===============================================================================
UNITED STATES
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) November 25, 1998
Commission file number: 333-17305
International Knife & Saw, Inc.
(Exact name of registrant as specified in its charter)
Delaware 57-0697252
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
1299 Cox Avenue
Erlanger, Kentucky 41018
(Address of principal executive offices)
(606) 371-0333 (Registrant's telephone number, including area code)
NONE
- -------------------------------------------------------------------------------
(Former name or former address, if changed since last report.)
===============================================================================
<PAGE>
Item 1. Not Applicable
Item 2. Acquisition or Disposition of Assets. The Registrant filed on November
25, 1998 a current report on Form 8-K relating to its acquisition on November
12, 1998, of the shares of A.K. van der Wijngaart Beheer B.V. and subsidiaries.
The purpose of this amendment is to provide the financial statements and
information required by Item 7 of Form 8-K.
Item 3-6. Not Applicable
Item 7. Financial Statements and Exhibits.
Item 7 (a) Financial Statements of Business Acquired
Following are the audited consolidated balance sheets of A.K. van der Wijngaart
Beheer B.V. and subsidiaries as of December 31, 1997 and 1996 and the related
consolidated statements of income, cash flows and shareholder's equity for each
of the two years in the period ended December 31, 1997.
Also following is the unaudited consolidated balance sheet of A.K. van der
Wijngaart Beheer B.V. and subsidiaries as of September 30, 1998 and the related
consolidated statements of income, and cash flows for the nine months ended
September 30, 1998, and 1997.
2
<PAGE>
The Board of Directors and Shareholders
of A.K. van der Wijngaart Beheer B.V.
in Rotterdam
Date Reference
December 30, 1998 R.E. Zijderveld RA/
Dordrecht, The Netherlands A.P. van der Giessen RA
INDEPENDENT AUDITOR'S REPORT
We have audited the accompanying consolidated balance sheets of A.K. van der
Wijngaart Beheer B.V. and subsidiaries (the "Company") as of December 31, 1997
and December 31, 1996 and the related consolidated statements of income, cash
flows and shareholder's equity for each of the two years in the period ended
December 31, 1997. 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 audit.
We conducted our audit 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 audit provides a reasonable basis for our opinion.
In our opinion, the consolidated financial statements present fairly, in all
material respects, the financial position of A.K. van der Wijngaart Beheer B.V.
and subsidiaries as of December 31, 1997 and 1996 and the results of their
operations and their cash flows for each of the two years in the period ended
December 31, 1997 in conformity with generally accepted accounting principles.
Deloitte & Touche
Register Accountants
3
<PAGE>
A.K. van der Wijngaart Beheer B.V. and subsidiaries
Consolidated Balance Sheets
(in thousands of Dutch guilders)
<TABLE>
<CAPTION>
<S> <C> <C> <C>
September 30,
December 31, 1998
----------------------------
1996 1997 (unaudited)
----------- ------------- -------------
NLG NLG NLG
Assets
CURRENT ASSETS:
Cash 170 186 173
Trade accounts receivable less
allowances for doubtful accounts
of NLG 85, NLG 101 and NLG 100 2,601 2,910 2,599
Inventories 1,159 1,399 1,314
Other current assets 437 377 318
----------- -------------- -------------
Total current assets 4,367 4,872 4,404
PROPERTY, PLANT AND EQUIPMENT:
Property, plant and equipment 6,336 6,855 7,358
Less: accumulated depreciation (2,104) (2,479) (2,723)
------------ --------------- -------------
Total property, plant
and equipment 4,232 4,376 4,635
------------ ---------------- --------------
8,599 9,248 9,039
============ ================ ==============
Liabilities and shareholder's equity
CURRENT LIABILITIES:
Due to banks 436 1,446 1,130
Accounts payable 398 477 532
Accrued liabilities 709 763 1,443
Due to parent company 4,315 3,741 1,660
------------ ---------------- --------------
Total current liabilities 5,858 6,427 4,765
PROVISIONS:
Deferred tax liabilities 535 516 546
MINORITY INTEREST 254 271 226
SHAREHOLDER'S EQUITY:
Common Stock, NLG 1,000 par value -
authorized, issued and outstanding
- 50 shares 50 50 50
Legal reserve 10 10 10
Retained earnings 1,892 1,974 3,442
------------ ---------------- --------------
Total shareholder's equity 1,952 2,034 3,502
------------ ---------------- --------------
