<PAGE>
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 10-Q
QUARTERLY REPORT UNDER SECTION 13 OR 15 (d)
OF THE SECURITIES EXCHANGE ACT OF 1934
For Quarter Ended July 30, 1995 Commission file number 1-4505
STANDARD BRANDS PAINT COMPANY
(Exact name of registrant as specified in its charter)
DELAWARE 95-6029682
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization Identification No.)
4300 WEST 190TH STREET, TORRANCE, CALIFORNIA 90509-2956
(Address of principal executive officers) (Zip Code)
Registrant's telephone number, including area code (310) 214-2411
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
requirements for the past 90 days.
Yes X No
------- -------
<PAGE>
APPLICABLE ONLY TO ISSUERS INVOLVED IN BANKRUPTCY
PROCEEDINGS DURING THE PRECEDING FIVE (5) YEARS:
Indicate by check mark whether the Registrant has filed all documents and
reports required to be filed by Sections 12, 13, or 15(d) of the Securities
Exchange Act of 1934 subsequent to the distribution of securities under a plan
confirmed by a court.
Yes X No
------- -------
On February 11, 1992, the registrant and four (4) of its subsidiaries filed
separate voluntary petitions for reorganization under Chapter 11 of Title 11 of
the United States Code in the United States Bankruptcy Court for the Central
District of California (the "Bankruptcy Court"). On May 13, 1993, the
Bankruptcy Court confirmed the Fourth Amended Joint Plan of Reorganization, (the
"Plan"), of the Registrant and its subsidiaries. On June 14, 1993, all
conditions to the effectiveness of the Plan were met, and the Plan became
effective ("Effective Date"). Pursuant to the Plan, holders of the Registrant's
common stock on the Effective Date retained their shares and 16,758,000 shares
of additional common stock were issued in partial satisfaction of the allowed
claims of the creditors of the Registrant and its subsidiaries and preferred
shareholders of the Registrant. The securities issued pursuant to the Plan were
distributed on the Effective Date.
On July 30, 1995, the number of shares outstanding of the Registrant's
common stock, $.01 par value, was 31,770,553.
2
<PAGE>
STANDARD BRANDS PAINT COMPANY AND SUBSIDIARIES
INDEX
PART I. FINANCIAL INFORMATION Page No.
Condensed Consolidated Balance Sheets At
July 30, 1995 and January 29, 1995 4-5
Condensed Consolidated Statements of Operations for
Six Months and Three Months Ended July 30, 1995 and
July 31, 1994 6
Condensed Consolidated Statements of Cash Flows For
Six Months Ended July 30, 1995 and July 31, 1994 7-8
Notes to Condensed Consolidated Financial Statements 9-10
Management's Discussion and Analysis of
Financial Condition and Results of Operations 11-14
PART II. OTHER INFORMATION AND SIGNATURES 15-17
3
<PAGE>
PART I. FINANCIAL INFORMATION
Item 1.
STANDARD BRANDS PAINT COMPANY AND SUBSIDIARIES
Condensed Consolidated Balance Sheets
(in thousands)
<TABLE>
<CAPTION>
Assets (Unaudited) January 29,
------ July 30, 1995 1995
------------- -------------
<S> <C> <C>
Current assets:
Cash $ 976 $ 1,489
Accounts and notes receivable, net 2,125 1,506
Inventories 18,536 14,750
Prepaid expenses 2,540 961
Deferred income taxes 2,297 3,053
--------- ---------
Total current assets 26,474 21,759
--------- ---------
Property, Plant and equipment 18,654 91,002
Less: accumulated depreciation and amortization 481 3,293
--------- ---------
Net property, plant and equipment 18,173 87,709
--------- ---------
Other assets 443 442
--------- ---------
$45,090 $109,910
--------- ---------
--------- ---------
</TABLE>
See accompanying notes to condensed consolidated financial statements.
