<PAGE> 1
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K/A-1
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934
Date of Report (Date of earliest event reported) July 24, 1998
-------------------------------
UNIFAB International, Inc.
- --------------------------------------------------------------------------------
(Exact name of registrant as specified in its charter)
Louisiana 0-29416 72-1382998
- ---------------------------- ---------------------- -------------------
(State or other jurisdiction Commission file number (I.R.S. Employer
of incorporation) Identification No.)
5007 Port Road
New Iberia, LA 70562
- ---------------------------------------- ----------
(Address of principal executive offices) (Zip Code)
(318) 367-8291
- --------------------------------------------------------------------------------
(Registrant's telephone number, including area code)
Not applicable
- --------------------------------------------------------------------------------
(Former name, former address and former fiscal year, if changed
since last report)
<PAGE> 2
On August 10, 1998, UNIFAB International, Inc. ("UNIFAB") filed a Form 8-K dated
July 24, 1998 containing a description of the acquisition of Allen Tank, Inc.
("Allen Tank"). This Form 8-K/A-1 amends and restates the disclosure in Item 2
and Item 7(a) and 7(b) of the Form 8-K dated July 24, 1998 to include the
audited financial statements of Allen Tank and pro forma financial information.
Item 2. Acquisition or Disposition of Assets.
On July 24, 1998 UNIFAB International, Inc. ("UNIFAB") acquired Allen
Tank, Inc. ("Allen Tank") for 819,000 shares of UNIFAB common stock, $400,000 in
cash and notes of $800,000 from Vincent J. Cuevas, Walter L. Hampton, William A.
Hines, Allen C. Porter, Jr. and Joseph G. Weisberger (the "Allen Tank
Shareholders"). The purchase price was determined by arm's length negotiation
between UNIFAB and the Allen Tank Shareholders, all of whom are individuals who
were unrelated to UNIFAB prior to the acquisition. Cash at closing was paid from
available funds. Allen Tank, located in New Iberia, Louisiana on property near
UNIFAB's Port of Iberia facilities, designs and manufactures specialized process
systems, such as oil and gas separation systems, gas dehydration and treatment
systems, and oil dehydration and desalting systems, and other production
equipment related to the development and production of oil and gas reserves.
Allen Tank also provides a full complement of engineering and field
commissioning services related to production systems. The acquisition is to be
accounted for as a pooling of interests. Also on July 24, 1998 UNIFAB acquired
LATOKA Engineering, Ltd. ("LATOKA") from certain of the Allen Tank Shareholders
for 79,000 shares of UNIFAB common stock. LATOKA, headquartered in London,
England, provides engineering and project management services primarily in
Europe and the Middle East.
The signing of the letter of intent and the completion of the
acquisition were announced in the press releases, dated May 5, 1998 and July 27,
1998, respectively. Additional information relating to the acquisitions is set
forth in the Agreement and Plan of Merger relating to the Allen Tank acquisition
and the Agreement and Plan of Merger relating to the LATOKA acquisition. A copy
of each of there documents was filed as an exhibit to the Form 8-K dated July
24, 1998.
1
<PAGE> 3
Item 7. Financial Statements and Exhibits.
(a) Financial Statements of Allen Tank:
Independent Auditor's Report
Balance Sheets at December 27, 1997 and December 28, 1996
Statements of Income and Retained Earnings (Operating Deficit)
for the fifty-two week periods ended December 27, 1997 and
December 28, 1996
Statements of Cash Flows for the fifty-two week periods ended
December 27, 1997 and December 28, 1996
Notes to Financial Statements
(b) Pro forma Financial Information (Unaudited):
(1) Unaudited Pro Forma Condensed Combined Balance Sheet of
UNIFAB as of June 30, 1998, including the notes thereto.
(2) Unaudited Pro Forma Condensed Combined Statement of Income
of UNIFAB for the three months ended June 30, 1998,
including the notes thereto.
(3) Unaudited Pro Forma Condensed Combined Statement of Income
of UNIFAB for the year ended March 31, 1998, including the
notes thereto.
