<PAGE> 1
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K/A
(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) November 1, 1999
----------------
Shiloh Industries, Inc.
- --------------------------------------------------------------------------------
(Exact Name of Registrant as Specified in its Charter)
Delaware 0-21964 51-0347683
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(State or Other (Commission (IRS Employer
Jurisdiction of File Number) Identification No.)
Incorporation)
Suite 202, 103 Fould Road, Wilmington, DE 19803
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(Address of Principal Executive Offices) (Zip Code)
Registrant's telephone number, including area code (302) 998-0592
----------------------------
Not Applicable
- --------------------------------------------------------------------------------
(Former Name or Former Address, if Changed Since Last Report)
<PAGE> 2
This Amendment to the Registrant's Current Report on Form 8-K, dated
November 1, 1999, and filed with the Securities and Exchange Commission on
November 15, 1999 (the "Form 8-K"), is being filed in order to include the
financial statements and pro forma financial information required with respect
to the acquisition by the Registrant of substantially all of the assets of MTD
Automotive, an unincorporated division of MTD Products Inc, on November 1, 1999.
These financial statements and financial information were omitted from the
disclosure contained in the Form 8-K pursuant to the instructions to Item 7
thereof. Pursuant to Rule 12b- 15 under the Securities Exchange Act of 1934, as
amended, the complete text of Item 7, as amended, is set forth below.
ITEM 7. FINANCIAL STATEMENTS, PRO FORMA FINANCIAL INFORMATION AND EXHIBITS.
(a) Financial Statements of Business Acquired.
REPORT OF INDEPENDENT ACCOUNTANTS
December 3, 1999
To the Board of Directors of
MTD PRODUCTS INC:
In our opinion, the accompanying balance sheet and the related statements
of operations, division equity, and cash flows present fairly, in all material
respects, the financial position of MTD Automotive (a division of MTD PRODUCTS
INC), (the "Company"), at July 31, 1999, and the results of its operations and
its cash flows for the year ended July 31, 1999, in conformity with generally
accepted accounting principles. 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 of these statements in accordance with generally accepted auditing
standards which require that we plan and perform the audits 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, assessing the
accounting principles used and significant estimates made by management, and
evaluating the overall financial statement presentation. We believe that our
audit provides a reasonable basis for the opinion expressed above.
PricewaterhouseCoopers, LLP
Cleveland, Ohio
MTD AUTOMOTIVE (A DIVISION OF MTD PRODUCTS INC)
BALANCE SHEET AT JULY 31, 1999
(All Dollars in Thousands)
<TABLE>
<CAPTION>
JULY 31,
1999
<S> <C>
Assets
Current assets:
Cash $ 38
Accounts receivable, less allowance for doubtful
accounts of $146 in 1999 20,775
Inventories, net 27,788
Prepaid expenses and other current assets 192
Total current assets 48,793
-------
Property, plant and equipment, net 36,237
Other long-term assets, net 51
-------
Total assets $85,081
=======
LIABILITIES AND DIVISION EQUITY
Current liabilities:
Current portion of long term debt $ 50
Accounts payable 4,669
Accrued and other current liabilities 5,941
-------
Total current liabilities 10,660
Long term debt -
-------
Total liabilities 10,660
Division equity 74,421
-------
Total liabilities and division equity $85,081
=======
</TABLE>
The accompanying notes are an integral part of these financial statements.
<PAGE> 3
MTD AUTOMOTIVE (A DIVISION OF MTD PRODUCTS INC)
STATEMENT OF INCOME
(Dollars in Thousands)
Year Ended
<TABLE>
<CAPTION>
YEAR ENDED
JULY 31,
1999
<S> <C>
Net sales $ 192,783
Cost of sales 192,335
----------
Gross profit 448
Selling and administrative expenses 7,681
----------
Operating loss (7,233)
Interest expense 17
----------
Loss before income taxes (7,250)
Income tax benefit 2,791
----------
Net loss $ (4,459)
==========
</TABLE>
The accompanying notes are an integral part of these financial statements.
