SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
------------------
FORM 8-K/A-1
AMENDMENT NO. 1 TO
CURRENT REPORT
PURSUANT TO SECTION 13 OF 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
Date of report (Date of earliest event reported): March 30, 1998
Sunbeam Corporation
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Exact Name of Registrant Specified in Charter
Delaware 0001-000052 25-1638266
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(State or Other Jurisdiction (Commission (IRS Employer
of Incorporation) File Number Identification No.)
1615 South Congress Avenue, Suite 200, Delray Beach, Florida 33445
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(Address of Principal Executive Offices) (Zip Code)
Registrant's telephone number, including area code: (561) 243-2100
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(Former Name or Former Address, if Changed Since Last Report)
Sunbeam Corporation ("Sunbeam") hereby amends Item 7 of its Current
Report on Form 8-K dated March 30, 1998 to add the following information:
ITEM 7. FINANCIAL STATEMENTS, PRO FORMA FINANCIAL INFORMATION AND
EXHIBITS.
(a) Financial Statements of Businesses Acquired
The following financial statements are incorporated by reference herein:
(1) The Consolidated Financial Statements on pp. F-1 to F-39 in the
Annual Report on Form 10-K of CLN Holdings Inc. ("CLN
Holdings") for the fiscal year ended December 31, 1997
(previously filed with the Commission on March 24, 1998,
Commission File No. 333-29123, and incorporated by reference
herein);
(2) The Consolidated Financial Statements on pp. F-1 to F-21 in the
Annual Report on Form 10-K of First Alert, Inc. ("First Alert")
for the fiscal year ended December 31, 1997 (previously filed
with the Commission on March 23, 1998, Commission File No.
0-23630, and incorporated by reference herein);
(3) The Consolidated Financial Statements on pp. F-1 to F-18 in the
Annual Report on Form 10-K of Signature Brands USA, Inc.
("Signature Brands") for the fiscal year ended September 28,
1997 (previously filed with the Commission on December 24,
1997, Commission File No.0- 19912, and incorporated by
reference herein); and
(4) The unaudited interim Consolidated Financial Statements on pp.
1 to 14 in the Quarterly Report on Form 10-Q of Signature
Brands for the fiscal quarter ended December 28, 1997
(previously filed with the Commission on March 10, 1998,
Commission File No.0-19912, and incorporated by reference
herein).
(b) Pro Forma Financial Information
The following unaudited pro forma condensed financial information of
Sunbeam is filed herewith and is set forth on pages F-1 through F-8:
Unaudited Pro Forma Condensed Financial Information:
(1) Unaudited Pro Forma Condensed Balance Sheet as of December 28,
1997;
(2) Unaudited Pro Forma Condensed Statement of Operations for the
year ended December 28, 1997; and
(3) Notes to Unaudited Pro Forma Condensed Financial Statements.
(c) Exhibits.
23.1* Consent of Arthur Andersen LLP.
23.2* Consent of Price Waterhouse LLP.
23.3* Consent of Ernst & Young LLP.
23.4* Consent of KPMG Peat Marwick LLP.
* Filed herewith.
SIGNATURE
Pursuant to the requirements of the Securities Exchange Act of 1934,
the registrant has duly caused this report to be signed on its behalf by
the undersigned hereunto duly authorized.
SUNBEAM CORPORATION
By: /s/ David C. Fannin
-----------------------------------
Executive Vice President, Secretary
and Chief Legal Officer
May 11, 1998
UNAUDITED PRO FORMA CONDENSED FINANCIAL STATEMENTS
As of May 8, 1998, Sunbeam was the indirect beneficial owner of
approximately 79% of the then outstanding shares of common stock, par value
$.01 per share (the "Coleman Shares"), of The Coleman Company, Inc.
("Coleman"). Sunbeam will acquire the remaining publicly held Coleman
Shares by means of merger (the "Coleman Merger") of a wholly owned
subsidiary of Sunbeam with and into Coleman. It is anticipated that the
Coleman Merger will become effective late in the second quarter or early in
the third quarter of 1998. Accordingly, the minority interest and the
minority interest in (loss) earnings of Coleman has been included in the
unaudited pro forma condensed balance sheet and the unaudited pro forma
condensed statement of operations set forth below.
