-----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, EQ86s33QcRmHo3pULiuSdLwoVYMgp7D9CfcnpGW86c0ftm7mQHkuUCiU7UAYmAYE vryKqXZrphll7AZgcxaVwg== 0000065201-99-000001.txt : 19990113 0000065201-99-000001.hdr.sgml : 19990113 ACCESSION NUMBER: 0000065201-99-000001 CONFORMED SUBMISSION TYPE: 8-K/A PUBLIC DOCUMENT COUNT: 1 CONFORMED PERIOD OF REPORT: 19990112 ITEM INFORMATION: FILED AS OF DATE: 19990112 FILER: COMPANY DATA: COMPANY CONFORMED NAME: MET PRO CORP CENTRAL INDEX KEY: 0000065201 STANDARD INDUSTRIAL CLASSIFICATION: INDUSTRIAL & COMMERCIAL FANS & BLOWERS & AIR PURIFYING EQUIP [3564] IRS NUMBER: 231683282 STATE OF INCORPORATION: DE FISCAL YEAR END: 0131 FILING VALUES: FORM TYPE: 8-K/A SEC ACT: SEC FILE NUMBER: 001-07763 FILM NUMBER: 99505034 BUSINESS ADDRESS: STREET 1: P O BOX 144 STREET 2: 160 CASSELL RD CITY: HARLEYSVILLE STATE: PA ZIP: 19438 BUSINESS PHONE: 2157236751 MAIL ADDRESS: STREET 1: 160 CASSELL ROAD STREET 2: BOX 144 CITY: HARLEYSVILLE STATE: PA ZIP: 19438 FORMER COMPANY: FORMER CONFORMED NAME: MET PRO WATER TREATMENT CORP DATE OF NAME CHANGE: 19740924 FORMER COMPANY: FORMER CONFORMED NAME: MET PRO INC DATE OF NAME CHANGE: 19661026 8-K/A 1 SECURITIES AND EXCHANGE COMMISSION WASHINGTON, DC 20549 ------------------ AMENDMENT NO. 1 TO FORM 8-K FILED ON NOVEMBER 13,1998 CURRENT REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 Date of report (date of earliest event reported) October 29, 1998 ------------------------ MET-PRO CORPORATION - -------------------------------------------------------------------------------- (Exact Name of Registrant as Specified in Charter) DELAWARE 001-07763 23-1683282 - -------------------------------------------------------------------------------- (State or Other Jurisdiction (Commission (IRS Employer of Incorporation) File Number) Identification No.) 160 Cassell Road, Harleysville, PA 19438 - -------------------------------------------------------------------------------- (Address of Principal Executive Offices) (Zip Code) Registrant's telephone number, including area code 215-723-6751 ------------------------------ (Not Applicable) ------------------------------- (Former name or former address, if changed from last report) Registrant's Current Report on Form 8-K for an event occurring on October 29, 1998 (filed on November 13, 1998) omitted the Pro Forma Financial Information required by Item 7 of Form 8-K and set forth that such information would be filed by amendment within sixty (60) days. This Amendment No. 1 to such Form 8-K is hereby filed in order to provide the Pro Forma Financial Information required by Item 7. Item 7. Financial Statements, Pro Forma Financial Information and Exhibits. (b) Pro Forma Financial Information The following unaudited pro forma consolidated financial information presents the pro forma consolidated balance sheet at July 31, 1998 and January 31, 1998, giving effect to the acquisition of all of the material assets, subject to ordinary business liabilities, of Flex-Kleen Corporation, a Delaware corporation and Flex-Kleen Canada, Ltd., and Ontario (Canada) corporation (collectively "Flex-Kleen") as if it had been consummated on those dates. Also presented are the pro forma consolidated statements of operations for the six months ended July 31, 1998 and the year ended January 31, 1998, giving effect to such assets, subject to such liabilities, of Flex-Kleen as if the acquisition had been consummated as of the beginning of the respective periods presented. The Company's fiscal year ends on January 31, and Flex-Kleen's fiscal year ends on October 31. The pro forma consolidated balance sheet combines the respective balance sheets of Met-Pro Corporation and Flex-Kleen as of July 31, 1998 and January 31, 1998. The pro forma consolidated statement of operations for the six months ended July 31, 1998 combines results of each company for the period. The pro forma consolidated statement of operations for the year ended January 31, 1998 combines the results of Met-Pro Corporation for its year ended January 31, 1998 and the results of Flex-Kleen for its year ended October 31, 1997. The pro forma data is based on the historical combined statements of Met-Pro Corporation and Flex-Kleen giving effect to the purchase method of accounting and to the assumptions and adjustments (which the Company believes to be reasonable) described in the accompanying notes to the unaudited pro forma consolidated financial information. Under the purchase method of accounting, assets