(c) Exhibits
Exhibit
Number Description
2.1 Agreement and Plan of Merger relating to the
acquisition of Allen Tank, Inc. incorporated herein by
reference to Exhibit 2.1 to the Company's report on
Form 8-K dated July 24, 1998.
2.2 Agreement and Plan of Merger relating to the
acquisition of LATOKA Engineering, Ltd. incorporated
herein by reference to Exhibit 2.2 to the Company's
report on Form 8-K dated July 24, 1998.
23.1 Consent of LaPorte, Sehrt, Romig & Hand, a
Professional Accounting Corporation.
99.1 Press release issued by the Company on May 5, 1998
announcing the signing of a letter of intent with the
Allen Tank Shareholders to acquire Allen Tank, Inc.
incorporated herein by reference to Exhibit 99.1 to
the Company's report on Form 8-K dated July 24, 1998.
99.2 Press release issued by the Company on July 27, 1998
announcing it had completed the acquisition Allen
Tank, Inc. incorporated herein by reference to Exhibit
99.2 to the Company's report on Form 8-K dated July
24, 1998.
2
<PAGE> 4
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.
UNIFAB International, Inc.
--------------------------------------------
Date October 6, 1998 /s/ Peter J. Roman
-------------------------- --------------------------------------------
Peter J. Roman
Vice President and Chief Financial Officer
(Principal Financial and Accounting Officer)
3
<PAGE> 5
The Board of Directors
ALLEN TANK, INC.
Independent Auditor's Report
We have audited the balance sheets of ALLEN TANK, INC. as of December
27, 1997 and December 28, 1996, and the related statements of income, retained
earnings (operating deficit), and cash flows for the fifty-two week periods then
ended. 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 audits 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 financial statements referred to above present
fairly, in all material respects, the financial position of ALLEN TANK, INC. as
of December 27, 1997 and December 28, 1996, and the results of its operations
and its cash flows for the periods then ended in conformity with generally
accepted accounting principles.
LaPorte, Sehrt. Romig & Hand
A Professional Accounting Corporation
Metairie, Louisiana
March 4, 1998
4
<PAGE> 6
ALLEN TANK, INC.
BALANCE SHEETS
ASSETS
<TABLE>
<CAPTION>
December 27, December 28,
1997 1996
------------ ------------
<S> <C> <C>
CURRENT ASSETS:
Cash $ 103,065 $ 433,848
Accounts Receivable 9,101,963 6,603,966
Accounts Receivable - Affiliates -- 156,630
Costs and Earnings in Excess
Of Billings on Jobs in Progress 1,772,011 4,882,852
Inventories 401,516 539,608
Prepaid Expenses and Other 264,026 279,319
------------ ------------
Total Current Assets 11,642,581 12,896,223
------------ ------------
PROPERTY, PLANT AND EQUIPMENT, AT COST:
Land, Buildings and Leasehold Improvements 1,801,394 1,750,174
Machinery and Equipment 4,314,940 3,971,008
Furniture, Fixtures and Other 437,124 406,763
------------ ------------
6,553,458 6,127,945
Less: Accumulated Depreciation (4,022,575) (3,521,980)
------------ ------------
Net Property, Plant and Equipment 2,530,883 2,605,965
------------ ------------
OTHER ASSETS:
Accounts Receivable - Affiliates 879,033 754,076
Notes Receivable 189,420 351,433
Cash Surrender Value - Officer's Life Insurance 58,695 24,213
------------ ------------
1,127,148 1,129,722
------------ ------------
$ 15,300,612 $ 16,631,910
============ ============
</TABLE>
The accompanying notes are an integral part of these financial statements.
