<PAGE>
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 8-K/A
AMENDMENT NO. 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): October 1, 1998
TOKHEIM CORPORATION
-------------------------------------
(Exact Name of Registrant as Specified in Charter)
Indiana 1-6018 35-0712500
------- ------ ----------
(State or Other Jurisdiction (Commission (IRS Employer
of Incorporation) File Number) Identification No.)
10501 Corporate Drive, Fort Wayne, IN 46845
- ------------------------------------- -----
(Address of Principal Executive Office) (Zip Code)
(219)-470-4600
--------------------------------------------------
Registrant's telephone number, including area code
N/A
--------------------------------------------------
(Former Name or Former Address, if Changed Since Last Report)
<PAGE>
SPECIAL NOTE REGARDING FORWARD-LOOKING STATEMENTS
CERTAIN STATEMENTS CONTAINED IN THIS FORM 8-K/A, INCLUDING, WITHOUT
LIMITATION, STATEMENTS CONTAINING THE WORDS "BELIEVES," "ANTICIPATES," "EXPECTS"
AND WORDS OF SIMILAR IMPORT, CONSTITUTE "FORWARD-LOOKING STATEMENTS" WITHIN THE
MEANING OF THE PRIVATE SECURITIES LITIGATION REFORM ACT OF 1995. SUCH FORWARD-
LOOKING STATEMENTS INVOLVE KNOWN AND UNKNOWN RISKS, UNCERTAINTIES AND OTHER
FACTORS THAT MAY CAUSE THE ACTUAL RESULTS, PERFORMANCE OR ACHIEVEMENTS OF THE
COMPANY, OR INDUSTRY RESULTS, TO DIFFER MATERIALLY FROM ANY FUTURE RESULTS,
PERFORMANCE OR ACHIEVEMENTS EXPRESSED OR IMPLIED BY SUCH FORWARD-LOOKING
STATEMENTS. SUCH FACTORS INCLUDE, AMONG OTHERS, THE FOLLOWING: INCREASES IN
INTEREST RATES OR THE COMPANY'S COST OF BORROWING OR A DEFAULT UNDER ANY
MATERIAL DEBT
2
<PAGE>
AGREEMENT; INABILITY OF THE COMPANY TO SUCCESSFULLY MAKE AND INTEGRATE
ACQUISITIONS; INABILITY TO ACHIEVE ANTICIPATED COST SAVINGS OR REVENUE GROWTH;
DEPENDENCE ON THE RETAIL PETROLEUM INDUSTRY; INABILITY TO FORECAST OR ACHIEVE
FUTURE SALES LEVELS OR OTHER OPERATING RESULTS; FLUCTUATIONS IN EXCHANGE RATES
AMONG VARIOUS FOREIGN CURRENCIES, PRINCIPALLY AMONG DOLLARS, FRENCH FRANC
("FFR") AND THE BRITISH POUND; COSTS IN ADJUSTING TO A NEW COMMON EUROPEAN
CURRENCY; INABILITY TO PROTECT PROPRIETARY TECHNOLOGY OR TO INTEGRATE NEW
TECHNOLOGIES QUICKLY INTO NEW PRODUCTS; CHANGES IN BUSINESS STRATEGY OR
DEVELOPMENT PLANS; BUSINESS DISRUPTIONS; CHANGES IN GENERAL ECONOMIC CONDITIONS
OR WITH ECONOMIC CONDITIONS OF PARTICULAR MARKETS IN WHICH THE COMPANY COMPETES;
UNAVAILABILITY OF FUNDS FOR CAPITAL EXPENDITURES OR RESEARCH AND DEVELOPMENT;
CHANGES IN CUSTOMER SPENDING LEVELS AND DEMAND FOR NEW PRODUCTS; CHANGES IN
GOVERNMENTAL, ENVIRONMENTAL OR OTHER REGULATIONS, ESPECIALLY AS THEY MAY AFFECT
THE CAPITAL EXPENDITURES OF THE COMPANY'S CUSTOMERS; FAILURE OF THE COMPANY TO
COMPLY WITH GOVERNMENTAL REGULATIONS; LOSS OF KEY MEMBERS OF MANAGEMENT; ADVERSE
PUBLICITY; CONTINGENT LIABILITIES AND OTHER CLAIMS ASSERTED AGAINST THE COMPANY;
LOSS OF SIGNIFICANT CUSTOMERS OR SUPPLIERS; "YEAR 2000" PROBLEMS WITH COMPUTER
SYSTEMS OR SOFTWARE OF THE COMPANY OR ITS CUSTOMERS, SUPPLIERS OR RESELLERS; AND
OTHER FACTORS. GIVEN THESE UNCERTAINTIES, INDIVIDUALS ARE CAUTIONED NOT TO PLACE
UNDUE RELIANCE ON SUCH FORWARD-LOOKING STATEMENTS. THE COMPANY DISCLAIMS ANY
OBLIGATION TO UPDATE ANY SUCH FACTORS OR TO ANNOUNCE PUBLICLY THE RESULT OF ANY
REVISIONS TO ANY OF THE FORWARD-LOOKING STATEMENTS CONTAINED HEREIN TO REFLECT
FUTURE EVENTS OR DEVELOPMENTS.
