1
================================================================================
UNITED STATES
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): NOVEMBER 18, 1997
EVI, INC.
(Exact name of registrant as specified in charter)
DELAWARE 1-13086 04-2515019
(State of Incorporation) (Commission File No.) (I.R.S. Employer
Identification No.)
5 POST OAK PARK, SUITE 1760,
HOUSTON, TEXAS 77027-3415
(Address of Principal Executive Offices) (Zip Code)
REGISTRANT'S TELEPHONE NUMBER, INCLUDING AREA CODE: (713) 297-8400
================================================================================
Page 1
Exhibit Index Appears on Page 11
2
ITEM 5. OTHER EVENTS.
On November 14, 1997, EVI, Inc. (the "Company") announced the
commencement of a cash tender offer and consent solicitation (the "Tender
Offer") relating to all of the Company's outstanding 10 1/4% Senior Notes due
2004 and 10 1/4% Senior Notes due 2004, Series B (collectively, the "Notes").
The tender consideration to be paid for each properly tendered Note and
properly delivered consent will equal (i) the present value on the proposed
payment date of $1,038.44 per $1,000 principal amount of Notes (the amount
payable on March 15, 1999, which is the first date on which the Notes are
redeemable at the option of the Company) and all future semi-annual interest
payments to March 15, 1999, determined on the basis of the yield on the 5 7/8%
U.S. Treasury Notes due February 28, 1999, plus 25 basis points, minus (ii)
$25.00 per $1,000 principal amount of the Notes (which is the payment for
consents to the proposed amendments), plus (iii) accrued and unpaid interest on
the Notes to, but not including, the payment date. The Tender Offer expires at
12:00 midnight, New York City time, on Friday, December 12, 1997, unless
extended.
In conjunction with the Tender Offer, the Company is soliciting
consents to certain proposed amendments to the indenture relating to the Notes
(the "Indenture"). Such amendments would amend or eliminate certain of the
principal restrictive covenants contained in the Indenture and would release all
subsidiary guarantors under the Indenture. Each holder of an outstanding Note
who validly consents to the proposed amendments to the Indenture on or prior to
5:00 p.m., New York City time, on Monday, December 1, 1997, will be paid $25.00
in cash for each $1,000 in principal amount of the outstanding Notes. Holders
who tender their Notes after the consent date will not be entitled to receive
the $25.00 consent payment. The Company's acceptance for payment of the Notes
under the Tender Offer is subject to a number of conditions, including the
execution of a supplemental indenture following the valid tender of and consent
from the holders of at least a majority in aggregate principal amount of the
outstanding Notes.
A copy of the press release announcing the commencement of the Tender
Offer is filed as Exhibit 99.1 and is hereby incorporated herein by reference.
Page 2
3
PRO FORMA CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
The following tables set forth certain summary pro forma condensed
consolidated financial data of the Company. The unaudited Pro Forma Condensed
Consolidated Statements of Income give effect to (i) the acquisition by the
Company of Tubular Corporation of America ("TCA") on August 5, 1996, (ii) the
acquisition by the Company of GulfMark International, Inc. ("GulfMark") and its
assets as of the date of acquisition on May 1, 1997 (the "GulfMark Retained
Assets"), (iii) the issuance and sale of the Company's 5% Convertible
Subordinated Preferred Equivalent Debentures due 2027 (the "Debentures") and
(iv) the acquisition of $120 million principal amount of the Notes pursuant to
the Tender Offer as if these transactions had occurred on January 1, 1996. The
unaudited Pro Forma Condensed Consolidated Balance Sheet gives effect to the
issuance and sale of the Debentures and the acquisition of all of the Notes
pursuant to the Tender Offer as if these transactions had occurred on September
30, 1997. The following summary pro forma condensed consolidated financial data
and related notes thereto have been restated to reflect the Company's May 1997
two-for-one stock split. The pro forma information set forth below is not
necessarily indicative of the results that actually would have been achieved had
such transactions been consummated as of the dates reflected or that may be
achieved in the future. The pro forma financial data does not give effect to
the Company's proposed acquisitions of Trico Industries, Inc. ("Trico"), BMW
Monarch (Lloydminster) Ltd. ("BMW Monarch") and BMW Pump, Inc. ("BMW Pump") or
various smaller acquisitions effected by the Company during 1997. This
information should be read in conjunction with the Company's Management's
Discussion and Analysis of Financial Condition and Results of Operations
contained in its Annual Report on Form 10-K for the year ended December 31,
1996, as amended, and Quarterly Report on Form 10-Q for the quarter ended
September 30, 1997, and the Company's, TCA's, and GulfMark Retained Assets'
consolidated financial statements and related notes thereto previously filed.
