SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D. C. 20549
FORM 8-K/A
AMENDMENT NO. 1 TO
CURRENT REPORT
PURSUANT TO SECTION 13 OR 15(D) OF
THE SECURITIES EXCHANGE ACT OF 1934
Date of report December 2, 1997
(Date of earliest event reported) (November 17, 1997)
OMNIQUIP INTERNATIONAL, INC.
(Exact Name of Registrant as Specified in Charter)
Delaware 0-21461 43-1721419
(State or Other Jurisdiction (Commission File (IRS Employer
of Incorporation) Number) Identification No.)
222 East Main Street 53074
Port Washington, Wisconsin (Zip Code)
(Address of Principal Executive Offices)
Registrant's telephone number, including area code: (414) 268-8965
<PAGE>
On December 2, 1997, OmniQuip International, Inc. (the "Company") filed a
Current Report on Form 8-K (the "Current Report") pertaining to the acquisition
of the business and substantially all of the assets of the Snorkel Division
("Snorkel") of Figgie International Inc. on November 17, 1997. At the time of
the filing of the Current Report, it was impractical for the Company to provide
financial statements for Snorkel or pro forma financial information for the
Company relative to the acquisition of Snorkel. Pursuant to the instructions for
Item 7 of the Current Report, the Company hereby amends Item 7 to the Current
Report to include the previously omitted information as follows:
Item 7. Financial Statements, Pro Forma Financial Information and Exhibits.
(a) Financial Statements
(i)Report of independent public accountants.
(ii)Combined statements of assets, liabilities and divisional
equity of Snorkel at December 31, 1996 and December 31, 1995.
(iii)Combined statements of revenue and certain expenses of Snorkel
for the years ended December 31, 1996, December 31, 1995 and December 31, 1994.
(iv)Combined statements of changes in divisional equity of Snorkel
for the years ended December 31, 1996, December 31, 1995 and December 31, 1994.
(v) Combined statements of cash flows of Snorkel for the years ended
December 31, 1996, December 31, 1995 and December 31, 1994.
(vi) Notes to combined financial statements.
(vii)Combined statements of assets, liabilities and divisional
equity of Snorkel at September 30, 1997 (unaudited) and December 31, 1996.
(viii) Combined statements of revenue and certain expenses of
Snorkel for the nine months ended September 30, 1997 (unaudited) and the nine
months ended September 30, 1996 (unaudited).
(ix)Combined statements of changes in divisional equity of Snorkel
for the nine months ended September 30, 1997 (unaudited).
(x) Combined statements of cash flows of Snorkel for the nine months
ended September 30, 1997 (unaudited) and the nine months ended September 30,
1996 (unaudited).
(xi) Notes to unaudited combined financial statements.
(b) Pro Forma Financial Information
Pro Forma Financial Information of the Company as of and for
the fiscal year ended September 30, 1997.
(c) Exhibits
(i) Asset Purchase Agreement, dated as of July 19, 1997, by
and among Figgie International Inc., Figgie International Real Estate Inc.,
Figgie Properties Inc., Figgie Licensing Corporation, Figgie Risk Management Co.
and SKL Lift, Inc.*
(ii) Amendment, dated as of November 9, 1997, by and between
Figgie International Inc. and SKL Lift, Inc.*
(iii) Credit Agreement, dated November 17, 1997, by and among
OmniQuip International, Inc., the certain lending institutions party thereto
from time to time, Morgan Stanley Senior Funding, Inc., as Syndication Agent and
Arranger, and First Union National Bank, as Administrative Agent and
Co-Arranger.*
- --------
*Previously filed on December 2, 1997.
<PAGE>
REPORT OF INDEPENDENT PUBLIC ACCOUNTANTS
To Figgie International Inc.:
We have audited the accompanying combined statements of assets, liabilities, and
divisional equity of the Snorkel division of Figgie International Inc. (as
defined in Note 1) (the Division), as of December 31, 1996 and 1995, and the
related combined statements of revenue and certain expenses, changes in
divisional equity, and cash flows for each of the three years in the period
ended December 31, 1996. These statements are the responsibility of the
Division's management. Our responsibility is to express an opinion on the
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 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.
