SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, DC 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) November 29, 1995
ASTRONICS CORPORATION
(Exact Name of Registrant as Specified in Charter)
New York 0-7087 16-0959303
(State or Other (Commission (IRS Employer
Jurisdiction File Number) Identification
of Incorporation) No.)
1801 Elmwood Avenue, Buffalo, New York 14207
(Address of Principal Executive Offices) (Zip Code)
Registrant's telephone number, including area code (716) 447-9013
N/A
(Former Name or Former Address, if Changed Since Last Report)
1
Item 7. Financial Statements, Pro Forma Financial Page
Information and Exhibits.
The following financial statements and pro
forma financial information are filed as a
part of this report.
(A) Financial Statements of Loctite
Luminescent Systems, Inc. 3
(i) Report of Independent Auditors 4
(ii) Audited Financial Statements for
the year ended December 31, 1994
and for the nine months ended
September 30, 1995 5-12
(B) Pro Forma Combined Financial State-
ments of Astronics Corporation and
Loctite Luminescent Systems, Inc. 13
(i) Pro Forma Combined Balance Sheet
as of September 30, 1995 14
(ii) Pro Forma Combined Statement of
Operations for the nine months
ended September 30, 1995 16
(iii) Pro Forma Combined Statement of
Operations for the twelve months
ended December 31, 1994 17
(iv) Notes to Pro Forma Financial
Statements 18
(C) Exhibits
(2.1) Stock Purchase Agreement
dated November 29, 1995 among
Astronics Corporation, Loctite
Corporation and Loctite Luminescent
Systems, Inc., incorporated by
reference to Exhibit 2.1 of
Form 8-K filed December 13, 1995.
Pursuant to Rule 601(b)(2) of
Regulation S-K, exhibits and
schedules to this agreement have
been omitted. The Company hereby
agrees to supplementally provide to
the Securities and Exchange
Commission copies of the schedules
upon request.
(23) Consent of Ernst & Young LLP
2
Loctite Luminescent Systems, Inc.
Financial Statements
Nine months ended September 30, 1995
and the year ended December 31, 1994
Contents
Page
Report of Independent Auditors 4
Audited Financial Statements
Balance Sheets 5-6
Statements of Operations 7
Statements of Cash Flows 8
Notes to Financial Statements 9-12
3
Report of Independent Auditors
Board of Directors
Loctite Luminescent Systems, Inc.
We have audited the accompanying balance sheets of Loctite
Luminescent Systems, Inc. as of September 30, 1995 and
December 31, 1994, and the related statements of operations and
cash flows for the nine months ended September 30, 1995 and for
the year ended December 31, 1994. These financial statements are
the responsibility of the Company's management. Our
responsibility is to express an opinion on these financial
statements based on our audits.
We conducted our audits in accordance with generally accepted
auditing standards. Those standards require that we plan and
perform the audit to obtain reasonable assurance about whether
the financial statements are free of material misstatement. An
audit includes examining, on a test basis, evidence supporting
the amounts and disclosures in the financial statements. An
audit also includes assessing the accounting principles used and
significant estimates made by management, as well as evaluating
the overall financial statement presentation. We believe that
our audits provide a reasonable basis for our opinion.
In our opinion, the financial statements referred to above
present fairly, in all material respects, the financial position
of Loctite Luminescent Systems, Inc. at September 30, 1995 and
December 31, 1994, and the results of its operations and its cash
flows for the nine months ended September 30, 1995 and the year
ended December 31, 1994, in conformity with generally accepted
accounting principles.
Ernst & Young LLP
December 8, 1995
4
Loctite Luminescent Systems, Inc.
