SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
Form 8-K/A1
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 28, 1994
-----------------
Franklin Electric Co., Inc.
---------------------------
(Exact name of registrant as specified in its charter)
Indiana 0-362 35-0827455
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(State or other (Commission File Number) (IRS Employer
jurisdiction Identification
of incorporation) Number)
400 East Spring Street, Bluffton, Indiana 46714
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(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code
(219)824-2900
-------------
<PAGE>
The undersigned registrant hereby amends the following items
of its current report on Form 8-K/A dated January 27, 1995,
as set forth on the pages attached hereto:
Item 7. Financial Statements and Exhibits
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.
Franklin Electric Co., Inc.
---------------------------
(Registrant)
Date March 27, 1995 By Michael J. Sloan
-------------- ----------------
Vice President and
Chief Financial Officer
<PAGE>
FRANKLIN ELECTRIC CO., INC.
FORM 8-K/A1
INDEX
A. Other Information
1. Documents incorporated by reference
2. Independent Auditors' Consent
B. Financial Statements of Business Acquired
(Oil Dynamics, Inc.)
1. Condensed Consolidated Balance Sheet,
July 31, 1994 (Unaudited)
2. Condensed Consolidated Statement of Income,
Nine Months Ended July 31, 1994 (Unaudited)
3. Condensed Consolidated Statement of Cash Flows,
Nine Months Ended July 31, 1994 (Unaudited)
4. Condensed Consolidated Statement of Shareowners'
Equity, Nine Months Ended July 31, 1994
(Unaudited)
5. Notes to Condensed Consolidated
Financial Statements
C. Proforma Financial Information
1. Basis of Presentation
2. Proforma Consolidated Balance Sheet,
October 1, 1994 and Notes to Proforma Adjustments
3. Proforma Consolidated Statement of Income,
Year Ended January 1, 1994 and Notes to
Proforma Adjustments
4. Proforma Consolidated Statement of Income,
Nine Months Ended October 1, 1994
and Notes to Proforma Adjustments
<PAGE>
DOCUMENTS INCORPORATED BY REFERENCE
Item
----
1. Oil Dynamics, Inc.'s financial statements for the year
ended October 30, 1993 and Independent Auditors' Report
thereon included in the 1993 Annual Report of Franklin
Electric Co., Inc. on Form 10-K.
<PAGE>
INDEPENDENT AUDITORS' CONSENT
We consent to the incorporation by reference in this Current
Report of Franklin Electric Co., Inc. on Form 8-K of
Deloitte & Touche's report dated December 14, 1993 on the
financial statements of Oil Dynamics, Inc. for the year
ended October 30, 1993, appearing in the Annual Report on
Form 10-K of Franklin Electric Co., Inc. for the year ended
January 1, 1994.
We also consent to the incorporation by reference in the
registration statements of Franklin Electric Co., Inc. on
Form S-8 file No. 33-35958, 33-35960, 33-35962 and 33-38200
of Deloitte & Touche's report dated December 14, 1993 on the
financial statements of Oil Dynamics, Inc. for the year
ended October 30, 1993 appearing in the Annual Report on
Form 10-K of Franklin Electric Co., Inc. for the year ended
January 1, 1994.
Deloitte & Touche LLP
Deloitte & Touche LLP
Tulsa, Oklahoma
March 27, 1995
<PAGE>
<TABLE>
OIL DYNAMICS, INC.
CONDENSED CONSOLIDATED BALANCE SHEET
(Unaudited)
<CAPTION>
July 31, 1994
-------------
<S> <C>
ASSETS
(In thousands)
Current assets:
Cash and equivalents $473
Receivables, less allowance of $176 6,529
Inventories (Note 2) 14,029
Other current assets 804
------
Total current assets 21,835
Property, plant and equipment, net (Note 3) 12,900
------
Total assets $34,735
======
LIABILITIES AND SHAREOWNERS' EQUITY
Current liabilities:
Current maturities of long-term debt and
short-term borrowings $4,500
Accounts payable 1,831
Accrued expenses 2,269
------
Total current liabilities 8,600
Deferred income taxes 1,497
Minority interest 128
Shareowners' equity:
Common stock (Note 5):
Class A, $10 par value, 50,000 shares authorized,
issued and outstanding 500
Class B, $12 par value, nonvoting, 3,627 shares
authorized, 3,225 issued and outstanding 39
Additional paid-in capital 1,053
Retained earnings 25,129
Treasury stock, 3,061 shares of Class B
treasury stock at cost (2,211)
------
Total shareowners' equity 24,510
------
Total liabilities and shareowners' equity $34,735
======
<FN>
See Notes to Condensed Consolidated Financial Statements
</TABLE>
<PAGE>
<TABLE>
OIL DYNAMICS, INC.
