-----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, KCQkpnFnsRPmjrdrkfLUwuRNaRc5STSI9pQ+diSeKcER2K5kDovJWGSb98WCXS1j oZ/IIG7UPjF4oK9opy/6Hg== 0000856386-97-000021.txt : 19971217 0000856386-97-000021.hdr.sgml : 19971217 ACCESSION NUMBER: 0000856386-97-000021 CONFORMED SUBMISSION TYPE: 8-K/A PUBLIC DOCUMENT COUNT: 2 CONFORMED PERIOD OF REPORT: 19971002 ITEM INFORMATION: FILED AS OF DATE: 19971216 SROS: NASD FILER: COMPANY DATA: COMPANY CONFORMED NAME: GEHL CO CENTRAL INDEX KEY: 0000856386 STANDARD INDUSTRIAL CLASSIFICATION: FARM MACHINERY & EQUIPMENT [3523] IRS NUMBER: 390300430 STATE OF INCORPORATION: WI FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 8-K/A SEC ACT: SEC FILE NUMBER: 000-18110 FILM NUMBER: 97738932 BUSINESS ADDRESS: STREET 1: 143 WATER STREET CITY: WEST BEND STATE: WI ZIP: 53095 BUSINESS PHONE: 4143349461 MAIL ADDRESS: STREET 1: 143 WATER STREET CITY: WEST BEND STATE: WI ZIP: 53095 8-K/A 1 FORM 8-K/A SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 ________________________ FORM 8-K/A AMENDMENT TO 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 2, 1997 _____________Gehl Company________________ (Exact name of registrant as specified in its charter) Wisconsin 0-18110 39-0300430 (State or other (Commission File (IRS Employer jurisdiction of Number) Identification No.) incorporation) 143 Water Street, West Bend, Wisconsin 53095 (Address of principal executive offices, including zip code) (414) 334-9461 (Registrant s telephone number) The undersigned registrant hereby amends the following item of its Current Report on Form 8-K filed October 17, 1997. ITEM 7. Financial Statements, Pro Forma Financial Information and Exhibits (a) Financial Statements of Business Acquired. The following financial statements of Brunel America, Inc. are attached hereto as Appendix A: 1. Report of Independent Accountants 2. Consolidated Balance Sheet at June 30, 1997 3. Consolidated Statement of Income for the year ended June 30, 1997 4. Consolidated Statement of Stockholder's Equity for the year ended June 30, 1997 5. Consolidated Statement of Cash Flows for the year ended June 30, 1997 6. Notes to Consolidated Financial Statements (b) Pro Forma Financial Information. The following combined pro forma financial information is attached hereto as Appendix B: 1. Unaudited Pro Forma Combined Statement of Operations for the year ended December 31, 1996 2. Unaudited Pro Forma Combined Statement of Operations for the six months ended June 28, 1997 3. Unaudited Pro Forma Combined Balance Sheet at June 28, 1997 4. Notes to Unaudited Pro Forma Combined Financial Statements (c) Exhibits. The following exhibits are being filed herewith: (2) Stock Purchase Agreement, dated as of September 12, 1997, between Gehl Company and Brunel Holdings, plc. Schedules to the Stock Purchase Agreement have not been filed herewith. Gehl agrees to furnish a copy of any omitted schedule to the Commission upon request. * (4.1) Amendment to Amended and Restated Loan and Security Agreement by and between Deutsche Financial Services Corporation, f/k/a ITT Commercial Finance Corp., Deutsche Financial Services Canada Corporation and Gehl Company and its subsidiaries, dated October 2, 1997. * (23) Consent of Price Waterhouse LLP ______________________________________ * The schedules/exhibits to this document are not being filed herewith. They were previously filed in the Form 8-K originally filed on October 17, 1997. SIGNATURES Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on behalf by the undersigned hereunto duly authorized. GEHL COMPANY By: /s/William D. Gehl William D. Gehl Chairman of the Board, President And Chief Executive Officer DATE: December 16, 1997 BRUNEL AMERICA, INC. (A wholly-owned subsidiary of Brunel Holdings plc) CONSOLIDATED FINANCIAL STATEMENTS JUNE 30, 1997 Report of Independent Accountants November 7, 1997 To the Board of Directors and Stockholder of Brunel America, Inc. In our opinion, the accompanying consolidated balance sheet and the related consolidated statements of income, of stockholder's equity and of cash flows present fairly, in all material respects, the financial position of Brunel America, Inc. and its subsidiaries at June 30, 1997, and the results of their operations and their cash flows for the year then ended in conformity with generally accepted accounting principles. These financial statements are the responsibility of the Company's management; our responsibility is to express an opinion on these financial statements based on our audit. We conducted our audit of these statements in accordance with generally accepted auditing standards which