424B3 1 c26628e424b3.htm SUPPLEMENT TO PROSPECTUS e424b3
 

Filed Pursuant to Rule 424(b)(3)
File No. 333-138750
SUPPLEMENT TO PROSPECTUS
(COLEMAN LOGO)
16,786,895 Shares
Common Stock
 
 
This Supplement to the Prospectus, dated May 9, 2008 (this “Supplement”), supplements and amends the Prospectus, dated September 13, 2007 (the “Prospectus”), relating to the Common Stock of Coleman Cable, Inc. (the “Company”). This Supplement should be read in conjunction with the Prospectus.
The Prospectus is hereby supplemented as follows:
On May 8, 2008, the Company announced its first-quarter 2008 financial results in a press release, which the Company furnished to the Securities and Exchange Commission as an exhibit to its current report on Form 8-K.
2008 First Quarter Results
Coleman reported revenues for the 2008 first quarter of $252.5 million compared to revenues of $109.4 million in the same period of last year, which represents an increase of 131 percent. The increase in net sales period over period primarily reflects: (1) our acquisitions in 2007 of Copperfield LLC, certain assets and liabilities of Woods US and the common stock of Woods Canada and (2) the impact of higher copper prices for the first quarter of 2008 compared to the same quarter last year. Volume (total pounds shipped) increased 123 percent in the first quarter of 2008 compared to the prior-year period, also primarily due to our 2007 acquisitions.
Our gross profit rate for the first quarter of 2008 was 11.4 percent compared to 15.1 percent for the same period of 2007. The reduction in gross profit rate relates primarily to the acquisition of Copperfield, which, as discussed in previous quarters, prices its products to earn a fixed dollar margin, which causes gross profit rate compression in higher copper price environments, as was the case in the first quarter of 2008. Due to the expansion of the Company’s customer base as a result of acquisitions made during 2007, Coleman now has a significant portion of its products priced in this manner. Also contributing to margin erosion in the first quarter of 2008 were pricing pressures due to contracting market conditions.
Selling, engineering, general and administrative (SEG&A) expense for the 2008 first quarter was $12.8 million compared to $8.5 million for the 2007 first quarter, with the increase resulting mainly from the Copperfield and Woods acquisitions. Total payroll-related expenses accounted for approximately $2.4 million of the total increase, with the remaining $1.9 million increase reflecting increases across a number of general and administrative expense areas. Despite the increased SEG&A expense during the quarter, Coleman’s SEG&A expense as a percentage of sales declined to 5.1 percent during the 2008 first quarter, as compared to 7.8 percent for the first quarter of 2007. The decrease in SEG&A expense as a percentage of sales reflects the impact of increased expense leverage, as the Company’s fixed costs were spread over a higher net sales base due to increased copper prices and the impact of the Copperfield and Woods acquisitions, which occurred after the first quarter of 2007.
Intangible amortization expense for the 2008 first quarter was $2.7 million due primarily to 2007 acquisitions.
Restructuring charges for the first quarter of 2008 were $0.2 million as a result of the integration of the Copperfield facilities. Restructuring charges for the first quarter of 2007 were $0.4 million, the result of the 2006 closure of Coleman’s facility in Siler City, N. C.
Interest expense, net, for the first quarter of 2008 was $7.8 million compared to $3.1 million for the same period of 2007, due primarily to additional expense related to increased borrowings as a result of our 2007 acquisitions.
Income tax expense was $2.1 million in the 2008 first quarter compared to $1.7 million for 2007 first quarter, primarily reflecting increased pre-tax income.
Net income for the first quarter of 2008 was $3.3 million, compared to $2.8 million in the first quarter of 2007. Earnings per share for the first quarter were $0.19 in the 2008 period compared to $0.17 in the 2007 period.
The Company continues to strengthen its balance sheet. Net working capital was approximately 23.4 percent of net sales for the quarter, more than 4.6 percentage points less than last year’s level, mainly due to the acquisition of Copperfield.

 


 

COLEMAN CABLE, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENT OF INCOME

(Thousands, except per share date)
(Unaudited)
                 
    Q1 2007     Q1 2008  
    As Reported  
Net sales
  $ 109,396     $ 252,483  
Cost of goods sold
    92,910       223,634  
 
           
Gross profit
    16,486       28,849  
 
               
Selling, Engineering, General & Administrative
    8,480       12,761  
Intangible amortization expense
          2,662  
Restructuring charges
    364       176  
 
           
Operating income
    7,642       13,250  
Interest expense, net
    3,104       7,804  
Other loss, net
    10       121  
 
           
Income before income taxes
    4,528       5,325  
Income tax expense
    1,734       2,067  
 
           
Net income
  $ 2,794     $ 3,258  
 
           
 
               
Earnings per share
               
Basic
  $ 0.17     $ 0.19  
Diluted
  $ 0.17     $ 0.19  
Weighted average shares outstanding
               
Basic
    16,787       16,787  
Diluted
    16,787       16,800  
COLEMAN CABLE, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED BALANCE SHEETS

(Thousands)
(Unaudited)
                 
    March 31, 2008     December 31, 2007  
ASSETS
               
Current Assets:
               
Cash and cash equivalents
  $ 3,900     $ 8,877  
Accounts receivable, net
    147,126       159,133  
Inventories
    147,053       138,359  
Other Current Assets
    13,908       13,084  
 
           
Total Current Assets
    311,987       319,453  
Property, plant and equipment (net of accumulated depreciation)
    80,036       79,963  
Goodwill, intangible assets and other long-term assets, net
    175,645       176,236  
 
           
TOTAL ASSETS
  $ 567,668     $ 575,652  
 
           
 
               
LIABILITIES AND SHAREHOLDERS’ EQUITY
               
Current portion of long-term debt
  $ 946     $ 936  
Accounts payable and accrued liabilities
    74,067       87,992  
 
           
Total current liabilities
    75,013       88,928  
Long-term debt
    369,665       366,905  
Other long-term liabilities
    23,226       23,848  
 
           
Total liabilities
    467,904       390,753  
Shareholders’ equity
    99,764       95,971  
 
           
TOTAL LIABILITIES AND SHAREHOLDERS’ EQUITY
  $ 567,668     $ 575,652  
 
           

 


 

Forward-Looking Statements
This Supplement contains certain forward-looking statements. These forward-looking statements involve risk and uncertainty. Actual results could differ from those currently anticipated due to a number of factors including those mentioned in the Prospectus. Forward-looking statements are based on information available to management at the time, and they involve judgments and estimates that may prove to be incorrect. Factors that could cause results to differ from expectations include: the level of market demand for our products; competitive pressures; economic conditions in the U.S.; price fluctuations of raw materials; environmental matters; general economic conditions and changes in the demand for our products by key customers; failure to identify, finance or integrate acquisitions; failure to accomplish integration activities on a timely basis; failure to achieve expected efficiencies in our manufacturing and integration consolidations; changes in the cost of labor or raw materials, including PVC and fuel costs; inaccuracies in purchase agreements relating to acquisitions; failure of customers to make expected purchases, including customers of acquired companies; unforeseen developments or expenses with respect to our acquisition, integration and consolidation efforts; and other specific factors discussed in “Risk Factors” in the Prospectus.