Amendment No. 2 to Form 8 K on Form 8-K/A
CURRENT REPORT
PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
Date of Report (Date of Earliest Event Reported): August 14, 1998
MEASUREMENT SPECIALTIES, INC.
(Exact name of registrant as specified in its charter)
New Jersey 0-16085 222378738
(State or other (Commission file number) (IRS Employer
jurisdiction of Identification No.)
incorporation
or organization)
80 Little Falls Road, Fairfield, New Jersey 07004
(Address of principal executive offices
(973) 8081819
(Issuer's telephone number)
(Former name, former address and former fiscal year, if changed since last
report)
ITEM 7. FINANCIAL STATEMENTS, PRO FORMA FINANCIAL INFORMATION AND EXHIBITS.
(a)Financial Statements of Business Acquired.
Audited Financial Statements of AMP Sensors Division of AMP Incorporated
(Sensors) as of and for the years ended December 31, 1997 and 1996 are
attached as Exhibit 99.5.
(b)Pro Forma Financial Information.
Unaudited Pro Forma Combined Condensed Financial Statements of
Measurement Specialties, Inc (the Registrant) and Sensors for the
year ended March 31, 1998 and December 31, 1997 respectively, and,
for Registrant and Sensors as of and for the three months ended
June 30, 1998 are attached as Exhibit 99.6.
(c)Exhibits.
(99.5)Audited Financial Statements of AMP Sensors Division of
AMP Incorporated (Sensors) as of and for the years ended
December 31, 1997 and 1996.
(99.6)Unaudited Pro Forma Combined Condensed Financial Statements
of the Registrant and Sensors for the year ended March 31, 1998
and December 31, 1997 respectively, and, for the Registrant and
Sensors as of and for the three months ended June 30, 1998.
SIGNATURES
In accordance with the requirements of the Exchange Act, the
registrant caused this report to be signed on its behalf by the
undersigned, thereunto duly authorized.
MEASUREMENT SPECIALTIES, INC.
(Registrant)
/s/ Kirk J. Dischino
Date: October 28, 1998Kirk J. Dischino
Chief Financial Officer
Exhibit 99.5
AMP SENSORS DIVISION OF
AMP INCORPORATED
FINANCIAL STATEMENTS
AS OF DECEMBER 31, 1997 AND 1996
TOGETHER WITH AUDITORS' REPORT
REPORT OF INDEPENDENT PUBLIC ACCOUNTANTS
To the Management of
AMP Incorporated:
We have audited the accompanying statements of net assets of the
AMP Sensors Division of AMP Incorporated (the "Division") as of
December 31, 1997 and 1996, and the related statements of revenues
and expenses for the years then ended. These financial statements
are the responsibility of the Division's management. Our
responsibility is to express an opinion on these financial
statements based on our audits.
We conducted our audits in accordance with generally accepted
auditing standards. Those standards require that we plan and
perform the audits to obtain reasonable assurance about whether
the financial statements are free of material misstatement.
An audit includes examining, on a test basis, evidence supporting
the amounts and disclosures in the financial statements.
An audit also includes assessing the accounting principles
used and significant estimates made by management, as well as
evaluating the overall financial statement presentation.
We believe that our audits provide a reasonable basis for
our opinion.
As described in Note 2, the accompanying financial statements
were prepared to present the net assets and the revenues and
expenses of the Division, which does not have a separate legal
status or existence, and are not intended to be a complete
presentation of the assets and liabilities or the results of
operations of the Division.
In our opinion, the financial statements referred to above
present fairly, in all material respects, the net assets of
the Division as of December 31, 1997 and 1996, and the revenues
and expenses for the years ended December 31, 1997 and 1996, in
conformity with generally accepted accounting principles.
Philadelphia, Pa.,
October 9, 1998
AMP SENSORS DIVISION
OF AMP INCORPORATED
STATEMENTS OF NET ASSETS
(in thousands)
December 31
--------------- June 30
1997 1996 1998
(unaudited)
ASSETS:
Accounts receivable
--trade,
net of allowance for
doubtful accounts of
$17, $64 and $102 in
1998, 1997 and 1996,
respectively $1,207 $1,358 $ 824
Accounts receivable
--intercompany 100 145 144
Inventories 964 1,530 985
Prepaid assets 84 102 88
----- ----- -----
Total current assets 2,355 3,135 2,041
----- ----- -----
Property and equipment,
net 3,435 4,216 2,854
----- ----- -----
Total assets 5,790 7,351 4,895
----- ----- -----
LIABILITIES:
Accounts payable
--trade 216 205 88
Accrued employee
benefit liabilities 618 650 426
Other current
accrued liabilities 1,255 975 279
----- ----- -----
Total current
liabilities 2,089 1,830 793
----- ----- -----
Noncurrent liabilities 56 1,075 21
----- ----- -----
Total liabilities 2,145 2,905 814
----- ----- -----
NET ASSETS $3,645 $4,446 $4,081
----- ----- -----
The accompanying notes are an integral part of these
financial statements.