The accompanying statements of the Division were prepared for the purpose of
complying with the rules and regulations of the Securities and Exchange
Commission (for inclusion in the Current Report on Form 8-K dated December 2,
1997, as amended, of Omniquip International, Inc., in connection with its
acquisition of the Division) and, as described in Note 1, are not intended to be
a complete presentation of the entity's assets, liabilities, revenues and
expenses.
In our opinion, the statements referred to above present fairly, in all material
respects, the combined assets, liabilities and divisional equity of the Snorkel
division of Figgie International Inc. as of December 31, 1996 and 1995, and its
combined revenue and certain expenses, cash flows and changes in divisional
equity for each of the three years in the period ended December 31, 1996, in
conformity with generally accepted accounting principles.
ARTHUR ANDERSEN LLP
Kansas City, Missouri,
November 20, 1997
<PAGE>
SNORKEL DIVISION OF
FIGGIE INTERNATIONAL INC.
(Note 1)
COMBINED STATEMENTS OF ASSETS, LIABILITIES, AND DIVISIONAL EQUITY
DECEMBER 31, 1996 AND 1995
ASSETS
<TABLE>
<CAPTION>
1996 1995
------------------ ----------------
<S> <C> <C>
CURRENT ASSETS:
Cash $ 1,014,000 $ 348,000
Accounts receivable, net of allowance for
doubtful accounts of $160,000 and
$129,000 for 1996 and 1995, respectively 11,954,000 13,379,000
Inventory-
Raw materials and WIP 18,434,000 11,371,000
Finished goods 8,027,000 8,549,000
------------------ ----------------
26,461,000 19,920,000
Prepaid expenses 136,000 156,000
------------------ ----------------
Total current assets 39,565,000 33,803,000
PROPERTY AND EQUIPMENT:
Land and improvements 507,000 497,000
Building and improvements 6,611,000 6,004,000
Machinery and equipment 13,201,000 10,026,000
Furniture and fixtures 229,000 117,000
Construction-in-process - 31,000
------------------ ----------------
20,548,000 16,675,000
Less- Accumulated depreciation (7,097,000) (5,024,000)
------------------ ----------------
13,451,000 11,651,000
Goodwill 14,094,000 14,569,000
Other assets 91,000 91,000
------------------ ----------------
Total assets $ 67,201,000 $ 60,114,000
================== ================
LIABILITIES AND DIVISIONAL EQUITY
CURRENT LIABILITIES:
Checks outstanding in excess of cash balance $ - $ 880,000
Accounts payable 10,570,000 13,227,000
Accrued salaries 2,044,000 1,253,000
Accrued expenses 465,000 784,000
Accrued taxes other than federal income tax 1,436,000 972,000
------------------- ----------------
Total current liabilities 14,515,000 17,116,000
DIVISIONAL EQUITY 52,686,000 42,998,000
------------------ ----------------
Total liabilities and divisional equity $ 67,201,000 $ 60,114,000
================== ================
</TABLE>
The accompanying notes are an integral part of these statements.
<PAGE>
SNORKEL DIVISION OF
FIGGIE INTERNATIONAL INC.
(Note 1)
COMBINED STATEMENTS OF REVENUE AND CERTAIN EXPENSES
FOR THE YEARS ENDED DECEMBER 31, 1996, 1995, AND 1994
<TABLE>
<CAPTION>
1996 1995 1994
----------------- ----------------- ---------------
<S> <C> <C> <C>
NET SALES $ 158,496,000 $ 129,984,000 $ 87,046,000
COST OF SALES 123,561,000 106,532,000 75,563,000
----------------- ----------------- ---------------
Gross profit 34,935,000 23,452,000 11,483,000
OPERATING EXPENSES:
Selling 4,277,000 3,376,000 2,563,000
General and administrative 5,843,000 4,952,000 2,436,000
Research and development 2,737,000 2,540,000 2,153,000
----------------- ----------------- ---------------
Operating income 22,078,000 12,584,000 4,331,000
INTEREST:
Income 36,000 18,000 14,000
Expense (87,000) (21,000) (22,000)
OTHER INCOME (EXPENSE) 610,000 (252,000) 9,762,000
----------------- ----------------- ---------------
REVENUE IN EXCESS OF EXPENSES $ 22,637,000 $ 12,329,000 $ 14,085,000
================= ================= ===============
</TABLE>
The accompanying notes are an integral part of these statements.
