UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K/A
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the
Securities Exchange Act of 1934
Date of Report (Date of earliest event reported) May 30, 1997
-------------------------------------------------------------
BACOU USA, INC.
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(Exact name of registrant as specified in its charter)
DELAWARE
----------------------------------------------
(State or other jurisdiction of incorporation)
0-28040 05-0470688
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(Commission File Number) (IRS Employer Identification No.)
10 Thurber Boulevard, Smithfield, RI 02917
---------------------------------------------------
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code: 401-233-0333
------------
<PAGE>
Item 7. Financial Statements and Exhibits.
----------------------------------
(a) Financial Statements of Businesses Acquired
Consolidated Balance Sheet of Comasec Holdings, Inc. and
subsidiary ("Comasec") at December 31, 1996
Consolidated Statement of Income of Comasec for the year
ended December 31, 1996
Consolidated Statement of Shareholder's Equity of Comasec for the year
ended December 31, 1996
Consolidated Statement of Cash Flows of Comasec for the year ended
December 31, 1996
Consolidated Condensed Balance Sheet of Comasec at March 31, 1997
(Unaudited)
Consoldated Condensed Statements of Income of Comasec for the three
months ended March 31, 1997 and 1996 (Unaudited)
Consoldated Condensed Statements of Cash Flows of Comasec for the three
months ended March 31, 1997 and 1996 (Unaudited)
(b) Pro Forma Financial Information
Unaudited Pro Forma Consolidated Statement of Income of Bacou USA, Inc.
("Bacou USA") and Comasec for the year ended December 31, 1996
Unaudited Pro Forma Consolidated Balance Sheet of Bacou USA and Comasec
at March 31, 1997
Unaudited Pro Forma Consolidated Statement of Income of Bacou USA and
Comasec for the three months ended March 31, 1997
(c) Exhibits
Item 601
--------
Exhibit Exhibit Title
------------------ -------------
Exhibit 23 Consent of Price Waterhouse LLP
Exhibit 99(a) Unaudited Financial Statements of Survivair,
Inc. for 1996 and 1995 (incorporated by
reference to Exhibit 99(a) of the Form 8-K
filed May 12, 1997)
Exhibit 99(b) Report and Consolidated Audited Financial
Statements of Comasec Holdings, Inc.
("Comasec") and subsidary as of December 31,
1996; as described in Item 7(a) above
Exhibit 99(c) Unaudited Consolidated Condensed Financial
Statements of Comasec as of March 31, 1997
and for the three months ended March 31, 1997
and 1996 as described in Item 7(a) above
Exhibit 99(d) Unaudited Pro Forma Consolidated Statements
of Income for Bacou USA, Inc. ("Bacou") and
Comasec for the year ended December 31, 1996
as described in Item 7(b) above
Exhibit 99(e) Unaudited Pro Forma Consolidated Balance
Sheets of Bacou and Comasec as of March 31,
1997 as described in Item 7(b) above
Exhibit 99(f) Unaudited Pro Forma Consolidated Statements
of Income of Bacou and Comasec for the three
months ended March 31, 1997 as described in
Item 7(b) above
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, as
amended, the Registrant has duly caused this amended report to be signed on its
behalf by the undersigned hereunto duly authorized.
BACOU USA, INC.
Registrant
By: /s/ Philip B. Barr
_________________________________
Philip B. Barr
Executive Vice President and
Chief Financial Officer
Dated: August 14, 1997
EXHIBIT 23
CONSENT OF INDEPENDENT ACCOUNTANTS
----------------------------------
We hereby consent to the incorporation by reference in the Registration
Statement on Form S-8 (No. 333-09251) of Bacou USA, Inc. of our report dated
June 17, 1997, relating to the consolidated financial statements of Comasec
Holdings, Inc., and subsidiary which appears in the Current Report on Form 8-K/A
of Bacou USA, Inc. dated August 14, 1997.
/s/Price Waterhouse LLP
- -----------------------
Price Waterhouse LLP
Costa Mesa, California
August 13, 1997
<PAGE>
Comasec Holdings, Inc.
and subsidiary
Report and Consolidated Financial Statements
December 31, 1996
Exhibit 99(b)
Report of Independent Accountants
To the Board of Directors and Shareholder
of Comasec Holdings, Inc.
In our opinion, the accompanying consolidated balance sheet and the related
consolidated statements of income, of shareholder's equity and of cash flows
present fairly in all material respects, the financial position of Comasec
Holdings, Inc. and its subsidiary at December 31, 1996, and the results of their
operations and their cash flows for the year then ended in conformity with
generally accepted accounting principles. These financial statements are the
responsibility of the Company's management; our responsibility is to express an
opinion on these financial statements based on our audit. We conducted our audit
of these statements in accordance with generally accepted auditing standards
which require that we plan and perform the audit to obtain reasonable assurance
about whether the financial statements are free of material misstatement. An
audit includes examining, on a test basis, evidence supporting the amounts and
disclosures in the financial statements, assessing the accounting principles
used and significant estimates made by management, and evaluating the overall
financial statement presentation. We believe that our audit provides a
reasonable basis for the opinion expressed above.