Page 3
4
PRO FORMA CONDENSED CONSOLIDATED BALANCE SHEET
AS OF SEPTEMBER 30, 1997
(IN THOUSANDS)
PRO FORMA
ADJUSTMENTS
-------------------------------
DEBENTURE SENIOR NOTES
HISTORICAL OFFERING TENDER PRO FORMA
------------ ------------ ------------ ------------
ASSETS
Current assets:
Cash and cash equivalents $ 16,926 $ 390,600(a) $ (132,496)(b) $ 275,030
Accounts receivable, net 188,204 -- -- 188,204
Inventories 243,617 -- -- 243,617
Prepaid expenses and other 36,966 397(c) (446)(d) 36,917
------------ ------------ ------------ ------------
Total current assets 485,713 390,997 (132,942) 743,768
------------ ------------ ------------ ------------
Property, plant and equipment, net 277,648 -- -- 277,648
Goodwill, net 193,017 -- -- 193,017
Other assets 34,883 11,503(c) (3,005)(d) 43,381
------------ ------------ ------------ ------------
$ 991,261 $ 402,500 $ (135,947) $ 1,257,814
============ ============ ============ ============
LIABILITIES & STOCKHOLDERS' INVESTMENT
Current liabilities:
Short-term borrowings, primarily
under revolving lines of credit $ 32,396 $ -- $ -- $ 32,396
Current maturities of long-term debt 12,166 -- -- 12,166
Accounts payable 119,302 -- -- 119,302
Other accrued liabilities 91,188 -- (6,126)(e) 85,062
------------ ------------ ------------ ------------
Total current liabilities 255,052 -- (6,126) 248,926
------------ ------------ ------------ ------------
Long-term debt 164,995 -- (120,000)(f) 44,995
Deferred income taxes, net 38,453 -- -- 38,453
Other liabilities 23,959 -- -- 23,959
5% Convertible Subordinated Preferred
Equivalent Debentures -- 402,500(a) -- 402,500
Stockholders' investment:
Common Stock 51,852 -- -- 51,852
Capital in excess of par 405,492 -- -- 405,492
Retained earnings 213,759 -- (9,821)(g) 203,938
Foreign currency translation adjustment (10,057) -- -- (10,057)
Treasury stock, at cost (152,244) -- -- (152,244)
------------ ------------ ------------ ------------
Total stockholders' investment 508,802 -- (9,821) 498,981
------------ ------------ ------------ ------------
$ 991,261 $ 402,500 $ (135,947) $ 1,257,814
============ ============ ============ ============
Page 4
5
PRO FORMA CONDENSED CONSOLIDATED STATEMENT OF INCOME
FOR THE TWELVE MONTHS ENDED DECEMBER 31, 1996
(IN THOUSANDS, EXCEPT PER SHARE AMOUNTS)
TCA
Historical
for the Pro Forma Adjustments
Six Months Gulfmark -------------------------------------------
Ended Retained Senior
June 30, Assets GulfMark Debenture Notes
Historical 1996 (h) Historical TCA Merger Offering Tender Pro Forma
---------- ----------- ---------- --------- -------- --------- ------- ---------
Revenues $478,020 $ 28,260 $ 6,994 $ -- $ -- $ -- $ -- $ 513,274
-------- ----------- ---------- ------- -------- --------- -------- ---------
Costs and expenses:
Cost of sales 373,509 24,381 3,922 579(i) -- -- -- 402,391
Selling general and
administrative
attributable to
segments 51,885 1,006 2,068 197(j) -- -- -- 55,156
Corporate, general and
administrative 6,339 -- -- -- -- -- -- 6,339
-------- ----------- ---------- ------- -------- --------- -------- ---------
431,733 25,387 5,990 776 -- -- -- 463,886
-------- ----------- ---------- ------- -------- --------- -------- ---------
46,287 2,873 1,004 (776) -- -- -- 49,388
-------- ----------- ---------- ------- -------- --------- -------- ---------