4
<PAGE>
STANDARD BRANDS PAINT COMPANY AND SUBSIDIARIES
Condensed Consolidated Balance Sheets
(in thousands, except share data)
<TABLE>
<CAPTION>
(Unaudited) January 29,
July 30, 1995 1995
------------- -----------
Liabilities and Stockholders' Equity
------------------------------------
<S> <C> <C>
Current liabilities:
Short-term borrowings $ 3,611 $ 3,821
Accounts payable 10,149 10,974
Accrued expenses 13,356 16,607
Income taxes payable 543 -
--------- --------
Total current liabilities 27,659 31,402
--------- --------
Senior notes, secured, payable to related parties 15,982 30,470
Liquidating Property Trust notes - 52,803
Note payable to related parties - 10,000
Grantor Trust note payable - 6,000
Notes payable FCI 5,000
Deferred income taxes 4,685 5,984
Other long-term liabilities 6,380 6,637
Preferred stock subject to mandatory redemption,
$.01 par value per share, authorized 5,000,000
shares; 8% cumulative convertible
redeemable preferred stock, issued and
outstanding 183,990 shares 1,641 -
Common stock, $.01 par value per share,
authorized 100,000,000 shares; issued and
outstanding 31,771,000 shares at July 30, 1995
and 2,240,000 at January 29, 1995 318 224
Additional paid-in capital 63,507 35,593
Deficit (79,267) (68,388)
Less: treasury stock, at cost, 2,800 shares at
July 30, 1995 and 2,800 at January 29, 1995 (815) (815)
--------- --------
(14,616) (33,386)
--------- --------
$ 45,090 $109,910
--------- --------
--------- --------
</TABLE>
See accompanying notes to condensed consolidated financial statements.
5
<PAGE>
STANDARD BRANDS PAINT COMPANY AND SUBSIDIARIES
Condensed Consolidated Statements of Operations
(in thousands, except share data)
(Unaudited)
<TABLE>
<CAPTION>
Six Months Ended Three Months Ended
---------------- ------------------
July 30, July 31, July 30, July 31,
1995 1994 1995 1994
----------- ---------- ----------- ----------
<S> <C> <C> <C> <C>
Net sales $ 45,703 $ 62,230 $ 25,162 $ 31,929
Cost of sales 29,532 36,804 16,034 18,998
----------- ---------- ----------- ----------
Gross margin 16,171 25,426 9,128 12,931
Selling, general and administrative expenses 24,353 25,330 15,105 13,096
Depreciation and amortization 129 1,695 64 834
Interest income (103) (71) (44) (71)
Interest expense 2,603 5,855 942 2,887
Other expense (income), net 68 (163) 68 113
----------- ---------- ----------- ----------
Net loss $ (10,879) $ (7,220) $ (7,007) $ (3,928)
----------- ---------- ----------- ----------
Weighted average shares outstanding 11,620,000 2,234,000 18,655,000 2,234,000
----------- ---------- ----------- ----------
Net loss per common share $ (.94) $ (3.23) $ (.38) $ (1.76)
----------- ---------- ----------- ----------
----------- ---------- ----------- ----------
</TABLE>
See accompanying notes to condensed consolidated financial statements.
6
<PAGE>
STANDARD BRANDS PAINT COMPANY AND SUBSIDIARIES
Condensed Consolidated Statements of Cash Flows
(in thousands)
<TABLE>
<CAPTION>
(Unaudited)
Six Months Ended
----------------
July 30, 1995 July 31, 1994
------------- -------------
<S> <C> <C>
Cash flows from operating activities:
Net loss $(10,879) $(7,220)
Adjustments to reconcile net loss
to net cash used for operating activities:
Depreciation and amortization 129 1,695
Interest paid-in-kind 2,351
Provision for losses on accounts receivable 150 194
Loss (gain) on sale of property 68 (163)
Changes in assets and liabilities:
(Increase) decrease in accounts receivable (769) 209
Increase in inventory, prepaid
expenses and other assets (5,366) (2,460)
Decrease in accounts payable, accrued
expenses and other liabilities (4,333) (3,912)
------- ------
Net cash used for operating activities (21,000) (9,306)
------- ------
------- ------
</TABLE>
See accompanying notes to condensed consolidated financial statements.
