UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D. C. 20549
FORM 8-K/A
AMENDMENT NO. 1
AMENDMENT TO CURRENT REPORT
PURSUANT TO SECTION 13 or 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
Date of Report (Date of earliest event reported): March 15, 1996
Alltrista Corporation
State of Indiana Commission File Number 0-21052 35-1828377
345 South High Street, P. O. Box 5004
Muncie, Indiana 47307-5004
Registrant's telephone number, including area code: (317) 281-5000
--------------------------------------------------------------------------
<PAGE>
ITEM 7. FINANCIAL STATEMENTS AND EXHIBITS
(a) Financial Statements of businesses acquired.
See Index to Financial Statements and Pro Forma Financial Information on
page 4 and pages referenced hereon.
(b) Pro Forma Financial Information.
See Index to Financial Statements and Pro Forma Financial Information on
page 4 and pages referenced hereon.
(c) Exhibits
None.
<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.
ALLTRISTA CORPORATION
(Registrant)
By: /s/ Thomas B. Clark
-------------------------------------
Thomas B. Clark
President and Chief Executive Officer
May 29, 1996
<PAGE>
<TABLE>
<CAPTION>
ALLTRISTA CORPORATION
FORM 8-K
INDEX TO FINANCIAL STATEMENTS AND PRO FORMA FINANCIAL INFORMATION
<S> <C>
KERR CONSUMER PRODUCTS DIVISION PAGE
Independent Auditors' Report 5
Balance sheet as of December 31, 1995 6
Statement of Operations and Divisional Equity
for the year ended December 31, 1995 7
Statement of Cash Flows for the year ended December 31, 1995 8
Notes to Financial Statements 9-16
ALLTRISTA CORPORATION AND SUBSIDIARIES
AND KERR CONSUMER PRODUCTS DIVISION
Pro Forma Condensed Combined Balance sheet as of March 31, 1996 17
Pro Forma Condensed Combined Statement of Income for the year
ended December 31, 1995 18
Pro Forma Condensed Combined Statement of Income for the three
months ended March 31, 1996 19
Notes to Pro Forma Condensed Combined Financial Statements 20-21
</TABLE>
<PAGE>
Item 7 (a) Financial Statements of Business Acquired
INDEPENDENT AUDITORS' REPORT
To the Board of Directors
Kerr Group, Inc.:
We have audited the accompanying balance sheet of Kerr Consumer Products
Division (a division of Kerr Group, Inc.) as of December 31, 1995 and the
related statements of operations and divisional equity and cash flows for the
year 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 audit. We conducted our audit 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 audit provides 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 Kerr Consumer Products Division as of December 31, 1995 and the
results of its operations and its cash flows for the year then ended in
conformity with generally accepted accounting principles.
[SIGNATURE OF KPMG PEAT MARWICK, LLP]
APRIL 26, 1996
LOS ANGELES, CALIFORNIA
<PAGE>
<TABLE>
<CAPTION>
KERR CONSUMER PRODUCTS DIVISION (A
Division of Kerr Group, Inc.)
Balance Sheet
December 31, 1995
(In thousands)
<S> <C>
ASSETS
Current assets:
Cash $ 3
Trade receivables, less allowance for doubtful
accounts of $328 208
Other receivables 308
Inventories 13,028
--------
Total current assets 13,547
Property, plant and equipment, net 4,697
Intangibles, net 316
--------
$ 18,560
========
LIABILITIES AND DIVISIONAL EQUITY
Current liabilities:
Accounts payable $ 1,375
Accrued pension liability 440
Other current liabilities 215
--------
Total current liabilities 2,030
Pension liability 2,135
Accrued postretirement benefit liability 206
Divisional equity 14,189
--------
$ 18,560
========
See accompanying notes to financial statements.
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
KERR CONSUMER PRODUCTS DIVISION (A
Division of Kerr Group, Inc.)
