Exhibit 99.1 to Form 8-K
NOTES TO UNAUDITED PRO FORMA FINANCIAL INFORMATION
The following unaudited pro forma financial information should be
read in conjunction with the historical financial statements contained
in Viskase's 1999 Annual Report on Form 10-K and the Quarterly Report on
Form 10-Q as of June 30, 2000. The following pro forma information is
presented for illustrative purposes only and is not necessarily
indicative of the operating results or financial position that would
have occurred had the disposition of the Films Business been consummated
in accordance with the assumptions set forth below, nor is it
necessarily indicative of future operating results or financial
position.
Basis of Presentation
The unaudited pro forma balance sheet presents the consolidated
financial position of Viskase assuming the disposition of the Films
Business had been consummated on June 30, 2000. The unaudited pro forma
statement of operation for the year ended December 31, 1999 and for the
six months ended June 30, 2000 present the consolidated results of
operations of Viskase assuming the disposition had been consummated as
of December 31, 1998.
Pro Forma Adjustments
Balance Sheet
The following notes describe the historical and pro forma
adjustments found on the accompanying balance sheet.
(1) The amount included in the Films Business column reflects the
assets and liabilities involved in the transaction, including cash,
inventories, other current assets, property, plant and equipment,
accounts payable and other current liabilities.
(2) The amount represents the remaining proceeds that may be used to
retire debt or for general corporate purposes.
(3) The pro forma adjustment reflects the amount of proceeds used to
pay interest on the GECC lease on a prepaid basis.
(4) The pro forma adjustment reflects the amount of proceeds used to
repay Senior Secured Credit Facility obligations, Junior Term Loans and
payments on the GECC lease.
(5) The pro forma adjustment reflects the accrual for costs of disposal
and for current taxes payable, less accrual for interest obligation paid
with proceeds from the sale.
(6) Amounts represent the net gain on the sale of the Films Business
and the related increase in deferred taxes at Viskase's statutory tax
rate.
(7) Accounts receivable at June 30, 2000 include approximately $18.0
million of Films Business receivables that were retained by the Company
as part of the purchase agreement.
Statements of Operation
The following notes describe the historical and pro forma
adjustments found on the accompanying statements of operation.
(1) The amounts included in the Films Business column on the December
31, 1999 Statement of Operations reflect the operations of the Films
Business, including net sales, cost of sales, selling, general and
administrative expenses, and amortization of intangibles of the
business. Income (loss) before income taxes has been tax effected at
Viskase's statutory tax rate. On January 17, 2000, the Company's Board
of Directors announced its intent to sell the plastic barrier and non-
barrier shrink film business. The sale of the films business was
completed on August 31, 2000. Accordingly, the operating results from
the films segment were segregated from continuing operations and
reported as a separate line item, results of discontinued operations, on
the statement of operations in the first and second quarters of 2000.
For the June 30, 2000 Statement of Operations, the operations of the
Films Business are reported as Discontinued Operations.
(2) Interest income on cash equivalents was calculated using a 5% rate.
(3) The pro forma adjustment reflects the reduction in interest expense
as a result of $228.4 million of the proceeds from the Films Business
sale being used to redeem the senior and junior secured debt
obligations. Interest expense was calculated using the actual interest
rates on senior and junior debt obligations.
(4) Income (loss) before income taxes has been tax effected at
Viskase's statutory tax rate.
<PAGE>
<PAGE>
VISKASE COMPANIES, INC. AND SUBSIDIARIES
UNAUDITED PRO FORMA BALANCE SHEET
AS OF JUNE 30, 2000
<TABLE>
<CAPTION>
Less
Viskase Films Pro Forma
Companies, Inc. Business (1) Adjustments Pro Forma
-------------- ------------ -------------- ----------------
(in thousands)
<S> <C> <C> <C> <C>
Cash $ 5,366 $74,408 (2) $ 79,774
Trade accounts receivable 46,187 46,187 (7)
Inventories 80,466 $ 34,109 46,357
Other current assets 13,872 4,501 12,198 (3) 21,569
Interco receivables
-------- -------- -------- --------
Total current assets 145,891 38,610 86,606 193,887
Property, plant and equipment 488,509 175,868 312,641
Less accumulated depreciation (195,024) (72,743) (122,281)
-------- -------- -------- --------
Property, plant and equipment, net 293,485 103,125 190,360
Other assets 32,067 10,926 21,141
-------- -------- -------- --------
Total assets $471,443 $152,661 $ 86,606 $ 405,388
======== ======== ======== ========
Short-term debt $125,711 $(124,899)(4) $ 812
Trade payables 30,330 $ 10,770 19,560
Other current liabilities 69,785 16,172 10,628 (5) 64,241
Interco payables
-------- -------- -------- --------
Total current liabilities 225,826 26,942 (114,271) 84,613
Long-term debt 301,282 301,282
Deferred income taxes 14,477 23,212 (6) 37,689
Accured employee benefits 46,729 46,729
-------- -------- -------- --------
Total liabilities 588,314 26,942 (91,059) 470,313
Total stockholders' equity (116,871) 51,946 (6) (64,925)
-------- -------- -------- --------
Total liabilities and stockholders' equity $471,443 $ 26,942 $(39,113) $405,388
======== ======== ======== ========
<FN>
The accompanying notes are an integral part of the pro forma financial information.
