<PAGE> 1
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
-----------------------
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): September 24, 1997
United States Leather, Inc.
--------------------------------------------------------------
(Exact name of registrant as specified in its charter)
Wisconsin 33-64142 13-3503310
--------------- ---------------- ------------------
(State or other (Commission File (IRS Employer
jurisdiction of Number) Identification No.)
incorporation)
1403 West Bruce Street, Milwaukee, Wisconsin 53204
-----------------------------------------------------------------
(Address of principal executive offices, including zip code)
(414) 383-6030
-------------------------------
(Registrant's telephone number)
<PAGE> 2
Item 5. Other Events.
On September 24, 1997, United States Leather, Inc. (the "Company")
held a meeting of the holders of the Company's 10 1/4% Senior Notes due 2003
(the "Notes"). At such meeting, the Company announced that it has recommended
a process to deleverage its balance sheet. Additionally, the Company's
management presented an overview of the leather tanning business, conducted a
plant tour and provided a business update. The Company also announced that it
had reached an agreement with its bankers to waive and amend certain financial
covenants provided for in the Company's revolving credit facility. A copy of
the Company's press release dated September 24, 1997, and a copy of certain
materials presented to holders of the Notes at the meeting are included as
exhibits to this filing.
Item 7. Financial Statements and Exhibits.
(b) Exhibits.
The exhibits listed in the accompanying Exhibit Index are
filed as part of this Current Report on Form 8-K.
-2-
<PAGE> 3
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.
UNITED STATES LEATHER, INC.
Date: September 24, 1997 By: /s/ Kinzie L. Weimer
---------------------------------------
Kinzie L. Weimer
Senior Vice President, Chief Financial
Officer, Treasurer and Secretary
-3-
<PAGE> 4
UNITED STATES LEATHER, INC.
EXHIBIT INDEX TO FORM 8-K
Dated September 24, 1997
<TABLE>
<CAPTION>
Exhibit
No. Description
- ------- -----------
<S> <C>
(99.1) Press Release of United States Leather, Inc. dated
September 24, 1997.
(99.2) Materials presented to holders of the Company's 10 1/4% Senior
Notes due 2003 at the meeting held September 24, 1997.
</TABLE>
-4-
<PAGE> 1
[USL LETTERHEAD]
FOR IMMEDIATE RELEASE
For More Information Contact:
Linda Stephenson (4l4) 273-4680
UNITED STATES LEATHER, INC. MEETS WITH
ITS BONDHOLDERS
MILWAUKEE, WI, SEPTEMBER 24, 1997. . . .United States Leather, Inc. (USL)
announced today at a special meeting of its bondholders in Milwaukee that it has
recommended a process to deleverage its balance sheet.
Anthony Biancanello, president and chief executive officer of USL, said
"management believes this action allows the company to invest more fully in its
future."
United States Leather is a diversified manufacturer of finished leather,
serving the automobile, furniture and footwear markets. The company currently
has 1600 employees and has manufacturing operations that include Pfister &
Vogel and A.L. Gebhardt in Milwaukee, Lackawanna Leather in Conover, N.C. and
Omaha, NE, A.R. Clarke in Toronto, Canada and other operations in Berlin, WI
and New Albany, IN.
-MORE-
<PAGE> 2
U.S. LEATHER MEETS WITH ITS BONDHOLDERS/ADD ONE
In the past year and a half, the company has returned its corporate focus
to its core businesses (automobile, furniture and footwear), divested itself of
several non-core assets, renewed the company's focus on quality and delivery
performance, implemented company-wide information and management systems and
restructured its banking arrangements. "This undertaking is designed to
improve management and operational competence, restore technical leadership,
expand market coverage and make required strategic investments," Biancanello
said. "USL's bank lending group is supportive of the company's actions." The
firm, Houlihan Lokey Howard & Zukin, has been retained to assist the company in
this process.
Biancanello stressed that "this process will have no impact on the way the
company does business."
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<PAGE> 1
UNITED STATES LEATHER, INC.
