<PAGE> 1
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K/A-1
AMENDMENT NO. 1
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 28, 1996
-------------------------
Astrotech International Corporation
- -------------------------------------------------------------------------------
(Exact Name of registrant as specified in its charter)
Delaware
- -------------------------------------------------------------------------------
(State or other jurisdiction of incorporation)
1-10011 25-1570579
- ------------------------ ---------------------------------
(Commission File Number) (IRS Employer Identification No.)
960 Penn Avenue, Suite 800, Pittsburgh, PA 15222
- -------------------------------------------------------------------------------
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code (412) 391-1896
--------------
- -------------------------------------------------------------------------------
(Former name or former address, if changed since last report.)
<PAGE> 2
The Registrant filed a Current Report on Form 8-K on April 11, 1996 relating to
its acquisition of Graver Tank & Mfg. Co., Inc. ("Graver"). At the time of
such filing, it was impracticable to provide certain financial statements of the
business acquired and the required pro forma financial information. The
Registrant hereby amends its Current Report on Form 8-K by filing the following
required information on this Form 8-K/A-1.
2
<PAGE> 3
ITEM 7. FINANCIAL STATEMENTS, PRO FORMA FINANCIAL INFORMATION AND EXHIBITS
<TABLE>
<CAPTION>
(a) FINANCIAL STATEMENTS OF BUSINESS ACQUIRED PAGE
----
<S> <C>
Report of Independent Accountants F-2
Consolidated Balance Sheet as of December 31, 1995 F-3
Consolidated Statement of Operations for the Year Ended December 31, 1995 F-4
Consolidated Statement of Stockholders' Equity for the
Year Ended December 31, 1995 F-5
Consolidated Statement of Cash Flows for the Year Ended December 31, 1995 F-6
Notes to Consolidated Financial Statements F-7 thru F-12
Report of Independent Auditors F-15
Consolidated Balance Sheets as of December 31, 1994 and 1993 F-16 and F-17
Consolidated Statements of Operations for the Years Ended
December 31, 1994 and 1993 F-18
Consolidated Statements of Stockholders' Equity for the
Years Ended December 31, 1994 and 1993 F-19
Consolidated Statements of Cash Flows for the Years Ended
December 31, 1994 and 1993 F-20
Notes to Consolidated Financial Statements F-21 thru F-25
(b) UNAUDITED PRO FORMA FINANCIAL INFORMATION
Unaudited Pro Forma Condensed Consolidated Balance Sheet F-26 thru F-28
Unaudited Pro Forma Condensed Consolidated Statements of Operations F-29 thru F-32
</TABLE>
(c) EXHIBITS
Exhibit (10)(i) Stock Purchase Agreement dated as of March 7, 1996, by and among
Timothy J. McDavid, Astrotech International Corporation, and Graver Holding
Company and Graver Tank & Mfg. Co., Inc. (Incorporated by reference to
Exhibit (10)(i) to the Company's Current Report on Form 8-K filed on
April 11, 1996)
Exhibit (10)(ii) First Amendment to Revolving Credit and Term Loan Agreement by
and between Astrotech International Corporation and Bank One, Texas, NA,
dated as of March 28, 1996 (Incorporated by reference to Exhibit (10)(i)
to the Company's Current Report on Form 8-K filed on April 11, 1996)
Exhibit 24(i) Consent of Coopers & Lybrand LLP Certified Public Accountants
Exhibit 24(ii) Consent of Ernst & Young LLP Certified Public Accountants
3
<PAGE> 4
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 officer thereunto duly authorized.
ASTROTECH INTERNATIONAL CORPORATION
June 7, 1996 By: /s/ RAYMOND T. ROYKO
----------------------------
Raymond T. Royko
Vice President and Secretary
4
<PAGE> 5
EXHIBIT INDEX
Exhibit (10)(i) Stock Purchase Agreement dated as of March 7, 1996, by and among
Timothy J. McDavid, Astrotech International Corporation, and Graver Holding
Company and Graver Tank & Mfg. Co., Inc. (Incorporated by reference to
Exhibit (10)(i) to the Company's Current Report on Form 8-K filed on
April 11, 1996)
Exhibit (10)(ii) First Amendment to Revolving Credit and Term Loan Agreement by
and between Astrotech International Corporation and Bank One, Texas, NA,
dated as of March 28, 1996 (Incorporated by reference to Exhibit (10)(i)
to the Company's Current Report on Form 8-K filed on April 11, 1996)
Exhibit 24(i) Consent of Coopers & Lybrand LLP Certified Public Accountants
Exhibit 24(ii) Consent of Ernst & Young LLP Certified Public Accountants
5
<PAGE> 6
GRAVER TANK & MFG. CO., INC. AND SUBSIDIARIES
REPORT ON AUDIT OF CONSOLIDATED FINANCIAL STATEMENTS
for the year ended December 31, 1995
F - 1
<PAGE> 7
REPORT OF INDEPENDENT ACCOUNTANTS
To the Board of Directors of Graver Tank &
Mfg. Co., Inc. and Subsidiaries:
We have audited the accompanying consolidated balance sheet of Graver Tank &
Mfg. Co., Inc. and Subsidiaries (the Company) as of December
31,1995, and the related consolidated statements of operations, stockholders'
equity and cash flows for the year then ended. These consolidated financial
statements are the responsibility of the Company's management. Our
responsibility is to express an opinion on these consolidated 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.
As discussed in Note 7 to the consolidated financial statements, on March 28,
1996, all of the issued and outstanding stock of the Company was sold to
Astrotech International Corporation.
In our opinion, the 1995 consolidated financial statements referred to above
present fairly, in all material respects, the financial position of the Company
as of December 31, 1995, and the results of its operations and its cash flows
for the year then ended in conformity with generally accepted accounting
principles.
/s/ COOPERS & LYBRAND, L.L.P.
