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
June 28, 1996
(Date of earliest event reported)
Lanxide Corporation
(Exact name of Registrant as specified in its charter)
Delaware 0-16293 51-0270253
(State of (Commission File No.) (IRS Employer
Incorporation) Identification No.)
1300 Marrows Road
Newark, Delaware 19714
(Address of principal executive offices, including zip code)
(302) 456-6200
(Registrant's telephone number, including area code)
_____________________________________________________________
(Former name or former address, if changed since last report)
ITEM 2.
On July 17, 1996, Lanxide Corporation, a
Delaware corporation (the "Company"), reported that on
June 28, 1996, it consummated the following transactions:
(i) the Company acquired from E.I. du Pont de Nemours &
Company, a Delaware corporation ("DuPont"), the ownership
interests in Lanxide Electronic Components, Inc. ("LEC")
and Lanxide Armor Company, L.P. ("LAC") not previously
owned by the Company and (ii) the Company sold to DuPont
20% of its ownership interest in DuPont Lanxide
Composites, Inc. ("DLC") (the "Restructuring"). Prior to
the Restructuring, each of LEC, LAC and DLC was a joint
venture in which the Company owned 80%, 27% and 30%,
respectively, and DuPont owned the remaining percentage
of each venture. Upon consummation of the Restructuring,
LEC and LAC became wholly owned subsidiaries of the
Company, and the Company reduced its ownership interest
in DLC to 10%.
ITEM 7.
Set forth below are the financial statements
required to be filed in connection with the
Restructuring.
(a) Consolidated Financial Statements of Lanxide Armor Company, L.P.
Report of Independent Accountants
To the Partners of
Lanxide Armor Company, L.P.
In our opinion, the accompanying consolidated balance sheet and the related
consolidated statements of operations, of partners' capital and of cash
flows present fairly, in all material respects, the financial position of
Lanxide Armor Company, L.P. and subsidiary at September 30, 1995, and the
results of its operations and its cash flows for the year then ended, in
conformity with generally accepted accounting principles. 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 of these statements in accordance
with generally accepted auditing standards which 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.
The accompanying financial statements have been prepared assuming that the
Company will continue as a going concern. As described in Note 1 to the
financial statements, the Company's principal business activities are
development and commercialization of proprietary technology. The Company's
significant continuing investment in product development and
commercialization activities has resulted in significant losses.
This factor raises substantial doubt about the Company's ability to
continue as a going concern. Management's plans in regard to these
matters are also described in Note 1. The financial statements do not
include any adjustments that might result from the outcome of this
uncertainty.
PRICE WATERHOUSE LLP
Philadelphia, Pennsylvania
August 23, 1996
LANXIDE ARMOR COMPANY, L.P.
CONSOLIDATED BALANCE SHEET
SEPTEMBER 30, 1995
(Dollars in thousands)
ASSETS
Cash and cash equivalents $228
Accounts receivable 1,225
Receivable from related parties 1,787
Inventories 950
Other current assets 23
-----------
Total current assets 4,213
Property and equipment, net 6,334
-----------
$10,547
==========
LIABILITIES AND PARTNERS' CAPITAL
Accounts payable and accrued expenses $736
Payable to related party 694
----------
Total current liabilities 1,430
Deferred compensation 16
----------
1,446
----------
Partners' capital
Contributed capital 39,302
Accumulated deficit (30,201)
---------
Partners' capital 9,101
-----------
$10,547
===========
The accompanying notes are an integral part of these financial statements.
LANXIDE ARMOR COMPANY, L.P.
CONSOLIDATED STATEMENT OF CASH FLOWS
YEAR ENDED SEPTEMBER 30, 1995
(Dollars in thousands)
CASH FLOWS FROM OPERATING ACTIVITIES:
Net loss $(2,861)
Adjustments to reconcile net loss to net cash used in
operating activities:
Depreciation 688
Changes in assets and liabilities
Increase in receivables (1,747)
Increase in inventories (585)
Decrease in other current assets 343
Increase in accounts payable and accrued expenses 1,159
------------
Net cash used in operating activities (3,003)
------------
CASH FLOWS FROM INVESTING ACTIVITIES:
Capital additions (1,791)
------------
CASH FLOWS FROM FINANCING ACTIVITIES:
Capital contributions 4,430
------------
Net decrease in cash and cash equivalents (364)
Cash and cash equivalents, beginning of period 592
------------
Cash and cash equivalents, end of period $228
============
The accompanying notes are an integral part of these financial statements.
