SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K/A
(Amendment No. 3)
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the
Securities Exchange Act of 1934
Date of report (Date of earliest event reported) January 16, 1997
MAKO MARINE INTERNATIONAL, INC.
(Exact name of registrant as specified in its charter)
Florida 0-26618 65-0501535
(State or other jurisdiction (Commission (IRS Employer
or incorporation) File Number) Identification No.)
4355 N.W. 128th Street
Miami, Florida 33054
(Address of principal executive offices) (Zip Code)
(Registrant's telephone number, including area code) (305)685-6591
<PAGE>
Item 7. Financial Statements and Exhibits.
(a) Financial Statements - See Index to Financial Statements
(b) Pro Forma Financial Information - See Index to Financial Statements
(c) Exhibits - See Exhibit Index
2
<PAGE>
EXHIBIT INDEX
Exhibit Number Description
- -------------- -----------
2.1 Mako Stock Purchase Agreement.*
2.2 CAVC Stock Purchase Agreement.*
2.3 Letter dated December 4, 1996.*
2.4 Letter Agreement dated January 16, 1997.**
2.5 Escrow Agreement dated January 16, 1997 among
SunTrust Bank, Miami, N.A., as escrow agent, Mako,
CAVC and Tracker.**
2.6 Amendment dated January 16, 1997 to Douglas W.
Baena Employment Agreement.**
2.7 Employment Agreement dated July 1, 1996 between
Mako and Hugh Landon Russ, Jr.**
2.8 Amendment dated January 16, 1997 to Hugh Landon
Russ, Jr. Employment Agreement.**
2.9 Amendment dated January 16, 1997 to Lawrence Tierney
Employment Agreement.**
2.10 Letter from BDO Seidman dated February 17, 1997
regarding Mako's change of independent accountants.***
*Filed as an Exhibit to Mako's Form 8-K, dated December 13, 1996.
**Filed as an Exhibit to Mako's Form 8-K, dated January 30, 1997, which Form
8-K is amended hereby.
***Filed as an Exhibit to Mako's Form 8-K/A (Amendment No. 1), dated February
18, 1997, which Form 8-K/A is amended hereby.
3
<PAGE>
INDEX TO FINANCIAL STATEMENTS
SILVER KING AND SEACRAFT BOATS (former division of Tracker Marine, L.P.
acquired by Registrant on January 16, 1997)
Report of Independent Public Accountants..............................F-2
Combined Statement of Net Assets as of December 28, 1996..............F-3
Combined Statement of Operations and Changes in Net Assets
for the fiscal year ended December 28, 1996...........................F-4
Combined Statement of Cash Flows for the fiscal year ended
December 28, 1996.....................................................F-5
Notes to Combined Financial Statements................................F-6
UNAUDITED PRO FORMA FINANCIAL
STATEMENTS MAKO MARINE INTERNATIONAL, INC.
Unaudited Pro Forma Combined Balance Sheet December 28, 1996..........F-9
Unaudited Pro Forma Combined Statements of Operations
for Six Months Ended December 28, 1996...............................F-10
Unaudited Pro Forma Combined Statement of Operations
for the fiscal year ended June 29, 1996..............................F-11
Notes to Unaudited Pro Forma Combined Financial Statements...........F-12
F-1
<PAGE>
REPORT OF INDEPENDENT PUBLIC ACCOUNTANTS
To Tracker Marine, L.P.:
We have audited the accompanying combined statement of net assets of Silver King
and Seacraft Boats (divisions of Tracker Marine, L.P.) as of December 28, 1996,
and the related combined statements of operations and changes in net assets and
cash flows for the year ended December 28, 1996. These financial statements are
the responsibility of the management of Tracker Marine, L.P. Our responsibility
is to express an opinion on these financial statements based on our audit.
We conducted our audit 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 audit provides a reasonable basis for our opinion.
In our opinion, the financial statements referred to above present fairly, in
all material respects, the net assets of Silver King and Seacraft Boats as of
December 28, 1996, and the results of their operations and their cash flows for
the year then ended, in conformity with generally accepted accounting
principles.
Dallas, Texas, /s/ Arthur Andersen LLP
February 5, 1997
F-2
<PAGE>
SILVER KING AND SEACRAFT BOATS
(Divisions of Tracker Marine, L.P.)
COMBINED STATEMENT OF NET ASSETS
DECEMBER 28, 1996
ASSETS:
Current assets-
Cash $ 10,070
Accounts receivable 266,618
Inventories 683,174
Prepaid expenses 85,007
------------
Total current assets 1,044,869
Property and equipment, at cost-
Land and building 523,525
Fixtures and equipment 594,881
Construction in progress 101,604
------------
Total property and equipment 1,220,010
Less- Accumulated depreciation (353,959)
Total property and equipment, net 866,051
Total assets 1,910,920
LIABILITIES:
Accrued liabilities 34,825
Total liabilities 34,825
Total combined net assets $1,876,095
The accompanying notes are an integral part of this combined financial
statement.
