-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, IQfFOVpVdYoms2yPIvqVs9xVIO3wbSB3Q8MOUDZ/SzbsmVSZy5jMk281GJBSqhO7 7U84EB7ElMJ2DuzWj3I+Vg== 0000950129-97-004279.txt : 19971020 0000950129-97-004279.hdr.sgml : 19971020 ACCESSION NUMBER: 0000950129-97-004279 CONFORMED SUBMISSION TYPE: 8-K/A PUBLIC DOCUMENT COUNT: 1 CONFORMED PERIOD OF REPORT: 19970602 ITEM INFORMATION: FILED AS OF DATE: 19971017 SROS: NASD FILER: COMPANY DATA: COMPANY CONFORMED NAME: DXP ENTERPRISES INC CENTRAL INDEX KEY: 0001020710 STANDARD INDUSTRIAL CLASSIFICATION: WHOLESALE-INDUSTRIAL MACHINERY & EQUIPMENT [5084] IRS NUMBER: 760509661 STATE OF INCORPORATION: TX FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 8-K/A SEC ACT: SEC FILE NUMBER: 000-21513 FILM NUMBER: 97697403 BUSINESS ADDRESS: STREET 1: 580 WESTLAKE PARK BLVD STREET 2: SUITE 1100 CITY: HOUSTON STATE: TX ZIP: 77079 BUSINESS PHONE: 713-531-42 MAIL ADDRESS: STREET 1: 580 WESTLAKE PARK BLVD STREET 2: SUITE 1100 CITY: HOUSTON STATE: TX ZIP: 77079 FORMER COMPANY: FORMER CONFORMED NAME: INDEX INC DATE OF NAME CHANGE: 19960808 8-K/A 1 DXP ENTERPRISES, INC. 1 ================================================================================ UNITED STATES SECURITIES AND EXCHANGE COMMISSION WASHINGTON, D.C. 20549 AMENDMENT NO. 2 TO FORM 8-K ON 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): JUNE 2, 1997 DXP ENTERPRISES, INC. (Exact name of registrant as specified in charter) TEXAS 0-21513 76-0509661 (State of Incorporation) (Commission File No.) (I.R.S. Employer Identification No.) 580 WESTLAKE PARK BOULEVARD, SUITE 1100 HOUSTON, TEXAS 77079 (Address of Principal Executive Offices) (Zip Code) REGISTRANT'S TELEPHONE NUMBER, INCLUDING AREA CODE: (281) 531-4214 ================================================================================ 2 EXPLANATION As discussed in the Current Report on Form 8-K dated June 2, 1997 (the "Current Report") of DXP Enterprises, Inc., a Texas corporation (the "Registrant"), as filed with the Securities and Exchange Commission (the "Commission") on June 17, 1997, as amended by Amendment No. 1 to Form 8-K on Form 8-K/A, as filed with the Commission on July 25, 1997, on June 2, 1997, a wholly-owned subsidiary of the Registrant acquired substantially all of the assets ("the Strategic Acquisition") of Strategic Supply, Inc., a Delaware corporation ("Strategic"), pursuant to an Asset Purchase Agreement dated May 27, 1997 (the "Agreement"), among Strategic, Coulson Technologies, Inc., a Delaware corporation, Strategic Distribution, Inc., a Delaware corporation, Strategic Acquisition, Inc., a Nevada corporation and wholly-owned subsidiary of the Registrant, and the Registrant. The purchase price, which is subject to adjustment, consisted of approximately $4.1 million in existing cash, assumption of approximately $4.7 million of trade payables and other accrued expenses, $2.8 million in promissory notes payable to Strategic and earn-out payments based on the earnings before interest and taxes of Strategic to be paid over a period of approximately six years, which earn-out payments shall not exceed $3,500,000. Item 7(b) of the Current Report is hereby amended and restated in its entirety as follows: ITEM 7. FINANCIAL STATEMENTS AND EXHIBITS. (b) Pro Forma Financial Information. Index to Pro Forma Financial Information
Page No. -------- Pro Forma Combined Balance Sheet as of March 31, 1997.......... 4 Pro Forma Combined Statement of Operations..................... 5 Pro Forma Adjustments.......................................... 7
