Delaware | 0-21220 | 74-1621248 | ||
(State or other jurisdiction of incorporation) | (Commission File Number) | (I.R.S. Employer Identification No.) |
[ ] | Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425) |
[ ] | Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12) |
[ ] | Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b)) |
[ ] | Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c)) |
(a) | Financial Statements of Business Acquired. | ||
1 | Specialized Industries LP audited consolidated financial statements as of and for the years ended December 28, 2013 and December 29, 2012 are attached hereto as Exhibit 99.1 and incorporated herein by reference. | ||
2 | Specialized Industries LP unaudited condensed consolidated financial statements as of March 29, 2014 and December 28, 2013 and for the three months ended March 29, 2014 and March 30, 2013 are attached hereto as Exhibit 99.2 and incorporated herein by reference. | ||
(b) | Pro Forma Financial Information. | ||
1 | The required pro forma financial information for the twelve months ended December 31, 2013, and as of and for the three months ended March 31, 2014, is attached hereto as Exhibit 99.3 and incorporated herein by reference. |
(d) | Exhibits. |
Exhibit No. | Description | |
23.1 | Consent of McGladrey LLP, Independent Accountants | |
99.1 | Audited consolidated financial statements of Specialized Industries LP as of and for the years ended December 28, 2013 and December 29, 2012 | |
99.2 | Unaudited condensed consolidated financial statements of Specialized Industries LP as of March 29, 2014 and December 28, 2013 and for the three months ended March 29, 2014 and March 30, 2013 | |
99.3 | Unaudited pro forma financial information for the twelve months ended December 31, 2013, and as of and for the three months ended March 31, 2014 |
Alamo Group Inc. | ||
Date: July 24, 2014 | By: | /s/ Robert H. George |
Robert H. George | ||
Vice President - Administration |
Exhibit No. | Description | |
23.1 | Consent of McGladrey LLP, Independent Accountants | |
99.1 | Audited consolidated financial statements of Specialized Industries LP as of and for the years ended December 28, 2013 and December 29, 2012 | |
99.2 | Unaudited condensed consolidated financial statements of Specialized Industries LP as of March 29, 2014 and December 28, 2013 and for the three months ended March 29, 2014 and March 30, 2013 | |
99.3 | Unaudited pro forma financial information for the twelve months ended December 31, 2013, and as of and for the three months ended March 31, 2014 |
Contents | ||
Independent Auditor’s Report on the Financial Statements | 1 | |
Financial Statements | ||
Consolidated Balance Sheets | 2 | |
Consolidated Statements of Income and Comprehensive Income | 3 | |
Consolidated Statements of Partnership Equity | 4 | |
Consolidated Statements of Cash Flows | 5 | |
Notes to Consolidated Financial Statements | 6-16 | |
Specialized Industries LP and Subsidiaries | |||||||
Consolidated Balance Sheets | |||||||
December 28, 2013 and December 29, 2012 | |||||||
2013 | 2012 | ||||||
Assets | |||||||
Current Assets | |||||||
Cash | $ | 204,360 | $ | 108,559 | |||
Accounts receivable, less allowance for doubtful accounts | |||||||
of $527,000 in 2013 and $394,000 in 2012 | 19,047,425 | 18,781,114 | |||||
Inventories | 42,009,864 | 40,889,348 | |||||
Prepaid expenses and other current assets | 3,270,523 | 3,135,681 | |||||
Deferred income taxes | 1,106,000 | 940,000 | |||||
Total current assets | 65,638,172 | 63,854,702 | |||||
Rental Equipment, net of accumulated depreciation | |||||||
of $5,957,000 in 2013 and $3,152,000 in 2012 | 24,426,375 | 23,543,018 | |||||
Property, Plant and Equipment | |||||||
Land | 878,345 | 881,366 | |||||
Buildings and leasehold improvements | 8,285,347 | 7,940,678 | |||||
Machinery and equipment | 12,577,836 | 11,512,984 | |||||
21,741,528 | 20,335,028 | ||||||