CONDENSED CONSOLIDATED INCOME STATEMENT
(Unaudited)
(In thousands, except per share amounts)
<CAPTION>
Nine Months
Ended
July 31, 1994
-------------
<S> <C>
Net sales $32,001
Costs and expenses:
Cost of sales 23,923
Selling and administrative expenses 6,450
Interest expense 90
Other expense, net 90
------
Income before income taxes, and minority interest 1,448
Income taxes 256
------
Income before minority interest 1,192
Minority interest (128)
------
Net income available to common and common
share equivalents $1,064
======
Weighted average common and common share
equivalents outstanding during the period 50,023
======
Net income per share $21.27
======
<FN>
See Notes to Condensed Consolidated Financial Statements
</TABLE>
<PAGE>
<TABLE>
OIL DYNAMICS, INC.
CONSOLIDATED STATEMENT OF CASH FLOWS
(Unaudited)
(In thousands)
<CAPTION>
Nine Months
Ended
July 31, 1994
-------------
<S> <C>
Cash flows from operating activities:
Net income $1,064
Adjustments to reconcile net income to net cash
flows from operating activities:
Depreciation 1,340
Minority interest 128
Changes in operating assets and lliabilities:
Receivables 4,293
Other current assets (243)
Inventories (2,300)
Accounts payable (2,001)
Income taxes (443)
Accrued expenses (7,900)
------
Net cash flows from operating activities (6,062)
------
Cash flows from investing activities:
Additions to property, plant and equipment (1,443)
Proceeds on sale of property,
plant and equipment 11
------
Net cash flows from investing activities (1,432)
------
Cash flows from financing activities:
Proceeds from notes payable 4,500
------
Net cash flows from financing activities 4,500
------
Net decrease in cash and equivalents (2,994)
Cash and equivalents at beginning of period 3,467
------
Cash and equivalents at end of period $473
====
<FN>
See Notes to Condensed Consolidated Financial Statements
</TABLE>
<PAGE>
<TABLE>
OIL DYNAMICS, INC.
CONDENSED CONSOLIDATED STATEMENT OF SHAREOWNERS' EQUITY
(Unaudited)
(In thousands)
<CAPTION>
Additional
Common Stock Paid-in Retained Treasury
Class A Class B Capital Earnings Stock Total
------- ------- ------- -------- ----- -----
<S> <C> <C> <C> <C> <C> <C>
Balance as of
October 30, 1993 $500 $39 $1,053 $24,065 ($2,211) $23,446
---- --- ------ ------- ------ -------
Income attributable to
common shares for the
nine months ended
July 31, 1994 - - - 1,064 - 1,064
---- --- ------ ------- ------- -------
Balance as of
July 31, 1994 $500 $39 $1,053 $25,129 ($2,211) $24,510
==== === ====== ======= ======= =======
<FN>
See Notes to Condensed Consolidated Financial Statements
</TABLE>
<PAGE>
Oil Dynamics, Inc.
Notes to Condensed Consolidated Financial Statements
Nine Months Ended July 31, 1994
Note 1: Basis of Presentation
------------------------------
The accompanying unaudited condensed consolidated financial
statements have been prepared in accordance with generally
accepted accounting principles for interim financial
information. Accordingly, they do not include all of the
information and footnotes required by generally accepted
accounting principles for complete financial statements. In
the opinion of management, all adjustments (which are of a
normal and recurring nature) considered necessary for a fair
presentation have been included. Operating results for the
nine month period ended July 31, 1994 are not necessarily
indicative of the results that may be expected for the
fiscal year ended October 31, 1994. For further
information, refer to the Oil Dynamics, Inc. consolidated
financial statements for the year ended October 30, 1993,
included in the Franklin Electric Co., Inc. 1993 Annual
Report on Form 10-K filed with the Securities and Exchange
Commission on March 24, 1994.
