<PAGE>
UNITED STATES SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 10-Q/A NO. 1
[X] Quarterly Report Pursuant to Section 13 or 15 (d) of the Securities
Exchange Act of 1934
For the quarterly period ended SEPTEMBER 30, 1996
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: 1-11962
COLEMAN WORLDWIDE CORPORATION
(Exact name of registrant as specified in its charter)
DELAWARE 13-3704484
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
1767 DENVER WEST BOULEVARD, GOLDEN, COLORADO 80401
(Address of principal executive offices) (Zip Code)
1526 COLE BLVD., SUITE 300, GOLDEN, COLORADO 80401
(Former address of principal executive offices) (Zip Code)
303-202-2400
(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
requirement for the past 90 days. /X/ Yes No
--- ---
The number of shares outstanding of the registrant's par value $1.00 common
stock was 1,000 shares as of December 9, 1996 all of which were held by an
indirect wholly-owned subsidiary of Mafco Holdings Inc.
<PAGE>
COLEMAN WORLDWIDE CORPORATION AND SUBSIDIARIES
The following condensed consolidated financial statements and notes
thereto are filed as part of this Amended Quarterly Report on Form 10-Q for
the period ended September 30, 1996 to correct the number of shares of The
Coleman Company, Inc. Common Stock that secure the Coleman Worldwide
Corporation ("Coleman Worldwide") non-recourse guaranty that Coleman
Worldwide provided in connection with the Coleman Holdings Inc. July 22, 1993
issuance of Senior Secured Discount Notes due 1998 as further discussed in
Footnote 8 of the Notes to Condensed Consolidated Financial Statements.
Coleman Worldwide inadvertently failed to reflect the effect of The Coleman
Company, Inc. two-for-one stock split on its Common Stock effected in the
form of a dividend to stockholders of record on June 28, 1996 which was paid
on July 15, 1996. The correct number of shares pledged to secure Coleman
Worldwide's non-recourse guaranty is 26,000,000.
INDEX
PART I. FINANCIAL INFORMATION Page
----
Item 1. Condensed Consolidated Financial Statements:
Condensed Consolidated Statements of Operations
Three months ended September 30, 1996 and 1995 and
Nine months ended September 30, 1996 and 1995 . . . . . . . 3
Condensed Consolidated Balance Sheets
September 30, 1996 and December 31, 1995. . . . . . . . . . 4
Condensed Consolidated Statements of Cash Flows
Nine months ended September 30, 1996 and 1995 . . . . . . . 5
Notes to Condensed Consolidated Financial Statements . . . . . . 6
2
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COLEMAN WORLDWIDE CORPORATION AND SUBSIDIARIES
ITEM 1. CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(In thousands)
(Unaudited)
<TABLE>
Three Months Nine Months
Ended September 30, Ended September 30,
------------------- -------------------
1996 1995 1996 1995
---- ---- ---- ----
<S> <C> <C> <C> <C>
Net revenues . . . . . . . . . . . . . . . . . . . . $269,607 $211,817 $995,821 $747,122
Cost of sales. . . . . . . . . . . . . . . . . . . . 229,713 145,885 737,423 513,119
-------- -------- -------- --------
