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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
AMENDMENT NO. 1
TO CURRENT REPORT ON FORM 8-K
ON
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 5, 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
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EXPLANATORY NOTE
EVI, Inc. files this Amendment No. 1 on Form 8-K/A to the Current
Report on Form 8-K dated November 5, 1997, to amend and restate Item 5 in its
entirety.
ITEM 5. OTHER EVENTS.
On November 3, 1997, pursuant to the provisions of the Placement
Agreement dated October 28, 1997 (the "Placement Agreement"), by and among EVI,
Inc. (the "Company"), Morgan Stanley & Co. Incorporated, Donaldson, Lufkin &
Jenrette Securities Corporation, Credit Suisse First Boston Corporation, Lehman
Brothers Inc., Prudential Securities Incorporated and Schroder & Co. Inc.
(collectively, the "Initial Purchasers"), the Company issued and sold to the
Initial Purchasers in a private placement an aggregate principal amount of $350
million of the Company's 5% Convertible Subordinated Preferred Equivalent
Debentures due 2027 (the "Debentures"). The Initial Purchasers resold the
Debentures to various qualified institutional buyers, accredited investors and
foreign investors in transactions exempt from registration under the Securities
Act of 1933 (the "Securities Act") pursuant to Rule 144A and Regulation S
thereunder. The Company also granted the Initial Purchasers a 30-day option
to purchase up to $52,500,000 additional principal amount of the Debentures
solely to cover over-allotments, if any.
The Debentures (i) mature on November 1, 2027, (ii) bear interest at
an annual rate of 5% payable on February 1, May 1, August 1 and November 1 of
each year, commencing February 1, 1998, (iii) are convertible at any time after
90 days following the latest date of original issuance of the Debentures at a
conversion price of $80 per share of common stock, $1.00 par value, of the
Company (the "Common Stock"), (iv) are redeemable by the Company at any time on
or after November 4, 2000 at redemption prices set forth in the Supplemental
Indenture relating to the Debentures, and (v) are subordinated in right of
payment of principal and interest to the prior payment in full of certain
existing and future senior indebtedness of the Company. The terms of the
Debentures are more fully described in the Indenture dated as of October 15,
1997 (the "Indenture"), between the Company and The Chase Manhattan Bank, as
Trustee, as supplemented by the First Supplemental Indenture dated as of October
28, 1997 (the "Supplemental Indenture"), which such Indenture and Supplemental
Indenture are filed as Exhibits 4.1 and 4.2, respectively, and are hereby
incorporated herein by reference.
Pursuant to a Registration Rights Agreement dated November 3, 1997,
between the Company and the Initial Purchasers, the Company has agreed to file
with the Securities and Exchange Commission within 90 days of the latest date
of original issuance of the Debentures, to use its reasonable best efforts to
cause to be declared effective within 180 days following the latest date of
original issuance of the Debentures, a registration statement with respect to
the resale of the Debentures and the underlying Common Stock. The Company will
be required to pay liquidated damages to the holders of the Debentures or the
underlying Common Stock under certain circumstances if the Company is not in
compliance with its registration obligations. The terms and provisions of the
Registration Rights Agreement are more fully described in the Registration
Rights Agreement which is filed as Exhibit 99.1 and is hereby incorporated
herein by reference.
The net proceeds received by the Company from the sale of the
Debentures, after deducting the expenses of the transaction, were approximately
$340 million. Approximately $200 million of the net proceeds will be used to
fund the Company's previously announced acquisitions of Trico Industries,
Inc.("Trico"), BMW Monarch (Lloydminster) Ltd. ("BMW Monarch") and BMW Pump,
Inc. ("BMW Pump"). The balance of the net proceeds are expected to be used for
general corporate purposes, including future acquisitions and expansions. In
addition, although the Company will have no obligation to do so, the Company may
also use a portion of the net proceeds from the issuance and sale of the
Debentures in connection with a possible refinancing of the Company's 10 1/4%
Senior Notes due 2004.
