SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
------------------------------------------------
FORM 8-K/A
CURRENT REPORT
Pursuant to Section 13 or 15(d) of
the Securities and Exchange Act of 1934
Date of Report (Date of Earliest Event Reported):
July 24, 2000 (May 10, 2000)
ROFIN-SINAR TECHNOLOGIES, INC.
____________________________________________
(Exact name of registrant as specified in charter)
DELAWARE
____________________________________________
(State of other jurisdiction of incorporation)
000-21377 38-3306461
______________________ _____________________________
(Commission File Number) (IRS Employer Identification No.)
45701 Mast Street, Plymouth, MI 48170
________________________________ ____________
(Address of principal executive offices) (Zip Code)
(734) 455-5400
____________________________________________
Registrant's telephone number including area code
____________________________________________
(Former Address, if changed since Last Report) (Zip Code)
<PAGE>
On May 10, 2000, we acquired, through our wholly-owned subsidiary, Rofin-
Sinar Laser GmbH, a controlling interest in Carl Baasel Lasertechnik GmbH and
its worldwide subsidiaries ("Baasel Lasertech Group") from Mannesmann Demag
Krauss-Maffei AG ("MDKM"). This transaction was originally reported on a
Current Report on Form 8-K filed May 24, 2000 (the "Original Report"). The
Original Report was subsequently amended by a Form 8-K/A filed on May 26,
2000. This Amendment is being filed to provide the financial information
required by Item 7(a) and Item 7(b) of Form 8-K within the timeframe
specified by Item 7 of Form 8-K.
ITEM 7. FINANCIAL STATEMENTS, PRO FORMA FINANCIAL STATEMENTS AND EXHIBITS.
(a) Financial Statements of the Business Acquired.
The financial statements of Baasel Lasertech Group required to be filed
pursuant to this Item 7(a) of Form 8-K are included in Exhibit 20.1 of
this Current Report on Form 8-K/A.
(b) Pro Forma Financial Information.
The pro forma financial information required to be filed pursuant to
this Item 7(b) of Form 8-K/A are included in Exhibit 20.2 of this
Current Report on Form 8-K/A.
(c) Exhibits
2.1* English translation of Acquisition Agreement dated as of April
29, by and between MDKM and Rofin-Sinar Laser GmbH.
20.1 Consolidated Financial Statements of Carl Baasel Lasertechnik
GmbH, including balance sheets of Carl Baasel Lasertechnik GmbH
as of December 31, 1999 and 1998 and the statements of operations
for the years ended December 31, 1999 and 1998, statements of
shareholders' equity and comprehensive income for the years ended
December 31, 1999 and 1998, and statements of cash flows for the
years ended December 31, 1999 and 1998.
20.2 Unaudited Pro Forma Condensed Combined Balance Sheet of
Registrant and Carl Baasel Lasertechnik GmbH as of March 31, 2000
and unaudited Pro Forma Condensed Combined Consolidated
Statements of Operations of Registrant and Carl Baasel
Lasertechnik GmbH for the six months ended March 31, 2000 and the
year ended September 30, 1999.
99.1 * Press Release dated May 1, 2000.
99.2 * Press Release dated May 11, 2000.
_______________
* Previously filed as an Exhibit to the Registrant's Current Report on Form
8-K filed with the Securities and Exchange Commission on May 24, 2000.
<PAGE>
Exhibit 20.1 -
Consolidated Financial Statements of Carl Baasel Lasertechnik GmbH
Independent Auditors' Report
The Board of Directors
Carl Baasel Lasertechnik GmbH:
We have audited the accompanying consolidated balance sheets of Carl Baasel
Lasertechnik GmbH and its subsidiaries as of December 31, 1999 and 1998, and
the related consolidated statements of operations, shareholders' equity and
comprehensive income, and cash flows for the years then ended. These
consolidated financial statements are the responsibility of the Company's
management. Our responsibility is to express an opinion on these
consolidated financial statements based on our audits.
We conducted our audits in accordance with auditing standards generally
accepted in the United States of America. 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.
In our opinion, the consolidated financial statements referred to above
present fairly, in all material respects, the consolidated financial position
of Carl Baasel Lasertechnik GmbH and its subsidiaries as of December 31, 1999
and 1998, and the results of their operations and their cash flows for the
years then ended in conformity with accounting principles generally accepted
in the United States of America.