require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements, assessing the accounting principles used and significant estimates made by management, and evaluating the overall financial statement presentation. We believe that our audit provides a reasonable basis for the opinion expressed above. PRICE WATERHOUSE LLP Minneapolis, Minnesota BRUNEL AMERICA, INC. CONSOLIDATED BALANCE SHEET JUNE 30, 1997 ASSETS Current assets: Cash and equivalents $3,136,259 Accounts receivable, net of allowance of $162,000 10,556,159 Due from Parent and other affiliates 3,765,032 Inventories 4,589,145 Prepaid expenses 94,102 ---------- Total current assets 22,140,697 Property, plant and equipment: Land, buildings and improvements 907,530 Machinery and equipment 4,877,309 Furniture and fixtures 745,080 ---------- 6,529,919 Less accumulated depreciation (2,947,348) ---------- Net property, plant and equipment 3,582,571 Notes receivable from Parent 456,000 Deferred tax asset 1,015,429 Net assets of discontinued operations 1,120,112 Other assets 22,895 ----------- $ 28,337,704 =========== LIABILITIES AND STOCKHOLDER'S EQUITY Current liabilities: Current installments of capital lease obligations $ 41,887 Current portion of long-term debt 331,159 Accounts payable 7,387,720 Accrued expenses: Wages, commissions and profit sharing 678,427 Product warranties 642,000 Other 1,267,956 Deferred income taxes 153,123 ---------- Total current liabilities 10,502,272 Long-term liabilities: Capital lease obligations 28,236 Long-term debt 1,124,810 Notes payable to affiliates 6,760,000 ---------- Total long-term liabilities 7,913,046 ---------- Total liabilities 18,415,318 Commitments and contingent liabilities Stockholder's equity: Common stock - par value $ 1.00 per share; 3,000 shares authorized; 1,529 shares issued and outstanding 1,529 Paid-in capital 35,198,471 Accumulated deficit (25,277,614) ----------- Total stockholder's equity 9,922,386 ----------- $ 28,337,704 ============ See notes to consolidated financial statements. BRUNEL AMERICA, INC. CONSOLIDATED STATEMENT OF INCOME YEAR ENDED JUNE 30, 1997 Net sales $ 57,493,530 Cost of sales 43,973,284 ------------ Gross profit 13,520,246 ------------ Selling, general and administrative expenses 9,548,377 ------------ Income from operations 3,971,869 ------------ Other income (expense): Discount on sale of accounts receivable (1,012,333) Other interest expense (964,883) Management fee paid to affiliate (240,000) Other income 123,562 ------------ Total other expense (2,093,654) ------------ Income from continuing operations before income taxes 1,878,215 Provision for income taxes attributable to continuing operations (609,915) ------------ Income from continuing operations 1,268,300 ------------ Discontinued operations: Loss from discontinued operations, net of income taxes (including $316,579 related to income taxes on disposition of subsidiaries) (123,561) ------------ Net income $ 1,144,739 ============ See notes to consolidated financial statements. BRUNEL AMERICA, INC. CONSOLIDATED STATEMENT OF STOCKHOLDER'S EQUITY YEAR ENDED JUNE 30, 1997 Common Paid-in Accumulated Stock Capital Deficit Total Balance at June 30, 1996 $ 1,529 $ 35,198,471 $(25,127,768) $10,072,232 Dividend to Parent from continuing operations (1,174,585) (1,174,585) Dividend to Parent from discontinued operations (120,000) (120,000) Net income for the year 1,144,739 1,144,739 -------- ------------- ------------ ---------- Balance at June 30, 1997 $ 1,529 $ 35,198,471 $(25,277,614) $9,922,386 ======== ============= ============ ========== See notes to consolidated financial statements. BRUNEL AMERICA, INC. CONSOLIDATED STATEMENT OF CASH FLOWS YEAR ENDED JUNE 30, 1997 Cash flows from operating activities: Net income $ 1,144,739 Adjustments to reconcile net income to net cash provided by operating activities: Depreciation and amortization 706,615 Deferred income taxes 609,915 Change in the net assets of discontinued operations 95,241 Changes in current assets and liabilities: Accounts receivable 808,251 Inventories (43,204) Prepaid expenses 19,595 Due from affiliate (818,777) Other current assets 2,564 Accounts payable 400,349 Accrued expenses 334,170 Affiliated payables 6,148 ------------ Total adjustments 2,120,867 ------------ Net cash provided by operating activities 3,265,606 ------------ Cash flows from investing activities: Additions to property and equipment (866,737) ------------ Net cash used in investing activities (866,737) ------------ Cash flows from financing activities: Proceeds from notes payable 176,550 Payments on notes payable (304,976) Affiliated notes payable 700,000 Capital lease obligations (38,417) Dividend paid to Parent (1,294,585) ------------ Net cash used in financing activities (761,428) ------------ Net increase in cash and equivalents 1,637,441 Cash and equivalents at beginning of year 1,498,818 ------------ Cash and equivalents at end of year $ 3,136,259 ============ Supplemental disclosures of cash flow information: Cash paid during the year for: Interest $ 987,678 Income taxes $ 18,936 See notes to consolidated financial statements BRUNEL AMERICA, INC. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS NOTE 1 - ORGANIZATION AND BASIS OF PRESENTATION Brunel America, Inc. (the Company) is a wholly-owned subsidiary of Brunel Holdings plc (the Parent). The Company's primary operations consist of the manufacture and distribution of skid steer loaders through its wholly-owned subsidiary Mustang America, Inc. (Mustang). The Company's other subsidiaries have been engaged in other lines of business primarily related to the web processing industry. Pursuant to a Stock Purchase Agreement dated September 12, 1997, Brunel Holdings plc entered into an agreement to sell all outstanding common stock of the Company to Gehl Company (Gehl). At the date of this transaction, the common stock of all non-Mustang subsidiaries of the Company was distributed to Brunel Holdings plc. In accordance with Emerging Issues Task Force Statement 95-18 (EITF 95-18), the assets and results of operations of all non-Mustang subsidiaries of the Company have been reported as discontinued operations. NOTE 2 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES Use of Estimates The preparation of financial statements in conformity with generally accepted accounting principles requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities at the date of the financial statements and the reported amounts of revenue and expenses during the reporting period. Actual results could differ from those estimates. Principles of Consolidation The consolidated financial statements include the accounts of Brunel America, Inc. and its wholly-owned subsidiaries. All significant intercompany accounts and transactions have been eliminated in consolidation. Fair Value of Financial Instruments The Company's financial instruments consist primarily of cash, trade receivables and payables for which the current carrying amounts approximate fair market value. Additionally, the borrowing rates currently available to the Company approximate current rates for debt agreements with similar terms and average maturities. Revenue Recognition Sales of skid steers and replacement parts by Mustang are generally unconditional sales that are recorded once product is shipped and invoiced to independently owned and operated dealers. Accounts receivable from dealers have been classified as current assets in accordance with industry practice. Credit may be granted to a dealer for a period of up to twelve months; credit extended beyond six months is generally interest bearing. Mustang is a secured creditor and holds a first priority secured interest in a majority of the equipment until the sale of the related equipment by the dealer. Payment is required upon the sale of such equipment by the dealer. Accounts receivable also includes $446,991 of notes receivable financed by Mustang through its retail financing program. Cash Equivalents The Company considers cash on hand and demand deposits to be cash equivalents. Concentrations of Credit Risk Financial instruments which potentially subject the Company to credit risk consist primarily of accounts receivable. The Company grants credit to customers in the ordinary course of business. No single dealer, customer or region represents a significant concentration of credit risk. Inventories The Company values its inventories at the lower of cost or market. Inventory cost is determined by the last-in, first-out (LIFO) method for manufactured inventory and service parts. Property, Plant and Equipment Property, plant and equipment is stated at cost or, in the case of capitalized leases, at the present value of the future lease payments. Depreciation and amortization are computed by the straight-line method over the estimated useful lives of the assets and, in the case of capitalized leases, the shorter of the lease term or estimated useful life of the asset. Maintenance and repair costs are expensed as incurred. Depreciation and amortization are computed using the following estimated useful lives: Useful Lives Buildings and improvements 5 to 25 years Machinery and equipment 3 to 10 years Furniture and fixtures 3 to 5 years Product Warranties Under the Company's