<PAGE> 1
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
__________
FORM 8-K/A
AMENDMENT NO. 1 TO THE
CURRENT REPORT
Pursuant to Section 13 or 15(d)
of the Securities Exchange Act of 1934
Date of Report (Date of earliest event reported) December 29, 1994
Sensormatic Electronics Corporation
(Exact name of registrant as specified in charter)
Delaware 1-10739 34-1024665
(State or other jurisdic- (Commission (IRS employer
tion of incorporation) file number) identification No.)
500 N.W. 12th Avenue
Deerfield Beach, Florida 33442
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code:
(305) 420-2000
(Former name or former address, if changed since last report)
<PAGE> 2
Item 7. Financial Statements, Pro Forma Financial Information
and Exhibits
The information with respect to Knogo in the financial
statements and pro forma financial information below has been supplied by
Knogo, and the information with respect to Sensormatic in such pro forma
financial information has been supplied by Sensormatic.
(a)(1) UNAUDITED FINANCIAL STATEMENTS OF THE BUSINESS ACQUIRED.
Unaudited consolidated financial statements of Knogo for the
period ended August 31, 1994 (previously filed):
Knogo Corporation and Subsidiaries Condensed Consolidated
Balance Sheet (Unaudited), at August 31, 1994
Knogo Corporation and Subsidiaries Consolidated
Statement of Operations (Unaudited), for the three- and six-month
periods ended August 31, 1994
Knogo Corporation and Subsidiaries Consolidated Statement
of Cash Flows (Unaudited), for the six-month period ended
August 31, 1994
Knogo Corporation and Subsidiaries Notes to Consolidated
Financial Statements (Unaudited)
(a)(2) UNAUDITED FINANCIAL STATEMENTS OF THE BUSINESS ACQUIRED.
Unaudited consolidated financial statements of Knogo for the
period ended November 30, 1994 (filed herewith):
Knogo Corporation and Subsidiaries Condensed Consolidated
Balance Sheet (Unaudited), at November 30, 1994
Knogo Corporation and Subsidiaries Consolidated
Statement of Operations (Unaudited), for the three- and nine-month
periods ended November 30, 1994
Knogo Corporation and Subsidiaries Consolidated Statement
of Cash Flows (Unaudited), for the nine-month period ended
November 30, 1994
Knogo Corporation and Subsidiaries Notes to Consolidated
Financial Statements (Unaudited)
<PAGE> 3
(a)(3) FINANCIAL STATEMENTS OF THE BUSINESS ACQUIRED.
Consolidated financial statements of Knogo for the fiscal year
ended February 28, 1994 (previously filed):
Independent Auditors' Report - Deloitte & Touche LLP
Knogo Corporation and Subsidiaries Consolidated Balance
Sheet, at February 28, 1994
Knogo Corporation and Subsidiaries Consolidated Statement of
Income, for the fiscal year ended February 28, 1994
Knogo Corporation and Subsidiaries Consolidated Statement of
Shareholders' Equity, for the fiscal year ended February 28,
1994
Knogo Corporation and Subsidiaries Consolidated Statement of
Cash Flows, for the fiscal year ended February 28, 1994
Knogo Corporation and Subsidiaries Notes to Consolidated
Financial Statements
(b) PRO FORMA FINANCIAL INFORMATION. Unaudited pro
forma combined financial information as of September 30, 1994 and
for the three months ended September 30, 1994 and 1993, and the
fiscal year ended June 30, 1994 relating to the Company's
acquisition of Knogo (previously filed):
Unaudited Condensed Pro Forma Combined Balance
Sheet, dated September 30, 1994
Unaudited Condensed Pro Forma Combined Statement
of Income, for the fiscal year ended June 30, 1994
Unaudited Condensed Pro Forma Combined Statement of Income
for the three months ended September 30, 1994
Unaudited Condensed Pro Forma Combined Statement of Income for
for the three months ended September 30, 1993
Notes to Unaudited Condensed Pro Forma Combined
Financial Information
<PAGE> 4
(c) EXHIBITS:
<TABLE>
<CAPTION>
Exhibit
Number Description
<S> <C>
2(a) Agreement and Plan of Merger ("Merger
Agreement") dated August 14, 1994,
between Sensormatic Electronics
Corporation, Knogo Corporation
("Knogo") and Knogo North America,
Inc. ("Knogo N.A.")
