-----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, Rv/VN2/YrdFDjh9CxKw5GBs5xVvDjBI8hKwzZ8dUYbxo8lxyFCGKoyJqkX59k3A4 ijFYL9Ysm5YDl1QazkY9Ug== 0000912057-02-038470.txt : 20021011 0000912057-02-038470.hdr.sgml : 20021011 20021011162037 ACCESSION NUMBER: 0000912057-02-038470 CONFORMED SUBMISSION TYPE: 8-K/A PUBLIC DOCUMENT COUNT: 4 CONFORMED PERIOD OF REPORT: 20020729 ITEM INFORMATION: Financial statements and exhibits FILED AS OF DATE: 20021011 FILER: COMPANY DATA: COMPANY CONFORMED NAME: BENCHMARK ELECTRONICS INC CENTRAL INDEX KEY: 0000863436 STANDARD INDUSTRIAL CLASSIFICATION: PRINTED CIRCUIT BOARDS [3672] IRS NUMBER: 742211011 STATE OF INCORPORATION: TX FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 8-K/A SEC ACT: 1934 Act SEC FILE NUMBER: 001-10560 FILM NUMBER: 02787676 BUSINESS ADDRESS: STREET 1: 3000 TECHNOLOGY DRIVE CITY: ANGLETON STATE: TX ZIP: 77515 BUSINESS PHONE: 9798496550 MAIL ADDRESS: STREET 1: 3000 TECHNOLOGY DR CITY: ANGLETON STATE: TX ZIP: 77515 8-K/A 1 a2090926z8-ka.txt 8-K/A UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM 8-K/A AMENDED CURRENT REPORT Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934 Date of Report (Date of earliest event reported): July 29, 2002 BENCHMARK ELECTRONICS, INC. (Exact name of registrant as specified in its charter) TEXAS 1-10560 74-2211011 (State or other jurisdiction (Commission (I.R.S. Employer of incorporation) File Number) Identification No.) 3000 TECHNOLOGY DRIVE, ANGLETON, TEXAS 77515 (Address of principal executive offices) (Zip code) Registrant's telephone number, including area code: (979) 849-6550 ITEM 7. FINANCIAL STATEMENTS, PRO FORMA FINANCIAL INFORMATION AND EXHIBITS On August 13, 2002, Benchmark Electronics, Inc. (the "Company" or "Benchmark") filed a current report on Form 8-K to report the acquisition of ACT Thailand Manufacturing (Thailand) Public Company Limited ("ACT Thailand") and ACT Manufacturing Holdings UK Limited ("ACT UK"). Pursuant to Item 7(a)(4) of Form 8-K, the Company indicated that it would file certain financial information under Item 7 of Form 8-K no later than October 11, 2002. This amendment is filed to provide the required financial information and to amend the language of Section (a) of Item 7. (a) Financial statements of business acquired. The required financial information of ACT Thailand has been included hereto in Exhibits 99.1 and 99.2 to the Amended Current Report on Form 8-K/A. (b) Pro forma financial information. The required pro forma financial information included in this Amended Current Report on Form 8-K/A, which gives effect to the acquisition of ACT Thailand, is as follows: PRO FORMA FINANCIAL INFORMATION
PAGE ---- Unaudited Pro Forma Combined Condensed Financial Information 3 Unaudited Pro Forma Combined Condensed Balance Sheet as of June 30, 2002 4 Unaudited Pro Forma Combined Condensed Statement of Operations for the Year Ended December 31, 2001 5 Unaudited Pro Forma Combined Condensed Statement of Operations for the Six Months Ended June 30, 2002 6 Notes to Unaudited Pro Forma Combined Condensed Financial Statements 7
(c) Exhibits. The following exhibits are filed with this Amended Current Report on Form 8-K/A:
EXHIBIT NUMBER EXHIBIT DESCRIPTION ---------- -------------------------------------------------------------- 23.1 Consent of Experts. 99.1 ACT Manufacturing (Thailand) Public Company Limited audited consolidated financial statements as of and for the year ended November 24, 2001. 99.2 ACT Manufacturing (Thailand) Public Company Limited unaudited condensed consolidated financial statements as of and for the six months ended May 24, 2002.