Pittsburgh, Pennsylvania
February 21, 1996, except for Note 7 as
to which the date is March 28, 1996
F - 2
<PAGE> 8
GRAVER TANK & MFG. CO., INC. AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEET
as of December 31, 1995
----------
ASSETS
<TABLE>
<S> <C>
Current assets:
Cash and equivalents $ 1,351,628
Accounts receivable, less allowance for doubtful accounts of $271,555 2,929,669
Retainages receivable 791,299
Other receivables 20,726
Costs and estimated earnings in excess of billings on uncompleted contracts (Note 2) 560,227
Inventories 140,249
Other current assets 36,871
-----------
Total current assets 5,830,669
Property and equipment:
Land 136,000
Building and building improvements 1,530,852
Construction equipment and tools 2,189,079
Machinery and equipment 1,810,648
Furniture and fixtures 355,016
-----------
6,021,595
Less accumulated depreciation (4,050,006)
-----------
1,971,589
Other non-current assets 90,858
-----------
Total assets $ 7,893,116
===========
</TABLE>
LIABILITIES AND STOCKHOLDERS' EQUITY
<TABLE>
<S> <C>
Current liabilities:
Current portion of long-term debt (Note 4) 547,162
Trade accounts payable 1,622,210
Billings in excess of costs and estimated earnings on uncompleted contracts (Note 2) 3,430,542
Accrued liabilities 1,669,842
-----------
Total current liabilities 7,269,756
Long-term debt 1,065,820
Stockholders' equity (deficit) (Note 6):
Common stock, $1 par value; 1,000,000 shares authorized, 454,391 shares issued and
outstanding 454,391
Additional paid-in capital 3,069,561
Accumulated deficit (3,344,406)
Treasury stock (61,200)
Receivable from shareholder (560,806)
-----------
Total stockholders' equity (deficit) (442,460)
-----------
Total liabilities and stockholders' equity (deficit) $ 7,893,116
===========
</TABLE>
The accompanying notes are an integral
part of the consolidated financial statements
F - 3
<PAGE> 9
GRAVER TANK & MFG. CO., INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENT OF OPERATIONS
for the year ended December 31, 1995
---------
<TABLE>
<S> <C>
Construction revenues $30,126,484
-----------
Costs and expenses:
Direct costs and expenses 29,000,927
General and administrative expenses 3,600,001
Depreciation 426,650
Interest 221,286
-----------
33,248,864
-----------
Loss from operations (3,122,380)
Other nonoperating income 390,057
-----------
Loss before income taxes (2,732,323)
Income tax expense (Note 5) 125,387
-----------
Net loss $(2,857,710)
===========
</TABLE>
The accompanying notes are an integral
part of the consolidated financial statements.
F - 4
<PAGE> 10
GRAVER TANK & MFG. CO., INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENT OF STOCKHOLDERS' EQUITY
for the year ended December 31, 1995
----------
<TABLE>
<CAPTION>
Additional Loan
Common Paid-in Accumulated Treasury to
Total Stock Capital Deficit Stock Shareholder
----------- --------- ---------- ----------- -------- ---------
<S> <C> <C> <C> <C> <C> <C>
Balance at December 31, 1994 $ 3,690,910 $ 901,488 $3,740,207 $ (486,696) $(61,200) $(402,889)
Net loss (2,857,710) -- -- (2,857,710) -- --
Additional loans to shareholder (181,917) -- -- -- -- (181,917)
Amounts received on shareholder loan 24,000 -- -- -- -- 24,000
Repurchase of minority
shareholders' stock (1,117,743) (447,097) (670,646) -- -- --
----------- --------- ---------- ----------- -------- ---------
Balance at December 31, 1995 $ (442,460) $ 454,391 $3,069,561 $(3,344,406) $(61,200) $(560,806)
=========== ========= ========== =========== ======== =========
</TABLE>
The accompanying notes are an integral
part of the consolidated financial statements.
F - 5
<PAGE> 11
GRAVER TANK & MFG. CO., INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENT OF CASH FLOWS
for the year ended December 31, 1995
---------
<TABLE>
<S> <C>
Operating activities:
Net loss $(2,857,710)
Adjustments to reconcile net income to net cash provided by operating
activities:
Depreciation 426,650
Amortization of small tools 164,711
Amortization of loan fees 20,012
Deferred income tax benefit 100,387
Gain on sale of equipment (66,557)
Changes in operating assets and liabilities:
Decrease in accounts receivable 9,066,981
Increase in retainages receivable (154,537)
Increase in other assets (27,304)
Decrease in other receivables 237,237
Increase in inventory (3,650)
Decrease in billings in excess of costs and estimated earnings
on uncompleted contracts 1,562,585
Decrease in costs and estimated earnings in excess
of billings on uncompleted contracts 923,479
Decrease in accounts payable (4,141,780)
Decrease in accrued expenses (99,297)
Decrease in other liabilities (557,055)
-----------
Net cash provided by operating activities 4,594,152
-----------
Investing activities:
Purchases of property and equipment (551,460)
Proceeds from sale of equipment 90,700
Proceeds from sale of investments 76,265
-----------
Net cash used in investing activities (384,495)
-----------
Financing activities:
Repurchase of company stock (1,117,743)
Additional advances to shareholder, net (157,917)
Principal payments on revolving line of credit and long-term debt (2,489,456)
-----------
Net cash used in financing activities (3,765,116)
-----------
Increase in cash 444,541
Cash and cash equivalents at beginning of year 907,087
-----------
Cash and cash equivalents at end of year $ 1,351,628
===========
Supplemental disclosure of cash flow information:
Cash paid during the year for:
Interest $ 223,500
===========
Taxes $ 325,000
===========
</TABLE>
The accompanying notes are an integral
part of the consolidated financial statements.
F - 6
<PAGE> 12
GRAVER TANK & MFG. CO., INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
--------
1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES:
NATURE OF OPERATIONS:
Graver Tank & Mfg. Co., Inc. (the Company) is engaged in the
design and construction of above ground storage tanks, stacks and vessels for
customers principally in the petroleum, petrochemical and utility industries.
The Company is based in Houston, Texas.
PRINCIPLES OF CONSOLIDATION:
The accompanying consolidated financial statements include the accounts of
the Company and its wholly-owned subsidiaries, Graver Tank International,
Inc., Graver Tank and Vessel, Inc., and Graver Power, Inc. All significant
intercompany accounts and transactions have been eliminated from the
consolidated financial statements.
REVENUE RECOGNITION:
Revenues from construction, with related installation services, arise from
contracts and are recognized on the percentage-of-completion method. Revenues
are measured by the percentage contracts are completed, generally calculated
as costs incurred to date to total costs estimated to complete. Provisions
for estimated losses on uncompleted contracts are made in the period in which
such losses are determined. Future operating results may be affected if
actual contract costs incurred differ from total contract costs currently
estimated by management.
The asset, "costs and estimated earnings in excess of billings on uncompleted
contracts," represents revenues recognized in excess of amounts billed. The
liability, "billings in excess of costs and estimated earnings on uncompleted
contracts," represents billings in excess of revenues recognized. Generally,
contracts are progress billed as work progresses.
OPERATING CYCLE:
In accordance with industry practice, the Company classifies as current
assets amounts relating to long-term construction contracts which may have
terms extending beyond one year but are expected to be realized during the
normal operating cycle of the Company. The liabilities in the accompanying
consolidated balance sheet which have been classified as current liabilities
are those expected to be satisfied by the use of assets classified as current
assets.
