<PAGE> 1
================================================================================
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
Date of Report (Date of Earliest Event Reported): January 12, 1998
AMERICAN BANKNOTE CORPORATION
(Exact Name of Registrant as Specified in its Charter)
DELAWARE
(State or Other Jurisdiction of Incorporation)
1-3410 13-0460520
(Commission File Number) (I.R.S. Employer Identification No.)
200 PARK AVENUE, NEW YORK, N.Y. 10166-4999
(Address of Principal Executive Offices) (Zip Code)
(212) 557-9100
(Registrant's Telephone Number, Including Area Code)
(Former Name or Former Address, if Changed Since Last Report)
================================================================================
<PAGE> 2
EXPLANATORY NOTE
American Banknote Corporation (the "Company") is filing this Report
to include in its filings under the Securities Exchange Act of 1934 certain
capitalization and pro forma information which was included in the Company's
Registration Statement on Form S-4 filed under the Securities Act of 1933 and
referred to below under "The Refinancing."
Item 5. Other Events
THE REFINANCING
On December 12, 1997, the Company consummated a refinancing (the
"Refinancing") of certain of its outstanding indebtedness. Pursuant to the
Refinancing, the Company: (i) consummated the offering of 95,000 units (the
"Units"), consisting of $95,000,000 aggregate principal amount of 11 1/4% Senior
Subordinated Notes due 2007 (the "Old Notes") and 95,000 warrants (the
"Warrants") to purchase an aggregate of 1,185,790 shares of common stock, par
value $0.01 per share (the "Common Stock"), of the Company (the "Initial
Offering"); (ii) consummated the Tender Offer and Consent Solicitation (each as
defined) with respect to the Company's 11 5/8% Senior Notes due 2002 (the "11
5/8% Notes"); and (iii) repaid outstanding amounts under the revolving credit
agreement of certain of its subsidiaries (the "Existing Credit Facility").
The Initial Offering was made in a transaction not requiring registration under
the Securities Act of 1933.
Pursuant to an Offer to Purchase and Consent Solicitation Statement
dated September 25, 1997, the Company offered to repurchase all but not less
than a majority, of its outstanding 11 5/8% Notes (the "Tender Offer") for an
amount in cash equal to $1,094.47 per $1,000 principal amount of 11 5/8% Notes.
Each tendering holder also received accrued and unpaid interest up to, but not
including, the payment date. In connection with the Tender Offer, the Company
also solicited consents (the "Consent Solicitation") from tendering holders of
11 5/8% Notes to certain proposed amendments (the "Indenture Amendments") to the
indenture governing the 11 5/8% Notes (the "11 5/8% Notes Indenture"), which
amendments would, among other things, eliminate substantially all of the
restrictive covenants contained in the 11 5/8% Notes Indenture. Holders of 11
5/8% Notes who timely tendered received a consent payment equal to 2% of the
principal amount of the related 11 5/8% Notes ($20.00 per $1,000 principal
amount) (which consent payment is included in the tender price referred to
above). Following the tender of 11 5/8% Notes and receipt of consents of holders
of a majority of the 11 5/8% Notes (in excess of $32.5 million aggregate
principal amount) on October 8, 1997, the Company and the trustee for the 11
5/8% Notes executed a supplemental indenture containing the Indenture
Amendments, which became effective upon acceptance for purchase of the tendered
11 5/8% Notes on December 12, 1997. In connection with the Tender Offer and
Consent Solicitation, the Company purchased, and received consents relating to,
approximately 87.7% of the outstanding 11 5/8% Notes.
<PAGE> 3
The net proceeds from the sale of the Units in the Initial Offering
were used to purchase 11 5/8% Notes in the Tender Offer and to pay the consent
fees pursuant to the related Consent Solicitation and to repay indebtedness
under the Existing Credit Facility, with the remaining proceeds used for general
corporate purposes.
