UNITED STATES
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 August 23, 1997
(Date of earliest event reported)
GENERAL SIGNAL CORPORATION
(exact name of registrant as specified in its charter)
NEW YORK
(State or other jurisdiction of incorporation)
1-996 16-0445660
(Commission File Number) (IRS Employer
Identification
Number)
P.O. Box 10010
HIGH RIDGE PARK, STAMFORD, CONNECTICUT 06904
(Address of principal executive offices) (Zip Code)
(203) 329-4100
(Registrant's telephone number, including area code)
Item 2. Acquisition or Disposition of Assets.
(a) On August 23, 1997, General Signal Corporation (the
"Company"), together with its wholly owned subsidiaries, General
Signal Limited, a Canadian corporation, Aurora/Hydromatic Pumps
Inc., a Delaware corporation and Fairbanks Morse Pump
Corporation, a Kansas corporation (collectively, "Sellers"),
completed the sale to Pentair Pump Group, Inc. ("Buyer"), a
Minnesota corporation and a wholly owned subsidiary of Pentair,
Inc., a Minnesota corporation ("Pentair"), of the General Signal
Pump Group on the terms of a Purchase Agreement dated as of July
18, 1997 by and among Sellers and Pentair, a copy of which is
filed herewith as Exhibit 2.1 and incorporated herein by this
reference. The sales price was approximately $200 million,
subject to final balance sheet adjustments, including payments
under lease agreements relating to certain facilities owned by
Sellers. The consideration paid in the sale was determined
through arms-length negotiations between the Company and Pentair.
(b) Not applicable.
Item 7. Financial Statements and Exhibits.
(a) Not applicable.
(b) The pro forma financial information furnished herein
reflects the disposition of the General Signal Pump Group on the
Company's consolidated financial statements.
Page Number
Unaudited Pro Forma Consolidated Balance
Sheet at June 30, 1997 F-2
Unaudited Pro Forma Consolidated Statement of
Earnings for the Six Month Period Ended June 30, 1997 F-4
Unaudited Pro Forma Consolidated Statement of
Earnings for the Year Ended December 31, 1996 F-5
(c) The exhibits furnished in connection with this Report
are as follows:
Exhibit
Number Description
2.1 Purchase Agreement dated as of July 18, 1997 among
General Signal Corporation, General Signal Limited,
Aurora/Hydromatic Pumps Inc., Fairbanks Morse Pump
Corporation and Pentair, Inc.
99.1 Press Release dated July 21, 1997.
99.2 Press Release dated August 25, 1997.
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.
GENERAL SIGNAL CORPORATION
(Registrant)
Date: September 8, 1997 By: /s/ Raymond L. Arthur
Raymond L. Arthur
Vice President and Controller
GENERAL SIGNAL CORPORATION AND CONSOLIDATED SUBSIDIARIES
Pro Forma Consolidated Financial Data
The following unaudited pro forma consolidated statements of
earnings of General Signal Corporation for the six month period
ended June 30, 1997 and for the year ended December 31, 1996
present the results of the company as if its sale of the General
Signal Pump Group had occurred as of January 1, 1997 and January
1, 1996, respectively. The accompanying unaudited pro forma
consolidated balance sheet as of June 30, 1997 gives effect to
the sale as if it had occurred on June 30, 1997.
The pro forma data do not purport to represent what the company's
financial position or results of operations actually would have
been had the sale in fact occurred on the dates indicated, or to
project the company's financial position or results of operations
for any future date or period. The pro forma adjustments are
based on available information and certain assumptions that the
company currently believes are reasonable in the circumstances.
Further, the pro forma adjustments related to the pro forma
consolidated statements of earnings do not give effect to any
nonrecurring/unusual restructuring charges resulting from the
sale. The unaudited pro forma condensed consolidated financial
information should be read in conjunction with the accompanying
notes thereto, the separate historical financial statements of
the company as of and for the six month period ended June 30,
1997 which are contained in the company's quarterly report on
Form 10-Q filed for the second quarter and six month period ended
June 30, 1997, and the separate historical financial statements
of the company as of and for the year ended December 31, 1996
which are contained in the company's annual report on Form 10-K
for the year ended December 31, 1996.
The pro forma adjustments and the pro forma amounts are provided
for informational purposes only, and the company's financial
statements will reflect the effects of the sale from August 23,
1997, the effective date of such sale.
