8-K 1 a2027674z8-k.txt 8-K UNITED STATES SECURITIES AND EXCHANGE COMMISSION WASHINGTON, D.C. 20549 FORM 8-K CURRENT REPORT PURSUANT TO SECTION 13 OR 15 (d) OF THE SECURITIES EXCANGE ACT OF 1934 Date of Report (Date of earliest event reported): October 16, 2000 (September 30, 2000) LYDALL, INC. ------------------------------------------------------------------------------- (Exact name of registrant as specified in its charter) Delaware 1-7665 06-0865505 ------------------------------------------------------------------------------- (State or other jurisdiction of (Commission file number) (I. R. S. Employer incorporation or organization) Identification No.) One Colonial Road, P. O. Box 151, Manchester, CT 06045-0151 ------------------------------------------------------------------------------- (Address of principal executive offices) (Zip Code) (860) 646-1233 ------------------------------------------------------------------------------ (Registrant's telephone number, including area code) Not Applicable ------------------------------------------------------------------------------ (Former name or former address, if changed since last report) TABLE OF CONTENTS
Page No. ITEM 2 Acquisition or Disposition of Assets 3 ITEM 7 Financial Statements and Exhibits 4 Signature 5
2 ITEM 2. ACQUSITION OR DISPOSITION OF ASSETS Effective September 30, 2000, Lydall, Inc. (the "Company") completed the disposition of substantially all the assets and certain liabilities of its injection-molding and chrome-plating operations (the "Sold Operations") in Germany to a management buyout group. The disposition was affected through a transfer of substantially all the assets and certain liabilities of the Sold Operations from Lydall Gerhardi GmbH & Co. KG to Gerhardi Kunststofftechnik GmbH, which in turn was sold to the aforementioned management buyout group for nominal consideration. The terms of the transfer of assets and liabilities and subsequent disposition are more fully described in the Spin-off and Transfer Agreement and the Purchase and Transfer Agreement, respectively. Copies of the translated agreements are attached as Exhibits 2.1 and 2.2, respectively and are incorporated by reference herein. The Company hereby undertakes to furnish to the Commission upon its request, copies of the original executed agreements, exhibits and schedules thereto, written in German, not filed with this report. The Company also issued a press release on October 2, 2000, a copy of which is attached as Exhibit 99.1 hereto and incorporated by reference herein. 3 ITEM 7. FINANCIAL STATEMENTS AND EXHIBITS (a) Financial statements of business acquired Not applicable. (b) Pro forma financial information The following pro forma consolidated condensed financial statements of the Company are filed with this report and are incorporated by reference in this Item 7(b): Pro Forma Consolidated Condensed Balance Sheet at June 30, 2000 (unaudited) Pro Forma Consolidated Condensed Statement of Net Income for the Year Ended December 31, 1999 (unaudited) Pro Forma Consolidated Condensed Statement of Net Income for the Six Months Ended June 30, 2000 (unaudited) The unaudited Pro Forma Consolidated Condensed Balance Sheet of the Company at June 30, 2000 reflects the financial position of the Company as if the disposition discussed in Item 2 took place on June 30, 2000. The unaudited Pro Forma Consolidated Condensed Statement of Net Income for the fiscal year ended December 31, 1999 and the six months ended June 30, 2000 assumes that the disposition occurred on January 1, 1999. These unaudited pro forma consolidated condensed financial statements are based on available information and certain assumptions that the Company believes are reasonable. The pro forma adjustments are based on preliminary information and are subject to adjustments for actual information related to the disposition. These pro forma financial statements are presented for illustrative purposes only. They do not purport to be indicative of the results of operations which actually would have resulted had the divestiture occurred on the dates indicated or which may result in the future. The Company believes it has utilized reasonable methods to conform the basis of presentation. The unaudited pro forma consolidated condensed financial statements should be read in conjunction with the consolidated financial statements and footnotes thereto of Lydall, Inc. (file no. 1-7665) for the year ended December 31, 1999, which have been filed on Form 10-K on March 30, 2000, pursuant to section 13 or 15(d) of the Securities Exchange Act of 1934. (c) Exhibits: 2.1 Spin-off and Transfer Agreement (English translation) between Lydall Gerhardi GmbH and Co. KG and Gerhardi Kunststofftechnik GmbH dated September 29, 2000, effective September 30, 2000. 