<PAGE> 1
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
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): October 9, 1998
MOSLER INC.
(EXACT NAME OF REGISTRANT AS SPECIFIED IN ITS CHARTER)
<TABLE>
<CAPTION>
<S> <C> <C>
DELAWARE 0-18054 31-1172814
(STATE OF INCORPORATION) (COMMISSION FILE NUMBER) (IRS EMPLOYER IDENT)
</TABLE>
8509 Berk Boulevard
Hamilton, OH 45015-2213
(ADDRESS OF PRINCIPAL EXECUTIVE OFFICES)
(513) 870-1900
(REGISTRANT'S TELEPHONE NUMBER, INCLUDING AREA CODE)
ITEM 2 ACQUISITION OR DISPOSITION OF ASSETS
On October 9, 1998 Mosler Inc., (the Company) purchased substantially
all the assets of the LeFebure Division (LeFebure) of De La Rue Cash Systems
Inc. and De La Rue Systems Americas Corporation. The total consideration paid by
the Company was $34 million subject to a working capitol adjustment to be paid
within 90 days. LeFebure specializes in the manufacture, distribution and
service of security equipment for financial institutions. In connection with the
purchase, the Company entered into a new $85 million credit facility.
<PAGE> 2
ITEM 7 FINANCIAL STATEMENTS AND EXHIBITS
(a) FINANCIAL STATEMENTS OF BUSINESS ACQUIRED.
LEFEBURE, A DIVISION OF
DE LA RUE SYSTEMS AMERICAS CORPORATION
AND DE LA RUE CASH SYSTEMS INC.
-------------------------------
FINANCIAL STATEMENTS
--------------------
MARCH 31, 1998
--------------
<PAGE> 3
Report of Independent Accountants
---------------------------------
To the Board of Directors of
Mosler Inc.
In our opinion, the accompanying balance sheet and the related statement of
operations and changes in divisional equity and of cash flows present fairly, in
all material respects, the financial position of LeFebure, a division of De La
Rue Systems Americas Corporation and De La Rue Cash Systems Inc. (the
"Division") at March 31, 1998 and the results of its operations and cash flows
for the year then ended in conformity with generally accepted accounting
principles. 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 audit. We conducted our audit of these statements in
accordance with generally accepted auditing standards that 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, assessing the accounting principles used and significant estimates
made by management, and evaluating the overall financial statement presentation.
We believe that our audit provides a reasonable basis for the opinion expressed
above.
PricewaterhouseCoopers LLP
December 9, 1998
Chicago, Illinois
<PAGE> 4
LEFEBURE, A DIVISION OF
DE LA RUE SYSTEMS AMERICAS CORPORATION AND
DE LA RUE CASH SYSTEMS INC.
BALANCE SHEET
AS OF MARCH 31, 1998 AND SEPTEMBER 30, 1998 (UNAUDITED)
(DOLLARS IN THOUSANDS)
- --------------------------------------------------------------------------------
September 30,
March 31, 1998
1998 (unaudited)
--------- -------------
ASSETS
Accounts receivable, net $15,582 $17,626
Due from other group companies 742 1,336
Inventories 15,705 15,873
Prepaid expenses and other 1,014 867
------- -------
33,043 35,702
------- -------
Property, plant and equipment
Land and land improvements 91 91
Buildings and improvements 2,742 2,742
Machinery and equipment 3,491 3,494
Furniture, computers and equipment 4,911 4,903
------- ------
11,235 11,230
Less: Accumulated depreciation 6,000 6,675
------- ------
5,235 4,555
------- -------
$38,278 $40,257
======= =======
LIABILITIES AND DIVISIONAL EQUITY
Current Liabilities
Accounts payable $ 6,134 $4,592
Accrued worker's compensation 3,684 3,167
Other accrued liabilities 7,917 7,499
Customer deposits 1,701 4,206
Deferred revenue 10,706 8,592
------- -------
30,142 28,056
------- -------
Accrued pension and other benefit liabilities 1,772 2,036
Commitments and contingencies (Note 3) ------- -------
Divisional equity 6,364 10,165
------- -------
$38,278 $40,257
======= =======
The accompanying notes are an integral part of this statement.