8,599 9,248 9,039
============ ================ ==============
See accompanying notes
</TABLE>
4
<PAGE>
A.K. van der Wijngaart Beheer B.V. and subsidiaries
Consolidated Statements of Income
(in thousands of Dutch guilders, except per share data)
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C>
Year ended December 31, Nine Months Ended September 30,
----------------------------------- ---------------------------------
1996 1997 1997 1998
(unaudited) (unaudited)
---------------- ---------------- ---------------- ---------------
NLG NLG NLG NLG
REVENUES:
Net product sales 7,551 8,012 5,785 6,163
Net service sales 5,080 5,067 3,769 3,876
---------------- ---------------- ---------------- ---------------
12,631 13,079 9,554 10,039
COST OF SALES:
Cost of product sales 3,724 3,867 2,811 3,067
Cost of service sales 3,161 3,375 2,518 2,502
---------------- ---------------- ---------------- ---------------
6,885 7,242 5,329 5,569
---------------- ---------------- ---------------- ---------------
Gross profit 5,746 5,837 4,225 4,470
Selling, general and administrative expenses 2,049 2,345 1,676 1,808
---------------- ---------------- ---------------- ---------------
Operating income 3,697 3,492 2,549 2,662
Interest income and expenses 113 154 108 117
Minority interest 326 344 264 287
---------------- ---------------- ---------------- ---------------
Income before income taxes 3,258 2,994 2,177 2,258
Income tax 1,146 1,043 766 790
---------------- ---------------- ---------------- ---------------
Net income 2,112 1,951 1,411 1,468
================ ================ ================ ===============
Net income per common share 42,240 39,020 28,220 29,360
See accompanying notes
</TABLE>
5
<PAGE>
A.K. van der Wijngaart Beheer B.V. and subsidiaries
Consolidated Statements of Cash Flows
(in thousands of Dutch guilders)
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C>
Year ended December 31, Nine Months Ended September 30,
----------------------------------- --------------------------------
1996 1997 1997 1998
(unaudited) (unaudited)
---------------- ----------------- --------------- ---------------
NLG NLG NLG NLG
Operating activities
Net income 2,112 1,951 1,411 1,468
Adjustments to reconcile net income
to net cash provided by operating activities:
Depreciation 317 375 277 303
Deferred income tax 23 (19) 26 30
Minority interest in income of subsidiary 10 17 (51) (45)
Changes in operating assets and liabilities:
Accounts receivable 578 (309) 133 311
Inventories 157 (240) (57) 85
Accounts payable (359) 79 412 55
Other current assets less accrued
liabilities (291) 114 (233) 739
---------------- ----------------- --------------- --------------
Net cash provided by operating activities 2,547 1,968 1,918 2,946
Investing activities
Purchases of fixed assets (65) (519) (471) (562)
Financing activities
Decrease in amounts due to parent (1,469) (574) (1,146) (2,081)
Net borrowing (repayments) under revolving
line of credit 436 1,010 (339) (316)
Dividends paid (2,069) (1,869)
---------------- ----------------- --------------- ---------------
Net cash used in financing activities (3,102) (1,433) (1,485) (2,397)
Increase (decrease) in cash (620) 16 (38) (13)
Cash at beginning of period 790 170 170 186
================ ================= =============== ===============
Cash at end of period 170 186 132 173
================ ================= =============== ===============
See accompanying notes
</TABLE>
6
<PAGE>
A.K. van der Wijngaart Beheer B.V. and subsidiaries
Consolidated Statements of Shareholder's Equity
(in thousands of Dutch guilders)
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C>
Issued Legal Retained
share capital reserve earnings Total
----------------- ----------------- ----------------- -----------------
NLG NLG NLG NLG
Balance at December 31, 1995 50 10 1,849 1,909
Net income 1996 2,112 2,112
Dividends (2,069) (2,069)
----------------- ----------------- ----------------- -----------------
Balance at December 31, 1996 50 10 1,892 1,952
Net income 1997 1,951 1,951
Dividends (1,869) (1,869)
----------------- ----------------- ----------------- -----------------
Balance at December 31, 1997 50 10 1,974 2,034
================= ================= ================= =================
See accompanying notes
</TABLE>
7
<PAGE>
A.K. van der Wijngaart Beheer B.V. and subsidiaries
Notes to Consolidated Financial Statements
(in thousands of Dutch guilders)
Activities
The activities of the group consist primarily of the regrinding and trading of
industrial knifes and the manufacturing of knives and moulds.
