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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): October 1, 2004
AMENDMENT NO. 1
--------------------------
A.S.V., INC.
(Exact name of registrant as specified in its charter)
MINNESOTA 0-25620 41-1459569
(State or other jurisdiction (Commission (IRS Employer
of incorporation) File Number) Identification No.)
840 LILY LANE GRAND RAPIDS, MINNESOTA 55744
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code: (218) 327-3434
NOT APPLICABLE
(Former Name or Former Address, if Changed Since Last Report)
Check the appropriate box below if the Form 8-K filing is intended to
simultaneously satisfy the filing obligation of the registrant under any of the
following provisions (see General Instruction A.2. below):
[_] Written communications pursuant to Rule 425 under the Securities Act (17
CFR 230.425)
[_] Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR
240.14a-12)
[_] Pre-commencement communications pursuant to Rule 14d-2(b) under the
Exchange Act (17 CFR 240.14d-2(b))
[_] Pre-commencement communications pursuant to Rule 13e-4(c) under the
Exchange Act (17 CFR 240.13e-4(c))
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This Amendment No. 1 to Current Report on Form 8-K amends the registrant's
Current Report on Form 8-K filed on October 7, 2004.
ITEM 9.01 FINANCIAL STATEMENTS AND EXHIBITS
(a) Financial statements of business acquired.
The audited financial statements of Loegering Mfg. Inc.
("LMI") as of and for the year ended December 31, 2003, together with
the unaudited financial statements of LMI as of and for
the nine-month period ended September 30, 2004, appear on pages 3
through 16 of this Current Report on Form 8-K/A (Amendment No. 1).
(b) Pro forma financial information.
Page
A.S.V., Inc.:
Unaudited Pro Forma Combined Financial Data 17
Unaudited Pro Forma Combined Balance Sheet 18
Unaudited Pro Forma Combined Statement of Earnings 19
Notes to Unaudited Pro Forma Combined Financial Statements 21
(c) Exhibits.
2.1 Merger Agreement, dated as of October 1, 2004, by and among
A.S.V., Inc. (the "Company"), LMI, LMI Merger Corp., The
Marilyn A. Loegering Revocable Trust and Marilyn A.
Loegering (incorporated by reference to Exhibit 2.1 to the
Current Report on Form 8-K filed by the Company on October
7, 2004)
23.1 Consent of Eide Bailly LLP.
2
FINANCIAL STATEMENTS
SEPTEMBER 30, 2004 (UNAUDITED)
AND DECEMBER 31, 2003 (AUDITED)
LOEGERING MFG. INC.
3
INDEPENDENT AUDITOR'S REPORT
- --------------------------------------------------------------------------------
Board of Directors
LOEGERING MFG. INC.
Casselton, North Dakota
We have audited the accompanying balance sheet of LOEGERING MFG. INC. as of
December 31, 2003, and the related statements of operations, comprehensive
income, retained earnings and cash flows for the year than 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 auditing standards generally accepted
in the United States of America. 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 LOEGERING MFG. INC. as of
December 31, 2003, and the results of its operations and its cash flows for the
year then ended, in conformity with accounting principles generally accepted in
the United States of America.
/s/ EIDE BAILLY LLP
Fargo, North Dakota
February 6, 2004
LOEGERING MFG. INC.
BALANCE SHEETS
SEPTEMBER 30, 2004 (UNAUDITED)
AND DECEMBER 31, 2003 (AUDITED)
- --------------------------------------------------------------------------------
2004 2003
------------ ------------
(Unaudited) (Audited)
ASSETS
CURRENT ASSETS
Cash and cash equivalents $ -- $ 62,818
Available for sale securities -- 414,900
Receivables
Trade, less allowance of doubtful accounts of
$101,694 and $31,514 in 2004 and 2003, respectively 1,530,271 1,816,109
Current portion of note receivable 137,042 137,042
Other -- 4,414
Inventories 4,802,724 2,139,699
Prepaids 322,141 145,475
----------- -----------
Total current assets 6,792,178 4,720,457
----------- -----------
PROPERTY, PLANT AND EQUIPMENT 4,527,676 3,926,426
Less accumulated depreciation (3,049,234) (2,688,766)
----------- -----------
1,478,442 1,237,660
----------- -----------
OTHER ASSETS
Intangible assets, net of accumulated amortization
of $870,600 and $796,646 in 2004 and 2003, respectively 883,477 957,430
Note receivable, net of current portion 122,485 202,926
----------- -----------
1,005,962 1,160,356
----------- -----------
TOTAL ASSETS $ 9,276,582 $ 7,118,473
=========== ===========
See Independent Accountant's Report and Notes to Financial Statements.
