<PAGE>
UNITED STATES SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 10-Q
[ X ] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(D) OF THE SECURITIES
EXCHANGE ACT OF 1934
For the quarterly period ended June 28, 1997
OR
[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(D) OF THE SECURITIES
EXCHANGE ACT OF 1934
For the transition period from ____ to ____
Commission file number 1-11240
MAFCO CONSOLIDATED GROUP INC.
- -------------------------------------------------------------------------------
(Exact name of registrant as specified in its charter)
DELAWARE 02-0424104
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
- -------------------------------------------------------------------------------
35 EAST 62ND STREET, NEW YORK, NEW YORK 10021
(Address of principal executive offices) (Zip Code)
212-572-8600
- -------------------------------------------------------------------------------
(Registrant's telephone number, including area code)
Indicate by check mark whether the registrant (1) has filed all reports
required to be filed by Section 13 or 15(d) of the Securities Exchange Act of
1934 during the preceding 12 months (or for such shorter period that the
registrant was required to file such reports), and (2) has been subject to
such filing requirements for the past 90 days. Yes [X] No [ ]
Indicate the number of shares outstanding of each of the
issuer's classes of common stock as of
the latest practicable date.
Class Outstanding at August 11, 1997
- ---------------------------- ------------------------------
Common Stock, $1.00 par 1,000
As of August 11, 1997, all of the Registrant's outstanding common
stock was indirectly held by Mafco Holdings Inc.
<PAGE>
MAFCO CONSOLIDATED GROUP INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF INCOME
(IN THOUSANDS, EXCEPT SHARE DATA)
(UNAUDITED)
<TABLE>
<CAPTION>
SIX MONTH THREE MONTH
PERIODS ENDED PERIODS ENDED
--------------------------- --------------------
JUNE 28, JUNE 30, JUNE 28, JUNE 30,
1997 1996 1997 1996
--------- --------- -------- --------
<S> <C> <C> <C> <C>
Net sales $ 132,265 $144,745 $76,377 $ 78,577
Cost of sales 74,193 82,667 42,935 44,365
--------- ------- -------- --------
Gross profit 58,072 62,078 33,442 34,212
Selling, general and
administrative expenses 30,640 27,506 12,290 15,303
--------- ------- -------- --------
Operating income 27,432 34,572 21,152 18,909
Interest expense (6,367) (12,836) (3,277) (6,537)
Interest and investment income 10,153 3,440 4,838 1,566
Amortization of deferred charges
and bank fees (493) (1,008) (271) (509)
Gain on Cigar Secondary Offering 110,811 -- -- --
Equity in earnings from
continuing operations and
preferred dividends of M&F
Worldwide 3,745 1,466 1,879 1,096
Mark-to-market of VSR obligation 7,359 -- 7,359 --
Other (expense) income, net (110) (220) 19 (301)
--------- ------- -------- --------
Income from continuing
operations before income taxes
and minority interests 152,530 25,414 31,699 14,224
Provision for income taxes (50,763) (7,747) (9,441) (4,272)
Minority interests in earnings
of subsidiaries (6,885) (141) (5,003) (66)
--------- ------- -------- --------
Income from continuing operations 94,882 17,526 17,255 9,886
Discontinued operations
Equity in earnings from
discontinued operations of M&F
Worldwide, net of
taxes of $1,721 and $1,360 -- 14,668 -- 13,997
--------- ------- -------- --------
Net income $ 94,882 $32,194 $ 17,255 $ 23,883
========= ======= ======== ========
Income per common share and common
share equivalents:
Continuing operations $ 4.08 $ 0.76 $ 0.74 $ 0.43
Discontinued operations -- 0.63 -- 0.60
--------- ------- -------- --------
Net income $ 4.08 $ 1.39 $ 0.74 $ 1.03
========= ======= ======== ========
Weighted average common shares
outstanding (in thousands) 23,237 23,237 23,237 23,237
</TABLE>
See notes to consolidated financial statements.