The following unaudited pro forma condensed financial statements were
prepared to illustrate the estimated effects of (i) Sunbeam's acquisitions
of CLN Holdings, First Alert and Signature Brands (collectively, the
"Acquisitions"), accounted for under the purchase method of accounting,
(ii) the borrowing of approximately $1,197 million under a new bank credit
facility (the "New Credit Facility") providing for aggregate borrowings of
up to $1,700 million, consisting of $1.3 billion in term loans and a $400
million revolving credit facility, (iii) an offering (the "Offering") by
Sunbeam of Zero Coupon Convertible Senior Subordinated Debentures Due 2018
(the "Debentures") at a yield to maturity of 5.0% (or approximately $2,014
million principal amount at maturity) completed on March 19, 1998, and (iv)
the use of the net proceeds from the Offering and from the New Credit
Facility as described in the notes to the unaudited pro forma condensed
financial statements (collectively, the "Pro Forma Transactions"). The
unaudited pro forma condensed balance sheet as of December 28, 1997 gives
effect to the Pro Forma Transactions as if they had occurred on December
28, 1997, the last day of Sunbeam's most recently completed fiscal year.
The unaudited pro forma condensed statement of operations for the year
ended December 28, 1997 gives effect to the Pro Forma Transactions as if
they had occurred as of December 30, 1996, the first day of Sunbeam's most
recently completed fiscal year.
Sunbeam's most recently completed fiscal year ended on December 28,
1997, the most recently completed fiscal years of CLN Holdings and First
Alert ended on December 31, 1997 and the most recently completed fiscal
year of Signature Brands ended on September 28, 1997. The unaudited pro
forma condensed financial statements have been derived from the audited
financial statements of Sunbeam as of and for the year ended December 28,
1997, the audited financial statements of CLN Holdings and First Alert as
of and for the year ended December 31, 1997 and the unaudited financial
statements of Signature Brands as of and for the year ended December 31,
1997. The unaudited statement of operations of Signature Brands for the
year ended December 31, 1997 has been derived from the audited statement of
operations of Signature Brands for the year ended September 28, 1997 and
the unaudited statements of operations of Signature Brands from the
thirteen weeks ended December 28, 1997 and December 29, 1996 in order to
present Signature Brands' operating results on a basis consistent with
Sunbeam's fiscal year.
The unaudited pro forma condensed financial statements were prepared
utilizing the accounting principles of the respective entities as outlined
in each entity's historical financial statements. Certain reclassifications
were made to sales, cost of sales and selling, general and administrative
expenses as reported in the historical financial statements of CLN
Holdings, First Alert and Signature Brands to conform to the
classifications of Sunbeam as follows:
Decrease
(in thousands)
---------------------------------------------------
Selling, General and
Sales Cost of Sales Administrative
----- ------------- --------------------
CLN Holdings....... $(71,488) $ (63,886) $ (7,602)
First Alert........ (9,902) (4,760) (5,142)
Signature Brands... (23,171) (3,725) (19,446)
Included in the historical statement of operations of CLN Holdings
are cash and non-cash restructuring and other charges totaling $36.4
million and related tax benefits of $13.9 million. These costs have been
allocated to cost of goods sold and selling, general and administration
expense in the amounts of $19.7 million and $16.7 million, respectively.
These costs primarily relate to closing and relocating certain
administrative and sales offices, closing several manufacturing facilities,
write-down of inventory and fixed assets, as well as severance costs.
Additionally, the expense of the early extinguishment of debt of $15.2
million shown as an extraordinary charge on the CLN Holdings historical
statement of operations has been excluded from the unaudited pro forma
condensed statement of operations.