ITEM 7. FINANCIAL STATEMENTS AND EXHIBITS
On September 30, 1998 pursuant to a Master Agreement for the Purchase and
Sale of Shares, Assets and Liabilities, dated June 19, 1998, between Tokheim
Corporation ("Tokheim") and Schlumberger Limited ("Schlumberger"), as amended by
Amendment No. 1 thereto dated as of September 30, 1998 (the "Purchase
Agreement"), Tokheim completed, subject to certain foreign legal requirements,
the acquisition of the fuel dispenser business (the "RPS Division") of
Schlumberger. (the "Acquisition"), as well as a related debt refinancing (the
"Refinancing"). Certain information about the transaction has been filed in a
Form 8-K dated August 3, 1998. Further information about the transaction was
reported on a Form 8-K/A dated October 1, 1998. The required interim period
financial statements and interim pro forma information were not available at
that time. The following financial statements and financial information are
filed as part of this amendment to the Form 8-K/A.
(a) Financial Statements of the Business Acquired
-- RPS Division combined condensed balance sheets as of
September 30, 1998 and December 31, 1997
-- RPS Division unaudited combined condensed statements of income
for the nine months ended September 30, 1998 and 1997
-- RPS Division unaudited combined statements of cash flows for the
nine months ended September 30, 1998 and 1997
(b) Pro Forma Financial Information
-- Unaudited pro forma consolidated condensed statement of earnings
for the nine months ended August 31, 1997
-- Unaudited pro forma consolidated condensed balance sheet as of
August 31, 1997
-- Notes to unaudited pro forma consolidated condensed financial
statements
3
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934,
the Registrant has duly caused this report to be signed on its behalf by the
undersigned thereto duly authorized.
TOKHEIM CORPORATION
Date: December 14, 1998 By: /s/ Douglas K. Pinner
----------------------------------
Douglas K. Pinner
Chairman of the Board,
President and Chief Executive Officer
and Director
Date: December 14, 1998 By: /s/ John A. Negovetich
----------------------------------
John A. Negovetich
Executive Vice President,
Finance and Administration
EXHIBITS
(a) Financial Statements of the Business Acquired.
-(1) RPS Division audited combined statements of income for the
years ended December 31, 1997, 1996 and 1995 (incorporated
herein by reference to the Company's Current Report on Form
8-K dated August 3, 1998).
-(2) RPS Division audited combined statements of cash flows for
the years ended December 31, 1997, 1996 and 1995
(incorporated herein by reference to the Company's Current
Report on Form 8-K dated August 3, 1998).
4
<PAGE>
-(3) RPS Division audited combined balance sheets as of December
31, 1997 and 1996 (incorporated herein by reference to the
Company's Current Report on Form 8-K dated August 3, 1998).
-(4) RPS Division audited combined statements of equity for the
years ended December 31, 1997, 1996 and 1995 (incorporated
herein by reference to the Company's Current Report on Form
8-K dated August 3, 1998).
-(5) RPS Division notes to the audited combined financial
statements for the years ended December 31, 1997, 1996 and
1995 (incorporated herein by reference to the Company's
Current Report on Form 8-K dated August 3, 1998).
(b) Pro Forma Financial Information
-(1) Unaudited pro forma consolidated condensed statement of
earnings for the year ended November 30, 1997 (incorporated
herein by reference to the Company's Current Report on Form
8-K/A dated October 1, 1998).
-(2) Unaudited pro forma consolidated condensed balance sheet as
of November 30, 1997 (incorporated herein by reference to
the Company's Current Report on Form 8-K/A dated October 1,
1998).
-(3) Notes to unaudited pro forma consolidated condensed
financial statements (incorporated herein by reference to
the Company's Current Report on Form 8-K/A dated October 1,
1998).
-(4) Unaudited pro forma Tokheim Corporation consolidated
condensed statement of earnings for the year ended November
30, 1997 (incorporated herein by reference to the Company's
Current Report on Form 8-K/A dated October 1, 1998).
