-----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, NITA+AmmEb0k4CVi4tE7+Nxqdo/f1HSv8GsdCX5F6tNuTx9UNej2TwoF+vUtZ3/E 3dRjZ7JMyUmwTIj5vS3wqQ== 0000950137-06-011473.txt : 20061026 0000950137-06-011473.hdr.sgml : 20061026 20061026163627 ACCESSION NUMBER: 0000950137-06-011473 CONFORMED SUBMISSION TYPE: 10-Q/A PUBLIC DOCUMENT COUNT: 5 CONFORMED PERIOD OF REPORT: 20060630 FILED AS OF DATE: 20061026 DATE AS OF CHANGE: 20061026 FILER: COMPANY DATA: COMPANY CONFORMED NAME: NEENAH FOUNDRY CO CENTRAL INDEX KEY: 0001040599 STANDARD INDUSTRIAL CLASSIFICATION: GLASS, GLASSWARE, PRESSED OR BLOWN [3220] IRS NUMBER: 391580331 STATE OF INCORPORATION: WI FISCAL YEAR END: 0930 FILING VALUES: FORM TYPE: 10-Q/A SEC ACT: 1934 Act SEC FILE NUMBER: 333-28751-03 FILM NUMBER: 061166291 BUSINESS ADDRESS: STREET 1: 2121 BROOKS AVE STREET 2: PO BOX 729 CITY: NEENAH STATE: WI ZIP: 54927 BUSINESS PHONE: 9207257000 MAIL ADDRESS: STREET 1: 2121 BROOKS AVE STREET 2: PO BOX 729 CITY: NEENAH STATE: WI ZIP: 54927 10-Q/A 1 c09432a1e10vqza.txt AMENDMENT TO QUARTERLY REPORT UNITED STATES SECURITIES AND EXCHANGE COMMISSION WASHINGTON, D.C. 20549 FORM 10-Q/A (AMENDMENT NO. 1) [X] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the quarterly period ended June 30, 2006 OR [ ] 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 333-28751 NEENAH FOUNDRY COMPANY (Exact name of registrant as specified in its charter) Wisconsin 39-1580331 (State or other jurisdiction of (IRS Employer ID Number) incorporation or organization) 2121 Brooks Avenue, P.O. Box 729, Neenah, Wisconsin 54957 (Address of principal executive offices) (Zip Code) (920) 725-7000 (Registrant's telephone number, including area code) None (Former name, former address and former fiscal year, if changed since last report) 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 Exchange Act of 1934 during the preceding 12 months (or for such shorter periods 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 [ ] Indicate by check mark whether the registrant is a large accelerated filer, an accelerated flier, or a non-accelerated filer. See definition of "accelerated filer and large accelerated filer" in Rule 12b-2 of the Exchange Act. (Check one): Large accelerated filer [ ] Accelerated Filer [ ] Non-accelerated filer [X] Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes [ ] No [X] Indicate by check mark whether the registrant has filed all documents and reports required to be filed by Sections 12, 13 or 15(d) of the Securities Exchange Act of 1934 subsequent to the distribution of securities under a plan confirmed by a court. Yes [X] No [ ] Indicate the number of shares outstanding of each of the issuer's classes of common stock, as of the latest practicable date. On July 31, 2006, the registrant had 1,000 shares of Common Stock, par value $100 per share, outstanding, all of which were owned by NFC Castings, Inc., a wholly owned subsidiary of ACP Holding Company. NEENAH FOUNDRY COMPANY Form 10-Q Index For the Quarter Ended June 30, 2006
Page ---- Part I. Financial Information Item 1. Financial Statements Condensed consolidated balance sheets -- Neenah Foundry Company as of June 30, 2006 and September 30, 2005 3 Condensed consolidated statements of operations -- Neenah Foundry Company for the three and nine months ended June 30, 2006 and 2005 4 Condensed consolidated statements of cash flows -- Neenah Foundry Company for the nine months ended June 30, 2006 and 2005 5 Notes to condensed consolidated financial statements -- June 30, 2006 6 Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations 15 Item 3. Quantitative and Qualitative Disclosures About Market Risk 21 Item 4. Controls and Procedures 21 Part II. Other Information Item 6. Exhibits 22 Signatures 23
EXPLANATORY NOTE This amended report on Form 10-Q (the "Amended Report") is being filed to amend Items 1 and 2 in Part I to make corrections to the financial statements and other financial information for the prior year periods in the Company's Quarterly Report on Form 10-Q for the quarter ended June 30, 2006 that was filed on August 11, 2006 (the "Original Report"). The Original Report has been amended to reflect the Company's prior election [in the third quarter of fiscal 2005] to change its tax method of determining LIFO inventory resulting in a tax benefit of $2.679 million. The effect is to increase previously reported fiscal 2005 third quarter net income by $2.679 million. The Company previously reported this change in footnote 12 to the Company's consolidated financial statements included in its Annual Report on Form 10-K for the fiscal year ended September 30, 2005. This Amended Report sets forth the content of the Original Report in its entirety, except for the changes noted above to the Original Report. This Amended Report continues to speak as of the date of the Original Report. We have not updated the disclosures contained in this Amended Report to reflect any events that occurred at a date subsequent to the filing of the Original Report. The filing of this Amended Report is not a representation that any statements contained in the Original Report or this Amended Report are true or complete as of any date subsequent to the date of the Original Report. The revision does not affect the remaining information set forth in the Original Report, the remaining provisions of which have not been amended. 2 NEENAH FOUNDRY COMPANY PART I. FINANCIAL INFORMATION Item 1. FINANCIAL STATEMENTS CONDENSED CONSOLIDATED BALANCE SHEETS (In thousands, except share and per share amounts)
June 30, September 30, 2006 2005(1) --------- ------------- (Unaudited) ASSETS Current assets: Cash ................................................. $ - $ 3,484 Accounts receivable, net ............................. 86,826 85,795 Inventories .......................................... 66,342 59,123 Deferred income taxes ................................ 3,304 3,304 Other current assets ................................. 7,299 6,897 --------- --------- Total current assets ....................... 163,771 158,603 Property, plant and equipment .......................... 126,640 113,398 Less accumulated depreciation .......................... 31,725 22,148 --------- --------- 94,915 91,250 Deferred financing costs, net .......................... 1,819 2,192 Identifiable intangible assets, net .................... 63,853 69,192 Goodwill ............................................... 86,699 86,699 Other assets ........................................... 4,710 4,619 --------- --------- $ 415,767 $ 412,555 ========= ========= LIABILITIES AND STOCKHOLDER'S EQUITY Current liabilities: Accounts payable ..................................... $ 31,651 $ 30,305 Income taxes payable ................................. 4,527 5,562 Accrued wages and employee benefits .................. 12,486 16,586 Accrued interest ..................................... 243 7,134 Other accrued liabilities ............................ 2,938 2,411 Current portion of long-term debt .................... 43,599 33,668 --------- --------- Total current liabilities .................. 95,444 95,666 Long-term debt ......................................... 237,947 238,086 Deferred income taxes .................................. 23,759 23,759 Postretirement benefit obligations ..................... 10,637 10,404 Other liabilities ...................................... 22,008 27,287 --------- --------- Total liabilities .......................... 389,795 395,202 Commitments and contingencies STOCKHOLDER'S EQUITY: Common stock, par value $100 per share -- authorized, issued and outstanding 1,000 shares ........... 100 100 Capital in excess of par value ......................... 5,429 5,429 Retained earnings ...................................... 26,969 18,350 Accumulated other comprehensive loss ................... (6,526) (6,526) --------- --------- Total stockholder's equity ................. 25,972 17,353 --------- --------- $ 415,767 $ 412,555 ========= =========
See notes to condensed consolidated financial statements. (1) The balance sheet as of September 30, 2005 has been derived from the audited financial statements as of that date but does not include all of the information and footnotes required by U.S. generally accepted accounting principles for complete financial statements. 3 NEENAH FOUNDRY COMPANY CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS (Unaudited) (In thousands)
Three Months Ended Nine Months Ended June 30, June 30, ------------------------ ------------------------ 2006 2005 2006 2005 --------- --------- --------- --------- Net sales ..................................... $ 147,724 $ 145,685 $ 399,951 $ 399,076 Cost of sales ................................. 117,773 114,338 329,691 328,101 --------- --------- --------- --------- Gross profit .................................. 29,951 31,347 70,260 70,975 Selling, general and administrative expenses .. 8,737 8,884 25,893 25,168 Litigation settlement ......................... - 6,500 - 6,500 Amortization of intangible assets ............. 1,780 1,778 5,339 5,341 Loss (gain) on disposal of equipment .......... (11) 104 (19) 103 --------- --------- --------- --------- Total operating expenses ...................... 10,506 17,266 31,213 37,112 --------- --------- --------- --------- Operating income .............................. 19,445 14,081 39,047 33,863 Net interest expense .......................... (8,362) (8,328) (24,910) (25,128) --------- --------- --------- --------- Income before income taxes .................... 11,083 5,753 14,137 8,735 Income tax provision (benefit) ................ 4,241 (377) 5,518 818 --------- --------- --------- --------- Net income .................................... $ 6,842 $ 6,130 $ 8,619 $ 7,917 ========= ========= ========= =========
See notes to condensed consolidated financial statements. 4 NEENAH FOUNDRY COMPANY CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (Unaudited) (In thousands)
Nine Months Ended June 30, ---------------------- 2006 2005 -------- -------- OPERATING ACTIVITIES Net income ......................................................... $ 8,619 $ 7,917 Adjustments to reconcile net income to net cash provided by operating activities: Depreciation and amortization ................................... 15,042 13,944 Amortization of deferred financing costs and discount on notes .. 1,561 1,573 Changes in operating assets and liabilities ..................... (23,942) (8,615) -------- -------- Net cash provided by operating activities .................. 1,280 14,819 INVESTING ACTIVITIES Purchase of property, plant and equipment .......................... (13,368) (11,499) -------- -------- Net cash used in investing activities ...................... (13,368) (11,499) FINANCING ACTIVITIES Net change in revolver balance ..................................... 9,792 732 Proceeds from long-term debt ....................................... 1,244 - Payments on long-term debt and capital lease obligations ........... (2,432) (3,901) Debt issuance costs ................................................ - (151) -------- -------- Net cash provided by (used in) financing activities ........ 8,604 (3,320) -------- -------- Decrease in cash ................................................... (3,484) - Cash at beginning of period ........................................ 3,484 - -------- -------- Cash at end of period .............................................. $ - $ - ======== ========
See notes to condensed consolidated financial statements. 5 NEENAH FOUNDRY COMPANY NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Unaudited) (In thousands) NOTE 1 -- BASIS OF PRESENTATION The accompanying unaudited condensed consolidated financial statements have been prepared in accordance with U.S. generally accepted accounting principles for interim financial information and the instructions to Form 10-Q and Article 10 of Regulation S-X. Accordingly, they do not include all the information and footnotes required by U.S. generally accepted accounting principles for complete financial statements. In the opinion of management, all adjustments (consisting of normal and recurring adjustments) considered necessary for a fair presentation have been included. Operating results for the nine months ended June 30, 2006 are not necessarily indicative of the results that may be expected for the year ending September 30, 2006. For further information, refer to the consolidated financial statements and footnotes thereto included in Neenah Foundry Company's Annual Report on Form 10-K for the year ended September 30, 2005. NOTE 2 -- INVENTORIES The components of inventories are as follows:
June 30, September 30, 2006 2005 ------- ------------- Raw materials ......................... $ 6,499 $ 6,905 Work in process and finished goods .... 43,658 37,088 Supplies .............................. 16,185 15,130 ------- ------- $66,342 $59,123 ======= =======