(including Exhibit A - Delaware
Certificate of Merger; Exhibit B - New
York Certificate of Merger; and
Exhibit C - Form of Contribution and
Divestiture Agreement (the "Divesti-
ture Agreement") between Knogo and
Knogo N.A.) (incorporated by
reference to Exhibit 2(a) to Registration
Statement on Form S-4, filed on
November 28, 1994 (File No. 33-56619)).
2(b) Form of License Agreement between
Knogo and Knogo N.A.
(Exhibit B to Divestiture Agreement)
(incorporated by reference to Exhibit 2(b)
to Registration Statement on Form S-4,
filed on November 28, 1994 (File
No. 33-56619)).
2(c) Form of Supply Agreement between Knogo
and Knogo N.A. (Exhibit C to
Divestiture Agreement) (incorporated by
reference to Exhibit 2(c) to Registration
Statement on Form S-4, filed on
November 28, 1994 (File No. 33-56619)).
The Supply Agreement, the License Agreement and the
Divestiture Agreement were each executed on
December 29, 1994.
(Schedules to Exhibits 2(a), 2(b) and
2(c) are not included. Copies will be
furnished supplementally to the
Securities and Exchange Commission
upon request.)
23(a) Consent of Deloitte & Touche LLP (previously filed)
23(b) Consent of Deloitte & Touche LLP (previously filed)
</TABLE>
<PAGE> 5
UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS OF KNOGO FOR THE
PERIOD ENDED NOVEMBER 30, 1994:
KNOGO CORPORATION AND SUBSIDIARIES
CONDENSED CONSOLIDATED BALANCE SHEET
(In thousands, except stock par value)
<TABLE>
<CAPTION>
November 30, 1994
ASSETS (Unaudited)
<S> <C>
CASH AND CASH EQUIVALENTS $ 5,747
MARKETABLE SECURITIES 2,814
ACCOUNTS RECEIVABLE, less allowance
for doubtful accounts of $5,229 24,641
NET INVESTMENT IN SALES-TYPE LEASES 28,386
INVENTORIES 20,431
SECURITY DEVICES-Net 5,660
PROPERTY, PLANT AND EQUIPMENT-Net 20,200
OTHER ASSETS 3,697
--------
$111,576
LIABILITIES AND SHAREHOLDERS' EQUITY
NOTES PAYABLE-BANKS $ 23,251
ACCOUNTS PAYABLE AND ACCRUED
LIABILITIES 19,109
INCOME TAXES PAYABLE 1,050
DEFERRED INCOME TAXES 1,155
DEFERRED LEASE RENTALS 2,857
--------
47,422
SHAREHOLDERS' EQUITY
Participating cumulative
preferred shares, Series A,
$.01 par value: authorized
200 shares; none issued
Preferred stock, $.01 par value:
Authorized 2,800 shares;
none issued
Common stock, $.01 par value:
Authorized 20,000 shares; issued
and outstanding - 5,635 shares 56
Additional paid-in capital 37,275
Retained earnings 11,130
Equity adjustment from foreign
currency translation 15,693
--------
64,154
--------
$111,576
</TABLE>
See notes to the condensed consolidated financial statements.
<PAGE> 6
KNOGO CORPORATION AND SUBSIDIARIES
CONSOLIDATED STATEMENT OF OPERATIONS (UNAUDITED)
(In thousands, except per share data)
<TABLE>
<CAPTION>
Three Months Ended Nine Months Ended
November 30, November 30,
1994 1993 1994 1993
(Unaudited)
<S> <C> <C> <C> <C>
Revenues:
Sales of security devices
and related interest income $19,032 $18,133 $51,515 $56,840
Lease rentals and other 3,463 3,242 9,788 10,906
------- ------- ------- -------
Total revenue 22,495 21,375 61,303 67,746
Operating costs and expenses:
Cost of security devices sold 9,387 7,783 23,564 24,938
Depreciation and amortization
of security devices and
property, plant and equipment 1,207 1,174 3,619 3,762
Selling, general and adminis-
trative expenses 12,680 9,225 33,537 30,116
Research and development 960 917 3,090 2,880
Unusual item (See Note G) - - 651 -
------- ------- ------- -------
Total operating costs
and expenses 24,234 19,099 64,461 61,696
------- ------- ------- -------
Operating profit (loss) (1,739) 2,276 (3,158) 6,050
Interest (income) (82) (154) (226) (314)
Interest expense 486 530 1,417 1,732
Foreign currency loss 348 355 528 574
------- ------- ------- -------
Income (loss) before income taxes (2,491) 1,545 (4,877) 4,058
Income taxes 90 386 270 1,014
------- ------- ------- -------
Net income (loss) $(2,581) $ 1,159 $(5,147) $ 3,044
------- ------- ------- -------
Net income (loss) per common share $ (.47) $ .21 $ (.95) $ .55
------- ------- ------- -------
Weighted average common shares 5,474 5,537 5,417 5,545
</TABLE>
See notes to the condensed consolidated financial statements.
