SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
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FORM 8-K/A
CURRENT REPORT
PURSUANT TO SECTION 13 OR 15(D) OF THE
SECURITIES EXCHANGE ACT OF 1934
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APRIL 18, 1997
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DATE OF REPORT (DATE OF EARLIEST EVENT REPORTED)
NIAGARA CORPORATION
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(EXACT NAME OF REGISTRANT AS SPECIFIED IN CHARTER)
DELAWARE 0-22206 59-3182820
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(STATE OR OTHER JURISDICTION (COMMISSION FILE NUMBER) (I.R.S. EMPLOYER
OF INCORPORATION) IDENTIFICATION NO.)
667 MADISON AVENUE
NEW YORK, NEW YORK
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(ADDRESS OF PRINCIPAL EXECUTIVE OFFICES)
10021
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(ZIP CODE)
(212) 317-1000
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(REGISTRANT'S TELEPHONE NUMBER, INCLUDING AREA CODE)
NOT APPLICABLE
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(FORMER NAME OR FORMER ADDRESS, IF CHANGED
SINCE LAST REPORT)
This filing amends the previously filed Form 8-K, dated May 2,
1997 (the "8-K"), of Niagara Corporation ("Niagara"), and relates to the
acquisition (the "Acquisition") by Niagara Cold Drawn Corp., a Delaware
corporation and wholly owned subsidiary of Niagara ("NCD"), of all of the
outstanding shares of capital stock of LaSalle Steel Company, a Delaware
corporation ("LaSalle"). As stated in the 8-K, pro forma financial
information would be filed by amendment not later than July 2, 1997.
ITEM 7. FINANCIAL STATEMENTS, PRO FORMA FINANCIAL INFORMATION AND
EXHIBITS.
(a) Pro Forma Financial Information.
1. Unaudited Pro Forma Consolidated Financial Statements of
Niagara, NCD and LaSalle.
NIAGARA CORPORATION (NIAGARA),
NIAGARA COLD DRAWN CORP. (NCD) AND
LASALLE STEEL COMPANY (LASALLE)
UNAUDITED PRO FORMA CONSOLIDATED FINANCIAL STATEMENTS
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The unaudited pro forma consolidated balance sheet as of March 31, 1997 and
the unaudited pro forma consolidated statements of operations for the year
ended December 31, 1996 and the three months ended March 31, 1997 include
the accounts of Niagara and LaSalle for the respective periods. The
Acquisition is accounted for as an acquisition of the capital stock of
LaSalle by Niagara's subsidiary, NCD, under the purchase method of
accounting. The unaudited pro forma financial statements have been prepared
to illustrate the estimated effects of the Acquisition. The pro forma
financial statements were derived by adjusting the historical financial
statements of Niagara and LaSalle for certain transactions pursuant to the
Acquisition described in the notes to the unaudited pro forma financial
statements.
The historical financial statements of LaSalle were provided by LaSalle's
former parent, Quanex Corporation ("Quanex"), and, as discussed in Note 4
to the unaudited proforma consolidated balance sheet, are subject to review
by Niagara and NCD. Pursuant to the LaSalle stock purchase agreement, any
item disputed by Niagara and NCD is subject to binding arbitration by an
independent accounting firm.
The unaudited pro forma consolidated balance sheet was prepared as if the
Acquisition had occurred on March 31, 1997. The unaudited pro forma
consolidated statements of operations for the year ended December 31, 1996
and the three months ended March 31, 1997 were prepared as if the
Acquisition had occurred on January 1, 1996. The pro forma financial data
does not purport to be indicative of the results which actually could have
been obtained had such transactions been completed as of the assumed dates
or which may be obtained in the future.
The pro forma financial data should be read in conjunction with the
financial statements of Niagara and LaSalle.