NOTE 3 -- RECENT ACCOUNTING PRONOUNCEMENTS On December 16, 2004, the Financial Accounting Standards Board (FASB) issued FASB Statement No. 123 (revised 2004), Share-Based Payment, which is a revision of FASB Statement No. 123, Accounting for Stock-Based Compensation. Statement 123(R) supersedes APB Opinion No. 25, Accounting for Stock Issued to Employees, and amends FASB Statement No. 95, Statement of Cash Flows. Generally, the approach in Statement 123(R) is similar to the approach described in Statement 123. However, Statement 123(R) requires all share-based payments to employees, including grants of employee stock options, to be recognized in the income statement based on their fair values. Pro forma disclosure is no longer an alternative. The Company adopted Statement 123(R) on October 1, 2005. The adoption of Statement 123(R) did not have an impact on the Company's results of operations or financial position as the Company has no stock-based compensation plans. In June 2006, the Financial Accounting Standards Board (FASB) issued Financial Interpretation No. (FIN) 48, "Accounting for Uncertainty in Income Taxes," which clarifies the accounting for uncertainty in income taxes recognized in an enterprise's financial statements in accordance with FASB Statement No. 109, "Accounting for Income Taxes." The interpretation prescribes a recognition threshold and measurement attribute for the financial statement recognition and measurement of a tax position taken or expected to be taken in a tax return. The Company is required to adopt FIN 48 beginning in fiscal year 2008 and is currently evaluating the impact that the adoption of FIN 48 will have on its consolidated financial statements and notes thereto. 6 NOTE 4 -- EMPLOYEE BENEFIT PLANS COMPONENTS OF NET PERIODIC BENEFIT COST The Company has five defined-benefit pension plans covering the majority of its hourly employees and also sponsors unfunded defined benefit postretirement health care plans covering substantially all salaried and hourly employees and their dependents. Components of net periodic benefit costs are as follows for the three and nine months ended June 30, 2006 and 2005 (in thousands):
Pension Benefits Postretirement Benefits -------=------------------- --------------------------- Three Months Ended June 30, Three Months Ended June 30, --------------------------- --------------------------- 2006 2005 2006 2005 ------- ------- ------- ------- Service cost .......................... $ 668 $ 535 $ 68 $ 75 Interest cost ......................... 1,051 1,066 160 137 Expected return on plan assets ........ (1,140) (1,194) - - Amortization of prior service credit .. - - (10) (6) Recognized net actuarial loss (gain) .. 5 - (108) (7) ------- ------- ------- ------- Net periodic benefit cost ............. $ 584 $ 407 $ 110 $ 199 ======= ======= ======= =======
Pension Benefits Postretirement Benefits -------------------------- -------------------------- Nine Months Ended June 30, Nine Months Ended June 30, -------------------------- -------------------------- 2006 2005 2006 2005 ------- ------- ------- ------- Service cost .......................... $ 2,003 $ 1,508 $ 202 $ 225 Interest cost ......................... 3,154 2,833 480 413 Expected return on plan assets ........ (3,421) (2,993) - - Amortization of prior service credit .. - - (30) (19) Recognized net actuarial loss (gain) .. 16 - (322) (23) ------- ------- ------- ------- Net periodic benefit cost ............. $ 1,752 $ 1,348 $ 330 $ 596 ======= ======= ======= =======
EMPLOYER CONTRIBUTIONS For the nine months ended June 30, 2006, $6,900 of contributions have been made to the defined-benefit pension plans. The Company presently anticipates making no additional contributions to its pension plans in fiscal 2006. 7 NOTE 5 -- GUARANTOR SUBSIDIARIES The following tables present condensed consolidating financial information as of June 30, 2006 and September 30, 2005 and for the three and nine months ended June 30, 2006 and 2005 for: (a) Neenah Foundry Company ("Neenah") and (b) on a combined basis, the guarantors of the 11% Senior Secured Notes due 2010 and 13% Senior Subordinated Notes due 2013, which include all of the wholly owned subsidiaries of Neenah (Subsidiary Guarantors). Separate financial statements of the Subsidiary Guarantors are not presented because the guarantors are jointly, severally and unconditionally liable under the guarantees, and the Company believes separate financial statements and other disclosures regarding the Subsidiary Guarantors are not material to investors. CONDENSED CONSOLIDATING BALANCE SHEET JUNE 30, 2006
Subsidiary Neenah Guarantors Eliminations Consolidated --------- ---------- ------------ ------------ ASSETS Current assets: Cash $ 452 $ (452) $ - $ - Accounts receivable, net 41,698 45,128 - 86,826 Inventories 27,177 39,165 - 66,342 Deferred income taxes 4,537 (1,233) - 3,304 Other current assets 5,090 2,209 - 7,299 --------- ---------- ------------ ------------ Total current assets 78,954 84,817 - 163,771 Investments in and advances to subsidiaries 114,939 - (114,939) - Property, plant and equipment, net 39,598 55,317 - 94,915 Deferred financing costs and identifiable intangible assets, net 49,085 16,587 - 65,672 Goodwill 86,699 - - 86,699 Other assets 1,834 2,876 - 4,710 --------- ---------- ------------ ------------ $ 371,109 $ 159,597 $ (114,939) $ 415,767 ========= ========== ============ ============ LIABILITIES AND STOCKHOLDER'S EQUITY Current liabilities: Accounts payable $ 8,899 $ 22,752 $ - $ 31,651 Net intercompany payable - 85,328 (85,328) - Income taxes payable 5,209 (682) - 4,527 Accrued liabilities 6,684 8,983 - 15,667 Current portion of long-term debt 43,448 151 - 43,599 --------- ---------- ------------ ------------ Total current liabilities 64,240 116,532 (85,328) 95,444 Long-term debt 236,838 1,109 - 237,947 Deferred income taxes 20,539 3,220 - 23,759 Postretirement benefit obligations 10,637 - - 10,637 Other liabilities 12,883 9,125 - 22,008 Stockholder's equity 25,972 29,611 (29,611) 25,972 --------- ---------- ------------ ------------ $ 371,109 $ 159,597 $ (114,939) $ 415,767 ========= ========== ============ ============
8 NOTE 5 -- GUARANTOR SUBSIDIARIES (CONTINUED) CONDENSED CONSOLIDATING BALANCE SHEET SEPTEMBER 30, 2005
Subsidiary Neenah Guarantors Eliminations Consolidated --------- ---------- ------------ ------------ ASSETS Current assets: Cash $ 4,952 $ (1,468) $ - $ 3,484 Accounts receivable, net 37,085 48,710 - 85,795 Inventories 22,754 36,369 - 59,123 Deferred income taxes 4,537 (1,233) - 3,304 Other current assets 3,908 2,989 - 6,897 --------- ---------- ------------ ------------ Total current assets 73,236 85,367 - 158,603 Investments in and advances to subsidiaries 114,430 - (114,430) - Property, plant and equipment, net 36,519 54,731 - 91,250 Deferred financing costs and identifiable intangible assets, net 53,736 17,648 - 71,384 Goodwill, net 86,699 - - 86,699 Other assets 1,834 2,785 - 4,619 --------- ---------- ------------ ------------ $ 366,454 $ 160,531 $ (114,430) $ 412,555 ========= ========== ============ ============ LIABILITIES AND STOCKHOLDER'S EQUITY Current liabilities: Accounts payable $ 8,442 $ 21,863 $ - $ 30,305 Net intercompany payable - 81,907 (81,907) - Income taxes payable 5,562 - - 5,562 Accrued liabilities 15,304 10,827 - 26,131 Current portion of long-term debt 33,658 10 - 33,668 --------- ---------- ------------ ------------ Total current liabilities 62,966 114,607 (81,907) 95,666 Long-term debt 238,015 71 - 238,086 Deferred income taxes 20,539 3,220 - 23,759 Postretirement benefit obligations 10,404 - - 10,404 Other liabilities 17,177 10,110 - 27,287 Stockholder's equity 17,353 32,523 (32,523) 17,353 --------- ---------- ------------ ------------ $ 366,454 $ 160,531 $ (114,430) $ 412,555 ========= ========== ============ ============
9 NOTE 5 -- GUARANTOR SUBSIDIARIES (CONTINUED) CONDENSED CONSOLIDATING STATEMENT OF OPERATIONS THREE MONTHS ENDED JUNE 30, 2006
Subsidiary Neenah Guarantors Eliminations Consolidated --------- ---------- ------------ ------------ Net sales $ 72,074 $ 77,632 $ (1,982) $ 147,724 Cost of sales 50,338 69,417 (1,982) 117,773 --------- ---------- ------------ ------------ Gross profit 21,736 8,215 - 29,951 Selling, general and administrative expenses 4,625 4,112 - 8,737 Amortization of intangible assets 1,426 354 - 1,780 Gain on disposal of equipment (11) - - (11) --------- ---------- ------------ ------------ Operating income 15,696 3,749 - 19,445 Net interest expense (4,477) (3,885) - (8,362) --------- ---------- ------------ ------------ Income (loss) before income taxes and equity in loss of subsidiaries 11,219 (136) - 11,083 Income tax provision 4,217 24 - 4,241 --------- ---------- ------------ ------------ 7,002 (160) - 6,842 Equity in loss of subsidiaries (160) - 160 - --------- ---------- ------------ ------------ Net income (loss) $ 6,842 $ (160) $ 160 $ 6,842 ========= ========== ============ ============
CONDENSED CONSOLIDATING STATEMENT OF OPERATIONS THREE MONTHS ENDED JUNE 30, 2005
Subsidiary Neenah Guarantors Eliminations Consolidated --------- ---------- ------------ ------------ Net sales $ 67,049 $ 80,324 $ (1,688) $ 145,685 Cost of sales 46,323 69,703 (1,688) 114,338 --------- ---------- ------------ ------------ Gross profit 20,726 10,621 - 31,347 Selling, general and administrative expenses 4,367 4,517 - 8,884 Litigation settlement 6,500 - - 6,500 Amortization of intangible assets 1,426 352 - 1,778 Loss (gain) on disposal of equipment (14) 118 - 104 --------- ---------- ------------ ------------ Operating income 8,447 5,634 - 14,081 Net interest expense (4,434) (3,894) - (8,328) --------- ---------- ------------ ------------ Income before income taxes and equity in income of subsidiaries 4,013 1,740 - 5,753 Income tax provision (benefit) (1,073) 696 - (377) --------- ---------- ------------ ------------ 5,086 1,044 - 6,130 Equity in income of subsidiaries 1,044 - (1,044) - --------- ---------- ------------ ------------ Net income $ 6,130 $ 1,044 $ (1,044) $ 6,130 ========= ========== ============ ============
10 NOTE 5 -- GUARANTOR SUBSIDIARIES (CONTINUED) CONDENSED CONSOLIDATING STATEMENT OF OPERATIONS NINE MONTHS ENDED JUNE 30, 2006
Subsidiary Neenah Guarantors Eliminations Consolidated --------- ---------- ------------ ------------ Net sales $ 179,696 $ 225,331 $ (5,076) $ 399,951 Cost of sales 131,331 203,436 (5,076) 329,691 --------- ---------- ------------ ------------ Gross profit 48,365 21,895 - 70,260 Selling, general and administrative expenses 13,755 12,138 - 25,893 Amortization of intangible assets 4,278 1,061 - 5,339 Loss (gain) on disposal of equipment (20) 1 - (19) --------- ---------- ------------ ------------ Operating income 30,352 8,695 - 39,047 Net interest expense (13,308) (11,602) - (24,910) --------- ---------- ------------ ------------ Income (loss) before income taxes and equity in loss of subsidiaries 17,044 (2,907) - 14,137 --------- ---------- ------------ ------------ Income tax provision (benefit) 6,653 (1,135) - 5,518 10,391 (1,772) - 8,619 Equity in loss of subsidiaries (1,772) - 1,772 - --------- ---------- ------------ ------------ Net income (loss) $ 8,619 $ (1,772) $ 1,772 $ 8,619 ========= ========== ============ ============
CONDENSED CONSOLIDATING STATEMENT OF OPERATIONS NINE MONTHS ENDED JUNE 30, 2005
Subsidiary Neenah Guarantors Eliminations Consolidated --------- ---------- ------------ ------------ Net sales $ 172,570 $ 230,983 $ (4,477) $ 399,076 Cost of sales 128,961 203,617 (4,477) 328,101 --------- ---------- ------------ ------------ Gross profit 43,609 27,366 - 70,975 Selling, general and administrative expenses 12,794 12,374 - 25,168 Litigation settlement 6,500 - - 6,500 Amortization of intangible assets 4,279 1,062 - 5,341 Loss (gain) on disposal of equipment (15) 118 - 103 --------- ---------- ------------ ------------ Operating income 20,051 13,812 - 33,863 Net interest expense (13,354) (11,774) - (25,128) --------- ---------- ------------ ------------ Income before income taxes and equity in income of subsidiaries 6,697 2,038 - 8,735 Income tax provision 2 816 - 818 --------- ---------- ------------ ------------ 6,695 1,222 - 7,917 Equity in income of subsidiaries 1,222 - (1,222) - --------- ---------- ------------ ------------ Net income $ 7,917 $ 1,222 $ (1,222) $ 7,917 ========= ========== ============ ============
11 NOTE 5 -- GUARANTOR SUBSIDIARIES (CONTINUED) CONDENSED CONSOLIDATING STATEMENT OF CASH FLOWS NINE MONTHS ENDED JUNE 30, 2006
Subsidiary Neenah Guarantors Eliminations Consolidated -------- ---------- ------------ ------------ OPERATING ACTIVITIES Net income (loss) $ 8,619 $ (1,772) $ 1,772 $ 8,619 Adjustments to reconcile net income (loss) to net cash provided by (used in) operating activities: Depreciation and amortization 6,501 8,541 - 15,042 Amortization of deferred financing costs and discount on notes 1,561 - - 1,561 Changes in operating assets and liabilities (22,796) (1,146) - (23,942) -------- ---------- ------------ ------------ Net cash provided by (used in) operating activities (6,115) 5,623 1,772 1,280 INVESTING ACTIVITIES Investments in and advances to subsidiaries (509) 2,281 (1,772) - Purchase of property, plant and equipment (5,302) (8,066) - (13,368) -------- ---------- ------------ ------------ Net cash used in investing activities (5,811) (5,785) (1,772) (13,368) FINANCING ACTIVITIES Net change in revolver balance 9,792 - - 9,792 Proceeds from long-term debt - 1,244 - 1,244 Payments on long-term debt and capital lease obligations (2,366) (66) - (2,432) -------- ---------- ------------ ------------ Net cash provided by financing activities 7,426 1,178 - 8,604 -------- ---------- ------------ ------------ Increase (decrease) in cash (4,500) 1,016 - (3,484) Cash at beginning of period 4,952 (1,468) - 3,484 -------- ---------- ------------ ------------ Cash at end of period $ 452 $ (452) $ - $ - ======== ========== ============ ============
12 NOTE 5 -- GUARANTOR SUBSIDIARIES (CONTINUED) CONDENSED CONSOLIDATING STATEMENT OF CASH FLOWS NINE MONTHS ENDED JUNE 30, 2005
