1
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 8-K/A
CURRENT REPORT
Pursuant to Section 13 or 15 (d)
of the Securities Exchange Act of 1934
Date of Report (Date of earliest event reported): November 18, 1998
Commission file number 0-23802
-------
MOTIVEPOWER INDUSTRIES, INC.
----------------------------
(Exact name of registrant as specified in its charter)
DELAWARE 82-0461010
-------- ----------
(State or other jurisdiction (I.R.S. Employer
of incorporation) Identification Number)
Two Gateway Center, 14th Floor, Pittsburgh, Pennsylvania 15222
--------------------------------------------------------------
(Address of principal executive offices; zip code)
(412) 201-1101
--------------
(Registrant's Telephone No., including area code)
2
ITEM 2. ACQUISITION OR DISPOSITION OF ASSETS
On November 18, 1998, MotivePower Industries, Inc. (the Company)
announced the acquisition, through MotivePower Investments Limited, of Young
Radiator Company (Young), a privately held manufacturer of heat transfer
products, for $79.3 million in cash, which considers the Company acquiring cash
and investments of approximately $11.0 million. The Company acquired 100% of the
common stock of Young. The acquisition agreement was negotiated between the
Company and Fred Young, the owner of the majority of the Young shares issued and
outstanding. The Company plans to file an IRC Section 338(h)(10) election. The
Company utilized borrowing capacity under its domestic revolver to fund the
acquisition.
Founded in 1927, Young is a leading manufacturer of radiators, air
coolers and heat exchange systems for rail and industrial power-related markets.
Young's products are used in locomotives, construction and mining vehicles,
diesel and gas engines, military vehicles, stationary generator sets and
industrial, off-the-road equipment. Young recorded net sales of $48.2 million
for its fiscal year ended December 31, 1997 with assets of $35.4 million and
stockholders' equity of $28.9 million. Young has approximately 440 employees.
Young's assets included owned real property, machinery, and office
equipment located in Racine, WI (approximately 235,000 square feet), Lexington,
TN (approximately 180,000 square feet) and Centerville, IA (approximately
110,000 square feet). Young utilized such assets in the manufacturing and sale
of its product offerings. It is the Company's current intention that the
acquired assets will continue in that same use while the Company seeks synergies
with its other operations. The transaction will be accounted for as a purchase
in accordance with Accounting Principles Board Opinion No. 16, "Business
Combinations."
ITEM 7. FINANCIAL STATEMENTS AND EXHIBITS
(a) Financial statements of businesses acquired.
(1) Audited balance sheet of Young Radiator Company as of December
31, 1997 and the related statements of income, changes in
shareholders' investment, and cash flows for the year then
ended.
(b) Pro forma financial information.
(1) Pro forma financial data for the year ended December 31, 1997
and the nine months ended September 30, 1998, reflecting the
acquisition by the Company of Young Radiator Company.
(c) Exhibits
(2) Stock Purchase Agreement by and among Fred M. Young, Jr.;
Sandra H. Young; Fred M. Young, Jr., custodian for Ryan S.
Young under the Wisconsin Uniform Gifts to Minors Act; Fred M.
Young, Jr., trustee of the Ariel H. Young irrevocable trust of
1996 and MotivePower Industries, Inc. dated September 3, 1998.
3
REPORT OF INDEPENDENT PUBLIC ACCOUNTANTS
To the Board of Directors of
Young Radiator Company:
We have audited the accompanying balance sheet of Young Radiator Company (a
Wisconsin corporation) as of December 31, 1997, and the related statements of
income, changes in shareholders' investment, and cash flows for the year then
ended. These financial statements are the responsibility of the Company's
management. Our responsibility is to express an opinion on these financial
statements based on our audit.
We conducted our audit in accordance with generally accepted auditing standards.
Those standards require that we plan and perform the audit to obtain reasonable
assurance about whether the financial statements are free of material
misstatement. An audit includes examining, on a test basis, evidence supporting
the amounts and disclosures in the financial statements. An audit also includes
assessing the accounting principles used and significant estimates made by
management, as well as evaluating the overall financial statement presentation.
We believe that our audit provides a reasonable basis for our opinion.
