<PAGE> 1
- --------------------------------------------------------------------------------
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
------------------------
FORM 8-K/A NO. 2
CURRENT REPORT
PURSUANT TO SECTION 13 OR 15(D) OF THE
SECURITIES EXCHANGE ACT OF 1934
Date of Report: September 22, 1997
CHICAGO MINIATURE LAMP, INC.
(Exact name of registrant as specified in its charter)
Oklahoma 0-25848 73-1412000
(State or other jurisdiction of (Commission file No.) (IRS Employer
incorporation) Identification No.)
500 Chapman Street 02121
Canton, Massachusetts (Zip Code)
(Address of principal executive offices)
(617) 828-2948
(Registrant's telephone number,
including area code)
- -------------------------------------------------------------------------------
<PAGE> 2
ITEM 2. ACQUISITION OF ASSETS.
NO AMENDMENTS ARE BEING MADE TO THE FOLLOWING TEXT OF ITEM 2 WHICH WAS
CONTAINED IN FORM 8-K FILED WITH THE SEC ON SEPTEMBER 22, 1997.
On September 8, 1997, Chicago, Miniature Lamp, Inc. (the "Company" or
"CML"), acting through a newly-incorporated subsidiary, Chicago Miniature
Lamp-Sylvania B.V., consummated the purchase of all of the outstanding shares
of capital stock of Sylvania Lighting International, B.V. ("SLI"), a privately
held company headquartered in Geneva, Switzerland for $161.5 million cash,
financed with the Company's internal cash and a $250.0 million credit facility
provided by BankBoston. There was no relationship between the Selling
Stockholders of SLI and the Company or any of its officers, directors, or
affiliates. The Company intends to continue and expand the operations of SLI
as presently being conducted. The acquisition of SLI is being treated as a
purchase for accounting purposes.
SLI is an integrated designer, manufacturer and seller of lighting systems
which are comprised of lamps and fixtures. SLI manufacturers and offers a
complete range of lamps (incandescent, fluorescent, compact fluorescent, high
intensity discharge, halogen, and special lamps) and a complete range of
fixtures to meet the lighting needs of its customers, which include architects,
designers, consultants, specifiers, installers, contractors, wholesale
distributors, OEMs, and retailers. SLI's product portfolio is sold under
several brands, most notably the "SYLVANIA" name, for which SLI has rights in
all regions with the exception of North America. For its years ended December
31, 1996 and 1995 SLI reported revenues of appropriately $610.0 and $625.0
million respectively, and EBIT (before extraordinary charges) of $6.1 and $19.2
million respectively. SLI believes that it has an approximate 11% market share
in lamps, and is the third largest lighting company in Western Europe, SLI
manufacturers approximately 90% of all its product requirements in-house through
13 plants in nine countries; eight plants are in Europe and five are in Latin
America and Australia. SLI does not currently have a miniature lighting line,
and its products do not overlap those of CML. CML and SLI are complementary from
both a product line and geographical standpoint. The Company intends in the
future to capitalize on the combined strengths and attributes of both CML and
SLI.
ITEM 7. FINANCIAL STATEMENTS, PRO FORMA FINANCIAL INFORMATION AND EXHIBITS.
At the time of filing of the Form 8-K disclosing the acquisition by the
Registrant of all of the outstanding shares of capital stock of SLI, as set
forth in Item 2 above, the financial statements of the acquired company were not
available. The Registrant committed to file the necessary financial information
within 60 days after the filing date. Such audited financial statements were
not available at the end of such 60 day period. The Registrant filed unaudited
financial statements of the acquired company by amendment of the Form 8-K on
February 13, 1998 (the "Amendment"). The attached SLI financial statements, for
the eight months ended August 31, 1997 for the calendar years ended December 31,
1996 and December 31, 1995
<PAGE> 3
have been audited by the Company's independent auditors and supersede the
unaudited financial statements filed with the Amendment.
(a) Financial Statement of Business Acquired
Financial Statements of SLI for the eight months ended
August 31, 1997, year ended December 31, 1996, and year
ended December 31, 1995.
(b) Pro Forma Financial Information
The attached pro forma unaudited financial statement for Chicago
Miniature Lamp, Inc. was prepared to reflect the information as if the
acquisition of SLI described in Item 2 had occurred at the beginning of the
period presented and supersedes the pro form unaudited financial statements
filed with the Amendment:
(i) Pro Forma Condensed Consolidated Balance sheet as of August
31, 1997.
(ii) Pro Forma Condensed Consolidated Statement of Operations
for the nine months ended August 31, 1997.
(iii) Pro Forma Condensed Consolidated Statement of Operations
for the year ended December 1, 1996.
(c) Exhibits
*10.1 copy of Stock Purchase Agreement dated September 4, 1997 between
SLI, its stockholders and the Company
23.1 Consent of Independent Auditors, Ernst & Young LLP, dated
April 3, 1998
* Previously filed.
<PAGE> 4
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934,
the Company has duly caused this Report to be signed on its behalf by
the undersigned hereunto duly authorized.
CHICAGO MINIATURE LAMP, INC.
/S/ Richard F. Parenti
----------------------------------
Richard F. Parenti, V.P. Finance
Dated: April 3, 1998
<PAGE> 5
REPORT OF INDEPENDENT AUDITORS
The Board of Directors and Shareholders
Chicago Miniature Lamp, Inc.
We have audited the accompanying consolidated balance sheets of Sylvania
Lighting International B.V. and subsidiaries as of August 31, 1997, December 31,
1996 and December 31, 1995, and the related consolidated statements of income,
stockholders' equity, and cash flows for the eight months ended August 31, 1997
and the years ended December 31, 1996 and December 31, 1995. 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 audits.
We conducted our audits 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 audits provide a reasonable basis for our opinion.
In our opinion, based on our audits, the financial statements referred to
above present fairly, in all material respects, the consolidated financial
position of Sylvania Lighting International B.V. and subsidiaries at August 31,
1997, December 31, 1996 and December 31, 1995, and the consolidated results of
their operations and their cash flows for the eight months ended August 31,
1997, and the years ended December 31, 1996 and December 31, 1995, in conformity
with generally accepted accounting principles.
