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Previous: MUNICIPAL BOND TRUST CALIFORNIA INSURED SERIES 7A, 485BPOS, 1998-04-22 |
Next: HALSEY DRUG CO INC/NEW, PRE 14A, 1998-04-22 |
<PAGE>
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K/A
Amendment No. 2
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 6, 1998
IFR SYSTEMS, INC.
(Exact name of registrant as specified in its charter)
DELAWARE 0-14224 [48-1197645]
(State or other jurisdiction (Commission (IRS Employer
of incorporation) File Number) Identification No.)
10200 West York, Wichita, Kansas 67215
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code: (316) 522-4981
<PAGE>
ITEM 2. ACQUISITION OR DISPOSITION OF ASSETS *
*Document has been previously filed with the Securities and Exchange Commission
and is incorporated herein by reference and made a part hereof.
ITEM 7. FINANCIAL STATEMENTS AND EXHIBITS.
(a) FINANCIAL STATEMENTS.
Set forth below are the financial statements of Marconi Instruments Limited
appearing on pages F-1 through F-5 of the attached Appendix.
1. Income statements for the years ended March 31,1995;1996;1997
UK GAAP
2. Balance sheets as of March 31,1995;1996;1997 UK GAAP
3. Cash flows statement for the years ended March 31,1995;1996;1997
UK GAAP
4. Significant differences between UK GAAP and US GAAP
(b) PRO FORMA Financial Information.
Set forth below are unaudited PRO FORMA condensed consolidated
financial statements and accompanying explanatory notes, appearing on
pages P-1 through P-6 of the attached Appendix.
1. Unaudited PRO FORMA condensed consolidated balance sheet as of
December 31,1997.
2. Unaudited PRO FORMA condensed consolidated statement of income for
the year ended June 30,1997.
3. Unaudited PRO FORMA condensed consolidated statement of income for
the six months ended December 31,1997.
4. Notes to unaudited PRO FORMA condensed consolidated financial
statements.
<PAGE>
(c) The following exhibits are filed with the Form 8-K:
<TABLE>
<CAPTION>
Exhibit No. Description
--------------------------
<S> <C>
2.01 Share Sale and Purchase Agreement, dated February 6,
1998 among IFR Systems, Inc., IFR Systems Limited, and
The General Electric Company p.l.c.*
2.02 Deed of Tax Covenant, dated February 6, 1998, between
The General Electric Company, p.l.c., as Covenantor,
and IFR Systems Limited, as Purchaser.*
10.01 Credit Agreement, dated as of February 5, 1998, among
IFR Systems, Inc., The First National Bank of Chicago,
and various lenders.*
10.02 Form of Security Agreement executed by Registrant and
its United States subsidiaries. *
10.03 Form of Guaranty executed by each of Registrants United
States subsidiaries. *
10.04 Pledge Agreement between Registrant and First National
Bank of Chicago. *
10.05 Equitable Share Charge by Registrant to First National
Bank of Chicago. *
10.06 Form of Copyright Security Agreement executed by
Registrant and each of its United States subsidiaries. *
10.07 Form of Patent Security Agreements executed by
Registrant and each of its United States subsidiaries. *
10.08 Form of Trademark Security Agreement executed by
Registrant and each of its United States subsidiaries. *
</TABLE>
*Document has been previously filed with the Securities and Exchange Commission
and is incorporated herein by reference and made a part hereof.
<PAGE>
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 thereunto duly authorized.
IFR SYSTEMS, INC.
