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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): November 17, 2000
VARI-LITE INTERNATIONAL, INC.
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(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)
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ITEM 2. Disposition of Assets.
On November 17, 2000, Vari-Lite International, Inc., a Delaware
corporation ("VLI"), transferred substantially all of the assets of Showco,
Inc., a Delaware corporation and wholly owned subsidiary of VLI ("Showco"),
to Clearsho, LLC, a Delaware limited liability company ("Clearsho"), and
Clearsho assumed certain of Showco's contract liabilities, in exchange for
the sole membership interest in Clearsho. The assets consisted of all
lighting and sound equipment, all intellectual property, certain other
equipment and assets and certain accounts receivable. Subsequently, Showco
sold 100% of its interest in Clearsho to Clair Acquisition Corp., a
Pennsylvania corporation (the "Buyer"). The total sales price was
approximately US$12.7 million, of which $11.9 million was received in cash
and $0.8 million was deposited into escrow to secure the seller's
representations and warranties. 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 Asset Transfer Agreement and the Equity Purchase
Agreement are filed as Exhibits 2.1 and 2.2, respectively. The foregoing
description is qualified in its entirety by reference to the Asset Transfer
Agreement and the Equity Purchase Agreement.
Copies of the press releases, dated October 31, 2000 and November 17,
2000, in which VLI previously announced its intention and subsequent sale of
Showco, are filed as Exhibit 99.1 and Exhibit 99.2, respectively.
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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 (1) the disposition described in Item 2 and (2) the disposition of
Vari-Lite International Europe, B.V. and related equity interests and assets
(collectively, "VLI Europe"), which were sold on October 26, 2000 (collectively,
the "Dispositions") as if they were consummated on September 30, 1999. The
unaudited pro forma condensed consolidated statements of operations and
comprehensive income (loss) give effect to the Dispositions as if they were
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 dispositions 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
CONDENSED CONSOLIDATED BALANCE SHEETS
JUNE 30, 2000
(UNAUDITED)
(IN THOUSANDS EXCEPT SHARE DATA)
<TABLE>
<CAPTION>
PRO FORMA ADJUSTMENTS
HISTORICAL --------------------- PRO FORMA
ASSETS CONSOLIDATED VLI EUROPE SHOWCO CONSOLIDATED
------------ ---------- -------- ------------
<S> <C> <C> <C> <C>
CURRENT ASSETS:
Cash ........................................................................ $ 3,474 $ (653) $ 446 $ 3,267
Receivables, less allowance for doubtful accounts of $790 ................... 11,842 (2,332) 188 9,698
Inventory ................................................................... 12,803 -- -- 12,803
Prepaid expense and other current assets .................................... 2,143 (135) -- 2,008
---------- -------- -------- ----------
TOTAL CURRENT ASSETS .................................................... 30,262 (3,120) 634 27,776
EQUIPMENT AND OTHER PROPERTY:
Lighting and sound equipment ................................................ 131,188 (13,532) (15,577) 102,079
Machinery and tools ......................................................... 5,798 (1,519) (171) 4,108
Furniture and fixtures ...................................................... 5,454 (299) (772) 4,383
Office and computer equipment ............................................... 10,518 (175) (353) 9,990
Work in progress and raw materials inventory ................................ 676 -- (675) 1
---------- -------- -------- ----------
153,634 (15,525) (17,548) 120,561
Less accumulated depreciation and amortization .......................... 86,893 (9,052) (12,605) 65,236
---------- -------- -------- ----------
66,741 (6,473) (4,943) 55,325
OTHER ASSETS .................................................................. 7,428 (1,987) (20) 5,421
---------- -------- -------- ----------
TOTAL ASSETS ............................................................ $ 104,431 $(11,580) $ (4,329) $ 88,522
========== ======== ======== ==========
LIABILITIES AND STOCKHOLDERS' EQUITY
CURRENT LIABILITIES:
Accounts payable and accrued expenses ....................................... $ 13,869 $ (1,832) $ (1,477) $ 10,560
Unearned revenue ............................................................ 3,593 -- (189) 3,404
