SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 8-K/A
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the
Securities Exchange Act of 1934
Date of report (Date of Earliest Event Reported): August 7, 1998
BE AEROSPACE, INC.
(Exact name of registrant as specified in charter)
DELAWARE 0-18348 06-1209796
(State or other jurisdiction (Commission File Number) (I.R.S. Employer
of incorporation) Identification No.)
1400 Corporate Center Way, Wellington, Florida 33414
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code: (561) 791-5000
Exhibit Index Appears on page 3.
<PAGE>
EXPLANATORY NOTE
This amendment on Form 8-K/A is being filed solely for the purpose of
amending Item 2 and Item 7(b) of the Form 8-K filed on August 24, 1998 (the
"August 8-K"). Amended pages PF-1 to PF-7 are attached hereto. This amendment
does not contain a copy of pages F-1 to F-27 or copies of Exhibits 2.1, 2.2,
23.1 or 99.1 referenced in Items 7(a) and 7(c), respectively, of this Form
8-K/A. These pages and Exhibits were included in the August 8-K and remain
unchanged from those filed along with the August 8-K. The references to the
attached pages F-1 to F-27 in Item 7(a), the Exhibits in Item 7(c) and Exhibit
2.1 in Item 2 of this Form 8-K/A shall be deemed to refer to those pages or
Exhibits as filed in the August 8-K and attached thereto and will remain
unchanged as a result of this amendment.
<PAGE>
Item 2. Acquisition or Disposition of Assets. (Dollars in thousands,
except per share data)
On August 7, 1998, BE Aerospace, Inc., a Delaware corporation (the
"Company"), completed the acquisition (the "Acquisition") of SMR Aerospace, Inc,
an Ohio Corporation, and its subsidiaries and affiliated entities pursuant to an
Acquisition Agreement, dated July 21, 1998 (the "Agreement") among the Company
and the shareholders of SMR (the "Sellers"). A copy of the Agreement is attached
to this report as Exhibit 2.1.
SMR, headquartered in Sharon Center, Ohio, is a leader in providing
design, integration, installation and certification services for commercial
aircraft passenger cabin interiors. SMR provides a broad range of interior
reconfiguration services which allow airlines to change the size of certain
classes of service, modify and upgrade the seating, install telecommunications
or entertainment options, relocate galleys, lavatories and overhead bins, and
install crew rest compartments. SMR is also a supplier of structural design and
integration services including airframe modifications for passenger and
freighter conversions. In addition, SMR provides a variety of niche products and
components that are used to facilitate reconfigurations and conversions.
The Company acquired all of the capital stock of SMR Aerospace, Inc.
and its affiliates, SMR Developers LLC and SMR Associates (together "SMR") for
an aggregate purchase price of approximately $141,500 cash and the assumption of
approximately $25,300 of liabilities, including related acquisition costs and
certain liabilities arising from the acquisition. The Company paid for the
acquisition of SMR by issuing four million shares (the "SMR Shares") of Company
stock (then valued at approximately $30 per share) to the former stockholders of
SMR and paying them $2,000 in cash. The Company also paid $22,000 in cash to the
employee stock ownership plan of a subsidiary of SMR Aerospace to purchase the
minority equity interest in such subsidiary held by the ESOP. The Company agreed
to register for sale with the Securities and Exchange Commission the SMR Shares.
If the net proceeds from the sale of the shares, which included the $2,000 in
cash already paid, was less than $120,000, the Company agreed to pay such
difference to the selling stockholders in cash. Because of the market price for
the Company's common stock and the Company's payment obligation to the selling
stockholders described above, the Company decided to repurchase the SMR Shares
with approximately $118,000 of the proceeds from the sale of 9 1/2% Senior
Subordinated Notes instead of registering them for sale (the $118,000 payment
represents the net proceeds of $120,000 the Company was obligated to pay the
selling stockholders, less the $2,000 in cash the Company already paid them).
<PAGE>
Item 7. Financial Statements and Exhibits
(a) Financial Statements of Business Acquired.
