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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 EXCANGE ACT OF 1934
Date of Report (Date of earliest event reported): October 16, 2000
(September 30, 2000)
LYDALL, INC.
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(Exact name of registrant as specified in its charter)
Delaware 1-7665 06-0865505
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(State or other jurisdiction of (Commission file number) (I. R. S. Employer
incorporation or organization) Identification No.)
One Colonial Road, P. O. Box 151, Manchester, CT 06045-0151
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(Address of principal executive offices) (Zip Code)
(860) 646-1233
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(Registrant's telephone number, including area code)
Not Applicable
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(Former name or former address, if changed since last report)
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TABLE OF CONTENTS
<TABLE>
<CAPTION>
Page No.
<S> <C> <C>
ITEM 2 Acquisition or Disposition of Assets 3
ITEM 7 Financial Statements and Exhibits 4
Signature 5
</TABLE>
2
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ITEM 2. ACQUSITION OR DISPOSITION OF ASSETS
Effective September 30, 2000, Lydall, Inc. (the "Company") completed the
disposition of substantially all the assets and certain liabilities of its
injection-molding and chrome-plating operations (the "Sold Operations") in
Germany to a management buyout group.
The disposition was affected through a transfer of substantially all the
assets and certain liabilities of the Sold Operations from Lydall Gerhardi
GmbH & Co. KG to Gerhardi Kunststofftechnik GmbH, which in turn was sold to
the aforementioned management buyout group for nominal consideration.
The terms of the transfer of assets and liabilities and subsequent
disposition are more fully described in the Spin-off and Transfer Agreement
and the Purchase and Transfer Agreement, respectively. Copies of the
translated agreements are attached as Exhibits 2.1 and 2.2, respectively and
are incorporated by reference herein. The Company hereby undertakes to
furnish to the Commission upon its request, copies of the original executed
agreements, exhibits and schedules thereto, written in German, not filed with
this report. The Company also issued a press release on October 2, 2000, a
copy of which is attached as Exhibit 99.1 hereto and incorporated by
reference herein.
3
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ITEM 7. FINANCIAL STATEMENTS AND EXHIBITS
(a) Financial statements of business acquired
Not applicable.
(b) Pro forma financial information
The following pro forma consolidated condensed financial
statements of the Company are filed with this report and are
incorporated by reference in this Item 7(b):
Pro Forma Consolidated Condensed Balance Sheet at June 30,
2000 (unaudited)
Pro Forma Consolidated Condensed Statement of Net Income for
the Year Ended December 31, 1999 (unaudited)
Pro Forma Consolidated Condensed Statement of Net Income for
the Six Months Ended June 30, 2000 (unaudited)
The unaudited Pro Forma Consolidated Condensed Balance Sheet
of the Company at June 30, 2000 reflects the financial
position of the Company as if the disposition discussed in
Item 2 took place on June 30, 2000. The unaudited Pro Forma
Consolidated Condensed Statement of Net Income for the fiscal
year ended December 31, 1999 and the six months ended June 30,
2000 assumes that the disposition occurred on January 1, 1999.
These unaudited pro forma consolidated condensed financial
statements are based on available information and certain
assumptions that the Company believes are reasonable. The pro
forma adjustments are based on preliminary information and are
subject to adjustments for actual information related to the
disposition. These pro forma financial statements are
presented for illustrative purposes only. They do not purport
to be indicative of the results of operations which actually
would have resulted had the divestiture occurred on the dates
indicated or which may result in the future. The Company
believes it has utilized reasonable methods to conform the
basis of presentation.
The unaudited pro forma consolidated condensed financial
statements should be read in conjunction with the
consolidated financial statements and footnotes thereto of
Lydall, Inc. (file no. 1-7665) for the year ended December
31, 1999, which have been filed on Form 10-K on March 30,
2000, pursuant to section 13 or 15(d) of the Securities
Exchange Act of 1934.
(c) Exhibits:
2.1 Spin-off and Transfer Agreement (English translation)
between Lydall Gerhardi GmbH and Co. KG and Gerhardi
Kunststofftechnik GmbH dated September 29, 2000,
effective September 30, 2000.
2.2 Purchase and Transfer Agreement (English translation)
between Lydall Gerhardi GmbH and Co. KG and the
management buyout group as setforth in the agreement,
dated September 29, 2000, effective September 30,
2000.
