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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) December 21, 1995
GTI CORPORATION
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(Exact name of registrant as specified in its charter)
Delaware
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(State or other jurisdiction of incorporation)
1-4289 05-0278990
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(Commission File Number) (IRS Employer Identification No.)
9171 Towne Centre Drive, Suite 460, San Diego, California 92122
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(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code (619) 546-0531
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This report contains a total of 6 pages of which this page is number 1.
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ITEM 2. AQUISITION OR DISPOSITION OF ASSETS.
In May of 1995, the board of directors of GTI Corporation, a
Delaware corporation (the "Company"), adopted a formal plan to sell its non-core
business units as part of the Company's strategic focus on the networking and
network access markets. At that time, the Company's non-core business units
consisted of its electronic components and equipment segment and its
distribution products segment.
Historically, these two business units have been reported as
separate business segments. The two segments each have separate and identifiable
assets, results of operations, and activities that are clearly distinguishable
from each other as well as from the Company's other assets and operations. In
connection with its decision to sell its non-core business units, the Company
began accounting for the electronic components and equipment segment and
distribution products segment as discontinued operations in accordance with
Accounting Principles Board Opinion No. 30.
As reported in the Company's previously filed form 10-Q for
the quarterly period ended September 30, 1995, during September and October the
Company entered into separate letters of intent to sell the assets of the
electronic components and equipment segment and the stock of the distribution
products segment.
The Company; Component Intertechnologies, Inc., a Delaware
corporation, (the "Buyer"); and the Buyer's wholly owned subsidiary,
Component-Ireland Holding Corporation, a Delaware corporation (the "Buyer's
Subsidiary"), entered into an asset purchase agreement dated as of December 16,
1995 (the "Agreement"). Pursuant to the Agreement, on December 21, 1995, the
Company sold substantially all of the assets of its electronic components
segment and certain related assets (together the "Division") as a going concern
to the Buyer and to the Buyer's Subsidiary in exchange for $12,500,000 (subject
to certain adjustments) and the assumption of certain liabilities. The Company
determined the amount of consideration for which it was willing to sell the
Division based on an initial estimation by management of the value of the
Division and on the response of various potential purchasers to the estimated
asking price. The Buyer is unrelated to the Company, its affiliates, directors,
officers, and associates of its directors and officers.
BUSINESS OF THE DIVISION.
The Division develops, manufactures, markets, and sells glass
components, welded leads, glass-to-metal seals, welded resistor elements, pins,
and pinned arrays for the glass diode, resistor, automotive, and component
packaging markets and application-specific printed circuit boards for automotive
and electrical lighting manufacturers. The Division includes manufacturing
facilities in Hadley, Pennsylvania and Hartselle, Alabama and 24,999 shares of
GTI-Ireland Limited which operates the Division's manufacturing facility in
Abbeyfeale, Republic of Ireland.
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TERMS OF THE DISPOSITION
The Buyer paid for the Division with cash in the amount of
$11,750,000, a $250,000 payment to an escrow account (subject to the terms of an
escrow agreement), and a promissory note in the principal amount of $500,000
maturing in three years at the latest and bearing interest at the rate of 8% per
annum.
In the Agreement, the Company undertook not to compete with the
Buyer in the businesses of the Division in the places where the Division does
business or has been doing business in the past five years. The Company also
indemnified the Buyer for losses arising out of any breaches of the Agreement or
certain related documents. Under certain circumstances, the Buyer has recourse
against the amount held in escrow to recover any losses for which the Buyer is
indemnified. The maximum claim under the indemnity in favor of the Buyer is
$12,500,000.
FUTURE DISPOSITION
Management expects (but cannot assure) that, pursuant to the plan of
divestiture, the Company will sell the distribution products segment within the
next 60 days. On successful consummation of the second sale as contemplated
under the formal plan of divestiture, the Company intends to file as soon as
reasonably practicable the required financial statement information and pro
forma financial information by amendment to this Form 8-K, but in no event later
than 60 days after January 6, 1996.
ITEM 7. FINANCIAL STATEMENTS, PRO FORMA FINANCIAL INFORMATION, AND EXHIBITS.
(a) Financial Statements of the Division
As of the date of filing of this Current Report on Form 8-K, it is
impracticable for the Company to provide the financial statements required by
this Item 7(a). In accordance with Item 7(a)(4) of Form 8-K, the Company will by
amendment to this Form 8-K no later than 60 days after January 6, 1996 file such
financial statements.
(b) Pro Forma Financial Information
As of the date of filing of this Current Report on Form 8-K, the
Company has not completed the sale of the distribution products segment under
the formal plan of divestiture. Management currently anticipates that the sale
of the distribution products segment will likely occur within the next 60 days.
Accordingly, it is impracticable for the Company to provide the pro forma
financial information required by Item 7(b). In accordance with Item 7(b) of
Form 8-K, the Company will by amendment to this Form 8-K no later than 60 days
after January 6, 1996 file such financial statements.
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(c) Exhibits
(i) Exhibit 2 Plan of divestiture.
(ii) Exhibit 99 P Asset Purchase Agreement dated as of
December 16, 1995 among GTI Corporation,
Component Intertechnologies, Inc., and
Component-Ireland Holding Corporation.
This exhibit has been filed on Form SE. In
accordance with Rule 201(b) of Regulation
S-T, this exhibit will be filed
electronically within six business days of
the date of this Current Report on Form 8-K.
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SIGNATURE
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.
Date: January 5, 1996 GTI CORPORATION
By: /s/ Douglas J. Downs
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Douglas J. Downs
Vice President and Chief
Financial Officer
(signing as both
authorized officer
and Chief Financial
Officer)
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Exhibit 2
PLAN OF DIVESTITURE
Resolutions of the Board of Directors adopting plan of divestiture:
The Chairman next announced that it was in order for the Board to
consider a proposal of management to divest both the Electronics Component Group
and ESCO Sales, Inc. There ensued a discussion of management's proposal as set
forth in the materials circulated to the Board in preparation for the meeting
(the "Board Materials"). Upon motion duly made, seconded, and unanimously
adopted it was:
RESOLVED, that management of the Company is authorized to negotiate
with respect to divestiture of the Electronics Component Group and ESCO Sales,
Inc. (Distribution) ("ESCO") as described in the Board Materials.
RESOLVED, that management of the Company be authorized, as deemed
necessary or appropriate, to form a new Delaware subsidiary to be known as GTI
Disposition Corp. for the purpose of facilitating the sale of Electronics
Component Group.
RESOLVED, that the officers of the Company be, and each of them hereby
is, authorized and empowered to execute and deliver all such documents and
instruments and to take or cause to be taken all such action, on behalf of the
Company and in its name, as they or any of them shall deem necessary or
desirable in order to effect the intent of the foregoing resolutions.
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