Statement of Operations and Divisional Equity
Year ended December 31, 1995
(In thousands)
<S> <C>
Net sales $ 29,808
Cost of sales 22,502
----------
Gross profit 7,306
----------
Operating expenses:
Plant and shipping expenses 1,979
Direct selling, general and
administrative expenses 4,616
Parent allocated expenses 1,665
----------
Total operating expenses 8,260
----------
Net loss (954)
Equity distributions, net (1,335)
Divisional equity at December 31, 1994 16,478
----------
Divisional equity at December 31, 1995 $ 14,189
==========
See accompanying notes to financial statements.
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
KERR CONSUMER PRODUCTS DIVISION (A
Division of Kerr Group, Inc.)
Statement of Cash Flows
Year ended December 31, 1995
(In thousands)
<S> <C>
Cash flows provided by operations:
Net loss $ (954)
Add (deduct) noncash items included in net loss:
Depreciation and amortization 250
Reduction in total pension liability, net (186)
Changes in other operating working capital:
Receivables 565
Inventories 2,853
Accounts payable 421
Accrued expenses (433)
---------
Cash flows provided by operations 2,516
---------
Cash flow used by investing activities:
Capital expenditures (886)
Payments associated with relocation of operations (205)
Other, net (90)
---------
Cash flow used by investing activities (1,181)
---------
Cash flow used by financing activities - equity
distributions, net (1,335)
----------
Net change during the year --
Balance at beginning of year 3
----------
Balance at end of year $ 3
==========
See accompanying notes to financial statements.
</TABLE>
<PAGE>
KERR CONSUMER PRODUCTS DIVISION
(A Division of Kerr Group, Inc.)
Notes to Financial Statements
December 31, 1995
(In thousands)
(1) BASIS OF PRESENTATION
The accompanying financial statements include the accounts of Kerr
Consumer Products Division (Kerr CPD), a division of Kerr Group, Inc.
(Parent) which is a publicly-traded company. Kerr CPD is a manufacturer
and distributor of home canning supplies.
Kerr CPD's financial statements include the assets, liabilities, revenues
and expenses which are specifically identifiable with Kerr CPD, as well
as certain allocated expenses for services that have historically been
performed by the corporate headquarters of the Parent. These expenses are
allocated using various methods dependent upon the nature of the service.
Kerr CPD's management believes that these allocations are reasonable
under the circumstances; however, these allocations are not necessarily
indicative of the costs and expenses that would have resulted if Kerr CPD
had been operated as a separate entity.
The net cash position of the Parent has been managed through a
centralized treasury system. Accordingly, transfers of cash within the
treasury system are recorded through intercompany accounts, which are
reflected as a component of divisional equity in the accompanying balance
sheet. In addition, intercompany balances arising from allocated charges
for services have been recorded in the statement of operations and as a
charge or credit to divisional equity. There is no direct interest cost
allocation to Kerr CPD with respect to Parent borrowings, and
accordingly, the statement of operations and divisional equity does not
include any allocated financing costs.
(2) SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
INVENTORIES
Inventories are valued at the lower of cost or market, determined by the
use of the first-in, first-out method.
PROPERTY, PLANT AND EQUIPMENT
Property, plant and equipment are stated at cost. Depreciation is
determined using the straight-line method over the shorter of the
estimated useful lives of the assets or the remaining life of the lease.
The principal estimated useful lives used in computing the depreciation
are as follows:
<TABLE>
<S> <C>
Leasehold improvements 20 years
Machinery and equipment 3 to 15 years
Furniture and equipment 5 to 10 years
</TABLE>
Kerr CPD's policy is to charge amounts expended for maintenance and
repairs to expense and to capitalize expenditures for major replacements
and betterments.
INTANGIBLES
Intangible assets are being amortized by the use of the straight-line
method over their respective initial estimated lives ranging from 2 to 20
years.
<PAGE>
REVENUE RECOGNITION
Kerr CPD recognizes revenue as product is shipped. A reserve is provided
for estimated end of season returns of home canning supplies as sales are
recorded.
