<PAGE>
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 8-K/A
AMENDING THE
CURRENT REPORT OF FORM 8-K
FILED ON APRIL 8, 1999
Pursuant to Section 13 or 15(d)
of Securities Exchange Act of 1934
DATE OF EARLIEST EVENT REPORTED: MARCH 24, 1999
TRISTAR AEROSPACE CO.
(Exact name of registrant as specified in its charter)
- -----------------------------------------------------------------------------
DELAWARE 0001-04021 75-2665751
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(State or other jurisdiction of (Commission File No.) (I.R.S. Employer
incorporation) Identification No.)
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2527 Willowbrook Road
Suite 200
Dallas, Texas 75220-4420
(Address of principal executive offices)
214-366-5000
(Registrant's telephone number, including area code)
<PAGE>
Item 7. Financial Statements and Exhibits
(a) Financial Statements of Business Acquired
This Form 8-K/A is being filed to include in the Current Report on Form 8-K
filed by the Registrant with the Securities and Exchange Commission on April 8,
1999 the financial statements and pro forma financial information required by
Item 7.
The required financial statements of the business acquired by the
Registrant are included as exhibits to this Form 8-K/A.
(b) Pro Forma Financial Information
The required pro forma financial information of the Registrant is included
as an exhibit to this Form 8-K/A.
(c) Exhibits
Pro Forma Financial Statements:
TriStar Aerospace Co. and Subsidiaries Unaudited Pro Forma Financial
Statements
Introduction to Unaudited Pro Forma Financial Statements F-1
Unaudited Pro Forma Consolidated Statements of Operations:
Six Months Ended March 31, 1999 F-2
Twelve Months Ended September 30, 1998 F-3
Notes to Unaudited Pro Forma Consolidated Financial Statements F-4
Historical Financial Statements:
Standard Parts and Equipment Corporation
Independent Auditor's Report F-5
Balance Sheet as of December 31, 1998 F-6
Statement of Operations for Year Ended December 31, 1998 F-7
Statement of Stockholders' Equity for Year Ended December 31, 1998 F-8
Statement of Cash Flows for Year Ended December 31, 1998 F-9
Notes to Financial Statements F-10
23.1 Consent of McCaslin & Company, P.C.
<PAGE>
TRISTAR AEROSPACE CO. AND SUBSIDIARIES
INTRODUCTION TO UNAUDITED PRO FORMA FINANCIAL STATEMENTS
Unless the context otherwise requires, reference to the "Company" in this
Form 8-K/A includes TriStar Aerospace Co. and its subsidiaries. The Pro Forma
Consolidated Financial Statements should be read in conjunction with the
Consolidated Financial Statements of the Company and the related notes thereto,
and management's discussion and analysis of financial condition and results of
operations related thereto, all of which are included in the Company's Annual
Report on Form 10-K for the period ended September 30, 1998 filed with the
United States Securities and Exchange Commission.
On March 24, 1999, a subsidiary of TriStar Aerospace Co. consummated the
acquisition of all of the issued and outstanding capital stock of Standard Parts
and Equipment Corporation ("SPEC" or "Business Acquired"). SPEC is engaged in
the business of distributing aerospace fasteners, fastening systems and related
hardware to the aerospace industry. SPEC is based in Fort Worth, Texas. The
allocation of the purchase price to the assets acquired and liabilities assumed
has been initially assigned and recorded based on preliminary estimates of fair
value and may be revised as additional information concerning the valuation of
such assets and liabilities becomes available.
The following unaudited pro forma financial statements of the Company give
effect to: (i) the activity of the Company and (ii) the activity of the Business
Acquired for the periods prior to the consummation of the acquisition, as if the
acquisition occurred on October 1, 1997.
The unaudited pro forma consolidated statement of operations for the six
months ended March 31, 1999 is based upon:
(i) the unaudited consolidated statement of operations of the
Company for six months ended March 31, 1999; and
(ii) the unaudited statement of operations of SPEC for the period
from October 1, 1998 through the acquisition date of
March 24, 1999.