5
<PAGE> 7
LIABILITIES AND STOCKHOLDERS' EQUITY (DEFICIT)
<TABLE>
<CAPTION>
December 27, December 28,
1997 1996
------------ ------------
<S> <C> <C>
CURRENT LIABILITIES:
Notes Payable $ 11,300,000 $ 14,500,000
Accounts Payable 1,423,281 2,926,338
Billing in Excess of Costs and
Earnings on Jobs in Progress 1,758,548 506,772
Accounts Payable - Affiliates 16,691 752
Accrued Liabilities 621,819 359,128
------------ ------------
Total Current Liabilities 15,120,339 18,292,990
------------ ------------
STOCKHOLDERS' EQUITY (DEFICIT):
Common Stock, $1, Par Value, 1,000
Shares Authorized and Issued 1,000 1,000
Retained Earnings (Operating Deficit) 179,273 (1,662,080)
------------ ------------
Stockholders' Equity (Deficit) 180,273 (1,661,080)
------------ ------------
$ 15,300,612 $ 16,631,910
============ ============
</TABLE>
6
<PAGE> 8
ALLEN TANK, INC.
STATEMENTS OF INCOME AND
RETAINED EARNINGS (OPERATING DEFICIT)
<TABLE>
<CAPTION>
For the Fifty-Two Week
Periods Ended
------------------------------
December 27, December 28,
1997 1996
------------ ------------
<S> <C> <C>
NET SALES $ 40,606,312 $ 25,585,377
COSTS AND EXPENSES:
Costs of Sales 33,987,731 21,300,259
Selling, General and Administrative
Expenses 3,839,637 2,941,582
------------ ------------
37,827,368 24,241,841
------------ ------------
OPERATING INCOME 2,778,944 1,343,536
INTEREST EXPENSE (1,005,018) (1,104,021)
OTHER INCOME 67,427 47,730
------------ ------------
NET INCOME 1,841,353 287,245
(OPERATING DEFICIT) - BEGINNING OF
PERIOD (1,662,080) (1,949,325)
------------ ------------
RETAINED EARNINGS (OPERATING DEFICIT) -
END OF PERIOD $ 179,273 $ (1,662,080)
============ ============
</TABLE>
The accompanying notes are an integral part of these financial statements.
7
<PAGE> 9
ALLEN TANK, INC.
STATEMENTS OF CASH FLOWS
INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS
<TABLE>
<CAPTION>
For the Fifty-Two Week
Periods Ended
-----------------------------
December 27, December 28,
1997 1996
----------- -----------
<S> <C> <C>
CASH FLOWS FROM OPERATING ACTIVITIES:
Net Income $ 1,841,353 $ 287,245
Adjustments to Reconcile Net Income to Net Cash
Provided by (Used in) Operating Activities:
Depreciation 530,920
508,976
Increase in Accounts Receivable (2,497,997) (2,603,844)
(Increase) Decrease in Accounts Receivable - Affiliates 31,673
(261,262)
Decrease in Inventories 138,092 422,520
(Increase) Decrease in Cost and Earnings in
Excess of Billings on Jobs in Progress 3,110,841 (2,128,018)
(Increase) Decrease in Prepaid Expenses and Other 15,293 (16,012)
Increase (Decrease) in Accounts Payable (1,503,057) 1,894,935
Increase in Billing in Excess of Costs
And Earnings on Jobs in Progress 1,251,776 506,772
Increase (Decrease) in Accounts
Payable - Affiliate 15,939 (17,423)
Increase in Accrued Liabilities 262,692
44,315
Decrease in Notes Receivable 152,932 --
Gain on Sale Property, Plant
And Equipment (343) (986)
----------- -----------
Net Cash Provided by (Used In)
Operating Activities 3,350,114 (1,362,782)
----------- -----------
</TABLE>
The accompanying notes are an integral part of these financial statements.
8
<PAGE> 10
ALLEN TANK, INC.
