<PAGE>
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) March 17, 1994
Harman International Industries, Incorporated
-------------------------------------------------------------------
(Exact name of registrant as specified in its charter)
Delaware
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(State or other jurisdiction of incorporation)
1-9764 11-2534306
- ------------------------ ---------------------------------
(Commission File Number) (IRS Employer Identification No.)
1101 Pennsylvania Avenue, N.W., Suite 1010, Washington, D.C. 20004
- -------------------------------------------------------------------
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code (202) 393-1101
----------------
Not Applicable
- -------------------------------------------------------------------
(Former name or former address, if changed since last report)
<PAGE>
Item 2. Acquisition or Disposition of Assets
On March 17, 1994, Harman International Industries, Incorporated
("Harman"), through its wholly owned subsidiary Harman Investment
Company, Incorporated, completed its acquisition and acquired from
Motor-Columbus AG and its affiliates ("Motor-Columbus") 100% of Studer
Revox AG ("Studer Revox"), a leading company in the professional audio
field, with particular strength in the recording and broadcast areas.
Motor-Columbus retained the Revox Consumer Products division and the
rights to use the Revox name.
Under the terms of the Stock Purchase Agreement dated February 3,
1994 by and among Harman, Motor-Columbus and Studer Revox, as amended,
Harman paid 100 Swiss Francs (approximately US $70.00) for all of the
issued and outstanding stock in Studer Revox. Harman assumed post-
acquisition indebtedness of Studer Revox of approximately 23 million
Swiss Francs (approximately US $16 million).
Studer Revox, which was founded in 1948, is headquartered in
Regensdorf, Switzerland. The company manufactures analog and digital
tape recorders, mixing consoles, switching systems, digital audio
workstations, professional compact disc players and recorders and
turnkey broadcasting studios. Its principal subsidiaries are located in
France, the United States, Canada, Germany, the United Kingdom, Japan,
Singapore and Austria. Harman currently intends to continue to use
Studer Revox's facilities for the same purposes as they were previously
used.
Item 7. Financial Statements and Exhibits
The financial statements required by Items 7 (a) and (b) are filed
as a part of this Current Report on Form 8-K/A. The pro forma combined
results of operations for Studer Revox and Harman are provided for the
twelve month period ending December 31, 1993. The statement of
operations data for Harman for the twelve month period ended December
31, 1993 has been derived from quarterly unaudited consolidated
financial statements of the Company and its subsidiaries. The
financial data for the Studer Revox statement of operations for the
three month period ending March 31, 1994 and the balance sheet as of
March 31, 1994 are included in the Company's Condensed Consolidated
Financial Statements filed today in the Company's SEC Report on Form 10-
Q. Prior to the acquisition, Studer Revox reported on a calendar
fiscal year and due to the practices in existence for interim reporting
at Studer Revox and the sale of assets by Studer Revox prior to the
acquisition, the preparation of interim period pro forma financial
statements is not practicable.
2
<PAGE>
Item 7. Financial Statements and Exhibits (continued)
Exhibit Description
- -------- ------------
1.1 Audited Consolidated Financial Statements of Studer
Revox AG for the year ended December 31, 1993.
1.2 Proforma combined results of operations for the year
ended December 31, 1993 to give effect to the Studer
acquisition as though it occurred on January 1, 1993.
3
<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 hereunto duly authorized.
HARMAN INTERNATIONAL
INDUSTRIES, INCORPORATED
By: _______________________
Sandra B. Robinson
Vice President - Financial
Operations
Date: May 12, 1994
4
<PAGE>
EXHIBIT INDEX
-------------
Exhibit Description Page
- -------- ------------- -----
1.1 Audited Consolidated Financial Statements
of Studer Revox AG for the year ended
December 31, 1993. 6-22
1.2 Pro forma combined results of operations
for the Company and Studer for the year
ended December 31, 1993 to give effect to
the Studer Acquisition as though it
occurred on January 1, 1993. 23-26
5
<PAGE>
Exhibit 1.1
6
<PAGE>
STUDER REVOX AG AND SUBSIDIARIES
================================
CONSOLIDATED FINANCIAL STATEMENTS
AS OF DECEMBER 31, 1993
TOGETHER WITH AUDITORS' REPORT
7
<PAGE>
REPORT OF INDEPENDENT PUBLIC ACCOUNTANT
To the Board of Directors of
Studer Revox AG
We have audited the accompanying consolidated balance sheet of Studer
Revox AG (a Swiss corporation) and subsidiaries as of December 31, 1993,
and the related consolidated statements of income, shareholders' equity
and cash flows for the year 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 audit.
