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<PAGE> 1
===============================================================================
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
---------------------------
FORM 8-K/A
(Amendment No. 1)
Current Report
PURSUANT TO SECTION 13 OR 15(d) OF
THE SECURITIES EXCHANGE ACT OF 1934
DATE OF REPORT (DATE OF EARLIEST EVENT REPORTED) : FEBRUARY 12, 1997
THE O'GARA COMPANY
(Exact name of registrant as specified in its charter)
Ohio 000-21629 31-1470817
(State or other jurisdiction of (Commission (I.R.S. Employer
incorporation) file number) Identification No.)
9113 LeSaint Drive
Fairfield, Ohio 45014
(513) 874-2112
(Address, including zip code, and telephone
number, including area code, of
registrant's principal executive
offices)
===============================================================================
<PAGE> 2
INFORMATION TO BE INCLUDED WITH THIS REPORT
-------------------------------------------
Items 1, 3, 4, 5, 6, 8 and 9 are not applicable and are omitted from this
report. The information required by Items 2 and 7(c) has been previously filed.
This amended report is filed to provide the financial information required by
Items 7(a) and 7(b).
ITEM 7. FINANCIAL STATEMENTS AND EXHIBITS.
<TABLE>
<S> <C> <C>
(a) Financial Statements of Labbe S.A.
Report of Independent Public Accountants .............................................. 2
Consolidated Balance Sheets as of December 31, 1995 and 1996 .......................... 3-4
Consolidated Statements of Operations for the Years Ended December 31,
1995 and 1996 ......................................................................... 5
Consolidated Statements of Shareholders' Equity for the Years Ended
December 31, 1995 and 1996 ............................................................ 6
Consolidated Statements of Cash Flows for the Years Ended December
31, 1995 and 1996 ..................................................................... 7
Notes to Consolidated Financial Statements ............................................ 8-17
(b) Pro Forma Financial Information of The O'Gara Company
Pro Forma Condensed Consolidated Balance Sheets as of December 31, 1996 ............... 18
Pro Forma Consolidated Statements of Operations
for the Year ended December 31, 1996 .................................................. 19
</TABLE>
The Pro Forma Condensed Consolidated Balance Sheet of The O'Gara Company (the
"Company") as of December 31, 1996, reflects the financial position of the
Company after giving effect to the acquisition discussed in Item 2. The Pro
Forma Consolidated Statement of Operations for the year ended December 31,
1996, assumes that the acquisition occurred on January 1, 1996, and is based
on the operations of the Company for the year then ended.
The unaudited Pro Forma Condensed Consolidated Financial Statements have
been prepared by the Company based upon assumptions it deems proper. The
Unaudited Pro Forma Condensed Consolidated Financial Statements presented herein
are not necessarily indicative of the future consolidated financial position or
future consolidated results of operations of the Company, or of the consolidated
financial position or consolidated results of operations of the Company that
would have actually occurred had the transaction been in effect as of the date
or for the periods presented. It should be noted that for the periods subsequent
to January 1, 1997 the Company's consolidated financial statements will reflect
the acquisition.
The Unaudited Pro Forma Condensed Consolidated Financial Statements should
be read in conjunction with the historical consolidated Financial Statements and
related notes of the Company contained in its annual report on Form 10K for
the years ended December 31, 1996.
1
<PAGE> 3
REPORT OF INDEPENDENT PUBLIC ACCOUNTANTS
----------------------------------------
We have audited the accompanying consolidated balance sheets of Labbe (Note 1)
(a French corporation) and subsidiaries as of December 31, 1995 and December 31
1996, and the related consolidated statements of operations and shareholders'
equity and cash flows for the two years in the period ended December
31, 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.
In our opinion, the financial statements referred to above present
fairly, in all material respects, the financial position of Labbe (Note 1) and
subsidiaries as of December 31, 1995 and December 31, 1996 and the results of
their operations and cash flows for each of the two years in the
period ended December 31, 1996, in conformity with generally accepted
accounting principles in the United States of America.
