SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 8-K
CURRENT REPORT
PURSUANT TO SECTION 13 OR 15(D) OF THE SECURITIES ACT OF 1934
Date of Report (Date of earliest event reported): JULY 11, 1996
HEICO CORPORATION
(Exact name of registrant as specified in charter)
FLORIDA 1-4604 65-0341002
(State or other (Commission (I.R.S. Employer
jurisdiction of File Number) Identification No.)
incorporation)
3000 TAFT STREET, HOLLYWOOD, FLORIDA 33021
(Address of principal executive offices)
Registrant's telephone number, including area code: (954) 987-6101
Item 2. ACQUISITION OR DISPOSITION OF ASSETS.
On July 11, 1996, HEICO Corporation, a Florida corporation (the
"Registrant"), consummated the sale of all of the outstanding capital stock of
its wholly-owned subsidiary MediTek Health Corporation, a Florida corporation
("MediTek"), to U.S. Diagnostic Labs Inc., a Delaware corporation ("USDL"),
pursuant to a Stock Purchase Agreement, dated June 20, 1996 (the "Stock Purchase
Agreement"), among the Registrant, MediTek and USDL. In consideration of the
sale of such MediTek capital stock, USDL paid the Registrant $13,828,179 in cash
and issued the Registrant a five-year, 6-1/2% promissory note (the "Convertible
Note") in the principal amount of $10,000,000, which is convertible into
1,081,081 shares of USDL common stock (by virtue of a negotiated $9.25 per share
conversion price). The closing price per share of USDL common stock as reported
by NASDAQ on July 10, 1996 and July 19, 1996 was $11.25 and $10.625,
respectively.
In order to assure the Registrant liquidity with respect to the
Convertible Note and the USDL common stock into which it is convertible, USDL
(i) granted the Registrant demand and piggy-back registration rights with
respect to such shares of USDL common stock, and (ii) agreed to prepay the
Convertible Note at the Registrant's request at any time until such registration
is completed. The terms of such demand registration rights require USDL to use
its best efforts to cause a registration statement covering all of the USDL
common stock into which the Convertible Note is convertible to be declared
effective by the SEC by January 1, 1997. The terms of such piggy-back
registration rights give the Registrant rights to include such USDL common stock
in certain registration statements filed by USDL from January 1, 1997 until
January 1, 2000. Upon 15 days' prior written notice to the Registrant, USDL may
require the Registrant to convert the Convertible Note into USDL common stock at
any time beginning on the later of June 30, 1997 or the date that such shares of
USDL common stock have been registered, if the closing price of the USDL common
stock has averaged at least $9.25 per share for the immediately preceding ten
trading days. Also, beginning on June 30, 1997, USDL may prepay the Convertible
Note at any time upon 60 days' prior written notice.
The Stock Purchase Agreement also provides for Laurans A. Mendelson, the
Chairman of the Board, Chief Executive Officer and President of the Registrant,
to become a member of USDL's Board of Directors. Joseph A. Paul, the Executive
Vice President of MediTek, was appointed President of USDL, effective as of the
consummation of this transaction.
Item 7. FINANCIAL STATEMENTS AND EXHIBITS.
(a) Not applicable.
(b) Pro forma financial information.
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The following unaudited pro forma consolidated condensed financial information
is furnished in accordance with Article 11 of Regulation S-X:
Introductory note to unaudited pro forma consolidated condensed financial
statements (page 6).
Unaudited pro forma consolidated condensed balance sheet as of April 30,
1996 (page 7).
Unaudited pro forma consolidated condensed statement of operations for the
six months ended April 30, 1996 (page 8).
Unaudited pro forma consolidated condensed statement of operations for the
year ended October 31, 1995 (page 9).
(c) Exhibits
2 Stock Purchase Agreement, dated June 20, 1996, by and among HEICO
Corporation, MediTek Health Corporation and U.S. Diagnostic Labs
Inc.
99.1 Press Release of HEICO Corporation, dated June 17, 1996.
99.2 Press Release of HEICO Corporation, dated July 11, 1996.
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SIGNATURE
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 thereunto duly authorized.
