8-K/A 1 SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 Form 8-K/A1 Current Report Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934 Date of Report (Date of earliest event reported) November 28, 1994 ----------------- Franklin Electric Co., Inc. --------------------------- (Exact name of registrant as specified in its charter) Indiana 0-362 35-0827455 ------------------------------------------------------------ (State or other (Commission File Number) (IRS Employer jurisdiction Identification of incorporation) Number) 400 East Spring Street, Bluffton, Indiana 46714 ------------------------------------------------------------ (Address of principal executive offices) (Zip Code) Registrant's telephone number, including area code (219)824-2900 ------------- The undersigned registrant hereby amends the following items of its current report on Form 8-K/A dated January 27, 1995, as set forth on the pages attached hereto: Item 7. Financial Statements and Exhibits 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. Franklin Electric Co., Inc. --------------------------- (Registrant) Date March 27, 1995 By Michael J. Sloan -------------- ---------------- Vice President and Chief Financial Officer FRANKLIN ELECTRIC CO., INC. FORM 8-K/A1 INDEX A. Other Information 1. Documents incorporated by reference 2. Independent Auditors' Consent B. Financial Statements of Business Acquired (Oil Dynamics, Inc.) 1. Condensed Consolidated Balance Sheet, July 31, 1994 (Unaudited) 2. Condensed Consolidated Statement of Income, Nine Months Ended July 31, 1994 (Unaudited) 3. Condensed Consolidated Statement of Cash Flows, Nine Months Ended July 31, 1994 (Unaudited) 4. Condensed Consolidated Statement of Shareowners' Equity, Nine Months Ended July 31, 1994 (Unaudited) 5. Notes to Condensed Consolidated Financial Statements C. Proforma Financial Information 1. Basis of Presentation 2. Proforma Consolidated Balance Sheet, October 1, 1994 and Notes to Proforma Adjustments 3. Proforma Consolidated Statement of Income, Year Ended January 1, 1994 and Notes to Proforma Adjustments 4. Proforma Consolidated Statement of Income, Nine Months Ended October 1, 1994 and Notes to Proforma Adjustments DOCUMENTS INCORPORATED BY REFERENCE Item ---- 1. Oil Dynamics, Inc.'s financial statements for the year ended October 30, 1993 and Independent Auditors' Report thereon included in the 1993 Annual Report of Franklin Electric Co., Inc. on Form 10-K. INDEPENDENT AUDITORS' CONSENT We consent to the incorporation by reference in this Current Report of Franklin Electric Co., Inc. on Form 8-K of Deloitte & Touche's report dated December 14, 1993 on the financial statements of Oil Dynamics, Inc. for the year ended October 30, 1993, appearing in the Annual Report on Form 10-K of Franklin Electric Co., Inc. for the year ended January 1, 1994. We also consent to the incorporation by reference in the registration statements of Franklin Electric Co., Inc. on Form S-8 file No. 33-35958, 33-35960, 33-35962 and 33-38200 of Deloitte & Touche's report dated December 14, 1993 on the financial statements of Oil Dynamics, Inc. for the year ended October 30, 1993 appearing in the Annual Report on Form 10-K of Franklin Electric Co., Inc. for the year ended January 1, 1994. Deloitte & Touche LLP Deloitte & Touche LLP Tulsa, Oklahoma March 27, 1995 OIL DYNAMICS, INC. CONDENSED CONSOLIDATED BALANCE SHEET (Unaudited)
July 31, 1994 ------------- ASSETS (In thousands) Current assets: Cash and equivalents $473 Receivables, less allowance of $176 6,529 Inventories (Note 2) 14,029 Other current assets 804 ------ Total current assets 21,835 Property, plant and equipment, net (Note 3) 12,900 ------ Total assets $34,735 ====== LIABILITIES AND SHAREOWNERS' EQUITY Current liabilities: Current maturities of long-term debt and short-term borrowings $4,500 Accounts payable 1,831 Accrued expenses 2,269 ------ Total current liabilities 8,600 Deferred income taxes 1,497 Minority interest 128 Shareowners' equity: Common stock (Note 5): Class A, $10 par value, 50,000 shares authorized, issued and outstanding 500 Class B, $12 par value, nonvoting, 3,627 shares authorized, 3,225 issued and outstanding 39 Additional paid-in capital 1,053 Retained earnings 25,129 Treasury stock, 3,061 shares of Class B treasury stock at cost (2,211) ------ Total shareowners' equity 24,510 ------ Total liabilities and shareowners' equity $34,735 ====== See Notes to Condensed Consolidated Financial Statements
