SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
===========================================================================
FORM 8-K/A
AMENDMENT NO. 1
TO
CURRENT REPORT
PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
Date of Report (Date of Earliest Event Reported): February 14, 1996
KYSOR INDUSTRIAL CORPORATION
(Exact Name of Registrant as Specified in its Charter)
MICHIGAN 1-8973 38-1909000
(State or Other Jurisdiction (Commission (IRS Employer
of Incorporation) File Number) Identification Number)
ONE MADISON AVENUE
CADILLAC, MICHIGAN 49601
(Address of Principal Executive Offices) (Zip Code)
Registrant's Telephone Number, Including Area Code: 616-779-2200
===========================================================================
This amendment is filed pursuant to the provisions of paragraphs
(a) (4) and (b) (2) of Item 7 of Form 8-K.
The undersigned registrant hereby amends Item 7, Financial
Statements, PRO FORMA Financial Information and Exhibits, of its Current
Report on Form 8-K dated February 29, 1996 (the "Form 8-K"), as set forth
in the following pages.
Pursuant to paragraphs (a) (4) and (b) (2) of Item 7 of Form 8-K,
Item 7 of the Form 8-K is hereby amended to file the financial statements
and PRO FORMA financial information required to be filed in connection with
the acquisition reported in Item 2 of the Form 8-K.
ITEM 7. FINANCIAL STATEMENTS, PRO FORMA FINANCIAL INFORMATION AND EXHIBITS
(a) FINANCIAL STATEMENTS OF BUSINESS ACQUIRED. The following audited
PRO FORMA consolidated financial statements of Austral Refrigeration Pty
Limited are filed as part of this report:
(1) Introduction;
(2) Pro Forma Consolidated Balance Sheets as of June 30,
1995 and 1994;
(3) Pro Forma Consolidated Statements of Income for the
years ended June 30, 1995, 1994 and 1993;
(4) Pro Forma Consolidated Statements of Shareholders'
Equity for the years ended June 30, 1995, 1994 and 1993;
(5) Pro Forma Consolidated Statements of Cash Flows for the
years ended June 30, 1995, 1994 and 1993;
(6) Notes to Pro Forma Consolidated Financial Statements;
and
(7) Report of Independent Accountants.
The following unaudited PRO FORMA interim consolidated financial
statements of Austral Refrigeration Pty Limited are filed as part of this
report:
(1) Pro Forma Consolidated Condensed Balance Sheet as of
December 31, 1995;
(2) Pro Forma Consolidated Condensed Statement of Income
for the six months ended December 31, 1995; and
(3) Pro Forma Consolidated Condensed Statement of Cash
Flows for the six months ended December 31, 1995.
(b) PRO FORMA FINANCIAL INFORMATION. The following unaudited PRO
FORMA consolidated financial statements of Kysor Industrial Corporation
reflecting the acquisition of Austral Refrigeration Pty Limited are filed
as part of this report:
(1) Pro Forma Consolidated Balance Sheet as of December 31,
1995;
(2) Pro Forma Consolidated Statement of Income for the year
ended December 31, 1995; and
(3) Notes to Pro Forma Consolidated Financial Statements.
(c) EXHIBITS. The following exhibits are filed as part of this
report:
EXHIBIT NO. DOCUMENT
2.1 Share Purchase Agreement between Lobike
Pty Ltd; Locana Pty Ltd; Lofiva Pty Ltd;
Logela Pty Ltd; David James McIntosh;
John Ralph Rogan; Kenneth John Moon;
Leslie Owen Miller; and Kysor Industrial
Corporation, dated December 16, 1995.
2.2 Shareholders Agreement between Lobike Pty
Ltd; Locana Pty Ltd; Lofiva Pty Ltd;
Logela Pty Ltd; Refrigeration Investment
(MBO) Limited; Kysor Industrial
Corporation; Hill Young & Associates
Limited; T & M Lawrence Nominees Pty Ltd;
David James McIntosh; John Ralph Rogan;
Kenneth John Moon; Leslie Owen Miller;
Terry John Lawrence; and Austral
Refrigeration Pty Ltd, dated February 14,
1996.
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.
