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): August 11, 1998
PITTWAY CORPORATION
(Exact name of registrant as specified in its charter)
Delaware 13-5616408
(State or other jurisdiction (IRS Employer
of incorporation) Identification Number)
1-4821
(Commission File Number)
200 South Wacker Drive, Suite 700, Chicago, Illinois 60606-5802
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code: (312) 831-1070
1
INFORMATION TO BE INCLUDED IN THE REPORT
Item 2. Acquisition or Disposition of Assets
In a Form 8-k dated December 1, 1997, the Registrant originally
announced plans to distribute its Penton Publishing subsidiary to
stockholders in a tax-free spin-off as part of an agreement to
combine Penton with a privately owned company, later identified as
Donohue Meehan Publishing Company, through an exchange of shares.
The spin-off was completed on August 7, 1998. The spin-off
distribution consisted of one share of Penton common stock for each
share of Pittway stock outstanding, without distinction between
Pittway's Common and Class A shares. The spin-off is more fully
described in the press release filed as Exhibit 99 hereto, the first
paragraph of which press release is hereby incorporated by
reference.
Item 5. Other Events
Pittway declared a 2-for-1 stock split in the form of a 100% stock
dividend on its Common and Class A Common stock payable September
11, 1998 to stockholders of record September 1, 1998. The stock
split is described in the press release filed as Exhibit 99 hereto,
the third paragraph of which press release is hereby incorporated by
reference.
Item 7. Financial Statements and Exhibits
(a) Financial statements of Businesses Acquired
None
(b) Pro Forma Financial Information
Unaudited pro forma condensed consolidated financial
information:
Introduction Page 4
Balance Sheet as of June 30, 1998 Page 5
Statement of Income for the six month
period ended June 30, 1998 and the year
ended December 31, 1997 Page 6
2
Item 7. (continued)
(c) Exhibits.
Ex. No. Description
2 Combination Agreement, dated May 21, 1998,
by and among Penton Media, Inc., DM
Acquisition Corp., Pittway Corporation,
Donohue Meehan Publishing Company, William
C. Donohue, and John J. Meehan (incorporated
by reference to Exhibit 2.1 of the Penton
Media, Inc. S-1 Registration Statement Number
333-56877 filed with the commission on
June 15, 1998).
99 Press release dated August 7, 1998 Page 8-9
3
PITTWAY CORPORATION
INTRODUCTION TO UNDAUDITED PRO FORMA
CONDENSED CONSOLIDATED FINANCIAL INFORMATION
The following unaudited pro forma condensed consolidated financial
information is based on the historical consolidated financial
statements of Pittway Corporation (the "Company") and gives effect
to the distribution of Penton Media, Inc. to the stockholders of the
Company.
The unaudited Pro Forma Condensed Consolidated Balance Sheet as of
June 30, 1998 presents the financial position of the Company
assuming the distribution of Penton Media had been completed as of
that date. The unaudited Pro Forma Condensed Consolidated Statement
of Income for the six month period ended June 30, 1998 and the year
ended December 31, 1997 present the results of operations of the
Company assuming that the distribution had been completed on January
1 of the respective period. This statement also presents pro forma
net income per share giving effect to the 2-for-1 stock split
declared by the Board of Directors, payable September 11, 1998 to
stockholders of record September 1, 1998.
The unaudited pro forma condensed consolidated financial information
should be read in conjunction with the historical consolidated
financial statements and notes thereto in the Company's 1997 Annual
Report. The pro forma information presented is for information
purposes only and may not necessarily reflect future results of
operations or financial position or what the results of operations
or financial position would have been had the distribution actually
taken place at the beginning of the period or as of the dates
specified.
4
PITTWAY CORPORATION AND SUBSIDIARIES
PRO FORMA CONDENSED CONSOLIDATED BALANCE SHEET
JUNE 30, 1998
(Unaudited; Dollars in Thousands)
ASSETS
Cash and marketable securities............ $ 49,340
Accounts and notes receivable, net........ 231,220
Inventories............................... 262,163
Other current assets...................... 26,336
Total current assets.................... 569,059
Property, plant and equipment............. 255,467
Less: Accumulated depreciation............ (124,207)
131,260
Marketable securities..................... 44,195
Investment in affiliate................... 28,343
Leverage leases, real estate and
other ventures.......................... 58,859
Intangible assets, net.................... 67,904
Other assets.............................. 40,471
Total non-current assets................ 371,032
Total assets.......................... $ 940,091
LIABILITIES AND STOCKHOLDERS' EQUITY
Notes payable............................. $ 68,468
Accounts payable.......................... 148,056
Other current liabilities................. 67,005
Total current liabilities............... 283,529
Long-term debt............................ 99,325
Income taxes.............................. 50,905
Litigation................................ 43,000
Other deferred liabilities................ 8,973
Total liabilities....................... 485,732
Common capital stock...................... 21,218
Capital in excess of par value............ 36,323
Retained earnings......................... 387,790
Cumulative marketable securities
valuation adjustment..................... 17,533
Cumulative foreign currency translation
adjustment............................... (8,505)
Total stockholders' equity.............. 454,359
Total liabilities and equity.......... $ 940,091
Note: This pro forma statement presents the historical consolidated
balance sheet adjusted to eliminate the $60,699 "Investment in
discontinued operations" from historical assets and a corresponding
reduction in the historical "Retained earnings" balances.
