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SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
_______________________
FORM 8-K/A
AMENDMENT NO. 1 TO
CURRENT REPORT
Pursuant to Section 13 or 15(d) of
the Securities Exchange Act of 1934
_______________________
Date of Report
(Date of earliest
event reported): May 11, 1995
Johnson Worldwide Associates, Inc.
(Exact name of registrant as specified in its charter)
Wisconsin 0-16255 39-1536083
(State or other (Commission File (IRS Employer
jurisdiction of Number) Identification No.)
incorporation)
1326 Willow Road, Sturtevant, Wisconsin 53177
(Address of principal executive offices, including zip code)
(414) 884-1500
(Registrant's telephone number)
The undersigned registrant hereby amends Item 7 of its Current
Report on Form 8-K dated May 11, 1995 to provide in its entirety as
follows:
Item 7. Financial Statements and Exhibits.
(a) Financial Statements of Business Acquired - SpiderWire/TM/
Product Line of Safari Land Ltd., Inc.
Independent Auditors' Report
Audited Financial Statement
Statement of Assets Acquired as of March 31, 1995
Notes to Statement of Assets Acquired
Unaudited Financial Statements
Statements of Revenues and Direct Operating Expenses for
the Year Ended September 30, 1994 and Six Months
Ended March 31, 1995
Notes to Statements of Revenues and Direct Operating
Expenses
Independent Auditors' Report
The Board of Directors
Johnson Worldwide Associates, Inc.:
We have audited the accompanying statement of assets acquired of the
SpiderWire product line of Safari Land Ltd., Inc. as of March 31, 1995
pursuant to the Purchase Agreement referred to in note 1 of notes to the
statement of assets acquired. The statement of assets acquired is the
responsibility of Johnson Worldwide Associates, Inc.'s (JWA) management.
Our responsibility is to express an opinion on this statement of assets
acquired based on our audit.
We conducted our audit in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to
obtain reasonable assurance about whether the statement of assets acquired
is free of material misstatement. An audit of a statement of assets
acquired includes examining, on a test basis, evidence supporting the
amounts and disclosures in that statement of assets acquired. An audit of
a statement of assets acquired also includes assessing the accounting
principles used and significant estimates made by management, as well as
evaluating the overall statement of assets acquired presentation. We
believe that our audit of the statement of assets acquired provides a
reasonable basis for our opinion.
As indicated in note 1, the accompanying statement of assets acquired was
prepared solely to present the assets acquired pursuant to the Purchase
Agreement, and is not intended to be a complete presentation of the assets
and liabilities of the SpiderWire product line of Safari Land Ltd., Inc.
In our opinion, the statement of assets acquired referred to above
presents fairly, in all material respects, the assets acquired of the
SpiderWire product line at March 31, 1995, pursuant to the Purchase
Agreement referred to in note 1 of notes to the statement of assets
acquired, in conformity with generally accepted accounting principles.
KPMG Peat Marwick LLP
July 19, 1995
SPIDERWIRE PRODUCT LINE
OF SAFARI LAND LTD., INC.
Statement of Assets Acquired
March 31, 1995
Current asset - inventory (note 2) $ 3,415,000
Equipment 13,000
Trademarks (note 3) 193,000
---------
Total assets acquired $ 3,621,000
See accompanying notes to statement of assets acquired.
SPIDERWIRE PRODUCT LINE
OF SAFARI LAND LTD., INC.
Notes to Statement of Assets Acquired
March 31, 1995
(1) Basis of Presentation
The SpiderWire product line (Business) of Safari Land Ltd., Inc.
(Safariland) is a line of sport fishing tackle products distributed
throughout the United States and Canada. In addition to the
Business, Safariland is also involved in the manufacture and
distribution of duty gear and body armor for various law enforcement
agencies and the manufacture and distribution of automotive
products.
Johnson Worldwide Associates, Inc. (JWA) entered into an Asset
Purchase Agreement between JWA and Safariland dated as of March 31,
1995 (Purchase Agreement). Pursuant to the Purchase Agreement, JWA
acquired all the rights, title and interest of Safariland to all of
the Business' personal property, trademarks, copyrights and other
intellectual property, sales and promotional literature, records,
files, customer lists and other data, inventory, interests in the
name "SpiderWire" and derivatives therefrom and names similar
thereto, and general intangibles, and certain of the Business'
contracts, purchase orders and sales orders for an initial purchase
price of $24,400,000 in cash. All other assets of the Business were
retained by Safariland. Except for certain future contractual
obligations relating to the Business, JWA did not assume any
liabilities of the Business or Safariland. Additional purchase
price payments in fiscal years 1996 through 2001 may be required
depending upon the achievement of specified levels of sales and
profitability of certain of the acquired products.
