<PAGE>
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K/A
_____________
Amendment No. 1 to
Current Report
(originally filed July 1, 1996)
Pursuant to Section 13 or 15(d) of
the Securities and Exchange Act of 1934
Date of Report (Date of earliest event reported): June 17, 1996
-------------
BWAY CORPORATION
----------------
(Exact name of registrant as specified in its charter)
DELAWARE 0-26178 36-3624491
-------- ------- ----------
(State or other jurisdiction of (Commission File Number) (IRS Employer
incorporation or organization) Identification No.)
8607 Roberts Drive, Suite 250
Atlanta, Georgia 30350
(Address of principal executive offices, including zip code)
770-587-0888
(Registrant's telephone number, including area code)
Not Applicable
(Former name or former address, if changed since last report)
<PAGE>
BWAY CORPORATION
FORM 8-K/A
ITEM 2. ACQUISITION OR DISPOSITION OF ASSETS
The text set forth here in Item 2 was amended and restated to read as follows:
On June 17, 1996, BWAY Corporation, a Delaware Corporation ("BWAY") acquired
through an indirect subsidiary substantially all of the assets of an
unincorporated division of Van Dorn Company ("Seller"), known as "Davies Can "
(the "Company") pursuant to the terms of the Asset Purchase Agreement dated as
of April 29, 1996, by and among BWAY, Brockway Standard, Inc. ("BSI") a wholly-
owned subsidiary of BWAY, Seller, and Crown Cork & Seal Company, Inc. ("Crown"),
as amended by Amendment No. 1 to Asset Purchase Agreement dated June 17, 1996
(as amended, the "Asset Purchase Agreement"). Separately, BWAY and Crown
finalized a Strategic Alliance to provide paint and oblong cans in the Canadian
market. The following discussion is only a summary and is qualified in its
entirety by reference to the Exhibits to this Current Report on Form 8-K/A.
Pursuant to the Asset Purchase Agreement, Davies Acquisition Corp. ("Buyer"), a
wholly-owned subsidiary of BSI, acquired from the Seller, a wholly-owned
subsidiary of Crown, substantially all of the assets and certain of the
liabilities of the Company. Prior to the acquisition, the Company manufactured
paint, oblong and utility cans. BWAY intends to continue using assets acquired
for the manufacturing of metal containers, primarily paint, oblong, and utility
cans, subject to implementation of its rationalization strategy discussed below.
As a result of this acquisition and the previously announced acquisition of
Milton Can Company, Inc., BWAY and its subsidiaries will increase operations
from 9 manufacturing facilities in 6 states to 15 facilities in 10 states. Plans
for integration of the Company's facilities have been developed by management.
Certain components of the plan are currently being implemented. Management has
accrued $8 million to account for closing facilities, equipment movement,
severance, and relocation costs. Ultimate finalization of management's plans may
result in adjustments to the accrual. As part of the rationalization strategy,
plans to close the Covington, GA facility and to relocate the facilities'
equipment and business to other BWAY facilities have been announced.
Buyer paid Seller cash consideration of approximately $41.7 million, subject to
an adjustment based on the change in working capital from December 31, 1995
through June 17, 1996. The amount of consideration was determined as a result of
negotiations between BWAY and Crown. The total cash used by Buyer to consummate
the transaction and pay the related fees and expenses was approximately $43
million. The source of funds for the acquisition of the Company was a new
Credit Agreement, dated June 17, 1996, among Bankers Trust Company,
NationsBank, N.A., BWAY, Milton Can Company, Inc. and BSI. The transaction was
recorded using the purchase method of accounting.
<PAGE>
ITEM 7. FINANCIAL STATEMENT AND EXHIBITS
ITEM 7(A). FINANCIAL STATEMENTS OF BUSINESSES ACQUIRED
Pursuant to Item 7(a)(1), the following financial statements present the
Davies Can Division of Van Dorn (a wholly-owned subsidiary of Crown Cork
& Seal Company, Inc.) prior to the acquisition by Brockway Standard,
Inc., a wholly-owned subsidiary of BWAY Corporation ("BWAY"), and are
prepared in accordance with Regulation S-X for the periods specified in
(S) 210.3-05. The financial information shown is not necessarily
indicative of the net assets acquired nor is it indicative of future
operations. Specifically, BWAY did not acquire the land and building
associated with the Covington, GA plant. In addition, certain assets
related to the manufacturing of aerosol cans were modified prior to the
acquisition.