Balance Sheets
September 30, December 31,
1995 1994
_______________________________
Assets
Current assets:
Accounts receivable,
less allowance of
$100,033 at September 30, 1995
($104,428 at December 31, 1994) $ 1,897,603 $ 2,065,403
Inventories (Note 2) 3,264,137 3,309,822
Prepaid expenses 5,925 -
____________ ______________
Total current assets 5,167,665 5,375,225
Property and equipment:
Leasehold improvements 1,043,071 988,599
Machinery and equipment 6,081,978 6,591,070
____________ ______________
7,125,049 7,579,669
Accumulated depreciation
and amortization (5,712,070) (6,201,202)
____________ ______________
1,412,979 1,378,467
Other assets:
Patents, trademarks and other
intangibles net of accumulated
amortization of $4,871,736 at
September 30, 1995 ($4,623,111
at December 31, 1994) 1,794,264 2,042,889
Other 18,201 10,859
____________ ______________
Total other assets 1,812,465 2,053,748
____________ ______________
Total assets $ 8,393,109 $ 8,807,440
============ ==============
5
September 30, December 31,
1995 1994
_______________________________
Liabilities and shareholders'
equity
Current liabilities:
Cash overdraft $ 91,500 $ 8,307
Accounts payable 267,636 318,497
Intercompany payable to
Loctite Corporation 4,737,263 4,612,260
Accrued expenses 585,019 604,435
____________ ______________
Total current liabilities 5,681,418 5,543,499
Postretirement obligations 380,213 272,738
Shareholders' equity:
Common stock, $1 par value,
1,000,000 share authorized,
654,748 issued and outstanding 654,748 654,748
Additional paid-in-capital 4,670,211 4,670,211
Accumulated deficit (2,993,481) (2,333,756)
____________ ______________
Total shareholders' equity 2,331,478 2,991,203
____________ ______________
Total liabilities and
shareholders' equity $ 8,393,109 $ 8,807,440
============ ==============
See accompanying notes.
6
Loctite Luminescent Systems, Inc.
Statements of Operations
Nine months
ended Year ended
September 30, December 31,
1995 1994
_______________________________
Net sales $ 8,726,766 $ 11,370,929
Cost of sales 6,413,237 7,826,114
____________ ______________
Gross profit 2,313,529 3,544,815
Selling, general and
administrative expenses 2,641,951 3,814,322
____________ ______________
Operating loss (328,422) (269,507)
Other expense:
Intercompany foreign sales
commission 288,750 320,227
Other intercompany charges 42,553 18,000
____________ ______________
331,303 338,227
____________ ______________
Net loss $ (659,725) $ (607,734)
============ ==============
See accompanying notes.
7
Loctite Luminescent Systems, Inc.
Statements of Cash Flows
Nine months
ended Year ended
September 30, December 31,
1995 1994
_______________________________
Operating activities
Net loss $ (659,725) $ (607,734)
Adjustments to reconcile
net loss to net cash provided
by (used in) operating
activities:
Depreciation and amortization 597,614 915,411
Loss on disposal of fixed assets 13,177 59,628
Changes in operating assets
and liabilities:
Accounts receivable 167,800 (350,498)
Inventories 45,685 (989,776)
Prepaid expenses and other (13,267) 201,379
Accounts payable and
accrued expenses (70,277) (1,135,185)
Post retirement obligations 107,475 123,734
____________ ______________
Net cash provided by (used in)
operating activities 188,482 (1,783,041)
Investing activities
Purchases of property
and equipment (396,678) (335,188)
____________ ______________
Net cash used in investing
activities (396,678) (335,188)
Financing activities
Increase in intercompany payable 125,003 1,902,372
____________ ______________
Net cash provided by financing
activities 125,003 1,902,372
____________ ______________
Net decrease in cash (83,193) (215,857)
(Overdraft) cash at beginning
of year (8,307) 207,550
____________ ______________
Cash overdraft at end of year $ (91,500) $ (8,307)
============ ==============
See accompanying notes.
8
Loctite Luminescent Systems, Inc.
Notes to Financial Statements
September 30, 1995 and December 31, 1994
1. Basis of Presentation
The accompanying financial statements present, on a historical
basis, the financial position and results of operations related
to Loctite Luminescent Systems, Inc. (the "Company"), a wholly-
owned subsidiary of Loctite Corporation. On November 29, 1995,
Loctite Corporation entered into an agreement to sell
substantially all the assets of the Company carried in the
accompanying September 30, 1995 balance sheet at $8,393,000 for
approximately $6,000,000 plus trade accounts payable assumed by
the buyer. These financial statements do not reflect the loss on
disposal of approximately $2.1 million.
2. Summary of Significant Accounting Policies
Business of the Company
The Company is involved in the design, manufacture, and marketing
of lamps, formation lights, and egress lighting systems. Revenue
is recognized at the time of shipment of goods. The Company
performs periodic credit evaluations of its customers' financial
condition, and generally does not require collateral.
Inventories
Inventories are valued at the lower of cost (first-in, first-out
method) or market.
