-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, FOM2+DomiK3547L9NU9NrXIvTwq+YDzHIbBgSsKaYFmKPd1xWv6HQeiBNvEk6fw5 JKFRcOpJ+/I8oZS3agN1Bw== 0000894579-00-000057.txt : 20000517 0000894579-00-000057.hdr.sgml : 20000517 ACCESSION NUMBER: 0000894579-00-000057 CONFORMED SUBMISSION TYPE: 10-Q PUBLIC DOCUMENT COUNT: 3 CONFORMED PERIOD OF REPORT: 20000331 FILED AS OF DATE: 20000515 FILER: COMPANY DATA: COMPANY CONFORMED NAME: INTERNATIONAL KNIFE & SAW INC CENTRAL INDEX KEY: 0001027909 STANDARD INDUSTRIAL CLASSIFICATION: CUTLERY, HANDTOOLS & GENERAL HARDWARE [3420] IRS NUMBER: 570697252 STATE OF INCORPORATION: DE FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 10-Q SEC ACT: SEC FILE NUMBER: 333-17305 FILM NUMBER: 636975 BUSINESS ADDRESS: STREET 1: 1299 COX AVENUE CITY: ERLANGER STATE: KY ZIP: 41018 BUSINESS PHONE: 6063710333 MAIL ADDRESS: STREET 1: 1299 COX AVENUE CITY: ERLANGER STATE: KY ZIP: 41018 10-Q 1 FORM 10Q FOR INTERNATIONAL KNIFE & SAW, INC. ================================================================================ UNITED STATES SECURITIES AND EXCHANGE COMMISSION WASHINGTON, D.C. 20549 FORM 10-Q (Mark One) [|X|] Quarterly Report Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934. For the quarterly period ended March 31, 2000 [ ] Transition Report Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934. For the transition period from ______ to _______ Commission file number: 333-17305 International Knife & Saw, Inc. (Exact name of registrant as specified in its charter) Delaware 57-0697252 (State or other jurisdiction of (I.R.S. Employer incorporation or organization) Identification No.) 1299 Cox Avenue Erlanger, Kentucky 41018 (Address of principal executive offices) (859) 371-0333 (Registrant's telephone number, including area code) Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes |X| No __ As of April 28, 2000, there were 481,971 shares of the registrant's common stock outstanding, all of which were owned by an affiliate of the registrant. ================================================================================ International Knife & Saw, Inc. and Subsidiaries Index Page No. Part I. Financial Information Item 1. Financial Statements Consolidated Balance Sheets 3 Consolidated Statements of Income 5 Consolidated Statements of Cash Flows 6 Notes to Consolidated Financial Statements 7 Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations 11 Item 3. Quantitative and Qualitative Disclosures about Market Risk 13 Part II. Other Information Item 1. Legal Proceedings 14 Item 2. Change in Securities 14 Item 3. Defaults Upon Senior Securities 14 Item 4. Submission of Matters to a Vote of Security Holders 14 Item 5. Other Information 14 Item 6. Exhibits and Reports on Form 8-K 14 (a) Exhibits (b) Reports on Form 8-K 14 Signatures 15 2 PART I - FINANCIAL INFORMATION Item 1. Financial Statements International Knife & Saw, Inc. and Subsidiaries Consolidated Balance Sheets (Unaudited)
March 31, December 31, 2000 1999 ------------------------------------- Assets (in thousands) Current assets: Cash and cash equivalents $ 2,836 $ 1,862 Accounts receivable, trade, less allowances for doubtful accounts of $1,977 and $1,856 30,266 25,620 Inventories 32,185 27,922 Due from parent 1,192 1,159 Other current assets 2,692 2,759 ------------------------------------- Total current assets 69,171 59,322 Other assets: Goodwill 16,578 17,015 Debt issuance costs 2,620 2,736 Other noncurrent assets 2,774 2,163 ------------------------------------- 21,972 21,914 Property, plant and equipment-net 49,637 46,382 ------------------------------------- Total assets $ 140,780 $ 127,618 =====================================
See accompanying notes. 3 International Knife & Saw, Inc. and Subsidiaries Consolidated Balance Sheets (Unaudited)
March 31, December 31, 2000 1999 --------------------------------------- (in thousands) Liabilities and shareholder's deficit Current liabilities: Notes payable $ 11,853 $ 4,362 Current portion of long-term debt 3,447 2,465 Accounts payable 13,013 13,007 Accrued liabilities 15,127 10,619 --------------------------------------- Total current liabilities 43,440 30,453 Long-term debt, less current portion 110,885 112,391 Other liabilities 9,966 6,557 --------------------------------------- Total liabilities 164,291 149,401 Minority interest 1,113 1,063 Shareholder's deficit: Common stock, no par value - authorized - 580,000 shares; issued - 526,904 shares; outstanding - 481,971 shares 5 5 Additional paid-in capital 10,153 10,153 Accumulated deficit (27,015) (25,898) Accumulated other comprehensive loss (4,335) (3,674) Treasury stock, at cost (3,432) (3,432) --------------------------------------- Total shareholder's deficit (24,624) (22,846) ======================================= Total liabilities and shareholder's deficit $ 140,780 $ 127,618 =======================================