<PAGE>
Report of Independent Accountants
To the Board of Directors of
Crown Cork & Seal Company, Inc.
We have audited the accompanying Statements of Financial Position of Davies Can
(the "Division") (a division of Crown Cork & Seal Company, Inc.) as of December
31, 1995 and 1994 and the Statements of Operations, of Cash Flows and of Owner's
Net Investment for the years then ended. These financial statements are the
responsibility of the Division's management. Our responsibility is to express an
opinion on these financial statements based on our audits.
We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to obtain
reasonable assurance about whether the financial statements are free of material
misstatement. An audit includes examining, on a test basis, evidence supporting
the amounts and disclosures in the financial statements. An audit also includes
assessing the accounting principles used and significant estimates made by
management, as well as evaluating the overall presentation of the financial
statements. We believe that our audits provide a reasonable basis for our
opinion.
The accompanying financial statements were prepared for the purpose of complying
with the rules and regulations of the Securities and Exchange Commission for
inclusion in the current report on Form 8-K of BWAY Corporation and on
the basis of presentation as described in Note 1.
In our opinion, the financial statements audited by us present fairly, in all
material respects, the financial position of the Division at December 31, 1995
and 1994 and the results of its operations and its cash flows for the years then
ended, in conformity with generally accepted accounting principles.
PRICE WATERHOUSE LLP
Philadelphia, Pennsylvania
July 31, 1996
<PAGE>
<TABLE>
<CAPTION>
DAVIES CAN
(A DIVISION OF CROWN CORK & SEAL COMPANY, INC.)
STATEMENTS OF OPERATIONS (SEE NOTE 1)
(DOLLARS IN THOUSANDS)
- -----------------------------------------------------------------------------------------------------------------------
Year Ended Period Ended Six Months Ended
December 31, June 17, June 30,
1995 1994 1996 1995
(Unaudited) (Unaudited)
<S> <C> <C> <C> <C>
Sales:
Trade $ 55,428 $ 62,415 $ 24,963 $ 30,393
Crown 2,918 2,874 2,452 1,334
Cost of products sold (excluding depreciation and
amortization) 55,413 62,727 28,043 30,105
Depreciation and amortization 2,014 2,117 864 1,004
Selling and administrative expenses:
Direct 2,141 2,419 787 1,069
Crown Corporate allocation 292 326 137 159
Interest expense - Crown Corporate allocation 1,233 1,198 465 602
--------- --------- --------- ---------
Net loss before income taxes (2,747) (3,498) (2,881) (1,212)
Provision for income taxes
--------- --------- --------- ---------
Net loss ($ 2,747) ($ 3,498) ($ 2,881) ($ 1,212)
========= ========= ========= =========
</TABLE>
The accompanying notes are an integral part of these financial statements.
-2-
<PAGE>
<TABLE>
<CAPTION>
DAVIES CAN
(A DIVISION OF CROWN CORK & SEAL COMPANY, INC.)
STATEMENTS OF FINANCIAL POSITION (SEE NOTE 1)
(DOLLARS IN THOUSANDS)
- --------------------------------------------------------------------------------------------------------------
December 31, June 17,
1995 1994 1996
(Unaudited)
<S> <C> <C> <C>
Assets
Current assets:
Accounts receivable - trade, less allowance
for doubtful accounts, 1995 - $100; 1994 - $100 $ 6,419 $ 7,140 $ 7,964
Accounts receivable - related parties 415 695 152
Inventories:
Raw materials and manufacturing parts 1,526 4,798 1,823
Work in progress 3,103 3,160 2,791
Finished goods 4,844 5,368 5,087
Prepaid expenses and other current assets 36 36 38
--------- --------- ---------
Total current assets 16,343 21,197 17,855
Property, plant and equipment, net 20,459 21,938 19,814
--------- --------- ---------
Total $ 36,802 $ 43,135 $ 37,669
========== ========= =========
Liabilities & Owner's Net Investment
Current liabilities:
Accounts payable - trade $ 1,341 $ 1,281 $ 877
Accounts payable - related parties 391 431 738
Accrued liabilities 778 746 1,341
--------- --------- ---------
Total current liabilities 2,510 2,458 2,956
Other non-current liabilities 687 576 768
Owner's net investment 33,605 40,101 33,945
--------- --------- ---------
Total $ 36,802 $ 43,135 $ 37,669
========= ========= =========
</TABLE>
The accompanying notes are an integral part of these financial statements.
