<PAGE> 1
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 10-Q
(MARK ONE)
[x] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d)
OF THE SECURITIES EXCHANGE ACT OF 1934
FOR THE QUARTERLY PERIOD ENDED JUNE 30, 1997
OR
[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d)
OF THE SECURITIES EXCHANGE ACT OF 1934
FOR THE TRANSITION PERIOD FROM ______________ TO_____________
COMMISSION FILE NUMBER 33-98828
PIONEER AMERICAS ACQUISITION CORP.
(EXACT NAME OF REGISTRANT AS SPECIFIED IN ITS CHARTER)
DELAWARE 06-1420850
(STATE OR OTHER JURISDICTION OF (I.R.S. EMPLOYER
INCORPORATION OR ORGANIZATION) IDENTIFICATION NO.)
4200 NATIONSBANK CENTER, 700 LOUISIANA STREET, HOUSTON, TEXAS 77002
(ADDRESS OF PRINCIPAL EXECUTIVE OFFICES)
(ZIP CODE)
(713) 225-3831
(REGISTRANT'S TELEPHONE NUMBER, INCLUDING AREA CODE)
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 [ ]
On August 1, 1997, there were outstanding 1,000 shares of the Registrant's
Common Stock, $.01 par value. All of such shares are owned by Pioneer
Companies, Inc.
The Registrant meets the conditions set forth in General Instruction
(H)(1)(a) and (b) of Form 10-Q, and is therefore filing this form with the
reduced disclosure format permitted by General Instruction (H)(2) of Form 10-Q.
<PAGE> 2
TABLE OF CONTENTS
PART I--FINANCIAL INFORMATION
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Page
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Item 1. Consolidated Financial Statements
Consolidated Balance Sheets--June 30, 1997 and December 31, 1996 3
Consolidated Statements of Operations--Three Months Ended June 30, 1997 and 1996 4
and Six Months Ended June 30, 1997 and 1996
Consolidated Statements of Cash Flows--Six Months Ended June 30, 1997 and 1996 5
Notes to Consolidated Financial Statements 6
PART II--OTHER INFORMATION
Item 6. Exhibits and Reports on Form 8-K 11
</TABLE>
<PAGE> 3
PART I --FINANCIAL INFORMATION
PIONEER AMERICAS ACQUISITION CORP.
CONSOLIDATED BALANCE SHEETS
(IN THOUSANDS)
<TABLE>
<CAPTION>
JUNE 30, DECEMBER 31,
1997 1996
---------- ------------
<S> <C> <C>
ASSETS
Current assets:
Cash and cash equivalents $ 34,676 $ 14,417
Accounts receivable, less allowance for doubtful accounts of $1,411 at
June 30, 1997 and $1,311 at December 31, 1996 23,798 18,830
Due from parent 685 2,547
Inventories 14,645 6,247
Prepaid expenses 349 1,156
---------- ----------
Total current assets 74,153 43,197
Property, plant and equipment:
Land 4,885 3,735
Buildings and improvements 26,488 17,062
Machinery and equipment 134,154 71,704
Cylinders and tanks 4,541 4,540
Construction in progress 22,471 11,871
--------- ---------
192,539 108,912
Less accumulated depreciation (21,924) (16,429)
--------- ---------
170,615 92,483
Investment in and advances to unconsolidated subsidiary 29,395 28,586
Other assets, net of accumulated amortization of $1,809 at June 30, 1997
and $2,458 at December 31, 1996 39,836 19,621
Excess cost over fair value of net assets acquired, net of accumulated
amortization of $10,009 at June 30, 1997 and $7,556 at December 31, 1996 125,080 107,123
--------- ---------
Total assets $ 439,079 $ 291,010
========= =========
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Accounts payable $ 16,718 $ 17,221
Accrued liabilities 15,451 19,276
Returnable deposits 3,415 3,238
Current portion of long-term debt 1,163 128
--------- ---------
Total current liabilities 36,747 39,863
Long-term debt 305,620 141,629
Returnable deposits 3,272 3,272
Accrued pension and other employee benefits 17,992 14,100
Other long-term liabilities 18,081 17,823
Commitments and contingencies
Stockholder's equity:
Common stock, $.01 par value, authorized 1,000 shares, issued and
outstanding 1,000 shares 1 1
Additional paid-in capital 66,624 61,124
Retained earnings (deficit) (9,258) 13,198
---------- ---------
Total stockholders' equity 57,367 74,323
--------- ---------
Total liabilities and stockholders' equity $ 439,079 $ 291,010
========= =========
</TABLE>
See notes to consolidated financial statements.