LANXIDE ARMOR COMPANY, L.P.
CONSOLIDATED STATEMENT OF PARTNERS' CAPITAL
YEAR ENDED SEPTEMBER 30, 1995
(Dollars in thousands)
E.I. DUPONT
LANXIDE ARMOR DE NEMOURS
PRODUCTS INC. & COMPANY TOTAL
Balance, September 30, 1994 $4,429 $3,103 $7,532
Contributed capital 150 4,280 4,430
Net loss (1,417) (1,444) (2,861)
-------- ------- -------
Balance, September 30, 1995 $3,162 $5,939 $9,101
-------- ------- ------
The accompanying notes are an integral part of these financial statements.
LANXIDE ARMOR COMPANY, L.P.
CONSOLIDATED STATEMENT OF OPERATIONS
YEAR ENDED SEPTEMBER 30, 1995
(Dollars in thousands)
Revenue:
Sales $2,648
Research and development contract revenue 4,313
-------------
6,961
-------------
Operating costs:
Cost of sales 2,815
Research and development contract costs 3,882
Research and development 1,984
Selling, general and administration 927
-------------
9,608
-------------
Loss from operations (2,647)
Other expense (346)
Interest income 132
-------------
Net loss $(2,861)
=============
The accompanying notes are an integral part of these financial statements.
NOTE 1 - ORGANIZATION AND BUSINESS,
SIGNIFICANT ACCOUNTING POLICIES
AND LIQUIDITY:
Organization and business:
Lanxide Armor Company, L.P. (the Company) is a limited partnership organized
under the laws of the State of Delaware. The Company was formed in 1987 to
develop and commercialize armor products using a new class of proprietary
materials called LANXIDE(TM) reinforced ceramics and metals and CERASET(TM)
ceramers (collectively LANXIDE(TM) technology). Lanxide Armor Products, Inc.
(LAP), a wholly-owned subsidiary of Lanxide Corporation (Lanxide), was
initially the managing partner with a 60% interest, and E. I. DuPont de
Nemours & Company (DuPont) was the limited partner with a 40% interest. All
funding requirements in excess of initial capital contributions as
contemplated in the partnership agreement are determined annually and are
generally funded based upon each partner's percentage interest. If a partner
funds less than the amount required based upon its ownership interest, the
partner's respective interest in the partnership may be reduced in accordance
with the terms of the agreements. Prior to June 30, 1995, LAP had funded less
than the required amount and its ownership percentage had been reduced to 57%.
On June 30, 1995, LAP sold a 30% equity interest in the Company to DuPont
which reduced its ownership percentage to 27%.
Significant accounting policies:
CONSOLIDATION - The consolidated financial statements include the accounts
of the Company, its subsidiary, and its affiliates which are majority-owned.
Transactions with its majority-owned affiliates are eliminated in con-
solidation.
INVENTORIES - Inventories are valued at the lower of average cost or market
and consist of the following:
Raw materials and supplies $ 183
Work in process 767
----
$ 950
PROPERTY AND EQUIPMENT - Property and equipment are carried at cost, and
depreciation is computed using the straight-line method over estimated useful
asset lives. Maintenance and repair costs are expensed as incurred;
significant renewals and betterments are capitalized.
SALES AND RESEARCH AND DEVELOPMENT CONTRACT REVENUE RECOGNITION - Sales are
recognized as products are shipped and, for certain other contracts, using the
percentage-of-completion method of accounting. Certain sales include charges
to customers for materials, process and prototype development, and
applications engineering required to fulfill product specifications. Research
and development contract revenue is recognized as services are provided.
RESEARCH AND DEVELOPMENT - Research and development costs are expensed as
incurred.
CASH AND CASH EQUIVALENTS - All highly liquid investments with a maturity of
three months or less when purchased are considered to be cash equivalents.
LIQUIDITY - The accompanying financial statements have been prepared assuming
that the Company will continue as a going concern. The Company's significant
ongoing investment in product development and commercialization activities has
resulted in significant losses. The Company anticipates its funding for the
coming year will be derived primarily from research and development contract
revenue, sales, and repayments of receivables from related parties. There is no
assurance that the Company's partners will continue to provide financing to
the Company in the future or that alternative financing will be available.
