<PAGE> 1
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K/A
AMENDMENT NO. 1
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934
OCTOBER 11, 1996
(Date of report)
ULTRAK, INC.
(Exact name of registrant as specified in its charter)
DELAWARE 0-9463 75-2626358
(State or other jurisdiction of (Commission (I.R.S. employer
incorporation or organization) file number) identification no.)
1220 CHAMPION CIRCLE, SUITE 100,
CARROLLTON, TEXAS 75006
(Address of principal executive offices)
(972) 280-9675
(Registrant's telephone number, including area code)
<PAGE> 2
ULTRAK, INC. AND SUBSIDIARIES
ITEM 7. FINANCIAL STATEMENTS AND EXHIBITS
(a) Financial Statements of Businesses Acquired
The audited financial statements of Groupe Bisset, S.A. ("Bisset"), acquired on
September 26, 1996, as of and for the years ended December 31, 1995 and 1994
are included as part of this Report.
(b) Pro Forma Financial Information
2
<PAGE> 3
REPORT OF INDEPENDENT CERTIFIED PUBLIC ACCOUNTANTS
Board of Directors and Stockholders of
Groupe Bisset S.A.
We have audited the accompanying balance sheets of Groupe Bisset S.A. as of
December 31, 1995 and 1994, and the related statements of income, stockholders'
equity, and cash flows for the years then ended. 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 in accordance with generally accepted auditing
standards. Those standards 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. An audit
also includes assessing the accounting principles used and significant
estimates made by management, as well as evaluating the overall financial
statement presentation. We believe that our audits provide a reasonable basis
for our opinion.
In our opinion, the financial statements referred to above present fairly, in
all material respects, the financial position of Groupe Bisset S.A. as of
December 31, 1995 and 1994, and the results of its operations and its cash
flows for the years then ended in conformity with generally accepted accounting
principles.
Grant Thornton LLP
Dallas, Texas
October 18, 1996
3
<PAGE> 4
GROUPE BISSET S.A.
BALANCE SHEETS (AMOUNTS IN THOUSANDS, EXCEPT SHARE DATA)
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
DECEMBER 31,
--------------------------------
1995 1995 1994
--------------------------------
US$ FF FF
<S> <C> <C> <C>
CURRENT ASSETS
Cash and cash equivalents 955 4,935 2,995
Trade accounts receivable, less allowance for doubtful
accounts of FF 586 and FF 641 at December 31, 1995 and
1994 respectively 3,266 16,877 13,050
Other receivables 59 307 200
Inventories 2,368 12,233 7,679
Prepaid expenses and other current assets 107 552 172
--------------------------------
Total current assets 6,755 34,904 24,096
PROPERTY AND EQUIPMENT, NET 199 1,028 602
DEFERRED INCOME TAXES 252 1,304 1,404
OTHER ASSETS 79 407 218
--------------------------------
7,285 37,643 26,320
================================
</TABLE>
4
<PAGE> 5
GROUPE BISSET S.A.
BALANCE SHEETS (AMOUNTS IN THOUSANDS, EXCEPT SHARE DATA)
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
DECEMBER 31,
--------------------------------
1995 1995 1994
--------------------------------
US$ FF FF
<S> <C> <C> <C>
CURRENT LIABILITIES
Accounts payable - trade 2,363 12,208 11,120
Accrued expenses and other current liabilities 912 4,714 4,629
Payable to a related party - - 395
Income taxes payable 642 3,316 -
--------------------------------
Total current liabilities 3,917 20,238 16,144
ACCRUED PROFIT SHARING CONTRIBUTIONS 189 977 158
POST EMPLOYMENT BENEFITS OBLIGATION 226 1,170 999
COMMITMENTS - - -
STOCKHOLDERS' EQUITY
Common stock, FF 1,000 nominal value; 5,000 shares
authorized, issued and oustanding 968 5,000 5,000
Additional contributed capital 116 600 600
Retained earnings 1,869 9,658 3,419
--------------------------------
Total stockholders' equity 2,953 15,258 9,019
--------------------------------
7,285 37,643 26,320
================================
</TABLE>
The accompanying notes are an integral part of these statements.
