May 20, 1996
Securities and Exchange Commission
450 Fifth Street, N.W.
Washington, D.C. 20549
RE: Atchison Casting Corporation
Form 8-K/A
Ladies and Gentlemen:
On behalf of Atchison Casting Corporation (the "Company"), enclosed please
find for filing under the Securities Exchange Act of 1934 a Current Report on
Form 8-K/A. Pursuant to a telephone conversation with Mr. Kurt Hohl of the
SEC, the Company is filing, under Item 7(a), audited financial statements of
The G & C Foundry Company as of March 10, 1996 and for the period from March
1, 1995 to March 10, 1996 in response to the requirements of Reg. 210-3.05(b)
of Article 3 of Regulation S-X.
Sincerely,
Kevin T. McDermed
V.P. & Chief Financial Officer
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) March 11, 1996
ATCHISON CASTING CORPORATION
(Exact name of registrant as specified in its charter)
Kansas 0-22368 48-1156578
(State or other jurisdiction (Commission (IRS Employer
of incorporation) File Number) Identification No.)
400 South Fourth Street, Atchison, Kansas 66002
(Address of principal executive offices) (Zip Code)
Registrants telephone number, including area code (913) 367-2121
NONE
(Former name or former address, if changed since last report)
Item 2 Acquisition or Disposition of Assets
On March 11, 1996, the registrant purchased all of the outstanding capital
stock, consisting of 3,882 shares of Common Stock, of The G&C Foundry Company,
an Ohio corporation ("G&C"), from the stockholders of G&C for $9,620,257 and
the assumption of $2,000,000 of change of control benefits that become
payable in three equal annual payments commencing on June 15, 1996. In
addition, G&C had $524,348 of other outstanding indebtedness at closing.
G&C, located in Sandusky, Ohio, is a foundry that produces gray and ductile
iron castings, principally used in hydraulic applications, which the
registrant intends to continue. The purchase price was determined pursuant
to arm's length negotiations between the parties.
The funds used for this acquisition were secured by bank loans extended by
Harris Trust and Savings Bank, as Agent, under the Credit Agreement dated
July 29, 1994, as amended by the First Amendment thereto dated as of March 8,
1996, among the registrant and the Banks party thereto.
Item 7. Financial Statements and Exhibits
(a) Financial Statements of Businesses Acquired.
(1) Audited Financial Statements of The G&C Foundry Company as
of March 10, 1996 and for the period from March 1, 1995 to
March 10, 1996 (attached as Appendix A hereto).
(b) Pro Forma Financial Information
(1) Pro Forma Combined Financial Information consisting of a pro
forma combined balance sheet as of December 31, 1995 and pro
forma combined statements of income for the six-month period
ended December 31, 1995 and the year ended June 30, 1995
(attached as Appendix B hereto).
(c) Exhibits
(2) Stock Purchase Agreement dated as of February 28, 1996 by and
among the stockholders of G&C, the Stockholders'
Representative and the registrant (incorporated by reference
to Exhibit 2 of the Company's Current Report on Form 8-K
dated March 25, 1996).
(4.1) First Amendment dated as of March 8, 1996 to the Credit
Agreement dated July 29, 1994, among the registrant, the
Banks party thereto and Harris Trust and Savings Bank, as
Agent (incorporated by reference to Exhibit 4.1 of the
Company's Current Report on Form 8-K dated March 25, 1996).
(4.2) First Amendment dated as of March 8, 1996 to the Note
Purchase Agreement dated July 29, 1994, between the
registrant and Teachers Insurance and Annuity Association
of America (incorporated by reference to Exhibit 4.2 of
the Company's Current Report on Form 8-K dated March 25,
1996).
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.
Atchison Casting Corporation
(Registrant)
/s/ Kevin T. McDermed
May 20, 1996 Kevin T. McDermed, Vice President,
Chief Financial Officer, Treasurer
and Secretary
APPENDIX A
Financial Statements of
The G&C Foundry Company
THE G & C FOUNDRY COMPANY
Financial Statements for the Period
Ended March 10, 1996
THE G & C FOUNDRY COMPANY
TABLE OF CONTENTS
Page
INDEPENDENT AUDITORS REPORT ON FINANCIAL STATEMENTS 1
FINANCIAL STATEMENTS FOR THE PERIOD FROM FEBRUARY 27, 1995
TO MARCH 10, 1996:
Balance Sheet 2
Statement of Operations 3
Statement of Stockholders Equity 4
Statement of Cash Flows 5
Notes to Financial Statements 6-11
INDEPENDENT AUDITORS REPORT
To the Board of Directors and Stockholders
of The G & C Foundry Company
Sandusky, Ohio
We have audited the accompanying balance sheet of The G & C Foundry Company
(the Company) as of March 10, 1996 (close of business concurrent with the
sale of the Company) and the related statements of operations, stockholders
equity and cash flows for the period from February 27, 1995 to March 10, 1996.