PENSIONS AND OTHER POSTRETIREMENT BENEFITS
Financial Accounting Standards Board Statement No. 87 (FASB 87) requires
that a company record an additional minimum pension liability to the
extent that a company's accumulated pension benefit obligation exceeds
the fair value of pension plan assets and accrued pension liabilities.
This additional minimum pension liability is offset by an intangible
asset not to exceed prior service costs of the pension plan. Amounts in
excess of prior service costs are reflected as a reduction in divisional
equity, net of related tax benefits.
The Parent and Kerr CPD account for post-retirement benefit obligations
in accordance with Financial Accounting Standards Board Statement No.
106, "Employers' Accounting for Postretirement Benefits other than
Pensions" (FASB No. 106). As more fully described in note 6, the Parent
has elected to amortize the impact of FASB No. 106 ratably over 20 years
beginning in 1993.
INCOME TAXES
Income taxes have been provided as if Kerr CPD was a separate taxable
entity. Kerr CPD accounts for income taxes under Financial Accounting
Standards Board Statement No. 109, "Accounting for Income Taxes" (FASB
No. 109). Under the asset and liability method of FASB No. 109, deferred
tax assets and liabilities are recognized for the future tax consequences
attributable to differences between the financial statement carrying
amounts of existing assets and liabilities and their respective tax
bases. Deferred tax assets and liabilities are measured using enacted tax
rates expected to apply to taxable income in the years in which those
temporary differences are expected to be recovered or settled. Under FASB
No. 109, the effect on deferred tax assets and liabilities of a change in
tax rates is recognized in income in the period that includes the
enactment date.
FINANCIAL STATEMENT PREPARATION AND PRESENTATION
The preparation of financial statements requires management estimates and
assumptions that affect the reported amounts of assets and liabilities
and the disclosure of contingent assets and liabilities and the reported
amounts of income and expenses. Actual results could differ from those
estimates.
FAIR VALUE OF FINANCIAL INSTRUMENTS
The fair value of cash, accounts receivable and payable and advances
pursuant to the sale of receivables under the Parent's Receivable
Agreement approximate their carrying amount because of their short
maturity.
RECENTLY ISSUED ACCOUNTING PRONOUNCEMENTS
During 1995,the Financial Accounting Standards Board issued Statement No.
121, "Accounting for the Impairment of Long-Lived Assets" (FASB No. 121).
FASB No. 121 establishes accounting standards for the impairment of
long-lived assets, certain identifiable intangibles and goodwill. FASB
No. 121 is not expected to have a material effect on the Company's
financial position or results of operations.
<PAGE>
(3) INVENTORIES
<TABLE>
<CAPTION>
The components of inventories are as follows:
<S> <C>
Raw materials $ 466
Work in process 2,964
Finished goods 9,598
---------
$ 13,028
=========
</TABLE>
(4) PROPERTY, PLANT AND EQUIPMENT
<TABLE>
<CAPTION>
Property, plant and equipment consists of the following:
<S> <C>
Leasehold improvements $ 708
Machinery and equipment 6,605
Furniture and office equipment 264
Construction in progress 150
---------
7,727
Less accumulated depreciation and
amortization (3,030)
---------
$ 4,697
=========
</TABLE>
(5) INTANGIBLES
<TABLE>
<CAPTION>
Intangibles consist of the following:
<S> <C>
Pension $ 160
Lease origination costs 162
Supply contract 39
---------
361
Less accumulated amortization (45)
---------
$ 316
=========
</TABLE>
<PAGE>
(6) INCOME TAXES
Kerr CPD incurred a net loss in 1995; accordingly, no recovery of income
taxes was recorded in the accompanying statement of operations and
divisional equity.
