<PAGE> 1
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): September 20, 1996.
AM INTERNATIONAL, INC.
(Exact name of registrant as specified in its charter)
Delaware 1-683 34-0054940
(State or other jurisdiction (Commission (IRS Employer
of incorporation) File Number) Identification No.)
9399 W. Higgins Rd.
Suite 900
Rosemont, Illinois 60018
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code: 847-292-0600
<PAGE> 2
Item 2. Acquisition or Disposition of Assets.
On September 20, 1996, AM International, Inc., a Delaware corporation
(the "Company"), completed the sale of the 2,148,000 shares of AM Japan Co.,
Ltd. ("AM Japan") owned by the Company. The sale was completed pursuant to the
terms of a tender offer as provided in a definitive agreement entered into on
August 21, 1996 by the Company, JAC Co., Ltd., a Japanese marketing firm, and
its President, Mr. Shigeru Watanabe (a copy of which is incorporated herein by
reference as Exhibit 2 hereto). In the tender offer, the Company sold its
shares of AM Japan at a price of yen 575 per share (or approximately $5.33 per
share at the prevailing exchange rate on August 21, 1996, the date of execution
of the definitive agreement). The terms of this sale were determined by
arms-length negotiations between the parties. A gain of approximately $2.6
million is anticipated to be recorded in the first quarter of the Company's
fiscal year ending July 31, 1997 as a result of the transaction.
The Company's historical consolidated financial statements have been
restated to reflect the sale of its Sheridan Systems division ("Sheridan
Systems") and its previously divested Multigraphics - International Operations
as discontinued operations. The unaudited pro forma financial statements
incorporated by reference herein illustrate the effect of certain adjustments to
the historical consolidated financial statements that resulted from the sale of
Sheridan Systems and the 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, Pro Forma
Financial Information and Exhibits.
(b) Pro Forma Financial Information. The following pro forma financial
information is incorporated by reference herein from pages (i) through (v)
of the Company's Current Report on Form 8-K, filed with the Securities and
Exchange Commission on September 11, 1996 (a copy of these pages are
attached hereto as Exhibit 99.1):
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
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Pro forma capitalization (unaudited) as of April 27, 1996
Notes to the pro forma financial statements (unaudited)
(c) Exhibits
The exhibits accompanying this report are listed in the accompanying
Exhibit Index.
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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.
AM INTERNATIONAL, INC.
(Registrant)
By: /s/ Thomas D. Rooney
-------------------------
Thomas D. Rooney
Vice President and
Chief Financial Officer
Date: October 1, 1996
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EXHIBIT INDEX
The following exhibits are filed herewith as noted below.
Exhibit No. Exhibit
2 Definitive Agreement dated August 21, 1996 among
AM International, Inc., JAC Co., Ltd. and Shigeru
Watanabe
99.1 Pro Forma Financial Information (pages (i)
through (v) of the Company's Current Report on
Form 8-K, filed with the Securities and Exchange
Commission on September 11, 1996)
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<PAGE> 1
EXHIBIT 2
(ENGLISH TRANSLATION)
DEFINITIVE AGREEMENT
This Agreement (this "Agreement"), made and entered into by and among
AM International Inc. (the "Seller"), JAC Co., Ltd. ("JAC"), its President and
Representative Director, Shigeru Watanabe ("Watanabe"; JAC and Watanabe being
hereinafter collectively called the "Buyers") and AM Japan Co., Ltd. ("AMJ")
with respect to the sale of the shares of AMJ owned by the Seller to the Buyers.
ARTICLE 1. AGREEMENT AND PURPOSE OF SALE OF SHARES
1. Upon the terms and conditions of this Agreement, the Seller
agrees to sell to the Buyers, and the Buyers jointly and severally agree to
purchase from the Seller, 2,148,000 shares of AMJ owned by the Seller at the
Purchase Price (as defined in sub-paragraph (3) of Article 2) on the date of
commencement of settlement of the tender offer specified in sub-paragraph (5) of
Article 2 (the "Closing Date"); provided, however, that, if, as a result of the
Tender Offer (as defined in Article 2), the number of shares tendered therein
exceeds the aggregate of the "number of shares to be purchased" and "the excess
number of shares to be purchased" as set forth in sub-paragraph (2) of Article
2, then the number of shares to be purchased by the Buyers from the Seller
hereunder on the Closing Date shall be equal to such number as is calculated in
accordance with the proration method as provided in paragraph 5 of Article 27-13
of the Securities and Exchange Law, in which case, if the number of the shares
so calculated is short of the said 2,148,000 shares, JAC shall be obligated to
purchase such shortfall at the Purchase Price as soon as practicable within 70
days after the Closing Date. The shares of AMJ to be sold by the Seller to the
Buyers hereunder on the Closing Date shall be hereinafter called the "Shares."
