<PAGE>
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, DC 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): DECEMBER 5, 1996
DURA AUTOMOTIVE SYSTEMS, INC.
(Exact Name of Registrant as Specified in its Charter)
DELAWARE
(State or Other Jurisdiction of Incorporation)
0-21139 38-3185711
(Commission File Number) (I.R.S. Employer Identification No.)
4508 IDS CENTER, MINNEAPOLIS, MINNESOTA 55402
(Address of Principal Executive Offices) (Zip Code)
(612) 342-2311
(Registrant's Telephone Number, Including Area Code)
NOT APPLICABLE
(Former Name or Former Address, if Changed Since Last Report)
<PAGE>
The undersigned Registrant hereby amends the following items, financial
statements, exhibits or other portions of its Current Report on Form 8-K, dated
December 20, 1996, relating to events occurring on December 5, 1996, as set
forth in the pages attached hereto.
Item 7. FINANCIAL STATEMENTS, PRO FORMA FINANCIAL INFORMATION AND EXHIBITS.
(a) FINANCIAL STATEMENTS OF BUSINESS ACQUIRED.
The audited financial statements for Sparton Engineered Products, Inc.
- KPI Entities, the business acquired, as of and for each of the three
years in the period ended June 30, 1996, together with a report of
independent public accountants, and the unaudited financial statements as
of September 30, 1996 and for the three months ended September 30, 1996 and
1995 are hereby filed as part of this Report on Form 8-K/A in the form
attached as Exhibit A.
(b) PRO FORMA FINANCIAL INFORMATION.
The required pro forma financial information for the transaction that
is the subject of this Report, as prepared as of September 30, 1996, is
hereby filed as part of this Report on Form 8-K/A in the form attached as
Exhibit B.
(c) EXHIBITS.
23. Consent of Arthur Andersen LLP.
<PAGE>
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.
DURA AUTOMOTIVE SYSTEMS, INC.
DATE: FEBRUARY 14, 1997 /s/ DAVID R. BOVEE
---------------------------------------
DAVID R. BOVEE, VICE PRESIDENT, CHIEF
FINANCIAL OFFICER AND ASSISTANT
SECRETARY (PRINCIPAL ACCOUNTING AND
FINANCIAL OFFICER)
<PAGE>
EXHIBIT A
REPORT OF INDEPENDENT PUBLIC ACCOUNTANTS
To Sparton Engineered Products, Inc. - KPI Entities:
We have audited the accompanying statements of net assets acquired of Sparton
Engineered Products, Inc. - KPI Entities as of June 30, 1995 and 1996, and the
related statements of revenues and expenses and cash flows for each of the three
years in the period ended June 30, 1996. 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 audits.
We conducted our audits in accordance with generally accepted auditing
standards. Those standards 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. An audit also includes
assessing the accounting principles used and significant estimates made by
management, as well as evaluating the overall financial statement presentation.
We believe that our audits provide a reasonable basis for our opinion.
These financial statements have been prepared to reflect the operations of
Sparton Engineered Products, Inc. - KPI Entities acquired pursuant to the Stock
Purchase Agreement discussed in Note 1 and are not intended to be a complete
presentation of Sparton Engineered Products, Inc. - KPI Entities' assets and
liabilities, revenues and expenses or cash flows.
In our opinion, the financial statements referred to above present fairly, in
all material respects, the net assets acquired of Sparton Engineered Products,
Inc. - KPI Entities pursuant to the Stock Purchase Agreement discussed in Note 1
as of June 30, 1995 and 1996, and the results of its operations and its cash
flows for each of the three years in the period ended June 30, 1996 in
conformity with generally accepted accounting principles.