The tax effects of temporary differences that give rise to significant
portions of the deferred income tax assets and liabilities at December
31, 1995 is as follows:
<TABLE>
<S> <C>
Deferred income tax assets:
Excess of additional pension liability over
unrecognized prior service cost $ 786
Accrued retiree health liability 82
Allowance for doubtful accounts 131
Inventory 323
Accrued vacation pay 39
-------
Total gross deferred income tax assets 1,361
Less valuation allowance (859)
--------
Deferred income tax assets, net of valuation allowance 502
Deferred income tax liabilities:
Property, plant and equipment, principally due to
differences in depreciation 502
--------
Net deferred income taxes $ --
========
</TABLE>
Net operating losses and alternative minimum tax credits of the Parent
have not been computed separately for Kerr CPD and accordingly are not
reflected as a component of deferred income taxes. Kerr CPD maintains a
valuation allowance to reduce net deferred income taxes to zero due to
various uncertainties associated with recovery of the net deferred tax
assets.
(7) OTHER CURRENT LIABILITIES
<TABLE>
<CAPTION>
Other current liabilities consist of the following:
<S> <C>
Accrued wages and vacation pay $ 150
Accrued property taxes 56
Other accrued expenses 9
--------
Total accrued expenses $ 215
========
</TABLE>
(8) RETIREMENT BENEFITS
Pensions
The Parent has a defined benefit pension plan (the Retirement Income
Plan) and a defined contribution pension plan, which cover all Kerr CPD
employees. The Retirement Income Plan generally provides benefits based
on years of service and average final pay. The defined contribution plan
provides benefits based on a fixed percentage of pay for each year of
service. The Parent's policy is to fund amounts sufficient to satisfy the
funding requirements of the Employee Retirement Income Security Act of
1974. During 1995, the Parent funded the Retirement Income Plan by $1,983
more than the accrued pension expense for the 1994 plan year.
During 1995, the Parent contributed 250 shares of its common stock, at a
price of $7.56 per share, to the Retirement Income Plan. The contribution
reduced the Parent's recorded pension liability by $1,891.
During 1995, the Parent adopted a Pension Restoration Plan which is an
unfunded plan providing benefits to participants not payable by the
Parent's Retirement Income Plan because of the limitations on benefits
imposed by the Internal Revenue Code of 1986, as amended. The aggregate
annual accrued benefit for each participant under the combination of the
Retirement Income Plan and the Pension Restoration Plan when expressed as
a single life annuity is limited to $200.
The information presented below is for the entire defined benefit plans
and defined contribution plan. Kerr CPD represents 11.65% of each plan's
expenses and related assets and liabilities based on 1995 participant
data.
Net pension expense for the year ended December 31, 1995 included the
following components:
<TABLE>
<S> <C>
Defined benefit plan:
Service cost $ 498
Interest cost on projected benefit obligation 7,364
Return on assets (16,080)
Net amortization and deferral 9,460
-------
Defined benefit plan expense $ 1,242
=======
Defined contribution plan expense $ 15
=======
The funded status of the defined benefit plans at
December 31, 1995 was as follows:
Actuarial present value:
Vested benefit obligation $ 99,237
Nonvested benefit obligation 1,942
--------
Accumulated benefit obligation 101,179
Effect of future salary increases 2,812
-------
Projected benefit obligation 103,991
Plan assets at fair value (a) 79,084
-------
Projected benefit obligation in excess of plan assets 24,907
Unrecognized net transition obligation (474)
Unrecognized prior service costs (936)
Unrecognized net loss (19,660)
-------
Accrued pension liability before adjustment 3,837
Adjustment required to recognize additional minimum pension
liability 18,258
--------
Accrued pension liability related to the defined
benefit plan $ 22,095
========
Accrued pension liability related to the defined contribution
plan $ 8
========
(a) Plan assets include 368 shares of Parent common stock at a value of
$3,682 at December 31, 1995.
</TABLE>
<PAGE>
In connection with recording the additional minimum pension liability
pursuant to the provisions of FASB No. 87, the Parent recorded a
reduction in its stockholders' equity of $10,140 at December 31, 1995 and
an intangible pension asset of $1,376 at December 31, 1995. Kerr CPD has
also recorded such amounts using the same 11.65% allocation described
above.
