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Exhibit 99.1

 

Unaudited Pro Forma Condensed Consolidated Financial Information

 

Management has prepared the unaudited pro forma condensed consolidated financial information of Accuride Corporation (the “Company”) for the fiscal year ended December 31, 2009 and for the six-month period ended June 30, 2010 in accordance with Article 11 of Regulation S-X. The unaudited pro forma condensed consolidated statement of operations is derived from the historical consolidated financial statements of the Company and gives pro forma effect to (i) the Company’s Third Amended Plan of Reorganization, as amended and confirmed by the United States Bankruptcy Court for the District of Delaware on February 18, 2010 and (ii) the adoption of Fresh Start Accounting in accordance with Accounting Standards Codification No. 852, “Reorganizations,” in each case, upon the Company’s emergence from Chapter 11 bankruptcy proceedings on February 26, 2010.

 

Basis of Presentation

 

The accounting policies used in the preparation of the unaudited pro forma consolidated financial statements are those disclosed in the Company’s audited consolidated financial statements for the fiscal year ended December 31, 2009, as presented in the Company’s Annual Report on Form 10-K filed on March 30, 2010, and the Company’s unaudited consolidated financial statements for the six-month period ended June 30, 2010, as presented in the Company’s Quarterly Report on Form 10-Q filed on August 6, 2010.  The unaudited pro forma condensed consolidated financial statements should be read in conjunction with these filings, including the consolidated financial statements and related notes contained therein.

 

For Fresh Start Accounting, the allocations of fair value are based upon preliminary valuation information and other studies that have not yet been completed due to the timing of the Company’s emergence from Chapter 11 bankruptcy proceedings and the volume and complexity of the analysis required. It is anticipated that these studies will conclude during the third or fourth quarters of 2010.  For further information regarding Fresh Start Accounting adjustments, please refer to the Company’s Quarterly Report on Form 10-Q filed on August 6, 2010.

 

The unaudited pro forma financial data set forth below are presented for informational purposes only, should not be considered indicative of actual results of operations that would have been achieved had the Plan of Reorganization, Fresh Start Accounting and related events been consummated on the dates indicated, and do not purport to be indicative of the Company’s results of operations for any future period.

 

[Table begins on the next page]

 



 

The adjustments made for the Company’s emergence from Chapter 11 bankruptcy proceedings in the unaudited pro forma condensed consolidated financial information for the fiscal year ended December 31, 2009 and for the six-month period ended June 30, 2010 assume the financial effects resulting from the implementation of the Plan of Reorganization and the adoption of Fresh Start Accounting as of January 1, 2009.

 

 

 

Predecessor
Year Ended
December
31,

 

 

 

Pro Forma
(a) Year
Ended
December
31,

 

Predecessor
Period from
January 1
through
February
26,

 

Successor
Period
from
February
26 through
June 30,

 

 

 

Pro Forma
(a) Six
Months
Ended June
30,

 

(in thousands)

 

2009

 

Adjustments

 

2009

 

2010

 

2010

 

Adjustments

 

2010

 

Operating Data:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Net sales

 

$

570,193

 

 

$

570,193

 

$

104,059

 

$

260,553

 

 

$

364,612

 

Gross profit (loss) (b)

 

(2,302

)

$

12,863

 

10,561

 

4,482

 

21,419

 

$

4,138

 

30,039

 

Operating expenses (c)(d)

 

62,793

 

(10,906

)

51,887

 

7,595

 

24,601

 

(5,651

)

26,545

 

Income (loss) from operations

 

(65,095

)

23,769

 

(41,326

)

(3,113

)

(3,182

)

9,789

 

3,494

 

Interest expense, net (e)

 

59,753

 

(17,547

)

42,206

 

7,496

 

13,730

 

(74

)

21,152

 

Loss on extinguishment of debt

 

(5,389

)

 

(5,389

)

 

 

 

 

Unrealized loss on mark to market valuation of the convertible notes conversion option (f)

 

 

 

 

 

(31,204

)

 

(31,204

)

Other income (expense), net

 

6,888

 

 

6,888

 

566

 

1,941

 

 

2,507

 

Reorganization items (g)

 

14,379

 

(14,379

)

 

(59,311

)

 

59,311

 

 

Income tax (expense) benefit (h)

 

(2,384

)

(21,721

)

(24,105

)

1,534

 

(343

)

19,284

 

20,475

 

Net income (loss)

 

$

(140,112

)

$

33,974

 

$

(106,138

)

50,802

 

(46,518

)

(30,164

)

(25,880

)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Other Data:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Net cash provided by (used in):

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Operating activities

 

$

(39,312

)

 

 

 

 

$

(20,773

)

$

(22,290

)

 

 

 

 

Investing activities

 

(34,873

)

 

 

 

 

(2,012

)

(7,157

)

 

 

 

 

Financing activities

 

7,030

 

 

 

 

 

46,611

 

1,419

 

 

 

 

 

Adjusted EBITDA

 

23,671

 

 

$

23,671

 

4,683

 

25,889

 

 

$

30,572

 

Depreciation, amortization, and impairment

 

55,665

 

$

(6,754

)

48,911

 

7,532

 

18,421

 

$

(3,162

)

22,791

 

Capital expenditures

 

20,364

 

 

 

 

 

1,457

 

4,775

 

 

 

 

 

 


(a)         Pro forma financial information included in this table is presented, where applicable, in accordance with Article 11 of Regulation S-X.  Accordingly, we have not included a pro forma balance sheet because the relevant adjustments are already reflected in the Company’s balance sheet as of June 30, 2010, which is presented in our Quarterly Report on Form 10-Q filed on August 6, 2010.

