SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K
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CURRENT REPORT
Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934
Date of Report (Date of earliest event reported): July 10, 1997
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MICROELECTRONIC PACKAGING, INC.
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(Exact name of registrant as specified in charter)
CALIFORNIA 0-23562 94-3142624
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(State or other Jurisdiction (Commission (IRS Employer
of Incorporation) File Number) Identification No.)
9350 TRADE PLACE, SAN DIEGO, CALIFORNIA 92126
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(Address of principal executive offices) Zip Code
Registrant's telephone number, including area code: (619) 530-1660
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N/A
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(Former name or former address, if changed since last report)
Item 2. Acquisition or Disposition of Assets
On July 10, 1997, The Development Bank of Singapore Limited, one of the
Company's and its subsidiaries largest creditors ("DBS"), appointed a Receiver
and Manager to liquidate the assets of Microelectronic Packaging (S) Pte. Ltd.
("MPS"), which is a wholly owned subsidiary of Microelectronic Packaging, Inc.
(the "Company" or "MPI"). DBS exercised its option to appoint a receiver under
the terms of a Deed of Debenture dated November 27, 1984 (as amended) between
DBS and MPS.
On July 11, 1997, the Receiver, with the approval of the Company, sold
substantially all of MPS's inventory for $995,000 to Micropac Technology Pte.
Ltd. ("Micropac"). The specialized business of MPS and the inability of
Receivers and Managers to provide certification of conformance, reliability and
warranty led MPS management to conclude that the market value of MPS' inventory
to any other party is minimal, and that the offer of $995,000 was very
reasonable. Micropac is a newly-formed business unit of Innoventure (S) Pte.
Ltd. ("Innoventure"), an Indonesian company. Innoventure has partially
manufactured the ceramic packages sold by MPS and is not affiliated with MPI or
its subsidiaries or any officer or director thereof. MPI and Micropac are
negotiating a profit sharing or similar agreement in consideration for MPI's
assisting Micropac in establishing client/customer relationships and providing
technical assistance and training. The Company anticipates that the receiver
will complete the liquidation of MPS within the next several months. The Company
currently expects that DBS will be fully repaid by this process, thus, avoiding
the potential of DBS calling on MPI's guarantee of MPS's obligations to DBS.
There can be no assurance that such debt will be fully paid.
MPS has approximately $9,700,000 of customer loans which have been
guaranteed by MPI and are not expected to be extinguished through the
liquidation of MPS. As a result, these loans have been transferred to MPI and
are included in the "Pro Forma Consolidated" figures of the March 31, 1997
balance sheet.
As of July 10, 1997, all of MPS's employees were terminated. A
substantial portion of these employees were immediately hired by Micropac.
Item 7. Financial Statements and Exhibits
(b) Index to Pro Forma Financial Information:
Page No. Description
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4 Introduction to Unaudited Pro Forma Condensed Consolidated
Financial Information
5 Unaudited Pro Forma Condensed Consolidated Balance Sheet
as of March 31, 1997
6 Unaudited Pro Forma Condensed Consolidated Statement of
Operations for the Year Ended December 31, 1996
7 Unaudited Pro Forma Condensed Consolidated Statement of
Operations for the Three Months Ended March 31, 1997
8 Notes to Unaudited Pro Forma Condensed Consolidated Financial
Information
2
Item 7. Financial Statements and Exhibits (continued)
(c) Exhibits The following documents are filed as exhibits to this
report.
Exhibit No. Description
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10.94 Letter dated July 10, 1997 -- Appointment of Receivers
and Managers
10.95 Letter dated July 8, 1997 -- Acquisition of Inventory of
Microelectronic Packaging (S) Pte Ltd
10.96 Letter dated July 10, 1997 - Acceptance of Acquisition of
Inventory of Microelectronic Packaging (S) Pte Ltd
10.97 Press Release Dated July 10, 1997
3
MICROELECTRONIC PACKAGING, INC.