2
<PAGE> 5
LEFEBURE, A DIVISION OF
DE LA RUE SYSTEMS AMERICAS CORPORATION AND
DE LA RUE CASH SYSTEMS INC.
STATEMENT OF OPERATIONS AND CHANGES IN DIVISIONAL EQUITY
FOR THE YEAR ENDED MARCH 31, 1998 AND THE SIX-MONTHS ENDED
SEPTEMBER 30, 1998 (UNAUDITED)
(DOLLARS IN THOUSANDS)
- --------------------------------------------------------------------------------
September 30,
March 31, 1998
1998 (unaudited)
--------- ------------
Revenues:
Service $ 66,871 $38,943
Products 50,661 28,264
--------- -------
117,532 67,207
--------- -------
Cost of sales and services:
Service 61,817 34,312
Products 34,858 19,926
--------- -------
96,675 54,238
--------- -------
Gross profit 20,857 12,969
--------- -------
Allocated operating and other expenses:
Selling and marketing 14,752 6,714
Research and development 1,805 895
General and administrative 7,086 3,669
--------- -------
23,643 11,278
--------- -------
Net (loss) income $ (2,786) $ 1,691
--------- =======
Interdivisional activity 4,108
Divisional Equity, March 31, 1997 5,042
---------
Divisional Equity, March 31, 1998 $ 6,364
=========
The accompanying notes are an integral part of this statement.
3
<PAGE> 6
LEFEBURE, A DIVISION OF
DE LA RUE SYSTEMS AMERICAS CORPORATION AND
DE LA RUE CASH SYSTEMS INC.
STATEMENT OF CASH FLOWS
FOR THE YEAR ENDED MARCH 31, 1998 AND THE SIX-MONTHS ENDED
SEPTEMBER 30, 1998 (UNAUDITED)
(DOLLARS IN THOUSANDS)
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
September 30,
March 31, 1998
1998 (unaudited)
--------- -----------
<S> <C> <C>
Cash flows from operating activities:
Net (loss) income $(2,786) $ 1,691
Adjustments to reconcile net (loss) income to
net cash used in operating activities:
Depreciation 1,382 675
Changes in assets and liabilities:
Accounts receivable 3,354 (2,044)
Due from other group companies (742) (594)
Inventories (997) (168)
Prepaid expenses and other 225 147
Accounts payable and accrued expenses (3,973) (2,477)
Customer deposits 288 2,505
Deferred revenues 370 (2,114)
Accrued pension and other benefit liabilities (793) 271
------- -------
Net cash used in operating activities (3,672) (2,108)
------- -------
Cash Flows from investing activities:
Purchase of property and equipment (436) --
------- -------
Cash Flows from financing activities:
Interdivisional activity 4,108 2,108
------- -------
Net change in cash -- --
Cash - beginning of period -- --
------- -------
Cash - end of period $ -- $ --
======= =======
</TABLE>
The accompanying notes are an integral part of this statement.
4
<PAGE> 7
LEFEBURE, A DIVISION OF
DE LA RUE SYSTEMS AMERICAS CORPORATION
AND DE LA RUE CASH SYSTEMS INC.
NOTES FINANCIAL STATEMENTS
(DOLLARS IN THOUSANDS)
- --------------------------------------------------------------------------------
NOTE 1 - BASIS OF PRESENTATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES:
Description of business and basis of presentation
These financial statements include the assets, liabilities, revenues
and expenses of LeFebure, the security equipment division of De La Rue Systems
America Corporation and De La Rue Cash Systems Inc. which is part of De La Rue
PLC of England (the Division). The Division manufactures, markets, installs and
services security equipment products sold to financial institutions and other
commercial and industrial entities worldwide. On October 9, 1998 the Division
was acquired by Mosler Inc.
The financial statements reflect the "carved-out" financial position
and results of operations of the Division using management estimates. The
assets, liabilities and results of operations specifically related to the
Division have been included in the financial statements. When specific
identification was not practicable, the allocation of expenses to the Division
(see Note 2) was done on a basis that in the opinion of management is
reasonable. However, such expenses are not necessarily indicative of, and it is
not practical for management to estimate the level of, expenses which might have
been incurred had the Division been operating as a stand-alone entity.