Consolidation principles
The accompanying consolidated financial statements include the financial data of
A.K. van der Wijngaart Beheer B.V. and its subsidiaries Diacarb B.V., Mayemyton
Trading B.V. and Diacarb Stansvormen. Any intercompany balances and transactions
have been eliminated in consolidation. Minority interests in equity and results
of group companies are separately disclosed in the consolidated financial
statements.
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 disclosure of
contingent assets and liabilities, if any, 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.
General accounting principles
The financial statements have been prepared under the historical cost
convention. Unless otherwise mentioned, assets and liabilities are stated at
face value.
The gains on performances are recognised in the year of supply; losses are
accounted for in the year in which they are foreseeable. Income and charges are
attributed to the financial year to which they relate.
Foreign currency translation
Amounts denominated in foreign currencies are translated into Dutch guilders at
the exchange rates prevailing at balance sheet date. Exchange differences
resulting from translation are taken to the income statement.
8
<PAGE>
A.K. van der Wijngaart Beheer B.V. and subsidiaries
Notes to Consolidated Financial Statements (Continued)
(in thousands of Dutch guilders)
Receivables
The receivables are stated at face value less a provision for bad debts, which
is computed based on the age of the receivables.
Inventories
The inventories are valued at the lower of cost, cost of manufacture or market
value, taking account of obsolescence. Work in progress includes material,
direct labor and machine costs together with applicable production overhead.
Property, plant and equipment
Property, plant and equipment are valued at cost less straight-line depreciation
based on the estimated economic useful lifetime of the assets concerned.
Provisions
The company provides deferred income taxes for temporary differences between
amounts of assets and liabilities recognized for financial reporting purposes
and such amounts recognized for income tax purposes.
Net sales
Net sales is defined as being the revenues from goods and services supplied in
the financial year less taxes charged on the turnover.
Taxes
The company and the subsidiaries Diacarb B.V. and Mayemyton Trading B.V. form a
fiscal unity for corporate income tax purposes. The tax is computed for the
subsidiaries that are part of the fiscal unity as if they were independently
liable for taxation.
The tax reported in the profit and loss account is calculated at the applicable
rate on the profits for the financial year, taking into account permanent
differences between profits calculated for accounting and taxation purposes.
9
<PAGE>
A.K. van der Wijngaart Beheer B.V. and subsidiaries
Notes to Consolidated Financial Statements (Continued)
(in thousands of Dutch guilders)
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C>
Inventories
December 31,
---------------------------------
1996 1997
---------------- ----------------
NLG NLG
Raw materials 110 93
Work in progress 74 84
Finished products 975 1,222
---------------- ---------------
1,159 1,399
================ ================
Property Plant and Equipment
Movements:
Machinery Other
Land and and operating
Buildings equipment fixed assets Total
---------------- ---------------- ---------------- ----------------
NLG NLG NLG NLG
Book value at December 31, 1995 2,394 1,928 162 4,484
Investments - 20 45 65
Depreciation (48) (213) (56) (317)
---------------- ---------------- ---------------- ----------------
Book value at December 31, 1996 2,346 1,735 151 4,232
Investments - 506 13 519
Depreciation (48) (279) (48) (375)
---------------- ---------------- ---------------- ----------------
Book value at December 31, 1997 2,298 1,962 116 4,376
================ ================ ================ ================
Accumulated depreciation
as at December 31, 1996 495 1,364 245 2,104
================ ================ ================ ================
Accumulated depreciation
as at December 31, 1997 543 1,643 293 2,479
================ ================ ================ ================
</TABLE>
10
<PAGE>
A.K. van der Wijngaart Beheer B.V. and subsidiaries
Notes to Consolidated Financial Statements (Continued)
(in thousands of Dutch guilders)
Due to banks
This includes the current account with ING Bank N.V. The total credit line is
NLG 2,700.
