<PAGE> 1
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, DC 20549
FORM 10-Q/A
AMENDMENT NO. 1
(Mark One)
[x] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15 (d) OF THE SECURITIES
EXCHANGE ACT OF 1934
For the quarterly period ended September 30, 1995
OR
[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15 (d) OF THE SECURITIES
EXCHANGE ACT OF 1934
For the transition period from _____________________ to _______________________
33-93970
(Commission File Number)
INTERNATIONAL WIRE GROUP, INC.
(Exact name of Registrant as specified in its charter)
DELAWARE
(State or other jurisdiction of incorporation organization)
43-1705942
(I.R.S. Employer Identification No.)
101 SOUTH HANLEY ROAD
ST. LOUIS, MO 63105
(314) 719-1000
(Address, including zip code, and telephone number, including
area code, or Registrant's principal executive offices)
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 NO X
------- --------
Indicate the number of shares outstanding of each of the issuer's classes of
common stock, as of the latest practicable date:
<TABLE>
<CAPTION>
Outstanding at
Class October 31, 1995
-------------------------------------- ----------------
<S> <C>
International Wire Group, Inc.
Common Stock 1,000
</TABLE>
<PAGE> 2
INTERNATIONAL WIRE GROUP, INC.
INDEX
<TABLE>
<CAPTION>
PAGE
----
<S> <C>
PART I. FINANCIAL INFORMATION
International Wire Group, Inc.
Consolidated Balance Sheet as of September 30, 1995 . . . . . . . . . . . . . . . . . . . . . . . . . . . 1
Consolidated Statements of Operations for the three and four months ended
September 30, 1995 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2
Consolidated Statement of Cash Flows for the four months ended September 30, 1995 . . . . . . . . . . . . 3
Notes to Consolidated Financial Statements . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4
SIGNATURES . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 14
</TABLE>
(i)
<PAGE> 3
INTERNATIONAL WIRE GROUP, INC.
CONSOLIDATED BALANCE SHEET
AS OF SEPTEMBER 30, 1995
(IN THOUSANDS, EXCEPT SHARE DATA)
(UNAUDITED)
<TABLE>
<S> <C>
ASSETS
Current assets:
Cash and cash equivalents . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ (1,049)
Accounts receivable, less allowance of $870 . . . . . . . . . . . . . . . . . . . . 63,076
Inventories . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 52,626
Prepaid expenses and other . . . . . . . . . . . . . . . . . . . . . . . . . . . 2,754
----------
Total current assets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 117,407
Property, plant and equipment, net . . . . . . . . . . . . . . . . . . . . . . . . 75,649
Deferred financing costs, net . . . . . . . . . . . . . . . . . . . . . . . . . . 17,292
Intangible assets, net . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 215,665
Other assets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6,560
----------
Total assets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 432,573
==========
LIABILITIES AND STOCKHOLDER'S EQUITY
Current liabilities:
Current maturities of long-term obligations . . . . . . . . . . . . . . . . . . . $ 2,115
Accounts payable . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 40,350
Accrued and other liabilities . . . . . . . . . . . . . . . . . . . . . . . . . . . 25,672
Accrued interest . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6,218
Income taxes payable . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5,286
Deferred taxes . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1,076
----------
Total current liabilities . . . . . . . . . . . . . . . . . . . . . . . . . . . 80,717
Long-term obligations, less current maturities . . . . . . . . . . . . . . . . . . . 333,995
Other long-term liabilities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 15,479
----------
Total liabilities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 430,191
----------
Stockholder's equity:
Common stock, $.01 par value, 1,000 shares issued and outstanding . . . . . . . . -
Contributed capital . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 81,191
Carryover of predecessor basis . . . . . . . . . . . . . . . . . . . . . . . . . . (75,547)
Accumulated deficit . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (3,262)
----------
Total stockholder's equity . . . . . . . . . . . . . . . . . . . . . . . . . . 2,382
----------
Total liabilities and stockholder's equity . . . . . . . . . . . . . . . . . . $ 432,573
==========
</TABLE>
See accompanying notes to the consolidated financial statements
1
<PAGE> 4
INTERNATIONAL WIRE GROUP, INC.
