SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 8-K/A
CURRENT REPORT
Pursuant to Section 13 or 15(d) of
the Securities Exchange Act of 1934
DATE OF REPORT (date of earliest event reported): JULY 1,2003
ALLIS-CHALMERS CORPORATION
(Exact name of registrant as specified in its charter)
DELAWARE 1-2199
(State or other jurisdiction (Commission File Number)
of incorporation)
39-0126090
(I.R.S. Employer
Identification No.)
7660 WOODWAY, SUITE 200
HOUSTON, TEXAS 77063
(Address of principal executive offices) (Zip Code)
REGISTRANT'S TELEPHONE NUMBER, INCLUDING AREA CODE: (713) 369-0550
1
ITEM 7. FINANCIAL STATEMENTS AND EXHIBITS.
(a) Financial Statements.
None
(b) Pro Forma Financial Information.
Unaudited Pro Forma Consolidated Statement of Operations
For the Year Ended December 31, 2002 P-1
Unaudited Pro Forma Consolidated Statement of Financial
Position as of December 31, 2002 P-2
Unaudited Pro Forma Consolidated Statement of Operations
For the Six Months Ended June 30, 2003 P-3
Unaudited Pro Forma Consolidated Statement of Financial
Position as of June 30, 2003 P-4
Notes to Unaudited Pro Forma Consolidated Financial
Statements P-5
2
ALLIS-CHALMERS CORPORATION
UNAUDITED PRO FORMA CONSOLIDATED STATEMENT OF OPERATIONS
FOR THE TWELVE MONTHS ENDED DECEMBER 31, 2002
(IN THOUSANDS, EXCEPT PER SHARE AMOUNTS)
ALLIS- PROFORMA
CHALMERS M-I AIRCOMP ALLIS-
CONSOLIDATED AIR DRILLING PURCHASE CHALMERS
HISTORICAL HISTORICAL ADJUSTMENTS CONSOLIDATED
--------- --------- --------- ---------
SALES
REVENUES $ 17,990 $ 2,453 $ -- $ 20,443
COST OF REVENUES 14,910 3,156 (1,597) a 16,469
--------- --------- --------- ---------
GROSS PROFIT 3,080 (703) 1,597 3,974
General and administrative expense 3,792 318 3 4,113
Personnel restructuring costs 495 495
Abandoned acquisition/private placement costs 233 -- -- 233
--------- --------- --------- ---------
Total operating expenses 4,520 318 3 4,841
--------- --------- --------- ---------
LOSS FROM OPERATIONS (1,440) (1,021) 1,594 (867)
Other income (expense):
Interest income 49 -- -- 49
Interest expense (2,256) -- 83 b (2,173)
Minority interest (189) (487) c (676)
Factoring costs on note receivable (191) 300 -- 109
Other income (expense) 58 -- 58
--------- --------- --------- ---------
NET INCOME (LOSS) BEFORE INCOME TAXES (3,969) (721) 1,190 (3,500)
PROVISION FOR INCOME TAXES -- -- -- --
--------- --------- --------- ---------
NET INCOME/(LOSS) (3,969) (721) 1,190 (3,500)
PREFERRED STOCK DIVIDEND (321) -- -- (321)
--------- --------- --------- ---------
NET INCOME / (LOSS) ATTRIBUTED TO COMMON SHARES $ (4,290) $ (721) $ 1,190 $ (3,821)
========= ========= ========= =========
Net income / (loss) per common shares $ (0.22) $ (0.19)
========= =========
Weighted average number of common shares
outstanding 19,633 19,633
========= =========
P-1
ALLIS-CHALMERS CORPORATION
UNAUDITED PRO FORMA CONSOLIDATED STATEMENT OF FINANCIAL POSITION
AS OF DECMBER 31, 2002
(IN THOUSANDS, EXCEPT PER SHARE DATA)
12/31/02 MCA AIRCOMP ELIMINATIONS PROFORMA
ALLIS-CHALMERS PURCHASE PURCHASE FOR ALLIS ALLIS-CHALMERS
AS REPORTED ADJUSTMENT ADJUSTMENT CONSOLID. CONSOLIDATED
--------------------------------------------------------------------------------
ASSETS
------
Cash and cash equivalents 146 (7,245) d,e 7,750 h 651
Trade receivables, net 4,409 4,409
Lease deposit 525 (525) f -
Lease receivable, current 180 180
Prepaids and other current 317 317
--------------------------------------------------------------------------------
Total current assets 5,577 (7,770) 7,750 - 5,557
Property, Plant & Equipment, net 17,124 2,680 d,f 6,822 i 26,626
Goodwill 7,829 7,829
Investment in JV AirComp, LLC - (903) g 903 -
Other intangible assets, net 2,650 2,650
Debt issuance costs, net 515 (83) h 250 h 682
Lease receivable, less current portion 1,042 1,042
Other assets 41 41
--------------------------------------------------------------------------------
Total assets 34,778 (6,076) 14,822 903 44,427
================================================================================
LIABILITIES AND SHAREHOLDERS' EQUITY
------------------------------------
Current maturities of long-term debt 13,890 (4,850) d 1,144 h 10,184
Trade accounts payable 2,106 2,106
Accrued employee benefits and payroll taxes 280 280
Accrued interest 811 (240) d 571