July 20, 2000
Detroit, Michigan KPMG LLP
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<PAGE>
Carl Baasel Lasertechnik GmbH and Subsidiaries
Consolidated Balance Sheets
December 31, 1999 and 1998
(dollars in thousands)
1999 1998
ASSETS ---------- ----------
Current assets:
Cash and cash equivalents $ 849 $ 1,762
Accounts receivable, trade 16,562 17,616
Less allowance for doubtful accounts (111) (252)
---------- ---------
Trade accounts receivable, net 16,451 17,364
Accounts receivable, related party 464 5
Other accounts receivable 505 614
Inventories, net (note 2) 16,542 19,865
Prepaid expenses 161 256
Other current assets 266 143
---------- ---------
Total current assets 35,238 40,009
Property and equipment, at cost (note 3) 6,229 7,162
Less accumulated depreciation (4,692) (5,215)
---------- ---------
Property and equipment, net 1,537 1,947
Deferred income tax assets - noncurrent (note 8) 193 78
Goodwill, net (note 4) 17,864 18,436
Other assets 263 119
---------- ---------
Total assets $ 55,095 $ 60,589
========== =========
LIABILITIES AND SHAREHOLDERS' EQUITY
Current liabilities:
Loans from Parent (note 6) $ 4,949 $ 6,150
Accounts payable, trade 3,400 2,629
Advances from Parent (note 6) 18,509 19,368
Income tax payable (note 8) 170 418
Deferred income tax - current (note 8) 872 2,057
Accrued liabilities (note 5) 9,021 9,779
---------- ---------
Total current liabilities 36,921 40,401
Minority interests 34 31
Other long-term liabilities 28 56
---------- ---------
Total liabilities 36,983 40,488
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<PAGE>
Shareholders' equity (note 9)
Shareholders' capital 21,329 19,329
Retained deficit (3,374) (2,800)
Accumulated other comprehensive income 157 3,572
---------- ---------
Total shareholders' equity 18,112 20,101
---------- ---------
Total liabilities and shareholders' equity $ 55,095 $ 60,589
========== =========
See accompanying notes to consolidated financial statements.
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<PAGE>
Carl Baasel Lasertechnik GmbH and Subsidiaries
Consolidated Statements of Operations
Years ended December 31, 1999 and 1998
(dollars in thousands)
1999 1998
--------- ---------
Net sales $ 68,532 $ 79,345
Cost of goods sold 41,448 50,143
--------- ---------
Gross profit 27,084 29,202
Selling, general, and administrative expenses 19,080 18,335
Provision for doubtful accounts (77) (10)
Research and development expenses 4,357 2,968
--------- ---------
Income from operations 3,724 7,909
Other expense (income):
Interest income (198) (97)
Interest expense 1,237 371
Minority interest 24 22
Miscellaneous (702) 159
--------- ---------
Total other expenses, net 361 455
--------- ---------
Income before income taxes 3,363 7,454
Income tax expense (note 8) 2,040 3,356
--------- ---------
Net income $ 1,323 $ 4,098
========= =========
See accompanying notes to consolidated financial statements.
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<PAGE>
Carl Baasel Lasertechnik GmbH and Subsidiaries
Consolidated Statements of Shareholders' Equity and Comprehensive Income
Years ended December 31, 1999 and 1998
(dollars in thousands)
Accumulated
Retained Other Total
Shareholders' Earnings Comprehensive Shareholders'
Capital (Deficit) Income (Loss) Equity
---------- ---------- ---------- ----------
Balances at December 31, 1997 $ 16,946 $ 7,639 $ (738) $ 23,847
Net income -- 4,098 -- 4,098
Foreign currency
translation adjustment -- -- 4,310 4,310
---------
Total comprehensive income 8,408
Dividends paid -- (14,537) -- (14,537)
Capital contribution (note 9) 2,383 -- -- 2,383
--------- --------- --------- ---------
Balances at December 31, 1998 19,329 (2,800) 3,572 20,101
Net income -- 1,323 -- 1,323
Foreign currency
translation adjustment -- -- (3,415) (3,415)
---------
Total comprehensive loss (2,092)
Dividends paid -- (1,897) -- (1,897)
Push-down of goodwill from
Parent (note 9) 2,000 -- -- 2,000
--------- --------- --------- ---------
Balances at December 31, 1999 $ 21,329 $ (3,374) $ 157 $ 18,112
========= ========= ========= =========
See accompanying notes to consolidated financial statements.
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<PAGE>
Carl Baasel Lasertechnik GmbH and Subsidiaries
Consolidated Statements of Cash Flows
Years ended December 31, 1999 and 1998
(dollars in thousands)
1999 1998
---------- ----------
CASH FLOWS FROM OPERATING ACTIVITIES
Net income $ 1,323 $ 4,098
Adjustments to reconcile net income to net
cash used by operating activities:
Depreciation and amortization 2,312 2,170
Provision for doubtful accounts (77) (10)
(Gain) loss on disposal of property and
equipment 16 14
Deferred income taxes (995) (1,101)
Increase in minority interest 24 22
Changes in operating assets and liabilities:
Trade accounts receivable (2,482) 3,102
Other accounts receivable (3,958) 3,111
Inventories 1,137 4,457
Prepaid expenses and other (179) (2,528)
Accounts payable, trade (4,033) (2,929)
Income taxes payable (248) (4,839)
Accrued liabilities (211) (3,254)
--------- ---------
Net cash provided by (used in)operating activities (7,371) 2,313
--------- ---------
CASH FLOWS FROM INVESTING ACTIVITIES
Additions to property and equipment ( 911) ( 832)
Payment of contingent purchase price (note 4) (1,730) (2,312)
--------- ---------
Net cash used in investing activities (2,641) (3,144)
--------- ---------
CASH FLOWS FROM FINANCING ACTIVITIES
Increase in paid-in-capital -- 2,383
Repayments to bank -- (6,450)
Loans and advances from Parent 7,562 17,249
Dividend payments (1,897) (14,537)
--------- ---------
Net cash provided by (used in) financing
activities 5,665 (1,355)
--------- ---------
Effect of foreign currency translation on cash 3,434 2,013
--------- ---------
Net decrease in cash and cash equivalents (913) (173)
Cash and cash equivalents at beginning of year 1,762 1,935
--------- ---------
Cash and cash equivalents at end of year $ 849 $ 1,762
========== =========
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<PAGE>
Supplemental cash flow disclosures:
Cash paid for interest $ 1,098 $ 351
Cash paid for income taxes $ 3,696 $ 3,276
See accompanying notes to consolidated financial statements.