USE OF ESTIMATES:
The preparation of the consolidated financial statements in conformity with
generally accepted accounting principles requires management to make
estimates and assumptions that affect the reported amounts of assets and
liabilities at the date of the consolidated financial statements and the
reported amounts of revenues and expenses during the reporting period. Actual
results could differ from those estimates
F - 7
<PAGE> 13
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS, Continued
--------
1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES, continued:
SOURCES OF SUPPLY
The Company currently has agreements in place that will provide for a
substantial portion of future material needs for existing contracts. However,
the loss of a significant supplier could have an adverse affect on
operations.
CASH EQUIVALENTS:
Cash equivalents consist of short-term, highly liquid investments which are
readily convertible into cash. No collateral or other security is provided on
cash deposits other than $100,000 of deposits insured by the Federal Deposit
Insurance Corporation
CREDIT CONCENTRATION
The Company primarily performs construction contracts for customers in the
oil/petroleum, petrochemical and utility industries. The Company evaluates
the customer's financial condition before a construction bid is submitted and
generally collateral is not required. Credit losses are provided for in the
consolidated financial statements and consistently have been within
management's expectation. As of December 31, 1995, accounts receivable from
these industries were as follows:
<TABLE>
<CAPTION>
Accounts Retainage
Receivable Receivable
---------- ----------
<S> <C> <C>
Oil/petroleum $ 468,747 $126,608
Petrochemical 966,791 261,129
Utility 1,494,131 403,562
---------- --------
$2,929,669 $791,299
========== ========
</TABLE>
INVENTORIES:
Inventories, which consist of raw materials to be used on future contracts
and construction supplies, are stated at the lower of cost or market, with
cost determined using the first-in, first-out method.
PROPERTY AND EQUIPMENT:
Property and equipment is stated at cost. Depreciation is provided using the
straight-line method over the estimated useful lives of the assets. Small
tools are capitalized and included in construction equipment. Small tools are
amortized using the straight-line method over a period of four years which
approximates their average estimated useful life. Small tools amortization is
included in direct costs and expenses in the consolidated statement of
operations.
Routine maintenance and repairs are charged against operations. Major
renovations and repairs which extend the useful life of assets are
capitalized. When depreciable assets are retired or otherwise disposed of,
the cost and the related accumulated depreciation are eliminated from the
accounts and the resultant gain or loss is reflected in operations
F - 8
<PAGE> 14
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS, Continued
--------
1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES, continued:
INSURANCE COSTS:
The Company is covered by a retrospective insurance plan for property damage
and property liability in all states and workers' compensation in all states,
except in West Virginia and Ohio, where in the Company participates in the
respective State Workers' Compensation Programs. The Company estimates an
accrual for current claims outstanding and incurred but not reported claims
based upon the Company's loss experience which is determined by the insurance
company. The ultimate cost of claims outstanding could differ from
management's current estimates.
INCOME TAXES:
The Company uses Statement of Financial Accounting Standards (SFAS) No. 109,
"Accounting for Income Taxes" to recognize deferred tax liabilities and
assets for the "temporary differences" between the financial statement
carrying amounts and the tax basis of assets and liabilities using enacted
tax rates in effect in the years in which the differences are expected to
reverse. Valuation allowances are established when necessary to reduce
deferred tax assets to the amount expected to be realized.
2. COST AND ESTIMATED EARNINGS ON UNCOMPLETED CONTRACTS:
The following summarizes construction contracts in progress at December 31:
<TABLE>
<S> <C>
Costs incurred on uncompleted contracts $24,843,093
Estimated earnings 357,786
-----------
25,200,879
Less billings to date 28,071,194
-----------
$(2,870,315)
===========
</TABLE>
This amount is included in the accompanying consolidated balance sheet
under the following captions:
<TABLE>
<S> <C>
Costs and estimated earnings in excess of billings on
uncompleted contracts $ 560,227
Billings in excess of costs and estimated earnings on
uncompleted contracts (3,430,542)
-----------
$(2,870,315)
===========
</TABLE>
F - 9
<PAGE> 15
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS, Continued
--------
3. EMPLOYEE BENEFIT PLANS:
The Company has a defined contribution profit-sharing plan (401(k) plan)
covering all full-time nonunion employees. Employees are permitted to make
voluntary contributions up to certain limits as specified in the Plan
Agreement. Matching contributions are made by the Company based on defined
amounts per employee as described in the Plan Agreement. In addition, the
Company may elect to make a discretionary profit-sharing contribution to the
plan. For the year ended December 31, 1995, the amount of Company
contributions charged against operations approximated $68,000.
Under labor agreements with various craft unions, the Company made
contributions to union pension funds of approximately $368,000 for the year
ended December 31, 1995. Such contributions are based on various rates per
labor hour as specified in the craft agreements. Benefits are paid to
eligible employees from the union pension funds.
4. LONG-TERM DEBT:
The Company has a term loan outstanding with a balance of $1,551,782 as of
December 31, 1995. This loan bears interest at prime plus 1% and is due in
monthly installments of $56,000 including interest, through May 15, 1998. The
interest rate in effect at December 31, 1995 was 9.5%. The loan is
collateralized by all of the Company's accounts receivable, inventory, real
estate and equipment and is personally guaranteed by the Company's chief
executive officer.
The term loan agreement contains certain restricted covenants. As of December
31, 1995, the Company was not in compliance with certain financial covenants.
Under terms of the debt agreement the lender had the ability to declare the
Company in default of the loan agreement and declare all amounts outstanding
immediately due and payable. As discussed in Note 7, on March 28, 1996 the
Company was acquired by Astrotech, who immediately paid all amounts
outstanding under this agreement.
The Company also has an unsecured note payable in the amount of $61,200 as of
December 31, 1995. This note bears interest at 7% and is due on March 1,
2000.
Original maturities of long-term debt are as follows:
<TABLE>
<S> <C>
1996 $547,162
1997 602,097
1998 402,523
1999 and thereafter 61,200
</TABLE>
SFAS No. 107 requires disclosure about fair value of all financial
instruments. Based on interest rates currently available, management believes
that the carrying amount of long-term debt is a reasonable estimation of fair
value.
F - 10
<PAGE> 16
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS, Continued
--------
5. INCOME TAXES:
The components of income tax expense are:
<TABLE>
<S> <C>
Current:
Federal --
State $ 25,000
Deferred 100,387
--------
$125,387
========
</TABLE>
Deferred tax assets (liabilities) at December 31, 1995 are comprised of the
following:
<TABLE>
<S> <C>
Deferred tax assets:
Alternative minimum tax credits $ 54,000
Accrued insurance 480,000
Supplemental retirement 11,500
Bad debt allowance 92,000
Vacation pay 66,000
Contract accounting 353,000
---------
1,056,500
Deferred tax liabilities:
Property and equipment (192,000)
---------
Net deferred tax assets 864,500
---------
Valuation allowance (864,500)
---------
--
=========
</TABLE>
The valuation allowance of $864,500 recorded in 1995 arises from net internal
tax debits which are not currently expected to be utilized. The Company's
alternative minimum tax credits have no expiration date.
