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): April 20, 1999
BOLT TECHNOLOGY CORPORATION
(Exact name of registrant as specified in its charter)
Commission File Number 0-10723
CONNECTICUT 06-0773922
(State or other jurisdiction of (I.R.S. Employer
of incorporation) Identification No.)
Four Duke Place
Norwalk, Connecticut 06854
(Address of principal executive offices)
(Zip Code)
(203) 853-0700
(Registrant's telephone number, including area code)
Not applicable
(Former name or former address, if changed since last report)
(1)
Item 7. Financial Statements and Exhibits.
(a) Financial Statements of business acquired.
The following financial statements of A-G Geophysical Products, Inc. are
included herein:
Independent Auditors' Report
Balance Sheets - September 30, 1998 and 1997
Statements of Income and Retained Earnings for the years ended September 30,
1998 and 1997
Statements of Cash Flows for the years ended September 30, 1998 and 1997
Notes to the Financial Statements
Balance Sheet - March 31, 1999 (unaudited)
Statements of Income and Retained Earnings for the six months ended March 31,
1999 and 1998 (unaudited)
Statements of Cash flows for the six months ended March 31, 1999 and 1998
(unaudited)
Notes to Unaudited Financial Statements.
(b) Pro Forma Financial Information.
The following pro forma financial information of Bolt Technology Corporation is
included herein:
Introduction
Pro forma Consolidated Balance Sheets - March 31, 1999 (unaudited)
Pro forma Consolidated Statements of Income for the year ended June 30, 1998
(unaudited)
Pro forma Consolidated Statements of Income for the nine months ended March 31,
1999 (unaudited)
(2)
A-G Geophysical Products, Inc.
Financial Statements for the Years Ended
September 30, 1998 and 1997 and Independent
Auditors' Report
(3)
A-G GEOPHYSICAL PRODUCTS, INC.
TABLE OF CONTENTS
- --------------------------------------------------------------------------------
Page
INDEPENDENT AUDITORS' REPORT 1
FINANCIAL STATEMENTS FOR THE YEARS ENDED SEPTEMBER 30, 1998 AND 1997:
Balance Sheets 3
Statements of Income and Retained Earnings 4
Statements of Cash Flows 5
Notes to Financial Statements 6
FINANCIAL STATEMENTS FOR THE SIX MONTHS ENDED MARCH 31, 1999 AND
1998 (UNAUDITED):
Balance Sheet (Unaudited) 10
Statements of Income and Retained Earnings (Unaudited) 11
Statements of Cash Flows (Unaudited) 12
Notes to Unaudited Financial Statements 13
(4)
INDEPENDENT AUDITORS' REPORT
To the Board of Directors and Stockholders of
A-G Geophysical Products, Inc.
Cypress, Texas
We have audited the accompanying balance sheet of A-G Geophysical Products, Inc.
(the "Company") as of September 30, 1998, and we were engaged to audit the
related statements of income and retained earnings and cash flows for the year
then ended. We were also engaged to audit the balance sheet of the Company as of
September 30, 1997, and the related statements of income and retained earnings
and cash flows for the year then ended. These financial statements are the
responsibility of the Company's management. Our responsibility is to express (or
disclaim) an opinion on these financial statements based on our audits.
Except as discussed in the following paragraph, we conducted our audits 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
audits provide a reasonable basis for our opinion.
Because we were engaged as auditors after September 30, 1997, we were not
present to observe the taking of the physical inventories as of that date, nor
have we been able to satisfy ourselves concerning the inventory quantities at
September 30, 1997 and 1996 by means of other auditing procedures. Furthermore,
in our judgment, the amounts of the inventories as of September 30, 1997 and
1996 materially affect the determination of the financial position as of
September 30, 1997 and the results of operations and the cash flows for the
years ended September 30, 1998 and 1997.
Because of the matter discussed in the preceding paragraph, the scope of our
work was not sufficient to enable us to express, and we do not express, an
opinion on the financial position of the Company as of September 30, 1997 and on
the results of operations and cash flows for the years ended September 30, 1998
and 1997.