Accrued expenses 1,506 1,506
--------------------------------------------------------------------------------
Total current liabilities 18,593 (5,090) 1,144 - 14,647
Accrued postretirement benefit obligations 670 670
Long-term debt, less current portion 7,331 11,674 h.i 19,005
Other long-term liabilities 270 270
-
Minority interest 1,584 2,004 i 3,588
Redeemable warrants 1,500 1,500
Redeemable convertible preferred stock 3,821 3,821
Common shareholders' equity:
Common shares, $0.15 par value (110,000,000
shares authorized; 19,633,340 issued and
outstanding at December 31, 2002) 2,945 2,945
Capital in excess of par value 7,237 7,237
Accumulated (deficit) (9,173) (986) 903 (9,256)
--------------------------------------------------------------------------------
Total shareholders' equity 1,009 (986) - 903 926
--------------------------------------------------------------------------------
Total liabilities and stockholders' equity 34,778 (6,076) 14,822 903 44,427
================================================================================
P-2
ALLIS-CHALMERS CORPORATION
UNAUDITED PRO FORMA CONSOLIDATED STATEMENT OF OPERATIONS
FOR THE SIX MONTHS ENDED JUNE 30, 2003
(IN THOUSANDS, EXCEPT PER SHARE DATA)
ALLIS- PROFORMA
CHALMERS M-I AIRCOMP ALLIS-
CONSOLIDATED AIR DRILLING PURCHASE CHALMERS
HISTORICAL HISTORICAL ADJUSTMENTS CONSOLIDATED
---------- ---------- ----------- ------------
SALES
REVENUES $ 14,339 $ 1,722 $ -- $ 16,061
COST OF REVENUES 10,405 2,203 (753) a 11,855
--------- --------- --------- ---------
GROSS PROFIT 3,934 (481) 753 4,206
MARKETING AND ADMINISTRATIVE EXPENSE 2,001 45 (46) d 2,000
--------- --------- --------- ---------
INCOME/ (LOSS) FROM OPERATIONS 1,933 (526) 799 2,206
Other income (expense):
Interest income -- -- -- --
Interest expense (1,480) -- (4) b (1,484)
Minority interest (311) -- (150) c (461)
Other income (expense): (174) -- (174)
--------- --------- --------- ---------
NET INCOME / (LOSS) BEFORE INCOME TAXES (32) (526) 645 87
INCOME TAXES -- -- -- --
--------- --------- --------- ---------
NET INCOME / (LOSS) (32) (526) 645 87
PREFERRED STOCK DIVIDEND (481) -- -- (481)
--------- --------- --------- ---------
NET INCOME / (LOSS) ATTRIBUTED TO COMMON SHARES $ (513) $ (526) $ 645 $ (394)
========= ========= ========= =========
Net income / (loss) per common shares $ (0.03) $ (0.02)
========= =========
Weighted average number of common shares
outstanding 19,633 19,633
========= =========
P-3
ALLIS-CHALMERS CORPORATION
UNAUDITED PRO FORMA CONSOLIDATED STATEMENT OF FINANCIAL POSITION
AS OF JUNE 30, 2003
(IN THOUSANDS, EXCEPT PER SHARE DATA)
ALLIS-CHALMERS MCA AIRCOMP ELIMINATIONS PROFORMA
CONSOLIDATED PURCHASE PURCHASE FOR ALLIS ALLIS-CHALMERS
HISTORICAL ADJUSTMENT ADJUSTMENT CONSOLID. CONSOLIDATED
----------------------------------------------------------------------------
ASSETS
------
Cash 30 (7,245) d,e 7,750 h 535
Accounts Receivable 6,006 6,006
Lease Deposit - -
Lease Receivable 180 180
Prepaids and other current 989 989
----------------------------------------------------------------------------
Total current assets 7,205 (7,245) 7,750 - 7,710
Property, Plant & Equipment, net 16,138 2,155 e 6,822 i 25,115
Goodwill 7,829 7,829
Investment in JV AirComp, LLC - (903) g 903 -
Other intangible assets, net 2,386 2,386
Debt issuance costs, net 324 250 h 574
Lease receivable, less current portion 961 961
Other assets 203 203
----------------------------------------------------------------------------
Total assets 35,046 (5,993) 14,822 903 44,778
============================================================================
Liabilities and Shareholders' Equity
Current maturities of long-term debt 6,406 (4,850) d 1,144 h 2,700
Trade accounts payable 3,491 3,491
Accrued employee salaries, benefits and payroll taxes 213 213
Accrued interest 1,279 (240) d 1,039
Accrued expenses 1,113 1,113
----------------------------------------------------------------------------
Total current liabilities 12,502 (5,090) 1,144 - 8,556
Accrued postretirement benefit obligations 649 649
Long-term debt, net of current maturities 13,432 11,674 h,i 25,106
Other long-term liabilities 270 270
Minority interest 1,895 2,004 i 3,899
Redeemable warrants 1,500 1,500
Redeemable convertible preferred stock 4,302 4,302