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<PAGE>
CARL BAASEL LASERTECHNIK GMBH AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
December 31, 1999 and 1998
(dollars in thousands)
1. SUMMARY OF ACCOUNTING POLICIES
(a) Description of the Company and Business
Carl Baasel Lasertechnik GmbH (Baasel Lasertech or the Company), a German
limited liability company, develops, manufactures and markets industrial
lasers and laser systems for a variety of material processing applications
including marking, cutting, welding, soldering, medical and perforation. The
majority of the Company's customers are in the material processing/
automation, aerospace, medical, telecommunications, semiconductor and
electronics industries and are located in Europe, the United States, and
Asia.
Baasel Lasertech is a 90.01 percent-owned subsidiary of Mannesmann Demag
Krauss-Maffei AG, which in turn is a wholly-owned subsidiary of Mannesmann AG
(Mannesmann or Parent). Baasel Lasertech includes the consolidated accounts
of its 100.00 percent-owned subsidiaries Wegmann - Baasel Laser und
elektrooptische Geraete GmbH, PMB Elektronik GmbH, Baasel Lasertech Italia
S.r.l., Baasel Lasertech Benelux B.V., Baasel Lasertech (U.K.) Ltd, Baasel
Lasertech Asia Pte Ltd, A-B Lasers, Inc.; its 99.00 percent-owned subsidiary,
Baasel Lasertech Espana S.A.; and its 90.00 percent-owned subsidiary, Baasel
Lasertech France S.A.R.L.. All significant intercompany profits, transactions
and balances have been eliminated in consolidation.
(b) Cash Equivalents
Cash equivalents consist of short-term investments with original maturities
of three months or less.
(c) Inventories
Inventories are stated at the lower of cost or market after provisions for
excess and obsolete inventory salable at prices below cost. Costs are
determined using the first in, first out and weighted average cost methods.
(d) Property and Equipment
Property and equipment are recorded at cost and depreciated over their useful
lives, except for leasehold improvements, which are amortized over the lesser
of their useful lives or the term of the lease. The methods of depreciation
are straight-line for financial reporting purposes and on an accelerated
basis for income tax purposes.
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<PAGE>
Depreciable lives for financial reporting purposes are as follows:
Useful Lives
------------
Machinery and equipment.....................3 - 10 years
Furniture and fixtures......................3 - 10 years
Computers and software......................3 - 4 years
Leasehold improvements......................5 - 15 years
(e) Goodwill and other Intangibles
Goodwill represents the excess of purchase price paid over the fair value of
net assets acquired including the push-down of goodwill in Mannesmann's step
acquisition of Baasel Lasertech occurring between November 1992 and December
1999. Goodwill is amortized on a straight-line basis over 15 years. The
amount of goodwill impairment, if any, is measured based on projected
discounted future operating cash flow using a discount rate reflecting the
Company's average cost of funds. The Company believes that no impairment
exists at December 31, 1999 and 1998.
(f) Revenue Recognition
Product revenues are recorded at the time of delivery or factory acceptance
by the customer. Spare parts sales are recorded at the time of shipment and
service revenues are recognized when performed. Maintenance service contracts
are billed in advance as deferred revenue and are recognized as the service
is performed.
(g) Income Taxes
Income taxes are accounted for following Statement of Financial Accounting
Standards No. 109, Accounting for Income Taxes (Statement 109). Under the
asset and liability method of Statement 109, deferred income taxes are
recognized for the future tax consequences attributable to differences
between the financial statement carrying amounts of existing assets and
liabilities and their respective tax bases and operating loss tax
carryforwards. Deferred tax assets and liabilities are measured using enacted
tax rates expected to apply to taxable income in the years in which those
temporary differences are expected to be recovered or settled. Under
Statement 109, the effect on deferred taxes of a change in tax rates is
recognized in income in the period that includes the enactment date. In
assessing the realizability of deferred tax assets, management considers
whether it is more likely than not that some portion or all of the deferred
tax assets will not be realized.
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<PAGE>
(h) Accounting for Warranties
The Company issues a standard warranty of one year or 2,000 hours (whichever
comes first) for parts and labor on lasers that are sold to customers. In
addition extended or varied warranties are negotiated on a contract-by-
contract basis. The Company provides for estimated warranty costs as products
are shipped.
(i) Foreign Currency Translation
For purposes of the accompanying consolidated financial statements, the
reporting currency of the Company is the United States dollar. In general,
the functional currency of the Company and its subsidiaries is the local
currency of the country in which each entity is located. The assets and
liabilities of the Company's operations are translated into U.S. dollars at
exchange rates in effect on the balance sheet date, and revenues and expenses
are translated using a weighted average exchange rate in effect during the
period. Gains or losses resulting from translating foreign currency financial
statements are recorded in a separate component of shareholders' equity.
Gains or losses resulting from transactions occurring in different foreign
currencies are included in miscellaneous income.
