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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, DC 20549
FORM 8-K
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 26, 1999
DEXTER CORPORATION
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(Exact name of registrant as specified in its charter)
CONNECTICUT 1-5542 06-0321410
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(State or other jurisdiction of (Commission file number) (I.R.S. Employer
incorporation or organization) Identification No.)
ONE ELM STREET, WINDSOR LOCKS, CONNECTICUT 06096
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(Address of principal executive offices) (Zip code)
Registrant's telephone number, including area code: (860) 292-7675
N/A
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(Former name, former address and former fiscal year, if changed since last
report.)
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ITEM 2 - ACQUISITION OR DISPOSITION OF ASSETS
On July 7, 1998, Dexter Corporation ("Registrant") announced its intention to
sell its Packaging Coatings business, including Dexter SAS, its French
industrial coatings subsidiary (together herein referred to as the "Business").
On August 21, 1998, Dexter Corporation entered into a purchase and sale
agreement ("Agreement") to sell certain assets and stock of the Business to The
Valspar Corporation ("Buyer"), which agreement was amended on February 26, 1999.
Dexter's Packaging Coatings business manufactures a range of products serving
the beer, beverage and food can, aerosol and tube markets. The transaction was
completed on February 26, 1999. The Business had combined 1998 sales of
approximately $212 million.
In accordance with the Agreement, the Buyer paid to the Registrant, on the
closing date, $224.5 million in cash in consideration of the sale of certain
assets and stock of the Business and for a noncompete agreement. The Agreement
provides that the purchase price is subject to an adjustment for any increase or
decrease in the amount of net assets acquired on the closing date.
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ITEM 7 - FINANCIAL STATEMENTS AND EXHIBITS
(a) Financial Statements of Business Acquired.
Not applicable
(b) Pro Forma Financial Information
The following unaudited pro forma condensed consolidated financial statements
are filed with this report:
Pro Forma Condensed Consolidated Statement of Financial Position at December 31,
1998
Pro Forma Condensed Consolidated Statement of Income for the Year ended December
31, 1998
The unaudited Pro Forma Condensed Consolidated Statement of Financial Position
of the Registrant at December 31, 1998 reflects the financial position of the
Registrant as if the disposition of the assets discussed in Item 2 took place on
December 31, 1998. The unaudited Pro Forma Condensed Consolidated Statement of
Income for the fiscal year ended December 31, 1998 assumes that the disposition
occurred on January 1, 1998.
These unaudited pro forma condensed consolidated financial statements are based
on available information and certain assumptions that the Registrant believes
are reasonable. The pro forma adjustments are based on preliminary information
and are subject to adjustments for actual information related to the sale of the
Business. These pro forma financial statements are presented for illustrative
purposes only. They do not purport to be indicative of the results of operations
which actually would have resulted had the divestiture occurred on the dates
indicated or which may result in the future. The Registrant believes it has
utilized reasonable methods to conform the basis of presentation.
The unaudited pro forma condensed consolidated financial statements should be
read in conjunction with the Consolidated Financial Statements and related notes
of Dexter Corporation (file no. 1-5542) for the year ended December 31, 1998
which have been filed on Form 10-K on March 9, 1999, pursuant to section 13 or
15(d) of the Securities Exchange Act of 1934, and which are incorporated herein
by reference.
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(c) Exhibits
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No. Description
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10 Dexter Coatings Business Purchase
and Sale Agreement dated
August 21, 1998, between
Dexter Corporation and The Valspar
Corporation
10A First Amendment to Dexter Coatings
Business Purchase and Sale Agreement
dated February 26, 1999
23 Consent of Independent Public Accountants
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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 thereunto duly authorized.
DEXTER CORPORATION
(Registrant)
Date March 15, 1999 /s/ Kathleen Burdett
.............. ..................................