On January 12, 1998, the Company and certain of its subsidiaries
(the "Subsidiary Guarantors") filed a Registration Statement on Form S-4 with
the Securities and Exchange Commission (the "Commission") with respect to the
Company's 11 1/4% Senior Subordinated Notes due 2007, Series B, and the
Subsidiary Guarantors' guarantees thereof.
Also on January 12, 1998, the Company filed Registration Statements
on Form S-3 with the Commission with respect to the Warrants and the shares of
Common Stock issuable upon exercise thereof as well as with respect to certain
shares of Common Stock issuable upon conversion of the Convertible Debenture
(as defined).
2
<PAGE> 4
CAPITALIZATION
The following table sets forth the unaudited consolidated capitalization of
the Company as of September 30, 1997 and as adjusted (on a pro forma basis) to
give effect to: (i) the Refinancing; and (ii) the issuance of a $5 million
accreted value Zero Coupon Convertible Subordinated Debenture ("Convertible
Debenture") in November 1997. This information should be read in conjunction
with "Unaudited Pro Forma Condensed Consolidated Financial Information included
elsewhere in this Report and in the Condensed Consolidated Financial Statements
of the Company, including the notes thereto, and "Management's Discussion and
Analysis of Financial Condition and Results of Operations" included in the
Company's Annual Report on Form 10-K for the year ended December 31, 1996 as
amended on Form 10-K/A (the "1996 10-K") and the Company's Quarterly Report on
Form 10-Q for the quarterly period ended September 30, 1997 (the "September
1997 10-Q").
<TABLE>
<CAPTION>
AS OF SEPTEMBER 30, 1997
------------------------
PRO FORMA
ACTUAL AS ADJUSTED
-------- -----------
(DOLLARS IN THOUSANDS)
<S> <C> <C>
Long-term debt (including current portion)
10 3/8% Notes..................................................... $126,500 $ 126,500
11 5/8% Notes (less unamortized discount of $907 and $112)........ 64,093 7,888
Leigh-Mardon Debt (a)............................................. 57,763 57,763
Existing Credit Facility (b)...................................... 3,191 --
Notes offered hereby (c).......................................... -- 93,800
Other long-term debt (d).......................................... 30,220 30,220
-------- --------
Total long-term debt.............................................. 281,767 316,171
Total stockholders' equity (e)...................................... 57,108 57,528
-------- --------
Total capitalization...................................... $338,875 $ 373,699
======== ========
</TABLE>
- ---------------
(a) Consists of Non-Recourse Senior Debt of ABN Australia Limited, operating as
Leigh-Mardon ("LM"), which matures June 2001 (the "Leigh-Mardon Senior
Debt"), and Non-Recourse Subordinated Debt of LM, which matures September
2001 (the "Leigh-Mardon Subordinated Debt" and together with the
Leigh-Mardon Senior Debt, the "Leigh-Mardon Debt"). The Leigh-Mardon Senior
Debt is a term loan of approximately US$41.3 million and a US$4.0 million
working capital facility, of which US$700,000 of availability was used for
letters of credit. The Leigh-Mardon Subordinated Debt is a term loan of
which approximately US$16.5 million was outstanding. As of September 30,
1997, interest accrued at the rate of 7.15% per annum on the Leigh-Mardon
Senior Debt and at the rate of 8.07% per annum plus 4% upon amounts
outstanding in excess of US$15.2 million on the Leigh-Mardon Subordinated
Debt.
(b) The Existing Credit Facility was repaid from the proceeds of the
Refinancing. As of September 30, 1997, the interest rate under the Existing
Credit Facility was 9.0% per annum. The Existing Credit Facility expires on
October 30, 1998.
(c) Net of discount to the face amount of the Old Notes attributable to the
value of the Warrants issued as part of the Units.
(d) Amounts include debt incurred in Brazil, debt incurred in connection with
the acquisition in August 1997 of Sati S.A., Satel S.A. and Cidel S.A.
(collectively, the "Sati Group") and mortgages and other financings in the
United States with varying maturities.