-3-
<PAGE>
<TABLE>
<CAPTION>
DAVIES CAN
(A DIVISION OF CROWN CORK & SEAL COMPANY, INC.)
STATEMENTS OF CASH FLOWS (SEE NOTE 1)
(DOLLARS IN THOUSANDS)
- ---------------------------------------------------------------------------------------------------
Year Ended Period Ended Six Months Ended
December 31, June 17, June 30,
1995 1994 1996 1995
(Unaudited) (Unaudited)
<S> <C> <C> <C> <C>
Net loss ($ 2,747) ($ 3,498) ($ 2,881) ($ 1,212)
Depreciation and amortization 2,014 2,117 864 1,004
Change in accounts receivable 1,001 (1,362) (1,282) (2,054)
Change in inventories 3,853 2,474 (230) 1,303
Change in accounts payable 20 (972) (117) 930
Change in other liabilities 143 72 644 491
------- ------- ------- -------
Cash flow from operating activities,
excluding Crown financing $ 4,284 ($1,169) ($3,002) $ 462
======= ======= ======= =======
Investment activities (capital expenditures) ($ 535) ($ 1,292) ($ 219) $ (497)
------- ------- ------- -------
Net financing provided to (by) Crown $ 3,749 ($ 2,461) ($ 3,221) $ (35)
======= ======= ======= =======
</TABLE>
The accompanying notes are an integral part of these financial statements.
-4-
<PAGE>
<TABLE>
<CAPTION>
DAVIES CAN
(A DIVISION OF CROWN CORK & SEAL COMPANY, INC.)
STATEMENTS OF OWNER'S NET INVESTMENT (SEE NOTE 1)
(DOLLARS IN THOUSANDS)
- ------------------------------------------------------------------------
<S> <C>
Balance at December 31, 1993 $41,138
Net loss - 1994 (3,498)
Net financing provided by Crown 2,461
-------
Balance at December 31, 1994 40,101
Net loss - 1995 (2,747)
Net financing provided to Crown (3,749)
-------
Balance at December 31, 1995 33,605
Net loss - Period ended June 17, 1996 (Unaudited) (2,881)
Net financing provided by Crown (Unaudited) 3,221
-------
Balance at June 17, 1996 (Unaudited) $33,945
=======
</TABLE>
The accompanying notes are an integral part of these financial statements.
-5-
<PAGE>
DAVIES CAN
(A DIVISION OF CROWN CORK & SEAL COMPANY, INC.)
NOTES TO FINANCIAL STATEMENTS
YEARS ENDED DECEMBER 31, 1995 AND 1994
(DOLLARS IN THOUSANDS)
- ------------------------------------------------------------------------------
1. Basis of Presentation
Davies Can (the "Division"), a division of Van Dorn Company (Van Dorn) which, in
turn, is a subsidiary of Crown Cork & Seal Company, Inc., consists of three
plants located at Solon, Ohio, York, Pennsylvania, and Covington, Georgia. The
Division manufactures and markets metal paint and oblong cans and certain other
categories of cans.
On April 29, 1996, Crown Cork & Seal Company, Inc. ("Crown") signed an asset
purchase agreement with Brockway Standard, Inc. ("Brockway") to sell the
business of the Division. Assets sold by Crown include intangible and fixed
assets, inventories, non-related party receivables and contracts and agreements,
subject to certain contractually specified exclusions. Liabilities assumed by
Brockway include all accounts payable, liabilities and obligations of the
business arising under the assumed assets and exclude any debt, tax liability,
employee related obligations such as pensions, postretirement and post
employment and other contractually defined liabilities. The closing took place
on June 17, 1996.
The accompanying historical statements are prepared for the purpose of complying
with the rules and regulations of the Securities and Exchange Commission (for
inclusion in the current report on Form 8-K of BWAY Corporation, parent company
of Brockway).
The financial statements have been prepared in connection with the sale of the
business of the Division. Throughout the period covered by the financial
statements, the Division's operations were conducted and accounted for as a
division of Van Dorn. Accordingly, financial statements were not prepared for
the Division. These financial statements have been prepared from the historical
accounting records of Crown.