5
<PAGE> 6
GROUPE BISSET S.A.
STATEMENTS OF INCOME
(AMOUNTS IN THOUSANDS)
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
YEARS ENDED DECEMBER 31,
---------------------------------
1995 1995 1994
---------------------------------
US$ FF FF
<S> <C> <C> <C>
Net sales 17,793 91,940 77,866
Cost of sales 12,108 62,567 55,236
---------------------------------
Gross profit 5,685 29,373 22,630
Operating expenses :
Marketing and sales 1,521 7,860 7,344
General and administrative 2,140 11,058 11,273
---------------------------------
3,661 18,918 18,617
---------------------------------
Operating profit 2,024 10,455 4,013
Other expense (income) :
Interest expense and financial costs 236 1,219 1,034
Foreign currency gains, net (56) (290) (281)
Interest income (48) (248) (9)
Write-off of leasehold improvements - - 1,179
---------------------------------
Income before income taxes 1,892 9,774 2,090
Income taxes 685 3,535 718
---------------------------------
Net income 1,207 6,239 1,372
=================================
</TABLE>
The accompanying notes are an integral part of these statements.
6
<PAGE> 7
GROUPE BISSET S.A.
STATEMENT OF STOCKHOLDERS' EQUITY
(AMOUNTS IN THOUSANDS OF FRENCH FRANCS, EXCEPT SHARE DATA)
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
COMMON STOCK ADDITIONAL TOTAL
------------------ CONTRIBUTED RETAINED STOCKHOLDERS'
SHARES AMOUNT CAPITAL EARNINGS EQUITY
------ ------ ------- -------- ------
<S> <C> <C> <C> <C> <C>
Balance at January 1, 1994 5,000 5,000 2,047 7,047
Net income - - - 1,372 1,372
Capital contribution from a related
party, net of taxes - - 600 - 600
-------------------------------------------------------------
Balance at December 31, 1994 5,000 5,000 600 3,419 9,019
Net income - - - 6,239 6,239
-------------------------------------------------------------
Balance at December 31, 1995 5,000 5,000 600 9,658 15,258
=============================================================
Balance at December 31, 1995
(IN THOUSANDS OF US$) 968 116 1,869 2,953
=================================================
</TABLE>
The accompanying notes are an integral part of this statement.
7
<PAGE> 8
GROUPE BISSET S.A.
STATEMENTS OF CASH FLOWS
(AMOUNT IN THOUSANDS)
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
YEARS ENDED DECEMBER 31,
--------------------------------
1995 1995 1994
--------------------------------
US$ FF FF
<S> <C> <C> <C>
Cash flows from operating activities :
Net income 1,207 6,239 1,372
Adjustments to reconcile net income to net cash provided
by operating activities :
Depreciation and amortization 61 314 186
Write-off of leasehold improvements - - 1,179
Deferred income taxes 19 100 697
Changes in operating assets and liabilities :
Accounts receivable (741) (3,827) (5,180)
Other receivables (21) (107) (294)
Inventories (881) (4,554) (52)
Prepaid expenses and other current assets (74) (380) 829
Other assets (56) (289) (119)
Accounts payable 211 1,088 2,034
Payable to a related party (76) (395) 398
Accrued expenses and other current liabilities 16 85 351
Income taxes payable 642 3,316 -
Accrued profit sharing contributions 159 819 (91)
Post employment benefits 33 171 28
--------------------------------
Net cash provided by operating activities 499 2,580 1,338
Cash flows from investing activities :
Purchases of property and equipment (124) (640) (465)
Cash flows from financing activities :
Capital contribution - related party - - 900
--------------------------------
Net increase in cash and cash equivalents 375 1,940 1,773
Cash and cash equivalents at beginning of year 580 2,995 1,222
--------------------------------
Cash and cash equivalents at end of year 955 4,935 2,995
================================
Cash paid for interest 153 791 722
================================
Cash paid for income taxes - - -
================================
</TABLE>
The accompanying notes are an integral part of these statements.
8
<PAGE> 9
GROUPE BISSET S.A.