(e) Pro Forma As Adjusted includes the net proceeds of $4.9 million from the
sale in a private placement of a Convertible Debenture, an extraordinary
charge, net of applicable income taxes, of approximately $5.6 million in
connection with the Refinancing and $1.2 million attributed to the value of
the Warrants issued as part of the Units.
3
<PAGE> 5
UNAUDITED PRO FORMA CONDENSED CONSOLIDATED FINANCIAL INFORMATION
The unaudited pro forma condensed consolidated balance sheet as of
September 30, 1997 includes the historical accounts of the Company and gives
effect to: (i) the sale of a Convertible Debenture in November 1997; and (ii)
the Refinancing, in each case as if it had occurred on September 30, 1997. The
unaudited pro forma condensed consolidated statements of operations of the
Company for the year ended December 31, 1996, the nine months ended September
30, 1997 and the twelve months ended September 30, 1997 include the historical
operations of the Company and give effect to the Refinancing and the acquisition
of LM, which was acquired in a two-step acquisition in June and October 1996,
and the acquisition of the Sati Group, acquired in August 1997, in each case as
if it had occurred at the beginning of each of the periods indicated. The
Refinancing Adjustments shown below do not give effect to the repayment of $10.5
million of additional borrowings under the Existing Credit Facility which were
made subsequent to September 30, 1997, nor to the acquisition of assets (and
related earnings) from Commonwealth Bank of Australia Limited ("Commonwealth")
(for approximately US$4.6 million) and from Bank Itau ("Itau") (for
approximately US$5.5 million). The pro forma adjustments give effect to the
repayment of all amounts outstanding under the Existing Credit Facility during
each respective period.
The unaudited pro forma condensed consolidated financial information, which
has been prepared by the Company's management, has been derived from the
historical statements of operations and balance sheets of the Company in US
dollars in accordance with generally accepted accounting principles. The
acquisition of the Sati Group has been accounted for under the purchase method
of accounting. A preliminary allocation of the purchase price has been made
based on available information and is subject to adjustment. Management does not
expect that differences between the preliminary and final purchase price
allocation will have a material impact on the Company's consolidated financial
position or results of operations.
The unaudited pro forma condensed consolidated financial information is not
intended to represent and is not indicative of what the Company's results of
operations actually would have been if the aforementioned transactions had been
consummated as of the beginning of the periods indicated, or to project the
Company's results of operations for any future period. The pro forma adjustments
are based on available information and certain assumptions that the Company
currently believes are reasonable under the circumstances. The unaudited pro
forma condensed consolidated financial information should be read in conjunction
with "The Refinancing" and "Capitalization" included elsewhere in this Report,
"Management's Discussion and Analysis of Financial Condition and Results of
Operations" and the historical financial statements and related notes thereto of
the Company included in the 1996 10-K and the September 1997 10-Q and the
historical financial statements and related notes thereto of LM, included in
the Company's Current Report on Form 8-K/A dated August 16, 1996.
