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) June 1, 1994
JAMES RIVER CORPORATION OF VIRGINIA
(Exact name of registrant as specified in its charter)
Virginia
(State or other jurisdiction of incorporation)
1-7911 54-0848173
(Commission File Number) (IRS Employer
Identification Number)
120 Tredegar Street, Richmond, Virginia 23219
(Address of principal executive offices, including zip code)
Registrant's telephone number, including area code (804) 644-5411
Item 5. Other Events.
(i). On June 1, 1994, James River Corporation of Virginia
("James River") announced its intent to offer $250 million of
cumulative convertible preferred stock in the form of Dividend
Enhanced Convertible Stock ("DECS"). The preferred stock will be
issued to the public in the form of depositary shares, each
representing a one-hundredth interest in a share of the DECS (the
"Depositary Shares").
(ii). Filed herewith are the unaudited pro forma James
River and Jamont Holdings N.V. ("Jamont Holdings") consolidated
capitalization and condensed balance sheet as of March 27, 1994,
the unaudited pro forma consolidated statements of operations for
such entities for the three months ended March 27, 1994 and the
year ended December 26, 1993 and the related notes thereto which
give effect to:
(a) the proposed acquisition by James River of the
remaining 50% ownership interest in Jamont Holdings for a purchase
price of $575 million in cash; and
(b) the assumed financing of such acquisition with the
net proceeds from the issuance of $250 million of the Depositary
Shares and the balance of proceeds from funded indebtedness, which
may include borrowings under existing credit facilities and issuances
of commercial paper and debt securities.
This pro forma financial information updates the pro forma financial
information filed with the Securities and Exchange Commission on May 2,
1994 in Registration Number 33-53411.
Item 7. Financial Statements and Exhibits.
(c) Exhibits
99(a) Press release dated June 1, 1994, published
by James River
99(b) Pro forma consolidated financial information
referenced in Item 5 above
SIGNATURES
Pursuant to the requirements of the Securities and Exchange
Act of 1934, the registrant has duly caused this report to be
signed on its behalf by the undersigned hereunto duly authorized.
JAMES RIVER CORPORATION OF VIRGINIA
By: /s/ James R. Hudson, Jr.
James R. Hudson, Jr.
Vice President, Corporate
Controller
Date: June 1, 1994
Exhibit 99(a)
JAMES RIVER CORPORATION
P.O. Box 2218, Richmond, VA 23217 (804) 644-5411
News Release: Immediate Contact: Celeste Gunter
(804) 649-4307
JAMES RIVER TO OFFER CONVERTIBLE PREFERRED STOCK
RICHMOND, VIRGINIA, June 1, 1994 -- James River Corporation announced
today that it intends to offer $250 million of cumulative convertible preferred
stock in the form of Dividend Enhanced Convertible Stock ("DECS"), which are
subject to conversion into or redemption for shares of common stock of James
River, $0.10 par value per share. The offering may be increased up to $287.5
million, if the underwriter's over-allotment option is exercised in full. The
preferred stock will be issued to the public in the form of depositary shares,
each representing a one-hundredth interest in a share of the DECS.
Salomon Brothers Inc, Merrill Lynch & Co., and J. P. Morgan Securities
Inc. will manage the offering. Each of such firms and James River will provide
copies of the prospectus relating to this offering upon request. The offering
will be made only by means of a prospectus.
James River Corporation, headquartered in Richmond, Virginia, is a
marketer and manufacturer of consumer products, food and consumer packaging, and
communications papers. These product lines include leading brands such as
Quilted Northern(r) bathroom tissue, Brawny(r) paper towels, Dixie(r) cups and
plates, Eureka!(tm) recycled copy paper, Quilt-Rap(tm) sandwich wrap, and Qwik
Crisp(r) microwave packaging. For the year which ended December 26, 1993, James
River had net sales of $4.6 billion.
Exhibit 99(b)
<PAGE>
UNAUDITED PRO FORMA JAMES RIVER AND JAMONT HOLDINGS FINANCIAL INFORMATION
The following pro forma consolidated capitalization and condensed balance
sheet as of March 27, 1994, and the pro forma consolidated statements of
operations for the three months ended March 27, 1994, and the year ended
December 26, 1993, give effect to the following transactions:
(a) the proposed acquisition by James River of the remaining 50% ownership
interest in Jamont Holdings for a purchase price of $575 million in
cash; and
(b) the assumed financing of such acquisition with the net proceeds from
the issuance of $250 million of the Depositary Shares and the balance
of proceeds from funded indebtedness, which may include borrowings
under existing credit facilities and issuances of commercial paper and
debt securities.
James River currently owns 50% of Jamont Holdings, which is accounted for
using the equity method of accounting. James River's additional 50% investment
in Jamont Holdings has been accounted for using the purchase method of
accounting and will result in the consolidation of Jamont Holdings.