Use of estimates
The preparation of these financial statements requires management to
make estimates and assumptions that affect the reported amounts of 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.
Revenue recognition
Revenues from security equipment sales are recognized upon final
installation of the equipment. Revenues for service contracts are deferred and
recognized on the straight-line method over the contractual period, normally one
year. Other service revenues are recognized as services are performed.
Income taxes
The results of the Division's operations are included in its parent's
consolidated U.S. Federal and foreign tax returns. Had income taxes or income
tax benefits been allocated to the Division to approximate a stand alone
presentation the effect on these financial statements would not be material. Due
to the Division's cumulative losses, tax benefits recorded would have been
reduced by full valuation allowances.
Research and development
Research and development costs are expensed as incurred.
5
<PAGE> 8
LEFEBURE, A DIVISION OF
DE LA RUE SYSTEMS AMERICAS CORPORATION
AND DE LA RUE CASH SYSTEMS INC.
NOTES FINANCIAL STATEMENTS
(DOLLARS IN THOUSANDS)
- --------------------------------------------------------------------------------
Accounts receivable
Accounts receivable represent amounts due from customers on product
sales. The Division has provided $1,160 and $1,234 as an allowance for doubtful
accounts at March 31, 1998 and September 30, 1998 (unaudited), respectively.
Accounts receivable from customers are unsecured.
Due from other group companies
Amounts due from other group companies consist of expenses paid by the
Division for group companies owned by De La Rue plc. Such expenses arose from
the separation of the Division for purposes of the preparation of these
"carve-out" financial statements.
Product warranty
The Division provides for estimated product warranty costs at the time
of sale.
Inventories
Inventories are stated at the lower of cost or market using the first
in, first out method. Inventory components consist of the following at March 31,
1998 and September 30, 1998 (unaudited):
<TABLE>
<CAPTION>
September 30,
March 31, 1998
1998 (unaudited)
--------- -------------
<S> <C> <C>
Raw materials $ 7,163 $ 4,849
Finished goods 13,050 14,548
------- -------
20,213 19,397
Less - allowance for slow moving and obsolete inventory (4,508) (3,524)
------- -------
$15,705 $15,873
======= =======
</TABLE>
Property, plant and equipment
Property, plant and equipment are stated at cost. Depreciation is
determined for financial reporting purposes using the straight-line basis over
the estimated useful lives. Depreciation expense totaled $1,382 for the fiscal
year ended March 31, 1998.
Upon retirement or sale of assets, the cost and related accumulated
depreciation are removed from the respective accounts and any resulting gain or
loss is recognized currently. Expenditures for maintenance and repairs are
charged to operations as incurred; major improvements are capitalized.
The Division assesses the recoverability of its long-lived assets in
accordance with SFAS No. 121 on an annual basis or whenever adverse events or
changes in circumstances or business climate indicate that expected undiscounted
future cash flows may not be sufficient to recover the recorded intangible
assets. No impairment resulting from such an analysis occurred during fiscal
1998.
6
<PAGE> 9
LEFEBURE, A DIVISION OF
DE LA RUE SYSTEMS AMERICAS CORPORATION
AND DE LA RUE CASH SYSTEMS INC.
NOTES FINANCIAL STATEMENTS
(DOLLARS IN THOUSANDS)
- --------------------------------------------------------------------------------
Concentration of credit risk
Substantially all of the Division's accounts receivable are from
entities in the financial services industry whose ability to meet their
obligation to the Division is dependent upon prevailing economic conditions
within the industry. The Division performs periodic credit evaluations of its
customers' financial condition and generally does not require collateral. During
the year ended March 31, 1998, the Division had two customers which represented
18% and 10%, respectively, of revenues and 18% and 14%, respectively, of
accounts receivable at March 31, 1998.
