UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, DC 20549
FORM 8-K
JOINT CURRENT REPORT
PURSUANT TO SECTION 13 OR
15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
Date
of Report (Date of earliest event reported): January 2, 2007
Rockwood
Holdings, Inc.
(Exact
name of registrant as specified in its charter)
Delaware |
|
001-32609 |
|
52-2277366 |
(Jurisdiction of Incorporation) |
|
(Commission File Number) |
|
(IRS Employer |
100 Overlook Center
Princeton, New Jersey 08540
(Address of registrants principal executive office)
(609) 514-0300
(Registrants telephone number)
Rockwood
Specialties Group, Inc.
(Exact name of
registrant as specified in its charter)
Delaware |
|
333-109686 |
|
52-2277390 |
(Jurisdiction of Incorporation) |
|
(Commission File Number) |
|
(IRS Employer |
|
|
|
|
Identification Number) |
100 Overlook Center
Princeton, New Jersey 08540
(Address of registrants principal executive office)
(609) 514-0300
(Registrants telephone number)
Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registration under any of the following provisions:
o Written communications pursuant to Rule 425 under the Securities Act
o Soliciting material pursuant to Rule 14a-12 under the Exchange Act
o Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act
o Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act
ITEM 2.01 COMPLETION OF ACQUISITION OR DISPOSITION OF ASSETS.
ITEM 9.01 FINANCIAL STATEMENTS AND EXHIBITS.
(b) Pro forma financial information.
(i) Rockwood Holdings, Inc.
ROCKWOOD HOLDINGS, INC. UNAUDITED PRO FORMA
CONDENSED FINANCIAL INFORMATION
The following unaudited pro forma condensed balance sheet and statements of operations are presented to illustrate the estimated effects of the disposition of its wood protection chemicals business by Chemicals Specialties, Inc. and related subsidiaries (CSI), a wholly-owned subsidiary of Rockwood Holdings, Inc., via the contribution of such business and cash to Viance, LLC, a joint venture company jointly-owned by CSI and Rohm and Haas Company, on Rockwood Holdings, Inc.s historical financial condition and results of operations. In addition, the pro forma information illustrates the results of operations related to the wood biocide business and cash contributed by Rohm and Haas to the joint venture and the resulting payment to CSI (see Note 1 (A) below).
In accordance with the consolidation principles of FASB Interpretation No. 46 (R), Consolidation of Variable Interest EntitiesAn Interpretation of ARB No. 51 (FIN 46 (R)), we have tentatively concluded that Rockwood Holdings, Inc. is the primary beneficiary of the joint venture and as such will be required to consolidate the joint venture. As such, the pro forma financial information has been prepared on the basis that the joint venture is consolidated within the Rockwood Holdings, Inc. financial statements and the interest in the joint venture by Rohm and Haas is shown as minority interest. In addition, the pro forma information was prepared assuming no step-up of assets contributed to the joint venture.
The unaudited pro forma condensed financial information presented for the balance sheet as of September 30, 2006 and for the statements of operations for the nine months ended September 30, 2006 and the year ended December 31, 2005, is based upon the historical results of operations, adjusted to reflect the pro forma effect as if the joint venture had occurred on January 1, 2005 with respect to the statements of operations and on September 30, 2006 with respect to the balance sheet. The historical consolidated financial information presented herein should be read in conjunction with the audited consolidated financial statements and notes thereto appearing in Rockwood Holdings, Inc.s annual report on Form 10-K for the year ended December 31, 2005, and the unaudited condensed consolidated financial statements and notes thereto included in Rockwood Holdings, Inc.s quarterly report on Form 10-Q for the nine months ended September 30, 2006.
The unaudited pro forma condensed financial information is for illustrative purposes only. Such information does not purport to be indicative of the financial condition and the results of operations that would have been achieved had the joint venture for which Rockwood Holdings, Inc. is giving pro forma effect actually occurred on the dates referred to above or the financial condition and the results of operations that may be expected in the future. Such information, and the related tentative accounting treatment, has been prepared based upon currently available information and assumptions that Rockwood Holdings, Inc. believes are reasonable. Such currently available information and assumptions may prove to be inaccurate over time.