KYSOR INDUSTRIAL CORPORATION
(Registrant)
Date: April 29, 1996 By: /s/ Terry M. Murphy
Terry M. Murphy
Vice President, Chief Financial
Officer (principal financial
officer and duly authorized
signatory for registrant)
Date: April 29, 1996 By: /s/ Robert L. Joseph
Robert L. Joseph
Comptroller (principal accounting
officer)
INTRODUCTION:
On February 14, 1996, Kysor Industrial Corporation ("Kysor")
completed the purchase of 24.255% of the outstanding common stock of
Austral Refrigeration Pty Limited (Austral"), headquartered in Sydney,
Australia. Austral Refrigeration Pty Limited manufactures, provides
installation of, and services refrigerated display equipment for the
supermarket industry in Australia and other Asian markets.
Kysor paid a total of $18,823,483 for its equity interest in
Austral. The transaction was financed through Kysor's revolving credit
facility at .5% over LIBOR, or 5.6%.
In December of 1995, a group of related companies were
reorganized to form what is now Austral Refrigeration Pty Limited. The
audited financial statements included in the following pages were prepared
on a pro forma basis which assumes that the reorganization had already
occurred prior to the periods covered by the financial statements.
<TABLE>
AUSTRAL REFRIGERATION PTY LIMITED
PRO-FORMA CONSOLIDATED BALANCE SHEETS
<CAPTION>
JUNE 30 JUNE 30
1995 1994
$ AUST $ AUST
<S> <C> <C>
ASSETS
CURRENT ASSETS:
Cash at bank and on hand 11,824,922 7,436,757
Accounts receivable, less allowance of
$257,077 in 1995 and $144,760 in 1994 23,550,361 10,925,435
Inventories
Finished products 1,164,136 617,277
Work-in-progress 6,774,847 3,232,376
Raw materials and supplies 4,750,293 3,693,107
12,689,276 7,542,760
Unsecured loans 2,581,397 3,330,924
Sundry debtors and prepayments 619,279 238,881
TOTAL CURRENT ASSETS 51,265,235 29,474,757
PROPERTY, PLANT AND EQUIPMENT
Land and buildings 772,912 1,120,551
Machinery, equipment, vehicles and furniture
- owned 5,180,779 3,966,922
- leased 3,028,009 2,660,875
8,981,700 7,748,348
Accumulated depreciation and amortization 2,761,170 2,337,480
TOTAL PROPERTY, PLANT AND EQUIPMENT 6,220,530 5,410,868
OTHER ASSETS
Deferred income tax 1,405,725 752,420
Investments 113,905 107,746
Receivables 32,872 50,159
Other 13,950 14,679
TOTAL OTHER ASSETS 1,566,452 925,004
TOTAL ASSETS 59,052,217 35,810,629
</TABLE>
The accompanying notes are an integral part of the consolidated financial
statements.
<TABLE>
AUSTRAL REFRIGERATION PTY LIMITED
PRO-FORMA CONSOLIDATED BALANCE SHEETS
(CONTINUED)
<CAPTION>
JUNE 30 JUNE 30
1995 1994
$ AUST $ AUST
<S> <C> <C>
LIABILITIES AND SHAREHOLDERS' EQUITY
CURRENT LIABILITIES:
Bank overdraft 72,492 159,123
Accounts payable 9,855,938 7,351,785
Other amounts payable and accruals 5,802,027 1,512,970
Unearned income 787,847 498,065
Current portion of hire purchase and
capital lease obligations 971,636 1,148,720
Bank loan 775,000 1,275,000
Shareholder loans 263,020 201,680
Employee compensation 2,013,408 1,491,199
Income taxes 7,524,717 3,484,121
TOTAL CURRENT LIABILITIES 28,066,085 17,122,663
NON-CURRENT LIABILITIES
Hire purchase obligation, less current
portion 167,802 143,453
Capital lease obligation, less current
portion 1,460,256 735,786
Deferred income taxes 393,437 194,314
TOTAL NON-CURRENT LIABILITIES 2,021,495 1,073,553
TOTAL LIABILITIES 30,087,580 18,196,216
MINORITY INTERESTS 1,451,758 1,264,210
SHAREHOLDERS' EQUITY
Shares of $A1.00 par value
Authorized 240,000 shares
Issued 230,004 shares 230,004 230,004
Capital in excess of par value 2,070,000 2,070,000
Retained earnings 25,212,875 14,050,199
TOTAL SHAREHOLDERS' EQUITY 27,512,879 16,350,203
59,052,217 35,810,629
</TABLE>
The accompanying notes are an integral part of the consolidated financial
statements.
