SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K/A
Current Report
Pursuant to Section 13 or 15(d) of
The Securities Exchange Act of 1934
Date of Report (Date of earliest event reported) July 13, 1999
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Heilig-Meyers Company
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(Exact name of registrant as specified in its charter)
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Virginia 1-8484 54-0558861
(State or other jurisdiction of incorporation) (Commission (IRS Employer
file number) Identification No.)
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12560 West Creek Parkway, Richmond, Virginia 23238
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code (804) 784-7300
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N/A
(Former name or former address, if changed since last report)
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Item 7. Financial Statements and Exhibits
(b) Pro Forma Financial Information
Pro Forma Condensed Consolidated Statements of Earnings For the
Year Ended February 28, 1999
Pro Forma Condensed Consolidated Statements of Earnings For the
Three Months Ended May 31, 1999
Pro Forma Condensed Consolidated Balance Sheet As of May 31, 1999
Notes to Pro Forma Condensed Consolidated Financial Statements
(c) Exhibits
The following exhibit is filed as a part of this report:
2.1 Stock Purchase Agreement dated June 15, 1999, as
amended by the First Amendment thereto dated July 13,
1999, by and among Heilig-Meyers Company, a Virginia
corporation, Rhodes Holdings, Inc., a Delaware
corporation, and Rhodes Holdings II, Inc., a Delaware
corporation. Pursuant to Item 601(b)(2), the Company
agrees to furnish supplementally a copy of any
omitted schedule or exhibit to this agreement to the
Commission upon request.
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SIGNATURE
Pursuant to the requirements of the Securities and Exchange Act of
1934, the registrant has caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.
HEILIG-MEYERS COMPANY
Date: August 23, 1999 By: /s/ Roy B. Goodman
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Roy B. Goodman
Executive Vice President,
Chief Financial Officer
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PRO FORMA FINANCIAL INFORMATION
The following unaudited pro forma condensed consolidated statements of
earnings for the year ended February 28, 1999 and the three months ended May 31,
1999 give effect to dispositions of businesses by Heilig-Meyers. The pro forma
information is based on the historical financial statements of Heilig-Meyers
giving effect to the disposition under the assumptions and adjustments described
in the accompanying notes to the unaudited pro forma condensed consolidated
financial statements. The following unaudited pro forma condensed consolidated
balance sheet gives effect to dispositions of businesses by Heilig-Meyers which
were completed after the balance sheet date, as if such dispositions had been
completed as of May 31, 1999.
On July 13, 1999, with an effective date of July 1, 1999, Heilig-Meyers
completed the sale of its wholly-owned subsidiary, Rhodes, Inc. Heilig-Meyers
received $60.0 million in cash, a $40 million 10% pay-in-kind subordinated note
due 2004 (9.5% interest rate per annum for periods where interest is paid in
cash) and an option to acquire a 10% equity interest in Rhodes Holdings, the
acquiring entity. Heilig-Meyers also received an option to acquire an additional
10% equity interest in Rhodes Holdings if certain financial goals are achieved
by Rhodes Holdings. Heilig-Meyers has agreed to provide or guarantee a $20.0
million standby credit facility after the closing, which may only be drawn on in
certain circumstances after utilization of availability under the Rhodes'
primary credit facility. During its first fiscal quarter ended May 31, 1999,
Heilig-Meyers recorded a $113.7 million write-down, before benefit for income
taxes, of its investment in Rhodes, Inc.
On August 6, 1999, Heilig-Meyers completed the sale of 93% of its
interest in its Mattress Discounters division. Heilig-Meyers received
approximately $204 million in cash, subject to certain working capital
adjustments, a $7.5 million 12% pay-in-kind junior subordinated note due July
15, 2008, and a $10 million 10% pay-in-kind junior subordinated note due July
15, 2008 and retained a 7% equity interest in Mattress Discounters, less the
assumption of $4.3 million of liabilities by Heilig-Meyers. Heilig-Meyers
expects this transaction to result in a gain, net of income taxes, of
approximately $60.6 million.
The net cash proceeds generated by these transactions will be used to
reduce a portion of long term debt due within one year and notes payable.
The unaudited pro forma condensed consolidated financial statements
have been prepared by the management of Heilig-Meyers based upon historical and
other financial information. The pro forma statements do not purport to be
indicative of the results of operations or financial position which would have
occurred had the dispositions been made at the beginning of the periods or as of
the date indicated or of the financial position or results of operations which
may be obtained in the future.