AMP SENSORS DIVISION
OF AMP INCORPORATED
STATEMENTS OF REVENUES AND EXPENSES
(in thousands)
For the Year Ended For the Six Months
December 31 Ended June 30
(unaudited)
------------------ ------------------
1997 1996 1998 1997
------ ------- ------- -------
NET SALES $7,793 $5,823 $3,317 $4,253
COSTS AND EXPENSES:
Cost of goods sold 6,089 6,787 2,622 3,315
Selling, general
and administrative 7,165 8,600 2,518 3,798
Restructuring and
one-time charges
(Note 4) - 2,285 - -
------ ------ ------- ------
Total costs
and expenses 13,254 17,672 5,140 7,113
------ ------ ------- ------
Excess of expenses
over revenues $(5,461) $(11,849) $(1,823) $(2,860)
------ ------ ------- ------
The accompanying notes are an integral part of these
financial statements.
AMP SENSORS DIVISION
OF AMP INCORPORATED
NOTES TO FINANCIAL STATEMENTS
(amounts in thousands, except as noted)
1. ORGANIZATION AND NATURE OF BUSINESS:
The AMP Sensors Division (the "Division") of AMP Incorporated is
engaged in the development, manufacture, marketing and sale of
piezoelectric polymer films and sensor components. The Division
sells primarily to the power and utility, commercial, and medical
industries. Financial instruments, for which the Division is
subject to credit risk, consist principally of trade receivables.
The Division has mitigated this risk by selling primarily to
well-established companies, performing ongoing credit evaluations
and making frequent contact with customers.
2. BASIS OF PRESENTATION:
The accompanying financial statements present, on a historical
cost basis, the statements of net assets and the statements of
revenues and expenses of the Division. The Division was part of
the Circuits and Packaging Group of AMP Incorporated through
December 31, 1997, and subsequent to December 31, 1997 is part
of the Printed Wiring Board Global Business Unit, and does not
have a separate legal status or existence. The Division's
results of operations have historically been commingled with
the Consumer and Industrial Business Unit. These statements are
presented as if the Division had existed as a separate entity
during the periods presented. The accompanying financial statements
are not intended to be a complete presentation of the assets,
liabilities or the results of operations of the Division on a
stand-alone basis.
On August 14, 1998, AMP Incorporated entered into an Asset
Purchase Agreement with Measurement Specialties, Inc. ("MSI")
to sell certain assets and liabilities of the Division to MSI.
The purchase price of $3.8 million is subject to adjustment
after closing on a dollar-for-dollar basis to the extent that
the actual net book value of the Division at closing is not
equal to the estimates used to determine the purchase price.
The Division has incurred significant losses from operations
in 1997 and 1996. The working capital required to sustain the
operations of the Division was provided by AMP Incorporated
through the date of the purchase. In the second half of 1996,
the Business was restructured (see Note 4).
3. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES:
Inventories
Inventories, consisting of material, labor and overhead, are
stated at the lower of first-in, first-out ("FIFO") cost or market.
Inventories consist of the following:
December 31
--------------------- June 30,
1997 1996 1998
------ ------ -------
Raw materials and finished goods $757 $1,087 $824
Work-in-process 207 443 161
------ ------ -------
$964 $1,530 $985
------ ------ -------
Property, Plant and Equipment and Depreciation
Property, plant and equipment is stated at cost. Depreciation is
computed by applying principally the straight-line method to individual
items. Depreciation rate ranges are substantially as follows:
Property, Plant and Equipment and Depreciation
Leasehold improvements Life of lease
Machinery and equipment 10% to 33-1/3%
Machines and tools with customers 20% to 33-1/3%
Information systems assets 20% to 33-1/3%
Maintenance and repairs are charged to expense as incurred. Major
repairs and improvements which extend the lives of the related
assets are capitalized and depreciated at applicable straight
- -line rates.
The cost and accumulated depreciation of items of plant and equipment
retired, or otherwise disposed of, are removed from the related
accounts, and any residual values are charged or credited to
operating income.
Property and equipment consist of the following:
December 31
----------------------- June 30,
1997 1996 1998
Leasehold improvements $ 1,758 $ 19 $ 1,424
Machinery and equipment 4,651 4,345 4,681
Furniture, fixtures and computer
equipment 720 612 618
Construction-in-progress 89 1,974 74
------- ------ ------
7,218 6,950 6,797
Less- Accumulated depreciation (3,783) (2,734) (3,943)
------- ------ ------
Property and equipment, net $ 3,435 $4,216 $ 2,854
------- ------ ------
Long-Lived Assets
In 1996, AMP Incorporated adopted Statement of Financial Accounting
Standards ("SFAS") No. 121, "Accounting for the Impairment of
Long-Lived Assets and for Long-Lived Assets to be disposed of.
