-----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, SAB8M9U2VqpMXvwjqIsla9WC+PihIkKlDrun8szw1vcaBQCO57YUXaIB7YG3PGHx G82ymXCeFmk5G522ESzskA== 0001047469-99-003802.txt : 19990209 0001047469-99-003802.hdr.sgml : 19990209 ACCESSION NUMBER: 0001047469-99-003802 CONFORMED SUBMISSION TYPE: 8-K/A PUBLIC DOCUMENT COUNT: 2 CONFORMED PERIOD OF REPORT: 19981209 ITEM INFORMATION: FILED AS OF DATE: 19990208 FILER: COMPANY DATA: COMPANY CONFORMED NAME: QUIXOTE CORP CENTRAL INDEX KEY: 0000032870 STANDARD INDUSTRIAL CLASSIFICATION: PHONOGRAPH RECORDS & PRERECORDED AUDIO TAPES & DISKS [3652] IRS NUMBER: 362675371 STATE OF INCORPORATION: DE FISCAL YEAR END: 0630 FILING VALUES: FORM TYPE: 8-K/A SEC ACT: SEC FILE NUMBER: 001-08123 FILM NUMBER: 99524149 BUSINESS ADDRESS: STREET 1: ONE E WACKER DR STREET 2: STE 3000 CITY: CHICAGO STATE: IL ZIP: 60601 BUSINESS PHONE: 3124676755 MAIL ADDRESS: STREET 1: ONE EAST WACKER DRIVE CITY: CHICAGO STATE: IL ZIP: 60601 FORMER COMPANY: FORMER CONFORMED NAME: ENERGY ABSORPTION SYSTEMS INC DATE OF NAME CHANGE: 19800815 8-K/A 1 FORM 8-K UNITED STATES SECURITIES AND EXCHANGE COMMISSION WASHINGTON, D.C. 20549 FORM 8-K/A Amendment No. 1 to Form 8-K (Dated December 16, 1998) Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934 DECEMBER 9, 1998 - ----------------------------------------------------------------------------- Date of Report (Date of earliest event reported) QUIXOTE CORPORATION - ----------------------------------------------------------------------------- (Exact name of registrant as specified in its charter) DELAWARE - ----------------------------------------------------------------------------- (State of Other Jurisdiction of Incorporation) 0-7903 36-2675371 - ----------------------- -------------------------------- (Commission File Number) (IRS Employer Identification No.) One East Wacker Drive Chicago, Illinois 60601 - ------------------------------------------------- ----------------- (Address of Principal Executive Offices) (Zip Code) (312) 467-6755 - ----------------------------------------------------------------------------- (Registrant's Telephone Number, Including Area Code) Item 7. Financial Statements, Pro Forma Financial Information and Exhibits (a) Financial Statements of Business Acquired Audited financial statements of Nu-Metrics, Inc. for the years ended December 31, 1997 and 1996. Unaudited condensed financial statements of Nu-Metrics, Inc. for the nine months ended September 30, 1998 and 1997. (b) Pro Forma Financial Information Unaudited Pro Forma Combined Condensed Statements of Operations for the year ended June 30, 1998 and for the three months ended September 30, 1998. Unaudited Pro Forma Combined Condensed Balance Sheet as of September 30, 1998. (c) Exhibits 2.1. Stock Purchase Agreement by and among Quixote Corporation and Nu-Metrics, Inc. and Harry Sampey, Ph.D., Brenda J. Auer, Christine C. Sampey, Kim A. Sampey, Vicki L. Sampey and Karen Singo dated as of November 30, 1998 (incorporated by reference to the identically numbered exhibit to the Form 8-K filed by the registrant on December 16, 1998). 2.2. Press release dated December 11, 1998 (incorporated by reference reference to the identically numbered exhibit to the Form 8-K filed by the registrant on December 16, 1998). 23. Consent of Independent Auditors (filed herein). The financial statements identified in Item 7 and attached hereto are hereby filed with the Commission in accordance with the above-referenced item. (a) Financial Statements of Business Acquired NU-METRICS, INC. AUDITED FINANCIAL STATEMENTS YEARS ENDED DECEMBER 31, 1997 AND 1996 INDEPENDENT AUDITOR'S REPORT Nu-Metrics, Inc. University Drive P.O. Box 518 Uniontown PA 15401 We have audited the accompanying balance sheets of Nu-Metrics, Inc. (an S corporation) as of December 31, 1997 and 1996, and the related statements of income, retained earnings, and cash flows for the years then ended. These financial statements are the responsibility of the Company's management. Our responsibility is to express an opinion on these financial statements based on our audit. We conducted our audit in accordance with generally accepted auditing standards. Those standards require that we plan and perform the audit 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 audit provides a reasonable basis for our opinion. In our opinion, the financial statements referred to in the first paragraph present fairly, in all material respects, the financial position of Nu-Metrics, Inc. as of December 31, 1997 and 1996, and the results of its operations and its cash flows for the years then ended in conformity with generally accepted accounting principles. /s/ Smith, Lewis, Chess & Company March 25, 1998 1 NU-METRICS, INC. BALANCE SHEET DECEMBER 31, ASSETS
