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UNITED STATES 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):
February 12, 2002 (December 3, 2001)
MATTHEWS INTERNATIONAL CORPORATION
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(Exact name of registrant as specified in its charter)
Pennsylvania 0-9115 and 0-24494 25-0644320
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(State or other jurisdiction (Commission (IRS Employer
of incorporation) File Numbers) Identification No.)
Two NorthShore Center, Pittsburgh, PA 15212-5851
- ---------------------------------------- ----------
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code: (412) 442-8200
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INFORMATION TO BE INCLUDED IN THE REPORT
This Current Report on Form 8-K/A is being filed pursuant to Item 7(b)(2) of
Form 8-K to include the pro forma financial information in connection with the
Registrant's Current Report on Form 8-K filed on December 17, 2001.
Item 7. Financial Statements, Pro Forma Financial Information and Exhibits
(b) Pro Forma Financial Information
The following unaudited pro forma financial statements are filed herewith as
required pursuant to this Item and the requirements of the Securities Exchange
Act of 1934:
Pro forma condensed consolidated balance
sheet at September 30, 2001 Appendix A
Pro forma condensed consolidated statement of
income for the year ended September 30, 2001 Appendix B
The unaudited pro forma condensed consolidated balance sheet at September 30,
2001 reflects the financial position of Matthews International Corporation
("Matthews") after giving effect to the acquisition of The York Group, Inc.
("York") and assumes the acquisition occurred on September 30, 2001. The
unaudited pro forma condensed consolidated statement of income for the year
ended September 30, 2001 assumes that the acquisition of York occurred on
October 1, 2000, and is based on the operations of Matthews for the year ended
September 30, 2001.
Matthews has accounted for this acquisition using the purchase method and,
accordingly, recorded the acquired assets and liabilities at their estimated
fair values at the closing date. The purchase price allocations are
preliminary. Final allocations will be made based upon valuations and other
studies that have not yet been completed.
The unaudited pro forma condensed consolidated financial statements presented
herein are provided for illustrative purposes only and include certain
adjustments, such as interest expense on acquisition debt. The pro forma
adjustments presented are based on available information and include certain
assumptions and adjustments that are considered reasonable under the
circumstances. These adjustments are directly attributable to the transaction
referenced above and are expected to have a continuing impact on the
Registrant's results of operations and financial condition. No assumptions
were made regarding restructuring or recurring synergies that may occur as a
result of the acquisition.
The pro forma information does not purport to be indicative of the financial
position or results of operations of the Registrant that would have actually
occurred had the transaction been in effect as of the date or for the periods
presented. The unaudited pro forma condensed consolidated financial
statements should be read in conjunction with the historical financial
statements and related notes of the Registrant.
The condensed consolidated balance sheet of Matthews as of September 30, 2001
and the condensed consolidated statement of income for the year ended
September 30, 2001 were derived from the audited consolidated financial
statements included in the Company's Annual Report on Form 10-K for the year
ended September 30, 2001.
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The condensed balance sheet of York as of September 30, 2001 was derived from
the financial statements included in York's Quarterly Report on Form 10-Q for
the period ended September 30, 2001. The condensed statement of income for
the twelve-month period October 1, 2000 to September 30, 2001 was derived from
the financial statements included in York's Annual Report on Form 10-K for the
year ended December 31, 2000 and its Quarterly Report on Form 10-Q for the
nine months ended September 30, 2001. The condensed statement of income of
York for the twelve months ended September 30, 2001 includes the results of
the commemorative products business for the period October 1, 2000 up to the
date of acquisition by Matthews (May 24, 2001). These results were reported
under discontinued operations in York's Quarterly Report on Form 10-Q for the
period ended September 30, 2001. In addition, the condensed statement of
income of York for the twelve months ended September 30, 2001 excludes the
operating results of the vault manufacturing business and certain distribution
operations, which were sold by York prior to the acquisition date.
(c) Exhibits
None
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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.
