1
UNITED STATES SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K/A
AMENDMENT TO APPLICATION OF REPORT
Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934
Date of Report (Date of earliest event reported): September 21, 2000
NORDSON CORPORATION
-----------------------------------------------------
(Exact name of registrant as specified in its charter)
OHIO
--------------------------------------------------------------
(State or other jurisdiction of incorporation or organization)
0-7977 34-0590250
----------------------- -----------------------------------
(Commission file number) (I.R.S. Employer Identification No.)
28601 Clemens Road, Westlake, Ohio
-------------------------------------
(Address of principal executive offices)
44145
---------
(Zip Code)
(440) 892-1580
----------------------------------------------------
(Registrant's telephone number, including area code)
Page 1 of 23
2
AMENDMENT NO. 1
The undersigned registrant hereby amends the following items, financial
statements, exhibits or other portions of its Form 8-K Report filed on November
13, 2000 as set forth in the pages attached hereto:
Item 7. Financial Statements, Pro Forma Financial Information and Exhibits
a.) Financial Statements
Audited combined financial statements each for the years ended December
31, 1999, 1998 and 1997 required to be filed pursuant to Item 7 of Form
8-K filed on November 13, 2000 reflecting the acquisition of EFD, Inc.
b.) Pro Forma Financial Information
Pro forma financial information, required to be filed pursuant to Item
7 of Form 8-K filed on November 13, 2000 reflecting the acquisition of
EFD, Inc.:
The Pro Forma Unaudited Condensed Combined Statement of Income
for 2000 combines the results of operations of EFD, Inc.
("EFD") for the nine months ended September 30, 2000 (prepared
from unaudited quarterly financial statements) with those of
Nordson Corporation ("Nordson") for the nine months ended July
30, 2000 (prepared from unaudited quarterly financial
statements).
The Pro Forma Unaudited Condensed Combined Statement of Income
for 1999 combines the results of operations of EFD for the
year-ended December 31, 1999 with those of Nordson for the
year-ended October 31, 1999.
The Pro Forma Unaudited Condensed Combined Balance Sheet
combines the financial position of EFD, Inc. as of September
30, 2000 with that of Nordson as of July 30, 2000 assuming the
acquisition occurred on that date.
The pro forma unaudited financial information does not purport to
be indicative of the results of operations or the financial
position which would have actually been obtained had the
acquisition been consummated on the date indicated. In addition,
the pro forma financial information does not purport to be
indicative of results of operations or financial positions which
may be obtained in the future. The purchase price allocation is
preliminary; therefore, final amounts could differ from those
reflected in the pro forma combined financial statements. Upon
final determination, the purchase price will be allocated to the
assets and liabilities acquired based on fair value as of the date
of the acquisition.
The pro forma unaudited financial information should be read in
conjunction with Nordson Corporation Consolidated Financial
Statements and Notes thereto contained in Form 10-Q for the
quarter ended July 30, 2000 and the Annual Report on Form 10-K for
the year-ended October 31, 1999.
c.) Exhibit 23
Consent of Independent Accountants
Page 2 of 23
3
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 thereunto duly authorized.
Date: January 12, 2001 Nordson Corporation
/s/ Peter S. Hellman
---------------------
Peter S. Hellman
Executive Vice President
Chief Financial and
Administrative Officer
/s/ Nicholas D. Pellecchia
--------------------------
Nicholas D. Pellecchia
Vice President, Finance
and Controller
Page 3 of 23
4
Item 7(a)
EFD, INC. AND AFFILIATED COMPANIES
COMBINED FINANCIAL STATEMENTS
YEAR ENDED DECEMBER 31, 1999
5
Independent Auditors' Report
January 27, 2000
To the Board of Directors
EFD, Inc.
East Providence, Rhode Island
We have audited the accompanying combined balance sheet of EFD, Inc. and
affiliated companies as of December 31, 1999, 1998 and 1997, and the related
combined statements of income and comprehensive income, changes in equity and
cash flows for each of the three years in the period ended December 31, 1999.
These combined financial statements are the responsibility of the management of
EFD, Inc. and affiliated companies. Our responsibility is to express an opinion
on these combined financial statements based on our audits.
We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audits 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.
In our opinion, the combined financial statements referred to above present
fairly, in all material respects, the financial position of EFD, Inc. and
affiliated companies as of December 31, 1999, 1998 and 1997, and the results of
its operations and its cash flows for each of the three years in the period
ended December 31, 1999, in conformity with generally accepted accounting
principles.
