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
MARCH 12, 1998
(Date of Report)
ADVANCED TECHNICAL PRODUCTS, INC.
(Exact name of registrant as specified in its charter)
DELAWARE 0-1298 11-1581582
(State or other (Commission (I.R.S. Employer
jurisdiction of File Number) Identification No.)
incorporation)
3353 PEACHTREE ROAD, SUITE 920
ATLANTA , GEORGIA 30326
(Address of principal executive offices) (Zip Code)
(404) 231-7272
(Registrant's telephone number,
including area code)
NOT APPLICABLE
(Former name or former address, if changed since last report)
-1-
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ITEM 5. OTHER EVENTS
On March 4, 1998, the Registrant announced its fourth quarter and
12-month earnings for the year ended December 31, 1997 and related matters. Such
matters are described in the press release attached hereto as Exhibit 99.1.
ITEM 7. FINANCIAL STATEMENTS AND EXHIBITS
(a) - (b) No financial statements are filed with this report.
(c) EXHIBITS.
99.1 Press Release issued by Registrant dated March 4,
1998 announcing its fourth quarter and 12-month
earnings for the year ended December 31, 1997 and
related matters.
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.
ADVANCED TECHNICAL PRODUCTS, INC.
(Registrant)
Dated: March 12, 1998 By:/s/ GARRETT L. DOMINY
Garrett L. Dominy, Executive
Vice President and Chief
Financial Officer
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EXHIBIT INDEX
EXHIBIT SEQUENTIAL
PAGE NO. DESCRIPTION PAGE NO.
99.1 Press Release issued by Registrant dated March 4, 1998 1
announcing its fourth quarter and 12-month earnings for
the year ended December 31, 1997 and related matters.
EXHIBIT 99.1
FOR IMMEDIATE RELEASE
AT THE COMPANY: INVESTOR RELATIONS:
GARRETT L. DOMINY HARVEY A. GORALNICK
CHIEF FINANCIAL OFFICER BERNADETTE MAGLIONE
(404) 231-7272 FOCUS PARTNERS LLC
www.atpx.com (212) 752-9445
[email protected]
ATP ANNOUNCES FOURTH QUARTER AND YEAR-END RESULTS
ATLANTA, GA, MARCH 4, 1998 - ADVANCED TECHNICAL PRODUCTS, INC. (NASDAQ: ATPX),
today reported fourth quarter and year-end financial results for the year ended
December 31, 1997. Advanced Technical Products (ATP) was formed in November,
1997, through the merger of Lunn Industries, Inc. (LUNN) and TPG Holdings, Inc.
FOURTH QUARTER - ACTUAL RESULTS
For the quarter ending December 31, 1997, ATP reported revenues of $38.9 million
compared to $34.4 million in 1996, a 13.1% increase. Income before extraordinary
item for the fourth quarter of 1997 was $2.3 million compared to $1.7 million in
the same quarter of 1996. Net income for the fourth quarter was $2.3 million
compared to $1.0 million in the fourth quarter of 1996. Earnings per share
(diluted) before extraordinary item for the fourth quarter of 1997 was $0.46
compared to $0.41 in the same quarter of 1996. Earnings per share (diluted) for
the fourth quarter of 1997 was $0.46 compared to $0.25 in 1996, an 84% increase.
Fourth quarter financials for 1997 include results from Lunn Industries from
operations for two months subsequent to the date of the merger.
(more)
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YEAR-END 1997 - ACTUAL RESULTS
ATP reported revenues of $119.4 million in 1997 compared to $126.5 million for
the previous year. Income before extraordinary item for the year was $4.2
million compared to $4.9 million in 1996. Net income in 1997 was $4.2 million
compared to $4.3 million for 1996. Earnings per share (diluted) before
extraordinary item for 1997 was $0.95 compared to $1.20 in 1996, and earnings
per share (diluted) for the year was $0.95 compared to $1.03 in 1996. Year-end
financials for 1997 include results from Lunn Industries from operations for two
months subsequent to the date of the merger.
FOURTH QUARTER - PRO FORMA RESULTS
For the fourth quarter of 1997, ATP reported pro forma revenues of $41.6 million
compared to $39.1 million for the same quarter in 1996. Income before
extraordinary item for the fourth quarter was $2.5 million compared to $1.9
million in the same quarter of 1996. Net income for the fourth quarter of 1997
was $2.5 million compared to $1.1 million in the fourth quarter of 1996.
Earnings per share (diluted) before extraordinary item for the fourth quarter
was $0.44 compared to $0.36 in the same quarter of 1996. Earnings per share
(diluted) for the fourth quarter was $0.44 in 1997 compared to $0.21 in 1996, a
110% increase. Pro forma results for 1996 and 1997 include Lunn Industries'
operations as if the merger had occurred on January 1, 1996.
