UNITED
STATES
SECURITIES
AND EXCHANGE COMMISSION
WASHINGTON,
D.C. 20549
FORM
8-K
CURRENT
REPORT
PURSUANT
TO SECTION 13 OR 15(D) OF THE
SECURITIES
EXCHANGE ACT OF 1934
Date
of report (Date of earliest event reported):
April
15, 2009 (April 14, 2009)
SPECTRUM
BRANDS, INC.
(Exact
name of registrant as specified in its charter)
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Wisconsin
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001-13615
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22-2423556
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(State
or Other Jurisdiction of Incorporation)
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(Commission
File Number)
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(IRS
Employer Identification Number)
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Six
Concourse Parkway, Suite 3300
Atlanta,
Georgia
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30328
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||||
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(Address
of Principal Executive Offices)
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(Zip
Code)
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||||
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(770)
829-6200
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|||||
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(Registrant’s
telephone number, including area code)
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|||||
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N/A
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|||||
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(Former
name or former address, if changed since last
report)
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Check
the appropriate box below if the Form 8-K filing is intended to simultaneously
satisfy the filing obligation of the registrant under any of the following
provisions (see General Instruction A.2. below):
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o
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Written
communications pursuant to Rule 425 under the Securities Act (17 CFR
230.425)
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o
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Soliciting
material pursuant to Rule 14a-12 under the Exchange Act (17 CFR
240.14a-12)
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o
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Pre-commencement
communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR
240.14d-2(b))
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o
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Pre-commencement
communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR
240.13e-4(c))
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Item
7.01. Regulation FD
Disclosure.
On February 3, 2009, Spectrum Brands,
Inc. (the "Company") announced that it and its United States subsidiaries
(together with the Company, collectively, the "Debtors") had filed voluntary petitions in the United
States Bankruptcy Court for
the Western District of Texas (the "Bankruptcy Court") seeking reorganization relief under the
provisions of Chapter 11 of Title 11 of the United States Code. The Chapter 11 cases are being jointly
administered by the court as Case No. 09-50456 (the
"Bankruptcy Cases").
In connection with the Bankruptcy Cases,
the Debtors, as previously announced, filed an amended plan of reorganization and related disclosure
statement with the Bankruptcy Court, which disclosure statement included certain financial projections for the
Company. These projections were also furnished to
the Securities and Exchange Commission on a Current Report on Form 8-K filed on
April 10, 2009. In connection with a hearing held with the
Bankruptcy Court on April 14, 2009, these financial projections were further updated. The Company's projections
for consolidated adjusted EBITDA, a non-GAAP measurement which management feels
is a useful indicator of operational profitability, however, have not been
changed. The further
updated financial
projections are attached hereto as Exhibit 99.1.
Item 9.01. Financial Statements and
Exhibits.
(d) Exhibits
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Exhibit
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Number
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Description
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99.1
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Financial
Projections
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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.
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Date: April 15, 2009
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SPECTRUM BRANDS,
INC.
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||
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By:
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/s/ Anthony L. Genito | ||
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Name: Anthony L.
Genito
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|||
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Title:
Executive Vice
President,
Chief Financial Officer
and
Chief Accounting
Officer
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EXHIBIT INDEX
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Exhibit
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Description
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99.1
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Financial
Projections
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Exhibit 99.1
PRO FORMA FINANCIAL
PROJECTIONS
These
financial projections and forecasts (the “Financial Projections”) present, to
the best of the Debtors’ knowledge and belief, the Debtors’ expected financial
position, results of operations, and cash flows for the projection
period. The Financial Projections include a projected income
statement, balance sheet and statement of cash flow for the years ended
September 30, 2009 through 2013; projected monthly cash flows for fiscal year
2009, a forecast of borrowing base availability and projected capital structure
at exit. The Debtors have also included a reconciliation to GAAP for
Adjusted EBITDA (as defined below), a non-GAAP measure. The
assumptions disclosed herein are those that the Debtors believe are significant
to the Financial Projections. Because events and circumstances
frequently do not occur as expected, there will be differences between the
projected and actual results. These differences may be material to
the Financial Projections herein.