Common shareholders' equity:
Common shares, $0.15 par value (110,000,000
shares authorized; 19,633,340 issued and
outstanding at June 30, 2003) 2,945 2,945
Capital in excess of par value 6,756 (903) - 903 6,756
Accumulated (deficit) (9,205) - (9,205)
----------------------------------------------------------------------------
Total shareholders' equity 496 (903) - 903 496
----------------------------------------------------------------------------
Total liabilities and stockholders' equity 35,046 (5,993) 14,822 903 44,778
============================================================================
P-4
ALLIS-CHALMERS CORPORATION
NOTES TO UNAUDITED PRO FORMA CONSOLDATED FINANCIAL STATEMENTS
Allis-Chalmers Corporation ("Company") entered into a joint venture
agreement with a division of M-I L.L.C., and related financing on July 1, 2003.
The Company through its subsidiary, Mountain Compressed Air, Inc., and M-I
L.L.C. each contributed assets with a combined fair market value in excess of
$27 million and combined net book value of approximately $13 million to AirComp
L.L.C. ("AirComp"). Mountain Compressed Air contributed substantially all of its
compressed air drilling assets with an estimated fair market value of
approximately $14.8 million net book value of approximately $7.2 million to
AirComp, which the Company believes will be the world's second largest provider
of air compressor products and services to the oil, natural gas and geothermal
drilling workover and completion industries. Allis-Chalmers will own 55% and M-I
L.L.C. will own 45% of AirComp L.L.C.
In connection with the transaction, AirComp obtained bank financing of
$8 million, of which $7.3 million was distributed to the Company. The debt bears
interest at a floating rate, currently LIBOR plus 0.5% annually. AirComp has the
ability to borrow an additional $2 million under its credit agreement with the
bank. AirComp's bank debt is secured by substantially all of the assets of
AirComp. The Company used these funds to retire debt of Mountain Compressed Air,
Inc. and for general working capital purposes at AirComp. As a result of the
debt repayment, the Company is in compliance with all of its loan covenants with
its bank lenders. The Company has guaranteed all of Mountain Compressed Air's
obligations under the joint venture agreement, and Mountain Compressed Air has
guaranteed up to $2 million of AirComp's debt.
P-5
ALLIS-CHALMERS CORPORATION
NOTES TO UNAUDITED PRO FORMA
CONSOLDATED FINANCIAL STATEMENTS
a) To record reversal of lease payment paid by Mountain Compressed Air
and M-I Air Drilling (both leases paid off at June 30, 2003).
b) To record the effects of the new term loan interest.
c) To record the effect of the new amortization of deferred finance
costs.
d) To record the payment of the outstanding debt and accrued interest
associated with Mountain Compressed Air segment , except for the
seller's debt from the original purchase in 2001.
e) Mountain Compressed Air purchases the remaining obligations of an
existing operating lease for $2,155,000.
f) Mountain Compressed Air records the lease deposit as part of the
purchase of the remaining operating lease.
g) Mountain Compressed Air contributes all of its property to the new
joint venture and nets the property value against the cash received
to pay off its outstanding obligations.
h) AirComp LLC closed on July 2, 2003 , funding of $8,000,000 from
Wells Fargo. Proceeds of this funding were utilized to repay
Mountain Compressed Air's debt obligation, Mountain Compressed Air's
operating lease in #d and #e above, pay financing costs of
approximately $250,000 and to provide AirComp LLC with operating
funds.
i) M-I Air Drilling contributes all of its property, plant and
equipment and operations to AirComp LLC and receives 45%
ownership of AirComp LLC. A subordinated loan agreement is entered
into by AirComp LLC that requires re-payment to M-I for $4,818,000.
AirComp records minority interest of $2,004,000 reflective of the
beginning balance of M-I 45% unconsolidated interest in AirComp LLC.
P-6
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.
ALLIS-CHALMERS CORPORATION
By: Munawar H. Hidayatallah
-------------------------
Munawar H. Hidayatallah
Chief Executive Officer
and Chairman
Date: September 15, 2003