2
<PAGE>
MAFCO CONSOLIDATED GROUP INC. AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
(IN THOUSANDS, EXCEPT SHARE DATA)
(UNAUDITED)
<TABLE>
<CAPTION>
JUNE 28, DECEMBER 31,
ASSETS 1997 1996
-------- ------------
<S> <C> <C>
Current assets:
Cash and cash equivalents $ 8,805 $ 6,222
Trading securities 245,837 409,605
Notes and trade receivables, net 27,516 19,498
Inventories 59,882 45,957
Other 24,265 25,396
-------- --------
Total current assets 366,305 506,678
Property, plant and equipment, net 38,057 37,277
Pension asset 66,773 62,738
Investment in M&F Worldwide preferred
and common stock 16,682 12,996
Trademarks, net 30,722 31,155
Intangible assets related to businesses
acquired, net 58,920 59,723
Other assets 70,382 58,934
======== ========
$647,841 $769,501
======== ========
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Accounts payable $ 6,834 $ 7,323
Accrued expenses and other 133,054 100,847
-------- --------
Total current liabilities 139,888 108,170
Long-term debt 103,800 97,500
Deferred income taxes 6,281 36,109
Minority interests in subsidiaries 9,323 1,007
Other liabilities 165,419 166,223
Commitments and contingencies
Stockholders' equity:
Common stock, par value $.01 per
share, 250,000,000 shares
authorized, 24,722,190 shares
issued in 1997 and 1996 247 247
Additional paid-in-capital 167,105 167,105
Retained earnings 85,681 223,043
Treasury stock at cost (1,484,850 shares) (29,903) (29,903)
-------- --------
Total stockholders' equity 223,130 360,492
======== ========
$647,841 $769,501
======== ========
</TABLE>
See notes to consolidated financial statements.
3
<PAGE>
MAFCO CONSOLIDATED GROUP INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS
(IN THOUSANDS)
(UNAUDITED)
<TABLE>
<CAPTION>
SIX MONTH PERIODS ENDED
-----------------------
JUNE 28, JUNE 30,
1997 1996
--------- ---------
<S> <C> <C>
CASH FLOWS FROM OPERATING ACTIVITIES:
Net income $ 94,882 $ 32,194
--------- ---------
Adjustments to reconcile net income to net cash flows
provided by operating activities:
Depreciation and amortization 3,764 5,131
Gain on Cigar Secondary Offering (110,811) -
Equity in earnings of M&F Worldwide (2,945) (17,855)
Minority interests in earnings of subsidiaries 6,885 141
Changes in assets and liabilities:
Decrease in trading securities 163,768 -
Increase in notes and trade receivables (8,018) (6,144)
Increase in inventories (13,925) (1,627)
(Decrease) increase in accounts payable (489) 1,339
(Decrease) increase in taxes
payable and other, net (13,780) 2,017
--------- ---------
24,449 (16,998)
---------- ----------
Net cash flows provided by operating activities 119,331 15,196
---------- ----------
CASH FLOWS FROM INVESTING ACTIVITIES
Net proceeds from Cigar Secondary Offering 112,400 -
Capital expenditures (2,815) (4,107)
Other, net - (368)
---------- ----------
Net cash flows provided by (used for)
investing activities 109,585 (4,475)
---------- ----------
CASH FLOWS FROM FINANCING ACTIVITIES
Proceeds from borrowings 9,200 1,000
Repayment of borrowings (2,900) (6,940)
Cash dividend paid (232,244) -
Due to affiliates and other, net (389) 1,308
---------- ----------
Net cash used for financing activities (226,333) (4,632)
---------- ----------
Net increase in cash and cash equivalents 2,583 6,089
Cash and cash equivalents at beginning of period 6,222 93,417
---------- ----------
Cash and cash equivalents at end of period $ 8,805 $ 99,506
========== ==========
SUPPLEMENTAL SCHEDULE OF CASH FLOW INFORMATION
Interest paid $ 5,733 $ 13,013
Income taxes paid 46,897 2,876
</TABLE>
See notes to consolidated financial statements
4
<PAGE>
MAFCO CONSOLIDATED GROUP INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(IN THOUSANDS, EXCEPT SHARE DATA)
(UNAUDITED)
1. BASIS OF PRESENTATION
The accompanying unaudited consolidated financial statements of Mafco
Consolidated Group Inc. ("MC Group" or the "Company") have been prepared in
accordance with generally accepted accounting principles for interim financial
information. Accordingly, they do not include all of the information and
footnotes required for complete financial statements. In the opinion of
management, all adjustments (consisting only of normal recurring accruals)
considered necessary for a fair presentation have been included. The
statements should be read in conjunction with the consolidated financial
statements included in the Company's annual report on Form 10-K for the year
ended December 31, 1996. All terms used but not defined elsewhere herein have
the meanings ascribed to them in the Company's annual report on Form 10-K (the
"1996 10-K"). Certain reclassifications have been made to conform to the
current period's presentation. The results of operations for the three and six
month periods ended June 28, 1997 and June 30, 1996 are not necessarily
indicative of the results for the entire year.
