8-K/A 1 SECURITIES AND EXCHANGE COMMISSION WASHINGTON, D.C. 20549 FORM 8-K/A CURRENT REPORT AMENDMENT NO. ONE Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934 Date of Report (Date of earliest event reported) January 17, 1995 ----------------- TRANS-LUX CORPORATION ------------------------------------------------- (Exact name of registrant as specified in charter) Delaware 1-2257 13-1394750 ---------------------------------------------------------------- (State or other jurisdiction (Commission (I.R.S. Employer of incorporation) File Number) Identification No.) 110 Richards Avenue, Norwalk, CT 06856-5090 -------------------------------------------- (Address of principal executive offices) Registrant's telephone number, including area code: (203) 853-4321 -------------- ------------------------------------------------------------- (Former name or former address, if changed since last report) Item 7. Financial Statements, Pro Forma Financial Information and Exhibits (a) Financial Statements of Business Acquired 1 - Independent Auditors' Report, Balance Sheet as of March 31, 1994 (As Restated), Statement of Operations and Retained Earnings for the year ended March 31, 1994 (As Restated), Statement of Cash Flows for the year ended March 31, 1994 (As Restated) and Notes to Financial Statements. 2 - Balance Sheet as of December 31, 1994, Statements of Operations and Retained Earnings for the nine months ended December 31, 1994 and December 31, 1993, Statements of Cash Flows for the nine months ended December 31, 1994 and December 31, 1993 and Note to Financial Statements (unaudited). (b) Pro Forma Financial Information Unaudited Pro Forma Consolidated Balance Sheet as of December 31,1994, Unaudited Pro Forma Consolidated Income Statement for the year ended December 31, 1994 and Note to Pro Forma Financial Statements. SIGNATURES Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized. TRANS-LUX CORPORATION By:/s/ Angela D. Toppi Angela D. Toppi Chief Financial Officer Dated: March 31, 1995 INTEGRATED SYSTEMS ENGINEERING, INC. Financial Statements for the Year Ended March 31, 1994 (As Restated) And Independent Auditors' Report INDEPENDENT AUDITORS' REPORT The Board of Directors of Trans-Lux Corporation: We have audited the accompanying balance sheet of Integrated Systems Engineering, Inc. as of March 31, 1994, and the related statements of operations and retained earnings, and of cash flows for the year then ended. 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 in accordance with generally accepted auditing standards. Those standards 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. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audit provides a reasonable basis for our opinion. In our opinion, such financial statements (as restated, see Note 10) present fairly, in all material respects, the financial position of the Company as of March 31, 1994, and the results of its operations and its cash flows for the year then ended in conformity with generally accepted accounting principles. As discussed in Note 1 to the financial statements, the Company changed its method of accounting for income taxes effective April 1, 1993 to conform with Statement of Financial Accounting Standards No. 109. /s/ Deloitte & Touche LLP Salt Lake City, Utah February 3, 1995 INTEGRATED SYSTEMS ENGINEERING, INC. BALANCE SHEET, MARCH 31, 1994 (RESTATED, SEE NOTE 10) ASSETS CURRENT ASSETS: Cash and cash equivalents (Note 1) $ 3,407 Receivables: Trade - net of allowance for doubtful accounts of $92,631 (Notes 5 and 6) 333,413 Other 27,049 Income tax refund (Notes 1 and 8) 22,297 Inventories (Notes 1, 3, 5, and 6) 1,046,827 Prepaid expenses 74,403 Deferred tax asset (Notes 1 and 8) 58,623 ---------- Total current assets 1,566,019 PROPERTY, PLANT AND EQUIPMENT - Net (Notes 1, 2, 4, and 6) 1,372,580 OTHER ASSETS: Purchased technology, patents, and trademark - net of accumulated amortization of $615,163 (Note 1) 434,270 Goodwill - net of accumulated amortization of $26,666 (Note 1) 73,334 Deferred tax asset (Notes 1 and 8) 123,740 ---------- TOTAL $3,569,943 ========== LIABILITIES AND STOCKHOLDER'S EQUITY CURRENT LIABILITIES: Note payable to bank (Note 5) $ 257,715 Current maturities of long term-debt (Note 6) 345,928 Accounts payable - trade 291,020 