1997 1996 ---- ---- CURRENT ASSETS: Cash $1,046,049 $ 596,409 Trade receivables, net 822,819 557,433 Other receivables 5,145 10,020 Inventory 542,116 590,059 Trading investments 183,694 108,603 ---------- ---------- TOTAL CURRENT ASSETS 2,599,823 1,862,524 PROPERTY, PLANT AND EQUIPMENT: Land 87,878 254,501 Land improvements 110,444 110,444 Buildings 936,298 936,298 Furniture and fixtures 293,470 290,188 Machinery and equipment 905,370 816,229 Airplane 466,537 465,451 Vehicles 103,164 62,424 Leasehold improvements 32,388 31,767 ---------- ---------- 2,935,549 2,967,302 Less: accumulated depreciation (1,223,266) (1,054,315) ---------- ---------- NET PROPERTY, PLANT AND EQUIPMENT 1,712,283 1,912,987 OTHER ASSETS: Goodwill 5,000 5,000 Loan fees 12,600 17,013 ---------- ---------- TOTAL OTHER ASSETS 17,600 22,013 ---------- ---------- TOTAL ASSETS $4,329,706 $3,797,524 ========== ==========
The Accompanying Notes are an Integral Part of These Financial Statements. 2 LIABILITIES AND SHAREHOLDERS' EQUITY
1997 1996 ---- ---- CURRENT LIABILITIES: Trade payables $ 190,063 $ 124,062 Notes payable 45,168 42,226 Mortgages payable 52,279 51,334 Accrued bonuses 44,900 65,100 Accrued expenses 6,129 5,287 ---------- ---------- TOTAL CURRENT LIABILITIES 338,539 288,009 LONG-TERM DEBT: Notes payable 329,658 373,745 Mortgages payable 647,920 700,930 ---------- ---------- TOTAL LONG-TERM DEBT 977,578 1,074,675 SHAREHOLDERS' EQUITY: Capital stock, $1 par value, 2,000,000 shares authorized 366,233 shares issued and outstanding 366,233 366,233 Retained earnings 2,647,356 2,068,607 ---------- ---------- TOTAL SHAREHOLDERS' EQUITY 3,013,589 2,434,840 ---------- ---------- TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY $4,329,706 $3,797,524 ========== ==========
The Accompanying Notes are an Integral Part of These Financial Statements. NU-METRICS, INC. STATEMENT OF INCOME AND RETAINED EARNINGS FOR THE YEARS ENDED DECEMBER 31,
1997 1996 ---- ---- AMOUNT % AMOUNT % --------- ---- --------- ----- INCOME: Sales, net $5,531,756 100.00 $5,341,191 100.00 DIRECT MANUFACTURING COSTS 1,306,091 23.61 1,178,322 22.06 ---------- ------ ---------- ------ 4,225,665 76.39 4,162,869 77.94 EXPENSES: Flight department 165,117 2.99 196,701 3.67 Manufacturing 485,700 8.78 423,873 7.92 Engineering 310,495 5.61 397,469 7.46 Selling 839,574 15.18 785,625 14.72 Administrative 806,123 14.57 833,894 15.60 Freight out 128,311 2.32 127,274 2.38 ---------- ------- ---------- ------- TOTAL EXPENSES 2,735,320 49.45 2,764,836 51.75 ---------- ------- ---------- ------- 1,490,345 26.94 1,398,033 26.19 OTHER INCOME (DEDUCTIONS): Interest income 27,777 0.50 19,661 0.37 Dividend income 9,749 0.17 3,208 0.06 Miscellaneous income 378 0.01 831 0.02 Bad debts recovered 54 77 Gain (loss) on sale of assets (19,081) (0.34) 1,585 0.03 Unrealized gain on trading securities 4,769 0.09 2,125 0.04 Flight department 286 0.01 14,671 0.27 Interest expense (71,662) (1.30) (73,769) (1.38) Gain on sale of trading securities 36,134 0.65 ---------- -------- TOTAL OTHER INCOME (DEDUCTIONS) (11,596) (0.21) (31,611) (0.59) ---------- -------- ---------- -------- NET INCOME 1,478,749 26.73 1,366,422 25.60 ======= ======= RETAINED EARNINGS-JANUARY 1, 2,068,607 1,352,185 DISTRIBUTIONS (900,000) (650,000) ---------- ---------- RETAINED EARNINGS-DECEMBER 31, $2,647,356 $2,068,607 ========== ==========
The Accompanying Notes are an Integral Part of These Financial Statements. 3 NU-METRICS, INC. STATEMENT OF CASH FLOWS FOR THE YEARS ENDED DECEMBER 31,
1997 1996 ---- ---- CASH FLOWS FROM OPERATING ACTIVITIES: Net income $1,478,749 $1,366,422 Adjustments to reconcile net income to cash provided by operating activities: Depreciation 168,951 153,748 Amortization 4,413 4,413 Trading investments purchased (143,069) (122,230) Trading investments sold 107,945 37,859 (Gain) loss on sale of assets 19,081 (1,585) Unrealized (gain) on trading securities (4,769) (2,125) (Gain) loss on sale of trading securities (36,134) (Increase) decrease in: Trade receivables (264,448) (203,603) Inventory 47,943 (137,543) Other receivables 4,875 (7,230) Increase (decrease) in: Trade payables 66,001 (9,097) Accrued expenses (19,358) 59,275 --------- ---------- NET CASH PROVIDED BY OPERATING ACTIVITIES 1,430,180 1,138,304 ---------- ---------- CASH FLOWS FROM INVESTING ACTIVITIES: Cash used for additions to building and equipment (134,872) (156,264) Cash used to purchase land (166,623) Sale proceeds-real estate 147,542 ---------- ----------- NET CASH PROVIDED (USED) BY INVESTING ACTIVITIES 12,670 (322,887) ---------- ----------- CASH FLOWS FROM FINANCING ACTIVITIES: Reduction of other long-term debt (93,210) (90,602) Dividends paid (900,000) (650,000) ---------- ----------- NET CASH (USED) BY FINANCING ACTIVITIES (993,210) (740,602) ---------- ----------- NET INCREASE IN CASH 449,640 74,815 CASH AT BEGINNING OF YEAR 596,409 521,594 ---------- ---------- CASH AT END OF YEAR $1,046,049 $ 596,409 ========== ==========