-(5) Unaudited pro forma Tokheim Corporation consolidated
condensed balance sheet as of November 30, 1997
(incorporated herein by reference to the Company's Current
Report on Form 8-K/A dated October 1, 1998).
-(6) Notes to unaudited pro forma Tokheim Corporation
consolidated condensed financial statements (incorporated
herein by reference to the Company's Current Report on Form
8-K/A dated October 1, 1998).
5
<PAGE>
(c) Other Exhibits
-(1) Master Agreement for Purchase and Sale of Shares, Assets,
and Liabilities, dated as of June 19, 1998, between Tokheim
and Schlumberger (incorporated herein by reference to the
Company's Current Report on Form 8-K/A dated October 1,
1998).
-(2) Amendment No. 1 to the Master Agreement for Purchase and
Sale of Shares, Assets and Liabilities, dated as of
September 30, 1998 between Tokheim and Schlumberger
(incorporated herein by reference to the Company's Current
Report on Form 8-K/A dated October 1, 1998).
-(3) Securities Purchase Agreement, dated September 30, 1998, by
Tokheim and Schlumberger (incorporated herein by reference
to the Company's Current Report on Form 8-K/A dated October
1, 1998).
-(4) 12% Senior Subordinated Note Due January 28, 1999 in the
amount of $170,000,000 (incorporated herein by reference to
the Company's Current Report on Form 8-K/A dated October 1,
1998).
-(5) Senior Subordinated Note Indenture, dated as of September
30, 1998, among Tokheim, Management Solutions, Inc.,
Tokheim Equipment Corporation, Tokheim RPS, LLC, Sunbelt
Hose & Petroleum Equipment, Inc., Envirotronic Systems,
Inc., Gasboy International, Inc., Tokheim Automation
Corporation, Tokheim Investment Corp., as guarantors, and
Harris Trust and Savings Bank, as trustee (incorporated
herein by reference to the Company's Current Report on Form
8-K/A dated October 1, 1998).
-(6) 12% Junior Subordinated Note Due 2008 in the amount of
$40,000,000 (incorporated herein by reference to the
Company's Current Report on Form 8-K/A dated October 1,
1998).
-(7) Junior Subordinated Note Indenture, dated as of September
30, 1998, among Tokheim, Management Solutions, Inc.,
Tokheim Equipment Corporation, Tokheim RPS, LLC, Sunbelt
Hose & Petroleum Equipment, Inc., Envirotronic Systems,
Inc., Gasboy International, Inc., Tokheim Automation
Corporation, Tokheim Investment Corp., as guarantors, and
Harris Trust and Savings Bank, as trustee (incorporated
herein by reference to the Company's Current Report on Form
8-K/A dated October 1, 1998).
6
<PAGE>
-(8) Warrant to Purchase up to 19.9% of the Shares of Common
Stock of Tokheim (incorporated herein by reference to the
Company's Current Report on Form 8-K/A dated October 1,
1998).
-(9) Form of Roll-Over Note (incorporated herein by reference to
the Company's Current Report on Form 8-K/A dated October 1,
1998).
-(10) Registration Rights Agreement, dated September 30, 1998, by
Tokheim and Schlumberger (incorporated herein by reference
to the Company's Current Report on Form 8-K/A dated October
1, 1998).
-(11) Note Purchase Agreement, dated as of September 30, 1998,
among Tokheim, the Subsidiaries and the Purchasers
(incorporated herein by reference to the Company's Current
Report on Form 8-K/A dated October 1, 1998).
-(12) Amended and Restated Credit Agreement, dated as of
September 30, 1998, among Tokheim, the Borrowing
Subsidiaries, the Lenders and NBD Bank, N.A. as
administrative agent and Credit Lyonnais as documentation
and collateral agent and Gleacher Natwest Inc. and Bankers
Trust Company as co-syndication agents (incorporated herein
by reference to the Company's Current Report on Form 8-K/A
dated October 1, 1998).
-(13) Amendment No. 1 to Rights Agreement, dated as of September
30, 1998, between Tokheim and Harris Trust and Savings Bank
(incorporated herein by reference to the Company's Current
Report on Form 8-K/A dated October 1, 1998).