2
ROCKWOOD HOLDINGS, INC. AND SUBSIDIARIES
Unaudited Pro Forma Condensed Balance Sheet
as of September 30, 2006
(Dollars in millions)
|
|
Rockwood |
|
|
|
Pro Forma |
|
|||
|
|
Historical |
|
Adjustments |
|
As Adjusted |
|
|||
ASSETS |
|
|
|
|
|
|
|
|||
Current assets: |
|
|
|
|
|
|
|
|||
Cash and cash equivalents |
|
$ |
70.0 |
|
$ |
75.6 |
(A) |
$ |
145.6 |
|
Accounts receivable, net |
|
522.2 |
|
|
|
522.2 |
|
|||
Inventories |
|
494.0 |
|
|
|
494.0 |
|
|||
Deferred income taxes |
|
8.4 |
|
2.7 |
(B) |
11.1 |
|
|||
Prepaid expenses and other current assets |
|
48.3 |
|
|
|
48.3 |
|
|||
Total current assets |
|
1,142.9 |
|
78.3 |
|
1,221.2 |
|
|||
Property, plant and equipment, net |
|
1,502.7 |
|
|
|
1,502.7 |
|
|||
Goodwill |
|
1,681.9 |
|
|
|
1,681.9 |
|
|||
Other intangible assets, net |
|
586.1 |
|
|
|
586.1 |
|
|||
Deferred debt issuance costs, net of accumulated amortization of $22.2 |
|
52.5 |
|
|
|
52.5 |
|
|||
Other assets |
|
59.5 |
|
|
|
59.5 |
|
|||
Total assets |
|
$ |
5,025.6 |
|
$ |
78.3 |
|
$ |
5,103.9 |
|
LIABILITIES AND STOCKHOLDERS EQUITY |
|
|
|
|
|
|
|
|||
Current liabilities: |
|
|
|
|
|
|
|
|||
Accounts payable |
|
$ |
268.8 |
|
$ |
|
|
$ |
268.8 |
|
Income taxes payable |
|
25.6 |
|
3.6 |
(B) |
29.2 |
|
|||
Accrued compensation |
|
103.3 |
|
|
|
103.3 |
|
|||
Restructuring liability |
|
8.6 |
|
|
|
8.6 |
|
|||
Accrued expenses and other current liabilities |
|
232.3 |
|
|
|
232.3 |
|
|||
Long-term debt, current portion |
|
98.2 |
|
|
|
98.2 |
|
|||
Total current liabilities |
|
736.8 |
|
3.6 |
|
740.4 |
|
|||
Long-term debt |
|
2,716.7 |
|
|
|
2,716.7 |
|
|||
Pension and related liabilities |
|
374.1 |
|
|
|
374.1 |
|
|||
Deferred income taxes |
|
34.7 |
|
|
|
34.7 |
|
|||
Other liabilities |
|
98.7 |
|
71.1 |
(A) |
169.8 |
|
|||
Total liabilities |
|
3,961.0 |
|
74.7 |
|
4,035.7 |
|
|||
Minority interest |
|
28.0 |
|
6.1 |
(C) |
34.1 |
|
|||
Stockholders equity: |
|
|
|
|
|
|
|
|||
Common stock |
|
0.7 |
|
|
|
0.7 |
|
|||
Paid-in capital |
|
1,151.8 |
|
|
|
1,151.8 |
|
|||
Accumulated other comprehensive income |
|
154.6 |
|
|
|
154.6 |
|
|||
Accumulated deficit |
|
(269.1 |
) |
(2.5 |
)(B) |
(271.6 |
) |
|||
Treasury stock, at cost |
|
(1.4 |
) |
|
|
(1.4 |
) |
|||
Total stockholders equity |
|
1,036.6 |
|
(2.5 |
) |
1,034.1 |
|
|||
Total liabilities and stockholders equity |
|
$ |
5,025.6 |
|
$ |
78.3 |
|
$ |
5,103.9 |
|
Notes to Unaudited Pro Forma Condensed Balance Sheet
1. Pro Forma Assumptions and Adjustments
(A) - Represents a payment of $76.6 million to the joint venture from Rohm and Haas. Cash proceeds of $67.6 million were paid from the joint venture to CSI, of which CSI used approximately $1.0 million to pay fees and expenses associated with this transaction. An amount of $9.0 million was designated as a working capital contribution to the joint venture. The net cash proceeds of $66.6 million received by CSI were used for general corporate purposes.
