<PAGE>
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K/A
AMENDMENT NO. 1
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the
Securities Exchange Act of 1934
Date of Report (date of earliest event reported):
May 16, 1996
AMX CORPORATION
(Exact name of registrant as specified in its charter)
TEXAS 0-26924 75-1815822
(State or other (Commission (I.R.S. Employer
jurisdiction of File Number) Identification No.)
incorporation)
11995 FORESTGATE DRIVE
DALLAS, TEXAS 75243
(Address of principal executive offices, including zip code)
Registrant's telephone number, including area code (214) 644-3048
<PAGE>
AMENDMENT NO. 1
The undersigned registrant hereby amends Item 7 -- "Financial Statements
and Exhibits," as set forth below.
ITEM 7. FINANCIAL STATEMENTS AND EXHIBITS
(a) Financial statements of business acquired.
See Appendix A attached hereto.
(b) Pro forma financial information.
See Appendix B attached hereto.
(c) Exhibits.
2.1 Agreement of Merger and Plan of Reorganization,
dated as of May 16, 1996, among AMX Corporation,
AMX Acquisition Corporation, SPS International,
Inc. (now known as AudioEase, Inc.), John P.
Sundquist and Sandra P. Sundquist, Donald J.
Heiskell and Janice T. Heiskell, Bruce R. Munroe,
David A. Daniels, and Thomas J. Gleason (previously
filed with and incorporated by reference from the
exhibit of the same number in the Company's Current
Report on Form 8-K filed May 30, 1996, file
no. 0-26924).
23.1 Consent of Ernst & Young LLP.
2
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this amended report to be signed on its behalf by
the undersigned hereunto duly authorized.
AMX CORPORATION
August 29, 1996 By: /s/ Joe Hardt
----------------------------------
Joe Hardt, President
3
<PAGE>
APPENDIX A
<PAGE>
SPS International, Inc. dba AudioEase, Inc.
Financial Statements
Year ended August 31, 1995
CONTENTS
Report of Independent Auditors....................................... A-1
Audited Financial Statements
Balance Sheet........................................................ A-2
Statement of Income and Retained Earnings............................ A-3
Statement of Cash Flows.............................................. A-4
Notes to Financial Statements........................................ A-5
Interim Financial Statements (Unaudited)
Balance Sheet (Unaudited)............................................ A-10
Statement of Income and Retained Earnings (Unaudited)................ A-11
<PAGE>
Report of Independent Auditors
Board of Directors
SPS International, Inc. dba AudioEase, Inc.
We have audited the accompanying balance sheet of SPS International, Inc. dba
AudioEase, Inc. as of August 31, 1995, and the related statements of income
and retained earnings and cash flows for the year then ended. 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 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 financial position of SPS International, Inc. dba
AudioEase, Inc. at August 31, 1995 and the results of its operations and its
cash flows for the year then ended in conformity with generally accepted
accounting principles.
ERNST & YOUNG LLP
Dallas, Texas
April 19, 1996
A-1
<PAGE>
SPS International, Inc. dba AudioEase, Inc.
Balance Sheet
August 31, 1995
ASSETS (NOTE 5)
Current assets:
Accounts receivable (NOTE 8) $322,907
Inventories (NOTE 3) 407,842
Prepaid expenses 6,344
Deferred income tax (NOTE 6) 11,028
--------
Total current assets 748,121
Property and equipment, net (NOTE 4) 95,705
Other assets 1,735
--------
Total assets $845,561
--------
--------
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Bank overdraft $ 45,693
Accounts payable (NOTE 8) 145,503
Accrued liabilities 80,093
Income taxes payable 11,208
Line of credit (NOTE 5) 64,158
Notes payable to stockholders (NOTE 5) 163,746
Note payable, current portion (NOTE 5) 4,725
Obligations under capital leases, current portion
(NOTE 5) 14,754
--------
Total current liabilities 529,880
Long-term obligations, net of current portion:
Note payable (NOTE 5) 10,193
Obligations under capital leases (NOTE 5) 37,882
--------
48,075
Deferred income tax (NOTE 6) 3,064
Commitments (NOTE 9)
Stockholders' equity (NOTE 7):
Common stock, $.10 par value:
Authorized shares - 10,000
Issued and outstanding shares - 1,346 135
Additional paid-in capital 200,055
Retained earnings 64,352
--------
Total stockholders' equity 264,542
--------
Total liabilities and stockholders' equity $845,561
--------
--------
SEE ACCOMPANYING NOTES.