We conducted our audit in accordance with generally accepted auditing
standards. 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 audit
provides a reasonable basis for our opinion.
In our opinion, the financial statements referred to above present fair-
ly, in all material respects, the financial position of Studer Revox AG
and subsidiaries as of December 31, 1993, and the results of their
operations and their cash flows for the year then ended in accordance
with the accounting principles generally accepted in the United States.
ARTHUR ANDERSEN AG
/s/ Thomas Stenz /s/ Louis Siegrist
Thomas Stenz Louis Siegrist
Zurich, March 17, 1994
8
<PAGE>
STUDER REVOX AG AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEET - DECEMBER 31, 1993
(in thousands of Swiss Francs)
A S S E T S
CURRENT ASSETS:
Cash 5,246
Marketable securities 3,307
Receivables (net of allowance for
doubtful accounts of 7,807) 33,430
Inventories 49,072
Prepaid expenses and other
current assets
4,318
-------
Total current assets 95,373
-------
NON-CURRENT ASSETS:
Property, plant and equipment, net 47,253
Excess of cost over fair value
of assets acquired, net of accumulated amortization
of 382 3,113
Other assets 3,070
-------
Total non-current assets 53,436
-------
148,809
=======
The accompanying notes are an integral part of this
consolidated balance sheet.
9
<PAGE>
STUDER REVOX AG AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEET - DECEMBER 31, 1993
(in thousands of Swiss Francs)
LIABILITIES AND SHAREHOLDERS' EQUITY
CURRENT LIABILITIES:
Short-term borrowings 20,097
Accounts payable 21,441
Payable to parent company 2,079
Accrued liabilities 25,224
-------
Total current liabilities 68,841
-------
NON-CURRENT LIABILITIES:
Loan from parent company 52,511
Mortgages 36,800
Other long-term debt 8,865
-------
Total non-current liabilities 98,176
-------
MINORITY INTERESTS 845
-------
SHAREHOLDERS' EQUITY:
Share capital, 277,000 registered shares
issued at S.Fr. 100 each 27,700
Accumulated deficit (47,625)
Cumulative translation adjustments 872
-------
Total shareholders' equity (19,053)
-------
148,809
=======
The accompanying notes are an integral part of this
consolidated balance sheet.
10
<PAGE>
STUDER REVOX AG AND SUBSIDIARIES
CONSOLIDATED STATEMENT OF
INCOME FOR THE YEAR ENDED
DECEMBER 31, 1993
(in thousands of Swiss Francs except share and per share amounts)
NET SALES 134,739
COST OF SALES (83,501)
-------
Gross profit 51,238
SELLING, GENERAL AND ADMINISTRATIVE EXPENSES (79,229)
-------
Operating loss (27,991)
-------
OTHER EXPENSES:
Interest, net (8,835)
Foreign exchange differences (253)
Other (2,433)
-------
(11,521)
-------
Loss before taxes (39,512)
TAXES 2,083
-------
Net loss before minority interests (37,429)
MINORITY INTERESTS (54)
-------
Net loss (37,483)
=======
Average number of shares outstanding 277,000
=======
Net loss per share (135.32)
======
The accompanying notes are an integral part of this
consolidated statement.
11
<PAGE>
STUDER REVOX AG AND SUBSIDIARIES
CONSOLIDATED STATEMENT OF
SHAREHOLDERS' EQUITY FOR THE YEAR
ENDED DECEMBER 31, 1993
(in thousands of Swiss Francs)
Share Accumulated Translation
Capital deficit adjustment
------- ----------- -----------
Balance, December 31, 1992 27,700 (10,142) -
Translation differences 872
Net loss (37,483)
------- -------- -----
Balance, December 31, 1993 27,700 (47,625) 872
======= ======== =====
The accompanying notes are an integral part of this
consolidated statement.
