SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K/A
Amendment No. 1
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 30, 1995
TRINOVA CORPORATION
(Exact name of registrant as specified in its charter)
Ohio 1-924 34-4288310
(State or other jurisdiction (Commission (IRS Employer
of incorporation) File Number) Identification No.)
3000 Strayer, Maumee, Ohio 43537
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code: (419) 867-2200
This document, including exhibits, contains 16 pages.
The cover page consists of 1 page.
The Exhibit Index is located at page 15.
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TRINOVA Corporation hereby amends its Form 8-K dated December 30, 1995 by
amending and restating Item 7:
Item 7. Financial Statements and Exhibits (See Note)
(a) Financial Statements of Business Acquired
Report of Ernst & Young LLP, Independent Auditors
Combined Statement of Revenues and Direct Operating Expenses of
the Electronic Systems Division ("ESD") of Cincinnati Milacron
Inc. for the year ended December 30, 1995
Notes to Combined Statement of Revenues and Direct Operating
Expenses
Note - The Combined Statement of Revenues and Direct Operating Expenses is
provided herein in lieu of an audited statement of income for ESD
because ESD's financial statements are not those of a separate
business enterprise and a complete income statement for ESD would
require arbitrary allocations of certain costs and expenses. Such
Statement presents information for the year ended December 30, 1995
in lieu of the year ended December 31, 1994. The requirement for an
audited statement of cash flow for ESD is satisfied by the
information contained in the Notes to such Statement. The acquired
net assets of ESD are included in the audited Statement of Financial
Position of TRINOVA Corporation for the year ended December 31, 1995
incorporated by reference in the Annual Report on Form 10-K of
TRINOVA Corporation being filed contemporaneously herewith.
(b) Pro Forma Financial Information (Unaudited)
Pro Forma Combined Statement of Income of TRINOVA Corporation
for the year ended December 31, 1995
Notes to Pro Forma Combined Statement of Income
(c) Exhibits
*(2)-1 Asset Purchase Agreement, dated as of December 15,
1995, between Cincinnati Milacron Inc. and TRINOVA
Corporation. (Schedules and exhibits to the Asset
Purchase Agreement have been omitted pursuant to Item
6.01(b)(2) of Regulation S-K. Such schedules and
exhibits are listed and described in the Asset Purchase
Agreement. The registrant agrees to furnish
supplementally a copy of any omitted schedule or
exhibit to the Asset Purchase Agreement to the
Commission upon request.)
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*(2)-2 Asset Purchase Agreement, dated December 15, 1995,
between Cincinnati Milacron U.K. Limited and TRINOVA
Limited. (Schedules and exhibits to the Asset Purchase
Agreement have been omitted pursuant to Item 6.01(b)(2)
of Regulation S-K. Such schedules and exhibits are
listed and described in the Asset Purchase Agreement.
The registrant agrees to furnish supplementally a copy
of any omitted schedule or exhibit to the Asset
Purchase Agreement to the Commission upon request.)
(23) Consent of Independent Auditors
* Included with, and incorporated herein by reference to, TRINOVA
Corporation's Current Report on Form 8-K filed on January 16,
1996.
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Electronic Systems Division
of
Cincinnati Milacron Inc.
COMBINED STATEMENT OF REVENUES
AND DIRECT OPERATING EXPENSES
Year Ended December 30, 1995
Contents
Report of Ernst & Young LLP, Independent Auditors. . . . . . . . . . . .1
Combined Statement of Revenues
and Direct Operating Expenses. . . . . . . . . . . . . . . . . . . . . .2
Notes to Combined Statement of Revenues
and Direct Operating Expenses. . . . . . . . . . . . . . . . . . . . . .3
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Report of Ernst & Young LLP,
Independent Auditors
Mr. Ronald D. Brown
Vice President-Finance
and Chief Financial Officer
Cincinnati Milacron Inc.
Cincinnati, Ohio
We have audited the accompanying Combined Statement of Revenues and Direct
Operating Expenses (the Statement) of Electronic Systems Division (ESD) of
Cincinnati Milacron Inc. for the year ended December 30, 1995. This Statement
is the responsibility of the Company's management. Our responsibility is to
express an opinion on this Statement based on our audit.
We conducted our audit in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to
obtain reasonable assurance about whether the Statement is free of material
misstatement. An audit includes examining, on a test basis, evidence
supporting the amounts and disclosures in the Statement. An audit also
includes assessing the accounting principles used and significant estimates
made by management, as well as evaluating the overall Statement presentation.