USE OF ESTIMATES - The preparation of financial statements in conformity with
generally accepted accounting principles requires management to make
reasonable estimates and assumptions, based upon all known facts and
circumstances, that affect the reported amounts of assets and liabilities and
the disclosure of contingent assets and liabilities at the date of the
financial statements. Actual results could differ from estimates.
NOTE 2 - PROPERTY AND EQUIPMENT:
Property and equipment at September 30, 1995 consisted of the following:
Estimated
useful lives
Leasehold improvements $ 513 10-12 years
Machinery and equipment 8,049 5-10 years
Furniture and fixtures 58 10 years
--------
8,620
Less - Accumulated depreciation (2,286)
---------
$ 6,334
NOTE 3 - ACCOUNTS PAYABLE AND
ACCRUED EXPENSES:
Accounts payable and accrued expenses at September 30, 1995 consisted of the
following:
Trade accounts payable $ 533
Compensation-related costs 145
Other 58
--------
$ 736
NOTE 4 - INCOME TAXES:
In accordance with federal and state income tax laws, the partners
individually report their respective share of income or loss. Accordingly,
no provision has been made for federal and state income taxes.
NOTE 5 - SIGNIFICANT CUSTOMERS / RELATED PARTY TRANSACTIONS
All sales revenue in fiscal 1995 was derived from unrelated parties. Two
customers comprised approximately 85% and 11%, respectively of total sales.
The Company performs development and production activities on behalf of
certain related parties. All research and development contract revenue
in fiscal 1995 was derived from these related parties. Receivables at
September 30, 1995 associated with these revenues consisted of the following:
Lanxide ThermoComposites, Inc. $ 1,280
Lanxide Performance Materials, Inc. 285
Lanxide Electronic Components Inc. 115
DuPont Lanxide Composites Inc. 107
--------
$ 1,787
Lanxide ThermoComposites, Inc. and Lanxide Performance Materials, Inc.
receivables are payable to the Company as proceeds from sales to
unaffiliated third parties are received by these two companies.
All other receivables are payable currently.
NOTE 6 - EMPLOYEE BENEFIT PLANS:
The Company participates in Lanxide's 401(k) Matched Savings Plan that
permits eligible employees to defer and have the Company contribute a
portion of their compensation on a pre-tax basis to the Plan. The Company
may make a matching contribution of fifty cents for each dollar deferred
by a participant up to 4% of a participant's compensation. In additon,
the Company participates in Lanxide's Employee Stock Option Plan.
NOTE 7 - SUBSEQUENT EVENTS:
On June 28, 1996, Lanxide, through its wholly-owned subsidiary, LAP,
purchased the 73% ownership interest in the Company held by DuPont;
therefore, as of that date, the Company became a wholly-owned subsidiary
of Lanxide.
(b) UNAUDITED PRO FORMA FINANCIAL STATEMENTS OF LANXIDE CORPORATION:
A. The following summarizes the unaudited and condensed
pro forma results of operations of Lanxide Corporation
(Lanxide) for the fiscal year ended September 30, 1995, to
give effect to the sale of Lanxide Precision, Inc. on May
25, 1995; the sale of substantially all of the assets of
Alanx Products, Inc. (Alanx), on June 25, 1995, with the
exception of dividends on the Alanx preferred stock which
will continue to accrue; the purchase of DuPont's interests
in Lanxide Armor Company, L.P. and Lanxide Electronic
Components, Inc. on June 30, 1995, and June 28, 1996 and the
sale of the controlling interest in Lanxide ThermoComposites
Inc. on December 13, 1995, as if all had occurred on October
1, 1994. The loss associated with the sale of Alanx has been
eliminated for pro forma purposes.
Revenue $ 14,214
Loss from operations $ (13,474)
Net loss $ (15,743)
Historical loss per share $ (1.51)
Historical average number of common shares outstanding 10,443
All potentially dilutive securities have an antidilutive effect on the loss
per share and, therefore, have not been used in determining the total
weighted average number of common shares outstanding.
B. The unaudited and condensed pro forma results of operations
of Lanxide for the nine months ended June 30, 1996, are
incorporated in this Report by reference to the Form 10Q for
the period ending June 30, 1996.
C. The pro forma balance sheet of Lanxide as of June 30, 1996,
is incorporated in this Report by reference to the Form 10Q
for the period ending June 30, 1996.
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.
LANXIDE CORPORATION
By: /s/ Robert J. Ferris
Robert J. Ferris
Secretary, Treasurer and
Vice President-Administration
Date: September 16, 1996