4
<PAGE> 6
UNAUDITED PRO FORMA CONDENSED CONSOLIDATED BALANCE SHEET
AS OF SEPTEMBER 30, 1997
<TABLE>
<CAPTION>
AMERICAN PRO FORMA
BANKNOTE REFINANCING AS
CORPORATION ADJUSTMENTS ADJUSTED
----------- ----------- ---------
(DOLLARS IN THOUSANDS)
<S> <C> <C> <C>
ASSETS
Current assets
Cash and cash equivalents(c)............................................... $ 3,611 $ 5,000 (a)
24,090 (b) $ 32,701(c)
Accounts receivable, net................................................... 56,640 56,640
Inventories................................................................ 41,130 41,130
Deferred income taxes...................................................... 4,616 4,616
Prepaid expenses and other................................................. 16,161 16,161
-------- ------- -------
Total current assets................................................. 122,158 29,090 151,248
Property, plant and equipment, net........................................... 250,326 250,326
Other assets................................................................. 24,815 1,700 (b) 26,515
Excess of cost of investment in subsidiaries over net assets acquired........ 93,846 93,846
-------- ------- -------
$ 491,145 $ 30,790 $521,935
======== ======= =======
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities
Revolving credit........................................................... $ 3,191 ($ 3,191)(b)
Current portion of long-term debt.......................................... 17,797 $ 17,797
Accounts payable and accrued expenses...................................... 63,922 150 (a)
(1,154)(b) 62,918
-------- ------- -------
Total current liabilities............................................ 84,910 (4,195) 80,715
Long-term debt, net of current maturities.................................... 260,779 38,795 (b)
(1,200)(b) 298,374
Other liabilities............................................................ 25,623 -- 25,623
Deferred income taxes........................................................ 42,372 (3,030)(b) 39,342
Minority interest............................................................ 20,353 20,353
-------- ------- -------
434,037 30,370 464,407
Stockholders' equity(d)...................................................... 57,108 4,850 (a)
1,200 (b)
(5,630)(b) 57,528
-------- ------- -------
$ 491,145 $ 30,790 $521,935
======== ======= =======
</TABLE>
See notes to Unaudited Pro Forma Condensed Consolidated Financial Information
5
<PAGE> 7
UNAUDITED PRO FORMA CONDENSED CONSOLIDATED STATEMENT OF OPERATIONS
FOR THE YEAR ENDED DECEMBER 31, 1996
<TABLE>
<CAPTION>
AMERICAN PRO FORMA PRO FORMA
BANKNOTE SATI ACQUISITION AFTER REFINANCING AS
CORPORATION LM GROUP ADJUSTMENTS ACQUISITIONS ADJUSTMENTS ADJUSTED
----------- ------- ------- ----------- ------------ ----------- ---------
(DOLLARS IN THOUSANDS)
<S> <C> <C> <C> <C> <C> <C> <C>
STATEMENT OF OPERATIONS DATA:
Sales............................ $ 309,450 $33,474 $22,249 $365,173 $365,173
Cost of goods sold............... 202,158 21,783 16,329 240,270 240,270
-------- ------- ------- -------- --------
Gross profit..................... 107,292 11,691 5,920 124,903 124,903
Selling and administrative....... 48,263 4,504 2,824 55,591 55,591
Depreciation and amortization.... 20,042 2,077 1,795 $ 1,012 (e) 24,926 24,926
-------- ------- ------- ------- -------- --------
Operating expenses............... 68,305 6,581 4,619 1,012 80,517 80,517
-------- ------- ------- ------- -------- --------
Income from operations........... 38,987 5,110 1,301 (1,012) 44,386 44,386
Interest expense................. 28,864 987 162 2,610 (f) 32,623 $ 3,494 (i) 36,117
Foreign translation losses,
net............................ 255 255 255
Provision for litigation......... 2,400 2,400 2,400
Other, net....................... (2,265) (5) (2,270) (2,270)
-------- ------- ------- ------- -------- ------ --------
Income before taxes on income
(benefit) and minority
interest....................... 9,733 4,128 1,139 (3,622) 11,378 (3,494) 7,884
Taxes on income (benefit)........ 400 1,793 376 (1,166)(g) 1,403 (1,223)(j) 180
-------- ------- ------- ------- -------- ------ --------
Income before minority interest
and extraordinary item......... 9,333 2,335 763 (2,456) 9,975 (2,271) 7,704
Minority interest................ 5,234 (439)(h) 4,795 4,795
-------- ------- ------- ------- -------- ------ --------
Income before extraordinary
item........................... $ 4,099 $ 2,335 $ 763 $(2,017) $ 5,180 $(2,271) $ 2,909
======== ======= ======= ======= ======== ====== ========