1 CAUTIONARY STATEMENT REGARDING FORWARD-LOOKING STATEMENTS: This filing contains certain forward-looking statements within the scope of the Securities Act of 1933 and the Securities Exchange Act of 1934. The words "expect," "estimate," "anticipate," "predict," and similar expressions, and the negatives of such expressions, are intended to identify forward-looking statements. Although Benchmark believes that these statements are based upon reasonable assumptions, such statements involve risks, uncertainties and assumptions, including but not limited to industry and economic conditions, customer actions and the other factors discussed in Benchmark's Form 10-K for the year ended December 31, 2001 and its other filings with the Securities and Exchange Commission. Should one or more of these risks or uncertainties materialize, or should underlying assumptions prove incorrect, actual outcomes may vary materially from those indicated. 2 BENCHMARK ELECTRONICS, INC. AND SUBSIDIARIES UNAUDITED PRO FORMA COMBINED CONDENSED FINANCIAL INFORMATION The following unaudited pro forma combined condensed financial statements are not necessarily indicative of the combined results of operations for future periods or the results of operations that would have been realized had the Company and ACT Thailand been combined during the periods specified. The unaudited pro forma combined condensed financial statements and the related notes should be read in conjunction with the historical financial statements of Benchmark and ACT Thailand. On July 29, 2002, Benchmark Electronics, Inc. ("Benchmark") completed its previously announced acquisition (the "Acquisition") of all of the issued and outstanding capital stock of ACT Manufacturing Holdings UK Limited and 68,374,718 shares, constituting at least 99.77% of the issued and outstanding capital stock of ACT Manufacturing (Thailand) Public Company Limited. As consideration for the Acquisition, the Company paid $45.2 million in cash and estimates that direct acquisition costs will be $1.5 million. Benchmark is accounting for the acquisition utilizing the accounting principles promulgated by SFAS 141 and 142. Therefore, the effects of the acquisition will be reflected on Benchmark's financial statements from and after the acquisition date. Because ACT UK is not individually significant to Benchmark, their financial statements have not been included herein. The unaudited pro forma combined condensed balance sheet gives effect to the Acquisition as if it had occurred on June 30, 2002, and combines Benchmark's unaudited historical consolidated balance sheet as of June 30, 2002 with ACT Thailand's unaudited historical U.S. GAAP consolidated balance sheet as June 28, 2002. The unaudited pro forma combined condensed statement of operations for the year ended December 31, 2001, gives the effect to the Acquisition as if it had occurred on January 1, 2001, and combines Benchmark's historical consolidated statement of operations for the year ended December 31, 2001, with ACT Thailand's historical U.S. GAAP consolidated statement of operations for the year ended November 24, 2001. The unaudited pro forma combined condensed statement of operations for the six months ended June 30, 2002, gives the effect to the Acquisition as if it had occurred on January 1, 2001, and combines Benchmark's unaudited historical consolidated statement of operations for the six months ended June 30, 2002, with ACT Thailand's historical U.S. GAAP consolidated statement of operations for the six months ended May 24, 2002. 3 BENCHMARK ELECTRONICS, INC. UNAUDITED PRO FORMA COMBINED CONDENSED BALANCE SHEET (IN THOUSANDS)
ACT BENCHMARK THAILAND HISTORICAL HISTORICAL AS OF AS OF JUNE 30, JUNE 28, PRO FORMA 2002 2002 ADJUSTMENTS COMBINED ------------- ------------- ----------------- ------------- ASSETS Cash and cash equivalents $ 225,976 $ 14,620 $ (38,200)(a) $ 202,396 Accounts receivable, net 191,585 22,213 -- 213,798 Inventories, net 195,682 29,696 636 (b) 226,014 Prepaid expense and other current assets 29,849 2,690 -- 32,539 ------------- ------------- ----------------- ------------- Total current assets 643,092 69,219 (37,564) 674,747 Net property, plant and equipment 80,733 17,674 -- 98,407 Goodwill, net 119,506 86,001 (77,356)(c) 128,151 Other assets, net 15,031 28 -- 15,059 ------------- ------------- ----------------- ------------- Total assets $ 858,362 $ 172,922 $ (114,920) $ 916,364 ============= ============= ================= ============= LIABILITIES AND SHAREHOLDERS' EQUITY Current installments of long-term debt $ 23,415 $ 4,994 $ -- $ 28,409 Notes payable -- 15,677 -- 15,677 Accounts payable 188,988 17,806 -- 206,794 Accrued expenses and other 37,836 4,449 1,268 (d) 43,553 ------------- ------------- ----------------- ------------- Total current liabilities 250,239 42,926 1,268 294,433 Long-term debt 112,714 13,808 -- 126,522 Other long-term liabilities 18,702 -- -- 18,702 Shareholders' Equity: Common stock 2,419 15,679 (15,679)(e) 2,419 Additional paid-in capital 432,412 85,783 (85,783)(e) 432,412 Retained earnings 57,969 14,776 (14,776)(e) 57,969 Accumulated other comprehensive loss (15,973) (50) 50 (e) (15,973) Treasury shares (120) -- -- (120) ------------- ------------- ----------------- ------------- Total shareholders' equity 476,707 116,188 (116,188) 476,707 ------------- ------------- ----------------- ------------- Total liabilities and shareholders' equity $ 858,362 $ 172,922 $ (114,920) $ 916,364 ============= ============= ================= =============
4 BENCHMARK ELECTRONICS, INC. UNAUDITED PRO FORMA COMBINED CONDENSED STATEMENT OF OPERATIONS (IN THOUSANDS)
