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
December 22, 1994
Date of report (Date of earliest event reported)
MASCOTECH, INC.
(Exact Name of Registrant as Specified in Charter)
Delaware 1-12068 38-2513957
(State or Other Jurisdiction (Commission (IRS Employer
of Incorporation) File Number) Identification No.)
21001 Van Born Road, Taylor, Michigan 48180
(Address of Principal Executive Offices) (Zip Code)
(313) 274-7405
Registrant's telephone number, including area code
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ITEM 5. OTHER EVENTS
On December 22, 1994, the Registrant announced the planned disposition of
a number of its businesses, including its Architectural Products and Defense
businesses, and certain of its transportation-related businesses, as part of the
Registrant's long-term strategic plan to increase the focus on its core operat-
ing capabilities.
The press release issued by the Registrant is filed as Exhibit 99.a
hereto.
The Registrant is filing herewith as Exhibit 99.b, an unaudited pro forma
consolidated condensed balance sheet as of December 31, 1994 and an unaudited
pro forma consolidated condensed statement of operations for the year ended
December 31, 1994, which reflects the disposition of the Company's non-core
businesses.
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ITEM 7. FINANCIAL STATEMENTS, PRO FORMA FINANCIAL INFORMATION AND EXHIBITS
(c) Exhibits. The following Exhibits are filed herewith:
99.a Press Release dated December 22, 1994.
99.b Unaudited pro forma consolidated condensed balance sheet
of MascoTech, Inc. as of December 31, 1994 and unaudited
pro forma consolidated condensed statement of operations
of MascoTech, Inc. for the year ended December 31, 1994.
<PAGE>
SIGNATURES
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.
MASCOTECH, INC.
By /s/Timothy Wadhams
Timothy Wadhams
Vice President -
Controller and Treasurer
Date: May 15, 1995
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EXHIBIT INDEX
Exhibit No. Description
99.a Press Release dated December 22, 1994.
99.b Unaudited pro forma consolidated condensed balance sheet of
MascoTech, Inc. as of December 31, 1994 and unaudited pro
forma consolidated condensed statement of operations of
MascoTech, Inc. for the year ended December 31, 1994.
Exhibit 99.a
FOR IMMEDIATE RELEASE
December 22, 1994
MASCOTECH, INC. ANNOUNCES MAJOR RESTRUCTURING
MascoTech, Inc. has announced the planned disposition of a number of businesses,
including its Architectural Products and Defense businesses, and certain of its
transportation-related businesses as part of its long-term strategic plan to
increase the focus on its core operating capabilities.
The businesses to be disposed of have annual sales of approximately $700
million, including over $300 million of transportation-related sales, and in
1994 are expected, in aggregate, to perform at an approximate break-even
operating profit level. The Company believes these businesses, which have net
assets of approximately $700 million, will be disposed of for after-tax net cash
and other proceeds of approximately $400 million. The disposition of these
businesses will primarily occur in 1995 with the cash portion of the proceeds
applied to reduce the Company's indebtedness and to provide additional capital
to invest in its core businesses.
The Company will record a special charge, currently estimated at approximately
$300 million after tax, in the fourth quarter of 1994 for the anticipated loss
on the disposition of these businesses, which will result in a substantial loss
for the quarter and the year. However, the Company expects that this
restructuring should have a favorable long-term effect on the Company's balance
sheet and future per common share earnings.
Upon the completion of this restructuring, MascoTech's core transportation-
related businesses, with annual sales of approximately $1 billion, will include:
powertrain and chassis components manufactured through the application of
advanced metalworking technologies; contract engineering services that support
customers' vehicle development process; and products manufactured for
distribution principally to the traditional, retail and heavy-duty segments of
the automotive aftermarket.
As previously announced, the Company has made significant expenditures and
commitments in 1994 for capital programs, including new advanced manufacturing
technologies, to support these core transportation-related businesses. These
additional investments, which will continue in 1995 and are expected to
aggregate approximately $260 million for both years, reflect the Company's
belief in the businesses' favorable long-term outlook and are planned to meet
increased demand for certain current product programs. These expenditures will
also provide capacity for new products that the Company expects to begin
producing over the next several years, and enhance the Company's leadership
positions in advanced manufacturing technologies related to its forging and
metal forming businesses.
MascoTech, Inc.
Unaudited Pro Forma Consolidated Condensed Financial Statements
The following unaudited pro forma consolidated condensed balance sheet and
statement of operations give effect to the following transactions which have
occurred or which are assumed to occur:
- the assumed disposition for cash, except for known non-cash
transactions, of the net assets held for disposition at December 31,
1994 with the cash proceeds utilized to retire debt.
The pro forma consolidated condensed financial statements reflect these
transactions as if they had been completed with all proceeds (including tax
benefits) received at the beginning of the period presented for the consolidated
condensed statement of operations and as of December 31, 1994 for the
consolidated condensed balance sheet.
The pro forma data does not purport to be indicative of the results which
would actually have been reported if the transactions had occurred on such dates
or which may be reported in the future. The pro forma data should be read in
conjunction with the historical financial statements of the Company and the
related notes to such financial statements. To comply with 8-K pro forma
financial statement requirements, the historical financial statements exclude
discontinued operations (the Company's recently disposed energy-related business
segment has been accounted for as discontinued operations) and extraordinary
items.
Primary loss per common share is based on 58.9 million weighted average
shares of common stock outstanding. The effect of stock options, warrants and
convertible preferred stock (common stock equivalents) was anti-dilutive based
on historical results.
