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 ACT OF 1934
Date of Report: July 22, 1997
DEVON GROUP, INC.
(Exact name of registrant as specified in its charter)
Delaware 2-14850 03-0212800
(State of Incorporation) (Commission File (I.R.S. Employer
Number) Identification No.)
281 Tresser Boulevard, Suite 501, Stamford, Connecticut 06901
(Address of Principal Executive Offices)
Registrant's telephone number, including area code (203) 964-1444
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Item 2. Acquisition or Disposition of Assets
On July 22, 1997, Devon Group, Inc. announced that it had reached
agreement for the sale of the capital stock of its printing
subsidiary, Graftek Press, Inc. ("Graftek"), to BGJ Enterprises,
Inc., an affiliate of Brown Printing Company, for approximately
$40,000,000 in cash (the "transaction"). The transaction should be
completed after the applicable Hart-Scott-Rodino waiting period has
expired and other customary conditions have been satisfied. It is
currently estimated that the transaction will result in a gain (net
of applicable income taxes) for financial statement purposes of
approximately $6,700,000 and generate approximately $34,700,000 in
after tax cash.
Item 7. Financial Statement and Exhibits
The following pro forma financial information required pursuant to
Article 11 of Regulation S-X is filed as part of this report:
Item Page
Devon Group, Inc. Pro Forma Condensed Consolidated
Financial Statements (Unaudited)
Pro Forma Condensed Consolidated Balance Sheet as of
March 31, 1997 4
Pro Forma Condensed Consolidated Statement of Income 5
for the Year Ended March 31, 1997
Notes to Pro Forma Condensed Consolidated Financial 6
Statements
The unaudited pro forma condensed consolidated balance sheet as of
March 31, 1997 and the unaudited pro forma condensed consolidated
statement of income for the year ended March 31, 1997 give effect
to the sale of Graftek Press, Inc. as if the transaction had
occurred on April 1, 1996. The pro forma information is based on
the historical financial statements of Devon Group, Inc. after
giving effect to the transaction using the assumptions and
adjustments in the accompanying notes to pro forma condensed
consolidated financial statements. The pro forma financial
statements have been prepared on the basis of the approximate
$40,000,000 sales price. These pro forma financial statements may
not be indicative of the results that actually would have occurred
if the transaction had been in effect on the date indicated or
which may be obtained in the future. The pro forma financial
statements should be read in conjunction with the audited financial
statements and notes of Devon Group, Inc.
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SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of
1934, the registrant has duly caused this report to be signed on
its behalf by the undersigned thereunto duly authorized.
DEVON GROUP, INC.
Date: August 6, 1997 s/Bruce K. Koch
Bruce K. Koch
Executive Vice President
Operations and Finance
and Chief Financial Officer
(Principal Financial Officer)
s/Robert H. Donovan
Robert H. Donovan
Senior Vice President, Finance
and Treasurer
(Principal Accounting Officer)
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<TABLE>
DEVON GROUP, INC.
Pro Forma Condensed Consolidated Balance Sheet
As of March 31, 1997
(unaudited)
(in thousands, except share and per share data)
<CAPTION>
Pro Forma
Historical Adjustments Pro Forma
Assets (see note B)
<S> <C> <C> <C>
Current Assets:
Cash and cash equivalents $ 29,443 $ 34,158(A) $ 63,601
Receivables, less allowance
for doubtful accounts of $2,206 in
historical and $1,821 in pro forma 44,837 (7,223) 37,614
Inventories 24,783 (1,579) 23,204
Deferred income tax benefits 3,743 (445) 3,298
Prepaid expenses and other current assets 7,305 (710) 6,595
Total current assets 110,111 24,201 134,312
Property, plant, and equipment, net 54,348 (27,090) 27,258
Deferred charges and other assets 1,882 - 1,882
Deferred income tax benefits - 1,073 1,073
Excess of cost over fair value of
net assets acquired 6,519 (150) 6,369
$172,860 $ (1,966) $170,894
Liabilities and Stockholders' Equity
Current Liabilities:
Current installments of long-term debt $ 92 $ - $ 92
Accounts payable 9,054 (2,251) 6,803
Accrued expenses 9,992 (2,280) 7,712
Accrued compensation 9,815 - 9,815
Income taxes 1,533 - 1,533
Total current liabilities 30,486 (4,531) 25,955
Long-term debt, excluding current installments 1,916 - 1,916
Deferred and other compensation 5,005 - 5,005
Deferred income taxes 4,372 (4,372) -
Stockholders' equity:
Common Stock, $0.01 par value. Authorized
30,000,000 shares; issued 8,383,317 shares 84 - 84
Additional paid-in capital 35,658 - 35,658
Retained earnings 112,334 6,937 119,271
148,076 6,937 155,013
Less:1,099,500 shares of common stock
held in treasury, at cost, at
March 31, 1997 (16,995) - (16,995)
Total stockholders' equity 131,081 6,937 138,018
$172,860 $ (1,966) $170,894
See accompanying notes to pro forma condensed consolidated financial statements.
</TABLE>
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<TABLE>
DEVON GROUP, INC.
Pro Forma Condensed Consolidated Statement of Income
For the Year Ended March 31, 1997
(unaudited)
(in thousands, except per share data)
<CAPTION>
Pro Forma
Historical Adjustments Pro Forma
(see note B)
<S> <C> <C> <C>
Sales $264,388 $(56,016) $208,372
Operating costs and expenses:
Cost of sales 165,239 (45,300) 119,939
Selling, general, and
administrative 66,465 (7,094) 59,371
Income from operations 32,684 (3,622) 29,062
Interest income, net 1,197 - 1,197
Other income, net 1,298 (413) 885
Income from continuing operations
before income taxes 35,179 (4,035) 31,144
Provision for income taxes 13,851 (1,621) 12,230
Net income $ 21,328 $ (2,414) $ 18,914
Net income per common share $ 2.90 $ 2.57
Weighted average common shares outstanding 7,360 7,360
See accompanying notes to pro forma condensed consolidated financial statements.
</TABLE>
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DEVON GROUP, INC.
Notes to Pro Forma Condensed Consolidated Financial Statements
(Unaudited)
(in thousands)
A) The following pro forma adjustments reflect the change in cash
resulting from the sale of Graftek:
Net cash generated by transaction $34,700
Graftek's cash balance at
March 31, 1997 (542)
$34,158
B) These adjustments reflect the elimination of Graftek as of and for
the year ended March 31, 1997.