ACT BENCHMARK THAILAND HISTORICAL HISTORICAL YEAR ENDED YEAR ENDED DECEMBER 31, NOVEMBER 24, PRO FORMA 2001 2001 ADJUSTMENTS COMBINED --------------- --------------- -------------- -------------- Sales $ 1,276,950 $ 207,380 -- $ 1,484,330 Cost of goods sold 1,183,440 183,588 -- 1,367,028 --------------- --------------- -------------- -------------- Gross profit 93,510 23,792 -- 117,302 Selling, general and administrative 54,383 6,731 -- 61,114 Restructuring charges 7,569 -- -- 7,569 Asset write-offs 61,720 -- -- 61,720 Amortization of goodwill 12,219 9,904 (9,904)(f) 12,219 --------------- --------------- -------------- -------------- Income (loss) from operations (42,381) 7,157 9,904 (25,320) Interest expense (16,998) (2,669) -- (19,667) Other income 1,086 3,505 -- 4,591 --------------- --------------- -------------- -------------- Income (loss) before income taxes (58,293) 7,993 9,904 (40,396) Income tax benefit (expense) 3,981 (449) -- 3,532 --------------- --------------- -------------- -------------- Net income (loss) $ (54,312) $ 7,544 $ 9,904 $ (36,864) =============== =============== ============== ============== Net loss per share: Basic $ (2.77) $ (1.88) Diluted $ (2.77) $ (1.88) =============== ============== Shares used to compute net loss per share: Basic 19,625 19,625 Diluted 19,625 19,625 =============== ==============
5 BENCHMARK ELECTRONICS, INC. UNAUDITED PRO FORMA COMBINED CONDENSED STATEMENT OF OPERATIONS (IN THOUSANDS)
ACT BENCHMARK THAILAND HISTORICAL HISTORICAL SIX MONTHS SIX MONTHS ENDED ENDED PRO FORMA JUNE 30, 2002 MAY 24, 2002 ADJUSTMENTS COMBINED --------------- --------------- -------------- -------------- Sales $ 733,563 $ 90,347 -- $ 823,910 Cost of goods sold 677,886 83,531 -- 761,417 --------------- --------------- -------------- -------------- Gross profit 55,677 6,816 -- 62,493 Selling, general and administrative 30,298 2,960 -- 33,258 Asset write-offs 1,608 -- -- 1,608 --------------- --------------- -------------- -------------- Income from operations 23,771 3,856 -- 27,627 Interest expense (5,691) (852) -- (6,543) Other income 3,179 194 -- 3,373 --------------- --------------- -------------- -------------- Income before income taxes 21,259 3,198 -- 24,457 Income tax benefit (expense) (7,653) 8 (670)(g) (8,315) --------------- --------------- -------------- -------------- Net income $ 13,606 $ 3,206 $ (670) $ 16,142 =============== =============== ============== ============== Net income per share: Basic $ 0.63 $ 0.74 Diluted $ 0.60 $ 0.71 =============== ============== Shares used to compute net income per share: Basic 21,719 21,719 Diluted 22,585 22,585 =============== ==============
6 BENCHMARK ELECTRONICS, INC. NOTES TO UNAUDITED PRO FORMA COMBINED CONDENSED FINANCIAL STATEMENTS The pro forma information related to the Acquisition has been prepared in accordance with Statement of Financial Accounting Standards (SFAS) No. 141, "Business Combinations," and SFAS 142, "Goodwill and Other Intangible Assets," which were adopted by Benchmark effective January 1, 2002. The Acquisition will be accounted for as a purchase. Accordingly, the cash paid for the acquisition and the direct acquisition costs incurred are recorded as the purchase price. The purchase price will be allocated to individual assets acquired and liabilities assumed based on their respective fair values. The excess purchase price over the fair value of the net assets are allocated to goodwill. The following table summarizes the estimated fair value of the assets acquired and liabilities assumed at the date of acquisition. The Company is in the process of obtaining third-party valuations of certain assets; thus, the allocation of the purchase price is subject to refinement. Calculation of purchase price: Cash $ 38,200 Acquisition costs 1,268 --------- Total purchase price $ 39,468 ========= Preliminary allocation of purchase price: Current assets $ 69,855 Property, plant and equipment 17,674 Other assets 28 Goodwill 8,645 --------- Total assets acquired $ 96,202 --------- Current liabilities 42,926 Long-term debt 13,808 --------- Total liabilities assumed 56,734 --------- Net assets acquired $ 39,468 =========
The following adjustments have been reflected in the Pro Forma Adjustments column of the audited pro forma combined condensed balance sheet and statement of operations: (a) Represents the cash consideration paid for ACT Thailand. (b) Represents adjustment to record inventory at "fair value." (c) Represents the allocation of the excess of total consideration over the net assets acquired to goodwill. (d) Represents the accrual of direct acquisition costs. (e) Represents the elimination of ACT Thailand's historical equity. (f) Represents the elimination of ACT Thailand's historical goodwill amortization expense. (g) Benchmark's estimated tax rate is 34%, after giving effect to the Acquisition. 7 S I G N A T U R E Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this amendment to be signed on its behalf by the undersigned hereunto duly authorized. Benchmark Electronics, Inc. Dated: October 11, 2002 By: /s/ Donald E. Nigbor ---------------------- Donald E. Nigbor Chief Executive Officer 8 EX-23.1 3 a2090926zex-23_1.txt EXHIBIT 23.1 Exhibit 23.1 Independent Auditors' Consent The Board of Directors ACT Manufacturing (Thailand) Public Company Limited: We consent to the incorporation by reference in the registration statements (No. 333-90723, No. 333-90887 and No. 333-84488) on Form S-3 and registration statements (No. 33-61660, No. 333-26805, No. 333-28997, No. 333-54186, No. 333-66889 and No. 333-76207) on Form S-8 of Benchmark Electronics, Inc. of our report dated September 10, 2002, with respect to the consolidated balance sheet of ACT Manufacturing (Thailand) Public Company Limited as of November 24, 2001, and the related consolidated statements of income, stockholders' equity and comprehensive income, and cash flows for the year then ended, which report appears in the Form 8-K/A of Benchmark Electronics, Inc. dated October 11, 2002. KPMG Audit (Thailand) Limited October 9, 2002 EX-99.1 4 a2090926zex-99_1.txt EXHIBIT 99.1 ACT MANUFACTURING (THAILAND) PUBLIC COMPANY LIMITED AND SUBSIDIARIES Consolidated Financial Statements November 24, 2001 (With Independent Auditors' Report Thereon) INDEPENDENT AUDITORS' REPORT The Board of Directors ACT Manufacturing (Thailand) Public Company Limited: We have audited the accompanying consolidated balance sheet of ACT Manufacturing (Thailand) Public Company Limited and subsidiaries as of November 24, 2001, and the related consolidated statements of income, stockholders' equity and comprehensive income, and cash flows for the year then ended. These consolidated financial statements are the responsibility of the Company's management. Our responsibility is to express an opinion on these consolidated financial statements based on our audit. We conducted our audit in accordance with auditing standards generally accepted in the United States of America. 