The accompanying statement of assets acquired reflects the
historical cost basis of the assets acquired by JWA pursuant to the
Purchase Agreement. Assets and liabilities of the Business that
were not acquired or assumed have no continuing significance to the
Business and have been eliminated from the statement of assets
acquired.
(2) Inventory
Inventory is stated at the lower of cost, determined using the
first-in, first-out method, or market. Inventory at March 31, 1995
consists of the following:
Raw materials $ 1,697,000
Work in process 949,000
Finished goods 769,000
----------
Total inventory $3,415,000
In the event that JWA does not sell or otherwise consume all of the
acquired inventory by March 31, 1996, Safariland is obligated to
refund the price which JWA paid for such inventory.
Subsequent to March 31, 1995, JWA purchased approximately $567,000
of raw material components from Safariland, which have been used in
production.
(3) Trademarks
The cost of trademarks acquired or developed are capitalized and
amortized using the straight-line method over a 40-year useful life.
(4) Commitments
Pursuant to the Purchase Agreement, JWA assumed certain contractual
obligations relating to advertising and endorsement agreements,
purchase orders and sales orders. Commitments relating to these
advertising and endorsement agreements and purchase orders for the
periods ending September 30 are as follows: 1995 - $2,121,000; 1996
- $2,269,000; and 1997 - $843,000.
SPIDERWIRE PRODUCT LINE
OF SAFARI LAND LTD., INC.
Statements of Revenues and Direct Operating Expenses
Year Ended September 30, 1994 and Six Months Ended March 31, 1995
(Unaudited)
Year Ended Six Months
September 30, Ended March 31,
1994 1995
Net sales (notes 2,5,and 6) $ 7,130,000 12,508,000
Cost of sales 3,814,000 7,822,000
---------- -----------
Gross profit 3,316,000 4,686,000
Operating expenses (notes 3
and 4):
Marketing and selling (note 4,481,000 3,903,000
7)
Other 456,000 34,000
--------- ---------
Total operating expenses 4,937,000 3,937,000
---------- ---------
Operating profit (loss) $(1,621,000) 749,000
See accompanying notes to statements of revenues and direct operating
expenses.
SPIDERWIRE PRODUCT LINE
OF SAFARI LAND LTD., INC.
Notes to Statements of Revenues and Direct Operating Expenses
Year Ended September 30, 1994 and Six Months Ended March 31, 1995
(Unaudited)
(1) Basis of Presentation
The SpiderWire product line (Business) of Safari Land Ltd., Inc.
(Safariland) is a line of sport fishing tackle products distributed
throughout the United Sates and Canada. In addition to the
Business, Safariland is also involved in the manufacture and
distribution of duty gear and body armor for various law enforcement
agencies and the manufacture and distribution of automotive
products.
Johnson Worldwide Associates, Inc. (JWA) entered into an Asset
Purchase Agreement between JWA and Safariland dated March 31, 1995
(Purchase Agreement). Pursuant to the Purchase Agreement, JWA
acquired all the rights, title and interest of Safariland to all of
the Business' personal property, trademarks, copyrights and other
intellectual property, sales and promotional literature, records,
files, customer lists and other data, inventory, interests in the
name "SpiderWire" and derivatives therefrom and names similar
thereto, and general intangibles, and certain of the Business'
contracts, purchase orders and sales orders for an initial purchase
price of $24,400,000 in cash. All other assets of the Business were
retained by Safariland. Except for certain future contractual
obligations relating to the Business, JWA did not assume any
liabilities of the Business or Safariland. Additional purchase
price payments in fiscal years 1996 through 2001 may be required
depending upon the achievement of specified levels of sales and
profitability of certain of the acquired products.
The accompanying unaudited statements of revenues and direct
operating expenses of the Business for the year ended September 30,
1994 and the six months ended March 31, 1995 have been prepared from
the historical books and records of Safariland and include only
those revenues and operating expenses directly attributable to the
Business. Some additional indirect expenses related to the physical
operating costs of the Business, primarily personnel-related costs
and other administrative allocations were incurred. These costs
have been omitted from the accompanying statements of revenues and
direct operating expenses.
It is impractical for JWA to provide an audited statement of
operations reflecting the historical results of the Business (i.e.
those costs related to the specific assets acquired) since (1) the
assets acquired represent only a portion of the operations of
Safariland, which in themselves, do not constitute a separate
entity, but instead a portion of a larger operation; and (2) such
financial records, specific to the assets acquired and related
operations, exclusive of direct operating revenues and expenses,
include certain expenses incurred for all of Safariland not readily
attributable solely to the Business.