ARTHUR ANDERSEN LLP
Minneapolis, Minnesota,
January 31, 1997
<PAGE>
SPARTON ENGINEERED PRODUCTS, INC. - KPI ENTITIES
STATEMENTS OF NET ASSETS ACQUIRED
(Amounts in thousands)
<TABLE>
<CAPTION>
June 30,
------------------------ Sept. 30,
1995 1996 1996
--------- --------- -----------
(unaudited)
<S> <C> <C> <C>
ASSETS
CURRENT ASSETS:
Cash and cash equivalents $ 254 $ 18 $ 44
Accounts receivable 11,347 16,197 14,810
Inventories 5,734 5,126 4,614
Prepaid customer tooling and other 629 1,982 279
--------- --------- ---------
Total current assets 17,964 23,323 19,747
--------- --------- ---------
PROPERTY, PLANT AND EQUIPMENT, at cost:
Land 410 410 410
Buildings and improvements 5,707 5,714 5,714
Machinery and equipment 14,172 14,897 14,985
--------- --------- ---------
20,289 21,021 21,109
Less-Accumulated depreciation (11,768) (13,711) (14,055)
--------- --------- ---------
Net property, plant and equipment 8,521 7,310 7,054
--------- --------- ---------
Total assets 26,485 30,633 26,801
--------- --------- ---------
LIABILITIES
CURRENT LIABILITIES:
Accounts payable 4,513 9,118 5,721
Accrued liabilities 1,381 1,800 2,146
--------- --------- ---------
Total current liabilities 5,894 10,918 7,867
COMMITMENTS AND CONTINGENCIES
(Notes 5 and 6)
--------- --------- ---------
NET ASSETS ACQUIRED $ 20,591 $ 19,715 $ 18,934
--------- --------- ---------
--------- --------- ---------
</TABLE>
The accompanying notes are an integral part of these statements.
<PAGE>
SPARTON ENGINEERED PRODUCTS, INC. - KPI ENTITIES
STATEMENTS OF REVENUES AND EXPENSES
(Amounts in thousands)
<TABLE>
<CAPTION>
Three Months
Years Ended June 30, Ended Sept. 30,
--------------------------------------- -------------------------
1994 1995 1996 1995 1996
---------- --------- --------- --------- ----------
(unaudited)
<S> <C> <C> <C> <C> <C>
Revenues $ 78,775 $ 85,157 $ 88,375 $ 19,864 $ 23,237
Cost of sales 67,101 72,700 75,725 17,575 19,730
--------- --------- --------- --------- ---------
Gross profit 11,674 12,457 12,650 2,289 3,507
Selling, general and administrative expenses 5,718 6,014 6,354 1,663 2,140
--------- --------- --------- --------- ---------
Revenues over expenses before
provision for income taxes 5,956 6,443 6,296 626 1,367
Provision for income taxes 2,370 2,530 2,472 244 538
--------- --------- --------- --------- ---------
Revenues over expenses $ 3,586 $ 3,913 $ 3,824 $ 382 $ 829
--------- --------- --------- --------- ---------
--------- --------- --------- --------- ---------
</TABLE>
The accompanying notes are an integral part of these statements.
-2-
<PAGE>
SPARTON ENGINEERED PRODUCTS, INC. - KPI ENTITIES
STATEMENTS OF CASH FLOWS
(Amounts in thousands)
<TABLE>
<CAPTION>
Three Months
Years Ended June 30, Ended Sept. 30,
--------------------------------------- -----------------------
1994 1995 1996 1995 1996
--------- --------- --------- -------- --------
(unaudited)
<S> <C> <C> <C> <C> <C>
OPERATING ACTIVITIES:
Revenues over expenses $ 3,586 $ 3,913 $ 3,824 $ 382 $ 829
Adjustments to reconcile revenues over
expenses to net cash provided by operating
activities:
Depreciation and amortization 1,807 2,144 1,943 710 344
Deferred income tax provision (benefit) 63 (107) (72) - -
Change in other operating items -
Accounts receivable (1,243) 613 (4,850) (151) 1,387
Inventories (1,249) (123) 608 (493) 512
Prepaid customer tooling and other (2,305) 2,325 (1,353) 405 1,703
Accounts payable and accrued liabilities 1,550 (1,873) 5,096 2,345 (3,051)
--------- --------- --------- -------- --------
Net cash provided by
operating activities 2,209 6,892 5,196 3,198 1,724
--------- --------- --------- -------- --------
INVESTING ACTIVITIES:
Capital expenditures, net (3,828) (1,633) (732) (309) (88)
--------- --------- --------- -------- --------
FINANCING ACTIVITIES:
Net advances (to) from Sparton Corporation 1,717 (5,189) (4,700) (3,067) (1,610)
--------- --------- --------- -------- --------
NET CHANGE IN CASH 98 70 (236) (178) 26
CASH:
Beginning of period 86 184 254 254 18
--------- --------- --------- -------- --------
End of period $ 184 $ 254 $ 18 $ 76 $ 44
--------- --------- --------- -------- --------
--------- --------- --------- -------- --------
</TABLE>
The accompanying notes are an integral part of these statements.