Employee benefits
Division employees participated in a defined benefit pension plan
frozen as of June 1993. No future benefits are earned under this terminated
plan. It is the Division's policy to maintain accruals at least equal to the
difference between the actuarially determined amount of liabilities and the
value of plan assets at the measurement date. The status of the terminated plan
at March 31, 1998 was as follows:
Liabilities:
Salaried $3,662
Hourly 1,713
------
5,375
------
Assets:
Salaried 3,604
Hourly 1,557
------
$5,161
------
Net liability $ 214
======
The Division maintains a liability for the unfunded post retirement
medical benefits due certain retirees under a plan that was frozen as of June
1993. The accrual aggregated $1,675 at March 31, 1998. No additions to the
accrual have been made since the plan was terminated and all payments under the
plan are charged against the accrual.
The Division maintains two defined contribution plans. Division
contributions under these plans aggregated $1,464 for the year ended March 31,
1998.
NOTE 2 -ALLOCATIONS:
The financial statements reflect allocations to the Division of
expenses of its ongoing business. Amounts related to cost of sales and services
are based upon product line standard cost of sales, standard labor or other
methods determined to be reasonable by management. Costs related to sales and
marketing, research and development, and general and administrative matters were
allocated based upon specific cost drivers related to product lines where
available, or upon other methods determined to be reasonable by management.
7
<PAGE> 10
LEFEBURE, A DIVISION OF
DE LA RUE SYSTEMS AMERICAS CORPORATION
AND DE LA RUE CASH SYSTEMS INC.
NOTES FINANCIAL STATEMENTS
(DOLLARS IN THOUSANDS)
- --------------------------------------------------------------------------------
Divisional equity includes cumulative retained earnings (loss) and net
cumulative interdivisional activity between the Division and its parent,
including all cash activity, but excluding expenses arising from the separation
of the division for purposes of the preparation of these "carve-out" financial
statements. Cumulative retained earnings (loss) are not specifically identified
by the Division. No interest is charged to the Division on the interdivisional
activity account.
In the opinion of management, the allocations were made on a reasonable
and consistent basis; however, they are not necessarily indicative of the level
that might have been incurred on a stand-alone basis. The amounts that would
have been or will be incurred on a stand-alone basis could differ from the
amounts allocated due to economies of scale, differences in management
technique, or an organization that requires more or fewer employees, related
systems and expenses.
NOTE 3 - COMMITMENTS AND CONTINGENCIES:
Operating leases
The Division leases certain of its facilities and equipment under
noncancelable operating leases. Rent expense under these operating leases
included in the statement of operations aggregated approximately $3,900 for the
year ended March 31, 1998. Future minimum annual rental payments under
non-cancelable operating lease agreements are as follows for the fiscal year
ended March 31:
<TABLE>
<S> <C>
1999 $4,056
2000 580
2001 302
2002 144
2003 46
------
$5,128
======
</TABLE>
The Division is subject to various legal actions, governmental
investigations, and proceedings relating to various matters incidental to its
business including, but not limited to, sales tax assessments, employment
discrimination and disputed liability claims. The Division intends to vigorously
defend these matters. While the outcome of such matters cannot be predicted with
certainty, in the opinion of management, after reviewing such matters and
consulting with the Division's counsel, any liability which may ultimately be
incurred that has not been accrued, is not expected to materially affect the
financial position and results of operation of the Division.
8
<PAGE> 11
(b) PRO FORMA FINANCIAL INFORMATION.
PRO FORMA CONDENSED FINANCIAL STATEMENTS (UNAUDITED)
MOSLER INC. AND LEFEBURE CORPORATION
The following unaudited pro forma condensed statements of operations of Mosler
Inc. and LeFebure Corporation ("LeFebure") for the twelve months ended June 27,
1998 and for the three months ended September 30, 1998 assumes the purchase of
LeFebure had been consummated on July 1, 1997 and July 1, 1998, respectively.
The unaudited pro forma balance sheet assumes the purchase had been consummated
on September 30, 1998. The pro forma information is based on the historical
financial statements of Mosler Inc. and LeFebure giving effect to the
transaction under the purchase method of accounting and the assumptions and
adjustments in the accompanying footnotes to the pro forma financial statements.