A-2
<PAGE>
SPS International, Inc. dba AudioEase, Inc.
Statement of Income and Retained Earnings
Year ended August 31, 1995
Net sales $3,068,819
Cost of goods sold 1,808,703
----------
Gross profit 1,260,116
Selling, general and administrative 932,450
----------
Operating income 327,666
Other income (expense):
Interest income 198
Interest expense (45,430)
----------
Income before income taxes 282,434
Provision for income taxes (NOTE 6) 48,308
----------
Net income 234,126
Retained earnings (deficit), beginning of year (169,774)
----------
Retained earnings, end of year $ 64,352
----------
----------
SEE ACCOMPANYING NOTES.
A-3
<PAGE>
SPS International, Inc. dba AudioEase, Inc.
Statement of Cash Flows
Year ended August 31, 1995
OPERATING ACTIVITIES
Net income $ 234,126
Adjustments to reconcile net income to net cash
provided by operating activities:
Depreciation and amortization 15,290
Deferred income taxes (2,900)
Changes in operating assets and liabilities:
Accounts receivable (102,080)
Inventories (75,949)
Prepaid expenses (5,654)
Bank overdraft 37,018
Accounts payable (69,932)
Accrued liabilities 9,064
Income taxes payable 11,208
---------
Net cash provided by operating activities 50,191
INVESTING ACTIVITIES
Acquisition of property and equipment, net (9,581)
Other (243)
---------
Net cash used in investing activities (9,824)
FINANCING ACTIVITIES
Net payments on line of credit (35,000)
Payments on notes payable to stockholder (2,396)
Payments on capital lease obligation (1,022)
Payments on notes payable (1,949)
---------
Net cash used in financing activities (40,367)
---------
Net decrease in cash -
Cash balance at beginning of year -
---------
Cash balance at end of year $ -
---------
---------
SUPPLEMENTAL SCHEDULE OF NONCASH INVESTING AND
FINANCING ACTIVITY
Capital lease obligations of $53,658 were incurred
when the Company entered into leases for certain
furniture and equipment.
Accrued interest payable of $16,724 was rolled into
the note payable to stockholder.
SEE ACCOMPANYING NOTES.
A-4
<PAGE>
SPS International, Inc. dba AudioEase, Inc.
Notes to Financial Statements
August 31, 1995
1. ORGANIZATION
SPS International, Inc. (the Company) was incorporated under the laws of the
State of Colorado on August 4, 1992. The Company operates under the name
AudioEase, Inc. The Company designs and manufactures integrated audio/video
remote control systems for use primarily in luxury residences. The Company
distributes primarily to dealers inside the United States.
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.
INVENTORIES
Inventories are stated at the lower of cost (first in, first out method) or
market.
PROPERTY AND EQUIPMENT
Property and equipment, which includes assets under capital leases, is stated
at cost and depreciated and amortized over the lesser of the estimated useful
lives of the assets or the remaining term of the leases. Depreciation and
amortization expense are calculated using the straight-line method over five
to seven years.
REVENUE RECOGNITION
Revenue is recognized upon shipment of the product.
INCOME TAXES
The Company accounts for income taxes using the liability method.
RESEARCH AND DEVELOPMENT COSTS
The Company incurred approximately $110,000 of research and development costs
during the year ended August 31, 1995, which have been included in selling,
general and administrative expenses.