-3-
<PAGE>
SPARTON ENGINEERED PRODUCTS, INC. - KPI ENTITIES
NOTES TO FINANCIAL STATEMENTS
(INFORMATION AS OF AND FOR THE THREE MONTH PERIODS
ENDED SEPTEMBER 30, 1995 AND 1996 IS UNAUDITED)
1. ORGANIZATION AND BASIS OF PRESENTATION:
The accompanying financial statements include the accounts of Sparton
Engineered Products, Inc. - KPI Group (a Michigan corporation), Sparton
Engineered Products, Inc. - KPI Group (an Indiana corporation) and the
Gladwin division of Sparton Engineered Products, Inc. - Lake Odessa Group
(collectively Sparton Engineered Products, Inc. - KPI Entities, KPI
Entities or the Company). During the periods presented, the KPI Entities
were wholly owned subsidiaries of Sparton Corporation (Sparton). On
December 5, 1996, the KPI Entities were acquired by Dura Operating Corp.
(Dura), a wholly owned subsidiary of Dura Automotive Systems, Inc. (see
Note 7), pursuant to the terms of a Stock Purchase Agreement (the
Acquisition).
The accompanying financial statements reflect the assets acquired and
liabilities assumed, revenues and expenses and cash flows of the operations
conducted by the KPI Entities acquired by Dura as of the date of the
Acquisition. This presentation is intended to provide a more meaningful
representation of the historical financial information of the acquired
operations and is not intended to represent a presentation of the financial
position and results of operations of the KPI Entities. Certain
information related to amounts receivable from customers, obligations to
vendors and costs incurred in the development and manufacture of customer
tooling were maintained by Sparton on a commingled basis during the periods
presented. In the preparation of the accompanying financial statements, it
was determined that it was not practicable to specifically identify such
amounts which related solely to the Company. Accordingly, the amounts
presented in the accompanying financial statements reflect estimates of
these balances, which management believes are reasonable and appropriate.
Management does not believe that such estimates would differ materially
from actual amounts had it been practicable to specifically identify such
actual amounts. The accompanying financial statements have not been
adjusted to reflect the effects of the Acquisition.
The accompanying statement of net assets acquired as of September 30, 1996,
and the statements of revenues and expenses and cash flows for the three
month periods ended September 30, 1995 and 1996, are unaudited. In the
opinion of management, such financial statements include all adjustments,
consisting solely of normal recurring adjustments, necessary for a fair
presentation of results for these interim periods. The revenues and
expenses for the three-month period ended September 30, 1996 are not
necessarily indicative of results to be expected for the entire year.
The Company is a manufacturer and supplier of transmission shifters
systems, parking brake mechanisms, brake pedals, under body spare tire
carriers and airbag components for the North American automotive industry
and has five manufacturing facilities located in Indiana and Michigan.
-4-
<PAGE>
2. SIGNIFICANT ACCOUNTING POLICIES:
CASH EQUIVALENTS:
Cash equivalents consist of money market instruments with original
maturities of three months or less and are stated at cost which
approximates fair value.
INVENTORIES:
Inventories are valued at the lower of first-in, first-out cost or market.
