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): June 5, 1998 APPLIED POWER INC. ----------------- (Exact name of Registrant as specified in its charter) WISCONSIN 1-11288 39-0168610 --------- ------- ---------- (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 ------------------------------------------------------------ (Address of principal executive offices) (Zip Code) (414) 781-6600 -------------- (Registrant's telephone number, including area code) 1 The undersigned registrant hereby amends Item 7 including the financial statements, exhibits or other portions of financial information filed for VERO Group plc ("VERO") on Form 8-K dated as of June 5, 1998 (the "VERO 8-K"). The financial statements and related footnotes as previously filed in the VERO 8-K have been amended to reflect that the financial data presented for VERO's fiscal year ended December 31, 1996 is not covered by the audit opinion of Ernst & Young for the year ended December 31, 1997 filed as part of the VERO 8-K. As such, the 1996 financial data has been marked as "unaudited." Additionally, footnote number 23 has been added to reconcile certain information presented under generally accepted accounting principles in the United Kingdom to generally accepted accounting principles in the United States. The related updated accountants' consent as Exhibit 23 is also being filed. SIGNATURE Pursuant to the requirement 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. June 30, 1998 By: /s/ Robert C. Arzbaecher ------------------------------------- Robert C. Arzbaecher Vice President and Chief Financial Officer ITEM 7. FINANCIAL STATEMENTS AND EXHIBITS - - ------------------------------------------- (a) Financial Statements of Businesses Acquired: The following financial statements of VERO prepared in accordance with generally accepted accounting principles in the United Kingdom are included herein from pages 17 through 35 of VERO's 1997 Annual Report which is filed herewith as Exhibit 99.1. These financial statements are not the statutory accounts of VERO. The statutory accounts for the years ended December 31, 1997 and 1996 have been delivered to the Registrar of Companies for England and Wales and the auditors' reports thereon were unqualified: Report of Independent Auditors Consolidated Profit and Loss Account for the years ended December 31, 1997 and 1996 Consolidated Balance Sheet as of December 31, 1997 and 1996 Consolidated Cash Flow Statement for the years ended December 31, 1997 and 1996 Consolidated Statement of Total Recognized Gains and Losses for the years ended December 31, 1997 and 1996 Reconciliation of Movements in Consolidated Shareholders' Fund for the years ended December 31, 1997 and 1996 Company Balance Sheet as of December 31, 1997 and 1996 Accounting Policies Notes to the Accounts (b) Pro Forma Financial Information: The following unaudited pro forma condensed consolidated financial statements of Applied Power Inc. and subsidiaries, reflecting the acquisition of VERO, are filed herewith: Introduction to Pro Forma Condensed Consolidated Financial Statements of Applied Power Inc. and VERO Group plc Applied Power Inc. and VERO Group plc Pro Forma Condensed Consolidated Balance Sheet as of February 28, 1998 and the related Pro Forma Condensed Consolidated Statement of Earnings for the six months then ended (unaudited) Pro Forma Condensed Consolidated Statement of Earnings for the year ended August 31, 1997 (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. 5 APPLIED POWER INC. AND VERO GROUP PLC INTRODUCTION TO PRO FORMA CONDENSED CONSOLIDATED FINANCIAL STATEMENTS --------------------------------------------------------------------- Unaudited As described under Item 2 of this report, Applied Power Inc. (the "Company" or "API"), through Applied Power Limited, a wholly owned subsidiary, acquired by means of a tender offer and market purchases of shares over 90% of the outstanding shares of common stock of VERO Group plc ("VERO") at a price of 192 pence per share in cash. The following unaudited pro forma condensed consolidated balance sheet and statements of earnings (the "pro forma statements") give effect to the acquisition of VERO 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 