<TABLE>
AUSTRAL REFRIGERATION PTY LIMITED
PRO-FORMA CONSOLIDATED STATEMENTS OF INCOME
<CAPTION>
JUNE 30 JUNE 30 JUNE 30
1995 1994 1993
$ AUST $ AUST $ AUST
<S> <C> <C> <C>
Net sales 108,757,610 80,654,545 63,271,401
Other income 1,057,458 387,528 396,703
109,815,068 81,042,073 63,668,104
Costs and expenses
Direct cost of sales 76,622,318 57,164,922 41,933,780
Selling and administrative
expenses 11,457,165 13,188,738 16,230,405
88,079,043 70,353,660 58,164,185
Operating profit 21,735,585 10,688,413 5,503,919
Interest received 776,371 300,304 329,790
Interest paid (302,936) (474,961) (480,012)
Income before income taxes and
minority interest 22,209,020 10,513,756 5,353,697
Income taxes 7,265,546 3,337,944 2,093,759
Income before minority interest 14,943,474 7,175,812 3,259,938
Minority interest 1,083,798 764,070 599,050
NET INCOME 13,859,676 6,411,742 2,660,888
</TABLE>
The accompanying notes are an integral part of the consolidated financial
statements.
<TABLE>
AUSTRAL REFRIGERATION PTY LIMITED
PRO-FORMA CONSOLIDATED STATEMENTS OF SHAREHOLDERS' EQUITY
<CAPTION>
ADDITIONAL
COMMON PAID-IN RETAINED
STOCK CAPITAL EARNINGS TOTAL
$ AUST $ AUST $ AUST $ AUST
<S> <C> <C> <C> <C>
BALANCE AT JUNE 30, 1992 4 - 5,138,569 5,138,573
Net income for 1993 2,660,888 2,660,888
Issue of 230,000 shares with
par value of $1.00 each for
$10.00 each 230,000 2,070,000 2,300,000
BALANCE AT JUNE 30, 1993 230,004 2,070,000 7,779,457 10,099,461
Net income for 1994 6,411,742 6,411,742
Dividend paid (161,000) (161,000)
BALANCE AT JUNE 30, 1994 230,004 2,070,000 14,050,199 16,350,203
Net income for 1995 13,859,676 13,859,676
Dividend paid (2,697,000) (2,697,000)
BALANCE AT JUNE 30, 1995 230,004 2,070,000 25,212,875 27,512,879
</TABLE>
The accompanying notes are an integral part of the consolidated financial
statements.
<TABLE>
AUSTRAL REFRIGERATION PTY LIMITED
PRO-FORMA CONSOLIDATED STATEMENTS OF CASH FLOWS
<CAPTION>
JUNE 30 JUNE 30 JUNE 30
1995 1994 1993
$ AUST $ AUST $ AUST
<S> <C> <C> <C>
CASH FLOWS FROM OPERATING ACTIVITIES
NET INCOME 13,859,676 6,411,742 2,660,888
Adjustments to reconcile net income
to net cash provided by operating
activities
Depreciation and amortization 1,676,846 1,102,495 771,578
Loss (gain) on sale of property,
plant and equipment (177,160) (80,403) (94,076)
Employee compensation 522,209 306,420 176,517
Receivable allowances 112,317 (167,240) 262,000
Minority interest 1,083,798 764,070 599,050
Deferred income taxes (454,182) (163,388) (185,092)
Changes in operating assets
Accounts receivable (12,737,243) 1,744,296 (8,979,081)
Inventories (5,146,516) (1,174,621) (2,783,298)
Other assets (380,398) 3,418 (143,577)
Accounts payable 2,504,153 (1,842,049) 5,745,503
Other creditors and accruals 4,289,057 (620,741) 999,632
Unearned income 289,782 159,829 196,217
Income tax payable 4,040,596 1,209,746 555,496
NET CASH FROM (USED IN) OPERATIONS 9,482,935 7,653,574 (218,243)
CASH FLOWS FROM INVESTING ACTIVITIES
Purchase of property, plant and
equipment (3,094,650) (2,675,173) (2,192,855)
Proceeds on sale of property, plant
and equipment 785,302 280,304 377,630
Advances made - (1,188,501) (436,178)
Net repayment of advances 828,154 - -
Other (5,430) (103,077) 5,899
NET CASH FROM (USED IN) INVESTING
ACTIVITIES (1,486,624) (3,686,447) (2,245,504)
</TABLE>
The accompanying notes are an integral part of the consolidated financial
statements.
