UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
Form 8-K/A
AMENDMENT NO. 1 TO 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 3, 1997*
APPLIED POWER INC.
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(Exact name of Registrant as specified in its charter)
Wisconsin 1-11288 39-0168610
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(State of incorporation) (Commission File No.) (I.R.S. Employer Id. No.)
13000 West Silver Spring Drive
Butler, Wisconsin 53007
Mailing address: P.O. Box 325, Milwaukee, Wisconsin 53201
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(Address of principal executive offices) (Zip Code)
(414) 781-6600
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(Registrant's telephone number, including area code)
______________________
*This Amendment is filed pursuant to the provisions of paragraph (a) (4) of Item
7 of Form 8-K.
The undersigned registrant hereby amends the following items, financial
statements, exhibits or other portions of its Current Report dated as of October
3, 1997 on Form 8-K (the "10/3/97 8-K") as set forth in the pages attached
hereto to furnish the required information:
Pursuant to the provisions of paragraph (a) (4) of Item 7 of Form 8-K, Item 7 of
the 10/3/97 8-K is hereby amended to file the pro forma financial information
required to be filed pursuant to Item 7(b) in connection with the acquisition of
Versa Technologies, Inc. ("Versa/Tek") reported in Item 2 of the 10/3/97 8-K.
SIGNATURE
Pursuant to the requirements of the Securities Exchange Act of 1934, the
Registrant has duly caused this Amendment to be signed on its behalf by the
undersigned, thereunto duly authorized.
APPLIED POWER INC.
Date: December 17, 1997 By: /s/ Robert C. Arzbaecher
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Robert C. Arzbaecher,
Vice President and
Chief Financial Officer
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Item 7. Financial Statements and Exhibits
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(a) Financial Statements of Business Acquired:
The following financial statements of Versa/Tek (Commission File No.
0-5240) are incorporated herein by reference to pages 13 through 25 of
Versa/Tek's 1997 Annual Report to Shareholders (such financial statements
having been incorporated by reference in Versa/Tek's Annual Report on
Form 10-K for the fiscal year ended March 31, 1997 from the 1997 Annual
Report to Shareholders):
Consolidated Statement of Earnings for the years ended March 31, 1997,
1996 and 1995
Consolidated Balance Sheets as of March 31, 1997 and 1996
Consolidated Statements of Shareholders' Equity for the years ended
March 31, 1997, 1996 and 1995
Consolidated Statements of Cash Flows for the years ended March 31,
1997, 1996 and 1995
Notes to Consolidated Financial Statements
Independent Auditors' Report
The following unaudited consolidated financial statements of Versa/Tek
are incorporated herein by reference to pages 3 through 7 of its
Quarterly Report on Form 10-Q for the quarterly period ended June 30,
1997:
Consolidated Balance Sheet as of June 30, 1997
Consolidated Statements of Earnings for the three months ended June
30, 1997 and 1996
Consolidated Statements of Cash Flows for the three months ended June
30, 1997 and 1996
Notes to Financial Statements
(b) Pro Forma Financial Information:
The following unaudited pro forma condensed consolidated financial
statements of Applied Power Inc. and subsidiaries, reflecting the
acquisition of Versa/Tek, are filed herewith:
Introduction to Pro Forma Condensed Consolidated Financial Statements
of Applied Power Inc. and Versa Technologies, Inc.
Applied Power Inc. and Versa Technologies, Inc. Pro Forma Condensed
Consolidated Balance Sheet as of August 31, 1997 and the related Pro
Forma Condensed Consolidated Statement of Earnings for the year then
ended (unaudited).
Notes to Pro Forma Condensed Consolidated Financial Statements
(unaudited).
(c) Exhibits:
See the Exhibit Index following the Signature page of this Report, which
is incorporated herein by reference.
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APPLIED POWER INC. AND VERSA TECHNOLOGIES, INC.
