<PAGE>
REGISTRATION NO. 001-09078
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
------------------------
AMENDMENT NO. 1
TO
FORM 10-Q
/X/ QUARTERLY REPORT PURSUANT TO SECTION 13 OF THE SECURITIES
EXCHANGE ACT OF 1934
FOR THE QUARTERLY PERIOD ENDED JULY 31, 1995
/ / 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 1-9078
------------------------
THE ALPINE GROUP, INC.
(Exact name of registrant as specified in its charter)
<TABLE>
<S> <C>
DELAWARE 22-1620387
(State or other (I.R.S. Employer
jurisdiction of Identification No.)
incorporation or
organization)
1790 BROADWAY
NEW YORK, NEW YORK 10019-1412
(Address of principal (Zip code)
executive offices)
</TABLE>
Registrant's telephone number, including area code 212-757-3333
------------------------
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 and (2) has been subject to such filing
requirements for the past 90 days. Yes _X_ No ____
INDICATE THE NUMBER OF SHARES OUTSTANDING OF EACH OF THE ISSUER'S CLASSES OF
COMMON STOCK, AS OF THE LATEST PRACTICABLE DATE.
<TABLE>
<CAPTION>
OUTSTANDING AT SEPTEMBER 14,
CLASS 1995
----------------------------------- --------------------------------
<S> <C>
Common Stock, $.10 Par Value 18,227,377
</TABLE>
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--------------------------------------------------------------------------------
<PAGE>
PART I. FINANCIAL INFORMATION
ITEM 1. FINANCIAL STATEMENTS
The accompanying unaudited condensed financial statements have been prepared
in accordance with the requirements of Form 10-Q and therefore do not include
all information and footnotes required by generally accepted accounting
principles. However, in the opinion of management, all adjustments (which,
except as disclosed elsewhere herein, consist only of normal recurring accruals)
necessary for a fair presentation of the results of operations for the relevant
periods have been made. Results for the interim periods are not necessarily
indicative of the results to be expected for the year.
2
<PAGE>
THE ALPINE GROUP, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED BALANCE SHEETS
(DOLLARS IN THOUSANDS)
ASSETS
<TABLE>
<CAPTION>
APRIL 30,
1995
JULY 31, ---------
1995
-----------
(UNAUDITED)
<S> <C> <C>
Current assets:
Cash and cash equivalents............................................................... $ 3,599 $ 15,546
Marketable securities................................................................... 6,160 1,495
Accounts receivable (less allowance for doubtful accounts; July, $926; April, $956)..... 71,020 41,255
Inventories............................................................................. 59,119 35,242
Other current assets.................................................................... 6,322 5,347
----------- ---------
Total current assets.................................................................. 146,220 98,885
Property, plant and equipment, net........................................................ 96,821 52,240
Long-term investments and other assets (Note 4)........................................... 31,093 16,941
Goodwill (less accumulated amortization: July, $2,603; April, $2,338)..................... 81,971 65,712
----------- ---------
TOTAL ASSETS.......................................................................... $356,105 $233,778
----------- ---------
----------- ---------
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Short-term borrowings................................................................... $ -- $ 33,135
Current portion of long-term debt....................................................... 1,864 2,022
Accounts payable........................................................................ 59,405 31,655
Accrued expenses........................................................................ 29,626 24,993
Deferred purchase obligation............................................................ 9,909 --
----------- ---------
Total current liabilities............................................................. 100,804 91,805
----------- ---------
Long-term debt, less current portion...................................................... 195,343 84,022
----------- ---------
Other long-term liabilities............................................................... 4,842 7,560
----------- ---------
Contingent purchase consideration......................................................... 5,306 5,733
----------- ---------
Stockholders' equity:
8% Cumulative convertible preferred stock at liquidation value.......................... 14,068 11,823
9% Cumulative convertible preferred stock at liquidation value.......................... 1,927 1,927
8.5% Cumulative convertible preferred stock at liquidation value........................ -- 3,500
Common stock, $.10 par value; authorized 25,000,000 shares; issued: July, 18,227,377
shares; April, 17,429,141 shares....................................................... 1,823 1,743
Capital in excess of par value.......................................................... 115,773 103,114
Cumulative translation adjustment....................................................... (127) 144
Accumulated deficit..................................................................... (80,609) (76,050)
----------- ---------
52,855 46,201
Less shares held in treasury, at cost:
July, 523,948 shares; April, 233,290 shares............................................. (2,731) (1,229)
Receivable from stockholder............................................................. (314) (314)
----------- ---------
Total stockholders' equity............................................................ 49,810 44,658
----------- ---------
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY............................................ $356,105 $233,778
----------- ---------
----------- ---------
</TABLE>
The accompanying notes are an integral part of these
condensed consolidated financial statements.
3
<PAGE>
THE ALPINE GROUP, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(UNAUDITED)
(IN THOUSANDS, EXCEPT PER SHARE DATA)
<TABLE>
<CAPTION>
THREE MONTHS ENDED
JULY 31,
---------------------
<S> <C> <C>
1995 1994
---------- ---------
Net sales.................................................................................. $ 128,784 $ 39,330
Cost of goods sold......................................................................... 112,456 33,645
---------- ---------
Gross profit............................................................................. 16,328 5,685
Selling, general and administrative........................................................ 7,902 3,506
Amortization of goodwill................................................................... 673 291
---------- ---------
Operating income......................................................................... 7,753 1,888
Interest income............................................................................ 745 46
Interest (expense)......................................................................... (7,108) (998)
Other income............................................................................... 114 21
---------- ---------
Income from continuing operations before income taxes.................................... 1,504 957
Income tax expense......................................................................... 150 119
---------- ---------
Income from continuing operations before extraordinary item.............................. 1,354 838
(Loss) from discontinued operations........................................................ (379) (826)
---------- ---------
Income before extraordinary item......................................................... 975 12
Extraordinary (loss) on early extinguishment of debt....................................... (5,180) --
---------- ---------
Net income (loss)........................................................................ (4,205) 12
Preferred stock dividends.................................................................. (354) (128)
---------- ---------
(Loss) applicable to common stock........................................................ $ (4,559) $ (116)
---------- ---------
---------- ---------
Income (loss) per share of common stock:
Continuing operations.................................................................... $ 0.06 $ 0.04
Discontinued operations.................................................................. (0.02) (0.05)
Extraordinary (loss) on early extinguishment of debt..................................... (0.30) --
---------- ---------
Net (loss) per share of common stock................................................... $ (0.26) $ (0.01)
---------- ---------
---------- ---------
</TABLE>
The accompanying notes are an integral part of these
condensed consolidated financial statements.
