SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K/A
(AMENDMENT NO. 1)
PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
Date of Report (Date of earliest event reported): June 30, 1995
DENTSPLY International Inc.
(Exact name of registrant as specified in its charter)
Delaware 0-16211 39-1434669
(State or other (Commission (I.R.S. Employer
jurisdiction of File Number) Identification No.)
incorporation)
570 West College Avenue, P. O. Box 872, York, PA 17405-0872
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code: 717-845-7511
Page 1 of 16 pages.
Item 7 - Financial Statements, Pro Forma Financial Information and
Exhibits
(a) Financial Statements of Business Acquired.
Report to the Directors of DENTSPLY International Inc. in
respect of Maillefer Instruments S.A., Ballaigues
-------------------------------------------------
We have examined the financial statements of Maillefer
Instruments S.A. presented by the Board of Directors for the
year ended December 31, 1994 in accordance with the
provisions of Swiss law. Our examination was conducted in
accordance with auditing standards promulgated by the
profession in Switzerland, which comply substantially with
auditing standards generally accepted in the United States of
America. We confirm that we meet the legal requirements
concerning professional qualification and independence.
Based on our examination, we conclude that the financial
statements are in accordance with generally accepted
accounting principles in Switzerland, which differ from those
generally accepted in the United States of America.
KPMG Klynveld Peat Marwick Goerdeler SA
/s/ Dan M. Rees /s/ John Campbell
------------------- ---------------------
Auditors in Charge
Geneva, August 19, 1995
Enclosures:
Financial Statements consisting of
- Balance Sheet
- Income Statement
- Notes to the Financial Statements
2
Maillefer Instruments S.A.
Balance Sheet as at December 31, 1994 1993
-------------------------------------------------------------
SFr. SFr.
ASSETS
Fixed assets
Land and buildings 10,031,000 10,328,000
Improvements 935,000 1,550,000
Machinery 2,094,000 2,205,000
Tools and materials 1 1
Office equipment 64,000 85,000
Computer equipment 545,000 692,000
Vehicles 52,000 29,000
Investments in affiliates 205,000 250,000
---------- ----------
13,926,001 15,139,001
---------- ----------
Current assets
Inventory 9,930,500 10,953,500
Trade receivables 11,010,478 11,214,946
Other accounts receivable 276,239 310,528
Receivable from stockholder 187,774 208,500
Receivable from pension fund 3,201 -
Debit balances included in payables 450 1,803
Short-term investments 77,000 77,000
Cash 47,241 79,389
Postal bank accounts 313,126 237,060
Bank accounts 4,029,419 684,943
---------- ----------
25,875,428 23,767,669
---------- ----------
39,801,429 38,906,670
========== ==========
3
Maillefer Instruments S.A.
Balance Sheet as at December 31, 1994 1993
-------------------------------------------------------------
SFr. SFr.
LIABILITIES AND STOCKHOLDERS' EQUITY
Liabilities
Credit balances in receivables 307,921 623,739
Trade accounts payable 1,094,793 1,070,708
Intercompany payables 146,448 129,281
Other accounts payable 3,336,704 2,736,332
Due to foundation for personnel - 530,185
Pension fund liabilities 312,367 873,923
---------- ----------
5,198,233 5,964,168
---------- ----------
Provision for exchange losses 103,000 -
Allowance for doubtful receivables 990,000 997,000
---------- ----------
1,093,000 997,000
---------- ----------
Total liabilities 6,291,223 6,961,168
---------- ----------
Stockholders' equity
Common stock 360,000 360,000
Legal reserve 2,335,000 2,065,000
Other reserves 23,600,000 23,400,000
Retained earnings brought forward 2,950,502 2,990,945
Profit for the year 4,264,694 3,129,557
---------- ----------
33,510,196 31,945,502
---------- ----------
39,801,429 38,906,670
========== ==========
4
Maillefer Instruments S.A.
Income Statement for the year ended
December 31, 1994 1993
-------------------------------------------------------------
SFr. SFr.
