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 1, 1997
G-I HOLDINGS INC.
(Exact name of registrant as specified in its charter)
Delaware 33-26703 13-3483838
(State or other jurisdiction (Commission (IRS Employer
of incorporation) File Number) Identification No.)
818 Washington Street, Wilmington, Delaware 19801
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code (302) 429-8525
(Not applicable)
(Former name or former address, if changed since last report)
<PAGE>
Item 2. Acquisition or Disposition of Assets
On January 1, 1997, GAF Corporation ("GAF") effected a series of
transactions involving GAF's subsidiaries, including the Registrant, and
certain assets of GAF's subsidiaries that resulted among other things, in the
capital stock of ISP Holdings Inc. ("ISP Holdings"), whose principal asset is
approximately 83% of the issued and outstanding common stock of International
Specialty Products Inc. ("ISP"), being distributed to the stockholders of GAF.
As a result of such distribution, ISP Holdings and ISP are no longer direct or
indirect subsidiaries of GAF or the Registrant, while Building Materials
Corporation of America ("BMCA") and U.S. Intec, Inc. ("USI") and certain other
assets and liabilities, including liabilities for asbestos-related claims,
remain part of GAF and the Registrant, but are not assets or liabilities of ISP
Holdings.
Item 7. Financial Statements and Exhibits
(b) Pro Forma Financial Information (Unaudited)
The pro forma consolidated balance sheet gives effect to the foregoing
transactions as if they had been completed as of September 29, 1996. The pro
forma income statements give effect to such transactions as if they had been
completed as of the beginning of each respective period.
The pro forma consolidated financial statements do not purport to project
the financial position or results of operations for any future period or
represent what the financial position or results of operations would have been
if the transactions had been completed at the dates indicated.
The pro forma adjustments to the financial statements reflect the
following:
- Distribution of all shares of Common Stock of ISP owned by GAF and its
subsidiaries to ISP Holdings, and distribution of the capital stock of ISP
Holdings to the stockholders of GAF;
- Repayment by ISP of all amounts owed by it to the Registrant;
- Repurchase by the Registrant from ISP Holdings of the Registrant's Senior
Discount Notes for an aggregate cash purchase price of $45.8 million, and
a capital contribution to the Registrant by ISP Holdings of all other
Senior Discount Notes purchased by ISP Holdings in the tender offer
completed by ISP Holdings on October 18, 1996 and all of the Registrant's
10% Senior Notes accepted in the exchange offer completed by ISP Holdings
on October 18, 1996 (see Note 2), and cancellation of such notes by the
Registrant;
- Distribution by ISP Holdings to GAF of all of the outstanding capital
stock of the Registrant;
1
<PAGE>
Accordingly, the pro forma financial statements reflect a reduction of
interest expense on the Registrant's Senior Discount Notes purchased in the
tender offer and 10% Senior Notes accepted in the exchange offer, which were
purchased by or contributed to the Registrant; reinstatement of sales made by
ISP to BMCA and USI; reversal of a related profit-in-ending-inventory
elimination entry no longer required; reinstatement of intercompany interest
expense and income; and the transfer by the Registrant to ISP Holdings of
foreign tax credit carryovers not utilized in the Registrant's 1996
consolidated tax return (estimated to be approximately $16 million).
2
<PAGE>
G-I HOLDINGS INC.
PRO FORMA CONSOLIDATED STATEMENTS OF INCOME (UNAUDITED)
Nine Months Ended
Year Ended December 31, ------------------
---------------------------- Oct. 1, Sept. 29,
1993 1994 1995 1995 1996
--------- --------- --------- --------- ---------
(Thousands)
Net sales.................... $559,152 $593,147 $687,184 $507,661 $648,426
-------- -------- -------- -------- --------
Costs and expenses:
Cost of products sold...... 402,823 424,664 506,731 370,291 471,232
Selling, general and
administrative........... 115,545 124,357 136,738 100,644 128,211
-------- -------- -------- -------- --------
Total costs and expenses. 518,368 549,021 643,469 470,935 599,443
-------- -------- -------- -------- --------
Operating income............. 40,784 44,126 43,715 36,726 48,983
Interest expense............. (45,184) (49,638) (66,997) (49,863) (54,080)
Other income, net............ 35,374 47,218 36,348 28,096 22,137
-------- -------- -------- -------- --------
Income from continuing
operations before income
taxes and extraordinary
item....................... 30,974 41,706 13,066 14,959 17,040
Income taxes:
Current year provision..... (10,804) (17,110) (5,518) (5,630) (6,856)
Adjustment of deferred tax
assets for change in tax
rate..................... 730 - - - -
-------- -------- -------- -------- --------
Income from continuing
operations before
extraordinary item......... $ 20,900 $ 24,596 $ 7,548 $ 9,329 $ 10,184
======== ======== ======== ======== ========
3
<PAGE>
G-I HOLDINGS INC.
