1
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
Form 8-K/A
Amendment No. 1
To
CURRENT REPORT
PURSUANT TO SECTION 13 OR 15(d) OF
THE SECURITIES EXCHANGE ACT OF 1934
Date of Report (Date of earliest event reported): September 22, 2000
------------------
SYBRON INTERNATIONAL CORPORATION
--------------------------------
(Exact name of registrant as specified in its charter)
Wisconsin 1-11091 22-2849508
--------- ------- ----------
(State or other jurisdiction (Commission File (I.R.S. Employer
of incorporation) Number) Identification No.)
411 East Wisconsin Avenue
Milwaukee, Wisconsin 53202
---------------------------
(Address of principal executive offices) (Zip Code)
(414) 274-6600
--------------
(Registrant's telephone number, including area code)
(Former name or former address, if changed since last report)
2
This amendment is filed to correct an error in the pro forma income tax
provisions for Sybron International Corporation ("Sybron International" or the
"Company") and the portion of the Sybron International consolidated income tax
provision applicable to SDS Holding Co., to be renamed Sybron Dental
Specialties, Inc. ("SDS"), which affects financial information provided by the
Company in connection with its planned spin off of SDS. The correction has no
impact on the Company's consolidated, historical financial statements. The error
affects the Company's pro forma financial statements previously filed in our
Form 8-K dated September 22, 2000, and the Company is making this filing to
correct the pro forma unaudited statements of income for the year ended
September 30, 1999 and the nine months ended June 30, 2000, and the related pro
forma June 30, 2000 balance sheet. The correction represents a reduction in the
pro forma income taxes for Sybron International and, therefore, an increase in
the pro forma net income for the periods presented. The error also affects SDS's
preliminary financial information previously filed on Form 10 via EDGAR on
August 8, 2000. This information will be restated in an amendment to the Form 10
prior to its becoming effective. The correction represents an increase in taxes
for SDS and, therefore, a decrease in net income for the periods presented.
Item 5 of the September 22 8-K is amended as follows:
ITEM 5. OTHER EVENTS.
On April 24, 2000, Sybron International announced its intention to spin
off its dental business as a separate publicly traded company. The spin-off
will be effected by way of a pro rata dividend of the stock of SDS Holding Co.
to the Company's shareholders (the "Distribution"). SDS Holding Co. is a newly
organized Delaware subsidiary of the Company which will be renamed Sybron
Dental Specialties, Inc. ("SDS") in connection with the Distribution. SDS will
own and operate all of our dental group businesses, including those operated by
the subsidiary currently named Sybron Dental Specialties, Inc. This subsidiary
will be renamed Sybron Dental Management, Inc. ("SDM") in connection with the
Distribution, and will become a wholly owned subsidiary of SDS. Following the
Distribution, our shareholders will own shares of both Sybron International and
SDS. SDS will then be an independent public company operating the dental
business, which consists of Sybron International's Professional Dental,
Orthodontics and Infection Control Products business segments (the "Dental
Business"). Sybron International will continue to operate the Company's
laboratory business, which is composed of Sybron International's Labware and
Life Sciences, Clinical and Industrial, Diagnostics and Microbiology, and
Laboratory Equipment business segments (the "Laboratory Business"). As an
independent public company, SDS's stock is expected to trade on the New York
Stock Exchange ("NYSE") under the symbol "SYD". As previously announced, Sybron
International intends to change its name to Apogent Technologies Inc. in
connection with the Distribution. The name change requires shareholder
approval, which the Company will seek at its 2001 annual meeting. The Company
will, however, begin doing business as "Apogent Technologies", and expects its
stock to trade on the NYSE under the symbol "AOT" (instead of its present
symbol "SYB") when the Company's stock becomes elligible for trading separately
from SDS stock in connection with the Distribution.
