Attached files
| file | filename |
|---|---|
| 8-K - 8-K - Pregis Holding II CORP | d277992d8k.htm |
| EX-99.1 - EX-99.1 - Pregis Holding II CORP | d277992dex991.htm |
Exhibit 99.2
Pregis Holding II Corporation
Unaudited Pro Forma Condensed Consolidated Financial Statements
The unaudited pro forma condensed consolidated financial statements present financial information to give effect to the sale of the Kobusch-Sengewald business to be accounted for in accordance with Accounting Standards Codification (“ASC”) Topic 360, Property, Plant and Equipment. The unaudited pro forma condensed consolidated statements of earnings present the consolidated results of continuing operations of the company, assuming the sale occurred as of January 1, 2008. The unaudited pro forma condensed consolidated balance sheet as of September 30, 2011 presents the consolidated financial position of the company, assuming the sale occurred on that date. The Kobusch-Sengewald business has not been previously reported as discontinued operations. Beginning with the year ended December 31, 2011 condensed and consolidated financial statements, the company will report these results as such. As of September 30, 2011, the assets and liabilities of the business were normal assets and liabilities in continuing operations. The unaudited financial information is subject to the assumptions and adjustments in the notes accompanying the unaudited pro forma condensed consolidated financial statements.
The unaudited pro forma condensed consolidated financial statements also present financial information to give effect of the sale of the Hexacomb business which was closed and completed on December 1, 2011. Unaudited pro forma condensed consolidated financial statements were disclosed previously in a separate filing and are now being included again given the timing of the Kobusch-Sengewald divestiture. The Hexacomb unaudited pro forma condensed consolidated financial statements have also been accounted for in accordance with ASC Topic 360, Property, Plant and Equipment. Beginning with the third quarter ended September 30, 2011, the company reported the results of the Hexacomb business as discontinued operations. As of September 30, 2011, the assets and liabilities of the Hexacomb business were classified as assets and liabilities of discontinued operations held for sale. The unaudited financial information is subject to the assumptions and adjustments in the notes accompanying the unaudited pro forma condensed consolidated financial statements.
The unaudited pro forma condensed consolidated financial statements include specific assumptions and adjustments related to the sale of the businesses. The adjustments are based upon presently available information and assumptions that management believes are reasonable under the circumstances as of the date of this filing. However, actual adjustments may differ materially from the information presented. The unaudited pro forma condensed consolidated financial statements, including notes thereto, should be read in conjunction with the historical financial statements of the company included in its Annual Report on Form 10-K for the year ended December 31, 2010 and the unaudited financial statements filed in its Quarterly Report on Form 10-Q for the three and nine months ended September 30, 2010.
The unaudited pro forma condensed consolidated financial information presented is for informational purposes only. It is not intended to represent or be indicative of the consolidated results of operations or financial position that would have occurred had the sale been completed as of the dates presented nor is it intended to be indicative of future results of operations or financial position.
Pregis Holding II Corporation
Pro Forma Consolidated Statements of Operations
(Unaudited)
(dollars in thousands)
| Nine Months Ended September 30, 2011 | ||||||||||||
| Continuing Operations As Reported(A) |
Less Discontinued Operations(B) |
Adjusted Continuing Operations |
||||||||||
| Net Sales |
$ | 625,217 | $ | (223,660 | ) | $ | 401,557 | |||||
| Operating costs and expenses: |
||||||||||||
| Cost of sales, excluding depreciation and amortization |
498,258 | (180,235 | ) | 318,023 | ||||||||
| Selling, general and administrative |
81,712 | (17,208 | ) | 64,504 | ||||||||
| Depreciation and amortization |
35,036 | (12,022 | ) | 23,014 | ||||||||
| Goodwill impairment |
18,072 | — | 18,072 | |||||||||
| Other operating expense, net |
4,240 | (341 | ) | 3,899 | ||||||||
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| Total operating costs and expenses |
637,318 | (209,806 | ) | 427,512 | ||||||||
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| Operating loss from continuing operations |
(12,101 | ) | (13,854 | ) | (25,955 | ) | ||||||
| Interest expense, net of interest income |
37,592 | 1 | 37,593 | |||||||||
| Foreign exchange loss, net |
1,170 | (22 | ) | 1,148 | ||||||||
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| Loss from continuing operations before income taxes |
(50,863 | ) | (13,833 | ) | (64,696 | ) | ||||||
| Income tax expense (benefit) |
(2,866 | ) | (4,049 | ) | (6,915 | ) | ||||||
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| Loss from continuing operations |
$ | (47,997 | ) | $ | (9,784 | ) | $ | (57,781 | ) | |||
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See Notes to Pro Forma Consolidated Financial Statements.
