<PAGE>
================================================================================
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
Form 8-K/A
AMENDMENT NUMBER 1
Current Report Pursuant to Section 13 or 15(d) of
The Securities Act of 1934
Date of Report (Date of earliest event reported) June 30, 1995
ALPHA TECHNOLOGIES GROUP, INC.
------------------------------
(Exact name of registrant as specified in its charter)
<TABLE>
<S> <C> <C>
Delaware 0-14365 76-0079338
-------------------- ----------- ------------------
(State or other (Commission (I.R.S. Employer
jurisdiction of File Number) Identification No.)
incorporation)
</TABLE>
333 Cypress Run, Suite 360 Houston, TX 77094
------------------------------------------ ----------
Address of principal executive offices (Zip Code)
Registrant's telephone number, including area code 713-647-9941
================================================================================
<PAGE>
This report is being filed to amend the report filed by Registrant on Form
8-K dated July 14, 1995 which reported that on June 30, 1995, Wakefield
Engineering, Inc. (Wakefield), a wholly-owned subsidiary of the Registrant,
through its then newly formed wholly-owned subsidiary, Specialty Acquisition
Corp. ("Specialty Acquisition"), acquired substantially all of the assets and
business and assumed certain liabilities of Specialty Extrusion, LTD ("Specialty
Extrusion"). The name of Specialty Acquisition was subsequently changed to
Specialty Extrusion Corp.
Per Regulation SB, since none of the conditions in the definitions of
significant subsidiary exceeds 20% and audited financial statements of the
acquired business were not available, an automatic waiver of the required
audited financial statements was granted. The financial statements contained
herein were prepared using (i) internal records of Specialty Extrusion and (ii)
a compilation prepared by an outside public accounting firm.
The following unaudited pro forma balance sheet of the Registrant as of
April 30, 1995 and the unaudited pro forma income statement for the six months
ended April 30, 1995 and the year ended October 31, 1994 give effect to the
acquisition of Specialty Extrusion including pro forma adjustments.
Pro forma adjustments relating to the statements of income were computed
assuming the transaction was consummated on November 1, 1993, and include
adjustments which give effect to events that are directly attributable to the
transaction and expected to have a continuing impact on the Registrant. Pro
forma adjustments related to the pro forma balance sheet were computed assuming
the transaction was consummated on April 30, 1995, and include adjustments which
give effect to events that are directly attributable to the transaction and
factually supportable regardless of whether they have a continuing impact or are
nonrecurring.
These unaudited pro forma statements are based on historical financial
information of Specialty Extrusion and the Registrant and do not necessarily
represent the financial condition or results of operations which would have
occurred if the acquisition had taken place according to the assumptions
described above, nor are they necessarily indicative of future results of
operations.
<PAGE>
Item 7. Financial Statements, Pro Forma Financial Information and Exhibits.
(a) Unaudited financial statements of the business acquired.
Exhibit 99.1 Balance Sheets of Specialty Extrusion as of
December 31, 1994 and March 31, 1995.
Statements of Income of Specialty Extrusion for the
year ended December 31, 1994 and for the three months
ended March 31, 1995.
Statements of Stockholders' Equity of Specialty Extrusion
for the year ended December 31, 1994 and for the three
months ended March 31, 1995.
Statements of Cash Flows of Specialty Extrusion for the
year ended December 31, 1994 and for the three months
ended March 31, 1995.
Notes to Financial Statements of Specialty Extrusion.
(b) Unaudited financial statements.
Exhibit 99.2 Pro forma balance sheet of Registrant as of
April 30, 1995.
Pro forma income statement of the Registrant for the
six months ended April 30, 1995.
Notes to pro forma financial statements of Registrant.
(c) Exhibits
See Item 7(a) and 7(b) for a description of the exhibits.
<PAGE>
SIGNATURE
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.
Alpha Technologies Group, Inc.