UNAUDITED PRO FORMA CONDENSED CONSOLIDATED FINANCIAL INFORMATION
Introduction:
The following Unaudited Pro Forma Condensed Consolidated Financial Information
is presented to illustrate the financial statement effect of the liquidation, as
described in Item 2 of this Form 8-K, of MPS, which was engaged in the
development of pressed ceramic packaging, and should be read in conjunction with
the historical financial statements of MPI contained in its Annual Report on
Form 10-K for the year ended December 31, 1996 and its Quarterly Report on Form
10-Q for the quarter ended March 31, 1997.
The accompanying Unaudited Pro Forma Condensed Consolidated Balance Sheet
adjusts the historical condensed consolidated balance sheet of MPI at March 31,
1997, as if the liquidation had occurred as of that date.
The accompanying Unaudited Pro Forma Condensed Consolidated Statement of
Operations for the year ended December 31, 1996 adjusts the results of
operations of MPI for the year ended December 31, 1996 as if the liquidation had
occurred as of the first day of that period. The accompanying Unaudited Pro
Forma Condensed Consolidated Statement of Operations for the three months ended
March 31, 1997 adjusts the results of operations of MPI for the three months
ended March 31, 1997 assuming a continuation of the Unaudited Pro Forma
Condensed Statement of Operations for the year ended December 31, 1996.
The accompanying Unaudited Pro Forma Condensed Consolidated Financial
Information and this description have been included as required by the rules of
the Securities and Exchange Commission and are provided for illustrative
purposes only. The pro forma financial information does not purport to be
indicative of the results which would have been obtained if MPI's liquidation of
MPS had been effected on the date or dates indicated or which may be obtained in
the future.
4
MICROELECTRONIC PACKAGING, INC.
UNAUDITED PRO FORMA CONDENSED CONSOLIDATED BALANCE SHEET
AS OF MARCH 31, 1997
Pro Forma Pro Forma
Historical Adjustments Consolidated
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ASSETS
Current assets:
Cash $ 2,949,000 $ (312,000)(1) $ 2,637,000
Accounts receivable, net 4,732,000 (3,014,000)(1) 1,718,000
Inventories 13,560,000 (3,335,000)(1) 10,225,000
Other current assets 879,000 (651,000)(1) 228,000
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Total current assets 22,120,000 (7,312,000)(1) 14,808,000
Property, plant and equipment, net 3,264,000 (2,675,000)(1) 589,000
Other non-current assets 874,000 (509,000)(1) 365,000
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$ 26,258,000 $(10,496,000) $ 15,762,000
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LIABILITIES AND SHAREHOLDERS' DEFICIT
Current liabilities:
Line of credit borrowings, due on demand $ 2,891,000 $ (2,809,000)(1) $ 82,000
Debt in default, due on demand 7,931,000 (1,731,000)(1) 6,200,000
Current portion of long-term debt 875,000 (108,000)(1) 767,000
Accounts payable 17,255,000 (3,342,000)(1) 13,913,000
Accrued liabilities 2,168,000 (889,000)(1) 1,279,000
Deferred revenue 451,000 -- 451,000
Current liabilities of
discontinued operations, net 20,429,000 -- 20,429,000
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Total current liabilities 52,000,000 (8,879,000) 43,121,000
Long-term debt, less current portion 4,390,000 (133,000)(1) 4,257,000
Total shareholders' deficit (30,132,000) (1,484,000)(1) (31,616,000)
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$ 26,258,000 $(10,496,000) $ 15,762,000
=================================================================================================
See accompanying notes to unaudited pro forma condensed consolidated financial
information.
5
MICROELECTRONIC PACKAGING, INC.