THE
DEBTORS DO NOT, AS A MATTER OF COURSE, PUBLISH THEIR BUSINESS PLANS, BUDGETS OR
STRATEGIES OR MAKE EXTERNAL PROJECTIONS OR FORECASTS OF THEIR ANTICIPATED
FINANCIAL POSITIONS, RESULTS OF OPERATION, LIQUIDITY, BORROWING BASE, CASH FLOW,
ANNUAL REVENUE AND GROWTH RATES OR ANNUAL ADJUSTED EBITDA
DETAIL. ACCORDINGLY, THE DEBTORS DO NOT ANTICIPATE THAT THEY WILL,
AND DISCLAIM ANY OBLIGATION TO, FURNISH UPDATED BUSINESS PLANS, BUDGETS,
FINANCIAL CONSEQUENCES OR PROJECTIONS PRIOR TO THE EFFECTIVE DATE OF ANY PLAN OR
TO INCLUDE SUCH INFORMATION IN DOCUMENTS REQUIRED TO BE FILED WITH THE SEC OR
OTHERWISE MAKE SUCH INFORMATION PUBLICLY AVAILABLE.
The
Debtors’ auditor has neither examined nor compiled the accompanying Financial
Projections and, accordingly, does not express an opinion or any other form of
assurance with respect thereto. These Financial Projections were not
prepared with a view toward compliance with published guidelines of the SEC or
the guidelines established by the American Institute of Certified Public
Accountants for preparation and presentation of prospective financial
information.
EBITDA
("EBITDA") is measured as earnings (defined as operating income (loss) plus
other income less other expenses) before interest, taxes, depreciation and
amortization and excluding restructuring and other one-time
charges. Adjusted EBITDA ("Adjusted EBITDA") is measured as earnings
(defined as operating income (loss) plus other income less other expenses)
before interest, taxes, depreciation and amortization and excluding
restructuring, other one-time charges and excludes the operations of Growing
Products, which was part of the Debtors’ Home & Garden segment. Adjusted
EBITDA is a metric used by the Debtors’ management, and Adjusted EBITDA and
EBITDA are frequently used by the financial community to provide insight into an
organization's operating trends and facilitate comparisons between peer
companies, since interest, taxes, depreciation and amortization can differ
greatly between organizations as a result of differing capital structures and
tax strategies. Adjusted EBITDA can also be a useful measure of a
company's ability to service debt and is one of the measures used for
determining the Debtors’ debt covenant compliance. The Adjusted
EBITDA detail should be read in conjunction with the reconciling GAAP detail
provided below.
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A.
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ACCOUNTING
POLICIES
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The
Financial Projections have been prepared in good faith based upon assumptions
believed to be reasonable. The Financial Projections include
assumptions to various financial accounts of the Debtors, which are based upon
the Debtors’ estimates and market conditions.
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B.
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PROJECTION
ASSUMPTIONS
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The
Debtors, with the assistance of various professionals, prepared the Financial
Projections for the five years ending September 30, 2009, 2010, 2011, 2012 and
2013 respectively. The Financial Projections are based on a number of
assumptions, and while the Debtors have prepared the Financial Projections in
good faith and believe the assumptions to be reasonable, it is important to note
that the Debtors can provide no assurance that such assumptions will ultimately
be realized. The Financial Projections should be read in conjunction
with the assumptions, qualifications and notes contained herein, the risk
factors described in
Section
VII of the Disclosure Statement, and the historical financial statements filed
by the Debtors. The following summarizes the underlying key
assumptions upon which the Financial Projections were based.
The
Financial Projections take into account the current macroeconomic environment,
including the recent declines in key commodity inputs, slowdown in consumer
spending, and changes in foreign exchange rates, among other
factors. The Debtors assume the current consumer spending slowdown
will last through the end of calendar year 2009, with gradual growth in consumer
spending resuming in 2010.
The
Financial Projections are based on the assumption that the Plan will be
confirmed as stated in the Disclosure Statement and Plan of Reorganization and
will become effective July 15, 2009.
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C.
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PROJECTED
CONSOLIDATED STATEMENT OF
OPERATIONS
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Sales Forecast: A
detailed 5-year forecast was prepared in U.S. dollars. Sales were
projected by business segment and by product category within each
segment. FY 2009 projections were based on a detailed bottoms-up
analysis and the projected periods were based off the 2009
estimates. The Debtors’ Growing Products business segment was
shut-down effective January 31, 2009.
