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Previous: CRAIG CORP, DEF 14A, 1998-11-25 |
Next: SALOMON SMITH BARNEY HOLDINGS INC, 424B2, 1998-11-25 |
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): November 20, 1998
ARTRA GROUP INCORPORATED
----------------------------------------------------
(Exact name of registrant as specified in its charter)
Pennsylvania
--------------------------------------------
State or Other Jurisdiction of Incorporation
1-3916 25-1095978
---------------------- -----------------
Commission File Number I.R.S. Employer
Identification No.
500 Central Avenue, Northfield, IL 60093
- -------------------------------------- --------
Address of principal executive offices Zip Code
Registrant's telephone number, including area code: (847) 441-6650
Not Applicable
- --------------------------------------------------------------------------------
Former name, former address and former fiscal year, if changed since last report
<PAGE>
Item 2. Acquisition or Disposition of Assets.
As of August 26, 1998, ARTRA GROUP Incorporated ("ARTRA" or
the "Registrant") and its wholly-owned subsidiary BCA
Holdings, Inc. ("BCA"), entered into an agreement to sell the
business assets, subject to the buyer's assumption of certain
liabilities, of BCA's wholly-owned subsidiary, Bagcraft
Corporation of America ("Bagcraft"). Bagcraft, a producer of
sandwich wraps, window bags, microwave popcorn bags and waxed
bags has manufacturing facilities in Chicago, Illinois and
Baxter Springs, Kansas. The transaction was completed on
November 20, 1998 and ARTRA received gross consideration of
$89,000,000 in cash, of which $84,000,000 was received for the
net business assets of Bagcraft and $5,000,000 was received as
consideration for a Non-Competition Agreement. A substantial
portion of the proceeds will be used to retire or otherwise
settle certain Bagcraft debt obligations. ARTRA anticipates
the net proceeds from the sale available to ARTRA, after the
disposition of the Bagcraft obligations noted above, will be
used to reduce ARTRA debt obligations and to acquire or
participate in new business opportunities.
Item 7. Financial Statements and Exhibits
(b) Pro Forma Financial Information
The following unaudited pro forma condensed consolidated financial
information of ARTRA GROUP Incoporated are submitted herewith on the
indicated pages.
Page
----
Pro Forma Condensed Financial Information (Unaudited):
Pro Forma Unaudited Condensed Balance Sheet
as of September 30, 1998 F-1
Pro Forma Unaudited Condensed Combined Statement of
Income for the nine months ended September 30, 1998 F-2
Pro Forma Unaudited Condensed Combined Statement of
Income for the year ended December 31, 1997 F-3
<PAGE>
(c) Exhibits
99.1* Assets Purchase Agreement, dated as of August 26,
1998, by and among ARTRA GROUP Incorporated, BCA
Holdings, Inc., Bagcraft Corporation of America
("Bagcraft"), ("Sellers") and Packaging Dynamics
Dynamics L.L.C. and Bagcraft Acquisition
L.L.C.("Buyers") regarding purchase of the business
assets, subject to Buyer's assumption of certain
liabilities, of Bagcraft.
99.2 Press Release dated November 23, 1998.
________________________________
* Incorporated by reference to the same Exhibit number of the
Company's Current Report on Form 8-K dated September 2, 1998.
<PAGE>
SIGNATURES
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 thereunder duly authorized.