The pro forma adjustments are based upon available information and
certain assumptions that Sunbeam believes are reasonable under the
circumstances. For purposes of developing the unaudited pro forma condensed
financial statements, the assets and liabilities of CLN Holdings, First
Alert and Signature Brands have been recorded at historical cost. The
allocation of purchase price for the Acquisitions will be revised when
additional information concerning asset and liability valuations is
obtained. Adjustments, which could be significant, will be made during the
allocation period based on detailed reviews of the fair values of assets
acquired and liabilities assumed and could result in a substantial increase
in goodwill. The unaudited pro forma condensed financial statements do not
include the effects of a one-time after-tax $30 million first quarter 1998
charge by Sunbeam related to the execution of new employment contracts with
Sunbeam's Chairman and Chief Executive Officer and two other senior
officers of Sunbeam as further discussed in Note 14 of Sunbeam's audited
financial statements contained in Sunbeam's Annual Report on Form 10-K for
the fiscal year ended December 28, 1997 or any adjustments for potential
synergies or cost savings as a result of the Acquisitions.
The unaudited pro forma condensed financial statements should be read
in conjunction with "Management's Discussion and Analysis of Financial
Condition and Results of Operations," the financial statements of each of
Sunbeam, CLN Holdings, First Alert and Signature Brands and the notes
thereto, and the other financial information incorporated by reference
herein. This unaudited pro forma financial information is provided for
informational purposes only and does not purport to be indicative of the
results of operations or financial position which would have been obtained
had the Pro Forma Transactions been completed on the dates indicated or the
financial condition or results of operations for any future date or period.
UNAUDITED PRO FORMA CONDENSED BALANCE SHEET
AS OF DECEMBER 28, 1997
(IN THOUSANDS)
<TABLE>
<CAPTION>
Adjustments for Adjustments for
Signature Acquisitions, Disposition of
First Brands CLN Bank Borrowings Coleman Safety
Sunbeam Alert (unaudited) Holdings and Offering & Security(a) Pro Forma
------- ----- ----------- -------- ---------------- --------------- ---------
<S> <C> <C> <C> <C> <C> <C> <C>
Cash and cash
equivalents ....... $ 52,378 $ 2,996 $ 4,118 $ 19,362 $ -- $ -- $ 78,854
Receivables, net .. 295,550 53,678 67,998 179,756 -- (16,335) 580,647
Inventories ....... 256,180 40,285 37,851 236,327 -- (17,624) 553,019
Prepaid expenses
and other current
assets ............ 53,897 10,680 7,707 47,815 46,531(b) (1,655) 164,975
----------- ----------- ----------- ----------- ----------- ----------- -----------
Total current
assets ............ 658,005 107,639 117,674 483,260 46,531 (35,614) 1,377,495
Property, plant
and equipment,
net ............... 240,897 28,181 16,820 175,494 -- (10,746) 450,646
Other intangibles . 169,622 6,496 -- -- (973)(d) -- 175,145
Goodwill .......... 24,750 22,045 134,921 338,989 1,521,784(e) (37,874) 1,546,534
(458,081)(d)
Other assets ...... 27,010 -- 5,663 100,126 52,281(f) 469 135,033
(15,121)(d)
(35,395)(c)
----------- ----------- ----------- ----------- ----------- ----------- -----------
Total assets ...... $ 1,120,284 $ 164,361 $ 275,078 $ 1,097,869 $ 1,111,026 $ (83,765) $ 3,684,853
=========== =========== =========== =========== =========== =========== ===========
Short-term debt
and current
portion of
long-term debt .... $ 668 $ 45,026 $ 5,000 $ 67,233 $ 117,847(g) $ 80 $ --
Other current
liabilities ....... 197,431 33,002 51,494 189,529 13,317(c) 9,010 449,129
----------- ----------- ----------- ----------- ----------- ----------- -----------
Total current
liabilities ....... 198,099 78,028 56,494 256,762 131,164 9,090 449,129
Long-term debt .... 194,580 -- 164,060 980,447 1,250,050(g) 89,037 1,946,646
(1,946,646)(h)
Other long-term
liabilities ....... 195,668 4,933 6,539 73,923 -- -- 281,063
Minority interest.. -- -- -- 43,386 -- -- 43,386
Shareholders'
equity ............ 531,937 81,400 47,985 (256,649) 80,680(i) (14,362) 964,629
(112,902)(j)
(513,372)(k)
----------- ----------- ----------- ----------- ----------- ----------- -----------
Total liabilities
and shareholders'
equity ............ $ 1,120,284 $ 164,361 $ 275,078 $ 1,097,869 $(1,111,026) $ 83,765 $ 3,684,853
=========== =========== =========== =========== =========== =========== ===========
</TABLE>
See Notes to Unaudited Pro Forma Condensed Financial Statements.