Date: September 12, 1995 By: /S/ Johnny J. Blanchard
------------------ ----------------------------
Johnny J. Blanchard
Chief Financial Officer
<PAGE>
INDEX TO EXHIBIT
<TABLE>
<CAPTION>
Sequentially
Exhibit Numbered
Number Description of Exhibit Page
------- ---------------------- -------------
<C> <S> <C>
99.1 Unaudited financial statements
of the business acquired.
99.2 Unaudited pro forma financial
statements.
</TABLE>
<PAGE>
EXHIBIT 99.1
SPECIALTY EXTRUSTION LTD.
BALANCE SHEETS
(In Thousands)
(Unaudited)
<TABLE>
<CAPTION>
March 31, December 31,
1995 1994
--------- ------------
ASSETS
<S> <C> <C>
CURRENT ASSETS:
Cash $ 6 $ 8
Accounts receivable, net of allowance for doubtful accounts
of $45 1,138 978
Inventory, net 189 195
Other current assets 14 32
------- -------
Total current assets 1,347 1,213
PROPERTY AND EQUIPMENT 1,773 1,770
Less- Accumulated depreciation (1,660) (1,654)
------- -------
Net property and equipment 113 116
OTHER ASSETS 5 5
------- -------
Total assets $ 1,465 $ 1,334
======= =======
LIABILITIES AND STOCKHOLDER'S EQUITY
CURRENT LIABILITIES:
Accounts payable 674 611
Accrued liabilities 21 83
Current portion of long-term debt 420 330
------- -------
Total current liabilities 1,115 1,024
LONG-TERM DEBT 652 669
------- -------
Total liabilities 1,767 1,693
COMMITMENTS AND CONTINGENCIES
STOCKHOLDERS' EQUITY:
Common stock, $1 par value, 3,000 shares
issued and outstanding 3 3
Additional paid-in capital 196 196
Retained earnings (deficit) (501) (558)
------- -------
Total stockholders' equity (302) (359)
------- -------
Total liabilities and stockholders' equity $ 1,465 $ 1,334
======= =======
</TABLE>
The accompanying notes are an integral part of these financial statements.
<PAGE>
SPECIALTY EXTRUSTION LTD.
STATEMENTS OF INCOME
FOR THE THREE MONTHS ENDED MARCH 31, 1995
AND FOR THE YEAR ENDED DECEMBER 31, 1994
(In Thousands)
(Unaudited)
<TABLE>
<CAPTION>
Three Months
Ended
March 31, December 31,
1995 1994
------------ ------------
<S> <C> <C>
SALES $1,542 $5,592
COST OF SALES 1,353 4,520
------ ------
Gross profit 189 1,072
EXPENSES:
Selling, general and administrative 102 469
OTHER INCOME (EXPENSE) 1 (13)
INTEREST EXPENSE (30) (143)
------ ------
NET INCOME BEFORE TAXES 58 447
INCOME TAX PROVISION 1 1
------ ------
Net income $ 57 $ 446
====== ======
</TABLE>
The accompanying notes are an integral part of these financial statements.
<PAGE>
SPECIALTY EXTRUSTION LTD.
STATEMENTS OF STOCKHOLDERS' EQUITY
FOR THE THREE MONTHS ENDED MARCH 31, 1995
AND FOR THE YEAR ENDED DECEMBER 31, 1994
(In Thousands)
<TABLE>
<CAPTION>
Additional
Common Paid-In Retained
Stock Capital Earnings Total Equity
------ ---------- -------- ------------
<S> <C> <C> <C> <C>
BALANCE, December 31, 1993 $3 $196 ($1,004) ($805)
NET INCOME - - 446 446
BALANCE, December 31, 1994 $3 $196 ($558) ($359)
NET INCOME - - 57 57
--- ----- ------- -----
BALANCE, March 31, 1995 $3 $196 ($501) ($302)
=== ===== ======= =====
</TABLE>
The accompanying notes are an integral part of these financial statements.
<PAGE>
SPECIALTY EXTRUSTION LTD.
