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______________________________________________________________________________
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): AUGUST 27, 1996
__________________
AM INTERNATIONAL, INC.
(Exact name of registrant as specified in its charter)
__________________
DELAWARE
(State or other jurisdiction of
incorporation or organization)
9399 W. HIGGINS ROAD, SUITE 900, ROSEMONT, ILLINOIS 60018
(Address of principal executive offices)
1-683 34-0054940
(Commission file number) (I.R.S. Employer Identification No.)
___________________
REGISTRANT'S TELEPHONE NUMBER, INCLUDING AREA CODE: (847) 292-0600
___________________
_____________________________________________________________________________
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Item 2. Acquisition or Disposition of Assets
On August 27, 1996, AM International, Inc., a Delaware corporation (the
"Company"), completed the sale of substantially all of the assets of its
Sheridan Systems division ("Sheridan Systems") to Heidelberger Druckmaschinen
AG, a corporation organized under the laws of the Federal Republic of Germany
("Heidelberger" or the "Buyer"). The sale was completed pursuant to the terms
of the Asset Purchase Agreement dated as of July 9, 1996 among the Company, AM
Graphics International Limited and the Buyer, a copy of which is incorporated
by reference herein as Exhibit 2 hereto, which provided for the sale of
substantially all of the assets and liabilities of Sheridan Systems for
proceeds of approximately $50 million. The terms of this sale were determined
by arms-length negotiations between the Company and the Buyer. A loss of $16.4
million is anticipated to be recorded in the fourth quarter of the Company's
fiscal year ended July 31, 1996, as a result of the transaction.
On August 21, 1996, the Company entered into a definitive agreement with JAC
Co., Ltd., a Japanese marketing firm, and its President, Mr. Shigeru Watanabe,
for the sale of the 2,148,000 shares of AM Japan Co., Ltd. ("AM Japan") owned
by the Company. The Company owns approximately 66.3% of the outstanding shares
of AM Japan. The definitive agreement provides for a tender offer for the
shares of AM Japan at a price of 575 Yen per share (or approximately $5.33 per
share at the prevailing exchange rate as of the date of execution of the
definitive agreement) with any shares held by the Company not accepted in the
tender offer to be purchased 70 days later. The tender offer is subject to
certain customary conditions and is expected to close in late September.
The Company's historical consolidated financial statements have been restated
to reflect the sale of Sheridan Systems and its previously divested
Multigraphics - International Operations as discontinued operations. The
unaudited pro forma financial statements illustrate the effect of certain
adjustments to the historical consolidated financial statements that resulted
from the sale of Sheridan Systems and the proposed sale of the Company's
interest in AM Japan, as if the sales and related transactions had occurred at
the beginning of the periods presented for the Consolidated Statements of
Income from Continuing Operations and as of April 27, 1996 for the Consolidated
Balance Sheet.
Item 7. Financial Statements and Exhibits
(b) Pro Forma Financial Information. The following pro forma information
is filed herewith:
Pro forma consolidated statement of income from continuing operations
(unaudited) for the year ended July 31, 1995
Pro forma consolidated statement of income from continuing operations
(unaudited) for the nine months ended April 27, 1996
Pro forma consolidated balance sheet (unaudited) as of April 27, 1996
Pro forma capitalization (unaudited) as of April 27, 1996
Notes to the pro forma financial statements (unaudited)
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(c) Exhibit 2 - Asset Purchase Agreement among AM International, Inc., AM
Graphics International Limited and Heidelberger Druckmaschinen AG dated as
of July 9, 1996, incorporated herein by reference to Appendix A to the
Company's Proxy Statement dated August 2, 1996, filed with the Securities
and Exchange Commission on August 1, 1996 (File No. 1-683).
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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.
AM INTERNATIONAL, INC.
(Registrant)
/s/Thomas D. Rooney
----------------------------------------
Thomas D. Rooney
Vice President and Chief Financial Officer
Date: September 11, 1996
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AM INTERNATIONAL, INC.