<PAGE>
SNORKEL DIVISION OF
FIGGIE INTERNATIONAL INC.
(Note 1)
COMBINED STATEMENTS OF CHANGES IN DIVISIONAL EQUITY
FOR THE YEARS ENDED DECEMBER 31, 1996, 1995 AND 1994
<TABLE>
<CAPTION>
1996 1995 1994
--------------- ---------------- ----------------
<S> <C> <C> <C>
BALANCE, beginning of year $ 42,998,000 $ 35,096,000 $ 35,748,000
Revenue in excess of expenses 22,637,000 12,329,000 14,085,000
Cumulative translation adjustment 411,000 69,000 225,000
Cash transfers to parent, net (13,360,000) (4,496,000) (14,962,000)
--------------- ---------------- ----------------
BALANCE, end of year $ 52,686,000 $ 42,998,000 $ 35,096,000
=============== ================ ================
</TABLE>
The accompanying notes are an integral part of these statements.
<PAGE>
SNORKEL DIVISION OF
FIGGIE INTERNATIONAL INC.
(Note 1)
COMBINED STATEMENTS OF CASH FLOWS
FOR THE YEARS ENDED DECEMBER 31, 1996, 1995 AND 1994
<TABLE>
<CAPTION>
1996 1995 1994
---------------- ---------------- ----------------
<S> <C> <C> <C>
CASH FLOWS FROM OPERATING ACTIVITIES:
Revenue in excess of expenses $ 22,637,000 $ 12,329,000 $ 14,085,000
Adjustments to reconcile revenue in excess of
expenses to cash provided by
operating activities-
Depreciation 2,073,000 2,667,000 905,000
Amortization of Goodwill 475,000 475,000 475,000
(Increase) decrease in accounts receivable 1,425,000 (5,969,000) (3,149,000)
(Increase) decrease in inventories, net (6,541,000) (2,519,000) 389,000
Decrease in other assets 20,000 20,000 3,298,000
Increase (decrease) in liabilities (2,190,000) 3,678,000 2,803,000
---------------- ---------------- ----------------
Net cash provided by operating activities 17,899,000 10,681,000 18,806,000
---------------- ---------------- ----------------
CASH FLOWS FROM INVESTING ACTIVITIES:
Purchase of property, plant and equipment (3,873,000) (6,341,000) (3,759,000)
---------------- ---------------- ----------------
Net cash used in investing activities (3,873,000) (6,341,000) (3,759,000)
CASH FLOWS FROM FINANCING ACTIVITIES-
Cash transfers to Parent, net (13,360,000) (4,496,000) (14,962,000)
---------------- ---------------- ----------------
Net cash used in financing activities (13,360,000) (4,496,000) (14,962,000)
NET INCREASE (DECREASE) IN CASH 666,000 (156,000) 85,000
CASH, beginning of period 348,000 504,000 419,000
---------------- ---------------- ----------------
CASH, end of period $ 1,014,000 $ 348,000 $ 504,000
================ ================ ================
</TABLE>
The accompanying notes are an integral part of these statements.
<PAGE>
SNORKEL DIVISION OF
FIGGIE INTERNATIONAL INC.
(Note 1)
NOTES TO COMBINED FINANCIAL STATEMENTS
DECEMBER 31, 1996
1. NATURE AND ORGANIZATION OF BUSINESS:
The Snorkel division (the Division), a division of Figgie International Inc.
(the Parent), manufactures self-propelled aerial work platforms, such as
telescopic and articulating booms and scissorlifts for use in construction and
maintenance activities. Snorkel also fabricates and services booms that are
mounted on fire apparatus to deliver large quantities of water from elevated
positions. The Division includes the operations of the Parent's subsidiaries in
Australia and New Zealand. The Division's foreign operations accounted for
approximately $27,435,000, $19,005,000 and $13,054,000 of net sales, $5,388,000,
$3,702,000 and $2,222,000 of operating income, and $13,485,000, $11,101,000 and
$7,238,000 of total assets in 1996, 1995, and 1994, respectively.