12
<PAGE>
STUDER REVOX AG AND SUBSIDIARIES
CONSOLIDATED STATEMENT OF
CASH FLOWS FOR THE YEAR ENDED
DECEMBER 31, 1993
(in thousands of Swiss Francs)
CASH FLOW FROM OPERATING ACTIVITIES:
Net loss (37,483)
Depreciation and amortization 6,738
Gain on sale of property (3,366)
(Increase) decrease in-
Receivables 2,813
Inventories 10,728
Other current assets 1,105
Increase (decrease) in-
Accounts payable 6,202
Accrued liabilities (18,969)
-------
Net cash used in operating activities (32,232)
-------
CASH FLOW FROM INVESTING ACTIVITIES:
Proceeds from sale of property, plant and equipment 20,816
Investment in mutual funds (3,307)
Capital expenditures for property, plant and
equipment (2,781)
Purchase of minorities (1,697)
-------
Net cash provided by investing activities 13,031
-------
CASH FLOW FROM FINANCING ACTIVITIES:
Net borrowings under lines of credit (28,908)
Repayments of mortgages (7,600)
Borrowings from parent company 39,011
Foreign currency translation and other (530)
-------
Net cash provided by financing activities 1,973
-------
Net increase (decrease) in cash (17,228)
Cash at beginning of year 22,474
-------
Cash at end of year 5,246
=======
SUPPLEMENTAL INFORMATION:
Total interest paid 3,618
Total taxes paid 542
=======
The accompanying notes are an integral part of this
consolidated statement.
13
<PAGE>
STUDER REVOX AG AND SUBSIDIARIES
NOTES TO THE CONSOLIDATED
FINANCIAL STATEMENTS
DECEMBER 31, 1993
(in thousands of Swiss Francs unless otherwise stated)
1. Operations and ownership
The Company's predominant business is the design, manufacture and
distribution of high fidelity audio and video products for the con-
sumer electronics and professional studio markets. Products are
manufactured and distributed in Switzerland and internationally
under the "Studer" and "Revox" brand names.
The Company is wholly owned by Motor-Columbus AG, Baden,
Switzerland as of December 31, 1993. As more fully described in
Note 17, the Company subsequently sold its Revox Consumer
Electronics business and the Swiss real estate to other companies
owned by Motor-Columbus. At the same time, the Company was
recapitalized and sold to Harman International Industries Inc.
2. Summary of significant accounting policies
Presentation of the financial statements
----------------------------------------
In connection with the acquisition of the Company by Harman
International Industries Inc., the Company is required to present
consolidated financial statements in accordance with U.S. generally
accepted accounting principles. Such consolidated financial
statements have been prepared for the first time at December 31,
1993. For this reason, no comparative financial information is
available.
Consolidation principles
------------------------
The consolidated balance sheet and income statement of Studer Revox
AG includes all majority owned subsidiaries. All intercompany
balances and transactions as well as intercompany profit in
inventories have been eliminated. Minority interests in Studer
Revox Japan are shown separately in the consolidated balance sheet
and income statement.
Foreign currency translation
----------------------------
Assets and liabilities of foreign subsidiaries are translated to
Swiss Francs at the foreign exchange rate in effect at the balance
sheet date. Income statements of foreign subsidiaries are
translated at the average rate for the year. Translation gains and
losses resulting from the application of this method in 1993 are
shown in a separate component of shareholders' equity. Cumulative
14
<PAGE>
- 2 -
translation adjustments from previous years have not been
separately calculated.
Income recognition
------------------
Revenue is recognized upon shipment of goods. For certain long term
contracts, revenue is also recognized upon specific and identified
partial shipments being made.
Marketable securities
---------------------
Marketable securities are stated at cost which approximates market
values.
Inventories
-----------
Inventories are stated at the lower of cost or market. Cost is
determined principally by the first-in, first-out method. Reserves
for slow moving and obsolete articles are provided by using a
systematic reserve calculation based on production dates or other
appropriate procedures.
Property, plant and equipment
-----------------------------
Property, plant and equipment is recorded at cost or in case of
major capital leases at the present value of the minimum future
lease payments.
Depreciation and amortization is provided primarily using the
straight-line method over the estimated useful lives of the
property.
Excess of cost over fair value of assets acquired
-------------------------------------------------
Goodwill resulting from an acquisition in the United States is
amortized over a period of 40 years, using the straight line
method.
