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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) June 17, 1998
JASON INCORPORATED
(Exact name of registrant as specified in its charter)
WISCONSIN 0-16059 39-1756840
(State or other jurisdiction of (Commission (IRS Employer Identification No.)
incorporation or organization) File Number)
411 EAST WISCONSIN AVENUE, SUITE 2500, MILWAUKEE, WI 53202
(Address of principal executive offices)
(414) 277-9300
(Registrant's telephone number, including area code)
-----------------------------------------------------------
(Former name or former address, if changed since last report)
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Item 2. Acquisition or Disposition of Assets.
On June 5, 1998, Jason Incorporated (the "Company") completed the sale of its
Power Generation Products business segment ("Power Generation Products") to a
management led group backed by Saw Mill Capital L.L.C., a closely held merchant
banking group headquartered in Hawthorne, New York for approximately $46 million
in cash. No significant after tax gain or loss is expected on the transaction. A
new entity, Global Energy Equipment Group, L.L.C., was formed by the group to
execute the purchase. The Power Generation Products segment includes Deltak, a
Minneapolis-based manufacturer of waste heat recovery boilers; Braden
Manufacturing, a Tulsa manufacturer of exhaust systems and other ancillary items
for gas turbine power plants; Braden-Europe in Herleen, the Netherlands; a sales
and engineering office in Singapore; and Braden Shielding Systems, a
manufacturer of radio frequency and magnetic shielding systems.
No material relationship existed prior to the sale between Global Energy
Equipment Group, L.L.C. and the registrant or any of its affiliates, any
director or officer of the registrant or any associate of any such director or
officer. After the sale, Larry D. Edwards, former Senior Vice President of Jason
Incorporated will become Chief Executive Officer of Global Energy Equipment
Group, L.L.C. Gary D. Obermiller, former President of Deltak, a Unit of Jason
Incorporated, and Gene F. Schockemoehl, former President of Braden Manufacturing
will have equity interests in Global Energy Equipment Group, L.L.C.
Item 7. Financial Statements and Exhibits
Filed with this Current Report on Form 8-K is pro forma financial information
relative to the divestiture of Power Generation Products required pursuant to
Article 11 of Regulation S-X.
The following financial statements and exhibits are filed as part of this
report:
(b) Pro forma financial information Page No.
(1) Unaudited Pro Forma Condensed --------
Statements of Income 2-6
(2) Unaudited Pro Forma Condensed
Balanced Sheet 7
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Jason Incorporated
Unaudited Pro Forma Condensed
Financial Statements
The following unaudited condensed financial statements present, on a pro forma
basis, the effect of the June 5, 1998 sale by Jason Incorporated (the "Company")
of its Power Generation businesses ("Power Generation Products") to a management
led group backed by Saw Mill Capital L.L.C., a closely held merchant banking
group headquartered in Hawthorne, New York. The unaudited pro forma condensed
financial statements should be read in conjunction with the Company's historical
financial statements.
The pro forma data is presented for informational purposes only and is not
necessarily indicative of the operating results or financial position which
would have occurred had the divestiture of Power Generation Products been
consummated at the beginning of the periods shown, nor is such data necessarily
indicative of future operating results or financial position. There is no
assurance that similar results will be achieved in the future. Allocations and
adjustments have been based on the best information currently available. The
accompanying pro forma condensed balance sheet reflects the use of certain
proceeds from the sale to pay down debt.
The historical statements of income for the fiscal years ended December 26,
1997, December 27, 1996 and December 29, 1995, and for the first fiscal quarters
ended March 27, 1998 and March 28, 1997 have been reclassified to reflect Power
Generation Products as a discontinued operation. The results of discontinued
operations reflect interest expense allocated by the Company. The pro forma
condensed balance sheet has been prepared assuming that the divestiture of Power
Generation Products occurred as of March 27, 1998.
