SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K/A
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): May 10, 1996
Buckeye Cellulose Corporation
State or other jurisdiction of (I.R.S. Employer
incorporation or organization Identification No.)
Delaware 62-1518973
Buckeye Cellulose Corporation
1001 Tillman
Memphis, TN 38112
901-320-8100
<PAGE>
The undersigned registrant hereby amends the following items, financial
statements, exhibits or other portions of its Current Report on Form 8-K dated
May 2, 1996, as set forth in the pages attached hereto:
Item 7.a.
Item 7.b.
Item 7. Financial Statements and Exhibits.
7.a. Financial Statements of Business Acquired:
Audited Financial Statements of Peter Temming Aktiengesellschaft-Specialty
Pulp Business
Auditors Report Dated April 29, 1996
Balance Sheet as of December 31, 1995
Income Statement for the Year Ended December 31, 1995
Notes to Financial Statements
7.b. Pro Forma Financial Information:
Pro Forma Consolidated Balance Sheet as of December 31, 1995 (unaudited)
Pro Forma Consolidated Statement of Income for the Year Ended June 30,
1995 (unaudited)
Pro Forma Consolidated Statement of Income for the Six Months Ended
December 31, 1995 (unaudited)
Notes to the Pro Forma Consolidated Financial Statements (unaudited)
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.
Buckeye Cellulose Corporation
/s/ DAVID H. WHITCOMB
--------------------------------
David H. Whitcomb
Vice President and Comptroller
May 10, 1996
<PAGE>
Report of
Dipl.-Ing. Wolf Gadecke, Wirtschaftsprufer
Independent Auditor
Board of Directors
Buckeye Cellulose Corporation
I have audited the accompanying balance sheets of the cotton linter pulp
division of Peter Temming AG (the "Specialty Pulp Business") as of December 31,
1995, and the related statement of income for year then ended. These financial
statements are the responsibility of the Specialty Pulp Business's management.
My responsibility is to express an opinion on these financial statements based
on my audits.
I conducted my audit in accordance with generally accepted auditing standards in
the Federal Republic of Germany, which in my opinion do not differ significantly
from generally accepted auditing standards in the United States of America.
Those standards require that I plan and perform the audit to obtain reasonable
assurance about whether the financial statements are free of material
misstatements. 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.
I believe that my audit provides a reasonable basis for my opinion.
As described in the Accounting and Valuation Method's footnote to the financial
statements, the accompanying financial statements include the revenues and
expenses which are specifically identifiable with the Specialty Pulp Business,
as well as certain allocated expenses. The financial statements may not
necessarily reflect the results of operations of the Specialty Pulp Business had
it been operated as a standalone entity.
In my opinion, the financial statements referred to above present fairly, in all
material respects, the financial position of the Specialty Pulp Business at
December 31, 1995 and the results of its operations for the year then ended in
conformity with generally accepted accounting principles of the Federal Republic
of Germany.
Dipl.-Ing. Wolf Gadecke
Wirtschaftsprufer
Hamburg, April 29, 1996
<PAGE>
Peter Temming Aktiengesellschaft - Specialty Pulp Business
Balance sheet as per December 31, 1995
<TABLE>
<CAPTION>
ASSETS
DM DM
<S> <C> <C>
A. Fixed Assets
I. Intangible Assets
Industrial and similar rights, software 96.00
II. Tangible Assets
1. Land, land rights and buildings
including buildings on third party land 3,743,152.00
2. Technical equipment and machines 2,691,700.00
3. Other equipment, factory and office
equipment 639,818.00
4. Payments on account and assets under
construction 0.00 7,074,670.00
-------------
III. Financial Assets
Other loans 0.00
B. Current Assets
I. Inventories
1. Raw materials and supplies 13,518,705.00
2. Work in process 7,960.00
3. Finished goods 4,920,800.00 18,447,465.00
-------------
II. Receivables and other assets
1. Trade receivables 11,292,865.95
2. Other assets 94,503.00 11,387,368.95
-------------
III. Cash-in-hand, postal giro balances,