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 unaudited condensed consolidated interim financial information contained in the Company's Quarterly Report on Form 10-Q for the quarter ended February 28, 1998 and the audited financial statements and notes thereto of VERO for the year ended December 31, 1997, included as Item 7(a) of this report, and VERO's unaudited interim results for the six months ended June 30, 1997. VERO's reporting currency is the United Kingdom pound sterling and its financial information in the accompanying pro forma combined financial statements has been translated to the U.S. dollar in accordance with Statement of Financial Accounting Standards No. 52, "Foreign Currency Translation." VERO's historic financial statements are prepared in accordance with generally accepted accounting principles in the United Kingdom ("UK GAAP"), however, VERO's financial information in the accompanying pro forma combined financial statements has been adjusted to confirm with generally accepted accounting principles in the United States ("US GAAP"). The only material adjustment required to conform with US GAAP related to goodwill. Under UK GAAP purchased goodwill may be written off on acquisition directly against reserves. Under US GAAP goodwill is capitalized and amortized by charges against income over the period during which it is estimated it will be of benefit subject to a maximum of 40 years. Accordingly, goodwill, net of amortization, was recorded in the pro forma combined balance sheet at February 28, 1998 and the related amortization expense included in the pro forma combined statements of earnings for the six months ended February 28, 1998 and the twelve months ended August 31, 1997. 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 operation 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 VERO were compiled to conform, as closely as possible, to the fiscal year of the Company. The historical income statement for VERO covers the twelve month period beginning January 1 through December 31. For pro forma purposes, the VERO income statement has been adjusted to cover the twelve month period beginning July 1, 1996 through 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. 6 APPLIED POWER INC. AND VERO GROUP PLC UNAUDITED PRO FORMA COMBINED STATEMENT OF EARNINGS
API VERSA/TEK ZERO VERO SIX MONTHS SEPTEMBER 1, SIX MONTHS SIX MONTHS ENDED TO ENDED SUB-TOTAL ENDED TOTAL FEBRUARY 28, OCTOBER 6, DECEMBER 31, PRO FORMA DECEMBER 31, PRO FORMA 1998(1) 1997(1) 1997(1) ADJUSTMENTS COMBINED 1997(1) ADJUSTMENTS COMBINED ------------ ------------ ------------ ----------- --------- ------------ ----------- --------- (IN THOUSANDS, EXCEPT PER SHARE AMOUNTS) Net Sales.............. $425,834 $9,330 $131,375 $566,539 $83,927 $650,466 Cost of products sold.. 276,677 6,637 87,731 24 (4) 371 069 58,204 429,273 -------- ------ -------- ------ -------- ------- -------- Gross profit.......... 149,157 2,693 43,644 (24) 195,470 25,723 221,193 Engineering, selling and administrative expenses.............. 97,594 1,302 25,570 (706)(3) 123,760 17,987 141,747 Amortization of intangible assets..... 5,201 -- -- 706 (3) 6,144 236 1,692 (5) 8,072 237 (4) -------- ------ -------- ------ -------- ------- ------- -------- Operating earnings.... 46,362 1,391 18,074 (261) 65,566 7,500 (1,692) 71,374 Other Expenses (Income): Net financing costs... 9,470 (11) 1,964 763 (4) 12,186 201 6,493 (5) 18,880 Other--net............ (195) 100 (2,232)(10) (2,327) -- (2,327) -------- ------ -------- ------ -------- ------- ------- -------- Net Earnings from Continuing Operations Before Income Tax Expense............... 37,087 1,302 18,342 (1,024) 55,707 7,299 (8,185) 54,821 Income Tax Expense(11). 12,981 -- 6,636 (201)(4) 19,416 2,541 (2,155)(5) 19,802 -------- ------ -------- ------ -------- ------- ------- -------- Net Earnings from Continuing Operations. $ 24,106 $1,302 $ 11,706 (10) $ (823) $ 36,291 $ 4,758 $(6,030) $ 35,019 ======== ====== ======== ====== ======== ======= ======= ======== Net earnings from continuing operations per common and equivalent share: Basic................. $ 0.87 $ 0.95 (10) $ 0.95 $ 0.92 Diluted............... $ 0.82 $ 0.93 (10) $ 0.90 $ 0.87 Common and equivalent shares used in computing per share amounts: Basic................. 27,728 12,344 (1,852)(2) 38,220 38,220 Diluted............... 29,371 12,649 (1,897)(2) 40,123 40,123