(j) Derivative Financial Instruments
Foreign currency forward contracts are utilized by the Company to hedge
foreign currency exchange risk on accounts receivables and committed
transactions. The Company does not enter into financial instruments for
trading or speculative purposes. Realized gains and losses on foreign
currency forward contracts are recognized at the time the underlying
transaction is completed. At December 31, 1999 and 1998, the Company had
$1,516 and $5,355 in foreign currency instruments outstanding, respectively.
(k) Research and Development Expenses
Research and development costs are expensed when incurred and are net of
government grants of $99 and $53 received for the years ended December 31,
1999 and 1998. The Company has no future obligations under such grants.
(l) Financial Instruments
Financial instruments of the Company, consisting principally of cash,
accounts receivable, and accounts payable, are recorded at amounts which
approximate estimated fair value, based upon their current maturity.
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<PAGE>
(m) Comprehensive Income (Loss)
Comprehensive income or loss consists of net income and foreign currency
translation adjustments and is presented in the consolidated statements of
shareholders' equity and comprehensive income.
(n) Use of Estimates
Management of the Company makes a number of estimates and assumptions
relating to the reporting of assets and liabilities and the disclosure of
contingent liabilities to prepare these financial statements in conformity
with generally accepted accounting principles. Actual results could differ
from these estimates.
2. INVENTORIES
Inventories are summarized as follows:
December 31,
--------------------
1999 1998
--------- ---------
Finished goods $ 3,987 $ 4,515
Work in progress 4,827 6,732
Raw materials and supplies 3,180 4,265
Demo inventory 1,274 1,278
Service parts 3,274 3,075
--------- ---------
Total inventories, net $ 16,542 $ 19,865
========= =========
3. PROPERTY AND EQUIPMENT
Property and equipment include the following:
December 31,
-------------------
1999 1998
-------- --------
Technical machinery and equipment $ 940 $ 1,059
Furniture and fixtures 3,047 4,241
Computers and software 1,288 1,203
Leasehold improvements 954 659
-------- --------
Total property and equipment, at cost $ 6,229 $ 7,162
======= ========
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<PAGE>
4. GOODWILL
Goodwill, net includes the following:
1999 1998
--------- ---------
Goodwill $ 22,289 $ 22,213
Accumulated amortization (4,425) (3,777)
--------- ---------
$ 17,864 $ 18,436
========= =========
During 1999 and 1998, goodwill increased by $1,730 and $2,312, respectively
related to Baasel Lasertech's contingent purchase price payments made in the
acquisition of Wegmann-Baasel Laser. In addition, Mannesmann acquired an
additional 3 percent of Baasel Lasertech from a minority shareholder in 1999
resulting in approximately $2,000 of goodwill, which was pushed down to and
recorded on the financial statements of the Company.
5. ACCRUED LIABILITIES
At December 31, 1999 and 1998, accrued liabilities are comprised of the
following:
1999 1998
-------- --------
Employee compensation $ 2,322 $ 2,494
Warranty reserves 1,586 2,084
Customer deposits 2,334 1,657
Other 2,779 3,544
-------- --------
Total accrued liabilities $ 9,021 $ 9,779
======== ========
6. PARENT COMPANY ADVANCES AND LOANS
During 1998 the Company refinanced all of its outstanding bank debt with
loans from its Parent. Interest expense is charged on the outstanding loan
balance primarily at 6 percent.
The Company participates in a cash pooling arrangement and borrows from its
Parent to finance intercompany purchases and meet its operating cash flow
needs. Amounts advanced under this arrangement assume interest at varying
rates, which approximated 3.1 percent at December 31, 1999.
Included in advances from Parent are $40 and $1,984 in current municipal
trade taxes for 1999 and 1998, respectively.
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<PAGE>
7. LEASE COMMITMENTS
The Company leases operating facilities and equipment under operating leases
which expire at various dates.
Minimum lease payments for future fiscal years under non-cancelable operating
leases as of December 31, 1999 are:
Fiscal Year Ending December 31, Total
-------------------------------- ---------
2000 $ 1,601
2001 1,787
2002 1,671
2003 1,290
2004 601
2005 and thereafter 2,482
Rent expense charged to operations for the years ended December 31, 1999 and
1998, approximated $1,206 and $1,246, respectively.
The Company leases an office building and surrounding land under a lease
agreement with a related party which is accounted for as an operating lease.
The lease, which requires monthly rental payments with an annual escalation
provision, extends through June 2017, yet may be cancelled at any time with a
two year termination notice. The Company is required to pay taxes, insurance
and maintenance. Total rent expense under this related party lease, included
in the above table, aggregated $513 and $534 for the years ended December 31,
1999 and 1998, respectively.
8. INCOME TAXES
Income (loss) before income taxes is attributable to the following geographic
regions:
1999 1998
-------- --------
Germany $ 1,919 $ 7,011
United States (154) (992)
France 393 365
Singapore 217 475
Other 988 595
-------- --------
Total $ 3,363 $ 7,454
======== ========
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<PAGE>
The provision for income tax expense (benefit) is comprised of the following
amounts:
1999 1998
-------- --------
Current:
Germany $ 2,597 $ 3,886
Foreign 438 571
-------- --------
Total current 3,035 4,457
-------- --------
Deferred:
Germany (995) (719)
Foreign -- (382)
-------- --------
Total deferred (995) (1,101)
-------- --------
Total income tax expense $ 2,040 $ 3,356
======== ========
German corporate tax law applies the imputation system with regard to the
taxation of the income of a corporation (such as Baasel Lasertech). In
general, retained corporate income is subject to a municipal trade tax (which
for Starnberg is 14.2 percent), which is deductible for federal corporate
income tax purposes, a federal corporate income tax rate of 40 percent (45
percent prior to January 1, 1999) and, a surcharge of 5.5 percent on the
federal corporate income tax amount.