ERNST & YOUNG LLP
Chicago, Illinois
March 20, 1998
<PAGE> 6
SYLVANIA LIGHTING INTERNATIONAL B.V. AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
(L IN THOUSANDS)
<TABLE>
<CAPTION>
AUGUST 31, DECEMBER 31, DECEMBER 31,
1997 1996 1995
---------- ------------ ------------
<S> <C> <C> <C>
ASSETS
Current assets:
Cash and cash equivalents................................. L 13,731 L 28,175 L 35,370
Accounts receivable, less allowances for doubtful accounts
of L4,113 in 1997, L4,547 in 1996 and L4,207 in 1995... 55,923 63,477 73,375
Inventories............................................... 55,459 54,239 67,536
Prepaid expenses and other................................ 10,420 10,672 12,758
-------- -------- --------
Total current assets.............................. 135,533 156,563 189,039
Property, plant, and equipment, net......................... 40,266 40,232 41,294
Other assets:
Goodwill, net of accumulated amortization................. 1,059 1,097 237
Other intangible assets, net of accumulated
amortization........................................... 159 162 1,100
Deferred income taxes..................................... 1,557 576 1,433
-------- -------- --------
Total assets...................................... L178,574 L198,630 L233,103
======== ======== ========
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Short-term notes payable.................................. L 815 L 2,187 L 4,054
Current portion of long-term debt......................... 3,461 4,051 7,831
Accounts payable.......................................... 40,351 53,199 61,975
Accrued expenses.......................................... 37,659 38,608 43,791
Income taxes payable...................................... 2,913 2,115 2,442
-------- -------- --------
Total current liabilities......................... 85,199 100,160 120,093
Long-term debt, less current portion........................ 26,059 23,910 31,812
Other liabilities:
Deferred income taxes..................................... 4,238 3,265 4,025
Negative goodwill, net of accumulated amortization........ 10,699 11,093 953
Other long-term liabilities............................... 14,884 19,274 34,221
-------- -------- --------
Total other liabilities........................... 29,821 33,632 39,199
Commitments and contingencies
Redeemable preference shares................................ 12,595 12,959 8,989
Stockholders' equity:
Ordinary shares -- A, NLG 1.00 par value -- Authorized --
300,000 shares -- Issued and outstanding -- 60,000
shares................................................. 24 24 24
Ordinary shares -- B, NLG .35 par value -- Authorized --
200,000 shares -- Issued and outstanding -- 40,000
shares................................................. 6 6 6
Additional paid-in capital................................ 35 35 35
Retained earnings......................................... 35,907 36,345 34,585
Foreign currency translation adjustment................... (11,072) (8,441) (1,640)
-------- -------- --------
Total stockholders' equity........................ 24,900 27,969 33,010
-------- -------- --------
Total liabilities and stockholders' equity........ L178,574 L198,630 L233,103
======== ======== ========
</TABLE>
The accompanying notes are an integral part of these financial statements.
<PAGE> 7
SYLVANIA LIGHTING INTERNATIONAL B.V. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF INCOME
(L IN THOUSANDS)
<TABLE>
<CAPTION>
EIGHT MONTHS
ENDED YEAR ENDED
------------ ---------------------------
AUGUST 31, DECEMBER 31, DECEMBER 31,
1997 1996 1995
------------ ------------ ------------
<S> <C> <C> <C>
Net sales................................................ L213,894 L356,732 L370,667
Cost of products sold.................................... 146,330 253,818 250,228
-------- -------- --------
Gross margin............................................. 67,564 102,914 120,439
Selling, general and administrative expenses............. 62,839 94,708 99,452
-------- -------- --------
Operating income......................................... 4,725 8,206 20,987
Other (income) expenses:
Interest expense, net.................................. 1,526 3,644 2,842
Other, net............................................. 611 (415) (11)
-------- -------- --------
Income before income taxes............................... 2,588 4,977 18,156
Income taxes............................................. 1,538 2,254 3,302
-------- -------- --------
Net income............................................... 1,050 2,723 14,854
Dividends on preference shares........................... 1,488 963 861
-------- -------- --------
Net income (loss) attributed to ordinary shareholders.... L (438) L 1,760 L 13,993
======== ======== ========
</TABLE>
The accompanying notes are an integral part of these financial statements.
<PAGE> 8
SYLVANIA LIGHTING INTERNATIONAL B.V. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY
(L IN THOUSANDS)
<TABLE>
<CAPTION>
ORDINARY SHARES
------------------- FOREIGN
NUMBER ADDITIONAL CURRENCY
OF PAID-IN RETAINED TRANSLATION
SHARES PAR VALUE CAPITAL EARNINGS ADJUSTMENT
------- --------- ---------- -------- -----------
<S> <C> <C> <C> <C> <C>
Balance at January 1, 1995..................... 100,000 L30 L35 L20,592 L (1,892)
Net income attributed to ordinary
shareholders................................. -- -- -- 13,993 --
Translation adjustment......................... -- -- -- -- 252
------- --- --- ------- --------
Balance at December 31, 1995................... 100,000 30 35 34,585 (1,640)
Net income attributed to ordinary
shareholders................................. -- -- -- 1,760 --
Translation adjustment......................... -- -- -- -- (6,801)
------- --- --- ------- --------
Balance at December 31, 1996................... 100,000 30 35 36,345 (8,441)
Net loss attributed to ordinary shareholders... -- -- -- (438) --
Translation adjustment......................... -- -- -- -- (2,631)
------- --- --- ------- --------
Balance at August 31, 1997..................... 100,000 L30 L35 L35,907 L(11,072)
======= === === ======= ========
</TABLE>
The accompanying notes are an integral part of these financial statements.
