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Previous: DRUG GUILD DISTRIBUTORS INC, NT 10-Q, 1996-06-13 |
Next: AMBER RESOURCES CO, 10QSB, 1996-06-13 |
<PAGE>
SECURITIES AND EXCHANGE COMMISSION
Washington, DC 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) April 25, 1996
VERNITRON CORPORATION
(Exact name of registrant as specified in its charter)
DELAWARE 0-16182 11-1962029
(State or other jurisdiction) (Commission) (IRS Employer
Identification Number)
645 MADISON AVENUE, NEW YORK, NEW YORK 10022
(Address of principal executive offices, including zip code)
(212) 593-7900
Registrant's telephone number, including area code
<PAGE>
On April 25, 1996, Vernitron Corporation, a Delaware Corporation (the
"Company") acquired Precision Aerotech, Inc., a Delaware corporation ("PAI").
This transaction was reported on Item 2 on Form 8-K, dated May 7, 1996.
This Form 8-K, dated June 13, 1996, provides the pro forma financial
information required by Item 7(b) as follows:
ITEM 7. FINANCIAL STATEMENTS AND EXHIBITS
(b) Pro Forma Financial Information
The following unaudited pro forma condensed statements of
operations of the Company for the three months ended March 31,
1996 (attached as Exhibit 7(b)(.1) and the year ended December 31,
1995 (attached as Exhibit 7(b)(.2), present results for the
Company as if the Company's acquisition of Precision Aerotech,
Inc. ("PAI") and financing transaction related to the acquisition
had occurred as of January 1, 1995. The pro forma condensed
balance sheet of the Company as of March 31, 1996 (attached as
Exhibit 7(b)(.3) gives effect to the acquisition and related
financing transaction as if they had occurred as of March 31,
1996. The unaudited pro forma financial information does not
purport to represent what the Company's financial position or
results of operations actually would have been had the acquisition
and the related financing transaction in fact occurred on the
dates indicated, or to project the Company's financial position or
results of operations for any future date or period. The pro forma
adjustments are based on available information and certain
assumptions that the Company currently believes are reasonable in
the circumstances. The unaudited financial information should be
read in conjunction with the accompanying notes thereto (attached
as Exhibit 7(b)(.4); the separate historical condensed financial
statements of the Company as of and for the three month period
ended March 31, 1996 which are contained in the Company's
Quarterly Report on Form 10-Q for such period; and the historical
financial statements of the Company as of and for the year ended
December 31, 1995 which are contained in the Company's Annual
Report on Form 10-K for such period. PAI has historically reported
its financial results on a fiscal year ending April 30. For the
purpose of the pro forma financial information, PAI's historical
financial information has been restated to include the periods
corresponding to a calendar year.
The pro forma adjustments and pro forma combined amounts are
provided for informational purposes only. The Company's financial
statements will reflect the effects of the acquisition and related
financing transaction only from the date such events occurred. The
pro forma adjustments are applied to the historical financial
statements to, among other things, account for the acquisition as
a purchase. Under purchase accounting, the total purchase cost
will be allocated to the PAI assets and liabilities based on their
fair values. Allocations are subject to analysis and valuations
as of the date of the acquisition which are not yet completed.
Accordingly, the final allocations will be different from the
amounts reflected herein. Although the final allocations will
differ, the unaudited pro forma financial information reflects
management's best estimate based on currently available
information.