PRO FORMA CONSOLIDATED BALANCE SHEET (UNAUDITED)
AS OF SEPTEMBER 29, 1996
(Thousands)
ASSETS
Current assets:
Cash..................................................... $ 80,200
Investments in trading securities........................ 435
Investments in available-for-sale securities............. 44,486
Investments in held-to-maturity securities............... 10,376
Accounts receivable...................................... 73,401
Due from affiliate, net.................................. 28,908
Insurance receivable..................................... 36,483
Inventories.............................................. 80,879
Other current assets..................................... 28,127
----------
Total current assets....................................... 383,295
Investment in limited partnership.......................... 450,000
Property, plant and equipment, net......................... 218,825
Excess of cost over net assets of businesses acquired...... 47,872
Insurance receivable....................................... 180,695
Other assets............................................... 34,588
----------
Total assets............................................... $1,315,275
==========
LIABILITIES AND SHAREHOLDER'S EQUITY
Current liabilities:
Short-term debt and current maturities of long-term debt. $ 3,382
Accounts payable......................................... 57,352
Accrued liabilities...................................... 63,282
Reserve for asbestos claims.............................. 86,505
----------
Total current liabilities.................................. 210,521
----------
Long term debt less current maturities..................... 778,219
----------
Deferred taxes............................................. 105,787
----------
Reserve for asbestos claims................................ 271,246
----------
Other liabilities.......................................... 111,345
----------
Commitments and contingencies..............................
Shareholder's equity:
Common stock, $.01 par value per share; 1,000 shares
authorized: 100 shares issued and outstanding......... -
Additional paid-in capital............................... -
Excess of purchase price over the adjusted historical
cost of the predecessor company shares owned by
GAF's stockholders..................................... (9,122)
Retained earnings........................................ (150,084)
Other.................................................... (2,637)
----------
Shareholder's equity................................... (161,843)
----------
Total liabilities and shareholder's equity................. $1,315,275
==========
4
<PAGE>
G-I HOLDINGS INC.
NOTES TO PRO FORMA FINANCIAL STATEMENTS
Note 1. Spin Off Transactions
Prior to August 6, 1996, the Registrant was a wholly-owned subsidiary of
GAF Corporation ("GAF"). ISP Holdings Inc. ("ISP Holdings"), a wholly-owned
subsidiary of GAF, was formed on August 6, 1996 and 10 shares of its common
stock were issued to GAF in exchange for all of the capital stock of the
Registrant, which resulted in the Registrant becoming a direct wholly-owned
subsidiary of ISP Holdings.
As of January 1, 1997, GAF effected a series of transactions (the "Spin
Off Transactions") involving its subsidiaries that resulted in, among other
things (i) approximately 83% of the issued and outstanding Common Stock (the
"ISP Stock") of International Specialty Products ("ISP") being distributed to
ISP Holdings and (ii) the capital stock of ISP Holdings (whose principal asset
is approximately 83% of the ISP Stock) being distributed to the stockholders of
GAF. As a result of such distribution, ISP Holdings and ISP are no longer
direct or indirect subsidiaries of GAF or the Registrant, and the assets and
liabilities of other wholly-owned subsidiaries of the Registrant, including
Building Materials Corporation of America, U.S. Intec, Inc. and GAF Fiberglass
Corporation (formerly known as GAF Chemicals Corporation) are no longer assets
and liabilities of ISP Holdings.
Accordingly, the results of operations and assets and liabilities of ISP,
as well as GAF Broadcasting Company, Inc. (which was sold in August 1996), have
been removed from continuing operations within the pro forma financial
statements for all periods presented.
Note 2. Long-term Debt
On October 18, 1996, ISP Holdings concluded a cash tender offer and
consent solicitation for the Registrant's outstanding Senior Discount Notes.
Pursuant to the tender offer, $346.9 million aggregate accreted amount of the
Registrant's Senior Discount Notes were purchased by ISP Holdings and $122.6
million aggregate accreted amount of such Discount Notes were subsequently
repurchased by the Registrant from ISP Holdings. ISP Holdings also concluded
an offer to exchange its new Senior Notes due February 15, 2002 for the
Registrant's Senior Notes. Pursuant to the exchange offer, $199.9 million of
the Registrant's Senior Notes were acquired by ISP Holdings.
Upon consummation of the Spin Off Transactions, all of the Registrant's
Senior Discount Notes and Senior Notes then held by ISP Holdings were either
purchased by the Registrant from ISP Holdings or were contributed to the
Registrant, and were canceled.
5
<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.
G-I Holdings, Inc.
(Registrant)
Date: January 10, 1997 By: /s/ James P. Rogers
---------------- -----------------------------
James P. Rogers
Executive Vice President and
Chief Financial Officer
Date: January 10, 1997 By: /s/ Jonathan H. Stern
---------------- -----------------------------
Jonathan H. Stern
Vice President and Controller
6