<PAGE> 9
SYLVANIA LIGHTING INTERNATIONAL B.V. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS
(L IN THOUSANDS)
<TABLE>
<CAPTION>
EIGHT MONTHS
ENDED YEAR ENDED
------------ ---------------------------
AUGUST 31, DECEMBER 31, DECEMBER 31,
1997 1996 1995
------------ ------------ ------------
<S> <C> <C> <C>
OPERATING ACTIVITIES
Net income............................................... L 1,050 L 2,723 L 14,854
Adjustments to reconcile net income to net cash provided
by (used for) operating activities:
Depreciation and amortization.......................... 4,979 4,770 4,051
Amortization of negative goodwill...................... (394) (591) (54)
Deferred income taxes.................................. (9) (16) 2,147
Changes in operating assets and liabilities:
Accounts receivable................................. 636 (1,893) 12,267
Inventories......................................... (4,251) 4,929 (7,128)
Prepaid expenses and other.......................... (407) 54 (7,928)
Accounts payable.................................... (8,471) (32) (4,008)
Accrued expenses.................................... 1,640 (640) (7,704)
Income taxes payable................................ 746 (287) 818
Other long-term liabilities......................... (3,330) 196 (4,358)
-------- -------- --------
Net cash provided by (used for) operating activities..... (7,811) 9,213 2,957
INVESTING ACTIVITIES
Purchases of property, plant, and equipment.............. (6,123) (8,914) (15,715)
Acquisitions, net of cash acquired....................... (1,537) (250)
-------- -------- --------
Net cash used for investing activities................... (6,123) (10,451) (15,965)
FINANCING ACTIVITIES
Net repayments of lines of credit........................ (779) (2,263) (5,363)
Proceeds from borrowings................................. 9,193 7,164 6,472
Payments of long-term debt............................... (5,442) (8,437) (684)
Dividends paid........................................... (1,852) (941) (431)
-------- -------- --------
Net cash provided by (used for) financing activities..... 1,120 (4,477) (6)
Effect of exchange rate changes on cash.................. (1,630) (1,480) 1,482
-------- -------- --------
Net decrease in cash and cash equivalents................ (14,444) (7,195) (11,532)
Cash and cash equivalents, beginning of year............. 28,175 35,370 46,902
-------- -------- --------
Cash and cash equivalents, end of year................... L 13,731 L 28,175 L 35,370
======== ======== ========
SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION
Cash paid for:
Interest............................................... L 1,583 L 3,417 L 3,661
======== ======== ========
Income taxes........................................... L 772 L 1,701 L 926
======== ======== ========
Equipment capitalized under lease agreements............. L -- L 892 L 4,261
======== ======== ========
Shareholder notes converted to redeemable preference
shares................................................. L -- L 5,961 L --
======== ======== ========
</TABLE>
The accompanying notes are an integral part of these financial statements.
<PAGE> 10
SYLVANIA LIGHTING INTERNATIONAL B.V. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
1. ORGANIZATION AND ACQUISITIONS
Sylvania Lighting International B.V., (the Company or SLI) was incorporated
in July 1992 and is registered in the Netherlands. Operations commenced in
January 1993 with the acquisition of the international lighting business of GTE
Corporation and GTE International Incorporated (SLI acquisition). The Company
designs, manufactures and sells a complete line of lighting systems which are
comprised of lamps and fixtures. The Company serves a diverse international
customer base and markets, operates primarily in western Europe, Australia and
Latin America and has major plants in 9 countries (outside the United States).
Effective May 1, 1995, the assets of Nijssen Lighting Division B.V. were
acquired for approximately L290,000 in cash.
Effective June 30, 1995, the Company acquired all the assets and assumed
certain liabilities of Lumiance O.Y. for total consideration of L261,000,
including a loan payable of approximately L147,000 (repaid in 1995).
On February 5, 1996, SLI acquired the assets and assumed certain
liabilities of Kliktube Systems of Austrailia Pty. Ltd. and Kliktube Systems
(NZ) Ltd. for approximately L1,537,000.
The above acquisitions were accounted for using the purchase method and the
purchase price was allocated to assets acquired and liabilities assumed based on
the estimated fair market value existing at the date of acquisition. The excess
of purchase price over fair market value of net assets acquired is reflected in
the accompanying consolidated balance sheets as goodwill. Goodwill of L243,000
and L914,000 was recorded in connection with the 1995 and 1996 acquisitions,
respectively. The operating results of the above acquired businesses have been
included in the accompanying statements of operations from the respective
acquisition dates.
PRINCIPLES OF CONSOLIDATION
The accompanying consolidated financial statements include the accounts of
the Company and its subsidiaries. All significant intercompany balances and
transactions have been eliminated from the consolidated financial statements.
These statements have been prepared in conformity with United States
Generally Accepted Accounting Principles and are presented in pounds sterling
(L).
2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
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 amounts reported in the financial statements and
accompanying notes. Actual results could differ from those estimates.
CASH EQUIVALENTS
The Company considers all highly liquid investments with a maturity of
three months or less when purchased to be cash equivalents.
<PAGE> 11
SYLVANIA LIGHTING INTERNATIONAL B.V. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)
INVENTORIES
Inventories are stated at the lower cost, determined by the first in, first
out (FIFO) method, or market. Inventories consist of the following (L in
thousands):
<TABLE>
<CAPTION>
AUGUST 31, DECEMBER 31, DECEMBER 31,
1997 1996 1995
---------- ------------ ------------
(IN THOUSANDS)
<S> <C> <C> <C>
Raw materials....................................... L11,729 L 9,407 L10,373
Work in process..................................... 5,321 5,454 6,795
Finished goods...................................... 38,409 39,378 50,368
------- ------- -------
L55,459 L54,239 L67,536
======= ======= =======
</TABLE>
PROPERTY, PLANT, AND EQUIPMENT
Property, plant, and equipment are stated at cost. The Company provides for
depreciation using the straight-line method over the following estimated useful
lives:
<TABLE>
<S> <C>
Buildings and improvements.................................. 20-55 years
Machinery and equipment..................................... 10-16 years
Furniture and fixtures...................................... 3-6 years
</TABLE>
Leasehold improvements are amortized on a straight-line basis over the
shorter of the estimated useful lives of the assets or the remaining lease term.
GOODWILL
Goodwill represents the excess of the purchase price over the fair value of
identifiable net assets acquired related to the business acquisitions. The
Company periodically assesses whether a change in circumstances has occurred
subsequent to an acquisition which would indicate whether the future useful life
of an asset should be revised. The Company considers the future earnings
potential of the acquired business in assessing the recoverability of goodwill.
Goodwill is amortized on a straight-line basis over 20 years. Amortization
expense was approximately L54,000, L38,000, and L6,000 for the eight months
ended August 31, 1997 and for the years ended December 31, 1996 and 1995.
NEGATIVE GOODWILL
Negative goodwill represents the excess of fair value of identifiable net
assets acquired over the purchase price related to the business acquisition.
Negative goodwill is amortized on a straight-line basis over 20 years.