NOTES TO FINANCIAL STATEMENTS
DECEMBER 31, 1995 AND DECEMBER 31, 1994
- --------------------------------------------------------------------------------
NOTE A - THE COMPANY AND BASIS OF FINANCIAL STATEMENTS
ORGANIZATION
Groupe Bisset S.A. is a societe anonyme or limited liability
corporation under the laws of the Republic of France.
NATURE OF OPERATIONS
The Company markets and distributes closed-circuit television and
audio equipment to customers primarily located in France. The
Company's products include closed circuit video and television
equipment and audio equipment including mixers, equalizers, CD
players, speakers and public address equipment.
BASIS OF PRESENTATION
The financial information expressed in U.S. dollars is presented
solely for the convenience of the reader and is translated from
French francs (FF) at the noon buying rate in New York City for cable
transfers in French francs as certified for customs purposes by the
Federal Reserve Bank of New York on September 30, 1996 which was FF
5.1670 for each U.S. dollar.
NOTE B - SIGNIFICANT ACCOUNTING POLICIES
The financial statements have been prepared in accordance with
accounting principles generally accepted in the United States. The
preparation of financial statements requires management to make
estimates and assumptions that affect the amounts reported in the
financial statements and accompanying footnotes. Actual results
could differ from those estimates. A summary of the significant
accounting policies consistently applied in the preparation of the
accompanying financial statements follows:
REVENUE RECOGNITION
The Company records revenue upon shipment of product to its customers.
INVENTORIES
Inventories are comprised principally of goods held for resale, which
are valued at the lower of cost or market, with cost determined
principally on the average cost method.
9
<PAGE> 10
GROUPE BISSET S.A.
NOTES TO FINANCIAL STATEMENTS
DECEMBER 31, 1995 AND DECEMBER 31, 1994
- --------------------------------------------------------------------------------
PROPERTY AND EQUIPMENT AND DEPRECIATION
Property, plant and equipment are carried at cost. The provision for
depreciation is computed using the straight line and accelerated
methods over the estimated useful lives of the assets which are as
follows :
<TABLE>
<S> <C>
Leasehold improvements . . . . . . . . . . 5 to 10 years
Machinery and equipment . . . . . . . . . . . . . 5 years
Office furniture and equipment . . . . . . 2 to 5 years
</TABLE>
INCOME TAXES
Deferred income taxes are determined using the liability method,
under which deferred tax assets and liabilities are determined based
on differences between financial accounting and tax bases of assets
and liabilities and calculated applying currently legislated tax
rates in effect when the temporary differences will reverse.
STATEMENTS OF CASH FLOWS
For purposes of the statements of cash flows, the Company considers
all highly liquid debt instruments with original maturities of three
months or less to be cash equivalents.
FAIR VALUE OF FINANCIAL INSTRUMENTS
The Company's financial instruments consist of cash and cash
equivalents, trade receivables and payables. The fair value of all
instruments approximates the carrying value.
10
<PAGE> 11
GROUPE BISSET S.A.
NOTES TO FINANCIAL STATEMENTS
DECEMBER 31, 1995 AND DECEMBER 31, 1994
- --------------------------------------------------------------------------------
NOTE C - PROPERTY AND EQUIPMENT
Property and equipment consist of the follows :
<TABLE>
<CAPTION>
DECEMBER 31,
---------------------
1995 1994
------- -------
(in Thousands of FF)
<S> <C> <C>
Leasehold improvements 942 768
Machinery and equipment 423 379
Office furniture and equipment 982 1,089
------- -------
2,347 2,236
Less accumulated depreciation and amortization (1,319) (1,634)
------- -------
1,028 602
======= =======
</TABLE>
NOTE D - ACCRUED EXPENSES AND OTHER CURRENT LIABILITIES
Accrued expenses and other current liabilities consist of the
following :
<TABLE>
<CAPTION>
DECEMBER 31,
-------------------
1995 1994
----- -----
(in Thousands of FF)
<S> <C> <C>
Salaries, benefits and payroll withholdings 1,815 1,644
Payable to French taxation authority 2,200 2,200
Other 699 785
----- -----
4,714 4,629
===== =====
</TABLE>
11
<PAGE> 12
GROUPE BISSET S.A.