/s/Price Waterhouse LLP
- -----------------------
Price Waterhouse LLP
Costa Mesa, California
June 17, 1997
<PAGE>
Comasec Holdings, Inc. and subsidiary
Consolidated Balance Sheet
<TABLE>
<CAPTION>
Assets Notes December 31, 1996
<S> <C> <C>
Current Assets:
Cash and cash equivalents $ 765,066
Accounts receivable, net of allowance
for doubtful accounts of $69,000 2,911,913
Inventories 2 & 3 3,418,036
Amounts due from affiliates 9 2,946,910
Deferred income taxes 2 & 7 644,984
Prepaid expenses and other receivables 264,447
----------------
Total current assets 10,951,356
Property, plant and equipment, net 2 & 4 2,575,120
Intangible assets, net of accumulated
amortization of $295,060 2 44,738
----------------
$ 13,571,214
================
Liabilities and Shareholder's Equity
Current Liabilities:
Accounts payable and
accrued expenses 5 $ 2,370,573
Income taxes payable 2 & 7 657,508
Amounts due to affiliates 9 119,221
Noncurrent liabilities:
Deferred income taxes 2 & 7 48,477
---------------
$ 3,195,779
---------------
Commitments and Contingencies 8, 9 & 10
Shareholder's equity:
Common Stock, Class A, no par value; 20,000
shares authorized, 10,000 shares issued
and outstanding 1,009,018
Common Stock, Class B, no par value; 5,000
shares authorized, 1,250 shares issued and
outstanding 60,750
Additional paid-in capital 6,540,199
Retained earnings 2,765,468
---------------
Total shareholder's equity 10,375,435
---------------
$ 13,571,214
===============
The accompanying notes are an integral part of these consolidated financial
statements.
</TABLE>
<PAGE>
Comasec Holdings, Inc. and subsidiary
Consolidated Statement of Income
<TABLE>
<CAPTION>
For the Year Ended
Notes December 31, 1996
<S> <C> <C>
Net Sales $ 30,339,247
Cost of products sold 2 19,834,784
Gross Profit 10,504,463
Other expenses (income):
General and administrative expenses 3,119,505
Selling expenses 4,457,632
Other expenses 8 & 9 326,142
Interest income, net 9 (53,661)
-------------
Income before provision for income taxes 2,654,845
Provision for income taxes 2 & 7 1,178,635
-------------
Net income $ 1,476,210
=============
</TABLE>
The accompanying notes are an integral part of these consolidated financial
statements.
<PAGE>
<TABLE>
<CAPTION>
Comasec Holdings, Inc. and subsidiary
Consolidated Statement of Shareholder's Equity
Total
Common Stock (Class A) Common Stock (Class B) Additional Retained Shareholder's
Shares Amount Shares Amount Paid-In Capital Earnings Equity
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Balance at January 1, 1996 10,000 $ 1,009,018 1,250 $ 60,750 $6,540,199 $ 1,289,258 $ 8,899,225
------ ----------- ----- --------- ---------- ----------- -----------
Net Income ------ ----------- ----- --------- ---------- 1,476,210 1,476,210
----------- -----------
Balance at December 31, 1996 10,000 $ 1,009,018 1,250 $ 60,750 $6,540,199 $ 2,765,468 $10,375,435
====== =========== ===== ========= ========== =========== ===========
The accompanying notes are an integral part of these consoldiated financial
statements
</TABLE>
<PAGE>
Comasec Holdings, Inc. and subsidiary
Consolidated Statement of Cash Flows
For the year ended
December 31, 1996
Cash flows from operating activities:
Net income $ 1,476,210
Adjustments to reconcile net income to net
cash provided by operating activities:
Depreciation 824,033
Amortization 32,407
Allowance for doubtful accounts 34,000
Loss on disposal of assets 2,853
Deferred income taxes 254,871
Changes in operating assets and liabilities:
Accounts receivable 100,992
Inventories 856,880
Prepaid expenses and other receivables 137,762
Accounts payable and accrued expenses (63,338)
Income taxes payable 303,012
-----------
Net cash provided by operating activities 3,959,682
--------------
Cash flows from investing activities:
Net cash used in investing activities
capital expenditures (1,392,794)
--------------
Cash flows from financing activities:
Amounts due from affiliates (1,547,090)
Borrowings on revolving line of credit 2,100,000
Repayments on revolving line of credit (2,900,000)
Amounts due to affiliates 109,836
-----------
Net cash used in financing activities (2,237,254)
--------------
Net increase in cash and cash equivalents 329,634
Cash and cash equivalents at beginning of year 435,432
--------------
Cash and cash equivalents at end of year $ 765,066
==============
The accompanying notes are an integral part of these consolidated financial
statements.
<PAGE>
Comasec Holdings, Inc. and subsidiary Notes to the Consolidated Financial
Statements
1. Basis of presentation and description of business
The accompanying financial statements only include the accounts of
Comasec Holdings, Inc. and its wholly-owned subsidiary, Survivair,
Inc. (collectively the "Company"), acquired by Pro-Tech Respirators,
Inc., a wholly-owned subsidiary of Bacou USA, Inc., on May 30, 1997.
All intercompany transactions have been eliminated. Prior to May 30,
1997, Comasec Holdings, Inc. was a wholly-owned subsidiary of Comasec
International, S.A.
Also prior to May 30, 1997, Comasec Holdings, Inc. had two other
wholly-owned subsidiaries which were not acquired by Pro-Tech
Respirators, Inc. Accordingly, accounts related to interests in such
subsidiaries have not been included in the accompanying financial
statements.
The Company is a manufacturer of self contained breathing apparatus,
air purifying respirators, replacement cartridges and gas detection
equipment, with customers primarily in the United States of America.
2. Summary of significant accounting policies
USE OF ESTIMATES IN THE PREPARATION OF FINANCIAL STATEMENTS
The preparation of financial statements in conformity with generally
accepted accounting principles requires management to make estimates
and assumptions that affect the reported amounts of assets and
liabilities and disclosure of contingent assets and liabilities at the
date of the financial statements and the reported amounts of revenues
and expenses during the reporting period.
CASH AND CASH EQUIVALENT
For purposes of the statement of cash flows, the Company considers all
highly liquid instruments purchased with an original maturity of less
than three months to be cash equivalents.