2. The purpose of the sale of the Shares contemplated hereby is the
transfer of the controlling interest in AMJ from the Seller to the Buyers.
ARTICLE 2. TENDER OFFER
The sale of the Shares set forth in paragraph 1 of Article 1 shall be
consummated by way of a tender offer (the "Tender Offer"). The Buyers shall
jointly conduct the Tender Offer, pursuant to the Securities and Exchange Law,
and upon the terms and conditions set forth below, and the Seller shall tender
2,148,000 shares in the Tender Offer. Expenses necessary for the Tender Offer
shall be borne by the Buyers:
(1) Tender offer agent: Yamaichi Securities Company, Limited
("Yamaichi").
The Buyers shall enter into a Tender Offer Agency Agreement with
Yamaichi with respect to the Tender Offer on the business day
immediately preceding the date of commencement of the Tender Offer.
(2) Number of shares to be purchased: 2,148,000 shares.
Excess number of shares to be purchased: 52,000 shares.
Provided that, if the number of shares tendered in the Tender Offer
exceeds the aggregate of the "number of shares to be purchased" and
the "excess number of shares to be purchased," the number of shares to
be purchased shall be equal to such number as shall be calculated in
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accordance with the proration method as provided in sub-paragraph 5 of
Article 27-13 of the Securities and Exchange Law.
(3) Purchase price: yen 575 per share (the "Purchase Price").
(4) Tender offer period: From August 28, 1996 to September 17, 1996,
provided that such tender offer period may be changed by agreement
among parties hereto. The tender offer period set forth in this
sub-paragraph shall be hereinafter called the "Tender Offer Period."
(5) Date of commencement of settlement of tender offer: September 20,
1996, provided that such commencement of settlement of tender offer
may be changed by agreement among parties hereto.
ARTICLE 3. CLOSING
The Buyers shall remit an amount obtained by multiplying the number of
the Shares by the Purchase Price (the "Aggregate Purchase Price") to the bank
account to be designated by Yamaichi not later than the day immediately
preceding the Closing Date.
On the Closing Date, Yamaichi shall (a) remit an amount equal to the
Aggregate Purchase Price received from the Buyers less securities transfer tax
to be imposed on the sale of the Shares (in the amount of 0.21% of the Aggregate
Purchase Price) to the bank account to be designated by the Seller, (b) deliver
the share certificates for the Shares received from the Seller to the Buyers and
(c) (if any part of the shares tendered by the Seller in the Tender Offer have
not been purchased by the Buyers on the Closing Date as a result of the
proration set forth in the proviso to sub-paragraph (2) of Article 2) return the
unpurchased shares to the Seller.
ARTICLE 4. REPRESENTATIONS AND COVENANTS OF SELLER
1. The Seller and AMJ jointly represent to, and covenant with, the
Buyers as follows on the date of execution of this Agreement and during the
period from such date to the Closing Date:
(1) Shares to Be Sold:
The Seller is the nominal and beneficial owner of 2,148,000 shares of
AMJ, which represent 66.30% of 3,240,000 shares being the aggregate
number of the outstanding shares of AMJ: the Seller has no other
shares of AMJ; the Shares are duly and validly issued and fully-paid;
and there is no security interest or any other encumbrance subsisting
on the Shares which may prevent the sale of the Shares by the Seller.
(2) Dealership Agreement:
The Seller has entered into a Dealership Agreement (the "Dealership
Agreement") of even date herewith with AMJ in such form and substance
reasonably satisfactory to the Seller, AMJ and the Buyers; and the
Dealership Agreement is a valid and binding agreement between the
Seller and AMJ enforceable against them in accordance with its terms.
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(3) Financial Statements and Other Materials:
(a) The audited financial statements (including the balance
sheet and the income statement) for the fiscal year ended July 31,
1995 (the "Latest Financial Statements") contained in the Annual
Securities Report of AMJ for such fiscal year have been prepared in
accordance with accounting principles generally accepted in Japan and
present fairly the financial position of AMJ as of July 31, 1995 and
the results of its operations for the fiscal year then ended.
(b) There has occurred no event since August 1,1995 which could
reasonably be expected to materially adversely affect the financial
position or the results of operations of AMJ.
(c) The contents of the materials furnished by the Seller or AMJ
to the Buyers during the course of due diligence performed in
connection with the sale of the Shares are true and correct in all
material respects and do not omit any material information.
(4) Encumbrance and Liabilities:
There is no encumbrance or any other right subsisting on any of AMJ's
assets which may hinder the exercise of the rights of the owner
thereof in any respect; AMJ has not assumed any liability (including
any contingent liability), other than those stated in the Latest
Financial Statements and those incurred by it in its ordinary course
of business since August 1, 1995. The term "contingent liability"
referred to in this sub-paragraph incudes any liability (whether or
not any legal action or other proceedings have been instituted in
connection therewith) relating to product liability, environmental
pollution or taxation arising from any action or no-action by AMJ
preceding the date of execution of this Agreement.