2. INVENTORIES
June 28, December 31,
1997 1996
--------- ------------
Raw materials and supplies $ 39,848 $ 34,469
Work-in-progress 3,479 1,974
Finished goods 16,555 9,514
--------- ---------
$ 59,882 $ 45,957
========= =========
3. MERGER AGREEMENT
On February 20, 1997, Mafco Consolidated Holdings Inc. ("MC Holdings"),
the direct parent and 85% owner of MC Group, entered into an Agreement and
Plan of Merger (the "1997 Merger Agreement") with MC Group whereby MC Holdings
agreed to buy the remaining 15% of MC Group that it does not already own.
Pursuant to the 1997 Merger Agreement on July 9, 1997, each outstanding share
of MC Group common stock (other than shares held by MC Holdings) was converted
into the right to receive $33.50 per share in cash (the "Merger
Consideration"). The total Merger Consideration, including shares not yet
converted, was $115,900. Additionally, on February 20, 1997, in connection
with the 1997 Merger Agreement, MC Group declared a special cash dividend of
$10 per share which was paid on March 14, 1997 to stockholders of record as of
the close of business on March 10, 1997. In addition, pursuant to the 1997
Merger Agreement the Company made cash payments aggregating $38,800 during
July 1997 in respect of outstanding stock options.
5
<PAGE>
MAFCO CONSOLIDATED GROUP INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(IN THOUSANDS, EXCEPT SHARE DATA)
(UNAUDITED)
4. SECONDARY OFFERING
On March 26, 1997, Consolidated Cigar Holdings Inc. ("Cigar Holdings")
completed a public offering of 5,000,000 shares of the Cigar Common Stock at
an offering price of $23.75 per share (the "Cigar Secondary Offering"). All of
the shares sold were owned by MC Group. The proceeds from the Cigar Secondary
Offering, net of underwriter's discount and related fees and expenses, were
$112,400 and resulted in a pre-tax gain to the Company of $110,811. As a
result of the Cigar Secondary Offering, MC Group's ownership in Cigar Holdings
was reduced to approximately 64%.