The statements have been prepared for the purpose of complying with the rules
and regulations of the Securities and Exchange Commission (for inclusion in the
Current Report on Form 8-K, dated December 2, 1997, as amended, of Omniquip
International Inc. in connection with its acquisition of the Division) and are
not intended to be a complete presentation of the Division's assets,
liabilities, revenues and expenses. These statements reflect the revenues and
expenses of the Division, including those direct expenses of the Division that
are paid by the Parent and charged directly to the Division. Certain expenses
incurred by the Parent have not been allocated to the Division. These expenses
include corporate legal, treasury, and tax services. Additionally, the taxable
income of the U.S. portion of Division is included in the consolidated U.S. tax
return of the Parent. As a result, the Parent has allocated no U.S. income tax
expense or related current or deferred tax assets or liabilities to the
Division. The U.S. operation of the Division is not an income tax reporting
entity nor does it have a tax-sharing agreement with the Parent. Income tax
liabilities or benefits attributable to the Division are recorded by the Parent.
The Parent utilizes a centralized cash management system for certain of its
operations, including the Division. Cash distributed to or advanced from the
Parent has been reflected as a decrease or increase in divisional equity in the
accompanying statements. The cash transfers (to) from the Parent, net for 1996,
1995 and 1994 consist entirely of such transactions.
<PAGE>
2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES:
Property and Equipment
Property, plant and equipment are stated at cost. Depreciation is computed using
the straight-line method over the estimated useful lives of the assets, which
are as follows:
Buildings 20 to 50 years
Building improvements 2 to 20 years
Machinery and equipment 3-12 years
Furniture and fixtures 5-10 years
Inventories
Manufacturing inventories are stated at the lower of first-in, first-out (FIFO)
method or market and include the cost of material, labor and overhead used in
the manufacturing process.
Goodwill
Goodwill of $18,329,000 at December 31, 1996 and 1995, represents costs in
excess of net assets of purchased businesses, and is amortized over a 40-year
life. At December 31, 1996 and 1995, accumulated goodwill amortization was
$4,235,000 and $3,760,000, respectively.
Foreign Operations
The statements of assets, liabilities and divisional equity of the Division's
foreign entities are translated into U.S. dollars using the exchange rate in
effect at year-end. Cumulative foreign currency translation adjustment is
included in divisional equity.
The Division's foreign entities file tax returns in their respective countries.
The amount of tax expense relating to the Division's foreign operations was
$1,234,000, $1,238,000 and $335,000 in 1996, 1995 and 1994, respectively. The
accompanying statements do not include a provision for these charges.
Self-Insurance Liabilities
The Division is self-insured for certain levels of general liability (including
product liability) and workers' compensation coverage. The Parent has recorded
accruals for self-insurance programs based on actuarial calculations prepared by
outside actuaries. The Parent has billed the Division $2,128,000, $4,591,000 and
$3,235,000 in 1996, 1995 and 1994, respectively, for such costs.
Use of Estimates
The preparation of statements in conformity with generally accepted accounting
principles requires management to make estimates and assumptions that affect the
reported amounts of assets and liabilities and disclosure of contingent assets
and liabilities at the date of the
<PAGE>
statements and the reported amounts of revenues and expenses during the
reporting periods. Actual results could differ from those estimates.
3. RETIREMENT BENEFITS:
Most employees of the Division are covered under the Parent's noncontributory
retirement plans. The plan benefits for salaried employees are based on
employees' earnings during their years of participation in the plan. Hourly
employees' plan benefits are based on various dollar units multiplied by the
number of years of eligible service. The Parent's policy is to fund amounts as
necessary on an actuarial basis to comply with the Employee Retirement Income
Security Act of 1974. Cost is allocated to each of the Parent's operations based
on an actuarial determination.
The Division recorded pension expense of $208,000, $163,000 and $368,000 in
1996, 1995 and 1994, respectively.
4. LEASE COMMITMENTS:
Rental commitments under noncancelable operating leases as of December 31, 1996,
were as follows:
Years Ending December 31
------------------------
1997 $ 3,876,000
1998 3,363,000
1999 2,054,000
2000 570,000
2001 and beyond 633,000
--------------
Total minimum payments
required $10,496,000
==============
Certain leases expiring during 1998 and 1999 contained an option whereby the
Division could purchase the equipment for a fixed price. Upon the sale of the
Division on November 17, 1997 (Note 7), the equipment underlying these leases
was purchased by the acquirer at a cost of $7,640,000.
