SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 8-K/A
AMENDMENT NO. 1
CURRENT REPORT
Pursuant to Section 13 or 15 (d) of the
Securities Exchange Act of 1934
Date of Report (date of earliest event reported) December 30, 1995
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CINCINNATI MILACRON INC.
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(Exact name of registrant as specified in charter)
Delaware 1-8475 31-1062125
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(State or other jurisdiction (Commission File (I.R.S. Employer
of incorporation) Number) Identification No.)
4701 Marburg Avenue, Cincinnati, Ohio 45209
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(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code (513) 841-8100
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NONE
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(Former name or former address, if changed since last report)
Item 2. ACQUISITION OR DISPOSITION OF ASSETS
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On December 30, 1995 (the "Closing Date"), pursuant to an Asset Purchase
Agreement between Cincinnati Milacron Inc. (the "Registrant") and TRINOVA
Corporation (the "Purchaser") dated as of December 15, 1995 (the "U.S. Asset
Purchase Agreement"), and an Asset Purchase Agreement between Cincinnati
Milacron U.K. Limited and TRINOVA Limited dated as of December 15, 1995 (the
"U.K. Asset Purchase Agreement"), the Registrant has disposed of and
transferred substantially all the assets and liabilities of its Electronic
Systems Division ("ESD") to the Purchaser. ESD is engaged in the business of
designing and manufacturing controls, control components, software,
electronics, motor drives, motor drive components, power panel assemblies and
related products for machine tools and plastics processing equipment as well
as providing contract services for outside customers. A copy of the U.S.
Asset Purchase Agreement and a copy of the U.K. Asset Purchase Agreement are
filed herewith as Exhibits 2.1 and 2.2 and reference is made thereto for the
complete terms and conditions of these Agreements.
The purchase price was $95,225,000 under the U.S. Asset Purchase Agreement and
Pound Sterling 6,850,000 under the U.K. Asset Purchase Agreement. Thus, the
total purchase price was approximately $105 million (using the U.S.
Dollar/Pound Sterling exchange rate in effect on the Closing Date). In both
Agreements, the purchase price was calculated and based on projected balance
sheets and is subject to adjustment. The adjustment amount will be
calculated as being equal to the differences between the net asset values
shown in the projected balance sheets and the net asset values shown in the
closing date balance sheets.
Darryl F. Allen, chairman, president and chief executive officer of the
Purchaser, is a director of the Registrant. Apart from that, no material
relationship exists between the Registrant and the Purchaser or any of its
affiliates, directors or officers, or any associate of any such directors or
officers.
ESD employs approximately 600 employees and had sales of approximately $90
million in 1995, of which $30 million were to unaffiliated customers.
Item 7. FINANCIAL STATEMENTS AND EXHIBITS
---------------------------------
(b) Pro forma financial information
The Pro Forma Consolidated Statement of Earnings for the fiscal
year ended December 30, 1995 reflecting, on a pro forma basis, the
divestiture of the Electronic Systems Division.
Item 7 (b)
CINCINNATI MILACRON INC. AND SUBSIDIARIES
PRO FORMA FINANCIAL INFORMATION
(IN MILLIONS, EXCEPT PER SHARE DATA)
(UNAUDITED)
On February 1, 1995, Cincinnati Milacron Inc. (the "company") completed the
acquisition of 99.92% of the outstanding shares of Krupp Widia GmbH ("Widia")
from Fried. Krupp AG Hoesch-Krupp ("Krupp") for DM 120.8 million
(approximately $79 million based on the exchange rate in effect on that date),
which included DM 7.1 million (approximately $4 million) for the settlement of
all intercompany liabilities to Krupp as of February 1, 1995. Widia is one of
the world's leading producers of metalcutting products and industrial magnets.
The company financed the purchase by drawing on its revolving credit facility
with its existing bank group which had been amended in December, 1994, to
increase the amount of borrowings available thereunder from $130.0 million to
$200.0 million, including borrowings denominated in German marks up to an
equivalent of $100.0 million.
