions ("SFAS 106") requires accrual of
postretirement benefits (such as healthcare benefits) during the period that an
employee provides service. This accounting method has no effect on the Company's
cash outlays for these postretirement benefits.
Fair Value of Financial Instruments
Statement of Financial Accounting Standards No. 107 - Disclosures about Fair
Value of Financial Instruments requires disclosure of the estimated fair values
of certain financial instruments. The estimated fair value amounts have been
determined using available market information or other appropriate valuation
methodologies that require considerable judgment in interpreting market data and
developing estimates. Accordingly, the estimates presented herein are not
necessarily indicative of the amounts that the Company could realize in a
current market exchange. The use of different market assumptions and/or
estimation methodologies may have a material effect on the estimated fair value
amounts. As the long-term debt has not been registered or traded in an
established trading market, and the debt was issued during the current period,
the Company has estimated the fair value of the debt to be the carrying value.
The carrying amount of other financial instruments approximate their estimated
fair values.
The fair value information presented herein is based on information available to
management as of December 31, 1997. Although management is not aware of any
factors that would significantly affect the estimated value amounts, such
amounts have not been comprehensively revalued for purposes of these financial
statements since that date and, therefore, the current estimates of fair value
may differ significantly from the amounts presented herein.
From time to time, the Company may enter into interest rate swap agreements that
effectively hedge interest rate exposure. The net cash amount paid or received
on these agreements are accrued and recognized as an adjustment to interest
expense.
Earnings per share
In February 1997, the Financial Accounting Standards Board issued SFAS No. 128,
"Earnings per Share" ("SFAS 128") which is effective for all periods ending
after December 15, 1997. SFAS 128 sets forth requirements for computing basic
and diluted earnings per share. Basic income (loss) per common share is computed
by dividing net income (loss) applicable to common stock by the weighted-average
number of common shares and contingently issuable shares outstanding during the
period. Warrants outstanding are contingently issuable shares as they are
issuable for no additional consideration and the conditions necessary for share
exercise have been met. There is no
F-12
<PAGE> 21
diluted earnings per share presented as the assumed conversion of preferred
stock would be anti-dilutive.
The computation of basic loss per share is as follows (dollars in thousands,
except per share):
<TABLE>
<S> <C>
Basic net loss per share
Net loss applicable to common stock........................ $ (22,773)
Divided by
Weighted average shares outstanding, plus.............. 1,242,344
Weighted average warrants outstanding.................. 1,958,804
-----------
3,201,148
----------
Basic net loss per share................................... $ (7.11)
==========
</TABLE>
Use of Estimates
The preparation of financial statements in conformity with generally accepted
accounting principles, requires management to make estimates and assumptions
that affect the reported amounts of assets and liabilities and disclosure of
contingent assets and liabilities at the date of the financial statements and
the reported amounts of revenues and expenses during the reporting period.
Actual results could differ from those estimated.
NOTE 3- REVOLVING CREDIT FACILITY
In conjunction with the Anchor Acquisition, the Company entered into a credit
agreement dated as of February 5, 1997, with Bankers Trust Company ("BTCo") as
issuing bank and BT Commercial Corporation, as agent, to provide a $110,000
senior secured revolving credit facility (the "Revolving Credit Facility"). The
Revolving Credit Facility enables the Company to obtain revolving credit loans
for working capital purposes and the issuance of letters of credit for its
account in an aggregate amount not to exceed $110,000. Advances outstanding at
any one time can not exceed an amount equal to the borrowing base as defined in
the Revolving Credit Facility.
Revolving credit loans bear interest at a rate based upon, at the Company's
option, (i) the higher of the prime rate of BTCo, 0.5% in excess of the
overnight federal funds rate and 0.5% in excess of the adjusted certificate of
deposit rate, as defined, each plus a defined margin, or (ii) the average of the
offering rates of banks in the New York interbank Eurodollar market, plus a
defined margin. Interest is payable monthly. A commitment fee of 0.5% on the
unused portion of the facility and letter of credit fees, as defined, are
payable quarterly. The Revolving Credit Facility expires February 5, 2002.