Sales 53,652,018 48,086,405
Interest and other financial income 102,712 177,731
Gain on disposal of machinery 55,000 -
Release of allowance for doubtful
receivables 7,000 -
---------- ----------
53,816,730 48,264,136
---------- ----------
Raw materials and other goods 7,609,760 5,396,451
Personnel costs 23,902,515 21,716,388
Production costs 4,717,557 4,399,675
Building costs 727,599 669,516
Administrative expenses 1,247,906 984,359
Taxation 1,845,558 1,861,774
Research costs 207,240 239,502
Vehicle costs 73,213 67,563
Selling expenses 6,028,075 5,831,318
Depreciation 3,192,613 3,789,033
Allowance for doubtful receivables - 179,000
---------- ----------
49,552,036 45,134,579
---------- ----------
Profit for the year 4,264,694 3,129,557
========== ==========
Reconciles to balance sheet as follows:
Profit for the year 4,264,694 3,129,557
Opening retained earnings 6,120,502 7,260,945
Transfer to legal and other reserves (470,000) (1,750,000)
Dividend in respect of prior year (2,700,000) (2,520,000)
---------- ----------
Retained earnings per balance sheet 7,215,196 6,120,502
========== ==========
5
Maillefer Instruments S.A.
Notes to the Financial Statements for
the year ended December 31, 1994 1993
-------------------------------------------------------------
SFr. SFr.
1 Fire Insurance Value of Fixed
Assets
Buildings, classified as lot
No. 108 for Swiss insurance
purposes 31,749,846 30,793,870
Machinery, improvements, tools,
materials, and equipment 58,457,760 58,457,760
---------- ----------
90,207,606 89,251,630
========== ==========
2 Securities Granted to Secure Own
Liabilities
Two mortgates of SFr. 400,000
each over the Company's buildings
as security for an unutilised
credit facility of SFr. 2 million
granted by the Banque Cantonale
Vaudoise 800,000 800,000
========== ==========
3 Liabilities Towards the Pension
Fund and the Foundation for
Personnel
Pension Fund 312,367 873,923
Foundation for Personnel - 530,185
---------- ----------
312,367 1,404,108
========== ==========
4 Significant Investments in
Affiliates
60 nominative shares in Manuplast
SA, Ballaigues, each with a
nominal value of SFr. 1,000
representing a 50% stockholding.
Total nominal value of the
shares held: 120,000 120,000
========== ==========
6
Maillefer Instruments S.A.
Notes to the Financial Statements for
the year ended December 31, 1994 1993
-------------------------------------------------------------
SFr. SFr.
4 Significant Investments in
Affiliates (continued)
165 (193: 210) nominative shares
in SI du Champ des Echelles SA,
Ballaigues, each with a nominal
value of SFr. 1,000 representing
a 31.1% (1993: 39.6%) stock-
holding. Total nominal value
of the shares held: 530,000 530,000
========== ==========
7
Generally Accepted Accounting Principles (GAAP)
Reconciliation
The financial statements of Maillefer Instruments S.A.
(Maillefer) have been prepared in accordance with
Switzerland's statutory accounting principles which differ
substantially from U.S. generally accepted accounting
principles (U.S. GAAP) in the following respects.
- Balance Sheet
Accounting for Property, Plant and Equipment
--------------------------------------------
- Land and Buildings
Maillefer did not record the cost of land and buildings
separately. Under U.S. GAAP, land is not depreciated.
Land and buildings were depreciated in the statutory
financial statements at 7% of the prior year's net
asset value. DENTSPLY computes depreciation by the
straight-line method over the estimated useful life of
buildings (generally 40 years). Land and buildings in
Maillefer's balance sheet excludes significant
material, labor, and related overhead costs associated
with self-constructed assets that would be capitalized
under U.S. GAAP. Such costs were expensed as incurred
in the statutory financial statments.
- Improvements
Improvements exclude significant in-house material,
labor, and related overhead costs that would be
capitalized under U.S. GAAP. Such costs were expensed
as incurred in the statutory financial statements.
Improvements were depreciated at 40% of the prior
year's net asset value. DENTSPLY computes depreciation
by the straight-line method over the estimated useful
life of the assets, which may be up to 40 years.
- Machinery
Approximately 85% of the machinery and equipment used
in manufacturing operations is internally constructed.