Less accumulated depreciation | 9,528,489 | 8,953,238 | |||||
Total property, plant and equipment | 12,213,039 | 11,381,790 | |||||
Other Assets | |||||||
Intangible assets - definite lived | 11,141,375 | 11,871,386 | |||||
Intangible assets - indefinite lived | 12,125,507 | 12,299,237 | |||||
Other | 1,958,670 | 2,228,427 | |||||
Total other assets | 25,225,552 | 26,399,050 | |||||
Total assets | $ | 127,503,138 | $ | 125,178,560 | |||
Liabilities and Partnership Equity | |||||||
Current Liabilities | |||||||
Accounts payable | $ | 8,658,377 | $ | 6,998,772 | |||
Current portion of long-term debt | 1,060,370 | 1,025,421 | |||||
Customer advances | 642,745 | 1,644,339 | |||||
Accrued liabilities: | |||||||
Compensation and related taxes | 3,130,561 | 2,896,853 | |||||
Warranty | 1,253,997 | 1,074,459 | |||||
Other | 882,337 | 851,485 | |||||
Interest | 50,417 | 75,000 | |||||
Total current liabilities | 15,678,804 | 14,566,329 | |||||
Long-Term Debt, less current portion | 30,197,170 | 39,098,834 | |||||
Deferred Income Taxes | 724,877 | 749,230 | |||||
Deferred Compensation | 7,524,000 | 2,878,000 | |||||
Total long-term liabilities | 38,446,047 | 42,726,064 | |||||
Partnership Equity | |||||||
Partnership equity | 71,368,737 | 64,776,330 | |||||
Accumulated other comprehensive income | 2,009,550 | 3,109,837 | |||||
Total partnership equity | 73,378,287 | 67,886,167 | |||||
Total liabilities and partnership equity | $ | 127,503,138 | $ | 125,178,560 | |||
See Notes to Consolidated Financial Statements. |
Specialized Industries LP and Subsidiaries | |||||||
Consolidated Statements of Income and Comprehensive Income | |||||||
Years Ended December 28, 2013 and December 29, 2012 | |||||||
2013 | 2012 | ||||||
Net sales | $ | 146,719,206 | $ | 131,382,675 | |||
Cost of goods sold | 106,549,069 | 97,739,513 | |||||
Gross profit | 40,170,137 | 33,643,162 | |||||
Selling and administrative expenses | 26,948,015 | 21,523,022 | |||||
Operating income | 13,222,122 | 12,120,140 | |||||
Other expense: | |||||||
Interest expense | 1,188,654 | 1,282,167 | |||||
Other expense (income) - net | 178,190 | (45,819 | ) | ||||
Total other expense | 1,366,844 | 1,236,348 | |||||
Income before income taxes | 11,855,278 | 10,883,792 | |||||
Income tax expense (benefit): | |||||||
Current | 1,834,066 | 1,782,660 | |||||
Deferred | (179,859 | ) | (77,266 | ) | |||
1,654,207 | 1,705,394 | ||||||
Net income | 10,201,071 | 9,178,398 | |||||
Other comprehensive (loss) income: | |||||||
Foreign currency translation | (1,100,287 | ) | 226,296 | ||||
Amortization of unrealized loss on interest rate swap | — | 68,190 | |||||
Other comprehensive (loss) income | (1,100,287 | ) | 294,486 | ||||
Comprehensive income | $ | 9,100,784 | $ | 9,472,884 | |||
See Notes to Consolidated Financial Statements. |
Specialized Industries LP and Subsidiaries | |||||||||||
Consolidated Statements of Partnership Equity | |||||||||||
Years Ended December 28, 2013 and December 29, 2012 | |||||||||||
Accumulated Other | |||||||||||
Partnership | Comprehensive | ||||||||||
Equity | Income | Total | |||||||||
Balance at December 31, 2011 | $ | 59,103,208 | $ | 2,815,351 | $ | 61,918,559 | |||||
Net income for the year | 9,178,398 | — | 9,178,398 | ||||||||
Partnership distributions | (3,459,219 | ) | — | (3,459,219 | ) | ||||||
Tax distributions | (46,057 | ) | — | (46,057 | ) | ||||||
Other comprehensive income: | |||||||||||
Amortization of unrealized loss on interest rate swap | — | 68,190 | 68,190 | ||||||||
Foreign currency translation | — | 226,296 | 226,296 | ||||||||
Balance at December 29, 2012 | 64,776,330 | 3,109,837 | 67,886,167 | ||||||||
Net income for the year | 10,201,071 | — | 10,201,071 | ||||||||
Partnership distributions | (3,453,657 | ) | — | (3,453,657 | ) | ||||||
Tax distributions | (155,007 | ) | — | (155,007 | ) | ||||||
Other comprehensive income: | |||||||||||
Foreign currency translation | — | (1,100,287 | ) | (1,100,287 | ) | ||||||