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
Vernitron Corporation
---------------------------
Registrant
Date: June 13, 1996 By:/s/ Raymond F. Kunzmann
-----------------------
Raymond F. Kunzmann
Vice President
2
<PAGE>
Exhibit 7(b)(.1)
VERNITRON CORPORATION
PRO FORMA CONDENSED STATEMENT OF OPERATIONS
FOR THE QUARTER ENDED MARCH 31, 1996
(UNAUDITED - DOLLARS IN THOUSANDS, EXCEPT PER SHARE AMOUNTS)
<TABLE>
<CAPTION>
HISTORICAL HISTORICAL PRO FORMA
VERNITRON PRECISION VERNITRON
CORPORATION AEROTECH, INC. ADJUSTMENTS CORPORATION
----------- -------------- ----------- -----------
<S> <C> <C> <C> <C>
Net sales $17,031 $11,452 ($220)(i) $28,263
Cost of sales 12,603 8,605 (220)(i) 20,988
4 (m)
Selling, general and administrative expenses 3,265 1,881 (130)(k) 5,016
Amortization of intangible assets 52 22 (l) 74
----------- ------------- -----------
Operating income 1,111 966 2,185
Interest expense 444 396 200 (j) 1,040
Other (income) expense (7) (10) (17)
----------- ------------- -----------
Income from continuing operations before taxes 674 580 1,162
Income taxes 284 226 (27)(n) 483
----------- ------------- -----------
Income from continuing operations 390 354 679
Preferred Dividends 184 184
----------- ------------- -----------
Income Applicable to Common Shareholders $ 206 $ 354 $ 495
----------- ------------- -----------
----------- ------------- -----------
Income per Common Share:
Primary $ 0.02 $ 0.04
----------- -----------
----------- -----------
Fully Diluted n/a $ 0.04
----------- -----------
----------- -----------
Weighted Average Number of Common Shares
Outstanding (in thousands):
Primary 12,645 12,645
----------- -----------
----------- -----------
Fully Diluted n/a 13,345
----------- -----------
----------- -----------
</TABLE>
3
<PAGE>
Exhibit 7(b)(.2)
VERNITRON CORPORATION
PRO FORMA CONDENSED STATEMENT OF OPERATIONS
FOR THE YEAR ENDED DECEMBER 31, 1995
(UNAUDITED - DOLLARS IN THOUSANDS, EXCEPT PER SHARE AMOUNTS)
<TABLE>
<CAPTION>
HISTORICAL HISTORICAL PRO FORMA
VERNITRON PRECISION VERNITRON
CORPORATION AEROTECH, INC. ADJUSTMENTS CORPORATION
----------- -------------- ----------- -----------
<S> <C> <C> <C> <C>
Net sales $65,213 $43,488 ($429)(i) $108,272
Cost of sales 47,973 31,958 (429)(i) 79,517
15 (m)
Selling, general and administrative expenses 13,336 7,770 (519)(k) 20,587
Amortization of intangible assets 209 87 (l) 296
---------- ----------- -----------
Operating income 3,695 3,760 7,872
Interest expense 1,994 1,620 877 (j) 4,491
Other (income) expense 252 (38) 214
---------- ----------- -----------
Income from continuing operations before taxes 1,449 2,178 3,167
Income taxes 565 849 (174)(n) 1,241
---------- ----------- -----------
Income from continuing operations 884 1,329 1,926
Preferred Dividends 574 574
---------- ----------- -----------
Income Applicable to Common Shareholders $ 310 $ 1,329 $ 1,352
---------- ----------- -----------
---------- ----------- -----------
Income per Common Share:
Primary $ 0.02 $ 0.11
---------- -----------
---------- -----------
Fully Diluted n/a $ 0.10
---------- -----------
---------- -----------
Weighted Average Number of Common Shares
Outstanding (in thousands):
Primary 12,555 12,555
---------- -----------
---------- -----------
Fully Diluted n/a 13,273
---------- -----------
---------- -----------
</TABLE>
4
<PAGE>
Exhibit 7(b)(.3)
VERNITRON CORPORATION
PRO FORMA CONDENSED BALANCE SHEET
MARCH 31, 1996
(UNAUDITED - DOLLARS IN THOUSANDS)
<TABLE>
<CAPTION>
HISTORICAL HISTORICAL PRO FORMA
VERNITRON PRECISION VERNITRON
CORPORATION AEROTECH, INC. ADJUSTMENTS CORPORATION
----------- -------------- ----------- -----------
<S> <C> <C> <C> <C>
ASSETS
Current Assets:
Cash $ 88 $ 203 $ 291
Accounts Receivable - net 9,848 6,054 15,902