The unaudited pro forma consolidated condensed financial information is
presented as if these transactions had been completed as of March 27, 1994, for
the pro forma consolidated capitalization and condensed balance sheet and as of
the first day of each period for which pro forma consolidated statements of
operations are presented.
The pro forma financial information does not purport to be indicative of
the actual financial position as it will finally be recorded, or the results of
operations which would actually have been reported if the transactions had
occurred on the dates or for the periods indicated, or which may be reported in
the future. The pro forma financial information should be read in conjunction
with the separate historical consolidated financial statements and the related
notes to such financial statements of James River and of Jamont Holdings,
incorporated by reference herein.
<PAGE>
JAMES RIVER AND JAMONT HOLDINGS
AND CONSOLIDATED SUBSIDIARIES
PRO FORMA CONSOLIDATED CAPITALIZATION
(UNAUDITED)
MARCH 27, 1994
(IN MILLIONS)
<TABLE>
<CAPTION>
PRO FORMA
ADJUSTMENTS
HISTORICAL INCREASE PRO FORMA
JAMES RIVER JAMONT HOLDINGS (DECREASE) CONSOLIDATED
<S> <C> <C> <C> <C>
(NOTE)2
Current portion of long-term debt $ 79.4 $ 130.5 $ 209.9
Long-term debt:
Commercial paper and borrowings
supported by revolving credit
facilities 328.4 437.5 $ 11.4 (c) 777.3
Notes and debentures 1,671.3 189.9 325.0 (d) 2,186.2
Total long-term debt (net of
current portion) 1,999.7 627.4 336.4 2,963.5
Minority interests 5.8 149.0 154.8
Shareholders' equity:
Preferred stock 454.0 250.0 (d) 704.0
Common shareholders' equity 1,476.8 884.4 (884.4)(e) 1,468.8
(8.0)(c)
Total shareholders' equity 1,930.8 884.4 (642.4) 2,172.8
Total capitalization $ 4,015.7 $ 1,791.3 $(306.0) $5,501.0
</TABLE>
The accompanying notes are an integral part of this pro forma information.
<PAGE>
JAMES RIVER AND JAMONT HOLDINGS
AND CONSOLIDATED SUBSIDIARIES
PRO FORMA CONSOLIDATED CONDENSED BALANCE SHEET
(UNAUDITED)
MARCH 27, 1994
(IN MILLIONS)
<TABLE>
<CAPTION>
PRO FORMA
ADJUSTMENTS
HISTORICAL INCREASE PRO FORMA
JAMES RIVER JAMONT HOLDINGS (DECREASE) CONSOLIDATED
<S> <C> <C> <C> <C>
(NOTE)2
ASSETS
Current assets:
Cash and short-term securities $ 24.6 $ 40.4 $ 65.0
Accounts receivable 410.1 436.3 846.4
Inventories 707.3 190.2 897.5
Other current assets 164.8 5.9 170.7
Total current assets 1,306.8 672.8 1,979.6
Property, plant, and equipment 5,448.9 1,438.4 6,887.3
Less accumulated depreciation 1,908.2 297.5 2,205.7
Net property, plant, and
equipment 3,540.7 1,140.9 4,681.6
Investments in affiliates 527.1 20.0 $(431.5)(a) 115.6
Other assets 314.4 38.6 3.0 (c) 356.0
Goodwill 152.1 462.9 122.5 (b) 737.5
Total assets $ 5,841.1 $ 2,335.2 $(306.0) $7,870.3
LIABILITIES AND SHAREHOLDERS'
EQUITY
Current liabilities:
Current portion of long-term
debt $ 79.4 $ 130.5 $ 209.9
Other current liabilities 672.7 417.0 1,089.7
Total current liabilities 752.1 547.5 1,299.6
Long-term debt 1,999.7 627.4 $ 325.0 (d) 2,963.5
11.4 (c)
Other long-term liabilities 734.5 31.1 765.6
Deferred income taxes 418.2 95.8 514.0
Minority interests 5.8 149.0 154.8
Shareholders' equity:
Preferred stock 454.0 250.0 (d) 704.0
Common shareholders' equity 1,476.8 884.4 (884.4)(e) 1,468.8
(8.0)(c)
Total shareholders' equity 1,930.8 884.4 (642.4) 2,172.8
Total liabilities and
shareholders' equity $ 5,841.1 $ 2,335.2 $(306.0) $7,870.3
</TABLE>
The accompanying notes are an integral part of this pro forma information.