Cost of Sales
Assumptions: Cost of sales were projected at a rate relative
to Sales. The Debtors estimate slight decreases in the rate relative
to Sales due to declines in key commodity input prices (the full effect of which
will only be felt in projected periods due to already in-place hedges) and the
exiting of lower-/negative-margin product lines, partly offset by a consumer
trend to lower-margin products in certain regions due to the current economic
conditions.
Operating Expense
Assumptions: Selling, marketing, distribution, advertising,
research and development and general and administrative expenses were projected
at rates relative to net sales and individually inflated based on the Debtors’
estimates.
Interest
Expense: Interest for the revolving credit facility (the “Exit
Facility”) is projected based on the LIBOR forward curve (including a 3.0% LIBOR
floor) plus 4.5%. The Exit Facility is projected to include a
Subordinated Participation Facility which is projected based on the LIBOR
forward curve (including a 3.5% LIBOR floor) plus 14.0%. The Exit
Facility interest and the Subordinated Participation Facility interest is
expensed and disbursed monthly. The First Lien Term loan (U.S. dollar
denominated) interest is projected at LIBOR plus 4.0% per annum. The
First Lien Term loan (U.S. dollar denominated) interest is expensed monthly and
disbursed on a quarterly basis. The First Lien Term loan (Euro dollar
denominated) interest is projected at LIBOR plus 4.5% per annum. The
First Lien Term loan (Euro dollar denominated) interest is expensed monthly and
disbursed on a quarterly basis. The New Notes issued are projected at
an interest rate of 12%, payable in cash or in kind at the Company's
option.
Income Tax
Expense: The Debtors’ tax advisors have estimated
post-emergence U.S. federal, state and local tax expense (in accordance with
FASB Statement No. 109) to be incurred at an effective rate of
38%. The Debtors tax advisors have also estimated post-emergence
foreign tax expense to be incurred at effective rates of from 28% to 35%
depending on the income mix of various foreign jurisdictions.
Projected
Consolidated Balance Sheets
Cash: Cash is
projected to be $60 million at the end of 2009 and $50 million at the end of
each year thereafter, and is substantially held by the Debtors’ foreign
entities. Excess cash generated by the business is utilized to
pay-down the Exit Facility and the term loan.
Accounts
Receivable: The FY 2009 projected Accounts Receivable balances
were based on a detailed bottoms-up analysis, which is based on the Debtors’
historical experience. The resultant days’ sales outstanding average
is approximately 57 days. For the projected periods, there is no
assumption to an improvement in the days’ sales outstanding.
Inventory: The FY
2009 projected Inventory balances were based on a detailed bottoms-up analysis,
which is based on the Debtors’ historical experience. The resultant
days’ carried average is approximately 87 days. For the projected
periods, there is no assumption to an improvement in the days carried
outstanding.
Accounts
Payable: The FY 2009 projected Accounts Payable balances were
based on a detailed bottoms-up analysis, which is based on the Debtors’
historical experience. The resultant days payable average is
approximately 47 days. For the projected periods, there is no
assumption to an improvement in the days payable outstanding.
