Attached files
| file | filename |
|---|---|
| 8-K - SALE OF PACKAGING BUSINESSES - APPVION, INC. | form8-k.htm |
| EX-2.1 - STOCK PURCHASE AGREEMENT - APPVION, INC. | exhibit2_1.htm |
Exhibit 99.1
Paperweight Development Corp. and Subsidiaries
Unaudited Pro Forma Condensed Consolidated Financial Information
The following unaudited pro forma condensed consolidated balance sheet as of April 4, 2010 and the unaudited pro forma condensed consolidated statements of operations for the three months ended April 4, 2010 and the three years ended January 2, 2010 give effect to the sale (the "Divestiture") by Appleton Papers Inc. of all outstanding stock of American Plastics Company, Inc. and New England Extrusion Inc. (collectively referred to as "Performance Packaging") to NEX Performance Films Inc., pursuant to the terms of the Stock Purchase Agreement, dated July 2, 2010. The unaudited pro forma condensed consolidated balance sheet assumes that the Divestiture occurred as of the balance sheet date (April 4, 2010). The unaudited pro forma condensed consolidated statements of operations assume that the Divestiture occurred as of the beginning of the earliest period presented (December 31, 2006). The pro forma condensed consolidated financial information should be read in conjunction with the historical financial statements and related notes thereto of Paperweight Development Corp. and Subsidiaries (the "Company") contained in its Annual Report on Form 10-K for the year ended January 2, 2010 and the unaudited financial statements contained in its Quarterly Report on Form 10-Q for the quarter ended April 4, 2010.
The pro forma condensed consolidated financial information is presented for informational purposes only. It includes various estimates and is not necessarily indicative of the Company's financial results had the Divestiture actually occurred on the dates assumed nor is it necessarily indicative of the Company's future results of operations.
PAPERWEIGHT DEVELOPMENT CORP. AND SUBSIDIARIES
UNAUDITED PRO FORMA CONDENSED CONSOLIDATED BALANCE SHEET
As of April 4, 2010
(dollars in thousands, except share data)
|
Historical
|
Pro Forma Adjustments
|
Pro Forma
|
|||||||||||
|
ASSETS
|
|||||||||||||
|
Current assets
|
|||||||||||||
|
Cash and cash equivalents
|
$ | 3,238 | $ | 15,992 | (a) |
|
$ | 19,230 | |||||
|
Accounts receivable, net
|
111,977 | (11,501 | ) | (b) | 100,476 | ||||||||
|
Inventories
|
129,635 | (10,881 | ) | (b) | 118,754 | ||||||||
|
Other current assets
|
54,529 | 2,000 | (a) |
|
56,529 | ||||||||
|
Total current assets
|
299,379 | (4,390 | ) | 294,989 | |||||||||
|
Property, plant and equipment, net
|
395,602 | (20,126 | ) | (b) | 375,476 | ||||||||
|
Intangible assets, net
|
69,767 | (19,570 | ) | (b) | 50,197 | ||||||||
|
Other assets
|
41,655 | (3 | ) | (b) | 41,652 | ||||||||
|
Total assets
|
$ | 806,403 | $ | (44,089 | ) | $ | 762,314 | ||||||
|
LIABILITIES, REDEEMABLE COMMON STOCK,
ACCUMULATED DEFICIT AND
ACCUMULATED OTHER COMPREHENSIVE LOSS
|
|||||||||||||
|
Current liabilities
|
|||||||||||||
|
Current portion of long-term debt
|
$ | 3,789 | $ | 3,789 | |||||||||
|
Accounts payable
|
51,933 | (6,014 | ) | (b) | 45,919 | ||||||||
|
Accrued interest
|
12,218 | 12,218 | |||||||||||
|
Other accrued liabilities
|
88,384 | (945 | ) | (b) | 87,439 | ||||||||
|
Total current liabilities
|
156,324 | (6,959 | ) | 149,365 | |||||||||
|
Long-term debt
|
583,325 | (38,493 | ) | (a) | 544,832 | ||||||||
|
Postretirement benefits other than pension
|
50,598 | 50,598 | |||||||||||
|
Accrued pension
|
102,343 | 102,343 | |||||||||||
|
Other long-term liabilities
|
20,138 | 20,138 | |||||||||||
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Commitments and contingencies
|
- | - | |||||||||||
|
Redeemable common stock, $0.01 par value,
shares authorized: 30,000,000,
shares issued and outstanding: 10,095,253
|
120,320 | 120,320 | |||||||||||
|
Accumulated deficit
|
(127,383 | ) | 1,363 | (c) |
|
(126,020 | ) | ||||||
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Accumulated other comprehensive loss
|
(99,262 | ) | (99,262 | ) | |||||||||
|
Total liabilities, redeemable common stock, accumulated
deficit and accumulated other comprehensive loss
|
$ | 806,403 | $ | (44,089 | ) | $ | 762,314 | ||||||
See accompanying notes to unaudited pro forma condensed consolidated financial statements