ARTRA GROUP INCORPORATED
Registrant
Dated: November 25, 1998 /S/ JAMES D. DOERING
------------------------------------------
JAMES D. DOERING
Vice President and Chief Financial Officer
<PAGE>
ARTRA GROUP INCORPORATED AND SUBSIDIARIES
PRO FORMA CONDENSED CONSOLIDATED BALANCE SHEET
September 30, 1998
(Unaudited in Thousands)
<TABLE>
<CAPTION>
Less
Bagcraft
Net Assets Pro Forma
Historical Sold Adjustments Pro Forma
----------- ---------- ------------- ------------
(A)
CURRENT ASSETS
<S> <C> <C> <C> <C>
Cash and equivalents $160 $89,000 (B) $9,831
(52,015)(C)
(7,652)(D)
(15,232)(F)
(4,430)(G)
Receivables, net 10,137 ($9,990) 147
Inventories,net 16,751 (16,751) -
Available-for-sale securities 8,581 8,581
Other 857 (328) (230)(E) 299
----------- -----------
Total current assets 36,486 18,858
----------- -----------
Property,plant & equip, net 24,784 (24,784) -
Excess of cost over net assets acquired, net 2,548 (2,548)(E) -
Other 83 (83)(E) -
----------- ----------- ----------- -----------
$63,901 ($51,853) $6,810 $18,858
=========== =========== =========== ===========
CURRENT LIABILITIES
Notes payable $15,333 ($15,082)(F) $251
Current maturities of L-T debt 4,462 (4,462)(C) -
Accounts payable 7,162 (7,122) 40
Accrued liabilities 9,317 (4,114) (150)(F) 5,053
Income taxes payable 207 47 1,700 (H) 1,954
(2,269)(G)
Redeemable preferred stock 4,481 (2,212)(C) -
----------- -----------
40,962 7,298
----------- -----------
Long-term debt 44,409 (44,409)(C) -
Other noncurrent liabilities 4,670 (4,670)(D) -
Redeemable preferred stock 4,922 (2,161)(G) 2,761
Equity (Deficit) (31,062) 39,861 (H) 8,799
----------- ----------- ----------- -----------
$63,901 ($11,189) ($33,854) $18,858
=========== =========== =========== ===========
<FN>
Adjustments to the pro forma balance sheet consist of:
(A) Net Bagcraft assets purchased by buyer.
(B) Gross proceeds received from sale of Bagcraft net assets and related
non-compete agreement.
(C) Pay off Bagcraft outstanding debt and redeemable preferred stock
obligations.
(D) Pay off Bagcraft liabilities not assumed by buyer.
(E) Write-off miscellaneous assets not purchased by buyer.
(F) Pay down ARTRA Corporate short-term borrowings with proceeds from
sale.
(G) Pay off BCA Holdings redeemable preferred stock obligations.
(H) Gain on sale of Bagcraft net assets.
</FN>
</TABLE>
F-1
<PAGE>
ARTRA GROUP INCORPORATED AND SUBSIDIARIES
PRO FORMA CONDENSED CONSOLIDATED STATEMENT OF OPERATIONS
NINE MONTHS ENDED SEPTEMBER 30, 1998
(Unaudited in Thousands)
<TABLE>
<CAPTION>
Less Pro Forma
Historical Bagcraft Adjustments Pro Forma
----------- ----------- ----------- -----------
(A)
<S> <C> <C> <C> <C>
Net sales $94,717 ($94,717) $ -
----------- ----------- -----------
Costs and expenses:
Cost of goods sold,
exclusive of depreciation and amortization 77,212 (77,212) -
Selling, general and administrative 11,644 (9,953) 1,691
Depreciation and amortization 2,319 (2,319) -
----------- ----------- -----------
91,175 (89,484) 1,691
----------- ----------- -----------
Operating earnings (loss) 3,542 (5,233) (1,691)
----------- ----------- -----------
Other income (expense):
Interest expense (5,094) 2,300 $1,300 (B) (1,494)
Amortization of debt discount (493) 493 -
Realized gain on disposal of
available-for-sale securities 320 320
Other income (expense), net (90) 15 (75)
----------- ----------- -----------
(5,357) 2,808 (1,249)
----------- ----------- -----------
Loss from continuing operations before
income taxes and minority interest (1,815) (2,425) (2,940)
Provision for income taxes (46) (46)
Minority interest (411) 88 323 (C) -
----------- ----------- ----------- -----------
Loss from continuing operations (2,272) (2,337) $1,623 ($2,986)
=========== =========== =========== ===========
Per share loss from continuing operations
applicable to common shares:
Basic ($0.33) ($0.38)
=========== ===========
Diluted ($0.33) ($0.38)
=========== ===========
Weighted average number of shares
of common stock outstanding:
Basic 7,899 7,899
=========== ===========
Diluted 7,899 7,899
=========== ===========
<FN>
Adjustments to the pro forma statement of operations consist of:
(A) Reflect Bagacraft as a discontinued operation.
(B) Reduction of interest expense due to the assumed paydown of Corporate
notes payable.