5
- --------------------------------------------------------------------------------
2004 2003
------------ ----------
(Unaudited) (Audited)
LIABILITIES AND STOCKHOLDER'S EQUITY
CURRENT LIABILITIES
Short-term notes payable $3,050,000 $ 500,000
Current maturities of long-term debt 453,383 453,383
Accounts payable 2,360,048 1,437,379
Accrued expenses
Compensation 344,547 383,900
Warranties 81,321 46,392
Other 313,206 54,140
---------- ----------
Total current liabilities 6,602,505 2,875,194
---------- ----------
LONG-TERM DEBT, less current maturities 265,381 560,533
---------- ----------
STOCKHOLDER'S EQUITY
Common stock, 1200 shares
authorized, issued and outstanding 1,200 1,200
Retained earnings 2,407,496 3,639,540
Accumulated other comprehensive income
Unrealized holding gain (loss) on marketable securities -- 42,006
---------- ----------
2,408,696 3,682,746
---------- ----------
TOTAL LIABILITIES AND STOCKHOLDER'S EQUITY $9,276,582 $7,118,473
========== ==========
6
LOEGERING MFG. INC.
STATEMENTS OF OPERATIONS, COMPREHENSIVE INCOME AND RETAINED EARNINGS
PERIOD ENDED SEPTEMBER 30, 2004 (UNAUDITED)
AND YEAR ENDED DECEMBER 31, 2003 (AUDITED)
- --------------------------------------------------------------------------------
2004 2003
------------ ------------
(Unaudited) (Audited)
OPERATIONS AND COMPREHENSIVE INCOME
SALES $ 10,293,251 $ 12,373,570
COST OF SALES 5,032,777 5,363,686
------------ ------------
GROSS PROFIT 5,260,474 7,009,884
GENERAL AND ADMINISTRATIVE EXPENSES 5,792,448 6,274,294
------------ ------------
OPERATING INCOME (LOSS) (531,974) 735,590
OTHER INCOME (EXPENSE)
Other income (144,373) 29,799
Interest expense (123,940) (134,390)
------------ ------------
(268,313) (104,591)
------------ ------------
NET INCOME (LOSS) (800,287) 630,999
OTHER COMPREHENSIVE GAIN
Unrealized gain (loss) on available for sale securities -- 101,456
------------ ------------
COMPREHENSIVE INCOME (LOSS) $ (800,287) $ 732,455
============ ============
RETAINED EARNINGS
BALANCE, BEGINNING OF PERIOD $ 3,639,540 $ 3,273,453
Net income (loss) (800,287) 630,999
Distributions to member (431,757) (264,912)
------------ ------------
BALANCE, END OF PERIOD $ 2,407,496 $ 3,639,540
============ ============
See Independent Accountant's Report and Notes to Financial Statements.
7
LOEGERING MFG. INC.