Inventories are summarized as follows:
1995 1994
_________________________
Raw materials $ 1,434,186 $ 1,383,674
Work-in-process 883,410 793,904
Finished products 2,466,522 2,516,759
Obsolescence reserves (1,519,981) (1,384,515)
___________ ___________
Total inventories $ 3,264,137 $ 3,309,822
=========== ===========
Property and Equipment
Property and equipment are stated at cost and depreciated
principally using the straight-line method over the useful lives
of the individual assets ranging from 3 to 12 years. Maintenance
and repairs are charged to expense as incurred, while major
improvements and replacements are capitalized.
9
Loctite Luminescent Systems, Inc.
Notes to Financial Statements (continued)
2. Summary of Significant Accounting Policies (continued)
Patents, Trademarks and Other Intangibles
Patents, trademarks and other intangibles consists principally of
values assigned to these items at the time of acquisition. These
assets are being amortized on an accelerated method over 20
years. The carrying value of intangibles is assessed annually.
Use of Estimates
The preparation of financial statements in conformity with
generally accepted accounting principles requires management to
make estimates and assumptions that affect the amounts reported
in the financial statements and accompanying notes. Actual
results could differ from those estimates.
3. Major Customers and Concentration of Credit Risk
Sales to four customers amounted to approximately 21% of net
sales for the nine months ended September 30, 1995 and 22% of the
accounts receivable balance at September 30, 1995. These
customers are concentrated within the airline, automotive, and
defense industries, with such businesses located throughout the
world.
4. Related Party Transactions
The Company has been charged certain direct costs which have been
paid by Loctite Corporation on behalf of the Company. Such
direct costs include general and worker's compensation insurance
expenses, certain lease payments, patent attorney fees and other
costs billed by third parties. In addition to direct costs,
Loctite Corporation charged a foreign sales commission to the
Company. This commission was $289,000 for the nine months ended
September 30, 1995 ($320,000 for the year ended December 31,
1994).
5. Operating Leases
The Company conducts its main operations from a facility that is
leased under an agreement expiring October 31, 1999. In
addition, the Company leases manufacturing space under a lease
expiring November 30, 1996. The rental expense was $360,895 for
the nine months ended September 30, 1995 ($474,418 for the year
ended December 31, 1994).
10
Loctite Luminescent Systems, Inc.
Notes to Financial Statements (continued)
5. Operating Leases (continued)
The following is a schedule of future minimum rental payments
required under the lease agreements:
Year ending December 31,
1996 $ 481,012
1997 476,938
1998 491,245
1999 421,033
6. Thrift Investment Plan
Under a company-wide Loctite Corporation Thrift Investment Plan,
eligible employees may save, by payroll deductions, a portion of
their salaries. Up to 25% of the amount saved may be invested in
Loctite Corporation common stock. In addition, the Company
matches, in Loctite Corporation common stock, one-half of the
first 6% saved by the employee. Expense recorded related to
this plan for the nine months ended September 30, 1995, was
$55,000 ($74,000 for the year ended December 31, 1994).
7. Retirement Plan
The Company participates in a non-contributory defined benefit
plan for eligible employees in accordance with a Loctite
Corporation company-wide plan. The Company records its allocated
share of pension cost. Expense recorded related to this plan for
the nine months ended September 30, 1995, was $91,000 ($181,000
for the year ended December 31, 1994).
8. Postretirement Health Care and Life Insurance Benefits
The Company provides postretirement health care and life
insurance benefits for eligible employees in accordance with
Loctite Corporation's policies. The benefit plan is contributory
based upon years of service and age at retirement. Health care
benefits are extended to spouses of eligible employees and are
fully paid by retiree contributions.
The Company accounts for the cost of postretirement benefits in
accordance with Statement of Financial Accounting Standards No.
106, "Employers' Accounting for Postretirement Benefits Other
than Pension" (SFAS No. 106). This statement requires that
annual postretirement benefit costs be accrued during an
employee's years of active service. In accordance with SFAS No.
106, the transition obligation, representing the unfunded and
unrecognized accumulated past service benefit obligation for all
11
Loctite Luminescent Systems, Inc.
Notes to Financial Statements (continued)
8. Postretirement Health Care and Life Insurance Benefits
(continued)
plan participants, may be recognized as an expense in the year of
adoption or may be amortized on a straight-line basis over a
period up to twenty years. The Company has adopted SFAS No. 106
by electing to amortize the transition obligation over twenty
years.