UNAUDITED PRO FORMA CONDENSED CONSOLIDATED STATEMENT OF
OPERATIONS FOR THE YEAR ENDED DECEMBER 31, 1996
Historical Pro Forma Pro Forma
(Audited) Adjustments Consolidated
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Net sales $ 55,988,000 $(33,567,000)(1) $ 22,421,000
Cost of goods sold 48,778,000 (29,492,000)(1) 19,286,000
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Gross profit 7,210,000 (4,075,000) 3,135,000
Selling, general and administrative 8,260,000 (4,452,000)(1) 3,808,000
Impairment of long-lived assets 6,163,000 (6,163,000)(1) --
Engineering and product development 2,717,000 (2,051,000)(1) 666,000
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Income (loss) from operations (9,930,000) 8,591,000 (1,339,000)
Other income (expense):
Interest (expense), net (2,032,000) 628,000 (1) (1,404,000)
Foreign exchange gain (loss) 292,000 (298,000)(1) (6,000)
Other income, net 369,000 (270,000)(1) 99,000
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Income (loss) from continuing operations (11,301,000) 8,651,000 (2,650,000)
Discontinued operations:
Loss from operations (1,196,000) -- (1,196,000)
Estimated loss on disposal of multilayer
ceramics operations, including
provision of $1,580,000 for operating
losses through disposal date (29,345,000) -- (29,345,000)
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Net loss $(41,842,000) $ 8,651,000 $(33,191,000)
==================================================================================================
Weighted average number of shares
outstanding 5,445,000 5,445,000 5,445,000
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Net loss per common share:
Loss from continuing operations $ (2.07) $ 1.58 $ (0.49)
Discontinued operations (5.61) -- (5.61)
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Net loss per share $ (7.68) $ 1.58 $ (6.10)
==================================================================================================
See accompanying notes to unaudited pro forma condensed consolidated financial
information.
6
MICROELECTRONIC PACKAGING, INC.
UNAUDITED PRO FORMA CONDENSED CONSOLIDATED STATEMENT OF
OPERATIONS FOR THE QUARTER ENDED MARCH 31, 1997
Pro Forma Pro Forma
Historical Adjustments Consolidated
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Net sales $13,894,000 $(5,435,000)(1) $8,459,000
Cost of goods sold 13,177,000 (5,652,000)(1) 7,525,000
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Gross profit 717,000 217,000 934,000
Selling, general and administrative 1,718,000 (429,000)(1) 1,289,000
Engineering and product development 339,000 (231,000)(1) 108,000
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Income (loss) from operations (1,340,000) 877,000 (463,000)
Other income (expense):
Foreign exchange gain 303,000 (297,000)(1) 6,000
Interest (expense), net (390,000) 141,000 (1) (249,000)
Other income, net 208,000 (40,000)(1) 168,000
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Net income (loss) $ (1,219,000) $ 681,000 $ (538,000)
=============================================================================================
Weighted average shares used in per share
calculation 9,040,000 9,040,000 9,040,000
===========================================================================================
Net income (loss) per share $ (0.13) $ 0.07 $ (0.06)
===========================================================================================
See accompanying notes to unaudited pro forma condensed consolidated financial
information.
7
MICROELECTRONIC PACKAGING, INC.
NOTES TO UNAUDITED PRO FORMA CONDENSED
CONSOLIDATED FINANCIAL INFORMATION
NOTE 1 - BASIS OF PRESENTATION
Reference is made to the "Introduction" on Page 4.
NOTE 2 - PRO FORMA ADJUSTMENTS
The pro forma adjustments to the condensed consolidated financial information
are as follows:
(1) To reflect the following: (a) the application of the estimated proceeds
from the sale of MPS's assets of $9,000,000 to reduce borrowings of MPS;
(b) the retention of debt obligations of MPS which were previously
guaranteed by MPI; (c) the elimination of unsecured liabilities; and (d)
the removal of the revenues, cost of sales, operating and applicable
interest expenses of MPS from the consolidated operations of the
Company.
8
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.
Microelectronic Packaging, Inc.
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(Registrant)
July 18, 1997 By: /s/ DENIS J. TRAFECANTY
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Name: Denis J. Trafecanty
Title: Senior Vice President and
Chief Financial Officer
9
MICROELECTRONIC PACKAGING, INC.
EXHIBIT INDEX
TO FORM 8-K
Exhibit No. Description
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10.94 Letter dated July 10, 1997 -- Appointment of Receivers and
Managers
10.95 Letter dated July 8, 1997 -- Acquisition of Inventory of
Microelectronic Packaging (S) Pte Ltd
10.96 Letter dated July 10, 1997 - Acceptance of Acquisition of
Inventory of Microelectronic Packaging (S) Pte Ltd
10.97 Press Release Dated July 10, 1997
10