SECURITIES AND EXCHANGE COMMISSION
Washington, D. C. 20549
--------------------------
FORM 8-K/A
Amendment No. 1
CURRENT REPORT
PURSUANT TO SECTION 13 OR 15(d) OF
THE SECURITIES EXCHANGE ACT OF 1934
Date of Report (Date of earliest event reported): December 31, 1996
A. P. GREEN INDUSTRIES, INC.
(Exact name of registrant as specified in its charter)
Delaware 0-16452 43-0899374
(State or other (Commission (IRS Employer
jurisdiction of File Number) Identification
organization) Number)
Green Boulevard
Mexico, Missouri 65265
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code: (573) 473-3626
<PAGE>
Item 2. Acquisition or Disposition of Assets
Description of Acquisition of Eastern Ridge Lime, L.P.
On December 31, 1996, APG Lime Corp., a Delaware corporation and
wholly-owned subsidiary of the Registrant, acquired substantially all of
the assets and assumed certain of the liabilities of Eastern Ridge Lime,
L. P., a Delaware limited partnership ("Eastern Ridge"). The assets
included Eastern Ridge's mineral processing facility and quarrying and
lime manufacturing business in Ripplemead, Virginia and a leased
terminal facility in St. Matthews, South Carolina. In addition to the
assumption of certain liabilities, the Registrant paid Eastern Ridge the
$10,059,540 purchase price in cash, which was subject to a post-closing
adjustment as set forth in the acquisition agreement.
Historical and Pro Forma Financial Statements.
This Current Report also contains the historical financial statements of
Eastern Ridge and the unaudited pro forma financial information of the
Registrant, showing the effect of the consummation of the foregoing
acquisition. For a description of the historical and pro forma financial
statements included herewith, see Item 7(a) and (b) of this report.
Item 7. Financial Statements and Exhibits
(a) Historical Financial Statements of Eastern Ridge -
The following financial statements of Eastern Ridge are filed
herewith pursuant to "Item 2 - Acquisition or Disposition of
Assets" of this report:
Independent Auditors' Report
Balance Sheets, December 31, 1995 and 1994
Statements of Operations, Years Ended December 31, 1995 and 1994
Statements of Cash Flows, Years Ended December 31, 1995 and 1994
Statements of Partnership Equity (Deficit), Years Ended
December 31, 1995 and 1994
Notes to Financial Statements
Balance Sheet, September 30, 1996 (Unaudited)
Statements of Operations, Nine Months Ended September 30, 1996
and 1995 (Unaudited)
Statements of Cash Flows, Nine Months Ended September 30, 1996
and 1995 (Unaudited)
-2-
<PAGE>
(b) Pro Forma Financial Information of the Registrant -
The following pro forma combined financial statements
of the Registrant showing the effect of the foregoing
acquisition are filed herewith pursuant to "Item 2
Acquisition or Disposition of Assets" of this report:
Pro Forma Combined Statement of Financial Position,
September 30, 1996 (Unaudited)
Pro Forma Combined Statement of Earnings for the Nine Months Ended
September 30, 1996 (Unaudited)
Pro Forma Combined Statement of Earnings for the Year Ended
December 31, 1995 (Unaudited)
Notes to Unaudited Pro Forma Combined Financial
Statements (Unaudited)
(c) Exhibits. See Exhibit Index.
--------
-3-
<PAGE>
Financial Statements
Eastern Ridge Lime, L.P.
Years ended December 31, 1995 and 1994
with Report of Independent Auditors
<PAGE>
Eastern Ridge Lime, L.P.
Financial Statements
Years ended December 31, 1995 and 1994
CONTENTS
Report of Independent Auditors............................................ 1
Financial Statements
Balance Sheets............................................................ 2
Statements of Operations.................................................. 3
Statements of Cash Flows.................................................. 4
Statements of Partnership Equity (Deficit)................................ 5
Notes to Financial Statements............................................. 6
<PAGE>
Report of Independent Auditors
Board of Directors
Mississippi Lime Company and Affiliates
We have audited the accompanying balance sheets of Eastern Ridge Lime, L.P. as
of December 31, 1995 and 1994, and the related statements of operations, cash
flows, and partnership equity (deficit) for the years then ended. These
financial statements are the responsibility of the Company's management. Our
responsibility is to express an opinion on these financial statements based on
our audits.