Accrued expenses: Payroll and related taxes 174,182 Other 102,960 Customer deposits 177,772 Accrued dealer credits 19,976 ---------- Total 1,369,553 ---------- LONG-TERM DEBT (Note 6) 902,276 ---------- COMMITMENTS AND CONTINGENCIES (Notes 6 and 7) STOCKHOLDER'S EQUITY: Common stock - $1 par value; 75,000 shares authorized; 29,488 shares issued 29,488 Additional paid-in capital 1,185,238 Retained earnings 823,969 Notes receivable - related parties (Notes 2 and 9) (740,581) ---------- Total stockholder's equity 1,298,114 ---------- TOTAL $3,569,943 ========== See notes to financial statements. INTEGRATED SYSTEMS ENGINEERING, INC. STATEMENT OF OPERATIONS AND RETAINED EARNINGS FOR THE YEAR ENDED MARCH 31, 1994 (RESTATED, SEE NOTE 10) SALES $5,159,156 COST OF GOODS SOLD 3,050,761 ---------- GROSS PROFIT 2,108,395 ---------- OPERATING EXPENSES: Selling 646,396 General and administrative 638,782 Research and development 359,590 Depreciation and amortization (Note 1) 177,766 ---------- Total operating expenses 1,822,534 ---------- INCOME FROM OPERATIONS 285,861 ---------- OTHER INCOME (EXPENSE): Interest expense (118,374) Other income (Note 2) 149,932 ---------- Total other income - net 31,558 ---------- INCOME BEFORE INCOME TAXES AND CUMULATIVE EFFECT OF CHANGE IN ACCOUNTING FOR INCOME TAXES 317,419 PROVISION FOR INCOME TAXES (Notes 1 and 8) (123,856) ---------- INCOME BEFORE CUMULATIVE EFFECT OF CHANGE IN ACCOUNTING FOR INCOME TAXES 193,563 CUMULATIVE EFFECT OF CHANGE IN ACCOUNTING FOR INCOME TAXES (Notes 1 and 8) 253,521 ---------- NET INCOME 447,084 RETAINED EARNINGS, BEGINNING OF YEAR 376,885 ---------- RETAINED EARNINGS, END OF YEAR $ 823,969 ========== See notes to financial statements. INTEGRATED SYSTEMS ENGINEERING, INC. STATEMENT OF CASH FLOWS FOR THE YEAR ENDED MARCH 31, 1994 (RESTATED, SEE NOTE 10) CASH FLOWS FROM OPERATING ACTIVITIES: Net income $ 447,084 Adjustments to reconcile net income to net cash provided by operating activities: Cumulative effect of change in accounting for income taxes (253,521) Depreciation and amortization 296,842 Bad debt expense 22,412 Additions to reserve for obsolete inventory 55,606 Deferred tax provision 71,158 Changes in operating assets and liabilities: Receivables (other than notes receivable) 77,898 Inventories (127,472) Prepaid expenses (35,245) Accounts payable - trade 101,274 Accrued expenses 74,486 Customer deposits 42,896 Accrued dealer credits (5,874) ---------- Net cash provided by operating activities 767,544 ---------- CASH FLOWS FROM INVESTING ACTIVITIES: Purchases of property, plant and equipment (137,127) Cash advanced for note receivable from related parties (439,449) Payments received on note receivable from related parties 22,342 ---------- Net cash used in investing activities (554,234) ---------- CASH FLOWS FROM FINANCING ACTIVITIES: Payments on note payable to bank (211,517) Proceeds from long-term debt 250,000 Principal payments on long-term debt (315,364) ---------- Net cash used in financing activities (276,881) ---------- NET DECREASE IN CASH AND CASH EQUIVALENTS (63,571) CASH AND CASH EQUIVALENTS AT BEGINNING OF YEAR 66,978 ---------- CASH AND CASH EQUIVALENTS AT END OF YEAR $ 3,407 ========== See notes to financial statements. INTEGRATED SYSTEMS ENGINEERING, INC. STATEMENT OF CASH FLOWS FOR THE YEAR ENDED MARCH 31, 1994 (RESTATED, SEE NOTE 10) SUPPLEMENTAL DISCLOSURES OF CASH FLOW INFORMATION: Cash paid during the year for: Interest $ 118,300 ========== Income taxes $ 75,000 ========== SUPPLEMENTAL DISCLOSURES OF NONCASH INVESTING AND FINANCING ACTIVITIES: During the year ended March 31, 1994, the Company entered into notes payable of $18,166 in connection with the purchase of an automobile (see Note 6). In addition, the Company traded in an old automobile with a net book value of $9,266 towards the purchase of the above mentioned automobile which is included in the carrying cost of the new automobile. The Company also financed the purchase of an airplane, equipment, and certain building improvements with notes payable in the amount of $430,000. In 1994, the Company also received an airplane and other fixtures valued at $181,417 as payment on notes receivable from a related company (see Note 2). See notes to financial statements. INTEGRATED SYSTEMS ENGINEERING, INC. NOTES