Balance at December 28, 2013 | $ | 71,368,737 | $ | 2,009,550 | $ | 73,378,287 | |||||
See Notes to Consolidated Financial Statements. |
Specialized Industries LP and Subsidiaries | ||||||
Consolidated Statements of Cash Flows | ||||||
Years Ended December 28, 2013 and December 29, 2012 | ||||||
2013 | 2012 | |||||
Cash Flows from Operating Activities | ||||||
Net income | $ | 10,201,071 | $ | 9,178,398 | ||
Adjustments to reconcile net income to net | ||||||
cash provided by (used in) operating activities: | ||||||
Depreciation of equipment rented to others | 4,525,062 | 3,142,782 | ||||
Depreciation of property, plant and equipment | 1,350,662 | 1,328,184 | ||||
Deferred income taxes | (179,859 | ) | (77,266 | ) | ||
Decrease in interest rate swap | — | (135,654 | ) | |||
Amortization of deferred expenses | 563,691 | 487,212 | ||||
Proceeds from sales of rental equipment | 12,862,058 | 7,023,905 | ||||
Changes in operating assets and liabilities: | ||||||
Accounts receivable | (517,107 | ) | 1,471,616 | |||
Inventories and rental equipment | (19,691,879 | ) | (24,274,168 | ) | ||
Other assets | (143,346 | ) | (805,657 | ) | ||
Accounts payable | 892,205 | (220,290 | ) | |||
Accrued expenses | 4,171,050 | 1,647,573 | ||||
Net cash provided by (used in) operating activities | 14,033,608 | (1,233,365 | ) | |||
Cash Flows from Investing Activities | ||||||
Purchase of property, plant and equipment | (2,304,508 | ) | (1,606,046 | ) | ||
Net cash used in investing activities | (2,304,508 | ) | (1,606,046 | ) | ||
Cash Flows from Financing Activities | ||||||
Checks in excess of bank balance | 780,965 | (1,384,690 | ) | |||
Borrowings on revolving credit facility | 143,840,218 | 18,636,034 | ||||
Payments on revolving credit facility | (151,759,322 | ) | (14,949,751 | ) | ||
Issuance of long-term debt | 79,789 | 5,000,000 | ||||
Payments on long-term debt | (1,027,401 | ) | (464,144 | ) | ||
Distributions to partners | (3,453,657 | ) | (3,459,219 | ) | ||
Deferred financing costs | — | (450,000 | ) | |||
Partnership tax distributions | (155,007 | ) | (46,057 | ) | ||
Net cash (used in) provided by financing activities | (11,694,415 | ) | 2,882,173 | |||
Effect of exchange rates on cash | 61,116 | (39,692 | ) | |||
Net increase in cash | 95,801 | 3,070 | ||||
Cash: | ||||||
Beginning | 108,559 | 105,489 | ||||
Ending | $ | 204,360 | $ | 108,559 | ||
Supplemental Disclosures of Cash Flow Information | ||||||
Cash payments for interest | $ | 1,064,000 | $ | 1,241,000 | ||
Cash paid for income taxes | 1,960,000 | 1,956,000 | ||||
Supplemental Schedule of Noncash Operating Activities | ||||||
Inventory transferred to rental equipment | $ | 18,338,867 | $ | 22,373,588 | ||
See Notes to Consolidated Financial Statements. |
Note 1. | Summary of Significant Accounting Policies |
2013 | 2012 | ||||||
Finished equipment | $ | 12,289,962 | $ | 11,890,041 | |||
Work-in-progress | 6,944,621 | 9,567,835 | |||||
Raw materials for manufacturing and replacement parts | 22,775,281 | 19,431,472 | |||||
$ | 42,009,864 | $ | 40,889,348 |
Buildings | 39-40 years |
Building and leasehold improvements | 8-40 years |
Machinery and equipment | 3-8 years |
Furniture and fixtures | 5-7 years |
Computer hardware and software | 3-5 years |
Note 2. | Long-Term Debt |
2013 | 2012 | ||||||
Revolving credit facility | $ | 27,231,850 | $ | 35,150,954 | |||
Term loan | 3,916,667 | 4,916,667 | |||||
Other | 109,023 | 56,634 | |||||
31,257,540 | 40,124,255 | ||||||
Less: current maturities | (1,060,370 | ) | (1,025,421 | ) | |||
$ | 30,197,170 | $ | 39,098,834 | ||||
Years Ending | |||
2014 | $ | 1,060,370 | |
2015 | 30,197,170 | ||
$ | 31,257,540 | ||
Note 3. | Operating Leases |
Related Party | Non-Related Party | Total | ||||
2014 | $ 344,000 | $1,092,000 | $1,436,000 | |||
2015 | 348,000 | 967,000 | 1,315,000 | |||
2016 | 358,000 | 751,000 | 1,109,000 | |||
