ENERPAC TOOL GROUP CORP — Capital/Financing Update 1998

Jul 1, 1998

UNITED STATES 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): June 5, 1998 APPLIED POWER INC. ----------------- (Exact name of Registrant as specified in its charter) WISCONSIN 1-11288 39-0168610 --------- ------- ---------- (State of incorporation) (Commission File No.) (I.R.S. Employer Id. No.) 13000 WEST SILVER SPRING DRIVE BUTLER, WISCONSIN 53007 MAILING ADDRESS: P. O. BOX 325, MILWAUKEE, WISCONSIN 53201 ------------------------------------------------------------ (Address of principal executive offices) (Zip Code) (414) 781-6600 -------------- (Registrant's telephone number, including area code) 1 The undersigned registrant hereby amends Item 7 including the financial statements, exhibits or other portions of financial information filed for VERO Group plc ("VERO") on Form 8-K dated as of June 5, 1998 (the "VERO 8-K"). The financial statements and related footnotes as previously filed in the VERO 8-K have been amended to reflect that the financial data presented for VERO's fiscal year ended December 31, 1996 is not covered by the audit opinion of Ernst & Young for the year ended December 31, 1997 filed as part of the VERO 8-K. As such, the 1996 financial data has been marked as "unaudited." Additionally, footnote number 23 has been added to reconcile certain information presented under generally accepted accounting principles in the United Kingdom to generally accepted accounting principles in the United States. The related updated accountants' consent as Exhibit 23 is also being filed. SIGNATURE Pursuant to the requirement of the Securities Exchange Act of 1934, the Registrant has duly caused this Amendment to be signed on its behalf by the undersigned, thereunto duly authorized. APPLIED POWER INC. June 30, 1998 By: /s/ Robert C. Arzbaecher ------------------------------------- Robert C. Arzbaecher Vice President and Chief Financial Officer ITEM 7. FINANCIAL STATEMENTS AND EXHIBITS - - ------------------------------------------- (a) Financial Statements of Businesses Acquired: The following financial statements of VERO prepared in accordance with generally accepted accounting principles in the United Kingdom are included herein from pages 17 through 35 of VERO's 1997 Annual Report which is filed herewith as Exhibit 99.1. These financial statements are not the statutory accounts of VERO. The statutory accounts for the years ended December 31, 1997 and 1996 have been delivered to the Registrar of Companies for England and Wales and the auditors' reports thereon were unqualified: Report of Independent Auditors Consolidated Profit and Loss Account for the years ended December 31, 1997 and 1996 Consolidated Balance Sheet as of December 31, 1997 and 1996 Consolidated Cash Flow Statement for the years ended December 31, 1997 and 1996 Consolidated Statement of Total Recognized Gains and Losses for the years ended December 31, 1997 and 1996 Reconciliation of Movements in Consolidated Shareholders' Fund for the years ended December 31, 1997 and 1996 Company Balance Sheet as of December 31, 1997 and 1996 Accounting Policies Notes to the Accounts (b) Pro Forma Financial Information: The following unaudited pro forma condensed consolidated financial statements of Applied Power Inc. and subsidiaries, reflecting the acquisition of VERO, are filed herewith: Introduction to Pro Forma Condensed Consolidated Financial Statements of Applied Power Inc. and VERO Group plc Applied Power Inc. and VERO Group plc Pro Forma Condensed Consolidated Balance Sheet as of February 28, 1998 and the related Pro Forma Condensed Consolidated Statement of Earnings for the six months then ended (unaudited) Pro Forma Condensed Consolidated Statement of Earnings for the year ended August 31, 1997 (unaudited) Notes to Pro Forma Condensed Consolidated Financial Statements (unaudited) (c) Exhibits: See the Exhibit Index following the Signature page of this Report, which is incorporated herein by reference. 