(5)
In our opinion, the accompanying 1998 balance sheet presents fairly, in all
material respects, the financial position of the Company as of September 30,
1998 in conformity with generally accepted accounting principles.
/s/ Deloitte & Touche LLP
Houston, Texas
August 12, 1999
(6)
A-G GEOPHYSICAL PRODUCTS, INC.
BALANCE SHEETS,
SEPTEMBER 30, 1998 AND 1997
- ---------------------------------------------------------------------------------------------------------------
ASSETS 1998 1997
CURRENT ASSETS:
Cash and cash equivalents $ 564,762 $ 459,662
Accounts receivable:
Trade 1,720,813 985,190
Other 674
Inventory 1,586,193 317,808
Other current assets 55,399 132,475
---------- ----------
Total current assets 3,927,841 1,895,135
PROPERTY AND EQUIPMENT, Net 1,257,355 1,124,331
---------- ----------
TOTAL $5,185,196 $3,019,466
========== ==========
LIABILITIES AND STOCKHOLDERS' EQUITY
CURRENT LIABILITIES:
Accounts payable $ 320,156 $ 180,333
Accrued liabilities 1,113,538 415,898
Deferred tax liability 10,639 136,000
---------- ----------
Total current liabilities 1,444,333 732,231
STOCKHOLDERS' EQUITY:
Common stock, no par value; 4,062 and 4,000 shares authorized,
4,000 shares issued and outstanding in 1998 and 1997, respectively 4,000 4,000
Retained earnings 3,736,863 2,283,235
---------- ----------
Total stockholders' equity 3,740,863 2,287,235
---------- ----------
TOTAL $5,185,196 $3,019,466
========== ==========
See notes to financial statements.
(7)
A-G GEOPHYSICAL PRODUCTS, INC.
STATEMENTS OF INCOME AND RETAINED EARNINGS
FOR THE YEARS ENDED SEPTEMBER 30, 1998 AND 1997
- ----------------------------------------------------------------------------------
1998 1997
REVENUES $9,745,443 $6,389,377
COSTS AND EXPENSES:
Cost of goods sold 2,804,701 2,822,395
Selling, general and administrative 4,665,639 2,714,833
Depreciation and amortization 155,807 115,385
---------- ----------
Total costs and expenses 7,626,147 5,652,613
---------- ----------
OTHER INCOME 83,171 10,900
---------- ----------
INCOME BEFORE INCOME TAXES 2,202,467 747,664
INCOME TAX EXPENSE:
Current 874,200 116,000
Deferred (125,361) 136,000
---------- ----------
NET INCOME 1,453,628 495,664
RETAINED EARNINGS, BEGINNING OF YEAR 2,283,235 1,787,571
---------- ----------
RETAINED EARNINGS, END OF YEAR $3,736,863 $2,283,235
========== ==========
See notes to financial statements.
(8)
A-G GEOPHYSICAL PRODUCTS, INC.
STATEMENTS OF CASH FLOWS
FOR THE YEARS ENDED SEPTEMBER 30, 1998 AND 1997
- -----------------------------------------------------------------------------------------------------
1998 1997
CASH FLOWS FROM OPERATING ACTIVITIES:
Net income $ 1,453,628 $ 495,664
Adjustments to reconcile net income to net cash provided by
operating activities:
Depreciation and amortization 155,807 115,385
Gain on sale of assets (3,500)
Leasehold abandonment 74,538
Deferred taxes (125,361) 136,000
Changes in assets and liabilities:
Trade receivables (735,623) 68,241
Other receivables (674) 5,409
Inventory (1,268,385) (218)
Other current assets 77,076 (110,867)
Accounts payable 139,823 (272,016)
Accrued liabilities 697,640 211,698
----------- ---------
Net cash provided by operating activities 390,431 723,834
----------- ---------
CASH FLOWS USED IN INVESTING ACTIVITIES:
Capital expenditures (288,831) (576,579)
Proceeds from sale of assets 3,500
----------- ---------
Net cash used in investing activities (285,331) (576,579)
----------- ---------
INCREASE IN CASH AND CASH EQUIVALENTS 105,100 147,255
CASH AND CASH EQUIVALENTS, BEGINNING OF YEAR 459,662 312,407
----------- ---------
CASH AND CASH EQUIVALENTS, END OF YEAR $ 564,762 $ 459,662
=========== =========
SUPPLEMENTAL CASH FLOW INFORMATION -
Taxes paid $ 420,000 $ 243,596
=========== =========
See notes to financial statements.
