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): August 1, 1997
SPEIZMAN INDUSTRIES, INC.
(Exact Name of Registrant as Specified in Its Charter)
North Carolina 0-8544 56-0901212
(State or Other Jurisdiction (Commission (IRS Employer
of Incorporation) File Number) Identification No.)
508 West 5th Street, Charlotte, North Carolina 28202
(Address of Principal Executive Offices) (ZIP Code)
(704) 372-3751
(Registrant's Telephone Number, Including Area Code)
(Former Name of Former Address, if Changed Since Last Report)
ITEM 2. Acquisition or Disposition of Assets
On August 1, 1997 (the "Closing Date"), Speizman Industries, Inc., a
Delaware Corp., ("Buyer") purchased all of the outstanding common stock of Wink
Davis Equipment Co., Inc. ("Wink Davis"), a Georgia corporation, from the eight
individual shareholders of Wink Davis (the "Sellers"), pursuant to a Stock
Purchase Agreement dated July 31, 1997 by and among Buyer and Sellers. Wink
Davis distributes laundry equipment and parts, principally in the southeastern
United States, as well as in the Chicago, Illinois area. In accordance with the
Stock Purchase Agreement, the Buyer paid $ 9,500,000 (the "Purchase Price") to
the Sellers in cash. There is a possible additional conditional payment of up to
$ 1.5 million in cash over a five-year period based on certain pre-tax earnings
calculations.
Assets acquired included cash and cash equivalents, accounts and notes
receivable, inventories, cash surrender value of life insurance, automobiles and
trucks, machinery and equipment, furniture and fixtures, leasehold improvements
and certain exclusive dealer distribution rights. All of such assets were used
in the operations of Wink Davis. The Buyer intends to continue the operations of
Wink Davis and the same use of such assets.
On the Closing Date, the Sellers entered in to various agreements with
the Buyer pursuant to the Stock Purchase Agreement, including (a) a
noncompetition agreement prohibiting a former shareholder from competing with
the Buyer; and (b) subleases of certain properties to Buyer.
The consideration for the acquisition was determined by arms-length
negotiations between the Buyer and the Sellers. Speizman Industries, Inc.'s
source of funds was borrowings under the Amended and Restated Loan Agreement
(the "Loan Agreement") with NationsBank, N.A. entered into on August 1, 1997.
This Loan Agreement provides up to $ 37.0 million comprised of (a) a $ 7.0
million term loan with quarterly principal payments of $ 250,000 beginning
December 31, 1997, the balance due July 31, 2000; and (b) up to $ 30.0 million
including a maximum of $ 8.5 million for direct borrowings with the balance
available for the issuance of documentary letters of credit. This line of credit
expires July 31, 2000.
2
ITEM 7. Financial Statements
(a) Financial Statements of Businesses Acquired.
Financial statements for Wink Davis Equipment Company for the
periods ended December 31, 1996 and 1995 as previously filed
on the Form 8-K filed on August 14, 1997.
Unaudited Balance Sheet of Wink Davis Equipment Company as of
July 31, 1997.
Unaudited Statements of Operations and Retained Earnings of
Wink Davis Equipment Company for the seven months ended July
31, 1997 and 1996.
Unaudited Statements of Cash Flows of Wink Davis Equipment
Company for the seven months ended July 31, 1997 and 1996.
(b) Pro Forma Financial Information.
Pro Forma Consolidated Balance Sheet as of June 28, 1997.
Pro Forma Consolidated Statement of Operations for the Fiscal
Year Ended June 28, 1997.
3
WINK DAVIS EQUIPMENT COMPANY, INC.