</TABLE>
<PAGE>
<PAGE>
VISKASE COMPANIES, INC.
STATEMENT OF OPERATIONS
Six months ended June 30, 2000
($000)
<TABLE>
<CAPTION>
LESS
FILMS PRO FORMA
VISKASE BUSINESS(1) ADJUSTMENTS PRO FORMA
----------- ------------ ------------ ------------
<S> <C> <C> <C> <C>
NET SALES $102,904 $102,924
COSTS AND EXPENSES
Cost of sales 79,390 79,390
Selling, general and administrative 22,123 22,123
Amortization of intangibles 1,000 1,000
Restructuring charges 2,700 2,700
-------- ---------
OPERATING INCOME (LOSS) (2,309) (2,309)
Interest income 148 $ 1,860 (2) 2,008
Interest expense 24,753 $ 8,851 (3) 15,902
Other expense, net 624 624
-------- ------- ---------
(LOSS) FROM CONTINUING OPERATIONS
BEFORE INCOME TAXES (27,538) 10,711 (16,827)
Income tax (benefit) provision (1,516) (4) 1,516
-------- ------- ---------
NET (LOSS) FROM CONTINUING OPERATIONS (26,022) 10,711 (15,311)
DISCONTINUED OPERATIONS:
Income (loss) from operations
net of income taxes 1,935 1,935 0
-------- ------- ------- ---------
Net (loss) (24,087) 1,935 10,711 (15,311)
Other comprehensive (loss), net of tax:
Foreign currency translation adjustments (2,090) (2,090)
-------- ------- ------- ---------
COMPREHENSIVE (LOSS) $(26,177) $ 1,935 $10,711 $ (17,401)
======== ======= ======= =========
WEIGHTED AVERAGE COMMON SHARES
- BASIC AND DILUTED 15,090,574
==========
PER SHARE AMOUNTS:
BASIC EARNINGS (LOSS) PER SHARE:
- basic and diluted
Continuing operations $(1.73) $(1.01)
DISCONTINUED OPERATIONS:
Income from operations .13
------ ------
NET (LOSS) $(1.60) $(1.01)
====== ======
<FN>
The accompanying notes are an integral part of the consolidated financial statements.
</TABLE>
<PAGE>
<PAGE>
VISKASE COMPANIES, INC.
STATEMENT OF OPERATIONS
Year ended December 31, 1999
($000)
<TABLE>
<CAPTION>
LESS
FILMS PRO FORMA
VISKASE BUSINESS(1) ADJUSTMENTS PRO FORMA
----------- ------------ ------------ ------------
<S> <C> <C> <C> <C>
NET SALES $385,653 $159,886 $225,767
COSTS AND EXPENSES
Cost of sales 293,154 127,075 166,079
Selling, general and administrative 71,064 29,210 41,854
Amortization of intangibles and
excess reorganization value 5,000 3,000 2,000
Restructuring charges 0 0
-------- -------- --------
OPERATING INCOME 16,435 601 15,834
Interest income 550 175 $ 3,720 (2) 4,095
Interest expense 44,557 (154) 13,105 (3) 31,606
Other expense (income), net 7,244 3,321 3,923
-------- -------- ------- --------
(LOSS) FROM CONTINUING OPERATIONS (34,816) (2,391) 16,825 (15,600)
Income tax provision (benefit) (3,058) (868)(4) (2,190)
-------- -------- ------- --------
NET (LOSS) FROM CONTINUING OPERATIONS (31,758) (1,523) 16,825 (13,410)
DISCONTINUED OPERATIONS:
Income from operations
net of income taxes 0
Gain (LOSS) on sale of discontinued
operations net of taxes 0 0 0
-------- -------- ------- --------
Net (loss) before extraordinary item (31,758) (1,523) 16,825 (13,410)
Other comprehensive income (loss),
net of tax (1,542) (1,542)
Foreign currency translation adjustments
-------- -------- ------- --------
COMPREHENSIVE (LOSS) $(33,300) $ (1,523) $16,825 $(14,952)
======== ======== ======= ========
WEIGHTED AVERAGE COMMON SHARES
- BASIC 14,949,965
==========
PER SHARE AMOUNTS:
Earnings (loss) per share
- basic and diluted
Continuing operations $(2.12) $(.90)
DISCONTINUED OPERATIONS:
Income from operations 0
Gain on sale from
discontinued operations 0
------ ------
Net (loss) before
extraordinary item (2.12) (.90)
Extraordinary item (loss) 0
------ ------
NET (LOSS) $(2.12) $(.90)
====== ======
<FN>
The accompanying notes are an integral part of the consolidated financial statements.
</TABLE>