In our opinion, the financial statements referred to above present fairly, in
all material respects, the financial position of Young Radiator Company as of
December 31, 1997, and the results of its operations and its cash flows for the
year then ended in conformity with generally accepted accounting principles.
/s/ ARTHUR ANDERSEN LLP
Milwaukee, Wisconsin
January 30, 1998
4
YOUNG RADIATOR COMPANY
STATEMENT OF INCOME
FOR THE YEAR ENDED DECEMBER 31, 1997
NET SALES $48,168,945
COST OF SALES 37,313,712
-----------
Gross profit 10,855,233
SELLING, GENERAL AND ADMINISTRATIVE EXPENSES 4,058,965
-----------
Income from operations 6,796,268
OTHER INCOME (EXPENSE):
Interest and dividend income and net realized gains on marketable securities 1,040,366
Other expense, net (205,031)
-----------
835,335
-----------
NET INCOME $ 7,631,603
===========
Basic and diluted earnings per share $ 190,790
===========
Basic and diluted weighted average shares outstanding 40
===========
The accompanying notes to financial statements are an integral part of this
statement.
5
YOUNG RADIATOR COMPANY
BALANCE SHEET
AS OF DECEMBER 31, 1997
ASSETS
CURRENT ASSETS:
Cash $ 9,115
Marketable securities available-for-sale 10,634,160
Accounts receivable, less reserve for doubtful
accounts of $150,000 5,929,794
Inventories 5,456,983
------------
Total current assets 22,030,052
OTHER ASSETS 457,877
PROPERTY, PLANT AND EQUIPMENT, NET
Land and buildings 12,485,241
Machinery and equipment 17,655,427
Furniture and fixtures 1,064,697
Vehicles 649,807
------------
31,855,172
Less- Accumulated depreciation (18,926,836)
Less- Unamortized investment credit (38,415)
------------
Net property, plant and equipment 12,889,921
------------
$ 35,377,850
============
LIABILITIES AND
SHAREHOLDERS' INVESTMENT
CURRENT LIABILITIES:
Accounts payable $ 1,798,091
Accrued expenses-
Payroll and commissions 384,488
Vacation benefits 680,101
Health insurance claims 300,000
Warranty 548,811
Real estate taxes 235,000
Workers compensation claims 280,000
State income taxes 61,407
Other 4,076
Current portion of postretirement benefits 189,621
------------
Total current liabilities 4,481,595
LONG-TERM PENSION BENEFITS 394,066
LONG-TERM POSTRETIREMENT BENEFITS,
NET OF CURRENT PORTION 251,109
OTHER LONG-TERM LIABILITIES 1,347,500
SHAREHOLDERS' INVESTMENT:
Common stock, no par or stated value, 141
shares authorized, 40 shares issued and outstanding -
Additional paid in capital 465,332
Retained earnings 28,279,524
Unrealized gains on securities available-for-sale 158,724
------------
Total shareholders' investment 28,903,580
------------
$ 35,377,850
============
The accompanying notes to financial statements are an integral part of this
balance sheet.
6
YOUNG RADIATOR COMPANY
STATEMENT OF CASH FLOWS
FOR THE YEAR ENDED DECEMBER 31, 1997
CASH FLOWS FROM OPERATING ACTIVITIES:
Net income $ 7,631,603
Adjustments to reconcile net income to net cash provided by
operating activities-
Provision for depreciation 1,320,667
Net loss on sale of equipment 3,484
Increase in accounts receivable (836,788)
Increase in inventories (130,798)
Increase in other assets (31,334)
Increase in accounts payable 388,984
Decrease in accrued liabilities (237,602)
Decrease in accrued pension benefits (630,788)
Decrease in accrued postretirement benefits (95,415)
-----------
Net cash provided by operating activities 7,382,013
-----------
CASH FLOWS FROM INVESTING ACTIVITIES:
Capital expenditures (1,480,701)
Sales of marketable securities available-for-sale, net of unrealized holding gains
1,037,653
-----------
Net cash used in investing activities (443,048)
-----------
CASH FLOWS FROM FINANCING ACTIVITIES:
Distribution to shareholders (7,200,000)
-----------
NET DECREASE IN CASH (261,035)
CASH, beginning of year 270,150
-----------
CASH, end of year $ 9,115
===========
Supplemental Disclosure of Cash Flow Information:
Cash paid for state income taxes $ 317,276
Cash paid for interest -
The accompanying notes to financial statements are an integral part of this
statement.