Income taxes
------------
Income taxes payable are currently provided for based on the
taxable results reported by each individual subsidiary. Deferred
taxes are provided on timing differences between the results
reported for tax and financial purposes using the liability method.
No deferred taxes are recognized for future benefits resulting from
net operating losses because the realizability is highly uncertain
due to the history of losses. No deferred taxes are accrued
relating to undistributed earnings of S.Fr. 7 Mio. from foreign
subsidiaries because the Company has no intention to repatriate
such earnings in the foreseeable future.
15
<PAGE>
- 3 -
Research and development
------------------------
Research and development costs are expensed as incurred. The
company's expenditures for research and development for the year
ended December 31, 1993, amounted to S.Fr. 18.6 Mio.
Loss per share
--------------
The loss per share is calculated based on the average number of
shares outstanding during the year ended December 31, 1993.
3. Inventories
Inventories consist of the following:
Raw material, supplies and spare parts S.Fr. 32,310
Work in process 15,178
Finished goods 33,224
Reserves for slow moving and obsolete items (31,640)
-------------
S.Fr. 49,072
=============
4. Property, plant and equipment
Property, plant and equipment is set up as follows:
At cost-
Land and buildings S.Fr. 58,553
Machinery and tooling 24,426
Office furniture and equipment 17,875
Vehicles and other 1,399
-------------
S.Fr. 102,253
Less- Accumulated depreciation 55,000
-------------
S.Fr. 47,253
=============
Depreciation is calculated over the following estimated useful
lives.
Buildings 20-50 years
Machinery and tooling 5-10 years
Office furniture and equipment 3-10 years
Vehicles 3- 5 years
16
<PAGE>
- 4 -
5. Short-term borrowings
Short-term borrowings predominantly reflect bank overdrafts under
available credit lines and other short-term bank loans. At December
31, 1993, formally approved credit lines amount to S.Fr. 16.8 Mio.
of which S.Fr. 16.0 Mio. were used as at that date. A significant
portion of the credit lines are guaranteed by the Company's
ultimate parent company, Motor-Columbus. In addition, bank
borrowings in Austria and Germany are secured by mortgages for an
amount of S.Fr. 2 Mio. Credit lines are cancellable at short notice
and bear interest at respective market rates applicable in each
country.
6. Accrued liabilities
Accrued liabilities include the following major items:
S.Fr.
Restructuring and personnel lay-off 6,049
Social security and other personnel benefits 3,822
Legal costs and pending legal claims 2,792
Warranty and other risks 7,194
Income taxes 540
Real estate taxes 1,350
Other accruals 3,477
------
25,224
======
7. Loan from parent company
Loans from the parent company are denominated in German Marks 27.0
Mio. and S.Fr. 29.5 Mio. The loans bear interest at 7.625% and
6.75%, respectively. No repayment dates are contractually speci-
fied. In connection with the sale of the Company to Harman
International Industries Inc. and the related sale of the Revox
Consumer Electronics business as more fully described in Note 17,
the loan has been partly transferred to other companies owned by
Motor-Columbus; the remaining balance has been waived as part of a
recapitalization of the Company.
17
<PAGE>
- 5 -
8. Mortgages
Mortgages are set up as follows at December 31, 1993:
- First preferred mortgage on Swiss real estate;
interest rate 6.25% S.Fr. 29,400
- First preferred mortgage on Swiss real estate;
interest rate 7.75% S.Fr. 4,500
- Second mortgage on Swiss real estate;
interest rate 6.75% S.Fr. 2,900
--------------
S.Fr. 36,800
==============
In connection with the sale of the Swiss real estate as more fully
explained in Note 17, the mortgages have been assumed by another
company owned by Motor-Columbus AG.
9. Other long-term debt
Other long-term debt is comprised of the following:
- amount due under capital leases,
due in installments until July 31, 2005
(excluding short-term portion) S.Fr. 4,620
- loan granted by the pension fund of
Studer Revox AG, interest bearing at 6.25%,
no repayment date fixed S.Fr. 2,000
- other S.Fr. 2,245
--------------
S.Fr. 8,865
==============
10. Share capital
The Company's share capital is comprised of 277,000 registered
shares, issued at a nominal value of S.Fr. 100 each.
11. Leases
Property accounted for under capital leases at December 31, 1993,
amounted to S.Fr. 5,555 less accumulated depreciation of S.Fr.
