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UNITED STATES SECURITIES AND EXCHANGE COMMISSION
Washington, DC 20549
AMENDMENT NO. 1
ON
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) March 7, 1997
(December 23, 1996)
CONSOLIDATED HYDRO, INC.
(Exact name of registrant as specified in its charter)
Delaware
(State or other jurisdiction of incorporation)
Not Yet Issued 06-1138478
(Commission (IRS Employer
File Number) Identification No.)
680 Washington Boulevard, Stamford, Connecticut 06901
(Address of principal executive offices) (Zip code)
Registrant's telephone number, including area code (203) 425-8850
N.A.
- --------------------------------------------------------------------------------
(Former name or former address, if changed since last report)
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Page 1 of 9
Exhibit Index on Page 9
<PAGE>
Item 1. Changes in Control of Registrant
NONE
Item 2. Acquisition or Disposition of Assets
On December 23, 1996, Consolidated Hydro, Inc., a Delaware corporation
(the "Company" or "CHI"), through its wholly owned subsidiary, CHI Universal,
Inc., a Delaware corporation ("CHI Universal"), sold Consolidated Hydro Maine,
Inc., a Delaware corporation ("CHI Maine"), to Ridgewood Maine Hydro Partners,
L.P., a Delaware limited partnership (the "Partnership"). CHI Maine owned and
operated 15 hydroelectric projects located in the State of Maine with an
aggregate capacity of 11.32 megawatts (the "Projects"). The sale was made
pursuant to an Agreement of Merger dated July 1, 1996 (the "Merger Agreement"),
by and among CHI Maine, CHI Universal, CHI Ridgewood Maine Hydro Corporation and
the Partnership, a copy of which has been previously filed as an exhibit to an
earlier Report on Form 8K dated December 23, 1996 and is incorporated by
reference into this Current Report on Form 8-K.
On the Closing Date (as defined in the Merger Agreement), all of the
issued and outstanding capital stock of CHI Maine was sold to the Partnership
for cash. The total proceeds from the sale aggregated approximately $12.9
million, and the Partnership assumed a long-term lease obligation of
approximately $1.2 million related to one of the Projects.
Under a separate agreement with the Partnership, CHI will continue to
operate and maintain the Projects and provide certain administrative services to
the Partnership for an initial period of up to 15 years.
Item 3. Bankruptcy or Receivership
NONE
Item 4. Changes in Registrant's Certifying Accountant
NONE
Item 5. Other Events
NONE
2
<PAGE>
Item 6. Resignations of Registrant's Directors
NONE
Item 7. Financial Statements and Exhibits
(a) Financial statement of businesses acquired
NONE
(b) Pro Forma Financial Information of Consolidated
Hydro, Inc. - Basis of Presentation .......................4
-- Unaudited Pro Forma Consolidated Statements of
Operations for the year ended June 30, 1996 ...............5
-- Unaudited Pro Forma Consolidated Statements of
Operations for the six months ended December 31, 1996 .....6
-- Notes to unaudited Pro Forma Financial Information ....7
(c) Exhibits
(1) Agreement of Merger, dated as of July 1, 1996, by and
among Consolidated Hydro Maine, Inc., CHI Universal,
Inc., Consolidated Hydro, Inc., Ridgewood Maine Hydro
Corporation and Ridgewood Maine Hydro Partners, L.P. *
(2) Letter Agreement, dated November 15, 1996, amending
Agreement of Merger, dated as of July 1, 1996, by and
among Consolidated Hydro Maine, Inc., CHI Universal,
Inc., Consolidated Hydro, Inc., Ridgewood Maine Hydro
Corporation and Ridgewood Maine Hydro Partners, L.P. *
(3) Letter Agreement, dated December 3, 1996, amending
Agreement of Merger, dated as of July 1, 1996, by and
among Consolidated Hydro Maine, Inc., CHI Universal,
Inc., Consolidated Hydro, Inc., Ridgewood Maine Hydro
Corporation and Ridgewood Maine Hydro Partners, L.P. *
----------------------
* Previously filed
Item 8. Change in Fiscal Year
NONE
Item 9. Sales of Equity Securities Pursuant to Regulation S
NONE
3
<PAGE>
Item 7(b)
CONSOLIDATED HYDRO, INC.
Unaudited Pro Forma Financial Information
Basis of Presentation
The following unaudited pro forma consolidated financial information of
the Company is derived from the historical Consolidated Financial Statements of
the Company, included in the Company's Annual Report on Form 10-K for the fiscal
year ended June 30, 1996 and Quarterly Report on Form 10-Q for the six months
ended December 31, 1996, and has been adjusted to give effect to the sale of CHI
Maine on December 23, 1996 as described in Item 2 of this Form 8-K.
The unaudited pro forma information is based on the historical
statements of operations of the Company for the year ended June 30, 1996 and the
six months ended December 31, 1996 as if CHI Maine had been sold at the
beginning of each period presented giving effect to the adjustments as reflected
in the accompanying notes. The pro forma balance sheet of the Company as of
December 31, 1996 (the Company's latest filing) is not included herein since the
effects of the disposition of CHI Maine are already reflected therein.