MATTHEWS INTERNATIONAL CORPORATION
(Registrant)
By Edward J. Boyle
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Edward J. Boyle
Chief Financial Officer,
Secretary and Treasurer
Date: February 12, 2002
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APPENDIX A
PRO FORMA CONDENSED CONSOLIDATED BALANCE SHEET (UNAUDITED)
SEPTEMBER 30, 2001
(in thousands)
Historical
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The York Pro Forma Pro Forma
Matthews Group, Inc.(G) Adjustments Consolidated
-------- ---------- -------- --------
ASSETS
Current assets:
Cash and cash equivalents $ 28,691 $ 25,561 $ (8,510) A,B $ 45,742
Short-term investments 240 - - 240
Accounts receivable 52,086 19,697 - 71,783
Inventories 18,773 6,952 - 25,725
Assets held for sale - 2,503 - 2,503
Other current assets 2,538 7,818 - 10,356
------- ------- ------- -------
Total current assets 102,328 62,531 (8,510) 156,349
Investments 18,048 - - 18,048
Property, plant and equipment, net 49,009 28,113 - 77,122
Deferred income taxes and other assets 14,982 1,289 500 C 16,771
Assets held for sale - 2,917 - 2,917
Goodwill and other intangible assets, net 104,585 4,655 34,127 A 143,367
------- ------- ------- -------
Total assets $288,952 $ 99,505 $ 26,117 $414,574
======= ======= ======= =======
LIABILITIES AND SHAREHOLDERS' EQUITY
Current liabilities:
Long-term debt, current maturities 5,023 335 - 5,358
Accounts payable 12,971 9,720 - 22,691
Accrued compensation 16,283 4,238 - 20,521
Accrued income taxes 4,962 85 - 5,047
Customer prepayments 6,130 31 - 6,161
Other current liabilities 21,170 12,136 650 A 33,956
------- ------ ------- -------
Total current liabilities 66,539 26,545 650 93,734
Long-term debt 40,726 140 94,500 A,C 135,366
Estimated finishing costs 7,401 - - 7,401
Postretirement benefits 18,639 - - 18,639
Other liabilities 11,931 3,787 - 15,718
Shareholders' equity:
Common stock 36,334 89 (89) A 36,334
Additional paid in capital 40,455 (40,455) A -
Retained earnings 184,845 28,791 (28,791) A 184,845
Accumulated other
comprehensive income (loss) (8,983) (302) 302 A (8,983)
Treasury stock, at cost (68,480) - - (68,480)
------- ------- ------- -------
Total shareholders' equity 143,716 69,033 (69,033) $143,716
------- ------- ------- -------
Total liabilities and
shareholders' equity $288,952 $ 99,505 $ 26,117 $414,574
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APPENDIX B
PRO FORMA CONDENSED CONSOLIDATED STATEMENT OF INCOME (UNAUDITED)
for the year ended September 30, 2001
(dollars in thousands, except per share amounts)
Historical
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The York Pro Forma Pro Forma
Matthews Group, Inc. Adjustments Consolidated
-------- ---------- -------- --------
Sales $ 283,282 $ 157,808 $ - $ 441,090
Cost of sales (163,846) (113,882) - (277,728)
------- ------- ------- -------
Gross profit 119,436 43,926 - 163,362
Selling and administrative expenses (68,256) (30,629) 21 D (98,864)
Special items 2,177 (5,791) 346 E (3,268)
------- ------- ------- -------
Operating profit 53,357 7,506 367 61,230
Investment income 2,365 687 - 3,052
Interest expense (1,647) (4,403) 649 C (5,401)
Other income (deductions), net (279) (1,013) - (1,292)
Minority interest (2,338) - - (2,338)
------- ------- ------- -------
Income before income taxes 51,458 2,777 1,016 55,251
Income taxes (19,859) (2,088) 571 F (21,376)
------- ------- ------- -------
Net income $ 31,599 $ 689 $ 1,587 $ 33,875
======= ======= ======= =======
Diluted earnings per share $ 1.01 $ 1.08
===== =====
Diluted weighted-average
outstanding shares 31,320,054 31,320,054
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The unaudited pro forma condensed consolidated financial statements reflect
the following pro forma adjustments:
A Matthews has accounted for this acquisition using the purchase method and,
accordingly, recorded the acquired assets and liabilities (including estimated
acquisition costs) at their estimated fair values at the closing date. The
purchase price was $98.4 million cash, financed principally by bank
borrowings. The excess purchase price over the value of assets acquired, net
of liabilities assumed, was preliminarily recorded as goodwill. Independent
third-party valuations are currently underway to determine final purchase
price allocation. Accordingly, preliminary allocations will be subject to
refinement. No assumptions were made regarding restructuring or recurring
synergies that may occur as a result of the acquisition.
B In accordance with the change in control provisions of its stock option
plan, York paid $4.2 million to settle all outstanding stock options
immediately prior to the acquisition.
C In connection with the acquisition, Matthews borrowed $124.5 million under
a Revolving Credit Facility. A portion of the borrowings were used to repay
all outstanding debt ($30.0 million) under the Company's existing Revolving
Credit and Term Loan Agreement. The borrowings bear interest at LIBOR plus a
factor ranging from .75% to 1.5% based on the Company's leverage ratio. The
weighted-average interest rate at the closing date was 3.15%. Assuming a
0.125% change in interest rates, interest expense would change by $155,625 for
the year ended September 30, 2001. Loan costs of approximately $500,000 were
recorded in other assets for amortization over the term of the facility, with
such amortization recorded as a component of interest expense.
D Selling and administrative expenses have been adjusted to reflect
incremental amortization of goodwill and other intangible assets related to
the commemorative products business of York, which was acquired May 24, 2001
and prior to the effective date of Statement of Financial Accounting Standards
No. 141 "Business Combinations." Goodwill was amortized on a straight-line
basis over a 20-year period. In accordance with SFAS No. 141, no goodwill
amortization has been recorded in connection with the acquisition of York on
December 3, 2002.
E Special items have been adjusted to exclude acquisition-related costs in
connection with this transaction incurred and expensed by York. Special items
of York not eliminated include plant closure and restructuring charges.
F The provision for income taxes was adjusted to reflect an assumed effective
tax rate of 40% on goodwill amortization and other pro forma adjustments to
the consolidated statement of income.
G Certain amounts in the balance sheet of The York Group, Inc. have been
reclassified to conform to Matthews' presentation.