At December 31, 1997, advances outstanding under the Revolving Credit Facility
were $10,468 and the borrowing availability was $52,497. The total outstanding
letters of credit on this facility were $12,788. At December 31, 1997, the
weighted average interest rate on borrowings outstanding was 8.4%.
The Company's obligations under the Revolving Credit Facility are secured by a
first priority lien on substantially all of the Company's inventories and
accounts receivable and related collateral and a second priority pledge of all
of the Series B Preferred Stock and the Class B Common Stock. In addition, the
Company's obligations under the Revolving Credit Facility are guaranteed by
Consumers U.S., Inc., ("Consumers U.S.") the Company's parent and a wholly-owned
indirect subsidiary of Consumers and the holder of the outstanding Series B
Preferred Stock and Class B Common Stock.
The Revolving Credit Facility contains certain covenants that restrict the
Company from taking various actions, including, subject to specified exceptions,
the incurrence of additional indebtedness, the granting of additional liens, the
making of investments, the payment of dividends and other restricted payments,
mergers, acquisitions and other fundamental corporate changes, capital
F-13
<PAGE> 22
expenditures, operating lease payments and transactions with affiliates. The
Revolving Credit Facility also contains certain financial covenants that require
the Company to meet and maintain certain financial tests and minimum ratios,
including a minimum working capital ratio, a minimum consolidated net worth test
and a minimum interest coverage ratio.
NOTE 4 - LONG-TERM DEBT
Long-term debt at December 31, 1997 consists of the following:
<TABLE>
<S> <C>
$ 150,000 First Mortgage Notes, interest at 11.25% due 2005........ $ 150,000
Other.............................................................. 3,325
---------
153,325
Less current maturities............................................ 567
---------
$ 152,758
=========
</TABLE>
In connection with the Anchor Acquisition, the Company entered into a Senior
Credit Agreement, dated as of February 5, 1997, with BTCo, as agent, to provide
a $130,000 bank loan (the "Anchor Loan Facility"). The Anchor Loan Facility was
repaid in full from the net proceeds of the issuance of the $150,000 11.25%
First Mortgage Notes, due 2005, (the " First Mortgage Notes"). The Anchor Loan
Facility bore interest at a rate of 12.50%.
As additional consideration in providing the Anchor Loan Facility, the Company
issued to BT Securities Corporation and TD Securities, 1,405,229 warrants
convertible to Class C Common Stock. The warrants are valued at approximately
$7,000. As a result of the refinancing of the Anchor Loan Facility, deferred
financing fees of $11,200 were written off as an extraordinary loss in the
second quarter of 1997.
Effective April 17, 1997, the Company completed an offering of the First
Mortgage Notes, issued under an indenture dated as of April 17, 1997 (the
"Indenture"), among the Company, Consumers U.S. and The Bank of New York, as
Trustee. The First Mortgage Notes are senior secured obligations of the Company,
ranking senior in right of payment to all existing and future subordinate
indebtedness of the Company and pari passu with all existing and future senior
indebtedness of the Company. The First Mortgage Notes are guaranteed by
Consumers U.S. Proceeds from the issuance of the First Mortgage Notes, net of
fees, were approximately $144,000 and were used to repay $130,000 outstanding
under the Anchor Loan Facility and $8,800 of advances outstanding under the
Revolving Credit Facility, with the balance used for general corporate purposes.
Interest on the First Mortgage Notes accrues at 11.25% per annum and is payable
semiannually on each April 1 and October 1 to registered holders of the First
Mortgage Notes at the close of business on the March 15 and September 15
immediately preceding the applicable interest payment date. The Company entered
into a Registration Rights Agreement on April 17, 1997. Pursuant to this
agreement, additional interest in an amount of up to 1.5% per annum accrues on
the First Mortgage Notes under certain conditions. As a result of the Company's
failure to have an exchange offer registration statement declared effective on
or prior to October 14, 1997, additional interest in the amount of 0.5% accrued
from October 14, 1997. Due to the Company's failure to have exchanged all First
Mortgage Notes tendered in accordance with the terms of the exchange offer on or
prior to November 28, 1997, additional interest increased to 1.0%. Additional
interest increased to 1.5% on January 13, 1998 and accrued to February 11, 1998
when it was reduced to 0.5%.