The pro forma adjustments are based upon currently available
information and upon certain assumptions that management of the Company believes
are reasonable. The final sale adjustments may differ from the pro forma
adjustments herein. The unaudited pro forma consolidated financial information
is not necessarily indicative of what the actual results of operations of the
Company would have been for the periods indicated had the transaction described
above been consummated on July 1, 1995, nor does it purport to represent the
results of operations or financial position for future periods.
The unaudited consolidated financial information should be read in
conjunction with the other financial statements and notes thereto included in
the Company's Annual Report on Form 10-K for the year ended June 30, 1996 and
the Quarterly Report on Form 10-Q for the quarterly period ended December 31,
1996, which are incorporated herein by reference.
4
<PAGE>
<TABLE>
CONSOLIDATED HYDRO INC.
Unaudited Pro Forma
Consolidated Statement of Operations
For the Year Ended June 30, 1996
(Amounts in thousands except share and per share amounts)
<CAPTION>
Historical Pro Forma
-------------------------- ---------------------------------------
Disposition of
Consolidated Adjustments
Consolidated Hydro for Disposition
Hydro, Inc. Maine, Inc. Dr. Cr. Combined
----------- ----------- --- --- --------
<S> <C> <C> <C> <C> <C>
Operating revenues:
Power generation revenue $ 49,761 $ 4,961 $ 44,800
Management fees and operations & maintenance revenues 4,986 -- 1,546 [a] 6,532
Equity income in partnership interests & other
partnership income 635 -- 635
--------- -------- --------
55,382 4,961 51,967
--------- -------- --------
Costs and expenses:
Operating 17,815 1,503 1,142 [b] 167 [c] 17,287
General and administrative 6,487 -- 6,487
Charge for employee and director equity participation
programs 259 -- 259
Depreciation and amortization 9,846 849 8,997
Lease expense to related party 3,532 -- 3,532
Lease expense to unrelated parties 2,540 98 2,442
Charge for impairment of long-lived assets 87,202 25,166 62,036
-------- -------- --------
127,681 27,616 101,040
-------- -------- --------
Loss from operations (72,299) (22,655) (49,073)
Interest income 1,032 -- -- [d] 1,032
Other income 368 2 366
Interest expense on indebtedness to a related party (9,927) -- (9,927)
Interest expense on indebtedness to unrelated parties (16,949) (169) (16,780)
Minority interests in loss of consolidated subsidiaries 2,063 -- 2,063
-------- -------- --------
Loss before benefit for income taxes (95,712) (22,822) (72,319)
Benefit for income taxes 7,381 6,548 833
-------- -------- --------- ------- --------
Net loss $ (88,331) $ (16,274) $ 1,142 $ 1,713 $(71,486)
======== ======== ========= ======= ========
Net loss applicable to common stock:
Net loss $ (88,331) $(71,486)
Dividends declared on preferred stock (13,057) (13,057)
Accretion of preferred stock (857) (857)
Undeclared dividends on cumulative preferred stock (9,818) (9,818)
--------- --------
$ (112,063) $(95,218)
========= ========
Net loss per common share $ (87.45) $ (74.30)
========= ========
Weighted average number of common shares 1,281,516 1,281,516
========= =========
</TABLE>
The accompanying notes are an integral part of the financial statements.
5
<PAGE>
<TABLE>
CONSOLIDATED HYDRO INC.
Unaudited Pro Forma
Consolidated Statement of Operations
For the Six Months Ended December 31,
1996 (Amounts in thousands except share and
per share amounts)
<CAPTION>
Historical Pro Forma
-------------------------- ------------------------------------
Disposition of
Consolidated Adjustments
Consolidated Hydro for Disposition
Hydro, Inc. Maine, Inc. Dr. Cr. Combined
----------- ----------- --- --- --------
<S> <C> <C> <C> <C> <C>
Operating revenues:
Power generation revenue $ 22,126 $ 1,879 $ 20,247
Management fees and operations & maintenance revenues 2,692 -- 849 [a] 3,541
Equity income in partnership interests & other
partnership income 396 -- 396
---------- ------- --------
25,214 1,879 24,184
---------- ------- --------
Costs and expenses:
Operating 8,854 715 636 [b] 88 [c] 8,687
General and administrative 3,120 -- 3,120
Charge for employee and director equity participation
programs 50 -- 50
Depreciation and amortization 4,331 -- 4,331
Lease expense to related party 1,795 -- 1,795
Lease expense to unrelated parties 1,070 33 1,037
Adjustment for impairment of long-lived assets (412) -- (412)
--------- ------- --------
18,808 748 18,608
--------- ------- --------
Income from operations 6,406 1,131 5,576
Interest income 639 -- -- [d] 639
Other income 44 -- 44
Interest expense on indebtedness to a related party (5,171) -- (5,171)
Interest expense on indebtedness to unrelated parties (9,500) (79) (9,421)
-------- ------- --------
(Loss)/income before income taxes and extraordinary item (7,582) 1,052 (8,333)
Benefit/(provision) for income taxes 1,460 (393) 1,853
-------- ------- -------
(Loss)/income before extraordinary item (6,122) 659 (6,480)
Extraordinary gain on early extinguishment of debt
(net of income tax of $3,414) 5,622 -- 5,622
-------- ------- ------- ------- --------
Net (loss)/income $ (500) $ 659 $ 636 $ 937 $ (858)
======== ======= ======= ======= ========
Net loss applicable to common stock:
Net loss $ (500) $ (858)
Dividends declared on preferred stock (7,208) (7,208)
Accretion of preferred stock (428) (428)
Undeclared dividends on cumulative preferred stock (4,909) (4,909)
--------- ---------
$ (13,045) $ (13,403)
========= =========
Net loss per common share:
Loss before extraordinary item $ (14.52) $ (14.80)
Extraordinary item 4.37 4.37
--------- ---------
$ (10.15) $ (10.42)
========= =========
Weighted average number of common shares 1,285,762 1,285,762
========= =========
</TABLE>
The accompanying notes are an integral part of the financial statements.
