SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
-------------------
FORM 8-K/A
(AMENDMENT No. 2)
CURRENT REPORT
PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
Date of Report (Date of Earliest Event Reported): September 13, 2000
FREQUENCY ELECTRONICS, INC.
(Exact name of registrant as specified in its charter)
Delaware 1-8061 11-1986657
(State or other jurisdiction (Commission (I.R.S. Employer
of incorporation) File Number) Identification No.)
55 Charles Lindbergh Blvd., Mitchel Field, NY 11553
(Address of principal executive offices) (Zip Code)
(516) 794-4500
(Registrant's telephone number, including area code)
NONE
(Former name, former address and former fiscal year,
if changed since last report)
-----------------------------------------------------------------------
Page 1 of 34 pages
Explanatory Note
On September 28, 2000, Frequency Electronics, Inc., a Delaware corporation
(the "Registrant" or "FEI") filed a Form 8-K describing its acquisition on
September 13, 2000, of substantially all of the outstanding shares of Gillam
S.A. ("Gillam"), a privately-held company organized under the laws of Belgium.
At the time of the filing, audited consolidated financial statements of Gillam
compliant with Regulation S-X were not yet available. As a result, the pro forma
consolidated financial information required by the Securities Exchange Act of
1934 could not be prepared. The purpose of this Form 8-K/A is to amend the
initial filing with respect to the Gillam acquisition and provide the required
audited financial statements and pro forma financial information reflecting the
acquisition.
As permitted by Rules 3-05 and 3-09 of Regulation S-X, since the Gillam
acquisition does not exceed the 30% significance level, its audited consolidated
financial statements as of March 31, 2000 and for the year then ended have been
prepared in accordance with Belgian standards of accounting. This is a
comprehensive basis of accounting other than generally accepted accounting
principles used in the United States. A reconciliation of the Gillam
consolidated financial statements as prepared under the Belgian standards to
United States generally accepted accounting principles has not been provided.
Some of the principle differences between United States accounting principles
and the Belgian principles applied by Gillam include the capitalization and
subsequent amortization of research and development costs, calculation of
operating income and operating charges, and the revaluation (increase) of
certain long-term assets.
ALL AMOUNTS IN THE CONSOLIDATED FINANCIAL STATEMENTS OF GILLAM ARE
EXPRESSED IN THOUSANDS (000s) OF BELGIAN FRANCS. In addition, the Belgian format
presents certain subsidiary accounts which are indented and added UP to obtain
subtotals and totals.
The pro forma financial statements are expressed in US dollars, translated
at appropriate rates of exchange for the periods presented.
Documents referred to in this Report
Frequency Electronics, Inc. has filed documents with the Securities and
Exchange Commission that are referred to in this report. The documents and the
information they contain are described below.
Form 10-K for the year ended April 30, 2000. Form 10-K contains audited
consolidated financial statements for fiscal year 2000.
Form 8-K filed on September 28, 2000. The Form 8-K includes information
about the acquisition of Gillam S.A.
Item 7. Financial Statements and Exhibits.
(a) Financial Statements of Business Acquired.
The Form 8-K filed on September 28, 2000 is hereby amended by deleting the
paragraph in Item 7(a) and replacing it with the following:
Audited consolidated financial statements of Gillam, S.A., including
related notes and independent accountants' report, are attached hereto as
follows:
Page
Statutory Auditor's Report 4
Summary and Identification of Companies and Signatures 5 - 6
Consolidated Balance Sheet as of March 31, 2000 7 - 8
Consolidated Income Statement for the year ended March 31, 2000 9 - 10
Notes on the Consolidated Annual Accounts 11 - 28
(b) Pro Forma financial information
Unaudited pro forma consolidated financial information reflecting the
Gillam acquisition, including related explanatory notes, are attached hereto as
follows:
Basis of Presentation 29
Unaudited Pro Forma Consolidated Balance Sheet at April 30, 2000 30-31
Unaudited Pro Forma Consolidated Statement of Operations for the
year ended April 30, 2000 32
Notes and Assumptions used to prepare the unaudited pro forma consolidated
financial information are provided at the bottom of each page
(c) Exhibits.
23.1 Consent of Statutory Auditors 34
99.1 Press Release of the Registrant dated August 30, 2000
The press release was previously filed with the Form 8-K on
September 28, 2000 and is not included in this amendment.
STATUTORY AUDITOR'S REPORT ON THE CONSOLIDATED
FINANCIAL STATEMENTS FOR THE YEAR ENDED THE
31st OF MARCH 2000 TO THE SHAREHOLDERS' MEETING
OF THE COMPANY "GILLAM S.A."
At the shareholders' request in order to fulfill "SEC" (Securities and
Exchange Commission) obligations in the context of acquisition of "GILLAM S.A."
by "F.E.I.", we are pleased to report to you on the performance of the audit
mandate which you have entrusted to us.
We have audited the consolidated financial statements as of and for the
year ended the 31st of March 2000 which have been prepared under the
responsibility of the board of directors and which show a balance sheet total of
677.774.(000) BEF and a profit for the year of 175.277.(000) BEF.
UNQUALIFIED AUDIT OPINION ON THE CONSOLIDATED FINANCIAL STATEMENTS
We conducted our audit in accordance with the Belgian auditing
standards, as issued by the "Institut des Reviseurs d'Entreprises". Those
standards require that we plan and perform the audit to obtain reasonable
assurance about whether the consolidated financial statements are free of
material misstatement, taking into account the legal and regulatory requirements
applicable to consolidated financial statements in Belgium.
In accordance with those standards, we considered the group's
administrative and accounting organisation, as well as its internal control
procedures. We have obtained all explanations and information required for our
audit. We examined, on a test basis, evidence supporting the amounts in the
consolidated financial statements. We assessed the accounting principles used,
the basis of consolidation and significant estimates made by the enterprise, as
well as the overall presentation of the consolidated financial statements. We
believe that our audit provides a reasonable basis for our opinion.
In our opinion the consolidated financial statements present fairly the
company's net worth and consolidated financial position as of the 31st of March
2000 and the consolidated results of its operations for the year then ended, in
accordance with the applicable legal and regulatory requirements in Belgium and
the information given in the notes to the consolidated financial statements is
properly presented.
