-----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, S4YjsmUB8EwVSsoIlK4DWus8QyCaz8/GSWtBD4xhpljbFFNB/nTrb3w3LS4wB4kJ yLiJnhxG2kDo62s1rm+Ovw== 0000355199-97-000009.txt : 19971124 0000355199-97-000009.hdr.sgml : 19971124 ACCESSION NUMBER: 0000355199-97-000009 CONFORMED SUBMISSION TYPE: 8-K/A PUBLIC DOCUMENT COUNT: 1 CONFORMED PERIOD OF REPORT: 19971121 ITEM INFORMATION: FILED AS OF DATE: 19971121 SROS: NONE FILER: COMPANY DATA: COMPANY CONFORMED NAME: ESSEX CORPORATION CENTRAL INDEX KEY: 0000355199 STANDARD INDUSTRIAL CLASSIFICATION: SERVICES-ENGINEERING SERVICES [8711] IRS NUMBER: 540846569 STATE OF INCORPORATION: VA FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 8-K/A SEC ACT: SEC FILE NUMBER: 000-10772 FILM NUMBER: 97726269 BUSINESS ADDRESS: STREET 1: 9150 GILFORD RD CITY: COLUMBIA STATE: MD ZIP: 21046-1891 BUSINESS PHONE: 3019537797 MAIL ADDRESS: STREET 1: 9150 GUILFORD ROAD CITY: COLUMBIA STATE: MD ZIP: 21046-1891 8-K/A 1 FORM 8-K/AMENDMENT NO. 1 - 11/21/97 SECURITIES AND EXCHANGE COMMISSION WASHINGTON, DC 20549 FORM 8-K/A NO. 1 CURRENT REPORT Pursuant to Section 13 or 15 (d) of the Securities Exchange Act of 1934 Date of Report: November 21, 1997 ESSEX CORPORATION (Exact name of Registrant as specified in its charter) Virginia Commission File No. 0-10772 54-0846569 (State or other jurisdiction of (IRS Employer ID No.) incorporation or organization) 9150 Guilford Road Columbia, Maryland 21046-1891 (Address of principal executive office) (Zip Code) Registrant's telephone number, including area code: (301) 939-7000 ESSEX CORPORATION Item 2. Acquisition or Disposition of Assets - On October 16, 1997, Essex Corporation (the "Company") sold certain of the assets of its Systems Effectiveness Division ("SED") to Star Mountain, Inc., a privately-held corporation. The price was $1,475,000, subject to adjustment as described below. The Company sold the accounts receivable, contracts, fixed assets and certain other assets. The acquiring company assumed certain liabilities, such as accounts payable, accrued vacation and certain operating and capital lease obligations. The effective date of the transaction was October 1, 1997. The Company received $525,000 in cash at closing and took a promissory for $325,000 payable in equal monthly installments over 15 months ending January 1999. The balance of $625,000 is held in escrow and is expected to be paid through January 1998 as the respective contracts of SED are novated to the acquiror. Each contract novation requires the approval of the other party in the contract, principally agencies of the U.S. Government. The sale price is subject to adjustment for any change in the net assets and to certain indemnifications and warranties by the Company which could effect the ultimate amount of proceeds received. Item 7. Financial Statements and Exhibits (b) Pro Forma Financial Information The following unaudited pro forma statements are filed with this report: Unaudited Pro Forma Balance Sheet as of September 28, 1997.......F-1 Unaudited Pro Forma Statements of Operations: For the year ended December 29, 1996........................F-2 For the thirty-nine weeks ended September 28, 1997..........F-3 Notes and Adjustments to Unaudited Pro Forma Financial Information....................................................F-4 The unaudited pro forma balance sheet of the Registrant as of September 28, 1997 reflects the financial position of the Registrant after giving effect to the disposition of the assets and assumption of the liabilities discussed in Item 2 and assumes the disposition took place on September 28, 1997. The Unaudited Pro Forma Statements of Operations for the year ended December 29, 1996 and for the thirty-nine week period ended September 28, 1997 assume that the disposition occurred on December 29, 1996, and are based on the operations of the Registrant for the year ended December 29, 1996 and the thirty-nine weeks ended September 28, 1997. Transaction costs include expenses associated with the transaction. The unaudited pro forma financial statements have been prepared by the Registrant based upon assumptions deemed proper by it. The unaudited pro forma financial statements presented herein are shown for illustrative purposes only and are not 2 ESSEX CORPORATION necessarily indicative of the future financial position or future results of operations of the Registrant, or of the financial position or results of operations of the Registrant that would have actually occurred had the transaction been in effect as of the date and for the periods presented. The unaudited pro forma financial statements should be read in conjunction with the historical financial statements and related notes of the Registrant. (c) Exhibits 2.2 Asset Purchase Agreement dated October 16, 1997 between Essex Corporation and Star Mountain, Inc. 