We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to obtain
reasonable assurance about whether the financial statements are free of material
misstatement. An audit includes examining, on a test basis, evidence supporting
the amounts and disclosures in the financial statements. An audit also includes
assessing the accounting principles used and significant estimates made by
management, as well as evaluating the overall financial statement presentation.
We believe that our audits provide a reasonable basis for our opinion.
In our opinion, the financial statements referred to above present fairly, in
all material respects, the financial position of Eastern Ridge Lime, L.P. at
December 31, 1995 and 1994, and the results of its operations and its cash flows
for the years then ended in conformity with generally accepted accounting
principles.
April 24, 1996, /S/ERNST & YOUNG LLP
except for Note 5, as to which St. Louis, Mo.
the date is October 23, 1996
1
<PAGE>
Eastern Ridge Lime, L.P.
Balance Sheets
(Dollars in Thousands)
DECEMBER 31
1995 1994
------- -------
ASSETS
Current assets:
Cash and cash equivalents $ 458 $ 318
Trade accounts receivable 702 662
Inventories:
Finished goods 303 472
Supplies 131 338
------- -------
434 810
Repair parts 833 816
Other current assets 75 41
Intercompany receivable - 34
------- -------
Total current assets 2,502 2,681
Property, plant and equipment:
Buildings, machinery and equipment 17,289 17,864
Land and mineral reserves 4,015 2,267
------- -------
21,304 20,131
Less accumulated depletion and depreciation 6,464 4,898
Less valuation allowance 7,729 -
------- -------
7,111 15,233
Construction in progress 554 802
------- -------
7,665 16,035
Noncompete agreement, less accumulated
amortization of $1,729 and $1,229 in
1995 and 1994, respectively, and
valuation allowance of $271 in 1995 500 1,271
------- -------
Total assets $10,667 $19,987
======= =======
LIABILITIES AND PARTNERSHIP EQUITY
Current liabilities:
Accounts payable $ 1,447 $ 508
Accrued expenses 94 128
Intercompany line of credit and payable 10,743 7,658
Notes payable and accrued interest to related
party 302 302
Current maturity of capital lease obligations 214 97
------- -------
Total current liabilities 12,800 8,693
Capital lease obligations, less current maturities 772 339
Other liabilities 12 27
Partnership equity (deficit) (2,917) 10,928
------- -------
Total liabilities and partnership equity $10,667 $19,987
======= =======
See accompanying notes
2
<PAGE>
Eastern Ridge Lime, L.P.
Statements of Operations
(Dollars in Thousands)
YEAR ENDED DECEMBER 31
1995 1994
-------- -------
Net sales $ 7,107 $ 7,070
Cost of sales 11,352 10,110
-------- -------
(4,245) (3,040)
Selling, administrative and general expenses 1,627 1,584
-------- -------
Operating loss (5,872) (4,624)
Other income (expense):
Write-down of assets held for sale (8,000) -
Write-down of other assets (1,073) -
Interest expense (869) (400)
Other income 386 46
Other expense (78) -
-------- -------
(9,634) (354)
-------- -------
Net loss $(15,506) $(4,978)
======== =======
See accompanying notes.
3
<PAGE>
Eastern Ridge Lime, L.P.