April 25, 1997
Paris, France
PGA
Member Firm of Andersen Worldwide
Philippe Mongin
2
<PAGE> 4
LABBE
CONSOLIDATED BALANCE SHEETS
ASSETS
(IN THOUSANDS OF US DOLLARS)
<TABLE>
<CAPTION>
12.31.95 12.31.96
-------- --------
(12 months) (12 months)
<S> <C> <C>
Current assets
- --------------
Cash (note 2) 1,987 3,501
Accounts receivable, net of allowance for
doubtful accounts of $169 in 1995 and
$272 in 1996 7,572 4,389
Other receivables (note 2) 759 300
Inventories (note 2) 5,143 3,643
Prepaid expenses 151 65
------ ------
Total current assets 15,612 11,898
Property, Plant and Equipment
- -----------------------------
(note 2)
Land and land improvements 281 263
Buildings and improvements 2,472 2,361
Furniture and fixtures 677 695
Machinery and equipment 1,503 1,427
Other 524 537
------ ------
Total 5,457 5,284
Less accumulated depreciation 2,447 2,664
Net property, plant and equipment 3,010 2,620
Goodwill and intangibles
- ------------------------
Goodwill 612 530
Franchises and licenses - 12
------ ------
612 542
Other assets (note 2) 2,160 2,202
------ ------
TOTAL ASSETS 21,394 17,262
====== ======
</TABLE>
THE ACCOMPANYING NOTES TO CONSOLIDATED FINANCIAL STATEMENTS ARE
AN INTEGRAL PART OF THESE BALANCE SHEETS.
3
<PAGE> 5
LABBE
CONSOLIDATED BALANCE SHEETS
LIABILITIES AND SHAREHOLDERS' EQUITY
(IN THOUSANDS OF US DOLLARS)
<TABLE>
<CAPTION>
12.31.95 12.31.96
-------- --------
(12 months) (12 months)
<S> <C> <C>
Current liabilities
- -------------------
Revolving lines of credit (note 3) 18 -
Current portion of long term debt (note 4) 630 498
Accounts payable 6,210 3,694
Accrued liabilities (note 2) 5,145 4,819
Deferred tax liabilities (note 2) 243 37
------ ------
Total current liabilities 12,246 9,048
Long term debt (note 4) 2,039 1,472
Minority interest 54 31
Shareholders' equity
- --------------------
Common stock, 150.000 shares of FF100 par
value 1,871 2,848
Additional paid in capital 22 22
Retained earnings 4,655 3,792
Translation adjustment 506 49
------ ------
Total shareholders' equity 7,054 6,711
------ ------
TOTAL LIABILITIES & EQUITY 21,394 17,262
====== ======
</TABLE>
THE ACCOMPANYING NOTES TO CONSOLIDATED FINANCIAL STATEMENTS ARE
AN INTEGRAL PART OF THESE BALANCE SHEETS.
4
<PAGE> 6
LABBE
CONSOLIDATED STATEMENTS OF OPERATIONS
(IN THOUSANDS OF US DOLLARS, EXCEPT PER SHARE DATA)
<TABLE>
<CAPTION>
12.31.95 12.31.96
-------- --------
(12 months) (12 months)
<S> <C> <C>
Net sales 25,461 24,118
Cost of sales (19,725) (19,656)
---------- -----------
Gross profit 5,736 4,462
Operating expenses
- ------------------
Selling and marketing (1,229) (1,084)
General and administrative (1,179) (1,093)
---------- ----------
Total operating expenses (2,407) (2,177)
---------- ----------
Operating income 3,329 2,285
Other income (expense)
- ----------------------
Interest expense (303) (476)
Interest income 172 380
Other (515) (537)
---------- ----------
Total other income (expense) (646) (633)
---------- ----------
Pre-tax income 2,682 1,652
- --------------
Provision for income taxes (note 2) (985) (827)
Deferred tax (note 2) (25) 195
Minority interest (21) (6)
---------- ----------
NET INCOME 1,648 1,014
========== ==========
Net income per share 16.48 8.27
========== ==========
</TABLE>
THE ACCOMPANYING NOTES TO CONSOLIDATED FINANCIAL STATEMENTS ARE
AN INTEGRAL PART OF THESE STATEMENTS.