On July 20, 1995, the company completed the acquisition of Talbot Holdings,
LTD. ("Talbot") for approximately $33 million in cash. Talbot is a major
supplier of round high-speed steel and carbide metalcutting tools. The
transaction was financed through available cash and existing credit lines.
On December 30, 1995, the company completed the sale of its Electronic Systems
Division ("ESD") for $105 million in cash subject to post closing adjustments.
ESD designs and produces computer controls, software and drives used on the
company's machine tools and plastics machinery. It also manufactures
electronics and provides contract services for outside customers. In
conjunction with the sale, the company entered into a seven-year supply
contract with the purchaser for electronic controls used on the company's
machine tools and plastics machinery. The proceeds from the sale were used to
repay existing bank borrowings and to partially fund the acquisition of the
D-M-E Division of The Fairchild Corporation in January, 1996.
The following pro forma consolidated statement of earnings is based on the
historical consolidated financial statements of the company, adjusted to give
effect to the acquisitions of Widia and Talbot and the sale of ESD. The pro
forma consolidated statement of earnings assumes that all transactions
occurred as of the first day of the company's 1995 fiscal year. The pro forma
consolidated statement of earnings includes one month of Widia's earnings and
seven months of Talbot's earnings in the "Historical Widia and Talbot" column.
Consistent with the purchase method of accounting used for the acquisitions,
the remaining 1995 sales and earnings of Widia and Talbot are included in the
"Historical Cincinnati Milacron" column. The company filed a Current Report
on Form 8-K dated February 1, 1995 relating to the acquisition of Widia, which
was amended by a filing on Form 8-K/A, Amendment No. 1. The amended filing
included audited financial statements of Widia and pro forma financial
statements giving effect to the acquisition of Widia as of and for the year
ended December 31, 1994. A Current Report on Form 8-K for the Talbot
acquisition was not required to be filed. A pro forma consolidated balance
sheet as of the end of the company's 1995 fiscal year is not included herein
because the effects of all transactions are reflected in the consolidated
balance sheet included in the company's Annual Report on Form 10-K for its
fiscal year ended December 30, 1995.
The pro forma consolidated statement of earnings does not purport to present
what the company's results of operations would actually have been had the
acquisitions and divestiture occurred on the first day of the company's 1995
fiscal year, or purport to project the company's results of operations for any
future period. The pro forma consolidated statement of earnings reflects
certain assumptions described in the accompanying notes. The pro forma
consolidated statement of earnings and accompanying notes should be read in
conjunction with the audited consolidated financial statements of the company
and the related notes thereto which are included in the company's Annual
Report on Form 10-K for its fiscal year ended December 30, 1995, and the
company's Current Report on Form 8-K dated December 30, 1995 (all filed
with the Securities and Exchange Commission).
CINCINNATI MILACRON INC. AND SUBSIDIARIES
PRO FORMA CONSOLIDATED STATEMENT OF EARNINGS
(IN MILLIONS, EXCEPT PER SHARE AMOUNTS)
<TABLE>
<CAPTION>
YEAR ENDED DECEMBER 30, 1995
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Cincinnati
Historical Historical Acquisition Milacron,
Cincinnati Widia and Pro Forma Widia and
Milacron(a) Talbot(b) Adjustments Talbot
------------ ---------- ----------- ----------