The recording of the valuation allowance and provisions for prior year taxes
is the primary reason for the difference between the federal statutory rate
and the effective tax rate.
F - 11
<PAGE> 17
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS, Continued
--------
6. STOCKHOLDERS' EQUITY:
At December 31, 1995, the Company has a loan receivable of $560,806 from its
majority shareholder. This loan had been scheduled to come due on December
31, 1995 but was extended through December 31, 1996. The amount has been
classified as a reduction to stockholders' equity in the accompanying
consolidated balance sheet.
In 1995, the Board of Directors authorized a plan for the mandatory
repurchase of certain minority shareholders' interest for $2.50 per share. A
total of 447,097 shares were repurchased and immediately retired under the
plan.
7. SUBSEQUENT EVENT:
On March 28, 1996, all of the issued and outstanding stock of the Company was
sold to Astrotech International Corporation (Astrotech) for a cash payment of
$2,750,000 and a contingent future payment of up to $1,250,000, based on
future operations of the Company. In conjunction with the acquisition,
Astrotech paid all amounts outstanding under the Company's term loan
agreement.
F - 12
<PAGE> 18
AUDITED CONSOLIDATED FINANCIAL
STATEMENTS
GRAVER TANK & MFG CO., INC.
AND SUBSIDIARIES
December 31, 1994
[LOGO] ERNST & YOUNG LLP
F - 13
<PAGE> 19
Graver Tank & Mfg. Co., Inc. and Subsidiaries
Audited Consolidated Financial Statements
December 31, 1994
CONTENTS
Report of Independent Auditors.................................. 1
Audited Consolidated Financial Statements
Consolidated Balance Sheets .................................... 2
Consolidated Statements of Operations .......................... 4
Consolidated Statements of Stockholders' Equity ................ 5
Consolidated Statements of Cash Flows .......................... 6
Notes to Consolidated Financial Statements...................... 7
F - 14
<PAGE> 20
REPORT OF INDEPENDENT AUDITORS
Board of Directors and Stockholders
Graver Tank & Mfg. Co., Inc.
We have audited the accompanying consolidated balance sheets of Graver Tank &
Mfg. Co., Inc. and subsidiaries as of December 31, 1994 and 1993, and the
related consolidated statements of operations, stockholders' equity, and cash
flows for the years 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 audits.
We conducted our audits 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 audits provide a reasonable basis for our opinion.
In our opinion, the financial statements referred to above present fairly, in
all material respects, the consolidated financial position of Graver Tank & Mfg.
Co., Inc. and subsidiaries at December 31, 1994 and 1993, and the consolidated
results of their operations and their cash flows for the years then ended in
conformity with generally accepted accounting principles.
/s/ ERNST & YOUNG LLP
Charleston, West Virginia
March 24, 1995
F - 15
<PAGE> 21
Graver Tank & Mfg. Co., Inc. and Subsidiaries
Consolidated Balance Sheets
<TABLE>
<CAPTION>
DECEMBER 31
1994 1993
-------------------------
<S> <C> <C>
ASSETS
Current assets:
Cash $ 907,087 $ 1,157,475
Short-term investment 76,265 75,000
Accounts receivable, less allowance for doubtful accounts of
$20,000 in 1994 and 1993 11,996,650 8,026,611
Retainages receivable 636,762 2,156,595
Note receivable from shareholder--Note 8 402,889 280,871
Other receivables 257,963 2,241
Costs and estimated earnings in excess of billings on
uncompleted contracts--Note 2 1,483,706 2,446,865
Inventories 136,599 195,439
Refundable federal income taxes -- 520,040
Deferred tax assets--Note 7 100,387 --
Other 53,737 51,556
-------------------------
Total current assets 16,052,045 14,912,693
Property and equipment--Note 4:
Land 136,000 136,000
Building and building improvements 1,367,863 1,357,637
Construction equipment 2,517,911 2,943,729
Machinery and equipment 1,712,144 1,838,571
Furniture and fixtures 409,922 372,786
-------------------------
6,143,840 6,648,723
Less accumulated depreciation 4,108,204 4,218,161
-------------------------
2,035,636 2,430,562
Other assets 66,697 288,657
-------------------------
$18,154,378 $17,631,912
=========================
</TABLE>
F - 16
<PAGE> 22
<TABLE>
<CAPTION>
DECEMBER 31
1994 1993
----------------------------
<S> <C> <C>
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Trade accounts payable $ 5,763,990 $ 5,239,719
Payables to affiliates -- 202,391
Billings in excess of costs and estimated earnings on
uncompleted contracts--Note 2 1,867,957 1,476,127
Accrued taxes 349,302 99,219
Accrued insurance 1,088,078 1,310,169
Other liabilities 752,211 889,906
Deferred tax liabilities--Note 7 -- 106,609
Note payable, revolving line of credit--Note 5 2,000,000 1,500,000
Current maturities of long-term debt--Note 4 489,928 552,577
---------------------------
Total current liabilities 12,311,466 11,376,717
Long-term debt--Note 4 1,612,510 2,075,474
Deferred tax liabilities--Note 7 136,603 177,388
Stockholders' equity:
Common stock, $1 par value--1,000,000 shares authorized,
901,488 shares issued and outstanding, including shares in
treasury of 20,400 901,488 901,488
Additional paid-in capital 3,740,207 3,740,207
Accumulated deficit (486,696) (578,162)
Treasury stock (61,200) (61,200)
---------------------------
4,093,799 4,002,333
---------------------------
$18,154,378 $17,631,912
===========================
</TABLE>
See notes to consolidated financial statements.
F - 17
<PAGE> 23
Graver Tank & Mfg. Co., Inc. and Subsidiaries
Consolidated Statements of Operations
<TABLE>
<CAPTION>
YEAR ENDED DECEMBER 31
1994 1993
-------------------------
<S> <C> <C>
Revenues:
Construction $35,355,604 $47,319,617
Other 933,588 735,271
-------------------------
36,289,192 48,054,888
Costs and expenses:
Direct costs and expenses 31,968,496 44,229,117
General and administrative expenses 3,422,548 3,771,058
Depreciation 486,532 465,987
Interest 270,900 238,383
-------------------------
36,148,476 48,704,545
-------------------------
Income before income taxes 140,716 (649,657)
Income tax expense (benefit)--Note 7 49,250 (158,000)
-------------------------
Net income (loss) $ 91,466 $ (491,657)
=========================
</TABLE>
See notes to consolidated financial statements.
