<PAGE> 1
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
--------------------
FORM 8-K/A
CURRENT REPORT
Pursuant to Section 13 or 15(d) of
The Securities Exchange Act of 1934
Date of Report (Date of Earliest event reported):
August 31, 1999
-------------------
TRANSTECHNOLOGY CORPORATION
(Exact name of registrant as specified in its charter)
Delaware 1-7872 95-4062211
(State or other (Commission File (I.R.S. Employer
jurisdiction of Number) Identification
incorporation Number)
150 Allen Road 07938
Liberty Corner, NJ (Zip Code)
(Address of principal
executive offices)
(908) 903-1600
(Registrant's telephone number, including area code)
<PAGE> 2
<TABLE>
<S> <C>
Index:
------
(a) Historical Financial Information of Engineered Fasteners Division of Eaton Corporation
--------------------------------------------------------------------------------------
Independent Auditor's Report ................................................................. 3
Combined Balance Sheets....................................................................... 4
Combined Statements of Income and Other Comprehensive Income................................. 5
Combined Statements of Parent's Equity........................................................ 6
Combined Statements of Cash Flows............................................................. 7
Notes to Combined Financial Statements ....................................................... 8 - 11
(b) Pro-Forma Condensed Combined Financial Information
--------------------------------------------------
Introduction ................................................................................. 12
Pro Forma Combined Statement of Operations
for the Twelve Months Ended March 31, 1999.................................................. 13
Notes to Pro Forma Combined Statement of Operations
for the Twelve Months Ended March 31, 1999.................................................. 14
Pro Forma Combined Statement of Operations
for the Six Months Ended September 26, 1999................................................. 15
Notes to Pro Forma Combined Statement of Operations
for the Six Months Ended September 26, 1999................................................. 16
Signatures.................................................................................... 17
</TABLE>
2
<PAGE> 3
INDEPENDENT AUDITORS' REPORT
Engineered Fasteners Division
A Division of Eaton Corporation
We have audited the accompanying combined balance sheets of Engineered Fasteners
Division (the "Company"), a division of Eaton Corporation (the "Parent"), as of
December 31, 1998 and 1997, and the related combined statements of income and
comprehensive income, parent's equity and of cash flows for each of the three
years in the period ended December 31, 1998. These combined financial statements
are the responsibility of the Company's management. Our responsibility is to
express an opinion on these combined financial statements based on our audits.
We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to obtain
reasonable assurance about whether the financial statements are free of material
misstatement. An audit includes examining, on a test basis, evidence supporting
the amounts and disclosures in the financial statements. An audit also includes
assessing the accounting principles used and significant estimates made by
management, as well as evaluating the overall financial statement presentation.
We believe that our audits provide a reasonable basis for our opinion.
In our opinion, such financial statements present fairly, in all material
respects, the combined financial position of the Company as of December 31, 1998
and 1997, and the combined results of its operations and its combined cash flows
for each of the three years in the period ended December 31, 1998 in conformity
with generally accepted accounting principles.
/s/ Deloitte & Touche LLP
Cleveland, Ohio
October 8, 1999
3
<PAGE> 4
ENGINEERED FASTENERS DIVISION
A DIVISION OF EATON CORPORATION
COMBINED BALANCE SHEETS
DECEMBER 31, 1998 AND 1997
- ----------------------------------------------------------------------------
<TABLE>
<CAPTION>
ASSETS 1998 1997
CURRENT ASSETS:
<S> <C> <C>
Cash and cash equivalents $ 1,123 $ 1,149
Accounts receivable - net of the allowance for doubtful
accounts of $117,000 and $94,000 in 1998 and 1997, respectively 10,469,818 12,241,826
Inventory 9,104,530 6,438,678
Prepaid expenses and other current assets 12,219 245,851
Deferred income taxes 1,105,700 917,300
------------ ------------
Total current assets 20,693,390 19,844,804
PROPERTY, PLANT AND EQUIPMENT, at cost:
Land 199,155 137,336
Building and building improvements 3,531,960 2,590,282
Machinery and equipment 24,582,333 21,814,090
Capitalized software 5,754,100 619,500
Construction in process 425,398 1,781,924
------------ ------------
Subtotal 34,492,946 26,943,132
Accumulated depreciation (14,248,118) (12,253,528)
------------ ------------
Property, plant and equipment - net 20,244,828 14,689,604
------------ ------------
TOTAL ASSETS $ 40,938,218 $ 34,534,408
============ ============
LIABILITIES AND PARENT'S EQUITY
CURRENT LIABILITIES:
Accounts payable $ 4,264,736 $ 4,547,027
Accrued expenses 3,295,144 3,475,630
------------ ------------
Total current liabilities 7,559,880 8,022,657
OTHER LONG-TERM LIABILITIES 183,376 57,500
DEFERRED INCOME TAXES 1,516,300 1,682,200
------------ ------------
Total liabilities 9,259,556 9,762,357
COMMITMENTS AND CONTINGENCIES (Note 8)
PARENT'S EQUITY 31,678,662 24,772,051
------------ ------------
TOTAL LIABILITIES AND PARENT'S EQUITY $ 40,938,218 $ 34,534,408
============ ============
</TABLE>
See notes to combined financial statements.