The majority of all pension plan assets are held by a master trust
created for the collective investment of the plan's funds, as well as in
private placement insurance contracts. At December 31, 1995, assets held
by the master trust consisted primarily of cash, U.S. Government
obligations, corporate bonds and commons stocks.
The defined benefit plan assumptions as of December 31, 1995 were as
follows:
<TABLE>
<S> <C>
Discount rate 7.25%
Increase in compensation rate 5.0
Long-term rate of return on assets 9.5
</TABLE>
During 1993, the Parent recorded a curtailment loss of $232 related to
the relocation of Kerr CPD's home canning cap and lid manufacturing
operations. Such curtailment losses were included as components of the
respective losses on the sale of the businesses and plant relocation.
Retiree Health Care and Life Insurance
The Parent provides certain health care life insurance benefits for Kerr
CPD retired employees and their spouses. The costs of such benefits are
shared by retirees through one or more of the following: (a) deductibles,
(b) copayments and (c) retiree contributions. Salaried employees hired
prior to September 1, 1992, and certain hourly employees may become
eligible for those benefits if they reach retirement age while working
for the Parent. The Parent will not provide retiree health care and life
insurance benefits for salaried employees hired after September 1, 1992.
Health care and life insurance benefits provided by the Parent are not
funded in advance, but rather are paid by the Parent as the costs are
actually incurred by the retirees.
As discussed in note 1, effective January 1, 1993, the Parent adopted
FASB No. 106, "Employers' Accounting for Postretirement Benefits other
than Pensions." FASB No. 106 requires a company to use an accrual method
for recording retiree health care and life insurance benefits instead of
the previously used pay-as-you-go method. The effect of this accounting
change on 1993 results of operations was to increase retiree health care
and life insurance expense by $640 from the amount that would have been
recorded in 1993 under the previously used pay-as-you-go method. The
adoption of FASB No. 106 at January 1, 1993, created a previously
unrecognized accumulated postretirement benefit obligation of $13,195. As
permitted under FASB No. 106, the Parent has elected to amortize the
$13,195 accumulated postretirement benefit obligation ratably over 20
years.
The information presented below is for the entire postretirement benefits
plan. Kerr CPD represents 15% of the plan's expenses and related
liabilities.
Retiree health care and life insurance expense for the year ended
December 31, 1995 (in thousands) included the following components:
<TABLE>
<S> <C>
Retiree health care and life insurance expense:
Service cost $ 41
Interest cost on accumulated benefit obligation 855
Net amortization and deferral 544
--------
$ 1,440
========
</TABLE>
<PAGE>
The funded status of the retiree health care and life insurance
plans at December 31, 1995 is as follows (in thousands):
Actuarial present value of accumulated postretirement benefit obligation:
<TABLE>
<S> <C>
Retirees $ 9,210
Fully eligible active participants 735
Other active participants 1,055
---------
Accumulated benefit obligation 11,000
Plan assets at fair value --
---------
Accumulated benefit obligation in
excess of plan assets 11,000
Unrecognized net transition obligation (10,612)
Unrecognized net gain 992
---------
Accrued postretirement benefit liability $ 1,380
=========
</TABLE>
The retiree health care and life insurance plans assumptions are as
follows (in thousands):
<TABLE>
<S> <C>
Discount rate 7.25%
Health care cost trend rates:
Indemnity plans 8.75% trending down to 6%
Managed care plans 6.75% trending down to 4%
</TABLE>
The effect of a one percentage point annual increase in these assumed
cost trend rates at December 31, 1995 would increase the postretirement
benefit obligation by approximately $420,000 and would increase the
service and interest cost components of the annual expense by
approximately $40,000.
(9) FINANCING
As of December 31, 1995, the Parent had an Accounts Receivable Agreement
(Receivable Agreement) maturing on January 18, 1997 to meet its seasonal
working capital needs. The Receivable Agreement permits the Parent to
sell trade accounts receivable of Kerr CPD on a nonrecourse basis. Under
the Receivable Agreement, up to 70% of Kerr CPD receivables sold can be
advanced to the Parent. Kerr CPD retains collection and service
responsibility as agent for the purchaser, over any receivables sold.
