SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K/A
Amendment No. 1
to
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the
Securities Exchange Act of 1934
Date of Report: October 31, 1997 *
(Date of earliest event reported)
THE MANITOWOC COMPANY, INC.
(Exact name of registrant as specified in its charter)
Wisconsin 1-11978 39-0448110
----------------- -------------- -----------------
(State or other (Commission (IRS Employer
jurisdiction of File Number) Identification
incorporation) Number)
500 South 16th Street, Manitowoc, WI 54220
- -------------------------------------------------------------
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code (920-684-4410)
N/A 54220
-------------------------------------- ----------
(Former name or former address, if changed
since last report) (Zip Code)
* This Amendment is filed pursuant to the provisions of paragraph
(a)(4) of Item 7 of Form 8-K.
THE MANITOWOC COMPANY, INC.
--------------------------
Amendment No. 1
To
Current Report on Form 8-K
The undersigned registrant hereby amends the following items,
financial statements, exhibits or other portions of its Current Report
dated as of October 31, 1997 on Form 8-K (the "10/31/97 8-K") as set
forth in the following pages.
Pursuant to the provisions of paragraph (a)(4) of Item 7 of Form 8-K,
Item 7 of the 10/31/97 8-K is hereby amended to file the financial
statements and pro forma financial information required to be filed in
connection with the acquisition reported in Item 2 of the 10/31/97 8-
K, and the Exhibit Index incorporated by reference in Item 7(c) of the
10/31/97 8-K is hereby amended to reflect the filing herewith of an
appropriate accountants' consent with respect to the financial
statements described in Item 7(a) hereof.
Item 7. Financial Statements and Exhibits
- ----------------------------------------------
a) Financial Statements of Business Acquired:
The following audited consolidated financial statements of
SerVend International Inc. and Affiliate are filed herewith:
Report of Independent Accountants
Consolidated Balance Sheet as of October 31, 1997
Consolidated Statements of Income and Retained Earnings for
the Period January 1, 1997 through October 31, 1997
Consolidated Statement of Cash Flows for the Period
January 1, 1997 through October 31, 1997
Notes to Consolidated Financial Statements
b) Pro Forma Financial Information.
Unaudited pro forma consolidated condensed financial
statements of The Manitowoc Company, Inc., reflecting
the acquisition of SerVend International, Inc. and
Affiliate are filed herewith:
Introduction
Pro Forma Consolidated Condensed Statement of Operations
for the Year Ended December 31, 1996
Pro Forma Consolidated Condensed Balance Sheet as of
September 30, 1997
Pro Forma Consolidated Condensed Statement of Operations
for the Nine Months Ended September 30, 1997
c) Exhibits.
See the Exhibit Index following the Signature page of this
Report, which is incorporated herein by reference.
Report of Independent Accountants
Board of Directors
SerVend International, Inc.
We have audited the accompanying consolidated balance sheet of SerVend
International, Inc. and Affiliate as of October 31, 1997 and the
related consolidated statements of income and retained earnings and
cash flows for the period January 1, 1997 through October 31, 1997.
These financial statements are the responsibility of the Company's
management. Our responsibility is to express an opinion on these
consolidated financial statements 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 consolidated
financial statements are free of material misstatement. An audit
includes examining, on a test basis, evidence supporting the amounts
and disclosures in the consolidated financial statements. An audit
also includes assessing the accounting principles used and significant
estimates made by management, as well as evaluating the overall
consolidated financial statement presentation. We believe that our
audit provides a reasonable basis for our opinion.
In our opinion, the consolidated financial statements referred to
above present fairly, in all material respects, the financial position
of SerVend International, Inc. and Affiliate as of October 31, 1997,
and the results of their operations and their cash flows for the
period January 1, 1997 through October 31, 1997, in conformity with
generally accepted accounting principles.
Coopers & Lybrand L.L.P.