F-3
<PAGE>
SILVER KING AND SEACRAFT BOATS
(Divisions of Tracker Marine, L.P.)
COMBINED STATEMENT OF OPERATIONS AND CHANGES IN NET ASSETS
FOR THE FISCAL YEAR ENDED DECEMBER 28, 1996
NET SALES $1,544,943
COST OF GOODS SOLD 1,936,003
GROSS MARGIN (391,060)
OPERATING EXPENSES:
Administrative 235,892
Sales and marketing 124,323
Research and development 302,946
-----------
Total operating expenses 663,161
NET LOSS (1,054,221)
NET ASSETS, beginning of year 2,930,316
NET ASSETS, end of year $1,876,095
The accompanying notes are an integral part of this combined financial
statement.
F-4
<PAGE>
SILVER KING AND SEACRAFT BOATS
(Divisions of Tracker Marine, L.P.)
COMBINED STATEMENT OF CASH FLOWS
FOR THE FISCAL YEAR ENDED DECEMBER 28, 1996
CASH FLOWS FROM OPERATING ACTIVITIES:
Net loss $(1,054,221)
Adjustments to reconcile net loss to net cash
used in operating activities-
Depreciation and amortization 134,403
Changes in-
Accounts receivable (263,702)
Inventories (630,753)
Prepaid expenses (84,094)
Accrued liabilities 1,492
-----------
Net cash used in operating activities (1,896,875)
-----------
CASH FLOWS FROM INVESTING ACTIVITIES:
Purchases of property and equipment, net (376,480)
-----------
Net cash used in investing activities (376,480)
-----------
CASH FLOWS FROM FINANCING ACTIVITIES:
Obligations funded by Tracker Marine, L.P. 2,283,425
-----------
Net cash provided by financing activities 2,283,425
-----------
INCREASE IN CASH 10,070
CASH, beginning of year -
CASH, end of year $ 10,070
===========
The accompanying notes are an integral part of this combined financial
statement.
F-5
<PAGE>
SILVER KING AND SEACRAFT BOATS
(Divisions of Tracker Marine, L.P.)
NOTES TO COMBINED FINANCIAL STATEMENTS
DECEMBER 28, 1996
1. ORGANIZATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES:
Organization
The combined financial statements include the accounts of Silver King and
Seacraft Boats (the "Divisions"). The Divisions are owned by Tracker Marine,
L.P. ("Tracker"), a Missouri limited partnership. In January 1997, a stock
purchase agreement was entered into between Tracker and Mako Marine
International ("Mako") for the purchase of Mako common stock. As part of the
stock purchase agreement, the Divisions are being contributed to Mako.
Nature of Operations
The Divisions manufacture and sell saltwater boats by means of wholesale
distribution to authorized dealers.
Basis of Accounting
The financial statements are prepared on the accrual basis of accounting.
Fiscal Year
Tracker's, and therefore the Divisions', fiscal year ends on the last Saturday
of the year.
Revenue Recognition
Sales are recorded by the Divisions when products are shipped to dealers.
Provisions for approved sales incentive programs normally are recognized as
sales deductions at the time of sale. Sales incentive programs approved
subsequent to the time that related sales have been recorded are recognized when
the programs are approved.
Inventories
Inventories are stated at the lower of cost or market using the last-in,
first-out (LIFO) cost method. Raw materials inventories include purchased parts
F-6
<PAGE>
and supplies to be used in manufactured products. Work in process and finished
good inventories include material, labor, and overhead costs incurred in the
manufacturing process.
Property and Equipment
Property and equipment are depreciated over the estimated useful life of each
asset. Annual depreciation is computed using the straight-line method primarily
over the following estimated useful lives:
Depreciable Assets Lives (In Years)
------------------ ----------------
Buildings 15 - 30
Fixtures and equipment 3 - 5
Product Warranty Costs and Dealer Rebate Accruals
Anticipated costs related to product warranty are expensed at the time of the
sale of the products and are accounted for in cost of goods sold.
Research and Development Costs
Research and development costs related to both present and future products are
charged to expense as incurred. Such costs were approximately $303,000 for the
year ended December 28, 1996.
Fair Values of Financial Instruments
The carrying amounts of cash, accounts receivable, accounts payable, and accrued
liabilities approximate fair value due to the short-term maturities of these
assets and liabilities.
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 reported amounts of assets and liabilities and disclosure of
contingent assets and liabilities at the date of the financial statements and
the reported amounts of revenues and expenses during the reporting period.
