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UNITED STATES
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): NOVEMBER 12, 1997
EVI, INC.
(Exact name of registrant as specified in charter)
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<S> <C> <C>
DELAWARE 1-13086 04-2515019
(State of Incorporation) (Commission File No.) (I.R.S. Employer Identification No.)
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<S> <C>
5 POST OAK PARK, SUITE 1760,
HOUSTON, TEXAS 77027-3415
(Address of Principal Executive Offices) (Zip Code)
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REGISTRANT'S TELEPHONE NUMBER, INCLUDING AREA CODE: (713) 297-8400
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ITEM 5. OTHER EVENTS.
On November 10, 1997, pursuant to the provisions of the Placement
Agreement dated October 28, 1997, by and among EVI, Inc. (the "Company"),
Morgan Stanley & Co. Incorporated, Donaldson, Lufkin & Jenrette Securities
Corporation, Credit Suisse First Boston Corporation, Lehman Brothers Inc.,
Prudential Securities Incorporated and Schroder & Co. Inc. (collectively, the
"Initial Purchasers"), the Company sold to the Initial Purchasers in a private
placement an additional principal amount of $52.5 million of the Company's 5%
Convertible Subordinated Preferred Equivalent Debentures due 2027 (the
"Debentures") solely to cover over-allotments. The sale of the $52.5 million
principal amount of Debentures to cover over-allotments was in addition to the
$350 million aggregate principal amount of Debentures sold by the Company to
the Initial Purchasers on November 3, 1997. The Debentures are more fully
described in the Company's Form 8-K filed on November 5, 1997.
PRO FORMA CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
The following tables set forth certain summary pro forma condensed
consolidated financial data of the Company giving effect to the issuance and
sale of the Debentures. The unaudited Pro Forma Condensed Consolidated
Statements of Income give effect to (i) the acquisition by the Company of
Tubular Corporation of America ("TCA") on August 5, 1996, (ii) the acquisition
by the Company of GulfMark International, Inc. ("GulfMark") and its assets as of
the date of acquisition on May 1, 1997 (the "GulfMark Retained Assets"), and
(iii) the issuance and sale of the Debentures as if these transactions had
occurred on January 1, 1996. The unaudited Pro Forma Condensed Consolidated
Balance Sheet gives effect to the issuance and sale of the Debentures as if the
transaction had occurred on June 30, 1997. The following summary pro forma
condensed consolidated financial data and related notes thereto have been
restated to reflect the Company's May 1997 two-for-one stock split. The pro
forma information set forth below is not necessarily indicative of the results
that actually would have been achieved had such transactions been consummated
as of the dates reflected or that may be achieved in the future. The pro forma
financial data does not give effect to the Company's proposed acquisitions of
the Trico Industries, Inc. ("Trico"), BMW Monarch (Lloydminster) Ltd. ("BMW
Monarch") and BMW Pump, Inc. ("BMW Pump") or various smaller acquisitions
effected by the Company during 1997. This information should be read in
conjunction with the Company's Management's Discussion and Analysis of
Financial Condition and Results of Operations contained in its Annual Report on
Form 10-K for the year ended December 31, 1996, as amended, and Quarterly
Report on Form 10-Q for the quarter ended June 30, 1997, and the Company's,
TCA's, and GulfMark Retained Assets' consolidated financial statements and
related notes thereto previously filed.