A-5
<PAGE>
SPS International, Inc. dba AudioEase, Inc.
Notes to Financial Statements (Continued)
3. INVENTORIES
Inventories at August 31, 1995 are as follows:
Raw materials $262,853
Work in progress 104,060
Finished goods 40,929
--------
$407,842
--------
--------
4. PROPERTY AND EQUIPMENT
Property and equipment at August 31, 1995 consists of the following:
Automobile $ 17,357
Furniture and equipment 52,681
Equipment under capital lease 44,320
Test equipment 6,570
--------
120,928
Less accumulated depreciation and amortization 25,223
--------
$ 95,705
--------
--------
5. NOTES PAYABLE AND CAPITAL LEASE OBLIGATIONS
Notes payable and capital lease obligations at August 31, 1995 are as follows:
Line of credit:
$100,000 Revolving line of credit agreement with a financial
institution; due April 10, 1996 with interest payable
monthly at the bank's index rate plus 1.5%; collateralized
by all assets and guaranteed by the President of the Company $ 64,158
Note payable:
Note payable to financial institution due in monthly installments
of $481 of principal and interest at 8.5% with final payment due
June 1998; collateralized by an automobile 14,918
Notes payable to stockholders:
Note payable to stockholder due in monthly installments of
$1,700 of principal plus interest at prime plus 2%; secured
by all assets 137,004
Note payable to stockholder due in monthly installments of
$4,700 of principal and interest at 18%; unsecured 26,742
---------
163,746
A-6
<PAGE>
SPS International, Inc. dba AudioEase, Inc.
Notes to Financial Statements (Continued)
5. NOTES PAYABLE AND CAPITAL LEASE OBLIGATIONS (CONTINUED)
Capital leases:
Lease payable due in monthly installments of $252 with final
payment due March 1999 8,316
Lease payable due in monthly installments of $1,575 with
final payment due August 1998 44,320
--------
52,636
--------
295,458
Less current portions 247,383
--------
$ 48,075
--------
--------
In April 1995, the Company entered into a one year revolving line of credit
agreement with a bank. The maximum borrowings under the credit facility are
$100,000. The amount of the unused commitment at August 31, 1995 was $35,842.
In February 1996, the revolving line of credit agreement was increased to
$250,000 and the maturity was extended to November, 1997.
The Company is in default on both of the notes payable to stockholders by
failure of the Company to pay as scheduled on the notes. Thus, the full
amounts of the notes have been classified as current liabilities. The notes
have not been called by the stockholder; however, such notes are scheduled to
be paid in full upon the sale of the Company. (See Note 10).
The aggregate annual maturities of notes payable and capital lease
obligations for each of the five fiscal years after August 31, 1995 are as
follows:
CAPITAL
NOTES LEASE
PAYABLE OBLIGATIONS
-------- -----------
1996 $232,629 $21,817
1997 10,193 21,817
1998 21,817
1999 - 1,460
2000 - -
-------- -------
$242,822 $66,911
Less amount representing interest -------- 14,275
-------- -------
$52,636
-------
-------
A-7
<PAGE>
SPS International, Inc. dba AudioEase, Inc.
Notes to Financial Statements (Continued)
5. NOTES PAYABLE AND CAPITAL LEASE OBLIGATIONS (CONTINUED)
Interest paid amounted to approximately $24,000 for the year ended August 31,
1995.
6. INCOME TAXES
Deferred income taxes reflect the net tax effects of temporary differences
between the carrying amount of assets and liabilities for financial reporting
purposes and the amounts used for income tax purposes. Significant components
of the Company's deferred tax liabilities and assets as of August 31, 1995
were depreciation, uniform capitalization, and various accrued expenses.