STATEMENTS OF CASH FLOWS (CONTINUED)
INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS
<TABLE>
<CAPTION>
For the Fifty-Two Week
Periods Ended
-----------------------------
December 27, December 28,
1997 1996
------------ ------------
<S> <C> <C>
CASH FLOWS FROM INVESTING ACTIVITIES:
Capital Expenditures (463,996) (470,586)
Proceeds from Sale of Property, Plant
and Equipment 8,500 4,000
Increase in Cash Surrender Value -
Officer's Life Insurance (34,482) (13,686)
(Increase) Decrease in Notes Receivable 9,081 (20,178)
----------- -----------
Net Cash used in Investing Activities (480,897) (500,450)
----------- -----------
CASH FLOWS FROM FINANCING ACTIVITIES:
Net Increase (Decrease) in Line-of-Credit (3,200,000) 2,200,000
----------- -----------
Net Cash Provided by (Used in)
Financing Activities (3,200,000) 2,200,000
----------- -----------
NET INCREASE (DECREASE) IN CASH
AND CASH EQUIVALENTS (330,783) 336,768
CASH AND CASH EQUIVALENTS AT
BEGINNING OF PERIOD 433,848 97,080
----------- -----------
CASH AND CASH EQUIVALENTS AT
END OF PERIOD $ 103,065 $ 433,848
=========== ===========
SUPPLEMENTAL DISCLOSURE OF CASH
FLOW INFORMATION:
Cash Paid During the Year for Interest $ 951,945 $ 1,101,891
=========== ===========
</TABLE>
The accompanying notes are an integral part of these financial statements.
9
<PAGE> 11
ALLEN TANK, INC.
NOTES TO FINANCIAL STATEMENTS
For the Fifty-Two Week Periods
Ended December 27, 1997 and December 28, 1996
NOTE A
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
Company's Operations
The Company was incorporated January 28, 1988 and in February
1988 purchased certain property, plant and equipment from
Maloney-Crawford, Inc. for $3,100,000. In March 1988, the Company
commenced operations as a fabricator of oil and gas production
equipment. The Company grants credit to its customers, who are located
worldwide.
Depreciation
Depreciation is computed using the straight-line method over
estimated useful lives of 19 to 39 years for buildings and leasehold
improvements, 3 to 15 years for machinery and equipment and 5 to 12
years for furniture, fixtures and other. Depreciation charged to
operations amounted to $530,920 and $508,976 for the periods ended
December 27, 1997 and December 28, 1996, respectively.
Inventories
Inventories consist principally of raw materials and
equipment, which are carried at the lower of cost, specific
identification, or market, and work-in-progress which is accounted for
by the percentage-of-completion method based on direct labor hours
incurred in providing the services required under the contract.
Income Taxes
The Company is an S Corporation for Federal income tax
purposes. Under this election, taxable income or loss of the Company is
included in the stockholders' tax returns. Effective for 1991, the
state of Louisiana also recognizes S Corporation status. Consequently,
for state income tax purposes, the net operating loss carryforwards of
approximately $1,515,225 are suspended and will be available in the
event the Company revokes its S Corporation status.
Cash and Cash Equivalents
For purposes of the statement of cash flows, the Company
considers all highly liquid investments purchased with a maturity of
three months or less to be cash equivalents.
10
<PAGE> 12
NOTE A
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
Accounts Receivable
Uncollectible accounts receivable are charged directly against
earnings when they are determined to be uncollectible. Use of this
method does not result in a material difference from the valuation
method required by generally accepted accounting principles.
At December 27, 1997 and December 28, 1996, accounts
receivable included unbilled amounts of $424,208 and $192,688,
respectively.
Non-Direct Response Advertising
The Company expenses advertising costs as incurred.
Advertising expense charged to operations totaled $31,830 and $33,909
for the periods ended December 27, 1997 and December 28, 1996,
respectively.
Use of Estimates
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 disclosures of contingent assets and liabilities at
the date of the financial statements and the reported amounts of
revenues and expenses during the reporting period. Actual results could
differ from those estimates.
NOTE B
RELATED PARTY TRANSACTIONS
During the periods ended December 27, 1997 and December 28,
1996, the Company had sales to affiliated companies of approximately
$557,116 and $267,119, respectively. Transactions with affiliates and
shareholders also included the borrowing and lending of funds and
certain administrative services provided by an affiliated company at
terms determined by management. Interest expense to affiliates and
shareholders for the periods ended December 27, 1997 and December 28,
1996 was $922,981 and $939,753, respectively.