product warranty program, the Company provides a warranty of one year under certain conditions. Costs associated with this program are recorded at the date of the related sale and determined on the basis of estimated future costs. Income Taxes The Company accounts for income taxes in accordance with Financial Accounting Standard No. 109 (FAS 109), "Accounting for Income Taxes." Under FAS 109, deferred income taxes are recognized based on the difference between financial statement amounts and the tax basis of assets and liabilities. NOTE 3 - INVENTORIES The Company has the following inventories at June 30, 1997: Finished machines - manufactured $ 1,514,795 Work-in-process 110,217 Raw materials 2,635,055 Service parts 1,147,667 ----------- 5,407,734 LIFO reserve (818,589) ----------- $ 4,589,145 =========== NOTE 4 - NOTES PAYABLE Mustang has a $5,000,000 conditional revolving line of credit with a financial institution with interest payable monthly at the prime rate plus 1%. The line is secured by Mustang's inventory, and borrowings are due on demand. The agreement includes certain financial covenants with which Mustang has complied as of June 30, 1997. The agreement expires on December 31, 1999. There were no borrowings outstanding under this credit facility at June 30, 1997. NOTE 5 - LEASES Mustang is obligated under several noncancellable capital leases that expire through various dates to 1999. At June 30, 1997, the amount of leased capital equipment is as follows: Equipment cost $108,540 Less accumulated amortization (38,417) -------- $ 70,123 ======== Mustang also is obligated under operating leases for certain equipment expiring through 2002. Future minimum lease payments under capital and operating leases at June 30, 1997 are as follows: Operating Capital Leases Leases Year Ending June 30, 1998 $ 118,196 $46,332 1999 89,339 29,118 2000 63,209 2001 45,950 2002 15,558 ----------- ------- Total minimum lease payments $ 332,252 75,450 Less amount representing interest =========== (5,327) ------- Present value of net minimum capital lease payments 70,123 Less current installments (41,887) ------- $28,236 ======= Rental expense for the year ended June 30, 1997 was $211,113. NOTE 6 - LONG-TERM DEBT Long-term debt consists of notes payable of $1,455,969 by Mustang to financial institutions. The notes bear interest from 7.75% to 8.75% and are due in equal monthly installments through July 1, 2001. The notes are secured by various equipment of Mustang. The notes include certain financial covenants with which Mustang has complied at June 30, 1997. Maturities of long-term debt are as follows: 1998 $ 467,659 1999 467,659 2000 467,659 2001 232,542 2002 44,749 Thereafter 7,180 ---------- 1,687,448 Less amount representing interest (231,479) ---------- 1,455,969 Less current portion (331,159) ---------- $ 1,124,810 ========== NOTE 7 - RELATED-PARTY TRANSACTIONS AND BALANCES A summary of notes payable, notes receivable and due from affiliates at June 30, 1997 is as follows: Note receivable from the Parent, payable on demand. Interest at LIBOR plus 1.875% (5.69% at June 30, 1997). $ 456,000 =========== Due from Parent and other affiliates: Brunel Holdings plc (Parent) $ 822,739 Receivable from operations classified as discontinued operations Cameron Converting Inc. 2,442,293 Spooner Inc. 500,000 ----------- $ 3,765,032 =========== Note payable to the Parent, payable on demand. Interest at prime rate plus 2% (8.5% at June 30, 1997). $ 6,060,000 Note payable with the Parent, payable on demand. No stated interest rate. 700,000 ----------- Total affiliated notes payable $ 6,760,000 =========== The Company paid $240,000 in management fees to the Parent during the year ended June 30, 1997. NOTE 8 - DISCONTINUED OPERATIONS Effective October 1, 1997, the Parent sold all outstanding shares of common stock of the Company to Gehl. Immediately prior to the sale, the Company spun-off all the common stock of non-Mustang subsidiaries engaged in the web processing industry, which consisted primarily of three wholly-owned subsidiaries, Wadkin North America, Spooner Industries, Inc. and Cameron Converting, Inc., to Brunel Holdings plc (Parent). In accordance with APB Opinion No. 30, "Reporting the Results of Operations," and EITF 95-18, all non-Mustang subsidiaries have been reported as discontinued operations. At June 30, 1997, assets of discontinued operations are comprised as follows: Cash $ 733,995 Accounts receivable 1,525,267 Due from Parent and other affiliates 1,581,000 Inventory 2,895,882 Property, plant and equipment, net 415,420 Goodwill, net 1,217,000 Other assets 529,507 Accounts payable