PRESENTATION TO
HOLDERS OF
10 1/4% SENIOR NOTES
DUE 2003
SEPTEMBER 24, 1997
<PAGE> 2
[USL LOGO] BONDHOLDERS MEETING
BUSINESS UPDATE CONTENTS
SEPTEMBER 24, 1997
CONTENTS
. DYNAMICS AFFECTING THE LEATHER INDUSTRY
. USL'S CORE BUSINESSES
. RECENT FINANCIAL PERFORMANCE
. ACTIONS TO DATE
. NEXT STEPS
1
<PAGE> 3
[USL LOGO] BONDHOLDERS MEETING
BUSINESS UPDATE
SEPTEMBER 24, 1997
SPECIAL NOTE CONCERNING FORWARD-LOOKING STATEMENTS
Certain matters discussed in this presentation are "forward-looking statements"
intended to qualify for the safe harbor from liability established by the
Private Securities Litigation Reform Act of 1995. These forward-looking
statements can generally be identified as such because the context of the
statement includes words such as the Company "believes," "anticipates,"
"expects" or words of similar import. Similarly, statements that describe the
Company's future plans, objectives or goals are forward-looking statements.
Such forward-looking statements are subject to certain risks and uncertainties
which could cause actual results to differ materially from those currently
anticipated. You are urged to consider these factors carefully in evaluating
the forward-looking statements and are cautioned not to place undue reliance on
such forward-looking statements. The forward-looking statements made in this
presentation, in both the written and verbal form, are only made as of this
date, and the Company undertakes no obligation to publicly update such
forward-looking statements to reflect subsequent events or circumstances.
2
<PAGE> 4
[USL LOGO] BONDHOLDERS MEETING
BUSINESS UPDATE INDUSTRY DYNAMICS
SEPTEMBER 24, 1997
INDUSTRY DYNAMICS
3
<PAGE> 5
[USL LOGO] BONDHOLDERS MEETING INDUSTRY DYNAMICS
BUSINESS UPDATE
SEPTEMBER 24, 1997
INDUSTRY DYNAMICS BECOMING MORE DIFFICULT FOR U.S. TANNERS
<TABLE>
<CAPTION>
HIDE SUPPLY LEATHER DEMAND
<S> <C> <C>
- - 3 Dominant Suppliers - Deflationary Economy
- - Restricted Foreign Hides - Increasing Demand for Leather Goods
- - Freely Traded U.S. Hides in ENVIRONMENT - Manufacturers Competing More
Heavy Worldwide Demand BECOMING MORE Aggressively
- - Declining Beef Consumption COMPETITIVE - Excess Inventory
- ---------------------------- - Shorter Time to Market
- - INCREASING HIDE COSTS - Seeking Longer Price Protection
----------------------------------
- DECLINING PASS-THRU PRICING
</TABLE>
FOREIGN _________ \ FOREIGN
PACKERS / TANNERS
/ \
/ \
/ \
/ __\ MANUFACTURERS _______\ RETAIL
/ / / MARKETS
/ /
/ /
U.S. _________\ U.S. /
MEAT- / TANNERS
PACKERS
4
<PAGE> 6
[USL LOGO] BONDHOLDERS MEETING INDUSTRY DYNAMICS
BUSINESS UPDATE
SEPTEMBER 24, 1997
VOLATILE HIDE PRICES
HEAVY NATIVE STEERS
[GRAPH]
<TABLE>
<CAPTION>
Heavy Native Steers
Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
1994 61.12 62.00 67.05 68.63 68.04 70.25 69.83 70.56 77.55 76.56 75.85 76.75
1995 76.70 78.42 80.53 79.67 77.48 71.91 63.95 64.90 64.77 67.52 64.78 62.30
1996 62.20 64.46 66.76 71.61 67.56 65.70 72.41 76.95 79.29 81.76 76.71 75.77
1997 76.59 79.07 80.02 77.56 69.02 62.15 63.86 66.06
</TABLE>
5
<PAGE> 7
[3~[USL LOGO] BONDHOLDERS MEETING INDUSTRY DYNAMICS
BUSINESS UPDATE
SEPTEMBER 24, 1997
WORKING CAPITAL CYCLE
ILLUSTRATIVE EXAMPLE
<TABLE>
<S><C>
Customer Hide Soak Order Retain, Color Collection
Order Received Release & Finish
Hide Purchase Hide Shipment
Commitment Payment
| | | | | | | | | | | | | | | | | | |
--------------------------------------------------------------------------------------------------------------------------
| | | | | | | | | | | | | | | | | | |
Weeks 0 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18
</TABLE>
<TABLE>
<S> <C> <C> <C> <C> <C> <C>
WORKING CAPITAL
Accts Receivable - - - - 100 -
Inventory 60 60 70 90 - -
Accts Payable (60) - - - - -
--- -- -- -- --- --
Net Working Capital 0 60 70 90 100 -
PAYMENTS/COLLECTIONS
Cash Flow - (60) (10) (20) 100
Cumulative - (60) (70) (90) (90) 10
Borrowings - 33 39 50 85 -
Net from Operations - (27) (31) (40) (5) 10
</TABLE>
6
<PAGE> 8
[USL LOGO] BONDHOLDERS MEETING
BUSINESS UPDATE CORE BUSINESSES
SEPTEMBER 24, 1997
USL'S CORE BUSINESSES
7
<PAGE> 9
[USL LOGO] BONDHOLDERS MEETING
BUSINESS UPDATE CORE BUSINESSES
SEPTEMBER 24, 1997
KEY MARKETS/PRODUCTS
FURNITURE
. Full Line (High Fashion, Mid Fashion, Promotional) Upholstery Leathers
. Typically Heavily Finished
. Hand Rubbed Leathers - a Particular Specialty
AUTOMOTIVE
. Cut Sets for Seating and Interiors Manufacturers
. Whole Hides for Cut-and-Sew Seat Covering Manufacturers
. Whole Hides for Steering Wrap
FOOTWEAR & SPECIALTY LEATHERS
. Men's Mid-Fashion, Mid-Priced Hand Sewn Shoe Leather
. Waterproof Leathers for Outdoor Footwear
. Misc. Full Grain Leather Products (e.g. Jeans Patches)
. Finished Heavy-Weight Splits (e.g. Suedes for Work Gloves)
