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As Of Filer Filing For·On·As Docs:Size Issuer Filing Agent 1/07/20 Esco Technologies Inc 8-K:2,9 12/31/19 11:796K Toppan Merrill/FA |
Document/Exhibit Description Pages Size 1: 8-K Current Report HTML 68K 2: EX-10.1 Material Contract HTML 306K 8: R1 Cover HTML 47K 11: XML IDEA XML File -- Filing Summary XML 11K 10: XML XBRL Instance -- tm1926705-1_8k_htm XML 14K 7: EXCEL IDEA Workbook of Financial Reports XLSX 6K 4: EX-101.LAB XBRL Labels -- ese-20191231_lab XML 96K 5: EX-101.PRE XBRL Presentations -- ese-20191231_pre XML 64K 3: EX-101.SCH XBRL Schema -- ese-20191231 XSD 12K 9: JSON XBRL Instance as JSON Data -- MetaLinks 25± 34K 6: ZIP XBRL Zipped Folder -- 0001104659-20-001789-xbrl Zip 80K
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
CURRENT REPORT
PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
Date of Report (Date of earliest event reported): i December 31, 2019
(Exact Name of Registrant as Specified in Charter)
| i Missouri | i 1-10596 | i 43-1554045 |
| (State or Other | (Commission | (I.R.S. Employer |
| Jurisdiction of Incorporation) | File Number) | Identification No.) |
| i 9900A Clayton Road, i St. Louis, i Missouri | i 63124-1186 |
| (Address of Principal Executive Offices) | (Zip Code) |
Registrant’s telephone number, including area code: i 314- i 213-7200
Securities registered pursuant to section 12(b) of the Act:
| Name of each exchange | ||||
| Title of each class | Trading Symbol(s) | on which registered | ||
| i Common Stock, par value $0.01 per share | i ESE | i New York Stock Exchange |
Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:
i ¨ Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)
i ¨ Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)
i ¨ Pre-commencement communications pursuant to Rule 14d-2 (b) under the Exchange Act (17 CFR 240.14d-2 (b))
i ¨ Pre-commencement communications pursuant to Rule 13e-4 (c) under the Exchange Act (17 CFR 240.113d-4 (c))
Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§240.12b-2 of this chapter). Emerging growth company i ¨
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ¨
C:
| Item 2.01 | Completion of Acquisition or Disposition of Assets |
On December 31, 2019, the Registrant completed the disposition of its Technical Packaging business segment, consisting of Registrant’s wholly-owned subsidiaries Thermoform Engineered Quality LLC, Plastique Ltd. and Plastique sp. z o.o. (the “Technical Packaging Business”), to Sonoco Plastics, Inc. and Sonoco Holdings, Inc. (“Buyers”), two wholly-owned subsidiaries of Sonoco Products Company, pursuant to the Equity Purchase Agreement entered into on November 15, 2019 and announced on November 18, 2019 (the “Agreement”).
The Agreement provided for a purchase price of $187 million in cash, plus or minus certain customary adjustments based on working capital and other typical post-closing adjustments specified in the Agreement. Additional information about the Agreement and the transaction was provided in the Registrant’s Form 8-K filed on November 15, 2019. At the Closing, the Registrant received approximately $187 million in cash, subject to final determination of the adjustments provided for in the Agreement.
A copy of the Agreement is attached to this Report as Exhibit 10.1. The Agreement is provided pursuant to Securities and Exchange Commission requirements and to provide investors with information regarding the terms of the Agreement. The terms of the Agreement have been negotiated between the parties solely for the purposes of this particular transaction, and are not intended to provide any other factual information about the Registrant or its subsidiaries or affiliates. The representations, warranties and covenants contained in the Agreement were made only for purposes of that Agreement and as of specific dates; were solely for the benefit of the parties to the Agreement; and are subject to limitations agreed upon by the parties, including being qualified by confidential disclosures made by each contracting party to the other for the purposes of allocating contractual risk between them, which may differ from those applicable to investors. Investors should not rely on the representations, warranties and covenants or any description thereof as characterizations of the actual state of facts or condition of the Registrant or any of its subsidiaries, affiliates or businesses. Moreover, information concerning the subject matter of the representations, warranties and covenants may change after the date of the Agreement, which subsequent information may or may not be fully reflected in public disclosures by the Registrant. Accordingly, investors should read the representations and warranties in the Agreement not in isolation but only in conjunction with the other information about the Registrant and its subsidiaries included in the reports, statements, and other filings the Registrant makes or has made with the Securities and Exchange Commission.
| Item 9.01 | Financial Statements and Exhibits |
(b) Pro forma financial information
On December 31, 2019, the Registrant completed the disposition of the Technical Packaging Business as described under Item 2.01 above.