Postretirement benefit costs are summarized as follows:
Nine months
ended Year ended
September 30, December 31,
1995 1994
____________________________
Service cost for benefits earned
during the period $ 40,050 $ 41,000
Interest cost on accumulated
postretirement obligation 41,100 41,600
Amortization of transition obligation 26,325 41,134
________ ________
Net periodic postretirement
benefit cost $107,475 $123,734
======== ========
Detail related to the funded status of the plan is not available
at the Loctite Corporation subsidiary level.
9. Taxes on Income
The results of operations of the Company are included in the
consolidated income tax return of Loctite Corporation. Company
losses have been utilized in the consolidated return and no
benefit has been allocated to the Company. Historically, income
taxes have not been significant to the Company.
12
ASTRONICS CORPORATION
Pro Forma Combined Financial Statements
13
ASTRONICS CORPORATION
Pro Forma Combined Balance Sheet
September 30, 1995
(Dollars in Thousands)
(Audited)
Loctite
(Unaudited) Luminescent (Unaudited) (Unaudited)
Astronics Systems, Pro-Forma Pro-Forma
Corporation Inc. Adjustments Combined
Assets
Current Assets:
Cash $ 295 $ 0 $ 295
Accounts receivable 2,788 1,898 4,686
Inventories:
Finished goods 1,876 2,467 A $ (1,431) 2,912
Work in process 553 883 A (310) 1,126
Raw material 1,942 1,434 A (427) 2,949
Obsolescence reserves 0 (1,520)A 1,520 0
Prepaid expenses 1,612 6 1,618
______________________ ___________________
Total current assets $ 9,066 $ 5,168 $ (648) $13,586
Property, Plant and
Equipment 26,487 7,125 A (5,712) 27,900
Less accumulated
depreciation and
amortization 14,438 5,712 A (5,712) 14,438
________ ________ ________ _______
Net property, plant
and equipment $ 12,049 $ 1,413 $ 0 $13,462
Other assets 1,151 1,812 A (1,313) 1,650
______________________ ___________________
$ 22,266 $ 8,393 $ (1,961) $28,698
====================== ===================
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ASTRONICS CORPORATION
Pro Forma Combined Balance Sheet
September 30, 1995
(Dollars in Thousands)
(Audited)
Loctite
(Unaudited) Luminescent (Unaudited) (Unaudited)
Astronics Systems, Pro-Forma Pro-Forma
Corporation Inc. Adjustments Combined
Liabilities and
Shareholders' Equity
Current Liabilities:
Current maturities of
long-term debt $ 2,239 $ 0 $ 2,239
Cash overdraft 0 92 B $ (92) 0
Accounts payable 1,695 267 A,B 187 2,149
Intercompany payable to
Loctite Corporation 0 4,737 B (4,737) 0
Accrued expenses 1,165 585 B (585) 1,165
Income taxes (14) 0 (14)
_________________________ ___________________
Total current
liabilities $ 5,085 $ 5,681 $ (5,227) $ 5,539
Long-Term Debt 3,394 0 A 5,978 9,372
Long-Term Obligations
under Capital Leases 1,926 0 1,926
Deferred Income Taxes 897 0 897
Postretirement obligations 0 380 B (380) 0
Shareholders' Equity:
Common Stock, $.01 par value
Authorized 10,000,000
shares, issued 3,258,248
shares 33 655 B (655) 33
Class B common stock, $.01
par value
Authorized 5,000,000 shares,
issued 830,211 shares 8 0 8
Additional paid-in capital 2,001 4,670 B (4,670) 2,001
Retained earnings 9,602 (2,993)B 2,993 9,602
Treasury stock, at cost (680) 0 (680)
_________________________ ___________________
Total shareholders'
equity $10,964 $ 2,332 $ (2,332) $10,964
_________________________ ___________________
$22,266 $ 8,393 $ (1,961) $28,698
========================= ===================
15
ASTRONICS CORPORATION
Pro Forma Combined Statement of Operations
for the nine months ended September 30, 1995
(Dollars in Thousands)
(Audited)
Loctite
(Unaudited) Luminescent (Unaudited) (Unaudited)
Astronics Systems, Pro-Forma Pro-Forma
Corporation Inc. Adjustments Combined
Net Sales $19,716 $ 8,727 $28,443
Costs and Expenses:
Cost of products sold 13,791 6,413 D $ (449) 19,755
Selling, general and
administrative expenses 4,073 2,642 C (242) 6,473
Interest expenses, net
of interest earned
of $97 319 E 314 633
_________________________ ___________________
Total costs and
expenses $18,183 $ 9,055 $ (377) $26,861
Other expenses:
Intercompany foreign
sales commission 289 F (289) 0
Other intercompany
