-----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, Piy/TESb8wTmRs+Pjdngx6SeA2cghfhgytadAfiQizeKg7VlG+xE52/e+Di5or0o GGElIhdwvaTlbifCd2f4yw== 0000099106-97-000010.txt : 19970716 0000099106-97-000010.hdr.sgml : 19970716 ACCESSION NUMBER: 0000099106-97-000010 CONFORMED SUBMISSION TYPE: 8-K/A PUBLIC DOCUMENT COUNT: 1 CONFORMED PERIOD OF REPORT: 19970501 ITEM INFORMATION: Financial statements and exhibits FILED AS OF DATE: 19970715 SROS: AMEX FILER: COMPANY DATA: COMPANY CONFORMED NAME: TRANS LUX CORP CENTRAL INDEX KEY: 0000099106 STANDARD INDUSTRIAL CLASSIFICATION: MISCELLANEOUS MANUFACTURING INDUSTRIES [3990] IRS NUMBER: 131394750 STATE OF INCORPORATION: DE FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 8-K/A SEC ACT: 1934 Act SEC FILE NUMBER: 001-02257 FILM NUMBER: 97640836 BUSINESS ADDRESS: STREET 1: 110 RICHARDS AVE CITY: NORWALK STATE: CT ZIP: 06856-5090 BUSINESS PHONE: 2038534321 MAIL ADDRESS: STREET 1: 110 RICHARDS AVENUE CITY: NORWALK STATE: CT ZIP: 06856-5090 8-K/A 1 SECURITIES AND EXCHANGE COMMISSION WASHINGTON, D.C. 20549 FORM 8-K/A CURRENT REPORT AMENDMENT NO. 1 Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934 Date of Report (Date of earliest event reported) May 1, 1997 ----------- TRANS-LUX CORPORATION ---------------------------------------------------- (Exact name of registrant as specified in its 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) (Zip Code) 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 Businesses Acquired 1 - Independent Auditors' Report, Statements of Net Assets Sold as of March 31, 1997 and 1996, Statements of Operations and Divisional (Deficit) Equity for the years ended March 31, 1997 and 1996, Statements of Cash Flows for the years ended March 31, 1997 and 1996 and Notes to Financial Statements. (b) Pro Forma Financial Information 1 - Unaudited Pro Forma Balance Sheet as of March 31, 1997, Unaudited Pro Forma Income Statements for the year ended December 31, 1996 and for the three months ended March 31, 1997 and Notes to Pro Forma Financial Information. 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: July 15, 1997 FAIR-PLAY (a division of Fairtron Corporation) Financial Statements as of March 31, 1997 and 1996 and for the Years Then Ended and Independent Auditors' Report INDEPENDENT AUDITORS' REPORT To the Board of Directors and Stockholders Fairtron Corporation: We have audited the accompanying statements of net assets sold of Fair-Play (a division of Fairtron Corporation) as of March 31, 1997 and 1996, and the related statements of operations and divisional (deficit) equity, and cash flows for the years then ended. These financial statements are the responsibility of Fairtron Corporation's management. Our responsibility is to express an opinion on these financial statements based on our audits. We conducted our audits 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 audits provide a reasonable basis for our opinion. In our opinion, such financial statements present fairly, in all material respects, the net assets sold of Fair-Play as of March 31, 1997 and 1996, and the results of its operations and its cash flows for the years then ended in conformity with generally accepted accounting principles. As discussed in Note 2 to the financial statements, Trans-Lux Midwest Corporation purchased substantially all assets and assumed substantially all liabilities of Fair-Play effective May 1, 1997. /s/ Deloitte & Touche LLP Des Moines, Iowa May 2, 1997