The unaudited pro forma statements have been prepared by Mosler Inc. based upon
the historical financial statements of LeFebure and Mosler Inc. and may not be
indicative of the results that may have actually occurred if the combination
had been effect on the date indicated or for the periods presented or which may
be obtained in the future. The pro forma financial statements should be read in
conjunction with the audited financial statements and notes of LeFebure
included in Item 7a to this filing.
<PAGE> 12
UNAUDITED PRO FORMA COMBINED STATEMENT OF OPERATIONS (UNAUDITED)
TWELVE MONTHS ENDED JUNE 27, 1998
(IN THOUSANDS OF DOLLARS EXCEPT SHARE DATA)
- -------------------------------------------------------------------------------
<TABLE>
<CAPTION>
TWELVE MONTHS ENDED
------------------------------------------------------------
PRO FORMA COMBINED
MOSLER LEFEBURE ADJUSTMENTS TOTAL
------------------------------------------------------------
<S> <C> <C> <C> <C>
NET SALES:
Service $ 104,320 $ 66,871 $ 171,191
Products 122,480 50,661 -- 173,141
----------- ----------- --------- ----------
Total net sales 226,800 117,532 -- 344,332
----------- ----------- --------- ----------
COST OF SALES:
Service 77,482 61,817 139,299
Products 97,239 34,858 132,097
Restructuring 581 -- -- 581
----------- ----------- --------- ----------
Total cost of sales 175,302 96,675 -- 271,977
----------- ----------- --------- ----------
Gross profit 51,498 20,857 72,355
SELLING AND ADMINISTRATIVE EXPENSES (37,599) (23,643) (61,242)
GAIN ON TERMINATION OF
POSTRETIREMENT BENEFIT PLAN 11,889 -- 11,889
OTHER INCOME (EXPENSE) (153) -- (1,320) (a) (1,473)
----------- ----------- --------- ----------
OPERATING INCOME 25,635 (2,786) (1,320) 21,529
----------- ----------- --------- ----------
DEBT EXPENSE:
Interest expense 20,283 -- 2,726 (b) 23,009
Amortization of debt issuance costs and expense 577 -- 416 (c) 993
Interest income (4) -- -- (4)
----------- ----------- --------- ----------
Total 20,856 -- 3,142 23,998
----------- ----------- --------- ----------
INCOME (LOSS) BEFORE INCOME TAXES AND
PREFERRED STOCK CHARGES 4,779 (2,786) (4,462) (2,469)
PROVISION FOR INCOME TAXES 149 -- -- 149
----------- ----------- --------- ----------
INCOME (LOSS) BEFORE PREFERRED STOCK CHARGES 4,630 (2,786) (4,462) (2,618)
PREFERRED STOCK CHARGES:
Dividends (10,243) -- (10,243)
Amortization of discount (638) -- -- (638)
----------- ----------- --------- ----------
Total (10,881) -- -- (10,881)
----------- ----------- --------- ----------
NET LOSS APPLICABLE TO COMMON STOCKHOLDERS (6,251) (2,786) (4,462) (13,499)
=========== =========== ========= ==========
PER COMMON SHARE:
Basic and diluted net loss applicable to
common stockholders $ (2.99) $ (6.45)
=========== =========== ========= ==========
WEIGHTED AVERAGE COMMON SHARES OUTSTANDING 2,091,702 2,091,702
=========== =========== ========= ==========
</TABLE>
(a) Represents the increase in amortization expense resulting from the
additional goodwill recorded upon the purchase of LeFebure.
(b) Reflects the incremental interest expense Mosler Inc. would have incurred
on the additional debt resulting from the acquisition of LeFebure,
calculated using the applicable borrowing rates during the period
outstanding.
(c) Represents the amortization of debt origination fees incurred as part of the
new Credit Agreement.