Subsidiary Neenah Guarantors Eliminations Consolidated -------- ---------- ------------ ------------ OPERATING ACTIVITIES Net income $ 7,917 $ 1,222 $ (1,222) $ 7,917 Adjustments to reconcile net income to net cash provided by operating activities: Depreciation and amortization 6,079 7,865 - 13,944 Amortization of deferred financing costs and discount on notes 1,573 - - 1,573 Changes in operating assets and liabilities (2,357) (6,258) - (8,615) -------- ---------- ------------ ------------ Net cash provided by operating activities 13,212 2,829 (1,222) 14,819 INVESTING ACTIVITIES Investments in and advances to subsidiaries (7,190) 5,968 1,222 - Purchase of property, plant and equipment (6,029) (5,470) - (11,499) -------- ---------- ------------ ------------ Net cash provided by (used in) investing activities (13,219) 498 1,222 (11,499) FINANCING ACTIVITIES Net change in revolver balance 732 - 732 Payments on long-term debt and capital lease obligations (2,366) (1,535) (3,901) Deferred financing costs (151) - - (151) -------- ---------- ------------ ------------ Net cash used in financing activities (1,785) (1,535) - (3,320) -------- ---------- ------------ ------------ Increase (decrease) in cash (1,792) 1,792 - - Cash at beginning of period 1,683 (1,683) - - -------- ---------- ------------ ------------ Cash at end of period $ (109) $ 109 $ - $ - ======== ========== ============ ============
13 NOTE 6 -- SEGMENT INFORMATION The Company has two reportable segments, Castings and Forgings. The Castings segment manufactures and sells castings for the industrial and municipal markets, while the Forgings segment manufactures forged components for the industrial market. The Other segment includes machining operations and freight hauling. The Company evaluates performance and allocates resources based on the operating income before depreciation and amortization charges of each segment. The accounting policies of the reportable segments are the same as those described in the summary of significant accounting policies in the Company's Annual Report on Form 10-K. Intersegment sales and transfers are recorded at cost plus a share of operating profit. The following segment information is presented for continuing operations:
Three months ended Nine months ended June 30, June 30, ----------------------------- ----------------------------- 2006 2005 2006 2005 ------------- ------------- ------------- ------------- Revenues from continuing operations: Castings $ 134,009 $ 132,528 $ 360,526 $ 359,162 Forgings 10,956 10,034 31,017 33,398 Other 6,011 6,036 17,070 17,306 Elimination of intersegment revenues (3,252) (2,913) (8,662) (10,790) ------------- ------------- ------------- ------------- Consolidated $ 147,724 $ 145,685 $ 399,951 $ 399,076 ============= ============= ============= ============= Net Income Castings $ 6,004 $ 7,052 $ 4,875 $ 6,349 Forgings (11) (18) (886) 1,292 Other 711 834 1,720 2,308 Elimination of intersegment (income) loss 138 (1,738) 2,910 (2,032) ------------- ------------- ------------- ------------- Consolidated $ 6,842 $ 6,130 $ 8,619 $ 7,917 ============= ============= ============= =============
June 30, September 30, 2006 2005 ------------- ------------ Total assets: Castings $ 482,422 $ 475,725 Forgings 6,167 7,040 Other 17,777 13,268 Elimination of intersegment assets (90,599) (83,478) ------------- ------------- Consolidated $ 415,767 $ 412,555 ============= =============
14 Item 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS GENERAL Certain matters discussed in this Management's Discussion and Analysis of Financial Condition and Results of Operations and other sections of this quarterly report are "forward-looking statements" intended to qualify for the safe harbors from liability established by the Private Securities Litigation Reform Act of 1995. These forward-looking statements can generally be identified as such because the context of the statement will include words such as the Company "believes," "anticipates," "expects" or words of similar import. Similarly, statements that describe the Company's future plans, objectives or goals are also forward-looking statements. Such forward-looking statements are subject to certain risks and uncertainties which may cause actual results to differ materially from those currently anticipated. Factors that could cause the Company's results to differ materially from current expectations include material disruptions to the major industries served by the Company; continued price fluctuations in the scrap metal market; developments affecting the valuation or prospects of the casting and forging industries generally or the Company in particular; and other factors described or referenced in the Company's Form 10-K for the year ended September 30, 2005 or subsequent SEC filings. The forward-looking statements made herein are made only as of the date of this report and, unless required by law, the Company undertakes no obligation to update such forward-looking statements to reflect subsequent events or circumstances. RECENT DEVELOPMENTS Major Customer Declares Bankruptcy. On March 3, 2006, Dana Corporation ("Dana"), a major customer of the Company, filed a voluntary petition for reorganization under Chapter 11 of the United States Bankruptcy Code. The total accounts receivable owed to the Company by Dana on March 3, 2006 were approximately $4.7 million. Total payments received from Dana in the 90 days preceding the bankruptcy filing were approximately $7.4 million. Sales to Dana accounted for approximately 7%, 5%, 6% and 6% of the Company's net sales for the fiscal years ended September 30, 2003, 2004, 2005 and the nine months ended June 30, 2006, respectively. These amounts reflect the Company's transactions directly with Dana and exclude Dana products supplied to machine shops, which are not owned by Dana but whose business sourcing is controlled by Dana. The Company negotiated a settlement with Dana and received partial payment of outstanding accounts receivable owed to the Company. As of June 30, 2006, approximately $3.9 million of the $4.7 million owed on March 3, 2006 has been collected by the Company. The Company has reflected its estimate of the amounts that will not be collected in the accompanying financial statements. Since the bankruptcy process is ongoing, it is difficult to precisely calculate any losses that may result from this process. Accordingly, actual results may differ, requiring adjustments to the allowance. The Company continues to engage legal counsel to monitor the proceedings and to assist in negotiations as required. Change of Control. As previously disclosed in the Company's Current Report on Form 8-K dated May 25, 2006 and filed on June 1, 2006, a change of control of the Company occurred on May 25, 2006, when Tontine Capital Partners, L.P. ("Tontine") became the beneficial owner of more than a majority of the outstanding shares, on a fully diluted basis, of our parent, ACP Holding Company. The change of control required the Company to make the change of control tender offers to purchase its Senior Secured Notes and Senior Subordinated Notes discussed below under "Liquidity and Capital Resources" - "11% Senior Secured Notes due 2010" and - "13% Senior Subordinated Notes due 2013", with Tontine, as the Company's designee, purchasing notes tendered pursuant to the offers. Expected Market Decline. Due to new emissions standards set to take effect on January 1, 2007, heavy-duty truck production is expected to decline beginning early in calendar 2007. In addition, housing starts are expected to decline in calendar 2007, reflecting softness in the overall housing sector. As a result, the Company expects its sales into these end-markets to decline in fiscal 2007 from fiscal 2006 levels. 15 RESULTS OF OPERATIONS (dollars in thousands) The following discussions compare the results of operations of the Company for the three and nine months ended June 30, 2006, to the results of the operations of the Company for the three and nine months ended June 30, 2005. Three Months Ended June 30, 2006 and 2005 Net sales. Net sales for the three months ended June 30, 2006 were $147,724, which are $2,039 or 1.4% higher than the quarter ended June 30, 2005, due to increased shipments of municipal products. Gross profit. Gross profit for the three months ended June 30, 2006 was $29,951, a decrease of $1,396, or 4.5%, as compared to the quarter ended June 30, 2005. Gross profit as a percentage of net sales decreased to 20.3% for the three months ended June 30, 2006 from 21.5% for the three months ended June 30, 2005, primarily as a result of increased material costs and operating difficulties at one of the Company's locations during the three months ended June 30, 2006. Selling, general and administrative expenses. Selling, general and administrative expenses for the three months ended June 30, 2006 were $8,737, a decrease of $147, or 1.7%, as compared to the $8,884 for the quarter ended June 30, 2005. Selling, general and administrative expenses as a percentage of net sales decreased to 5.9% for the quarter ended June 30, 2006 from 6.1% for the quarter ended June 30, 2005. Litigation settlement. As disclosed in our Annual Report on Form 10-K for the fiscal year ended September 30, 2005, on August 5, 2005, the Company settled the litigation matter with JD Holdings, LLC, regarding the proposed sale of Mercer. The $6,500 cash payment was accrued in the quarter ended June 30, 2005. Amortization of intangible assets. Amortization of intangible assets was $1,780 for the three months ended June 30, 2006, which is comparable to the $1,778 for the quarter ended June 30, 2005. Operating income. Operating income was $19,445 for the three months ended June 30, 2006, an increase of $5,364 from operating income of $14,081 for the quarter ended June 30, 2005. As a percentage of net sales, operating income was 13.2% for the three months ended June 30, 2006, compared to 9.7% for the three months ended June 30, 2005. The increase in operating income was due to the accrual of the litigation settlement in June of 2005, partially offset by the reduced gross profit, as mentioned above. Net interest expense. Net interest expense was $8,362 for the three months ended June 30, 2006 compared to $8,328 for the quarter ended June 30, 2005. Interest expense for the three months ended June 30, 2006 included amortization of bond discount of $396 and amortization of deferred financing costs of $124. Income tax provision (benefit). The effective tax rate for the third quarter of 2006 was 38%, which includes the favorable impact of the Production Activities Deduction as permitted under the American Jobs Creation Act of 2004. The income tax benefit for the three months ended June 30, 2005 includes the favorable impact of a change in the tax method of determining LIFO inventory. 16 Nine Months Ended June 30, 2006 and 2005 Net sales. Net sales for the nine months ended June 30, 2006 were $399,951, which are $875 or .2% higher than for the nine months ended June 30, 2005. Increased shipments of municipal products, somewhat offset by reduced shipments of products to the HVAC (heating, ventilation and air conditioning) market, resulted in a slightly higher level of net sales for the nine months ended June 30, 2006 compared to the nine months ended June 30, 2005. Gross profit. Gross profit for the nine months ended June 30, 2006 was $70,260, a decrease of $715, or 1.0%, as compared to the nine months ended June 30, 2005. Gross profit as a percentage of net sales was 17.6% for the nine months ended June 30, 2006, compared to 17.8% for the nine months ended June 30, 2005. The decrease in gross profit resulted from a slightly less favorable mix of products sold throughout the Company during the nine months ended June 30, 2006 as compared to the nine months ended June 30, 2005. Selling, general and administrative expenses. Selling, general and administrative expenses for the nine months ended June 30, 2006 were $25,893, an increase of $725, or 2.9%, as compared to the $25,168 for the nine months ended June 30, 2005. Selling, general and administrative expenses as a percentage of net sales were 6.5% for the nine months ended June 30, 2006, compared to 6.3% for the nine months ended June 30, 2005. The increase in selling, general and administrative expenses is due mainly to increased costs related to existing health care plans and estimated bad debts. Litigation settlement. As disclosed in our Annual Report on Form 10-K for the fiscal year ended September 30, 2005, on August 5, 2005, the Company settled the litigation matter with JD Holdings, LLC, regarding the proposed sale of Mercer. The $6,500 cash payment was accrued in the quarter ended June 30, 2005. Amortization of intangible assets. Amortization of intangible assets was $5,339 for the nine months ended June 30, 2006, which is comparable to the $5,341 for the nine months ended June 30, 2005. Operating income. Operating income was $39,047 for the nine months ended June 30, 2006, an increase of $5,184 from operating income of $33,863 for the nine months ended June 30, 2005. As a percentage of net sales, operating income was 9.8% for the nine months ended June 30, 2006, compared to 8.5% for the nine months ended June 30, 2005. The increase in operating income was due to the accrual of the litigation settlement in June of 2005, partially offset by decreased gross profit and increased selling, general and administrative expenses in 2006, as mentioned above. Net interest expense. Net interest expense was $24,910 for the nine months ended June 30, 2006 compared to $25,128 for the nine months ended June 30, 2005. Interest expense for the nine months ended June 30, 2006 included amortization of bond discount of $1,188 and amortization of deferred financing costs of $373. Income tax provision. The effective tax rate for the nine months ended June 30, 2006 and 2005 was 39% and 9%, respectively. The effective tax rate for the nine months ended June 30, 2006 includes the impact of the Production Activities Deduction as permitted under the American Jobs Creation Act of 2004. The effective tax rate for the nine months ended June 30, 2005 includes the favorable impact of a change in the tax method of determining LIFO inventory. 