Income taxes payable ........................................................ 40 5 (3) 42
Current portion of long-term obligations .................................... 40,137 (6,220) (11,500) 22,417
---------- -------- -------- ----------
TOTAL CURRENT LIABILITIES ............................................... 57,639 (8,047) (13,169) 36,423
LONG-TERM OBLIGATIONS ......................................................... 3,815 (2,014) -- 1,801
DEFERRED INCOME TAXES ......................................................... 923 (794) 3,492 3,621
---------- -------- -------- ----------
TOTAL LIABILITIES ....................................................... 62,377 (10,855) (9,677) 41,845
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) 1,042
Retained earnings ........................................................... 16,387 (1,705) 5,349 20,031
---------- -------- -------- ----------
TOTAL STOCKHOLDERS' EQUITY .............................................. 42,054 (725) 5,348 46,677
---------- -------- -------- ----------
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY .............................. $ 104,431 $(11,580) $ (4,329) $ 88,522
========== ======== ======== ==========
See accompanying notes to Unaudited Pro Forma Condensed Consolidated Financial Statements
</TABLE>
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VARI-LITE INTERNATIONAL, INC. AND SUBSIDIARIES
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 ADJUSTMENTS
HISTORICAL --------------------- PRO FORMA
CONSOLIDATED VLI EUROPE SHOWCO CONSOLIDATED
------------ ---------- -------- ------------
<S> <C> <C> <C> <C>
Rental revenues ................................................... $ 59,612 $(8,206) $ (6,714) $ 44,692
Product sales and services revenues ............................... 10,295 -- (149) 10,146
---------- ------- -------- ----------
TOTAL REVENUES ................................................. 69,907 (8,206) (6,863) 54,838
Rental cost ....................................................... 27,886 (4,216) (2,671) 20,999
Product sales and services cost ................................... 6,329 -- (91) 6,238
---------- ------- -------- ----------
TOTAL COST OF SALES ............................................ 34,215 (4,216) (2,762) 27,237
---------- ------- -------- ----------
GROSS PROFIT ................................................... 35,692 (3,990) (4,101) 27,601
Selling, general and administrative expense ....................... 28,309 (3,176) (2,069) 23,064
Research and development expense .................................. 3,754 -- (128) 3,626
Impairment of assets .............................................. 650 3,300 -- 3,950
Gain on the sale of Showco assets ................................. -- -- (7,911) (7,911)
---------- ------- -------- ----------
TOTAL OPERATING EXPENSES ....................................... 32,713 124 (10,108) 22,729
---------- ------- -------- ----------
OPERATING INCOME .................................................. 2,979 (4,114) 6,007 4,872
Interest expense (net) ............................................ 3,575 (536) (928) 2,111
---------- ------- -------- ----------
INCOME (LOSS) BEFORE INCOME TAX ................................... (596) (3,578) 6,935 2,761
Income tax expense (benefit) ...................................... (235) (1,413) 2,739 1,091
---------- ------- -------- ----------
NET INCOME (LOSS) ................................................. (361) (2,165) 4,196 1,670
Other comprehensive loss - foreign currency translation
adjustments ..................................................... (829) -- -- (829)
---------- ------- -------- ----------
COMPREHENSIVE INCOME (LOSS) ....................................... $ (1,190) $(2,165) $ 4,196 $ 841
========== ======= ======== ==========
WEIGHTED AVERAGE BASIC AND DILUTED SHARES OUTSTANDING ............. 7,800,003 7,800,003
========== ==========
PER SHARE INFORMATION
BASIC AND DILUTED:
Net income (loss) ............................................. $ (0.05) $ (0.28) $ 0.54 $ 0.21
Dividends declared ................................................ $ -- $ -- $ -- $ --
See accompanying notes to Unaudited Pro Forma Condensed Consolidated Financial Statements
</TABLE>
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VARI-LITE INTERNATIONAL, INC. AND SUBSIDIARIES
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 ADJUSTMENTS
HISTORICAL --------------------- PRO FORMA
CONSOLIDATED VLI EUROPE SHOWCO CONSOLIDATED
------------ ---------- -------- ------------
<S> <C> <C> <C> <C>