1,450 and is included under property, plant and equipment.
18
<PAGE>
- 6 -
At December 31, 1993, the Company is liable for the following
minimum lease commitments under non-cancellable operating and
finance lease agreements:
Operating leases Capital leases
---------------- --------------
1994 985 631
1995 836 675
1996 722 716
1997 495 734
1998 304 734
1999 and following years 769 4,958
----- -----
4,111 8,448
=====
Less- interest element (3,661)
-----
4,787
=====
12. Income taxes
The income tax benefit of S.Fr. 2,083 is composed of the following:
S.Fr.
-----
Current Swiss local taxes (85)
Current foreign taxes (481)
Foreign research tax credit 788
Foreign carry back receivable 1,861
-----
2,083
=====
Accrued liabilities include current tax accruals of S.Fr. 519.
Tax assets included under "other assets" comprise of the following:
S.Fr.
-----
Foreign carry back receivable 1,769
Foreign deferred tax asset on retirement
allowance 202
Other foreign deferred tax assets 64
-----
2,035
=====
19
<PAGE>
- 7 -
13. Business segments
The Company's predominant business is the design, manufacture and
distribution of high fidelity audio and video products for the
consumer and professional studio markets. The Company has
operations in Switzerland and internationally. The following table
shows net sales, operating income and assets by these geographic
segments. The net sales for Switzerland include third party export
sales in the amount of S.Fr. 39.8 Mio.
S.Fr.
Net sales:
Switzerland 77,805
International 114,742
Intercompany elimination (57,808)
-------
134,739
=======
Operating loss:
Switzerland (12,883)
International (15,156)
Intercompany elimination 48
------
(27,991)
======
Assets:
Switzerland 134,662
International 86,205
Intercompany elimination (72,058)
-------
148,809
=======
14. Employee benefit plans
The Company and its subsidiaries have various different pension
schemes in place depending on local regulations and practices.
Besides governmental pension plans in various countries for which
only annual contributions are due, a defined benefit plan exists in
Switzerland. This plan is organized in a separate legal entity.
Total net assets of the plan at December 31, 1993, amount to S.Fr.
35.3 Mio. which exceeds the actuarially calculated required net
assets by approximately S.Fr. 2 Mio. In addition, certain minor
other plans exist in other countries. Net assets of such plans are
not included in the amount stated above. Total contributions to
governmental and other pension schemes for the year ended December
31, 1993, amounted to S.Fr. 4.7 Mio. Out of this amount, S.Fr. 3.0
Mio. are contributions to the Swiss defined benefit plan.
20
<PAGE>
- 8 -
15. Committments and contingencies
The Company and its subsidiaries are involved in several legal
actions out of normal operations with customers, suppliers and
former employees. The outcome of these actions cannot be predicted
at this moment. However, management, based on legal advice,
believes such actions are either without merit or do not represent
a material liability in excess of amounts specifically reserved for
such cases.
16. Related party transactions
For the year ended December 31, 1993, the Company has been charged
with a management fee of S.Fr. 1.3 Mio. by its parent company.
17. Subsequent event
On March 17, 1994, Motor-Columbus AG has sold the Company to Harman
International Industries Inc. (Harman) effective January 1, 1994.
The agreement includes the following major provisions:
- Harman acquires the Company's world wide professional studio
business (Studer operations). The Revox consumer electronics
business, primarily represented by the Company's subsidiary in
Germany (Studer Revox GmbH) will be transferred to a new subsidiary
owned by Motor-Columbus AG.
- The Swiss real estate owned by the Company together with the
respective mortgages have also been transferred to another company
owned by Motor-Columbus AG. A lease agreement has been concluded
with Studer Revox AG for one part of the real estate. The agreement
provides for a 5 year lease term. For the first 3 years no rent is
due by the Company.
- The Company is recapitalized by Motor-Columbus AG by an amount of
S.Fr. 17 Mio. through the waiver of the balance of the parent
company loan after the transactions explained in the two preceding
paragraphs.
The consolidated balance sheet of the Company after such
transactions at January 1, 1994, can be summarized as follows:
Current assets S.Fr. 80,301
Non-current assets 16,653
Current liabilities (61,198)
Non-current liabilities (8,163)
----------------
Equity (incl. minorities) S.Fr. 27,593
================
21
<PAGE>
- 9 -
It is Harman management's intention to continue to operate the
recapitalized business of the Company and its subsidiaries on a going
concern basis including respective financing if necessary.
