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_______________________________________________________________________________
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 19, 1996
ROADMASTER INDUSTRIES, INC.
(Exact name of Registrant as Specified in its Charter)
__________
DELAWARE 0-16482 84-1065239
(State or other jurisdiction of (Commission File Number) (I.R.S. Employer
incorporation or organization) Identification No.)
250 SPRING STREET, N.W
SUITE 3 SOUTH
ATLANTA, GEORGIA 30303
(404) 586-9000
(Address, including zip code, and telephone number, including area code, of
Registrant's principal executive offices)
___________
_______________________________________________________________________________
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ITEM 2. ACQUISITION OR DISPOSITION OF ASSETS
On January 19, 1996, Roadmaster Industries, Inc. (the "Company")
entered into a binding letter of intent with Brunswick Corporation
("Brunswick"), pursuant to which Brunswick is to acquire all of the assets of
the Company's Nelson/Weather-Rite, Inc. subsidiary for $120,000,000 in cash or
the assumption of bank debt acceptable to the Company or a combination thereof.
The purchase price is subject to adjustment for changes in working capital as
of the Closing Date. Such letter of intent was approved by the Company's Board
of Directors on January 19, 1996. The transaction is subject to execution of a
definitive purchase agreement and satisfaction of certain conditions set forth
in the letter of intent.
ITEM 5. OTHER EVENTS
Separately, the Company noted that demand for its bicycle and toy
products met or exceeded expectations resulting in continued market share gains
among domestic bicycle producers. Nevertheless, despite strong performance in
bicycle and toys, Roadmaster announced that revenues for the fourth quarter
and full year are expected to total approximately $206 million and $730
million, respectively, which would be below previous projections of $750
million for full year revenue. Roadmaster anticipates reporting a loss for the
fourth quarter and the fiscal year ended December 31, 1995.
Roadmaster reported a loss of $9.3 million for the first nine months
ended September 30, 1995. The revenue shortfall and losses came predominantly
from the Company's Fitness Division product lines, which included the
integration of DP. Additionally, intense competitive pressures and an overall
weak retail sales environment were contributing factors.
As a result of anticipated fiscal 1995 results, the Company announced
operational initiatives designed to reduce fixed cost levels and enhance
competitiveness in the Fitness Division. These actions include the planned
closing of Roadmaster's Tyler, Texas fitness manufacturing facility, the
elimination of approximately 600 positions, and consolidation of its fitness
production at the Opelika, Alabama plant. The consolidation at Opelika is
expected to be finished by mid-year 1996. In addition, the Company intends to
down-size certain operations, including the lamp operations and distribution
functions. These restructuring initiatives will result in a one-time charge to
1995 net income.
ITEM 7. FINANCIAL STATEMENTS, PRO FORMA FINANCIAL INFORMATION AND EXHIBITS
The Company stated it was not practicable to file at this time the
information required by Item 7 and that all information required by Item 7 will
be furnished within sixty (60) days of this report.
EXHIBITS
10.1 Letter of Intent
99.1 Press Release
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.
ROADMASTER INDUSTRIES, INC.
Date: January 22, 1996 By: /s/ Jeff L. Hinton
-------------------------------
Jeff L. Hinton
Director of
Plans, Programs and
Corporate Development
-2-
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EXHIBIT 10.1
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BRUNSWICK CORPORATION
1 North Field Court
Lake Forest, Illinois 60045
January 19, 1996
PERSONAL AND CONFIDENTIAL
Mr. Henry Fong
Chief Executive Officer
Roadmaster Industries, Inc.
250 Spring Street, N.W.
Suite 3 South
Atlanta, Georgia 30303
Re: Purchase of Nelson/Weather-Rite Division
Dear Mr. Fong:
Subject to the terms and conditions set forth below, Brunswick
Corporation ("Purchaser") proposes to purchase the assets of the
Nelson/Weather-Rite Division ("Nelson/Weather-Rite") from Roadmaster
Industries, Inc. or its wholly-owned subsidiary, Nelson/Weather-Rite, Inc.
("Seller"; any reference herein to Seller shall include both Roadmaster
Industries, Inc. and its wholly-owned subsidiary Nelson/Weather-Rite, Inc.).