\s\ Robert, Finnegan & Lynah, PC
- --------------------------------
Robert, Finnegan & Lynah, PC
Certified Public Accountants
- 1 -
6
EFD, INC. AND AFFILIATED COMPANIES
COMBINED BALANCE SHEET
DECEMBER 31, 1999, 1998 AND 1997
ASSETS
1999 1998 1997
------------ ------------ ------------
Current Assets:
Cash $ 791,753 $ 958,914 $ 841,196
Short-term investments 5,788,879 9,444,953 2,796,158
------------ ------------ ------------
Cash and Cash Equivalents 6,580,632 10,403,867 3,637,354
Securities with fixed maturities 7,699,499 3,757,241 7,947,823
Marketable equity securities 3,540 6,852 1,487,989
Accounts receivable 8,642,054 6,941,114 7,312,512
Interest receivable 116,982 68,849 114,458
Inventories 3,762,548 3,622,424 3,836,808
Prepaid expenses 379,241 377,281 443,416
------------ ------------ ------------
Total Current Assets 27,184,496 25,177,628 24,780,360
------------ ------------ ------------
Cash Value of Life Insurance 94,499 122,216 247,152
Property, Plant and Equipment - Net 7,753,726 8,994,448 9,858,378
Other Assets - Net 34,156 31,281 41,473
------------ ------------ ------------
Total Assets $ 35,066,877 $ 34,325,573 $ 34,927,363
============ ============ ============
Current Liabilities:
Notes payable $ 300,000 $ 300,000 $ 300,000
Accounts payable 670,223 511,255 723,691
Accrued expenses 1,504,274 1,534,164 1,100,903
Dividends payable 2,286,661 2,151,521 1,735,748
------------ ------------ ------------
Total Current Liabilities 4,761,158 4,496,940 3,860,342
Deferred Incentive Compensation 4,414,000 3,892,000 4,553,000
------------ ------------ ------------
Total Liabilities 9,175,158 8,388,940 8,413,342
Stockholders' Equity:
Common stock 1,809,220 1,809,220 1,809,220
Retained earnings 24,204,671 24,252,358 24,502,354
Accumulated other comprehensive income (loss) (122,172) (124,945) 202,447
------------ ------------ ------------
Total Stockholders' Equity 25,891,719 25,936,633 26,514,021
------------ ------------ ------------
Total Liabilities and Stockholders' Equity
$ 35,066,877 $ 34,325,573 $ 34,927,363
============ ============ ============
See accompanying notes and independent auditors' report.
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7
EFD, INC. AND AFFILIATED COMPANIES
COMBINED STATEMENT OF INCOME AND COMPREHENSIVE INCOME
YEARS ENDED DECEMBER 31, 1999, 1998 AND 1997
1999 1998 1997
------------ ------------ ------------
Net Sales $ 54,180,881 $ 49,961,777 $ 50,748,451
Cost of Goods Sold 10,127,713 10,170,362 10,287,656
------------ ------------ ------------
Gross Profit on Sales 44,053,168 39,791,415 40,460,795
Marketing Expense 10,020,694 9,362,819 7,567,627
General and Administrative
Expense 11,903,658 11,214,224 10,726,998
------------ ------------ ------------
21,924,352 20,577,043 18,294,625
------------ ------------ ------------
Income from Operations 22,128,816 19,214,372 22,166,170
---------------------- ---------- ---------- ----------
Other Income:
Interest and service charges 720,921 730,486 802,374
Royalties 44,174 88,495 87,971
Rent 30,528 30,528 36,009
Gain on disposition of marketable equity
securities 10,050 576,094 --
Miscellaneous 9,182 9,535 10,455
Gain on foreign exchange -- 61,417 56,710
Deferred incentive compensation -- 661,000 --
Gain on sale of fixed assets -- 10,197 4,305
------------ ------------ ------------
814,855 2,167,752 997,824
------------ ------------ ------------
22,943,671 21,382,124 23,163,994
Other Charges:
Deferred incentive compensation 522,000 -- 1,485,323
Loss on foreign exchange 171,281 -- 98,590
Interest 21,278 22,306 23,103
Loss on disposition of marketable equity
securities -- 77,479 11,509
Loss on sale of fixed assets -- -- 1,691
Write-off of insurance claim -- -- 29,192
------------ ------------ ------------
714,559 99,785 1,649,408
------------ ------------ ------------
Income before Income Taxes 22,229,112 21,282,339 21,514,586
Income Taxes 75,559 332,969 32,610
------------ ------------ ------------
Net Income $ 22,153,553 $ 20,949,370 $ 21,481,976
Other Comprehensive Income (Loss):
Translation gain (loss) 6,085 (34,876) (202,292)
Unrealized appreciation (depreciation) on
marketable
equity securities (3,312) 906 177,509
Reclassification adjustments for gains included in
net income -- (293,422) --
------------ ------------ ------------
Other Comprehensive Income (Loss) 2,773 (327,392) (24,783)
------------ ------------ ------------
Comprehensive Income $ 22,156,326 $ 20,621,978 $ 21,457,193
============ ============ ============
See accompanying notes and independent auditors' report.