and accrued liabilities (1,817,959) Due to affiliates (including notes payable) (5,880,000) Other liabilities (80,000) ----------- Net assets of discontinued operations $ 1,120,112 =========== Net assets of discontinued operations are presented with consideration of $1,200,000 of intercompany indebtedness which was contributed to capital of these subsidiaries in the period subsequent to June 30, 1997. Summarized income statement information relating to discontinued operations for the year ended June 30, 1997 is as follows: Sales $ 13,224,727 Operating income $ 415,420 Net loss $ (123,561) Results of operations in the period from July 1, 1997 to the date of disposal are not material. Income taxes resulting from the disposal of these operations are included in the tax provision at June 30, 1997. NOTE 9 - INCOME TAXES The Company files a consolidated federal income tax return. The provision for income taxes was calculated on a consolidated level and allocated to income before taxes from continuing operations and income before taxes from discontinued operations as follows: Continuing Discontinued Operations Operations Total Income before taxes $1,878,215 $ 236,193 $2,114,408 Income tax expense (609,915) (359,754) (969,669) ---------- -------- ---------- Net income (loss) $1,268,300 $(123,561) $1,144,739 ========== ========= ========== The provision for income taxes differs from the amounts computed by applying the U.S. federal income tax rate of 34% to income before income taxes as a result of the following at June 30, 1997: Continuing Discontinued Operations Operations Total Taxes provided as U.S. statutory rate $ 639,093 $80,306 $719,399 State tax expense, net of federal benefit 41,000 41,000 FSC benefit (82,000) (82,000) Non-deductible meals and entertainment 11,822 7,000 18,822 Capital gains tax incurred upon spin-off of discontinued operations 316,579 316,579 Other, net (44,131) (44,131) ----------- -------- ---------- Provision for income taxes $ 609,915 $359,754 $ 969,669 =========== ======== ========= The approximate effect of temporary differences and carryforwards that give rise to deferred tax assets and liabilities is as follows at June 30, 1997: Tax loss carryforward $1,192,429 Plant and equipment (177,000) ---------- Non-current deferred tax asset $1,015,429 ========== Inventory $ (587,000) Accounts receivable 96,000 Accrued expenses 456,000 Other, net (118,125) ---------- Current deferred tax liability $ (153,125) ========== Net assets of discontinued operations includes approximately $374,136 of net deferred tax assets (included in other assets). Pursuant to a provision of the purchase agreement with Gehl, the Parent has agreed that it will consent to any permissible tax election that would allow the Company to retain the benefit of any net operating losses which have been allocated to discontinued operations. As no such election has yet been made by Gehl, all related deferred tax benefits related to discontinued operations have been included as assets of discontinued operations. In accordance with terms of the purchase agreement, Gehl has up to six months after closing to make the tax elections related to the carryforwards attributable to the discontinued operations. NOTE 10 - PROFIT SHARING PLAN Mustang has a 401(k) profit sharing plan and trust. Under provisions of the plan, Mustang contributes to the trust a discretionary matching contribution equal to 50% of the employees' contribution up to 6% of qualifying salary. Mustang may also contribute additional amounts to the plan at the discretion of the board of directors. All employees of Mustang are eligible and become participants upon attaining age 21 and completing one year of service, as defined, except those employees whose employment is governed by a collective bargaining agreement. Mustang's contribution for the year ended June 30, 1997 was $224,000. NOTE 11 - COMMITMENTS AND CONTINGENCIES Mustang assists in providing retail financing through its dealers in the form of conditional sales contracts and lease purchase agreements. Mustang sold $9,635,023 of contracts and lease purchase agreements during the years ended June 30, 1997 to various third parties with recourse limited to $1 million per year. The assigned receivables are collateralized by Uniform Commercial Code filings on the related equipment. The outstanding receivable on such transactions was $6,452,398 at June 30, 1997. The agreements also contain provisions for recourse to the selling dealer. Mustang entered into an agreement in fiscal 1996 to sell a specified amount of accounts receivable to a financial institution. The accounts