8-K/A 1 f030131_8ka7eci.txt SALE OF GODDARD VALVE ASSETS SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 Form 8-K/A (Amendment No. 1) Current Report Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934 Date of Report (Date of earliest event reported) January 31, 2003 Goddard Industries, Inc. . . . . . . . . . . . . . . . . . . . . . . . . . . . (Exact Name of Registrant as Specified in Its Charter) Massachusetts 0-2052 04-2268165 . . . . . . . . . . . . . . . . . . . . . . . . . . . (State or Other (Commission (I.R.S. Employer Jurisdiction File Number) Identification No.) of Incorporation) 705 Plantation Street, Worcester, Massachusetts 01605 . . . . . . . . . . . . . . . . . . . . . . . . . . . (Address of Principal Executive Offices) (Zip Code) (508) 852-2436 . . . . . . . . . . . . . . . . . . . . . . . . . . . Registrant's telephone number, including area code . . . . . . . . . . . . . . . . . . . . . . . . . . (Former Name or Former Address, If Changed Since Last Report) The undersigned Registrant hereby amends its Current Report on Form 8-K filed on February 3, 2003 as follows: Item 7. Financial Statements and Exhibits (a) Financial Statements. Unaudited Pro Forma Consolidating Balance Sheets as of September 28, 2002. Unaudited Pro Forma Consolidating Statements of Operations for periods ended September 28, 2002 and December 28, 2002. (b) Exhibits. Exhibit No. Description of Exhibit 1 Form of Asset Purchase Agreement, dated January 31, 2003 * * Previously filed by Registrant as part of the initial filing of this Current Report on form 8-K. - 2 - 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. GODDARD INDUSTRIES, INC. Date: April 7, 2003 By: /s/ Salvatore J. Vinciguerra Salvatore J. Vinciguerra, President - 3- Pro Forma Financial Information On January 31, 2003, Goddard Industries, Inc. (the "Registrant") sold substantially all of the assets of one of its subsidiaries, Goddard Valve Corporation ("Goddard Valve"), to Engineered Controls International, Inc. ("ECII"), a Delaware corporation pursuant to an Asset Purchase Agreement, dated as of January 31, 2003, among ECII, Goddard Valve and Registrant (the "Asset Purchase Agreement"). Of the total purchase price of approximately $3,900,000, $3,200,000 was paid in cash at the closing and approximately $500,000 was paid on April 1, 2003. Up to an additional $200,000 is payable upon collection of transferred accounts receivable. The assets disposed of by Registrant included Goddard Valve's machinery & equipment, office equipment, inventory, accounts receivable, intellectual property and proprietary information, including rights to the use of the names "Goddard" and "Goddard Valve Corporation." Registrant is restricted from competing with ECII in certain geographical areas for certain cryogenic valve types. In addition, Registrant must discontinue its use of the name "Goddard Industries, Inc." The purchase price was determined as the result of arms' length negotiations between unrelated parties. In conjunction with the sale, Registrant has been providing certain short term transitional services to ECII. The Goddard Valve business that was sold by Registrant to ECII designs, manufactures and sells cryogenic valves that are used primarily by the industrial gas industries, including atmospheric gases, LNG, liquid hydrogen and specialty gases used in semiconductor manufacture. After the sale of the business of Goddard Valve, Registrant will continue to own and operate its other subsidiary, Mack Valves Pty Ltd, located in Melbourne, Australia. Mack Valves Pty Ltd manufactures a range of industrial valves for specialized areas of industry, including water, steam, fire service and other valves used extensively in clean water, fire prevention, mining and other industrial applications, as well as a range of cryogenic valves. The terms of the transaction are more fully described in the Asset Purchase Agreement that was filed as an exhibit within the initial filing of this Current Report on form 8-K. In conjunction with the sale of the Goddard Valve business, Registrant has offered for sale the building and property which formerly housed Goddard Valve. Registrant has received bids to purchase the building and property, and expects to complete the sale within this fiscal year. The pro forma exhibits reflect the following events and assumptions: 1) Unaudited condensed consolidating pro forma balance sheet as of September 28, 2002 that reflects: A. Sale of Goddard Valve assets to ECII. B. Retirement of Goddard Valve bank debt and financing fees. - 4 - C. Pro forma retirement of bank debt and financing fees of subsidiary, Mack Valves Pty Ltd. D. Pro forma payoff of Goddard Valve's creditors. E. Pro forma payment of severance to Goddard Valve employees. F. Pro forma sale of Goddard Valve building and property, at net book value. G. Adjustment of income tax provision. 