CONSOLIDATED STATEMENTS OF OPERATIONS
(IN THOUSANDS)
(UNAUDITED)
<TABLE>
<CAPTION>
Three Months Ended Four Months Ended
September 30, 1995 September 30, 1995
------------------ ------------------
<S> <C> <C>
Net sales . . . . . . . . . . . . . . . . . . . . . . . . $ 105,301 $ 141,564
Operating expenses:
Cost of goods sold . . . . . . . . . . . . . . . . . . 83,562 112,837
Selling, general and administrative . . . . . . . . . 8,433 10,970
Depreciation and amortization . . . . . . . . . . . . 4,423 5,897
Expenses related to plant closing . . . . . . . . . . . -- 1,750
--------- ----------
Operating income . . . . . . . . . . . . . . . . . . . . 8,883 10,110
Other income (expense):
Interest expense . . . . . . . . . . . . . . . . . . . (8,285) (11,064)
Amortization of deferred financing costs . . . . . . . (619) (864)
Other, net . . . . . . . . . . . . . . . . . . . . . . 10 (173)
--------- ----------
Loss before income tax provision . . . . . . . . . . . . (11) (1,991)
Income tax provision . . . . . . . . . . . . . . . . . . 1,341 1,271
--------- ----------
Net loss . . . . . . . . . . . . . . . . . . . . . . . . $ (1,352) $ (3,262)
========= ==========
</TABLE>
See accompanying notes to the consolidated financial statements
2
<PAGE> 5
INTERNATIONAL WIRE GROUP, INC.
CONSOLIDATED STATEMENT OF CASH FLOWS
FOUR MONTHS ENDED SEPTEMBER 30, 1995
(IN THOUSANDS)
(UNAUDITED)
<TABLE>
<S> <C>
Cash flows provided by (used in) operating activities:
Net loss . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ (3,262)
Adjustments to reconcile net loss to net cash provided
by (used in) operating activities:
Depreciation and amortization . . . . . . . . . . . . . . . . . . . . 5,897
Amortization of deferred financing costs . . . . . . . . . . . . . . . 864
Change in assets and liabilities, net of acquisitions:
Accounts receivable . . . . . . . . . . . . . . . . . . . . . . . . (3,802)
Inventories . . . . . . . . . . . . . . . . . . . . . . . . . . . . (3,773)
Prepaid expenses and other . . . . . . . . . . . . . . . . . . . . . (724)
Accounts payable . . . . . . . . . . . . . . . . . . . . . . . . . . 3,955
Accrued and other liabilities . . . . . . . . . . . . . . . . . . . 1,175
Accrued interest . . . . . . . . . . . . . . . . . . . . . . . . . . 6,218
Income taxes payable . . . . . . . . . . . . . . . . . . . . . . . . 554
Other long-term liabilities . . . . . . . . . . . . . . . . . . . . (12)
----------
Net cash from operating activities . . . . . . . . . . . . . . . . . . . 7,090
----------
Cash flows provided by (used in) investing activities:
Acquisitions, net of cash . . . . . . . . . . . . . . . . . . . . . . (341,046)
Capital expenditures . . . . . . . . . . . . . . . . . . . . . . . . . (3,204)
----------
Net cash from investing activities . . . . . . . . . . . . . . . . . . . (344,250)
----------
Cash flows provided by (used in) financing activities:
Proceeds from issuance of long-term obligations . . . . . . . . . . . 337,500
Equity proceeds . . . . . . . . . . . . . . . . . . . . . . . . . . . 15,188
Repayment of long-term obligations . . . . . . . . . . . . . . . . . . (2,577)
Financing fees and other . . . . . . . . . . . . . . . . . . . . . . . (14,000)
----------
Net cash from financing activities . . . . . . . . . . . . . . . . . . . 336,111
----------
Net change in cash . . . . . . . . . . . . . . . . . . . . . . . . . . . (1,049)
Cash at inception . . . . . . . . . . . . . . . . . . . . . . . . . . . -
----------
Cash at end of the period . . . . . . . . . . . . . . . . . . . . . . . $ (1,049)
==========
</TABLE>
See accompanying notes to the consolidated financial statements
3
<PAGE> 6
INTERNATIONAL WIRE GROUP, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(IN THOUSANDS, EXCEPT PER SHARE DATA)
(UNAUDITED)
1. THE COMPANY
International Wire Group, Inc. ("Group" or the "Company"), a Delaware
corporation, was formed to participate in the transactions contemplated by
the Acquisitions (as described below). On June 12, 1995, Wirekraft
Holdings Corp. ("Wirekraft"), Omega Wire Corp. ("Omega"), International
Wire Holding Company ("Holding"), the sole stockholder of Group, Group,
Wirekraft Acquisition Company and certain shareholders of Wirekraft and
Omega entered into a series of acquisitions and mergers (the
"Acquisitions") pursuant to which Group acquired all of the common equity
securities (and all securities convertible into such securities) of
Wirekraft and all of the common equity securities of Omega. The Company
has designated June 1, 1995, as the effective date of the Acquisitions for
financial reporting purposes. Wirekraft is a manufacturer of insulated
wire and wire harnesses. Omega is a manufacturer of non-insulated bare and
tin-plated copper and cable products.