Milwaukee, Wisconsin
December 4, 1997
<TABLE>
<CAPTION>
SERVEND INTERNATIONAL, INC. AND AFFILIATE
CONSOLIDATED BALANCE SHEET
October 31, 1997
ASSETS
<S> <C>
Current assets:
Cash and cash equivalents $ 118,941
Accounts receivable, less allowance
for doubtful accounts of $496,145 7,239,305
Inventories 4,717,070
Other 95,273
-----------
Total current assets, net 12,170,589
Property, plant and equipment, net 6,774,448
Intangible assets, net 1,793,466
Other 17,843
-----------
$20,756,346
===========
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Short-term bank borrowings $ 2,749,193
Current portion of long-term debt 621,214
Accounts payable 1,810,416
Accrued salaries and bonuses 132,721
Accrued profit sharing 521,499
Current portion of accrued warranty reserve 361,593
Other 488,360
----------
Total current liabilities 6,684,996
----------
Long-term debt, net of current portion 6,588,409
Accrued warranty reserve, net of current portion 304,113
Minority interest in consolidated affiliate 561,879
Stockholders' equity:
Common stock, no par value; 1,000 shares
authorized, issued and outstanding 10,000
Paid-in capital 28,500
Retained earnings 6,578,449
----------
Total stockholders' equity 6,616,949
----------
$20,756,346
===========
The accompanying notes are an integral part of these consolidated
financial statements.
</TABLE>
<TABLE>
<CAPTION>
SERVEND INTERNATIONAL, INC. AND AFFILIATE
CONSOLIDATED STATEMENT OF INCOME AND RETAINED EARNINGS
For the period January 1, 1997 through October 31, 1997
<S> <C>
Net sales $41,512,271
Cost of goods sold 28,271,752
--------------
Gross profit 13,240,519
Selling expenses 3,178,493
General and administrative expenses 5,348,164
Litigation settlement payment 1,400,000
----------
Operating income 3,313,862
Interest expense (525,118)
Interest income 111,837
----------
Income before minority interest 2,900,581
Minority interest in earnings of
consolidated affiliate (329,841)
----------
Net income 2,570,740
Retained earnings, beginning of period 8,483,739
Dividends (4,476,030)
----------
Retained earnings, end of period $ 6,578,449
===========
Net income per common share $ 2,571
===========
The accompanying notes are an integral part of these consolidated
financial statements.
</TABLE>
<TABLE>
<CAPTION>
SERVEND INTERNATIONAL, INC. AND AFFILIATE
CONSOLIDATED STATEMENT OF CASH FLOWS
For the period January 1, 1997 through October 31, 1997
<S> <C>
Cash flows from operating activities:
Net income $2,570,740
Adjustments to reconcile net income to
net cash provided by operating activities:
Depreciation 872,893
Amortization 126,324
Minority interest in earnings of
consolidated affiliate 329,841
Provision for doubtful accounts 415,791
Loss on disposal of property,
plant and equipment 1,937
Changes in assets and liabilities:
Accounts receivable (2,230,371)
Inventories 72,848
Other current assets (5,448)
Other assets (12,096)
Accounts payable (114,138)
Accrued expenses 213,999
Warranty reserve 88,033
----------
Total adjustments (240,387)
----------
Net cash provided by operating activities 2,330,353
----------
Cash flows from investing activities:
Purchases of property, plant and equipment (1,981,655)
Proceeds from disposal of property
and equipment 45,793
----------
Net cash used in investing activities (1,935,862)
----------
Cash flows from financing activities:
Proceeds from short-term bank borrowings, net 2,749,193
Proceeds from long-term debt 15,550
Payments of long-term debt (1,214,385)
Dividends paid (4,476,030)
----------
Net cash used in financing activities (2,925,672)
----------
Net decrease in cash and cash equivalents (2,531,181)
Cash and cash equivalents, beginning of period 2,650,122
----------
Cash and cash equivalents, end of period $ 118,941
Supplemental disclosure of cash flow information:
Cash paid during the period for interest $ 525,118
==========
The accompanying notes are an integral part of these consolidated
financial statements.