(9)
A-G GEOPHYSICAL PRODUCTS, INC.
NOTES TO FINANCIAL STATEMENTS
FOR THE YEARS ENDED SEPTEMBER 30, 1998 AND 1997
- --------------------------------------------------------------------------------
1. ORGANIZATION AND SIGNIFICANT ACCOUNTING POLICIES
Organization - A-G Geophysical Products, Inc. (the "Company") was
incorporated in Texas in 1978. The Company develops, manufactures and sells
patented underwater electrical connectors and cables, air gun signature
hydrophones and pressure transducers for the marine seismic industry.
Cash and Cash Equivalents - Cash and cash equivalents consist of all cash
balances and highly liquid investments which have an original maturity at
purchase of three months or less.
Accounts Receivables - The Company considers accounts receivable to be fully
collectible; accordingly, no allowance for doubtful accounts has been
recorded as of September 30, 1998 and 1997. The Company has recorded $30 and
$591 of bad debt expense for the years ended September 30, 1998 and 1997,
respectively.
Inventories - Inventories are valued at the lower of cost or market, with
cost principally determined on an average-cost method which approximates the
first-in first-out method.
Property and Equipment - Property and equipment and leasehold improvements
are carried at cost, less accumulated depreciation and amortization.
Depreciation is calculated using the straight-line method of accounting over
the estimated useful lives of the assets. The estimated useful lives of the
Company's assets are as follows:
Leasehold improvements 32 years
Machinery and equipment 7-10 years
Furniture and fixtures 7 years
Automobiles and vehicles 5 years
Ordinary maintenance and repairs are charged to income, and expenditures
which extend the physical or economic lives of the assets are capitalized.
Gains or losses on disposition of assets sold are recognized in income, and
the related assets and accumulated depreciation accounts are adjusted
accordingly.
Revenue Recognition - The Company recognizes revenue in the period that
products are shipped to third-party customers.
Impairments of Long-Lived Assets - The Company evaluates it's long-lived
assets for impairment based on the recoverability of the assets carrying
value. When it is probable that the undiscounted future cash flows will not
be sufficient to recover the carrying amount, the asset is written down to
its fair market value.
(10)
Use of Estimates - The preparation of the Company's financial statements in
conformity with generally accepted accounting principles requires the
Company's management to make estimates and assumptions that affect the
amounts reported in these financial statements and the accompanying results.
Actual results could differ from these estimates.
New Accounting Pronouncement - In June 1998 the Financial Accounting
Standards Board issued a new disclosure standard, Statement of Financial
Accounting Standards ("SFAS") No. 133. "Accounting for Derivative Instruments
and Hedging Activities." This new standard establishes accounting and
reporting standards for derivative instruments, including certain derivative
instruments embedded in other contracts, (collectively referred to as
derivatives) and for hedging activities. It requires that an entity recognize
all derivatives as either assets or liabilities in the statement of financial
position and measure those instruments at fair value. The effect of adoption
of SFAS 133 has not been determined.
2. INVENTORY
Inventory consisted of the following:
SEPTEMBER 30,
----------------------------
1998 1997
Raw materials and subassembles $1,482,205 $317,808
Work-in-progress 88,331
Finished goods 15,657
---------- --------
Total $1,586,193 $317,808
========== ========
3. INCOME TAXES
The Company accounts for income taxes in accordance with SFAS No. 109,
"Accounting for Income Taxes," which requires the use of the "liability
method." Under the liability method, deferred tax assets and liabilities are
recognized for the future tax consequences attributable to the differences
between the financial statement carrying value of existing assets and
liabilities and their respective tax bases. Deferred tax assets and
liabilities are measured by using enacted tax rates that are applicable to
the future years in which deferred tax assets or liabilities are expected to
be realized or settled.