The total purchase price of the Acquisitions was approximately $420,591,
which included the redemption of certain equity securities, the retirement
of existing indebtedness of Wirekraft and Omega and the payment of related
fees and expenses, is summarized as follows:
<TABLE>
<S> <C>
Redemption of common stock, equity rights, warrants . . . . . . . . . . . . . $104,891
and options
Repayment of existing indebtedness . . . . . . . . . . . . . . . . . . . . . . 275,400
Redemption of preferred stock . . . . . . . . . . . . . . . . . . . . . . . . 26,300
Fees and expenses . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 14,000
--------
$420,591
========
</TABLE>
The Acquisitions were accounted for using the purchase method of accounting
whereby the total purchase price has been preliminary allocated to the
consolidated assets and liabilities based on their estimated respective
fair values. In accordance with EITF 88-16, "Basis in Leveraged Buyout
Transactions", a portion of the Acquisitions have been accounted for at
"predecessor basis". The application of predecessor basis reduced
stockholder's equity and goodwill by $75,547. The purchase price
allocations are still in process. It is not expected that the final
allocation of the purchase price will result in a materially different
allocation than is presented herein.
4
<PAGE> 7
INTERNATIONAL WIRE GROUP, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(IN THOUSANDS, EXCEPT PER SHARE DATA)
(UNAUDITED)
The total purchase price including fees and expenses has been preliminarily
allocated to the acquired net assets as follows:
<TABLE>
<S> <C>
Current assets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $110,616
Property, plant and equipment . . . . . . . . . . . . . . . . . . . . . . . . 76,508
Goodwill . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 217,398
Costs and fees . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 19,000
Other assets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4,900
Current liabilities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (66,700)
Other liabilities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (16,678)
Carryover predecessor basis . . . . . . . . . . . . . . . . . . . . . . . . . 75,547
--------
$420,591
========
</TABLE>
2. SIGNIFICANT ACCOUNTING POLICIES
Principles of Consolidation
The consolidated financial statements include the accounts of Group and its
wholly-owned subsidiaries. All material intercompany balances and
transactions have been eliminated in consolidation.
Revenue Recognition
Sales and related cost of goods sold are included in income when goods are
shipped to the customers.
Inventories
Inventories are valued at the lower of cost or market. Cost is determined
using the last-in, first-out ("LIFO") method.
Property, Plant and Equipment
Property, plant and equipment is stated at cost. Depreciation is
calculated using the straight-line method. The average estimated lives
utilized in calculating depreciation are as follows: buildings - 25-40
years; building improvements - 15 years; machinery and equipment - 3-11
years; and furniture and fixtures - 5 years. Leasehold improvements are
amortized over the shorter of the term of the respective lease or the life
of the respective improvement.
5
<PAGE> 8
INTERNATIONAL WIRE GROUP, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(IN THOUSANDS, EXCEPT PER SHARE DATA)
(UNAUDITED)
Intangible Assets
Intangible assets consist principally of goodwill arising from the excess
of cost over the value of net assets acquired, which is being amortized
using the straight-line method over forty years. The Company periodically
reviews the carrying value and amortization period for goodwill to
determine whether events and circumstances warrant a reduction in the
carrying value or amortization period.
