SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 8-K /A
CURRENT REPORT
Pursuant to Section 13 or 15 (D) of the
Securities Exchange Act of 1934
Date of Report (Date of Earliest event reported): April 14, 2003
ESCALADE, INCORPORATED
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(Exact name of Registrant as specified in its charter)
Indiana 0-6966 13-2739290
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(State or Other Jurisdiction of (Commission File Number) (IRS Employer I.D.
Incorporation) No.)
817 Maxwell Avenue, Evansville, Indiana 47711
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(Address of Principal Executive Offices)
Registrant's telephone number, including area code: (812) 467-1200
ITEM 2. ACQUISITION OR DISPOSITION OF ASSETS
On April 14, 2003 Escalade, Inc.'s ("Escalade") wholly owned subsidiary Martin
Yale Industries, Inc. ("Martin Yale") successfully completed a tender offer for
Schleicher & Co., International AG ("Schleicher"). After the tender offer,
Martin Yale owns 97.2% or 2,784,603 shares of Schleicher. The acquisition of
shares was for cash and the cost of the acquisition was $12,486,092.
Schleicher, a Germany company, has office and manufacturing facilities in
Germany and sales/distribution facilities in France, England and the United
States. The assets of Schleicher include accounts receivable; inventory; and
property, plant and equipment used in the manufacture and distribution of data
shredders. Escalade intends to maintain Schleicher's current locations and will
use the property, plant and equipment to manufacture Schleicher's current
product line. Escalade believes the business combination of Martin Yale and
Schleicher has significant synergies that have immediate benefits to both
companies.
Schleicher shares were acquired through direct purchases on the German stock
market, privately negotiated transactions and the tender offer. Cash for the
acquisition was obtained from the Company's long-term financing agreement with
Bank One Indiana, N.A.
This amendment to Escalade's Current Report on Form 8-K filed with the
Securities and Exchange Commission on April 29, 2003, is submitted to include
the financial statements and pro forma financial information required by Item 7,
which were impracticable to provide at the time the Form 8-K was initially
filed.
ITEM 7. FINANCIAL STATEMENTS AND EXHIBITS
(a) Financial statements of the business acquired.
Schleicher and Co. International Aktiengesellschaft audited
financial statements for the nine months ended December 31,
2002 (including report of independent auditors)
Schleicher and Co. International Aktiengesellschaft unaudited
financial statements for the three months ended March 22, 2003
The historical financial information required in this Form
8-K/A is based on prior Escalade filings with the Securities
and Exchange Commission and on prior Schleicher filings with
German Securities Regulatory Agencies. The Schleicher audited
historical financial statements were audited by Bodensee
Treuhand GmbH and are included as an exhibit to this Form
8-K/A. The Escalade audited historical financial statements
were audited by BKD LLP, which are included in Escalade's Form
10-K filed with the Securities Exchange Commission on March
14, 2003. The following unaudited financial information for
the first quarter of 2003 should be read in connection with
the historical financial statements of both companies.
The accompanying unaudited interim financial information for
Escalade and Schleicher for the three months ended March 22,
2003 was prepared in accordance with accounting principles
generally accepted in the United States and with the
instructions to Form 10-Q and Article 10 of Regulation S-X.
Accordingly, the information does not include all of the
information and disclosures required by generally accepted
accounting principles in the United States for complete
financial statements. In the opinion of management, all
adjustments, consisting of normal recurring accruals necessary
for a fair presentation are included. The results of
operations for the three months ended March 22, 2003 for
Escalade and Schleicher may not indicate the results for the
full fiscal year. All amounts are stated in U.S. Dollars.
