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SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
Form 8-K
Current Report
Pursuant to Section 13 or 15(d) of the
Securities Exchange Act of 1934
Date of Report (Date of earliest event reported): January 5, 2000
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(January 5, 2000)
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THE IMPERIAL HOME DECOR GROUP INC.
(Exact name of registrant as specified in its charter)
Delaware 333-58913 51-0370302
(State or other jurisdiction of (Commission File (I.R.S. Employer
incorporation) Number) Identification No.)
23645 Mercantile Road, Cleveland, Ohio 44122
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code: (216) 464-3700
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(Former name or former address, if changed since last report)
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Item 5. Other Events.
On January 5, 2000, the Company issued a press release announcing the
filing of voluntary petitions of the Company and its affiliates for protection
under chapter 11 of the U.S. Bankruptcy Code in the United States Bankruptcy
Court for the District of Delaware. A copy of the press release is filed
herewith is Exhibit 99.1 and is incorporated herein by reference.
Item 7. Financial Statements, Pro Forma Financial Information and Exhibits.
(a) Financial Statements of Business Acquired.
Not applicable.
(b) Pro Forma Financial Information.
Not applicable.
(c) Exhibits.
Exhibit No. Exhibit Description
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99.1 Press Release issued by the Imperial Home Decor
Group Inc., dated January 5, 2000.
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SIGNATURE
Pursuant to the requirements of the Securities Exchange Act of 1934,
the registrant has duly caused this report to be signed on its behalf by the
undersigned hereunto duly authorized.
The Imperial Home Decor Group Inc.
Date: January 5, 2000 By: / Scott R. Levin /
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Scott R. Levin
Acting Chief Executive Officer,
Executive Vice President--Administration
and Chief Financial Officer
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EXHIBIT INDEX
Exhibit No. Exhibit Description
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99.1 Press Release issued by the Imperial Home Decor Group Inc.,
dated January 5, 2000
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[LOGO] IHDG(TRADEMARK)
Imperial Home Decor Group(TRADEMARK)
[LETTERHEAD]
CONTACT:
Kathy Obert at 216/902-0019
Stephen Phillips at 216/902-0026
both of Edward Howard & Co.
THE IMPERIAL HOME DECOR GROUP INC. AND ITS U.S. AFFILIATES
TO RESTRUCTURE UNDER CHAPTER 11
Company Secures $75 Million Debtor-in-Possession Financing,
Names Acting CEO
CLEVELAND, OHIO, January 5, 2000 - The Imperial Home Decor Group Inc. said today
that it and its U.S. affiliates filed voluntary petitions on January 5, 2000 for
protection under chapter 11 of the U.S. Bankruptcy Code in the United States
Bankruptcy Court for the District of Delaware. Along with the holding company,
entities included in the filing are: The Imperial Home Decor Group (US) LLC; its
vinyl film subsidiary, Vernon Plastics, Inc.; Imperial Home Decor Group Holdings
LLC, the principal shareholder of the holding company; and two additional
non-operating subsidiaries, WDP Investments, Inc. and Marketing Services, Inc.
The Company's Canadian operations, The Imperial Home Decor Group (Canada) ULC,
and its operations in the United Kingdom, The Imperial Home Decor Group (UK)
Ltd., were not included in the filing.
The Company said that it elected to seek court protection to develop
and implement a financial reorganization. During the reorganization process,
Imperial Home Decor Group (US) LLC, Vernon Plastics, and all other company units
will continue to operate normally.
"With more than 40% of the North American residential wallcoverings
market, IHDG is the industry leader, and is a viable company with solid future
prospects," said Scott R. Levin, IHDG's Chief Financial Officer and Acting Chief
Executive Officer. "Our company is profitable on an operating basis before
restructuring and integration costs, but company debt levels are too high and
simply cannot be sustained. When the company was formed in March 1998, it took
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Imperial Home Decor Files... p/2
on debt levels that assumed continued sales volume in Russia and Eastern Europe.