The unaudited pro forma consolidated statement of operations for the
twelve months ended September 30, 1998 is based upon:
(i) the consolidated statement of operations of the Company for
the twelve months ended September 30, 1998; and
(ii) the consolidated statement of operations of SPEC for the twelve
months ended December 31, 1998.
Due to the difference in the fiscal year end for the Company and SPEC, the
results of operations for SPEC for the three-month period ended December 31,
1998 are included in both of the pro forma financial statements described above.
Revenues and net income for SPEC during this period were $6,946,000 and
$1,729,000, respectively.
The pro forma financial statements have been prepared based upon certain
assumptions and include all adjustments as detailed in the Notes to Unaudited
Pro Forma Financial Statements. The pro forma financial data does not purport to
represent what the Company's financial position or results of operations would
actually have been if the transactions had occurred on those dates or to project
the Company's financial position or results of operations for any future period.
F-1
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TRISTAR AEROSPACE CO. AND SUBSIDIARIES
UNAUDITED PRO FORMA CONSOLIDATED STATEMENT OF OPERATIONS
SIX MONTHS ENDED MARCH 31, 1999
(In Thousands, except per share data)
<TABLE>
<CAPTION>
Standard
TriStar Parts and Pro Forma
Aerospace Equipment Pro Forma Financial
Co. Corporation Adjustments Statements
- ---------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
Revenues $101,628 $12,325 $ (951) A $ 113,002
Cost of sales 68,847 8,338 (655) A 76,530
-------- ------- ------- ---------
Gross profit 32,781 3,987 (296) 36,472
Operating expenses 14,849 1,509 434 B 16,667
(125) E
-------- ------- ------- ---------
Operating income 17,932 2,478 (605) 19,805
Other (income) expense (119) - (119)
Interest expense 3,186 158 (158) C 4,303
1,117 D
-------- ------- ------- ---------
Income before taxes 14,865 2,320 (1,564) 15,621
Income taxes 5,750 - 342 E 6,092
-------- ------- ------- ---------
Net Income $ 9,115 $ 2,320 $(1,906) $ 9,529
-------- ------- ------- ---------
-------- ------- ------- ---------
Earnings per share:
Basic $ 0.56
Diluted $ 0.52
Weighted average shares outstanding:
Basic 17,125
Diluted 18,185
</TABLE>
See notes to unaudited pro forma consolidated financial statements.
F-2
<PAGE>
TRISTAR AEROSPACE CO. AND SUBSIDIARIES
UNAUDITED PRO FORMA CONSOLIDATED STATEMENT OF OPERATIONS
TWELVE MONTHS ENDED SEPTEMBER 30, 1998
(In Thousands, except per share data)
<TABLE>
<CAPTION>
Standard
TriStar Parts and Pro Forma
Aerospace Equipment Pro Forma Financial
Co. Corporation Adjustments Statements
- ---------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Revenues $185,945 $27,483 $(1,422) A $212,006
Cost of sales 126,372 18,192 (982) A 143,582
-------- ------- ------- --------
Gross profit 59,573 9,291 (440) 68,424
Operating expenses, including stock options 29,430 4,915 867 B 35,121
(91) E
-------- ------- ------- --------
Operating income 30,143 4,376 (1,216) 33,303
Other (income) expense (163) - (163)
Interest expense 5,475 375 (375) C 7,708
2,233 D
-------- ------- ------- --------
Income before taxes 24,831 4,001 (3,074) 25,758
Income taxes 9,048 - 998 E 10,046
-------- ------- ------- --------
Net Income $ 15,783 $ 4,001 (4,072) 15,712
-------- ------- ------- --------
-------- ------- ------- --------
Earnings per share:
Basic $ 0.94
Diluted $ 0.87
Weighted average shares outstanding:
Basic 16,741
Diluted 18,011
</TABLE>
See notes to unaudited pro forma consolidated financial statements.