Deferred Financing Costs
Deferred financing costs, consisting of fees and other expenses associated
with the debt financing are amortized over the term of the related debt
using the effective interest method and the straight-line method which
approximates the effective interest method.
Income Taxes
Deferred income taxes are determined using the liability method.
Fair Value of Financial Instruments
The fair market value of the financial instruments included in the
consolidated financial statements approximate the carrying values of the
financial instruments.
Statement of Cash Flows
For purposes of the consolidated statement of cash flows, the Company
considers all highly liquid investments purchased with maturities of three
months or less to be cash equivalents. Interest paid and taxes paid for
the four months ended September 30, 1995 were $4,846 and $717,
respectively.
Unaudited Interim Consolidated Financial Statements
The unaudited interim consolidated financial statements have been prepared
in accordance with instructions to Form 10-Q. A balance sheet as of
December 31, 1994, however, has not been presented as the Company's
formation occurred subsequent thereto for the purpose of participating in
the Acquisitions. The interim financial statements should be read in
conjunction with the audited financial statements of its predecessors which
are available in the Registration Statement on Form S-1 (No. 33-93970) of
International Wire Group, Inc., as declared effective by the S.E.C. on
September 29, 1995. The unaudited interim consolidated financial
statements reflect all normal recurring adjustments which are, in the
opinion of management, necessary for a fair presentation of financial
position and results of operations. The results for the three and four
months ended September 30, 1995, are not necessarily indicative of the
results that may be expected for a full fiscal year.
6
<PAGE> 9
INTERNATIONAL WIRE GROUP, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(IN THOUSANDS, EXCEPT PER SHARE DATA)
(UNAUDITED)
3. PRO FORMA DATA
Pro forma data, which show condensed results of operations for the nine
months ended September 30, 1995 and 1994 as though the Acquisitions and
related financing had occurred at the beginning of the respective periods,
is as follows:
<TABLE>
<CAPTION>
Nine Months Ended Nine Months Ended
September 30, 1995 September 30, 1994
------------------ ------------------
<S> <C> <C>
Net sales . . . . . . . . . . . . . . . . . $ 350,674 $ 336,437
Net income (loss) . . . . . . . . . . . . . $ (932) $ 3,254
</TABLE>
4. INVENTORIES
The composition of inventories consists of the following:
<TABLE>
<S> <C>
Raw materials . . . . . . . . . . . . . . . . . . . . . . . . . . . . $15,381
Work-in-process . . . . . . . . . . . . . . . . . . . . . . . . . . . 19,488
Finished goods . . . . . . . . . . . . . . . . . . . . . . . . . . . . 17,757
-------
Total inventories . . . . . . . . . . . . . . . . . . . . . . . . . $52,626
=======
</TABLE>
5. FINANCING COST AND RELATED PARTY TRANSACTIONS
In connection with the Acquisitions, the Company incurred aggregate fees
and expenses of $14,000. Costs of $900 related to the Subordinated Notes
and Credit Agreement (see Note 6) are included in deferred financing costs
and are being amortized over the terms of the related borrowings. Costs of
$900 related to the issuance of Holding's common stock have been deducted
from the proceeds to reduce the carrying value of the common stock.
In connection with the Acquisitions and obtaining the related financing, the
Company entered into a Monitoring and Oversight Agreement ("Agreement") with
Hicks, Muse & Co. Partners, L.P. ("Hicks, Muse") (an affiliate of the
Company) pursuant to which the Company paid Hicks, Muse a cash fee of $3,725
as compensation for financial advisory services. The fees have been
allocated to the debt and equity securities issued in connection with the
Acquisitions as deferred financing costs or as a deduction from the cash
proceeds received from the sale of the common stock of Holding. The
Agreement further provides that the Company shall pay Hicks, Muse an annual
fee of $500, for ten years for monitoring and oversight services adjusted
annually at the end of each fiscal year to an amount equal to .1% of the
consolidated net sales of the Company, but in no event less than $500
annually. The obligations under the Agreement and the related deferred
financing costs have been recorded in the consolidated balance sheet.
