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
Date of Report (Date of earliest event reported): February 27, 1998
Foamex International Inc.
Foamex L.P.
Foamex Capital Corporation
(Exact Name of Registrant as specified in its Charter)
Delaware 0-22624 05-0473908
Delaware 1-11432 05-0475617
Delaware 1-11436 22-3182164
(State or other jurisdiction (Commission File No.) (I.R.S. Employer
of corporation) Identification No.)
1000 Columbia Avenue
Linwood, PA 19061
(Address of Principal (Zip Code)
Executive Offices)
Registrant's telephone number, including area code:
(610) 859-3000
N/A
(Former name or former address, if changed since last report)
<PAGE>
Item 2. Acquisition or Disposition of Assets
On February 27, 1998, Foamex International Inc. ("Foamex International")
and certain of its affiliates engaged in a series of transactions (collectively,
the "Transaction") designed to simplify the Company's corporate structure and to
provide future operational flexibility.
Prior to consummation of the Transaction, Foamex L.P., an indirect
subsidiary of the Company ("Foamex"), and Foamex's wholly-owned subsidiary,
General Felt Industries, Inc. ("GFI"), entered into a Supply Agreement and an
Administrative Services Agreement. In addition, Foamex settled its outstanding
indebtedness to GFI with a $4.8 million in cash and a $34.0 million two year
promissory note (the "Foamex/GFI Note").
As part of the Transaction, Foamex Fibers, Inc., a wholly-owned
subsidiary of GFI, was merged with and into GFI, and Foamex LLC, a wholly-owned
subsidiary of Foamex, was merged with and into Foamex. In addition, FMXI, Inc.
and Crain Industries, Inc., both wholly-owned subsidiaries of the Company and
general partners in Foamex, were merged.
Pursuant to a Transfer Agreement, dated as of February 27, 1998, by and
between Foamex and Trace Foam LLC ("Trace LLC"), Foamex transferred (the
"Transfer") to Trace LLC all of the outstanding common stock of GFI, in exchange
for (i) the assumption by Trace LLC of $129.0 million of Foamex's indebtedness,
and (ii) the transfer by Trace LLC to Foamex of a 1% non-managing general
partnership interest in Foamex. The amount of consideration was arrived at based
on an independent, third party appraisal of GFI. As a result of the Transfer,
GFI ceased being a subsidiary of Foamex, and was released from all obligations
under Foamex's Senior Subordinated Notes.
Upon consummation of the Transfer, pursuant to an Asset Purchase
Agreement, dated as of February 27, 1998, by and among Foamex Carpet Cushion,
Inc., a wholly-owned subsidiary of the Company ("Foamex Carpet"), the Company,
Trace LLC and GFI, GFI sold substantially all of its assets (other than its
owned real estate and the Foamex/GFI Note) to Foamex Carpet in exchange for (i)
$20.0 million in cash and (ii) a promissory note issued by Foamex Carpet in
favor of Trace LLC in the amount of $70.2 million (the "New GFI Note"). Upon
consummation of the transactions contemplated by the Asset Purchase Agreement,
Foamex Carpet entered into a Credit Agreement with the institutions from time to
time party thereto as lenders, the institutions from time to time party thereto
as issuing banks and Citicorp USA, Inc. and The Bank of Nova Scotia, as
administrative agents, which provides for up to $20.0 million in revolving
credit borrowings.
The cash portion of the considerations was borrowed by Foamex under its
credit agreement, dated as of June 12, 1997, as amended and restated as of
February 27, 1998, by and among Foamex, FMXI, Inc., the institutions from time
to time party thereto as lenders, the institutions from time to time party
thereto as issuing banks and Citicorp USA, Inc. and The Bank of Nova Scotia, as
administrative agents, which cash portion was then distributed by Foamex to the
Company and then contributed by the Company to Foamex Carpet. The amount of
consideration was arrived at based on an independent, third party appraisal of
GFI.
The acquired assets constitute equipment and other physical property used
by GFI in the carpet cushion business. Foamex Carpet intends to continue such
use.
Trace International Holdings, Inc. indirectly owns approximately 46.0% of
the common stock of the Company and 100% of the equity interests in Trace LLC;
therefore, the Company, Foamex, GFI, Trace LLC and Foamex Carpet are all
affiliated entities. Marshall S. Cogen, Philip N. Smith, Jr., Robers H. Nelson
and Tambra S. King are each officers of the Company, GFI and Trace LLC, while
Mr. Smith, Mr. Nelson and Ms. King are also officers of Foamex Carpet. Mr. Cogan
is a director of the Company, GFI and Foamex Carpet, and Mr. Cogan and Mr. Smith
are each members of the Board of Managers of Trace LLC.
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<PAGE>
ITEM 7. Financial Statements and Exhibits
a) Financial Statements of Business Acquired
Not applicable.
b) Pro Forma Financial Information
The Transaction was accounted for in a manner similar to a pooling of
interests since the entities are under common control. Accordingly, the
consolidated financial statements have been restated to exclude the
operations of GFI and Foamex Fibers, Inc. The following consolidated
statements of operations and consolidated balance sheets of Foamex
reflect the restated financial statements.
The historical investment in GFI of approximately $103.1 million and
$97.0 million, respectively, has been eliminated from partners' equity
(deficit). The pro forma impact on the restated financial statements for
the assumption of the $129.0 million of indebtedness, the distribution to
Foamex International and related expenses and fees would increase
restated partners equity (deficit) by approximately $93.0 million. The
Transaction has been accounted for and disclosed in Foamex's Form 10-Q
for the period ended March 29, 1998.