STATEMENTS OF CASH FLOWS
PERIOD ENDED SEPTEMBER 30, 2004 (UNAUDITED)
AND YEAR ENDED DECEMBER 31, 2003 (AUDITED)
- --------------------------------------------------------------------------------
2004 2003
------------ -----------
(Unaudited) (Audited)
OPERATING ACTIVITIES
Net income (loss) $ (800,287) $ 630,999
Charges and credits to net earnings not affecting cash
Depreciation and amortization 434,422 522,074
Loss on sale of investment (3,048) 4,485
Changes in assets and liabilities
Receivables 290,252 (396,336)
Inventories (2,663,025) (560,694)
Prepaid expenses (176,666) (64,007)
Accounts payable 922,669 621,898
Accrued expenses 254,642 275,146
----------- -----------
NET CASH FROM OPERATING ACTIVITIES (1,741,041) 1,033,565
----------- -----------
INVESTING ACTIVITIES
Payments received on note receivable 80,441 125,289
Proceeds on sale of securities 591,314 194,170
Purchase of available for sale securities (215,372) (144,992)
Purchase of equipment (601,251) (261,400)
----------- -----------
NET CASH USED FOR INVESTING ACTIVITIES (144,868) (86,933)
----------- -----------
FINANCING ACTIVITIES
Net borrowing on short-term notes payable 2,550,000 (497,447)
Principal payments on long-term debt (295,152) (447,046)
Shareholder distributions (431,757) (264,912)
----------- -----------
NET CASH USED FOR FINANCING ACTIVITIES 1,823,091 (1,209,405)
----------- -----------
NET CHANGE IN CASH AND CASH EQUIVALENTS (62,818) (262,773)
CASH AND CASH EQUIVALENTS AT BEGINNING OF YEAR 62,818 325,591
----------- -----------
CASH AND CASH EQUIVALENTS AT END OF YEAR $ -- $ 62,818
=========== ===========
SUPPLEMENTAL DISCLOSURE
OF CASH FLOW INFORMATION
Cash paid during the year
Interest $ 118,587 $ 120,701
=========== ===========
See Independent Accountant's Report and Notes to Financial Statements.
8
LOEGERING MFG. INC.
NOTES TO FINANCIAL STATEMENTS
SEPTEMBER 30, 2004 (UNAUDITED)
AND DECEMBER 31, 2003 (AUDITED)
(See Independent Accountant's Report)
- --------------------------------------------------------------------------------
NOTE 1 - PRINCIPAL ACTIVITY AND SIGNIFICANT ACCOUNTING POLICIES
Principal Business Activity
The Company is engaged in the manufacturing and sale of steel tracks and other
utility attachments.
Concentrations of Credit Risk
The Company grants credit to distributors and dealers across the United States.
The Company maintains cash balances at one financial institution. The account is
ensured by the Federal Deposit Insurance Corporation up to $100,000. At times
during the year, the Company's bank balance exceeds this limit.
Receivables and Credit Policies
Trade receivables are uncollateralized customer obligations due under normal
trade terms requiring payment within 30 days from the invoice date. Unpaid trade
receivables with invoice dates over 60 days old bear interest at 1.5% per month.
Trade receivables are stated at the amount billed to the customer plus any
accrued and unpaid interest. Payments of trade receivables are allocated to the
specific invoices identified on the customer's remittance advice or, if
unspecified, are applied to the earliest unpaid invoices. The carrying amount of
the trade receivables is reduced by an amount that reflects management's best
estimate of the amounts that will not be collected.
Revenue Recognition
Sales are recognized upon shipment of the related equipment and replacement
parts.
Investments
The Company's available for sale securities are held in mutual funds and
equities. Unrealized holding gains and losses on the available for sale
securities are reported as a net amount in a separate component of the
stockholder's equity until realized. Gains and losses on the sale of securities
available-for-sale are determined using the specific identification method.
Inventories
Inventories of raw materials, work-in-process and finished goods are valued at
lower of cost (standard cost) or market.
(continued on next page)
9
NOTES TO FINANCIAL STATEMENTS
(See Independent Accountant's Report)
- --------------------------------------------------------------------------------
Property and Equipment
Property and equipment are stated at cost. Expenditures for renewals and
improvements that significantly add to the productive capacity or extend the
useful life of an asset are capitalized. Expenditures for maintenance and
repairs are charged to expense. Depreciation is computed using the straight-line
and declining-balance methods. The estimated useful lives used in the
computation of depreciation are 5-40 years.
Intangible Assets
Patents, stated at cost less accumulated amortization, are amortized on the
straight-line method over a fifteen year period. The non-compete and other
intangible assets, stated at cost less accumulated amortization, are amortized
on the straight-line method over a five year period.
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 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.
