SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-Q
X QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
------ SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended September 28, 1995
--------------------
OR
TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF
-------- THE SECURITIES EXCHANGE ACT OF 1934
For the transition period from to
----------- ---------
Commission file number 0-5485
----------
ENVIRODYNE INDUSTRIES, INC.
---------------------------------------------
(Exact name of registrant as specified in its charter)
Delaware 95-2677354
- ------------------------------- -----------------
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
701 Harger Road, Suite 190, Oak Brook, Illinois 60521
- ----------------------------------------------- ----------
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code: (708) 571-8800
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 X No
----- -----
APPLICABLE ONLY TO REGISTRANTS INVOLVED IN BANKRUPTCY
PROCEEDINGS DURING THE PRECEDING FIVE YEARS: Indicate by check
mark whether the registrant has filed all documents and reports
required to be filed by Section 12, 13 or 15(d) of the Securities
Exchange Act of 1934 subsequent to the distribution of securities
under a plan confirmed by a court. Yes X No
----- ------
As of November 10, 1995, there were 13,515,000 shares
outstanding of the registrant's Common Stock, $.01 par value.
<PAGE>
INDEX TO FINANCIAL STATEMENTS
ENVIRODYNE INDUSTRIES, INC. AND SUBSIDIARIES
UNAUDITED INTERIM CONSOLIDATED FINANCIAL STATEMENTS
Consolidated balance sheets at September 28, 1995
(unaudited) and December 29, 1994 4
Unaudited consolidated statements of operations for
the three months ended September 28, 1995 and
September 29, 1994 and for the nine months ended
September 28, 1995 and September 29, 1994 5
Unaudited consolidated statements of cash flows for
the nine months ended September 28, 1995 and
September 29, 1994 6
Notes to consolidated financial statements 7
VISKASE HOLDING CORPORATION AND SUBSIDIARIES
UNAUDITED INTERIM CONSOLIDATED FINANCIAL STATEMENTS
Consolidated balance sheets at September 28, 1995
(unaudited) and December 29, 1994 24
Unaudited consolidated statements of operations
for the three months ended September 28, 1995
and September 29, 1994 and for the nine months
ended September 28, 1995 and September 29, 1994 25
Unaudited consolidated statements of cash flows
for the nine months ended September 28, 1995
and September 29, 1994 26
Notes to consolidated financial statements 27
PART I. FINANCIAL INFORMATION
ITEM 1. FINANCIAL STATEMENTS
--------------------
The financial information included in this quarterly report has
been prepared in conformity with the accounting principles and
practices reflected in the financial statements included in the
annual report on Form 10-K/A filed with the Securities and Exchange
Commission for the year ended December 29, 1994 (1994 Form 10-K/A).
These quarterly financial statements should be read in conjunction
with the financial statements and the notes thereto included in the
1994 Form 10-K/A. The accompanying financial information, which is
unaudited, reflects all adjustments which are, in the opinion of
management, necessary for a fair statement of the results for the
interim periods presented.
The condensed consolidated balance sheet as of December 29, 1994
was derived from the audited consolidated financial statements in
the Company's annual report of Form 10-K/A.
Reported interim results of operations are based in part on
estimates which may be subject to year-end adjustments. In
addition, these quarterly results of operations are not necessarily
indicative of those expected for the year.
<PAGE>
ENVIRODYNE INDUSTRIES, INC. AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
September 28, December 29,
1995 1994
------------- ------------
(in thousands)
ASSETS
Current assets:
Cash and equivalents $ 19,364 $ 7,289
Receivables, net 98,077 86,868
Inventories 115,260 110,483
Other current assets 22,627 19,466
-------- --------
Total current assets 255,328 224,106
Property, plant and equipment,
including those under capital
lease 533,192 506,099
Less accumulated depreciation
and amortization 65,786 35,761
-------- --------
Property, plant and
equipment, net 467,406 470,338
Deferred financing costs 8,505 9,143
Other assets 43,452 47,181
Excess reorganization value 137,997 145,868
-------- --------
$912,688 $896,636
======== ========
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Short-term debt
including current portion
of long-term debt and
obligation under capital
lease $ 12,644 $ 25,798
Accounts payable 42,480 34,335
Accrued liabilities 74,690 72,246
-------- --------
Total current liabilities 129,814 132,379
Long-term debt including obligation
under capital lease 529,729 489,358
Accrued employee benefits 56,061 56,217
Deferred and noncurrent income taxes 76,013 83,333
Commitments and contingencies
Stockholders' equity:
Preferred stock, $.01 par value;
none outstanding
Common stock, $.01 par value;
13,515,000 shares issued and
outstanding 135 135
Paid in capital 134,865 134,865
Accumulated (deficit) (19,495) (3,612)
Cumulative foreign currency
translation adjustments 5,566 3,961
-------- --------
Total stockholders' equity 121,071 135,349
-------- --------
$912,688 $896,636
======== ========
The accompanying notes are an integral part of the consolidated
financial statements.
<PAGE>
<TABLE>
ENVIRODYNE INDUSTRIES, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF OPERATIONS
<CAPTION>
Three Months Three Months Nine Months Nine Months
Ended September Ended September Ended September Ended September
28, 1995 29, 1994 28, 1995 29, 1994
--------------- --------------- --------------- ---------------
(in thousands, except for number of shares and per share amounts)
<S> <C> <C> <C> <C>
NET SALES $166,688 $151,883 $ 487,696 $445,264
Patent infringement settlement income 9,457
COSTS AND EXPENSES
Cost of sales 124,669 112,250 360,441 322,452
Selling, general and administrative 29,459 26,030 88,102 82,530
Amortization of intangibles
and excess reorganization value 3,907 3,848 11,722 11,535
-------- -------- --------- --------
OPERATING INCOME 8,653 9,755 27,431 38,204
Interest income 43 60 126 192
Interest expense 14,866 12,275 42,096 36,649
Other expense (income), net 1,305 (1,299) 166 (2,983)
Minority interest in loss of subsidiary 50
-------- -------- --------- --------
INCOME (LOSS) BEFORE INCOME
TAXES AND EXTRAORDINARY ITEM (7,475) (1,161) (14,705) 4,780
Income tax provision (benefit) (3,000) 2,100 (3,018) 7,100
-------- -------- --------- --------
(LOSS) BEFORE EXTRAORDINARY ITEM (4,475) (3,261) (11,687) (2,320)
Extraordinary loss, net of tax 4,196
-------- -------- --------- --------
NET (LOSS) $ (4,475) $ (3,261) $(15,883) $(2,320)
======== ======== ======== =======
WEIGHTED AVERAGE
COMMON SHARES 13,515,000 13,500,000 13,515,000 13,500,000
PER SHARE AMOUNTS:
(LOSS) BEFORE EXTRAORDINARY ITEM $(.33) $ (.24) $(.86) $(.17)
===== ======= ====== =====
NET (LOSS) $(.33) $ (.24) $(1.18) $(.17)
===== ======= ====== =====
<FN>
The accompanying notes are an integral part of the consolidated financial statements.
</TABLE>
<PAGE>
ENVIRODYNE INDUSTRIES, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS
<TABLE>
<CAPTION>
Nine Months Ended
------------------------------------------
September 28, September 29,
1995 1994
------------- ------------
(in thousands)
<S> <C> <C>
Cash flows from operating activities:
(Loss) before extraordinary item $(11,687) $(2,320)
Extraordinary (loss) on debt extinguishment (4,196)
-------- -------
Net (loss) (15,883) (2,320)
Adjustments to reconcile net (loss)
to net cash provided by operating activities:
Depreciation and amortization under capital lease 29,756 27,000
Amortization of intangibles and excess
reorganization value 11,722 11,535
Amortization of deferred financing fees and discount 1,604 1,106
Increase (decrease) in deferred and
noncurrent income taxes (7,773) 2,344
Loss on debt extinguishment 6,778
Foreign currency transaction (gain) (935) (3,843)
(Gain) on sales of property, plant and equipment (3) (33)
Changes in operating assets and liabilities:
Accounts receivable (10,369) (10,303)
Inventories (3,632) (9,624)
Other current assets (2,959) (3,294)
Accounts payable and accrued liabilities 9,555 9,559
Other (582) (1,725)
-------- -------
Total adjustments 33,162 22,722
-------- -------
Net cash provided by operating activities 17,279 20,402
Cash flows from investing activities:
Capital expenditures (24,208) (24,945)
Proceeds from sale of property, plant and equipment 47 89
Purchase of minority interest in subsidiary (4,200)
-------- -------
Net cash (used in) investing activities (24,161) (29,056)
Cash flows from financing activities:
Proceeds from revolving loan and long-term borrowings 206,053 16,275
Deferred financing costs (7,701) (245)
Repayment of revolving loan, long-term borrowings
and capital lease obligation (179,419) (10,774)
-------- -------
Net cash provided by financing activities 18,933 5,256
Effect of currency exchange rate changes on cash 24 756
-------- -------
Net increase (decrease) in cash and equivalents 12,075 (2,642)
Cash and equivalents at beginning of period 7,289 7,743
-------- -------
Cash and equivalents at end of period $ 19,364 $ 5,101
======== =======
- ------------------------------------------------------------
Supplemental cash flow information:
Interest paid $33,974 $29,453
Income taxes paid $ 4,537 $ 3,715
<FN>
The accompanying notes are an integral part of the consolidated financial statements.