NOTE C
COMMITMENTS AND CONTINGENCIES
The Company leases the land used in its operations under an
operating lease with future minimum lease payments at December 27, 1997
as follows: 1998 - 2006 - $40,478 annually. The lease renewed in 1996
for ten years and contains one more renewal option for a ten-year
period at minimum annual lease rates of $40,478. Total rent expense for
the periods ended December 27, 1997 and December 28, 1996 was $60,224
and $61,077, respectively.
11
<PAGE> 13
NOTE D
NOTES PAYABLE
The Company has available lines of credit from a bank totaling
$20,000,000 at December 27, 1997 and December 28, 1996. Bank borrowings
consist of a note payable of $11,300,000 and Letters of Credit of
$8,556,816 outstanding against the lines at December 27, 1997 and a
note payable of $14,500,000 and Letters of Credit of $5,235,916
outstanding against the lines at December 28, 1996, bearing interest at
prime (7.72% and 7.48% as of December 27, 1997 and December 28, 1996),
secured by property, plant and equipment, an assignment of rents,
accounts receivable, inventory and is guaranteed by the Company's
principal stockholder.
NOTE E
OFF-BALANCE SHEET RISK
During the period ended December 27, 1997, the Company
maintained balances in a financial institution in excess of the
federally insured limit.
NOTE F
EMPLOYEE BENEFIT PLAN
A 401(k) employee benefit plan was adopted in 1991 to cover
substantially all employees. The Company matches a portion of employee
contributions pursuant to the plan. Contributions of $111,132 and
$102,892 were charged to operations for the periods ended December 27,
1997 and December 28, 1996, respectively.
NOTE G
DEFERRED COMPENSATION AGREEMENTS
The Company has entered into deferred compensation agreements
with its key employees. The agreements call for fifteen annual payments
to the employee, or his beneficiary, upon retirement from the Company
after reaching age sixty-five or seventy. The agreements further
provide that in the event the employee deceases prior to retirement,
fifteen annual payments will be made to his designated beneficiary.
Employees are not considered vested until retirement, or death.
12
<PAGE> 14
UNIFAB INTERNATIONAL, INC.
PRO FORMA CONDENSED COMBINED FINANCIAL STATEMENTS (UNAUDITED)
BASIS OF PRESENTATION
The accompanying pro forma condensed combined balance sheet as of June 30,
1998 and the related pro forma condensed combined statements of income for the
three months ended June 30, 1998 and for the year ended March 31, 1998 give
effect to the July 24, 1998 acquisition Allen Tank, Inc. ("Allen Tank") under
the pooling of interests method of accounting.
The pro forma condensed combined balance sheet combines the unaudited June
30, 1998 condensed balance sheet of UNIFAB International, Inc. ("UNIFAB") with
the June 11, 1998 unaudited balance sheet of Allen Tank. The pro forma condensed
combined statements of income combine the unaudited results of operations of
UNIFAB for the three months ended June 30, 1998 with the unaudited results of
operations of Allen Tank for the twelve week period from March 22, 1998 to June
13, 1998; and the audited results of operations of UNIFAB for the year ended
March 31, 1998 (UNIFAB's fiscal year end) with the audited results of operations
of Allen Tank for the fifty-two week period ended December 27, 1997 (Allen
Tank's fiscal year end), respectively. The pro forma condensed combined
financial statements are based on the historical financial statements of UNIFAB
and Allen Tank, giving effect to the assumptions and adjustments in the
accompanying notes to the pro forma condensed combined financial statements.
The pro forma condensed combined financial statements have been prepared by
UNIFAB's management and include such adjustments to reflect the pro forma
financial results as if the acquisition described above had occurred as of June
30, 1998 for the pro forma balance sheet. The pro forma condensed combined
statement of income for the year ended March 31, 1998 assumes the acquisition
was effected April 1, 1997. The pro forma condensed combined statement of income
for the three months ended June 30, 1998 assumes the acquisition was effected
April 1, 1998.
The pro forma financial statements should be read in conjunction with the
historical financial statements and notes thereto of UNIFAB and Allen Tank,
which are included elsewhere in this Form 8-K/A-1. The pro forma financial
statements may not be indicative of the results that would have occurred if the
events described above had taken place on the dates indicated or which may be
obtained in the future.