NOTES TO FINANCIAL STATEMENTS
DECEMBER 31, 1995 AND DECEMBER 31, 1994
- --------------------------------------------------------------------------------
NOTE E - INCOME TAXES
The provision for taxes on income consists of the following :
<TABLE>
<CAPTION>
DECEMBER 31,
--------------------
1995 1994
----- ----
(in Thousands of FF)
<S> <C> <C>
Current 3,796 794
Benefit of tax operating loss carryforwards (361) (773)
Adjustment of deferred taxes for enacted change
in tax rates (140) -
Deferred 240 697
----- ----
3,535 718
===== ====
</TABLE>
The Company's effective income tax rate differed from the French
statutory rate as follows :
<TABLE>
<CAPTION>
YEAR ENDED DECEMBER 31,
------------------------
1995 1994
---- ----
<S> <C> <C>
French statutory rate 36.7% 33.3%
Minimum corporation tax 0.5 1.1
Other, net (1.0) -
---- ----
36.2% 34.4%
==== ====
</TABLE>
The components of the deferred tax assets and liabilities are as
follows :
<TABLE>
<CAPTION>
DECEMBER 31,
-------------------
1995 1994
----- -----
(in Thousands of FF)
<S> <C> <C>
Deferred tax assets
Inventories 191 427
Trade accounts receivable 54 119
Accrued expenses and other current liabilities 1,021 503
Net operating and capital loss carryforwards 120 447
Other, net 70 28
Valuation allowance (120) (120)
----- -----
1,336 1,404
Deferred tax liabilities (32) -
----- -----
1,304 1,404
===== =====
</TABLE>
12
<PAGE> 13
GROUPE BISSET S.A.
NOTES TO FINANCIAL STATEMENTS
DECEMBER 31, 1995 AND DECEMBER 31, 1994
- --------------------------------------------------------------------------------
As of December 31, 1995, the Company has available net capital loss
carryforwards of approximately FF 798,000 which are available to
reduce future taxable income through 2005. A valuation allowance of
FF 120,000 has been provided against the deferred tax asset related
to these capital loss carryforwards.
NOTE F - PROFIT SHARING PLAN
The Company has a profit sharing plan which is consistent with French
labor law. In each year that the Company has current taxable income,
it is required to compute an amount for distribution to employees
based upon a formula required by French law. The distribution of the
profit sharing amount to individual employees is deferred for five
years. Under certain restricted conditions, including termination of
employment with the Company, employees may receive their allocated
distribution prior to completion of the five year period. As
permitted by law, the Company does not set aside specific funds to
meet profit sharing obligations.
NOTE G - EMPLOYEE RETIREMENT PLANS
The Company contributes to pension plans for employees in accordance
with French labor law. The contributions are based on the salary
levels and are contributed to the relevant state-sponsored
organizations. The Company has no further liability in connection
with these plans other than its annual contributions. As permitted
by law, the Company does not set aside specific funds to meet
retirement plan obligations.
NOTE H - POST EMPLOYMENT BENEFITS OBLIGATION
French labor law requires the payment of a lump sum retirement
indemnity to employees based upon years of service and the level of
their compensation at retirement. Benefits do not vest prior to
retirement. The Company's obligation at December 31, 1995 and 1994
was FF 1,170,000 and FF 999,000, respectively. The post employment
benefit expense was FF 171,000 and FF 28,000 for the year ending
December 31, 1995 and 1994, respectively.
13
<PAGE> 14
GROUPE BISSET S.A.
NOTES TO FINANCIAL STATEMENTS
DECEMBER 31, 1995 AND DECEMBER 31, 1994
- --------------------------------------------------------------------------------
NOTE I - MAJOR SUPPLIERS
In the year ended December 31, 1995, approximately 35% of the
Company's purchases of products were from two suppliers. In the year
ended December 31, 1994, approximately 40% of the Company's purchases
of products were from three suppliers. Although there are a limited
number of manufacturers of the Company's products, management
believes there are suppliers who could provide similar products on
comparable terms. A change in suppliers could cause a delay and a
possible loss of sales, which could affect operating results
adversely.