Inventories - net 17,426 9,306 ($300)(g) 26,432
Other Current Assets 708 1,083 (1,003)(g) 788
--------- ----------- -----------
Total Current Assets 28,070 16,646 43,413
Property, Plant & Equipment 7,507 9,359 300 (g) 17,166
Excess of Cost Over Net Assets Acquired 6,572 2,728 (a),(b),(f),(g) 9,300
Other 399 47 1,614 (c) 2,060
--------- ----------- -----------
TOTAL ASSETS $42,548 $26,052 $71,939
--------- ----------- -----------
--------- ----------- -----------
LIABILITIES & STOCKHOLDERS' EQUITY
Current Liabilities:
Accounts Payable $ 5,758 $ 4,366 $10,124
Accrued Expense and Other Liabilities 5,947 4,156 ($150)(e) 9,659
(294)(g)
Current Portion of Long-Term Debt and Capital
Lease Obligations 466 1,456 1,634 (h) 3,556
--------- ----------- -----------
Total Current Liabilities 12,171 9,978 23,339
Long-Term Debt and Capital Lease Obligations 12,120 13,185 3,946 (a) 30,132
962 (b)
1,614 (c)
425 (e)
(486)(d)
(1,634)(h)
Other Long-Term Liabilities 2,735 659 (659)(g) 2,735
Deferred Income 486 486
Shareholders' Equity:
Preferred Stock 7 7
Common Stock 127 8 (8)(f) 127
Capital in Excess of Par 14,598 735 486 (d) 15,084
(735)(f)
Retained Earnings 304 1,487 (275)(e) 29
(1,487)(f)
--------- ----------- -----------
Total Shareholders' Equity 15,036 2,230 15,247
--------- ----------- -----------
TOTAL LIABILITIES & STOCKHOLDERS' EQUITY $42,548 $26,052 $71,939
--------- ----------- -----------
--------- ----------- -----------
</TABLE>
5
<PAGE>
Exhibit 7(b)(.4)
VERNITRON CORPORATION
Notes to Unaudited Pro Forma Financial Statements
(Unaudited - Dollars in thousands)
(a) Represents additional borrowings required to acquire the stock of
Precision Aerotech, Inc.
(b) Represents additional borrowings required to fund acquisition related fees
and expenses.
(c) Represents additional borrowings required to fund fees and expenses
related to securing the Company's new $36,000 credit facility.
(d) Represents the value assigned to the Vernitron common stock warrants
granted in connection with securing the Company's new $36,000 credit
facility
(e) Represents additional borrowings required to fund a $425 penalty incurred
to prepay the Company's existing credit facility. Of this amount, $150 was
charged to a previously established reserve and $275 was expensed. This
expense, which will be recorded as an extraordinary loss on the early
extinguishment of debt, has not been reflected on the Pro Forma Condensed
Statement of Operations as it is considered a nonrecurring charge directly
attributable to the acquisition.
(f) To eliminate the historical equity of Precision Aerotech, Inc.
(g) To reflect the estimated effect of recording the net assets of Precision
Aerotech, Inc. at their fair value in accordance with the purchase method of
accounting for a business combination.
(h) To adjust the Current Portion of Long-Term Debt to reflect the loan
amortization under the Company's new $36,000 credit facility.
(i) To eliminate intercompany sales.
(j) To adjust interest expense for: (i) interest on incremental borrowings
required to fund the acquisition and secure the new credit facility, (ii)
interest savings from lower rates on the new credit facility and, (iii) the
amortization of deferred financing fees.
(k) To reflect expected reductions in overhead expenses as a result of the
integration of Vernitron Corporation and Precision Aerotech, Inc.
(l) To amortize the incremental Excess of Cost over Net Assets Acquired,
created as a result of the acquisition, over 35 years.
(m) To depreciate the estimated purchase accounting step-up to fair value of
Property, Plant & Equipment over the useful lives of the underlying assets.
(n) To reflect the tax effect of the pro forma adjustments.
6
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