</TABLE>
SERVEND INTERNATIONAL, INC. AND AFFILIATE
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
1. Description of Business:
SerVend International, Inc. ("SerVend") is primarily engaged in the
design, manufacture and sale of ice and beverage dispensers, beverage
dispenser valves and ice machines to beverage companies, national
accounts and food service equipment distributors throughout the world.
An affiliate, Fischer Enterprises, Ltd. (Fischer), a limited
partnership owned substantially by the stockholders of SerVend, owns
plant facilities and equipment which are leased to SerVend. SerVend
is the general partner of the limited partnership and has guaranteed
the industrial revenue bonds payable by Fischer. (See Note 7.)
2. Summary of Significant Accounting Policies:
a. Principles of Consolidation: The consolidated financial
statements include the accounts of SerVend and Fischer (the
"Company"). All significant intercompany accounts and
transactions have been eliminated. SerVend has a 4%
ownership interest in Fischer and other partners of Fischer
own 100% of SerVend. The financial position and results of
operations of Fischer are consolidated with SerVend due to
common ownership and the fact that Fischer operates
exclusively for the benefit of SerVend.
b. Inventories: Inventories are valued at the lower of cost
(standard cost, which approximates first-in, first-out) or
market.
c. Property, Plant and Equipment: Property, plant and
equipment is recorded at cost and is depreciated on the
basis of estimated useful lives of the assets, principally
using accelerated methods. Depreciation is provided
principally under the double declining balance method over
the estimated useful lives of the assets, which range (in
years) from 15-32 for improvements, 32 for building, 3-7 for
equipment, 5-7 for furniture and fixtures and 5 for
vehicles. Maintenance and repairs are expensed as incurred.
When properties are retired or otherwise disposed of, the
cost and related accumulated depreciation are removed from
the account with the resulting gain or loss reflected in
income.
d. Intangible Assets: Patents are amortized by the straight-
line method over the shorter of their estimated useful lives
or legal terms. Loan costs are amortized over the term of
the related loan by the straight-line method. Cost in excess
of net assets acquired is amortized by using the straight-
line method over 15 years. On an ongoing basis, management
evaluates the recoverability of the net carrying value of
intangible assets by reference to the anticipated future
cash flows.
e. Research and Development: Research and development costs
are charged to expense as incurred. Research and
development expenses were approximately $1,992,000 during
the period January 1, 1997 through October 31, 1997.
f. Statement of Cash Flows: Cash and cash equivalents include
highly liquid investments with an original maturity of three
months or less.
g. Concentration of Credit Risk: The Company maintains the
majority of its cash and cash equivalents with a financial
institution located in New Albany, Indiana. Generally, the
cash and cash equivalent aggregate balances are in excess of
the FDIC insurance level.
h. Revenue Recognition: The Company recognizes revenue from
product sales upon shipment to a customer.
i. Net Income per Common Share: Net income per common share is
based on weighted average shares outstanding during the
period.
j. Use of Estimates in the Preparation of Financial Statements:
The preparation of financial statements in conformity with
generally accepted accounting principles requires management
to make estimates and assumptions that affect the reported
amounts of assets and liabilities and disclosure of
contingent assets and liabilities at the dates of the
financial statements and the reported amounts of revenues
and expenses during the reporting periods. Actual results
could differ from those estimates.