<TABLE>
Note 2: Inventories
--------------------
Inventories consist of the following:
(In thousands)
<CAPTION>
July 31, 1994
--------------
<S> <C>
Raw Materials $9,483
Work In Process 545
Finished Goods 5,286
LIFO Reserve (1,285)
------
Total Inventory $14,029
=======
</TABLE>
<TABLE>
Note 3: Property, Plant and Equipment
--------------------------------------
Property, Plant and Equipment, net, consists of the
following:
(In thousands)
<CAPTION>
July 31,1994
------------
<S> <C>
Land and Buildings $7,772
Machinery and Equipment 19,242
------
27,014
Allowance for Depreciation (14,114)
------
$12,900
=======
</TABLE>
Note 4: Tax Rates
-------------------
The effective tax rate on income before income taxes varies
from the United States statutory rate of 35 percent
principally due to lower foreign tax rates relative to the
U.S. statutory rate.
Note 5: Subsequent Events
--------------------------
On November 28, 1994, control of Oil Dynamics, Inc. was
transferred to Franklin Electric Co., Inc. The change in
control resulted from the election by Goulds Pumps, Inc. to
receive a cash dividend in the amount of $11.7 million in
lieu of a stock dividend declared by Oil Dynamics, Inc.
Franklin Electric Co., Inc. elected to take the stock
dividend which increased its ownership interest in Oil
Dynamics, Inc. to approximately 97 percent. Formerly, Oil
Dynamics, Inc. was controlled equally by Franklin Electric
Co., Inc. and Goulds Pumps, Inc. In connection with the
issuance of the additional shares, the Company changed the
par value of the Class A Common Stock from $10 per share to
$.10 per share.
The Company obtained a new $5.4 million unsecured line of
credit and a $9.8 million term loan with a bank. Using the
proceeds, the existing line of credit was repaid and the
remainder was used to pay a cash dividend to Goulds Pumps,
Inc. The new line of credit will mature November 27, 1995
and requires interest payable monthly based on the LIBOR
plus 1.5 percent. A commitment fee of 0.25 percent will be
payable quarterly on the unused portion of the commitment.
The term loan is due November 27, 1995 and requires monthly
interest payments based on the LIBOR plus 0.75 percent.
<PAGE>
FRANKLIN ELECTRIC CO., INC.
PROFORMA CONSOLIDATED FINANCIAL STATEMENTS
The proforma statements of consolidated income for the
period ended October 31, 1994 and for the year ended January
1, 1994 give effect to the transfer of control of Oil
Dynamics, Inc. to Franklin Electric Co., Inc. as if such
transaction had occurred at January 3, 1993. The proforma
balance sheet as of October 1, 1994 gives effect to the
transfer of control of Oil Dynamics, Inc. to Franklin
Electric Co., Inc. as if such transaction had occurred on
October 1, 1994. The transaction was accounted for as a
purchase in accordance with the provisions of Accounting
Principles Board Opinion No. 16.
The historical consolidated financial statements included in
the proforma consolidated financial statements are as of the
date and for the periods presented. The historical
financial data of Oil Dynamics, Inc. included in the
proforma statement of consolidated income for the year ended
January 1, 1994 was derived from the financial statements
for the year ended October 30, 1993. The historical
financial data of Oil Dynamics, Inc. as of and for the nine
month period ended October 1, 1994 was derived from
unaudited financial statements as of and for the nine months
ended July 31, 1994.
The proforma statements of consolidated income for the year
ended January 1, 1994 and the nine month period ended
October 1, 1994 and the proforma consolidated balance sheet
as of October 1, 1994 are not necessarily indicative of the
results of operations or financial position that actually
would have been achieved had the transaction described
herein been consummated as of the dates indicated, or that
may be achieved in the future.
<PAGE>
<TABLE>
FRANKLIN ELECTRIC CO., INC.