<PAGE> 4
MTD AUTOMOTIVE (A DIVISION OF MTD PRODUCTS INC)
STATEMENT OF CASH FLOWS
(Dollars in Thousands)
<TABLE>
<CAPTION>
YEAR ENDED
JULY 31,
1999
<S> <C>
Cash flows from operating activities:
Net loss $ (4,724)
Adjustments to reconcile net loss to net cash (used in)
provided by operating activities:
Depreciation and amortization 8,883
Changes in assets and liabilities:
Accounts receivable (2,285)
Inventories (6,104)
Prepaid expenses and other assets 39
Accounts payable (1,697)
Accrued expenses and other liabilities 593
---------
Net cash (used in) provided by operating activities (5,295)
---------
Cash flows from investing activities:
Purchases of property, plant and equipment, net (11,323)
---------
Net cash used in investing activities (11,323)
---------
Cash flows from financing activities:
Payment of debt (297)
Division equity activity, net 16,915
---------
Net cash provided by financing activities 16,618
Net increase in cash and cash equivalents -
Cash and cash equivalents at beginning of period 38
---------
Cash and cash equivalents at end of period $ 38
=========
Supplemental schedule of noncash investing activities:
Retirement of depreciated property, plant and
equipment $ 8,541
=========
</TABLE>
The accompanying notes are an integral part of these financial statements.
<PAGE> 5
MTD AUTOMOTIVE (A DIVISION OF MTD PRODUCTS INC)
NOTES TO FINANCIAL STATEMENTS
- --------------------------------------------------------------------------------
1. DESCRIPTION OF BUSINESS AND SIGNIFICANT ACCOUNTING POLICIES
Nature of the Business
MTD Automotive (the "Division"), a division of MTD PRODUCTS INC (the
"Parent"), is a manufacturer of stamped parts and components for the
automotive industry. The products manufactured by the Division are sold
primarily to original equipment manufacturers located in the United
States.
The business of the Division is significantly dependent upon several
automotive and truck manufacturers. In the event that a significant
portion of the automotive and truck business were to cease immediately,
and the revenues were not replaced with sales to other customers, whether
existing or new, the loss could have a material adverse effect on the
Division. However, the Division believes that its relationships with
these customers are good and, although it anticipates the loss of
business in an event of a strike or for particular parts from time to
time as the products in which those parts are incorporated are
discontinued or substantially changed, the Division believes that it can
make up for such losses through existing or new customers.
The Company's three largest customers accounted for approximately 57%,
15%, and 15% of total sales in fiscal year 1999.
Basis of Presentation
The accompanying financial statements include the accounts of the
operating entities of MTD Automotive. All material transactions and
accounts related to MTD Automotive have been included in the accompanying
financial statements. All significant intercompany transactions occurring
within the Division have been eliminated. Transactions with other
divisions of MTD PRODUCTS INC have not been eliminated from these
financial statements (see Note 6 - Related Party Transactions). The
Division purchases from and sells to other divisions of the Parent on a
regular basis. The policy within the Parent is to provide these products
at a transfer price based on standard cost, which approximates actual
cost, plus three percent.
Cash and Cash Equivalents
The Company considers all highly liquid instruments with a maturity of
less than three months to be cash equivalents.
Inventories
Inventories are stated at the lower of cost or market. Cost is determined
by the first-in, first-out (FIFO) method.
Property, Plant and Equipment
Property, plant and equipment are stated at cost. Depreciation is
calculated using principally the declining-balance method. Buildings and
improvements are generally depreciated over 15 to 40 years, machinery and
equipment over 8 to 15 years, furniture, fixtures and computer equipment
over 5 to 8 years and equipment under capital lease over the lease term
or 5 years. Tooling mold, die, and other special equipment costs owned by
the Division are capitalized and depreciated over their useful life, not
to exceed 4 years. Tooling, mold, and die costs incurred in excess of
amounts contractually reimbursed by customers are also capitalized and
depreciated over their useful life, not to exceed 4 years, if the
associated tools, molds, and dies are utilized by the Division in
connection with noncancelable long-term supply arrangements with
customers. As of July 31, 1999
<PAGE> 6
MTD AUTOMOTIVE (A DIVISION OF MTD PRODUCTS INC)
NOTES TO FINANCIAL STATEMENTS
- --------------------------------------------------------------------------------
the net book value of tools, molds, dies, or other special
equipment costs included in property, plant, and equipment were
$6,282,855.