Cash Equivalents
The company considers all highly liquid investments with an original maturity of
three months or less as cash equivalents.
Advertising
Advertising costs are expensed as incurred. Advertising expense totaled $268,281
for the period ended September 30, 2004 and $311,877 for the year ended December
31, 2003.
Research and Development
Research and Development costs are expensed as incurred. Research and
development expense totaled $654,707 for the period ended September 30, 2004 and
$495,855 for the year ended December 31, 2003.
Reclassifications
Certain amounts have been reclassified in the 2003 financial statements to be
comparative with amounts reported in 2004. These reclassifications have no
effect on net income or the change in stockholders equity.
(continued on next page)
10
NOTES TO FINANCIAL STATEMENTS
(See Independent Accountant's Report)
- --------------------------------------------------------------------------------
Income Taxes
The corporation has elected to be treated as an S Corporation under the Internal
Revenue Code. The Company is generally not subject to income taxes. Instead,
corporate taxable earnings are passed through to the company's stockholder who
is responsible for any taxes which may be due.
Recently Issued Pronouncements
The Financial Accounting Standards Board has recently issued Interpretation No.
46R, Consolidation of Variable Interest Entities. Upon its effective date, the
statement may require consolidation of Loegering Building Limited Partnership,
an entity related by common ownership. The effect of the pronouncement has not
yet been determined.
Warranty Reserve
Management uses prior experience and evaluates the current products to determine
the warranty reserve.
NOTE 2 - INVESTMENT SECURITIES
The carrying amounts of investment securities as shown in the balance sheet of
the company and their fair values at December 31, 2003 were as follows:
December 31, 2003
--------------------------------------------------------------
Gross Gross
Unrealized Unrealized Fair
Cost Gains Losses Value
-------- ---------- ---------- --------
Mutual Funds $ 14,549 $ -- $ -- $ 14,549
Equity Securities 358,345 56,484 14,478 400,351
-------- -------- -------- --------
$372,894 $ 56,484 $ 14,478 $414,900
======== ======== ======== ========
NOTE 3 - INVENTORIES
2004 2003
----------- ----------
(Unaudited) (Audited)
Raw materials $ 121,212 $ 283,215
Work-in-process 133,705 31,806
Finished goods 4,547,807 1,824,678
---------- ----------
$4,802,724 $2,139,699
========== ==========
(continued on next page)
11
NOTES TO FINANCIAL STATEMENTS
(See Independent Accountant's Report)
- --------------------------------------------------------------------------------
NOTE 4 - INTANGIBLE ASSETS
2004 2003
----------- -----------
(Unaudited) (Audited)
Patents $ 1,329,076 $ 1,329,076
Non compete agreements 400,000 400,000
Other 25,000 25,000
Accumulated amortization (870,599) (796,646)
----------- -----------
$ 883,477 $ 957,430
=========== ===========
Amortization charged to operations totaled $73,954 for the period ended
September 30, 2004 and $98,604 for the year ended December 31, 2003.
Estimated future amortization is as follows:
Period Ending
- ------------------
2004 (3 months) $ 24,651
2005 88,606
2006 88,606
2007 88,606
2008 88,606
Thereafter 504,402
--------
$883,477
========
NOTE 5 - NOTE RECEIVABLE
2004 2003
----------- ---------
(Unaudited) (Audited)
6.0% note receivable from Loegering Building Limited Partnership,
related party, due in monthly installments of $9,335, including
interest to March 2007, secured by land and building $259,527 $339,968
Less current maturities 137,042 137,042
-------- --------
$122,485 $202,926
======== ========
(continued on next page)
12
NOTES TO FINANCIAL STATEMENTS
(See Independent Accountant's Report)
- --------------------------------------------------------------------------------
Current maturities on note receivable is as follows:
Period Ending
- --------------------
2004 $ 24,243
2005 (nine months) 112,799
2005 (three months) 20,415
2006 81,660
2007 20,410
--------
$259,527
========
NOTE 6 - PROPERTY, PLANT AND EQUIPMENT
2004 2003
---------- ----------
(Unaudited) (Audited)
Shop equipment $2,925,857 $2,592,671
Office Equipment 879,318 777,718
Leasehold improvements 432,489 435,158
Vehicles 290,012 120,879
---------- ----------
$4,527,676 $3,926,426
========== ==========
Depreciation expense totaled $374,305 for the period ended September 30, 2004
and $423,470 for the year ended December 31, 2003.