4
<PAGE>
THE ALPINE GROUP, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENT OF STOCKHOLDERS' EQUITY
FOR THE THREE MONTHS ENDED JULY 31, 1995
(UNAUDITED)
(IN THOUSANDS, EXCEPT SHARE AMOUNTS)
<TABLE>
<CAPTION>
9% CUMULATIVE
CONVERTIBLE
COMMON STOCK CAPITAL PREFERRED STOCK
------------------ IN EXCESS ---------------
SHARES AMOUNT OF PAR SHARES AMOUNT
---------- ------ --------- ------ -------
<S> <C> <C> <C> <C> <C>
Balance at April 30, 1995......................... 17,429,141 $1,743 $103,114 1,927 $1,927
Compensation expense related to stock options and
grants........................................... 113
Dividends on preferred stock......................
Foreign currency translation......................
Conversion of convertible preferred stock......... 737,476 74 3,804
Conversion of convertible notes................... 51,243 5 245
Exercise of stock options......................... 9,517 1 36
Shares issued for directors' fees................. (18)
Purchase of treasury stock........................
Adience acquisition debt exchange.................
PolyVision merger and distribution (Note 6)....... 8,479
Net (loss) for the three months ended July 31,
1995.............................................
---------- ------ --------- ------ -------
Balance at July 31, 1995.......................... 18,227,377 $1,823 $115,773 1,927 $1,927
---------- ------ --------- ------ -------
<CAPTION>
8.5%
8% CUMULATIVE CUMULATIVE
CONVERTIBLE CONVERTIBLE
PREFERRED STOCK PREFERRED STOCK FOREIGN
----------------- -------------------- ACCUMULATED CURRENCY
SHARES AMOUNT SHARES AMOUNT DEFICIT TRANSLATION
------- -------- -------- --------- ---------- ----------
<S> <C> <C> <C> <C>
Balance at April 30, 1995......................... 236,480 $11,823 3,500 $ 3,500 $(76,050) $ 144
Compensation expense related to stock options and
grants...........................................
Dividends on preferred stock...................... (354)
Foreign currency translation...................... (271)
Conversion of convertible preferred stock......... (3,500) (3,500)
Conversion of convertible notes...................
Exercise of stock options.........................
Shares issued for directors' fees.................
Purchase of treasury stock........................
Adience acquisition debt exchange................. 44,900 2,245
PolyVision merger and distribution (Note 6).......
Net (loss) for the three months ended July 31,
1995............................................. (4,205)
------- -------- -------- --------- ---------- -----
Balance at July 31, 1995.......................... 281,380 $14,068 -- -- $(80,609) $(127)
------- -------- -------- --------- ---------- -----
<CAPTION>
TREASURY STOCK RECEIVABLE
-------------------- FROM
SHARES AMOUNT STOCKHOLDER TOTAL
--------- -------- ---------- -------
Balance at April 30, 1995......................... (233,290) $(1,229) $(314) $44,658
Compensation expense related to stock options and
grants........................................... 113
Dividends on preferred stock...................... (354)
Foreign currency translation...................... (271)
Conversion of convertible preferred stock......... 378
Conversion of convertible notes................... 250
Exercise of stock options......................... 37
Shares issued for directors' fees................. 11,042 58 40
Purchase of treasury stock........................ (301,700) (1,560) (1,560)
Adience acquisition debt exchange................. 2,245
PolyVision merger and distribution (Note 6)....... 8,479
Net (loss) for the three months ended July 31,
1995............................................. (4,205)
--------- -------- ----- -------
Balance at July 31, 1995.......................... (523,948) $(2,731) $(314) $49,810
--------- -------- ----- -------
</TABLE>
The accompanying notes are an integral part of these condensed consolidated
financial statements
5
<PAGE>
THE ALPINE GROUP, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS
(UNAUDITED)
(IN THOUSANDS)
<TABLE>
<CAPTION>
THREE MONTHS ENDED
JULY 31,
---------------------
<S> <C> <C>
1995 1994
---------- ---------
Cash flow from operating activities:
Income from continuing operations......................................................... $ 1,354 $ 838
Adjustments to reconcile (loss) to net cash provided by continuing operations:
Depreciation and amortization......................................................... 3,131 1,147
Accretion of debt discount and amortization of deferred financing..................... 490 107
Compensation expense related to stock options and grants.............................. (58) 202
Changes in assets and liabilities:
Accounts receivable................................................................... (589) (2,821)
Inventories........................................................................... 9,282 451
Prepaid expenses and other current assets............................................. 261 (58)
Other assets.......................................................................... 1,690 (14)
Accounts payable and accrued expenses................................................. 9,884 2,304
Other................................................................................. 157 88
---------- ---------
Cash provided by continuing operating activities............................................ 25,602 2,244
---------- ---------
(Loss) from discontinued operations......................................................... (379) (826)
Adjustments to reconcile loss to net cash (used for) discontinued operations:
Depreciation and amortization........................................................... -- 162
Increase (decrease) in net liabilities.................................................. -- (198)
Other................................................................................... 170 --
---------- ---------
Cash (used for) discontinued operations..................................................... (209) (862)
---------- ---------
Cash provided by (used for) operating activities............................................ 25,393 (1,382)
Cash flow from investing activities:
Acquisitions, net of cash acquired........................................................ (93,560) --
Investment in marketable securities....................................................... (4,665) --
Capital expenditures on continuing operations............................................. (1,590) (318)
Capital expenditures on discontinued operations........................................... -- (120)
Loan to PolyVision Corporation............................................................ (3,054) --
Other..................................................................................... (197) --
---------- ---------
Cash (used for) investing activities........................................................ (103,066) (438)
---------- ---------
</TABLE>
The accompanying notes are an integral part of these
condensed consolidated financial statements.