By: /s/ Alfred H. Hunt, III
----------------------------
Alfred H. Hunt, III
President and Chief Executive Officer
Date: April 22, 1998
<PAGE>
IFR LTD
(FORMERLY MARCONI INSTRUMENTS LTD)
FINANCIAL STATEMENTS
FOR THE YEARS ENDED MARCH 1995-1997
REGISTERED IN ENGLAND AND WALES COMPANY NUMBER 317241
F-1
<PAGE>
BALANCE SHEETS
The following balance sheets were reported in the Statutory accounts of IFR Ltd
(formerly Marconi Instruments Ltd)
<TABLE>
<CAPTION>
AS AT AS AT AS AT
31 MARCH 1995 31 MARCH 1996 31 MARCH 1997
L'000 L'000 L'000
<S> <C> <C> <C>
Fixed assets
Tangible assets 9,400 9,768 9,123
Investments- shares in Group
Companies 6,510 6,508 6,372
-------- -------- --------
15,910 16,276 15,495
Current Assets
Stock and contracts in progress 11,336 10,323 11,083
Debtors 11,228 13,647 14,310
Investments 0 296 351
Cash at bank and in hand 1,043 1,818 702
-------- -------- --------
23,607 26,084 26,446
Creditors- Amounts falling due within
one year (25,658) (25,438) (29,645)
-------- -------- --------
Net current assets / (liabilities) (2,051) 646 (3,199)
-------- -------- --------
Total assets less current liabilities 13,859 16,922 12,296
Provisions for liabilities and charges (519) (168) (296)
-------- -------- --------
Net assets 13,340 16,754 12,000
-------- -------- --------
-------- -------- --------
Capital and reserves
Called up share capital 500 500 500
Profit and loss account 12,840 16,254 11,500
-------- -------- --------
Equity Shareholders Funds 13,340 16,754 12,000
-------- -------- --------
-------- -------- --------
</TABLE>
F-2
<PAGE>
INCOME STATEMENTS
The following income statements were reported in the Statutory accounts
of IFR Ltd (formerly Marconi Instruments Ltd)
<TABLE>
<CAPTION>
YEAR ENDED YEAR ENDED YEAR ENDED
31 MARCH 1995 31 MARCH 1996 31 MARCH 1997
L'000 L'000 L'000
<S> <C> <C> <C>
Turnover 47,175 52,294 52,165
-------- -------- --------
Operating profit 3,755 5,201 4,175
-------- -------- --------
Profit on ordinary activities before
taxation 6,802 5,091 3,938
Taxation on profit on ordinary
activities (1,254) (1,677) (1,192)
-------- -------- --------
Profit on ordinary activities after
taxation 5,548 3,414 2,746
Dividends 0 0 (7,500)
-------- -------- --------
Transferred to reserves 5,548 3,414 (4,754)
Reserves bought forward 7,292 12,840 16,254
-------- -------- --------
Reserves carried forward 12,840 16,254 11,500
-------- -------- --------
-------- -------- --------
</TABLE>
F-3
<PAGE>
CASH FLOWS
The following cash flows have been drawn up from the statutory accounts.
<TABLE>
<CAPTION>
YEAR ENDED YEAR ENDED YEAR ENDED
31 MARCH 1995 31 MARCH 1996 31 MARCH 1997
L'000 L'000 L'000
<S> <C> <C> <C>
Net cash inflows from operating
activities 79 5,655 8,372
Returns on investments and servicing of
finance
Interest paid (145) (155) (114)
Interest received 20 47 13
Dividends paid 0 0 (7,500)
-------- -------- --------
Net cash inflow/(outflow) from the
servicing of finance (125) (108) (7,601)
Taxation
-------- -------- --------
UK corporation taxes
received/(paid) 120 (1,458) (3,380)
Investing activities
Purchase of tangible fixed assets (3,903) (3,314) (1,975)
Sale of fixed assets 3,730 0 0
-------- -------- --------
Net cash inflow/(outflow) from
investing. (173) (3,314) (1,975)
-------- -------- --------
Net cash (outflow)/inflow before
financing. (99) 775 (4,584)
-------- -------- --------
-------- -------- --------
-------- -------- --------
Increase/(decrease) in cash and cash
equivilents. (99) 775 (4,584)
-------- -------- --------
-------- -------- --------
</TABLE>
F-4
<PAGE>
SIGNIFICANT DIFFERENCES BETWEEN UK GENERALLY ACCEPTED
ACCOUNTING PRACTICE "GAAP" AND US GAAP
No significant differences between UK GAAP and US GAAP were noted.