8
<PAGE> 10
[USL LOGO] BONDHOLDERS MEETING CORE BUSINESS
BUSINESS UPDATE
SEPTEMBER 24, 1997
FURNITURE
<TABLE>
<CAPTION>
GROUP SALES HISTORY
- -------------------
<S> <C> <C> <C> <C> <C> <C>
8 MOS. EST.
($ in Millions) 1994 1995 1996 1997 (1) MARKET SHARE
---- ---- ---- ---- ------ -----
TOTAL FURNITURE $129.9 $127.1 $ 99.8 $ 50.1 $ 850 8%
(1) Unaudited
</TABLE>
MARKET TRENDS/DYNAMICS
- ----------------------
* $850 Million Growing U.S. Market
* Many Competitors, No One Dominating
- Lower Cost Foreign Leathers Capturing an Ever-Increasing Share of
Promotional Market
- Lower Price Points As Manufacturers Seek to Expand Further Into
Middle Income Households
* Promotional Foothold and Improving Quality Permitting Foreign Competitors
to Move Up-Market
* Domestic Market Continues to Be Soft
9
<PAGE> 11
[USL LOGO] BONDHOLDERS MEETING
BUSINESS UPDATE CORE BUSINESSES
SEPTEMBER 24, 1997
FURNITURE
GROUP ISSUES
. Weak 1995-96 New Product Introductions, Not Well Merchandised
. Past Quality and Delivery Problems
. Customer and Vendor Concerns About Financial Condition
. Dependence on Domestic Hides
. Short Supply of Technical Talent
ACTIONS TO DATE
. Strengthened Group Management Team
. Quality and Delivery Performance Substantially Improved
. Increased Technical Talent
. Increased Focus/Funding for New Product Development
. Downsized Labor Force
. Rebuilt Sales Force
. Marked Down and Liquidated Obsolete Inventory
. Closed Unprofitable German Operation
10
<PAGE> 12
[USL LOGO] BONDHOLDERS MEETING CORE BUSINESSES
BUSINESS UPDATE
SEPTEMBER 24, 1997
AUTOMOTIVE
<TABLE>
<CAPTION>
GROUP SALES HISTORY
- -------------------
8 MOS. EST.
($ IN MILLIONS) 1994 1995 1996 1997 (1) MARKET SHARE
---- ---- ---- ---- ------ -----
<S> <C> <C> <C> <C> <C> <C>
TOTAL AUTOMOTIVE $ 7.1 $ 9.3 $ 19.4 $ 34.4 $ 650 8%
(1) Unaudited
</TABLE>
MARKET TRENDS/DYNAMICS
* $1 Billion Worldwide Market Growing an Estimated 5% Annually
- USL Presently Serving $650 Million U.S. Market
* 3 Major USL Competitors
* Price and Service Driven
- Annual Price Reductions Expected by Auto Industry
* Auto Companies Certification Requirements Represent a Barrier to Entry
* Long Program Cycles
11
<PAGE> 13
[USL LOGO] BONDHOLDERS MEETING
BUSINESS UPDATE CORE BUSINESSES
SEPTEMBER 24, 1997
AUTOMOTIVE
GROUP ISSUES
. Aggressive Pricing on Existing Contracts
. Inadequate Manufacturing Information Systems
. Productivity Remains Below Targeted Levels
- Underestimated Difficulty of Start-Up
. Customer and Vendor Concerns About Financial Condition
. Dependence on U.S. Hides
. Insufficient Capacity to Build Future Business
ACTIONS TO DATE
. Opened Cutting Plant in 1996 and Overcame Difficult Start-up