<S> <C> <C> <C> <C>
Sales . . . . . . . . . . . . . . . . . . . . . . $ 1,649.3 $ 45.2 $ - $ 1,694.5
Cost of products sold . . . . . . . . . . . . . . 1,238.3 31.5 0.3 (c) 1,270.2
0.1 (d)
--------- ------ ------ ---------
Manufacturing margins . . . . . . . . . . . . . 411.0 13.7 (0.4) 424.3
Other costs and expenses
Selling and administrative. . . . . . . . . . . 301.4 9.0 - 310.4
(Gain) on disposition of
businesses. . . . . . . . . . . . . . . . . . (71.0) - - (71.0)
Integration charge. . . . . . . . . . . . . . . 9.8 - - 9.8
Minority shareholders' interests in
earnings of subsidiaries. . . . . . . . . . . 2.3 - - 2.3
Other - net . . . . . . . . . . . . . . . . . . 9.4 1.7 - 11.1
--------- ------ ------ ---------
Total other costs and expenses. . . . . . . . 251.9 10.7 - 262.6
--------- ------ ------ ---------
Operating earnings. . . . . . . . . . . . . . . . 159.1 3.0 (0.4) 161.7
Interest
Income. . . . . . . . . . . . . . . . . . . . . 3.2 .2 - 3.4
Expense . . . . . . . . . . . . . . . . . . . . (28.0) (.2) (1.5)(e) (29.7)
--------- ------ ------ ---------
Interest - net. . . . . . . . . . . . . . . . (24.8) - (1.5) (26.3)
--------- ------ ------ ---------
Earnings before income taxes. . . . . . . . . . . 134.3 3.0 (1.9) 135.4
Provision for income taxes. . . . . . . . . . . . 28.7 1.0 - 29.7
--------- ------ ------ ---------
Net earnings. . . . . . . . . . . . . . . . . . . $ 105.6 $ 2.0 $ (1.9) $ 105.7
========= ====== ====== =========
Earnings per common share . . . . . . . . . . . . $3.04 $ 3.05
===== ======
Weighted average number of
common shares and common
share equivalents
outstanding . . . . . . . . . . . . . . . . . . 34.6 34.6
==== ====
</TABLE>
See Notes to Pro Forma Consolidated Statement of Earnings.
<TABLE>
<CAPTION>
YEAR ENDED DECEMBER 30, 1995
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Cincinnati
Cincinnati Milacron,
Milacron, Divestiture Widia,
Widia and Historical Pro Forma Talbot,
Talbot ESD (f) Adjustments Less ESD
---------- ---------- ----------- ----------
<S> <C> <C> <C> <C>
Sales . . . . . . . . . . . . . . . . . . . . . . $ 1,694.5 $ (90.7) $ 60.7 (g) $1,664.5
Cost of products sold . . . . . . . . . . . . . . 1,270.2 (71.6) 61.3 (g) 1,260.3
.4 (h)
--------- -------- ------ --------
Manufacturing margins . . . . . . . . . . . . . 424.3 (19.1) (1.0) 404.2
Other costs and expenses
Selling and administrative. . . . . . . . . . . 310.4 (5.2) - 305.2
(Gain) on disposition of
businesses. . . . . . . . . . . . . . . . . . (71.0) - - (71.0)
Integration charge. . . . . . . . . . . . . . . 9.8 - - 9.8
Minority shareholders' interests in
earnings of subsidiaries. . . . . . . . . . . 2.3 - - 2.3
Other - net . . . . . . . . . . . . . . . . . . 11.1 - - 11.1
--------- ------- ------ --------
Total other costs and expenses. . . . . . . 262.6 (5.2) - 257.4
--------- ------- ------ --------
Operating earnings. . . . . . . . . . . . . . . . 161.7 (13.9) (1.0) 146.8
Interest
Income. . . . . . . . . . . . . . . . . . . . . 3.4 - - 3.4
Expense . . . . . . . . . . . . . . . . . . . . (29.7) - 7.1 (i) (22.6)
--------- ------- ------ -------
Interest - net. . . . . . . . . . . . . . . . (26.3) - 7.1 (19.2)
Earnings before income taxes. . . . . . . . . . . 135.4 (13.9) 6.1 127.6
Provision for income taxes. . . . . . . . . . . . 29.7 - (1.4)(j) 28.3
--------- ------- ------ --------
Net earnings. . . . . . . . . . . . . . . . . . . $ 105.7 $ (13.9) $ 7.5 $ 99.3
========= ======= ====== ========
Earnings per common share . . . . . . . . . . . . $3.05 $ 2.87
===== ======
Weighted average number of
common shares and common
share equivalents
outstanding . . . . . . . . . . . . . . . . . . 34.6 34.6
==== ====
</TABLE>
See Notes to Pro Forma Consolidated Statement of Earnings.