7
<PAGE>
RPS Division
Combined Condensed Balance Sheets
(Amounts in thousands)
As of
----------------------------
September 30, December 31,
1998 1997
------------- ------------
ASSETS:
Current assets:
Cash and cash equivalents..................... $ 9,728 $ 7,321
Accounts receivables, net..................... 82,181 102,540
Inventory, net................................ 69,317 58,859
Other current assets.......................... 13,669 11,872
-------- --------
Total current assets........................ 174,895 180,592
Property, plant & equipment, net................ 31,735 32,183
Other tangible assets........................... 1,056 1,326
Goodwill........................................ 49,792 51,757
Other noncurrent assets and deferred
charges....................................... 2,864 3,576
-------- --------
Total assets................................ $260,342 $269,434
======== ========
LIABILITIES AND EQUITY:
Liabilities:
Current liabilities:
Current portion long-term debt.............. $ -- $ 46
Cash overdraft.............................. 2,289 12,614
Accounts payable and accruals............... 71,324 94,526
-------- --------
Total current liabilities................. 73,613 107,186
Postretirement benefits....................... 4,571 4,188
Minority interest............................. 162 133
Other long-term liabilities................... 3,191 3,657
-------- --------
Total liabilities......................... 81,537 115,164
Equity.......................................... 200,708 160,578
Equity and retained earnings deficit............ (21,903) (6,308)
-------- --------
Total liabilities and
stockholders' equity.................... $260,342 $269,434
======== ========
8
<PAGE>
RPS Division
Combined Condensed Statements of Income
(Amounts in thousands)
Nine Months Ended
----------------------------
September 30, September 30,
1998 1997
------------- -------------
Unaudited Unaudited
------------- -------------
Net Sales......................................... $231,764 $231,978
Cost of sales..................................... 199,486 194,623
Selling, general, and administrative expenses..... 48,015 47,565
-------- --------
Operating loss.................................... (15,737) (10,210)
Interest expense, net............................. 1,586 945
Other expense, net................................ 3,270 3,307
-------- --------
Loss before income taxes.......................... (20,593) (14,462)
Income tax benefit................................ (4,863) (5,246)
-------- --------
Net loss.......................................... $(15,730) $ (9,216)
======== ========
9
<PAGE>
RPS Division
Combined Condensed Statements of Cash Flows
(Amounts in thousands)
<TABLE>
<CAPTION>
Nine Months Ended
-------------------------------
September 30, September 30,
1998 1997
------------- -------------
Unaudited Unaudited
------------- -------------
<S> <C> <C>
CASH FLOWS FROM OPERATING ACTIVITIES:
Net loss................................................................. $(15,730) $ (9,216)
Adjustment to reconcile net loss to cash provided from
(used in) operations:
Depreciation and amortization.......................................... 8,766 8,476
Changes in assets and liabilities, net of effect of acquired businesses
Receivables, net...................................................... (14,925) 28,108
Inventories........................................................... 10,458 588
Accounts payable and accrued liabilities.............................. (23,065) (34,529)
Prepaid and refundable income taxes................................... (1,245) (1,330)
Other assets and liabilities, net..................................... 4,309 16,479
-------- --------
Net cash provided from (used in) operations.............................. (31,432) 8,576
-------- --------
CASH FLOWS FROM INVESTING ACTIVITIES:
Plant and equipment additions............................................ (4,951) (6,810)
Other, net............................................................... (1,319) 4,047
-------- --------
Net cash used in investing activities.................................... (6,270) (2,763)
-------- --------
CASH FLOWS FROM FINANCING ACTIVITIES:
Net change in equity..................................................... 40,127 (8,677)
Decrease in term debt, net............................................... (18) (502)
-------- --------
Net cash provided from (used in) financing activities.................... 40,109 (9,179)
-------- --------
CASH AND CASH EQUIVALENTS:
Increase (decrease) in cash and cash equivalents......................... 2,407 (3,366)
Cash and cash equivalents, beginning of year............................. 7,321 5,445
-------- --------
Cash and cash equivalents, end of period................................. $ 9,728 $ 2,079
======== ========
</TABLE>
10
<PAGE>
The following unaudited pro forma consolidated condensed financial
statements (the "Pro Forma Financial Statements") of the Company are derived
from the unaudited interim financial statements of Tokheim and the RPS Division
and have been adjusted to illustrate the effects of the Acquisition and related
Refinancing. The Pro Forma Financial Statements and accompanying notes should be
read in conjunction with the consolidated financial statements of Tokheim and
the combined financial statements of the RPS Division, including the notes
thereto. The pro forma statement of earnings includes the RPS Division's
combined statement of income for the nine months ended August 31, 1998 and
Tokheim's consolidated statement of earnings for the nine months ended August
31, 1998. The pro forma balance sheet includes the RPS Division's combined
balance sheet as of September 30, 1998 and Tokheim's consolidated balance sheet
as of August 31, 1998. These Pro Forma Financial Statements give effect to the
Acquisition and related Refinancing, and related purchase accounting
adjustments, as if these events had taken place on December 1, 1997 for the
statement of earnings and on August 31, 1998 for the balance sheet. The Pro
Forma Financial Statements are not necessarily indicative of either future
results of operations or the results that might have occurred if the foregoing
Acquisition and Debt refinancing had been consummated on the indicated dates.