The Accompanying Notes are an Integral Part of These Financial Statements. 4 NU-METRICS, INC. STATEMENT OF CASH FLOWS FOR THE YEARS ENDED DECEMBER 31,
1997 1996 ---- ---- SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION: Cash paid during the year for: Interest $71,662 $73,769 ======= ======= Income taxes $ 0 $ 0 ======= =======
DISCLOSURE OF ACCOUNTING POLICY: For purposes of the statement of cash flows, the Company considers all highly liquid debt instruments purchased with an initial maturity of three months or less to be cash equivalents. The Accompanying Notes are an Integral Part of These Financial Statements. 5 NU-METRICS, INC. NOTES TO FINANCIAL STATEMENTS 1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES: This summary of significant accounting policies of Nu-Metrics, Inc. (the Company) is presented to assist in understanding the Company's financial statements. The financial statements and notes are representations of the Company's management, who is responsible for their integrity and objectivity. These accounting policies conform to generally accepted accounting principles and have been consistently applied in the preparation of the financial statements. BUSINESS ACTIVITY: The Company manufactures and sells computer measuring instruments to entities in the highway transportation industry. The Company's products are marketed on a world-wide basis. ACCOUNTING BASIS: The books and records of the Company are maintained on the accrual basis for financial reporting and income tax purposes. The accompanying financial statements represent the transactions of the Company for the years ended December 31, 1997 and 1996, on the accrual basis. TRADE RECEIVABLES: Trade receivables totalled $827,819 and $562,433 at December 31, 1997 and 1996, respectively. An allowance for doubtful accounts of $5,000 was established for the years ended December 31, 1997 and 1996 based on recent historical experience. Bad debt expense amounted to $8,470 and $13,994 for the years ended December 31, 1997 and 1996, respectively. INVENTORIES: Inventories at December 31, consisted of the following:
1997 1996 ---- ---- Raw materials $327,507 $369,638 Work-in-process 144,405 139,914 Finished goods 70,204 80,507 -------- -------- $542,116 $590,059 ======== ========
Inventories are stated at the lower of cost or market. Cost is determined by the average cost method. PROPERTY AND EQUIPMENT: Property and equipment are recorded at cost. Depreciation for assets acquired prior to January 1, 1981, is provided on the straight-line and declining balance methods over the estimated useful lives of the respective assets. Depreciation for assets acquired after December 31, 1980, is provided under the accelerated cost recovery system (ACRS) and modified ACRS, whereby recovery of cost is made using 6 1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued): accelerated methods of cost recovery over statutory recovery periods. Depreciation for assets acquired after December 31, 1992, is provided using the straight-line method over the following estimated useful lives:
YEARS -------- Buildings and improvements 40 Office furniture and equipment 7 Computer equipment 5 Warehouse equipment 10 Automobiles 3 Other vehicles 5 to 7 Other assets 7 to 10
RESEARCH AND DEVELOPMENT: Research and development expenses are expensed as incurred. LOAN FEES: Loan fees are amortized on the straight-line basis over the loan term. CORPORATE STATUS: The Company, with the consent of its shareholders, has elected under the Internal Revenue Code to be an S corporation. In lieu of corporation income taxes, the shareholders of an S corporation are taxed on their proportionate share of the Company's taxable income. Therefore, no income tax expense or liability for federal and state income taxes has been included in these financial statements. USE OF ESTIMATES: The presentation of financial statements under generally accepted accounting principles requires management to make estimates and assumptions that affect the reported amounts of assets, liabilities, revenue and expenses. Actual results could differ from those estimates. 2. TRADING INVESTMENTS: Trading investments at December 31, consist of marketable equity securities. The investments are carried at fair market value and aggregate unrealized gains are as follows:
1997 1996 ---- ---- Aggregate fair market value $183,694 $108,603 Aggregate cost 176,800 106,478 -------- -------- Unrealized gain 6,894 2,125 Less gain previously recorded (2,125) 0 -------- -------- $ 4,769 $ 2,125 ======== ========
The 1997 and 1996 unrealized gains of $4,769 and $2,125 have been included in earnings under "OTHER INCOME (DEDUCTIONS)." 7 3. LONG-TERM DEBT: Long-term debt at December 31, consisted of the following:
1997 1996 ---- ---- $826,000 construction note payable to bank. This note was obtained to finance the construction of a new facility which, effective January, 1995, houses all Company manufacturing and administrative operations. The note bears interest at prime plus .25%, and repayment is as follows: 1) $460,000 on the date pre-approved loan proceeds of a like amount are received from the Pennsylvania Industrial Development Authority (PIDA) and 2) $366,000 via 180 monthly principal payments of $2,033.33 plus interest at prime plus .25%, beginning August 1, 1995 and continuing through June 1, 2010. Note is secured by the real estate and the personal guarantee of the Company shareholder. $ 305,718 $ 330,449 The PIDA loan funds described in (1) above were received by the Company on June 16, 1995. This loan bears interest at 2% and is repayable in 180 monthly installments of $2,960 through July, 2010. Note is secured by a $366,000 first mortgage shared with the bank described in (2) above, and a $94,000 second mortgage. 394,481 421,816 Under amended terms (effective 11/15/95) requiring seventy-six (76) monthly installments of $4,761.90, including interest at prime plus 1/4%, through March, 2002. Note is secured by the Company aircraft. 332,967 359,530 $75,000 installment note payable to Business Development Council. Note is repayable in sixty (60) monthly installments of $1,381, including interest at 4%, through August, 2000. Note is secured by machinery and equipment. 41,859 56,440 ---------- ---------- 1,075,025 1,168,235 Less current portion 97,447 93,560 ---------- ---------- Total long-term debt $ 977,578 $1,074,675 ========== ==========
8 3. LONG-TERM DEBT (continued): Maturities of long-term debt are as follows:
YEAR ENDING DECEMBER 31, ------------ 1998 $ 97,447 1999 101,279 2000 99,829 2001 92,669 2002 96,684 Thereafter 587,117 ---------- $1,075,025 ==========
4. INCOME TAXES: As of September 30, 1991, a loss carry forward of $35,586 was available to offset future federal taxable income of Sampey Scientific, Ltd. However, with election of Subchapter S, (effective October 1, 1991) the loss carry forward is suspended for a period of fifteen years and can only be used if the Company reverts back to a "C" corporation. 5. CONCENTRATION OF CREDIT RISK: a) Bank Deposits The Company maintains its cash in bank deposit accounts at high quality financial institutions. The balances, at times, may exceed federally insured limits. At December 31, 1997 and 1996, the Company exceeded the insured limit by approximately $754,799 and $496,079, respectively. b) Geographic Areas of Operations: Approximately 18% of the Company's sales were to customers located outside of the United States. The Company also engages foreign vendors to perform various manufacturing and assembly functions. $162,323 was paid to these suppliers during 1997. 6. ADVERTISING COSTS: Nondirect response advertising is expensed as incurred, rather than when the first advertising takes place. The total advertising cost expensed was $345,330 and $327,619 for the years ended December 31, 1997 and 1996, respectively. 7. PROFIT SHARING PLAN: The Company established a profit sharing plan (with 401(k) element) in 1997 which is funded through employee pre-tax contributions and Company matching contributions. Plan eligibility requirements include completion of six-months of service, including service performed prior to plan adoption. Company matching contributions are at the rate of 50% of the individual employee's first 4% contributed. Company matching contributions are 100% vested after the completion of three years of service. 