7
YOUNG RADIATOR COMPANY
STATEMENT OF CHANGES IN SHAREHOLDERS' INVESTMENT
FOR THE YEAR ENDED DECEMBER 31, 1997
Shares Additional Unrealized Gains Total
Issued and Paid in Retained on Securities Shareholders'
Outstanding(1) Capital Earnings Available-for-Sale Investment
-------------- ---------- ----------- ------------------ -------------
BALANCE, December 31, 1996 40 $465,332 $27,847,921 $ 13,011 $28,326,264
Unrealized marketable securities gains - - - 145,713 145,713
Dividends paid ($180,000 per share) - - (7,200,000) - (7,200,000)
Net income - - 7,631,603 - 7,631,603
--- -------- ----------- -------- -----------
BALANCE, December 31, 1997 40 $465,332 $28,279,524 $158,724 $28,903,580
=== ======== =========== ======== ===========
(1) Common stock--authorized 141 shares of no par value
The accompanying notes to financial statements are an integral part of this
statement.
8
YOUNG RADIATOR COMPANY
NOTES TO FINANCIAL STATEMENTS
DECEMBER 31, 1997
(1) Summary of the Business and Significant Accounting Policies-
(a) Description of the business-
Young Radiator Company (the "Company") is a privately held
company with a general office located in Racine, Wisconsin and
operating plants located in Centerville, Iowa and Lexington,
Tennessee. The Company manufactures a broad range of
radiators, shell and tube heat exchangers, oil coolers and
charge air coolers. Customers served include manufacturers in
the locomotive, diesel engine, bus, military, off-highway
vehicle and equipment markets, as well as customers in the
industrial and engine packager markets primarily in North
America. The Company grants credit to substantially all of its
customers. Approximately 37% of the net sales of the Company
were divided between two customers in the locomotive industry
in 1997.
(b) Inventories-
Inventories are valued at the lower of cost or market,
determined on a last-in, first-out (LIFO) basis. Inventory
costs include material, labor and factory overhead.
All of the Company's inventories are accounted for using the
last-in, first-out (LIFO) method. Inventories at December 31,
1997, included the following:
Raw materials $ 4,373,964
Work-in-process and finished products 3,172,016
-----------
Inventories at FIFO cost 7,545,980
LIFO reserve (2,088,997)
-----------
Total inventories at LIFO cost $ 5,456,983
===========
(c) Property, plant and equipment-
Property, plant and equipment are carried at cost.
Expenditures for additions, and major renewals and
betterments, which extend the life of an asset, are
capitalized, while maintenance and repairs are expensed as
incurred.
(d) Depreciation-
Property, plant and equipment is depreciated using both
straight-line and accelerated methods of depreciation for
financial reporting purposes over their useful lives as
follows:
Buildings 20 years
Machinery and equipment 5 - 15 years
Furniture and fixtures 5 - 15 years
Vehicles 5 years
9
(e) Use of estimates-
The preparation of financial statements in conformity with
generally accepted accounting principles requires management
to make estimates and assumptions that affect the reported
amounts of assets and liabilities and disclosure of contingent
assets and liabilities at the date of the financial statements
and the reported amounts of revenues and expenses during the
reporting period. Actual results could differ from those
estimates.
(f) Revenue recognition-
Revenue is recognized when inventory is shipped to the
customer.
(g) Advertising costs-
Costs incurred for producing and communicating advertising are
expensed when incurred. Total advertising costs incurred
during 1997 were approximately $255,000.
(h) Impairment of long-lived assets-
The Company assesses the recoverability of the carrying amount
of long-lived assets currently held when various events or
changes in circumstances indicate that the assets may be
impaired.
(i) Earnings per share-
Earnings per share have been computed based upon the weighted
average number of shares outstanding. The Company does not
have any dilutive common stock equivalents. Accordingly, basic
and diluted earnings per share are the same for the period
presented.