13
<PAGE> 15
UNIFAB INTERNATIONAL, INC.
PRO FORMA CONDENSED COMBINED BALANCE SHEET (UNAUDITED)
JUNE 30, 1998
<TABLE>
<CAPTION>
UNIFAB
INTERNATIONAL, PRO FORMA PRO FORMA
INC. ALLEN TANK ADJUSTMENTS COMBINED
-------------- ---------- ------------ ------------
<S> <C> <C> <C> <C> <C>
ASSETS
Current assets:
Cash and cash equivalents ................ $ 6,217,037 $ -- $ (400,000)(1) $ 5,817,037
Accounts receivable ...................... 16,465,901 3,571,353 -- 20,037,254
Costs and estimated earnings in excess
of billings on uncompleted ............ 214,234 5,880,513 -- 6,094,747
contracts
Prepaid expenses ......................... 744,343 416,384 -- 1,160,727
Other current assets ..................... 200,747 380,039 -- 580,786
------------ ------------ ------------ ------------
Total current assets .................. 23,842,262 10,248,289 (400,000) 33,690,551
Property, plant and equipment, net ......... 14,097,562 2,488,973 16,586,535
Goodwill ................................... 6,629,891 -- 6,629,891
Accounts receivable - affiliates .......... -- 1,080,937 1,080,937
Other assets ............................... 860,965 172,235 220,235 (3) 1,253,435
------------ ------------ ------------ ------------
Total assets .......................... $ 45,430,680 $ 13,990,434 $ (179,765) $ 59,241,349
============ ============ ============ ============
LIABILITIES AND EQUITY
Current liabilities:
Accounts payable ......................... $ 5,653,686 $ 2,294,701 $ -- $ 7,948,387
Borrowings under line of credit .......... -- 8,075,000 -- 8,075,000
Billings in excess of costs and
Estimated earnings on uncompleted
Contracts ............................. 903,821 427,495 -- 1,331,316
Accrued liabilities ...................... 942,753 716,039 -- 1,658,792
Payroll and related liabilities .......... 542,930 6,346 -- 549,276
Income tax payable ....................... 934,455 -- -- 934,455
Notes payable ............................ 195,423 -- 400,000 (1) 595,423
------------ ------------ ------------ ------------
Total current liabilities ............. 9,173,068 11,519,581 400,000 21,092,649
Deferred income taxes ...................... 974,556 -- 742,355 (3) 1,716,911
Other noncurrent liabilities ............... 541,517 -- 400,000 (1) 941,517
Equity ..................................... 34,741,539 2,470,853 (1,200,000)(1) 35,490,272
(522,120)(3)
------------ ------------ ------------ ------------
Total liabilities and equity .......... $ 45,430,680 $ 13,990,434 $ (179,765) $ 59,241,349
============ ============ ============ ============
</TABLE>
See accompanying notes to pro forma condensed combined financial
statements (unaudited).
14
<PAGE> 16
UNIFAB INTERNATIONAL, INC.
PRO FORMA CONDENSED COMBINED STATEMENT OF INCOME (UNAUDITED)
<TABLE>
<CAPTION>
UNIFAB ALLEN TANK, INC.