Gross profit . . . . . . . . . . . . . . . . . . . . 39,894 65,932 258,398 234,003
Selling, general and administrative expenses . . . . 89,351 42,768 215,102 128,288
Interest expense . . . . . . . . . . . . . . . . . . 13,012 9,140 37,762 26,743
Amortization of goodwill and deferred charges. . . . 2,944 2,108 8,402 6,108
Other expense (income), net. . . . . . . . . . . . . 578 133 (1,520) 13
-------- -------- -------- --------
(Loss) earnings before income taxes,
minority interest and extraordinary item . . . . . (65,991) 11,783 (1,348) 72,851
Provision for income tax (benefit) expense . . . . . (15,534) 4,561 6,248 28,301
Minority interest in (loss) earnings of Camping Gaz (81) -- 1,870 --
Minority interest in (loss) earnings of Coleman. . . (8,329) 1,391 (1,092) 8,349
-------- -------- -------- --------
(Loss) earnings before extraordinary item. . . . . . (42,047) 5,831 (8,374) 36,201
Extraordinary loss on early extinguishment
of debt, net of income tax benefit . . . . . . . . (5) (787) (1,244) (787)
-------- -------- -------- --------
Net (loss) earnings. . . . . . . . . . . . . . . . . $(42,052) $ 5,044 $ (9,618) $ 35,414
-------- -------- -------- --------
-------- -------- -------- --------
</TABLE>
See Notes to Condensed Consolidated Financial Statements
3
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COLEMAN WORLDWIDE CORPORATION AND SUBSIDIARIES
CONDENSED CONSOLIDATED BALANCE SHEETS
(In thousands)
(Unaudited)
<TABLE>
September 30, December 31,
1996 1995
------------- ------------
ASSETS
<S> <C> <C>
Current assets:
Cash and cash equivalents. . . . . . . . . . . . . . . . . . $ 43,757 $ 12,065
Accounts receivable, net . . . . . . . . . . . . . . . . . . 285,529 165,309
Inventories. . . . . . . . . . . . . . . . . . . . . . . . . 288,884 216,236
Deferred tax assets. . . . . . . . . . . . . . . . . . . . . 30,060 20,481
Prepaid assets and other . . . . . . . . . . . . . . . . . . 21,250 22,420
---------- --------
Total current assets . . . . . . . . . . . . . . . . . . 669,480 436,511
Property, plant and equipment, net . . . . . . . . . . . . . . 203,652 162,691
Intangible assets related to businesses acquired, net. . . . . 339,140 225,247
Note receivable - affiliate. . . . . . . . . . . . . . . . . . 54,739 50,685
Deferred tax assets and other. . . . . . . . . . . . . . . . . 39,109 31,255
---------- --------
$1,306,120 $906,389
---------- --------
---------- --------
LIABILITIES AND STOCKHOLDER'S EQUITY
Current liabilities:
Accounts and notes payable . . . . . . . . . . . . . . . . . $ 166,674 $ 90,679
Other current liabilities. . . . . . . . . . . . . . . . . . 135,058 59,213
---------- --------
Total current liabilities. . . . . . . . . . . . . . . . 301,732 149,892
Long-term debt . . . . . . . . . . . . . . . . . . . . . . . . 744,568 519,640
Income taxes payable - affiliate . . . . . . . . . . . . . . . 43,605 37,846
Other liabilities. . . . . . . . . . . . . . . . . . . . . . . 71,839 48,072
Minority interest. . . . . . . . . . . . . . . . . . . . . . . 50,820 49,266
Contingencies. . . . . . . . . . . . . . . . . . . . . . . . .