bank balances 916,425.00
-------------
37,826,024.95
</TABLE>
<PAGE>
Peter Temming Aktiengesellschaft - Specialty Pulp Business
Balance sheet as per December 31, 1995
<TABLE>
<CAPTION>
EQUITY AND LIABILITIES
DM DM
<S> <C> <C>
A. Equity and liabilities
I. Subscribed capital 7,000,000.00
II. Results from ordinary activities 303,320.36 7,303,320.36
-------------
B. Special reserves for tax purposes 58,701.00
C. Accruals
1. Accruals for pensions and similar obligations 610,291.00
2. Other accruals 2,447,197.00 3,057,488.00
-------------
D. Liabilities
1. Liabilities to banks 8,655,788.00
2. Trade payables 2,916,838.06
3. Payables to pension fund 154,663.00
4. Other liabilities 15,679,226.53
of which taxes: DM 348,345.60
of which relating to social security
and similar obligations: DM 401,117.00
of which affiliated companies: DM 14,434,359.35 27,406,515.59
------------- -------------
37,826,024.95
=============
</TABLE>
<PAGE>
Peter Temming Aktiengesellschaft - Specialty Pulp Business
<TABLE>
<CAPTION>
INCOME STATEMENT FOR THE YEAR ENDED DECEMBER 31, 1995
DM DM
<S> <C> <C>
1. Sales 87,015,212.18
2. Increase in finished goods inventories and work in 1,926,199.00
process
3. Production for own plant equipment capitalized 37,298.00
4. Other operating income 950,599.59
5. Material cost
Cost of raw materials, consumables and supplies and
of purchased merchandise (53,445,177.00)
--------------
6. Gross result 36,484,131.77
7. Personnel expenses
a) Wages and salaries 14,619,679.00
b) Social security and other pension cost, of
which in respect of old age pensions: DM 95,587.00 2,966,859.00 (17,586,538.00)
-------------
8. Depreciation on intangible fixed assets and (1,924,734.00)
tangible assets
9. Other operating expenses (16,388,790.41)
--------------
10. Operational result 584,069.36
11. Income from other investments and long term loans 80.00
12. Other interest and similar income 13,328.00
13. Interest and similar expenses (mainly for (294,157.00)
liabilities to banks)
-------------
14. Financial result (280,749.00)
--------------
15. Results from ordinary activities 303,320.36
==============
</TABLE>
<PAGE>
Peter Temming Aktiengesellschaft - Specialty Pulp Business
NOTES TO FINANCIAL STATEMENTS - 1995
GENERAL MATTERS
The cotton linter pulp division of Peter Temming Aktiengesellschaft (hereinafter
Peter Temming AG (the "Specialty Pulp Business") has historically been operated
as one segment of several segments comprising Peter Temming AG. Under a letter
of intention signed, the assets and business comprising the Specialty Pulp
Business, including the production plant in Gluckstadt, Germany, are to be
purchased from Peter Temming AG by Buckeye Cellulose Corporation, Memphis,
Tennessee, USA, respectively, by Buckeye Cellulose GmbH, Kappeln, Germany.
The accompanying financial statements of the Specialty Pulp Business have been
derived from the audited year end financial statements of Peter Temming AG, with
the Specialty Pulp Business to be transferred being treated as a dependent
permanent establishment. The financial statements include the assets,
liabilities, revenues and expenses which are specifically identifiable with the
Specialty Pulp Business as well as certain allocated expenses for shared
services, including cash management activities. The expenses are allocated using
formulas including estimates of effort expended and sales. The financial
statements may not necessarily reflect the results of operations of the
Specialty Pulp Business had it been operated as a standalone entity.
No allocation or calculation of income and asset taxes have been undertaken. As
a result, income statement ends with the results from ordinary activities.
ACCOUNTING AND VALUATION METHODS
The annual financial statements of the Specialty Pulp Business were prepared
according to accounting and valuation regulations specified in the Commercial
Code and the Aktiengesetz (AktG) in the Federal Republic of Germany.
Peter Temming AG provides a centralized cash management function. Many of the
Specialty Pulp Business's disbursements and collections are settled through
intercompany accounts; therefore, no statement of cash flows is presented.
Intangible assets are capitalized at their acquisition cost reduced by ordinary
amortization.