5
<TABLE>
PITTWAY CORPORATION AND SUBSIDIARIES
PRO FORMA CONDENSED CONSOLIDATED STATEMENT OF INCOME
FOR THE SIX MONTHS ENDED JUNE 30, 1998
AND THE YEAR ENDED DECEMBER 31, 1997
(Unaudited; Dollars in Thousands, Except Per Share Data)
<CAPTION>
Jun. 30, December 31, 1997
1998 Pro Forma
Pro Forma Historical Adjustments Pro Forma
<S> <C> <C> <C> <C>
NET SALES.......................... $629,677 $1,348,703 $(204,931) $1,143,772
OPERATING EXPENSES:
Cost of sales..................... 400,764 818,107 (94,560) 723,547
Selling, general and
administrative................... 167,323 388,106 (78,523) 309,583
Provision for patent litigation... 43,000
Depreciation and amortization..... 16,876 34,660 (6,519) 28,141
627,963 1,240,873 (179,602) 1,061,271
OPERATING INCOME................... 1,714 107,830 (25,329) 82,501
OTHER INCOME (EXPENSE):
Gain on affiliate capital
transactions.................... 6,396 6,396
Equity in affiliate's
acquisition charge-off........... (18,943) (18,943)
Equity in affiliate's gain
on divestiture................... 6,646
Interest expense.................. (6,573) (11,693) 841 (10,852)
Income from investments and
other interest................... 7,926 5,798 (4) 5,794
Miscellaneous, net................ (473) (560) (1,046) (1,606)
7,526 (19,002) (209) (19,211)
INCOME BEFORE INCOME TAXES......... 9,240 88,828 (25,538) 63,290
PROVISION FOR INCOME TAXES......... 3,311 33,314 (10,632) 22,682
NET INCOME......................... $ 5,929 $ 55,514 $ (14,906) $ 40,608
NET INCOME PER SHARE OF COMMON
AND CLASS A STOCK:
Basic............................ $ .28 $ 2.65 $ 1.94
Diluted.......................... $ .28 $ 2.61 $ 1.91
AVERAGE SHARES OUTSTANDING (000's). 21,115 20,979 20,979
AVERAGE SHARES AND DILUTIVE
EQUIVALENTS OUTSTANDING (000's)... 21,538 21,251 21,251
PRO FORMA NET INCOME PER SHARE OF
COMMON AND CLASS A STOCK GIVING
EFFECT TO THE 2-FOR-1 STOCK SPLIT
Basic............................ $ .14 $ 1.32 $ .97
Diluted.......................... $ .14 $ 1.31 $ .96
Note: The June 30, 1998 pro forma statement of income presents the historical
statement of income adjusted to eliminate "Income from discontinued operations"
of $7,609 from the historical results of operations. The December 31, 1997 pro
forma statement of income reflects adjustments to remove Penton's results of
operations from Pittway's historical statement of income.
</TABLE>
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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.
PITTWAY CORPORATION
(Registrant)
Dated: August 11, 1998 By: /s/ Paul R. Gauvreau
Paul R. Gauvreau
Financial Vice President, Treasurer
and Chief Financial Officer
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FROM: Edelman Worldwide FOR: Pittway Corporation
Financial Relations 200 South Wacker Drive
200 East Randolph Drive Suite 700
Chicago, Illinois 60601 Chicago, IL 60606-5802
Phone: (312) 240-2640 Phone: (312) 831-1070
Penton Media, Inc.
1100 Superior Avenue
Cleveland, OH 44114
Phone: (216) 696-7000
FOR IMMEDIATE RELEASE
For further information contact Mark McCall at Edelman,
Edward J. Schwartz at Pittway or Mary Abood at Penton Media.
PITTWAY SPINS OFF PENTON MEDIA;
PENTON ACQUIRES DONOHUE MEEHAN PUBLISHING
Chicago, Illinois, August 7, 1998 --- Pittway Corporation (NYSE:
PRYA) and Penton Media, Inc. (NYSE) jointly announced the completion
of the tax-free spin-off of Penton from Pittway. The spin-off
distribution consists of one share of Penton common stock for each
share of Pittway stock outstanding, without distinction between
Pittway's Common and Class A shares. Penton is newly listed on the
New York Stock Exchange and will begin trading on August 10, 1998.
Its ticker symbol is PME.
Immediately after the spin-off, Penton completed the acquisition
of Donohue Meehan Publishing Company, which serves the baking and
convenience store markets. As a result of the spin-off and
acquisition, Pittway shareholders collectively own 93.2 percent of
Penton and the two DM Publishing shareholders own 6.8 percent.
Pittway previously announced that, after the spin-off, it will
split its Common and Class A Common stock 2-for-1, payable September
11, 1998 to stockholders of record September 1, 1998.
Penton is a business media company that publishes and prints
trade magazines and directories and produces trade shows,
conferences, electronic media products and direct mail marketing
materials.
Pittway is a manufacturer and distributor of burglar and
commercial fire alarm equipment and other low voltage products.
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