SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
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): August 25, 1998
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TECHNOLOGY FLAVORS & FRAGRANCES, INC.
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(Exact name of Registrant as specified in its charter)
Delaware
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(State or other jurisdiction of incorporation)
0-26682 11-3199437
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(Commission File Number) (I.R.S. Employer Identification No.)
10 Edison Street East, Amityville, New York 11701
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(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code: (516) 842-7600
Not applicable
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(Former name or former address, if changed since last report.)
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Item 7. Financial Statements, Pro Forma Financial Information and Exhibits.
In connection with the sale by Technology Flavors & Fragrances, Inc. (the
"Company") of substantially all of the assets and certain liabilities relating
to its Seasoning Division (the "Division") to Mane-Seafla, Inc. (the
"Purchaser"), a subsidiary of Mane USA, Inc., on August 25, 1998, the Company's
Current Report on Form 8-K, filed on September 9, 1998, is hereby amended to
include the following pro forma financial information which was previously
omitted from such Current Report on Form 8-K.
(b) Pro Forma Financial Information
The following unaudited pro forma consolidated balance sheet of the
Company as of June 30, 1998 and consolidated statements of operations of the
Company for the year ended December 31, 1997 and for the six months ended June
30, 1998 have been prepared by adjusting the Company's audited consolidated
financial statements contained in the Company's Form 10-KSB for the year ended
December 31, 1997 (the "Form 10-KSB") and the unaudited consolidated financial
statements in the Company's Form 10-QSB for the six month period ended June 30,
1998 (the "Form 10-QSB") to reflect the sale of the Division on August 25, 1998,
as if such transaction had occurred as of June 30, 1998 for the pro forma
consolidated balance sheet and as of January 1, 1997 for the pro forma
consolidated statements of operations. Such pro forma adjustments are described
in the accompanying notes to the pro forma consolidated balance sheet and
statements of operations, which should be read in conjunction with such
statements. Such pro forma consolidated financial statements should also be read
in conjunction with the Company's audited consolidated financial statements
appearing in the Form 10-KSB and the Company's unaudited condensed consolidated
financial statements appearing in the Form 10-QSB. The pro forma consolidated
financial statements do not purport to be indicative of the actual financial
position or results of operations of the Company had the sale of the Division
actually been consummated on June 30, 1998 and January 1, 1997, respectively, or
of the future financial position or results of operations of the Company.
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TECHNOLOGY FLAVORS & FRAGRANCES, INC.
PRO FORMA CONSOLIDATED BALANCE SHEET
June 30, 1998
(in U.S. Dollars) (Unaudited)
<TABLE>
<CAPTION>
Pro Forma
ASSETS As Reported Adjustments Pro Forma
<S> <C> <C> <C>
Current assets:
Cash and cash equivalents $ 407,394 $ (50,000)(a) $ 357,394
Receivables, net 3,816,107 (620,768)(a) 3,195,339
Inventories 3,648,193 (465,786)(a) 3,182,407
Prepaid expenses and other current assets 86,713 (20,842)(a) 65,871
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Total current assets 7,958,407 (1,157,396) 6,801,011
Fixed assets, net 1,154,326 (506,569)(a) 647,757
Intangible assets, net 5,237,759 (2,319,827)(a) 2,917,932
Other assets 263,842 (2,000)(a) 383,175
275,000 (c)
(153,667)(d)
Notes receivable from related parties 271,165 -- 271,165
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Total assets $ 14,885,499 $ (3,864,459) $ 11,021,040
============ ============ ============
LIABILITIES
Current liabilities:
Accounts payable $ 2,343,281 $ (538,420)(a) $ 1,804,861
Accrued expenses 479,467 (165,995)(a) 313,472
Current portion of long-term debt 182,210 (150,000)(b) 32,210
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Total current liabilities 3,004,958 (854,415) 2,150,543
Long-term debt 6,659,992 (3,679,000)(b) 2,092,973
(888,019)(a)
Deferred credits 40,547 275,000(c) 315,547
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9,705,497 (5,146,434) 4,559,063
STOCKHOLDERS' EQUITY
Common stock, $.01 par value,
issued 12,374,623 shares 123,746 -- 123,746
Paid-in capital 10,138,161 -- 10,138,161
Accumulated deficit (4,886,126) 1,086,196(e) (3,799,930)
Unearned compensation arising from stock awards (195,779) 195,779(d) --
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Total stockholders' equity 5,180,002 1,281,975 6,461,977
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Total liabilities and stockholders' equity $ 14,885,499 $ (3,864,459) $ 11,021,040
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</TABLE>
See Accompanying Notes.
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TECHNOLOGY FLAVORS & FRAGRANCES, INC.
