SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of
the Securities Exchange Act of 1934
Date of Report (Date of earliest event reported) October 22, 1997
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Scotsman Industries, Inc.
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(Exact name of registrant as specified in its charter)
Delaware
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(State or other jurisdiction of incorporation)
0-10182 36-3635892
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(Commission File Number) (IRS Employer Identification No.)
820 Forest Edge Drive, Vernon Hills, Illinois 60061-3112
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(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code (847) 215-4600
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775 Corporate Woods Parkway, Vernon Hills, Illinois 60061-3112
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(Former name or former address, if changed since last report)
Exhibit Index is located on page 4.
<PAGE> 2
Item 5. Other Events
The information contained in the registrant's October 22,
1997 press release, reporting its results for the third quarter ended
September 28, 1997 and the filing of a registration statement for a
proposed offering of $100 million of 10-year notes and a proposed
secondary offering of approximately 1.6 million shares of common stock
of the registrant held by affiliates of Onex Corporation, a copy of
which is filed as Exhibit 99 to this report, is incorporated by
reference herein.
Item 7. Financial Statements and Exhibits
(c) Exhibits:
Exhibit 99 October 22, 1997 Press Release
<PAGE> 3
SIGNATURE
Pursuant to the requirements of the Securities Exchange Act
of 1934, the registrant has duly caused this report to be signed on
its behalf by the undersigned thereunto duly authorized.
Scotsman Industries, Inc.
Registrant
Dated: November 4, 1997 By: /s/ Donald D. Holmes
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Donald D. Holmes
Vice President - Finance
<PAGE> 4
EXHIBIT INDEX
Number Description Page Number
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Exhibit 99 October 22, 1997 Press Release 5
EXHIBIT 99
820 Forest Edge Drive
Vernon Hills, Illinois 60061-3112
(847) 215-4500
Fax (847) 634-8823
SCOTSMAN
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INDUSTRIES
Contact: Don Holmes, CFO
847-215-4600
SCOTSMAN INDUSTRIES REPORTS RECORD THIRD QUARTER RESULTS;
COMPANY ALSO ANNOUNCES SEC FILING
Third quarter net income of $6.0 million, or $0.56 per share, up from
year-ago net income of $5.8 million or $0.54 per share.
Net sales up 72 percent to $159.7 million (including Kysor sales of
$65.0 million), from year-ago sales of $92.8 million.
Scotsman today filed an SEC registration for a proposed offering of
$100 million of 10-year notes and a proposed secondary offering of 1.6
million shares of common stock.
Vernon Hills, IL, October 22, 1997 -- Scotsman Industries, Inc.
(NYSE: SCT) a leading international manufacturer of commercial
refrigeration products, today reported net income of $6.0 million for
the third quarter ended September 28, 1997, or $0.56 per share -- up
from year-ago net income of $5.8 million, or $0.54 per share. The
Company also reported third quarter net sales of $159.7 million, up 72
percent from $92.8 million reported in the comparable 1996 period.
<PAGE> 6
For the nine months, net income before extraordinary charges
totaled $17.0 million, or $1.57 per share, compared to year ago net
income of $16.5 million, or $1.54 per share. Sales for the nine
months were $431.5 million, up 53 percent from $282.7 million in the
same period of 1996.
"While lower than originally anticipated, sales and earnings
reached a record third quarter level despite continuing softness in
some markets. We see signs that our European ice machine markets are
stabilizing, and we are beginning to realize cost improvements in our
food preparation and storage equipment operations, reinforcing our
optimism for future earnings growth," said Richard C. Osborne,
Chairman, President and Chief Executive Officer of Scotsman.
Osborne continued: "Kysor's results for the quarter contributed
significantly to the company's overall results. Kysor is accretive to
Scotsman's earnings per share year-to-date and is expected to be
accretive for the full year. The Kysor revenues of $65.0 million
represented a 70 percent addition to the company's total revenues for
the quarter. Kysor's backlog of supermarket orders remains at record
levels with good growth potential for 1998, and we are pleased with
the current performance of the operation as well as its long term
prospects."
