-----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, TBfyd25/Nrb8AinNv4T53mk9NrDHz3VdH/OYyr3m/wNiroSAhaZtTO/magTuvazU GwUWq7lLF8HUVQIPKOLQIA== 0000009779-98-000006.txt : 19980129 0000009779-98-000006.hdr.sgml : 19980129 ACCESSION NUMBER: 0000009779-98-000006 CONFORMED SUBMISSION TYPE: 8-K PUBLIC DOCUMENT COUNT: 1 CONFORMED PERIOD OF REPORT: 19980113 ITEM INFORMATION: ITEM INFORMATION: FILED AS OF DATE: 19980128 SROS: NYSE SROS: PCX FILER: COMPANY DATA: COMPANY CONFORMED NAME: FAIRCHILD CORP CENTRAL INDEX KEY: 0000009779 STANDARD INDUSTRIAL CLASSIFICATION: BOLTS, NUTS, SCREWS, RIVETS & WASHERS [3452] IRS NUMBER: 340728587 STATE OF INCORPORATION: DE FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 8-K SEC ACT: SEC FILE NUMBER: 001-06560 FILM NUMBER: 98515134 BUSINESS ADDRESS: STREET 1: 300 W SERVICE RD STREET 2: PO BOX 10803 CITY: CHANTILLY STATE: VA ZIP: 22021 BUSINESS PHONE: 7034785800 FORMER COMPANY: FORMER CONFORMED NAME: BANNER INDUSTRIES INC /DE/ DATE OF NAME CHANGE: 19901118 8-K 1 6 UNITED STATES SECURITIES AND EXCHANGE COMMISSION WASHINGTON, D.C. 20549 FORM 8-K PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 Date of Report (date of earliest event reported): January 28, 1998 (January 13,1998) Commission File Number 1-6560 THE FAIRCHILD CORPORATION (Exact name of Registrant as specified in its charter) Delaware 34-0728587 (State or other jurisdiction of (I.R.S. Employer Identification No.) Incorporation or organization) Washington Dulles International Airport 300 West Service Road, PO Box 10803 Chantilly, VA 20153 (Address of principal executive offices) (Zip Code) Registrant's telephone number, including area code (703) 478-5800 NONE (Former name or former address, if changed since last report) ITEM 2. DISPOSITION OF ASSETS On January 13, 1998, certain subsidiaries (the "Selling Subsidiaries"), of Banner Aerospace, Inc. ("Banner", a majority-owned subsidiary of the Registrant), completed the disposition of substantially all of the assets and certain liabilities of the Selling Subsidiaries to AS BAR LLC and AS BAR PBH LLC, two wholly-owned subsidiaries of AlliedSignal Inc., in exchange for unregistered shares of AlliedSignal Inc. common stock with an aggregate value equal to $345 million (the "Disposition"). The value of the AlliedSignal Inc. common stock received by the Selling Subsidiaries was determined by the average closing price of such stock on the New York Stock Exchange for a period of twenty days preceding the closing. The Selling Subsidiaries were Adams Industries, Inc., Aerospace Bearing Support, Inc., Aircraft Bearing Corporation, Banner Distribution, Inc., Burbank Aircraft Supply, Inc., Harco, Inc., PB Herndon Aerospace, Inc. (which collectively comprise Banner's Hardware Group), Banner Aerospace Services, Inc. (which transferred only those assets related to the Hardware Group business) and PacAero. The transaction was evidenced by: (i) an Asset Purchase Agreement dated as of December 8, 1997, attached hereto as Exhibit 2.1, among Banner, seven of the Selling Subsidiaries (Adams Industries, Inc., Aerospace Bearing Support, Inc., Aircraft Bearing Corporation, Banner Distribution, Inc., Burbank Aircraft Supply, Inc., Harco, Inc. and PacAero), AlliedSignal Inc. and AS BAR LLC; and (ii) an Asset Purchase Agreement dated as of December 8, 1997, attached hereto as Exhibit 2.2, among Banner, two of the Selling Subsidiaries (PB Herndon Aerospace, Inc. and Banner Aerospace Services, Inc.), AlliedSignal Inc. and AS BAR PBH LLC. (AS BAR LLC and AS BAR PBH LLC are collectively referred to as the "Buyers"). Reference is made to Exhibits 2.1 and 2.2 hereto for the complete terms and conditions of the two Asset Purchase Agreements. The purchase price received by the Selling Subsidiaries ($345 million) was based on the consolidated net worth as reflected on an Estimated Closing Date Balance Sheet for the assets (and liabilities) conveyed by the Selling Subsidiaries to the Buyers. Such Estimated Closing Date Balance Sheet is subject to review by the parties, and the purchase price shall be adjusted (up or down) based on the net worth as reflected on the final Closing Date