2017 | 243,000 | 717,000 | 960,000 | |||
2018 | — | 526,000 | 526,000 | |||
Thereafter | — | 547,000 | 547,000 | |||
$1,293,000 | $4,600,000 | $5,893,000 | ||||
Note 4. | Income Taxes |
2013 | 2012 | |||
Deferred tax assets | ||||
Allowance for doubtful accounts | $ 88,000 | $ 78,000 | ||
Inventories | 443,000 | 441,000 | ||
Accrued warranty | 351,000 | 273,000 | ||
Other accrued expenses | 224,000 | 148,000 | ||
1,106,000 | 940,000 | |||
Deferred tax liabilities | ||||
Property, plant and equipment | 520,000 | 543,000 | ||
Intangible assets | 204,877 | 206,230 | ||
724,877 | 749,230 | |||
Net deferred tax asset | $ 381,123 | $ 190,770 | ||
2013 | 2012 | |||
Current asset | $ 1,106,000 | $ 940,000 | ||
Noncurrent liability | (724,877) | (749,230) | ||
$ 381,123 | $ 190,770 | |||
2013 | 2012 | |||
Computed expected income tax expense | $ 4,030,795 | $ 3,700,489 | ||
Increase (decrease) in income taxes resulting from: | ||||
State income tax expense (net of federal benefit) | 110,000 | 137,000 | ||
Nondeductible expenses | (46,000) | (38,000) | ||
Prior year true ups | (8,000) | (97,000) | ||
Tax credits | (30,000) | (20,000) | ||
Pass through entity income | (2,147,502) | (2,052,000) | ||
Other | (255,086) | 74,905 | ||
$ 1,654,207 | $ 1,705,394 | |||
Note 5. | Partnership Agreement |
Units | |||
Class A units | 4,848,060 | ||
Class B units | 330,549 | ||
Class C units | 330,550 |
Note 6. | Product Warranty Liability |
Liability at January 1, 2012 | $ 985,245 |
Provision for warranty | 1,213,000 |
Warranty claims and expenditures | (1,123,786) |
Liability at December 29, 2012 | 1,074,459 |
Provision for warranty | 1,456,000 |
Warranty claims and expenditures | (1,276,462) |
Liability at December 28, 2013 | $ 1,253,997 |
Note 7. | Other Assets |
2013 | 2012 | |
Non-compete and employment agreements | $ 907,753 | $ 924,142 |
Patents and drawings | 2,350,538 | 2,398,880 |
Debt closing costs | 450,000 | 450,000 |
Other | 77,097 | 77,097 |
Less accumulated amortization | (1,826,718) | (1,621,692) |
$ 1,958,670 | $ 2,228,427 | |
Years Ending | |
2014 | $ 232,000 |
2015 | 202,000 |
2016 | 77,000 |
2017 | 77,000 |
2018 | 77,000 |
Thereafter | 1,294,000 |
$ 1,959,000 | |
Note 8. | Definite Lived Intangible Assets |
Gross | Net | ||
Carrying | Accumulated | Carrying | |
December 28, 2013 | Amount | Amortization | Amount |
Amortized intangible assets: | |||
Distribution network | $ 12,411,394 | $ 1,270,019 | $ 11,141,375 |
December 29, 2012 | |||
Amortized intangible assets: | |||
Distribution network | $ 12,695,283 | $ 823,897 | $ 11,871,386 |
Years Ending | |
2014 | $ 331,000 |
2015 | 331,000 |
2016 | 331,000 |
2017 | 331,000 |
2018 | 331,000 |
Thereafter | 9,486,000 |
$ 11,141,000 | |
Note 9. | Related Party Transactions |
Specialized Industries LP and Subsidiaries | |||||||
Unaudited Condensed Consolidated Balance Sheets | |||||||
March 29, 2014 and December 28, 2013 | |||||||
(in thousands) | |||||||
March 29, 2014 | December 28, 2013 | ||||||
Assets | |||||||
Current Assets | |||||||
Cash | $ | 114 | $ | 204 | |||
Accounts receivable, less allowance for doubtful accounts | |||||||
of $527 in 2013 and $394 in 2012 | 17,725 | 19,047 | |||||
Inventories | 42,274 | 42,010 | |||||
Prepaid expenses and other current assets | 3,355 | 3,271 | |||||
Deferred income taxes | 1,106 | 1,106 | |||||
Total current assets | 64,574 | 65,638 | |||||
Rental Equipment, net of accumulated depreciation | |||||||
of $5,957 in 2013 and $3,152 in 2012 | 25,613 | 24,426 | |||||
Property, Plant and Equipment, net | |||||||
Land | 876 | 878 | |||||
Buildings and leasehold improvements | 8,532 | 8,286 | |||||
Machinery and equipment | 12,818 | 12,578 | |||||
22,226 | 21,742 | ||||||
Less accumulated depreciation | (9,807 | ) | (9,529 | ) | |||
Total property, plant and equipment, net | 12,419 | 12,213 | |||||
Other Assets | |||||||
Intangible assets - definite lived, net | 10,871 | 11,141 | |||||