OIL DYNAMICS, INC. CONDENSED CONSOLIDATED INCOME STATEMENT (Unaudited) (In thousands, except per share amounts)
Nine Months Ended July 31, 1994 ------------- Net sales $32,001 Costs and expenses: Cost of sales 23,923 Selling and administrative expenses 6,450 Interest expense 90 Other expense, net 90 ------ Income before income taxes, and minority interest 1,448 Income taxes 256 ------ Income before minority interest 1,192 Minority interest (128) ------ Net income available to common and common share equivalents $1,064 ====== Weighted average common and common share equivalents outstanding during the period 50,023 ====== Net income per share $21.27 ====== See Notes to Condensed Consolidated Financial Statements
OIL DYNAMICS, INC. CONSOLIDATED STATEMENT OF CASH FLOWS (Unaudited) (In thousands)
Nine Months Ended July 31, 1994 ------------- Cash flows from operating activities: Net income $1,064 Adjustments to reconcile net income to net cash flows from operating activities: Depreciation 1,340 Minority interest 128 Changes in operating assets and lliabilities: Receivables 4,293 Other current assets (243) Inventories (2,300) Accounts payable (2,001) Income taxes (443) Accrued expenses (7,900) ------ Net cash flows from operating activities (6,062) ------ Cash flows from investing activities: Additions to property, plant and equipment (1,443) Proceeds on sale of property, plant and equipment 11 ------ Net cash flows from investing activities (1,432) ------ Cash flows from financing activities: Proceeds from notes payable 4,500 ------ Net cash flows from financing activities 4,500 ------ Net decrease in cash and equivalents (2,994) Cash and equivalents at beginning of period 3,467 ------ Cash and equivalents at end of period $473 ==== See Notes to Condensed Consolidated Financial Statements
OIL DYNAMICS, INC. CONDENSED CONSOLIDATED STATEMENT OF SHAREOWNERS' EQUITY (Unaudited) (In thousands)
Additional Common Stock Paid-in Retained Treasury Class A Class B Capital Earnings Stock Total ------- ------- ------- -------- ----- ----- Balance as of October 30, 1993 $500 $39 $1,053 $24,065 ($2,211) $23,446 ---- --- ------ ------- ------ ------- Income attributable to common shares for the nine months ended July 31, 1994 - - - 1,064 - 1,064 ---- --- ------ ------- ------- ------- Balance as of July 31, 1994 $500 $39 $1,053 $25,129 ($2,211) $24,510 ==== === ====== ======= ======= ======= See Notes to Condensed Consolidated Financial Statements
Oil Dynamics, Inc. Notes to Condensed Consolidated Financial Statements Nine Months Ended July 31, 1994 Note 1: Basis of Presentation ------------------------------ The accompanying unaudited condensed consolidated financial statements have been prepared in accordance with generally accepted accounting principles for interim financial information. Accordingly, they do not include all of the information and footnotes required by generally accepted accounting principles for complete financial statements. In the opinion of management, all adjustments (which are of a normal and recurring nature) considered necessary for a fair presentation have been included. Operating results for the nine month period ended July 31, 1994 are not necessarily indicative of the results that may be expected for the fiscal year ended October 31, 1994. For further information, refer to the Oil Dynamics, Inc. consolidated financial statements for the year ended October 30, 1993, included in the Franklin Electric Co., Inc. 1993 Annual Report on Form 10-K filed with the Securities and Exchange Commission on March 24, 1994. Note 2: Inventories -------------------- Inventories consist of the following: (In thousands)
