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Securities and Exchange Commission
Washington, D.C. 20549
_________________________________
FORM 8-K
_________________________________
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the Securities Exchange Act
of 1934
October 17, 1996
________________________________________________
Date of report (Date of earliest event reported)
The Alpine Group, Inc.
(Exact name of registrant as specified in its charter)
Delaware 1-9078 22-1620387
____________________________ _______________ ________________
(State or other jurisdiction Commission File (I.R.S. Employer
of incorporation) Number Identification
Number)
1790 Broadway, New York, New York 10019-1412
___________________________________________________________
(Address of principal executive offices) (Zip Code)
_________________________________________________________________
Registrant's telephone number, including area code (212) 757-3333
_____________________________________________________________
(Former name or former address, if changed since last report)
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Item 2. Acquisition or Disposition of Assets.
On October 17, 1996, Superior TeleCom Inc. ("TeleCom"), a
subsidiary of The Alpine Group, Inc. ("Alpine"), completed an
initial public offering (the "Offering") of 6,000,000 shares of
its common stock, par value $.01 per share ("TeleCom Common
Stock"), at a price per share to the public of $16.00, less
underwriting discounts and commissions. TeleCom received net
proceeds of $89,280,000 (before deduction of expenses payable by
TeleCom estimated at $700,000). The initial per share offering
price was determined by negotiations between TeleCom and Furman
Selz LLC, Oppenheimer & Co., Inc. and BT Securities Corporation,
as representatives of the underwriters of the Offering.
Upon completion of the Offering, Alpine owned 50.1% of the
outstanding TeleCom Common Stock. In connection with the
Offering, Alpine granted the underwriters a 30-day option to
purchase up to 900,000 additional shares of TeleCom Common Stock.
On October 31, 1996, the underwriters exercised such option, and
the closing in connection therewith is expected to occur on
November 5, 1996. As a result of the exercise of such option,
Alpine intends to restore its ownership of the outstanding
TeleCom Common Stock to 50.1% by exchanging with TeleCom a
portion of the Superior preferred stock owned by Alpine (as
described below) for shares of TeleCom Common Stocks repurchased
by TeleCom in the open market subsequent to the Offering. The
amount of Superior preferred stock to be contributed by Alpine
will be that number of shares having an aggregate liquidation
value equal to the aggregate price paid by TeleCom (including
brokers' commissions) for shares of TeleCom Common Stock to be
transferred by TeleCom to Alpine.
The public offering of TeleCom Common Stock was completed as
part of a reorganization (the "Reorganization"). In connection
with the Reorganization, on October 2, 1996, Superior
Telecommunications Inc. ("Superior") and DNE Systems, Inc.
("DNE"), which were then wholly owned by Alpine, declared
dividends on their common stock and agreed to repay to Alpine
existing intercompany indebtedness (which dividend and
intercompany indebtedness amounted to $205.0 million in the
aggregate). Further, Superior issued to Alpine 20,000 shares of
Superior's 6% cumulative preferred stock having an aggregate
liquidation value of $20.0 million. Alpine then contributed to
the capital of TeleCom all of the issued and outstanding common
stock of Superior and DNE, which resulted in Superior and DNE
becoming wholly owned subsidiaries of TeleCom. The payment of
the aforementioned dividend and the repayment of the intercompany
indebtedness was made from proceeds of the Offering and a new
TeleCom $150.0 million bank credit facility (the "TeleCom Credit
Facility"). In connection with the Reorganization, (i) Alpine
completed a tender offer for 50.1% of its outstanding 12 and 1/4% Series
B Senior Secured Notes due 2003 (the "Senior Notes") for total
consideration of $82.8 million, (ii) repaid its existing bank
credit facility (the "Alpine Credit Facility") and (iii) repaid
$0.7 million related to a mortgage loan at DNE (collectively, the
"Refinancing").
For further information regarding the Offering and the
Reorganization, reference is made to TeleCom's prospectus, dated
October 11, 1996, filed by TeleCom with the Securities and
Exchange Commission pursuant to Rule 424(b) under the Securities
Act of 1933, as amended, which is incorporated herein by
reference, particularly under the caption, "The Company."
Item 7. Financial Statements and Exhibits.
The following unaudited pro forma condensed consolidated
financial statements of Alpine give effect to the Reorganization,
the Offering and the Refinancing as if they had occurred as of
May 1, 1995 with respect to the statement of operations and July
31, 1996 with respect to the balance sheet. The unaudited pro
forma financial information is provided for comparative purposes
only and does not purport to be indicative of the results that
actually would have been obtained if these transactions had been
effected on the dates indicated or of those results that may be
obtained in the future.