(B) - As the assets contributed to the joint venture were primarily in the United States and the United Kingdom (the UK), taxes were calculated using a state tax rate of 5.8% and a UK tax rate of 30%. We do not expect the transaction to have any federal tax effect as a result of net operating losses and the impact of valuation allowances.
(C) - In accordance with the consolidation principles of FIN 46 (R), we have tentatively concluded that Rockwood Holdings, Inc. is the primary beneficiary of the joint venture and as such will be required to consolidate the joint venture. As such, the pro forma financial information has been prepared on the basis that the joint venture is consolidated within the Rockwood Holdings, Inc. financial statements and the interest in the joint venture by Rohm and Haas is shown as minority interest. Minority interest is calculated based on the net income generated from CSIs operations contributed to the joint venture along with the net income from Rohm and Haas contributed operations.
3
ROCKWOOD HOLDINGS, INC. AND SUBSIDIARIES
Unaudited Pro Forma Condensed Statements of Operations
for the Nine Months Ended September 30, 2006
(Dollars in millions, except per share amounts; shares in thousands)
|
|
Rockwood |
|
|
|
Pro Forma |
|
|||
|
|
Historical |
|
Adjustments |
|
As Adjusted |
|
|||
Net sales |
|
$ |
2,495.4 |
|
$ |
13.6 |
|
$ |
2,509.0 |
|
Cost of products sold |
|
1,729.5 |
|
4.7 |
|
1,734.2 |
|
|||
Gross profit |
|
765.9 |
|
8.9 |
|
774.8 |
|
|||
Selling, general and administrative expenses |
|
478.8 |
|
1.5 |
|
480.3 |
|
|||
Restructuring charges, net |
|
3.9 |
|
|
|
3.9 |
|
|||
Operating income |
|
283.2 |
|
7.4 |
|
290.6 |
|
|||
Other income (expenses): |
|
|
|
|
|
|
|
|||
Interest expense, net |
|
(147.7 |
) |
|
|
(147.7 |
) |
|||
Foreign exchange gain, net |
|
7.7 |
|
|
|
7.7 |
|
|||
Loss on sale of business |
|
(12.1 |
) |
|
|
(12.1 |
) |
|||
Other, net |
|
2.7 |
|
|
|
2.7 |
|
|||
Net |
|
(149.4 |
) |
|
|
(149.4 |
) |
|||
Income before taxes and minority interest |
|
133.8 |
|
7.4 |
|
141.2 |
|
|||
Income tax provision |
|
34.5 |
|
0.2 |
(A) |
34.7 |
|
|||
Net income before minority interest |
|
99.3 |
|
7.2 |
|
106.5 |
|
|||
Minority interest |
|
(0.8 |
) |
(7.1 |
)(B) |
(7.9 |
) |
|||
Net income |
|
$ |
98.5 |
|
$ |
0.1 |
|
$ |
98.6 |
|
|
|
|
|
|
|
|
|
|||
Basic earnings per common share |
|
$ |
1.34 |
|
|
|
$ |
1.34 |
|
|
Diluted earnings per common share |
|
$ |
1.31 |
|
|
|
$ |
1.31 |
|
|
|
|
|
|
|
|
|
|
|||
Weighted average number of basic shares outstanding |
|
73,781 |
|
|
|
73,781 |
|
|||
Weighted average number of diluted shares outstanding |
|
75,001 |
|
|
|
75,001 |
|
Notes to Unaudited Pro Forma Condensed Statements of Operations
1. Pro Forma Assumptions and Adjustments
(A) - As the assets contributed to the joint venture were primarily in the United States and the UK, taxes were calculated using a state tax rate of 5.8% and a UK tax rate of 30%. We do not expect the transaction to have any federal tax effect as a result of net operating losses and considering the impact of valuation allowances.