Those sales were not realized due to the dramatic and unexpected economic
downturn that occurred in those markets shortly thereafter. While our business
plan for 2000 is for improved sales and operating performance at all locations,
sales in North America and local U.K. markets were lower than anticipated in
1998 and 1999. The end result is that while we have a profitable business, we
have an unsustainable level of debt. Restructuring our debt under chapter 11
will remedy this situation and enable the company to build for the future."
IHDG also announced today that the bankruptcy court granted immediate
approval to borrow up to $25 million on its newly obtained, two-year
Debtor-in-Possession (DIP) credit facility from The Chase Manhattan Bank for
up-to-$75 million. A court hearing to approve the Company's use of the balance
of those funds is scheduled for Wednesday, February 2, 2000.
Subject to certain terms and conditions, the DIP financing will be used
for employee salaries and benefits, materials and services from vendors,
customer promotional programs, ongoing operations and other working capital
needs. "We believe our DIP financing will provide more than ample funds to cover
the company's global financial needs throughout the reorganization period," said
Levin. "Our customers should rest assured that it is business as usual and our
employees should know that their paychecks and benefits remain fully in effect."
Levin said the Company expects to complete its previously announced
North American Integration Plan to reduce costs, improve operations and increase
profitability in the coming year. "To better serve customers, we repositioned
our sales force on key national accounts, the dealer market, the
designer/decorator and domestics businesses. We introduced new merchandising
programs to major customers, developed numerous award-winning product designs,
and increased licensing programs and distribution agreements with well-known
brands such as Disney, Warner Bros., Nautica, Eddie Bauer, Thomas Kinkade,
Alexander Julian, and Ralph Lauren," he explained.
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Imperial Home Decor Files... p/3
Levin also cited a variety of recently accomplished manufacturing
initiatives: "In our Canadian operations, we enhanced management strength and
made significant progress on improving factory cycle times. In Knoxville,
Tennessee, we launched a new finishing process. We consolidated bookmaking into
our Streator, Illinois facility. And new production planning rules throughout
our factories are increasing customer service levels. Our employees made these
valuable contributions a reality."
Levin went on to say that, under a new managing director, IHDG's
progress in the U.K. includes advancements on a restructuring plan to reduce
costs and improve profitability, and strong efforts to position IHDG to regain
market share. He also said that Vernon Plastics has had one of its best years
ever with particularly good successes in pool liners, and has identified key
profit improvement initiatives for the coming year. Levin concluded by saying
that, in the coming year, the Company will continue evaluating all of its
production facilities on a worldwide basis to assess further opportunities to
improve efficiencies or reduce costs.
Finally, the Company announced that The Imperial Home Decor Group Inc.
board of directors has initiated a search for a replacement for its former
president and chief executive, James P. Toohey, who has left the Company to
pursue other interests. Levin has assumed additional duties as acting chief
executive officer.
Imperial Home Decor Group is the world's largest designer, manufacturer
and distributor of residential wallcoverings products. Headquartered in
Cleveland, Ohio, Imperial Home Decor Group supplies home centers, national
chains, mass merchants and home decorators. The Company was created in 1988
through the merger of Imperial Wallcoverings and Borden Decorative Products. In
1998, Imperial Home Decor Group reported net sales of $416.7 million.
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Imperial Home Decor Files... p/4
Note: This press release includes statements that may constitute forward-looking
statements made pursuant to the safe harbor provisions of the Private Securities
Litigation Reform Act of 1995. Statements such as "develop and implement,"
"operate normally," "improved sales and profitability," "build for the future,"
and "regain market share," are forward-looking in nature. These statements are
subject to risks and uncertainties that could cause actual results to differ
materially from the forward-looking statements. Such risks include, among other
factors, the acceptability of existing and potential products in the marketplace
and the ability to obtain sufficient capital to fund operations. Additional
factors, which could cause actual results to differ materially from expectations
in the forward-looking statements, are set forth in the Company's filings with
the Securities and Exchange Commission.
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