Tangible fixed assets are recorded at acquisition cost reduced by ordinary
depreciation. For personal computers and accessories a fixed value is
established. The difference between depreciation permissible under the
Commercial Code and under tax law regulations was recorded as special reserves
for tax purposes.
Declining depreciation rates are used for buildings in agreement with German tax
regulations (par. 7 Abs. 5 EStG). The useful life of buildings generally ranges
from 10 to 30 years, 40 years are applied for older buildings.
<PAGE>
The declining balance depreciation method is generally used for additions to
technical equipment and machines as well as to other equipment, factory and
office equipment, up to the year in which the straight line method results in
higher depreciation charges.
Depreciation of subsequent acquisition cost is applied using the adequate useful
life.
Movable, low value assets are expensed according to tax law regulations.
Raw materials and supplies are capitalized at the lower of acquisition cost or
current market prices valid at the balance sheet date. The acquisition cost for
raw lint includes also the internal discharging fee.
Work in process is valued at proportional manufacturing cost.
Finished goods, sorted by product, are valued at the lower of actual
manufacturing cost or net realizable value at the balance sheet date.
Manufacturing costs include direct costs as well as appropriate manufacturing
overhead and administrative expenses in relation to the manufacturing process.
Receivables and other assets are recorded at their nominal value. All
foreseeable valuation risk of trade accounts receivables and other assets are
provided for via adequate specific allowances. The general credit risk is
provided for via a general allowance taking specific conditions of different
countries into account.
The special reserve for tax purposes exclusively includes the difference between
depreciation permissible under the Commercial Code and under tax regulations and
will be released over the useful life of the assets concerned. The special
reserve for tax purposes represents an allowance of fixed assets.
Accruals take into account all recognizable risks. Direct pension payments are
accrued for according to actuarial science principles bades on an interest rate
of 6%.
Liabilities are recorded at the repayment value.
Receivables and liabilities in a foreign country (i.e. other than Deutsch mark)
are valued at the exchange rate at year end. Losses resulting from fluctuations
in exchange rates as of the transaction date and as of the balance sheet date
are included in income.
EXPLANATION WITH RESPECT TO THE BALANCE SHEET
Fixed Assets
Intangible assets cover purchased software.
Additions to tangible assets of (000) DM 1.557 reflect generally building cost
for the expansion of the shipment stock, a out-building and other remodelings at
the machine-house, of (000) DM 817 for a Yokogawa control-system, reconstruction
to a scroll-cutter and other technical equipment and machines and of (000) DM
546 for other factory and office equipment.
Current Assets
Trade accounts receivables have been reduced by allowances of (000) Dm 234.
Other assets mainly represent receivables from tax authorities and receivables
from an energy entity.
<PAGE>
Subscribed Capital
The capital of the Specialty Pulp Business, derived from Peter Temming
Aktiengesellschaft (total) balance sheet, amounts to (000) DM 7,000.
Profit on Ordinary Activities
The 1995 profit on ordinary activities for the Specialty Pulp Business as a
dependent permanent establishment amounts to (000) DM 303. Although the item is
allocated as equity (retained earnings), it was assumed that the profits are to
be distributed in full.
Special Reserve for Tax Purposes
The special reserve for tax purposes exclusively reflects depreciation in
accordance with par. 6b EStG (Income tax law) which are in excess of
depreciation under regulations of the Commercial Code.
The release of the reserve will result in income taxes at a rate of 50% as far
as profits will occur.
Accruals
The accrual for pension includes amounts as high as possible under tax
regulations. A portion of pension obligations are due from a separate pension
entity. Pension obligations are totally funded by assets of the pension entity
and pension accruals.
Other accruals primarily include waste water charges - (000) Dm 1.090;
obligations to employees - (000) Dm 890; repair and maintenance - (000) DM 141;
and open invoices of (000) DM 306.
Liabilities
Liabilities are made up as follows:
falling due
Total amount Less than 1 1-5 Years More than 5
(000) DM Year Years
--------------------------------------------------------
Liabilities to banks 8,656 6,459 2,197 -
Trade payable 2,917 2,917 - -
Payables to pensions 154 - - 154
fund
Other liabilities 15,679 15,679 - -
------ ------ ----- ---
27,406 25,055 2,197 154
====== ====== ===== ===
Liabilities to banks are secured by mortgages of (000) DM 2,656 on company real
estate.