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 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.
In our opinion, such financial statements present fairly, in all material
respects, the financial position of the Company at March 10, 1996, and the
results of its operations and its cash flows for the period from February 27,
1995 to March 10, 1996 in conformity with generally accepted accounting
principles.
As described in Note 9, the Company has been sold as of the close of business
on March 10, 1996. The accompanying financial statements do not include any
adjustments to the carrying basis of assets or liabilities which might be
required as a result of the application of purchase accounting by the buyer.
/s/Deloitte & Touche LLP
April 19, 1996
Kansas City, Missouri
THE G & C FOUNDRY COMPANY
BALANCE SHEET
MARCH 10, 1996
ASSETS
<TABLE>
<S> <C>
CURRENT ASSETS:
Cash $ 1,027,889
Short-term investments 750,000
Accounts receivable 1,790,772
Inventories 1,356,568
Prepaid expenses 107,308
Deferred income taxes 308,332
Total current assets 5,340,869
Property, plant and equipment, net 3,260,046
Other assets 99,355
TOTAL $ 8,700,270
LIABILITIES AND STOCKHOLDERS EQUITY
CURRENT LIABILITIES:
Accounts payable $ 465,163
Accrued liabilities 702,799
Current maturities of long-term obligations 781,016
Total current liabilities 1,948,978
LONG-TERM OBLIGATIONS 1,743,332
ADDITIONAL PENSION LIABILITY 110,549
DEFERRED INCOME TAXES 68,152
STOCKHOLDERS EQUITY:
Common stock - $100 par value, 6,000 shares
authorized,3,882 shares issued and outstanding 388,200
Additional paid in capital 13,250
Deferred pension cost in excess of unrecognized
prior service cost, net of related income tax effect (10,529)
Retained earnings 4,438,338
Total stockholders equity 4,829,259
TOTAL $ 8,700,270
</TABLE>
THE G & C FOUNDRY COMPANY
STATEMENT OF OPERATIONS
FOR THE PERIOD FROM FEBRUARY 27, 1995 TO MARCH 10, 1996
<TABLE>
<S> <C>
NET SALES $ 14,499,859
COST OF GOODS SOLD 10,592,608
GROSS PROFIT 3,907,251
SELLING, GENERAL AND ADMINISTRATIVE 2,122,889
OPERATING INCOME 1,784,362
OTHER INCOME (EXPENSES):
Interest expense (20,084)
Other miscellaneous income 121,917
Change of control benefit expense (2,000,000)
(2,101,833)
LOSS BEFORE INCOME TAXES (113,805)
INCOME TAX (BENEFIT) EXPENSE:
Current 749,223
Deferred (776,504)
(27,281)
NET LOSS $ (86,524)
</TABLE>
See notes to financial statements.
STATEMENT OF STOCKHOLDERS EQUITY
FOR THE PERIOD FROM FEBRUARY 27, 1995 TO MARCH 10, 1996
Minimum
Additional Pension Unrealized
Common Paid-In Retained Liability Loss On
Stock Capital Earnings Adjustment Market Total
<TABLE>
<S> <C> <C> <C> <C> <C> <C>
BALANCE, FEBRUARY
27,1995 $388,200 $13,250 $4,680,142 $(6,660) $(11,452) $5,063,480
Unrealized gain
on market 11,452 11,452
Minimum pension
liability
adjustment (3,869) (3,869)
Distributions to
stockholders (155,280) (155,280)
Net loss (86,524) (86,524)
BALANCE, MARCH
10, 1996 $388,200 $13,250 $4,438,338 $(10,529) $ - $4,829,259
</TABLE>
See notes to financial statements.
