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SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C.
__________
FORM 8-K/A
(Amendment No. 1)
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the
Securities Exchange Act of 1934
__________
Date of Report (Date of Earliest Event Reported) FEBRUARY 6, 1996
THE ARLEN CORPORATION
(Exact Name of Registrant as Specified in Its Charter)
NEW YORK
(State or Other Jurisdiction of Incorporation)
1-6675 13-2668657
(Commission File Number) (IRS Employer Identification No.)
505 EIGHTH AVENUE, NEW YORK, NEW YORK 10018
(Address of Principal Executive Offices) (Zip Code)
(212) 736-8100
(Registrant's Telephone Number, Including Area Code)
(Former Name or Former Address, if Changed Since Last Report)
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ITEM 7. FINANCIAL STATEMENTS, PRO FORMA FINANCIAL INFORMATION AND EXHIBITS.
(B) PRO FORMA FINANCIAL INFORMATION:
The unaudited pro forma consolidated financial statements of
the Registrant for the fiscal year ended February 28, 1995 and the nine months
ended November 30, 1995, reflecting the disposition of the Registrant's
investments in its operating subsidiaries which took place on February 6, 1996,
appear in this Report on pages F-1 through F-7, which follow page 2 of this
Report.
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 thereunto duly authorized.
THE ARLEN CORPORATION
(Registrant)
By: /s/ Allan J. Marrus
--------------------------
Allan J. Marrus, President
Dated: June 20, 1996
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THE ARLEN CORPORATION
UNAUDITED PRO FORMA CONSOLIDATED
FINANCIAL STATEMENTS
YEAR ENDED FEBRUARY 28, 1995 AND
NINE MONTHS ENDED NOVEMBER 30, 1995
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THE ARLEN CORPORATION
UNAUDITED PRO FORMA CONSOLIDATED
FINANCIAL STATEMENTS
YEAR ENDED FEBRUARY 28, 1995 AND
NINE MONTHS ENDED NOVEMBER 30, 1995
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THE ARLEN CORPORATION
CONTENTS
INTRODUCTION F-2
UNAUDITED PRO FORMA CONSOLIDATED BALANCE SHEET F-3
NOTE TO UNAUDITED PRO FORMA CONSOLIDATED BALANCE SHEET F-4
UNAUDITED PRO FORMA CONSOLIDATED STATEMENTS OF OPERATIONS F-5-F-6
NOTES TO UNAUDITED PRO FORMA CONSOLIDATED STATEMENTS OF OPERATIONS F-7
F-1
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The Arlen Corporation
Unaudited Pro Forma Consolidated Financial Information
================================================================================
The unaudited pro forma consolidated statements of operations for the year ended
February 28, 1995 and the nine months ended November 30, 1995 and the unaudited
pro forma consolidated balance sheet as of November 30, 1995 include the
accounts of The Arlen Corporation ("Arlen") reflecting the disposition of its
investments in its operating subsidiaries (the "Disposition"). The pro forma
financial statements were derived by adjusting the historical financial
statements of Arlen for certain transactions pursuant to the Disposition
described in the notes to the unaudited pro forma consolidated statements of
operations and balance sheet.
The unaudited pro forma consolidated statements of operations for the year ended
February 28, 1995 and the nine months ended November 30, 1995 were prepared as
if the Disposition had occurred on March 1, 1994. The unaudited pro forma
consolidated balance sheet was prepared as if the Disposition had occurred on
November 30, 1995. The pro forma financial data does not purport to be
indicative of the results which actually could have been obtained had the
Disposition been completed as of the assumed dates or which may be obtained in
the future.
The pro forma financial data should be read in conjunction with the financial
statements of Arlen included in previously issued filings on Form 10-K for the
year ended February 28, 1995, Form 10-Q for the nine months ended November 30,
1995, and Form 8-K for February 6, 1996 containing a narrative summary
description of the Disposition.
F-2
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The Arlen Corporation
Unaudited Pro Forma Consolidated Balance Sheet
(in thousands)
November 30, Pro forma adjustments Pro forma as
1995 -------------------------- adjusted
Debit Credit
- --------------------------------------------------------------------------------------------------------------
Assets
Current:
Cash and cash equivalents $ 1,058 $ -- $ 1,037(1) $ 21
Certificates of deposit 228 -- 228(1) --
Accounts receivable, net 10,661 -- 10,661(1) --
Inventories 6,311 -- 6,311(1) --
Other current assets 490 -- 490(1) --
Note receivable, $2,000 face amount less
unamortized discount of $150 -- 1,850(1) -- 1,850
Due from former subsidiaries -- 758(1) -- 758
- --------------------------------------------------------------------------------------------------------------
Total current assets 18,748 2,608 18,727 2,629
Property and equipment, net 1,397 -- 1,320(1) 77
Other assets 1,622 -- 1,622(1) --
- --------------------------------------------------------------------------------------------------------------
$ 21,767 $ 2,608 $21,669 $ 2,706
==============================================================================================================
Liabilities and Capital Deficit
Current liabilities:
Notes payable and accrued interest payable $ 4,804 $ 932(1) $ -- $ 739
750(1)
2,383(1)
Accounts payable 1,827 1,827(1) -- --
Accrued state income taxes 1,044 98(1) -- 946
Accrued other 10,687 3,020(1) -- 7,667
Current portion of long-term obligations 455 156(1) -- 299
- --------------------------------------------------------------------------------------------------------------
Total current liabilities 18,817 9,166 -- 9,651
Long-term obligations 4,428 3,236(1) -- 575
617(1)
Amounts due to related parties 125,483 3,465(1) -- 122,018
- --------------------------------------------------------------------------------------------------------------
Total liabilities 148,728 16,484 -- 132,244
Capital deficit (126,961) 2,577(1) -- (129,538)
- --------------------------------------------------------------------------------------------------------------
$ 21,767 $19,061 $ -- $ 2,706
==============================================================================================================
F-3
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The Arlen Corporation
Note to Unaudited Pro Forma Consolidated Balance Sheet
1. Represents reclassification of assets and liabilities of operating
subsidiaries that were disposed of in February 1996 (net $11,642,000).