CONCENTRATION OF CREDIT RISK
The Company is subject to a concentration of credit risk consisting of
its trade accounts receivables. The Company performs ongoing credit
evaluations of its customers and generally does not require
collateral. The Company evaluates potential losses for uncollectible
accounts and such losses have historically been immaterial and within
management's expectations.
INVENTORIES
Inventories represent direct labor, materials and overhead costs
incurred for products not yet delivered and are recorded at the lower
of cost or market, cost being determined on a first-in, first-out
(FIFO) basis.
PROPERTY, PLANT AND EQUIPMENT
Property, plant and equipment are stated at cost. Depreciation is
calculated on a straight-line basis over the estimated useful lives of
the assets, typically ranging from three to nine years. Expenditures
for maintenance, repairs and minor renewals are charged directly to
expense as incurred. When property and equipment are sold or otherwise
disposed of, the related cost and accumulated depreciation are removed
from the accounts and the resulting gains or losses are reported in
the results of operations.
INTANGIBLE ASSETS
Intangible assets include the cost in excess of the fair value of
assets purchased and patents. Intangible assets are amortized on a
straight-line basis over their estimated useful lives, ranging from
eleven to twenty years.
REVENUE RECOGNITION
Revenues are recognized when products are shipped.
RESEARCH AND DEVELOPMENT COSTS
Cost of products sold includes research and development costs of
$1,540,261.
FAIR VALUE OF FINANCIAL INSTRUMENTS
The Company values financial instruments as required by Statement of
Financial Accounting Standards No. 107, "Disclosures about Fair Values
of Financial Instruments" (SFAS 107). The carrying amounts of cash and
cash equivalents, accounts and other receivables, accounts payable,
accrued expenses and debt approximate fair value. For certain balances
due to or from related parties a reasonable estimate of fair value
could not be made without incurring excessive costs. Accordingly, all
balances due to or from related parties are carried at their original
cost.
INCOME TAXES
The Company accounts for income taxes in accordance with the provision
of Statement of Financial Accounting Standards No. 109 (SFAS 109).
Under the liability method specified by SFAS 109, the deferred tax
assets and liabilities are measured each year based on the difference
between the financial statement and tax basis of assets and
liabilities at the applicable enacted tax rates. The deferred tax
provision is the result of changes in the deferred tax assets and
liabilities.
At December 31, 1996, the Company was a member of a group that filed
consolidated Federal income tax returns. Current and deferred income
taxes of the Company have been allocated as if the Company were a
separate taxpayer.
Subsequent to December 31, 1996, the IRS completed its examination of
the consolidated Federal income tax returns of Comasec Holdings, Inc.
for the years ended December 31, 1991 through 1995. The ultimate
resolution of such examination did not have a material adverse impact
on the Company's financial condition or results of operations.
STATEMENT OF CASH FLOWS
Supplemental disclosures of cash flow information:
Cash paid during the year for:
Income taxes $ 773,394
Interest 23,811
3. Inventories
Inventories comprised the following at December 31, 1996:
Raw materials $ 2,260,245
Work-in-process 538,849
Finished goods 1,033,507
-----------
3,832,601
Less reserves (414, 565)
------------
$ 3,418,036
============
4. Property, plant and equipment, net
Property, plant and equipment comprised the following at December 31,
1996:
Leasehold improvements $ 1,141,392
Equipment 7,690,542
Furniture, fixtures and
office equipment 1,761,300
-----------
10,593,234
Less accumulated depreciation
and amortization
(8,254,576)
-----------
2,338,658
Construction-in-process 236,462
-----------
$ 2,575,120
===========
5. Accounts payable and accrued expenses
Accounts payable and accrued expenses comprised the following at
December 31, 1996:
Trade accounts payable $ 777,400
Vacation accrual 235,171
Pension plan contributions 235,041
Warranty costs 222,306
Product liability costs 250,000
Other 650,655
-----------
$ 2,370, 573
===========
6. Note payable
At December 31, 1996, Survivair, Inc. had a credit agreement with a
bank, effective May 13, 1991, which provided for a $5,000,000
revolving line of credit with an expiration date of June 14, 1999.
This revolving line of credit accrued interest on each borrowing at
the Adjusted Eurodollar Rate, as specified in the credit agreement,
plus 1.375% or the prime rate as specified in the credit agreement, at
the option of Survivair, Inc. The credit agreement was collateralized
by all the assets of Survivair, Inc. Under the provisions of the
credit agreement, Survivair, Inc. had to comply with certain
restrictive covenants, including maintenance of certain financial
ratios.
No amounts were outstanding under this agreement at December 31, 1996.
Subsequent to December 31, 1996, this agreement was terminated.
7. Income taxes
The income tax provision comprises the following for the year ended
December 31, 1996:
Current:
Federal $ 739,762
State 184,002
---------
923,764
---------
Deferred:
Federal 158,697
State 96,174
---------
254,871
---------
$ 1,178,635
==========
The provision for income taxes for the year ended December 31, 1996
differs from the amount computed by applying the Federal income tax
rate to income before provision for income taxes as follows:
Expected taxes at Federal statutory rate 34%
State income taxes, net of Federal benefit 7%
Other 3%
---------
44%
=========
The primary components of deferred income tax assets and liabilities
in the accompanying consolidated balance sheet at December 31, 1996
are as follows:
Deferred income tax assets (liabilities):
Allowance for doubtful accounts $ 27,807
Inventory 220,683
Accrued expenses 396,494
--------
644,984
Depreciation (48,477)
$ 596,507
=========
8. Commitments
The Company leases its manufacturing and office facilities and
vehicles under noncancellable operating leases with expiration dates
through February 2005.