The entire facility is secured by:
o first mortgage of NLG 1,500 on the real property located at Hoofdweg 50
in Capelle aan den IJssel;
o pledging of accounts receivable and operating equipment;
o pledging of inventories Diacarb Stansvormen (at 1997 year-end NLG 87 and 1996
year-end NLG 101);
o compte-joint and co-liability agreement between A.K. van der Wijngaart Beheer
B.V., Diacarb B.V., A.K. van der Wijngaart B.V. and Mayemyton Trading B.V.;
o joint and several liability of Mayemyton Trading B.V. for the credit line
granted to Diacarb Stansvormen (at 1997 year-end NLG 17 and 1996 year end
NLG 0);
o non-dividend declaration to the effect that no dividend will be distributed as
long as solvency is below 30%.
Due to parent company
On the liability an interest rate of 6% is charged. No securities have been
granted.
Provisions
The provision for deferred taxation should be regarded as long-term. Temporary
differences between statutory and tax accounting are mainly caused by different
depreciation periods.
Minority interest
This Item concerns the capital participation by third parties in the partnership
firm (vennootschap onder firma - vof) Diacarb Stansvormen in Capelle aan den
IJssel.
The following movements occurred in this Item:
1996 1997
---------------- ----------------
NLG NLG
Balance at January 1 244 254
Share in the result 326 344
Withdrawals (316) (327)
----------------- -----------------
Balance at December 31 254 271
================= =================
11
<PAGE>
A.K. van der Wijngaart Beheer B.V. and subsidiaries
Notes to Consolidated Financial Statements (Continued)
(in thousands of Dutch guilders)
Shareholder's equity
The issued share capital consists of 50 shares of NLG 1,000. The shares have
been fully paid in.
Personnel
Pension charges amounted to NLG 126 (1996 NLG 115). The personnel pension
insurance is placed with the Industrial Pension Fund for the Metal Industry, a
multi-employer pension fund to which yearly premiums have to be paid.
Interest
Year ended December 31,
---------------------------------
1996 1997
---------------- ----------------
NLG NLG
Loans granted (31) (15)
Group companies 133 142
Bank and third parties 11 27
================ ================
Charge on balance 113 154
================ ================
12
<PAGE>
Item 7 (b) Pro Forma Financial Information (Unaudited)
On November 12, 1998 International Knife & Saw, Inc. and its consolidated
subsidiaries ("the Company") acquired from Lembo (Internationaal) B. V. ("the
Seller") all of the shares of A.K. van der Wijngaart Beheer B.V. and its
subsidiaries ("Diacarb"). Diacarb's business includes the regrinding and
distribution of industrial knives in The Netherlands, Belgian and Luxembourg
markets. Diacarb is also involved in the manufacture of stansformen (molds to
punch holes) for the carton industry. Diacarb is located in Rotterdam, The
Netherlands.
The purchase price consisted of 12.0 million Dutch guilders in cash
(approximately $6.3 million), financed from existing lines of credit, .9 million
Dutch guilders (approximately $.6 million) in assumed debt, and a 5% promissory
note to the Seller for 5.0 million Dutch guilders (approximately $2.6 million),
subject to post closing adjustments. The promissory note is payable in
installments of 1.0 million Dutch guilders (approximately $.5 million) on
January 15, 2000, and 2.0 million Dutch guilders (approximately $1.0 million) on
January 15, 2001 and 2002.
Following are the unaudited pro forma consolidated balance sheet at September
30, 1998, and the unaudited pro forma consolidated statements of income of the
Company for the year ended December 31, 1997 and for the nine months ended
September 30, 1998.
The following pro forma consolidated balance sheet and consolidated statements
of income (collectively, the "pro forma consolidated statements") are based on
the historical consolidated financial statements of the Company, adjusted to
give effect to the acquisition of Diacarb. The pro forma consolidated balance
sheet assumes that all transactions occurred as of September 30, 1998. The pro
forma consolidated statements of income assumes that all transactions occurred
as of the first day of 1997.
