-----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, QePttC3Cz/3lsc1Xs82tl8lUbwqsBxuNUt5JNfrnoRcQwve5xqEx3svpU4ld8tk1 I5mqK2tu7a7TR9xEzs8mtw== 0000804151-96-000029.txt : 19961113 0000804151-96-000029.hdr.sgml : 19961113 ACCESSION NUMBER: 0000804151-96-000029 CONFORMED SUBMISSION TYPE: 8-K PUBLIC DOCUMENT COUNT: 2 CONFORMED PERIOD OF REPORT: 19961111 ITEM INFORMATION: Other events ITEM INFORMATION: Financial statements and exhibits FILED AS OF DATE: 19961112 SROS: NYSE FILER: COMPANY DATA: COMPANY CONFORMED NAME: IMO INDUSTRIES INC CENTRAL INDEX KEY: 0000804151 STANDARD INDUSTRIAL CLASSIFICATION: GENERAL INDUSTRIAL MACHINERY & EQUIPMENT [3560] IRS NUMBER: 210733751 STATE OF INCORPORATION: DE FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 8-K SEC ACT: 1934 Act SEC FILE NUMBER: 001-09294 FILM NUMBER: 96659110 BUSINESS ADDRESS: STREET 1: 1009 LENOX DR STREET 2: PO BOX 6550 CITY: LAWRENCEVILLE STATE: NJ ZIP: 08648-0550 BUSINESS PHONE: 6098967600 MAIL ADDRESS: STREET 1: 1009 LENOX DR STREET 2: PO BOX 6550 CITY: LAWRENCEVILLE STATE: NJ ZIP: 08648-0550 FORMER COMPANY: FORMER CONFORMED NAME: IMO DELAVAL INC DATE OF NAME CHANGE: 19890313 FORMER COMPANY: FORMER CONFORMED NAME: TRANSAMERICA DELAVAL INC /DE DATE OF NAME CHANGE: 19861207 8-K 1 FORM 8-K 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 Date of Report (Date of earliest event reported): November 11, 1996 Imo Industries Inc. (Exact name of registrant as specified in its charter) Delaware 1-9294 21-0733751 (State or other jurisdiction (Commission (I.R.S. Employer of incorporation) File Number) Identification No.) 1009 Lenox Drive, Building Four West Lawrenceville, New Jersey 08648 (Address of principal executive offices) (Zip Code) Registrant's telephone number, including area code 609-896-7600 Not Applicable (Former name or address if changed since last report) IMO INDUSTRIES INC. Form 8-K Current Report Item 5. Other Events. In a press release dated November 11, 1996, the Registrant reported that it has withdrawn its Roltra-Morse business from sale and restated results of operations for the third quarter ended September 30, 1996, to reflect Roltra-Morse as a continuing operation. The information set forth in this Item 5 is qualified in its entirety by reference to the Registrant's press release announcing such information, which is filed herewith as an exhibit. Item 7. Exhibits. The following exhibit is being filed with this report: Exhibit No. Exhibit ____________ ___________________ 99 Press release dated November 11, 1996 by Imo Industries Inc. 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 hereto duly authorized. Imo Industries Inc. (Registrant) Date: November 11, 1996 By: /s/ WILLIAM M. BROWN William M. Brown Executive Vice President, Chief Financial Officer and Corporate Controller EX-99 2 EXHIBIT 99 PRESS RELEASE For further information contact: R.A. Derr II Vice President & Treasurer Director of Investor Relations (609) 896-7632 FOR IMMEDIATE RELEASE IMO WITHDRAWS ITALIAN UNIT FROM DIVESTITURE, SAYING IT INTENDS TO SUE GERMAN FIRM FOR BLOCKING SALE; RE-STATES THIRD QUARTER RESULTS LAWRENCEVILLE, NJ (November 11, 1996) -- Imo Industries Inc. (NYSE: IMD) announced today that it is withdrawing its Roltra-Morse subsidiary from potential sale due to interference in the sale process by Kiekert AG, an unsuccessful bidder that has threatened to revoke certain license agreements now held by Roltra if the business is sold to any of its competitors. Imo said it intends to commence litigation against Kiekert and to vigorously pursue this matter. The Company said it had received attractive purchase offers for Roltra-Morse, a manufacturer of components for the automobile industry with plants in Italy and Poland and joint ventures in Turkey and Brazil. However, Imo said it is unable to complete the sale due to Kiekert's interference. "Kiekert's tactics have jeopardized our ability to receive fair value for Roltra, and we intend to seek full restitution," said Imo Chairman and Chief Executive Officer Donald K. Farrar. Imo is evaluating other alternatives to meet its deleveraging objectives, including the possible sale of other assets. As a result of Imo's withdrawal of the Roltra business