receivable were sold with recourse and are collateralized by the related equipment. Recourse is limited to $1,000,000 each calendar year. Mustang sold $56,793,234 of accounts receivable and notes during the year ended June 30, 1997. The net outstanding receivable at June 30, 1997 related to sales of account and notes receivable during the year was $12,423,974. UNAUDITED PRO FORMA COMBINED FINANCIAL STATEMENTS The following unaudited pro forma combined financial statements give effect to the acquisition by Gehl Company (the "Company") of Brunel America, Inc. ("Brunel") in a transaction whereby the Company acquired all of the issued and outstanding stock of Brunel on October 2, 1997. The Unaudited Pro Forma Combined Balance Sheet is based on the individual balance sheets of the Company (as of June 28, 1997) and Brunel (as of June 30, 1997) and has been prepared to reflect the acquisition by the Company of Brunel as of June 28, 1997. The Unaudited Pro Forma Combined Statement of Operations is based on the individual statements of operations of the Company and Brunel as if the acquisition had been consummated on January 1, 1996. These unaudited pro forma financial statements are presented for informational purposes only and should be read in conjunction with the historical financial statements and notes thereto included in the Company's 1996 Annual Report. The unaudited pro forma data is not necessarily indicative of the operating results or financial position that would have occurred had the acquisition been consummated on the dates indicated, nor is such data necessarily indicative of future operating results or financial position. There is no assurance that similar results will be achieved in the future. The acquisition will be accounted for by the Company as a purchase whereby the basis of accounting for Brunel's assets will be based upon their fair values at the date of the acquisition. Pro forma adjustments, including the preliminary purchase price allocation resulting from the acquisition as described in Note 1 of the Notes to Unaudited Pro Forma Combined Financial Statements, represent the Company's initial determination of these adjustments and are based upon preliminary information, assumptions and operating decisions which the Company considers reasonable under the circumstances. UNAUDITED PRO FORMA COMBINED STATEMENT OF OPERATIONS YEAR ENDED DECEMBER 31, 1996 (IN THOUSANDS, EXCEPT PER SHARE DATA)
BRUNEL AMERICA, PRO FORMA PRO FORMA GEHL INC. ADJUSTMENTS COMBINED STATEMENT OF OPERATIONS DATA: Net sales $159,662 $55,759 ($1,297)(a) $214,124 Cost of goods sold 111,902 43,218 215 (b) 155,335 -------- ------- ------- -------- Gross profit 47,760 12,541 (1,512) 58,789 Selling, general and administrative expenses 32,213 9,432 (744)(c) 40,901 -------- ------- ------- -------- Income from operations 15,547 3,109 (768) 17,888 Interest expense (3,443) (1,329) (1,733)(d) (6,505) Interest income 1,542 - - 1,542 Management fee - (245) 245 (e) - Other income (expense), net (1,152) (360) 207 (f) (1,305) -------- ------- ------- -------- Income from continuing operations before income taxes 12,494 1,175 (2,049) 11,620 Provision for income taxes 2,929 382 (597)(g) 2,714 -------- ------- ------- -------- Income from continuing operations $9,565 $793 ($1,452) $8,906 ======== ======= ======= ======== Income per common share $1.54 $1.43 ======== ======== Weighted average common shares and common equivalent shares outstanding 6,227 6,227 ======== ========
See Accompanying Notes to Unaudited Pro Forma Combined Financial Statements UNAUDITED PRO FORMA COMBINED STATEMENT OF OPERATIONS SIX MONTHS ENDED JUNE 28, 1997 (IN THOUSANDS, EXCEPT PER SHARE DATA)
BRUNEL AMERICA, PRO FORMA PRO FORMA GEHL INC. ADJUSTMENTS COMBINED STATEMENT OF OPERATIONS DATA: Net sales $95,267 $32,865 ($957)(a) $127,175 Cost of goods sold 66,737 25,372 108 (b) 92,217 ------- ------- ------ -------- Gross profit 28,530 7,493 (1,065) 34,958 Selling, general and administrative expenses 17,783 4,986 (640)(c) 22,129 ------- ------- ------- -------- Income from operations 10,747 2,507 (425) 12,829 Interest expense (927) (470) (909)(d) (2,306) Interest income 661 - - 661 Management fee - (120) 120 (e) - Other income (expense), net (459) (468) 89 (f) (838) ------- ------- ------- -------- Income from continuing operations before income taxes 10,022 1,449 (1,125) 10,346 Provision for income taxes 3,608 471 (337)(g) 3,742 ------- ------- ------- -------- Income from continuing operations $6,414 $978 ($788) $6,604 ======= ======= ======= ======== Income per common share $1.00 $1.03 ======= ======== Weighted average common shares and common equivalent shares outstanding 6,442 6,442 ======= ========