- 3 -
8
EFD, INC. AND AFFILIATED COMPANIES
COMBINED STATEMENT OF CHANGES IN EQUITY
YEARS ENDED DECEMBER 31, 1999, 1998 AND 1997
Accumulated Other
Comprehensive
Capital Stock Retained Income
Total Earnings (Loss)
------------------ ----------------- ----------------- -------------------
Balance, January 1, 1997 $22,595,615 $1,809,220 $20,559,165 $227,230
Add (deduct):
Net income 21,481,976 21,481,976
Translation gain (loss) (202,292) (202,292)
Unrealized appreciation
on marketable equity securities
177,509 177,509
Dividends and distributions
(17,538,787) (17,538,787)
------------------ ----------------- ----------------- -------------------
Balance, December 31, 1997 26,514,021 1,809,220 24,502,354 202,447
Add (deduct):
Net income 20,949,370 20,949,370
Translation gain (loss) (34,876) (34,876)
Unrealized appreciation
on marketable equity securities
906 906
Reclassification adjustment for
gains included in
net income (293,422) (293,422)
Dividends and distributions
(21,199,366) (21,199,366)
------------------ ----------------- ----------------- -------------------
Balance, December 31, 1998 25,936,633 1,809,220 24,252,358 (124,945)
Add (deduct):
Net income 22,153,553 22,153,553
Translation gain (loss) 6,085 6,085
Unrealized appreciation
on marketable equity securities
(3,312) (3,312)
Dividends and distributions
(22,201,240) (22,201,240)
------------------ ----------------- ----------------- -------------------
Balance, December 31, 1999 $25,891,719 $1,809,220 $24,204,671 ($122,172)
================== ================= ================= ===================
See accompanying notes and independent auditors' report.
- 4 -
9
EFD, INC. AND AFFILIATED COMPANIES
COMBINED STATEMENT OF CASH FLOWS
YEARS ENDED DECEMBER 31, 1999, 1998 AND 1997
1999 1998 1997
------------ ------------ ------------
Cash Flows from Operating Activities:
Net income $ 22,153,553 $ 20,949,370 $ 21,481,976
------------ ------------ ------------
Adjustments to reconcile net income to net
cash provided by operating activities:
Depreciation and amortization 1,647,293 2,155,874 1,157,642
(Gain) loss on disposition of
marketable equity securities (10,050) (498,615) 11,509
Contribution of marketable equity securities -- 550,063 --
(Gain) loss on sale of fixed assets -- (10,197) (2,614)
Increase (decrease) in deferred compensation 522,000 (661,000) 1,437,000
Increase in cash value of life insurance 27,717 (10,879) (13,859)
Changes in assets and liabilities:
Accounts receivable (1,749,073) 417,007 (177,831)
Inventories (140,124) 214,384 (243,529)
Prepaid expenses (1,960) 66,135 (157,165)
Other assets (3,664) 9,532 (37,609)
Payables and accrued expenses 129,078 220,825 (67,559)
Translation gain (loss) 6,085 (34,876) (202,292)
------------ ------------ ------------
Total Adjustments 427,302 2,418,253 1,703,693
------------ ------------ ------------
Net Cash from Operating Activities 22,580,855 23,367,623 23,185,669
------------ ------------ ------------
Cash Flows from Investing Activities:
Purchases of securities with fixed
maturities (21,462,007) (16,207,518) (25,016,511)
Proceeds from redemptions and maturities of securities with
fixed maturities 17,519,749 20,398,100 23,890,584
Purchases of marketable equity securities -- (163,730) (1,010,388)
Proceeds from disposition of marketable
equity securities 10,050 1,300,904 17,182
Proceeds from surrender of life insurance
Contracts -- 135,815 --
Property, plant and equipment additions (405,782) (1,303,649) (3,842,734)
Proceeds from sales of fixed assets -- 22,560 60,459
------------ ------------ ------------
Net Cash from Investing Activities (4,337,990) 4,182,482 (5,901,408)
------------ ------------ ------------
Cash Flows from Financing Activities:
Dividends and distributions (22,066,100) (20,783,592) (17,688,569)
------------ ------------ ------------
Net Increase (Decrease) in Cash and
Cash Equivalents (3,823,235) 6,766,513 (404,308)
Cash and Cash Equivalents, Beginning of Year 10,403,867 3,637,354 4,041,662
------------ ------------ ------------
Cash and Cash Equivalents, End of Year $ 6,580,632 $ 10,403,867 $ 3,637,354
============ ============ ============
Supplemental Disclosure of Cash Flow Information:
Cash paid during the year for:
Interest $ 21,000 $ 21,000 $ 21,000
Taxes 75,809 332,969 32,610
See accompanying notes and independent auditors' report.
- 5 -
10
EFD, INC. AND AFFILIATED COMPANIES
NOTES TO COMBINED FINANCIAL STATEMENTS
DECEMBER 31, 1999, 1998 AND 1997
1. Summary of Significant Accounting Policies:
Principles of Combination:
The combined financial statements (the Companies) include the accounts
of EFD, Inc. (EFD or the Company) and its 79% owned subsidiary, Dosage
2000, S.A.R.L. (Dosage), and an affiliated company, EFD International,
Inc. (International). The Companies are affiliated through common
ownership and management. All significant intercompany transactions
have been eliminated.