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PRO FORMA CONDENSED CONSOLIDATED BALANCE SHEET
AS OF JUNE 30, 1997
(IN THOUSANDS)
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<CAPTION>
OFFERING
HISTORICAL ADJUSTMENTS PRO FORMA
---------- ----------- ----------
<S> <C> <C> <C>
ASSETS
Current assets:
Cash and cash equivalents........................... $ 54,973 $390,600(a) $ 445,573
Accounts receivable, net............................ 161,138 -- 161,138
Inventories......................................... 228,092 -- 228,092
Prepaid expenses and other.......................... 34,425 397(b) 34,822
--------- -------- ----------
Total current assets........................ 478,628 390,997 869,625
--------- -------- ----------
Property, plant and equipment, net.................... 230,761 -- 230,761
Goodwill, net......................................... 154,179 -- 154,179
Other assets.......................................... 32,777 11,503(b) 44,280
--------- -------- ----------
$ 896,345 $402,500 $1,298,845
========= ======== ==========
LIABILITIES AND STOCKHOLDERS' INVESTMENT
Current liabilities:
Short-term borrowings, primarily under revolving
lines of credit.................................. $ 7,400 $ -- $ 7,400
Current maturities of long-term debt................ 7,774 -- 7,774
Accounts payable.................................... 117,702 -- 117,702
Other accrued liabilities........................... 86,774 -- 86,774
--------- -------- ----------
Total current liabilities................... 219,650 -- 219,650
--------- -------- ----------
Long-term debt........................................ 138,468 -- 138,468
Deferred income taxes, net............................ 27,343 -- 27,343
Other liabilities..................................... 25,044 -- 25,044
5% Convertible Subordinated Preferred Equivalent
Debentures.......................................... -- 402,500(a) 402,500
Stockholders' investment:
Common stock........................................ 50,614 -- 50,614
Capital in excess of par............................ 404,254 -- 404,254
Retained earnings................................... 191,740 -- 191,740
Foreign currency translation adjustment............. (8,828) -- (8,828)
Treasury stock, at cost............................. (151,940) -- (151,940)
--------- -------- ----------
Total stockholders' investment.............. 485,840 -- 485,840
--------- -------- ----------
$ 896,345 $402,500 $1,298,845
========= ======== ==========
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PRO FORMA CONDENSED CONSOLIDATED STATEMENT OF INCOME
FOR THE TWELVE MONTHS ENDED DECEMBER 31, 1996
(IN THOUSANDS, EXCEPT PER SHARE AMOUNTS)
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<CAPTION>
TCA HISTORICAL PRO FORMA ADJUSTMENTS
EVI FOR THE GULFMARK ------------------------------ EVI
HISTORICAL SIX MONTHS ENDED RETAINED ASSETS GULFMARK THE PRO
CONSOLIDATED JUNE 30, 1996(C) HISTORICAL TCA MERGER OFFERING FORMA
------------ ---------------- --------------- ------ -------- -------- --------
<S> <C> <C> <C> <C> <C> <C> <C>
Revenues........................ $478,020 $28,260 $6,994 $ -- $ -- $ -- $513,274
-------- ------- ------ ------ ------- -------- --------
Costs and expenses:
Cost of sales................. 373,509 24,381 3,922 579(d) -- -- 402,391
Selling, general and
administrative attributable
to segments................. 51,885 1,006 2,068 197(e) -- -- 55,156
Corporate, general and
administrative.............. 6,339 -- -- -- -- -- 6,339
-------- ------- ------ ------ ------- -------- --------
431,733 25,387 5,990 776 -- -- 463,886
-------- ------- ------ ------ ------- -------- --------
Operating income................ 46,287 2,873 1,004 (776) -- -- 49,388
-------- ------- ------ ------ ------- -------- --------
Other income (expense):
Interest expense.............. (16,454) (602) -- 602(f) -- (20,520)(g) (36,974)
Interest income............... 2,163 -- -- -- -- -- 2,163
Other income (expense), net... (450) (742) 6,264 875(h) (6,264)(i) -- (317)
-------- ------- ------ ------ ------- -------- --------
(14,741) (1,344) 6,264 1,477 (6,264) (20,520) (35,128)
-------- ------- ------ ------ ------- -------- --------
Income (loss) before income
taxes......................... 31,546 1,529 7,268 701 (6,264) (20,520) 14,260
Provision (benefit) for income
taxes......................... 7,041 34 2,472 245(j) (2,192)(j) (7,182)(j) 418
-------- ------- ------ ------ ------- -------- --------
Income (loss) from continuing
operations.................... $ 24,505 $ 1,495 $4,796 $ 456 $(4,072) $(13,338) $ 13,842
======== ======= ====== ====== ======= ======== ========
Earnings per share from
continuing operations......... $ 0.60 $ 0.34(k)
Weighted average shares
outstanding................... 40,706 41,298(k)
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PRO FORMA CONDENSED CONSOLIDATED STATEMENT OF INCOME
FOR THE SIX MONTHS ENDED JUNE 30, 1997
(IN THOUSANDS, EXCEPT PER SHARE AMOUNTS)
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<CAPTION>
GULFMARK
RETAINED ASSETS
HISTORICAL FOR THE
EVI THREE MONTHS
HISTORICAL ENDED OFFERING EVI
CONSOLIDATED MARCH 31, 1997(l) ADJUSTMENTS PRO FORMA