TO FINANCIAL STATEMENTS 1. ORGANIZATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES Integrated Systems Engineering, Inc. (the "Company") was incorporated in the State of Utah in March 1973. The Company manufactures computerized electronic signs. The following is a summary of the Company's significant accounting and reporting policies: Inventories - Inventories are stated at the lower of cost (on a first-in, first-out basis) or market. Property, Plant and Equipment - Property, plant, and equipment is stated at cost. Depreciation and amortization is provided over the estimated useful lives of the assets using the straight-line and accelerated methods, as noted below: Building and improvements - 20 - 25 years Machinery and equipment - 3 - 5 years Autos, trucks and airplanes - 5 years Furniture and fixtures - 3 - 5 years Purchased Technology, Patents, and Trademark and Goodwill - Purchased technology, patents, and trademark are stated at cost. Purchased technology and patents are being amortized using the straight-line method over 17 years. The purchased trademark is being amortized using the straight-line method over 10 years. Goodwill is being amortized using the straight-line method over 40 years. Income Taxes - Effective April 1, 1993, the Company adopted the provisions of Statement of Financial Accounting Standards No. 109 (FAS 109), "Accounting for Income Taxes". FAS 109 requires an asset and liability approach for financial accounting and reporting for income taxes which differs from the method previously utilized. Prior to the adoption of FAS 109, the Company accounted for income taxes in accordance with Statement of Financial Accounting Standards No. 96. Deferred income taxes are provided for temporary differences in income for financial statement purposes and income tax purposes. The change in accounting for income taxes had no effect on income before taxes in 1994; net income for 1994 was increased $253,521 for the cumulative effect of the change in accounting related to the years prior to 1994, which were not restated. Statement of Cash Flows - For purposes of the statement of cash flows, the Company considers all interest-bearing deposits with an original maturity date of three months or less to be cash equivalents. 2. ADVANCES AND NOTES RECEIVABLE During the year ended March 31, 1994, the Company received an airplane and other fixtures valued at $181,417 from Aero Engineering, Inc. ("Aero"), a business owned by the Company's president and sole stockholder, as payments on amounts previously advanced to Aero in the amount of $298,003. In addition, during the year ended March 31, 1994, the Company advanced $623,995 to Aero and leased employees to Aero at a cost of $256,769. The Company did not recognize the amount for leased employees as income since Aero reimbursed the Company for the actual cost of the employees. Additionally, the Company recognized $38,451 in interest income from the advances receivable described above and recognized $26,642 in lease income from Aero for the rental of hanger space and equipment to Aero. Agreements were entered into during the year ended March 31, 1994 between the Company and Aero formalizing $715,746 in unsecured, short-term advances receivable from Aero at an interest rate of 8.5%. Advances in the amount of $24,835 were not formalized into notes (see Note 9). Such amounts have been presented as a reduction of stockholder's equity. 3. INVENTORIES Inventories consisted of the following at March 31, 1994: Raw materials $ 602,693 Work-in process 231,587 Finished goods 174,412 Supplies 180,634 Reserve for obsolete inventory (142,499) ---------- Total $1,046,827 ========== 4. PROPERTY, PLANT AND EQUIPMENT Property, plant and equipment consisted of the following at March 31, 1994: Land $ 78,787 Building and improvements 909,584 Machinery and equipment 1,315,182 Autos, trucks and airplane 678,120 Furniture and fixtures 417,789 ---------- Total 3,399,462 Less accumulated depreciation (2,026,882) ---------- Property, plant and equipment-net $1,372,580 ========== 5. NOTE PAYABLE The Company has a line of credit of $650,000 available from a bank under which the Company had borrowed $257,715 at March 31, 1994. The line of credit expires June 1995 (as extended) and bears interest payable quarterly at the bank's prime lending rate (6% at March 31, 1994) plus 1.5% and is collateralized by trade receivables, inventories, and the personal guaranty of the Company's stockholder and his wife. In January 1995, all amounts outstanding under this line were paid in full (see Note 9). 