Crown utilizes a centralized cash management system. Under this system, the
Division's cash requirements were provided directly by Crown; similarly, cash
generated by the Division was remitted directly to Crown. Systems supporting
such functions as payroll, accounts receivable and accounts payable were
provided by centralized Crown departments outside the Division. Intercompany
balances with Crown, net of cash, are included in owner's net investment. The
financial statements include all revenues and costs attributable to the
Division, including costs for functions and services provided by centralized
departments, and allocation of interest expense.
All charges and allocations of costs for functions and services provided by
Crown departments are deemed paid by the Division to Crown, in cash, in the
period in which the cost is recorded in the financial statements.
-6-
<PAGE>
DAVIES CAN
(A DIVISION OF CROWN CORK & SEAL COMPANY, INC.)
NOTES TO FINANCIAL STATEMENTS
YEARS ENDED DECEMBER 31, 1995 AND 1994
(DOLLARS IN THOUSANDS)
- ------------------------------------------------------------------------------
All of the allocations and estimates in the financial statements are based on
assumptions that Crown management believes are reasonable under the
circumstances. However, these allocations and estimates are not necessarily
indicative of the costs that would have resulted if the Division had been
operated as a separate entity. Transactions between the Division and other Crown
entities have been identified in the financial statements among related parties
to the extent possible.
2. Summary of Significant Accounting Principles
Use of Estimates and Assumptions
The financial statements have been prepared on the basis of presentation
disclosed in Note 1. They reflect management estimates and assumptions. Actual
results could differ from these estimates, impacting reported results of
operations and financial position.
Revenue Recognition
Sales and related cost of products sold are included in income when goods are
shipped to the customer.
Cash
The Division participates in Crown's centralized cash management system and, as
such, its cash funding requirements are met by, and all cash generated is
transferred to, Crown.
Inventories
Inventories are stated principally at the lower of cost or estimated net
realizable value. Cost is determined on a last-in, first-out (LIFO) basis.
Throughout the periods covered by the financial statements, the LIFO pool was
calculated for Van Dorn which included the Division. In preparing the financial
statements, the LIFO reserve allocated to the Division was based on the amount
of Division inventory as a percentage of total Van Dorn inventory for the
related period.
Property, Plant and Equipment (PP&E)
PP&E is shown at historical cost. Depreciation is provided, except on land, on a
straight-line basis over the estimated useful lives of the assets, as follows
(in years):
<TABLE>
<CAPTION>
<S> <C>
Buildings and improvements 40
Plant and machinery 12
Other assets 7
</TABLE>
-7-
<PAGE>
DAVIES CAN
(A DIVISION OF CROWN CORK & SEAL COMPANY, INC.)
NOTES TO FINANCIAL STATEMENTS
YEARS ENDED DECEMBER 31, 1995 AND 1994
(DOLLARS IN THOUSANDS)
- ------------------------------------------------------------------------------
Income Taxes
The taxable income/loss of the Division was included in the consolidated tax
returns of Crown. As such, separate income tax returns were not prepared or
filed by the Division.
No tax benefit has been recognized in the accompanying financial statements. Had
the Division recorded an income tax credit, the effective tax rate would have
approximated the statutory rate.
Interest Expense
Interest expense has been charged to the Division by Crown on the basis of
working capital and owner's net investment. Crown management believes this
allocation is reasonable, but it is not necessarily indicative of the cost that
would have been incurred if the Division had been operated as a separate entity.
Pensions
Throughout the period covered by the financial statements the Division's
employees were covered by certain non-contributory defined benefit plans. The
benefits for these plans are based primarily on employees' years of service and
remuneration near retirement. The cost of these plans for the Division was
determined on an actuarial basis. The pension cost is not necessarily indicative
of the pension cost that would have been incurred if the Division had been
operated as a separate entity.
Other Postretirement Benefits
Throughout the period covered by the financial statements, Division pensioners
and survivors were provided healthcare and life insurance benefits by an
unfunded plan sponsored by Van Dorn. The cost of this plan for the Division was
determined on an actuarial basis. These benefit costs are not necessarily
indicative of the postretirement benefit costs that would have been incurred if
the Division had been operated as a separate entity.
3. Related Party Transactions
The Division sold components to other Crown entities which amount to
approximately $2,900 for both 1995 and 1994 and are included in sales on the
statements of operations.
