US SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, DC 20549
AMENDMENT NO. 1 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): FEBRUARY 15,2000
MEASUREMENT SPECIALTIES, INC.
(EXACT NAME OF REGISTRANT AS SPECIFIED IN ITS CHARTER)
NEW JERSEY 0-16085 22-2378738
------------------- -------------------- --------------
(STATE OR OTHER JURISDICTION OF (COMMISSION FILE NUMBER) (IRS EMPLOYER
INCORPORATION OR ORGANIZATION) IDENTIFICATION NO.)
80 LITTLE FALLS ROAD, FAIRFIELD, NEW JERSEY 07004
-------------------------------------------------
(ADDRESS OF PRINCIPAL EXECUTIVE OFFICES)
(973) 808-1819
--------------
(ISSUER'S TELEPHONE NUMBER)
(FORMER NAME, FORMER ADDRESS AND FORMER FISCAL YEAR, IF CHANGED SINCE LAST
REPORT)
<PAGE>
ITEM 7. FINANCIAL STATEMENTS, PRO FORMA FINANCIAL INFORMATION AND EXHIBITS.
(a) Financial Statements of Business Acquired.
Audited Financial Statements of IC Sensors, Inc. (ICS) as of and for
the years ended December 31, 1999 and 1998 are attached as Exhibit
99.4.
(b) Pro Forma Financial Information.
Unaudited Pro Forma Combined Condensed Balance Sheet of Measurement
Specialties, Inc (the Registrant) and IC Sensors, Inc as of December
31, 1999 and Pro Forma Combined Condensed Statements of Income for
the year ended March 31, 1999 for the Registrant, and for the year
ended December 31, 1998 for IC Sensors, Inc., and for the nine months
ended December 31, 1999 for both the Registrant and IC Sensors are
attached as Exhibit 99.5.
(c) Exhibits.
99.4 Audited Financial Statements of IC Sensors, Inc. (ICS) as of
and for the years ended December 31, 1999 and 1998.
99.5 Unaudited Pro Forma Combined Condensed Balance Sheet of
Measurement Specialties, Inc (the Registrant) and IC Sensors,
Inc as of December 31, 1999 and Pro Forma Combined Condensed
Statements of Income for the year ended March 31, 1999 for
the Registrant, and for the year ended December 31, 1998 for
IC Sensors, Inc., and for the nine months ended December 31,
1999 for both the Registrant and IC Sensors.
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: May 1, 2000 Kirk J. Dischino
Chief Financial Officer
<PAGE>
Exhibit 99.4
MEASUREMENT SPECIALTIES, INC.
PRO FORMA COMBINED CONDENSED FINANCIAL STATEMENTS
(UNAUDITED)
On February 15, 2000 (the "Closing Date") Measurement Specialties, Inc. (the
"Registrant") acquired 100% of the common stock of IC Sensors, Inc. from
PerkinElmer, Inc. A total of $12 million was paid in cash to PerkinElmer
utilizing cash and the proceeds from a $10.0 million term loan issued on
February 15, 2000. Reference is made to previously filed Form 8K filed on March
1, 2000.
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 IC Sensors for the year ended March
31, 1999 for MSI, for the year ended December 31, 1998 for IC Sensors, and as of
and for the nine months ended December 31, 1999 for both MSI and IC Sensors.
Financial statements for the Company should be read in conjunction with the
annual financial statements included in the Company's Annual Report on Form 10-K
for the year ended March 31, 1999, and quarterly reports on Form 10-Q.
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 acquisition will be accounted for using the purchase method of
accounting. The Company has not yet completed its allocation of the purchase
price to assets acquired and liabilities assumed. Deferred taxes, if any,
associated with the transaction have not been finalized, and are therefore not
reflected in these pro forma financial statements. The unaudited pro forma
adjustments are based on available information and certain assumptions that the
Company believes are reasonable. These pro forma financial statements should be
read in conjunction with the historical financial statements of the Company and
related notes and the acquisition document.