Pregis Holding II Corporation
Pro Forma Consolidated Statements of Operations
(Unaudited)
(dollars in thousands)
| Year ended December 31, 2010 | ||||||||||||||||||||
| As Reported | Less Discontinued Operations(C) |
Intermediate Pro Forma Adjusted |
Less Discontinued Operations(B) |
Adjusted Continuing Operations |
||||||||||||||||
| Net Sales |
$ | 873,206 | $ | (101,578 | ) | $ | 771,628 | $ | (267,451 | ) | $ | 504,177 | ||||||||
| Operating costs and expenses: |
||||||||||||||||||||
| Cost of sales, excluding depreciation and amortization |
684,498 | (74,374 | ) | 610,124 | (214,821 | ) | 395,303 | |||||||||||||
| Selling, general and administrative |
130,057 | (16,033 | ) | 114,024 | (24,981 | ) | 89,043 | |||||||||||||
| Depreciation and amortization |
46,454 | (2,718 | ) | 43,736 | (14,261 | ) | 29,475 | |||||||||||||
| Other operating expense, net |
9,442 | (363 | ) | 9,079 | 11 | 9,090 | ||||||||||||||
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| Total operating costs and expenses |
870,451 | (93,488 | ) | 776,963 | (254,052 | ) | 522,911 | |||||||||||||
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| Operating income (loss) from continuing operations |
2,755 | (8,090 | ) | (5,335 | ) | (13,399 | ) | (18,734 | ) | |||||||||||
| Interest expense |
48,364 | (106 | ) | 48,258 | 52 | 48,310 | ||||||||||||||
| Interest income |
(254 | ) | 60 | (194 | ) | — | (194 | ) | ||||||||||||
| Foreign exchange (income) loss, net |
642 | (27 | ) | 615 | 1,106 | 1,721 | ||||||||||||||
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| Loss from continuing operations before income taxes |
(45,997 | ) | (8,017 | ) | (54,014 | ) | (14,557 | ) | (68,571 | ) | ||||||||||
| Income tax expense (benefit) |
(8,925 | ) | (2,822 | ) | (11,747 | ) | (4,233 | ) | (15,980 | ) | ||||||||||
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| Loss from continuing operations |
$ | (37,072 | ) | $ | (5,195 | ) | $ | (42,267 | ) | $ | (10,324 | ) | $ | (52,591 | ) | |||||
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See Notes to Pro Forma Consolidated Financial Statements.
