-----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, WpSEFfw1g9EsVDeaBoOzFngyjApL6oeVB6sABs9d3tAle09g/qp3g9i5WIatXiY6 AhqBK/h++21YH7FLd/OY4w== 0001047469-98-031491.txt : 19980817 0001047469-98-031491.hdr.sgml : 19980817 ACCESSION NUMBER: 0001047469-98-031491 CONFORMED SUBMISSION TYPE: 10-Q PUBLIC DOCUMENT COUNT: 3 CONFORMED PERIOD OF REPORT: 19980630 FILED AS OF DATE: 19980814 SROS: NYSE FILER: COMPANY DATA: COMPANY CONFORMED NAME: UNOVA INC CENTRAL INDEX KEY: 0001044590 STANDARD INDUSTRIAL CLASSIFICATION: SPECIAL INDUSTRY MACHINERY (NO METALWORKING MACHINERY) [3550] IRS NUMBER: 954647021 STATE OF INCORPORATION: DE FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 10-Q SEC ACT: SEC FILE NUMBER: 001-13279 FILM NUMBER: 98688840 BUSINESS ADDRESS: STREET 1: 380 NORTH CRESCENT DRIVE CITY: BEVERLY HILLS STATE: CA ZIP: 90210 BUSINESS PHONE: 3108882500 MAIL ADDRESS: STREET 1: 380 NORTH CRESCENT DRIVE CITY: BEVERLY HILLS STATE: CA ZIP: 90210 10-Q 1 10-Q UNITED STATES SECURITIES AND EXCHANGE COMMISSION WASHINGTON, D.C. 20549 FORM 10-Q (Mark One) [X] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the quarterly period ended June 30, 1998 OR [ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 Commission file number 001-13279 UNOVA, INC. (Exact name of registrant as specified in its charter) DELAWARE 95-4647021 (State or other jurisdiction of (I.R.S. Employer incorporation or organization) Identification No.) 360 NORTH CRESCENT DRIVE BEVERLY HILLS, CALIFORNIA 90210-4867 (Address of principal executive offices) (Zip Code) REGISTRANT'S TELEPHONE NUMBER, INCLUDING AREA CODE: (310) 888-2500 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 period that the Registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes [X] No [ ] On July 31, 1998 there were 54,726,511 shares of Common Stock outstanding. Page 1 of 17 UNOVA, INC. INDEX REPORT ON FORM 10-Q FOR THE QUARTER ENDED JUNE 30, 1998 PAGE NUMBER ------ PART I. FINANCIAL INFORMATION ITEM 1. Financial Statements Consolidated and Combined Statements of Operations Six months ended June 30, 1998 (unaudited) and June 30, 1997 (unaudited) 3 Consolidated and Combined Statements of Operations Three months ended June 30, 1998 (unaudited) and June 30, 1997 (unaudited) 4 Consolidated Balance Sheets June 30, 1998 (unaudited) and December 31, 1997 5 Consolidated and Combined Statements of Cash Flows Six months ended June 30, 1998 (unaudited) and June 30, 1997 (unaudited) 6 Notes to Consolidated and Combined Financial Statements (unaudited) 7 ITEM 2. Management's Discussion and Analysis of Financial Condition and Results of Operations 10 PART II. OTHER INFORMATION ITEM 6. Exhibits and Reports on Form 8-K 13 Signatures 14 2 PART I. FINANCIAL INFORMATION ITEM 1. FINANCIAL STATEMENTS UNOVA INC. CONSOLIDATED AND COMBINED STATEMENTS OF OPERATIONS (THOUSANDS OF DOLLARS, EXCEPT PER SHARE AMOUNTS) (UNAUDITED)
SIX MONTHS ENDED JUNE 30, 1998 1997 ---------- ---------- Sales and Service Revenues $678,627 $ 732,343 ---------- ---------- Costs and Expenses Cost of sales 440,079 512,516 Selling, general and administrative 175,098 152,671 Depreciation and amortization 24,569 17,035 Acquired in-process research and development charge 203,300 Interest, net 9,774 7,099 ---------- ---------- Total Costs and Expenses 649,520 892,621 ---------- ---------- Earnings (Loss) before Taxes on Income 29,107 (160,278) Taxes on Income (12,109) (17,208) ---------- ---------- Net Earnings (Loss) $ 16,998 $(177,486) ---------- ---------- ---------- ---------- Basic and Diluted Earnings (Loss) per Share $ 0.31 $ (3.29) ---------- ---------- ---------- ---------- Shares Used in Computing Basic Earnings (Loss) per Share 54,511,388 53,891,534 Shares Used in Computing Diluted Earnings (Loss) per Share 54,672,525 53,891,534
See accompanying notes to consolidated and combined financial statements. 3 UNOVA INC. CONSOLIDATED AND COMBINED STATEMENTS OF OPERATIONS (THOUSANDS OF DOLLARS, EXCEPT PER SHARE AMOUNTS) (UNAUDITED)