NOTE 7 - OPERATING LEASES
The Company is party to various leases for operating facilities and equipment.
The remaining terms of the leases expire at various times through 2006.
Approximate future minimum annual lease payments are as follows:
Period Ending
- -------------
2004 $1,519
2005 6,078
2006 552
------
$8,149
======
Lease expense totaled $204,251 of which $167,400 was paid to a related party for
the period ended September 30, 2004 and $256,949 of which $223,200 was paid to a
related party for the year ended December 31, 2003.
(continued on next page)
13
NOTES TO FINANCIAL STATEMENTS
(See Independent Accountant's Report)
- --------------------------------------------------------------------------------
NOTE 8 - NOTES PAYABLE AND LONG -- TERM DEBT
Details pertaining to short-term notes payable are as follows:
2004 2003
----------- -----------
(Unaudited) (Audited)
4.87% variable rate line of credit to Wells Fargo,
due May 2003, secured by accounts receivable,
inventory, equipment and general intangibles $ 3,050,000 $ 500,000
=========== ===========
Details pertaining to long-term debt are as follows:
7.95% long-term revolving note payable of $1,575,000 to Wells Fargo Bank of
North Dakota maturing January 2005, annual installments are calculated
based on declining
available balance, secured by equipment and other assets $ 315,000 $ 630,000
4.31%, note payable to Wells Fargo Bank, due in monthly installments of
$10,258 increasing to $12,912 over the life of note, including interest,
to July 2006, secured by
equipment and other assets 279,643 377,861
6.50% note payable to Western Finance, due in
monthly installments of $766, including interest,
to September 2004, secured by equipment -- 6,055
3.90% note payable to F.F. Fischer Leasing, due in
monthly installments of $2,698, including interest,
to January 2008, secured by equipment 124,121 --
----------- -----------
718,764 1,013,916
Less current maturities (453,383) (453,383)
----------- -----------
$ 265,381 $ 560,533
=========== ===========
(continued on next page)
14
NOTES TO FINANCIAL STATEMENTS
(See Independent Accountant's Report)
- --------------------------------------------------------------------------------
Long-term debt maturities are as follows:
Period Ending
- -------------------
2004 $ 41,084
2005 (nine months) 412,299
2005 (three months) 74,203
2006 117,897
2007 42,781
2008 30,500
--------
$718,764
========
NOTE 9 - EMPLOYEE BENEFIT PLAN
The Company participates in a Defined Contribution Plan in which all employees
of Loegering Mfg. Inc. that are 18 years of age and have worked at least 1 year
are eligible. Contributions made to the plan were $169,094 for the period ended
September 30, 2004 and $222,469 for the year ended December 31, 2003.
NOTE 10 - COMMITMENTS AND CONTINGENCIES
Warranty Costs
The Company warrants tracks against failures caused by defective material or
workmanship. The warranty reserve and warranty expense are as follows:
2004 2003
----------- ----------
(Unaudited) (Audited)
Warranty reserve, beginning of period $ 46,392 $ 33,200
Expense 141,033 70,746
Payments (106,104) (57,554)
--------- ---------
Warranty reserve, end of period $ 81,321 $ 46,392
========= =========
(continued on next page)
15
NOTES TO FINANCIAL STATEMENTS
(See Independent Accountant's Report)
- --------------------------------------------------------------------------------
NOTE 11 - COMPREHENSIVE INCOME
Changes in and determination of other comprehensive income is as follows:
Unrealized Gains (Losses)
on Securities
-------------------------
Balance, December 31, 2002 $ (59,450)
Current year change 101,456
---------
Balance, December 31, 2003 42,006
Current year change (42,006)
---------
Balance, September 30, 2004 $ --
=========
NOTE 12 - STOCKHOLDER DISTRIBUTIONS
Stockholder distributions for the period ended September 30, 2004 and the year
ended December 31, 2003 were as follows:
2004 2003
----------- ---------
(Unaudited) (Audited)
General distributions $117,183 $104,400
Distributions for shareholder tax payments
for S-corporation income for prior tax year 314,574 160,512
-------- --------
$431,757 $264,912
======== ========
NOTE 13 - SUBSEQUENT EVENT (UNAUDITED)
On October 4, 2004, A.S.V., Inc. (a Minnesota-based public company) purchased
all of the outstanding common stock of Loegering Mfg. Inc. pursuant to a Merger
Agreement for $18.23 million. Subsequent to the Merger, Loegering became a
wholly-owned subsidiary of A.S.V., Inc.