4
<PAGE> 5
ENGINEERED FASTENERS DIVISION
A DIVISION OF EATON CORPORATION
COMBINED STATEMENTS OF INCOME AND COMPREHENSIVE INCOME
YEARS ENDED DECEMBER 31, 1998, 1997 AND 1996
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
1998 1997 1996
<S> <C> <C> <C>
NET SALES $ 94,257,807 $ 91,575,023 $ 85,988,270
COST OF SALES 64,075,348 60,166,426 55,386,518
------------ ------------ ------------
Gross profit 30,182,459 31,408,597 30,601,752
------------ ------------ ------------
OPERATING EXPENSES:
Selling 5,953,068 5,927,257 5,510,417
Administrative 3,728,453 3,328,249 4,246,818
Distribution 2,692,396 2,673,504 2,341,274
------------ ------------ ------------
Total operating expenses 12,373,917 11,929,010 12,098,509
------------ ------------ ------------
INCOME FROM OPERATIONS 17,808,542 19,479,587 18,503,243
OTHER (INCOME) EXPENSE:
Other income (180,138) (114,973) (33,729)
Other expense 5,605 2,146 11,253
------------ ------------ ------------
INCOME BEFORE INCOME TAX EXPENSE 17,983,075 19,592,414 18,525,719
INCOME TAX EXPENSE 6,482,700 7,535,500 7,274,800
------------ ------------ ------------
NET INCOME 11,500,375 12,056,914 11,250,919
------------ ------------ ------------
OTHER COMPREHENSIVE INCOME, NET OF
TAX - Currency translation adjustment (858,174) (452,803) (32,850)
------------ ------------ ------------
TOTAL COMPREHENSIVE INCOME $ 10,642,201 $ 11,604,111 $ 11,218,069
============ ============ ============
</TABLE>
See notes to combined financial statements.
-5-
<PAGE> 6
ENGINEERED FASTENERS DIVISION
A DIVISION OF EATON CORPORATION
COMBINED STATEMENTS OF PARENT'S EQUITY
YEARS ENDED DECEMBER 31, 1998, 1997 AND 1996
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
TOTAL
COMPREHENSIVE OTHER PARENT'S
INCOME EQUITY EQUITY
<S> <C> <C> <C>
BALANCE, JANUARY 1, 1996 $ 24,310 $ 22,137,676 $ 22,161,986
Net income 11,250,919 11,250,919
Net transactions with parent (12,753,225) (12,753,225)
Foreign currency translation adjustment - net of taxes (32,850) (32,850)
------------ ------------ ------------
BALANCE, DECEMBER 31, 1996 (8,540) 20,635,370 20,626,830
Net income 12,056,914 12,056,914
Net transactions with parent (7,458,890) (7,458,890)
Foreign currency translation adjustment - net of taxes (452,803) (452,803)
------------ ------------ ------------
BALANCE, DECEMBER 31, 1997 (461,343) 25,233,394 24,772,051
Net income 11,500,375 11,500,375
Net transactions with parent (3,735,590) (3,735,590)
Foreign currency translation adjustment - net of taxes (858,174) (858,174)
------------ ------------ ------------
BALANCE, DECEMBER 31, 1998 $ (1,319,517) $ 32,998,179 $ 31,678,662
============ ============ ============
</TABLE>
See notes to combined financial statements.