The Acquisition has been accounted for using the purchase method of
accounting, therefore the RPS Division's equity has been eliminated in the Pro
Forma Financial Statements. The allocation of the aggregate purchase price
included in the Pro Forma Financial Statements is preliminary.
EXHIBIT (b)
Unaudited Pro Forma Consolidated Condensed Statement of Earnings
for the nine months ended August 31, 1998
(Amounts in thousands)
<TABLE>
<CAPTION>
Refinancing Tokheim
(a) And Pro Forma for
RPS RPS Acquisition Refinancing &
RPS Division Division Tokheim Pro Forma RPS Division
Division Adjustments Adjusted Corporation Adjustments Acquisition
-------- ----------- -------- ----------- ----------- -------------
<S> <C> <C> <C> <C> <C> <C>
Net sales................................. $249,368 $ -- $249,368 $291,997 $ -- $541,365
Cost of sales, exclusive of
items listed below....................... 209,622 (4,725) 204,897 213,975 (638)(b) 418,234
Selling, general, and
administrative expenses.................. 45,154 (9,096) 36,058 53,192 -- 89,250
Depreciation and amortization............ 2,926 2,874 5,800 7,799 4,435 (c) 18,034
Merger and acquisition costs and other
unusual items............................ -- 475 475 6,596 -- 7,071
--------- --------- -------- -------- -------- --------
Operating profit (loss)................... (8,334) 10,472 2,138 10,435 (3,797) 8,776
Interest expense, net..................... 1,333 -- 1,333 9,882 26,132 (d) 37,347
Other expense (income), net............... 3,509 (25) 3,484 (856) -- 2,628
--------- --------- -------- -------- -------- --------
Loss before income taxes
and extraordinary loss................... (13,176) 10,497 (2,679) 1,409 (29,929) (31,199)
Income taxes.............................. (4,703) 3,737 (966) 1,658 -- 692
--------- --------- -------- -------- -------- --------
Earnings (loss) before extraordinary
loss..................................... $ (8,473) $ 6,760 $ (1,713) $ (249) $(29,929) $(31,891)
--------- --------- -------- -------- -------- --------
Preferred stock dividends
($1.94 per share)........................ $ (1,113) $ (1,113)
-------- --------
Loss before extraordinary loss
applicable to common stock............... $ (1,362) $(33,004)
======== ========
</TABLE>
<PAGE>
EXHIBIT (b)
Unaudited Pro Forma Consolidated Condensed Balance Sheet
as of August 31, 1998
(Amounts in thousands)
<TABLE>
<CAPTION>
Refinancing Tokheim
(e) And Pro Forma
RPS RPS Acquisition Refinancing &
RPS Division Division Tokheim Pro Forma RPS Division
Division Adjustments Adjusted Corporation Adjustments Acquisition
-------- ----------- -------- ----------- ------------ ----------------
<S> <C> <C> <C> <C> <C> <C>
ASSETS:
Current assets:
Cash and cash equivalents...... $ 9,728 $ (9,728) $ -- $ 10,095 $ (1,250)(l) $ 8,845
Accounts receivables, net...... 82,181 (1,270) 80,911 79,243 -- 160,154
Inventory...................... 69,317 -- 69,317 63,580 -- 132,897
Other current assets........... 13,669 -- 13,669 6,691 -- 20,360
-------- -------- -------- -------- --------- --------
Total current assets......... 174,895 (10,998) 163,897 159,609 (1,250) 322,256
Property, plant & equipment,
net............................. 31,735 -- 31,735 44,812 -- 76,547
Other tangible assets............ 1,056 -- 1,056 3,368 -- 4,424
Goodwill......................... 49,792 (49,792) -- 71,416 236,515 (f) 307,931
Other noncurrent assets and
deferred charges................ 2,864 -- 2,864 17,824 5,086 (g) 25,774
-------- -------- -------- -------- --------- --------
Total assets................. $260,342 $(60,790) $199,552 $297,029 $240,351 $736,932
======== ======== ======== ======== ======== ========
LIABILITIES AND STOCKHOLDERS'
EQUITY:
Liabilities:
Current liabilities:
Current portion long-term
debt......................... $ -- $ -- $ -- $ 2,254 $ -- $ 2,254
Notes payable, bank........... -- -- -- 336 -- 336
Cash overdraft................ 2,289 (2,289) -- 12,733 -- 12,733
Accounts payable and
accruals..................... 71,324 (527) 70,797 91,918 27,916 (h) 190,631
-------- -------- -------- -------- --------- --------
Total current liabilities.... 73,613 (2,816) 70,797 107,241 27,916 205,954
Long-term debt................. -- -- -- 4,081 4,081
Bank credit agreement.......... -- -- -- 19,259 163,139 (i) 182,398