Balance Sheet. The purchase price was allocated among the Selling Subsidiaries in the following proportions: Adams Industries, Inc., 4.4%; Aerospace Bearing Support, Inc., 8.4%; Aircraft Bearing Corporation, 8.5%; Banner Distribution, Inc., 1.5%; Burbank Aircraft Supply, Inc., 43.5%; Harco, Inc., 23.5%; PacAero, 3.6%; PB Herndon Aerospace, Inc., 6.1%; Banner Aerospace Services, Inc., 0.5%. ITEM 7. FINANCIAL STATEMENTS AND EXHIBITS PRO FORMA CONSOLIDATED FINANCIAL STATEMENTS The unaudited pro forma consolidated statement of earnings for the year ended June 30, 1997 and for the three months ended September 28, 1997 have been prepared to give effect to the Disposition as if the Disposition occurred on July 1, 1996 and July 1, 1997, respectively. The unaudited pro forma consolidated balance sheet as of September 28, 1997 has been prepared to give effect to the Disposition as if it had occurred on such date. The unaudited pro forma consolidated financial data are not necessarily indicative of the results that would have been obtained had the Disposition been completed as of the dates presented or for any future period. The unaudited pro forma consolidated financial data should be read in conjunction with the Company's Consolidated Financial Statements and notes thereto included in the Company's June 30, 1997 Form 10-K/A. THE FAIRCHILD CORPORATION UNAUDITED PRO FORMA CONSOLIDATED STATEMENT OF EARNINGS FOR THE YEAR ENDED JUNE 30, 1997
Pro Forma Historical Adjustments(1) Company (In thousands, except per share data) Sales $ 731,960 $ (208,813) (2) $ 523,147 Costs and expenses: Cost of sales 526,837 (134,634) 392,203 Selling, general & administrative 161,967 (51,271) 110,696 Research and development 7,807 - 7,807 Amortization of goodwill 4,832 (289) 4,543 707,943 (186,194) 515,249 Operating income 30,517 (22,619) 7,898 Net interest expense (47,798) 14,450 (33,348) Investment income, net 6,651 - 6,651 Equity in earnings of affiliates 4,598 - 4,598 Minority interest (3,514) 3,168 (346) Non-recurring income 2,528 - 2,528 Earnings before taxes (7,018) (5,001) (12,019) Income tax provision (benefit) (5,200) (386) (5,586) Earnings from continuing operations $(1,818) $(4,615) $ (6,433) Primary earnings per share: Continuing operations $ (0.11) $ (0.37) Weighted average shares outstanding 17,230 17,230
THE FAIRCHILD CORPORATION UNAUDITED PRO FORMA CONSOLIDATED STATEMENT OF EARNINGS FOR THE THREE MONTHS ENDED SEPTEMBER 28, 1997
Pro Forma Historical Adjustments(1) Company (In thousands, except per share data) Sales $ 213,761 $(54,665) (3) $159,096 Costs and expenses: Cost of sales 161,699 (33,206) 128,493 Selling, general & administrative 40,122 (15,342) 24,780 Research and development 605 - 605 Amortization of goodwill 1,223 (68) 1,155 203,649 (48,616) 155,033 Operating income 10,112 (6,049) 4,063 Net interest expense (12,590) 3,745 (8,845) Investment income, net 1,897 - 1,897 Equity in earnings of affiliates 1,692 - 1,692 Minority interest (788) 569 (219) Earnings before taxes 323 (1,735) (1,412) Income tax provision (benefit) (110) (906) (1,016) Earnings from continuing operations $ 433 $ (829) $ (396) Earnings per share: Continuing operations $ 0.02 $ (0.02) Weighted average shares outstanding 17,457 17,457
THE FAIRCHILD CORPORATION UNAUDITED PRO FORMA BALANCE SHEETAS OF SEPTEMBER 28, 1997
Pro Forma Historical Adjustments Company (In thousands, except per share data) Cash $ 9,049 $ - $ 9,049 Short-term investments 18,403 172,508 (4) 190,911 Accounts receivable, less allowance 172,239 (48,184) 124,055 Inventory 359,667 (176,790) 182,877 Prepaid and other current assets 39,595 (10,156) 29,439 Total current assets 598,953 (62,622) 536,331 Net fixed assets 132,195 (12,553) 119,642 Net assets held for sale 26,262 - 26,262 Investment in affiliates 55,337 - 55,337 Goodwill 154,233 (19,089) 135,144 Deferred loan costs 11,489 (2,000) (5) 9,489 Prepaid pension assets 59,512 - 59,512 Other assets 45,135 (646) 44,489 Total Assets $1,083,116 $(96,910) $986,206 Bank notes payable ¤t maturities of debt $ 79,781 $ (299) $ 79,482 Accounts payable 84,797 (30,518) 54,279 Other accrued expenses 91,289 43,826 (6) 135,115 Total current 255,867 13,009 268,876 Long-term debt, less current maturities 412,261 (164,746) (7) 247,515 Other long-term liabilities 22,381 (5,969) 16,412 Retiree health care liabilities 43,284 - 43,284 Noncurrent income taxes 48,939 - 48,939 Minority interest in subsidiaries 69,178 25,052 (8) 94,230 Total liabilities 851,910 (133,411) 718,499 Total stockholders' equity 231,206 36,052 267,258 Total liabilities & stockholders' equity $ 1,083,116 $ (96,910) 986,206