Intangible assets - indefinite lived | 12,042 | 12,126 | |||||
Other | 1,885 | 1,959 | |||||
Total other assets | 24,798 | 25,226 | |||||
Total assets | $ | 127,404 | $ | 127,503 | |||
Liabilities and Partnership Equity | |||||||
Current Liabilities | |||||||
Accounts payable | $ | 6,456 | $ | 8,658 | |||
Current portion of long-term debt | 1,056 | 1,061 | |||||
Customer advances | 1,948 | 643 | |||||
Accrued liabilities: | |||||||
Compensation and related taxes | 2,993 | 3,131 | |||||
Accrued income tax | 410 | — | |||||
Warranty | 937 | 1,254 | |||||
Other | 775 | 882 | |||||
Interest | 50 | 50 | |||||
Total current liabilities | 14,625 | 15,679 | |||||
Long-Term Debt, less current portion | 28,240 | 30,197 | |||||
Deferred Income Taxes | 720 | 725 | |||||
Deferred Compensation | 7,524 | 7,524 | |||||
Total long-term liabilities | 36,484 | 38,446 | |||||
Partnership Equity | |||||||
Partnership equity | 74,836 | 71,369 | |||||
Accumulated other comprehensive income | 1,459 | 2,009 | |||||
Total partnership equity | 76,295 | 73,378 | |||||
Total liabilities and partnership equity | $ | 127,404 | $ | 127,503 | |||
See Notes to Unaudited Condensed Consolidated Financial Statements. |
Specialized Industries LP and Subsidiaries | |||||||
Unaudited Condensed Consolidated Statements of Income | |||||||
Three months Ended March 29, 2014 and March 30, 2013 | |||||||
(in thousands) | |||||||
March 29, 2014 | March 30, 2013 | ||||||
Net sales | $ | 39,144 | $ | 34,033 | |||
Cost of goods sold | 27,945 | 24,373 | |||||
Gross profit | 11,199 | 9,660 | |||||
Selling and administrative expenses | 6,423 | 5,331 | |||||
Operating income | 4,776 | 4,329 | |||||
Other expense: | |||||||
Interest expense | 217 | 307 | |||||
Other expense - net | 107 | 26 | |||||
Total other expense | 324 | 333 | |||||
Income before income taxes | 4,452 | 3,996 | |||||
Income tax expense | 427 | 548 | |||||
Net income | $ | 4,025 | $ | 3,448 | |||
See Notes to Unaudited Condensed Consolidated Financial Statements. |
Specialized Industries LP and Subsidiaries | ||||||
Unaudited Condensed Consolidated Statements of Cash Flows | ||||||
Three months Ended March 29, 2014 and March 30, 2013 | ||||||
(in thousands) | ||||||
March 29, 2014 | March 30, 2013 | |||||
Cash Flows from Operating Activities | ||||||
Net income | $ | 4,025 | $ | 3,448 | ||
Adjustments to reconcile net income to net | ||||||
cash provided by (used in) operating activities: | ||||||
Depreciation of equipment rented to others | 1,114 | 1,007 | ||||
Depreciation of property, plant and equipment | 346 | 338 | ||||
Amortization of deferred expenses | 135 | 132 | ||||
Proceeds from sales of rental equipment | 3,604 | 1,538 | ||||
Changes in operating assets and liabilities: | ||||||
Accounts receivable | 1,188 | (457 | ) | |||
Inventories and rental equipment | (6,323 | ) | (5,550 | ) | ||
Other assets | (90 | ) | (367 | ) | ||
Accounts payable | (1,850 | ) | (668 | ) | ||
Accrued expenses | 1,200 | 7 | ||||
Net cash provided by (used in) operating activities | 3,349 | (572 | ) | |||
Cash Flows from Investing Activities | ||||||
Purchase of property, plant and equipment | (618 | ) | (213 | ) | ||
Net cash used in investing activities | (618 | ) | (213 | ) | ||
Cash Flows from Financing Activities | ||||||
Checks in excess of bank balance | (293 | ) | 659 | |||
Borrowings on revolving credit facility | 41,953 | 36,126 | ||||
Payments on revolving credit facility | (43,648 | ) | (34,603 | ) | ||
Payments on long-term debt | (267 | ) | (257 | ) | ||
Distributions to partners | (557 | ) | (854 | ) | ||
Net cash (used in) provided by financing activities | (2,812 | ) | 1,071 | |||
Effect of exchange rates on cash | (9 | ) | 14 | |||
Net (decrease) increase in cash | (90 | ) | 300 | |||
Cash: | ||||||
Beginning | 204 | 109 | ||||
Ending | $ | 114 | $ | 409 | ||
Supplemental Disclosures of Cash Flow Information | ||||||
Cash payments for interest | $ | 217 | $ | 322 | ||