Stockholder's equity:
Common stock . . . . . . . . . . . . . . . . . . . . . . . . 1 1
Additional paid-in capital . . . . . . . . . . . . . . . . . 23,541 23,496
Retained earnings. . . . . . . . . . . . . . . . . . . . . . 68,205 77,823
Currency translation adjustment. . . . . . . . . . . . . . . 1,809 353
---------- --------
Total stockholder's equity . . . . . . . . . . . . . . . 93,556 101,673
---------- --------
$1,306,120 $906,389
---------- --------
---------- --------
</TABLE>
See Notes to Condensed Consolidated Financial Statements
4
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COLEMAN WORLDWIDE CORPORATION AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(In thousands)
(Unaudited)
<TABLE>
Nine Months
Ended September 30,
-----------------------
1996 1995
---- ----
<S> <C> <C>
CASH FLOWS FROM OPERATING ACTIVITIES:
Net (loss) earnings. . . . . . . . . . . . . . . . . . . . . . . $ (9,618) $ 35,414
--------- ---------
Adjustments to reconcile net (loss) earnings to net cash flows
from operating activities:
Depreciation and amortization. . . . . . . . . . . . . . . . 27,774 19,846
Non-cash tax sharing agreement provision . . . . . . . . . . 5,759 20,277
Non-cash restructuring and other charges . . . . . . . . . . 33,268 --
Interest accretion . . . . . . . . . . . . . . . . . . . . . 8,976 8,474
Non-cash gain on LYONs conversion. . . . . . . . . . . . . . (2,755) --
Extraordinary loss on early extinguishment of debt . . . . . 2,090 1,290
Minority interest in earnings of Camping Gaz . . . . . . . . 1,870 --
Minority interest in (loss) earnings of Coleman. . . . . . . (1,092) 8,349
Change in assets and liabilities:
Increase in receivables. . . . . . . . . . . . . . . . . . (60,693) (58,547)
Increase in inventories. . . . . . . . . . . . . . . . . . (29,513) (22,203)
(Decrease) increase in accounts payable. . . . . . . . . . (22,216) 4,667
Other, net . . . . . . . . . . . . . . . . . . . . . . . . 23,729 3,126
--------- ---------
(12,803) (14,721)
--------- ---------
Net cash (used) provided by operating activities . . . . . . . . (22,421) 20,693
--------- ---------
CASH FLOWS FROM INVESTING ACTIVITIES:
Capital expenditures . . . . . . . . . . . . . . . . . . . . . . (27,666) (21,024)
Purchases of businesses, net of cash acquired. . . . . . . . . . (158,414) (19,915)
Increase in note receivable - affiliate. . . . . . . . . . . . . (4,054) (6,742)
Proceeds from sale of fixed assets . . . . . . . . . . . . . . . 1,567 1,391
--------- ---------
Net cash used by investing activities. . . . . . . . . . . . . . (188,567) (46,290)
--------- ---------
CASH FLOWS FROM FINANCING ACTIVITIES:
Net payments of revolving credit
agreement borrowings . . . . . . . . . . . . . . . . . . . . . (14,686) (100,213)
Net change in short-term borrowings. . . . . . . . . . . . . . . 33,215 14,137
Proceeds from issuance of long-term debt . . . . . . . . . . . . 235,678 200,000
Repayment of long-term debt. . . . . . . . . . . . . . . . . . . (9,908) (74,320)
Debt issuance and refinancing costs. . . . . . . . . . . . . . . (2,296) (3,494)
Purchases of Company common stock. . . . . . . . . . . . . . . . (2,329) (4,086)
Proceeds from stock options exercised. . . . . . . . . . . . . . 1,724 3,633
Other, net . . . . . . . . . . . . . . . . . . . . . . . . . . . 45 130
--------- ---------
Net cash provided by financing activities. . . . . . . . . . . . 241,443 35,787
--------- ---------
Effect of exchange rate changes on cash. . . . . . . . . . . . . 1,237 1,360
--------- ---------
Net decrease in cash and cash equivalents. . . . . . . . . . . . 31,692 11,550
Cash and cash equivalents at beginning of the period . . . . . . 12,065 8,319
--------- ---------
Cash and cash equivalents at end of the period . . . . . . . . . $ 43,757 $ 19,869
--------- ---------
--------- ---------
</TABLE>
See Notes to Condensed Consolidated Financial Statements
5
<PAGE>
COLEMAN WORLDWIDE CORPORATION AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(In thousands, except share data)
(Unaudited)
1. BASIS OF FINANCIAL STATEMENT PRESENTATION
Coleman Worldwide Corporation ("Coleman Worldwide") is a holding company
formed in March 1993 in connection with the offering of Liquid Yield Option-TM-
Notes due 2013 (the "LYONs"-TM-). Coleman Worldwide also holds 44,067,520
shares of the common stock of The Coleman Company, Inc. (the "Company" or
"Coleman") which represents approximately 83% of the outstanding Coleman
common stock as of September 30, 1996. Coleman Worldwide is a holding
company with no business operations or source of income of its own.