(2) Revenue Recognition
Revenue from sales is recognized on the accrual basis, primarily
upon the shipment of products, net of estimated costs of returns and
allowances.
(3) Income Taxes
The accompanying statements of revenues and direct operating
expenses do not include charges for income taxes since income taxes
are considered to be corporate expenses of Safariland.
(4) Allocated Costs
The accompanying statements of revenues and direct operating
expenses include direct revenue and expenses of the Business only.
In connection with its overall business, Safariland provided certain
services including finance, legal and professional, human resources
and management information services to the Business. Costs
associated with these services have been omitted from the statements
of revenues and direct operating expenses.
(5) Major Customers
Sales to major customers representing 10% or more of net sales for
the year ended September 30, 1994 and the six months ended March 31,
1995 are summarized as follows:
Year Ended Six Months
September 30, Ended
1994 March 31, 1995
Customer A 22% 12%
Customer B 11% 8%
Customer C 9% 13%
(6) Related Parties
Net sales for the six months ended March 31, 1995 includes
approximately $918,000 of sales to JWA or certain of its
subsidiaries. No similar sales were made during the year ended
September 30, 1994.
(7) Advertising Expenses
Marketing and selling expenses includes advertising expenses of
approximately $1,704,000 and $1,250,000 for the year ended September
30, 1994 and the six months ended March 31, 1995, respectively.
Safariland's policy with respect to advertising costs of the
Business is to recognize these costs over the estimated life of the
individual advertising activity's benefit (generally one year or
less). In December 1993, the American Institute of Certified Public
Accountants issued Statement of Position (SOP) 93-7 which provided
definitive guidance for advertising activities. Adoption of the
provisions of SOP 93-7 will be required for JWA's fiscal year ending
September 29, 1995.
(b) Pro Forma Financial Information.
JOHNSON WORLDWIDE ASSOCIATES, INC.
UNAUDITED PRO FORMA CONDENSED
CONSOLIDATED FINANCIAL INFORMATION
The following unaudited pro forma financial information
relates to the acquisition (such acquisition as well as the consummation
of certain related transactions is referred to herein as the
"Acquisition") by Johnson Worldwide Associates, Inc. ("JWA") of
substantially all of the assets of the SpiderWire/TM/ product line (the
"Business") of Safari Land Ltd., Inc. The Acquisition, which was
accounted for using the purchase method of accounting, was deemed to be
effective as of the close of business on March 31, 1995. The pro forma
financial information also gives effect to the acquisition of
substantially all of the assets of the Neptune product line ("Neptune") of
Goldeneye Products, Inc., which closed on June 30, 1995 and was accounted
for using the purchase method of accounting (the "Neptune Acquisition").
The pro forma amounts have been prepared based on certain purchase
accounting and other pro forma adjustments (as described in the
accompanying notes) to the historical financial statements of JWA, the
Business and Neptune.
The unaudited pro forma condensed consolidated statements of
operations reflect the historical results of operations of JWA, the
Business and Neptune for the fiscal year ended September 30, 1994, and the
six months ended March 31, 1995, with pro forma acquisition adjustments as
if the Acquisition and the Neptune Acquisition had occurred as of the
beginning of the respective periods. The unaudited pro forma condensed
consolidated balance sheet reflects the historical financial position of
JWA, the Business and Neptune at March 31, 1995, with pro forma
acquisition adjustments as if the Acquisition and the Neptune Acquisition
had occurred on March 31, 1995. The pro forma adjustments are described
in the accompanying notes and give effect to events that are (a) directly
attributable to the Acquisition and the Neptune Acquisition, (b) factually
supportable, and (c) in the case of certain income statement adjustments,
expected to have a continuing impact.
The unaudited pro forma condensed consolidated financial
statements should be read in connection with JWA's Annual Report on Form
10-K for the fiscal year ended September 30, 1994 and Quarterly Report on
Form 10-Q for the quarter ended March 31, 1995 along with the financial
statements of the Business and related notes that appear elsewhere in this
Current Report on Form 8-K.
The unaudited pro forma financial information presented is for
information purposes only and does not purport to represent what JWA's
financial position or results of operations as of the dates presented
would have been had the Acquisition and the Neptune Acquisition in fact
occurred on such date or at the beginning of the periods indicated or to
project JWA's financial position or results of operations for any future
date or period.