5 APPLIED POWER INC. AND VERO GROUP PLC INTRODUCTION TO PRO FORMA CONDENSED CONSOLIDATED FINANCIAL STATEMENTS --------------------------------------------------------------------- Unaudited As described under Item 2 of this report, Applied Power Inc. (the "Company" or "API"), through Applied Power Limited, a wholly owned subsidiary, acquired by means of a tender offer and market purchases of shares over 90% of the outstanding shares of common stock of VERO Group plc ("VERO") at a price of 192 pence per share in cash. The following unaudited pro forma condensed consolidated balance sheet and statements of earnings (the "pro forma statements") give effect to the acquisition of VERO using the purchase method of accounting and are based on the estimates and assumptions set forth in the notes to such pro forma statements. The pro forma statements have been prepared by the Company utilizing the historical financial statements of the Company and notes thereto which were contained in the Company's Annual Report on Form 10-K for the fiscal year ended August 31, 1997 and the unaudited condensed consolidated interim financial information contained in the Company's Quarterly Report on Form 10-Q for the quarter ended February 28, 1998 and the audited financial statements and notes thereto of VERO for the year ended December 31, 1997, included as Item 7(a) of this report, and VERO's unaudited interim results for the six months ended June 30, 1997. VERO's reporting currency is the United Kingdom pound sterling and its financial information in the accompanying pro forma combined financial statements has been translated to the U.S. dollar in accordance with Statement of Financial Accounting Standards No. 52, "Foreign Currency Translation." VERO's historic financial statements are prepared in accordance with generally accepted accounting principles in the United Kingdom ("UK GAAP"), however, VERO's financial information in the accompanying pro forma combined financial statements has been adjusted to confirm with generally accepted accounting principles in the United States ("US GAAP"). The only material adjustment required to conform with US GAAP related to goodwill. Under UK GAAP purchased goodwill may be written off on acquisition directly against reserves. Under US GAAP goodwill is capitalized and amortized by charges against income over the period during which it is estimated it will be of benefit subject to a maximum of 40 years. Accordingly, goodwill, net of amortization, was recorded in the pro forma combined balance sheet at February 28, 1998 and the related amortization expense included in the pro forma combined statements of earnings for the six months ended February 28, 1998 and the twelve months ended August 31, 1997. These pro forma statements have been prepared and included herein as required by the rules and regulations of the Securities and Exchange Commission and are provided for comparative purposes only. The pro forma statements are not necessarily indicative of the future consolidated financial position and results of operation or those which would have occurred had the acquisition been consummated as of the dates reflected in the pro forma statements. In reviewing the pro forma statements, the reader should consider the following: 1. The historical amounts of VERO were compiled to conform, as closely as possible, to the fiscal year of the Company. The historical income statement for VERO covers the twelve month period beginning January 1 through December 31. For pro forma purposes, the VERO income statement has been adjusted to cover the twelve month period beginning July 1, 1996 through June 30, 1997. 2. The following pro forma financial statements do not reflect any adjustments for the various synergies or cost reductions the Company expects to achieve as a result of the acquisition. 6 APPLIED POWER INC. AND VERO GROUP PLC UNAUDITED PRO FORMA COMBINED STATEMENT OF EARNINGS