9 NU-METRICS, INC. UNAUDITED FINANCIAL STATEMENTS FOR THE NINE MONTHS ENDED SEPTEMBER 30, 1998 AND 1997 Nu-Metrics, Inc. University Drive, P.O. Box 518 Uniontown PA 15401 We have compiled the accompanying balance sheets of Nu-Metrics, Inc. (an S corporation) as of September 30, 1998 and 1997, and the related statements of income and retained earnings, and cash flows for the nine months then ended, and the accompanying supplementary information contained in Schedules I through XIII, which is presented only for supplementary analysis purposes, in accordance with Statements on Standards for Accounting and Review Services issued by the American Institute of Certified Public Accountants. A compilation is limited to presenting, in the form of financial statements and supplementary schedules, information that is the representation of management. We have not audited or reviewed the accompanying financial statements and supplementary schedules and, accordingly, do not express an opinion or any other form of assurance on them. Management has elected to omit substantially all of the disclosures required by generally accepted accounting principles. If the omitted disclosures were included in the financial statements, they might influence the user's conclusions about the Company's financial position, results of operations, and cash flows. Accordingly, these financial statements are not designed for those who are not informed about such matters. The Company, with the consent of its shareholders, has elected under the Internal Revenue Code and appropriate state regulations to be an S corporation. In lieu of corporate income taxes, the shareholders of an S corporation are taxed on their proportionate share of the Company's taxable income. Therefore, no provision or liability for federal and state income taxes has been included in these financial statements. /s/ Smith, Lewis, Chess & Company October 22, 1998 1 NU-METRICS, INC. BALANCE SHEET SEPTEMBER 30, ASSETS
1998 1997 ---- ---- CURRENT ASSETS: Cash $1,880,976 $ 769,767 Trade receivables, net 742,332 555,317 Other receivables 5,520 4,770 Inventory 888,801 524,881 ---------- ---------- TOTAL CURRENT ASSETS 3,517,629 1,854,735 PROPERTY, PLANT AND EQUIPMENT: Land and improvements 206,850 198,321 Buildings-hangar 944,798 936,298 Furniture and fixtures 190,240 293,470 Machinery and equipment 378,879 842,716 Airplane 466,538 466,538 Vehicles 111,915 103,164 Leasehold improvements 32,388 32,388 Construction in progress 182,182 ---------- ---------- 2,513,790 2,872,895 Less: accumulated depreciation (701,893) (1,176,835) ----------- --------- NET PROPERTY, PLANT AND EQUIPMENT 1,811,897 1,696,060 OTHER ASSETS: Goodwill 5,000 5,000 Investments 129,007 257,818 Loan fees 11,020 13,702 ---------- ---------- TOTAL OTHER ASSETS 145,027 276,520 ---------- ---------- TOTAL ASSETS $5,474,553 $3,827,315 ========== ==========
See Accountant's Report. 2 LIABILITIES AND SHAREHOLDERS' EQUITY
1998 1997 ---- ---- CURRENT LIABILITIES Trade payables $ 90,461 $ 98,285 Notes payable 93,286 40,939 Mortgage payable 73,087 51,849 Accrued expenses 15,164 3,162 Line of credit 144,000 ---------- --------- TOTAL CURRENT LIABILITIES 415,998 194,235 LONG-TERM DEBT: Notes payable 238,737 343,056 Mortgage note payable 845,377 661,463 ---------- ---------- TOTAL LONG-TERM DEBT 1,084,114 1,004,519 SHAREHOLDERS' EQUITY: Capital stock, $1 par value, 2,000,000 shares authorized, 366,233 shares issued and outstanding 366,233 366,233 Retained earnings 3,608,208 2,262,328 ---------- ---------- TOTAL SHAREHOLDERS' EQUITY 3,974,441 2,628,561 ---------- ---------- TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY $5,474,553 $3,827,315 ========== ==========
See Accountant's Report. NU-METRICS, INC. STATEMENT OF INCOME AND RETAINED EARNINGS FOR THE NINE MONTHS ENDED SEPTEMBER 30,
1998 1997 AMOUNT % AMOUNT % ------ - ------ - INCOME: Sales, net $5,811,244 100.00 $4,060,083 100.00 DIRECT MANUFACTURING COSTS 1,309,654 22.54 922,988 22.73 ---------- ------- ---------- ------- 4,501,590 77.46 3,137,095 77.27 EXPENSES: Flight department 136,466 2.35 126,656 3.11 Manufacturing 552,837 9.51 320,823 7.91 Engineering 293,388 5.04 257,631 6.34 Selling 688,035 11.85 639,194 15.75 Administrative 682,186 11.73 579,350 14.29 Freight out 99,114 1.71 92,101 2.27 ---------- ------- ---------- ------- TOTAL EXPENSES 2,452,026 42.19 2,015,755 49.67 ---------- ------- ---------- ------- 2,049,564 35.27 1,121,340 27.60 OTHER INCOME (DEDUCTIONS): Interest income 20,647 0.35 17,985 0.44 Dividend income 3,255 0.05 2,963 0.07 Miscellaneous income 1,144 0.02 290 0.01 Bad debts recovered 47 (Loss) on sale of assets (8,414) (0.14) (19,081) (0.47) Unrealized gain (loss) on investments (2,286) (0.04) 20,868 0.51 Flight department 286 0.01 Interest expense (53,058) (0.91) (50,977) (1.26) ----------- --------- ----------- -------- TOTAL OTHER INCOME (DEDUCTIONS) (38,712) (0.67) (27,619) (0.69) ----------- --------- ----------- -------- NET INCOME 2,010,852 34.60 1,093,721 26.91 ======= ======= RETAINED EARNINGS-JANUARY 1, 2,647,356 2,068,607 DISTRIBUTIONS (1,050,000) (900,000) ---------- ----------- RETAINED EARNINGS-SEPTEMBER 30, $3,608,208 $2,262,328 ========== ==========