Cash paid for income taxes | 627 | 490 | ||||
See Notes to Unaudited Condensed Consolidated Financial Statements. |
Note 1. | Summary of Significant Accounting Policies |
(in thousands) | March 29, 2014 | December 28, 2013 | |||||
Finished equipment | $ | 10,229 | $ | 12,290 | |||
Work-in-progress | 9,610 | 6,945 | |||||
Raw materials for manufacturing and replacement parts | 22,435 | 22,775 | |||||
$ | 42,274 | $ | 42,010 |
Buildings | 39-40 years |
Building and leasehold improvements | 8-40 years |
Machinery and equipment | 3-8 years |
Furniture and fixtures | 5-7 years |
Computer hardware and software | 3-5 years |
Liability at December 28, 2013 | $ | 1,254 | |
Provision for warranty | 472 | ||
Warranty claims and expenditures | (789 | ) | |
Liability at March 29, 2014 | $ | 937 |
(in thousands) | March 29, 2014 | December 28, 2013 | |||||
Revolving credit facility | $ | 25,537 | $ | 27,232 | |||
Term loan | 3,723 | 3,917 | |||||
Other | 36 | 109 | |||||
29,296 | 31,258 | ||||||
Less: current maturities | (1,056 | ) | (1,061 | ) | |||
$ | 28,240 | $ | 30,197 | ||||
Historical | ||||||||||||||||||
Alamo Group Inc. | Specialized Industries LP | |||||||||||||||||
March 31, 2014 | March 29, 2014 | Pro forma Adjustments | Pro forma Consolidated | |||||||||||||||
ASSETS | ||||||||||||||||||
Current assets: | ||||||||||||||||||
Cash and cash equivalents | $ | 42,253 | $ | 114 | — | $ | 42,367 | |||||||||||
Accounts receivable, net | 183,361 | 17,725 | — | 201,086 | ||||||||||||||
Inventories, net | 123,932 | 42,274 | 4,650 | (a) | 170,856 | |||||||||||||
Deferred income taxes | 5,880 | 1,106 | — | 6,986 | ||||||||||||||
Prepaid expenses | 7,158 | 3,355 | — | 10,513 | ||||||||||||||
Income tax receivable | 1,623 | — | — | 1,623 | ||||||||||||||
Total current assets | 364,207 | 64,574 | 4,650 | 433,431 | ||||||||||||||
Rental equipment, net | — | 25,613 | 768 | (b) | 26,381 | |||||||||||||
Property and equipment, net | 61,552 | 12,419 | 373 | (c) | 74,344 | |||||||||||||
Intangible assets, net | 5,500 | 22,913 | 33,607 | (d) | 62,020 | |||||||||||||
Goodwill | 31,980 | — | 41,809 | (e) | 73,789 | |||||||||||||
Deferred income taxes | 461 | — | — | 461 | ||||||||||||||
Other assets | 1,743 | 1,885 | — | 3,628 | ||||||||||||||
Total assets | $ | 465,443 | $ | 127,404 | $ | 81,207 | $ | 674,054 | ||||||||||
LIABILITIES AND STOCKHOLDERS’ EQUITY | ||||||||||||||||||
Current liabilities: | ||||||||||||||||||
Accounts payable | $ | 66,335 | $ | 6,456 | — | $ | 72,791 | |||||||||||
Income taxes payable | 1,947 | — | — | 1,947 | ||||||||||||||
Deferred income taxes | — | — | 623 | (a) | 623 | |||||||||||||
Accrued liabilities | 32,473 | 7,113 | 1,300 | (k) | 40,886 | |||||||||||||
Current maturities of long-term debt and capital lease obligations | 1,139 | 1,056 | (1,056 | ) | (h) | 1,139 | ||||||||||||
Total current liabilities | 101,894 | 14,625 | 867 | 117,386 | ||||||||||||||
Long-term debt, net of current maturities | — | 28,240 | 161,760 | (h) | 190,000 | |||||||||||||
Deferred pension liability | 2,138 | — | — | 2,138 | ||||||||||||||
Other long-term liabilities | 3,540 | 7,524 | (7,524 | ) | (f) | 3,540 | ||||||||||||
Deferred income taxes | 1,304 | 720 | 2,240 | (a) | 4,264 | |||||||||||||
Total long-term liabilities | 6,982 | 36,484 | 156,476 | 199,942 | ||||||||||||||
Stockholders’ equity | ||||||||||||||||||
Common stock | 1,213 | — | — | 1,213 | ||||||||||||||
Additional paid-in capital | 91,989 | — | — | 91,989 | ||||||||||||||
Partnership equity | — | 74,836 | (74,836 | ) | (g) | — | ||||||||||||
Treasury stock at cost | (426 | ) | — | — | (426 | ) | ||||||||||||
Retained earnings (deficit) | 261,595 | — | (1,300 | ) | (k) | 260,295 | ||||||||||||
Accumulated other comprehensive income | 2,196 | 1,459 | — | 3,655 | ||||||||||||||
Total stockholders’ equity | 356,567 | 76,295 | (76,136 | ) | 356,726 | |||||||||||||