F-3
<PAGE>
TRISTAR AEROSPACE CO. AND SUBSIDIARIES
NOTES TO UNAUDITED PRO FORMA CONSOLIDATED FINANCIAL STATEMENTS
A. Reflects the elimination of sales and cost of sales between the Company
and SPEC consummated prior to March 24, 1999.
B. Reflects the amortization of $26,017,000 in goodwill recorded from the
acquisition of SPEC.
C. Reflects the adjustment to interest expense resulting from the repayment
of $3,475,000 in aggregate principal amount of indebtedness of SPEC.
D. Reflects the adjustment to interest expense resulting from borrowings of
$31,600,000 under the Company's existing credit agreement to fund the
acquisition of SPEC.
E. Reflects the provision for income taxes for SPEC, which was previously a
subchapter S corporation.
F-4
<PAGE>
INDEPENDENT AUDITOR'S REPORT
Board of Directors
Standard Parts and Equipment Corporation
We have audited the accompanying balance sheet of Standard Parts and Equipment
Corporation as of December 31, 1998 and the related statements of operations,
stockholders' equity and cash flows for the year then ended. 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 financial statements referred to above present fairly, in
all material respects, the financial position of Standard Parts and Equipment
Corporation as of December 31, 1998 and the results of its operations and its
cash flows for the year then ended in conformity with generally accepted
accounting principles.
McCaslin & Company, P.C.
Ft. Worth, Texas
February 18, 1999
F-5
<PAGE>
STANDARD PARTS AND EQUIPMENT CORPORATION
Balance Sheet
December 31, 1998
(In Thousands, except share and per share data)
<TABLE>
<S> <C>
ASSETS
Current Assets
Cash $ 101
Accounts receivable-trade, net of allowance for bad debts of $97 3,023
Inventories 12,324
Prepaid expenses and other 111
-------
Total Current Assets 15,559
Property and equipment, net 339
Other assets 4
-------
TOTAL ASSETS $15,902
-------
-------
LIABILITIES AND STOCKHOLDERS' EQUITY
Current Liabilities
Accounts payable $ 1,767
Line of credit 1,771
Accrued expenses 706
Current maturities of long-term debt 525
-------
Total Current Liabilities 4,769
Long-term debt, net of current maturities 1,950
Stockholders' Equity
Common stock, voting, $12.50 par , 50,000 shares authorized,
2,400 shares issued and outstanding 30
Common stock, non-voting, $12.50 par, 50,000 shares authorized,
686 shares issued and outstanding 9
Additional paid-in capital 676
Retained earnings 8,468
-------
Total Stockholders' Equity 9,183
-------
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY $15,902
-------
-------
</TABLE>
See Notes to Financial Statements
F-6
<PAGE>
STANDARD PARTS AND EQUIPMENT CORPORATION
Statement of Operations
For the Year Ended December 31, 1998
(In Thousands)
<TABLE>
<S> <C>
Net sales $27,483
Cost of sales 18,192
-------
Gross Profit 9,291
-------
Expenses
Selling 1,523
General and administrative 3,374
Provision for bad debts 18
Interest 375
-------
Total Expenses 5,290
-------
NET INCOME $ 4,001
-------
-------
</TABLE>
See Notes to Financial Statements
F-7
<PAGE>
STANDARD PARTS AND EQUIPMENT CORPORATION
Statement of Stockholders' Equity
For the Year Ended December 31, 1998
(In Thousands)
<TABLE>
<CAPTION>
Non-Voting
Common Stock Common Stock Additional
------------------- ------------------ Paid-In Retained
Shares Amount Shares Amount Capital Earnings
------ ------ ------ ------ ------- --------
<S> <C> <C> <C> <C> <C> <C>
Balances, January 1, 1998 2,400 $ 30 686 $ 9 $ 676 $ 6,167
Net income 4,001
Distributions to stockholders (1,700)
----- ----- --- ---- ----- -------
Balances, December 31, 1998 2,400 $ 30 686 $ 9 $ 676 $ 8,468
----- ----- --- ---- ----- -------