-8-
<PAGE>
DAVIES CAN
(A DIVISION OF CROWN CORK & SEAL COMPANY, INC.)
NOTES TO FINANCIAL STATEMENTS
YEARS ENDED DECEMBER 31, 1995 AND 1994
(DOLLARS IN THOUSANDS)
- ------------------------------------------------------------------------------
The Division subcontracted certain manufacturing processes (e.g., coating and
lithography) to other Crown manufacturing operations. Management estimates that
these purchased services amounted to $9,000 in 1995 and $5,000 in 1994, which
approximates fair market value.
The financial statements include transactions with other Crown organizations
involving functions and services (such as cash management, credit control,
purchasing, fixed assets management, tax administration, legal, and data
processing) that were provided to the Division. The cost of these functions and
services have been directly charged and/or allocated to the Division using
methods that Crown management believes are reasonable. Such charges and
allocations are not necessarily indicative of the costs that would have been
incurred if the Division had been a separate entity. Selling and administrative
expenses include $292 and $326 for the years ended December 31, 1995 and 1994,
respectively, representing allocations of general corporate expenses to the
Division.
4. Pensions and Other Retirement Benefits
Pensions
The components of pension cost for the years ended December 31, 1995 and 1994
were as follows:
<TABLE>
<CAPTION>
Year Ended
December 31,
1995 1994
<S> <C> <C>
Service cost $ 205 $ 287
Interest cost on projected benefit obligation 178 202
Actual return on assets (470) (76)
Net amortization 189 (189)
----- -----
Total pension cost $ 102 $ 224
===== =====
</TABLE>
-9-
<PAGE>
DAVIES CAN
(A DIVISION OF CROWN CORK & SEAL COMPANY, INC.)
NOTES TO FINANCIAL STATEMENTS
YEARS ENDED DECEMBER 31, 1995 AND 1994
(DOLLARS IN THOUSANDS)
- ------------------------------------------------------------------------------
The funded status of the plans at December 31, 1995 and 1994 was as follows:
<TABLE>
<CAPTION>
December 31,
1995 1994
<S> <C> <C>
Actuarial present value of:
Vested benefit obligation ($2,144) ($1,669)
Non-vested benefits (374) (273)
------ -------
Accumulated benefit obligation ($2,518) ($1,942)
====== =======
Actuarial present value of projected benefit obligation ($2,772) ($2,121)
Plan assets at fair value 2,916 2,481
------ -------
Plan assets in excess of projected benefit obligation 144 360
Unrecognized net gain (291) (415)
------ -------
Accrued pension cost at end of year ($ 147) ($55)
====== =======
The actuarial assumptions for the Division's pension plans are as follows:
Year Ended
December 31,
1995 1994
Discount rate 7.4% 8.5%
Compensation increase 5.0% 5.0%
Long-term rate of return 11.0% 11.0%
Other Postretirement Benefits
The net postretirement benefit cost comprised the following:
Year Ended
December 31,
1995 1994
Service cost $ 62 $ 81
Interest cost on accumulated postretirement benefit obligation 101 83
Amortization of net unrecognized loss 67 63
----- -----
Net postretirement benefit cost $ 230 $ 227
===== =====
</TABLE>
Health care claims and life insurance benefits paid totaled $36 in 1995 and $32
in 1994.
-10-
<PAGE>
DAVIES CAN
(A DIVISION OF CROWN CORK & SEAL COMPANY, INC.)
NOTES TO FINANCIAL STATEMENTS
YEARS ENDED DECEMBER 31, 1995 AND 1994
(DOLLARS IN THOUSANDS)
- ------------------------------------------------------------------------------
The following provides a reconciliation of the accumulated postretirement
benefit obligation to the liabilities recognized in the Division's balance sheet
as of the end of the year:
<TABLE>
<CAPTION>
December 31,
1995 1994
<S> <C> <C>
Retirees ($ 539) ($418)
Fully eligible active plan participants (166) (122)
Other active plan participants (708) (468)
----- ------
Total accumulated postretirement benefit obligation (1,413) (1,008)
Unrecognized net loss 924 713
----- ------
Accrued postretirement benefit obligation ($ 489) ($295)
===== ======
</TABLE>
The health care accumulated postretirement benefit obligation was determined at
December 31, 1995 and 1994 using health care trend rates of 10.0% and 10.5%,
respectively, decreasing to 4.9% over nine years and 5.1% over ten years,
respectively. The assumed long-term rate of compensation increase used for life
insurance was 5%. The discount rate was 7.4% and 8.5% at December 31, 1995 and
1994, respectively. Changing the assumed health care cost trend rate by one
percentage point would change the accumulated postretirement benefit obligation
by $191 at December 31, 1995 and $136 at December 31, 1994 and the net
postretirement benefit cost by $15 for both 1995 and 1994.