Projected
Income Statement
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FYE
September 30,
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||||||||||||||||||||
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(US$
millions)
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2009E
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2010E
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2011E
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2012E
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2013E
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|||||||||||||||
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Revenue
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$ | 2,285 | $ | 2,264 | $ | 2,354 | $ | 2,448 | $ | 2,545 | ||||||||||
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%
Growth
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(1.0% | ) | 4.0% | 4.0% | 4.0% | |||||||||||||||
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Less:
Cost of Sales
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$ | (1,440 | ) | $ | (1,375 | ) | $ | (1,425 | ) | $ | (1,476 | ) | $ | (1,530 | ) | |||||
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Gross
Profit
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$ | 845 | $ | 889 | $ | 929 | $ | 972 | $ | 1,015 | ||||||||||
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%
Margin
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37% | 39% | 39% | 40% | 40% | |||||||||||||||
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Less:
Operating Expenses (Excl. D&A)
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$ | (560 | ) | $ | (557 | ) | $ | (588 | ) | $ | (614 | ) | $ | (641 | ) | |||||
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EBITDA(1)
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$ | 285 | $ | 332 | $ | 342 | $ | 358 | $ | 374 | ||||||||||
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%
Margin
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12% | 15% | 15% | 15% | 15% | |||||||||||||||
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Less:
Depreciation
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$ | (36 | ) | $ | (40 | ) | $ | (40 | ) | $ | (40 | ) | $ | (40 | ) | |||||
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Less:
Amortization
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(24 | ) | (19 | ) | (19 | ) | (19 | ) | (19 | ) | ||||||||||
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Less:
Inventory Impairment and Hedges
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(34 | ) | 0 | 0 | 0 | 0 | ||||||||||||||
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EBIT
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$ | 192 | $ | 273 | $ | 283 | $ | 299 | $ | 315 | ||||||||||
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Less:
Interest Expense
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$ | (146 | ) | $ | (138 | ) | $ | (117 | ) | $ | (121 | ) | $ | (107 | ) | |||||
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EBT
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$ | 46 | $ | 135 | $ | 165 | $ | 178 | $ | 208 | ||||||||||
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Less:
Taxes
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(16 | ) | (47 | ) | (58 | ) | (62 | ) | (73 | ) | ||||||||||
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Net
Income(2)
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$ | 30 | $ | 88 | $ | 107 | $ | 115 | $ | 135 | ||||||||||
GAAP
Reconciliation to Net Income
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FYE
September 30,
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||||||||||||||||||||
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(US$
millions)
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2009E
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2010E
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2011E
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2012E
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2013E
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|||||||||||||||
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EBITDA
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$ | 285 | $ | 332 | $ | 342 | $ | 358 | $ | 374 | ||||||||||
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Growing Products Operations
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20 | – | – | – | – | |||||||||||||||
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Adjusted
EBITDA
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$ | 305 | $ | 332 | $ | 342 | $ | 358 | $ | 374 | ||||||||||
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Depreciation
& Amortization
|
(60 | ) | (59 | ) | (59 | ) | (59 | ) | (59 | ) | ||||||||||
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Interest
expense
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(146 | ) | (138 | ) | (117 | ) | (121 | ) | (107 | ) | ||||||||||
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Growing
Products Shutdown(3)
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(34 | ) | – | – | – | – | ||||||||||||||
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Growing
Products Operations(4)
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(20 | ) | – | – | – | – | ||||||||||||||
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Tax
expense
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(16 | ) | (47 | ) | (58 | ) | (62 | ) | (73 | ) | ||||||||||
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Net
Income
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$ | 30 | $ | 88 | $ | 107 | $ | 115 | $ | 135 | ||||||||||
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IPI
Selic
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8 | – | – | – | – | |||||||||||||||
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Restructuring
& related charges
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(21 | ) | (7 | ) | (3 | ) | (3 | ) | (3 | ) | ||||||||||
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Reorganization
Items, net(5)
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429 | – | – | – | – | |||||||||||||||
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Growing
Products Shutdown(6)
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(31 | ) | – | – | – | – | ||||||||||||||
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Tax
expense
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135 | (2 | ) | (1 | ) | (1 | ) | (1 | ) | |||||||||||
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GAAP
Net Income (Loss)
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$ | 549 | $ | 79 | $ | 103 | $ | 111 | $ | 131 | ||||||||||
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Notes:
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(1)
Includes growing products segment in 2009. Please see GAAP
Reconciliation to Net Income for Adjusted EBITDA.
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| (2) Excludes certain restructuring, certain shut-down costs and other one-time charges. Please see GAAP Reconciliation to Net Income for GAAP Net Income. |
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(3)
Includes Inventory Impairment and Hedges of $34 in
2009E.
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(4)
Represents loss from operations related to the Growing Products business
from October 1, 2008 through March 29,
2009.
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|
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(5)
Represents gain on cancellation of debt of $515, professional fees of $67,
write off of deferred financing fees of $11 and provision for rejection of
leases of $9.
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(6)
Represent remaining shutdown costs, such as inventory, PP&E and
Intangible asset impairments, related to Growing
Products.
