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SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 8-K
Current Report
Pursuant to Section 13 or 15(d) of the
Securities Exchange Act of 1934
Date of Report (date of earliest event reported) June 17, 1998
KELLSTROM INDUSTRIES, INC.
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(Exact name of registrant as specified in its charter)
Delaware
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(State of other jurisdiction of incorporation)
0-23764 13-3753725
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(Commission (I.R.S. Employer
File Number) Identification No.)
14000 N.W. 4th Street
Sunrise, Florida 33325
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(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code (954) 845-0427
N/A
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(Former name or former address, if changed since last report)
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Item 2. Acquisition or Disposition of Assets.
On June 17, 1998, Kellstrom Industries, Inc. (the "Registrant")
completed its acquisition of all of the outstanding capital stock (the
"Acquisition") of Aerocar Aviation Corp. and Aerocar Parts, Inc. (collectively,
"Aerocar"). The purchase price was approximately $44 million in cash, warrants
to purchase an aggregate of 250,000 shares of common stock, par value $0.001 per
share, of the Registrant (the "Common Stock") exercisable at $26 per share, plus
an additional $5 million payable within a two-year period after closing either
in cash, or at the option of the Company, in shares of Common Stock having an
equivalent value as of the date of issuance. The Registrant funded the $44
million cash portion of the Acquisition from a portion of the net proceeds of
the Registrant's public offerings of debt and equity securities which public
offerings closed on June 17, 1998. The Registrant is obligated to pay a fee to
Helix Capital Services, L.L.C. for financial and mergers and acquisitions
services provided in connection with the Acquisition in an amount equal to two
percent (2%) of the consideration paid by the Registrant in the Acquisition.
Aerocar is engaged in the sale and leasing of aircraft engines and
aircraft engine parts to major airlines and regional carriers. Aerocar's primary
focus is on the Pratt & Whitney JT8D engine.
A copy of the press release issued by the Registrant on June 17, 1998
announcing the Acquisition is attached hereto as Exhibit 99.1, and is
incorporated herein by reference.
Item 7. Financial Statements, PRO FORMA Financial Information and Exhibits.
Incorporated herein by reference to the Registrant's Current Report on
Form 8-K, which was filed with the Commission on May 18, 1998, are the
following financial statements and PRO FORMA financial information:
(a) COMBINED FINANCIAL STATEMENTS OF AEROCAR
Independent Auditors' Report
Combined Balance Sheet as of December 31, 1997
Combined Statement of Earnings for the Year
Ended December 31, 1997
Combined Statement of Shareholders' Equity for the Year
Ended December 31, 1997
Combined Statement of Cash Flows for the Year Ended
December 31, 1997
Notes to Combined Financial Statements
Condensed Combined Balance Sheets as of March 31, 1998 and
1997 (Unaudited)
Condensed Combined Statement of Earnings for the Three Months
Ended March 31, 1998 and 1997 (Unaudited)
Condensed Combined Statement of Cash Flows for the Three
Months Ended March 31, 1998 and 1997 (Unaudited)
Notes to Condensed Combined Financial Statements
(b) PRO FORMA FINANCIAL INFORMATION (Unaudited)
Pro Forma Consolidated Combined Statement of Earnings for the
year ended December 31, 1997 (Unaudited)
Pro Forma Consolidated Combined Balance Sheet for the year
ended December 31, 1997 (Unaudited)
Pro Forma Consolidated Combined Statement of Earnings for the
three months ended March 31, 1998 (Unaudited)
Pro Forma Consolidated Combined Statement of Earnings for the
three months ended March 31, 1997 (Unaudited)
(c) Exhibits. The Exhibits to this Form 8-K are listed in the
Exhibit Index and are incorporated by reference herein.
Pursuant to the requirements of the Securities Exchange Act of 1934, as
amended, the Registrant has duly caused this report to be signed on its behalf
by the undersigned hereunto duly authorized.
KELLSTROM INDUSTRIES, INC.
Date: June 26, 1998 By: /s/ Michael W. Wallace
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Michael W. Wallace
Chief Financial Officer
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Exhibit Index
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Exhibit No:
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99.1 Press Release issued by the Registrant on June 17,
1998
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FOR IMMEDIATE RELEASE
KELLSTROM INDUSTRIES COMPLETES ACQUISITION OF
AEROCAR AVIATION CORP.