Future minimum lease payments under noncancellable operating leases
are as follows:
Year ending December 31,
1997 $ 302,711
1998 436,946
1999 410,412
2000 447,898
2001 447,898
Thereafter 1,444,470
-----------
$ 3,490,335
===========
For the year ended December 31, 1996 the Company incurred rent expense
of $597,549.
During 1996, the Company made a $150,000 payment to a supplier to
cancel a purchase commitment. Such amount is included in other
expenses in the accompanying Consolidated Statement of Income.
9. Amounts due from (to) affiliates and related party transactions
Amounts due from (to) affiliates comprised the following at December
31, 1996:
Comasec Safety $ 938,810
Interspiro AB 907,310
Interspiro Inc. 599,980
Officer 351,365
Comasec International, S.A. 91,053
Interspiro Ltd. 51,815
Comasec S.A. 4,994
Fenzy, S.A. 1,583
---------
Total amounts due from affiliates 2,946,910
Comasec International, S.A. (119,221)
----------
Net amounts due from (to) affiliates $ 2,827,689
===========
Amounts due from (to) affiliates primarily comprise balances relating
to various purchases, sales and loans between the Company and
affiliates.
During 1996 the Company sold inventory to related party entities
totaling $646,272 and purchased inventory from Fenzy, S.A. totaling
$58,402. Additionally, the Company earned interest income of $74,971
during 1996 on loans to affiliates.
Comasec International, S.A. (CISA) provided management services to the
Company for a fee. The management fee amounts have been included as a
component of other expenses in the accompanying Consolidated Statement
of Income and totalled $74,319 for the year ended December 31, 1996.
At December 31, 1996, Survivair, Inc. had guaranteed $1,000,000 of
borrowings available to a related party. Subsequent to December 31,
1996, the guarantee was terminated. No losses were incurred as a
result of such guarantee.
10. Contingencies
The Company is a defendant in legal actions arising during the normal
course of business. The litigation process is inherently uncertain and
it is possible that the resolution of these disputes and lawsuits may
adversely effect the Company. The Company maintains related insurance
coverage and has accrued $250,000 for estimated costs of resolving
such matters which is included in accounts payable and accrued
expenses in the accompanying consolidated balance sheet. Management
believes that the ultimate resolution of such matters will not have a
material adverse impact on the Company's financial position, results
of operations or cash flows.
11. Employee benefit plans
During 1996 the Company maintained a 401(k) savings and defined
contribution pension plan covering substantially all employees of the
Company who have attained the age of 21 and have at least one year of
service with the Company. The Company contributed $435,136 for 1996,
including discretionary contributions of $250,000, to this pension
plan.
EXHIBIT 99(c)
Comasec Holdings, Inc. and subsidiary
Consolidated Condensed Balance Sheet
<TABLE>
<CAPTION>
(Unaudited)
Assets March 31, 1997
<S> <C>
Current Assets:
Cash and cash equivalents $ 351,935
Accounts receivable, net of allowance
for doubtful accounts of $20,000 3,143,700
Inventories 4,589,015
Amounts due from affiliates 2,859,903
Deferred income taxes 665,660
Prepaid expenses and other receivables 651,206
-------------
Total current assets 12,261,419
Property, plant and equipment, net 2,684,109
Intangible asset, net 37,360
-------------
$ 14,982,888
=============
Liabilities and Shareholder's Equity
Current Liabilities:
Accounts payable and
accrued expenses $ 3,122,357
Income taxes payable 938,466
-------------
Total Current Liabilities $ 4,060,823
Noncurrent liabilities:
Deferred income taxes $ 67,078
-------------
$ 4,127,901
-------------
Commitments and Contingencies
Shareholder's equity:
Common Stock, Class A, no par value; 20,000
shares authorized, 10,000 shares issued
and outstanding 1,009,018
Common Stock, Class B, no par value; 5,000
shares authorized, 1,250 shares issued and
outstanding 60,750
Additional paid-in capital 6,540,199
Retained earnings 3,245,020
--------------
Total shareholder's equity 10,854,987
-------------
$ 14,982,888
=============
The accompanying notes are an integral part of these consolidated condensed
financial statements.
</TABLE>
<PAGE>
Comasec Holdings, Inc. and subsidiary
Consolidated Consensed Statement of Income
<TABLE>
<CAPTION>
(Unaudited)
Three Months
Ended March 31
1997 1996
<S> <C> <C>
Net Sales $ 7,341,013 $ 7,678,154
Cost of products sold 4,418,315 4,756,284
Gross Profit 2,922,698 2,921,870
Other expenses (income):
General and administrative expenses 838,856 1,001,464
Selling expenses 1,128,624 1,188,900
Other expenses 216,153 121,948
Interest income, net (39,704) -
----------- ---------
Income before provision for income taxes 778,769 609,558
Provision for income taxes 299,217 247,543
---------- -----------
Net income $ 479,552 $ 362,015
========== ==========
</TABLE>
The accompanying notes are an integral part of these consolidated condensed
financial statements.
<PAGE>
Comasec Holdings, Inc. and subsidiary
Consolidated Condensed Statement of Cash Flows
(Unaudited)
Three Months
Ended March 31,
1997 1996
Net cash provided by (used in)
operating activities $ (106,328) $ 300,168
------------- ------------
Cash flows from investing activities:
Net cash used in investing activities -
capital expenditures (275,189) (605,910)
------------- ------------
Cash flows from financing activities:
Amounts due from affiliates 87,607 441,907
Repayments on revolving line of credit - (600,000)
Amounts due to affiliates (119,221) 75,569
----------- ------------
Net cash used in financing activities (31,614) (82,524)
----------- ------------
Net decrease in cash and cash equivalents (413,131) (388,266)
Cash and cash equivalents at beginning of period 765,066 435,432
----------- ------------
Cash and cash equivalents at end of period $ 351,935 $ 47,166
=========== ============
The accompanying notes are an integral part of these consolidated condensed
financial statements.