(j) Other assets-
Included in other assets as of December 31, 1997, was $299,593
of cash surrender value related to a life insurance policy on
the Company's president and majority shareholder. The face
amount of this policy is $1 million.
(k) Warranty-
The Company offers a one-year limited warranty on its
products, which begins at the time of sale to a customer. The
Company accrues for these warranty costs at the time of sale.
(2) Marketable Securities Available-for-Sale-
The Company classifies its investments in marketable securities as
available-for-sale. As a result, these investments have been recorded
at December 31, 1997, at fair market value with the net unrealized
holding gains (losses) excluded from earnings and recorded as a
separate component of shareholders' investment.
10
The cost and fair market value of the Company's investments, which
primarily consist of corporate bonds and governmental securities, at
December 31, 1997, by contract maturity, is shown below:
Fair Market
Cost Value
----------- -----------
Due in 1 year or less $ 890,701 $ 892,315
Due after 1 year through 5 years 4,989,349 5,002,951
Due after 5 years through 10 years 3,466,106 3,563,227
Due after 10 years 1,129,280 1,175,667
----------- -----------
$10,475,436 $10,634,160
=========== ===========
Although the investments mature at various times, the Company
classifies all investments as short-term as they are considered
available-for-sale. The net unrealized holding gains of $158,724 as of
December 31, 1997, are reflected as a separate component of
shareholders' investment.
(3) Pension Benefits-
The Young Radiator Company Pension Plan (the "Plan") is a defined
benefit pension plan covering substantially all of the employees of the
Company. The benefits under the Plan are based on years of service. The
Company's funding policy for the Plan is to contribute annually at
least the minimum required by applicable regulations.
Net pension (income) expense includes the following components:
Service cost-benefits attributed to service during the year $ 302,524
Interest cost on projected benefit obligation 1,253,164
Expected return on Plan assets (1,924,535)
Net amortization (261,941)
-----------
Net periodic pension income $ (630,788)
===========
The following table sets forth the Plan's funded status and amounts
recognized at December 31, 1997, based upon actuarial data and market
value of Plan assets (primarily fixed income mutual funds) as of
September 30, 1997:
Actuarial present value of benefit obligations:
Accumulated benefit obligation, including vested
benefits of $16,551,454 $(17,136,785)
============
Projected benefit obligation for service rendered to date $(18,641,278)
Plan assets at fair value 25,008,127
------------
Projected benefit obligation less than Plan assets 6,366,849
Unrecognized net gain (7,027,953)
Unrecognized prior service cost 267,038
------------
Accrued pension benefits $ (394,066)
============
11
The actuarial assumptions used to determine net pension income during
1997 and the projected benefit obligation at September 30, 1997 were:
Discount rate 7.0%
Expected long-term rate of return 8.5%
Expected salary scale 5.0%
(4) Postretirement Benefits-
In addition to providing pension benefits, the Company provides certain
health care and life insurance benefits for certain retired employees
("Postretirement Benefits"). The Company follows FASB Statement No. 106
"Employers' Accounting for Postretirement Benefits, Other than
Pensions" ("SFAS No. 106"), which requires that the expected cost of
these Postretirement Benefits be charged to expense in the years the
employees render the services necessary to earn their benefits.
The components of the Company's net periodic Postretirement Benefit
expense are as follows:
Interest cost on accumulated postretirement benefit obligation $30,995
Actuarial loss 6,582
-------
Net periodic Postretirement Benefit expense $37,577
=======
The Company does not offer Postretirement Benefits to its current
employees. The Company also capped future Postretirement Benefits to
retired employees to a flat defined benefit amount. Therefore, any
future increases in Postretirement Benefit costs beyond the defined
established benefit amount will be the responsibility of the retired
employee.
The following table sets forth the funded status for the Postretirement
Benefits at December 31, 1997, based upon actuarial data as of
September 30, 1997:
Accumulated Postretirement Benefit obligation $(440,730)
Plan assets at market value -
---------
Accumulated Postretirement Benefit obligation in excess of
plan assets (440,730)
Unrecognized net gain/loss from experience different from
that assumed and from changes in assumptions -
Unamortized transition obligation -
---------
Accrued Postretirement Benefits $(440,730)
=========
At December 31, 1997, the Company has $189,621, of accrued
Postretirement Benefits included in current accrued liabilities.