Inventories consisted of the following (in thousands):
June 30, Sept. 30,
---------------------- ---------
1995 1996 1996
--------- --------- ---------
Raw materials $ 3,798 $ 3,317 $ 3,193
Work in process 1,352 1,190 1,038
Finished goods 584 619 383
--------- --------- ---------
$ 5,734 $ 5,126 $ 4,614
--------- --------- ---------
--------- --------- ---------
PREPAID CUSTOMER TOOLING:
Excess of cost over billings on uncompleted tooling projects represents
costs incurred by the Company in production of customer-owned tooling to be
used by the Company in the manufacture of its products. The Company
receives a specific purchase order for this tooling and is reimbursed by
the customer within one operating cycle. Costs are deferred until
reimbursed by the customer. Forecasted losses on incomplete projects are
recognized currently.
PROPERTY, PLANT AND EQUIPMENT:
Property, plant and equipment are stated at cost. For financial and tax
reporting purposes, depreciation is provided using accelerated methods over
the following estimated useful lives:
Buildings and improvements 5 to 40 years
Machinery and equipment 2 to 15 years
Maintenance and repairs are charged to expense as incurred. Major
betterments and improvements which extend the useful life of the item are
capitalized and depreciated. The cost and accumulated depreciation of
property, plant and equipment retired or otherwise disposed of are removed
from the related accounts and any residual values are charged or credited
to income.
-5-
<PAGE>
ACCRUED LIABILITIES:
Accrued liabilities consisted of the following (in thousands):
June 30, Sept. 30,
----------------------- ---------
1995 1996 1996
-------- -------- ---------
Compensation and Benefits $ 1,066 $ 1,172 $ 1,395
Other 315 628 751
-------- -------- --------
$ 1,381 $ 1,800 $ 2,146
-------- -------- --------
-------- -------- --------
INCOME TAXES:
The Company accounts for income taxes under the liability method, whereby
deferred income taxes are recognized at currently enacted income tax rates
to reflect the tax effect of temporary differences between the financial
reporting and tax bases of assets and liabilities.
USE OF ESTIMATES:
The preparation of the accompanying financial statements in conformity with
generally accepted accounting principles required management to make
estimates and assumptions that affected 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 periods. Such estimates related primarily to
the carrying amounts of accounts receivable, inventories and customer
tooling balances and to the determination of account balances which were
maintained by Sparton for the Company and other subsidiaries of Sparton on
a commingled basis, as discussed above. The ultimate results could differ
from those estimates.
3. MAJOR CUSTOMERS:
The Company sells its products directly to automobile manufacturers and
their direct suppliers. Following is a summary of customers that accounted
for more than 10% of revenues:
Three Months Ended
Years Ended June 30, September 30,
------------------------ ------------------
1994 1995 1996 1995 1996
---- ---- ---- ------ ------
Ford 64% 64% 65% 62% 62%
General Motors 19 20 15 20 14
Chrysler 11 10 12 11 16
-6-
<PAGE>
Receivables from these customers represented 86% and 90% of total accounts
receivable at June 30, 1995 and 1996, and 87% at September 30, 1996.
4. INCOME TAXES:
The Company's results of operations have been included in the consolidated
federal income tax returns of Sparton while separate income tax returns are
filed for state income tax purposes and all tax payments are made by
Sparton. The provisions for income taxes in the accompanying statements of
revenues and expenses for the years ended June 30, 1994, 1995 and 1996, and
for the three-month periods ended September 30, 1995 and 1996 were computed
on a separate-company basis as if the Company had filed separate federal
tax returns.