</TABLE>
<PAGE>
ENVIRODYNE INDUSTRIES, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
1. CHAPTER 11 REORGANIZATION PROCEEDINGS, (dollars in
thousands)
On January 6, 1993, a group of bondholders filed an
involuntary petition for reorganization of Envirodyne
Industries, Inc. under Chapter 11 of the U.S. Bankruptcy Code.
On January 7, 1993 Viskase Corporation, Viskase Sales
Corporation, Viskase Holding Corporation, Clear Shield
National, Inc., Sandusky Plastics of Delaware, Inc., Sandusky
Plastics, Inc. and Envirodyne Finance Company each filed
voluntary petitions under Chapter 11 of the U.S. Bankruptcy
Code in the United States Bankruptcy Court for the Northern
District of Illinois, Eastern Division (the Bankruptcy Court).
On December 17, 1993, the Bankruptcy Court confirmed the First
Amended Joint Plan of Reorganization as twice modified (Plan
of Reorganization) with respect to Envirodyne Industries, Inc.
(Envirodyne) and certain of its subsidiaries. The Plan of
Reorganization was consummated and Envirodyne and certain of
its subsidiaries emerged from Chapter 11 on December 31, 1993
(Effective Date). For accounting purposes, the Plan of
Reorganization was deemed to be effective as of December 31,
1993.
The Plan of Reorganization provided for the initial issuance
of approximately 13,500,000 shares of Envirodyne common stock,
warrants to purchase an additional 1,500,000 shares (subject
to adjustment) and $219,262 principal amount of 10-1/4% Senior
Notes Due 2001 (10-1/4% Notes).
Holders of allowed general unsecured claims of Envirodyne (as
opposed to subsidiaries of Envirodyne) became entitled to
receive 32.28 shares of common stock for each five hundred
dollars of their prepetition claims, or a total of 8,070
shares of common stock, representing .06% of the common stock
initially issued pursuant to the Plan of Reorganization.
These claims totaled approximately $125. If the allowed
amount of general unsecured claims of Envirodyne exceeds $125,
for example upon the resolution of disputed claims, additional
shares of common stock will have to be issued to the holders
of allowed general unsecured claims of Envirodyne in order to
provide equitable allocation of value among Envirodyne's
unsecured creditors under the Plan of Reorganization. Such
additional shares of common stock would be distributed with
respect to allowed general unsecured claims of Envirodyne as
follows: (i) approximately 2.58 additional shares per five
hundred dollars in claims in the event allowed general
unsecured claims of Envirodyne are between $125 and $25,000;
(ii) approximately 5.61 additional shares per five hundred
dollars in claims in the event allowed general unsecured
claims of Envirodyne are between $25,000 and $50,000; (iii)
approximately 9.22 additional shares per five hundred dollars
in claims in the event allowed general unsecured claims of
Envirodyne are between $50,000 and $75,000; and (iv)
approximately 13.58 additional shares per five hundred dollars
in claims in the event allowed general unsecured claims of
Envirodyne are between $75,000 and $100,000. Refer to Note 5
for a discussion of disputed claims which, if determined
adversely to Envirodyne, would result in the issuance of
common stock.
The Company accounted for the reorganization using the
principles of fresh start reporting in accordance with the
American Institute of Certified Public Accountants Statement
of Position 90-7, "Financial Reporting by Entities in
Reorganization under the Bankruptcy Code." Accordingly, all
assets and liabilities were restated to reflect their
reorganization value. A reorganization value of the Company's
equity of $135,000 was based on the consideration of many
factors and various valuation methods, including discounted
cash flows and comparable multiples of earnings valuation
techniques believed by management and its financial advisors
to be representative of the Company's business and industry.
Factors considered by the Company included the following:
. Forecasted operating and cash flow results which
gave effect to the estimated impact of debt
restructuring and other operational reorganization.
. Discounted residual value at the end of the
forecasted period based on the capitalized cash
flows for the last year of that period.
. Competition and general economic considerations
. Projected sales growth
. Potential profitability
. Seasonality and working capital requirements
The excess of the reorganization value over the fair value of
net assets and liabilities has been reported as excess
reorganization value and is being amortized over a
fifteen-year period. The Company continues to evaluate the
recoverability of excess reorganization value based on the
operating performance and expected undiscounted future cash
flows of the operating business units.
2. INVENTORIES, (dollars in thousands)
Inventories consisted of:
September 28, December 29,
1995 1994
----------- -----------
Raw materials $ 20,365 $ 20,358
Work in process 38,376 37,613
Finished products 56,519 52,512
-------- --------
$115,260 $110,483
======== ========
Approximately 54% of the inventories at September 28, 1995
were valued at Last-In, First-Out (LIFO). These LIFO values
exceeded current manufacturing cost by approximately $3.4
million at September 28, 1995.
3. DEBT OBLIGATIONS, (dollars in thousands)
On June 20, 1995, Envirodyne completed the sale of $160,000
aggregate principal amount of senior secured notes to certain
institutional investors in a private placement. The senior
secured notes were issued pursuant to an indenture dated June
20, 1995 (Indenture) and consist of (i) $151,500 of 12% Senior
Secured Notes due 2000 and (ii) $8,500 of Floating Rate Senior
Secured Notes due 2000 (collectively, the Senior Secured
Notes). Envirodyne used the net proceeds of the offering
primarily to (i) repay the Company's $86,125 domestic term
loan, (ii) repay the $68,316 of obligations under the
Company's domestic and foreign revolving loans and (iii) pay
transaction fees and expenses. Concurrently with the June 20,
1995 placement, Envirodyne entered into a new $20,000 domestic
revolving credit facility (Revolving Credit Facility) and a
new $28,000 letter of credit facility (Letter of Credit
Facility). The Senior Secured Notes and the obligations under
the Revolving Credit Facility and the Letter of Credit
Facility are guaranteed by Envirodyne's significant domestic
subsidiaries and secured by a collateral pool (Collateral
Pool) comprised of: (i) all domestic accounts receivable
(including intercompany receivables) and inventory; (ii) all
patents, trademarks and other intellectual property (subject
to non-exclusive licensing agreements); (iii) substantially
all domestic fixed assets (other than assets subject to a
lease agreement with General Electric Capital Corporation);
and (iv) a senior pledge of 100% of the capital stock of
Envirodyne's significant domestic subsidiaries and 65% of the
capital stock of Viskase S.A. Such guarantees and security
are shared by the holders of the Senior Secured Notes and the
holders of the obligations under the Revolving Credit Facility
on a pari passu basis pursuant to an intercreditor agreement.
Pursuant to such intercreditor agreement, the security
interest of the holders of the obligations under the Letter of
Credit Facility has priority over all other liens on the
Collateral Pool.
The Company finances its working capital needs through a
combination of cash generated through operations and
borrowings under the Revolving Credit Facility. The
availability of funds under the Revolving Credit Facility is
subject to the Company's compliance with certain covenants
(which are substantially similar to those included in the
Indenture), borrowing base limitations measured by accounts
receivable and inventory of the Company and reserves which may
be established at the discretion of the lenders. Currently,
there are no drawings under the Revolving Credit Facility.
The available borrowing capacity under the Revolving Credit
Facility was $20 million at September 28, 1995.
The Company recognized an extraordinary loss of $6,778
representing the write-off of deferred financing fees related
to the June 20, 1995 debt refinancing. The extraordinary
loss, net of applicable income taxes of $2,582, was included
in the Company's Statement of Operations for the quarter ended
June 29, 1995.
The $151,500 tranche of Senior Secured Notes bears interest at
a rate of 12% per annum and the $8,500 tranche bears interest
at a rate equal to the six month London Interbank Offered Rate
(LIBOR) plus 575 basis points. The initial interest rate on
the floating rate tranche was approximately 11.7%. The
interest rate on the floating rate tranche is reset semi-
annually on June 15 and December 15. Interest on the Senior
Secured Notes is payable each June 15 and December 15,
commencing December 15, 1995.
On June 15, 1999, $80,000 of the aggregate principal amount of
the Senior Secured Notes is subject to a mandatory redemption.
The remaining principal amount outstanding will mature on June
15, 2000.
In the event the Company has Excess Cash Flow (as defined) in
excess of $5,000 in any fiscal year, beginning with fiscal
1995, Envirodyne will be required to make an offer to purchase
Senior Secured Notes together with any borrowed money
obligations outstanding under the Revolving Credit Facility,
on a pro rata basis, in an amount equal to the Excess Cash
Flow at a purchase price of 100% plus any accrued interest to
the date of purchase.
The Senior Secured Notes are redeemable, in whole or from time
to time in part, at Envirodyne's option, at the greater of (i)
the outstanding principal amount or (ii) the present value of
the expected future cash flows from the Senior Secured Notes
discounted at a rate equal to the Treasury Note yield
corresponding closest to the remaining average life of the
Senior Secured Notes at the time of prepayment plus 100 basis
points; plus accrued interest thereon to the date of purchase.
----
Upon the occurrence of a Change of Control (which includes the
acquisition by any person of more than 50% of Envirodyne's
Common Stock), each holder of the Senior Secured Notes has the
right to require the Company to repurchase such holder's
Senior Secured Notes at a price equal to the greater of (i)
the outstanding principal amount or (ii) the present value of
the expected cash flows from the Senior Secured Notes
discounted at a rate equal to the Treasury Note yield
corresponding closest to the remaining average life of the
Senior Secured Notes at the time of prepayment plus 100 basis
points; plus accrued interest thereon to the date of purchase.