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PRO FORMA CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
The following tables set forth certain summary pro forma condensed
consolidated financial data of the Company giving effect to the issuance and
sale of the Debentures. 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 of
the date of acquisition on May 1, 1997 (the "GulfMark Retained Assets"), and
(iii) the issuance and sale of the Debentures 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 as if the
transaction had occurred on June 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, BMW Monarch or 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 June 30, 1997, and the Company's, TCA's, and GulfMark Retained
Assets' consolidated financial statements and related notes thereto previously
filed.
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PRO FORMA CONDENSED CONSOLIDATED BALANCE SHEET
AS OF JUNE 30, 1997
(IN THOUSANDS)
ASSETS
OFFERING
HISTORICAL ADJUSTMENTS PRO FORMA
---------- ----------- ----------
Current assets:
Cash and cash equivalents........................... $ 54,973 $339,600(a) $ 394,573
Accounts receivable, net............................ 161,138 -- 161,138
Inventories......................................... 228,092 -- 228,092
Prepaid expenses and other.......................... 34,425 347(b) 34,772
--------- -------- ----------
Total current assets........................ 478,628 339,947 818,575
--------- -------- ----------
Property, plant and equipment, net.................... 230,761 -- 230,761
Goodwill, net......................................... 154,179 -- 154,179
Other assets.......................................... 32,777 10,053(b) 42,830
--------- -------- ----------
$ 896,345 $350,000 $1,246,345
========= ======== ==========
LIABILITIES AND STOCKHOLDERS' INVESTMENT
Current liabilities:
Short-term borrowings, primarily under revolving
lines of credit.................................. $ 7,400 $ -- $ 7,400
Current maturities of long-term debt................ 7,774 -- 7,774
Accounts payable.................................... 117,702 -- 117,702
Other accrued liabilities........................... 86,774 -- 86,774
--------- -------- ----------
Total current liabilities................... 219,650 -- 219,650
--------- -------- ----------
Long-term debt........................................ 138,468 -- 138,468
Deferred income taxes, net............................ 27,343 -- 27,343
Other liabilities..................................... 25,044 -- 25,044
5% Convertible Subordinated Preferred Equivalent
Debentures.......................................... -- 350,000(a) 350,000
Stockholders' investment:
Common stock........................................ 50,614 -- 50,614
Capital in excess of par............................ 404,254 -- 404,254
Retained earnings................................... 191,740 -- 191,740
Foreign currency translation adjustment............. (8,828) -- (8,828)
Treasury stock, at cost............................. (151,940) -- (151,940)
--------- -------- ----------
Total stockholders' investment.............. 485,840 -- 485,840
--------- -------- ----------
$ 896,345 $350,000 $1,246,345
========= ======== ==========
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PRO FORMA CONDENSED CONSOLIDATED STATEMENT OF INCOME
FOR THE TWELVE MONTHS ENDED DECEMBER 31, 1996
(IN THOUSANDS, EXCEPT PER SHARE AMOUNTS)
TCA HISTORICAL PRO FORMA ADJUSTMENTS
EVI FOR THE GULFMARK ------------------------------ EVI
HISTORICAL SIX MONTHS ENDED RETAINED ASSETS GULFMARK THE PRO
CONSOLIDATED JUNE 30, 1996(C) HISTORICAL TCA MERGER OFFERING FORMA
------------ ---------------- --------------- ------ -------- -------- --------
Revenues........................ $478,020 $28,260 $6,994 $ -- $ -- $ -- $513,274
-------- ------- ------ ------ ------- -------- --------
Costs and expenses:
Cost of sales................. 373,509 24,381 3,922 579(d) -- -- 402,391
Selling, general and
administrative attributable
to segments................. 51,885 1,006 2,068 197(e) -- -- 55,156
Corporate, general and
administrative.............. 6,339 -- -- -- -- -- 6,339
-------- ------- ------ ------ ------- -------- --------
431,733 25,387 5,990 776 -- -- 463,886
-------- ------- ------ ------ ------- -------- --------
Operating income................ 46,287 2,873 1,004 (776) -- -- 49,388
-------- ------- ------ ------ ------- -------- --------
Other income (expense):