NOTE J - COMMITMENTS
The Company has entered into operating leases for office and
warehouse space and automobiles which expire at various dates through
2003.
Minimum future rental payments for all long-term, noncancelable
operating leases are presented below (in thousands of FF):
<TABLE>
<CAPTION>
Year ending December 31,
<S> <C>
1996 791
1997 748
1998 705
1999 606
2000 and thereafter 2,274
-----
5,124
=====
</TABLE>
Total rent expense charged to operations was FF 733,000 and FF
3,134,000 for 1995 and 1994, respectively.
The Company had outstanding letters of credit at December 31, 1995 of
approximately FF 6,500,000 with respect to inventory purchase
commitments.
14
<PAGE> 15
GROUPE BISSET S.A.
NOTES TO FINANCIAL STATEMENTS
DECEMBER 31, 1995 AND DECEMBER 31, 1994
- --------------------------------------------------------------------------------
NOTE K - RELATED PARTIES
During the year ending December 31, 1994, the Company leased office
and warehouse space from Lamoris S.A. (Lamoris), a company related
to the Company through common ownership. Rent expense to Lamoris
during 1994 totalled FF 2,209,000. In September 1994, the lease was
terminated and FF 1,179,000 of leasehold improvements written off.
Also, Lamoris forgave FF 900,000 of rent that was due at the date of
termination. This transaction has been recorded as a capital
contribution, net of related taxes of FF 300,000.
During 1994, the Company wrote off FF 414,000 due from Satelset S.A.,
an entity related to the Company through common ownership.
NOTE L - SUBSEQUENT EVENTS
In March 1996, the Company paid a dividend in the amount of FF
3,000,000.
In September 1996, Ultrak Inc. (Ultrak) acquired all of the
oustanding common stock of the Company for approximately FF 80
million payable in cash and restricted Ultrak common stock. In
addition, up to FF 13 million payable in cash and restricted Ultrak
common stock is due to the sellers if certain income levels are
obtained by the Company in the future.
15
<PAGE> 16
GROUPE BISSET S.A.
BALANCE SHEETS (UNAUDITED)
(AMOUNTS IN THOUSANDS, EXCEPT SHARE DATA)
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
SEPTEMBER 30,
---------------------
1996 1996
---------------------
US$ FF
<S> <C> <C>
CURRENT ASSETS
Cash and cash equivalents 559 2,890
Trade accounts receivable, net 2,153 11,123
Inventories 2,826 14,602
Income taxes 157 811
Prepaid expenses and other current assets 57 296
---------------------
Total current assets 5,752 29,722
PROPERTY AND EQUIPMENT - NET 166 860
DEFERRED INCOME TAXES 239 1,235
OTHER ASSETS 49 249
---------------------
6,206 32,066
=====================
</TABLE>
16
<PAGE> 17
GROUPE BISSET S.A.
BALANCE SHEETS (UNAUDITED)
(AMOUNTS IN THOUSANDS, EXCEPT SHARE DATA)
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
SEPTEMBER 30,
---------------------
1996 1996
---------------------
US$ FF
<S> <C> <C>
CURRENT LIABILITIES
Accounts payable - trade 1,820 9,403
Accrued expenses and other current liabilities 999 5,166
---------------------
Total current liabilities 2,819 14,569
ACCRUED PROFIT SHARING CONTRIBUTIONS 218 1,123
POST EMPLOYMENT BENEFITS OBLIGATION 255 1,320
COMMITMENTS - -
STOCKHOLDERS' EQUITY
Common stock, FF 1,000 nominal value; 5,000 shares
authorized, issued and outstanding 968 5,000
Additional contributed capital 116 600
Retained earnings 1,830 9,454
---------------------
TOTAL STOCKHOLDERS' EQUITY 2,914 15,054
---------------------
6,206 32,066
=====================
</TABLE>
See notes to unaudited financial statements.
17
<PAGE> 18
GROUPE BISSET S.A.
