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SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 8-K/A
Amendment No. 1
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 6, 2001
International Knife & Saw, Inc.
(Exact Name of Registrant as Specified in Charter)
333-17305 (Commission File Number)
Delaware 57-0697252
(State or Other Jurisdiction of (I.R.S. Employer
Incorporation) Identification No.)
1299 Cox Avenue
Erlanger, Kentucky 41018
(Address of principal executive offices)
(859) 371-0333
(Registrant's telephone number, including area code)
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This amendment to the Current Report on Form 8-K of International Knife & Saw,
Inc. for the event reported June 6, 2001 (the "Original Form 8-K") amends and
modifies the Original Form 8-K as follows:
Item 2, Acquisitions or Dispositions of Assets, is amended by the
amendment of the second sentence of the first paragraph which is
restated as follows:
Item 2. Acquisition or Disposition of Assets.
On June 6, 2001, International Knife & Saw, Inc., a Delaware
corporation ("the Company"), sold all of the issued and outstanding
capital stock of IKS Klingelnberg GmbH, a wholly owned German
subsidiary of the Company ("IKSK"), to Diether Klingelnberg and TKM
GmbH i.G., a company organized under the laws of Germany ("TKM" and,
together with Mr. Klingelnberg, the "Purchasers"), for approximately
$11.7 million in cash. The Company expects to record a loss on the sale
of IKSK of approximately $11.2 million. The loss is subject to
adjustment based on final closing values and transaction expenses. The
proceeds from the sale were immediately applied to repay all
indebtedness and other obligations owed by the Company to Deutsche Bank
AG, the Company's senior lender.
Mr. Klingelnberg and Thomas W.G. Meyer are managing directors and
stockholders of TKM. Mr. Meyer is a minority stockholder of IKS
Corporation, a Delaware corporation and the parent of the Company
("Parent"). In addition, until April 20, 2001 Mr. Klingelnberg served
as a director of the Company and Parent, and until May 31, 2001 Mr.
Meyer served as an Executive Vice President of the Company and Parent.
At the time of the sale, Mr. Meyer was the Chief Executive Officer of
IKSK. The amount of consideration paid to the Company for the issued
and outstanding capital stock of IKSK was determined by arms length
negotiation between the Board of Directors of the Company and the
Purchasers.
In connection with the sale, the Purchasers agreed that, for a period
of 18 months and subject to certain conditions, IKSK would continue the
existing trading arrangements between the Company and IKSK with respect
to current products manufactured by IKSK and purchased by the Company.
Prior to the sale, the holders of a majority in aggregate principal
amount of the Company's Series B 11-3/8% Senior Subordinated Notes due
2006 (the "Notes") consented to the sale and waived compliance by the
Company with the provisions of Section 4.14 (Limitation on Transactions
with Affiliates), Section 4.15 (Change of Control), Section 4.16
(Limitation on Asset Sales) and Article Five of the Indenture governing
the Notes, as well as any other relevant provisions of such Indenture,
to the extent applicable to the transaction.
Item 7 (b), Pro Forma Financial Information (Unaudited), is amended by
the amendments of the second sentence of the first paragraph, the
shareholder's deficit section of the Pro Forma Consolidated Balance
Sheet (Unaudited) and the addition of note (f) in the Notes to Pro
Forma Consolidated Balance Sheet which is restated as follows:
2
Item 7. Financial Statements, Pro Forma Financial Information and
Exhibits.
(b) Pro Forma Financial Information (Unaudited)
On June 6, 2001, the Company sold all of the issued and
outstanding capital stock of IKSK to the Purchasers for
approximately $11.7 million in cash. The Company expects to
record a loss on the sale of IKSK of approximately $11.2
million. The loss is subject to adjustment based on final
closing values and transaction expenses. The proceeds from the
sale were immediately applied to repay all indebtedness and
other obligations owed by the Company to Deutsche Bank AG, the
Company's senior lender.
Set forth below are the unaudited pro forma consolidated
balance sheet of the Company at March 31, 2001, and the
unaudited pro forma consolidated statements of income of the
Company for the year ended December 31, 2000 and for the three
months ended March 31, 2001.
The unaudited pro forma consolidated balance sheet and
unaudited pro forma consolidated statements of income
(collectively, the "Pro Forma Financial Information") are
based on the historical consolidated financial statements of
the Company, adjusted to give effect to the disposition of
IKSK. The unaudited pro forma consolidated balance sheet gives
effect to the disposition as if it had occurred on March 31,
2001. The unaudited pro forma consolidated statements' of
income give effect to the disposition as if it had occurred on
January 1, 2000. The loss on the sale of IKSK is not
considered in the presented unaudited pro forma consolidated
statements of income.