Amortization benefit was approximately L394,000, L591,000, and L54,000, for the
eight months ended August 31, 1997 and for the years ended December 31, 1996,
and 1995, respectively.
OTHER INTANGIBLE ASSETS
Other intangible assets include the fair value of trademarks and patents
acquired at the date of acquisition of the international lighting businesses of
GTE Corporation and GTE International Incorporated. The carrying value of the
intangible assets is regularly reviewed by management to determine if there has
been any permanent impairment in value.
<PAGE> 12
SYLVANIA LIGHTING INTERNATIONAL B.V. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)
FINANCIAL INSTRUMENTS
The Company uses derivative financial instruments to reduce its exposure to
adverse fluctuations in foreign exchange rates. Financial instruments are not
used for trading purposes.
The Company and its subsidiaries utilize forward foreign currency exchange
contracts to minimize the impact of currency movements, principally on
anticipated intercompany inventory purchases and loans denominated in currencies
other than their functional currencies.
REVENUE RECOGNITION
Revenues from product sales are recognized at the time of shipment.
RESEARCH AND DEVELOPMENT
Research and development costs are charged to operations in the year
incurred and totaled L4,449,000, L6,674,000 and L6,948,000 for the eight months
ended August 31, 1997 and for the years ended December 31, 1996 and 1995,
respectively.
ADVERTISING COSTS
Advertising costs are expensed as incurred and totaled L2,064,000,
L5,053,000 and L7,698,000 for the eight months ended August 31, 1997 and the
years ended December 31, 1996 and 1995, respectively.
INCOME TAXES
Deferred income taxes are recognized based on the expected future tax
consequences of differences between the financial statement and tax bases of
assets and liabilities, calculated using enacted tax rates in effect for the
year in which the differences are expected to be reflected in the tax return.
FOREIGN CURRENCY TRANSLATION
Transactions arising in foreign currencies have been translated at rates of
exchange in effect at the dates of the transactions. Gains or losses during the
year have been included in net income. Assets and liabilities of subsidiaries
not located in the United Kingdom are translated at current exchange rates, and
income statement accounts are translated at the average rates during the period.
Related translation adjustments are reported as a component of stockholders'
equity.
Where the Company operates in countries with hyper-inflationary economies,
adjustments are made to ensure the financial results fairly reflect the
financial position of the foreign operation. The local currency financial
results are recorded in a functional currency, monetary amounts being recorded
at the balance sheet closing rate and non-monetary amount at historical rate
ruling when the transaction occurred. The financial statements remeasured into
the functional currency are then translated into sterling using the method
above.
<PAGE> 13
SYLVANIA LIGHTING INTERNATIONAL B.V. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)
3. PROPERTY, PLANT, AND EQUIPMENT
Property, plant, and equipment consists of the following:
<TABLE>
<CAPTION>
AUGUST 31, DECEMBER 31, DECEMBER 31,
1997 1996 1995
---------- ------------ ------------
(L IN THOUSANDS)
<S> <C> <C> <C>
Buildings and improvements......................... L 7,645 L 7,673 L 7,723
Machinery and equipment............................ 37,714 38,662 30,995
Furniture and fixtures............................. 7,097 3,530 3,282
Construction in progress -- equipment.............. 4,340 1,959 6,305
-------- -------- -------
56,796 51,824 48,305
Less: Accumulated depreciation..................... (16,530) (11,592) (7,011)
-------- -------- -------
L 40,266 L 40,232 L41,294
======== ======== =======
</TABLE>
4. DEBT
DEBT CONSISTS OF THE FOLLOWING:
<TABLE>
<CAPTION>
AUGUST 31, DECEMBER 31, DECEMBER 31,
1997 1996 1995
---------- ------------ ------------
(L IN THOUSANDS)
<S> <C> <C> <C>
First German facility, FIBOR plus 1.25%............. L 5,938 L 6,512 L 7,787
Second German facility, FIBOR plus 1.25%............ 6,101 6,691 7,961
Swiss facility, LIBOR plus 1.5%..................... 5,000 -- 7,000
First Belgian facility, LIBOR plus 1%............... 2,738 3,660 2,471
Second Belgian facility, LIBOR plus 1%.............. 3,420 4,231 2,187
Shareholder notes payable........................... -- -- 6,943
All other credit facilities......................... 2,148 4,373 4,448
Capital lease obligations........................... 4,990 4,681 4,900
------- ------- --------
30,335 30,148 43,697
Less: Current portion............................... (4,276) (6,238) (11,885)
------- ------- --------
L26,059 L23,910 L 31,812
======= ======= ========
</TABLE>
Under each of the German facilities, the Company was initially granted five
year credit lines (the "German Credit Lines") of up to DM 25,000,000 (L8,621,000
at the exchange-rate prevailing at August 31, 1997) and a short-term borrowing
facility of DM 10,000,000 (L3,448,000 at the August 31, 1997 exchange rate). The
German Credit Lines decreased during the period of the five year facility to
L7,328,000 each at August 31, 1997. The German credit lines each had an interest
rate of 4.55%, per annum at August 31, 1997.
The Swiss facility initially provided for the Company to borrow up to
L7,000,000 under a revolving facility repayable in full by January 1999. The
facility was amended subsequently to limit the borrowings to L5,000,000. This
facility bears interest at the rate of 8.57% per annum which rate is fixed
through April 1998.
Under the First Belgian facility, the Company was initially granted a
credit line (the "First Belgian Credit Line") of up to Bfr. 240,000,000,
(L4,007,000 at the exchange-rate prevailing at August 31, 1997) and three other
facilities (the "First Belgian Additional Facilities") aggregating Bfr.
200,000,000 (L3,339,000 at the exchange rate prevailing at August 31, 1997).
Under the Second Belgian facility, the Company was initially granted a credit
line (the "Second Belgian Credit Line") of up to Bfr. 260,000,000 (L4,341,000 at
the exchange rate prevailing at August 31, 1997) and three other facilities (the
"Second Belgian Additional Facilities") aggregating Bfr. 160,000,000 (L2,671,000
at the exchange rate prevailing at August 31, 1997). The interest rate on the
First and Second Belgian Credit Line was 4.41% at August 31, 1997. The First and
<PAGE> 14
SYLVANIA LIGHTING INTERNATIONAL B.V. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)
Second Belgian Additional Facilities are available for short-term borrowings or
for guarantees of foreign currency contracts. These facilities have not been
utilized by the Company as of August 31, 1997.