The First Mortgage Notes are redeemable, in whole or in part, at the Company's
option on or after April 1, 2001, at redemption prices defined in the Indenture.
The Indenture provides that upon the occurrence of a change in control, the
Company will be required to offer to repurchase all of the First Mortgage Notes
at a purchase price in cash equal to 101% of the principal amount plus interest
accrued to the date of purchase. Prior to the sale of the First Mortgage Notes,
the Company entered into an interest rate swap agreement to partially protect
the Company from interest rate fluctuations
F-14
<PAGE> 23
until such time as the fixed interest rate on the First Mortgage Notes was
established. The agreement was terminated concurrent with interest rate of the
First Mortgage Notes being set. The realized gain on the agreement,
approximately $1,900, has been deferred and is being amortized over the term of
the First Mortgage Notes.
All of the obligations of the Company under the First Mortgage Notes and the
Indenture are secured by a first priority perfected security interest in
substantially all of the existing and future real property, personal property
and other assets of the Company and a first priority perfected security interest
in collateral ranking pari passu with the security interest in favor of the
Revolving Credit Facility.
The Indenture, subject to certain exceptions, restricts the Company from taking
various actions, including, but not limited to, subject to specified exceptions,
the incurrence of additional indebtedness, the granting of additional liens, the
payment of dividends and other restricted payments, mergers, acquisitions and
transactions with affiliates.
All of the Company's debt agreements contain cross-default provisions.
Principal payments required on long-term debt are $567 in 1998, $291 in 1999,
$297 in 2000, $303 in 2001 and $300 in 2002. Payments to be made in 2003 and
thereafter are $151,567.
In connection with the issuance of the First Mortgage Notes on April 17, 1997,
the Company issued 702,615 shares of Class B Common Stock to Consumers and
702,614 warrants, valued at $5.00 for each share and warrant, to the initial
purchasers. As the Company has already incurred the internal general and
administrative expenses related to the issuance of the First Mortgage Notes, the
issuance of the shares to Consumers U.S. was treated as a shareholder
distribution. The value of the warrants issued to the initial purchasers has
been deferred to be amortized over the life of the First Mortgage Notes.
NOTE 5 - REDEEMABLE PREFERRED STOCK
The Company has designated 2,239,320 shares as Series A Preferred Stock and
5,000,000 shares as Series B Preferred Stock. The Series A Preferred Stock
ranks, as to dividends and redemption and upon liquidation, prior to all other
classes and series of capital stock of the Company. The holders of Series A
Preferred Stock are entitled to receive, when and as declared by the Board of
Directors of the Company, cumulative dividends, payable quarterly in cash, at an
annual rate of 10%. Holders of Series A Preferred Stock are not entitled to
vote, except as defined in its Certificate of Designation. No dividends have
been declared or paid as of December 31, 1997.
The Company is required to redeem all outstanding shares of the Series A
Preferred Stock on January 31, 2009, and, on or after February 5, 2000, may, at
its option, redeem outstanding shares of Series A Preferred Stock at a price of
$25.00 per share, if the trading price of the common stock equals or exceeds
$6.00 per share. Shares of Series A Preferred Stock are convertible into shares
of Class A Common Stock, at the option of the holder, at a ratio determined by
dividing the liquidation value of the Series A Preferred Stock by $6.00 and such
ratio is subject to adjustment from time to time.
Pursuant to the Asset Purchase Agreement, the Company is obligated to register
all of the shares of the Class A Common Stock and Series A Preferred Stock under
the Securities Exchange Act and to qualify the shares for listing on a
nationally recognized United States securities exchange or on The NASDAQ Stock
Market's National Market.
