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 1, 2000
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MICHAEL BAKER CORPORATION
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(Exact name of registrant as specified in its charter)
PENNSYLVANIA 1-6627 25-0927646
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(State or other (Commission (I.R.S. Employer
jurisdiction of incorporation) File Number) Identification No.)
AIRPORT OFFICE PARK, BUILDING 3, 420 ROUSER ROAD, CORAOPOLIS, PA 15108
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(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code: (412) 269-6300
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<PAGE>
ITEM 2. ACQUISITION OR DISPOSITION OF ASSETS.
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(a) On June 1, 2000, Michael Baker Corporation (the "Company") completed the
sale of a wholly-owned subsidiary, Baker Support Services, Inc. ("BSSI"),
to SKE International LLC. BSSI primarily provides operations and
maintenance services on U.S. military bases worldwide, and had 1999
revenues totaling $53 million.
In exchange for 100% of the common stock of BSSI, the Company has received
cash proceeds totaling $13,500,000, and currently expects to receive
additional cash proceeds totaling approximately $487,000 by June 30, 2000.
The total sale price of $13,987,000 was determined through negotiation
between the parties. Funds received from this sale were used to pay off all
debt previously payable to Mellon Bank, N.A. under the Company's $25
million credit agreement.
BSSI's assets primarily comprise liquid items consistent with the
service-oriented nature of its business. Customer accounts receivable
represented 37% of BSSI's total assets as of December 31, 1999. BSSI's
remaining assets primarily include cash and cash equivalents, unbilled
revenues, supplies inventory, fixed assets, goodwill and long-term
investments in operating ventures.
ITEM 7. FINANCIAL STATEMENTS AND EXHIBITS.
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(a) Not applicable.
(b) The following unaudited pro forma consolidated financial information
illustrates the effect that the Company's sale of BSSI would have had on
the Company's financial statements, if the transaction had been consummated
at an earlier date.
1. Pro forma consolidated balance sheet as of March 31, 2000
2. Notes to pro forma consolidated balance sheet
3. Pro forma consolidated statement of income for the year ended December
31, 1999
4. Pro forma consolidated statement of income for the three-month period
ended March 31, 2000
5. Notes to pro forma consolidated statements of income
<PAGE>
(c) The exhibit identified below is filed herewith as a part of this report.
The Company hereby agrees to furnish to the Commission, upon request, a
copy of any omitted schedule or exhibit to the agreement identified below.
Exhibit 10.1 Stock Purchase Agreement by and among SKE
International LLC, Michael Baker Corporation and
Baker Support Services, Inc.
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.
MICHAEL BAKER CORPORATION
Date: June 15, 2000 /s/ CRAIG O. STUVER
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Craig O. Stuver
Senior Vice President, Corporate
Controller and Treasurer
<PAGE>
MICHAEL BAKER CORPORATION, EXCLUDING BAKER SUPPORT SERVICES, INC.
PRO FORMA CONSOLIDATED FINANCIAL INFORMATION
The following pro forma consolidated financial information is based on the
historical financial statements of Michael Baker Corporation (the "Company") and
Baker Support Services, Inc. ("BSSI"), and reflects the pro forma effects of the
sale of BSSI. Relevant information regarding the sale, which became effective on
June 1, 2000, was provided in Item 2 of this filing.
The pro forma consolidated balance sheet as of March 31, 2000 was prepared as if
the sale of BSSI had occurred on that date. The pro forma consolidated
statements of income for the year ended December 31, 1999 and the three-month
period ended March 31, 2000 were prepared as if the sale had occurred on January
1, 1999.
In the opinion of management, the pro forma financial information presented is
not necessarily indicative of the results that would have occurred for the
periods presented. The pro forma financial information should be read in
conjunction with the historical financial statements of the Company for the year
ended December 31, 1999.
<PAGE>
<TABLE>
MICHAEL BAKER CORPORATION, EXCLUDING BAKER SUPPORT SERVICES, INC.