(5) Disputes:
AMJ is not a party to any litigation, arbitration, reconciliation or
other similar proceedings, nor is it a party to any dispute which
could reasonably be expected to result in such proceedings.
(6) Violation of Laws and Regulations:
AMJ has never committed any material offense of laws or regulations.
ARTICLE 5. REPRESENTATION AND COVENANT OF BUYERS
The Buyers jointly represent to, and covenant with, the Seller on the
date of execution of this Agreement and during the period from such date to the
Closing Date that they have sufficient funds to purchase the Shares.
ARTICLE 6. REPRESENTATIONS OF EACH PARTY
Each party hereto represents that (a) it has full power and authority
to enter into, and perform its obligations under, this Agreement, (b) it has
been duly authorized to execute and deliver, and perform its
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obligation under, this Agreement and (c) this Agreement constitutes its valid
and binding obligation enforceable against it in accordance with its terms.
ARTICLE 7. TREATMENT OF EXECUTIVES
1. The Seller shall (a) cause the Directors of AMJ currently in
office, other than Kaname Hoya, Yoshihiro Fujimaru and Seiki Ogura, to resign
from their offices as of the Closing Date and (b) cause the Statutory Auditors
of AMJ currently in office to resign from their offices upon election of the new
Statutory Auditor pursuant to paragraph 2 of this Article.
2. Subject to the completion of sale of the Shares on the Closing
Date, AMJ shall submit to its Ordinary General Meeting of Shareholders to be
held in October 1996 (the "Ordinary General Meeting of Shareholders") a proposal
for election of four Directors and a Statutory Auditor to be designated by the
Buyers, and the Seller shall exercise its voting rights thereat so that such
proposal be approved.
3. A person to be designated by the Buyers from among the Directors
of AMJ elected pursuant to the preceding paragraph shall be elected a
Representative Director of AMJ at a meeting of its Board of Directors.
ARTICLE 8. TREATMENT OF EMPLOYEES
Following the completion of the sale of the Shares, the Buyers shall
cause AMJ to continue to employ the existing employees of AMJ and to apply to
such employees generally the same labor conditions and treatment as those
currently in effect.
ARTICLE 9. DIVIDENDS AND CHANGE OF FISCAL YEAR
1. Subject to the completion of sale of the Shares on the Closing
Date, AMJ shall submit to the Ordinary General Meeting of Shareholders a
proposal for disposition of profits to the effect that no dividends shall be
payable with respect to the fiscal year ended July 31, 1996, and the Seller
shall exercise its voting rights thereat so that such proposal be approved.
2. Subject to the completion of sale of the Shares on the Closing
Date, AMJ shall submit to the Ordinary General Meeting of Shareholders a
proposal of amendment of its Articles of Incorporation to provide that the
fiscal year shall be from April 1 of each year to March 31 of the following
year, and the Seller shall exercise its voting rights thereat so that such
proposal be approved.
ARTICLE 10. TERMINATION OF AGREEMENT
1. If there occurs any material default by the Seller of any
provision of this Agreement during the period from the date of execution of this
Agreement to the last day of the Tender Offer Period, and if the Seller fails to
cure such default not later than the earlier of (a) the tenth day after receipt
by the Seller from the Buyers of the written notice of such default or (b) the
last day of the Tender Offer Period, then the Buyers may terminate this
Agreement by giving a written notice to the Seller.
2. If there occurs any material default by either Buyer of any
provision of this Agreement during the period from the date of execution of this
Agreement to the last day of the Tender Offer Period, and if such Buyer fails to
cure such default not later than the earlier of (a) the tenth day after receipt
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by such Buyer from the Seller of the written notice of such default or (b) the
last day of the Tender Offer Period, then the Seller may terminate this
Agreement by giving a written notice to the Buyers.
ARTICLE 11. FORFEIT
1. If the Seller fails to sell the Shares to the Buyers from any
reason attributable to the Seller, it shall pay JAC, for the account of JAC and
Watanabe, a forfeit in the amount of yen 250,000,000 on the Closing Date. The
Seller shall not be liable for allocation between JAC and Watanabe of the
forfeit paid by it pursuant to this paragraph.
2. If the Buyers fail to purchase the Shares from the Seller for any
reason attributable to either Buyer, JAC shall pay the Seller a forfeit in the
amount of yen 250,000,000 on the Closing Date.