THE ALPINE GROUP, INC.
UNAUDITED PRO FORMA CONDENSED CONSOLIDATED STATEMENTS
OF OPERATIONS
THREE MONTHS ENDED JULY 31, 1996
Pro Forma Pro Forma
Historical Adjustments Combined
____________________________________________
(dollars in thousands)
Net sales $151,447 $151,447
Cost of goods sold 127,483 127,483
________ ________
Gross profit 23,964 23,964
Selling, general &
administrative 9,790 $269 (a) 10,059
Amortization of
goodwill 761 761
________ ______ _________
Operating
income 13,413 (269) 13,144
Interest income 152 949 (b) 1,101
Interest (expense) (6,974) 1,669 (c) (5,305)
Other income
(expense), net (59) (59)
________ __________ __________
Income from
continuing
operations
before income
taxes & minority
interest in
subsidiary 6,532 2,349 8,881
Provision for income
taxes (2,286) (822) (d) (3,108)
________ _______ _______
Net income from
continuing
operations
before
minority
interest
in subsid-
iary 4,246 1,527 5,773
________ ______ ______
Minority interest in
subsidiary (3,404) (e) (3,404)
________ ______ ______
Net income 4,246 (1,877) 2,369
Preferred stock
dividends (234) (234)
________ ______ ______
Net income
attributable
to common
stock $4,012 ($1,877) $2,135
======== ======== =======
Net income per share
attributable to
common stock
(based upon
18,612,134
common shares
outstanding) $0.22 $0.11
======== ======== =======
See accompanying Notes to Unaudited Pro Forma Condensed
Consolidated Financial Statements
THE ALPINE GROUP, INC.
UNAUDITED PRO FORMA CONDENSED CONSOLIDATED STATEMENTS
OF OPERATIONS
TWELVE MONTHS ENDED APRIL 30, 1996
Pro Forma Pro Forma
Historical Adjustments Combined
____________________________________________
(dollars in thousands)
Net sales $524,113 $7,521 (f) $531,634
Cost of goods sold 453,785 7,018 (f) 460,711
(92)(f)
________ ______ ________
Gross profit 70,328 595 70,923
Selling, general &
administrative 35,148 1,075 (a) 36,256
33 (f)
Amortization of
goodwill 2,658 14 (f) 2,672
________ ______ ________
Operating
income 32,522 (527) 31,995
Interest income 2,146 3,798 (b) 5,944
Interest (expense) (27,795) 6,575 (c) (21,220)
Other income
(expense), net 22 22
________ __________ _________
Income from
continuing
operations
before income
taxes & minority
interest in
subsidiary 6,895 9,846 16,741
Provision for income
taxes (1,676) (4,183) (d) (5,859)
________ _______ _______
Net income from
continuing
operations
before
minority
interest
in subsid-
iary 5,219 5,663 10,882
Minority interest in
subsidiary (5,954) (e) (5,954)
________ ______ ______
Net income
from
continuing
operations 5,219 (291) 4,928
Preferred stock
dividends (1,098) (1,098)
________ ______ ______
Net income
from
continuing
operations
attributable
to common
stock $4,121 ($291) $3,830
======== ======== =======
Net income per share
from continuing
operations
attributable to
common stock
(based upon
17,987,219
common shares
outstanding) $0.23 $0.21
======== =======
See accompanying Notes to Unaudited Pro Forma Condensed
Consolidated Financial Statements
THE ALPINE GROUP, INC.
UNAUDITED PRO FORMA CONDENSED COMBINED BALANCE SHEET
AS OF JULY 31, 1996
Pro Forma Pro Forma
Historical Adjustments Combined
____________________________________________
(dollars in thousands)
ASSETS
Current assets:
Cash and
marketable
securities $9,680 $88,580 (g) $60,316
120,000 (h)
(135,718)(i)
(3,100)(h)
(19,126)(j)
Accounts
receivable,
net 58,839 58,839
Inventories,
net 60,326 60,326
Other current
assets 8,599 8,599
________ ________ ________
Total
current
assets 137,444 50,636 188,080
Property,
plant and
equipment,
net 99,019 99,019
Goodwill, net 81,929 81,929
Other assets 26,646 3,100 (h) 24,594
(5,152)(i)
________ ________ ________
Total assets $345,038 $48,584 $393,622
======== ======== ========
LIABILITIES &
STOCKHOLDERS'
EQUITY
Current liabilities:
Current portion
of long-term
debt $1,217 $1,217
Accounts
payable 42,950 42,950
Accrued
expenses 36,204 (391)(k) 35,813
________ ________ ________
Total current
liabilities 80,371 (391) 79,980
Long-term debt,
less current
portion 209,919 120,000 (h) 207,574
(122,345)(i)
Deferred income
taxes 3,611 7,405 (l) 11,016
Other long-term
obligations 4,315 4,315
Minority
interest -
Superior
TeleCom 12,017 (m) 12,017
Stockholders'
equity
Preferred
stock 11,758 11,758
Common stock 1,980 1,980
Capital in
excess of
par 114,093 114,093
Cumulative
translation
adjustment (307) (307)
Retained
earnings (74,986) (11,787)(i) (43,088)
43,685 (n)
Treasury
stock (5,206) (5,206)
Receivable
from
stock-
holders (510) (510)
________ ________ ________
Total
stock-
holders'
equity 46,822 31,898 78,720
________ ________ ________
Total
liabi-
lities
and
stock-
holders'
equity 345,038 48,584 393,622
======== ======== ========
See accompanying Notes to Unaudited Pro Forma Condensed
Consolidated Financial Statements
Notes to Unaudited Pro Forma
Condensed Consolidated Statements
(a) Represents estimated additional general and administrative
expense associated with TeleCom's status as a separate
public company.
