SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
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FORM 8-K
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 9, 1999
ABT BUILDING PRODUCTS CORPORATION
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(Exact name of registrant as specified in its charter)
Delaware 0-21856 13-3684348
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(State or other (Commission (IRS Employer
jurisdiction of File Number) Identification No.)
incorporation)
One Neenah Center, Neenah, Wisconsin 54956
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(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code: (920) 751-8611
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Item 2. Acquisition or Disposition of Assets
On February 9, 1999, ABTco, Inc., a wholly-owned subsidiary of the
Registrant, completed the sale of substantially all of the assets of the fiber
cement facility located in Roaring River, North Carolina, to CertainTeed
Corporation for a purchase price of approximately $47 million in cash pursuant
to its Asset Purchase Agreement, dated December 21, 1998, negotiated on an
arm's-length basis. The proceeds of the sale were used to pay down existing
indebtedness of the Registrant. The assets disposed of consisted primarily of
plant, property, equipment and inventory.
Item 7. Exhibits
(a) Financial Statements of Business Acquired.
Not applicable.
(b) Pro Forma Financial Information.
Set forth below are the unaudited consolidated balance sheets of
ABT Building Products Corporation for December 31, 1997 and 1998, and the
related statements of operations for each of the two years in the period ended
December 31, 1998. The consolidated balance sheets and the related statements of
operations reflect the discontinued operations of the fiber cement facility for
the years ended December 31, 1997 and 1998.
ABT Building Products Corporation and Subsidiaries
Balance Sheets (unaudited)
(in thousands)
December 31,
1997 1998
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Assets
CURRENT ASSETS
Cash and cash equivalents $ 329 $ 1,016
Accounts receivable, less allowances of
$6,291 and $7,244, respectively 28,581 28,612
Inventories 50,523 47,660
Prepaid expenses 5,220 3,615
Deferred tax assets 1,313 2,610
Net assets of discontinued operations 69,373 46,797
Total Current Assets 155,339 130,310
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PROPERTY, PLANT AND EQUIPMENT
Land 4,063 4,137
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Buildings and improvements 33,144 37,164
Machinery and equipment 124,179 142,818
Furniture and fixtures 5,031 5,288
Construction in progress 16,771 1,058
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183,188 190,465
Less accumulated depreciation (41,062) (52,367)
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Net property, plant and equipment 142,126 138,098
OTHER ASSETS, Net 3,024 3,416
GOODWILL, Net 7,723 7,255
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Total Assets $ 308,212 $ 279,079
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Liabilities & Stockholders' Equity
CURRENT LIABILITIES
Current maturities of long-term debt $ 12,501 $ 12,500
Accounts payable 13,658 13,747
Accrued expenses 11,200 14,461
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Total Current Liabilities 37,359 40,708
LONG-TERM DEBT 120,410 89,922
OTHER LONG TERM LIABILITIES 7,241 7,469
DEFERRED INCOME TAXES 18,361 15,838
STOCKHOLDERS' EQUITY
Common stock 122 122
Additional paid-in capital 59,926 59,521
Cumulative translation adjustment (1,556) (2,871)
Retained earnings 92,127 92,893
Less treasury shares (25,778) (24,523)
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Total Stockholders' Equity 124,841 125,142
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Total Liabilities and Stockholders'
Equity $ 308,212 $ 279,079
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ABT Building Products Corporation and Subsidiaries
Statements of Income (unaudited)
(in thousands, except per share data)
YEAR ENDED
DECEMBER 31,
1997 1998
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NET SALES $ 316,984 $ 317,304
COST OF SALES 219,360 227,989
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Gross Profit 97,624 89,315
SELLING, GENERAL AND
ADMINISTRATIVE EXPENSES 52,521 52,073
RESTRUCTURING CHARGE 10,397 -
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Operating Income 34,706 37,242
OTHER INCOME (EXPENSE) (8,081) (9,573)
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Income before income taxes 26,625 27,669
PROVISION FOR INCOME TAXES 10,134 10,515
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INCOME FROM CONTINUING OPERATIONS 16,491 17,154
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DISCONTINUED OPERATIONS:
Loss from operations of discontinued business
net of income tax benefit (1,001) (4,732)
Loss on disposal of discontinued business,
net of income tax benefit - (11,656)
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Net Income $ 15,490 $ 766
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INCOME PER COMMON SHARE
FROM CONTINUING OPERATIONS
BASIC $ 1.56 $ 1.61
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DILUTED $ 1.42 $ 1.51
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FROM OPERATIONS OF DISCONTINUED BUSINESS
BASIC $ (0.09) $ (0.44)
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FROM DISPOSAL OF DISCONTINUED BUSINESS
BASIC $ - (a) $ (1.09)
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NET INCOME PER SHARE
BASIC $ 1.47 $ 0.07
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DILUTED $ 1.34 $ 0.07
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WEIGHTED AVERAGE COMMON SHARES OUTSTANDING
BASIC 10,547 10,660
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DILUTED 11,578 11,369
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(a) Not shown because anti-dilutive
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(c) Exhibits.
