SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K/A
Current Report
Pursuant to Section 13 or 15(d) of
The Securities Exchange Act of 1934
Date of Report: December 11, 1996
Foamex International Inc.
(Exact Name of Registrant as specified in its Charter)
Delaware 0-22624 05-0473908
(State or other jurisdiction (Commission File No.) (I.R.S. Employer
of corporation) Identification No.)
1000 Columbia Avenue
Linwood, PA 19061
(Address of Principal (Zip Code)
Executive Offices)
Registrant's telephone number, including area code:
(610) 859-3000
n/a
(Former name or former address, if changed since last report)
<PAGE>
Item 2. Acquisition or Disposition of Assets
On August 28, 1996, JPSGP Inc. ("JPSGP"), Foamex-JPS Automotive L.P.
("FJPS"), and Collins & Aikman Products Co. ("Collins & Aikman") entered into an
Equity Purchase Agreement, as amended (the "Agreement"), pursuant to which
Collins & Aikman would acquire all of the outstanding partnership interest in
JPS Automotive L.P. ("JPS Automotive") from JPSGP and FJPS. JPSGP and FJPS are
both wholly-owned subsidiaries of Foamex International Inc. (the "Company"),
which guaranteed the obligations of these subsidiaries under the Agreement.
On December 11, 1996 (the "Closing Date"), JPS Automotive was sold to
Collins & Aikman for a purchase price of $220.1 million, which includes
approximately $194.4 million of estimated net indebtedness of JPS Automotive
(the "Purchase Price"). The Purchase Price is subject to post-closing
adjustments. The assets of JPS Automotive L.P. on the Closing Date consisted
primarily of property, plant and equipment, inventory, and accounts receivable.
In accordance with the Agreement, on the Closing Date, Collins & Aikman paid the
Company $25.7 million in cash purchase price, subject to post-closing
adjustments. The Agreement provides that the Purchase Price is subject to
adjustment for changes in the net assets, as defined, of JPS Automotive and for
certain operational results of JPS Automotive. The net asset adjustment to the
Purchase Price will be determined after completion of a closing balance sheet of
JPS Automotive as of the Closing Date, and pursuant to the Agreement, any
unresolved dispute concerning the net asset adjustment to the Purchase Price
will be subject to binding arbitration.
Upon the closing of the sale, the Company and Collins & Aikman entered
into agreements that include products utilizing the Company's proprietary
SMT(TM) technology for automotive carpet systems.
JPS Automotive, which reported 1995 revenues of approximately $312.1
million, is a supplier of automotive carpet, trim and textiles in North America.
JPS Automotive is headquartered in Greenville, South Carolina and has six
manufacturing, distribution and sales facilities in South Carolina, North
Carolina, and Michigan, as well as a joint venture in Mexico.
Item 5. Other Events
In addition to the pro forma financial statements required by Item 2,
the Company has included historical condensed consolidated statements of
operations restated for discontinued operations for the periods outlined under
Item 7.
Item 7. Financial Statements and Exhibits.
(a) Financial Statements of Business Acquired:
None
(b) Pro Forma Financial Information:
The following pro forma and restated historical condensed
consolidated financial statements filed with this report:
Pro forma condensed consolidated balance sheet as of September
29, 1996 (1)
2
<PAGE>
Historical condensed consolidated statements of operations
restated for discontinued operations:
o Year ended January 1, 1995
o Thirteen week period ended April 2, 1995
o Thirteen week period ended July 2, 1995
o Year ended December 31, 1995 (1)
o Thirteen week period ended March 31, 1996
o Thirteen week period ended June 30, 1996
o Thirty-nine weeks ended September 29, 1996 (1)
(1) Represents the financial information required by Item 2;
the remaining condensed consolidated statements of
operations are presented in connection with Item 5. The
financial information for the thirty-nine week period
ended September 29, 1996 is incorporated by reference to
the Form 10-Q of the Company for the same period since
no adjustment is required.