3. Inventories:
<TABLE>
<CAPTION>
Inventories at October 31, 1997 consist of the following:
<S> <C>
Raw material $2,996,504
Work in process 242,606
Finished goods 967,553
Consigned units 510,407
----------
$4,717,070
==========
</TABLE>
4.Property, Plant and Equipment:
<TABLE>
<CAPTION>
Property, plant and equipment at October 31, 1997 consist of the
following:
<S> <C>
Land and improvements $ 693,809
Building 4,551,681
Equipment 6,561,362
Furniture and fixtures 789,888
Vehicles 52,410
----------
12,649,150
Less accumulated depreciation (5,874,702)
----------
$6,774,448
==========
</TABLE>
5.Intangible Assets:
<TABLE>
<CAPTION>
Intangible assets at October 31, 1997 consist of the following:
<S> <C>
Patents $ 57,683
Deferred loan costs 174,940
Cost in excess of net assets acquired 2,043,539
---------
2,276,162
Less accumulated amortization (482,696)
---------
$1,793,466
==========
</TABLE>
6. Short-Term Bank Borrowings:
For working capital purposes, the Company utilized a $4,750,000 line
of credit with PNC Bank which was terminated on November 1, 1997 and
paid in full. Interest is payable at the bank's prime rate less one-
half percent (8% at October 31, 1997). See Note 7 for long-term debt
covenants which also apply to short-term bank borrowings.
7. Long-Term Debt:
Long-term debt at October 31, 1997 consists of the following:
Indiana Economic Development Revenue Bonds, payable
in annual principal installments of $100,000 to
$250,000 through December 1, 2003, with a final
installment of $2,900,000 due December 1, 2004;
interest is payable monthly at a variable weekly
rate as computed by the remarketing advisor (3.8%
at October 31, 1997) $4,100,000
Indiana Department of Finance Authority Variable
Rate Demand Economic Development Revenue Bonds,
payable in annual principal installments of
$300,000 to $500,000 through November 1, 2001;
interest is payable monthly at a variable weekly
rate as computed by the remarketing advisor (3.8%
at October 31, 1997) 1,700,000
Note payable to PNC Bank Indiana with monthly
principal payments of $14,300 through September 1,
2001, plus interest at the bank's prime rate
(8.5% at October 31, 1997); amount was paid in
full on November 1, 1997 670,900
Note payable to former owner of acquired business
with monthly principal payments of $11,667
through September 30, 1999, plus interest at 8% 268,327
Notes payable to PNC Bank Indiana with monthly
payments of various amounts through September 5,
2000, including principal and interest at the
bank's prime rate (8.5% at October 31, 1997);
amount was paid in full on November 1, 1997 288,930
Note payable to former owner of acquired business
with one final payment, including interest imputed
at 8.0%, due October 1, 1998 81,466
Note payable to former owner of acquired business
with one payment of $100,000 due October 1, 1998,
no stated interest rate 100,000
----------
7,209,623
Less current portion (621,214)
----------
$6,588,409
==========
All land, building and equipment of the Company and Fischer are
pledged as collateral on the short-term bank borrowings (see Note 6)
and on all of the above long-term debt except for the notes payable to
former owner of acquired business, which is collateralized by accounts
receivable arising out of the sale of valves assembled by the acquired
business.
PNC Bank has issued letters of credit in favor of the holders of both
issuances of the economic development revenue bonds as additional
collateral for the bonds. Covenants related to the economic
development revenue bonds and the letters of credit require the
Company (as guarantor), among other things, to maintain tangible net
worth of not less than $5 million, limits the ratio of total
liabilities to tangible net worth to 3:1, and require the Company to
maintain a debt coverage ratio of not less than 1.5 to 1.0.
The value of all debt approximates its fair market value since the
stated rates approximate market or are at variable rates which reprice
frequently based upon changes in market rates.
<TABLE>
<CAPTION>
Scheduled maturities of long-term debt without regard to the amounts
paid in full in November, 1997, are as follows:
<S> <C>
1998 $ 621,214
1999 951,475
2000 880,834
2001 706,100
2002 700,000
Thereafter 3,350,000
----------
$7,209,623
==========
</TABLE>
8. Income Taxes:
SerVend has elected to be taxed as an S-Corp. and, as such, taxable
income or tax losses are included in the federal and state income tax
returns of its stockholders. Fischer is a partnership and, as such,
income or loss of the partnership is included in the tax returns of
its partners. Accordingly, no accrual for income taxes has been made
in the accompanying consolidated financial statements.