<TABLE>
<CAPTION>
<S> <C> <C>
5. Property, Plant and Equipment
December 31,
1995 1994
Buildings and improvements $ 8,420 $ 8,420
Machinery and equipment 16,289 14,386
------- -------
24,709 22,806
Less accumulated depreciation and amortization (6,043) (4,030)
------- -------
18,666 18,776
Land 1,551 1,551
Construction in progress 242 1,611
------- -------
$20,459 $21,938
======= =======
</TABLE>
-11-
<PAGE>
DAVIES CAN
(A DIVISION OF CROWN CORK & SEAL COMPANY, INC.)
NOTES TO FINANCIAL STATEMENTS
YEARS ENDED DECEMBER 31, 1995 AND 1994
(DOLLARS IN THOUSANDS)
- ------------------------------------------------------------------------------
6. Accrued Liabilities
<TABLE>
<CAPTION>
December 31,
1995 1994
<S> <C> <C>
Accrued payroll $ 101 $ 159
Accrued operating expenses 372 383
Accrued taxes, other than income 158 149
Accrued pension 147 55
------- -------
$ 778 $ 746
======= =======
7. Other Non-Current Liabilities
December 31,
1995 1994
Postretirement benefits other than pensions $ 489 $ 295
Postemployment benefits 198 281
------- -------
$ 687 $ 576
======= =======
</TABLE>
8. Commitments and Contingent Liabilities
The Division's basic raw material is tinplate which is purchased from multiple
sources. The Division is subject to material fluctuations in the cost of raw
materials and adjusts its selling prices to reflect these movements. There can
be no assurance, however, that the Division will be able to recover fully any
increase in raw material costs from its customers.
9. Subsequent Event
Contingent upon the sale of the business of the Division described in Note 1,
Crown signed a Supply and Sales Agency agreement with Brockway according to
which Brockway will supply Crown with certain components and Crown will sell
specified Brockway products in certain territories. Such transactions will be
carried out at approximately fair market value.
10. Unaudited Interim Financial Statements
The unaudited financial statements as of June 17, 1996 and for the six months
ended June 17, 1996 and June 30, 1995 include all adjustments, consisting of
recurring adjustments, necessary for a fair presentation of the financial
position and results of operations for these periods. Operating results for the
period ended June 17, 1996 are not necessarily indicative of the results
that may be expected for the entire year.
-12-
<PAGE>
ITEM 7(B). PRO FORMA FINANCIAL INFORMATION
BWAY CORPORATION
PRO FORMA CONSOLIDATED STATEMENTS OF INCOME (UNAUDITED)
The accompanying unaudited pro forma consolidated statements of income for BWAY
Corporation (the "Company") give effect to the acquisition of the Davies Can
Division ("Davies"), an unincorporated division of the Van Dorn Company (a
wholly-owned subsidiary of Crown Cork & Seal Company, Inc.), by an indirect
subsidiary of the Company, using the purchase method of accounting. The pro
forma consolidated statements of income for the fiscal year ended October 1,
1995 and for the nine months ended June 30, 1996 give effect to the purchase as
if the transaction occurred on October 3, 1994. A pro forma balance sheet is
not included herein as the Company's consolidated balance sheet as of June 30,
1996 was filed with the Company's Form 10-Q on August 14, 1996 and includes
Davies financial information and the effect of the transaction.
The pro forma consolidated statement of income for the fiscal year ended October
1, 1995 includes Davies' statement of income for the year ended December 31,
1995 and the Company's consolidated statement of income for fiscal year ended
October 1, 1995. The pro forma consolidated statement of income for the nine
months ended June 30, 1996 includes Davies' statement of income for the nine
months ended June 30, 1996 and the Company's consolidated statement of income
for the nine months ended June 30, 1996.