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. ESSEX CORPORATION (Registrant) \Joseph R. Kurry, Jr.\ DATE: November 21, 1997 Joseph R. Kurry, Jr. Vice President, Treasurer and Chief Financial Officer 3 ESSEX CORPORATION F-1 PRO FORMA FINANCIAL INFORMATION PAGE 1 OF 2 PRO FORMA BALANCE SHEET AS OF SEPTEMBER 28, 1997
PRO FORMA ADJUSTMENTS ----------------------------------------- Subsequent September 28, SED - Division Payouts/ 1997 Divestiture Adjustments Pro Forma ------------- -------------- ----------- ---------- ASSETS (unaudited) (A) (B) CURRENT ASSETS Cash $ 495,728 $ 575,000 $ (750,000) (1) $ 12,175 (60,533) (2) (170,000) (3) (18,020) (4) (60,000) (5) Accounts receivable, net 480,992 480,992 Inventory 823,813 823,813 Prepayments and other 13,831 13,831 Net current assets of discontinued operations 313,531 (313,531) -- Note receivable 325,000 325,000 Escrow receivable 375,000 375,000 ------------- -------------- ----------- ---------- 2,127,895 961,469 (1,058,553) 2,030,811 ------------- -------------- ----------- ---------- PROPERTY AND EQUIPMENT Production and special equipment 1,005,031 1,005,031 Furniture, equipment and other 719,968 719,968 ------------- -------------- ----------- ---------- 1,724,999 1,724,999 Accumulated depreciation and amortization (1,412,613) (1,412,613) ------------- -------------- ----------- ---------- 312,386 312,386 ------------- -------------- ----------- ---------- OTHER ASSETS Net noncurrent assets of discontinued operations 1,126,547 (69,291) 1,057,256 Patents, net 180,355 180,355 Goodwill, net 99,626 99,626 Deferred debenture financing 85,301 (10,236) (6) 75,065 Other 34,482 34,482 ------------- -------------- ----------- ---------- 1,526,311 (69,291) (10,236) 1,446,784 ------------- -------------- ----------- ---------- TOTAL ASSETS $ 3,966,592 $ 892,178 $(1,068,789) $3,789,981 - ------------ ============= ============== =========== ========== The accompanying notes are an integral part of these statements.
ESSEX CORPORATION F-1 PRO FORMA FINANCIAL INFORMATION PAGE 2 OF 2 PRO FORMA BALANCE SHEET AS OF SEPTEMBER 28, 1997
PRO FORMA ADJUSTMENTS -------------------------------- Subsequent September 28, SED - Division Payouts/ 1997 Divestiture Adjustments Pro Forma ------------- -------------- ------------ --------- LIABILITIES AND STOCKHOLDERS' (unaudited) (A) (B) EQUITY (DEFICIT) CURRENT LIABILITIES Current portion of capital leases $ 66,550 $ 66,550 Bank line of credit 750,000 (750,000) (1) -- 8% Convertible notes payable 245,000 245,000 Accounts payable 299,112 299,112 Accrued wages and vacation 191,917 191,917 Accrued lease settlement 299,551 (18,020) (4) 281,531 Refundable deposit on sale of discontinued operations 200,000 (139,467) (60,533) (2) -- Other accrued expenses 546,199 79,026 625,225 ------------- -------------- ------------ ----------- 2,598,329 (60,441) (828,553) 1,709,335 LONG-TERM DEBT 10% Collateralized Convertible Debentures Due 2000 1,400,000 (170,000) (3) 1,230,000 Capital leases, net of current portion 31,594 31,594 REDEEMABLE PREFERRED STOCK - SERIES A 120,000 120,000 - ------------------------------------- ------------- -------------- ------------ ---------- Total Liabilities 4,149,923 (60,441) (998,553) 3,090,929 ------------- -------------- ------------ ---------- COMMITMENTS AND CONTINGENCIES STOCKHOLDERS' EQUITY (DEFICIT) Common stock, $0.10 par value; 25 million shares authorized; 3,626,098 shares issued and outstanding for 1997 362,610 362,610 Contributions in excess of par value 5,316,308 5,316,308 Retained deficit (5,862,249) 952,619 (60,000) (5) (10,236) (6) (4,979,866) ------------- -------------- ------------ ---------- (183,331) 952,619 (70,236) 699,052 ------------- -------------- ------------ ---------- TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY (DEFICIT) $ 3,966,592 $ 892,178 $ (1,068,789) $3,789,981 - ---------------- ============= ============== ============ ========== The accompanying notes are an integral part of these statements.
