SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 8-K
CURRENT REPORT
PURSUANT TO SECTION 13 OR 15(d) OF
THE SECURITIES EXCHANGE ACT OF 1934
October 10, 2002
Date of Report (Date of earliest event reported)
BALDWIN TECHNOLOGY COMPANY, INC.
(Exact name of registrant as specified in its charter)
Delaware 1-9334 13-3258160
(State or other jurisdiction (Commission (I.R.S. Employer
of incorporation) File Number) Identification No.)
Twelve Commerce Drive, Shelton, CT. 06484
(Address of Principal Executive Offices and Zip Code)
(203) 402-1000
(Registrant's telephone number, including area code)
N/A
(Former Name or Former Address, if changed since Last Report)
1
Item 2. Acquisition or Disposition of Assets
On October 10, 2002, Baldwin Technology Company, Inc. ("Baldwin or the
"Company") sold substantially all of the assets of its Baldwin Kansa subsidiary
("BKA"). The consideration received for the transaction, after certain
post-closing adjustments (and net of certain transaction costs of approximately
$33,000) was approximately $3,736,000, which approximated the net book value of
the assets sold. During the fourth quarter of the fiscal year ended June 30,
2002, the Company recorded an impairment charge of $5,434,000 related to the
goodwill associated with this business, as the recorded value of this goodwill
exceeded the assessment of its fair value made by the Company. The Company
utilized the net proceeds from this transaction to reduce its outstanding debt.
On September 26, 2001, the Company sold substantially all of the assets of
its Roll Handling Group ("RHG"). The Company recorded an impairment charge
during the fiscal year ended June 30, 2001 of approximately $14,831,000 as a
result of the write-off of assets, primarily patents and goodwill, including
$961,000 of cumulative translation adjustments associated with this business.
The Company filed a Current Report on Form 8-K dated September 26, 2001, related
to this transaction.
On November 16, 2001, the Company sold substantially all of the assets of
its Print on Demand ("POD") business. As a result of this sale, the Company
recorded an impairment charge during the fiscal year ended June 30, 2001 of
approximately $687,000 to write-off the goodwill associated with the POD
business. On September 27, 2000, the Company sold substantially all of the
assets of its Baldwin Stobb Division ("BSD"). The effects of the POD and BSD
transactions were insignificant to Baldwin's consolidated financial statements,
and together they comprise the "Other" category in the accompanying notes to the
unaudited pro forma financial information, presented below.
Item 7. Financial Statements, Pro Forma Financial Information and Exhibits.
(b) Pro forma financial information
(1) Unaudited Pro Forma Condensed Consolidated Balance Sheet at
June 30, 2002.
(2) Unaudited Pro Forma Condensed Consolidated Statements of
Income for the fiscal years ended June 30, 2002, 2001 and
2000.
(c) Exhibits
10.55 Asset Purchase Agreement, dated as of October 3, 2002 by and
among Baldwin Kansa Corporation and Gerald E. Waddell, Ronnie
K. Swint and Vektek, Inc. (filed as Exhibit 10.55 to the
Company's Annual Report on Form 10-K dated June 30, 2002 and
incorporated herein by reference).
2
UNAUDITED PRO FORMA FINANCIAL INFORMATION
The following unaudited pro forma condensed consolidated statements of
income for the fiscal years ended June 30, 2002, 2001 and 2000 as well as the
unaudited pro forma condensed consolidated balance sheet as of June 30, 2002,
were prepared to illustrate the estimated effects of the divestitures of BKA,
the RHG, the POD business and BSD and the application of the net proceeds from
the BKA and RHG divestitures to the Company's outstanding debt. The unaudited
pro forma condensed consolidated statements of income assume that these sales
occurred at the beginning of the periods presented. The unaudited pro forma
condensed consolidated balance sheet assumes that the sale of BKA occurred as of
June 30, 2002.