Income tax expense differs from the amount computed by applying the statutory
federal income tax rate to income before income taxes because of
nondeductible expenses. The components of the deferred tax liabilities relate
primarily to accruals and differences in periods in which revenue was
recognized between tax and financial reporting purposes.
(11)
4. PROPERTY AND EQUIPMENT
A summary of property and equipment is as follows:
SEPTEMBER 30,
------------------------------
1998 1997
Machinery and equipment $1,310,355 $1,145,874
Furniture and fixtures 160,450 141,635
Automobiles and vehicles 83,619 67,719
Leasehold improvements 492,720 417,325
---------- ----------
Total 2,047,144 1,772,553
Less accumulated depreciation and amortization (789,789) (648,222)
---------- ----------
Total $1,257,355 $1,124,331
========== ==========
5. EMPLOYEE BENEFIT PLANS
During 1997 and 1998 the Company provided a defined benefit plan and a
defined contribution plan for all eligible employees who had completed one
year of service and attained the age of 21. Both plans became effective on
January 1, 1995. In connection with the sale of the Company (see Note 8),
applications for the termination of the plans were filed with the Internal
Revenue Service on July 9, 1999. The proposed date of termination in the
respective applications was May 31, 1999. Contributions made by the Company
in 1998 and 1997 were approximately $114,000 and $114,000 to the defined
benefit plan and approximately $78,000 and $63,000 to the defined
contribution plan, respectively. In connection with the termination of the
plans, the Company has not received nor does it anticipate receiving any
funds from the plans. The net assets of the defined contribution plan at the
termination date were approximately $215,000. The net assets of the defined
benefit plan available to pay benefits at the termination date were
approximately $479,000 and the related distributable benefits were
approximately $350,000. The assets of both plans are invested principally in
unallocated contracts with insurance companies or cash accounts.
6. TRANSACTIONS WITH RELATED PARTIES
During 1997 the Company entered into a lease agreement with a stockholder.
The Company makes monthly lease payments of $9,000 to a stockholder to rent
office space and a manufacturing facility. The Company is also responsible
for the related property tax on the facility. Total lease and tax obligations
paid or accrued to or on behalf of the stockholder was $108,000 and $45,000
for the period ended September 30, 1998 and 1997, respectively. The Company
incurred salary expenses to a stockholder of approximately $1,719,000 and
$963,000 for the years ended September 30, 1998 and 1997, respectively, and
salary expenses to close relatives of the stockholder of approximately
$161,000 and $172,000 for the years ended September 30, 1998 and 1997,
respectively. In addition, during 1998, the Company paid the stockholder
$100,000 for consultation and management of the facilities construction.
(12)
7. COMMITMENTS AND CONTINGENCIES
The Company is involved in various legal proceedings arising in the normal
course of business. In the opinion of management, the Company's liability,
if any, in these pending actions would not have a material adverse effect on
the financial position, operating results, or cash flows of the Company.
8. SUBSEQUENT EVENTS
On April 20, 1999, the Company's stockholders agreed to sell all of the
outstanding stock of the Company to Bolt Technology Corporation for an
aggregate purchase price of approximately $13.8 million.
(13)
A-G GEOPHYSICAL PRODUCTS, INC.
BALANCE SHEET
- --------------------------------------------------------------------------------
March 31,
1999
ASSETS (Unaudited)
CURRENT ASSETS:
Cash and cash equivalents $1,685,130
Accounts receivable:
Trade (less allowance of $70,000) 1,288,952
Inventory 2,043,290
Other current assets 43,069
----------
Total current assets 5,060,441
PROPERTY AND EQUIPMENT, Net 1,194,223
OTHER ASSETS 11,000
----------
TOTAL $6,265,664
==========
LIABILITIES AND STOCKHOLDERS' EQUITY
CURRENT LIABILITIES:
Accounts payable $ 172,594
Accrued liabilities 1,088,550
Deferred tax liability 10,639
----------
Total current liabilities 1,271,783
STOCKHOLDERS' EQUITY:
Common stock, no par value; 4,062 shares authorized, 4,000 shares issued
and outstanding at March 31, 1999 4,000
Retained earnings 4,989,881
----------
Total stockholders' equity 4,993,881
----------
TOTAL $6,265,664
==========
See notes to financial statements.