The Pro Forma Financial Information is presented for
informational purposes and does not purport to represent what
the Company's financial position or results of operations
would actually have been had the disposition of IKSK occurred
on the dates specified or to project the Company's financial
position and results of operations at any future date or for
any future period. The Pro Forma Financial Information
reflects certain assumptions described in the accompanying
notes. The Pro Forma Financial Information should be read in
conjunction with the historical consolidated financial
statements of the Company previously filed with the Securities
and Exchange Commission.
3
International Knife & Saw, Inc. and Subsidiaries
Pro Forma Consolidated Balance Sheet
(Unaudited)
(in thousands)
March 31, 2001
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Historical Disposition Pro Forma
International Historical Pro Forma International
Knife & Saw, Inc. IKSK (a) Adjustments Knife & Saw, Inc.
----------------- ----------- ----------- -----------------
Assets
Current assets:
Cash and cash equivalents $ 3,423 $ (2,702) $ - $ 721
Accounts receivable, trade, less
allowances for doubtful accounts 24,543 (12,975) - 11,568
Inventories 29,032 (14,449) 122 (b) 14,705
Due (to) from parent (40) (2,306) 2,306 (c) (40)
Other current assets 2,425 (1,406) - 1,019
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Total current assets 59,383 (33,838) 2,428 27,973
Other assets:
Goodwill 13,994 (6,703) - 7,291
Debt issuance costs 2,154 - - 2,154
Other noncurrent assets 2,138 (1,435) - 703
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18,286 (8,138) - 10,148
Property, plant and equipment-net 45,249 (24,797) - 20,452
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Total assets $ 122,918 $ (66,773) $ 2,428 $ 58,573
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See notes to Unaudited Pro Forma Consolidated Balance Sheet.
4
International Knife & Saw, Inc. and Subsidiaries
Pro Forma Consolidated Balance Sheet (Continued)
(Unaudited)
(in thousands)
March 31, 2001
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Historical Disposition Pro Forma
International Historical Pro Forma International
Knife & Saw, Inc. IKSK (a) Adjustments Knife & Saw, Inc.
----------------- ---------- ------------ -----------------
Liabilities and Shareholder's deficit
Current liabilities:
Notes payable $ 22,077 $ (10,358) $ (11,719)(d) $ -
Current portion of long-term debt 3,563 (2,533) - 1,030
Accounts payable 9,477 (5,247) 2,306 (c) 6,536
Accrued liabilities 14,799 (6,503) - 8,296
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Total current liabilities 49,916 (24,641) (9,413) 15,862
Long-term debt, less current portion 106,287 (14,376) - 91,911
Other liabilities 8,426 (7,810) - 616
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Total liabilities 164,629 (46,827) (9,413) 108,389
Minority interest 1,105 (1,105) - -
Shareholder's deficit:
Common stock 5 - - 5
Additional paid-in capital 10,153 - - 10,153
Accumulated deficit (43,581) - (10,633)(e) (54,214)
Accumulated other
comprehensive loss (5,961) - 3,633 (f) (2,328)
Treasury stock, at cost (3,432) - - (3,432)
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Total shareholder's deficit (42,816) - (7,000) (49,816)
Total liabilities and shareholder's
deficit $ 122,918 $ (47,932) $ (16,413) $ 58,573
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See notes to Unaudited Pro Forma Consolidated Balance Sheet.
5
International Knife & Saw, Inc. and Subsidiaries
Notes to Pro Forma Consolidated Balance Sheet
(Unaudited)
(in thousands)
(a) The amounts in the "Historical IKSK" column are derived from the unaudited
consolidated balance sheet of IKSK at March 31, 2001, which was prepared
based on accounting principles generally accepted in the United States.
(b) Adjustment to inventory to record the intercompany profit included in the
Company's inventories purchased from IKSK.
(c) Adjustment to reflect the Company's intercompany payable balances with IKSK
as third party trade payables.
(d) Reflects the use of the proceeds from the sale to repay the indebtedness
and other obligations due to the Company's senior lender.
(e) Adjustment to accumulated deficit to reflect loss on the sale of IKSK at
March 31, 2001.
(f) Adjustment to accumulated other comprehensive loss to reflect the
realization of foreign currency translation adjustments on the sale of IKSK
at March 31, 2001.