THREE MONTHS ENDED JUNE 30, 1998 1998 1997 ---------- ---------- Sales and Service Revenues $345,222 $ 409,277 ---------- ---------- Costs and Expenses Cost of sales 221,780 281,507 Selling, general and administrative 89,352 89,052 Depreciation and amortization 12,929 9,811 Acquired in-process research and development charge 203,300 Interest, net 5,337 5,181 ---------- ---------- Total Costs and Expenses 329,398 588,851 ---------- ---------- Earnings (Loss) before Taxes on Income 15,824 (179,574) Taxes on Income (6,583) (9,490) ---------- ---------- Net Earnings (Loss) $ 9,241 $(189,064) ---------- ---------- ---------- ---------- Basic and Diluted Earnings (Loss) per Share $ 0.17 $ (3.51) ---------- ---------- ---------- ---------- Shares Used in Computing Basic Earnings (Loss) per Share 54,512,570 53,891,534 Shares Used in Computing Diluted Earnings (Loss) per Share 54,832,912 53,891,534
See accompanying notes to consolidated and combined financial statements. 4 UNOVA, INC. CONSOLIDATED BALANCE SHEETS (THOUSANDS OF DOLLARS)
JUNE 30, DECEMBER 31, 1998 1997 ---------- ------------ (UNAUDITED) ASSETS Current Assets Cash and cash equivalents $ 21,351 $ 13,685 Accounts receivable, net 478,704 448,079 Inventories, net of progress billings 182,474 150,537 Deferred tax assets 99,976 106,694 Other current assets 21,012 30,072 ---------- ---------- Total Current Assets 803,517 749,067 Property, Plant and Equipment, at cost 348,884 339,462 Less Accumulated Depreciation (183,184) (181,782) ---------- ---------- Property, Plant and Equipment, Net 165,700 157,680 Goodwill and Other Intangibles, Net 356,179 366,098 Other Assets 119,806 83,513 ---------- ---------- Total Assets $1,445,202 $1,356,358 ---------- ---------- ---------- ---------- LIABILITIES AND SHAREHOLDERS' INVESTMENT Current Liabilities Accounts payable $ 305,488 $ 311,759 Payrolls and related expenses 74,316 72,909 Notes payable and current portion of long-term obligations 154,486 86,645 ---------- ---------- Total Current Liabilities 534,290 471,313 ---------- ---------- Long-term Obligations 215,951 216,938 ---------- ---------- Deferred Tax Liabilities 24,916 22,918 ---------- ---------- Other Long-term Liabilities 53,587 55,700 ---------- ---------- Commitments and Contingencies Shareholders' Investment Common stock 547 545 Additional paid-in capital 611,320 603,743 Retained earnings (deficit) 8,957 (8,041) Accumulated other comprehensive income - cumulative currency translation adjustment (4,366) (6,758) ---------- ---------- Total Shareholders' Investment 616,458 589,489 ---------- ---------- Total Liabilities and Shareholders' Investment $1,445,202 $1,356,358 ---------- ---------- ---------- ----------
See accompanying notes to consolidated and combined financial statements. 5 UNOVA, INC. CONSOLIDATED AND COMBINED STATEMENTS OF CASH FLOWS (THOUSANDS OF DOLLARS) (UNAUDITED)
SIX MONTHS ENDED JUNE 30, 1998 1997 --------- --------- Cash and Cash Equivalents at Beginning of Period $ 13,685 $ 149,467 --------- --------- Cash Flows from Operating Activities: Net earnings (loss) 16,998 (177,486) Adjustments to reconcile net earnings (loss) to net cash used in operating activities: Acquired in-process research and development charge 203,300 Depreciation and amortization 24,569 17,035 Deferred taxes 8,716 536 Change in accounts receivable (30,625) (15,297) Change in inventories (31,937) (4,224) Change in other current assets 7,560 4,767 Change in accounts payable (1,947) (28,958) Change in pensions (7,369) (5,608) Other operating activities 1,543 (5,022) --------- --------- Net Cash Used in Operating Activities (12,492) (10,957) --------- --------- Cash Flows from Investing Activities: Capital expenditures (30,777) (11,011) Sale of property, plant and equipment 5,180 794 Acquisition of businesses, net of cash acquired (20,100) (377,546) Other investing activities (3,296) 4,267 --------- --------- Net Cash Used in Investing Activities (48,993) (383,496) --------- --------- Cash Flows from Financing Activities Proceeds from borrowings 289,507 24,709 Repayment of borrowings (223,611) (72,120) Net transactions with Western Atlas Inc. 195,566 Increase in due to Western Atlas Inc. 118,670 Other financing activities 3,255 --------- --------- Net Cash Provided by Financing Activities 69,151 266,825 --------- --------- Resulting in Increase (Decrease) in Cash and Cash Equivalents 7,666 (127,628) --------- --------- Cash and Cash Equivalents at End of Period $ 21,351 $ 21,839 --------- --------- --------- --------- Supplemental disclosure of cash flow information: Interest paid $ 6,900 $ 3,261 Income taxes paid (refunded) $ (6,863) $ 19,891