PAPERWEIGHT DEVELOPMENT CORP. AND SUBSIDIARIES
UNAUDITED PRO FORMA CONDENSED CONSOLIDATED STATEMENT OF OPERATIONS
For the Three Months Ended April 4, 2010
(dollars in thousands)
|
Historical
|
Pro Forma Adjustments
|
Pro Forma
|
||||||||||
|
Net sales
|
$ | 232,168 | $ | (22,159 | ) |
(d)
|
$ | 210,009 | ||||
|
Cost of sales
|
188,418 | (18,217 | ) |
(d)
|
170,201 | |||||||
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Gross profit
|
43,750 | (3,942 | ) | 39,808 | ||||||||
|
|
||||||||||||
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Selling, general and administrative expenses
|
37,191 | (2,378 | ) |
(d)
|
34,813 | |||||||
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Environmental expense insurance recovery
|
(8,181 | ) | - | (8,181 | ) | |||||||
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Operating income (loss)
|
14,740 | (1,564 | ) |
|
13,176 | |||||||
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Other expense (income)
|
||||||||||||
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Interest expense
|
16,922 | (721 | ) |
(e)
|
16,201 | |||||||
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Debt extinguishment expense, net
|
5,532 | - | 5,532 | |||||||||
|
Interest income
|
(10 | ) | - | (10 | ) | |||||||
|
Foreign exchange gain
|
(263 | ) | - | (263 | ) | |||||||
|
Loss before income taxes
|
(7,441 | ) | (843 | ) | (8,284 | ) | ||||||
|
Benefit for income taxes
|
(79 | ) | (12 | ) |
(d)
|
(91 | ) | |||||
|
Loss from continuing operations
|
$ | (7,362 | ) | $ | (831 | ) | $ | (8,193 | ) | |||
See accompanying notes to unaudited pro forma condensed consolidated financial statements
PAPERWEIGHT DEVELOPMENT CORP. AND SUBSIDIARIES
UNAUDITED PRO FORMA CONDENSED CONSOLIDATED STATEMENT OF OPERATIONS
For the Year Ended January 2, 2010
(dollars in thousands)
|
Historical
|
Pro Forma Adjustments
|
Pro Forma
|
||||||||||
|
Net sales
|
$ | 862,140 | $ | (72,506 | ) |
(d)
|
$ | 789,634 | ||||
|
Cost of sales
|
684,261 | (60,795 | ) |
(d)
|
623,466 | |||||||
|
Gross profit
|
177,879 | (11,711 | ) | 166,168 | ||||||||
|
|
||||||||||||
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Selling, general and administrative expenses
|
139,563 | (8,433 | ) |
(d)
|
131,130 | |||||||
|
Goodwill impairment
|
6,341 | (6,341 | ) |
(d)
|
- | |||||||
|
Operating income
|
31,975 | 3,063 |
|
35,038 | ||||||||
|
Other expense (income)
|
||||||||||||
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Interest expense
|
51,291 | - |
|
51,291 | ||||||||
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Debt extinguishment income, net
|
(42,602 | ) | - | (42,602 | ) | |||||||
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Interest income
|
(402 | ) | - | (402 | ) | |||||||
|
Foreign exchange gain
|
(958 | ) | - | (958 | ) | |||||||
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Other income
|
(820 | ) | - | (820 | ) | |||||||
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Income before income taxes
|
25,466 | 3,063 | 28,529 | |||||||||
|
Provision (benefit) for income taxes
|
334 | (1 | ) |
(d)
|
333 | |||||||
|
Income from continuing operations
|
$ | 25,132 | $ | 3,064 | $ | 28,196 | ||||||
See accompanying notes to unaudited pro forma condensed consolidated financial statements
PAPERWEIGHT DEVELOPMENT CORP. AND SUBSIDIARIES
UNAUDITED PRO FORMA CONDENSED CONSOLIDATED STATEMENT OF OPERATIONS
For the Year Ended January 3, 2009
(dollars in thousands)
|
Historical
|
Pro Forma Adjustments
|
Pro Forma
|
||||||||||
|
Net sales
|
$ | 967,169 | $ | (78,489 | ) |
(d)
|
$ | 888,680 | ||||
|
Cost of sales
|
780,440 | (66,376 | ) |
(d)
|
714,064 | |||||||
|
Gross profit
|
186,729 | (12,113 | ) | 174,616 | ||||||||
|
|
||||||||||||
|
Selling, general and administrative expenses
|
169,622 | (8,907 | ) |
(d)
|
160,715 | |||||||
|
Goodwill impairment
|
39,645 | (30,790 | ) |
(d)
|
8,855 | |||||||
|
Restructuring and other charges
|
2,578 | - | 2,578 | |||||||||
|
Operating (loss) income
|
(25,116 | ) | 27,584 |
|
2,468 | |||||||
|
Other expense (income)
|
||||||||||||
|
Interest expense
|
54,267 | - |
|
54,267 | ||||||||
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Debt extinguishment income, net
|
(11,598 | ) | - | (11,598 | ) | |||||||
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Interest income
|