OTHER FINANCIAL DATA:
EBITDA (k).................................................................................................... $ 69,312(l)
EBITDA margin (m)............................................................................................. 19.0%
Depreciation and amortization (n)............................................................................. $ 26,290
Capital expenditures.......................................................................................... 24,260
Cash interest expense (o)..................................................................................... 34,753
Ratio of EBITDA to cash interest expense...................................................................... 2.0x
</TABLE>
See notes to Unaudited Pro Forma Condensed Consolidated Financial Information
6
<PAGE> 8
UNAUDITED PRO FORMA CONDENSED CONSOLIDATED STATEMENT OF OPERATIONS
FOR THE NINE MONTHS ENDED SEPTEMBER 30, 1997
<TABLE>
<CAPTION>
AMERICAN PRO FORMA PRO FORMA
BANKNOTE SATI ACQUISITION AFTER REFINANCING AS
CORPORATION GROUP ADJUSTMENTS ACQUISITIONS ADJUSTMENTS ADJUSTED
----------- ------- ----------- ------------ ----------- ---------
(DOLLARS IN THOUSANDS)
<S> <C> <C> <C> <C> <C> <C>
STATEMENT OF OPERATIONS DATA:
Sales.................................... $ 248,416 $11,624 $260,040 $260,040
Cost of goods sold....................... 166,263 8,611 174,874 174,874
-------- ------- -------- --------
Gross profit............................. 82,153 3,013 85,166 85,166
Selling and administrative............... 34,881 1,337 36,218 36,218
Depreciation and amortization............ 17,799 850 $ 204 (e) 18,853 18,853
-------- ------- ----- -------- --------
Operating expenses....................... 52,680 2,187 204 55,071 55,071
-------- ------- ----- -------- --------
Income from operations................... 29,473 826 (204) 30,095 30,095
Interest expense......................... 24,353 50 221 (f) 24,624 $ 2,311 (i) 26,935
Foreign translation losses, net.......... 122 122 122
Other, net............................... (2,519) (2,519) (2,519)
-------- ------- ----- -------- ------- --------
Income before taxes on income (benefit)
and minority interest.................. 7,517 776 (425) 7,868 (2,311) 5,557
Taxes on income (benefit)................ 371 265 (91)(g) 545 (809)(j) (264)
-------- ------- ----- -------- ------- --------
Income before minority interest and
extraordinary item..................... 7,146 511 (334) 7,323 (1,502) 5,821
Minority interest........................ 2,458 2,458 2,458
-------- ------- ----- -------- ------- --------
Income before extraordinary item......... $ 4,688 $ 511 $(334) $ 4,865 $(1,502) $ 3,363
======== ======= ===== ======== ======= ========
OTHER FINANCIAL DATA:
EBITDA(k).................................................................................................... $ 48,948(l)
EBITDA margin(m)............................................................................................. 18.8%
Depreciation and amortization(n)............................................................................. $ 19,919
Capital expenditures......................................................................................... 8,291
Cash interest expense(o)..................................................................................... 25,869
Ratio of EBITDA to cash interest expense..................................................................... 1.9x
</TABLE>
See notes to Unaudited Pro Forma Condensed Consolidated Financial Information
7
<PAGE> 9
UNAUDITED PRO FORMA CONDENSED CONSOLIDATED STATEMENT OF OPERATIONS
FOR THE TWELVE MONTHS ENDED SEPTEMBER 30, 1997
<TABLE>
<CAPTION>
AMERICAN PRO FORMA PRO FORMA
BANKNOTE SATI ACQUISITION AFTER REFINANCING AS
CORPORATION GROUP ADJUSTMENTS ACQUISITIONS ADJUSTMENTS ADJUSTED
----------- ------- ----------- ------------ ----------- ---------
(DOLLARS IN THOUSANDS)
<S> <C> <C> <C> <C> <C> <C>
STATEMENT OF OPERATIONS DATA:
Sales.................................... $ 340,306 $17,393 $357,699 $357,699
Cost of goods sold....................... 225,628 12,849 238,477 238,477
-------- ------- -------- --------
Gross profit............................. 114,678 4,544 119,222 119,222
Selling and administrative............... 49,817 2,026 51,843 51,843
Depreciation and amortization............ 23,110 1,311 $ 310 (e) 24,731 24,731
-------- ------- ----- -------- --------
Operating expenses....................... 72,927 3,337 310 76,574 76,574
-------- ------- ----- -------- --------
