SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 8-K/A
CURRENT REPORT
PURSUANT TO SECTION 13 OR 15(D) OF THE
SECURITIES EXCHANGE ACT OF 1934
JANUARY 21, 1999
Date of Report (Date of earliest event reported)
UNIROYAL CHEMICAL COMPANY, INC.
(Exact name of registrant as specified in charter)
NEW JERSEY 33-66740 06-1148490
(State or other (Commission file number) (IRS employer identification no.)
jurisdiction of
incorporation)
BENSON ROAD, MIDDLEBURY, CONNECTICUT 06749
(Address of principal executive offices) (Zip Code)
(203) 573-2000
(Registrant's telephone number, including area code)
The Registrant is not required by Section 13 or 15(d) of the Securities
Exchange Act of 1934 ("Exchange Act") to file this report, which is being
filed to comply with certain provisions of the indentures applicable to two
series of outstanding public debt of the Registrant.
* * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * *
ITEM 2. ACQUISITION OR DISPOSITION OF ASSETS.
On November 20, 1998, Crompton & Knowles Corporation ("C&K") and Bayer
AG, Germany, represented by its United States subsidiary, Bayer Corporation
("Bayer") concluded agreements to form joint ventures to serve the
agricultural seed treatment markets in Canada, Mexico and the United States.
The business previously operated by Gustafson, Inc. ("Gustafson"), a unit of
the Registrant, a wholly owned subsidiary of C & K, forms the basis of
the 50/50 joint ventures. Bayer acquired its 50 percent interest in the seed
treatment joint ventures for $180 million. The U.S. joint venture will be
headquartered in Plano, Texas under the former Gustafson management.
The transaction resulted in a pre-tax gain to the Registrant of
approximately $150 million after giving effect to net assets transferred of
approximately $25 million and certain closing costs.
The crop protection businesses of the Registrant and Bayer will continue
to operate independently, except for these seed treatment joint ventures.
ITEM 5. OTHER EVENTS.
On December 9, 1998, Uniroyal Chemical Corporation, a Delaware
corporation, was merged with and into the Registrant, with the Registrant
being the surviving corporation ("Merger"). The Registrant was a wholly owned
subsidiary of Uniroyal Chemical Corporation which was a wholly owned
subsidiary of C & K. Prior to the Merger, the Registrant and Uniroyal
Chemical Corporation were each separate registrants making joint filings with
the Securities and Exchange Commission.
ITEM 7. FINANCIAL STATEMENTS AND EXHIBITS.
(b) (1) Pro Forma Financial Information (Unaudited)
(i) Unaudited Pro Forma Financial information reflecting the
agreements between C & K and Bayer as discussed in Item 2
above.
(ii) Unaudited Pro Forma Condensed Consolidated Statement of
Earnings for the nine months ended September 26, 1998.
(iii) Unaudited Pro Forma Condensed Consolidated Balance Sheet for
the nine months ended September 26, 1998.
(iv) Unaudited Pro Forma Condensed Consolidated Statement of
Earnings for the year ended December 27, 1997.
(v) Accompanying Notes to Unaudited Pro Forma Condensed
Consolidated Financial Statements.
(c) Exhibits. The exhibit number set forth below corresponds to
the number assigned to such exhibit in the Exhibit Table to
Regulation S-K of the Exchange Act.
Exhibit Number Description
2.1 Limited Liability Company Agreement by and
between Gustafson, Inc. and Trace Chemicals,
Inc., effective as of September 23, 1998
(incorporated by reference to Exhibit 2.1 of the
Current Report on Form 8-K/A of Crompton &
Knowles Corporation dated January 21, 1999 ["C &
K Form 8K/A"])
2.2 First Amendment to Limited Liability Company
Agreement by and among GT Seed Treatment Inc.