See Accountant's Report. 3 NU-METRICS, INC. STATEMENT OF CASH FLOWS FOR THE NINE MONTHS ENDED SEPTEMBER 30,
1998 1997 ---- ---- CASH FLOWS FROM OPERATING ACTIVITIES: Net income $2,010,852 $1,093,721 Adjustments to reconcile net income to cash provided by operating activities: Depreciation 138,125 122,520 Amortization 3,330 3,311 Reinvested dividends (2,437) Loss on sale of assets 8,414 19,081 Reinvested dividends (2,385) Unrealized (gain) loss on investments 2,286 (20,868) (Increase) decrease in: Trade receivables 80,513 2,116 Inventory (346,685) 65,178 Other receivables (375) 5,250 Increase (decrease) in: Trade payables (99,602) (25,780) Accrued expenses (35,865) (66,285) ----------- ---------- NET CASH PROVIDED BY OPERATING ACTIVITIES 1,758,556 1,195,859 ---------- --------- CASH FLOWS FROM INVESTING ACTIVITIES: Cash used to purchase fixed assets (64,347) (72,217) Cash used to purchase investments (126,898) Sale proceeds-real estate 147,542 Sale proceeds-investments 55,188 Cash expended on construction in progress (182,182) ----------- --------- NET CASH (USED) BY INVESTING ACTIVITIES (191,341) (51,573) ----------- --------- CASH FLOWS FROM FINANCING ACTIVITIES: Cash borrowed-line of credit 144,000 Cash borrowed-building addition 225,000 Reduction of long-term debt (49,538) (70,928) Dividends paid (1,050,000) (900,000) Cash expended-loan fees (1,750) ----------- --------- NET CASH (USED) BY FINANCING ACTIVITIES (732,288) (970,928) ----------- ---------- NET INCREASE IN CASH 834,927 173,358 CASH AT BEGINNING OF PERIOD 1,046,049 596,409 ---------- --------- CASH AT END OF PERIOD $1,880,976 $ 769,767 ========== =========
See Accountant's Report. 4 NU-METRICS, INC. STATEMENT OF CASH FLOWS FOR THE NINE MONTHS ENDED SEPTEMBER 30,
1998 1997 ---- ---- SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION: Cash paid during the period for: Interest $ 45,415 $50,977 ======== ======= NON-CASH FINANCING AND INVESTING ACTIVITIES: 1) Reinvested dividend $ 2,437 ======== 2) Obsolete assets abandoned Cost $668,287 Accumulated depreciation 659,498 -------- Loss on abandonment $ 8,789 ========
DISCLOSURE OF ACCOUNTING POLICY: For purposes of the statement of cash flows, the Company considers all highly liquid debt instruments purchased with an initial maturity of three months or less to be cash equivalents. See Accountant's Report. 5 (b) PRO FORMA FINANCIAL INFORMATION The following unaudited pro forma combined condensed statements of operations for the year ended June 30, 1998 and for the three months ended September 30, 1998 and the unaudited pro forma combined condensed balance sheet as of September 30, 1998, gives effect to the purchase of Nu-Metrics, Inc. On December 9, 1998, Quixote Corporation ("Quixote") purchased all of the outstanding stock of Nu-Metrics, Inc. ("Nu-Metrics") from its six shareholders. Nu-Metrics is based in Uniontown, Pennsylvania, and is engaged in the business of developing and manufacturing electronic measuring instruments for the highway transportation industry. Nu-Metrics' traffic sensing and distance measuring devices are sold worldwide. The purchase price of $14,900,000 (less adjustments of $1,020,000 based on tax holdbacks and changes in the net assets of Nu-Metrics from June 30, 1998, to September 30, 1998) was paid in cash. A final determination of the purchase price based on the value of the net assets as of November 30, 1998, will be made in February 1999. In January 1999, Quixote paid $100,000 to the principal shareholder of Nu-Metrics in connection with his covenants to refrain from competition. When acquired, Nu-Metrics had long-term debt of approximately $981,000, of which the Registrant repaid approximately $465,000. Quixote borrowed funds on its line of credit to make this acquisition. Quixote intends to continue the Nu-Metrics business operations in Uniontown, Pennsylvania. The Registrant has transferred all of the Nu-Metrics stock to its wholly-owned subsidiary, TranSafe Corporation. The pro forma information is based upon the historical financial statements of the Company giving effect to the acquisition described above and adjustments described in the accompanying notes to these unaudited pro forma financial statements. The unaudited pro forma combined condensed financial statements have been prepared by the management of the Company based upon the assumptions outlined in the accompanying notes and may not be indicative of the results that actually would have occurred if the acquisition had occurred on the particular date noted on each pro forma combined condensed financial statement. The pro forma financial statements should be read in conjunction with the related notes contained herein. QUIXOTE CORPORATION AND SUBSIDIARIES UNAUDITED PRO FORMA COMBINED CONDENSED STATEMENT OF OPERATIONS FOR THE YEAR ENDED JUNE 30, 1998 (Dollar amounts in thousands, except per share data)