9. Stock Redemption Agreement:
SerVend and the stockholders of SerVend are parties to a Stock
Redemption Agreement (the "Agreement") which gives SerVend the
option to purchase a withdrawing stockholders' common stock. In the
event SerVend does not exercise this option, other stockholders have
the option to purchase this stock. If neither SerVend nor the other
stockholders exercise these options, the stock may be sold to another
purchaser but not at a price or on terms more favorable than those
offered to SerVend and the other stockholders. Upon the death of a
stockholder, SerVend must purchase all of the common stock of the
deceased stockholder at a price and on the terms as specified in the
Agreement.
10. Profit-Sharing Plans:
SerVend maintains a profit-sharing plan for the benefit of all
employees under which it may contribute annually an amount determined
by the Board of Directors. SerVend contributed approximately $523,000
to the profit sharing portion of the plan during the period ended
October 31, 1997. The plan also includes participant directed
investments and 401(k) features with a discretionary company
contribution to match part of the participant contributions. The
401(k) company matching contribution was approximately $79,000 during
the period ended October 31, 1997.
11. Major Customers:
One customer accounted for 35% of total sales during the period
January 1, 1997 through October 31, 1997. This customer accounted for
21% of accounts receivable at October 31, 1997.
12. Litigation:
In 1996, SerVend and Fischer were named defendants in a patent
infringement action, brought by a competitor which alleged the
Company's ice/beverage dispensers infringed upon their patent. The
competitor claimed substantial lost profits and royalty damages. On
August 22, 1997, the action was settled for $1,400,000.
In addition, the Company is a party to other legal proceedings in the
ordinary course of business. In the opinion of
management, the ultimate resolution of such other legal matters will
not have a material adverse effect on the Company's consolidated
financial statements.
13. Export Sales:
<TABLE>
<CAPTION>
Export sales by geographical region for the period ended October 31,
1997 approximated:
<S> <C>
Central and South America $ 2,875,000
Europe, Africa and Middle East 2,685,000
Far East 3,322,000
-----------
$ 8,882,000
===========
</TABLE>
The Company's export sales are denominated in U.S. currency.
14. Subsequent Events:
On November 1, 1997, The Manitowoc Company, Inc. (Manitowoc) purchased
substantially all of the net business assets of SerVend and Fischer.
As a result of the purchase, the short-term bank borrowings and
certain long-term bank debt was paid in full by Manitowoc. The
remaining long-term debt was assumed by Manitowoc. (See Notes 6 and 7).
During November 1997, the Company decided to terminate its
relationship with certain product distributors. In accordance with
the distributor agreements, the distributors have the right to return
certain products purchased within the last year if the distributor
agreement is terminated. Total inventories at the distributors at
October 31, 1997 amounted to approximately $700,000. Management does
not believe it will incur a significant loss on the possible return of
these inventories, however, $65,000 has been accrued at October 31,
1997 for this contingency.
THE MANITOWOC COMPANY, INC.
ProForma Consolidated Condensed Financial Statements
(Unaudited)
On October 31, 1997, The Manitowoc Company, Inc. ( Manitowoc
acquired certain net business assets of SerVend International, Inc.
and Affiliate for $71.7 million plus direct costs of the acquisition
of $1,419,000. The acquisition was financed through Manitowoc's
existing credit facilities.
SerVend is one of the world's largest manufacturers of ice/beverage
dispensers and dispensing valves for the soft drink industry. Its
customers include many of the major quick-service restaurant chains,
convenience stores, and soft-drink bottlers in the nation. SerVend is
headquartered in Sellersburg, Indiana. It has one manufacturing
facility located in Sellersburg and another in Portland, Oregon, and
employs about 300 persons.
SerVend's products are marketed under the SerVend and Flomatic brand
names. It is Manitowoc's intention to preserve these brand
identities, as well as to keep SerVend's businesses operating
independently under the direction of the present management. The
acquisition is expected to complement Manitowoc's existing food
service product line.