We believe that our audit provides a reasonable basis for our opinion.
In our opinion, the Statement referred to above presents fairly, in all
material respects, the combined revenues and direct operating expenses of ESD
for the year ended December 30, 1995, in conformity with generally accepted
accounting principles.
/S/ ERNST & YOUNG LLP
Cincinnati, Ohio
February 19, 1996
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Electronic Systems Division
of
Cincinnati Milacron Inc.
COMBINED STATEMENT OF REVENUES AND DIRECT OPERATING EXPENSES
Year Ended December 30, 1995
Sales:
Unaffiliated customers $ 29,977,658
Intercompany 60,698,305
-------------
Total sales 90,675,963
Direct operating expenses:
Cost of products sold 71,565,920
Selling, general and other administrative expenses 5,220,533
-------------
Total direct operating expenses 76,786,453
-------------
Operating Earnings $ 13,889,510
=============
See accompanying Notes to Combined Statement of Revenues and Direct Operating
Expenses.
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Electronic Systems Division
of
Cincinnati Milacron Inc.
NOTES TO COMBINED STATEMENT OF REVENUES
AND DIRECT OPERATING EXPENSES
Year Ended December 30, 1995
1. Organization and Background
The Electronic Systems Division ("ESD") operates as a division of
Cincinnati Milacron Inc. and two of its subsidiaries (collectively, "CMI").
The principal business activity of ESD is the design, manufacture and sale
of electronic controls and parts to unaffiliated customers and other CMI
divisions and subsidiaries. ESD has two locations: South Lebanon, Ohio and
Biggleswade, Great Britain.
On December 15, 1995, CMI (the "Seller") and TRINOVA Corporation (the
"Purchaser" or "TRINOVA") entered into various agreements (collectively
referred to as the "Agreements") providing for the purchase by TRINOVA of
all of ESD's U.S. and foreign business including certain of its assets and
liabilities as of December 30, 1995. The amounts included in the Combined
Statement of Revenues and Direct Operating Expenses (the "Statement")
reflect the results of operations of ESD for the year ended December 30,
1995.
2. Summary of Significant Accounting Policies
General
This Statement has been derived from the books and records of CMI which are
maintained in accordance with generally accepted accounting principles.
The accounting policies followed in the preparation of this Statement are
the same accounting policies followed by CMI in the preparation of its
consolidated financial statements with the exception of the method for
determining inventory costs. ESD's method of determining inventory costs
is based on the first-in, first-out (FIFO) method whereas historically
substantially all of ESD's inventories were valued using the last-in,
first-out (LIFO) method in CMI's consolidated financial statements.
The accompanying Statement is limited to the revenues and direct operating
expenses of ESD and is not intended to be a complete presentation of the
results of operations of ESD on a stand alone basis. CMI incurs certain
common costs which relate to both ESD and CMI's business as a whole.
Accordingly, for purposes of preparing this Statement, management of CMI
has made certain allocations of costs incurred on behalf of ESD.
Management believes that the basis for such allocations is reasonable;
however, the amounts could differ from amounts that would be incurred if
ESD were operated on a stand alone basis. In addition, interest cost and
income tax expense attributed to ESD have been excluded because such
amounts are dependent on the consolidated group of which ESD is a part. A
statement of cash flows has not been presented because CMI's centralized
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Electronic Systems Division
of
Cincinnati Milacron Inc.
NOTES TO COMBINED STATEMENT OF REVENUES
AND DIRECT OPERATING EXPENSES
Year Ended December 30, 1995
2. Summary of Significant Accounting Policies - Continued
accounting structure and cash management system would require arbitrary
allocations of cash flow information. As a result, cash flow information
has been limited to disclosing selected cash flow data including
depreciation and capital expenditures.
The preparation of this Statement in conformity with generally accepted
accounting principles requires management to make estimates and assumptions
that affect the amounts reported in the Statement and accompanying notes.
Revenue Recognition
Revenues are derived from sales to unaffiliated customers and to CMI and
are recognized when products are shipped.
Research and Development Costs
Costs associated with research and development activities are charged to
expense as incurred. During 1995, such costs were approximately
$3,456,000.
Costs for Capitalized Software
Costs of internally developed software for the A2100 system have been
capitalized in accordance with Statement of Financial Accounting Standards
No. 86. These costs have a remaining amortizable life of approximately
five years. Total software amortization during 1995 was $830,557.
Depreciation Expense
Depreciation is determined on the straight-line method based upon estimated
useful lives of the depreciable assets.