STATEMENTS OF CASH FLOWS
FOR THE THREE MONTHS ENDED MARCH 31, 1995
AND FOR THE YEAR ENDED DECEMBER 31, 1994
(In Thousands)
(Unaudited)
<TABLE>
<CAPTION>
Three Months
Ended
March 31, December 31,
1995 1994
------------ ------------
<S> <C> <C>
CASH FLOWS FROM OPERATING ACTIVITIES:
Net income $ 57 $ 446
Adjustments to reconcile net income to net cash
provided by operating activities-
Depreciation 6 37
Changes in operating assets and liabilities-
(Increase) in accounts receivable (160) (344)
(Increase) decrease in inventory 6 (128)
(Increase) decrease other assets 18 (16)
Increase in accounts payable 63 128
Increase (decrease) in accrued expenses (62) 70
------ ------
Net cash provided (used) by operating activities (72) 193
------ ------
CASH FLOWS FROM INVESTING ACTIVITIES:
Purchase of property and equipment (3) (60)
------ ------
Net cash used in investing activities (3) (60)
------ ------
CASH FLOWS FROM FINANCTING ACTIVITIES:
Proceeds from debt 75 54
Payments on debt (2) (107)
------ ------
Net cash provided (used) in financing activities 73 (53)
------ ------
NET INCREASE (DECREASE) IN CASH (2) 80
CASH, beginning of year 8 (72)
------ ------
CASH, end of year $ 6 $ 8
====== ======
</TABLE>
The accompanying notes are an integral part of these financial statements.
<PAGE>
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
------------------------------------------
DECEMBER 31, 1994
-----------------
1. SUMMARY OF SIGNIFICANT
ACCOUNTING POLICIES:
--------------------
Nature of Business
------------------
Specialty Extrusion Ltd. ("the Company") extrudes aluminum through
dies to form customer specified parts.
Accounting Method
-----------------
Assets, liabilities, revenues and expenses are recorded under the accrual method
of accounting.
Revenue Recognition
-------------------
Revenue from product sales is generally recognized upon shipment to the
customer.
Inventories
-----------
Inventories are stated at the lower of cost or market. Cost is determined using
the first-in, first-out method.
Property and Equipment
----------------------
Property and equipment are stated at cost less accumulated depreciation.
Depreciation is calculated using the straight-line and accelerated methods over
the useful lives of the assets, ranging from five to ten years.
Income Taxes
------------
The Company, with the consent of its shareholders, has elected under the
Internal Revenue Code to be taxed as an S corporation. In lieu of corporation
income taxes, the shareholders of an S corporation are taxed on their
proportionate share of the Companys taxable income. Therefore, no provision or
liability for federal income taxes has been included in these financial
statements. The provision for income taxes shown in these financial statements
is for the 1.5% California franchise tax on California taxable income.
Cash Flows
----------
The Company considers all short-term debt securities with maturities of less
than 90 days to be cash equivalents.
<PAGE>
2. INVENTORIES:
-----------
Inventories consist of raw materials amounting to $195,000 as of December 31,
1994.
3. PROPERTY AND EQUIPMENT:
-----------------------
Property and equipment consist of the following as of December 31, 1994 (in
thousands):
<TABLE>
<S> <C>
Machinery and equipment $1,534
Automobiles and trucks 209
Furniture and fixtures 27
------
$1,770
Less- Accumulated depreciation 1,654
------
$116
====
</TABLE>
4. RELATED-PARTY TRANSACTION:
--------------------------
The officers of the Company own the aluminum extrusion press and lease it to the
Company. The lease, dated July 1, 1988, requires payments to each officer of
$3,243 monthly. The accrued unpaid rental for the twelve months ended December
31, 1994 was $33,440.
The extrusion press is the largest piece of equipment used by the Company and is
an integral part of the extrusion process. Termination of the lease would
prevent the Company from continuing to operate.
5. LONG-TERM DEBT:
---------------
On July 1, 1994, the Company obtained revised bank financing from City National
Bank (CNB). Long-term debt consisted of the following on December 31, 1994 (in
thousands):
<TABLE>
<S> <C>
Term note - In the amount of $261,333 with payments $236
of $4,000 per month plus interest at prime plus
3 1/2%. This loan is secured by company
equipment and personal property of the officers.