The discount rate used in determining the accumulated Postretirement
Benefit obligation was 7.5%. As the Company has defined and capped the
future Postretirement Benefits, future cost trend rates will not impact
the cost of the Postretirement Benefits.
12
The Company maintains the right to unilaterally modify or eliminate
such Postretirement Benefits, which, if acted upon, could significantly
change the liability.
(5) Bank Lines of Credit-
At December 31, 1997, the Company had unsecured bank lines of credit
available totaling $3,500,000, with no outstanding borrowings. During
1997, the Company did not borrow on these lines of credit. The Company
is not required to maintain compensating balances on the lines. The
lines of credit mature in August of 1998 and June of 1998.
(6) Income Taxes and Stockholder Distributions-
The Company and its shareholders have elected, for Federal and state
income tax purposes, to be taxed as an "S" corporation. As an "S"
corporation, the Company's taxable income or loss is includable in the
individual tax return of its shareholders for Federal and state income
tax purposes. The Company intends to make future distributions to its
shareholders to allow for payment of the future income taxes.
In the event the "S" corporation election is terminated, a net deferred
income tax benefit for timing differences between financial statement
and income tax reporting related to postretirement medical and life
insurance expenses, pension expense, inventory costs, depreciation and
other items would be reflected in the Company's financial statements.
(7) Contingencies-
The Company has received a notice from the current owners of a prior
operating plant indicating that the Company is the responsible party
for the contamination of the prior operating plant site. The current
owner seeks to recover from the Company the estimated costs of cleaning
up the alleged contamination. Although management has not completed its
investigation of this matter, it believes this matter could ultimately
have an unfavorable impact on the Company's financial position;
however, the ultimate decision may not be known for some time. The
Company has accrued, as a component of other accrued long-term
liabilities, $1,000,000 related to this matter as management's best
estimate of the ultimate settlement cost. While the estimated accrued
costs are considered adequate by management, the ultimate net amount
paid may be greater or less than the amount estimated.
In addition, the Company is one of several potentially responsible
parties ("PRPs") in an action in which the Environmental Protection
Agency ("EPA") seeks to recover the estimated costs of cleaning up a
landfill alleged to be contaminated by toxic waste materials. The EPA
sent the Company a "Special Notice" letter requesting reimbursement of
certain investigation and cleanup costs and also providing an
opportunity to participate in future remedial action. The letter, which
identified the Company as 138th of 362 PRPs, alleges the Company has a
percentage contribution of .05006%. The Company has and continues to
argue for a lower volumetric percentage. The Company has not accrued a
liability for this matter.
The Company believes that the outcome of these proceedings,
individually and in the aggregate, will not have a materially adverse
effect on the Company's operations.
13
(8) Accounting Pronouncements-
The Financial Accounting Standards Board has issued Statement of
Financial Accounting Standards ("SFAS") No. 130 "Reporting
Comprehensive Income." This statement establishes standards for the
reporting and display of comprehensive income and its components.
Comprehensive income is defined as net income and all other
non-shareholder changes in equity. This pronouncement, which will be
adopted in 1998, will only impact the Company's financial statement
disclosures.
Beginning on January 1, 1998, the Company will be required to adopt
Statement of Position ("SOP") No. 98-1, "Accounting for the Costs of
Computer Software Developed or Obtained for Internal Use." Because the
Company currently accounts for computer software costs in accordance
with the SOP, it will not have an impact on the Company's financial
position or results from operations.
14
UNAUDITED PRO FORMA CONSOLIDATED DATA
The following unaudited pro forma income statement data for the year
ended December 31, 1997 and the nine months ended September 30, 1998 have been
prepared based on historical income statements of the Company, as adjusted to
reflect the acquisition of Young Radiator as if it had occurred on January 1,
1997. The pro forma income statement data may not be indicative of the future
results of operations or what the actual results of operations would have been
had the acquisition described above been effective January 1, 1997. The
unaudited pro forma balance sheet has been prepared assuming Young Radiator was
acquired on September 30, 1998.