UNAUDITED PRO FORMA CONSOLIDATED STATEMENTS OF INCOME
FROM CONTINUING OPERATIONS
(IN MILLIONS, EXCEPT PER SHARE DATA)
<TABLE>
<CAPTION>
NINE MONTHS ENDED APRIL 27, 1996 YEAR ENDED JULY 31, 1995
--------------------------------------------- -------------------------------------------
(a) (d) (a) (d)
RESTATED SHERIDAN SUB- AM PRO RESTATED SHERIDAN SUB- AM PRO
HISTORICAL SYSTEMS TOTAL JAPAN FORMA HISTORICAL SYSTEMS TOTAL JAPAN FORMA
---------- ------- ----- ------- ------ ---------- -------- ----- ----- -----
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
Revenues $128.2 $ - $128.2 ($21.3) $106.9 $191.5 $ - $191.5 ($34.0) $157.5
Cost of Sales 96.6 - 96.6 (16.3) 80.3 138.8 - 138.8 (24.8) 114.0
------ ----- ------ ------- ------ ------ --- ------ ------ ------
Gross Margin 31.6 - 31.6 (5.0) 26.6 52.7 - 52.7 (9.2) 43.5
Operating Expenses:
Selling, general, and administrative 33.6 - 33.6 (5.8) 27.8 53.4 - 53.4 (8.3) 45.1
Research, development, and engineering 0.6 - 0.6 - 0.6 1.8 - 1.8 - 1.8
Unusual income item - - - - - - - - - -
------ ----- ------ ------- ------ ------ --- ------ ------ ------
Total operating expenses 34.2 - 34.2 (5.8) 28.4 55.2 - 55.2 (8.3) 46.9
------ ----- ------ ------ ------ ------ --- ------ ------ ------
Operating income (loss) (2.6) - (2.6) 0.8 (1.8) (2.5) - (2.5) (0.9) (3.4)
Non-operating income (expense):
Interest income 0.1 -(b) 0.1 -(b) 0.1 0.2 - (b) 0.2 -(b) 0.2
Interest expense (2.7) 0.5(c) (2.2) - (2.2) (3.4) 0.4(c) (3.0) - (3.0)
Other income (expense), net (0.1) - (0.1) (0.2) (0.3) - - - 0.3 0.3
------ ----- ------ ------- ------ ------ --- ------ ------ ------
Income (loss) from continuing
operations before income taxes (5.3) 0.5 (4.8) 0.6 (4.2) (5.7) 0.4 (5.3) (0.6) (5.9)
------ ----- ------ ------- ------ ------ --- ------ ------ ------
Income tax expense (benefit) - - - - - (1.5) 0.2 (e) (1.3) (0.2) (1.5)
Net income (loss) from ------ ----- ------ ------- ------ ------ --- ------ ------ ------
continuing operations ($5.3) $ 0.5 ($4.8) $0.6 ($4.2) ($4.2) $0.2 ($4.0) ($0.4) ($4.4)
====== ===== ====== ======= ====== ====== === ====== ====== ======
Net income (loss) per common share from
continuing operations ($0.76) ($0.68) ($0.60) ($0.60) ($0.57) ($0.63)
====== ===== ====== ======= ====== ====== === ====== ======= ======
</TABLE>
See the accompanying Notes to Unaudited Pro Forma Consolidated Financial
Statements.
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AM INTERNATIONAL, INC.