Sunrise, FL - June 17, 1998 -- Kellstrom Industries, Inc. [NASDAQ: KELL] today
announced that it completed the acquisition of Aerocar Aviation Corp. and
Aerocar Parts Inc., (together "Aerocar"), Kellstrom's largest acquisition to
date. The purchase price was approximately $44 million in cash, warrants to
purchase an aggregate of 250,000 shares of Kellstrom common stock, exercisable
at $26 per share, plus an additional $5 million payable within a two-year period
after closing. Kellstrom funded the cash portion of this acquisition with a
portion of the proceeds of its recent public offerings.
As previously reported, Aerocar is a leading supplier of jet aircraft engines
and whole aircraft and a reseller of aircraft engine parts. For the years ended
December 31, 1995, 1996 and 1997, Aerocar's revenues approximated $15 million,
$22 million and $42 million, respectively. Aerocar's EBITDA (Earnings before
Interest, Tax, Depreciation, and Amortization) for the same years (after
adjustments for shareholder/manager withdrawals, and one-time extraordinary
transactions) was approximately $5.5 million, $9.0 million and $13.3 million,
respectively. Based upon Aerocar's historical performance, this acquisition is
expected to be immediately accretive to Kellstrom's earnings.
Kellstrom Industries, Inc. is a leader in the airborne equipment segments of the
international aviation services after-market. Kellstrom's principal business is
the purchasing, overhauling (through subcontractors), reselling and leasing of
aircraft, engines and engine parts. The Company is also a leading international
after-market reseller of turbo-jet engines and turbo-jet engine parts for
helicopters and large cargo transport aircraft. The Company specializes in
providing engines and parts for large turbo-fan engines manufactured by CFMI,
General Electric, Pratt & Whitney and Rolls Royce. The engine types serviced and
supplied by the Company cover the vast majority of the total world jet engine
supply. The Company is also an approved supplier to an international customer
base including major domestic and international airlines, original equipment
manufacturers and engine overhaul shops.
THE COMPANY, FROM TIME TO TIME, MAY DISCUSS FORWARD-LOOKING INFORMATION. THIS
PRESS RELEASE CONTAINS FORWARD-LOOKING STATEMENTS. THESE FORWARD-LOOKING
STATEMENTS ARE BASED ON MANY ASSUMPTIONS AND FACTORS, AND ARE SUBJECT TO MANY
CONDITIONS, INCLUDING THE COMPANY'S CONTINUING ABILITY TO EFFECTIVELY INTEGRATE
THE ACQUIRED COMPANY, ACQUIRE ADEQUATE INVENTORY AND TO OBTAIN FAVORABLE PRICING
FOR SUCH INVENTORY, THE ABILITY TO ARRANGE FOR THE REPAIR OF AIRCRAFT ENGINES BY
THIRD-PARTY CONTRACTORS PRIOR TO RESALE OR LEASE, COMPETITIVE PRICING FOR THE
COMPANY'S PRODUCTS, CUSTOMER CONCENTRATION, DEMAND FOR THE COMPANY'S PRODUCTS
WHICH DEPENDS UPON THE CONDITION OF THE AIRLINE INDUSTRY, ABILITY TO COLLECT
RECEIVABLES, GOVERNMENT REGULATION, AND THE EFFECTS OF INCREASED INDEBTEDNESS AS
A RESULT OF THE COMPANY'S BUSINESS ACQUISITIONS. EXCEPT FOR THE HISTORICAL
INFORMATION CONTAINED IN THIS RELEASE, ALL FORWARD-LOOKING INFORMATION ARE
ESTIMATES BY THE COMPANY'S MANAGEMENT AND ARE SUBJECT TO VARIOUS RISKS AND
UNCERTAINTIES THAT MAY BE BEYOND THE COMPANY'S CONTROL AND MAY CAUSE RESULTS TO
DIFFER FROM MANAGEMENT'S CURRENT EXPECTATIONS.
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CONTACT: OR KELL'S INVESTOR RELATIONS COUNSEL:
Kellstrom Industries, Inc. The Equity Group Inc.
Zivi R. Nedivi, Pres. & CEO Linda Latman (212) 836-9609
Michael W. Wallace, CFO Bob Goldstein (212) 371-8660
(954) 845-0427