17 LIQUIDITY AND CAPITAL RESOURCES (dollars in thousands) Credit Facility The Company's bank Loan and Security Agreement, as amended (the "Credit Facility"), consists of a revolving credit facility of up to $92,085 (with a $5,000 sublimit available for letters of credit and term loans in the aggregate original principal amount of $22,085). The Credit Facility matures on October 8, 2009, and bears interest at rates based on the lenders' Base Rate, as defined in the Credit Facility, or an adjusted rate based on LIBOR. Availability under the Credit Facility is based on various advance rates against the Company's accounts receivable and inventory. Amounts under the revolving credit facility may be borrowed, repaid and reborrowed subject to the terms of the facility. At June 30, 2006, the Company had approximately $40,300 outstanding under the revolving credit facility, which includes $13,800 borrowed on June 30, 2006 for an interest payment on long-term debt due July 3, 2006, and approximately $14,200 outstanding under the term loan facility. No portion of the term loan, once repaid, may be reborrowed. Substantially all of the Company's wholly owned subsidiaries are co-borrowers with the Company under the Credit Facility and are jointly and severally liable with the Company for all obligations under the Credit Facility, subject to customary exceptions for transactions of this type. In addition, NFC Castings, Inc. (NFC), the Company's immediate parent, and the remaining wholly owned subsidiaries of the Company jointly and severally guarantee the Company's obligations under the Credit Facility, subject to customary exceptions for transactions of this type. The borrowers' and guarantors' obligations under the Credit Facility are secured by a first priority perfected security interest, subject to customary restrictions, in substantially all of the tangible and intangible assets of the Company and its subsidiaries. The senior secured notes, discussed below, and the guarantees in respect thereof, are equal in right of payment to the Credit Facility, and the guarantees in respect thereof. The liens in respect of the senior secured notes are junior to the liens securing the Credit Facility and guarantees thereof. Voluntary prepayments may be made at any time on the term loan borrowings or the revolving borrowings upon customary prior notice. Prepayments on the term loan borrowings may be made at any time without premium or penalty unless a simultaneous reduction of the revolving loan commitment amount is being made or if any such reduction of the revolving loan commitment amount has been made previously. Reductions of the revolving loan commitment are subject to certain premiums specified in the Credit Facility. Mandatory repayments are required under certain circumstances, including a sale of assets or the issuance of debt or equity. The Credit Facility requires the Company to observe certain customary conditions, affirmative covenants and negative covenants including financial covenants. The Credit Facility also contains events of default customary for these types of facilities, including, without limitation, payment defaults, material misrepresentations, covenant defaults, bankruptcy and a change of ownership of the Company, NFC or ACP Holding Company, NFC's immediate parent. The Company is prohibited from paying dividends and is restricted to a maximum yearly stock repurchase of $250. At June 30, 2006, the Company is in compliance with existing bank covenants. 18 11% Senior Secured Notes due 2010. The Company has outstanding Senior Secured Notes due 2010 in the principal amount of $133,130, with a coupon rate of 11%. These notes were issued at a price which included a discount of $11,692. The obligations under the senior secured notes are equal in right of payment to the Credit Facility and the associated guarantees. The liens securing the senior secured notes are junior to the liens securing the Credit Facility and guarantees thereof. Interest on the senior secured notes is payable on a semi-annual basis. The Company's obligations under the notes are guaranteed on a secured basis by each of its wholly owned subsidiaries. Subject to the restrictions in the Credit Facility, the notes are redeemable at the Company's option in whole or in part at any time on or after September 30, 2007, with not less than 30 days nor more than 60 days notice, at the redemption price specified in the indenture governing the notes (105.500% of the principal amount redeemed beginning September 30, 2007, 104.125% beginning September 30, 2008, and 102.750% beginning September 30, 2009 and thereafter), plus accrued and unpaid interest up to the redemption date. Since a "change of control", as defined in the indenture governing the notes, occurred on May 25, 2006, when Tontine acquired control, as referred to under "Recent Developments" above, the Company was required to make an offer to purchase the secured notes at 101% of the outstanding principal amount thereof, plus accrued and unpaid interest up to the purchase date. The tender offer expired on July 24, 2006 with approximately $115 of the notes being purchased by the Company's designee, Tontine. The notes purchased by Tontine have not been retired and remain outstanding. The secured notes contain customary covenants typical to this type of financing, such as limitations on (1) indebtedness, (2) restricted payments (among other things, currently limiting most dividends and similar payments by Neenah and its subsidiaries to no more than approximately $14 million), (3) liens, (4) distributions from restricted subsidiaries, (5) sale of assets, (6) affiliate transactions, (7) mergers and consolidations and (8) lines of business. The secured notes also contain customary events of default typical to this type of financing, such as (1) failure to pay principal and/or interest when due, (2) failure to observe covenants, (3) certain events of bankruptcy, (4) the rendering of certain judgments or (5) the loss of any guarantee. 13% Senior Subordinated Notes due 2013. The Company has outstanding Senior Subordinated Notes due 2013 in the principal amount of $100,000, with a coupon rate of 13%. The obligations under the senior subordinated notes are senior to the Company's subordinated unsecured indebtedness, if any, and are subordinate to the Credit Facility and the senior secured notes. Interest on the senior subordinated notes is payable on a semi-annual basis. Not less than five percent of the interest on the senior subordinated notes will be paid in cash and up to 8% interest may be paid-in-kind. The Company's obligations under the notes are guaranteed on an unsecured basis by each of its wholly owned subsidiaries. Subject to the restrictions in the Credit Facility, the notes are redeemable at our option in whole or in part at any time, with not less than 30 days nor more than 60 days notice, at the redemption price specified in the indenture governing the notes (currently 101% of the principal amount redeemed and 100% beginning September 30, 2006 and thereafter), plus accrued and unpaid interest up to the redemption date. Since a "change of control", as defined in the indenture governing the notes, occurred on May 25, 2006, when Tontine acquired control, as referred to under "Recent Developments" above, the Company was required to make an offer to purchase the subordinated notes at 101% of the outstanding principal amount thereof, plus accrued and unpaid interest up to the purchase date. The original tender offer expired on July 24, 2006 with $41,662 of the notes being purchased by the Company's designee, Tontine. The notes purchased by Tontine have not been retired and remain outstanding. Following the commencement of the original offer, some concerns were raised regarding whether the timing of the original offer complied with the timing requirements under the indenture. Although the Company believes that the timing of the original offer was proper under the circumstances, to avoid any doubt regarding performance of its obligations under the indenture, on July 25, 2006, the Company commenced a subsequent offering period for the subordinated notes, which expires on August 28, 2006. Any subordinated notes tendered during the subsequent offering period also will be purchased by Tontine, as the Company's designee, and will remain outstanding. The subordinated notes contain customary covenants typical to this type of financing, such as limitations on (1) indebtedness, (2) restricted payments (among other things, currently limiting most dividends and similar payments by Neenah and its subsidiaries to no more than approximately $14 million), (3) liens, (4) distributions from restricted subsidiaries, (5) sale of assets, (6) affiliate transactions, (7) mergers and consolidations and (8) lines of business. The subordinated notes also contain customary events of default typical to this type of financing, such as, (1) failure to pay principal and/or interest when due, (2) failure to observe covenants, (3) certain events of bankruptcy, (4) the rendering of certain judgments or (5) the loss of any guarantee. For the nine months ended June 30, 2006 and June 30, 2005, capital expenditures were $13,368 and $11,499, respectively. Both periods represent a level of capital expenditures necessary to maintain equipment and facilities. Capital spending for the nine months ended June 30, 2006 includes $564 for MACT (Maximum Achievable Control Technology) compliance at Neenah and Dalton. The Company's principal source of cash to fund its liquidity needs is net cash from operating activities and borrowings under the revolving credit facility. The Company had remaining availability of $37,595 under the revolving credit facility at June 30, 2006. Net cash provided by operating activities for the nine months ended June 30, 2006 was $1,280, a decrease of $13,539 from cash provided by operating activities for the nine months ended June 30, 2005 of $14,819. The decrease in net cash provided by operating activities was due to increases in inventory balances, payment of $4,300 of additional income taxes and $3,200 of additional pension contributions during the nine months ended June 30, 2006. 19 Future Capital Needs. The Company is significantly leveraged and its ability to meet debt obligations will depend upon future operating performance which will be affected by many factors, some of which are beyond the Company's control. The Company is proceeding with a major capital project to replace an existing molding line that will enhance efficiency, increase capacity and provide expanded molding capabilities. Based on the Company's current level of operations, the Company anticipates that its operating cash flows and available credit facilities will be sufficient to fund anticipated operational investments, including working capital and capital expenditure needs (including the first phase of the planned capital project to replace an existing molding line), for at least the next twelve months. If, however, the Company is unable to service its debt requirements as they become due or is unable to maintain ongoing compliance with restrictive covenants, the Company may be forced to adopt alternative strategies that may include reducing or delaying capital expenditures, selling assets, restructuring or refinancing indebtedness or seeking additional equity capital. There can be no assurances that any of these strategies could be effected on satisfactory terms, if at all. The Company has from time to time explored refinancing alternatives and continues to review its capital structure, but it has made no decisions to enter into any particular refinancing or restructuring transactions. Adjusted EBITDA. Our borrowing arrangement contains certain financial covenants which are tied to ratios based on Adjusted EBITDA. Adjusted EBITDA is defined in the Company's Credit Facility as "EBITDA" and is generally calculated as the sum of net income (excluding non-recurring non-cash charges and certain one-time cash charges), income taxes, interest expense, and depreciation and amortization. Adjusted EBITDA is presented herein because it is a material component of the covenants contained within the Company's Credit Facility. Non-compliance with the covenants could result in the requirement to immediately repay all amounts outstanding under the Credit Facility which could have a material adverse effect on our results of operations, financial position and cash flow. Management also believes that certain investors use information concerning Adjusted EBITDA as a measure of a company's performance and ability to service its debt. Adjusted EBITDA should not be considered a substitute for, or more meaningful than, income from operations, net income, cash flows or other measures of financial performance prepared in accordance with accounting principles generally accepted in the United States. Adjusted EBITDA, as presented by the Company, may not be comparable to similarly titled measures reported by other companies. A reconciliation of Adjusted EBITDA for the three and nine months ended June 30, 2006, compared to the three and nine months ended June 30, 2005, is provided below (in thousands):
Three Months Ended Nine Months Ended June 30, June 30, -------------------- ------------------- 2006 2005 2006 2005 -------- -------- -------- -------- Net income ............................. $ 6,842 $ 6,130 $ 8,619 $ 7,917 Income tax provision (benefit) ......... 4,241 (377) 5,518 818 Net interest expense ................... 8,362 8,328 24,910 25,128 Depreciation and amortization .......... 5,035 4,645 15,042 13,944 Loss (gain) on disposal of equipment.... (11) 104 (19) 103 Litigation settlement * ................ - 6,500 - 6,500 Gregg write-off of lease deposits ...... - (39) - 65 -------- -------- -------- -------- Adjusted EBITDA (as defined above) ..... $ 24,469 $ 25,291 $ 54,070 $ 54,475 ======== ======== ======== ========