<PAGE>
Comasec Holdings, Inc. and subsidiary Notes to the Unaudited Consolidated
Condensed Financial Statements
1. Basis of presentation and description of business
The accompanying financial statements have been prepared pursuant to the rules
and regulations of the Securities and Exchange Commission for interim financial
information, including Rule 10-01 of Regulation S-X. Accordingly, certain
information and footnote disclosure normally required in complete financial
statements prepared in accordance with generally accepted accounting principles
have been condensed or omitted. In the opinion of management those financial
statements include all adjustments necessary for a fair presentation of the
results of operations for the interim periods presented. Results of operations
for interim periods may not be indicative of results expressed for a full year.
The accompanying financial statements only include the accounts of Comasec
Holdings, Inc. and its wholly-owned subsidiary, Survivair, Inc. (collectively
the "Company"), acquired by Pro-Tech Respirators, Inc., a wholly-owned
subsidiary of Bacou USA, Inc., on May 30, 1997. All intercompany transactions
have been eliminated. Prior to May 30, 1997, Comasec Holdings, Inc. was a
wholly-owned subsidiary of Comasec International, S.A.
Also prior to May 30, 1997, Comasec Holdings, Inc. had two other wholly-owned
subsidiaries which were not acquired by Pro-Tech Respirators, Inc. Accordingly,
accounts related to interests in such subsidiaries have not been included in the
accompanying financial statements.
The Company is a manufacturer of self contained breathing apparatus, air
purifying respirators, replacement cartridges and gas detection equipment, with
customers primarily in the United States of America.
2. Inventories
Inventories consist of the following at March 31, 1997:
Raw material and supplies $ 2,396,056
Work-in-process 998,089
Finished goods 1,194,870
-----------
$ 4,589,015
EXHIBIT 99(d)
UNAUDITED PRO FORMA CONSOLIDATED FINANCIAL STATEMENTS
On May 30, 1997 Bacou USA, Inc. ("Bacou USA") completed its acquisition of
Comasec Holdings, Inc. ("Comasec") and its wholly-owned subsidiary Survivair,
Inc. ("Survivair"), a manufacturer of respiratory protection products. The
acquisition was effected through merger and redemption transactions which have
been accounted for as a purchase of all of the outstanding common stock of
Comasec for 27.4 million in cash, subject to certain closing adjustments. For
purposes of this filing these transactions are collectively referred to as the
"Acquisition" and amounts paid to effect the Acquisition are referred to as the
"Acquisition Price". The following Unaudited Pro Forma Balance Sheet as of March
31, 1997, and the Unaudited Pro Forma Statements of Income for the year ended
December 31, 1996 and the three months ended March 31, 1997, give effect to the
Acquisition as if it had occurred on January 1, 1996.
The unaudited pro forma information is based on the historical consolidated
financial statements of Bacou USA and its consolidated subsidiaries, Comasec and
Survivair under the assumptions and adjustments set forth in the accompanying
Notes to the Unaudited Pro Forma Consolidated Financial Statements. The pro
forma financial statements do not give effect to anticipated cost savings, if
any, in connection with the Acquisition.
The information shown below should be read in conjunction with the
consolidated historical financial statements of Bacou USA, Comasec and
Survivair, including the respective notes thereto. The unaudited pro forma data
is presented for comparative purposes only and is not necessarily indicative of
the combined financial position or results of operations in the future or of the
combined financial position or results of operations which would have been
realized had the Acquisition been consummated during the periods or as of the
dates for which the unaudited pro forma data is presented.
The following nonrecurring charges will be included in the consolidated
statement of income of Bacou USA during the three months subsequent to May 30,
1997. These costs were not considered in the accompanying pro forma consolidated
statements of income for the periods ended December 31, 1996 or March 31,
1997,(i) purchased in process research and development costs totaling $1.3
million, and, (ii) charges to cost of sales relating to the step-up of acquired
inventories to fair value totaling $1.3 million ($.8 million, net of tax). No
tax benefit will be recorded in Bacou USA's consolidated financial statements
for the charge relating to the purchased in process research and development
costs.
<PAGE>
<TABLE>
<CAPTION>
UNAUDITED PRO FORMA CONSOLIDATED STATEMENT OF INCOME
Year Ended December 31, 1996
Comasec
Holdings, Inc.