Niagara Corporation (Niagara),
Niagara Cold Drawn Corp. (NCD) and
LaSalle Steel Company (LaSalle)
Unaudited Pro Forma Consolidated Balance Sheet
(in thousands)
<TABLE>
<CAPTION>
Pro forma adjustments
Niagara ----------------------------------- Pro forma
March 31, 1997 consolidated LaSalle Debit Credit consolidated
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<S> <C> <C> <C> <C> <C>
Assets
Current: $ 1,230 $ 10 $ 66,250 (1) $ 18,454 (2) $ 3,536
Cash and cash equivalents
20,000 (3) 65,500 (4)
Accounts receivable, net 10,198 19,030 29,228
Inventories 14,177 24,258 38,435
Deferred income taxes -- 37 37 (2) --
Other current assets 258 121 379
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Total current assets 22,863 43,456 86,250 83,991 71,578
Property, plant and equipment, net 21,693 16,189 53,985 (4) 91,867
Deferred income taxes -- 10,357 10,357 (4) --
Goodwill on prior acquisition 2,530 -- 2,530
Intangible assets -- -- 9,552 (4) 9,552
Other assets, net 1,096 1,767 1,565 (5) 291 (4) 2,370
1,767 (4)
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$ 51,182 $ 71,769 $ 151,352 $ 96,406 $ 177,897
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Liabilities and stockholders' equity
Current:
Trade accounts payable $ 5,913 $ 19,937 $ 25,850
Accrued expenses and other liabilities 5,264 5,143 1,459 (4) 13,931
500 (4)
1,565 (5)
Income taxes payable -- 50 50
Due to Quanex (income taxes payable) -- -- 580 (6) 580
Due to Quanex (post-closing adjustment) -- -- 1,574 (4) 1,574
Current maturities of long term debt
(new facility) -- -- 1,000 (1) 1,000
Current maturities of long term debt
(prior facility) 1,549 1,549 (2) --
Deferred income taxes 211 -- 211
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Total current liabilities 12,937 25,130 1,549 6,678 43,196
Payable to Quanex -- 12,341 12,341 (6) --
Deferred post retirement welfare benefits
and pension credits -- 32,501 5,027 (4) 27,474
Revolver debt (new facility) -- -- 26,250 (1) 26,250
Term Loan (new facility) -- -- 39,000 (1) 39,000
Senior subordinated debt -- -- 1,321 (3) 20,000 (3) 18,679
Long-term debt, less current maturities
(prior facility) 16,905 -- 16,905 (2) --
Long-term debt, other 1,909 637 2,546
Deferred income taxes 3,554 -- 3,554
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Total liabilities 35,305 70,609 37,143 91,928 160,699
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Stockholders' equity:
Common stock 4 1 1 (4) 4
Additional paid-in capital 15,560 -- 11,761 (4) 1,321 (3) 16,881
11,761 (6)
Retained earnings 313 2,409 2,409 (4) 313
Adjustment for minimum pension liability -- (1,250) 1,250 (4) --
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Total stockholders' equity 15,877 1,160 14,171 14,332 17,198
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$ 51,182 $ 71,769 $ 51,314 $ 106,260 $ 177,897
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</TABLE>
NIAGARA CORPORATION (NIAGARA),
NIAGARA COLD DRAWN CORP. (NCD) AND
LASALLE STEEL COMPANY (LASALLE)
NOTES TO UNAUDITED PRO FORMA CONSOLIDATED BALANCE SHEET
(IN THOUSANDS)
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1. Represents cash received of $66,250 under a revolving credit and term
loan agreement entered into in connection with the Acquisition
(consisting of a revolving credit loan of $26,250 and a term loan of
$40,000 ($1,000 current and $39,000 long term)).
2. Represents the repayment of NCD's prior senior indebtedness.
3. Represents cash received ($20,000) from the issuance, in connection
with the Acquisition, of NCD senior subordinated debt and 285,000
shares of Niagara common stock.
4. Represents the sum of (i) the $67,074 purchase price for the Shares
(estimated purchase price of $65,500 paid at closing plus a
post-closing adjustment due Quanex of $1,574), (ii) estimated accrued
professional fees of $1,750 ($291 of which is included in other assets
and accrued expenses of Niagara at March 31, 1997) and (iii) estimated
liability for personnel restructuring of $500. This sum ($69,324)
exceeds LaSalle's stockholders' equity of $12,921 as of March 31, 1997
(which equity includes a loan from Quanex of $11,761 converted to
additional paid-in capital as a result of the Acquisition) by $56,403.
This excess is allocated to property, plant and equipment ($53,985-
based on appraisal of LaSalle's property, plant and equipment of
$70,174), intangible assets primarily consisting of LaSalle's
proprietary processes, patents and trademarks ($9,552), the
elimination of intangibles relating to LaSalle's pension plan
($1,767), the elimination of net deferred income taxes ($10,394) and
the reduction of LaSalle's deferred post retirement welfare benefits
and pension obligations ($5,027-which is subject to actuarial
appraisal).
Pursuant to the LaSalle stock purchase agreement, the post closing
adjustment ($1,574) is based on the balance sheet of LaSalle as of
March 31, 1997 (Closing Balance Sheet). On July 2, 1997, Niagara and
NCD submitted to Quanex a statement disputing the amounts reflected on
the Closing Balance Sheet for inventory reserves, doubtful account
allowances and certain accrued expenses and reserves, in the aggregate
amount of $2,136,584. Any disputes between Niagara and Quanex
concerning such financial statements are subject to binding
arbitration by an independent accounting firm. There is no assurance
that these disputed items will be resolved in favor of Niagara and
NCD.