. Increased Pricing Through Negotiated Hide Market Adjustments
. Strengthened Group Management Team
. Implemented Quality Procedures
. Bid on and Awarded Profitable New Contracts (Mid-1998 Business)
12
<PAGE> 14
[USL LOGO] BONDHOLDERS MEETING CORE BUSINESSES
BUSINESS UPDATE
SEPTEMBER 24, 1997
FOOTWEAR/SPECIALTY
<TABLE>
<CAPTION>
GROUP SALES HISTORY
- -------------------
8 MOS. EST.
($ In Millions) 1994 1995 1996 1997 (1) MARKET SHARE
---- ---- ---- ---- ------ -----
<S> <C> <C> <C> <C> <C> <C>
Total Footwear & Specialty $ 209.1 $ 191.7 $ 181.0 $ 133.8 $ 1,000 20%
(1) Unaudited
</TABLE>
MARKET TRENDS/DYNAMICS
* $2.5 Billion Worldwide Footwear Market
- USL Serves Upper 40%
* 4 Major USL Competitors
* Growth of Outlets and Low-Price Retailers Keeping Strong Downward Pressure on
Pricing
* Increasing JIT Requirements, Competition From Foreign Tanneries Causing Major
U.S. Tanners to Invest Offshore Where Most Shoes Are Made
* Shoe Manufacturing Industry Continuing to Consolidate to a Few Big Players Who
Play Tanneries Against One Another
* Customers Shifting to Marketing and Distribution Orientation, Contracting Out
Substantial Parts of Manufacturing
- Requires Selling to Multiple Decision Makers
13
<PAGE> 15
[USL LOGO] BONDHOLDERS MEETING
BUSINESS UPDATE CORE BUSINESSES
SEPTEMBER 24, 1997
FOOTWEAR/SPECIALTY
GROUP ISSUES
. Past Quality and Delivery Problems
. Soft Footwear Market and Weakened Competitive Position
. Customer and Vendor Concerns About Financial Condition
. Inadequate Product Development
. Sales Coverage Requires Strengthening
ACTIONS TO DATE
. Strengthened Group Management Team
. Quality and Delivery Performance Improved
. Eliminating Non-Core Businesses
. Marked Down and Liquidated Obsolete Inventory
14
<PAGE> 16
[USL LOGO] BONDHOLDERS MEETING
BUSINESS UPDATE FINANCIALS
SEPTEMBER 24, 1997
RECENT FINANCIAL PERFORMANCE
15
<PAGE> 17
[USL LOGO] BONDHOLDERS MEETING FINANCIALS
BUSINESS UPDATE
SEPTEMBER 24, 1997
<TABLE>
<CAPTION>
1997 FINANCIAL RESULTS
PRELIMINARY/UNAUDITED
----------------------
<S> <C> <C> <C> <C>
1ST QTR 2ND QTR JULY/AUG 8 MOS.
($ IN Millions) 1997 1997 1997 1997
------ ------ -------- ------
SALES:
FOOTWEAR & SPECIALTY 47.7 58.1 28.0 133.8
FURNITURE 20.7 19.4 10.0 50.1
AUTOMOTIVE 15.0 11.3 8.1 34.4
------ ------ -------- ------
TOTAL 83.4 88.8 46.1 218.3
GROSS PROFIT(1) 3.8 6.9 1.5 12.3
GROSS MARGIN 4.6% 7.8% 3.3% 5.6%
FIFO EBITDA (1) (0.4) 3.1 (1.1) 1.5
(1) Excludes Non-Recurring
Changes
</TABLE>
3RD QUARTER VERSUS 2ND QUARTER 1997
-----------------------------------
* SHUTDOWN, MARKET SOFTNESS DECREASE VOLUME 20%
* VOLUME DECLINE MASKS BENEFITS OF ...