7
<PAGE> 10
INTERNATIONAL WIRE GROUP, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(IN THOUSANDS, EXCEPT PER SHARE DATA)
(UNAUDITED)
6. LONG-TERM OBLIGATIONS
The composition of long-term obligations is as follows:
<TABLE>
<S> <C>
Credit Agreement:
Revolving Credit Facility . . . . . . . . . . . . . . . . . . $ 21,150
Term Facilities . . . . . . . . . . . . . . . . . . . . . . . 163,812
Senior Subordinated Notes . . . . . . . . . . . . . . . . . . . . 150,000
Other . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1,148
---------
Total . . . . . . . . . . . . . . . . . . . . . . . . . . . . 336,110
Less Current maturities . . . . . . . . . . . . . . . . . . . . . (2,115)
---------
$ 333,995
=========
</TABLE>
The schedule of principal payments for long-term obligations at September
30, 1995 is as follows:
<TABLE>
<S> <C>
1995 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 1,187
1996 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10,625
1997 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 14,500
1998 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 16,500
1999 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 20,375
Thereafter . . . . . . . . . . . . . . . . . . . . . . . . . . . . 272,923
---------
Total . . . . . . . . . . . . . . . . . . . . . . . . . . . . 336,110
=========
</TABLE>
In connection with the Acquisitions, Group and Holding entered into a
Credit Agreement (the "Credit Agreement") dated as of June 12, 1995 with
certain financial institutions. Borrowings under the Credit Agreement are
collateralized by first priority mortgages and liens on all of the assets
of Group. In addition, borrowings under the Credit Agreement are
guaranteed by Holding.
The Credit Agreement consists of a $82,500 term loan (the "Term A Loan"),
$82,500 term loan (the "Term B Loan" together with the Term A Loan, the
"Term Facility") and $75,000 revolving credit facility (the "Revolver").
The Revolver provides that up to $5,000 of such facilities may be used for
the issuance of letters of credit. At September 30, 1995, Group had $930
in outstanding letters of credit. At September 30, 1995 there was $52,920
of unused borrowing capacity under the Credit Agreement. The Credit
Agreement contains several financial covenants which, among other things,
require Group to maintain certain financial ratios and restrict Group's
ability to incur indebtedness, make capital expenditures and pay dividends.
A commitment fee on the unused portion of the Revolver of .5% is payable
monthly.
8
<PAGE> 11
INTERNATIONAL WIRE GROUP, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(IN THOUSANDS, EXCEPT PER SHARE DATA)
(UNAUDITED)
Mandatory principal payments of the Term Facility are due in quarterly
installments. The final installment on the Term A Loan is due on September
30, 2000 at which time the Revolver is also due. The final installment on
the Term B Loan is due on September 30, 2002. The Credit Agreement
requires annual prepayments of the Term Loan based on "Excess Cash Flow"
(as defined in the Credit Agreement).
Borrowings under the Term A Loan and Revolver bear interest, at the option
of Group, at a rate per annum equal to (a) the Alternate Base Rate (as
defined in the Credit Agreement) plus 1.5% or (b) the Eurodollar Rate (as
defined in the Credit Agreement) plus 2.5%. Borrowings under the Term B
Loan bear interest, at the option of Group, at a rate per annum equal to
(a) the Alternate Base Rate (as defined in the Credit Agreement) plus 2.0%
or (b) the Eurodollar Rate (as defined in the Credit Agreement) plus 3.0%.
The Alternate Base Rate and Eurodollar Rate margins are established
quarterly based on a formula as defined in the Credit Agreement. Interest
payment dates vary depending on the interest rate option to which the Term
Loans and the Revolver are tied, but generally interest is payable
quarterly.
The Subordinated Notes due 2005 ("Subordinated Notes") were issued under an
indenture, dated June 12, 1995 (the "Indenture") in connection with the
Acquisitions. The Subordinated Notes represent unsecured general
obligations of Group and are subordinated to all Senior Debt (as defined in
the Indenture) of Group. The Subordinated Notes, which were originally
sold pursuant to an exemption from the registration requirements of the
Securities Act of 1933, as amended, were exchanged for identical notes
registered under such Act in November, 1995.