6. LONG-TERM DEBT Long-term debt consisted of the following at March 31, 1994: Note payable to a bank; payable in monthly installments of $9,922, including interest at the bank's prime rate (6% at March 31, 1994) plus 1%, through November 1996; collateralized by land, buildings, machinery and equipment, assignment of life insurance policy and personal guaranty of the Company's stockholder and his wife $ 285,371 Note payable to the Small Business Administration; payable in monthly installments of $6,298, including interest at 8.858%, through January 1997; collateralized by land, buildings, machinery and equipment, and personal guaranty of the Company's stockholder 176,995 Note payable to Bear River Association of Governments; payable in monthly installments of $900, including interest at 9%, through January 2007; collateralized by land, machinery and equipment, and personal guaranty of the Company's stockholder 76,072 Note payable to a bank; payable in monthly installments of $3,793, including interest at the bank's prime rate (6% at March 31, 1994) plus 1%, through May 1994; collateralized by machinery and equipment 2,111 Note payable to Utah Technology Finance Corporation, non-interest bearing, payable as royalty of 3% of revenues 42,655 Installment contract payable to a bank; payable in monthly installments of $736 at the bank's prime rate (6% at March 31, 1994) plus 1.75%, through January 1996; collateralized by an airplane 12,412 Note payable to a bank; payable in monthly installments of $2,215, including interest at the bank's prime rate (6% at March 31, 1994) plus 1.5%, through February 1998; collateralized by building improvements 87,991 Note payable to The CIT Group/Equipment Financing, Inc.; payable in monthly installments of $6,870, including interest at 7.85%, through February 1999; collateralized by an airplane 335,355 Note payable to a bank; payable in monthly installments of $5,035, including interest at the bank's prime rate (6% at March 31, 1994) plus 1.75%, through March 1998; collateralized by machinery, equipment, inventory, accounts receivable, and a building 211,076 Note payable to a bank; payable in monthly installments of $360, including interest at the bank's prime rate (6% at March 31, 1994) plus 1%, through March 1999; collateralized by an automobile 18,166 ---------- Total 1,248,204 Less current maturities 345,928 ---------- Long-term portion $ 902,276 ========== In January 1995, all of the above notes were paid in full (see Note 9). Future maturities of long-term debt as of March 31, 1994 were as follows: Year ending March 31: 1995 $ 345,928 1996 324,465 1997 276,668 1998 166,972 1999 82,743 Thereafter 51,428 ---------- Total $1,248,204 ========== 7. PROFIT SHARING PLAN The Company has a defined contribution profit sharing plan covering all employees qualifying as to age and length of service. The Company's annual amount contributed to the plan is equal to 2% of the qualified compensation of plan participants. Contributions are fully vested upon completion of 7 years of service. The Company expensed contributions of $22,705 to the plan for the year ended March 31, 1994. 8. INCOME TAXES Effective April 1, 1993, the Company adopted the provisions of FAS 109, "Accounting for Income Taxes" (see Note 1). Deferred tax assets and liabilities as of March 31, 1994 consisted of the following temporary differences and carryforward items:
Long- Current Term ASSETS: Net operating loss carryforward $ 87,286 Alternative minimum taxes 53,328 Business credit 31,304 Bad debt allowance $35,200 Warranty reserve 13,300 Other 10,123 1,187 ------- -------- Total 58,623 173,105 ------- -------- LIABILITIES - Depreciation (49,365) ------- -------- NET DEFERRED TAXES $58,623 $123,740 ======= ========