The unaudited pro forma financial information presented is derived from
the audited financial statements of Baldwin as of and for the fiscal years ended
June 30, 2002, 2001 and 2000. The unaudited pro forma financial information
should be read in conjunction with "Management's Discussion and Analysis of
Financial Condition and Results of Operations" and the consolidated financial
statements of Baldwin, including the notes thereto, appearing in Baldwin's
Annual Report on Form 10-K for the fiscal year ended June 30, 2002. The
unaudited pro forma financial information does not purport to be indicative of
the results of operations or financial condition that would have been reported
had the events assumed occurred on the dates indicated, nor does it purport to
be indicative of results of operations, or financial condition that may be
achieved in the future.
3
BALDWIN TECHNOLOGY COMPANY, INC.
UNAUDITED PRO FORMA FINANCIAL INFORMATION
CONDENSED CONSOLIDATED BALANCE SHEET
(IN THOUSANDS)
ASSETS
JUNE 30,
2002
---------
CURRENT ASSETS:
Cash and cash equivalents $ 5,106
Accounts receivable trade, net of allowance for doubtful 26,627
accounts
Notes receivable, trade 13,390
Inventories 22,821
Prepaid expenses and other 7,437
---------
Total current assets 75,381
---------
MARKETABLE SECURITIES 430
---------
PROPERTY, PLANT AND EQUIPMENT, at cost:
Land and buildings 785
Machinery and equipment 4,238
Furniture and fixtures 3,076
Leasehold improvements 458
Capital leases 428
---------
8,985
Less: Accumulated depreciation and amortization (3,975)
---------
Net property, plant and equipment 5,010
---------
PATENTS, TRADEMARKS AND ENGINEERING
DRAWINGS, net of accumulated amortization 2,061
GOODWILL, net of accumulated amortization 9,618
DEFERRED TAXES 6,277
OTHER ASSETS 6,025
---------
TOTAL ASSETS $ 104,802
=========
LIABILITIES AND SHAREHOLDERS' EQUITY
JUNE 30,
2002
---------
CURRENT LIABILITIES:
Loans payable $ 5,372
Current portion of long-term debt 1,680
Accounts payable, trade 12,616
Notes payable, trade 7,837
Accrued salaries, commissions, bonus and profit-sharing 3,297
Customer deposits 4,741
Accrued and withheld taxes 1,719
Income taxes payable 1,297
Other accounts payable and accrued liabilities . 13,171
---------
Total current liabilities 51,730
---------
LONG-TERM LIABILITIES:
Long-term debt 11,873
Other long-term liabilities 7,447
---------
Total long-term liabilities 19,320
---------
Total liabilities 71,050
---------
TOTAL SHAREHOLDERS' EQUITY 33,752
---------
COMMITMENTS AND CONTINGENCIES ---------
TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY $ 104,802
=========
See accompanying notes to unaudited pro forma financial information.
4
BALDWIN TECHNOLOGY COMPANY, INC.
UNAUDITED PRO FORMA FINANCIAL INFORMATION
CONDENSED CONSOLIDATED STATEMENTS OF INCOME
(IN THOUSANDS, EXCEPT PER SHARE DATA)
FOR THE FISCAL YEARS ENDED JUNE 30,
---------------------------------------
2002 2001 2000
--------- --------- ---------
Net sales $ 135,310 $ 132,933 $ 142,407
Cost of goods sold 95,078 93,117 94,108
--------- --------- ---------
Gross profit 40,232 39,816 48,299
--------- --------- ---------
Operating expenses:
General and administrative 17,532 19,593 18,598
Selling 12,655 12,660 13,981
Engineering 8,271 8,833 8,561
Research and development 5,708 4,597 4,487
Provision for loss on the disposition of pre-press (86) (472) --
operations
Restructuring charges 604 1,977 3,286
--------- --------- ---------
44,684 47,188 48,913
--------- --------- ---------
Operating loss (4,452) (7,372) (614)
--------- --------- ---------
Other (income) expense:
Interest expense 1,474 1,202 987
Interest (income) (286) (278) (240)
Royalty (income), net (4,252) (3,899) (3,111)
Other expense (income), net 599 (1,488) 93
--------- --------- ---------
(2,465) (4,463) (2,271)
--------- --------- ---------
(Loss) income before income taxes (1,987) (2,909) 1,657
--------- --------- ---------
(Benefit) provision for income taxes 6,784 950 (4,645)
--------- --------- ---------
Net (loss) income $ (8,771) $ (3,859) $ 6,302
========= ========= =========
Basic and diluted (loss) income per share $ (0.59) $ (0.26) $ 0.40
========= ========= =========
Weighted average shares outstanding:
Basic and diluted 14,915 14,787 15,652
========= ========= =========
See accompanying notes to unaudited pro forma financial information.