Advances under such Receivable Agreement are subject to certain
limitations. As of December 31, 1995, receivables as shown on the
accompanying balance sheet have been reduced by net proceeds of $343 from
advances pursuant to the sale of receivables under the Parent's
Receivable Agreement.
(10) LOSS ON PLANT RELOCATION
During the fourth quarter of 1993, Kerr CPD recorded a pretax loss of
approximately $4,500 associated with the relocation of operations from
Chicago, Illinois to a new manufacturing facility in Jackson, Tennessee.
The pretax loss consisted primarily of accruals for (1) the early
recognition of retiree health care and pension expense, severance,
workers' compensation costs and insurance continuation costs of
approximately $2,500, (2) asset retirement and related facility closing
costs of approximately $1,000 and (3) moving and relocation costs of
approximately $700. In 1995, the Company made cash payments related to
relocation costs of approximately $200. In 1994, the Company made cash
payments related to such accruals for (1) the early recognition of
retiree health care and pension expense, severance, workers' compensation
costs and insurance continuation costs of approximately $1,500, (2) asset
retirement and related facility closing costs of approximately $600, (3)
moving and relocation costs of approximately $600 and (4) other costs of
approximately $300. In addition, during 1994, approximately $300 was
charged against such accruals related to the book value of fixed assets
retired. The remaining accruals primarily relate to retiree health costs
and pensions which will be paid over a number of years.
(11) RENTAL EXPENSE AND LEASE COMMITMENTS
Kerr CPD occupies a manufacturing facility and uses certain automobiles,
machinery and equipment under noncancelable lease arrangements. Rent
expense under these agreements was $609 in 1995. In addition, the
accompanying statement of operations and divisional equity includes $263
of allocated rent expense from the Parent.
At December 31, 1995, Kerr CPD was obligated under various noncancelable
leases. Calendar year minimum rental commitments under Kerr CPD's leases
are as follows:
<TABLE>
<S> <C>
Year ending December 31:
1996 $ 597
1997 598
1998 585
1999 590
2000 581
2001 through 2014 7,916
------------
$ 10,867
============
</TABLE>
Real estate taxes, insurance and maintenance expenses are obligations of
Kerr CPD. Generally, in the normal course of business, leases that expire
will be renewed or replaced by leases on other properties.
(12) SUBSEQUENT EVENT
On March 15, 1996, the Parent sold principally all of Kerr CPD's
property, plant and equipment, certain intangibles and a portion of Kerr
CPD's inventory to ALLTRISTA Corporation (ALLTRISTA) for a purchase price
of $14,500. The Parent expects to receive approximately $16,500,
primarily during the remainder of 1996, from the sale to consumer
products customers of Kerr CPD inventory retained and from collection of
Kerr CPD accounts receivables retained. ALLTRISTA will act as agent in
selling the inventory retained by Kerr CPD.
<PAGE>
Item 7 (b) Pro Forma Financial Information
<TABLE>
<CAPTION>
Alltrista Corporation
Pro Forma Condensed Combined Balance Sheet
As of March 31, 1996
(in thousands)
(Unaudited)
----------------------------------------------------
Alltrista
Corporation Pro Forma Pro Forma
(as reported) Adjustments Combined
----------------- ---------------- --------------
(2)
<S> <C> <C> <C>
ASSETS
Current assets
Cash and cash equivalents $ 1,464 $ $ 1,464
Net assets held for sale 12,621 12,621
Accounts receivable, net 41,390 5,300 a 46,690
Inventories 54,145 10,200 a 64,345
Deferred taxes on income 2,849 500 b 3,349
Prepaid expenses 646 646
------------ ------------- ------------
Total current assets 113,115 16,000 129,115
------------ ------------- ------------
Property, plant and equipment 149,538 149,538
Accumulated depreciation (100,934) (100,934)
------------ ------------- ------------
48,604 48,604
Intangibles and other assets 18,519 18,519
------------ ------------- ------------
Total assets $180,238 $ 16,000 $196,238
============ ============= ============
LIABILITIES AND SHAREHOLDERS' EQUITY
Current liabilities
Notes payable $ 24,025 $ 14,700 c $ 38,725
Accounts payable 19,925 700 a 20,625
Other current liabilities 15,955 600 a 16,555
------------ ------------- ------------
Total current liabilities 59,905 16,000 75,905
------------ ------------- ------------
Noncurrent liabilities
Long-term debt 30,000 30,000
Deferred taxes on income 687 687
Other noncurrent liabilities 7,627 7,627
------------ ------------- ------------
Total noncurrent liabilities 38,314 38,314
------------ ------------- ------------
Shareholders' equity 82,019 82,019
------------ ------------- ------------
Total liabilities and shareholders' equity $180,238 $ 16,000 $196,238
============ ============= ============
The Notes to Pro Forma Condensed Combined Financial Statements should be read in
conjunction with this statement.