PRO FORMA CONSOLIDATED BALANCE SHEET
AS OF MARCH 31, 2000
(UNAUDITED--AMOUNTS IN THOUSANDS)
<CAPTION>
PRO FORMA
CONSOLIDATED LESS- PRO FORMA CONSOLI-
BAKER BSSI ADJUSTMENTS DATED
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<S> <C> <C> <C> <C>
ASSETS
Current Assets
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Cash and cash equivalents $ 3,613 ($207) $3,684 (1)$ 7,504
Receivables 70,242 5,702 64,540
Cost of contracts in progress and
estimated earnings, less billings 20,592 976 19,616
Prepaid expenses and other 9,333 1,185 8,148
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TOTAL CURRENT ASSETS 103,780 7,656 3,684 99,808
Property, plant and equipment, net 13,609 1,273 12,336
Goodwill and other intangible
assets, net 13,805 1,983 11,822
Other assets 8,923 5,278 3,645
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TOTAL ASSETS $140,117 $16,190 $3,684 $127,611
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LIABILITIES
Current Liabilities
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Accounts payable $ 21,457 $550 $ 20,907
Current portion of long-term debt 3,090 -- 3,090
Accrued employee compensation 10,527 1,092 9,435
Accrued insurance 8,357 1,028 7,329
Other accrued expenses 23,552 3,791 2,501 (2) 22,262
Excess of billings on contracts in
progress over cost and est. earnings 7,952 107 7,845
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TOTAL CURRENT LIABILITIES 74,935 6,568 2,501 70,868
Long-term debt 12,677 -- (10,397)(1) 2,280
Other liabilities 5,909 -- 5,909
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TOTAL LIABILITIES 93,521 6,568 (7,896) 79,057
SHAREHOLDERS' INVESTMENT
Common Stock 7,181 1 1 (3) 7,181
Series B Common Stock 1,312 -- 1,312
Additional paid-in capital 37,119 22,577 22,577 (3) 37,119
Retained earnings 3,037 (12,956) (10,998)(4) 4,995
Less - Treasury shares, at cost (2,053) -- (2,053)
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TOTAL SHAREHOLDERS' INVESTMENT 46,596 9,622 11,580 48,554
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TOTAL LIABILITIES AND
SHAREHOLDERS' INVESTMENT $140,117 $16,190 $ 3,684 $127,611
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<FN>
The accompanying notes are an integral part of this financial statement.
</FN>
</TABLE>
<PAGE>
MICHAEL BAKER CORPORATION, EXCLUDING BAKER SUPPORT SERVICES, INC.
NOTES TO THE PRO FORMA CONSOLIDATED BALANCE SHEET
AS OF MARCH 31, 2000
(UNAUDITED)
1. These adjustments reflect the receipt of adjusted sale proceeds totaling
$14,081,000, and the payment of all debt payable to Mellon Bank as of March
31, 2000 under Baker's existing credit agreement, with the remainder of
$3,684,000 representing an addition to cash and cash equivalents.
2. This adjustment represents the elimination of BSSI's net intercompany
balances owed to other Baker affiliates totaling $2,501,000, which were
included in BSSI's other accrued expenses balance as of March 31, 2000.
3. These adjustments reflect the elimination of BSSI's common stock and
paid-in capital balances as of March 31, 2000, since such balances were
already properly eliminated in the Consolidated Baker amounts.
4. This adjustment represents the elimination of BSSI's accumulated deficit,
which is already included in the Consolidated Baker amount, and the
addition of the gain associated with the sale totaling $1,958,000 (computed
as of March 31, 2000).
<PAGE>
<TABLE>
MICHAEL BAKER CORPORATION, EXCLUDING BAKER SUPPORT SERVICES, INC.