3
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PIONEER AMERICAS ACQUISITION CORP.
CONSOLIDATED STATEMENTS OF OPERATIONS
(IN THOUSANDS)
<TABLE>
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THREE MONTHS ENDED SIX MONTHS ENDED
JUNE 30, JUNE 30,
--------------------------- ----------------------------
1997 1996 1997 1996
---------- ---------- ---------- ----------
<S> <C> <C> <C> <C>
Revenues $ 46,088 $ 47,671 $ 84,831 $ 91,963
Cost of sales 36,656 33,546 65,659 64,343
---------- ---------- ---------- ----------
Gross profit 9,432 14,125 19,172 27,620
Selling, general and administrative expense 6,111 6,285 12,281 12,375
---------- ---------- ---------- ----------
Operating income 3,321 7,840 6,891 15,245
Equity in net loss of unconsolidated subsidiary (719) (112) (1,774) (223)
Interest expense, net 4,980 4,405 9,438 8,349
Other income, net 206 15 437 104
---------- ---------- ---------- ----------
Income (loss) before taxes and extraordinary item (2,172) 3,338 (3,884) 6,777
Income tax provision (benefit) (489) 1,859 (311) 3,887
---------- ---------- ---------- ----------
Income (loss) before extraordinary item (1,683) 1,479 (3,573) 2,890
Extraordinary loss from early extinguishment of debt
(net of income tax benefit of $12,439) 18,658 -- 18,658 --
---------- ---------- ---------- ----------
Net income (loss) $ (20,341) $ 1,479 $ (22,231) $ 2,890
========== ========== ========== ==========
</TABLE>
See notes to consolidated financial statements.
4
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PIONEER AMERICAS ACQUISITION CORP.
CONSOLIDATED STATEMENTS OF CASH FLOWS
(IN THOUSANDS)
<TABLE>
<CAPTION>
SIX MONTHS ENDED
JUNE 30,
----------------------------------
1997 1996
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<S> <C> <C>
Operating activities:
Net income (loss) $ (22,231) $ 2,890
Adjustments to reconcile net income (loss) to net cash
provided by operating activities:
Extraordinary item (net of tax) 18,658 --
Depreciation and amortization 8,553 8,284
Equity in net loss of unconsolidated subsidiaries 1,774 223
Net change in deferred taxes (851) 1,425
Net effect of changes in operating assets and liabilities (net of
acquisitions) (Note 2) (7,078) (5,174)
---------- ----------
Net cash flows from (used in) operating activities (1,175) 7,648
---------- ----------
Investing activities:
Acquisition of businesses (97,000) --
Investment in and advances to unconsolidated subsidiary (809) (2,208)
Capital expenditures (5,278) (8,505)
---------- ----------
Net cash flows used in investing activities (103,087) (10,713)
---------- ----------
Financing activities:
Payments on long-term debt (162,092) --
Proceeds from long-term debt 300,000 --
Debt issuance and related costs (13,387) --
---------- ----------
Net cash flows from financing activities 124,521 --
---------- ----------
Net increase (decrease) in cash 20,259 (3,065)
---------- ----------
Cash acquired in purchase -- 505
Cash at beginning of period 14,417 11,218
---------- ----------
Cash at end of period $ 34,676 $ 8,658
========== ==========
</TABLE>
See notes to consolidated financial statements.