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
Alltrista Corporation
Pro Forma Condensed Combined Statement of Income
For the year ended December 31, 1995
(in thousands)
(Unaudited)
-----------------------------------
Alltrista Pro Forma Pro Forma
Corporation Kerr Adjustments Combined
-------------- -------------- ----------------- -------------
<S> <C> <C> <C> <C>
Net sales $ 221,458 $ 29,808 $ 3,900 d, e $ 255,166
Costs and Expenses
Cost of sales 161,662 22,502 (1,650) f 182,514
Selling, general and administrative expenses 33,256 8,260 d,g,h 40,216
(1,300)
Unusual items 2,430 2,430
-------------- -------------- -------------- -------------
Operating earnings (loss) 24,110 (954) 6,850 30,006
Interest expense, net (3,342) (1,500) i (4,842)
-------------- -------------- -------------- -------------
Income (loss) before income taxes 20,768 (954) 5,350 25,164
Provision for income taxes (8,241) (1,750) j (9,991)
-------------- -------------- -------------- -------------
Net income (loss) from continuing operations $ 12,527 ($ 954) $ 3,600 $ 15,173
============== ============== ============== =============
Per share of common stock:
Primary earnings per share $ 1.57 $ 1.90
Fully diluted earnings per share $ 1.56 $ 1.89
Weighted average shares outstanding:
Primary 7,996 7,996
Fully diluted 8,012 8,012
The Notes to Pro Forma Condensed Combined Financial Statements should be read in
conjunction with this statement.
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
Alltrista Corporation
Pro Forma Condensed Combined Statement of Income
For the three month period ended March 31, 1996
(in thousands)
(Unaudited)
-------------------------------------------------------------------
Alltrista Pro Forma Pro Forma
Corporation Kerr Adjustments Combined
-------------- -------------- ----------------- -------------
<S> <C> <C> <C> <C>
Net sales $ 51,128 $ 1,568 $ $ 52,696
Costs and Expenses
Cost of sales 37,552 1,481 (500) k 38,533
Selling, general and administrative expenses 7,753 5 300 k 8,058
-------------- -------------- -------------- --------------
Operating earnings (loss) 5,823 82 200 6,105
Interest expense, net (746) (304) (70) i (1,120)
-------------- -------------- -------------- --------------
Income (loss) before income taxes 5,077 (222) 130 4,985
Provision for income taxes (1,987) 89 (37) j (1,935)
-------------- -------------- -------------- --------------
Net income (loss) from continuing operations $ 3,090 ($ 133) $ 93 $ 3,050
============== ============== ============== ==============
Per share of common stock:
Primary earnings per share $ .38 $ .38
Fully diluted earnings per share $ .38 $ .38
Weighted average shares outstanding:
Primary 8,041 8,041
Fully diluted 8,094 8,094
The Notes to Pro Forma Condensed Combined Financial Statements should be read in
conjunction with this statement.