OTHER CERTIFICATION
We supplement our report with the following certification which do not
modify our audit opinion on the consolidated financial statements.
No consolidated directors' report has been prepared in the specific context
of drawing up the consolidated financial statements ended the 31st of March
2000.
November 15th, 2000
Statutory auditor
S.c.P.R.L. " RENOUPREZ, LABILLE & C(degree)"
Reviseurs d'entreprises
Represented by
/s/F. Daerden
-------------
F. DAERDEN
CONSO 1.
CONSOLIDATED ACCOUNTS IN THOUSANDS OF (Belgian) FRANCS
NAME OF FIRM OR BUSINESS NAME OF THE CONSOLIDATING ENTERPRISE: GILLAM
Legal form: Public Limited Company
Address: Mont Saint Martin Nr. 58 Box:
Postal Code: 4000 Municipality: Liege
Register: TR Registrar's Office of: Liege Nr.: 120698
V. A. T. - or national number 414.125.464
CONSOLIDATED ACCOUNTS submitted for the General Meeting of ___________________
concerning the financial year covering the period from 01/04/1999 to 31/03/2000
Preceding period from / / to / /
The amounts of the preceding period are identical to those which have been
previously published: yes / no
- --------------------------------------------------------------------------------
COMPLETE LIST with name, first names, occupation, place of residence (address,
number, postal code and municipality) of both the DIRECTORS OR MANAGERS of the
consolidating enterprise and of the AUDITOR(S) who audited the consolidated
accounts.
GILLARD Michel, engineer
rue Saint Gilles 137, 4000 Liege, Belgium
Managing Director
MEUSINVEST SA (426.624.509)
rue du Vertbois 13 Box B, 4000 Liege, Belgium
Director
Represented by
JEHASSE Regis, Director
(continued on pp. CONSO 1bis.)
- --------------------------------------------------------------------------------
Are enclosed with these consolidated accounts:- the audit reports on the
consolidated accounts
- --------------------------------------------------------------------------------
REGARDING THE CONSOLIDATED ACCOUNTS OF A FOREIGN ENTERPRISE:
Name of the Belgian subsidiary, which filed the annual accounts (Royal Decree of
6 March 1990, Article 8, sec 2, 40a)
VAT- or national number of the Belgian subsidiary
which files the annual accounts
- --------------------------------------------------------------------------------
Total number of pages filed: Number of pages of the standard form not being
---- filed as they don't apply
Signature Signature
(Name and position) (Name and position)
/s/ Michel Gillard
- ------------------
Michel Gillard
Managing Director
CONSO 1.bis
COMPLETE LIST with name, first names, occupation, place of reference
(address, number, postal code and municipality) of both the DIRECTORS
OR MANAGERS of the consolidating enterprise and of the AUDITOR(S) who
audited the consolidated annual accounts, (continuation)
BELLENS Didier,
Avenue L. Vercauteren 25, 1160 Bruxelles, BELGIUM
Chairman of the board of directors
DEVOS Patrick,
Venneborglaan 6, 2100 Deurne (Antwerpen), BELGIUM
BRUSSELS SECURITIES
Avenue Marnix 24, 1050 Bruxelles, BELGIUM
Director
GILLARD Luc, economist
Au Peri 83, 4000 Liege, BELGIUM
Director
SPARAXIS (452.116.307)
avenue Maurice Destenay 13, 4000 Liege, BELGIUM
Director
Represented by:
TORDEURS Louis, director
Chemin des Pruniers 13, 5100 Jambes (Namur), BELGIUM
LEONARD Daniel,
avenue de Beaumont 3, 4200 Liege, BELGIUM
Director Beginning mandate: 29/09/1999
End mandate: 31/03/2000
S.C.R.L. Renouprez, Labille & Co (429.987.538)
rue A. Defuisseaux 166, 4431 Loncin, BELGIUM
Statutory auditor
Represented by:
DAERDEN Frederic, Statutory auditor
CONSO 2.
1. CONSOLIDATED BALANCE SHEET
AFTER APPROPRIATION
Period
ASSETS (in 000 BEF)
FIXED ASSETS 113,149
-------
I. Formation expenses (notes VII) -
II. Intangible assets (notes VIII) 51,390
III. Positive consolidation differences (notes XII)
IV. Tangible assets (notes IX) 50,253
A. Land and buildings 36,519
B. Plant, machinery and equipment 8,931
C. Furniture and vehicles 4,803
D. Leasing and other similar rights -
E. Other tangible assets -
F. Assets under construction and advance payments -
V. Financial assets (notes I to IV and X) 11,506
A. Enterprises accounted for using the
equity method: -
1. Participating interests -
2. Amounts receivable -
B. Other enterprises 11,506
1. Participating interests and shares 7,374
2. Amounts receivable 4,132
CURRENT ASSETS 564,625
-------
VI. Amounts receivable after one year -
A. Trade debtors
B. Other amounts receivable
VII. Stocks and contracts in progress 178,269
A. Stocks 107,386
1. Raw materials and consumables 39,234
2. Work in progress 67,722
3. Finished goods -
4. Goods purchased for resale -
5. Immovable property acquired or constructed for
resale -
6. Advance payments 430
B. Contracts in progress 70,883
VIII.Amounts receivable within one year 232,225
A. Trade debtors 215,815
B. Other amounts receivable 16,410
IX. Investments 139,400
A. Own shares -
B. Other investments and deposits 139,400
X. Cash at bank and in hand 12,649
XI. Deferred charges and accrued income 2,082
-------
TOTAL ASSETS 677,774
=======
CONSO 3.