Bacou USA and Subsidiary
Year Ended Year Ended Pro Forma Pro Forma
December 31, 1996 December 31, 1996 Adjustments Ref. As Adjusted
----------------- ----------------- ----------- ---- -----------
(in thousands, except earnings per share)
<S> <C> <C> <C> <C> <C>
Net Sales $ 109,268 $ 30,339 $ (131) 1 $ 139,476
Cost of Sales $ 47,355 $ 19,835 $ (1,649) 2,3,4 $ 65,541
--------- ---------- ----------- ----------
Gross Profit $ 61,913 $ 10,504 $ 1,518 $ 73,935
Operating Expenses:
Selling $ 17,074 $ 4,457 $ - $ 21,531
General and Administrative $ 9,176 $ 3,119 $ (141) 5,6 $ 12,154
Research and Development $ - - $ 1,540 7 $ 1,540
Amortization of Intangibles Assets $ 4,039 $ - 667 8,9 $ 4,706
--------- ---------- ----------- ----------
Total Operating Expenses $ 30,289 $ 7,576 $ 2,066 $ 39,931
--------- ---------- ----------- ----------
Operating Income $ 31,624 $ 2,928 $ (548) $ 34,004
Other Expense (Income):
Interest Expense $ 896 $ 36 $ 1,714 10,11 $ 2,646
Interest Income $ (522) $ (77) $ 77 12 (522)
Other $ (329) $ 314 $ (66) 13,14 $ (81)
--------- ---------- ----------- ----------
Other Expense (Income), Net $ 45 $ 273 $ 1,725 $ 2,043
--------- ---------- ----------- ----------
Income Before Income Taxes $ 31,579 $ 2,655 $ (2,273) $ 31,961
Income Taxes $ 12,202 $ 1,179 $ (797) 15 $ 12,584
Net Income $ 19,377 $ 1,476 $ (1,476) $ 19,377
========= ========== ============ ==========
Net Income Per Common and Common
Equivalent Share $ 1.18 $ 1.18
Weighted Average Common and Common
Equivalent Shares 16,436 16,436
</TABLE>
See Notes to Unaudited Pro Forma Consolidated Financial Statements
<PAGE>
<TABLE>
<CAPTION>
Notes to Unaudited Pro Forma Consolidated Financial Statements
Amount
Adjustments (in thousands)
----------- --------------
SALES:
- ------
<C> <C>
(1) To reclassify sales discounts from Net Other Expense to Sales. $ (131)
--------
COST OF SALES:
- --------------
(2) To reclassify research and development from Cost of Sales to a separate
category of Operating Expense. $ (1,540)
--------
(3) To reverse historical depreciation and include revised depreciation based
upon the expected useful lives and fair value of Property and Equipment acquired
in connection with the Acquisition as follows:
Remove old depreciation amount $ (614)
Add new depreciation amount Cost Useful Lives
---- ------------
Leasehold Improvements $ 566,175 11 $ 51
Machinery and Equipment $2,569,850 11 $ 234
Tooling and Molds $1,998,450 7 $ 285
--------
Net depreciation adjustment $ (44)
--------
(4) To reclassify purchase discounts from net other expense to Cost of Sales. $ (65)
Decrease in Cost of Sales --------
$ (1,649)
--------
GENERAL AND ADMINISTRATIVE EXPENSE:
- -----------------------------------
(5) To reclassify amortization expense from General and Administrative Expense
to Amortization of Intangibles. $ (32)
--------
(6) To reverse historical depreciation and include revised depreciation based
upon the expected useful lives and fair value of property and equipment acquired
in connection with the Acquisition as follows:
Remove old depreciation amount $ (209)
Add new depreciation amount Cost Useful Lives
---- ------------
Leasehold Improvements $188,725 11 $ 17
Furniture and Fixtures $184,300 9 $ 20
Computer Equipment $125,000 2 $ 63
--------
Net depreciation adjustment $ (109)
--------
Decrease in General and Administrative Expense $ (141)
--------
RESEARCH AND DEVELOPMENT EXPENSE:
- ---------------------------------
(7) To reclassify research and development expense from Cost of Sales to
Research and Development Expense. $ 1,540
--------
AMORTIZATION OF INTANGIBLES:
- ----------------------------
(8) To reclassify amortization expense from General and Administrative
to Amortization of Intangibles.
$ 32
--------
(9) To reverse historical amortization and include revised amortization based
upon the expected useful lives and fair value of intangible assets acquired in
connection with the Acquisition as follows:
Remove old amortization amount $ (32)
Add new amortization amount Cost Useful Lives
---- ------------
Goodwill $11,700,000 40 $ 287
Patents $ 1,500,000 15 $ 100
Acquired Technology $ 2,800,000 10 280
--------
Net amortization adjustment $ 635
--------
$
--------
Increase in Amortization of Intangibles $ 667
--------
Notes to Unaudited Pro Forma Consolidated Financial Statements
INTEREST EXPENSE:
- -----------------
(10) To remove interest expense expected to be eliminated as a result of the
Acquisition. $ (36)
(11) To record Interest Expense on the Acquisition price of $27,350,000 which
has been assumed to have been fully borrowed in the Unaudited Pro Forma
Consolidated Financial Statements, at a rate equal to the current borrowing rate
of Bacou USA as follows:
Indebtedness Interest Rate
------------ -------------
$ 27,350,000 6.40% $ 1,750
--------
Increase in Interest Expense $ 1,714
--------
INTEREST INCOME:
- ----------------
(12) To remove the following items of interest income:
Remove interest income earned on investments maintained at banks by Comesec
Holding, Inc. and subsidiary $ 3
Remove interest income earned on intercompany balances that have been repaid. $ 74
------
$ 77
------
NET OTHER:
- ----------
(13) To reclassify purchase discounts from net other expense to Cost of Sales. $ 65
(14) To reclassify sales discounts from Net Other Expense to Sales. $ (131)
------
Decrease in Net Other Expense $ (66)
------
INCOME TAXES:
- ------------
(15) To record the income tax effect of pro
forma adjustments at a rate of 40.0%. This rate is based upon a Federal
statutory rate equal to 35.0%, plus the effect of state and local income taxes,
also adjusted to exclude an income tax benefit on amortization of goodwill. $ 797
-------
</TABLE>
EXHIBIT 99(e)
<TABLE>
<CAPTION>
UNAUDITED PRO FORMA CONSOLIDATED BALANCE SHEET
March 31, 1997
Comasec
Holdings, Inc.