<TABLE>
AUSTRAL REFRIGERATION PTY LIMITED
PRO-FORMA CONSOLIDATED STATEMENTS OF CASH FLOWS
(CONTINUED)
<CAPTION>
JUNE 30 JUNE 30 JUNE 30
1995 1994 1993
$ AUST $ AUST $ AUST
<S> <C> <C> <C>
CASH FLOWS FROM FINANCING ACTIVITIES
Proceeds from share issue - 10 2,300,060
Dividends paid
- Austral shareholders (2,697,000) (161,000) -
- minority shareholders in
controlled entities (896,250) (190,000) (291,550)
New capital leases 1,844,655 1,078,672 1,008,457
Principal capital lease repayments (1,275,606) (772,708) (686,364)
New hire purchase contracts 116,227 203,811 -
Principal hire purchase repayments (113,541) (26,449) (13,245)
Repayment of debt (500,000) (225,000) -
NET CASH FROM (USED IN) FINANCING
ACTIVITIES (3,521,515) (92,664) 2,317,358
NET INCREASE (DECREASE) IN CASH 4,474,796 3,874,463 (146,389)
Cash at the beginning of the year 7,277,634 3,403,171 3,549,560
CASH AT THE END OF THE YEAR 11,752,430 7,277,634 3,403,171
Cash at the end of the year comprises
Cash at bank and on hand 11,824,922 7,436,757 3,722,018
Bank overdraft (72,492) (159,123) (318,847)
11,752,430 7,277,634 3,403,171
</TABLE>
The accompanying notes are an integral part of the consolidated financial
statements.
AUSTRAL REFRIGERATION PTY LIMITED
NOTES TO PRO-FORMA CONSOLIDATED FINANCIAL STATEMENTS
1. SIGNIFICANT ACCOUNTING POLICIES
(a) Basis of consolidation
The accompanying pro-forma Consolidated Financial Statements of
the economic entity at June 30, 1995 include the accounts of
Austral Refrigeration Pty Limited, consolidated with the accounts
of all the companies that were or became controlled entities on
July 1, 1995, as if those companies had been controlled entities
for the whole of the periods covered by these financial
statements. All intercompany accounts and transactions have been
eliminated.
(b) Inventories
Inventories are included at the lower of cost and net realizable
value. Cost comprises direct materials, direct labor, and an
appropriate proportion of both variable and fixed manufacturing
overheads, the latter being allocated on the basis of normal
operating capacity. Costs are assigned to individual items of
stock mainly on the "first-in-first-out" basis.
(c) Property, plant and equipment
Property, plant and equipment are stated at cost and depreciated
over their estimated useful lives using the straight line method.
Straight line and accelerated methods of depreciation are used
for tax purposes. Maintenance and repairs are charged to
expense. Profits and losses on disposal of property, plant and
equipment are taken into account in determining the results for
the year.
(d) Employee compensation
(i) Wages, salaries and annual leave
The provision for employee entitlements to wages, salaries
and annual leave represents the amount which the economic
entity has a present obligation to pay resulting from
employees' services provided up to the balance date. The
provision has been calculated at nominal amounts based on
current wage and salary rates and includes related on-costs.
AUSTRAL REFRIGERATION PTY LIMITED
NOTES TO PRO-FORMA CONSOLIDATED FINANCIAL STATEMENTS
1. SIGNIFICANT ACCOUNTING POLICIES (CONT'D)
(ii) Long service leave
A liability for long service leave is recognized, and is
measured as the present value of expected future payments to
be made in respect of services provided by employees up to
balance date. The provision is based on entitlements and
remuneration rates current as at balance date for all
employees with five or more years of service. Related on-
costs have also been included in the liability.
(e) Income taxes
Income taxes are accounted for in accordance with Statement of
Financial Accounting Standards No. 109 ("FAS 109"), "Accounting
for Income Taxes". FAS 109 is based on an asset and liability
approach which requires the recognition of deferred tax
liabilities and assets for the expected future tax consequences
of temporary differences between the carrying amounts and the tax
bases of assets and liabilities. These differences principally
relate to items such as depreciation and accruals of certain
liabilities which are not deductible for tax purposes until paid.