- LOWER HIDE PRICES
- IMPROVING AUTOMOTIVE PERFORMANCE
16
<PAGE> 18
[USL LOGO] BONDHOLDERS MEETING FINANCIALS
BUSINESS UPDATE
SEPTEMBER 24, 1997
<TABLE>
<CAPTION>
CURRENT QUARTER IMPACTED BY SOFT MARKETS
PRELIMINARY/UNAUDITED
---------------------
<S> <C> <C>
($ In Millions) JULY-AUG JULY-AUG <C> <C>
1997 1996 CHANGE V%
-------- -------- ------ --------
PRODUCTION/SHIPPING
WEEKS 7.3 8 (0.7) (9)%
SALES:
FOOTWEAR & SPECIALTY $ 28.0 $ 30.8 $(2.8) (9)
FURNITURE 10.0 14.7 (4.7) (32)
AUTOMOTIVE 8.1 4.4 3.7 84
-------- -------- ------ --------
TOTAL SALES 46.1 49.9 (3.8) (8)
GROSS PROFIT (1) 1.5 5.8 (4.3) (74)
GROSS MARGIN 3.3% 11.6% (8.3)%
FIFO EBITDA(1) (1.1) 3.1 (4.2) UNF
</TABLE>
(1) Excludes Non-Recurring Charges
* Market Softness Prompted Extension of Planned Shutdowns
* Automotive Growth and Mix Unfavorably Impacting Margins
* Accounting Changes Regarding Excess and Off-Spec Inventories
Created Unfavorable Variance
* Hide Prices Still Unfavorable Compared to 1996
17
<PAGE> 19
[USL LOGO] BONDHOLDERS MEETING FINANCIALS
BUSINESS UPDATE
SEPTEMBER 24, 1997
<TABLE>
<CAPTION>
BANKS REMAIN SUPPORTIVE AND LIQUIDITY REMAINS ADEQUATE
($ IN MILLIONS) MARCH APRIL MAY JUNE JULY AUGUST SEPT.23
----- ----- --- ---- ---- ------ -------
<S> <C> <C> <C> <C> <C> <C> <C>
REVOLVER BALANCE $ 60.8 $ 55.9 $ 54.8 $ 49.4 $44.7 $ 46.8 $ 45.3
AVAILABILITY $ 4.0 $ 8.0 $ 7.2 $ 7.9 $ 4.3 $ 5.8 $ 6.1
</TABLE>
(Period Ending Balances)
BANKS HAVE AGREED TO WAIVE/AMEND UNFAVORABLE EBITDA PERFORMANCE
18
<PAGE> 20
[USL LOGO] BONDHOLDERS MEETING FINANCIALS
BUSINESS UPDATE
SEPTEMBER 24, 1997
<TABLE>
<CAPTION>
1994 - 1997 BRIDGE ANALYSIS
($ IN MILLIONS) FIFO
SALES EBITDA
------- --------
<S> <C> <C>
1994 ACTUAL $371.6 $44.0
STRUCTURAL VARIANCES
--------------------
Acquisition of A.R. Clarke, LTD
Discounted Operations
Auto Cut-to-Pattern Start-Up
OPERATING VARIANCES
-------------------
Finished Leather Volume
Other Volume
(Drop Splits, Contract, Scrap, Etc.)