Bacou USA and Subsidiary
At At Pro Forma Pro Forma
March 31, 1997 March 31, 1997 Adjustments Ref. As Adjusted
-------------- -------------- ----------- ---- -----------
(in thousands)
Assets
------
Current Assets:
<S> <C> <C> <C> <C> <C>
Cash and Equivalents $ 2,497 $ 352 $ - $ 2,849
Accounts Receivable, net $ 13,529 $ 3,144 $ - $ 16,673
Inventories $ 17,479 $ 4,589 $ 1,327 1 $ 23,395
Amounts Due From Affiliates $ - $ 2,860 $ - $ 2,860
Deferred Income Taxes $ 762 $ 666 $ - $ 1,428
Prepaid Expense and Other $ 1,498 $ 651 $ - $ 2,149
------------ ---------- ---------- ----------
Current Assets $ 35,765 $ 12,262 $ 1,327 $ 49,354
------------ ---------- ---------- ----------
Property, Plant and Equipment, net $ 27,252 $ 2,684 $ 3,382 2 $ 33,318
Intangible Assets, net $ 46,494 $ 37 $ 16,087 3 $ 62,618
Due From Bacou S.A. $ 28,000 $ - $ (28,000) 4 $ -
------------ ---------- ---------- ----------
Total Assets $ 137,511 $ 14,983 $ (7,204) $ 145,290
============ ========== ========== ==========
</TABLE>
See Notes to Unaudited Pro Forma Consolidated Financial Statements
<PAGE>
<TABLE>
<CAPTION>
UNAUDITED PRO FORMA CONSOLIDATED BALANCE SHEET
March 31, 1997
Comasec
Holdings, Inc.
Bacou USA and Subsidiary
At At Pro Forma Pro Forma
March 31, 1997 March 31, 1997 Adjustments Ref. As Adjusted
-------------- -------------- ----------- ---- -----------
(in thousands)
Liabilities and Shareholders' Equity
- ------------------------------------
Current Liabilities:
<S> <C> <C> <C> <C> <C>
Current installments of long-term debt $ 1,000 $ - $ - $ 1,000
Accounts payable $ 3,805 $ 1,489 $ - $ 5,294
Accrued compensation and benefits $ 1,916 $ 502 $ - $ 2,418
Other accrued expenses $ 2,369 $ 882 $ - $ 3,251
Income taxes payable $ 2,698 $ 938 $ - $ 3,636
---------- --------- ---------- ----------
Current Liabilities $ 11,788 $ 3,811 $ - $ 15,599
---------- --------- ---------- ----------
Long-term debt, excluding current
installments $ 7,000 $ - $ - $ 7,000
Deferred Income Taxes $ 2,184 $ 67 $ 3,591 5 $ 5,842
Due to Comasec International S.A. $ - $ - $ 1,360 6 $ 1,360
Other Long Term Liabilities $ - $ 250 $ - $ 250
---------- --------- ----------- ----------
Total Liabilities $ 20,972 $ 4,128 $ 4,951 $ 30,051
---------- --------- ----------- ----------
Shareholder's Equity:
Preferred Stock $ - $ - $ - -
Common Stock $ 17 $ - $ - 17
Common Stock - Class A $ - $ 1,009 $ (1,009) 7 -
Common Stock - Class B $ - $ 61 $ (61) 7 -
Paid in Capital $ 66,515 $ 6,540 $ (6,540) 7 $ 66,515
Retained Earnings $ 50,007 $ 3,245 $ (4,545) 7 $ 48,707
---------- --------- ----------- ---------
Total Shareholders' Equity $ 116,539 $ 10,855 $ (12,155) $ 115,239
---------- --------- ----------- ---------
Total Liabilities and
Shareholders' Equity $ 137,511 $ 14,983 $ (7,204) $ 145,290
========== ========= =========== =========
See Notes to Unaudited Pro Forma Consolidated Financial Statements
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
Notes to Unaudited Pro Forma Consolidated Financial Statements
March 31, 1997
<S> <C> <C>
Adjustments Amount
----------- ------
INVENTORIES:
- ------------
(1) To record the increase in inventory to fair value on the date of
Acquisition. This amount will be charged to Cost of Sales over a three month
period beginning in June 1997. $ 1,327
PROPERTY, PLANT AND EQUIPMENT, NET:
- -----------------------------------
(2) To record the increase in value of Property and Equipment at the date of
Acquisition based on fair market appraisals, as follows:
Description
-----------
Leasehold Improvements $ 755
Machinery and Equipment $ 2,570
Tooling and Molds $ 1,998
Furniture and Fixtures $ 184
Computer Equipment $ 125
Construction in Progress $ 440
--------
Fair Market Value at Acquisition $ 6,072
Net Book Value Prior to Acquisition $ 2,690
--------
Net Increase in Value $ 3,382
---------
INTANGIBLE ASSETS, NET:
- -----------------------
(3) To record the increase in value of Intangible Assets at the date of
Acquisition based on fair market appraisals, as follows:
Description
-----------
Goodwill $ 11,824
Patents $ 1,500
Acquired Technology $ 2,800
---------
Fair Market Value at Acquisition $ 16,124
Net Book Value Prior to Acquisition $ 37
Net Increase in Value --------- ---------
$ 16,087
DUE FROM BACOU S.A.:
- ---------------------------------
(4) To record the partial payment of the Acquisition Price by the assignment of
loans receivable by Bacou USA, Inc. from Bacou S.A. The estimated total
Acquisition Price is equal to $29,360 and therefore $1,360 remains as an
obligation owed to Comasec Internatioanl S.A. (See Note 6) $ 28,000
DEFERRED INCOME TAXES:
- ----------------------
(5) To record the increase in Deferred Income Taxes on the increase in tangible
and intangible assets at a combined federal and state income tax rate of 40%.