5
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PIONEER AMERICAS ACQUISITION CORP., INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
1. ORGANIZATION AND BASIS OF PRESENTATION
The consolidated balance sheet as of June 30, 1997 and the statements of
operations and cash flows for all periods presented are unaudited and reflect
all adjustments, consisting of normal recurring items, which management
considers necessary for a fair presentation. Operating results for the first
six months of 1997 are not necessarily indicative of results to be expected for
the year ending December 31, 1997. The consolidated financial statements
include the accounts of Pioneer Americas Acquisition Corp. and its consolidated
subsidiaries (collectively referred to as the "Company"). All significant
intercompany balances and transactions have been eliminated in consolidation.
All dollar amounts in the tabulations in the notes to the financial statements
are stated in thousands of dollars unless otherwise indicated.
The consolidated balance sheet at December 31, 1996 is derived from the
December 31, 1996 audited consolidated financial statements, but does not
include all disclosures required by generally accepted accounting principles,
since certain information and disclosures normally included in the notes to the
financial statements have been condensed or omitted as permitted by the rules
and regulations of the Securities and Exchange Commission. The accompanying
unaudited financial statements should be read in conjunction with the financial
statements contained in the Annual Report on Form 10-K for the year ended
December 31, 1996.
ACCOUNTING CHANGES
In June 1997, the Financial Accounting Standards Board issued Statement
No. 130, "Reporting Comprehensive Income," (SFAS No. 130) and Statement No.
131, "Disclosures About Segments of an Enterprise and Related Information,"
(SFAS No. 131). SFAS No. 130 and SFAS No. 131 are effective for fiscal years
beginning after December 15, 1997. SFAS No. 130 establishes standards for
reporting and displaying of comprehensive income and its components. SFAS No.
131 establishes standards for the way that public business enterprises report
information about operating segments in interim and annual financial
statements. These two statements have no effect on the Company's 1997
financial statements, but management is currently evaluating what, if any,
additional disclosures may be required when these two statements are adopted
for periods beginning with the first quarter of the year ending December 31,
1998.
ACQUISITION
On June 17, 1997, Pioneer Companies, Inc. ("PCI") and the Company
consummated the acquisition of a chlor-alkali production facility and related
business located in Tacoma, Washington (the "Tacoma Acquisition") from OCC
Tacoma, Inc. ("OCC Tacoma"), a subsidiary of Occidental Chemical Corporation.
Pursuant to the Asset Purchase Agreement dated as of May 14, 1997, a subsidiary
of the Company acquired substantially all of the assets and properties used by
OCC Tacoma in the chlor-alkali business at Tacoma, Washington. The purchase
price consisted of (i) $97,000, payable in cash; (ii) 55,000 shares of
Convertible Redeemable Preferred Stock, par value $.01 per share, of PCI,
having a liquidation preference of $100 per share, and (iii) the assumption of
certain obligations related to the acquired chlor-alkali business.
Concurrent with the closing of the Tacoma Acquisition on June 17, 1997, a
subsidiary of the Company, Pioneer Americas Acquisition Corp. ("PAAC")
consummated a series of related transactions (the "Refinancings") comprised of
(i) a cash tender offer (the "Tender Offer") to purchase all of PAAC's existing
13 3/8% First Mortgage Notes due 2005 (the "First Mortgage Notes") at 120% of
their principal amount, (ii) the issuance and sale of $200 million of 9 1/4%
Series A Senior Secured Notes due 2007 (the "Initial Offering"), and the
related solicitation of consents (the "Consent Solicitation") and (iii)
borrowings of $100.0 million in term loans under a new term loan facility (the
"Term Facility"). The proceeds of $300 million from these transactions were
used to complete the tender offer, effect the Tacoma acquisition, and pay
related expenses. Funds not so used were added to working capital.