Pro Forma Pro Forma Historical Nu-Metrics Adjustments Combined ========== ========== =========== =========== Net sales................... $ 55,988 $ 6,984 $ 62,972 Cost of sales............... 30,445 2,368 32,813 ------------ --------- ----------- ---------- Gross profit................ 25,543 4,616 30,159 Operating expenses: Selling & administrative.. 15,420 1,921 $ 492 (1) 17,833 Research & development.... 1,570 347 1,917 ------------ --------- ----------- ---------- 16,990 2,268 492 19,750 Operating profit............ 8,553 2,348 (492) 10,409 Other income (expense): Interest income........... 540 26 (11)(2) 555 Interest expense.......... (357) (69) (938)(3) (1,364) Other..................... 16 35 (7)(2,4) 44 ------------ --------- ----------- ---------- 199 (8) (956) (765) ------------ --------- ----------- ---------- Earnings from continuing operations before income taxes..................... 8,752 2,340 (1,448) 9,644 Provisions for income taxes. 2,605 936(5) (579)(5) 2,962 ------------ --------- ----------- ---------- Earnings from continuing operations................ $ 6,147 $ 1,404 $ (869) $ 6,682 =========== ======== =========== ========== Basic earnings per share: Earnings from continuing operations.............. $ .77 $ .84 =========== ========== Weighted average common shares outstanding...... 7,943,653 7,943,653 =========== ========== Diluted earnings per share: Earnings from continuing operations.............. $ .76 $ .83 =========== ========== Weighted average common shares outstanding...... 8,088,354 8,088,354 =========== ==========
See Notes to Combined Condensed Financial Statements. QUIXOTE CORPORATION AND SUBSIDIARIES UNAUDITED PRO FORMA COMBINED CONDENSED STATEMENT OF OPERATIONS FOR THE YEAR ENDED JUNE 30, 1998 EXPLANATION OF PRO FORMA ADJUSTMENTS: (1) To reduce depreciation expense of $7,000 for assets excluded from the purchase; to reduce amortization expense of $8,000 for deferred costs relating to debt retired; to amortize goodwill of $631,000 related to the purchase (over a twenty year life); to eliminate aircraft flight department expenses of $154,000 relating to assets excluded from the purchase; to increase travel expenses of $30,000 for commercial airline costs to replace flight department. (2) To eliminate dividend and interest income related to marketable securities that were excluded from the purchase. (3) To record interest expense related to funds borrowed for the purchase net of interest eliminated on the aircraft related debt. (4) To eliminate the loss on investment related to marketable securities that were excluded from the purchase. (5) To provide an incremental income tax of 40%. QUIXOTE CORPORATION UNAUDITED PRO FORMA COMBINED CONDENSED STATEMENT OF OPERATIONS FOR THE THREE MONTHS ENDED SEPTEMBER 30, 1998 (Dollar amounts in thousands, except per share data)
Pro Forma Pro Forma Historical Nu-Metrics Adjustments Combined ---------- ---------- ----------- ---------- Net sales..................... $ 16,063 $ 1,499 $ 17,562 Cost of sales................. 8,827 571 9,398 ----------- ----------- ------------ ----------- Gross profit.................. 7,236 928 8,164 Operating expenses: Selling & administrative.... 4,288 494 $ 104 (1) 4,886 Research & development...... 293 101 394 ----------- ----------- ------------ ----------- 4,581 595 104 5,280 Operating profit.............. 2,655 333 (104) 2,884 Other income (expense): Interest income............. 39 13 (1)(2) 51 Interest expense............ (168) (22) (237)(3) (427) Other....................... (22) 13 (2,4) (9) ----------- ----------- ------------ ----------- (129) (31) (225) (385) ----------- ----------- ------------ ----------- Earnings from continuing operations before income taxes....................... 2,526 302 (329) 2,499 Provisions for income taxes... 884 121(5) (132)(5) 873 ----------- ----------- ------------ ----------- Earnings from continuing operations.................. $ 1,642 $ 181 $ (197) $ 1,626 ========== ========== =========== ========== Basic earnings per share: Earnings from continuing operations................ $ .21 $ .21 ========== ========== Weighted average common shares outstanding........ 7,920,690 7,920,690 ========== ========== Diluted earnings per share: Earnings from continuing operations................ $ .20 $ .20 ========== ========== Weighted average common shares outstanding........ 8,217,267 8,217,267 ========== ==========