The components of the income tax provision for the year ended August 31, 1995
were as follows:
Federal income taxes:
Current $43,675
Deferred (2,465)
State income taxes:
Current 7,533
Deferred (435)
-------
$48,308
-------
-------
7. STOCKHOLDER'S EQUITY
There is presently an outstanding option to a minority shareholder of the
Company to purchase up to 10% of the Company's then outstanding common stock
at an exercise price of $454.54 per share. This option will terminate upon
the acquisition by AMX discussed in Note 10.
8. RELATED PARTY TRANSACTIONS
A minority stockholder and director of the Company is the president of an
authorized AudioEase dealership that routinely purchases inventory from the
Company. Sales to the dealership for the year ended August 31, 1995 totaled
$250,414. The Company has an account receivable balance due from the
dealership of $19,221 at August 31, 1995.
A-8
<PAGE>
SPS International, Inc. dba AudioEase, Inc.
Notes to Financial Statements (Continued)
8. RELATED PARTY TRANSACTIONS (CONTINUED)
A minority stockholder of the Company is the President of Del Mar Software,
Inc., a computer software company. The Company has entered into a software
agreement whereby the Company pays Del Mar Software, Inc. royalties for the
development of interface software. The Company paid approximately $91,100 in
royalties related to this agreement during the year ended August 31, 1995 and
owes Del Mar Software, Inc. approximately $10,050 as of August 31, 1995.
9. COMMITMENTS
The Company leases its office and production facilities under an operating
lease which expires in July 1998. Rent expense was approximately $33,600.
Future minimum lease payments under the noncancellable operating lease as of
August 31, 1995 are as follows:
1996 $ 37,570
1997 39,130
1998 37,180
--------
Total minimum lease payments $113,880
--------
--------
10. SUBSEQUENT EVENT
During March, 1996, the Company executed a letter of intent with AMX
Corporation (AMX), under which AMX intends to purchase the Company for $1.5
million in shares of AMX common stock.
During April, 1996, the Company received a demand letter claiming commissions
will be due related to the pending acquisition by AMX. The Company denies any
liability, believes it has meritorious defenses to this claim, and intends to
vigorously defend itself against such claim. The ultimate outcome of this
claim cannot be determined at this time.
A-9
<PAGE>
SPS International, Inc. dba AudioEase, Inc.
Balance Sheet (Unaudited)
February 29, 1996
ASSETS
Current assets:
Accounts receivable $ 359,364
Inventories 528,526
Prepaid expenses 84,537
----------
Total current assets 972,427
Property and equipment, net 97,171
Other assets 8,881
----------
Total assets $1,078,479
----------
----------
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Bank overdraft $ 91,994
Accounts payable 288,791
Accrued liabilities 61,675
Line of credit 79,158
Note payable, current portion 110,826
Obligations under capital leases, current portion 6,783
----------
Total current liabilities 639,227
Long-term obligations, net of current portion -
Note payable 21,499
Obligations under capital leases 35,702
----------
57,201
Deferred income tax 7,367
Shareholders' equity:
Common stock, $.10 par value:
Authorized shares - 10,000
Issued and outstanding shares - 1,346 135
Additional paid-in capital 200,055
Retained earnings 174,494
----------
Total stockholders' equity 374,684
----------
Total liabilities and stockholders' equity $1,078,479
----------
----------
A-10
<PAGE>
SPS International, Inc. dba AudioEase, Inc.
Statement of Income and Retained Earnings (Unaudited)
For the Six Months Ended
Feb 29, 1996 Feb 28, 1995
------------ ------------
Net sales $1,441,046 $1,416,763
Cost of goods sold 697,971 749,790
---------- ----------
Gross profit 743,075 666,973
Selling, general and administrative 618,933 501,110
---------- ----------
Operating Income 124,142 165,863
Other income (expense)
Interest income 18 57
Interest expense (14,019) (15,497)
---------- ----------
Income before income taxes 110,142 150,423
Income tax provision - -
---------- ----------
Net income 110,142 150,423
Retained earnings (deficit), beginning of period 64,352 (174,837)
---------- ----------
Retained earnings (deficit), end of period $ 174,494 $ (24,415)
---------- ----------
---------- ----------
A-11
<PAGE>
APPENDIX B
<PAGE>
AMX Corporation and SPS International, Inc. dba AudioEase, Inc.