<PAGE>
<TABLE>
<CAPTION>
MEASUREMENT SPECIALTIES, INC
UNAUDITED PRO FORMA COMBINED CONDENSED BALANCE SHEET
AS OF DECEMBER 31, 1999
(Dollars in thousands) Historical
--------------------- Adjustments Pro Forma
MSI IC Sensors (Note A) Combined
------- ------------ --------- ---------
<S> <C> <C> <C> <C>
Assets
Current Assets:
Cash and cash equivalents $ 4,925 $ 615 $ (4,823) $ 717
Accounts receivable, net 7,692 2,501 10,193
Inventories 6,495 2,272 267 9,034
Other current assets 1,508 111 1,619
------- ------------ --------- ---------
Total current assets 20,620 5,499 (4,556) 21,563
------- ------------ --------- ---------
Property and equipment net 4,505 622 3,809 8,936
Other Assets:
Goodwill 1,909 2,966 2,047 6,922
Other assets 194 0 283 477
------- ------------ --------- ---------
2,103 2,966 2,330 7,399
------- ------------ --------- ---------
Total Assets $27,228 $ 9,087 $ 1,583 $ 37,898
------- ------------ --------- ---------
Liabilities and Shareholders Equity
Current Liabilities:
Accounts Payable $ 6,689 $ 603 $ 0 $ 7,292
Accounts Payable - Intercompany 0 25,667 (25,667) 0
Other current liabilities 4,676 1,353 639 6,668
------- ------------ --------- ---------
11,365 27,623 (25,028) 13,960
------- ------------ --------- ---------
Long term debt 2,675 0 8,075 10,750
Other liabilities 252 0 252
2,927 0 8,075 11,002
------- ------------ --------- ---------
Total liabilities 14,292 27,623 (16,953) 24,962
------- ------------ --------- ---------
Shareholders' equity
Common Stock 5,502 1 (1) 5,502
Additional paid-in capital 1,106 30,506 (30,506) 1,106
Retained earnings (deficit) 6,328 (49,043) 49,043 6,328
------- ------------ --------- ---------
Total shareholders' equity (deficit) 12,936 (18,536) 18,536 12,936
------- ------------ --------- ---------
Total liabilities and equity $27,228 $ 9,087 $ 1,583 $ 37,898
------- ------------ --------- ---------
</TABLE>
<PAGE>
Note A:
Adjustments reflect the following items connected with the acquisition:
<TABLE>
<CAPTION>
Goodwill
and other
Cash Inventory Equipment intangibles Other assets
------- --------- --------- ------------ ------------
<S> <C> <C> <C> <C> <C>
IC Sensors assets listed on
balance sheet not assumed
by the Company (615) (2,966)
Assets acquired from seller
not listed on IC Sensors
balance sheet 267 1,490
Adjustment of equipment to
appraised value 2,319
Cash utilized as partial
payment of purchase price (2,000)
Deferred financing costs
associated with acquisition (283) 283
Borrowings under bank line
of credit 1,500
Mandatory repayment of
prior term loan (3,425)
Record goodwill and other
intangible assets. The
goodwill associated with the
Sensors acquisition will be
amortized over 15 years. 5,013
------- --------- --------- ------------ ------------
Total (4,823) 267 3,809 2,047 283
------- --------- --------- ------------ ------------
</TABLE>
<TABLE>
<CAPTION>
Accounts payable Other current liabilities Long term debt Equity
----------------- -------------------------- --------------- ------
<S> <C> <C> <C> <C>
IC Sensors liabilities listed on
balance sheet not assumed by
the Company (25,667)
Borrowings under bank line of
credit 1,500
Mandatory repayment of prior
term loan (750) (3,425)
Accrued acquisition closing
costs 639
Term loan to finance
acquisition 750 9,250
Eliminate IC Sensors deficit 18,536
----------------- -------------------------- --------------- ------
Total (25,667) 639 7,325 18,536
----------------- -------------------------- --------------- ------
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
MEASUREMENT SPECIALTIES, INC
PRO FORMA COMBINED CONDENSED INCOME STATEMENT
FOR THE YEAR ENDED MARCH 31, 1999 (COMPANY) AND DECEMBER 31, 1998 (IC SENSORS)
(UNAUDITED)
(Dollars in thousands except per Historical Pro Forma
share amounts)
MSI IC Sensors Adjustments Combined
------- ------------ ----------------- ----------
<S> <C> <C> <C> <C> <C>
Net sales $37,596 $ 27,729 $ 65,325
Cost of goods sold 22,538 22,265 408 (1) 45,211
------- ------------ ----------------- ----------
Gross profit 15,058 5,464 (408) 20,114
------- ------------ ----------------- ----------
Selling, general and administrative 10,612 5,421 30 (2) 16,063
Research and development, net of
customer funding 1,822 1,802 3,624
Interest (net) and
other income (expense) 300 (352) 916 (3) 968
------- ------------ ----------------- ----------
Income (loss) before
income taxes 2,324 (2,111) (1,354) (1,141)
------- ------------ ----------------- ----------
Provision (benefit)
for income taxes 595 0 (1,386) (4) (791)
------- ------------ ----------------- ----------
Net income (loss) 1,729 (2,111) 32 (350)
------- ------------ ----------------- ----------
Earnings (loss) per common share
Basic $ 0.48 $ (0.10)
Diluted $ 0.46 $ (0.09)
Weighted average shares (000's)
Basic 3,601 3,601
Diluted 3,738 3,738
<FN>
1) Depreciation associated with appraised value of fixed assets and assets not
included on IC Sensors balance sheet.