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HEILIG-MEYERS COMPANY
PRO FORMA CONDENSED CONSOLIDATED STATEMENTS OF EARNINGS
FOR THE YEAR ENDED FEBRUARY 28, 1999
(AMOUNTS IN THOUSANDS, EXCEPT PER SHARE DATA)
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PRO FORMA ADJUSTMENTS
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MATTRESS
HEILIG-MEYERS RHODES DISCOUNTERS PRO FORMA
HISTORICAL OPERATIONS OPERATIONS OTHER COMBINED
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REVENUES:
Sales $ 2,431,152 $(457,501) $(238,271) $ 1,735,380
Other income 295,206 (22,119) (377) 272,710
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Total Revenues 2,726,358 (479,620) (238,648) - 2,008,090
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COSTS AND EXPENSES:
Costs of sales 1,637,901 (331,975) (149,101) 1,156,825
Selling, general & administrative 907,913 (176,924) (66,576) 664,413
Interest 75,676 - - (17,787)(D) 57,889
Provision for doubtful accounts 107,916 - - 107,916
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Total costs and expenses 2,729,406 (508,899) (215,677) (17,787) 1,987,043
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EARNINGS (LOSS) BEFORE INCOME TAXES (3,048) 29,279 (22,971) 17,787 21,047
Provision (benefit) for income taxes (1,081) 10,687 (8,384) 6,492 7,714
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NET EARNINGS (LOSS) $ (1,967) $ 18,592 $ (14,587) $ 11,295 $ 13,333
=============================================================================================================================
NET EARNINGS (LOSS) PER SHARE:
BASIC $ (0.03) $ 0.31 $ (0.25) $ 0.19 $ 0.22
DILUTED $ (0.03) $ 0.31 $ (0.25) $ 0.19 $ 0.22
=============================================================================================================================
Weighted average shares:
Basic 59,331 59,331 59,331 59,331 59,331
Diluted 59,331 59,331 59,331 60,103(F) 60,103(F)
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See notes to pro forma condensed consolidated financial statements.
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HEILIG-MEYERS COMPANY
PRO FORMA CONDENSED CONSOLIDATED STATEMENTS OF EARNINGS
FOR THE THREE MONTHS ENDED MAY 31, 1999
(AMOUNTS IN THOUSANDS, EXCEPT PER SHARE DATA)
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PRO FORMA ADJUSTMENTS
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MATTRESS
HEILIG-MEYERS RHODES DISCOUNTERS PRO FORMA
HISTORICAL OPERATIONS OPERATIONS OTHER COMBINED
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REVENUES:
Sales $ 618,492 $(114,846) $ (60,988) $ 442,658
Other income 70,711 (7,257) (89) 63,365
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Total Revenues 689,203 (122,103) (61,077) - 506,023
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COSTS AND EXPENSES:
Costs of sales 400,229 (79,358) (37,548) 283,323
Selling, general & administrative 231,320 (43,577) (16,818) 170,925
Interest 19,733 - - (4,806)(D) 14,927
Provision for doubtful accounts 23,872 - - 23,872
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Total costs and expenses 675,154 (122,935) (54,366) (4,806) 493,047
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Write-down of assets held for sale (113,690) 113,690(E) -
EARNINGS (LOSS) BEFORE INCOME TAXES (99,641) 832 (6,711) 118,496 12,976
Provision (benefit) for income taxes (29,101) 304 (2,450) 35,892 4,645
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NET EARNINGS (LOSS) $ (70,540) $ 528 $ (4,261) $ 82,604 $ 8,331
=================================================================================================================================
NET EARNINGS (LOSS) PER SHARE:
BASIC $ (1.18) $ 0.01 $ (0.07) $ 1.38 $ 0.14
DILUTED $ (1.18) $ 0.01 $ (0.07) $ 1.36 $ 0.14
=================================================================================================================================
Weighted average shares:
Basic 59,861 59,861 59,861 59,861 59,861
Diluted 59,861 59,861 59,861 60,630(F) 60,630(F)
See notes to pro forma condensed consolidated financial statements.