(B) - In accordance with the consolidation principles of FIN 46 (R), we have tentatively concluded that Rockwood Holdings, Inc. is the primary beneficiary of the joint venture and as such will be required to consolidate the joint venture. As such, the pro forma financial information has been prepared on the basis that the joint venture is consolidated within the Rockwood Holdings, Inc. financial statements and the interest in the joint venture by Rohm and Haas is shown as minority interest. Minority interest is calculated based on the net income generated from CSIs operations contributed to the joint venture along with the net income from Rohm and Haas contributed operations.
4
ROCKWOOD HOLDINGS, INC. AND SUBSIDIARIES
Unaudited Pro Forma Condensed Statements of Operations
for the Year Ended December 31, 2005
(Dollars in millions, except per share amounts; shares in thousands)
|
|
Rockwood |
|
|
|
Pro Forma |
|
|||
|
|
Historical |
|
Adjustments |
|
As Adjusted |
|
|||
Net sales |
|
$ |
3,121.2 |
|
$ |
16.4 |
|
$ |
3,137.6 |
|
Cost of products sold |
|
2,167.3 |
|
5.8 |
|
2,173.1 |
|
|||
Gross profit |
|
953.9 |
|
10.6 |
|
964.5 |
|
|||
Selling, general and administrative expenses |
|
598.6 |
|
2.0 |
|
600.6 |
|
|||
Impairment charges |
|
45.1 |
|
|
|
45.1 |
|
|||
Restructuring charges, net |
|
13.9 |
|
|
|
13.9 |
|
|||
Management services agreement termination fee |
|
10.0 |
|
|
|
10.0 |
|
|||
Operating income |
|
286.3 |
|
8.6 |
|
294.9 |
|
|||
Other income (expenses): |
|
|
|
|
|
|
|
|||
Interest expense, net |
|
(215.6 |
) |
|
|
(215.6 |
) |
|||
Loss on early extinguishment of debt |
|
(26.6 |
) |
|
|
(26.6 |
) |
|||
Refinancing expenses |
|
(1.0 |
) |
|
|
(1.0 |
) |
|||
Foreign exchange gain, net |
|
114.6 |
|
|
|
114.6 |
|
|||
Other, net |
|
6.9 |
|
|
|
6.9 |
|
|||
Net |
|
(121.7 |
) |
|
|
(121.7 |
) |
|||
Income before taxes and minority interest |
|
164.6 |
|
8.6 |
|
173.2 |
|
|||
Income tax provision |
|
71.8 |
|
0.2 |
(A) |
72.0 |
|
|||
Net income before minority interest |
|
92.8 |
|
8.4 |
|
101.2 |
|
|||
Minority interest |
|
3.0 |
|
(21.9 |
)(B) |
(18.9 |
) |
|||
Net income |
|
$ |
95.8 |
|
$ |
(13.5 |
) |
$ |
82.3 |
|
|
|
|
|
|
|
|
|
|||
Basic earnings per common share |
|
$ |
1.55 |
(C) |
|
|
$ |
1.32 |
(C) |
|
Diluted earnings per common share |
|
$ |
1.52 |
(C) |
|
|
$ |
1.30 |
(C) |
|
|
|
|
|
|
|
|
|
|||
Weighted average number of basic shares outstanding |
|
59,133 |
|
|
|
59,133 |
|
|||
Weighted average number of diluted shares outstanding |
|
60,002 |
|
|
|
60,002 |
|
Notes to Unaudited Pro Forma Condensed Statements of Operations
1. Pro Forma Assumptions and Adjustments
(A) - As the assets contributed to the joint venture were primarily in the United States and the UK, taxes were calculated using a state tax rate of 5.8% and a UK tax rate of 30%. We do not expect the transaction to have any federal tax effect as a result of net operating losses and considering the impact of valuation allowances.