" SFAS No. 121 establishes accounting standards for the impairment
of long-lived assets, certain identifiable intangibles and goodwill.
The impact of the adoption of this statement was not material to
the financial results of the Division.
Revenue Recognition
The Company recognizes revenues at the time the product is shipped
to the customer.
Use of Estimates
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 date of the financial statements and the reported amounts of
revenues and expenses during the reporting period. Actual results
could differ from those estimates.
4. RESTRUCTURING AND ONE-TIME (CREDITS)/CHARGES:
In the fourth quarter of 1996, AMP Incorporated performed a review
of product lines, manufacturing operations and other activities to
rationalize their existence based on performance trends. As a result
of this review, the decision was made to exit various product lines,
manufacturing operations and investments that were not performing or
expected to perform at levels which enhance shareholder value.
The impact of the restructuring program at the Division consisted of
the following: the write-off of certain intangible assets totaling
$817, the write-off of property, plant and equipment totaling $1,390,
and severance of $78, all of which were reflected as restructuring
and one-time charges in the accompanying 1996 statement of revenues
and expenses. The severance payments were made in 1997.
5. SELECTED CASH FLOW INFORMATION:
December 31
------------------- June 30,
1997 1996 1998
------- ------ -------
(Reversal)/provision for bad debts $ (38) $ 49 $ (48)
(Reversal)/provision for excess
and obsolete inventory (194) 25 49
Capital expenditures 128 1,041 26
Depreciation and amortization 1,045 1,151 532
Restructuring and one-time charges - 2,285 -
As a division of AMP Incorporated, the Division's cash receipts and
disbursements are made by AMP Incorporated. Changes in working
capital, property, plant and equipment, liabilities, together with
the excess of expenses over revenues are reflected in net assets.
6. TRANSACTIONS WITH AFFILIATES:
AMP Incorporated performs certain services, including those related
to finance and accounting, information systems and administration
on behalf of the Division. AMP Incorporated allocates charges to the
Division for services performed, based primarily upon the relationship
of the Division's sales to AMP Incorporated's sales. Management
believes that the amount allocated reasonably approximates the cost
of these services. For the six months and years ended June 30, 1998,
December 31, 1997 and 1996, such charges totaled approximately $326,
$600 and $389, respectively.
The Division sells certain products to other AMP Incorporated
businesses and divisions. Revenues recorded for these sales
approximated $297, $520 and $360 for the six months and years
ended June 30, 1998, December 31, 1997 and 1996, respectively.
The selling price associated with these revenues approximates
the selling price charged to unaffiliated customers.
7. RESEARCH AND DEVELOPMENT:
Research and development expenditures for the creation and
application of new products and processes for the six months
and years ended June 30, 1998, December 31, 1997 and 1996 were
$515, $2,735 and $3,238, respectively, and is included in selling,
general and administrative expenses in the accompanying Statements
of Revenues and Expenses.
8. UNAUDITED INTERIM INFORMATION:
The unaudited interim information included herein has been
prepared by the Company, without audit, pursuant to the rules
and regulations of the Securities and Exchange Commission.
The information furnished reflects all adjustments (consisting
of normal recurring adjustments), which are, in the opinion of
management, necessary for a fair statement of the results for the
interim periods. These results are not necessarily indicative of
the entire year's results.
Exhibit 99.6
Measurement Specialties, Inc.
Pro Forma Combined Condensed Financial Statements
(Unaudited)
The accompanying unaudited pro forma combined condensed financial
statements have been derived from the historical results of
operations of Measurement Specialties, Inc (the Company or MSI)
and the AMP Sensors Division of AMP Incorporated (Sensors) for the
year ended March 31, 1998 for MSI, for the year ended December 31,
1997 for Sensors, for the three months ended June 30, 1998
for both MSI and Sensors and as of June 30, 1998 for MSI and
August 14, 1998 for Sensors.
The unaudited pro forma combined condensed financial statements are
presented for informational purposes only and do not purport to be
indicative of the operating results that actually would have occurred
if the acquisition had been consummated at the beginning of the
periods, nor which may result from future operations. The pro
forma adjustments are based on available information and certain
assumptions that the Company believes are reasonable. The
acquisition has been accounted for using the purchase method of
accounting. These pro forma financial statements should be read in
conjunction with the historical financial statements and related
notes of the Company and the acquisition document.