On May 19, 1997, PAAC commenced the Tender Offer for all of its existing
First Mortgage Notes and the related Consent Solicitation from holders of the
First Mortgage Notes to delete or modify certain covenants and other provisions
governing the First Mortgage Notes. On June 17, 1997, all outstanding First
Mortgage Notes were repurchased in the Tender Offer.
On June 17, 1997, PAAC also entered into a $35.0 million revolving loan
(subject to borrowing base limitations that relate to the level of accounts
receivable and inventory) and letter of credit facility (the "Revolving
Facility").
6
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The Revolving Facility provides for revolving loans (the "Revolving
Loans") in an aggregate principal amount up to $35.0 million, of which up to
$10.0 million will be available for the issuance of letters of credit. PAAC
did not incur Revolving Loans at closing in connection with the Refinancings
and the Tacoma Acquisition but had $2.8 million in letters of credit
outstanding at such time under the Revolving Facility.
PRO FORMA FINANCIAL DATA
The following pro forma financial data presents the consolidated financial
results of operations as if the Tacoma Acquisition had occurred at the
beginning of the period presented and does not purport to be indicative of
either future results of operations or results that would have occurred had the
Tacoma Acquisition actually been made as of such date.
PRO FORMA COMBINED SUMMARY FINANCIAL DATA
(IN THOUSANDS)
<TABLE>
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SIX MONTHS ENDED
JUNE 30,
---------------------------
1997 1996
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Revenues $ 121,852 $ 131,627
Income (loss) before extraordinary item (1,682) 7,505
Extraordinary loss, early extinguishment
of debt (net of income tax benefit of $12,439) 18,658 --
--------- -----------
Net income (loss) $ (20,340) $ 7,505
========= ===========
</TABLE>
Earnings per share has not been presented as the Company is a wholly-owned
subsidiary of PCI and per share data would not provide any additional useful
information.
7
<PAGE> 8
2. SUPPLEMENTAL CASH FLOW INFORMATION
Net effect of changes in operating assets and liabilities (net of
acquisitions) are as follows:
<TABLE>
<CAPTION>
SIX MONTHS ENDED
JUNE 30,
---------------------------
<S> <C>
1997 1996
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Accounts receivable $ (4,577) $ (2,132)
Due from parent 1,862 (1,875)
Inventories (1,177) 4,100
Prepaid expenses 815 1,335
Other assets (108) (2,942)
Accounts payable (503) (4,604)
Accrued liabilities (3,825) 278
Returnable deposits 177 133
Other long-term liabilities 258 533
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Net change in operating accounts $ (7,078) $ (5,174)
========== ==========
Following is supplemental cash flow information:
SIX MONTHS ENDED
JUNE 30,
-----------------------------
1997 1996
----------- ----------
Cash payments for:
Interest $ 4,373 $ 9,201
Income taxes 543 3,048
Acquisition of OCC Tacoma facility:
Cash paid for acquisition $ 97,000
Equity contribution by parent 5,500
Liabilities assumed 2,955
----------
Fair value of assets acquired $ 105,455
==========
Acquisition of KWT, Inc. during the period:
Cash paid for acquisition $ 1,572
Long-term debt issued 8,017
Liabilities assumed 2,167
----------
Fair value of assets acquired $ 11,756
==========
</TABLE>
Other non-cash items included in the consolidated financial statements
include an increase in stockholder's equity of $1,400 for the six months ended
June 30, 1996 due to the recognition of the net operating loss carryforward.
8
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3. INVENTORIES
Inventories consist of the following:
<TABLE>
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JUNE 30, DECEMBER 31,
1997 1996
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Raw materials, supplies and parts $ 12,930 $ 7,512
Finished goods and work-in-process 5,480 2,668
Inventories under exchange agreements (3,765) (3,933)
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$ 14,645 $ 6,247
============ =============
</TABLE>
4. COMMITMENTS AND CONTINGENCIES
The Company is subject to various legal proceedings and potential claims
arising in the ordinary course of its business. In the opinion of management,
the Company has adequate legal defenses and/or insurance coverage with respect
to these matters and management does not believe that they will materially
affect the Company's operations or financial position.