6
<PAGE>
THE ALPINE GROUP, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS (CONTINUED)
(UNAUDITED)
(IN THOUSANDS)
<TABLE>
<CAPTION>
THREE MONTHS ENDED
JULY 31,
---------------------
<S> <C> <C>
1995 1994
---------- ---------
Cash flow from financing activities:
Short-term borrowings (repayments)........................................................ $ (21,000) $ 1,000
Borrowing under revolving credit facilities, net.......................................... 5,760 (2,249)
Dividends on preferred stock.............................................................. (354) (54)
Capitalized financing costs............................................................... (13,249) --
Purchase of treasury shares............................................................... (1,502) (360)
Proceeds from exercise of stock options................................................... 37 --
Repayments of long-term debt on continuing operations..................................... (147,200) (502)
Term loan repayments on discontinued operations........................................... -- (23)
Long-term borrowings by continuing operations............................................. 243,234 --
---------- ---------
Cash provided by (used for) financing activities............................................ 65,726 (2,188)
---------- ---------
Net (decrease) in cash and cash equivalents................................................. (11,947) (1,244)
Cash and cash equivalents at beginning of period............................................ 15,546 2,507
---------- ---------
Cash and cash equivalents at end of period.................................................. $ 3,599 $ 1,263
---------- ---------
<CAPTION>
THREE MONTHS ENDED
JULY 31,
---------------------
1995 1994
---------- ---------
<S> <C> <C>
Supplemental disclosures:
Taxes paid................................................................................ $ 139 $ 379
---------- ---------
---------- ---------
Interest paid............................................................................. $ 4,703 $ 1,035
---------- ---------
---------- ---------
Non-cash investing and financing activities:
Exchange of preferred stock............................................................... $ 3,500
----------
----------
Dividend on preferred stock exchanged..................................................... $ 378
----------
----------
Conversion of notes and exchange of debentures:
Conversion of notes....................................................................... $ 300
----------
----------
Exchange of debentures.................................................................... $ 135
---------
---------
Acquisition of business:
Assets, net of cash acquired.............................................................. $ 126,127
Deferred purchase consideration........................................................... (9,909)
Liabilities assumed....................................................................... (22,658)
----------
Net cash paid............................................................................. $ (93,560)
----------
----------
</TABLE>
The accompanying notes are an integral part of these
cond ensed consolidated financial statements.
7
<PAGE>
THE ALPINE GROUP, INC. AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
JULY 31, 1995
(UNAUDITED)
1. BASIS OF PRESENTATION
The accompanying unaudited condensed consolidated financial statements of
The Alpine Group, Inc. ("Alpine" or the "Company") reflect all adjustments
which, in the opinion of management, are necessary for a fair presentation of
the results of operations for the interim periods presented. These financial
statements should be read in conjunction with the summary of accounting policies
and the notes to the financial statements included in the Company's Annual
Report on Form 10-K for the year ended April 30, 1995.
Certain reclassifications have been made to the July 31, 1994 financial
statements to conform with the July 31, 1995 presentation.
2. INVENTORIES
The components of inventories are:
<TABLE>
<CAPTION>
JULY 31, APRIL 30,
1995 1995
--------- ---------
(IN THOUSANDS)
<S> <C> <C>
Raw materials..................................................................... $ 16,623 $ 11,969
Work in process................................................................... 15,917 8,716
Finished goods.................................................................... 26,579 14,557
--------- ---------
$ 59,119 $ 35,242
--------- ---------
--------- ---------
</TABLE>
3. INCOME (LOSS) PER SHARE
For the three months ended July 31, 1995 and 1994, the number of shares used
in computing income (loss) per share were 17,456,444 and 18,073,512,
respectively, based on the weighted average number of shares outstanding.
4. LONG-TERM INVESTMENTS AND OTHER ASSETS
The components of long-term investments and other assets are:
<TABLE>
<CAPTION>
JULY 31, APRIL 30,
1995 1995
--------- ---------
(IN THOUSANDS)
<S> <C> <C>
Investment in PolyVision (Note 6)................................................. $ 15,633 $ 11,202
Deferred financing charges........................................................ 8,527 --
Other assets...................................................................... 6,933 5,739
--------- ---------
$ 31,093 $ 16,941
--------- ---------
--------- ---------
</TABLE>
5. ALCATEL ACQUISITION
On May 11, 1995, Alpine completed the acquisition (the "Alcatel
Acquisition") of the U.S. and Canadian copper wire and cable business (the
"Alcatel Business") of Alcatel NA Cable Systems, Inc. and Alcatel Canada Wire,
Inc. (collectively, "Alcatel NA"), which was initially financed with the
proceeds of the sale by Superior Telecommunication Inc. ("Superior"), subsidiary
of Alpine, of $140,000,000 aggregate
8
<PAGE>
THE ALPINE GROUP, INC. AND SUBSIDIARIES
5. ALCATEL ACQUISITION (CONTINUED)
principal amount of notes (the "Alcatel Acquisition Notes") (see Note 7). The
following reflects the preliminary allocation of the purchase price of the net
assets of the Alcatel Business based upon the estimated fair values of such
assets:
<TABLE>
<CAPTION>
AMOUNT
--------------
(IN THOUSANDS)
<S> <C>
Estimated acquisition cost.............................................................. $ 103,409
Less, historical book value of net assets at May 11, 1995............................... (80,909)
Write-up of property, plant and equipment............................................... (4,945)
Accrual of Alcatel employee relocation and severance costs.............................. 500
--------------
Acquisition goodwill.................................................................... $ 18,055
--------------
--------------
</TABLE>
The estimated acquisition cost of $103,409,000 represents (i) $93,000,000
paid in cash to Alcatel NA, (ii) a deferred amount payable to Alcatel NA on
August 11, 1995 in the amount of $9,909,000, and (iii) acquisition expenses
estimated at $500,000.
The Alcatel Acquisition has been accounted for using the purchase method,
and accordingly, Alcatel's results of operations are included in the Company's
consolidated results on a prospective basis from the date of the acquisition.
Unaudited condensed pro forma results of operations for the three month periods
ended July 31, 1995 and 1994 which give effect to the Alcatel Acquisition and
the acquisition of Adience Inc. ("Adience"), acquired December 21, 1994 as if
both transactions had occurred on May 1, 1994 are presented below. The pro forma
amounts reflect acquisition related purchase accounting adjustments, including
adjustments to depreciation and amortization expense. The pro forma financial
information does not purport to be indicative of either the results of
operations that would have occurred had the acquisitions taken place at the
beginning of the periods presented or of future results of operations.