UNAUDITED PRO FORMA CONSOLIDATED BALANCE SHEET
AS OF APRIL 27, 1996
(IN MILLIONS)
<TABLE>
<CAPTION>
ASSETS
SHERIDAN
SYSTEMS AM JAPAN
PRO FORMA PRO FORMA
ADJUSTMENTS ADJUSTMENTS
RESTATED ----------------- SUB- ---------------- PRO
HISTORICAL (f) DR. CR. TOTAL DR. CR. FORMA
-------------- ---- ---- ------ ---- --- ------
<S> <C> <C> <C> <C> <C> <C> <C>
CURRENT ASSETS:
Cash and cash equivalents $5.9 $31.9 (g) $- $37.8 $10.0 (o) $0.9 (p) $46.9
Accounts receivable, net 32.0 - - 32.0 - 9.5 (p) 22.5
Inventories, net 25.9 - - 25.9 - 3.3 (p) 22.6
Other current assets 1.3 3.5 (h) - 4.8 - 0.1 (p) 4.7
Net assets of discontinued operations 67.8 - 67.8 (m) - - - -
---------- ------- ------- ------- ------- ------ -----
TOTAL CURRENT ASSETS 132.9 35.4 67.8 100.5 10.0 13.8 96.7
Property, plant and equipment 13.3 - - 13.3 - 0.1 (p) 13.2
Excess reorganization value 5.1 - - 5.1 - 5.1 (p) -
Other assets 5.5 - - 5.5 - 1.3 (p) 4.2
---------- ------- ------- ------- ------- ------ -----
TOTAL ASSETS $156.8 $35.4 $67.8 $124.4 $10.0 $20.3 $114.1
========== ======= ======= ======= ======= ====== =====
LIABILITIES AND SHAREHOLDERS' EQUITY
CURRENT LIABILTIES
Short-term borrowings and
current maturities of long-term debt $17.2 $10.1 (i) $- $7.1 $- $- $7.1
Accounts payable 24.5 8.0 (j) - 16.5 6.1 (p) - 10.4
Service contract deferred income 13.1 - - 13.1 0.7 (p) - 12.4
Payroll related expenses 10.7 - - 10.7 0.5 (p) - 10.2
Other current liabilities 24.5 - 2.1( n) 29.1 0.1 (p) - 29.0
2.5 (l)
---------- ------- ------- ------- ------- ------ -----
TOTAL CURRENT LIABILITIES 90.0 18.1 4.6 76.5 7.4 - 69.1
Long-term debt 10.9 - - 10.9 - - 10.9
Other long-term liabilities 19.5 - - 19.5 5.5 (p) - 14.0
---------- ------- ------- ------- ------- ------ -----
TOTAL LIABILITIES 120.4 18.1 4.6 106.9 12.9 - 94.0
---------- ------- ------- ------- ------- ------ -----
SHAREHOLDERS' EQUITY
Common stock 0.1 - - 0.1 - - 0.1
Capital in excess of par value 35.9 - - 35.9 - - 35.9
Less: Treasury stock - - - - - - -
Warrants 0.4 - - 0.4 - - 0.4
Accumulated earnings (deficit) 0.1 16.4 (k) - (18.8) - 2.6 (q) (16.2)
2.5 (l)
Cumulative translation adjustments (0.1) - - (0.1) - - (0.1)
---------- ------- ------- ------- ------- ------ -----
TOTAL SHAREHOLDERS' EQUITY 36.4 18.9 - 17.5 - 2.6 20.1
---------- ------- ------- ------- ------- ------ -----
TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY $156.8 $37.0 $4.6 $124.4 $12.9 $2.6 $114.1
========== ======= ======= ======= ======= ====== =====
</TABLE>
See the accompanying Notes to Unaudited Pro Forma Consolidated Financial
Statements.
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AM INTERNATIONAL, INC.