See Notes to Unaudited Pro Forma Combined Financial Statements 7 APPLIED POWER INC. AND VERO GROUP PLC UNAUDITED PRO FORMA COMBINED STATEMENT OF EARNINGS
EVEREST VERSA/TEK ZERO VERO API SEPTEMBER 1, YEAR YEAR YEAR YEAR ENDED TO ENDED ENDED SUB-TOTAL ENDED TOTAL AUGUST 31, SEPTEMBER 26, JUNE 30, JUNE 30, ADJUST- PRO FORMA JUNE 30, ADJUST- PRO FORMA 1997 (1) 1996 (1) 1997 (1) 1997 (1) MENTS COMBINED 1997 (1) MENTS COMBINED ---------- ------------- --------- -------- -------- ---------- -------- -------- ---------- (IN THOUSANDS, EXCEPT PER SHARE AMOUNTS) Net Sales........... $672,316 $3,496 $95,288 $235,330 $ 5,701 (7) $1,012,131 $163,270 $1,175,401 Cost of products sold............... 419,420 2,663 69,773 158,195 20 (6) 654,668 106,492 761,160 4,597 (7) -------- ------ ------- -------- -------- ---------- -------- ---------- Gross profit....... 252,896 833 25,515 77,135 1,084 357,463 56,778 414,241 Engineering, selling and administrative expenses........... 173,200 304 14,552 46,377 (1,194)(3) 233,994 37,233 271,227 Amortization of 755 (7) intangible assets.. 6,813 125 -- -- 1,194 (3) 11,289 473 3,384 (8) 15,146 145 (6) 3,012 (7) -------- ------ ------- -------- -------- ---------- -------- -------- ---------- Operating earnings. 72,883 404 10,963 30,758 (2,828) 112,180 19,072 (3,384) 127,868 Other Expenses (Income): Net financing costs............. 12,003 (23) (32) 4,095 282 (6) 25,832 653 12,986 (8) 39,471 9,507 (7) Other--net......... (1,863) (47) 607 (1,393) (3)(7) (2,699) -- (2,699) -------- ------ ------- -------- -------- ---------- -------- -------- ---------- Net Earnings from Continuing Operations Before Income Tax Expense. 62,743 474 10,388 28,056 (12,614) 89,047 18,419 (16,370) 91,096 Income Tax Expense (11)....... 20,705 -- 4,216 11,165 62 (6) 32,413 6,649 (4,464)(8) 34,598 (3,735)(7) -------- ------ ------- -------- -------- ---------- -------- -------- ---------- Net Earnings from Continuing Operations......... $ 42,038 $ 474 $ 6,172 $ 16,891 $ (8,941) $ 56,634 $ 11,770 $(11,906) $ 56,498 ======== ====== ======= ======== ======== ========== ======== ======== ========== Net earnings from continuing operations per common and equivalent share: Basic.............. $ 1.53 $ 1.38 $ 1.49 $ 1.49 Diluted............ $ 1.46 $ 1.36 $ 1.44 $ 1.44 Common and equivalent shares used in computing per share amounts: Basic.............. 27,530 12,213 (1,832)(2) 37,911 37,911 Diluted............ 28,754 12,450 (1,868)(2) 39,337 39,336
See Notes to Unaudited Pro Forma Combined Financial Statements 8 APPLIED POWER INC. AND VERO GROUP PLC UNAUDITED PRO FORMA COMBINED BALANCE SHEET
API ZERO SUB-TOTAL VERO TOTAL FEBRUARY 28, DECEMBER 31, PRO FORMA DECEMBER 31, PRO FORMA ASSETS 1998 (1) 1997 (1) ADJUSTMENTS COMBINED 1997 (1) ADJUSTMENTS COMBINED ------ ------------ ------------ ----------- --------- ------------ ----------- ---------- (IN THOUSANDS, EXCEPT SHARE AMOUNTS) Current Assets Cash and cash equivalents........... $ 7,010 $ 22,051 $ 29,061 $ 6,756 $ 35,817 Short-term investments........... -- 4,918 4,918 -- 4,918 Accounts receivable, net................... 76,908 37,537 114,445 27,851 142,296 Inventories............ 130,190 34,137 164,327 22,765 187,092 Prepaid income tax..... 12,453 -- 12,453 -- 12,453 Prepaid expenses....... 11,116 3,736 14,852 2,020 16,872 --------- -------- --------- -------- ---------- Total Current Assets. 237,677 102,379 340,056 59,392 399,448 Investment in VERO Group, PLV............. -- -- -- -- 192,384 (9a) -- (192,384)(9b) Other Assets............ 10,397 17,259 (2,718)(3) 24,938 1,359 26,297 Goodwill................ 260,361 37,391 297,752 17,010 135,367 (9b) 450,129 Other Intangibles....... 46,688 -- 2,718 (3) 49,406 -- 49,406 Property, Plant and Equipment.............. 257,259 106,776 364,035 37,154 401,189 Less: Accumulated depreciation.......... (133,019) (57,444) (190,463) (8,892) (199,355) --------- -------- --------- -------- ---------- Net Property, Plant and Equipment.............. 