Nature of Business:
EFD, incorporated under the laws of the State of Rhode Island as
Electron Fusion Devices, Inc., is primarily engaged in the manufacture
and distribution of automatic liquid dispensers, solder creams and
related products on a worldwide basis.
Dosage, incorporated under the laws of France, is primarily engaged in
the distribution of automatic liquid dispensers and related products,
predominantly in France.
International, incorporated under the laws of the State of Rhode
Island, is primarily engaged in the distribution of automatic liquid
dispensers and related products, predominantly in the United Kingdom.
Merger:
On May 30, 1997, EFD issued 300 shares of its Class A voting and 4,200
shares of its Class B nonvoting common stock in exchange for all the
outstanding common stock of ESP, Inc. (ESP), an affiliated company. The
merger has been accounted for as a pooling of interests and,
accordingly, the Company's financial statements have been restated to
include the accounts and operations of ESP for all periods prior to the
merger.
Separate results of operations for the period prior to the merger are
presented as follows:
Period Ended 5/30/97
(Unaudited)
---------------------
Net sales:
EFD, Inc. $16,318,011
ESP, Inc. 3,089,825
-------------------
$19,407,836
===================
Net income:
EFD, Inc. $ 8,087,274
ESP, Inc. 1,389,479
-------------------
$ 9,476,753
===================
Other changes in stockholders' equity:
EFD, Inc. ($ 6,780,228)
ESP, Inc. (1,116,647)
-------------------
($ 7,896,875)
===================
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11
EFD, INC. AND AFFILIATED COMPANIES
NOTES TO COMBINED FINANCIAL STATEMENTS
DECEMBER 31, 1999, 1998 AND 1997
1. Summary of Significant Accounting Policies (Continued):
Merger (Continued):
Other changes in stockholders' equity consist of dividends paid,
unrealized appreciation on marketable equity securities and accumulated
translation losses.
Use of Estimates:
The preparation of financial statements in conformity with generally
accepted accounting principles requires management to make estimates
and assumptions that affect the reported amounts of assets and
liabilities and disclosure of contingent assets and liabilities at the
date of the financial statements and the reported amounts of revenues
and expenses during the reporting period. Actual results could differ
from those estimates.
Translation of Foreign Currency:
Assets and liabilities of Dosage, International and EFD Canada, a
division of EFD, are translated into United States dollars at year-end
exchange rates, and results of operations are translated at the average
exchange rate prevailing throughout the year. Unrealized translation
gains or losses are recorded as a separate component of stockholders'
equity and realized translation gains and losses are reflected in net
income.
Cash Equivalents:
Cash equivalents consist of investments with an original maturity of
three months or less when purchased.
Securities:
Management determines the appropriate classification of investments at
the time of purchase and reevaluates such designations as of each
balance sheet date. All investments in securities with fixed maturities
are classified as held-to-maturity. Securities with fixed maturities
are deemed to be held-to-maturity securities when the Companies have
the ability and positive intent to hold them to maturity.
Held-to-maturity securities are carried at cost with amortization
recorded as interest receivable. Marketable equity securities are
classified as available-for-sale. Available-for-sale securities are
stated at fair value, with unrealized gains and losses included in
other comprehensive income and reported as a separate component of
stockholders' equity. Realized gains and losses of investments, if any,
as determined on a specific identification basis, are included in net
income.
- 7 -
12
EFD, INC. AND AFFILIATED COMPANIES
NOTES TO COMBINED FINANCIAL STATEMENTS
DECEMBER 31, 1999, 1998 AND 1997
1. Summary of Significant Accounting Policies (Continued):
Accounts Receivable:
The Companies are on the direct charge-off method of accounting for bad
debts, which approximates the reserve method.
Inventories:
Inventories are valued at the lower of cost or replacement market
determined by the average cost method.
Property, Plant and Equipment:
Property, plant and equipment are carried at cost less accumulated
depreciation. Depreciation is computed under the straight-line and
declining-balance methods over the estimated useful lives of the
assets, ranging from three to thirty-nine years.
Depreciation is reported under general and administrative expense, and
is also included as part of aircraft expense, field sales offices
expense and occupancy costs.
Costs of computer software and all ordinary maintenance and repairs are
charged to expense in the year incurred.
Advertising:
The Companies expense all advertising costs as they are incurred.
Advertising expenses amounted to $2,088,355, $1,830,753 and $1,525,442
for the years ended December 31, 1999, 1998 and 1997, respectively.