The following unaudited pro forma consolidated statements of operations for the year ended September 30, 2019 present the Registrant’s results of operations as adjusted to give effect to the divestiture of the Technical Packaging Business as if it had occurred at the beginning of the period. The accompanying unaudited pro forma consolidated balance sheet as of September 30, 2019 presents the Registrant’s financial position as if the divestiture had occurred on September 30, 2019. The unaudited pro forma consolidated balance sheet as of September 30, 2019 reflects the elimination of the net assets of the Technical Packaging Business, the elimination of all intercompany accounts, the inclusion of the net proceeds from the sale reducing the outstanding debt, and the estimated gain on the sale in retained earnings. The estimated gain on the sale of the Technical Packaging Business may change upon final determination and settlement of post-closing adjustments.
The unaudited pro forma financial statements should be read in conjunction with the Registrant’s consolidated financial statements and notes thereto previously filed as part of the Registrant’s most recent annual report on Form 10-K for the period ended September 30, 2019.
The unaudited pro forma information below is provided for information purposes only and is not necessarily indicative of what the actual financial position or results of operations of the Registrant would have been had the transaction actually occurred on the dates indicated, nor does it purport to indicate the future financial position or results of operations of the Registrant. The pro forma adjustments are based upon available information and assumptions believed to be reasonable in the circumstances. There can be no assurance that such information and assumptions will not change from those reflected in the pro forma financial statements and notes thereto.
C:
ESCO TECHNOLOGIES INC. AND SUBSIDIARIES
PRO FORMA CONSOLIDATED STATEMENT OF OPERATIONS
(Unaudited)
(Dollars in thousands, except per share amounts)
| Year Ended September 30, 2019 |
Less Technical Packaging Business (1) |
Pro Forma Adjustments |
Pro Forma Year Ended September 30, 2019 |
|||||||||||||
| Net sales | $ | 812,970 | (86,926 | ) | - | 726,044 | ||||||||||
| Costs and expenses: | ||||||||||||||||
| Cost of sales | 508,521 | (70,523 | ) | - | 437,998 | |||||||||||
| Selling, general and administrative expenses | 172,109 | (9,375 | ) | - | 162,734 | |||||||||||
| Amortization of intangible assets | 19,488 | (996 | ) | - | 18,492 | |||||||||||
| Interest expense (income) | 8,396 | (304 | ) | (4,815 | )(2) | 3,277 | ||||||||||
| Other income (expenses), net | 2,240 | (1,389 | ) | (100,000 | )(3) | (99,149 | ) | |||||||||
| Total costs and expenses | 710,754 | (82,587 | ) | (104,815 | ) | 523,352 | ||||||||||
| Earnings before income taxes | 102,216 | (4,339 | ) | 104,815 | 202,692 | |||||||||||
| Income taxes | 21,177 | (789 | ) | 30,875 | (4) | 51,263 | ||||||||||
| Net earnings | 81,039 | (3,550 | ) | 73,940 | 151,429 | |||||||||||
| Earnings per share: | ||||||||||||||||
| Basic: | ||||||||||||||||
| Net earnings | $ | 3.12 | 5.84 | |||||||||||||
| Diluted: | ||||||||||||||||
| Net earnings | $ | 3.10 | 5.80 | |||||||||||||
| Average common shares outstanding: | ||||||||||||||||
| Basic | 25,946 | 25,946 | ||||||||||||||
| Diluted | 26,097 | 26,097 | ||||||||||||||
| Notes: |
| (1) | The elimination of operating results, assets sold to Buyers and liabilities assumed by Buyers reflects the terms of the Agreement. |
| (2) | Represents an adjustment of interest expense assuming the net cash proceeds were received at the beginning of the period. |
| (3) | Represents the estimated pre-tax gain on the sale of the Technical Packaging Business. |
| (4) | Represents the estimated tax expense impact on the pro forma adjustments. |
C:
ESCO TECHNOLOGIES INC. AND SUBSIDIARIES
PRO FORMA CONSOLIDATED BALANCE SHEET
(Unaudited)
(Dollars in thousands)