Actual results could differ from these estimates.
2. DEALER FLOOR PLAN AGREEMENT:
Tracker has a financing and floor planning agreement with a commercial finance
company that provides wholesale financing for the authorized dealers' purchases
from the Divisions. Thus, the Divisions receive payments through dealer sales
from the commercial finance companies and therefore bear no risk on collections
through these types of sales.
F-7
<PAGE>
3. INVENTORIES:
Inventories consisted of the following at December 28, 1996:
Raw materials $209,736
Work in process 597
Finished goods and accessories 513,445
---------
723,778
Less- LIFO reserve (40,604)
Total inventories $683,174
4. INCOME TAXES:
As the Company is a division of Tracker, a Missouri limited partnership, the
accompanying financial statements do not include a provision for income taxes
since the taxable income of Tracker (the Partnership) is included in the tax
returns of the individual partners.
5. RELATED PARTY:
Tracker assumes and pays all obligations of the Divisions. Total obligations
assumed and paid by Tracker in 1996 were approximately $2,283,000.
F-8
<PAGE>
<TABLE>
Mako Marine International, Inc.
Unaudited Proforma Combined Balance Sheet
December 28, 1996
<CAPTION>
Mako Silver King Proforma Proforma
Marine Seacraft Adjustments Combined
- ----------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Assets
Current assets
Cash 162,118 10,070 4,140,000 #1 4,312,188
Accounts receivable 340,072 266,618 - 606,690
Inventories 2,361,496 683,174 - 3,044,670
Prepaid and other assets 362,894 85,007 - 447,901
- ----------------------------------------------------------------------------------------------------------------------------------
Total current assets 3,226,580 1,044,869 4,140,000 8,411,449
Property and equipment 4,223,328 1,220,010 5,443,338
less accumulated depreciation (1,373,912) (353,959) 1,373,912 #2 (353,959)
- ----------------------------------------------------------------------------------------------------------------------------------
2,849,416 866,051 1,373,912 5,089,379
- ----------------------------------------------------------------------------------------------------------------------------------
Other assets 137,866 - (137,866) #3 -
Goodwill - - 3,577,174 #2 3,577,174
- ----------------------------------------------------------------------------------------------------------------------------------
6,213,862 1,910,920 8,953,220 17,078,002
==================================================================================================================================
Liabilities and Stockholders' Equity
Liabilities
Current liabilities
Accounts payable 2,701,223 - (129,400) #4 2,571,823
Accrued expenses 1,110,655 34,825 1,145,480
Accrued interest 238,105 - - 238,105
Due from affiliates 375,906 - - 375,906
Current portion of long term debt 660,403 - - 660,403
- ----------------------------------------------------------------------------------------------------------------------------------
Total current liabilities 5,086,292 34,825 (129,400) 4,991,717
Note payable, affiliate 825,000 825,000
Long term debt, less current portion 1,423,059 84,291 #3 1,507,350
- ----------------------------------------------------------------------------------------------------------------------------------
Total liabilities 7,334,351 34,825 (45,109) 7,324,067
Stockholders' equity
Net assets 1,876,095 (1,876,095) #5
Preferred stock
Common stock 26,550 64,000 #1 90,550
Additional paid-in capital 6,317,873 3,345,512 #1 9,663,385
Deficit (7,464,912) 7,464,912 #1 -
- ----------------------------------------------------------------------------------------------------------------------------------
Total stockholders' equity (1,120,489) 1,876,095 8,998,329 9,753,935
- ----------------------------------------------------------------------------------------------------------------------------------
6,213,862 1,910,920 8,953,220 17,078,002
==================================================================================================================================
</TABLE>
The accompanying notes to unaudited proforma combined financial statements are
an integral part of this statement.
F-9
<PAGE>
<TABLE>
Mako Marine International, Inc.
Unaudited Proforma Combined Statement of Operations
For the Year Six Months Ended December 28, 1996
<CAPTION>
Mako Silver King Proforma Proforma
Marine Seacraft Adjustments Combined
- -------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
Net sales 9,287,076 998,867 - 10,285,943
Cost of products sold 8,469,674 1,087,612 - 9,557,286
- -------------------------------------------------------------------------------------------------------------------
Gross profit 817,402 (88,745) - 728,657
- -------------------------------------------------------------------------------------------------------------------
Operating and other expenses:
Selling, general and administrative 2,544,895 468,890 59,620 #2 3,073,405
Interest 185,661 - - 185,661
Other
48,158 - - 48,158
- -------------------------------------------------------------------------------------------------------------------
Total expenses 2,778,714 468,890 59,620 3,307,224
- -------------------------------------------------------------------------------------------------------------------
Loss before other income (1,961,312) (557,635) (59,620) (2,578,567)
Other Income (90,466) - - (90,466)
- -------------------------------------------------------------------------------------------------------------------
Net loss (2,051,778) (557,635) (59,620) (2,669,033)
===================================================================================================================
Net loss per common share (0.75) N/A N/A (0.29)
===================================================================================================================
Average number of common shares 2,724,048 N/A 6,400,000 #1 9,124,048
===================================================================================================================
</TABLE>
The accompanying notes to unaudited proforma combined financial statements are
an integral part of this statement.