The Series B Preferred Stock ranks, as to dividends and redemption and upon
liquidation, junior to the Series A Preferred Stock but senior to all other
classes and series of capital stock of the Company. The holders of Series B
Preferred Stock are entitled to receive cumulative dividends, payable quarterly
at an annual rate of 8%. During the period from February 5, 1997 through and
including December 31, 1999, the dividend is payable in additional shares of
Series B Preferred Stock. Thereafter, the dividends will be payable in cash when
and as declared by the Board of Directors. Holders of Series B Preferred Stock
are not entitled to vote, except as defined in its Certificate of Designation.
F-15
<PAGE> 24
Shares of Series B Preferred Stock are not subject to mandatory redemption. On
or after February 5, 2000, the Company may, at its option, redeem outstanding
shares of Series B Preferred Stock at a price of $25.00 per share, if the
trading price of the common stock equals or exceeds $5.50 per share. Shares of
Series B Preferred Stock are convertible into shares of Class B Common Stock, at
the option of the holder, at a ratio determined by dividing the liquidation
value of the Series A Preferred Stock by $5.50 and such ratio is subject to
adjustment from time to time.
NOTE 6 - COMMON STOCK
For the period from February 5, 1997 to February 5, 2000, the common stock is
divided into three classes, Class A and Class B, which are voting, and Class C,
which is non-voting. During this period, the number of Directors of the Company
is fixed at nine, with the holders of the Class A shares having the right to
elect four Directors and the holders of the Class B shares having the right to
elect five Directors. In connection with the settlement of the issues
surrounding the adjustment to the purchase price paid by the Company, it is
expected that the certificate of incorporation of the Company will be amended to
increase the number of directors to be elected by the holders of Class B Common
Stock. Holders of the Class C shares do not participate in the election of
Directors. On February 5, 2000, the three classes of common stock will
automatically be consolidated into one single class of common stock with
identical rights. The Company currently has outstanding warrants exercisable for
2,107,843 shares of Class C Common Stock at an exercise price of $.10 per share,
which has already been deemed paid.
NOTE 7 - RELATED PARTY INFORMATION
G&G Investments, Inc.
The Company is party to a management agreement with G&G, in which G&G is to
provide specified managerial services for the Company. For these services, G&G
is entitled to receive an annual management fee of $3,000 and reimbursement of
its out-of-pocket costs. The terms of Revolving Credit Facility and the
Indenture limit the management fee annual payment to $1,500 unless certain
financial maintenance tests are met. The Company has recorded an expense of
$2,750 for this agreement for the period ended December 31, 1997 of which $975
has been paid.
Other affiliates
Related party transactions with Consumers and its affiliates for the period from
February 5, 1997 to December 31, 1997 are summarized as follows:
<TABLE>
<S> <C>
Purchases of inventory and other................................ $ 5,201
Payable for inventory and other................................. 1,283
Sales of inventory and other.................................... 20,314
Receivable from sales of inventory and other.................... 5,791
</TABLE>
All transaction with Consumers and its affiliates are conducted on terms which,
in the opinion of management, are no less favorable than with third parties.
Stock Option Plan
The Company participates in the Director and Employee Incentive Stock Option
Plan, 1996 of Consumers. Options to purchase 1,261,500 shares of Consumers
common stock, at exercise prices that range from $9.65 to $13.50 (Canadian
dollars), were granted to all salaried employees of the Company in 1997. The
Company has elected to follow Accounting Principles Board Opinion No. 25 --
Accounting for Stock Issued to Employees ("APB 25"). Under APB 25, because the
exercise price of employee stock options equals the market price of the stock
on the date of grant, no compensation expense is recorded. The Company adopted
the disclosure only provisions of Statement of Financial Accounting Standards
No. 123 -- Accounting for Stock-Based Compensation ("SFAS 123").
Information related to stock options during the period ended December 31, 1997
follows:
<TABLE>
<CAPTION>
WEIGHTED WEIGHTED
NUMBER AVERAGE AVERAGE
OF EXERCISE FAIR
SHARES PRICE VALUE
------ -------- --------
<S> <C> <C> <C>
Options outstanding, February 5, 1997... -- --
Granted ............................. 1,261,500 $12.95 $4.43
Exercised ........................... -- --
Forfeited ........................... -- --
--------- ------
Options outstanding, December 31, 1997.. 1,261,500 $12.95
========= ======
</TABLE>
No options are exercisable at December 31, 1997 and, the weighted average
remaining contractual life of the options is 9.5 years.