INTRODUCTION TO PRO FORMA CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
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Unaudited
As described under Item 2 of this report as originally filed on October 20,
1997, Applied Power Inc. (the "Company"), through a wholly-owned subsidiary,
acquired by means of a tender offer and follow-up merger all outstanding shares
of common stock of Versa Technologies, Inc. ("Versa/Tek") at a price of $24.625
per share in cash.
The following unaudited pro forma condensed consolidated balance sheet and
statement of earnings (the "pro forma statements") give effect to the
acquisition of Versa/Tek using the purchase method of accounting and are based
on the estimates and assumptions set forth in the notes to such pro forma
statements. The pro forma statements have been prepared by the Company utilizing
the historical financial statements of the Company and of Versa/Tek and
accordingly, should be read in conjunction with such historical financial
statements of the Company and notes thereto which were contained in the
Company's Annual Report on Form 10-K for the fiscal year ended August 31, 1997
and the audited financial statements and notes thereto of Versa/Tek,
incorporated by reference in Item 7(a) of this report.
These pro forma statements have been prepared and included herein as required by
the rules and regulations of the Securities and Exchange Commission and are
provided for comparative purposes only. The pro forma statements are not
necessarily indicative of the future consolidated financial position and results
of operations or those which would have occurred had the acquisition been
consummated as of the dates reflected in the pro forma statements. In reviewing
the pro forma statements, the reader should consider the following:
1. The historical amounts of Versa/Tek were compiled to conform, as closely as
possible, to the fiscal year of the Company. The historical income statement
for Versa/Tek covers the twelve month period beginning July 1, 1996 through
June 30, 1997 and the historical balance sheet is as of June 30, 1997.
2. The following pro forma financial statements do not reflect any adjustments
for the various synergies or cost reductions the Company expects to achieve
as a result of the acquisition.
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APPLIED POWER INC. AND SUBSIDIARIES
AND VERSA TECHNOLOGIES, INC.
PRO FORMA CONDENSED CONSOLIDATED BALANCE SHEET
Unaudited
AUGUST 31, 1997
(Dollars in Thousands)
Historical Pro forma Pro forma
API VersaTek Adjustments Consolidated
------------- ------------- ------------- --------------
ASSETS
Current Assets
Cash and cash equivalents $ 5,846 $ 1,150 $ 6,996
Accounts receivable 84,697 14,001 98,698
Inventories 115,761 11,876 127,637
Prepaid income tax 11,209 1,200 12,409
Prepaid expenses 8,393 62 8,455
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Total Current Assets 225,906 28,289 254,195
Investment in Versa Technologies, Inc. - - $ 141,473 (a) -
(141,473) (b)
Other Assets 7,305 176 7,481
Goodwill 109,078 8,423 85,862 (b) 203,363
Other Intangibles 30,723 2,582 11,000 (b) 44,305
Property, Plant and Equipment - net 90,580 23,463 2,000 (b) 116,043
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Total Assets $463,592 $62,933 $ 98,862 $625,387
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LIABILITIES AND STOCKHOLDERS' EQUITY
Current Liabilities
Short-term borrowings $ 21,428 $ 21,428
Trade accounts payable 54,555 $ 5,176 59,731
Accrued compensation and benefits 24,736 4,535 29,271
Income taxes payable 7,093 1,301 8,394
Other current liabilities 20,462 87 $ 628 (a)
4,125 (b) 25,302
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Total Current Liabilities 128,274 11,099 4,753 144,126
Long-term Debt 101,663 - 140,845 (a) 242,508
Deferred Income Tax 14,596 2,020 16,616
Other Deferred Liabilities 14,950 3,078 18,028
Shareholders' Equity
Common stock 2,763 61 (61) 2,763
Additional paid-in capital 38,388 18,649 (18,649) 38,388
Retained earnings 166,776 34,523 (34,523) 166,776
Cumulative translation adjustments (3,818) - (3,818)
Treasury shares, at cost - (6,497) 6,497 -
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Total Shareholders' Equity 204,109 46,736 (46,736) (b) 204,109
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Total Liabilities and Shareholders' Equity $463,592 $62,933 $ 98,862 $625,387
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APPLIED POWER INC. AND SUBSIDIARIES AND
VERSA TECHNOLOGIES, INC.