Exhibit Number Description
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2.1 First Amendment to Asset Purchase Agreement,
dated February 9, 1999, among ABTco, Inc. as
Seller, ABT Building Products Corporation as
Stockholder of Seller and CertainTeed
Corporation as Buyer
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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.
ABT Building Products Corporation
Date: February 23, 1999 By: /s/ Joseph P. O'Neill
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Name: Joseph P. O'Neill
Title: Vice President and Chief Financial
Officer
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EXHIBIT INDEX
Exhibit Number Description Page No.
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2.1 First Amendment to Asset Purchase 8
Agreement, dated February 9, 1999, among
ABTco, Inc. as Seller, ABT Building Products
Corporation as Stockholder of Seller and
CertainTeed Corporation as Buyer
8
Exhibit 2.1
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FIRST AMENDMENT TO ASSET PURCHASE AGREEMENT
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THIS FIRST AMENDMENT TO ASSET PURCHASE AGREEMENT ("Amendment") is dated
as of February 9, 1999, and is among CertainTeed Corporation, a corporation
organized and existing under the laws of Delaware with offices at 750 East
Swedesford Road, Valley Forge, Pennsylvania, 19482 (the "Buyer"), and ABTco,
Inc., a corporation organized and existing under the laws of Delaware with
offices at One Neenah Center, Neenah, Wisconsin 54946 (the "Seller"), and ABT
Building Products Corporation, a corporation organized and existing under the
laws of Delaware with offices at One Neenah Center, Neenah, Wisconsin 54946 (the
"Stockholder").
RECITALS
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A. The parties hereto have entered into that certain Asset Purchase
Agreement dated as of December 21, 1998 (the "Purchase Agreement", to which
reference is made for the definitions of all capitalized terms used but not
otherwise defined herein), pursuant to which the Seller has agreed to sell, and
the Buyer has agreed to purchase, certain assets of Seller comprising the
Business.
B. The parties to the Purchase Agreement desire to amend the Purchase
Agreement on the terms and conditions contained herein.
AGREEMENT
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NOW, THEREFORE, in consideration of the mutual covenants contained
herein, and for other valuable consideration the receipt and sufficiency of
which are hereby acknowledged, the parties hereto agree as follows:
1. Amendment to Purchase Agreement. With effect from the date hereof:
(a) Section 4.2.11 of the Purchase Agreement is deleted in its
entirety, and replaced with the following:
4.2.11. Collection of Receivables.
A. Seller's Receivables. After the Closing Date, Seller shall collect
Seller's accounts receivable relating to the Business ("Seller Business
Receivables") in a manner consistent with the policies and practices used by
Seller in the collection of its own accounts receivable and in compliance with
all applicable Laws. For the
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purposes of this Section 4.2.11, the combination of the Seller Business
Receivables plus all other receivables of Seller shall collectively be referred
to as "Seller Receivables".
B. Buyer's Receivables. After the Closing Date, Seller shall render to
Buyer certain services in connection with Buyer's accounts receivable relating
to the Business ("Buyer Receivables") according to the procedures and other
provisions set forth in the Technology Transfer and Services Agreement dated as
of the date hereof.
C. Attribution of Receivables. If any party hereto receives a payment
from a third party that belongs to any other party to this Agreement, other than
receipt by Seller of Buyer Receivables pursuant to the Technology Transfer and
Services Agreement, then the recipient shall promptly forward the payment (or
the equivalent amount, if already deposited, together with a copy of the front
of the payment check received) to such other party. For the purpose of
attributing payments received by Seller to outstanding receivables the following
procedure shall be observed:
(i) If, on the date a payment is received from an account
debtor there are no Buyer Receivables but there are Seller Receivables from such
account debtor, the payment shall be attributed to the Seller Receivables.
(ii) If, on the date a payment is received from an account
debtor there are no Seller Receivables but there are Buyer Receivables from such
account debtor, the payment shall be attributed to the Buyer Receivables.
(iii) If, on the date a payment is received from an account
debtor there are both Buyer Receivables and Seller Receivables from such account
debtor, the payment shall be attributed first to a particular invoice or
receivable requested or identified by the account debtor, second to a particular
invoice or receivable to which such payment may logically be attributed (e.g. an
invoice or receivable in a matching amount), and third to the oldest
non-disputed invoice of the account debtor. For the purposes of this Section
4.2.11, an invoice or receivable shall be considered disputed if the account
debtor has disputed in writing the invoice or receivable for any reason.