"Benefiting from an expanding customer base, revenues from
Delfield's food preparation and storage equipment operations were up
11 percent over the same period last year. We've begun to see early
signs of improving productivity at Delfield that should result in
increased operating margins in the future. Beverage equipment sales
<PAGE> 7
were up 4 percent for the quarter on strong sales from our U.K.-based
operations and increased penetration of the European markets. Ice
machines were flat at constant exchange rates compared to the same
quarter last year and were down 4 percent in U.S. dollars due to
translation of Italian units' sales at weaker lire rates. We have
reported previously that high European distributor inventories had
depressed Scotsman's 1997 first half ice machine sales. The improving
year over year comparison for the third quarter indicates that these
inventories are returning to more normal levels, giving us optimism
for improvement in sales in the coming year," Osborne concluded.
With long-term debt of $356 million, the company's balance sheet
leverage for the third quarter is in line with the Company's
expectations.
Scotsman today filed a registration statement with the Securities
and Exchange Commission for a proposed offering of $100 million of 10-
year notes. The proceeds from this offering will be used to repay
outstanding bank debt. At the same time, the existing bank credit
facility is being renegotiated to gain additional flexibility. In
conjunction with the registration, the Company will also register
approximately 1.6 million shares of common stock for a proposed
secondary offering of shares held by affiliates of Onex Corporation,
which has exercised its registration rights under a prior agreement
with Scotsman. The proceeds of this secondary offering will be for
the benefit of such Onex affiliates and other shareholders who are
parties to the registration rights agreement.
Scotsman Industries, Inc. is a leading international manufacturer
of a diversified line of commercial refrigeration products - ice
<PAGE> 8
machines, refrigerated display cases, food preparation and storage
equipment, walk-in coolers and freezers and beverage systems. The
Company markets primarily to commercial customers in restaurant,
supermarket, lodging, healthcare and convenience store industries.
Scotsman's products are sold in more than 100 countries through
multiple distribution channels.
This press release contains forward-looking statements that
involve risks and uncertainties that could cause actual results to
differ materially from those projected. Forward-looking statements
are necessarily projections that are subject to change upon the
occurrence of events that may affect the business. The Company also
points out that the Kysor acquisition involves a number of risks that
can cause results to be materially different from expected results.
Factors that could cause actual results to differ from those
anticipated include (i) the strength or weakness of the various
economies in which the Company markets its products, (ii) weather
conditions, (iii) the utilization rate of the Company's facilities,
(iv) labor difficulties, (v) increased prices for raw materials and
purchased components, (vi) scheduling and transportation dislocations,
(vii) delays in development of new products or construction of new
facilities, (viii) product liability or other lawsuits, warranty
claims or return of goods, (ix) foreign currency fluctuations, (x)
changes in buying patterns of certain large customers as a result of
internal cost-control measures adopted by those customers and (xi)
changes in environmental, health, safety or refrigerant regulations or
standards. Your attention is directed to the Cautionary Statements
included as Exhibit 99 to the Company's most recent Form 10-K filed
with the Securities and Exchange Commission for a more detailed
discussion of the foregoing and other factors.
# # # #
A registration statement relating to Notes and the Common Stock
has been filed with the Securities and Exchange Commission but has not
yet become effective. The Notes and the Common Stock may not be sold
nor may offers to buy be accepted prior to the time the registration
statement becomes effective. This release shall not constitute an
offer to sell or the solicitation of an offer to buy nor shall there
be any sale of the Notes and the Common Stock in any state in which
such offer, solicitation or sale would be unlawful prior to
registration or qualification under the securities laws of any such
state.
<PAGE> 9
<TABLE>
<CAPTION>
Scotsman Industries, Inc.