</TABLE>
<PAGE>
5. LONG-TERM DEBT - (Continued):
-----------------------------
<TABLE>
<S> <C>
Accounts receivable revolving loan - Maximum loan
amount is $520,000 secured by accounts receivables 272
with annual renewals and monthly interest payments
at prime plus 3 1/2%.
On June 27, 1994, the Company purchased two 54
automobiles and obtained financing from GMAC.
The original amount of each loan was $29,074 with
interest of 9.75%. The loans are due on July 11, 1999
and are secured by the automobiles.
On April 1, 1984, the Company received a loan from an 237
officer of the Company in the amount of $236,595
bearing interest at the rate of 15%. Payments are for
interest only.
On December 31, 1993, the Company received a loan from 100
an officer of the Company in the amount of $100,000
bearing interest at the rate of 10%. Payments are for
interest only.
On December 31, 1993, the Company received a loan from 100
an officer of the Company in the amount of $100,000
bearing interest at the rate of 10%. Payments are for
interest only.
----
999
Less current portion 330
----
$669
====
</TABLE>
The two bank notes are subject to a continuing guaranty by each officer. As of
December 31, 1994, the unpaid interest on officer loans was $22,858. This
accrued expense has been included in the total interest expense amount in the
income statement.
<PAGE>
5. LONG-TERM DEBT - (Continued):
-----------------------------
Aggregate payments of long-term debt outstanding as of December 31, 1994 for the
next five years are summarized below:
<TABLE>
<CAPTION>
Year Ended
December 31, Amount
------------ --------------
(In Thousands)
<S> <C>
1995 $ 60
1996 59
1997 60
1998 61
1999 50
</TABLE>
6. COMMITMENTS AND CONTINGENCIES:
------------------------------
The Company has operating lease commitments for certain equipment and its
facilities. Minimum lease payments under noncancellable leases on December 31,
1994 are as follows:
<TABLE>
<CAPTION>
Year Ended Operating
December 31, Leases
------------- --------------
(In Thousands)
<S> <C>
1995 $170
1996 170
1997 170
1998 170
1999 172
----
Minimum lease payments $852
====
</TABLE>
Included in the above amounts is a lease from the officers to the Company for
the extrusion press. Annual rents under the lease are $77,832 per year (See
Note 4).
<PAGE>
7. ECONOMIC DEPENDENCY:
--------------------
The Company grants unsecured credit to its customers who are generally located
in the Southern California area. The Company uses one bank for all its
transactions and has obtained all of its bank financing from one bank.
As of December 31, 1994, Specialty had a large portion of its accounts
receivable concentrated in a small number of its customers.
The Company processes aluminum billet using an extrusion process to form a
variety of parts to meet customer requirements. The Company is dependent upon a
limited number of material suppliers for its raw material.
The cost and availability of this raw material is subject to market and
environmental forces which are beyond the Company's control. Disruption in the
market for aluminum billet will impact its cost and both the ability of the
Company to acquire billet and the ability of the customer to supply billet for
processing.
8. RETAINED EARNINGS:
------------------
In prior years, the Company has experienced a variety of problems relating to
the collection of certain accounts receivable that were converted to notes
receivable. Management determined that notes receivable in the amount of
$817,225 were not collectible. This adjustment has adversely effected the
Company's capital position.
9. SUBSEQUENT EVENT:
-----------------
On June 30, 1995, Wakefield Engineering, Inc. acquired substantially all of the
assets and certain liabilities of Specialty in a transaction accounted for as a
purchase.