Period
LIABILITIES (in 000 BEF)
CAPITAL AND RESERVES 372,374
-------
I. Capital 114,030
A. Issued Capital 114,030
B. Uncalled Capital (-) -
II. Share premium 64,941
III. Revaluation surpluses 276
IV. Consolidated reserves (+)(-) 193,127
V. Negative Consolidation differences -
VI. Translation differences (+)(-) -
VII. Investment grants -
MINORITY INTERESTS
VIII. Minority interests 8,670
-----
PROVISIONS, DEFERRED TAX AND LATENT TAXATION LIABILITIES 6,949
-----
IX. A. Provisions for liabilities and charges 6,949
1. Pensions and similar obligations -
2. Taxation -
3. Major repairs and maintenance -
4. Other liabilities and charges 6,949
B. Deferred tax and latent taxation liabilities -
CREDITORS 289,781
-------
X. Amounts payable within one year 95,493
A. Financial Debts 68,670
1. Subordinated loans 48,600
2. Unsubordinated debentures -
3. Leasing and other similar obligations 209
4. Credit institutions 19,861
5. Other loans -
B. Trade debts -
1. Suppliers
2. Bills of exchange payable
C. Advances received on contracts in progress -
D. Other amounts payable 26,823
XI. Amounts payable within one year 191,634
A. Current portion of amounts payable after one year 46,676
B. Financial debts 13,816
1. Credit institutions 13,816
2. Other loans -
C. Trade Debts 69,986
1. Suppliers 69,986
2. Bills of exchange payable -
D. Advances received on contracts in progress 11,848
E. Amounts payable regarding taxes, remuneration and
and social security 49,095
1. Taxes 2,479
2. Remuneration and social security 46,616
F. Other amounts payable 213
XII. Accrued charges and deferred income 2,654
TOTAL LIABILITIES 677,774
=======
CONSO 4.
2. INCOME STATEMENT
(Analysis of operating results by type)
Period
(in 000 BEF)
I. Operating income 621,642
-------
A. Turnover (notes XIV, A) 616,889
B. Increase (+); Decrease (-) in stocks of finished
goods, work and contracts in progress (34,275)
C. Fixed assets - own construction 30,354
D. Other operating income 8,674
II. Operating charges (-) (573,517)
-------
A. Raw materials, consumables and goods for resale 230,662
1. Purchases 231,810
2. Increase (-); Decrease (+) in stocks (1,148)
B. Services and other goods 68,707
C. Remuneration, social security costs and pensions
(notes XIV, B) 210,956
D. Depreciation of and other amounts written off formation
expenses, intangible and tangible fixed assets 46,976
E. Increase (+); Decrease (-) in amounts written off stocks,
contracts in progress and trade debtors 6,758
F. Increase (+); decrease (-) in provisions for liabilities
and charges (1,341)
G. Other operating charges 10,799
H. Operating charges capitalized as reorganization
costs (-) -
I. Amounts written down on positive consolidation
differences -
III. Operating profit (+) 48,125
------
Operating loss (-)
IV. Financial income 5,517
-----
A. Income from financial fixed assets 872
B. Income from current assets 3,614
C. Other financial income 1,031
V. Financial charges (-) (15,097)
------
A. Interests and other debt charges 14,561
B. Amounts written on positive consolidation differences -
C. Increase (+); decrease (-) in amounts written off current
assets other than those mentioned under II.E -
D. Other financial charges 536
VI. Profit on ordinary activities before taxation (+) 38,545
------
Loss on ordinary activities before taxation (-)
CONSO 5.
2. INCOME STATEMENT
(continued)
Period
(in 000 BEF)
VII. Extraordinary income 231,704
-------
A. Adjustments to depreciation of and to other
amounts written off intangible and tangible
fixed assets -
B. Adjustments to amounts written off consolidation
differences -
C. Adjustments to amounts written off financial fixed
assets -
D. Adjustments to provisions for extraordinary liabilities
and charges -
E. Gain on disposal of fixed assets 228,445
F. Other extraordinary income (notes XIV, C) 3,259
VIII. Extraordinary charges (-) (88,258)
------
A. Extraordinary depreciation of and amounts written
off formation expenses, intangible and tangible
fixed assets -
B. Extraordinary amounts written on positive
consolidation differences -
C. Amounts written off financial fixed assets -
D. Provisions for extraordinary liabilities and charges
(Increase +, decrease -) -
E. Loss on disposal of fixed assets 67,216
F. Other extraordinary charges (notes XIV, B) 21,042
G. Extraordinary charges capitalized as reorganization
costs (-) -
H. Negative consolidation differences (-) -
IX Profit for the financial period before taxation (+) 181,991
-------
Loss for the financial period before taxation. (-)
X. A. Transfer from deferred tax and latent taxation
liabilities (+) 2
-------
B. Transfer to deferred tax and latent taxation
liabilities (-)
XI. Income taxes (-)(+) (6,716)
------
A. Income taxes (notes XIV, D) (-) (6,716)
B. Adjustment of income taxes and write-back of tax
provisions
XII. Profit for the financial period (+) 175,277
=======
Loss for the financial period (-)
XIII. Share in the result of the enterprises accounted
for using the equity method (+)(-) -
A. Profits (+)
B. Losses (-)
XIV. Consolidated profit (+) 175,277
=======
Consolidated loss (-)
A. Share of third parties (+)(-) 243
B. Share of the group (+)(-) 175,034
CONSO 6.
3. NOTES ON THE CONSOLIDATED ANNUAL ACCOUNTS
I.LIST OF THE CONSOLIDATED ENTERPRISES AND ENTERPRISES INCLUDED USING THE EQUITY
METHOD
Name, full address of registered office and Method Used Proportion Change of percentage of
for enterprises governed by Belgian law, the of capital held capital held (as
V.A.T. number or the national number (in %) compared to the
previous period)
SA NOUVELLE SOCIETE SATEL F 85.8 0.00
route de Demigny 280
71530 Chalon-sur-Saone
FRANCE
- ----------------------------------
F- Full consolidation
CONSO 7.