5
<PAGE> 7
LABBE
CONSOLIDATED STATEMENTS OF SHAREHOLDERS' EQUITY
(IN THOUSANDS OF US DOLLARS)
<TABLE>
<CAPTION>
COMMON ADDITIONAL RETAINED CUMULATIVE TOTAL
STOCK PAID-IN EARNINGS FOREIGN
CAPITAL CURRENCY
TRANSLATION
ADJUSTMENT
------------- ------------ ---------- ----------- ------------
<S> <C> <C> <C> <C> <C>
BALANCE, December 31, 1994 1,871 22 3,408 - 5,301
Net income - - 1,648 - 1,648
Aggregate translation adjustment - - - 506 506
Distribution to shareholders - - (401) - (401)
------------- ------------ ---------- ---------- ------------
BALANCE, December 31, 1995 1,871 22 4,655 506 7,054
Net income - - 1,014 - 1,014
Aggregate translation adjustment - - - (457) (457)
Distribution to shareholders - - (391) - (391)
Decrease in capital (196) - (313) - (509)
Increase in capital 1,173 - (1,173) - -
------------- ------------ ----------- ---------- ------------
BALANCE, December 31, 1996 2,848 22 3,792 49 6,711
</TABLE>
THE ACCOMPANYING NOTES TO CONSOLIDATED FINANCIAL STATEMENTS ARE
AN INTEGRAL PART OF THESE STATEMENTS.
6
<PAGE> 8
LABBE
CONSOLIDATED CASH FLOWS STATEMENTS
(IN THOUSANDS OF US DOLLARS)
<TABLE>
<CAPTION>
12.31.95 12.31.96
-------- --------
<S> <C> <C>
CASH FLOWS FROM OPERATING ACTIVITIES
Net income 1,648 1,014
Adjustments to reconcile net income to net cash provided by
(used for) operating activities
Depreciation and amortization 490 437
(Gain) or loss on sales of assets - 21
Provision for doubtful accounts 21 114
Provision for slow moving inventories (91) (30)
Changes in operating assets & liabilities
(Increase) decrease in accounts receivable (1,475) 2,582
(Increase) decrease in other receivables (50) 410
(Increase) decrease in inventories 257 1,199
(Increase) decrease in prepaid expenses (60) 78
(Increase) decrease in deferred income taxes - (191)
Increase (decrease) in accounts payables 332 (2,116)
Increase (decrease) in accrued liabilities 276 4
Increase (decrease) in deferred tax liabilities 30 -
------------ -------------
(270) 2,508
Increase (decrease) of minority interest ( 12) (20)
------------ -------------
Net cash provided by operating activities 1,366 3,502
------------ -------------
CASH FLOWS FROM INVESTING ACTIVITIES
Purchase of HELLIO Company (net of cash acquired) (1,073) -
Purchase of property and equipment (438) (254)
(Increase) decrease in other assets (1,990) (181)
Proceeds from sale of equipment 22 22
(Increase) decrease in deferred credit (4) -
------------ -------------
Net cash used for investing activities (3,485) (413)
------------ -------------
CASH FLOWS FROM FINANCING ACTIVITIES
Payments of capital leases (178) (156)
Proceeds from capital leases 94 32
Proceeds from borrowings 828 14
Payments of borrowings (577) (424)
Payments of dividend to shareholders (401) (391)
Translation adjustment 24 (46)
Decrease in capital - (509)
------------ -------------
Net cash used for financing activities (210) (1,430)
------------ -------------
NET INCREASE (DECREASE) IN CASH (2,329) 1,659
============ =============
CASH AND CASH EQUIVALENTS : BEGINNING OF YEAR 4,082 1,968
Impact of change in exchange rates on transalations 215 (126)
------------ -------------
CASH AND CASH EQUIVALENTS : END OF YEAR 1,968 3,501
============ =============
</TABLE>
7
<PAGE> 9
LABBE
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEARS ENDED DECEMBER 31, 1995 AND 1996
(ALL AMOUNTS IN THOUSANDS OF US DOLLARS)
(1) BASIS OF PRESENTATION
(a) Consolidated entities
---------------------
The accompanying consolidated financial statements consist of the following
entities.
