SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
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FORM 8-K
CURRENT REPORT
PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
JULY 13, 1998
Date of report (Date of earliest event reported)
BINKS SAMES CORPORATION
(Exact Name of Registrant as Specified in its Charter)
DELAWARE 1-1416 36-0808480
(State or Other Jurisdiction (Commission (I.R.S. Employer
of Incorporation) File Number) Identification No.)
9201 West Belmont Avenue
Franklin Park, Illinois 60131
(Address of Principal Executive Office) (Zip Code)
847/671-3000
(Registrant's telephone number, including area code)
Not Applicable
(Former Name or Former Address, if Changed Since Last Report)
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ITEM 5. OTHER EVENTS.
See attached press release issued by Binks Sames Corporation on July
13, 1998 (the "Press Release"). The information set forth in the Press Release
is incorporated herein by reference. The Press Release includes "safe harbor"
language, pursuant to the Private Securities Litigation Reform Act of 1995,
indicating that certain statements about the Registrant's business contained in
the Press Release are "forward-looking" rather than "historical."
ITEM 7. FINANCIAL STATEMENTS AND EXHIBITS.
(c) EXHIBITS
Exhibit No. Description
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99.1 Press Release dated July 13, 1998.
2
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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, hereunto duly authorized.
BINKS SAMES CORPORATION
(Registrant)
Date: July 13, 1998 By: /s/ Dr. Donald G. Meyer
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Dr. Donald G. Meyer
Chairman and Chief Executive Officer
3
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INDEX TO EXHIBITS
Exhibit No. Description
- ----------- -----------
99.1 Press Release dated July 13, 1998.
4
EXHIBIT 99.1
Contact: Dr. Donald G. Meyer
Chairman of the Board
Binks Sames Corporation
(847) 671-3000 or
Ronald G. Bottrell
DNW Communications
(312) 467-0760
FOR IMMEDIATE RELEASE
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BINKS SAME ANNOUNCES SECOND QUARTER RESULTS
Franklin Park, IL, July 13, 1998 - Binks Sames Corporation (AMEX:BIN) today
announced its operating results for the second quarter of fiscal 1998. For the
three months ended May 31, 1998, the Company recorded a net loss of $8.9
million, or $3.02 per share, on sales of $52.2 million, compared with a loss of
$1.9 million, or $.61 per share, on sales of $53 million in the second quarter
of fiscal 1997. The second quarter earnings decline was attributable to second
quarter 1998 nonrecurring pretax costs of $12.9 million associated with lawsuit
settlements ($9.8 million), amending and refinancing of credit facilities ($1.6
million) and other items ($1.5 million) including costs associated with the
Company's sale process. Excluding the nonrecurring pretax costs of $12.9
million, the net loss would have been $1.6 million, or $.56 per share. Gross
profit margin for the second quarter of fiscal 1998 exceeded 32 percent as
compared to 30 percent attained in the second quarter of fiscal 1997.
For the first six months of fiscal 1998, the Company reported a net loss of
$12.6 million, or $4.25 per share, on sales of $112.1 million, compared to a net
loss during the first six months of fiscal 1997 of $1.7 million, or $.56 per
share. This represents a 5 percent decrease in sales compared to the same period
in 1997, which is largely attributable to the discontinuation of numerous
slow-moving and unprofitable non-automotive product lines which were
discontinued by the end of the first quarter of fiscal 1997.
Dr. Donald G. Meyer, Chairman of the Board and CEO of Binks Sames Corporation,
said, "The restructuring and redirection of the Company continues to impact our
operational results. As we anticipated, our sales volume is lower, but we are
encouraged by the improved gross profit margin experienced in the second quarter
of fiscal 1998 compared to the first quarter of fiscal 1998, which is largely
due to productivity increases experienced by our North American manufacturing
facility."
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Binks Sames/2
"Operating results of the Sames S.A. subsidiary, although profitable, were
adversely affected by lower margins primarily as a result of lower pricing
caused by a drop in demand throughout Asia," Meyer said. "Although we are
encouraged by continuing improvements at the Longmont, Colorado production
facility, anticipated improvements in planning and purchasing are yet to be
fully realized. Significant improvement in assembly and warehousing functions
have occurred."
In February 1998, the Board of Directors announced that it would pursue the sale
of the Company in order to maximize shareholder value. The Board of Directors
has determined that in addition to pursuing the sale of the Company as a whole,
the Board will consider other possible strategic alternatives, which may include
the sale of only component parts of the Company.