5. 1997 KOLL AGREEMENTS
In connection with the 1992 Distribution, Abex and Henley allocated
between them certain liabilities related to the businesses of Henley or its
predecessors, including certain liabilities relating to self-insurance
programs, and each indemnified the other against loss associated with
liabilities assumed by the indemnifying party. In addition, Abex guaranteed
certain contingent obligations of Koll relating to a predecessor company
pension plan and environmental liabilities of Henley and certain of its
predecessors, and Koll agreed to indemnify Abex in respect thereof. During the
first quarter of 1997, the Company, Koll and certain of its subsidiaries
entered into certain agreements (the "1997 Koll Agreements"), the material
terms of which provide for a re-allocation of the liabilities relating to the
self-insurance programs, the Company to assume sponsorship of, and financial
responsibility for, the predecessor company's pension plan referred to above
which had a projected benefit obligation in excess of plan assets of $11,587
at March 31, 1997, the Company to pay to Koll $2,289, the Company to keep $500
from a third party in connection with the sale of an asset by Koll and the
assumption by the Company of the Pullman Claims (as described below). In
connection with the 1997 Koll Agreements, the Company recorded a charge of
$7,600 in the first quarter of 1997. Koll has been discharging its assumed and
indemnification responsibilities in the ordinary course. Based on (i) the
Company's balance sheet reserves as of June 28, 1997 which include recognition
of the full pension plan underfunding as of such date and reserves for each
remaining category of the Company's self-insurance obligations to Koll and
(ii) currently available information, including information filed with the
Securities and Exchange Commission and the EPA regarding such environmental
liabilities, the Company believes that liability for the discharge of the
Company's remaining obligations with respect to all of the matters described
in this paragraph, including its guarantee and indemnification obligations,
will not have a material adverse effect on its financial position or results
of operations even if Koll's financial circumstances were to cause Koll to
stop discharging its responsibilities.
In addition, in connection with the 1997 Koll Agreements, the Company
agreed to assume whatever liability, if any, Koll or certain of its
subsidiaries may have with respect to personal injury claims arising out of
the operations of either the passenger rail car business of Pullman
Incorporated ("Pullman"), a predecessor of Koll and the Company, or the
business of Pullman Passenger Car Company, a subsidiary of Koll (collectively,
the "Pullman Claims"). Koll also transferred to the Company all of the rights
that Koll and such subsidiaries may have against Wheelabrator Technologies
Inc., another predecessor of Koll and the Company, with respect to the Pullman
Claims. As of the date of the Company's assumption of the Pullman Claims, Koll
was defending approximately 360 claims
6
<PAGE>
MAFCO CONSOLIDATED GROUP INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(IN THOUSANDS, EXCEPT SHARE DATA)
(UNAUDITED)
that individuals had contracted asbestos-related diseases by reason
of their work maintaining or repairing Pullman cars. Management believes that
costs related to these approximately 360 claims will not have a material
adverse effect on the Company.
6. INCOME PER COMMON SHARE
Income per common share has been computed based on 23,237 weighted
average shares outstanding in the 1997 and 1996 periods. The effect of stock
options was not materially dilutive.
7
<PAGE>
MAFCO CONSOLIDATED GROUP INC. AND SUBSIDIARIES
MANAGEMENT'S DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS
(DOLLARS IN MILLIONS, EXCEPT SHARE DATA)
RESULTS OF OPERATIONS
The discussion of historical results below includes the results of the
Company's cigar business for all periods presented and the results of Flavors'
licorice extract and other flavoring agents business, which was sold November
25, 1996 (the "Flavors Disposition"), in the three and six month periods ended
June 29, 1996.
Three month period ended June 28, 1997 compared with the three month period
ended June 30, 1996
Net sales in 1997 and 1996 were $76.4 and $78.6, respectively, a
decrease of $2.2 or 2.8%. The decrease in sales reflects a decrease of $26.6
due to the Flavors Disposition partially offset by an increase in net sales by
Cigar of $24.4. Cigar sales increased as a result of both a shift in the sales
mix to higher priced cigars and price increases on certain cigar brands and,
to a lesser extent, an increase in cigar unit volume, particularly in the
premium market.
Gross profit was $33.4 and $34.2 in 1997 and 1996, respectively, a
decrease of $0.8 or 2.3%. The decrease in gross profit in 1997 reflects a
decrease of $12.3 due to the Flavors Disposition partially offset by an
increase of $11.5 in the gross profit of Cigar. The increase in gross profit
of Cigar was due to the increase in sales, partially offset by increases in
the costs of raw materials. As a percentage of net sales, Cigar's gross profit
increased to 43.8% in 1997 from 42.1% in 1996 primarily due to the impact of
price increases and fixed manufacturing costs spread over increased production
volume.