PRO FORMA CONDENSED CONSOLIDATED STATEMENT OF EARNINGS
Unaudited
YEAR ENDED AUGUST 31, 1997
(Amounts in Thousands except per share amounts)
Historical Pro forma Pro forma
API VersaTek Adjustments Consolidated
-------- -------- ----------- ------------
Net sales $672,316 $95,288 $ 5,701 (c) $773,305
Cost of products sold 419,420 69,773 4,597 (c), (d) 493,790
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Gross Profit 252,896 25,515 1,104 279,515
Engineering, selling and administrative expenses 173,200 14,552 755 (c) 188,507
Amortization of intangible assets 6,813 - 3,012 (c), (d) 9,825
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Operating Earnings 72,883 10,963 (2,663) 81,183
Other Expense(Income)
Net financing costs 12,003 (32) 9,507 (c),(d) 21,478
Other - net (1,863) 607 (3) (c) (1,259)
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Earnings Before Income Tax Expense 62,743 10,388 (12,167) 60,964
Income Tax Expense(Benefit) 20,705 4,216 (3,735) (d) 21,186
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Net Earnings $ 42,038 $ 6,172 $ (8,432) $ 39,778
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Earnings Per Share $ 2.92 $ 2.77
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Weighted Average Number of Shares Outstanding 14,377 14,377
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APPLIED POWER INC. AND VERSA TECHNOLOGIES, INC.
NOTES TO PRO FORMA CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
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Unaudited
(Dollars in Thousands)
(a) The following pro forma adjustments reflect the Company's purchase of
Versa/Tek. Pro forma adjustments include estimated direct costs of
acquisition of $628.
Purchase price of outstanding shares $ 140,845
Accrued liabilities 628
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Investment in Versa/Tek $ 141,473
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(b) The following pro forma adjustments are made to reflect estimated fair
value adjustments and to eliminate the investment in Versa/Tek:
Versa/Tek net assets - as reported $ 46,736
Fair value adjustments:
Increase carrying amount of plant and equipment to fair value 2,000
Record additional purchase accounting accruals (4,125)
Record goodwill and other intangibles acquired 96,862
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Investment in Versa/Tek $ 141,473
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(c) The following pro forma adjustments are incorporated in the pro forma
condensed consolidated statement of earnings to reflect a full year of Eder
in Versa/Tek.
1. Add historical operating results of Eder for the four-month period July 1,
1996 to 10/31/96 (date of Versa/Tek's acquisition)
Net Sales $ 6,338
Cost of Products Sold (4,924)
Engineering, Selling and Administrative Expenses (755)
Financing Costs (19)
Other Income 3
2. Eliminate intercompany sales and purchases between Eder and Versa/Tek 637
(637)
3. Incremental interest expense/elimination of interest income relating to the
cash borrowed/used in the acquisition at a rate of 6.5% (333)
4. Increase in depreciation expense resulting from adjustment to carrying amount
of plant and equipment being depreciated over periods of 10 to 30 years (24)
5. Reflect additional amortization of goodwill and other intangibles arising from
the Eder transaction over periods of 3 to 40 years (163)
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$ 123
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(d) The following pro forma adjustments are incorporated in the pro forma
condensed consolidated statement of earnings as a result of the Versa Tek
acquisition.
1. Incremental interest expense on acquisition debt at a rate of 6.5% $(9,155)
2. Increase in depreciation expense resulting from adjustment to carrying amount
of plant and equipment being depreciated over a 7 year life (286)
3. Reflect amortization of increase in goodwill and intangible assets arising
from this transaction over periods of 10 to 40 years. (2,849)
4. Decrease in income taxes (net benefit) applying a 39% effective US and
Wisconsin state income tax rate to the earnings of Versa/Tek, less the effect
of pro forma adjustments in (c) and 1, 2 and 3 above (with the exception of non-
deductible amortization) 3,735
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$(8,555)
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