Page 2 3 UNAUDITED PRO FORMA COMBINED FINANCIAL STATEMENTS The unaudited pro forma combined balance sheets as of March 31, 1997 and unaudited pro forma combined statements of earnings for the three months ended March 31, 1997 and the year ended December 31, 1996 give effect to the acquisition by a wholly-owned subsidiary of the Registrant of substantially all of the assets of Strategic on June 2, 1997. The unaudited pro forma combined statements of earnings assume all such transactions occurred at the beginning of the periods presented. The unaudited pro forma combined balance sheets assume all such transactions occurred at the end of the periods presented. The unaudited pro forma combined financial statements may not be indicative of the results that would have occurred if the combination had been in effect on the dates indicated or which may occur in the future. The unaudited pro forma condensed combined financial statements should be read in conjunction with the financial statements of Strategic, which are included elsewhere in this Current Report. The pro forma adjustments do not reflect projected cost savings of $414,000 for the three month period ended March 31, 1997 and $1,015,000 for the year ended December 31, 1996 relating to the elimination of duplicative personnel and intercompany charges reflected in Strategic's results. Additionally, the pro forma adjustments do not reflect to the elimination of certain restructuring charges and other one-time expenses of $1,363,000 for the year ended December 31, 1996 relating to prior mergers and branch closings. Page 3 4 DXP ENTERPRISES, INC. PRO FORMA COMBINED BALANCE SHEET (IN THOUSANDS)
March 31, 1997 ------------------------------------------------------------- Strategic DXP Supply Pro Forma Pro Forma Historical Historical Adjustments Combined ------------------------------------------------------------- ASSETS Current Assets: Cash $ 979 $ 131 $ (131)(1) $ 979 Trade accounts receivable, net 19,899 6,121 (6,121)(1) 19,899 Inventories 16,665 9,300 -- 25,965 Prepaid Expenses and other current assets 266 79 -- 345 Deferred income taxes 569 -- -- 569 ----------- ----------- ----------- ----------- Total current assets 38,378 15,631 (6,252) 47,757 Property, plant and equipment, net 7,792 2,328 -- 10,120 Other assets 953 404 (336)(1) 1,021 ----------- ----------- ----------- ----------- Total assets $ 47,123 $ 18,363 $ (6,588) $ 58,898 =========== =========== =========== =========== LIABILITIES AND SHAREHOLDERS' EQUITY Current Liabilities: Trade accounts payable $ 8,944 $ 4,334 $ -- $ 13,278 Employee compensation 884 -- -- 884 Other accrued liabilities 965 -- -- 965 Current portion of long-term debt 623 81 (52)(2) 652 Current portion of subordinated debt -- -- 125 (2) 125 Due to parent -- 12,794 (12,794)(1) -- ----------- ----------- ----------- ----------- Total current liabilities 11,416 17,207 (12,721) 15,904 Suspense -- -- 6,598 (1) -- -- -- (6,598)(2) -- Long term debt, less current portion 22,792 762 4,150 (2) 27,704 Subordinated debt -- -- 2,375 (2) 2,375 Deferred compensation 739 -- -- 739 Deferred income taxes 364 -- -- 364 ----------- ----------- ----------- ----------- Total liabilities 35,311 17,971 (6,196) 47,086 Equity Subject to Redemption: Series A Preferred Stock 150 -- -- 150 Series B Convertible Preferred Stock 450 -- -- 450 Shareholders' Equity: Series A Preferred Stock 2 -- -- 2 Series B Preferred Stock 15 -- -- 15 Common Stock 160 1 (1)(1) 160 Paid-in capital 288 2,614 (2,614)(1) 288 Retained earnings 10,747 (2,222) 2,222 (1) 10,747 ----------- ----------- ----------- ----------- Total shareholders' equity 11,212 393 (393) 11,212 ----------- ----------- ----------- ----------- Total liabilities and shareholders' equity $ 47,123 $ 18,363 $ (6,588) $ 58,898 =========== =========== =========== ===========