Subsequent to, and as a result of, the acquisition of the Company by
Chicago Miniature Lamp, Inc. (CML) (Note 15), the German Credit Lines, the First
Belgian Credit Line and the Second Belgian Credit Line were terminated and
repaid with the proceeds from intercompany loans from CML.
The classification "All other credit facilities" primarily represents the
borrowings under various local overdraft facilities of other Company locations.
Such borrowings and related covenants are not individually material to the
financial condition or results of operations of the Company. At August 31, 1997,
the Company has available credit under these facilities of approximately
L31,000,000 of which approximately L7,000,000 has been utilized by the Company.
The remaining facilities require the Company to comply with a number of
affirmative and negative covenants including satisfying certain financial tests
and ratios.
In addition, the Company had notes payable to shareholders at December 31,
1995. The original borrowings were made in January 1993 in connection with the
SLI acquisition. Interest was capitalized to the notes until December 31, 1994.
In December 1996, these notes and accrued interest were converted to 80,311
redeemable preference shares (Note 13).
Interest expense was L1,746,000, L4,193,000, and L4,409,000 for the eight
months ended August 31, 1997 and the years ended December 31, 1996 and December
31, 1995, respectively.
5. INCOME TAXES
The following is a summary of the provision for income taxes:
<TABLE>
<CAPTION>
EIGHT MONTHS
ENDED YEAR ENDED
------------ ---------------------------
AUGUST 31, DECEMBER 31, DECEMBER 31,
1997 1996 1995
------------ ------------ ------------
(L IN THOUSANDS)
<S> <C> <C> <C>
Current.......................................... L1,440 L2,245 L1,131
Deferred......................................... 98 9 2,171
------ ------ ------
L1,538 L2,254 L3,302
====== ====== ======
</TABLE>
The Company's effective income tax rate differs from the statutory tax rate
of the United Kingdom of 33% in 1995 and 1996 and from January 1, 1997 to March
31, 1997 (31% thereafter) primarily as a result of the nonrecognition of current
tax losses in certain countries. Additional differences result from the effect
of different income tax rates of other countries, the utilization of tax loss
carryforwards and differences in book and tax bases of noncurrent assets and
liabilities.
The significant items comprising deferred tax assets and liabilities are
tax loss carryforwards, reserves, and differences between book and tax bases of
depreciable assets. A valuation allowance of approximately L31 million, L30
million and of L26 million, respectively, has been recorded at August 31, 1997
and December 31, 1996 and 1995.
As of December 31, 1996, the last complete tax period of the Company, SLI
had estimated loss carryforwards for tax purposes of approximately L91 million.
Approximately 25% of these loss carryforwards relate to operations in France (a
portion of which will expire through 2002), approximately 25% of these loss
carryforwards relate to operations in Belgium (which do not expire) and the
remaining loss carryforwards relate to operations in various other tax
jurisdictions outside the United Kingdom.
<PAGE> 15
SYLVANIA LIGHTING INTERNATIONAL B.V. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)
6. RESTRUCTURING
The Company approved a restructuring plan as part of the SLI purchase
business combination in fiscal 1993. The purchase liabilities recorded included
approximately L26.7 million for severance and related costs and L13.4 million
for costs associated with the shutdown and consolidation of certain acquired
facilities. During 1996, L10.7 million of provision established in purchase
accounting in connection with the SLI acquisition were reversed and recorded as
negative goodwill, as management determined that these provisions were no longer
necessary. At August 31, 1997, liabilities for approximately L1.0 million in
severance costs and L2.1 million for facility-related costs remained on the
balance sheet.
7. COMMITMENTS
LEASES
The Company leases certain facilities and equipment under operating lease
and sublease agreements that expire at various dates from the current year to
2015. Certain of the agreements contain options to renew the leases for terms
similar to those currently in effect. The Company also has capital lease
obligations totaling L4,990,000 at August 31, 1997 which expire through December
2015. The current portion of the capital leases at August 31, 1997, is L485,000.
As of August 31, 1997, the aggregate minimum future commitments under operating
leases are as follows:
<TABLE>
<CAPTION>
(L IN THOUSANDS)
----------------
<S> <C>
1998 L 3,245
1999 2,780
2000 2,288
2001 1,251
2002 950
Thereafter 2,602
-------
L13,116
=======
</TABLE>
Rent expense for the eight months ended August 31, 1997 and the years ended
December 31, 1996 and December 31, 1995, was L4,550,000, L6,194,000 and
L5,703,000, respectively.
CAPITAL EXPENDITURES
The Company has obligations for capital expenditures of approximately
L3,100,000, L3,573,000 and L1,447,000 at August 31, 1997, December 31, 1996 and
December 31, 1995. In addition, the Company has an obligation to buy a plot of
land for DM 2,103,750 at the option of the landowner. This option expires in
2015.
8. CONTINGENCIES
The Company has received amounts from financial institutions secured on
trade receivables with recourse. These amounts totaled L7,194,000, L7,532,000
and L5,437,000 at August 31, 1997, December 31, 1996 and December 31, 1995,
respectively.
9. RELATED PARTY TRANSACTION
The Company had a monitoring and service agreement of US$500,000 per year
with CVC Capital Partners Limited, a related party. In connection with the
business combination described in Note 15, the amount accrued at August 31, 1997
(US$583,000) was paid in full and the agreement terminated.
<PAGE> 16
SYLVANIA LIGHTING INTERNATIONAL B.V. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)
10. CONCENTRATIONS
The Company purchased approximately 90% of its incandescent glass shells
from a single supplier and approximately 80% of its fluorescent glass tubing
from a second supplier, pursuant to long-term agreements.
At August 31, 1997, approximately 46% of the Company's employees were
covered by collective bargaining or similar agreements which expire at various
times. The Company believes it has satisfactory relations with the bargaining
units and therefore anticipates reaching new agreements on satisfactory terms as
existing agreements expire.
11. STOCK OPTIONS AND RIGHTS
During 1996, the Chief Executive Officer (CEO) exercised his option to
acquire 2,000 "A" ordinary shares and 1,980 preference shares at US$1 per
ordinary share and US$100 per preference share (L0.62 and L62 at August 31,
1997, respectively).