PROFORMA CONSOLIDATED BALANCE SHEET
OCTOBER 1, 1994
(Unaudited)
(In thousands)
<CAPTION>
Historical Historical
Franklin Oil
Electric Dynamics, Proforma
Co., Inc. Inc. Adjustments Proforma
-------- -------- ----------- --------
<S> <C> <C> <C> <C>
ASSETS
Current assets:
Cash and equivalents $35,957 $473 $ - <F1><F2><F3> $36,430
Receivables, less allowances of $1,664 12,111 6,529 - 18,640
Inventories 26,463 14,029 - 40,492
Other current assets (including deferred
income taxes of $7,029) 7,291 804 - 8,095
------ ------ ------ -------
Total current assets 81,822 21,835 - 103,657
Property, plant and equipment 26,005 12,900 - 38,905
Investment in affiliate 12,174 - (12,174) <F4> -
Other assets and deferred charges 3,766 - - 3,766
------- ------ ------ -------
Total assets $123,767 $34,735 ($12,174) $146,328
======== ======= ======= ========
LIABILITIES AND SHAREOWNERS' EQUITY
Current liabilities:
Current maturities of long-term debt and
short-term borrowings $ - $4,500 $12,090 <F1><F2> $16,590
Accounts payable 9,433 1,831 - 11,264
Accrued expenses 24,395 2,269 - 26,664
Income taxes 1,409 - - 1,409
------ ------ ------ ------
Total current liabilities 35,237 8,600 12,090 55,927
Long-term debt 20,000 - - 20,000
Other long-term liabilities 6,821 - - 6,821
Deferred income taxes 1,774 1,497 - 3,271
Minority interest - 128 246 <F4> 374
Shareowners' equity:
Common stock <F3><F4>
Class A 620 500 (500) 620
Class B - 39 (39) -
Additional capital 4,468 1,053 (1,053) 4,468
Retained earnings 59,478 25,129 (25,129) 59,478
Stock subscriptions (2,011) - - (2,011)
Treasury stock - (2,211) 2,211 -
Cumulative translation adjustment (20) - - (20)
Loan to ESOP trust (2,600) - - (2,600)
------ ------ ------ ------
Total shareowners' equity 59,935 24,510 (24,510) 59,935
------ ------ ------ -------
Total liabilities and shareowners' equity $123,767 $34,735 ($12,174) $146,328
======== ======= ======= ========
<FN>
See Notes to Condensed Consolidated Financial Statements and Notes to Proforma Adjustments
<PAGE>
FRANKLIN ELECTRIC CO., INC.
PROFORMA CONSOLIDATED BALANCE SHEET
OCTOBER 1, 1994
NOTES TO PROFORMA ADJUSTMENTS
------------------------------------------------------------
<F1> Proceeds of $16.6 million from short-term borrowings.
Total borrowings of $16.6 million were required given
existing borrowings and cash balances as of October 1, 1994.
The borrowings are classified as short term as it is assumed
that the borrowings will be repaid within one year.
<F2> Repayment of $4.5 million of existing short-term
borrowings.
<F3> Payment of $12.1 million cash dividend to Goulds
Pumps, Inc. using the net proceeds of short-term borrowings.
A stock dividend was also paid to Franklin Electric Co.,
Inc. which had the effect of increasing its ownership of Oil
Dynamics, Inc. common stock from 50 percent to 97 percent.
<F4> Elimination of Franklin Electric Co., Inc.'s
investment in Oil Dynamics, Inc.
</FN>
</TABLE>
<PAGE>
<TABLE>
FRANKLIN ELECTRIC CO., INC.
PROFORMA CONSOLIDATED STATEMENT OF INCOME
YEAR ENDED JANUARY 1, 1994
(In thousands)
<CAPTION>
Historical Historical
Franklin Oil
Electric Dynamics, Proforma
Co., Inc. Inc. Adjustments Proforma
-------- ------- ----------- --------
<S> <C> <C> <C> <C>
Net sales $206,406 $71,672 $ - $278,078
Costs and expenses:
Cost of sales 153,275 46,264 - 199,539
Selling and administrative expenses 31,029 11,707 - 42,736
Interest expense 2,949 142 900 <F1> 3,991
Other expense, net 612 560 - 1,172
------- ------ ------ -------
187,865 58,673 900 247,438
Equity in earnings of affiliate 4,351 - (4,351)<F2> -
------ ------ ------ ------
Income before income taxes, change in
accounting principle and minority interest 22,892 12,999 (5,251) 30,640
Income taxes 6,789 4,229 625 <F3> 11,643
------ ------ ------ ------
Income before change in accounting
principle and minority interest 16,103 8,770 (5,876) 18,997
Cumulative effect of change in accounting
principle-SFAS No. 109, "Accounting
for Income Taxes" 993 - - 993
------ ------ ------ ------
Income before minority interest 17,096 8,770 (5,876) 19,990
Minority interest - - 263 <F4> 263
------ ------ ------ ------
Net income 17,096 8,770 (6,139) 19,727
Dividends on preferred stock 611 - - 611
------ ------ ------ ------
Net income available to common
and common share equivalents $16,485 $8,770 ($6,139) $19,116
======= ====== ====== =======
Weighted average common and common share
equivalents outstanding during the period 6,552 50 (50)<F5> 6,552
===== == == =====
Net income per share before change in
accounting principle $2.37 $175.31 $2.77
===== ======= =====
Change in accounting principle $0.15 $ - $0.15
===== ======= =====
Net income per share $2.52 $175.31 <F6> $2.92
===== ======= =====
<FN>
See Notes to Condensed Consolidated Financial Statements and Notes to Proforma Adjustments
<PAGE>
FRANKLIN ELECTRIC CO., INC.