2.2 Purchase and Transfer Agreement (English translation) between Lydall Gerhardi GmbH and Co. KG and the management buyout group as setforth in the agreement, dated September 29, 2000, effective September 30, 2000. 99.1 Press release dated October 2, 2000 titled "Lydall Completes Sale of Chrome-Plating and Injection-Molding Operations in Germany". 4 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 thereunto duly authorized. Lydall, Inc. (Registrant) Date: October 16, 2000 By: /s/ Thomas P. Smith --------------------------------------- Thomas P. Smith Vice President-Controller (On behalf of the Registrant and as Principal Accounting Officer) 5 INDEX TO FINANCIAL STATEMENTS AND EXHIBITS
Financial Statements Page ------------------------------------- ---- Pro Forma Consolidated Condensed Balance Sheet 7 at June 30, 2000 (unaudited) Pro Forma Consolidated Condensed Statement of Net Income 8 for the Year Ended December 31, 1999 (unaudited) Pro Forma Consolidated Condensed Statement of Net Income for the Six months Ended June 30, 2000 (unaudited) 9
Exhibit No. Description ----------- ----------- 2.1 Spin-off and Transfer Agreement (English translation) between Lydall Gerhardi GmbH and Co. KG and Gerhardi Kunststofftechnik GmbH dated September 29, 2000, effective September 30, 2000. 2.2 Purchase and Transfer Agreement (English translation) between Lydall Gerhardi GmbH and Co. KG and the management buyout group as set forth in the agreement, dated September 29, 2000, effective September 30, 2000. 99.1 Press release dated October 2, 2000 titled "Lydall Completes Sale of Chrome-Plating and Injection-Molding Operations in Germany".
6 LYDALL, INC. AND SUBSIDIARIES PRO FORMA CONSOLIDATED CONDENSED BALANCE SHEET AT JUNE 30, 2000 (IN THOUSANDS) (UNAUDITED)
June 30, Pro Forma Adjustments June 30, 2000 ----------------------- 2000 ASSETS Historical Business (a) Other Pro Forma ---------- ----------- ------- --------- CURRENT ASSETS: Cash and cash equivalents .................... $ 1,686 $ 1,686 Accounts receivable, net ..................... 48,549 $ (6,607) 41,942 Inventories, net ............................. 22,327 22,327 Taxes receivable ............................. -- $9,954 (c) 9,954 Prepaid expenses ............................. 2,463 2,463 Assets held for sale ......................... 31,558 (26,378) 5,180 Deferred tax assets .......................... 2,558 2,558 ---------- ----------- ------- --------- Total current assets .................... 109,141 (32,985) 9,954 86,110 Property, plant and equipment, net ................ 80,737 (275) 80,462 Other assets, net ................................. 24,027 24,027 ---------- ----------- ------- --------- Total assets ................................. $ 213,905 $ (33,260) $9,954 $ 190,599 ========== ============== ======= ========= LIABILITIES AND STOCKHOLDERS' EQUITY CURRENT LIABILITIES: Cash overdraft ............................... $ 2,799 $ 2,799 Current portion of long-term debt ............ 7,194 7,194 Accounts payable ............................. 21,015 $ (2,594) 18,421 Accrued taxes ................................ 1,097 1,097 Accrued payroll and other compensation ....... 6,236 2,435 8,671 Liabilities related to assets held for sale .. 7,585 (6,648) 937 Other accrued liabilities .................... 8,244 (114) $2,100(b) 10,230 ---------- ----------- ------- --------- Total current liabilities ............... 54,170 (6,921) 2,100 49,349 Long-term debt .................................... 18,302 18,302 Deferred tax liabilities .......................... 11,762 11,762 Other long-term liabilities ....................... 4,769 4,769 Commitments and contingencies STOCKHOLDERS' EQUITY: Preferred stock .............................. -- Common stock ................................. 2,191 2,191 Capital in excess of par value ............... 39,766 39,766 Retained earnings ............................ 150,077 (26,339) 7,854 131,592 Accumulated other comprehensive income ....... (5,490) (5,490) ---------- ----------- ------- --------- 186,544 (26,339) 7,854 168,059 Less: treasury stock, at cost ............... (61,642) (61,642) ---------- ----------- ------- --------- Total stockholders' equity .............. 124,902 (26,339) 7,854 106,417 ---------- ----------- ------- --------- Total liabilities and stockholders' equity ... $ 213,905 $ (33,260) $ 9,954 $ 190,599 ========= ============== ======= =========