124,240 49,332 173,572 28,262 201,834 --------- -------- ------- --------- -------- --------- ---------- Total Assets......... $ 679,363 $206,361 $ -- $ 885,724 $106,023 $ 135,367 $1,127,114 ========= ======== ======= ========= ======== ========= ========== LIABILITIES AND SHAREHOLDERS' EQUITY - - ------------------------------------ Current Liabilities Short-term borrowings.. $ 15,585 $ -- $ 15,585 $ 842 $ 16,427 Trade accounts payable............... 62,335 7,827 70,162 14,993 85,155 Accrued compensation and benefits.......... 28,207 7,246 35,453 -- 35,453 Income taxes payable... 4,118 573 4,691 4,757 9,448 Other current liabilities........... 24,975 8,420 33,395 17,747 51,142 --------- -------- --------- -------- ---------- Total Current Liabilities......... 135,220 24,066 159,286 38,339 197,625 Long-term Debt.......... 272,262 51,573 323,835 10,251 192,384 (9a) 526,470 Deferred Income Tax..... 16,913 -- 16,913 416 17,329 Other Deferred Liabilities............ 27,241 13,084 40,325 -- 40,325 Shareholders' Equity Common stock (API: 27,836,656 shares; ZERO 12,391,197 shares; and 38,369,173 shares on a pro forma combined basis)................ 5,567 166 -- 5,733 4,964 (4,964) 5,733 Additional paid-in capital............... 38,538 39,289 -- 77,827 30,094 (30,094) 77,827 Retained earnings...... 190,049 151,899 -- 341,948 23,578 (21,959) 343,567 Cumulative translation adjustments........... (6,427) 100 (6,327) (1,619) (7,946) Treasury stock......... -- (73,816) (73,816) -- (73,816) --------- -------- --------- --------- -------- -------- ---------- Total Shareholders' Equity.............. 227,727 117,638 345,365 57,017 (57,017)(9b) 345,365 --------- -------- --------- --------- -------- -------- ---------- Total Liabilities and Shareholders' Equity.............. $ 679,363 $206,361 $ -- $ 885,724 $106,023 $135,367 $1,127,114 ========= ======== ========= ========= ======== ======== ==========
See Notes to Unaudited Pro Forma Combined Financial Statements 9 APPLIED POWER INC. AND VERO GROUP PLC NOTES TO UNAUDITED PRO FORMA COMBINED FINANCIAL STATEMENTS NOTE 1--PERIODS COMBINED The Company's consolidated statements of earnings for the six months ended February 28, 1998 (unaudited) and for the fiscal year ended August 31, 1997, have been combined with the VERO consolidated statements of income for the six months ended December 31, 1997 and for the twelve months ended June 30, 1997 (both unaudited) respectively. The Company's February 28, 1998 unaudited consolidated balance sheet has been combined with VERO's December 31, 1997 audited consolidated balance sheet. On April 6, 1998, the Company and ZERO Corporation ("ZERO") jointly announced that they had entered a definitive strategic merger agreement in which a newly created subsidiary of the Company will be merged into ZERO. Under the terms of the merger, ZERO stockholders will receive .85 shares of the Company's common stock for each share of ZERO common stock. Approved by the boards of directors of both companies, consummation of the Merger is subject to approval by the stockholders of both companies and satisfaction of certain other conditions. The Merger would be accounted for as a pooling of interests and is expected to be completed in July 1998. The unaudited pro forma combined financial data for the six months ended February 28, 1998 includes the operating results of Versa Technologies, Inc. ("Versa/Tek"), which was acquired by the Company on October 6, 1997, for the period from September 1 to October 6, 1997 and the operating results of ZERO for the six months ended December 31, 1997. The unaudited pro forma combined financial data for the year ended August 31, 1997 includes the operating results of Everest Electronics Equipment, Inc. ("Everest"), which was acquired by the Company on September 26, 1996, for the period from September 1 to September 26, 1996, and the operating results of Versa/Tek and ZERO for their respective twelve months ended June 30, 1997. The operating results of Versa/Tek and Everest subsequent to their acquisition dates, are included in the Company's historic results (presented in the first column of the accompanying combined financial statements) for the six months ended February 28, 1998 and the year ended August 31, 1997. VERO's reporting currency is the pound sterling and its financial information in the accompanying pro forma combined financial statements has been translated to the U.S. dollar in accordance with Statement of Financial