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Projected
Balance Sheet
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FYE
September 30,
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||||||||||||||||||||
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(US$
millions)
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2009E
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2010E
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2011E
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2012E
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2013E
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|||||||||||||||
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ASSETS
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||||||||||||||||||||
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Cash
& Equivalents
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$ | 60 | $ | 50 | $ | 50 | $ | 50 | $ | 50 | ||||||||||
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Accounts
Receivable
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357 | 359 | 373 | 388 | 402 | |||||||||||||||
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Inventory
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329 | 330 | 341 | 353 | 366 | |||||||||||||||
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Other
Current Assets
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63 | 63 | 63 | 63 | 63 | |||||||||||||||
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Total
Current Assets
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$ | 809 | $ | 802 | $ | 828 | $ | 854 | $ | 881 | ||||||||||
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Property,
Plant & Equipment
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$ | 181 | $ | 167 | $ | 153 | $ | 138 | $ | 124 | ||||||||||
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Other
Long-Term Assets
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1,083 | 1,062 | 1,034 | 1,003 | 975 | |||||||||||||||
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Total
Assets
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$ | 2,073 | $ | 2,031 | $ | 2,014 | $ | 1,996 | $ | 1,981 | ||||||||||
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LIABILITIES
& SHAREHOLDER'S EQUITY
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||||||||||||||||||||
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Accounts
Payable
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$ | 190 | $ | 175 | $ | 181 | $ | 187 | $ | 194 | ||||||||||
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Other
Current Liabilities
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239 | 229 | 223 | 221 | 221 | |||||||||||||||
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Total
Current Liabilities
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$ | 429 | $ | 403 | $ | 404 | $ | 408 | $ | 415 | ||||||||||
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Total
Debt (Including Current)
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$ | 1,699 | $ | 1,609 | $ | 1,486 | $ | 1,350 | $ | 1,195 | ||||||||||
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Other
Long-Term Liabilities
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322 | 317 | 312 | 307 | 302 | |||||||||||||||
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Total
Liabilities
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$ | 2,450 | $ | 2,329 | $ | 2,202 | $ | 2,064 | $ | 1,911 | ||||||||||
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Shareholder's
Equity
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$ | (377 | ) | $ | (298 | ) | $ | (187 | ) | $ | (69 | ) | $ | 70 | ||||||
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Total
Liabilities & Shareholder's Equity
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$ | 2,073 | $ | 2,031 | $ | 2,014 | $ | 1,996 | $ | 1,981 | ||||||||||
Projected
Cash Flow Statement
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FYE
September 30,
|
||||||||||||||||||||
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(US$
millions)
|
2009E
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2010E
|
2011E
|
2012E
|
2013E
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|||||||||||||||
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Net
Income(1)
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$ | 30 | $ | 88 | $ | 107 | $ | 115 | $ | 135 | ||||||||||
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Plus:
Depreciation
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36 | 40 | 40 | 40 | 40 | |||||||||||||||
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Plus:
Amortization
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24 | 19 | 19 | 19 | 19 | |||||||||||||||
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(Increase)/Decrease
in Accounts Receivable
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37 | (2 | ) | (14 | ) | (14 | ) | (15 | ) | |||||||||||
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(Increase)/Decrease
in Inventory
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55 | (1 | ) | (12 | ) | (12 | ) | (13 | ) | |||||||||||
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Increase/(Decrease)
in Accounts Payable
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(88 | ) | (15 | ) | 6 | 6 | 7 | |||||||||||||
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Other
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(161 | ) | 5 | 27 | 8 | 7 | ||||||||||||||
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Cash
Flow from Operations
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$ | (68 | ) | $ | 134 | $ | 173 | $ | 162 | $ | 180 | |||||||||
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Less:
Capital Expenditures
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$ | (17 | ) | $ | (25 | ) | $ | (25 | ) | $ | (25 | ) | $ | (25 | ) | |||||
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Cash
Flow from Investing Activities
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$ | (17 | ) | $ | (25 | ) | $ | (25 | ) | $ | (25 | ) | $ | (25 | ) | |||||
|
Borrowing
/ (Repayment) of Revolver
|
$ | (80 | ) | $ | 0 | $ | 0 | $ | 0 | $ | 0 | |||||||||
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Borrowing
/ (Repayment) of Exit Facility
|
164 | (104 | ) | (60 | ) | 0 | 902 | |||||||||||||
|
Repayment
of Secured Debt
|
(45 | ) | (14 | ) | (88 | ) | (136 | ) | (1,057 | ) | ||||||||||
|
Cash
Flow from Financing Activities
|
$ | 40 | $ | (118 | ) | $ | (148 | ) | $ | (136 | ) | $ | (155 | ) | ||||||
|
Net
Cash Flow
|
$ | (45 | ) | $ | (10 | ) | $ | 0 | $ | 0 | $ | 0 | ||||||||
|
Beginning
Cash
|
$ | 105 | $ | 60 | $ | 50 | $ | 50 | $ | 50 | ||||||||||
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Plus:
Net Cash Flow
|
(45 | ) | (10 | ) | 0 | 0 | 0 | |||||||||||||
|
Ending
Cash
|
$ | 60 | $ | 50 | $ | 50 | $ | 50 | $ | 50 | ||||||||||
|
Notes:
|
(1)
Excludes certain restructuring, certain shut-down costs and other one-time
charges. Please see GAAP Reconciliation to Net Income for GAAP
Net Income.