Total liabilities and stockholders’ equity | $ | 465,443 | $ | 127,404 | $ | 81,207 | $ | 674,054 |
Historical | ||||||||||||||||||||||
Alamo Group Inc. | Specialized Industries LP | |||||||||||||||||||||
March 31, 2014 | March 29, 2014 | Pro forma Adjustments | Pro forma Consolidated | |||||||||||||||||||
Net sales | $ | 171,250 | $ | 39,144 | $ | — | $ | 210,394 | ||||||||||||||
Cost of sales | 133,120 | 27,945 | 82 | (b),(c) | 161,147 | |||||||||||||||||
Gross profit | 38,130 | 11,199 | (82 | ) | 49,247 | |||||||||||||||||
Operating expenses | ||||||||||||||||||||||
Selling, general, and administrative | 27,499 | 6,423 | 221 | (d),(k) | 34,143 | |||||||||||||||||
Total operating expenses | 27,499 | 6,423 | 221 | 34,143 | ||||||||||||||||||
Income (loss) from operations | 10,631 | 4,776 | (303 | ) | 15,104 | |||||||||||||||||
Interest expense | (239 | ) | (217 | ) | (988 | ) | (i) | (1,444 | ) | |||||||||||||
Interest income | 61 | — | — | 61 | ||||||||||||||||||
Other income (expense), net | 474 | (107 | ) | — | 367 | |||||||||||||||||
Income (loss) before income taxes | 10,927 | 4,452 | (1,291 | ) | 14,088 | |||||||||||||||||
Income tax provision | 3,689 | 427 | 774 | (l) | 4,890 | |||||||||||||||||
Net income (loss) | $ | 7,238 | $ | 4,025 | $ | (2,065 | ) | $ | 9,198 | |||||||||||||
Net income per share-Basic | $ | 0.60 | $ | 0.76 | ||||||||||||||||||
Net income per share-Diluted | $ | 0.59 | $ | 0.75 | ||||||||||||||||||
Shares used in per share calculation-Basic | 12,084 | 12,084 | ||||||||||||||||||||
Shares used in per share calculation-Diluted | 12,270 | 12,270 |
Historical | ||||||||||||||||||
Alamo Group Inc. | Specialized Industries LP | |||||||||||||||||
December 31 2013 | December 28, 2013 | Pro forma Adjustments | Pro forma Consolidated | |||||||||||||||
Net sales | $ | 676,836 | $ | 146,719 | $ | — | $ | 823,555 | ||||||||||
Cost of sales | 518,326 | 106,549 | 327 | (b),(c) | 625,202 | |||||||||||||
Gross profit | 158,510 | 40,170 | (327 | ) | 198,353 | |||||||||||||
Operating expenses | ||||||||||||||||||
Selling, general, and administrative | 107,773 | 26,948 | (2,220 | ) | (d),(j) | 132,501 | ||||||||||||
Total operating expenses | 107,773 | 26,948 | (2,220 | ) | 132,501 | |||||||||||||
Income from operations | 50,737 | 13,222 | 1,893 | 65,852 | ||||||||||||||
Interest expense | (1,161 | ) | (1,189 | ) | (3,630 | ) | (i) | (5,980 | ) | |||||||||
Interest income | 186 | — | 186 | |||||||||||||||
Other income (expense), net | 1,626 | (178 | ) | 1,448 | ||||||||||||||
Income (loss) before income taxes | 51,388 | 11,855 | (1,737 | ) | 61,506 | |||||||||||||
Income tax provision | 15,294 | 1,654 | 2,191 | (l) | 19,139 | |||||||||||||
Net income (loss) | $ | 36,094 | $ | 10,201 | $ | (3,928 | ) | $ | 42,367 | |||||||||
Net income per share-Basic | $ | 3.00 | $ | 3.52 | ||||||||||||||
Net income per share-Diluted | $ | 2.96 | $ | 3.47 | ||||||||||||||
Shares used in per share calculation-Basic | 12,050 | 12,050 | ||||||||||||||||
Shares used in per share calculation-Diluted | 12,212 | 12,212 |
Cash | $ | 114 | |
Accounts receivable | 17,725 | ||
Inventory | 46,924 | ||
Prepaid expenses | 3,355 | ||
Deferred income tax assets | 1,106 | ||
Rental equipment | 26,381 | ||
Property, plant & equipment | 12,792 | ||
Intangible assets | 56,520 | ||
Other assets | 1,885 | ||
Deferred income tax liabilities | (2,863 | ) | |
Other liabilities assumed | (13,569 | ) | |
Net assets assumed | 150,370 | ||
Goodwill | 41,809 | ||
Preliminary Purchase Price | 192,179 |
(a) | To record the preliminary estimated fair value adjustments |
(in thousands) | Historical Amount | Estimated Fair Value | Estimated Fair Value Adjustment | ||||||||
Inventory | $ | 42,274 | $ | 46,924 | $ | 4,650 | |||||
Deferred tax liability | — | 2,863 | 2,863 |
(in thousands) | Pro Forma Depreciation | ||||||||||||
Estimated Fair Value | Estimated Useful Lives | For the three months ended March 31, 2014 | For the year ended December 31, 2013 | ||||||||||