The Company applied APB 25 in accounting for these stock options and,
accordingly, no compensation cost has been reported in the financial statements
for the period ended December 31, 1997. In accordance with SFAS 123, the fair
value of option grants is estimated on the date of grant using the
Black-Scholes option pricing model with the following assumptions for pro
forma footnote purposes: (i) risk-free interest of 5.76%, (ii) expected option
life of 3 years, (iii) expected volatility of 41.51% and (iv) no expected
dividend yield.
Had the Company determined compensation cost based on the fair value at the
grant date for these options under SFAS 123, the Company's net loss would have
been reduced to the pro forma amounts indicated below:
<TABLE>
<CAPTION>
<S> <C>
Net loss
As reported .......................................... $(11,471)
Pro forma ............................................ (11,617)
Loss applicable to common stock
As reported .......................................... $(22,773)
Pro forma ............................................ (22,919)
Basic net loss per share applicable to common stock
As reported .......................................... $ (7.11)
Pro forma ............................................ (7.16)
</TABLE>
F-16
<PAGE> 25
NOTE 8 - PENSION PLANS
As part of the Anchor Acquisition, the Company assumed the pension plans
previously maintained by Old Anchor. The Company has defined benefit retirement
plans for salaried and hourly-paid employees. Benefits are calculated on a
salary-based formula for salaried plans and on a service-based formula for
hourly plans. Pension costs for the period from February 5, 1997 to December 31,
1997 are summarized below.
<TABLE>
<S> <C>
Service cost-benefits earned during the year.................... $ 3,934
Interest cost on projected benefit obligation................... 28,219
Return on plan assets........................................... (29,087)
--------
Total pension cost............................................ $ 3,066
========
</TABLE>
The Company has substantial unfunded obligations related to its employee pension
plans. The Retirement Protection Act of 1994 requires the Company to make
significant additional funding contributions into its underfunded defined
benefit retirement plans and will increase the premiums paid to the PBGC.
Excluding payments made as part of the Anchor Acquisition, the Company funded
required contributions of approximately, $20,000 in 1997.
As an objection to the sale, the PBGC entered a determination to terminate Old
Anchor's qualified defined benefit pension plans. However, in conjunction with
the sale, the Company assumed all liabilities of the plans and funded $9,056 of
plan contributions, previously unfunded following Old Anchor's filing of Chapter
11. Additionally, the Company issued $9,000 face amount of Series A Preferred
Stock and Vitro, the parent of Old Anchor, has guaranteed to fund certain
qualified defined benefit plan obligations, should the Company default on its
obligations. Consequently, the PBGC agreed not to terminate the plans as a
result of the Agreement and the assumption of the plans by the Company.
The Company also sponsors two defined contribution plans covering substantially
all salaried and hourly employees. In 1994, the salaried retirement and savings
programs were changed, resulting in the freezing of benefits under the defined
benefit pension plans for salaried employees and amending the defined
contribution savings plan for salaried employees. Under the amended savings
plan, the Company matches employees' basic contributions to the plan in an
amount equal to 150% of the first 4% of an employee's compensation. Expenses
under the savings programs for the period from February 5, 1997 to December 31,
1997 were approximately $2,000.
The funded status of the Company's pension plans at December 31, 1997 is as
follows:
<TABLE>
<CAPTION>
Accumulated Assets Exceed
Benefits Accumulated
Exceed Assets Benefits
------------- --------
<S> <C> <C>
Actuarial present value of accumulated plan benefits:
Vested benefit obligation........................... $ 314,427 $ 114,381
========= =========
Accumulated benefit obligation...................... $ 325,349 $ 114,381
========= =========
Projected benefit obligation........................ 325,349 114,381
Plan assets at fair value................................ 270,157 131,631
--------- ---------
Projected benefit obligation in excess of (less than)
plan assets........................................ 55,192 (17,250)
Amounts not recognized -
Subsequent gains.................................... 4,651 5,693
Additional minimum liability............................. 540 --
--------- ---------
Accrued (prepaid) pension cost........................... $ 60,383 $ (11,557)
========= =========
</TABLE>
Plan assets are held by an independent trustee and consist primarily of
investments in equities, fixed income and government securities. There is
currently no public market for the Series A Preferred Stock and no dividends
have been paid during the current year. The Company has received a
F-17
<PAGE> 26
valuation of the contributed Series A Preferred Stock in the fourth quarter of
1997. Based upon this valuation, the Company will be required to contribute
approximately $745 to bring the total value of the Series A Preferred Stock
contribution up to the $9,000 contributed value.
