SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
Form 8-K
CURRENT REPORT
PURSUANT TO SECTION 13 OR 15(d) OF
THE SECURITIES EXCHANGE ACT OF 1934
Date of Report (Date of earliest event reported): June 8, 2000
APPLIED POWER INC.
(Exact name of Registrant as specified in its charter)
Wisconsin 1-11288 39-0168610
(State or other jurisdiction (Commission File (I.R.S. Employer
of incorporation) Number) Identification No.)
N22 W23685 Ridgeview Parkway West
Waukesha, Wisconsin 53188-1013
Mailing address: P.O. Box 325, Milwaukee, Wisconsin 53201
(Address of principal executive offices) (Zip code)
Registrant's telephone number, including area code: (262) 523-7600
Item 5. Other Events.
On June 7, 2000, Applied Power Inc. (the "Company") announced in a
press release record sales of $497.5 million for its fiscal third quarter ended
May 31, 2000, an increase of 13% over the prior year third quarter results. The
announcement was made in preparation of a research analyst meeting to be hosted
by Applied Power Inc. on June 8, 2000. Sales for the quarter in the Company's
Electronics segment were $319.6 million, an increase of 23% over the third
quarter of last year. The Company's Industrial segment recorded sales of $177.9
million in the quarter, a slight decrease over the third quarter of last year.
The Company is proceeding with plans to separate its Electronics segment via a
spin-off to shareholders, with the new public company to be named APW Ltd.
In prepared remarks delivered today to investment professionals at the
aforementioned analyst meeting, the Company projected the following results for
APW Ltd.:
APW Ltd.
Pro Forma - Income Statements
(in millions, except per share data)
For the year ended
August 31, 2000 August 31, 2001
(estimated) (estimated)
Net Sales $1,216.2 $1,460.0
Gross Profit 319.7 380.4
Selling, Administrative &
Engineering expenses 202.7 231.0
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EBITA 117.0 149.4
Amortization of Intangible Assets 24.0 24.4
Net Financing Costs 27.0 25.7
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Earnings Before Income Taxes 66.0 99.3
Income Tax Expense 19.8 29.8
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Net Earnings $ 46.2 $ 69.5
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Diluted Earnings per Share $ 1.14 $ 1.67
======== ========
Cash Earnings per Share $ 1.69 $ 2.21
======== ========
EBITDA 151.1 189.6
Pro Forma - Balance Sheets
(in millions)
August 31, 2000 August 31, 2001
(estimated) (estimated)
ASSETS
Cash & Equivalents $ 5.0 $ 5.0
Net Accounts Receivable 121.6 144.9
Net Inventory 121.6 147.9
Other Current Assets 16.8 19.3
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Total Current Assets 265.0 317.1
Net Property, Plant & Equipment 195.8 200.7
Net Goodwill 665.9 642.3
Net Other Intangibles 10.9 10.1
Other Non-current Assets 49.1 49.9
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TOTAL ASSETS $1,186.7 $1,220.1
======== ========
LIABILITIES & SHAREHOLDERS' EQUITY
Trade Accounts Payable $ 110.7 $ 135.6
Other Current Liabilities 75.5 77.0
Income Taxes Payable 77.8 39.3
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Total Current Liabilities 264.0 251.9
Debt 253.8 229.3
Deferred Income Taxes 8.2 8.2
Other Non-Current Liabilities 42.9 43.4
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TOTAL LIABILITIES 568.9 532.8
SHAREHOLDERS' EQUITY 617.8 687.3
-------- --------
TOTAL LIABILITIES & SHAREHOLDERS' EQUITY $1,186.7 $1,220.1
======== ========
Pro Forma - Cash Flow For the Year Ended
(in millions) August 31, 2000 August 31, 2001
(estimated) (estimated)
Net Earnings $ 46.2 $ 69.5
Depreciation 34.1 40.2
Amortization 24.0 24.4
Working Capital (21.1) (24.6)
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Cash Flow from Operations 83.2 109.5
Capital Expenditures (35.0) (45.0)
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Free Cash Flow $ 48.2 $ 64.5
====== ======
Pro Forma - Working Capital Statistics
% to Sales
Net Accounts Receivable 10.0% 9.9%
Net Inventory 10.0% 10.2%
Trade Accounts Payable 9.1% 9.4%
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Net Primary Working Capital 10.9% 10.8%
These forward looking statements and projections for the future are
based upon unaudited information, including the Company's third quarter results.
These projections assume:
. Sales projections are based upon current underlying business conditions as
described in the Company's June 7, 2000 press release. (see Exhibit 99.1)
. The above income statement amounts exclude one time costs associated with
the spin-off, including, but not limited to, tax expense associated with
APW Ltd.'s incorporation in Bermuda.
. General corporate expenses of $12 million are included in both years
presented.
. Effective blended interest rate assumed to be 7.75%.
. Diluted shares outstanding of 40.5 million in fiscal year 2000 and 41.6
million in fiscal year 2001.
Definitions (measures believed to be useful to investors)
-----------
. EBITA = Earnings before Interest, Taxes and Amortization of Intangible
Assets
. EBITDA = Earnings before Interest, Taxes, Depreciation and Amortization of
Intangible Assets
. Cash Earnings Per Share = Diluted Earnings per share adjusted for after-tax
amortization
Neither Applied Power Inc. nor APW Ltd. assumes any obligation to
update these projections and these figures are as presented on June 8, 2000. The
Registrant reports that its Electronics segment, with respect to risk factors
described below, anticipates revenue growth as set forth above. The earnings per
share are based upon estimates of the projected common stock and common stock
equivalents after the spin-off of APW's Electronics business from the Company.
The number of stock options outstanding depends upon the actual APW
Ltd. and Applied Power Inc. common stock trading prices, which are not yet
known. Actual results could differ materially from those projected in the
forward-looking results.
Certain of the above comments represent forward-looking statements
made pursuant to the provisions of the Private Securities Litigation Reform Act
of 1995. Management cautions that these projections are based on current
estimates of future performance and are highly dependent upon a variety of
factors, which could cause actual results to differ from these estimates.
Applied Power's results are also subject to general economic conditions,
continued market acceptance of the Company's new product introductions, the
successful integration of recent and pending acquisitions, operating margin risk
due to competitive pricing, foreign currency fluctuations and interest rate
risk. The above projections assume completion of the spin-off of the Electronics
business and entry into financing arrangements on currently anticipated terms.
Item 7. Financial Statements and Exhibits.
(c) Exhibits:
See Exhibit Index following the Signature page of this report, which
is incorporated herein by reference.
(i) Press release dated June 7, 2000.
SIGNATURE
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, thereunto duly authorized.
APPLIED POWER INC.
(Registrant)
Date: June 8, 2000 By: /s/ Richard D. Carroll
-------------------------------------
Richard D. Carroll
Vice President - Finance
(Acting Principal Financial Officer
and duly authorized to sign on
behalf of the Registrant)
APPLIED POWER INC.
(the "Registrant")
(Commission File No. 1-11288)
EXHIBIT INDEX
to
FORM 8-K CURRENT REPORT
Dated June 8, 2000
Exhibit Filed
Number Description Herewith
- ------ ----------- --------
99.1 Applied Power Inc.
Press Release X
dated June 7, 2000