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, the consolidated financial statements referred to above present fairly, in all material respects, the financial position of ACT Manufacturing (Thailand) Public Company Limited and subsidiaries as of November 24, 2001, and the results of their operations and their cash flows for the year then ended in conformity with accounting principles generally accepted in the United States of America. September 10, 2002 KPMG Audit (Thailand) Limited ACT MANUFACTURING (THAILAND) PUBLIC COMPANY LIMITED AND SUBSIDIARIES Consolidated Balance Sheets November 24, 2001 (In thousands of US$, except share data)
ASSETS 2001 ---------------- Current assets: Cash and cash equivalents $ 11,538 Short-term investment (note 2) 1,020 Trade accounts receivable, net of allowance for doubtful accounts of $6,581 23,502 Inventories, less obsolescence reserve (note 3) 23,235 Due from affiliated company 472 Other current assets 1,102 ---------------- Total current assets 60,869 Other receivables 101 Net property, plant and equipment (notes 4 and 6) 18,327 Goodwill, net (note 5) 86,001 ---------------- Total assets $ 165,298 ================ LIABILITIES AND STOCKHOLDERS' EQUITY Current liabilities: Current installments of long-term debt (note 6) $ 4,994 Bank overdrafts and notes payable to banks 3,883 Trade accounts payable 18,334 Income taxes payable (note 9) 986 Due to affiliated company 408 Accrued expenses 4,271 Other current liabilities 1,558 ---------------- Total current liabilities 34,434 Long-term debt, excluding current installments (note 6) 17,553 Long-term service benefits (note 10) 490 ---------------- Total liabilities 52,477 ---------------- Stockholders' equity: Common stock, Baht 10 par value. Authorized 72,050,000 shares; issued and outstanding 68,529,136 shares in 2001 (note 8) 15,679 Additional paid-in capital (note 8) 85,783 Retained earnings 11,409 Accumulated other comprehensive loss (50) ---------------- Total stockholders' equity 112,821 Commitments and contingencies (notes 6 and 11) -- ---------------- Total liabilities and stockholders'equity $ 165,298 ================
See accompanying notes to consolidated financial statements. 3 ACT MANUFACTURING (THAILAND) PUBLIC COMPANY LIMITED AND SUBSIDIARIES Consolidated Statement of Income Year ended November 24, 2001 (In thousands of US$, except share data)
2001 ---------------- Net sales $ 207,380 Cost of goods sold 183,588 ---------------- Gross profit 23,792 Selling, general and administrative expenses 6,731 Amortization of goodwill 9,904 ---------------- Operating income 7,157 Other income (expense): Interest expense (2,669) Other income 3,630 Other expense (125) ---------------- Income before income taxes 7,993 Income taxes (note 9) 449 ---------------- Net income $ 7,544 ================ Basic earnings per share $ 0.19 ================ Weighted average number of shares outstanding- basic 40,549,714 ================
See accompanying notes to consolidated financial statements. 4
ACT MANUFACTURING (THAILAND) PUBLIC COMPANY LIMITED AND SUBSIDIARIES Consolidated Statements of Stockholders' Equity and Comprehensive Income Year ended November 24, 2001 (In thousands of US$, except share data) ACCUMULATED ADDITIONAL OTHER TOTAL COMMON PAID-IN RETAINED COMPREHENSIVE STOCKHOLDERS' STOCK CAPITAL EARNINGS LOSS EQUITY ------------ ----------- ------------ -------------- ---------------- Balances at November 25, 2000 $ 5,179 85,621 3,865 (17) 94,648 Net income -- -- 7,544 -- 7,544 Foreign currency translation adjustments -- -- -- (33) (33) ---------------- Comprehensive income 7,511 ---------------- Shares issued in connection with: Issuance of common stock, 68,529,136 shares at Baht 10 10,500 -- -- -- 10,500 Second tender offer -- 162 -- -- 162 ------------ ----------- ------------ -------------- ---------------- Balances at November 24, 2001 $ 15,679 85,783 11,409 (50) 112,821 ============ =========== ============ ============== ================
See accompanying notes to consolidated financial statements. 5 ACT MANUFACTURING (THAILAND) PUBLIC COMPANY LIMITED AND SUBSIDIARIES Consolidated Statement of Cash Flows Year ended November 24, 2001 (In thousands of US$)
2001 -------------- Cash flows from operating activities: Net income $ 7,544 Adjustments to reconcile net income to net cash provided by operating activities: Depreciation and amortization of property, plant and equipment 2,125 Goodwill amortization 9,905 Provision for obsolete inventory 156 Gain on sale of equipment (52) Provision for long-term service benefits 17 Changes in operating assets and liabilities: Trade accounts receivable 21,806 Inventories 16,516 Due from affiliated company (472) Other current assets 638 Other receivables (2) Trade accounts payable (29,734) Income taxes payable 326 Due to affiliated company (3,086) Accrued expenses (7,054) Other current liabilities 289 -------------- Net cash provided by operating activities 18,922 -------------- Cash flows from investing activities: Purchases of short-term investments (1,020) Proceeds from sale of equipment 65 Purchases of property, plant and equipment (3,037) -------------- Net cash used in investing activities (3,992) -------------- Cash flows from financing activities: Net payments on bank overdrafts and notes payable to banks (26,292) Principal payments on long-term debt (16,523) Proceeds from long-term debt 24,970 Proceeds from issuance of common stock 10,500 -------------- Net cash used in financing activities (7,345) -------------- Effects of exchange rate differences on cash and cash equivalents (52) -------------- Net increase in cash and cash equivalents 7,533 Cash and cash equivalents at beginning of year 4,005 -------------- Cash and cash equivalents at end of year $ 11,538 ============== Supplemental disclosure of cash flow information: Cash paid during the year: Interest 2,798 Income taxes 725 Supplemental disclosure of non-cash activities: Increase in goodwill from purchase of shares from minority shareholders by Parent 162