FAIR-PLAY (a division of Fairtron Corporation) STATEMENTS OF NET ASSETS SOLD MARCH 31, 1997 AND 1996 (IN THOUSANDS) -------------------------------------------------------------------------- 1997 1996 ASSETS CURRENT ASSETS: Cash and cash equivalents $1,548 Receivables 1,946 $2,205 Inventories 2,026 3,020 Prepaid expenses and other current assets 52 171 ----- ----- Total current assets 5,572 5,396 PROPERTY, PLANT AND EQUIPMENT, NET 1,122 1,397 CONTRACTS RECEIVABLE 122 181 ADVERTISING RIGHTS 17 119 OTHER ASSETS 67 169 ----- ----- TOTAL ASSETS $6,900 $7,262 ===== ===== LIABILITIES AND DIVISIONAL (DEFICIT) EQUITY CURRENT LIABILITIES: Checks in excess of bank balances $ 115 Notes payable $2,758 2,758 Notes payable to related parties 363 Current portion of long-term debt 60 93 Accounts payable 1,850 1,870 Accrued expenses 1,210 863 ----- ----- Total current liabilities 6,241 5,699 LONG-TERM DEBT 689 750 NOTES PAYABLE TO RELATED PARTIES 267 OTHER LONG-TERM LIABILITIES 382 206 ----- ----- Total liabilities 7,312 6,922 ----- ----- DIVISIONAL (DEFICIT) EQUITY (412) 340 ----- ----- TOTAL LIABILITIES AND DIVISIONAL (DEFICIT) EQUITY $6,900 $7,262 ===== ===== See notes to financial statements.
FAIR-PLAY (a division of Fairtron Corporation) STATEMENTS OF OPERATIONS AND DIVISIONAL (DEFICIT) EQUITY FOR THE YEARS ENDED MARCH 31, 1997 AND 1996 (IN THOUSANDS) ------------------------------------------------------------------------- 1997 1996 NET SALES $14,571 $13,722 COST OF GOODS SOLD 12,260 11,335 ------ ------ Gross profit 2,311 2,387 SERVICE, SALES AND ADMINISTRATIVE EXPENSES 2,952 2,980 ------ ------ Operating loss (641) (593) OTHER INCOME (EXPENSE): Other income (expense) 15 (59) Interest expense (450) (413) ------ ------ Total other expense (435) (472) ------ ------ LOSS BEFORE INCOME TAX BENEFIT (1,076) (1,065) INCOME TAX BENEFIT - 164 ------ ------ NET LOSS (1,076) (901) DIVISIONAL EQUITY, BEGINNING OF YEAR 340 1,113 ADVANCES FROM PARENT COMPANY, NET 324 128 ------ ------ DIVISIONAL (DEFICIT) EQUITY, END OF YEAR $ (412) $ 340 ====== ====== See notes to financial statements.
FAIR-PLAY (a division of Fairtron Corporation) STATEMENTS OF CASH FLOWS FOR THE YEARS ENDED MARCH 31, 1997 AND 1996 (IN THOUSANDS) -------------------------------------------------------------------------- 1997 1996 CASH FLOWS FROM OPERATING ACTIVITIES: Net loss $(1,076) $(901) Adjustments to reconcile net loss to net cash provided by operating activities: Depreciation and amortization 485 348 Loss on sale of fixed assets 73 2 Provision for bad debts 4 20 Changes in: Receivables 255 476 Inventories 994 32 Prepaid expenses and other current assets 119 19 Contracts receivable 59 (28) Advertising rights (16) (97) Other assets (4) 31 Accounts payable (20) 476 Accrued expenses 347 (262) Other long-term liabilities 176 29 ----- --- Net cash provided by operating activities 1,396 145 ----- --- CASH FLOWS FROM INVESTING ACTIVITIES: Proceeds from sale of property, plant and equipment 4 Purchases of property, plant and equipment (59) (426) ----- --- Net cash used in investing activities (59) (422) CASH FLOWS FROM FINANCING ACTIVITIES: Checks in excess of bank balances (115) 115 Proceeds from long-term debt and notes payable 95 14 Principal payments on long-term debt and notes payable (93) (83) Net activity on line of credit (84) Advances from Parent Company, net 324 128 ----- --- Net cash provided by financing activities 211 90 ----- --- NET CHANGE IN CASH AND CASH EQUIVALENTS 1,548 (187) CASH AND CASH EQUIVALENTS, BEGINNING OF YEAR 187 ----- --- CASH AND CASH EQUIVALENTS, END OF YEAR $1,548 $ ===== === SUPPLEMENTAL DISCLOSURES OF CASH FLOW INFORMATION: Cash paid during the year for: Interest $ 428 $426 ===== === Income taxes $ $ 10 ===== === See notes to financial statements.