Rental revenues ..................................................... $ 83,863 $(10,683) $ (8,787) $ 64,393
Product sales and services revenues ................................. 7,669 -- -- 7,669
---------- -------- -------- ----------
TOTAL REVENUES ................................................... 91,532 (10,683) (8,787) 72,062
Rental cost ......................................................... 41,561 (7,390) (3,776) 30,395
Product sales and services cost ..................................... 5,389 -- -- 5,389
---------- -------- -------- ----------
TOTAL COST OF SALES .............................................. 46,950 (7,390) (3,776) 35,784
---------- -------- -------- ----------
GROSS PROFIT ..................................................... 44,582 (3,293) (5,011) 36,278
Selling, general and administrative expense ......................... 38,360 (3,695) (2,816) 31,849
Research and development expense .................................... 5,586 -- (177) 5,409
Impairment of assets ................................................ -- 3,300 -- 3,300
Restructuring costs ................................................. 600 -- -- 600
Gain on the sale of Showco assets ................................... -- -- (7,911) (7,911)
---------- -------- -------- ----------
TOTAL OPERATING EXPENSES ......................................... 44,546 (395) (10,904) 33,247
---------- -------- -------- ----------
OPERATING INCOME .................................................... 36 (2,898) 5,893 3,031
Interest expense (net) .............................................. 4,404 (593) (1,013) 2,798
---------- -------- -------- ----------
INCOME (LOSS) BEFORE INCOME TAX ..................................... (4,368) (2,305) 6,906 233
Income tax expense (benefit) ........................................ (1,725) (910) 2,728 93
---------- -------- -------- ----------
NET INCOME (LOSS) ................................................... (2,643) (1,395) 4,178 140
Other comprehensive income - foreign currency translation
adjustments ....................................................... 1,122 -- -- 1,122
---------- ------- -------- ----------
COMPREHENSIVE INCOME (LOSS) ......................................... $ (1,521) $(1,395) $ 4,178 $ 1,262
========== ======= ======== ==========
WEIGHTED AVERAGE BASIC AND DILUTED SHARES OUTSTANDING ............... 7,800,003 7,800,003
========== ==========
PER SHARE INFORMATION
BASIC AND DILUTED:
Net income (loss) ............................................... $ (0.34) $ (0.18) $ 0.54 $ 0.02
Dividends declared .................................................. $ -- $ -- $ -- $ --
See accompanying notes to Unaudited Pro Forma Condensed Consolidated Financial Statements
</TABLE>
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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 VLI Europe and Showco from the historical consolidated
balances. VLI Europe and Showco are 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
June 30, 2000 reflect the sales of the specified equity interests
and assets and the assumption of specified liabilities in addition to
the reduction of bank debt with the proceeds from the sales. Pro forma
adjustments to the condensed consolidated statement of operations and
comprehensive income (loss) for the year ended September 30, 1999 and
the nine months ended June 30, 2000 reflect adjustments to eliminate
the results of operations of VLI Europe and Showco, record the loss on
the sale of VLI Europe as an impairment of assets, record the gain on
the sale of Showco and the reduction of interest expense as a result
of the decrease in debt.
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(c) EXHIBITS.
2.1 Asset Transfer Agreement, dated November 17, 2000, by and among
Vari-Lite International, Inc., Showco, Inc. and Clearsho, LLC.
2.2 Equity Purchase Agreement dated November 17, 2000 by and among
Vari-Lite International, Inc., Showco, Inc., Clair Brothers Audio
Enterprises, Inc. and Clair Acquisition Corp.
99.1 Press Release by Vari-Lite International, Inc. dated October 31,
2000 announcing the pending sale of Showco, Inc.
99.2 Press Release by Vari-Lite International, Inc. dated November 17,
2000 announcing the completion of the sale of Showco, Inc.
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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: December 4, 2000 By: /s/ JEROME L. TROJAN III
------------------ -------------------------------------
Jerome L. Trojan III
Vice President - Finance,
Chief Financial Officer, Treasurer
and Secretary (Principal Financial
and Accounting Officer)
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