THE G & C FOUNDRY COMPANY
STATEMENT OF CASH FLOWS
FOR THE PERIOD FEBRUARY 27, 1995 TO MARCH 10, 1996
<TABLE>
<S> <C>
CASH FLOWS FROM OPERATING ACTIVITIES:
Net loss $ (86,524)
Adjustments to reconcile net loss to net
cash from operating activities:
Depreciation 344,509
Gain on disposal of capital assets (1,500)
Accrual of change of control benefit 2,000,000
Deferred income taxes (776,504)
Changes in assets and liabilities:
Accounts receivable 544,539
Inventories (485,716)
Other current assets (205,441)
Accounts payable (41,551)
Accrued liabilities (192,775)
Other 6,532
Cash from operating activities 1,105,569
CASH FLOWS FROM INVESTING ACTIVITIES:
Sale of property, plant and equipment 85,363
Purchase of property, plant and equipment (792,860)
Cash used in investing activities (707,497)
CASH FLOWS FROM FINANCING ACTIVITIES:
Payments on long-term obligations (90,099)
Proceeds from borrowings 300,000
Distributions to stockholders (155,280)
Cash provided by financing activities 54,621
NET INCREASE IN CASH AND CASH EQUIVALENTS 452,693
CASH AND CASH EQUIVALENTS, Beginning of period 575,196
CASH AND CASH EQUIVALENTS, End of period $ 1,027,889
CASH PAID DURING THE YEAR FOR:
Interest $ 20,205
Income taxes $ 846,143
</TABLE>
See notes to financial statements.
THE G & C FOUNDRY COMPANY
NOTES TO FINANCIAL STATEMENTS
FOR THE PERIOD FROM FEBRUARY 27, 1995 TO MARCH 10, 1996
1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICES
Nature of Operations - The G & C Foundry Company (the Company) is in the
business of manufacturing and selling medium sized gray and ductile iron
engineered castings. The Company designs, builds, markets and sells the
iron castings, primarily in the United States.
Accounting Period - The Company's fiscal year end is June 30. For
purposes of the proposed business combination (see Note 9), a period from
February 27, 1995 to March 10, 1996 was selected for financial reporting
purposes.
Use of 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 reported period. Actual results could differ from
those estimates.
Statement of Cash Flows - For purposes of cash flow reporting, cash and
cash equivalents include cash on hand, amounts due from banks and
temporary investments with maturities of 90 days or less at the date of
purchase.
Inventories - Inventories are valued at the lower of cost, determined by
the first in, first out (FIFO) method or market.
Property, Plant and Equipment - Major renewals and betterments are
capitalized while replacements, maintenance and repairs which do not
improve or extend life of the respective assets are charged to expense as
incurred. Upon sale or retirement of assets, the cost and related
accumulated depreciation applicable to such assets are removed from the
accounts and any resulting gain or loss is reflected in operations.
Property, Plant and Equipment is carried at cost less accumulated
depreciation. Plant and Equipment is depreciated over the estimated
useful lives of the asset using the straight-line method.
Pensions - There is one pension plan for hourly employees and one for
salaried employees. Charges to operations are based on information
provided by the actuaries, and are deemed to be the appropriate expense
provision for financial statement purposes. Both plans use group annuity
contracts to provide retirement benefits.
Income Taxes - Deferred income taxes are provided on temporary differences
between the financial statements and tax basis of the Company's assets and
liabilities in accordance with the liability method.
2. INVENTORIES
<TABLE>
<S> <C>
Raw materials $ 139,673
Finished goods 1,059,197
Manufacturing supplies 157,698
Total inventory $ 1,356,568
3. PROPERTY, PLANT AND EQUIPMENT
</TABLE>
<TABLE>
Lives
(In Years) 1996
<S> <C> <C>
Land $ 25,430
Land improvements 15 37,891
Buildings 40 1,187,114
Machinery and equipment 15 5,741,774
Equipment - cleaning room 15 271,875
Furniture and fixtures 7 273,666
Vehicles 3 186,811
Equipment install 115,806
Total property, plant and equipment 7,840,369
Less accumulated depreciation 4,580,323
</TABLE>
Depreciation expense was $344,509 for the period ended March 10, 1996.