The following historical consolidated and combined financial
statements and notes thereto are of SMR prior to the
consummation of the Acquisition and are attached hereto at
pages F-1 to F-27.
o Independent Auditors Report.
o Balance sheets as of December 31, 1996 and December 31,
1997.
o Statements of income as of December 31, 1996 and
December 31, 1997.
o Statements of cash flow as of December 31, 1996 and
December 31, 1997.
o Notes to the financial statements.
o Condensed balance sheets (unaudited) as of December 31,
1997 and March 31, 1998.
o Condensed statements of income (unaudited) as of March
31, 1997 and March 31, 1998.
o Condensed statements of cash flows (unaudited) as of
March 31, 1997 and March 31, 1998.
o Notes to the condensed financial statements.
(b) Pro Forma Financial Information.
The following unaudited pro forma combined financial
statements and notes thereto are attached hereto at pages PF-1
to PF-7.
o Pro forma combined statements of operations for the year
ended February 28, 1998.
o Notes to pro forma combined statements of operations for
the year ended February 28, 1998.
o Pro forma combined statements of operations for the
three months ended May 30, 1998.
o Notes to the pro forma combined statements of operations
for the three months ended May 30, 1998.
o Pro Forma combined balance sheet as of May 30, 1998.
o Notes to pro forma combined balance sheet as of
May 30, 1998.
<PAGE>
(c) Exhibits.
Exhibit No. Description
2.1* Acquisition Agreement, dated as of July 21, 1998,
among BE Aerospace, Inc., a Delaware Company,
Oscar J. Mifsud, Oscar J. Mifsud Trust -- 1998,
Patrick L. Ryan, Patrick L. Ryan Trust -- 1998,
David B. Smith, and David B. Smith Trust -- 1998.
2.2* Stock Purchase Agreement, dated as of July 21,
1998, between Flight Structures, Inc. Savings and
Retirement Plan and Trust and BE Aerospace, Inc.
23.1* Consent of Zalick, Torok, Kirgesner, Cook & Co.,
dated August 17, 1998.
99.1* Press Release dated August 10, 1998.
- ---------
* Previously filed (with the registrant's Current Report on Form 8-K filed
August 24, 1998) as noted in the Explanatory Note.
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934,
the registrant has duly caused this report to be signed on its behalf by the
undersigned hereunto duly authorized.
BE AEROSPACE, INC.
By:/s/ Thomas P. McCaffrey
-----------------------
Name: Thomas P. McCaffrey
Title: Senior Vice President and Chief Financial
Officer
Date: January 25, 1999
<PAGE>
UNAUDITED PRO FORMA COMBINED FINANCIAL INFORMATION
(Dollars in thousands, except per share data)
The unaudited pro forma combined statements of operations and unaudited
pro forma combined balance sheet give effect to (i) the acquisition by B/E of
SMR, (ii) the acquisitions of PBASCO and AMP (together, the "Other Insignificant
Acquisitions"), (iii) the issuance of the Company's shares in connection with
the acquisition of SMR ("SMR shares") and subsequent sale of $200 million of 9
1/2% Senior Subordinated Notes ("9 1/2% Notes") -- the net proceeds of which
were used to repurchase the $118 million of SMR shares and repay indebtedness
under the Bank Credit Facility, and (iv) the refinancing of B/E's 9 3/4% Notes
(which was completed on March 16, 1998). The pro forma combined statements of
operations for the year ended February 28, 1998 is comprised of the results of
B/E for the year ended February 28, 1998, the results of PBASCO and SMR for the
year ended December 31, 1997 and the results of AMP for the twelve months ended
January 31, 1998. The pro forma combined statements of operations for the three
months ended May 30, 1998 is comprised of the results of B/E for the three
months ended May 30, 1998, the results of PBASCO and AMP for the one month ended
March 31, 1998 and the results of SMR for the three months ended March 31, 1998.
The pro forma combined balance sheet as of May 30, 1998 has been prepared by
combining the consolidated balance sheet of B/E as of May 30, 1998 with the
balance sheet of SMR as of March 31, 1998 (PBASCO and AMP were already included
in the consolidated balance sheet of B/E as of May 30, 1998).