Operating income
Other income (expense):
Interest expense (16,454) (602) -- 602(k) -- (20,520)(l) 12,746(m) (24,228)
Interest income 2,163 -- -- -- -- -- -- 2,163
Other income (expense), net (450) (742) 6,264 875(n) (6,264)(o) -- -- (317)
-------- ----------- ---------- ------- -------- --------- -------- ---------
(14,741) (1,344) 6,264 1,477 (6,264) (20,520) 12,746 (22,382)
-------- ----------- ---------- ------- -------- --------- -------- ---------
Income (loss) before taxes 31,546 1,529 7,268 701 (6,264) (20,520) 12,746 27,006
Provisions (benefit) for
income taxes 7,041 34 2,472 245(p) (2,192)(p) (7,182)(p) 4,461(p) 4,879
-------- ----------- ---------- ------- -------- --------- -------- ---------
Income (loss) from continuing
Operations $ 24,505 $ 1,495 $ 4,796 $ 456 $ (4,072) $ (13,338) $ 8,285 $ 22,127
======== =========== ========== ======= ======== ========= ======== =========
Earnings per share from
continuing operations $ 0.60 $ 0.54(q)
======== =========
Weighted average shares
outstanding 40,706 $ 41,298(q)
======== =========
Page 5
6
PRO FORMA CONDENSED CONSOLIDATED STATEMENT OF INCOME
FOR THE NINE MONTHS ENDED SEPTEMBER 30, 1997
(IN THOUSANDS, EXCEPT PER SHARE AMOUNTS)
GulfMark PRO FORMA
Retained Assets Adjustments
EVI Historical for the ---------------------
Historical Three Months Ended Debenture Senior Notes EVI
Consolidated March 31, 1997(r) Offering Tender Pro Forma
------------ ------------------ --------- ------------ ---------
Revenues $ 612,868 $ 818 $ -- $ -- $ 613,686
Costs and expenses ------------ ------------------ --------- ------------ ---------
Cost of sales 453,001 678 -- -- 453,679
Selling, general and
administrative attributable to
segments 62,324 688 -- -- 63,012
Corporate, general and
administrative 5,396 -- -- -- 5,396
------------ ------------------ --------- ------------ ---------
520,721 1,366 -- -- 522,087
------------ ------------------ --------- ------------ ---------
Operating income 92,147 (548) -- -- 91,599
------------ ------------------ --------- ------------ ---------
Other income (expense):
Interest expense (13,080) -- (15,391)(l) 9,560(m) (18,911)
Interest income 3,824 -- -- -- 3,824
Gain on sale of marketable
securities 3,352 -- -- -- 3,352
Other income (expense), net 852 -- -- -- 852
------------ ------------------ --------- ------------ ---------
(5,052) -- (15,391) 9,560 (10,883)
------------ ------------------ --------- ------------ ---------
Income (loss) before income taxes 87,095 (548) (15,391) 9,560 80,716
Provision (benefit) for income taxes 30,594 100 (5,387)(p) 3,346(p) 28,653
------------ ------------------ --------- ------------ ---------
Income (loss) from continuing
operations $ 56,501 $ (648) $ (10,004) $ 6,214 $ 52,063
============ ================== ========= ============ =========
Earnings per share from continuing
operations $ 1.23 $ 1.13(q)
============ =========
Weighted average shares outstanding 45,961 45,961(q)
============ =========
Page 6
7
NOTES TO PRO FORMA CONDENSED
CONSOLIDATED FINANCIAL STATEMENTS
GENERAL
The following notes set forth the assumptions used in preparing the
unaudited pro forma financial statements. The pro forma adjustments are based
on estimates made by the Company's management using information currently
available.