F-5
<PAGE>
PRO FORMA CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)
The following pro forma condensed consolidated balance sheet as of December
31, 1997, and the pro forma condensed consolidated statements of income for the
year ended June 30, 1997, and six months ended December 31, 1997, give effect to
the acquisition of all of the share capital of Marconi Instruments
Ltd., a company incorporated in England ("Marconi") and its subsidiaries as if
these acquisitions occurred at the beginning of the period presented. The pro
forma information is based on the historical financial statements of Marconi and
subsidiaries, (collectively "Marconi") and IFR Systems, Inc. and subsidiary
("IFR") giving effect to the transaction under the purchase method of accounting
and the assumptions and adjustments in the accompanying notes to the pro forma
financial statements.
The pro forma financial statements have been prepared by IFR management
based upon the financial statements of IFR Systems, Inc. and Marconi
Instruments Ltd., included elsewhere herein. These pro forma statements may
not be indicative of the results that actually would have occurred if the
combination had been in effect on the dates indicated or which may be
obtained in the future. The pro forma financial statements should be read in
conjunction with the financial statements and notes of Marconi Instruments
Ltd. appearing on pages F-1 through F-5 of the attached Appendix, and the
audited consolidated financial statements of IFR included in its 1997 Annual
Report on Form 10-K.
P-1
<PAGE>
IFR SYSTEMS ,INC. AND SUBSIDIARIES
PRO FORMA CONDENSED CONSOLIDATED BALANCE SHEET(UNAUDTIED)
<TABLE>
<CAPTION>
DECEMBER 31,1997
ACQUISITION
AS REPORTED PRO FORMA PRO FORMA
IFR ADJUSTMENTS CONSOLIDATED
ASSETS
<S> <C> <C> <C>
CURRENT ASSETS
Cash and cash equivalents $ 6,761 $ 2,351 (B) $ 9,112
Accounts receivable 19,442 20,497 (B) 39,939
Inventories:
Finished products 8,543 13,807 (B) 22,350
Work in process 7,208 14,618 (B) 21,826
Materials 7,274 8,052 (B) 15,326
--------- -------- ----------
23,025 36,477 59,502
Prepaid expenses and sundry 487 2,310 (B) 2,797
Deferred income taxes 2,191 3,498 (B) 5,689
--------- -------- ----------
TOTAL CURRENT ASSETS 51,906 65,133 117,039
PROPERTY AND EQUIPMENT
Property and equipment 19,323 72,284 (B) 91,607
Allowances for depreciation (deduction) (11,111) (51,825) (B) (62,936)
--------- -------- ----------
8,212 20,459 28,671
PROPERTY UNDER CAPITAL LEASE
Building and machinery 4,519 - 4,519
Allowances for depreciation (deduction) (1,423) - (1,423)
--------- -------- ----------
3,096 - 3,096
OTHER ASSETS
Cost in excess of net assets acquired, less
amortization 8,898 70,090 (B) 78,988
Patents, trademarks and other intangibles, less
amortization - 2,080 (B) 2,080
Other 141 - 141
--------- -------- ----------
9,039 72,170 81,209
--------- -------- ----------
$ 72,253 $157,762 $ 230,015
--------- -------- ----------
--------- -------- ----------
LIABILITIES AND SHAREHOLDERS' EQUITY
CURRENT LIABILITIES
Short-term bank borrowings $ - $ 7,000 (B) $ 7,000
Accounts payable 4,540 25,071 (B) 29,611
Accrued compensation and payroll taxes 4,513 1,741 (B) 6,254
Other liabilities and accrued expenses 5,081 8,520 (B) 13,601
Current maturity of capital lease obligations 175 - 175
Current maturity of long-term debt - 1,750 (B) 1,750
Federal and state income taxes and local taxes 2,222 3,134 (B) 5,356
--------- -------- ----------
TOTAL CURRENT LIABILITIES 16,531 47,216 63,747
CAPITAL LEASE OBLIGATIONS 3,765 - 3,765
LONG-TERM DEBT - 98,250 (B) 98,250
DEFERRED INCOME TAXES 645 12,296 (B) 12,941
SHAREHOLDERS' EQUITY
Preferred stock, $.01 par value---authorized
1,000,000 shares, none issued --- --- ---
Common stock, $.01 par value---authorized
50,000,000 shares, issued 9,266,250
shares 93 - 93
Additional paid-in capital 6,258 - 6,258
Cost of common stock in treasury---1,060,805 -
(deduction) (8,315) - (8,315)
Cumulative translation adjustment 13 - 13
Retained earnings 53,263 - 53,263
--------- -------- ----------
51,312 - 51,312
--------- -------- ----------
$ 72,253 $157,762 $ 230,015
--------- -------- ----------
--------- -------- ----------
</TABLE>
P-2
See notes to unaudited pro forma condensed consolidated financial statements.