The Distribution is subject to a number of conditions, including (i)
receipt by the Company of a favorable ruling from the Internal Revenue Service
concerning the tax-free nature of the Distribution, (ii) appropriate stock
market conditions for the Distribution, (iii) obtaining adequate financing for
Sybron International and SDS as independent companies, (iv) completion of
certain internal restructuring steps, including the transfer of SDM and its
dental businesses to SDS, (v) receipt of approval to list SDS's common stock on
the NYSE, (vi) approval by Sybron International's board of directors of the
final terms of the Distribution, and the formal declaration of the Distribution,
and (vii) effectiveness of a registration statement on Form 10 registering the
stock of SDS under the Securities Exchange Act of 1934, including an information
statement that would be sent to the Company's shareholders in connection with
the Distribution.
The Company plans to obtain its financing separately from SDS by
refinancing its current credit facilities. The Company must complete the
refinancing (referred to herein as the "Refinancing") prior to or simultaneously
with the Distribution.
Immediately prior to the Distribution, SDM will pay a dividend (the
"Dividend") to Sybron International which will be used to settle all
intercompany loans and advances and to reflect an allocation of bank debt to
SDS. The allocation of bank debt to SDS is currently expected to be
approximately $375 million, but the actual amount allocated at the time of the
Distribution may be different depending on certain factors including, but not
limited to, SDS's equity at the time of the Distribution.
The following pro forma data gives effect to (1) the Distribution, (2)
the Refinancing and (3) the Dividend.
3
UNAUDITED PRO FORMA CONSOLIDATED FINANCIAL INFORMATION
The following unaudited pro forma consolidated statements of income for
fiscal 1999 and the nine months ended June 30, 2000 give effect to the
Distribution, Refinancing and Dividend as if they had occurred on the
first day of the period being referenced. The unaudited pro forma
consolidated balance sheet data give effect to the Distribution,
Refinancing and Dividend as if they had occurred on June 30, 2000.
The unaudited pro forma consolidated financial statements have been
derived from the historical consolidated financial statements of Sybron
International. The pro forma adjustments, as described in the notes
that follow, are based upon available information and upon certain
assumptions that management believes are reasonable. This information
should be read in conjunction with Sybron International's consolidated
financial statements contained in the Company's 1999 Annual Report on
Form 10-K. The unaudited pro forma consolidated financial statements
are included for comparative purposes only and do not purport to be
indicative of the results of Sybron International in the future or what
the financial position and results of operations would have been had
Sybron International operated without the Dental Business during the
periods shown.
SYBRON INTERNATIONAL CORPORATION AND SUBSIDIARIES
PRO FORMA CONSOLIDATED STATEMENTS OF INCOME
FOR THE YEAR ENDED SEPTEMBER 30, 1999
(IN THOUSANDS, EXCEPT PER SHARE DATA)
(UNAUDITED)
PRO FORMA ADJUSTMENTS
---------------------
ELIMINATION OF
THE DENTAL PRO FORMA
HISTORICAL BUSINESS (a)(k) OTHER 1999 (k)
---------- --------------- ----- ---------
Net sales ........................................................ $ 1,103,213 $ (388,176) $ -- $ 715,037
Cost of sales:
Cost of product sold ........................................... 534,059 (162,448) 917(b) 372,528
Depreciation of purchase accounting adjustments ................ 659 (108) -- 551
----------- ----------- ----------- -----------
Total cost of sales .............................................. 534,718 (162,556) 917 373,079
----------- ----------- ----------- -----------
Gross profit ..................................................... 568,495 (225,620) (917) 341,958
----------- ----------- ----------- -----------
Selling, general and administrative expenses ..................... 270,304 (118,193) (4,228)(c) 147,883
Sybron International charges ..................................... -- (4,228) 4,228 (c) --
Merger, transaction and integration expenses ..................... 2,569 (2,569) -- --
Restructuring charge ............................................. (932) 1,177 -- 245
Depreciation and amortization of purchase accounting adjustments.. 32,205 (7,501) -- 24,704
----------- ----------- ----------- -----------
Total selling, general and administrative expenses ............... 304,146 (131,314) -- 172,832
----------- ----------- ----------- -----------
Operating income ................................................. 264,349 (94,306) (917) 169,126
----------- ----------- ----------- -----------
Other income (expense):
Interest expense ............................................... (57,147) 17,074 504 (d) (39,569)
Interest income: Sybron International .......................... -- (1,151) 1,151 (e) --
Amortization of deferred financing fees ........................ (378) 154 (226)(f) (450)
Other, net ..................................................... (371) 85 -- (286)
----------- ----------- ----------- -----------
Income from continuing operations before income taxes ........... 206,453 (78,144) 512 128,821
Income taxes ..................................................... 81,198 (30,850) 205 (g) 50,553
----------- ----------- ----------- -----------
Income from continuing operations ................................ 125,255 (47,294) 307 78,268
=========== =========== =========== ===========
Basic earnings per share ......................................... $ 1.21 $ .76
=========== ===========
Diluted earnings per share ....................................... $ 1.18 $ .74
=========== ===========
Basic shares outstanding ......................................... 103,412 -- -- 103,412
Effect of assumed conversion of employee stock options ........... 3,158 (930)(h) -- 2,228
----------- ---------- ----------- -----------
Diluted shares outstanding ....................................... 106,570 (930) -- 105,640
=========== ========== =========== ===========
See accompanying notes to pro forma consolidated financial statements.