Profits which are distributed by a German corporate taxpayer (such as Baasel
Lasertech) in the form of a dividend are subject to a reduced federal
corporate income tax of 30 percent plus the 5.5 percent surcharge on the
federal corporate income tax amount calculated - at the reduced rate. The
accompanying financial statements assume all profits are distributed to the
Company's Parent.
Statutory tax rates in U.S., France and Singapore approximate 34 percent, 42
percent and 26 percent, respectively, for all periods presented.
The difference between actual income tax expenses and the amount computed by
applying the German statutory income tax rate of 41.3 percent is as follows:
1999 1998
-------- --------
Computed "expected" tax expense $ 1,389 $ 3,074
Non-deductible goodwill amortization 529 537
Difference between German and foreign
statutory rates (45) (37)
Other 167 (218)
-------- --------
Actual tax expense $ 2,040 $ 3,356
======== ========
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<PAGE>
The tax effects of temporary differences that give rise to the net deferred
tax assets are as follows:
Deferred tax assets:
Foreign: 1999 1998
-------- --------
Net operating loss carryforwards $ 799 $ 763
Inventory 404 239
Warranty accrual 23 --
Other accruals 36 139
-------- --------
Total foreign gross deferred tax
assets $ 1,262 1,141
Less: Valuation allowance (600) (600)
------- --------
Net deferred tax assets 662 541
------- --------
Deferred tax liabilities:
Germany:
Accounts receivable (87) (298)
Inventory (688) (1,174)
Warranty reserve (45) (433)
Other accruals (500) (478)
------- --------
Total Germany (1,320) (2,383)
------- --------
Foreign:
Warranty reserve -- (52)
Other (21) (85)
------- --------
Total Foreign (21) (137)
------- --------
Gross deferred tax liabilities (1,341) (2,520)
------- --------
Net deferred tax liabilities $ (679) $(1,979)
======= ========
In assessing the realizability of deferred tax assets, management considers
whether it is more likely than not that some portion or all of the deferred
tax assets will not be realized. The ultimate realization of deferred tax
assets is dependent upon the generation of future taxable income during the
periods in which those temporary differences become deductible. Management
considers the scheduled reversal of deferred tax liabilities, projected
future taxable income, and tax planning strategies in making this assessment.
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<PAGE>
Based upon the level of historical taxable income and projections for future
taxable income over the periods in which the deferred tax assets are
deductible, management believes it is more likely than not that the Company
will realize the benefits of these deductible differences, net of the
existing valuation allowance at December 31, 1999 and 1998.
At December 31, 1999 the Company's U.S. subsidiary has federal net operating
loss carryforwards available of $1,682 and state tax loss carryforwards of
$2,265, with expiration dates ranging from 2009 to 2019. During 1992 the
Company underwent an ownership change as defined under Section 382 of the
Internal Revenue Code. Accordingly, the use of tax net operating losses
generated prior to the ownership change will be restricted in any given year.
Due to this limitation, some net operating losses otherwise deductible may
expire unused. Such loss carryforwards are available to offset taxable income
in future years until expiration in 2009. Future ownership changes may
further limit the Company's ability to utilize net operating losses should
Section 382 apply.
9. SHAREHOLDERS' EQUITY
The Parent contributed an additional $2,383 on November 27, 1998.
On December 21, 1999, the Parent purchased an additional 3 percent of the
Company from a minority shareholder. The addition to shareholders' capital,
of $2,000, representing the difference between the purchase price and the net
assets acquired, is shown as goodwill, pushed down from the Parent to the
company's financial statements.
10. EMPLOYEE BENEFIT PLANS
The Company's U.S. subsidiary has a defined contribution retirement plan
(401(k) Plan) covering employees who have met eligibility requirements. The
Company matches 50 percent of employee contributions up to 10 percent of
their salary. Total employer contributions for the years ended December 31,
1999 and 1998 were $101 and $120, respectively.
11. RELATED PARTY TRANSACTIONS
In addition to related party transactions in notes 6 and 7, other related
party activity of the Company during 1999 and 1998 is summarized below:
1999 1998
-------- --------
Sales and services to Mannesmann $ 2,928 $ 5,359
Purchases from Mannesmann 164 1,037
Administrative charges from Mannesmann 1,116 710
Interest to Mannesmann 660 244
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<PAGE>
The accompanying consolidated financial statements include administrative
charges from Mannesmann for certain expenses incurred on the Company's behalf
(including cash management and treasury, legal, employee benefits, insurance,
income taxes and corporate overhead services) relating to the Company's
businesses. Management believes these charges are reasonable. The
accompanying financial statements also include all goodwill resulting from
the purchase by Mannesmann of Carl Baasel Lasertechnik GmbH.