<PAGE>
EXHIBIT 99.2
ALPHA TECHNOLOGIES GROUP, INC. (ALPHA)
PRO FORMA BALANCE SHEET
APRIL 30, 1995
(In Thousands)
(Unaudited)
<TABLE>
<CAPTION>
Pro Forma Pro Forma
Alpha Specialty (a) Adjustments Combined
-------- -------------- ----------- ------------
<S> <C> <C> <C> <C>
ASSETS
CURRENT ASSETS:
Cash and cash equivalents $ 5,769 $ 2 ($2,560)(b) $ 3,211
Marketable securities 778 - 778
Accounts receivable, net 9,714 1,505 (42)(c) 11,177
Inventory, net 8,146 115 8,261
Prepaid expenses 986 - 986
------- ------ ------- --------
Total current assets 25,393 1,622 (2,602) 24,413
PROPERTY AND EQUIPMENT 6,066 1,650 7,716
Less- Accumulated depreciation (725) - (725)
------- ------ ------- --------
Property and equipment, net 5,341 1,650 0 6,991
GOODWILL, net 2,258 350 2,608
OTHER ASSETS, net 1,656 5 1,661
------- ------ ------- --------
Total assets $34,648 $3,627 ($2,602) $ 35,673
======= ====== ======= ========
LIABILITIES AND STOCKHOLDER'S EQUITY
CURRENT LIABILITIES:
Accounts payable 4,864 1,065 (42)(c) 5,887
Accrued compensation and related
benefits 1,664 - 1,664
Other accrued liabilities 1,742 - 1,742
Current portion of long-term debt 419 - 419
Current portion of other long-term liabilities 893 - 893
Intercompany - 2,560 (2,560)(b) 0
------- ------ ------- --------
Total current liabilities 9,582 3,625 (2,602) 10,605
LONG-TERM DEBT 6,392 - 6,392
OTHER LONG-TERM LIABILITIES 1,394 - 1,394
MINORITY INTEREST 1,480 - 1,480
STOCKHOLDERS' EQUITY:
Common stock 204 2 206
Additional paid-in capital 38,804 - 38,804
Retained earnings (deficit) (20,355) - (20,355)
Unrealized gain on marketable securities,
net of income taxes 146 - 146
Treasury stock, at cost (2,999) - (2,999)
------- ------ ------- --------
Total stockholders' equity 15,800 2 0 15,802
------- ------ ------- --------
Total liabilities stockholders'
equity $34,648 $ 3,627 ($2,602) $ 35,673
======= ====== ======= ========
</TABLE>
See the accompanying notes to pro forma financial statements and the Alpha
Technologies Group, Inc. (filed as Synercom Technology, Inc.) 1994 Annual Report
and April 30, 1995 Form 10-QSB.
<PAGE>
ALPHA TECHNOLOGIES GROUP, INC. (ALPHA)
PRO FORMA INCOME STATEMENT
FOR THE SIX MONTHS ENDED APRIL 30, 1995
(In Thousands, Except Per Share Amounts)
(Unaudited)
<TABLE>
<CAPTION>
Pro Forma Pro Forma
Alpha Specialty (a) Adjustments Combined
-------- -------------- ------------- -----------
<S> <C> <C> <C> <C>
SALES $27,161 $3,016 ($261)(d) $29,916
COST OF SALES 19,934 2,561 (222)(d) 22,273
------- ------ ------ -------
Gross profit 7,227 455 (39) 7,643
EXPENSES:
Research and development 545 - 545
Selling, general and administrative 5,364 220 95 (e) 5,679
------- ------ ------ -------
Total operating expenses 5,909 220 95 6,224
------- ------ ------ -------
INCOME FROM CONTINUING OPERATIONS 1,318 235 (134) 1,419
INTEREST, INVESTMENT AND OTHER INCOME 226 1 (64)(f) 163
INTEREST EXPENSE (318) (69) 33 (g) (354)
------- ------ ------ -------
INCOME FROM CONTINUING OPERATIONS BEFORE
PROVISION FOR INCOME TAXES AND MINORITY
INTEREST 1,226 167 (165) 1,228
PROVISION (BENEFIT) FOR INCOME TAXES 278 1 279
------- ------ ------ -------
INCOME FROM CONTINUING OPERATIONS BEFORE
MINORITY INTEREST 948 166 (165) 949
LESS: MINORITY INTEREST (96) - (96)
------- ------ ------ -------
NET INCOME $ 852 $ 166 ($165) $ 853
======= ====== ====== =======
INCOME PER SHARE (6,533 shares) $0.13 $0.13
======= =======
</TABLE>
See the accompanying notes to pro forma financial statements and the Alpha
Technologies Group, Inc. (filed as Synercom Technology, Inc.) Annual Report and
April 30, 1995, Form 10-QSB.