(C) Reverse minority interest representing dividends accrued on BCA
Holdings redeemable preferred stock obligations paid off with proceeds
from sale of Bagcraft net assets.
</FN>
</TABLE>
F-2
<PAGE>
ARTRA GROUP INCORPORATED AND SUBSIDIARIES
PRO FORMA CONDENSED CONSOLIDATED STATEMENT OF OPERATIONS
YEAR ENDED DECEMBER 31, 1997 (Unaudited in Thousands)
<TABLE>
<CAPTION>
Less Pro Forma
Historical Bagcraft Adjustments Pro Forma
----------- ----------- ----------- -----------
(A)
<S> <C> <C> <C> <C>
Net sales $125,027 ($125,027) $ -
----------- ----------- -----------
Costs and expenses:
Cost of goods sold,
exclusive of depreciation and amortization 101,527 (101,527) -
Selling, general and administrative 19,548 (13,840) 5,708
Depreciation and amortization 4,364 (4,357) 7
----------- ----------- -----------
125,439 (119,724) 5,715
----------- ----------- -----------
Operating earnings (loss) (412) (5,303) (5,715)
----------- ----------- -----------
Other income (expense):
Interest expense (9,308) 3,130 $1,700 (B) (4,478)
Amortization of debt discount (2,702) 2,702 -
Realized gain on disposal of
available-for-sale securities 2,531 2,531
Litigation settlement 10,416 10,416
Other income (expense), net 1,338 (1,326) 12
----------- ----------- -----------
2,275 4,506 8,481
----------- ----------- -----------
Earnings (loss) from continuing operations before
income taxes and minority interest 1,863 (797) 2,766
Provision for income taxes 19 (19) -
Minority interest (1,109) 117 992 (C) -
----------- ----------- ----------- -----------
$773 ($699) $2,692 $2,766
=========== =========== =========== ===========
Per share earnings (loss) from continuing operations
applicable to common shares:
Basic ($0.04) $0.19
=========== ===========
Diluted ($0.04) $0.18
=========== ===========
Weighted average number of shares
of common stock outstanding:
Basic 7,970 7,970
=========== ===========
Diluted 7,970 8,093
=========== ===========
<FN>
Adjustments to the pro forma statement of operations consist of:
(A) Reflect Bagacraft as a discontinued operation.
(B) Reduction of interest expense due to the assumed paydown of Corporate
notes payable.
(C) Reverse minority interest representing dividends accrued on BCA
Holdings redeemable preferred stock obligations paid off with proceeds
from sale of Bagcraft net assets.
</FN>
</TABLE>
F-3
EXHIBIT 99.2
FOR: ARTRA GROUP INCORPORATED
500 CENTRAL AVENUE FOR IMMEDIATE RELEASE
NORTHFIELD, ILLINOIS 60093
Contact: Mr. Robert S. Gruber, Vice President (212) 628-2554
ARTRA GROUP INCORPORATED
COMPLETES SALE OF BAGCRAFT
Northfield, Ill., November 23, 1998 ----- ARTRA GROUP Incorporated
(NYSE:ATA) announced today that it had completed the sale of its wholly-owned
Bagcraft Corporation of America subsidiary to a new unit of IVEX Packaging
Corporation (NYSE:IXX) for approximately $89 million in cash.
ARTRA will use a portion of the proceeds from the sale to retire
Bagcraft senior debt and certain liabilities. Regarding the remainder of these
cash proceeds, ARTRA is currently reviewing several acquisition candidates.
Bagcraft is a producer of sandwich wraps, window bags, microwave
popcorn bags and waxed bags with manufacturing facilities in Chicago, Illinois
and Baxter Springs, Kansas.
ARTRA also owns approximately 10% of the common shares of COMFORCE
Corporation (ASE:CFS), a leader in professional staffing and consulting to
high-tech industries, with current annualized revenues of approximately $475
million.
Statements contained in this press release which are not historical
facts are forward-looking statements. Such forward-looking statements are
necessary estimates reflecting the best judgment of the party making such
statements based upon current information and involve a number of risks and
uncertainties. Forward-looking statements contained in the press release or in
other public statements of the parties should be considered in light of those
factors. There can be no assurance that such factors or other factors will not
reflect the accuracy of such forward-looking statements.
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