 

(b)         Depreciation expense for the fiscal year ended December 31, 2009 and for the six month period ended June 30, 2010, have been revised to reflect the preliminary allocations of fair values and increases the useful lives of our assets, as follows:

 

 

 

 

 

 

 

Depreciation
Expense

 

(in thousands, except for years)

 

Fair
Value

 

Useful Life

 

Year Ended
December 31,
2009

 

Six Months
Ended June 30,
2010

 

Land

 

$

17,461

 

N/A

 

N/A

 

N/A

 

Building

 

39,280

 

8-14 years

 

$

3,571

 

$

1,785

 

Machinery and Equipment

 

216,851

 

4-10 years

 

30,979

 

15,489

 

 

 

 

 

 

 

 

 

 

 

Total pro forma depreciation expense

 

 

 

 

 

34,550

 

17,275

 

Less historical depreciation expense

 

 

 

 

 

(47,413

)

(21,413

)

Total

 

 

 

 

 

$

(12,863

)

$

(4,138

)

 

The fair values above are based upon preliminary valuation information and other studies that have not yet been completed due to the timing of our emergence from Chapter 11 bankruptcy proceedings and the volume and

 



 

complexity of the analysis required.  It is anticipated that these studies will conclude during the third or fourth quarters of 2010.

 

(c)          Amortization expense for the fiscal year ended December 31, 2009 and for the six month period ended June 30, 2010, have been revised to reflect the preliminary allocations of intangible assets at fair value, as follows:

 

 

 

 

 

 

 

Amortization
Expense

 

(in thousands, except for years)

 

Fair
Value

 

Useful Life

 

Year Ended
December 31,
2009

 

Six Months
Ended June 30,
2010

 

Trade Names

 

$

34,000

 

N/A

 

N/A

 

N/A

 

Technology

 

40,900

 

15 years

 

$

2,727

 

$

1,363

 

Customer relationships

 

166,100

 

20 years

 

8,305

 

4,153

 

 

 

 

 

 

 

 

 

 

 

Total pro forma amortization expense

 

 

 

 

 

11,032

 

5,516

 

Less historical amortization expense

 

 

 

 

 

(4,922

)

(4,540

)

Total

 

 

 

 

 

$

6,110

 

$

976

 

 

The fair values above are based upon preliminary valuation information and other studies that have not yet been completed due to the timing of our emergence from Chapter 11 bankruptcy proceedings and the volume and complexity of the analysis required.  It is anticipated that these studies will conclude during the third or fourth quarters of 2010.

 

(d)         For the fiscal year ended December 31, 2009, operating expenses were adjusted to remove $17,015 of prepetition professional fees and related bankruptcy expenses. For the six months ended June 30, 2010, operating expenses were adjusted to remove $6,627 of professional fees and expenses.

 

(e)          For the fiscal year ended December 31, 2009 and for the six month period ended June 30, 2010, pro forma interest expense reflects our new capital structure upon our emergence from Chapter 11 bankruptcy proceedings based on an assumed LIBOR of 400 basis points as follows:

 

 

 

Interest Expense

 

(in thousands, except for years)

 

Year Ended
December 31,
2009

 

Six Months
Ended
June 30, 2010

 

Postpetition senior credit facility (1)

 

$

30,129

 

$

15,065

 

Convertible notes (2)

 

12,797

 

6,208

 

Total pro forma interest expense

 

42,926

 

21,273

 

Less historical interest expense

 

(60,473

)

(21,347

)

Total

 

$

(17,547

)

$

(74

)

 


(1)         Reflects pro forma interest expense on our postpetition senior credit facility assuming an initial outstanding balance of $309.0 million at an interest rate of 9.75%.

 

(2)         Reflects pro forma interest expense on our convertible notes offered at an interest rate of 7.5%, net of the amortized discount, and accretion of the debt discount.

 

(f)           Represents loss due to the application of Statement of Financial Accounting Standard No. 133 to our convertible notes conversion option.  We do not adjust for this loss because it is expected to be a recurring item going forward.

 

(g)          For the fiscal year ended December 31, 2009, reorganization items were adjusted to remove the professional fees and expenses incurred related to our Plan of Reorganization. For the six month period ended June 30, 2010, reorganization items were adjusted to remove the net benefit recognized due to our discharge of debt on February 26, 2010, the effective date of the Plan of Reorganization, net of other professional fees and expenses incurred.

 

(h)   Tax effect of pro forma adjustments at 39%.