Income Taxes:
EFD and International are qualified as S Corporations and, accordingly,
are not liable for United States Federal or Rhode Island tax on their
income, but rather all income is reported by and all tax paid by the
stockholders. EFD is still responsible for various state excise and
franchise taxes. International, absent utilization of a net operating
carryforward, would be subject to United Kingdom taxes on its income.
Dosage is subject to French taxes on its income.
Restatement:
The financial statements for the years ended December 31, 1998 and 1997
have been restated to reflect a correction in the translation of Dosage
and International financial statements from their foreign currency to
U.S. Dollars. The effect of the restatement was to decrease the net
income and the translation loss by $42,663 for 1998 and to increase the
net income and the translation loss by $120,368 for 1997.
- 8 -
13
EFD, INC. AND AFFILIATED COMPANIES
NOTES TO COMBINED FINANCIAL STATEMENTS
DECEMBER 31, 1999, 1998 AND 1997
2. Concentrations of Credit Risk:
Financial instruments that potentially subject the Companies to
concentrations of credit risk consist principally of temporary cash
investments and accounts receivable.
The Companies place their temporary cash investments with financial
institutions and at various times during the year, the amount on deposit
at any one institution, as determined by the records of the financial
institution, may exceed the Federal insured limit of $100,000.
The Companies routinely assess the financial strength of their customers
and, as a consequence, believes that their accounts receivable credit risk
exposure is limited.
3. Foreign Financial Data:
A summary of foreign financial data is as follows:
1999 1998 1997
----------------- ---------------- ---------------------
Dosage:
Total assets $1,994,786 $2,008,413 $1,292,090
Net assets 629,624 555,653 106,184
Net sales 3,812,091 3,749,738 2,836,910
Net income 112,607 445,983 36,686
Realized gains (losses) on
foreign currency translations
included in net income (111,231) (44,412) (98,590)
Dosage financial data was translated into United States dollars at the
following exchange rates:
Euro Dollar French Franc
Per Dollar Per Dollar
------------------- -------------------------
1999 1998 1997
---------- ----------- ------------
Assets and liabilities .993 5.5980 6.0135
Results of operations .939 5.8910 5.8310
1999 1998 1997
--------------------- ---------------------- ---------------------
International:
Total assets $1,466,149 $1,323,979 $1,442,072
Net assets (deficit) (466,520) (663,322) (627,419)
Net sales 3,348,443 2,807,420 3,843,726
Net income (loss) 208,423 (14,957) 637,086
Realized gains (losses)
on foreign currency
transactions included in
net income (loss) (60,050) 17,005 56,710
- 9 -
14
EFD, INC. AND AFFILIATED COMPANIES
NOTES TO COMBINED FINANCIAL STATEMENTS
DECEMBER 31, 1999, 1998 AND 1997
3. Foreign Financial Data (Continued):
International financial data was translated into United States dollars at
the following exchange rates:
British Pound
Per Dollar
-----------------------------------
1999 1998 1997
----------- ----------- ---------
Assets and liabilities .6191 .6026 .6058
Results of operations .6185 .6024 .6104
4. Securities with Fixed Maturities:
The cost and estimated fair values as of December 31, 1999, 1998 and 1997
of investments in securities with fixed maturities are as follows:
Unrealized Unrealized Estimated
Cost Gains Losses Fair Value
---------- ---------- ---------- ----------
December 31, 1999:
U. S. Government agency securities $4,241,844 $ -- $ -- $4,241,844
Obligations of states and
municipalities 3,457,655 -- -- 3,457,655
---------- ---------- ---------- ----------
$7,699,499 $ -- $ -- $7,699,499
========== ========== ========== ==========
December 31, 1998:
U. S. Government agency securities $2,108,448 $ -- $ -- $2,108,448
Obligations of states and
municipalities 1,648,793 -- -- 1,648,793
---------- ---------- ---------- ----------
$3,757,241 $ -- $ -- $3,757,241
========== ========== ========== ==========
December 31, 1997:
U. S. Government agency securities $6,877,223 $ -- $ -- $6,877,223
Obligations of states and
municipalities 1,070,600 -- -- 1,070,600
---------- ---------- ---------- ----------
$7,947,823 $ -- $ -- $7,947,823
========== ========== ========== ==========
As of December 31, 1999, all obligations with fixed maturities will mature
within two years.
- 10 -
15
EFD, INC. AND AFFILIATED COMPANIES
NOTES TO COMBINED FINANCIAL STATEMENTS
DECEMBER 31, 1999, 1998 AND 1997
5. Marketable Equity Securities:
The details of investments in marketable equity securities as of December
31, 1999, 1998 and 1997 are as follows:
Unrealized Unrealized Estimated
Cost Gains Losses Fair Value
---------- ----------- ------------ ----------
December 31, 1999:
Common stock $ 2,489 $ 1,051 $ -- $ 3,540
========== ========== =========== ==========
December 31, 1998:
Common stock $ 2,489 $ 4,363 $ -- $ 6,852
========== ========== =========== ==========
December 31, 1997:
Common stock $1,191,111 $ 296,878 $ -- $1,487,989
========== ========== =========== ==========
A gain of $10,050, $498,615 (net) and a loss of $11,509 on sales of
marketable equity securities was recognized in the Statement of Income for
the years ended December 31, 1999 and 1998, and 1997, respectively.