22
<PAGE>
Exhibit 1.2
23
<PAGE>
Pro forma Consolidated Financial Data
The following table presents consolidated statements of operations
for the Company and Studer Revox AG for the twelve months ended December
31, 1993 and also includes pro forma consolidated statements for the
same period to give effect to the Studer acquisition as though it
occurred on January 1, 1993. The statement of operations data for
Harman International has been derived from quarterly unaudited
consolidated financial statements of the Company and its subsidiaries.
The pro forma financial data presented does not purport to represent
what the Company's results of operations would have been had such
transactions occurred at the beginning of the period presented or to
project the Company's results of operations for any future period.
24
<PAGE>
Twelve Months Ended December 31, 1993
----------------------------------------------------
(000 except per Studer
share data) Studer Adjustments(1) Adjusted Harman ProForma
----------------------------------------------------
Statements of
Operations:
Net sales $91,176 (16,218) (2) 74,958 729,241 804,199
Cost of sales 56,504 (17,609) (2,5,7) 38,895 510,512 549,407
----------------------------------------------------
Gross profit 34,672 1,391 36,603 218,729 254,792
Operating expenses 53,613 (19,203) (2,6,7) 34,410 165,428 199,838
----------------------------------------------------
Operating
income (loss) (18,941) 20,594 1,653 53,301 54,954
Interest expense 5,978 (4,729) (2,3,4) 1,249 24,061 25,310
Miscellaneous, net 1,818 81 (2) 1,899 (435) 1,464
----------------------------------------------------
Income (loss)
before taxes (26,737) 25,242 (1,495) 29,675 28,180
Income taxes (1,410) (35) (2) (1,445) 11,789 10,344
----------------------------------------------------
Net income (loss)
before extraordinary
items and minority
interest (25,327) 25,277 (50) 17,886 17,836
----------------------------------------------------
Extraordinary items -- -- -- (748) (748)
----------------------------------------------------
Net income (loss)
before minority
interest (25,327) 25,277 (50) 17,138 17,088
Minority interest (37) -- (37) -- (37)
----------------------------------------------------
Net Income (Loss) $(25,364) 25,277 (87) 17,138 17,051
====================================================
Net income per share
before extraordinary
items and minority
interest $1.59 $1.58
======= ======
Net income per share $1.52 $1.51
======= ======
Shares Outstanding 11,274 11,274
25
<PAGE>
Notes to Pro Forma Consolidated Financial Data
(1) Pro forma statements of operations adjustments are based upon
preliminary estimates by the Company. The actual amount of these
adjustments may vary from these estimates, and will not be determined until
the Company completes its review of Studer's business and valuation of
assets and liabilities. The Company believes that the actual amount of
these adjustments, in the aggregate, will not vary materially from these
estimates. Swiss Francs were converted to U.S. dollars based on the
average exchange rate for the period.
(2) Reflects the elimination of the Revox Consumer Electronics Divisions,
which were not purchased by the Company, thus eliminating sales of
$16,218,000, cost of sales of $10,145,000, operating expenses of
$14,153,000, interest and miscellaneous costs of $2,089,000 and income
taxes of $35,000.
(3) Represents the elimination of interest costs of approximately
$1,600,000 and depreciation of approximately $1,490,000, real estate taxes
of approximately $914,000 and real estate agents' fees of approximately
$233,000 on buildings not purchased by the Company. The Company has leased
from the seller a portion of the buildings previously owned rent-free for
a period of three years.
(4) Reflects interest expense of approximately $947,000 no longer required
as a result of a capital contribution by the Seller of SFR 17,000,000 or
about $11,800,000.
(5) Reflects the elimination of payroll costs for the year 1993 of
approximately $5,800,000 due to the termination of 120 employees in
December 1993.
(6) Reflects the elimination of management fees of approximately $866,000
which were paid by Studer Revox AG to the Seller in 1993.
(7) Reflects the elimination of non-recurring expenses which were incurred
by Studer Revox AG in 1993, including termination pay of approximately
$1,650,000, non-trading losses in the Vienna operation of approximately
$1,590,000 and other costs of approximately $225,000.
26