- Normandie Carrosserie is a company, whose principal business is
repairing industrial coachwork. Labbe owned 65% of this company until
1994, then has increased its shareholder owning up to 84%
(approximately).
- Societe de Blindage et de Securite (S.B.S.) is engaged in the business
of providing armored products and repairing industrial coachwork. Labbe
owns approximately 100% of this entity.
- Hellio is a company that is building and repairing industrial
coachwork. Labbe owns approximately 100% of this entity.
As Labbe has a voting interest in the above companies of more than 50 %,
these companies are fully consolidated into the consolidated financial
statements.
Some companies in which Labbe holds a majority interest are not consolidated
in the consolidated financial statements because they are not significant
and will be sold in 1997.
(b) Business
--------
The company operates in two segments, providing security products and
industrial coachwork. The Company's primary products include the
armoring of commercial and private vehicles. The following summarizes
the company's foreign and domestic sales:
8
<PAGE> 10
<TABLE>
<CAPTION>
------------------- --------------------
12.31.95 12.31.96
------------------- --------------------
<S> <C> <C>
France: 19,839 16,051
Foreign countries: 5,622 8,067
------ ------
25,461 24,118
====== ======
</TABLE>
(2) SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
The consolidated financial statements have been prepared in conformity with
generally accepted accounting principles in the United States of America.
(a) Revenue recognition
-------------------
Revenue related to most commercial contracts results principally from
both short-term and long-term fixed price contracts and is recognized
on the percentage of completion method calculated utilizing the
cost-to-cost approach. The percent deemed to be complete is calculated
by comparing the cost incurred to date to estimated total cost of each
contract. This method is used because management considers costs
incurred to be the best available measure of progress on these
contracts. However, adjustments to this measurement are made when
management believes that cost incurred materially exceeds effort
expended. Contract costs includes all direct material and labor costs,
along with certain direct overhead costs related to contract
production. Provisions for any estimated total contract losses on
uncompleted contracts are recorded in the period in which it becomes
known that such losses will occur. Changes in estimated total contract
costs will result in revisions to contract revenue. These revisions
are recognized when determined.
(b) Cash and cash equivalents
-------------------------
Cash and cash equivalents are composed as follows:
<TABLE>
<CAPTION>
-------------------- --------------------
12.31.95 12.31.96
-------------------- --------------------
<S> <C> <C>
Mutual funds 442 2,075
Short term deposits 571 -
Cash 974 1,426
----- -----
1,987 3,501
===== =====
</TABLE>
9
<PAGE> 11
(c) Other receivables
-----------------
Other receivables are composed as follows:
<TABLE>
<CAPTION>
--------------------- ------------------
12.31.95 12.31.96
--------------------- ------------------
<S> <C> <C>
Income tax 432 11
VAT 96 50
Suppliers discount to obtain 72 110
Other 159 129
----- -----
759 300
===== =====
</TABLE>
(d) Inventories
-----------
Inventories are stated at the lower of cost or market using the
first-in, first-out (FIFO) method and include the following :
<TABLE>
<CAPTION>
-------------------- -------------------
12.31.95 12.31.96
-------------------- -------------------
<S> <C> <C>
Raw materials 2,101 1,934
Merchandises 64 79
Work-in-process and finished goods 2,568 1,723
Costs and estimated earnings in excess of
billings on uncompleted contracts 810 251
----- -----
Gross inventory 5,543 3,987
Less-accumulated depreciation 400 344
----- -----
Net inventory 5,143 3,643
===== =====
</TABLE>
10
<PAGE> 12
(e) Property, plant and equipment
-----------------------------
Property, plant and equipment are stated at cost. Depreciation is
computed on the straight-line method over the estimated useful lives of
the related assets as follows :
Buildings and improvements 19-40 years
Furniture and fixtures 5-7 years
Machinery and equipment 5-7 years
(f) Research and development costs
------------------------------
Research and development costs are expensed as incurred. These costs
are included in cost of sales as they are directly affected to specific
orders.
