6
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 8-K/A-2
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 5, 1998 (March 2, 1998)
Commission File Number 1-6560
THE FAIRCHILD CORPORATION
(Exact name of Registrant as specified in its charter)
Delaware 34-0728587
(State or other jurisdiction of (I.R.S. Employer Identification No.)
Incorporation or organization)
45025 Aviation Drive, Suite 400
Dulles, VA 20166
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code (703) 478-5800
Washington Dulles International Airport
300 West Service Road, PO Box 10803
Chantilly, VA
(Former name or former address, if changed since last report)
AMENDMENT:
The purpose of this amendment is to revise the financial information
(as suggested by the Staff of the Securities and Exchange Commission)
required under Item 7. "Financial Statements and Exhibits" as a result of
the Company's acquisition of Edwards & Lock Management Corp., dba Special-T
Fasteners, a California corporation ("Special-T") from the shareholders of
Special-T pursuant to an Agreement and Plan of Merger (the "Special-T
Acquisition") dated as of January 28, 1998 as amended on February 20, 1998,
and March 2, 1998.
ITEM 7. FINANCIAL STATEMENTS AND EXHIBITS
(a) FINANCIAL STATEMENTS OF BUSINESS AQUIRED
The audited financial statements of Special-T are being filed as an
exhibit to this Form 8-K and are herein incorporated by reference.
(b) PRO FORMA CONSOLIDATED FINANCIAL INFORMATION
On March 2, 1998, the Company consummated the Special-T Acquisition.
The Special-T Acquisition purchase price, subject to adjustment, was
$46,500 of which $23,500 was paid in shares of Class A Common Stock of the
Company and the remainder was paid in cash.
The unaudited pro forma consolidated statement of earnings for the
year ended June 30, 1997 and for the six months ended December 28, 1997
have been prepared to give effect to the Special-T Acquisition as if the
Special-T Acquisition occurred on July 1, 1996 and July 1, 1997,
respectively. The unaudited pro forma consolidated balance sheet as of
December 28, 1997 has been prepared to give effect to the Special-T
Acquisition as if it had occurred on such date.
The unaudited pro forma consolidated financial statements are not
necessarily indicative of the results that would have been obtained had the
Special-T Acquisition been completed as of the dates presented or for any
future period. The unaudited pro forma consolidated financial statements
should be read in conjunction with the Company's Consolidated Financial
Statements and notes thereto included in the Company's Form 10-K/A dated
June 30, 1997 and Form 10-Q dated December 28, 1997.
<TABLE>
THE FAIRCHILD CORPORATION
UNAUDITED PRO FORMA CONSOLIDATED STATEMENT OF EARNINGS
FOR THE YEAR ENDED JUNE 30, 1997
(In thousands, except per share data)
<CAPTION>
Historical Historical
Company Special-T Adjustments Pro Forma
as Restated (1) (2) Company
<S> <C> <C> <C> <C>
Sales $ 680,763 $ 52,921 $(30,796) $702,888
Costs and expenses:
Cost of sales 499,419 33,511 (26,084) 506,846
Selling, general &
administrative 142,931 10,299 153,230
Research and development 100 100
Amortization of goodwill 4,814 538 5,352
647,264 43,810 (25,546) 665,528
Operating income 33,499 9,111 (5,250) 37,360
Net interest expense (47,681) 59 (2,025) (49,647)
Investment income, net 6,651 6,651
Equity in earnings of
affiliates 4,598 4,598
Minority interest (3,514) (3,514)
Nonrecurring income 2,528 2,528
Earnings before taxes (3,919) 9,170 (7,275) (2,024)
Income tax provision (benefit) (5,735) 3,631 (2,622) (4,726)
Earnings from continuing
operations $ 1,816 $ 5,539 $ (4,653) $ 2,702
Earnings per share from
continuing operations:
Basic $ 0.11 $ 0.15
Diluted 0.10 0.15
Weighted average shares
outstanding:
Basic 16,539 1,058 17,597
Diluted 17,321 1,058 18,379
</TABLE>
<TABLE>
THE FAIRCHILD CORPORATION
UNAUDITED PRO FORMA CONSOLIDATED STATEMENT OF EARNINGS
FOR THE SIX MONTHS ENDED DECEMBER 28, 1997
(In thousands, except per share data)
<CAPTION>
Historical Historical
Company Special-T Adjustment Pro forma
as Restated (1) (2) Company
<S> <C> <C> <C> <C>
Sales $402,978 $ 31,025 $(15,708) $418,295
Costs and expenses:
Cost of sales 299,827 19,680 (11,671) 307,836
Selling, general &
administrative 74,267 5,399 - 79,666
Research and development 97 - - 97