The pro forma combined statements of operations for the year ended
February 28, 1998 and the three months ended May 30, 1998 assume that the
acquisition of SMR, the Other Insignificant Acquisitions, the issuance of the
Company's shares in connection with the acquisition of SMR ("SMR shares") and
subsequent sale of $200 million of 9 1/2% Senior Subordinated Notes ("9 1/2%
Notes") -- the net proceeds of which were used to repurchase the $118 million of
SMR shares and repay indebtedness under the Bank Credit Facility, and the
refinancing of B/E's 9 3/4% Notes occurred on February 23, 1997. The pro forma
combined balance sheet as of May 30, 1998 assumes that the acquisition of SMR
and the sale of the 9 1/2% Notes occurred on May 30, 1998. The pro forma
combined statements of operations and balance sheet do not purport to represent
the results of operations or financial position of the Company had the
transactions and events assumed therein occurred on the dates specified, nor are
they necessarily indicative of the results of operations that may be achieved in
the future. Certain of the pro forma adjustments, for expenses related to the
SMR selling shareholders which will no longer be incurred after the acquisition,
represent estimates of cost savings expected to be realized in connection with
the acquisition of SMR. No assurance can be given as to the amount of costs that
will actually be incurred or cost savings that will actually be realized. The
pro forma adjustments are based on management's preliminary assumptions
regarding purchase accounting adjustments.
The pro forma combined financial information is based upon certain
assumptions and adjustments described in the notes to the pro forma financial
statements. In connection with the Other Insignificant Acquisitions during the
three months ended May 30, 1998, the Company recorded a charge of $32,253 for
in-process research and development and acquisition-related expenses. In
addition, during the second quarter of fiscal 1999, the Company recorded a
charge of $46,902 for in-process research and development and
acquisition-related expenses for the SMR acquisition. The pro forma combined
financial information should be read in conjunction with the B/E historical
financial statements, including notes thereto, which are incorporated herein by
reference.
PF-1
<PAGE>
B/E Aerospace, Inc.
Pro Forma Combined Statements of Operations (Unaudited)
Year Ended February 28, 1998
(Dollars in thousands, except per share data)
<TABLE>
<CAPTION>
--------------------------------------------------------------------------------------------
Other
Insignificant
B/E Acquisitions Adjustments Combined SMR Adjustments Pro Forma
--------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C>
Net sales $ 487,999 $ 79,300 $ -- $ 567,299 $ 72,805 $ -- $ 640,104
Cost of sales 309,094 48,677 -- 357,771 43,914 200(b) 401,885
--------- --------- --------- --------- --------- --------- ---------
Gross profit 178,905 30,623 -- 209,528 28,891 (200) 238,219
Operating expenses:
Selling, general and
administrative 58,622 9,197 (937)(a) 66,882 8,593 (1,251)(f) 74,224
Research, development and
engineering 45,685 3,250 937 (a) 49,872 7,389 -- 57,261
Amortization expense 11,265 649 7,869 (b) 19,783 -- 4,467 (b) 24,250
In-process research and
development and
acquisition-related expenses -- -- 32,253 (c) 32,253 -- 46,902 (g) 79,155
Other expenses 4,664 2,000 -- 6,664 -- -- 6,664
--------- --------- --------- --------- --------- --------- ---------
Total operating expenses 120,236 15,096 40,122 175,454 15,982 50,118 241,554
--------- --------- --------- --------- --------- --------- ---------
Operating earnings (loss) 58,669 15,527 (40,122) 34,074 12,909 (50,318) (3,335)