Measurement Specialties, Inc
Pro Forma Combined Condensed Balance Sheet
Historical
MSI Sensors Pro Forma
June 30, 1998 Adjustments Combined
Assets
Current Assets:
Cash and cash equivalents $ 160 $ 0 $ 170 (6) $ 330
Accounts Receivable, net 2,651 805 3,456
Inventories 3,340 1,093 4,433
Other current assets 534 65 599
Total current assets 6,685 1,963 170 8,818
Property and equipment net of
accumulated depreciation and
amortization 1,813 2,514 (931) (1) 3,396
Other Assets:
Other assets 816 85 (3) 901
Goodwill 1,652 (2) 1,652
816 0 1,737 2,553
$9,314 $4,477 $ 976 $14,767
Liabilities and Shareholders Equity
Current Liabilities:
Accounts Payable $2,504 $ 113 $ 2,617
Other current liabilities 1,177 508 832 (4) 2,517
3,681 621 832 5,134
Other liabilities
Borrowings under bank line
of credit agreement 526 526
Long term debt 4,000 (3) 4,000
Other liabilities 330 330
856 0 4,000 4,856
Total liabilities 4,537 621 4,832 9,990
Shareholders' equity
Common Stock, no par;
20,000,000 shares
authorized; issued and
outstanding 3,582,687 5,502 5,502
Additional paid-in capital 75 75
Retained earnings (deficit) (797) (797)
Currency translation (3) (3)
Net assets of
acquired business 3,856 (3,856) (5) 0
Total shareholders'
Equity 4,777 3,856 (3,856) 4,777
$9,314 $4,477 $ 976 $14,767
(1) Revaluation to fair value of acquired leasehold improvements.
(2) Record goodwill. The goodwill associated with the Sensors
acquisition will be amortized over 15 years. Sensors was acquired
for $3,856 in cash, plus acquisition costs of $185, unfavorable
lease costs of $88 and restructuring costs of $448. The excess
purchase price of $1,652 was allocated to goodwill.
(3) Record debt and deferred financing costs associated with acquisition.
(4) Record accrued expenses associated with the acquisition of $185,
restructuring costs of $448, unfavorable lease obligations of $88,
unpaid deferred financing costs of $55 and due to seller of $56.
(5) Eliminate Sensors net assets.
(6) Net of loan proceeds over initial cash payments.
Measurement Specialties, Inc
Pro Forma Combined Condensed Income Statement
(Unaudited)
Historical - Year ended:
MSI Sensors Pro Forma
31-Mar-98 31-Dec-97 Adjustments Combined
Net sales $29,277 $7,793 ($6) (1) $37,064
Cost of goods sold 18,896 6,089 (3) (2) 24,982
Gross profit 10,381 1,704 (3) 12,082
Other expenses (income):
Selling, general
and administrative 7,513 4,430 (235) (3) 11,708
Research and development,
net of customer funding 1,964 2,735 4,699
Interest (net) and
other income 25 0 345 (4) 370
----- ----- ----- ------
9,502 7,165 110 16,777
Income (loss) before
income taxes 879 (5,461) (113) (4,695)
Provision (benefit)
for income taxes 102 0 (2,230) (5) (2,128)
Net income (loss) $777 ($5,461) $2,117 ($2,567)
Earnings (loss) per common share
Basic $0.22 ($0.72)
Diluted $0.21 ($0.72)
(1) Elimination of intercompany sales.
(2) Adjustment for intercompany costs.
(3) Amortization of goodwill of $113, offset by adjustment of lease costs of
$118 and leasehold amortization of $230.
(4) Interest on acquisition financing and amortization of debt
financing costs.
(5) Assumed tax benefit resulting from Sensors loss and adjustments at U.S.
statutory rate.
Measurement Specialties, Inc
Pro Forma Combined Condensed Income Statement
(Unaudited)
Historical - Year ended:
MSI Sensors Pro Forma
31-Mar-98 31-Dec-97 Adjustments Combined
Net sales $3,882 $1,658 ($47) (1) $5,493
Cost of goods sold 2,568 960 (21) (2) 3,507
Gross profit 1,314 698 (26) 1,986
Other expenses (income):
Selling, general and
administrative 1,857 1,454 (59) (3) 3,252
Research and development,
net of customer funding 455 258 713
Interest (net) and
other income 3 0 86 (4) 89
2,315 1,712 27 4,054
Income (loss) before
income taxes (1,001) (1,014) (53) (2,068)
Provision (benefit)
for income taxes (201) 0 (427) (5) (628)
Net income (loss) ($800) ($1,014) $374 ($1,440)
Earnings (loss) per common share
Basic ($0.22) ($0.40)
Diluted ($0.22) ($0.40)
(1) Elimination of intercompany sales.
(2) Adjustment of intercompany costs.
(3) Amortization of goodwill of $29, offset by adjustment of lease
costs of $30 and leasehold amortization of $58.
(4) Interest on acquisition financing and amortization of debt
financing costs.
(5) Tax benefit at U.S. statutory rate.