The income tax provision consisted of the following (in thousands):
Three Months
Years Ended June 30, Ended September 30,
----------------------------------- -------------------
1994 1995 1996 1995 1996
--------- --------- ---------- -------- --------
Current $ 2,307 $ 2,637 $ 2,544 $ 244 $ 538
Deferred 63 (107) (72) - -
--------- --------- ---------- -------- --------
Total $ 2,370 $ 2,530 $ 2,472 $ 244 $ 538
--------- --------- ---------- -------- --------
--------- --------- ---------- -------- --------
A reconciliation of the income tax provision computed at statutory rates to
the reported income tax provision is as follows (in thousands):
<TABLE>
<CAPTION>
Three Months
Years Ended June 30, Ended September 30,
------------------------ -------------------
1994 1995 1996 1995 1996
---- ---- ---- ---- ----
<S> <C> <C> <C> <C> <C>
Federal provision at statutory rates 34% 34% 34% 34% 34%
State taxes, net of federal
benefit 9% 7% 7% 7% 7%
Effect of permanent differences,
primarily FSC benefit (3%) (2%) (2%) (2%) (2%)
------ ------ ------ ------ ------
Provision for income
taxes 40% 39% 39% 39% 39%
------ ------ ------ ------ ------
------ ------ ------ ------ ------
</TABLE>
-7-
<PAGE>
A summary of the Company's deferred income tax assets is as follows (in
thousands):
June 30,
------------------ Sept. 30,
1995 1996 1996
-------- -------- --------
Reserves and accruals not currently
deductible $ 106 $ 207 $ 207
Inventory 213 184 184
------ ------ ------
Deferred tax assets $ 319 $ 391 $ 391
------ ------ ------
------ ------ ------
5. COMMITMENTS AND CONTINGENCIES:
EMPLOYEE BENEFIT PLANS:
The Company sponsors an employee retirement plan which provides for Company
contributions equivalent to 20% of the participants' voluntary
contributions, which are limited to 5% of compensation. In addition, the
Company may make discretionary contributions as determined by the board of
directors subject to a minimum requirement of $1,000 per participant per
three-month calendar period. The Company's expense for this plan was
$273,000, $341,000 and $487,000 for the years ended June 30, 1994, 1995 and
1996 and $41,000 and $91,000 for the three month periods ended September
30, 1995 and 1996.
ENVIRONMENTAL AND LEGAL MATTERS:
Due to the nature of its business, the Company may, from time to time, be
exposed to potential liabilities to clean up environmental contaminants.
In addition, the Company is periodically involved in legal proceedings in
the ordinary course of business. In the opinion of management, such
matters are not expected to have a material impact on the Company's future
operating results or financial position.
6. RELATED PARTY TRANSACTION:
During the periods presented, the Company leased a manufacturing facility
and its technical and administrative center from two individuals, including
Sparton's chairman, pursuant to an operating lease which expired December
5, 1996. Total expense related to this lease was $95,000 for each of the
years ended June 30, 1994, 1995 and 1996 and $24,000 for each of the three
months ended September 30, 1995 and 1996. In connection with the
acquisitions described in Note 7, Sparton purchased these facilities. The
Company entered into a five year lease agreement with Sparton for these
facilities which provides for annual lease payments of $135,000.
-8-
<PAGE>
7. ACQUISITION BY DURA:
On December 5, 1996, Dura acquired the KPI Entities for total consideration
of approximately $78.8 million in cash. This transaction was consummated
through the purchase of the common stock of the Michigan and Indiana
corporations and the acquisition and assumption of certain assets and
liabilities of the Gladwin division (see Note 1). The acquisition of the
Company will be accounted for by Dura as a purchase and, accordingly, the
Company's assets and liabilities will be recorded at their estimated fair
values at the acquisition date.