Senior subordinated notes...... -- -- -- 55,000 137,500 (i) 192,500
Guaranteed ESOP obligation..... -- -- -- 7,615 -- (i) 7,615
Junior subordinated PIK
notes......................... -- -- -- -- 40,000 (i) 40,000
Postretirement benefits........ 4,571 -- 4,571 14,216 -- 18,787
Minimum pension liability...... -- -- -- 2,173 -- 2,173
Minority interest.............. 162 -- 162 1,204 -- 1,366
Other Lt. liabilities.......... 3,191 -- 3,191 3,901 -- 7,092
-------- -------- -------- -------- --------- --------
Total liabilities............ 81,537 (2,816) 78,721 214,690 368,555 661,966
Common stock warrants............ -- -- -- -- 20,000 (j) 20,000
Redeemable convertible
Preferred stock................. -- -- -- 24,000 -- 24,000
Guaranteed ESOP obligation....... -- -- -- (7,615) -- (7,615)
Preferred treasury stock
at cost......................... -- -- -- (4,927) -- (4,927)
-------- -------- -------- -------- --------- --------
Total preferred equity......... -- -- -- 11,458 11,458
Common stock..................... 200,708 -- 200,708 89,581 (200,708)(k) 89,581
Minimum pension liability........ -- -- -- (2,173) -- (2,173)
Foreign currency translation
adjustments..................... -- -- -- (19,341) -- (19,341)
Retained earnings (accumulated
deficit)........................ (21,903) (57,974) (79,877) 3,506 52,504 (m) (23,867)
Common treasury stock at cost.... -- -- -- (692) -- (692)
-------- -------- -------- -------- --------- --------
Total common equity............ 178,805 (57,974) 120,831 70,881 (148,204) 43,508
-------- -------- -------- -------- --------- --------
Total liabilities and
stockholders' equity........ $260,342 $(60,790) $199,552 $297,029 $240,351 $736,932
======== ======== ======== ======== ======== ========
</TABLE>
<PAGE>
<TABLE>
<S> <C>
Note 1: Though not reflected in the Unaudited Pro Forma Consolidated Condensed
Statement of Earnings, Tokheim believes that through successful
integration and consolidation of the RPS Division estimated cost
savings of approximately $47.3 million can be achieved per annum after
three years.
(a) The adjustments to the RPS Division's financial statements
reflect amounts that have been reclassified to conform to
Tokheim's presentation and to remove certain costs associated
with operations as a division of Schlumberger. The details of
these reclassifications and adjustments are as follows:
Cost of sales:
Reclassification of manufacturing depreciation and
amortization to depreciation and amortization........... $ (4,200)
Reflects an adjustment to operations of
Schlumberger's Abbeville facility for nine months of
1998 which will not be purchased by Tokheim............. (525)
--------
Total adjustments and reclassification from cost
of sales........................................... (4,725)
--------
Selling, general, and administrative expenses:
Adjustments to management and technical fees
charged by Schlumberger to its subsidiaries net
of expenses Tokheim expects to incur.................... (7,021)
Reclassification of selling, general and
administrative depreciation and amortization to
depreciation and amortization........................... (1,600)
Reclassification of personnel reductions
(restructuring) to merger and acquisition costs and
other unusual items..................................... (475)
--------
Total adjustments and reclassification from selling,
general and administrative expenses................ (9,096)
--------
Depreciation and amortization:
Reclassification of manufacturing and amortization........ 4,200
Reclassification of selling, general and
administrative depreciation and amortization............ 1,600
Elimination of preexisting goodwill amortization
that Tokheim is not purchasing.......................... (2,926)
--------
Total adjustments and reclassification to
depreciation and amortization...................... 2,874
--------
Merger and acquisition costs and other unusual items:
Reclassification of personnel reductions
(restructuring) from selling, general and
administrative expenses................................. 475
--------
Total reclassification to merger and
acquisition cost and other unusual items........... 475
--------
Other expense (income), net:
Elimination of the minority interest in net earnings.