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Jason Incorporated
Unaudited Pro Forma Condensed Statement of Income
For the Year Ended December 29, 1995
(Dollars In Thousands, Except Per Share Data)
Historical
------------------------------------------------------- Jason
Jason Power Generation Incorporated
Incorporated Products Pro Forma
--------------------- --------------------- -----------------------
Net Sales $ 407,412 $ 132,213 $ 275,199
Cost of Sales 319,188 104,531 214,657
--------------------- --------------------- -----------------------
Gross Profit 88,224 27,682 60,542
Selling and Administrative Expenses 58,545 18,112 40,433
--------------------- --------------------- -----------------------
Operating Income 29,679 9,570 20,109
Interest Expense 9,932 2,372 7,560
Other (Income) Expense 185 (40) 225
--------------------- --------------------- -----------------------
Income Before Income Taxes 19,562 7,238 12,324
Provision For Income Taxes 8,031 2,968 5,063
--------------------- --------------------- -----------------------
Income From Continuing
Operations $ 11,531 $ 4,270 $ 7,261
===================== ===================== =======================
Income Per Share From
Continuing Operations
Basic $ 0.57 $ 0.36
===================== =======================
Diluted $ 0.55 $ 0.36
===================== =======================
Average Shares Outstanding
Basic 20,088,784 20,088,784
===================== =======================
Diluted 21,778,724 21,778,724
===================== =======================
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Jason Incorporated
Unaudited Pro Forma Condensed Statement of Income
For the Year Ended December 27, 1996
(Dollars In Thousands, Except Per Share Data)
Historical
-------------------------------------------------- Jason
Jason Power Generation Incorporated
Incorporated Products Pro Forma
---------------------- ----------------- ----------------------
Net Sales $ 443,406 $ 151,730 $ 291,676
Cost of Sales 357,552 131,482 226,070
---------------------- ----------------- ----------------------
Gross Profit 85,854 20,248 65,606
Selling and Administrative Expenses 61,927 18,179 43,748
---------------------- ----------------- ----------------------
Operating Income 23,927 2,069 21,858
Interest Expense 9,624 2,249 7,375
Other (Income) Expense (231) (20) (211)
---------------------- ----------------- ----------------------
Income Before Income Taxes 14,534 (160) 14,694
Provision For Income Taxes 5,668 (62) 5,730
---------------------- ----------------- ----------------------
Income From Continuing
Operations $ 8,866 $ (98) $ 8,964
====================== ================= ======================
Income Per Share From
Continuing Operations
Basic $ 0.44 $ 0.45
====================== ======================
Diluted $ 0.43 $ 0.44
====================== ======================
Average Shares Outstanding
Basic 20,137,132 20,137,132
====================== ======================
Diluted 21,353,556 21,353,556
====================== ======================
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Jason Incorporated
Unaudited Pro Forma Condensed Statement of Income
For the Year Ended December 26, 1997
(Dollars In Thousands, Except Per Share Data)
Historical
------------------------------------------------------- Jason
Jason Power Generation Incorporated
Incorporated Products Pro Forma
------------------------- --------------------- -----------------------
Net Sales $ 481,380 $ 142,714 $ 338,666
Cost of Sales 383,440 118,674 264,766
------------------------- --------------------- -----------------------
Gross Profit 97,940 24,040 73,900
Selling and Administrative Expenses 70,254 19,853 50,401
------------------------- --------------------- -----------------------
Operating Income 27,686 4,187 23,499
Interest Expense 9,392 1,555 7,837
Other (Income) Expense (1,750) (340) (1,410)
------------------------- --------------------- -----------------------
Income Before Income Taxes 20,044 2,972 17,072
Provision For Income Taxes 7,817 1,159 6,658
------------------------- --------------------- -----------------------
Income From Continuing
Operations $ 12,227 $ 1,813 $ 10,414
========================= ===================== =======================
Income Per Share From
Continuing Operations
Basic $ 0.60 $ 0.52
========================= =======================
Diluted $ 0.59 $ 0.51
========================= =======================
Average Shares Outstanding
Basic 20,188,293 20,188,293
========================= =======================
Diluted 21,341,168 21,341,168
========================= =======================
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Jason Incorporated
Unaudited Pro Forma Condensed Statement of Income
For the Quarter Ended March 28, 1997
(Dollars In Thousands, Except Per Share Data)
Historical
----------------------------------------------------- Jason
Jason Power Generation Incorporated
Incorporated Products Pro Forma
-------------------- ------------------- --------------------
Net Sales $ 125,227 $ 40,412 $ 84,815
Cost of Sales 102,055 35,235 66,820
-------------------- ------------------- --------------------
Gross Profit 23,172 5,177 17,995
Selling and Administrative Expenses 17,055 4,777 12,278
-------------------- ------------------- --------------------
Operating Income 6,117 400 5,717
Interest Expense 2,706 453 2,253
Other (Income) Expense (253) (2) (251)
-------------------- ------------------- --------------------
Income Before Income Taxes 3,664 (51) 3,715
Provision For Income Taxes 1,429 (20) 1,449
-------------------- ------------------- --------------------
Income (Loss) From Continuing
Operations $ 2,235 $ (31) $ 2,266
==================== =================== ====================
Income Per Share From
Continuing Operations
Basic $ 0.11 $ 0.11
==================== ====================
Diluted $ 0.11 $ 0.11
==================== ====================