-9-
<PAGE>
EXHIBIT B
PRO FORMA FINANCIAL INFORMATION
On December 5, 1996, Dura Operating Corp., a wholly owned subsidiary of Dura
Automotive Systems, Inc. (the Company) acquired from Sparton Corporation
("Sparton") all of the issued and outstanding stock (the "Stock Acquisition") of
Sparton Engineered Products, Inc., KPI Group, a Michigan corporation ("KPI
Michigan"), and Sparton Engineered Products, Inc., KPI Group, an Indiana
corporation ("KPI Indiana"). Immediately upon the consummation of the Stock
Acquisition, KPI Michigan acquired certain assets of Sparton Engineered
Products, Inc., Lake Odessa Group, from Sparton (collectively with the Stock
Acquisition, the "Acquired Operations"). The Acquired Operations design and
manufacture transmission shifter systems, parking brake mechanisms, brake
pedals, underbody spare tire carriers and airbag components for the North
American automotive industry. In connection with the acquisitions, KPI Indiana
was merged with and into KPI Michigan, whose name was changed at such time to
Dura Automotive Systems, Inc., Shifter Operations ("DASSO"). The Registrant
intends that DASSO will operate as a separate wholly owned subsidiary. The
acquisition of DASSO was accounted for using the purchase method of accounting
and, accordingly, the results of operations of DASSO are consolidated with the
results of operations of the Company as of the date of acquisition. In April
1995, the Company sold all of the assets and liabilities associated with its
Window Regulator Business ("Window Regulator") to Rockwell International for
$18.0 million in cash resulting in a pre tax gain of $4.2 million.
The following unaudited pro forma condensed consolidated statement of operations
for the year ended December 31, 1995 gives effect to the acquisition of DASSO
and the divestiture of Window Regulator as if they had occurred at the beginning
of the year. The following unaudited pro forma condensed consolidated statement
of operations for the nine months ended September 30, 1996 gives effect to the
acquisition of DASSO as if it had occurred at the beginning of the year. The
following unaudited pro forma as adjusted condensed consolidated statements of
operations for the year ended December 31, 1995 and the nine months ended
September 30, 1996 give effect to the above transactions and the Company's
August 14, 1996 initial public offering of 3,795,000 shares of Class A common
stock ("Offering") as if such transactions had occurred at the beginning of the
periods. The following unaudited condensed consolidated balance sheet as of
September 30, 1996 reflects the acquisition of DASSO as if it had occurred on
that date. The unaudited pro forma financial statements are based on a
preliminary allocation of the purchase price of DASSO and do not purport to
represent what the Company's results of operations would actually have been if
such transaction in fact had occurred at such dates or to project the Company's
results of future operations. The unaudited pro forma information should be
read in conjunction with the Company's audited historical consolidated financial
statements and notes thereto included in the Company's Registration Statement on
Form S-1 dated August 14, 1996 and with the audited historical financial
statements and notes thereto of the Acquired Operations filed herewith.
<PAGE>
DURA AUTOMOTIVE SYSTEMS, INC.
Pro Forma Condensed Consolidated Balance Sheet
As of September 30, 1996
(in thousands)
<TABLE>
<CAPTION>
Acquired
Company Operations
as of as of Pro Forma
Sep. 30, 1996 Sep. 30, 1996 Adjustments Total
------------- ------------- ----------- ----------
<S> <C> <C> <C> <C>
ASSETS
Current assets:
Cash and cash equivalents $ 6,081 $ 44 $(6,000)(1) $ 125
Accounts receivable 44,351 14,810 - 59,161
Inventories 10,786 4,614 - 15,400
Other current assets 5,871 279 - 6,150
----------- ---------- ---------- -----------
Total current assets 67,089 19,747 (6,000) 80,836
Property, plant and equipment, net 35,836 7,054 1,869(2) 44,759
Goodwill and other assets, net 44,827 - 71,523(3) 116,350
----------- ---------- ---------- -----------
$ 147,752 $ 26,801 $ 67,392 $ 241,945
----------- ---------- ---------- -----------
----------- ---------- ---------- -----------
LIABILITIES AND STOCKHOLDERS' INVESTMENT
Current liabilities:
Current maturities of long-term debt $ 163 $ - $ - $ 163
Accounts payable 23,719 5,721 - 29,440
Accrued liabilities 20,872 2,146 3,931(4) 26,949
----------- ---------- ---------- -----------
Total current liabilities 44,754 7,867 3,931 56,552
Long-term debt, net of current maturities 306 - 74,500(1) 74,806
Other noncurrent liabilities 18,753 - 7,895(4) 26,648
----------- ---------- ---------- -----------
Stockholders' investment:
Common stock 88 - - 88
Additional paid-in capital 63,061 - - 63,061
Retained earnings 20,958 - - 20,958
Common stock subscriptions receivable (168) - - (168)
Net assets acquired - 18,934 (18,934)(5) -
----------- ---------- ---------- -----------
Total stockholders' investment 83,939 18,934 (18,934) 83,939
----------- ---------- ---------- -----------
$ 147,752 $ 26,801 $ 67,392 $ 241,945
----------- ---------- ---------- -----------
----------- ---------- ---------- -----------
</TABLE>
See Accompanying Notes to Pro Forma Condensed Consolidated Balance Sheet.