July 31, 1994 -------------- Raw Materials $9,483 Work In Process 545 Finished Goods 5,286 LIFO Reserve (1,285) ------ Total Inventory $14,029 =======
Note 3: Property, Plant and Equipment -------------------------------------- Property, Plant and Equipment, net, consists of the following: (In thousands)
July 31,1994 ------------ Land and Buildings $7,772 Machinery and Equipment 19,242 ------ 27,014 Allowance for Depreciation (14,114) ------ $12,900 =======
Note 4: Tax Rates ------------------- The effective tax rate on income before income taxes varies from the United States statutory rate of 35 percent principally due to lower foreign tax rates relative to the U.S. statutory rate. Note 5: Subsequent Events -------------------------- On November 28, 1994, control of Oil Dynamics, Inc. was transferred to Franklin Electric Co., Inc. The change in control resulted from the election by Goulds Pumps, Inc. to receive a cash dividend in the amount of $11.7 million in lieu of a stock dividend declared by Oil Dynamics, Inc. Franklin Electric Co., Inc. elected to take the stock dividend which increased its ownership interest in Oil Dynamics, Inc. to approximately 97 percent. Formerly, Oil Dynamics, Inc. was controlled equally by Franklin Electric Co., Inc. and Goulds Pumps, Inc. In connection with the issuance of the additional shares, the Company changed the par value of the Class A Common Stock from $10 per share to $.10 per share. The Company obtained a new $5.4 million unsecured line of credit and a $9.8 million term loan with a bank. Using the proceeds, the existing line of credit was repaid and the remainder was used to pay a cash dividend to Goulds Pumps, Inc. The new line of credit will mature November 27, 1995 and requires interest payable monthly based on the LIBOR plus 1.5 percent. A commitment fee of 0.25 percent will be payable quarterly on the unused portion of the commitment. The term loan is due November 27, 1995 and requires monthly interest payments based on the LIBOR plus 0.75 percent. FRANKLIN ELECTRIC CO., INC. PROFORMA CONSOLIDATED FINANCIAL STATEMENTS The proforma statements of consolidated income for the period ended October 31, 1994 and for the year ended January 1, 1994 give effect to the transfer of control of Oil Dynamics, Inc. to Franklin Electric Co., Inc. as if such transaction had occurred at January 3, 1993. The proforma balance sheet as of October 1, 1994 gives effect to the transfer of control of Oil Dynamics, Inc. to Franklin Electric Co., Inc. as if such transaction had occurred on October 1, 1994. The transaction was accounted for as a purchase in accordance with the provisions of Accounting Principles Board Opinion No. 16. The historical consolidated financial statements included in the proforma consolidated financial statements are as of the date and for the periods presented. The historical financial data of Oil Dynamics, Inc. included in the proforma statement of consolidated income for the year ended January 1, 1994 was derived from the financial statements for the year ended October 30, 1993. The historical financial data of Oil Dynamics, Inc. as of and for the nine month period ended October 1, 1994 was derived from unaudited financial statements as of and for the nine months ended July 31, 1994. The proforma statements of consolidated income for the year ended January 1, 1994 and the nine month period ended October 1, 1994 and the proforma consolidated balance sheet as of October 1, 1994 are not necessarily indicative of the results of operations or financial position that actually would have been achieved had the transaction described herein been consummated as of the dates indicated, or that may be achieved in the future. FRANKLIN ELECTRIC CO., INC. PROFORMA CONSOLIDATED BALANCE SHEET OCTOBER 1, 1994 (Unaudited) (In thousands)