YEAR-END 1997 - PRO FORMA RESULTS
For the year-ended 1997, ATP reported revenues of $139.0 million compared to
$144.6 million for the previous year. Income before extraordinary item for the
year was $5.3 million compared to $5.4 million in 1996. Net income in 1997 was
$5.3 million compared to $4.6 million for 1996. Earnings per share (diluted)
before extraordinary item for 1997 was $0.94 compared to $1.02 in 1996, and
earnings per share (diluted) for the year was $0.94 compared to $0.87 in 1996.
Pro forma results for 1996 and 1997 include Lunn Industries' operations as if
the merger had occurred on January 1, 1996.
(more)
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James S. Carter, Chairman, President and CEO stated that, "The merger has now
placed us in a unique position to take advantage of five complimentary processes
that allow us to maximize our sales and production relationships with the
industry leaders. With the technical capability of the five divisions that now
make up the Company, we believe we are in a strong position to continue the
progress we made in the fourth quarter. The decline in revenue and earnings in
1997 was primarily due to a customer delay in the production of a $30 million
contract that was secured in late 1996. We anticipate that this contract will
start to produce revenues and income in 1998."
BACKLOG
Backlog of released orders as of year-end 1997 was $192 million compared to pro
forma backlog of $148 million at year-end 1996. Backlog of unreleased orders at
year-end 1997 was $364 million compared to pro forma backlog of $167 million at
year-end 1996. Released backlog represents contracts generally in excess of
eighteen months with purchase orders that have been placed. Unreleased orders
primarily consist of long-term contracts of three years or greater, where
purchase orders are not placed at time of booking.
AEROSPACE/DEFENSE SEGMENT
The aerospace/defense segment represents approximately 80% of ATP's revenues.
The largest portion of this segment's revenue comes from the sale of aerospace
components produced from advanced composite materials, such as, radomes,
aircraft doors, wing components, spacecraft pressure vessels and engine parts.
In addition, ATP's state-of-the-art Intellitec facilities has a contract to
develop and produce the next generation chemical detector system for the US
Military. Marion Composites is one of the major producers of shelters used for
defense systems for the US government.
(more)
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"For the first time in a decade, the Defense Department's military budget
was not cut," stated Mr. Carter. "The 1998 military budget of $225 billion -
with around $100 billion a year for procurement and research - makes the
Pentagon one of the biggest customers around. We are particularly pleased about
the GE/Marion production alliance announced in January. Marion Composites has
entered into a long-term production alliance with GE Aircraft Engines, to
manufacture two inlet devices for each of the 548 jet engines for the US Navy's
newest fighter, the F/A-18E/F Super Hornet. As concerns over chemical warfare
intensify, we expect continued growth in sales of our Chemical Detection
equipment. With our manufacturing capacity at only 60%, we are well positioned
to capitalize on the growth of this market, and realize our growing backlog."
COMMERCIAL SEGMENT
The commercial segment represents approximately 20% of ATP's revenues. Sale of
Natural Gas Vehicle (NGV) tanks, the fastest growing product in this segment, is
projected to continue at an annual growth rate of 20-25%. These tanks, produced
at Lincoln Composites' facility, are sold to bus and automotive OEMs and fleet
operators.
The Specialty Vehicle Equipment (SVE) market also represents further growth
opportunities for ATP Electronic system controls, battery guards, and energy
dispersement and multiplex systems are produced for the bus, truck and the
recreational vehicle market at Intellitec's facility.
As trends in the oil and gas industry shift to exploration and production in the
deep-water offshore areas, the need for advanced high strength-to-weight
composite components is expected to increase. These products include lightweight
production risers, accumulator bottles for offshore platforms and drill pipe.
ATP anticipates further growth in business from these markets.
(more)
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"We are pleased to announce that we have applied for listing on the Nasdaq
National Market System. Additionally, because TPG exceeded its target net income
of $4 million for 1997, all escrowed shares will be released to the former TPG
shareholders, as defined by the merger agreement," stated Mr. Carter.
Advanced Technical Products designs, develops and manufactures advanced
composite-based materials and products from high strength fibers, which optimize
strength to weight performance. The Company is one of a very few with the
ability to utilize multiple processes, such as, autoclave lamination, filament
winding, resin transfer and metal bonding. Using these processes, the Company
produces products for the aerospace and defense markets, as well as commercial
applications, including, oil and gas and pressure vessels for Natural Gas
Vehicles.
EXCEPT FOR THE HISTORICAL INFORMATION CONTAINED HEREIN, THE MATTERS DISCUSSED IN
THIS NEWS RELEASE ARE FORWARD-LOOKING STATEMENTS THAT INVOLVE RISKS AND
UNCERTAINTIES, INCLUDING, BUT NOT LIMITED TO, THE CANCELLATION OR DELAY OF
CONTRACTS ON THE PART OF ATP'S CUSTOMERS, THE RISKS ASSOCIATED WITH FIXED PRICE
CONTRACTS, AND OTHER RISKS DISCLOSED IN ATP'S FILINGS WITH THE SECURITIES AND
EXCHANGE COMMISSION.