4
SYBRON INTERNATIONAL CORPORATION AND SUBSIDIARIES
PRO FORMA CONSOLIDATED STATEMENTS OF INCOME
FOR THE NINE MONTHS ENDED JUNE 30, 2000
(IN THOUSANDS, EXCEPT PER SHARE DATA)
(UNAUDITED)
PRO FORMA ADJUSTMENTS
---------------------
ELIMINATION OF
---------------
THE DENTAL PRO FORMA
----------- JUNE 30,
HISTORICAL BUSINESS(a)(k) OTHER 2000 (k)
---------- -------------- ----- --------
Net sales ........................................................ $ 941,651 $(306,665) $ -- $ 634,986
Cost of sales:
Cost of product sold ........................................... 450,058 (128,133) -- 321,925
Depreciation of purchase accounting adjustments ................ 476 (80) -- 396
--------- --------- --------- -----------
Total cost of sales .............................................. 450,534 (128,213) -- 322,321
--------- --------- --------- -----------
Gross profit ..................................................... 491,117 (178,452) 312,665
--------- --------- --------- -----------
Selling, general and administrative expenses ..................... 231,333 (92,542) (2,936)(c) 135,855
Sybron International charges ..................................... -- (2,936) 2,936 (c) --
Depreciation and amortization of purchase accounting adjustments.. 32,838 (6,260) -- 26,578
--------- --------- --------- -----------
Total selling, general and administrative expenses ............... 264,171 (101,738) -- 162,433
--------- --------- --------- -----------
Operating income ................................................. 226,946 (76,714) -- 150,232
--------- --------- --------- -----------
Other income (expense):
Interest expense ............................................... (54,951) 18,800 504 (d) (35,647)
Interest income: Sybron International .......................... -- (564) 564 (e) --
Amortization of deferred financing fees ........................ (608) 210 (61)(f) (459)
Other, net ..................................................... 1,417 (240) -- 1,177
--------- --------- --------- -----------
Income from continuing operations before income taxes ............ 172,804 (58,508) 1,007 115,303
Income taxes ..................................................... 68,187 (23,635) 403 (g) 44,955
--------- --------- --------- -----------
Income from continuing operations ................................ 104,617 (34,873) 604 70,348
========= ========= ========= ===========
Basic earnings per share ......................................... $ 1.00 $ .67
========= ===========
Diluted earnings per share........................................ $ .98 $ .66
========= ===========
Basic shares outstanding.......................................... 104,363 -- 104,363
Effect of assumed conversion of employee stock options............ 2,589 (578)(h) 2,011
--------- --------- ----------
Diluted shares outstanding........................................ 106,952 (578) 106,374
========= ========== ==========
See accompanying notes to pro forma consolidated financial statements.