-6-
<PAGE> 7
ENGINEERED FASTENERS DIVISION
A DIVISION OF EATON CORPORATION
COMBINED STATEMENTS OF CASH FLOWS
YEARS ENDED DECEMBER 31, 1998, 1997 AND 1996
- -----------------------------------------------------------------------------
<TABLE>
<CAPTION>
1998 1997 1996
<S> <C> <C> <C>
OPERATING ACTIVITIES:
Net income $ 11,500,375 $ 12,056,914 $ 11,250,919
Adjustments to reconcile net income to net cash
provided by operating activities:
Depreciation 2,610,556 2,222,203 1,972,212
Deferred income taxes (354,300) 74,500 223,800
Change in operating assets and liabilities:
Accounts receivable 1,424,995 (3,725,541) 372,045
Inventories (2,831,276) (8,216) 123,455
Prepaid expenses and other current assets 235,976 447,497 637,776
Other long-term liabilities 125,876 (92,149) (25,007)
Accounts payable (169,931) (43,067) 955,070
Accrued expenses and other liabilities (109,166) 943,469 (59,103)
------------ ------------ ------------
Net cash provided by operating activities 12,433,105 11,875,610 15,451,167
------------ ------------ ------------
CASH FLOWS FROM INVESTING ACTIVITIES -
Purchase of property, plant and equipment, net (8,697,541) (4,416,998) (2,697,681)
------------ ------------ ------------
CASH FLOWS FROM FINANCING ACTIVITIES -
Net transactions with parent (3,735,590) (7,458,890) (12,753,225)
------------ ------------ ------------
NET INCREASE (DECREASE) IN CASH
AND CASH EQUIVALENTS (26) (278) 261
CASH AND CASH EQUIVALENTS,
BEGINNING OF YEAR 1,149 1,427 1,166
------------ ------------ ------------
CASH AND CASH EQUIVALENTS,
END OF YEAR $ 1,123 $ 1,149 $ 1,427
============ ============ ============
</TABLE>
See notes to combined financial statements.
-7-
<PAGE> 8
ENGINEERED FASTENERS DIVISION
A DIVISION OF EATON CORPORATION
NOTES TO COMBINED FINANCIAL STATEMENTS
YEARS ENDED DECEMBER 31, 1998, 1997 AND 1996
- --------------------------------------------------------------------------------
1. PRINCIPLES OF COMBINATION, BUSINESS DESCRIPTION
AND ACCOUNTING POLICIES
COMBINATION AND PRESENTATION - The combined financial statements include
the accounts of Eaton Corporation's Engineered Fasteners Division (the
"Company") of Eaton Corporation (the "Parent"), including the Fastener
Division of Eaton Yale Limited, a Canadian Subsidiary of Eaton
Corporation. All significant intercompany transactions and accounts have
been eliminated within the Company.
On September 1, 1999, substantially all of the Company's operating
assets were acquired and certain of its liabilities were assumed by
TransTechnology Corporation. The accompanying financial statements are
presented under the Company's historical basis of accounting and do not
reflect any adjustments which would be required as a result of the
acquisition by TransTechnology Corporation. Company management believes
that the financial statements reflect all material expenses of the
Company assuming the Company was organized as a stand-alone legal
entity, including specifically identifiable costs incurred by the Parent
on behalf of, and charged to, the Company.
BUSINESS DESCRIPTION - The Company operates primarily under the
Tinnerman (R) brand name, principally in the formed metal products
industry, manufacturing threaded and other formed metal fasteners
generally in accordance with blueprints and specifications for
particular uses for customers' transportation products, domestic and
commercial appliances, industrial electric equipment and heavy
construction equipment. The Company has manufacturing facilities in
Brunswick and Massillon, Ohio, and Hamilton, Ontario, Canada.