6. Property, Plant and Equipment:
Property, plant and equipment is as follows:
1999 1998 1997
----------- ----------- -----------
Land $ 562,153 $ 562,153 $ 542,318
Buildings and improvements 7,535,872 7,449,324 6,937,203
Machinery and equipment 5,152,399 5,008,999 4,692,118
Furniture and equipment 1,820,365 1,787,369 1,622,043
Computer and peripheral equipment 517,970 439,962 387,479
Aircraft 3,356,423 3,356,423 3,155,628
Motor vehicles 326,793 326,793 383,503
----------- ----------- -----------
19,271,975 18,931,023 17,720,292
Less - Accumulated depreciation 11,518,249 9,936,575 7,861,914
----------- ----------- -----------
$ 7,753,726 $ 8,994,448 $ 9,858,378
=========== =========== ===========
7. Note Payable:
A note payable in the amount of $300,000 is due on demand with interest
payable monthly at 7% to the major shareholder of the Companies.
- 11 -
16
EFD, INC. AND AFFILIATED COMPANIES
NOTES TO COMBINED FINANCIAL STATEMENTS
DECEMBER 31, 1999, 1998 AND 1997
8. Lines of Credit:
EFD has an unsecured $1,000,000 bank line of credit with interest at
prime.
EFD also has an unsecured $150,000 foreign credit guidance line which
allows the Company up to $1,000,000 in foreign exchange transactions.
Interest on this line is at market rate. This line is for use by either
EFD or Dosage.
There were no borrowings under either line during any of the three years
in the period ended December 31, 1999.
9. Common Stock:
Common stock is as follows:
Shares
-----------------------------------
Issued and
Authorized Outstanding
------------ ------------
Class A, voting, no par value 9,300 9,300
Class B, nonvoting, no par value 19,200 19,200
---------- ----------
28,500 28,500 $1,809,120
Dosage:
No par value 300 300 --
International:
$1 par value 8,000 100 100
----------
$1,809,220
==========
10. Sales:
During 1999, the Company repurchased inventory from a customer in the
amount of $129,858. For internal accounting purposes, the Company recorded
this transaction as an extraordinary expense. In accordance with generally
accepted accounting principles, the $129,858 has been reclassified and
shown in these financial statements as a reduction in 1999 sales.
11. Retirement Plan:
EFD participates with an affiliated company in a trusteed noncontributory
profit sharing plan covering substantially all employees. Annual profit
sharing plan contributions are determined solely at the discretion of the
Board of Directors. Contributions were $1,024,314, $910,603 and $855,266
for the years December 31, 1999, 1998 and 1997, respectively.
12. Research and Development:
Research and development costs of EFD, including salaries and materials,
aggregated $1,051,869, $963,760 and $1,004,557 for the years ended
December 31, 1999, 1998 and 1997, respectively.
- 12 -
17
EFD, INC. AND AFFILIATED COMPANIES
NOTES TO COMBINED FINANCIAL STATEMENTS
DECEMBER 31, 1999, 1998 AND 1997
13. Deferred Incentive Compensation:
EFD has entered into phantom stock option agreements with certain key
employees. The agreements provide that, at the option of the employee
during or at the termination of their employment, the phantom shares will
be purchased from the employee at a predetermined value based on the
profitability of the Companies. Should EFD be sold to outside interests,
the phantom shares will be valued based on the sale price of the
Companies. There were 2,536 shares outstanding at December 31, 1999.
Payments under these agreements aggregated $48,323 for the year ended
December 31, 1997. There were no payments made during the years ended
December 31, 1999 and 1998.
14. Consulting Agreement:
The Company has entered into a five-year consulting agreement, effective
January 1, 1999, calling for payment of $180,000 a year in quarterly
installments through December 31, 2003. Payments under this agreement for
the year ended December 31, 1999 were $180,000.
15. Lease Agreements:
Dosage is lessee of office space in Bougival, France, under a
noncancellable lease expiring on November 15, 2001, at an annual rent of
approximately $84,900. The Company has one remaining automatic three-year
extension option under the lease.
Total rent expense under the lease was $67,169, $70,626 and $67,683 for
the years ended December 31, 1999, 1998 and 1997, respectively.
During 1997, International was a lessee of office space in Bedford and
Dunstable, England from unrelated parties. During 1998, International
bought out the Bedford lease at a cost of $49,800 and the Dunstable lease
was assigned to EFD in conjunction with EFD's purchase of the Dunstable
property.