See accompanying notes. 4 International Knife & Saw, Inc. and Subsidiaries Consolidated Statements of Income (Unaudited)
Quarter ended March 31, 2000 1999 ---------------------------------- (in thousands, except per share amounts) Net sales $ 43,663 $ 39,236 Cost of sales 31,409 27,576 ---------------------------------- Gross profit 12,254 11,660 Selling, general and administrative expenses 9,552 8,267 ---------------------------------- Operating income 2,702 3,393 Other expenses (income): Interest income (21) (23) Interest expense 3,104 3,167 Minority interest 66 54 ---------------------------------- 3,149 3,198 ---------------------------------- Income (loss) before income taxes (447) 195 Income tax provision 670 79 ================================== Net (loss) income $ (1,117) $ 116 ================================== Net (loss) income per common share $ (2.32) $ .24 See accompanying notes.
5 International Knife & Saw, Inc. and Subsidiaries Consolidated Statements of Cash Flows (Unaudited)
Quarter ended March 31, 2000 1999 ---------------------------- (in thousands) Operating activities Net (loss) income $ (1,117) $ 116 Adjustments to reconcile net (loss) income to net cash (used) provided by operating activities: Depreciation and amortization 1,935 1,729 Loss (gain) on sale of property, plant and equipment 16 (44) Minority interest in income of subsidiary 66 54 Changes in operating assets and liabilities, net of effects from purchases of operations: Accounts receivable (2,347) (1,847) Inventories 228 1,040 Accounts payable (710) 1,603 Accrued liabilities 401 3,481 Other 406 57 ---------------------------- Net cash (used) provided by operating activities (1,122) 6,189 Investing activities Purchases of operations, net of cash acquired (956) - Purchases of property, plant and equipment (2,071) (1,820) Proceeds from sale of property, plant and equipment 68 90 Decrease (increase) in notes receivable and other assets (3) 317 ---------------------------- Net cash used by investing activities (2,962) (1,413) Financing activities Decrease (increase) in amounts due to parent 33 (341) Increase in notes payable and long-term debt 9,997 7,857 Repayment of notes payable and long-term debt (4,822) (10,447) ---------------------------- Net cash provided (used) by financing activities 5,208 (2,931) Effect of exchange rates on cash and cash equivalents (150) (72) ---------------------------- Increase in cash and cash equivalents 974 1,773 Cash and cash equivalents at beginning of period 1,862 2,032 ---------------------------- Cash and cash equivalents at end of period $ 2,836 $ 3,805 ============================
See accompanying notes. 6 International Knife & Saw, Inc. and Subsidiaries Notes to Consolidated Financial Statements (Unaudited) (in thousands) 1. Basis of Presentation The unaudited interim consolidated financial statements contain all adjustments, consisting of normal recurring adjustments, which are, in the opinion of the management of International Knife & Saw, Inc. and its consolidated subsidiaries ("the Company"), necessary to present fairly the consolidated financial position and consolidated results of operations and cash flows of the Company. Results of operations for the periods presented are not necessarily indicative of the results for the full fiscal year. These financial statements should be read in conjunction with the audited consolidated financial statements and related notes included in the Company's Form 10-K for the year ended December 31, 1999. The consolidated balance sheet at December 31, 1999 has been derived from the audited consolidated financial statements at that date. Certain 1999 amounts have been reclassified to conform to the current year presentation. 2. Acquisitions In January 2000 the Company's German subsidiary acquired all of the shares of Boehler Miller Messer und Saegen GmbH ("BMMS"). BMMS is headquartered in Waidhofen, Austria. The purchase price consisted of 13,300 Austrian Schillings (approximately $956) in cash, net of cash acquired, and 63,000 Austrian Schillings (approximately $4,530) in assumed debt. The Company's lines of credit were increased in order to finance the cash payment. Additional consideration is contingent upon BMMS achieving certain annual earnings and would be payable in 2002. BMMS produces knives, saws and ground flats for the wood, paper and metal industries with annual sales of approximately 300,000 Austrian Schillings (approximately $21,600). The acquisition was accounted for under the purchase method. There was no goodwill on this acquisition. 3. Comprehensive Income The Company includes minimum pension liabilities and foreign currency translation adjustments in other comprehensive income. For the quarters ended March 31, 2000 and 1999, total comprehensive losses amounted to $1,778 and $1,262, respectively, including $661 and $1,378 of other comprehensive losses related to foreign currency translation adjustments. 7 International Knife & Saw, Inc. and Subsidiaries Notes to Consolidated Financial Statements (continued) (Unaudited) (in thousands) 4. Notes Payable and Long -Term Debt