SCHLEICHER & CO., INTERNATIONAL AG
CONSOLIDATED CONDENSED BALANCE SHEETS
(In thousands)
March 22, 2003 December 31, 2002
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ASSETS
Current Assets:
Cash and equivalents $ 993 $ 1,023
Receivables 9,104 8,658
Inventories 10,660 10,261
Prepaid expenses and other 946 900
Deferred tax assets 637 616
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Total current assets 22,340 21,458
Property, plant and equipment 16,185 15,542
Accumulated depreciation and amortization (11,884) (11,374)
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Net property, plant and equipment 4,301 4,168
Other assets 289 275
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$ 26,930 $ 25,901
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LIABILITIES AND STOCKHOLDERS' EQUITY
Current Liabilities:
Notes payable - banks $ 11,092 $ 10,687
Trade accounts payable 5,151 5,058
Accrued liabilities 4,194 3,908
Accrued taxes payable 454 440
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Total current liabilities 20,891 20,093
Long-term debt 422 408
Stockholders' equity:
Common Stock; Authorized 4,200,000 shares;
no par value, issued and outstanding
2,866,000 shares 7,459 7,459
Retained earnings (1,960) (2,049)
Accumulated other comprehensive income (loss) 118 (10)
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Total stockholders' equity 5,617 5,400
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$ 26,930 $ 25,901
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SCHLEICHER & CO., INTERNATIONAL AG
CONSOLIDATED CONDENSED INCOME STATEMENTS
(In thousands, except share information)
3 Months ended 9 Months ended
March 22, 2003 December 31, 2002
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Net sales $ 11,400 $ 30,519
Cost of goods sold 6,101 16,711
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Gross profit 5,299 13,808
Selling, general and administrative 4,936 14,363
Interest expense 281 765
Other income 58 481
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Income (loss) before income taxes 140 (839)
Provision for income taxes 51 43
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Net income (loss) $ 89 $ (882)
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Per Share Data:
Basic and diluted earnings per share $ 0.03 $ (0.31)
Weighted average shares 2,866,000 2,866,000
Comprehensive other income (loss)
Foreign exchange translation adjustment $ 118 $ (10)
SCHLEICHER & CO., INTERNATIONAL AG
CONSOLIDATED CONDENSED STATEMENTS OF CASH FLOW
(In thousands)
3 Months ended 9 Months ended
March 22, 2003 December 31, 2002
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Operating Activities:
Net income (loss) $ 89 $ (882)
Depreciation and amortization 126 2,110
Adjustments necessary to reconcile net income
(loss) to net cash provided by operating activities (244) 465
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Net cash provided by operating activities (29) 1,693
Investing Activities:
Purchase of property, plant and equipment (113) (271)
Investments in affiliates (193)
Other - 11
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Net cash used by investing activities (113) (453)
Financing Activities:
Net increase in notes payable - banks 56 160
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Net cash generated (used) (86) 1,400
Currency related value adjustments 56 (687)
Cash and equivalents at beginning of period 1,023 310
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Cash and equivalents at end of period $ 993 $ 1,023
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SCHLEICHER & CO., INTERNATIONAL AG
NOTES TO CONSOLIDATED CONDENSED FINANCIAL STATEMENTS
NOTE A - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
Nature of the Business
Schleicher, a German company, manufactures and distributes data
shredders. Schleicher has subsidiaries in Austria, Czech Republic,
England, France, India and the USA. The financial statements reflect
the consolidation of these subsidiaries.
Basis of Presentation
The significant accounting policies followed by Schleicher and it's
subsidiaries for interim financial reporting are consistent with the
accounting policies followed for annual financial reporting. All
adjustments that are of a normal recurring nature and are in the
opinion of management necessary for a fair statement of the results for
the periods reported have been included in the accompanying
consolidated condensed financial statements. The condensed consolidated
balance sheet of Schleicher as of December 31, 2002 has been derived
from the audited consolidated financial statements included as an
exhibit to this Form 8-K/A. Certain historical data has been
reclassified to conform to financial statement presentation in the
United States of America. Certain note disclosures normally included in
the annual financial statements prepared in accordance with accounting
principles generally accepted in the United States of America have been
condensed or omitted. These condensed consolidated financial statements
should be read in conjunction with the consolidated financial
statements and notes thereto included as an exhibit to this Form 8-K/A.
NOTE B - INVENTORIES
(In thousands)
March 22, 2003 December 31, 2002
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Raw materials $ 2,770 $ 3,405
Work in progress 634 533
Finished goods 7,256 6,323
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$ 10,660 $ 10,261
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NOTE C - PROVISION FOR INCOME TAXES
The provision for income taxes was computed based on financial
statement income.
(b) Pro forma financial information.
