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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
COMMISSION FILE NUMBER 33-67854
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DATE OF REPORT (DATE OF EARLIEST EVENT REPORTED) FEBRUARY 23, 2000
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CMI INDUSTRIES, INC.
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(EXACT NAME OF REGISTRANT AS SPECIFIED IN ITS CHARTER)
DELAWARE 57-0836097
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(STATE OR OTHER JURISDICTION OF (I.R.S. EMPLOYER
INCORPORATION OR ORGANIZATION) IDENTIFICATION NO.)
1301 GERVAIS STREET, SUITE 920, COLUMBIA, SOUTH CAROLINA 29201
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(ADDRESS OF PRINCIPAL EXECUTIVE OFFICES)
(REGISTRANT'S TELEPHONE NUMBER, INCLUDING AREA CODE) (803) 771-4434
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NOT APPLICABLE
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(FORMER NAME, FORMER ADDRESS AND FORMAL FISCAL YEAR, IF CHANGED SINCE LAST
REPORT)
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ITEM 5. OTHER EVENTS.
On February 23, 2000, CMI Industries Inc. ("CMI") entered into a Stock
Acquisition Agreement (the "Stock Acquisition Agreement") with certain of its
stockholders who are affiliated with Merrill Lynch Capital Partners, Inc.
Pursuant to the Stock Acquisition Agreement, CMI will purchase 994,387 shares of
CMI common stock held by the affiliates of Merrill Lynch Capital Partners, Inc.
(the "MLCP Investors") for a purchase price of $9.00 per share or an aggregate
amount of $8,949,433. As a result of the transaction, the MLCP Investors which
now own more than 62% of the outstanding common stock of CMI will no longer own
any stock of CMI. Rather, members of management and other stockholders with
historical ties to CMI will own all of the outstanding shares of CMI common
stock. The consideration to be paid to the MLCP Investors will be funded through
CMI's current credit facility. Consummation of the transaction is subject to a
number of conditions, including the approval of CMI stockholders and the
Amendment to the current CMI Stockholders Agreement.
The press release announcing the Stock Acquisition Agreement is
incorporated herein by reference.
ITEM 7. FINANCIAL STATEMENTS, PRO FORMA FINANCIAL INFORMATION AND
EXHIBITS.
(a) and (b) Not Applicable.
(c) Exhibits.
99.1 Press Release of CMI Industries, Inc. dated
February 23, 2000.
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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 thereunto duly authorized.
Date: March 8, 2000 By: /s/ James A. Ovenden
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James A. Ovenden
Executive Vice President and
Chief Financial Officer
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EXHIBIT 99.1
PRESS RELEASE
CMI INDUSTRIES, INC.
REPORTS FISCAL 1999 RESULTS
COLUMBIA, SC, February 24, 2000--CMI industries, Inc. ("CMI") today reported a
net loss of $14 million for the fiscal year 1999, compared with net earnings of
$3 million a year ago. The net loss for 1999 included a $7 million restructuring
charge related to various initiatives implemented in the second quarter to
consolidate manufacturing capacity and reduce overhead costs.
Net sales for fiscal 1999 were $374 million, compared with $413 million
for 1998. The decline in sales may be primarily attributed to the Company's
Greige Fabrics Division. Sales of greige fabrics were down $35 million or 23.9%
in 1999 as market conditions for domestically produced greige fabrics were
negatively affected by the continued growth of lower priced imports from Asia.
Sales in the Company's Chatham Division for 1999 were down $7 million or 4.1% as
sales of automotive upholstery were negatively affected by the decline in
automotive placements for the 2000 model year. Sales in the Elastics Division
for 1999 were up $4 million or 3.8% due to continued strong demand for the
Company's elasticized warp knit fabrics.
Joseph L. Gorga, Chairman and Chief Executive Officer of CMI said,
"1999 was a very difficult year both for CMI and the textile industry in
general. We have taken a number of steps in 1999 to downsize our productive
capacity of commodity greige fabrics and redirect our emphasis to more
value-added specialty greige fabrics. Although this transition will take time,
we are very encouraged by our customers' response to these new product
offerings. We are aggressively moving forward to improve results at each of our
businesses and have been extremely pleased with the progress we have made
growing our furniture upholstery sales and continuing to improve our overall
performance in the Elastics Division. We believe our financial condition
continues to be solid and we are optimistic that we will overcome the current
challenges facing this business."
Additionally, CMI announced today that its Board of Directors has
approved, and CMI has entered into, a Stock Acquisition Agreement with certain
of its stockholders who are affiliated with Merrill Lynch Capital Partners, Inc.
In the proposed transaction, CMI will purchase 994,387 shares of CMI common
stock held by the affiliates with Merrill Lynch Capital Partners, Inc. for a
purchase price of $9.00 per share. As a result of the transaction, affiliates of
Merrill Lynch Capital Partners, Inc. which now own more than 62% of the
outstanding common stock of CMI will no longer own any stock of CMI.
Consummation of the transaction is subject to a number of conditions, including
the approval of CMI stockholders and the Amendment to the current CMI
Stockholders Agreement.
CMI Industries, Inc., headquartered in Columbia, South Carolina, is one
of the leading manufacturers and marketers of lightweight greige (unfinished)
fabrics in the United States, and holds market leading positions in certain
segments of the elastic fabrics and upholstery fabrics market.