Selling, general and administrative ("SG&A") expenses were $12.3 and
$15.3 in 1997 and 1996, respectively. The decrease in SG&A reflects a decrease
of $2.5 due to the Flavors Disposition and a decrease in corporate expenses of
MC Group, partially offset by an increase in selling expenses and professional
fees of Cigar.
Interest expense was $3.3 and $6.5 in 1997 and 1996, respectively. The
decrease was primarily due to the Flavors Disposition.
Interest and investment income was $4.8 and $1.6 in 1997 and 1996,
respectively. The increase primarily reflects interest income on the cash
proceeds received from the Cigar IPO, the Cigar Secondary Offering and the
Flavors Disposition, a portion of which was used to fund the special dividend
paid in March 1997.
Equity in earnings from continuing operations and preferred dividends of
M&F Worldwide Corp. ("M&F Worldwide", formerly Power Control Technologies
Inc.) represents the Company's common equity interest in M&F Worldwide's
continuing operations and preferred dividends received on the Company's
investment in M&F Worldwide Preferred Stock.
The mark-to-market income of $7.4 in 1997 reflects the decrease in the
closing market price of the VSR obligation in the second quarter of 1997. The
Company's VSR obligation is marked to the
8
<PAGE>
MAFCO CONSOLIDATED GROUP INC. AND SUBSIDIARIES
MANAGEMENT'S DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS
(DOLLARS IN MILLIONS, EXCEPT SHARE DATA)
closing market price of the security at each financial statement date. As a
result, income or expense may result from future mark-to-market adjustments.
Equity in discontinued operations of M&F Worldwide (which were sold in
April 1996), net of income taxes, represents the Company's common equity
interest in M&F Worldwide's discontinued operations in 1996.
The provision for income taxes as a percentage of income from continuing
operations before income taxes and minority interests was 29.8% in 1997 and
30.0% in 1996. The decrease in the effective rate is primarily due to the
higher tax rate on Flavors' operations in 1996 and the tax benefits associated
with the Company's operations in Puerto Rico partially offset by an increase
in income subject to the United States taxation during 1997. Income tax
expense in 1997 and 1996 reflects provisions for federal income taxes, Puerto
Rico tollgate taxes and taxes on Puerto Rico source income, together with
state and franchise taxes.
Six month period ended June 28, 1997 compared with the six month period
ended June 30, 1996
Net sales in 1997 and 1996 were $132.3 and $144.7, respectively, a
decrease of $12.4 or 8.6%. The decrease in sales reflects a decrease of $52.7
due to the Flavors Disposition partially offset by an increase in net sales by
Cigar of $40.1. Cigar sales increased as a result of both a shift in the sales
mix to higher priced cigars and price increases on certain cigar brands and,
to a lesser extent, an increase in cigar unit volume, particularly in the
premium market.
Gross profit was $58.1 and $62.1 in 1997 and 1996, respectively, a
decrease of $4.0 or 6.4%. The decrease in gross profit in 1997 reflects a
decrease of $23.3 due to the Flavors Disposition partially offset by an
increase of $19.3 in gross profit of Cigar. The increase in gross profit of
Cigar was due to the increase in sales, partially offset by increases in the
costs of raw materials. As a percentage of net sales, Cigar's gross profit
increased to 43.9% in 1997 from 42.1% in 1996 primarily due to the impact of
price increases and fixed manufacturing costs spread over increased production
volume.
SG&A expenses were $30.6 and $27.5 in 1997 and 1996, respectively. The
increase in SG&A in 1997 primarily reflects a non-cash charge of $7.6 related
to the 1997 Koll Agreements (see Note 5) and an increase in selling expenses
and professional fees of Cigar partially offset by a decrease of $4.9 due to
the Flavors Disposition and a decrease in corporate expenses of MC Group.