EXPLANATIONS TO THE INCOME STATEMENT
The income statement was classified applying the total cost method.
<PAGE>
Sales
Sales are recorded without VAT. They include Specialty Pulp Business sales only.
Total sales according to regions are as follows:
Foreign Countries Federal Republic of Total DM
(DM) Germany (DM)
Specialty Pulp
Business 60,345,336.28 26,669,875.90 87,015,212.18
Other operating income
Other operating income primarily contains income from the reversal of other
accruals of (000) DM 419, the release of the general allowance of (000) DM 200
and the profit on foreign exchange (000) Dm 157.
The position includes income amounting to (000) DM 748 relating to another
business year.
Depreciation
Depreciation contains ordinary depreciation on intangible and tangible assets.
Other operating expenses
Other operating expenses mainly reflect expenses from sideline business repair
and maintenance expenses, waste and waste water charges, administration and
operating expenses as well as rent and lease expenses, other administrative
cost, travel expenses, provisions, freight and insurance expenses.
Other Remarks
Average number of employees working for the company during the business year:
1995 1994
---- ----
Hourly employees 109 108
Salaried employees 49 48
--- ---
158 156
Board of Directors:
Michael Steinbeis (chairman) Franz Stimmel Gerhard Wanko
Gluckstadt, April 18, 1996
<PAGE>
7.b. UNAUDITED PRO FORMA CONSOLIDATED FINANCIAL DATA
The following unaudited pro forma consolidated financial statements reflect the
acquisition of Peter Temming AG-Specialty Pulp Business by Buckeye Cellulose
GmbH, a wholly owned subsidiary of Buckeye Cellulose Corporation, (the
Acquisition) and also gives effect to the Company's November 1995
recapitalization and acquisition of the 50% limited partnership interest in
Buckeye Florida, Limited Partnership (the Recapitalization and Business
Combination).
The pro forma consolidated balance sheet as of December 31, 1995 has been
prepared to give effect to the Acquisition as if it had occurred on that date.
The pro forma consolidated statements of income for the year ended June 30, 1995
and the six months ended December 31, 1995 have been prepared to give effect to
the Acquisition and the Recapitalization and Business Combination as if they had
occurred on July 1, 1994. The Recapitalization and Business Combination are
reflected in the December 31, 1995 balance sheet of Buckeye Cellulose
Corporation. The pro forma consolidated balance sheet at December 31, 1995 gives
effect to the extraordinary loss, net of related tax benefit, of $3,228,000
recognized on the early retirement of existing notes, as well as $1,174,000 in
issuance costs incurred by the Company in connection with the secondary equity
offering. These costs have not been included in the pro forma consolidated
statements of income.
The financial information of Peter Temming AG-Specialty Pulp Business included
in these unaudited pro forma consolidated financial statements has been derived
from financial statements prepared in accordance with accounting principles
generally accepted in the Federal Republic of Germany and stated in deutsche
marks. These financial statements have been conformed to comply with accounting
principles generally accepted in the United States and have been translated to
United States dollars. Such translations should not be construed as a
representation that the Deutsche mark amounts represent, or have been, or could
be converted into, United States dollars at that or any other rate.
The pro forma financial information is not necessarily indicative of the results
that would have been obtained had the Acquisition or the Recapitalization and
Business Combination been completed as of the date presented or for any future
period. Pro forma adjustments are based upon preliminary estimates, available
information and certain assumptions that management deems appropriate. The
unaudited pro forma consolidated financial data should be read in conjunction
with the Company's combined consolidated financial statements and notes thereto
included in the Registration Statement on Form S-1 as filed with the Securities
and Exchange Commission on November 21, 1995.