Foreign Currency Translation
Revenues and expenses related to the division's operations in Great Britain
are translated at the weighted-average rates during the reporting period.
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Electronic Systems Division
of
Cincinnati Milacron Inc.
NOTES TO COMBINED STATEMENT OF REVENUES
AND DIRECT OPERATING EXPENSES
Year Ended December 30, 1995
3. Corporate Charges and Services
CMI has historically charged ESD for certain corporate administrative
services performed on behalf of ESD. These services include centralized
payroll services, accounts payable, computer services, rent and other
miscellaneous charges to ESD which totaled $679,319 for 1995. In addition,
certain other costs, including fringe benefits, have been charged to ESD on
the basis of total payroll expense. In the opinion of management, these
charges are reasonable. However, they are not necessarily indicative of
the level of expense which might have been incurred had ESD been operating
as a separate stand alone company.
4. Major Customers
For the year ended December 30, 1995, 67% of ESD's total sales revenues
were derived from sales to CMI subsidiaries and divisions. In connection
with the sale, on December 30, 1995, CMI entered into a seven-year supply
agreement with the Purchaser to provide for future sales of electronic
controls to CMI subsidiaries and divisions.
Sales to unaffiliated customers primarily relate to service parts, contract
electronics, and machine tool retrofit and remanufacture operations. No
single unaffiliated customer constituted a significant portion of total
sales revenue during the year.
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Electronic Systems Division
of
Cincinnati Milacron Inc.
NOTES TO COMBINED STATEMENT OF REVENUES
AND DIRECT OPERATING EXPENSES
Year Ended December 30, 1995
5. Lease Expense
ESD leases certain facilities, equipment and automobiles under operating
leases. Total expense for 1995 was $497,752. Future minimum rental
payments applicable to noncancelable operating leases extend through 2000
and are as follows:
1996 $ 289,000
1997 226,155
1998 46,702
1999 44,412
2000 44,412
---------
$ 650,681
=========
6. Operations by Geographic Area
Transactions within the United States and the United Kingdom operating
groups are summarized as follows:
United United
States Kingdom Total
------- ------- -----
Sales $80,785,931 $ 9,890,032 $90,675,963
Operating earnings 13,688,804 200,706 13,889,510
Depreciation and
amortization expense 2,390,557 16,765 2,407,322
Capital expenditures 1,783,100 3,953 1,787,053
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TRINOVA Corporation
Pro Forma Combined Statement of Income
(Unaudited)
(in thousands)
The following unaudited Pro Forma Combined Statement of Income for the year
ended December 31, 1995, gives effect to the acquisition of ESD, which was
accounted for as a purchase, as if the acquisition was consummated at the
beginning of the year. The pro forma adjustments are described in the
accompanying notes to the Pro Forma Combined Statement of Income. Such pro
forma financial statement should be read in conjunction with TRINOVA
Corporation's consolidated financial statements and notes set forth in the
Annual Report on Form 10-K for the year ended December 31, 1995. The
unaudited Pro Forma Combined Statement of Income for the year ended
December 31, 1995, is not necessarily indicative of the actual results that
would have occurred had the transaction been consummated at the beginning of
the year or of the future results of operations which will be obtained by
TRINOVA Corporation as a result of the acquisition. A pro forma combined
statement of financial position is not included herein since the acquisition
is reflected in TRINOVA Corporation's Statement of Financial Position as of
December 31, 1995.