99.1 Press release dated October 2, 2000 titled "Lydall
Completes Sale of Chrome-Plating and
Injection-Molding Operations in Germany".
4
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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.
Lydall, Inc.
(Registrant)
Date: October 16, 2000 By: /s/ Thomas P. Smith
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Thomas P. Smith
Vice President-Controller
(On behalf of the Registrant and as
Principal Accounting Officer)
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INDEX TO FINANCIAL STATEMENTS AND EXHIBITS
<TABLE>
<CAPTION>
Financial Statements Page
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<S> <C>
Pro Forma Consolidated Condensed Balance Sheet 7
at June 30, 2000 (unaudited)
Pro Forma Consolidated Condensed Statement of Net Income 8
for the Year Ended December 31, 1999 (unaudited)
Pro Forma Consolidated Condensed Statement of Net Income
for the Six months Ended June 30, 2000 (unaudited) 9
</TABLE>
<TABLE>
<CAPTION>
Exhibit No. Description
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<S> <C>
2.1 Spin-off and Transfer Agreement (English translation) between
Lydall Gerhardi GmbH and Co. KG and Gerhardi Kunststofftechnik
GmbH dated September 29, 2000, effective September 30, 2000.
2.2 Purchase and Transfer Agreement (English translation) between
Lydall Gerhardi GmbH and Co. KG and the management buyout
group as set forth in the agreement, dated September 29, 2000,
effective September 30, 2000.
99.1 Press release dated October 2, 2000 titled "Lydall Completes
Sale of Chrome-Plating and Injection-Molding Operations in
Germany".
</TABLE>
6
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LYDALL, INC. AND SUBSIDIARIES
PRO FORMA CONSOLIDATED CONDENSED BALANCE SHEET AT JUNE 30, 2000
(IN THOUSANDS) (UNAUDITED)
<TABLE>
<CAPTION>
June 30, Pro Forma Adjustments June 30,
2000 ----------------------- 2000
ASSETS Historical Business (a) Other Pro Forma
---------- ----------- ------- ---------
<S> <C> <C> <C> <C>
CURRENT ASSETS:
Cash and cash equivalents .................... $ 1,686 $ 1,686
Accounts receivable, net ..................... 48,549 $ (6,607) 41,942
Inventories, net ............................. 22,327 22,327
Taxes receivable ............................. -- $9,954 (c) 9,954
Prepaid expenses ............................. 2,463 2,463
Assets held for sale ......................... 31,558 (26,378) 5,180
Deferred tax assets .......................... 2,558 2,558
---------- ----------- ------- ---------
Total current assets .................... 109,141 (32,985) 9,954 86,110
Property, plant and equipment, net ................ 80,737 (275) 80,462
Other assets, net ................................. 24,027 24,027
---------- ----------- ------- ---------
Total assets ................................. $ 213,905 $ (33,260) $9,954 $ 190,599
========== ============== ======= =========
LIABILITIES AND STOCKHOLDERS' EQUITY
CURRENT LIABILITIES:
Cash overdraft ............................... $ 2,799 $ 2,799
Current portion of long-term debt ............ 7,194 7,194
Accounts payable ............................. 21,015 $ (2,594) 18,421
Accrued taxes ................................ 1,097 1,097
Accrued payroll and other compensation ....... 6,236 2,435 8,671
Liabilities related to assets held for sale .. 7,585 (6,648) 937
Other accrued liabilities .................... 8,244 (114) $2,100(b) 10,230
---------- ----------- ------- ---------
Total current liabilities ............... 54,170 (6,921) 2,100 49,349
Long-term debt .................................... 18,302 18,302
Deferred tax liabilities .......................... 11,762 11,762
Other long-term liabilities ....................... 4,769 4,769
Commitments and contingencies
STOCKHOLDERS' EQUITY:
Preferred stock .............................. --
Common stock ................................. 2,191 2,191
Capital in excess of par value ............... 39,766 39,766
Retained earnings ............................ 150,077 (26,339) 7,854 131,592
Accumulated other comprehensive income ....... (5,490) (5,490)
---------- ----------- ------- ---------
186,544 (26,339) 7,854 168,059
Less: treasury stock, at cost ............... (61,642) (61,642)
---------- ----------- ------- ---------
Total stockholders' equity .............. 124,902 (26,339) 7,854 106,417
---------- ----------- ------- ---------
Total liabilities and stockholders' equity ... $ 213,905 $ (33,260) $ 9,954 $ 190,599
========= ============== ======= =========
</TABLE>
a) To eliminate the assets and liabilities of the Sold Operations included
in the Balance Sheet as of June 30, 2000.
b) To record an accrual for the estimated costs associated with the divestiture.
c) To adjust the income tax receivable as a result of the divestiture.