acquired and liabilities assumed will be recorded at their estimated fair value at the date of acquisition. The pro forma adjustments set forth in the following unaudited pro forma consolidated financial information are estimated and may differ from the actual adjustments when they become known. However, no material differences are anticipated by the Company. The following unaudited pro forma consolidated financial information does not reflect certain cost savings that the Company believes may be realized following the Flex-Kleen acquisition. Such cost savings are expected to be realized primarily through the elimination of certain overhead expenses and geographic overlap and the implementation of strict cost controls and standardized operating procedures. Additionally, the Company believes the acquisition will enable it to realize increased operating efficiencies and economies of scale including enhanced purchasing power and increased asset utilization. The pro forma data is provided for comparative purposes only. It does not purport to be indicative of the results that actually would have occurred if such acquisition had been consummated on the dates indicated or that may be obtained in the future. The unaudited pro forma combined financial information should be read in conjunction with the notes thereto, the audited financial statements of Flex-Kleen for the year ended October 31, 1997 and the nine months ended July 31, 1998 and notes thereto, and the Company's consolidated financial statements and related notes thereto, incorporated herein by reference. -1- The following are filed here within: Unaudited Pro Forma Consolidated Condensed Balance Sheet as of July 31, 1998 Unaudited Pro Forma Consolidated Condensed Statement of Operations for the Six Months Ended July 31, 1998 Notes to Unaudited Pro Forma Consolidated Financial Information for the Six Months Ended July 31, 1998 Unaudited Pro Forma Consolidated Condensed Balance Sheet as of January 31, 1998 Unaudited Pro Forma Consolidated Condensed Statement of Operations for the Year Ended January 31, 1998 Notes to Unaudited Pro Forma Consolidated Financial Information for the Year Ended January 31, 1998 -2-
MET-PRO CORPORATION UNAUDITED PRO FORMA CONSOLIDATED CONDENSED BALANCE SHEET As of July 31, 1998 ----------------------------------------------------------------------------- Historical Pro Forma ----------------------------------------------------------------------------- Adjustments Met-Pro Flex-Kleen Increase/ Corporation Corporation Total Notes Decrease Consolidated ----------------------------------------------------------------------------- ASSETS Current assets Cash and cash equivalents $8,073,238 $ 8,073,238 (D) ($367,221) $4,706,017 (C) (3,000,000) Accounts receivable, net of allowance 10,128,616 $2,359,000 12,487,616 12,487,616 Inventories 13,241,599 1,745,000 14,986,599 14,986,599 Prepaid expenses, deposits and other current assets 1,230,123 30,000 1,260,123 (M) 542,153 1,802,276 Deferred income taxes 1,014,856 1,014,856 1,014,856 ----------------------------------------------------------------------------- Total current assets 33,688,432 4,134,000 37,822,432 (2,825,068) 34,997,364 Property, plant and equipment, at cost, net 13,931,444 240,000 14,171,444 (E) 130,000 14,301,444 Costs in excess of net assets of business acquired 7,219,406 7,219,406 (F) 12,304,068 19,523,474 Other assets 1,079,623 1,305,000 2,384,623 (G) (1,305,000) 1,129,623 (A) 50,000 ----------------------------------------------------------------------------- Total assets $55,918,905 $5,679,000 $61,597,905 $8,354,000 $69,951,905 ============================================================================= LIABILITIES AND STOCKHOLDERS' EQUITY Current liabilities Current portion of long-term debt $895,942 $895,942 (B) $1,200,000 $2,095,942 Accounts payable 3,091,564 $2,142,000 5,233,564 (H) (597,000) 4,636,564 Accrued salaries, wages and expenses 5,753,583 557,000 6,310,583 (I) (13,000) 6,241,583 (J) (56,000) Customers' advances 234,289 234,289 234,289 Accrued income taxes 36,000 36,000 (K) (36,000) -- ----------------------------------------------------------------------------- Total current liabilities 9,975,378 2,735,000 12,710,378 498,000 13,208,378 Long-term debt 1,843,060 1,843,060 (B) 10,800,000 12,643,060 Other non-current liabilities 288,938 1,108,000 1,396,938 (G) (1,108,000) 288,938 Deferred income taxes 370,598 370,598 370,598 ----------------------------------------------------------------------------- Total