<PAGE> 1
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, DC 20549
FORM 8-K/A
CURRENT REPORT PURSUANT
TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
Date of report: May 18, 1998
BRUNSWICK TECHNOLOGIES, INC.
(Exact Name of Registrant as Specified in Its Charter)
Maine
(State or Other Jurisdiction of Incorporation)
0-22089 01-402052
(Commission File Number) (IRS Employer Identification No.)
43 Bibber Parkway, Brunswick , Maine 04011
(Address of Principal Executive Offices) (Zip Code)
(207) 729-7792
(Registrant's Telephone Number, Including Area Code)
Not Applicable
(Former Name or Former Address, if Changed Since Last Report)
AMENDMENT NO. 1
The undersigned registrant (the "Company") hereby amends the following
items, financial statements, exhibits or other portions of its Form 8-K dated
March 2, 1998 as set forth in the pages attached hereto.
(List all such items, financial statements, exhibits or other portions
amended)
1. Item 7 - Amended to include the Financial Statements of Tech
Textiles International Limited and the Company's pro forma
financial information.
<PAGE> 2
TABLE OF CONTENTS
FORM 8-K/A
May 18, 1998
ITEM PAGE
Item 7. Financial Statements and Exhibits 1
Signature 2
<PAGE> 3
ITEM 7. FINANCIAL STATEMENTS AND EXHIBITS
a. Financial statements of businesses acquired.
Attached are the audited financial statements of Tech Textiles
International Limited for the year ended December 31, 1997 and the year ended
December 31, 1996.
b. Pro forma financial information.
Attached is the unaudited pro forma consolidated financial
information for the Company for the fiscal year ended December 31, 1997.
c. Exhibits.
The following exhibit was previously filed with the Form 8-K dated
March 2, 1998:
Exhibit No. Description
----------- -----------
2 Agreement by and among Brunswick Technologies, Inc.,
Brunswick Technologies Europe Limited, T&N PLC and
Tech Textiles International Limited, dated as of
March 2, 1998.
[REMAINDER OF PAGE INTENTIONALLY LEFT BLANK]
<PAGE> 4
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934,
the registrant has duly caused this amendment to be signed on its behalf by the
undersigned hereunto duly authorized.
BRUNSWICK TECHNOLOGIES, INC.
Date: May 18, 1998 By: /s/ Alan Chesney
----------------------------------
Alan Chesney, Treasurer
<PAGE> 5
Tech Textiles International
Financial statements
for the year ended 31 December 1997 and the year ended 31
December 1996
<PAGE> 6
TECH TEXTILES INTERNATIONAL
FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEMBER 1997 AND THE YEAR ENDED 31
DECEMBER 1996
CONTENTS
PAGES
Responsibility for financial statements 1
Report of the auditors 2 - 3
Profit and loss accounts 4
Balance sheets 5
Cash flow statements 6
Notes to the financial statements 7 - 13
Differences between UK GAAP and US GAAP 14
Reconciliation of results and net assets
from UK GAAP to US GAAP 14
Statement of cash flows in accordance with US GAAP 15
<PAGE> 7
TECH TEXTILES INTERNATIONAL 1
RESPONSIBILITY FOR THE FINANCIAL STATEMENTS
Until 2 March 1998, Tech Textiles International was a division of T&N plc, a
company incorporated in England and Wales. On that date, Tech Textiles
International was acquired by Brunswick Technologies, Inc., a company
incorporated in the United States of America, through its wholly owned
subsidiary, Brunswick Technologies Europe Limited.
These financial statements have been prepared solely for the purposes of the
directors of Brunswick Technologies, Inc. in connection with their acquisition
of Tech Textiles International. To that end, the directors of Brunswick
Technologies, Inc. have accepted responsibility for:
- preparing financial statements for Tech Textiles International
- maintaining adequate accounting records
- safeguarding the assets
- preventing and detecting fraud and other irregularities.
The directors of Brunswick Technologies, Inc. confirm that suitable accounting
policies, consistently applied and supported by reasonable and prudent
judgements and estimates, have been used in the preparation of the financial
statements and that applicable accounting standards have been followed.