|
Projected
Monthly Cash Flows for FY 2009
|
Fiscal
Year 2009
|
||||||||||||||||||||||||||||||||||||
|
(US$
millions)
|
Jan
|
Feb
|
Mar
|
Apr
|
May
|
Jun
|
Jul
|
Aug
|
Sept
|
|||||||||||||||||||||||||||
|
Adjusted
EBITDA
|
$ | 14 | $ | 3 | $ | 25 | $ | 29 | $ | 31 | $ | 41 | $ | 26 | $ | 25 | $ | 45 | ||||||||||||||||||
|
Less:
Capital Expenditures
|
(1 | ) | (0 | ) | (2 | ) | (2 | ) | (2 | ) | (2 | ) | (3 | ) | (2 | ) | (2 | ) | ||||||||||||||||||
|
(Increase)/Decrease
in Working Capital
|
(14 | ) | (8 | ) | 8 | (41 | ) | (12 | ) | 9 | 17 | 6 | 34 | |||||||||||||||||||||||
|
Less:
Cash Taxes
|
(3 | ) | (1 | ) | (1 | ) | (4 | ) | (4 | ) | (4 | ) | (4 | ) | (4 | ) | (4 | ) | ||||||||||||||||||
|
Less:
Cash Interest Expense
|
(12 | ) | (0 | ) | (2 | ) | (2 | ) | (2 | ) | (2 | ) | (2 | ) | (8 | ) | (8 | ) | ||||||||||||||||||
|
Interest
Rate Swap Adjustment
|
(1 | ) | (1 | ) | (1 | ) | (1 | ) | (1 | ) | (1 | ) | (1 | ) | (1 | ) | (1 | ) | ||||||||||||||||||
|
Less:
Other
|
(30 | ) | 7 | (23 | ) | (1 | ) | 4 | (5 | ) | 28 | 7 | (2 | ) | ||||||||||||||||||||||
|
Intercompany
(Foreign Subs)
|
66 | (13 | ) | (3 | ) | 10 | 0 | (15 | ) | 15 | 0 | (20 | ) | |||||||||||||||||||||||
|
Change
in Other Indebtedness
|
(6 | ) | (1 | ) | 2 | (2 | ) | (1 | ) | (4 | ) | (3 | ) | (0 | ) | (8 | ) | |||||||||||||||||||
|
Borrowing
/ (Repayment) of Revolver
|
0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | |||||||||||||||||||||||||||
|
Cash
Flow (pre-Restructuring Related Fees)
|
$ | 14 | $ | (13 | ) | $ | 5 | $ | (14 | ) | $ | 14 | $ | 17 | $ | 74 | $ | 23 | $ | 34 | ||||||||||||||||
|
Less:
Bankruptcy Related Fees
|
(8 | ) | (9 | ) | (0 | ) | (4 | ) | (7 | ) | (7 | ) | (30 | ) | (6 | ) | (2 | ) | ||||||||||||||||||
|
Cash
Flow (post-Restructuring Related Fees, pre-Exit Needs)
|
$ | 6 | $ | (22 | ) | $ | 4 | $ | (18 | ) | $ | 7 | $ | 10 | $ | 44 | $ | 17 | $ | 33 | ||||||||||||||||
|
Less:
Cash Interest Expense - Term Loan ("catch-up")
|
0 | 0 | 0 | 0 | 0 | 0 | (42 | ) | 0 | 0 | ||||||||||||||||||||||||||
|
Less:
Mandatory Repayment of Term Loan ("catch-up")
|
0 | 0 | 0 | 0 | 0 | 0 | (7 | ) | 0 | 0 | ||||||||||||||||||||||||||
|
Less:
Repayment of Synthetic L/C
|
0 | 0 | 0 | 0 | 0 | 0 | (20 | ) | 0 | 0 | ||||||||||||||||||||||||||
|
Less:
Interest Rate Swap Termination at Exit
|
0 | 0 | 0 | 0 | 0 | 0 | (7 | ) | 0 | 0 | ||||||||||||||||||||||||||
|
Less:
D&O run-off at Exit
|
0 | 0 | 0 | 0 | 0 | 0 | (3 | ) | 0 | 0 | ||||||||||||||||||||||||||
|
Cash
Flow (post-Restructuring Related Fees and Exit Needs)