The terms and conditions to purchase Nelson/Weather-Rite are as follows:
1. Purchase Agreement. The parties shall in good faith endeavor
to execute a definitive purchase agreement within thirty (30) days of the date
of this letter (the "Purchase Agreement") which shall reflect the terms of this
letter and shall, among other things:
a. Contain customary representations, warranties and
covenants, as well as indemnification and non-competition provisions
(with no tax allocation for said non-competes);
b. Contain certain conditions providing that the
obligations of the parties to consummate the proposed transaction
shall be subject to receipt of any required consents or authorizations
and other conditions usual and customary in transactions of this
nature;
c. Subject to obtaining third party consents and
authorizations, provide for a Closing Date of not later than March 31,
1996;
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d. Contain a provision that Purchaser shall not be
obligated to consummate the Purchase Agreement if there is a material
adverse change in Nelson/Weather-Rite from the date of the Purchase
Agreement until Closing;
e. Provide that Seller shall pay all federal, state and
local sales or transfer taxes arising from the conveyance of
Nelson/Weather-Rite to Purchaser; and
f. Provide that Seller shall be responsible for the
payment of fees and expenses of SBC Capital Markets, Inc. for this
transaction or any other transaction being contemplated by Seller.
2. Purchase Price. The purchase price for Nelson/Weather-Rite
shall be One Hundred Twenty Million Dollars ($120,000,000). The purchase price
shall be payable in immediately payable funds or assumption of bank debt
acceptable to Purchaser, or a combination thereof. The purchase price will be
increased to the extent net working capital of Nelson/Weather-Rite as of the
Closing Date is more than $45,049,000 or decreased to the extent that such net
working capital is less than $45,049,000 (such amount being the amount of net
working capital set forth on the November 24, 1995 balance sheet of
Nelson/Weather-Rite attached hereto as Exhibit "A".) The term "net working
capital" shall mean net accounts receivable, inventories and current prepaid
items less accounts payable, and current accrued expenses. Real estate and
property taxes, utilities and other similar items will be prorated as of the
Closing Date (except to the extent such items are included in the net working
capital).
3. Nelson/Weather-Rite Division. The Nelson/Weather-Rite Division
shall consist of all of the assets used or useful by Seller in the operation
and business of Nelson/Weather-Rite, excluding Seller's cash and cash
equivalents (such exclusion to be reflected in the net working capital
adjustment) and financial and tax records consisting of Seller's general ledger
and supporting documents. Seller shall convey Nelson/Weather-Rite free and
clear of all liabilities other than current liabilities included in net working
capital and any bank debt assumed as part of the payment of the purchase price.
4. Structure of Transaction. The transaction will be structured
as an asset sale, with Purchaser entitled to a stepped-up tax basis for the
Nelson/Weather-Rite assets under applicable Federal income tax laws.
5. Access. Pending the Closing, Purchaser, its agents,
representatives, employees and accountants will conduct investigations of the
business and operations of Nelson/Weather-Rite and, to this end, Seller will
give Purchaser, its representatives, agents, employees and accountants, as
reasonably requested, access to Nelson/Weather- Rite's books, records, premises
and operations and such other documents and information, including access to
work papers of Seller's outside accountants, as relates to the business and
operations or financial condition of Nelson/Weather-Rite.
6. Confidentiality. Purchaser and Seller each agrees that it will
use its best efforts to keep confidential (except for such disclosure to
attorneys, bankers, underwriters, investors, etc. as
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may be appropriate in the furtherance of this transaction) all information of a
confidential nature obtained by it from the other (including the terms of this
letter) in connection with the transactions contemplated by this letter and, in
the event that such transactions are not consummated, will return to the other
all documents and other materials obtained from the other in connection
therewith.
7. Press Releases. Purchaser and Seller shall jointly prepare,
and determine the timing of, any press release or other announcement to the
public relating to the execution of this letter. No party hereto will issue any
press release or make any other public announcement relating to the
transactions contemplated by this letter without the prior consent of each
other party hereto, except that any party may make any disclosure required to
be made by it under applicable law (including the Federal Securities Laws) if
it determines in good faith that it is appropriate to do so and gives prior
notice to the other party hereto, which notice shall include the contents of
such press release or other public announcement.
8. Costs. Each party shall bear its own costs incurred in
connection with the transactions contemplated by this letter, including any
brokerage or financial advisory fees incurred by it with respect to the
transaction.
9. Exclusive Dealings. For the 30-day period commencing on the
date of this letter, Seller and its representatives will not, directly or
indirectly, through any officer, director, agent or otherwise, (i) solicit,
initiate, or encourage submission of inquiries, proposals, or offers from any
potential buyer (other than Purchaser) relating to the disposition of
Nelson/Weather-Rite, or any part thereof, or (ii) enter into or participate in
any discussions regarding the disposition of Nelson/Weather-Rite, or any part
thereof, to any potential buyer other than Purchaser.
10. Assignment. Purchaser may assign its rights and obligations
under this letter or under the Purchase Agreement to a wholly-owned subsidiary
of Purchaser. Any such assignment shall not affect Purchaser' rights and
obligations under this letter or the Purchase Agreement.