2. CAPITAL LEASE OBLIGATIONS
Future minimum payments for capitalized leases were as follows:
<TABLE>
<CAPTION>
JUNE 30 JUNE 30
1995 1994
$ AUST $ AUST
<S> <C> <C> <C>
1996 1,110,291 1,168,384
1997 838,667 636,448
1998 844,684 186,129
Total minimum lease payments 2,793,642 1,990,961
Less amount representing interest 444,774 211,142
Present value of net minimum lease payments 2,348,868 1,779,819
Less current maturities 888,612 1,044,033
1,460,256 735,786
</TABLE>
AUSTRAL REFRIGERATION PTY LIMITED
NOTES TO PRO-FORMA CONSOLIDATED FINANCIAL STATEMENTS
<TABLE>
<CAPTION>
JUNE 30 JUNE 30
1995 1994
$ AUST $ AUST
<S> <C> <C> <C>
3. HIRE PURCHASE OBLIGATIONS
Future commitments under hire purchase
contracts were as follows:
1996 102,932 121,465
1997 98,332 65,010
1998 71,104 60,410
1999 14,208 33,976
Total repayments 286,576 280,861
Less terms charges included 35,750 32,721
Net amount payable 250,826 248,140
Less current maturities 83,024 104,687
167,802 143,453
</TABLE>
<TABLE>
<CAPTION>
JUNE 30 JUNE 30 JUNE 30
1995 1994 1993
$ AUST $ AUST $ AUST
<S> <C> <C> <C> <C>
4. UNUSUAL ITEMS
The following items have been
included in selling and
administrative expenses disclosed
in the pro-forma consolidated
statements of income and represent
contributions in excess of the
usual annual level of such
contributions in respect of:
Directors' superannuation 608,000 1,721,000 1,310,000
Employee share plan - 1,874,000 3,943,000
</TABLE>
AUSTRAL REFRIGERATION PTY LIMITED
NOTES TO PRO-FORMA CONSOLIDATED FINANCIAL STATEMENTS
<TABLE>
<CAPTION>
JUNE 30 JUNE 30 JUNE 30
1995 1994 1993
$ AUST $ AUST $ AUST
<S> <C> <C> <C> <C>
5. INCOME TAXES
Income taxes differ from the
amount of income tax determined
by applying the applicable
Australian corporate income tax
rate (33%, 1993 39%) to the pre
tax income as a result of the
following differences:
Tax expense at 33% (1993 39%) 7,328,976 3,469,539 2,087,975
Income tax applicable to permanent
differences between accounting
and taxable income (8,822) (33,886) (12,730)
Under (over) provision in prior years 9,760 (97,709) 60,249
Effect on deferred taxes resulting
from change in future tax rates (64,368) - (41,735)
7,265,546 3,337,944 2,093,759
Deferred income tax assets (liabilities)
are comprised of the following:
Employee benefit obligations 724,990 492,097
Inventory reserve 142,414 39,857
Receivable allowance 92,547 47,771
Royalties 178,659 69,796
Warranty reserves 206,148 34,928
Other 60,967 67,971
Total deferred income tax assets 1,405,725 752,420
</TABLE>
AUSTRAL REFRIGERATION PTY LIMITED
NOTES TO PRO-FORMA CONSOLIDATED FINANCIAL STATEMENTS
<TABLE>
<CAPTION>
JUNE 30 JUNE 30 JUNE 30
1995 1994 1993
$ AUST $ AUST $ AUST
<S> <C> <C> <C> <C>
5. INCOME TAXES (CONT'D)
Prepayments (140,560) (16,401)
Depreciation and amortization (13,093) (12,003)
Inventory adjustments (239,784) (165,910)
Total deferred income tax
liabilities (393,437) (194,314)
</TABLE>
6. EMPLOYEE RETIREMENT PLANS
The economic entity contributes to a number of defined contribution
(accumulation) plans. Under Australian legislation all companies in
the economic entity are required to contribute to these plans a
minimum of 6% (1994 5% 1993 5%) of their respective employees'
salaries.
7. SEGMENT INFORMATION
The economic entity operates predominantly in a single industry being
that of industrial refrigeration contracting, installation and
servicing of refrigeration cabinets and the manufacture of doors and
cabinets for commercial refrigeration units.