15
UNAUDITED PRO FORMA INCOME STATEMENT
(In thousands except share data)
December 31, 1997
--------------------------------------------------
Young
MotivePower Radiator
Industries Company Adjustments Total
------------ -------- ----------- -----
Net sales $ 305,930 $ 48,169 $ - $ 354,099
Cost of sales (233,588) (37,879) (694) (1) (272,161)
--------- -------- ------- ---------
Gross profit 72,342 10,290 (694) 81,938
Selling, general and
administrative expenses (37,724) (4,125) (921) (2) (42,770)
--------- -------- ------- ---------
Operating income 34,618 6,165 (1,615) 39,168
Investment income 761 1,041 (1,041) (3) 761
Interest expense (5,163) - (4,598) (4) (9,761)
Other income 2,003 426 - 2,429
Foreign exchange loss (230) - - (230)
--------- -------- ------- ---------
Income before income taxes 31,989 7,632 (7,253) 32,368
Income tax expense (11,713) - (136) (5) (11,849)
--------- -------- ------- ---------
Net income $ 20,276 $ 7,632 $(7,390) $ 20,518
========= ======== ======= =========
Earnings per common share -basic:
Net income $ 1.16
=========
Adjusted weighted average commons shares outstanding 17,694
=========
Earnings per common share -assuming dilution:
Net income $ 1.13
=========
Adjusted weighted average commons shares outstanding 18,209
=========
16
UNAUDITED PRO FORMA INCOME STATEMENT
(In thousands except share data)
September 30, 1998
--------------------------------------------------
Young
MotivePower Radiator
Industries Company Adjustments Total
------------ -------- ----------- -----
Net sales $ 258,720 $ 37,704 $ - $ 296,424
Cost of sales (196,946) (28,467) (521) (1) (225,934)
--------- -------- ------- ---------
Gross profit 61,774 9,237 (521) 70,490
Selling, general and
administrative expenses (29,395) (4,113) (690) (2) (34,198)
--------- -------- ------- ---------
Operating income 32,379 5,124 (1,211) 36,292
Investment income 918 614 (614) (3) 918
Interest expense (3,739) (12) (3,466) (4) (7,217)
Other income 2,622 561 - 3,183
Foreign exchange loss 2,071 - - 2,071
--------- -------- ------- ---------
Income before income taxes and extraordinary item 34,251 6,287 (5,291) 35,247
Income tax expense (11,549) - (359) (5) (11,908)
--------- -------- ------- ---------
Income before extraordinary item 22,702 6,287 (5,560) 23,339
Extraordinary loss on debt extinguishment, net of income tax (472) - - (472)
--------- -------- ------- ---------
Net income $ 20,230 $ 6,287 $(5,650) $ 22,867
========= ======== ======= =========
Earnings per common share -basic:
Income before extraordinary item $ 1.31
Extraordinary item (0.03)
---------
Net income $ 1.28
=========
Adjusted weighted average commons shares outstanding 17,830
=========
Earnings per common share -assuming dilution:
Income before extraordinary item $ 1.25
Extraordinary item (0.02)
---------
Net income $ 1.23
=========
Adjusted weighted average commons shares outstanding 18,599
=========
17
UNAUDITED PRO FORMA BALANCE SHEET
As of September 30, 1998
(In thousands)
--------------------------------------------------
Young
Motive Power Radiator
Industries Company Adjustments Total
------------ -------- ----------- -----
ASSETS
Current Assets:
Cash and cash equivalents $ 11,877 $ 11,937 $ 319 (6) $ 24,133
Receivables from customers:
Billed, net of allowance for doubtful
accounts 45,317 7,005 - 52,322
Unbilled 1,091 - - 1,091
Inventories 99,501 5,208 1,879 (7) 106,588
Deferred income taxes 8,811 - - 8,811
Other 3,357 - - 3,357
-------- -------- -------- --------
Total current assets 169,954 24,150 2,198 196,302
Locomotive lease fleet, net 1,210 - - 1,210
Property, plant and equipment
Land 1,427 222 768 (8) 2,417
Buildings and improvements 44,096 12,265 (5,228)(8) 51,133
Machinery and equipment 75,194 20,073 (8,468)(8) 86,799