PRO FORMA ADJUSTMENTS
The adjustments to the accompanying unaudited pro forma condensed
consolidated balance sheet are described below:
(a) To reflect the sale of the $402.5 million principal amount
of the Debentures and the payment of approximately $11.9
million of related debt issuance costs. Does not reflect
the use of approximately $200 million of the net proceeds
from this offering to fund the proposed acquisitions of
Trico, BMW Pump and BMW Monarch.
(b) To reflect the purchase of the $120 million principal
amount of the Notes at a cost of approximately
$132.5 million.
(c) To capitalize approximately $11.9 million of debt issuance
costs related to the Debentures.
(d) To reflect the write-off of approximately $3.5 million of
debt issuance costs related to the initial issuance of the
Notes.
(e) To reflect the payment of approximately $0.5 million of
accrued interest related to the Notes and the tax benefit
of approximately $5.6 million related to the extraordinary
charge related to the purchase of the Notes pursuant to the
Tender Offer.
(f) To reflect the purchase of the $120 million principal of
the Notes pursuant to the Tender Offer.
(g) To reflect the extraordinary charge of approximately $9.8
million, net of taxes, for the purchase of the Notes
pursuant to the Tender Offer.
The adjustments to the accompanying unaudited pro forma condensed
consolidated statements of income are described below:
(h) Reflects the results of TCA, which was acquired on August 5,
1996, from January 1, 1996, through June 30, 1996. Actual
results of TCA are included in the Company's historical
results from August 5, 1996.
(i) Reflects an increase in depreciation expense associated
with the assets of TCA, which was acquired on August 5,
1996 as a result of the $11.6 million fair value increase
of property, plant, and equipment through the purchase
price allocation. Such increase in property, plant, and
equipment is being depreciated over an average life of ten
years.
(j) To record amortization expense relating to the estimated
$15.8 million in excess of cost over fair value of tangible
assets acquired in connection with the acquisition of TCA.
Such excess of cost over fair value of net tangible assets
acquired is being amortized over 40 years.
Page 7
8
(k) To reduce TCA's interest expense to reflect the Company's
retirement of TCA's $7.7 million debt outstanding at the
date of acquisition.
(l) To adjust interest expense for the Debentures at the rate
of 5% per annum and to record amortization expense of
related debt issuance costs over the life of the Debentures.
(m) To reduce the related interest expense and amortization of
debt issuance costs to reflect the purchase of the Notes
pursuant to the Tender Offer.
(n) To eliminate certain expenses incurred by TCA relating to
the Company's acquisitions of TCA. These expenses relate
to amounts paid to an investment banking firm which
represented TCA in the Company's acquisition of TCA.
(o) To eliminate the $6,264,000 gain recorded in the GulfMark
Retained Assets with respect to the sale by GulfMark of
600,000 shares of the Company's Common Stock in July 1996.
The net proceeds from this sale were not received by the
Company nor included in the GulfMark Retained Assets at the
time of the acquisition of GulfMark by the Company.
(p) To record the income tax provision (benefit) related to the
effect of the pro forma adjustments at the statutory rate.
(q) Pro forma weighted average shares outstanding reflect the
average number of common shares outstanding for the period.
The effect of the sale of the Debentures on fully-diluted
earnings per share is anti-dilutive. At December 31, 1996,
historical and pro forma shares of Common Stock outstanding,
restated for the effect of the May 1997 two-for-one stock
split, are 45,657,842. At September 30, 1997, historical and
pro forma shares of Common Stock outstanding are 47,063,887.
(r) Reflects the results of the GulfMark Retained Assets, which
were acquired on May 1, 1997, from January 1, 1997, through
March 31, 1997. Actual results of the GulfMark Retained
Assets are included in the Company's historical results from
May 1, 1997.
Page 8
9
ITEM 7. FINANCIAL STATEMENTS AND EXHIBITS.
(c) Exhibits.
99.1 - Press Release of the Company dated November 14, 1997,
announcing the commencement of the Tender Offer.
Page 9
10
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.
EVI, INC.
Dated: November 18, 1997 /s/ Frances R. Powell
----------------------------------
Frances R. Powell
Vice President, Accounting
and Controller
Page 10
11
INDEX TO EXHIBITS
Number Exhibit
------ -------
99.1 Press Release of the Company dated November 14, 1997,
announcing the commencement of the Tender Offer.
Page 11