SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
AMENDMENT NO. 1 TO
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): May 27, 1999
JPE, INC. (d/b/a ASCET INC)
(Exact name of registrant as specified in its charter)
Michigan 0-22580 38-2958730
(State or other (Commission (IRS Employer
jurisdiction of File Number) Identification No.)
Incorporation)
30400 Telegraph Road, Suite 401, Bingham Farms, MI 48025 (Address of
principal executive offices, including zip code)
(248) 723-5531
(Registrant's telephone number, including area code)
FORM 8-K/A
AMENDMENT NO. 1
The undersigned registrant hereby amends the following items, financial
statements, exhibits or other portions of its Current Report on Form 8-K, dated
as of May 27, 1999 and filed with the Securities and Exchange Commission on
June 8, 1999, as set forth in the pages attached hereto:
1. Cover page
2. Item 7 Financial Statements, Pro Forma Financial Information and
Exhibits
(a) Financial Statements of JPE, Inc.
(b) Pro Forma Financial Information
Pro forma Consolidated Balance Sheet as of
March 31, 1999 (Unaudited)
Pro forma Consolidated Statement of Operations for
the three months ended March 31, 1999 (Unaudited)
Pro forma Consolidated Statement of Operations for
the year ended December 31, 1998 (Unaudited)
Pursuant to the requirements of the Securities and Exchange Act of
1934, the registrant has duly caused this amendment to be signed on its behalf
by the undersigned, thereunto duly authorized.
JPE, INC. (d/b/a ASCET INC)
Dated: August 6, 1999 By: /s/ Karen A. Radtke
-------------------------------
Karen A. Radtke
Secretary and Treasurer
Item 7 FINANCIAL STATEMENTS, PRO FORMA FINANCIAL INFORMATION
AND EXHIBITS
(a) The historical financial statements of the Registrant have been filed in
Form 10-K Annual Report for the year ended December 31, 1998. The
Consolidated Financial Statements of the Registrant and Report of
Independent Accountants dated April 1, 1999 are incorporated by reference.
(b) Pro Forma Financial Information
JPE, INC. (d/b/a ASCET INC)
UNAUDITED PRO FORMA CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
The following unaudited pro forma consolidated financial statements give effect
to the following transactions:
o An investment to acquire approximately 95% of the voting securities of JPE,
Inc. ("Registrant" or "Company") on May 27, 1999 by ASC Holdings LLC
("ASC") and Kojaian Holdings LLC ("Kojaian") in equal proportions for total
consideration of $18,400,000 (the "Investment").
o A debt forgiveness of $16,487,029 from the Company's existing bank lenders
(the "Bank Group") in exchange for approximately 1% of the voting
securities of the Company (the "Bank Debt Forgiveness"). The debt
forgiveness will be accounted for as an extraordinary item in the quarter
ended June 30, 1999.
o The execution of the reorganization plans of Company's subsidiaries,
Plastic Trim, Inc. ("PTI") and Starboard Industries, Inc. ("Starboard")
which were confirmed by the Bankruptcy Court on April 16, 1999. Certain
vendors of these subsidiaries agreed to accept 30% of their pre-bankruptcy
account balances constituting a forgiveness of liabilities of approximately
$3,793,000 (the "Bankruptcy Debt Forgiveness").
o The sale of Industrial & Automotive Fasteners, Inc. ("IAF"), the
Registrant's fastener business segment, is being accounted for as
discontinued operations. The beginning balances have been restated to
eliminate the accounts of IAF.
The Pro Forma Condensed Consolidated Balance Sheet at March 31, 1999 reflects
the Investment, the Bankruptcy Debt Forgiveness, and Bank Debt Forgiveness
transactions as if they were completed on March 31, 1999. The Pro Forma
Condensed Consolidated Statements of Operations for the three month period ended
March 31, 1999 and the year ended December 31, 1998 reflect the transactions as
if they had been completed as of January 1, 1999 and January 1, 1998,
respectively.
The pro forma data does not purport to be indicative of the results which would
actually have been reported if these transactions had occurred on such dates or
which may be reported in the future. The pro forma data should be read in
conjunction with the historical financial statements of Registrant and the
related notes to such financial statements.
The allocation of the purchase price to the assets and liabilities of JPE, Inc.
is a preliminary estimate. The actual allocation, when finalized, might be
different than the preliminary estimate.