Machinery excludes significant material, labor, and
related overhead costs associated with internally
constructed assets that would be capitalized under U.S.
GAAP. Such costs were expensed as incurred in the
statutory financial statements. Machinery was
depreciated at 40% of the sum of the prior year's net
asset value plus the cost of current year additions.
DENTSPLY computes depreciation by the straight-line
method over the estimated useful life of the assets (8
- 15 years).
8
Investments in Affiliates
-------------------------
Maillefer owns 50% of the issued share capital of
Manuplast S.A. and Societe Immobiliere des Champs Echelles
S.A. and exercises control over both subsidiaries. These
investments were stated at cost in the statutory financial
statements. Under U.S. GAAP the accounts of these
subsidiaries would be consolidated.
Inventory
---------
Inventory as reported in the statutory financial
statements is substantially less than would be reported
under U.S. GAAP. Significant manufacturing overhead was
not included in the cost of inventory. Such costs were
expensed as incurred in the statutory financial
statements. Inventory was stated net of reserves that
substantially exceed the reserves that would be required
under U.S. GAAP to value inventory at the lower of cost or
market.
Trade Receivables
-----------------
An allowance for doubtful accounts was included in the
Liabilities and Stockholders Equity section of the Balance
Sheet. Under U.S. GAAP, the allowance for doubtful
accounts would be reflected as a reduction of trade
accounts receivable.
Legal Reserve/Other Reserves
----------------------------
In the statutory financial statements, legal and other
reserves were reclassified from retained earnings based on
requirements under Swiss law. These reclassifications
would not be made under U.S. GAAP.
- Income Statement
In the statutory financial statements, the Income
Statement for Maillefer was an itemized list of revenue
and expenses. Classification of revenue and expenses was
significantly different from that under U.S. GAAP.
Significant differences between the statutory financial
statements and U.S. GAAP include the following.
- Raw materials and other goods includes costs such as
raw materials, purchased components and packaging
materials that would, under U.S. GAAP, be included in
cost of inventory sold.
9
- Personnel costs include significant wages that would,
under U.S. GAAP, be included in the cost of inventory
or property, plant and equipment additions during the
year.
- Production costs would, under U.S. GAAP, be capitalized
and included in inventory.
- Taxation - Deferred taxation was not recognized in the
statutory financial statements. Tax returns conform to
the statutory financial statements so that temporary or
permanent differences do not exist. Under U.S. GAAP,
income taxes would be recorded in accordance with FAS
109.
- Depreciation expense was significantly different in the
statutory financial statements due to differences in
accounting for property, plant and equipment.
- Pension Expense - Maillefer operates a pension plan
which has certain of the characteristics of a defined
benefit plan. Amounts contributed to the pension plan
were expensed in the statutory financial statements.
At December 31, 1994, plan assets exceeded the
projected benefit obligations computed under U.S. GAAP
(FAS 87).
An income statement under U.S. GAAP would vary significantly
mainly due to the major differences in the method of valuing
inventory and the rules used to capitalize building
improvements and machinery and equipment.
- Notes to Maillefer Financial Statements
Under U.S. GAAP the following topical footnotes with
appropriate disclosures would have been provided:
- Significant Accounting Policies
- Inventories
- Property, Plant and Equipment
- Accrued Liabilities
- Stockholders' Equity
- Income Taxes
- Benefit Plans
- Commitments and Contingencies
- Related Party Transactions
10
(b) Pro Forma Financial Information.
In June 1995, DENTSPLY International Inc. ("the Company")
acquired approximately 96% of the capital stock of Maillefer
Instruments, S.A. (Maillefer). The accompanying Pro Forma
Condensed Consolidated Balance Sheet as of March 31, 1995 gives
effect to the purchase of Maillefer by the Company (the
Transaction) assuming that the Transaction was consummated on
March 31, 1995. The related Pro Forma Condensed Consolidated
Statements of Income for the three months ended March 31, 1995 and
for the year ended December 31, 1994 have been prepared assuming
that the Transaction was consummated on January 1, 1994. The Pro
Forma Financial Information has been based upon certain
assumptions and preliminary estimates which are subject to change.