The Subordinated Notes are fully and unconditionally (as well as jointly
and severally) guaranteed on an unsecured, senior subordinated basis by
each subsidiary of the Company (the "Guarantor Subsidiaries") other than
Electro Componentes de Mexico, S.A. de C.V. and Wirekraft Industries de
Mexico, S.A. de C.V. (The "Non-Guarantor Subsidiaries"). Each of the
Guarantor Subsidiaries and Non-Guarantor Subsidiaries is wholly owned by
the Company.
The Subordinated Notes mature on June 1, 2005. Commencing December 1,
1995, interest on the Subordinated Notes will be payable semi-annually on
each June 1 and December 1. The Subordinated Notes bear interest at the
rate of 11.75% per annum. The Subordinated Notes may not be redeemed prior
to June 1, 2000, except in the event of a Change of Control (as defined) or
Initial Public Offering (as defined).
The Subordinated Notes restrict, among other things, the incurrence of
additional indebtedness by the Company, the payment of dividends and other
distributions in respect of the Company's capital stock, the payment of
dividends and other distributions by the Company's subsidiaries, the
creating of liens on the properties and the assets of the Company to secure
certain subordinated debt and certain mergers, sales of assets and
transactions with affiliates.
7. RESTATEMENT OF FINANCIAL INFORMATION
The Company has restated its previously issued financial statements for the
four months ended September 30, 1995 to reflect certain adjustments. These
adjustments relate to the recognition of certain costs associated with plant
closings. The impact of these adjustments on the Company's results as
originally reported is summarized below:
<TABLE>
<CAPTION>
FOR THE FOUR MONTHS ENDING
SEPTEMBER 30, 1995
--------------------------
AS REPORTED AS RESTATED
----------- -----------
(AMOUNTS IN THOUSANDS)
<S> <C> <C>
Income (loss) before income taxes........................ $ (241) $ (1,991)
Net income (loss)........................................ $ (1,512) $ (3,262)
Retained earnings (deficit) ............................. $ (1,512) $ (3,262)
</TABLE>
These adjustments are reflected in the Company's accompanying consolidated
statements of operations.
8. PLANT CLOSING EXPENSE
The plant closing costs relate to consolidating harness segment facilities
and include provisions for certain shut-down and severance related costs.
A summary of activity related to plant closing is as follows:
<TABLE>
<CAPTION>
FOUR MONTHS ENDED
SEPTEMBER 30, 1995
-----------------
<S> <C>
Balance, beginning of period ............................ $ -
Charges to operations:
Facility shut-down costs ............................. 731
Lease commitments .................................... 67
Key personnel and severance costs .................... 952
-------
1,750
Costs incurred:
Facility shut-down costs ............................. (254)
Lease commitments .................................... (33)
Key personnel and severance costs .................... (508)
-------
Balance, end of period .................................. $ 955
</TABLE> =======
9. GUARANTOR SUBSIDIARIES
The Senior Notes are fully and unconditionally (as well as jointly and
severally) guaranteed on an unsecured, senior subordinated basis by each
subsidiary of the Company (the "Guarantor Subsidiaries") other than Electro
Componentes de Mexico, S.A. de C.V. and Wirekraft Industries de Mexico, S.A.
de C.V. (the "Non-Guarantor Subsidiaries"). Each of the Guarantor
Subsidiaries and Non-Guarantor Subsidiaries is wholly owned by the Company.
The following condensed, consolidating financial statements of the Company
include the accounts of the Company, the combined accounts of the Guarantor
Subsidiaries and the combined accounts of the Non-Guarantor Subsidiaries.
Given the size of the Non-Guarantor Subsidiaries relative to the Company on
a consolidated basis, separate financial statements of the respective
Guarantor Subsidiaries are not presented because management has determined
that such information is not material in assessing the Guarantor
Subsidiaries.