March 31, December 31, 2000 1999 -------------------------------------- Notes payable: Notes payable on demand in German Marks to a German bank, issued under revolving credit agreements, interest payable quarterly $ 5,200 $ 1,347 Notes payable on demand in Chinese Yuan Renminbi to Chinese banks, issued under revolving credit agreements, interest payable monthly 1,628 1,765 Notes payable on demand in Austrian Schillings to Austrian banks 1,391 - Notes payable on demand in U.S. Dollars to a U.S. bank 775 - Notes payable on demand in U.S. Dollars to a German bank, issued under revolving credit agreements, interest payable quarterly 2,859 1,250 ====================================== $ 11,853 $ 4,362 ====================================== March 31, December 31, 2000 1999 -------------------------------------- Long-term debt: 11-3/8% Senior Subordinated Notes due 2006 $ 90,000 $ 90,000 Notes payable in German Marks to a German bank 15,543 16,399 Notes payable in Chinese Yuan Renminbi to Chinese banks 1,560 1,680 Capitalized lease obligations in U.S. dollars to U.S. lenders 3,984 4,261 Notes payable in Austrian Schillings to an Austrian bank 1,407 - Promissory note payable in Dutch Guilders to a former shareholder of the Diacarb Company 1,761 2,414 Other 77 102 -------------------------------------- 114,332 114,856 Less current portion 3,447 2,465 ====================================== $ 110,885 $ 112,391 ======================================
At March 31, 2000, the Company had committed global, multi-currency credit facilities of US $40,002. Unused committed lines of credit from these facilities were US $18,838, compared to US $16,801 at December 31, 1999. A facility fee of 0.25% per annum is charged on the unused portion of the U.S. dollar component of the facility. 8 International Knife & Saw, Inc. and Subsidiaries Notes to Consolidated Financial Statements (continued) (Unaudited) (in thousands) 5. Income Taxes IKS Corporation, of which the Company is a wholly-owned subsidiary, files a consolidated Federal income tax return which includes the Company. The Company's provision/benefit for income taxes includes U.S. federal, state, and local income taxes as well as non-U.S. income taxes in certain jurisdictions. The current and deferred tax provision and benefit for the Company are recorded as if it filed on a stand-alone basis. All participants in the consolidated income tax return are separately liable for the full amount of the taxes, including penalties and interest, if any, which may be assessed against the consolidated group. The current provision/benefit for United States income taxes is recorded to the intercompany account with IKS Corporation. The Company did not record a tax benefit related to the pre-tax losses in the United States for the quarter ended March 31, 2000, in accordance with income tax accounting rules. 6. Inventories March 31, December 31, 2000 1999 ---------------------------------------- Finished goods $ 18,841 $ 17,120 Work in process 5,652 5,088 Raw materials and supplies 7,692 5,714 ---------------------------------------- $ 32,185 $ 27,922 ======================================== 7. Organization The Company operates in one business segment - industrial knives and saws. The Company manufactures, markets and services primarily industrial knives and saws internationally, and its customers include distributors, original equipment manufacturers and customers purchasing replacement parts and services. The Company has a leading market share in each of the major sectors it serves: Paper & Packaging; Wood; Metal; and Plastic/Recycling. The Company's operations are principally in the United States, Germany and Austria, representing 50%, 20%, and 12% of 2000 net sales, respectively. The Company plans to continue its international growth. As a result of the Company's broad product range and numerous applications, no customer accounts for more than 3% of net sales. The Company performs periodic credit evaluations of its customers and generally does not require collateral. Sales attributable to German and Austrian operations are based on external sales generated by subsidiaries located in those countries. 9 International Knife & Saw, Inc. and Subsidiaries Notes to Consolidated Financial Statements (continued) (Unaudited) (in thousands) 7. Organization (continued) The following table summarizes the Company's United States, German, Austrian and other operations.