INTERNATIONAL, INC. TWELVE WEEK
THREE MONTHS ENDED PERIOD ENDED PRO FORMA PRO FORMA
JUNE 30, 1998 JUNE 13, 1998 ADJUSTMENTS COMBINED
------------------- ---------------- ------------ ------------
<S> <C> <C> <C> <C>
Revenue ........................................ $ 19,662,324 $ 9,055,679 $ -- $ 28,718,003
Cost of revenue ................................ 16,172,517 6,747,265 -- 22,919,782
------------ ------------ ------------ ------------
Gross profit ................................... 3,489,807 2,308,414 -- 5,798,221
General and administrative expense ............. 1,048,025 889,973 141,800 (2) 2,079,798
------------ ------------ ------------ ------------
Income from operations ......................... 2,441,782 1,418,441 (141,800) 3,718,423
Other income (expense):
Interest expense ............................. (28,565) (177,779) (19,000)(1) (225,344)
Interest income .............................. 118,714 5,790 124,504
------------ ------------ ------------ ------------
Income before income taxes ..................... 2,531,931 1,246,452 (160,800) 3,617,583
Income tax provision ........................... 875,431 -- 379,978 (3) 1,255,409
------------ ------------ ------------ ------------
Net income ..................................... $ 1,656,500 $ 1,246,452 $ (540,778) $ 2,362,174
============ ============ ============ ============
Basic and diluted earnings per share ........... $ 0.40
============
Basic and diluted earnings per share adjusted
weighted average shares ..................... 5,872,494
============
</TABLE>
See accompanying notes to pro forma condensed combined financial
statements (unaudited).
15
<PAGE> 17
UNIFAB INTERNATIONAL, INC.
PRO FORMA CONDENSED COMBINED STATEMENT OF INCOME (UNAUDITED)
<TABLE>
<CAPTION>
UNIFAB ALLEN TANK, INC
INTERNATIONAL, INC. FIFTY-TWO WEEK
YEAR ENDED PERIOD ENDED PRO FORMA PRO FORMA
MARCH 31, 1998 DECEMBER 27, 1997 ADJUSTMENTS COMBINED
------------------- ----------------- ------------- -------------
<S> <C> <C> <C> <C>
Revenue................................ $ 68,563,987 $ 40,606,312 $ -- $ 109,170,299
Cost of revenue........................ 57,789,474 33,987,731 -- 91,777,205
--------------- --------------- ------------- -------------
Gross profit........................... 10,774,513 6,618,581 -- 17,393,094
General and administrative expense..... 2,967,282 3,839,637 -- 6,806,919
--------------- --------------- ------------- -------------
Income from operations................. 7,807,231 2,778,944 -- 10,586,175
Other income (expense):
Interest expense..................... (53,830) (1,005,018) (76,000)(1) (1,134,848)
Interest income...................... 521,534 67,427 -- 588,961
--------------- --------------- ------------- -------------
Income before income taxes............. 8,274,935 1,841,353 (76,000) 10,040,288
Income tax provision................... 2,896,228 -- 495,520 (3) 3,391,748
--------------- --------------- ------------- -------------
Net income............................. $ 5,378,707 $ 1,841,353 $ (571,520) $ 6,648,540
=============== =============== =============- =============
Basic and diluted earnings per share... $ 1.30
=============
Diluted earnings per share adjusted
weighted average shares.............. 5,111,212
=============
</TABLE>
See accompanying notes to pro forma condensed combined financial
statements (unaudited).
16
<PAGE> 18
UNIFAB INTERNATIONAL, INC.
NOTES TO PRO FORMA CONDENSED COMBINED FINANCIAL STATEMENTS (UNAUDITED)
NOTE 1. BASIS OF PRESENTATION
The accompanying pro forma condensed combined balance sheet as of June 30,
1998 and the related pro forma condensed combined statements of income for the
three months ended June 30, 1998 and for the year ended March 31, 1998 give
effect to the July 24, 1998 acquisition Allen Tank, Inc. ("Allen Tank") under
the pooling of interests method of accounting.
The pro forma condensed combined balance sheet combines the unaudited June
30, 1998 condensed balance sheet of UNIFAB International, Inc. ("UNIFAB") with
the June 11, 1998 unaudited balance sheet of Allen Tank. The pro forma condensed
combined statements of income combine the unaudited results of operations of
UNIFAB for the three months ended June 30, 1998 with the unaudited results of
operations of Allen Tank for the twelve week period from March 22, 1998 to June
13, 1998; and the audited results of operations of UNIFAB for the year ended
March 31, 1998 (UNIFAB's fiscal year end) with the audited results of operations
of Allen Tank for the fifty-two week period ended December 27, 1997, (Allen
Tank's fiscal year end), respectively. The pro forma condensed combined
financial statements are based on the historical financial statements of UNIFAB
and Allen Tank, giving effect to the assumptions and adjustments in the
accompanying notes to the pro forma condensed combined financial statements.