<PAGE>
DURA AUTOMOTIVE SYSTEMS, INC.
NOTES TO PRO FORMA CONDENSED CONSOLIDATED BALANCE SHEET
(IN THOUSANDS)
(1) Adjustment to reflect use of cash ($6,000) and incremental borrowings
($74,500) to finance the purchase price of the Acquired Operations
($78,800) and transaction costs of ($1,700).
(2) Adjustment to reflect the property, plant and equipment of the Acquired
Operations at its estimated fair value.
(3) To record the excess of the purchase price of the Acquired Operations over
the fair value of the net assets acquired as goodwill. The goodwill will
be amortized on a straight-line basis over forty years.
(4) To record management's preliminary estimate of reserves to be established
in connection with the acquisition of the Acquired Operations, including
losses to be incurred on existing contracts due to the consummation of the
acquisition, costs to be incurred to exit certain manufacturing activities
and locations of the Acquired Operations and employee relocation and other
costs. These reserves have been established based on preliminary
estimates. Management does not expect the actual amounts to be provided
will be materially different than the estimated amounts.
(5) To eliminate the historical stockholders' investment of the Acquired
Operations.
<PAGE>
DURA AUTOMOTIVE SYSTEMS, INC.
Pro Forma Condensed Consolidated Statement of Operations
For the Nine Months Ended September 30, 1996
(in thousands, except per share data)
<TABLE>
<CAPTION>
Acquired Pro Forma Offering Pro Forma
Company Operations Combined Adjustments Pro Forma Adjustments As Adjusted
--------- ---------- --------- ----------- --------- ----------- -----------
<S> <C> <C> <C> <C> <C> <C> <C>
Revenues $ 184,487 $ 70,671 $ 255,158 $ - $ 255,158 $ - $ 255,158
Cost of sales 159,151 59,822 218,973 (914)(1) 218,059 - 218,059
---------- --------- ---------- -------- --------- -------- ---------
Gross profit 25,336 10,849 36,185 914 37,099 - 37,099
Selling, general & administrative expenses 11,237 5,152 16,389 - 16,389 - 16,389
Amortization expense 691 - 691 1,341 (2) 2,032 - 2,032
---------- --------- ---------- -------- --------- -------- ---------
Operating income 13,408 5,697 19,105 (427) 18,678 - 18,678
Interest expense 2,287 - 2,287 4,191 (3) 6,478 (2,333)(5) 4,145
---------- --------- ---------- -------- --------- -------- ---------
Income before income taxes 11,121 5,697 16,818 (4,618) 12,200 2,333 14,533
Provision for income taxes 4,421 2,238 6,659 (1,847)(4) 4,812 912 (5) 5,724
---------- --------- ---------- -------- --------- -------- ---------
Net income $ 6,700 $ 3,459 $ 10,159 $(2,771) $ 7,387 $ 1,421 $ 8,809
---------- --------- ---------- -------- --------- -------- ---------
---------- --------- ---------- -------- --------- -------- ---------
Weighted average common and common
equivalent shares outstanding 5,669 5,669 3,149 8,811
---------- --------- -------- ---------
---------- --------- -------- ---------
Earnings per common and common
equivalent share $ 1.18 $ 1.30 $ 1.00
---------- --------- ---------
---------- --------- ---------
</TABLE>
See Accompanying Notes to Pro Forma Condensed Consolidated Statements of
Operations.