STATEMENTS OF INCOME (UNAUDITED)
(AMOUNTS IN THOUSANDS)
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
NINE MONTHS ENDED
SEPTEMBER 30,
---------------------------------
1996 1996 1995
---------------------------------
US$ FF FF
<S> <C> <C> <C>
Net sales 11,573 59,796 65,067
Cost of sales 7,832 40,468 44,186
---------------------------------
Gross profit 3,741 19,328 20,881
Operating expenses :
Marketing and sales 1,233 6,370 5,860
General and administrative 1,558 8,053 7,931
---------------------------------
2,791 14,423 13,791
---------------------------------
Operating profit 950 4,905 7,090
Other expense (income) :
Interest expense 124 641 1,038
Foreign currency gains, net (19) (97) (350)
Interest income - (2) (172)
---------------------------------
Income before income taxes 845 4,363 6,574
Income taxes 304 1,567 2,732
---------------------------------
Net income 541 2,796 3,842
=================================
</TABLE>
See notes to unaudited financial statements.
18
<PAGE> 19
GROUPE BISSET S.A.
STATEMENT OF STOCKHOLDERS' EQUITY (UNAUDITED)
(AMOUNTS IN THOUSANDS OF FRENCH FRANCS, EXCEPT SHARE DATA)
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
COMMON STOCK ADDITIONAL TOTAL
------------------ CONTRIBUTED RETAINED STOCKHOLDERS'
SHARES AMOUNT CAPITAL EARNINGS EQUITY
------ ------ ------- -------- ------
<S> <C> <C> <C> <C> <C>
Balance at January 1, 1996 5,000 5,000 600 9,658 15,258
Net income - - - 2,796 2,796
Dividends paid - - - (3,000) (3,000)
-------------------------------------------------------------
Balance at September 30, 1996 5,000 5,000 600 9,454 15,054
=============================================================
Balance at September 30, 1996
(IN THOUSAND OF US$) 968 116 1,830 2,914
=================================================
</TABLE>
See notes to unaudited financial statements.
19
<PAGE> 20
GROUPE BISSET S.A.
STATEMENTS OF CASH FLOWS (UNAUDITED)
(AMOUNTS IN THOUSANDS, EXCEPT SHARE DATA)
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
NINE MONTHS ENDED
SEPTEMBER 30,
-----------------------------
1996 1996 1995
-----------------------------
US$ FF FF
<S> <C> <C> <C>
Cash flows from operating activities :
Net income 541 2,796 3,842
Adjustments to reconcile net income to net cash provided
by operating activities :
Depreciation and amortization 65 336 195
Deferred income taxes 13 69 83
Changes in operating assets and liabilities :
Accounts receivable 1,114 5,754 1,078
Inventories (458) (2,369) (6,878)
Prepaid expenses and other current assets 109 563 402
Other assets 4 16 (230)
Accounts payable (543) (2,805) (3,570)
Accrued expenses and other current liabilities 87 452 221
Payable to related party - - (395)
Income taxes payable (799) (4,127) 2,530
Accrued profit sharing contributions 28 146 641
Post employment benefits 29 150 128
-----------------------------
Net cash provided (used in) by operating activities 190 981 (1,953)
Cash flows from investing activities :
Purchases of property and equipment (5) (26) (523)
Cash flows from financing activities :
Payment of dividends (581) (3,000) -
-----------------------------
Net decrease in cash and cash equivalents (396) (2,045) (2,476)
Cash and cash equivalents at beginning of period 955 4,935 2,995
-----------------------------
Cash and cash equivalents at end of period 559 2,890 519
=============================
Cash paid for interest 68 352 720
=============================
Cash paid for income taxes 1,102 5,695 -
=============================
</TABLE>
See notes to unaudited financial statements.
20
<PAGE> 21
GROUPE BISSET S.A.
NOTES TO UNAUDITED FINANCIAL STATEMENTS
- --------------------------------------------------------------------------------
NOTE A - BASIS OF PRESENTATION AND ACCOUNTING POLICIES
In the opinion of management, the unaudited interim financial
statements reflect all adjustments, consisting of only normal
recurring adjustments necessary for a fair presentation. Operating
results for the nine-month period ended September 30, 1996 are not
necessarily indicative of the results that may be expected for the
year ending December 31, 1996. These statements should be read in
conjunction with the audited financial statements and notes thereto
for the year ended December 31, 1995.
