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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):
AUGUST 5, 1999
INSTRON CORPORATION
(Exact Name of Registrant as Specified in its Charter)
MASSACHUSETTS 001-05641 04-2057203
(State or Other Jurisdiction (Commission (I.R.S. Employer
of Incorporation) File Number) Identification No.)
100 ROYALL STREET, CANTON, MASSACHUSETTS 02021
(Address of Principal Executive Offices and Zip Code)
Registrant's telephone number, including area code: (781) 828-2500
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ITEM 5. OTHER EVENTS.
On August 5, 1999, Instron Corporation (the "Company"), Kirtland Capital
Partners III L.P. ("Kirtland") and ISN Acquisition Corporation ("MergerCo")
entered into Amendment No. 1 ("Amendment No. 1") to the Agreement and Plan of
Merger dated as of May 6, 1999 by and among the Company, Kirtland and MergerCo
(the "Merger Agreement"), pursuant to which the parties agreed to certain
modifications to the Merger Agreement. The Merger Agreement, as amended, permits
the closing of the transaction to occur in September 1999 rather than in the
latter part of August as originally contemplated by the parties. In addition,
pursuant to Amendment No. 1, the parties agreed, among other things, that
Kirtland will pay the Company $2,000,000 if the Merger Agreement is terminated
because a material adverse change in the Company's business occurs subsequent to
August 24, 1999 if all other closing conditions are satisfied. Kirtland also
agreed to pay the Company $1,000,000 if the Merger Agreement and is terminated
because Kirtland's lenders are unable to provide the financing necessary for it
to consummate the transaction as a result of a material adverse change in the
financial markets occurring subsequent to August 24, 1999 and if all other
closing conditions are satisfied.
The foregoing summary of Amendment No. 1 is qualified in its entirety by
reference to Amendment No. 1 which is attached hereto as Exhibit 2.1 and is
incorporated herein by reference, and the press release issued by the Company
and Kirtland in connection with the execution of Amendment No. 1 which is
attached hereto as Exhibit 99.1 and is incorporated herein by reference.
ITEM 7. FINANCIAL STATEMENTS, PRO FORMA FINANCIAL INFORMATION AND EXHIBITS.
(c) Exhibits. The following exhibits are provided in accordance with the
provisions of Item 601 of Regulation S-K and are filed herewith unless otherwise
noted.
EXHIBIT INDEX
*2.1 Amendment No. 1 dated as of August 5, 1999 by and among the Company,
MergerCo, and Kirtland to the Merger Agreement dated as of May 6, 1999 by
and among the Company, MergerCo and Kirtland
99.1 Press Release dated August 6, 1999
*The exhibit thereto has been omitted but copies thereof will be furnished
supplementally to the Commission upon request.
2
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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.
Date: August 6, 1999 INSTRON CORPORATION
By: /s/ Linton A. Moulding
----------------------------
Linton A. Moulding
Chief Financial Officer
3
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EXHIBIT 2.1
AMENDMENT NO. 1
TO
AGREEMENT AND PLAN OF MERGER
This Amendment No. 1 ("Amendment No. 1") to the Agreement and Plan of
Merger (the "Merger Agreement") dated as of May 6, 1999 by and among Kirtland
Capital Partners III L.P., an Ohio limited partnership ("Parent"), ISN
Acquisition Corporation, a Massachusetts corporation and a wholly owned
subsidiary of Parent ("MergerCo"), and Instron Corporation, a Massachusetts
corporation (the "Company"), is made as of August 5, 1999 by and among Parent,
MergerCo and the Company. Capitalized terms used herein but not otherwise
defined herein shall have the meanings ascribed thereto in the Merger Agreement.
RECITALS
WHEREAS, the parties desire to amend the Merger Agreement in certain
respects, subject to the terms, conditions, covenants and agreements set forth
herein; and
WHEREAS, the respective Boards of Directors of MergerCo and the Company
have approved this Amendment No. 1 in accordance with Section 9.3 of the Merger
Agreement.