<PAGE> 7
KNOGO CORPORATION AND SUBSIDIARIES
CONSOLIDATED STATEMENT OF CASH FLOWS (UNAUDITED)
(In thousands)
<TABLE>
<CAPTION>
Nine Months Ended
November 30,
1994 1993
(Unaudited)
<S> <C> <C>
CASH FLOWS FROM OPERATING ACTIVITIES
Net Income (loss) $(5,147) $ 3,044
Adjustments to reconcile net income
(loss) to net cash (used in) or
provided by operating activities:
Depreciation and amortization
of security devices and
property, plant and equipment 2,880 3,247
Deferred income taxes (86) 759
Provision for bad debts 1,734 1,787
Gain on disposal of property
plant and equipment (2) (32)
Amortization of deferred charges 61 51
Unrealized foreign currency
transaction loss 886 823
Changes in operating assets and
liabilities:
Decrease in accounts
receivable 1,425 5,795
(Increase) decrease in
inventories 707 (1,251)
Increase in net
investment in
sales-type leases (1,221) (5,234)
Increase in security
devices-net (2,031) (1,139)
Decrease (increase)
in other assets 887 (57)
(Decrease) increase
in accounts
payable and accrued
liabilities (1,083) 639
(Decrease) increase
in income
taxes payable (356) 180
(Decrease) increase
in deferred
lease rentals (455) 322
------- -------
NET CASH (USED IN) OR PROVIDED
BY OPERATING ACTIVITIES (1,801) 8,934
CASH FLOWS FROM INVESTING ACTIVITIES
Purchase of property, plant and
equipment-net (1,646) (1,185)
Proceeds from sale of property,
plant and equipment 134 150
------- -------
NET CASH USED IN INVESTING ACTIVITIES (1,512) (1,035)
CASH FLOWS FROM FINANCING ACTIVITIES
Net payments (repayments) under short
-term lines of credit and overdraft
facilities 969 (1,278)
Repayments on long-term borrowings (3,800) (2,539)
Proceeds from exercise of stock
options 1,638 174
------- -------
NET CASH USED IN FINANCING ACTIVITIES (1,193) (3,643)
EFFECT OF EXCHANGE RATE ON CASH (225) 322
------- -------
(DECREASE) INCREASE IN CASH AND CASH
EQUIVALENTS (4,731) 4,578
CASH AND CASH EQUIVALENTS, at beginning
of period 10,478 7,351
CASH AND CASH EQUIVALENTS, at end of
period $ 5,747 $11,929
</TABLE>
See notes to the condensed consolidated financial statements
<PAGE> 8
KNOGO CORPORATION AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)
NOVEMBER 30, 1994
NOTE A -- BASIS OF PRESENTATION
The financial information presented is unaudited. In the opinion of
management, all adjustments, consisting of normal recurring
adjustments necessary for a fair presentation of the financial
information for the periods indicated have been included. Interim
results are not necessarily indicative of results for a full year.
NOTE B -- MERGER WITH SENSORMATIC AND SPIN-OFF
On June 27, 1994, Knogo announced that it was holding discussions
involving a possible merger or sale of Knogo or the addition of a
significant investor.
On August 14, 1994, Knogo and its newly established, wholly-owned
subsidiary Knogo North America Inc. ("Knogo N.A.") entered into a Merger
Agreement with Sensormatic Electronics Corporation ("Sensormatic"),
contemplating the merger of Knogo into Sensormatic (the "Merger").
The Merger was consummated on December 29, 1994. Pursuant to the Merger,
each share of Knogo common stock was converted into .5513 shares of
Sensormatic common stock.
Immediately prior to the Merger, Knogo contributed to Knogo N.A.
certain assets and liabilities of Knogo relative to its operations
in the United States, Canada and Puerto Rico (the "Knogo N.A. Territory")
and the Knogo N.A. common stock was then distributed to the Knogo
shareholders so that upon the effectiveness of the Merger Knogo's remaining
business interests (i.e., all such interests outside of the United States,
Canada and Puerto Rico) were combined with those of Sensormatic.
SUPPLY AND LICENSE AGREEMENT:
Pursuant to a related supply agreement, Sensormatic will be obligated to
purchase products from Knogo N.A. in the amount of $12 million during the
first 12 months following the Merger and an additional $12 million during
the subsequent 18 months. Such products will be priced to yield Knogo N.A.
a 35% gross margin.