Of the net sales disclosed in the pro-forma consolidated statements of
income the following customers each accounted for 10% or more in the
relevant years:
<TABLE>
<CAPTION>
JUNE 30 JUNE 30 JUNE 30
1995 1994 1993
$ AUST $ AUST $ AUST
<S> <C> <C> <C> <C>
Customer 1 45,576,000 29,922,000 25,268,000
Customer 2 42,306,000 30,222,000 23,602,000
</TABLE>
AUSTRAL REFRIGERATION PTY LIMITED
NOTES TO PRO-FORMA CONSOLIDATED FINANCIAL STATEMENTS
<TABLE>
<CAPTION>
JUNE 30 JUNE 30 JUNE 30
1995 1994 1993
$ AUST $ AUST $ AUST
<S> <C> <C> <C> <C>
8. RELATED PARTY INFORMATION
The economic entity contributes
to a number of superannuation
funds on behalf of employees
and directors. Management of
the economic entity take part
in the trusteeship of the
funds. Contributions by the
economic entity to the funds
amounted to: 1,142,943 2,333,228 1,637,391
Licence fees are payable to Kysor
Industrial Corporation, a
company incorporated in the
United States of America. The
licence fee was determined on
an arm's length basis. Since
the period covered by these
financial statements, the licensor
has become a substantial shareholder
in Austral Refrigeration Pty
Limited. 1,159,318 671,208 428,389
Amount owing in respect of the
above licence fees payable on
normal trade terms and
conditions. 436,162 186,661
</TABLE>
AUSTRAL REFRIGERATION PTY LIMITED
NOTES TO PRO-FORMA CONSOLIDATED FINANCIAL STATEMENTS
<TABLE>
<CAPTION>
JUNE 30 JUNE 30 JUNE 30
1995 1994 1993
$ AUST $ AUST $ AUST
<S> <C> <C> <C> <C>
8. RELATED PARTY INFORMATION (CONT'D)
Unsecured loans shown in the
pro-forma consolidated balance
sheets include:
(i) loans to a trust, the
unitholders of which are
shareholders of Austral
Refrigeration Pty Limited.
The loans were interest free
and repayable at call and
have been repaid subsequent
to June 30, 1995. 2,180,524 2,163,929
(ii) loans to shareholders which
were interest free and
repayable at call. - 406,543
(iii) amounts owing to shareholders
by way of loans are interest
free and repayable at call 263,020 201,680
</TABLE>
AUSTRAL REFRIGERATION PTY LIMITED
REPORT OF INDEPENDENT ACCOUNTANTS
TO THE SHAREHOLDERS AND BOARD OF DIRECTORS OF AUSTRAL REFRIGERATION PTY
LIMITED
In our opinion, the accompanying pro-forma consolidated balance sheets and
the related pro-forma statements of income, of cash flows and of
shareholders' equity present fairly, in all material respects, the
financial position of Austral Refrigeration Pty Limited and its controlled
entities, as defined in Note 1(a), expressed in Australian dollars at June
30, 1994 and 1995, and the results of their operations and their cash flows
for each of the three years in the period ended June 30, 1995, in
conformity with accounting principles that, as described in Note 1, are
generally accepted in the United States of America. 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 audits. We conducted our audits of these statements in accordance
with generally accepted auditing standards in Australia, which are the same
in all material respects as auditing standards generally accepted in the
United States of America, and which 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, assessing the accounting principles used and significant
estimates made by management, and evaluating the overall financial
statement presentation. We believe that our audits provide a reasonable
basis for the opinion expressed above.
/s/ Mann Judd
MANN JUDD
SYDNEY, AUSTRALIA
MARCH 22, 1996
<TABLE>
AUSTRAL REFRIGERATION PTY LIMITED
PRO FORMA CONSOLIDATED CONDENSED BALANCE SHEET
AS OF DECEMBER 31, 1995
(Unaudited)
(Amounts in Thousands of Australian Dollars)
<CAPTION>
<S> <C>
ASSETS
Current Assets:
Cash 22,194
Accounts receivable 14,926
Inventories 12,045
Other 396
Total Current Assets 49,561
Non-Current Assets:
Investments 281
Property, plant & equipment, net 5,851
Intangible assets 2,172
Other 1,395
Total Non-Current Assets 9,699
TOTAL ASSETS 59,260
Current Liabilities:
Creditors & borrowings 8,528
Provisions 12,653
Total Current Liabilities 21,181
Non-Current Liabilities
Creditors & borrowings 1,532
Provisions 434
Total Non-Current Liabilities 1,966
Total Liabilities 23,147
Shareholders' Equity:
Share capital 2
Reserves 3,375