2) Amortization of goodwill and other intangibles.
3) Interest on acquisition financing and amortization of debt financing costs and a
reduction of interest income due to lower cash balances.
4) Assumed tax benefit resulting from IC Sensors loss and adjustments at U.S.
statutory rate.
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
MEASUREMENT SPECIALTIES, INC
PRO FORMA COMBINED CONDENSED INCOME STATEMENT
FOR THE NINE MONTHS ENDED DECEMBER 31, 1999
(UNAUDITED)
(Dollars in thousands except per
share amounts) Historical
--------------------- Pro Forma
MSI IC Sensors Adjustments Combined
------- ------------ ----------------- ----------
<S> <C> <C> <C> <C>
Net sales $43,426 $ 9,518 $ 52,944
Cost of goods sold 24,166 9,371 306 (1) 33,843
------- ------------ ----------------- ----------
Gross profit 19,260 147 (306) 19,101
------- ------------ ----------------- ----------
Selling, general and administrative 11,601 3,353 23 (2) 14,977
Research and development, net of
customer funding 1,314 1,361 2,675
Interest (net) and
other income (expense) 217 (120) 687 (3) 1,024
------- ------------ ----------------- ----------
Income (loss) before
income taxes 6,128 (4,687) (1,016) (425)
------- ------------ ----------------- ----------
Provision (benefit)
for income taxes 1,532 0 (2,281) (4) (749)
------- ------------ ----------------- ----------
Net income (loss) 4,596 (4,687) 1,265 1,174
------- ------------ ----------------- ----------
Earnings (loss) per common share
Basic $ 1.22 $ 0.31
Diluted $ 1.07 $ 0.27
Weighted average shares (000's)
Basic 3,766 3,766
Diluted 4,315 4,315
<FN>
1) Depreciation associated with appraised value of fixed assets and assets not
included on IC Sensors balance sheet.
2) Amortization of goodwill and intangible assets.
3) Interest on acquisition financing and amortization of debt financing costs and a
reduction of interest income due to lower cash balances.
4) Interest on acquisition financing and amortization of debt financing costs
5) Assumed tax benefit resulting from IC Sensors loss and adjustments at U.S.
statutory rate.
</TABLE>
<PAGE>
Exhibit 99.5
IC SENSORS, INC.
FINANCIAL STATEMENTS
AS OF DECEMBER 31, 1999 AND 1998
TOGETHER WITH AUDITORS' REPORT
<PAGE>
REPORT OF INDEPENDENT PUBLIC ACCOUNTANTS
To the Stockholder of
IC Sensors, Inc.:
We have audited the accompanying balance sheets of IC Sensors, Inc. (a
California corporation and a wholly-owned subsidiary of PerkinElmer, Inc.) (see
Note 1) as of December 31, 1999 and 1998, and the related statements of
operations and accumulated deficit and cash flows for the years then ended.
These financial statements are the responsibility of the Company's management.
Our responsibility is to express an opinion on these financial statements based
on our audits.
We conducted our audits in accordance with auditing standards generally accepted
in the United States. Those standards require that we plan and perform the
audit 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.
In our opinion, the financial statements referred to above present fairly, in
all material respects, the financial position of IC Sensors, Inc. as of December
31, 1999 and 1998, and the results of its operations and its cash flows for the
years then ended in conformity with accounting principles generally accepted in
the United States.
ARTHUR ANDERSEN LLP
Roseland, New Jersey
April 28, 2000
<PAGE>
<TABLE>
<CAPTION>
IC SENSORS, INC.