JPE, INC. d/b/a ASCET INC
Pro Forma Condensed Consolidated Balance Sheet
as of March 31, 1999
(Unaudited in thousands)
Pro Forma Pro Forma
Adjustment for Pro Forma for Prior to Adjustments
ASCET Elimination of Liabilities Purchase Purchase ASCET
Consolidated of Equity Method (1) Forgiveness (2) Transaction Transaction Consolidated
Cash and cash equivalents $ 695 $ 142 - $ 837 - $ 837
Accounts receivables
trade, net 8,331 20,204 - 28,535 - 28,535
Inventory, net 13,692 5,713 - 19,405 $ 557 (a) 19,962
Other current assets 1,243 1,403 - 2,646 2,777 (b)(k) 5,423
-------------------------------------------------------------------------- --------
Total current assets 23,961 27,462 - 51,423 3,334 54,757
Investment in affiliated
companies 16,817 (16,817) - - - -
Net fixed assets 10,364 20,178 - 30,542 856 (c) 31,398
Goodwill 5,445 - - 5,445 (3,108) (d)(l) 2,337
Other assets, long term 654 - - 654 188 (d)(e) 842
--------------------------------------------------------------------------- --------
Total assets $ 57,241 $ 30,823 $ - $88,064 $ 1,270 $ 89,334
=========================================================================== ========
Short -term and current
portion long-term debt $ 67,448 $ 21,469 $ (16,487) $72,430 $(13,715) (f)(g) $ 58,715
Accounts payable trade 4,768 6,387 (3,711) 7,444 (2,845) (g) 4,599
Accrued liabilities 1,819 2,632 (35) 4,416 - 4,416
Other current liabilities 569 (16) - 553 - 553
--------------------------------------------------------------------------- --------
Total current liabilities 74,604 30,472 (20,233) 84,843 (16,560) 68,283
Other long-term accrued
liabilities 319 68 (47) 340 - 340
Long-term debt 38 283 - 321 - 321
Deferred income taxes - - - - 1,174 (k) 1,174
Common stock and paid
in capital 28,051 - - 28,051 (25,718) (f)(h)(j) 2,333
Preferred stock - - 177 177 16,413 (f) 16,590
Preferred stock warrants - - - - 293 (i) 293
Retained earnings (45,771) - 20,103 (25,668) 25,668 (h) -
--------------------------------------------------------------------------- --------
Total stockholders' equity (17,720) - 20,280 2,560 16,656 19,216
--------------------------------------------------------------------------- --------
Total liabilities and
stockholders' equity $ 57,241 $ 30,823 $ - $88,064 $ 1,270 $ 89,334
=========================================================================== ========
<FN>
The following columns reflect changes to JPE, Inc. consolidated financial
statements to show the effect of settlement of the Chapter 11 Bankruptcy case
for PTI and Starboard.
1) This column eliminates equity method accounting for PTI and Starboard at
March 31, 1999 to reflect the consolidated accounts for JPE, Inc.
2) This column shows the liabilities that were forgiven as settlement prior to
purchase by ASC and Kojaian. JPE's Bank Group forgave $16,487,029 of debt
in exchange for 20,650.115 shares of Preferred Stock with an estimated fair
market value of $177,000. In addition, certain vendors of PTI and Starboard
agreed to accept 30% of their pre-bankruptcy account balances, which
resulted in a forgiveness of approximately $3,793,000.
The following adjustments were made to give effect to the purchase by ASC and
Kojaian of 95% of JPE, Inc. voting securities.
a) To reflect inventory at fair market value at the acquisition date.
b) To record the costs, of approximately $627,000, associated with the
borrowings used to finance the purchase, which will be amortized over the
term of the debt.
c) To increase fixed assets to appraised value that approximates fair market
value. Long-term assets held for resale are valued at estimated net
realizable value.
d) To eliminate previously recorded goodwill of $339,000.
e) To record the asset for the plan assets in excess of the projected benefit
obligation for PTI's Hourly Pension Plan.
f) To record the investment made by ASC and Kojaian of $16,413,274 for
1,952,352.19 shares of First Series Preferred Shares and $1,986,726 for
9,441,420 shares of common stock. These proceeds were used to reduce debt.
g) To record borrowings utilized to retired JPE remaining debt, after the Bank
Debt Forgiveness, of approximately $47.9 million. In addition, funds were
borrowed of approximately $4.4 million to pay balances owed the pre-
bankruptcy unsecured creditors and fees and accrued interest associated
with the termination of JPE's financing.