FAIR-PLAY (a division of Fairtron Corporation) NOTES TO FINANCIAL STATEMENTS FOR THE YEARS ENDED MARCH 31, 1997 AND 1996 (IN THOUSANDS) -------------------------------------------------------------------------- 1. REPORTING ENTITY Fair-Play manufactures athletic scoreboards, timers and related products in its Des Moines, Iowa facilities. Fair-Play is a division of Fairtron Corporation (Fairtron). Fairtron also has another division, ATHCO, and an 80% owned subsidiary, Fibrelite. 2. SALE OF COMPANY Pursuant to the Purchase of Assets Agreement dated as of April 30, 1997, Fairtron sold to Trans-Lux Midwest Corporation (Trans-Lux) the assets of the Fair-Play division except for the cash value of officer's life insurance, certain advertising rights, intercompany receivables, deferred income taxes and certain prepaid assets. In exchange for the assets, Trans-Lux paid cash of $450 (subject to adjustment based on an agreed upon formula) and assumed certain liabilities. Additionally, Trans-Lux will make payments equal to 4% of annual catalog sales in excess of $8,000 for each of the next five years not to exceed $100 per year and $250 in the aggregate. The agreement also includes a consulting noncompete agreement for the next eight years. 3. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES The following is a summary of significant accounting policies used by Fair-Play. Revenue Recognition - Fair-Play sells its products for a predetermined price or for the right to sell advertising space on the product for a specified number of years. If the price is predetermined, revenue is recognized upon shipment. When Fair-Play sells advertising space, the present value of the revenues and a ratable portion of the related costs of the scoreboard are recognized currently with the remaining cost being capitalized and amortized over the period the advertising rights are held. Cash and Cash Equivalents - For purposes of the statements of cash flows, Fair-Play considers demand deposit accounts maintained at financial institutions and all highly liquid investments purchased with a maturity of three months or less to be cash and cash equivalents. Inventories - Raw materials inventory is valued at the lower of cost (first-in, first-out) or net realizable value. Work in process and finished product inventories are stated at cost including allocable production and overhead costs. Property, Plant, and Equipment - Property, plant, and equipment are stated at cost of acquisition or, for display boards, at cost to manufacture. Depreciation is calculated using the straight-line and accelerated methods over the estimated useful lives of the assets which range from three to thirty-five years. Contracts Receivable Sold With Recourse - Fair-Play records the transfer of contracts receivable with recourse as a sale once they have surrendered control of the future economic benefits relating to the receivable, can reasonably estimate their obligation under the recourse provisions, and have no obligation to repurchase the receivables except pursuant to the recourse provisions in the event of default. Fair-Play maintains a security interest in the installed scoreboards underlying the original contracts. Income Taxes - Fair-Play is included in the consolidated income tax returns of Fairtron. For financial statement purposes, income tax benefit is recorded as if Fair-Play filed a separate income tax return. Income taxes are provided on income reported in the financial statements. 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 and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates. 4. RECEIVABLES
Receivables are summarized as follows: 1997 1996 Trade receivables, net of allowance for doubtful accounts of $41 and $15 at March 31, 1997 and 1996, respectively $1,893 $2,189 Current portion of contracts receivable 65 18 Interest receivable 1 Due to employees (12) (3) ----- ----- $1,946 $2,205
===== ===== 5. INVENTORIES
Inventories are summarized as follows: 1997 1996 Raw materials and nonprocessed components $1,348 $1,012 Work in process 374 1,394 Finished products 304 614 ----- ----- $2,026 $3,020 ===== =====
6. PROPERTY, PLANT, AND EQUIPMENT