Rental equipment | $ | 26,381 | 3 years | $ | 1,177 | $ | 4,777 | ||||||
Elimination of historical Specialized balance | 25,613 | (1,114 | ) | (4,525 | ) | ||||||||
Pro forma adjustment | $ | 768 | $ | 63 | $ | 252 |
(c) | To record the preliminary estimated fair value of the property, plant and equipment acquired and the related depreciation expense (using the straight -line method) within cost of goods sold in the statement of operations are as follows: |
(in thousands) | Pro Forma Depreciation | ||||||||||||
Estimated Fair Value | Estimated Useful Lives | For the three months ended March 31, 2014 | For the year ended December 31, 2013 | ||||||||||
Property Plant & Equipment | $ | 12,792 | 3 to 25 years | $ | 364 | $ | 1,426 | ||||||
Elimination of historical Specialized balance | (12,419 | ) | (345 | ) | (1,351 | ) | |||||||
Pro forma adjustment | $ | 373 | $ | 19 | $ | 75 |
(in thousands) | Pro Forma Amortization | ||||||||||||
Intangible Assets | Estimated Fair Value | Estimated Useful Lives | For the three months ended March 31, 2014 | For the year ended December 31, 2013 | |||||||||
Trade names and Trademarks | $ | 16,956 | 25 years | $ | 168 | $ | 672 | ||||||
Customer and Dealer Relationships | 33,912 | 17 years | 498 | 1,992 | |||||||||
Patents, Technology & Drawings | 5,652 | 12 years | 117 | 468 | |||||||||
Total Definite Lived Intangible assets | 56,520 | 783 | 3,132 | ||||||||||
Elimination of historical Specialized balance | (22,913 | ) | (271 | ) | (730 | ) | |||||||
Pro forma adjustment | $ | 33,607 | $ | 512 | $ | 2,402 |
(e) | To record preliminary estimated goodwill. |
(f) | To reflect the eliminations of the deferred compensation and other benefits obligation payout as they were not assumed by Alamo Group in the Acquisition, and there will be no similar plans in place subsequent to the Acquisition. |
(g) | To reflect the elimination of partnership equity from stockholders’ equity. |
(in thousands) | Principal Balance | Interest Rate | |||
Revolving credit facility | $ | 190,000 | 2.45% | ||
Elimination of historical Specialized balance | (29,296 | ) | |||
Pro forma adjustment | $ | 160,704 |
(i) | Reflects the increase in interest expense resulting from the amended loan facility in conjunction with the amendment of our existing credit facility to allow for the Specialized Acquisition. |
(in thousands) | For the Three Months Ended March 31, 2014 | For the Year Ended December 31, 2013 | ||||||
Increase related to interest expense on the amended agreement | $ | 1,164 | $ | 4,655 | ||||
Pro forma amortization of deferred financing fees | 41 | 164 | ||||||
$ | 1,205 | $ | 4,819 | |||||
Elimination of historical Specialized expense | $ | (217 | ) | $ | (1,189 | ) | ||
Pro forma total interest expense | $ | 988 | $ | 3,630 |
(j) | To reflect the elimination of the deferred compensation and related expense associated with the compensation plans not assumed by Alamo Group in the Acquisition, which approximated $4.6 million for the year ended December 31, 2013. |
(k) | To reflect the elimination of $291 in transaction costs incurred by Alamo Group for the three months ended March 31, 2014 related to the Specialized acquisition, which have been eliminated from the pro forma condensed consolidated statement of operations. Included in the pro forma condensed consolidated balance sheet are approximately $1.3 million in estimated future transaction costs. |
(l) | Reflects a 38% U.S. tax rate and a 27% Canadian tax rate effect on the pro-forma adjustments to the pro forma condensed consolidated statement of operations. |
(in thousands) | For the Three Months Ended March 31, 2014 | For the Year Ended December 31, 2013 | ||||||
Increase related to tax expense | $ | 1,201 | $ | 3,845 | ||||
Elimiation of historical Specialized provision | $ | (427 | ) | $ | (1,654 | ) | ||
Pro forma total tax expense | $ | 774 | $ | 2,191 |