The Company derived revenues from customers in the United States of
approximately $79 million, $79.1 million, and $75.7 million in fiscal
years 1998, 1997 and 1996, respectively. The remainder of the Company's
revenues are related to customers outside of the United States. The
Company had long-lived assets located in the United States of
approximately $13.3 million and $8 million at December 31, 1998 and
December 31, 1997, respectively. The remainder of the Company's
long-lived assets are related to operations in Canada
ACCOUNTS RECEIVABLE ALLOWANCES - The Company provides allowances for
losses estimated to be incurred on existing trade accounts receivable.
The allowances are based on historical collection experience and
specific identification.
INVENTORIES - Inventories are valued at the lower of cost or market,
with cost determined on a first-in, first-out (FIFO) basis.
PROPERTY, PLANT AND EQUIPMENT - Property, plant and equipment are
recorded at cost. Depreciation is computed using the straight-line
method over the estimated useful lives, which range from 10 to 40 years
for building and building improvements and 3 to 10 years for machinery
and equipment and furniture and fixtures. The Company is accounting for
the costs of new software in accordance with Statement of Position 98-1,
"Accounting for the Costs of Computer Software Developed or Obtained for
Internal Use." Accordingly, costs have been expensed or capitalized
depending on whether they were incurred in the
8
<PAGE> 9
preliminary project stage, application development stage, or post
implementation stage. Reengineering, training, and other costs such as
data conversion have been expensed as incurred.
PENSION AND OTHER POST-RETIREMENT BENEFITS - Certain employees of the
Company are eligible for benefits provided under various pension and
post-retirement plans administered by the Parent. The corresponding
assets and liabilities associated with these plans are recorded by the
Parent and are not included in the balance sheet as the assets and
liabilities are being retained by the Parent.
INCOME TAXES - The results of domestic and Canadian operations of the
Company are included in the Parent's consolidated tax returns. For
purposes of these stand-alone financial statements, income taxes are
determined as though the Company filed separate U.S. federal, Canadian,
state and local corporate income tax returns. Current taxes payable for
U.S. federal, state, local and Canadian taxes are reflected in the
Parent's equity account. Deferred tax assets and liabilities are
recognized for the estimated future effects of differences between the
basis of assets and liabilities for financial reporting and income tax
purposes giving consideration to enacted tax laws.
FOREIGN CURRENCY TRANSLATION - The balance sheet of the Company's
Canadian operations is translated into U.S. dollars at exchange rates in
effect at the balance sheet date. Canadian operating results are
translated at weighted average exchange rates in effect during the
period. Net unrealized translation gains (losses) are recorded as a
component of the Parent's equity.
REVENUE RECOGNITION - Revenue is recognized when products are shipped to
customers. Sales returns and allowances are treated as a reduction to
sales and are provided for based on historical experience and current
estimates.
RECENTLY ISSUED ACCOUNTING STANDARDS - The Financial Accounting
Standards Board has issued Statement of Financial Accounting Standards
("SFAS") No. 133, "Accounting for Derivative Instruments and Hedging
Activities," effective for fiscal years beginning after June 15, 2000.
SFAS No. 133 provides a comprehensive and consistent standard for the
recognition and measurement of derivatives and hedging activities. The
Company has not yet determined what effect this statement will have on
the earnings and financial position of the Company.
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 those estimates.
2. INVENTORY
<TABLE>
<CAPTION>
1998 1997
<S> <C> <C>
Raw materials $ 1,421,635 $ 1,525,766
Work-in-process 7,754,895 4,985,912
Inventory excess and obsolescence reserve (72,000) (73,000)
----------- -----------
Total $ 9,104,530 $ 6,438,678
=========== ===========
</TABLE>
9
<PAGE> 10
3. OTHER BALANCE SHEET INFORMATION
<TABLE>
<CAPTION>
1998 1997
Accrued expenses:
<S> <C> <C>
Accrued payroll and related employee benefits $1,572,000 $1,764,000
Other 1,723,144 1,711,630
---------- ----------
Total $3,295,144 $3,475,630
========== ==========
</TABLE>
Included in accounts payable at December 31, 1998 and 1997 are
liabilities in the amount of $896,482 and $171,145, respectively, for
checks issued in excess of bank balances but not yet presented for
collection.