NOTES TO THE UNAUDITED PRO FORMA FINANCIAL STATEMENTS (1) Represents the elimination of the results of operations associated with the Disposition of a portion of Banner's business (see note 2) and the associated reduction in interest expense due to the repayment of bank debt of Banner's subsidiaries. No investment income was recognized on the remaining holdings of AlliedSignal Inc. common stock. The Company estimates a remaining ownership of approximately 4.6 million shares of AlliedSignal Inc. common stock, representing less than 1% of AlliedSignal Inc.'s outstanding common stock. (2) Represents the reduction of Banner Hardware Group sales of $223,997 offset by $15,184 of additional sales recorded by the Fairchild Fasteners Group, which represented Fiscal 1997 intercompany sales to the Banner Hardware Group. These sales no longer require elimination as the Banner Hardware Group is now treated as a third party for pro forma purposes. The net result is a decrease in sales of $208,813 in Fiscal 1997. (3) Represents the reduction of Banner Hardware Group sales of $59,512 offset by $4,847 of additional sales recorded by the Fairchild Fasteners Group, which represented intercompany sales to the Banner Hardware Group in the first quarter of Fiscal 1998. These sales no longer require elimination as the Banner Hardware Group is now treated as a third party for pro forma purposes. The net result is a decrease in sales of $54,665 in the quarter ended September 28, 1997. (4) Represents a net increase of $172,508 in short-term investments. Banner will receive AlliedSignal Inc. stock of $345,000 in exchange for the Disposition. The offsetting decrease of $172,492 results from the repayment of Banner long-term debt, associated interest and transaction fees. (5) Represents the write-off of existing deferred financing fees of $2,000 related to the repayment of the debt of Banner's subsidiaries. (6) Represents (i) an increase of accrued expenses of $42,583 for deferred taxes associated with the Disposition; (ii) an increase of $10,000 in accruals for transaction fees, indemnifications and other costs associated with the transaction; (iii) a decrease of accrued interest of $2,447 associated with the defeasance of the Banner bank debt; and (iv) a decrease of $6,310 in accruals associated with the business being sold to AlliedSignal Inc. (7) Represents the redemption of $164,746 of long-term debt. (8) Represents the increase in the minority interest liability associated with Banner's increased net worth associated with the Disposition. EXHIBITS 2 (a) Asset Purchase Agreement dated as of December 8, 1997, among Banner Aerospace, Inc. and seven of its subsidiaries (Adams Industries, Inc., Aerospace Bearing Support, Inc., Aircraft Bearing Corporation, Banner Distribution, Inc., Burbank Aircraft Supply, Inc., Harco, Inc. and PacAero), AlliedSignal Inc. and AS BAR LLC (incorporated by reference to Banner Aerospace, Inc.'s Report on Form 8-K dated January 28, 1998). 2 (b) Asset Purchase Agreement dated as of December 8, 1997, among Banner Aerospace, Inc. and two of its subsidiaries (PB Herndon Aerospace, Inc. and Banner Aerospace Services, Inc.), AlliedSignal Inc. and AS BAR PBH LLC (incorporated by reference to Banner Aerospace, Inc.'s Report on Form 8-K dated January 28, 1998). SIGNATURES Pursuant to the requirements of the Securities Exchange Act of 1934, the Company has duly caused this report to the signed on its behalf by the undersigned hereunto duly authorized. For THE FAIRCHILD CORPORATION (Registrant) and as its Chief Financial Officer: By: Colin M. Cohen Senior Vice President and Chief Financial Officer Date: January 28, 1998 -----END PRIVACY-ENHANCED MESSAGE-----