(table to follow)
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CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(Unaudited, In Thousands Except EPS)
ACTUAL
Year Ended Quarter Ended
December December
1996 1997 1996 1997
----------------- ----------------
Revenues ................................ $126,534 119,433 34,373 38,893
Cost of sales ........................... 94,365 91,312 25,181 29,506
----------------- ----------------
Gross Profit .................. 32,169 28,121 9,192 9,387
General & Administration ................ 21,758 19,006 5,865 4,897
----------------- ----------------
Operating Income .............. 10,411 9,115 3,327 4,490
Interest Expense ........................ 2,377 2,273 541 688
----------------- ----------------
Income Before Taxes
and Extraordinary Item ........ 8,034 6,842 2,786 3,802
Provision Income Taxes .................. 3,093 2,634 1,073 1,464
----------------- ----------------
Income Before Extraordinary Item ........ 4,941 4,208 1,713 2,338
Extraordinary Loss ...................... 667 667
----------------- ----------------
Net Income .............................. 4,274 4,208 1,046 2,338
Preferred Dividends ..................... 80 80 20 20
----------------- ----------------
Net Income Available for
Common Shares ................... $ 4,194 4,128 1,026 2,318
Earnings Per Share
Before Extraordinary Item
Basic ......................... $ 1.23 0.99 0.43 0.48
================= ================
Diluted ....................... $ 1.20 0.95 0.41 0.46
================= ================
Earnings Per Share
Basic ......................... $ 1.06 0.99 0.26 0.48
================= ================
Diluted ....................... $ 1.03 0.95 0.25 0.46
================= ================
Weighted Average Number of
Common Shares Outstanding
Basic ......................... 3,944 4,157 3,944 4,799
Diluted ....................... 4,059 4,362 4,151 5,049
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CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(Unaudited, In Thousands Except EPS)
PRO FORMA
Year Ended Quarter Ended
December December
1996 1997 1996 1997
------------------ ---------------
Revenues ................................ $144,632 138,958 39,108 41,568
Cost of sales ........................... 108,114 105,666 28,514 31,159
------------------ ---------------
Gross Profit .................. 36,518 33,292 10,594 10,409
General & Administration ................ 24,985 22,199 6,877 5,641
------------------ ---------------
Operating Income .............. 11,533 11,093 3,717 4,768
Interest Expense ........................ 3,022 2,823 704 777
------------------ ---------------
Income Before Taxes
and Extraordinary Item ........ 8,511 8,270 3,013 3,991
Provision Income Taxes .................. 3,107 3,018 1,100 1,525
------------------ ---------------
Income Before Extraordinary Item ........ 5,404 5,252 1,913 2,466
Extraordinary Loss ...................... 785 0 785 0
------------------ ---------------
Net Income .............................. 4,619 5,252 1,128 2,466
Preferred Dividends ..................... 80 80 20 20
------------------ ---------------
Net Income Available for
Common Shares .................... $ 4,539 5,172 1,108 2,446
================== ===============
Earnings Per Share
Before Extraordinary Item
Basic ......................... $ 1.06 0.99 0.37 0.47
================== ===============
Diluted ....................... $ 1.02 0.94 0.36 0.44
================== ===============
Earnings Per Share
Basic ......................... $ 0.91 0.99 0.22 0.47
================== ===============
Diluted ....................... $ 0.87 0.94 0.21 0.44
================== ===============
Weighted Average Number of
Common Shares Outstanding
Basic ......................... 5,000 5,220 5,100 5,220
Diluted ....................... 5,200 5,500 5,300 5,500
<PAGE>
CONSOLIDATED BALANCE SHEET DATA
(Unaudited, In Thousands)
At December 31,
1996 1997
ACTUAL PRO FORMA ACTUAL
------------------- -------
Cash and Cash Equivalents .................... $ 1,059 1,064 494
Other Current Assets ......................... 38,886 47,045 58,544
Total Current Assets .................. 39,945 48,109 59,038
Property and Equipment, Net .................. 4,409 13,623 17,627
Other Assets, Net ............................ 369 6,266 7,421
Total Assets .......................... $44,723 67,998 84,086
Current Liabilities .......................... 21,483 25,568 38,606
Long-Term Liabilities ........................ 15,222 20,007 18,081
Total Liabilities ..................... $36,705 45,575 56,687
Preferred Stock .............................. 1,000 1,000 1,000
Stockholders' Equity ......................... 7,018 21,423 26,399
Total Liabilities and Equity .......... $44,723 67,998 84,086