Property, plant, and equipment is summarized as follows: 1997 1996 Land $ 78 $ 78 Buildings and improvements 1,167 1,167 Machinery, equipment, and fixtures 1,837 1,972 Leasehold improvements 153 155 Equipment under capital leases 235 235 Vehicles 5 5 ----- ----- 3,475 3,612 Accumulated depreciation and amortization (2,353) (2,215) ----- ----- $1,122 $1,397 ===== =====
Accumulated amortization relating to equipment under capital leases was approximately $117 and $94 as of March 31, 1997 and 1996, respectively. Amortization expense recognized on this equipment has been included in depreciation expense. 7. DEBT Notes Payable - As of March 31, 1997, Fairtron had a working capital line of credit that allowed maximum borrowings of $750. The outstanding balance was $408 at March 31, 1997. Fairtron also had a revolving term loan which provided maximum borrowings of $2,350. The outstanding balance was $2,350 as of March 31, 1997. The balance was partially guaranteed by the majority shareholder of Fairtron and was collateralized by an assignment of a life insurance policy on the shareholder and substantially all assets of Fairtron other than mortgaged real estate. The agreements contained certain covenants including minimum financial ratios, minimum net worth and net income, capital expenditures, and research and development expenditures. The revolving term loan agreement limited borrowings to prescribed percentages of accounts receivable, contracts receivable, inventory and unencumbered equipment. Interest accrued at the base rate plus 2% (10.50% as of March 31, 1997) and was payable monthly. Fairtron was not in compliance with various covenants in these agreements at March 31, 1997. The line of credit and revolving term loan were modified on April 1, 1997. The modified agreements extended the maturity date on the line of credit and the revolving term loan to May 1, 1997. In connection with the sale of Fair-Play discussed in Note 2, the above amounts were paid by Trans-Lux. Long-Term Debt - As of March 31, 1997, long-term debt consisted of the following: Mortgage loan with monthly payments of principal and interest at 8.25% through March 1, 2004. The loan is collateralized by a first mortgage on certain land and buildings. The agreement includes certain covenants including, among others, maintenance of escrow deposits for taxes and other charges. $726 Obligation under capital lease (Note 8) 23 --- 749 Current portion 60 --- $689 === Maturities of long-term debt and notes payable are as follows: Years Ending March 31, 1997 $60 1998 40 1999 44 2000 47 2001 51 Thereafter 507 --- $749 === 8. LEASES Fairtron leases certain equipment and business property under operating leases which expire over the next four years. The following is a schedule of future minimum lease payments required under operating leases that have initial or remaining noncancelable lease terms in excess of one year as of March 31, 1997: Year Ending March 31, 1998 $220 1999 112 2000 66 2001 38 --- Total minimum lease payments $436 === Rent expense on operating leases for the years ended March 31, 1997 and 1996 was approximately $233 and $146, respectively. Fair-Play leases certain equipment under a capital lease. The final payment on the capital lease of $23 is due April 1, 1997. 9. INCOME TAXES
The components of income tax benefit are as follows: 1997 1996 Current $ - $164 Deferred - - --- --- $ - $164 === ===
The difference between the recorded income tax benefit and the amounts computed at the federal statutory income tax rate are as follows for the years ended March 31, 1997 and 1996:
1997 1996 ------------- ------------- Loss before income taxes at the Federal statutory income tax rate $366 34.0 % $362 34.0 % Net operating loss carryforwards (286) (26.6) (131) (12.4) Meals and entertainment (18) (1.7) (25) (2.3) State income taxes, net of federal benefit 21 2.0 21 2.0 Other (1) (0.1) (3) (0.3) Deferred taxes for temporary bases differences (82) (7.6) (60) (5.6) --- ---- --- ---- Income tax benefit $ - - % $164 15.4 % === ==== === ====