Accounting Standards No. 52, "Foreign Currency Translation." VERO's historic financial statements are prepared in accordance with generally accepted accounting principles in the United Kingdom ("UK GAAP"), however, VERO's financial information in the accompanying pro forma combined financial statements has been adjusted to conform with generally accepted accounting principles in the United States ("US GAAP"). The only material adjustment required to conform with US GAAP related to goodwill. Under UK GAAP purchased goodwill may be written off on acquisition directly against reserves. Under US GAAP goodwill is capitalized and amortized by charges against income over the period during which it is estimated it will be of benefit subject to a maximum of 40 years. Accordingly, goodwill, net of amortization, was recorded in the pro forma combined balance sheet at February 28, 1998 and the related amortization expense included in the pro forma combined statements of earnings for the six months ended February 28, 1998 and the twelve months ended August 31, 1997. 10 NOTE 2--PRO FORMA NET EARNINGS PER SHARE The unaudited pro forma combined net earnings per common share and per common and equivalent share is based upon the weighted average number of common and equivalent shares of API and ZERO outstanding for each period at the Exchange Ratio of 0.85 shares of API Common Stock for each share of ZERO Common Stock. NOTE 3--RECLASSIFICATIONS (ZERO) Certain reclassifications, none of which affect income from continuing operations, have been made to the ZERO statements of income in the pro forma combined statements of earnings to conform classifications of "Amortization of intangible assets" and to ZERO's balance sheet in the pro forma combined balance sheet to conform classifications of "Other intangibles." NOTE 4--PRO FORMA ADJUSTMENTS (VERSA/TEK) The following pro forma adjustments are incorporated in the pro forma condensed consolidated statement of earnings for the six months ended February 28, 1998 as a result of the Versa/Tek acquisition. 1. Incremental interest expense on acquisition debt at a rate of 6.5%................................................... $ (763) 2. Increase in depreciation expense resulting from adjustment to carrying amount of plant and equipment being depreciated over a 7 year life............................ (24) 3. Reflect amortization of increase in goodwill and intangible assets arising from this transaction, over periods of 10 to 30 years................................. (237) 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 1, 2 and 3 above (with the exception of non- deductible amortization).................................. 201 -------- $ (823) ========
NOTE 5--PRO FORMA ADJUSTMENTS (VERO) The following pro forma adjustments are incorporated in the pro forma condensed consolidated statement of earnings for the six months ended February 28, 1998 as a result of the VERO acquisition. 1. Incremental interest expense on acquisition debt at a rate of 6.75%........................................................ $(6,493) 2. Reflect amortization of goodwill arising from this transaction, over a 40 year life............................. (1,692) 3. Decrease in income taxes (net benefit) applying a 37% effective income tax rate to the earnings of VERO, less the effect of pro forma adjustments in 1 and 2 above (with the exception of non-deductible amortization).................... 2,155 ------- $(6,030) =======
NOTE 6--PRO FORMA ADJUSTMENTS (EVEREST) The following pro forma adjustments are incorporated in the pro forma condensed consolidated statement of earnings for the year ended August 31, 1997 as a result of the Everest acquisition. 1. Incremental interest expense on acquisition debt at a rate of 6.5%......................................................... $ (282) 2. Increase in depreciation expense resulting from adjustment to carrying amount of plant and equipment being depreciated over a 7 year life................................................ (20) 3. Reflect amortization of goodwill arising from this transaction, over a 25 year life............................. (145) 4. Increase in income taxes applying a 41% effective U.S. and California state income tax rate to the earnings of Everest, less the effect of pro forma adjustments in 1, 2 and 3 above. (62) ------- $ (509) =======