The condensed consolidated balance sheet of the Company as of
September 29, 1996 reflects the financial position of the
Company after giving effect to the disposition of the net
assets of JPS Automotive. The pro forma financial statements
includes the effects of the redemption of approximately $10.4
million of Discount Debentures at a redemption price of 101%
of face value. The historical condensed consolidated
statements of operations for the year ended January 1, 1995,
the thirteen week period ended April 2, 1995, the thirteen
week period ended July 2, 1995, the year ended December 31,
1995, the thirteen week period ended March 31, 1996, the
thirteen week period ended June 30, 1996, and the thirty-nine
weeks ended September 29, 1996 have been restated to reflect
discontinued operations associated with the sale of JPS
Automotive. The unaudited pro forma financial statements are
presented for informational purposes only and do not purport
to be indicative of the Company's results of operations for
the periods presented that would have actually resulted had
the transactions occurred at the beginning of such periods, or
the Company's results of operations for any future period.
3
<PAGE>
FOAMEX INTERNATIONAL INC. AND SUBSIDIARIES
PRO FORMA CONDENSED CONSOLIDATED BALANCE SHEET (unaudited)
as of September 29, 1996
<TABLE>
<CAPTION>
The Pro Forma
ASSETS Company (1) Adjustments Total
CURRENT ASSETS: (thousands)
<S> <C> <C>
Cash and cash equivalents $ 48,063 $ 48,063
Accounts receivable, net 139,634 139,634
Inventories 90,089 90,089
Other current assets 47,587 47,587
--------- ---------
Total current assets 325,373 325,373
PROPERTY, PLANT AND EQUIPMENT, NET 186,498 186,498
COST IN EXCESS OF ASSETS ACQUIRED, NET 87,757 87,757
DEBT ISSUANCE COSTS, NET 19,953 $ (567)(2) 19,386
NET ASSETS OF DISCONTINUED OPERATIONS 38,184 (38,184)(3) --
OTHER ASSETS 11,338 2,956 (3) 14,294
--------- --------- ---------
TOTAL ASSETS $ 669,103 $ (35,795) $ 633,308
========= ========= =========
LIABILITIES AND STOCKHOLDERS' EQUITY (DEFICIT)
CURRENT LIABILITIES:
Short-term borrowings $ 5,169 $ 5,169
Current portion of long-term debt 16,237 16,237
Accounts payable 89,630 89,630
Accrued interest 20,368 20,368
Other accrued liabilities 66,529 66,529
--------- ---------
Total current liabilities 197,933 197,933
--------- ---------
LONG-TERM DEBT 497,159 $ (10,396)(4) 486,763
--------- --------- ---------
OTHER LIABILITIES 42,345 (24,996)(3) 17,349
--------- --------- ---------
COMMITMENTS AND CONTINGENCIES -- --
--------- ---------
STOCKHOLDERS' EQUITY (DEFICIT):
Preferred Stock, par value $1.00 per share:
Authorized 5,000,000 shares - none issued -- --
Common Stock, par value $.01 per share:
Authorized 50,000,000 shares
Issued 26,751,262 shares, Outstanding
25,229,362 shares 267 267
Additional paid-in capital 84,258 84,258
Retained earnings (accumulated deficit) (129,232) (403)(5) (129,635)
Other (10,671) (10,671)
--------- --------- ---------
(55,378) (403) (55,781)
Common stock held in treasury, at cost;
1,521,900 shares at September 29, 1996 (12,956) (12,956)
--------- --------- ---------
Total stockholders' equity (deficit) (68,334) (403) (68,737)
--------- --------- ---------
TOTAL LIABILITIES AND
STOCKHOLDERS' EQUITY (DEFICIT) $ 669,103 $ (35,795) $ 633,308
========= ========= =========
</TABLE>
See accompanying notes to Pro Forma Condensed Consolidated Balance Sheet
4
<PAGE>
FOAMEX INTERNATIONAL INC.
FOOTNOTES TO PRO FORMA CONDENSED
CONSOLIDATED BALANCE SHEET
(dollars in thousands)
(1) Represents the historical consolidated balance sheet of the Company as of
September 29, 1996 after being restated for discontinued operations
associated with the sale of JPS Automotive.
(2) The write-off of debt issuance costs associated with the retirement of
$10.4 million of Discount Debentures.
(3) Reclassification of the estimated income tax benefit for the (i) write-off
of debt issuance costs, (ii) premium paid on early retirement debt, and
(iii) the loss on disposal of JPS Automotive.