</TABLE>
<PAGE>
NOTES TO PRO FORMA CONDENSED COMBINED FINANCIAL STATEMENTS
1. On March 15, 1996, Alltrista Corporation ("Alltrista") acquired certain
assets related to the home food preservation products from Kerr Group, Inc.
("Kerr") and will account for the acquisition as a purchase. The Company
purchased the equipment, raw materials inventory and a license to use the Kerr
trade name for $14.5 million, financed through the Company's revolving line of
credit. In addition, the Company assumed the operating lease at Kerr's Jackson,
Tennessee manufacturing facility. The assets acquired by Alltrista are expected
to continue to be used in the home food preservation business. Concurrently with
the purchase, Alltrista and Kerr entered into a non-exclusive sales agent
agreement whereby Alltrista will sell certain pre-closing inventory of Kerr. The
"Alltrista Corporation (as reported)" column of the Pro Forma Condensed Combined
Balance Sheet includes the balances at March 31, 1996 as reported in Alltrista
Corporation's Quarterly Report on Form 10-Q. It includes approximately $1.0
million, $4.5 million, and $9.0 million of raw materials inventory, net
property, plant and equipment, and intangibles, respectively, related to the
acquisition. The "Alltrista Corporation" column of the Pro Forma Condensed
Combined Statement of Income for the period ended March 31, 1996 includes the
results of operations of the former Kerr business from the date of acquisition
through the financial statement date.
2. The accompanying Pro Forma Condensed Combined Balance Sheet as of March 31,
1996 was as if all assets and liabilities of the Kerr home food preservation
product line (including normal levels of accounts receivable, finished goods
inventories and current liabilities) had been acquired. For purposes of this
presentation, it is assumed that incremental current assets were funded by
short-term borrowings. The Pro Forma Condensed Combined Statement of Income for
the year ended December 31, 1995 and the three month period ended March 31, 1996
are adjusted to include the historical results of operations of the former Kerr
business for the respective twelve and two and one half month periods. Other pro
forma adjustments are described below. In the opinion of management, all
adjustments necessary for a fair presentation of such pro forma financial
statements have been made. The pro forma financial statements are for
information purposes only and are not necessarily indicative of the financial
condition or results of operations that would have occurred if the acquisition
had been consummated as of January 1, 1995.
3. Explanation of Pro Forma Adjustments (amounts in thousands)
(a) Incremental accounts receivable, inventory, accounts payable and other
current liabilities to adjust March 31 balances to a normal level;
conforming the accounting for customer stock programs.
(b) To record the deferred tax effect of the incremental inventory and
receivables.
(c) To increase short-term borrowings as identified above.
(d) A reclassification to increase sales and selling, general and
administrative expenses by $2,900 to reflect rebates and promotional
efforts classified as a contra sale in the Kerr Statement of Income.
(e) Reduction of $1,000 in freight costs due to the use of fewer public
warehouses and reduced transportation costs.
(f) Estimated reduction in cost of sales to eliminate carryover costs from the
shut down of the Kerr Chicago plant of $200 and elimination of $1,450 of
start-up costs for the first year in the Jackson, TN facility.
(g) Decrease in selling, general and administrative expenses of $500 for fewer
public warehouses, less inventory than Kerr carried during start-up of the
Jackson, TN plant, and a $4,600 decrease to remove parent allocated
expenses and redundant employee costs.
(h) Amortization expense of $900 for Kerr Brand tradename being amortized
over 10 years.
(i) Interest expense has been increased by the amount obtained by applying the
Company's annual and quarterly average borrowing rates to the sum, for the
respective periods, of average working capital less cash flow (defined for
purposes of the calculation as net income before depreciation) and the
$14,500 purchase price paid in 1996 on the acquisition date.
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(j) Income taxes have been provided at the Company's approximate effective tax
rate of 40%.
(k) Cost of sales and selling, general and administrative expenses have been
adjusted in a manner similar to the annual pro forma statement of income to
reflect promotional efforts, reduced start-up costs, and amortization and
general and administrative expenses that would have been incurred under
Alltrista ownership.