Significant assumptions used in determining net pension cost and related pension
obligations for the benefit plans for 1997 are as follows:
<TABLE>
<S> <C>
Discount rate........................................... 7.25 %
Expected long-term rate of return
on plan assets...................................... 9.0
</TABLE>
NOTE 9 - POSTRETIREMENT BENEFITS OTHER THAN PENSIONS
The Company provides benefits to substantially all salaried, and certain hourly
employees under several plans. SFAS 106 requires accrual of postretirement
benefits (such as healthcare benefits) during the years an employee provides
services. Currently, the Company funds these healthcare benefits on a
pay-as-you-go basis. The Company also contributes to a multi-employer trust, and
under the requirements of SFAS 106, recognizes as postretirement benefit cost
the required annual contribution. The Company's cash flows are not affected by
implementation of SFAS 106.
The accumulated postretirement benefit obligation at December 31, 1997 is as
follows:
<TABLE>
<S> <C>
Retirees..................................................... $ 39,882
Eligible plan participants................................... 9,186
Other active plan participants............................... 12,054
--------
61,122
Unrecognized gain............................................ 568
--------
Accrued postretirement benefit costs (including $3,790 in
current liabilities)...................................... $ 61,690
========
</TABLE>
Net postretirement benefit costs for the period from February 5, 1997 to
December 31, 1997 consist of the following components:
<TABLE>
<S> <C>
Service cost - benefits earned during the year..................$ 755
Interest cost on accumulated postretirement
benefit obligation.......................................... 3,855
--------
$ 4,610
========
</TABLE>
The assumed healthcare cost trend used in measuring the accumulated
postretirement benefit obligation as of December 31, 1997 was 8.5% declining
gradually to 5.5% by the year 2003, after which it remains constant. A one
percentage point increase in the assumed healthcare cost trend rate for each
year would increase the accumulated post-retirement benefit obligation as of
December 31, 1997 by approximately 11% and the net postretirement healthcare
cost for the period ended December 31, 1997 by approximately 12%. The assumed
discount rate used in determining the accumulated postretirement benefit
obligation was 7.25% for 1997.
The Company also contributes to a multi-employer trust which provides certain
other postretirement benefits to retired hourly employees. Expenses under this
program for the period from February 5, 1997 to December 31, 1997 were $3,781.
NOTE 10 - PLANT CLOSING COSTS
In an effort to reduce the Company's cost structure and improve productivity,
the Company closed its Houston, Texas plant effective February 1997 and its
Dayville, Connecticut plant effective April 1997 and included the liabilities
assumed as part of the Anchor Acquisition cost. Closure of these facilities
F-18
<PAGE> 27
will result in the consolidation of underutilized manufacturing operations and
is expected to be completed by February 5, 1999. Substantially all of the hourly
and salaried employees at these plants, approximately 600 in total, have been
terminated. Exit charges and the amounts charged against the liability as of
December 31, 1997 are as follows:
<TABLE>
<CAPTION>
Amount Charged
Exit Charges Against Liability
------------ -----------------
<S> <C> <C>
Severance and employee benefit costs $13,000 $11,700
Plant shutdown costs related to consolidation
and discontinuation of manufacturing facilities 12,800 9,100
</TABLE>
NOTE 11 - INCOME TAXES
The Company applies SFAS 109 under which the liability method is used in
accounting for income taxes. Deferred income taxes reflect the net tax effects
of temporary differences between the carrying amounts of assets and liabilities
for financial reporting purposes and the amounts used for income tax purposes,
and are measured using the enacted tax rates and laws that will be in effect
when the differences are expected to reverse. Under SFAS 109, if on the basis of
available evidence, it is more likely than not that all or a portion of the
deferred tax asset will not be realized, the asset must be reduced by a
valuation allowance. Since realization is not assured at of December 31, 1997,
management has deemed it appropriate to establish a realization reserve against
the tax asset created during the period.