The pro forma consolidated statements reflect the purchase method of accounting
for the acquisition of Diacarb using estimated purchase accounting adjustments
which are subject to revision once appraisals, actuarial reviews and other
studies of the fair value of the assets and liabilities of Diacarb are
completed. The purchase price of Diacarb is also subject to post-closing
adjustments. Final purchase accounting adjustments may differ from the pro forma
adjustments presented herein and described in the accompanying notes.
The pro forma consolidated statements do not purport to present what the
Company's financial position and results of operations would actually have been
had the acquisition of Diacarb occurred on September 30, 1998 for the pro forma
consolidated balance sheet, or had the acquisition of Diacarb occurred on the
first day of 1997 for the pro forma consolidated statements of income, or
purport to project the Company's results of operations for any future period.
The pro forma consolidated statements reflect certain assumptions described in
the accompanying notes. The pro forma consolidated statements and accompanying
notes should be read in conjunction with the audited consolidated financial
statements of the Company and the related notes thereto which are included in
the Company's Annual Report on Form 10-K for its fiscal year ended December 31,
1997, and the Company's Current Report on Form 8-K dated November 25, 1998 (both
filed with the Securities and Exchange Commission), and the consolidated
financial statements of Diacarb that are filed herewith as Item 7(a).
13
<PAGE>
International Knife & Saw, Inc. and Subsidiaries
Pro Forma Consolidated Balance Sheet
(Unaudited)
(in thousands)
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C> <C> <C>
September 30, 1998
---------------------------------------------------------------------------
International
Historical Acquisition Knife & Saw, Inc.
International Historical Pro Forma and Diacarb
Knife & Saw, Inc. Diacarb (a) Adjustments Consolidated
----------------- ----------- ----------- ------------------
Assets
Current assets:
Cash and cash equivalents $ 2,903 $ 91 $ - $ 2,994
Accounts receivable, trade, less
allowances for doubtful accounts 23,856 1,361 - 25,217
Inventories 30,607 688 - 31,295
Other current assets 4,386 167 - 4,553
-----------------------------------------------------------------------------
Total current assets 61,752 2,307 - 64,059
Other assets:
Goodwill 13,065 - 4,642 (d) 17,707
Debt issuance costs 3,320 - - 3,320
Other noncurrent assets 2,738 - - 2,738
-----------------------------------------------------------------------------
19,123 - 4,642 23,765
Property, plant and equipment-net 41,317 2,427 2,507 (d) 46,251
-----------------------------------------------------------------------------
Total assets $122,192 $ 4,734 $ 7,149 $ 134,075
=============================================================================
</TABLE>
See notes to Pro Forma Consolidated Balance Sheet.
14
<PAGE>
International Knife & Saw, Inc. and Subsidiaries
Pro Forma Consolidated Balance Sheet (Continued)
(Unaudited)
(in thousands)
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C>
September 30, 1998
----------------------------------------------------------------------
International
Historical Acquisition Knife & Saw, Inc.
International Historical Pro Forma and Diacarb
Knife & Saw, Inc. Diacarb(a) Adjustments Consolidated
----------------- ---------- ----------- -----------------
Liabilities and Shareholder's deficit
Current liabilities:
Notes payable $ 3,882 $ 592 $ - $ 4,474
Current portion of long-term debt 2,163 - 2,163
Accounts payable 9,241 279 - 9,520
Accrued liabilities 13,460 755 - 14,215
Due to parent 499 869 (869) (c) 499
----------------------------------------------------------------------
Total current liabilities 29,245 2,495 (869) 30,871
Long-term debt, less current portion 103,802 - 8,900 (b) 112,702
Other liabilities 4,864 286 877 (d)
75 (b) 6,102
----------------------------------------------------------------------
Total liabilities 137,911 2,781 8,983 149,675
Minority interest 2,223 119 - 2,342
Shareholder's (deficit) equity:
Common stock 5 1,834 (8,975) (b)
1,630 (d)
869 (c)
4,642 (d) 5
Additional paid-in capital 10,153 - - 10,153
Retained (deficit) earnings (22,513) - - (22,513)
Accumulated other
comprehensive loss:
Cumulative foreign currency
translation adjustment (2,155) - - (2,155)
Treasury stock, at cost (3,432) - - (3,432)
----------------------------------------------------------------------
Total shareholder's (deficit) equity (17,942) 1,834 (1,834) (17,942)
----------------------------------------------------------------------
Total liabilities and shareholder's $ 122,192
(deficit) equity $ 4,734 $ 7,149 $ 134,075
======================================================================
</TABLE>
See notes to Pro Forma Consolidated Balance Sheet.