See accompanying notes to consolidated and combined financial statements. 6 UNOVA, INC. NOTES TO CONSOLIDATED AND COMBINED FINANCIAL STATEMENTS SIX MONTHS ENDED JUNE 30, 1998 (UNAUDITED) 1. UNOVA, Inc. ("UNOVA" or the "Company") became an independent public company on October 31, 1997 (the "Distribution Date"), when all of the UNOVA common stock was distributed to holders of common stock of Western Atlas Inc. ("WAI") in the form of a dividend. Every WAI shareholder of record on October 24, 1997 was entitled to receive one share of UNOVA common stock for each WAI share of common stock held of record. The statement of operations and statement of cash flows for the six and three months ended June 30, 1997 contain the historical accounts and operations of the former WAI businesses that now comprise the Company. The amounts included in this report are unaudited; however in the opinion of management, all adjustments necessary for a fair presentation of results of operations, financial position and cash flows for the stated periods have been included. These adjustments are of a normal recurring nature. It is suggested that these consolidated and combined financial statements be read in conjunction with the audited financial statements and notes thereto included in the Company's Annual Report on Form 10-K for the year ended December 31, 1997. The results of operations for the interim periods presented are not necessarily indicative of operating results for the entire year. 2. General and administrative costs include allocated charges from WAI of $9.1 million and $4.0 million for the six and three months ended June 30, 1997, respectively. 3. Inventories consist of the following:
JUNE 30, DECEMBER 31, 1998 1997 -------- ------------ (THOUSANDS OF DOLLARS) Raw materials and work in process $145,188 $124,501 Finished goods 46,428 38,074 Less progress billings (9,142) (12,038) -------- -------- Net inventories $182,474 $150,537 -------- -------- -------- --------
4. Net interest expense is composed of the following:
SIX MONTHS ENDED THREE MONTHS ENDED JUNE 30, JUNE 30, 1998 1997 1998 1997 ---------------------- ---------------------- (THOUSANDS OF DOLLARS) (THOUSANDS OF DOLLARS) Interest expense $11,022 $ 9,264 $5,905 $5,698 Interest income (1,248) (2,165) (568) (517) ------- ------- ------ ------ Net interest expense $ 9,774 $ 7,099 $5,337 $5,181 ------- ------- ------ ------ ------- ------- ------ ------
Interest expense includes allocated charges from WAI of $6.3 million and $3.9 million for the six and three months ended June 30, 1997, respectively. 7 NOTES TO CONSOLIDATED AND COMBINED FINANCIAL STATEMENTS (CONTINUED) 5. For the six and three months ended June 30, 1998, basic earnings per share is calculated using the weighted average number of common shares outstanding for the period while diluted earnings per share is computed on the basis of the weighted average number of common shares outstanding plus the effect of outstanding stock options using the "treasury stock" method. Shares used for basic and diluted earnings per share were computed as follows:
SIX MONTHS THREE MONTHS ENDED ENDED JUNE 30, 1998 JUNE 30, 1998 ------------- ------------- Weighted average common shares - Basic 54,511,388 54,512,570 Dilutive effect of stock options 161,137 320,342 ---------- ---------- Weighted shares - Diluted 54,672,525 54,832,912 ---------- ---------- ---------- ----------
For the six and three months ended June 30, 1997, the Company used the outstanding shares of WAI common stock at June 30, 1997 to calculate both basic and diluted earnings per share. At June 30, 1998, Company employees and directors held options to purchase 113,700 shares of Company common stock that were antidilutive to the earnings per share computation. These options could become dilutive in future periods if the average market price of the Company's common stock exceeds the exercise price of the outstanding options. 6. In January 1998, the Company adopted Statement of Financial Accounting Standards No. 130 ("SFAS 130"), Reporting Comprehensive Income. SFAS 130 states that all items that are required to be recognized under accounting standards as components of comprehensive income be reported in the financial statements. The Company's comprehensive income amounts were computed as follows:
SIX MONTHS ENDED THREE MONTHS ENDED JUNE 30, JUNE 30, 1998 1997 1998 1997 -------------------------- ------------------------ (THOUSANDS OF DOLLARS) (THOUSANDS OF DOLLARS) Net earnings (loss) $ 16,998 $(177,486) $ 9,241 $(189,064) Foreign currency translation adjustments 2,392 (2,377) 643 343 Income tax benefit (expense) related to foreign currency translation adjustments (1,005) 951 (270) (137) -------- --------- ------- --------- Comprehensive income (loss) $ 18,385 $(178,912) $ 9,614 $(188,858) -------- --------- ------- --------- -------- --------- ------- ---------
7. In March 1998, the Company sold $200.0 million principal amount of senior unsecured debt. The sale comprised $100.0 million of 6.875% seven-year notes, at a price of 99.867 and $100.0 million of 7.00% ten-year notes, at a price of 99.856. Including underwriting fees, discounts and effects of forward rate agreements entered into by the Company to hedge the interest rates on the debt, the effective interest rates on the seven-year and ten-year notes are 6.982% and 7.217%, respectively. The net proceeds of approximately $198.0 million were used by the Company to repay outstanding debt. 8 NOTES TO CONSOLIDATED AND COMBINED FINANCIAL STATEMENTS (CONTINUED) 8. In June 1998, the Company acquired the radio frequency identification ("RFID") business unit of Amtech Corporation known as the Transportation Systems Group ("TSG"). TSG is a supplier of wireless data technologies for electronic toll collection, rail and motor fleet tracking, and access control to parking and other structures. The Company had previously purchased $10.0 million of Amtech common stock which was applied towards the purchase price of TSG. Subsequent to the close of the second quarter, UNOVA acquired R&B Machine Tool Company, a specialty machine and retooling company. This acquisition was funded using short-term uncommitted credit lines. 9 UNOVA, INC. ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS Sales and service revenues and segment operating profit for the six and three months ended June 30, 1998 and 1997 are summarized below. The $203.3 million second quarter charge for acquired in-process research and development has been excluded from the operating profit of the Automated Data Systems segment in the 1997 six and three month periods presented below:
SIX MONTHS ENDED THREE MONTHS ENDED JUNE 30, JUNE 30, 1998 1997 1998 1997 ------------------------ ------------------------ (THOUSANDS OF DOLLARS) (THOUSANDS OF DOLLARS) SALES AND SERVICE REVENUES Automated Data Systems $381,983 $281,986 $195,117 $170,536 Industrial Automation Systems 296,644 450,357 150,105 238,741 -------- -------- -------- -------- Total Sales and Service Revenues $678,627 $732,343 $345,222 $409,277 -------- -------- -------- -------- -------- -------- -------- -------- SEGMENT OPERATING PROFIT Automated Data Systems $ 25,539 $ 11,507 $ 13,892 $ 4,079 Industrial Automation Systems 26,103 49,163 14,982 29,509 -------- -------- -------- -------- Total Segment Operating Profit $ 51,642 $ 60,670 $ 28,874 $ 33,588 -------- -------- -------- -------- -------- -------- -------- --------
Total sales and service revenues decreased $53.7 million or 7% for the six months ended June 30, 1998 compared with the corresponding prior period. Total segment operating profit decreased $9.0 million or 15% for the six months ended June 30, 1998 compared with the corresponding prior period. Total sales and service revenues decreased $64.1 million or 16% for the three months ended June 30, 1998 compared with the corresponding prior period. Total segment operating profit decreased $4.7 million or 14% for the three months ended June 30, 1998 compared with the corresponding prior period. Cost of sales as a percentage of sales decreased from 70% to 65% from the six months ended June 30, 1997 to the six months ended June 30, 1998, while selling, general and administrative expense as a percentage of sales increased from 21% to 26% for the comparable periods. For the three months ended June 30, cost of sales as a percentage of sales decreased from 69% to 64% from 1997 to 1998, while selling, general and administrative expense as a percentage of sales increased from 22% to 26% for the comparable periods. These fluctuations are attributable to the change in the business mix of the Company