----- ----- --- ---- ----- -------
</TABLE>
See Notes to Financial Statements
F-8
<PAGE>
STANDARD PARTS AND EQUIPMENT CORPORATION
Statement of Cash Flows
For the Year Ended December 31, 1998
(In Thousands)
<TABLE>
<S> <C>
CASH FLOWS FROM OPERATING ACTIVITIES
Net Income $ 4,001
Adjustments to reconcile net income to net cash provided by operating activities
Depreciation 107
Provision for bad debts 18
Gain on sale of asset (10)
Net changes in current assets and liabilities
Accounts receivable-trade, net (190)
Inventories (2,464)
Prepaid expenses and other (84)
Accounts payable and accrued expenses 528
-------
Net Cash Provided by Operating Activities 1,906
-------
CASH FLOWS FROM INVESTING ACTIVITIES
Proceeds from sale of asset 24
Capital expenditures (42)
Other assets 10
-------
Net Cash Used in Investing Activities (8)
-------
CASH FLOWS FROM FINANCING ACTIVITIES
Proceeds from borrowings 571
Payments made on borrowings (775)
Distributions to stockholders (1,700)
-------
Net Cash Used in Financing Activities (1,904)
-------
NET DECREASE IN CASH (6)
CASH
Beginning of Year 107
-------
END OF YEAR $ 101
-------
-------
</TABLE>
See Notes to Financial Statements
F-9
<PAGE>
STANDARD PARTS AND EQUIPMENT CORPORATION
Notes to Financial Statements December 31, 1998
(In Thousands)
NOTE 1. SUMMARY OF SIGNIFICANT ACCOUNTING
POLICIES
Standard Parts and Equipment Corporation (the "Company") is a Texas corporation
which is primarily in the business of distributing repair and replacement parts,
principally fasteners, used by the aircraft industry. The Company has customers
throughout the United States and in some foreign countries, which are serviced
through its warehouses located in Ft. Worth, Texas; Carson, California; and
Wichita, Kansas.
USE OF ESTIMATES
The preparation of financial statements in conformity with generally accepted
accounting principles requires management to make estimates and assumptions that
affect certain reported amounts and disclosures. Accordingly, actual results
could differ from those estimates.
ALLOWANCE FOR BAD DEBTS
The allowance for bad debts is based on prior years' experience and management's
analysis of accounts receivable at year-end.
INVENTORIES
Inventories are stated at the lower of cost or market value. Cost is determined
by the first-in, first-out method.
PROPERTY AND EQUIPMENT
Property and equipment is stated at cost. Maintenance and repairs are charged to
operations as incurred. Material renewals and replacements, which improve or
extend the useful lives of individual assets, are capitalized. Depreciation is
computed utilizing the straight-line method over the estimated useful lives of
the various assets.
INCOME TAXES
The Company, with the consent of its stockholders, has elected to be taxed as an
S Corporation under Section 1362 of the Internal Revenue Code, which provides
that, in lieu of corporate income taxes, the stockholders are taxed on the
Company's taxable income. State income taxes have been provided for states not
recognizing S Corporation status.
NOTE 2. CONCENTRATIONS OF CREDIT RISK
Financial instruments which potentially subject the Company to concentrations of
credit risk consists primarily of trade accounts receivable and cash deposited
in a financial institution in excess of the Federal Deposit Insurance
Corporation's insured limit. Substantially all customers are in the aircraft
industry, but such credit risk is considered by management to be limited due to
the large number of customers comprising the Company's customer base.
NOTE 3. SUPPLEMENTAL DISCLOSURES CONCERNING CASH FLOWS
The Company's operations reflect interest paid of $370 and state income taxes
paid of $127 for 1998.