Interest expense was $6.4 and $12.8 in 1997 and 1996, respectively. The
decrease was primarily due to the Flavors Disposition.
Interest and investment income was $10.2 and $3.4 in 1997 and 1996,
respectively. The increase primarily reflects interest income on the cash
proceeds received from the Cigar IPO and Secondary Offering and the Flavors
Disposition, a portion of which was used to fund the special dividend in March
1997.
9
<PAGE>
MAFCO CONSOLIDATED GROUP INC. AND SUBSIDIARIES
MANAGEMENT'S DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS
(DOLLARS IN MILLIONS, EXCEPT SHARE DATA)
Gain on Cigar Secondary Offering represents the gain from the sale of
5,000,000 shares of Cigar Holdings by the Company, net of fees and related
expenses (See Note 4).
Equity in earnings from continuing operations and preferred dividends of
M&F Worldwide represents the Company's common equity interest in M&F
Worldwide's continuing operations and preferred dividends received on the
Company's investment in M&F Worldwide Preferred Stock.
The mark-to-market income of $7.4 in 1997 reflects the decrease in the
closing market price of the VSR obligation in the second quarter of 1997. The
Company's VSR obligation is marked to the closing market price of the security
at each financial statement date. As a result, income or expense may result
from future mark-to-market adjustments.
Equity in discontinued operations of M&F Worldwide, net of income taxes
represents the Company's common equity interest in M&F Worldwide's
discontinued operations in 1996.
The provision for income taxes as a percentage of income before income
taxes and minority interests was 33.3% in 1997 and 30.5% in 1996. The increase
in the effective rate is primarily due to an increase in income subject to the
United States taxation during 1997 partially offset by the higher tax rate on
Flavors' operations in 1996 and the tax benefits associated with the Company's
operations in Puerto Rico. Income tax expense in 1997 and 1996 reflects
provisions for federal income taxes, Puerto Rico tollgate taxes and taxes on
Puerto Rico source income, together with state and franchise taxes.
FINANCIAL CONDITION, LIQUIDITY AND CAPITAL RESOURCES
The Company's net cash flows provided by operating activities were
$119.3 and $15.2 in 1997 and 1996, respectively. The increase primarily
reflects a decrease in trading securities partially offset by increased
working capital requirements in 1997 as compared to 1996.
Net cash flows provided by (used for) investing activities were $109.6
and ($4.5) in 1997 and 1996, respectively. The increase in 1997 reflects the
proceeds from the Cigar Secondary Offering of $112.4 which was completed on
March 26, 1997. Capital expenditures in 1997 and 1996 primarily relate to an
investment in Cigar's manufacturing facilities to meet the increased demand
for the Company's premium cigars. Capital expenditures for the remainder of
1997 are expected to be $2.7.
Net cash used for financing activities was $226.3 and $4.6 in 1997 and
1996, respectively. The increase primarily reflects the $232.2 dividend paid
by MC Group in connection with the 1997 Merger Agreement, partially offset by
borrowings under Cigar's credit agreement.
In 1993 and 1994, Cigar entered into two five-year interest rate swap
agreements in an aggregate notional amount of $85.0. Under the terms of the
agreements, Cigar receives a fixed interest rate averaging 5.8% and pays a
variable interest rate equal to the six month LIBOR. Cigar entered into such
agreements to take advantage of the differential between long-term and
short-term interest rates and effectively converted the interest rate on $85.0
of fixed-rate indebtedness to a variable rate. Had Cigar terminated these
agreements which it considers to be held for other than trading purposes on
June
10
<PAGE>
MAFCO CONSOLIDATED GROUP INC. AND SUBSIDIARIES
MANAGEMENT'S DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS
(DOLLARS IN MILLIONS, EXCEPT SHARE DATA)
24, 1997, a combined loss of approximately $0.7 would have been realized.
Future positive or negative cash flows associated with these contracts will
depend upon the trend of short-term interest rates during the remaining life
of the agreements. In the event of non-performance of the counterparties at
anytime during the remaining lives of these agreements which expire at
December 1998 and January 1999, Cigar could lose some or all of any future
positive cash flows. However, Cigar does not anticipate non-performance by
such counterparties.