that resulted from the acquisitions in the Automated Data Systems ("ADS") segment and a general increase in the activity of this segment due to market growth, and a decrease of activity in the Industrial Automation Systems ("IAS") segment. ADS sales increased as a percentage of total sales from 39% to 56% from the six months ended June 30, 1997 to the six months ended June 30, 1998, while IAS sales decreased from 61% to 44% for the comparable periods. For the three months ended June 30, ADS sales increased as a percentage of total sales from 42% to 57% from 1997 to 1998, while IAS sales decreased from 58% to 43% for the comparable periods. The ADS businesses typically carry lower cost of sales ratios and higher selling, general and administrative expense ratios compared to the IAS businesses. 10 ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS Depreciation and amortization increased from $17.0 million to $24.6 million from the six months ended June 30, 1997 to the six months ended June 30, 1998 and from $9.8 million to $12.9 million from the three months ended June 30, 1997 to the three months ended June 30, 1998. This increase is primarily due to a higher amount of goodwill and other intangibles resulting from the Norand and UBI acquisitions, as well as additional depreciation from these operations. Net interest expense was $9.8 million and $7.1 million for the six months ended June 30, 1998 and 1997, respectively. The increase is attributable to an increase in outstanding debt due primarily to the 1997 acquisitions of Norand and UBI. AUTOMATED DATA SYSTEMS ADS segment sales increased $100.0 million or 35% while operating profit increased $14.0 million or 122% for the six months ended June 30, 1998 compared with the corresponding prior period. The sales and operating profit increases are due primarily to the contribution of a full six months of operations from the acquisitions of Norand and UBI, as well as internal growth. For the three months ended June 30, 1998, segment sales increased $24.6 million or 14% while operating profit increased $9.8 million or 241% compared with the corresponding prior period. The increases in the current three-month period are due primarily to acceleration of the internal growth of the combined activities as the integration and restructuring of the Norand and UBI acquisitions nears completion. In June 1998, the Company acquired the radio frequency identification ("RFID") business unit of Amtech Corporation known as the Transportation Systems Group ("TSG"). TSG is a supplier of wireless data technologies for electronic toll collection, rail and motor fleet tracking, and access control to parking and other structures. TSG revenues were approximately $52.0 million in 1997. The Company had previously purchased $10.0 million of Amtech common stock which was applied towards the purchase price of TSG. Amtech will be integrated into Intermec Technologies, the Company's ADS subsidiary. INDUSTRIAL AUTOMATION SYSTEMS IAS segment sales decreased $153.7 million or 34% and related operating profit decreased $23.1 million or 47% for the six months ended June 30, 1998 compared with the corresponding prior period. For the three months ended June 30, 1998, segment sales decreased $88.6 million or 37% while operating profit decreased $14.5 or 49% compared with the corresponding prior period. During the first six months of 1998, the IAS segment began several new projects that are not expected to materially affect sales and profits until late in the year. Conversely, during the first several months of 1997, the integrated manufacturing systems operations experienced a higher level of sales and profits from contracts in the final delivery and installation phase. IAS backlog increased from $332.0 million at December 31, 1997 to $581.4 million at June 30, 1998. Subsequent to the close of the second quarter, UNOVA acquired R&B Machine Tool Company, a specialty machine and retooling company with annual revenues of approximately $60.0 million. The acquisition was funded using short-term uncommitted credit lines. LIQUIDITY AND CAPITAL RESOURCES Cash and marketable securities increased from $13.7 million at December 31, 1997 to $21.4 million at June 30, 1998. Total debt increased from $303.6 million at December 31, 1997 to $370.4 million at June 30, 1998 due to the acquisition of TSG and the normal capital expenditures and working capital needs of the operations. 