(1,071 | ) | - | (1,071 | ) | |||||||
|
Litigation settlement, net
|
(22,274 | ) | - | (22,274 | ) | |||||||
|
Foreign exchange loss
|
4,523 | - | 4,523 | |||||||||
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Other expense
|
1,538 | - | 1,538 | |||||||||
|
Loss before income taxes
|
(50,501 | ) | 27,584 | (22,917 | ) | |||||||
|
Benefit for income taxes
|
(268 | ) | (49 | ) |
(d)
|
(317 | ) | |||||
|
Loss from continuing operations
|
$ | (50,233 | ) | $ | 27,633 | $ | (22,600 | ) | ||||
See accompanying notes to unaudited pro forma condensed consolidated financial statements
PAPERWEIGHT DEVELOPMENT CORP. AND SUBSIDIARIES
UNAUDITED PRO FORMA CONDENSED CONSOLIDATED STATEMENT OF OPERATIONS
For the Year Ended December 29, 2007
(dollars in thousands)
|
Historical
|
Pro Forma Adjustments
|
Pro Forma
|
||||||||||
|
Net sales
|
$ | 965,094 | $ | (72,618 | ) |
(d)
|
$ | 892,476 | ||||
|
Cost of sales
|
733,738 | (58,961 | ) |
(d)
|
674,777 | |||||||
|
Gross profit
|
231,356 | (13,657 | ) | 217,699 | ||||||||
|
|
||||||||||||
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Selling, general and administrative expenses
|
179,129 | (9,564 | ) |
(d)
|
169,565 | |||||||
|
Restructuring and other charges
|
1,445 | (180 | ) |
(d)
|
1,265 | |||||||
|
Operating income
|
50,782 | (3,913 | ) |
|
46,869 | |||||||
|
Other expense (income)
|
||||||||||||
|
Interest expense
|
48,351 | - |
|
48,351 | ||||||||
|
Debt extinguishment expense, net
|
1,572 | - | 1,572 | |||||||||
|
Interest income
|
(2,476 | ) | - | (2,476 | ) | |||||||
|
Foreign exchange gain
|
(1,112 | ) | - | (1,112 | ) | |||||||
|
Income before income taxes
|
4,447 | (3,913 | ) | 534 | ||||||||
|
Provision (benefit) for income taxes
|
253 | (22 | ) |
(d)
|
231 | |||||||
|
Income from continuing operations
|
$ | 4,194 | $ | (3,891 | ) | $ | 303 | |||||
See accompanying notes to unaudited pro forma condensed consolidated financial statements
PAPERWEIGHT DEVELOPMENT CORP. AND SUBSIDIARIES
NOTES TO UNAUDITED PRO FORMA CONDENSED CONSOLIDATED FINANCIAL INFORMATION
The unaudited pro forma condensed consolidated balance sheet assumes that the Divestiture occurred as of the balance sheet date (April 4, 2010) and reflects the following adjustments (in thousands):
(a) - Adjustment to record net cash proceeds that Appleton Papers Inc. would have received based on an assumed closing date of April 4, 2010. The gross sales price of $58 million, reflected in the Stock Purchase Agreement, was subject to a $2 million escrow payable in one year. The net cash proceeds were also adjusted by the transaction costs directly related to the Divestiture. The pro forma balance sheet assumes Appleton Papers Inc. used a portion of the net cash proceeds to retire its revolving credit facility.
|
Net cash proceeds:
|
|
|||
|
Gross sales price per Stock Purchase Agreement
|
$
|
58,000
|
||
|
Less: Transaction costs
|
|
(1,515)
|
|
|
|
Assumed net cash proceeds
|
56,485
|
|||
|
Retire revolving credit facility
|
(38,493
|
)
|
||
|
17,992
|
|
|||
|
Cash per Escrow Agreement
|
(2,000
|
)
|
||
|
Remaining amount held in cash and cash equivalents
|
$
|
15,992
|
(b) - Elimination of carrying values of assets and liabilities included in the Divestiture.
(c) – Represents the impact on Accumulated Deficit of the gain on Divestiture calculated as follows:
|
|
||||
|
Net cash proceeds (note (a) above)
|
$
|
56,485
|
||
|
Less: carrying value of assets and liabilities removed with Divestiture
|
|
(55,122)
|
|
|
|
Pro forma gain from Divestiture
|
$
|
1,363
|
The unaudited pro forma condensed consolidated statements of operations assume that the Divestiture occurred as of the beginning of the earliest period presented (December 31, 2006) and reflects the following adjustments:
(d) - Adjustment to remove operating results of the Performance Packaging business related to the Divestiture.
(e) - Adjustment to remove historical interest expense from the Company's revolving credit facility. The pro forma financial statements assume the Company used a portion of the proceeds from the Divestiture to retire outstanding borrowings under the revolving credit facility.
The unaudited pro forma condensed consolidated statements of operations do not give effect to the pro forma gain from Divestiture, as this is a nonrecurring item that will have no continuing impact on income.