II. LIST OF SUBSIDIARIES EXCLUSIVELY OR JOINTLY CONTROLLED NOT INCLUDED
(PURSUANT TO ARTICLE 13 OF THE ROYAL DECREE OF 6 MARCH 1990) AND ASSOCIATED
ENTERPRISES ACCOUNTED FOR USING THE EQUITY METHOD (BY APPLICATION OF
ARTICLE 68)
- ------------------------------------ -------------------------- -------------------------- ------------------------
Name, full address of registered Reason for Share in Change in percentage
office and for enterprises ------------------------- the capital 2 of capital held (as
governed by Belgian law, the Exclusion (in %) compared to the
V.A.T. number or the national (A, B, C, D, or E) 1 previous period) 3
number
- ------------------------------------ -------------------------- -------------------------- ------------------------
SATOEL A 100.00 50.00
route de Demigny 280
71530 Chalon-sur-Saone
FRANCE
TECNITROM A 15.00 0.00
Estrada National 252
2955 Pinal Novo
PORTUGAL
- ------------------------------------ -------------------------- -------------------------- ------------------------
- ---------------------------
1 Reason for Exclusion
A. Subsidiary of minor importance
2 Proportion of capital of those enterprises being held by both enterprises
included in the consolidated accounts and persons acting in their own names
but on behalf of these enterprises.
3 Where the composition of the consolidated aggregate is significantly
influenced by changes in its percentage additional information are provided
in statement V. (Article 18)
CONSO 8.
III. ENTERPRISES OTHER THAN SUBSIDIARIES AND ASSOCIATED ENTERPRISES
The enterprises stated below have not been mentioned under the numbers I
and II at the notes. They are enterprises included in or excluded from
consolidation (by application of the Royal Decree of 6th March 1990,
Article 13 and Article 14.) holding a 10%-interest in the capital amount,
either by themselves or via a person acting in his own name but on behalf
of theses enterprises. Those data can be omitted when they are not material
in respect of the principle of a true and fair view.
Name, full address of registered Share Data from the most recent period for which annual accounts
office in the are available
and for enterprises governed by capital
the Belgian law, (in %)
the V.A.T. number or the
national number
- ---------------------------------- ------------------------ ------------------------------------------------------------
- ---------------------------------- ------------------------ ------------------ ------------ ------------------ ---------
Annual Currency Capital and Net
Accounts Code reserves Result
- ---------------------------------- ------------------------ ------------------ ------------ ------------------ ---------
----------------------------
(+) of (-)
in thousands of monetary
units
- ---------------------------------- ------------------------ ------------------ ------------ ----------------------------
- ---------------------------------- ------------------------ ------------------ ------------ ----------------------------
NONE
- ---------------------------------- ------------------------ ------------------ ------------ ----------------------------
CONSO 9.
IV. CONSORTIUM
Information regarding the enterprises which form part of the consortium. For
each enterprise shall be disclosed: the method used for inclusion into the
accounts of the consortium together with the list of subsidiaries, the method of
their inclusion into the accounts of the consolidation as well as the proportion
of capital held.
NONE
CONSO 10.
V. CONSOLIDATION CRITERIA AND CHANGES IN THE CONSOLIDATION SCOPE
A. Information and the criteria governing the application of full consolidation,
proportional consolidation and the equity method as well as those cases in
which these criteria are departed from, and justification for such departures
(by application of Article 69 I. of the Royal Decree of 6 March 1990).
Full consolidation
The full consolidation method is used whenever the following conditions
are met: - the majority of the voting rights is held on the total shares
of a company, or - a de facto or de jure controlling influence is held in
a company.
Proportional integration
This method is used for companies which are owned and managed by a
limited number of shareholders who have agreed among themselves that
decisions influencing the way in which the company is managed may only be
taken with their joint approval.
Equity Method
This method is used whenever the criteria for full consolidation or
proportional integration are not met. It applies to companies in which a
consolidated company holds a participating interest and over which it
exerts a significant influence.
B. Information which makes a comparison meaningful with the consolidated
annual accounts of the previous financial period in case the composition of
the consolidated aggregate in the course of the current financial period
has changed significantly (by application of Article 18. of the Royal
Decree of 6 March 1990
Not applicable
CONSO 11.
VI. SUMMARY OF VALUATION RULES AND METHODS OF CALCULATING OF DEFERRED TAXES
A. Disclosure of the criteria governing the valuation of the various items in
the consolidated annual accounts, and in particular:
o the application and adjustments of depreciation, amounts written down
and provisions for liabilities and charges, and revaluations (pursuant
to Article 69 VI.a. of the Royal Decree of 6 March 1990)
o the bases of translation applied to express in the consolidated
accounts items which are, or originally were, expressed in a currency
other than the currency in which the consolidated accounts are
stated, and the translation in the consolidated accounts of the
accounting statements of subsidiaries and associated enterprises
governed by foreign law. (pursuant to Article 69 VI.b. of the Royal
Decree of 6 March 1990)
The valuation rules used are the valuation rules of the parent company
determined in conformity with Chapter II of the Royal Decree of October 8, 1976.
Particular rules.
Formation expenses are immediately expensed.
Intangible assets include research and development expenses which are
capitalized and depreciated over a period not exceeding 5 years.
Tangible fixed assets are valued at acquisition cost less cumulative
depreciation computed on a linear basis considering the following rates:
- Buildings 10-20%
- Equipment 20-33.3%
- Furniture 20%
- Vehicles 33.3%
Participation's which are not consolidated are valued at
acquisition costs less any permanent impairment value.
Inventory:
- raw materials are valued at lower of cost or NRV (net realizable value)
with cost determined according to the weighted average method;
- work in progress is valued at lower of cost or NRV. Cost includes direct
and indirect production costs. The completed contract method is used
to recognize long-term contract revenues and profits.
Monetary assets and liabilities in foreign currency are valued using the closing
rate method. Non-monetary assets and liabilities are maintained at historical
rate. Unrealized exchange losses are expensed. Unrealized exchange gains are
deferred.
Consolidated financial statements of subsidiaries in foreign currencies are
translated according to the closing rate method.
CONSO 12.
Amounts
VI. B. Future taxation and deferred taxes
Analysis of Deferred tax and latent taxation liabilities
(Heading 168 of the liabilities) -
Future taxation (by application of Article 35 of the
Royal Decree of 8th October 1976, inserted by the Royal
Decree of 30th December 1991) -
Deferred taxes (by application of Article 40 of the
Royal Decree of 6th March 1990) -
Detailed explanation on the methods applied in determining deferred
taxes (deferral method, liability method,...)