5. RESULTS OF OPERATIONS
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<CAPTION>
THREE MONTHS ENDED SIX MONTHS ENDED
JUNE 30, JUNE 30,
---------------------------- ---------------------------
1997 1996 1997 1996
----------- ----------- ---------- ----------
<S> <C> <C> <C> <C>
Revenues $ 46,088 $ 47,671 $ 84,831 $ 91,963
Cost of sales 36,656 33,546 65,659 64,343
---------- ----------- ---------- ---------
Gross profit 9,432 14,125 19,172 27,620
Selling, general and administrative expense 6,111 6,285 12,281 12,375
---------- ----------- ---------- ---------
Operating income 3,321 7,840 6,891 15,245
Equity in net loss of unconsolidated subsidiary (719) (112) (1,774) (223)
Interest expense, net 4,980 4,405 9,438 8,349
Other income, net 206 15 437 104
---------- ----------- ---------- ---------
Income (loss) before taxes and extraordinary item (2,172) 3,338 (3,884) 6,777
Income tax provision (benefit) (489) 1,859 (311) 3,887
----------- ----------- ----------- ---------
Income (loss) before extraordinary item (1,683) 1,479 (3,573) 2,890
Extraordinary loss from early extinguishment of
debt (net of income tax benefit of $12,439) 18,658 -- 18,658 --
---------- ----------- ---------- ---------
Net income (loss) $ (20,341) $ 1,479 $ (22,231) $ 2,890
========== =========== ========== =========
</TABLE>
SIX MONTHS ENDED JUNE 30, 1997 COMPARED TO SIX MONTHS ENDED JUNE 30, 1996
Revenues
Revenues decreased by $7.1 million or approximately 8% to $84.8 million for
the six months ended June 30, 1997. Revenues for Pioneer Chlor Alkali Company,
Inc. ("PCAC") decreased $7.4 million or approximately 10% in the first six
months of 1997 compared to the same period a year ago. Electrochemical unit
("ECU") prices decreased by approximately 4%, which reflects a $50 per ton
decrease in caustic soda prices, partially offset by a $43 per ton increase in
chlorine prices. In addition, caustic soda sales volume decreased 12% due to
weather-related delays in Mississippi River barge shipments during the first
quarter of 1997 and a reduction in exchange activity. Revenues for All-Pure
Chemical Co. ("All-Pure") increased 6% or $2.7 million in the first six months
of 1997 compared to the same period a year ago. This increase was due to the
revenues associated with the acquisition of T.C. Products, Inc. which the
Company acquired in the second quarter of 1996. The remaining decrease in
revenues was attributable to the transfer of the business of a subsidiary of
the Company to a joint venture with PCI that is accounted for on the equity
method.
Cost of Sales
Cost of sales increased by $1.3 million or almost 2% to $65.7 million for
the six months ended June 30, 1997. This increase was the result of the
acquisition mentioned above, partially offset by lower cost of sales for
caustic soda due to lower sales volumes and the transfer of the business of a
subsidiary to a joint venture mentioned above.
9
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Gross Profit
Gross profit margin decreased from 30% during the first six months of 1996
to approximately 23% during the first six months of 1997. This decrease was a
result of lower ECU prices described above along with somewhat higher ECU
manufacturing costs.
Selling, General and Administrative Expense
Selling, general and administrative expense remained relatively unchanged
between the first six months of 1996 and the first six months of 1997.
Interest Expense
Interest expense increased by approximately $1.1 million to $9.4 million
in the first six months of 1997 from $8.3 million in the first half of 1996.
This increase was a result of the acquisition mentioned above and the debt
incurred for the refinancing of the Company's long-term debt and acquisition of
OCC Tacoma's chlor-alkali facility.