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LYDALL, INC. AND SUBSIDIARIES
PRO FORMA CONSOLIDATED CONDENSED STATEMENT OF NET INCOME
FOR THE YEAR ENDED DECEMBER 31, 1999
(IN THOUSANDS EXCEPT PER-SHARE DATA)
(UNAUDITED)
<TABLE>
<CAPTION>
DECEMBER 31, 1999 PRO FORMA DECEMBER 31, 1999
HISTORICAL ADJUSTMENTS (a) PRO FORMA
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<S> <C> <C> <C>
Net sales $ 318,505 ($52,214) $266,291
Cost of sales 242,985 (52,173) 190,812
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Gross margin 75,520 (41) 75,479
Selling, product development and administrative expenses 54,827 (4,067) 50,760
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Operating income 20,693 4,026 24,719
Other (income) expense:
Investment income (46) (46)
Interest expense 2,612 2,612
Foreign currency transaction gain (961) (961)
Other (134) (134)
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1,471 -- 1,471
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Income from continuing operations before income taxes 19,222 4,026 23,248
Income tax expense 6,270 1,409 7,679
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Income from continuing operations 12,952 2,617 15,569
Discontinued operations:
Loss from operations of the Wovens Segment, net of tax (347) -- (347)
Loss on disposal of the Wovens Segment, net of tax (1,830) -- (1,830)
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Loss from discontinued operations (2,177) -- (2,177)
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Net income $10,775 $2,617 $13,392
======= ======= =======
Basic earnings (loss) per common share:
Continuing operations $ .82 $.99
Discontinued operations (.14) (.14)
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Net income $ .68 $.85
Diluted earnings (loss) per common share:
Continuing operations $ .82 $.99
Discontinued operations (.14) (.14)
----- -----
Net income $ .68 $.85
Weighted average common stock outstanding 15,715 15,715
Weighted average common stock and equivalents outstanding 15,784 15,784
</TABLE>
a) To eliminate the pro forma results of the Sold Operations for the year
ended December 31, 1999.
8
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LYDALL, INC. AND SUBSIDIARIES
PRO FORMA CONSOLIDATED CONDENSED STATEMENT OF NET INCOME
FOR THE SIX MONTHS ENDED JUNE 30, 2000
(IN THOUSANDS EXCEPT PER-SHARE DATA)
(UNAUDITED)
<TABLE>
<CAPTION>
JUNE 30, 2000 PRO FORMA JUNE 30, 2000
HISTORICAL ADJUSTMENTS (a) PRO FORMA
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<S> <C> <C> <C>
Net sales $ 159,525 ($24,411) $135,114
Cost of sales 121,403 (23,570) 97,833
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Gross margin 38,122 (841) 37,281
Selling, product development and administrative expenses 28,208 (2,115) 26,093
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Operating income 9,914 1,274 11,188
Other (income) expense:
Investment income (158) (158)
Interest expense 839 839
Foreign currency transaction loss 5 5
Gain from sale of operations (6,065) (6,065)
Other (218) (218)
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(5,597) -- (5,597)
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Income from continuing operations before income taxes 15,511 1,274 16,785
Income tax expense 5,591 446 6,037
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Income from continuing operations 9,920 828 10,748
Discontinued operations:
Gain on disposal of the Wovens Segment, net of tax 71 -- 71
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Gain from discontinued operations 71 -- 71
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NET INCOME $ 9,991 $828 $10,819
========== ======= ========
Basic earnings per common share:
Continuing operations $ .63 $ .68
Discontinued operations - -
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Net income $ .63 $ .68
Diluted earnings per common share:
Continuing operations $ .63 $ .68
Discontinued operations - -
-------- --------
Net income $ .63 $ .68
Weighted average common stock outstanding 15,745 15,745
Weighted average common stock and equivalents 15,800 15,800
outstanding
</TABLE>
a) To eliminate the pro forma results of the Sold Operations for the six
months ended June 30, 2000.
9