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<TABLE>
TRINOVA Corporation
Pro Forma Combined Statement of Income
Year Ended December 31, 1995
(in thousands, except per share data)
(Unaudited)
<CAPTION>
As Reported Pro Forma
------------------------ --------------------
ESD
TRINOVA Acquisition
Corporation ESD Adjustments Combined
----------- --------- ----------- --------
<S> <C> <C> <C> <C>
Net sales $1,884,013 $ 90,676 $ - $1,974,689
Cost of products sold 1,407,670 71,566 6,121 (1)
- (3,456)(2) 1,481,901
---------- ---------- ---------- ----------
Manufacturing Income 476,343 19,110 (2,665) 492,788
Selling and general
administrative expenses 254,141 5,220 409 (3) 259,770
Engineering, research and
development expenses 62,993 - 3,456 (2)
- 271 (3) 66,720
---------- ---------- ---------- ----------
Operating Income 159,209 13,890 (6,801) 166,298
Interest expense (19,199) - (6,890)(4) (26,089)
Other expenses - net (11,814) - (13)(5) (11,827)
---------- ---------- ---------- ----------
Income before Income Taxes 128,196 13,890 (13,704) 128,382
Income taxes 33,300 - 71 (6) 33,371
---------- ---------- ---------- ----------
Net Income $ 94,896 $ 13,890 $ (13,775) $ 95,011
========== ========== ========== ==========
Net Income per Share $ 3.20 $ 3.20
========== ==========
Average Number of Common
Shares Outstanding 30,864 30,864
========== ==========
</TABLE>
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TRINOVA Corporation
Notes to Pro Forma Combined Statement of Income
Year Ended December 31, 1995
(in thousands)
(Unaudited)
The following pro forma adjustments have been made to reflect the acquisition
of ESD by TRINOVA Corporation as if the acquisition was consummated on
January 1, 1995:
(1) Increase in depreciation expense resulting from allocation
of purchase premium to plants and properties $ 1,247
Amortization of goodwill resulting from allocation of
purchase premium 1,809
Effect on cost of products sold of fair value adjustment
to beginning of the year inventories 624
Adjust fringe benefits classified in cost of products sold,
principally due to defined benefit pension plan expense 2,441
-------
Total adjustment to cost of products sold $ 6,121
=======
(2) Reclassify ESD's research and development costs:
Cost of products sold $(3,456)
Engineering, research and development expenses 3,456
=======
(3) Adjust fringe benefits, principally due to defined benefit
pension plan expense:
Selling and general administrative expenses $ 409
Engineering, research and development expenses 271
=======
(4) Increase in interest expense with respect to borrowings
to finance the acquisition in the principal amount of
$106,000 at an assumed average interest rate of 6.5% $ 6,890
=======
(5) Amortization of assumed loan origination fees associated
with long-term financing arrangements $ 13
=======
(6) Tax effects of ESD's pretax income and the above
adjustments at statutory income tax rates $ 71
=======
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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.
TRINOVA CORPORATION
/S/ DAVID M. RISLEY
Date: March 14, 1996 By: David M. Risley
Vice President - Finance and
Chief Financial Officer
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EXHIBIT INDEX
Exhibit No. Page No.
(2)-1 Asset Purchase Agreement, dated as of December 15, Incorporated
1995, between Cincinnati Milacron Inc. and by reference
TRINOVA Corporation, filed as Exhibit (2)-1 to
Form 8-K filed on January 16, 1996. (Schedules
and exhibits to the Asset Purchase Agreement have
been omitted pursuant to Item 6.01(b)(2) of
Regulation S-K. Such schedules and exhibits are
listed and described in the Asset Purchase
Agreement. The registrant agrees to furnish
supplementally a copy of any omitted schedule or
exhibit to the Asset Purchase Agreement to the
Commission upon request.)
(2)-2 Asset Purchase Agreement, dated December 15, 1995, Incorporated
between Cincinnati Milacron U.K. Limited and by reference
TRINOVA Limited, filed as Exhibit (2)-2 to
Form 8-K filed on January 16, 1996. (Schedules
and exhibits to the Asset Purchase Agreement have
been omitted pursuant to Item 6.01(b)(2) of
Regulation S-K. Such schedules and exhibits are
listed and described in the Asset Purchase
Agreement. The registrant agrees to furnish
supplementally a copy of any omitted schedule or
exhibit to the Asset Purchase Agreement to the
Commission upon request.)
(23) Consent of Independent Auditors 16
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EXHIBIT (23)
CONSENT OF INDEPENDENT AUDITORS
We consent to the incorporation by reference in Post-Effective Amendment
No. 1 to Registration Statement No. 33-9127 on Form S-3 dated August 28, 1987
and in the related Prospectus dated April 21, 1992; Registration Statement No.
33-19555 on Form S-3 dated January 15, 1988 and in the related Prospectus;
Post-Effective Amendment No. 2 to Registration Statement No. 33-14682 on Form
S-8 dated April 28, 1989; Registration Statement No. 33-28638 on Form S-8
dated May 10, 1989; Registration Statement No. 33-54059 on Form S-8 dated June
10, 1994; and Registration Statement No. 33-55399 on Form S-8 dated September
8, 1994, of our report dated February 19, 1996, with respect to the financial
statement of Electronic Systems Division of Cincinnati Milacron Inc. for the
year ended December 30, 1995 included in TRINOVA Corporation's Current Report
on Form 8-K/A filed on March 14, 1996.
/S/ ERNST & YOUNG LLP
Cincinnati, Ohio
March 14, 1996