NOTES TO PRO FORMA CONSOLIDATED BALANCE SHEET
June 30, 1998
(a) Reflects the sale of the Division's assets to and the assumption of
certain Division liabilities by the Purchaser for $5,500,000 in cash less
$1,003,454 in principal and interest assumed by the Purchaser which was
owed under a promissory note to a former director and executive officer of
the Company.
(b) Reflects the reduction of the Company's bank term loan and revolving
credit facility from the net cash proceeds of $3,829,000, after deducting
closing costs and proceeds placed in escrow to secure certain
indemnification obligations of the Company to the Purchaser (the
"Escrow").
(c) Reflects the Escrow.
(d) Reflects the write-off of deferred charges and unearned compensation
arising from stock awards associated with the sale of the Division.
(e) Reflects the net gain on the sale of the Division.
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TECHNOLOGY FLAVORS & FRAGRANCES, INC.
PRO FORMA CONSOLIDATED STATEMENT OF OPERATIONS
For the Year Ended December 31, 1997
(in US Dollars)
As Pro Forma
Reported Adjustments Pro Forma
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Net sales $ 23,684,307 $ (5,661,959)(a) $ 18,022,348
Cost of sales 14,541,681 (3,527,792)(a) 11,013,889
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Gross profit 9,142,626 (2,134,167) 7,008,459
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Operating expenses:
Selling 3,614,635 (672,870)(a) 2,941,765
General and administrative 2,553,959 (595,511)(a) 1,958,448
Research and development 1,928,941 (325,396)(a) 1,603,545
Amortization expense 980,688 (414,445)(a) 566,243
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Total operating expenses 9,078,223 (2,008,222) 7,070,001
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Income (loss) from operations 64,403 (125,945) (61,542)
Interest expense, net (703,721) 472,800(b) (230,921)
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Loss before provision for
income taxes (639,318) 346,855 (292,463)
Provision for income taxes (8,840) -- (8,840)
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Net loss $ (648,158) $ 346,855 $ (301,303)
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TECHNOLOGY FLAVORS & FRAGRANCES, INC.
PRO FORMA CONSOLIDATED STATEMENT OF OPERATIONS
For the Six Months Ended June 30, 1998
(in U.S. Dollars) (Unaudited)
As Pro Forma
Reported Adjustments Pro Forma
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Net sales $ 9,887,150 $(2,697,313)(a) $ 7,189,837
Cost of sales 5,853,714 (1,690,163)(a) 4,163,551
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Gross profit 4,033,436 (1,007,150) 3,026,286
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Operating expenses:
Selling 1,606,912 (275,706)(a) 1,331,206
General and administrative 1,211,926 (288,034)(a) 923,892
Research and development 892,691 (142,939)(a) 749,752
Amortization expense 446,905 (182,196)(a) 264,709
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Total operating expenses 4,158,434 (888,875) 3,269,559
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Loss from operations (124,998) (118,275) (243,273)
Interest expense, net (281,620) 218,300(b) (63,320)
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Loss before provision for
income taxes (406,618) 100,025 (306,593)
Provision for income taxes (3,460) -- (3,460)
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Net loss $ (410,078) $ 100,025 $ (310,053)
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See Accompanying Notes.
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TECHNOLOGY FLAVORS & FRAGRANCES, INC.
NOTES TO PRO FORMA CONSOLIDATED STATEMENTS OF OPERATIONS For the
Year Ended December 31, 1997 and Six Months Ended June 30, 1998
(a) Reflects the elimination of the sales, cost of sales, selling, general and
administrative, research and development and amortization expense relating
to the Division. The general and administrative expenses reflect the
portion of the Company's total general and administrative expenses
attributable to the operating results associated with the Division as
determined by management of the Company. Such amounts consist of: travel
and entertainment, supplies and a portion of general corporate overhead
(i.e. accounting, purchasing and management information systems, etc.)
estimated to be attributable to the operations of the Division.
(b) Reflects a reduction in interest expense relating to the debt assumed by
the Purchaser and the reduction of the Company's bank debt from the net
proceeds of the sale of the Division (see adjustments (a) and (b) to the
Pro Forma Condensed Balance Sheet).
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SIGNATURES
Pursuant to the requirements of the Securities and Exchange Act of 1934,
the Registrant has duly caused this report to be signed on its behalf by the
undersigned hereunto duly authorized.
TECHNOLOGY FLAVORS & FRAGRANCES, INC.
Date: November 5, 1998 By: /s/ Joseph A. Gemmo
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Joseph A. Gemmo
Vice President and Chief Financial Officer
(Principal Financial Officer and Officer
Duly Authorized to Sign on Behalf of
Registrant)
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