Statements of Cash Flows
(Dollars in Thousands)
YEAR ENDED DECEMBER 31
1995 1994
-------- -------
OPERATING ACTIVITIES
Net loss $(15,506) $(4,978)
Adjustments to reconcile net loss to net cash used
in operating activities:
Depreciation and depletion 2,218 2,086
Amortization 500 500
(Gain) loss on disposal of property, plant and
equipment 1,100 (21)
Write-down of assets held for sale 8,000 -
Changes in operating assets and liabilities:
Accounts receivable (40) 588
Inventories and repair parts 359 (299)
Accounts payable 939 (494)
Other assets and liabilities (82) (50)
-------- -------
Net cash used in operating activities (2,512) (2,668)
INVESTING ACTIVITIES
Purchase of property, plant and equipment (2,011) (528)
Proceeds from sale of property, plant and
equipment 54 206
-------- -------
Net cash used in investing activities (1,957) (322)
FINANCING ACTIVITIES
Net intercompany proceeds 3,119 2,665
Payment of capital lease obligations (171) (11)
Proceeds from notes payable to related party - 302
Capital contributions from limited partner 1,661 -
-------- -------
Net cash provided by financing activities 4,609 2,956
-------- -------
Increase (decrease) in cash and cash equivalents 140 (34)
Cash and cash equivalents at beginning of year 318 352
-------- -------
Cash and cash equivalents at end of year $ 458 $ 318
======== =======
See accompanying notes.
4
<PAGE>
Eastern Ridge Lime, L.P.
Statements of Partnership Equity (Deficit)
(Dollars in Thousands)
LIMITED GENERAL
PARTNER PARTNER TOTAL
-------- -------- --------
Balance at December 31, 1993 $ 15,975 $ (69) $ 15,906
Net loss (4,928) (50) (4,978)
-------- ----- --------
Balance at December 31, 1994 11,047 (119) 10,928
Capital contributions 1,661 - 1,661
Net loss (15,351) (155) (15,506)
-------- ----- --------
Balance at December 31, 1995 $ (2,643) $(274) $ (2,917)
======== ===== ========
See accompanying notes.
5
<PAGE>
Eastern Ridge Lime, L.P.
Notes to Financial Statements
(Dollars in Thousands)
December 31, 1995
1. BASIS OF PRESENTATION AND BUSINESS
The financial statements include the accounts of Eastern Ridge Lime, L.P. (the
Company), a limited partnership in which Eastern Ridge Lime, Inc. has a 1
percent general partnership interest with the remaining 99 percent limited
partnership interest owned by Mississippi Lime Company. Both Eastern Ridge Lime,
Inc. and Mississippi Lime Company are wholly owned by their common parent, the
Harry B. Mathews, Jr. Trust for the benefit of Margaret Mathews Jenks.
The Company manufactures and sells high-quality lime products primarily to
customers in the paper and steel industries. Approximately 43 percent and 14
percent of the Company's tonnage sold for 1995 related to these industries,
respectively. Two customers accounted for 22 percent and 14 percent,
respectively, of tonnage sold in 1995.
The Company has a labor agreement with the United Steel Workers of America,
covering substantially all of its production workers.
2. SIGNIFICANT ACCOUNTING POLICIES
CASH AND CASH EQUIVALENTS
Cash and cash equivalents include demand deposits and other temporary cash
investments with maturities of three months or less when purchased.
INVENTORIES
Inventories are valued at the lower of cost or market. Cost is determined by
using average production costs for finished goods and average costs for
supplies. Finished goods inventory costs include labor, supplies, and other
production costs.
REPAIR PARTS
Repair parts are stated at cost, determined using monthly averages. Repair parts
are classified as current assets in accordance with industry practice; however,
certain repair parts may not be utilized within a one-year period.
6
<PAGE>
Eastern Ridge Lime, L.P.
Notes to Financial Statements
(Dollars in Thousands)
December 31, 1995
2. SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
PROPERTY, PLANT AND EQUIPMENT
Buildings, machinery, and equipment are carried at cost and include expenditures
for new facilities and those which substantially increase the value or useful
lives of existing assets.
Maintenance and repairs are charged to expense as incurred. Depreciation is
provided over the estimated useful lives of the assets on the sum-of-the-years
digits and straight-line methods. Mineral reserves are depleted under the
units-of-production method.
MINE DEVELOPMENT COSTS
Mine development for both underground and surface mines is recorded at cost.
Costs incurred to develop a new or previously abandoned mine or to expand the
normal capacity of operating mines are capitalized. Development costs incurred
to return to or maintain existing normal production capacity and all mine
exploration expenditures are charged to expense as incurred. Core or other
drilling for determining feasibility or size of potential mining areas is
included in exploration expenditures. Initial mapping costs of an area for
future development of a new or previously abandoned mine are capitalized.