Maintenance and repair costs are expensed as incurred. Costs of renewals
and betterments which substantially increase the useful lives of the
operating assets are capitalized. The cost and related accumulated
depreciation of all plant and equipment disposed of are removed from the
accounts, and any gain or loss from such disposal is included in the
earnings for the current period. Depreciation expense was $8,824,407
in 1999.
Revenue Recognition
Revenue is recognized when products are shipped.
Income Taxes
For income tax purposes, the Division is included in the consolidated tax
return of MTD PRODUCTS INC (the "Parent"). No tax allocation agreement
exists between the Parent and the Division. The Parent allocates income
tax expense (benefit) to the Division based upon an assumed federal and
state tax rate of 35% and 3.5%, respectively. Income tax expense
calculated on a stand-alone basis would not be materially different than
the allocation method noted above.
Fair Market Value of Financial Instruments
Cash, accounts receivable and accounts payable are, in management's
opinion, stated at amounts which approximate their fair value because of
their short maturity.
Estimates
The preparation of 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
and disclosure of contingent assets and liabilities at the date of the
financial statements and the reported amounts of revenues and expenses
during the reporting period. Actual results could differ from those
estimates.
New Accounting Standards
In June 1998, the FASB issued Statement of Financial Accounting Standards
No. 133, "Accounting for Derivative Instruments and Hedging Activities:
effective for all fiscal quarters of fiscal years beginning after June
15, 2000. This statement establishes accounting and reporting standards
for certain derivative instruments and for hedging activities. It
requires that an entity recognize all derivatives as either assets or
liabilities in the statement of financial position and measure those
instruments at fair value. Adoption of this standard will not have a
material impact on the financial statements of the Division.
The Accounting Standards Executive Committee issued Statement of Position
98-1, "Accounting for the Costs of Computer Software Developed or
Obtained for Internal Use" ("SOP 98-1") in March 1998. This SOP is
effective for fiscal years beginning after December 15, 1998 and provides
guidance on accounting for the costs of computer software developed or
obtained for internal use. This SOP is not expected to have a significant
impact on the Division's financial statements.
The Accounting Standards Executive Committee issued Statement of Position
98-5, "Accounting for the Costs of Start-up Activities" ("SOP 98-5") in
April 1998. This SOP is effective for fiscal years beginning after
December 15, 1998 and provides guidance on the financial reporting of
start-
<PAGE> 7
MTD AUTOMOTIVE (A DIVISION OF MTD PRODUCTS INC)
NOTES TO FINANCIAL STATEMENTS
- --------------------------------------------------------------------------------
up costs and organization costs. This SOP is not expected to have a
significant impact on the financial statements of the Division.
2. INVENTORIES
Inventories consisted of the following at July 31:
1999
Raw materials $ 9,837,021
Work-in-process 15,748,677
Finished goods 3,114,031
------------
Total gross inventory 28,699,729
Inventory reserves (911,684)
------------
Total inventories, net $ 27,788,045
------------
3. PROPERTY, PLANT AND EQUIPMENT:
Property, plant and equipment consisted of the following at July 31:
1999
Land $ 390,778
Buildings and improvements 12,702,876
Machinery and equipment 70,861,757
Furniture, fixtures and computer equipment 2,900,764
Equipment under capital lease (Note 4) 1,374,223
Leasehold improvement 15,649
Construction in process 3,576,971
------------
91,823,018
Less accumulated depreciation and amortization (55,586,211)
------------
$ 36,236,807
------------
Accumulated amortization associated with the equipment under capital
lease was $1,327,039 as of July 31, 1999.
4. ACCRUED AND OTHER CURRENT LIABILITIES
Accrued and other current liabilities consisted of the following at
July 31, 1999:
Accrued payroll $ 848,827
Accrued personal property 1,124,352
Accrued workers' compensation 1,970,874
Accrued freight 587,000
Accrued other 1,410,246
-----------
5,941,299
===========
5. FINANCING ARRANGEMENTS:
MTD PRODUCTS INC (the "Parent") finances the operations of the Division.