F - 18
<PAGE> 24
Graver Tank & Mfg. Co., Inc. and Subsidiaries
Consolidated Statements of Stockholders' Equity
<TABLE>
<CAPTION>
ADDITIONAL
COMMON PAID-IN ACCUMULATED TREASURY
STOCK CAPITAL DEFICIT STOCK TOTAL
------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
Balance at January 1, 1993 $901,488 $3,740,207 $ (86,505) $ -- $4,555,190
Net loss for the year ended
December 31, 1993 -- -- (491,657) -- (491,657)
Purchase of treasury stock -- -- -- (61,200) (61,200)
------------------------------------------------------------
Balance at December 31, 1993 901,488 3,740,207 (578,162) (61,200) 4,002,333
Net income for the year ended
December 31, 1994 -- -- 91,466 -- 91,466
------------------------------------------------------------
Balance at December 31, 1994 $901,488 $3,740,207 $(486,696) $(61,200) $4,093,799
============================================================
</TABLE>
See notes to consolidated financial statements.
F - 19
<PAGE> 25
Graver Tank & Mfg. Co., Inc. and Subsidiaries
Consolidated Statements of Cash Flows
<TABLE>
<CAPTION>
YEAR ENDED DECEMBER 31
1994 1993
--------------------------
<S> <C> <C>
OPERATING ACTIVITIES
Net income (loss) $ 91,466 $ (491,657)
Adjustments to reconcile net income to net cash provided by
operating activities:
Depreciation 486,532 465,987
Amortization of small tools 157,026 142,126
Amortization of loan fees 20,012 20,012
Gain on sale of equipment (324,360)
Deferred income tax (benefit) expense (247,781) 313,439
Changes in operating assets and liabilities:
Increase in accounts receivable (3,970,039) (1,900,444)
Decrease (increase) in retainages receivable 1,519,833 (307,861)
Increase in note receivable from shareholder (122,018) (97,177)
Decrease (increase) in other receivables 264,318 (502,229)
Decrease in receivables from affiliates -- 834,390
Decrease (increase) in costs and estimated earnings in
excess of billings on uncompleted contracts 963,159 (136,345)
Decrease (increase) in inventories 58,840 (8,997)
Decrease (increase) in other current assets 199,767 (237,957)
Increase in accounts payable 524,271 1,457,001
Increase in billings in excess of costs and estimated
earnings on uncompleted contracts 391,830 300,297
Decrease in payables to affiliates (202,391) (658,518)
Increase (decrease) in accrued taxes 250,083 (118,835)
(Decrease) increase in accrued insurance (222,091) 530,372
(Decrease) increase in other liabilities (137,695) 178,701
--------------------------
Net cash used in operating activities (299,238) (217,695)
INVESTING ACTIVITIES
Purchases of equipment (560,572) (932,509)
Proceeds from sale of equipment 636,300 355,000
Purchases of short-term investments (1,265) (25,000)
--------------------------
Net cash provided by (used in) investing activities 74,463 (602,509)
FINANCING ACTIVITIES
Proceeds from revolving line of credit and long-term debt 4,800,000 4,150,000
Principal payments on revolving line of credit and long-term
debt (4,825,613) (3,732,889)
--------------------------
Net cash (used in) provided by financing activities (25,613) 417,111
--------------------------
Decrease in cash (250,388) (403,093)
Cash and cash equivalents at beginning of year 1,157,475 1,560,568
--------------------------
Cash and cash equivalents at end of year $ 907,087 $ 1,157,475
==========================
</TABLE>
See notes to consolidated statements.
F - 20
<PAGE> 26
Graver Tank & Mfg. Co., Inc. and Subsidiaries
Notes to Consolidated Financial Statements
December 31, 1994
1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
PRINCIPLES OF CONSOLIDATION
The accompanying consolidated financial statements include the accounts of
Graver Tank & Mfg. Co., Inc. (the Company) and its wholly-owned subsidiaries,
Graver Tank International, Inc., Graver Tank and Vessel, Inc., and Graver Power,
Inc. All significant intercompany accounts and transactions have been eliminated
from the consolidated financial statements.
ACCOUNTING FOR CONTRACTS
Construction contracts undertaken by the Company may be generally classified as
either cost-plus contracts or fixed-price contracts. Revenues from cost-plus
contracts are included in income as costs relating to the contracts are
incurred. The Company accounts for its fixed-price contracts on the
percentage-of-completion method. Under the percentage-of-completion method, the
portion of the contract price related to the contract costs incurred to date as
a percentage of the total estimated contract costs is accrued as income. At the
time a loss on a contract becomes apparent, the entire amount of the estimated
loss is recognized in current operations. Revisions in costs and earnings or
loss estimates are reflected in the accounting period in which the facts causing
the revisions become known.
Costs and estimated earnings in excess of billings on uncompleted contracts are
classified as current assets, and billings in excess of costs and estimated
earnings on uncompleted contracts are classified as current liabilities since
these amounts will generally mature within one year. Included in costs and
estimated earnings in excess of billings on uncompleted contracts at December
31, 1994, are costs of approximately $400,000 which will be reimbursed by an
insurance company. Subsequent to year end, the Company has received
reimbursement for a majority of these costs and has negotiated a settlement for
full reimbursement.
Construction claims (amounts due from customers in excess of contract terms) are
included in revenues when realization is probable and can be reliably estimated.
Claims receivable are included in accounts receivable and/or in costs and
estimated earnings in excess of billings on the consolidated balance sheet.
Total claims receivable approximated $1,220,000 at December 31, 1993. These
claims were collected in 1994.
CASH EQUIVALENTS
For purposes of the statement of cash flows, the Company considers investments
with a maturity of less than three months from the date of purchase as cash
equivalents.
CREDIT CONCENTRATION
The Company primarily performs construction contracts for customers in the
oil/petroleum, petrochemical and utility industries. The Company evaluates the
customer's financial condition before a construction bid is submitted and
generally collateral is not required. Credit losses are provided for in the
financial statements and consistently have been within management's
F - 21
<PAGE> 27
Graver Tank & Mfg. Co., Inc. and Subsidiaries
Notes to Consolidated Financial Statements (continued)
expectation. As of December 31, 1994, accounts receivable and retainages
receivable from these industries were as follows:
<TABLE>
<CAPTION>
ACCOUNTS RETAINAGES
RECEIVABLE RECEIVABLE
-----------------------
<S> <C> <C>
Oil/petroleum $ 1,269,018 $175,921
Petrochemical 3,558,219 174,937
Utility 7,169,413 285,904
-----------------------
$11,996,650 $636,762
=======================
</TABLE>
At December 31, 1994 and 1993, accounts receivable included $1,161,497 and
$188,720, respectively, related to balances billed but not yet paid by customers
under retainage provisions.