See Accompanying Notes to Unaudited Pro Forma Combined Financial Statements UNAUDITED PRO FORMA COMBINED BALANCE SHEET JUNE 28, 1997 (IN THOUSANDS)
BRUNEL AMERICA, PRO FORMA PRO FORMA GEHL INC. ADJUSTMENTS COMBINED ASSETS: Cash $6,576 $3,136 - $9,712 Accounts receivable - net 64,317 10,556 (647)(h) 74,226 Finance contracts receivable - net 6,918 - 195 (a) 7,113 Inventories 17,579 4,589 719 (h) 22,887 Prepaid income taxes 4,385 - - 4,385 Due from Parent and other affiliate - 3,765 (3,765)(i) 0 Prepaid expenses and other assets 1,391 94 - 1,485 ------- ------ ------- ------- Total current assets 101,166 22,140 (3,498) 119,808 Property, plant and equipment - net 23,521 3,583 3,491 (h) 30,595 Finance contracts receivable net, non-current 4,101 - 252 (a) 4,353 Note receivable from Parent - 456 (456)(i) 0 Deferred tax assets - 1,016 (1,016)(a) 0 Net assets of discontinued operations - 1,120 (1,120)(k) 0 Other assets 5,424 23 15,307 (j) 20,754 -------- ------- ------- ------- Total assets $134,212 $28,338 $12,960 $175,510 ======== ======= ======= ======== LIABILITIES: Current portion of long-term debt obligations $186 $331 - $517 Current portion of capital lease obligations - 42 (42)(a) 0 Accounts payable 18,917 7,388 - 26,305 Deferred income taxes - 153 1,208 (h) 1,361 Accrued liabilities 19,781 2,589 1,792 (h) 24,162 -------- ------- ------- ------- Total current liabilities 38,884 10,503 2,958 52,345 Line of credit facility 11,344 - 27,700 (l) 39,044 Long-term debt obligations 8,645 1,125 - 9,770 Deferred income taxes 2,369 - (1,016)(a) 1,353 Notes payable to affiliates - 6,760 (6,760)(i) 0 Other long-term liabilities 1,678 28 - 1,706 ------- ------- ------- ------- Total long-term liabilities 24,036 7,913 19,924 51,873 Common stock 620 2 (2) 620 Preferred stock - - - 0 Capital in excess of par 26,197 35,198 (35,198) 26,197 Retained earnings (deficit) 44,475 (25,278) 25,278 44,475 ------- ------- ------- ------- Total shareholders' equity 71,292 9,922 (9,922)(j) 71,292 ------- ------- ------- ------- Total liabilities and shareholders' equity $134,212 $28,338 $12,960 $175,510 ======== ======= ======= ========
See Accompanying Notes to Unaudited Pro Forma Combined Financial Statements NOTES TO UNAUDITED PRO FORMA COMBINED FINANCIAL STATEMENTS (DOLLARS IN THOUSANDS) The unaudited pro forma financial statements give effect to the acquisition by Gehl Company ("Company") of Brunel America, Inc. ("Brunel") in a transaction to be accounted for as a purchase. The Company's Unaudited Pro Forma Combined Financial Statements assume the Brunel acquisition occurred (1) as of January 1, 1996 for purposes of the Unaudited Pro Forma Combined Statements of Operations and (2) on June 28, 1997 for purposes of the Unaudited Pro Forma Combined Balance Sheet. Adjustments to the historical financial statements have been made and are described below: a. Reclassification of amounts to conform to the Company's historical presentation. b. Additional depreciation resulting from the increased basis of machinery and equipment and buildings acquired based on estimated useful lives of 7 and 25 years, respectively. c. The pro forma adjustment to selling, general and administrative expenses assumes: Year Ended Six Months Ended December 31, 1996 June 28, 1997 Amortization of goodwill over 30 years $ 478 $ 239 Amortization of noncompetition agreement over 5 years 200 100 Reclassification of amounts to conform to the Company's presentation (1,001) (781) Executive salaries terminated on date of acquisition (421) (198) -------- -------- $ (744) $ (640) ======== ========= On the date of acquisition, three executives of Brunel were terminated. The costs (salaries and respective fringes) are considered nonrecurring by the Company as the executives will not be replaced. d. The pro forma adjustment to interest expense assumes: Year Ended Six Months Ended December 31, 1996 June 28, 1997 Annual interest charges resulting from the acquisition $ (2,105) $ (1,052) Interest rate benefit 90 56 Reclassification of amounts to conform to the Company's presentation 282 87 ---------- ------------ $ (1,733) $ (909) ========== ============ Interest expense is calculated assuming a rate of 7.6% at the date of the acquisition. A 1/8 percent increase (or decrease) in such rate would increase (or decrease) annual interest expense by $35. The interest rate benefit relates to the difference between interest rates which the Company would have paid on outside debt and that charged to Brunel from Brunel Holdings plc ("Parent Company") on intercompany debt. e. Reduction