Income (Loss) Before Taxes and Extraordinary Item
As a result of the above, income (loss) before income taxes and
extraordinary item decreased $10.7 million to a loss of $3.9 million for the
six months ended June 30, 1997 from income of $6.8 million for the six months
ended June 30, 1996.
Extraordinary Loss from Early Extinguishment of Debt
During the second quarter of 1997, the Company recognized a $18.7 million
extraordinary loss as a result of the early extinguishment of the 13 3/8% First
Mortgage Notes. The extraordinary loss consisted primarily of the 20% premium
paid on the face value of the notes and the write-off of debt placement fees
related to the notes (net of tax benefit of $12.4 million).
THREE MONTHS ENDED JUNE 30, 1997 COMPARED TO THREE MONTHS ENDED JUNE 30, 1996
Revenues
Revenues decreased by $1.6 million or approximately 3% to $46.1 million for
the three months ended June 30, 1997. Revenues for PCAC decreased $2.5 million
or approximately 7% in the first three months of 1997 compared to the same
period a year ago. ECU prices decreased by approximately 4%, which reflects a
$58 per ton decrease in caustic soda prices, partially offset by a $48 per ton
increase in chlorine prices. In addition, caustic soda sales volume declined
because of a decrease in exchange activity. Revenues for All-Pure increased
11% or $1.5 million in the first three months of 1997 compared to the same
period a year ago. This increase was due to the revenues associated with the
acquisition of T.C. Products, Inc. which the Company acquired in the third
quarter of 1996.
Cost of Sales
Cost of sales increased by $3.1 million or approximately 9% to $36.7
million for the three months ended June 30, 1997. This increase was the result
of the acquisition mentioned above along with higher ECU manufacturing costs
when compared to the same period a year ago.
Gross Profit
Gross profit margin decreased from 30% during the second quarter of 1996
to approximately 20% during the second quarter of 1997. This decrease was a
result of lower ECU prices described above along with somewhat higher ECU
manufacturing costs.
Selling, General and Administrative Expense
Selling, general and administrative expense decreased by $0.2 million or
3% to $6.1 million during the 1997 period.
Interest Expense
Interest expense increased by approximately $0.6 million to $5.0 million
in the second quarter of 1997 from $4.4 million in the second quarter of 1996.
This increase was a result of the acquisitions mentioned above and the debt
incurred for the refinancing of the Company's long-term debt and the Tacoma
Acquisition.
Income (Loss) Before Taxes and Extraordinary Item
As a result of the above, income (loss) before income taxes and
extraordinary item decreased $5.5 million to a loss of $2.2 million for the
three months ended June 30, 1997 from income of $3.3 million for the three
months ended June 30, 1996.
10
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Extraordinary Loss from Early Extinguishment of Debt
During the second quarter of 1997, the Company recognized a $18.7 million
extraordinary loss as a result of the early extinguishment of the 13 3/8% First
Mortgage Notes. The extraordinary loss consisted primarily of the 20% premium
paid on the face value of the notes and the write-off of debt placement fees
related to the notes (net of tax benefit of $12.4 million).
PART II - OTHER INFORMATION
Item 6. Exhibits and Reports on Form 8-K
(a) Exhibits
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No. Description
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<S> <C>
2 Asset Purchase Agreement, dated as of May 14, 1997, by
and between OCC Tacoma, Inc. and Pioneer Companies,
Inc. (incorporated by reference to Exhibit 2 to the
Company's Form 8-K dated June 17, 1997, and filed on
July 1, 1997).
4.1 Indenture, dated as of June 17, 1997, by and among the
Company, the Subsidiary Guarantors defined
therein and United States Trust Company of New York, as
Trustee, relating to $200,000,000 principal amount of
9 1/4% Series A Senior Notes due 2007, including form
of Note and Guarantees (incorporated by reference to
Exhibit 4.1 to the Company's Registration Statement on
Form S-4, as amended (file no. 333-30683)).