5. CONTINGENCIES:
The Division is subject to litigation from time to time in the ordinary course
of business. Although the amount of any liability with respect to such
litigation cannot be determined, in the opinion of management, such liability as
of December 31, 1996, will not have a material adverse effect on the Division's
financial position or the results of its operations.
6. OTHER INCOME:
Other income in 1994 includes income of $9,383,000 from insurance recoveries for
the business interruption related to the Missouri river floods in 1993.
<PAGE>
7. SALE OF DIVISION:
On November 17, 1997, the Parent sold the assets of the Division to Omniquip
International Inc. for $100,000,000 in cash, plus up to $50,000,000 in
additional cash consideration based on the Division's net sales between April 1,
1998, and March 31, 1999.
<PAGE>
SNORKEL DIVISION OF FIGGIE INTERNATIONAL INC.
Combined Statements of Assets, Liabilities, and Divisional Equity
September 30, 1997 and December 31, 1996
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
September 30, December 31,
1997 1996
(unaudited)
<S> <C> <C>
Assets
Current assets:
Cash $ 1,855,000 $ 1,014,000
Accounts receivable, net of allowance for
doubtful accounts of $240,000 and $160,000 for
1997 and 1996, respectively 17,776,000 11,954,000
Inventory
Raw materials and WIP 19,792,000 18,434,000
Finished goods 13,690,000 8,027,000
----------------- -----------------
33,482,000 26,461,000
Prepaid expenses 155,000 136,000
----------------- -----------------
Total current assets 53,268,000 39,565,000
Property and equipment:
Land and improvements 696,000 507,000
Building and improvements 7,107,000 6,611,000
Machinery and equipment 13,580,000 13,201,000
Furniture and fixtures 650,000 229,000
----------------- -----------------
22,033,000 20,548,000
Less: Accumulated depreciation (9,524,000) (7,097,000)
----------------- -----------------
12,509,000 13,451,000
Goodwill 13,738,000 14,094,000
Other assets 91,000 91,000
----------------- -----------------
Total assets $ 79,606,000 $ 67,201,000
================= =================
Liabilities and Divisional Equity
Current liabilities:
Accounts payable $ 14,842,000 $ 10,570,000
Accrued salaries 1,868,000 2,044,000
Accrued expenses 601,000 465,000
Accrued taxes other than Federal income tax 1,393,000 1,436,000
----------------- -----------------
Total current liabilities 18,704,000 14,515,000
Contingencies (Note 2)
Divisional equity: 60,902,000 52,686,000
----------------- -----------------
Total liabilities and divisional equity $ 79,606,000 $ 67,201,000
================= =================
</TABLE>
The accompanying notes are an integral part of these statements.
<PAGE>
SNORKEL DIVISION OF FIGGIE INTERNATIONAL INC.
Combined Statements of Revenue and Certain Expenses
(Unaudited)
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
For the nine For the nine
months ended months ended
September September
30, 30,
1997 1996
<S> <C> <C>
Net sales $ 122,731,000 $ 124,095,000
Cost of sales 99,503,000 96,488,000
----------------- ------------------
Gross profit 23,228,000 27,607,000
Selling, general and administrative
expenses 10,741,000 9,557,000
----------------- ------------------
Operating income 12,487,000 18,050,000
----------------- ------------------
Other income 164,000 360,000
----------------- ------------------
Revenue in excess of expenses $ 12,651,000 $ 18,410,000
================= ==================
</TABLE>
The accompanying notes are an integral part of these statements.
<PAGE>
SNORKEL DIVISION OF FIGGIE INTERNATIONAL INC.
Combined Statement of Changes in Divisional Equity
For the Nine Months Ended September 30, 1997
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
<S> <C>
Balance, December 31, 1996 $ 52,686,000
Revenue in excess of expenses (unaudited) 12,651,000
Cumulative translation adjustment (unaudited) (913,000)
Cash transfers to parent, net (unaudited) (3,522,000)
-----------------
Balance, September 30, 1997 (unaudited) $ 60,902,000
=================
</TABLE>
The accompanying notes are an integral part of these statements.
<PAGE>
SNORKEL DIVISION OF FIGGIE INTERNATIONAL INC.
