-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, MG5Sac1kop0f6vO4g9niGq1+kSLrS/Kck0jVEldINyVidoQbdZ92jdHbnA7GmBXv /6RyCWXQLqj9IUZG8z7d6w== 0001072613-01-501216.txt : 20020413 0001072613-01-501216.hdr.sgml : 20020413 ACCESSION NUMBER: 0001072613-01-501216 CONFORMED SUBMISSION TYPE: 8-K PUBLIC DOCUMENT COUNT: 2 CONFORMED PERIOD OF REPORT: 20011214 ITEM INFORMATION: Other events FILED AS OF DATE: 20011214 FILER: COMPANY DATA: COMPANY CONFORMED NAME: SIMONDS INDUSTRIES INC CENTRAL INDEX KEY: 0001067919 STANDARD INDUSTRIAL CLASSIFICATION: METALWORKING MACHINERY & EQUIPMENT [3540] IRS NUMBER: 050484518 STATE OF INCORPORATION: DE FISCAL YEAR END: 0102 FILING VALUES: FORM TYPE: 8-K SEC ACT: 1934 Act SEC FILE NUMBER: 333-62795 FILM NUMBER: 1814145 BUSINESS ADDRESS: STREET 1: 135 INTERVALE RD CITY: FITCHBURG STATE: MA ZIP: 01420 BUSINESS PHONE: 9783433731 MAIL ADDRESS: STREET 1: 135 INTERVALE RD CITY: FITCHBURG STATE: MA ZIP: 01420 8-K 1 form8-k_10948.txt SIMONDS INDUSTRIES, INC. FORM 8-K 12/14/2001 ================================================================================ 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) DECEMBER 14, 2001 SIMONDS INDUSTRIES INC. ----------------------------------------- (Exact name of registrant as specified in charter) MASSACHUSETTS --------------------------- (State or other jurisdiction of incorporation) 333-62759 05-0484518 --------- ---------- (Commission file number) (IRS employer identification number) 135 INTERVALE STREET, FITCHBURG, MA 01420 ----------------------------------- ----- (Address of principal executive offices) (Zip code) (978) 343-3731 -------------- (Registrant's telephone number, including area code) ================================================================================ ITEM 5. OTHER EVENTS On December 14, 2001, Simonds Industries, Inc. (the "Company") issued a press release announcing that it has retained the firm of Credit Suisse First Boston in order to examine alternative transactions to strengthen it's balance sheet. A copy of the Company's press release is attached hereto and incorporated herein in its entirety. FORWARD LOOKING INFORMATION This news release includes forward-looking statements. Statements that describe future expectations, plans or strategies are considered "forward-looking statements" as that term is defined under the Private Securities Litigation Reform Act of 1995 and releases issued by the Securities and Exchange Commission. The words "believe," "expect," "anticipate," "intend," "estimate," and other expressions which are predictions of or indicate future events and trends and which do not relate to historical matters identify forward-looking statements. Such statements are subject to risks and uncertainties which could cause actual results to differ materially from those currently anticipated. Factors that could affect actual results include, among others, changes in customers' demand for the company's products, changes in raw material costs and availability, seasonal changes in customer orders, pricing actions by competitors, changes in copyright laws, consolidation among customers and competitors, success in integration of acquired businesses, changes in technology, and general changes in economic conditions. Although the Company believes that the assumptions underlying the forward-looking statements are reasonable, any of the assumptions could be inaccurate, and therefore, there can be no assurance that the forward-looking statements will prove to be accurate. The forward-looking statements included herein are made as of the date hereof, and the Company undertakes no obligation to update publicly such statements to reflect subsequent events or circumstances. -2- SIGNATURE --------- 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. SIMONDS INDUSTRIES INC. - ----------------------------------------- (Registrant) Date: December 14, 2001 By: /s/ Henry Botticello ----------------------------- Name: Henry Botticello Title: Chief Financial Officer EXHIBIT INDEX ------------- EXHIBIT NO. DESCRIPTION ----------- -------------------- 99.1 Press Release of Simonds Industries Inc., dated December 14, 2001 EX-99.1 3 ex99-1_10948.txt PRESS RELEASE EXHIBIT 99.1 ------------ For further information contact: Raymond Martino President and Chief Executive Officer or Henry Botticello Chief Financial Officer (978) 343-3731 www.simonds.cc NEWS RELEASE FITCHBURG, Mass - December 14, 2001 - Simonds Industries Inc. announced today that it has retained the firm of Credit Suisse First Boston in order to examine alternative transactions to strengthen it's balance