<PAGE>
Unaudited Pro Forma Consolidated Balance Sheet
December 31, 1995
(in thousands)
<TABLE>
<CAPTION>
Pro Forma
Historical Adjustments
------------------------------------- -----------
Peter
Buckeye Temming AG
Cellulose Specialty Pulp Pro Forma
Corporation (a) Business (b) Acquisition (c) Consolidated
--------------- ------------ --------------- ------------
<S> <C> <C> <C> <C>
Assets
Current assets
Cash and short-term investments $ 20,096 $ 640 $ (640) $ 20,419
323
Accounts receivable - net 56,477 7,891 (7,891) 56,477
Inventories 79,927 12,889 (374) 92,442
Deferred income taxes 399 399
Prepaid expenses and other 1,662 66 (66) 1,662
-------------------------------------------------------------------------------
Total current assets 158,561 21,486 (8,648) 171,399
Property, plant & equipment, net 238,066 20,399 (5,174) 253,291
Goodwill 7,788 7,788
Other 7,357 1,443 8,800
-------------------------------------------------------------------------------
Total assets $411,772 $41,885 $(12,379) $441,278
===============================================================================
Liabilities and equity
Current liabilities:
Accounts payable $ 16,169 $ 2,038 $ (2,038) $ 16,169
Accrued expenses and other liabilities 25,569 12,665 (12,205) 26,029
Income taxes payable 1,295 1,295
Current portion of long term debt 4,513 (4,513) 0
-------------------------------------------------------------------------------
Total current liabilities 43,033 19,216 (18,756) 43,493
Long-term debt 224,570 1,535 (1,535) 253,082
28,512
Postretirement benefit obligation 12,668 534 13,202
Deferred income taxes 14,301 14,301
Other liabilities 4,368 41 (41) 4,368
Equity 112,832 20,559 (20,559) 112,832
-------------------------------------------------------------------------------
Total liabilities and equity $411,772 $41,885 $(12,379) $441,278
===============================================================================
</TABLE>
See accompanying notes to pro forma financial statements.
<PAGE>
<TABLE>
Unaudited Pro Forma Consolidated Statement of Income
Year Ended June 30, 1995
(in thousands, except share data)
<CAPTION>
Pro Forma
Historical Adjustments
--------------------------------- ------------------------------------
Peter Recapitalization
Buckeye Temming AG and
Cellulose Specialty Pulp Business Pro Forma
Corporation Business (d) Combination (e) Acquisition (f) Consolidated
----------- ------------ --------------- --------------- ------------
<S> <C> <C> <C> <C> <C>
Net sales $408,587 $55,637 $ $ $464,224
Cost of goods sold 305,150 44,414 755 (1,493) 348,826
-------------------------------------------------------------------------------------
Gross margin 103,437 11,223 (755) 1,493 115,398
Selling, research and administrative expenses 24,265 11,812 718 36,795
---------------------------------------------------------------------------------------
Operating income (loss) 79,172 (589) (755) 775 78,603
Other income (expense):
Interest income 1,138 4 (836) 306
Interest expense and amortization
of debt costs (22,290) (106) 19,377 (1,711) (23,315)
466
(18,401)
(650)
Other (615) 299 (316)
Minority interest (23,223) 23,223 0
---------------------------------------------------------------------------------------
(44,990) (102) 23,478 (1,711) (23,325)
---------------------------------------------------------------------------------------
Income before income taxes 34,182 (691) 22,723 (936) 55,278
Income taxes 12,470 8,635(g) (619(g) 20,486
---------------------------------------------------------------------------------------
Net income $21,712 ($691) $14,088 ($317) $34,792
=======================================================================================
Net income per share $1.67
Weighted average shares outstanding (h) 20,819,573
</TABLE>
See accompanying notes to pro forma financial statements.