7
<PAGE>
STANDARD BRANDS PAINT COMPANY AND SUBSIDIARIES
Condensed Consolidated Statements of Cash Flows
(in thousands)
<TABLE>
<CAPTION>
(Unaudited)
Six Months Ended
----------------
July 30, 1995 July 31, 1994
------------- -------------
<S> <C> <C>
Cash flows from investing activities:
Purchases of property, plant and equipment $ (170) $ (298)
Proceeds from sale of property, plant
and equipment 67,508 9,343
-------- --------
Net cash provided by investing activities 67,338 9,045
-------- --------
Cash flows from financing activities:
Proceeds from (costs of) stock issuance 13,650 (53)
Proceeds from sale of interest in Liquidating
Property Trust 2,000 -
Proceeds from notes payable FCI 5,000 -
Repayment of long-term debt (67,291) (6,258)
Refinancing of note payable - Grantor Trust - (6,000)
Proceeds from note payable to related party - 10,000
(Repayment of) proceeds from short-term
borrowings, net (210) 1,906
Refinancing of note payable - Grantor Trust - 6,000
-------- --------
Net cash used for financing activities (46,851) (1,783)
-------- --------
Net decrease in cash (513) (1,522)
Cash, beginning of period 1,489 911
-------- --------
Cash, end of period $ 976 $ 2,433
-------- --------
-------- --------
Supplemental disclosures of cash flow information:
Cash paid(received) for:
Interest $ 3,246 $ 3,504
Income taxes $ 0 $ (120)
</TABLE>
See accompanying notes to condensed consolidated financial statements.
8
<PAGE>
STANDARD BRANDS PAINT COMPANY AND SUBSIDIARIES
Notes to Condensed Consolidated Financial Statements
(Dollar Amounts in Thousands)
(Unaudited)
NOTE 1 - BASIS OF PRESENTATION:
The accompanying condensed consolidated financial statements of Standard
Brands Paint Company and Subsidiaries (the "Company") have been prepared by the
Company without audit. The condensed consolidated balance sheet at January 29,
1995 has been derived from the audited consolidated financial statements at that
date. Certain information and footnote disclosures, including significant
accounting policies, normally included in financial statements prepared in
accordance with generally accepted accounting principles have been condensed or
omitted. The Company believes that the accompanying condensed consolidated
financial statements include all necessary adjustments (which are of a normal
and recurring nature) considered necessary for a fair presentation. The
consolidated results for any interim period may not be indicative of the results
for the entire year.
It is suggested that the accompanying unaudited condensed consolidated
financial statements be read in conjunction with the financial statements and
notes in the Company's most recent Annual Report on Form 10-K.
NOTE 2 - FINANCIAL RESTRUCTURING:
On May 16, 1995, the Company completed a financial restructuring (the
"Restructuring") pursuant to which Corimon, S.A.C.A. ("CRM"), a Venezuelan
multinational company, acquired approximately 77% of the outstanding common
shares of the Company for total consideration of $18 million. As a result of
the conversion of preferred stock, CRM's ownership percentage has decreased to
55% at July 30, 1995.
The principal elements of the Restructuring were a 1 for 10 reverse stock
split, the acquisition by CRM of shares of newly issued common stock and
preferred stock, the exchange of $16 million of the Company's outstanding debt
for newly issued shares of common stock and preferred stock, the transfer of 15
of the Company's real estate properties to the real estate liquidating trust
established in 1994 and the sale of the Company's residual interest in such
trust to CRM and the Company's prior debt holders. Share and per share amounts
for all periods presented have been adjusted to give retroactive effect to the
reverse stock split undertaken in conjunction with the Restructuring.
As a result of the Restructuring, the Company's financial position was
improved by an infusion of $16 million of new capital, $5 million under a
working capital facility with a leading U.S. institution which is a major
shareholder of the Company and a reduction in the Company's consolidated
indebtedness by an aggregate of approximately $78.3 million.
Under the terms of the Restructuring, the terms of the Liquidating Property
Trust were modified. Sixteen of the Company's operating stores and one of its
warehouse properties which were part of the assets of the Liquidating Property
Trust prior to the Restructuring are currently leased to the Company ("Leased
Properties"). Eight of the Leased Properties and the warehouse property have 10
year leases with two renewal options of two years each. The other eight Leased
Properties have 18 month leases with no renewal option. The 15 new properties
transferred to the Liquidating Property Trust as part of the Restructuring are
leased back to the Company for an aggregate rent of approximately $2.8 million
per year (on a triple net basis), adjusted every 30 months. The properties are
leased for 10 years subject to two renewal options of 5 years each. Renewal
rent on all of such leased properties will be 95% of market but not less than
the prior rent.