Historical Historical Franklin Oil Electric Dynamics, Proforma Co., Inc. Inc. Adjustments Proforma -------- -------- ----------- -------- ASSETS Current assets: Cash and equivalents $35,957 $473 $ - $36,430 Receivables, less allowances of $1,664 12,111 6,529 - 18,640 Inventories 26,463 14,029 - 40,492 Other current assets (including deferred income taxes of $7,029) 7,291 804 - 8,095 ------ ------ ------ ------- Total current assets 81,822 21,835 - 103,657 Property, plant and equipment 26,005 12,900 - 38,905 Investment in affiliate 12,174 - (12,174) - Other assets and deferred charges 3,766 - - 3,766 ------- ------ ------ ------- Total assets $123,767 $34,735 ($12,174) $146,328 ======== ======= ======= ======== LIABILITIES AND SHAREOWNERS' EQUITY Current liabilities: Current maturities of long-term debt and short-term borrowings $ - $4,500 $12,090 $16,590 Accounts payable 9,433 1,831 - 11,264 Accrued expenses 24,395 2,269 - 26,664 Income taxes 1,409 - - 1,409 ------ ------ ------ ------ Total current liabilities 35,237 8,600 12,090 55,927 Long-term debt 20,000 - - 20,000 Other long-term liabilities 6,821 - - 6,821 Deferred income taxes 1,774 1,497 - 3,271 Minority interest - 128 246 374 Shareowners' equity: Common stock Class A 620 500 (500) 620 Class B - 39 (39) - Additional capital 4,468 1,053 (1,053) 4,468 Retained earnings 59,478 25,129 (25,129) 59,478 Stock subscriptions (2,011) - - (2,011) Treasury stock - (2,211) 2,211 - Cumulative translation adjustment (20) - - (20) Loan to ESOP trust (2,600) - - (2,600) ------ ------ ------ ------ Total shareowners' equity 59,935 24,510 (24,510) 59,935 ------ ------ ------ ------- Total liabilities and shareowners' equity $123,767 $34,735 ($12,174) $146,328 ======== ======= ======= ======== See Notes to Condensed Consolidated Financial Statements and Notes to Proforma Adjustments FRANKLIN ELECTRIC CO., INC. PROFORMA CONSOLIDATED BALANCE SHEET OCTOBER 1, 1994 NOTES TO PROFORMA ADJUSTMENTS ------------------------------------------------------------ Proceeds of $16.6 million from short-term borrowings. Total borrowings of $16.6 million were required given existing borrowings and cash balances as of October 1, 1994. The borrowings are classified as short term as it is assumed that the borrowings will be repaid within one year. Repayment of $4.5 million of existing short-term borrowings. Payment of $12.1 million cash dividend to Goulds Pumps, Inc. using the net proceeds of short-term borrowings. A stock dividend was also paid to Franklin Electric Co., Inc. which had the effect of increasing its ownership of Oil Dynamics, Inc. common stock from 50 percent to 97 percent. Elimination of Franklin Electric Co., Inc.'s investment in Oil Dynamics, Inc.
FRANKLIN ELECTRIC CO., INC. PROFORMA CONSOLIDATED STATEMENT OF INCOME YEAR ENDED JANUARY 1, 1994 (In thousands)
Historical Historical Franklin Oil Electric Dynamics, Proforma Co., Inc. Inc. Adjustments Proforma -------- ------- ----------- -------- Net sales $206,406 $71,672 $ - $278,078 Costs and expenses: Cost of sales 153,275 46,264 - 199,539 Selling and administrative expenses 31,029 11,707 - 42,736 Interest expense 2,949 142 900 3,991 Other expense, net 612 560 - 1,172 ------- ------ ------ ------- 187,865 58,673 900 247,438 Equity in earnings of affiliate 4,351 - (4,351) - ------ ------ ------ ------ Income before income taxes, change in accounting principle and minority interest 22,892 12,999 (5,251) 30,640 Income taxes 6,789 4,229 625 11,643 ------ ------ ------ ------ Income before change in accounting principle and minority interest 16,103 8,770 (5,876) 18,997 Cumulative effect of change in accounting principle-SFAS No. 109, "Accounting for Income Taxes" 993 - - 993 ------ ------ ------ ------ Income before minority interest 17,096 8,770 (5,876) 19,990 Minority interest - - 263 263 ------ ------ ------ ------ Net income 17,096 8,770 (6,139) 19,727 Dividends on preferred stock 611 - - 611 ------ ------ ------ ------ Net income available to common and common share equivalents $16,485 $8,770 ($6,139) $19,116 ======= ====== ====== ======= Weighted average common and common share