5
BALDWIN TECHNOLOGY COMPANY, INC.
NOTES TO UNAUDITED PRO FORMA FINANCIAL INFORMATION
NOTE 1 - The Company completed the sale of four businesses in four
different transactions. The Company sold substantially all of the
assets of BKA on October 10, 2002 to which this Current Report on
Form 8-K relates. The Company also sold substantially all of the
assets of the RHG on September 26, 2001; substantially all of the
assets of the POD business on November 16, 2001; and substantially
all of the assets of BSD on September 27, 2000. Therefore, for each
of the periods presented, the unaudited pro forma financial
information presented herein gives effect to the elimination of BKA,
the RHG, the POD business and BSD from the Company's operations and
the reduction of interest expense as a result of utilizing the net
proceeds of the BKA and RHG divestitures to reduce outstanding debt.
6
NOTE 2 - REPRESENTS THE ADJUSTMENT OF THE HISTORICAL BALDWIN CONSOLIDATED
FINANCIAL INFORMATION AS OF JUNE 30, 2002.
ASSETS
(IN THOUSANDS)
AS OF JUNE 30, 2002
-----------------------------------
HISTORICAL BKA ADJUSTMENTS PRO FORMA
--------- --------- ----- ---------
CURRENT ASSETS:
Cash and cash equivalents ................................................. $ 5,106 $ -- $ -- $ 5,106
Accounts receivable trade, net of allowance for doubtful accounts.......... 27,262 635 -- 26,627
Notes receivable, trade ................................................... 13,390 -- -- 13,390
Inventories ............................................................... 24,928 2,107 -- 22,821
Prepaid expenses and other ................................................ 7,474 37 -- 7,437
--------- --------- ------- ---------
Total current assets ............................................. 78,160 2,779 -- 75,381
--------- --------- ------- ---------
MARKETABLE SECURITIES ....................................................... 430 -- -- 430
--------- --------- ------- ---------
PROPERTY, PLANT AND EQUIPMENT, at cost:
Land and buildings ........................................................ 2,669 1,884 -- 785
Machinery and equipment ................................................... 5,526 1,288 -- 4,238
Furniture and fixtures .................................................... 3,716 640 -- 3,076
Leasehold improvements .................................................... 458 -- -- 458
Capital leases ............................................................ 428 -- -- 428
--------- --------- ------- ---------
12,797 3,812 -- 8,985
Less: Accumulated depreciation and amortization ............................. (6,453) (2,478) -- (3,975)
--------- --------- ------- ---------
Net property, plant and equipment ........................................... 6,344 1,334 -- 5,010
--------- --------- ------- ---------
PATENTS, TRADEMARKS AND ENGINEERING
DRAWINGS, net of accumulated amortization .................................. 2,061 -- -- 2,061
GOODWILL, net of accumulated amortization ................................... 9,618 -- -- 9,618
DEFERRED TAXES .............................................................. 6,277 -- -- 6,277
OTHER ASSETS ................................................................ 6,025 -- -- 6,025
--------- --------- ------- ---------
TOTAL ASSETS ..................................................... $ 108,915 $ 4,113 $ -- $ 104,802
========= ========= ======= =========
LIABILITIES AND SHAREHOLDERS' EQUITY
(IN THOUSANDS)
AS OF JUNE 30,2002
-----------------------------------
HISTORICAL BKA ADJUSTMENTS PRO FORMA
-------- -------- ----------- ----------
CURRENT LIABILITIES:
Loans payable ......................................... $ 5,372 $ - $ - $ 5,372
Current portion of long-term debt ..................... 5,416 -- (3,736)(a) 1,680
Accounts payable, trade ............................... 12,816 200 -- 12,616
Notes payable, trade .................................. 7,837 -- -- 7,837
Accrued salaries, commissions, bonus and profit-sharing 3,432 135 -- 3,297
Customer deposits ..................................... 4,765 24 -- 4,741
Accrued and withheld taxes ............................ 1,719 2 -- 1,717
Income taxes payable .................................. 1,297 -- -- 1,297