Quarter ended March 31, 2000 1999 - ----------------------------------------------------- ------------------------- ------------------------- United States Operations: Net sales - Customers $ 21,928 $ 22,639 Long Lived Assets 22,449 22,288 German Operations: Net sales - Customers $ 8,612 $ 9,049 Long Lived Assets 12,734 13,914 Austrian Operations: Net sales - Customers $ 5,392 $ - Long Lived Assets 4,012 - Other Operations: Net sales - Customers $ 7,731 $ 7,548 Long Lived Assets 11,055 12,173 Consolidated: Net sales $ 43,663 $ 39,236 Long Lived Assets 50,250 48,375
8. Subsequent Event On April 25, 2000, P. Daniel Miller, the Company's President and CEO, submitted his resignation to the Board of Directors of the Company effective May 1, 2000. The Company expects to incur approximately $400 in severance costs related to Mr. Miller's departure. These costs will be included in the results for the second quarter of 2000. As of that date, the Board of Directors established an executive committee comprised of Messrs. Thomas W.G. Meyer, Executive Vice President, Europe and Asia; William M. Schult, Executive Vice President-CFO, Treasurer and Secretary; Bradley H. Widmann, Vice President - Operations for the Americas; and Jeffrey H. Welday, Vice President of Sales and Marketing for the Americas. This committee is responsible for all operations of the Company and reports directly to the Board of Directors. 10 The Private Securities Litigation Reform Act of 1995 provides a "safe harbor" for certain forward looking statements. Certain matters discussed in this filing could be characterized as forward looking statements, such as statements relating to plans for future expansion, other capital spending, financing sources and effects of regulation and competition. Such forward looking statements involve important risks and uncertainties that could cause actual results to differ materially from those expressed in such forward looking statements. Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations The following discussion should be read in conjunction with the Consolidated Financial Statements and related notes included in the Company's Form 10-K as of and for each of the three years in the period ended December 31, 1999. General The Company is a global leader in the manufacturing, servicing and marketing of industrial and commercial machine knives and saws. The Company has been manufacturing knives and saws for nearly 100 years, beginning in Europe and expanding its presence to the United States in the 1960s. The Company operates on an international basis with facilities in North America, Europe, Asia and South America and products sold in over 75 countries. The Company offers a broad range of products, used for various applications in numerous markets. Presence outside the U.S. The Company's North American operations account for 58% of its net sales and 31% of its operating income for the first quarter of 2000. Its other international operations account for the remainder and are located primarily in Europe, 38% of first quarter net sales, and 61% of first quarter operating income, and Asia. The Company's operating results are subject to fluctuations in foreign currency exchange rates as well as the currency translation of its foreign operations into U.S. Dollars. The Company manufactures products in the U.S., Germany, Austria, Canada and China and exports products to more than 75 countries. The Company's foreign sales, the majority of which occur in European countries, are subject to exchange rate volatility. In addition, the Company consolidates German, Austrian, Dutch, French, Canadian, Mexican, Chinese and other Asian operations and changes in exchange rates relative to the U.S. Dollar have impacted financial results. As a result, a decline in the value of the U.S. Dollar relative to these other currencies can have a favorable effect on the profitability of the Company and an increase in the value of the U.S. Dollar relative to these other currencies can have a negative effect on the profitability of the Company. Comparing exchange rates for the first quarter of 2000 to the first quarter of 1999, there was a negative impact of $2.0 million on sales with a minimal impact on net income. In addition, in the first quarter of 2000 there was a decrease in shareholder's equity from December 31, 1999 due to a $.7 million change in foreign currency translation adjustment. To mitigate the short-term effect of changes in currency exchange rates on the Company's foreign currency based purchases and its functional currency based sales, the Company occasionally hedges its exposure by entering into foreign exchange and U.S. Dollar forward contracts to hedge a portion of its budgeted (future) net foreign exchange and U.S. Dollar transactions over periods ranging from one to six months. Results of Operations As used in the following discussion of the Company's results of operations, (i) the term "gross profit" means the dollar difference between the Company's net sales and cost of sales and (ii) the term "gross margin" means the Company's gross profit divided by its net sales. 