In addition, options had been granted to senior managers to subscribe for
0.25% of the equity of the Company in each class of shares at a price of US$2
per ordinary share and US$200 per preference share (L1.24 and L124, respectively
at August 31, 1997) and, for a group of senior operating managers, 2% of the
equity of the Company in each class of shares at a price of US$900 per ordinary
share and US$100 per preference share (L558 and L62, respectively at August 31,
1997), upon a sale or listing of the Company, as defined in the shareholders'
agreement. Upon exercise, these shares come from existing shareholders, so no
shares had been reserved for issuance under the option plans. No options have
been exercised at August 31, 1997. Effective with the sale of the Company in
September 1997, these options were exercised.
12. EMPLOYEE BENEFIT PLANS
DEFINED BENEFIT PLANS
The Company sponsors separate noncontributory, defined-benefit pension
plans (the Plans) covering eligible employees, including employees in foreign
countries. The principal locations are Germany, France, the United Kingdom, and
Switzerland. Benefits are based on years of service and compensation. The Plans'
August 31, 1997 and December 31, 1996 and 1995 combined funded status (based on
the most recent valuations) and the amounts recognized in the accompanying
consolidated balance sheets are as follows:
<TABLE>
<CAPTION>
AUGUST 31, DECEMBER 31, DECEMBER 31,
1997 1996 1995
---------- ------------ ------------
(L IN THOUSANDS)
<S> <C> <C> <C>
Actuarial present value of benefit obligations:
Vested benefits................................... L28,078 L28,963 L29,498
Nonvested benefits................................ 1,238 1,276 1,303
------- ------- -------
Accumulated benefit obligation...................... 29,316 30,239 30,801
Effect of future salary increases................... 3,585 3,699 3,767
------- ------- -------
Projected benefit obligation........................ 32,901 33,938 34,568
Plan assets at fair value, primarily common stocks
and fixed income securities....................... 24,640 24,076 24,698
------- ------- -------
Plan assets less than projected benefit
obligation........................................ 8,261 9,862 9,870
Unrecognized transition amount...................... -- 2,609 2,907
Unrecognized net (gain) loss........................ -- (2,276) (1,435)
Unamortized prior service cost...................... -- -- --
------- ------- -------
Accrued pension cost................................ L 8,261 L10,195 L11,342
======= ======= =======
</TABLE>
<PAGE> 17
SYLVANIA LIGHTING INTERNATIONAL B.V. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)
The components of net periodic pension cost for the significant locations
are as follows:
<TABLE>
<CAPTION>
EIGHT MONTHS
ENDED YEAR ENDED
------------ ---------------------------
AUGUST 31, DECEMBER 31, DECEMBER 31,
1997 1996 1995
------------ ------------ ------------
(DOLLARS IN THOUSANDS)
<S> <C> <C> <C>
Service cost..................................... L 791 L 1,265 L 1,353
Interest cost on projected benefit obligation.... 1,675 2,532 2,375
Actual return on plan assets..................... (1,218) (1,936) (1,651)
Net amortization and deferral.................... (206) (218) (168)
------- ------- -------
Net pension cost................................. L 1,042 L 1,643 L 1,909
======= ======= =======
</TABLE>
The assumptions used for the significant locations were as follows:
<TABLE>
<CAPTION>
1997 1996 1995
------------ ------------- -------------
<S> <C> <C> <C>
Discount rate used to determine present
value of the projected benefit
obligations.............................. 4.5% to 7.5% 4.5% to 9.0% 4.5% to 9.0%
Expected long-term rate of return on
assets................................... 5.0% to 8.5% 5.0% to 10.0% 5.0% to 10.0%
Assumed rate of increase in future
compensation levels...................... 2.5% to 4.5% 2.5% to 6.0% 2.5% to 6.0%
</TABLE>
DEFINED CONTRIBUTION PLANS
The Company sponsors a number of defined contribution plans. Participation
in these plans is available to employees in various countries. Company
contributions to these plans are based on either a percentage of employee
contributions or on a specified amount per hour based on the provisions of each
plan. The Company's expense under these plans was approximately L927,000,
L1,324,000, and L1,669,000 for the eight months ended August 31, 1997 and the
years ended December 31, 1996 and December 31, 1995, respectively.
13. CAPITAL STOCK
The "A" ordinary shares each carry the right to cast 100 votes, the "B"
ordinary shares each carry the right to cast 35 votes and the redeemable
preference shares each carry the right to cast one vote.
At August 31, 1997, the Company has issued 179,311 preference shares of
which 99,000 were issued in 1993 and 80,311 were issued in December 1996 upon
the conversion of notes payable to shareholders (Note 4).
The preference shares are mandatorily redeemable January 29, 2003, at an
amount equal to the face amount of the shares and any cumulative dividends
(L13.3 million at August 31, 1997). Dividends were 10% in 1995 and in 1996 the
articles of association were amended to fix the dividend rate at 12.5% per year.
The amount of dividends for the period ended August 31, 1997, includes L88,000
representing appreciation to face value.
14. FAIR VALUE OF FINANCIAL INSTRUMENTS
FOREIGN EXCHANGE RISK MANAGEMENT
The Company hedges certain foreign currency transactions and firm foreign
currency commitments by entering into forward exchange contracts (forward
contracts). Gains and losses associated with currency rate changes on forward
contracts hedging foreign currency transactions are recorded currently in
income. Gains and losses on forward contracts hedging foreign currency
commitments are deferred off-balance sheet and included as a component of the
related transaction, when recorded; however, a loss is not deferred if deferral
would lead to the recognition of a loss in future periods. The aggregate
realized foreign exchange
<PAGE> 18
SYLVANIA LIGHTING INTERNATIONAL B.V. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)
gains/(losses) recorded for the eight months ended August 31, 1997 and for the
years ended December 31, 1996 and 1995 were approximately L(201,000), L(420,000)
and L(693,000), respectively.
The forward contracts have maturities of one to 12 months. The
counterparties to the Company's forward contracts consist of a number of major
international financial institutions. The credit ratings and concentration of
risk of these financial institutions are monitored on a continuing basis and
management believes they present no significant credit risk to the Company.
At August 31, 1997, December 31, 1996 and December 31, 1995, the Company
had foreign currency forward contracts with notional amounts totaling L21.3
million, L28.7 million and L28.0 million, respectively.