9
<PAGE> 12
INTERNATIONAL WIRE GROUP, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(IN THOUSANDS, EXCEPT PER SHARE DATA)
(UNAUDITED)
<TABLE>
<CAPTION>
TOTAL
TOTAL NON
COMPANY GUARANTOR GUARANTOR ELIMINATIONS TOTAL
----------- ----------- ----------- ------------ -----------
<S> <C> <C> <C> <C> <C>
BALANCE SHEET
As of September 30, 1995
ASSETS
Cash .................................... $ -- $ (1,781) $ 732 $ -- $ (1,049)
Accounts receivable ..................... -- 62,454 7,993 (7,371) 63,076
Inventory ............................... -- 52,626 -- -- 52,626
Other assets ............................ -- 2,646 108 -- 2,754
----------- ----------- ----------- ----------- -----------
Total current assets .................. -- 115,945 8,833 (7,371) 117,407
Property plant and equipment, net ......... -- 68,393 7,256 -- 75,649
Intangible assets, net .................... 17,292 215,665 -- -- 232,957
Investment in subsidiaries ................ 415,257 -- -- (415,257) --
Other assets .............................. -- 6,560 -- -- 6,560
----------- ----------- ----------- ----------- -----------
Total assets .......................... $ 432,549 $ 406,563 $ 16,089 $ (422,628) $ 432,573
=========== =========== =========== =========== ===========
LIABILITIES AND STOCKHOLDER'S EQUITY
Current liabilities ..................... $ 7,617 $ 77,997 $ 2,474 $ (7,371) $ 80,717
Long-term obligations, less current
maturities ............................ 332,962 1,033 -- -- 333,995
Other long-term liabilities ............. -- 15,479 -- -- 15,479
Intercompany (receivable) payable ....... 14,041 (28,756) 14,715 -- --
----------- ----------- ----------- ----------- -----------
Total liabilities ..................... 354,620 65,753 17,189 (7,371) 430,191
----------- ----------- ----------- ----------- -----------
Stockholder's equity
Common stock ............................ -- -- -- -- --
Contributed capital ..................... 81,191 406,573 18 (406,591) 81,191
Predecessor carryover ................... -- (75,547) -- -- (75,547)
Retained earnings ....................... (3,262) 9,784 (1,118) (8,666) (3,262)
----------- ----------- ----------- ----------- -----------
Total stockholder's equity ............ 77,929 340,810 (1,100) (415,257) 2,382
----------- ----------- ----------- ----------- -----------
Total liabilities and stockholder's
equity .............................. $ 432,549 $ 406,563 $ 16,089 $ (422,628) $ 432,573
=========== =========== =========== =========== ===========
</TABLE>
10
<PAGE> 13
INTERNATIONAL WIRE GROUP, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(IN THOUSANDS, EXCEPT PER SHARE DATA)
(UNAUDITED)
<TABLE>
<CAPTION>
TOTAL
TOTAL NON
COMPANY GUARANTOR GUARANTOR ELIMINATIONS TOTAL
----------- ----------- ----------- ------------ -----------
<S> <C> <C> <C> <C> <C>
STATEMENT OF OPERATIONS
For the three months ended September 30, 1995
Net sales ........................................ $ -- $ 105,301 $ 4,772 $ (4,772) $ 105,301
Operating expenses
Cost of goods sold ............................. -- 86,326 2,008 (4,772) 83,562
Selling, general and administration ............ -- 6,469 1,964 -- 8,433
Depreciation and amortization .................. -- 3,706 717 -- 4,423
Expenses related to plant closing .............. -- -- -- -- --
----------- ----------- ----------- ----------- -----------
Operating income (loss) .......................... -- 8,800 83 -- 8,883
Other income (expense)
Interest expense ............................... (8,285) -- -- -- (8,285)
Amortization of deferred financing fees ........ (619) -- -- -- (619)
Equity in net income (loss) of subsidiaries .... 7,552 -- -- (7,552) --
Other .......................................... -- 10 -- -- 10
----------- ----------- ----------- ----------- -----------
Income (loss) before income tax provision ........ (1,352) 8,810 83 (7,552) (11)
Income tax provision ............................. -- 692 649 -- 1,341
----------- ----------- ----------- ----------- -----------