ESSEX CORPORATION F-2 PRO FORMA FINANCIAL INFORMATION PAGE 1 OF 1 STATEMENT OF OPERATIONS FOR THE THIRTY-NINE WEEK PERIOD ENDED SEPTEMBER 28, 1997
PRO FORMA ADJUSTMENTS ----------------------------------- Systems Effectiveness Other Historical Division Divestitures PRO FORMA -------------- --------------- -------------- ------------- (unaudited) Revenues $ 9,112,290 $ 4,200,886 $ 1,912,756 $ 2,998,648 Cost of goods sold and services provided (6,033,763) (2,696,542) (1,862,638) (1,474,583) Engineering and product development expenses (471,990) -- -- (471,990) Selling, general and administrative expenses (3,328,995) (1,119,625) (269,112) (1,940,258) -------------- --------------- -------------- ------------- Operating Income (Loss) (722,458) 384,719 (218,994) (888,183) Interest expense (192,462) -- -- (192,462) -------------- --------------- --------------- ------------- Loss from Operations Before Income Taxes (914,920) 384,719 (218,994) (1,080,645) Provision for income taxes -- -- -- -- -------------- --------------- ---------------- ------------- Net Income (Loss) $ (914,920) $ 384,719 $ (218,994) $ (1,080,645) ============== =============== ================ ============= Weighted Average Number of Shares Outstanding 3,626,036 3,626,036 3,626,036 3,626,036 ============== =============== ================ ============= Primary Earnings (Loss) Per Share $ (0.25) $ 0.11 $ (0.06) $ (0.30) ============== =============== ================ ============= The accompanying notes are an integral part of these statements.
ESSEX CORPORATION F-3 PRO FORMA FINANCIAL INFORMATION PAGE 1 OF 1 STATEMENT OF OPERATIONS FOR THE FISCAL YEAR ENDED DECEMBER 29, 1996
PRO FORMA ADJUSTMENTS ------------------------------------- Systems Effectiveness Other Historical Division Divestitures Pro Forma -------------- ---------------- ---------------- --------------- (unaudited) Revenues $ 12,939,341 $ 5,161,964 $ 4,085,658 $ 3,691,719 Cost of goods sold and services provided (10,324,258) (3,586,827) (3,553,148) (3,184,283) Engineering and product development expenses (743,662) -- -- (743,662) Selling, general and administrative expenses (5,052,664) (998,562) (1,351,763) (2,702,339) -------------- ---------------- ---------------- --------------- Operating Income (Loss) (3,181,243) 576,575 (819,253) (2,938,565) Gain on settlement of lawsuit, net of related expenses of $1,759,450 2,240,550 -- -- 2,240,550 Lease settlement (250,000) -- -- (250,000) Interest expense (142,991) -- -- (142,991) -------------- ---------------- ---------------- --------------- Income (Loss) from Operations Before Income Taxes (1,333,684) 576,575 (819,253) (1,091,006) Provision for income taxes -- -- -- -- -------------- ---------------- ---------------- --------------- Net Income (Loss) $ (1,333,684) $ 576,575 $ (819,253) $ (1,091,006) ============== ================ ================ =============== Weighted Average Number of Shares Outstanding 3,616,519 3,616,519 3,616,519 3,616,519 ============== ================ ================ =============== Primary Earnings (Loss) Per Share $ (0.37) $ 0.16 $ (0.23) $ (0.30) ============== ================ ================ =============== The accompanying notes are an integral part of these statements.
NOTES AND ADJUSTMENTS TO F-4 UNAUDITED PRO FORMA FINANCIAL INFORMATION PAGE 1 OF 1 NOTES A. The line item entries in this column record the divestiture of Systems Effectiveness Division ("SED"). B. The line item entries in this column represent payouts or adjustments as a result of the divestiture. C. No recognition has been given to the gain on the disposition of the Systems Effectiveness Division. ADJUSTMENTS (1) Repayment of bank line of credit. (2) Refund of difference between estimated and actual net asset value of SED. (3) Payment to debenture holders due upon sale of underlying collateral represented by certain assets of divested operations. (4) Payment to former landlord due upon realization of proceeds of certain asset sales resulting from divestiture. (5) Estimate of payment of legal and other expenses incurred by Seller in connection with divestitures. (6) Accelerated amortization of deferred debenture financing due to required early repayment of portion of debentures. -----END PRIVACY-ENHANCED MESSAGE-----