<TABLE>
<CAPTION>
PRO FORMA
--------------------------
<S> <C> <C>
(UNAUDITED)
THREE MONTH PERIOD ENDED
JULY 31,
--------------------------
1995 1994
------------ ------------
(IN THOUSANDS, EXCEPT PER
SHARE AMOUNTS)
Net sales..................................................................... $ 136,305 $ 116,577
Income (loss) from continuing operations before income taxes.................. 1,772 (193)
Income (loss) from continuing operations before extraordinary item............ 1,622 (312)
(Loss) from discontinued operations........................................... (379) (826)
Net (loss).................................................................... (4,291) (1,462)
Income (loss) per share of common stock:
Continuing operations....................................................... 0.07 (0.04)
Discontinued operations..................................................... (0.02) (0.06)
Extraordinary (loss) on early extinguishment of debt........................ (0.30) --
Net (loss).................................................................. (0.25) (0.10)
</TABLE>
6. DISCONTINUED OPERATIONS
During fiscal 1995 Alpine management adopted a plan to distribute to its
shareholders a substantial portion of its ownership of its information display
segment consisting of its interest in Alpine PolyVision, Inc. ("APV") and
Posterloid Corporation ("Posterloid"). In May 1995, APV and Posterloid were
merged (the "PolyVision Merger") into PolyVision Corporation ("PolyVision")
(formerly Information Display Technology, Inc.), a 70% owned subsidiary of
Adience. Following the PolyVision Merger, Alpine owned 98% of PolyVision's
outstanding preferred stock with a liquidation preference of $25,000,000 and 94%
of the outstanding PolyVision common stock.
9
<PAGE>
THE ALPINE GROUP, INC. AND SUBSIDIARIES
6. DISCONTINUED OPERATIONS (CONTINUED)
As a result of the PolyVision Merger, Alpine's ownership of the outstanding
PolyVision common stock increased from 70.0% to 94%. In accordance with FASB
Technical Bulletin 85-5, this increase in equity ownership has been recorded as
the acquisition of a portion of PolyVision minority interest at its estimated
fair value. Because the minority interest was acquired by an Alpine subsidiary
issuing stock, and because Alpine subsequently distributed to its stockholders
most of the PolyVision common stock owned by it, the excess of the fair value of
the minority interest acquired over the book value of the interests given up in
APV and Posterloid, has been added directly to capital surplus.
On June 14, 1995, Alpine distributed to its stockholders 73% of the
outstanding PolyVision common stock (the "PolyVision Spin-Off"). This
distribution, when combined with shares of PolyVision common stock to be used as
partial consideration in connection with the acquisition of Adience and the
retirement of the Adience 11% Senior Secured Notes will result in the ownership
by Alpine of less than 20% of the outstanding shares of PolyVision common stock.
Accordingly, Alpine is accounting for its remaining PolyVision investment at its
fair value as a security available for sale which amount is included in long
term investments and other assets in the accompanying balance sheet. Because the
shares of PolyVision common stock to be distributed had a negative book value,
Alpine's stockholders' equity was not reduced by the PolyVision Spin-Off. The
aforementioned transaction is a taxable transaction and actual taxes payable, if
any, will depend on Alpine's tax position for fiscal 1996.
7. DEBT
Debt consists of the following:
<TABLE>
<CAPTION>
JULY 31, APRIL 30,
1995 1995
---------- ---------
(IN THOUSANDS)
<S> <C> <C>
12.25% Senior Secured Notes due 2003 (face value $153,000,000)................... $ 140,358 $ --
$85.0 million revolving credit facility.......................................... 34,208 --
13.5% Senior Secured Notes (face value $21,000,000).............................. -- 20,790
Adience 11% Senior Secured Notes due 2002 (face value of $4,989,000 and
$49,079,000 at July 31, 1995 and April 30, 1995, respectively).................. 4,638 44,386
Revolving credit loan -- Superior................................................ -- 16,533
Revolving credit loan -- Adience................................................. -- 12,345
Revolving credit loan -- DNE..................................................... 1,146 627
Term loan........................................................................ -- 5,386
Mortgage loan.................................................................... 5,250 5,297
Subordinated note................................................................ 2,469 2,469
Lease finance obligations........................................................ 5,945 5,967
Other............................................................................ 3,193 5,379
---------- ---------
Total debt..................................................................... 197,207 119,179
Less: Short-term borrowings and current portion................................ 1,864 35,157
---------- ---------
Long-term debt................................................................. $ 195,343 $ 84,022
---------- ---------
---------- ---------
</TABLE>
The aggregate maturities of long-term debt for the five years subsequent to
July 31, 1995, are as follows:
<TABLE>
<CAPTION>
FISCAL YEAR
---------------------------------------------------------------- AMOUNT
--------------
(IN THOUSANDS)
<S> <C>
1996............................................................ $ 1,864
1997............................................................ 3,446
1998............................................................ 1,273
1999............................................................ 1,137
2000............................................................ 34,711
</TABLE>
10
<PAGE>
THE ALPINE GROUP, INC. AND SUBSIDIARIES
7. DEBT (CONTINUED)
On July 21, 1995 Alpine completed a placement of $153,000,000 principal
amount of 12.25% Senior Secured Notes ("Senior Notes") due 2003 at an issue
price of 91.737%, with interest payable semiannually on January 15 and July 15.
The Senior Notes are guaranteed by Superior and Adience and are secured by a
pledge of the capital stock of Superior and Adience. The Senior Notes include
certain customary covenants including, among other things, limitations on
indebtedness, investments, and payment of dividends on common stock.
In conjunction with the placement of the Senior Notes, Alpine entered into
an $85.0 million revolving credit facility (the "Credit Facility") of which
$34,208,000 was outstanding at July 31, 1995. Interest on the Credit Facility is
payable monthly at a rate of LIBOR plus 2.25% or prime plus 0.375%. Borrowings
under the facility are subject to a borrowing base determined as a percentage of
eligible accounts receivable and inventory (as defined). As of July 31, 1995
total borrowing availability amounted to approximately $70,000,000. Loans under
the Credit Facility are guaranteed by Superior and Adience and are secured by
substantially all of Alpine's assets, other than capital stock of its
subsidiaries, real estate, and other fixed assets. Amounts outstanding under the
Credit Facility are due upon termination in July 2000. The Credit Facility
contains customary covenants including limitations on capital expenditures,
dividends, and additional borrowings, as well as certain financial covenants
related to net worth and operating cash flow.