NOTE 3 - INVENTORIES:
Inventories consist of the following:
<TABLE>
<CAPTION>
July 30, 1995 January 29, 1995
------------- ----------------
<S> <C> <C>
Retail inventories $16,383 $12,576
Manufacturing inventories 1,851 1,792
Wholesale inventories 302 382
------- -------
$18,536 $14,750
------- -------
------- -------
</TABLE>
9
<PAGE>
NOTE 4 - SHORT TERM BORROWINGS:
Subsequent to the filing of the Company's Chapter 11 petitions, the Company
entered into a credit agreement with Foothill Capital Corp. ("Foothill"),
pursuant to which Foothill made available to the Company a senior secured credit
facility in the aggregate principal amount of $12 million. Pursuant to the
Plan, the Company entered into a new credit agreement with Foothill on June 14,
1993, which provided the Company with a secured line of credit in the amount of
$12.5 million. Interest under the new credit agreement is equal to the prime
rate of interest plus 2% per annum. On April 14, 1994 the Company amended its
agreement with Foothill to extend the credit agreement for three additional
years. The interest rate under the amended agreement is equal to the prime rate
of interest plus 3% per annum. At July 30, 1995, the prevailing interest rate
per annum was 11.75%.
At July 30, 1995 and January 29, 1995, short-term borrowing consisted of
amounts outstanding to Foothill of approximately $3.6 million and $3.8 million,
respectively. In addition, at July 30, 1995 the Company had outstanding letters
of credit of $2.8 million for the State of California's Workers Compensation
program, import purchases and security deposits.
NOTE 5 - SENIOR NOTES:
On May 16, 1995, under the terms of the Restructuring, the terms of the
Liquidating Property Trust were modified. As a result the Company's
consolidated indebtedness was reduced by an aggregate of approximately $78.3
million (See Note 2).
The remaining Insurance Companies' senior notes of approximately $16
million were modified with a maturity of ten years from the Effective Date and
interest payable at 10% per annum, compounded monthly. Interest only will be
due in years one and two with principal and interest due in years three through
ten based on a fifteen year amortization schedule. At the end of ten years the
unpaid principal of approximately $8.1 million will be due in full. The
indebtedness is secured by the existing first trust deeds on 8 of the retained
properties and a security interest on all of the Company's personal property and
equipment (excluding cash, inventory, trademarks, accounts receivable and
rolling stock).
10
<PAGE>
Item 2.
STANDARD BRANDS PAINT COMPANY AND SUBSIDIARIES
Management's Discussion and Analysis of Financial
Condition and Results of Operations
(Dollar Amounts in Thousands)
INTRODUCTION
This discussion should be read in conjunction with the consolidated
financial statements, related notes and Management's Discussion and Analysis of
Financial Condition and Results of Operations included in the Company's Annual
Report on Form 10-K for the year ended January 29, 1995.
The Company emerged from its reorganization proceedings ("Reorganization
Plan") in June, 1993. Management believed it would be able to concentrate on
operational activities and pursue the Company's long-term growth and strategic
objectives. The Company believed that its ability to meet growth and strategic
objectives was contingent upon several factors. Accordingly the Company reduced
the size of its retail paint store chain to a core group of stores concentrating
on selling paint and related merchandise in an effort to increase operating
profits from these remaining core stores The Company also focused on its
competitive strengths in paint market share, retail locations, and paint
manufacturing capabilities. In a multifaceted approach, the Company hoped to
add incremental revenue and profits by: (i) remerchandising its retail paint
stores, (ii) launching new paint products, (iii) increasing sales to outside
retailers (i.e., private labeling), and (iv) reducing general corporate overhead
costs associated with such areas as distribution, warehousing, and management
information systems.
On March 16, 1994, the Company entered into an agreement ("New Loan
Agreement") with the Insurance Company Lenders and FCI (defined below) and KRI
(defined below) for $10 million of new financing and a plan to restructure the
Company's then existing $103 million Amended Insurance Company Loan and existing
$6 million indebtedness with the grantor trust established pursuant to the
Reorganization Plan ("Grantor Trust").
Under the terms of the New Loan Agreement, the Company on August 1, 1994
established a Liquidating Property Trust and transferred 78 of its 103 operating
and non-operating real properties with a net book value of approximately $82.7
million in exchange for the assumption by the Liquidating Property Trust of
approximately $68.7 million of existing indebtedness ("Assumed Indebtedness")
owed to the Insurance Companies' (defined below) under the Amended Insurance
Company Loan. The Company estimated that the book value of the properties to be
sold by the Liquidating Property Trust would exceed the sale proceeds, less
applicable fees, expenses and other costs, by approximately $14.6 million and
reported this loss for the fiscal year ended January 30, 1994.