5
SYBRON INTERNATIONAL CORPORATION AND SUBSIDIARIES
PRO FORMA CONSOLIDATED BALANCE SHEET
JUNE 30, 2000
(IN THOUSANDS)
(UNAUDITED)
PRO FORMA ADJUSTMENTS
---------------------
ELIMINATION OF
--------------
THE DENTAL
---------- PRO FORMA
HISTORICAL BUSINESS(a) OTHER JUNE 30, 2000
---------- ----------- ----- -------------
Current assets:
Cash and cash equivalents .................................. $ 17,901 $ (5,672) $ -- $ 12,229
Accounts receivable, net ................................... 236,397 (75,451) -- 160,946
Inventories ................................................ 231,419 (84,128) -- 147,291
Deferred income taxes ...................................... 24,999 (4,638) -- 20,361
Prepaid expenses and other current assets .................. 26,452 (8,999) -- 17,453
---------- ---------- ---------- ----------
Total current assets ............................... 537,168 (178,888) -- 358,280
---------- ---------- ---------- ----------
Available for sale security .................................. 52,150 -- -- 52,150
Advances to Sybron International ............................. -- (112,951) 112,951(i) --
Property, plant and equipment, net ........................... 255,657 (52,518) -- 203,139
Intangible assets ............................................ 1,155,009 (221,277) -- 933,732
Deferred income taxes ........................................ 12,602 (5,200) -- 7,402
Other assets ................................................. 10,661 (6,359) -- 4,302
---------- ---------- ---------- ----------
Total assets ....................................... $2,023,247 (577,193) $ 112,951 $1,559,005
========== ========== ========== ==========
Current liabilities:
Accounts payable ........................................... $ 52,349 (8,751) $ -- $ 43,598
Current portion of long-term debt .......................... 4,118 (634) (450)(i) 3,034
Income taxes payable ....................................... 21,679 (4,217) -- 17,462
Accrued payroll and employee benefits ...................... 44,261 (14,742) -- 29,519
Deferred income taxes ...................................... 3,819 (3,342) -- 477
Other current liabilities .................................. 31,984 (8,070) -- 23,914
---------- ---------- ---------- ----------
Total current liabilities .......................... 158,210 (39,756) (450) 118,004
---------- ---------- ---------- ----------
Long-term debt ............................................... 972,418 (308,937) (73,478) 590,003
Securities lending agreement ................................. 52,150 -- -- 52,150
Deferred income taxes ........................................ 98,145 (14,525) -- 83,620
Other liabilities ............................................ 9,532 (8,563) -- 969
Commitments and contingent liabilities
Shareholders' equity ....................................... 732,792 (205,412) 186,879(i) 714,259
---------- ---------- ---------- ----------
Total liabilities and shareholders' equity ......... $2,023,247 (577,193) $ 112,951 $1,559,005
========== ========== ========== ==========
See accompanying notes to pro forma consolidated financial statements.
6
SYBRON INTERNATIONAL CORPORATION AND SUBSIDIARIES
NOTES TO PRO FORMA CONSOLIDATED FINANCIAL STATEMENTS
(a) Reflects the Distribution.
(b) Reflects an adjustment to the historical cost of sales for the effect
of capitalizing variances in inventories in 1999 and expensing such
variances in prior years. Amounts were recorded in the separate
financial statements of Sybron Dental Specialties, Inc. and Affiliates
but not in the Sybron International financial statements due to
immateriality.
(c) To remove the allocation of corporate expenses that were previously
incurred on behalf of and charged to the Dental Business. Expense
reductions from the elimination of the expenses incurred on behalf of
the Dental Business are expected to approximately equal the amounts
historically charged to the Dental Business.
(d) To record interest expense savings on the funds assumed to be borrowed
after the Distribution. In the historical periods ended September 30,
1999 and June 30, 2000, interest was allocated to the Dental Business
based upon borrowings by the subsidiaries under the Company's credit
facilities. In connection with the Distribution, the debt of Sybron
International (inclusive of debt previously allocated to the Dental
Business) is expected to decrease by $382,415 at both September 30,
1999 and June 30, 2000, respectively, as a result of the Dividend.