2) Unaudited condensed consolidating pro forma statements of operations for periods ended September 28, 2002 and December 28, 2002 that reflect the following assumptions: A. Activities associated with Goddard Valve have been eliminated as if the above transactions took place on September 30, 2001, including approximately $111,000 and $28,000 of expenses for depreciation, utilities, insurance and real estate taxes associated with the building formerly occupied by Goddard Valve, for fiscal year 2002 and the most recent quarter ended December 28, 2002, respectively. Estimates for continuing operations include additional expense for rented space, as noted in item "C" below. B. Reduction of interest payments associated with retirement of debt. C. Estimated net reduction of expense that results from disposing of the building formerly occupied by Goddard Valve, and instead, renting office space. D. Adjustment of income tax provision. - 5 - GODDARD INDUSTRIES, INC. AND SUBSIDIARIES Unaudited Condensed Pro Forma Balance Sheet December 28, 2002 Pro Forma adjustments Historical for sale of as at Goddard Valve Pro Forma as at December 28, 2002 Corporation December 28, 2002 ASSETS Current assets: Cash and cash equivalents $ 137,089 A $ 3,735,606 $ 387,554 B (1,544,001) C (1,458,875) D ( 377,482) E ( 407,887) F 303,104 Cash restricted 250,000 B ( 250,000) - Accounts receivable, net of allowances 1,045,957 A ( 447,264) 598,693 Inventories 2,288,204 A (1,467,877) 820,327 Refundable taxes on income 427,753 G ( 46,000) 381,753 Prepaid expense and taxes 74,919 - 74,919 Deferred income taxes 279,337 G ( 166,951) 112,386 Total current assets 4,503,259 (2,127,627) 2,375,632 Net property, plant and 1,498,835 A ( 625,018) 570,713 equipment F ( 303,104) Other assets: Deferred charges 12,291 - 12,291 Deferred income taxes 149,592 F 41,151 190,743 Investment 250,000 - 250,000 Deferred financing charges 169,679 B ( 137,292) - D ( 32,387) Intangible assets 112,908 A ( 112,908) - Goodwill 2,388,074 - 2,388,074 Total other assets 3,082,544 ( 241,436) 2,841,108 TOTAL ASSETS $9,084,638 $(3,297,185) $5,787,453 - 6 - LIABILITIES AND SHAREHOLDERS' EQUITY Current liabilities: Current maturities of long-term debt 1,492,088 B ( 15,000) 18,213 C (1,458,875) Accounts payable 494,724 D ( 160,787) 333,937 Accrued expenses 459,998 D ( 216,695) 243,303 Deferred compensation 68,988 - 68,988 Total current liabilities 2,515,798 (1,851,357) 664,441 Long-term debt 1,779,001 B (1,779,001) - Deferred compensation 352,787 - 352,787 Total long-term debt 2,131,788 (1,779,001) 352,787 Shareholders' equity 4,437,052 333,173 4,770,225 TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY $9,084,638 $(3,297,185) $5,787,453 A Record sale of Goddard Valve operating assets. B Retire Goddard Valve bank debt and financing fees. C Pro forma retirement of bank debt and financing fees of Mack Valves Pty Ltd. D Pro forma payoff of Goddard Valve's creditors. E Pro forma payment of severance to Goddard Valve employees. F Pro forma sale of Goddard Valve building and property at net book value. G Adjust income tax provision. - 7 - GODDARD INDUSTRIES, INC. AND SUBSIDIARIES Pro Forma Condensed Consolidated Statement of Operations (Unaudited) Pro Forma adjustments Pro Forma For the Three for sale of For the Three Months Ended Goddard Valve Months Ended December 28, 2002 Corporation December 28, 2002 Net Sales $1,624,805 A $( 791,150) $ 833,655 Cost of sales 1,067,909 A ( 567,506) 500,403 Gross profit 556,896 ( 223,644) 333,252 Selling and administrative expenses 654,553 A ( 235,476) 407,155 C ( 11,922) Income (Loss) from operations ( 97,657) 23,754 ( 73,903) Other income (expense): Interest expense ( 65,777) A 3,604 ( 8,913) B 53,260 Other income, net 7,075 A ( 1,858) 5,217 Foreign exchange ( 864) - ( 864) Total other income (expense) ( 59,566) 55,006 ( 4,560) Income (loss) before taxes ( 157,223) 78,760 ( 78,463) Income taxes ( 63,499) D 27,100 ( 36,399) Net income (loss) $( 93,724) $ 51,660 $( 42,064) EARNINGS (LOSS) PER SHARE: Net Income (loss): Basic $(0.04) $ 0.02 ($0.02) Diluted N/A N/A N/A A Record elimination of net revenue and expenses associated with activities of Goddard Valve. B Record pro forma reduction of interest payments on bank debt. C Record net reduction of expense resulting from disposal of building. D Adjust income tax provision. - 8 - GODDARD INDUSTRIES, INC. AND SUBSIDIARIES Pro Forma Condensed Consolidating Statement of Operations (Unaudited) Pro Forma adjustments for sale of Pro Forma For the Year Ended Goddard Valve For the Year Ended September 28, 2002 Corporation September 28, 2002 Sales $6,435,781 A $(3,217,059) $3,218,722 Cost of sales 4,284,836 A (2,357,411) 1,927,425 Gross profit 2,150,945 ( 859,648) 1,291,297 Selling and Administrative expenses 2,848,316 A (1,028,722) 1,771,914 C ( 47,680) Operating profit (loss) ( 697,371) 216,754 ( 480,617) Other income (expense): Interest expense ( 259,045) A 10,510 ( 32,682) B 215,853 Other income 30,170 A ( 1,704) 28,466 Foreign exchange ( 21,544) A 12,441 ( 9,103) Total other income (expense) ( 250,419) 237,100 ( 13,319) Income (loss) from operations before income taxes ( 947,790) 453,854 ( 493,936) Income taxes ( 407,436) D 144,900 ( 262,536) Net income (loss) $( 540,354) $ 308,954 ( 231,400) EARNINGS (LOSS) PER SHARE: Net income (loss): Basic $ (0.22) $ 0.13 $ (0.09) Diluted N/A N/A N/A A Record elimination of net revenue and expenses associated with activities of Goddard Valve. B Record pro forma reduction of interest payments on bank debt. C Record net reduction of expense resulting from disposal of building. D Adjust income tax provision. - 9 -