UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K
CURRENT REPORT
PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
Date of Report (Date of earliest event reported):
June 1, 2006
LINDSAY MANUFACTURING CO.
(Exact name of registrant as specified in its charter)
Delaware 1-13419 47-0554096
(State of Incorporation) (Commission File Number) (IRS Employer
Identification Number)
2707 North 108th Street
Suite 102
Omaha, Nebraska 68164
(Address of principal executive offices) (Zip Code)
(402) 428-2131
(Registrant's telephone number, including area code)
Not applicable
(Former name or former address, if changed since last report)
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:
[ ] Written communications pursuant to Rule 425 under the Securities Act (17
CFR 230.425)
[ ] Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17
CFR 240.14a-12)
[ ] Pre-commencement communications pursuant to Rule 14d-2(b) under the
Exchange Act (17 CFR 240.14d-2(b))
[ ] Pre-commencement communications pursuant to Rule 13e-4(c) under the
Exchange Act (17 CFR 240.13e-4(c))
ITEM 1.01 ENTRY INTO A MATERIAL DEFINITIVE AGREEMENT
The information set forth below under Item 2.03 is hereby incorporated by
reference into this Item 1.01.
ITEM 2.01 COMPLETION OF ACQUISITION OR DISPOSITION OF ASSETS
On June 1, 2006, Lindsay Manufacturing Co. ("Lindsay," or the "Company")
completed the acquisition of Barrier Systems, Inc. ("BSI") and its subsidiary
Safe Technologies, Inc. through the merger of a wholly owned subsidiary of
Lindsay with and into BSI (the "Merger"). As a result, BSI has become a
wholly-owned subsidiary of Lindsay. BSI is engaged in the manufacture of
specialty roadway barriers and traffic flow products that are used to reduce
traffic congestion and enhance safety.
Total cash merger consideration to be paid to the stockholders of BSI and
holders of options to acquire BSI stock was $35,000,000 less (i) approximately
$3,796,000 representing liabilities of BSI for borrowed money which were repaid
at closing by Lindsay, (ii) approximately $29,0000 representing liabilities of
BSI for borrowed money which were not repaid at closing and (iii) approximately
$906,000 of transaction costs of BSI. Of the cash merger consideration,
$3,500,000 is held in escrow to secure the indemnification obligations of the
shareholders and option holders of BSI and $1,000,000 is held in escrow pending
calculation of the final merger consideration based on the adjusted net assets
of BSI at closing. The Company funded the payment of the merger consideration
using a combination of its own working capital and borrowing under the new
credit agreement described in Item 2.03 below.
Prior to the Merger, certain assets of BSI were conveyed to a limited
liability company and the entire equity interests in such company were
distributed to the shareholders of BSI as a special dividend. As a result, these
assets (consisting primarily of proceeds from the sale of equity interests in
Canadian distributors which historically had been accounted for under the equity
method), were not acquired by Lindsay through the Merger.
The foregoing description of the Merger is qualified in its entirety by
reference to the Agreement and Plan of Merger, dated as of May 1, 2006, by and
among Lindsay, BSI, LM Acquisition Corporation and QMB Payment Co., LLC, a copy
of which is filed as Exhibit 10.1 hereto and incorporated herein by reference.
Prior to the Merger, the Company supplied components to BSI used by BSI in
its manufacturing process in the ordinary course of business. The Company did
not consider this to be a material relationship with BSI or its shareholders.
The consolidated statement of operations of BSI for the twelve months ended
December 31, 2005 and the trailing twelve months ended April 30, 2006 are set
forth below. Complete financial data regarding BSI as required by Item 9.01 of
Form 8-K will be provided in an amendment hereto.
BARRIER SYSTEMS INC.
CONSOLIDATED STATEMENTS OF OPERATIONS
TWELVE MONTHS ENDED
-------------------------
(AUDITED) (UNAUDITED)
DECEMBER APRIL
2005 2006
----------- -----------
Operating revenues ................................. $16,410,654 $21,321,912
Cost of operating revenues ......................... 8,046,500 10,858,425
----------- -----------
Gross profit ....................................... 8,364,154 10,463,487
----------- -----------
Operating expenses ................................. 6,056,267 6,389,158
----------- -----------
Operating income ................................... $ 2,307,887 $ 4,074,329
=========== ===========
Note: Depreciation and amortization for the twelve-months ended December 31,
2005 and April 30, 2006, was $967,000 and $1,040,000, respectively.
ITEM 2.03 CREATION OF A DIRECT FINANCIAL OBLIGATION OR AN OBLIGATION UNDER AN
OFF-BALANCE SHEET ARRANGEMENT OF A REGISTRANT
In order to finance the Merger described above in Item 2.01, Lindsay
entered into an unsecured $30 million Term Note and Credit Agreement, each
effective as of June 1, 2006, with Wells Fargo Bank, N.A. (collectively, the
"Credit Agreement"). In addition, Lindsay entered into a interest rate swap
transaction with Wells Fargo Bank, N.A.
Borrowings under the Credit Agreement bear interest at a rate equal to
LIBOR plus 50 basis points. However, this variable interest rate has been
converted to a fixed rate of 6.05% through the interest rate swap transaction.
Principal is repaid quarterly in equal payments of $1,071,428 over a seven year
period commencing September, 2006.
The Credit Agreement contains certain covenants, including covenants
relating to Lindsay's financial condition. Upon the occurrence of any event of
default specified in the Credit Agreement, including a change in control of
Lindsay (as defined in the Credit Agreement), all amounts due thereunder may be
declared to be immediately due and payable.
Copies of the Term Note and Credit Agreement are filed as Exhibits 10.2 and
10.3 hereto, respectively, and are incorporated herein by reference.
ITEM 9.01 FINANCIAL STATEMENTS AND EXHIBITS
(a) Financial statements of businesses acquired. To supplied by amendment no
later than August 10, 2006.
(b) Pro-forma financial information. To be supplied by amendment no later than
August 10, 2006.
(d) Exhibits.
10.1 Agreement and Plan of Merger, dated June 1, 2006, by and among the Company,
LM Acquisition Corporation, Barrier Systems, Inc. and QMB Payment Co., LLC.
10.2 Term Note, dated June 1, 2006, by and between the Company and Wells Fargo
Bank, N.A.
10.3 Credit Agreement, dated June 1, 2006, by and between the Company and Wells
Fargo Bank, N.A.
10.4 Amended and Restated ISDA Confirmation dated May 8, 2006, by and between
the Company and Wells Fargo Bank, N.A.
10.5 ISDA Master Agreement, dated May 5, 2006, by and between the Company and
Wells Fargo Bank, N.A.
10.6 Schedule to the ISDA Master Agreement, Dated May 5, 2006, by and between
the Company and Wells Fargo Bank, N.A.
99.1 Press Release, dated June 1, 2006, issued by the Company.
SIGNATURE
Pursuant to the requirements of the Securities Exchange Act of 1934, as
amended, the registrant has duly caused this report to be signed on its behalf
by the undersigned hereunto duly authorized.
Dated: June 2, 2006 LINDSAY MANUFACTURING CO.
By: /s/ David Downing
-----------------------------------
David Downing, Vice President and
Chief Financial Officer