(14)
A-G GEOPHYSICAL PRODUCTS, INC.
STATEMENTS OF INCOME AND RETAINED EARNINGS
FOR SIX MONTHS ENDED MARCH 30, 1999 AND 1998 (UNAUDITED)
- --------------------------------------------------------------------------------
1999 1998
REVENUES $4,498,407 $4,232,931
COSTS AND EXPENSES:
Cost of goods sold 1,376,409 1,718,060
Selling, general and administrative 1,130,576 1,209,906
Depreciation and amortization 84,378 76,227
---------- ----------
Total costs and expenses 2,591,363 3,004,193
---------- ----------
OTHER INCOME 21,863 51,040
---------- ----------
INCOME BEFORE INCOME TAXES 1,928,907 1,279,778
INCOME TAX EXPENSE 675,889 435,125
---------- ----------
NET INCOME 1,253,018 844,653
RETAINED EARNINGS, BEGINNING OF PERIOD 3,736,863 2,283,235
---------- ----------
RETAINED EARNINGS, END OF PERIOD $4,989,881 $3,127,888
========== ==========
See notes to financial statements.
(15)
A-G GEOPHYSICAL PRODUCTS, INC.
STATEMENTS OF CASH FLOWS
FOR SIX MONTHS ENDED MARCH 30, 1999 AND 1998 (UNAUDITED)
- --------------------------------------------------------------------------------
1999 1998
CASH FLOWS FROM OPERATING ACTIVITIES:
Net income $1,253,018 $ 844,653
Adjustments to reconcile net income to net cash provided by
operating activities:
Depreciation and amortization 84,378 76,227
Gain on sale of assets and other (11,000) (3,500)
Allowance for doubtful accounts 70,000
Changes in assets and liabilities:
Trade receivables 361,861 (466,060)
Other receivables 674 (5,922)
Inventory (457,097) (30,770)
Other current assets 12,330 (54,929)
Accounts payable (147,562) 126,827
Accrued liabilities (24,988) 125,197
---------- ---------
Net cash provided by operating activities 1,141,614 611,723
---------- ---------
CASH FLOWS USED IN INVESTING ACTIVITIES:
Capital expenditures (21,246) (198,230)
Proceeds from sale of assets 3,500
---------- ---------
Net cash used in investing activities (21,246) (194,730)
---------- ---------
INCREASE IN CASH AND CASH EQUIVALENTS 1,120,368 416,993
CASH AND CASH EQUIVALENTS, BEGINNING OF PERIOD 564,762 459,662
---------- ---------
CASH AND CASH EQUIVALENTS, END OF PERIOD $1,685,130 $ 876,655
========== =========
SUPPLEMENTAL CASH FLOW INFORMATION -
Taxes paid $ 344,600 $ 20,000
========== =========
See notes to financial statements.
(16)
A-G GEOPHYSICAL PRODUCTS, INC.
NOTES TO UNAUDITED FINANCIAL STATEMENTS
FOR THE SIX MONTHS ENDED MARCH 30, 1999 AND 1998
- --------------------------------------------------------------------------------
1. GENERAL
Organization - A-G Geophysical Products, Inc. (the "Company") was
incorporated in Texas in 1978. The Company develops, manufactures, and sells
patented underwater electrical connectors and cables, air gun signature
hydrophones, and pressure transducers for the marine seismic industry.
Interim Financial Information - The accompanying consolidated financial
statements have been prepared in accordance with generally accepted
accounting principles for interim financial information. Accordingly, they
do not include all disclosures required by generally accepted accounting
principles for complete financial statements. The financial information has
not been audited but, in the opinion of management, includes all adjustments
(consisting only of normal recurring accruals) necessary for a fair
presentation of the balance sheets, statements of income, and statements of
cash flows at the dates and for the periods indicated. Results of operations
for interim periods are not necessarily indicative of results of operations
for the respective full years.