PRO FORMA CONDENSED CONSOLIDATED BALANCE SHEET
MARCH 31, 1995
(unaudited)
(thousands, except share Acquired Pro Forma
data) JWA Businesses Adjustments Pro Forma
Assets
Current assets:
Cash $ 2,280 $ -- $ -- $ 2,280
Accounts receivable less
allowance for doubtful
accounts of $2,704 109,238 -- -- 109,238
Inventories 96,275 4,130 -- 100,405
Other current assets 13,892 76 -- 13,968
--------- ---------- -------- ---------
Total current assets 221,685 4,206 -- 225,891
Property, plant and
equipment 29,389 111 -- 29,500
Intangible assets 36,432 193 22,851 59,476
Other assets 3,172 -- -- 3,172
--------- --------- --------- ---------
Total assets $290,678 $ 4,510 $ 22,851 $318,039
======== ========= ========= ========
Liabilities and
Shareholders' Equity
Current liabilities:
Notes payable and
current maturities of
long-term obligations $ 65,751 $ -- $ -- $ 65,751
Accounts payable 18,751 -- -- 18,751
Other accrued
liabilities 27,492 -- -- 27,492
------- ------- ------- --------
Total current
liabilities 111,994 -- -- 111,994
Long-term obligations,
less current maturities 36,407 -- 27,361 63,768
Other liabilities 5,708 -- -- 5,708
------- -------- ------- -------
Total liabilities 154,109 -- 27,361 181,470
Shareholders' equity:
Common stock:
Class A shares issued
6,866,296 343 -- -- 343
Class B shares issued
1,230,099 62 -- -- 62
Capital in excess of par
value 43,380 -- -- 43,380
Retained earnings 84,031 -- -- 84,031
Contingent compensation (210) -- -- (210)
Cumulative translation
adjustment 9,600 -- -- 9,600
Treasury stock (637) -- -- (637)
--------- ---------- --------- --------
Total shareholders'
equity 136,569 -- -- 136,569
-------- --------- --------- --------
Total liabilities
and shareholders'
equity $290,678 $ -- $ 27,361 $318,039
========= ========== ========== ========
See accompanying notes to unaudited pro forma condensed consolidated
financial statements.
PRO FORMA CONDENSED CONSOLIDATED STATEMENT OF OPERATIONS
YEAR ENDED SEPTEMBER 30, 1994
(unaudited)
(thousands, except per Acquired Pro Forma
share data) JWA Businesses Adjustments Pro Forma
Net sales $284,343 $ 8,469 $ -- $292,812
Cost of sales 173,869 5,169 -- 179,038
-------- --------- --------- ---------
Gross profit 110,474 3,300 -- 113,774
Operating expenses 91,536 4,977 1,018 97,531
--------- -------- --------- --------
Operating profit (loss) 18,938 (1,677) (1,018) 16,243
Interest expense 6,845 121 1,639 8,605
Other (income) expenses,
net (391) -- -- (391)
------- -------- -------- --------
Income (loss) from
continuing operations
before income taxes 12,484 (1,798) (2,657) 8,029
Income tax expense
(benefit) 4,338 (624) (922) 2,792
-------- ------- --------- ---------
Income (loss) from
continuing operations $ 8,146 $ (1,174) $ (1,735) $ 5,237
======== ======= ======== =======
Earnings per common share:
Continuing operations $ 1.01 $ .65
====== ======
Weighted average common and
common equivalent shares
outstanding 8,068 8,068
====== =====
See accompanying notes to unaudited pro forma condensed consolidated
financial statements.
PRO FORMA CONDENSED CONSOLIDATED STATEMENT OF OPERATIONS
SIX MONTHS ENDED MARCH 31, 1995
(unaudited)
(thousands, except Acquired Pro Forma
per share data) JWA Businesses Adjustments Pro Forma
Net sales $159,259 $ 12,777 $ (918) $171,118
Cost of sales 96,595 8,009 -- 104,604
--------- --------- -------- --------
Gross profit 62,664 4,768 (918) 66,514
Operating expenses 52,736 4,048 509 57,293
------- ------- ------- -------
Operating profit 9,928 720 (1,427) 9,221
Interest expense 3,022 319 1,155 4,496
Other (income)
expenses, net (466) 1 -- (465)
-------- ------- ------- -------
Income before
income taxes 7,372 400 (2,582) 5,190
Income tax expense 2,860 155 (1,003) 2,012
-------- -------- --------- -------
Net income $ 4,512 $ 245 $ (1,579) $ 3,178
======== ======== ======== =======
Earnings per common
share $ .56 $ .39
======== ========
Weighted average
common and common
equivalent shares
outstanding 8,075 8,075
===== ======
See accompanying notes to unaudited pro forma condensed consolidated
financial statements.