(b) The following additional Section 4.2.14 shall be added to
the Purchase Agreement:
4.2.14 Real Estate Taxes. Seller shall pay when due all1999 real estate
Taxes and personal property Taxes on the Real Property and the Acquired Assets,
including, without limitation, taxes due to the municipality of Roaring River,
North Carolina and Wilkes County North Carolina. If the amount of the 1999 real
estate Taxes and personal property Taxes on the Real Property are in excess of
the 1998 real estate
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Taxes and personal property Taxes on the Real Property, Buyer shall pay to
Seller the pro rata portion of such increase. Upon Buyer's request, Seller shall
provide Buyer with written evidence of such payment.
(c) Section 4.3.3 of the Purchase Agreement is deleted in its
entirety, and replaced with the following:
4.3.3. Wage Subsidy. On or before the ninetieth (90th) day after the Closing
Date, Seller shall pay to Buyer the sum of Ninety Thousand Dollars ($90,000), to
be applied by Buyer against the then current and future wage and benefit costs
for the Transferred Business Employees.
(d) Section 6.1 of the Purchase Agreement is deleted in its
entirety, and replaced with the following:
6.1. COMPLETION OF PHYSICAL INVENTORY. Not more than seven (7) days prior to
the Closing Date, Buyer and Seller shall jointly conduct a physical count of the
Inventory located on the Real Property which amount shall be adjusted after the
Closing Date to reflect actual sales, production of finished goods, purchase of
raw materials and other transactions prior to the Effective Time using standard
accounting cutoff procedures ("Physical Inventory on Real Property"). Not more
than forty five (45) days after the Closing Date, Buyer and Seller shall jointly
conduct a physical count of the Inventory located at the locations listed on
Schedule 3.1.3.F, which amount shall be adjusted for each location to reflect
sales activity, damage and shrinkage between the Effective Time and the date
such physical count is conducted. ("Physical Inventory at Consignment
Locations"). The sum of the Physical Inventory on Real Property and the Physical
Inventory at Consignment Locations shall be deemed the physical inventory as of
the Closing Date ("Physical Inventory").
(e) Section 6.5 of the Purchase Agreement is deleted in its
entirety, and replaced with the following:
6.5. PURCHASE PRICE ADJUSTMENT. If the Final Purchase Price calculated using
the results of the Physical Inventory is greater than the Estimated Purchase
Price, then Buyer shall pay the difference between such amounts to Seller. If
the Final Purchase Price is less than the Estimated Purchase Price, then Seller
shall pay the difference between such amounts to Buyer. Such payment shall be
made by wire transfer in immediately available funds to an account designated by
the recipient. The payment of the Purchase Price Adjustment shall be made within
ten (10) days following the final determination of the Physical Inventory. In
order to determine the Physical Inventory, within sixty (60) days following the
Closing Date, Seller shall cause the Physical Inventory to be calculated and
such calculation shall be delivered to Buyer. Within ten (10) days of Buyer's
receipt of Seller's calculation of Physical Inventory, Buyer shall, in writing,
either (i) advise Seller that Buyer agrees with
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Seller's calculation of the Physical Inventory; or (ii) advise Seller, in
reasonable detail, of the nature and extent of any disagreement with Seller's
calculation of the Physical Inventory. If, after good faith negotiations, Buyer
and Seller are unable to resolve any such disagreement within ten (10) days
after Buyer's notice to Seller, the parties shall submit the determination of
any disputed items to a national certified public accounting firm reasonably
acceptable to both parties (the "Accounting Arbitrator"). The Accounting
Arbitrator shall determine which of the positions asserted, either that asserted
by Buyer or that asserted by Seller is correct. The Accounting Arbitrator's
decision on the disputed items shall be final and binding on the parties and
shall not be appealable to any court. Each party shall bear the fees and
expenses of its own representatives in connection with the determination of the
Physical Inventory, and shall share equally the fees and expense of the
Accounting Arbitrator.
(f) Schedule 4.2.7 shall be deleted in its entirety and
replace with the new Schedule 4.2.7 attached hereto as Exhibit A.
2. No Other Modifications. Except as modified by the terms of this
Amendment, all provisions of the Purchase Agreement shall remain unchanged and
are in full force and effect and shall continue to be binding on the parties
hereto. From the date hereof, the Purchase Agreement and this Amendment shall be
read as one document.
IN WITNESS WHEREOF, the parties hereto, intending to be legally bound
by the terms hereof, have hereunto set their hands, as of the date first above
written.
CERTAINTEED CORPORATION
By: /s/
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Bradford C. Mattson, Executive Vice President -
Exterior Building Products
ABTco, INC.
By: /s/
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Joseph P. O'Neill, Vice President and
Chief Financial Officer
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ABT BUILDING PRODUCTS CORPORATION
By: /s/
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Joseph P. O'Neill, Vice President and
Chief Financial Officer