GENERAL SIGNAL CORPORATION AND CONSOLIDATED SUBSIDIARIES
Pro Forma Consolidated Balance Sheet
(In millions)
(Unaudited)
June 30, 1997
Pro Forma As
Historical Adjustments Adjusted
Assets
Current assets:
Cash and cash equivalents $ 24.3 $ 58.2 (a) $ 82.5
Accounts receivable, net 362.4 (37.1) (b) 325.3
Inventories, net 242.6 (29.0) (c) 213.6
Prepaid expenses and other
current assets 22.4 0.9 (d) 23.3
Deferred income taxes 51.6 2.1 (e) 53.7
-------- --------
Total current assets 703.3 698.4
-------- --------
Property, plant and equipment, net of
accumulated depreciation and
amortization 305.8 (31.7) (f) 274.1
Intangibles, net of accumulated
amortization 366.5 (64.7) (g) 301.8
Other assets 174.3 14.4 (h) 188.7
-------- --------
Total assets $1,549.9 $ 1,463.0
========= ==========
Liabilities and Shareholders' equity
Current liabilities:
Short-term borrowings and current
maturities of long-term debt $ 9.1 $ 9.1
Accounts payable 180.9 (15.3) (i) 165.6
Accrued expenses 193.3 7.3 (j) 200.6
Income taxes 28.0 51.6 (k) 79.6
-------- -------
Total current liabilities 411.3 454.9
-------- -------
Long-term debt, less current
maturities 243.2 (140.1) (l) 103.1
Accrued post-retirement and post-
employment obligations 128.1 (2.6) (m) 125.5
Deferred income taxes 28.1 (1.2) (n) 26.9
Other liabilities 16.8 (1.9) (o) 14.9
-------- --------
Total long-term liabilities 416.2 270.4
-------- --------
Shareholders' equity:
Common stock 78.4 78.4
Additional paid-in capital 360.8 360.8
Retained earnings 700.2 15.3 (p) 715.5
Cumulative translation adjustments (5.5) (5.5)
Common stock in treasury (411.5) (411.5)
--------- ---------
Total shareholders' equity 722.4 737.7
--------- ---------
Total liabilities and shareholders'
equity $1,549.9 $1,463.0
========= ==========
See accompanying notes to the June 30, 1997 unaudited pro forma consolidated
balance sheet.
Notes to the June 30, 1997 Unaudited Pro Forma Consolidated
Balance Sheet
The following are explanations of the adjustments reflected on
the unaudited pro forma consolidated balance sheet (dollars in millions):
(a) Amount of cash proceeds set aside to pay income taxes,
severance costs and related transaction costs.
(b) Reflects pro forma adjustment to record sale of accounts
receivable.
(c) Reflects pro forma adjustment to record sale of inventory.
(d) Reflects pro forma adjustments to record sale of prepaid
expenses ($0.2) and to record current portion of lease receivable
related to the land and building ($1.1).
(e) Reflects pro forma adjustments to record deferred tax assets
for reserves established at date of sale ($3.6) and to transfer
recorded deferred tax assets to income taxes payable ($1.5).
(f) Reflects pro forma adjustments of property, plant and
equipment sold ($20.7), record the buildings and land as a
capital lease ($9.3) and write off impaired retained assets
($1.7).
(g) Reflects pro forma adjustment to record sale of intangibles.
(h) Reflects pro forma adjustments to record sale of other
assets ($0.3), write off deferred professional fees ($0.9) and to
record long term lease receivable on the lease of the land and
buildings ($15.6).
(i) Reflects pro forma adjustments to record the assumption of
accounts payable by the Buyer.
(j) Reflects pro forma adjustments to record the assumption of
accrued expenses by the Buyer ($8.3), and to set up accruals for
severance, transaction costs and other contingencies ($15.6).
(k) Reflects pro forma adjustments to record income tax payable
on the gain ($49.9) and to transfer recorded deferred tax assets
and liabilities to income taxes payable ($1.7).
(l) Reflects pro forma adjustments to record retirement of long-
term debt with net proceeds ($140.0) and to record the assumption
of long term debt by the Buyer ($0.1). On June 19, 1997, the
Board of Directors approved a stock buy-back program of up to
$150.0 subject to the consummation of the General Signal Pump
business divestiture which is not reflected in the accompanying
pro forma consolidated balance sheet.
