SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 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): January 25, 1999
BE AEROSPACE, INC.
(Exact name of registrant as specified in charter)
DELAWARE 0-18348 06-1209796
(State or other (Commission File Number) (I.R.S. Employer
jurisdiction Identification No.)
of incorporation)
1400 Corporate Center Way, Wellington, Florida 33414
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code: (561) 791-5000
Exhibit Index Appears on page [___].
Item 2. Acquisition or Disposition of Assets.
B/E Aerospace Inc. (the "Company") announced on January 25, 1999 that it
has signed a definitive agreement to sell a 51% interest in its In-Flight
Entertainment, LLC subsidiary ("IFE") to Sextant Avionique, Inc., a wholly owned
subsidiary of Sextant Avionique, S.A. ("Sextant"). Sextant, which supplies
complete avionics systems for both military and civil aircraft, is one of the
world's leading suppliers of aircraft avionics systems and the largest supplier
of avionics systems to Airbus Industrie.
Terms of the agreement provide for Sextant to acquire a 51% interest in
IFE for an initial cash purchase price of $62 million. The final purchase price
for the 51% interest will be determined on the basis of operating results for
the joint venture over its initial two years of operations, and could range from
$47 million to $87 million. Completion of the transaction, which is subject to
regulatory approvals, is expected by February 28, 1999. The Company intends to
use 100% of the proceeds from this transaction to reduce its bank borrowings.
The new company, named Sextant In-flight Systems, LLC, will be
headquartered in B/E Aerospace's existing 120,000-sq. ft. state-of-the-art
facility in Irvine, California. The in-flight entertainment products
manufactured, tested, and certified at this facility include the MDDS
(Multimedia Digital Distribution System) advanced interactive individual-
passenger video entertainment systems; the BE2000 multi-channel, distributed
individual-passenger video systems; passenger control units (noise canceling,
digital, analog, and telephone); and individual-passenger audio systems. In
addition, the company manufactures, in conjunction with Harris Corporation, a
direct broadcast satellite television system called LiveTV(TM).
Item 5. Other Events.
On January 25, 1999, the Company announced that it will take a charge to
restructure its operations, including the consolidation of a number of
facilities, a substantial reduction in employment and rationalization of its
product offerings. The cost of restructuring, together with costs to rationalize
its product offerings and costs associated with new product introductions, the
latter of which are expected to decline over the course of the next several
quarters, is expected to be approximately $70 million. The Company also
announced that a new accounting standard by the American Institute of Certified
Public Accountants, which requires start-up and organization costs associated
with acquisitions to be expensed rather than amortized, and which is effective
for years beginning after December 15, 1998, will be adopted as of the beginning
of the Company's current fiscal year.
The Company's restructuring plans provide for the elimination of seven
manufacturing sites and an estimated net reduction of 500 employees (or
eight-percent of the Company's workforce) over the next 12 months. The Company
also anticipates the successful completion of business process reengineering and
Y2K system compliance initiatives that have been refocused to include all
acquisitions. The scope of these efforts builds in top-to-bottom revamping of
operating practices, systems and personnel, and targets the incorporation of
industry-wide "best practices" and lean manufacturing concepts at all B/E
operations, including the recent acquisitions. The costs of reengineering and
certain Y2K initiatives will be expensed during the periods in which they are
incurred.
Item 7. Financial Statements and Exhibits.
(c) Exhibits.
Exhibit No. Description
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99.1 Press Release, dated January 25, 1999.
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.
BE AEROSPACE, INC.
By: /s/ Thomas P. McCaffrey
-----------------------------
Name: Thomas P. McCaffrey
Title: Corporate Senior Vice President of
Administration and Chief Financial Officer
EXHIBIT INDEX
Exhibit No. Description of Exhibits Page
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99.1 Press Release, dated January 25, 1999.