(g) Other assets
------------
The components of other assets are as follows:
<TABLE>
<CAPTION>
--------------- ----------------
12.31.95 12.31.96
--------------- ----------------
<S> <C> <C>
Investments in affiliated companies 326 305
Deposits 267 147
Loans to affiliated companies 1,753 1,766
----- -----
Gross Value 2,346 2,219
Less accumulated depreciation 186 17
----- -----
Net value 2,160 2,202
===== =====
</TABLE>
Loans to affiliated companies mainly correspond to a loan to Holding
Saint Roch (H.S.R.) amounting to $1,571 and one to Verem amounting
to $169 as of December 31, 1996.
11
<PAGE> 13
(h) Accrued liabilities
-------------------
<TABLE>
<CAPTION>
-------------------- --------------------
12.31.95 12.31.96
-------------------- --------------------
<S> <C> <C>
Income tax 262 168
Other taxes 60 49
----- -----
Tax payable 322 217
Wages 1,444 1,146
Social security charges 864 748
Retirement indemnity 226 320
Employee profit sharing 683 981
----- -----
Accrued compensation 3,217 3,195
Deferred revenue 931 558
VAT sales tax payable 195 184
Guarantees and warranty costs 183 276
Litigation, claims, assessments 102 224
Other 195 165
----- -----
Other liabilities 480 665
----- -----
5,145 4,819
===== =====
</TABLE>
Income tax assets and liabilities can not be compensated as they do not
relate to the same legal entities and as the Labbe group does not take
the advantage of tax consolidation.
Retirement indemnity has only been calculated for Labbe for the year
1995 and for each entity of the Labbe group for the year 1996.
Deferred revenue consists of goods not delivered before year end but
already invoiced.
12
<PAGE> 14
(i) Income taxes
------------
Labbe and consolidated subsidiaries are subjected to corporate income
tax (applicable rates were 36 2/3% in 1995 and 1996).
The provision for income taxes consists of:
<TABLE>
<CAPTION>
--------------------- --------------------
12.31.95 12.31.96
--------------------- --------------------
<S> <C> <C>
Labbe (792) (649)
Normandie Carrosserie (60) ( 22)
Societe de Blindage et de Securite (9) -
Hellio (124) (156)
----- -----
Total current (985) (827)
Deferred (25) 195
----- -----
Total provision for income tax (1,010) (632)
===== =====
</TABLE>
In addition, the Labbe Group recognizes a deferred tax asset for
cumulative temporary differences between financial reporting and tax
reporting, which includes primarily accruals and reserves not currently
deductible for tax purposes.
The components of the deferred tax assets and liabilities consist of
the following:
<TABLE>
<CAPTION>
--------------------- --------------------
12.31.95 12.31.96
--------------------- --------------------
<S> <C> <C>
Profit sharing scheme 120 99
Capital lease (97) (106)
Amortization and depreciation (64) (83)
Retirement indemnities 83 117
Inventory valuation (315) (91)
Other 30 27
----- -----
Total net deferred tax liabilities (243) (37)
===== =====
</TABLE>
13
<PAGE> 15
(j) Foreign Currency Translation
----------------------------
Assets and liabilities of foreign operations are translated using
year-end exchange rates prevailing during the year. Gains and losses
resulting from transactions in foreign currencies are immaterial.
(k) Concentrations of Credit Risk
-----------------------------
Financial instruments which potentially subject the Company to
concentrations of credit risk consist principally of cash investments
and trade receivables. The Company has cash investment policies that
limit investments to short-term low risk instruments. Concentrations of
credit risk with respect to trade receivables are limited due to the
nature of customers comprising the Company's customer base (state-owned
or private car manufacturers, French Military).
(3) REVOLVING LINES OF CREDIT
Considering the level of cash of the Labbe group, bank accounts showing a
credit balance remain exceptional.