Proceeds from the Senior Notes, borrowings under the Credit Facility, and a
portion of cash reserves were used to refinance a substantial portion of the
Company's debt. This included repayment of the $140,000,000 Alcatel Acquisition
Notes (see Note 5). The Alcatel Acquisition Notes were issued on May 11, 1995,
and the proceeds of which were used to: (1) pay the initial purchase price for
the Alcatel Acquisition ($93,000,000); (2) repay amounts outstanding under
Superior's revolving credit facility ($17,200,000) and its term loan
($5,400,000); pay fees and expenses amounting to $5,100,000; with the balance of
$19,300,000_being added to corporate cash reserves. The other major uses of the
proceeds from the Senior Notes and the Credit Facility included repayment of
$21,000,000 face amount of the Company's 13.5% Senior Secured Notes; redemption
at a discount of approximately 90% of $49.1 million face amount of Adience's 11%
Senior Secured Notes; and the repayment of the balance outstanding under
Adience's revolving credit facility, which amounted to $10.0 million.
As a result of the refinancing and the aforementioned redemption of
indebtedness, the Company recognized an $5,180,000 extraordinary loss on the
early extinguishment debt during the quarter ended July 31, 1995 related
principally to the write-off of deferred loan fees associated with the various
debt repayments.
8. PREFERRED STOCK
On July 31, 1995, the Company issued 737,476 shares of Company common stock
in connection with the exchange of all the outstanding 8.5% Preferred Stock plus
accrued dividends at a conversion price of $5.25 per share of common stock.
9. COMMITMENTS AND CONTINGENCIES
Together with various parties, Alpine has been named as a defendant in a
lawsuit filed by the State of New York in Federal district court relating to the
release of hazardous chemicals at a landfill near Rochester, New York. The State
of New York alleges that Alpine, by virtue of its purchase of some (but not all)
of the assets of an entity that allegedly disposed of hazardous substances, is
liable as a corporate successor under the federal Comprehensive Environmental
Response, Compensation and Liability Act ("CERCLA" or "Superfund") for the costs
of remediation. The total remediation costs for the site have been estimated by
the New York Department of Environmental Conservation to potentially be in
excess of $14,000,000, Alpine has filed a motion for summary judgment dismissing
the case against Alpine. This action is in an early stage, and no determination
has yet been made as to either the reasonableness of New York's claim and its
cost estimates or as to Alpine's liability, if any, or its share of such
remediation costs. Management believes that it has strong defenses to this
action and it has indemnification rights with respect to liabilities, if any,
relating to
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THE ALPINE GROUP, INC. AND SUBSIDIARIES
9. COMMITMENTS AND CONTINGENCIES (CONTINUED)
this matter from the seller of the assets. However, there can be no assurance
that an adverse outcome in this case would not have a material adverse effect on
Alpine's consolidated financial position or results of operations.
In February 1992, PolyVision was cited by the Ohio Environmental Protection
Agency (the "Ohio EPA') for violations of Ohio's hazardous waste regulations,
including speculative accumulation of waste (holding waste on-site beyond the
legal time limit) and illegal disposal of hazardous waste on the site of its
Alliance, Ohio manufacturing facility. In December 1993, PolyVision and Adience
signed a consent order with the Ohio EPA and the Ohio Attorney General which
required PolyVision and Adience to pay to the State of Ohio a civil penalty and
to remediate the site in accordance with specified cleanup goals. In addition,
the consent order requires the payment of stipulated penalties of up to $1,000
per day for failure to satisfy certain requirements of the consent order,
including milestones in the closure ,plan. In October 1994, PolyVision and
Adience filed a proposed amendment to the consent order which would allow
PolyVision and Adience to establish risk-based cleanup goals, an approach which
has been approved by the Ohio EPA for other contaminated sites. If the Ohio EPA
approves this proposed amendment, use of this approach is expected to reduce the
extent and cost of remediation required at this site. The Ohio EPA has not yet
responded to this proposed amendment. At July 31, 1995, environmental accruals
amounted to $493,000 which represents management's estimate of the amounts
remaining to be incurred in this matter, including the costs of effecting the
closure plan, bonding and insurance costs, penalties and legal and consultants'
fees. If the Ohio EPA does not accept the proposed amendment to the consent
order, the cost of the remediation may exceed the amounts currently accrued.
Under the acquisition agreement pursuant to which PolyVision acquired the
Alliance facility from Adience, Adience represented and warranted that, except
as otherwise disclosed to PolyVision, no hazardous material had been stored or
disposed of on the property. No disclosure of storage or disposal of hazardous
material on the site was made. Accordingly, Adience is required to indemnify
PolyVision for any losses in excess of $250,000, PolyVision has notified Adience
that it is claiming the right to indemnification for all costs in excess of
$250,000 incurred by PolyVision in this matter and has received assurance that
Adience will honor such claim.
Adience was recently named as one of many defendants in a class action
lawsuit brought in the circuit court of Cook County, Illinois, seeking unstated
monetary damages and alleging that products produced by Adience caused certain
of its employees, former employees, and such persons' family members to suffer
from asbestos-related diseases or an increased risk of developing such diseases.
Alpine and its counsel are evaluating the validity of such claims and the scope
of its potential liabilities and defense costs.
Alpine is subject to other legal proceedings and claims which have primarily
arisen in the ordinary course of business and have not been finally adjudicated.
In the opinion of management, based on its examination of such matters and
discussions with counsel, the ultimate resolution of all pending or threatened
litigation, claims and assessments will not have a material adverse effect upon
Alpine's consolidated financial position or results of operations.
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THE ALPINE GROUP, INC. AND SUBSIDIARIES
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF RESULTS OF OPERATIONS AND
LIQUIDITY AND CAPITAL RESOURCES
Alpine is a diversified industrial company principally engaged in the
manufacture and sale of copper wire and cable for the telecommunications
industry, speciality refractory products for the iron and steel, glass,
aluminum, cement and co-generation industries and data communications and other
electronic products and systems for military, governmental and commercial
applications. Alpine entered the copper wire and cable business in 1993 with the
acquisition of Superior and significantly enlarged its presence in this business
with the Alcatel Acquisition in May 1995 (see Note 5 to the accompanying
Condensed Consolidated Financial Statements). Alpine entered the specialty
refractory business with the acquisition of Adience in December 1994 (the
"Adience Acquisition").
RESULTS OF OPERATIONS
The Alcatel Acquisition and the Adience Acquisition were both accounted for
under the purchase method with the results from these operations included in
Alpine's consolidated results on a prospective basis. As a consequence, the
operations of Adience and the Alcatel Business are reflected in the historical
results of operations from their respective acquisition dates.