Pregis Holding II Corporation
Pro Forma Consolidated Statements of Operations
(Unaudited)
(dollars in thousands)
| Year ended December 31, 2009 | ||||||||||||||||||||
| As Reported | Less Discontinued Operations(C) |
Intermediate Pro Forma Adjusted |
Less Discontinued Operations(B) |
Adjusted Continuing Operations |
||||||||||||||||
| Net Sales |
$ | 801,224 | $ | (88,743 | ) | $ | 712,481 | $ | (255,964 | ) | $ | 456,517 | ||||||||
| Operating costs and expenses: |
||||||||||||||||||||
| Cost of sales, excluding depreciation and amortization |
609,515 | (66,868 | ) | 542,647 | (196,964 | ) | 345,683 | |||||||||||||
| Selling, general and administrative |
117,048 | (14,927 | ) | 102,121 | (22,847 | ) | 79,274 | |||||||||||||
| Depreciation and amortization |
44,783 | (2,984 | ) | 41,799 | (12,222 | ) | 29,577 | |||||||||||||
| Other operating expense, net |
14,980 | (1,701 | ) | 13,279 | (711 | ) | 12,568 | |||||||||||||
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| Total operating costs and expenses |
786,326 | (86,480 | ) | 699,846 | (232,744 | ) | 467,102 | |||||||||||||
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| Operating income (loss) from continuing operations |
14,898 | (2,263 | ) | 12,635 | (23,220 | ) | (10,585 | ) | ||||||||||||
| Interest expense |
42,604 | (124 | ) | 42,480 | 121 | 42,601 | ||||||||||||||
| Interest income |
(394 | ) | 79 | (315 | ) | 24 | (291 | ) | ||||||||||||
| Foreign exchange (income) loss, net |
(6,303 | ) | 119 | (6,184 | ) | 2,174 | (4,010 | ) | ||||||||||||
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| Loss from continuing operations before income taxes |
(21,009 | ) | (2,337 | ) | (23,346 | ) | (25,539 | ) | (48,885 | ) | ||||||||||
| Income tax expense (benefit) |
(2,999 | ) | (1,039 | ) | (4,038 | ) | (7,191 | ) | (11,229 | ) | ||||||||||
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| Loss from continuing operations |
$ | (18,010 | ) | $ | (1,298 | ) | $ | (19,308 | ) | $ | (18,348 | ) | $ | (37,656 | ) | |||||
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See Notes to Pro Forma Consolidated Financial Statements.
Pregis Holding II Corporation
Pro Forma Consolidated Statements of Operations
(Unaudited)
(dollars in thousands)
| Year ended December 31, 2008 | ||||||||||||||||||||
| As Reported | Less Discontinued Operations(C) |
Intermediate Pro Forma Adjusted |
Less Discontinued Operations(B) |
Adjusted Continuing Operations |
||||||||||||||||
| Net Sales |
$ | 1,019,364 | $ | (118,828 | ) | $ | 900,536 | $ | (287,149 | ) | $ | 613,387 | ||||||||
| Operating costs and expenses: |
||||||||||||||||||||
| Cost of sales, excluding depreciation and amortization |
798,690 | (88,356 | ) | 710,334 | (235,723 | ) | 474,611 | |||||||||||||
| Selling, general and administrative |
127,800 | (18,011 | ) | 109,789 | (23,903 | ) | 85,886 | |||||||||||||
| Depreciation and amortization |
52,344 | (3,347 | ) | 48,997 | (15,120 | ) | 33,877 | |||||||||||||
| Goodwill impairment |
19,057 | — | 19,057 | — | 19,057 | |||||||||||||||
| Other operating expense, net |
8,146 | (854 | ) | 7,292 | 155 | 7,447 | ||||||||||||||
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| Total operating costs and expenses |
1,006,037 | (110,568 | ) | 895,469 | (274,591 | ) | 620,878 | |||||||||||||
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| Operating income (loss) from continuing operations |
13,327 | (8,260 | ) | 5,067 | (12,558 | ) | (7,491 | ) | ||||||||||||
| Interest expense |
49,069 | (226 | ) | 48,843 | 8 | 48,851 | ||||||||||||||
| Interest income |
(875 | ) | 86 | (789 | ) | 125 | (664 | ) | ||||||||||||
| Foreign exchange (income) loss, net |
14,728 | (139 | ) | 14,589 | (7,710 | ) | 6,879 | |||||||||||||
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| Loss from continuing operations before income taxes |
(49,595 | ) | (7,981 | ) | (57,576 | ) | (4,981 | ) | (62,557 | ) | ||||||||||
| Income tax expense (benefit) |
(1,865 | ) | (3,043 | ) | (4,908 | ) | (4,208 | ) | (9,116 | ) | ||||||||||
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| Loss from continuing operations |
$ | (47,730 | ) | $ | (4,938 | ) | $ | (52,668 | ) | $ | (773 | ) | $ | (53,441 | ) | |||||
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See Notes to Pro Forma Consolidated Financial Statements.