As discussed in Note 2, Trans-Lux did not acquire deferred income taxes; therefore, the tax effect of changes in bases differences for financial reporting and income tax return purposes are included as a reconciling item between income taxes at the Federal statutory rate and the income tax benefit in the statement of operations. 10. DEFINED CONTRIBUTION RETIREMENT PLAN Fairtron has a contributory 401(k) plan covering substantially all employees of Fair-Play. Employees may make elective deferral contributions up to 15% of wages. Fairtron makes matching contributions of 100% of the first 5% of wages. Contributions for the years ended March 31, 1997 and 1996 were approximately $180 and $152, respectively. 11. RELATED PARTY TRANSACTIONS At March 31, 1997 and 1996, respectively, Fair-Play had notes payable to stockholders, relatives and employees of approximately $363 and $267. The notes payable accrued interest at 11% and were due April 1, 1997. Interest expense on these notes was approximately $30 and $29 for the years ended March 31, 1997 and 1996, respectively. In connection with the sale of Fair-Play discussed in Note 2, the above amounts were repaid by Trans-Lux. 12. COMMITMENTS AND CONTINGENCIES During the year ended March 31, 1996, approximately $773 of contracts receivable were sold with recourse to a financial institution. No contracts were sold with recourse to a financial institution during 1997. As of March 31, 1997, Fairtron was partially or fully contingently liable for $870 of contracts receivable. In accordance with the Purchase of Assets agreement, Fairtron retained liability for the recourse provisions. * * * * * * TRANS-LUX CORPORATION AND SUBSIDIARIES UNAUDITED PRO FORMA FINANCIAL INFORMATION On May 1, 1997, the Company, through its subsidiary Trans-Lux Midwest Corporation, acquired the catalog and custom scoreboard sign business segment of Fairtron Corporation ("Fairtron"), an Iowa corporation located in Des Moines, Iowa, for a cash purchase price of approximately $250,000 (after adjustments), noncompete and consulting fees and assumption of certain debt for an approximate total purchase price of $7.0 million. Additionally, there is a contingent additional purchase price of $250,000, based on future sales. The Company retired approximately $3.1 million of the assumed debt of Fairtron. The purchase was financed by working capital and assumption of certain debt. Fairtron was a manufacturer of custom and catalog scoreboards and related signs. Trans-Lux Midwest Corporation plans to continue the catalog scoreboard activities and certain of the custom scoreboard business. The $7.0 million total purchase price included current assets, net of cash received, of approximately $4.1 million net book value of accounts receivable and inventories; fixed assets of land, building, leasehold, machinery and equipment; and intellectual property. The purchase price allocation used in the preliminary pro forma information is based on estimated fair values and is subject to change as additional information becomes known for the fair value of the property, plant and equipment. The Company's pro forma financial results are presented to provide information on the impact of the acquisition of Fairtron to the results of operations of the Company for the year ended December 31, 1996 and for the three months ended March 31, 1997. Pro forma financial results presented for the fiscal year ended December 31, 1996 included the fiscal year ended December 31, 1996 for the Company and the fiscal year ended March 31, 1997 for Fairtron. The historical results of Fairtron included both the catalog and entire custom scoreboard sign businesses. The historical revenues and net loss for the three months ended March 31, 1997 for Fairtron, which were included in both the fiscal year ended December 31, 1996 and for the three months ended March 31, 1997, were $3.4 million and $21,000, respectively. The pro forma financial information reflects the Company's preliminary pro forma results of operations as if the acquisition had occurred as of January 1, 1996 and the preliminary pro forma balance sheet as if the acquisition had occurred as of March 31, 1997. 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, 1996, or to project the Company's results of operations or financial position for any future period or at any future date. Reference is made to Note No. 2 - Management Actions for cost saving measures implemented, the effects of which are not included in the pro forma financial statements.