11. Term. This proposal shall expire at 11:59 p.m., Eastern Time
on January 19, 1996, unless earlier accepted by Seller.
12. Purchaser's Obligation. The obligation of Purchaser under this
letter to execute the Purchase Agreement shall be subject to Purchaser being
reasonably satisfied with its review of Nelson/Weather-Rite's warehouse and
other facilities, inventories and the contracts, leases, licenses and other
items to be set forth in the schedules to the Purchase Agreement.
13. Governing Law. This letter of intent shall be governed by the
laws of the State of Delaware, without regard to conflict of law provisions.
14. Counterparts. This letter may be signed by facsimile in
counterparts, all of which taken together shall constitute one instrument, and
any of the parties hereto may execute this letter by signing any such
counterpart. This letter shall become effective upon execution by all parties
hereto.
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Please indicate your acceptance of the terms and conditions of this
proposal by signing in the space provided below.
Very truly yours,
BRUNSWICK CORPORATION
By: /s/ Peter N. Larson
----------------------------------------
Peter N. Larson, Chief Executive Officer
ACCEPTED AND AGREED TO:
ROADMASTER INDUSTRIES, INC.
By: /s/ Henry Fong
---------------------------------
Henry Fong, Chief Executive Officer
DATE: January 19, 1996
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EXHIBIT 99.1
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Richard Foote, ext. 119
Jeffrey Volk, ext. 102
Company Contact: Jeff Hinton
ROADMASTER INDUSTRIES, INC.
250 Spring Street, N.W.
Atlanta, GA 30303
1-618-395-2217
ROADMASTER INDUSTRIES ANNOUNCES AGREEMENT FOR SALE
OF CAMPING DIVISION AND RESTRUCTURING OF
MANUFACTURING OPERATIONS
-NET PROCEEDS TO DELEVERAGE BALANCE SHEET
-COMPANY ANTICIPATES REPORTING LOSS FOR FOURTH QUARTER AND YEAR-
ATLANTA, GEORGIA, January 22, 1996 -- Roadmaster Industries, Inc.
(NYSE Symbol: RDM) today announced an agreement to sell Roadmaster's
Nelson/Weather-Rite camping division to Brunswick Corporation (NYSE Symbol: BC)
for cash consideration of $120,000,000. The transaction is expected to be
consummated in the first quarter of calendar 1996. The agreement is subject to,
among other things, routine regulatory approvals, and Brunswick's review of
certain additional information. Roadmaster indicated that net proceeds will be
used to reduce outstanding indebtedness.
The Company noted that demand for its bicycle and toy products met or
exceeded expectations resulting in continued market share gains among domestic
producers. Despite strong performance in bicycles and toys, Roadmaster
announced that revenues for the fourth quarter and full year are expected to
total approximately $206 million and $730 million, respectively, which would be
below previous projections of $750 million for full year revenue. Roadmaster
anticipates reporting a loss for the fourth quarter and the fiscal year ended
December 31, 1995.
Roadmaster reported a loss of $9.3 million for the first nine months
ended September 30, 1995. The revenue shortfall and losses came predominantly
from the Company's Fitness Division product lines, which included the
integration of DP. Additionally, intense competitive pressures and an overall
weak retail sales environment were further contributing factors.
<PAGE> 3
As a result of anticipated fiscal 1995 results, the Company announced
operational initiatives designed to reduce fixed cost levels and enhance
competitiveness in the Fitness Division. These actions include the planned
closing of Roadmaster's Tyler, Texas fitness manufacturing facility, the
elimination of approximately 600 positions, and consolidation of its fitness
production at the Opelika, Alabama plant. The consolidation at Opelika is
expected to be finished by mid-year 1996. In addition, the Company intends to
down-size certain operations, including the lamp operations and distribution
functions. These restructuring initiatives will result in a one-time charge to
1995 net income.
Henry Fong, Roadmaster's Chief Executive Officer, noted, "These
actions are being taken to improve operating results by allowing the Company to
better capitalize on low-cost production capabilities. Additionally, the sale
of Nelson/Weather-Rite will considerably improve the balance sheet and the
Company's financial condition."
Roadmaster, one of the largest manufacturers of bicycles, is also a
leading producer of fitness equipment, and is a leading producer and
distributor of toys, team sport and camping equipment. The trademarks or brand
names under which Roadmaster sells its products include Roadmaster, Flexible
Flyer, Vitamaster, MacGregor, Weather-Rite, American Camper, Remington, DP,
Hutch, Reach, Forster, and the sleeping bag lines of Cloud Nine, American
Trails, and Expedition Trails.