6
<PAGE>
CONSOLIDATED HYDRO, INC.
Notes to Unaudited Pro Forma
Consolidated Financial Information
(Amounts in thousands)
The following unaudited pro forma consolidated financial information is
based on the historical statements of operations of the Company for the year
ended June 30, 1996 and the six months ended December 31, 1996 as if CHI Maine
had been sold at the beginning of each period presented giving effect to the
adjustments as reflected below.
On December 23, 1996, Consolidated Hydro, Inc. (the "Company" or
"CHI"), sold Consolidated Hydro Maine, Inc. ("CHI Maine"), to Ridgewood Maine
Hydro Partners, L.P., (the "Partnership") for cash. The total proceeds from the
sale aggregated approximately $12.9 million, and the Partnership assumed a
long-term lease obligation of approximately $1.2 million related to one of the
Projects.
Under a separate agreement with the Partnership, CHI will continue to
operate and maintain the Projects and provide certain administrative services to
the Partnership for an initial period of up to 15 years.
The unaudited pro forma statement of operations adjustments for the
year ended June 30, 1996 are summarized as follows:
[a] Represents twelve months of fixed management services fees of $208 and
administrative service fees of $91, in accordance with the O&M annual
contract. Also included are rebillable revenues associated with
"additional service" costs of $500 and "additional service" labor of
$747. In accordance with the O&M contract, "additional services" are
to be billed at cost plus 5% for materials and cost plus 10% for
labor.
[b] Represents salary costs of $666 associated with both routine
maintenance and "additional services" plus other "additional services"
of $476.
[c] Represents the reversal of an allocated overhead factor associated
with labor costs that is eliminated in consolidation.
[d] In accordance with generally accepted accounting principles governing
the preparation of pro forma financial information, no interest income
related to the pro forma cash balance of $11,700 has been assumed.
The unaudited pro forma statement of operations adjustments for the six
months ended December 31, 1996 are summarized as follows:
[a] Represents six months of fixed management services fees of $107 and
administrative service fees of $47, in accordance with the O&M annual
contract fees of $214 and $94, respectively. Also included are
rebillable revenues associated with "additional service" costs of $301
and "additional service" labor of $394. In accordance with the O&M
contract, "additional services" are to be billed at cost plus 5% for
materials and cost plus 10% for labor.
[b] Represents salary costs of $350 associated with both routine
maintenance and "additional services" plus other "additional services"
of $286.
[c] Represents the reversal of an allocated overhead factor associated
with labor costs that is eliminated in consolidation.
[d] In accordance with generally accepted accounting principles governing
the preparation of pro forma financial information, no interest income
related to the pro forma cash balance of $11,700 has been assumed.
7
<PAGE>
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.
Date: March 7, 1997 CONSOLIDATED HYDRO, INC.
By: /s / Patrick J. Danna
-----------------------------
Patrick J. Danna
Vice President, Controller
and Treasurer
(principal accounting officer)
8
<PAGE>
Exhibit Index
Exhibit No. Description
(1) Agreement of Merger, dated as of July 1, 1996, by and
among Consolidated Hydro Maine, Inc., CHI Universal,
Inc., Consolidated Hydro, Inc., Ridgewood Maine Hydro
Corporation and Ridgewood Maine Hydro Partners, L.P. *
(2) Letter of Agreement, dated November 15, 1996, amending
Agreement of Merger, dated as of July 1, 1996, by and
among Consolidated Hydro Maine, Inc., CHI Universal,
Inc., Consolidated Hydro, Inc., Ridgewood Maine Hydro
Corporation and Ridgewood Maine Hydro Partners, L.P. *
(3) Letter Agreement, dated December 3, 1996, amending
Agreement of Merger, dated as of July 1, 1996, by and
among Consolidated Hydro Maine, Inc., CHI Universal,
Inc., Consolidated Hydro, Inc., Ridgewood Maine Hydro
Corporation and Ridgewood Maine Hydro Partners, L.P. *
- ----------------------
* Previously filed
9