The financial information with respect to Davies for the year ended October 1,
1995 has been derived from Davies' audited financial statements as of December
31, 1995. The financial information with respect to Davies for the nine months
ended June 30, 1996 has been derived from Davies' unaudited financial statements
for the period from January 1, 1996 through June 17, 1996 and its unaudited
financial statements for the three months ended December 31, 1995. The
financial information with respect to the Company for the year ended October 1,
1995 has been derived from the Company's audited consolidated financial
statements. The financial information with respect to the Company as of and for
the nine months ended June 30, 1996 has been derived from the Company's
unaudited consolidated financial statements for the nine months ended June 30,
1996.
A preliminary allocation of purchase price has been made for purposes of
preparing the accompanying pro forma consolidated statements of income based on
estimates made by management. The actual allocation of purchase price and the
resulting effect on income from operations may differ significantly from the pro
forma amounts included herein. The pro forma consolidated financial information
shown is not necessarily indicative of either the results of operations that
would have occurred had the merger taken place on October 3, 1994 or of the
future operations.
Management expects operating cost savings to result from the efficiencies
obtained through rationalization. The Company is unable to quantify such savings
and therefore, these amounts have not been reflected in the accompanying
financial statements. Nor can such savings be guaranteed for results of future
operations. On May 28, 1996, the Company completed its acquisition of Milton Can
Company, Inc. ("MCC"), the operating results of which have been included in the
Company's consolidated statements of income since the date of acquisition. In
order to present the total pro forma impact of both acquisitions, the following
statements of income also present the Company's statement of income combined
with the pro forma results of the MCC acquisition. This information is then
consolidated with Davies' statement of income to reflect the total pro forma
impact. For further information regarding the MCC acquisition and the related
pro forma results, refer to the Current Report on Form 8-K/A filed August 12,
1996.
<PAGE>
<TABLE>
<CAPTION>
BWAY Corporation and Subsidiaries
Pro Forma Consolidated Statement of Income (Unaudited)
Year Ended October 1, 1995
(In Thousands, Except per Share Data)
- ---------------------------------------------------------------------------------------------------------------------
BWAY Corporation
BWAY Corporation Pro Forma for MCC Davies Can Company
for the for the for the
Year Ended Year Ended Year Ended Pro Forma
October 1, 1995 October 1, 1995 December 31, 1995 Adjustments Pro Forma
----------------- ---------------- ----------------- ------------ ----------
<S> <C> <C> <C> <C> <C>
NET SALES $247,480 $307,215 $58,346 $365,561
COST OF SALES 211,115 260,559 55,413 315,972
----------------- ---------------- ------------- ----------- ----------
GROSS PROFIT 36,365 46,656 2,933 49,589
OPERATING EXPENSES 16,635 26,643 4,447 $795 (A) 31,885
----------------- ---------------- ------------- ----------- ----------
INCOME FROM OPERATIONS 19,730 20,013 (1,514) (795) 17,704
OTHER (INCOME) EXPENSE - Net (275) (206) 0 (206)
Interest Expense 5,211 6,391 1,233 (1,233)(B)
4,350 (B) 10,741
----------------- ---------------- ------------- ----------- ----------
INCOME BEFORE INCOME TAXES 14,794 13,828 (2,747) (3,912) 7,169
PROVISION FOR INCOME TAXES 6,021 6,150 (2,710)(C) 3,440
----------------- ---------------- ------------- ----------- ----------
NET INCOME $8,773 $7,678 ($2,747) ($1,202) $3,729
================= ================ ============= =========== ==========
EARNINGS PER COMMON SHARE $1.85 $1.39 $0.67
================= ================ ==========
WEIGHTED AVERAGE COMMON
SHARES OUTSTANDING 4,731 5,542 5,542
================= ================ ==========
</TABLE>
See notes to pro forma consolidated statements of income.