Net income (loss) ................................ $ (1,352) $ 8,118 $ (566) $ (7,552) $ (1,352)
=========== =========== =========== =========== ===========
</TABLE>
11
<PAGE> 14
INTERNATIONAL WIRE GROUP, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(IN THOUSANDS, EXCEPT PER SHARE DATA)
(UNAUDITED)
<TABLE>
<CAPTION>
TOTAL
TOTAL NON
COMPANY GUARANTOR GUARANTOR ELIMINATIONS TOTAL
----------- ----------- ----------- ------------ -----------
<S> <C> <C> <C> <C> <C>
STATEMENT OF OPERATIONS
For the four months ended September 30, 1995
Net sales ........................................ $ -- $ 141,564 $ 5,474 $ (5,474) $ 141,564
Operating expenses
Cost of goods sold ............................. -- 115,792 2,519 (5,474) 112,837
Selling, general and administration ............ -- 8,428 2,542 -- 10,970
Depreciation and amortization .................. -- 4,945 952 -- 5,897
Expenses related to plant closing .............. -- 1,750 -- -- 1,750
----------- ----------- ----------- ----------- -----------
Operating income (loss) .......................... -- 10,649 (539) -- 10,110
Other income (expense)
Interest expense ............................... (11,064) -- -- -- (11,064)
Amortization of deferred financing fees ........ (864) -- -- -- (864)
Equity in net income (loss) of subsidiaries .... 8,666 -- -- (8,666) --
Other .......................................... -- (173) -- -- (173)
----------- ----------- ----------- ----------- -----------
Income (loss) before income tax provision ........ (3,262) 10,476 (539) (8,666) (1,991)
Income tax provision ............................. -- 692 579 -- 1,271
----------- ----------- ----------- ----------- -----------
Net income (loss) ................................ $ (3,262) $ 9,784 $ (1,118) $ (8,666) $ (3,262)
=========== =========== =========== =========== ===========
</TABLE>
12
<PAGE> 15
INTERNATIONAL WIRE GROUP, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(IN THOUSANDS, EXCEPT PER SHARE DATA)
(UNAUDITED)
<TABLE>
<CAPTION>
TOTAL
TOTAL NON
COMPANY GUARANTOR GUARANTOR ELIMINATIONS TOTAL
----------- ----------- ----------- ------------ -----------
<S> <C> <C> <C> <C> <C>
STATEMENT OF CASH FLOWS
For the four months ended September 30, 1995
Net cash from operating activities ........................ $ 4,935 $ 1,423 $ 732 $ -- $ 7,090
----------- ----------- ----------- ----------- -----------
Cash flows provided by (used in) investing activities:
Acquisition, net of cash ................................ (341,046) -- -- -- (341,046)
Capital expenditures .................................... -- (3,204) -- -- (3,204)
----------- ----------- ----------- ----------- -----------
Net cash used in investing activities ..................... (341,046) (3,204) -- -- (344,250)
----------- ----------- ----------- ----------- -----------
Cash flows provided by (used in) financing
activities:
Equity proceeds ......................................... 15,188 -- -- -- 15,188
Proceeds from issuance of long-term obligations ......... 337,500 -- -- -- 337,500
Repayment of long-term obligations ...................... (2,577) -- -- -- (2,577)
Financing fees and other ................................ (14,000) -- -- -- (14,000)
----------- ----------- ----------- ----------- -----------
Net cash from financing activities ........................ 336,111 -- -- -- 336,111
----------- ----------- ----------- ----------- -----------
Net change in cash ........................................ $ -- $ (1,781) $ 732 $ -- $ (1,049)
=========== =========== =========== =========== ===========
</TABLE>
13
<PAGE> 16
SIGNATURES
Pursuant to the requirements of the Securities and Exchange Act of 1934, the
Registrant has duly caused this report to be signed on its behalf by the
undersigned hereunto duly authorized.
INTERNATIONAL WIRE GROUP, INC.
Dated: November 7, 1997 By: /s/ DAVID M. SINDELAR
------------------------------------
Name: David M. Sindelar
Title: Senior Vice President,
Chief Financial Officer
14
