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SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K
Current Report
Filed pursuant to Section 12, 13, or 15(d) of the
Securities Exchange Act of 1934
Date of Report (Date of earliest event reported): April 3, 1998
OWOSSO CORPORATION
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(Exact name of issuer as specified in charter)
PENNSYLVANIA 0-25066 23-2756709
(State or Other Jurisdiction Commission (I.R.S. Employer
of Incorporation or Organization) file number Identification Number)
The Triad Building, 2200 Renaissance Boulevard, Suite 150,
King of Prussia, PA 19406
(Address of principal executive offices)
(610) 275-4500
(Registrant's telephone number, including area code)
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Item 5. Other Events
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Owosso Corporation (the "Company") has announced that the
Company has signed two definitive agreements, one to acquire substantially all
of the assets of Astro Air, Inc. ("Astro") and one to acquire all of the
outstanding stock of M.H. Rhodes, Inc. ("Rhodes"). Astro is a privately-held
Texas corporation that manufactures heat exchange coils. Rhodes is a
publicly-held manufacturer of mechanical timers and photoelectric controls
located in Avon, Connecticut. The Company intends to consolidate the operations
of its subsidiary, Cramer Company ("Cramer"), into Rhodes soon after the
acquisition and operate Cramer as a division of Rhodes.
The two acquisitions are subject to the fulfillment of various
conditions, some of which are outside of the Company's control. Accordingly,
there is no assurance that the acquisitions will be completed.
Item 7. Financial Statements, Pro Forma
Financial Information and Exhibits
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(c) Exhibits
99.1 Press release dated April 3, 1998 re: Astro Air, Inc.
99.2 Press release dated April 6, 1998 re: M.H. Rhodes, Inc.
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SIGNATURE
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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.
OWOSSO CORPORATION
Date: April 6, 1998 By: /s/ John H. Wert, Jr.
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John H. Wert, Jr., Senior Vice
President - Finance and Chief
Financial Officer
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EXHIBIT INDEX
Exhibit
No. Description
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99.1 Press release dated April 3, 1998 re: Astro Air, Inc.
99.2 Press release dated April 6, 1998 re: M.H. Rhodes, Inc.
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FOR IMMEDIATE RELEASE:
April 3, 1998
OWOSSO CORPORATION TO ACQUIRE ASTRO AIR, INC.
April 3, 1998 - King of Prussia, PA -- Owosso Corporation (Nasdaq: OWOS)
announced today that it has signed a definitive agreement to acquire all of the
assets of Astro Air, Inc., a Jacksonville, Texas manufacturer of fin and tube
heat exchange coils. The purchase price consists of approximately $8 million in
cash, and the assumption of certain of Astro Air's liabilities, including bank
debt not to exceed $3.1 million. The agreement also requires the payment of
consulting fees to Astro Air's current owner based on sales to Astro Air's
largest existing customers. In its fiscal year ended December 31, 1997, Astro
Air reported sales of approximately $22.5 million and adjusted EBITDA of
approximately $2.3 million.
George B. Lemmon, Jr., Owosso's president and chief executive officer,
commented, "We are extremely happy to be able to make Astro Air part of Owosso's
family of companies. This transaction, in conjunction with our recently
announced intention to sell our agricultural equipment businesses, reflects our
strategic move to concentrate on components businesses that serve other
manufacturers. Astro Air is in an industry with which we are very familiar
through our Snowmax subsidiary, located less than an hour away from Astro Air.
We plan to institute our manufacturing and information systems and controls to
help Astro Air enhance and manage its growth. Combined with Snowmax, we become a
$40 million player in the coil industry, and we expect to see that number grow."
"Astro Air uses the same manufacturing process as Snowmax, but concentrates on
different end markets, primarily serving non-automotive transportation, whereas
Snowmax's largest customers are in commercial refrigeration and HVAC. Astro Air
has built strong relationships with a select group of customers, some of which
we know through our motor businesses, and we are committed to ensuring that the
quality and service that they have come to expect from Astro Air will only be
enhanced by Astro Air joining Owosso. We believe that the combined strength of
Snowmax and Astro Air will lead to more opportunities for sales growth and allow
us to be a more responsive supplier to our customers."
This press release contains forward-looking statements that involve a number of
risks and uncertainties. The purchase of Astro Air is subject to the
satisfaction of customary conditions, some of which are outside the Company's
control. Accordingly, there can be no assurance that the purchase will be
completed. Factors that could cause actual results to differ materially from
those reflected in the forward-looking statements include, but are not limited
to, adverse developments in economic factors influencing the manufacturing
sector of the economy, loss of a significant customer, lack of availability or
price increases of certain commodities, as well as the additional factors
discussed in the Company's Annual Report on Form 10-K for the year ended October
26, 1997 and Form 10-Q for the quarter ended January 25, 1998 in the section
captioned "Management's Discussion and Analysis of Financial Condition and
Results of Operations."
