1
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: November 23, 1998
DOVER CORPORATION
(Exact name of registrant as specified in its charter)
Delaware 53-0257888
(State of Incorporation) (I.R.S. Employer Identification No.)
280 Park Avenue, New York, NY 10017
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code: (212) 922-1640
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ITEM 2 ACQUISITION OR DISPOSITION OF ASSETS
On November 23, 1998, Dover Corporation (the "Company") signed a definitive
purchase agreement (the "Purchase Agreement") with Thyssen Industrie AG and
Thyssen Elevator Holding Corporation (collectively, "Thyssen") pursuant to which
the Company agreed to sell its elevator business operations (the "Elevator
Business") to Thyssen. The Purchase Price for the Elevator Business is
US$1,100,000,000 (the "Purchase Price") plus the sharing of certain expenses
arising out of the transaction. The Purchase Price is payable in cash, with
US$1,080,000,000 payable at the First Tranche Closing and US$20,000,000 payable
at the Second Tranche Closing. The First Tranche Closing (covering primarily the
United States Elevator Business) is scheduled to occur upon clearance of the
transaction by United States regulatory authorities and the Second Tranche
Closing (covering primarily the Canadian Elevator Business) is scheduled to
occur upon clearance of the transaction by Canadian regulatory authorities. The
Purchase Price was determined by negotiation between the parties. This sale will
terminate the Company's plan, announced on May 8, 1998, to spin off its Elevator
Business to its stockholders.
ITEM 7. FINANCIAL STATEMENTS, PRO FORMA FINANCIAL INFORMATION AND EXHIBITS
(b) Pro forma Condensed Consolidated Financial Information (Unaudited)
The following unaudited pro forma financial information is filed as
part of this report and is set forth in the pages attached hereto:
Pro forma Condensed Consolidated Financial Information.
Pro forma Condensed Consolidated Balance Sheet at September
30, 1998.
Pro forma Condensed Consolidated Statement of Earnings for the
nine months ended September 30, 1998.
Pro forma Condensed Consolidated Statement of Earnings for the
year ended December 31, 1997.
Notes to Pro forma Condensed Consolidated to Financial
Statements.
(c) Exhibits.
The following is a complete list of Exhibits filed as part of this report:
Exhibit 2.1 Purchase Agreement dated as of November 23, 1998
by and among Thyssen Industrie AG, Thyssen Elevator
Holding Corporation, as buyers, and Dover
Corporation, as seller (schedules omitted). Schedules
relating to Purchase Price Allocation, U.S. Federal
Income Taxes, Elevator Financial Statements and
Executive Employment Arrangements have been omitted,
but will be furnished supplementary to the Securities
and Exchange Commission upon request.
20 Dover Corporation Press Release dated November 23, 1998.
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DOVER CORPORATION
PRO FORMA CONDENSED CONSOLIDATED FINANCIAL INFORMATION
The following presents unaudited pro forma condensed financial information of
the Company, as adjusted to give effect to the sale of all of its elevator
business ("Divested Companies") to Thyssen Industrie AG, the receipt of sale
proceeds and retirement of short term debt. The financial information is
presented as of the beginning of the earliest period presented for statements of
earnings purposes and as of the end of the period presented for balance sheet
purposes. The historical financial information for Divested Companies has been
derived from the historical financial statements of the Company and is intended
only for presentation of the Company's pro forma financial information. This
data is presented for illustrative purposes only and is not necessarily
indicative of the financial position or results of operations of the Company or
Divested Companies which would have occurred had the sale actually been
consummated as of such dates, nor is this information indicative of the future
financial position or results of operations of the Company or Divested
Companies. The pro forma adjustments are described in the accompanying notes
presented herein.
FORWARD LOOKING STATEMENTS
This Report on Form 8-K contains forward looking statements within the meaning
of the Securities Act of 1933 (as amended) and the Securities Exchange Act of
1934 (as amended). Forward-looking statements are subject to inherent risks and
uncertainties and could be affected by general industry and market conditions
and growth rates, and general domestic and international economic conditions
including interest rate and currency exchange rate fluctuations. In light of
these risks and uncertainties, actual events and results may vary significantly
from those included in or contemplated or implied by such statements. The
Company undertakes no obligation to publicly update or revise any
forward-looking statements, whether as a result of new information, future
events or otherwise.