4. ACCRUED LIABILITIES
<TABLE>
<S> <C>
Vacation $ 127,425
Employee health care 117,505
Payroll 114,686
Workers compensation 86,124
Other 257,059
Total accrued liabilities $ 702,799
</TABLE>
5. LONG-TERM OBLIGATIONS
<TABLE>
<S> <C>
8.0%, Notes payable to financial institution,
due in monthly installments (including interest)
of $12,407, maturing December, 1997, collateralized
by land, building and equipment $ 119,174
5.0%, Notes payable to a government agency, due
in monthly installments (including interest) of
$6,173, maturing June, 1999, collateralized by land,
building and equipment 105,174
6.5%, Notes payable to a government agency, due
in monthly installments (including interest) of
$1,625, maturing December, 2005, collateralized by
land, building and equipment 300,000
Obligations to former stockholders, due in annual
installments of $666,666, through July 1998 2,000,000
2,524,348
Less current maturities 781,016
Total long-term obligations $ 1,743,332
</TABLE>
Scheduled maturities:
<TABLE>
<S> <C>
1997 $ 781,016
1998 805,528
1999 728,418
2000 39,520
2001 30,307
Thereafter 139,559
Total scheduled maturities $ 2,524,348
</TABLE>
6. PENSIONS
The Company sponsors separate defined benefit pension plans to cover
substantially all hourly and salaried employees. Employees are eligible to
participate after one year of credited service with vesting after five years.
Benefits for hourly employees are determined based on years of credited
service multiplied by a benefit formula. Benefits for salaried employees
are determined based on years of credited service and employee earnings.
Pension expense is presented below:
<TABLE>
Hourly Salaried
<S> <C> <C>
Service cost $ 18,469 $ 44,761
Interest costs 20,079 46,157
Return on plan assets (12,383) (39,678)
Amortization of other components 7,500 8,500
$ 33,665 $ 59,740
</TABLE>
The pension plans' assets are invested in the Guaranteed Stable Fund of The
Mutual Life Insurance Company of New York and portfolios of stocks, bonds
and mutual funds managed by Greenleaf Capital Management. A comparison of
projected benefit obligation and plan assets at fair value as of June 30,
1995 is presented below:
<TABLE>
Hourly Salaried
(Accumulated (Assets Exceed
Benefits Accumulated
Exceed Assets) Benefits)
<S> <C> <C>
Actuarial present value of:
Vested benefit obligation $ 249,873 $ 374,800
Accumulated benefit obligation $ 276,236 $ 402,600
Projected benefit obligation $ 289,402 $ 739,700
Plan assets at fair value 176,895 566,800
Projected benefit obligation in excess of
plan assets (112,507) (172,900)
Unrecognized prior service costs 23,400 176,100
Unrecognized net obligation 69,600 (46,800)
Unrecognized net loss 30,715 53,400
Additional liability (110,549) -
Prepaid (accrued) pension liability $ (99,341) $ 9,800
The actuarial valuation was prepared assuming:
Discount rate 7.0 % 7.0 %
Expected return on plan assets 7.0 % 7.0 %
Rate of increase in compensation levels N/A 4.0 %
</TABLE>
In accordance with SFAS No. 87, the Company has recorded an additional
pension liability for under funded plans of $110,549 at June 30, 1995,
representing the excess of unfunded accumulated benefit obligations over
previously recorded pension cost liabilities. A corresponding amount is
recognized as an intangible asset except to the extent that these additional
liabilities exceed related unrecognized prior service cost and net transition
obligation, in which case the increase in liabilities is charged directly to
stockholders' equity. For 1996, $17,549 of the excess minimum pension
liability resulted in a charge to equity of $3,869, net of income taxes.
7. INCOME TAXES
Deferred tax assets and liabilities which are included in the accompanying
balance sheet are comprised of the following:
<TABLE>
<S> <C>
Deferred tax assets:
Accrued employee health care $ 47,002
Other 19,407
Change in control payment 266,666
Prepaid pension (24,743)
$ 308,332
Deferred tax liabilities:
Depreciation $ 481,630
Deferred gain 119,856
Change in control payment (533,334)
$ 68,152
</TABLE>
The Company's effective tax rate was 35% for the period consisting of federal
income tax of 34% and local taxes of 1%.
8. FAIR VALUES OF FINANCIAL INSTRUMENTS
The following disclosure of the estimated fair value instruments is made in
accordance with the requirements of SFAS No. 107, Disclosures About Fair
Value of Financial Instruments. The estimated fair value amounts have been
determined by the Company using available market information and appropriate
valuation methodologies. However, considerable judgment is necessarily
required in interpreting market data to develop estimates of fair value.