6
International Knife & Saw, Inc. and Subsidiaries
Pro Forma Consolidated Statements of Income
(Unaudited)
(in thousands, except per share amounts)
Three Months Ended March 31, 2001
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Historical Disposition Pro Forma
International Historical Pro Forma International
Knife & Saw, Inc. IKSK (a) Adjustments (b) Knife & Saw, Inc.
----------------- ---------- --------------- -----------------
Net sales $ 38,745 $ (18,398) $ 16 (c) $ 20,363
Cost of sales 28,909 (12,490) (106)(d) 16,313
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Gross profit 9,836 (5,908) 122 4,050
Selling, general and administrative expenses 9,435 (4,129) - 5,306
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Operating income 401 (1,779) 122 (1,256)
Other expenses (income):
Interest income (169) 30 - (139)
Interest expense 3,219 (409) (116)(e) 2,694
Minority interest 52 (52) - -
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3,102 (431) (116) 2,555
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Loss before income taxes (2,701) (1,348) 238 (3,811)
Benefit for income taxes (547) (467) - (1,014)
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Net loss $ (2,154) $ (881) $ 238 $ (2,797)
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Net loss per common share $ (4.47) $ (5.80)
See Notes to Unaudited Pro Forma Consolidated Statements of Income.
7
International Knife & Saw, Inc. and Subsidiaries
Pro Forma Consolidated Statements of Income
(Unaudited)
(in thousands, except per share amounts)
Year Ended December 31, 2000
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Historical Disposition Pro Forma
International Historical Pro Forma International
Knife & Saw, Inc. IKSK (a) Adjustments (b) Knife & Saw, Inc.
----------------- ----------- --------------- -----------------
Net sales $ 160,917 $ (68,185) $ 135 (c) $ 92,867
Cost of sales 120,388 (46,890) 13 (d) 73,511
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Gross profit 40,529 (21,295) 122 19,356
Selling, general and administrative expenses 40,026 (15,554) - 24,472
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Operating income 503 (5,741) 122 (5,116)
Other expenses (income):
Interest income (179) 134 - (45)
Interest expense 13,210 (1,550) (356)(e) 11,304
Minority interest 157 (157) - -
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13,188 (1,573) (356) 11,259
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Loss before income taxes (12,685) (4,168) 478 (16,375)
Provision (benefit) for income taxes 2,844 (1,488) - 1,356
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Net loss $ (15,529) $ (2,680) $ 478 $ (17,731)
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Net loss per common share $ (32.22) $ (36.79)
See Notes to Unaudited Pro Forma Consolidated Statements of Income.
8
International Knife & Saw, Inc. and Subsidiaries
Notes to Pro Forma Consolidated Condensed Statement of Income
(Unaudited)
(in thousands)
(a) The amounts in the "Historical IKSK" column are derived from the unaudited
consolidated statement of income of IKSK for the quarter ended March 31,
2001 and the audited consolidated statement of income of IKSK for the year
ended December 31, 2000, which were prepared based on accounting principles
generally accepted in the United States.
(b) The loss on the sale of IKSK is not considered in the unaudited pro forma
consolidated statements of income.
(c) Adjustment to net sales to record sales from the Company to IKSK,
previously eliminated.
(d) Adjustment to cost of sales to record the intercompany profit included in
the Company's inventories purchased from IKSK.
(e) Decrease in interest expense to reflect the repayment of the indebtedness
and other obligations due to the Company's senior lender.
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(c) Exhibits
Exhibit
No. Description
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* 10.01 Agreement dated as of June 5, 2001 among
TKM GmbH, i.G., Diether Klingelnberg and
International Knife & Saw, Inc.
* 10.02 Notarial Deed
* 10.03 Supply Agreement dated June 5, 2001
among TKM GmbH, i.G., Diether Klingelnberg and
International Knife & Saw, Inc.
* Previously Filed
10
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.
INTERNATIONAL KNIFE & SAW, INC.
By: /s/ William M. Schult
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William M. Schult, Executive Vice President
Chief Financial Officer, Treasurer and
Secretary (Principal Financial and
Accounting Officer, and Executive
Committee member)
Date: August 9, 2001
11
EXHIBIT INDEX
Exhibit
No. Description
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* 10.01 Agreement dated as of June 5, 2001 among
TKM GmbH, i.G., Diether Klingelnberg and
International Knife & Saw, Inc.
* 10.02 Notarial Deed
* 10.03 Supply Agreement dated June 5, 2001
among TKM GmbH, i.G., Diether Klingelnberg and
International Knife & Saw, Inc.
* Previously Filed