UNAUDITED PRO FORMA CONDENSED STATEMENT OF OPERATIONS
AS OF DECEMBER 28, 1997
(IN THOUSANDS, EXCEPT PER SHARE DATA)
<TABLE>
<CAPTION>
Adjustments for Adjustments for
Signature Acquisitions Disposition of
First Brands CLN Bank Financings Coleman Safety
Sunbeam Alert (unaudited) Holdings and Offering & Security(1) Pro Forma
------- ----- ----------- -------- ---------------- --------------- ---------
<S> <C> <C> <C> <C> <C> <C> <C>
Net sales ....... $1,168,12 $ 177,039 $ 255,766 $ 1,082,806 $ -- $- 88,413 $ 2,595,380
Cost of goods
sold ............ 837,683 135,731 188,669 776,445 -- (59,886) 1,878,642
Amortization of
goodwill and
intangibles ..... 7,829 704 3,925 14,704 38,044(m) (992) 44,848
(19,366)(n)
Selling,
general and
administrative
expenses ........ 123,227 49,071 44,646 259,033 -- (19,608) 456,369
----------- ----------- ----------- ----------- ----------- ----------- -----------
Operating
earnings (loss) . 199,443 (8,467) 18,526 32,624 18,678 7,927 215,521
Interest expense,
net and other
expense ......... 10,163 4,593 18,115 94,139 127,480(o)(p) (4,344) 125,421
(124,725)(q)
Minority interest
in loss of
Coleman ......... -- -- -- (446) -- -- (446)
----------- ----------- ----------- ----------- ----------- ----------- -----------
Earnings (loss)
from continuing
operations before
income taxes .... 189,280 (13,060) 411 (61,069) 21,433 3,583 90,546
Income taxes
(benefit) ....... 66,152 (5,224) 1,889 (24,162) 11,787(r) (1,362) 49,080
----------- ----------- ----------- ----------- ----------- ----------- -----------
Earnings (loss)
from continuing
operations before
extraordinary
items ........... $ 123,128 $ (7,836) $ (1,478) $ (36,907) $ 33,220 $ 2,221 $ 41,466
=========== =========== =========== =========== =========== =========== ===========
Earnings (loss)
per share of
common stock from
continuing
operations:
Basic ........ $ 1.45 $ 0.42
=========== ===========
Diluted ...... $ 1.41 $ 0.41
=========== ===========
Weighted average
common shares
outstanding:
Basic ........ 84,945 99,045(s)
=========== ===========
Diluted ...... 87,542 101,642(s)
=========== ===========
</TABLE>
See Notes to Unaudited Pro Forma Condensed Financial Statements.
NOTES TO UNAUDITED PRO FORMA CONDENSED
FINANCIAL STATEMENTS
(a) Represents the elimination of the assets and liabilities related to
the sale of CLN Holdings' indirect wholly owned subsidiary, Coleman
Safety & Security Products, Inc. ("Coleman Safety & Security"), as of
December 31, 1997 and reflects the net proceeds from the sale as a
reduction of long-term debt. The sale of this subsidiary was
consummated on March 24, 1998.
(b) Represents estimated realizable tax benefit at 37.6% of (1) the cash
out of stock options in connection with the Acquisitions and (2) the
prepayment penalties on refinanced indebtedness of Sunbeam, Coleman
and Signature Brands.