(B) - In accordance with the consolidation principles of FIN 46 (R), we have tentatively concluded that Rockwood Holdings, Inc. is the primary beneficiary of the joint venture and as such will be required to consolidate the joint venture. As such, the pro forma financial information has been prepared on the basis that the joint venture is consolidated within the Rockwood Holdings, Inc. financial statements and the interest in the joint venture by Rohm and Haas is shown as minority interest. Minority interest is calculated based on the net income generated from CSIs operations contributed to the joint venture along with the net income from Rohm and Haas contributed operations.
(C) - To calculate earnings per common share, net income is reduced by $4.3 million related to redeemable convertible preferred stock dividends.
5
(ii) Rockwood Specialties Group, Inc.
ROCKWOOD SPECIALTIES GROUP, INC. UNAUDITED PRO FORMA
CONDENSED FINANCIAL INFORMATION
The following unaudited pro forma condensed balance sheet and statements of operations are presented to illustrate the estimated effects of the disposition of its wood protection chemicals business by Chemicals Specialties, Inc. and related subsidiaries (CSI), a wholly-owned subsidiary of Rockwood Specialties Group, Inc. via the contribution of such business and cash to Viance, LLC, a joint venture company jointly-owned by CSI and Rohm and Haas Company, on Rockwood Specialties Group, Inc.s historical financial condition and results of operations. In addition, the pro forma information illustrates the results of operations related to the wood biocide business and cash contributed by Rohm and Haas to the joint venture and the resulting payment to CSI (see Note 1 (A) below).
In accordance with the consolidation principles of FASB Interpretation No. 46 (R), Consolidation of Variable Interest EntitiesAn Interpretation of ARB No. 51 (FIN 46 (R)), we have tentatively concluded that Rockwood Specialties Group, Inc. is the primary beneficiary of the joint venture and as such will be required to consolidate the joint venture. As such, the pro forma financial information has been prepared on the basis that the joint venture is consolidated within the Rockwood Specialties Group, Inc. financial statements and the interest in the joint venture by Rohm and Haas is shown as minority interest. In addition, the pro forma information was prepared assuming no step-up of assets contributed to the joint venture.
The unaudited pro forma condensed financial information presented for the balance sheet as of September 30, 2006 and for the statements of operations for the nine months ended September 30, 2006 and the year ended December 31, 2005, is based upon the historical results of operations, adjusted to reflect the pro forma effect as if the joint venture had occurred on January 1, 2005 with respect to the statements of operations and on September 30, 2006 with respect to the balance sheet. The historical consolidated financial information presented herein should be read in conjunction with the audited consolidated financial statements and notes thereto appearing in Rockwood Specialties Group, Inc.s annual report on Form 10-K for the year ended December 31, 2005, and the unaudited condensed consolidated financial statements and notes thereto included in Rockwood Specialties Group, Inc.s quarterly report on Form 10-Q for the nine months ended September 30, 2006.
The unaudited pro forma condensed financial information is for illustrative purposes only. Such information does not purport to be indicative of the financial condition and the results of operations that would have been achieved had the joint venture for which Rockwood Specialties Group, Inc. is giving pro forma effect actually occurred on the dates referred to above or the financial condition and the results of operations that may be expected in the future. Such information, and the related tentative accounting treatment, has been prepared based upon currently available information and assumptions that Rockwood Specialties Group, Inc. believes are reasonable. Such currently available information and assumptions may prove to be inaccurate over time.