NOW, THEREFORE, in consideration of the mutual covenants and agreements set
forth herein, and for other good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, the parties hereto, intending to
be legally bound, hereby agree as follows:
1. Section 1.3 of the Merger Agreement is hereby amended and restated in
its entirety as follows:
"CLOSING. The closing of the Merger (the "CLOSING") shall occur as
promptly as practicable after all of the conditions set forth in
Article VIII shall have been satisfied or, if permissible, waived by
the party entitled to the benefit of the same, and, subject to the
foregoing, shall take place at such time and on a date to be specified
by MergerCo (the "CLOSING DATE"); PROVIDED, HOWEVER, that, assuming
the prior satisfaction or, if permissible, waiver, of all of the
conditions set forth in Article VIII, in no event shall the Closing
occur later than September 30, 1999. The Closing shall take place at
the offices of Jones, Day, Reavis & Pogue, 901 Lakeside Avenue,
Cleveland, Ohio 44114, unless another place is agreed to by the
parties hereto."
2. Section 8.2(a) of the Merger Agreement is hereby amended and restated
in its
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entirety as follows:
"REPRESENTATIONS AND WARRANTIES. Those representations and warranties
of the Company set forth in this Agreement which are qualified by
materiality or a Company Material Adverse Effect or words of similar
effect shall be true and correct as of the date of this Agreement and
as of August 24, 1999 as though made on and as of August 24, 1999
(except to the extent such representations and warranties expressly
relate to a specific date, in which case such representations and
warranties shall be true and correct as of such date), and those
representations and warranties of the Company set forth in this
Agreement which are not so qualified shall be true and correct in all
material respects as of the date of this Agreement and as of August
24, 1999 as though made on and as of August 24, 1999 (except to the
extent such representations and warranties expressly relate to a
specific date, in which case such representations and warranties shall
be true and correct in all material respects as of such date).
Notwithstanding the foregoing, the representations and warranties of
the Company set forth in Section 5.3 shall be true and correct on the
date of this Agreement and as of August 24, 1999 as though made on and
as of August 24, 1999 (except to the extent such representations and
warranties expressly relate to a specific date, in which case such
representations and warranties shall be true and correct as of such
date)."
3. Section 8.2(l) of the Merger Agreement is hereby amended and restated
in its entirety as follows:
"OFFICER'S CERTIFICATES. The Company shall have furnished MergerCo
with a certificate dated as of August 24, 1999 signed on its behalf by
an executive officer to the effect that the conditions set forth in
Section 8.2(a) and Section 8.2(e) have been satisfied (a "SECTION 8.2
CERTIFICATE"). The Company also shall have furnished MergerCo with a
certificate dated as of the Closing Date signed on its behalf by an
executive officer to the effect that the conditions set forth in
Sections 8.1 and 8.2, other than those set forth in Section 8.2(a),
have been satisfied."
4. Section 9.2 of the Merger Agreement is hereby amended by adding the
following subsection (e):
"(e) Parent shall pay the Company an amount in cash equal to
$2,000,000 if (A) there shall have occurred subsequent to August 24,
1999 any material adverse change in the business, assets, condition
(financial or otherwise) or results of operations of the Company and
the Company Subsidiaries taken as a
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whole or any event or other circumstance which would, individually or
in the aggregate, reasonably be expected to result in any such
material adverse change (a "Material Adverse Change"), (B) this
Agreement is terminated by the parties in accordance with Section
9.1(a) or by one of the parties in accordance with Section
9.1(b)(iii), (C) all of the conditions set forth in Section 8.1 and
8.2, other than those set forth in Section 8.2(e) and Section 8.2(f),
have been satisfied, or, if permissible, waived by the party entitled
to the benefit thereof, and (D) the Company shall have furnished to
MergerCo the Section 8.2 Certificate."
5. Section 9.2 of the Merger Agreement is hereby amended by adding the
following subsection (f):
"(f) Parent shall pay the Company an amount in cash equal to
$1,000,000 if (A) Parent shall have delivered to the Company a Parent
Financing Notice subsequent to August 24, 1999, (B) this Agreement is
terminated either (x) by the parties in accordance with Section 9.1(a)
or by one of the parties in accordance with Section 9.1(b)(iii), (y)
by the Company in accordance with Section 9.1(c)(iii) or (z) by
MergerCo in accordance with Section 9.1(d)(iii), and (C) all of the
conditions set forth in Section 8.1 and 8.2, other than those set
forth in Section 8.2(e) and Section 8.2(f), have been satisfied, or,
if permissible, waived by the party entitled to the benefit thereof."