See Notes to Combined Condensed Financial Statements. QUIXOTE CORPORATION UNAUDITED PRO FORMA COMBINED CONDENSED STATEMENT OF OPERATIONS FOR THE THREE MONTHS ENDED SEPTEMBER 30, 1998 EXPLANATION OF PRO FORMA ADJUSTMENTS: (1) To reduce depreciation expense of $1,000 for assets excluded from the purchase; to reduce amortization expense of $2,000 for deferred costs relating to debt retired; to amortize goodwill of $158,000 related to the purchase (over a twenty year life); to eliminate aircraft flight department expenses of $59,000 relating to assets excluded from the purchase; to increase travel expenses of $8,000 for commercial airline costs to replace flight department. (2) To eliminate dividend and interest income related to marketable securities that were excluded from the purchase. (3) To record interest expense related to funds borrowed for the purchase net of interest eliminated on the aircraft related debt. (4) To eliminate the loss on investment related to marketable securities that were excluded from the purchase. (5) To provide an incremental income tax of 40%. QUIXOTE CORPORATION AND SUBSIDIARIES UNAUDITED PRO FORMA COMBINED CONDENSED BALANCE SHEET AS OF SEPTEMBER 30, 1998 (Dollar amounts in thousands)
Pro Forma Pro Forma Historical Nu-Metrics Adjustments Combined ========== ========== ========= ========= Current assets: Cash and cash equivalents...........$ 1,555 $ 1,881 $ (1,881)(2) $ 1,555 Accounts receivable, net............ 11,652 742 12,394 Inventories......................... 6,804 889 7,693 Deferred income tax assets.......... 1,642 285 (3) 1,927 Other current assets................ 884 135 (129)(2) 890 -------- ----------- ---------- ---------- Total current assets.................. 22,537 3,647 (1,725) 24,459 -------- ----------- ---------- ---------- Property, plant and equipment, net.... 13,273 1,812 15,085 Intangible assets..................... 12,334 12,355 (4) 24,689 Other assets.......................... 893 16 (11)(1) 898 Assets of discontinued operations..... 5,657 5,657 -------- ----------- ---------- ---------- $ 54,694 $ 5,475 $ 10,619 $ 70,788 ======== ========== ========= ========= Current liabilities: Current portion of long-term debt.. $ 497 $ 310 $ 807 Accounts payable................... 1,459 91 1,550 Accrued expenses................... 3,119 15 $ 714(3) 3,848 Income taxes payable............... 167 167 -------- ----------- ---------- ---------- Total current liabilities............ 5,242 416 714 6,372 -------- ----------- ---------- ---------- Deferred income tax liabilities....... 795 795 Long-term debt, net of current portion............................. 7,557 1,084 13,880 (4) 22,521 Shareholders' equity: Common stock........................ 150 366 (366)(4) 150 Capital in excess of par value of stock.......................... 31,966 31,966 Retained earnings................... 16,966 3,609 (3,609)(4) 16,966 Treasury stock, at cost............. (7,982) (7,982) -------- ----------- ---------- ---------- Total shareholders' equity............ 41,100 3,975 (3,975) 41,100 -------- ----------- ---------- ---------- $ 54,694 $ 5,475 $ 10,619 $ 70,788 ======== ========== ========= =========
See Notes to Combined Condensed Financial Statements. QUIXOTE CORPORATION AND SUBSIDIARIES UNAUDITED PRO FORMA COMBINED CONDENSED BALANCE SHEET AS OF SEPTEMBER 30, 1998 EXPLANATION OF PRO FORMA ADJUSTMENTS: (1) To eliminate $5,000 related to prior goodwill and $6,000 related to deferred loan fees for which the debt has been paid off. (2) To eliminate cash of $1,881,000 and investments of $129,000 which are not included in the purchase. (3) To record purchase accounting accruals for $714,000, consisting principally of due diligence fees, accounting and legal fees, a non-compete fee and related deferred taxes of $285,000. (4) To record the purchase of net assets, creation of goodwill, borrowing of long-term debt and elimination of Nu-Metrics, Inc. common stock and retained earnings. SIGNATURE Pursuant to the requirements of the Securities and Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized. QUIXOTE CORPORATION ------------------- Date: February 8, 1999 /s/ Daniel P. Gorey - ----------------------- --------------------- By: Daniel P. Gorey Its: Vice President, Chief Financial Officer and Treasurer EX-23 2 EXHIBIT 23 Exhibit 23 Consent of Independent Auditors We consent to the use of our report dated March 25, 1998 with respect to the financial statements of Nu-Metrics, Inc. for the year ended December 31, 1997 included in the current report of Form 8-K/A dated February 8, 1999 of Quixote Corporation filed with the Securities and Exchange Commission. /s/ Smith, Lewis, Chess and Company February 8, 1999 -----END PRIVACY-ENHANCED MESSAGE-----