<PAGE> 8
TECH TEXTILES INTERNATIONAL 2
REPORT OF THE INDEPENDENT AUDITORS TO THE DIRECTORS OF BRUNSWICK TECHNOLOGIES,
INC.
We have audited the financial statements set out on pages 4 to 13, which have
been prepared in accordance with accounting principles generally accepted in the
United Kingdom. These financial statements have been prepared solely for the
purposes of the directors of Brunswick Technologies Inc. in connection with
their acquisition of Tech Textiles International. They have not been prepared
under section 226 of the Companies Act 1985.
RESPECTIVE RESPONSIBILITIES OF DIRECTORS AND AUDITORS
As described on page 1, the directors of Brunswick Technologies, Inc. have taken
responsibility for the preparation of the financial statements. It is our
responsibility to form an independent opinion, based on our audit, on those
financial statements and to report our opinion.
BASIS OF OPINION
We conducted our audit in accordance with UK Auditing Standards issued by the
Auditing Practices Board, which are substantially the same as those issued in
the United States. An audit includes examination, on a test basis, of evidence
relevant to the amounts and disclosures in the financial statements. It also
includes an assessment of the significant estimates and judgements made by the
directors in the preparation of the financial statements, and of whether the
accounting policies are appropriate to the division's circumstances,
consistently applied and adequately disclosed.
We planned and performed our audit so as to obtain all the information and
explanations which we considered necessary in order to provide us with
sufficient evidence to give reasonable assurance that the financial statements
are free from material misstatement, whether caused by fraud or other
irregularity or error. In forming our opinion we also evaluated the overall
adequacy of the presentation of information in the financial statements.
OPINION
In our opinion, the financial statements present fairly, in all material
respects, the financial position of Tech Textiles International at 31 December
1997 and 31 December 1996 and the results of its operations and cash flows for
the years then ended in accordance with accounting principles generally accepted
in the United Kingdom.
<PAGE> 9
TECH TEXTILES INTERNATIONAL 3
The accounting principles applied vary in certain respects from accounting
principles generally accepted in the United States. In our opinion, application
of accounting principles generally accepted in the United States would have
affected the determination of the amounts shown as net income for the year ended
31 December 1997 and the year ended 31 December 1996 and the amount of the
assets at 31 December 1997 and 31 December 1996 to the extent summarised in
notes 21 and 22.
COOPERS & LYBRAND
CHARTERED ACCOUNTANTS AND REGISTERED AUDITORS
SOUTHAMPTON, UNITED KINGDOM
May 1998
<PAGE> 10
TECH TEXTILES INTERNATIONAL 4
PROFIT AND LOSS ACCOUNTS FOR THE YEAR ENDED 31 DECEMBER 1997 AND THE YEAR ENDED
31 DECEMBER 1996
<TABLE>
<CAPTION>
NOTES 1997 1997 1996
US $'000 UK POUND STERLING'000 UK POUND STERLING'000
<S> <C> <C> <C> <C>
TURNOVER 2 6,315 3,827 3,691
Cost of sales 4,305 2,609 2,830
----- ----- -----
Gross profit 2,010 1,218 861
Net operating expenses 3 895 542 613
----- ----- -----
OPERATING PROFIT 4 1,115 676 248
Interest payable 5 490 297 306
----- ----- -----
PROFIT/(LOSS) ON ORDINARY ACTIVITIES BEFORE
TAXATION 625 379 (58)
Taxation on profit on ordinary activities 6 -- -- --
----- ----- -----
RETAINED PROFIT/(LOSS) FOR THE YEAR 14 625 379 (58)
===== ===== =====
</TABLE>
There are no recognized gains and losses other than those included in the
profits above and therefore no separate statement of total recognized gains and
losses has been prepared.
There is no difference between the profits on ordinary activities before
taxation and the retained profit for the periods stated above and their
historical cost equivalents.
All amounts above relate to continuing operations.
Notes to the financial statements are on pages 7 to 13.