Tax expense for the year ended March 31, 1994 consisted of the following: Current $ 52,698 Deferred 71,158 -------- Total $123,856 ======== The difference between income taxes at the federal statutory rate and the effective rate for income taxes reported in the financial statements differs for the following reasons: Federal statutory rate 35 % State income taxes 5 % Graduated rates (1)% ---- Effective rate 39 % ==== At March 31, 1994 for federal income tax return purposes, the Company had approximately $230,000 of net operating loss carryforwards available to offset taxable income of future years. The carryforwards expire in 2003. 9. SUBSEQUENT EVENT On January 17, 1995, Trans-Lux ISE Corporation, a wholly owned subsidiary of Trans-Lux Corporation, acquired all the outstanding shares of the Company for an aggregate purchase price of approximately $2,700,000 plus payment for non-compete and consulting fees. In connection with the closing of the sale, the notes and advances receivable from the former stockholder and affiliate (in the approximate amount of $658,000) were paid (see Note 2). The outstanding balances owing under the line of credit (see Note 5) and the long-term debt of the Company (see Note 6) were paid in full from funds advanced to the Company from Trans-Lux ISE Corporation. 10. ADJUSTMENTS TO FINANCIAL STATEMENTS Subsequent to the Company's previous issuance of its unaudited financial statements for the year ended March 31, 1994, the Company has determined that certain amounts in its previously issued financial statements require adjustment. Such adjustments consist principally of increases in the allowance for doubtful accounts, accounts payable and accrued warranty expense. In addition, in the course of preparing financial statements to be included in an 8-K filing with the Securities and Exchange Commission, the Company reclassified notes receivable from related parties from current assets to stockholder's equity. Accordingly, the accompanying financial statements for the year ended March 31, 1994 have been restated. A summary of the principal effects of the restatement is as follows:
As Previously Effect of As Reported Adjustments Restated Balance Sheet as of March 31, 1994: Trade receivables $ 363,325 $ (29,912) $ 333,413 Current deferred tax asset 23,833 34,790 58,623 Property, plant and equipment 1,376,525 (3,945) 1,372,580 Accounts payable 268,324 22,696 291,020 Other accrued expenses 67,960 35,000 102,960 Retained expenses 880,732 (56,763) 823,969 Total stockholder's equity 2,095,458 (797,344) 1,298,114 Statement of Operations for the year: ended December 31, 1994: Cost of goods sold $2,993,065 $57,696 $3,050,761 General and administrative expenses 608,870 29,912 638,782 Research and development expenses 355,645 3,945 359,590 Provision for income taxes 158,646 (34,790) 123,856 Net income 503,847 (56,763) 447,084
INTEGRATED SYSTEMS ENGINEERING, INC. BALANCE SHEET DECEMBER 31, 1994 (UNAUDITED) ------------------------------------------------------- ASSETS CURRENT ASSETS: Cash and cash equivalents $ $ 224 Receivables: Trade - net of allowance for doubtful accounts of $93,471 387,106 Other 18,263 Tax refund 36,000 Inventories: Raw materials 538,078 Work-in-process 154,302 Finished goods 388,313 Less Reserve for obsolete inventory (58,331) ------------ 1,022,362 Prepaid expenses 52,500 Deferred tax asset 58,623 ----------- Total current assets 1,575,078 PROPERTY, PLANT AND EQUIPMENT 3,022,501 Less Accumulated depreciation (2,034,073) ------------ 988,428 OTHER ASSETS: Purchased technology, patents, and trademark - net of accumulated amortization of $662,831 386,602 Goodwill - net of accumulated amortization of $28,541 71,459 Deferred tax asset 123,740 ----------- TOTAL $ 3,145,307 =========== LIABILITIES AND STOCKHOLDER'S EQUITY CURRENT LIABILITIES: Note payable to bank 368,186 Current maturities of long term-debt 326,076 Accounts payable - trade 374,134 Accrued expenses: Payroll and related taxes 333,633 Other 84,845 Customer deposits 72,227 Accrued dealer credits 3,666 ----------- Total 1,562,767 ----------- LONG-TERM DEBT 528,586 ----------- STOCKHOLDER'S EQUITY: Common stock - $1 par value; 75,000 shares authorized; 29,488 shares issued 29,488 Additional paid-in capital 1,185,238 Retained earnings 813,353 Notes receivable - related parties (974,125) ----------- Total stockholder's equity 1,053,954 ----------- TOTAL $ 3,145,307 ===========