12. SEGMENT, GEOGRAPHIC AND CUSTOMER INFORMATION
The Company adopted SFAS No. 131, "Disclosures about Segments of an
Enterprise and Related Information", during fiscal 1999. SFAS No. 131
established standards for reporting information about operating segments in
annual financial statements and related disclosures about products and
geographic areas. The Company manages its business under two primary
geographic regions (other geographic areas represent sales and distribution
centers) that are aggregated together as one segment in the global industrial
laser industry. Sales from these regions have similar long-term financial
performance and economic characteristics. The products from these regions
utilize similar manufacturing processes and use similar production equipment,
which may be interchanged from group to group. The Company distributes, sells
and services final products to the same type of customers from both regions.
Assets, revenues and income (loss) before taxes, by geographic region, at
December 31, 1999 and 1998, are summarized below:
ASSETS December 31,
--------------------
1999 1998
--------- ---------
Germany $ 44,398 $ 49,617
United States 9,638 10,885
Other 9,968 8,737
Intercompany eliminations (8,909) (8,650)
--------- ---------
Total assets $ 55,095 $ 60,589
========= =========
REVENUES
Germany $ 56,445 $ 65,520
United States 13,856 18,178
Other 20,875 17,853
Intercompany eliminations (22,644) (22,206)
--------- ---------
Total revenues $ 68,532 $ 79,345
========= =========
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<PAGE>
INCOME BEFORE INCOME TAXES
1999 1998
-------- --------
Germany $ 1,919 $ 7,011
United States (154) (992)
Other 1,598 1,435
-------- --------
Total income before income taxes $ 3,363 $ 7,454
======== ========
13. LITIGATION
The Company is involved in various legal proceedings and claims arising in
the ordinary course of business. Management believes that the disposition of
these matters would not have a material effect on the financial position or
results of the Company.
14. SUBSEQUENT EVENTS
On May 10, 2000 Mannesmann sold its 90.01 percent interest in the Company to
Rofin-Sinar Laser GmbH, a subsidiary of Rofin-Sinar Technologies, Inc. for
EUR44.4 million (US$40 million) in cash.
15. RECENTLY ISSUED ACCOUNTING STANDARDS
In June 1998 the Financial Accounting Standards Board SFAS No. 133 published
"Accounting for Derivative Instruments and Hedging Activities". SFAS 133
prescribed the accounting standards for derivatives. According to SFAS 133
all derivatives shall be recorded as assets or liabilities in the balance
sheet and should be valued at their fair value. In June 1999 the Financial
Accounting Standards Board published SFAS No. 137 "Accounting for Derivative
Instruments and Hedging Activities - Deferral of the Effective Date of FASB
Statement No. 133, an Amendment of FASB Statement No. 133". This postponed
the effective date of SFAS 133. SFAS 133 in its current form now applies to
all calendar quarters of all financial years which start after June 15, 2000.
The Company has not determined the effect SFAS 133 will have on its financial
statements.
- 20 -
<PAGE>
Exhibit 20.2 -
Unaudited Pro Forma Condensed Combined Financial Statements of Registrant and
Carl Baasel Lasertechnik GmbH
PRO FORMA CONDENSED COMBINED FINANCIAL STATEMENTS
The following unaudited pro forma condensed combined financial statements
reflect the acquisition of Carl Baasel Lasertechnik GmbH (Baasel Lasertech)
by Rofin-Sinar Technologies, Inc. (RSTI).
The unaudited pro forma condensed combined balance sheet as of March 31, 2000
was prepared as if the acquisition had occurred on that date. The unaudited
pro forma condensed combined statements of operations for the year ended
September 30, 1999, and the six months ended March 31, 2000 were prepared as
if the transaction had occurred on October 1, 1998 and include the statements
of operations of the respective entities for the periods shown below.
In the opinion of management, all adjustments necessary to present fairly the
pro forma condensed combined financial statements have been made based on the
terms and structure of the acquisition. The Baasel Lasertech acquisition will
be accounted for by the purchase method of accounting. Under purchase
accounting, the total purchase price will be allocated to the tangible and
intangible assets and liabilities of Baasel Lasertech based upon their
respective fair values as of the effective date of the Baasel Lasertech
acquisition based on valuations and other studies which are not yet
available. A preliminary allocation of the purchase price has been made to
major categories of assets and liabilities in the accompanying pro forma
financial statements based on available information. The actual allocation of
purchase price and resulting effect on income from operations may differ
significantly from the pro forma amounts included herein. These pro forma
adjustments represent RSTI's management's preliminary determination of
purchase accounting adjustments and are based upon available information and
certain assumptions that RSTI believes to be reasonable. Consequently, the
amounts reflected in the pro forma financial statements are subject to
change, and the final amounts may differ substantially.
These unaudited pro forma condensed combined financial statements are not
necessarily indicative of what actual results would have been had the
acquisition of Baasel Lasertech by RSTI occurred at the beginning of the
period nor do they purport to indicate the results of future operations of
RSTI and Baasel Lasertech. The unaudited pro forma condensed combined
financial statements should be read in conjunction with the accompanying
notes and the historical financial statements and notes thereto of RSTI and
Baasel Lasertech.