Pro Forma Condensed Consolidated Financial Information
CONTENTS
Pro Forma Condensed Consolidated Balance Sheet as of March 31, 1996
(Unaudited)........................................................... B-2
Pro Forma Condensed Consolidated Statement of Income for the year
ended March 31, 1996 (Unaudited)...................................... B-3
Notes to Pro Forma Condensed Consolidated Financial Information
(Unaudited)........................................................... B-4
<PAGE>
PRO FORMA CONDENSED CONSOLIDATED FINANCIAL
INFORMATION (UNAUDITED)
On May 16, 1996, AMX Corporation ("the Company") acquired 100 percent of
the stock of SPS International, Inc., a Colorado corporation based in
Englewood, Colorado that is now known as AudioEase, Inc. ("AudioEase"), in
exchange for 181,818 shares of the common stock, par value $.01 per share, of
the Company. AudioEase designs, manufactures, and markets hardware and
software products for upscale home theater systems, whole-home audio/video
control and distribution systems, as well as other electronic home systems.
AudioEase will continue to operate as a wholly-owned subsidiary of the
Company. The acquisition will be accounted for using the purchase method.
The unaudited pro forma condensed consolidated balance sheet of the Company
and AudioEase as of March 31, 1996, reflects adjustments as if the
acquisition had occurred on March 31, 1996.
The unaudited pro forma condensed consolidated statement of income for the
year ended March 31, 1996, reflects adjustments as if the acquisition had
occurred on April 1, 1995.
The unaudited pro forma condensed consolidated balance sheet and statement of
income should be read in conjunction with the separate historical audited
financial statements of the Company and AudioEase and the related notes
appearing elsewhere in this report. The pro forma financial information is
not necessarily indicative of the results that would have been reported had
such events actually occurred on the dates specified, nor is it necessarily
indicative of the future results of the combined company.
B-1
<PAGE>
AMX CORPORATION AND SPS INTERNATIONAL, INC. DBA AUDIOEASE, INC.
PRO FORMA CONDENSED CONSOLIDATED BALANCE SHEET
(UNAUDITED)
<TABLE>
AMX SPS INTERNATIONAL,
CORPORATION INC. DBA PRO FORMA
AS OF AUDIOEASE, INC. AS PRO FORMA AS OF
MARCH 31, OF MARCH 31, ADJUSTMENTS MARCH 31,
1996 1996 (NOTE 2) 1996
----------- ------------------ ----------- ---------
(IN THOUSANDS OF DOLLARS)
<S> <C> <C> <C> <C>
ASSETS
Current assets:
Cash and cash equivalents...... $ 4,859 $ 3 $ - $ 4,862
Receivables.................... 4,260 334 - 4,594
Inventories.................... 2,866 513 - 3,379
Prepaid expenses............... 175 89 - 264
Deferred income tax............ 218 - - 218
------- ------ ------- -------
Total current assets......... 12,378 939 - 13,317
Property and equipment, net...... 1,613 87 - 1,700
Other assets..................... 661 10 310(a) 981
------- ------ ------- -------
Total assets................. $14,652 $1,036 $ 310 $15,998
------- ------ ------- -------
------- ------ ------- -------
LIABILITIES AND SHAREHOLDERS' EQUITY
Current liabilities:
Accounts payable............... $ 1,473 $ 328 $ 101 (a) $ 1,902
Accrued compensation and
sales commissions............. 1,221 19 - 1,240
Other accrued expenses......... 770 298 - 1,068
Income taxes payable........... 350 25 - 375
------- ------ ------- -------
Total current liabilities.... 3,814 670 101 4,585
Long-term debt, less current
portion......................... 55 58 - 113
Deferred income tax.............. 69 - - 69
Shareholders' equity:
Common stock................... 76 - 2 (a) 78
Additional paid-in capital..... 131 200 1,298 (a) 1,629
Retained earnings.............. 10,507 108 (1,091)(a) 9,524
------- ------ ------- -------
Total shareholders' equity... 10,714 308 209 11,231
------- ------ ------- -------
$14,652 $1,036 $310 $15,998
------- ------ ------- -------
------- ------ ------- -------
</TABLE>
See accompanying notes to unaudited pro forma
condensed consolidated financial information.