<PAGE>
DURA AUTOMOTIVE SYSTEMS, INC.
Pro Forma Condensed Consolidated Statement of Operations
For the Year Ended December 31, 1995
(in thousands, except per share data)
<TABLE>
<CAPTION>
Acquired Window Pro Forma Offering Pro Forma
Company Operations Regulator Combined Adjustments Pro Forma Adjustments As Adjusted
--------- ---------- --------- -------- ----------- --------- ----------- -----------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Revenues $ 253,726 $ 85,284 $ 14,128 $324,882 $ - $324,882 $ - $ 324,882
Cost of sales 220,274 73,184 13,321 280,137 (1,660)(1) 278,477 - 278,477
---------- -------- -------- --------- -------- --------- --------- ---------
Gross profit 33,452 12,100 807 44,745 1,660 46,405 - 46,405
Selling, general & administrative
expenses 14,798 6,444 419 20,823 - 20,823 - 20,823
Amortization expense 1,094 - - 1,094 1,691 (2) 2,785 - 2,785
---------- -------- -------- --------- -------- --------- --------- ---------
Operating income 17,560 5,656 388 22,828 (31) 22,797 - 22,797
Gain on sale of window regulator
business 4,240 - 4,240 - - - - -
Interest expense 4,822 - 400 4,422 5,588 (3) 10,010 (3,496)(5) 6,514
---------- -------- -------- --------- -------- --------- --------- ---------
Income before taxes 16,978 5,656 4,228 18,406 (5,619) 12,787 3,496 16,283
Provision for income taxes 6,852 2,221 1,704 7,369 (2,248)(4) 5,121 1,398 (5) 6,519
---------- -------- -------- --------- -------- --------- --------- ---------
Net income $ 10,126 $ 3,435 $ 2,524 $ 11,037 $(3,371) $ 7,666 $ 2,098 $ 9,764
---------- -------- -------- --------- -------- --------- --------- ---------
---------- -------- -------- --------- -------- --------- --------- ---------
Weighted average common and common
equivalent share 4,989 4,989 3,795 8,784
---------- --------- --------- ---------
---------- --------- --------- ---------
Earnings per common and common
equivalent shares outstanding $ 2.03 $ 1.54 $ 1.11
---------- --------- ---------
---------- --------- ---------
</TABLE>
See Accompanying Notes to Pro Forma Condensed Consolidated Statements of
Operations.
<PAGE>
DURA AUTOMOTIVE SYSTEMS, INC.
NOTES TO PRO FORMA CONDENSED CONSOLIDATED
STATEMENTS OF OPERATIONS
(1) Represents the effect on depreciation expense of the use of new lives and
the adjustment of property, plant and equipment acquired to its fair value.
(2) Represents amortization of goodwill arising from the acquisition of the
Acquired Operations. Goodwill will be amortized on a straight-line basis
over forty years.
(3) Represents incremental interest expense arising from indebtedness incurred
to acquire the Acquired Operations. Interest was calculated using the
Company's weighted average interest rates for the periods.
(4) To record the income tax effects of the pro forma adjustments. On a pro
forma basis, the Company's effective tax rate is approximately 39.5%.
(5) Represents the reduction in interest expense and corresponding increase in
income tax expense arising from the use of the proceeds from the Offering
to repay indebtedness, calculated using the Company's weighted average
interest rate on debt assumed to be retired.
<PAGE>
EXHIBIT C
<PAGE>
EXHIBIT 23
CONSENT OF INDEPENDENT PUBLIC ACCOUNTANTS
As independent public accountants, we hereby consent to the incorporation of our
report included in this Form 8-K/A, into the Company's previously filed
Registration Statement File No. 333-17821.
ARTHUR ANDERSEN LLP
Minneapolis, Minnesota,
February 14, 1997