The Company has subsequently collected approximately 75% of the accounts
receivable outstanding at December 31, 1994.
INVENTORIES
Inventories, which consist of raw materials to be used on future contracts and
construction supplies, are valued at the lower of cost or market (first-in,
first-out method).
PROPERTY AND EQUIPMENT
Property and equipment is stated at cost. Depreciation is provided using the
straight-line method over the estimated useful lives of the assets. Small tools
are capitalized and included in construction equipment net of amortization.
Small tools are amortized using the straight-line method over a period of four
years which approximates their average estimated useful life. Small tools
amortization is included in direct costs and expenses in the statements of
operations.
INSURANCE COSTS
The Company is covered by a retrospective insurance plan for property damage and
property liability in all states and workers' compensation in all states except
West Virginia and Ohio, wherein the Company participates in the respective State
Workers' Compensation Programs. Annual insurance costs are initially based on
the Company's loss experience which is actuarially determined by the
insurance company. At the end of each plan year, the insurance company
compares incurred loss experience to the original estimated loss experience
and any difference, subject to minimum and maximum limitations, is recorded
in the year of determination.
INCOME TAXES
The liability method is used in accounting for income taxes. Under this method,
deferred tax assets and liabilities are determined based on differences between
financial reporting and tax bases of assets and liabilities and are measured
using enacted tax rates and laws that will be in effect when the differences are
expected to reverse.
F - 22
<PAGE> 28
Graver Tank & Mfg. Co., Inc. and Subsidiaries
Notes to Consolidated Financial Statements (continued)
RECLASSIFICATIONS
Certain amounts in the 1993 financial statements have been reclassified to
conform to their 1994 presentation. Such reclassifications had no impact on the
results of operations or stockholders' equity.
2. COSTS AND ESTIMATED EARNINGS ON UNCOMPLETED CONTRACTS
The following summarizes construction contracts in progress at December 31:
<TABLE>
<CAPTION>
1994 1993
--------------------------
<S> <C> <C>
Costs incurred on uncompleted contracts $57,946,506 $74,844,284
Estimated (losses) earnings (1,378,535) 1,796,551
--------------------------
56,567,971 76,640,835
Less billings to date 56,952,222 75,670,097
--------------------------
$ (384,251) $ 970,738
==========================
This amount is included in the accompanying
balance sheet under the following captions:
Costs and estimated earnings in excess of
billings on uncompleted contracts $ 1,483,706 $ 2,446,865
Billings in excess of costs and estimated
earnings on uncompleted contracts 1,867,957 1,476,127
--------------------------
$ (384,251) $ 970,738
==========================
</TABLE>
3. EMPLOYEE BENEFIT PLANS
The Company has a defined contribution profit-sharing plan (401(k) plan)
covering all full-time nonunion employees. Employees are permitted to make
voluntary contributions up to certain limits as specified in the Plan Agreement.
Matching contributions are made by the Company based on predefined amounts per
employee as described in the Plan Agreement. In addition, the Company may elect
to make a discretionary profit-sharing contribution to the Plan. For the years
ended December 31, 1994 and 1993, the amount of Company contributions charged
against operations approximated $62,000 and $63,000.
Under labor agreements with various craft unions, the Company made contributions
to union pension funds of approximately $436,000 and $562,000 for the years
ended December 31, 1994 and 1993. Such contributions are based on various rates
per labor hour as specified in the craft agreements. Benefits are paid to
eligible employees from the union pension funds.
4. LONG-TERM DEBT
The Company has a term loan outstanding with a balance of $2,041,237 and
$2,566,851 as of December 31, 1994 and 1993. This loan bears interest at prime
plus 1%, which was 10% at December 31, 1994, and is due in monthly installments
of $56,000 including interest, through
F - 23
<PAGE> 29
Graver Tank & Mfg. Co., Inc. and Subsidiaries
Notes to Consolidated Financial Statements (continued)
May 15, 1998. The loan is collateralized by all of the Company's accounts
receivable, inventory, real estate, and equipment and is personally guaranteed
by the Company's chief executive officer.
The Company also has an unsecured notes payable in the amount of $61,200 as of
December 31, 1994 and 1993. This note bears interest at 7% and is due on
March 1, 2000.
The term loan agreement contains certain restrictive covenants. As of December
31, 1994, certain noncompliances with these covenants existed and have been
waived by the lender through December 31, 1995.
Maturities of long-term debt are as follows:
1995 $489,928
1996 541,229
1997 597,903
1998 412,177
Interest paid during the years ended December 31, 1994 and 1993, approximated
$240,000 and $223,000.
5. NOTE PAYABLE
The Company has available approximately $1,000,000 on a $3,000,000 revolving
line of credit which bears interest at prime plus 1%, which was 10% at
December 31, 1994. The line of credit is secured by the Company's accounts
receivable, inventory, real estate, and equipment and is personally guaranteed
by the Company's chief executive officer and is payable on demand.
6. LEASE COMMITMENTS
The Company rents various types of equipment as needed on construction projects
under short-term rental agreements. Equipment rentals for the years ended
December 31, 1994 and 1993, approximated $658,000 and $796,000 and are
primarily included in direct costs and expenses in the statements of operations.
7. INCOME TAXES
The components of the income tax benefit are:
<TABLE>
<CAPTION>
1994 1993
------------------------
<S> <C> <C>
Federal:
Current $ 297,031 $(471,439)
Deferred (247,781) 313,439
------------------------
$ 49,250 $(158,000)
========================
</TABLE>
Tax-exempt interest, travel and entertainment expenses not deductible for tax
purposes, and graduated tax rates are the primary reasons for the difference
between the federal statutory and effective tax rates.
F - 24
<PAGE> 30
Graver Tank & Mfg. Co., Inc. and Subsidiaries
Notes to Consolidated Financial Statements (continued)
Deferred income taxes reflect the net tax effects of temporary differences
between the carrying amounts of assets and liabilities for financial
reporting purposes and the amounts used for income tax purposes. The components
of the Company's deferred tax liabilities and assets as of December 31, 1994 and
1993, are as follows:
<TABLE>
<CAPTION>
1994 1993
---------------------
<S> <C> <C>
Deferred tax assets:
Accrued fringe benefits $ 67,302 $ 68,209
Accrued losses on contracts 17,811 104,628
Allowance for doubtful accounts 6,774 6,774
Accrued medical expenses 8,500 20,482
Tax credit carryforwards -- 107,970
---------------------
Total deferred tax assets 100,387 308,063
Deferred tax liabilities:
Claims receivable -- 414,672
Tax over book depreciation 40,787 66,352
Tax over book amortization of small tools 95,816 111,036
---------------------
Total deferred tax liabilities 136,603 592,060
---------------------
Net deferred tax liabilities $(36,216) $(283,997)
=====================
</TABLE>
8. RELATED PARTY TRANSACTIONS
The Company has notes receivable from a shareholder which bear interest at prime
plus 1% and are payable on demand.