Pursuant to a related license agreement, Sensormatic will have the
exclusive right to manufacture and sell existing Knogo products outside
the Knogo N.A. Territory and Knogo N.A. shall have such right
within the Knogo N.A. Territory, except that Knogo N.A. and Sensormatic
will each have the right to develop and market the SuperStrip technology
in the Knogo N.A. Territory.
DECLINE IN OPERATIONS:
Subsequent to May 31, 1994, Knogo has experienced a decline in operating
income principally as a result of declining revenues and of higher
professional fees in connection with the proposed merger and related
agreements.
<PAGE> 9
NOTE C -- NET INCOME (LOSS) PER SHARE
Net Income (loss) per common share is computed using the
weighted average number of common shares outstanding during the
period, plus when dilutive, net additional shares issuable upon
exercise of options.
NOTE D -- NET INVESTMENT IN SALES-TYPE LEASES
Knogo is the lessor of security devices under agreements
expiring in various years through 2001. The net investment in
sales-type leases consists of:
<TABLE>
<CAPTION>
November 30, 1994
(000's omitted)
----------------
<S> <C>
Minimum lease payments
receivable $37,641
Allowance for uncollectible
minimum lease payments (1,893)
Unearned income (8,070)
Portion of lease payments
representing executory costs (1,179)
Unguaranteed residual value 1,887
-------
$28,386
</TABLE>
NOTE E -- INVENTORIES
Inventories consist of the following:
<TABLE>
<CAPTION>
November 30, 1994
(000's omitted)
----------------
<S> <C>
Raw materials $ 4,422
Work-in-process 9,340
Finished goods 6,669
-------
$20,431
</TABLE>
NOTE F -- SECURITY DEVICES ON LEASE
Security devices are stated at cost and are summarized as follows:
<TABLE>
<CAPTION>
November 30, 1994
(000's omitted)
---------------
<S> <C>
Security devices on lease $20,677
Less allowance for depreciation 15,017
-------
$ 5,660
</TABLE>
NOTE G -- UNUSUAL ITEM
On May 10, 1994, Arthur J. Minasy, Chairman of the Board of Directors
and Chief Executive Officer, died. Knogo is paying a death
benefit related to the termination of an employment contract in 24
equal monthly installments of $28,960, commencing in May 1994. This
termination death benefit, with a present value of approximately
$651,000 (computed at an effective rate of 7%), has been charged to
expense in the first quarter of fiscal 1995.
<PAGE> 10
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 thereunto duly authorized.
Dated: January 26, 1995
SENSORMATIC ELECTRONICS CORPORATION
By: /s/ MIGUEL A. FLORES
Miguel A. Flores
Vice President and Treasurer
<PAGE> 11
Exhibit Index
<TABLE>
<CAPTION>
Exhibit
Number Description
<S> <C>
2(a) Agreement and Plan of Merger ("Merger
Agreement") dated August 14, 1994,
between Sensormatic Electronics
Corporation, Knogo Corporation
("Knogo") and Knogo North America
Inc. ("Knogo N.A.") (including
Exhibit A - Delaware Certificate
of Merger; Exhibit B - New
York Certificate of Merger; and
Exhibit C - Form of Contribution and
Divestiture Agreement (the "Divesti-
ture Agreement") between Knogo and
Knogo N.A.) (incorporated by reference
to Exhibit 2(a) to Registration
Statement on Form S-4, filed on
November 28, 1994 (File No. 33-56619)).
2(b) Form of License Agreement between
Knogo and Knogo N.A. (Exhibit B
to Divestiture Agreement)
(incorporated by reference to Exhibit 2(b)
to Registration Statement on Form S-4,
filed on November 28, 1994
(File No. 33-56619)).
2(c) Form of Supply Agreement between Knogo
and Knogo N.A. (Exhibit C to
Divestiture Agreement) (incorporated by
reference to Exhibit 2(c) to Registration
Statement on Form S-4, filed on
November 28, 1994 (File No. 33-56619)).
The Supply Agreement, the License Agreement
and the Divestiture Agreement were each
executed on December 29, 1994.
(Schedules to Exhibits 2(a), 2(b) and
2(c) are not included. Copies will be
furnished supplementally to the
Securities and Exchange Commission
upon request.)
23(a) Consent of Deloitte & Touche LLP (previously filed)
23(b) Consent of Deloitte & Touche LLP (previously filed)
</TABLE>