11 NOTE 7--PRO FORMA ADJUSTMENTS (VERSA/TEK) The following pro forma adjustments are incorporated in the pro forma condensed consolidated statement of earnings for the year ended August 31, 1997 to reflect a full year of Eder Industries in Versa/Tek (Eder was acquired by Versa/Tek on October 31, 1996). 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) -------- $ 123 ========
The following pro forma adjustments are incorporated in the pro forma condensed consolidated statement of earnings for the year ended August 31, 1997 as a result of the Versa Tek acquisition. 6. Incremental interest expense on acquisition debt at a rate of 6.5%............................................. $ (9,155) 7. Increase in depreciation expense resulting from adjustment to carrying amount of plant and equipment being depreciated over a 7 year life..................... (286) 8. Reflect amortization of increase in goodwill and intangible assets arising from this transaction over periods of 10 to 40 years................................ (2,849) 9. 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 1 through 8 above (with the exception of non-deductible amortization)............................. 3,735 --------- $ (8,555) =========
NOTE 8--PRO FORMA ADJUSTMENTS (VERO) The following pro forma adjustments are incorporated in the pro forma condensed consolidated statement of earnings for API's year ended August 31, 1997 as a result of the VERO acquisition. 1. Incremental interest expense on acquisition debt at a rate of 6.75%.................................................. $(12,986) 2. Reflect amortization of goodwill arising from this transaction, over a 40 year life.......................... (3,384) 3. Decrease in income taxes (net benefit) applying a 37% effective income tax rate to the earnings of VERO, less the effect of pro forma adjustments 1 and 2 above (with the exception of non-deductible amortization)............. 4,464 --------- $(11,906) =========
12 NOTE 9--PRO FORMA ADJUSTMENTS (VERO) (a) The following pro forma adjustments are incorporated in the pro forma combined balance sheet at February 28, 1998 as a result of the VERO acquisition. Purchase price of outstanding shares.......................... $192,384
(b) The following pro forma adjustments are made to reflect estimated fair value adjustments and to eliminate the investment in VERO: VERO net assets--as reported.................................. $ 57,017 Fair value adjustments: Record goodwill acquired.................................... 135,367 --------- Investment in VERO........................................ $192,384 =========
Because of the proximity of the transaction, API has not had adequate time to complete its evaluation of the fair value of the net assets acquired in the VERO transaction. As a result, no fair value adjustments have been reflected in these pro forma statements. NOTE 10--SPECIAL ITEM (ZERO) Other Income--net for the six months ended December 31, 1997 includes life insurance proceeds of $1,709 ($0.14 per share). NOTE 11--INCOME TAX EXPENSE Effective tax rates are higher than the statutory federal income tax rates primarily due to state income taxes, net of federal benefit. 13 APPLIED POWER INC. EXHIBIT INDEX TO FORM 8-K CURRENT REPORT Date of Report: June 5, 1998
Exhibit Filed Number Description Herewith - - ------ ----------- -------- 4.1 Multicurrency Credit Agreement X dated as of June 18, 1998, among Applied Power Inc. and Enerpac B.V., as Borrowers, various financial institutions from time to time party thereto, as Lenders, The First National Bank of Chicago, as Syndication Agent, Societe Generale, as Documentation Agent, and Bank of America National Trust and Savings Association, as Administrative Agent, arranged by BancAmerica Robertson Stephens 23 Consent of Ernst & Young X 99.1 Consolidated balance sheet of VERO X Group plc and subsidiaries as of December 31, 1997 and 1996 and related consolidated profit and loss account and cash flow for each of the two years in the period ended December 31, 1997, and the notes thereto and auditors' report thereon, included herein in Item 7(a) of this report
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