15
<PAGE>
International Knife & Saw, Inc. and Subsidiaries
Notes to Pro Forma Consolidated Balance Sheet
(Unaudited)
(in thousands)
(a) The amounts in the "Historical Diacarb" column are derived from the
unaudited consolidated balance sheet of Diacarb as of September 30, 1998, which
was prepared based on accounting principles generally accepted in the United
States.
(b) The acquisition of Diacarb was financed as shown in the following table.
Paid to Seller at closing, financed from
existing revolving credit facilities....... $6,283
Promissory note to seller...................... 2,617
-----
Total consideration........................ $8,900
======
The following tables depict the calculation of the Company's acquisition costs
and its preliminary allocation to Diacarb's assets and liabilities using
estimated purchase accounting adjustments which are subject to post closing
adjustments once appraisals, actuarial reviews and other studies of the fair
value of the assets and liabilities of Diacarb are completed. Final purchase
accounting adjustments may differ from the amounts shown below. Under the terms
of the share purchase agreement, the expected purchase price of Diacarb as of
November 12, 1998 was $8,900.
Calculation of acquisition cost:
Purchase of Diacarb . . . . . . . . . . . . . $8,900
Accrual for transaction fees. . . . . . . . . 75
-----
Total acquisition cost . . . . . . . . . . . $8,975
=====
Allocation of acquisition cost:
Cash and cash equivalents. . . . . . . . . . $ 91
Accounts receivable. . . . . . . . . . . . . 1,361
Inventories . . . . . . . . . . . . . . . . 688
Other current assets. . . . . . . . . . . . 167
Property, plant and equipment . . . . . . . 4,934
Goodwill. . . . . . . . . . . . . . . . . . 4,642
Minority Interest. . . . . . . . . . . . . (119)
Deferred tax liabilities. . . . . . .. . . . (1,163)
Historical liabilities assumed. . . . . . . (1,626)
-------
Total acquisition cost . . . . . . . . . . . $ 8,975
=======
(c) Adjustment of Diacarb's historical balance sheet to exclude amount due to
seller.
(d) Purchase accounting adjustments to Diacarb's historical asset values as
follows:
Adjustment of property, plant and equipment to fair value ($2,507), net of
deferred tax liabilities ($877). Recording of goodwill arising from the
purchase of Diacarb by the Company of $4,642 million.
16
<PAGE>
International Knife & Saw, Inc. and Subsidiaries
Pro Forma Consolidated Statements of Income
(Unaudited)
(in thousands, except per share amounts)
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C>
Year ended December 31, 1997
----------------------------------------------------------------------------------
International
Historical Acquisition Knife & Saw, Inc.
International Historical Pro Forma and Diacarb
Knife & Saw, Inc. Diacarb (a) Adjustments Consolidated
----------------- ----------- ------------ -----------------
Net sales $ 142,265 $ 6,702 $ - $ 148,967
Cost of sales 99,176 3,711 577 (c) 103,464
-------------------------------------------------------------------------------------
Gross profit 43,089 2,991 (577) 45,503
Selling, general and administrative
Expenses 27,681 1,202 306 (d) 29,189
-------------------------------------------------------------------------------------
Operating income 15,408 1,789 (883) 16,314
Other expenses (income):
Interest income (261) (8) - (269)
Interest expense 11,948 87 281 (b) 12,316
Minority interest 174 176 - 350
-------------------------------------------------------------------------------------
11,861 255 281 12,397
-------------------------------------------------------------------------------------
Income before income taxes 3,547 1,534 (1,164) 3,917
Provision for income taxes 1,499 534 (483) (e) 1,550
-------------------------------------------------------------------------------------
Net income $ 2,048 $ 1,000 $ (681) $ 2,367
=====================================================================================
Net income per common share $ 4.25 $ 4.91
</TABLE>
See Notes to Pro Forma Consolidated Statement of Income.