<PAGE> 11
TECH TEXTILES INTERNATIONAL 5
BALANCE SHEETS AT 31 DECEMBER 1997
AND 31 DECEMBER 1996
<TABLE>
<CAPTION>
NOTES 1997 1997 1996
US $'000 UK POUND STERLING'000 UK POUND STERLING'000
<S> <C> <C> <C> <C>
FIXED ASSETS
Tangible assets 10 1,799 1,090 1,169
CURRENT ASSETS
Stocks 11 563 341 356
Debtors 12 1,658 1,005 1,090
Cash at bank and in hand 863 523 410
------ ------ ------
3,084 1,869 1,856
CREDITORS: amounts falling due within
one year 13 (4,323) (2,620) (3,065)
------ ------ ------
Net current liabilities (1,239) (751) (1,209)
------ ------ ------
NET ASSETS/(LIABILITIES) 560 339 (40)
====== ====== ======
REPRESENTED BY
Profit and loss account 14 560 339 (40)
====== ====== ======
</TABLE>
DIRECTOR
BRUNSWICK TECHNOLOGIES, INC.
Notes to the financial statements are on pages 7 to 13.
<PAGE> 12
TECH TEXTILES INTERNATIONAL 6
CASH FLOW STATEMENTS FOR THE YEAR ENDED 31 DECEMBER 1997 AND THE YEAR ENDED 31
DECEMBER 1996
<TABLE>
<CAPTION>
1997 1997 1996
US $'000 UK POUND STERLING'000 UK POUND STERLING'000
<S> <C> <C> <C>
NET CASH INFLOW FROM OPERATING ACTIVITIES
(reconciliation to operating profit below) 782 474 1,526
---- ---- ----
RETURNS ON INVESTMENTS AND SERVICING OF FINANCE
Interest paid to T&N (490) (297) (306)
---- ---- ----
TAXATION
UK corporation tax paid - - -
---- ---- ----
CAPITAL EXPENDITURE
Purchase of tangible fixed assets (106) (64) (252)
---- ---- ----
NET CASH INFLOW BEFORE FINANCING 186 113 968
FINANCING - - -
---- ---- ----
INCREASE IN NET CASH IN THE YEAR (NOTE 15) 186 113 968
==== ==== ====
</TABLE>
RECONCILIATION OF OPERATING PROFIT TO NET CASH
INFLOW FROM OPERATING ACTIVITIES
<TABLE>
<CAPTION>
1997 1997 1996
US $'000 UK POUND STERLING'000 UK POUND STERLING'000
<S> <C> <C> <C>
CONTINUING OPERATING ACTIVITIES
Operating profit 1,115 676 248
Depreciation on tangible fixed assets 236 143 120
Decrease in stocks 25 15 185
Decrease/(increase) in debtors 140 85 (291)
(Decrease)/increase in creditors (734) (445) 1,264
---- ---- -----
Net cash inflow from continuing operating activities 782 474 1,526
==== ==== =====
</TABLE>
<PAGE> 13
TECH TEXTILES INTERNATIONAL 7
NOTES TO THE FINANCIAL STATEMENTS FOR THE
YEAR ENDED 31 DECEMBER 1997 AND THE YEAR
ENDED 31 DECEMBER 1996
1 PRINCIPAL ACCOUNTING POLICIES
The financial statements have been prepared in accordance with applicable
Accounting Standards in the United Kingdom. A summary of the more important
accounting policies, which have been applied consistently, is set out below.
(a) BASIS OF PREPARATION
These financial statements are not prepared under section 226 of the
Companies Act 1985.
The financial statements have been prepared in accordance with the
historical cost convention solely for the purposes of the directors of
Brunswick Technologies, Inc. in connection with their acquisition of
Tech Textiles International.
(b) BASIS OF TRANSLATION INTO US DOLLARS
The profit and loss account and cash flow statement for the year ended
31 December 1997 and the balance sheet at that date have been
translated into US dollars on a convenience basis using the exchange
rate in force on 31 December 1997 of pound sterling 1 = $1.65. This
rate is not significantly different from the rate at 30 April 1998.