from the sale process, the Company has reclassified Roltra as a continuing operation, from its previous status as a discontinued operation, and is restating its third quarter earnings to reflect this change. Accounting for the unit as a continuing operation results in the reversal of a favorable $10 million tax benefit based on the anticipated gain on the sale and recognition of $4.8 million in previously deferred 1996 losses related to Roltra. Additionally, the Company recognized $7.4 million related to changes in estimates on legal and other reserve requirements of other previously discontinued operations. The result of these largely non-cash charges is a loss of 73 cents a share from continuing operations for the third quarter, compared to income of 14 cents a share in the comparable period of 1995. For the nine months ended September 30, the Company is now reporting a loss of 57 cents a share from continuing operations, compared with earnings of 55 cents a share last year. Earnings for the first and second quarters of 1996 have been restated to reflect Roltra-Morse as a continuing operation. Net income for the third quarter was a loss of $1.16 a share, compared with a net loss of 28 cents a share in 1995's comparable period. During the fourth quarter we will be completing our evaluation of the Roltra operations to determine what structural or other changes may be necessary to position this business for profitable future growth. The fourth quarter results will be adversely affected by Roltra-Morse and the actions necessary to restructure this business. Consequently, the company expects an overall loss in the fourth quarter. The restated results place the Company in technical default of certain financial covenants of its revolving credit agreements. However, the Company is currently negotiating with the banks that are party to the credit agreement to secure a waiver of the covenant defaults, which it expects will be granted. Pumps Sales of pump products were up 16% for the third quarter, including the effect of acquiring a French pump company at the end of the first quarter. Operating income was down 27% due to lower margins, higher selling expenses, and increased warranty costs. Year-to-date earnings are up 12% and sales up 15% over the comparable period of 1995. Total bookings year-to- date at September 30 were 11% ahead of the comparable period of last year. Export markets are showing vigorous growth for pumps used in power generation and crude oil transfer and processing. The US market for hydraulic pumps used in low rise elevators is currently enjoying a double-digit rate of growth. Imo dominates this market segment, with more than 200,000 pumps currently in service. The sale of lube oil pumps used in industrial machinery is also up sharply. Power Transmission Boston Gear sales and earnings improved in the third quarter, but slippage at Fincor Electronics reduced the combined results for the segment. Third quarter sales of $22.1 million were about even with last year, but operating income was down 17%. Year-to-date sales for the Power Transmission segment as a whole totaled $67 million, down 8% from last year. Operating income for the segment was off 26% year-to-date. Fincor sales have been impacted by an industry trend away from DC adjustable speed drives, where it is a market leader, toward AC drives, where it currently has an incomplete offering. This will improve as new products come on line. In August, for example, Fincor introduced a new AC drive in the popular one-to-five horsepower range that generated more than $500,000 in new orders in 30 days, making September its best booking month this year. Instrumentation A 18% increase in sales at the US operation more than offset an essentially flat performance in Europe, giving the Instrumentation segment a combined 12% sales increase and a 14% income increase for the third quarter, compared with the same period of 1995. Year-to-date sales for the segment totaled $59 million, a 3% increase over last year's comparable period. Operating income is 7% ahead of last year. Several new marketing initiatives were launched in the third quarter that are expected to further extend Imo's leadership position