h) To reduce the capital accounts of JPE, Inc. to reflect the 4% interest of
the JPE, Inc.'s shareholders, of $46,000, which represents approximately 4%
of shareholders' equity before the ASC and Kojaian investment.
i) To record the value of the 422,601.437 warrants to purchase First Series
Preferred Shares issued to JPE's public shareholders and the Bank Group at
estimated fair value of approximately $293,000.
j) ASC and Kojaian direct costs related to the acquisition of $300,000 has
been recorded as additional paid in capital.
k) To record deferred taxes associated with the above purchase price
adjustments and re-establish the deferred taxes of JPE, Inc., net of a
valuation reserve of $3.2 million.
l) To record goodwill for the excess of the purchase price over the sum of the
amounts assigned to assets acquired less liabilities assumed.
</FN>
JPE, INC. d/b/a ASCET INC
Pro Forma Condensed Consolidated Statement of Operations
for the Three Months Ended March 31, 1999
(Unaudited in thousands)
Pro Forma Pro Forma
Adjustment for Eliminate Prior to Adjustments Pro Forma
ASCET Disposition Elimination of Non-recurring Purchase Purchase ASCET
Consol. JPE Canada Equity Method Transactions Transaction Transaction Consol.
(1) (2) (3)
Net sales $14,159 $ - $25,703 - $39,862 $ - $39,862
Cost of goods
sold 10,315 - 22,376 - 32,691 $ (215)(a)(b) 32,476
------------------------------------------------------------------------- -------
Gross profit 3,844 - 3,327 - 7,171 215 7,386
Selling and
administrative
expenses 3,252 - 1,768 - 5,020 (22)(c) 4,998
------------------------------------------------------------------------- -------
Operating
profit 592 - 1,559 - 2,151 237 2,388
Affiliates
companies
income (3,718) 2,621 1,097 - - - -
Other expenses 258 - 24 $ (282) - - -
------------------------------------------------------------------------- -------
Income (loss) from
continuing
operations
before interest
and taxes and
extraordinary
items 4,052 (2,621) 438 282 2,151 237 2,388
Interest expense,
net 1,660 - 434 - 2,094 (670)(d) 1,424
------------------------------------------------------------------------- -------
Income (loss) from
continuing
operations
before taxes and
extraordinary
items 2,392 (2,621) 4 282 57 907 964
Income tax
expense 71 - 4 - 75 264 (e) 339
------------------------------------------------------------------------- -------
Income (loss)
from continuing
operations before
extraordinary
items $ 2,156 $ (2,621) $ - $ 282 $ (18) $ 643 $ 625
========================================================================= =======
Basic earnings per
share from
continuing
operations: (f)
Common stock $ 0.50 $ 0.01
Preferred stock N/A $ 0.28
Earnings per share
from continuing
operations
assuming
dilution: (f)
Common stock $ 0.50 $ 0.01
Preferred stock N/A $ 0.26
<FN>
The following columns reflect changes to JPE, Inc. consolidated financial
statements to show the effect of the sale of certain subsidiaries and the
settlement of the Chapter 11 Bankruptcy case for PTI and Starboard.
1) This column eliminates the amounts related to JPE Canada ("JPEC") which was
sold in the first quarter of 1999.
2) This column eliminates equity method accounting for PTI and Starboard at
March 31, 1999 to reflect the consolidated accounts for JPE, Inc.
3) To eliminate costs associated with the bankruptcy. This adjustment is to
eliminate the effects of an unusual event.
The following adjustments were made to give effect to the purchase by ASC and
Kojaian of approximately 95% of JPE, Inc. voting securities.
a) To reduce cost of sales by $452 thousand for the adjustment of depreciation
based on the fair market value of the assets.
b) Increase cost of sales by $237 thousand to recognize the higher cost
allocated to inventory based on fair market value.
c) To reduce amortization of Goodwill by $22 thousand. The goodwill recognized
in the purchase of $2.3 million is being amortized over 15 years.
d) To adjust interest expense for debt financing for the purchase and the
amortization deferred debt costs.
e) To adjust tax expense at an effective tax rate of 38.4% less net operating
loss carryforward tax benefit of $76 thousand.
f) The Investment included the issuance of First Series Preferred Shares with
the same rights and privileges of the common stock, one share of First
Series Preferred Shares granting rights is equal to 50 shares of common
stock. Therefore, the First Series Preferred Shares constitute a
participating security and requires the utilization of the "two-class
method" for computing earnings per share. Under this method, the earnings
are allocated based on ownership percentage. The common shareholders have
approximately 12.5% of the ownership.