JOHNSON WORLDWIDE ASSOCIATES, INC.
NOTES TO PRO FORMA CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(unaudited)
NOTE 1
The pro forma condensed consolidated balance sheet has been prepared to
reflect the purchase by JWA of selected assets of the Business from Safari
Land Ltd., Inc. ("Safariland") and selected assets and liabilities of
Neptune from Goldeneye Products, Inc. ("Goldeneye") (together, the
"Acquired Businesses"). Selected assets acquired have been recorded at
net book value at March 31, 1995, which approximates fair market value.
The pro forma adjustments as of March 31, 1995 reflect the following:
(a) The allocation of excess of cost over the fair value of net assets
acquired to goodwill.
(b) The financing for the acquisitions.
NOTE 2
The pro forma condensed consolidated statements of operations for the year
ended September 30, 1994 and the six months ended March 31, 1995 are based
on the financial statements of JWA and the Business for the twelve months
ended September 30, 1994 and for the six months ended March 31, 1995,
respectively, and Neptune for the twelve months ended June 30, 1994 and
for the six months ended December 31, 1994, respectively, after giving
effect to the following pro forma adjustments:
(a) Reduction of net sales resulting from the elimination of sales from
Safariland to JWA or certain of its subsidiaries.
(b) Additional operating expenses, primarily amortization expense,
resulting from the amortization of intangible assets based on a useful
life of 25 years.
(c) Additional interest expense resulting from the debt obtained to
finance the acquisition and provide working capital, at rates in
effect at the beginning of, or during the respective periods, as
appropriate.
(d) Provision for income tax benefits resulting from the proforma
adjustments using statutory tax rates.
NOTE 3
The financial information of the Acquired Businesses utilized in the pro
forma condensed consolidated financial statements has been extracted from
the full financial statements of Safariland and Goldeneye. Certain
expenses, such as executive salaries, have not been allocated to the
Acquired Businesses. Certain expenses, such as interest, have been
estimated. Income tax expense or benefit has been calculated using
statutory tax rates. Similarly, certain assets of Safariland and
Goldeneye, such as cash and accounts receivable, and all liabilities, were
not acquired and are not reflected in the assets and liabilities of the
Acquired Businesses.
(c) Exhibits.
The exhibits listed in the accompanying Exhibit Index are filed as
part of this Current Report on Form 8-K.
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934,
the registrant has duly caused this amendment to the report to be signed
on its behalf by the undersigned thereunto duly authorized.
JOHNSON WORLDWIDE ASSOCIATES, INC.
Date: July 25, 1995 By: /s/ Carl G. Schmidt
Carl G. Schmidt
Senior Vice President and Chief
Financial Officer, Secretary and
Treasurer
JOHNSON WORLDWIDE ASSOCIATES, INC.
EXHIBIT INDEX TO FORM 8-K
Report Dated May 11, 1995
Exhibit
(2) Asset Purchase Agreement by and between
Johnson Worldwide Associates, Inc. and
Safari Land Ltd., Inc., dated as of
March 31, 1995* [Previously filed with
this Current Report on Form 8-K]
(4) Unsecured Line of Credit Letter
Agreement by and between Johnson
Worldwide Associates, Inc. and The First
National Bank of Chicago, effective as
of April 3, 1995 [Previously filed with
this Current Report on Form 8-K]
(23) Consent of KPMG Peat Marwick LLP
_____________
* The schedules and exhibits to this document are not being filed
herewith. The registrant agrees to furnish supplementally a copy of any
such schedule or exhibit to the Securities and Exchange Commission upon
request.
Independent Auditors' Consent
The Board of Directors
Johnson Worldwide Associates, Inc.:
We consent to incorporation by reference in the Registration Statements
(No. 33-19804, 33-19805, 33-35309, 33-50680, 33-52073, 33-54899 and
33-61285) on Form S-8 of Johnson Worldwide Associates, Inc. of our report
dated July 19, 1995, with respect to the statement of assets acquired for
the SpiderWire product line of Safari Land Ltd., Inc. as of March 31,
1995, which report appears in the amendment on Form 8-K/A to the Form 8-K
of Johnson Worldwide Associates, Inc. dated May 11, 1995.
As indicated in note 1 to the statement of assets acquired, the statement
was prepared solely to present the assets acquired pursuant to the
Purchase Agreement, and is not intended to be a complete presentation of
the assets and liabilities of the SpiderWire product line of Safari Land
Ltd., Inc.
KPMG Peat Marwick LLP
Milwaukee, Wisconsin
July 19, 1995