This press release contains statements that are forward-looking
statements within the meaning of applicable federal securities laws and are
based upon the company's current expectations and assumptions, which are subject
to a number of risks and uncertainties that could cause actual results to differ
materially from those anticipated. Such risks and uncertainties include, among
other things, global economic activity, the success of the company's overall
business strategy, the company's relationships with its principal customers and
suppliers, the success of the company's expansion in other countries, the demand
for textile products, the cost and availability of raw materials and labor, the
company's ability to finance its capital expansion and modernization programs,
the level of the company's indebtedness and the exposure to interest rate
fluctuations, governmental legislation and regulatory changes, and the long-term
implications of regional trade blocs and the effect of quota phase-out and
lowering of tariffs under the WTO trade regime.
For further information, contact J. A. Ovenden at 803-771-4434.
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CMI INDUSTRIES, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF OPERATIONS
FOR THE YEARS ENDED JANUARY 3, 1998, JANUARY 2, 1999 AND JANUARY 1, 2000
(DOLLAR AMOUNTS IN THOUSANDS)
<TABLE>
<CAPTION>
1997 1998 1999
------------------------------------------
<S> <C> <C> <C>
Net sales $ 422,722 $ 412,791 $ 374,304
Cost of sales 366,298 362,216 344,693
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Gross profit 56,424 50,575 29,611
Selling, general and administrative expenses 32,914 33,586 32,994
Write-off of merger costs -- 1,649 --
Provision for restructuring and other nonrecurring
asset write-offs -- -- 7,000
Credits to restructuring and severance charges -- (1,345) --
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Operating income (loss) 23,510 16,685 (10,383)
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Other income (expenses):
Interest expense (14,499) (12,759) (12,910)
Other, net 2,975 1,013 835
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Total other expenses, net (11,524) (11,746) (12,075)
Income (loss) before income taxes 11,986 4,939 (22,458)
Income tax provision (benefit) 4,800 1,900 (8,500)
--------- --------- ---------
Net income (loss) $ 7,186 $ 3,039 $ (13,958)
========= ========= =========
</TABLE>
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CMI INDUSTRIES, INC. AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
JANUARY 2, 1999 AND JANUARY 1, 2000
(IN THOUSANDS, EXCEPT SHARE DATA)
<TABLE>
<CAPTION>
1998 1999
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<S> <C> <C>
ASSETS
Current Assets:
Cash and cash equivalents $ 3,911 $ 2,263
Receivables, net 50,884 48,017
Inventories, net 54,198 51,186
Deferred income taxes -- 3,342
Other current assets 7,431 1,750
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Total current assets 116,424 106,558
Property, plant and equipment, net 97,018 85,274
Intangible and other assets, net 9,724 10,407
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$223,166 $202,239
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LIABILITIES AND STOCKHOLDERS' EQUITY
Current Liabilities:
Book overdraft $ 12,247 $ 8,200
Accounts payable 13,914 14,302
Accrued expenses, including restructuring charges 13,633 13,305
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Total current liabilities 39,794 35,807
Long-term debt 124,536 128,814
Deferred income taxes 4,506 --
Other liabilities 12,247 12,143
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141,289 140,957
Commitments and contingencies
Stockholders' Equity:
Common stock of $1 par value per share; 2,100,000 shares
authorized, 1,695,318 shares issued at January 2, 1999
and 1,589,318 issued at January 1, 2000 1,695 1,589
Paid-in capital 11,358 8,814
Retained earnings 29,030 15,072
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Total stockholders' equity 42,083 25,475
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$223,166 $202,239
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</TABLE>
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CMI INDUSTRIES, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS FOR THE YEARS ENDED JANUARY 3, 1998,
JANUARY 2, 1999 AND JANUARY 1, 2000
(DOLLAR AMOUNTS IN THOUSANDS)
<TABLE>
<CAPTION>
1997 1998 1999
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<S> <C> <C> <C>
CASH FLOWS FROM OPERATING ACTIVITIES:
Net income (loss) $ 7,186 $ 3,039 $(13,958)
Adjustments to reconcile net income (loss) to net cash
provided by operating activities:
Depreciation and amortization 17,868 17,447 17,398
(Gain) loss on disposal of equipment (678) -- --
Nonrecurring asset write-offs -- -- 6,000
Changes in assets and liabilities:
Receivables (253) (3,122) 2,867
Inventories 4,216 (271) 896
Other current assets 657 (6,500) 5,681
Intangible and other assets (758) (1,579) (1,129)
Book overdraft (5,477) 6,224 (4,047)
Accounts payable 157 (1,771) 388
Accrued expenses, including restructuring charges 1,399 (855) (700)
Income taxes payable 141 (141) --
Deferred income taxes 4,384 3,261 (7,848)
Other liabilities (641) (935) (104)
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Net cash provided by operating activities 28,201 14,797 5,444
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CASH FLOWS FROM INVESTING ACTIVITIES:
Purchases of property, plant and equipment, net (7,614) (10,322) (8,624)
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Net cash used in investing activities (7,614) (10,322) (8,624)
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CASH FLOWS FROM FINANCING ACTIVITIES:
Net (repayments) borrowings on revolving credit facilities (21,115) (2,293) 4,182
Purchase of common stock from management -- -- (2,650)
Sale of common stock to management 13 -- --
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Net cash (used in) provided by financing activities (21,102) (2,293) 1,532
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Net increase (decrease) in cash and cash equivalents (515) 2,182 (1,648)
Cash and cash equivalents, beginning of period 2,244 1,729 3,911
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Cash and cash equivalents, end of period $ 1,729 $ 3,911 $ 2,263
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SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION:
Cash paid during the period for:
Interest $ 14,035 $ 12,233 $ 12,296
======== ======== ========
Income taxes $ -- $ 2,068 $ --
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</TABLE>
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