16. Related Party Transactions:
The Companies and an affiliated company share premises, staff and other
expenses. Transactions with related parties are as follows:
1999 1998 1997
----------- ---------- ----------
Accounts receivable $ 32,764 $ 32,024 $ 31,870
Interest expense 21,000 21,000 21,000
Sales 288,361 246,218 254,998
Occupancy costs allocated
to affiliates 57,750 57,750 57,750
Rental income 30,528 30,528 30,528
Note payable to stockholder 300,000 300,000 300,000
- 13 -
18
NORDSON CORPORATION
ITEM 7(b) PRO FORMA FINANCIAL INFORMATION
INDEX TO UNAUDITED PRO FORMA FINANCIAL INFORMATION
Page No.
--------
7(b) 1. Pro Forma Unaudited Condensed Combined Statement of Income
for the nine-months ended July 30, 2000 and September 30. 2000 19
7(b) 2. Pro Forma Unaudited Condensed Combined Statement of Income
for the year-ended October 31, 1999 and December 31, 1999 20
7(b) 3. Pro Forma Unaudited Condensed Combined Balance Sheet as of
July 30, 2000 and September 30, 2000 21
7(b) 4. Notes to Pro Forma Unaudited Condensed Combined Financial
Statements 22
Page 18 of 23
19
7(b) 1.
NORDSON CORPORATION
PRO FORMA UNAUDITED CONDENSED COMBINED STATEMENT OF INCOME
NINE MONTHS ENDED JULY 30, 2000
(in thousands, except per share amounts)
Historical Historical Pro Pro
Nordson (5) EFD (5) Forma Forma
7/30/00 9/30/00 Adjustments Unaudited
--------- --------- ----------- ---------
Net sales $ 523,639 $ 46,869 $ -- $ 570,508
Cost of sales 233,673 8,801 -- 242,474
Selling and administrative expenses 203,549 17,291 (2,817) (10) 217,910
(113) (11)
Depreciation and amortization 23,125 1,017 7,863 (1) 31,675
(330) (11)
Non-recurring charges 7,722 -- -- 7,722
--------- --------- --------- ---------
Operating profit 55,570 19,760 (4,603) 70,727
Net interest income (expense) (7,783) 629 (15,225) (2) (23,008)
17 (9)
(646) (14)
Other income (expense) 2,033 (170) (374) (13) 2,135
--------- --------- --------- ---------
Income before income taxes 49,820 20,219 (20,185) 49,854
Income tax expense (benefit) 17,188 -- 9,249 (6) 18,199
(8,238) (7)
--------- --------- --------- ---------
Net income (loss) $ 32,632 $ 20,219 $ (20,199) $ 31,655
========= ========= ========= =========
Basic earnings per share $ 1.01 $ .98
Diluted earnings per share $ 1.00 $ .97
See accompanying Notes to Pro Forma Unaudited Condensed Combined Financial
Statements.
Page 19 of 23
20
7(b) 2.
NORDSON CORPORATION
PRO FORMA UNAUDITED CONDENSED COMBINED STATEMENT OF INCOME
YEAR ENDED OCTOBER 31, 1999
(in thousands, except per share amounts)
Historical Historical Pro Pro
Nordson EFD Forma Forma
10/31/99 12/31/99 Adjustments Unaudited
--------- --------- ----------- -----------
Net sales $700,465 $54,181 $ -- $754,646
Cost of sales 318,230 10,128 -- 328,358
Selling and administrative expenses 272,950 20,277 (3,100) (10) 289,973
(154) (11)
Depreciation and amortization 29,300 1,647 10,485 (1) 40,708
(724) (11)
Non-recurring charges 3,000 -- -- 3,000
--------- --------- --------- ---------
Operating profit 76,985 22,129 (6,507) 92,607
Net interest income (expense) (8,643) 699 (20,300) (2) (28,943)
21 (9)
(699) (14)
Other income (expense) 3,096 (600) (25) (13) 3,192
--------- --------- --------- ---------
Income before income taxes 71,438 22,228 (26,810) 66,856
Income tax expense (benefit) 23,932 76 10,405 (6) 23,436
(10,977) (7)
--------- --------- -------- ---------
Net income (loss) $ 47,506 $22,153 $(26,238) $ 43,420
========= ========= ======== ========
Basic earnings per share $1.44 $1.31
Diluted earnings per share $1.42 $1.30
See accompanying Notes to Pro Forma Unaudited Condensed Combined Financial
Statements.
Page 20 of 23
21
7(b) 3.