The accompanying unaudited condensed consolidated financial statements of
Coleman Worldwide include the accounts of Coleman Worldwide and Coleman and its
subsidiaries after elimination of all material intercompany accounts and
transactions and have been prepared in accordance with generally accepted
accounting principles for interim financial information and with the
instructions to Form 10-Q and Article 10 of Regulation S-X. Accordingly, they
do not include all of the information and footnotes required by generally
accepted accounting principles for complete financial statements. In the
opinion of management, all adjustments (consisting of normal recurring accruals)
considered necessary for a fair presentation have been included. Operating
results for the nine months ended September 30, 1996 are not necessarily
indicative of the results that may be expected for the year ended December 31,
1996. The balance sheet at December 31, 1995 has been derived from the audited
financial statements for that date but does not include all of the information
and footnotes required by generally accepted accounting principles for complete
financial statements. For further information, refer to the consolidated
financial statements and footnotes thereto included in the Coleman Worldwide
annual report on Form 10-K for the year ended December 31, 1995.
2. INVENTORIES
The components of inventories consist of the following:
September 30, December 31,
1996 1995
------------- ------------
Raw material and supplies $ 84,639 $ 57,653
Work-in-process 7,667 5,389
Finished goods 196,578 153,194
-------- --------
$288,884 $216,236
-------- --------
-------- --------
3. ACQUISITIONS
On January 2, 1996, the Company purchased substantially all the assets and
assumed certain liabilities of Seatt Corporation ("Seatt"), a leading designer,
manufacturer and distributor of a broad range of safety and security related
electronic products for residential and commercial applications. The Seatt
acquisition, which was accounted for under the purchase method, was completed
for approximately $65,200 including fees and expenses. The results of
operations of Seatt have been included in the consolidated financial statements
from the date of acquisition. In connection with the preliminary purchase price
allocation of the Seatt acquisition, the Company recorded goodwill of
approximately $40,400. The Company is amortizing this amount over 40 years
6
<PAGE>
on the straight-line method.
On February 28, 1996, the Company and Butagaz S.N.C. ("Butagaz"), a
subsidiary of Societe de Petroles Shell S.A., jointly announced they had entered
into an agreement (the "Share Purchase Agreement") in connection with the sale
to Coleman of approximately 60 percent of the outstanding shares of Application
des Gaz, S.A. ("ADG" or "Camping Gaz"). Camping Gaz is the leading manufacturer
and distributor of camping appliances in Europe. Pursuant to the terms of the
Share Purchase Agreement and other related documents dated February 27, 1996,
Coleman has the right to, and intends to during the fourth quarter of 1996,
acquire the remaining shares held by Butagaz for approximately French Franc
48,434 (approximately $9,400 at current exchange rates), which represents
approximately 10% of the outstanding shares of ADG, and accordingly considers
these shares as under the control of the Company. The Company obtained
effective control of Camping Gaz on March 1, 1996. On June 24, 1996, Coleman
commenced a public tender offer for the purchase of all the publicly traded
outstanding shares of ADG, or approximately 30% of the outstanding shares. The
tender offer period expired in July 1996 with approximately 94% of the
outstanding publicly traded shares of ADG tendered for purchase. The Company
completed the necessary steps to acquire the remaining publicly held stock
during the third quarter of 1996. The cost of acquiring all the shares of ADG
is approximately French Franc 477,822 (approximately $94,100) plus fees and
expenses of approximately $5,000.
The acquisition of Camping Gaz is being accounted for under the purchase
method. In connection with the preliminary allocation of purchase price to the
fair values of assets acquired and liabilities assumed in connection with the
acquisition of Camping Gaz, the Company recorded goodwill of approximately
$75,800, which is being amortized over 40 years on the straight-line method.