Combined Statements of Cash Flows
(Unaudited)
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Nine months Nine months
ended ended
September September
30, 30,
1997 1996
<S> <C> <C>
Cash flows from operating activities:
Revenue in excess of expenses $ 12,651,000 $ 18,410,000
Adjustments to reconcile net income to net cash
provided by operating activities:
Depreciation 2,422,000 1,849,000
Amortization of goodwill 356,000 356,000
(Increase) decrease in accounts receivable (5,822,000) (3,621,000)
(Increase) decrease in inventories, net (7,021,000) (2,447,000)
Decrease in prepaid expenses (19,000) 34,000
Increase (decrease) in liabilities 3,276,000 (806,000)
----------------- -----------------
Net cash provided by operating activities 5,843,000 13,775,000
----------------- -----------------
Cash flows from investing activities:
Capital expenditures (1,480,000) (3,446,000)
----------------- -----------------
Net cash used in investing activities (1,480,000) (3,446,000)
----------------- -----------------
Cash flows from financing activities:
Cash transfers to parent, net (3,522,000) (10,093,000)
----------------- -----------------
Net cash used in financing activities (3,522,000) (10,093,000)
----------------- -----------------
Net increase in cash 841,000 236,000
Cash, beginning of period 1,014,000 348,000
----------------- -----------------
Cash, end of period $ 1,855,000 $ 584,000
================= =================
</TABLE>
The accompanying notes are an integral part of these statements.
<PAGE>
SNORKEL DIVISION OF FIGGIE INTERNATIONAL INC.
Notes to Combined Financial Statements
September 30, 1997
(Unaudited)
- --------------------------------------------------------------------------------
1. Unaudited combined financial statements
The accompanying unaudited combined financial statements of the Snorkel
Division (the Company or Snorkel) of Figgie International Inc. (Figgie)
have been prepared in accordance with the instructions for Form 10-Q and
do not include all of the information and footnotes required by
generally accepted accounting principles for complete financial
statements. However, in the opinion of management, such information
includes all adjustments, consisting only of normal recurring
adjustments, necessary for a fair presentation of the results of
operations for the periods presented. Operating results for any quarter
are not necessarily indicative of the results for any other quarter or
for the full year. These statements should be read in conjunction with
the audited combined financial statements and notes relating thereto of
the Company for the year ended December 31, 1996 included elsewhere in
this Form 8-K/A of OmniQuip International, Inc.
These statements have been prepared for the purpose of complying with
the rules and regulations of the Securities and Exchange Commission (for
inclusion in the Current Report on Form 8-K, as amended, of OmniQuip
International, Inc. in connection with its acquisition of Snorkel) and
are not intended to be a complete presentation of the Company's assets,
liabilities, revenues and expenses. The statements reflect the revenues
and expenses of the Company, including those direct expenses of the
Company that are paid by Figgie and charged directly to the Company.
Certain expenses incurred by Figgie have not been allocated to the
Company. These expenses include corporate, legal, treasury, and tax
services. Additionally, the taxable income of the U.S. operation of the
Company is included in the consolidated U.S. tax return of Figgie. As a
result, Figgie has allocated no U.S. income tax expense or related
current or deferred tax assets or liabilities to the Company. The U.S.
operation of the Company is not an income tax reporting entity nor does
it have a tax-sharing agreement with Figgie. Income tax liabilities or
benefits attributable to the Company are recorded by Figgie.
Figgie utilizes a centralized cash management system for certain of its
operations, including the Company. Cash distributed to or advanced from
Figgie has been reflected as a decrease or increase in divisional equity
in the accompanying statements. The cash transfers (to) from Figgie, net
for the nine months ended September 30, 1997 and 1996, consist entirely
of such transactions.
2. Contingencies
The Company is subject to litigation from time to time in the ordinary
course of business. Although the amount of any liability with respect to
such litigation cannot be determined, in the opinion of management, such
liability as of September 30, 1997, will not have a material adverse
effect on the Company's financial position or the results of its
operations.
3. Sale of Snorkel
On November 17, 1997, Figgie sold certain net assets of the Company to
OmniQuip International, Inc. for $100,000,000 in cash, plus up to
$50,000,000 in additional cash consideration based on the Company's net
sales between April 1, 1998 and March 31, 1999. The accompanying
financial statements reflect the Company's pre-acquisition basis of
accounting
<PAGE>
SNORKEL DIVISION OF FIGGIE INTERNATIONAL INC.