The Transaction did not have significant impact on the consolidated
financial statements of Foamex International, therefore pro forma
financial statements are not included in this Form 8-K/A. Also, the
Transaction has been accounted for and disclosed in Foamex
International's Form 10-Q for the period ended March 29, 1998.
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<PAGE>
FOAMEX L.P. AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
(unaudited)
<TABLE>
<CAPTION>
<S> <C> <C>
December 28, December 29,
1997 1996
ASSETS (thousands)
CURRENT ASSETS:
Cash and cash equivalents $ 8,982 $ 20,632
Accounts receivable, net 138,571 80,874
Inventories 112,094 75,906
Due from related parties 12,823 19,447
Other current assets 32,519 30,150
---------- ----------
Total current assets 304,989 227,009
PROPERTY, PLANT AND EQUIPMENT, NET 205,705 150,679
COST IN EXCESS OF ASSETS ACQUIRED, NET 184,523 33,417
DEBT ISSUANCE COSTS, NET 18,889 14,902
OTHER ASSETS 21,831 22,019
--------- ---------
TOTAL ASSETS $735,937 $448,026
======== ========
LIABILITIES AND PARTNERS' EQUITY (DEFICIT)
CURRENT LIABILITIES:
Short-term borrowings $ 6,598 $ 3,692
Current portion of long-term debt 12,161 13,735
Accounts payable 110,640 62,062
Accounts payable to related parties 11,662 8,803
Accrued interest 10,655 8,871
Other accrued liabilities 47,119 23,185
--------- ---------
Total current liabilities 198,835 120,348
LONG-TERM DEBT 726,649 392,617
LONG-TERM DEBT - RELATED PARTY 38,800 -
OTHER LIABILITIES 31,076 19,248
--------- ---------
Total liabilities 995,360 532,213
-------- --------
COMMITMENTS AND CONTINGENCIES - -
--------- ---------
PARTNERS' EQUITY (DEFICIT)
General partners (122,304) 632
Limited partners - 57,654
Investment in General Felt (103,121) (97,019)
Notes and advance receivable from partner (16,118) (35,180)
Other (17,880) (10,274)
--------- ---------
Total partners' equity (deficit) (259,423) (84,187)
-------- ---------
TOTAL LIABILITIES AND PARTNERS' EQUITY (DEFICIT) $735,937 $448,026
======== ========
</TABLE>
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<PAGE>
FOAMEX L.P. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF OPERATIONS
For the Years Ended 1997, 1996 and 1995
(unaudited)
<TABLE>
<CAPTION>
December 28, December 29, December 31,
1997 1996 1995
(thousands)
<S> <C> <C> <C>
NET SALES $792,571 $778,651 $725,288
COST OF GOODS SOLD 675,254 664,751 651,071
-------- -------- --------
GROSS PROFIT 117,317 113,900 74,217
SELLING, GENERAL AND ADMINISTRATIVE
EXPENSES 47,462 37,959 41,154
RESTRUCTURING AND OTHER CHARGES (CREDITS) 22,104 (955) 25,093
-------- -------- --------
INCOME FROM OPERATIONS 47,751 76,896 7,970
INTEREST AND DEBT ISSUANCE EXPENSE 44,895 42,504 43,386
OTHER INCOME (EXPENSE), NET 2,283 2,162 (257)
-------- -------- --------
INCOME (LOSS) FROM CONTINUING OPERATIONS
BEFORE PROVISION FOR INCOME TAXES 5,139 36,554 (35,673)
PROVISION (BENEFIT) FOR INCOME TAXES (24) 1,358 443
-------- -------- --------
INCOME (LOSS) FROM CONTINUING OPERATIONS 5,163 35,196 (36,116)
-------- -------- --------
DISCONTINUED OPERATIONS:
LOSS FROM DISCONTINUED OPERATIONS,
NET OF INCOME TAXES - (230) (5,117)
LOSS ON DISPOSAL OF DISCONTINUED OPERATIONS,
INCLUDING PROVISION FOR OPERATING LOSSES
DURING THE PHASE-OUT PERIOD, NET OF
INCOME TAXES - (41,820) -
-------- -------- --------
LOSS FROM DISCONTINUED OPERATIONS,
NET OF INCOME TAXES - (42,050) (5,117)
-------- -------- --------
INCOME (LOSS) BEFORE EXTRAORDINARY
LOSS 5,163 (6,854) (41,233)
EXTRAORDINARY LOSS ON EARLY
EXTINGUISHMENT OF DEBT (48,559) (1,912) -
-------- -------- --------
NET INCOME (LOSS) $(43,396) $ (8,766) $(41,233)
======== ========= ========
</TABLE>
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<PAGE>
c) Exhibits
None.
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<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities and Exchange Act of 1934,
the Registrant has duly caused this Report to be signed on its behalf by the
undersigned hereunto duly authorized.
FOAMEX INTERNATIONAL INC.
Date: May 12, 1998 By: /s/ Kenneth R. Fuette
Name: Kenneth R. Fuette
Title: Executive Vice President,
Chief Financial Officer and
Chief Administrative Officer
Date: May 12, 1998 FOAMEX L.P.
By: FMXI, Inc.
Managing General Partner
By: /s/ Kenneth R. Fuette
Name: Kenneth R. Fuette
Title: Executive Vice President and
Chief Financial Officer
Date: May 12, 1998 FOAMEX CAPITAL CORPORATION
By: /s/ Kenneth R. Fuette
Name: Kenneth R. Fuette
Title: Vice President, Treasurer, and
Chief Financial Officer
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