CINCINNATI MILACRON INC. AND SUBSIDIARIES
NOTES TO PRO FORMA CONSOLIDATED STATEMENT OF EARNINGS
YEAR ENDED DECEMBER 30, 1995
(IN MILLIONS)
(a) In the "Historical Cincinnati Milacron" column, the gain on the
sale of ESD of $66.0 million ($52.4 million after tax) is
included on the line captioned "(Gain) on disposition of
businesses."
(b) The amounts in the "Historical Widia and Talbot" column
represent the following:
- Unaudited historical results of operations of Widia for the
month of January, 1995, which were derived from Widia's
internal financial statements. (Results of operations for
Widia for the remainder of 1995 are included in the "Historical
Cincinnati Milacron" column.)
- Unaudited historical results of operations of Talbot for the
first seven months of 1995, which were derived from the
internal financial statements of Talbot. (Results of operations
for Talbot for the remainder of 1995 are included in the
"Historical Cincinnati Milacron" column.)
(c) Amortization expense of $.3 million related to
acquisition-basis goodwill. Total goodwill recorded for the
acquisitions was $51.4 million and is being amortized over 40
years on the straight-line method.
(d) Additional depreciation expense of $.1 million related to the
adjustment of the historical value of Talbot's property, plant
and equipment to fair value.
(e) Interest expense of $.4 million for Widia for one month on
borrowings totaling $80.6 million and $1.1 million for Talbot
for seven months on borrowings totaling $34.4 million.
(f) The amounts in the "Historical ESD" column are derived from the
audited combined statement of revenues and direct operating
expenses of ESD for the fiscal year ended December 30, 1995.
(g) Adjustment to eliminate the effects of intercompany sales of
$60.7 million by ESD to other divisions and subsidiaries of the
company, the related cost of products sold of $50.1 million,
and the related intercompany profit of $11.2 million. In the
"Historical Cincinnati Milacron" column, the effects of
intercompany transactions have been eliminated but they are
included in the amounts related to ESD in the "Historical ESD"
column.
(h) Reversal of direct corporate charges of $.4 million
representing fees for ESD's use of certain centralized
functions such as accounts payable, payroll and computer
services, the cost of which will not be eliminated as a result
of the sale.
(i) Reduction of historical interest expense of $7.1 million
assuming that the proceeds from the sale of ESD were utilized
to repay the company's existing bank borrowings.
(j) Reduction of the provision for income taxes relating to both
the historical ESD earnings and the divestiture pro forma
adjustments utilizing the company's effective tax rate.
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.
Cincinnati Milacron Inc.
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(Registrant)
By: /s/ Ronald D. Brown
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Ronald D. Brown
Vice President - Finance
and Chief Financial Officer
Date: March 14, 1996
CINCINNATI MILACRON INC. AND SUBSIDIARIES
INDEX TO EXHIBITS
The following Exhibits are included with this Form 8-K.
Exhibit Sequential
Number Description of Exhibit Page Number
2.1 U.S. Asset Purchase Agreement *
dated as of December 15, 1995,
between Cincinnati Milacron Inc.,
a Delaware corporation, and
TRINOVA Corporation, an Ohio
Corporation (Schedules and
Exhibits have been omitted
pursuant to Item 6.01(b)(2) of
Regulation S-K. Such Schedules
and Exhibits are listed and
described in the U.S. Asset
Purchase Agreement. The
Registrant hereby agrees to
furnish to the Securities and
Exchange Commission, upon its
request, any or all of such
omitted Schedules and Exhibits).
2.2 U.K. Asset Purchase Agreement *
dated as of December 15, 1995,
between Cincinnati Milacron U.K.
Limited, a company incorporated
in England and Wales and TRINOVA
Limited, a company incorporated
in England and Wales (Schedules
and Exhibits have been omitted
pursuant to Item 6.01(b)(2) of
Regulation S-K. Such Schedules
and Exhibits are listed and
described in the U.K. Asset
Purchase Agreement. The Registrant
hereby agrees to furnish to the
Securities and Exchange Commission,
upon its request, any or all of
such omitted Schedules and
Exhibits).
* Previously filed.