Tokheim acquired 100% of all RPS subsidiaries........... $ 25
--------
Effect of all adjustments on pretax income..................... 10,497
Tax effect on adjustments using the RPS Division's reported
tax rate of 35.6%............................................ 3,737
--------
Effect of all adjustments on net earnings............ $ 6,760
========
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C>
(b) Reflects a pro forma adjustment for technology and licensing
fees contractually payable by Schlumberger to Tokheim. These
fees relate to certain services and licenses provided to
Schlumberger by Tokheim. The contract is noncancelable and
requires minimum annual payments of $850 per annum to Tokheim
over the next 5 years. This amount represents nine months of
payments....................................................... $ 638
========
(c) The pro forma adjustment represents the amortization of
purchased goodwill associated with the Acquisition as follows:
Anticipated Nine Month
Gross Amortization Amortization
Amount Period Amount
----------- ------------ ------------
Purchased goodwill (based on a
preliminary estimate of purchase
price allocation)............... $ 236,515 40 years $ 4,435
========== ========
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
<S> <C> <C>
(d) The pro forma adjustments to interest expense, net, were calculated as follows:
Tokheim's historical interest expense, net........................................................... $ 9,882
RPS Division's historical interest expense, net...................................................... 1,333
-------
Total............................................................................... 11,215
Plus: Interest expense on borrowings under:
New Bank Credit Agreement ($188,600 at interest rates ranging from 7.65% to 9.9%, spread between
three different Facilities)...................................................................... 13,948
12.0% Senior Subordinated Seller Notes............................................................. 15,442
12.5% Senior Subordinated Notes.................................................................... 2,194
12.0% Junior Subordinated Seller PIK Note.......................................................... 3,633
-------
Total............................................................................... 35,217
Less: Interest expense on:
Tokheim debt being refinanced:
Existing Bank Credit Agreement................................................................... (1,968)
11 1/2% Senior Subordinated Notes due 2006....................................................... (6,086)
RPS Division....................................................................................... (1,333)
-------
Total............................................................................... (9,387)
-------
Sub-total.................................................................................... 37,045
Amortization of deferred financing costs:
Remove:
Existing Credit Agreement........................................................................ (880)
11 1/2% Senior Subordinated Notes................................................................ (311)
Add:
New Credit Agreement............................................................................. 1,199
12.5% Senior Subordinated Notes due 2005......................................................... 294
-------
Pro forma interest expense, net...................................................................... $37,347
=======
</TABLE>
Interest expense, net, includes that portion of interest with respect to the
Guaranteed ESOP Obligation which is not paid through dividends on, or
redemptions of, the ESOP Preferred Stock.
<PAGE>
<TABLE>
<CAPTION>
<S> <C> <C>
(e) The following table summarizes the adjustments made to the RPS Division's audited financial statements to
conform them to the terms and conditions as outlined in the Purchase Agreement.
Assets:
Cash not being purchased................................................................................ $ (9,728)
Reduction of accounts receivable for related party receivables not being purchased...................... (1,270)
Pre existing goodwill not being purchased............................................................... (49,792)
--------
Total adjustments to assets........................................................................ $(60,790)
========
Liabilities:
Cash overdraft not being assumed........................................................................ $ (2,289)
Reduction of accounts payable and accruals for related party payables not being assumed................. (527)
--------
Total adjustments to liabilities................................................................... $ (2,816)
Shareholders' Equity:
Net adjustment to retained earnings for the above adjustments of assets and liabilities................. (57,974)
--------
Total adjustments to liabilities and shareholders' equity.......................................... $(60,790)
========
(f) This amount represents the excess of cost over the fair value of the net assets (goodwill) of the
RPS Division acquired.
Total purchase price of the RPS Division.................................................................... $335,000
Purchase price adjustment for personnel reduction expenses to be reimbursed by Schlumberger............... (5,000)
--------
Adjusted purchase price................................................................................. 330,000
Book value of the RPS Division net assets, as adjusted, which is expected to approximate fair value....... 120,831
--------
Excess of cost over fair value of net assets acquired..................................................... 209,169
Direct costs associated with the Acquisition:
Legal and financial advisory fees....................................................................... 4,000
Direct acquisition costs (see note below)............................................................... 23,346
--------
Total Goodwill.......................................................................................... $236,515
========
</TABLE>
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<TABLE>
<CAPTION>
(g) This amount represents the pro forma adjustment necessary to reflect the Company's write-off of previous unamortized debt
issuance cost and the capitalization of the new debt issuance costs associated with the new financing plan. The existing
issuance costs will be written-off as a charge to extraordinary loss from debt extinguishment in the period incurred.
