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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K
CURRENT REPORT
PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934
DATE OF REPORT (DATE OF EARLIEST EVENT REPORTED): October 26, 2000
VARI-LITE INTERNATIONAL, INC.
-----------------------------
(Exact name of registrant as specified in its charter)
DELAWARE 0-23459 75-2239444
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(State or other jurisdiction of (Commission (I.R.S. Employer
incorporation or organization) File Number) Identification No.)
201 REGAL ROW, DALLAS, TEXAS 75247
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(Address of principal executive offices) (Zip Code)
Registrant's telephone number including area code: (214) 630-1963
----------------
NOT APPLICABLE
(Former name or former address, if changed since last report)
<PAGE>
ITEM 2. Disposition of Assets.
On October 26, 2000, Vari-Lite International, Inc., a Delaware
corporation ("VLI"), sold 100% of its interest in the share capital of
Vari-Lite International Europe, B.V. ("VLI Europe"), a Netherlands
corporation, and 0.4% of its interest in Vari-Lite Production Services SAS
("VLPS France"), a French corporation, to First Events B.V. (the "Buyer"), a
Netherlands corporation. VLI Europe owned 100% of the share capital of
Vari-Lite Production Services N.V., a Belgium corporation, 99.6% of VLPS
France, and 100% of Vari-Lite Production Services AB, a Swedish corporation.
In addition, Vari-Lite, Inc., a Delaware corporation and wholly-owned
subsidiary of VLI, sold VARI*LITE -Registered Trademark- lighting equipment
and certain other assets, equipment and receivables to the Buyer. The total
sales price was approximately US$6.1 million and was received in cash. The
Buyer has no material relationship with VLI or any of its affiliates or any
director or officer (or associate thereof) of VLI.
A copy of the Share Purchase Agreement and the Asset Sale Agreement
are filed as Exhibits 2.1 and 2.2, respectively. The foregoing description is
qualified in its entirety by reference to the Share Purchase Agreement and
the Asset Sale Agreement.
Copies of the press releases, dated July 25, 2000, October 3, 2000
and October 30, 2000, are filed as Exhibit 99.1, 99.2 and 99.3, respectively
in which VLI previously announced its intention to sell the business and the
completion of the sale.
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ITEM 7. FINANCIAL STATEMENTS AND EXHIBITS
(a) FINANCIAL STATEMENTS OF BUSINESS ACQUIRED
Not Applicable
(b) PRO FORMA FINANCIAL INFORMATION.
The following unaudited pro forma condensed consolidated financial
statements (the "Pro Forma Financial Statements") are based on the historical
consolidated financial statements of VLI. The statements reflect the
application of the net proceeds as described in the Notes to Pro Forma
Consolidated Financial Statements. The amounts are estimated and subject to
further closing adjustments which are expected to be insignificant.
The unaudited pro forma condensed consolidated balance sheet gives
effect to the disposition described in Item 2 as if it was consummated on
September 30, 1999. The unaudited pro forma condensed consolidated statements
of operations and comprehensive income (loss) give effect to the disposition
as if it was consummated at the beginning of the respective periods
presented. The pro forma adjustments are more fully described in the
accompanying notes.
The Pro Forma Financial Statements are presented for informational
purposes only and do not purport to be indicative of the results of
operations that actually would have been achieved had the disposition been
consummated on the financial statement date or for any future period. The Pro
Forma Financial Statements should be read in connection with the Company's
Annual Report on Form 10-K for the year ended September 30, 1999, the
Consolidated Financial Statements of the Company and related notes thereto
and the Company's Quarterly Report on Form 10-Q for the three and nine months
ended June 30, 2000.