US dollar-equivalent amounts are presented for reference only, and
should not be regarded as US dollar financial statements.
(c) CASH FLOW STATEMENT
A cash flow statement has been prepared in accordance with UK
accounting standards and is set out on page 6.
(d) TURNOVER
Turnover represents sales to third parties excluding value added tax.
<PAGE> 14
TECH TEXTILES INTERNATIONAL 8
1 PRINCIPAL ACCOUNTING POLICIES
(e) DEPRECIATION
Depreciation is calculated to write off the cost of fixed assets over
their expected useful lives on a straight line basis. The principal
annual rates used for this purpose, which have been applied
consistently, are as follows:
Plant and machinery - 7% to 10%
Office equipment - 25% to 33%
(f) STOCK AND WORK IN PROGRESS
Stock and work in progress is valued at the lower of cost and net
realizable value. Cost is determined on a first in first out basis and
comprises direct material cost, direct labor cost and attributable
production overheads.
(g) RESEARCH AND DEVELOPMENT
Research and development expenditure is written off as incurred.
(h) FOREIGN CURRENCIES
Assets and liabilities are translated to sterling at the rates of
exchange ruling at the balance sheet date. Transactions are translated
at the rate ruling at the date of the transaction. Differences arising
from trading transactions are included in operating profit.
(i) PENSION COSTS
Pension costs are accounted for on the basis of charging the cost of
providing pensions over the period during which the company benefits
from employees' services.
(j) OPERATING LEASES
Costs in respect of operating leases are charged in arriving at the
operating result.
<PAGE> 15
TECH TEXTILES INTERNATIONAL 9
2 TURNOVER
The geographical analysis of turnover, which represents sales of non-crimp
reinforcing fabrics for composite materials, was:
<TABLE>
<CAPTION>
1997 1996
POUND STERLING'000 POUND STERLING'000
<S> <C> <C>
United Kingdom 1,909 1,439
Europe 1,650 2,023
Rest of the world 268 229
----- -----
3,827 3,691
===== =====
</TABLE>
3 NET OPERATING EXPENSES
<TABLE>
<CAPTION>
1997 1996
POUND STERLING'000 POUND STERLING'000
<S> <C> <C>
Selling and distribution costs 370 360
Administrative expenses 172 253
----- -----
542 613
===== =====
</TABLE>
4 OPERATING PROFIT
<TABLE>
<CAPTION>
1997 1996
POUND STERLING'000 POUND STERLING'000
<S> <C> <C>
OPERATING PROFIT IS STATED AFTER CHARGING:
Depreciation of tangible fixed assets 143 120
Operating lease rentals:
- Hire of plant and machinery 1 1
- Other 108 104
T&N plc group management charge -- 69
===== =====
</TABLE>
5 INTEREST PAYABLE
<TABLE>
<CAPTION>
1997 1996
POUND STERLING'000 POUND STERLING'000
<S> <C> <C>
Amounts payable to undertakings in the T&N plc group 297 306
</TABLE>
6 TAXATION ON PROFIT ON ORDINARY ACTIVITIES
Tech Textiles International is a division of T&N plc and is not separately
subject to UK corporation tax.
<PAGE> 16
TECH TEXTILES INTERNATIONAL 10
7 DIRECTORS' EMOLUMENTS
The division is not separately established as a limited company and therefore
has no directors.
8 EMPLOYEE INFORMATION
The average number of persons employed during the period was:
<TABLE>
<CAPTION>
1997 1996
NUMBER NUMBER
<S> <C> <C>
Production 19 18
Selling 4 4
Administration 2 2
------ ------
25 24
====== ======
</TABLE>
Employment costs:
<TABLE>
<CAPTION>
1997 1996
POUND STERLING'000 POUND STERLING'000
<S> <C> <C>
Aggregate gross wages and salaries 513 478
Social security costs 55 50
Pension costs (note 9) 29 29
------ ------
597 557
====== ======
</TABLE>
9 PENSION COSTS
Eight of the division's employees belong to The T&N plc Group Pension Scheme,
for which contributions are paid monthly. The Scheme is a defined benefit scheme
in the United Kingdom, the assets of which are held in a separate
trust-administered fund.