Inventory $ 531
Intangible Assets, except goodwill $ 1,707
Tangible Assets $ 1,353
-----------------
Increase in Deferred Income Taxes $ 3,591
-----------------
DUE TO COMASEC INTERNATIONAL S.A.:
- ----------------------------------
(6) To record the remaining estimated Acquisition Price payable to Comasec
International S.A. (See Note 4). $ 1,360
SHAREHOLDERS' EQUITY:
- --------------------
(7) to record the reduction in the equity accounts as a result of the
Acquisition, and the non-recurring charge for purchased in-process research and
development as follows:
Description Reduction
----------- ---------
Common Stock - Class A $ (1,009)
Common Stock - Class B $ (61)
Paid in Capital $ (6,540)
Retained Earnings $ (3,245)
Purchased Research and
Development Writeoff $ (1,300)
---------------
$ (12,155)
---------------
</TABLE>
EXHIBIT 99(f)
<TABLE>
<CAPTION>
Unaudited Pro Forma Consolidated Statement of Income
Three Months Ended March 31, 1997
Comasec
Holdings, Inc.
Bacou USA and Subsidiary
At At Pro Forma Pro Forma
March 31, 1997 March 31, 1997 Adjustments Ref. As Adjusted
-------------- -------------- ----------- ---- -----------
(in thousands, except earnings per share)
<S> <C> <C> <C> <C> <C>
Net Sales $ 26,380 $ 7,341 $ - $ 33,721
Cost of Sales $ 12,382 $ 4,418 $ (349) 1,2 $ 16,451
--------- --------- ----------- -----------
Gross Profit $ 13,998 $ 2,923 $ 349 $ 17,270
Operating Expenses:
Selling $ 4,548 $ 1,129 $ - $ 5,677
General and Administrative $ 2,200 $ 839 $ (35) 3,4 $ 3,004
Research and Development $ - $ - $ 338 5 $ 338
Amortization of Intangible Assets $ 888 $ 12 $ 167 6,7 $ 1,067
---------- --------- ----------- ------------
Total Operating Expenses $ 7,636 $ 1,980 $ 470 $ 10,086
---------- --------- ----------- -----------
Operating Income $ 6,362 $ 943 $ (121) $ 7,184
Other Expense (Income):
Interest Expense $ 6 $ - $ 438 8 $ 444
Interest Income $ (162) $ (40) $ (40) 9 $ (242)
Other $ (132) $ 204 $ - $ 72
---------- --------- ----------- -----------
Other Expense (Income), Net $ (288) $ 164 $ 398 $ 274
---------- --------- ----------- -----------
Income Before Income Taxes $ 6,650 $ 779 $ (519) $ 6,910
Income Taxes $ 2,518 $ 299 $ (283) 10 $ 2,534
---------- --------- ----------- -----------
Net Income $ 4,132 $ 480 $ (236) $ 4,376
========== ========= ========== ===========
Net Income Per Common and
Common Equivalent Share $ 0.24 $ 0.25
Weighted Average Common and
Common Equivalent Shares 17,322 17,322
</TABLE>
See Notes to Unaudited Pro Forma Consolidated Financial Statements
<PAGE>
<TABLE>
<CAPTION>
Notes to Unaudited Pro Forma Consolidated Financial Statements
March 31, 1997
Adjustments Amount
----------- ------
COST OF SALES:
- --------------
(1) To reverse historical depreciation and include revised depreciation based
upon the expected useful lives and fair value of property and equipment acquired
in connection with the Acquisition as follows:
<S> <C>
Remove old depreciation amount $ (154)
Add new depreciation amount Cost Useful Lives
---- ------------
Leasehold Improvements $ 566,175 11 $ 13
Machinery and Equipment $2,569,850 11 $ 58
Tooling and Molds $1,998,450 7 $ 72
Net Depreciation Adjustment -------
$ (11)
-------
(2) To reclassify research and development $ (338)
-------
Net decrease in costs of sales (349)
GENERAL AND ADMINISTRATIVE EXPENSE:
- -----------------------------------
(3) To reclassify Amortization Expense from General and Administrative Expense
to Amortization of Intangibles. $ (8)
--------
(4) To reverse historical depreciation and include revised depreciation based
upon the expected useful lives and fair value of property and equipment acquired
in connection with the Acquisition as follows:
Remove old depreciation amount $ (52)
Add new depreciation amount Cost Useful Lives
---- ------------
Leasehold Improvements $ 188,725 11 $ 4
Furniture and Fixtures $ 184,300 9 $ 5
Computer Equipment $ 125,000 2 $ 16
------
Net Depreciation Adjustment $ (27)
------
Decrease in General and Administrative Expense $ (35)
-------
(5) To reclassify research and development $ 338
------
AMORTIZATION OF INTANGIBLES:
(6) To reclassify amortization expense from General and Administrative Expense
to Amortization of Intangibles $ 8
(7) To reverse historical amortization and include revised amortization based
upon the expected useful lives and fair value of intangible assets acquired in
connection with the Acquisition as follows:
Remove old amortization amount $ (8)
Add new amortization amount Cost Useful Lives
---- ------------
Goodwill $ 11,700,000 40 $ 72
Patents $ 1,500,000 15 $ 25
Acquired Technology $ 2,800,000 10 $ 70
------
Net Amortization Adjustment $ 159
------
Increase in Amortization of Intangibles $ 167
------
INTEREST EXPENSE:
(8) To record Interest Expense on the Acquisition Price of $27,350,000, which
has been assumed to have been fully borrowed in the Unaudited Pro Forma
Consolidated Financial Statements as follows:
Indebtedness Interest Rate
------------ -------------
$ 27,350,000 6.40%
Increase in Interest Expense $ 438
------
INTEREST INCOME:
(9) To remove interest income received on intercompany indebtedness that was
repaid as a result of the Acquisition. $ (40)
------
INCOME TAXES:
(10) To record the income tax effect of pro forma adjustments at a rate of 40.0%. $ 283
This rate is based upon a Federal statutory rate equal to 35.0%, plus the effect
of state and local income taxes and adjusted to exclude an income tax benefit
on amortization of goodwill.
</TABLE>