of intercompany charges from Parent Company for which no specific services were provided. f. The pro forma adjustment to other income (expense), net assumes: Year Ended Six Months Ended December 31, 1996 June 28, 1997 Divestiture costs prior to acquisition $ 193 $ - Reclassification of amounts to conform to the Company's presentation 14 89 ------- -------- $ 207 $ 89 ======= ======== Divestiture costs prior to acquisition relates to nonrecurring costs incurred by Brunel in connection with a potential divestiture prior to the acquisition by the Company. g. Reduction of income taxes relating to the foregoing adjustments. h. Adjustments to net assets of Brunel to reflect fair value, purchase accounting adjustments, related tax effects and reclassification of amounts to conform to the Company's historical presentation. Amounts reclassified include finance accounts receivable - net ($447) and current portion of capital lease obligations ($42). i. Capitalization of net balance of debt due to Parent Company. j. The excess of cost over fair value of net assets acquired resulting from the preliminary purchase price allocation is assumed to be as follows: Pro forma purchase price -- Stated amount in Stock Purchase Agreement $ 27,700 -------------- Pro forma historical net book value of assets acquired - Book value per historical financial statements 9,922 Capitalization of net balance of debt due to Parent Company as described above 2,539 Net assets of discontinued operations as described below (1,120) -------------- Total pro forma historical net book value of assets acquired 11,341 -------------- Excess of purchase price over net book value of assets acquired 16,359 Allocated to: Accounts receivable 200 Inventories (719) Property plant and equipment (3,491) Intangible assets (non-competition agreement) (1,000) Deferred tax liabilities 1,208 Other liabilities 1,750 -------------- Remaining excess of cost over fair value of net assets acquired (goodwill) $ 14,307 ============== The foregoing preliminary purchase price allocation is based on available information and certain assumptions the Company considers reasonable. The final purchase price allocation will be based upon a determination of the fair value of the net assets acquired at the date of the acquisition. The final purchase price allocation may differ from the preliminary allocation. k. Under the terms of the Stock Purchase Agreement, Brunel agreed to transfer all of its right, title and interest of certain subsidiaries to Parent Company prior to the date of acquisition. As a result, the corresponding net assets of such subsidiaries have been reported as discontinued operations at June 28, 1997 ($1,120). Accordingly, the pro forma adjustment reflects the elimination of net assets of discontinued operations. l. Borrowings under the Company's credit facility which reflects the cash purchase price as stated in the Stock Purchase Agreement. GEHL COMPANY Exhibit Index to Amendment to Current Report on form 8-K Dated October 2, 1997 Exhibit Number (2) Stock Purchase Agreement, dated as of September 12, 1997, between Gehl Company and Brunel Holdings, plc. Schedules to the Stock Purchase Agreement have not been filed herewith. Gehl agrees to furnish a copy of any omitted schedule to the Commission upon request. * (4.1) Amendment to Amended and Restated Loan and Security Agreement by and between Deutsche Financial Services Corporation, f/k/a ITT Commercial Finance Corp., Deutsche Financial Services Canada Corporation and Gehl Company and its subsidiaries, dated October 2, 1997. * (23) Consent of Price Waterhouse LLP - --------------------------------------- * The schedules/exhibits to this document are not being filed herewith. They were previously filed in the Form 8-K originally filed on October 17, 1997 EX-23 2 EXHIBIT 23 CONSENT OF INDEPENDENT ACCOUNTANTS We hereby consent to the incorporation by reference in the Prospectuses constituting part of the Registration Statements on Form S-3 and in the Registration Statements on Form S-8 listed below of Gehl Company of our report on the consolidated financial statements of Brunel America, Inc. dated November 7, 1997 which appears in this Current Report on Form 8-K. 1. Registration Statement on Form S-8 (Registration No. 33-38392) 2. Registration Statement on Form S-8 (Registration No. 33-39150) 3. Registration Statement on Form S-8 (Registration No. 333-02195) 4. Registration Statement on Form S-8 (Registration No. 333-04017) 5. Registration Statement on Form S-3 (Registration No. 333-9173) PRICE WATERHOUSE LLP Minneapolis, MN December 15, 1997 -----END PRIVACY-ENHANCED MESSAGE-----