(4) Long-term portion of Discount Debentures expected to be retired with the
net proceeds from the sale of JPS Automotive.
(5) Write-off of debt issuance costs associated with the retirement of the
Discount Debentures, premium paid on early retirement of the Discount
Debentures, net of estimated income tax benefit.
5
<PAGE>
FOAMEX INTERNATIONAL INC. AND SUBSIDIARIES
HISTORICAL CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS (Restated)
for the Year Ended January 1, 1995 (unaudited)
(thousands except per share amounts)
<TABLE>
<CAPTION>
The JPS
Company (1) Automotive (2) Adjustments Total
<S> <C> <C> <C> <C>
Net sales $994,865 $161,205 $833,660
Cost of goods sold 820,193 128,928 691,265
-------- -------- -------- --------
Gross profit 174,672 32,277 - 142,395
Selling, general and administrative
expenses 74,666 12,421 62,245
-------- -------- --------
Income from operations 100,006 19,856 80,150
Interest and debt issuance expense 57,923 12,039 $ (753) (4) 45,131
Other income (expense), net 1,020 (127) 1,147
-------- -------- -------- --------
Income (loss) from continuing operations
before provision for income taxes 43,103 7,690 753 36,166
Provision for income taxes 16,794 107 (2,732) (5) 13,955
-------- -------- -------- --------
Income from continuing operations 26,309 7,583 3,485 22,211
Loss from discontinued operations,
net of income taxes (179) 7,583 (3,485) 3,919
-------- -------- -------- --------
Net income $ 26,130 $ - $ - $ 26,130
======== ======== ======== ========
Earnings per share:
Income from continuing operations $ 0.99 $ 0.83
Loss from discontinued operations (0.01) 0.15
-------- --------
Earnings per share $ 0.98 $ 0.98
======== ========
Weighted average number of
shares outstanding 26,684 26,684
======== ========
</TABLE>
6
<PAGE>
FOAMEX INTERNATIONAL INC. AND SUBSIDIARIES
HISTORICAL CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS (Restated)
for the thirteen week period ended April 2, 1995 (unaudited)
(thousands except per share amounts)
<TABLE>
<CAPTION>
The JPS
Company (1) Automotive (2) Adjustments Total
<S> <C> <C> <C> <C>
Net sales $306,922 $87,624 $ 244 (3) $219,542
Cost of goods sold 258,480 71,846 244 (3) 186,878
-------- -------- -------- --------
Gross profit 48,442 15,778 32,664
Selling, general and administrative
expenses 20,392 5,670 14,722
-------- -------- -------- --------
Income from operations 28,050 10,108 17,942
Interest and debt issuance expense 19,453 5,912 (485) (4) 13,056
Other income (expense), net 284 (147) 431
-------- -------- -------- --------
Income from continuing operations
before provision for income taxes 8,881 4,049 485 5,317
Provision for income taxes 3,369 94 (1,384) (5) 1,891
-------- -------- -------- -------
Income from continuing operations 5,512 3,955 1,869 3,426
Loss from discontinued
operations, net of income taxes (451) 3,955 (1,869) 1,635
-------- -------- -------- -------
Net income $ 5,061 $ - $ - $ 5,061
======== ======== ======== ========
Earnings per share:
Income from continuing operations $ 0.21 $ 0.13
Loss from discontinued operations (0.02) 0.06
-------- --------
Earnings per share $ 0.19 $ 0.19
======== ========
Weighted average number of
shares outstanding 26,716 26,716
======== ========
</TABLE>
See accompanying notes to Historical Condensed
Consolidated Statements of Operations (Restated)
7
<PAGE>
FOAMEX INTERNATIONAL INC. AND SUBSIDIARIES
HISTORICAL CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS (Restated)
for the thirteen week period ended July 2, 1995 (unaudited)
(thousands except per share amounts)
<TABLE>
<CAPTION>
The JPS
Company (1) Automotive (2) Adjustments Total
<S> <C> <C> <C> <C>
Net sales $295,441 $ 80,169 $ 78 (3) $215,350
Cost of goods sold 247,371 65,297 78 (3) 182,152
-------- -------- ------ ---------
Gross profit 48,070 14,872 - 33,198
Selling, general and administrative
expenses 21,755 5,383 16,372