liabilities 12,477,974 3,843,000 16,320,974 10,190,000 26,510,974 ----------------------------------------------------------------------------- Stockholders' equity Common stock, Met-Pro Corporation 713,862 713,862 713,862 Common stock, Flex-Kleen Corporation 200,000 200,000 (L) (200,000) -- Additional paid-in capital 7,508,748 1,715,000 9,223,748 (L) (1,715,000) 7,508,748 Retained earnings 39,057,809 39,057,809 39,057,809 Accumulated other comprehensive loss (156,653) (79,000) (235,653) (L) 79,000 (156,653) Less: Treasury stock, at cost (3,682,835) (3,682,835) (3,682,835) ----------------------------------------------------------------------------- Net stockholders' equity 43,440,931 1,836,000 45,276,931 (1,836,000) 43,440,931 ----------------------------------------------------------------------------- Total liabilities and stockholders' equity $55,918,905 $5,679,000 $61,597,905 $8,354,000 $69,951,905 =============================================================================
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MET-PRO CORPORATION UNAUDITED PRO FORMA CONSOLIDATED CONDENSED STATEMENT OF OPERATIONS For the six months ended July 31, 1998 ----------------------------------------------------------------------------- Historical Pro Forma ----------------------------------------------------------------------------- Adjustments Met-Pro Flex-Kleen Increase/ Corporation Corporation Total Notes Decrease Consolidated ----------------------------------------------------------------------------- Net sales $29,529,731 $8,982,000 $38,511,731 $38,511,731 Cost of goods sold 18,365,829 6,027,000 24,392,829 24,534,829 (S) $12,500 (T) 15,000 (U) 2,000 (V) 12,500 (X) 100,000 - ------------------------------------------------------------------------------------------------------------------------------------ Gross profit 11,163,902 2,955,000 14,118,902 (142,000) 13,976,902 Operating expense Selling 2,705,768 570,000 3,275,768 3,281,268 (U) 500 (V) 5,000 General and administrative 3,278,041 697,000 3,975,041 (R) 153,801 4,599,327 (N) 5,000 (O) 6,500 (Q) 340,985 (T) 10,000 (U) 500 (V) 7,500 (W) 100,000 ----------------------------------------------------------------------------- 5,983,809 1,267,000 7,250,809 629,786 7,880,595 ----------------------------------------------------------------------------- Income from operations 5,180,093 1,688,000 6,868,093 (771,786) 6,096,307 Other income/(expense) 336,324 (61,000) 275,324 (P) (90,000) 185,324 ----------------------------------------------------------------------------- Income before taxes 5,516,417 1,627,000 7,143,417 (861,786) 6,281,631 Provision for taxes 2,025,911 623,000 2,648,911 (Y) (261,891) 2,387,020 ----------------------------------------------------------------------------- Net income $3,490,506 $1,004,000 $4,494,506 ($599,895) $3,894,611 ============================================================================= Earnings per share, basic $0.50 $0.56 Earnings per share, diluted $0.50 $0.55 Outstanding shares, basic 6,974,394 6,974,394 Outstanding shares, diluted 7,032,673 7,032,673
-4- MET-PRO CORPORATION Notes to Unaudited Pro Forma Consolidated Financial Information For the Six Months Ended July 31, 1998 NOTE 1: The unaudited pro forma consolidated condensed balance sheet is based on the individual balance sheets of Met-Pro Corporation and Flex-Kleen to reflect the acquisition of all of the material assets, subject to ordinary business liabilities, of Flex-Kleen by Met-Pro Corporation (which was completed on October 29, 1998) as if it had taken place on July 31, 1998 after giving effect to pro forma adjustments to reflect the following: Met-Pro Corporation paid approximately $15,000,000 for the assets of Flex-Kleen, in the form of cash. As part of the transaction, Met-Pro Corporation entered into a five (5) year non-compete transaction with the stockholders of Flex-Kleen for which it was paid $50,000 (A). Total cash required at settlement amounted to $15,000,000. Met-Pro Corporation financed this transaction with a bank on an unsecured basis. The bank financing, in the amount of $12,000,000 (B), is comprised of a ten-year term loan with a fixed interest rate swap of 5.98% with payments of principal and interest due on a quarterly basis beginning January 31, 1999. The balance of $3,000,000 was paid from cash on hand of the Registrant (C). Met-Pro Corporation incurred $367,221 (D) in costs associated with the transaction, which was funded