The unaudited interim financial statements have been prepared using
accounting principles generally accepted in the United States
consistent with those used for the December 31, 1995 audited
financial statements.
The financial information expressed in U.S. dollars is presented
solely for the convenience of the reader and is translated from
French francs at the noon-buying rate in New York City for cable
transfers in French francs as certified for customs purposes by the
Federal Reserve Bank of New York on September 30, 1996, which was FF
5.1670 for each U.S. dollar.
21
<PAGE> 22
SELECTED PRO FORMA CONDENSED CONSOLIDATED OPERATING DATA
(IN THOUSANDS, EXCEPT PER SHARE DATA)
The following unaudited selected pro forma condensed consolidated operating
data of the Company for the year ended December 31, 1995 and for the nine months
ended September 30, 1996, give effect to the acquisitions of Diamond, MAXPRO
and Bisset as if they had been consummated on January 1, 1995. The unaudited
selected pro forma condensed consolidated operating data set forth below are
qualified by reference to and should be read in conjunction with, the
historical financial statements of the Company, Diamond Electronics, Inc.,
MAXPRO Systems Pty. Ltd ("MAXPRO") and Groupe Bisset, S.A. ("Bisset")
incorporated by reference in this Prospectus. The unaudited selected pro forma
condensed consolidated operating data set forth below are not necessarily
indicative of the results of the operations that might have occurred if the
transactions had taken place on such date or of the Company's results of
operations for any future period. The financial statements of MAXPRO and Bisset
were converted from Australian Dollars and French Francs, respectively, using
the exchange rates as of September 30, 1996 (1.26 Australian Dollars per one
dollar and 5.16 French Francs per one dollar).
<TABLE>
<CAPTION>
YEAR ENDED DECEMBER 31, 1995
---------------------------------------------------------------------------
PRO FORMA PRO FORMA
COMPANY DIAMOND(1) MAXPRO BISSET ADJUSTMENTS CONSOLIDATED
-------- ---------- ------ ------- ----------- ------------
<S> <C> <C> <C> <C> <C> <C>
Net sales................................. $101,232 $6,142 $8,784 $17,818 $ (533)(3) $133,443
Cost of sales............................. 76,319 4,163 4,400 12,125 (533)(3) 96,474
-------- ------ ------ -------- -------- --------
Gross profit.............................. 24,913 1,979 4,384 5,693 -- 36,969
Marketing and sales expenses.............. 13,255 877 666 1,523 -- 16,321
General and administrative expenses....... 5,542 572 1,802 2,143 785(4) 10,844
-------- ------ ------ -------- -------- --------
Total operating expenses.......... 18,797 1,449 2,468 3,666 785 27,165
Operating profit.......................... 6,116 530 1,916 2,027 (785) 9,804
Other expense............................. 1,881 148 (36) 132 345(5) 2,470
-------- ------ ------ -------- -------- --------
Income before income taxes................ 4,235 382 1,952 1,895 (1,130) 7,334
Income taxes.............................. 1,540 152 570 685 -- 2,947
-------- ------ ------ -------- -------- --------
Net income.............................. 2,695 $ 230 $1,382 $ 1,210 $(1,130) 4,387
====== ====== ======== ========
Dividend requirements on preferred
stock................................... 117 117
------- --------
Net income allocable to common
stockholders............................ $ 2,578 $ 4,270
======== ========
Weighted average shares outstanding....... 7,148 1,535(6) 8,683
Net income per common share............... $ 0.36 $ 0.49
</TABLE>
<TABLE>
<CAPTION>
NINE MONTHS ENDED SEPTEMBER 30, 1996
------------------------------------------------------------------
PRO FORMA PRO FORMA
COMPANY MAXPRO(2) BISSET ADJUSTMENTS CONSOLIDATED
------- --------- ------- ----------- ------------
<S> <C> <C> <C> <C> <C>
Net sales......................................... $96,592 $ 2,726 $11,588 $ (523)(3) $110,383
Cost of sales..................................... 67,963 1,448 7,842 (523)(3) 76,730
------- ------- ------- --------- --------