6
ROCKWOOD SPECIALTIES GROUP, INC. AND SUBSIDIARIES
Unaudited Pro Forma Condensed Balance Sheet
as of September 30, 2006
(Dollars in millions)
|
|
Rockwood |
|
|
|
Pro Forma |
|
|||
|
|
Historical |
|
Adjustments |
|
As adjusted |
|
|||
ASSETS |
|
|
|
|
|
|
|
|||
Current assets: |
|
|
|
|
|
|
|
|||
Cash and cash equivalents |
|
$ |
65.8 |
|
$ |
75.6 |
(A) |
$ |
141.4 |
|
Accounts receivable, net |
|
522.2 |
|
|
|
522.2 |
|
|||
Inventories |
|
494.0 |
|
|
|
494.0 |
|
|||
Deferred income taxes |
|
13.9 |
|
2.7 |
(B) |
16.6 |
|
|||
Prepaid expenses and other current assets |
|
48.3 |
|
|
|
48.3 |
|
|||
Total current assets |
|
1,144.2 |
|
78.3 |
|
1,222.5 |
|
|||
Property, plant and equipment, net |
|
1,502.7 |
|
|
|
1,502.7 |
|
|||
Goodwill |
|
1,681.9 |
|
|
|
1,681.9 |
|
|||
Other intangible assets, net |
|
586.1 |
|
|
|
586.1 |
|
|||
Deferred debt issuance costs, net of accumulated amortization of $22.2 |
|
52.5 |
|
|
|
52.5 |
|
|||
Other assets |
|
59.5 |
|
|
|
59.5 |
|
|||
Total assets |
|
$ |
5,026.9 |
|
$ |
78.3 |
|
$ |
5,105.2 |
|
LIABILITIES AND STOCKHOLDERS EQUITY |
|
|
|
|
|
|
|
|||
Current liabilities: |
|
|
|
|
|
|
|
|||
Accounts payable |
|
$ |
268.8 |
|
$ |
|
|
$ |
268.8 |
|
Income taxes payable |
|
25.6 |
|
3.6 |
(B) |
29.2 |
|
|||
Accrued compensation |
|
103.3 |
|
|
|
103.3 |
|
|||
Restructuring liability |
|
8.6 |
|
|
|
8.6 |
|
|||
Accrued expenses and other current liabilities |
|
230.0 |
|
|
|
230.0 |
|
|||
Long-term debt, current portion |
|
98.2 |
|
|
|
98.2 |
|
|||
Total current liabilities |
|
734.5 |
|
3.6 |
|
738.1 |
|
|||
Long-term debt |
|
2,716.7 |
|
|
|
2,716.7 |
|
|||
Pension and related liabilities |
|
374.1 |
|
|
|
374.1 |
|
|||
Deferred income taxes |
|
40.2 |
|
|
|
40.2 |
|
|||
Other liabilities |
|
98.7 |
|
71.1 |
(A) |
169.8 |
|
|||
Total liabilities |
|
3,964.2 |
|
74.7 |
|
4,038.9 |
|
|||
Minority interest |
|
28.0 |
|
6.1 |
(C) |
34.1 |
|
|||
Stockholders equity: |
|
|
|
|
|
|
|
|||
Paid-in capital |
|
1,004.1 |
|
|
|
1,004.1 |
|
|||
Accumulated other comprehensive income |
|
158.6 |
|
|
|
158.6 |
|
|||
Accumulated deficit |
|
(128.0 |
) |
(2.5 |
)(B) |
(130.5 |
) |
|||
Total stockholders equity |
|
1,034.7 |
|
(2.5 |
) |
1,032.2 |
|
|||
Total liabilities and stockholders equity |
|
$ |
5,026.9 |
|
$ |
78.3 |
|
$ |
5,105.2 |
|
Notes to Unaudited Pro Forma Condensed Balance Sheet
1. Pro Forma Assumptions and Adjustments
(A) - Represents a payment of $76.6 million to the joint venture from Rohm and Haas. Cash proceeds of $67.6 million were paid from the joint venture to CSI, of which CSI used approximately $1.0 million to pay fees and expenses associated with this transaction. An amount of $9.0 million was designated as a working capital contribution to the joint venture. The net cash proceeds of $66.6 million received by CSI were used for general corporate purposes.