B-2
<PAGE>
AMX CORPORATION AND SPS INTERNATIONAL, INC. DBA AUDIOEASE, INC.
PRO FORMA CONDENSED CONSOLIDATED STATEMENT OF INCOME
(UNAUDITED)
<TABLE>
SPS INTERNATIONAL,
AMX INC. DBA
CORPORATION AUDIOEASE, INC. PRO FORMA
FOR THE YEAR FOR THE TWELVE FOR THE YEAR
ENDED MONTHS ENDED PRO FORMA ENDED
MARCH 31, MARCH 31, ADJUSTMENTS MARCH 31,
1996 1996 (NOTE 3) 1996
------------- ------------------ ------------ -------------
(IN THOUSANDS OF DOLLARS EXCEPT PER SHARE AMOUNTS)
<S> <C> <C> <C> <C>
Net sales................... $32,730 $3,027 $ - $35,757
Cost of sales............... 12,369 1,671 (150)(a) 13,890
------- ------ ------ -------
20,361 1,356 150 21,867
Selling, general and
administrative expenses.... 15,137 1,129 44 (b) 16,310
------- ------ ------ -------
Operating income............ 5,224 227 106 5,557
Other income (expense):
Interest expense.......... (535) (52) - (587)
Other income (expense),
net...................... 117 - - 117
------- ------ ------ -------
Income before income taxes.. 4,806 175 106 5,087
Income tax provision........ 1,792 73 54 (c) 1,919
------- ------ ------ -------
Net income.................. 3,014 $ 102 $ 52 3,168
------ ------
------ ------
Preferred stock dividends... (627) (627)
Accretion of preferred
stock...................... (170) (170)
Redemption of preferred
stock...................... (2,356) (2,356)
-------- -------
Net loss applicable to
common shareholders........ $ (139) $ 15
-------- -------
-------- -------
Earnings (loss) per share:
Primary................... $ (.02) $ -
-------- -------
-------- -------
Common and common
equivalent shares
outstanding................ 6,654 6,836
-------- -------
-------- -------
</TABLE>
See accompanying notes to unaudited pro forma
condensed consolidated financial information.
B-3
<PAGE>
AMX CORPORATION AND SPS INTERNATIONAL, INC. DBA AUDIOEASE, INC.
NOTES TO PRO FORMA CONDENSED CONSOLIDATED FINANCIAL INFORMATION
(UNAUDITED)
NOTE 1 - SIGNIFICANT ACCOUNTING POLICIES AND BASIS OF PRESENTATION
The accompanying historical financial statements of the Company and AudioEase
have been derived from financial statements prepared in accordance with
generally accepted accounting principles . The Company's historical financial
statements as of and for the year ended March 31, 1996 used in the pro forma
financial statements are derived from the Company's audited financial
statements for the fiscal years then ended. The AudioEase historical financial
statements as of and for the twelve months ended March 31, 1996 used in the pro
forma financial statements are based on the unaudited balance sheet of AudioEase
at March 31, 1996 and on the audited financial statements for the year ended
August 31, 1995, adjusted using interim financial statements to reflect the
twelve months ended March 31, 1996. AudioEase's interim financial statements
are prepared on the basis of generally accepted accounting principles and
include all adjustments, consisting of only normal recurring adjustments,
necessary for a fair presentation of such financial information.