Other accounts payable and accrued liabilities ........ 13,187 14 -- 13,173
-------- -------- ------- ----------
Total current liabilities .................... 55,841 375 (3,736) 51,730
-------- -------- ------- ----------
LONG-TERM LIABILITIES:
Long-term debt ........................................ 11,873 -- -- 11,873
Other long-term liabilities ........................... 7,447 -- -- 7,447
-------- -------- ------- ----------
Total long-term liabilities .................. 19,320 -- -- 19,320
-------- -------- ------- ----------
Total liabilities ............................ 75,161 375 (3,736) 71,050
-------- -------- ------- ----------
TOTAL SHAREHOLDERS' EQUITY 33,754 3,738 3,736(b) 33,752
-------- -------- ------- ----------
COMMITMENTS AND CONTINGENCIES
-------- -------- ------- ----------
TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY .............. $108,915 $ 4,113 $ - $ 104,802
======== ======== ======= ==========
(a) Adjustment reflects a reduction in the current portion of long-term debt as
a result of utilizing the net proceeds from the sale of BKA of $3,736,000.
(b) Adjustment reflects an increase to total shareholders' equity as a result
of the net proceeds from the sale of BKA of $3,736,000.
7
NOTE 3 - REPRESENTS THE ADJUSTMENT OF THE HISTORICAL BALDWIN CONSOLIDATED
FINANCIAL INFORMATION FOR THE FISCAL YEAR ENDED JUNE 30, 2002.
(IN THOUSANDS, EXCEPT PER SHARE DATA)
FOR THE FISCAL YEAR ENDED JUNE 30, 2002
---------------------------------------
HISTORICAL BKA RHG OTHER ADJUSTMENTS PRO FORMA
---------- --- --- ----- ----------- ---------
Net sales ........................... $ 145,625 $ 5,533 $ 4,855 $ (73) $ -- $ 135,310
Cost of goods sold .................. 102,866 4,052 3,893 (157) -- 95,078
--------- --------- --------- --------- --------- ---------
Gross profit ........................ 42,759 1,481 962 84 -- 40,232
--------- --------- --------- --------- --------- ---------
Operating expenses:
General and administrative ........ 18,768 431 715 90 -- 17,532
Selling ........................... 13,749 662 370 62 -- 12,655
Engineering ....................... 9,033 240 448 74 -- 8,271
Research and development .......... 6,253 392 153 -- -- 5,708
Provision for loss on the
disposition of pre-press
operations ........................ (86) -- -- -- -- (86)
Restructuring charges ............. 621 -- 17 -- -- 604
Impairment charges ................ 5,434 5,434 -- -- -- --
--------- --------- --------- --------- --------- ---------
53,772 7,159 1,703 226 -- 44,684
--------- --------- --------- --------- --------- ---------
Operating loss ...................... (11,013) (5,678) (741) (142) -- (4,452)
--------- --------- --------- --------- --------- ---------
Other (income) expense:
Interest expense .................. 1,792 -- 40 -- (278)(c) 1,474
Interest (income) ................. (290) (2) (2) -- -- (286)
Royalty (income), net ............. (4,252) -- -- -- -- (4,252)
Other expense, net ................ 1,037 -- 430 8 -- 599
--------- --------- --------- --------- --------- ---------
(1,713) (2) 468 8 (278) (2,465)
--------- --------- --------- --------- --------- ---------
(Loss) income before income taxes ... (9,300) (5,676) (1,209) (150) 278 (1,987)
--------- --------- --------- --------- --------- ---------
Provision (benefit) for income taxes 6,684 -- -- -- 100(d) 6,784
--------- --------- --------- --------- --------- ---------
Net (loss) income ................... $ (15,984) $ (5,676) $ (1,209) $ (150) $ 178 $ (8,771)
========= ========= ========= ========= ========= =========
Basic and diluted (loss) income per $ (1.07) $(0.38) $ (0.08) $ (0.01) $ 0.01 $ (0.59)
========= ========= ========= ========= ========= =========
share
Weighted average shares outstanding:
Basic and diluted ................. 14,915 14,915 14,915 14,915 14,915 14,915
========= ========= ========= ========= ========= =========
(c) Adjustment reflects a decrease in interest expense attributable to a
reduction in debt of $3,736,000 outstanding during the fiscal year ended
June 30, 2002 relating to BKA and $4,500,000 outstanding until October 2001
relating to the RHG and was computed at an average variable rate of 5.73%.