16
UNAUDITED PRO FORMA COMBINED FINANCIAL DATA
The following unaudited pro forma combined financial statements reflect
the pro forma consolidated results of operation of A.S.V., Inc. ("ASV") for the
year ended December 31, 2003 and the nine months ended September 30, 2004, with
those of Loegering Mfg. Inc. ("Loegering") for the year ended December 31, 2003
and the nine months ended September 30, 2004, after giving effect to the
acquisition of Loegering by ASV (the "Merger") pursuant to the Merger Agreement
by and among ASV, Loegering, LMI Merger Corp., The Marilyn A. Loegering
Revocable Trust and Marilyn A. Loegering, dated October 1, 2004, under the
assumptions set forth in the accompanying notes. The unaudited pro forma
combined balance sheet combines the September 30, 2004 unaudited historical
consolidated balance sheet of ASV with the September 30, 2004 unaudited
historical balance sheet of Loegering after giving effect to the Merger, under
the assumptions set forth in the accompanying notes. The unaudited pro forma
combined financial statements should be read in conjunction with the
accompanying explanatory notes, the Merger Agreement, the historical financial
statements and related notes of ASV previously filed and the financial
statements and related notes of Loegering appearing elsewhere in, or
incorporated by reference into, this Current Report on Form 8-K/A (Amendment No.
1).
17
A.S.V., INC. AND LOEGERING MFG. INC. PROFORMA COMBINED BALANCE SHEET
AS OF SEPTEMBER 30, 2004
(UNAUDITED)
Loegering Pro Forma Pro Forma
ASSETS A.S.V., Inc. Mfg. Inc. Adjustments Combined
------------ --------- ----------- --------
CURRENT ASSETS
Cash and cash equivalents............. $ 43,946,833 $ - (3,480,000) (a) $ 38,892,728
(1,574,105) (c)
Short-term investments................ 4,232,332 - 4,232,332
Accounts receivable, net.............. 28,312,083 1,667,313 29,979,396
Inventories........................... 29,257,453 4,802,724 34,060,177
Other current assets.................. 955,293 322,141 1,277,434
------------- ------------- -------------
Total current assets 106,703,994 6,792,178 (5,054,105) 108,442,067
------------- ------------- -------------
PROPERTY AND EQUIPMENT, net.............. 7,763,655 1,478,442 1,574,105 (c) 10,816,202
------------- ------------- -------------
OTHER ASSETS
Intangible assets, net................ - 883,477 9,309,022 (a) 10,192,499
Goodwill.............................. - - 6,512,282 (a) 6,512,282
Note receivable, less current portion. - 122,485 122,485
------------- ------------- -------------
Total other assets - 1,005,962 16,827,266
------------- ------------- -------------
Total Assets $ 114,467,649 $ 9,276,582 $12,341,304 $ 136,085,535
============= ============= =========== =============
LIABILITIES AND SHAREHOLDERS' EQUITY
CURRENT LIABILITIES
Short-term notes payable.............. $ - $ 3,050,000 $ 3,050,000
Current portion of long-term liabilities 141,867 453,383 595,250
Accounts payable...................... 7,429,059 2,360,048 9,789,107
Accrued liabilities
Compensation........................ 384,381 344,547 728,928
Warranty reimbursements............. 491,100 - 491,100
Warranties.......................... 2,045,000 81,321 2,126,321
Other............................... 769,296 313,206 1,082,502
Income taxes payable.................. 1,714,751 - 1,714,751
------------- ------------- -------------
Total current liabilities....... 12,975,454 6,602,505 19,577,959
------------- ------------- -------------
LONG-TERM LIABILITIES,
less current portion.................. 1,738,862 265,381 2,004,243
------------- ------------- -------------
COMMITMENTS AND
CONTINGENCIES......................... - - -
SHAREHOLDERS' EQUITY
Capital stock, $.01 par value:
Preferred stock..................... - - -
Common stock ....................... 126,568 1,200 (1,200) (b) 130,852
4,284 (a)
Additional paid-in capital............ 67,002,415 - 14,745,716 (a) 81,748,131
Retained earnings..................... 32,624,350 2,407,496 (2,407,496) (b) 32,624,350
------------- ------------- -------------
99,753,333 2,408,696 12,341,304 114,503,333
------------- ------------- -------------
Total Liabilities and Shareholders'
Equity $ 114,467,649 $ 9,276,582 $12,341,304 $ 136,085,535
============= ============= =========== =============
See notes to pro forma combined financial statements.