Unaudited Pro Forma Condensed Combined Balance Sheets (in thousands)
Unaudited Pro Forma Condensed Combined Income Statements (in thousands,
except per share information)
The following unaudited pro forma condensed financial statements
combine Escalade's historical results for the three months ended March
22, 2003 and the year ended December 28, 2002 with Schleicher's
historical results for the three months ended March 22, 2003 and the
year ended December 31, 2002, giving effect to the merger as if it had
occurred as of January 1, 2002 for income statement purposes and on
December 28, 2002 for balance sheet purposes. The following unaudited
pro forma condensed financial statements have been derived from, and
should be read in conjunction with, the audited
and unaudited financial information referenced in Item 7(a) of this
Form 8-K/A and the related notes thereto. Reliance should not be placed
on these unaudited pro forma condensed financial statements as being
indicative of the historical results that would have occurred had
Escalade and Schleicher been combined during these time periods or the
future results that may be achieved as a result of this merger. All
amounts are stated in U.S. Dollars.
UNAUDITED PRO FORMA CONDENSED COMBINED BALANCE SHEETS
AS OF MARCH 22, 2003
(In thousands)
Escalade Schleicher Adjustments Combined
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ASSETS
Current Assets:
Cash and equivalents $ 4,400 $ 993 $ 5,393
Receivables 13,952 9,104 23,056
Inventories 22,084 10,660 32,744
Prepaid expenses and other 438 946 1,384
Deferred tax assets 814 637 1,451
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Total current assets 41,688 22,340 64,028
Property, plant and equipment 35,563 16,185 (4,376) 47,372
Accumulated depreciation and
amortization (26,900) (11,884) 11,577 (27,207)
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8,663 4,301 20,165
Intangible assets 6,268 6,268
Goodwill 13,351 13,351
Other assets 12,640 289 (6,729) 6,200
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$ 82,610 $ 26,930 $ 110,012
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LIABILITIES AND
STOCKHOLDERS' EQUITY
Current Liabilities:
Notes payable - banks $ 5,327 $ 11,092 $ 16,419
Current portion long-term debt 167 167
Trade accounts payable 2,347 5,151 7,498
Accrued liabilities 9,468 4,194 5,748 19,410
Accrued taxes payable 1,101 454 1,555
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Total current liabilities 18,410 20,891 45,049
Long-term debt 16,933 422 17,355
Deferred Compensation 1,343 1,343
Minority Interest 366 366
Stockholders' equity:
Common Stock 6,533 7,459 (7,459) 6,533
Additional paid-in capital 756 756
Retained earnings 38,712 (1,960) 1,934 38,686
Accumulated other comprehensive
income (loss) (77) 118 (117) (76)
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Total stockholders' equity 45,924 5,617 45,899
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$ 82,610 $ 26,930 $ 110,012
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UNAUDITED PRO FORMA CONDENSED COMBINED BALANCE SHEETS
AS OF DECEMBER 28, 2002
(In thousands)
Escalade Schleicher Adjustments Combined
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ASSETS
Current Assets:
Cash and equivalents $ 3,370 $ 1,023 $ 4,393
Receivables 34,141 8,658 42,799
Inventories 20,550 10,261 30,811
Prepaid expenses and other 542 900 1,442
Deferred tax assets 814 616 1,430
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Total current assets 59,417 21,458 80,875
Property, plant and equipment 35,258 15,542 (4,232) 46,568
Accumulated depreciation and
amortization (26,199) (11,374) 11,374 (26,199)
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9,059 4,168 20,369
Intangible assets 6,492 6,492
Goodwill 13,351 13,351
Other assets 8,469 275 (2,657) 6,087
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$ 96,788 $ 25,901 $ 127,174
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LIABILITIES AND
STOCKHOLDERS' EQUITY
Current Liabilities:
Notes payable - banks $ 11,223 $ 10,687 $ 21,910
Current portion long-term debt 167 167
Trade accounts payable 2,793 5,058 7,851
Accrued liabilities 17,004 3,908 9,519 30,431
Accrued taxes payable 1,189 440 1,629
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Total current liabilities 32,376 20,093 61,988