NOTE 2. ACQUISITION OF ALLEN TANK, INC.
On June 24, 1998 UNIFAB acquired Allen Tank for 819,000 shares of
UNIFAB common stock, $400,000 in cash and notes of $800,000 from Vincent J.
Cuevas, Walter L. Hampton, William A. Hines, Allen C. Porter, Jr. and Joseph G.
Weisberger (the "Allen Tank Shareholders"). Allen Tank, located in New Iberia,
Louisiana on property near UNIFAB's Port of Iberia facilities, designs and
manufactures specialized process systems, such as oil and gas separation
systems, gas dehydration and treatment systems, and oil dehydration and
desalting systems, and other production equipment related to the development and
production of oil and gas reserves. Allen Tank also provides a full complement
of engineering and field commissioning services related to production systems.
The pro forma adjustments to record the acquisition of Allen Tank are as
follows:
(1) To give effect to the issuance of 819,000 shares of UNIFAB
International, Inc. Common Stock, $400,000 in cash and $800,000
notes in exchange for 1,000 shares of Allen Tank Stock. The cash
paid and note results in a reduction of cash of $400,000, an
increase of $400,000 notes payable, an increase of $400,000 other
noncurrent liabilities and a reduction of equity of $1,200,000.
(2) To conform accounting policies regarding executive bonuses which
have been accrued annually in Allen Tank historical financial
statements but are accrued quarterly by UNIFAB. To conform Allen
Tank's historical amounts to UNIFAB's policy, general and
administrative expenses have been increased by $141,800 for the
three-month period ended June 30, 1998. Income tax expense has been
decreased by $49,645 for the three-month period ended June 30, 1998,
to reflect the tax effect of the adjustment.
(3) Allen Tank operated as an S Corporation prior to the
acquisition. As a result of the acquisition, the S Corporation
status terminated and the undistributed earnings of Allen Tank
will be treated as a distribution to the shareholders and
concurrent contribution of capital to the combined entity. Prior to
17
<PAGE> 19
the acquisition Allen Tank agreed to distribute to its shareholders
on or before April 1, 1999 an amount approximately equal to the
taxes payable by the shareholders with respect to such earnings.
Additionally, to reflect the effect of the termination of the S
Corporation status as if Allen Tank had been a C Corporation, tax
expense has been increased $522,120 for the year ended March 31,
1998, and $436,258 for the three-month period ended June 30, 1998.
The deferred income tax asset and liability accounts have been
increased at June 30, 1998 by $220,235 and $742,355, respectively,
as a result of the S Corporation status termination.
(4) No provision has been reflected in the unaudited pro forma
condensed combined financial information for direct expenses related
to the Merger, which are expected to approximate $500,000.
NOTE 3. PRO FORMA NET INCOME PER SHARE
Pro forma net income per share is calculated by dividing the pro forma
net income for the period by the adjusted weighted average shares
outstanding for the period, which gives effect to the shares issued in
the acquisition described in Note 2, above, as if the shares were
issued at the beginning of the period.
18
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INDEX TO EXHIBITS
<TABLE>
<CAPTION>
EXHIBIT
NUMBER DESCRIPTION
- ------- -----------
<S> <C>
23.1 Consent of LaPorte, Sehrt, Romig & Hand, a Professional
Accounting Corporation
</TABLE>
<PAGE> 1
EXHIBIT 23.1
CONSENT OF INDEPENDENT ACCOUNTANTS
We hereby consent to incorporation by reference of our report dated
March 4, 1998, relating to the balance sheets of Allen Tank, Inc. as of December
27, 1997 and December 26, 1996, the related statements of income and retained
earnings (operating deficit) and cash flows for the fifty-two week periods then
ended, which report appears in UNIFAB International, Inc.'s Form 8-K/A-1 dated
July 24, 1998.
LaPORTE, SEHRT, ROMIG & HAND
A Professional Accounting Corporation
Metairie, LA
October 8, 1998