6. Section 9.2 of the Merger Agreement is hereby amended by adding the
following subsection (g):
"(g) Any payments to be made by Parent under Sections 9.2(e) and
9.2(f) hereof shall be payable by Parent to the Company by wire
transfer of immediately available funds within three (3) business days
after the date of termination to an account designated by the Company.
If Parent shall become obligated to make more than one of the payments
under Section 9.2(e) and Section 9.2(f), Parent shall pay to the
Company the amount set forth in Section 9.2(f), but only if Parent
shall have delivered to the Company a Parent Financing Notice prior to
the occurrence of a Material Adverse Change; otherwise, Parent shall
pay to the Company the amount set forth in Section 9.2(e)."
7. Parent and MergerCo each hereby waives any claim it has or may have
against the Company resulting from or with respect to (i) the originally
scheduled date of August 20, 1999 of the Special Meeting and the mailing by the
Company of the Proxy Statement to its stockholders on July 23, 1999, or any
actions taken by the Company in connection therewith,
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or (ii) the agreement by the parties herein contained to reschedule the Special
Meeting to September 3, 1999 and to extend the anticipated Closing Date to not
later than September 30, 1999.
8. The Company hereby waives any claim it has or may have against Parent
or MergerCo resulting from or with respect to (i) the originally scheduled date
of August 20, 1999 of the Special Meeting and the mailing by the Company of the
Proxy Statement to its stockholders on July 23, 1999, or any actions taken by
Parent and MergerCo in connection therewith, or (ii) the agreement by the
parties herein contained to reschedule the Special Meeting to September 3, 1999
and to extend the anticipated Closing Date to not later than September 30, 1999.
9. Parent and MergerCo acknowledge and agree that, from and after
delivery by the Company to MergerCo of the Section 8.2 Certificate, the
condition to MergerCo's obligation to effect the Merger set forth in Section
8.2(a) of the Merger Agreement shall be deemed to be satisfied and MergerCo
shall no longer have any right to terminate the Merger Agreement under Section
9.1(d)(i) thereof for breaches by the Company of any of the representations or
warranties made by the Company therein.
10. Section 9.1(d)(i) of the Merger Agreement is hereby amended and
restated in its entirety as follows:
"if, prior to the delivery by the Company to MergerCo of the Section
8.2 Certificate, the Company shall have breached in any respect any of
its representations, warranties or covenants contained in this
Agreement, which breach cannot be or has not been cured within fifteen
(15) days after the giving of written notice to the Company except, in
any case, for breaches of such representations and warranties which
are not reasonably likely to result in a Company Material Adverse
Effect;"
11. Section 9.1(d) of the Merger Agreement is hereby amended by adding the
following subsection (iv):
"if, subsequent to the delivery by the Company to MergerCo of the
Section 8.2 Certificate, the Company shall have breached in any
respect any of its covenants contained in this Agreement, which breach
cannot be or has not been cured within fifteen (15) days after the
giving of written notice to the Company;"
12. MergerCo and Parent each hereby expressly acknowledges and agrees that
as of the date hereof there has not occurred any material disruption or material
adverse change in the banking, financial or capital markets generally or in the
market for senior credit facilities or
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for new issuances of high yield securities which has caused either of the
Lenders to withdraw its commitment to provide financing as contemplated by the
Financing Letters.
13. Pursuant to Section 7.1(a)(i) of the Merger Agreement, Parent and the
Company hereby agree that the date of the Special Meeting shall be rescheduled
to September 3, 1999, and that the Company shall mail supplemental proxy
materials to its stockholders concerning such rescheduled Special Meeting date
substantially in the form attached hereto as EXHIBIT A. The Company shall give
MergerCo and its counsel the opportunity to review such supplemental proxy
materials prior to their being filed with the SEC.
14. Except as expressly provided herein, the Merger Agreement shall remain
in full force and effect.
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IN WITNESS WHEREOF, Parent, MergerCo and the Company have caused this
Amendment No. 1 to be executed as of the date first written above by their
respective officers thereunto duly authorized.