(B) - As the assets contributed to the joint venture were primarily in the United States and the UK, taxes were calculated using a state tax rate of 5.8% and a UK tax rate of 30%. We do not expect the transaction to have any federal tax effect as a result of net operating losses and considering the impact of valuation allowances.
(C) - In accordance with the consolidation principles of FIN 46 (R), we have tentatively concluded that Rockwood Specialties Group, Inc. is the primary beneficiary of the joint venture and as such will be required to consolidate the joint venture. As such, the pro forma financial information has been prepared on the basis that the joint venture is consolidated within the Rockwood Specialties Group, Inc. financial statements and the interest in the joint venture by Rohm and Haas is shown as minority interest. Minority interest is calculated based on the net income generated from CSIs operations contributed to the joint venture along with the net income from Rohm and Haas contributed operations.
7
ROCKWOOD SPECIALTIES GROUP, INC. AND SUBSIDIARIES
Unaudited Pro Forma Condensed Statements of Operations
for the Nine Months Ended September 30, 2006
(Dollars in millions)
|
|
Rockwood |
|
|
|
Pro Forma |
|
|||
|
|
Historical |
|
Adjustments |
|
As Adjusted |
|
|||
Net sales |
|
$ |
2,495.4 |
|
$ |
13.6 |
|
$ |
2,509.0 |
|
Cost of products sold |
|
1,729.5 |
|
4.7 |
|
1,734.2 |
|
|||
Gross profit |
|
765.9 |
|
8.9 |
|
774.8 |
|
|||
Selling, general and administrative expenses |
|
478.8 |
|
1.5 |
|
480.3 |
|
|||
Restructuring charges, net |
|
3.9 |
|
|
|
3.9 |
|
|||
Operating income |
|
283.2 |
|
7.4 |
|
290.6 |
|
|||
Other income (expenses): |
|
|
|
|
|
|
|
|||
Interest expense, net |
|
(147.7 |
) |
|
|
(147.7 |
) |
|||
Foreign exchange gain, net |
|
7.7 |
|
|
|
7.7 |
|
|||
Loss on sale of business |
|
(12.1 |
) |
|
|
(12.1 |
) |
|||
Other, net |
|
2.7 |
|
|
|
2.7 |
|
|||
Net |
|
(149.4 |
) |
|
|
(149.4 |
) |
|||
Income before taxes and minority interest |
|
133.8 |
|
7.4 |
|
141.2 |
|
|||
Income tax provision |
|
34.5 |
|
0.2 |
(A) |
34.7 |
|
|||
Net income before minority interest |
|
99.3 |
|
7.2 |
|
106.5 |
|
|||
Minority interest |
|
(0.8 |
) |
(7.1 |
)(B) |
(7.9 |
) |
|||
Net income |
|
$ |
98.5 |
|
$ |
0.1 |
|
$ |
98.6 |
|
Notes to Unaudited Pro Forma Condensed Statements of Operations
1. Pro Forma Assumptions and Adjustments
(A) - As the assets contributed to the joint venture were primarily in the United States and the UK, taxes were calculated using a state tax rate of 5.8% and a UK tax rate of 30%. We do not expect the transaction to have any federal tax effect as a result of net operating losses and considering the impact of valuation allowances.
(B) - In accordance with the consolidation principles of FIN 46 (R), we have tentatively concluded that Rockwood Specialties Group, Inc. is the primary beneficiary of the joint venture and as such will be required to consolidate the joint venture. As such, the pro forma financial information has been prepared on the basis that the joint venture is consolidated within the Rockwood Specialties Group, Inc. financial statements and the interest in the joint venture by Rohm and Haas is shown as minority interest. Minority interest is calculated based on the net income generated from CSIs operations contributed to the joint venture along with the net income from Rohm and Haas contributed operations.