<PAGE>
ALPHA TECHNOLOGIES GROUP, INC. (ALPHA)
PRO FORMA INCOME STATEMENT
FOR THE YEAR ENDED OCTOBER 31, 1994
(In Thousands, Except Per Share Amounts)
(Unaudited)
<TABLE>
<CAPTION>
Pro Forma Pro Forma
Alpha Specialty (a) Adjustments Combined
-------- ------------- ----------- ----------
<S> <C> <C> <C> <C>
SALES $30,145 $5,592 ($540)(d) $35,197
COST OF SALES 20,627 4,520 (437)(d) 24,710
------- ------ ------ -------
Gross profit 9,518 1,072 (103) 10,487
EXPENSES:
Research and development 674 - 674
Selling, general and administrative 6,572 469 188 (e) 7,229
------- ------ ------ -------
Total operating expenses 7,246 469 188 7,903
------- ------ ------ -------
INCOME FROM CONTINUING OPERATIONS 2,272 603 (291) 2,584
INTEREST, INVESTMENT AND OTHER INCOME 315 (13) (68)(f) 234
INTEREST EXPENSE (131) (143) 57 (g) (217)
------- ------ ------ -------
INCOME FROM CONTINUING OPERATIONS BEFORE
PROVISION FOR INCOME TAXES AND MINORITY
INTEREST 2,456 447 (302) 2,601
PROVISION (BENEFIT) FOR INCOME TAXES (860) 1 13 (h) (846)
------- ------ ------ -------
INCOME FROM CONTINUING OPERATIONS BEFORE
MINORITY INTEREST 3,316 446 (315) 3,447
LESS: MINORITY INTEREST (384) - (384)
GAIN ON SALE OF DISCONTIUNED OPERATION 1,380 - 1,380
INCOME FROM DISCONTINUED OPETATION 978 - 978
------- ------ ------ -------
NET INCOME $ 5,290 $ 446 ($315) $ 5,421
======= ====== ====== =======
INCOME PER SHARE (6,344 shares) $0.83 $0.85
======= =======
</TABLE>
See the accompanying notes to pro forma financial statements and the Alpha
Technologies Group, Inc. (filed as Synercom Technolgoy, Inc.) 1994 Annual Report
and April 30, 1995, Form 10-QSB.
<PAGE>
ALPHA TECHNOLOGIES GROUP, INC.
------------------------------
NOTES TO PRO FORMA FINANCIAL STATEMENTS
---------------------------------------
a) Basis of presentation - Specialty Extrusion Ltd. (Specialty) represents
condensed financial information as of June 30, 1995, for the assets purchased
and liabilities assumed, including the purchase price allocations, and does not
include other assets and liabilities that were not acquired or assumed. The
income statements presented for Specialty Extrusion Ltd. represent the six
months in the period ended March 31, 1995, and the year ended December 31, 1994.
b) Adjustment represents the reduction of cash to finance the acquisition of
Specialty including the payment of certain debt and the elimination of the
intercompany balance at Specialty.
c) Adjustment represents the elimination of intercompany accounts receivables
and payables.
d) Adjustment represents the elimination of intercompany profit on sales by
Specialty.
e) Adjustment represents depreciation on fixed assets purchased and
amortization of goodwill resulting from the acquisition.
f) Adjustment represents interest income that would not have been earned for
the respective periods on funds used to finance the acquisition.
g) Adjustment represents interest expense on two bank notes, a term note and an
accounts receivable revolving note, which were eliminated at the date of
acquisition.
h) Adjustment represents federal income tax expense on the earnings of Specialty
and federal income tax expense for the adjustments to income as a result of the
acquisition.