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DOVER CORPORATION
PRO FORMA CONDENSED CONSOLIDATED BALANCE SHEET (UNAUDITED)
AT SEPTEMBER 30, 1998
(IN THOUSANDS)
Dover Dover
Corporation Elevator Pro Forma Corporation
Assets: Historical Business (1) Adjustments Pro Forma
- --------- ---------- ------------ ----------- ---------
Current Assets:
Cash & cash equivalents $ 92,327 $ 28,488 $1,100,000 (2) $ 732,782
(437,988) (3)
6,931 (5)
Receivables, net of allowance for
doubtful accounts 852,903 201,497 651,406
Inventories 664,860 81,842 583,018
Prepaid expenses 67,440 10,673 5,025 (4) 61,792
------------------------------------------------- ------------
Total current assets 1,677,530 322,500 673,968 2,028,998
------------------------------------------------- ------------
Property, plant & equipment (at cost) 1,409,151 151,331 1,257,820
Accumulated depreciation 775,064 81,853 693,211
------------------------------------------------- ------------
Net property, plant & equipment 634,087 69,478 - 564,609
------------------------------------------------- ------------
Intangible assets, net of amortization 1,473,616 32,461 1,441,155
Other intangible assets 10,368 3,009 7,359
Deferred charges & other assets 52,548 10,833 8,619 (4) 50,334
------------------------------------------------- ------------
$ 3,848,149 $ 438,281 $ 682,587 $4,092,455
================================================= ============
Liabilities:
Current Liabilities
Notes payable $ 437,988 - $(437,988) (3) $ -
Current maturities of long-term debt 861 - 861
Accounts payable 208,139 23,086 185,053
Accrued compensation & employee benefits 161,588 27,340 134,248
Accrued insurance 120,915 75,611 45,304
Other accrued expenses 267,688 49,903 45,000 (9) 262,785
Income taxes 1,226 - 271,463 (8) 277,714
5,025 (6)
------------------------------------------------- ------------
Total current liabilities 1,198,405 175,940 (116,500) 905,965
------------------------------------------------- ------------
Long-term debt 611,310 611,310
Payable to Dover Corporation 20,575 13,644 (4) -
6,931 (5)
Deferred taxes 40,149 - 8,619 (6) 48,768
Deferred compensation 81,069 15,795 65,274
Stockholders' equity:
Common stock 235,492 235,492
Subsidiary common stock 200 200 (1)
Additional paid-in surplus 17,149 17,149
Subsidiary additional paid-in surplus 2,425 2,425 (1)
Cumulative translation adjustments (22,808) (12,124) (10,684)
Unrealized holding gains (losses) 44 - 44
------------------------------------------------- ------------
Accumulated other comprehensive earnings (22,764) (12,124) - (10,640)
Retained earnings 1,921,527 531,798 (10) 2,453,325
Subsidiary Retained earnings 235,470 235,470 (1)
Less: Treasury stock 234,188 - 234,188
------------------------------------------------- ------------
Total stockholders' equity 1,917,216 225,971 769,893 2,461,138
------------------------------------------------- ------------
$ 3,848,149 $ 438,281 $ 682,587 $4,092,455
================================================= ============
See Notes to Pro Forma Condensed Consolidated Financial Statements.
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DOVER CORPORATION
PRO FORMA CONDENSED CONSOLIDATED STATEMENT OF EARNINGS (UNAUDITED)
FOR THE NINE MONTHS ENDED SEPTEMBER 30, 1998
(IN THOUSANDS, EXCEPT PER SHARE AMOUNTS)
Dover Dover
Corporation Elevator Pro Forma Corporation
Historical Business (11) Adjustments Pro Forma
---------- ------------- ----------- ---------
Net sales $3,614,904 $ 657,532 $ 1,428 (12) $2,958,800
Cost of sales 2,377,105 479,833 1,428 (12) 1,898,700
-------------------------------------------------------- ------------
Gross profit 1,237,799 177,699 - 1,060,100
Selling & administrative expenses 782,698 120,096 662,602
-------------------------------------------------------- ------------
Operating profit 455,101 57,603 - 397,498
-------------------------------------------------------- ------------
Other deductions (income):
Interest expense 43,587 318 (18,067) (13) 25,202
Interest income (13,510) (419) (13,091)
Foreign exchange 1,952 582 1,370
All other, net (6,944) (3,571) (3,373)
-------------------------------------------------------- ------------
Total 25,085 (3,090) (18,067) 10,108
-------------------------------------------------------- ------------
Earnings before taxes on earnings 430,016 60,693 18,067 387,390
Federal & other taxes on earnings 145,995 21,723 6,865 (13) 131,137
-------------------------------------------------------- ------------
Net earnings from continuing operations 284,021 38,970 11,202 256,253
Earnings from discontinued operations 38,970 (14) 38,970
=============================================================================
Net earnings $284,021 $ 38,970 $ 50,172 $ 295,223
=============================================================================
Net earnings per common share - Basic:
- Continuing operations $ 1.27 $ 1.15
- Discontinued operations 0.17
----------- ------------
Net earnings $ 1.27 $ 1.32
=========== ============
Net earnings per common share - Diluted:
- Continuing operations $ 1.27 $ 1.15
- Discontinued operations 0.17
----------- ------------
Net earnings $ 1.27 $ 1.32
=========== ============
Weighted average number or common shares
outstanding during the period:
- Basic 223,028 223,028
- Diluted 224,440 224,440
See Notes to Pro Forma Condensed Consolidated Financial Statements.