Page 4 5 DXP Enterprises, Inc. Pro Forma Combined Statement of Operations (in thousands, except for per share data)
Three Months Ended March 31, 1997 ----------------------------------------------------------- Strategic DXP Supply Pro Forma Pro Forma Historical Historical Adjustments Combined ----------- ----------- ----------- ----------- Revenues $ 30,129 $ 12,372 $ -- $ 42,501 Costs and Expenses: Cost of Sales 21,756 9,281 -- 31,037 Selling, general and administrative 7,043 3,163 -- 10,206 ----------- ----------- ----------- ----------- Operating income (loss) 1,330 (72) -- 1,258 Other income (expense) Other income 429 -- -- 429 Interest expense (539) (22) (121)(3) (682) ----------- ----------- ----------- ----------- Earnings (loss) before income taxes 1,220 (94) (121) 1,005 Provision for income taxes 429 15 -- 444 ----------- ----------- ----------- ----------- Net income 791 (109) (121) 561 Preferred stock dividend 38 -- -- 38 ----------- ----------- ----------- ----------- Net income attributable to common shareholders $ 753 $ (109) $ (121) $ 523 =========== =========== =========== =========== Net income per share $ 0.08 $ 0.05 =========== =========== Weighted average shares outstanding 9,892 9,892 =========== ===========
Page 5 6 DXP Enterprises, Inc. Pro Forma Combined Statement of Operations (in thousands, except for per share data)
Year Ended December 31, 1996 ----------------------------------------------------------- Strategic DXP Supply Pro Forma Pro Forma Historical Historical Adjustments Combined ----------------------------------------------------------- Revenues $ 125,208 $ 50,972 $ -- $ 176,180 Costs and Expenses: Cost of Sales 93,091 38,907 -- 131,998 Selling, general and administrative 29,332 13,989 (143)(4) 43,178 Restructuring charge -- 878 -- 878 Special charges -- 2,836 (2,836)(5) 0 ----------- ----------- ----------- ----------- Operating income (loss) 2,785 (5,638) 2,979 126 Other income (expense) Other income 951 -- -- 951 Interest expense (2,101) (131) (439)(3) (2,671) ----------- ----------- ----------- ----------- Earnings (loss) before income taxes 1,635 (5,769) 2,540 (1,594) Provision for income taxes 745 (682) -- 63 ----------- ----------- ----------- ----------- Net income 890 (5,087) 2,540 (1,657) Preferred stock dividend 119 -- -- 119 ----------- ----------- ----------- ----------- Net income attributable to common shareholders $ 771 $ (5,087) $ 2,540 $ (1,776) =========== =========== =========== =========== Net income per share $ 0.09 $ 0.21 =========== =========== Weighted average shares outstanding 8,621 8,621 =========== ===========
Page 6 7 Pro Forma Adjustments 1. To remove the assets, liabilities and equity not included in the purchase by the Registrant and place in suspense the net assets purchased by the Registrant pursuant to the Agreement. 2. To record the debt incurred by the Registrant for the acquisition of the net assets of the Company. 3. To adjust interest expense of the debt incurred for the acquisition of the net assets of the Company. 4. To eliminate amortization of goodwill associated with prior acquisitions completed by the Company that were not purchased by the Registrant ($143,000). 5. To eliminate special charges not expected to be incurred by the combined entities. Page 7 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. DXP ENTERPRISES, INC. Dated: October 17, 1997 By: /s/ DAVID R. LITTLE --------------------------------------- David R. Little President and Chief Executive Officer -----END PRIVACY-ENHANCED MESSAGE-----