Income from operations................... 41,751 1,207 (310) 42,648 42,648
Interest expense......................... 33,093 91 363 (f) 33,547 $ 3,141(i) 36,688
Foreign translation losses, net.......... 176 176 176
Provision for litigation................. 2,400
2,400 2,400
Other, net............................... (4,073) (4,073) (4,073)
-------- ------- ----- -------- ----- --------
Income before taxes on income (benefit)
and minority interest.................. 10,155 1,116 (673) 10,598 (3,141) 7,457
Taxes on income (benefit)................ (106) 369 (150)(g) 113 (1,099)(j) (986)
-------- ------- ----- -------- ----- --------
Income before minority interest and
extraordinary item..................... 10,261 747 (523) 10,485 (2,042) 8,443
Minority interest........................ 4,265 (299)(h) 3,966 3,966
-------- ------- ----- -------- ----- --------
Income before extraordinary item......... $ 5,996 $ 747 $(224) $ 6,519 $(2,042) $ 4,477
======== ======= ===== ======== ===== ========
OTHER FINANCIAL DATA:
EBITDA(k).................................................................................................... $ 67,379(l)
EBITDA margin(m)............................................................................................. 18.8%
Depreciation and amortization(n)............................................................................. $ 26,148
Capital expenditures......................................................................................... 14,199
Cash interest expense(o)..................................................................................... 35,271
Ratio of EBITDA to cash interest expense..................................................................... 1.9x
</TABLE>
See notes to Unaudited Pro Forma Condensed Consolidated Financial Information
8
<PAGE> 10
NOTES TO UNAUDITED PRO FORMA CONDENSED CONSOLIDATED FINANCIAL INFORMATION
(DOLLARS IN THOUSANDS, EXCEPT SHARE DATA)
(a) In November 1997, the Company sold in a private placement $5.0 million
accreted value Convertible Debenture with warrants. The following reflects
the private placement:
<TABLE>
<S> <C> <C>
Proceeds from private placement............................................... $ 5,000
Accrued fees and expenses..................................................... 150
-------
Stockholders' equity.......................................................... $ 4,850
=======
</TABLE>
(b) The following reflects the effect of the Refinancing:
<TABLE>
<S> <C> <C>
Proceeds from Old Notes.................................................... $ 93,800
Proceeds from Warrants..................................................... 1,200
--------
95,000
Tender Offer for 11 5/8% Notes (less unamortized original
issue discount of $795).................................................. (56,205) $ 38,795
Repayment of Existing Credit Facility...................................... (3,191)
Net premium and expenses paid to retire above debt, including
above unamortized original issue discount of $795........................ (6,210)
Payment of accrued interest................................................ (1,154) (7,364)
--------
Payment of fees and expenses related to the new borrowings................. (4,150)
-------
Net increase in cash................................................... $ 24,090
=======
</TABLE>
Other assets were affected as follows:
<TABLE>
<S> <C> <C>
Increases in deferred financing costs relating to the Refinancing.......... $ 4,150
Write-off of deferred financing costs associated with debt retired......... (2,450) $ 1,700
-------- =======
</TABLE>
As a result of the Refinancing, stockholders' equity has been charged for an
extraordinary item relating to early extinguishment of debt, as follows:
<TABLE>
<S> <C> <C>
Net premium and expenses paid to retire above debt......................... $ (6,210)
Write-off of deferred financing costs associated with debt retired......... (2,450)
Deferred tax benefit, at statutory tax rates............................... 3,030 $ (5,630)
-------- =======
</TABLE>
(c) Pro Forma As Adjusted cash and cash equivalents excludes the repayment of
approximately $10.5 million of additional borrowings under the Existing
Credit Facility which were made subsequent to September 30, 1997 and the
acquisition of assets from Commonwealth (for approximately US$4.6 million)
and from Itau (for approximately US$5.5 million). Giving effect for these
transactions, Pro Forma As Adjusted cash and cash equivalents would be
approximately $12.1 million.