See note to financial statements. INTEGRATED SYSTEMS ENGINEERING, INC. STATEMENT OF OPERATIONS AND RETAINED EARNINGS FOR THE NINE MONTHS ENDED DECEMBER 31, 1994 AND 1993 (UNAUDITED) ------------------------------------------------------------------
1994 1993 SALES $ 3,548,612 $ 4,017,609 COST OF GOODS SOLD 2,100,105 2,349,449 ----------- ------------ GROSS PROFIT 1,448,507 1,668,160 ----------- ------------ OPERATING EXPENSES: Selling 439,398 480,100 General and administrative 799,772 443,583 Research and development 239,208 272,507 Depreciation and amortization 126,959 131,777 ---------- ------------- Total operating expenses 1,605,337 1,327,967 ---------- ------------- INCOME (LOSS) FROM OPERATIONS (156,830) 340,193 ---------- ------------- OTHER INCOME (EXPENSE): Gain on sale of assets 87,179 0 Interest expense (106,144) (91,431) Other income 165,279 113,747 ---------- ------------- Total other income - net 146,314 22,316 ---------- ------------- INCOME (LOSS) BEFORE INCOME TAXES (10,516) 362,509 PROVISION FOR INCOME TAXES (100) (50,328) ---------- ------------- INCOME BEFORE CUMULATIVE EFFECT OF CHANGE IN ACCOUNTING FOR INCOME TAXES (10,616) 312,181 CUMULATIVE EFFECT OF CHANGE IN ACCOUNTING FOR INCOME TAXES 0 253,521 ---------- ------------- NET INCOME (10,616) 565,702 RETAINED EARNINGS, BEGINNING OF PERIOD 823,969 376,886 ---------- ------------- RETAINED EARNINGS, END OF PERIOD $ 813,353 $ 942,588 ========= =========
See note to financial statements. INTEGRATED SYSTEMS ENGINEERING, INC. STATEMENTS OF CASH FLOWS FOR THE NINE MONTHS ENDED DECEMBER 31, 1994 AND 1993 (UNAUDITED) -----------------------------------------------------------------
1994 1993 CASH FLOWS FROM OPERATING ACTIVITIES: Net income (loss) $ (10,616) $ 312,181 Adjustments to reconcile net income to net cash provided by operating activities: Depreciation and amortization 219,311 225,605 Bad debt expense (840) (11,764) Additions to reserve for obsolete inventory (84,168) 61,633 Changes in operating assets and liabilities: Receivables (other than notes receivable) (57,770) 41,486 Inventories 108,633 (63,376) Prepaid expenses 21,903 (36,884) Accounts payable - trade 83,114 (4,094) Accrued expenses 141,336 28,751 Customer deposits (105,545) (50,699) Accrued dealer credits (16,310) (5,416) ----------- ------------- Net cash provided by operating activities 299,048 497,423 ----------- ------------- CASH FLOWS FROM INVESTING ACTIVITIES: Purchases of property, plant and equipment (114,520) (284,998) Cash advanced for note receivable from related parties (233,544) (271,309) Payments received on note receivable from related parties 0 25,471 Proceeds from sale of assets 328,904 0 ----------- ------------- Net cash used in investing activities (19,160) (530,836) ----------- ------------- CASH FLOWS FROM FINANCING ACTIVITIES: Net proceeds from (payments on) note payable to bank 110,471 (45,209) Proceeds from long-term debt 133,000 250,000 Principal payments on long-term debt (526,542) (235,766) ----------- ------------- Net cash used in financing activities (283,071) (30,975) ----------- ------------- NET DECREASE IN CASH AND CASH EQUIVALENTS (3,183) (64,388) CASH AND CASH EQUIVALENTS AT BEGINNING OF PERIOD 3,407 66,978 ----------- ------------- CASH AND CASH EQUIVALENTS AT END OF PERIOD $ 224 $ 2,590 ========= =========== Interest Paid $ 103,590 $ 85,973 Income Taxes Paid 18,000 56,870
See note to financial statements INTEGRATED SYSTEMS ENGINEERING, INC. NOTE TO FINANCIAL STATEMENTS DECEMBER 31, 1994 UNAUDITED ------------------- NOTE 1 - Basis for Presentation Financial information included herein is unaudited, however, such information reflects all adjustments which are, in the opinion of management, necessary for the fair presentation of the financial statements for the interim periods. The results for the interim periods are not necessarily indicative of the results to be expected for the full year. It is suggested that the financial statements be read in conjunction with the financial statements and notes included in the Company's audited financial statements for the year ended March 31, 1994. TRANS-LUX CORPORATION AND SUBSIDIARIES UNAUDITED PRO FORMA FINANCIAL INFORMATION On January 17, 1995, the Company, through its subsidiary Trans-Lux ISE Corporation, acquired all of the capital stock of Integrated Systems Engineering, Inc. ("ISE"), a Utah corporation located in Logan, Utah, for