-------- --------- ------ ---------
Income from operations 26,315 9,489 16,826
Interest and debt issuance expense 19,278 5,533 (364) (4) 13,381
Other income (expense), net 358 (31) 389
-------- --------- ------ ----------
Income from continuing operations
before provision for income taxes 7,395 3,925 364 3,834
Provision for income taxes 3,132 96 (1,174) (5) 1,862
-------- --------- ------ ----------
Income from continuing operations 4,263 3,829 1,538 1,972
Operating loss from discontinued
operations, net of income taxes (340) 3,829 (1,538) 1,951
------- --------- ------ ----------
Net income $ 3,923 $ $ - $ 3,923
======= ========= ====== ==========
Earnings per share:
Income from continuing operations $ 0.16 $ 0.08
Loss from discontinued operations (0.01) 0.07
-------- ---------
Earnings per share $ 0.15 $ 0.15
======== =========
Weighted average number of
shares outstanding 26,708 26,708
======== ========
</TABLE>
See accompanying notes to Historical Condensed
Consolidated Statements of Operations (Restated)
8
<PAGE>
FOAMEX INTERNATIONAL INC. AND SUBSIDIARIES
HISTORICAL CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS (Restated)
for the Year Ended December 31, 1995 (unaudited)
(thousands except per share amounts)
<TABLE>
<CAPTION>
The JPS
Company (1) Automotive (2) Adjustments Total
<S> <C> <C> <C> <C>
Net sales $1,174,296 $312,096 $ 634 (3) $862,834
Cost of goods sold 1,018,682 257,231 634 (3) 762,085
---------- -------- ------ --------
Gross profit 155,614 54,865 - 100,749
Selling, general and administrative
expenses 93,435 23,522 69,913
Restructuring and other charges 41,692 275 41,417
---------- -------- ------ --------
Income (loss) from operations 20,487 31,068 (10,581)
Interest and debt issuance expense 76,745 22,396 (1,471)(4) 52,878
Other income (expense), net 348 (113) 461
---------- -------- ------ ---------
Loss from continuing operations
before provision for income taxes (55,910) 8,559 1,471 (62,998)
Benefit for income taxes (10,076) 30 (2,142)(5) (12,248)
----------- -------- ------ --------
Loss from continuing operations (45,834) 8,529 3,613 (50,750)
Loss from discontinued
operations, net of income taxes (7,286) 8,529 (3,613) (2,370)
---------- -------- ------ ---------
Net loss $ (53,120) $ - $ - $ (53,120)
========== ======== ====== =========
Loss per share:
Loss from continuing operations $ (1.73) $ (1.92)
Loss from discontinued operations (0.28) (0.09)
---------- ---------
Loss per share $ (2.01) $ (2.01)
========== =========
Weighted average number of
shares outstanding 26,472 26,472
========== =========
</TABLE>
See accompanying notes to Historical Condensed
Consolidated Statements of Operations (Restated)
9
<PAGE>
FOAMEX INTERNATIONAL INC. AND SUBSIDIARIES
HISTORICAL CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS (Restated)
for the thirteen week period ended March 31, 1996 (unaudited)
(thousands except per share amounts)
<TABLE>
<CAPTION>
The JPS
Company (1) Automotive (2) Adjustments Total
<S> <C> <C> <C> <C>
Net sales $293,774 $74,919 $ 276 (3) $219,131
Cost of goods sold 245,254 62,430 276 (3) 183,100
--------- ------- ------ --------
Gross profit 48,520 12,489 - 36,031
Selling, general and administrative
expenses 19,337 5,367 13,970
--------- ------- ------ --------
Income from operations 29,183 7,122 22,061
Interest and debt issuance expense 18,672 5,392 (377) (4) 12,903
Other expense, net (106) (309) 203
-------- ------- ------ --------
Income from continuing operations
before provision for income taxes 10,405 1,421 377 9,361
Provision for income taxes 4,337 110 (709) (5) 3,518
-------- ------- ------ --------
Income from continuing operations 6,068 1,311 1,086 5,843
Income from discontinued
operations, net of income taxes 69 1,311 (1,086) 294
--------- ------- ------ --------
Net income $ 6,137 $ - $ - $ 6,137
======== ========= ====== ========