(d) Adjustment reflects an effective income tax rate of 36.0% for the fiscal
year ended June 30, 2002 on the above interest savings.
8
NOTE 4 - REPRESENTS THE ADJUSTMENT OF THE HISTORICAL BALDWIN CONSOLIDATED
FINANCIAL INFORMATION FOR THE FISCAL YEAR ENDED JUNE 30, 2001.
(IN THOUSANDS, EXCEPT PER SHARE DATA)
FOR THE FISCAL YEAR ENDED JUNE 30, 2001
---------------------------------------
HISTORICAL BKA RHG OTHER ADJUSTMENTS PRO FORMA
---------- --- --- ----- ----------- ---------
Net sales ................................. $ 183,615 $ 10,307 $ 34,417 $ 5,958 $ -- $ 132,933
Cost of goods sold ........................ 129,827 6,281 26,908 3,521 -- 93,117
--------- --------- --------- --------- --------- ---------
Gross profit .............................. 53,788 4,026 7,509 2,437 -- 39,816
--------- --------- --------- --------- --------- ---------
Operating expenses:
General and administrative .............. 23,801 878 2,887 443 -- 19,593
Selling ................................. 16,224 779 1,968 817 -- 12,660
Engineering ............................. 11,372 292 1,742 505 -- 8,833
Research and development ................ 5,658 436 587 38 -- 4,597
Provision for loss on the disposition
of .................................... (472) -- -- -- -- (472)
Pre-press operations
Restructuring charges ................... 2,277 -- 300 -- -- 1,977
Impairment charges ...................... 15,518 -- 14,831 687 -- --
--------- --------- --------- --------- --------- ---------
74,378 2,385 22,315 2,490 -- 47,188
--------- --------- --------- --------- --------- ---------
Operating (loss) income ................... (20,590) 1,641 (14,806) (53) -- (7,372)
--------- --------- --------- --------- --------- ---------
Other (income) expense:
Interest expense ........................ 2,014 -- 153 -- (659)(e) 1,202
Interest (income) ....................... (291) (4) (6) (3) -- (278)
Royalty (income), net ................... (3,899) -- -- -- (3,899)
Other expense (income), net ............. (940) (4) (213) 765 -- (1,488)
--------- --------- --------- --------- --------- ---------
(3,116) (8) (66) 762 (659) (4,463)
--------- --------- --------- --------- --------- ---------
(Loss) income before income taxes ......... (17,474) 1,649 (14,740) (815) 659 (2,909)
--------- --------- --------- --------- --------- ---------
Provision (benefit) for income taxes ...... 698 665 (635) (44) 238(f) 950
--------- --------- --------- --------- --------- ---------
Net (loss) income ......................... $ (18,172) $ 984 $ (14,105) $ (771) $ 421 $ (3,859)
========= ========= ========= ========= ========= =========
Basic and diluted (loss) income per share $(1.23) $ 0.07 $ (0.95) $ (0.05) $ 0.03 $ (0.26)
========= ========= ========= ========= ========= =========
Weighted average shares outstanding:
Basic and diluted ....................... 14,787 14,787 14,787 14,787 14,787 14,787
========= ========= ========= ========= ========= =========
(e) Adjustment reflects a decrease in interest expense attributable to a
reduction in outstanding debt of $3,736,000 relating to BKA and $4,500,000
relating to the RHG during the fiscal year ended June 30, 2001, and was
computed at an average variable rate of 8.0%.