a cash purchase price of approximately $2.7 million plus payment for noncompete and consulting fees. The purchase was financed by working capital and a new loan and security agreement for $3.3 million. On the date of acquisition the Company retired the long-term debt of ISE of approximately $1.3 million. ISE is a manufacturer of electronic outdoor display equipment and Trans-Lux ISE Corporation plans to continue those activities. Assets include land, building, machinery and equipment, accounts receivable and inventory. The purchase price allocation used in the pro forma information is based on estimated fair values and is subject to change as additional information becomes known. The Company's preliminary pro forma financial results are presented to provide information on the impact of the acquisition of ISE to the results of operations of the Company for the year ended December 31, 1994. Pro forma financial information reflects the Company's preliminary pro forma results of operations as if the acquisition had occurred as of January 1, 1994. The pro forma financial information should be read in conjunction with the Company's consolidated financial statements. The preliminary pro forma information does not purport to represent what the Company's results of operations or financial position would have been if the acquisition, in fact, had occurred on January 1, 1994, or to project the Company's results of operations or financial position for any future period or at any future date. Trans-Lux Corporation and Subsidiaries Preliminary Pro Forma Balance Sheet December 31, 1994 (Unaudited) --------------------------------------
PRO FORMA PRO FORMA HISTORICAL ADJUSTMENT RESULTS ----------- ------------ ----------- Assets ---------- Current assets $6,154,000 $1,099,000 $7,253,000 Long-term assets 47,153,000 3,462,000 50,615,000 ------------ ---------- ----------- Total assets $53,307,000 $4,561,000 $57,868,000 =========== ========== ========== Liabilities and Stockholders' Equity ------------------------------------- Current liabilities $8,237,000 $1,689,000 $9,926,000 Long-term liabilities 24,546,000 2,747,000 27,293,000 Stockholders' equity 20,524,000 125,000 20,649,000 ------------ ---------- ----------- Total Liabilities and Stockholders' equity $53,307,000 $4,561,000 $57,868,000 =========== ========== ===========
Trans-Lux Corporation and Subsidiaries Preliminary Pro Forma Income Statement For the year ended December 31, 1994 (Unaudited) ------------------------------------------------
PRO FORMA PRO FORMA HISTORICAL ADJUSTMENT RESULTS ----------- ----------- ----------- Gross revenues $33,742,000 $4,542,000 $38,284,000 ========== ========== ========== Gross profit from operations $14,329,000 $2,717,000 $17,046,000 ========== ========== ========== Net income $1,314,000 $125,000 $1,439,000 ========== ========== ========== Shares-Primary 1,260,492 1,260,492 Earnings per share-Primary (1) $1.04 $0.10 $1.14 ========== ========== ========== Shares-Fully diluted 1,943,317 1,943,317 Earnings per share-Fully diluted (1) $0.94 $0.10 $1.04 ========== ========== ==========
(1) The historical 1994 information reflects the positive impact of a settlement of a prior year assessment of income taxes and related interest expense incurred from a 1986 state income tax audit of approximately $360,000 ($0.29 EPS-primary and $0.18 EPS-fully diluted). TRANS-LUX CORPORATION AND SUBSIDIARIES NOTE TO PRO FORMA CONSOLIDATED FINANCIAL INFORMATION (Unaudited) Note 1 - Basis of Presentation The purchase price of approximately $2.7 million was allocated to cash, accounts receivable, inventories, intangibles, deferred tax asset, and property plant and equipment based on the estimated fair market values at the date of purchase. Property, plant and equipment are being depreciated over their useful lives using the straight line method. Goodwill is being amortized using the straight line basis over twenty years. Taxes on income are accrued at an estimated effective rate of 39%. Additional pro forma adjustments include the payment of ISE's existing long-term debt and the assumption of new long-term debt, and related interest expense, used to finance the acquisition, depreciation of the fair value of assets purchased and amortization of goodwill and a noncompete agreement.