The Parent does not charge interest expense on intercompany account
balance activity with the Division. All advances from the Parent, all
intercompany account balances with the Parent, and all pension-related
assets and obligations are reflected within the division equity section
of the Balance Sheet. Other than capital lease obligations, the Division
does not have any outstanding debt instruments owed to third
parties. The Parent has pledged all assets, except for transportation
equipment, of the Division as collateral for the Parents' external debt
instruments.
<PAGE> 8
MTD AUTOMOTIVE (A DIVISION OF MTD PRODUCTS INC)
NOTES TO FINANCIAL STATEMENTS
- --------------------------------------------------------------------------------
The Division has entered into capital lease agreements for computer and
manufacturing equipment. Future minimum lease payments for noncancelable
capital lease obligations as of July 31, 1999 are $49,841.
Interest paid during the year ended July 31, 1999 was $16,573.
6. RENTAL EXPENSE
Rental or lease expense for warehouse space, sales office and machinery
and equipment was $801,807 in 1999. Rental commitments under
noncancelable operating leases approximate $826,314 in 2000, 535,820 in
2001, and $89,664 in 2002. Commitments do not extend beyond the 2002
fiscal year.
7. RELATED PARTY TRANSACTIONS
Purchases from and sales to other divisions of the Parent amounted to
$14,778,571 and $11,101,121, respectively, for the year ended July 31,
1999. Reflected within the selling and administrative expenses for the
year ended July 31, 1999 are $673,000 of allocation charges for
services performed by the Parent.
8. PENSION PLANS AND OTHER POSTRETIREMENT BENEFITS:
Pension Plans - The Division has funded defined benefit pension plans
covering union employees.
The net periodic pension income for the union defined benefit pension
plans includes the following components as of July 31:
1999
Service cost $ 629,107
Interest cost 1,663,517
Expected return on assets (3,038,608)
Amortization of prior service cost 210,284
Recognized net actuarial gain (333,237)
-----------
Net periodic pension income for the year $ (868,937)
-----------
<PAGE> 9
MTD AUTOMOTIVE (A DIVISION OF MTD PRODUCTS INC)
NOTES TO FINANCIAL STATEMENTS
- --------------------------------------------------------------------------------
The funded status of the union defined benefit plans was as follows as of
July 31:
1999
Change in benefit obligation
Benefit obligation at beginning of year $ 23,369,323
Service cost 629,107
Interest cost 1,663,517
Benefits paid (1,016,967)
Actuarial (gain)/loss (1,231,206)
Amendments --
------------
Benefit obligation at end of year 23,413,774
------------
Change in plan assets
Fair value of plan assets at beginning of year 37,173,483
Actual return on plan assets 7,393,502
Employer contributions 516,586
Benefits paid (1,016,967)
------------
Fair value of plan assets at end of year 44,066,604
------------
Funded status 20,652,830
Unrecognized net actuarial gain (14,260,940)
Unrecognized prior service costs 3,154,344
Unrecognized asset existing at date of
adoption of FAS 87 (2,430,851)
------------
Prepaid benefit cost included in division equity $ 7,115,383
------------
The weighted average assumptions used to develop the net periodic pension
income and net pension asset/liability for the year ended July 31, 1999
were:
1999
Pension income:
Discount rate 7.25%
Expected long-term rate of return on plan assets 10.00%
Rates of increase in salaried compensation levels 4.50%
Plan assets consist principally of common stocks, corporate obligations
and cash equivalents. The Parent's policy is to fund amounts pursuant to
Internal Revenue Code Rules and Regulations.
Salaried employees of the Division participate in a defined benefit
pension plan of the Parent which is overfunded. The MTD Automotive
portion of the net periodic pension income associated with
<PAGE> 10
this plan is immaterial to the Division's financial statements and
accordingly has not been recorded in the accompanying financial
statements.