<PAGE> 13
UNAUDITED PRO FORMA COMBINED STATEMENT OF OPERATIONS (UNAUDITED)
THREE MONTHS ENDED SEPTEMBER 30, 1998
(IN THOUSANDS OF DOLLARS EXCEPT SHARE DATA)
- -------------------------------------------------------------------------------
<TABLE>
<CAPTION>
THREE MONTHS ENDED
-----------------------------------------------------------------
PRO FORMA COMBINED
MOSLER LEFEBURE ADJUSTMENTS TOTAL
-----------------------------------------------------------------
<S> <C> <C> <C> <C>
NET SALES:
Service $ 24,245 $ 19,811 $ 44,056
Products 33,136 15,538 -- 48,674
----------- -------- ----------- ----------
Total net sales 57,381 35,349 -- 92,730
----------- -------- ----------- ----------
COST OF SALES:
Service 18,378 18,054 36,432
Products 26,720 10,236 36,956
Restructuring 1,589 -- -- 1,589
----------- -------- ----------- ----------
Total cost of sales 46,687 28,290 -- 74,977
----------- -------- ----------- ----------
Gross profit 10,694 7,059 17,753
SELLING AND ADMINISTRATIVE EXPENSES (9,107) (6,552) (15,659)
GAIN ON TERMINATION OF
POSTRETIREMENT BENEFIT PLAN -- --
OTHER INCOME (EXPENSE) (107) (270) (330) (a) (707)
----------- -------- ----------- ----------
OPERATING INCOME 1,480 237 (330) 1,387
----------- -------- ----------- ----------
DEBT EXPENSE:
Interest expense 5,343 681 (b) 6,024
Amortization of debt issuance costs and expense 258 104 (c) 362
Interest income (5) (86) -- (91)
----------- -------- ----------- ----------
Total 5,596 (86) 785 6,295
----------- -------- ----------- ----------
PREFERRED STOCK CHARGES (4,116) 323 (1,115) (4,908)
PROVISION FOR INCOME TAXES (1) -- -- (1)
----------- -------- ----------- ----------
INCOME (LOSS) BEFORE PREFERRED STOCK CHARGES (4,115) 323 (1,115) (4,907)
PREFERRED STOCK CHARGES:
Dividends (2,416) (2,416)
Amortization of discount (109) -- -- (109)
----------- -------- ----------- ----------
Total (2,525) -- -- (2,525)
----------- -------- ----------- ----------
NET LOSS APPLICABLE TO COMMON STOCKHOLDERS (6,640) 323 (1,115) (7,432)
=========== ======== =========== ==========
PER COMMON SHARE:
Basic and diluted net loss applicable to common
stockholders $ (3.19) $ (3.55)
=========== ======== =========== ==========
WEIGHTED AVERAGE COMMON SHARES OUTSTANDING 2,091,702 -- $2,091,702
=========== ======== =========== ==========
</TABLE>
(a) Represents the increase in amortization expense resulting from the
additional goodwill recorded upon the purchase of LeFebure.
(b) Reflects the incremental interest expense Mosler Inc. would have incurred
on the additional debt resulting from the acquisition of LeFebure,
calculated using the applicable borrowing rates during the period
outstanding.
(c) Represents the amortization of debt origination fees
incurred as part of the new Credit Agreement.
<PAGE> 14
UNAUDITED PRO FORMA COMBINED BALANCE SHEET (UNAUDITED)
SEPTEMBER 30, 1998
(IN THOUSANDS OF DOLLARS)
- -------------------------------------------------------------------------------
<TABLE>
<CAPTION>
PRO FORMA COMBINED
ASSETS MOSLER LEFEBURE ADJUSTMENTS TOTAL
-------------------------------------------------
<S> <C> <C> <C> <C>
CURRENT ASSETS:
Cash and cash equivalents $ 417 $ -- $ 417
Accounts receivable (net) 55,686 17,626 73,312
Other receivables -- 1,336 1,336
Inventories 22,478 15,873 2,764 (a) 41,115
Other current assets 2,284 867 -- 3,151
-------- ------- ------- --------
Total current assets 80,865 35,702 2,764 119,331
-------- ------- ------- --------
FACILITIES:
Facilities, net 8,726 4,555 1,263 (a) 14,544
-------- ------- ------- --------
OTHER ASSETS:
Service agreements (net) 7,897 7,897
Deferred debt issuance costs (net) 2,456 1,770 (c) 4,226