F - 25
<PAGE> 31
UNAUDITED PRO FORMA FINANCIAL INFORMATION
On March 28, 1996, Astrotech International Corporation ("Astrotech") acquired
all of the outstanding common stock of Graver Tank & Mfg. Co., Inc. ("Graver")
pursuant to the Stock Purchase Agreement dated as of March 7, 1996 by and among
Timothy J. McDavid (the "Seller), Astrotech and Graver Holding Company (the
parent company of Graver). The acquisition is being accounted for using the
purchase method of accounting. The results of operations for the periods since
the date of acquisition are included in Astrotech's historical consolidated
financial statements. The purchase accounting adjustments presented in the
following pro forma financial statements are estimates based on conditions
existing at the assumed dates of acquisition. The following pro forma financial
statements should be read in conjunction with the historical financial
statements of Graver in this Form 8-K/A-1 and the historical financial
statements and other financial information of Astrotech appearing in its 1995
Annual Report on Form 10-K and its Quarterly Report on Form 10-Q for the quarter
ended December 31, 1995.
UNAUDITED PRO FORMA CONDENSED CONSOLIDATED BALANCE SHEET
The following Unaudited Pro Forma Condensed Consolidated Balance Sheet of
Astrotech at December 31, 1995 has been adjusted to give effect to the purchase
of Graver as though such purchase had occurred on December 31, 1995.
F - 26
<PAGE> 32
ASTROTECH INTERNATIONAL CORPORATION AND SUBSIDIARIES
UNAUDITED PRO FORMA CONDENSED CONSOLIDATED BALANCE SHEET
DECEMBER 31, 1995
(Dollars in Thousands, Except Share Data)
<TABLE>
<CAPTION>
Astrotech Graver
December 31, December 31, Pro Forma Pro Forma
1995 1995 Adjustments Consolidated
------------ ------------ ----------- ------------
<S> <C> <C> <C> <C>
ASSETS
CURRENT ASSETS
Cash and cash equivalents $ -- $ 1,352 $ 561 c $ 1,352
(2,900)a
(1,552)e
3,891 e
Trade accounts receivable 18,950 3,721 22,671
Inventories 4,299 140 4,439
Costs and estimated earnings in excess
of billings on uncompleted contracts 4,589 560 5,149
Deferred income taxes 1,687 -- 1,057 b 2,744
Prepaid expenses and other current assets 824 58 882
-------- ------- ------- --------
TOTAL CURRENT ASSETS 30,349 5,831 1,057 37,237
PROPERTY, PLANT, AND EQUIPMENT, NET 18,543 1,972 2,222 b 22,737
OTHER ASSETS
Costs in excess of net assets acquired, net of accumulated
amortization of $3,884 15,508 -- 574 b 16,082
Other assets 1,345 90 1,435
-------- ------- ------- --------
TOTAL ASSETS 65,745 7,893 3,853 77,491
======== ======= ======= ========
Checks not yet presented for payment, net 1,132 -- 1,132
Accounts payable 3,628 1,622 5,250
Accrued compensation and benefits 2,338 -- 2,338
Accrued expenses and other current liabilities 5,707 1,670 125 b 7,502
Billings in excess of costs and estimated
earnings on uncompleted contracts 1,874 3,430 5,304
Current portion of long-term debt to related parties 160 -- 160
Current portion of long-term debt 2,358 547 (547)e 2,858
500 e
-------- ------- ------- --------
TOTAL CURRENT LIABILITIES 17,197 7,269 78 24,544
LONG-TERM DEBT TO RELATED PARTIES 265 -- 265
LONG-TERM DEBT 12,451 1,066 (1,005)e 15,903
2,500 e
891 e
DEFERRED INCOME TAXES 1,941 -- 947 b 2,888
COMMITMENTS AND CONTINGENCIES
STOCKHOLDERS' EQUITY
Common Stock, $.01 par value, authorized 20,000,000
shares; issued and outstanding 9,839,206 shares 98 454 (454)d 98
Additional capital 59,717 3,070 (3,070)d 59,717
Retained earnings (deficit) (25,924) (3,344) 3,344 d (25,924)
Treasury stock -- (61) 61 d --
Receivable from shareholder -- (561) 561 c --
-------- ------- ------- --------
33,891 (442) 442 33,891
-------- ------- ------- --------
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY $ 65,745 $ 7,893 $ 3,853 $ 77,491
======== ======= ======= ========
</TABLE>
The accompanying notes are an integral part of these statements
F-27
<PAGE> 33
NOTES TO UNAUDITED PRO FORMA CONDENSED CONSOLIDATED BALANCE SHEET
(Dollars in Thousands, Except Share Data)
a. The purchase price of Graver consists of the following:
<TABLE>
<CAPTION>
<S> <C>
Cash $2,750
Direct expenses of the purchase 150
------
$2,900
======
</TABLE>
The direct expenses of the purchase consist primarily of legal and
accounting fees.
The seller is entitled to receive additional contingent cash proceeds of
up to $1,250,000 pursuant to the terms of an earn-out arrangement based on
future profits (as defined) of Graver during each of the three fiscal
years ending September 30, 1998. Contingent purchase consideration accrued
or paid increases costs in excess of net assets acquired and is amortized
over the remaining life of the intangible asset.
b. For purposes of determining the pro forma effect of the acquisition on
Astrotech's consolidated balance sheet, the fair value of Graver's net
assets has been estimated in accordance with Accounting Principles Board
Opinion No. 16:
<TABLE>
<CAPTION>
<S> <C>
Net equity (deficit) of Graver at December 31, 1995 $ (442)
Purchase accounting adjustments:
Adjustments of fixed assets to estimated fair value 2,222
Adjustments of current and deferred income taxes, net 110
Accrual of acquisition-related liabilities (125)
Repayment of affiliate receivable described in (c) below 561
Costs in excess of fair value of net assets acquired 574
------
Astrotech's investment in Graver $2,900
======
</TABLE>
c. The Seller eliminated an affiliate receivable, by cash payment, at the
time of the acquisition in accordance with the Agreement. This
transaction is reflected on a pro forma basis.