Pregis Holding II Corporation
Pro Forma Consolidated Balance Sheets
September 30, 2011
(unaudited)
(dollars in thousands, except share and per share data)
| As Reported | Pro Forma Adjustments |
Pro Forma Adjustments(G) |
Pro Forma Adjustments |
Pro Forma Adjusted |
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| Assets |
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| Current assets |
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| Cash and cash equivalents |
$ | 21,247 | $ | 112,500 | (D) | $ | (4,920 | ) | $ | 194,000 | (E) | $ | 322,827 | |||||||
| Accounts receivable |
||||||||||||||||||||
| Trade, net of allowances of $8,536 and $7,151 respectively |
123,328 | — | (49,265 | ) | — | 74,063 | ||||||||||||||
| Other |
16,407 | — | (13,338 | ) | — | 3,069 | ||||||||||||||
| Inventories, net |
89,869 | — | (44,565 | ) | — | 45,304 | ||||||||||||||
| Deferred income taxes |
3,186 | — | 363 | — | 3,549 | |||||||||||||||
| Due from Pactiv |
1,167 | — | (1,071 | ) | — | 96 | ||||||||||||||
| Assets held for sale |
99,465 | (99,465 | )(F) | — | — | — | ||||||||||||||
| Prepayments and other current assets |
9,308 | — | (2,055 | ) | — | 7,253 | ||||||||||||||
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| Total current assets |
363,977 | 13,035 | (114,851 | ) | 194,000 | 456,161 | ||||||||||||||
| Property, plant and equipment, net of accumulated depreciation of $215,546 and $190,927, respectively |
180,149 | — | (67,426 | ) | — | 112,723 | ||||||||||||||
| Other assets |
||||||||||||||||||||
| Goodwill |
60,510 | — | (18,432 | ) | — | 42,078 | ||||||||||||||
| Intangible assets, net |
45,707 | — | (4,229 | ) | — | 41,478 | ||||||||||||||
| Deferred financing costs, net |
6,218 | — | (624 | ) | — | 5,594 | ||||||||||||||
| Due from Pactiv, long-term |
6,322 | — | — | — | 6,322 | |||||||||||||||
| Pension and related assets |
11,859 | — | (508 | ) | — | 11,351 | ||||||||||||||
| Restricted Cash |
3,503 | — | — | — | 3,503 | |||||||||||||||
| Other |
383 | — | (11,755 | ) | — | (11,372 | ) | |||||||||||||
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| Total other assets |
134,502 | — | (35,548 | ) | — | 98,954 | ||||||||||||||
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| Total assets |
$ | 678,628 | $ | 13,035 | $ | (217,825 | ) | $ | 194,000 | $ | 667,838 | |||||||||
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| Liabilities and stockholder's equity |
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| Current liabilities |
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| Current portion of long-term debt |
$ | 2,601 | (2,500 | )(D) | — | — | $ | 101 | ||||||||||||
| Accounts payable |
98,652 | — | (42,806 | ) | — | 55,846 | ||||||||||||||
| Accrued income taxes |
— | 5,378 | (H) | (2,449 | ) | 2,000 | (I) | 4,929 | ||||||||||||
| Accrued payroll and benefits |
14,775 | — | (4,906 | ) | — | 9,869 | ||||||||||||||
| Accrued interest |
12,653 | — | — | — | 12,653 | |||||||||||||||
| Liabilities held for sale |
18,469 | (18,469 | )(F) | — | — | — | ||||||||||||||
| Other |
18,141 | — | (3,901 | ) | — | 14,240 | ||||||||||||||
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| Total current liabilities |
165,291 | (15,591 | ) | (54,062 | ) | 2,000 | 97,638 | |||||||||||||
| Long-term debt |
492,081 | (5,000 | )(D) | (11,500 | ) | (11,500 | )(E) | 464,081 | ||||||||||||
| Deferred income taxes |
13,721 | — | (3,813 | ) | — | 9,908 | ||||||||||||||
| Long-term income tax liabilities |
3,990 | — | — | — | 3,990 | |||||||||||||||
| Pension and related liabilities |
3,732 | — | (958 | ) | — | 2,774 | ||||||||||||||
| Other |
13,808 | — | 2 | — | 13,810 | |||||||||||||||
| Stockholder's equity: |
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| Common stock – $0.01 par value; 1,000 shares authorized 149.0035 shares issued and outstanding at September 30, 2011 and December 31, 2010 |
— | — | — | — | — | |||||||||||||||
| Additional paid-in capital |
155,992 | — | (9 | ) | — | 155,983 | ||||||||||||||
| Accumulated deficit |
(161,374 | ) | 33,626 | (J) | (151,834 | ) | 203,500 | (K) | (76,082 | ) | ||||||||||
| Accumulated other comprehensive loss |
(8,613 | ) | — | 4,349 | — | (4,264 | ) | |||||||||||||
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| Total stockholder's equity |
(13,995 | ) | 33,626 | (147,494 | )(K) | 203,500 | 75,637 | |||||||||||||
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| Total liabilities and stockholder's equity |
$ | 678,628 | $ | 13,035 | $ | (217,825 | ) | $ | 194,000 | $ | 667,838 | |||||||||
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See Notes to Pro Forma Consolidated Financial Statements.