See accompanying notes to consolidated financial statements. 6 ACT MANUFACTURING (THAILAND) PUBLIC COMPANY LIMITED. AND SUBSIDIARIES Notes to Consolidated Financial Statements November 24, 2001 In Thousands of US$ (1) SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES AND PRACTICES (a) DESCRIPTION OF BUSINESS ACT Manufacturing (Thailand) PCL ("the Company") is a registered Thai company in the business of assembling electronic products for export. The Company was listed on the Stock Exchange of Thailand in 1989. On August 2, 2000, ACT Manufacturing Inc. ("ACT Inc."), a registered company in the United States, acquired 99.7% of the Company's issued shares and all of the outstanding options. The Company was delisted from the Stock Exchange of Thailand and changed its name to ACT Manufacturing (Thailand) Public Company. The Company has three wholly owned subsidiaries located in Singapore, California and Wales. The subsidiaries' activities range from purchasing in Singapore and sales and marketing in California. The subsidiary in Wales is dormant and currently does not conduct any business. Thailand and many Asia Pacific countries continue to experience economic difficulties since 1997. The accompanying consolidated financial statements reflect management's current assessment of the possible impact of the economic conditions on the financial position of the Company and subsidiaries. (b) BASIS OF PRESENTATION AND PRINCIPLES OF CONSOLIDATION The financial statements and associated notes are presented in US dollars, rounded to the nearest thousand. The consolidated financial statements include the financial statements of ACT Manufacturing (Thailand) Public Company Limited and its three wholly owned subsidiaries. All significant intercompany balances and transactions have been eliminated in consolidation. (c) CASH AND CASH EQUIVALENTS Cash equivalents consist of cash in hand and deposits at banks and financial institutions with original maturities of three months or less. (d) ACCOUNTS RECEIVABLE Accounts receivable are recorded at cost, less the related allowance for doubtful accounts. The allowance for doubtful accounts is based on management's evaluation of specific accounts. (e) INVENTORIES Inventories include material, labor and overhead and are stated at the lower of cost or market. Cost is determined using the first-in, first-out method. 7 ACT MANUFACTURING (THAILAND) PUBLIC COMPANY LIMITED. AND SUBSIDIARIES Notes to Consolidated Financial Statements November 24, 2001 In Thousands of US$ (f) PROPERTY, PLANT AND EQUIPMENT Property, plant and equipment are stated at cost. Depreciation on plant and equipment is calculated on the straight-line method over the estimated useful lives of the assets. Leasehold improvements are amortized straight-line over the shorter of the lease term or estimated useful life of the asset. The useful lives of the classes of property, plant and equipment are as follows: Buildings 20-25 years Machinery and equipment 4-5 years Leasehold improvements 5-10 years Vehicles 2-5 years
(g) GOODWILL Goodwill, which represents the excess of purchase price over fair value of net assets acquired, is amortized on a straight-line basis over the period of expected benefit of 10 years. Goodwill is stated at net of amortization. (See note 1(j)) (h) INCOME TAXES Income taxes are accounted for under the asset and liability method. Deferred income taxes are recognized for the future tax consequences attributable to differences between the financial statement carrying amounts of existing assets and liabilities and their respective tax bases. Deferred tax assets and liabilities are measured using enacted tax rates expected to apply to taxable income in the years in which those temporary differences are expected to be recovered or settled. (i) LONG-TERM SERVICE BENEFIT Under labor laws applicable to companies in Thailand, all employees with more than 120 days of service are entitled to severance pay on termination of service, including death, forced termination or retrenchment, or in the event of retirement at age 60. The termination benefits are unfunded. (j) IMPAIRMENT The Company accounts for long-lived assets in accordance with the provisions of SFAS No. 121, "Accounting for the Impairment of Long-Lived Assets and for Long-Lived Assets to Be Disposed Of." This Statement requires that long-lived assets and certain identifiable intangibles be reviewed for impairment whenever events or changes in circumstances indicate that the carrying amount of an asset may not be recoverable. Recoverability of assets to be held and used is measured by a comparison of the carrying amount of an asset to future net cash flows expected to be generated by the asset. If such assets are considered to be impaired, the impairment to be recognized is measured by the amount by which the carrying amount of the assets exceeds the fair value of the assets. Assets to be disposed of are reported at the lower of the carrying amount or fair value less costs to sell. (k) REVENUE RECOGNITION Revenue is recognized upon shipment of the product or otherwise, under certain contracts, when title to and risks and rewards of ownership pass to the customer. 