sheet. The Company anticipates that there will be no noticeable impact on company operations as a result of any alternative financing transactions. The Company's CEO, Ray Martino, expressed confidence that the long term prospects for growth in revenue and profits would be enhanced by a new capital structure. MARKET OUTLOOK - -------------- WOOD MARKET - The wood market took a significant turn for the worse in the fourth quarter and sales rates are 35% to 45% off of what they were in early 2000 and 20% off the third quarter of 2001. The markets are depressed due to several factors. First, uncertainty in the economy and a sharp slowdown in the North American manufacturing industry, as well as a softening in furniture production and home building have cutback demand. Secondly, the lack of a trade agreement between the US and Canada on softwood lumber since April and the resulting duties and dumping charges imposed on Canadian imports has dramatically reduced Canadian lumber production in Q4. Third, depressed lumber prices and high stumpage costs are squeezing producer margins into negative territory and causing closures, shutdowns, and maintenance only production levels at many mills. In addition, structural changes in the industry have depressed production. The strong dollar has encouraged imports from Europe, Asia, and Latin America while diminishing exports, particularly in Japan. Non-Canadian U.S. softwood imports exceeded exports for the first time. Additionally, furniture manufacturing is moving overseas at an increasing pace, decreasing demand for North American hardwood. Simonds has a high concentration of its wood business in the capital equipment and hardwood production segments of the industry. These two segments have been particularly hard hit during the industry slump. The duration and permanence of these changes is difficult to gauge at this time. METAL MARKET - The general manufacturing slowdown is the major influence in the metal bandsaw and file portion of the business. Volumes are off slightly from the third quarter rate and low double digit from a year ago in the fourth quarter. As the manufacturing economy is in its 16th straight month of contraction we are feeling the impact. The strong dollar continues to strengthen the German manufacturers and hamper Simonds efforts to export product from the US. FINANCIAL OUTLOOK - ----------------- Revenue for the fourth quarter will be off the third quarter rate by $3-4 million as a result of the market influences described above. EBITDA before any one-time charges will be in the range of minus $.5 million to minus $1 million. Our continued focus is to manage cash, not reported earnings and we have been very aggressive at managing inventories at the expense of plant utilization. We anticipate recording one-time charges in the fourth quarter for severance for executed and anticipated reductions in force, severance, moving and idle facilities lease cost for plant closures, environmental reserves for potential clean-up of our Newcomerstown, Ohio facility and a goodwill impairment charge. These charges will be approximately $8-9 million with $3-4 million requiring cash outlays. The anticipated cash requirement in 2002 is $2.6 million. The 2002 cash outlays primarily support the permanent cost reduction program, which has a goal of $10M of cost takeout from the run rates in Q1 of this year. We are on track to be realizing these savings at a rate of $8 million in Q2 of 2002. Our working capital management continues to provide cash to the business. Inventories will decline $1-2 million from the third quarter. The accounts receivables aging remains in good shape, days sales outstanding are in the low 50's. We expect to end the year at $6-7 million of outstanding revolver with total debt of $110 million. We will have adequate availability for working capital needs cost reduction implementation. We expect to be out of compliance with our cash coverage ratio requirements and our ability to borrow to make the January 2nd bond payment is highly unlikely. FINANCIAL RESTRUCTURING - ----------------------- As a result of our fourth quarter financial results and the lack of visibility on an economic turnaround in the manufacturing sector of the economy we have retained CSFB to assist us in restructuring our debt/capital structure to allow the company to emerge from the difficult economic times healthy and ready for growth. We anticipate contacting the major bondholders individually through CSFB and meeting after the first of the year to propose a restructuring plan. -----END PRIVACY-ENHANCED MESSAGE-----