- ------------------ * Effective December 9, 2005, the Credit Facility was amended to allow the $6.5 million settlement in connection with the Mercer litigation to be added back in the calculation of Adjusted EBITDA. CONTRACTUAL OBLIGATIONS There have been no material changes to our contractual obligations outside the ordinary course of our business from those disclosed in our Annual Report on Form 10-K for the fiscal year ended September 30, 2005. OFF-BALANCE SHEET ARRANGEMENTS None. CRITICAL ACCOUNTING ESTIMATES There have been no changes in critical accounting estimates from those disclosed in our Annual Report on Form 10-K for the fiscal year ended September 30, 2005. 20 Item 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK The Company is exposed to market risk related to changes in interest rates. The Company does not use derivative financial instruments for speculative or trading purposes. Interest Rate Sensitivity. Although the senior secured notes and senior subordinated notes are subject to fixed interest rates, the Company's earnings are affected by changes in short-term interest rates as a result of its borrowings under the Credit Facility. If market interest rates for such borrowings change by 1% during the remainder of the fiscal year ending September 30, 2006, the Company's interest expense would increase or decrease by approximately $130. This analysis does not consider the effects of changes in the level of overall economic activity that could occur due to interest rate changes. Further, in the event of an upward change of such magnitude, management could take actions to further mitigate its exposure to the change. However, due to the uncertainty of the specific actions that would be taken and their possible effects, the sensitivity analysis assumes no changes in the Company's financial structure. Item 4. CONTROLS AND PROCEDURES Disclosure Control and Procedures. The Company's management, with the participation of the Company's Chief Executive Officer and the Chief Financial Officer, have evaluated the effectiveness of the Company's disclosure controls and procedures (as defined in Rules 13a-15(e) and 15d-15(e) under the Securities Exchange Act of 1934, as amended (the "Exchange Act")) as of the end of the period covered by this report. Based upon such evaluation, the Chief Executive Officer and the Chief Financial Officer have concluded that, as of the end of such period, the Company's disclosure controls and procedures are effective in recording, processing, summarizing and reporting, on a timely basis, information required to be disclosed by the Company in the reports that the Company files or submits under the Exchange Act. Internal Control Over Financial Reporting. There have not been any changes in the Company's internal control over financial reporting (as such term is defined in Rules 13a-15(f) and 15d-15(f) under the Exchange Act) during the fiscal quarter to which this report relates that have materially affected, or are reasonably likely to materially affect, the Company's internal control over financial reporting. 21 NEENAH FOUNDRY COMPANY PART II. OTHER INFORMATION Item 6. EXHIBITS (a) Exhibits
INCORPORATED HEREIN BY REFERENCE EXHIBIT NO. DESCRIPTION TO FILED HEREWITH - ----------- ----------- -------------------------------- -------------- 3.1 Bylaws of ACP Holding Company X 4.1 Supplemental Indenture, dated as of May 23, Exhibit 4.1 to the Registrant's 2006, to the Indenture dated October 8, 2003, for Form 8-K dated May 19, 2006 the 13% Senior Subordinated Notes due 2013, among Neenah Foundry Company, the guarantors named therein, and the Bank of New York, as Trustee 4.2 Supplemental Indenture, dated as of May 23, Exhibit 4.2 to the Registrant's 2006, to the Indenture dated October 8, 2003, for Form 8-K dated May 19, 2006 the 11% Senior Secured Notes due 2010, among Neenah Foundry Company, the guarantors named therein, and the Bank of New York, as Trustee 10.1 Amendment No. 3 to Loan and Security Exhibit 10.1 to the Registrant's Agreement, dated as of May 19, 2006, by and Form 8-K dated May 19, 2006 among Neenah Foundry Company, its subsidiaries party thereto, the various lenders party thereto and Fleet Capital Corporation, as agent 10.2 Letter Agreement, dated May 18, 2006 Exhibit 10.2 to the Registrant's Form 8-K dated May 19, 2006 31.1 Certification of Chief Executive Officer pursuant X to Rule 13a-14(a) or Rule 15d-14(a), as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002 31.2 Certification of Chief Financial Officer pursuant X to Rule 13a-14(a) or Rule 15d-14(a), as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002 32.1 Chief Executive and Chief Financial Officers' X certification pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 99.1 Securities Purchase Agreement, dated as of Exhibit 99.1 to the Registrant's May 19, 2006 Form 8-K dated May 19, 2006 99.2 Stock Purchase Agreement, dated as of Exhibit 99.2 to the Registrant's May 19, 2006 Form 8-K dated May 19, 2006 99.3 Transfer Notice, dated as of May 19, 2006 Exhibit 99.3 to the Registrant's Form 8-K dated May 19, 2006 99.4 Response Letter, dated May 22, 2006 Exhibit 99.4 to the Registrant's Form 8-K dated May 19, 2006
22 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. NEENAH FOUNDRY COMPANY DATE: October 26, 2006 /s/ Gary W. LaChey ----------------------------------------- Gary W. LaChey Corporate Vice President - Finance and Chief Financial Officer (Principal Financial Officer and Duly Authorized Officer) 23 EX-3.1 2 c09432a1exv3w1.txt BYLAWS EXHIBIT 3.1 AMENDED AND RESTATED BYLAWS OF ACP HOLDING COMPANY A DELAWARE CORPORATION ARTICLE I OFFICES Section 1. Registered Office. The registered office of the corporation in the State of Delaware shall be located at 2711 Centerville Road, Suite 400, in the City of Wilmington, County of New Castle. The name of the corporation's registered agent at such address shall be Corporation Service Company. The registered office and/or registered agent of the corporation may be changed from time to time by action of the board of directors. Section 2. Other Offices. The corporation may also have offices at such other places, both within and without the State of Delaware, as the board of directors may from time to time determine or the business of the corporation may require. ARTICLE II MEETINGS OF STOCKHOLDERS Section 1. Place and Time of Meetings. An annual meeting of the stockholders shall be held each year for the purpose of electing directors and conducting such other proper business as may come before the meeting. The date, time and place of the annual meeting may be determined by resolution of the board of directors or as set by the president of the corporation. Section 2. Special Meetings. Special meetings of stockholders may be called for any purpose (including, without limitation, the filling of board vacancies and newly created directorships), and may be held at such time and place, within or without the State of Delaware, as shall be stated in a notice of meeting or in a duly executed waiver of notice thereof. Such meetings may be called at any time by two or more members of the board of directors or the president and shall be called by the president upon the written request of holders of shares entitled to cast not less than fifty percent (50%) of the outstanding shares of the corporation's voting common stock. Section 3. Place of Meetings. The board of directors may designate any place, either within or without the State of Delaware, as the place of meeting for any annual meeting or for any special meeting called by the board of directors. If no designation is made, or if a special meeting be otherwise called, the place of meeting shall be the principal executive office of the corporation. 1 Section 4. Notice. Whenever stockholders are required or permitted to take action at a meeting, written or printed notice stating the place, date, time, and, in the case of special meetings, the purpose or purposes, of such meeting, shall be given to each stockholder entitled to vote at such meeting not less than 10 nor more than 60 days before the date of the meeting. All such notices shall be delivered, either personally or by mail, by or at the direction of the board of directors, the president or the secretary, and if mailed, such notice shall be deemed to be delivered when deposited in the United States mail, postage prepaid, addressed to the stockholder at his, her or its address as the same appears on the records of the corporation. Attendance of a person at a meeting shall constitute a waiver of notice of such meeting, except when the person attends for the express purpose of objecting at the beginning of the meeting to the transaction of any business because the meeting is not lawfully called or convened. Section 5. Stockholders List. The officer having charge of the stock ledger of the corporation shall make, at least 10 days before every meeting of the stockholders, a complete list of the stockholders entitled to vote at such meeting arranged in alphabetical order, showing the address of each stockholder and the number of shares registered in the name of each stockholder. Such list shall be open to the examination of any stockholder, for any purpose germane to the meeting, during ordinary business hours, for a period of at least 10 days prior to the meeting, either at a place within the city where the meeting is to be held, which place shall be specified in the notice of the meeting or, if not so specified, at the place where the meeting is to be held. The list shall also be produced and kept at the time and place of the meeting during the whole time thereof, and may be inspected by any stockholder who is present. Section 6. Quorum. Except as otherwise provided by applicable law or by the corporation's certificate of incorporation, a majority of the outstanding shares of the corporation entitled to vote, represented in person or by proxy, shall constitute a quorum at a meeting of stockholders. If less than a majority of the outstanding shares are represented at a meeting, a majority of the shares so represented may adjourn the meeting from time to time in accordance with Section 7 of this Article, until a quorum shall be present or represented. Section 7. Adjourned Meetings. When a meeting is adjourned to another time and place, notice need not be given of the adjourned meeting if the time and place thereof are announced at the meeting at which the adjournment is taken. At the adjourned meeting the corporation may transact any business which might have been transacted at the original meeting. If the adjournment is for more than thirty days, or if after the adjournment a new record date is fixed for the adjourned meeting, a notice of the adjourned meeting shall be given to each stockholder of record entitled to vote at the meeting. Section 8. Vote Required. When a quorum is present, the affirmative vote of the majority of shares present in person or represented by proxy at the meeting and entitled to vote on the subject matter shall be the act of the stockholders, unless the question is one upon which by express provisions of an applicable law or of the corporation's certificate of incorporation a different vote is required, in which case such express provision shall govern and control the decision of such question. Where a separate vote by class is required, the affirmative vote of the majority of shares of such class present in person or represented by proxy at the meeting shall be the act of such class. 2 Section 9. Voting Rights. Except as otherwise provided by the General Corporation Law of the State of Delaware or by the corporation's certificate of incorporation and subject to Section 3 of Article VI hereof, every stockholder shall at every meeting of the stockholders be entitled to one vote in person or by proxy for each share of common stock held by such stockholder. Section 10. Proxies. Each stockholder entitled to vote at a meeting of stockholders or to express consent or dissent to corporate action in writing without a meeting may authorize another person or persons to act for him, her or it by proxy. Every proxy must be signed by the stockholder granting the proxy or by his, her or its attorney-in-fact. No proxy shall be voted or acted upon after three years from its date, unless the proxy provides for a longer period. A duly executed proxy shall be irrevocable if it states that it is irrevocable and if, and only as long as, it is coupled with an interest sufficient in law to support an irrevocable power. A proxy may be made irrevocable regardless of whether the interest with which it is coupled is an interest in the stock itself or an interest in the corporation generally. Section 11. Action by Written Consent. Unless otherwise provided in the corporation's certificate of incorporation, any action required to be taken at any annual or special meeting of stockholders of the corporation, or any action which may be taken at any annual or special meeting of such stockholders, may be taken without a meeting, without prior notice and without a vote, if a consent or consents in writing, setting forth the action so taken and bearing the dates of signature of the stockholders who signed the consent or consents, shall be signed by the holders of outstanding stock having not less than a majority of the shares entitled to vote, or, if greater, not less than the minimum number of votes that would be necessary to authorize or take such action at a meeting at which all shares entitled to vote thereon were present and voted and shall be delivered to the corporation by delivery to its registered office in the state of Delaware, or the corporation's principal place of business, or an officer or agent of the corporation having custody of the book or books in which proceedings of meetings of the stockholders are recorded. Delivery made to the corporation's registered office shall be by hand or by certified or registered mail, return receipt requested provided, however, that no consent or consents delivered by certified or registered mail shall be deemed delivered until such consent or consents are actually received at the registered office. All consents properly delivered in accordance with this section shall be deemed to be recorded when so delivered. No written consent shall be effective to take the corporate action referred to therein unless, within sixty days of the earliest dated consent delivered to the corporation as required by this section, written consents signed by the holders of a sufficient number of shares to take such corporate action are so recorded. Prompt notice of the taking of the corporate action without a meeting by less than unanimous written consent shall be given to those stockholders who have not consented in writing. Any action taken pursuant to such written consent or consents of the stockholders shall have the same force and effect as if taken by the stockholders at a meeting thereof. 