UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, DC 20549
FORM 8-K
CURRENT REPORT PURSUANT TO SECTION 13 OR 15 (d) OF
THE SECURITIES EXCHANGE ACT OF 1934
July 31, 2002
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DATE OF REPORT (DATE OF EARLIEST EVENT REPORTED)
COMMISSION FILE NUMBER 1-11775
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TIMCO Aviation Services, Inc.
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(Exact Name Of Registrant As Specified In Its Charter)
Delaware 65-0665658
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(State Or Other Jurisdiction Of (IRS Employer
Incorporation Or Organization) Identification No.)
623 Radar Road
Greensboro, N.C. 27410
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(Address Of Principal Executive Offices)
(336) 668-4410 x 3004
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(Registrant's Telephone Number,
Including Area Code
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(Former Name Or Former Address,
If Changed Since Last Report)
ITEM 2. DISPOSITION OF ASSETS.
Effective July 31, 2002 ("Closing Date"), TIMCO Aviation Services, Inc.
("Company") completed the sale of substantially all of the assets and business
of its Aerocell Structures ("Aerocell") operation to Airborne Nacelle Services,
Inc., a subsidiary of Triumph Group, Inc. ("Purchaser"). Aerocell was a flight
surfaces repair operation based in Hot Springs, Arkansas. The net sales price
was $9.6 million, $500,000 of which was placed in an escrow account to be
disbursed in the manner set forth below and the balance of which was paid in
cash at closing. The Company retained all of the Closing Date liabilities of the
Aerocell operation, estimated to be approximately $500,000.
The Company used the net proceeds from the sale of Aerocell to repay $7
million of senior term debt and will use the balance of the net proceeds for
general working capital purposes. The senior term debt which was repaid
consisted of: (i) $3.5 million due to the Company's senior revolving credit and
term lenders; (ii) $2.5 million due to Bank of America, N.A. (which term debt
had been due on August 14, 2002 and as to which Robert Alpert, a former director
and a former principal stockholder of the Company, had provided a limited
guaranty); and (iii) $1.0 million due to Ben Quevedo, a director of the Company.
After completion of the Aerocell sale and repayment of the senior term debt
described above, the Company has $8.5 million of senior term debt outstanding,
$5.0 million of which is due on January 31, 2004 and $3.5 million of which is
due in quarterly principal installments of $500,000, with the first installment
due on September 30, 2002 and the remaining unpaid principal balance due on
January 31, 2004.
Pursuant to an Asset Purchase Agreement, dated as of July 31, 2002,
between the Company, its subsidiary, Aerocell Structures, Inc. and the Purchaser
("Agreement"), the Company has agreed that the value of the Aerocell assets at
the Closing Date will be at least $11,743,465. The Agreement provides procedures
relating to the determination of the Closing Date value of the Aerocell assets
and calls for a payment to the Purchaser (on a dollar for dollar basis) if the
Closing Date value of the Aerocell assets is lower than the targeted amount.
The Agreement also provides that the funds in escrow are being held to
support certain indemnification obligations, as provided in the Agreement, and,
provided that no claims for indemnity have been asserted, $250,000 of the funds
being held in escrow will be released six months after the Closing Date and the
balance of the funds being held in escrow will be released one year after the
Closing Date. The Agreement further provides that the Company will receive
certain rebates in the future for work which the Company helps procure for the
Purchaser. However, before any such amounts are payable under this rebate, the
Purchaser will receive a credit to the extent that certain specified inventory
of Aerocell is not sold within one year following the Closing Date. There is
also additional inventory of Aerocell as to which the Company will have to pay
up to $200,000 in cash one year from the closing if that inventory has not been
sold or consumed by that date.
A copy of the Agreement is attached as Exhibit 2.1 to this Current Report
on Form 8-K and is incorporated herein by reference. A copy of the press release
issued by the Company reporting the completion of the Aerocell sale is attached
as Exhibit 99.1 to this Current Report on Form 8-K and is incorporated herein by
reference.
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ITEM 7. FINANCIAL STATEMENTS, PRO FORMA FINANCIAL INFORMATION AND EXHIBITS.
(c) Exhibits.
Exhibit No. Description
2.1 Asset Purchase Agreement, dated as of July 31, 2002, by and among
Airborne Nacelle Services, Inc., Aerocell Structures, Inc. and TIMCO
Aviation Services, Inc.
99.1 Press Release issued August 5, 2002 announcing the completion of the
sale of the assets of the Aerocell Structures operation.
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SIGNATURE
Pursuant to the requirements of the Securities Exchange Act of 1934, the
Registrant has caused this report to be signed on its behalf by the undersigned,
thereunto duly authorized, this 7th day of August, 2002.
TIMCO AVIATION SERVICES, INC.
/s/ C. Robert Campbell
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C. Robert Campbell
Executive Vice President and CFO
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EXHIBIT INDEX
Exhibit No. Description
2.1 Asset Purchase Agreement, dated as of July 31, 2002, by and among
Airborne Nacelle Services, Inc., Aerocell Structures, Inc. and TIMCO
Aviation Services, Inc.
99.1 Press Release issued August 5, 2002 announcing the completion of the
sale of the assets of the Aerocell Structures operation.