<PAGE>
<TABLE>
Unaudited Pro Forma Consolidated Statement of Income
Six Months Ended December 31, 1995
(in thousands, except per share data)
<CAPTION>
Pro Forma
Historical Adjustments
----------------------------- -----------------------------------
Peter Recapitalization
Buckeye Temming AG and
Cellulose Specialty Pulp Business Pro Forma
Corporation Business (d) Combination (e) Acquisition (f) Consolidated
----------- ------------ --------------- --------------- ------------
<S> <C> <C> <C>
Net sales $225,579 $29,519 $ $ $255,098
Cost of goods sold 158,283 26,517 377 (796) 184,381
---------------------------------------------------------------------------------
Gross margin 67,296 3,002 (377) 796 70,717
Selling, research and administrative expenses 12,121 4,045 359 16,525
---------------------------------------------------------------------------------
Operating income (loss) 55,175 (1,043) (377) 437 54,192
Other income (expense):
Interest income 1,014 4 (418) 600
Interest expense and amortization of debt costs (9,480) (130) 6,486 (855) (10,824)
183
(6,757)
(271)
Other (321) 150 (171)
Minority interest (16,628) 16,628 -
Secondary offering costs (1,174) 1,174 -
---------------------------------------------------------------------------------
(26,589) (126) 17,175 (855) (10,395)
---------------------------------------------------------------------------------
Income before income taxes and extraordinary loss 28,586 (1,169) 16,798 (418) 43,797
Income taxes 10,947 6,383(g) (603)(g) 16,727
---------------------------------------------------------------------------------
Income before extraordinary loss $ 17,639 ($1,169) $10,415 $ 185 $27,070
=================================================================================
Income per share before extraordinary loss $ 0.84 $1.30
Weighted average shares outstanding (h) 20,819,573 20,819,573
</TABLE>
See accompanying notes to pro forma financial statements.
<PAGE>
NOTES TO UNAUDITED PRO FORMA CONSOLIDATED FINANCIAL STATEMENTS
(dollars in thousands)
(a) Reflects a reclassification for the final allocation of the purchase price
of the 50% limited partnership interest in Buckeye Florida, Limited
Partnership from Procter & Gamble Cellulose. The final allocation is based
on an independent appraisal.
(b) Reflects the balances (unaudited) of Peter Temming AG-Specialty Pulp
Business at December 31, 1995, derived from the financial statements
included elsewhere herein and translated into United States dollars at the
December 31, 1995 exchange rate (DM 1.4312 to $1). The conversion of the
balance sheet from German generally accepted accounting principles to those
generally accepted in the United States resulted in an increase in
property, plant and equipment of $15,456 due to differences in depreciation
methods.
(c) Adjustments to reflect the assets and liabilities to be acquired and
assumed by Buckeye Cellulose GmbH, borrowings of $28,512 under the
Company's credit facility to finance the acquisition, and the estimated
allocation of the purchase price. The allocation of the purchase price is
based on preliminary estimates of the respective fair value of assets and
liabilities which may differ from actual fair values.
(d) Reflects the unaudited statement of operations of Peter Temming
AG-Specialty Pulp Business for the twelve months ended June 30, 1995 and
the six months ended December 31, 1995, derived from the historical
financial statements and translated into United States dollars using the
average exchange rates for the periods then ended (DM 1.4802 to $1 for the
twelve months ended June 30, 1995 and DM 1.430 to $1 for the six months
ended December 31, 1995). The conversion of the statements of operations
from German generally accepted accounting principles to those generally
accepted in the United States resulted in an increase in depreciation
expense of $915 and $600 for the twelve months ended June 30, 1995 and the
six months ended December 31, 1995, respectively.
(e) Reflects the Recapitalization and Business Combination as if they had
occurred on July 1, 1994. The increase in depreciation expense is based on
the increase in property, plant and equipment as of the acquisition date.
The borrowings and related interest expense are based on the actual sources
and uses of funds at the date of the recapitalization. Borrowings under the
Company's credit facility are at a LIBOR based rate. An increase of 1/8% in
the LIBOR rate when applied to outstanding borrowings used for the
Recapitalization and Business Combination for the year ended June 30, 1995
would decrease pro forma net income by $72.
(f) Adjustments to reflect the estimated purchase price allocation of the
Acquisition including the reduction of depreciation expense, the addition
of amortization of a non-compete agreement, and the increase of interest
expense related to borrowings of $28,512 under the Company's LIBOR based
credit facility to finance the Acquisition. An increase in LIBOR
<PAGE>
of 1/8% when applied to borrowings of $28,512 would decrease pro forma net
income by $22, for the year ended June 30, 1995.
(g) Adjustment to record income tax effects at the statutory rate of 38%.
(h) Actual weighted average shares outstanding for the six months ended
December 31, 1995 were used for purposes of calculating pro forma income
per share for the year ended June 30, 1995, and the six months ended
December 31, 1995.