<PAGE>
IFR SYSTEMS, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF INCOME
(UNAUDITED)
<TABLE>
<CAPTION>
Year Ended June 30,1997
---------------------------------------------------------------
As Reported Pro Forma Pro Forma
IFR Marconi Adjustments Consolidated
(000's) (000's) (000's) (000's)
----------- --------------------------------------------------
<S> <C> <C> <C> <C>
SALES $ 103,517 $ 109,355 $ - $ 212,872
COST OF SALES 61,296 61,492 - 122,788
---------- ---------- --------- ----------
GROSS PROFIT 42,221 47,863 - 90,084
OPERATING EXPENSES
Selling 11,400 23,998 - 35,398
Administrative 8,781 5,773 3,739 (C) 18,293
Engineering 11,133 10,556 - 21,689
---------- ---------- --------- ----------
31,314 40,327 3,739 75,380
---------- ---------- --------- ----------
OPERATING INCOME 10,907 7,536 (3,739) 14,704
OTHER INCOME 101 (53) (8,826)(C) (8,778)
---------- ---------- --------- ----------
INCOME BEFORE INCOME
TAXES 11,008 7,483 (12,565) 5,926
INCOME TAXES 4,362 2,889 (3,476)(C) 3,775
---------- ---------- --------- ----------
NET INCOME $ 6,646 $ 4,594 $ (9,089) $ 2,151
---------- ---------- --------- ----------
---------- ---------- --------- ----------
NET INCOME PER
COMMON SHARE 0.82 0.57 (1.12) 0.26
---------- ---------- --------- ----------
---------- ---------- --------- ----------
NET INCOME PER COMMON
SHARES ASSUMING DILUTION 0.79 0.55 (1.08) 0.26
---------- ---------- --------- ----------
---------- ---------- --------- ----------
AVERAGE COMMON
SHARES OUTSTANDING 8,130 8,130 8,130 8,130
---------- ---------- --------- ----------
---------- ---------- --------- ----------
DILUTIVE COMMON
SHARES OUTSTANDING 8,421 8,421 8,421 8,421
---------- ---------- --------- ----------
---------- ---------- --------- ----------
</TABLE>
See notes to unaudited pro forma condensed consolidated financial statements.
P-3
<PAGE>
IFR SYSTEMS, INC. AND SUBSIDIARIES
PRO FORMA CONDENSED CONSOLIDATED STATEMENT OF INCOME
(UNAUDITED)
<TABLE>
<CAPTION>
Six Months Ended December 31,1997
----------------------------------------------------------
As Reported Pro Forma Pro Forma
IFR Marconi Adjustments Consolidated
(000's) (000's) (000's) (000's)
------- -----------------------------------------------
<S> <C> <C> <C> <C>
SALES $53,060 $ 53,730 $ - $ 106,790
COST OF SALES 29,900 30,054 - 59,954
------- ----------- ------------ ----------
GROSS PROFIT 23,160 23,676 - 46,836
OPERATING EXPENSES
Selling 5,820 11,690 - 17,510
Administrative 4,364 3,615 1,572((C) 9,551
Engineering 6,062 5,440 - 11,502
------- ----------- ------------ ----------
16,246 20,745 1,572 38,563
------- ----------- ------------ ----------
OPERATING INCOME 6,914 2,930 (1,572) 8,272
OTHER INCOME 58 428 (4,700)(C) (4,214)
------- ----------- ------------ ----------
INCOME BEFORE INCOME
TAXES 6,972 3,358 (6,272) 4,058
INCOME TAXES 2,806 1,141 (2,527)(C) 1,420
------- ----------- ------------ ----------
NET INCOME $4,166 $ 2,217 $ (3,745) $ 2,638
------- ----------- ------------ ----------
------- ----------- ------------ ----------
NET INCOME PER
COMMON SHARE 0.51 0.27 (0.46) 0.32
------- ----------- ------------ ----------
------- ----------- ------------ ----------
NET INCOME PER COMMON
SHARE ASSUMING DILUTION 0.48 0.26 (0.43) 0.31
------- ----------- ------------ ----------
------- ----------- ------------ ----------
AVERAGE COMMON
SHARES OUTSTANDING 8,198 8,198 8,198 8,198
------- ----------- ------------ ----------
------- ----------- ------------ ----------
DILUTIVE COMMON
SHARES OUTSTANDING 8,632 8,632 8,632 8,632
------- ----------- ------------ ----------
------- ----------- ------------ ----------
</TABLE>
P-4
See notes to unaudited pro forma condensed consolidated financial statements.