11 ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS In March 1998, the Company sold $200.0 million principal amount of senior unsecured debt. The sale comprised $100.0 million of 6.875% seven-year notes, at a price of 99.867 and $100.0 million of 7.00% ten-year notes, at a price of 99.856. Including underwriting fees, discounts and effects of forward rate agreements entered into by the Company to hedge the interest rates on the debt, the effective interest rates on the seven-year and ten-year notes are 6.982% and 7.217%, respectively. The net proceeds of approximately $198.0 million were used by the Company to repay outstanding debt. At August 1, 1998, the Company had total additional borrowing capacity of approximately $425.2 million. The Company expects that cash flow from operations, along with available borrowing capacity, will be adequate to meet working capital requirements. The Company does not anticipate any material adverse decline in cash flow from operations nor any significant changes in capital expenditures required to support ongoing operations. 12 PART II. OTHER INFORMATION ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K (a) Reports on Form 8-K: No reports on Form 8-K have been filed by the Registrant during the quarter ended June 30, 1998. (b) See Exhibit Index included herein on page 15. 13 SIGNATURE 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. UNOVA, INC. (Registrant) By /s/ Michael E. Keane -------------------------------- Michael E. Keane Senior Vice President and Chief Financial Officer August 10, 1998 14 UNOVA, INC. INDEX TO EXHIBITS EXHIBIT NO. DESCRIPTION OF EXHIBIT - ----------- ---------------------- 4.1 $400,000,000 Credit Agreement dated September 24, 1997, among UNOVA, Inc., the Banks listed therein, and Morgan Guaranty Trust Company of New York, as Agent, filed on October 1, 1997 as Exhibit 10M to Amendment No. 1 to the Company's Registration Statement on Form 10 No. 001-13279 and incorporated herein by reference. 4.2 Rights Agreement dated September 24, 1997, between UNOVA, Inc. and The Chase Manhattan Bank, as Rights Agent, to which is annexed the form of Right Certificate as Exhibit A, filed on October 22, 1997 as Exhibit 3C to Amendment No. 2 to the Company's Registration Statement on Form 10 No. 001-13279. 4.3 Amendment No. 1 to the $400,000,000 Credit Agreement, dated January 15, 1998, filed as Exhibit 4.4 to the Company's 1997 Annual Report on Form 10-K, and incorporated herein by reference. 4.4 Indenture dated as of March 11, 1998 between the Company and The First National Bank of Chicago, Trustee, providing for the issuance of securities in series, filed as Exhibit 4.5 to the Company's 1997 Annual Report on Form 10-K, and incorporated herein by reference. 4.5 Form of 6.875% Notes due March 15, 2005 issued by the Company under such indenture, filed as Exhibit 4.6 to the Company's 1997 Annual Report on Form 10-K, and incorporated herein by reference. 4.6 Form of 7.00% Notes due March 15, 2008 issued by the Company under such indenture, filed as Exhibit 4.7 to the Company's 1997 Annual Report on Form 10-K, and incorporated herein by reference. 4.7 Amendment No. 2 to the $400,000,000 Credit Agreement, dated May 15, 1998. * 4.8 Instruments defining the rights of holders of other long-term debt of the Company are not filed as exhibits because the amount of debt authorized under any such instrument does not exceed 10% of the total assets of the Company and its consolidated subsidiaries. The Company hereby undertakes to furnish a copy of any such instrument to the Commission upon request. 10.1 Distribution and Indemnity Agreement dated October 31, 1997, between Western Atlas Inc. and UNOVA, Inc, filed as Exhibit 10.1 to the Company's September 30, 1997 Quarterly Report on Form 10-Q, and incorporated herein by reference. 10.2 Tax Sharing Agreement dated October 31, 1997, between Western Atlas Inc., and UNOVA, Inc., filed as Exhibit 10.2 to the Company's September 30, 1997 Quarterly Report on Form 10-Q, and incorporated herein by reference. 10.3 Employee Benefits Agreement dated October 31, 1997, between Western Atlas Inc., and UNOVA, Inc., filed as Exhibit 10.3 to the Company's September 30, 1997 Quarterly Report on Form 10-Q, and incorporated herein by reference. 