d. Graver's stockholders' equity, exclusive of the affiliate receivable, as
of December 31, 1995 is eliminated.
e. Proceeds of a Loan Agreement with a bank and cash on hand at Graver were
used to finance the purchase price and repay existing bank obligations of
$1,552 (current portion, $547). Components of the loan on a pro forma
basis are as follows:
<TABLE>
<CAPTION>
<S> <C>
Revolving note payable $ 891
Long-term debt (current portion, $500) 3,000
------
$3,891
======
</TABLE>
F-28
<PAGE> 34
UNAUDITED PRO FORMA CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
The following Unaudited Pro Forma Condensed Consolidated Statements of
Operations of Astrotech for the year ended September 30, 1995 and for the three
months ended December 31, 1995 present the separate historical results of
Astrotech and Graver and consolidated pro forma results as though such purchase
had occurred on October 1, 1994. The Unaudited Pro Forma Condensed Consolidated
Statements of Operations do not purport to be indicative of the results which
actually would have occurred if the acquisition had been consummated on October
1, 1994 or which may occur in the future.
F-29
<PAGE> 35
ASTROTECH INTERNATIONAL CORPORATION AND SUBSIDIARIES
UNAUDITED PRO FORMA CONDENSED CONSOLIDATED STATEMENT OF OPERATIONS
THREE MONTHS ENDED DECEMBER 31, 1995
(Dollars in Thousands, Except Share Data)
<TABLE>
<CAPTION>
Astrotech Graver
Three Months Three Months
Ended Ended
December December Pro Forma Pro Forma
31, 1995 31, 1995 Adjustments Consolidated
------------ ------------ ----------- ------------
<S> <C> <C> <C> <C>
Net sales and revenues $25,910 $4,863 $30,773
Cost of services and products sold 19,095 4,777 23,872
Depreciation and amortization 872 107 (39)a 940
Selling, general and administrative expenses 4,269 924 5,193
------- ------ --- -------
OPERATING PROFIT (LOSS) 1,674 (945) 39 768
Interest and other income 35 257 292
Interest expense (275) (41) (31)b (347)
------- ------ --- -------
INCOME (LOSS) BEFORE INCOME TAXES 1,434 (729) 8 713
Income tax (expense) benefit, net (568) (33) 319 c (282)
------- ------ --- -------
NET INCOME (LOSS) 866 (762) 327 431
======= ====== === =======
Net income per common share $0.09 $0.04
Weighted average shares outstanding 9,990,383 9,990,383
</TABLE>
The accompanying notes are an integral part of these statements.
F-30
<PAGE> 36
ASTROTECH INTERNATIONAL CORPORATION AND SUBSIDIARIES
UNAUDITED PRO FORMA CONDENSED CONSOLIDATED STATEMENT OF OPERATIONS
YEAR ENDED SEPTEMBER 30, 1995
(Dollars in Thousands, Except Share Data)
<TABLE>
<CAPTION>
Astrotech Graver
Year Year
Ended Ended
September December Pro Forma Pro Forma
30, 1995 31, 1995 Adjustments Consolidated
--------- -------- ----------- ------------
<S> <C> <C> <C> <C>
Net sales and revenues $100,203 $30,126 $130,329
Cost of services and products sold 73,651 29,001 102,652
Depreciation and amortization 3,204 427 (156)a 3,475
Selling, general and administrative expenses 17,995 3,600 21,595
-------- ------- ------ --------
OPERATING PROFIT (LOSS) 5,353 (2,902) 156 2,607
Interest and other income 481 390 871
Interest expense (1,333) (221) (122)b (1,676)
-------- ------- ------ --------
INCOME (LOSS) BEFORE INCOME TAXES 4,501 (2,733) 34 1,802
Income tax (expense) benefit, net (1,770) (125) 1,052 c (843)
-------- ------- ------ --------
NET INCOME (LOSS) 2,731 (2,858) 1,086 959
======== ======= ===== ========
Net income per common share $0.28 $0.10
Weighted average shares outstanding 9,886,296 9,886,296
</TABLE>
The accompanying notes are an integral part of these statements.
F-31
<PAGE> 37
NOTES TO PRO FORMA CONDENSED STATEMENTS OF OPERATIONS
(Dollars in Thousands)
Adjustments to the Pro Forma Condensed Statement of Operations for the twelve
months ended September 30, 1995 and the three-month period ended December 31,
1995 in connection with the acquisition of Graver are presented below:
<TABLE>
<CAPTION>
Increase (decrease) income
09/30/95 12/31/95
-------- --------
<S> <C> <C> <C>
a. As a result of the effect of recording the fixed assets at fair market value and
depreciating them on a straight line basis over their useful lives, depreciation
expense is decreased on a pro forma basis 156 39
b. Interest expense on $1,440 of incremental debt incurred to fund the purchase price
bearing a 8.5% interest rate (122) (31)
c. Represents the pro forma income tax effect of consolidating the companies 1,052 319
</TABLE>
F-32
<PAGE> 1
EXHIBIT 24 (i)
CONSENT OF INDEPENDENT ACCOUNTANTS
We consent to the incorporation by reference in the registration statements of
Astrotech International Corporation on Form S-8 (Nos. 33-3360; 33-29754;
33-41687; 33-68010; 33-85106; 33-92314; 33-92406 and 33-99290), and in each
related prospectus, of our report dated February 21, 1996, except for Note 7 as
to which the date is March 28, 1996, on our audit of the consolidated financial
statements of Graver Tank & Mfg. Co., Inc. and subsidiaries as of and for the
year ended December 31, 1995, which report is included in this report on Form
8-K/A-1.
/s/ COOPERS & LYBRAND, L.L.P.
600 Grant Street
Pittsburgh, Pennsylvania
June 7, 1996
<PAGE> 1
EXHIBIT 24 (ii)
CONSENT OF INDEPENDENT AUDITORS
We consent to the inclusion in this Current Report on Form 8-K/A-1 (Amendment
No. 1) of Astrotech International Corporation our report dated March 24, 1995,
with respect to the consolidated financial statements of Graver Tank & Mfg.
Co., Inc. and Subsidiaries for the year ended December 31, 1994.
We also consent to the incorporation by reference in the Registration Statement
of Astrotech International Corporation on Form S-8 (Nos. 33-360, 33-29754,
33-41687, 33-68010, 33-85106, 33-92314, 33-92406 and 33-99290) of our report
dated March 24, 1995, with respect to the consolidated financial statements of
Graver Tank & Mfg. Co., Inc. and Subsidiaries included in this Current Report
on Form 8-K/A-1 dated March 28, 1996.
/s/ Ernst & Young LLP
Charleston, West Virginia
June 6, 1996