(f/k/a Gustafson, Inc.), Ecart Inc.(f/k/a Trace
Chemicals, Inc.) and Bayer Corporation, dated as
of November 20, 1998 (incorporated by reference
to Exhibit 2.2 of the C & K Form 8K/A)
2.3 Purchase Agreement by and among C & K, the
Registrant, Trace Chemicals, Inc. and Gustafson,
Inc., as Sellers, and Bayer Corporation, as
Purchaser, and Gustafson LLC, as the Company,
dated as of November 20, 1998 (incorporated by
reference to Exhibit 2.3 of the C & K Form 8K/A)
2.4 Purchase Agreement by and between Uniroyal
Chemical Co./Cie and Bayer Inc., effective as of
November 20, 1998 (incorporated by reference to
Exhibit 2.4 of the C & K Form 8K/A)
2.5 Partnership Agreement of Gustafson Partnership
by and between Uniroyal Chemical Co./Cie and
Bayer Inc., effective as of November 20, 1998
(incorporated by reference to Exhibit 2.5 of the
C & K Form 8K/A)
- 2 -
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.
Uniroyal Chemical Company, Inc.
January 21, 1999 By: /s/John T. Ferguson II
John T. Ferguson II
Vice President and
General Counsel
- 3 -
Uniroyal Chemical Company, Inc.
Item 7(b)(1) Pro Forma Financial Information (Unaudited)
The following unaudited pro forma financial information is
based on the historical condensed consolidated financial
statements of the Registrant giving effect to the terms of the
agreement between Crompton & Knowles Corporation ("Parent") and
Bayer AG Germany represented by its United States subsidiary,
Bayer Corporation to form joint ventures to serve the
agricultural seed treatment markets in Canada, Mexico and the
United States as discussed in item 2. The unaudited pro forma
financial statements and accompanying notes may not be
indicative of the results that actually would have occurred if
the transaction had taken place on the dates indicated nor do
they represent a basis for assessing future performance. The
unaudited pro form financial statements should be used in
conjunction with the historical statements of the Registrant.
The unaudited pro forma condensed consolidated statements of
earnings for the year ended December 27, 1997, and the nine
months ended September 26, 1998, have been prepared on the
assumption that the transaction had occurred at the beginning
of the fiscal year of the Registrant. The principal
adjustments relate to: (1) the recognition of the
deconsolidation of the seed treatment business, (2)the
recognition of equity in earnings from a 50 percent investment
in the seed treatment joint ventures. The unaudited pro forma
condensed consolidated statements of earnings do not include
the non-recurring pre-tax gain of $150 million or benefits from
the use of proceeds from the transaction.
The unaudited pro forma condensed consolidated balance sheet
at September 26, 1998, has been prepared on the assumption that
the transaction had occurred on September 26, 1998. The
principal adjustments relate to: (1) the recognition of the
deconsolidation of the balance sheets related to the seed
treatment business and the capitalization of the Registrant's
50 percent investment in the seed treatment joint ventures, (2)
the recording of costs related to the transaction, (3) the
recognition of the proceeds of $180 million.
<TABLE>
UNIROYAL CHEMICAL COMPANY, INC.
Pro Forma Condensed Consolidated Statement of Earnings
Nine months ended September 26, 1998 (Unaudited)
(In thousands of dollars)
Nine Months
Ended
September 26 Pro Forma Adjustments
1998 1 2 Total
<S> <C> <C> <C> <S> <C>
Net Sales $949,777 ($77,132) $ - $872,645
Cost of products sold 563,281 (37,005) - 526,276
Selling, general and
administrative 137,789 (13,871) - 123,918
Depreciation and amortization 49,835 (2,720) - 47,115
Research and development 30,755 (3,472) - 27,283
Operating profit 168,117 (20,064) - 148,053
Interest expense 65,983 - - 65,983
Other income (2,106) (24) (9,665) (11,795)
Earnings before income
taxes and extraordinary loss 104,240 (20,040) 9,665 93,865
Provision for income taxes 39,056 (7,615) 3,673 35,114
Earnings before
extraordinary loss 65,184 (12,425) 5,992 58,751
Extraordinary loss on early
extinguishment of debt (21,651) - - (21,651)
Net earnings $43,533 ($12,425) $5,992 $37,100
</TABLE>
Uniroyal Chemical Company, Inc.
Notes To Pro Forma Condensed Consolidated Statement of Earnings
Nine Months ended September 26, 1998 (Unaudited)
(1) To recognize the deconsolidation of the seed treatment business
per the joint ventures conducted with Bayer Corporation.
(2) To record the equity in earnings from a 50 percent investment in
the seed treatment joint ventures.
<TABLE>
UNIROYAL CHEMICAL COMPANY, INC.