FAIR VALUE OF FINANCIAL INSTRUMENTS
The carrying amount of cash and cash equivalents, accounts receivable,
short-term borrowings, accounts payable, and accruals are a reasonable estimate
of their fair value due to the short-term nature of these instruments. The
Company's long-term borrowings have variable interest rates and carrying value
approximates fair value at August 31, 1997.
15. SUBSEQUENT EVENTS
Effective September 1, 1997, Chicago Miniature Lamp, Inc. acquired all the
outstanding capital stock of SLI.
<PAGE> 19
CHICAGO MINIATURE LAMP, INC.
PRO FORMA CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
The unaudited Pro forma Condensed Consolidated Balance Sheet gives effect to the
acquisition of Sylvania Lighting International (SLI) as if it occurred August
31, 1997. The unaudited Pro Forma Condensed Consolidated Statement of
Operations for the nine months ended August 31, 1997 gives effect to the
following as if each had occurred on December 2, 1996: (i) the Power Lighting
Products (PLP) acquisition and (ii) the SLI acquisition. The unaudited Pro
Forma Condensed Statement of Operations for the year ended December 1, 1996
gives effect to the following as if each had occurred on December 4, 1995: (i)
the Alba acquisition, (ii) the PLP acquisition, and (iii) the SLI acquisition.
The unaudited Pro Forma Condensed Consolidated Financial Statements are based
on (i) Chicago Miniature Lamp, Inc.'s audited Consolidated Statement of Income
for the year ended December 1, 1996 and unaudited Consolidated Statement of
Income for the nine months ended August 31, 1997, (ii) Alba's unaudited
Combined Income Statement for the four months ended April 30, 1996, (iii) PLP,
formerly Valmont Electric, audited Consolidated Statement of Operations for the
year ended December 28, 1996 and unaudited Consolidated Statement of Operations
for the two months ended February 2, 1997 and (iv) SLI audited Consolidated
Statement of Operations of the year ended December 31, 1996 and audited
Consolidated Statement of Operations for the eight months ended August 31, 1997.
The SLI acquisition was accounted for under the purchase method of accounting.
The total purchase price for the acquisition was allocated to tangible assets
and liabilities based on management's estimate of their fair values.
The unaudited Pro Forma Condensed Consolidated Financial Statements do not
purport to be indicative of the combined results of operations that actually
would have occurred if the transactions described above had been effected at
the dates indicated or to project future results of operations for any period.
The unaudited Pro Forma Condensed Consolidated Financial Statements should be
read in conjunction with Chicago Miniature Lamp, Inc's Consolidated Financial
Statements included in the Company's Form 10-K filed with the Securities and
Exchange Commission and dated March 9, 1998 and SLI's audited Consolidated
Financial Statements and respective related notes thereto included elsewhere in
this filing.
1
<PAGE> 20
PRO FORMA BALANCE SHEET
as of August 31, 1997
(dollars in thousands)
<TABLE>
<CAPTION>
Company
Historical Pro Forma
as of SLI as of
8/31/97 Acquisition Adjustments 8/31/97
---------- ----------- ----------- ---------
<S> <C> <C> <C> <C>
Cash and Cash equivalents $ 69,938 $ 22,176 $ (40,000)(1) $ 52,114
Accounts receivable, net of allowance for doubtful accounts 34,120 90,316 -- 124,436
Inventories 45,682 89,566 -- 135,248
Prepaid expenses and other current assets 4,156 16,828 -- 20,984
---------- ---------- ----------- ----------
Total current assets 153,896 218,886 (40,000) 332,782
Property, plant and equipment, net 72,109 65,030 114,937 (2) 252,076
Other long-term assets 16,081 4,482 4,703 (5) 25,266
---------- ---------- ----------- ---------
Total assets $ 242,086 $ 288,398 $ 79,640 $ 610,124
========== ========== =========== =========
Short-term notes payable $ 32,395 $ 6,906 $ -- $ 39,301
Current portion of long-term debt 671 -- -- $ 671
Accounts payable and accrued expenses 43,927 130,690 3,253 (3) 177,870
---------- ---------- ----------- ---------
Total current liabilities 76,993 137,596 $ 3,253 217,842
Long-term debt, less current portion 665 42,086 121,536 (4) 164,287
Other long-term liabilities 9,567 48,161 15,406 (5) 73,134
Redeemable preference shares -- 20,341 (20,341)(6) --
Stockholders' equity 154,861 40,214 (40,214)(6) 154,861
---------- ---------- ----------- ---------
Total liabilities and stockholder's equity $ 242,086 $ 288,398 $ 79,640 $ 610,124
========== ========== =========== =========
</TABLE>
- ----------------------------------------------------
(1) Approximately $40,000,000 of cash on hand was used to finance the
acquisition of SLI
(2) Step-up of approximately $115,000,000 to fair market value of SLI's fixed
assets resulting from the acquisition of SLI.
(3) Recognition of provisions established as of acquisition date and accrued
professional fees in connection with the SLI acquisition.
(4) Increase in bank debt to finance the SLI acquisition.
(5) Recognition of provisions established in connection with the SLI
acquisition and adjustment for negative goodwill.
(6) Elimination in consolidation of redeemable performance shares and
stockholders' equity of SLI prior to the acquisition.
<PAGE> 21
PRO FORMA CONSOLIDATED STATEMENT OF OPERATIONS
Nine Months Ended August 31, 1997
(In thousands, except per share data)
<TABLE>
<CAPTION>
COMPANY
HISTORICAL PRO FORMA PRO FORMA PRO FORMA
NINE MONTHS ADJUSTMENTS ADJUSTMENTS NINE MONTHS
ENDED PLP FOR PLP SLI FOR SLI ENDED
8/31/97 ACQUISITION (1) ACQUISITION ACQUISITION (4) ACQUISITION 8/31/97
----------- ----------- ----------- ----------- ----------- -----------
<S> <C> <C> <C> <C> <C> <C>
Net sales $131,817 $15,491 $ - $409,914 $ - $557,222
Cost of products sold 93,231 13,149 (50)(2) 266,176 (5,676)(5) 366,830
-------- ------- ---- -------- ------- --------
Gross Margin 38,586 2,342 50 143,738 5,676 190,392
Selling, general and
administrative 22,293 2,445 (25)(2) 135,143 159,856
Restructuring charges 1,415 1,415
-------- ------- ---- -------- ------- --------
Operating income 14,878 (103) 75 8,595 5,676 29,121
Interest expense (income) (2,591) 2,776 9,368 (6) 9,553
Other expense (income) (1,944) (5) 1,111 (838)
-------- ------- ---- -------- ------- --------
Income before income taxes 19,413 (98) 75 4,708 (3,692) 20,406
Income taxes 6,433 (35) 28 (3) 3,784 (3,428) (7) 6,781
-------- ------- ---- -------- ------- --------
Net income $ 12,980 $ (63) $ 47 $ 924 $ (264) $ 13,625
======== ======= ==== ======== ======= ========
Earnings per common share $ 0.68 $ 0.71
======== ========
Weighted average shares
outstanding 19,201 19,201
======== ========
</TABLE>
- ----------------------------------
(1) Two months of PLP operations have been added.