----
The Indenture contains covenants with respect to Envirodyne
and its subsidiaries limiting (subject to a number of
important qualifications), among other things, (i) the ability
to pay dividends or redeem or repurchase common stock, (ii)
the incurrence of indebtedness, (iii) the creation of liens,
(iv) certain affiliate transactions and (v) the ability to
consolidate with or merge into another entity and to dispose
of assets.
Borrowings under the Revolving Credit Facility bear interest
at a rate per annum equal to the three month London Interbank
Offered Rate (LIBOR) on the first day of each calendar quarter
plus 300 basis points. The Revolving Credit Facility expires
on June 20, 1998.
Envirodyne has entered into interest rate agreements that cap
$50 million of interest rate exposure at an average LIBOR rate
of 6.50% until January 1997. These interest rate cap
agreements were entered into under terms of the senior bank
financing that was repaid on June 20, 1995. Interest expense
includes $459 of amortization of the interest rate cap premium
during the nine-month period ended September 28, 1995.
Envirodyne has not received any payments under the interest
rate protection agreements.
The Letter of Credit Facility expires on June 20, 1998. Fees
on the outstanding amount of letters of credit are 2.0% per
annum, with an issuance fee of 0.5% on the face amount of the
letter of credit. There is a commitment fee of 0.5% per annum
on the unused portion of the Letter of Credit Facility.
<PAGE>
Had the refinancing taken place at the beginning of 1995, the
pro forma Envirodyne consolidated statement of operations
would have been:
(in thousands, except for number of shares
and per share amounts)
Pro forma Nine Months
Ended September 28, 1995
-----------------------
Net sales $487,696
Cost of sales 360,441
Selling, general and administrative 88,102
Amortization of intangibles and
excess reorganization cost 11,722
--------
Operating income 27,431
Interest income 126
Interest expense 44,960
Other expense (income), net 166
--------
(Loss) before income taxes (17,569)
Income tax (benefit) (4,135)
--------
Net (loss) $(13,434)
========
Weighted average common shares 13,515,000
Net (loss) per share $(.99)
=====
The pro forma information reflects the change in interest
expense and related tax effect due to the issuance of $160
million principal amount of Senior Secured Notes and the
refinancing of the Company's bank debt.
The $219,262 principal amount of 10-1/4% Notes were issued
pursuant to an Indenture dated as of December 31, 1993
(10-1/4% Note Indenture) between Envirodyne and Bankers Trust
Company, as Trustee. The 10-1/4% Notes are the unsecured
senior obligations of Envirodyne, bear interest at the rate of
10-1/4% per annum, payable on each June 1 and December 1, and
mature on December 1, 2001. The 10-1/4% Notes are redeemable,
in whole or from time to time in part, at the option of
Envirodyne, at the percentages of principal amount specified
below plus accrued and unpaid interest to the redemption date,
if the 10-1/4% Notes are redeemed during the twelve-month
period commencing on January 1 of the following years:
Year Percentage
--------------------- ---------------
1995 105%
1996 104%
1997 103%
1998 102%
1999 101%
2000 and thereafter 100%
The 10-1/4% Note Indenture contains covenants with respect to
Envirodyne and its subsidiaries limiting (subject to a number
of important qualifications), among other things, (i) the
ability to pay dividends on or redeem or repurchase capital
stock, (ii) the incurrence of indebtedness, (iii) certain
affiliate transactions and (iv) the ability of the Company to
consolidate with or merge with or into another entity or to
dispose of substantially all its assets.
Outstanding short-term and long-term debt consisted of:
September December
28, 1995 29, 1994
---------- ----------
Short-term debt, current maturity
of long-term debt, and capital
lease obligation:
Current maturity of Bank Term Loan $11,100
Current maturity of Viskase
Capital Lease Obligation $ 6,012 5,450
Current maturity of Viskase
Limited Term Loan (5.2%) 1,955 1,882
Other 4,677 7,366
------- -------
Total short-term debt $12,644 $25,798
======= =======
Long-term debt:
Bank Credit Agreement:
Term Loan due 1999 $ 80,575
Revolving Loan due 1999 32,524
12% Senior Secured Notes due 2000 $160,000
10.25% Senior Notes due 2001 219,262 219,262
Viskase Capital Lease Obligation 141,182 147,194
Viskase Limited Term Loan (5.2%) 7,867 8,466
Other 1,418 1,337
-------- --------
Total long-term debt $529,729 $489,358
======== ========
The fair value of the Company's debt obligation (excluding
capital lease obligation) is estimated based upon the quoted
market prices for the same or similar issues or upon the
current rates offered to the Company for the debt of the same
remaining maturities. At September 28, 1995, the carrying
amount and estimated fair value of debt obligations (excluding
capital lease obligation) were $394,970 and $345,725,
respectively.
On December 28, 1990, Viskase and GECC entered into a sale and
leaseback transaction. The sale and leaseback of assets
included the production and finishing equipment at Viskase's
four domestic casing production and finishing facilities. The
facilities are located in Chicago, Illinois; Loudon,
Tennessee; Osceola, Arkansas and Kentland, Indiana. Viskase,
as the Lessee under the relevant agreements, will continue to
operate all of the facilities. The lease has been accounted
for as a capital lease.
The principal terms of the sale and leaseback transaction
include: (a) a 15 year basic lease term (plus selected
renewals at Viskase's option), (b) annual rent payments in
advance beginning in February 1991, and (c) a fixed price
purchase option at the end of the basic 15 year term and fair
market purchase options at the end of the basic term and each
renewal term. Further, the Lease Documents contain covenants
requiring maintenance by the Company of certain financial
ratios and restricting the Company's ability to pay dividends,
make payments to affiliates, make investments and incur
indebtedness.
Annual rental payments under the Lease will be approximately
$19.2 million through 1997, $21.4 million in 1998 and $23.5
million through the end of the basic 15-year term. Viskase is
required to provide credit support consisting of a standby
letter of credit in an amount up to one year's rent through at
least 1997. This credit support can be reduced up to $4
million currently if the Company achieves and maintains
certain financial ratios. As of September 28, 1995, the
Company had met the required financial ratios and the letter
of credit has been reduced by $4 million. The letter can be
further reduced in 1997 or eliminated after 1998 if the
Company achieves and maintains certain financial ratios.
Envirodyne and its other principal subsidiaries guaranteed the
obligations of Viskase under the Lease.
The following is a schedule of minimum future lease payments
under the capital lease together with the present value of the
net minimum lease payments as of September 28, 1995:
Year ending December
1996 $ 19,227
1997 19,227
1998 21,363
1999 23,499
2000 23,499
Thereafter 117,495
--------
Net minimum lease payments 224,310
Less:
Amount representing interest (77,116)
--------
$147,194
========
The 1995 rental payment of $19,227 was paid on February 28,
1995. Principal payments under the capital lease obligation
for the years ended 1995 through 1999 range from approximately
$5 million to $13 million.
Aggregate maturities of remaining long-term debt, after
reflecting the June 20, 1995 refinancing, for each of the next
five fiscal years are:
Total
--------------
1995 (last six months only) $ 3,181
1996 8,258
1997 8,880
1998 11,920
1999 95,082
4. SUBSIDIARY GUARANTORS
Envirodyne's payment obligations under the Senior Secured
Notes are fully and unconditionally guaranteed on a joint and
several basis (collectively, Subsidiary Guarantees) by Viskase
Corporation, Viskase Holding Corporation, Viskase Sales
Corporation, Clear Shield National, Inc., Sandusky Plastics,
Inc. and Sandusky Plastics of Delaware, Inc., each a direct or
indirect wholly-owned subsidiary of Envirodyne and each a
"Guarantor." These subsidiaries represent substantially all of
the operations of Envirodyne conducted in the United States.
The remaining subsidiaries of Envirodyne generally are foreign
subsidiaries or otherwise relate to foreign operations.
The obligations of each Guarantor under its Subsidiary
Guarantee are the senior obligation of such Guarantor, and are
collateralized, subject to certain permitted liens, by
substantially all of the domestic assets of the Guarantor and,
in the case of Viskase Holding Corporation, by a pledge of 65%
of the capital stock of Viskase S.A. The Subsidiary
Guarantees and security are shared with the lenders under the
Revolving Credit Agreement on a pari passu basis and are
subject to the priority interest of the holders of obligations
under the Letter of Credit Facility, each pursuant to an
intercreditor agreement.
The following consolidating condensed financial data
illustrate the composition of the combined Guarantors. No
single Guarantor has any significant legal restrictions on the
ability of investors or creditors to obtain access to its
assets in the event of default on the Subsidiary Guarantee
other than its subordination to senior indebtedness described
above. Separate financial statements of the Guarantors are
not presented because management has determined that these
would not be material to investors. Based on the book value
and the market value of the pledged securities of Viskase
Corporation, Viskase Sales Corporation, Clear Shield National,
Inc., Sandusky Plastics, Inc. and Sandusky Plastics of
Delaware, Inc., these Subsidiary Guarantors do not constitute
a substantial portion of the collateral and, therefore, the
separate financial statements of these subsidiaries have not
been provided. Separate unaudited interim financial
statements of Viskase Holding Corporation are being filed
within this quarterly report.