The Company has included the results of operations of Camping Gaz in the
consolidated financial statements from March 1, 1996, the date on which the
Company obtained effective control of Camping Gaz, and has recognized minority
interest related to the publicly traded shares for the period March 1, 1996
through June 30, 1996.
The following summarized, unaudited pro forma results of operations for the
nine months ended September 30, 1996 and 1995 assumes the acquisition of Seatt
and the acquisition of all the outstanding shares of Camping Gaz occurred as of
the beginning of the respective periods. The pro forma results include certain
adjustments, primarily reflecting increased amortization and interest expense
and a lower income tax provision, and are not necessarily indicative of what the
results of operations would have been had the Seatt and Camping Gaz acquisitions
occurred at the beginning of the respective periods. Moreover, the pro forma
information is not intended to be indicative of future results of operations.
Nine Months ended
September 30,
-----------------------
1996 1995
---------- ---------
Net revenues. . . . . . . . . . . . . . . . . . $1,021,975 $ 971,840
(Loss) earnings before extraordinary item . . . (8,508) 39,396
Net (loss) earnings . . . . . . . . . . . . . . (9,752) 38,609
7
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4. RELATED PARTY TRANSACTION
The Company has entered into an agreement with an affiliate in which the
Company expects to realize tax benefits associated with certain foreign tax net
operating loss carryforwards that had not previously been recognized.
Substantially all of the estimated $1,800 benefit is reflected in Coleman
Worldwide's provision for income taxes for the nine month period ended
September 30, 1996, with approximately $564 of this benefit reflected in
Coleman Worldwide's provision for income taxes during the three month period
ended September 30, 1996.
5. RESTRUCTURING AND OTHER CHARGES
During the three month period ended September 30, 1996, the Company
recorded restructuring and certain other charges totaling $44,495, net of tax.
The restructuring charges total $32,380, net of tax, and consist of charges to
integrate the Camping Gaz and Coleman operations into a single global recreation
products business, exit the low end electric pressure washer business, and
increase the valuation reserve for certain foreign deferred income tax assets.
Other charges of $12,115, net of tax, relate to litigation associated with
certain of the Company's battery powered lights, certain asset write-offs and
certain foreign tax matters. These other charges were incurred in the Company's
normal course of business, although the amounts involved are higher than similar
charges that the Company has recorded in prior periods. Cost of sales includes
a pre-tax charge of $33,567, selling, general and administrative expenses
includes a pre-tax charge of $23,767 and the provision for income tax benefit
includes $12,839 of tax benefits resulting from these charges, net of the effect
of an increase in the valuation reserve related to certain foreign deferred tax
assets and other foreign tax charges. The Company anticipates incurring
additional charges of $5,000 to $7,000, net of tax, during the fourth quarter of
1996 related to the Company's restructuring actions.
6. LONG-TERM DEBT
On April 30, 1996, the Company amended its unsecured credit agreement (the
"Company Credit Agreement") to revise several of the terms and provisions of the
Company Credit Agreement and to allow for the issuance of additional long-term
notes. In connection with the Company recording the restructuring and other
charges as discussed in footnote 6, the Company further amended the Company
Credit Agreement on October 25, 1996. The Company Credit Agreement, as amended,
provides for (a) an unsecured French Franc term loan in the amount of French
Franc 385,125 ($75,000 at the then current exchange rates) and (b) an unsecured
revolving credit facility of $275,000. The Company Credit Agreement, as
amended, is available to the Company until April 30, 2001.
The outstanding loans under the Company Credit Agreement, as amended, bear
interest at either of the following rates, as selected by the Company from time
to time: (i) the higher of the agent's base lending rate or the federal funds
rate plus .50% or (ii) the London Inter-Bank Offered Rate ("LIBOR") plus a
margin ranging from .25% to 1.875% based on the Company's financial performance.
If there is a default, the interest rate otherwise in effect will be increased
by 2% per annum. The Company Credit Agreement also bears an overall facility
fee ranging from .15% to .375% based on the Company's financial performance.