PROFORMA CONSOLIDATED STATEMENT OF INCOME
YEAR ENDED JANUARY 1, 1994
NOTES TO PROFORMA ADJUSTMENTS
------------------------------------------------------------
<F1> Interest expense at 8 percent related to Oil Dynamics,
Inc.'s borrowing of $11.4 million. Total borrowings of
$11.4 million were required given existing borrowings and
cash balances as of the beginning of the year ended January
1, 1994.
<F2> Elimination of Franklin Electric, Co., Inc.'s equity
in the earnings of Oil Dynamics, Inc.
<F3> Tax effect of proforma adjustments number 1 and 2 and
the effect of other items resulting from the inclusion of
Oil Dynamics, Inc. in the consolidated income tax return of
Franklin Electric Co., Inc.
<F4> Recognition of the minority interest in Oil Dynamics,
Inc.'s net income.
<F5> Elimination of Oil Dynamics, Inc.'s weighted average
common shares outstanding.
<F6> Net income per share is computed on the basis of
weighted average shares outstanding taking into account the
effects of dilutive common stock equivalents. The
difference between primary and fully diluted net income per
share is not material.
</FN>
</TABLE>
<PAGE>
<TABLE>
FRANKLIN ELECTRIC CO., INC.
PROFORMA CONSOLIDATED STATEMENT OF INCOME
NINE-MONTH PERIOD ENDED OCTOBER 1, 1994
(In thousands)
<CAPTION>
Historical Historical
Franklin Oil
Electric Dynamics, Proforma
Co., Inc. Inc. Adjustments Proforma
-------- -------- -------- --------
<S> <C> <C> <C> <C>
Net sales $175,135 $32,001 $ - $207,136
Costs and expenses:
Cost of sales 130,277 23,923 - 154,200
Selling and administrative expenses 23,951 6,450 - 30,401
Interest expense 1,545 - - <F1> 1,545
Other expense (income), net (1,582) 308 - (1,274)
------- ------ ------ -------
154,191 30,681 - 184,872
Equity in earnings of affiliate 532 - (532)<F2> -
------- ------ ------ -------
Income before income taxes
and minority interest 21,476 1,320 (532) 22,264
Income taxes 8,016 256 188 <F3> 8,460
------ ------ ------ -------
Income before minority interest 13,460 1,064 (720) 13,804
Minority interest - - 32 <F4> 32
------ ------ ------ -------
Net income 13,460 1,064 (752) 13,772
Dividends on preferred stock 153 - - 153
------ ------ ------ ------
Net income available to common
and common share equivalents $13,307 $1,064 ($752) $13,619
======= ====== ====== =======
Weighted average common and common share
equivalents outstanding during the period 6,523 50 (50)<F5> 6,523
===== ====== ====== ======
Net income per share $2.04 $21.28 <F6> $2.09
===== ====== =====
<FN>
See Notes to Condensed Consolidated Financial Statements and Notes to Proforma Adjustments
<PAGE>
FRANKLIN ELECTRIC CO., INC.
PROFORMA CONSOLIDATED STATEMENT OF INCOME
NINE MONTH PERIOD ENDED OCTOBER 1, 1994
NOTES TO PROFORMA ADJUSTMENTS
------------------------------------------------------------
<F1> No interest expense has been reflected in the proforma
consolidated statement of income as the note and line of
credit was paid off as of January 1, 1994 (see Note 1 in
Notes to Proforma Adjustments to the Proforma Consolidated
Balance Sheet as of October 1, 1994).
<F2> Elimination of Franklin Electric, Co., Inc.'s equity
in the earnings of Oil Dynamics, Inc.
<F3> Tax effect of proforma adjustment number 1 and the
effects of other items resulting from the inclusion of Oil
Dynamics, Inc. in the consolidated income tax return of
Franklin Electric Co., Inc.
<F4> Recognition of the minority interest in Oil Dynamics,
Inc.'s net income.
<F5> Elimination of Oil Dynamics, Inc.'s weighted average
common shares outstanding.
<F6> Net income per share is computed on the basis of
weighted average shares outstanding taking into account the
effects of dilutive common stock equivalents. The
difference between primary and fully diluted net income per
share is not material.
</FN>
</TABLE>