Investments in subsidiaries are accounted for by the parent
and Subsidiary Guarantors on the equity method for purposes of
the supplemental consolidating presentation. Earnings of
subsidiaries are therefore reflected in the parent's and
Subsidiary Guarantors' investment accounts and earnings. The
principal elimination entries eliminate investments in
subsidiaries and intercompany balances and transactions.
<PAGE>
ENVIRODYNE INDUSTRIES, INC. AND SUBSIDIARIES
CONSOLIDATING BALANCE SHEETS
SEPTEMBER 28, 1995
<TABLE>
<CAPTION>
Guarantor Nonguarantor Consolidated
Parent Subsidiaries Subsidiaries Eliminations (1) Total
-------- ------------ ------------- ------------ -------------
(in thousands)
<S> <C> <C> <C> <C> <C>
ASSETS
Current assets:
Cash and equivalents $ 11,528 $ (1,556) $ 9,392 $ 19,364
Receivables and advances, net 57,625 75,785 58,433 $ (93,766) 98,077
Inventories 70,382 46,835 (1,957) 115,260
Other current assets 854 14,748 7,025 22,627
-------- -------- -------- --------- --------
Total current assets 70,007 159,359 121,685 (95,723) 255,328
Property, plant and equipment
including those under
capital lease 261 386,023 146,908 533,192
Less accumulated depreciation
and amortization 132 48,204 17,450 65,786
-------- -------- -------- --------- --------
Property, plant and equipment, net 129 337,819 129,458 467,406
Deferred financing costs 8,471 34 8,505
Other assets 42,020 1,432 43,452
Investment in subsidiaries 79,714 115,688 (195,402)
Excess reorganization value 96,280 41,717 137,997
-------- -------- -------- --------- --------
$158,321 $751,166 $294,326 $(291,125) $912,688
======== ======== ======== ========= ========
LIABILITIES &
STOCKHOLDERS' EQUITY
Current liabilities:
Short-term debt including
current portion of
long-term debt and
obligation under
capital lease $ 6,175 $ 6,469 $ 12,644
Accounts payable and advances $ 49 86,045 50,152 $ (93,766) 42,480
Accrued liabilities 19,055 32,354 23,281 74,690
-------- -------- -------- --------- --------
Total current liabilities 19,104 124,574 79,902 (93,766) 129,814
Long-term debt including
obligation under capital lease 379,262 141,761 8,706 529,729
Accrued employee benefits 51,932 4,129 56,061
Deferred and noncurrent
income taxes 27,433 25,472 23,108 76,013
Intercompany loans (388,549) 340,000 48,607 (58)
Commitments and contingencies
Stockholders' equity:
Preferred stock, $.01 par value;
none outstanding
Common stock, $.01 par value;
13,515,000 shares issued and
outstanding 135 3 32,738 (32,741) 135
Paid in capital 134,865 83,666 89,524 (173,190) 134,865
Accumulated earnings (deficit) (19,495) (21,760) 2,094 19,666 (19,495)
Cumulative foreign currency
translation adjustments 5,566 5,518 5,518 (11,036) 5,566
Total stockholders' equity 121,071 67,427 129,874 (197,301) 121,071
-------- -------- -------- --------- --------
$158,321 $751,166 $294,326 $(291,125) $912,688
======== ======== ======== ========= ========
<FN>
(1) Elimination of intercompany receivables, payables and investment accounts.
</TABLE>
<PAGE>
ENVIRODYNE INDUSTRIES, INC. AND SUBSIDIARIES
CONSOLIDATING BALANCE SHEETS
DECEMBER 29, 1994
<TABLE>
<CAPTION>
Guarantor Nonguarantor Consolidated
Parent Subsidiaries Subsidiaries Eliminations (1) Total
-------- ------------ ------------- ------------ -------------
(in thousands)
<S> <C> <C> <C> <C> <C>
ASSETS
Current assets:
Cash and equivalents $ 555 $ 1,853 $ 4,881 $ 7,289
Receivables and advances, net 33,508 63,949 49,378 $ (59,967) 86,868
Inventories 68,719 43,725 (1,961) 110,483
Other current assets 181 12,999 6,286 19,466
-------- -------- -------- --------- --------
Total current assets 34,244 147,520 104,270 (61,928) 224,106
Property, plant and equipment
including those under capital
lease 189 367,880 138,030 506,099
Less accumulated depreciation
and amortization 55 26,739 8,967 35,761
-------- -------- -------- --------- --------
Property, plant and equipment, net 134 341,141 129,063 470,338
Deferred financing costs 8,062 1,081 9,143
Other assets 45,757 1,424 47,181
Investment in subsidiaries 91,576 116,360 (207,936)
Excess reorganization value 102,230 43,638 145,868
-------- -------- -------- --------- --------
$134,016 $753,008 $279,476 $(269,864) $896,636
======== ======== ======== ========= ========
LIABILITIES &
STOCKHOLDERS' EQUITY
Current liabilities:
Short-term debt including
current portion of
long-term debt and
obligation under
capital lease $ 11,100 $ 7,720 $6,978 $ 25,798
Accounts payable and advances 726 53,193 40,383 $ (59,967) 34,335
Accrued liabilities 10,254 36,634 25,358 72,246
-------- -------- -------- --------- --------
Total current liabilities 22,080 97,547 72,719 (59,967) 132,379
Long-term debt including
obligation under capital lease 327,437 147,898 14,023 489,358
Accrued employee benefits 52,248 3,969 56,217
Deferred and noncurrent
income taxes 29,006 31,927 22,400 83,333
Intercompany loans (379,856) 340,000 39,856
Commitments and contingencies
Stockholders' equity:
Preferred stock, $.01 par value;
none outstanding
Common stock, $.01 par value;
13,515,000 shares issued and
outstanding 135 4 32,608 (32,612) 135
Paid in capital 134,865 87,805 87,440 (175,245) 134,865
Accumulated earnings (deficit) (3,612) (8,333) 2,549 5,784 (3,612)
Cumulative foreign currency
translation adjustments 3,961 3,912 3,912 (7,824) 3,961
-------- -------- -------- --------- --------
Total stockholders' equity 135,349 83,388 126,509 (209,897) 135,349
-------- -------- -------- --------- --------
$134,016 $753,008 $279,476 $(269,864) $896,636
======== ======== ======== ========= ========
<FN>
(1) Elimination of intercompany receivables, payables and investment accounts.
</TABLE>
<PAGE>
ENVIRODYNE INDUSTRIES, INC. AND SUBSIDIARIES
CONSOLIDATING STATEMENTS OF OPERATIONS
FOR NINE MONTHS ENDED SEPTEMBER 28, 1995
<TABLE>
<CAPTION>
Guarantor Nonguarantor Consolidated
Parent Subsidiaries Subsidiaries Eliminations Total
-------- ------------ ------------- ------------ -------------
(in thousands)
<S> <C> <C> <C> <C> <C>
NET SALES $317,424 $196,627 $(26,355) $487,696
COSTS AND EXPENSES
Cost of sales 236,071 150,729 (26,359) 360,441
Selling, general and
administrative $4,734 49,977 33,391 88,102
Amortization of intangibles
and excess reorganization
value 9,199 2,523 11,722
-------- -------- -------- -------- --------
OPERATING INCOME (LOSS) (4,734) 22,177 9,984 4 27,431
Interest income 34 42 50 126
Interest expense 29,159 10,412 2,525 42,096
Intercompany interest
expense (income) (28,417) 25,500 2,917
Management fees (income) (5,550) 4,820 730
Other expense (income), net (1,607) 129 1,644 166
Equity Loss (income)
in subsidiary 13,423 455 (13,878)
-------- -------- -------- -------- --------
INCOME (LOSS) BEFORE
INCOME TAXES
AND EXTRAORDINARY ITEM (11,708) (19,097) 2,218 13,882 (14,705)
Income tax provision (benefit) 669 (5,670) 1,983 (3,018)
-------- -------- -------- -------- --------
INCOME (LOSS) BEFORE
EXTRAORDINARY ITEM (12,377) (13,427) 235 13,882 (11,687)
Extraordinary loss, net of tax 3,506 690 4,196
-------- -------- -------- -------- --------
NET INCOME (LOSS) $(15,883) $ (13,427) $ (455) $ 13,882 $(15,883)
======== ========= ====== ========= ========
</TABLE>
CONSOLIDATING STATEMENTS OF OPERATIONS
FOR THREE MONTHS ENDED SEPTEMBER 28, 1995
<TABLE>
<CAPTION>
Guarantor Nonguarantor Consolidated
Parent Subsidiaries Subsidiaries Eliminations Total
-------- ------------ ------------- ------------ -------------
(in thousands)
<S> <C> <C> <C> <C> <C>
NET SALES $106,244 $67,413 $ (6,969) $166,688
COSTS AND EXPENSES
Cost of sales 81,384 50,370 (7,085) 124,669
Selling, general
and administrative $ 1,609 16,586 11,264 29,459
Amortization of intangibles
and excess reorganization
value 3,066 841 3,907
-------- -------- -------- -------- --------
OPERATING INCOME (LOSS) (1,609) 5,208 4,938 116 8,653
Interest income 30 4 9 43
Interest expense 10,927 3,379 560 14,866
Intercompany interest
expense (income) (9,976) 8,500 1,476
Management fees (income) (1,850) 1,601 249
Other expense (income), net 1,107 120 78 1,305
Equity loss (income)
in subsidiary 3,351 (1,914) (1,437)
-------- -------- -------- -------- --------
INCOME (LOSS) BEFORE INCOME TAXES
AND EXTRAORDINARY ITEM (5,138) (6,474) 2,584 1,553 (7,475)