The historical financial information for Maillefer has been
restated in accordance with the adjustments outlined in Part (a)
of this Form 8-K/A in order to reflect the balance sheet and
statements of income in accordance with generally accepted
accounting principles recognized in the United States.
The Pro Forma Financial Information should be read in
conjunction with the historical financial statements of the
Company and Maillefer. This information does not purport to be
indicative of the results that would have occurred if the
Transaction had been consummated on the dates indicated, nor of
the results that may be obtained in the future.
11
<TABLE>
DENTSPLY INTERNATIONAL INC.
UNAUDITED PRO FORMA CONDENSED CONSOLIDATED BALANCE SHEET
March 31, 1995
(in thousands)
<CAPTION>
------As Reported----- -Pro Forma Adjustments- Consolidated
DENTSPLY Maillefer Debit Credit Pro Forma
-------- --------- ------- ------ ------------
<S> <C> <C> <C> <C> <C>
ASSETS
Current assets:
Cash and cash equivalents $ 3,430 $ 4,858 $ $ $ 8,288
Accounts and notes receivable-
trade, net 84,112 10,418 (1,614) (d) 92,916
Inventories 97,098 26,775 3,371 (b) 127,244
Deferred income taxes 5,710 - 5,710
Prepaid expenses and other current
assets 8,968 1,170 10,138
Net assets of discontinued operations 6,629 - 6,629
---------------------- --------
Total Current Assets 205,947 43,221 250,925
Property, plant and equipment, net 95,386 37,463 25,117 (b)
(18,956) (c) 139,010
Other noncurrent assets, net 21,350 68 4,742 (b)
(1,441) (c) 24,719
Identifiable intangible assets, net 32,840 - 2,031 (b)
(609) (c) 34,262
Cost in excess of fair value of
net assets acquired, net 140,781 - 140,781
Investment in subsidiary - - 65,783 (a)
(16,018) (b)
20,676 (c)
(70,441) (f) -
---------------------- --------
Total Assets $496,304 $ 80,752 $589,697
====================== ========
12
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Accounts payable and accrued liabilities $ 63,408 $ 3,887 $ $ 5,023 (b) $
(330) (c)
(1,614) (d) 70,374
Income taxes payable 22,840 1,477 (464) (b) 23,853
Notes payable and current portion
of long-term debt 30,389 1,065 6,067 (a) 37,521
--------------------- --------
Total Current Liabilities 116,637 6,429 131,748
Long-term debt 31,141 - 59,716 (a) 90,857
Deferred income taxes 25,282 - 14,684 (b) 39,966
Other liabilities 44,474 - 44,474
--------------------- --------
Total Liabilities 217,534 6,429 307,045
--------------------- --------
Minority interests in consolidated
subsidiary - 782 3,103 (e) 3,885
--------------------- --------
Stockholders' equity:
Common stock, $.01 par value; 100,000,000
shares authorized; 27,845,288 and
26,919,669 shares issued at December 31,
1994 and June 30, 1995, respectively 278 318 (13) (e)
(305) (f) 278
Capital in excess of par value 180,046 70,976 (2,995) (e)
(67,981) (f) 180,046
Retained earnings 144,503 2,250 (95) (e)
(2,155) (f) 144,503
Cumulative translation adjustment 4,028 (3) 4,025
Employee stock ownership plan reserve (13,593) - (13,593)
Treasury stock, at cost, 1,067,200
shares (36,492) - (36,492)
--------------------- --------
Total Stockholders' Equity 278,770 73,541 278,767
--------------------- --------
Total Liabilities and Stockholders' Equity $496,304 $ 80,752 $589,697
===================== ========
See accompanying notes to unaudited consolidated condensed financial information.
</TABLE>
13
<TABLE>
DENTSPLY INTERNATIONAL INC.