HEICO CORPORATION
By: /s/ THOMAS S. IRWIN
---------------------------------
Name: Thomas S. Irwin
Title: Executive Vice President and
Chief Financial Officer
July 26, 1996
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FINANCIAL STATEMENT INDEX
Introductory note to unaudited pro forma consolidated condensed financial
statements (page 6).
Unaudited pro forma consolidated condensed balance sheet as of April 30, 1996
(page 7).
Unaudited pro forma consolidated condensed statement of operations for the six
months ended April 30, 1996 (page 8).
Unaudited pro forma consolidated condensed statement of operations for the year
ended October 31, 1995 (page 9).
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HEICO CORPORATION AND SUBSIDIARIES
INTRODUCTORY NOTE TO UNAUDITED
PRO FORMA CONSOLIDATED CONDENSED FINANCIAL STATEMENTS
The following unaudited pro forma consolidated condensed balance sheet and
statements of operations utilize the historical financial condition and results
of operations of HEICO Corporation and subsidiaries as of April 30, 1996 and for
the six months then ended and for the year ended October 31, 1995. The unaudited
pro forma consolidated condensed financial statements have been prepared on the
basis summarized below:
/bullet/ The unaudited pro forma consolidated condensed balance sheet as of
April 30, 1996 assumes that the Company's sale of all of the
outstanding capital stock of its wholly-owned subsidiary MediTek
Health Corporation had been consummated as of that date.
/bullet/ The unaudited pro forma consolidated condensed statement of
operations for the six months ended April 30, 1996 assumes that the
Company's sale of all of the outstanding capital stock of its
wholly-owned subsidiary MediTek Health Corporation had been
consummated as of the beginning of the six-month period ended April
30, 1996.
/bullet/ The unaudited pro forma consolidated condensed statements of
operations for the year ended October 31, 1995 assumes that the
Company's sale of all of the outstanding capital stock of its
wholly-owned subsidiary MediTek Health Corporation had been
consummated as of the beginning of the year ended October 31, 1995.
The unaudited pro forma consolidated condensed statements of operations are not
necessarily indicative of actual operating results had the sale been made at the
beginning of the periods presented or of future results of operations.
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HEICO CORPORATION AND SUBSIDIARIES
PRO FORMA CONSOLIDATED CONDENSED BALANCE SHEET
as of April 30, 1996
(unaudited)
HEICO MEDITEK
CORPORATION HEALTH PRO FORMA PRO FORMA
AS REPORTED(1) CORPORATION(2) ADJUSTMENTS AS ADJUSTED
-------------- -------------- ----------- -----------
ASSETS
Current Assets:
Cash and cash equivalents $9,117,000 ($713,000) $12,228,000(7) $20,632,000
Accounts receivable, net 7,317,000 (2,216,000) 5,101,000
Inventories 6,202,000 -- 6,202,000
Prepaid expenses and other
current assets 1,408,000 (677,000) 731,000
Deferred income taxes 2,065,000 (329,000) 1,736,000
----------- ------------ ----------- -----------
Total current assets 26,109,000 (3,935,000) 12,228,000 34,402,000
Note receivable from
U.S. Diagnostic Labs -- -- 10,000,000(8) 10,000,000
Property, plant and
equipment, net 8,960,000 (4,669,000) 4,291,000
Intangible assets, net 13,057,000 (11,144,000) 1,913,000
Investments in and advances to
unconsolidated partnerships 2,312,000 (2,312,000) --
Other assets 1,245,000 (278,000) 967,000
----------- ------------ ----------- -----------
Total assets $51,683,000 ($22,338,000) $22,228,000 $51,573,000
=========== ============ =========== ===========
LIABILITIES AND SHAREHOLDERS'
EQUITY
Current liabilities:
Current maturities of
long-term debt and
capital leases $ 1,236,000 ($780,000) $456,000
Trade accounts payable 2,224,000 (654,000) 1,570,000
Accrued expenses and other
current liabilities 4,868,000 (920,000) 3,948,000
Income taxes payable 943,000 -- $1,178,000(9) 2,121,000
----------- ----------- ----------- -----------