|
$ | 0 | $ | 0 | $ | 0 | $ | 0 | $ | 0 | $ | 0 | $ | (79 | ) | $ | 0 | $ | 0 | |||||||||||||||||
|
Additional
Borrowings
|
$ | 6 | $ | (22 | ) | $ | 4 | $ | (18 | ) | $ | 7 | $ | 10 | $ | (35 | ) | $ | 17 | $ | 33 | |||||||||||||||
|
Beginning
DIP Balance
|
$ | 167 | $ | 161 | $ | 183 | $ | 178 | $ | 196 | $ | 189 | $ | 179 | $ | 214 | $ | 197 | ||||||||||||||||||
|
Plus:
Total Cash Needs
|
(6 | ) | 22 | (4 | ) | 18 | (7 | ) | (10 | ) | 35 | (17 | ) | (33 | ) | |||||||||||||||||||||
|
Ending
DIP Balance
|
$ | 161 | $ | 183 | $ | 178 | $ | 196 | $ | 189 | $ | 179 | $ | 214 | $ | 197 | $ | 164 | ||||||||||||||||||
GAAP
Reconciliation to Net Income (Monthly)
|
FYE
2009
|
||||||||||||||||||||||||||||||||||||
|
(US$
millions)
|
Jan
|
Feb
|
Mar
|
Apr
|
May
|
Jun
|
Jul
|
Aug
|
Sept
|
|||||||||||||||||||||||||||
|
EBITDA
|
$ | 14 | $ | 3 | $ | 25 | $ | 29 | $ | 31 | $ | 41 | $ | 26 | $ | 25 | $ | 45 | ||||||||||||||||||
|
Growing
Products Operations
|
5 | 3 | 5 | - | - | - | - | - | - | |||||||||||||||||||||||||||
|
Adjusted
EBITDA
|
$ | 19 | $ | 6 | $ | 30 | $ | 29 | $ | 31 | $ | 41 | $ | 26 | $ | 25 | $ | 45 | ||||||||||||||||||
|
Depreciation
& Amortization
|
(5 | ) | (5 | ) | (5 | ) | (5 | ) | (5 | ) | (5 | ) | (5 | ) | (5 | ) | (5 | ) | ||||||||||||||||||
|
Interest
expense
|
(12 | ) | (1 | ) | (2 | ) | (2 | ) | (2 | ) | (2 | ) | (45 | ) | (11 | ) | (11 | ) | ||||||||||||||||||
|
Growing
Products Shutdown(1)
|
1 | (0 | ) | 5 | - | - | - | - | - | - | ||||||||||||||||||||||||||
|
Growing
Products Operations(2)
|
(5 | ) | (3 | ) | (5 | ) | - | - | - | - | - | - | ||||||||||||||||||||||||
|
Tax
expense
|
1 | 1 | (8 | ) | (8 | ) | (8 | ) | (12 | ) | 8 | (3 | ) | (10 | ) | |||||||||||||||||||||
|
Net
Income
|
$ | (2 | ) | $ | (2 | ) | $ | 15 | $ | 14 | $ | 15 | $ | 22 | $ | (16 | ) | $ | 6 | $ | 19 | |||||||||||||||
|
IPI
Selic
|
0 | 1 | 1 | 0 | 0 | 1 | 0 | 0 | 0 | |||||||||||||||||||||||||||
|
Restructuring
& related charges(3)
|
(2 | ) | (9 | ) | (23 | ) | (11 | ) | (11 | ) | (11 | ) | 488 | (1 | ) | (1 | ) | |||||||||||||||||||
|
Growing Products Shutdown(4)
|
(9 | ) | (1 | ) | 0 | - | - | - | - | - | - | |||||||||||||||||||||||||
|
Tax expense
|
(4 | ) | (3 | ) | (8 | ) | (4 | ) | (4 | ) | (4 | ) | 171 | (0 | ) | (0 | ) | |||||||||||||||||||
|
GAAP
Net Income (Loss)
|
$ | (16 | ) | $ | (14 | ) | $ | (15 | ) | $ | (1 | ) | $ | 1 | $ | 8 | $ | 644 | $ | 5 | $ | 18 | ||||||||||||||
|
Notes:
|
(1)
Includes Inventory Impairment and Hedges of $34 in
2009E.