The pension cost is assessed in accordance with the advice of independent
qualified actuaries in order to secure final salary-related benefits. According
to the latest available published financial statements of T&N plc for the year
ended 31 December 1996, the most recent actuarial valuation, using the projected
unit method, was carried out on 31 March 1993. The market value of the assets of
the Scheme at that date was pound sterling 747 million and the actuarial value
of these assets represented 129% of the benefits which had accrued to members
after allowing for increases in earnings and Scheme improvements.
The assumptions which have the most significant effect on the results of this
valuation are those relating to the differentials between the rates of return on
investments and the rates of increase in salaries and pensions. It was assumed
that the investment return would be 2% per annum higher than the rate of annual
salary increases, and 5% per annum higher than the rate at which present and
future pensions would increase.
<PAGE> 17
TECH TEXTILES INTERNATIONAL 11
The surplus in the United Kingdom scheme is being amortised over thirteen years,
the average remaining service lives of employees.
Pension costs for the year ended 31 December 1997 amounted to pound sterling
29,000 (1996: pound sterling 29,000)
10 TANGIBLE FIXED ASSETS
<TABLE>
<CAPTION>
PLANT & OFFICE
MACHINERY EQUIPMENT TOTAL
POUND STERLING'000 POUND STERLING'000 POUND STERLING'000
<S> <C> <C> <C>
COST
At 1 January 1996 1,201 34 1,235
Additions 245 7 252
----- ----- -----
At 31 December 1996 1,446 41 1,487
Additions 42 22 64
----- ----- -----
At 31 December 1997 1,488 63 1,551
===== ===== =====
DEPRECIATION
At 1 January 1996 173 25 198
Charge for the year 111 9 120
----- ----- -----
At 31 December 1996 284 34 318
Charge for the year 133 10 143
----- ----- -----
AT 31 DECEMBER 1997 417 44 461
===== ===== =====
NET BOOK VALUE
AT 31 DECEMBER 1997 1,071 19 1,090
===== ===== =====
At 31 December 1996 1,162 7 1,169
===== ===== =====
At 31 December 1995 1,028 9 1,037
===== ===== =====
</TABLE>
11 STOCKS
<TABLE>
<CAPTION>
1997 1996
POUND STERLING'000 POUND STERLING'000
<S> <C> <C>
Raw materials 171 218
Finished goods 170 138
----- -----
341 356
===== =====
</TABLE>
<PAGE> 18
TECH TEXTILES INTERNATIONAL 12
12 DEBTORS
<TABLE>
<CAPTION>
1997 1996
POUND STERLING'000 POUND STERLING'000
<S> <C> <C>
AMOUNTS FALLING DUE WITHIN ONE YEAR:
Trade debtors 961 992
Prepayments and accrued income 44 98
----- -----
1,005 1,090
===== =====
</TABLE>
13 CREDITORS: AMOUNTS FALLING DUE WITHIN ONE YEAR
<TABLE>
<CAPTION>
1997 1996
POUND STERLING'000 POUND STERLING'000
<S> <C> <C>
Trade creditors 719 760
Amounts owed to undertakings in the T&N plc Group 1,834 2,222
Other taxation and social security 16 29
Other creditors and accruals 51 54
----- -----
2,620 3,065
===== =====
</TABLE>
14 PROFIT AND LOSS ACCOUNT
<TABLE>
<CAPTION>
1997 1996
POUND STERLING'000 POUND STERLING'000
<S> <C> <C>
At 1 January (40) 18
Retained profit/(loss) for the year 379 (58)
----- -----
At 31 December 339 (40)
===== =====
</TABLE>
15 ANALYSIS OF NET CASH
<TABLE>
<CAPTION>
1 JANUARY 31 DECEMBER 31 DECEMBER
1996 CASH FLOWS 1996 CASH FLOWS 1997
POUND STERLING'000 POUND STERLING'000 POUND STERLING'000 POUND STERLING'000 POUND STERLING'000
<S> <C> <C> <C> <C> <C>
NET CASH
Cash at bank and in hand -- 410 410 113 523
Bank overdraft (558) 558 -- -- --
----- ----- ----- ----- -----
(558) 968 410 113 523
===== ===== ===== ===== =====
</TABLE>
<PAGE> 19
TECH TEXTILES INTERNATIONAL 13
16 CONTINGENT LIABILITIES
There were no contingent liabilities at either 31 December 1997 or 31 December
1996.