5. Represents the accrual of finance and placement fees of $1,565 incurred
in connection with the Acquisition.
6. Represents the reclassification of LaSalle's loan to Quanex ($12,341)
to income taxes payable ($580) and to additional paid-in capital
($11,761).
Niagara Corporation (Niagara),
Niagara Cold Drawn Corp. (NCD) and
LaSalle Steel Company (LaSalle)
Unaudited Pro Forma Consolidated Statement of Operations
(in thousands, except per share amounts)
<TABLE>
<CAPTION>
Pro forma adjustments
Niagara ------------------------------------ Pro forma
Year ended December 31, 1996 consolidated LaSalle Debit Credit consolidated
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<S> <C> <C> <C> <C> <C>
Net Sales $ 76,827 $158,750 $235,577
Cost of products sold 65,824 141,356 207,180
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Gross profit 11,003 17,394 28,397
Operating expenses:
Selling, general and
administrative 8,014 8,227 3,247 (1) 2,600 (2) 16,988
100 (3)
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Income from operations 2,989 9,167 11,409
Other income (expense):
Interest income 100 0 100
Interest expense (1,536) (1,167) 5,833 (4) (8,536)
Other 126 0 126
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Income before income taxes 1,679 8,000 3,099
Taxes on income 615 3,127 2,533 (5) 1,209
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Net income for the period $ 1,064 $ 4,873 $ 9,180 $ 5,133 1,890
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Net income per share $ 0.30 $ 0.49
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Weighted average common shares
outstanding 3,602,818 3,887,818 (6)
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</TABLE>
Niagara Corporation (Niagara),
Niagara Cold Drawn Corp. (NCD) and
LaSalle Steel Company (LaSalle)
Unaudited Pro Forma Consolidated Statement of Operations
(in thousands, except per share amounts)
<TABLE>
<CAPTION>
Pro forma adjustments
Niagara --------------------------------- Pro forma
Year ended March 31, 1997 consolidated LaSalle Debit Credit consolidated
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<S> <C> <C> <C> <C> <C>
Net Sales $ 21,185 $ 44,249 $ 65,434
Cost of products sold 18,168 39,365 57,533
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Gross profit 3,017 4,884 7,901
Operating expenses:
Selling, general and
administrative 2,078 2,456 812 (1) 650 (2) 4,721
25 (3)
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Income from operations 939 2,428 3,180
Other income (expense):
Interest income 14 0 14
Interest expense (397) (467) 1,458 (4) (2,322)
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Income before income taxes 556 1,961 872
Taxes on income 206 771 637 (5) 340
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Net income for the period $ 350 $ 1,190 $ 2,295 $ 1,287 532
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Net income per share $ 0.10 $0.13
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Weighted average common shares
outstanding 3,668,750 3,953,750 (6)
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</TABLE>
NIAGARA CORPORATION (NIAGARA),
NIAGARA COLD DRAWN CORP. (NCD) AND
LASALLE STEEL COMPANY (LASALLE)
NOTES TO UNAUDITED PRO FORMA CONSOLIDATED STATEMENT OF OPERATIONS
(IN THOUSANDS)
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1. Represents additional depreciation and amortization on property,
plant, equipment and intangible assets of $3,247 for the year ended
December 31, 1996 and $812 for the three months ended March 31, 1997.
This is based on an estimated 40-year life on buildings, 14-year life
on machinery and equipment, and 15-year life on intangible assets.
2. Represents estimated salary and related reductions resulting from the
elimination of overlapping job functions immediately following the
Acquisition (Niagara and LaSalle are in similar businesses) of $2,600
for the year ended December 31, 1996 and $650 for the three months
ended March 31, 1997.
3. Represents additional consulting fees of $100 for the year ended
December 31, 1996 and $25 for the three months ended March 31, 1997
incurred in connection with the Acquisition.
4. Represents additional interest expense of $5,833 for the year ended
December 31, 1996 and $1,458 for the three months ended March 31, 1997
on the debt incurred in connection with the Acquisition.
5. Represents consolidated income tax provision at an effective tax rate
of 39% on income before taxes.
6. Weighted average Niagara common shares outstanding used in the
calculation of earnings per share have increased by 285,000 reflecting
the shares issued in connection with the Acquisition.
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.
NIAGARA CORPORATION
By: /s/ Michael Scharf
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Name: Michael Scharf
Title: President
Date: July 2, 1997