(c) Represents the elimination of an intercompany tax receivable
($35,395) and payable on the financial statements of CLN Holdings
relating to a tax sharing agreement with Mafco Holdings, Inc., a
Delaware corporation ("Mafco"), that was cancelled in connection with
the merger of CLN Holdings with and into a wholly owned subsidiary of
Sunbeam (the "Holdings Merger"). The net tax receivable was assigned
to Mafco in connection with the Holdings Merger.
(d) Represents the elimination of the historical goodwill, deferred
financing costs and organizational costs of First Alert, Signature
Brands and CLN Holdings in amounts of $23,018, $139,005 and $312,152,
respectively.
(e) Represents the excess of cost over book value of the net assets
acquired of First Alert, Signature Brands and CLN Holdings in the
amounts of $73,457, $181,954 and $1,266,373, respectively. No
estimate has been made in these unaudited pro forma condensed
financial statements of the one-time expenses that will be incurred
in the rationalization of the businesses that will result from the
Acquisitions. The amount of goodwill will change once Sunbeam
completes the final allocation of purchase price.
(f) Represents estimated capitalizable debt issuance costs related to the
New Credit Facility and the Offering.
(g) Represents the repayment of existing indebtedness (before prepayment
premiums) of Sunbeam, CLN Holdings, Signature Brands and First Alert
in the amounts of $195,248, $958,563, $169,060 and $45,026,
respectively.
(h) Represents estimated total new long-term indebtedness of $1,947,000
to fund the Acquisitions, to refinance outstanding indebtedness and
to fund transaction costs. Includes $203,661 in respect of Sunbeam,
$1,239,058 in respect of CLN Holdings, $263,531 in respect of
Signature Brands, $177,896 in respect of First Alert, and $62,500 in
transaction costs. The foregoing amounts include $8,400, $103,200 and
$5,500 of estimated prepayment premiums related to the early
repayment of certain indebtedness of Sunbeam, CLN Holdings and
Signature Brands, respectively. Borrowings of $1,197,000 under the
New Credit Facility are assumed to bear interest at the rate of LIBOR
plus 1.5% to 2.25%, subject to increase or decrease based on Sunbeam's
performance (blended rate of 7.12% at April 24, 1998), and the
Debentures are assumed to accrete at a yield to maturity of 5.0% (or
approximately $2,014,000 principal amount at maturity).
(i) Represents prepayment penalties and the write-off of related deferred
financing costs, net of tax, on the early retirement of certain
existing Sunbeam and CLN Holdings debt. The expense of early
extinguishment of debt is classified as an extraordinary charge and,
accordingly, has been excluded from the unaudited pro forma condensed
statement of operations. Such extraordinary charge appears only on
the unaudited pro forma condensed balance sheet as a reduction of
shareholders' equity.
(j) Represents the elimination of the historical equity balances of First
Alert, Signature Brands and CLN Holdings.
(k) Includes the issuance of 14,099,749 shares of Sunbeam Common Stock to
Mafco in the Holdings Merger, with a total equity value of $523,600
less estimated transaction costs of approximately $10,200. This
equity value was derived by using the average closing stock price as
reported on the NYSE Composite Transactions Tape for the day before
and day of the public announcement of the acquisition. Additionally,
the shares held by the Mafco subsidiary have been discounted 15% due
to the restrictions on resale of the shares.
(l) Represents the elimination of the 1997 results of operations relating
to the sale of Coleman Safety & Security. The unaudited pro forma
condensed statement of operations reflects the sale of Coleman Safety
& Security as of January 1, 1997. The sale of this subsidiary was
completed on March 24, 1998.
(m) Represents amortization, on a straight-line basis, for goodwill
over a period of forty years. See Note (e).
(n) Represents the reduction in amortization expense resulting from the
elimination of the historical goodwill, deferred financing costs and
organizational costs as discussed in Note (d) above.