KIRTLAND CAPITAL PARTNERS III L.P.
By: Kirtland Partners Ltd.,
its General Partner
By: /s/ Raymond A. Lancaster
--------------------------------
Name: Raymond A. Lancaster
Title: Executive Vice President
ISN ACQUISITION CORPORATION
By: /s/ Raymond A. Lancaster
--------------------------------
Name: Raymond A. Lancaster
Title: President
By: /s/ Thomas N. Littman
--------------------------------
Name: Thomas N. Littman
Title: Treasurer
INSTRON CORPORATION
By: /s/ James M. McConnell
--------------------------------
Name: James M. McConnell
Title: President
By: /s/ John R. Barrett
--------------------------------
Name: John R. Barrett
Title: Treasurer
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EXHIBIT 99.1
[INSTRON LOGO]
FOR IMMEDIATE RELEASE
INSTRON ANNOUNCES CHANGE IN DATE OF STOCKHOLDER'S SPECIAL
MEETING AND REPORTS INCREASED SECOND QUARTER EARNINGS
CANTON, MA - AUGUST 6, 1999 -- Instron Corporation (ISN:ASE) today announced
that, as a result of recent market conditions, Instron and Kirtland Capital
Partners III L.P. have agreed to certain amendments to the previously announced
merger agreement. These amendments permit the closing of the transaction to
occur in September rather than in the latter part of August as originally
contemplated by the parties. In addition, pursuant to the amendments, the
parties agreed that Kirtland will make certain payments to Instron in the event
that the merger agreement is terminated under certain circumstances.
In connection with the amendments and to give stockholders of Instron
additional time to review the proxy materials that Instron has provided to them,
Instron has rescheduled the Special Meeting of Stockholders, at which
stockholders are being asked to approve the transaction, to Friday, September 3,
1999, at 10:00 a.m., local time, at the Hilton Dedham Place, 25 Allied Drive,
Dedham, Massachusetts 02026. Stockholders who have questions, need copies of the
proxy materials or need help in voting their shares are asked to contact our
proxy solicitor, MacKenzie Partners, Inc., at 1-800-322-2885 or collect at
212-929-5500.
Instron Corporation today reported quarterly revenues and earnings for
the second quarter of 1999. Net revenues for the quarter ended July 3, 1999 were
$52,260,000 compared with $37,761,000 for the second quarter of 1998, an
increase of 38.4% due
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primarily to the acquisition of Satec and the remaining interest of IST. Net
income increased by 3.1% to $1,863,000 or 26 cents per diluted share compared
with $1,807,000 or 25 cents per diluted share in 1998.
For the first half of 1999, net revenues totaled $101,005,000 compared
with $71,630,000 for the same period in 1998, a 41.0% increase due primarily to
the inclusion of Satec and IST. Income before income taxes for the first half of
1999 was $5,573,000 compared to adjusted income before income taxes of
$4,972,000 for the first half of 1998. The adjusted income before income taxes
for the first half of 1998 represents, as reported, income before income taxes
of $11,073,000 adjusted for the effect of a gain of $11,076,000 from the sale of
excess land and excluding a special items charge of $4,975,000 for the cost of
consolidating European operations and the write down in value of non-performing
assets. Net income for the first half of 1999 was $3,456,000 or 49 cents per
diluted share which compares to adjusted net income of $3,083,000 or 43 cents
per diluted share for the first half of 1998. The adjusted net income for the
first half of 1998 represents reported net income of $5,718,000 or 80 cents per
diluted share excluding the net gain on the sale of excess land which increased
net income by $6,867,000 or 97 cents per diluted share and the net loss of
$4,232,000 or 60 cents per diluted share due to the special items charge.
Bookings for the second quarter of 1999 were $52.6 million compared to
$35.0 million for the same period last year, and for the first six months of
1999 bookings were $94.6 million, up 37% from the same period last year due
primarily to the inclusion of Satec and IST.
James M. McConnell, President & Chief Executive Officer, discussing the
results stated, "I am pleased with the continued increase in earnings even
though margins were depressed due to higher than expected costs on several
large, technically complex contracts for IST. Our core bookings performance in
the second quarter was particularly encouraging which, excluding IST and Satec,
was up by nearly 11%. We are also
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encouraged by indications that activity in our Asian markets is increasing. I
remain optimistic about Instron's future."