4. CONCENTRATION OF CREDIT RISK AND SALES TO MAJOR CUSTOMERS
The Company maintains ongoing credit evaluations of its customers and
generally requires no collateral or other security to guarantee trade
receivables. The Company provides reserves against potential credit
losses based upon factors surrounding the credit risk of specific
customers, historical trends and other information. Net sales to one
customer accounted for 32 percent, 29 percent and 30 percent of total
net sales for the years ended December 31, 1998, 1997 and 1996,
respectively. The receivable from this customer was approximately
$2,755,000 and $2,729,000 for the years ended December 31, 1998 and
1997, respectively.
5. RETIREMENT PLANS
The Parent has a 401(k) defined contribution plan in which substantially
all domestic salaried employees are eligible to participate.
Participants may contribute up to 17 percent of their salary with the
Parent matching between 25 percent and 100 percent of their
contributions up to 6 percent of their salary. The Company's expense for
this plan was $333,429, $259,520 and $276,088 for the years ended
December 31, 1998, 1997 and 1996, respectively.
The Company's expense for benefits provided under the various pension
and post-retirement plans administered by the Parent was approximately
$856,000, $733,000 and $668,000 for the years ended December 31, 1998,
1997 and 1996, respectively.
6. INCOME TAXES
Income tax expense for domestic and foreign operations that file a
combined tax return with the Parent was calculated utilizing statutory
rates multiplied by pretax income as adjusted for known book tax
differences.
Income tax provision/(benefit) for the years ended December 31, 1998,
1997 and 1996 consists of the following:
<TABLE>
<CAPTION>
1998 1997 1996
Current:
<S> <C> <C> <C>
U.S federal $ 3,089,000 $ 3,482,000 $ 3,299,000
Foreign 3,203,000 3,365,000 3,170,000
State and local 545,000 614,000 582,000
----------- ----------- -----------
Total current 6,837,000 7,461,000 7,051,000
----------- ----------- -----------
Deferred (354,300) 74,500 223,800
----------- ----------- -----------
Income tax provision $ 6,482,700 $ 7,535,500 $ 7,274,800
=========== =========== ===========
</TABLE>
10
<PAGE> 11
Domestic and foreign components of income before taxes are summarized as
follows:
<TABLE>
<CAPTION>
1998 1997 1996
<S> <C> <C> <C>
Domestic $ 9,000,458 $10,155,878 $ 9,637,496
Foreign 8,982,617 9,436,536 8,888,223
----------- ----------- -----------
Total $17,983,075 $19,592,414 $18,525,719
=========== =========== ===========
</TABLE>
Deferred income taxes reflect the net tax effects of temporary differences
between the carrying amounts of assets and liabilities for financial
reporting purposes and the amounts used for income tax purposes. Components
of the Company's deferred tax assets and (liabilities) are as follows:
<TABLE>
<CAPTION>
1998 1997
<S> <C> <C>
Depreciation and other basis difference
for property, plant and equipment $(1,516,300) $(1,682,200)
Allowances on inventories and receivables 540,000 353,100
Accrued liabilities 565,700 564,200
----------- -----------
Other - net $ (410,600) $ (764,900)
=========== ===========
</TABLE>
Effective tax rates differ from the U.S. federal statutory rates primarily
due to foreign, state and local income taxes and nondeductible expenses
(principally meals and entertainment). All tax payments on the Company's
behalf are made by the Parent.
7. RELATED PARTY TRANSACTIONS
As the Company is a division of the Parent, customary equity and capital
accounts are not maintained. Instead, the Parent's equity is utilized to
account for all transactions between the Company and the Parent. As a
division, the Company records corporate general and administrative expenses
for services provided to the Company by the Parent, including legal,
treasury and accounting functions.
The Canadian division has a royalty agreement with the Parent whereby the
Canadian division pays the Parent a five percent royalty on all shipments.
The royalty is in consideration for the product design, patent development,
and technical assistance provided to the Canadian division by the Parent
during the manufacturing and sales process. Total royalty expense was
$1,686,002, $1,695,088 and $1,573,080 in 1998, 1997 and 1996, respectively.