F-10
<PAGE>
<TABLE>
Mako Marine International, Inc.
Unaudited Proforma Combined Statement of Operations
For the Year Ended June 29, 1996
<CAPTION>
Mako Silver King Proforma Proforma
Marine Seacraft Adjustments Combined
- -------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Net sales 19,863,331 550,326 - 20,413,657
Cost of products sold 17,817,667 951,673 - 18,769,340
- -------------------------------------------------------------------------------------------------------------------
Gross profit 2,045,664 (401,347) - 1,644,317
- -------------------------------------------------------------------------------------------------------------------
Operating and other expenses:
Selling, general and administrative 4,548,703 275,576 119,240 4,943,519
Interest 312,174 - - 312,174
Other 243,827 - - 243,827
- ------------------------------------------------------------------------------------------------------------------
Total expenses 5,104,704 275,576 119,240 5,499,520
- -------------------------------------------------------------------------------------------------------------------
Loss before other income (3,059,040) (676,923) (119,240) (3,855,203)
Other Income 103,265 - - 103,265
- -------------------------------------------------------------------------------------------------------------------
Net loss (2,955,775) (676,923) (119,240) (3,751,938)
===================================================================================================================
Net loss per common share (1.19) N/A N/A (0.42)
===================================================================================================================
Average number of common shares 2,484,662 N/A 6,400,000 #1 8,884,662
===================================================================================================================
</TABLE>
The accompanying notes to unaudited proforma combined financial statements are
an integral part of this statement.
F-11
<PAGE>
Mako Marine International, Inc.
Notes to Unaudited Proforma Combined Financial Statements
The unaudited proforma combined financial statements gives effect to the
purchase by Tracker L.P. ("Tracker") of 81% of the outstanding Common Stock of
Mako Marine International, Inc. ("Mako") for cash in the amount of $4,140,000
and the simultaneous contribution by Tracker of its saltwater fishing boat
manufacturing divisions, Silver King / Seacraft, to Mako. The unaudited proforma
combined balance sheet as of December 28, 1996 and the unaudited proforma
combined statement of operations for the year ended June 29, 1996 and the six
months ended December 28, 1996 reflect adjustments to the Mako and Silver King /
Seacraft historical balance sheets and statements of operations to give effect
to the transaction discussed above as if such transaction had been consummated
at December 28, 1996, or at the beginning of the period presented. The
acquisition and simultaneous contribution will be accounted for under the
purchase method of accounting. The unaudited proforma combined financial
statements may not necessarily be indicative of the results that would actually
have been obtained had the transaction occurred on the dates indicated or which
may be obtained in the future. In the opinion of the Company's management, all
adjustments necessary to present fairly such unaudited proforma combined
financial statements have been included.
1. Represents cash received in connection with the issuance to Tracker of
6,400,000 shares of Mako Common Stock.
2. Amount represents the step-up in cost basis of certain assets and the
accrual of certain transactional related liabilities discussed below in 5.
The excess of Tracker's purchase price over Mako's historical cost is
allocated based upon fair market values of such assets and the amount of
transactional related liabilities. That portion of the purchase price in
excess of the resulting book value of Mako has been allocated to Goodwill,
which will be amortized over a 30 year period. The amount included on the
Statement of Operations represents the amount of Goodwill allocated to the
period presented.
3. In connection with the transaction and the accompanying negotiations with
Mercury Marine, Mako's debt to Mercury Marine, and the associated deferred
asset related to this debt, was revalued.
4. In connection with the transaction, there has been a net reduction in
certain liabilities, primarily payables to vendors.
5. Represents the elimination of Silver King / Seacraft net asset. Such
amounts have been included as a component of Tracker's purchase price. See
note to 2 above.
F-12
<PAGE>
SIGNATURE
Pursuant to the requirements of the Securities Exchange Act of 1934, the
Registrant has duly caused this report, as amended, to be signed on its behalf
by the undersigned thereunto duly authorized.
Date: August 18, 1997
MAKO MARINE INTERNATIONAL, INC.
By: /s/ Kenneth Burroughs
Title: President and Chief Executive Officer
S-1