<S> <C>
Write-off of deferred issuance costs associated with the Existing Bank Credit Agreement..................... $ (4,467)
Write-off of deferred issuance costs associated with the 11 1/2% Senior Subordinated Notes.................. (2,647)
--------
Sub-total................................................................................................ (7,114)
Capitalization of deferred issuance costs associated with the New Bank Credit Agreement..................... 9,450
Capitalization of deferred issuance costs associated with the 12.5% Senior Subordinated Notes............... 2,750
--------
Net adjustment to reflect the fees associated with the financing of the Acquisition and refinancing
of existing debt........................................................................................ $ 5,086
========
The deferred debt issuance costs associated with the New Credit Agreement and the 12.5% Senior Subordinated Notes due 2005 will
be amortized over the life of the respective agreements on a straight line basis.
<S> <C>
(h) Pro forma adjustment to accounts payable and accruals:
Accrued interest on $55.000 of 11 1/2% Senior Subordinated Notes due 2006 to be redeemed.................... $ (2,107)
Accruable restructuring expenses............................................................................ 6,677
Accrued integration plan costs.............................................................................. 23,346
--------
$ 27,916
========
Included in accrued liabilities are certain costs Tokheim believes will be spent to close down redundant operations in
connection with the reorganization and rationalization of the RPS Division. The table below summarizes the deferred costs
included in goodwill and accrued liabilities as they relate to the integration plan for the RPS Division. The amounts do not
include costs associated with consolidation of previously existing Tokheim subsidiaries, which will be expensed as incurred,
nor do these costs benefit production in future periods.
<S> <C>
Personnel reductions........................................................................................ $ 18,466
Closure of redundant facilities............................................................................. 4,880
--------
Total.................................................................................................... $ 23,346
========
In addition to the above expenditures, the Company expects to spend approximately $900 for capital projects with future benefits.
The Company estimates future accruable restructuring charges related to the integration plan at approximately $6,677. In addition,
nonaccruable operating charges associated with the plan, which will be expensed as incurred, are estimated at $1,250. These amounts
have been aggregated and shown as a reduction of cash of $1,250, an increase in accrued expenses of $6,677 and an aggregate
reduction of retained earnings of $7,927. (see also Note below)
</TABLE>
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<TABLE>
<S> <C>
(i) This amount reflects the repayment of existing Tokheim debt and RPS
Division purchase price with the proceeds of the Senior Notes and
borrowings under the New Bank Credit Agreement.
Borrowings under the New Bank Credit Agreement............ $182,398
Borrowings under the New Bank Credit Agreement (refinance
preferred ESOP obligation).............................. 7,615
Issuance of 12.0% Senior Subordinated Note ............... 170,000
Issuance of 12.0% Junior Subordinated PIK Note due 2008... 40,000
Issuance of 12.5% Senior Note due 2005.................... 22,500
Repay:
Borrowings under the Existing Bank Credit Agreement....... (19,259)
Borrowings under the Existing Bank Credit Agreement
(refinance preferred ESOP obligation)................... (7,615)
11 1/2% Senior Subordinated Notes due 2006.............. (55,000)
--------
Net Adjustment to reflect Acquisition financing
and the application of proceeds to repay
existing debt...................................... $340,639
========
(j) Amounts represent the elimination of the RPS Division's
existing net book value (see also Note below).
(k) Per the terms of the letter agreement, the Company has financed
$20,000 of the purchase price by issuing Schlumberger a warrant
to purchase, for a nominal value, shares of Tokheim common stock.
The number of shares for which the warrant may be exercised equals
the number of shares whose value of the average closing price
thirty days prior to and thirty days after closing equals $20,000
but, not to exceed 19.9% of the total outstanding shares of the
Company at the closing date. The Company has the option, subject to bank
approval, to repurchase the warrants at Par Value.
(l) Adjustments to retained earnings (accumulated deficit) are
as follows:
Extraordinary loss from debt extinguishment:
Write-off deferred issuance costs associated with
the Existing Bank Credit Agreement...................... $ (4,467)
Write-off deferred issuance costs associated with the
11 1/2% Senior Subordinated Notes....................... (2,647)
Premiums paid to redeem 11 1/2% Senior Subordinated
Notes at the redemption percentage of 120.473% plus
Consent payment......................................... (12,332)
--------
Total extraordinary loss from debt extinguishment.... (19,446)
Other:
Accruable restructuring expenses.......................... (6,677)
Non accruable restructuring expenses...................... (1,250)
RPS Division accumulated deficit eliminated in
consolidation........................................... 79,877
--------
Total adjustment to accumulated deficit.............. $ 52,504
========
</TABLE>
Note: Dividends are payable on the Company's ESOP Preferred Stock, the proceeds
of which are used to service the Guaranteed ESOP Obligation