Income tax provision (benefit) (663) (3,007) 670 (3,000)
-------- -------- -------- -------- --------
NET INCOME (LOSS) $(4,475) $ (3,467) $ 1,914 $1,553 $(4,475)
======= ======== ======= ====== =======
</TABLE>
<PAGE>
ENVIRODYNE INDUSTRIES, INC. AND SUBSIDIARIES
CONSOLIDATING CASH FLOWS
FOR NINE MONTHS ENDED SEPTEMBER 28, 1995
<TABLE>
<CAPTION>
Guarantor Nonguarantor Consolidated
Parent Subsidiaries Subsidiaries Eliminations Total
-------- ------------ ------------- ------------ -------------
(in thousands)
<S> <C> <C> <C> <C> <C>
Net cash provided by (used in)
operating activities $ (13,300) $ 23,209 $7,370 $ 17,279
Cash flows from
investing activities:
Capital expenditures (34) (18,936) (5,238) (24,208)
Proceeds from sale
of property, plant and
equipment 47 47
--------- -------- ------ -------- --------
Net cash (used in)
investing activities (34) (18,936) (5,191) (24,161)
Cash flows from
financing activities:
Proceeds from revolving
loan and long term
borrowings 164,000 42,053 206,053
Deferred financing costs (7,667) (34) (7,701)
Repayment of revolving loan,
long-term borrowings and
capital lease obligations (123,275) (7,682) (48,462) (179,419)
Increase (decrease) in
Envirodyne loan (8,751) 8,751
--------- -------- ------ -------- --------
Net cash provided by
(used in) financing
activities 24,307 (7,682) 2,308 18,933
Effect of currency exchange
rate changes on cash 24 24
--------- -------- ------ -------- --------
Net increase (decrease) in cash
and equivalents 10,973 (3,409) 4,511 12,075
Cash and equivalents at beginning
of period 555 1,853 4,881 7,289
--------- -------- ------ -------- --------
Cash and equivalents at end
of period $ 11,528 $ (1,556) $9,392 $19,364
========= ======== ====== ======== ========
</TABLE>
<PAGE> ENVIRODYNE INDUSTRIES, INC. AND SUBSIDIARIES
CONSOLIDATING STATEMENTS OF OPERATIONS
FOR NINE MONTHS ENDED SEPTEMBER 29, 1994
<TABLE>
<CAPTION>
Guarantor Nonguarantor Consolidated
Parent Subsidiaries Subsidiaries Eliminations Total
-------- ------------ ------------- ------------ -------------
(in thousands)
<S> <C> <C> <C> <C> <C>
NET SALES $308,997 $158,400 $(22,133) $445,264
Patent infringement
settlement income 9,457 9,457
COSTS AND EXPENSES
Cost of sales 222,677 121,313 (21,538) 322,452
Selling, general and
administrative $4,777 55,000 22,753 82,530
Amortization of intangibles
and excess reorganization
value 9,197 2,338 11,535
-------- -------- -------- --------- --------
OPERATING INCOME (LOSS) (4,777) 31,580 11,996 (595) 38,204
Interest income 13 20 159 192
Interest expense 23,591 10,490 2,568 36,649
Intercompany interest
expense (income) (25,612) 22,701 2,911
Management fees (income) (5,550) 4,838 712
Other expense (income), net (3,825) (58) 900 (2,983)
Equity loss (income)
in subsidiary 6,319 (1,612) (4,707)
Minority interest in
loss of subsidiary 50 50
-------- -------- -------- --------- --------
INCOME (LOSS) BEFORE
INCOME TAXES 313 (4,759) 5,064 4,162 4,780
Income tax provision 2,633 1,015 3,452 7,100
-------- -------- -------- --------- --------
NET INCOME (LOSS) $(2,320) $ (5,774) $1,612 $ 4,162 $ (2,320)
======== ======== ======== ========= ========
</TABLE>
CONSOLIDATING STATEMENTS OF OPERATIONS
FOR THREE MONTHS ENDED SEPTEMBER 29, 1994
<TABLE>
<CAPTION>
Guarantor Nonguarantor Consolidated
Parent Subsidiaries Subsidiaries Eliminations Total
-------- ------------ ------------- ------------ -------------
(in thousands)
<S> <C> <C> <C> <C> <C>
NET SALES $102,843 $56,515 $(7,475) $151,883
COSTS AND EXPENSES
Cost of sales 75,590 43,883 (7,223) 112,250
Selling, general
and administrative $1,595 16,545 7,890 26,030
Amortization of intangibles
and excess reorganization
value 3,068 780 3,848
-------- -------- -------- -------- --------
OPERATING INCOME (LOSS) (1,595) 7,640 3,962 (252) 9,755
Interest income 10 50 60
Interest expense 7,963 3,478 834 12,275
Intercompany interest
expense (income) (9,444) 8,533 911
Management fees (income) (1,850) 1,613 237
Other expense (income), net (1,185) (34) (80) (1,299)
Equity loss (income)
in subsidiary 5,004 (1,657) (3,347)
-------- -------- -------- -------- --------
INCOME (LOSS) BEFORE INCOME TAXES (2,073) (4,293) 2,110 3,095 (1,161)
Income tax provision 1,188 459 453 2,100
-------- -------- -------- -------- --------
NET INCOME (LOSS) $(3,261) $ (4,752) $ 1,657 $ 3,095 $ (3,261)
======== ======== ======= ======= ========
</TABLE>
PAGE
<PAGE>
ENVIRODYNE INDUSTRIES, INC. AND SUBSIDIARIES
CONSOLIDATING CASH FLOWS
FOR NINE MONTHS ENDED SEPTEMBER 29, 1994
<TABLE>
<CAPTION>
Guarantor Nonguarantor Consolidated
Parent Subsidiaries Subsidiaries Eliminations Total
-------- ------------ ------------- ------------ -------------
(in thousands)
<S> <C> <C> <C> <C> <C>
Net cash provided by
(used in) operating
activities $(10,450) $24,247 $ 6,605 $20,402
Cash flows from
investing activities:
Capital expenditures (20) (15,858) (9,067) (24,945)
Proceeds from sales of
property, plant
and equipment 76 13 89
Purchase of minority
interest in subsidiary (4,200) (4,200)
-------- -------- -------- -------- --------
Net cash (used in)
investing activities (20) (19,982) (9,054) (29,056)
Cash flows from
financing activities:
Proceeds from revolving loan
and long term borrowings 6,450 9,825 16,275
Deferred financing costs (192) (53) (245)
Repayment of revolving loan,
long-term borrowings and
capital lease obligations (5,119) (5,655) (10,774)
Increase (decrease) in
Envirodyne loan 1,064 (1,064)
-------- -------- -------- -------- --------
Net cash provided by
(used in) financing
activities 7,322 (5,119) 3,053 5,256
-------- -------- -------- -------- --------
Effect of currency exchange
rate changes on cash 756 756
-------- -------- -------- -------- --------
Net increase (decrease) in cash
and equivalents (3,148) (854) 1,360 (2,642)
Cash and equivalents
at beginning of period 930 1,922 4,891 7,743
-------- -------- -------- -------- --------
Cash and equivalents
at end of period $ (2,218) $ 1,068 $ 6,251 $ 5,101
======== ======== ======= ======== ========
</TABLE>
<PAGE>
5. CONTINGENCIES, (dollars in thousands)
A class action lawsuit by former employees of subsidiary
corporations comprising most of the Company's former steel and
mining division (SMD) was pending as of the commencement of the
bankruptcy case in which the plaintiffs are seeking substantial
damages. The Company and the plaintiffs are currently
participating in a mediation process to attempt to resolve the
case. Envirodyne denies liability and believes it has sufficient
defenses to all of plaintiffs' claims. In the absence of
successful mediation or other settlement negotiations, the Company
will continue to vigorously defend these claims. While Envirodyne
cannot predict with certainty the outcome of these claims, when
ultimately concluded or adjudicated, these claims will not, in the
opinion of management, have a material adverse effect on the
results of operations or the financial condition of the Company.
However, inasmuch as the Plan of Reorganization provides for the
issuance of common stock with respect to prepetition Envirodyne
general unsecured claims (refer to Note 1), an adverse finding of
liability and damages could result in substantial dilution to the
holders of the common stock. If additional shares of common stock
have to be issued to the former SMD employees, as holders of
allowed Envirodyne general unsecured claims under the Plan of
Reorganization, such additional shares of common stock would be
distributed as follows: (i) approximately 2.58 additional shares
per five hundred dollars in claims in the event allowed general
unsecured claims of Envirodyne are between $125 and $25,000; (ii)
approximately 5.61 additional shares per five hundred dollars in
claims in the event allowed general unsecured claims of Envirodyne
are between $25,000 and $50,000; (iii) approximately 9.22
additional shares per five hundred dollars in the event allowed
general unsecured claims of Envirodyne are between $50,000 and
$75,000; and (iv) approximately 13.58 additional shares per five
hundred dollars in claims in the event allowed general unsecured
claims of Envirodyne are between $75,000 and $100,000 (refer to
Note 1).