(d) Stockholders' equity consist of the following:
<TABLE>
<CAPTION>
AMERICAN PRO FORMA
BANKNOTE AS
CORPORATION ADJUSTED
-------- --------
(IN THOUSANDS)
<S> <C> <C>
Preferred Stock................................................................... -- --
Convertible Debentures............................................................ $ 3,620 $ 8,070
Common Stock...................................................................... 211 211
Capital surplus................................................................... 73,173 74,773
Retained earnings (deficit)....................................................... (16,739) (22,369)
Treasury stock.................................................................... (1,253) (1,253)
Cumulative currency translation adjustment........................................ (1,904) (1,904)
-------- --------
$ 57,108 $ 57,528
======== ========
</TABLE>
9
<PAGE> 11
NOTES TO UNAUDITED PRO FORMA CONDENSED CONSOLIDATED
FINANCIAL INFORMATION -- (CONCLUDED)
<TABLE>
<CAPTION>
NINE TWELVE
YEAR MONTHS MONTHS
ENDED ENDED ENDED
DECEMBER 31, SEPTEMBER 30, SEPTEMBER 30,
1996 1997 1997
------------ ------------- -------------
(IN THOUSANDS)
<S> <C> <C> <C> <C>
(e) Additional amortization of excess cost of investment in
subsidiaries over net assets acquired over 25 years, for the
periods prior to acquisition.................................... $ 353 $ 146 $ 220
Additional depreciation and amortization based on the estimated
fair value received............................................. 659 58 90
-------- -------- --------
$ 1,012 $ 204 $ 310
======== ======== ========
(f) Additional interest expense in connection with acquisition
borrowings...................................................... $ 2,610 $ 221 $ 363
======== ======== ========
(g) Tax effect of deductible pro forma items at statutory rates..... $ (1,166) $ (91) $ (150)
======== ======== ========
(h) Elimination of LM minority interest............................. $ (439) $ (299)
======== ========
(i) Refinancing interest, including amortization of deferred
financing costs................................................. $ 10,988 $ 8,241 $ 10,988
Elimination of interest and amortization of deferred financing
costs of borrowings refinanced.................................. (7,494) (5,930) (7,847)
-------- -------- --------
$ 3,494 $ 2,311 $ 3,141
======== ======== ========
(j) Tax effect of deductible pro forma items at statutory rates..... $ (1,223) $ (809) $ (1,099)
======== ======== ========
</TABLE>
(k) EBITDA represents income from operations before depreciation and
amortization, and is not intended to represent cash flow from operations as
defined by generally accepted accounting principles and should not be
considered as an alternative to net income as an indicator of operating
performance or to cash flow as a measure of liquidity. The Company has
included information concerning EBITDA as it understands that it is used by
certain investors as one measure of a borrower's historical ability to
service its debt. EBITDA, as presented, may not be comparable to similarly
titled measures reported by other companies, since not all companies
necessarily calculate EBITDA in an identical manner, and therefore is not
necessarily an accurate means of comparison between companies. The
calculation of EBITDA to cash interest set forth above is not calculated on
the same basis as similar calculations in various other agreements of the
Company.
(l) Pro Forma As Adjusted EBITDA excludes cash flows from the Commonwealth and
Itau agreements.
(m) EBITDA margin is computed as EBITDA as a percentage of sales.
(n) Includes the amortization of deferred financing costs of $1.4 million, $1.1
million, and $1.4 million for the year ended December 31, 1996 and the nine
months and twelve months ended September 30, 1997, respectively.
(o) Cash interest expense represents interest expense less the amortization of
deferred financing costs noted in note (n) above.
10
<PAGE> 12
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.
AMERICAN BANKNOTE CORPORATION
By: /s/ John T. Gorman
-----------------------------
John T. Gorman,
Executive Vice President and
Chief Financial Officer
Date: January 14, 1998
11