Notwithstanding the additional borrowing and trust transactions described
above, the Company was not successful in implementing its growth and strategic
objectives and continued to experience cash flow difficulties. To successfully
implement its strategic objectives, increase sales and reduce debt, the Company
required significant new sources of capital.
As of February 15, 1995, the Company entered into a Investment Agreement
and certain other agreements for the financial restructuring of the Company
("Restructuring") with Corimon, S.A.C.A. and its wholly-owned subsidiary Corimon
Corporation (collectively, "CRM"), Fidelity Capital & Income Fund ("FCI"), Kodak
Retirement Income Plan Trust Fund ("KRI"), Transamerica Life Insurance and
Annuity Company, Transamerica Occidental Life Insurance Company, Sun Life
Insurance Company of America, Anchor National Life Insurance Co. (collectively
"Insurance Companies"), and the Grantor Trust.
On May 16, 1995, the stockholders of the Company approved the financial
restructuring of the Company at a special meeting. See the Company's Form 10-K
Annual Report and Proxy Statement related to the special meeting held on May 16,
1995 for a detailed review of the Restructuring and Note 2 to the Condensed
Consolidated Financial Statement.
11
<PAGE>
RESULTS OF OPERATIONS
Consolidated sales for the six months and three months ended July 30, 1995
reflect a decrease of $16,527 and $6,767 from the comparative six and three
month periods in the prior fiscal year, respectively. The decrease in sales was
principally caused by inadequate inventory levels prior to the Restructuring and
overall weak economic conditions in California, the Company's core market.
Comparable store sales for the six months and three months ended July 30,
1995 of $39,980 and $22,394, respectively, decreased $13,420 or 25.1% and $5,388
or 19.4%, respectively, compared to 1994.
The following is an analysis of comparative year-to-date sales by component:
<TABLE>
<CAPTION>
Six Months Ended
----------------
July 30, July 31,
1995 1994 Variance
--------- ---------- --------
<S> <C> <C> <C>
Continuing Paint Stores $39,980 $53,400 $ (13,420)
Closed Paint Stores* 1,336 3,445 (2,109)
------- ------- ---------
41,316 56,845 (15,529)
Major Paint Company and Export Sales 4,387 5,385 (998)
------- ------- ---------
$45,703 $62,230 $(16,527)
------- ------- ---------
------- ------- ---------
<FN>
* Updated to reflect additional store closures through July 30, 1995.
</TABLE>
In connection with the adoption of Fresh-Start Reporting, the Company
adopted the first-in, first-out ("FIFO") method for determining the cost of its
inventories. The Company's consolidated FIFO gross profit was 35.4% and 36.3%
versus 40.9% and 40.5% for the comparative six and three month periods in the
prior fiscal year, respectively. The decreased margin resulted in part from
strategic marketing decisions and competitive factors pursuant to which the
Company reduced prices in certain product categories and utilized promotional
markdowns in an attempt to improve customer traffic and to reduce discontinued
merchandise.
Selling, general and administrative expenses decreased $977 and increased
$2,009 for the six and three months ended July 30, 1995, respectively. The
decrease resulted primarily from the implementation of stringent cost controls
offset by increased advertising activity. The increase in the three months
ended July 30, 1995 resulted from advertising expenditures of $3,955 compared to
$1,991 in the comparable period during the prior year. Selling, general and
administrative expenses were 53.3% and 60.0% of sales, versus 40.7% and 41.0%
for the comparative six and three month periods in the prior year, respectively.
The increase in the percentage of sales for the six months and three months
ended July 30, 1995 versus 1994 is due to the reduction in sales as previously
discussed, the increased advertising activity and the fixed nature of certain
expenses.
Depreciation and amortization was $129 and $64 for the six and three months
ended July 30, 1995 versus $1,695 and $834 for the comparable periods in 1994,
respectively. This decrease was principally due to the transfer of certain real
estate properties to the Liquidating Property Trust in August 1994 and May 1995.