| September 30, 2019 |
Less Technical Packaging Business (1) |
Pro Forma Adjustments |
Pro Forma September 30, 2019 |
|||||||||||||
| ASSETS | ||||||||||||||||
| Current assets: | ||||||||||||||||
| Cash and cash equivalents | $ | 61,808 | - | - | 61,808 | |||||||||||
| Accounts receivable, net | 174,427 | (15,712 | ) | - | 158,715 | |||||||||||
| Contract assets, net | 115,310 | (5,099 | ) | - | 110,211 | |||||||||||
| Inventories | 128,825 | (3,869 | ) | - | 124,956 | |||||||||||
| Other current assets | 14,824 | (634 | ) | - | 14,190 | |||||||||||
| Total current assets | 495,194 | (25,314 | ) | - | 469,880 | |||||||||||
| Property, plant and equipment, net | 161,470 | (33,627 | ) | - | 127,843 | |||||||||||
| Intangible assets, net | 393,047 | (11,442 | ) | - | 381,605 | |||||||||||
| Goodwill | 409,215 | (18,959 | ) | - | 390,256 | |||||||||||
| Other assets | 7,794 | (3,349 | ) | - | 4,445 | |||||||||||
| Total assets | $ | 1,466,720 | (92,691 | ) | - | 1,374,029 | ||||||||||
| LIABILITIES AND SHAREHOLDERS' EQUITY | ||||||||||||||||
| Current liabilities: | ||||||||||||||||
| Current maturities of long-term debt | $ | 21,261 | (1,261 | ) | - | 20,000 | ||||||||||
| Accounts payable | 71,370 | (7,570 | ) | - | 63,800 | |||||||||||
| Contract liabilities, net | 81,177 | - | - | 81,177 | ||||||||||||
| Accrued salaries | 38,531 | (1,337 | ) | - | 37,194 | |||||||||||
| Accrued other expenses | 39,296 | (1,349 | ) | - | 37,947 | |||||||||||
| Total current liabilities | 251,635 | (11,517 | ) | - | 240,118 | |||||||||||
| Pension obligations | 22,682 | - | - | 22,682 | ||||||||||||
| Deferred tax liabilities | 64,855 | - | - | 64,855 | ||||||||||||
| Other liabilities | 36,326 | - | - | 36,326 | ||||||||||||
| Long-term debt | 265,000 | - | (150,000 | )(2) | 115,000 | |||||||||||
| Total liabilities | 640,498 | (11,517 | ) | (150,000 | ) | 478,981 | ||||||||||
| Shareholders' equity | 826,222 | (81,174 | ) | 150,000 | (3) | 895,048 | ||||||||||
| Total liabilities and shareholders’ equity | $ | 1,466,720 | (92,691 | ) | - | 1,374,029 | ||||||||||
| Notes: |
| (1) | The elimination of operating results, assets sold to Buyers and liabilities assumed by Buyers reflect the terms of the Agreement. |
| (2) | Represents the estimated net proceeds of the transaction used to pay down debt. |
| (3) | Represents the estimated net gain of approximately $70 million to be recorded as a result of the divestiture and the elimination of approximately $80 million of equity related to the Technical Packaging Business. The estimated gain may change upon the final determination and settlement of post-closing adjustments and other divestiture-related costs. |
C:
(d) Exhibits
| Exhibit No. | Description of Exhibit | |
| 10.1 | Equity Purchase Agreement dated November 15, 2019 by and among Sonoco Plastics, Inc., Sonoco Holdings, Inc., Esco Technologies Holding LLC, Esco UK Holding Company I Ltd., Thermoform Engineered Quality LLC, and Plastique Holdings Ltd.* | |
| * Schedules to the Equity Purchase Agreement have been omitted pursuant to the provisions of Item 601(b)(2) of Regulation S-K. The Registrant agrees to furnish a copy of any of the omitted Schedules to the Securities and Exchange Commission upon request. | ||
| 104 | Cover Page Inline Interactive Data File |
C:
SIGNATURE
Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.
Date: January 7, 2020
| ESCO TECHNOLOGIES INC. | ||
| By: | /s/ Jeffrey D. Fisher | |
| Jeffrey D. Fisher | ||
| Assistant General Counsel and Assistant Secretary | ||
C:
C:
| This ‘8-K’ Filing | Date | Other Filings | ||
|---|---|---|---|---|
 | ||||
| Filed on: | 1/7/20 | 4 | ||
| For Period end: | 12/31/19 | 10-Q, SD | ||
| 11/18/19 | 8-K | |||
| 11/15/19 | 8-K | |||
| 9/30/19 | 10-K, 8-K | |||
| List all Filings | ||||
As Of Filer Filing For·On·As Docs:Size Issuer Filing Agent 11/29/21 Esco Technologies Inc. 10-K 9/30/21 86:9.7M Toppan Merrill/FA2 11/30/20 Esco Technologies Inc. 10-K 9/30/20 105:11M Toppan Merrill/FA |