8 ACT MANUFACTURING (THAILAND) PUBLIC COMPANY LIMITED. AND SUBSIDIARIES Notes to Consolidated Financial Statements November 24, 2001 In Thousands of US$ (l) COMMITMENTS AND CONTINGENCIES Liabilities for loss contingencies, arising from claims, assessments, litigation, fines and penalties and other sources are recorded when it is probable that a liability has been incurred and the amount of the assessment can be reasonably estimated. (m) EARNINGS PER SHARE Basic and diluted earnings per share are computed using the weighted average number of shares outstanding. As at November 24, 2001, there were no instruments outstanding that would have a dilutive effect on the diluted earnings per share calculation. (n) FAIR VALUE OF FINANCIAL INSTRUMENTS The Company's financial instruments consist of cash and cash equivalents, short-term investments, accounts receivable, accounts payable and loans from financial institutions. The Company believes that the carrying amount of these instruments approximate their fair value. (o) FOREIGN CURRENCY Transactions in foreign currencies are translated to US dollars at the foreign exchange rate ruling at the date of the transaction. Monetary assets and liabilities denominated in foreign currencies at the balance sheet date are translated to US dollars at the foreign exchange rate ruling at that date. Foreign exchange differences arising on translation are recognized in the statement of income. Total foreign exchange gains are included in other income and totaled approximately $1,760. The Company's functional currency is US dollars. The financial statements of the Company's foreign subsidiaries are measured in the local currency as the functional currency. Assets and liabilities are translated at exchange rates in effect at the balance sheet date. Revenue and expenses are translated at average exchange rates in effect during the year. The effects of these translation adjustments are reported as a separate component of stockholders' equity. (p) USE OF ESTIMATES Management of the Company has made a number of estimates and assumptions relating to the reporting of assets and liabilities and the disclosure of contingent assets and liabilities to prepare these financial statements in accordance with generally accepted accounting principles. Actual results could differ from those estimates. (2) SHORT-TERM INVESTMENTS Short-term investments consist of fixed term deposits with maturities between three months and one year. At November 24, 2001 fixed term deposits amounted to $1,020. 9 ACT MANUFACTURING (THAILAND) PUBLIC COMPANY LIMITED. AND SUBSIDIARIES Notes to Consolidated Financial Statements November 24, 2001 In Thousands of US$ (3) INVENTORIES Inventories consist of the following:
2001 -------------- Finished goods $ 3,990 Work in process 4,373 Raw materials 18,678 Less: Provision for obsolete inventory (3,806) -------------- $ 23,235 ==============
At November 24, 2001 the amount of finished goods, included above, consigned to customers totals $2,800. (4) PROPERTY, PLANT AND EQUIPMENT Property, plant and equipment as at November 24, 2001 consist of the following:
2001 --------------- Land $ 3,266 Buildings 6,809 Machinery and equipment 9,881 Leasehold improvements 1,044 Vehicles 17 Construction in progress 101 --------------- Total 21,118 Less accumulated depreciation (2,791) --------------- $ 18,327 ===============
Depreciation expense amounted to $2,125 for the year ended November 24, 2001. (5) GOODWILL The changes in the carrying amount of goodwill for the year ended November 24, 2001 are as follows: Balance at November 24, 2000 $ 95,744 Goodwill acquired during the year 162 Amortization during the year (9,905) --------------- Balance at November 24, 2001 $ 86,001 ===============
The accumulated amortization of goodwill at November 24, 2001 was approximately $13,200. 10 ACT MANUFACTURING (THAILAND) PUBLIC COMPANY LIMITED. AND SUBSIDIARIES Notes to Consolidated Financial Statements November 24, 2001 In Thousands of US$ (6) BORROWING FACILITIES In March 2001, the Company entered into a credit facilities agreement with two local banks, which has five tranche facilities. The agreement is guaranteed by ACT Manufacturing Inc. and secured by the Company's land and buildings in Korat, Rangsit and Hi-Tech Industrial Estate and certain machinery and equipment with a total net book value at November 24, 2001 of $10,800. These loans carry restrictive covenants pertaining to the performance and the ratio of debt to equity which will be effective beginning January 2002. The five tranche facilities include the following: Tranche A and B are long-term facilities with maximum aggregate principals of $24,970. Both Tranches bear interest at LIBOR plus 2.5% and are payable in quarterly installments until 2006. As at November 24, 2001, interest rates ranged from 6.25% to 7.38%. The total from both Tranches outstanding at November 24, 2001 was $22,547. Tranche C is short-term revolving credit lines aggregating $28.5 million, of which $1,085 was outstanding as at November 24, 2001. The credit lines bear interest at a range of LIBOR plus 2.5% to 2.75%. At November 24, 2001, interest rates ranged from 6.41% to 6.87%. Tranche D is banking overdraft lines aggregating Baht 20 million, of which Baht 2.146 million ($49) was outstanding at November 24, 2001. The Company's banking overdraft lines carry interest at the rate of MOR, which was equal to 8% on average. Trance E is a guarantee credit line aggregating Baht 40 million, of which Baht 32 million ($730) was outstanding at November 24, 2001. The Company has another short-term revolving credit line facility aggregating $4,000, which was not used at November 24, 2001. The overdraft line carries interest at LIBOR plus 2.75%. One of the Company's subsidiaries has outstanding bank overdrafts amounting to $2,749 at November 24, 2001. The bank overdrafts bear interest at rates ranging from prime to prime plus 2% per annum. The aggregate amounts of maturities of long-term debt for each of the five years subsequent to November 24, 2001 are as follows: 2002, $4,994; 2003, $4,994; 2004, $4,994; 2005, $4,994; and 2006, $2,571. Interest cost incurred during the year amounted to approximately $2,699. 