Earnings per share:
Income from continuing operations $ 0.23 $ 0.23
Income from discontinued operations 0.01 0.01
-------- --------
Earnings per share $ 0.24 $ 0.24
======== ========
Weighted average number of
shares outstanding 25,950 25,950
======== =========
</TABLE>
See accompanying notes to Historical Condensed
Consolidated Statements of Operations (Restated)
10
<PAGE>
FOAMEX INTERNATIONAL INC. AND SUBSIDIARIES
HISTORICAL CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS (Restated)
for the thirteen week period ended June 30, 1996 (unaudited)
(thousands except per share amounts)
<TABLE>
<CAPTION>
The JPS
Company (1) Automotive (2) Adjustments Total
<S> <C> <C> <C>
Net sales $322,533 $ 82,749 $ 663 (3) $240,447
Cost of goods sold 270,466 69,009 823 (3) 202,280
--------- -------- ------ --------
Gross profit 52,067 13,740 (160) 38,167
Selling, general and administrative
expenses 19,554 5,802
--------- -------- ------ ---------
Income from operations 32,513 7,938 (160) 24,415
Interest and debt issuance expense 18,470 5,287 (138) (4) 13,045
Other income (expense), net 21 (278) 299
---------- -------- ------ --------
Income from continuing operations
before provision for income taxes 14,064 2,373 (22) 11,669
Provision for income taxes 5,626 111 (451) (5) 5,064
-------- -------- ------ --------
Income from continuing operations 8,438 2,262 429 6,605
Loss on discontinued operations, net of
income taxes (40,145) 2,262 (429) (38,312)
-------- ------- ------ --------
Net loss $(31,707) $ - $ - $(31,707)
======== ======== ====== ========
Earnings (loss) per share:
Income from continuing operations $ 0.33 $ 0.26
Loss from discontinued operations (1.57) (1.50)
Earnings (loss) per share $ (1.24) $ (1.24)
======== ========
Weighted average number of
shares outstanding 25,619 25,619
======== ========
</TABLE>
See accompanying notes to Historical Condensed
Consolidated Statements of Operations (Restated)
11
<PAGE>
FOAMEX INTERNATIONAL INC. AND SUBSIDIARIES
FOOTNOTES TO HISTORICAL CONDENSED
CONSOLIDATED STATEMENTS OF OPERATIONS (Restated)
(1) Represents the historical condensed consolidated statements of operations
of the Company for the period indicated.
(2) To eliminate the statements of operations of JPS Automotive for the period
indicated.
(3) Represents an adjustment for the elimination of intercompany sales with
JPS Automotive.
(4) Represents an allocation of interest expense based on the debt that the
Company intends to retire from the net proceeds from the sale of JPS
Automotive.
(5) Represents an allocation of income taxes in accordance with SFAS 109
"Accounting for Income Taxes."
(c) Exhibits
2.1 Equity Purchase Agreement, dated as of August 28, 1996, by and
among JPSGP Inc., Foamex- JPS Automotive L.P., and Collins &
Aikman Products Co.*
2.2 Amendment No. 1 to Equity Purchase Agreement, by and among
JPSGP Inc., Foamex-JPS Automotive L.P., Foamex International
Inc. and Collins & Aikman Products Co., dated as of December
11, 1996.**
* Filed on Form 8-K of the Company dated August 28, 1996.
. ** Filed on Form 8-K of the Company dated December 11, 1996.
12
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities and Exchange Act of 1934,
the Registrant has duly caused this Report to be signed on its behalf by the
undersigned hereunto duly authorized.
FOAMEX INTERNATIONAL INC.
Date: February 21, 1997 By: /s/ Kenneth R. Fuette
------------------------
Name: Kenneth R. Fuette
Title: Chief Financial Officer and
Chief Accounting Officer
13
<PAGE>
EXHIBIT INDEX
Exhibit Page
2.1 Equity Purchase Agreement, dated as of August 28, 1996, by and among JPSGP
Inc., Foamex-JPS Automotive L.P., and Collins & Aikman Products Co.
2.2 Amendment No. 1 to Equity Purchase Agreement, by and among JPSGP Inc.,
Foamex-JPS Automotive L.P., Foamex International Inc. and Collins & Aikman
Products Co., dated as of December 11, 1996.
14