The unaudited pro forma consolidated condensed financial statements
are derived from and should be read in conjunction with the audited
historical financial statements of Manitowoc as of and for the year
ended December 31, 1996, and the historical financial statements of
SerVend for the period ended October 31, 1997, as included herein, and
the year ended December 31, 1996.
The following unaudited pro forma consolidated condensed financial
statements have been compiled as if Manitowoc acquired substantially
all of the net business assets of SerVend on the date of the balance
sheet or as of the beginning of the period for purposes of the
statements of operations. The pro forma adjustments are based upon
currently available information and upon certain assumptions.
The unaudited pro forma consolidated condensed financial statements
are provided for informational purpose only and are not necessarily
indicative of the results of future operations or the future financial
position of Manitowoc or the actual results that would have been
achieved had the acquisition of SerVend been consummated as of the
beginning of the periods presented.
<TABLE>
<CAPTION>
THE MANITOWOC COMPANY, INC.
Pro Forma Consolidated Condensed Statement of Operations
Year ended December 31, 1996
(Unaudited)
(In thousands, except per-share data)
SerVend
The Manitowoc International, Inc. Pro Forma Pro Forma
Company, Inc. and Affiliate Adjustments Results
------------- --------------- ----------- ----------
<S> <C> <C> <C> <C> <C>
Net Sales $500,465 $ 40,233 $ -- $540,698
Costs and Expenses:
Cost of goods sold 365,824 28,236 -- 394,060
Engineering, selling and
administrative expenses 79,551 8,716 -- 88,267
Plant relocation expenses 1,200 -- -- 1,200
Amortization 3,000 128 (a) 1,454 4,582
-------- -------- -------- --------
Total 449,575 37,080 1,454 488,109
-------- -------- -------- --------
Earnings From Operations 50,890 3,153 (1,454) 52,589
Interest and dividend income 394 95 -- 489
Interest expense (9,097) (553) (b) (3,559) (13,209)
Other income (expense) 319 (281) -- 38
-------- -------- -------- --------
Total (8,384) (739) (3,559) (12,682)
-------- -------- -------- --------
Earnings before taxes on income 42,506 2,414 (5,013) 39,907
Provision for taxes on income 16,863 -- (c) (900) 15,963
-------- -------- -------- --------
NET EARNINGS $ 25,643 $ 2,414 $ (4,113) $ 23,944
======== ======== ======== ========
NET EARNINGS PER SHARE (k) $ 1.49 $ 1.39
======== =======
See accompanying notes to unaudited proforma consolidated condensed
financial statements.
</TABLE>
<TABLE>
<CAPTION>
THE MANITOWOC COMPANY, INC.
Pro Forma Consolidated Condensed Balance Sheet
September 30, 1997
(Unaudited)
(In thousands)
SerVend
The Manitowoc International, Inc. Pro Forma Pro Forma
Company, Inc. and Affiliate Adjustments Results
---------- -------------- ---------- ---------
<S> <C> <C> <C> <C> <C>
ASSETS:
Current assets:
Cash and cash equivalents $ 13,144 $ 1,442 (d) $ (10,300) $ 4,286
Marketable securities 1,811 -- -- 1,811
Accounts receivable 55,294 7,342 -- 62,636
Inventories 56,617 5,425 -- 62,042
Prepaid expenses and other 1,209 90 -- 1,299
Future income tax benefits 11,954 -- -- 11,954
--------- --------- --------- ---------
Total current assets 140,029 14,299 (10,300) 144,028
Goodwill 89,635 1,668 (e) 55,153 146,456
Other non-current assets 13,641 157 (e) (157) 13,641
Property, plant and equipment-net 87,500 6,836 (f) (258) 94,078
--------- --------- --------- ---------
TOTAL ASSETS $330,805 $ 22,960 $ 44,438 $398,203
========= ========= ========= =========
LIABILITIES & STOCKHOLDERS' EQUITY
Current liabilities:
Current portion-long-term debt $ 14,016 $ 1,100 (d) $ (700) $ 14,416
Short-term borrowings -- 3,351 (d) 53,649 57,000