N/A
CONSO 13.
Amounts
VII. STATEMENT OF FORMATION EXPENSES (Heading 20 of the assets)
Net carrying value as at the end of the preceding period
Movements of the period: Not applicable
o New expenses incurred
o Depreciation (-)
o Translation differences (+)(-)
o Other (+)(-)
Net carrying value at the end of the period
Of which: - Expenses of formation or capital increase, loan issue expenses,
reimbursement premium and other formation costs
- Reorganization costs
CONSO 14.
VIII. STATEMENT OF INTANGIBLE ASSETS
1. Research and 2. Concessions, patents
development expenses licenses, etc.
a) ACQUISITION COST
As at the end of the preceding period 285,744 18,607
Movements during the period: 216
o Acquisitions, including fixed assets, own production 30,898
o Sales and disposals (-) (91,780)
o Transfers from one heading to another (+)(-)
o Translation differences (+)(-)
o Other movements
At the end of the period 224,862 18,823
------- ------
c) DEPRECIATION AND AMOUNTS WRITTEN DOWN
As at the end of the previous period 234,564 17,779
Movements during the period:
o Recorded 30,879 853
o Written back as superfluous (-)
o Acquisitions from third parties
o Written down after sales and disposals (-) (91,780)
o Transfers from one heading to another (+)(-)
o Translation differences (+)(-)
o Other movements
At the end of the period 173,663 18,632
------- ------
d) NET CARRYING VALUE AT THE END
OF THE PERIOD (a)-(c) 51,199 191
====== ======
3. Goodwill 4. Advance payments
a) ACQUISITION COSTS
As at the end of the preceding period None None
Movements during the period:
o Acquisitions, including fixed assets, own production
o Sales and disposals (-)
o Transfers from one heading to another (+)(-)
o Translation differences (+)(-)
o Other movements:
At the end of the period:
c) DEPRECIATION AND AMOUNTS WRITTEN DOWN As at the end of the preceding period
Movements during the period:
o Recorded
o Written back as superfluous (-)
o Acquisitions from third parties
o Written down after sales and disposals (-)
o Transfers from one heading to another (+)(-)
o Translation differences (+)(-)
o Other movements
At the end of the period
d) NET CARRYING VALUE AT THE END OF THE PERIOD (a)-(c)
CONSO 15.
IX. STATEMENT OF TANGIBLE FIXED ASSETS
1. Land and 2. Plant, machinery 3. Furniture and
Buildings and equipment vehicles
a) ACQUISITION COST
As at the end of the preceding period: 79,437 134,579 36,749
Movements during the period:
o Acquisitions, including fixed assets, own construction 188 3,067 5,291
o Sales and disposals (-) (3,216)
o Transfers from one heading to another (+)(-) 380
o Translation differences (+)(-)
o Other movements
At the end of the period 79,625 137,646 39,204
------ ------- ------
b) REVALUATION SURPLUSES
As at the end of the preceding period 20.220 - -
Movements during the period:
o Recorded
o Acquisitions from third parties
o Reversals (-)
o Transfers from one heading to another (+)(-)
o Translation differences (+)(-)
o Other movements
At the end of the period 20,220 - -
------ ------- ------
c) DEPRECIATION AND AMOUNTS WRITTEN DOWN
As at the end of the preceding period 59,367 120,703 33,498
Movements during the period:
o Recorded 3,959 8,012 3,276
o Written back as superfluous (-)
o Acquisitions from third parties
o Written down after sales and disposals (-) (2,753)
o Transfers from one heading to another (+)(-) 380
o Translation differences. (+)(-)
o Other movements
At the end of the period 63,326 128,715 34,401
------ ------- ------
d) NET CARRYING VALUE AT THE END
OF THE PERIOD (a)+(b)-(c) 36,519 8,931 4,803
====== ======= =====
CONSO 16.
IX. STATEMENT OF TANGIBLE FIXED ASSETS
4. Leasing and 5. Other 6. Assets under
other similar rights tangible assets construction and
advance payments
a) ACQUISITION COST
As at the end of the preceding period 380
Movements during the period:
o Acquisitions, including fixed assets, own construction
o Sales and disposals (-)
o Transfers from one heading to another (+)(-) (380)
o Translation differences (+)(-)
o Other movements
At the end of the period 0
b) REVALUATION SURPLUSES
As at the end of the preceding period
Movements during the period:
o Recorded
o Acquisitions from third parties
o Reversals (-)
o Transfers from one heading to another (+)(-)
o Translation differences (+)(-)
o Other movements
At the end of the period
c) DEPRECIATION AND AMOUNTS WRITTEN DOWN
As at the end of the preceding period
Movements during the period: 380
o Recorded
o Written back as superfluous (-)
o Acquisitions from third parties
o Written down after sales and disposals (-)
o Transfers from one heading to another (+)(-) (380)
o Translation differences (+)(-)
o Other movements
At the end of the period
d) NET CARRYING VALUE AT THE END OF THE
PERIOD (a)+(b)-(c) 0
===
Of which: o Land and buildings
o Plant, machinery and equipment
o Furniture and vehicles
CONSO 17.