Amortization of goodwill 2,606 - 269 2,875
376,797 25,079 (11,402) 390,474
Operating income 26,181 5,946 (4,306) 27,821
Net interest expense (27,744) 76 (1,013) (28,681)
Investment income, net (5,180) - - (5,180)
Equity in earnings of
affiliates 2,121 - - 2,121
Minority interest (1,875) - - (1,875)
Earnings (loss) before
taxes (6,497) 6,022 (5,319) (5,794)
Income tax provision
(benefit) (3,121) 2,445 (1,994) (2,670)
Earnings (loss) from
continuing operations $ (3,376) $ 3,577 $ (3,325) $ (3,124)
Loss per share from continuing operations:
Basic $ (0.20) $ (0.17)
Diluted (0.20) (0.17)
Weighted average shares outstanding:
Basic 16,864 1,058 17,922
Diluted 16,864 1,058 17,922
</TABLE>
<TABLE>
THE FAIRCHILD CORPORATION
UNAUDITED PRO FORMA CONSOLIDATED BALANCE SHEETAS OF DECEMBER 28, 1997
(In thousands)
<CAPTION>
Historical Special-T
Company Acquisition Pro Forma
(as Restated) (3) Company
<S> <C> <C> <C>
Cash $ 38,907 $(21,646) $ 17,261
Short-term investments 8,487 - 8,487
Accounts receivable, less
allowance 160,995 6,716 167,711
Inventory 361,966 18,465 380,431
Prepaid and other current
assets 81,037 1,561 82,598
Total current assets 651,392 5,096 656,488
Net fixed assets 126,198 1,434 127,632
Net assets held for sale 26,447 - 26,447
Net LT assets of discontinued
operations 12,069 - 12,069
Investment in affiliates 21,829 50 21,879
Goodwill 160,150 21,503 181,653
Deferred loan costs 11,742 - 11,742
Prepaid pension assets 59,282 - 59,282
Other assets 53,627 41 53,668
Total assets $1,122,736 $ 28,124 $1,150,860
Bank notes payable & current
maturities of debt $ 92,348 $ 175 $ 92,523
Accounts payable 70,739 3,464 74,203
Other accrued expenses 92,979 860 93,839
Total current liabilities 256,066 4,499 260,565
Long-term debt, less current
maturities 371,610 125 371,735
Other long-term liabilities 29,050 - 29,050
Retiree health care
liabilities 42,366 - 42,366
Noncurrent income taxes 47,388 - 47,388
Minority interest in
subsidiaries 70,327 - 70,327
Total liabilities 816,807 4,624 821,431
Total stockholders'
equity 305,929 23,500 329,429
Total liabilities &
stockholders' equity $1,122,736 $ 28,124 $1,150,860
</TABLE>
NOTES TO THE UNAUDITED PRO FORMA CONSOLIDATED FINANCIAL STATEMENTS
(In thousands)
(1) Represents the results of operations of Special-T Fasteners.
(2) Includes (i) the elimination of sales and gross margin on products
sold from the Company's aerospace fasteners segment to Special-T, (ii) the
estimated increase in interest expense relating to cash borrowed to
complete the Special-T Acquisition, and (iii) the estimated amortization of
goodwill based on amortization over a period of forty years.
(3) Represents the inclusion of the assets acquired and the liabilities
assumed in the acquisition of Special-T Fasteners including cash of $24,395
used for the Special-T Acquisition and related acquisition expenses,
recorded goodwill of $21,503, and the $23,500 increase to stockholders'
equity from the issuance of 1,057,515 shares of Class A Common Stock (based
on the average fair market value of the closing price of the Company's
common stock for the 20 days proceeding the acquisition date).
EXHIBITS
99.1 Agreement and plan of Merger dated January 28, 1998, as amended on
February 20, 1998, and March 2, 1998, between the Company and the
shareholders' of Special-T Fasteners (Incorporated by reference to Form 8-K
dated as of March 2, 1998 filed by the Company on March 12, 1998).
99.2 Financial statements, related notes thereto and Auditors' Report of
Edwards And Lock Management Corporation for the periods ended December 31,
1997 and March 31, 1997 (Incorporated by reference to Form 8-K/A dated as
of March 2, 1998 filed by the Company on April 23, 1998).
99.3 Financial statements, related notes thereto and Auditors' Report of
Edwards And Lock Management Corporation for the years ended March 31, 1996,
1995 and 1994 (Incorporated by reference to Form 8-K/A dated as of March 2,
1998 filed by the Company on April 23, 1998).
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of
1934, the Company has duly caused this report to the signed on
its behalf by the undersigned hereunto duly authorized.
For THE FAIRCHILD CORPORATION
(Registrant) and as its Chief
Financial Officer:
By: Colin M. Cohen
Senior Vice President and
Chief Financial Officer
Date: May 5, 1998