Litigation has been initiated with respect to events arising out of
the bankruptcy cases and the 1989 acquisition of Envirodyne by
Emerald Acquisition Corporation (Emerald) with respect to which,
although Envirodyne is not presently a party to such litigation,
certain defendants have asserted indemnity rights against
Envirodyne. In ARTRA Group Incorporated v. Salomon Brothers
--------------------------------------------
Holding Company Inc, Salomon Brothers Inc, D.P. Kelly &
- -------------------------------------------------------
Associates, L.P., Donald P. Kelly, Charles K. Bobrinskoy, James L.
- ------------------------------------------------------------------
Massey, William Rifkind and Michael Zimmerman, Case No. 93 A 1616,
- ---------------------------------------------
United States Bankruptcy Court for the Northern District of
Illinois, Eastern Division (Bankruptcy Court), ARTRA Group
Incorporated (ARTRA) alleges breach of fiduciary duty and tortious
inference in connection with the negotiation and consummation of
the Plan of Reorganization. These claims were dismissed by the
Bankruptcy Court and ARTRA has filed an appeal to the U.S. District
Court for the Northern District of Illinois, Eastern Division,
which appeal is pending.
In ARTRA Group Incorporated v. Salomon Brothers Holding Company
------------------------------------------------------------
Inc, Salomon Brothers Inc, D.P. Kelly & Associates, L.P., Charles
- -----------------------------------------------------------------
K. Bobrinskoy and Michael Zimmerman, Case No. 93 L 2198, Circuit
- -----------------------------------
Court of the Eighteenth Judicial Circuit, County of DuPage, State
of Illinois, ARTRA alleges against Salomon Brothers Holding Company
Inc, Salomon Brothers Inc, Mr. Bobrinskoy and Mr. Zimmerman breach
of fiduciary duties of due care and loyalty, fraudulent
misrepresentation, negligent misrepresentation, breach of contract
and promissory estoppel, and seeks damages, jointly and severally
from such defendants in the total amount of $136.2 million plus
interest and punitive damages of $408.6 million. Against D.P.
Kelly & Associates, L.P., ARTRA alleges breach of contract and
promissory estoppel and seeks damages from D.P.Kelly & Associates,
L.P. in the total amount of $136.2 million. All allegations relate
to conduct of the parties during the 1989 acquisition of Envirodyne
by Emerald. D.P. Kelly & Associates, L.P. and Messrs.
Bobrinskoy, Massey, Rifkind and Zimmerman have asserted common law
and contractual rights of indemnity against Envirodyne for
attorneys' fees, costs and any ultimate liability relating to the
claims set forth in the complaints. Envirodyne is continuing its
evaluation of the merits of the indemnification claims against
Envirodyne and the underlying claims in the litigation. Upon the
undertaking of D.P. Kelly & Associates, L.P. to repay such funds in
the event it is ultimately determined that there is no right to
indemnity, Envirodyne is advancing funds to D.P. Kelly &
Associates, L.P. and Mr. Kelly for the payment of legal fees in the
case pending before the Bankruptcy Court. Although the case is in
a preliminary stage and the Company is not a party thereto, the
Company believes that the plaintiff's claims raise similar factual
issues to those raised in the Envirodyne bankruptcy cases which, if
resolved in a manner similar to that in the Envirodyne bankruptcy
cases, would render it difficult for the plaintiff to establish
liability. Accordingly, the Company believes that the
indemnification claims would not have a material adverse effect
upon the business or financial position of the Company, even if the
claimants were successful in establishing their right to
indemnification.
In the Envirodyne bankruptcy case the United States Environmental
Protection Agency (USEPA), the Economic Development Authority
(EDA), and Navistar International Transportation Corp. (Navistar
Transportation) filed proofs of claim with respect to unreimbursed
environmental response costs at the location of the former SMD
operations. Envirodyne, Navistar Transportation, EDA and USEPA
have negotiated a definitive settlement agreement, subject to final
approval by the Bankruptcy Court and public comment pursuant to
regulations applicable to EDA and USEPA, to settle the claims
against Envirodyne through the payment of five thousand dollars to
the USEPA and the issuance of 64,460 shares of common stock to
Navistar Transportation. In the event that the settlement is not
completed, Envirodyne believes that it has valid defenses to the
claims and will continue its objections to the claims. To the
extent that USEPA, EDA or Navistar Transportation were able to
establish liability and damages as to their respective proofs of
claim, such parties would receive Common Stock under the Plan of
Reorganization in satisfaction of their claims.
Certain of Envirodyne's stockholders prior to the acquisition of
Envirodyne by Emerald failed to exchange their certificates
representing old Envirodyne common stock for the $40 per share cash
merger consideration specified by the applicable acquisition
agreement. In the Envirodyne bankruptcy case, Envirodyne sought to
equitably subordinate the interests of the holders of untendered
shares, in which event such holders would receive no distribution
pursuant to the Plan of Reorganization. The Bankruptcy Court
granted Envirodyne's motion for summary judgment to equitably
subordinate the holders of untendered shares. The United States
District Court for the Northern District of Illinois has affirmed
the Bankruptcy Court's summary judgment. If such holders were
nonetheless ultimately successful in a further appeal of this
matter, Envirodyne believes that the maximum number of shares of
common stock that it would be required to issue to such claimants
is approximately 106,000.
Clear Shield National, Inc. and some of its employees have received
subpoenas from the Antitrust Division of the United States
Department of Justice relating to a grand jury investigation of the
disposable plastic cutlery industry. The U.S. Department of
Justice has advised a former officer of Clear Shield National that
he is a target of the investigation and requested his appearance
before the grand jury. Clear Shield National, Inc. is cooperating
fully with the investigation.
The Company and its subsidiaries are involved in various legal
proceedings arising out of its business and other environmental
matters, none of which is expected to have a material adverse
effect upon its results of operations, cash flows or financial
position.
<PAGE>
VISKASE HOLDING CORPORATION AND SUBSIDIARIES
The information included in these quarterly financial statements
has been prepared in conformity with the accounting principles and
practices reflected in the financial statements of Viskase Holding
Corporation and Subsidiaries that are being filed within this
quarterly report. These quarterly financial statements should be
read in conjunction with the financial statements and the notes
thereto of Viskase Holding Corporation and Subsidiaries. The
accompanying financial information, which is unaudited, reflects
all adjustments which are, in the opinion of management, necessary
for a fair statement of the results for the periods presented.
The condensed consolidated balance sheet as of December 29, 1994
was derived from the audited consolidated financial statements of
Viskase Holding Corporation and Subsidiaries that are being filed
within this quarterly report.
Reported quarterly results of operations are based in part on
estimates which may be subject to year-end adjustments. In
addition, these quarterly results of operations are not necessarily
indicative of those expected for the year.
<PAGE>
VISKASE HOLDING CORPORATION AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
September 28, December 29,
1995 1994
--------------- -------------
(in thousands)
ASSETS
Current assets:
Cash and equivalents $ 9,392 $ 6,201
Receivables, net 55,335 46,834
Receivables, affiliates 50,139 48,138
Inventories 46,835 43,725
Other current assets 7,025 6,515
--------- --------
Total current assets 168,726 151,413
Property, plant and equipment 146,908 138,030
Less accumulated depreciation 17,450 8,967
--------- --------
Property, plant and
equipment, net 129,458 129,063
Deferred financing costs 34 1,081
Other assets 1,432 1,424
Excess reorganization value 41,717 43,638
-------- --------
$341,367 $326,619
======== ========
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Short-term debt including
current portion of
long-term debt $ 6,469 $ 6,978
Accounts payable 15,881 15,479
Accounts payable
and advances, affiliates 52,239 43,233
Accrued liabilities 23,284 25,358
------- --------
Total current liabilities 97,873 91,048
Long-term debt 8,706 14,023
Accrued employee benefits 4,129 3,969
Deferred and noncurrent
income taxes 23,108 22,400
Intercompany loans 86,617 77,866
Commitments and contingencies
Stockholders' equity:
Common stock, $1.00 par value,
1,000 shares authorized;
100 shares issued
and outstanding
Paid in capital 105,106 103,463
Retained earnings 10,310 9,938
Cumulative foreign currency
translation adjustments 5,518 3,912
-------- --------
Total stockholders' equity 120,934 117,313
-------- --------
$341,367 $326,619
======== ========
The accompanying notes are an integral part of the consolidated
financial statements.
<PAGE>
VISKASE HOLDING CORPORATION AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF OPERATIONS
<TABLE>
<CAPTION>
Three Months Three Months Nine Months Nine Months
Ended September Ended September Ended September Ended September
28, 1995 29, 1994 28, 1995 29, 1994
------------- -------------- ------------- ---------------
(in thousands, except for number of shares and per share amounts)
<S> <C> <C> <C> <C>
NET SALES $67,413 $56,515 $ 196,627 $158,400
Patent infringement
settlement income 9,457
COSTS AND EXPENSES
Cost of sales 50,370 43,883 150,729 121,313
Selling, general
and administrative 11,140 6,939 30,996 20,257
Amortization of intangibles
and excess reorganization value 841 780 2,523 2,338
-------- -------- -------- --------
OPERATING INCOME 5,062 4,913 12,379 23,949
Interest income 9 50 50 159
Interest expense 560 834 2,525 2,568
Intercompany interest expense 1,476 911 2,905 2,891
Management fees 249 237 730 712
Other (income) expense, net 78 (80) 1,339 900
-------- -------- -------- --------
INCOME BEFORE INCOME TAXES
AND EXTRAORDINARY ITEM 2,708 3,061 4,930 17,037
Income tax provision 1,611 897 3,868 8,187
-------- -------- -------- --------
INCOME BEFORE
EXTRAORDINARY ITEM 1,097 2,164 1,062 8,850
Extraordinary loss, net of tax 690
-------- -------- -------- --------
NET INCOME $ 1,097 $ 2,164 $ 372 $ 8,850
======= ======== ====== =======
WEIGHTED AVERAGE
COMMON SHARES 100 100 100 100
PER SHARE AMOUNTS:
INCOME BEFORE
EXTRAORDINARY ITEM $10,970 $21,640 $10,620 $88,500
======= ======= ======= =======
NET INCOME $10,970 $21,640 $3,720 $88,500
======= ======= ====== =======
<FN>
The accompanying notes are an integral part of the consolidated financial statements.