(m) Reflects pro forma adjustment to record curtailment gain on
other post employment benefits.
(n) Reflects pro forma adjustments to record deferred tax
liability on land and building lease ($2.0) and to transfer
recorded deferred tax liability to income taxes payable ($3.2).
(o) Reflects pro forma adjustment to record curtailment gain on
pension plan.
(p) Reflects pro forma adjustment to record after tax gain on
sale of business.
GENERAL SIGNAL CORPORATION AND CONSOLIDATED SUBSIDIARIES
Pro Forma Consolidated Statement of Earnings
For the Six Month Period Ended June 30, 1997
(In millions, except per share data)
(Unaudited)
June 30, 1997
Pro Forma As
Historical Adjustments Adjusted
Net sales $1,045.2 $(104.3) (a) $ 940.9
--------- --------
Cost of sales 733.2 (83.1) (a) 650.1
Selling, general and administrative
expenses 206.1 (12.4) (a) 193.7
-------- -------
939.3 843.8
------- -------
Operating earnings 105.9 97.1
Interest expense, net 8.0 (4.3) (b) 3.7
------- -------
Earnings before income taxes 97.9 93.4
Income taxes 39.2 (1.8) (c) 37.4
------- -------
Net earnings $58.7 $56.0
======== =======
Net earnings per share $1.15 $1.09
======== =======
Average shares outstanding 51.2 51.2
======== =======
Notes to the June 30, 1997 Unaudited Pro Forma Consolidated Statement of
Earnings
The following are explanations of the adjustments reflected on the unaudited
pro forma consolidated statement of earnings:
(a) Reflects pro forma adjustment to remove results of operations of the
General Signal Pump Group for the six months ended June 30, 1997. These
amounts exclude $1.4 of corporate allocations for services incurred on
behalf of the General Signal Pump Group during the period which may not be
incurred in the future.
(b) Reflects pro forma adjustments to record lower interest expense from
the retirement of long-term debt ($3.9) and interest income on the capital
lease for the land and buildings ($0.4). On June 19, 1997, the Board of
Directors approved a stock buy-back program of up to $150.0 subject to the
consummation of the General Signal Pump business divestiture, which is not
reflected in the accompanying pro forma consolidated statement of earnings.
(c) Reflects pro forma adjustment to record the income tax effect of the
pro forma adjustments described in (a) and (b) above.
GENERAL SIGNAL CORPORATION AND CONSOLIDATED SUBSIDIARIES
Pro Forma Consolidated Statement of Earnings
For the year ended December 31, 1996
(In millions, except per share data)
(Unaudited)
December 31, 1996
Pro Forma As
Historical Adjustments Adjusted
Net sales $2,065.0 $(200.7) (a) $1,864.3
-------- ---------
Cost of sales 1,435.7 (153.4) (a) 1,282.3
Selling, general and administrative
expenses 406.2 (26.4) (a) 379.8
Gain on disposition (20.8) (20.8)
-------- ---------
1,821.1 1,641.3
-------- ---------
Operating earnings 243.9 223.0
Interest expense, net 21.5 (8.5) (b) 13.0
-------- ---------
Earnings before income taxes 222.4 210.0
Income taxes 89.0 (5.0) (c) 84.0
-------- ---------
Net earnings $133.4 $126.0
======== =========
Net earnings per share $2.68 $2.54
======== =========
Average shares outstanding 49.7 49.7
======== ===========
Notes to the December 31, 1996 Unaudited Pro Forma Consolidated Statement
of Earnings
The following are explanations of the adjustments reflected on the unaudited
pro forma consolidated statement of earnings:
(a) Reflects pro forma adjustment to remove results of operations of the
General Signal Pump Group for the year ended December 31, 1996. These
amounts exclude $2.3 of corporate allocations for services incurred on
behalf of the General Signal Pump Group during the period which may not be
incurred in the future.
(b) Reflects pro forma adjustments to record lower interest expense from
the retirement of long-term debt ($7.6) and interest income on the capital
lease for the land and buildings ($0.9). On June 19, 1997, the Board of
Directors approved a stock buy-back program of up to $150.0 subject to the
consummation of the General Signal Pump business divestiture, which is not
reflected in the accompanying pro forma consolidated statement of earnings.
(c) Reflects pro forma adjustment to record the income tax effect of the
pro forma adjustments described in (a) and (b) above.