Total current liabilities 9,271,000 (2,354,000) 1,178,000 8,095,000
Long-term debt and capital
leases, net of current
maturities 5,966,000 (3,359,000) 2,607,000
Deferred income taxes 1,697,000 (565,000) 1,132,000
Other non-current liabilities 1,102,000 -- 1,102,000
----------- ----------- ----------- -----------
Total liabilities 18,036,000 (6,278,000) 1,178,000 12,936,000
----------- ----------- ----------- -----------
Minority interests 119,000 (119,000) --
----------- ----------- -----------
Commitments and contingencies
Shareholders' equity:
Preferred stock, none issued
Common stock 43,000 -- 43,000
Capital in excess of par 9,672,000 -- 9,672,000
Investment in and advances to
MediTek by HEICO -- (15,941,000) 15,941,000(10) --
Retained earnings 27,152,000 -- 5,109,000(11) 32,261,000
----------- ----------- ----------- -----------
36,867,000 (15,941,000) 21,050,000 41,976,000
Less: Note receivable from
employee savings and
investment plan (3,339,000) -- -- (3,339,000)
----------- ------------ ----------- -----------
Total shareholders' equity 33,528,000 (15,941,000) 21,050,000 38,637,000
----------- ------------ ----------- -----------
Total liabilities and
shareholders' equity $51,683,000 ($22,338,000) $22,228,000 $51,573,000
=========== ============ =========== ===========
See accompanying notes to unaudited pro forma consolidated financial statements
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HEICO CORPORATION AND SUBSIDIARIES
PRO FORMA CONSOLIDATED CONDENSED STATEMENT OF OPERATIONS
For the six months ended April 30, 1996
(unaudited)
HEICO MEDITEK
CORPORATION HEALTH PRO FORMA PRO FORMA
AS REPORTED(3) CORPORATION(4) ADJUSTMENTS AS ADJUSTED
-------------- -------------- ----------- -----------
Net sales $23,260,000 ($8,340,000) $14,920,000
----------- ----------- -----------
Operating costs and expenses:
Cost of products and services 16,033,000 (6,151,000) 9,882,000
Selling, general and
administrative expenses 4,441,000 (989,000) 3,452,000
Equity in (income) of
unconsolidated partnerships (341,000) 341,000 0
----------- ----------- -----------
Total operating costs
and expenses 20,133,000 (6,799,000) 13,334,000
----------- ----------- -----------
Income from operations 3,127,000 (1,541,000) 1,586,000
Interest expense (147,000) 60,000 (87,000)
Interest and other income 372,000 (14,000) $288,000(12) 971,000
325,000(13)
Minority interests in
consolidated partnerships (228,000) 228,000 0
----------- ----------- ---------- -----------
Income from continuing
operations before
income taxes 3,124,000 (1,267,000) 613,000 2,470,000
Income tax expenses 1,172,000 (516,000) 153,000(14) 809,000
----------- ----------- ---------- -----------
Net income from continuing
operations 1,952,000 (751,000) 460,000 1,661,000
Gain on sale of health care
services segment,
net of applicable income
taxes -- -- 5,109,000(15) 5,109,000
----------- ----------- ---------- -----------
Net income $ 1,952,000 ($751,000) $5,569,000 $ 6,770,000
=========== =========== ========== ===========
Net income per share from
continuing operations $0.38 $0.32
=========== ===========
Net income per share $0.38 $1.30
=========== ===========
Weighted average number of
common and common
equivalent shares
outstanding(16) 5,189,664 5,189,664
=========== ===========
See accompanying notes to unaudited pro forma consolidated financial statements
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HEICO CORPORATION AND SUBSIDIARIES
PRO FORMA CONSOLIDATED CONDENSED STATEMENT OF OPERATIONS
For the year ended October 31, 1995
(unaudited)
HEICO MEDITEK
CORPORATION HEALTH PRO FORMA PRO FORMA
AS REPORTED(5) CORPORATION(6) ADJUSTMENTS AS ADJUSTED
-------------- -------------- ----------- -----------
Net sales $40,379,000 ($14,766,000) $25,613,000
----------- ------------ -----------
Operating costs and expenses:
Cost of products and services 27,875,000 (10,378,000) 17,497,000
Selling, general and
administrative expenses 7,967,000 (1,562,000) 6,405,000
Equity in loss of
unconsolidated partnerships 331,000 (331,000) 0