CONDENSED BALANCE SHEET
July 31, 1997
(Unaudited)
ASSETS
CURRENT
Cash and cash equivalents $ -
Accounts receivable 4,121,589
Inventories 2,242,350
Prepaid expenses 159,497
-----------------
TOTAL CURRENT ASSETS 6,523,436
PROPERTY AND EQUIPMENT, NET 613,452
OTHER ASSETS 583,159
---------------
$ 7,720,047
===============
LIABILITIES AND STOCKHOLDERS' EQUITY
CURRENT
Cash overdraft $ 146,027
Note payable - bank 201,977
Accounts payable 553,287
Customers' deposits 318,010
Accrued expenses 1,245,505
Current maturities of long-term debt 10,536
-------------
TOTAL CURRENT LIABILITIES 2,475,342
LONG-TERM DEBT 42,815
------------
TOTAL LIABILITIES 2,518,157
============
STOCKHOLDERS' EQUITY
Common stock, $ 10 par value, 1,660 shares
authorized, issued and outstanding 16,600
Unrealized gain on marketable securities 12,623
Retained earnings 5,172,667
-------------
TOTAL STOCKHOLDERS' EQUITY 5,201,890
-------------
$ 7,720,047
=============
4
WINK DAVIS EQUIPMENT COMPANY, INC.
CONDENSED STATEMENT OF OPERATIONS AND RETAINED EARNINGS
FOR THE 7 MONTHS ENDED JULY 31, 1997 AND 1996
7 MONTHS ENDED 7 MONTHS ENDED
JULY 31, 1997 JULY 31, 1996
_______________ ______________
(Unaudited) (Unaudited)
REVENUES $ 19,715,450 $22,891,107
COST OF SALES 16,071,345 18,838,054
OPERATING EXPENSES 3,379,207 3,159,366
--------- ------------
NET INCOME 264,898 893,687
RETAINED EARNINGS, BEGINNING OF PERIOD 5,259,509 5,444,121
DISTRIBUTIONS TO SHAREHOLDERS (351,740) (336,740)
----------- ------------
RETAINED EARNINGS, END OF PERIOD $ 5,172,667 $ 6,001,068
========== ============
5
WINK DAVIS EQUIPMENT COMPANY, INC.
STATEMENT OF CASH FLOWS
FOR THE 7 MONTHS ENDED JULY 31, 1997 AND 1996
7 MONTHS ENDED 7 MONTHS ENDED
JULY 31, 1997 JULY 31, 1996
-------------- ---------------
(Unaudited) (Unaudited)
CASH FLOWS FROM OPERATING ACTIVITES
Net income $ 264,898 893,687
Adjustments to reconcile net income to cash
provided by operating activities
Depreciation and amortization 157,429 137,161
Cash surrender value of life insurance (8,141) --
Changes in assets and liabilities
Increase in accounts receivable (583,334) (1,859,564)
Payments of notes receivable (5,860) 116,427
Decrease (Increase) in inventories 143,041 (72,893)
Decrease (Increase) in prepaid expenses 179,096 (173,487)
Increase in book overdraft in bank account 146,027 --
Increase (Decrease) in accounts payable (253,763) 416,704
Increase in accrued commissions 86,022 168,648
Decrease in accrued retirement plan (165,917) (3,711)
Increase (Decrease) in accrued expenses 295,686 (9,142)
Decrease (Increase) in customer deposits (722,046) 632,412
Decrease in deferred expenses (6,460) --
--------- ---------------
Net cash provided (used) by operating
activities (473,322) 246,242
CASH FLOWS FROM INVESTING ACTIVITIES
Acquisition of property and equipment (78,161) (187,349)
CASH FLOWS FROM FINANCING ACTIVITIES
Borrowings on line-of-credit 201,977 500,000
Payments on notes payable (5,226) (5,459)
Distribution to shareholders (351,740) (336,740)
--------- ---------------
Net cash provided (used) by financing activities (154,989) 157,801
---------
Net increase (decrease) in cash and cash equivalents (706,472) 216,694
Cash and cash equivalents, beginning of period 706,472 456,489
--------- ---------------
Cash and cash equivalents, end of period $ -0- $ 673,183
========== ================
6
The following unaudited pro forma condensed balance sheet information
presents the pro forma consolidated financial position of the Company as of June
28, 1997, the Company's fiscal year end, assuming the acquisition of Wink Davis
Equipment Company had been consummated as of such date. The unaudited pro forma
condensed statements of operations for the twelve months ended June 28, 1997,
are based upon the individual historical statement of operations of Wink Davis
Equipment Company and Speizman Industries, Inc. and has been prepared to reflect
the operating results of the Company as if such events had occurred as of the
beginning of the period. These pro forma condensed financial statements may not
be indicative of the results that actually would have occurred if the proposed
transactions had occurred on the dates indicated nor are they necessarily
indicative of future results.