Accordingly, the estimates presented herein are not necessarily indicative
of the amounts that the Company could realize in a current market exchange.
The use of different market assumptions and/or estimation methodologies
may have a material effect on the estimated fair value amounts.
Cash, Short-Term Investments, Accounts Receivable and Accounts Payable - The
carrying amounts of these items are a reasonable estimate of their fair value.
Notes Payable and Current Maturities of Long-Term Debt - Based on the
borrowing rates currently available to the Company for the loans with similar
terms and maturities, the fair value approximates carrying value.
9. SUBSEQUENT EVENT
On March 11, 1996, the stockholders of the Company sold all of the outstanding
capital stock, consisting of 3,882 shares of common stock to Atchison Casting
Corporation. An employment agreement between the Company and four of its
employees and a change of control agreement with one of its employees provides
for certain payments in the event of a change of control of the Company. As
a result of the sale, the Company has recorded such change in control benefits
in the amount of $2,000,000 in the accompanying financial statements. Such
financial statements do not include any adjustments to the carrying basis of
assets or liabilities which might be required as a result of the application
of purchase accounting by the buyer.
APPENDIX B
Pro Forma Combined
Financial Information
ATCHISON CASTING CORPORATION
PRO FORMA COMBINED FINANCIAL STATEMENTS
The following unaudited pro forma combined financial statements are based on
the historical financial statements of Atchison Casting Corporation (the
"Company"). These statements also show the unaudited pro forma information
to give effect to the acquisition of The G&C Foundry Company ("G&C") which
was acquired as of March 11, 1996. This acquisition was accounted for as a
purchase. The accompanying unaudited pro forma combined balance sheet
reflects this acquisition as if it occurred at December 31, 1995 and the
unaudited pro forma combined statement of operations for the six-month period
ended December 31, 1995 and for the year ended June 30, 1995 reflect the
acquisition as if it occurred as of July 1, 1994. The unaudited pro forma
combined financial statements are not necessarily indicative of the results
of future operations.
ATCHISON CASTING CORPORATION
PRO FORMA COMBINED BALANCE SHEET
DECEMBER 31, 1995
(Unaudited)
(thousands)
<TABLE>
Atchison Pro Forma
Casting G & C
Corporation Foundry Adjustments Combined
ASSETS
<S> <C> <C> <C> <C>
Current assets:
Cash and cash equivalents $1,188 $1,364 $2,552
Accounts receivable 24,309 1,682 25,991
Insurance receivable 780 -- 780
Inventories 27,200 1,395 28,595
Deferred income taxes 2,933 -- $267 (3) 3,200
Other current assets 1,954 77 2,031
Total current assets 58,364 4,518 267 63,149
Property, plant and equipment,net 64,277 3,315 67,592
Intangible assets, net 14,382 -- 5,317 (1) 19,699
Deferred charges, net 244 -- 244
Other assets 2,074 140 2,214
Total $139,341 $7,973 $5,584 $152,898
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Accounts payable $10,863 $472 $119 (1) $11,454
Accrued expenses 17,949 570 18,519
Current portion of long-term debt - 92 (62)(1) 30
Total current liabilities 28,812 1,134 57 30,003
Long-term obligations 35,816 147 12,087 (1)(2)48,050
Deferred income taxes 6,610 564 (533)(3) 6,641
Minority interest in subsidiaries 583 -- 583
Other long-term obligations 1,176 111 1,287
Excess of acquired net assets
over cost 1,036 -- 1,036
Post-retirement obligation
other than pension 5,078 -- 5,078
Stockholders' equity:
Common stock 55 388 (388)(1) 55
Additional paid-in capital 41,966 13 (13)(1) 41,966
Minimum pension liability adjust (375 (10) (385)
Accumulated foreign currency
translation adjustments 21 -- 21
Accumulated surplus (defecit) 18,563 5,626 (5,626)(1) 18,563
Total stockholders' equity 60,230 6,017 (6,027) 60,220
Total $139,341 $7,973 $5,584 $152,898
</TABLE>
See Notes to Pro Forma Combined Financial Statements.