charges 43 F (43) 0
_________________________ ___________________
$ 0 332 (332) 0
_________________________ ___________________
Income before provision
for taxes on Income $ 1,533 $ (660) $ 709 $ 1,582
Provision for taxes
on income 618 0 G 17 635
_________________________ ___________________
Net income $ 915 $ (660) $ 692 $ 947
========================= ===================
Earnings per share $ 0.24 $ 0.25
======= =======
16
ASTRONICS CORPORATION
Pro Forma Combined Statement of Operations
for the twelve months ended December 31, 1994
(Dollars in Thousands)
(Audited)
Loctite
(Audited) Luminescent (Unaudited) (Unaudited)
Astronics Systems, Pro-Forma Pro-Forma
Corporation Inc. Adjustments Combined
Net Sales $24,944 $11,370 $36,314
Costs and Expenses:
Cost of products sold 17,531 7,826 D $ (707) 24,650
Selling, general and
administrative expenses 4,898 3,814 C (323) 8,389
Interest expenses, net
of interest earned
of $141 527 0 E 418 945
_________________________ ___________________
Total costs and
expenses $22,956 $11,640 $ (612) $33,984
Other expenses:
Intercompany foreign
sales commission 320 F (320) 0
Other intercompany
charges 18 F (18) 0
_________________________ ___________________
$ 0 338 (338) 0
_________________________ ___________________
Income before provision
for taxes on Income $ 1,988 $ (608) $ 950 $ 2,330
Provision for taxes
on income 682 0 G 116 798
_________________________ ___________________
Net income $ 1,306 $ (608) $ 834 $ 1,532
========================= ===================
Earnings per share $ 0.33 $ 0.39
======= =======
17
ASTRONICS CORPORATION
Notes to Pro Forma Financial Statements
Note A The pro forma information for the year ended
December 31, 1994, is based on the audited financial
statements of Astronics Corporation and Loctite
Luminescent Systems, Inc. after giving effect to the
adjustments described in Note B. The pro forma
information for the nine months ended September 30,
1995, are based on information filed on form-10 QSB for
Astronics Corporation and the audited financial
statements for Loctite Luminescent Systems, Inc. after
giving effect to the adjustments described in Note B.
The unaudited pro forma financial statements include
all the adjustments, which are of a normal recurring
nature, which management considers necessary for the
fair presentation of the financial position of
operations for this period.
The pro forma financial statements may not be
indicative of the results that actually would have
occurred if the transactions had occurred on January 1,
1994 and do not project Astronics Corporation's
financial position or results of operations at any
future date or period then ended. The pro forma
financial statements should be read in conjunction with
the financial statements and related notes contained
elsewhere herein and in the 1994 annual report of
Astronics Corporation.
Note B The accompanying pro forma combined financial
statements include adjustments to increase (decrease)
pro forma combined data as follows:
A. To record the purchase of the assets of Loctite
Luminescent Systems, Inc.
B. To eliminate the items not purchased in the
acquisition.
C. To adjust for personnel changes at the time of
acquisition.
D. To adjust depreciation to reflect the new cost
basis of equipment.
E. To reflect the interest on the loan utilized in
the acquisition.
F. To eliminate intercompany items that affected only
Loctite Luminescent Systems, Inc.
G. To adjust taxes to reflect the net effect of the
above adjustments.
18
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.
ASTRONICS CORPORATION
ASTRONICS CORPORATION
(Registrant)
Date: February 5, 1996 By:John M. Yessa
John M. Yessa
Vice President-Finance
19
Consent of Ernst & Young LLP
We consent to the incorporation by reference in the Registration
Statement on Form S-8 (No. 33-65141) of Astronics Corporation of
our report dated December 8, 1995 relating to the financial
statements of Loctite Luminescent Systems, Inc., which appears on
page 4 of this Current Report on Form 8-K/A of Astronics
Corporation dated November 29, 1995.
ERNST & YOUNG LLP
February 5, 1996
20