Interest expense, net 22,765 546 13,082 (d) 36,393 723 15,834 (h) 52,950
--------- --------- --------- --------- --------- --------- ---------
Earnings (loss) before income
taxes and extraordinary item 35,904 14,981 (53,204) (2,319) 12,186 (66,152) (56,285)
Minority interest -- -- -- -- 1,285 (1,285)(i) --
Income taxes 5,386 6,989 (7,885)(e) 4,490 2,500 (3,560)(e) 3,430
--------- --------- --------- --------- --------- --------- ---------
Earnings (loss) before
extraordinary item 30,518 7,992 (45,319) (6,809) 8,401 (61,307) (59,715)
Extraordinary item 8,956 -- -- 8,956 -- -- 8,956
--------- --------- --------- --------- --------- --------- ---------
Net earnings (loss) $ 21,562 $ 7,992 $ (45,319) $ (15,765) $ 8,401 $ (61,307) $ (68,671)
========= ========= ========= ========= ========= ========= =========
Basic earnings (loss) per share:
Earnings before
extraordinary item $ 1.36 $ (2.66)
Extraordinary item (0.40) (0.40)
-------- ---------
Net earnings $ 0.96 $ (3.06)
======== =========
Weighted average common
shares 22,442 22,442
Diluted earnings (loss) per share:
Earnings before
extraordinary item $ 1.30 $ (2.66)
Extraordinary item (0.38) (0.40)
-------- ---------
Net earnings $ 0.92 $ (3.06)
======== =========
Weighted average common
shares 23,430 22,442
</TABLE>
See accompanying notes to Pro Forma Combined Statements of Operations for the
Year Ended February 28, 1998.
PF-2
<PAGE>
B/E Aerospace, Inc.
Notes to Pro Forma Combined Statements of Operations
Year ended February 28, 1998
(a) Reflects adjustments to reclassify certain expenses in a manner consistent
with B/E's presentation, in which B/E classifies certain engineering related
expenses as a component of research and development as compared to general
and administrative expenses.
(b) Reflects adjustments to depreciation and amortization based on the
preliminary purchase price allocation related to the acquired property and
equipment and intangible assets.
(c) During the first three months of fiscal 1999, the Company expensed $32,253
related to in-process research and development and acquisition-related
expenses for the Other Insignificant Acquisitions. These expenses are
reflected in the Pro Forma Combined Statements of Operations for the year
ended February 28, 1998 as the acquisitions are assumed to have occurred on
February 23, 1997.
(d) Represents additional interest expense for the year ended February 28, 1998
that would have been incurred had the Other Insignificant Acquisitions and
refinancing of B/E's 9 3/4% Notes (which was completed on March 16, 1998)
taken place on February 23, 1997.
(e) To adjust income tax expense to reflect a 15% effective tax rate.
(f) Reflects adjustments to eliminate costs attributable to the selling
shareholders of SMR. The selling shareholders will no longer be employed by
B/E. Such costs consist of the following:
Shareholder salaries and benefits $ 711
Shareholder bonuses 540
---------
$ 1,251
=========
(g) During the second quarter of fiscal 1999, the Company expensed $46,902
related to in-process research and development and acquisition-related
expenses for the SMR acquisition. These expenses are reflected in the Pro
Forma Combined Statements of Operations for the year ended February 28, 1998
as the SMR acquisition is assumed to have occurred on February 23, 1997.
(h) Represents additional interest expense for the year ended February 28, 1998
that would have been incurred had the acquisition by B/E of SMR, the sale of
B/E's 9 1/2% Notes in connection with the SMR acquisition and use of net
proceeds to pay-down a portion of the Bank Credit Facility borrowings, and
the refinancing of B/E's 9 3/4% Notes (which was completed on March 16,
1998) occurred on February 23, 1997.
(i) To eliminate minority interest.
PF-3
<PAGE>
B/E Aerospace, Inc.