3 \ ARTICLE III DIRECTORS Section 1. General Powers. The business and affairs of the corporation shall be managed by or under the direction of the board of directors. Section 2. Number, Election and Term of Office. The number of directors shall be five (5). The directors shall be elected by a plurality of the votes of the shares present in person or represented by proxy at the meeting and entitled to vote in the election of directors. The directors shall be elected in this manner at the annual meeting of the stockholders, except as provided in Section 4 of this Article III. Each director elected shall hold office until a successor is duly elected and qualified or until his or her earlier death, resignation or removal as hereinafter provided. Section 3. Removal and Resignation. Any director or the entire board of directors may be removed at any time, with or without cause, by the holders of a majority of the shares then entitled to vote at an election of directors. Whenever the holders of any class or series are entitled to elect one or more directors by the provisions of the corporation's certificate of incorporation, the provisions of this section shall apply, in respect to the removal without cause or a director or directors so elected, to the vote of the holders of the outstanding shares of that class or series and not to the vote of the outstanding shares as a whole. Any director may resign at any time upon written notice to the corporation. Section 4. Vacancies. Unless otherwise provided by the corporation's certificate of incorporation, vacancies and newly created directorships resulting from any increase in the authorized number of directors may be filled by a majority vote of the holders of the corporation's outstanding stock entitled to vote thereon, or may be filled by the vote of a majority of the directors then in office, although less than a quorum, or by a sole remaining director. Each director so chosen shall hold office until a successor is duly elected and qualified or until his or her earlier death, resignation or removal as herein provided. Section 5. Annual Meetings. The annual meeting of each newly elected board of directors shall be held without other notice than this bylaw immediately after, and at the same place as, the annual meeting of stockholders. Section 6. Other Meetings and Notice. Regular meetings, other than the annual meeting, of the board of directors may be held without notice at such time and at such place as shall from time to time be determined by resolution of the board. Special meetings of the board of directors may be called by or at the request of the president or vice president on at least 24 hours notice to each director, either personally, by telephone, by mail, or by telegraph; in like manner and on like notice the president must call a special meeting on the written request of at least a majority of the directors. Section 7. Quorum, Required Vote and Adjournment. A majority of the total number of directors shall constitute a quorum for the transaction of business. The vote of a majority of directors present at a meeting at which a quorum is present shall be the act of the board of directors. If a quorum shall not be present at any meeting of the board of directors, the 4 directors present thereat may adjourn the meeting from time to time, without notice other than announcement at the meeting, until a quorum shall be present. Section 8. Committees. The board of directors may, by resolution passed by a majority of the whole board, designate one or more committees, each committee to consist of one or more of the directors of the corporation, which to the extent provided in such resolution or these bylaws shall have and may exercise the powers of the board of directors in the management and affairs of the corporation except as otherwise limited by law. The board of directors may designate one or more directors as alternate members of any committee, who may replace any absent or disqualified member at any meeting of the committee. Such committee or committees shall have such name or names as may be determined from time to time by resolution adopted by the board of directors. Each committee shall keep regular minutes of its meetings and report the same to the board of directors when required. Section 9. Committee Rules. Each committee of the board of directors may fix its own rules of procedure and shall hold its meetings as provided by such rules, except as may otherwise be provided by a resolution of the board of directors designating such committee. Unless otherwise provided in such a resolution, the presence of at least a majority of the members of the committee shall be necessary to constitute a quorum. In the event that a member and that member's alternate, if alternates are designated by the board of directors as provided in Section 8 of this Article III, of such committee is or are absent or disqualified, the member or members thereof present at any meeting and not disqualified from voting, whether or not such member or members constitute a quorum, may unanimously appoint another member of the board of directors to act at the meeting in place of any such absent or disqualified member. Section 10. Communications Equipment. Members of the board of directors or any committee thereof may participate in and act at any meeting of such board or committee through the use of a conference telephone or other communications equipment by means of which all persons participating in the meeting can hear each other, and participation in the meeting pursuant to this section shall constitute presence in person at the meeting. Section 11. Waiver of Notice and Presumption of Assent. Any member of the board of directors or any committee thereof who is present at a meeting shall be conclusively presumed to have waived notice of such meeting except when such member attends for the express purpose of objecting at the beginning of the meeting to the transaction of any business because the meeting is not lawfully called or convened. Such member shall be conclusively presumed to have assented to any action taken unless his or her dissent shall be entered in the minutes of the meeting or unless his or her written dissent to such action shall be filed with the person acting as the secretary of the meeting before the adjournment thereof or shall be forwarded by registered mail to the secretary of the corporation immediately after the adjournment of the meeting. Such right to dissent shall not apply to any member who voted in favor of such action. Section 12. Action by Written Consent. Unless otherwise restricted by the corporation's certificate of incorporation, any action required or permitted to be taken at any meeting of the board of directors, or of any committee thereof, may be taken without a meeting if all members of the board or committee, as the case may be, consent thereto in writing, and the writing or writings are filed with the minutes of proceedings of the board or committee. 5 ARTICLE IV OFFICERS Section 1. Number. The officers of the corporation shall be elected by the board of directors and shall consist of a chairman, if any is elected, a president, one or more vice presidents, a secretary, a treasurer, and such other officers and assistant officers as may be deemed necessary or desirable by the board of directors. Any number of offices may be held by the same person, except that no person may simultaneously hold the office of president and secretary. In its discretion, the board of directors may choose not to fill any office for any period as it may deem advisable. Section 2. Election and Term of Office. The officers of the corporation shall be elected annually by the board of directors at its first meeting held after each annual meeting of stockholders or as soon thereafter as conveniently may be. The president shall appoint other officers to serve for such terms as he or she deems desirable. Vacancies may be filled or new offices created and filled at any meeting of the board of directors. Each officer shall hold office until a successor is duly elected and qualified or until his or her earlier death, resignation or removal as hereinafter provided. Section 3. Removal. Any officer or agent elected by the board of directors may be removed by the board of directors whenever in its judgment the best interests of the corporation would be served thereby, but such removal shall be without prejudice to the contract rights, if any, of the person so removed. Section 4. Vacancies. Any vacancy occurring in any office because of death, resignation, removal, disqualification or otherwise, may be filled by the board of directors for the unexpired portion of the term by the board of directors then in office. Section 5. Compensation. Compensation of all officers shall be fixed by the board of directors, and no officer shall be prevented from receiving such compensation by virtue of his or her also being a director of the corporation. Section 6. The Chairman of the Board. The Chairman of the Board, if one shall have been elected, shall be a member of the board, an officer of the corporation, and, if present, shall preside at each meeting of the board of directors or shareholders. The Chairman of the Board shall, in the absence or disability of the president, act with all of the powers and be subject to all the restrictions of the president. He shall advise the president, and in the president's absence, other officers of the corporation, and shall perform such other duties as may from time to time be assigned to him by the board of directors. Section 7. The President. The president shall be the chief executive officer of the corporation. In the absence of the Chairman of the Board or if a Chairman of the Board shall have not been elected, the president shall preside at all meetings of the stockholders and board of directors at which he or she is present; subject to the powers of the board of directors, shall have general charge of the business, affairs and property of the corporation, and control over its officers, agents and employees; and shall see that all orders and resolutions of the board of 6 directors are carried into effect. The president shall have such other powers and perform such other duties as may be prescribed by the board of directors or as may be provided in these bylaws. Section 8. Vice-presidents. The vice-president, if any, or if there shall be more than one, the vice-presidents in the order determined by the board of directors shall, in the absence or disability of the president, act with all of the powers and be subject to all the restrictions of the president. The vice-presidents shall also perform such other duties and have such other powers as the board of directors, the president or these bylaws may, from time to time, prescribe. Section 9. The Secretary and Assistant Secretaries. The secretary shall attend all meetings of the board of directors, all meetings of the committees thereof and all meetings of the stockholders and record all the proceedings of the meetings in a book or books to be kept for that purpose. Under the president's supervision, the secretary shall give, or cause to be given, all notices required to be given by these bylaws or by law; shall have such powers and perform such duties as the board of directors, the president or these bylaws may, from time to time, prescribe; and shall have custody of the corporate seal of the corporation. The secretary, or an assistant secretary, shall have authority to affix the corporate seal to any instrument requiring it and when so affixed, it may be attested by his or her signature or by the signature of such assistant secretary. The board of directors may give general authority to any other officer to affix the seal of the corporation and to attest the affixing by his or her signature. The assistant secretary, or if there be more than one, the assistant secretaries in the order determined by the board of directors, shall, in the absence or disability of the secretary, perform the duties and exercise the powers of the secretary and shall perform such other duties and have such other powers as the board of directors, the president, or secretary may, from time to time, prescribe. Section 10. The Treasurer and Assistant Treasurer. The treasurer shall have the custody of the corporate funds and securities; shall keep full and accurate accounts of receipts and disbursements in books belonging to the corporation; shall deposit all monies and other valuable effects in the name and to the credit of the corporation as may be ordered by the board of directors; shall cause the funds of the corporation to be disbursed when such disbursements have been duly authorized, taking proper vouchers for such disbursements; and shall render to the president and the board of directors, at its regular meeting or when the board of directors so requires, an account of the corporation; shall have such powers and perform such duties as the board of directors, the president or these bylaws may, from time to time, prescribe. If required by the board of directors, the treasurer shall give the corporation a bond (which shall be rendered every six years) in such sums and with such surety or sureties as shall be satisfactory to the board of directors for the faithful performance of the duties of the office of treasurer and for the restoration to the corporation, in case of death, resignation, retirement, or removal from office, of all books, papers, vouchers, money, and other property of whatever kind in the possession or under the control of the treasurer belonging to the corporation. The assistant treasurer, or if there shall be more than one, the assistant treasurers in the order determined by the board of directors, shall in the absence or disability of the treasurer, perform the duties and exercise the powers of the treasurer. The assistant treasurers shall perform such other duties and have such other powers as the board of directors, the president or treasurer may, from time to time, prescribe. 