equivalents outstanding during the period 6,552 50 (50) 6,552 ===== == == ===== Net income per share before change in accounting principle $2.37 $175.31 $2.77 ===== ======= ===== Change in accounting principle $0.15 $ - $0.15 ===== ======= ===== Net income per share $2.52 $175.31 $2.92 ===== ======= ===== See Notes to Condensed Consolidated Financial Statements and Notes to Proforma Adjustments FRANKLIN ELECTRIC CO., INC. PROFORMA CONSOLIDATED STATEMENT OF INCOME YEAR ENDED JANUARY 1, 1994 NOTES TO PROFORMA ADJUSTMENTS ------------------------------------------------------------ Interest expense at 8 percent related to Oil Dynamics, Inc.'s borrowing of $11.4 million. Total borrowings of $11.4 million were required given existing borrowings and cash balances as of the beginning of the year ended January 1, 1994. Elimination of Franklin Electric, Co., Inc.'s equity in the earnings of Oil Dynamics, Inc. Tax effect of proforma adjustments number 1 and 2 and the effect of other items resulting from the inclusion of Oil Dynamics, Inc. in the consolidated income tax return of Franklin Electric Co., Inc. Recognition of the minority interest in Oil Dynamics, Inc.'s net income. Elimination of Oil Dynamics, Inc.'s weighted average common shares outstanding. Net income per share is computed on the basis of weighted average shares outstanding taking into account the effects of dilutive common stock equivalents. The difference between primary and fully diluted net income per share is not material.
FRANKLIN ELECTRIC CO., INC. PROFORMA CONSOLIDATED STATEMENT OF INCOME NINE-MONTH PERIOD ENDED OCTOBER 1, 1994 (In thousands)
Historical Historical Franklin Oil Electric Dynamics, Proforma Co., Inc. Inc. Adjustments Proforma -------- -------- -------- -------- Net sales $175,135 $32,001 $ - $207,136 Costs and expenses: Cost of sales 130,277 23,923 - 154,200 Selling and administrative expenses 23,951 6,450 - 30,401 Interest expense 1,545 - - 1,545 Other expense (income), net (1,582) 308 - (1,274) ------- ------ ------ ------- 154,191 30,681 - 184,872 Equity in earnings of affiliate 532 - (532) - ------- ------ ------ ------- Income before income taxes and minority interest 21,476 1,320 (532) 22,264 Income taxes 8,016 256 188 8,460 ------ ------ ------ ------- Income before minority interest 13,460 1,064 (720) 13,804 Minority interest - - 32 32 ------ ------ ------ ------- Net income 13,460 1,064 (752) 13,772 Dividends on preferred stock 153 - - 153 ------ ------ ------ ------ Net income available to common and common share equivalents $13,307 $1,064 ($752) $13,619 ======= ====== ====== ======= Weighted average common and common share equivalents outstanding during the period 6,523 50 (50) 6,523 ===== ====== ====== ====== Net income per share $2.04 $21.28 $2.09 ===== ====== ===== See Notes to Condensed Consolidated Financial Statements and Notes to Proforma Adjustments FRANKLIN ELECTRIC CO., INC. PROFORMA CONSOLIDATED STATEMENT OF INCOME NINE MONTH PERIOD ENDED OCTOBER 1, 1994 NOTES TO PROFORMA ADJUSTMENTS ------------------------------------------------------------ No interest expense has been reflected in the proforma consolidated statement of income as the note and line of credit was paid off as of January 1, 1994 (see Note 1 in Notes to Proforma Adjustments to the Proforma Consolidated Balance Sheet as of October 1, 1994). Elimination of Franklin Electric, Co., Inc.'s equity in the earnings of Oil Dynamics, Inc. Tax effect of proforma adjustment number 1 and the effects of other items resulting from the inclusion of Oil Dynamics, Inc. in the consolidated income tax return of Franklin Electric Co., Inc. Recognition of the minority interest in Oil Dynamics, Inc.'s net income. Elimination of Oil Dynamics, Inc.'s weighted average common shares outstanding. Net income per share is computed on the basis of weighted average shares outstanding taking into account the effects of dilutive common stock equivalents. The difference between primary and fully diluted net income per share is not material.