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VARI-LITE INTERNATIONAL, INC. AND SUBSIDIARIES
PRO FORMA CONDENSED CONSOLIDATED BALANCE SHEET
JUNE 30, 2000
(UNAUDITED)
(IN THOUSANDS EXCEPT SHARE DATA)
<TABLE>
<CAPTION>
ASSETS PRO FORMA PRO FORMA
HISTORICAL ADJUSTMENTS CONSOLIDATED
---------- ----------- ------------
<S> <C> <C> <C>
CURRENT ASSETS:
Cash.............................................................. $3,474 $(653) $2,821
Receivables, less allowance for doubtful accounts of $790......... 11,842 (2,332) 9,510
Inventory......................................................... 12,803 - 12,803
Prepaid expense and other current assets.......................... 2,143 (135) 2,008
-------- -------- --------
TOTAL CURRENT ASSETS........................................... 30,262 (3,120) 27,142
EQUIPMENT AND OTHER PROPERTY:
Lighting and sound equipment...................................... 131,188 (13,532) 117,656
Machinery and tools............................................... 5,798 (1,519) 4,279
Furniture and fixtures............................................ 5,454 (299) 5,155
Office and computer equipment..................................... 10,518 (175) 10,343
Work in progress and raw materials inventory...................... 676 - 676
-------- -------- --------
153,634 (15,525) 138,109
Less accumulated depreciation and amortization................. 86,893 (9,052) 77,841
-------- -------- --------
66,741 (6,473) 60,268
OTHER ASSETS......................................................... 7,428 (1,987) 5,441
-------- -------- --------
TOTAL ASSETS................................................... $104,431 ($11,580) $92,851
======== ======== ========
LIABILITIES AND STOCKHOLDERS' EQUITY
CURRENT LIABILITIES:
Accounts payable and accrued expenses............................. $13,869 ($1,832) $12,037
Unearned revenue.................................................. 3,593 - 3,593
Income taxes payable.............................................. 40 5 45
Current portion of long-term obligations.......................... 40,137 (6,220) 33,917
-------- -------- --------
TOTAL CURRENT LIABILITIES...................................... 57,639 (8,047) 49,592
LONG-TERM OBLIGATIONS................................................ 3,815 (2,014) 1,801
DEFERRED INCOME TAXES................................................ 923 (794) 129
-------- -------- --------
TOTAL LIABILITIES.............................................. 62,377 (10,855) 51,522
COMMITMENTS AND CONTINGENCIES
STOCKHOLDERS' EQUITY:
Preferred Stock, $0.10 par value (10,000,000 shares authorized;
no shares outstanding)......................................... - - -
Common Stock, $0.10 par value (40,000,000 shares authorized;
7,845,167 shares issued; 7,800,003 shares outstanding)......... 785 - 785
Treasury Stock.................................................... (186) - (186)
Additional paid-in capital........................................ 25,026 - 25,026
Stockholder notes receivable...................................... (21) - (21)
Stock purchase warrants........................................... - - -
Accumulated other comprehensive income - foreign currency
translation adjustment....................................... 63 980 1,043
Retained earnings................................................. 16,387 (1,705) 14,682
-------- -------- --------
TOTAL STOCKHOLDERS' EQUITY..................................... 42,054 (725) 41,329
-------- -------- --------
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY..................... $104,431 ($11,580) $92,851
======== ======== ========
</TABLE>
See accompanying notes to Unaudited Pro Forma
Condensed Consolidated Financial Statements
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VARI-LITE INTERNATIONAL, INC. AND SUBSIDIARIES
PRO FORMA CONDENSED CONSOLIDATED STATEMENTS OF INCOME AND COMPREHENSIVE INCOME
FOR THE NINE MONTHS ENDED JUNE 30, 2000
(UNAUDITED)
(IN THOUSANDS EXCEPT SHARE DATA)
<TABLE>
<CAPTION>
PRO FORMA PRO FORMA
HISTORICAL ADJUSTMENTS CONSOLIDATED
---------- ----------- ------------
<S> <C> <C> <C>
Rental revenues ........................................................... $ 59,612 $ (8,206) $ 51,406
Product sales and services revenues ....................................... 10,295 - 10,295
--------- -------- ---------
TOTAL REVENUES ......................................................... 69,907 (8,206) 61,701
Rental cost ............................................................... 27,886 (4,216) 23,670
Product sales and services cost ........................................... 6,329 - 6,329
--------- -------- ---------
TOTAL COST OF SALES .................................................... 34,215 (4,216) 29,999
--------- -------- ---------
GROSS PROFIT ........................................................... 35,692 (3,990) 31,702
Selling, general and administrative expense ............................... 28,309 (3,176) 25,133
Research and development expense........................................... 3,754 - 3,754
Impairment of assets ...................................................... 650 3,300 3,950
--------- -------- ---------
TOTAL OPERATING EXPENSES ............................................... 32,713 124 32,837
--------- -------- ---------
OPERATING INCOME ........................................................... 2,979 (4,114) (1,135)
Interest expense (net) ..................................................... 3,575 (536) 3,039
--------- -------- ---------
LOSS BEFORE INCOME TAX ..................................................... (596) (3,578) (4,174)
Income tax benefit ......................................................... (235) (1,413) (1,648)
--------- -------- ---------
NET LOSS ................................................................... (361) (2,165) (2,526)
Other comprehensive loss - foreign currency translation adjustments......... (829) - (829)