BALANCE SHEETS
AS OF DECEMBER 31, 1999 AND 1998
--------------------------------
ASSETS 1999 1998
- ------------------------------------------------------------------------ ------------- -------------
<S> <C> <C>
CURRENT ASSETS:
Cash and cash equivalents $ 615,057 $ 214,549
Accounts receivable, net of allowance for doubtful accounts of $539,454
and $402,609, respectively 2,500,724 6,568,376
Inventories, net (Notes 2 and 3) 2,271,936 4,041,486
Other current assets 110,883 146,086
------------- -------------
Total current assets 5,498,600 10,970,497
PROPERTY AND EQUIPMENT, net (Notes 2 and 4) 622,123 1,636,452
GOODWILL, net of accumulated amortization of $4,644,118 and $4,339,904,
respectively (Note 2) 2,966,082 3,270,296
------------- -------------
Total assets $ 9,086,805 $ 15,877,245
============= =============
LIABILITIES AND STOCKHOLDERS'
DEFICIT
- ------------------------------------------------------------------------
CURRENT LIABILITIES:
Accounts payable $ 603,015 $ 1,204,874
Accrued liabilities 1,353,063 1,526,376
Payable to Parent (Note 7) 25,667,386 26,000,667
------------- -------------
Total current liabilities 27,623,464 28,731,917
------------- -------------
COMMITMENTS AND CONTINGENCIES (Note 6)
STOCKHOLDERS' DEFICIT:
Common stock $1.00 par value, 500 shares authorized, issued and
outstanding 500 500
Additional paid-in capital 30,506,328 30,506,328
Accumulated deficit (49,043,487) (43,361,500)
------------- -------------
Total stockholders' deficit (18,536,659) (12,854,672)
------------- -------------
Total liabilities and stockholders' deficit $ 9,086,805 $ 15,877,245
============= =============
</TABLE>
The accompanying notes to combined financial statements are an integral part of
these balance sheets.
<PAGE>
<TABLE>
<CAPTION>
IC SENSORS, INC.
STATEMENTS OF OPERATIONS AND ACCUMULATED DEFICIT
FOR THE YEARS ENDED DECEMBER
----------------------------
31, 1999 AND 1998
----------------------------
1999 1998
------------- -------------
<S> <C> <C>
NET SALES (Note 8) $ 15,224,163 $ 27,729,325
COST OF SALES 15,452,199 22,265,156
------------- -------------
Gross (loss) profit (228,036) 5,464,169
SELLING, GENERAL AND ADMINISTRATIVE EXPENSE 5,367,589 7,223,399
------------- -------------
Loss from operations (5,595,625) (1,759,230)
OTHER EXPENSES 86,362 352,287
------------- -------------
Net loss (5,681,987) (2,111,517)
ACCUMULATED DEFICIT:
Beginning of year (43,361,500) (41,249,983)
------------- -------------
End of year $(49,043,487) $(43,361,500)
============= =============
</TABLE>
The accompanying notes to combined financial statements are an integral part of
these statements.
<PAGE>
<TABLE>
<CAPTION>
IC SENSORS, INC.
STATEMENTS OF CASH FLOWS
FOR THE YEARS ENDED DECEMBER
----------------------------
31, 1999 AND 1998
----------------------------
1999 1998
------------ ------------
<S> <C> <C>
CASH FLOWS FROM OPERATING ACTIVITIES:
Net loss $(5,681,987) $(2,111,516)
Adjustments to reconcile net loss to net cash provided by operating activities-
Depreciation and amortization 1,752,809 2,200,120
Changes in assets and liabilities-
Accounts receivable 4,067,651 (2,824,360)
Prepaid expenses and other current assets 35,203 17,387
Inventory 1,769,550 1,211,735
Accounts payable (601,859) (10,931)
Accrued expenses (173,313) (221,981)
Due to parent (333,281) 2,290,089
------------ ------------
Net cash provided by operating activities 834,773 550,543
CASH FLOWS FROM INVESTING ACTIVITIES --
Capital expenditures (434,265) (495,335)
------------ ------------
Increase in cash and cash equivalents 400,508 55,208
CASH AND CASH EQUIVALENTS AT BEGINNING OF YEAR 214,549 159,341
------------ ------------
CASH AND CASH EQUIVALENTS AT END OF YEAR $ 615,057 $ 214,549
============ ============
</TABLE>
The accompanying notes to combined financial statements are an integral part of
these statements.
<PAGE>
1. BASIS OF PRESENTATION
---------------------
IC Sensors, Inc. (the "Company") is engaged in the manufacture of micromachined
sensing and control components for the automotive, medical, industrial and
consumer products industries.
The common stock of the Company (formerly known as EG&G IC Sensors) was
wholly-owned by PerkinElmer, Inc. (the "Parent") until the Company's sale to
Measurement Specialties, Inc. ("MSI") in February 2000 (see Note 9). As also
discussed in Note 9, in addition to the common stock of the Company, MSI also
acquired from the Parent certain assets (primarily inventory and fixed assets)
from PerkinElmer Singapore Pte Ltd. (referred to as "Batam").
2. SUMMARY OF SIGNIFICANT
ACCOUNTING POLICIES
-------------------
Inventories
- -----------
Inventories are stated at the lower of cost or market, determined by the
first-in, first-out (FIFO) method.