PRO FORMA BALANCE SHEET
Pro Forma
Speizman Wink Davis Adjustments Adjustments Balance Sheet
Industries, Equipment Co. Debit Credit June 28, 1997
Inc.
ASSETS
Current assets $40,866,592 $ 6,523,436 - - $47,390,028
Property, plant and equipment
1,788,272 613,452 - - 2,401,724
Other long term assets 518,957 583,159 - - 1,102,116
Intangible assets 4,460,733(1) - 4,460,733
----------- ---------- ------------ ------------ -------------
- -
Total Assets $43,173,821 $ 7,720,047 $ 4,460,733 - $55,354,601
========== =========== ========== ============= ==========
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities 22,125,777 2,475,342 - 3,650,000(1) 28,251,119
Long-term debt 110,344 42,815 - 6,000,000(1) 6,153,159
---------- --------- ------------ -------------- ----------
Total Liabilities 22,236,121 2,518,157 - 9,650,000 34,404,278
Stockholders' Equity 20,937,700 5,201,890 5,189,267(1) - 20,950,323
---------- --------- ---------- --------------- -----------
$43,173,821 $ 7,720,047 $9,650,000 $ 9,650,000 $ 55,354,601
========== ========== ========== ========= ==========
(1) Estimated intangible asset and equity adjustment based on preliminary
appraisal results.
NOTE: There is no material difference between the fair market value and the
historical carrying costs of the assets and liabilities of Wink Davis
Equipment Company. Accordingly, the excess of the purchase price has
been fully allocated to intangible assets.
7
PRO FORMA STATEMENT OF OPERATIONS
TWELVE MONTHS ENDED JUNE 28, 1997
Pro Forma
Speizman Wink Davis Adjustments Adjustments Consolidated
Industries, Equipment Co. Debit Credit June 28, 1997
Inc.
REVENUES $ 79,103,225 $ 32,635,609 - - $111,738,834
Cost of sales 65,934,696 26,705,336 - - 92,640,032
Operating expenses 8,855,628 5,391,186 300,000(1) (400,000)(2) 14,146,815
----------- ----------- ---------- ---------- ------------
Total costs and expenses 74,790,325 32,096,522 300,000 (400,000) 106,786,814
---------- ---------- ---------- ---------- -----------
4,312,900 539,087 - - 4,951,987
NET INTEREST EXPENSE (INCOME) (17,651) - 800,000(3) - 782,349
----------- -----------
NET INCOME BEFORE TAXES 4,330,551 539,087 - - 4,169,638
TAXES ON INCOME 1,645,000 - (64,000)(4) 1,581,000
----------- ---------- -------- ---------- ----------
NET INCOME $ 2,685,551 $ 539,087 1,100,000 (464,000) $ 2,588,638
=========== ========== ========= ======== ============
PRO FORMA NET INCOME PER
SHARE $ 0.77
====
(1) amortization of intangible asset over a 15-year period.
(2) reduction of salaries expense based on contractual agreement.
(3) interest expense related to acquisition debt.
(4) adjustment to income taxes based on an effective income tax rate of
40%. As an S corporation prior to August 1, 1997, Wink Davis Equipment
Company did not recognize income tax expense.
8
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, as
amended, the Registrant has duly caused this report to be signed on its behalf
by the undersigned hereunto duly authorized.
SPEIZMAN INDUSTRIES, INC.
Date: October 14, 1997 By: /s/ Robert S. Speizman
-----------------------------
Robert S. Speizman, President
Date: October 14, 1997 By: /s/ Josef Sklut
----------------------
Josef Sklut, Vice President-Finance
9