Pregis Holding II Corporation
Notes to the Unaudited Pro Forma Condensed Consolidated Financial Statements
The unaudited pro forma condensed consolidated financial statements give effect to the sale of both the Kobusch Sengewald and Hexacomb businesses to be accounted for as discontinued operations. The unaudited pro forma condensed consolidated statements of earnings are presented as if the sales occurred as of January 1, 2008. The anticipated nonrecurring after-tax gain on the sales is not reflected in the pro forma condensed consolidated statements of earnings. The unaudited pro forma condensed balance sheet is presented as if the sales occurred on September 30, 2011 and is based on the historical balance sheets as of that date. The nonrecurring after-tax gains are reflected in the pro forma balance sheet.
| A. | In the third quarter report filed on Form 10-Q, the results of the Hexacomb business were reported as discontinued operations and therefore were excluded from continuing operations. |
| B. | The Discontinued Operations columns in the unaudited pro forma information represent the historical financial results of the company’s Kobusch-Sengewald business. |
| C. | The Discontinued Operations columns in the unaudited pro forma information represent the historical financial results of the company’s Hexacomb business. |
| D. | The Pro Forma adjustments represent anticipated proceeds from the sale of Hexacomb of $125 million, less $5.0 million of transaction costs and expenses associated with selling the business, less the $7.5 million of net proceeds expected to be used to pay down a portion of ABL debt. The remaining net proceeds will be used to pay income taxes associated with the sale and for general corporate purposes. |
| E. | The Pro Forma adjustments represent anticipated proceeds from the sale of Kobusch-Sengewald of €160 million ($214 million USD), less $8.5 million of transaction costs and expenses associated with selling the business, less the $11.5 million of net proceeds expected to be used to pay down a portion of ABL debt. The remaining net proceeds will be used to pay income taxes associated with the sale and for general corporate purposes. |
| F. | The Pro Forma adjustments represent the elimination of the assets and liabilities of the Hexacomb discontinued operations classified as assets and liabilities held for sale. |
| G. | The Pro Forma adjustments represent the elimination of the assets and liabilities of the Kobusch-Sengewald assets and liabilities which were classified as continuing operations. |
| H. | The Pro Forma adjustment represents the taxes payable of $5.4 million associated with the sale of Hexacomb. |
| I. | The Pro Forma adjustment represents the taxes payable of $2.0 million associated with the sale of Kobusch-Sengewald. |
| J. | The estimated after-tax gain of approximately $33.6 million as related to the Hexacomb sale is reflected as an adjustment to retained earnings. The after-tax gain includes the tax impact described in note (H). This estimate is based on the historical information as of September 30, 2011. Actual adjustments may differ from the information presented. |
| K. | The estimated after-tax gain of approximately $56.0 million as related to the Kobusch-Sengewald sale is reflected as an adjustment to retained earnings. The after-tax gain includes the tax impact described in note (I). This estimate is based on the historical information as of September 30, 2011. Actual adjustments may differ from the information presented. |