</TABLE>
VISKASE HOLDING CORPORATION AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS
<TABLE>
<CAPTION>
Nine Months Ended
----------------------------------
September 28, September 29,
1995 1994
------------ -------------
(in thousands)
<S> <C> <C>
Cash flows from operating activities:
Income before extraordinary item $1,062 $ 8,850
Extraordinary (loss) on debt extinguishment (690)
------ -------
Net income 372 8,850
Adjustments to reconcile net income
to net cash provided by operating activities:
Depreciation 8,164 7,802
Amortization of intangibles and excess
reorganization value 2,523 2,338
Amortization of deferred financing fees
and discount 94 155
Increase (decrease) in deferred and
noncurrent income taxes (210) 155
Loss on debt extinguishment 1,030
(Gain) on sales of property, plant
and equipment (3) (31)
Changes in operating assets and liabilities:
Accounts receivable (7,661) (6,305)
Accounts receivable, affiliates (2,918) (20,051)
Inventories (1,965) (7,154)
Other current assets (309) (779)
Accounts payable and accrued liabilities (2,859) 5,352
Accounts payable and advances, affiliates 10,052 21,097
Other (260) (600)
------ -------
Total adjustments 5,678 1,979
------ -------
Net cash provided by operating activities 6,050 10,829
Cash flows from investing activities:
Capital expenditures (5,238) (9,067)
Proceeds from sale of property,
plant and equipment 47 13
Purchase of minority interest in subsidiary (4,200)
------ -------
Net cash (used in) investing activities (5,191) (13,254)
Cash flows from financing activities:
Proceeds from revolving loan
and long-term borrowings 42,053 9,825
Deferred financing costs (34) (53)
Repayment of revolving loan and long-term borrowings (48,462) (5,655)
Increase (decrease) in Envirodyne loan 8,751 (1,070)
------ -------
Net cash provided by financing activities 2,308 3,047
Effect of currency exchange rate changes on cash 24 756
------ -------
Net increase in cash and equivalents 3,191 1,378
Cash and equivalents at beginning of period 6,201 6,170
------ -------
Cash and equivalents at end of period $9,392 $ 7,548
====== =======
- ---------------------------------------------------
Supplemental cash flow information:
Interest paid $1,517 $1,265
Income taxes paid $3,999 $2,273
<FN>
The accompanying notes are an integral part of the consolidated financial statements.
</TABLE>
<PAGE>
VISKASE HOLDING CORPORATION AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
1. INVENTORIES, (dollars in thousands)
Inventories consisted of:
September 28, December 29,
1995 1994
------------ -----------
Raw materials $ 6,362 $ 5,778
Work in process 15,692 13,975
Finished products 24,781 23,972
------- -------
$46,835 $43,725
======= =======
2. CONTINGENCIES, (dollars in thousands)
The Company and its subsidiaries are involved in various legal
proceedings arising out of its business and other environmental matters,
none of which is expected to have a material adverse effect upon its
results of operations, cash flows or financial position.
<PAGE>
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
CONDITION AND RESULTS OF OPERATIONS (dollars
in thousands)
-------------------------------------------------
The accompanying management's discussion and analysis of financial
condition and results of operations should be read in conjunction with
the following table:
Three Months Ended
---------------------------
September 28, September 29,
1995 1994
------------- ------------
(in thousands)
Net sales:
Food packaging products $146,874 $133,930
Disposable foodservice supplies 19,814 17,953
-------- --------
$166,688 $151,883
======== ========
Operating income:
Food packaging products $9,596 $10,257
Disposable foodservice supplies 666 986
Other and eliminations (1,609) (1,488)
------ -------
$8,653 $ 9,755
====== =======
Depreciation and amortization
under capital lease and
amortization of intangible
expense:
Food packaging products $12,355 $11,658
Disposable foodservice supplies 1,157 1,178
Other 19 16
------- -------
$13,531 $12,852
======= =======
Capital expenditures:
Food packaging products $ 9,530 $ 7,226
Disposable foodservice supplies 1,080 1,747
Other 1 5
------- -------
$10,611 $ 8,978
======= =======
Results of Operations
- ---------------------
The Company's net sales for the first nine months and third
quarter of 1995 were $487.7 million and $166.7 million,
respectively, which represented an increase of 9.5% and 9.7%
over the comparable periods of 1994, respectively. Third
quarter net sales at Viskase increased by 12.0% over the prior
year due to the expansion of European and Latin American
sales, selected price increases, increased worldwide film
sales, combined with the favorable effects of foreign currency
translation. Third quarter net sales at Sandusky declined
17.1% due to a 16.4% reduction in dairy and deli container
sales combined with the loss of Scott Paper Company's
premoistened baby wipe container business. The loss in
container sales is primarily attributed to a shift in demand
from thermoformed to injection molded containers. The Company
has purchased injection molding equipment that will increase
capacity. This effort is expected to substantially contribute
to improving the Company's competitiveness in this market.
Third quarter net sales at Clear Shield increased 10.4% from
the prior year primarily due to selling price increases.
Operating income for the first nine months and third quarter
of 1995 was $27.4 million and $8.7 million, respectively,
representing decreases of $10.8 million and $1.1 million,
respectively, from the comparable periods of 1994. The
operating income decline for the first nine months from the
prior year is the result of 1994 benefitting from a net $8.7
million settlement of a patent infringement suit. In
addition, for the first nine months of 1995 the Company
continued to experience resin price increases, price
competition in domestic and foreign markets, coupled with
additional selling, general and administrative expenses
resulting from strategic expansions in foreign markets,
including Europe, Latin America and Australia and the decline
in Sandusky's sales, partially offset by the consolidation of
manufacturing operations at its Sandusky, Ohio facility.
External factors affecting casing sales in both the domestic
and foreign markets include a general softness in hot dog
sales in the U.S. and a weakening of processed meat sales in
Europe. In addition, Viscofan, S.A., a Spanish small diameter
casing producer entered the U.S. market in November 1994.
Although the Company has yet to experience any significant
volume loss to Viscofan, management believes that Viskase will
experience further pricing pressures as a result of Viscofan's
entrance into the domestic market.
Net interest expense for the nine months period totaled $42.0
million representing an increase of $5.5 million from the
first nine months of 1994. The increase is primarily the
result of both increased borrowing and higher interest rates
on the term and revolving loan facilities and the 12% Senior
Secured Notes.
Other income (expense) of $(.2) million and $3.0 million in
the first nine months of 1995 and 1994, respectively, consists
principally of foreign currency transaction gains and losses.
The Company has entered into forward foreign exchange
contracts to hedge certain foreign currency transactions on a
continuing basis for periods consistent with its committed
foreign exchange exposures. The effect of this practice is to
minimize the effect of foreign exchange rate movements on the
Company's operating results. The Company's hedging activities
do not subject the Company to additional exchange risk because
gains and losses on these contracts offset losses and gains on
the transactions being hedged. The cash flows from forward
contracts are classified consistent with the cash flows from
the transactions or events being hedged.
Statement of Financial Accounting Standards No. 121,
"Accounting for the Impairment of Long-Lived Assets and for
Long-Lived Assets to Be Disposed Of," was issued in March 1995
and established financial accounting and reporting standards
for the impairment of long-lived assets and certain
identifiable intangibles to be disposed of. The Company is
not required to adopt this statement until the first quarter
of fiscal year 1996, although earlier adoption is permitted.
The adoption of this statement is not expected to have a
significant impact on the Company's income from continuing
operations nor cash flows.
The tax benefit for the first six months resulted from the
benefit of U.S. losses partially offset by the provision
related to income from foreign subsidiaries. Due to the
permanent differences in the U.S. resulting from non-
deductible amortization and foreign losses for which no tax
benefit is provided, a benefit of $3 million was provided on
a loss before income taxes and extraordinary items of $14.7
million. The U.S. tax benefit is recorded as a reduction of
the deferred tax liability and does not result in a refund of
income taxes.
The extraordinary loss represents the write-off of unamortized
financing fees related to the Company's senior secured bank
facility that was refinanced by the private placement. The
extraordinary loss of $4.2 million is net of a tax benefit of
$2.6 million. (Refer to Part I, Item I, Note 3 of Notes to
Consolidated Financial Statements.)