Trans-Lux Corporation and Subsidiaries Preliminary Pro Forma Balance Sheet March 31, 1997 (Unaudited) -------------------------- PRO FORMA ADJUSTMENTS HISTORICAL PRO FORMA PRO FORMA HISTORICAL FAIRTRON ADJUSTMENT RESULTS ---------- -------- ---------- ------- Assets ------ Current assets: Cash and cash equivalents $3,575,000 $1,548,000 ($3,492,000) $1,631,000 Available-for-sale securities 15,183,000 - - 15,183,000 Receivables 5,043,000 1,946,000 - 6,989,000 Unbilled receivables 783,000 - - 783,000 Inventories 1,848,000 2,026,000 40,000 3,914,000 Prepaids and other current assets 313,000 52,000 19,000 384,000 ---------- --------- --------- ---------- Total current assets 26,745,000 5,572,000 (3,433,000) 28,884,000 ---------- --------- --------- ---------- Rental equipment 55,760,000 - - 55,760,000 Less accumulated depreciation 19,620,000 - - 19,620,000 ---------- --------- --------- ---------- 36,140,000 - - 36,140,000 ---------- --------- --------- ---------- Property, plant and equipment 22,279,000 3,475,000 (1,556,000) 24,198,000 Less accumulated depreciation and amortization 7,313,000 2,353,000 (2,353,000) 7,313,000 ---------- --------- --------- ---------- 14,966,000 1,122,000 797,000 16,885,000 ---------- --------- --------- ---------- Prepaids, intangibles and other 4,742,000 206,000 78,000 5,026,000 Maintenance contracts, net 1,204,000 - - 1,204,000 Note Receivable, joint venture (excludes $94,000 current portion) 761,000 - - 761,000 ---------- --------- --------- ---------- $84,558,000 $6,900,000 ($2,558,000) $88,900,000 ========== ========= ========= ========== Liabilities and Stockholders' Equity ------------------------------------ Current liabilities: Accounts payable and accruals $6,071,000 $3,060,000 $76,000 $9,207,000 Income taxes payable 23,000 - - 23,000 Notes payable - 3,121,000 (3,121,000) - Current portion of long-term debt 611,000 60,000 - 671,000 ---------- ---------- --------- ---------- Total current liabilities 6,705,000 6,241,000 (3,045,000) 9,901,000 ---------- ---------- --------- ---------- Long-term debt: 9.5% subordinated debentures due 2012 1,057,000 - - 1,057,000 7.5% convertible subordinated notes due 2006 31,625,000 - - 31,625,000 Notes payable 14,287,000 689,000 - 14,976,000 ---------- ---------- --------- ---------- 46,969,000 689,000 - 47,658,000 Deferred revenue and deposits 4,410,000 382,000 75,000 4,867,000 Deferred income taxes 3,487,000 - - 3,487,000 Minority interest 1,000 - - 1,000 Stockholders' equity 22,986,000 (412,000) 412,000 22,986,000 ---------- ---------- --------- ---------- Total liabilities and stockholders' equity $84,558,000 $6,900,000 ($2,558,000) $88,900,000 ========== ========= ========= ==========
Trans-Lux Corporation and Subsidiaries Preliminary Pro Forma Income Statement Year Ended December 31, 1996 (Unaudited) ---------------------------------------- PRO FORMA ADJUSTMENTS HISTORICAL PRO FORMA PRO FORMA HISTORICAL FAIRTRON ADJUSTMENT RESULTS ---------- -------- ---------- ------- Revenues $45,285,000 $14,571,000 - $59,856,000 Operating expenses 27,505,000 12,260,000 ($65,000) 39,700,000 ---------- ---------- ------- ---------- Gross profit from operations 17,780,000 2,311,000 65,000 20,156,000 General and administrative expenses 13,184,000 2,952,000 (192,000) 15,944,000 Interest and other (income) expense 2,393,000 435,000 (107,000) 2,721,000 ---------- ---------- ------- ---------- Income before income taxes 2,203,000 (1,076,000) 364,000 1,491,000 Provision for income taxes 953,000 - (264,000) 689,000 ---------- ---------- ------- ---------- Net income $1,250,000 ($1,076,000) $628,000 $802,000 ========== ========== ======= ========== Shares - primary 1,284,000 1,284,000 ========== ========== Earnings per share - primary $0.97 $0.62 ========== ========== Shares - fully diluted 1,697,000 * ========== Earnings per share - fully diluted $0.90 * ========== Three Months Ended March 31, 1997 (Unaudited) Revenues $10,548,000 $3,435,000 - $13,983,000 Operating expenses 5,930,000 2,727,000 ($36,000) 8,621,000 ---------- ---------- ------- ---------- Gross profit from operations 4,618,000 708,000 36,000 5,362,000 General and administrative expenses 3,352,000 630,000 (22,000) 3,960,000 Interest and other (income) expense 791,000 99,000 (44,000) 846,000 ---------- ---------- ------- ---------- Income before income taxes 475,000 (21,000) 102,000 556,000 Provision for income taxes 204,000 - 25,000 229,000 ---------- ---------- ------- ---------- Net income $271,000 ($21,000) $77,000 $327,000 ========== ========== ======= ========== Shares - primary 1,298,000 1,298,000 ========== ========== Earnings per share - primary $0.21 $0.24 ========== ========== Shares - fully diluted 3,755,000 3,755,000 ========== ========== Earnings per share - fully diluted $0.20 $0.21 ========== ========== * anti-dilutive
TRANS-LUX CORPORATION AND SUBSIDIARIES NOTES TO PRO FORMA FINANCIAL INFORMATION (UNAUDITED) ----------- Note 1 - Basis of Presentation The purchase price of approximately $7.0 million was allocated to accounts receivable, inventories, land, building, leasehold, and property and equipment based on the estimated fair value at the date of purchase. Property, plant and equipment are being depreciated using the straight line method over their useful lives ranging from five to thirty-nine years. The noncompete agreement is being amortized using the straight line basis over eight years. Goodwill is being amortized using the straight line basis over twenty years. Based on the fair value of net assets at March 31, 1997, no goodwill has been recorded in the pro forma balance sheet. However, goodwill amortization has been included in the pro forma income statement as it is anticipated that approximately $575,000 of goodwill will be recorded based on the estimated fair value of net assets acquired as of the closing date of the acquisition. Taxes on income are accrued at an estimated effective rate of 37%. Additional pro forma adjustments give effect to the payment of approximately $3.1 million of the assumed debt of Fairtron, and related interest expense, depreciation of the fair value of assets purchased, amortization of goodwill and a noncompete agreement and certain costs relating to contractual agreements. The preliminary purchase price, book value of assets acquired and purchase accounting adjustments at March 31, 1997 are as follows: Preliminary purchase price: Preliminary purchase price $6,872,000 Fees and expenses 113,000 --------- Total 6,985,000 Preliminary book value of actual assets acquired at March 31, 1997 6,051,000 --------- Excess of preliminary purchase price over preliminary book value of assets acquired 934,000 --------- Preliminary purchase accounts adjustments: Inventories 40,000 Property, plant and equipment 796,000 Other assets 98,000 --------- Total 934,000 --------- Excess of preliminary purchase price over preliminary book value of assets acquired $0 ========= Note 2 - Management Actions The historical financial results of Fairtron included both the catalog and custom scoreboard sign businesses, which included $8.5 million of revenues from the catalog scoreboard business and $6.1 million of revenues from the custom scoreboard business for the fiscal year ended March 31, 1997. The historical financial results of Fairtron also included certain expenses which are not expected to continue. Just prior to the acquisition, Fairtron reduced head count by approximately 33%. The Company, accordingly, is operating at a substantial reduction in personnel compared to Fairtron's historical operations. The Company has also taken actions which it believes will reduce operating expenses through the consolidation of facilities and other cost saving measures. In addition, the Company's operation of the custom scoreboard business portion is anticipated to be at a lower level of activity because the Company does not expect to continue to manufacture certain scoreboards that produce lower profit margins. The effects of such actions are not included in the pro forma financial statements. -----END PRIVACY-ENHANCED MESSAGE-----