Average Shares Outstanding
Basic 20,159,573 20,159,573
==================== ====================
Diluted 20,520,509 20,520,509
==================== ====================
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Jason Incorporated
Unaudited Pro Forma Condensed Statement of Income
For the Quarter Ended March 27, 1998
(Dollars In Thousands, Except Per Share Data)
Historical
------------------------------------------------------------ Jason
Jason Power Generation Incorporated
Incorporated Products Pro Forma
---------------------- ---------------------- ----------------------
Net Sales $ 120,865 $ 30,200 $ 90,665
Cost of Sales 95,412 23,798 71,614
---------------------- ---------------------- ----------------------
Gross Profit 25,453 6,402 19,051
Selling and Administrative Expenses 18,091 4,830 13,261
---------------------- ---------------------- ----------------------
Operating Income 7,362 1,572 5,790
Interest Expense 1,940 327 1,613
Other (Income) Expense (490) 21 (511)
---------------------- ---------------------- ----------------------
Income Before Income Taxes 5,912 1,224 4,688
Provision For Income Taxes 2,306 477 1,829
---------------------- ---------------------- ----------------------
Income From Continuing
Operations $ 3,606 $ 747 $ 2,859
====================== ====================== ======================
Income Per Share From
Continuing Operations
Basic $ 0.18 $ 0.14
====================== ======================
Diluted $ 0.17 $ 0.14
====================== ======================
Average Shares Outstanding
Basic 20,238,718 20,238,718
====================== ======================
Diluted 22,276,970 22,276,970
====================== ======================
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Jason Incorporated
Unaudited Pro Forma Condensed Balance Sheet
March 27, 1998
(Dollars In Thousands)
Historical
-----------------------------------
Jason Power Generation
Incorporated Products
------------ ----------------
ASSETS
Current Assets
Cash and Cash Equivalents $ 3,064 $ -
Accounts Receivable - Net 74,644 22,187
Inventories 44,659 2,206
Costs And Earnings In Excess Of
Billings On Uncompleted Contracts 13,348 13,348
Deferred Income Taxes 9,142 1,449
Other Current Assets 4,985 170
--------------- --------------
Total Current Assets 149,842 39,360
--------------- --------------
Property, Plant and Equipment
Cost 179,294 18,787
Less - Accumulated Depreciation (81,489) (9,229)
--------------- --------------
Net Property, Plant and Equipment 97,805 9,558
--------------- --------------
Intangible Assets - Net 92,590 20,633
Other Assets 1,589 169
--------------- --------------
$ 341,826 $ 69,720
=============== ==============
LIABILITIES AND SHAREHOLDERS' EQUITY
Current Liabilities
Current Portion of Long-Term Debt $ 28,452 $ -
Accounts Payable 35,214 8,872
Accrued Compensation & Employee Benefits 14,186 2,796
Accrued Warranty 4,791 4,791
Accrued Interest 1,972 -
Accrued Income Taxes & Other Current Liabilities 18,004 2,715
Billings In Excess Of Costs And
Earnings On Uncompleted Contracts 18,375 18,375
--------------- --------------
Total Current Liabilities 120,994 37,549
Revolving Loan 16,667 -
Other Long-Term Debt 71,225 -
Deferred Income Taxes 11,715 -
Other Long-Term Liabilities 4,027 -
Postemployment & Postretirement Health
and Other Benefits 6,358 -
--------------- --------------
Total Liabilities 230,986 37,549
--------------- --------------
Commitments & Contingencies
Shareholders' Equity 110,840 32,171
--------------- --------------
$ 341,826 $ 69,720
=============== ==============
Jason
Pro Forma Incorporated
Adjustments Pro Forma
-------------- ----------------
ASSETS
Current Assets
Cash and Cash Equivalents $ 27,831 (A) $ 30,895
Accounts Receivable - Net - 52,457
Inventories - 42,453
Costs And Earnings In Excess Of
Billings On Uncompleted Contracts - -
Deferred Income Taxes - 7,693
Other Current Assets - 4,815
-------------- ----------------
Total Current Assets 27,831 138,313
-------------- ----------------
Property, Plant and Equipment
Cost - 160,507
Less - Accumulated Depreciation - (72,260)
-------------- ----------------
Net Property, Plant and Equipment - 88,247
-------------- ----------------
Intangible Assets - Net - 71,957
Other Assets - 1,420
-------------- ----------------
$ 27,831 $ 299,937
============== ================
LIABILITIES AND SHAREHOLDERS' EQUITY
Current Liabilities
Current Portion of Long-Term Debt $ - $ 28,452
Accounts Payable - 26,342
Accrued Compensation & Employee Benefits - 11,390
Accrued Warranty - -
Accrued Interest - 1,972
Accrued Income Taxes & Other Current Liabilities 12,327 (C) 27,616
Billings In Excess Of Costs And
Earnings On Uncompleted Contracts - -
-------------- ----------------
Total Current Liabilities 12,327 95,772
Revolving Loan (16,667) (B) -
Other Long-Term Debt - 71,225
Deferred Income Taxes - 11,715
Other Long-Term Liabilities - 4,027
Postemployment & Postretirement Health
and Other Benefits - 6,358
-------------- ----------------
Total Liabilities (4,340) 189,097
-------------- ----------------
Commitments & Contingencies
Shareholders' Equity 32,171 (D) 110,840
-------------- ----------------
$ 27,831 $ 299,937
============== ================
(A) Reflects remaining cash after repayment of amounts outstanding under the
revolving loan facility and transaction related expenses.
(B) Reflects the repayment of borrowings outstanding under the revolving loan
facility.
(C) Reflects estimated tax and continuing contract obligations resulting from
the sale.
(D) Reflects add back of Power Generation Products equity which would have been
eliminated in consolidation.
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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.
JASON INCORPORATED (Registrant)
June 17, 1998 by /s/ Vincent L. Martin
--------------------------
Vincent L. Martin
Chief Executive Officer
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