(o) Represents interest expense on estimated total borrowings of
$1,947,000 at the assumed rates set forth in Note (h) above in the
aggregate amount of $127,480 ($85,238 related to the New Credit
Facility and $37,504 related to the Debentures). Also includes
amortization of debt issuance costs of $4,738 ($4,240 related to the
New Credit Facility amortized on a straight-line basis over a period
of seven years and $498 related to the Debentures amortized on a
weighted average accreted basis over a twenty-year period).
(p) The interest rate on borrowings under the New Credit Facility may
differ from the assumption set forth in Note (h) above. The effect on
income of a 1/8 percent variance in interest rate is approximately
$1,500 with respect to the borrowings under the New Credit Facility.
(q) Represents the reduction in interest expense resulting from the debt
refinancing as discussed in Note (g) above.
(r) Represents the incremental change in the consolidated entity's
provision for income taxes at 37.6% as a result of the pre-tax
earnings of First Alert, Signature Brands and Coleman, and all pro
forma adjustments as described above.
(s) Represents basic and diluted weighted average shares outstanding of
Sunbeam as of December 28, 1997 plus the additional equity issued in
connection with the Holdings Merger as discussed in Note (k) above.
The incremental shares relating to the Debentures have not been
included, as they would be anti-dilutive.
EXHIBIT INDEX
23.1* Consent of Arthur Andersen LLP.
23.2* Consent of Price Waterhouse LLP.
23.3* Consent of Ernst & Young LLP.
23.4* Consent of KPMG Peat Marwick LLP.
* Filed herewith.
EXHIBIT 23.1
CONSENT OF INDEPENDENT CERTIFIED PUBLIC ACCOUNTANTS
As independent certified public accountants, we hereby consent to the
incorporation by reference in this Form 8-K of our report dated January 28,
1998, except with respect to the matters discussed in Note 14, as to which
the date is March 2, 1998, into the Company's previously filed Registration
Statement File No. 33-61610, 33-87950 and 333-21413.
ARTHUR ANDERSEN LLP
Fort Lauderdale, Florida
May 7, 1998
EXHIBIT 23.2
CONSENT OF INDEPENDENT ACCOUNTANTS
We hereby consent to the incorporation by reference in the Prospectus
constituting part of the Registration Statement on Form S-8 (Numbers 33-
61610, 33-87950, 333-21413) of Sunbeam Corporation of our report dated
March 13, 1998 relating to the consolidated financial statements of First
Alert, Inc., which are incorporated by reference in the Current Report on
Form 8-K of Sunbeam Corporation dated May 11, 1998.
Price Waterhouse LLP
Chicago, Illinois
May 7, 1998
EXHIBIT 23.3
CONSENT OF INDEPENDENT AUDITORS
We consent to the incorporation by reference in the Registration Statements
Form S-8 No. 33-61610, Form S-8 No. 33-87950, and Form S-8 No. 333-21413 of
Sunbeam Corporation of our report dated February 18, 1998, with respect to
the consolidated financial statements and schedule of CLN Holdings, Inc.
incorporated by reference in Sunbeam Corporation's Current Report (Form 8-
K/A-1) dated March 30, 1998, filed with the Securities and Exchange
Commission.
ERNST & YOUNG LLP
Wichita, Kansas
May 7, 1998
EXHIBIT 23.4
The Board of Directors
Signature Brands USA, Inc. and subsidiary
We consent to the incorporation by reference in the registration statements
(Nos. 33-61610, 33-87950, and 333-21413) on Forms S-8 of Sunbeam
Corporation of our report dated December 9, 1997, except as to paragraph 6
of Note 8, which is as of December 24, 1997, with respect to the
consolidated balance sheets of Signature Brands USA, Inc. and subsidiary as
of September 28, 1997 and September 29, 1996, and the related consolidated
statements of operations, stockholders' equity, and cash flows for each of
the years in the three-year period ended September 28, 1997, and all
related schedules, which report appears in the September 28, 1997 annual
report on Form 10-K of Signature Brands USA, Inc. and subsidiary.
/s/ KPMG Peat Marwick LLP
May 7, 1998