8. COMMITMENTS AND CONTINGENCIES
The Company leases certain facilities and various equipment under
noncancelable leases expiring through March 2004. The future minimum
obligations under non-cancelable operating leases in effect at December 31,
1998 are $179,193 in 1999; $181,764 in 2000, 2001, 2002 and 2003; and
$45,441 thereafter. Total rental expense for operating leases was $509,344,
$579,362 and $689,103 in 1998, 1997 and 1996, respectively.
Certain claims, suits and complaints arising in the ordinary course of
business have been filed or are pending against the Company. In the
opinion of management, the results of all such matters will not have a
material adverse effect on the Company's financial position, results of
operations or cash flows.
11
<PAGE> 12
PRO FORMA COMBINED FINANCIAL STATEMENTS
INTRODUCTION
(Unaudited)
The unaudited pro forma combined financial information presented herein gives
effect to the purchase of substantially all of the net assets of the Engineered
Fasteners Division ("Tinnerman") of Eaton Corporation ("Eaton") by
TransTechnology Corporation ("TTC") effective August 31, 1999. TTC's fiscal year
ends on March 31, and Eaton's fiscal year ends on December 31.
A pro forma combined balance sheet is not presented herein as the consolidated
balance sheet of TTC at September 26, 1999 includes the assets and liabilities
of Tinnerman. That consolidated balance sheet was included in TTC's Form 10-Q,
filed on November 9, 1999.
The unaudited pro forma combined statement of operations data being presented
for the twelve month period ended March 31, 1999 combines Tinnerman's audited
twelve months of operations ended December 31, 1998 with TTC's twelve months of
operations ended March 31, 1999. The pro forma adjustments to the statement of
operations assume that the acquisition was consummated as of April 1, 1998.
In addition, unaudited pro forma statement of operations are presented for the
six-month period ended September 26, 1999, which reflect results of operations
of Tinnerman for this six month period. The pro forma adjustments to the
statement of operations assume that the acquisition was consummated as of April
1, 1998.
The accompanying pro forma statements of operations include adjustments to
reflect additional depreciation and amortization resulting from the preliminary
allocation of purchase price of $173 million to the net assets acquired,
additional interest expense for debt incurred to finance the acquisition and
debt issue cost amortization. In addition, the pro forma results of operations
eliminate amounts related to the metal headlight shield product line of
Tinnerman which was discontinued by Eaton. Also, certain costs and expenses,
specifically royalty payments to Eaton, software installation costs and costs of
Eaton benefit plans which will not have a continuing impact or were incidental
to the Tinnerman operation acquired by TTC, have been eliminated in the
accompanying pro forma combined statements of operations.
The unaudited pro forma combined statements of operations are intended for
informational purposes only and are not necessarily indicative of the future
results of operations or operations of the combined company had the acquisition
taken place as of April 1, 1998. These unaudited pro forma combined statements
of operations and the accompanying notes should be read in conjunction with the
combined financial statements, including the accompanying notes, of Tinnerman
which are included elsewhere in this Form 8-K/A and the consolidated financial
statements of TTC which are included in TTC's annual report on Form 10-K for the
year ended March 31, 1999 and the quarterly report on Form 10-Q for the period
ended September 26, 1999.
In the opinion of management, all adjustments have been made that are necessary
to present fairly the pro forma data.
12
<PAGE> 13
PRO FORMA COMBINED STATEMENT OF OPERATIONS
For the Twelve Months Ended March 31, 1999
(Unaudited)
(in Thousands of Dollars Except Per Share Amounts)
<TABLE>
<CAPTION>
TransTechnology
Corporation Tinnerman Pro Forma Pro Forma
Historical Historical Adjustments Combined
-------------- -------------- ----------- ------------
<S> <C> <C> <C> <C>
Net sales $ 228,006 $ 94,258 $ (7,765) (A) $ 314,499
Cost of sales 156,090 64,075 (8,920) (A) 211,245
--------- --------- --------- ---------
Gross profit 71,916 30,183 1,155 103,254
General, administrative and selling expenses 46,552 12,374 3,329 (B),(C),(D),(E),(F) 62,255
Interest expense 6,938 - 18,569 (G) 25,507
Other income - net (6,774) (174) (6,948)
Allowance for possible loss on notes 906 - 906
receivable
--------- --------- --------- ---------
Income before income taxes and
extraordinary item 24,294 17,983 (20,743) 21,534
Provision for income taxes 9,704 6,483 (7,586) (H) 8,601
--------- --------- --------- ---------
Income before extraordinary item $ 14,590 $ 11,500 $ (13,157) $ 12,933
========= ========= ========= =========
Earnings per share:
Basic $ 2.33 $ 2.07
Diluted $ 2.30 $ 2.04
Number of shares used in computation
of per share information:
Basic 6,249 6,249
Diluted 6,341 6,341
</TABLE>
See notes to pro forma combined financial statements
13
<PAGE> 14
NOTES TO PRO FORMA COMBINED STATEMENT OF OPERATIONS
For the Twelve Months Ended March 31, 1999
(A) Reflects the elimination of sales ($7,765) and cost of sales ($8,920) for
the Tinnerman metal headlight shield product line that has been
discontinued as of the date of the acquisition.