(f) Adjustment reflects an effective income tax rate of 36.0% for the fiscal
year ended June 30, 2001 on the above interest savings.
9
NOTE 5 - REPRESENTS THE ADJUSTMENT OF THE HISTORICAL BALDWIN CONSOLIDATED
FINANCIAL INFORMATION FOR THE FISCAL YEAR ENDED JUNE 30, 2000.
(IN THOUSANDS, EXCEPT PER SHARE DATA)
FOR THE FISCAL YEAR ENDED JUNE 30, 2000
---------------------------------------
HISTORICAL BKA RHG OTHER ADJUSTMENTS PRO FORMA
---------- --- --- ----- ----------- ---------
Net sales ........................... $ 198,602 $ 9,238 $ 34,415 $ 12,542 $ -- $ 142,407
Cost of goods sold .................. 135,146 5,266 28,262 7,510 -- 94,108
--------- --------- --------- --------- --------- ---------
Gross profit ........................ 63,456 3,972 6,153 5,032 -- 48,299
--------- --------- --------- --------- --------- ---------
Operating expenses:
General and administrative ........ 23,182 884 2,482 1,218 -- 18,598
Selling ........................... 19,011 792 2,073 2,165 -- 13,981
Engineering ....................... 12,209 326 2,309 1,013 -- 8,561
Research and development .......... 5,753 340 338 588 -- 4,487
Restructuring charges ............. 5,664 -- 2,378 -- -- 3,286
--------- --------- --------- --------- --------- ---------
65,819 2,342 9,580 4,984 -- 48,913
--------- --------- --------- --------- --------- ---------
Operating (loss) income ............. (2,363) 1,630 (3,427) 48 -- (614)
--------- --------- --------- --------- --------- ---------
Other (income) expense:
Interest expense .................. 1,819 -- 159 -- (673)(g) 987
Interest (income) ................. (330) (11) (5) (74) -- (240)
Royalty (income), net ............. (3,111) -- -- -- -- (3,111)
Other expense (income), net ....... 98 178 (274) 101 -- 93
--------- --------- --------- --------- --------- ---------
(1,524) 167 (120) 27 (673) (2,271)
--------- --------- --------- --------- --------- ---------
(Loss) income before income taxes ... (839) 1,463 (3,307) 21 673 1,657
--------- --------- --------- --------- --------- ---------
(Benefit) provision for income taxes (5,675) 598 (1,470) 84 242(h) (4,645)
--------- --------- --------- --------- --------- ---------
Net income (loss) ................... $ 4,836 $ 865 $ (1,837) $ (63) $ 431 $ 6,302
========= ========= ========= ========= ========= =========
Basic and diluted income (loss) per
share .......................... $ 0.31 $ 0.06 $ (0.12) $ (0.00) $ 0.03 $ 0.40
========= ========= ========= ========= ========= =========
Weighted average shares outstanding:
Basic and diluted ................. 15,652 15,652 15,652 15,652 15,652 15,652
========= ========= ========= ========= ========= =========
(g) Adjustment reflects a decrease in interest expense attributable to a
reduction in outstanding debt of $3,736,000 relating to BKA and $4,500,000
relating to the RHG during the fiscal year ended June 30, 2000, and was
computed at the fixed rate of 8.17%.
(h) Adjustment reflects an effective income tax rate of 36.0% for the fiscal
year ended June 30, 2000 on the above interest savings.
10
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, as
amended, the Registrant has duly caused this report to be signed on its behalf
by the undersigned, hereunto duly authorized.
BALDWIN TECHNOLOGY COMPANY, INC.
(REGISTRANT)
By: /s/ VIJAY C. THARANI
-------------------------------
VIJAY C. THARANI
(CHIEF FINANCIAL OFFICER)
Dated: October 25, 2002
11