UNAUDITED PRO FORMA CAPITALIZATION
AS OF APRIL 27, 1996
(IN MILLIONS)
<TABLE>
<CAPTION>
SHERIDAN SYSTEMS AM JAPAN
PRO FORMA ADJUSTMENTS PRO FORMA ADJUSTMENTS
--------------------- -----------------------
RESTATED SUB- PRO
HISTORICAL(f) DR. CR. TOTAL DR. CR. FORMA
-------------- ----- ----- ------ ----- ----- ------
<S> <C> <C> <C> <C> <C> <C> <C>
SHORT-TERM DEBT:
Revolving Credit Facility $10.1 $10.1 (i) $- $ - $- $- $ -
Current portion of General Unsecured Claims
& Priority Tax Claims 6.1 - - 6.1 - - 6.1
Current portion of Capital Leases 1.0 - - 1.0 - - 1.0
--------- ------- ------- -------- ------- ------ -------
TOTAL SHORT-TERM DEBT AND CURRENT
MATURITIES OF LONG-TERM DEBT $17.2 $10.1 $- $7.1 $- $- $7.1
========= ======= ======= ======== ======= ====== =======
LONG-TERM DEBT
General Unsecured Claims & Priority Tax $8.6 $- $- $8.6 $- $- $8.6
Claims
Capital Leases 2.3 - - 2.3 - - 2.3
--------- ------- ------- -------- ------- ------ -------
TOTAL LONG-TERM DEBT $10.9 $- $- $10.9 $- $- $10.9
========= ======= ======= ======== ======= ====== =======
SHAREHOLDER'S EQUITY
Common Stock $0.1 $- $- $0.1 $- $- $0.1
Capital in Excess of Par Value 35.9 - - 35.9 - - 35.9
Less: Treasury Stock - - - - - - -
Warrants 0.4 - - 0.4 - - 0.4
Accumulated Earnings (Deficit) 0.1 16.4 (k) - (18.8) - 2.6 (q) (16.2)
2.5 (l)
Cumulative Translation Adjustments (0.1) - - (0.1) - - (0.1)
--------- ------- ------- -------- ------- ------ -------
TOTAL SHAREHOLDER'S EQUITY $36.4 $18.9 $- $17.5 $- $2.6 $20.1
========= ======= ======= ======== ======= ====== =======
</TABLE>
See the accompanying Notes to Unaudited Pro Forma Consolidated Financial
Statements.
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AM INTERNATIONAL, INC.
NOTES TO UNAUDITED PRO FORMA CONSOLIDATED FINANCIAL STATEMENTS
PRO FORMA CONSOLIDATED STATEMENTS OF INCOME FROM CONTINUING OPERATIONS
(a) The historical information has been restated to reflect the Company's
divested AM Multigraphics-International Operations and Sheridan Systems as
discontinued operations.
(b) The Company anticipates that it will invest at prevailing rates the net
proceeds of the proposed sale of AM Japan and the sale of Sheridan Systems
in excess of amounts applied to repay indebtedness and reduce other
liabilities. However, no interest income has been reflected relative to
the investment of such net proceeds.
(c) Interest expense has been reduced to give effect to the repayment of the
Company's revolving credit facility as a result of the proceeds from the
sale of Sheridan Systems. The Company's remaining debt is principally the
General Unsecured Claims & Priority Tax Claims.
(d) Represents the effects of the proposed sale of AM Japan, a majority owned
subsidiary.
(e) The provision for income taxes has been adjusted to reflect the tax
deductible portion of the above pro forma adjustments when appropriate.
PRO FORMA CONSOLIDATED BALANCE SHEET AND UNAUDITED PRO FORMA CAPITALIZATION
(f) The historical information has been restated to reflect Sheridan Systems
as a discontinued operation. The divestiture of the AM
Multigraphics-International Operations was reflected in the Company's
financial statements in the second quarter of fiscal 1996.
(g) Represents the net proceeds from the sale of Sheridan Systems after the
repayment of the Company's revolving credit facility and the expected
reduction of trade payables.
(h) Represents the reduction in net assets of discontinued operations from
April 27, 1996 to the measurement date (i.e., July 9, 1996 - the date of
the Asset Purchase Agreement with Heidelberger) and the anticipated income
of the discontinued operation from the measurement date to the disposal
date.
(i) Reflects the repayment of the Company's revolving credit facility.
(j) Represents the expected reduction of extended trade payables.
(k) Represents the estimated loss on the sale of Sheridan Systems.
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(l) Represents the accrual of certain payments related to change in control
agreements with certain executive officers of the Company resulting from
the sale of Sheridan Systems.
(m) Represents the reported net assets of Sheridan Systems disposed in
conjunction with the sale.
(n) Represents the accrual of certain closing costs associated with the sale
of Sheridan Systems.
(o) Represents the proceeds from the proposed sale of AM Japan, net of
related selling costs expected to be paid at closing.
(p) Represents the reduction in the reported assets and liabilities to be
disposed in connection with the anticipated sale of AM Japan.
(q) Represents the estimated gain on the proposed sale of AM Japan.
- v -