Long-term debt 17,200 408 17,608
Deferred Compensation 1,337 1,337
Minority Interest 366 366
Stockholders' equity:
Common Stock 6,509 7,459 (7,459) 6,509
Additional paid-in capital 682 682
Retained earnings 38,709 (2,049) 2,049 38,709
Accumulated other comprehensive
income (loss) (25) (10) 10 (25)
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Total stockholders' equity 45,875 5,400 45,875
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$ 96,788 $ 25,901 $ 127,174
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UNAUDITED PRO FORMA CONDENSED COMBINED INCOME STATEMENTS
FOR THE THREE MONTHS ENDED MARCH 22, 2003
(In thousands, except per share information)
Escalade Schleicher Adjustments Combined
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Net sales $ 17,703 $ 11,400 $ 29,103
Cost of goods sold 12,558 6,101 18,659
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Gross profit 5,145 5,299 10,444
Selling, general and administrative 4,865 4,936 188 9,989
Interest expense 167 281 448
Other (income) expense 109 (58) 51
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Income (loss) before income taxes 4 140 (44)
Provision for income taxes 1 51 (73) (21)
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Net income (loss) $ 3 $ 89 $ (23)
Per Share Data:
Basic earnings per share $ 0.00 $ 0.03 $ 0.00
Diluted earnings per share 0.00 $ 0.03 $ 0.00
Weighted average shares outstanding
Basic 6,511,124 2,866,000 6,511,124
Diluted 6,632,243 2,866,000 6,632,243
UNAUDITED PRO FORMA CONDENSED COMBINED INCOME STATEMENTS
FOR THE YEAR ENDED DECEMBER 31, 2002
(In thousands, except per share information)
Escalade Schleicher Adjustments Combined
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Net sales $ 155,455 $ 41,439 $ 196,894
Cost of goods sold 111,164 22,850 134,014
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Gross profit 44,291 18,589 62,880
Selling, general and administrative 26,328 18,954 702 45,984
Interest expense 951 992 1,943
Other (income) expense 70 (570) (500)
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Income (loss) before income taxes 16,942 (787) 15,453
Provision for income taxes 5,804 105 (253) 5,656
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Net income (loss) $ 11,138 $ (892) $ 9797
Per Share Data:
Basic earnings per share $ 1.72 $ (0.31) $ 1.51
Diluted earnings per share 1.66 $ (0.31) $ 1.46
Weighted average shares outstanding:
Basic 6,486,081 2,866,000 6,486,081
Diluted 6,717,152 2,866,000 6,717,152
NOTES TO UNAUDITED PRO FORMA CONDENSED COMBINED FINANCIAL STATEMENTS
1. BASIS OF PRESENTATION
Certain historical data of Schleicher has been reclassified to
conform to Escalade's presentation.
2. ALLOCATION OF PURCHASE PRICE
The purchase price of $12,486 thousand has been allocated to
property and equipment.
3. PRO FORMA ADJUSTMENTS
The unauadited pro forma condensed combined income statements
include the adjustments necessary to give effect to the
purchase price as if it had occurred as of January 1, 2002 for
income statement purposes and on December 28, 2002 for balance
sheet purposes. Accordingly, the adjustments reflect the
allocation of the purchase price and the elimination of
Schleicher equity balances.
(c) Exhibits
23.1 Consent of Bodensee Treuhand GmbH
99.1 Press release dated April 17, 2003 *
99.2 Schleicher & Co. International Aktiengesellschaft audited financial
statements for the short fiscal year ended December 31, 2002
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* Previously filed as part of the initial Form 8-K filed on April 29, 2003.
SIGNATURES
Pursuant to the requirements of the Securities Act of 1934, Escalade,
Incorporated has duly caused this report to be signed on its behalf in
Evansville, Indiana by the undersigned hereunto duly authorized.
Date: 6 June 2003 ESCALADE, INCORPORATED
By: /s/ John R. Wilson
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Vice President and Chief Financial Officer
INDEX TO EXHIBITS
NUMBER DESCRIPTION
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23.1 Consent of Bodensee Treuhand GmbH
99.1 Press release dated April 17, 2003
99.2 Schleicher & Co. International Aktiengesellschaft audited
financial statements for the short fiscal year ended December 31, 2002