NORDSON CORPORATION
PRO FORMA UNAUDITED CONDENSED COMBINED BALANCE SHEET
AS OF JULY 30, 2000
(in thousands)
Historical Historical Pro Forma
Nordson (5) EFD (5) Adjust- Pro Forma
7/30/00 9/30/00 ments Unaudited
--------- --------- --------- ---------
Assets
Current assets:
Cash and cash equivalents $ 20,903 $ 18,031 $ (18,031)(12) $ 20,903
Marketable securities 30 -- -- 30
Receivables 170,391 9,741 -- 180,132
Inventories 134,983 4,204 -- 139,187
Other current assets 36,028 496 -- 36,524
--------- --------- --------- ---------
Total current assets 362,335 32,472 (18,031) 376,776
Property, plant and equipment-net 128,988 7,141 (754)(11) 135,375
Intangible assets-net 96,471 -- 262,117 (1) 358,588
Other assets 20,719 52 (44)(13) 20,727
--------- --------- --------- ---------
Total assets $ 608,513 $ 39,665 $ 243,288 $ 891,466
========= ========= ========= =========
Liabilities and Shareholders' Equity
Current liabilities:
Notes payable $ 139,174 $ -- $ 267,500 (2) $ 406,674
Accounts payable 31,960 731 -- 32,691
Income taxes payable (463) -- -- (463)
Accrued liabilities 63,742 4,590 12,419 (3) 80,751
Current portion of long-term debt 7,550 -- -- 7,550
Current obligations of capital leases 3,717 -- -- 3,717
Other current liabilities 19,710 -- -- 19,710
--------- --------- --------- ---------
Total current liabilities 265,390 5,321 277,632 550,630
Long-term debt 63,971 -- -- 63,971
Other liabilities 51,407 4,414 (4,414) (8) 51,407
Total shareholders' equity 227,745 29,930 (29,930) (4) 225,458
--------- --------- --------- ---------
Total liabilities and shareholders' equity $ 608,513 $ 39,665 $ 243,288 $ 891,466
========= ========= ========= =========
See accompanying Notes to Pro Forma Unaudited Condensed Combined Financial
Statements.
Page 21 of 23
22
7(b) 4.
NORDSON CORPORATION
NOTES TO PRO FORMA UNAUDITED CONDENSED COMBINED
FINANCIAL STATEMENTS
(1) Reflects goodwill generated by the acquisition of EFD which will
be amortized over 25 years on a straight-line basis.
(2) Reflects debt incurred to acquire EFD and also the increase in
interest expense attributable to the portion of the acquisition
consideration financed by increased borrowings under Nordson's
revolving credit agreement with its banks using an initial
borrowing rate of 7.25 percent.
(3) Reflects Nordson's obligation to pay the balance of the purchase
price in accordance with the stock purchase agreement.
(4) Reflects elimination of equity of EFD.
(5) Prepared from unaudited quarterly financial statements for the
nine months ended July 30, 2000 and September 30, 2000.
(6) Recognizes pro forma income taxes calculated at an estimated
effective tax rate, inclusive of the Federal statutory rate.
(7) Reflects income tax benefits related to amortization of goodwill
and interest expense incurred as a result of increased borrowings
related to the acquisition, net of foreign tax credit limitations.
(8) Reflects an elimination of an obligation of EFD not assumed by
Nordson.
(9) Reflects elimination of interest expense on a note payable of EFD
not assumed by Nordson.
(10) Reflects elimination of non-recurring compensation and benefits
paid to certain employees of EFD.
(11) Reflects elimination of non-recurring operating costs,
depreciation expense and net capitalized cost of assets not
acquired.
(12) Reflects elimination of EFD's balance of cash and cash
equivalents.
(13) Recognizes non-recurring other income and expense and cash
surrender value of life insurance policy.
(14) Reflects reduction in interest income related to assets not
acquired.
Page 22 of 23
23
Item 7(c)
Exhibit 23
CONSENT OF INDEPENDENT AUDITORS
We consent to the incorporation by reference in the following Registration
Statements of Nordson Corporation, of our report dated January 27, 2000, with
respect to the financial statements of EFD, Inc. and affiliated companies as of
December 31, 1999, 1998, and 1997 and for each of the three years in the period
ended December 31, 1999 included in this Form 8-K/A of Nordson Corporation filed
with the Securities and Exchange Commission:
- Nordson Corporation 1982 Amended and Restated Stock Appreciation
Rights Plan (now entitled 1988 Amended and Restated Stock Appreciation
Rights Plan) (No. 2-66776)
- Nordson Corporation 1979 Employees Stock Option Plan (No. 2-66776)
- Nordson Corporation 1982 Incentive Stock Option Plan (Nos. 2-82915
and 33-18279)
- Nordson Employees' Savings Trust Plan (No. 33-18309)
- Nordson Corporation 1989 Stock Option Plan (No. 33-32201)
- Nordson Hourly-Rated Employees' Savings Trust Plan (No. 33-33481)
- Nordson Corporation 1993 Long-Term Performance Plan (No. 33-67780)
- Nordson Corporation - Slautterback Corporation 401(k) Profit Sharing
Plan (No. 33-73522)
\s\ Robert, Finnegan & Lynah, PC
- --------------------------------
Robert, Finnegan & Lynah, PC
Boston, Massachusetts
January 11, 2001
Page 23 of 23