17 CAPITAL COMMITMENTS
There were no capital commitments at either 31 December 1997 or 31 December
1996.
18 FINANCIAL COMMITMENTS
Annual commitments under non-cancellable operating leases in respect of land and
buildings were as follows:
<TABLE>
<CAPTION>
1997 1996
POUND STERLING'000 POUND STERLING'000
<S> <C> <C>
Expiring between two and five years inclusive 81 81
==== ====
</TABLE>
19 CONTROLLING PARTY AND RELATED PARTY TRANSACTIONS
At 31 December 1996 and 31 December 1997, the ultimate controlling party of the
division was T&N plc, a company incorporated and registered in England and
Wales. Interest and management charges levied on the division by T&N plc
amounted to pound sterling 375,000 in the year ended 31 December 1996 and pound
sterling 297,000 in the year ended 31 December 1997.
20 POST BALANCE SHEET EVENT
On 2 March 1998, T&N plc sold the assets and liabilities of Tech Textiles
International to Brunswick Technologies Europe Limited, a 100% subsidiary of
Brunswick Technologies, Inc., which is incorporated in England and Wales.
Intellectual property and technical know-how was sold to Brunswick Technologies
Inc.
<PAGE> 20
TECH TEXTILES INTERNATIONAL 14
21 DIFFERENCES BETWEEN UK GAAP AND US GAAP
The accounting policies and accounting standards under which the financial
statements of the company are prepared are in accordance with UK GAAP. The major
differences between UK GAAP and US GAAP, as they affect the financial statements
of Tech Textiles International, are set out below:
INTANGIBLE FIXED ASSETS
Under UK GAAP, intangible fixed assets such as patents and trademarks
may be expensed in the year in which they are acquired. Under US GAAP,
intangible fixed assets must be capitalised and amortised over a period
up to a maximum of 40 years. Since the patents and trademarks expensed
by Tech Textiles International have an average useful economic life of
twenty years, that has been used as the period over which amortisation
is charged in the reconciliations in note 22.
CASH FLOW
Under US GAAP, bank overdrafts are not considered to be part of net
cash equivalents and so changes in bank overdrafts (net) are included
in cash flows financing activities. Under UK GAAP, bank overdrafts form
part of net cash.
22 RECONCILIATION OF RESULTS AND NET ASSETS FROM UK GAAP TO US GAAP
<TABLE>
<CAPTION>
1997 1996
POUND STERLING'000 POUND STERLING'000
<S> <C> <C>
Retained profit/(loss) in accordance with UK GAAP 379 (58)
Intangible fixed assets written off during the year 19 32
Amortisation of intangible fixed assets written off since acquisition by
T&N plc (5) (4)
----- -----
Net income/(loss), in accordance with US GAAP 393 (30)
===== =====
<CAPTION>
1997 1996
POUND STERLING'000 POUND STERLING'000
<S> <C> <C>
Net assets/(liabilities) in accordance with UK GAAP 339 (40)
Cost of intangible fixed assets written off since acquisition by T&N plc 107 88
Accumulated amortisation relating to those assets (14) (9)
----- -----
Net assets/(liabilities) in accordance with US GAAP 432 (39)
===== =====
</TABLE>
<PAGE> 21
TECH TEXTILES INTERNATIONAL 15
STATEMENT OF CASH FLOWS FOR THE YEAR ENDED 31 DECEMBER 1997 AND THE YEAR ENDED
31 DECEMBER 1996
The cash flow statement presented below is prepared in accordance with US GAAP.