Notes to Combined Financial Statements
September 30, 1997
(Unaudited)
Page 2
- --------------------------------------------------------------------------------
and do not reflect any effects of the acquisition by OmniQuip
International, Inc. or the related financing thereof.
<PAGE>
OmniQuip International, Inc.
Pro Forma Financial Information
Basis of presentation
On November 17, 1997, SKL Lift, Inc. ("SKL"), a wholly-owned subsidiary of
OmniQuip International, Inc. (the "Company"), acquired the business and
substantially all of the assets of the Snorkel Division ("Snorkel") of Figgie
International Inc. ("Figgie") pursuant to a definitive agreement entered into on
July 19, 1997 and amended on November 9, 1997. Snorkel is a leading manufacturer
and marketer of aerial work platforms and aerial fire apparatus with facilities
located in Kansas, Missouri, Australia and New Zealand. The assets acquired by
SKL by virtue of the acquisition include, among other things, certain real
property, machinery and equipment, accounts receivable, inventory and certain
intangibles. The Company intends to continue operating Snorkel in the markets it
now serves and, accordingly, intends to continue to use its assets in
substantially the same manner they were used prior to the acquisition.
The purchase price paid by the Company for Snorkel was $100 million in cash at
closing plus the assumption of certain liabilities. The funds were obtained by
the Company pursuant to a secured credit facility which replaced the Company's
existing credit facility. The Company is also required to pay an additional
purchase price of up to $50 million, which will be equal to the amount of the
net sales of Snorkel for the twelve-month period commencing on April 1, 1998 and
ending on March 31, 1999 (the "Earn-Out Period") in excess of $140 million, such
additional amount not to exceed $20 million, plus 70% of the amount of net sales
of Snorkel during the Earn-Out Period in excess of $160 million, such additional
amount not to exceed $30 million. The acquisition will be accounted for under
the purchase method of accounting with the excess of purchase price over the
estimated fair value of net assets acquired recorded as goodwill. Any additional
purchase price determined as described above is expected to be recorded as
additional goodwill when such amounts, if any, are determined.
The accompanying pro forma unaudited consolidated income statement for the year
ended September 30, 1997 was prepared to illustrate the estimated effects of (i)
the acquisition of Snorkel and the financing thereof and (ii) the Company's
March 1997 sale of 3,000,000 shares of common stock to the public (the "March
1997 Offering"), as if such events had occurred as of October 1, 1996. The
accompanying pro forma unaudited consolidated balance sheet as of September 30,
1997 was prepared to illustrate the estimated effects of the acquisition of
Snorkel and the financing thereof as if such event had occurred on September 30,
1997.
Company management believes that the assumptions used in preparing the unaudited
pro forma financial information provide a reasonable basis for presenting all of
the significant effects of the acquisition and the March 1997 Offering, that the
pro forma adjustments give appropriate effect to these assumptions, and that the
pro forma adjustments are properly applied in the unaudited pro forma
information.
<PAGE>
Pro Forma Unaudited Consolidated Income Statement
Year Ended September 30, 1997
(dollars in thousands)
<TABLE>
<CAPTION>
March 1997 Snorkel Snorkel Omniquip/
Omniquip Offering Omniquip 12 Months ended Pro Forma Snorkel
As Reported Adjustments Pro Forma September 30, 1997 Adjustments Pro Forma
-------------- --------------- ---------------- ------------------------------------ ---------------
<S> <C> <C> <C> <C> <C> <C>
Net sales $ 264,213 $ 264,213 $ 157,132 $ 421,345
Cost of sales 192,270 192,270 126,576 318,846
-------------- --------------- ---------------- ------------------ ---------------- ---------------
Gross profit 71,943 71,943 30,556 102,499
S,G&A 27,717 325(1) 28,042 14,041 1,226(3) 43,309
-------------- --------------- ---------------- ------------------ ---------------- ---------------
Operating income 44,226 (325) 43,901 16,515 (1,226) 59,190
Interest expense 6,106 (2,090)(2) 4,016 13 7,402(4) 11,431
Other 2,182 2,182 (376) 1,806
-------------- --------------- ---------------- ------------------ ---------------- ---------------
Income before
income taxes 35,938 1,765 37,703 16,878 (8,628) 45,953
Provision for
income taxes 14,556 706(5) 15,262 - 3,371(5) 18,633
-------------- --------------- ---------------- ------------------ ---------------- ---------------
Income before
extraordinary item $ 21,382 $ 1,059 $ 22,441 $ 16,878 $ (11,999) $ 27,320
============== =============== ================ ================== ================ ===============
Earnings per share
before extraordinary
item $ 1.66 $ 1.57 $ 1.92
Weighted average
shares outstanding 12,845,000 14,250,000 14,250,000
</TABLE>
(1) The increase in selling, general and administrative expenses reflects the
Company's estimate of the additional costs associated with being a public
company.