Subsequent map updating is expensed as incurred.
Capitalized mine development costs are amortized using the units-of-production
method over the estimated life of the mine based on actual tonnage produced.
NONCOMPETE AGREEMENT
The noncompete agreement is being amortized using the straight-line method over
the five-year term of the agreement.
CONCENTRATION OF CREDIT RISK
The Company manufactures and sells high-quality lime products to customers in
diversified industries. The Company performs periodic credit evaluations of its
customers' financial condition and generally does not require collateral. At
December 31, 1995 and 1994, trade accounts receivable from customers in the
paper and steel industries represented approximately 24 percent and 5 percent
and 26 percent and 30 percent, respectively, of the Company's accounts
receivable.
7
<PAGE>
Eastern Ridge Lime, L.P.
Notes to Financial Statements
(Dollars in Thousands)
December 31, 1995
2. SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
USE OF ESTIMATES
The preparation of the financial statements in conformity with generally
accepted accounting principles requires management to make estimates and
assumptions that affect the amounts reported in the financial statements and
accompanying notes. Actual results could differ from those estimates.
3. RELATED PARTY TRANSACTIONS
The Company transacts ongoing business with its partners and certain entities
that are affiliated with its partners. Related party account balances and
expenses for the years ended December 31, 1995 and 1994, include:
1995 1994
------- ------
Intercompany line of credit $10,400 $7,541
Intercompany receivables 343 117
Intercompany payables - 34
Notes payable and accrued interest to related party 302 302
Management fees 174 129
Intercompany sales - 28
Intercompany purchases 64 68
Intercompany interest expense 789 386
Interest expense to related party 27 10
Intercompany rent expense 17 39
On January 1, 1993, the Company entered into a Line of Credit Loan and Security
Agreement with Mississippi Lime Company. Borrowings under the line of credit are
limited to $10,400 (at December 31, 1995), are due on demand, and are secured by
accounts receivable and equipment of the Company. Interest is payable monthly at
prime.
8
<PAGE>
Eastern Ridge Lime, L.P.
Notes to Financial Statements
(Dollars in Thousands)
December 31, 1995
4. COMMITMENTS AND CONTINGENCIES
LEASES
The Company leases certain equipment. These leases have varying terms, and
certain leases have renewal and/or purchase options. Future minimum payments
under noncancelable leases with initial or remaining terms in excess of one year
consist of the following at December 31, 1995:
CAPITAL LEASES
--------------
1996 $ 287
1997 287
1998 336
1999 248
------
Total minimum lease payments 1,158
Less amount representing interest 172
------
Present value of minimum lease payments
(including current portion of $214) $ 986
======
During 1995 and 1994, the Company entered into capital lease obligations for
certain equipment totaling $721 and $431, respectively. Buildings, machinery,
and equipment at December 31, 1995 and 1994, include approximately $1,137 and
$427 under capital leases, respectively. Accumulated depreciation and
amortization for such equipment approximated $243 and $28 at December 31, 1995
and 1994, respectively.
Interest expense incurred and paid for the years ended December 31, 1995 and
1994, was $869 and $400, respectively, including capital lease obligation
interest expense totaling $53 and $4 in 1995 and 1994, respectively.
5. ASSET REALIZATION
Subsequent to December 31, 1995, the Board of Directors of Mississippi Lime
Company approved a plan to dispose of the operating assets of the Company. On
October 23, 1996, Mississippi Lime Company received a letter of intent from
another company for the acquisition of substantially all of the Company's
operating assets. Based on the expected net proceeds from the pending sale, the
Company has recorded a valuation allowance of
9
<PAGE>
Eastern Ridge Lime, L.P.
Notes to Financial Statements
(Dollars in Thousands)
December 31, 1995
5. ASSET REALIZATION (CONTINUED)
$8,000 related to the assets held for sale. Although the sale is subject to
further negotiations and Board approval, the sale is anticipated to be completed
by December 31, 1996 with no significant deviation from the terms outlined in
the letter of intent.