18
A.S.V., INC. AND LOEGERING MFG. INC. PROFORMA COMBINED STATEMENT OF EARNINGS
FOR THE NINE MONTHS ENDED SEPTEMBER 30, 2004
(UNAUDITED)
Loegering Pro Forma Pro Forma
A.S.V., Inc. Mfg. Inc. Adjustments Combined
------------ --------- ----------- --------
Net sales................................... $ 112,742,264 $ 10,293,251 $123,035,515
1,432,879 (g)
Cost of goods sold.......................... 87,100,595 5,032,777 10,792 (e) 93,577,043
------------- -------------- ------------
Gross profit....................... 25,641,669 5,260,474 29,458,472
Operating expenses:
Selling, general and administrative.... 6,341,065 5,792,448 23,924 (d) 9,915,951
(153,900) (f)
(2,087,586) (g)
Research and development............... 561,333 - 654,707 (g) 1,216,040
------------- -------------- ------------- -----------
Operating income (loss)............ 18,739,271 (531,974) 119,184 18,326,481
Other income (expense)
Interest income........................ 573,826 - 573,826
Interest expense....................... (84,684) (123,940) (208,624)
Other, net............................. 3,675 (144,373) (140,698)
------------- --------------- ------------- -----------
Income (loss) before income taxes.. 19,232,088 (800,287) 18,550,985
Provision for (benefit from) 43,000 (i)
income taxes..................... 7,025,000 - (292,000) (h) 6,776,000
------------- -------------- ------------- -----------
NET EARNINGS (LOSS)................ $ 12,207,088 $ (800,287) $ 368,184 $11,774,985
============= =============== ============= ===========
Net earnings per common share
Basic.................................. $ .97 $ .91
============= ===========
Diluted................................ $ .92 $ .86
============= ===========
Weighted average number of common
shares outstanding
Basic.................................. 12,578,128 428,404 13,006,532
============= ============= ===========
Diluted................................ 13,307,484 428,404 13,735,888
============= ============= ===========
See notes to pro forma combined financial statements.