See Notes to Unaudited Pro Forma Combined Financial Statements 7 APPLIED POWER INC. AND VERO GROUP PLC UNAUDITED PRO FORMA COMBINED STATEMENT OF EARNINGS

See Notes to Unaudited Pro Forma Combined Financial Statements 8 APPLIED POWER INC. AND VERO GROUP PLC UNAUDITED PRO FORMA COMBINED BALANCE SHEET

See Notes to Unaudited Pro Forma Combined Financial Statements 9 APPLIED POWER INC. AND VERO GROUP PLC NOTES TO UNAUDITED PRO FORMA COMBINED FINANCIAL STATEMENTS NOTE 1--PERIODS COMBINED The Company's consolidated statements of earnings for the six months ended February 28, 1998 (unaudited) and for the fiscal year ended August 31, 1997, have been combined with the VERO consolidated statements of income for the six months ended December 31, 1997 and for the twelve months ended June 30, 1997 (both unaudited) respectively. The Company's February 28, 1998 unaudited consolidated balance sheet has been combined with VERO's December 31, 1997 audited consolidated balance sheet. On April 6, 1998, the Company and ZERO Corporation ("ZERO") jointly announced that they had entered a definitive strategic merger agreement in which a newly created subsidiary of the Company will be merged into ZERO. Under the terms of the merger, ZERO stockholders will receive .85 shares of the Company's common stock for each share of ZERO common stock. Approved by the boards of directors of both companies, consummation of the Merger is subject to approval by the stockholders of both companies and satisfaction of certain other conditions. The Merger would be accounted for as a pooling of interests and is expected to be completed in July 1998. The unaudited pro forma combined financial data for the six months ended February 28, 1998 includes the operating results of Versa Technologies, Inc. ("Versa/Tek"), which was acquired by the Company on October 6, 1997, for the period from September 1 to October 6, 1997 and the operating results of ZERO for the six months ended December 31, 1997. The unaudited pro forma combined financial data for the year ended August 31, 1997 includes the operating results of Everest Electronics Equipment, Inc. ("Everest"), which was acquired by the Company on September 26, 1996, for the period from September 1 to September 26, 1996, and the operating results of Versa/Tek and ZERO for their respective twelve months ended June 30, 1997. The operating results of Versa/Tek and Everest subsequent to their acquisition dates, are included in the Company's historic results (presented in the first column of the accompanying combined financial statements) for the six months ended February 28, 1998 and the year ended August 31, 1997. VERO's reporting currency is the pound sterling and its financial information in the accompanying pro forma combined financial statements has been translated to the U.S. dollar in accordance with Statement of Financial Accounting Standards No. 52, "Foreign Currency Translation." VERO's historic financial statements are prepared in accordance with generally accepted accounting principles in the United Kingdom ("UK GAAP"), however, VERO's financial information in the accompanying pro forma combined financial statements has been adjusted to conform with generally accepted accounting principles in the United States ("US GAAP"). The only material adjustment required to conform with US GAAP related to goodwill. Under UK GAAP purchased goodwill may be written off on acquisition directly against reserves. Under US GAAP goodwill is capitalized and amortized by charges against income over the period during which it is estimated it will be of benefit subject to a maximum of 40 years. Accordingly, goodwill, net of amortization, was recorded in the pro forma combined balance sheet at February 28, 1998 and the related amortization expense included in the pro forma combined statements of earnings for the six months ended February 28, 1998 and the twelve months ended August 31, 1997. 10 NOTE 2--PRO FORMA NET EARNINGS PER SHARE The unaudited pro forma combined net earnings per common share and per common and equivalent share is based upon the weighted average number of common and equivalent shares of API and ZERO outstanding for each period at the Exchange Ratio of 0.85 shares of API Common Stock for each share of ZERO Common Stock. NOTE 3--RECLASSIFICATIONS (ZERO) Certain reclassifications, none of which affect income from continuing operations, have been made to the ZERO statements of income in the pro forma combined statements of earnings to conform classifications of "Amortization of intangible assets" and to ZERO's balance sheet in the pro forma combined balance sheet to conform classifications of "Other intangibles." NOTE 4--PRO FORMA ADJUSTMENTS (VERSA/TEK) The following pro forma adjustments are incorporated in the pro forma condensed consolidated statement of earnings for the six months ended February 28, 1998 as a result of the Versa/Tek acquisition.

NOTE 5--PRO FORMA ADJUSTMENTS (VERO) The following pro forma adjustments are incorporated in the pro forma condensed consolidated statement of earnings for the six months ended February 28, 1998 as a result of the VERO acquisition.

NOTE 6--PRO FORMA ADJUSTMENTS (EVEREST) The following pro forma adjustments are incorporated in the pro forma condensed consolidated statement of earnings for the year ended August 31, 1997 as a result of the Everest acquisition.

11 NOTE 7--PRO FORMA ADJUSTMENTS (VERSA/TEK) The following pro forma adjustments are incorporated in the pro forma condensed consolidated statement of earnings for the year ended August 31, 1997 to reflect a full year of Eder Industries in Versa/Tek (Eder was acquired by Versa/Tek on October 31, 1996).

The following pro forma adjustments are incorporated in the pro forma condensed consolidated statement of earnings for the year ended August 31, 1997 as a result of the Versa Tek acquisition.

NOTE 8--PRO FORMA ADJUSTMENTS (VERO) The following pro forma adjustments are incorporated in the pro forma condensed consolidated statement of earnings for API's year ended August 31, 1997 as a result of the VERO acquisition.

12 NOTE 9--PRO FORMA ADJUSTMENTS (VERO) (a) The following pro forma adjustments are incorporated in the pro forma combined balance sheet at February 28, 1998 as a result of the VERO acquisition.

(b) The following pro forma adjustments are made to reflect estimated fair value adjustments and to eliminate the investment in VERO:

Because of the proximity of the transaction, API has not had adequate time to complete its evaluation of the fair value of the net assets acquired in the VERO transaction. As a result, no fair value adjustments have been reflected in these pro forma statements. NOTE 10--SPECIAL ITEM (ZERO) Other Income--net for the six months ended December 31, 1997 includes life insurance proceeds of $1,709 ($0.14 per share). NOTE 11--INCOME TAX EXPENSE Effective tax rates are higher than the statutory federal income tax rates primarily due to state income taxes, net of federal benefit. 13 APPLIED POWER INC. EXHIBIT INDEX TO FORM 8-K CURRENT REPORT Date of Report: June 5, 1998

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