Gross profit...................................... 28,629 1,278 3,746 -- 33,653
Marketing and sales expense....................... 13,399 428 1,234 -- 15,061
General and administrative expenses............... 6,385 1,156 1,561 580(4) 9,682
------- ------- ------- --------- --------
Total operating expenses.................. 19,784 1,584 2,795 580 24,743
Operating profit.................................. 8,845 (306) 951 (580) 8,910
Other expense..................................... 937 (106) 105 (40)(5) 896
------- ------- ------- --------- --------
Income before income taxes........................ 7,908 (200) 846 (540) 8,014
Income taxes...................................... 2,773 (38) 304 -- 3,039
------- ------- ------- --------- --------
Net income................................ 5,135 $ (162) $ 542 $ (540) 4,975
======= ======= =========
Dividend requirements on preferred stock.......... 88 88
------- --------
Net income allocable to common stockholders....... $ 5,047 $ 4,887
======= ========
Weighted average shares outstanding............... 9,131 1,224(6) 10,355
Net income per common share....................... $ 0.55 $ 0.47
</TABLE>
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<PAGE> 23
NOTES TO UNAUDITED PRO FORMA CONDENSED CONSOLIDATED OPERATING DATA:
(1) Represents the results of operations of Diamond, which was acquired
effective July 1, 1995, for the period from January 1, 1995 to June 30,
1995.
(2) Represents the results of operations of MAXPRO, which was acquired effective
July 1, 1996, for the period from January 1, 1996 to June 30, 1996.
(3) To eliminate sales and cost of sales for sales between Bisset and Diamond.
(4) To reflect amortization of goodwill over 25 years as follows:
<TABLE>
<CAPTION>
YEAR ENDED NINE MONTHS ENDED
DECEMBER 31, 1995 SEPTEMBER 30, 1996
----------------- ------------------
<S> <C> <C>
Diamond.................................. $ 12,000 --
MAXPRO................................... 317,000 238,000
Bisset................................... 456,000 342,000
--------- --------
$ 785,000 $580,000
========= ========
</TABLE>
(5) To record the effect of the 25% minority interest in MAXPRO.
(6) To reflect on a pro forma basis the increase in the common and common
equivalent shares outstanding for the following:
- 600,000 shares of Common Stock issued in connection with the acquisition
of Diamond.
- The number of shares of Common Stock that would have been issued to raise
the cash portion of the acquisition price of MAXPRO ($8.2 million) using
the Common Stock price of the May 1996 stock offering ($16.375 per share)
less estimated expenses of 7%, plus a deferred amount payable in shares
of Common Stock with a minimum value of $900,000.
- The number of shares of Common Stock that would have been issued to raise
the cash portion of the acquisition price of Bisset ($5.0 million) using
the Common Stock price of the May 1996 stock offering ($16.375 per share)
less estimated expenses of 7%, plus 289,855 shares of Common Stock issued
on September 26, 1996 and a deferred amount payable in shares of Common
Stock valued at $1,250,000.
The additional shares of Common Stock on a pro forma basis are as follows:
<TABLE>
<CAPTION>
YEAR ENDED NINE MONTHS ENDED
DECEMBER 31, 1995 SEPTEMBER 30, 1996
----------------- ------------------
<S> <C> <C>
Diamond................................ 300,000 --
MAXPRO................................. 571,138 560,229
Bisset................................. 663,609 663,609
--------- ---------
1,534,747 1,223,828
========= =========
</TABLE>
(7) The Bisset acquisition includes contingent consideration of up to $2.5
million payable one-half in cash and one-half in Common Stock if net income
exceeds certain levels for the twelve months ended June 30, 1997. If the
additional consideration is earned, the amounts paid will increase goodwill
for the transaction and will be amortized over 24 years.
23
<PAGE> 24
ULTRAK, INC. AND SUBSIDIARIES
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.
ULTRAK, INC.
(Registrant)
Date: October 21, 1996 By:/s/ TIM D. TORNO
----------------
Tim D. Torno
Principal Financial and
Accounting Officer
24