(2) Reductions in interest expense reflect the application of net proceeds from
the March 1997 Offering to repay $21,000 of subordinated debt and $15,000
of term loans.
(3) Operating expenses for the twelve months ended September 30, 1997 have been
adjusted for the amortization of goodwill (over a 40-year period) related
to the acquisition of Snorkel.
(4) Interest expense for the twelve months ended September 30, 1997 has been
adjusted for the following:
Interest (interest rate of 7.5%) on acquisition debt of $100,000 $ 7,415
Historical interest expense on the debt not assumed (13)
-------
$ 7,402
=======
(5) Amounts reflect the estimated income tax effects of pro forma adjustments
and the effect of reflecting income tax expense for Snorkel. The expense
related to Snorkel had previously been recorded by its parent and not in
Snorkel's historical results.
<PAGE>
PRO FORMA UNAUDITED CONSOLIDATED BALANCE SHEET
September 30, 1997
(dollars in thousands)
<TABLE>
<CAPTION>
Snorkel Omniquip/
Omniquip Snorkel Pro Forma Snorkel
As reported As reported Adjustments Pro Forma
------------- --------------- -------------- --------------
<S> <C> <C> <C> <C>
Current Assets
Cash $ 5 $ 1,855 $ (1,855)(1) $ 5
Receivables 22,689 17,776 40,465
Inventories 30,956 33,482 64,438
Prepaid expenses & other 6,640 705 4,696(2) 12,041
------------- --------------- -------------- --------------
Total current assets 60,290 53,818 2,841 116,949
Property, Plant & Equipment, net 17,130 11,899 7,455(4) 36,484
Goodwill and other assets 66,878 13,889 49,050(3) 129,817
------------- --------------- -------------- --------------
Total Assets 144,298 79,606 59,346 283,250
============= =============== ============== ==============
Current Liabilities
Current portion of debt 8,625 (1,125)(5) 7,500
Accounts payable 20,433 14,842 35,275
Accrued expenses 16,915 10,034 3,510(4) 30,459
------------- --------------- -------------- --------------
Total current liabilities 45,973 24,876 2,385 73,234
Long-term debt (100% term debt) 25,524 111,688(5) 137,212
Deferred income taxes 1,981 1,981
Other long-term liabilities 422 3 425
------------- --------------- -------------- --------------
Total Liabilities 73,900 24,879 114,073 212,852
Shareholders' Equity 70,398 54,727 (54,727)(6) 70,398
------------- --------------- -------------- --------------
Total Liabilities & Equity $144,298 $79,606 $ 59,346 $ 283,250
============= =============== ============== ==============
</TABLE>
(1) Amounts reflect cash which was retained by the seller and was not purchased
by Omniquip.
(2) Amounts reflect deferred tax assets recorded in purchase accounting.
(3) Amount reflects the excess of purchase price over fair market value of the
net assets acquired. The goodwill amount will be amortized over a 40-year
period.
(4) Property, plant and equipment was increased to reflect the acquisition of
previously leased assets. Certain reserves (primarily product liability and
warranty) were increased primarily to reflect Omniquip's historical
accounting policies.
(5) Debt amounts were adjusted to reflect the debt financing of the Snorkel
acquisition and related acquisition costs.
(6) Amount reflects the elimination of the historical, pre-acquisition equity
balances of Snorkel.
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, as
amended, the Registrant has duly caused this report to be signed on its behalf
by the undersigned hereunto duly authorized.
OMNIQUIP INTERNATIONAL, INC.
Date: January 27, 1998 By: /s/ Philip G. Franklin
----------------------
Philip G. Franklin
Vice President - Finance, Chief
Financial Officer, Treasurer
and Secretary