--------- -------- ---------
COMPREHENSIVE LOSS.......................................................... $ (1,190) $ (2,165) $ (3,355)
========= ======== =========
WEIGHTED AVERAGE BASIC AND DILUTED SHARES OUTSTANDING....................... 7,800,003 7,800,003
========= =========
PER SHARE INFORMATION
BASIC AND DILUTED:
Net loss ............................................................... $(0.05) $ (0.28) $(0.33)
Dividends declared ......................................................... $ - $ - $ -
</TABLE>
See accompanying notes to Unaudited Pro Forma
Condensed Consolidated Financial Statements
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VARI-LITE INTERNATIONAL, INC. AND SUBSIDIARIES
PRO FORMA CONDENSED CONSOLIDATED STATEMENTS OF INCOME AND COMPREHENSIVE INCOME
FOR THE YEAR ENDED SEPTEMBER 30, 1999
(UNAUDITED)
(IN THOUSANDS EXCEPT SHARE DATA)
<TABLE>
<CAPTION>
PRO FORMA PRO FORMA
HISTORICAL ADJUSTMENTS CONSOLIDATED
---------- ----------- ------------
<S> <C> <C> <C>
Rental revenues ................................................. $83,863 $(10,683) $73,180
Product sales and services revenues ............................. 7,669 - 7,669
---------- --------- -----------
TOTAL REVENUES ............................................... 91,532 (10,683) 80,849
Rental cost ..................................................... 41,561 (7,390) 34,171
Product sales and services cost ................................. 5,389 - 5,389
---------- --------- -----------
TOTAL COST OF SALES .......................................... 46,950 (7,390) 39,560
---------- --------- -----------
GROSS PROFIT ................................................. 44,582 (3,293) 41,289
Selling, general and administrative expense ..................... 38,360 (3,695) 34,665
Research and development expense ................................ 5,586 - 5,586
Impairment of Assets ............................................ - 3,300 3,300
Restructuring costs ............................................. 600 - 600
---------- --------- -----------
TOTAL OPERATING EXPENSES ..................................... 44,546 (395) 44,151
---------- --------- -----------
OPERATING INCOME ................................................ 36 (2,898) (2,862)
Interest expense (net) .......................................... 4,404 (593) 3,811
---------- --------- -----------
LOSS BEFORE INCOME TAX .......................................... (4,368) (2,305) (6,673)
Income tax benefit .............................................. (1,725) (910) (2,635)
---------- --------- -----------
NET LOSS ........................................................ (2,643) (1,395) (4,038)
Other comprehensive income - foreign currency
translation adjustments....................................... 1,122 - 1,122
---------- --------- -----------
COMPREHENSIVE LOSS .............................................. $ (1,521) $ (1,395) $(2,916)
========== ========= ===========
WEIGHTED AVERAGE BASIC AND DILUTED SHARES OUTSTANDING ........... 7,800,003 7,800,003
========== ===========
PER SHARE INFORMATION
BASIC AND DILUTED:
Net loss .................................................... $ (0.34) $ (0.18) $(0.52)
Dividends declared .............................................. $ - $ - $ -
</TABLE>
See accompanying notes to Unaudited Pro Forma
Condensed Consolidated Financial Statements
6
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VARI-LITE INTERNATIONAL, INC. AND SUBSIDIARIES
NOTES TO UNAUDITED PRO FORMA CONDENSED
CONSOLIDATED FINANCIAL STATEMENTS
(a) Except as otherwise described, the pro forma adjustments reflect the
removal of the VLI Europe from the historical, consolidated balances. VLI
Europe is comprised of separate corporations whose balances can be directly
identified. Intercompany transactions primarily consisted of an equipment
lease charge for the use of the VARI*LITE equipment.
(b) Pro forma adjustments to the condensed consolidated balance sheet as of
September 30, 1999 reflect the sales of the specified assets and the
assumption of specified liabilities in addition to the reduction of bank
debt with the proceeds from the sale. Pro forma adjustments to the
condensed consolidated statement of operations and comprehensive income
(loss) for the nine months ended June 30, 2000 and for the year ended
September 30, 1999 reflect adjustments to eliminate the results of
operation of VLI Europe, record the loss on the sale and the reduction
of interest expense as a result of the decrease in debt.
(c) The loss on the sale is shown as impairment of assets in the pro forma
condensed consolidated statement of operations and comprehensive income
(loss) for the nine months ended June 30, 2000 and the year ended
September 30, 1999.
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(c) EXHIBITS.
2.1 Share Purchase Agreement, dated October 26, 2000,
between Vari-Lite International, Inc. and First
Events B.V.
2.2 Asset Purchase Agreement, dated October 26, 2000,
between Vari-Lite, Inc. and First Events B.V.
99.1 Press Release by VLI dated July 25, 2000, announcing
the pending sale of its operations in Belgium, the
Netherlands, France and Sweden.
99.2 Press Release by VLI dated October 3, 2000 announcing
the delay in the sale of its operations in Belgium,
the Netherlands, France and Sweden.
99.3 Press Release by VLI dated October 30, 2000
announcing the completion of the sale of its
operations in Belgium, the Netherlands, France and
Sweden.
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SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.
VARI-LITE INTERNATIONAL, INC.
Date: NOVEMBER 13, 2000 By: /S/ JEROME L. TROJAN III
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Jerome L. Trojan III
Vice President - Finance,
Chief Financial Officer, Treasurer
and Secretary (Principal Financial
and Accounting Officer)
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