-------- -------- -------- --------
Property, plant and equipment -at cost 120,717 32,560 (12,928) 140,349
Less - accumulated depreciation (53,299) (19,869) 19,869 (8) (53,299)
-------- -------- -------- --------
Property, plant and equipment-net 67,418 12,691 6,941 87,050
Underbillings-MPI de Mexico 27,350 - - 27,350
Deferred income taxes 2,941 - - 2,941
Goodwill and intangibles-net 24,770 - 36,821 (9) 61,591
Other 10,666 168 2,599 (10) 13,433
-------- -------- -------- --------
Total assets $304,309 $ 37,009 $ 48,559 $389,877
======== ======== ======== ========
LIABILITIES AND STOCKHOLDERS' EQUITY
Current Liabilities
Current portion of long-term debt $ 7,014 $ - $ - $ 7,014
Accounts payable - trade 30,321 1,915 418 (11) 32,654
Accrued expenses and other
current liabilities 31,529 2,629 904 (11) 35,062
Income taxes payable 548 53 - 601
Advances from customers 1,255 - - 1,255
-------- -------- -------- --------
Total current liabilities 70,667 4,597 - 75,264
======== ======== ======== ========
Long-term debt 48,091 - 79,345 (12) 127,436
Commitments and contingencies 15,735 - - 15,735
Other 2,381 1,477 149 (11) 4,007
-------- -------- -------- --------
Total liabilities 136,874 6,074 79,494 222,442
Stockholders Equity:
Common stock 178 - - 178
Additional paid-in capital 206,018 465 (465)(13) 206,018
Deficit (33,125) 29,966 (29,966)(13) (33,125)
Cumulative translation adjustments,
net of tax (5,105) - - (5,105)
Other - 504 (504)(13) -
Deferred compensation 3,998 - - 3,998
-------- -------- -------- --------
171,964 30,935 (30,935) 171,964
Less
Treasury stock 4,529 - - 4,529
-------- -------- -------- --------
Total stockholders' equity 167,435 30,935 (30,935) 167,435
-------- -------- -------- --------
Total liabilities and stockholders' equity $304,309 $ 37,009 $ 48,559 $389,877
======== ======== ======== ========
18
Footnotes to Unaudited Pro Forma Consolidated Data
- --------------------------------------------------
(1) Estimated additional depreciation related to the recording of property,
plant and equipment at fair value.
(2) Estimated amortization of goodwill related to the purchase, over a 40
year life.
(3) Represents adjustment to interest income based on Company's intention
to sell investments.
(4) Estimated additional interest expense based on increased borrowings
under the Company's domestic revolver at an assumed 6% interest rate.
(5) Estimated income tax effect of Young Radiator Company and of the pro
forma adjustments.
(6) Recording of investments at net realizable value.
(7) Represents an adjustment to record inventory at fair value.
(8) Represents an adjustment to record property, plant and equipment at
fair value.
(9) Estimated goodwill related to the purchase.
(10) Recording of overfunded pension asset and other miscellaneous assets
at fair value.
(11) Recording of liabilities at fair value.
(12) Represents the additional borrowings under the Company's domestic
revolver.
(13) Elimination of Young Radiator's equity accounts.
Note:
- -----
Certain reclassifications have been made to the 1998 and 1997 Young Radiator
Company financial statements to conform to the Company's presentation of such
items.
19
SIGNATURE
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.
MOTIVEPOWER INDUSTRIES, INC.
By: /s/ David L. Bonvenuto
-----------------------
David L. Bonvenuto
Vice President, Controller and
Principal Accounting Officer
February 1, 1999
20
EXHIBIT INDEX
Exhibit No.
- -----------
2 Stock Purchase Agreement dated September 3, 1998 by and among Fred M.
Young, Jr., Sandra H. Young, Fred M. Young, Jr., Custodian for Ryan S.
Young under the Wisconsin Uniform Gifts to Minors Act, Fred M. Young,
Jr., Trustee of the Ariel H. Young Irrevocable Trust of 1996 and
MotivePower Industries, Inc.