internally. For purposes of the unaudited pro forma condensed financial statements, Flex-Kleen's furniture and fixtures were written up by $130,000 (E) to estimated fair value. As a result of this acquisition, Met-Pro Corporation has increased the costs in excess of net assets of businesses acquired by $12,304,068 (F) as of July 31, 1998. The following adjustments resulted from the Asset Purchase Agreement: (G) Represents the elimination of Sellers' intercompany accounts receivable and accounts payable in accordance with Section 1.1.2(d) and 1.4.2(d) of the Asset Purchase Agreement (the "Agreement"). (H) Represents cash overdrafts that are excluded in accordance with Section 1.4.2(c) of the Agreement. (I) Represents carried-over vacation for periods prior to January 1, 1998 excluded in accordance with Section 1.4.2(g)(B) of the Agreement. (J) Represents accrued sales and use taxes ($49,000) and defined benefit retirement costs ($7,000) excluded in accordance with Sections 1.4.2(a) and 1.4.2(g)(A) of the Agreement, respectively. (K) Represents accrued federal, state and Canadian taxes that are excluded in accordance with Section 1.4.2(a) of the Agreement. (L) Elimination of Sellers' common stock, additional paid in capital and cumulative translation adjustment. (M) Represents the adjustment to arrive at the "Pro Forma Net Equity" as defined in Section 1.3.2(a) of the Agreement. -5- MET-PRO CORPORATION Notes to Unaudited Pro Forma Consolidated Financial Information For the Six Months Ended July 31, 1998 NOTE 2: The unaudited pro forma consolidated condensed statement of operations is based on the individual statements of Met-Pro Corporation and Flex-Kleen for the six months ended July 31, 1998 after giving effect to the pro forma adjustments necessary to reflect the acquisition described in Note 1, as if it had taken place on February 1, 1998. The pro forma adjustments are as follows: (N) Amortization of covenant not to compete of $5,000. (O) Additional depreciation on the write-up of Flex-Kleen's furniture and fixtures amounting to $6,500. (P) Reduction in interest income by $90,000 due to the cash outlay by Met-Pro Corporation to acquire Flex-Kleen's assets. (Q) Interest expense increase of $340,985 as a result of bank financing of $12,000,000. (R) Amortization of costs in excess of net assets of businesses acquired over forty (40) years amounting to $153,801. (S) Insurance expense increase of $12,500 due to increased liability and property coverage. (T) Pension expense increase of $25,000 due to the addition of Flex-Kleen employees to our Company's defined benefit plan. (U) Administrative expense for the maintenance of existing 401-(k) plan of $3,000. (V) Employee benefit expense increase of $25,000 for various employee benefits. (W) Estimated additional Met-Pro Corporation out of pocket costs of $100,000. (X) Decrease of $100,000 in gross margins for sales of inventory to affiliate by Flex-Kleen. (Y) Tax effect of the above adjustments to result in an assumed effective consolidated income tax rate of 38%. -6-
MET-PRO CORPORATION UNAUDITED PRO FORMA CONSOLIDATED CONDENSED BALANCE SHEET As of January 31, 1998 ----------------------------------------------------------------------------- Historical Pro Forma ----------------------------------------------------------------------------- Adjustments Met-Pro Flex-Kleen Increase/ Corporation Corporation Total Notes Decrease Consolidated ----------------------------------------------------------------------------- ASSETS Current assets Cash and cash equivalents $11,253,380 $16,000 $11,269,380 (D) ($367,221) $7,902,159 (C) (3,000,000) Accounts receivable, net of allowance 10,664,310 4,055,000 14,719,310 14,719,310 Notes receivable, ESOT 200,000 200,000 200,000 Inventories 12,210,749 1,503,000 13,713,749 13,713,749 Prepaid expenses, deposits and other current assets 723,965 46,000 769,965 (M) 343,153 1,113,118 Deferred income taxes 1,014,856 1,014,856 1,014,856 ----------------------------------------------------------------------------- Total current assets 36,067,260 5,620,000 41,687,260 (3,024,068) 38,663,192 Property, plant and equipment, at cost, net 13,787,596 273,000 14,060,596 (E) 130,000 14,190,596 Costs in excess of net assets of business acquired 7,198,915 7,198,915 (F) 12,304,068 19,502,983 Other assets 930,469 2,312,000 3,242,469 (G) (2,312,000) 980,469 (A) 50,000 ----------------------------------------------------------------------------- Total assets $57,984,240 $8,205,000 $66,189,240 $7,148,000 $73,337,240 ============================================================================= LIABILITIES AND STOCKHOLDERS' EQUITY Current liabilities Current portion of long-term debt $1,441,964 $1,441,964 (B) $1,200,000 $2,641,964 Accounts payable 2,648,943 $3,149,000 5,797,943 (H) (597,000) 5,200,943 Accrued salaries, wages and expenses 6,529,188 870,000 7,399,188 (I) (13,000) 7,330,188 (J) (56,000) Customers' advances 647,450 647,450 647,450 Accrued income taxes 74,000 74,000 (K) (74,000) -- ----------------------------------------------------------------------------- Total current liabilities 11,267,545 4,093,000 15,360,545 460,000 15,820,545 Long-term debt 2,242,047 2,242,047 (B) 10,800,000 13,042,047 Other non-current liabilities 249,037 1,024,000 1,273,037 (G) (1,024,000) 249,037 Deferred income taxes 384,782 384,782 384,782 ----------------------------------------------------------------------------- Total liabilities 14,143,411 5,117,000 19,260,411 10,236,000 29,496,411 ----------------------------------------------------------------------------- Stockholders' equity Common stock, Met-Pro Corporation 713,862 713,862 713,862 Common stock, Flex-Kleen Corporation 200,000 200,000 (L) (200,000) -- Additional paid-in capital 7,868,357 2,930,000 10,798,357 (L) (2,930,000) 7,868,357 Retained earnings 37,667,872 37,667,872 37,667,872 Accumulated other comprehensive loss (219,015) (42,000) (261,015) (L) 42,000 (219,015) Less: Treasury stock, at cost (2,190,247) (2,190,247) (2,190,247) ----------------------------------------------------------------------------- Net stockholders' equity 43,840,829 3,088,000 46,928,829 (3,088,000) 43,840,829 ----------------------------------------------------------------------------- Total liabilities and stockholders' equity $57,984,240 $8,205,000 $66,189,240 $7,148,000 $73,337,240 =============================================================================
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MET-PRO CORPORATION UNAUDITED PRO FORMA CONSOLIDATED CONDENSED STATEMENT OF OPERATIONS For the year ended January 31, 1998 ----------------------------------------------------------------------------- Historical Pro Forma ----------------------------------------------------------------------------- Adjustments Met-Pro Flex-Kleen Increase/ Corporation Corporation Total Notes Decrease Consolidated ----------------------------------------------------------------------------- Net sales $62,387,870 $19,396,000 $81,783,870 $81,783,870 Cost of goods sold 39,802,965 12,969,000 52,771,965 52,849,965 (S) $25,000 (T) 25,000 (U) 3,000 (V) 25,000 - ------------------------------------------------------------------------------------------------------------------------------------ Gross profit 22,584,905 6,427,000 29,011,905 (78,000) 28,933,905 Operating expense: Selling 5,331,954 1,793,417 7,125,371 (T) 10,000 7,146,371 (U) 1,000 (V) 10,000 General and administrative 6,557,355 2,205,583 8,762,938 (R) 307,602 9,887,510 (N) 10,000 (O) 13,000 (Q) 681,970 (T) 15,000 (U) 2,000 (V) 15,000 (W) (120,000) (X) 200,000 ----------------------------------------------------------------------------- 11,889,309 3,999,000 15,888,309 1,145,572 17,033,881 ----------------------------------------------------------------------------- Income from operations 10,695,596 2,428,000 13,123,596 (1,223,572) 11,900,024 Other income/(expense) 970,767 (134,000) 836,767 (P) (180,000) 656,767 ----------------------------------------------------------------------------- Income before taxes 11,666,363 2,294,000 13,960,363 (1,403,572) 12,556,791 Provision for taxes 4,549,882 793,000 5,342,882 (Y) (445,734) 4,897,148 ----------------------------------------------------------------------------- Net income $7,116,481 $1,501,000 $8,617,481 ($957,838) $7,659,643 ============================================================================= Earnings per share, basic $1.01 $1.09 Earnings per share, diluted $1.00 $1.07 Outstanding shares, basic 7,053,071 7,053,071 Outstanding shares, diluted 7,144,931 7,144,931