3. For purposes of securing the payment of the forfeit set forth in
the preceding paragraph, JAC shall deposit an amount (the "Deposit") equal to
such forfeit with Yamaichi Trust and Banking Co., Ltd. on the date of execution
of this Agreement. If the Buyers fail to purchase the Shares from the Seller
for any reason attributable to either Buyer, the Deposit shall be applied to the
payment of the forfeit pursuant to the preceding paragraph. If the sale of the
Shares is consummated pursuant to this Agreement, the Deposit shall be applied
to the payment of the Aggregate Purchase Price set forth in Article 3. If the
sale of the Shares is not consummated pursuant to this Agreement for any reason
not attributable to either Buyer, the Deposit shall be returned in full to JAC.
4. On the date of execution of this Agreement, JAC shall deliver to
Yamaichi the certificate of the Deposit, together with a power of attorney
empowering Yamaichi to dispose of the Deposit in accordance with the preceding
paragraph as well as any other documents necessary for such disposition. If the
sale of the Shares is not consummated pursuant to this Agreement for any reason
not attributable to either Buyer, the certificate of Deposit and such other
documents delivered to Yamaichi shall be returned to JAC without delay.
ARTICLE 12. CONFIDENTIALITY AND PUBLIC ANNOUNCEMENT
1. Each party hereto shall keep confidential any and all information
obtained by it with respect to any other party hereto in connection with the
execution or performance of this Agreement and shall not disclose or divulge any
such information to any third party without the prior written consent of such
other party.
2. None of the parties hereto may make public announcement with
respect to the execution or contents of this Agreement without the prior written
consent of the other parties hereto.
3. The foregoing provisions of this Article shall not apply to any
information which is required to be disclosed or publicly announced under the
Securities and Exchange Law or the rules of the Japan Securities Dealers
Association or any applicable federal or state securities laws or regulations of
the United States of America.
ARTICLE 13. INDEMNIFICATION
Each party hereto shall indemnify the other parties hereto from and
against any and all damages and expenses suffered or incurred by them as a
result of any breach by such party of its representations or covenants hereunder
or of any violation by such party of its obligations hereunder.
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ARTICLE 14. EXPENSES
Except as otherwise provided herein, each party hereto shall bear
expenses incurred by it in connection with the negotiation and preparation of
this Agreement and the consummation of the transactions contemplated hereby.
ARTICLE 15. SURVIVAL
The respective provisions of this Agreement shall continue to be
effective during such period as may be necessary in view of the nature thereof
notwithstanding completion of the sale of the Shares contemplated hereby.
ARTICLE 16. NOTICES
All notices hereunder shall be transmitted by mail or airmail or by
facsimile (all such facsimile notices shall be immediately confirmed in writing
by mail or airmail letter), addressed as follows:
if to the Seller, to:
431 Lakeview Court
Kensington Commons 11
Mount Prospect IL 60056, U.S.A.
Facsimile: 1-847-375-1810
to the attention of General Counsel
if to the Buyers, to:
24-14, Higashi Nihonbashi 2-chome
Chuo-ku, Tokyo
Facsimile: 81-3-5820-1878
to the attention of Vice President
if to AMJ, to:
Yamato Building, 3 banchi, Kojimachi 5-chome
Chiyoda-ku, Tokyo
Facsimile: 81-3-3262-9784
to the attention of President
Either the Seller, the Buyers or AMJ may change its address stated
above by written notice given to the other parties.
ARTICLE 17. GOVERNING LAW
This Agreement shall be governed by, and construed in accordance
with, the laws of Japan.
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ARTICLE 18. JURISDICTION
Any and all legal action relating to this Agreement may be
instituted in the Tokyo District Court, to the jurisdiction of which each party
hereto agrees to submit.
ARTICLE 19. UNDETERMINED MATTERS
The parties hereto shall determine and resolve any matter not
provided in this Agreement and any doubt as to the contents of this Agreement,
upon their mutual consultation in good faith.
ARTICLE 20. LANGUAGE
This Agreement is executed in four counterparts in the Japanese
language, to each of which an English translation is attached. In the event of
a difference in meaning, the Japanese version shall prevail.
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IN WITNESS WHEREOF, this Agreement is executed by the parties hereto
as of the date set forth below.
Dated: August 21, 1996
Seller:
AM International Inc.
9399 W. Higgins Rd..
Suite 900
Rosemont, IL 60018, U.S.A.
David A. Roberts
Vice President
Buyer:
(JAC)
JAC Co., Ltd.
24-14, Higashi Nihonbashi 2-chome
Chuo-ku, Tokyo
Noboru Watanabe
Chairman and Director
(Watanabe)
Shigeru Watanabe
125 banchi, Mobara Aza Fukuuchi,
Iwashiro machi, Adachi-gun,
Fukushima-ken
AMJ:
AM Japan Co., Ltd.
Yamato Building, Kojimachi 5-chome
Chiyoda-ku, Tokyo
Kaname Hoya
President and Representative Director
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EXHIBIT 99.1
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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<PAGE> 3
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.
- iii -
<PAGE> 4
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.
- iv -
<PAGE> 5
(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 -