(2) Depreciation has been adjusted to reflect revised estimated useful lives
and revaluation of fixed assets to fair market value as if the PLP
acquisition had occurred on December 2, 1996.
(3) The adjustment gives effect to an effective tax rate of approximately 31%
for the PLP acquistion and related Pro Forma adjustments.
(4) Nine months of SLI's operations have been added.
(5) Depreciation has been adjusted to reflect revised estimated useful lives
and revaluation of fixed assets to fair market value as if the SLI
acquisition had occurred on December 2, 1996.
(6) Interest expense has been adjusted to reflect interest expense on bank
debt as a result of the SLI acquisition, as if this transactions occurred
on December 2, 1996.
(7) The adjustment gives effect to an effective tax rate of approximately 35%
for the SLI acquisition and related Pro Forma adjustments.
<PAGE> 22
PRO FORMA CONSOLIDATED STATEMENT OF OPERATIONS
Years Ended December 1, 1996
(In thousands, except per share data)
<TABLE>
<CAPTION>
Company Pro Forma Pro Forma
Historical Adjustments Adjustments
Year Ended Alba for Alba PLP for PLP SLI
12/1/96 Acquisition (1) Acquisition Acquisition(5) Acquisition Acquisition (8)
---------- ----------- ----------- -------------- ----------- -----------
<S> <C> <C> <C> <C> <C> <C>
Net sales $ 94,171 $ 10,668 $ - $ 92,945 $ - $ 576,800
Cost of products sold 61,147 8,146 51 (2) 78,894 (326)(6) 410,398
---------- ----------- ----------- ----------- ----------- -----------
Gross margin 33,024 2,522 (51) 14,051 326 166,402
Selling, general and admin. 14,552 2,938 (474)(3) 14,671 (147)(6) 153,133
--------- ----------- ----------- ----------- ----------- -----------
Operating income 18,472 (416) 423 (620) 473 13,269
Interest expense 301 141 - - 5,892
Other income (1,294) (49) (32) (671)
---------- ---------- ----------- ----------- ----------- -----------
Inc. before income taxes 19,465 (508) 423 (588) 473 8,048
Income taxes 6,029 46 (72)(4) (207) 170 (7) 3,644
---------- ---------- ----------- ----------- ----------- -----------
Net income 13,436 (554) 495 $ (381) 303 4,404
========== ========== =========== =========== =========== ===========
Earnings per share 0.83
==========
Weighted average shares
outstanding 16,238
==========
<CAPTION>
Pro Forma
Adjustments Pro Forma
for SLI Year Ended
Acquisition 12/1/96
----------- ----------
<S> <C> <C>
Net sales $ - $ 774,584
Cost of products sold (7,568)(9) $ 550,742
----------- ----------
Gross margin 7,568 223,842
Selling, general and admin. 184,673
----------- ----------
Operating income 7,568 39,169
Interest expense 8,036(10) 14,370
Other income (2,046)
----------- ----------
Inc. before income taxes (468) 26,845
Income taxes (991)(11) 8,619
----------- ----------
Net income $ 523 $ 18,226
=========== ==========
Earnings per share $ 0.95
==========
Weighted average shares
outstanding 19,201 (12)
==========
</TABLE>
- ---------------------
(1) Four months of Alba operations have been added.
(2) Depreciation has been adjusted to reflect revised useful lives and
revalutaion of fixed assets to fair market value as if the Alba
acquisition had occurred on December 4, 1995.
(3) Gives effect to the Alba Acquisition and adjustments to selling,
general and administrative expenses resulting from the implementation
of the Company's acquisition plans to reduce sales commissions and realign
certain operations.
(4) The adjustment gives effect to an effective tax rate of approximately 31%
for the Alba acquisition and related Pro Forma adjustments.
(5) Twelve months of PLP operations have been added.
(6) Depreciation has been adjusted to reflect revised estimated useful lives
and revaluation of fixed assets to fair market value as if the PLP
acquisition had occurred on December 4, 1995.
(7) The adjustment gives effect to an effective tax rate of approximately 31%
for the PLP acquisition and related Pro Forma adjustments.
(8) Twelve months of SLI operations have been added.
(9) Depreciation has been adjusted to reflect revised estimated useful lives
and revaluation of fixed assets to fair market value as if the SLI
acquisition had occurred on December 4, 1995.
(10) Net interest expense has been adjusted to reflect interest expense on
bank debt incurred as a result of acquisition and interest income on net
proceeds from October 1996 public offering, as if these transactions
occurred on December 4, 1995.
(11) The adjustment gives effect to an effective tax rate of approximately 35%
for the SLI acquisition and related Pro Forma adjustments.
(12) Pro forma weighted average shares outstanding adds 2,963,000 shares to the
Company historical for the year ended December 1, 1996 to give effect to
the October 1996 public offering, as if these transactions occurred on
December 4, 1995.
<PAGE> 1
EXHIBIT 23.1
CONSENT OF INDEPENDENT AUDITORS
We consent to the incorporation by reference in the Registration Statement
(Form S-8 No. 33-99070) pertaining to the Chicago Miniature Lamp, Inc. 1995
Incentive and Non-Statutory Stock Option Plan of our report dated January 9,
1998, except for the 1998 stock split as described in Note 2, as to which the
date is February 11, 1998, with respect to the consolidated financial statements
of Sylvania Lighting International B.V. included in the Current Report (Form
8-KA) of Chicago Miniature Lamp, Inc. dated April 3, 1998.
Ernst & Young LLP
Chicago, Illinois
April 3, 1998