11 ACT MANUFACTURING (THAILAND) PUBLIC COMPANY LIMITED. AND SUBSIDIARIES Notes to Consolidated Financial Statements November 24, 2001 In Thousands of US$ (7) LEASES The Company leased the property located at Korat plant to a third party under a 5-year cancelable agreement with a renewal option for an additional 3 years. Each party to the agreement has the right to terminate the lease by giving 6 months written notice to the other. At November 24, 2001 the gross amount of plant and equipment and related accumulated amortization relating to this operating lease amounted to approximately $4,900 and $1,300, respectively. The Company also has several noncancelable operating leases, primarily for vehicles and computer equipment that expire over the next three years. Rental expenses for operating leases during 2001 amounted to $509. Future minimum lease payments under noncancelable operating leases (with initial or remaining lease terms in excess of one year) at November 24, 2001 are 2002: $493; 2003: $289; and 2004: $127. (8) STOCKHOLDERS' EQUITY The Company increased its registered capital from Baht 220.5 million to Baht 720.5 million by issuing 50 million new shares at par value of Baht 10. The shares were allocated only to ACT Inc. ACT Inc. paid up approximately $10,500 for 47 million of the shares allocated during the year ended November 24, 2001. Total issued and paid-up share capital at November 24, 2001 amounted to $15,679. (9) INCOME TAXES The Company has been granted certain rights and privileges as a promoted industry under the Thailand's Board of Investment ("BOI"). The primary privileges received from BOI include an exemption from income tax on profit from operations and an exemption from import duty on production machinery and equipment and raw materials used in products for export. These privileges are available for a period of seven years. The majority of these privileges will end in January 2004. Current income tax expense based on income before income taxes consisted of domestic and foreign taxes in the amount of $317 and $132, respectively. There was no deferred income tax expense. 12 ACT MANUFACTURING (THAILAND) PUBLIC COMPANY LIMITED. AND SUBSIDIARIES Notes to Consolidated Financial Statements November 24, 2001 In Thousands of US$ Income tax expense (benefit) differed from the amounts computed by applying the Thailand income tax rate of 30% to pretax income from continuing operations as a result of the following:
2001 ------------- Tax at statutory rate $ 2,398 Increase (reduction) in income taxes resulting from: Amortization of goodwill, not deductible for tax 2,972 Income tax benefit from BOI privileges (4,824) Other, net (97) ------------- Income tax expense $ 449 =============
The Company does not have any deferred tax assets or liabilities at November 24, 2001. The excess of tax basis over book basis is projected to turn around during the period that the Company will be receiving BOI privileges. The effective tax rate during the BOI privilege period is zero. For the year ended November 24, 2001 the income tax benefit from BOI privileges amounted to $0.12 per share. The Company has not recognized differences between the carrying amounts over the tax basis for investments in foreign subsidiaries because assets representing those differences will be permanently reinvested. (10) LONG-TERM SERVICE BENEFITS At November 24, 2001, the present value of the unfunded obligations for long-term service benefits due to employees was approximately $490. Current service costs recognized in the statement of income amounted to $17. The assumptions used included a discount rate of 6.0% and a rate of compensation increase of 3.0%. During the year, no actual benefits were paid. (11) COMMITMENTS AND CONTINGENCIES The Company received a claim from a supplier relating to purchase commitments. This claim was recorded as a liability at November 24, 2001 and ultimately settled in May 2002 for an amount of $500. The Company is not involved in any other legal proceedings. 13 ACT MANUFACTURING (THAILAND) PUBLIC COMPANY LIMITED. AND SUBSIDIARIES Notes to Consolidated Financial Statements November 24, 2001 In Thousands of US$ (12) SUBSEQUENT EVENTS On December 21, 2001, ACT Inc. filed a petition for reorganization under Chapter 11 of the United States Bankruptcy Code. ACT Inc.'s bankruptcy filing does not include its foreign operations; however, ACT Inc. does serve as guarantor of the Company's credit facilities agreement dated March 29, 2001. The Company has since received written confirmation from its lenders that the bankruptcy petition of ACT Inc. does not presently constitute a breach of the Guarantee or cause a default of the Agreement by the Company. The Company and ACT Inc. have notified the banks of the bankruptcy filing as is stipulated in the agreement. On July 29, 2002, Benchmark Electronics, a registered corporation in the United States, purchased ACT Inc.'s 99.77% shareholding in the Company. The purchase was pursuant to the terms of an Asset and Share Purchase Agreement dated July 2, 2002 between Benchmark Electronics and ACT Inc. The purchase agreement was approved by the bankruptcy court. 14 EX-99.2 5 a2090926zex-99_2.txt EXHIBIT 99.2 ACT MANUFACTURING (THAILAND) PUBLIC COMPANY LIMITED CONDENSED CONSOLIDATED BALANCE SHEET MAY 24, 2002 (IN THOUSANDS)
MAY 24, 2002 ------------- (unaudited) ASSETS Cash and cash equivalents $ 17,894 Accounts receivable, net 21,097 Inventories, net 27,157 Prepaid expense and other current assets 2,653 ------------- Total current assets 68,801 Property, plant and equipment, net 17,729 Goodwill, net 86,001 Other assets 28 ------------- Total assets $ 172,559 ============= LIABILITIES AND STOCKHOLDERS' EQUITY Current installments of long-term debt $ 4,994 Notes payable 12,185 Accounts payable 19,264 Accrued expenses and other 4,544 ------------- Total current liabilities 40,987 Long-term debt 15,056 Other long-term liabilities 490 Stockholders' Equity: Common stock 15,679 Additional paid-in capital 85,783 Retained earnings 14,615 Accumulated other comprehensive loss (51) ------------- Total stockholders' equity 116,026 ------------- Total liabilities and stockholders' equity $ 172,559 =============