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To receive additional information on Owosso Corporation, via fax at no charge,
dial 1-888-OWOS-010 or visit our web site at www.owosso.com.
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FOR IMMEDIATE RELEASE:
April 6, 1998
OWOSSO CORPORATION TO ACQUIRE M. H. RHODES, INC.
AND CONSOLIDATE SUBSIDIARY
April 6, 1998 - King of Prussia, PA and Avon, CT - Owosso Corporation (Nasdaq:
OWOS) and M. H. Rhodes, Inc. announced today that they have signed a definitive
agreement in which Owosso will acquire all of the outstanding stock of M. H.
Rhodes, Inc. Rhodes is a publicly-held manufacturer of mechanical timers and
photoelectric controls, located in Avon, Connecticut. The purchase price of
$14.51 per Rhodes share equates to $2.9 million, and Owosso will assume or repay
debt of approximately $1.3 million. In its fiscal year ended December 31, 1997,
Rhodes reported net sales of $8.5 million and EBITDA of $0.5 million. The
transaction, expected to be completed in Owosso's fiscal third quarter, is
subject to certain conditions, including approval by Rhodes' shareholders.
Owosso also announced that it intends to consolidate the operations of its
Cramer subsidiary, located in Old Saybrook, Connecticut, into Rhodes'
manufacturing facility as soon as possible after closing. Cramer will be merged
into Rhodes and will operate as a division of Rhodes. Owosso estimates that it
will incur pre-tax expenses of $1.5 to $2.0 million for the costs of closing its
Old Saybrook facility and moving Cramer's operations to Avon, the majority of
which would be recognized at closing. These expenses are expected to consist
primarily of duplicate lease expenses, severance costs and the cost of moving
the physical assets.
Joseph Morelli, Rhodes' president, will run the combined entity, while Jim
Pogmore, Cramer's president will be executive vice president of Rhodes and
president of the Cramer division. Mr. Morelli commented, "This merger represents
an excellent opportunity for our company and our employees. By combining with
Cramer and Owosso, M. H. Rhodes will have a larger base of business, and we feel
that our company will be in an improved position to prosper going forward."
George B. Lemmon, Jr., Owosso's president and chief executive officer,
commented, "The sale of our agricultural equipment businesses, combined with the
purchase of Astro Air, announced last week, and today's announcement represent a
strategic redeployment of our capital into components businesses. These
operations fit within Owosso's core competencies in managing manufacturing
processes and serving our OEM customers through on-time delivery of high quality
engineered components."
"Cramer has been struggling with a declining market, and its fixed costs in Old
Saybrook are too high for the company to compete successfully. We believe that
the combined company can show cost savings in excess of $1 million per year
compared to operating separately. By moving to Avon, we hope to bring Cramer's
cost structure into line and make its products more competitive. At the same
time, spreading Rhodes' overhead over higher volume should benefit its
profitability
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as well. We do not anticipate the need to expand Rhodes' facility in the near
future to accommodate the addition of Cramer's operations."
Owosso Corporation is a diversified manufacturer of engineered component
products and specialized equipment. By operating in narrowly defined niche
markets, Owosso seeks to achieve revenue growth through market penetration and
new product development, while maximizing profit margins. Owosso currently has
manufacturing facilities in nine states and sells its products nationwide.
This press release contains forward-looking statements that involve a number of
risks and uncertainties. The purchase of Rhodes is subject to approval by
Rhodes' shareholders as well as the satisfaction of customary conditions, some
of which are outside of the Company's control. Accordingly, there can be no
assurance that the purchase will be completed. Factors that could cause actual
results to differ materially from those reflected in the forward-looking
statements include, but are not limited to, the ultimate cost and timing of
moving Cramer's business, realization of anticipated cost savings in the merger,
adverse developments in economic factors influencing the manufacturing sector of
the economy, lack of availability or price increases of certain commodities, as
well as the additional factors discussed in the Company's Annual Report on Form
10-K for the year ended October 26, 1997 and Form 10-Q for the quarter ended
January 25, 1998 in the section captioned "Management's Discussion and Analysis
of Financial Condition and Results of Operations."
To receive additional information on Owosso Corporation, via fax at no charge,
dial 1-888-OWOS-010 or visit our web site at www.owosso.com