(4) LONG TERM DEBT
The components of the long term debts (including current portions) consist
of the following:
<TABLE>
<CAPTION>
-------------------------- ------------------------
12.31.95 12.31.96
-------------------------- ------------------------
<S> <C> <C>
Borrowings 1,408 908
Capital leases 1,261 1,062
----- -----
2,669 1,970
===== =====
</TABLE>
14
<PAGE> 16
a) Long term debt except capital lease
-----------------------------------
The components of long term debt are as follows:
<TABLE>
<CAPTION>
- ---------------------------- ----------------- --------------------- ----------------- -----------------
Bank Initial debt Interest rate Remaining Remaining
debt debt
(%) 12.31.95 12.31.96
- ---------------------------- ----------------- --------------------- ----------------- -----------------
<S> <C> <C> <C> <C>
BCMB 48 8.50 30 18
Credit Maritime 96 T4M + 0.25 10 -
96 10.25 13 -
191 10.30 83 35
67 8.75 34 17
29 10.75 15 8
CIO 72 Codevi + 4.75 20 2
Credit Agricole 67 8.25 17 -
72 8.25 19 -
72 10.00 19 -
286 7.25 211 141
764 7.2 until April 747 561
1996 then 6.2
Advance granted by the 95 0 102 87
regional Council
COFACE 14
Advances from shareholders 50 21
Accrued interests loan 7 4
Other liabilities 31 -
Total long-term debt 1,408 908
Less current portion 468 334
---- ----
Total 940 574
==== ====
</TABLE>
15
<PAGE> 17
Scheduled maturities of long term debt as of December 31,1996 are as
follows:
1997 334
1998 278
1999 208
2000 88
---
908
===
b) Capital leases
--------------
<TABLE>
<CAPTION>
----------------- ------------------
31.12.95 31.12.96
----------------- ------------------
<S> <C> <C>
Current portion 162 164
Long term credit 1,099 898
----- -----
1,261 1,062
===== =====
</TABLE>
Scheduled maturities of leasing as of December 31,1996 are as follows:
1997 164
1998 155
1999 138
2000 130
2001 130
After 345
-----
1,062
=====
Interests on capital leases are not included in the above figures.
(5) COMMITMENTS AND CONTINGENCIES
a) Guaranties given
----------------
Guaranties given for consolidated entities and affiliated companies
amount to $663.
16
<PAGE> 18
b) Unrecorded obligation
---------------------
The consolidated company "S.B.S" is committed to buy the assets of the
former company S.I.B.S., which went bankrupt, for an amount of $306.
However, S.B.S's ownership on these assets is contested by the
previous owners. S.B.S. only paid $38 as an advance payment.
Therefore, the unrecorded obligation amounts to $268 that will be
paid when the claim is solved.
17
<PAGE> 19
THE O'GARA COMPANY
PRO FORMA CONDENSED CONSOLIDATED BALANCE SHEETS
AS OF DECEMBER 31, 1996
(unaudited)
(dollars in thousands)
<TABLE>
<CAPTION>
Historical Labbe(1) Adjustments Pro Forma
---------- -------- ----------- ---------
Current assets:
<S> <C> <C> <C> <C>
Cash $ 1,454 $ 3,501 $ (662)(4) $ 4,293
Accounts Receivable 7,736 4,689 -- 12,425
Costs and estimated earnings in excess of
billings on uncompleted contracts 15,326 251 -- 15,577
Inventories 8,734 3,392 -- 12,126
Other current assets 1,841 65 -- 1,906
-------- -------- -------- --------
Total current assets 35,091 11,898 (662) 46,327
-------- -------- -------- --------
Property, Plant, and Equipment, Net 4,925 2,620 740 (7) 8,285
-------- -------- -------- --------
(2)
(4)(5)
Other assets 3,922 2,744 7,376 (8) 14,042
-------- -------- -------- --------
Total assets $ 43,938 $ 17,262 $ 7,454 $ 68,654
======== ======== ======== ========
Current liabilities:
Revolving lines of credit $ 9,936 $ -- $ -- $ 9,936
Accounts payable 11,087 3,694 -- 14,781
Other current liabilities 9,790 5,354 -- 15,144
-------- -------- -------- --------
Total current liabilities 30,813 9,048 -- 39,861
Long-term debt, net of current portion 469 1,503 10,730 (3) 12,702
Shareholders' equity 12,656 6,711 (3,276)(6) 16,091
-------- -------- -------- --------
Total liabilities and shareholders' equity $ 43,938 $ 17,262 $ 7,454 $ 68,654
======== ======== ======== ========
- -----------------------
<FN>
(1) Labbe historical balance sheet as of December 31, 1996.
