SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 8-K/A No. 1
CURRENT REPORT
PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES AND EXCHANGE ACT OF 1934
December 4, 2002
Date of Report (Date of earliest event reported)
STAKE TECHNOLOGY LTD.
(Exact name of registrant as specified in its charter)
CANADA 0-9989 Not Applicable
(Jurisdiction of Incorporation) (Commission File No.) (IRS Employer
I.D. Number)
2838 Highway 7
Norval, Ontario L0P 1K0, Canada
(Address of Principle Executive Offices)
(905) 455-1990
(Registrant's telephone number, including area code)
Item 7 (a) and (b) Financials Statements is amended in its entirety as follows:
Item 7. Financial Statements and Exhibits
(a) Financial statements of Opta Food Ingredients, Inc. ("Opta"), the
business being acquired, for the year ended December 31, 2001 and
the nine months ended September 30, 2002 are incorporated herein by
reference to Opta's Form 10-K for the year ended December, 2001 and
Opta's Form 10-Q for the nine months ended September 30, 2002,
respectively, copies of which are attached hereto.
(b) Pro Forma Consolidated Financial Statements
We have presented below unaudited pro forma financial information that
reflects the purchase method of accounting. We have included this information to
give you a better picture of what the combined results of operations and
financial position of Stake Technology Ltd. (the "Company") and Opta might have
been had the transaction occurred on an earlier date. The following unaudited
pro forma consolidated financial statements give effect to the acquisition by
the Company of 100% of the common shares of Opta to be accounted for by the
purchase method, as follows:
1. the unaudited pro forma consolidated balance sheet as at September
30, 2002 gives effect to the acquisition as if it had occurred on
that date;
2. the unaudited pro forma consolidated statements of operations for
the nine months ended September 30, 2002 and the year ended December
31, 2001 gives effect to the acquisition as if it had occurred on
January 1, 2001.
We are providing this information for illustrative purposes only. It does
not necessarily reflect what the results of operations or financial position of
the combined companies would have been if the transaction had actually occurred
on the dates above. The pro-forma adjustments are based on preliminary
estimates, available information and certain assumptions that may be revised as
additional information becomes available. Since Stake and Opta were not under
common control or management for all periods, historical combined results may
not be comparable to, or indicative of future performance.
This information does not reflect (1) the effect of any operating income
improvements that we may achieve by combining our companies, and (2) costs
associated with the combining of our companies that we cannot presently
estimate.
Stake Technology Ltd.
Unaudited Pro Forma Consolidated Balance Sheet
As at September 30, 2002
In thousands of U.S. dollars
Stake Opta Food Pro Forma Pro Forma
Technology Ltd Ingredients, Adjustments
Inc.
Assets $ $ $ $
(see note 2)
Cash and cash equivalents 6,808 8,466 (6,543) 8,731
Accounts receivable - trade 13,827 3,717 -- 17,544
Current portion of note receivable 1,362 -- -- 1,362
Inventories 13,958 5,690 -- 19,648
Other receivables and prepaid expenses 1,299 361 (43) 1,617
Future income taxes 1,462 -- -- 1,462
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38,716 18,234 (6,586) 50,364
Property, plant and equipment, net 31,108 21,549 (21,549) 31,108
Assets held for sale -- -- 5,020 5,020
Goodwill and intangibles, net 11,943 1,475 (1,475) 11,943
Future income taxes -- -- 10,048 10,048
Other assets 1,227 1,176 (147) 2,256
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82,994 42,434 (14,689) 110,739
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Liabilities
Bank indebtedness 1,464 -- -- 1,464
Accounts payable and accrued liabilities 13,895 2,506 1,400 17,801
Other current liabilities -- -- 1,871 1,871
Current portion of long-term debt 2,279 1,782 15,186 19,247
Current portion of long-term payables 412 -- -- 412
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18,050 4,288 18,457 40,795
Long-term debt 13,117 -- 4,684 17,801
Long-term payables 1,470 -- -- 1,470
Future income taxes 1,790 -- -- 1,790
34,427 4,288 23,141 61,856
Shareholders' Equity
Capital stock 37,680 113 (113) 37,680
Contributed surplus 2,914 78,855 (78,539) 3,230
Retained earnings 6,963 (40,720) 40,720 6,963
Currency translation adjustment 1,010 (102) 102 1,010
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48,567 38,146 (37,830) 48,883
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82,994 42,434 (14,689) 110,739
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Stake Technology Ltd.
Unaudited Pro Forma Consolidated Statements of Operations
For the nine months ended September 30, 2002
In thousands of U.S. dollars, except per share amounts
Stake Technology Opta Food Pro Forma Pro Forma
Ltd. Ingredients, Inc. Adjustments
$ $ $ $
Revenues 87,605 21,087 -- 108,692
Cost of goods sold 73,600 15,637 (1,916)(3a) 87,321
--------------------------------------------------------------------------------------
Gross profit 14,005 5,450 1,916 21,371
Selling, general and `
administrative expenses 9,416 3,481 (225)(3a) 12,672
Research and development -- 1,302 -- 1,302
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Earnings before the following 4,589 667 2,141 7,397
Interest expense (1,028) (104) (878)(3b) (2,010)
Interest and other income 233 126 -- 359
Foreign exchange gain 140 -- -- 140
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Earnings before income taxes 3,934 689 1,263 5,886
Provision for income taxes 680 -- 742(3c) 1,422
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Net earnings for the period 3,254 689 521 4,464
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Earning per share - Basic 0.08 0.11
- Diluted 0.07 0.10
Stake Technology Ltd.