<PAGE>
JAMES RIVER AND JAMONT HOLDINGS
AND CONSOLIDATED SUBSIDIARIES
PRO FORMA CONSOLIDATED STATEMENT OF OPERATIONS
(UNAUDITED)
FOR THE THREE MONTHS ENDED MARCH 27, 1994
(IN MILLIONS, EXCEPT PER SHARE DATA)
<TABLE>
<CAPTION>
PRO FORMA
ADJUSTMENTS
HISTORICAL INCREASE PRO FORMA
JAMES RIVER JAMONT HOLDINGS (DECREASE) CONSOLIDATED
<S> <C> <C> <C> <C>
(NOTE)3
Net sales $ 1,105.5 $ 362.7 $1,468.2
Cost of goods sold 934.9 228.3 $ 0.8 (a) 1,164.0
Selling and administrative
expenses 150.3 118.1 268.4
Income from operations 20.3 16.3 (0.8) 35.8
Interest expense 34.9 13.9 6.7 (b) 55.5
Other income, net 2.2 2.9 1.7 (c) 6.8
Income (loss) before income
taxes and minority interest (12.4) 5.3 (5.8) (12.9)
Income tax expense (benefit) (5.0) 4.4 (2.6)(d) (3.2)
Income (loss) before minority
interest (7.4) 0.9 (3.2) (9.7)
Minority interest .4 (0.9) (.5)
Net loss $ (7.0) -- $ (3.2) $ (10.2)
Preferred dividend requirements (8.2) (5.3)(e) (13.5)
Net loss applicable to common
shares $ (15.2) -- $ (8.5) $ (23.7)
Net loss per common share and
common share equivalent $ (.19) $ (.29)
Weighted average number of common
shares and common share
equivalents 81.9 81.9
</TABLE>
The accompanying notes are an integral part of this pro forma information.
<PAGE>
JAMES RIVER AND JAMONT HOLDINGS
AND CONSOLIDATED SUBSIDIARIES
PRO FORMA CONSOLIDATED STATEMENT OF OPERATIONS
(UNAUDITED)
FOR THE YEAR ENDED DECEMBER 26, 1993
(IN MILLIONS, EXCEPT PER SHARE DATA)
<TABLE>
<CAPTION>
PRO FORMA
ADJUSTMENTS
HISTORICAL INCREASE PRO FORMA
JAMES RIVER JAMONT HOLDINGS (DECREASE) CONSOLIDATED
<S> <C> <C> <C> <C>
(NOTE)3
Net sales $ 4,650.2 $ 1,482.1 $6,132.3
Cost of goods sold 3,858.6 947.9 $ 3.1 (a) 4,809.6
Selling and administrative
expenses 677.6 466.1 1,143.7
Income from operations 114.0 68.1 (3.1) 179.0
Interest expense 137.5 72.3 26.9 (b) 236.7
Other income, net 40.0 17.6 (2.5)(c) 55.1
Income before income taxes and
minority interest 16.5 13.4 (32.5) (2.6)
Income tax expense (benefit) 18.9 15.7 (10.5)(d) 24.1
Loss before minority interest (2.4) (2.3) (22.0) (26.7)
Minority interest 2.1 2.0 4.1
Net loss $ (0.3) $ (0.3) $ (22.0) $ (22.6)
Preferred dividend requirements (32.8) (21.3)(e) (54.1)
Net loss applicable to common
shares $ (33.1) $ (0.3) $ (43.3) $ (76.7)
Net loss per common share and
common share equivalent $ (0.40) $ (0.94)
Weighted average number of common
shares and common share
equivalents 81.9 81.9
</TABLE>
The accompanying notes are an integral part of this pro forma information.
<PAGE>
JAMES RIVER AND JAMONT HOLDINGS
AND CONSOLIDATED SUBSIDIARIES
NOTES TO PRO FORMA CONSOLIDATED FINANCIAL INFORMATION
(UNAUDITED)
1. BASIS OF REPORTING
The accompanying pro forma consolidated capitalization and condensed balance
sheet as of March 27, 1994, and the pro forma consolidated statements of
operations for the three months ended March 27, 1994, and the year ended
December 26, 1993, give effect to the acquisition of the remaining 50% interest
in Jamont Holdings using the purchase method of accounting. The aggregate
purchase price to be paid for the additional interest in Jamont Holdings is
approximately $575 million, excluding estimated acquisition and financing costs
of $11.4 million. The accompanying pro forma consolidated financial statements
give effect to the expected issuances of approximately $250 million of the
Depositary Shares and the incurrence of funded indebtedness of approximately
$336 million, the proceeds of which will be used to finance the acquisition of
Jamont Holdings.
The values assigned to the net assets acquired will be based upon a
determination, after the completion of the transaction, of the fair values of
the assets acquired and liabilities assumed. Jamont Holdings was originally
formed in 1990, at which time its assets and liabilities were adjusted to then
fair values. In 1991, Jamont Holdings commenced a $600 million capital expansion
program which was completed in 1993. Accordingly, based on the relatively recent
valuations of Jamont Holdings' assets and liabilities, for the purpose of these
pro forma consolidated financial statements, the excess of the purchase price
over such estimated fair value of the net assets acquired, approximating $122.5
million, has been allocated to goodwill.