2. INVENTORY
Inventory consisted of the following:
March 31,
1999
(Unaudited)
Raw materials and subassemblies $1,797,949
Work-in-progress 188,189
Finished goods 57,152
----------
Total $2,043,290
==========
3. EMPLOYEE BENEFIT PLANS
During 1998 and 1999 the Company provided a defined benefit plan and a
defined contribution plan for all eligible employees who had completed one
year of service and attained the age of 21. Both plans became effective on
January 1, 1995. In connection with the sale of the Company (see Note 5),
applications for the termination of the plans were filed with the Internal
Revenue Service on July 9, 1999. The proposed date of termination in the
respective applications was May 31, 1999. In connection with the termination
of the plans, the Company has not received nor does it anticipate receiving
any funds from the plans. The net assets of the defined contribution plan at
the termination date were approximately $215,000. The net assets of the
defined benefit plan available to pay benefits at the termination date were
approximately $479,000 and the related distributable benefits were
approximately $350,000. The assets of both plans are invested principally in
unallocated contracts with insurance companies or cash accounts.
(17)
4. COMMITMENTS AND CONTINGENCIES
The Company is involved in various legal proceedings arising in the normal
course of business. In the opinion of management, the Company's liability,
if any, in these pending actions would not have a material adverse effect on
the financial position, operating results, or cash flows of the Company.
5. SUBSEQUENT EVENTS
On April 20, 1999, the Company's stockholders agreed to sell all of the
outstanding stock of the Company to Bolt Technology Corporation for an
aggregate purchase price of approximately $13.8 million.
******
(18)
Pro Forma Consolidated Financial Statements
( Unaudited)
Introduction
- ------------
On April 20, 1999, Bolt Technology Corporation, (the "Company"), a Connecticut
corporation, acquired A-G Geophysical Products, Inc. ("AG"). This acquisition
was effected by the Company acquiring all of the outstanding stock of AG from
Albert H. Gerrans, Jr., Stephen Clay and Robert Bernard. A G is a leading
developer and manufacturer of patented underwater electrical connectors and
cables, air gun signature hydrophones and pressure transducers for the marine
seismic industry.
The aggregate consideration paid by the Company for the acquisition described
above was $13,783,000 and consisted of $6,100,000 of cash; 63,492 shares of the
Company's common stock valued at $500,000; a note to Mr. Gerrans for $7,000,000
and acquisition costs of $183,000. The Company used its cash to fund the cash
portion of the consideration.
The purchase price for shares of AG capital stock was determined through arms'
length negotiations between management of the Company on the one hand and AG and
AG's stockholders on the other hand. Neither AG nor its stockholders had any
material relationship prior to acquisition with the Company, any affiliates of
the Company, any director or officer of the Company or any associate of any such
director or officer.
To effect the acquisition, certain terms and financial covenants of the
Company's unsecured line of credit with Fleet National Bank were modified.
The accompanying unaudited pro forma consolidated balance sheets of the Company
as of March 31, 1999 gives effect to the acquisition of AG which was completed
April 20, 1999 and the financing of the acquisition, as if the transaction had
occurred on March 31, 1999.
The accompanying unaudited pro forma consolidated statements of income for the
year ended June 30, 1998 and for the nine months ended March 31, 1999 give
effect to the acquisition of AG and the financing thereof, as if the transaction
had occurred on July 1, 1997. The unaudited pro forma consolidated statements of
income for the year ended June 30, 1998 combine the results of operations of the
Company for the twelve months ended June 30, 1998 and the results of operations
of AG for the twelve months ended September 30, 1998. The unaudited pro forma
consolidated statements of income for the nine months ended March 31, 1999
combine the results of operations of both the Company and AG for the period July
1, 1998 to March 31, 1999.
The pro forma consolidated financial statements are based upon certain
assumptions and estimates which are subject to change. These statements are not
necessarily indicative of the actual results of operations that might have
occurred, nor are they necessarily indicative of expected results in the future.
The pro forma consolidated financial statements should be read in conjunction
with the Company's historical consolidated financial statements and notes
included in the Company's annual report on Form 10-K for the year ended June 30,
1998.