in industrial level and flow sensors in 1997. Morse Controls Sales in Europe were up 11% in the third quarter of 1996 compared with the third quarter of 1995, reflecting the additional sales volume of RMH Controls which was acquired at the end of 1995. Operating income increased in line with the sales increase. Worldwide, third quarter sales were up 6% and income up 21%. Year-to-date sales totaled $87 million, up 4% over the first nine months of 1995, and segment operating income totaled $7.4 million, up 3%. Although unusually cold spring weather in the US dampened consumer interest in boating, an aggressive promotional effort by Morse's marine products group turned a lackluster pleasure boating season into a modest improvement in sales and earnings for this product segment. Roltra-Morse Roltra-Morse sales of $17.3 million in the third quarter were 16% below last year's third quarter. Year-to-date sales of $61.6 million are 21% behind 1995. Volumes have been affected by weak auto sales in Italy, where continuing political and economic uncertainty and the government's current austerity budget have depressed consumer spending. The strengthening of the lira has had a detrimental impact on exports. Roltra incurred a small loss of $149,000 in segment operating income for the third quarter, compared to income of $1.6 million for the same quarter of last year. Year-to-date operating income of $1.3 million is well behind last year's total of $6 million. A modest improvement in sales volume is expected in Italy in 1997, with Roltra well positioned to secure additional business when new auto models move into production. Roltra is also benefiting from its geographical diversification. Orders from the new Brazilian joint venture are now at $1 million per month, and sales are gaining considerable strength at the Roltra-Morse subsidiary in Poland. Imo Industries Inc., with 1995 sales of $472 million from continuing operations, is a diversified manufacturer of pumps, fluid sensors, power transmission products, remote control systems, and automotive components, with operations worldwide. It is listed on the NYSE as IMD (Imoind). ### IMO INDUSTRIES INC. AND SUBSIDIARIES Condensed Consolidated Statements of Income (Amounts in thousands, except per share data)
Three Months Nine Months Ended Ended September 30, September 30, (Unaudited) (Unaudited) 1996 1995 1996 1995 Net Sales (a) $ 113,095 $ 109,428 $ 354,498 $ 361,031 Gross Profit 30,893 31,009 101,033 102,979 Segment Operating Income (a) 8,847 11,289 31,664 37,050 Income (Loss) From Continuing Operations Before Income Taxes, Minority Interest and Extraordinary Item (a) (1,491) 2,953 3,248 11,954 Income Taxes (a) 10,900 695 12,894 2,630 Minority Interest (a) 26 (69) (25) 37 Income (Loss) From Continuing Operations Before Minority Interest and Extraordinary Item (12,417) 2,327 (9,621) 9,287 Discontinued Operations, Net of Taxes: (a)(b) Income from Operations --- --- --- --- Estimated Gain (Loss) on Disposal (7,349) (6,750) (7,349) 32,863 (7,349) (6,750) (7,349) 32,863 Extraordinary Item (c) --- (304) (8,455) (4,444) Net Income (Loss) $ (19,766) $ (4,727) $ (25,425) $ 37,706 Earnings Per Share: Continuing Operations Before Extraordinary Item $ (0.73) $ 0.14 $ (0.57) $ 0.55 Discontinued Operations $ (0.43) $ (0.40) $ (0.43) $ 1.92 Extraordinary Item $ --- $ (0.02) $ (0.49) $ (0.26) Net Income (Loss) $ (1.16) $ (0.28) $ (1.49) $ 2.21 Average Shares Outstanding 17,105 17,068 17,093 17,038 Bookings: (a) Power Transmission $ 22,772 $ 22,360 $ 68,538 $ 72,933 Pumps 24,181 28,154 83,139 74,917 Instrumentation 18,282 18,948 60,747 60,829 Morse Controls 26,871 24,590 84,868 80,880 Roltra-Morse 25,229 26,764 59,015 74,476 $ 117,335 $ 120,816 $ 356,307 $ 364,035 Backlog $ 112,207 $ 111,139
See attached notes. IMO INDUSTRIES INC. AND SUBSIDIARIES Segment Information and Financial Highlights Excludes Discontinued Operations (Dollars in thousands)