(B) Reflects an adjustment ($717) to remove certain costs related to computer
software implementation that will not be used after the acquisition date.
(C) Reflects reduced annual pension benefits costs under new ownership ($400).
(D) Reflects incremental amortization of goodwill, trademarks, and patents
($3,672).
(E) Reflects amortization of incremental bank loan fees ($2,460) that were
incurred to arrange new credit lines.
(F) Reflects the elimination of intercompany royalty paid by Tinnerman to Eaton
($1,686).
(G) Reflects pro forma incremental interest expense ($18,569) that would have
been incurred to finance acquisition.
(H) Reflects the tax effect on the pro forma adjustments using TTC's statutory
tax rate.
14
<PAGE> 15
PRO FORMA COMBINED STATEMENT OF OPERATIONS
For the Six Months Ended September 26, 1999
(Unaudited)
(in Thousands of Dollars Except Per Share Amounts)
<TABLE>
<CAPTION>
TransTechnology
Corporation Tinnerman Pro Forma Pro Forma
Historical Historical Adjustments Combined
---------------- ------------ --------------- --------------------
<S> <C> <C> <C> <C>
Net sales $ 118,271 $ 37,225 $ (3,008) (A) $ 152,488
Cost of sales 83,291 26,925 (2,596) (A) 107,620
--------- --------- --------- ---------
Gross profit 34,980 10,300 (412) 44,868
General, administrative and selling expenses 22,924 3,160 1,776 (B),(C) 27,860
Interest expense 5,096 - 7,971 (D) 13,067
Other income, net (499) - (499)
Provision for plant consolidation 4,490 - 4,490
--------- --------- --------- ---------
Income before income taxes and
and extraordinary item 2,969 7,140 (10,159) (50)
Provision for income taxes 1,141 2,742 (3,902) (E) (19)
--------- --------- --------- ---------
Income before extraordinary item $ 1,828 $ 4,398 $ (6,257) $ (31)
========= ========= ========= =========
Earnings per share:
Basic $ 0.30 $ (0.01)
Diluted $ 0.30 $ (0.01)
Number of shares used in computation
of per share information:
Basic 6,131 6,131
Diluted 6,154 6,131
</TABLE>
See notes to pro forma combined financial statements
15
<PAGE> 16
NOTES TO PRO FORMA COMBINED STATEMENT OF OPERATIONS
For the Six Months Ended September 26, 1999
(A) Reflects the elimination of sales ($3,008) and cost of sales ($2,596) for
the Tinnerman metal headlight shield product line that has been
discontinued as of the date of the acquisition.
(B) Reflects incremental amortization of goodwill, trademarks, and patents
($1,524).
(C) Reflects amortization of incremental bank loan fees ($252) that were
incurred to arrange new credit lines.
(D) Reflects pro forma incremental interest expense ($7,971) that would have
been incurred to finance acquisition.
(E) Reflects the tax effect on the pro forma adjustments using TTC's statutory
tax rate.
16
<PAGE> 17
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 hereunto duly authorized.
Date: November 12, 1999
TRANSTECHNOLOGY CORPORATION
/s/Joseph F. Spanier
----------------------------------------
Joseph F. Spanier
Vice President, Chief Financial Officer
and Treasurer
17