UNAUDITED PRO FORMA CONDENSED STATEMENTS OF INCOME
(in thousands, except per share)
<CAPTION>
---------Three Months Ended March 31, 1995--------- ------------Year Ended December 31, 1994-----------
Pro Forma Pro Forma
----As Reported---- Adjustments Consolidated ----As Reported---- Adjustments Consolidated
DENTSPLY Maillefer Debit Credit Pro Forma DENTSPLY Maillefer Debit Credit Pro Forma
-------- --------- ------ ------ --------- -------- --------- ------ ------ ---------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
Net sales $133,105 $ 12,613 $(1,625) $ (g) $144,093 $524,758 $ 40,459 $(6,029) $ (g) $559,188
Cost of products sold 66,670 8,133 440 (h) 267,034 25,715 2,395 (h)
(1,625) (g) (6,029) (g)
(5) (i) 479 (i)
67 (j) 73,680 244 (j) 289,838
------------------ -------- ------------------ --------
Gross profit 66,435 4,480 70,413 257,724 14,744 269,350
Selling, general and
administrative
expenses 43,524 2,107 45,631 160,324 7,275 167,599
------------------ -------- ------------------ --------
Operating income from
continuing operations 22,911 2,373 24,782 97,400 7,469 101,751
Interest expense 1,606 15 743 (k) 2,364 7,999 34 3,394 (k) 11,427
Interest income (255) (37) (292) (1,527) (68) (1,595)
Other (income) expense,
net 48 138 186 (734) (40) (774)
------------------ -------- ------------------ --------
Income from continuing
operations before
income taxes 21,512 2,257 22,524 91,662 7,543 92,693
Provision for income
taxes 8,540 654 (494) (l) 8,700 37,518 2,100 (2,663) (l) 36,955
Minority interest - 12 67 (m) 79 - 107 225 (m) 332
------------------ -------- ------------------ --------
Income from continuing
operations $ 12,972 $ 1,591 $ 13,745 $ 54,144 $ 5,336 $ 55,406
================== ======== ================== ========
Earnings per common
share $0.48 $0.50 $1.95 $1.99
Weighted average common
shares outstanding 27,225 27,225 27,776 27,776
See accompanying notes to unaudited consolidated condensed financial information.
</TABLE>
14
DENTSPLY INTERNATIONAL INC.
NOTES TO UNAUDITED PRO FORMA CONDENSED
CONSOLIDATED FINANCIAL INFORMATION
Explanation of adjustments relating to the Unaudited Pro Forma Condensed
Consolidated Balance Sheet:
(a) Record initial purchase transaction.
(b) Record assigned fair values of the assets and liabilities of
Maillefer.
(c) Record allocation of the excess of the fair value of net assets
acquired over the purchase price ("negative goodwill") to the
non-current assets of Maillefer.
(d) Record elimination of intercompany accounts receivable and
accounts payable.
(e) Record minority interest in the net assets of Maillefer.
(f) Record elimination of investment in subsidiaries.
Explanation of adjustments relating to the Unaudited Pro Forma Condensed
Consolidated Statements of Income:
(g) Record elimination of intercompany sales and cost of products
sold.
(h) Record additional cost of products sold resulting from the
allocation of the purchase price to the fair value of Maillefer
inventory.
(i) Record elimination of intercompany profit in inventory.
(j) Record additional depreciation and amortization resulting from
the allocation of the purchase price to the fair value of
Maillefer intangible assets and property, plant, and equipment.
(k) Record additional interest expense on debt incurred by DENTSPLY
to effect the Transaction.
(l) Record income tax effect of pro forma adjustments.
(m) Record minority interests in income of Maillefer.
Exchange rates expressed in US Dollars to Swiss Francs:
Balance Sheet Income Statement
------------- ----------------
December 31, 1994 not applicable .7328
March 31, 1995 .8842 .8086
(c) Exhibits.
---------
Number Description
------ -----------
2.1 Sales-Purchase Agreement, dated May 30, 1995 between
certain stockholders of Maillefer Instruments S.A.,
DENTSPLY Ltd. and DENTSPLY International Inc. as
guarantor. (Previously filed.)
27 Financial Data Schedule. Not required pursuant to
instructions (i), (ii), and (vi) of Item 601(c)(1) of
Regulation S-K.
15
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.
DENTSPLY INTERNATIONAL INC.
September 15, 1995 /s/ J. Patrick Clark
-------------------- -----------------------------------
Date J. Patrick Clark
Vice President, Secretary and
General Counsel
16