The Division has two defined contribution plans, principally 401(k)
savings plans, benefiting the union employees. Under the terms of such
plans, eligible employees are allowed to contribute up to 19% of their
base pay. Eligible salaried employees may participate in a Parent
sponsored defined contribution plan. The Parent contributes amounts equal
to 25% of the employees' contribution, up to a maximum 1% of the
employee's pay, subject to statutory limitations. The MTD Automotive
portion of the employer contribution expense related to these Plans is
immaterial to the Division's financial statements and accordingly has not
been recorded in the accompanying financial statements.
The Parent has a tax exempt Health and Welfare Benefits Trust (the
"Trust") to provide sickness, accident, life and other welfare benefits
for employees of the Division.
9. CONTINGENCIES
Various claims arising in the ordinary course of business are pending
against the Division. In the opinion of management, none of the matters
will have a material adverse effect on the consolidated financial
position, results of operations or cash flows of the Division.
10. SUBSEQUENT EVENT
Pursuant to an agreement dated June 21, 1999, MTD PRODUCTS INC sold
substantially all of the assets of the Division to Shiloh Industries,
Inc. as of November 1, 1999.
<PAGE> 11
(b) Pro Forma Financial Information.
UNAUDITED PRO FORMA COMBINED CONDENSED STATEMENT OF INCOME FOR THE NINE
MONTHS ENDED JULY 31, 1999
(Dollars in Thousands)
<TABLE>
<CAPTION>
Pro Forma
Adjustments Pro Forma
Shiloh MTD for the for the
Industries, Inc. Automotive(f) Acquisition Acquisition
---------------- ------------- ----------- -----------
<S> <C> <C> <C> <C>
Revenues $ 255,035 $ 146,143 $ (4,027) (a) $ 397,151
Cost of sales 211,209 143,702 (4,184) (b) 339,272
(7,428) [c]
(4,027) (a)
------------ ------------ --------------- ---------
Gross profit 43,826 2,441 11,612 57,879
Selling, general and administrative expenses 22,522 6,114 (706) (b) 27,930
------------ ------------ --------------- ---------
Operating income (loss) 21,304 (3,673) 12,318 29,949
Interest expense 5,550 15 1,320 (d) 6,885
-
Interest income 90 - 90
Minority interest 421 - 421
Other income (expense), net 150 - 150
------------ ------------ --------------- ---------
Income (loss) from continuing operations before taxes 16,415 (3,688) 10,998 23,725
Provision (benefit) for income taxes 6,238 (1,420) 4,179 8,997
------------ ------------ --------------- ---------
Income (loss) from continuing operations $ 10,177 $ (2,268) $ 6,819 $ 14,728
============ ============ =============== =========
Basic earnings per share:
Income from continuing operations $ 0.78 $ 1.05
Weighted average number of common shares (e) 13,080,563 13,973,420
Diluted earnings per share:
Income from continuing operations $ 0.78 $ 1.05
Weighted average number of common shares (e) 13,086,863 13,979,720
</TABLE>
The accompanying footnotes to the Unaudited Pro Forma Combined Condensed
Statement of Income are an integral part of these financial statements.
(a) Reflects the elimination of intercompany purchases by MTD Automotive
from Shiloh.
(b) Represents the decrease in compensation and benefit expenses related to
MTD Automotive work force reductions of 167 employees completed in June
1999, as negotiated in conjunction with the sale/purchase agreement.
(c) Reflects the reduction in depreciation and amortization resulting from
recording MTD Automotive's property, plant and equipment at fair value.
(d) Reflects interest on borrowings of $21.5 million under the credit
agreement at an assumed rate of interest of 8.1875% per annum to fund
the cash portion of the purchase price and related fees of the
acquisition.
(e) In accordance with FAS 128, does not Include 535,714 common shares,
all or a portion of which are contingently returnable by seller if
certain performance standards are not met in the fiscal 2000 year.
However, should MTD Automotive attain its fiscal 2000 performance
standards, all 1,428,571 common shares would remain outstanding and
accordingly, the basic and fully diluted earnings per share would both
be $1.02 with 14,609,124 and 14,516,434 shares outstanding.