Accounts payable and
accrued expenses 89,523 3,414 -- 92,937
Product warranties 10,427 296 -- 10,723
-------- -------- -------- --------
Total current liabilities 113,966 8,161 52,949 175,076
Non-current liabilities:
Product warranties 4,287 359 -- 4,646
Deferred employee expenses 19,889 -- -- 19,889
Long-term debt, less
current portion 65,248 6,627 (d) (1,227) 70,648
Other non-current liabilities 5,223 529 -- 5,752
-------- -------- -------- --------
Total non-current liabilities 94,647 7,515 (1,227) 100,935
Stockholders' equity:
Common stock 245 10 (g) (10) 245
Additional paid-in capital 30,979 28 (g) (28) 30,979
Cumulative foreign currency
translation adjustment (66) -- -- (66)
Retained earnings 172,536 7,246 (g) (7,246) 172,536
Treasury stock at cost (81,502) -- -- (81,502)
-------- -------- -------- --------
Total stockholders' equity 122,192 7,284 (7,284) 122,192
-------- -------- -------- --------
TOTAL $330,805 $ 22,960 $ 44,438 $398,203
======== ======== ======== ========
See accompanying notes to unaudited proforma consolidated condensed
financial statements.
</TABLE>
<TABLE>
<CAPTION>
THE MANITOWOC COMPANY, INC.
Pro Forma Consolidated Condensed Statement of Operations
Nine months ended September 30, 1997
(Unaudited)
(In thousands, except per-share data)
SerVend
The Manitowoc International, Inc. Pro Forma Pro Forma
Company, Inc. and Affiliate Adjustments Results
-------------- ----------- ----------- --------
<S> <C> <C> <C> <C> <C>
Net Sales $394,961 $ 37,592 $ -- $432,553
Costs and Expenses:
Cost of goods sold 283,770 25,121 -- 308,891
Engineering, selling and
administrative expenses 60,301 9,021 -- 69,322
Amortization 2,340 113 (h) 1,073 3,526
------- ------- ------- -------
Total 346,411 34,255 1,073 381,739
------- ------- ------- -------
Earnings From Operations 48,550 3,337 (1,073) 50,814
Interest and dividend income 226 -- -- 226
Interest expense (4,244) (335) (i) (2,582) (7,161)
------- -------- ------- -------
Other expense (202) (297) -- (499)
------- ------- ------- -------
Total (4,220) (632) (2,582) (7,434)
Earnings before taxes on income 44,330 2,705 (3,655) 43,380
Provision for taxes on income 16,402 -- (j) (351) 16,051
-------- -------- -------- --------
NET EARNINGS $ 27,928 $ 2,705 $ (3,304) $ 27,329
======== ======== ======== ========
NET EARNINGS PER SHARE (k) $ 1.62 $ 1.58
======= =======
See accompanying notes to unaudited proforma consolidated condensed
financial statements.
</TABLE>
THE MANITOWOC COMPANY, INC.
Notes to Unaudited Pro Forma Consolidated Condensed Financial
Statements
I. Basis of Presentation
The pro forma financial statements give effect to the
acquisition.
The unaudited pro forma consolidated condensed financial
statements have been compiled as if Manitowoc acquired certain
net business assets of SerVend on the date of the balance sheet
or as of the beginning of the period for purposes of the
statements of operations. The pro forma adjustments are based
upon currently available information and upon certain
assumptions.
The acquisition has been accounted for in the unaudited pro forma
consolidated condensed financial statements using the purchase
method. Pro forma adjustments are required to adjust the
historical financial statements of SerVend and Manitowoc to
reflect the use of cash and the net addition of debt used to
finance the acquisition, additional interest expense associated
with such debt, amortization of intangible assets resulting from
application of the purchase method of accounting, the elimination
of certain assets not acquired, and the decrease in income tax
expense resulting from the loss of S-Corp. and Partnership income
tax status, net of lower earnings due to amortization and
interest expense.