Retained earnings 31,207
Minority interests 1,529
Total Shareholders' Equity 36,113
TOTAL LIABILITIES & SHAREHOLDERS' EQUITY 59,260
</TABLE>
<TABLE>
AUSTRAL REFRIGERATION PTY LIMITED
PRO FORMA CONSOLIDATED CONDENSED STATEMENT OF INCOME
FOR THE SIX MONTHS ENDED DECEMBER 31, 1995
(Unaudited)
(Amounts in Thousands of Australian Dollars)
<CAPTION>
<S> <C>
Net sales 68,079
Other income 239
68,318
Costs and Expenses:
Direct cost of sales 49,425
Selling and administrative expenses 6,567
55,992
Operating profit 12,326
Interest received 657
Interest paid (25)
Income before income taxes and minority interests 12,958
Provision for income taxes 4,905
Income before minority interests 8,053
Minority interests 477
Net income 7,576
</TABLE>
<TABLE>
AUSTRAL REFRIGERATION PTY LIMITED
PRO FORMA CONSOLIDATED CONDENSED STATEMENT CASH FLOWS
FOR THE SIX MONTHS ENDED DECEMBER 31, 1995
(Unaudited)
(Amounts in Thousands of Australian Dollars)
<CAPTION>
<S> <C>
CASH FLOWS PROVIDED (USED) BY OPERATING ACTIVITIES:
Net income 7,576
Adjustments to reconcile net income
to cash provided by operating activities:
Depreciation and amortization 795
Employee compensation 187
Provision for diminution 100
Provision for doubtful debts 25
Minority interest 477
Deferred income taxes (13)
Changes in operating assets:
Accounts receivable 9,188
Inventories 644
Other assets 147
Accounts payable (5,447)
Other creditors and accruals (3,052)
Unearned income (385)
Income tax payable 2,314
Net Cash Provided by Operating Activities 12,556
CASH FLOWS PROVIDED (USED) BY INVESTING ACTIVITIES:
Purchase of fixed assets (750)
Proceeds on sale of fixed assets 325
Acquisition of investments (267)
Acquisition of subsidiaries (614)
Net repayment of advances 2,237
Net Cash Provided by Investing Activities 931
CASH FLOWS PROVIDED (USED) BY INVESTING ACTIVITIES:
Redemption of shares (2,300)
Dividends paid to minority shareholders (400)
Principal capital lease repayments (319)
New hire purchase contracts 97
Principal hire purchase repayments (45)
Repayment of debt (150)
Net Cash Used by Investment Activities (3,117)
Net Increase in Cash 10,370
Cash at Beginning of Year 11,824
Cash at End of Year 22,194
</TABLE>
<TABLE>
KYSOR INDUSTRIAL CORPORATION
Pro Forma Consolidated Balance Sheet
December 31, 1995
(Unaudited)
(In thousands)
<CAPTION>
KYSOR INDUSTRIAL PRO FORMA PRO FORMA
CORPORATION ADJUSTMENTS RESULTS
<S> <C> <C> <C>
ASSETS
Cash and equivalents $ 16,942 $ 16,942
Accounts receivable 45,733 45,733
Finished goods inventory 5,391 5,391
Work-in-process inventory 9,404 9,404
Raw material inventory 19,621 19,621
Prepaid expenses 2,485 2,485
Deferred income tax charges 8,860 8,860
Total Current Assets 108,436 0 108,436
Investment in Austral Refrigeration, Pty Limited 18,823 A 18,823
Property, plant and equipment 111,079 111,079
Less accumulated depreciated (62,518) (62,518)
48,561 0 48,561
Goodwill, patents and other intangibles 5,327 5,327
Cash value of officers' life insurance 11,644 11,644
Deferred income taxes 6,576 6,576
Miscellaneous receivables and other assets 6,429 6,429
TOTAL ASSETS $186,973 $18,823 $205,796
LIABILITIES AND SHAREHOLDERS EQUITY
Current maturities of long-term debt $ 4,931 $ 4,931
Accounts payable 21,150 21,150
Accrued expenses and contingent liabilities 29,715 29,715
Total Current Liabilities 55,796 0 55,796
Long-Term debt, less current maturities,
plus guarantee of ESOP indebtedness 26,028 18,823 A 44,851
Accumulated postretirement benefit obligation 13,729 13,729
Other long-term liabilities 11,185 11,185
Total Liabilities and Deferred Credits 106,738 18,823 125,561
PREFERRED SHAREHOLDERS' EQUITY
Employee Stock Ownership Plan Preferred Stock 19,440 19,440
Unearned deferred compensation under
Employee Stock Ownership Plan (14,447) (14,447)
Total Preferred Shareholders' Equity 4,993 0 4,993
COMMON SHAREHOLDERS' EQUITY
Common Stock 5,639 5,639
Additional paid-in capital 3,645 3,645
Retained earnings 66,531 66,531
Translation adjustment 483 483
Notes receivable - Common Stock (1,056) (1,056)
Total Commons Shareholders' Equity 75,242 0 75,242
TOTAL LIABILITIES AND
SHAREHOLDERS' EQUITY $186,973 $18,823 $205,796
</TABLE>
<TABLE>
KYSOR INDUSTRIAL CORPORATION
Pro Forma Consolidated Statement of Income