Pro Forma Combined Statements of Operations (Unaudited)
Three Months Ended May 30, 1998
(Dollars in thousands, except per share data)
<TABLE>
<CAPTION>
-----------------------------------------------------------------------------------------
Other
Insignificant
B/E Acquisitions Adjustments Combined SMR Adjustments Pro Forma
-----------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C>
Net sales $ 139,991 $ 6,875 $ $ 146,866 $ 26,330 $ $ 173,196
- -
Cost of sales 88,111 4,385 - 92,496 16,989 50 (b) 109,535
----------------------------------------------------------------------------------------
Gross profit 51,880 2,490 - 54,370 9,341 (50) 63,661
Operating expenses:
Selling, general and
administrative 17,999 1,149 (78)(a) 19,070 2,572 (475)(f) 21,167
Research, development and
engineering 11,972 337 78 (a) 12,387 1,841 - 14,228
Amortization expense 4,033 - 1,044 (b) 5,077 - 1,117 (b) 6,194
In-process research and
development and
acquisition-related expenses 32,253 - (32,253)(c) - - - (g) -
----------------------------------------------------------------------------------------
Total operating expenses 66,257 1,486 (31,209) 36,534 4,413 642 41,589
----------------------------------------------------------------------------------------
Operating earnings (loss) (14,377) 1,004 31,209 17,836 4,928 (692) 22,072
Interest expense, net 7,782 - 1,136 (d) 8,918 116 4,031 (h) 13,065
----------------------------------------------------------------------------------------
Earnings (loss) before income
taxes (22,159) 1,004 30,073 8,918 4,812 (4,723) 9,007
Minority interest - - - - 560 (560)(i) -
Income taxes 1,716 - (200)(e) 1,516 1,252 (1,237)(e) 1,531
----------------------------------------------------------------------------------------
Net earnings (loss) $ (23,875) $ 1,004 $ 30,273 $ 7,402 $ 3,000 $ (2,926) $ 7,476
========================================================================================
Basic earnings (loss) per share:
Net earnings (loss) $ (1.03) $ 0.32
============ ============
Weighted average common
shares 23,070 23,070
Diluted earnings (loss) per share:
Net earnings (loss) $ (1.03) $ 0.31
============ ============
Weighted average common
shares 23,070 24,041
</TABLE>
See accompanying notes to Pro Forma Combined Statements of Operations for the
Three Months Ended May 30, 1998.
PF-4
<PAGE>
B/E Aerospace, Inc.
Notes to Pro Forma Combined Statements of Operations
Three Months Ended May 30, 1998
(a) Reflects adjustments to reclassify certain expenses in a manner consistent
with B/E's presentation, in which B/E classifies certain engineering related
expenses as a component of research and development as compared to general
and administrative expenses.
(b) Reflects adjustments to depreciation and amortization based on the
preliminary purchase price allocation related to the acquired property and
equipment and intangible assets.
(c) During the first three months of fiscal 1999, the Company expensed $32,253
related to in-process research and development and acquisition-related
expenses for the Other Insignificant Acquisitions. These expenses are
eliminated in the Pro Forma Combined Statements of Operations for the three
months ended May 30, 1998 as the Other Insignificant Acquisitions are
assumed to have occurred on February 23, 1997.
(d) Represents additional interest expense for the three months ended May 30,
1998 that would have been incurred had the Other Insignificant Acquisitions
and refinancing of B/E's 9 3/4% Notes (which was completed on March 16,
1998) taken place on February 23, 1997.
(e) To adjust income tax expense to reflect a 17% effective tax rate.
(f) Reflects adjustments to eliminate costs attributable to the selling
shareholders of SMR. The selling shareholders will no longer be employed by
B/E. Such costs consist of the following:
Shareholder salaries and benefits $ 475
=========
(g) During the second quarter of fiscal 1999, the Company expensed $46,902
related to in-process research and development and acquisition-related
expenses for the SMR acquisition. These expenses are reflected in the Pro
Forma Combined Statements of Operations for the year ended February 28, 1998
as the SMR acquisition is assumed to have occurred on February 23, 1997.
(h) Represents additional interest expense for the three months ended May 30,
1998 that would have been incurred had the acquisition by B/E of SMR, the
sale of B/E's 9 1/2% Notes in connection with the SMR acquisition and use
of net proceeds to pay-down a portion of the Bank Credit Facility
borrowings, and the refinancing of B/E's 9 3/4% Notes (which was completed
on March 16, 1998) occurred on February 23, 1997.
(i) To eliminate minority interest.