X. STATEMENT OF FINANCIAL FIXED ASSETS
1. Participating interests 1. Enterprises 2. Other
accounted for enterprises
using the
equity method
a) ACQUISITION COST
As at the end of the preceding period - 272,222
Movements during the period:
o Acquisitions 951
o Sales and disposals (-) (265,799)
o Transfers from one heading to another (+)(-)
o Translation differences (+)(-)
At the end of the period 7,374
b) REVALUATION SURPLUSES
As at the end of the preceding period
Movement during the period:
o Recorded
o Acquisitions from third parties
o Reversals (-)
o Translation differences (+)(-)
o Translations from one heading to another(+)(-)
At the end of the period
c) AMOUNTS WRITTEN DOWN
As at the end of the preceding period
Movements during the period:
o Recorded
o Written back as superfluous (-)
o Acquisitions from third parties
o Written down after sales and disposals (-)
o Translation differences (+)(-)
o Translations from one heading to another(+)(-)
At the end of the period
d) UNCALLED AMOUNTS
As at the end of the previous period
Movements during the period (+)(-)
At the end of the period
e) MOVEMENTS IN THE CAPITAL AND RESERVES OF THE ENTERPRISES
ACCOUNTED FOR USING THE EQUITY METHOD (+)(-)
o Share in the result for the financial period
o Elimination of dividends regarding those participating interests
o Other movements in the capital and reserves
NET CARRYING VALUE AT THE END OF THE PERIOD
(a) + (b) - (c) - (d) +/- (e) 7,374
=====
CONSO 17. bis
X. STATEMENT OF FINANCIAL FIXED ASSETS (continued)
2. Amounts receivables 1. Enterprises 2. Other
accounted for enterprises
using the
equity method
NET CARRYING VALUE AT THE END OF THE PERIOD 4,182
Movements during the period:
o Additions 370
o Reimbursements (-) (420)
o Amounts written down (-)
o Amounts written back
o Translation differences (+)(-)
o Other (+)(-)
NET CARRYING VALUE AT THE END OF THE PERIOD 4,132
=====
ACCUMULATED AMOUNTS WRITTEN DOWN AT THE END
OF THE PERIOD
CONSO 18.
XI. STATEMENT OF CONSOLIDATED RESERVES
Amounts
Consolidated reserves at the end of the previous
financial period (+)(-) 22,968
Movements:
Shares of the group in the consolidated income (+)(-) 175,034
Other movements: (+)(-)
(breakdown of the meaningful amounts not approportioned
to the share of the group in the consolidated result)
Dividend distribution (24,819)
Transfer of revaluation surplus 19,944
------
Consolidated reserves at the end of the financial period(+)(-) 193,127
=======
XII. STATEMENT OF CONSOLIDATION DIFFERENCES AND DIFFERENCES RESULTING FROM THE
APPLICATION OF THE EQUITY METHOD
(Heading 9920 of the assets, Heading 9911 of the liabilities)
Consolidation differences Differences resulting from
application of the equity method
1. Positive 2. Negative 3. Positive 4. Negative
-------------------------------------------------------------
NET CARRYING VALUE AT THE END
OF THE PRECEDING PERIOD
Movements during the period: Not applicable
o Arising from an increase of the
percentage held
o Arising from a decrease of the
percentage held
o Write-downs
o Differences transferred to the
income statements
o Other modifications
NET CARRYING VALUE AT THE END OF
THE PERIOD
CONSO 19.
XIII. STATEMENT OF AMOUNTS PAYABLE
A. ANALYSIS OF THE AMOUNTS ORIGINALLY PAYABLE AFTER ONE YEAR ACCORDING TO THEIR
RESIDUAL TERM
AMOUNTS PAYABLE WITH A RESIDUAL TERM OF
---------------------------------------
1. not more than 1 2. between 1 and 3. over 5 years
year 5 years
Financial debts 46,676 68,670 -
------ ------
1. Subordinated loans 16,200 48,600 -
2. Unsubordinated debentures
3.Leasing and other similar obligations 322 209 -
4. Credit institutions 30,154 19,861 -
5. Other loans
Trade debts - - -
1. Suppliers
2. Bills of exchange payable
Advances received on contracts in progress - - -
Other amounts payable 26,823 -
------ ------ ---
TOTAL 46,676 95,493 -
====== ====== ===
B. AMOUNTS PAYABLE, OR THE PORTION THEREOF, WHICH GUARANTEED BY REAL GUARANTEES
GIVEN OR IRREVOCABLY PROMISED ON THE ASSETS OF THE ENTERPRISES INCLUDED IN
THE CONSOLIDATION
Financial period
Financial debts 12,531
------
1. Subordinated loans
2. Unsubordinated debentures
3. Leasing and other similar obligations 531
4. Credit institutions 12,000
5. Other loans
Trade debts -
1. Suppliers
2. Bills of exchange payable
Advances received on contracts in progress -
Taxes, remuneration and social security payable -
1. Taxes
2. Remuneration and social security
Other amounts payable
TOTAL 12,531
======
CONSO 20.
XIV. RESULT
A. NET TURNOVER (Heading 70 of the income statement)
A1. Analysis by categories, for the financial period and the previous
financial period, of activity and geographical markets, to be
disclosed in an annex to the standard form in so far as these
categories and markets, from the point of view of the organization
of the sale of goods and the provision of services falling within
the ordinary activities of the enterprises included in the
consolidation show substantial differences one from another.
Period
A2. Aggregate turnover of the group in Belgium 402,740
(item 70 of the income statement)
B. AVERAGE NUMBER OF PERSONS EMPLOYED
in units, AND PERSONNEL CHARGES,
B1. Fully consolidated enterprises
B11.Average number of persons employed 116
---
Workers 38
Employees 69
Management personnel 6
Other persons 3
B12. Personnel charges
(Heading 62 of the income statement)
Remuneration's and social charges 210,956
Pensions
B13.Average number of persons employed in Belgium
by enterprises of the group 62
B2. Proportionally consolidated enterprises N/A
B21.Average number of persons employed
Workers
Employees
Management personnel
Other persons
B22. Personnel charges
(Heading 62 of the income statement)
Remuneration's and social charges
Pensions.
B23.Average number of persons employed in Belgium
by enterprises of the group
.
CONSO 21.
Period
C. EXTRAORDINARY RESULTS
C1. Analysis of the OTHER EXTRAORDINARY INCOME
(Heading 764/9), if it involves significant amounts
C2. Analysis of the OTHER EXTRAORDINARY COSTS
(Heading 664/8), if it involves significant amounts
Expenses related to sale of participation 13,793
======
Redundancy costs 7,074
=====
D. INCOME TAXES (Heading 67/77)
D1. Difference between the tax charged in the consolidated
income statement for the period and the preceding
periods and the amount of the tax paid or payable
in respect of those periods, provided that this
difference is material for the purposes of future
taxation
D2. Effect of extraordinary results on the amount
of income taxes on the current period (8,416)
======
CONSO 22.