The amended Company Credit Agreement contains various restrictive
covenants, including without limitation, requirements for the maintenance of
specified financial ratios and levels of consolidated net worth and certain
other provisions limiting the incurrence of additional debt, purchase or
redemption of Coleman Common Stock, issuance of Coleman Preferred Stock, and
also prohibits the Company from paying any
8
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dividends until on or after January 1, 1999.
9
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COLEMAN WORLDWIDE CORPORATION AND SUBSIDIARIES
In connection with the amending and restating of the Company's previous
credit agreement in April 1996, the Company recognized an extraordinary loss of
approximately $1,078 ($647 after taxes, or $0.01 per share) in the nine months
ended September 30, 1996, which represents the write-off of the related
unamortized financing costs associated with the Company's previous credit
agreement.
On June 13, 1996, the Company completed (i) a private placement issuance
and sale of $85,000 aggregate principal amount of 7.10% Senior Notes, Series A,
due 2006 (the "Notes due 2006") and (ii) a private placement issuance and sale
of $75,000 aggregate principal amount of 7.25% Senior Notes, Series B, due 2008
(the "Notes due 2008"). Proceeds from these private placement issuances were
used (i) to finance the acquisition of Camping Gaz, and (ii) to pay down
existing indebtedness under the revolving credit facility under the Company
Credit Agreement. The Notes due 2006 bear interest at the rate of 7.10% per
annum payable semiannually, and the principal amount is payable in annual
installments of $12,143 commencing June 13, 2000 with a final payment due on
June 13, 2006. If there is a default, the interest rate will be the greater of
(i) 9.10 % or (ii) 2% above the prime interest rate. The Notes due 2008 bear
interest at the rate of 7.25% per annum payable semiannually, and the principal
amount is payable in annual installments of $15,000 commencing June 13, 2004
with a final payment on June 13, 2008. If there is a default, the interest rate
will be the greater of (i) 9.25 % or (ii) 2% above the prime interest rate. The
Notes due 2006 and the Notes due 2008 are unsecured and are subject to various
restrictive covenants, including without limitation, requirements for the
maintenance of specified financial ratios and levels of consolidated net worth
and certain other provisions limiting the incurrence of additional debt and sale
and leaseback transactions under the terms of the Note Purchase Agreement.
7. SUBSEQUENT EVENT
On November 1, 1996, the Company settled all outstanding claims and
litigation with Black & Decker involving certain of the Company's light
products. The Company estimates that it will incur an after tax charge in the
fourth quarter of 1996 of approximately $8,000 to $10,000 representing costs
associated with the settlement that are in excess of reserves previously
recorded by the Company on this matter.
8. CONTINGENCIES
On July 22, 1993, Coleman Worldwide's parent, Coleman Holdings Inc.,
("Coleman Holdings") issued and sold $281,281 principal amount at maturity of
Senior Secured Discount Notes due 1998 (the "Old Notes") in a private placement
offering. Subsequent to the private placement offering, a registration
statement on Form S-1 was filed to exchange the Old Notes for Series B Senior
Secured Discount Notes (the "Notes").
The Notes will mature on May 27, 1998 and are secured by all the shares of
Coleman Worldwide. In connection with Coleman Holdings' Notes issuance, Coleman
Worldwide has provided a non-recourse guaranty, which is secured by its pledge
of 26,000,000 shares of Coleman Common Stock. There will be no periodic payment
of interest on the Notes. The aggregate principal amount of the Notes
represents a yield to maturity of 10.875% per annum (computed on a semi-annual
bond equivalent basis) calculated from July 22, 1993.
10
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COLEMAN WORLDWIDE CORPORATION AND SUBSIDIARIES
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.
COLEMAN WORLDWIDE CORPORATION
(Registrant)
Date: December 18, 1996 By: /s/ Irwin Engelman
--------------------- ----------------------------------
Irwin Engelman
Executive Vice President and Chief
Financial Officer
11