11 First quarter ended March 31, 2000 compared to first quarter ended March 31, 1999 Net Sales: Net sales increased 11.3% to $43.7 million for the first quarter of 2000 from $39.2 million for the first quarter of 1999 primarily attributable to the acquisition of BMMS in January 2000. The Company experienced sales reductions in its North American operations (2.3% to $25.2 million) for the first quarter of 2000 compared to the same period in 1999 primarily attributable to continuing organizational issues. The Company has been addressing these organizational issues through several senior management changes including the hiring of a new CEO in May 1999. On April 25, 2000, P. Daniel Miller, the Company's President and CEO, resigned from the Company effective May 1, 2000. An executive committee was established comprised of four officers of the Company which reports directly to the Board of Directors. The Company experienced sales improvements (38.0% to $18.5 million) in its other operations for the first quarter of 2000 compared to the same period in 1999 primarily attributable to the BMMS acquisition. Gross Profit: Gross profit increased slightly to $12.3 for the first quarter of 2000 up from $11.7 million for the same period in 1999. Gross margin decreased to 28.1% for the first quarter of 2000 compared to 29.7% for the same period in 1999 primarily attributable to softness in the North American market caused by the factors noted above. The Company experienced gross profit declines in its North American operations (14.0% to $6.4 million) for the first quarter of 2000 compared to the same period in 1999 primarily attributable to the factors noted above. The Company experienced gross profit improvements (37.2% to $5.9 million) in its other operations for the first quarter of 2000 compared to the same period in 1999 primarily attributable to the BMMS acquisition in January 2000. Selling, General and Administrative Expenses: Selling, general and administrative expenses were $9.6 million for the first quarter of 2000 compared to $8.3 million for the same period in 1999. The increase is primarily attributable to the BMMS acquisition. Selling, general and administrative expenses increased to 21.9% from 21.1% of sales for the respective periods. Interest Expense, net: Net interest expense remained constant at $3.1 million for the first quarter of 2000 and for the same period in 1999 . Income Taxes: Due to pre-tax losses in the United States in the first quarter of 2000 for which the Company did not record the related current tax benefits in accordance with income tax accounting rules, and as a result of pre-tax income in the Company's other operations for which the Company recorded related tax provisions, the Company has recorded a consolidated provision for income tax on a consolidated pre-tax loss of $447,000. The Company's effective tax rate was 40.5% for the first quarter of 1999. The significant change in income taxes from 1999 is due to the above factors and significant changes in income contributions for the Company's operations in certain tax jurisdictions. 12 Liquidity and Capital Resources The Company's principal capital requirements are to fund working capital needs, to meet required debt and interest payments, and to complete planned maintenance and expansion expenditures. The Company anticipates that its operating cash flow, together with available borrowings of $18.8 million under existing credit facilities, will be sufficient to meet its capital requirements. As of March 31, 2000, the Company's total long term debt and shareholder's deficit was $114.3 million and $24.6 million, respectively. Net cash flow used in operations aggregated $1.1 million for the first quarter of 2000 compared to $6.2 million provided by operations for the same period in 1999. The decrease was primarily attributable to a $6.4 million increase in working capital and a $1.2 million decrease in net income compared to 1999. Cash used in investing activities for the first quarter of 2000 was $3.0 million compared to $1.4 million for the same period in 1999. The increased use of cash is primarily due to the BMMS acquisition. Cash provided by financing activities for the first quarter of 2000 was $5.2 million compared to cash used of $2.9 million for the same period in 1999. The increase in cash provided compared to the prior year is primarily due to increased net borrowings in 2000 compared to 1999 due to the BMMS acquisition. Item 3. Quantitative and Qualitative Disclosures about Market Risk Information required by Item 3 is included in Item 2 on page 11 of this Form 10-Q. 13 PART II. OTHER INFORMATION Item 1. Legal Proceedings The Company is from time to time involved in legal proceedings arising in the normal course of business. The Company believes there is no outstanding litigation which could have a material impact on its financial position or results of operations. Item 2. Change in Securities and Use of Proceeds None. Item 3. Defaults Upon Senior Securities None. Item 4. Submission