The following significant components of the deferred tax assets and liabilities
are as follows:
<TABLE>
<S> <C>
Deferred tax assets:
Pension and postretirement liabilities........................ $ 1,200
Accumulated depreciation...................................... 600
Other......................................................... 300
Tax loss carryforwards........................................ 2,900
----------
5,000
----------
Valuation allowance............................................. (1,600)
----------
3,400
Deferred tax liabilities:
Accrued liabilities and reserves.............................. 3,200
Other assets.................................................. 200
----------
Net deferred tax assets 3,400
----------
$ -
==========
</TABLE>
The effective tax rate reconciliation at December 31, 1997 is as follows:
<TABLE>
<S> <C>
Federal rate................................................. (34)%
State rate................................................... ( 5)
---
Permanent differences........................................ 25
---
(14)
Valuation allowance......................................... 14
---
Effective rate.............................................. -- %
===
</TABLE>
NOTE 12 - LEASES
The Company leases distribution and office facilities, machinery,
transportation, data processing and office equipment under non-cancelable leases
which expire at various dates through 2004. These leases generally provide for
fixed rental payments and include renewal and purchase options at amounts which
are generally based on fair market value at expiration of the lease. The Company
has no material capital leases.
F-19
<PAGE> 28
Future minimum lease payments under non-cancelable operating leases are as
follows:
<TABLE>
<S> <C>
1998....................................................... $ 17,300
1999....................................................... 13,600
2000....................................................... 10,400
2001....................................................... 9,200
2002....................................................... 9,200
After 2002................................................. 20,300
---------
$ 80,000
=========
</TABLE>
Rental expense for all operating leases for the period from February 5, 1997 to
December 31, 1997 were $17,547.
In connection with the Anchor Acquisition, the Company assumed and amended Old
Anchor's lease of the headquarters facility located in Tampa, Florida and a
related option to purchase. The term of the amended lease expires January 2,
1998, unless the Company has exercised its purchase right, and the term then
expires February 1, 1998. In January 1998, the Company exercised the option to
purchase the headquarters facility and assigned such option to a third party
purchaser of the facility. The Company has to entered into a ten year lease
pursuant to which the Company will lease a portion of the headquarters facility.
NOTE 13 - COMMITMENTS AND CONTINGENCIES
The Company is a respondent in various environment-related cases. The
measurement of liabilities in these cases and other environmental concerns is
based on available facts of each situation and considers factors such as prior
experience in remediation efforts and presently enacted environmental laws and
regulations. In the opinion of management, based upon information presently
known, the Company has adequately provided for environmental liabilities. The
Company is not otherwise party to, and none of its assets are subject to any
other pending legal proceedings, other than ordinary routine litigation
incidental to its business and against which the Company is adequately insured
and indemnified or which is not material. The Company believes that the ultimate
outcome of these cases will not materially affect future operations.
NOTE 14 - SUBSEQUENT EVENTS
Following the issuance of the First Mortgage Notes, the Company filed, with the
Securities and Exchange Commission, a Registration Statement on July 16, 1997,
(File No.333-31363) on Form S-4 under the Securities Act of 1933, with respect
to an issue of 11.25% First Mortgage First Mortgage Notes, due 2005, identical
in all material respects to the First Mortgage Notes, except that the new First
Mortgage Notes would not bear legends restricting the transfer thereof. Upon the
effectiveness of the Registration Statement, February 12, 1998, the Company
commenced an offer to the holders of the First Mortgage Notes to exchange their
First Mortgage Notes for a like principal amount of new First Mortgage Notes.
The exchange offer is expected to be completed by March 30, 1998.