Due to the significance of the Alcatel Acquisition and the Adience
Acquisition on Alpine's results, operating statement data included in the table
below is presented both on an historical accounting basis, as well as on a
proforma basis as if such acquisitions occurred on May 1, 1994 which management
believes provides comparability among reporting periods. The proforma data
presented below includes adjustments to depreciation and goodwill amortization
to reflect acquisition related purchase accounting adjustments. The proforma
data for the Alcatel Business and the Adience operations prior to their
acquisition dates also includes proforma adjustments to reflect: (1) with
respect to Adience, the elimination of certain expenses incurred by Adience that
were directly attributable to the acquisition of Adience or would not have been
incurred if the acquisition of Adience had taken place on May 1, 1994 and; (2)
with respect to the Alcatel Business, reductions in freight costs and other
manufacturing expenses, as well as adjustments to selling, general and
administrative expenses incurred in the Alcatel Business which have been
eliminated since the date of the Alcatel Acquisition. The proforma adjustments
described above are consistent with those adjustments reflected in the
"Unaudited Proforma Condensed Combined Statements of Operations" for the 12
months ended April 30, 1995 included in Item 7 in the Company's Annual Report on
Form 10-K for the year ended April 30, 1995. The proforma data are not
necessarily indicative of the results that would have been achieved had such
acquisitions actually occurred on May 1, 1994, nor are they necessarily
indicative of Alpine's future results.
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The data presented in the table below reflects the Company's three business
segment: telecommunications wire and cable ("Superior"); refractories
("Adience") and data communications and electronic products ("DNE").
<TABLE>
<CAPTION>
QUARTER ENDED QUARTER ENDED
JULY 31, 1995 JULY 31, 1994
-------------------------- -------------------------
HISTORICAL PROFORMA HISTORICAL PROFORMA
------------ ------------ ----------- ------------
<S> <C> <C> <C> <C>
Net sales
Superior............................................... $ 94,059 $ 101,580 $ 31,857 $ 82,682
Adience................................................ 29,460 29,460 -- 26,422
DNE.................................................... 5,265 5,265 7,473 7,473
------------ ------------ ----------- ------------
Consolidated......................................... $ 128,784 $ 136,305 $ 39,330 $ 116,577
Gross profit
Superior............................................... $ 7,910 $ 8,505 $ 3,346 $ 7,394
Adience................................................ 6,825 6,825 -- 5,005
DNE.................................................... 1,593 1,593 2,339 2,339
------------ ------------ ----------- ------------
Consolidated......................................... $ 16,328 $ 16,923 $ 5,685 $ 14,738
Gross margin percentage
Superior............................................... 8.4% 8.4% 10.5% 8.9%
Adience................................................ 23.2% 23.2% N/A 18.9%
DNE.................................................... 30.3% 30.3% 31.3% 31.3%
------------ ------------ ----------- ------------
Consolidated......................................... 12.7% 12.4% 14.5% 12.6%
Selling, general and administrative expenses
Superior............................................... $ 1,716 $ 1,754 $ 1,187 $ 1,587
Adience................................................ 3,654 3,654 -- 3,959
DNE.................................................... 1,583 1,583 1,614 1,614
Corporate.............................................. 949 949 705 705
------------ ------------ ----------- ------------
Consolidated......................................... $ 7,902 $ 7,940 $ 3,506 $ 7,865
Amortization of goodwill
Superior............................................... $ 374 $ 388 $ 280 $ 388
Adience................................................ 311 311 -- 311
DNE.................................................... -- -- -- --
Corporate.............................................. (12) (12) 11 11
------------ ------------ ----------- ------------
Consolidated......................................... $ 673 $ 687 $ 291 $ 710
Operating income
Superior............................................... $ 5,820 $ 6,363 $ 1,879 $ 5,419
Adience................................................ 2,860 2,860 -- 735
DNE.................................................... 10 10 725 725
Corporate.............................................. (937) (937) (716) (716)
------------ ------------ ----------- ------------
Consolidated......................................... $ 7,753 $ 8,296 $ 1,888 $ 6,163
</TABLE>
NET SALES
PROFORMA BASIS
On a proforma basis, net sales for the quarter ended July 31, 1995 were
$136.3 million, representing an increase of $19.7 million or 17% over proforma
net sales for the quarter ended July 31, 1994 of $116.6 million.
On an industry segment basis, Superior's proforma net sales were $101.6
million for the July 1995 quarter, representing an increase of $18.9 million or
23% over proforma net sales of $82.7 million for the July 1994 quarter.
Approximately $11.5 million of the increase was attributable to the pass
through, in the form of increased selling prices, of higher copper costs during
the July 1995 quarter. The remainder of the
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increase of approximately $7.4 million ( 8.9%) resulted from increased demand
for telephone cable products, additional business under new long-term supply
agreements with two regional Bell operating companies, and higher sales of
recently introduced, performance enhanced telephone wire products.
Adience's net sales for the July 1995 quarter were $29.5 million or 11.5%
higher than proforma net sales for the July 1994 quarter of $26.4 million. The
increase in proforma net sales was due to higher sales of block to the plate
glass industry, driven by the current high level of demand for flat plate glass
resulting in additional flat plate glass capacity being added both in the U.S.
and internationally, as well as increased activities in Adience's rebuilding
services for coke ovens.
DNE's net sales for the July 1995 quarter were $5.3 million, or $2.2 million
less than net sales of $7.5 million recorded in the July 1994 quarter. This
reduction was due primarily to the substantial completion during the year ended
April 30, 1995 of a major contract with NASA for the manufacture of hardware
interface modules, as well as customer delays under certain requirements
contracts which are now expected to be filled in the second and third quarters
of fiscal 1996.
HISTORICAL BASIS
On an historical basis, net sales increased by 227%, from $39.3 million in
the July 1994 quarter to $128.8 million in the July 1995 quarter. This increase
of $89.4 million was primarily attributable to the inclusion of the results of
operations of Adience and the Alcatel Business and the aforementioned pass
through of higher copper costs during the July 1995 quarter, offset somewhat by
the aforementioned reduction in DNE's net sales.
GROSS PROFIT
PROFORMA BASIS
On a proforma basis, gross profit for the July 1995 fiscal quarter was $16.9
million, representing an increase of $2.2 million or 15% over the July 1994
quarterly proforma gross profit of $14.8 million. The proforma gross margin
percentage was comparable for both quarterly periods.