Pro forma earnings per common share is based on the modified treasury
stock method. Primary earnings per common share after adjustments is based on
73.5 million shares outstanding including approximately 14.6 million of common
stock equivalents. Fully diluted earnings per common share after adjustments is
based on 83.6 million shares outstanding including the assumed conversion of
convertible securities into 10.1 million shares.
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<TABLE>
MascoTech, Inc.
Proforma Consolidated Condensed Statement of Operations
for the year ended December 31, 1994
(unaudited)
(amounts are in thousands except per share amounts)
<CAPTION>
Company Assumed
Historical Disposition Pro forma Pro forma
12/31/94 of Businesses Adjustments Adjusted
(A) (B)
<S> <C> <C> <C> <C>
Net sales $ 1,702,260 $ 677,520 $1,024,740
Cost of sales (1,385,430) (598,100) (787,330)
Selling, general and administrative
expenses (194,680) (81,440) (113,240)
Charge for disposition of businesses (400,000) $ 400,000 ---
Operating profit (loss) (277,850) (2,020) 400,000 124,170
Other income (expense), net:
Interest expense (49,830) (160) 20,080 (29,590)
Equity and interest income (loss)
from affiliates 29,810 (1,400) 2,760 33,970
Other, net 33,380 (3,110) --- 36,490
Other income (expense), net 13,360 (4,670) 22,840 40,870
Income (loss) from continuing
operations before income taxes
(credit) (264,490) (6,690) 422,840 165,040
Income taxes (credit) (30,070) (870) 94,140 64,940
Income (loss) from continuing
operations before extraordinary
income $ (234,420) $ (5,820) $ 328,700 $ 100,100
Preferred stock dividends $ 12,960 $ 12,960
Income (loss) from continuing
operations before extraordinary
income attributable to common stock $ (247,380) $ 87,140
Per common share data:
Primary earnings (loss) from
continuing operations $(4.20) $ 1.36
Fully diluted earnings (loss) from
continuing operations $(4.20) $ 1.31
Primary shares outstanding 58,910 73,470
Fully diluted shares outstanding 58,910 83,560
</TABLE>
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MascoTech, Inc.
Footnotes to Pro Forma Consolidated Condensed Statement of Operations
for the year ended December 31, 1994
(A) To reflect the following:
- elimination of the sales and directly allocable expenses related to
the Company's businesses held for disposition;
- the related tax credit at appropriate U.S. Statutory tax rates net
of state tax expense.
(B) To reflect the following:
- interest savings and prepaid debenture expense, net from the use of
assumed net cash proceeds of $345 million from the sale (including
cash tax benefit ($60 million) on the loss) to retire debt;
- additional equity and interest income from the exchange of a
business unit for an equity ownership interest in the acquiring
company and notes receivable aggregating approximately $37 million;
- the related net tax expense of the pro forma adjustments at
appropriate U.S. statutory rates;
- elimination of the $400 million charge.
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<TABLE>
MascoTech, Inc.
Pro Forma Consolidated Condensed Balance Sheet
as of December 31, 1994
(unaudited)
(amounts are in thousands)
<CAPTION>
Company Assumed
Historical Disposition Pro Forma
12/31/94 of Businesses Adjusted
<S> <C> <C> <C>
(A)
ASSETS
Current assets:
Cash and cash investments $ 61,950 $ 61,950
Marketable Securities 62,110 62,110
Receivables 171,870 171,870
Inventories 91,950 91,950
Prepaid expenses and deferred taxes 63,600 63,600
Net current assets of businesses held
for disposition 146,690 $ (146,690)
Total current assets 598,170 (146,690) 451,480
Equity and other investments in affiliates 173,230 37,060 210,290
Property and equipment, net 379,330 379,330
Excess of cost over net assets of acquired
companies 93,820 93,820
Notes receivable and other assets 53,770 53,770
Net non-current assets of businesses held
for disposition 232,370 (232,370)
Total assets $1,530,690 $ (342,000) $1,188,690
LIABILITIES
Current Liabilities:
Accounts Payable $ 111,860 $ 111,860
Accrued liabilities 72,090 72,090
Current portion of long-term debt 3,670 3,670
Total current liabilities 187,620 187,620
Long-term debt 868,240 $ (345,000) 523,240
Deferred income taxes and other long-term
liabilities 93,690 93,690
Total liabilities 1,149,550 (345,000) 804,550
SHAREHOLDERS' EQUITY
Preferred Stock 10,800 10,800
Common Stock 56,610 56,610
Paid-In Capital 318,960 318,960
Retained Earnings (deficit) (7,590) 3,000 (4,590)
Cumulative Translation Adjustments 2,360 2,360
Total shareholders' equity 381,140 3,000 384,140
Total liabilities and shareholders'
equity $1,530,690 $ (342,000) $1,188,690
</TABLE>
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MascoTech, Inc.
Footnote to Pro Forma Consolidated Condensed Balance Sheet
as of December 31, 1994
(A) To reflect the following:
- the disposition of net current and non-current assets of businesses
held for disposition;
- the reduction of debt with the estimated cash proceeds from the
disposition of businesses;
- exchange of a business unit for an equity ownership interest in the
acquiring company and notes receivable aggregating approximately $37
million;
- a net gain of $3 million after-tax related to estimated gains on
businesses to be sold, net of estimated expenses to be incurred in
the future, which could not be accrued for financial reporting
purposes at December 31, 1994.