Certain statements contained in this earnings release are "forward
looking" statements within the meaning of the federal securities laws and are
made in reliance upon the safe harbor provisions of the Private Securities
Litigation Reform Act of 1995. No assurances can be given that actual results
will not differ materially from those projected in the forward-looking
statements contained in this release. Certain factors that might cause such a
difference include: the fluctuations in interest rates, the stability of
financial markets, the level of bookings worldwide for Instron, Satec and IST,
particularly in Asia; the success of the automobile industry which is the major
purchaser of IST products; the operating results and profitability of Satec and
IST; the impact of fluctuations in exchange rates and the uncertainties of
operating in a global economy, including fluctuations in the economic conditions
of the foreign and domestic markets served by the Company which can affect the
demand for its products and services; the Company's ability to successfully
integrate the products and operations of Satec; the impact of Year 2000 issues;
the Company's ability to identify and successfully consummate strategic
acquisitions; and the pendency of the proposed merger with Kirtland.
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INSTRON CORPORATION
CONSOLIDATED OPERATING RESULTS
(Unaudited)
<TABLE>
<CAPTION>
QUARTER ENDED
---------------------------------------
JULY 3, 1999 JUNE 27, 1998
<S> <C> <C>
Net Revenue $ 52,260,000 $ 37,761,000
Cost of Revenue 32,619,000 22,027,000
Selling & Administration 14,128,000 11,014,000
Research & Development 2,593,000 1,718,000
Other (Income) Expense (84,000) 88,000
---------------------------------------
Income before Income Taxes 3,004,000 2,914,000
Provision for Income Taxes 1,141,000 1,107,000
---------------------------------------
Net Income 1,863,000 1,807,000
Net Earnings Per Diluted Share $ 0.26 $ 0.25
Weighted number of diluted common shares 7,146,262 7,151,451
</TABLE>
Instron Corporation, listed on the American Stock Exchange (ASE:ISN), is a
leading producer of instruments and systems for advanced materials testing.
CONTACT: Linton A. Moulding, Chief Financial Officer
Telephone: (781) 575-5374
E-mail: [email protected]
Website: www.instron.com
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INSTRON CORPORATION
CONSOLIDATED OPERATING RESULTS
(Unaudited)
[CAPTION]
<TABLE>
SIX MONTHS ENDED
----------------------------------------
JULY 3, 1999 JUNE 27,1998
<S> <C> <C>
Revenue $ 101,005,000 $ 71,630,000
Cost of revenue 61,473,000 42,154,000
Selling and administrative expenses 28,617,000 21,075,000
Research & development expenses 5,301,000 3,167,000
Special items charge 0 4,975,000
Gain from sale of land 0 11,076,000
Other expenses 41 262,000
----------------------------------------
Income before income taxes 5,573,000 11,073,000
Provision for income taxes 2,117,000 5,355,000
----------------------------------------
Net income $ 3,456,000 $ 5,718,000
Net earnings per diluted share $ .49 $ 0.80
Weighted number of diluted common shares 7,111,576 7,105,816
</TABLE>
SUPPLEMENTAL INFORMATION
------------------------
<TABLE>
<CAPTION>
GAIN ON SALE OF LAND SPECIAL ITEMS CHARGE
-------------------- --------------------
<S> <C> <C>
Effect on income before income tax $11,076,000 ($4,975,000)
Income taxes 4,209,000 (743,000)
------------- --------------
Effect on net income $ 6,867,000 ($4,232,000)
Effect on net earnings per diluted share $0.97 ($0.60)
</TABLE>
ADJUSTED NET INCOME WITHOUT THE EFFECT OF THE GAIN ON SALE OF LAND
AND THE SPECIAL ITEMS CHARGE
Income before income taxes as reported $11,073,000
Less: Gain on sale of land 11,076,000
Add: Special items charge 4,975,000
-----------
Adjusted income before income taxes 4,972,000
Provision for income taxes 1,889,000
-----------
Adjusted net income $ 3,083,000
Adjusted net earnings per diluted share $0.43