(f) MTD Automotive results of operations are for the nine months ended
April 30,1999.
<PAGE> 12
UNAUDITED PRO FORMA COMBINED CONDENSED STATEMENT OF INCOME FOR THE
YEAR ENDED OCTOBER 31, 1998
(Dollars in Thousands)
<TABLE>
<CAPTION>
Pro Forma
Adjustments Pro Forma
Shiloh MTD for the for the
Industries, Inc. Automotive Acquisition Acquisition
---------------- ---------- ----------- -----------
<S> <C> <C> <C> <C>
Revenues $ 299,350 $ 173,771 $ (4,581) (a) $ 468,540
Cost of sales 242,500 173,591 (5,557) (b) 398,360
(7,593) [c]
(4,581) (a)
--------- --------- -------- ---------
Gross profit 56,850 180 13,150 70,180
Selling, general and administrative expenses 26,832 8,022 (1,004) (b) 33,850
--------- --------- -------- ---------
Operating income (loss) 30,018 (7,842) 14,154 36,330
Interest expense 5,303 67 1,760 (d) 7,130
Interest income 174 - 174
Minority interest 342 - 342
Other income (expense), net (16) - (16)
--------- --------- -------- ---------
Income (loss) from continuing operations before taxes 25,215 (7,909) 12,394 29,700
Provision (benefit) for income taxes 9,673 (3,045) 4,755 11,383
--------- --------- -------- ---------
Income (loss) from continuing operations $ 15,542 $ (4,864) $ 7,639 $ 18,317
========= ========= ======== =========
Basic earnings per share:
Income from continuing operations $ 1.19 $ 1.31
Weighted average number of common shares (e) 13,060,794 13,953,651
Diluted earnings per share:
Income from continuing operations $ 1.19 $ 1.31
Weighted average number of common shares (e) 13,103,144 13,996,001
</TABLE>
The accompanying Footnotes to the Unaudited Pro Forma Combined Condensed
Statement of Income are an integral part of these financial statements.
(a) Reflects the elimination of intercompany purchases by MTD Automotive
from Shiloh.
(b) Represents the decrease in compensation and benefit expenses related to
MTD Automotive work force reductions of 167 employees completed in June
1999, as negotiated in conjunction with the sale/purchase agreement.
(c) Reflects the reduction in depreciation and amortization resulting from
recording MTD Automotive's property, plant and equipment at fair
value.
(d) Reflects interest on borrowings of $21.5 million under the credit
agreement at an assumed rate of interest of 8.1875% to fund the cash
portion of the purchase price and related fees of the acquisition.
(e) In accordance with FAS 128, does not Include 535,714 common shares all
or a portion of which are contingently returnable by seller if certain
performance standards are not met in the fiscal 2000 year. However,
should MTD Automotive attain its fiscal 2000 performance standards, all
1,428,571 common shares would remain outstanding and accordingly, the
basic and fully diluted earnings per share would both be $1.26 with
14,489,365 and 14,531,715 shares outstanding, respectively.