Condensed Statement of Income (Unaudited)
(dollars in thousands, except per-share data)
For the three months ended
----------------------------------------------------------
%
Sept. 28, % of Sept. 29, % of Increase
1997 Sales 1996 Sales (Decrease)
--------- ----- -------- ----- ----------
<S> <C> <C> <C> <C> <C>
Net sales $159,675 $ 92,764 72%
Cost of sales 119,527 66,558 80%
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Gross profit 40,148 25% 26,206 28% 53%
Selling &
administrative
expenses 22,346 14,195 57%
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Income from
operations 17,802 11% 12,011 13% 48%
Interest
expense, net 6,426 1,322 386%
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Income before
income taxes 11,376 7% 10,689 12% 6%
Income taxes 5,343 4,906 9%
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Net income 6,033 4% 5,783 6% 4%
Preferred stock
dividends - 251 (100)%
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Net income
available to
common
shareholders $ 6,033 4% $ 5,532 6% 9%
======== ========
Primary
Net income per
common share(i) $ 0.56 $ 0.58 (3)%
======== ========
Fully diluted
Net income per
common share(ii) $ 0.56 $ 0.54 4%
======== ========
</TABLE>
<PAGE> 10
(i) PRIMARY : Primary earnings per common share are computed by
dividing net income available to common shareholders by the
weighted average number of common shares and common stock
equivalents outstanding during each period: 10,813,359 and
9,474,377 for the three months ended September 28, 1997, and
September 29, 1996, respectively. The computation includes the
dilutive impact of common stock options outstanding.
(ii) FULLY DILUTED: The calculation of fully-diluted net income per
share is based on net income before preferred stock dividends.
The number of shares assumes the conversion of the Company's
outstanding convertible preferred stock from the date of issue.
The total number of shares used in the fully-diluted calculation
for the three months ended September 28, 1997, and September 29,
1996, were 10,817,713 and 10,730,902, respectively.
<PAGE> 11
<TABLE>
<CAPTION>
Scotsman Industries, Inc.
Condensed Statement of Income (Unaudited)
(dollars in thousands, except per-share data)
For the nine months ended
-----------------------------------------------------------
%
Sept. 28, % of Sept. 29, % of Increase
1997 Sales 1996 Sales (Decrease)
--------- ----- --------- ----- ----------
<S> <C> <C> <C> <C> <C>
Net sales $431,529 $282,720 53%
Cost of sales 320,284 202,250 58%
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Gross profit 111,245 26% 80,470 28% 38%
Selling &
administrative
expenses 63,449 45,072 41%
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Income from
operations 47,796 11% 35,398 13% 35%
Interest
expense, net 15,207 4,159 266%
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Income before
income taxes 32,589 8% 31,239 11% 4%
Income taxes 15,605 14,772 6%
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Income before
extraordinary
loss 16,984 4% 16,467 6% 3%
Extraordinary
loss (net of
income taxes
of $422) (633) - - -%
-------- --------
Net income 16,351 4% 16,467 6% (1)%
Preferred stock
dividends - 813 (100)%
-------- --------
Net income
available to
common
shareholders $ 16,351 4% $ 15,654 6% 4%
======== ========
</TABLE>
<PAGE> 12
<TABLE>
<CAPTION>
For the nine months ended
--------------------------------------------------
%
Sept. 28, Sept. 29, Increase
1997 1996 (Decrease)
--------- --------- ----------
<S> <C> <C> <C>
Primary net
income per
common
share (i):
Income before
extraordinary
loss $ 1.57 $ 1.68 (7)%
Extraordinary
loss (0.06) - - %
------- -------
Net income
per common
share $ 1.51 $ 1.68 (10)%
======= =======
Fully diluted
net income
per common
share (ii):
Income before
extraordinary
loss $ 1.57 $ 1.54 2%
Extraordinary
loss (0.06) - -%
------- -------
Net income
per common
share $ 1.51 $ 1.54 (2)%
======= =======
</TABLE>
(i) PRIMARY: Primary earnings per common share are computed by
dividing net income available to common shareholders by the
weighted average number of common shares and common stock
equivalents outstanding during each period: 10,803,978 and
9,310,155 for the nine months ended September 28, 1997, and
September 29, 1996, respectively. The computation includes the
dilutive impact of common stock options outstanding.
(ii) FULLY DILUTED: The calculation of fully-diluted net income per
share is based on net income before preferred stock dividends.
The number of shares assumes the conversion of the Company's
outstanding convertible preferred stock from the date of issue.
The total number of shares used in the fully-diluted calculation
for the nine months ended September 28, 1997, and September 29,
1996, were 10,811,621 and 10,726,127, respectively.