</FN>
JPE, INC. d/b/a ASCET INC
Pro Forma Condensed Consolidated Statement of Operations
for the Year Ended December 31, 1998
(Unaudited in thousands)
Pro Forma Pro Forma
Adjustment for Eliminate Prior to Adjustments Pro Forma
ASCET Disposition Elimination of Non-recurring Purchase Purchase ASCET
Consol. of Subs. Equity Method Transactions Transaction Transaction Consol.
(1) (2) (3)
Net sales $171,780 $(42,168) $29,080 - $158,692 - $158,692
Cost of goods
sold 151,802 (41,454) 26,164 - 136,512 $ (2,019)(a)(b) 134,493
------------------------------------------------------------------------- --------
Gross profit (loss) 19,978 (714) 2,916 - 22,180 2,019 24,199
Selling and
administrative
expenses 25,583 (4,149) 2,264 $ (756) 22,942 (711)(c) 22,231
------------------------------------------------------------------------- --------
Operating profit
(loss) (5,605) 3,435 652 756 (762) 2,730 1,968
Charge for
subsidiaries
under court order
protection 28,490 (1,935) - (26,555) - - -
Affiliates
companies losses 1,713 (1,173) (540) - - - -
Loss on sale of
Allparts, Inc. 5,190 (5,190) - - - - -
Other expenses 1,886 (516) 724 (2,094) - - -
------------------------------------------------------------------------- --------
Income (loss) from
continuing
operations
before interest
and taxes and
extraordinary
items (42,884) 12,249 468 29,405 (762) 2,730 1,968
Interest expense,
net 11,213 (973) 400 - 10,640 (4,705)(d) 5,935
------------------------------------------------------------------------- --------
Income (loss) from
continuing
operations
before taxes and
extraordinary
items (54,097) 13,222 68 29,405 (11,402) 7,435 (3,967)
Income tax
expense (1,035) (829) 68 - (1,796) 2,506 (e) 710
------------------------------------------------------------------------- --------
Income (loss)
from continuing
operations before
extraordinary
items $ (53,062) $ 14,051 $ - $29,405 $ (9,606) $ 4,929 $ (4,677)
========================================================================== ========
Basic loss per
share from
continuing
operations: (f)
Common stock $(11.53) $ (0.04)
Preferred stock N/A $ (2.07)
Loss per share
from continuing
operations
assuming
dilution: (f)
Common stock $(11.53) $ (0.04)
Preferred stock N/A $ (2.07)
<FN>
The following columns reflect changes to JPE, Inc. consolidated financial
statements to show the effect of the sale of certain subsidiaries and the
settlement of the Chapter 11 Bankruptcy case for PTI and Starboard.
1) This column eliminates the amounts related to Allparts, Inc. and JPEC which
were sold in 1998 or 1999 prior to the Investment, the Bank Debt
Forgiveness and the Bankruptcy Debt Forgiveness.
2) This column eliminates equity method accounting for PTI and Starboard at
December 31 1998 to reflect the consolidated accounts for JPE, Inc.
3) To eliminate the effect of costs related to the bankruptcy. This adjustment
includes the elimination of a 15% discount to major customers as ordered by
the Bankruptcy Court, write-down of goodwill and fixed assets for an
impairment of value and professional fees for costs incurred.
The following adjustments were made to give effect to the purchase by ASC and
Kojaian of approximately 95% of JPE, Inc. voting securities.
a) To reduce cost of sales by $2.6 million for the adjustment of depreciation
based on the fair market value of the assets.
b) Increase cost of sales by $557 thousand to recognize the higher cost
allocated to inventory based on fair market value.
c) To reduce amortization of Goodwill by $711 thousand. The goodwill
recognized in the purchase of $2.3 million is being amortized over 15
years.
d) To adjust interest expense for debt financing for the purchase and the
amortization deferred debt costs.
e) To record tax expense at an effective rate of 38.4% related to the purchase
adjustment, net of utilization net operating loss carryforward of $76
thousand.
f) The Investment included the issuance of First Series Preferred Shares with
the same rights and privileges of the common stock, one share of First
Series Preferred Shares granting rights is equal to 50 shares of common
stock. Therefore, the First Series Preferred Shares constitute a
participating security and requires the utilization of the "two-class
method" for computing earnings per share. Under this method, the earnings
are allocated based on ownership percentage. The common shareholders have
approximately 12.5% of the ownership.
</FN>