Interest expense.............. (16,454) (602) -- 602(f) -- (17,845)(g) (34,299)
Interest income............... 2,163 -- -- -- -- -- 2,163
Other income (expense), net... (450) (742) 6,264 875(h) (6,264)(i) -- (317)
-------- ------- ------ ------ ------- -------- --------
(14,741) (1,344) 6,264 1,477 (6,264) (17,845) (32,453)
-------- ------- ------ ------ ------- -------- --------
Income (loss) before income
taxes......................... 31,546 1,529 7,268 701 (6,264) (17,845) 16,935
Provision (benefit) for income
taxes......................... 7,041 34 2,472 245(j) (2,192)(j) (6,246)(j) 1,354
-------- ------- ------ ------ ------- -------- --------
Income (loss) from continuing
operations.................... $ 24,505 $ 1,495 $4,796 $ 456 $(4,072) $(11,599) $ 15,581
======== ======= ====== ====== ======= ======== ========
Earnings per share from
continuing operations......... $ 0.60 $ 0.38(k)
Weighted average shares
outstanding................... 40,706 41,298(k)
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PRO FORMA CONDENSED CONSOLIDATED STATEMENT OF INCOME
FOR THE SIX MONTHS ENDED JUNE 30, 1997
(IN THOUSANDS, EXCEPT PER SHARE AMOUNTS)
GULFMARK
RETAINED ASSETS
HISTORICAL FOR THE
EVI THREE MONTHS
HISTORICAL ENDED OFFERING EVI
CONSOLIDATED MARCH 31, 1997(l) ADJUSTMENTS PRO FORMA
------------ ------------------ ----------- ---------
Revenues.................................... $376,108 $ 818 $ -- $376,926
-------- ------- -------- --------
Costs and expenses:
Cost of sales............................. 281,318 678 -- 281,996
Selling, general and administrative
attributable to segments............... 39,072 688 -- 39,760
Corporate, general and administrative..... 3,509 -- -- 3,509
-------- ------- -------- --------
323,899 1,366 -- 325,265
-------- ------- -------- --------
Operating income............................ 52,209 (548) -- 51,661
-------- ------- -------- --------
Other income (expense):
Interest expense.......................... (8,166) -- (8,923)(g) (17,089)
Interest income........................... 3,408 -- -- 3,408
Gain on sale of marketable securities..... 3,352 -- -- 3,352
Other income (expense), net............... 763 -- -- 763
-------- ------- -------- --------
(643) -- (8,923) (9,566)
-------- ------- -------- --------
Income (loss) before income taxes........... 51,566 (548) (8,923) 42,095
Provision (benefit) for income taxes........ 18,159 100 (3,123)(j) 15,136
-------- ------- -------- --------
Income (loss) from continuing operations.... $ 33,407 $(648) $ (5,800) $ 26,959
======== ======= ======== ========
Earnings per share from continuing
operations................................ $ 0.73 $ 0.59(k)
Weighted average shares outstanding......... 45,711 45,711(k)
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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 $350 million principal amount of the
Debentures and the payment of approximately $10.4 million of related debt
issuance costs.
(b) To capitalize approximately $10.4 million of debt issuance costs
related to the Debentures.
The adjustments to the accompanying unaudited pro forma condensed
consolidated statements of income are described below:
(c) 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.
(d) 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.
(e) To record amortization expense relating to the estimated $15.8
million of 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.
(f) 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.
(g) 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.
(h) To eliminate certain expenses incurred by TCA relating to the
Company's acquisition of TCA. These expenses relate to amounts paid to an
investment banking firm which represented TCA in the Company's acquisition
of TCA.
(i) 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.
(j) To record the income tax provision (benefit) related to the effect
of the pro forma adjustments at the statutory rate.
(k) 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 June 30, 1997, historical and pro forma shares of
Common Stock outstanding are 45,830,540.
(l) 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.
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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.
EVI, INC.
Dated: March 26, 1998 /s/ Frances R. Powell
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Frances R. Powell
Vice President, Accounting
and Controller
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