------------ ------------------ ----------- ---------
<S> <C> <C> <C> <C>
Revenues.................................... $376,108 $ 818 $ -- $376,926
-------- ------- -------- --------
Costs and expenses:
Cost of sales............................. 281,318 678 -- 281,996
Selling, general and administrative
attributable to segments............... 39,072 688 -- 39,760
Corporate, general and administrative..... 3,509 -- -- 3,509
-------- ------- -------- --------
323,899 1,366 -- 325,265
-------- ------- -------- --------
Operating income............................ 52,209 (548) -- 51,661
-------- ------- -------- --------
Other income (expense):
Interest expense.......................... (8,166) -- (10,260)(g) (18,426)
Interest income........................... 3,408 -- -- 3,408
Gain on sale of marketable securities..... 3,352 -- -- 3,352
Other income (expense), net............... 763 -- -- 763
-------- ------- -------- --------
(643) -- (10,260) (10,903)
-------- ------- -------- --------
Income (loss) before income taxes........... 51,566 (548) (10,260) 40,758
Provision (benefit) for income taxes........ 18,159 100 (3,591)(j) 14,668
-------- ------- -------- --------
Income (loss) from continuing operations.... $ 33,407 $(648) $ (6,669) $ 26,090
======== ======= ======== ========
Earnings per share from continuing
operations................................ $ 0.73 $ 0.57(k)
Weighted average shares outstanding......... 45,711 45,711(k)
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NOTES TO PRO FORMA CONDENSED
CONSOLIDATED FINANCIAL STATEMENTS
GENERAL
The following notes set forth the assumptions used in preparing the
unaudited pro forma financial statements. The pro forma adjustments are based on
estimates made by the Company's management using information currently
available.
PRO FORMA ADJUSTMENTS
The adjustments to the accompanying unaudited pro forma condensed
consolidated balance sheet are described below:
(a) To reflect the sale of the $402.5 million principal amount of the
Debentures and the payment of approximately $11.9 million of related debt
issuance costs.
(b) To capitalize approximately $11.9 million of debt issuance costs
related to the Debentures.
The adjustments to the accompanying unaudited pro forma condensed
consolidated statements of income are described below:
(c) Reflects the results of TCA, which was acquired on August 5, 1996,
from January 1, 1996, through June 30, 1996. Actual results of TCA are
included in the Company's historical results from August 5, 1996.
(d) Reflects an increase in depreciation expense associated with the
assets of TCA, which was acquired on August 5, 1996 as a result of the
$11.6 million fair value increase of property, plant, and equipment through
the purchase price allocation. Such increase in property, plant, and
equipment is being depreciated over an average life of ten years.
(e) To record amortization expense relating to the estimated $15.8
million of excess of cost over fair value of tangible assets acquired in
connection with the acquisition of TCA. Such excess of cost over fair value
of net tangible assets acquired is being amortized over 40 years.
(f) To reduce TCA's interest expense to reflect the Company's
retirement of TCA's $7.7 million debt outstanding at the date of
acquisition.
(g) To adjust interest expense for the Debentures at the rate of 5%
per annum and to record amortization expense of related debt issuance costs
over the life of the Debentures.
(h) To eliminate certain expenses incurred by TCA relating to the
Company's acquisition of TCA. These expenses relate to amounts paid to an
investment banking firm which represented TCA in the Company's acquisition
of TCA.
(i) To eliminate the $6,264,000 gain recorded in the GulfMark Retained
Assets with respect to the sale by GulfMark of 600,000 shares of the
Company's Common Stock in July 1996. The net proceeds from this sale
were not received by the Company nor included in the GulfMark Retained
Assets at the time of the acquisition of GulfMark by the Company.
(j) To record the income tax provision (benefit) related to the effect
of the pro forma adjustments at the statutory rate.
(k) Pro forma weighted average shares outstanding reflect the average
number of common shares outstanding for the period. The effect of the sale
of the Debentures on fully-diluted earnings per share is anti-dilutive. At
December 31, 1996, historical and pro forma shares of Common Stock
outstanding, restated for the effect of the May 1997 two-for-one stock
split, are 45,657,842. At June 30, 1997, historical and pro forma shares of
Common Stock outstanding are 45,830,540.
(l) Reflects the results of the GulfMark Retained Assets, which were
acquired on May 1, 1997, from January 1, 1997, through March 31, 1997.
Actual results of the GulfMark Retained Assets are included in the
Company's historical results from May 1, 1997.
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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.
EVI, INC.
Dated: November 12, 1997 /s/ Frances R. Powell
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Frances R. Powell
Vice President, Accounting
and Controller
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