of Matters to a Vote of Security Holders Not applicable. Item 5. Other Information None. Item 6. Exhibits and Reports on Form 8-K (a) Exhibits. Exhibit No. Description ------- ------------------------------------------------ 10.15 Summary of Permitted Indebtedness, Commitments from Banks, and Availability at March 31, 2000 27 Financial Data Schedule (b) Reports on Form 8-K None. 14 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, thereunto duly authorized. INTERNATIONAL KNIFE & SAW, INC. By: /s/ William M. Schult ------------------------------------------- William M. Schult Executive Vice President - Chief Financial Officer, Treasurer and Secretary (Principal Financial and Accounting Officer, and Executive Committee member) May 10, 2000 15 EXHIBIT INDEX Exhibit No. Description ------- ------------------------------------------------ 10.15 Summary of Permitted Indebtedness, Commitments from Banks, and Availability at March 31, 2000 27 Financial Data Schedule 16 EX-10.15 2 SUMMARY OF PERMITTED INDEBTEDNESS Summary of Permitted Indebtedness, Commitments from Banks, and Availability at March 31, 2000 (in thousands) Capitalized terms not otherwise defined in this summary are defined as in the Indenture. Pursuant to Section 4.10 of the Indenture between International Knife & Saw, Inc. (the "Company") and United States Trust Company of New York as Trustee, dated November 6, 1996, the Company shall not incur directly or indirectly any Indebtedness unless certain cash flow coverage ratios are achieved. This limitation, however, does not apply to Permitted Indebtedness. Permitted Indebtedness includes Indebtedness of the Company arising under the Senior Credit Facility and Indebtedness of IKS Klingelnberg GmbH and its Subsidiaries arising under the German Subsidiary Facilities, in an aggregate principal amount not to exceed at any time outstanding the greater of (x) $30,000, less any permanent reduction in commitments thereunder, and (y) the sum, at such time, of (i) 85% of the consolidated book value of net accounts receivable of the Company and the Restricted Subsidiaries and (ii) 60% of the consolidated book value of inventory of the Company and the Restricted Subsidiaries. According to the formula referred to above, Permitted Indebtedness at March 31, 2000 is equal to $42,884. The Company has commitments from banks in the amount of $40,002. These commitments are broken down as follows: Deutsche Bank AG has provided a $13,000 line of credit to International Knife & Saw, Inc. under the Senior Credit Facility. This facility was initially $20,000, but was modified and partially replaced with the unsecured line of credit from the Fifth Third Bank of Northern Kentucky, Inc. As of March 31, 2000, $2,859 of the Senior Credit Facility was used and $10,141 was unused. Collateral for this facility includes inventories and accounts receivable. Covenants for this facility are described in the letter agreement with Deutsche Bank AG dated October 8, 1996. This letter agreement was filed by the Company in its Amended Registration Statement on Form S-4 filed with the Securities and Exchange Commission on January 28, 1997. Fifth Third Bank of Northern Kentucky, Inc. has provided an unsecured $1,500 line of credit to International Knife & Saw, Inc. This facility replaced a portion of the Senior Credit Facility. As of March 31, 2000, $775 of this facility was used and $725 was unused. Deutsche Bank AG has provided a DEM 68,000 ($33,275) line of credit to IKS Klingelnberg GmbH ("GmbH") under the German Subsidiary facilities. These facilities encompass a) a guarantee by Deutsche Bank AG of GmbH's promissory note in the amount of DEM 3,599 ($1,761) to a former owner of the Diacarb company (this debt has been incurred pursuant to section 4.10(b)(xiii) of the Indenture); b) assumed debt, for which GmbH serves as guarantor, in the amount of ATS 44,000 (approximately DEM 5,718 or $2,798) on the books of and in connection with GmbH's acquisition of Boehler Miller Messer und Saegen GmbH in January 2000; c) Indebtedness of GmbH which was outstanding on the Issue Date in the amount of approximately DEM 6,566 ($3,213); and d) a general line of credit in the amount of DEM 52,117 ($25,503). Of this general line of credit in the amount of DEM 52,117 ($25,503), as of March 31, 2000, DEM 35,826 ($17,531) of the facility was used and DEM 16,291 ($7,972) was unused. Collateral and covenants for this facility are described in the letter agreement with Deutsche Bank AG dated October 8, 1996. This letter agreement was filed by the Company in its Amended Registration Statement on Form S-4 filed with the Securities and Exchange Commission on January 28, 1997. 2 EX-27 3 FINANCIAL DATA SCHEDULE
5 OTHER DEC-31-2000 JAN-01-2000 MAR-31-2000 2,836,000 0 32,243,000 1,977,000 32,185,000 69,171,000 84,280,000 (34,643,000) 140,780,000 43,440,000 0 0 0 5,000 (24,629,000) 140,780,000 43,663,000 43,663,000 31,409,000 31,409,000 9,552,000 0 3,104,000 (447,000) 670,000 (1,117,000) 0 0 0 (1,117,000) (2.32) (2.32)
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