Weighted-average interest rates for the Refinancing were assumed to be
7.9% in both fiscal 1999 and the nine months ended June 30, 2000. These
rates are estimates, but actual rates ultimately paid by Sybron
International may be different and will depend on a number of factors.
These factors include market conditions at the time of the Distribution
and thereafter, the Company's credit profile, the type of financing
employed by the Company, and the Company's financial performance. Pro
forma weighted average bank debt at Sybron International for the year
ended September 30, 1999 and the nine-month period ended June 30, 2000
was $412.4 million and $552.0 million, respectively. The following
table reflects the effect on the pro forma combined statements of
income of an increase or decrease of 10% from the current estimated
interest rates on an annualized basis.
Year ended Nine months
September 30, 1999 ended June 30, 2000
------------------ -------------------
(In thousands, except share data)
Change in income from continuing operations before taxes $3,258 $3,270
====== ======
Change in income from continuing operations $1,954 $1,962
====== ======
Change in pro forma diluted earnings per share
from continuing operations $ .02 $ .02
====== ======
(e) To eliminate intercompany interest paid to the Dental Business.
(f) To record increase in deferred financing fees as a result of the
Refinancing.
(g) To record income tax expenses or benefits relating to (b), (c), (d),
(e) and (f) above.
(h) To reflect common stock equivalents attributable to SDS.
7
(i) To record the Dividend from the Dental Business to Sybron
International, anticipated to aggregate $186.9 million, which will
be applied to settle all intercompany loans and advances, and to
allocate to the Dental Business $375.0 million of Sybron
International's bank debt, as follows:
Pro Forma
---------
Historical Adjustments Pro Forma
---------- ----------- ---------
( In thousands)
Current portion of bank term loan $ 450 $ (450) $ --
Other current debt 3,668 (634) 3,034
--------- --------- ---------
Total current portion of long-term debt 4,118 (1,084) 3,034
========= ========= =========
Long term portion of bank term loan $ 569,891 $(569,891) $ --
Revolving bank credit facility 352,000 (352,000) --
New credit facility -- 550,579 550,579
Other long-term debt 50,527 (11,103) 39,424
--------- --------- ---------
Total long-term debt $ 972,418 $(382,415) $ 590,003
========= ========= =========
Although the bank debt allocated to the Dental Business is currently
expected to be approximately $375 million, the actual amount allocated
at the time of the Distribution may be different depending on certain
factors including, but not limited to, the Dental Business's equity at
the time of the Distribution.
(j) In connection with the Distribution, Sybron estimates fees and
expenses not included in these pro forma financial statements to
approximate $6.0 million.
(k) This financial information contains the correction of errors
associated with the calculation of income tax expense in the year
ended September 30, 1999 and the nine-months ended June 30, 2000.
Subsequent to the issuance of this financial information, an
error was discovered in the calculation of the portion of
consolidated income taxes attributable to SDS and to Apogent.