Pursuant to the 1997 Merger Agreement, on July 9, 1997, each outstanding
share of MC Group common stock (other than shares held by MC Holdings) was
converted into the right to receive $33.50 per share in cash. The total Merger
Consideration, including shares not yet converted, was $115.9 (see Note 3).
Additionally, on February 20, 1997, in connection with the 1997 Merger
Agreement, MC Group declared a special cash dividend of $10 per share which
was paid on March 14, 1997 to stockholders of record as of the close of
business on March 10, 1997. In addition, pursuant to the 1997 Merger Agreement
the Company made cash payments aggregating $38.8 during July 1997 in respect
of outstanding stock options.
The Company used the proceeds from the sale of its trading securities to
pay the Merger Consideration, including related fees and expenses and amounts
owing in respect of outstanding stock options. The balance of the Company's
cash and trading securities will be used for general corporate purposes,
including funding of liabilities assumed in the Abex Merger and loans or
distributions to the Company's parent.
RECENTLY ISSUED ACCOUNTING STANDARDS
In February 1997, the Financial Accounting Standards Board issued
Statement of Financial Accounting Standards No. 128 ("SFAS No. 128"),
"Earnings Per Share", which established new standards for computing and
presenting earnings per share. SFAS No. 128 will be effective for interim
and annual financial statements after December 15, 1997. The Company
believes that the adoption of SFAS No. 128 will not have a material impact on
the Company's reported earnings per share.
11
<PAGE>
MAFCO CONSOLIDATED GROUP INC. AND SUBSIDIARIES
PART II. OTHER INFORMATION
ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K
(a) Exhibits
27* Financial Data Schedule
* filed herein
(b) Reports on Form 8-K
None
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.
MAFCO CONSOLIDATED GROUP INC.
-----------------------------
(Registrant)
By: /s/Irwin Engelman
------------------------------
August 11, 1997 Irwin Engelman
Executive Vice President
(Principal Financial Officer)
By: /s/Laurence Winoker
------------------------------
August 11, 1997 Laurence Winoker
Vice President and Controller
(Principal Accounting Officer)
12
<TABLE> <S> <C>
<PAGE>
<ARTICLE> 5
<LEGEND>
This schedule contains summary financial information extracted from the
Mafco Consolidated Group Inc.
Consolidated Balance Sheet and Statement of Operations and is qualified in its
entirety by reference to such financial statements.
</LEGEND>
<CIK> 0000888676
<NAME> Mafco Consolidated Group Inc.
<MULTIPLIER> 1,000
<CURRENCY> USD
<EXCHANGE-RATE> 1
<FISCAL-YEAR-END> Dec-31-1997
<PERIOD-START> Jan-01-1997
<PERIOD-END> Jun-28-1997
<PERIOD-TYPE> 6-MOS
<CASH> 8,805
<SECURITIES> 245,837
<RECEIVABLES> 33,795
<ALLOWANCES> (6,279)
<INVENTORY> 59,882
<CURRENT-ASSETS> 366,305
<PP&E> 54,035
<DEPRECIATION> (15,978)
<TOTAL-ASSETS> 647,841
<CURRENT-LIABILITIES> 139,888
<BONDS> 87,100
0
0
<COMMON> 247
<OTHER-SE> 222,883
<TOTAL-LIABILITY-AND-EQUITY> 647,841
<SALES> 132,265
<TOTAL-REVENUES> 132,265
<CGS> 74,193
<TOTAL-COSTS> 74,193
<OTHER-EXPENSES> 30,640
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> (6,367)
<INCOME-PRETAX> 152,530
<INCOME-TAX> (50,763)
<INCOME-CONTINUING> 94,882
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 94,882
<EPS-PRIMARY> 4.08
<EPS-DILUTED> 0.00
</TABLE>