Price/Mix
Hide Costs
Inflations
SG&A Expenses
------- --------
TOTAL VARIANCES (41.6) (41.7)
AUGUST '97 YTD ANNUALIZED $330.0 $2.3
</TABLE>
19
<PAGE> 21
[USL LOGO] BONDHOLDERS MEETING
BUSINESS UPDATE ACTIONS TO DATE
SEPTEMBER 24, 1997
ACTIONS TO DATE
20
<PAGE> 22
[USL LOGO] BONDHOLDERS MEETING
BUSINESS UPDATE ACTIONS TO DATE
SEPTEMBER 24, 1997
TURNAROUND EFFORTS TO DATE LARGELY AIMED AT FIXING THE FUNDAMENTALS
MAXIMIZING VALUE OF UNDERUTILIZED ASSETS
. Caldwell Moser, Berlin Operations For Sale
FOCUSED ON CORE BUSINESSES - FOOTWEAR, FURNITURE, AUTO
. Non-Core or Unprofitable Units Sold or Closed
- Hydrolysis, Collagen, USL Trading, German Operations Divested
IMPROVED MANAGEMENT SYSTEMS AND PROCESSES
. Increased Emphasis on Enterprise Wide MRP Implementation
. Strengthened Financial Planning and Analysis
. Established MBO's for Key Management and Company-Wide Employee Reviews
. Introduced Market Driven Planning Process
RENEWED FOCUS ON QUALITY AND DELIVERY PERFORMANCE
. Rejects, Returns, Rework Lower - Have Returned to Industry Norms
. Delivery Lead Times Improving
RESTRUCTURED BANKING ARRANGEMENTS TO MEET COMPANY'S NEEDS
IMPLEMENTED MEASURES TO MORE EFFECTIVELY MANAGE WORKING CAPITAL
. Inventory Turns Improved 25%
21
<PAGE> 23
[USL LOGO] BONDHOLDERS MEETING
BUSINESS UPDATE NEXT STEPS
SEPTEMBER 24, 1997
NEXT STEPS
22
<PAGE> 24
[USL LOGO] BONDHOLDERS MEETING
BUSINESS UPDATE NEXT STEPS
SEPTEMBER 24, 1997
WE INTEND TO RETURN TO PROMINENCE IN ALL THREE BUSINESSES
SUPPORTED BY AN EFFECTIVE, EFFICIENT CORPORATE INFRASTRUCTURE
FURNITURE: $100 Million Business
Focus on Mid-Fashion, but With Strength in All Segments
Innovation and Merchandising Oriented
AUTOMOTIVE: $150 Million Business
Predominantly Cut Sets; Also Strong OEM Whole-Hide
World Class, Worldwide Supplier
FOOTWEAR: $200 Million Business
Regain Global Leadership in Quality, Service and Product Innovation
CORPORATE: Cost Effective
Support Company-Wide Needs in Finance, Information Systems, Human
Resources, Purchasing, Regulatory Compliance, Quality Improvement
23
<PAGE> 25
[USL LOGO] BONDHOLDERS MEETING NEXT STEPS
BUSINESS UPDATE
SEPTEMBER 24, 1997
OPPORTUNITES EXIST TO COMPLETE TURNAROUND AND INVEST IN THE FUTURE
TACTICAL STRATEGIC
* INVEST IN PRODUCTIVITY RELATED * REGAIN NEW PRODUCT DEVELOPMENT
INVESTMENTS LEADERSHIP
* ENHANCE INFORMATION SYSTEMS
* STRENGTHEN TECHNICAL CAPABILITIES * EXPAND AUTOMOTIVE BUSINESS
FURTHER * CAPACITY IN THE RIGHT LOCATIONS
* INTERNATIONAL MARKET PENETRATION
* EXPAND MARKETING AND INCREASE
SALES COVERAGE * CREATE INTERNATIONAL MANUFACTURING
ALLIANCES
* UPGRADE AND CONSOLIDATE FUNCTIONAL
SUPPORT
* IMPLEMENT HUMAN RESOURCE
INITIATIVES
* CONTINUE IMPROVING PLANNING, ANALYSIS
AND FORECASTING SUPPORT
24
<PAGE> 26
[USL LOGO] BONDHOLDERS MEETING
BUSINESS UPDATE CONCLUSIONS
SEPTEMBER 24, 1997
CONCLUSIONS
25
<PAGE> 27
[USL LOGO] BONDHOLDERS MEETING
BUSINESS UPDATE CONCLUSIONS
SEPTEMBER 24, 1997
MANAGEMENT AND THE BOARD OF DIRECTORS HAVE CONCLUDED THAT A
FINANCIAL RESTRUCTURING IS NECESSARY
THIS WILL ...
- Relieve Current Cash Drain
- Lower Cost of Senior Bank Financing
- Improve Cost Structure
AND WILL ALLOW THE COMPANY TO ...
- Improve and Accelerate Turnaround Efforts
- Rebuild Product Leadership
- Exploit Strategic Opportunities
26
<PAGE> 28
[USL LOGO] BONDHOLDERS MEETING
BUSINESS UPDATE CONCLUSIONS
SEPTEMBER 24, 1997
FINANCIAL RESTRUCTURING TIMELINE
September 24 Non-Restricted Bondholder Meeting in Milwaukee
September/October Formation of Restricted Bondholder Committee
November 3 Company Presentation of Business Plans - Restricted Meeting
November Restricted Bondholder Committee Due Diligence
December/January Restructuring Negotiations
January 15 Agreement in Principle
March 16 Consummation of Restructuring
27