At November 30, 1995, these former subsidiaries were indebted to Arlen
in the aggregate amount of $758,000. At November 30, 1995, Arlen's
investments in subsidiaries were approximately $11,642,000 ($8,642,000
after giving effect to a January 1996 subsidiary financing transaction
which upstreamed $3,000,000 to Arlen and which Arlen used to settle
certain Arlen obligations of $2,383,000 current and $617,000
noncurrent). The proceeds from the involuntary sale in February 1996
were $6,065,000. Such proceeds consisted of a $2,000,000 noninterest
bearing note receivable (repayable in quarterly installments over two
years which, after deduction of unamortized discount based on an
imputed interest rate of 9%, amounts to $1,850,000), $750,000 in cash
which was used to satisfy certain secured obligations due to related
parties and a $3,465,000 reduction in the amounts due to related
parties.
This resulted in a pro forma net loss on disposal of subsidiaries of
$2,577,000 assuming such disposal had occurred on November 30, 1995 but
after giving effect to the January 1996 subsidiary financing
transaction which upstreamed $3,000,000 to Arlen.
F-4
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The Arlen Corporation
Unaudited Pro Forma Consolidated Statement of Operations
(in thousands except per share amounts)
================================================================================
Nine months ended Pro forma adjustments Pro forma as
November 30, 1995 ---------------------------- adjusted
Debit Credit
- ------------------------------------------------------------------------------------------------------------------
Sales $ 40,597 $ 40,597(1) $ -- $ --
Cost of sales 26,108 -- 26,108(1) --
- ------------------------------------------------------------------------------------------------------------------
Gross profit on sales 14,489 40,597 26,108 --
Selling, general and administrative expenses 11,985 -- 11,094(1) 891
- ------------------------------------------------------------------------------------------------------------------
Operating income (loss) 2,504 40,597 37,202 (891)
Other (expenses) income:
Interest expense (7,997) -- 346(1) (7,443)
208(2)
Interest income -- -- 38(3) 38
Other income, net 24 24(1) -- --
- ------------------------------------------------------------------------------------------------------------------
Loss from continuing operations $ (5,469) $ 40,621 $ 37,794 $(8,296)
==================================================================================================================
Loss from continuing operations per common share $ (.18) $ (.26)
==================================================================================================================
Weighted average common shares outstanding 31,690 31,690
==================================================================================================================
F-5
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The Arlen Corporation
Unaudited Pro Forma Consolidated Statement of Operations
(in thousands except per share amounts)
Year ended Pro forma adjustments Pro forma as
February 28, 1995 ---------------------------- adjusted
Debit Credit
- -----------------------------------------------------------------------------------------------------------------
Sales $ 50,099 $ 50,099(1) $ -- $ --
Cost of sales 30,141 -- 30,141(1) --
- -----------------------------------------------------------------------------------------------------------------
Gross profit on sales 19,958 50,099 30,141 --
Selling, general and administrative expenses 15,600 -- 14,371(1) 1,229
- -----------------------------------------------------------------------------------------------------------------
Operating income (loss) 4,358 50,099 44,512 (1,229)
Other (expenses) income:
Interest expense (9,772) -- 325(1) (9,170)
277(2)
Interest income -- -- 112(3) 112
Other income, net 18 17(1) -- 1
- -----------------------------------------------------------------------------------------------------------------
Loss from continuing operations $ (5,396) $ 50,116 $45,226 $(10,286)
=================================================================================================================
Loss from continuing operations per common share $ (.17) $ (.32)
=================================================================================================================
Weighted average common shares outstanding 31,690 31,690
=================================================================================================================
F-6
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The Arlen Corporation
Notes to Unaudited Pro Forma
Consolidated Statements of Operations
1. Discontinuation of the operations for subsidiaries disposed of in
February 1996 assuming they had been sold as of March 1, 1994.
2. Represents savings of interest expense (of $277,000 for the year ended
February 28, 1995 and $208,000 for the nine months ended November 30,
1995) on $3,465,000 reduction in amounts due to related parties
pursuant to the involuntary sale of subsidiaries in February 1996.
3. Represents imputed interest income of $112,000 for the year ended
February 28, 1995 and $38,000 for the nine months ended November 30,
1995 on the $2,000,000 note receivable pursuant to the involuntary sale
of subsidiaries in February 1996.
F-7