PRO FORMA CONSOLIDATED STATEMENT OF INCOME
FOR THE YEAR ENDED DECEMBER 31, 1999
(UNAUDITED--AMOUNTS IN THOUSANDS, EXCEPT SHARE AND PER SHARE AMOUNTS)
<CAPTION>
PRO FORMA
CONSOLIDATED LESS- PRO FORMA CONSOLI-
BAKER BSSI ADJUSTMENTS DATED
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<S> <C> <C> <C> <C>
Total contract revenues $506,012 $53,470 $452,542
Cost of work performed 465,273 47,285 417,988
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GROSS PROFIT 40,739 6,185 34,554
Selling, general and administrative
expenses 48,914 4,115 798 (1) 45,597
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INCOME/(LOSS) FROM OPERATIONS (8,175) 2,070 (798) (11,043)
Other income/(expense):
Interest income 155 -- 155
Interest expense (948) -- 455 (2) (493)
Other, net (273) (236) (37)
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INCOME/(LOSS) BEFORE INCOME TAXES (9,241) 1,834 (343) (11,418)
Provision for/(benefit from)
income taxes (1,077) 893 (137)(3) (2,107)
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NET INCOME/(LOSS) ($8,164) $941 ($206) ($9,311)
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WEIGHTED AVERAGE SHARES OUTSTANDING:
Basic and diluted 8,175,090 8,175,090
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NET LOSS PER SHARE:
Basic and diluted ($1.00) ($1.14)
================================================================================
<FN>
The accompanying notes are an integral part of this financial statement.
</FN>
</TABLE>
<PAGE>
<TABLE>
MICHAEL BAKER CORPORATION, EXCLUDING BAKER SUPPORT SERVICES, INC.
PRO FORMA CONSOLIDATED STATEMENT OF INCOME
FOR THE THREE-MONTH PERIOD ENDED MARCH 31, 2000
(UNAUDITED--AMOUNTS IN THOUSANDS, EXCEPT SHARE AND PER SHARE AMOUNTS)
<CAPTION>
PRO FORMA
CONSOLIDATED LESS- PRO FORMA CONSOLI-
BAKER BSSI ADJUSTMENTS DATED
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<S> <C> <C> <C> <C>
Total contract revenues $108,295 $14,080 $94,215
Cost of work performed 93,480 12,346 81,134
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GROSS PROFIT 14,815 1,734 13,081
Selling, general and administrative
expenses 10,928 1,075 169 (1) 10,022
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INCOME FROM OPERATIONS 3,887 659 (169) 3,059
Other income/(expense):
Interest income 19 -- 19
Interest expense (400) -- 233 (2) (167)
Other, net (197) (112) (85)
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INCOME BEFORE INCOME TAXES 3,309 547 64 2,826
Provision for income taxes 1,555 257 26 (3) 1,324
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NET INCOME $1,754 $ 290 $38 $1,502
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WEIGHTED AVERAGE SHARES OUTSTANDING:
Basic 8,188,789 8,188,789
Diluted 8,210,817 8,210,817
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NET INCOME PER SHARE:
Basic and diluted $0.21 $0.18
================================================================================
<FN>
The accompanying notes are an integral part of this financial statement.
</FN>
</TABLE>
<PAGE>
MICHAEL BAKER CORPORATION, EXCLUDING BAKER SUPPORT SERVICES, INC.
NOTES TO THE PRO FORMA CONSOLIDATED STATEMENTS OF INCOME
FOR THE YEAR ENDED DECEMBER 31, 1999, AND
THE THREE-MONTH PERIOD ENDED MARCH 31, 2000
(UNAUDITED)
1. This adjustment represents the addback of Corporate and Business Unit
selling, general and administrative expenses allocated to BSSI for the
period, under the assumption that such overhead costs would not have been
eliminated and therefore would have been reallocated to other divisions of
Baker.
2. This adjustment represents a reduction of the interest expense that would
have been incurred by Baker due to the assumed payoff of all debt payable
to Mellon Bank (as of January 1, 1999) under the credit agreement.
3. This adjustment represents the provision for/(benefit from ) income taxes
associated with the adjustments included in notes 1 and 2 above. Such
adjustment is computed based upon an estimated combined federal and state
statutory tax rate of 40%.
4. In accordance with the SEC's guidelines for the preparation of pro forma
income statement information, no pro forma adjustment has been included for
the effect of any additional interest income that have been would have been
earned by Baker after using the sale proceeds to pay off all its debt
payable to Mellon Bank, and investing the remainder. Likewise, no pro forma
adjustment has been included for the effect of the gain associated with the
sale of BSSI.