Interest income reflects amounts earned on cash deposits. Interest expense
includes accrued amounts on the senior notes, short-term borrowings, as well as
the other debt. Interest expense for the six months and three months ended July
30, 1995 was $2,603 and $942, versus $5,885 and $2,887 for the comparable
periods in 1994, respectively. The decrease resulted from the reduction in
consolidated indebtedness under the terms of the Restructuring.
Other (income) expense, net for the six months and three months ended July
30, 1995 and July 31, 1994 primarily represents the Company's gain(loss) on the
sale of real property during the periods.
12
<PAGE>
FINANCIAL CONDITION AS OF JULY 30, 1995
The Company's working capital deficit decreased by $8,458 to ($1,185) from
($9,643) at January 29, 1995. This decrease was caused by the infusion of
$21,000 in new capital which was partially offset by operating losses incurred
during the period. See Note 2 to the Condensed Consolidated Financial
Statements.
LIQUIDITY AND CAPITAL RESOURCES
The Company's capital structure remains highly leveraged despite its
recapitalization and restructuring.
As of July 30, 1995, the Company had approximately $1.2 million of
borrowing availability under it $12.5 million working capital facility with
Foothill.
The Restructuring has improved the Company's liquidity and reduced the
Company's indebtedness. However, there can be no assurances that the Company
will be successful with any strategic changes to the operations of the Company
as proposed by CRM or that it will be able to improve its sales or reduce its
operating expenses in order to return to profitability. Based on management's
estimates, the Company will need additional capital during the third or fourth
quarter to sustain its operations through the end of the 1995 fiscal year. CRM
has confirmed to the Company that it will make funds available to the Company,
as necessary, to meet its operating requirements and discharge its obligations
through the end of the 1995 fiscal year.
RATIO OF EARNINGS TO COMBINED FIXED CHARGES AND PREFERRED STOCK DIVIDEND
REQUIREMENTS
The Company's consolidated ratios of earnings to combined fixed charges and
preferred stock dividend requirements are shown in the table below. For
purposes of the following ratios: (i) "earnings" consist of loss before
income taxes plus fixed charges; and (ii) "fixed charges" consist of interest
(including debt amortization) and the estimated interest portion of lease
payments.
In calculating the ratio of earnings to combined fixed charges and
preferred stock dividend requirements, the preferred stock dividend requirements
were assumed to be equal to the pretax earnings required to cover such stock
dividend requirements. The amount of such pretax earnings required to cover
preferred stock dividend requirements was computed using tax rates for the
applicable year.
<TABLE>
<CAPTION>
Six Months Ended Three Months Ended
---------------- ------------------
July 30, 1995 July 31, 1994 July 30, 1995 July 31, 1994
------------- ------------- ------------- -------------
<S> <C> <C> <C> <C>
Ratio of earnings to combined
fixed charges and preferred
stock dividend requirements (2.31x) (0.18x) (4.11x) (0.31X)
</TABLE>
The earnings coverage deficiencies (in thousands) were $10,879 and $7,007 for
the six and three months ended July 30, 1995 versus $7,220 and $3,928 for the
comparable periods in 1994, respectively.
13
<PAGE>
<TABLE>
<CAPTION>
Six Months Ended Three Months Ended
---------------- ------------------
July 30, 1995 July 31, 1994 July 30, 1995 July 31, 1994
------------- ------------- ------------- -------------
CALCULATION:
(Thousands of Dollars)
<S> <C> <C> <C> <C>
Earnings:
Loss before income taxes (10,879) (7,220) (7,007) (3,928)
Interest expense (including
debt amortization) 2,500 5,784 898 2,816
Estimated interest portion of
lease payments 789 342 472 174
-------- ------- ------- -------
Total $ (7,590) $(1,094) $(5,637) $ (938)
-------- ------- ------- -------
-------- ------- ------- -------
Combined Fixed Charges
and Preferred Stock
Divided Requirements:
Interest expense (including
debt amortization) $ 2,500 $ 5,784 $ 898 $ 2,816
Estimated interest portion of
lease payments 789 342 472 174
Preferred stock dividend
requirements - - - -
-------- ------- ------- -------
Total $ 3,289 $ 6,126 $ 1,370 $ 2,990
-------- ------- ------- -------
-------- ------- ------- -------
</TABLE>
14
<PAGE>
PART II. OTHER INFORMATION
STANDARD BRANDS PAINT COMPANY AND SUBSIDIARIES
ITEM 1. LEGAL PROCEEDINGS
Not Applicable
ITEM 2. CHANGES IN SECURITIES
Not Applicable
ITEM 3. DEFAULTS UPON SENIOR SECURITIES
As of July 30, 1995, the Registrant was not in default in the payment of
principal or interest with respect to any of its indebtedness.
ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
4 (a)
On May 16, 1995, the registrant held a Special Meeting of
Shareholders.
On August 16, 1995, the registrant held its Annual Meeting
of Shareholders.
4 (b)(c) MATTERS VOTED UPON
Financial Restructuring
At the Special Meeting of Shareholders held on May 16, 1995, the
shareholders of the Registrant approved a financial restructuring of
the Registrant, the principal elements of which were as follows:
1. Amendment to the Registrant's Restated Certificate of
Incorporation to increase the amount of authorized capital
stock of the Registrant, and to effect a 1-for-10 reverse
stock split ("Reverse Stock Split") pursuant to which each
shareholder was considered to hold one share of the
Registrant's post-split share for every ten shares
previously held.
2. Sale to Corimon Corporation, a United States subsidiary of
Corimon, S.A.C.A., a Venezuelan multinational retailer and
producer of paint and related products (collectively,
"CRM"). of 15,700,496 newly issued shares of the
Registrant's common stock ("Common Stock"), constituting
approximately 76% of the Registrant's' then-outstanding
common stock.
3. Exchange of a portion of the Registrant's outstanding debt
into 2,242,928 newly issued shares of Common Stock and
1,570,049 newly issued shares of 8% cumulative convertible
redeemable preferred stock of the Registrant.
4. Transfer of 15 real estate properties held by subsidiaries
of the Registrant to a grantor trust (the "Trust"), in which
the Registrant held a residual interest; release of related
long-term debt; and sale of the Registrant's residual
interest in the Trust to CRM and to certain senior lenders
for an additional $2 million payable by CRM and in
consideration of their participation in the Restructuring.
15
<PAGE>
The voting results were as follows:
FOR: 14,299,496
AGAINST: 543,675
ABSTAIN: 32,350
NOT-VOTED: 7,525,523
At the annual meeting of shareholders held on August 16, 1995, the following
matters were voted upon.
Election of Directors
For Against Abstain
--- ------- -------
To Terms Expiring 1996:
-----------------------
Gustavo Jose Blanco-Uribe 28,730,578 28,213 --
Richard L. Boje 28,729,493 29,298 --
Roland F. Breault 28,734,683 24,108 --
Arthur W. Broslat 28,733,363 25,438 --
Robert N. Dangremond 28,729,513 29,278 --
Juan J. Gramage 28,734,683 24,108 --
Deborah Hicks Midanek 28,733,813 24,978 --
Thomas A. White 28,734,683 24,108 --
William E. Yingling, III 28,733,543 25,248 --
The Registrant also sought ratification by the shareholders of the
appointment of Price Waterhouse LLP as the Registrants independent auditors for
the current fiscal year.
FOR: 28,740,394
AGAINST: 6,225
ABSTAIN: 12,172
NOT-VOTED: 1,540,218
4 (d)
Not Applicable
ITEM 5. OTHER INFORMATION
Not Applicable
ITEM 6(a) EXHIBITS
Exhibit 27 Financial Data Schedule
ITEM 6(b) REPORTS ON FORM 8-K
The company filed a Form 8-K dated 5/16/95, as amended by Form 8-K/A dated
5/23/95, to disclose the consumation of the Reorganization and the change in
the companies certifying accountant.
16
<PAGE>
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.
STANDARD BRANDS PAINT COMPANY
--------------------------------------------
(Registrant)
Date
------------------- --------------------------------------------
Howard Schwartz, Senior Vice President/
Chief Financial Officer
17
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<PAGE>
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<S> <C>
<PERIOD-TYPE> 6-MOS
<FISCAL-YEAR-END> JAN-28-1996
<PERIOD-START> JAN-30-1995
<PERIOD-END> JUL-30-1995
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<PP&E> 18,654
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<BONDS> 20,982
<COMMON> 318
1,641
0
<OTHER-SE> (16,575)
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<SALES> 45,703
<TOTAL-REVENUES> 45,703
<CGS> 29,532
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<INCOME-PRETAX> (10,879)
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<NET-INCOME> (10,879)
<EPS-PRIMARY> (.94)
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