Pro Forma Condensed Consolidated Balance Sheet
September 26, 1998 (Unaudited)
(In thousands of dollars)
September 26, Pro Forma Adjustments Pro Forma
ASSETS 1998 1 2 3 Results
<S> <C> <C> <S> <C> <S> <C> <C>
Cash $2,798 $ - $ - $180,000 $182,798
Accounts receivable 180,853 (7,924) - - 172,929
Inventories 232,695 (20,971) - - 211,724
Other current asset 52,023 (489) - - 51,534
Total current
assets 468,369 (29,384) - 180,000 618,985
NON-CURRENT ASSETS
Property, plant
and equipment 372,548 (4,812) - - 367,736
Costs in excess of
acquired net asset 124,936 (11,619) - - 113,317
Other assets 220,643 5,436 - - 226,079
$1,186,496 ($40,379) $ - $180,000 $1,326,117
LIABILITIES AND STOCKHOLDERS' EQUITY (DEFICIT)
CURRENT LIABILITIES
Notes payable $10,495 $ - $ - $ - $10,495
Accounts payable 98,678 (10,286) - - 88,392
Accrued expenses 93,641 (2,285) 3,380 - 94,736
Income taxes payable 32,567 - - 60,100 92,667
Total current
liabilities 235,381 (12,571) 3,380 60,100 286,290
NON-CURRENT LIABILITIES
Long-term debt 474,638 - - - 474,638
Postretirement health
care liability 140,630 (1,188) - - 139,442
Due to Parent 373,975 - - - 373,975
Other liabilities 139,904 - - - 139,904
STOCKHOLDERS' EQUITY (DEFICIT)
Additional
paid-in capital 173,930 - - - 173,930
Accumulated deficit (320,580) (26,620) (3,380) 119,900 (230,680)
Accumulated translation
adjustment (28,622) - - - (28,622)
Pension liability
adjustment (2,760) - - - (2,760)
Total stockholders'
deficit (178,032) (26,620) (3,380) 119,900 (88,132)
$1,186,496 ($40,379) $0 $180,000 $1,326,117
</TABLE>
Uniroyal Chemical Company, Inc.
Notes To Pro Forma Condensed Consolidated Balance Sheet
September 26, 1998 (Unaudited)
(1) To deconsolidate the balance sheets related to the seed treatment
business and record the capitalization of the Registrant's 50
percent investment in the seed treatment joint ventures.
(2) To record costs related to the transaction.
(3) To record the investment of the proceeds from the transaction,
and the applicable tax liability.
<TABLE>
UNIROYAL CHEMICAL COMPANY, INC.
Pro Forma Condensed Consolidated Statement of Earnings
Year ended December 27, 1997 (Unaudited)
(In thousands of dollars)
Year Ended
December 27, Pro Forma Adjustments
1997 1 2 Total
<S> <C> <C> <C> <S> <C>
Net Sales $1,183,289 ($100,939) $ - $1,082,350
Cost of products sold 727,102 (49,518) - 677,584
Selling, general and
administrative 165,852 (15,633) - 150,219
Depreciation and
amortization 63,780 (3,623) - 60,157
Research and development 40,699 (5,138) - 35,561
Severance and other cost 10,000 - - 10,000
Special environmental
charge 13,500 - - 13,500
Operating profit 162,356 (27,027) - 135,329
Interest expense 96,011 (51) - 95,960
Other income (26,541) (177) (12,980) (39,698)
Earnings before income
taxes and extraordinary
loss 92,886 (26,799) 12,980 79,067
Provision for income taxes 35,323 (10,184) 4,932 30,071
Earnings before
extraordinary loss 57,563 (16,615) 8,048 48,996
Extraordinary loss on early
extinguishment of debt (4,958) - - (4,958)
Net earnings $52,605 ($16,615) $8,048 $44,038
</TABLE>
Uniroyal Chemical Company, Inc.
Notes To Pro Forma Condensed Consolidated Statement of Earnings
Year ended December 27, 1997 (Unaudited)
(1) To recognize the deconsolidation of the seed treatment business
per the joint ventures conducted with Bayer Corporation.
(2) To record the equity in earnings from a 50 percent investment in
the seed treatment joint ventures.