- 21 -
<PAGE>
Unaudited Pro Forma Condensed Combined Statement of Operations
Six Months Ended March 31, 2000
(dollars in thousands, except earnings per share information)
Baasel
RSTI Lasertech
Six Months Six Months
Ended Ended Pro Pro
March 31, December 31, Forma Forma
2000 1999 Adjustments Combined
---------- ---------- ---------- ---------
Net sales $ 67,768 $ 35,227 $ ( 220)(d) $102,775
Cost of goods sold 43,658 21,507 ( 220)(d) 64,945
---------- ---------- --------- ---------
Gross profit 24,110 13,720 -- 37,830
Selling, general and
administrative 12,112 9,520 730 (a) 22,362
Research and development 5,701 2,242 -- 7,943
---------- ---------- --------- ---------
Income from operations 6,297 1,958 (730) 7,525
Interest income (1,057) (102) 205 (b) (954)
Interest expense 527 577 663 (b) 1,767
Minority interests 224 10 -- 234
Miscellaneous income (218) (139) -- (357)
--------- --------- -------- ---------
Income (loss) before tax 6,821 1,612 (1,598) 6,835
Income tax (expense) credit:
Current (3,352) (1,321) -- (4,673)
Deferred 17 347 355 (c) 719
---------- ---------- --------- ---------
(3,335) (974) 355 (3,954)
---------- ---------- ---------- ---------
Net income (loss) $ 3,486 $ 638 $ (1,243) $ 2,881
========== ========== ========== =========
Net income per common share:
Basic $ 0.25
Diluted $ 0.25
=========
Weighted average shares used in computing net income per share:
Basic 11,533,400
Potential diluted shares due to outstanding
dilutive stock options 50,825
-----------
Diluted 11,584,225
===========
See accompanying notes to the pro forma condensed combined statement of
operations.
- 22 -
<PAGE>
NOTES TO THE PRO FORMA CONDENSED COMBINED STATEMENT OF OPERATIONS
Six Months Ended March 31, 2000
(dollars in thousands)
(a) The acquisition of Baasel Lasertech has been accounted for by the
purchase method of accounting. Under purchase accounting, the total
purchase price is allocated to the tangible and intangible assets and
liabilities of Baasel Lasertech based upon the fair market values at the
closing date of the transaction, based upon preliminary valuations, which
have not yet been completed. It is estimated that the fair market value
of Baasel Lasertech's tangible assets approximates their historical net
book value. The remaining purchase price is allocated to intangibles and
goodwill. The increase in amortization expense relates to the
amortization of the acquired goodwill and intangibles recorded in
connection with the Baasel Lasertech acquisition of $730. The acquired
goodwill and intangibles are based on estimated values and are amortized
using the straight-line method over 15 years, the current estimated
useful life.
(b) Reflects the elimination of RSTI's interest income of $205, earned on
U.S. short-term investments used in the purchase, and the incremental
interest expense of $663 incurred on the additional debt borrowed in
Germany to finance the Baasel Lasertech acquisition. The corresponding
interest rates were 4.8 percent and 4.0 percent, respectively.
(c) Reflects the tax effect of the pro forma interest income and expense
adjustments based on the corresponding countries' income tax rate (34.0
percent and 43.1 percent).
(d) Reflects the elimination of intercompany sales and purchases.
- 23 -
<PAGE>
Unaudited Pro Forma Condensed Combined Statement of Operations
Year Ended September 30, 1999
(dollars in thousands, except earnings per share information)
Baasel
RSTI Lasertech
Year Year
Ended Ended Pro Pro
September December Forma Forma
30, 1999 31, 1999 Adjustments Combined
---------- ---------- ---------- ---------
Net sales $ 124,023 $ 68,532 $ ( 154)(d) $192,401
Cost of goods sold 82,230 41,448 ( 154)(d) 123,524
---------- ---------- --------- ---------
Gross profit 41,793 27,084 -- 68,877
Selling, general and
administrative 24,047 19,003 1,459 (a) 44,509
Research and development 11,808 4,357 -- 16,165
---------- ---------- --------- ---------
Income from operations 5,938 3,724 (1,459) 8,203
Interest income (1,697) (198) 410 (b) (1,485)
Interest expense 995 1,237 1,326 (b) 3,558
Minority interests 78 24 -- 102
Miscellaneous income (314) (702) -- (1,016)
---------- ---------- --------- ---------
Income (loss) before tax 6,876 3,363 (3,195) 7,044
Income tax (expense) credit:
Current (3,795) (3,035) -- (6,830)
Deferred 553 995 711 (c) 2,259
---------- ---------- --------- ---------
(3,242) (2,040) 711 (4,571)
---------- ---------- --------- ---------
Net income (loss) $ 3,634 $ 1,323 $ (2,484) $ 2,473
========== ========== ========= =========
Net income per common share:
Basic $ 0.21
Diluted $ 0.21
=========
Weighted average shares used in computing net income per share:
Basic 11,527,400
Diluted 11,527,400
===========
See accompanying notes to the pro forma condensed combined statement of
operations.