(2) To record $6,961 in goodwill resulting from the acquisition
(3) To record debt incurred to acquire Labbe
(4) To pay and capitalize $662 in costs associated with the acquisition
(5) To record $40 in trademarks and $100 in customer lists identified in conjunction with the
completion of the acquisition
(6) To reflect 376,597 shares of stock valued at $3,435 issued in connection with the acquisition, less Labbe historical equity
(7) Revaluation of fixed assets (increases to land--$80, buildings--$470 and machinery and equipment--$190)
(8) Reduction in asset representing pre-existing goodwill ($387)
</TABLE>
18
<PAGE> 20
THE O'GARA COMPANY
PRO FORMA CONSOLIDATED STATEMENTS OF OPERATIONS
FOR THE YEAR ENDED DECEMBER 31, 1996
(unaudited)
(dollars in thousands, except per share data)
<TABLE>
<CAPTION>
Historical Labbe (1) Adjustments Pro Forma
-------------- -------------- -------------- -----------
<S> <C> <C> <C> <C>
Net sales $ 82,778 $ 24,118 $ - $ 106,896
Cost of sales 61,523 19,656 - 81,179
----------- ----------- ---------- -----------
Gross profit 21,255 4,462 - 25,717
Operating expenses:
Selling and marketing 4,810 1,084 - 5,894
General and administrative 7,930 1,093 300(2)(4)(5)(6)(7) 9,323
----------- ----------- ---------- -----------
Operating income 8,515 2,285 (300) 10,500
Other income (expense):
Interest expense (1,300) (476) (993)(3) (2,769)
Other, net (38) (163) - (201)
----------- ----------- ---------- -----------
Income before provision for income taxes 7,177 1,646 (1,293) 7,530
Provision for income taxes 518 632 (474)(8) 676
----------- ----------- ---------- -----------
Net income $ 6,659 $ 1,014 $ (819) $ 6,854
=========== =========== ========== ===========
UNAUDITED PRO FORMA INFORMATION:
Gross profit 21,255 25,717
Selling and marketing 4,810 5,894
General and administrative 8,031 9,424
----------- -----------
Operating income 8,414 10,399
Interest expense (961) (2,436)
Other, net (38) (201)
----------- ----------- ---------- -----------
Income before provision for income taxes 7,415 1,646 (1,293) 7,768
Provision for income taxes 2,966 632 (474) 3,124
----------- ----------- ---------- -----------
Net income $ 4,449 $ 1,014 $ (819) $ 4,644
=========== =========== ========== ===========
Pro forma earnings per share $ 0.69 $ 0.68
=========== ===========
Pro forma weighted average
shares outstanding 6,449,050 6,825,647
=========== ===========
- ---------------------------
<FN>
(1) To include historical results of operations for Labbe for the year ended
December 31, 1996.
(2) To record amortization on goodwill resulting from acquisition of Labbe
(gross cost--$6,961 over 30 years).
(3) To reflect interest expense on debt incurred to fund acquisition of Labbe
($10,730 at 9.25%).
(4) To amortize capitalized acquisition costs associated with Labbe ($662
over 30 years).
(5) To amortize trademarks and customer lists identified in conjunction with
the completion of the Labbe acquisition (customer lists--$100 over 5
years; trademarks--$40 over 15 years).
(6) To deduct $30 in amortization recorded in historical Labbe results of
operations for pre-existing intangible assets.
(7) To record additional depreciation on fixed assets revalued in conjunction
with the completion of the Labbe acquisition (increase to building--$470
over 20 years and machinery and equipment--$190 over 7 years).
(8) To recognize the benefit for income taxes at an effective rate of
approximately 37% on the pro forma adjustments.
</TABLE>
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<PAGE> 21
SIGNATURES
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Pursuant to the requirements of the Securities Exchange Act of 1934, the
Registrant has duly caused this amended report to be signed on its behalf by the
undersigned hereunto duly authorized.
DATE: APRIL 28, 1997 THE O'GARA COMPANY
By /s/ Nicholas P. Carpinello
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Nicholas P. Carpinello
Executive Vice-President, and
Chief Financial Officer
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