4.2(a) Deed of Trust, Assignment of Leases and Rents, Security
Agreement, Fixture Filing and Financing Statement by
Pioneer Chlor Alkali Company, Inc. ("PCAC") (Tacoma,
Washington) (incorporated by reference to Exhibit 4.2(a)
to the Company's Registration Statement on Form S-4, as
amended (file no. 333-30683)).
4.2(b) Mortgage, Assignment of Leases and Rents, Security
Agreement, Fixture Filing and Financing Statement
by PCAC (St. Gabriel, Louisiana) (incorporated by
reference to Exhibit 4.2(b) to the Company's
Registration Statement on Form S-4, as amended (file
no. 333-30683)).
4.2(c) Mortgage, Assignment of Leases and Rents, Security
Agreement, Fixture Filing and Financing Statement
by PCAC (Henderson, Nevada) (incorporated by reference to
Exhibit 4.2(c) to the Company's Registration Statement
on Form S-4, as amended (file no. 333-30683)).
4.3(a) Term Loan Agreement, dated as of June 17, 1997, among the
Company, various financial institutions as Lenders,
DLJ Capital Funding, inc., as the Syndication Agent,
Salomon Brothers Holding Company Inc, as the
Documentation Agent and Bank of America Illinois, as the
Administrative Agent (the "Term Loan Agreement")
(incorporated by reference to Exhibit 4.3(a) to the
Company's Registration Statement on Form S-4, as amended
(file no. 333-30683)).
4.3(b) Subsidiary Guaranty, dated June 17, 1997, executed by
each of the Subsidiaries party thereto, as guarantor,
respectively, in favor of the Lenders, guaranteeing the
obligations of one another under the Term Loan Agreement
(incorporated by reference to Exhibit 4.3(b) to the
Company's Registration Statement on Form S-4, as amended
(file no. 333-30683)).
4.4 Security Agreement, dated as of June 17, 1997, among PCAC
and United States Trust Company of New York, as
Collateral Agent (incorporated by reference to Exhibit
4.4 to the Company's Registration Statement on Form S-4,
as amended (file no. 333-30683)).
4.5 Stock Pledge Agreement, dated as of June 17, 1997, among
Pioneer Americas, Inc. ("PAI") and United States Trust
Company of New York, as Collateral Agent (incorporated
by reference to Exhibit 4.5 to the Company's Registration
Statement on Form S-4, as amended (file no. 333-30683)).
</TABLE>
11
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<TABLE>
<S> <C>
4.6(a) Loan and Security Agreement, dated as of June 17, 1997,
by and among the Company, Bank of America Illinois, as
Agent and Lender and the other Lenders party thereto (the
"Revolving Loan Agreement") (incorporated by reference to
Exhibit 4.6(a) to the Company's Registration Statement on
Form S-4, as amended (file no. 333-30683)).
4.6(b) Master Corporate Guaranty, dated June 17, 1997, executed
by each of the Subsidiaries party thereto, as guarantor,
respectively, in favor of Bank of Americas Illinois, as
Agent, for the ratable benefit of the Lenders,
guaranteeing the obligations of one another under the
Revolving Loan Agreement (incorporated by reference to
Exhibit 4.6(b) to the Company's Registration Statement on
Form S-4, as amended (file no. 333-30683)).
4.6(c) Master Security Agreement, dated June 17, 1997, executed
by each of the Subsidiaries party thereto, as guarantor,
respectively, in favor of Bank of Americas Illinois, as
Agent, for the ratable benefit of the Lenders
(incorporated by reference to Exhibit 4.6(c) to the
Company's Registration Statement on Form S-4, as amended
(file no. 333-30683)).
4.7 Intercreditor and Collateral Agency Agreement, dated as
of June 17, 1977 by and among United States Trust
Company of New York, as Trustee and Collateral Agent,
Bank of America Illinois, as Agent, the Company,
PAI and PCAC (incorporated by reference to Exhibit
4.7 to the Company's Registration Statement on Form S-4,
as amended (file no. 333-30683)).