Historical financial information on Jamont Holdings contained in the pro forma
consolidated financial statements has been derived from the audited financial
statements of Jamont Holdings as of December 31, 1993, and for the year then
ended and the unaudited financial statements as of March 31, 1994, and for the
three months then ended, each prepared in accordance with accounting standards
generally accepted in The Netherlands and measured in European Currency Units.
Such financial information has been adjusted to conform to U.S. generally
accepted accounting principles and translated into U.S. dollars.
2. PRO FORMA BALANCE SHEET AND CAPITALIZATION ADJUSTMENTS
The pro forma consolidated capitalization and condensed balance sheet give
effect to the adjustments described below.
(a) To eliminate James River's existing investment in Jamont Holdings as of
March 27, 1994, previously accounted for using the equity method.
(b) To record estimated goodwill, representing the excess of James River's
purchase price over the estimated fair value of Jamont Holdings' net
equity.
(c) To record $11.4 million of estimated acquisition and financing costs,
assumed to be funded through borrowings under the Company's revolving
credit facility, detailed as follows:
(i) $0.4 million related to the acquisition of Jamont Holdings,
excluding financing-related costs;
(ii) $3.0 million related to the incurrence of $325 million of funded
indebtedness; and
(iii) $8.0 million related to the issuance of $250 million of the
Depositary Shares.
(d) To record the assumed incurrence and issuance of the following:
(i) $325 million of funded indebtedness incurred in connection with
the acquisition of Jamont Holdings; and
(ii) $250 million of the Depositary Shares issued in connection with
the acquisition of Jamont Holdings.
(e) To eliminate the Jamont Holdings historical shareholders' equity
balances.
<PAGE>
JAMES RIVER AND JAMONT HOLDINGS
AND CONSOLIDATED SUBSIDIARIES
NOTES TO PRO FORMA CONSOLIDATED FINANCIAL INFORMATION, CONTINUED
(UNAUDITED)
3. PRO FORMA STATEMENTS OF OPERATIONS ADJUSTMENTS
The pro forma consolidated statement of operations gives effect to the
adjustments described below.
(a) To record amortization of the incremental goodwill, using the
straight-line method over an assumed life of 40 years.
(b) To record interest expense on the $336 million of incremental funded
indebtedness, at an assumed interest rate of 8.0%.
(c) To reverse James River's share of the earnings of Jamont Holdings
associated with its existing 50% ownership interest, previously
accounted for using the equity method.
(d) To record income tax benefits related to the incremental interest
expense.
(e) To reflect increased preferred dividend requirements related to the
issuance of $250 million of the Depositary Shares, at an estimated
dividend yield of 8.5%.
4. LENDER CONSENTS
For purposes of these pro forma consolidated financial statements, it has been
assumed that any necessary consents or waivers which may be required for the
completion of the acquisition of the remaining 50% interest in Jamont Holdings
have been obtained by James River and that no material incremental costs will be
incurred in obtaining such consents or waivers.
5. PRO FORMA CONSOLIDATED SEGMENT INFORMATION
Following the completion of the acquisition of the remaining interest in Jamont
Holdings, James River intends to continue to report its operations in its
existing three business segments. These segments are: Consumer Products, which
includes the manufacture and marketing of towel and tissue and disposable
foodservice products; Food and Consumer Packaging, which includes the
manufacture of folding cartons, flexible packaging, and packaging papers used in
packaging food and other retail consumer goods; and Communications Papers, which
includes the manufacture and marketing of a variety of uncoated business and
printing papers, coated groundwood printing papers, and premium printing papers.
Upon its consolidation, James River intends to report the results of Jamont
Holdings as part of its Consumer Products segment.
6. PRO FORMA RATIOS
On a pro forma basis after reflecting the assumed acquisition and financing of
Jamont Holdings, James River's earnings were inadequate to cover both fixed
charges and combined fixed charges and preferred stock dividends for the year
ended December 26, 1993, and for the three months ended March 27, 1994. For the
year ended December 26, 1993, the amount of the deficiency of pro forma earnings
compared to pro forma fixed charges was $25.7 million, and the amount of the
deficiency of pro forma earnings compared to pro forma combined fixed charges
and preferred stock dividends was $114.2 million. For the three months ended
March 27, 1994, the amount of the deficiency of pro forma earnings compared to
pro forma fixed charges was $14.9 million and the amount of the deficiency of
pro forma earnings compared to pro forma combined fixed charges of preferred
stock dividends was $37.0 million. See "Selected Financial Information" herein.