|
|
|
(2)
Represents loss from operations related to the Growing Products business
from October 1, 2008 through March 29,
2009.
|
|
|
(3)
Represents gain on cancellation of debt of $515, professional fees of $67,
write off of deferred financing fees of $11 and provision for rejection of
leases of $9.
|
|
|
(4)
Represent remaining shutdown costs, PP&E and Intangible asset
impairments, related to Growing
Products.
|
Borrowing
Base Availability
|
Fiscal
Year 2009
|
||||||||||||||||||||||||||||||||||||
|
(US$
millions)
|
Jan
|
Feb
|
Mar
|
Apr
|
May
|
Jun
|
Jul
|
Aug
|
Sept
|
|||||||||||||||||||||||||||
|
Gross
Availability
|
$ | 208 | $ | 225 | $ | 239 | $ | 249 | $ | 260 | $ | 259 | $ | 221 | $ | 213 | $ | 201 | ||||||||||||||||||
|
Less:
Suppressed Availability
|
0 | 0 | (4 | ) | (24 | ) | (35 | ) | (34 | ) | 0 | 0 | 0 | |||||||||||||||||||||||
|
Borrowing
Base Availability
|
$ | 208 | $ | 225 | $ | 235 | $ | 225 | $ | 225 | $ | 225 | $ | 221 | $ | 213 | $ | 201 | ||||||||||||||||||
|
Less:
Availability Block
|
(25 | ) | (25 | ) | (25 | ) | (25 | ) | (25 | ) | (25 | ) | (25 | ) | (25 | ) | (25 | ) | ||||||||||||||||||
|
Less:
Reserves
|
(7 | ) | (10 | ) | (9 | ) | (9 | ) | (9 | ) | (9 | ) | (6 | ) | (6 | ) | (6 | ) | ||||||||||||||||||
|
Less:
Letters of Credit
|
(3 | ) | (5 | ) | (6 | ) | (8 | ) | (9 | ) | (13 | ) | 0 | 0 | 0 | |||||||||||||||||||||
|
Maximum
Revolver Draw Allowed
|
$ | 173 | $ | 185 | $ | 195 | $ | 183 | $ | 182 | $ | 178 | $ | 190 | $ | 182 | $ | 170 | ||||||||||||||||||
Project
Capital Structure at Exit (07/15/2009)
|
Projected
|
Pro
Forma
|
|||||||||||
|
(US$
millions)
|
7/15/2009
|
Adjustments
|
7/15/2009
|
|||||||||
|
ABL
Facility
|
$ | 214.3 | $ | 0.0 | $ | 214.3 | ||||||
|
First
Lien Term Loan
|
1,298.7 | 0.0 | 1,298.7 | |||||||||
|
Capital
Leases
|
21.3 | 0.0 | 21.3 | |||||||||
|
Total
Secured Debt
|
$ | 1,534.3 | $ | 1,534.3 | ||||||||
|
Subordinated
Debt
|
1,049.9 | $ | (831.8 | ) | 218.1 | |||||||
|
Total
Debt
|
$ | 2,584.2 | $ | 1,752.4 | ||||||||
|
Shareholder's
Equity
|
$ | (1,234.9 | ) | $ | 831.8 | $ | (403.1 | ) | ||||