Kathleen Burdett
Vice President and
Chief Financial Officer
(Principal Financial Officer)
(Principal Accounting Officer)
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INDEX TO FINANCIAL STATEMENTS AND EXHIBITS
Financial Statements Page
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Pro Forma Condensed Consolidated Statement of Financial 7
Position at December 31, 1998 (unaudited)
Pro Forma Condensed Consolidated Statement of Income 8
For the Year Ended December 31, 1998 (unaudited)
Exhibit No. Description Page
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10 Dexter Coatings Business Purchase 9 - 62
and Sale Agreement dated
August 21, 1998, between
Dexter Corporation and The Valspar
Corporation
10A First Amendment to Dexter Coatings 63 - 64
Business Purchase and Sale Agreement
dated February 26, 1999
23 Consent of Independent Public Accountants 65
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PRO FORMA FINANCIAL INFORMATION
DEXTER CORPORATION
PRO FORMA CONDENSED CONSOLIDATED
STATEMENT OF FINANCIAL POSITION AT DECEMBER 31, 1998
(000) UNAUDITED
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Pro Forma Adjustments
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In thousands of dollars HISTORICAL PRO FORMA
(except per share amounts) 12/31/98 Business (a) Other 12/31/98
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ASSETS
Cash and short-term securities $ 111,049 $ (7,832) $ 103,217
Accounts receivable, net 203,872 (46,522) 157,350
Inventories
Materials and supplies 65,180 (8,863) 56,319
In process and finished 129,175 (11,310) 117,865
LIFO reserve (17,388) 2,069 (15,319)
------------------- ----------------- ------------------ -----------------
176,967 (18,104) 158,863
Prepaid and deferred expenses 25,642 (1,688) $(1,639) (b) 22,315
------------------- ----------------- ------------------ -----------------
Total current assets 517,530 (74,146) (1,639) 441,745
Property, plant and equipment, at cost, net 360,456 (44,018) 316,438
Excess of cost over net assets of
businesses acquired 156,989 (33,391) 123,598
Patents, technology, trademarks, and covenants 118,152 (1,303) 116,849
Other assets 55,241 (1,530) (566) (b) 53,145
------------------- ----------------- ------------------ -----------------
$1,208,368 $(154,388) $(2,205) $1,051,775
=================== ================= ================== =================
LIABILITIES & SHAREHOLDERS' EQUITY
Short-term debt $ 39,810 $(30,000) (c) $ 9,810
Current installments of long-term debt 17,230 17,230
Accounts payable 91,718 $ (24,633) 67,085
Accrued liabilities and taxes 95,427 (9,713) 4,369 (d) 127,513
37,430 (e)
Dividends payable 5,989 5,989
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Total current liabilities 250,174 (34,346) 11,799 227,627
Long-term debt 382,163 (194,507) (f) 187,656
Deferred items 36,160 (6,245) 8,100 (g) 38,015
Long-term deferred income taxes 53,481 (8,189) (h) 45,292
Long-term environmental reserves 13,501 13,501
Minority interests 84,340 (1,370) 82,970
Shareholders' equity
Common stock and paid-in capital 40,255 40,255
Retained earnings 418,074 (112,925) 180,592 485,741
Treasury stock (51,512) (51,512)
Accumulated other comprehensive
income (18,268) 498 (17,770)
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Total shareholders' equity 388,549 (112,427) 180,592 456,714
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$1,208,368 $(154,388) $(2,205) $1,051,775
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EQUITY PER SHARE $16.86 $19.82
(a) To eliminate the assets and liabilities of the Business divested which
were included in the Statement of Financial Position as of December 31,
1998.
(b) To adjust current and non-current deferred tax assets as a result of
the sale of the Business.
(c) To reflect proceeds from the sale of the Business applied to short-term
debt.
(d) To reflect the current portion of a noncompete agreement, and
additional accrued expenses associated with the sale of the Business.
(e) To adjust accrued taxes as a result of the sale of the Business.
(f) To reflect proceeds from the sale of the Business applied to long-term
debt.
(g) To reflect the long-term portion of a noncompete agreement.
(h) To adjust long-term deferred taxes as a result of the sale of the
Business.
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PRO FORMA FINANCIAL INFORMATION
DEXTER CORPORATION
PRO FORMA CONDENSED CONSOLIDATED STATEMENT OF INCOME
FOR THE TWELVE MONTHS ENDED DECEMBER 31, 1998
(000)
(UNAUDITED)
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Pro Forma Adjustments
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In thousands of dollars HISTORICAL PRO FORMA
(except per share amounts) 12/31/98 Business (a) Other 12/31/98
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REVENUES
Net sales $1,168,037 $(212,273) $955,764
Other income 11,418 (558) $10,006 (b) 20,866
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1,179,455 (212,831) 10,006 976,630
EXPENSES
Cost of sales 741,288 (161,156) 580,132
Marketing and administrative 246,911 (28,396) 218,515
Research and development 56,656 (10,689) 45,967
Interest 18,210 (4) (1,728)(c) 16,478
Transaction costs of Life Technologies, Inc. 5,335 5,335
Acquired in-process research
and development costs 24,508 24,508
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INCOME BEFORE TAXES 86,547 (12,586) 11,734 85,695
Income taxes 40,147 (4,405) 4,107 (d) 39,849
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INCOME BEFORE MINORITY INTERESTS 46,400 (8,181) 7,627 45,846
Minority interests 14,696 (464) 14,232
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NET INCOME $ 31,704 $ (7,717) $ 7,627 $ 31,614
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NET INCOME PER SHARE - BASIC $1.38 $1.37
NET INCOME PER SHARE - DILUTED $1.35 $1.35
DIVIDENDS DECLARED PER SHARE $1.02 $1.02
AVERAGE SHARES OUTSTANDING (000) - BASIC 23,007 23,007
AVERAGE SHARES OUTSTANDING (000) - DILUTED 23,186 23,186
(a) To eliminate the pro forma results of the Business for the twelve
months ended December 31, 1998, including the estimated income tax
effect.
(b) To reflect additional investment income from investing the net proceeds
after debt repayment, from the sale of the Business and income from the
noncompete agreement associated with the sale of the Business.
(c) To reflect reduced interest expense resulting from the reduction in
short-term debt and the reduction in long-term debt associated with an
acquisition in December 1998. Additional reductions in long-term debt
and the associated reduction in interest expense are not included in
the pro forma adjustment as there would have been significant
prepayment penalties associated with the repayment of the remaining
long-term debt.
(d) Adjustment to reflect the income tax effect of pro forma adjustments.
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