The pro forma adjustments are based on the Company's preliminary allocation
of the purchase price of AudioEase to the net assets acquired. While
preliminary, management of AMX believes any final revisions to the purchase
price are unlikely to be materially different from amounts presented herein.
NOTE 2 - PRO FORMA CONDENSED CONSOLIDATED BALANCE SHEET ADJUSTMENT
This column reflects the following adjustment:
(a) To record the consideration paid and the net assets acquired at their
fair market values.
The consideration paid by the Company to acquire AudioEase was 181,818 shares
of the Company's common stock valued at $1,500,000 based on a 10-day average
of the closing price of the Company's common stock as reported on the NASDAQ,
plus expenses associated with the acquisition of $101,000 for a total
consideration of $1,601,000. Of this consideration, $308,000 was allocated to
the net assets of AudioEase based on their book value, $983,000 was allocated
to in-process research and development and charged off to earnings and
retained earnings (see Note 4), and $310,000 was allocated to intangibles.
The allocations are based on the preliminary results of an independent
appraisal that is in process.
NOTE 3 - PRO FORMA CONDENSED CONSOLIDATED STATEMENT OF INCOME ADJUSTMENTS
This column reflects the following adjustments:
(a) To record cost savings of $150,000 anticipated when AMX discounts with
like vendors are applied to AudioEase's material purchases. AMX has in
place and is executing its plan to achieve such anticipated reductions
in costs of purchased materials.
(b) To record amortization ($44,000) of amounts allocated to intangibles
using estimated lives of 5-7 years.
(c) To record the income tax effect ($54,000) of the pro forma adjustments
after consideration of non-deductible intangible asset amortization.
NOTE 4 - ONE-TIME ADJUSTMENTS
Approximately $1,000,000 of the purchase price of AudioEase is expected to be
allocated to in-process research and development based on the preliminary
results of an independent appraisal that is in process. In accordance with
generally accepted accounting principles, this amount will be expensed in a
one-time charge to the Company's consolidated earnings as of the date of the
consummation of the combination. This amount has not been reflected in the
Pro Forma Condensed Consolidated Statement of Income because it is a one-time
adjustment that will not be recurring.
B-4
<PAGE>
EXHIBIT INDEX
EXHIBIT NO. DESCRIPTION
- ----------- -----------
2.1 Agreement of Merger and Plan of Reorganization,
dated as of May 16, 1996, among AMX Corporation,
AMX Acquisition Corporation, SPS International,
Inc. (now known as AudioEase, Inc.), John P.
Sundquist and Sandra P. Sundquist, Donald J.
Heiskell and Janice T. Heiskell, Bruce R.
Munroe, David A. Daniels, and Thomas J. Gleason
(previously filed with and incorporated by
reference from the exhibit of the same number
in the Company's Current Report on Form 8-K
filed May 30, 1996, file no. 0-26924).
23.1 Consent of Ernst & Young LLP.
<PAGE>
EXHIBIT 23.1
TO
FORM 8-K/A
FOR
AMX CORPORATION
<PAGE>
EXHIBIT 23.1
CONSENT OF INDEPENDENT AUDITORS
We consent to the incorporation by reference in the Registration Statement (Form
S-8 No. 333-02202) pertaining to the AMX Corporation 1996 Employee Stock
Purchase Plan, the AMX Corporation 1995 Director Stock Option Plan, the AMX
Corporation 1995 Stock Option Plan, and the AMX Corporation 1993 Stock Option
Plan of our report dated April 19, 1996 with respect to the financial statements
of SPS International, Inc. dba AudioEase, Inc. as of and for the year ended
August 31, 1995 included in this Report on Form 8-K/A.
ERNST & YOUNG LLP
Dallas, Texas
August 29, 1996