Goodwill (net) 2,662 19,808 (b) 22,470
Intangible pension asset 94 94
Other 556 -- -- 556
-------- ------- ------- --------
TOTAL $103,256 $40,257 $25,605 $169,118
======== ======= ======= ========
</TABLE>
<PAGE> 15
UNAUDITED PRO FORMA COMBINED BALANCE SHEET (UNAUDITED)
SEPTEMBER 30, 1998
(IN THOUSANDS OF DOLLARS)
- -------------------------------------------------------------------------------
<TABLE>
<CAPTION>
LIABILITIES, REDEEMABLE STOCK AND COMMON PRO FORMA COMBINED
STOCKHOLDERS' DEFICIENCY MOSLER LEFEBURE ADJUSTMENTS TOTAL
---------------------------------------------------------
<S> <C> <C> <C> <C>
CURRENT LIABILITIES:
Accounts payable $ 17,821 $ 4,592 $ 22,413
Accrued liabilities:
Compensation and payroll taxes 5,780 -- 5,780
Product warranty 899 -- 899
Accrued workers' compensation 4,634 3,167 7,801
Accrued interest 2,670 -- 2,670
Other 9,794 7,499 17,293
Unearned revenue 11,582 8,592 20,174
Customer deposits -- 4,206 4,206
Income taxes payable 278 -- 278
Current portion of long-term debt 1,294 -- -- 1,294
---------- ------- --------- ----------
Total current liabilities 54,752 28,056 -- 82,808
---------- ------- --------- ----------
OTHER LIABILITIES:
Long-term debt 134,544 -- 35,770 (d) 170,314
Accrued pension and other benefit liabilities 453 2,036 -- 2,489
---------- ------- --------- ----------
Total other liabilities 134,997 2,036 35,770 172,803
---------- ------- --------- ----------
REDEEMABLE STOCK:
Series D increasing rate preferred stock 58,331 -- 58,331
Series C adjustable rate preferred stock 44,415 -- 44,415
Common stock 362 -- -- 362
---------- ------- --------- ----------
Total redeemable stock 103,108 -- -- 103,108
---------- ------- --------- ----------
COMMON STOCKHOLDERS' DEFICIENCY:
Common stock, $.10 par value; 4,000,000 shares authorized,
2,539,181 shares issued 254 -- 254
Accumulated deficit (183,610) -- (183,610)
Excess of additional pension liability over unrecognized
prior service cost (13) -- (13)
Redemption value of common stock held by ESOP (362) -- (362)
Divisional Equity 10,165 (10,165) (e) --
Foreign currency translation adjustments (1,391) -- -- (1,391)
---------- ------- --------- ---------
Total (185,122) 10,165 (10,165) (185,122)
Less treasury stock, at cost (458,773 shares at June 27, 1998 and
438,446 shares at June 28, 1997) (4,479) -- -- (4,479)
---------- ------- --------- ---------
Total common stockholders' deficiency (189,601) 10,165 (10,165) (189,601)
---------- ------- --------- ---------
TOTAL $ 103,256 $40,257 $ 25,605 $ 169,118
========== ======= ========= =========
</TABLE>
(a) Represents the step up in fair value of certain assets acquired from
LeFebure to their estimated fair value.
(b) Represents the purchase price paid in excess of net assets acquired.
(c) Represents bank fees incurred in obtaining the new Credit Facility used to
fund the acquisition of LeFebure.
(d) Represents the issuance of new debt used to fund the acquisition of
LeFebure.
(e) Represents the elimination of accumulated equity of LeFebure at the date of
acquisition.
<PAGE> 16
(c) EXHIBITS.
EXHIBIT NO. EXHIBIT
10.1 Asset Purchase Agreement, executed October 9, 1998
and dated as of September 30, 1998 by and among
Mosler Inc., De La Rue Systems Americas Corporation
and De La Rue Cash Systems Inc.*
10.2 Credit Agreement, dated October 9, 1998, among Mosler
Inc. and the Lenders named therein.*
* Previously filed
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.
DATED this 16 day of December, 1998
MOSLER INC.
By: /S/ Thomas J. Bell
Thomas J. Bell
Senior Vice President, Chief
Financial Officer and Treasurer
