Paperweight Development Corp. And Subsidiaries UNAUDITED CONDENSED PRO FORMA CONSOLIDATED BALANCE SHEET

The following excerpt is from the company's SEC filing.

April 5, 2015

(dollars in thousands, except share data)

Historical (1)

Sale of the

Encapsys

Business (2)

Pro Forma

Adjustments (3)

ASSETS

Current assets

Cash and cash equivalents

165,000

(165,000

Restricted cash

35,000

Accounts receivable, net

54,959

(1,520

53,439

Inventories

92,137

(1,068

91,069

Other current assets

Total current assets

154,430

197,369

186,799

Property, plant and equipment, net

231,965

(1 2,845

219,120

Intangible assets, net

38,697

Other assets

20,455

20,448

Total assets

445,547

184,517

465,064

LIABILITIES, REDEEMABLE COMMON STOCK,

ACCUMULATED DEFICIT AND

ACCUMULATED OTHER COMPREHENSIVE INCOME

Current liabilities

Current portion of long-term debt

12,826

Accounts payable

69,366

(1,448

67,918

Accrued interest

Other accrued liabilities

44,431

44,232

Total current liabilities

136,177

(1,647

134,530

Long-term debt

576,982

411,982

Postretirement benefits other than pension

31,715

Accrued pension

93,095

Other long-term liabilities

45,856

(1,899

43,957

Commitments and contingencies

Redeemable common stock, $0.01 par value, shares authorized: 30,000,000, shares issued and outstanding: 7,205,699

121,017

Accumulated deficit

(584,901

188,063

(396,838

Accumulated other comprehensive income

25,606

Total liabilities, redeemable common stock, accumulated deficit and accumulated other comprehensive income

See accompanying notes to unaudited condensed pro forma consolidated financial statements.

PAPERWEIGHT DEVELOPMENT CORP. AND SUBSIDIARIES

UNAUDITED CONDENSED PRO FORMA CONSOLIDATED STATEMENT OF OPERATIONS

For the Three Months Ended April 5, 2015

(dollars in thousands)

Net sales

195,596

(11,687

183,909

Cost of sales

156,564

(5,146

151,418

Gross profit

39,032

(6,541

32,491

Selling, general and administrative expenses

30,196

(2,038

28,158

Operating income

(4,503

Other expense

Interest expense

12,822

(2,441

10,381

Foreign exchange loss

(Loss) income before income taxes

(5,691

(7,753

Provision for income taxes

Net (loss) income

(5,765

(7,827

For the Year Ended January 3, 2015

809,816

(45,118

764,698

677,383

(20,070

657,313

132,433

(25,048

107,385

149,144

(8,869

140,275

Fox River Funding Agreement

23,975

Operating loss

(40,686

(16,179

(56,865

Other expense (income)

49,463

(9,856

39,607

Interest income

(92,503

(98,826

(92,772

(99,095

For the Year Ended December 28, 2013

807,486

(34,793

772,693

567,786

(15,224

552,562

239,700

(19,569

220,131

106,928

(6,040

100,888

132,772

(13,529

119,243

55,910

Debt extinguishment expense

59,681

Income before income taxes

17,468

Net income

17,275

For the Year Ended December 29, 2012

849,756

(31,212

818,544

758,875

(14,533

744,342

90,881

(16,679

74,202

152,961

(6,093

146,868

Restructuring

28,589

Environmental expense insurance recovery

(2,188

(88,481

(10,586

(99,067

59,654

Foreign exchange gain

Loss before income taxes

(147,864

(158,450

Net loss

(148,451

(159,037

Notes to Unaudited Condensed Pro Forma Consolidated Financial Information

Reflects the unaudited historical condensed consolidated balance sheet and unaudited historical condensed consolidated statement of operations of Paperweight Development Corp. and Subsidiaries (“PDC”) for the first quarter 2015 ended April 5, 2015 and the audited historical consolidated statements of operations for the years ended January 3, 2015, December 28, 2013, and December 29, 2012.

As a result of the sale of the Encapsys Business, the Company received cash gross proceeds of $208 million, less expenses of approximately $8 million.

Selling price

Transaction expenses

Net proceeds

Less: Carrying value of net assets sold

Net gain on sale of Encapsys Business

The pro forma net gain on the sale is based on preliminary estimates and is subject to change. PDC is a subchapter S corporation and therefore no income tax impact is included for this transaction.

Of the $200.0 million of net proceeds, $165 million was used immediately to repay a portion of long-term debt. Remaining proceeds of $35 million are held as restricted cash and will be used within one year of this transaction for the specific purpose of capital investment, including potential acquisitions, and/or further debt reduction.

The results of operations of the Encapsys Business, excluding the impact of corporate selling, general and administrative expenses previously allocated to Encapsys and now included in the continuing operations of PDC, have been removed from the unaudited historical condensed consolidated statement of operations for the first quarter 2015 ended April 5, 2015 and the audited historical consolidated statements of operations for the years ended January 3, 2015, December 28, 2013, and December 29, 2012.

Proceeds of $165 million were used to repay a portion of long-term debt. As a result, a reduction in interest expense for the first quarter 2015 ended April 5, 2015 and for fiscal year 2014 ended January 3, 2015 was calculated as if the transaction occurred on the first day of the period presented using historical rates applied to historical principle amounts of long-term debt.

The above information was disclosed in a filing to the SEC. To see this filing in its entirety, click here.

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