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SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 10-Q/A
(X) QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF
THE SECURITIES EXCHANGE ACT OF 1934
For the quarter ended June 30, 1999
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or
( ) TRANSITION REPORT PURSUANT TO SECTION 13 OR 15 (d) OF
THE SECURITIES EXCHANGE ACT OF 1934
For the transition period from to
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Commission File No. 1 - 1997
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THE MONARCH MACHINE TOOL COMPANY
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(Exact name of registrant as specified in its charter)
Ohio 34-43407810
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(State or other jurisdiction (I.R.S. Employer
of incorporation or organization) Identification No.)
2600 Kettering Tower, Dayton, Ohio 45423
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(Address of principal executive offices, zip code)
(937) 910-9300
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(Registrant's telephone number including area code)
N. A.
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(Former name, former address and former fiscal year,
if changed since last report)
Indicate by check mark whether the registrant (1) has filed all reports required
to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during
the preceding 12 months (or for such shorter period that the registrant was
required to file such reports) and (2) has been subject to such filing
requirements for the past 90 days. Yes X No
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The number of common shares outstanding as of July 29, 1999 was 4,282,817.
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THE MONARCH MACHINE TOOL COMPANY AND SUBSIDIARIES
NOTES TO CONDENSED FINANCIAL STATEMENTS
TWO QUARTERS ENDED JUNE 30, 1999 AND
1998 (all amounts in thousands except shares and per share amounts)
Included in the coil processing segment results for the two quarters
ended June 30, 1999 were sales of $10,295 and operating earnings of
$396 from GFG Corporation which was acquired by the Company on December
31, 1998.
6. ACQUISITIONS
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On June 30, 1999, the Company acquired Precision Industrial Corp. and
Subsidiaries (parent of Herr-Voss) ("Precision"). The acquisition has
been accounted for under the purchase method and, accordingly, the
assets and liabilities of Precision have been included in the
consolidated balance sheet at June 30, 1999.
The purchase price paid by the Company for all of the outstanding
capital stock of Precision consisted of $39,295 cash paid to seller,
$25,340 of cash used to pay seller bank debt and accrued interest, a
$15,000 seller subordinated note, an $840 Junior Subordinated Note
assumed by Precision and 500,000 shares of the Company's Common Stock
(valued at $6.59 a share). The aggregate purchase price was $82,930.
Fees and expenses paid in connection with the purchase totaled
approximately $832 and are being amortized over 25 years using the
straight-line method.
The excess purchase price over the fair value of identifiable net
assets acquired has been allocated to goodwill. Goodwill of $57,733
recorded in the transaction will be amortized over 25 years using the
straight-line method. The purchase price allocation has been completed
on a preliminary basis, subject to adjustments should new or additional
facts become known.
The following unaudited proforma information presents a summary of
consolidated results of operations of the Company as if the acquisition
of Precision had occurred at the beginning of each period presented.
<TABLE>
<CAPTION>
Two Quarters Ended June 30
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1999 1998
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(Unaudited)
<S> <C> <C>
Net sales $93,158 $81,882
Earnings before taxes $ 2,248 $ 1,257
Income taxes $ 1,224 $ 773
Net income $ 1,024 $ 484
Earnings per share (basic and diluted) $ .24 $ .11
</TABLE>
These unaudited proforma results have been prepared for comparative
purposes only and include certain adjustments such as elimination of
Precision management costs not expected to be incurred after the
acquisition, additional depreciation as a result of the step-up in the
basis of fixed assets, additional amortization expense as a result of
goodwill and an increase in interest expense as a result of
acquisition debt. They do not purport to be indicative of the results
of operations which would have resulted had the combination occurred
at the beginning of each period presented or of future results of
operations of the combined entities. The disproportionate tax provision
results from the nondeductibility of goodwill.
7. ENVIRONMENTAL LIABILITY
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As discussed in the Company's 1998 10K filing, in 1998, a Consent
Decree was entered into among the EPA, several other potentially
responsible parties ("PRP's") and a group of ten other companies
("Defendants") related to the costs of remediation of the Rosen Site, a
former scrap yard in Cortland, New York. During April 1999, the Consent
Decree was approved by the Department of Justice and in June 1999
formally approved by the U.S. District Court in New York. Based on the
fact that this Consent Decree substantially reduced the Company's
future liability for this matter, the accrual recorded at December 31,
1998 was reduced by $1,100. The reduction in the accrual is recorded in
other income, net. The Company believes that the remaining amount
accrued of $200, is adequate to cover its share of costs which may be
incurred in this matter.
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SIGNATURE
Pursuant to the requirements of the Securities Exchange Act of 1934,
the registrant has duly caused this quarterly report to be signed on
its behalf by the undersigned thereunto duly authorized.
THE MONARCH MACHINE TOOL COMPANY
(Registrant)
DATE: August 17, 1999 By s/Karl A. Frydryk
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Karl A. Frydryk
Vice President & Chief Financial Officer
(principal financial officer)
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