a) To eliminate the assets and liabilities of the Sold Operations included in the Balance Sheet as of June 30, 2000. b) To record an accrual for the estimated costs associated with the divestiture. c) To adjust the income tax receivable as a result of the divestiture. 7 LYDALL, INC. AND SUBSIDIARIES PRO FORMA CONSOLIDATED CONDENSED STATEMENT OF NET INCOME FOR THE YEAR ENDED DECEMBER 31, 1999 (IN THOUSANDS EXCEPT PER-SHARE DATA) (UNAUDITED)
DECEMBER 31, 1999 PRO FORMA DECEMBER 31, 1999 HISTORICAL ADJUSTMENTS (a) PRO FORMA ----------------- --------------- ----------------- Net sales $ 318,505 ($52,214) $266,291 Cost of sales 242,985 (52,173) 190,812 --------- --------- --------- Gross margin 75,520 (41) 75,479 Selling, product development and administrative expenses 54,827 (4,067) 50,760 --------- --------- --------- Operating income 20,693 4,026 24,719 Other (income) expense: Investment income (46) (46) Interest expense 2,612 2,612 Foreign currency transaction gain (961) (961) Other (134) (134) --------- --------- --------- 1,471 -- 1,471 --------- --------- --------- Income from continuing operations before income taxes 19,222 4,026 23,248 Income tax expense 6,270 1,409 7,679 --------- --------- --------- Income from continuing operations 12,952 2,617 15,569 Discontinued operations: Loss from operations of the Wovens Segment, net of tax (347) -- (347) Loss on disposal of the Wovens Segment, net of tax (1,830) -- (1,830) --------- --------- --------- Loss from discontinued operations (2,177) -- (2,177) --------- --------- --------- Net income $10,775 $2,617 $13,392 ======= ======= ======= Basic earnings (loss) per common share: Continuing operations $ .82 $.99 Discontinued operations (.14) (.14) ----- ----- Net income $ .68 $.85 Diluted earnings (loss) per common share: Continuing operations $ .82 $.99 Discontinued operations (.14) (.14) ----- ----- Net income $ .68 $.85 Weighted average common stock outstanding 15,715 15,715 Weighted average common stock and equivalents outstanding 15,784 15,784
a) To eliminate the pro forma results of the Sold Operations for the year ended December 31, 1999. 8 LYDALL, INC. AND SUBSIDIARIES PRO FORMA CONSOLIDATED CONDENSED STATEMENT OF NET INCOME FOR THE SIX MONTHS ENDED JUNE 30, 2000 (IN THOUSANDS EXCEPT PER-SHARE DATA) (UNAUDITED)
JUNE 30, 2000 PRO FORMA JUNE 30, 2000 HISTORICAL ADJUSTMENTS (a) PRO FORMA ------------- --------------- -------------- Net sales $ 159,525 ($24,411) $135,114 Cost of sales 121,403 (23,570) 97,833 ---------- -------- -------- Gross margin 38,122 (841) 37,281 Selling, product development and administrative expenses 28,208 (2,115) 26,093 ---------- -------- -------- Operating income 9,914 1,274 11,188 Other (income) expense: Investment income (158) (158) Interest expense 839 839 Foreign currency transaction loss 5 5 Gain from sale of operations (6,065) (6,065) Other (218) (218) ---------- -------- -------- (5,597) -- (5,597) ---------- -------- -------- Income from continuing operations before income taxes 15,511 1,274 16,785 Income tax expense 5,591 446 6,037 ---------- -------- -------- Income from continuing operations 9,920 828 10,748 Discontinued operations: Gain on disposal of the Wovens Segment, net of tax 71 -- 71 ---------- -------- -------- Gain from discontinued operations 71 -- 71 ---------- -------- -------- NET INCOME $ 9,991 $828 $10,819 ========== ======= ======== Basic earnings per common share: Continuing operations $ .63 $ .68 Discontinued operations - - -------- ------- Net income $ .63 $ .68 Diluted earnings per common share: Continuing operations $ .63 $ .68 Discontinued operations - - -------- -------- Net income $ .63 $ .68 Weighted average common stock outstanding 15,745 15,745 Weighted average common stock and equivalents 15,800 15,800 outstanding
a) To eliminate the pro forma results of the Sold Operations for the six months ended June 30, 2000. 9