<TABLE>
<CAPTION>
1997 1997 1996
US $'000 UK POUND STERLING'000 UK POUND STERLING'000
<S> <C> <C> <C>
CASH FLOWS FROM OPERATING ACTIVITIES
Net income/(loss) 648 393 (30)
Adjustments to reconcile net income to net cash provided by
operating activities:
Depreciation 236 143 120
Write-back of intangible fixed assets
previously written-off (31) (19) (32)
Amortisation of intangible fixed assets 8 5 4
Changes in assets and liabilities:
Decrease/(increase) in accounts receivable, net 51 31 (265)
Decrease in inventories 25 15 185
Decrease/(increase) in other current assets 89 54 (26)
(Decrease) in accounts payable, trade (68) (41) (433)
(Decrease) in accrued liabilities (26) (16) (48)
(Decrease)/increase in accounts payable, T&N plc
Group (640) (388) 1,745
----- ----- -----
Net cash provided by operating activities 292 177 1,220
----- ----- -----
CASH FLOWS FROM INVESTING ACTIVITIES
Additions to property, plant and equipment (106) (64) (252)
----- ----- -----
Net cash used by investing activities (106) (64) (252)
----- ----- -----
Cash flows from fund activities:
Net decrease in short term debt - bank overdrafts -- -- (558)
----- ----- -----
Net cash used in financing activities -- -- (558)
----- ----- -----
Net increase in cash and cash equivalents 186 113 410
Cash and cash equivalents at the beginning of year 677 410 --
----- ----- -----
CASH AND CASH EQUIVALENTS AT THE END OF THE YEAR 863 523 410
===== ===== =====
</TABLE>
<PAGE> 22
UNAUDITED PRO FORMA CONSOLIDATED FINANCIAL INFORMATION
On March 2, 1998, the Company acquired the technical know-how and
intellectual property of Tech Textiles International Limited ("TTI"), and
through the Company's wholly owned subsidiary, Brunswick Technologies Europe
Limited ("BTE"), acquired substantially all of the remainder of the assets of
TTI (transactions taken together hereafter referred to as the "Acquisition").
The purchase price was GBP 3,600,000 (approximately US $5,993,000 in cash)
subject to adjustments for working capital as provided by the Agreement.
The Unaudited Pro Forma Consolidated Financial Statements give effect
to the Acquisition under the purchase method of accounting using the assumptions
and adjustments described in the notes to the Unaudited Pro Forma Consolidated
Financial Statements. The Unaudited Pro Forma consolidated Statement of Earnings
for the year ended December 31, 1997 have been prepared to give effect to the
Acquisition as if the acquisition occurred on January 1, 1997. The Unaudited Pro
Forma Consolidated Balance Sheet as of December 31, 1997 has been prepared to
give effect to the Acquisition as if it occurred on such date.
The Unaudited Pro Forma Consolidated Financial Statements are not
necessarily indicative of the results that would have been obtained had the
Acquisition of TTI been completed as of the dates presented or for any future
period. The Unaudited Pro Forma Consolidated Financial Statements should be read
in conjunction with the Company's Consolidated Financial Statements and notes
thereto included in the Company's Form 10-K dated December 31, 1997.
<PAGE> 23
Brunswick Technologies, Inc.
Unaudited Pro Forma Consolidated Statement of Earnings
For the Year Ended December 31, 1997
(in thousands, except per share data)
<TABLE>
<CAPTION>
Historical Historical Pro Forma Pro Forma
BTI TTI Adjustments Adjustments Consolidated
-----------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
Net sales $ 30,509 $ 6,315 $ 36,824
Cost of goods sold 22,807 4,305 27,112
----------------------------------- --------
Gross profit 7,702 2,010 9,712
Selling, general and administrative expenses 5,244 895 $ 441 (a),(c) 6,580
Research and development expenses 677 0 677
----------------------------------- --------
Operating income 1,781 1,115 (441) 2,455
Interest income 319 (271) (b) 48
Interest expense (328) (490) 490 (c) (328)
Miscellaneous, net 210 210
----------------------------------- --------
Income before income tax 1,982 625 (222) 2,385
----------------------------------- --------
Provision for income taxes 707 116 (d) 823
----------------------------------- --------
Net income 1,275 625 (338) 1,562
Preferred stock dividends (56) (56)
----------------------------------- ---------
Net income applicable to common
stockholders $ 1,219 $ 625 $ (338) $ 1,506
=================================== ========
Basic:
Earnings per share $ 0.29 $ 0.36
Weighted common shares outstanding 4,216 4,216
(in thousands)
Diluted:
Earnings per share $ 0.26 $ 0.32
Weighted average common shares outstanding 4,936 4,936
(in thousands)
</TABLE>
<PAGE> 24
Brunswick Technologies, Inc.