There is no effect on the consolidated financial statements of
Sybron International Corporation. As a result of this error, we
have restated the following:
1. The pro forma consolidated statement of income for the year
ended September 30, 1999, (in thousands):
AS ORIGINALLY REPORTED: PRO FORMA ADJUSTMENTS
---------------------
ELIMINATION OF
THE DENTAL PRO FORMA
HISTORICAL BUSINESS(a) OTHER 1999
---------- ----------- ------- ---------
Income taxes .......................... 81,198 (28,370) 205(g) 53,033
---------- ----------- ------- ---------
Income from continuing operations ..... 125,255 (49,774) 307 75,788
========== =========== ======= =========
Basic earnings per share ............ $ 1.21 $ .73
========== =========
Diluted earnings per share .......... $ 1.18 $ .72
========== =========
RESTATED: PRO FORMA ADJUSTMENTS
---------------------
ELIMINATION OF
THE DENTAL PRO FORMA
HISTORICAL BUSINESS (a) OTHER 1999
---------- ------------ ------- --------
Income taxes ......................... 81,198 (30,850) 205(g) 50,553
---------- ------------ ------ ---------
Income from continuing operations .... 125,255 (47,294) 307 78,268
========== ============ ====== =========
Basic earnings per share ............. $ 1.21 $ .76
========== =========
Diluted earnings per share ........... $ 1.18 $ .74
========== =========
2. The pro forma consolidated statement of income for the
nine-months ended June 30, 2000, (in thousands):
8
AS ORIGINALLY REPORTED: PRO FORMA ADJUSTMENTS
---------------------
ELIMINATION OF
THE DENTAL PRO FORMA
HISTORICAL BUSINESS (a) OTHER 1999
---------- ------------- ---------- ---------
Income taxes ......................................... 68,187 (21,557) 452 (g) 47,082
---------- ------------- ---------- ---------
Income from continuing operations .................... 104,617 (36,951) 677 68,343
========== ============= ========== =========
Basic earnings per share ............................. $ 1.00 $ .65
========== =========
Diluted earnings per share ........................... $ .98 $ .64
========== =========
RESTATED: PRO FORMA ADJUSTMENTS
---------------------
ELIMINATION OF
THE DENTAL PRO FORMA
HISTORICAL BUSINESS (a) OTHER 1999
---------- ------------ ---------- ---------
Income taxes ......................................... 68,187 (23,635) 403(g) 44,955
---------- ------------- ---------- ---------
Income from continuing operations .................... 104,617 (34,873) 604 70,348
========== ============= ========== =========
Basic earnings per share ............................. $ 1.00 $ .67
========== =========
Diluted earnings per share ........................... $ .98 $ .66
========== =========
3. The pro forma consolidated balance sheet at June 30, 2000, (in
thousands):
PRO FORMA ADJUSTMENTS
---------------------
ELIMINATION OF
--------------
THE DENTAL
---------- PRO FORMA
HISTORICAL BUSINESS(a) OTHER JUNE 30, 2000
----------- ----------- ----------- -------------
AS ORIGINALLY REPORTED:
Assets:
Long term deferred income taxes................. 12,602 (3,394) -- 9,208
Total assets.................................... $ 2,023,247 (586,692) $ 124,256 $ 1,560,811
=========== =========== =========== ===========
Liabilities:
Current deferred income taxes................... 3,819 (3,470) -- 349
Total current liabilities....................... 158,210 (39,884) (450) 117,876
----------- ----------- ----------- -----------
Shareholders' equity....................... 732,792 (214,783) 198,184 (i) 716,193
----------- ----------- ----------- -----------
Total liabilities and shareholders' equity...... $ 2,023,247 (586,692) $ 124,256 $ 1,560,811
=========== =========== =========== ===========
PRO FORMA ADJUSTMENTS
---------------------
ELIMINATION OF
--------------
THE DENTAL
---------- PRO FORMA
RESTATED: HISTORICAL BUSINESS(a) OTHER JUNE 30, 2000
----------- ----------- ----------- -------------
Assets:
Deferred income taxes........................... 12,602 (5,200) -- 7,402
Total assets.................................... $ 2,023,247 (577,193) $ 112,951 $ 1,559,005
=========== ============ =========== ===========
Liabilities:
Deferred income taxes........................... 3,819 (3,342) -- 477
Total current liabilities....................... 158,210 (39,756) (450) 118,004
----------- ----------- ----------- -----------
Shareholders' equity....................... 732,792 (205,412) 186,879 (i) 714,259
----------- ----------- ----------- ------------
Total liabilities and shareholders' equity..... $ 2,023,247 (577,193) $ 112,951 $ 1,559,005
=========== =========== =========== ===========
9
SIGNATURE
Pursuant to the requirements of the Securities Exchange Act of 1934,
the Registrant has duly caused this amendment to be signed on its behalf by the
undersigned thereunto duly authorized.
SYBRON INTERNATIONAL CORPORATION
Date: October 10, 2000 By: /s/Dennis Brown
---------------------------------------
Dennis Brown
Vice President - Finance, Chief
Financial Officer & Treasurer