-8- MET-PRO CORPORATION Notes to Unaudited Pro Forma Consolidated Financial Information For the Year Ended January 31, 1998 NOTE 1: The unaudited pro forma consolidated condensed balance sheet is based on the individual balance sheets of Met-Pro Corporation for the year ended January 31, 1998 and Flex-Kleen for the year ended October 31, 1997, to reflect the acquisition of all of the material assets, subject to ordinary business liabilities, of Flex-Kleen by Met-Pro Corporation (which took place on October 29, 1998) as if it was completed on January 31, 1998 after giving effect to pro forma adjustments to reflect the following: Met-Pro Corporation paid approximately $15,000,000 for the assets of Flex-Kleen, in the form of cash. As part of the transaction, Met-Pro Corporation entered into a five (5) year non-compete transaction with the stockholders of Flex-Kleen for which it was paid $50,000 (A). Total cash required at settlement amounted to $15,000,000. Met-Pro Corporation financed this transaction with a bank on an unsecured basis. The bank financing, in the amount of $12,000,000 (B), is comprised of a ten-year term loan with a fixed interest rate swap of 5.98% with payments of principal and interest due on a quarterly basis beginning January 31, 1999. The balance of $3,000,000 was paid from cash on hand of the Registrant (C). Met-Pro Corporation incurred $367,221 (D) in costs associated with the transaction, which was funded internally. For purposes of the unaudited pro forma condensed financial statements, Flex-Kleen's furniture and fixtures were written up by $130,000 (E) to estimated fair value. As a result of this acquisition, Met-Pro Corporation has increased the costs in excess of net assets of businesses acquired by $12,304,068 (F) as of January 31, 1998. The following adjustments resulted from the Asset Purchase Agreement: (G) Represents the elimination of Sellers' intercompany accounts receivable and accounts payable in accordance with Section 1.1.2(d) and 1.4.2(d) of the Asset Purchase Agreement (the "Agreement"). (H) Represents cash overdrafts that are excluded in accordance with Section 1.4.2(c) of the Agreement. (I) Represents carried-over vacation for periods prior to January 1, 1998 excluded in accordance with Section 1.4.2(g)(B) of the Agreement. (J) Represents accrued taxes ($49,000) and defined benefit retirement costs ($7,000) excluded in accordance with Sections 1.4.2(a) and 1.4.2(g)(A) of the Agreement, respectively. (K) Represents accrued federal, state and Canadian taxes that are excluded in accordance with Section 1.4.2(a) of the Agreement. (L) Elimination of Sellers' common stock, additional paid in capital and cumulative translation adjustment. (M) Represents the adjustment to arrive at the "Pro Forma Net Equity" as defined in Section 1.3.2(a) of the Agreement. -9- MET-PRO CORPORATION Notes to Unaudited Pro Forma Combined Financial Information For the Year Ended January 31, 1998 NOTE 2: The unaudited pro forma consolidated condensed statement of operations is based on the individual statements of Met-Pro Corporation for the year ended January 31, 1998 and Flex-Kleen for the year ended October 31, 1997, after giving effect to the pro forma adjustments necessary to reflect the acquisition described in Note 1, as if it had taken place on February 1, 1997. The pro forma adjustments are as follows: (N) Amortization of covenant not to compete of $10,000. (O) Additional depreciation on the write-up of Flex-Kleen's furniture and fixtures amounting to $13,000. (P) Reduction in interest income by $180,000 due to the cash outlay by Met-Pro Corporation to acquire Flex-Kleen's assets. (Q) Interest expense increase of $681,970 as a result of bank financing of $12,000,000. (R) Amortization of costs in excess of net assets of businesses acquired over forty (40) years amounting to $307,602. (S) Insurance expense increase of $25,000 due to increased liability and property coverage. (T) Pension expense increase of $50,000 due to the addition of new employees to our Company's Defined Benefit Plan. (U) Administrative expense for the maintenance of existing 401-(k) plan of $6,000. (V) Employee benefit expense increase of $50,000 for other various employee benefits. (W) Elimination of Flex-Kleen intercompany charges from Research-Cottrell of $120,000. (X) Estimated additional Met-Pro Corporation out of pocket costs of $200,000. (Y) Tax effect of the above adjustments to result in an assumed effective consolidated income tax rate of 39%. -10- SIGNATURES Pursuant to the requirements of the securities exchange Act of 1934, the registrant has duly caused this Amendment No. 1 to its Current Report on Form 8-K to be signed on its behalf by the undersigned thereunto duly authorized. Date: January 12, 1999 Met-Pro Corporation By: /s/ William L. Kacin -------------------------------------- William L. Kacin, President -11- -----END PRIVACY-ENHANCED MESSAGE-----