Three Months Nine Months Ended September 30, Ended September 30, (Unaudited) (Unaudited) 1996 1995 1996 1995 Net Sales: (a) Power Tranmission $ 22,141 $ 22,343 $ 67,060 $ 72,636 Pumps 26,251 22,650 80,027 69,536 Instrumentation 20,333 18,122 59,043 57,509 Morse Controls 27,106 25,612 86,772 83,506 Roltra-Morse 17,264 20,701 61,596 77,844 Total Net Sales 113,095 109,428 354,498 361,031 Segment Operating Income : (a) Power Transmission 2,298 2,768 6,758 9,157 Pumps 2,266 3,119 9,247 8,247 Instrumentation 2,337 2,050 7,011 6,526 Morse Controls 2,095 1,732 7,371 7,155 Roltra-Morse (149) 1,620 1,277 5,965 Total Segment Operating Income 8,847 11,289 31,664 37,050 Equity in Income of Unconsolidated Companies (107) 25 (57) 277 Corporate Expense (2,347) (921) (4,865) (3,777) Net Interest Expense (b) (7,884) (7,440) (23,494) (21,596) Income (Loss) From Continuing Operations Before Income Taxes, Minority Interest and Extraordinary Item (a)(b) $ (1,491) $ 2,953 $ 3,248 $ 11,954 Memo: Income Before Interest, Taxes, Depreciation and Amortization (EBITDA): Income (Loss) From Continuing Operations Before Income Taxes, Minority Interest and Extraordinary Item $ (1,491) $ 2,953 $ 3,248 $ 11,954 Add Back: Interest Expense (b) 8,179 7,842 24,493 23,290 Depreciation and Amortization 4,374 4,427 13,745 13,576 EBITDA $ 11,062 $ 15,222 $ 41,486 $ 48,820
See attached notes. IMO INDUSTRIES INC. AND SUBSIDIARIES (a) As shown on the Segment Information and Financial Highlights, the Company's Continuing Operations are comprised of the Power Transmission, Pumps, Instrumentation, Morse Controls, and Roltra-Morse business segments. On November 8, 1996, the Company announced that it is withdrawing its Roltra-Morse business from its divestiture program because threats made by one of the bidders has made it impossible for the Company to receive fair value for the business. Due to the withdrawal of Roltra-Morse from potential sale, the Company has restated its nine month and, first and second quarter earnings of 1996 to reflect Roltra-Morse as a continuing operation. Prior year amounts have been reclassified to reflect Roltra-Morse as a continuing operation. Accounting for the business as a continuing operation has required the Company to reverse a favorable $10 million tax benefit which was based on an anticipated gain on the sale, and to recognize $4.8 million of previously deferred 1996 losses related to Roltra-Morse. Additionally, the Company recognized $7.4 million related to changes in estimates on legal and other unanticipated reserve requirements of other previously discontinued operations. The Company had been accounting for its Roltra-Morse business as a discontinued operation since its plan to sell the operation was announced on February 7, 1996. The Company sold substantially all of its Electro- Optical Systems business segment and its Turbomachinery business segment in 1995. These business segments have been accounted for as discontinued operations and, accordingly, their operations are shown in the Condensed Consolidated Statements of Income as Discontinued Operations. (b) Interest amounts included in income from continuing operations exclude interest allocated to the Discontinued Operations of $.5 million for the three months ended September 30, 1996 and 1995, respectively, and $1.3 million and $4.5 million for the nine months ended September 30, 1996 and 1995, respectively. The amounts allocated are included in income from operations of discontinued operations, net of taxes. Amounts indicated as net are net of interest income of $.3 million and $.4 million for the three months ended September 30, 1996 and 1995, respectively, and $1.0 million and $1.7 million for the nine months ended September 30, 1996 and 1995, respectively. (c) The three months ended September 30, 1995 include an extraordinary charge of $.3 million ($.02 per share), representing the non-cash write-off of previously deferred loan costs in connection with the early extinguishment of debt. The nine months ended September 30, 1996 include an extraordinary charge of $8.5 million ($.49 per share) representing the costs incurred in connection with the early extinguishment of debt as well as the write-off of previously deferred loan costs. The nine months ended September 30, 1995 include an extraordinary charge of $4.4 million ($.26 per share), representing the non-cash write-off of previously deferred loan costs in connection with the early extinguishment of debt. -----END PRIVACY-ENHANCED MESSAGE-----