7 Section 11. Other Officers, Assistant Officers and Agents. Officers, assistant officers and agents, if any, other than those whose duties are provided for in these bylaws, shall have such authority and perform such duties as may from time to time be prescribed by resolution of the board of directors. Section 12. Absence or Disability of Officers. In the case of the absence or disability of any officer of the corporation and of any person hereby authorized to act in such officer's place during such officer's absence or disability, the board of directors may by resolution delegate the powers and duties of such officer to any other officer or to any director, or to any other person whom it may select. ARTICLE V INDEMNIFICATION OF OFFICERS, DIRECTORS AND OTHERS Section 1. Nature of Indemnity. Each person who was or is made a party or is threatened to be made a party to or is involved in any action, suit or proceeding, whether civil, criminal, administrative or investigative (hereinafter a "proceeding"), by reason of the fact that he or a person of whom he is the legal representative, is or was a director or officer, of the corporation or is or was serving at the request of the corporation as a director, officer, employee, fiduciary, or agent of another corporation or of a partnership, joint venture, trust or other enterprise, including service with respect to employee benefit plans, whether the basis of such proceeding is alleged action in an official capacity as a director, officer, employee, fiduciary or agent or in any other capacity while serving as a director, officer, employee, fiduciary or agent, shall be indemnified and held harmless by the corporation to the fullest extent which it is empowered to do so by the General Corporation Law of the State of Delaware, as the same exists or may hereafter be amended (but, in the case of any such amendment, only to the extent that such amendment permits the corporation to provide broader indemnification rights than said law permitted the corporation to provide prior to such amendment) against all expense, liability and loss (including attorneys' fees actually and reasonably incurred by such person in connection with such proceeding and such indemnification shall inure to the benefit of his or her heirs, executors and administrators; provided, however, that, except as provided in Section 2 hereof, the corporation shall indemnify any such person seeking indemnification in connection with a proceeding initiated by such person only if such proceeding was authorized by the board of directors of the corporation. The right to indemnification conferred in this Article V shall be a contract right and, subject to Sections 2 and 5 hereof, shall include the right to be paid by the corporation the expenses incurred in defending any such proceeding in advance of its final disposition. The corporation may, by action of its board of directors, provide indemnification to employees and agents of the corporation with the same scope and effect as the foregoing indemnification of directors and officers. Section 2. Procedure for Indemnification of Directors and Officers. Any indemnification of a director or officer of the corporation under Section 1 of this Article V or advance of expenses under Section 5 of this Article V shall be made promptly, and in any event within 30 days, upon the written request of the director or officer. If a determination by the corporation that the director or officer is entitled to indemnification pursuant to this Article V is 8 required, and the corporation fails to respond within sixty days to a written request for indemnity, the corporation shall be deemed to have approved the request. If the corporation denies a written request for indemnification or advancing of expenses, in whole or in part, or if payment in full pursuant to such request is not made within 30 days, the right to indemnification or advances as granted by this Article V shall be enforceable by the director or officer in any court of competent jurisdiction. Such person's costs and expenses incurred in connection with successfully establishing his or her right to indemnification, in whole or in part, in any such action shall also be indemnified by the corporation. It shall be a defense to any such action (other than an action brought to enforce a claim for expenses incurred in defending any proceeding in advance of its final disposition where the required undertaking, if any, has been tendered to the corporation) that the claimant has not met the standards of conduct which make it permissible under the General Corporation Law of the State of Delaware for the corporation to indemnify the claimant for the amount claimed, but the burden of such defense shall be on the corporation. Neither the failure of the corporation (including its board of directors, independent legal counsel, or its stockholders) to have made a determination prior to the commencement of such action that indemnification of the claimant is proper in the circumstances because he or she has met the applicable standard of conduct set forth in the General Corporation Law of the State of Delaware, nor an actual determination by the corporation (including its board of directors, independent legal counsel, or its stockholders) that the claimant has not met such applicable standard of conduct, shall be a defense to the action or create a presumption that the claimant has not met the applicable standard of conduct. Section 3. Nonexclusivity of Article V. The rights to indemnification and the payment of expenses incurred in defending a proceeding in advance of its final disposition conferred in this Article V shall not be exclusive of any other right which any person may have or hereafter acquire under any statute, provision of the corporation's certificate of incorporation, by-law, agreement, vote of stockholders or disinterested directors or otherwise. Section 4. Insurance. The corporation may purchase and maintain insurance on its own behalf and on behalf of any person who is or was a director, officer, employee, fiduciary, or agent of the corporation or was serving at the request of the corporation as a director, officer, employee or agent of another corporation, partnership, joint venture, trust or other enterprise against any liability asserted against him or her and incurred by him or her in any such capacity, whether or not the corporation would have the power to indemnify such person against such liability under this Article V. Section 5. Expenses. Expenses incurred by any person described in Section 1 of this Article V in defending a proceeding shall be paid by the corporation in advance of such proceeding's final disposition unless otherwise determined by the board of directors in the specific case upon receipt of an undertaking by or on behalf of the director or officer to repay such amount if it shall ultimately be determined that he or she is not entitled to be indemnified by the corporation. Such expenses incurred by other employees and agents may be so paid upon such terms and conditions, if any, as the board of directors deems appropriate. Section 6. Employees and Agents. Persons who are not covered by the foregoing provisions of this Article V and who are or were employees or agents of the corporation, or who are or were serving at the request of the corporation as employees or agents of another 9 corporation, partnership, joint venture, trust or other enterprise, may be indemnified to the extent authorized at any time or from time to time by the board of directors. Section 7. Contract Rights. The provisions of this Article V shall be deemed to be a contract right between the corporation and each director or officer who serves in any such capacity at any time while this Article V and the relevant provisions of the General Corporation Law of the State of Delaware or other applicable law are in effect, and any repeal or modification of this Article V or any such law shall not affect any rights or obligations then existing with respect to any state of facts or proceeding then existing. Section 8. Merger or Consolidation. For purposes of this Article V, references to "the corporation" shall include, in addition to the resulting corporation, any constituent corporation (including any constituent of a constituent) absorbed in a consolidation or merger which, if its separate existence had continued, would have had power and authority to indemnify its directors, officers, and employees or agents, so that any person who is or was a director, officer, employee or agent of such constituent corporation, or is or was serving at the request of such constituent corporation as a director, officer, employee or agent of another corporation, partnership, joint venture, trust or other enterprise, shall stand in the same position under this Article V with respect to the resulting or surviving corporation as he or she would have with respect to such constituent corporation if its separate existence had continued. ARTICLE VI CERTIFICATES OF STOCK Section 1. Form. Every holder of stock in the corporation shall be entitled to have a certificate, signed by, or in the name of the corporation by the chairman of the board, the president or a vice-president and the secretary or an assistant secretary of the corporation, certifying the number of shares owned by such holder in the corporation. If such a certificate is countersigned (1) by a transfer agent or an assistant transfer agent other than the corporation or its employee or (2) by a registrar, other than the corporation or its employee, the signature of any such chairman of the board, president, vice-president, secretary, or assistant secretary may be facsimiles. In case any officer or officers who have signed, or whose facsimile signature or signatures have been used on, any such certificate or certificates shall cease to be such officer or officers of the corporation whether because of death, resignation or otherwise before such certificate or certificates have been delivered by the corporation, such certificate or certificates may nevertheless be issued and delivered as though the person or persons who signed such certificate or certificates or whose facsimile signature or signatures have been used thereon had not ceased to be such officer or officers of the corporation. All certificates for shares shall be consecutively numbered or otherwise identified. The name of the person to whom the shares represented thereby are issued, with the number of shares and date of issue, shall be entered on the books of the corporation. Shares of stock of the corporation shall only be transferred on the books of the corporation by the holder of record thereof or by such holder's attorney duly authorized in writing, upon surrender to the corporation of the certificate or certificates for such shares endorsed by the appropriate person or persons, with such evidence of the authenticity of such endorsement, transfer, authorization, and other matters as the corporation may reasonably 10 require, and accompanied by all necessary stock transfer stamps. In that event, it shall be the duty of the corporation to issue a new certificate to the person entitled thereto, cancel the old certificate or certificates, and record the transaction on its books. The board of directors may appoint a bank or trust company organized under the laws of the United States or any state thereof to act as its transfer agent or registrar, or both in connection with the transfer of any class or series of securities of the corporation. Section 2. Lost Certificates. The board of directors may direct a new certificate or certificates to be issued in place of any certificate or certificates previously issued by the corporation alleged to have been lost, stolen, or destroyed, upon the making of an affidavit of that fact by the person claiming the certificate of stock to be lost, stolen, or destroyed. When authorizing such issue of a new certificate or certificates, the board of directors may, in its discretion and as a condition precedent to the issuance thereof, require the owner of such lost, stolen, or destroyed certificate or certificates, or his or her legal representative, to give the corporation a bond sufficient to indemnify the corporation against any claim that may be made against the corporation on account of the loss, theft or destruction of any such certificate or the issuance of such new certificate. Section 