Unaudited Pro Forma Consolidated Statements of Operations
For the year ended December 31, 2001
In thousands of U.S. dollars, except per share amounts
Stake Technology Opta Food Pro Forma Pro Forma
Ltd. Ingredients, Inc. Adjustments
$ $ $ $
Revenues 89,822 25,027 -- 114,849
Cost of goods sold 77,450 20,511 (2,725)(3a) 95,236
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Gross profit 12,372 4,516 2,725 19,613
Selling, general and administrative
expenses 10,667 4,926 (300)(3a) 15,293
Research and development 475 2,788 -- 3,263
Restructuring -- 161 -- 161
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Earnings (loss) before the following 1,230 (3,359) 3,025 896
Interest expense (1,939) (173) (1,171)(3b) (3,283)
Interest and other income 520 399 -- 919
Foreign exchange gain 355 85 -- 440
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Earnings (loss) before income taxes 166 (3,048) 1,854 (1,028)
Provision for (recovery of) income 146 -- (454)(3c) (308)
taxes
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Net earnings (loss) for the period 20 (3,048) 2,308 (720)
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Earnings per share - Basic 0.00 (0.02)
0.00
Stake Technology Ltd.
Notes to Unaduited Pro Forma Consolidated Financial Statements
In thousands of U.S. dollars
1. Basis of Presentation
These unaudited pro forma consolidated financial statements give effect to the
acquisition by the Company of 100% of the outstanding common shares of Opta.
These unaudited pro forma financial statements have been prepared by management
in accordance with generally accepted accounting principles in Canada and the
pro forma assumptions described below. In management's opinion, these pro forma
financial statements reflect all adjustments necessary to present fairly the pro
forma financial position and results of operations for such periods. There are
no significant differences between Canadian and U.S. GAAP in the preparation of
these pro forma financial statements.
The acquisition of the common shares of Opta by the Company has been accounted
for by the purchase method, which requires that the cost of the investment in
Opta be allocated to the underlying assets and liabilities of Opta based on
their fair values at the date of acquisition. The allocation of the purchase
cost to the assets and liabilities of Opta reflected in these pro forma
financial statements is based on preliminary estimates, available information
and management judgment and may be revised as additional information becomes
available.
2. Unaudited Pro Forma Consolidated Balance Sheet at September 30, 2002
To record the consolidation of Opta and elimination of the Company's investment
in Opta we have estimated the fair value of Opta's assets as of the balance
sheet date. The allocation price reflects valuation assessments of real estate
anticipated to be sold and the recording of Opta's previously unrecorded tax
loss carry forwards, the recoverability of which has been determined to be more
likely than not. Management has estimated that Opta's carrying value of
substantially all other assets and liabilities approximates their fair value.
The preliminary allocation of the purchase price is as follows:
$
Net working capital 15,685
Assets held for sale 5,020
Other assets 1,029
Future income tax 10,048
Long-term debt (1,782)
Integration costs (1,400)
------
28,600
------
Purchase price is comprised of:
Cash 6,543
Debt (tender Facility) 15,186
Due to Opta shareholders (7% @ 2.50) 1,871
Convertible Debenture and share purchase warrants 5,000
------
28,600
------
3. Unaudited Pro Forma Consolidated Statements of Operations
The unaudited pro forma consolidated statements of operations for the periods
ended September 30, 2002 and December 31, 2001 give effect to the following:
(a) Reduction of depreciation and amortization due to the write
down of property, plant and equipment and elimination of
goodwill and intangibles, resulting from the purchase price
allocation and fair value adjustments
(b) Interest expense associated with the tender facility at 3.42%,
assuming the balance is outstanding for the period, interest
expense on the convertible debenture at 5.5% plus accretion on
the discount on the convertible debenture relating to the
share purchase warrants and rights and higher net interest
expense assumed at a rate of 3%, due to the use of cash in the
acquisition of Opta.
(c) Tax provision calculated on the combined earnings (loss)
before tax of Opta and the related pro-forma adjustments at a
rate of 38%.
4. Earnings (Loss) per share
The pro forma earnings (loss) per share is based on the historic weighted
average number of common shares of 41,402,000 for the nine months ended
September 30, 2002 and 32,456,000 for the year ended December 31, 2001.
The pro forma diluted earning (loss) per share is based on the historic weighted
average number of common shares of 46,854,000 for the nine months ended
September 30, 2002.
(c) Exhibits:
Exhibit No. Description
----------- -----------
2.1 Agreement and Plan of Merger dated as of October 25,
2002 among Opta Food Ingredients Inc., Stake Technology
Ltd. and Stake Acquisition Corp. (incorporated by
reference to Exhibit (d)(1) to Purchaser's and the
Company's Schedule TO filed on November 4, 2002).
99.1 Press Release of Stake Technology Ltd. December 4, 2002
(incorporated by reference to Exhibit (a)(7)(i) to
Purhcaser's and the Company's Amendment No. 1 to
Schedule TO filed on December 4, 2002).
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
Registrant has duly caused this amendment to report to be signed on its behalf
by the undersigned hereunto duly authorized.
February 13, 2003 STAKE TECHNOLOGY LTD.
By: "Steven R. Bromley"
------------------------------------
Steven R. Bromley
Executive Vice President and
Chief Financial Officer