On July 1, 1998, the Company's Board of Directors created a three-member Special
Committee of the Board to consider offers and alternatives relating to the sale
of the Company. The members of the Special Committee, the majority of which
consists of outside Directors, are Donald G. Meyer, Wayne F. Edward and Clifford
J. Vaughn.
On July 10, 1998, the Company settled patent infringement actions brought in the
United States by Behr Systems, Inc. and in Germany by Durr Systems GmbH, the
parent of Behr Systems, Inc. The Company decided to settle the patent
infringement actions because of recent technical tests, which conflicted with
previous evidence and caused uncertainty regarding the issue of infringement. In
the settlement the Company has agreed to a paid-up royalty of $9 million for a
world-wide license for the life of all patents at issue in the actions, to be
paid on the earlier of (1) five business days following the closing of the sale
of the Company or any separate sale of the Company's subsidiaries Sames S.A. and
Sames Electrostatic, Inc. or (2) December 31, 1998. The Company anticipates that
if the Company or a substantial component thereof is not sold by December 31,
1998, the Company would need to seek other sources of funds in order to pay for
the settlement. There can be no assurance that such funds will be available and,
if available, on terms favorable to the Company. The entire amount of the
settlement payment is included in the second quarter results as selling, general
and administrative expenses.
The Company has also settled litigation that was pending with former financial
advisors. The settlement agreement calls for payments by the Company to such
advisors of $750 thousand on July 1, 1998, which has been paid, and $75 thousand
on September 4, 1998. The entire amount of the settlement is included in second
quarter results as selling, general and administrative expenses.
On March 20, 1998, a suit was filed against the Company concerning a lease
related to a headquarters facility that had been planned for Vernon Hills,
Illinois. The suit was brought by the developer alleging default by the Company
under the lease. The Company has asserted in a counterclaim that the developer
had previously repudiated the lease and has filed a third party claim against
the real estate advisor that arranged the lease. The advisor has recently filed
a counterclaim
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Binks Sames/3
against the Company. The Company is unable to make a meaningful estimate of the
amount or range of loss that might result from an unfavorable resolution of
these matters.
Continuing improvement in working capital management in the United States, as
well as available lines of credit, should provide sufficient liquidity through
the sale process.
"We are grateful to our customers, suppliers and employees for their continuing
loyal support," said Chairman and CEO Donald G. Meyer. "We are convinced that
our customers will be better served as we complete this process."
Binks Sames Corporation is a leading designer, manufacturer and distributor of
spray finishing and coating application equipment.
# # #
(Statements regarding a sale of the Company or other strategic alternatives
involving the Company and/or its components, ability of the Company to obtain
funding to meet its obligation under the settlement agreement with Behr Systems,
Inc. and Durr Systems GmbH, the resolution of the litigation with the developer
and real estate advisor and the Company's future liquidity constitute
"forward-looking statements" within the meaning of 21E of the Securities
Exchange Act of 1934, and are subject to the safe harbor created thereby.
Although the Company believes that the expectations reflected in such
forward-looking statements are reasonable, it can give no assurance that such
expectations reflected in such forward-looking statements will prove to be
correct. Important factors that could cause actual results to differ materially
from the Company's expectations include, without limitation, the Company's
ability to receive, negotiate and accept an agreement involving a sale of the
Company or other strategic alternative, the Company's ability to obtain
additional funds and the result of the litigation with the developer and real
estate advisor. No assurance can be given that the forward-looking statements
will prove to be accurate.)
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Binks Sames/4
Binks Sames Corporation and Consolidated Subsidiaries
CONSOLIDATED STATEMENT OF OPERATIONS
Six months ended May 31, 1998 and May 31, 1997
(Unaudited)
<TABLE>
<CAPTION>
Three months ended Six months ended
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May 31, 1998 May 31, 1997 May 31, 1998 May 31, 1997
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($000 omitted) ($000 omitted)
<S> <C> <C> <C> <C>
Net sales $ 52,218 52,967 112,082 117,558
Costs of goods sold 35,482 37,162 80,449 83,130
Gross profit 16,736 15,805 31,633 34,428
Selling, general and
administrative expenses 29,892 17,718 47,026 35,240
Operating Loss (13,156) (1,913) (15,393) (812)
Other expense (income):
Interest expense 1,927 1,189 3,542 2,263
Other expense (income) (1,013) (388) (1,101) (518)
Net expense (income) 914 801 2,441 1,745
Loss before income taxes (14,070) (2,714) (17,834) (2,557)
Income tax benefit (5,141) (832) (5,246) (817)
Net loss $ (8,929) (1,882) (12,588) (1,740)
Basic and diluted loss $ (3.02) (.61) (4.25) (.56)
per share
Average basic and diluted 2,963,837 3,088,837 2,963,837 3,088,837
shares outstanding
Cash dividends declared $ .00 .10 .00 .10
per share
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