(b) Reflects estimated incremental investment income (at an
assumed interest rate of 7.5%) that would have been earned
on the investment of the excess cash proceeds of the
Reorganization and the Offering after completion of the
Refinancing (which excess cash proceeds amounted to $50.6
million). However, Alpine has announced that it has
established a program to repurchase its common stock and
Senior Notes and any such repurchases would reduce the
estimated investment income set forth herein.
Notwithstanding the reduction in investment income that
might result from any such repurchases, the Company believes
the reduction in interest expense associated with the
repurchase of Senior Notes and/or the reduction in the
weighted average shares outstanding resulting from the
repurchase of its Common Stock would result in a positive
adjustment to net income per share as compared to the
proforma net income per share amount included in the
accompanying statement of operations for the quarter ended
July 31, 1996.
(c) The adjustment to interest expense resulting from the
Refinancing is as follows:
July 31, April 30,
1996 1996
________ _________
Interest on TeleCom Credit $ 2,100 $ 8,400
Facility (assuming a 7.0%
interest rate)
Amortization of deferred 193 770
financing costs associated
with the TeleCom Credit
Facility
Less: Historical interest
on debt being repaid (3,962) (15,745)
_______ ________
Total reduction in interest
expense $(1,669) $(6,575)
======= ========
(d) Adjusted to reflect an effective tax rate of 35%.
(e) Reflects the interest of minority stockholders (49.9%) in
the net income of TeleCom.
(f) Reflects the results of operations of the U.S. and Canadian
copper wire and cable business of Alcatel NA Cable Systems,
Inc. and Alcatel Canada Wire for the 11-day period ended May
11, 1995, the date of its acquisition by Alpine. See Note 6
to Alpine's 1996 annual report on Form 10-K for a further
description of this acquisition, including the proforma
report of such on Alpine's results of operations for the
year ended April 30, 1996.
(g) Reflects net proceeds of $88.6 million resulting from the
issuance of 6,000,000 shares of TeleCom Common Stock.
(h) Reflects $120.0 million of borrowings under the TeleCom
Credit Facility and $3.1 million in related deferred
financing costs.
(i) Reflects the payment of $135.7 million to retire existing
debt as part of the Refinancing, as follows:
Cash Retirement
Book Value Cost
Senior Notes $70,803 $83,876
Alpine Credit Facility 50,779 51,079
DNE mortgage loan 763 763
________ ________
$122,345 $135,718
======== ========
In connection with the repayment of the Senior Notes and the
Alpine Credit Facility, Alpine incurred an extraordinary
charge to earnings associated with the premium on
redemption, the write-off of unamortized deferred debt
issuance costs and unaccreted debt issuance discount
amounting to $11.8 million, net of income tax expense.
(j) Reflects the payment of $19.1 million in net income taxes
resulting from the gain referred to in Note (n) below,
offset by the tax benefit associated with the extraordinary
charge referred to in Note (i) above.
(k) Represents accrued interest payable on the Senior Notes
redeemed.
(l) Reflects the deferred tax liability resulting from the
Reorganization and Refinancing.
(m) Reflects the interest of minority stockholders in the net
assets of TeleCom.
(n) Reflects the gain on sale of stock of a subsidiary (net of
taxes) resulting from the Offering and related transactions.
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of
1934, The Alpine Group, Inc. has duly caused this report to be
signed on its behalf by the undersigned hereunto duly authorized.
THE ALPINE GROUP, INC.
By: /s/ Gary L. Edwards
___________________
Gary L. Edwards
Controller
Date: November 1, 1996