<PAGE> 13
UNAUDITED PRO FORMA COMBINED CONDENSED BALANCE SHEET AT JULY 31, 1999
(All Dollars in Thousands)
<TABLE>
<CAPTION>
Pro Forma
Pro Forma for the
Adjustments Offering and
Shiloh MTD for the Pending Pending
Industries, Inc. Automotive Acquisition Acquisition
---------------- ---------- ----------- -----------
<S> <C> <C> <C> <C>
Assets:
Cash $ 5,956 $ 38 $ (38) (a) $ 5,956
Accounts receivable 61,276 20,775 82,051
Inventory 48,156 27,788 75,944
Deferred income taxes 1,290 - (8,236) (a) 0
6,946 (a)
Prepaid expenses and other current assets 5,001 192 5,193
--------- -------- --------- ---------
Total current assets 121,679 48,793 (1,328) 169,144
Property, plant and equipment, net 260,950 36,237 (36,237) (a) 260,950
Goodwill 11,750 - (6,946) (a) 4,804
Other assets 5,887 51 (51) (a) 5,887
--------- -------- --------- ---------
Total assets $ 400,266 $ 85,081 $ (44,562) $ 440,785
========= ======== ========= =========
Liabilities and Equity
Accounts payable $ 35,778 $ 4,669 $ 40,447
Current portion of long-term debt - 50 50
Short-term note payable 20,549 20,549
Deferred tax liability - 6,946 (a) 6,946
Accrued and other current liabilities 20,223 5,941 26,164
--------- -------- --------- ---------
Total current liabilities 76,550 10,660 6,946 94,156
Long-term debt 134,810 - 21,500 (a) 156,310
Senior subordinated debt - -
Deferred income taxes 14,563 - (8,236) (a) 6,327
Other liabilities 1,347 - 1,347
--------- -------- --------- ---------
Total liabilities 227,270 10,660 20,210 -
--------- -------- --------- ---------
Equity
Common stock 131 14 (a) 145
Paid-in capital 39,400 9,635 (a) 49,035
Retained earnings 133,465 133,465
Division equity - 74,421 (74,421) (a) -
--------- -------- --------- ---------
Total equity 172,996 74,421 (64,772) 182,645
--------- -------- --------- ---------
Total liabilities and equity $ 400,266 $ 85,081 $ (44,562) $ 440,785
========= ======== ========= =========
</TABLE>
The accompanying footnotes to the Unaudited Combined Condensed Balance Sheet are
an integral part of these financial statements.
(a) Opening balance sheet adjustments and allocation of $31.1 million purchase
price which consists of $20.0 million in cash, $9.6 million in stock (based on
an average closing price of $10.80 for several days immediately preceding and
after June 21, 1999) and $1.5 million of acquisition costs.
The Company issued a total of 1,428,571 common shares to MTD Products
Inc at closing on November 1, 1999. Of these shares, a maximum of 535,714
shares are contingently returnable to the Company, and of the cash paid, a
maximum of $7,500,000 is contingently returnable to the Company should MTD
Automotive not meet certain agreed upon performance standards. The 535,714
contingently returnable shares have been reflected in the proformas only at par
with an offsetting entry to paid-in-capital. At this time management believes
that it is probable that MTD Automotive will attain its performance standard and
accordingly, for purposes of the proforma financial statements, has not
reflected the contingent returnable cash as an asset. When the purchase price
contingency is resolved, the additional purchase price will be allocated to
either negative goodwill or fixed assets which will depend, in part, on the
market value of the Company's stock at that time. Accordingly, since the 535,714
common shares were not considered issued in the pro forma balance sheet, the
Company has reduced fixed assets to zero and has recorded $6.9 million of
negative goodwill. Should MTD Automotive attain its performance standard and
assuming a common stock price of $10.625 at January 13, 2000, the negative
goodwill would be adjusted to $1.4 million.
(c) Exhibits.
2.1 Closing Agreement, dated as of October 31, 1999, by and among Shiloh
Industries, Inc., Shiloh Automotive, Inc. and MTD Products Inc
(incorporated herein by reference to Exhibit 2.1 to the Registrant's
Form 8-K filed with the Commission on November 15, 1999).
99.1 Press Release, dated November 1, 1999 (incorporated herein by reference
to Exhibit 2.1 to the Registrant's Form 8-K filed with the Commission
on November 15, 1999).
<PAGE> 14
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.
SHILOH INDUSTRIES, INC.
Dated: January 14, 2000
By: /s/ Craig A. Stacy
------------------------------------
Name: Craig A. Stacy
Title: Chief Financial Officer
<PAGE> 15
EXHIBIT INDEX
-------------
Exhibit
No.
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2.1 Closing Agreement, dated as of October 31, 1999, by and among Shiloh
Industries, Inc., Shiloh Automotive, Inc. and MTD Products Inc
(incorporated herein by reference to Exhibit 2.1 to the Registrant's
Form 8-K filed with the Commission on November 15, 1999).
99.1 Press Release, dated November 1, 1999 (incorporated herein by
reference to Exhibit 2.1 to the Registrant's Form 8-K filed with the
Commission on November 15, 1999).