Year Ended December 31, 1995
(Unaudited)
(In thousands, except per share data)
<CAPTION>
KYSOR INDUSTRIAL PRO FORMA PRO FORMA
CORPORATION ADJUSTMENTS RESULTS
<S> <C> <C> <C>
Net sales $361,540 $361,540
Equity in earnings of Austral
Refrigeration Pty Limited 2,454 B 2,454
Interest and other revenues 2,762 2,762
Total sales and revenues 364,302 2,454 366,756
Costs and Expenses
Cost of sales 275,663 275,663
Selling and administrative expenses 55,991 55,991
Interest expense 1,594 1,054 C 2,648
Loss on disposition of foreign operation 9,335 9,335
Other expenses 2,175 2,175
Total Costs and Expenses 344,758 1,054 345,812
Income before income taxes 19,544 1,400 20,944
Income taxes 2,115 (422) D 1,693
Net Income 17,429 1,822 19,251
Dividends on preferred stock, net 987 987
Earnings Applicable to Common Stock $ 16,442 $1,822 $ 18,264
Earnings Per Common Share:
Primary $ 2.78 $ 3.09
Fully Diluted $ 2.42 $ 2.69
Weighted Average Common Shares
and Equivalents 5,914 5,914
</TABLE>
KYSOR INDUSTRIAL CORPORATION
Notes to Unaudited Pro Forma Consolidated Financial Statements
I. Basis of Presentation
The pro forma financial statements give effect to Kysor's purchase of
24.255% of the outstanding common stock of Austral Refrigeration Pty
Limited. The financial statements have been compiled as if Kysor
Industrial Corporation made the investment on the date of the balance
sheet or as of the beginning of the period for purposes of the
statement of income.
The acquisition has been accounted for in the unaudited pro forma
consolidated financial statements using the equity method of
accounting. Pro forma adjustments are required to adjust historical
financial statements of Kysor Industrial Corporation and Austral
Refrigeration Pty. Limited to reflect the addition of debt used to
finance the acquisition, additional interest expense associated with
the debt, and to reflect the amortization of intangible assets
resulting from application of the equity method of accounting.
II. Pro Forma Adjustments
A. Reflects Kysor's 24.255% investment in Austral Refrigeration Pty
Limited and the related debt incurred to facilitate the
transaction. The transaction was financed through Kysor's
revolving credit facility with interest at .5% over LIBOR, or
5.6% at the date of the transaction.
B. To record Kysor's proportionate share of the net income of
Austral Refrigeration Pty Limited for the 12 months ended
December 31, 1995. The amount is translated from Australian
Dollars to U.S. Dollars at the average monthly exchange rate of
1.35 Australian Dollars to one U.S. Dollar for the year ended
December 31, 1995. The reported amount is net of $308 of
goodwill amortization recorded to amortize the difference between
the cost of the investment and Kysor's proportionate share of the
net equity of Austral Refrigeration Pty Limited at the date of
the investment over a period of 40 years.
C. Reflects interest expense resulting from the additional
indebtedness incurred to facilitate the transaction. The
transaction was financed through Kysor's revolving credit
facility with interest at .5% over LIBOR, or 5.6% at the date of
the transaction.
D. Reflects the estimated income tax benefit that would result from
the additional interest expense recorded in pro forma adjustment
"C" assuming a 40% marginal tax rate.
EXHIBIT INDEX
EXHIBIT NO. DOCUMENT
2.1 Share Purchase Agreement between Lobike Pty Ltd;
Locana Pty Ltd; Lofiva Pty Ltd; Logela Pty Ltd;
David James McIntosh; John Ralph Rogan; Kenneth
John Moon; Leslie Owen Miller; and Kysor
Industrial Corporation, dated December 16, 1995.
Here incorporated by reference to the Registrant's
Current Report on Form 8-K dated February 29,
1996.
2.2 Shareholders Agreement between Lobike Pty Ltd;
Locana Pty Ltd; Lofiva Pty Ltd; Logela Pty Ltd;
Refrigeration Investment (MBO) Limited; Kysor
Industrial Corporation; Hill Young & Associates
Limited; T & M Lawrence Nominees Pty Ltd; David
James McIntosh; John Ralph Rogan; Kenneth John
Moon; Leslie Owen Miller; Terry John Lawrence; and
Austral Refrigeration Pty Ltd, dated February 14,
1996. Here incorporated by reference to the
Registrant's Current Report on Form 8-K dated
February 29, 1996.