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HEILIG-MEYERS COMPANY
PRO FORMA CONDENSED CONSOLIDATED BALANCE SHEET
AS OF MAY 31, 1999
(AMOUNTS IN THOUSANDS)
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MATTRESS
RHODES DISCOUNTERS OTHER
HEILIG-MEYERS PRO FORMA PRO FORMA PRO FORMA PRO FORMA
HISTORICAL ADJUSTMENTS ADJUSTMENTS ADJUSTMENTS COMBINED
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Assets
Current assets:
Cash $ 20,649 $ 20,649
Accounts receivable, net 252,205 252,205
Retained interest in securitized receivables 192,184 192,184
Inventories 396,845 396,845
Other 98,773 98,773
Net assets held for sale 159,857 (88,877) (A) (70,980) (B) -
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Total current assets 1,120,513 (88,877) (70,980) - 960,656
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Property, plant & equipment, net 320,712 320,712
Other assets 104,995 40,038 (A) 13,500 (B) 163,502
4,969 (C)
Excess cost over net assets acquired, net 196,126 196,126
-
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$ 1,742,346 $ (48,839) $ (52,511) $ - $1,640,996
====================================================================================================================================
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Notes payable $ 201,358 $(159,218) (D) $ 42,140
Long-term debt due within one year 131,193 (54,900) (A)(D) (35,500) (D) 40,793
Accounts payable 147,368 147,368
Accrued expenses and other 154,875 6,061 (A) 4,250 (B) (3,052) (D) 239,484
77,350 (B)
-
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Total current liabilities 634,794 (48,839) (113,118) (3,052) 469,785
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Long-term debt/capital leases 536,766 536,766
Deferred income taxes 40,129 40,129
Stockholders' equity:
Common stock, at par 119,722 119,722
Capital in excess of par value 242,380 242,380
Unrealized gain on investments 5,478 5,478
Retained earnings 163,077 60,607 (B) 3,052 (D) 226,736
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Total stockholders' equity 530,657 - 60,607 3,052 594,316
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$ 1,742,346 $ (48,839) $ (52,511) $ - $1,640,996
====================================================================================================================================
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See notes to pro forma condensed consolidated financial statements.
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HEILIG-MEYERS COMPANY
Notes to Pro Forma Condensed Consolidated Financial Statements
(Amounts in Thousands)
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(A) To reflect the allocation of proceeds generated by the disposition of Rhodes, Inc.
Cash $ 60,000
Transaction costs (5,100)
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Net cash proceeds 54,900
Note receivable 40,000
Warrants to acquire a 10% equity interest in Rhodes Holdings, at fair value 38
Liabilities assumed by Heilig-Meyers (6,061)
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Total proceeds 88,877
Less: investment in Rhodes 88,877
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Gain (loss) on disposition $ -
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(B) To reflect the allocation of estimated proceeds to be generated by the planned disposition
of Mattress Discounters.
Cash $ 203,575
Transaction costs (8,857)
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Net cash proceeds 194,718
Notes receivable, net of discount 13,500
Liabilities assumed by Heilig-Meyers (4,250)
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Total proceeds 203,968
Less: investment in Mattress Discounters 66,011
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Gain on disposition 137,957
Income tax expense 77,350
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Net gain on disposition $ 60,607
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(C) Represents the 7% interest in Mattress Discounters retained by the Company.
This amount is carried at the Company's historical cost.
(D) To reflect the pro forma impact of reduction of debt outstanding from
application of net proceeds generated by the dispositions.
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3 months ended 12 months ended
May 31, 1999 February 28, 1999
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Net proceeds applied to notes payable $ 159,218 $ 159,218
Weighted average annual interest rate 8.10% 7.64%
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$ 12,897 $ 12,164
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Net proceeds applied to long-term debt $ 90,400 $ 90,400
Weighted average annual interest rate 7.00% 6.22%
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$ 6,328 $ 5,623
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Annual pro forma reduction in interest expense $ 19,225 $ 17,787
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Quarterly pro forma reduction in interest expense $ 4,806
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The first $90.4 million of net cash proceeds will be applied to long-term
debt due within one year and the remaining $159.2 million will be applied to
notes payable.
(E) To eliminate the write-down of investment in Rhodes to give effect to the
disposition of Rhodes as if it had been completed prior to the beginning of
the period.
(F) Diluted weighted average shares have been adjusted for pro forma purposes to
include common stock equivalents that were excluded for purposes of the
historical statements since the result would have been antidilutive to the
loss from operations.