(19)
Bolt Technology Corporation
Pro Forma Consolidated Balance Sheets
March 31, 1999
(Unaudited)
Bolt Technology AG Geophysical Pro Forma Pro Forma
Corporation Products, Inc. (a) Adjustments (b) Consolidated
---------------- ----------------- ---------------- ------------
Assets
Current Assets:
Cash and cash equivalents $ 6,326,000 $1,685,000 $(6,100,000)(c) $ 1,911,000
Accounts receivable, net 3,102,000 1,289,000 4,391,000
Inventories 2,750,000 2,043,000 500,000 (d) 5,293,000
Deferred income taxes and
other current assets 1,031,000 43,000 1,074,000
----------- ---------- ----------- ----------
Total current assets 13,209,000 5,060,000 (5,600,000) 12,669,000
----------- ---------- ----------- -----------
Plant and equipment, net 235,000 1,194,000 69,000 (e) 1,498,000
Goodwill, net 4,172,000 - 8,600,000 (c) 12,772,000
Deferred income taxes 1,914,000 - (185,000)(c) 1,729,000
Other assets 132,000 11,000 143,000
----------- ---------- ----------- ----------
Total Assets $19,662,000 $6,265,000 $ 2,884,000 $28,811,000
=========== ========== =========== ===========
Liabilities and Stockholders' Equity
Current Liabilities:
Current portion of debt $ - $ - $ 1,700,000 (c) $ 1,700,000
Accounts payable 1,024,000 80,000 - 1,104,000
Accrued liabilities 1,530,000 329,000 283,000 (c) 2,142,000
Income taxes payable - 862,000 95,000 (c) 957,000
----------- ---------- ----------- -----------
Total current liabilities 2,554,000 1,271,000 2,078,000 (c) 5,903,000
----------- ---------- ----------- -----------
Long-term debt - - 5,300,000 (c) 5,300,000
Stockholders' Equity:
Common stock 25,617,000 4,000 496,000 (c) 26,117,000
Retained earnings (deficit) (8,509,000) 4,990,000 (4,990,000)(c) (8,509,000)
----------- ---------- ----------- -----------
Total stockholders' equity 17,108,000 4,994,000 (4,494,000) 17,608,000
----------- ---------- ----------- -----------
Total liabilities and
stockholders' equity $19,662,000 $6,265,000 $ 2,884,000 $28,811,000
=========== ========== =========== ===========
(20)
Bolt Technology Corporation
Pro Forma Consolidated Statements Of Income
For the Year Ended June 30, 1998
(Unaudited)
Bolt Technology G Geophysical Pro Forma Pro Forma
Corporation Products, Inc. Adjustments Consolidated
--------------- -------------- ----------- ------------
Revenues:
Sales $ 18,053,000 $ 9,745,000 $ (310,000)(b) $ 27,488,000
--------------- -------------- ----------- ------------
Cost and Expenses:
Cost of sales (a) 9,745,000 2,960,000 (310,000)(b) 12,434,000
39,000 (c)
Research and development 216,000 - 216,000
Selling, general and
administrative 3,300,000 4,666,000 (1,499,000)(d) 6,467,000
Interest (income) expense,
net (98,000) (83,000) 629,000 (e) 448,000
Amortization of intangibles 114,000 - 430,000 (f) 544,000
--------------- -------------- ----------- ------------
13,277,000 7,543,000 (711,000) 20,109,000
--------------- -------------- ----------- ------------
Income before taxes 4,776,000 2,202,000 401,000 7,379,000
Provision (benefit)
for income taxes (358,000) 749,000 282,000 (g) 673,000
--------------- -------------- ----------- ------------
Net Income $ 5,134,000 $ 1,453,000 $ 119,000 $ 6,706,000
=============== ============== =========== ============
Earnings per share: (h)
Basic earnings per share $ 1.00 $ 1.29
Diluted earnings per share $ 0.97 $ 1.25
Shares outstanding- basic 5,146,185 5,209,677
Shares outstanding- diluted 5,287,355 5,350,847
(21)
Bolt Technology Corporation
Pro Forma Consolidated Statements Of Income
For The Nine Months Ended March 31, 1999
(Unaudited)
Bolt Technology AG Geophysical Pro Forma Pro Forma
Corporation Products, Inc. Adjustments Consolidated
----------- -------------- ----------- ------------
Revenues:
Sales $ 15,827,000 $ 7,308,000 $ (75,000)(b) $23,060,000
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Cost and Expenses:
Cost of sales (a) 8,149,000 2,361,000 (75,000)(b) 10,464,000
29,000 (c)
Research and development 289,000 - - 289,000
Selling, general and