XV. RIGHTS AND COMMITMENTS NOT REFLECTED IN THE BALANCE SHEET,
Period
A. 1.Amount of personal guarantees, given or irrevocably
promised by the enterprises included in the
consolidation, as security for third parties' debts
or commitments
2. Amount of real guarantees, given or irrevocably
promised by the enterprises included in the
consolidation on their own assets, as security
for debts and commitments:
of enterprises included in the consolidation 12,000
of third parties -
3. Amounts of goods and values, held by third parties
in their own name but at risk to and for the benefit
of the enterprises included in the consolidation not
reflected in the balance sheet
4. a) Commitments to acquire fixed assets
b) Commitments to dispose of fixed assets
5. a) Rights from transactions:
- to interest rates
- to exchange rates
- to prices of raw materials or goods
purchased for resale
- to other similar transactions
b) Commitments from transactions:
- to interest rates
- to exchange rates
- to prices of raw materials or goods
purchased for resale
- to other similar transactions
B. Commitments relating to technical guarantees, in respect of sales or
services already provided
NONE
C. Significant litigation and other significant commitments
Since 1997 the company has a litigation with the tax authorities
regarding a loss realized on the sale of bonds reimbursable in shares.
The Ministry of Finance refuses the tax deduction of an amount of
53,354.834 BEF and qualifies the loss on bonds as a reduction in
value of shares.
The company has introduced a complaint as of August 31, 1998 on which
no answer has been received as of today. Expecting a positive outcome,
the Board of Directors has decided not to record a provision for the
outstanding risk estimated at 30 million BEF.
D. Commitments with respect to retirement and survivors' pensions in favor of
their personnel or executives, at the expense of the enterprises included
in the consolidation
NONE
CONSO 23.
XVI. RELATIONSHIPS WITH AFFILIATED ENTERPRISES AND ENTERPRISES LINKED BY
PARTICIPATING INTERESTS BUT NOT INCLUDED IN THE CONSOLIDATION
1. AFFILIATED ENTERPRISES 2. ENTERPRISES LINKED WITH
PARTICIPATING INTERESTS
Period Period
1. FINANCIAL FIXED ASSETS
o Participating interests and
shares 7,374
-----
2. AMOUNTS RECEIVABLE 6,099
-----
o After one year -
o within one year 6,099
3. CURRENT INVESTMENTS
o Shares -
o Amounts receivable -
4. AMOUNTS PAYABLE 6,765
-----
o After one year -
o within one year 6,765
AFFILIATED ENTERPRISES
Period
5. PERSONAL AND REAL GUARANTEES given or irrevocably
promised, as security of debts or promised, as security of
debts or commitments of affiliated enterprises
6. OTHER SIGNIFICANT FINANCIAL COMMITMENTS
7. FINANCIAL RESULTS
Income from financial fixed assets 872
Income from current assets
Other financial income
Interest and other debt charges
Other financial charges
XVII. FINANCIAL RELATIONSHIPS WITH DIRECTORS OR MANAGERS OF THE CONSOLIDATION
ENTERPRISE
A. Total amount of remuneration granted in respect of their responsibilities
in the consolidation enterprise, its subsidiaries and its affiliated
enterprises, including the amounts in respect of retirement pensions
granted to former directors or managers
None
B. Total amount of advances and credits granted by the consolidating
enterprise, by a subsidiary or by an associated enterprise
None
UNAUDITED PRO FORMA CONSOLIDATED FINANCIAL DATA
BASIS OF PRESENTATION
The following unaudited pro forma consolidated financial data for Frequency
Electronics, Inc. is based on FEI's historical financial statements adjusted to
reflect the acquisition of Gillam S.A. The unaudited pro forma consolidated
statement of operations is presented for the year ended April 30, 2000,
including the results of continuing operations for Gillam for the year ended
March 31, 2000, Gillam's fiscal year end. The statement of operations reflects
the acquisition as if it had occurred as of May 1, 1999. The unaudited pro forma
balance sheet reflects the Gillam acquisition as of April 30, 2000 and uses the
March 31, 2000 consolidated balance sheet of Gillam. For both the balance sheet
and the statement of operations, the historical financial statements of Gillam
have been adjusted and reclassified to conform with US generally accepted
accounting principles.
The Gillam acquisition was consummated pursuant to the terms of a Share Purchase
Agreement dated as of August 29, 2000. Under terms of the agreement, FEI paid
$8,400,264 in cash and issued 154,681 shares of common stock to acquire the
outstanding stock of Gillam. Based upon the market value of FEI's common stock
on July 25, 2002, the Share Purchase Agreement may require FEI to issue to the
Gillam shareholders up to 35,000 additional shares of FEI common stock. Because
the shares issued to the Gillam shareholders are restricted shares, they have
been valued at approximately 65% of the average market price of FEI common
stock, as quoted on the American Stock Exchange, for the day immediately prior
to, the day of, and the day immediately after the announcement of the
acquisition. In addition, FEI paid approximately $470,000 in direct transaction
costs. Thus, the total purchase price is approximately as follows:
(in thousands)
Cash paid for Gillam shares $ 8,400
Fair value of restricted shares issued 3,465
Direct transaction costs 470
---------
Total purchase price $12,335
=======
The purchase price will be allocated as follows:
Net assets acquired $ 7,774
Allocation to tangible and intangible assets 4,561
--------
$12,335
=======
The allocation to certain tangible assets, such as buildings and inventory, and
to certain intangible assets such as patents, the customer base and goodwill,
will be based upon a valuation which has not yet been completed. For purposes of
the pro forma presentation, the entire $4,561,000 excess of purchase price over
net assets acquired has been classified as goodwill and is amortized over a 15
year period. Once the valuation process is complete, this amount will be
reclassified and the actual amortization may differ from the amount used in the
pro forma statement of operations.
The pro forma adjustments are based upon available information and assumptions
management believes are reasonable under the circumstances. The unaudited pro
forma consolidated financial data and accompanying notes should be read in
conjunction with the historical audited and unaudited financial statements and
related notes of Frequency Electronics and the historical audited consolidated
financial statements and related notes of Gillam S.A., as presented elsewhere in
this Form 8K/A. The pro forma financial data does not purport to present what
actual results of operations or actual financial position would have been if the
transaction described above in fact occurred on such dates or to project the
results of operations or financial position for any future period or date.