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DOVER CORPORATION
PRO FORMA CONDENSED CONSOLIDATED STATEMENT OF EARNINGS (UNAUDITED)
FOR THE YEAR ENDED DECEMBER 31, 1997
(IN THOUSANDS, EXCEPT PER SHARE AMOUNTS)
Dover Disposition of Dover
Corporation Elevator European Pro Forma Corporation
Historical Business (11) Elevator (15) Adjustments Pro Forma
---------- ------------- ----------------- ----------- ---------
Net sales $4,547,656 $ 852,871 $ 27,386 $ 2,170 (12) $ 3,669,569
Cost of sales 2,975,920 613,735 22,087 2,170 (12) 2,342,268
-------------------------------------------- ----------- -----------
Gross profit 1,571,736 239,136 5,299 - 1,327,301
Selling & administrative expenses 959,067 146,544 4,729 807,794
-------------------------------------------- ----------- -----------
Operating profit 612,669 92,592 570 - 519,507
-------------------------------------------- ----------- -----------
Other deductions (income):
Interest expense 46,888 715 394 (24,089) (13) 21,690
Interest income (9,918) (731) (77) (9,110)
Foreign exchange (4,566) 165 295 (5,026)
All other, net (36,571) 415 (32,577) (4,409)
-------------------------------------------- ----------- -----------
Total (4,167) 564 (31,965) (24,089) 3,145
-------------------------------------------- ----------- -----------
Earnings before taxes on earnings 616,836 92,028 32,535 24,089 516,362
Federal & other taxes on earnings 211,405 34,747 9,298 9,154 (13) 176,514
---------------------------------------------------------- ------------
Net earnings from continuing operations 405,431 57,281 23,237 14,935 339,848
Earnings from discontinued operations 816,905 (7) 612,316
(271,463) (8)
(13,644) (6)
80,518 (14)
-------------------------------------------- ----------- ------------
Net earnings $405,431 $57,281 $23,237 $ 627,251 $ 952,164
============================================ =========== ============
Net earnings per common share - Basic:
- Continuing operations $ 1.82 $ 1.52
- Discontinued operations including gain 2.75
----------- ------------
Net earnings $ 1.82 $ 4.27
=========== ============
Net earnings per common share - Diluted:
- Continuing operations $ 1.79 $ 1.50
- Discontinued operations including gain 2.70
----------- ------------
Net earnings $ 1.79 $ 4.20
=========== ============
Weighted average number or common shares
outstanding during the period:
- Basic 223,181 223,181
- Diluted 226,815 226,815
See Notes to Pro Forma Condensed Consolidated Financial Statements.
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DOVER CORPORATION
NOTES TO PRO FORMA CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)
(IN THOUSANDS)
1. - To eliminate the assets, liabilities and equity of divested companies
included in Dover's consolidated balance sheet as of September 30, 1998.
2. - To record the initial purchase price of $1,100,000.
3. - To record use of a portion of net proceeds to reduce short-term debt.
4 - To transfer deferred tax assets to Dover Corporation.
5. - To record payment of Payable to Dover Corporation.
6. - To expense deferred tax assets relating to the sale of divested companies.
7. - To record pre-tax gain on sale of divested companies.
8 - To record tax effect on gain from sale of divested companies at 38% tax
rate; net of 338 (h)(10) tax sharing agreement.
9. - To record transaction expenses.
10 - To record net equity effect of pro forma adjustments.
11.- To eliminate the revenues and expenses of divested companies for the
applicable periods.
12.- To reflect additional sales to divested companies previously recorded as
intercompany.
13.- To record decrease in interest expense at an average interest rate
of 5.5% for the year ended December 31, 1997 and nine months ended
September 30, 1998 resulting from the application of a portion of net
proceeds to reduce short-term debt. The effect of the adjustment was to
increase pro forma continuing diluted E.P.S. $.06 in 1997 and $.05 in 1998.
14 - To add back net earnings of discontinued operations.
15.- Effective June 1997 Dover sold its European elevator operations. The
amounts reported in the disposition column include the results of
operations up to the sale date and the gain on those sales and applicable
taxes.
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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 hereunto duly authorized.
DOVER CORPORATION
Date: December 7, 1998 /s/ George F. Meserole
--------------------------------------------------
George F. Meserole, Vice President, Controller and
Chief Accounting Officer
EXHIBIT INDEX
Exhibit Number Exhibit
- -------------- -------
2.1 Purchase Agreement dated as of November 23, 1998 by
and among Thyssen Industrie AG, Thyssen Elevator
Holding Corporation, as buyers, and Dover
Corporation, as seller. Schedules relating to
Purchase Price Allocation, U.S., Federal Income
Taxes, Elevator Financial Statements and Executive
Employment Arrangements have been omitted, but will
be furnished supplementary to the Securities &
Exchange Commission upon request.
20 Dover Corporation Press Release dated November 23, 1998.