6. RETIREMENT PLANS
The Company sponsors a defined contribution savings plan covering all hourly
workers. Contributions by the Company are based on 50 percent of employee
contributions, not to exceed 3 percent of compensation. Contributions to this
plan were $37 and $35 for the years ended December 31, 1995 and 1994,
respectively.
7. TAX STATUS
No taxes are reflected in the Company's financial statements because profits and
losses of the partnership are passed through to their respective partners
according to the ownership percentage of such partners.
10
<PAGE>
Eastern Ridge Lime, L.P.
Unaudited Balance Sheet
As of September 30, 1996
(Dollars in Thousands)
Assets
Current assets:
Cash and cash equivalents $ 122
Trade accounts receivable 957
Inventories:
Finished goods 431
Supplies 146
-------
577
Repair parts 839
Other current assets 54
Intercompany receivable -
-------
Total current assets 2,549
Property, plant and equipment:
Buildings, machinery and equipment 17,273
Land and mineral reserves 6,235
-------
23,508
Less accumulated depletion and depreciation 7,956
Less valuation allowance 7,729
-------
7,823
Construction in progress -
-------
7,823
Noncompete agreement 125
-------
Total assets $10,497
=======
Liabilities and Partnership Equity
Current liabilities:
Accounts payable $ 1,119
Accrued expenses 214
Intercompany line of credit and payable 10,568
Notes payable and accrued interest to related party 322
Current maturity of capital lease obligations 286
-------
Total current liabilities 12,509
Capital lease obligations, less current maturities 396
Other liabilities 12
Partnership equity (deficit) (2,420)
-------
Total liabilities and partnership equity $10,497
=======
<PAGE>
Eastern Ridge Lime, L.P.
Unaudited Statements of Operations
(Dollars in Thousands)
Nine Months ended September 30
1996 1995
------- -------
Net sales $ 4,220 $ 5,728
Cost of sales 7,179 8,034
------- -------
(2,959) (2,306)
Selling, administrative and general expenses 751 890
------- -------
Operating loss (3,710) (3,196)
Other income (expense):
Interest expense (645) (563)
Write-down of other assets - (1,005)
Other income 176 359
Other expense (424) (468)
------- -------
(893) (1,677)
------- -------
Net loss $(4,603) $(4,873)
======= =======
2
<PAGE>
Eastern Ridge Lime, L.P.
Unaudited Statements of Cash Flows
(Dollars in Thousands)
Nine Months Ended September 30,
1996 1995
------- -------
Operating activities
Net loss $(4,603) $(4,873)
Adjustments to reconcile net loss to net cash
used in operating activities:
Depreciation and depletion 1,734 1,580
Amortization 375 375
Changes in operating assets and liabilities:
Accounts receivable (254) (53)
Inventories and repair parts (149) 497
Accounts payable (328) (24)
Other assets and liabilities (430) 753
------- -------
Net cash used in operating activities (3,655) (1,745)
Investing activities
Purchase of property, plant and equipment (1,893) (1,305)
------- -------
Net cash used in investing activities (1,893) (1,305)
Financing activities
Net intercompany proceeds 112 2,987
Capital contributions from limited partner 5,100 -
------- -------
Net cash provided by financing activities 5,212 2,987
------- -------
Decrease in cash and cash equivalents (336) (63)