F-10
<PAGE>
NOTE 4. PROPERTY AND EQUIPMENT
Property and equipment consists of the following at December 31, 1998:
<TABLE>
<CAPTION>
Category Recovery Period
-------- ---------------
<S> <C> <C>
Land $ 30
Buildings 5 to 25 years 257
Fixtures and equipment 3-7 years 929
Automobiles 4 years 48
-------
1,264
Less accumulated depreciation and amortization 925
-------
$ 339
-------
-------
</TABLE>
NOTE 5. LINE OF CREDIT
The Company has a revolving line of credit agreement with a bank, which expires
on August 1, 1999. Borrowings under the agreement cannot exceed the lesser of
$2,500 or the borrowing base amount, which is based on a percentage of eligible
accounts receivable and inventories, as defined, reduced by the balance
outstanding under the term note payable described in Note 6. Borrowings under
this agreement bear interest payable quarterly at prime (7.75% at December 31,
1998).
NOTE 6. LONG TERM DEBT
Long-term debt consisted of the following at December 31, 1998:
<TABLE>
<S> <C>
Term note payable to a bank in semi-annual installments, with interest
payable quarterly at the prime rate, due June 2002 $ 2,475
Less current maturities 525
-------
$ 1,950
-------
-------
</TABLE>
The aggregate maturities of long-term debt for each of the next four years is as
follows:
<TABLE>
<S> <C>
1999 $ 525
2000 600
2001 600
2002 750
-------
$ 2,475
-------
-------
</TABLE>
Substantially all of the Company's assets are pledged as collateral on the line
of credit agreement and term note payable. In addition, these agreements contain
certain restrictive covenants which, among other things, limits the amount of
indebtedness the Company can incur and requires the Company to maintain a
certain level of tangible net worth and cash flow, as defined. The Company was
in compliance with these covenants at December 31, 1998.
F-11
<PAGE>
NOTE 7. PROFIT-SHARING PLAN
The Company maintains a non-contributory profit-sharing plan covering
substantially all employees with a minimum of one year of service. Contributions
to the plan of approximately $255 were charged to operations for 1998.
NOTE 8. COMMITMENTS
LEASE AGREEMENTS
The Company has operating leases for its office/warehouse facility in
California, a sales office in New York, certain automobiles and an airplane.
Rent expense of approximately $179 was charged to operations in 1998. Future
minimum lease commitments at December 31, 1998 are as follows:
<TABLE>
<S> <C>
1999 120
2000 38
-----
$ 158
-----
-----
</TABLE>
MANAGEMENT AGREEMENTS
The Company is committed to purchase a 6.25% interest in an airplane in January
1999 for $625 and leases a 6.25% interest in another airplane under an operating
lease agreement. The Company has entered into two agreements with an aircraft
management company (the Aircraft Company) whereby the Aircraft Company manages
these aircraft on behalf of the owners and lessees. The Company is committed to
pay monthly management fees aggregating $10 relating to these agreements.
NOTE 9. SUBSEQUENT EVENT
On February 8, 1999, the Company's stockholders entered into an agreement to
sell their ownership in the Company to TriStar Aerospace Co. (TriStar) for a
maximum amount of approximately $31.6 million.
F-12
<PAGE>
SIGNATURE
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.
TRISTAR AEROSPACE CO.
By: /s/ DOUGLAS E. CHILDRESS
-----------------------------------
Douglas E. Childress
Senior Vice President and Chief
Financial Officer
Dated: June 4, 1999
<PAGE>
EXHIBIT 23.1
CONSENT OF INDEPENDENT CERTIFIED PUBLIC ACCOUNTANTS
We have issued our report dated February 18, 1999, accompanying the financial
statements of Standard Parts and Equipment Corporation contained in the form
8-K/A dated June 4, 1999 of TriStar Aerospace Co. We hereby consent to the
incorporation by reference of said report in the registration statement of
TriStar Aerospace Co. and its subsidiaries filed on Form S-8 on December 1, 1998
(File No. 333-46335).
McCaslin & Company, P.C.
Ft. Worth, Texas
June 4, 1999