administrative 2,737,000 3,608,000 (1,634,000)(d) 4,711,000
Interest (income) expense,
net (109,000) (22,000) 397,000 (e) 266,000
Amortization of intangibles 171,000 - 322,000 (f) 493,000
------------- -------------- ----------- -----------
11,237,000 5,947,000 (961,000) 16,223,000
------------- -------------- ----------- -----------
Income before taxes 4,590,000 1,361,000 886,000 6,837,000
Provision for income taxes 566,000 483,000 410,000 (g) 1,459,000
------------- -------------- ----------- -----------
Net Income $ 4,024,000 $ 878,000 $ 476,000 $ 5,378,000
============= ============== =========== ===========
Earnings per share: (h)
Basic earnings per share $ 0.76 $ 1.01
Diluted earnings per share $ 0.75 $ 0.99
Shares outstanding- basic 5,267,415 5,330,907
Shares outstanding- diluted 5,363,079 5,426,571
(22)
Pro Forma Adjustments.
Balance Sheet Adjustments.
a. Represents historical cost of assets and liabilities of AG at March 31,
1999.
b. The allocation of the acquisition cost to the net assets of AG is based on
estimated fair values of its assets and liabilities. The allocation is subject
to revision based upon final determination of fair values of the assets and
liabilities. However, it is expected that any changes would not have a material
effect on the pro forma combined financial statements included herein.
The following table presents the allocation of the purchase price of AG.
Cash cost of acquisition $ 6,100,000
Issuance of common stock 500,000
Issuance of debt 7,000,000
Other acquisition costs 183,000
-----------
$13,783,000
===========
Net assets acquired $ 4,994,000
Fair value adjustments:
Inventories 500,000
Plant and equipment 69,000
Goodwill 8,600,000
Accrued liabilities (100,000)
Income taxes payable (95,000)
Deferred income taxes (185,000)
-----------
$13,783,000
===========
c. Records consideration paid for AG including issuance of debt and common
stock; eliminates equity of AG and records goodwill.
d. Adjusts carrying value of inventories to fair market value.
e. Adjusts carrying value of plant and equipment to fair market value.
(23)
Statement of Income adjustments:
a. The expense recognition of the inventory write-up to fair market value is
expected to result in a charge to cost of sales of $500,000 in the first year
subsequent to the acquisition. This nonrecurring charge is not reflected in the
Pro Forma Consolidated Statement of Income.
b. Elimination of intercompany sales and related cost of sales.
c. Adjusts depreciation expense based upon adjusted carrying values of
machinery and equipment and leasehold improvements.
d. Adjusts compensation to former owner of AG to current levels of
compensation.
e. Records interest expense relating to $7,000,000 note issued as part of the
purchase price and reduction in interest income from short-term investments used
for cash portion of purchase price. The note bears interest at 8.25% and
requires quarterly principal payments of $425,000.
f. Records the amortization of the excess of cost over net assets acquired
using estimated life of 20 years on the straight line basis.
g. Records provision for income taxes at the statutory rate of 34%.
h. Earnings per share is calculated by dividing net income by the pro forma
weighted average shares outstanding during the period. The pro forma weighted
average shares outstanding during the period is calculated as follows:
Year Ended Nine Months Ended
June 30, 1998 March 31, 1999
------------- -----------------
Basic:
Weighted average shares outstanding 5,146,185 5,267,415
Shares issued for acquisition 63,492 63,492
--------- ---------
5,209,677 5,330,907
========= =========
Diluted:
Weighted average shares outstanding 5,146,185 5,267,415
Shares issued for acquisition 63,492 63,492
Common stock equivalents - stock options 141,170 95,664
--------- ---------
5,350,847 5,426,571
========= =========
(24)
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.
BOLT TECHNOLOGY
By: /s/ Alan Levy
--------------
Alan Levy
Vice President - Finance
September 7, 1999
(25)