10.1 Chlorine and Caustic Soda Sales Agreement, dated as of
June 17, 1997, between Occidental Chemical Corporation
and PCAC (incorporated by reference to Exhibit 10.13 to
the Company's Registration Statement on Form S-4, as
amended (file no. 333-30683)).
10.2 Chlorine Purchase Agreement, dated as of June 17, 1997,
between OCC Tacoma, Inc. and PCAC (incorporated by
reference to Exhibit 10.14 to the Company's Registration
Statement on Form S-4, as amended (file no. 333-30683)).
10.3 Environmental Operating Agreement, dated as of June 17,
1997, between OCC Tacoma, Inc. and PCAC (incorporated by
reference to Exhibit 10.15 to the Company's Registration
Statement on Form S-4, as amended (file no. 333-30683)).
27 Financial Data Schedule.
</TABLE>
(b) Reports on Form 8-K
On May 29, 1997, the Company filed a Current Report on Form 8-K
dated May 20, 1997. The report disclosed under Item 5, Other
Events, that the Company had commenced a cash tender offer to
purchase all of the $135,000,000 in principal amount of its
outstanding 13-3/8% First Mortgage Notes due 2005 and a related
consent solicitation to eliminate certain restrictive covenants
and other provisions of the Indenture pursuant to which the Notes
were issued. No financial statements were filed with the report.
On July 1, 1997, the Company filed a Current Report on Form 8-K
dated June 17, 1997. The report disclosed under Item 2,
Acquisition or Disposition of Assets, that on June 17, 1997, PCAC
had acquired substantially all of the assets and properties used
by OCC Tacoma, Inc. in the chlor-alkali business in Tacoma,
Washington, including a chlor-alkali production facility, and the
source of consideration for the acquisition was also disclosed.
Filed with the report were financial statements of the business
acquired and pro forma financial information.
12
<PAGE> 13
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 hereunto duly authorized.
PIONEER AMERICAS ACQUISITION CORP.
August 12, 1997 By: /s/ Philip J. Ablove
----------------------
Philip J. Ablove
Vice President and
Chief Financial Officer
13
<PAGE> 14
EXHIBIT INDEX
<TABLE>
<CAPTION>
EXHIBIT
NO. DESCRIPTION
- ------- -----------
<S> <C>
27 Financial Data Schedule.
</TABLE>
<TABLE> <S> <C>
<ARTICLE> 5
<MULTIPLIER> 1,000
<S> <C>
<PERIOD-TYPE> 6-MOS
<FISCAL-YEAR-END> DEC-31-1997
<PERIOD-START> JAN-1-1997
<PERIOD-END> JUN-30-1997
<CASH> 34,676
<SECURITIES> 0
<RECEIVABLES> 25,894
<ALLOWANCES> 1,411
<INVENTORY> 14,645
<CURRENT-ASSETS> 74,153
<PP&E> 192,539
<DEPRECIATION> 21,924
<TOTAL-ASSETS> 439,079
<CURRENT-LIABILITIES> 36,747
<BONDS> 305,620
0
0
<COMMON> 1
<OTHER-SE> 57,366
<TOTAL-LIABILITY-AND-EQUITY> 439,079
<SALES> 84,831
<TOTAL-REVENUES> 84,831
<CGS> 65,659
<TOTAL-COSTS> 65,659
<OTHER-EXPENSES> 0
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 9,438
<INCOME-PRETAX> (3,884)
<INCOME-TAX> (311)
<INCOME-CONTINUING> (3,573)
<DISCONTINUED> 0
<EXTRAORDINARY> (18,658)
<CHANGES> 0
<NET-INCOME> (22,231)
<EPS-PRIMARY> (22,231)
<EPS-DILUTED> (22,231)
</TABLE>