<PAGE>
IFR SYSTEMS, INC. AND SUBSIDIARIES
NOTES TO PRO FORMA CONDENSED CONSOLIDATED FINANCIAL
STATEMENTS (UNAUDITED)
(A) The pro forma condensed consolidated statements of income for the
year ended June 30, 1997 and the six months ended December 31, 1997 have
been prepared as if the purchase had taken place on July 1, 1996. The
December 31, 1997 pro forma condensed consolidated balance sheet has
been prepared assuming the transaction occurred on July 1,1996. Because
IFR and Marconi have different fiscal year ends, Marconi's results of
operations for the period from April 1,1996 to March 31,1997 have been
included in the pro forma condensed consolidated statement of income
for the year ended June 30,1997 and Marconi's results of operations for
the period April 1,1997 to September 30,1997 have been included in the
pro forma condensed consolidated statements of income for the six months
ended December 31,1997.
(B) This transaction is being accounted for as a purchase. The purchase
price has been allocated to the assets based on their estimated fair market
values. Estimated fair market values may not represent fair market values
that ultimately may be determined. The following are the pro forma
adjustments made to reflect Marconi's estimated fair market values as of
February 6,1998, the acquisition date:
<TABLE>
<CAPTION>
Amounts
(000'S)
-------
<S> <C>
Inventories $11,844
Property & Equipment 2,891
In- Process Technology 15,700
Intangible Assets & Liabilities 24,929
Goodwill 20,824
Deferred Income Taxes (12,296)
-------
Total $63,892
</TABLE>
The pro forma financial statements assume a $108,851,000 purchase
price, which includes transaction costs of approximately $1,912,000. The
purchase price was financed with a term loan of $100,000,000 and
short-term bank borrowings.
P-5
<PAGE>
(C) For purposes of determining the pro forma effect of the acquisition
on the IFR consolidated statements of income, the following pro forma
adjustments have been made (in thousands):
<TABLE>
<CAPTION>
YEAR ENDED SIX MONTHS ENDED
JUNE 30, 1997 DECEMBER 31, 1997
------------- ------------------
INCREASE (DECREASE) INCOME
<S> <C> <C>
1. Increase in amortization expense
resulting from amortization over 20
years of cost in excess of net assets
acquired. $(1,047) $(524)
2. Increase in amortization expense
resulting from intangible assets
amortized over various lives. $(1,455) $( 429)
3. Increase in amortization expense
resulting from amortization of
developed technology over
20 years. $(940) $( 470)
4. Increase in interest expense
resulting from borrowings to
finance cash portion of the
purchase price. $( 8,826) $(4,700)
5. Increase in period expense
resulting from amortization of
loan origination fees. $(297) $(149)
---------- --------
Total $(12,565) $(6,272)
</TABLE>
The pro forma statement of income for the year ended June 30, 1997 has not
been adjusted for the following nonrecurring charges which are expected to be
incurred within the 12-month period following the date of acquisition (in
thousands):
<TABLE>
<S> <C>
Write off of in process research and
development costs $15,700
Increase in valuation of inventory $11,844
</TABLE>
P-6
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