Superior's proforma gross margin was 8.4% in the July 1995 quarter. However,
excluding the impact of the pass through of higher copper costs, Superior's
proforma gross margin would have been 8.9% for this period which is comparable
to the proforma gross margin for the July 1994 quarter. The comparative gross
margin was positively impacted in the July 1995 quarter by price increases on a
majority of Superior's long-term supply agreements which are being phased in
over varying periods through December 1995. Negatively impacting the July 1995
comparative gross margin however, was a delay in achieving anticipated freight
savings from the Alcatel Acquisition due primarily to the current high level of
production backlog at Superior's four manufacturing facilities. These freight
savings are expected to be achieved in the near future.
Adience's proforma gross margin increased from 18.9% for the July 1994
quarter to 23.2% for the July 1995 quarter, resulting in an increase in
comparative proforma gross profit over this same period of approximately $2.0
million. The comparative proforma gross margin improvement was due primarily to
the elimination of unprofitable product lines and the reduction in cost in
Adience's specialty block division, as well as improved fixed cost absorption
due to the aforementioned higher sales of block to the flat plate glass
industry.
DNE's gross margin of 30.3% for the July 1995 quarter remained relatively
constant, on a comparative basis, to the gross margin of 31.3% for the July 1994
quarter.
HISTORICAL BASIS
On an historical basis, gross profit increased from $5.7 million for the
July 1994 quarter to $16.3 million for the July 1995 quarter, representing an
increase of $10.6 million or 187%. During this same period the gross margin
declined from 14.5% to 12.7%. The increase in gross profit was directly
attributable to the inclusion of the Alcatel Business and Adience during the
July 1995 quarter. Similarly, the decline in gross margin was also due to the
inclusion of the operations of these businesses as the wire and cable business
and,
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<PAGE>
to a lesser degree, the refractories business operate in relatively lower gross
margin industries as compared to DNE. Also contributing to the lower gross
margin in the July 1995 quarter was the impact of the aforementioned pass
through of higher copper costs.
SELLING, GENERAL AND ADMINISTRATIVE EXPENSES
PROFORMA BASIS
Proforma SG&A expenses increased by $75,000 to $7.9 million in the July 1995
quarter. The major components of the change in proforma SG&A expenses included
the following: (1) a comparative increase of $167,000 at Superior resulting from
increased sales commission due to higher sales of networking wire and cable
products and transitional data processing charges of a temporary nature
associated with the Alcatel Acquisition; (2) a comparative reduction of $305,000
at Adience due primarily to reductions in corporate staffing and related
expenses; and (3) a $244,000 increase in corporate expenses related to recent
transactional activities and increased staffing commensurate with the growth in
operations.
HISTORICAL BASIS
On an historical basis, SG&A expenses increased from $3.5 million in the
July 1994 quarter to $7.9 million in the July 1995 quarter, representing an
increase of $4.4 million or 125%. The principal cause of the increase in SG&A
expenses was the inclusion of $3.7 million in SG&A expense for Adience's
operations, as well as an increase in Superior ($529,000) and at corporate
($244,000), reflecting the growth in operations of Superior and the overall
increase in activities.
OPERATING INCOME
PROFORMA BASIS
On a proforma basis comparative operating income increased $2.1 million or
35% from $6.2 million for the July 1994 quarter to $8.3 million for the July
1995 quarter.
On an industry segment basis, Superior's comparative proforma operating
income increased by $944,000 or 17% which reflected higher sales, offset
somewhat by higher SG&A expenses (some of which are transitional in nature).
Adience's comparative proforma operating income increased dramatically from
$735,000 to $2.9 million (an increase of $2.1 million or more than 289%) which,
to some degree, was due to higher sales levels, but more importantly to cost
reductions and elimination of unprofitable product lines. DNE's comparative
operating income declined by $715,000 due primarily to lower sales volumes.
HISTORICAL BASIS
On an historical basis, operating income increased from $1.9 million for the
July 1994 quarter to $7.8 million for the July 1995 quarter, an increase of $5.9
million or 310%. This increase included a $3.9 million increase at Superior
attributable to the inclusion of the Alcatel Business for a portion of the July
1995 fiscal quarter; $2.9 million from inclusion of the Adience operations in
the July 1995 quarter; a comparative reduction of approximately $700,000 at DNE;
and a comparative increase in corporate expenses of approximately $221,000.
NET INTEREST EXPENSE
During the July 1995 quarter, Alpine incurred net interest expense (interest
expense, net of interest income) of $6.4 million as compared to $1.0 million in
the July 1994 quarter. The increase in interest expense was due primarily to:
(1) interest cost associated with debt assumed in the Adience Acquisition of
approximately $61 million; (2) $140 million of debt incurred under the Alcatel
Acquisition Notes (see Note 7 to the accompanying Condensed Consolidated
Financial Statements); and (3) $21 million senior secured notes issued in
January 1995.
As described in Note 7, on July 21, 1995 Alpine refinanced a substantial
portion of its debt by issuance of $153 million ($135 million net of discount,
commissions and expenses) of Senior Secured Notes due 2003 and by entering into
an $85 million revolving credit facility (of which $34.2 million was drawn at
July 31,
16
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1995). Management believes that the refinancing would not have had a material
impact on interest expense for the July 31, 1995 quarter if the refinancing had
been consummated at the beginning of the July 1995 quarter.
INCOME TAX EXPENSE
The Company did not incur any Federal income tax expense for the July 1995
or 1994 quarter. The Company did however incur state income tax expense and
foreign tax expense (subject to the potential future benefit of the foreign tax
credit) of $150,000 and $119,000 for the July 1995 and July 1994 quarters,
respectively.
DISCONTINUED OPERATIONS
As described in Note 6 to the Condensed Consolidated Financial Statements,
during the quarter ended July 31, 1995 the Company completed the merger of IDT
(a subsidiary of Adience) with its Alpine PolyVision, Inc. ("APV") and
Posterloid subsidiaries. Further on June 14, 1995 the Company distributed a
substantial majority of its investment in the merged company ("PolyVision
Corp.") to its stockholders resulting in the Company's investment in the common
stock of PolyVision Corp. being less than 20%. As a result of the distribution,
the operations of APV and Posterloid have been reported as discontinued
operations in the Condensed Consolidated Financial Statements.
For the three month periods ended July 31, 1995 and 1994 losses from
discontinued operations were $379,000 and $826,000, respectively.