3. Fixing a Record Date for Stockholder Meetings. In order that the corporation may determine the stockholders entitled to notice of or to vote at any meeting of stockholders or any adjournment thereof, the board of directors may fix a record date, which record date shall not precede the date upon which the resolution fixing the record date is adopted by the board of directors, and which record date shall not be more than sixty nor less than ten days before the date of such meeting. If no record date is fixed by the board of directors, the record date for determining stockholders entitled to notice of or to vote at a meeting of stockholders shall be the close of business on the next day preceding the day on which notice is given, or if notice is waived, at the close of business on the day next preceding the day on which the meeting is held. A determination of stockholders of record entitled to notice of or to vote at a meeting of stockholders shall apply to any adjournment of the meeting; provided, however, that the board of directors may fix a new record date for the adjourned meeting. Section 4. Fixing a Record Date for Action by Written Consent. In order that the corporation may determine the stockholders entitled to consent to corporate action in writing without a meeting, the board of directors may fix a record date, which record date shall not precede the date upon which the resolution fixing the record date is adopted by the board of directors, and which date shall not be more than ten days after the date upon which the resolution fixing the record date is adopted by the board of directors. If no record date has been fixed by the board of directors, the record date for determining stockholders entitled to consent to corporate action in writing without a meeting, when no prior action by the board of directors is required by statute, shall be the first date on which a signed written consent setting forth the action taken or proposed to be taken is delivered to the corporation by delivery to its registered office in the State of Delaware, its principal place of business, or an officer or agent of the corporation having custody of the book in which proceedings of meetings of stockholders are recorded. Delivery made to the corporation's registered office shall be by hand or by certified or registered mail, return receipt requested. If no record date has been fixed by the board of directors and prior action by the board of directors is required by statute, the record date for determining stockholders entitled to consent to corporate action in writing without a meeting 11 shall be at the close of business on the day on which the board of directors adopts the resolution taking such prior action. Section 5. Fixing a Record Date for Other Purposes. In order that the corporation may determine the stockholders entitled to receive payment of any dividend or other distribution or allotment or any rights or the stockholders entitled to exercise any rights in respect of any change, conversion or exchange of stock, or for the purposes of any other lawful action, the board of directors may fix a record date, which record date shall not precede the date upon which the resolution fixing the record date is adopted, and which record date shall be not more than sixty days prior to such action. If no record date is fixed, the record date for determining stockholders for any such purpose shall be at the close of business on the day on which the board of directors adopts the resolution relating thereto. Section 6. Subscriptions for Stock. Unless otherwise provided for in the subscription agreement, subscriptions for shares shall be paid in full at such time, or in such installments and at such times, as shall be determined by the board of directors. Any call made by the board of directors for payment on subscriptions shall be uniform as to all shares of the same class or as to all shares of the same series. In case of default in the payment of any installment or call when such payment is due, the corporation may proceed to collect the amount due in the same manner as any debt due the corporation. ARTICLE VII GENERAL PROVISIONS Section 1. Dividends. Dividends upon the capital stock of the corporation, subject to the provisions of the corporation's certificate of incorporation, if any, may be declared by the board of directors at any regular or special meeting, pursuant to law. Dividends may be paid in cash, in property, or in shares of the capital stock, subject to the provisions of the corporation's certificate of incorporation. Before payment of any dividend, there may be set aside out of any funds of the corporation available for dividends such sum or sums as the directors from time to time, in their absolute discretion, think proper as a reserve or reserves to meet contingencies, or for equalizing dividends, or for repairing or maintaining any property of the corporation, or any other purpose and the directors may modify or abolish any such reserve in the manner in which it was created. Section 2. Checks, Drafts or Orders. All checks, drafts, or other orders for the payment of money by or to the corporation and all notes and other evidences of indebtedness issued in the name of the corporation shall be signed by such officer or officers, agent or agents of the corporation, and in such manner, as shall be determined by resolution of the board of directors or a duly authorized committee thereof. Section 3. Contracts. The board of directors may authorize any officer or officers, or any agent or agents, of the corporation to enter into any contract or to execute and deliver any instrument in the name of and on behalf of the corporation, and such authority may be general or confined to specific instances. 12 Section 4. Loans. The corporation may lend money to, or guarantee any obligation of, or otherwise assist any officer or other employee of the corporation or of its subsidiary, including any officer or employee who is a director of the corporation or its subsidiary, whenever, in the judgment of the directors, such loan, guaranty or assistance may reasonably be expected to benefit the corporation. The loan, guaranty or other assistance may be with or without interest, and may be unsecured, or secured in such manner as the board of directors shall approve, including, without limitation, a pledge of shares of stock of the corporation. Nothing in this section contained shall be deemed to deny, limit or restrict the powers of guaranty or warranty of the corporation at common law or under any statute. Section 5. Fiscal Year. The fiscal year of the corporation shall be fixed by resolution of the board of directors. Section 6. Corporate Seal. The board of directors may provide a corporate seal which shall be in the form of a circle and shall have inscribed thereon the name of the corporation and the words "Corporate Seal, Delaware". The seal may be used by causing it or a facsimile thereof to be impressed or affixed or reproduced or otherwise. Section 7. Voting Securities Owned By Corporation. Voting securities in any other corporation held by the corporation shall be voted by the president, unless the board of directors specifically confers authority to vote with respect thereto, which authority may be general or confined to specific instances, upon some other person or officer. Any person authorized to vote securities shall have the power to appoint proxies, with general power of substitution. Section 8. Inspection of Books and Records. Any stockholder of record, in person or by attorney or other agent, shall, upon written demand under oath stating the purpose thereof, have the right during the usual hours for business to inspect for any proper purpose the corporation's stock ledger, a list of its stockholders, and its other books and records, and to make copies or extracts therefrom. A proper purpose shall mean any purpose reasonably related to such person's interest as a stockholder. In every instance where an attorney or other agent shall be the person who seeks the right to inspection, the demand under oath shall be accompanied by a power of attorney or such other writing which authorizes the attorney or other agent to so act on behalf of the stockholder. The demand under oath shall be directed to the corporation at its registered office in the State of Delaware or at its principal place of business. Section 9. Section Headings. Section headings in these bylaws are for convenience of reference only and shall not be given any substantive effect in limiting or otherwise construing any provision herein. Section 10. Inconsistent Provisions. In the event that any provision of these bylaws is or becomes inconsistent with any provision of the corporation's certificate of incorporation, the General Corporation Law of the State of Delaware or any other applicable law, the provision of these bylaws shall not be given any effect to the extent of such inconsistency but shall otherwise be given full force and effect. 13 ARTICLE VIII AMENDMENTS These bylaws may be amended, altered, or repealed and new bylaws adopted at any meeting of the board of directors by a majority vote. The fact that the power to adopt, amend, alter, or repeal the bylaws has been conferred upon the board of directors shall not divest the stockholders of the same powers. 14 EX-31.1 3 c09432a1exv31w1.txt CERTIFICATION OF CHIEF EXECUTIVE OFFICER EXHIBIT 31.1 RULE 15d-14(a) CERTIFICATION OF CEO CERTIFICATIONS I, William M. Barrett, President and Chief Executive Officer of Neenah Foundry Company, certify that: 1. I have reviewed this report on Form 10-Q/A of Neenah Foundry Company; 2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report; 3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report; 4. The registrant's other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) for the registrant and have: a) Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared; b) Evaluated the effectiveness of the registrant's disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and c) Disclosed in this report any changes in the registrant's internal control over financial reporting that occurred during the registrant's most recent fiscal quarter (the registrant's fourth quarter in the case of an annual report) that has materially affected or is reasonably likely to materially affect, the registrant's internal control over financial reporting; and 5. The registrant's other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant's auditors and the audit committee of the registrant's board of directors (or persons performing the equivalent function): a) All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant's ability to record, process, summarize and report financial information; and b) Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal control over financial reporting. DATE: October 26, 2006 /s/William M. Barrett ------------------------------------- William M. Barrett President and Chief Executive Officer EX-31.2 4 c09432a1exv31w2.txt CERTIFICATION OF CHIEF FINANCIAL OFFICER EXHIBIT 31.2 RULE 15d-14(a) CERTIFICATION OF CFO CERTIFICATIONS I, Gary W. LaChey, Corporate Vice President - Finance and Chief Financial Officer of Neenah Foundry Company, certify that: 1. I have reviewed this report on Form 10-Q/A of Neenah Foundry Company; 2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report; 3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report; 4. The registrant's other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) for the registrant and have: a) Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared; b) Evaluated the effectiveness of the registrant's disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and c) Disclosed in this report any changes in the registrant's internal control over financial reporting that occurred during the registrant's most recent fiscal quarter (the registrant's fourth quarter in the case of an annual report) that has materially affected or is reasonably likely to materially affect, the registrant's internal control over financial reporting; and 5. The registrant's other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant's auditors and the audit committee of the registrant's board of directors (or persons performing the equivalent function): a) All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant's ability to record, process, summarize and report financial information; and b) Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal control over financial reporting. DATE: October 26, 2006 /s/Gary W. LaChey -------------------------------------- Gary W. LaChey Corporate Vice President - Finance and Chief Financial Officer EX-32.1 5 c09432a1exv32w1.txt CERTIFICATIONS EXHIBIT 32 Certification of the President and Chief Executive Officer and Corporate Vice President - Finance and Chief Financial Officer Pursuant to 18 U.S.C. Section 1350 As adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 Solely for the purposes of complying with 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, we, the undersigned President and Chief Executive Officer, and Corporate Vice President - Finance and Chief Financial Officer of Neenah Foundry Company (the "Company"), hereby certify, based on our knowledge, that the Quarterly Report on Form 10-Q/A of the Company for the quarter ended June 30, 2006 (the "Report") fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934 and that information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company. DATE: October 26, 2006 /s/William M. Barrett -------------------------------------- William M. Barrett President and Chief Executive Officer /s/Gary W. LaChey -------------------------------------- Gary W. LaChey Corporate Vice President - Finance and Chief Financial Officer -----END PRIVACY-ENHANCED MESSAGE-----