- 24 -
<PAGE>
NOTES TO THE PRO FORMA CONDENSED COMBINED STATEMENT OF OPERATIONS
Year Ended September 30, 1999
(dollars in thousands)
(a) The acquisition of Baasel Lasertech has been accounted for by the
purchase method of accounting. Under purchase accounting, the total
purchase price is allocated to the tangible and intangible assets and
liabilities of Baasel Lasertech based upon the fair market values at the
closing date of the transaction, based upon preliminary valuations, which
have not yet been completed. It is estimated that the fair market value
of Baasel Lasertech's tangible assets approximates their historical net
book value. The remaining purchase price is allocated to intangibles and
goodwill. The increase in amortization expense relates to the
amortization of the acquired goodwill and intangibles recorded in
connection with the Baasel Lasertech acquisition of $1,459. The acquired
goodwill and intangibles are based on estimated values and are amortized
using the straight-line method over 15 years, the current estimated
useful life.
(b) Reflects the elimination of RSTI's interest income of $410, earned on
U.S. short-term investments used in the purchase, and the incremental
interest expense of $1,326 incurred on the additional debt borrowed in
Germany to finance the Baasel Lasertech acquisition. The corresponding
interest rates were 4.8 percent and 4.0 percent, respectively.
(c) Reflects the tax effect of the pro forma interest income and expense
adjustments based on the corresponding countries' income tax rate (34.0
percent and 43.1 percent).
(d) Reflects the elimination of intercompany sales and purchases.
- 25 -
<PAGE>
Unaudited Pro Forma Condensed Combined Balance Sheet
March 31, 2000
(dollars in thousands)
Baasel
RSTI Lasertech Pro Pro
March 31, December 31, Forma Forma
2000 1999 Adjustments Combined
---------- ---------- ---------- ----------
Cash and short-term investment $ 36,013 $ 849 $ (8,547)(c) $ 28,315
Trade accounts receivable, net 34,773 16,451 -- 51,224
Accounts receivable, related
party -- 464 -- 464
Prepaid expense and other 1,850 932 -- 2,782
Inventories, net 40,791 16,542 -- 57,333
Deferred tax asset 3,710 -- -- 3,710
---------- ---------- --------- ----------
Current assets 117,137 35,238 (8,547) 143,828
Net property, plant,
and equipment 19,716 1,537 -- 21,253
Deferred tax assets 2,517 193 -- 2,710
Goodwill and other intangibles 4,202 17,864 21,888 (a) 43,954
Other noncurrent assets 473 263 -- 736
---------- ---------- --------- ----------
Total assets $ 144,045 $ 55,095 $ 13,341 $ 212,481
========== ========== ========= ==========
Bank indebtedness $ 18,296 $ -- $ 54,911(b,c) $ 73,207
Accounts payable, trade 9,367 3,400 -- 12,767
Loans and advances from Parent -- 23,458 (23,458)(b,c) --
Income tax payable 1,788 170 -- 1,958
Accrued liabilities 13,745 9,021 -- 22,766
Deferred income tax, current -- 872 -- 872
---------- ---------- --------- ---------
Total current liabilities 43,196 36,921 31,453 111,570
Long-term debt 6,029 -- -- 6,029
Pension and other long-term
liabilities 5,087 62 -- 5,149
---------- ---------- --------- ---------
Total liabilities 54,312 36,983 31,453 122,748
Common stock 115 -- -- 115
Paid in capital 75,987 21,329 (21,329)(a) 75,987
Retained earnings 22,754 (3,374) 3,374 (a) 22,754
Accumulated other comprehensive
income (9,123) 157 (157)(a) (9,123)
---------- ---------- --------- ----------
Total stockholders' equity 89,733 18,112 (18,112) 89,733
---------- ---------- --------- ----------
Total liabilities and
stockholders' equity $ 144,045 $ 55,095 $ 13,341 $ 212,481
========== ========== ========= ==========
See notes to pro forma condensed combined balance sheet.
- 26 -
<PAGE>
NOTES TO THE PRO FORMA CONDENSED COMBINED BALANCE SHEET
March 31, 2000
(dollars in thousands)
(a) The estimated purchase price and preliminary adjustments to historical
book value of Baasel Lasertech as a result of the Baasel Lasertech
acquisition are as follows:
Purchase price in excess of net assets acquired:
Cash consideration $ 40,000
Book value of net assets acquired (18,112)
----------
Purchase price in excess of net assets
acquired $ 21,888
==========
Preliminary allocation of purchase price in
excess of net assets acquired
Estimated goodwill and other intangibles $ 21,888
==========
(b) Reflects the refinancing of the outstanding loans and advances from
Mannesmann at the date of acquisition.
Repayment of Parent loans and advances $ 23,458
New bank debt (23,458)
----------
Net change in indebtedness $ --
==========
(c) Reflects the estimated sources and uses of funds for the Baasel
Lasertech acquisition and the application of the net proceeds therefrom
As follows, assuming such transactions occurred at March 31, 2000:
Sources of Funds;
New bank debt $ 54,911
Cash usage 8,547
----------
Total Sources of Funds $ 63,458
==========
Uses of Funds;
Net cash consideration for Baasel Lasertech
acquisition $ 40,000
Repayment of Parent loans and advances 23,458
----------
Total Uses of Funds $ 63,458
==========
- 27 -
<PAGE>
SIGNATURE
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 hereunto duly authorized.
Rofin-Sinar Technologies Inc.
---------------------------------
(Registrant)
Date: July 24, 2000 /S/ Gunther Braun
---------------------------------
Gunther Braun
Executive Vice President,
Finance and Administration, and
Chief Financial Officer
Error! Unknown document property name. Draft: July 24, 2000