II. Pro Forma Adjustments
a) To amortize the purchase accounting fair value adjustments
related to intangible assets acquired, as if the acquisition
occurred on January 1, 1996.
b) To increase interest expense by applying Manitowoc's 1996
borrowing rate of 6.6% to the increase in short-term
borrowings acquired to finance the acquisition.
c) To record the income tax benefit resulting from the loss of S-
Corp. and partnership income tax status, net of lower earnings
due to amortization and interest expense.
d) To record cash and short-term debt used to finance the
acquisition, net of certain SerVend debt paid in full as
required by the purchase agreement.
e) Gives effect to the purchase accounting fair value adjustments
for intangible assets, as if the acquisition occurred on
September 30, 1997.
f) To exclude certain assets not purchased by Manitowoc in
accordance with the purchase agreement.
g) To eliminate SerVend's stockholders' equity.
h) To amortize the purchase accounting fair value adjustments to
intangible assets acquired, as if the acquisition occurred on
January 1, 1997.
i) To increase interest expense by applying Manitowoc's 1997
borrowing rate of 6.2% to short-term borrowings acquired to
finance the acquisition.
j) To record the income tax benefit resulting from the loss of S-
Corp. and partnership income tax status, net of lower earnings
due to amortization and interest expense.
k) Earnings per share is calculated using Manitowoc's historical
weighted average shares outstanding of 17,267,035 shares for
the year ended December 31, 1996 and the period ended
September 30, 1997 (adjusted to reflect the three-for-two
common stock split on June 30, 1997).
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.
DATE: January 12, 1998 THE MANITOWOC COMPANY, INC.
(Registrant)
By: /s/ Robert R. Friedl
-----------------------------
Robert R. Friedl,
Senior Vice President and
Chief Financial Officer
THE MANITOWOC COMPANY, INC.
EXHIBIT INDEX
TO
FORM 8-K CURRENT REPORT
Dated October 31, 1997
As amended by Amendment No. 1 thereto on Form 8-K/A ("Amendment No. 1")
Exhibit Filed
No. Description Herewith
-------- -------------- --------
2.1 * Purchase and Sale Agreement, dated
as of October 1, 1997, for the
acquisition of SerVend International,
Inc. by The Manitowoc Company, Inc. X (1)
4.1 * Credit Agreement, dated as of October
31, 1997, among The Manitowoc
Company, Inc., as Borrower, certain
subsidiaries from time to time parties
thereto, as Guarantors, the several
Lenders, and NationsBank, N.A.
as Agent. X (1)
20.1 Press Release dated October 31, 1997
regarding completing the acquisition
of SerVend International, Inc. X (1)
23 Consent of Coopers & Lybrand L.L.P. X (2)
* Pursuant to Item 601(b) (2) of Regulation S-K, the Registrant
agrees to furnish to the Securities and Exchange Commission upon
request a copy of any unfiled exhibits or schedules to such document.
(1) Filed with original 10/31/97 8-K.
(2) Filed with Amendment No. 1.
EXHIBIT 23
CONSENT OF INDEPENDENT ACCOUNTANTS
We consent to the incorporation by reference in the registration statements of
The Manitowoc Company, Inc. on Forms S-8 (File Nos. 33-65316 and 33-48665) of
our report dated December 4, 1997, on our audit of the consolidated financial
statements of SerVend International, Inc. and Affiliate as of October 31, 1997
and for the period January 1, 1997 through October 31, 1997, which report is
included in this Report on Form 8-K/A.
Milwaukee, Wisconsin /s/ Coopers & Lybrand L.L.P.
January 09, 1998 ---------------------------
COOPERS & LYBRAND L.L.P.