17
<PAGE>
International Knife & Saw, Inc. and Subsidiaries
Pro Forma Consolidated Statements of Income
(Unaudited)
(in thousands, except per share amounts)
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C>
Nine months ended September 30, 1998
----------------------------------------------------------------------------------
International
Historical Acquisition Knife & Saw, Inc.
International Historical Pro Forma and Diacarb
Knife & Saw, Inc. Diacarb (a) Adjustments Consolidated
----------------- ---------- ------------ -----------------
Net sales $ 111,881 $ 4,967 $ - $ 116,848
Cost of sales 78,023 2,755 409 (c) 81,187
-------------------------------------------------------------------------------------
Gross profit 33,858 2,212 (409) 35,661
Selling, general and administrative
Expenses 22,015 894 218 (d) 23,127
-------------------------------------------------------------------------------------
Operating income 11,843 1,318 (627) 12,534
Other expenses (income):
Interest income (77) (6) - (83)
Interest expense 9,037 64 213 (b) 9,314
Minority interest 28 142 - 170
------------------------------------------------------------------------------------
8,988 200 213 9,401
------------------------------------------------------------------------------------
Income before income taxes 2,855 1,118 (840) 3,133
Provision for income taxes 1,270 391 (358) (e) 1,303
------------------------------------------------------------------------------------
Net income $ 1,585 $ 727 $ (482) $ 1,830
=====================================================================================
Net income per common share $ 3.29 $ 3.80
</TABLE>
See Notes to Pro Forma Consolidated Statement of Income.
18
<PAGE>
International Knife & Saw, Inc. and Subsidiaries
Notes to Pro Forma Consolidated Condensed Statement of Income
(Unaudited)
(in thousands)
(a) The amounts in the "Historical Diacarb" column are derived from the audited
consolidated statement of income of Diacarb for the fiscal year ended December
31, 1997, and the unaudited consolidated statement of income for the nine months
ended September 30, 1998 which were prepared based on accounting principles
generally accepted in the United States.
(b) Adjustments to interest expense include:
<TABLE>
<CAPTION>
<S> <C> <C>
Year ended Nine Months Ended
December 31, 1997 Sept. 30, 1998
(i) Interest expense on additional borrowings
under existing revolving credit facilities $ 277 $ 200
(ii) Interest expense on promissory note to seller 128 93
(iii) Elimination of interest expense on amount
due to seller that was excluded from liabilities acquired (124) (80)
------------------------------------------
$ 281 $ 213
==========================================
(c) Increase in depreciation expense to reflect the adjustment of the historical
value of Diacarb's property, plant and equipment to fair value (see note (d) to
the Pro Forma Consolidated Balance Sheet).
(d) Adjustments to selling, general and administrative expenses include:
Year ended Nine Months Ended
December 31, 1997 Sept. 30, 1998
(i) Increase in depreciation expense to reflect
the adjustment of the historical
value of Diacarb's property, plant and equipment to
fair value (see note (d) to the Pro
Forma Consolidated Balance Sheet). $ 192 $ 136
(ii) Amortization charge related to acquisition basis
goodwill (see note (d) to the Pro Forma Consolidated
Balance Sheet). 114 82
------------------------------------------
$ 306 $ 218
==========================================
(e) Adjustment to decrease the provision for income taxes as a result of the
above adjustments (b) through (d) at an income tax rate of 41.5% for the year
ended December 31, 1997 and 42.6% for the nine months ended September 30, 1998.
</TABLE>
19
<PAGE>
Item 8-9. Not Applicable
EXHIBIT INDEX
Exhibit
No. Description
23 Consent of Independent Auditors
20
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf by the
undersigned, hereunto duly authorized.
INTERNATIONAL KNIFE & SAW, INC.
By: /s/ John E. Halloran
--------------------------
John E. Halloran
President and Chief
Executive Officer
January 22, 1999
21
<PAGE>
Exhibit No. 23 Consent of Independent Auditors Deloitte & Touche
CONSENT OF INDEPENDENT AUDITORS
We consent to the use of our report dated December 30, 1998, with respect to the
consolidated financial statements of A.K. van der Wijngaart Beheer B.V. and
subsidiaries, included in this Current Report on Form 8-K/A (Amendment No. 1) of
International Knife & Saw, Inc.
January 22, 1999
Deloitte & Touche
Registeraccountants
22