19
A.S.V., INC. AND LOEGERING MFG. INC. PROFORMA COMBINED STATEMENT OF EARNINGS
FOR THE YEAR ENDED DECEMBER 31, 2003
(UNAUDITED)
Loegering Pro Forma Pro Forma
A.S.V., Inc. Mfg. Inc. Adjustments Combined
------------ --------- ----------- --------
Net sales................................... $ 96,386,576 $ 12,373,570 $108,760,146
1,839,392 (g)
Cost of goods sold.......................... 75,895,524 5,363,686 14,390 (e) 83,112,992
------------- -------------- -----------
Gross profit....................... 20,491,052 7,009,884 25,647,154
Operating expenses:
Selling, general and administrative.... 6,177,324 6,274,294 31,899 (d) 9,943,070
(205,200) (f)
(2,335,247) (g)
Research and development............... 794,729 - 495,855 (g) 1,290,584
------------- -------------- ------------- -----------
Operating income................... 13,518,999 735,590 158,911 14,413,500
Other income (expense)
Interest income........................ 140,366 - 140,366
Interest expense....................... (129,359) (134,390) (263,749)
Other, net.................................. 37,897 29,799 67,696
------------- -------------- ------------- -----------
Income before income taxes......... 13,567,903 630,999 14,357,813
56,000 (i)
Provision for income taxes......... 4,850,000 - 226,000 (h) 5,132,000
------------- -------------- ------------- -----------
NET EARNINGS................................ $ 8,717,903 $ 630,999 $ (123,089) $ 9,225,813
============= ============== ============= ===========
Net earnings per common share
Basic.................................. $ .85 $ .87
============= ===========
Diluted................................ $ .78 $ .79
============= ===========
Weighted average number of common
shares outstanding
Basic.................................. 10,218,793 428,404 10,647,197
============= ============= ===========
Diluted................................ 11,185,683 428,404 11,614,087
============= ============= ===========
See notes to pro forma combined financial statements.
20
A.S.V., INC.
NOTES TO PRO FORMA COMBINED FINANCIAL STATEMENTS
SEPTEMBER 30, 2004
(UNAUDITED)
NOTE 1. BASIS OF PRESENTATION
On October 4, 2004, ASV acquired all the outstanding common stock of
Loegering Mfg. Inc. (Loegering) of Casselton, North Dakota in a merger
transaction. Loegering is a manufacturer of over-the-tire steel tracks for
wheeled skid-steers and also provides attachments for the skid-steer market. ASV
acquired all the outstanding common stock of Loegering for $18.23 million
through the issuance of approximately 430,000 shares of ASV common stock valued
at $14.75 million and cash of $3.48 million. Following completion of the
transaction, Loegering became a wholly owned subsidiary of ASV. The acquisition
has been accounted for as a purchase. In a related transaction, ASV acquired
real property representing Loegering's manufacturing facility from Loegering
affiliates for $1.57 million.
NOTE 2. PRO FORMA ADJUSTMENTS
(a) The following purchase price allocation represents a
preliminary estimate of the fair market value of the assets
acquired from Loegering. The preliminary estimate of fair
market value, which ASV expects to finalize in connection with
the audit of its December 31, 2004 financial statements, was
determined through an independent appraisal in accordance with
Statement of Financial Accounting Standard No. 142:
PURCHASE PRICE
Cash paid for common stock of Loegering $ 3,480,000
ASV common stock issued for common stock of Loegering 14,750,000
-------------
Total purchase price $ 18,230,000
PURCHASE PRICE ALLOCATION
Net assets acquired $ 2,408,696
Trade name, trademarks and related trade dress 5,334,000
Patents, granted and applied for 1,813,022
Dealer/customer network 2,162,000
-------------
Excess of cost over net assets acquired $ 6,512,282
=============
(b) Elimination of Loegering's historical common stock and retained earnings.
(c) ASV acquisition of Loegering's manufacturing facility and certain real estate.
(d) Depreciation of Loegering's manufacturing facility and certain real estate.
(e) Amortization of patents granted.
(f) Elimination of rent paid to former owners of Loegering's manufacturing facility and certain real estate.
(g) Reclassification of Loegering expenses to conform to ASV presentation.
(h) Estimated income tax provision for Loegering.
(i) Income tax effect of pro forma depreciation, amortization and rent adjustments.
21
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.
A.S.V., INC.
Date: December 17, 2004 By: /s/ Gary Lemke
-------------------------------
Name: Gary Lemke
Title: Chief Executive Officer
EXHIBIT INDEX
Exhibit No. Description
----------- -----------
2.1 Merger Agreement, dated as of October 1, 2004, by and among the Company, LMI,
LMI Merger Corp., The Marilyn A. Loegering Revocable Trust and Marilyn A.
Loegering (incorporated by reference to Exhibit 2.1 to the Current Report on
Form 8-K filed by the Company on October 7, 2004)
23.1 Consent of Eide Bailly LLP