<PAGE>
<TABLE>
<CAPTION>
BWAY Corporation and Subsidiaries
Pro Forma Consolidated Statement of Income (Unaudited)
Nine Months Ended June 30, 1996
(In Thousands, Except per Share Data)
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BWAY Corporation
BWAY Corporation Pro Forma for MCC Davies Can Company
for the for the for the
Nine Months Ended Nine Months Ended Nine Months Ended Pro Forma
June 30, 1996 June 30, 1996 June 30, 1996 Adjustments Pro Forma
--------------- --------------- ---------------- ----------- -----------
<S> <C> <C> <C> <C> <C>
NET SALES $191,225 $228,159 $44,213 $272,372
COST OF SALES 160,012 190,734 44,156 234,890
--------------- --------------- ---------------- ---------- ----------
GROSS PROFIT 31,213 37,425 57 37,482
OPERATING EXPENSES 13,403 20,047 2,995 $600 (A) 23,642
--------------- --------------- ---------------- ---------- ----------
INCOME FROM OPERATIONS 17,810 17,378 (2,938) (600) 13,840
OTHER (INCOME) EXPENSE - Net (262) 1 0 1
Interest Expense 3,108 3,898 773 (773)(B)
3,260 (B) 7,158
--------------- --------------- ---------------- ---------- ----------
INCOME (LOSS) BEFORE INCOME TAXES 14,964 13,479 (3,711) (3,087) 6,681
PROVISION FOR INCOME TAXES 6,090 5,930 0 (2,820)(C) 3,110
--------------- --------------- ---------------- ---------- ----------
INCOME BEFORE EXTRAORDINARY ITEMS 8,874 7,549 (3,711) (267) 3,571
--------------- --------------- ---------------- ---------- ----------
EXTRAORDINARY LOSS RESULTING FROM
THE EXTINGUISHMENT OF DEBT (2,535) (2,535) 0 0 (2,535)
--------------- --------------- ---------------- ---------- ----------
NET INCOME (LOSS) $6,339 $5,014 ($3,711) ($267) $1,036
============== ============== =============== ========= =========
EARNINGS PER COMMON SHARE $1.02 $0.74 $0.15
============== ============== =========
WEIGHTED AVERAGE COMMON
SHARES OUTSTANDING 6,191 6,799 6,799
============== ============== =========
</TABLE>
See notes to pro forma consolidated statements of income.
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BWAY CORPORATION AND SUBSIDIARIES
NOTES TO PRO FORMA CONSOLIDATED STATEMENTS OF INCOME (UNAUDITED)
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PRO FORMA STATEMENT OF INCOME ADJUSTMENTS
(A) To reflect amortization of excess purchase price over the net assets
acquired and amortization of other identifiable intangibles over a
composite life of 25 years, using the straight line method. The excess
purchase price over net assets will be amortized over 30 years and other
intangible assets will be amortized over their estimated useful lives which
are expected to range from 5 to 17 years.
(B) To record the net increase in interest expense related to the elimination
of Davies' historical interest expense and the interest expense related to
the Company's credit facility.
(C) To reflect the income tax expense computed on a pro forma combined basis at
BWAY's effective tax rate, adjusted for new permanent book to tax
differences.
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ITEM 7(C). EXHIBITS.
(1) The exhibits listed in the Index to Exhibits.
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<TABLE>
<CAPTION>
INDEX TO EXHIBITS
-----------------
EXHIBIT
NO. DESCRIPTION OF DOCUMENT
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<S> <C> <C>
10.1 Asset Purchase Agreement dated April 29, 1996, (1)
between Brockway Standard, Inc., BWAY Corporation,
Van Dorn Company and Crown Cork & Seal Company, Inc.
10.2 Amendment No. 1 to the Asset Purchase Agreement (2)
dated June 17, 1996.
10.3 Credit Agreement dated June 17, 1996 by and among (2)
BWAY Corporation, Brockway Standard, Inc., Milton Can
Company, Inc., the Additional Borrowers,
Bankers Trust Company, and NationsBank, N.A.
99.1 BWAY Corporation's press release dated June 18, (2)
1996, re: finalized Acquisition of Davies Can
Company.
99.2 BWAY Corporation's Current Report on Form 8-K/A, (3)
filed August 12, 1996.
</TABLE>
________
(1) Incorporated by reference to the respective exhibit to the Company's Form
10-Q for the period ending March 31, 1996.
(2) Incorporated by reference to the respective exhibit to the Company's
Current Report on Form 8-K, originally filed on July 1, 1996.
(3) Incorporated by reference to the respective exhibit to the Company's
Current Report on Form 8-K/A regarding the Milton Can Company, Inc.
acquisition, filed on August 12, 1996.
<PAGE>
SIGNATURE
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.
BWAY Corporation
(Registrant)
Date: August 28, 1996 By: /s/ David P. Hayford
---------------------------
David P. Hayford
Senior Vice President &
Chief Financial Officer