ATCHISON CASTING CORPORATION
PRO FORMA COMBINED STATEMENT OF OPERATIONS
For the Six Months Ended December 31, 1995
(Unaudited)
(thousands)
Atchison Pro Forma
Casting G & C
Corporation Foundry Adjustments Combined
<TABLE>
<S> <C> <C> <C> <C>
Net sales $77,670 $6,131 $83,801
Cost of goods sold 67,069 4,516 71,585
Gross profit 10,601 1,615 0 12,216
Operating expenses:
Selling, general and 7,063 1,023 8,086
administrative
Amortization of intangibles 744 106 (4) 850
Other income (10,281) (57) (10,338)
Total operating expenses (2,474) 966 106 (1,402)
Operating income 13,075 649 (106) 13,618
Interest expense 1,272 9 528 (5) 1,809
Minority interest in net income
of subsidiaries 73 -- 73
Income before taxes 11,730 640 (634) 11,736
Income taxes 4,553 222 (220) (6) 4,555
Net income $7,177 $418 ($414) $7,181
Net income per common and
equivalent shares $1.30 $1.30
Weighted average number of
common and equivalent
shares outstanding: 5,515,374 5,515,374
</TABLE>
See Notes to Pro Forma Combined Financial Statements.
ATCHISON CASTING CORPORATION
PRO FORMA COMBINED STATEMENT OF OPERATIONS
For the Year Ended June 30, 1995
(Unaudited)
(thousands)
Atchison Pro Forma
Casting G & C
Corporation Foundry Adjustments Combined
<TABLE>
<S> <C> <C> <C> <C>
Net sales $141,579 $14,979 $156,558
Cost of goods sold 115,458 10,903 126,361
Gross profit 26,121 4,076 30,197
Operating expenses:
Selling, general and 13,058 2,006 15,064
administrative
Amortization of intangibles 1,392 213 (4) 1,605
Other income (6,370) (69) (6,439)
Total operating expenses 8,080 1,937 213 10,230
Operating income 18,041 2,139 (213) 19,967
Interest expense 2,326 22 996 (5) 3,344
Minority interest in net income of
subsidiaries 280 -- 280
Income before taxes 15,435 2,117 (1,209) 16,343
Income taxes 5,971 733 (370)(6) 6,334
Net income $9,464 $1,384 ($839) $10,009
Net income per common and
equivalent shares $1.73 $1.83
Weighted average number of
common and equivalent
shares outstanding 5,477,881 5,477,881
See Notes to Pro Forma Combined Financial Statements.
</TABLE>
ATCHISON CASTING CORPORATION
NOTES TO PRO FORMA COMBINED FINANCIAL STATEMENTS
(1) To reflect the purchase of The G & C Foundry Company. The acquisition
has been accounted for under the purchase method and, accordingly,
the purchase price has been allocated to the assets acquired and the
liabilities assumed based on their fair values. The excess of the
purchase price above the fair value of the assets, approximately
$5,317,000, has been assigned to goodwill and is being amortized over
25 years.
(2) To record additional borrowings made to fund the acquisition.
(3) To record a deferred tax asset relating to the assumption of $2,000,000
of change of control benefits that become payable over two years.
(4) To record amortization of the Excess of Cost Over Net Assets Acquired
over 25 years.
(5) To record interest expense on the borrowings used to fund the
acquisition, net of a reduction in interest expense to reflect the
replacement of a portion of The G & C Foundry Company debt with the
borrowings under the Company's credit facility.
(6) To adjust income taxes as a result of the effects of the pro forma
adjustments on income before taxes and to reflect income taxes on the
pro forma combined income before taxes at the Company's combined
federal and state statutory rates.
EXHIBIT INDEX
Exhibit
Number Exhibit
2 Stock Purchase Agreement dated as
of February 28, 1996 by and among
the stockholders of G&C, the
Stockholders' Representative and the
registrant (incorporated by reference to
Exhibit 2 of the Company's Current
Report on Form 8-K dated March 25, 1996.
4.1 First Amendment dated as of March 8,
1996 to the Credit Agreement dated
July 29, 1994, among the registrant, the
Banks party thereto and Harris Trust and
Savings Bank, as Agent (incorporated by
reference to Exhibit 4.1 of the Company's
Current Report on Form 8-K dated
March 25, 1996).
4.2 First Amendment dated as of March 8,
1996 to the Note Purchase Agreement
dated July 29, 1994, between the registrant
and Teachers Insurance and Annuity
Association of America (incorporated by
reference to Exhibit 4.2 of the Company's
Current Report on Form 8-K dated
March 25, 1996).