See accompanying notes to condensed consolidated financial statements. 1 ACT MANUFACTURING (THAILAND) PUBLIC COMPANY LIMITED CONDENSED CONSOLIDATED STATEMENT OF OPERATIONS SIX MONTHS ENDED MAY 24, 2002 AND MAY 25, 2001 (IN THOUSANDS)
SIX MONTHS ENDED --------------------------------------- MAY 24, 2002 MAY 25, 2001 -------------- -------------- (unaudited) Net sales $ 90,347 $ 121,097 Cost of goods sold 83,531 107,145 -------------- -------------- Gross profit 6,816 13,952 Selling, general and administrative 2,960 3,666 Amortization of goodwill -- 4,952 -------------- -------------- Income from operations 3,856 5,334 Interest expense (852) (1,638) Other income 194 2,596 -------------- -------------- Income before income taxes 3,198 6,292 Income tax benefit (expense) 8 (45) -------------- -------------- Net income $ 3,206 $ 6,247 ============== ==============
See accompanying notes to condensed consolidated financial statements. 2 ACT MANUFACTURING (THAILAND) PUBLIC COMPANY LIMITED CONDENSED CONSOLIDATED STATEMENT OF CASH FLOWS MAY 24, 2002 AND MAY 25, 2001 (IN THOUSANDS)
SIX MONTHS ENDED ------------------------------ MAY 24, 2002 MAY 25, 2001 ------------ ------------ (unaudited) Cash flows from operating activities: Net income $ 3,206 $ 6,247 Adjustments to reconcile net income to net cash provided by operating activities Depreciation and amortization of property, plant and equipment 1,367 1,154 Goodwill amortization -- 4,952 Gain on disposal of equipment -- (49) Changes in operating assets and liabilities: Accounts receivable 2,405 11,201 Inventories (3,922) 13,340 Prepaid assets and other current assets 13 (2,217) Accounts payable 930 (13,144) Accrued liabilities (2,679) (13,541) ---------- ---------- Net cash provided by operating activities 1,320 7,943 ---------- ---------- Cash flows from investing activities: Purchases of property, plant and equipment (769) (2,768) Proceeds from sale of equipment -- 61 ---------- ---------- Net cash used in investing activities (769) (2,707) ---------- ---------- Cash flows from financing activities: Net borrowings on bank overdrafts and notes payable to banks 8,302 13,359 Principal payments on long-term debt (2,497) (14,175) ---------- ---------- Net cash provided by financing activities 5,805 (816) ---------- ---------- Net increase in cash and cash equivalents 6,356 4,420 Cash and cash equivalents at beginning of period 11,538 4,005 ---------- ---------- Cash and cash equivalents at end of period $ 17,894 $ 8,425 ========== ========== Supplemental disclosure of cash flow information: Interest paid $ 861 $ 1,925 Income taxes paid $ 580 $ 24
See accompanying notes to condensed consolidated financial statements. 3 ACT MANUFACTURING (THAILAND) PUBLIC COMPANY LIMITED NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (IN THOUSANDS) (1) BASIS OF PRESENTATION ACT Manufacturing (Thailand) Public Company Limited (the "Company"), is a registered Thai company in the business of assembling electronic products for export. The condensed consolidated financial statements included herein have been prepared by the Company without audit pursuant to the rules and regulations of the Securities and Exchange Commission. The financial statements reflect all normal and recurring adjustments which in the opinion of management are necessary for a fair presentation of the financial position, results of operations and cash flows for the interim periods presented. The results of operations for the periods presented are not necessarily indicative of the results to be expected for the full year. The accompanying unaudited condensed consolidated financial statements should be read in conjunction with the audited annual financial statements and notes included elsewhere herein. (2) INVENTORIES Inventories consist of the following at May 24, 2002: Finished goods $ 3,387 Work in Process 6,803 Raw materials 23,581 Less provision for obsolete inventory (6,614) ----------- $ 27,157 ===========
(3) PROPERTY, PLANT AND EQUIPMENT Property, plant and equipment consist of the following at May 24, 2002: Land $ 3,266 Buildings 6,810 Machinery and equipment 8,171 Leasehold improvements 1,073 Vehicles 1,019 Construction in progress 480 ----------- Total 20,819 Less: accumulated depreciation (3,090) ----------- $ 17,729 ===========
4 ACT MANUFACTURING (THAILAND) PUBLIC COMPANY LIMITED NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (IN THOUSANDS) (4) BORROWING FACILITIES The Company has a credit facility with two local banks, which has five tranche facilities. The five tranche facilities include the following at May 24, 2002: Tranche A and B are long-term facilities with maximum aggregate principal of $25.0 million. Both Tranches bear interest at LIBOR plus 2.5% and are payable in quarterly installments until 2006. At May 24, 2002, interest rates ranged from 4.62% to 5.18%. The total from both tranches outstanding at May 24, 2002 was $20.1 million. Tranche C are short-term revolving credit lines aggregating $28.5 million, of which $11.3 million was outstanding at May 24, 2002. The credit lines bear interest at a range of LIBOR plus 2.75% to 4.35%. At May 24, 2002, interest rates ranged from 4.35% to 6.87%. Tranche D is a banking overdraft credit line aggregating Baht 20 million. The credit line was unused at May 24, 2002. The Company's banking overdraft lines carry interest at the rate of MOR, which is equal to 8% on average. Tranche E is a guarantee credit line aggregating Baht 40 million, of which Baht 34.2 million ($0.9) was outstanding at May 24, 2002. The Company has another short-term credit facility aggregating $4.0 million, which was not used at May 24, 2002. 5 -----END PRIVACY-ENHANCED MESSAGE-----