Plant and Equipment
- -------------------
Plant and equipment are carried at cost. Major additions are capitalized;
expenditures for repairs and maintenance are charged against earnings as
incurred.
Plant and equipment are depreciated using the straight-line method over the
following estimated useful lives-
Machinery and equipment 3 to 7 years
Leasehold improvements 7 years
Use of Estimates
- ----------------
The preparation of the financial statements 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. Actual results could differ from those estimates.
Research and Development
- ------------------------
Research and development costs are charged to operations as incurred. Such
costs were $1,754,373 and $1,802,666 for the years ended December 31, 1999 and
1998, respectively.
Goodwill
- --------
Goodwill represents the excess of cost over the fair value of assets acquired
and liabilities assumed related to acquisitions by the Company. Goodwill is
amortized, on a straight-line basis, over 25 years.
The recoverability of long-term assets, including goodwill, is evaluated based
upon operating results and other changes in the business or business environment
(see Note 9).
<PAGE>
3. INVENTORIES
-----------
The components of net inventories at December 31, 1999 and 1998 consisted of the
following-
<TABLE>
<CAPTION>
1999 1998
------------ ------------
<S> <C> <C>
Raw materials $ 1,107,289 $ 1,756,884
Work-in-process 1,131,951 1,945,425
Finished goods 1,532,232 1,478,504
------------ ------------
3,771,472 5,180,813
Less- Reserves (1,499,536) (1,139,327)
------------ ------------
Net inventories $ 2,271,936 $ 4,041,486
============ ============
</TABLE>
4. PLANT AND EQUIPMENT, NET
------------------------
Plant and equipment consisted of the following at December 31, 1999 and 1998-
<TABLE>
<CAPTION>
1999 1998
------------ ------------
<S> <C> <C>
Machinery and equipment $ 9,374,279 $ 8,887,963
Leasehold improvements 889,720 941,771
------------ ------------
Total plant and equipment 10,263,999 9,829,734
Less- Accumulated depreciation (9,641,876) (8,193,282)
------------ ------------
Plant and equipment, net $ 622,123 $ 1,636,452
============ ============
</TABLE>
5. INCOME TAXES
------------
The results of operations of the Company are included in the consolidated tax
returns of the Parent. Accordingly, the Company has no deferred tax assets or
liabilities since those amounts are being paid or received by the Parent.
Deferred tax assets and liabilities would reflect temporary differences between
assets and liabilities for financial reporting purposes and income tax purposes
(see Note 9).
6. COMMITMENTS AND CONTINGENCIES
-----------------------------
The Company entered into various operating leases covering facilities and office
machines.
The following is a schedule by year of future annual minimum lease payments as
of December 31, 1999-
Fiscal Year-
2000 $325,320
2001 357,852
<PAGE>
7. RELATED PARTY TRANSACTIONS
--------------------------
The Company had sales to its Batam affiliate of $1,064,882 and $882,207 in 1999
and 1998, respectively. Included in selling, general and administrative
expenses is $794,000 and $752,450 for 1999 and 1998, respectively, representing
management charges from its Parent.
The Company has a payable of $25,667,386 and $26,000,667 at December 31, 1999
and 1998, respectively, to its Parent (including wholly-owned subsidiaries of
its Parent). Included in the payable to its Parent is $240,062 and $395,556
payable to Batam at December 31, 1999 and 1998, respectively.
The Company performs certain manufacturing, processing and research and
development functions for the benefit of Batam. In 1999 and 1998, included as a
reduction in selling, general and administrative expenses is $1,247,773 and
$36,398, respectively, of charges allocated to Batam.
These related party payable balances were treated as a capital contribution in
February 2000 (see Note 9).
8. SALES TO MAJOR CUSTOMERS
------------------------
In 1999, approximately 43% of the Company's net sales were to three customers.
In 1998, approximately 30% of the Company's net sales were to two customers.
9. SUBSEQUENT EVENT
----------------
In February 2000, the Parent entered into a stock purchase agreement with MSI,
whereby MSI acquired all of the stock of the Company. Additionally, MSI also
acquired certain inventory and fixed assets from the Parent related to the
Parent's Batam operations.
As part of the February 2000 purchase agreement discussed above, the Parent
agreed to assume and/or discharge certain of the Company obligations including
environmental liabilities, as defined, any intercompany liabilities, as defined
and all income tax obligations.
On February 11, 2000, the Company eliminated its entire related party payable
balance at that date as a contribution to capital.
<PAGE>