UNAUDITED PRO FORMA CONSOLIDATED BALANCE SHEET
April 30, 2000
-----------
: Frequency Company acquired subsequent
Electronics to April 30, 2000
Historical Historical Adjustment Pro Forma
ASSETS (US $ in thousands)
Current assets:
Cash and cash equivalents $ 4,994 $ 300 (470) a $ 4,824
Marketable securities 36,013 3,301 (8,400) b 30,914
Accounts receivable, net 9,590 5,499 15,089
Inventories 13,307 4,221 17,528
Deferred income taxes 1,940 - 1,940
Prepaid expenses and other 1,329 49 1,378
------- ------- ------ -------
Total current assets 67,173 13,370 (8,870) 71,673
Property, plant and equipment, at cost,
less accumulated depreciation and
amortization 9,040 786 9,826
Intangible assets - - 4,561 c 4,561
Deferred income taxes (Note 12) 600 690 1,290
Other assets 4,034 272 4,306
------- ------- ------ -------
Total assets $80,847 $15,118 (4,309) $91,656
======= ======= ====== =======
- -------------------------
NOTES and Assumptions
a- Payment of direct transaction costs.
b- Cash and marketable securities redeemed to acquire 70% of Gillam shares
c- Record excess of purchase price over net assets acquired as goodwill,
subject to allocation to other assets when the valuation process is
completed.
Continued
UNAUDITED PRO FORMA CONSOLIDATED BALANCE SHEET
April 30, 2000
(Continued)
-----------
Frequency Company acquired subsequent
Electronics to April 30, 2000
Historical Historical Adjustment Pro Forma
LIABILITIES AND STOCKHOLDERS' EQUITY (US $ in thousands)
Current liabilities:
Current maturities of long-term debt $ - $ 1,432 $ 1,432
Accounts payable - trade 1,019 1,657 2,676
Accrued liabilities 3,190 1,172 4,362
Dividend payable 799 - 799
Deferred income and other - 340 340
------- ------- -------
Total current liabilities 5,008 4,601 9,609
Long-term debt - 1,626 1,626
Deferred compensation 5,276 112 5,388
Other liabilities 11,573 800 12,373
------- ------- -------
21,857 7,139 28,996
------- ------- -------
Minority interest in subsidiary 205 205
Stockholders' equity:
Preferred stock - authorized 600,000 shares
of $1.00 par value; no shares issued - -
Common stock - authorized 20,000,000 shares
of $1.00 par value; issued 9,009 2,700 155 d 9,164
(2,700) e
Additional paid-in capital 37,929 1,538 3,310 d 41,239
(1,538) e
Retained earnings 17,239 3,536 (3,536) e 17,239
------- ------- ------ -------
64,177 7,774 (4,309) 67,642
Other stockholders' equity accounts (5,187) (5,187)
------- -------
Total stockholders' equity 58,990 7,774 (4,309) 62,455
------- ------- ------ -------
Total liabilities and stockholders' equity $80,847 $15,118 ($4,309) $91,656
======= ======= ====== =======
- -------------------------
NOTES and Assumptions
d- Issuance of 154,681 shares to acquire 30% of Gillam shares
e- Elimination of pre-acquisition Gillam equity accounts
UNAUDITED PRO FORMA CONSOLIDATED INCOME STATEMENT
Year ended April 30, 2000
Frequency Company acquired subsequent
Electronics to April 30, 2000
Historical Historical Adjustment Pro Forma
(In thousands of US $, except share data)
Net sales $26,535 $15,777 $42,312
------- ------- -------
Cost of sales 14,884 10,700 25,584
Selling and administrative expenses 5,275 3,021 8,296
Amortization of intangible assets - - 304 f 304
Research and development expenses 5,368 723 6,091
------- ------- ----- -------
Total operating expenses 25,527 14,444 304 40,275
------- ------- ----- -------
Operating profit 1,008 1,333 (304) 2,037
Other income (expense):
Investment income 3,929 141 (490) g 3,580
Interest expense (306) (386) (692)
Other, net (207) - (207)
------- ------- ----- -------
Earnings from continuing operations before
provision (benefit) for income taxes 4,424 1,088 (794) 4,718
Provision (benefit) for income taxes 1,280 210 (140) h 1,350
------- ------- ----- -------
Net earnings from continuing operations
before minority interest 3,144 878 (654) 3,368
Minority interest in subsidiary 16 16
------- ------- ----- -------
Income from continuing operations $ 3,144 $ 862 ($654) $ 3,352
======= ======= ===== =======
Income from continuing operations per common share:
Basic $ 0.41 $ 0.43
====== ======
Diluted $ 0.39 $ 0.41
====== ======
Average shares outstanding:
Basic 7,673,497 154,681 i 7,828,178
========= ======= =========
Diluted 8,043,727 154,681 i 8,198,408
========= ======= =========
- -------------------------
NOTES and Assumptions
f- Amortization of goodwill over 15 years. Where possible, the excess purchase
price will be allocated to certain assets and liabilities but the
evaluation process has not yet been completed.
g- Reduced investment income due to assumed cash payments of $8.87 million on
May 1, 1999.
h- Tax effect of lower investment income
i- Assumes 154,681 shares issued in connection with the Gillam acquisition
were outstanding since May 1, 1999.
Signatures
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.
Frequency Electronics, Inc.
By: /s/ Alan Miller
-------------------
Alan Miller
Treasurer and
Chief Financial Officer
Date: November 27, 2000
Exhibit 23.1
CONSENT OF STATUTORY AUDITORS
We hereby consent to the incorporation by reference in the Registration
Statement on Form S-8 (No. 333-42233) of Frequency Electronics, Inc. of our
report dated November 15, 2000 relating to the financial statements of Gillam
S.A., which appears in the Current Report on Form 8-K/A of Frequency
Electronics, Inc. dated September 13, 2000.
S.c.P.R.L. RENOUPREZ, LABILLE & Co.
/s/ F. Daerden
- --------------
Frederic Daerden
Statutory Auditor
Liege, Belgium
November 27th, 2000