Liquidity and Capital Resources
- -------------------------------
Cash and equivalents increased by $12,075 thousand during the
nine months ended September 28, 1995. Cash flows provided by
operating activities of $17,279 thousand and financing
activities of $18,933 thousand exceed cash flows used in
investing activities of $24,161 thousand. Cash flows used in
investing activity consist principally of capital expenditures
for property, plant and equipment. Cash flows used in
operating activities were principally attributable to the
Company's loss from operations, the extraordinary loss due to
the write-off of deferred financing fees and an increase in
operating assets and liabilities offset by the effect of
depreciation and amortization. Cash flows provided by
financing activities were principally attributable to the June
20, 1995 placement of $160 million of 12% senior secured notes
net of the repayment of the senior secured bank credit
facility and the payment of the transaction fees and expenses
with the $160 million of proceeds.
On June 20, 1995, Envirodyne completed the sale of $160
million aggregate principal amount of senior secured notes to
certain institutional investors in a private placement. The
senior secured notes were issued pursuant to an indenture
dated June 20, 1995 (Indenture) and consist of (i) $151.5
million of 12% Senior Secured Notes due 2000 and (ii) $8.5
million of Floating Rate Senior Secured Notes due 2000
(collectively, the Senior Secured Notes). Envirodyne used the
net proceeds of the offering primarily to (i) repay the
Company's $86.1 million domestic term loan, (ii) repay the
$68.3 million of obligations under the Company's domestic and
foreign revolving loans and (iii) pay transaction fees and
expenses. Concurrently with the June 20, 1995 placement,
Envirodyne entered into a new $20 million domestic revolving
credit facility (Revolving Credit Facility) and a new $28
million letter of credit facility (Letter of Credit Facility).
The Senior Secured Notes and the obligations under the
Revolving Credit Facility and the Letter of Credit Facility
are guaranteed by Envirodyne's significant domestic
subsidiaries and secured by a collateral pool (Collateral
Pool) comprised of: (i) all domestic accounts receivable
(including intercompany receivables) and inventory; (ii) all
patents, trademarks and other intellectual property (subject
to non-exclusive licensing agreements); (iii) substantially
all domestic fixed assets (other than assets subject to a
lease agreement with General Electric Capital Corporation);
and (iv) a senior pledge of 100% of the capital stock of
Envirodyne's significant domestic subsidiaries and 65% of the
capital stock of Viskase S.A. Such guarantees and security
are shared by the holders of the Senior Secured Notes and the
holders of the obligations under the Revolving Credit Facility
on a pari passu basis pursuant to an intercreditor agreement.
Pursuant to such intercreditor agreement, the security
interest of the holders of the obligations under the Letter of
Credit Facility has priority over all other liens on the
Collateral Pool.
The Company finances its working capital needs through a
combination of cash generated through operations and
borrowings under the Revolving Credit Facility. The
availability of funds under the Revolving Credit Facility is
subject to the Company's compliance with certain covenants
(which are substantially similar to those included in the
Indenture), to borrowing base limitations measured by accounts
receivable and inventory of the Company and to reserves which
may be established in the discretion of the lenders.
Currently, there are no drawings under the Revolving Credit
Facility. The available borrowing capacity under the
Revolving Credit Facility was $20 million at September 28,
1995.
The Company anticipates that its operating cash flow will be
sufficient to meet its operating expenses and to service its
interest payments on the Senior Secured Notes and its other
outstanding indebtedness. The Company will be required to
satisfy its $80 million mandatory redemption obligation with
respect to the Senior Secured Notes in 1999 and to pay the
remaining principal amount of the Senior Secured Notes in
2000. Additionally, the Company's 10.25% Notes, of which
$219.3 million principal amount is outstanding, will mature in
December 2001. The Company expects that in order to make
these payments it will be required to pursue one or more
alternative strategies, such as refinancing its indebtedness,
selling additional equity capital, reducing or delaying
capital expenditures, or selling assets. There can be no
assurance that any of these strategies could be effected on
satisfactory terms, if at all.
Capital expenditures for the first nine months of 1995 and
1994 totaled $24.2 million and $29.1 million, respectively.
Capital expenditures for 1995 are expected to be approximately
$32 million and are expected to range from $25 million to $30
million in future years.
The Company has entered into interest rate agreements that cap
$50 million of interest rate exposures at an average LIBOR
rate of 6.50% until January 1997. These interest rate cap
agreements were entered into under terms of the senior bank
financing that was repaid on June 20, 1995. Interest expense
includes $459 of amortization of interest rate cap premium
during the six-month period ended September 28, 1995. The
Company has not received any payments under the interest rate
protection agreements.
The Company acquired the minority shareholder's interest in
Viskase's Brazilian subsidiary for $4.2 million during the
first quarter of 1994.
The Company has spent approximately $12 million to $17 million
annually on research and development programs, including
product and process development, and on new technology
development during each of the past three years, and the 1995
research and development and product introduction expenses are
expected to be approximately $13 million. Among the projects
included in the current research and development efforts is
the application of certain patents and technology recently
licensed by Viskase to the manufacture of cellulosic casings.
The commercialization of these applications and the related
fixed asset expense associated with such commercialization may
require substantial financial commitments in future periods.
PART II. OTHER INFORMATION
Item 1 - Legal Proceedings
-----------------
For a description of pending litigation and other
contingencies, see Part 1, Note 5, Contingencies.
Item 2 - Changes in Securities
---------------------
No reportable events occurred during the quarter ended
September 28, 1995.
Item 3 - Defaults Upon Senior Securities
-------------------------------
None.
Item 4 - Submission of Matters to a Vote of Security Holders
---------------------------------------------------
None.
Item 5 - Other Information
------------------
None.<PAGE>
Item 6 - Exhibits and Reports on Form 8-K
--------------------------------
(a) Exhibits
Exhibit No. Description of Exhibits
- ---------- --------------------------------------------------
4.3 Indenture dated as of June 20, 1995 (the Indenture)
between Envirodyne Industries, Inc. and Shawmut Bank
Connecticut, National Association, as Trustee. *
4.4 Forms of the Senior Secured Notes issued pursuant to
the Indenture (included in Exhibit 4.3). *
4.5 Exchange and Registration Rights Agreement dated as of
June 20, 1995 between Envirodyne Industries, Inc. and
the purchasers of the Senior Secured Notes. *
4.6 Guaranty Agreement, dated as of June 20, 1995, made by
Clear Shield National, Inc., Sandusky Plastics, Inc.,
Sandusky Plastics of Delaware, Inc., Viskase
Corporation, Viskase Holding Corporation and Viskase
Sales Corporation, in favor of BT Commercial
Corporation, as Collateral Agent. *
10.10 Note Agreement, dated as of June 20, 1995, between
Envirodyne Industries, Inc. and each of the purchasers
identified therein. *
10.11 Letter Agreement, dated as of June 20, 1995, between
Envirodyne Industries, Inc. and certain purchasers of
the Senior Secured Notes. *
10.12 Revolving Credit Agreement, dated as of June 20, 1995,
between Envirodyne Industries, Inc. and The Prudential
Insurance Company of America. *
10.13 Credit Agreement, dated as of June 20, 1995, among
Envirodyne Industries, Inc., the lenders identified
therein and BT Commercial Corporation, as Agent. *
10.14 Intercreditor and Collateral Agency Agreement, dated
as of June 20, 1995, among BT Commercial Corporation,
The Prudential Insurance Company of America, Shawmut
Bank Connecticut, National Association, and certain
other parties identified therein. *
10.15 GECC Intercreditor Agreement, dated as of June 20,
1995, among BT Commercial Corporation, General
Electric Capital Corporation, Shawmut Bank
Connecticut, National Association, Envirodyne
Industries, Inc. and Viskase Corporation. *
* Incorporated herein by reference to Exhibits with the same
number to the Company's Registration Statement on Form S-4
(Registration No. 33-61161), filed with the Securities and
Exchange Commission on July 20, 1995.
(b) Reports on Form 8-K
None.
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 thereunto duly authorized.
ENVIRODYNE INDUSTRIES, INC.
------------------------------
Registrant
By: /s/
------------------------------
John S. Corcoran
Executive Vice President and
Chief Financial Officer
(Duly authorized officer
and principal financial
officer of the registrant)
Date: November 13, 1995
<TABLE> <S> <C>
<ARTICLE> 5
<S> <C>
<PERIOD-TYPE> 9-MOS
<FISCAL-YEAR-END> DEC-28-1995
<PERIOD-END> SEP-28-1995
<CASH> 19,364,000
<SECURITIES> 0
<RECEIVABLES> 100,463,000
<ALLOWANCES> (2,386,000)
<INVENTORY> 115,260,000
<CURRENT-ASSETS> 255,328,000
<PP&E> 533,192,000
<DEPRECIATION> 65,786,000
<TOTAL-ASSETS> 912,688,000
<CURRENT-LIABILITIES> 129,814,000
<BONDS> 529,729,000
<COMMON> 135,000
0
0
<OTHER-SE> 115,370,000
<TOTAL-LIABILITY-AND-EQUITY> 912,688,000
<SALES> 487,696,000
<TOTAL-REVENUES> 487,696,000
<CGS> 360,441,000
<TOTAL-COSTS> 360,441,000
<OTHER-EXPENSES> 0
<LOSS-PROVISION> 343,000
<INTEREST-EXPENSE> 42,096,000
<INCOME-PRETAX> (14,705,000)
<INCOME-TAX> (3,018,000)
<INCOME-CONTINUING> (11,687,000)
<DISCONTINUED> 0
<EXTRAORDINARY> (4,196,000)
<CHANGES> 0
<NET-INCOME> (15,883,000)
<EPS-PRIMARY> (1.18)
<EPS-DILUTED> (1.18)
</TABLE>