----------- ------------ -----------
Total operating costs
and expenses 36,173,000 (12,271,000) 23,902,000
----------- ------------ -----------
Income from operations 4,206,000 (2,495,000) 1,711,000
Interest expense (375,000) 206,000 (169,000)
Interest and other income 673,000 (7,000) $530,000(12) 1,846,000
650,000(13)
Minority interests in
consolidated partnerships (144,000) 144,000 0
----------- ------------ ---------- -----------
Income from continuing
operations before
income taxes 4,360,000 (2,152,000) 1,180,000 3,388,000
Income tax expenses 1,665,000 (894,000) 412,000(14) 1,183,000
----------- ------------ ---------- -----------
Net income from
continuing operations 2,695,000 (1,258,000) 768,000 2,205,000
Gain on sale of health care
services segment,
net of applicable
income taxes -- -- 5,109,000(15) 5,109,000
----------- ------------ ---------- -----------
Net income $ 2,695,000 ($1,258,000) $5,877,000 $ 7,314,000
=========== ============ ========== ===========
Net income per share from
continuing operations $0.56 $0.46
=========== ===========
Net income per share $0.56 $1.52
=========== ===========
Weighted average number
of common and common
equivalent shares
outstanding(17) 4,820,336 4,820,336
=========== ===========
See accompanying notes to unaudited pro forma consolidated financial statements
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HEICO CORPORATION AND SUBSIDIARIES
NOTES TO UNAUDITED PRO FORMA CONSOLIDATED CONDENSED FINANCIAL STATEMENTS
1. As disclosed in the Company's Quarterly Report on Form 10-Q as of April
30, 1996.
2. Represents MediTek Health Corporation's consolidated condensed balance
sheet as of April 30, 1996.
3. As disclosed in the Company's Quarterly Report on Form 10-Q for the six
months ended April 30, 1996.
4. Represents MediTek Health Corporation's consolidated condensed statement
of operations for the six months ended April 30, 1996.
5. As disclosed in the Company's Annual Report on Form 10-K for the year
ended October 31, 1995.
6. Represents MediTek Health Corporation's consolidated condensed statement
of operations for the year ended October 31, 1995.
The pro forma adjustments give effect to:
7. $13,828,000 cash proceeds from the sale of MediTek, less an estimated $1.6
million in expenses pertaining to the sale.
8. A $10 million, 6.50% convertible note receivable from the purchaser as
additional sale proceeds.
9. Increase in Federal and state income taxes payable on the gain on sale of
MediTek after utilizing a $4.6 million Federal capital loss carryforward.
10. Elimination of investment in and advances to MediTek by HEICO.
11. Gain on sale of MediTek, after applicable Federal and state income taxes,
as if consummated as of April 30, 1996.
12. Investment income for the period from the $11.1 million sale proceeds, net
of income taxes (see item 7 above).
13. 6.50% interest from the note receivable from the purchaser (see item 8
above).
14. Additional income tax expense after elimination of MediTek and giving
effect to the pro forma adjustments.
15. Gain on sale of MediTek, net of applicable Federal and state income taxes,
as if consummated as of April 30, 1996.
16. Weighted average number of common and common equivalent shares outstanding
have been adjusted from the originally reported amount to reflect a 10%
stock dividend payable July 26, 1996.
17. Weighted average number of common and common equivalent shares outstanding
have been adjusted from the originally reported amount to reflect a
three-for-two stock split paid in April 1996 and a 10% stock dividend
payable July 26, 1996.
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EXHIBIT INDEX
SEQUENTIALLY
EXHIBIT NUMBERED
NUMBER DESCRIPTION PAGE
- ------- ----------- ------------
2 Stock Purchase Agreement, dated June 20, 1996,
by and among HEICO Corporation, MediTek Health
Corporation and U.S. Diagnostic Labs Inc.
99.1 Press Release of HEICO Corporation, dated
June 17, 1996.
99.2 Press Release of HEICO Corporation, dated
July 11, 1996.
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