8
ROCKWOOD
SPECIALTIES GROUP, INC. AND SUBSIDIARIES
Unaudited Pro Forma Condensed Statements of Operations
for the Year Ended December 31, 2005
(Dollars in millions)
|
|
Rockwood |
|
Adjustments |
|
Pro Forma |
|
|||
Net sales |
|
$ |
3,121.2 |
|
$ |
16.4 |
|
$ |
3,137.6 |
|
Cost of products sold |
|
2,167.3 |
|
5.8 |
|
2,173.1 |
|
|||
Gross profit |
|
953.9 |
|
10.6 |
|
964.5 |
|
|||
Selling, general and administrative expenses |
|
598.6 |
|
2.0 |
|
600.6 |
|
|||
Impairment charges |
|
45.1 |
|
|
|
45.1 |
|
|||
Restructuring charges, net |
|
13.9 |
|
|
|
13.9 |
|
|||
Management services agreement termination fee |
|
10.0 |
|
|
|
10.0 |
|
|||
Operating income |
|
286.3 |
|
8.6 |
|
294.9 |
|
|||
Other income (expenses): |
|
|
|
|
|
|
|
|||
Interest expense, net |
|
(190.5 |
) |
|
|
(190.5 |
) |
|||
Loss on early extinguishment of debt |
|
(13.3 |
) |
|
|
(13.3 |
) |
|||
Refinancing expenses |
|
(1.0 |
) |
|
|
(1.0 |
) |
|||
Foreign exchange gain, net |
|
103.2 |
|
|
|
103.2 |
|
|||
Other, net |
|
6.9 |
|
|
|
6.9 |
|
|||
Net |
|
(94.7 |
) |
|
|
(94.7 |
) |
|||
Income before taxes and minority interest |
|
191.6 |
|
8.6 |
|
200.2 |
|
|||
Income tax provision |
|
71.8 |
|
0.2 |
(A) |
72.0 |
|
|||
Net income before minority interest |
|
119.8 |
|
8.4 |
|
128.2 |
|
|||
Minority interest |
|
3.0 |
|
(21.9 |
)(B) |
(18.9 |
) |
|||
Net income |
|
$ |
122.8 |
|
$ |
(13.5 |
) |
$ |
109.3 |
|
Notes to Unaudited Pro Forma Condensed Statements of Operations
1. Pro Forma Assumptions and Adjustments
(A) - As the assets contributed to the joint venture were primarily in the United States and the UK, taxes were calculated using a state tax rate of 5.8% and a UK tax rate of 30%. We do not expect the transaction to have any federal tax effect as a result of net operating losses and considering the impact of valuation allowances.
(B) - In accordance with the consolidation principles of FIN 46 (R), we have tentatively concluded that Rockwood Specialties Group, Inc. is the primary beneficiary of the joint venture and as such will be required to consolidate the joint venture. As such, the pro forma financial information has been prepared on the basis that the joint venture is consolidated within the Rockwood Specialties Group, Inc. financial statements and the interest in the joint venture by Rohm and Haas is shown as minority interest. Minority interest is calculated based on the net income generated from CSIs operations contributed to the joint venture along with the net income from Rohm and Haas contributed operations.
(d) Exhibits.
Exhibit No. |
|
Description |
|
|
|
99.1 |
|
Press Release dated January 4, 2007 |
9
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrants have duly caused this report to be signed on their behalf by the undersigned hereunto duly authorized.
Rockwood Holdings, Inc. |
|
||
|
|
||
|
|
||
By: |
/s/ Michael W. Valente |
|
|
|
Name: |
Michael W. Valente |
|
|
Title: |
Assistant Secretary |
|
|
|
|
|
Rockwood Specialties Group, Inc. |
|
||
|
|
|
|
|
|
|
|
By: |
/s/ Michael W. Valente |
|
|
|
Name: |
Michael W. Valente |
|
|
Title: |
Assistant Secretary |
|
Dated: January 8, 2007
10