EXTRAORDINARY LOSS
During the quarter ended July 31, 1995, the Company incurred an
extraordinary loss from the extinguishment of debt of $5.1 million. This
extraordinary loss relates primarily to the write-off of unamortized deferred
loan fees associated with debt that was repaid in conjunction with the
refinancing described in Note 7 to the Condensed Consolidated Financial
Statements.
LIQUIDITY AND CAPITAL RESOURCES
During the quarter ended July 31, 1995 Alpine completed the Alcatel
Acquisition, consummated a refinancing of a significant portion of its debt, and
completed the spin off of a substantial portion of its Ownership in PolyVision
Corporation (see note 6 to the Condensed Consolidated Financial Statements),
which transactions have had a material impact on Alpine's financial condition
and liquidity.
The purchase price for the Alcatel Acquisition including expenses was
approximately $103.4 million which was paid in cash (including a deferred
payment of $9.9 million made in August 1995) and was financed by the issuance of
the $140 million Alcatel Acquisition Notes, due in 1997 (see notes 5 and 7 to
the accompanying Condensed Consolidated Financial Statements).
On July 21, 1995 Alpine completed a refinancing which included the issuance
of $153 million principal amount of Senior Secured Notes ("Senior Notes") (net
proceeds of approximately $135 million, net of discount and expenses), due in
2003. The Company also entered into an $85.0 million revolving credit facility
("Credit Facility") of which $34.2 million was outstanding at July 31, 1995.
Proceeds from the Senior Notes and the Credit Facility along with a portion of
cash reserves were used: (1) to redeem the Alcatel Acquisition Notes, (2) to
repay $30.9 million in short term borrowings, (3) to redeem at a discount $44.8
million face amount of Adience's 11% Senior Notes and (4) to redeem, repay or
reduce other outstanding indebtedness of Alpine.
At July 31, 1995, after the refinancing, Alpine's capital structure included
$197.2 million of long term debt (including current maturities of $1.9 million),
and stockholders' equity of $49.8 million including $16.0 million of convertible
preferred stock. At July 31, 1995 Alpine did not have any short term borrowings.
Alpine believes the aforementioned refinancing has had a positive impact on
its financial condition and liquidity by substantially lenghthening the
maturities on its debt while creating substantial liquidity through funds
availability under its Credit Facility.
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<PAGE>
With respect to debt maturities, the refinancing eliminated $30.9 million of
short term borrowings due within the next twelve months and the Alcatel
Acquisition Notes which were due in 1997. This debt was replaced with the Senior
Notes and the Credit Facility, neither of which have any principal payment
requirements unitl their respective maturities (2000 with respect to the Credit
Facility and 2003 with respect to the Senior Notes. Additional debt remaining
after the refinancing amounted to $22.6 million at July 31, 1995, with required
principal payments in the next twelve months of $1.9 million, and aggregate
required principal payments over the next 5 years of $8.2 million.
With respect to liquidity, Alpine had excess consolidated availability under
its Credit Facility (based on eligible accounts receivable and inventory) of
approximately $35 million. As of July 31, 1995 which, when combined with cash
and marketable securities at such date, result in total cash and credit
availability of approximately $44 million. This availability was reduced by $9.9
million in August 1995 upon repayment of the deferred purchase price component
of the Alcatel Acquisition, such repayment being made by additional borrowings
under the Credit Facility, resulting in adjusted consolidated cash and credit
availability of approximately $34 million. While the Credit Facility does
include sublimit restrictions on outstanding net borrowings allocated to
Alpine's principal subsidiaries (Superior, and Adience), such sublimits are not
expected to negatively impact over the next twelve months, or in future years,
the liquidity of Superior or Adience. There are also no restrictions on
utilizing borrowing under the Credit Facility to pay interest on the Senior
Notes or any of the Company's other debt so long as the Company is in compliance
with its related loan covenants.
The Company projects that cash interest expense over the next 12 months will
approximate $24 million, which, when combined with principal repayment
requirements of $1.9 million, will result in total debt service requirements
(principal and interest) of approximately $26 million. The Company also expects
to invest approximately $6-9 million in capital expenditures over the next
twelve months, resulting in total debt service and capital commitments of
$32-$35 million.
The Company intends to fund its capital expenditures and debt service
commitments from funds generated from operations. The Company has experienced a
significant growth in its operating cash flow during its latest fiscal quarter
due to: (1) the impact of the Alcatel Acquisition, (2) the substantial
improvements in Adience's operating results, and (3) subject to certain
commitments discussed below, the elimination of the negative cash flow impact of
funding development expenses associated with the Company's APV activities which
was included in the aforementioned PolyVision spin off. During the quarter ended
July 31, 1995, the Company generated earnings before interest, taxes,
depreciation and amortization ("EBITDA") of $10.8 ($11.4 million on a proforma
basis, assuming the Alcatel Acquisition occurred as of May 1, 1995). At this
level of operations the Company would expect to incur in excess of $40 million
of EBITDA over the next twelve months.
Since the Company does not expect to incur any material income tax expense
due to its level of non-cash charges and existing tax loss carryforwards,
substantially all of the EBITDA generated should be available to service the
aforementioned capital expenditures and debt service and capital commitments.
Accordingly, the Company expects to be able to fund all of its anticipated
operating commitments from internally generated cash flow without having to use
excess availability under the Credit Facility or by using existing cash
reserves.
In addition to the commitments discussed above, Alpine is committed to lend
up to $7.5 million to fund operating deficits of PolyVision Corp. over the next
twenty-four months. The Company believes its $34 million in existing cash and
credit availability will be sufficient to fund this commitment without
materially effecting the Company's overall liquidity.
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PART II. OTHER INFORMATION
ITEM 3. DEFAULTS ON SENIOR SECURITIES.
(a) None.
ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K.
(a) Exhibits: Exhibit 27 -- Financial Data Schedule
(b) Reports of Form 8-K.
(i) On May 26, 1995 the Company filed a Current Report on Form 8-K with
the Securities and Exchange Commission reporting the acquisition of the U.S.
and Canadian copper wire and cable business of Alcatel NA Cable Systems,
Inc. and Alcatel Canada Wire, Inc.......................On July 25, 1995 the
Company filed an amendment to the aforesaid Form 8-K to include pro forma
financial statements.
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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.
THE ALPINE GROUP, INC.
(Registrant)
Date: September 14, 1995 By: /s/ DAVID S. ALDRIDGE
-----------------------------------
David S. Aldridge
Chief Financial Officer
20