In connection with a plan to simplify the corporate ownership structure of
Consumers, the Company and their affiliates, Glenshaw Glass Company, Inc., a
wholly-owned subsidiary of G&G, may become a subsidiary of the Company or
Consumers U.S.
Subsequent to year end, the Company has made definitive arrangements to issue 9
7/8% senior unsecured notes, due 2008 in the amount of $50,000, the proceeds of
which are to be used to pay down the existing indebtedness under the Company's
Revolving Credit Facility and to provide for future expansion to meet customer
needs.
F-20
<PAGE> 29
SIGNATURES
Pursuant to the requirements of Section 13 or 15(d) of the Securities
Exchange Act of 1934, the registrant has duly caused this report to be signed on
its behalf by the undersigned, thereunto duly authorized.
ANCHOR GLASS CONTAINER CORPORATION
Date: July 13, 1998 By /s/ M. William Lightner, Jr.
---------------------------------
M. William Lightner, Jr.
Senior Vice President, Finance
Chief Financial Officer and Treasurer
Pursuant to the requirements of the Securities Exchange Act of 1934, this
report has been signed below by the following persons on behalf of the
registrant and in the capacities and on July 13, 1998.
/s/ Richard M. Deneau
- -------------------------------------
Richard M. Deneau
President and Chief Operating Officer
/s/ M. William Lightner, Jr.
- -------------------------------------
M. William Lightner, Jr.
Senior Vice President, Finance
Chief Financial Officer and Treasurer
Directors:
/s/ Paul H. Farrar
- -------------------------------------
Paul H. Farrar
/s/ John J. Ghaznavi
- -------------------------------------
John J. Ghaznavi
/s/ David T. Gutowski
- -------------------------------------
David T. Gutowski
/s/ M. William Lightner, Jr.
- -------------------------------------
M. William Lightner, Jr.
/s/ Christopher M. Mackey
- -------------------------------------
Christopher M. Mackey
/s/ C. Kent May
- -------------------------------------
C. Kent May
/s/ William J. Shaw
- -------------------------------------
William J. Shaw
<PAGE> 1
EXHIBIT 23.1
CONSENT OF INDEPENDENT PUBLIC ACCOUNTANTS
As independent public accountants, we hereby consent to the use of our
reports (and to all references to our Firm) included in or made a part of this
annual report on Form 10-K/A.
/s/ ARTHUR ANDERSEN LLP
Pittsburgh, Pennsylvania
July 13, 1998
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM (A) THE
FINANCIAL STATEMENTS OF ANCHOR GLASS CONTAINER CORPORATION INCLUDED IN FORM 10-K
AND IS QUALIFIED IN ITS ENTIRETY BY REFERENCE TO SUCH (B) FINANCIAL STATEMENTS.
</LEGEND>
<RESTATED>
<MULTIPLIER> 1,000
<S> <C>
<PERIOD-TYPE> OTHER
<FISCAL-YEAR-END> DEC-31-1997
<PERIOD-START> FEB-05-1997
<PERIOD-END> DEC-31-1997
<CASH> 1
<SECURITIES> 1,060
<RECEIVABLES> 56,940
<ALLOWANCES> 2,025
<INVENTORY> 120,123
<CURRENT-ASSETS> 186,205
<PP&E> 368,524
<DEPRECIATION> 43,653
<TOTAL-ASSETS> 614,730
<CURRENT-LIABILITIES> 168,667
<BONDS> 152,758
55,983
34
<COMMON> 139
<OTHER-SE> 72,901
<TOTAL-LIABILITY-AND-EQUITY> 614,730
<SALES> 569,441
<TOTAL-REVENUES> 569,441
<CGS> 523,709
<TOTAL-COSTS> 523,709
<OTHER-EXPENSES> 0
<LOSS-PROVISION> 375
<INTEREST-EXPENSE> 18,281
<INCOME-PRETAX> (271)
<INCOME-TAX> 0
<INCOME-CONTINUING> (271)
<DISCONTINUED> 0
<EXTRAORDINARY> (11,200)
<CHANGES> 0
<NET-INCOME> (11,471)
<EPS-PRIMARY> (7.11)
<EPS-DILUTED> (7.11)
</TABLE>