PF-5
<PAGE>
Pro Forma Combined Balance Sheet (Unaudited)
May 30, 1998
(Dollars in thousands)
<TABLE>
<CAPTION>
--------------------------------------------------------------
B/E SMR Adjustments Pro Forma
--------------------------------------------------------------
<S> <C> <C> <C> <C>
Assets:
Current assets:
Cash and cash
equivalents $ 24,821 $ 325 $ 22,000 (a) $ 24,396
193,750 (c)
(141,500)(a)
(75,000)(c)
Account receivable -
trade, net 99,565 19,418 - 118,983
Inventories, net 152,506 9,365 - 161,871
Other current assets 8,867 4,512 - 13,379
--------------------------------------------------------------
Total current
assets 285,759 33,620 (750) 318,629
Property & equipment, net 120,543 7,747 - 128,290
Intangibles & other
assets, net 332,881 2,560 141,500 (a) 413,955
(23,734)(d)
1,400 (b)
(46,902)(b)
5,250 (c)
1,000 (c)
--------------------------------------------------------------
$ 739,183 $ 43,927 $ 77,764 $ 860,874
==============================================================
Liabilities & Stockholders' Equity
Current liabilities:
Accounts payable $ 45,764 $ 6,013 $ - $ 51,777
Accrued liabilities 57,936 7,479 1,400 (b) 66,815
Current portion of
long-term debt 5,793 1,414 (1,414)(d) 5,793
--------------------------------------------------------------
Total current
liabilities 109,493 14,906 (14) 124,385
Long-term debt 430,365 9,129 (2,428)(d) 584,066
200,000 (c)
22,000 (a)
(75,000)(c)
Deferred income taxes 1,130 - - 1,130
Other liabilities 25,528 2,487 (2,487)(d) 25,528
--------------------------------------------------------------
Total liabilities 566,516 26,522 142,071 735,109
--------------------------------------------------------------
Stockholders' equity:
Common stock 232 2 (2)(d) 232
Additional paid-in capital 240,581 - - 240,581
Accumulated deficit (64,599) 17,403 (17,403)(d) (111,501)
(46,902)(b)
Cumulative foreign exchange
translation adjustment (3,547) - - (3,547)
--------------------------------------------------------------
Total stockholders' equity 172,667 17,405 (64,307) 125,765
--------------------------------------------------------------
$ 739,183 $ 43,927 $ 77,764 $ 860,874
==============================================================
</TABLE>
See accompanying notes to Pro Forma Combined Balance Sheet as of May 30, 1998.
PF-6
<PAGE>
B/E Aerospace, Inc.
Notes to Pro Forma Combined Balance Sheet
May 30, 1998
(a) Reflects the use of cash related to the acquisition of SMR:
Cash paid to SMR selling shareholders through November 1998 $ 119,500
Bank Credit facility proceeds (to pay-off ESOP debt) 22,000
---------
Aggregate purchase price $ 141,500
=========
(b) The acquisition of SMR has been accounted for as a purchase pursuant to APB
Opinion No. 16 "Business Combinations." The purchase price has been
allocated to the assets and liabilities of SMR based on relative fair
values. Such allocations are subject to final determination based on
valuations and other studies. The final values may differ significantly
from those set forth below:
Purchase cost:
Aggregate purchase price $ 141,500
Purchase accounting reserves 1,400
Less estimated book value of net assets purchased (23,734)
---------
$ 119,166
=========
Allocation of excess of purchase cost over book value of assets:
Goodwill and other intangible assets, subject to
final determination $ 72,264
Purchased in-process research and development 46,902
---------
$ 119,166
=========
(c) Reflects net proceeds from the issuance of the 9 1/2% Notes, as
follows, and subsequent $75,000 pay down of Bank Credit Facility
borrowings:
Proceeds from issuance of the 9 1/2% Notes $ 200,000
Initial purchasers' discount (5,250)
Offering expenses (1,000)
---------
$ 193,750
=========
(d) To reclassify the equity in SMR, minority interest, and debt retained by
sellers in excess of $6,700 as part of the allocation of purchase price.
PF-7