Unaudited Pro Forma Consolidated Statement of Earnings
For the Year Ended December 31, 1997
(in thousands, except per share data)
<TABLE>
<CAPTION>
Historical Historical Pro Forma Pro Forma
BTI TTI Adjustments Adjustments Consolidated
-------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
ASSETS
CURRENT ASSETS:
Cash $ 353 $ 863 $ (863) (e) $ 353
Marketable securities available for sale 6,607 (5,993) (e) 614
Accounts receivable 2,978 1,658 228 4,864
Inventories 3,308 563 3,871
Deferred income taxes 180 180
Other current assets 354 0 354
------------------------------------- --------
Total current assets 13,780 3,084 (6,628) 10,236
Property, plant & equipment, net 6,274 1,799 5 (e) 8,078
Goodwill 5,039 820 (e) 5,859
Other assets 123 2,236 (e) 2,359
------------------------------------- --------
TOTAL ASSETS $ 25,216 $ 4,883 $ (3,567) $ 26,532
===================================== ========
LIABILITIES AND SHAREHOLDER'S EQUITY
CURRENT LIABILITIES:
Current portion of long-term debt $ 100 $ 100
Account payable stockholder 84 84
Accounts payable 538 $ 4,213 $ (3,157) (e) 1,594
Accrued expenses 514 110 150 (e) 774
Income taxes payable 130 130
------------------------------------- --------
Total current liabilities 1,366 4,323 (3,007) 2,682
Long-term debt 253 253
Deferred income taxes 370 370
SHAREHOLDERS' EQUITY:
Common stock 1 1
Additional paid in capital 24,715 24,715
Treasury stock (5) (5)
Accumulated deficit (1,484) 560 (560) (e) (1,484)
------------------------------------- --------
Total shareholders' equity 23,227 560 (560) 23,227
TOTAL LIABILITIES AND SHAREHOLDERS'
EQUITY $ 25,216 $ 4,883 $ (3,567) $(26,532)
===================================== ========
</TABLE>
<PAGE> 25
NOTES TO THE UNAUDITED PRO FORMA CONSOLIDATED FINANCIAL STATEMENTS
(in thousands)
(a) To record the incremental amortization on the purchased technology of $149
and goodwill of $42, which are being amortized over 15 and 20 years
respectively.
(b) To record the reduction in interest income earned as a result of using
marketable securities to complete the acquisition.
(c) To eliminate interest and management fees to T&N, plc of $490, and to record
general and administrative expenses to be incurred by TTI on a going forward
basis of $250.
(d) To record tax on the income of TTI not reflected in the historical results
of $194 and to record the income tax expense or benefit associated with
adjustments (a) through (c).
(e) To adjust the assets and liabilities to allocate the purchase cost of the
acquisition:
* To adjust working capital to the agreed amount to be acquired of GBP
800. (approximately US $1,300)
* To adjust assets and liabilities for amounts excluded from the
transactions, primarily cash and amounts due to T&N, plc.
* To adjust property, plant and equipment to estimated fair market
value and eliminate prior accumulated depreciation.
* To adjust inventory and accounts receivable to net realizable value.
* To record goodwill of $820 for the excess of the purchase price of
$5,993 and acquisition cost of $150 over the estimated fair market value of the
assets acquired of $5,323.
* To eliminate prior TTI equity.