Cash and cash equivalents at beginning of period 458 318
------- -------
Cash and cash equivalents at end of period $ 122 $ 255
======= =======
3
<PAGE>
<TABLE>
A. P. Green Industries, Inc.
Unaudited Pro Forma Combined Statement of Financial Position
As of September 30, 1996
<CAPTION>
Eastern Total
(Dollars in thousands) A. P. Green Ridge Historical Adjustments Notes Pro Forma
- ---------------------- ----------- ------- ---------- ----------- ----- ---------
<S> <C> <C> <C> <C> <C> <C>
Cash and cash equivalents $ 5,464 $ 122 $ 5,586 $ (122) (a) $ 4,404
(1,060) (b)
Receivables, net of allowances 40,837 957 41,794 366 (a) 42,160
Inventories 52,217 1,416 53,633 (301) (a) 53,332
Other current assets 14,748 54 14,802 (51) (a) 14,751
Property, plant and equipment, net 98,418 7,823 106,241 441 (a) 106,740
58 (c)
Projected insurance recovery on asbestos claims 117,944 - 117,944 - 117,944
Other long-term assets 18,519 125 18,644 (125) (a) 18,567
48 (c)
-------- ------- -------- -------- --------
Total assets $348,147 $10,497 $358,644 $ (746) $357,898
======== ======= ======== ======== ========
Intercompany and related party accounts and notes $ - $10,890 $ 10,890 $(10,890) (a) $ -
Other current liabilities 37,884 1,619 39,503 (1,138) (a) 38,365
Projected asbestos claims 119,283 - 119,283 - 119,283
Other long-term liabilities 71,461 408 71,869 (138) (a) 80,731
9,000 (b)
-------- ------- -------- -------- --------
Total liabilities 228,628 12,917 241,545 (3,166) 238,379
Minority interests 1,502 - 1,502 - 1,502
Partnership deficit - (2,420) (2,420) 2,420 (a) -
Common stock 8,975 - 8,975 - 8,975
Additional paid-in capital 68,309 - 68,309 - 68,309
Retained earnings 61,030 - 61,030 - 61,030
Other stockholders' equity (20,297) - (20,297) - (20,297)
-------- ------- -------- -------- --------
Total liabilities and stockholders' equity $348,147 $10,497 $358,644 $ (746) $357,898
======== ======= ======== ======== ========
<FN>
Notes to Unaudited Pro Forma Combined Statements
(a) Elimination of assets not purchased and liabilities not assumed, and adjustment to reflect asset and
liability values at December 31, 1996.
(b) A cash payment of $10,059,540 was made on the date of acquisition, funded by approximately $1.1 million
of cash from operations and $9.0 million borrowed against the long-term line of credit.
(c) Adjustment of fixed assets and non-compete agreement to fair market value at December 31, 1996.
</FN>
</TABLE>
<TABLE>
1
<PAGE>
A. P. Green Industries, Inc.
Unaudited Pro Forma Combined Statements of Earnings
For the Nine Months Ended September 30, 1996
<CAPTION>
Eastern Total
(Dollars in thousands, except per share data) A. P. Green Ridge Historical Adjustments Notes Pro Forma
- --------------------------------------------- ----------- ------- ---------- ----------- ----- ---------
<S> <C> <C> <C> <C> <C> <C>
Net sales $195,720 $ 4,220 $199,940 $ -- $199,940
Cost of sales 161,927 7,179 169,106 (1,209) (d) 167,897
-------- ------- -------- ------- --------
Gross profit 33,793 (2,959) 30,834 1,209 32,043
Selling and administrative expenses 26,599 751 27,350 (126) (e) 27,224
Interest expense 2,343 645 2,988 21 (f) 3,009
Interest income (885) (27) (912) (912)
Other income, net (667) 275 (392) (392)
-------- ------- -------- ------- --------
Earnings before income taxes 6,403 (4,603) 1,800 1,314 3,114
Income tax expense (benefit) 2,307 2,307 (1,118) (h) 1,189
Other, net (816) (816) (816)
-------- ------- -------- ------- --------
Net earnings $ 4,912 $(4,603) $ 309 $ 2,432 $ 2,741
======== ======= ======== ======= ========
Net earnings per common share $ 0.61 $ (0.57) $ 0.04 $ 0.30 $ 0.34
======== ======= ======== ======= ========
<FN>
Notes to Unaudited Pro Forma Combined Statements
(d) Adjustment of depreciation, depletion and amortization expense toreflect revised asset values and lives
subsequent to the acquisition.
(e) Elimination of management service fee paid to Mississippi Lime Company by Eastern Ridge. No such fee
will be charged by A. P. Green.
(f) Elimination of interest expense related to intercompany debt to Mississippi Lime Company, offset by
interest expense on the $9.0 million borrowed to finance the acquisition at a 7.4% interest rate.
The interest rate used equals the current interest rate on the Company's line of credit as of
December 31, 1996.
(h) Income tax expense (benefit) is calculated using a 34% statutory rate. Eastern Ridge Lime was organized
as a partnership prior to the acquisition and, as such, had no direct income tax expense (benefit).
</FN>
<PAGE>
A. P. Green Industries, Inc.
Unaudited Pro Forma Combined Statements of Earnings
For the Year Ended December 31, 1995
<CAPTION>
Eastern Total
(Dollars in thousands, except per share data) A. P. Green Ridge Historical Adjustments Notes Pro Forma
- --------------------------------------------- ----------- -------- ---------- ----------- ----- ---------
<S> <C> <C> <C> <C> <C> <C>
Net sales $249,715 $ 7,107 $256,822 $ -- $256,822
Cost of sales 208,309 11,352 219,661 (1,517) (d) 218,144
-------- -------- -------- ------- --------
Gross profit 41,406 (4,245) 37,161 1,517 38,678
Selling and administrative expenses 31,312 1,627 32,939 (191) (e) 32,748
Interest expense 3,190 869 4,059 (150) (f) 3,909
Interest income (1,513) (1,513) (1,513)
Other income, net (1,948) 8,765 6,817 (8,000) (g) (1,183)
-------- -------- -------- ------- --------
Earnings before income taxes 10,365 (15,506) (5,141) 9,858 4,717
Income tax expense (benefit) 2,182 2,182 (1,920) (h) 262
Other, net (617) (617) (617)
-------- -------- -------- ------- --------
Net earnings $ 8,800 $(15,506) $ (6,706) $11,778 $ 5,072
======== ======== ======== ======= ========
Net earnings per common share $ 1.09 $ (1.92) $ (0.83) $ 1.46 $ 0.63
======== ======== ======== ======= ========
<FN>
Notes to Unaudited Pro Forma Combined Statements
(d) Adjustment of depreciation, depletion and amortization expense toreflect revised asset values and lives
subsequent to the acquisition.
(e) Elimination of management service fee paid to Mississippi Lime Company by Eastern Ridge. No such fee
will be charged by A. P. Green.
(f) Elimination of interest expense related to intercompany debt to Mississippi Lime Company, offset by
interest expense on the $9.0 million borrowed to finance the acquisition at a 7.4% interest rate.
The interest rate used equals the current interest rate on the Company's line of credit as of
December 31, 1996.
(g) In anticipation of the acquisition, Eastern Ridge adjusted the values of long-term assets to fair value
as of December 31, 1995. As this adjustment was directly attributable to the acquisition by A. P. Green,
it is eliminated for purposes of these pro forma statements as the decline in value would have been
recognized by Eastern Ridge prior to the date of acquisition.
(h) Income tax expense (benefit) is calculated using a 34% statutory rate. Eastern Ridge Lime was organized
as a partnership prior to the acquisition and, as such, had no direct income tax expense (benefit).
</FN>
</TABLE>
2
<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 thereunto duly authorized.
Dated: March 17, 1997
A. P. GREEN INDUSTRIES, INC.
By: /s/ Michael B. Cooney
-----------------------------------
Michael B. Cooney,
Senior Vice President and Secretary
<PAGE>
EXHIBIT INDEX
Exhibit
Number Description
- ------- -----------
2.1 Asset Acquisition Agreement dated December 27, 1996, by and among
APG Lime Corp., a Delaware corporation, Eastern Ridge Lime L.P., a
Delaware limited partnership and Eastern Ridge Lime, Inc., a Delaware
corporation, is incorporated herein by reference to A. P. Green's
Current Report on Form 8-K dated January 13, 1997.
23 Consent of Ernst & Young LLP
CONSENT OF ERNST & YOUNG LLP
We consent to the use of our report dated April 24, 1996, except for Note 5, as
to which the date is October 23, 1996, with respect to the financial statements
of Eastern Ridge Lime, L.P. included in the current report on Form 8-K dated
March 17, 1997 of A.P. Green Industries, Inc. and incorporated by reference in
Registration Statements (Nos. 33-21012, 33-38323 and 33-35475) on Form S-8 of
A.P. Green Industries, Inc.
St. Louis, Missouri
March 14, 1997
/s/Ernst & Young LLP