15 INDEX TO EXHIBITS, (Continued) 10.4 Intellectual Property Agreement dated October 31, 1997, between Western Atlas Inc., and UNOVA, Inc., filed as Exhibit 10.4 to the Company's September 30, 1997 Quarterly Report on Form 10-Q, and incorporated herein by reference. 10.5 Change of Control Employment Agreements with Alton J. Brann, Michael E. Keane, Norman L. Roberts and certain other officers of the Company, dated as of October 31, 1997, filed as Exhibit 10.5 to the Company's September 30, 1997 Quarterly Report on Form 10-Q, and incorporated herein by reference. 10.6 Employment Agreement between Intermec Corporation and Michael Ohanian, dated May 18, 1995, as amended, filed on August 18, 1997 as exhibit 10J to the Company's Registration Statement on Form 10 No. 001-13279 and incorporated herein by reference. 10.7 UNOVA, Inc. Director Stock Option and Fee Plan, filed as Exhibit 10.7 to the Company's September 30, 1997 Quarterly Report on Form 10-Q, and incorporated herein by reference. 10.8 UNOVA, Inc. Restoration Plan, filed on August 18, 1997 as Exhibit 10I to the Company's Registration Statement on Form 10 No. 001-13279 and incorporated herein by reference. 10.9 UNOVA, Inc. Supplemental Executive Retirement Plan, filed on October 1, 1997 as Exhibit 10H to Amendment No. 1 to the Company's Registration Statement on Form 10 No. 001-13279 and incorporated herein by reference. 10.10 Supplemental Retirement Agreement between UNOVA, Inc. and Alton J. Brann, filed on October 1, 1997 as Exhibit 10L to Amendment No. 1 to the Company's Registration Statement on Form 10 No. 001-13279 and incorporated herein by reference. 10.11 Employment Agreement dated August 1997, between UNOVA, Inc., and Clayton A. Williams, filed on October 1, 1997 as Exhibit 10K to Amendment No. 1 to the Company's Registration Statement on Form 10 No. 001-13279 and incorporated herein by reference. 10.12 UNOVA, Inc. 1997 Stock Incentive Plan, filed as Exhibit 10.12 to the Company's September 30, 1997 Quarterly Report on Form 10-Q, and incorporated herein by reference. 10.13 UNOVA, Inc. Executive Severance Plan, filed as Exhibit 10.13 to the Company's September 30, 1997 Quarterly Report on Form 10-Q, and incorporated herein by reference. 10.14 Form of Promissory Notes in favor of the Company given by certain officers and key employees, filed as Exhibit 10.14 to the Company's September 30, 1997 Quarterly Report on Form 10-Q, and incorporated herein by reference. 16 INDEX TO EXHIBITS, (Continued) 10.15 Board resolution dated September 24, 1997 establishing the UNOVA, Inc. Incentive Loan Program, filed as Exhibit 10.15 to the Company's September 30, 1997 Quarterly Report on Form 10-Q, and incorporated herein by reference. 10.16 UNOVA, Inc. Management Incentive Compensation Plan, filed as Exhibit 10.16 to the Company's 1997 Annual Report on Form 10-K, and incorporated herein by reference. 10.17 UNOVA, Inc. Executive Survivor Benefit Plan, filed as Exhibit 10.17 to the Company's 1997 Annual Report on Form 10-K, and incorporated herein by reference. 10.18 Amendment No. 1 to Employment Agreement between Intermec Corporation and Michael Ohanian, dated February 28, 1997, filed as Exhibit 10.18 to the Company's 1997 Annual Report on Form 10-K, and incorporated herein by reference. 10.19 Amendment No. 2 to Employment Agreement between Intermec Technologies Corporation and Michael Ohanian, dated February 28, 1998, filed as Exhibit 10.19 to the Company's 1997 Annual Report on Form 10-K, and incorporated herein by reference. 10.20 Amendment to Employment Agreement between UNOVA, Inc. and Clayton A. Williams, dated March 24, 1998, filed as Exhibit 10.20 to the Company's 1997 Annual Report on Form 10-K, and incorporated herein by reference. 27 Financial Data Schedule (filed only electronically with the Securities and Exchange Commission). * Copies of these documents have been included in this Quarterly Report on Form 10-Q filed with the Securities and Exchange Commission. 17 EX-4.7 2 EXHIBIT 4.7 Exhibit 4.7 (CONFORMED COPY) AMENDMENT NO. 2 TO CREDIT AGREEMENT AMENDMENT dated as of May 15, 1998 to the Credit Agreement dated as of September 24, 1997 (as heretofore amended, the "CREDIT AGREEMENT") among UNOVA, INC. (the "BORROWER"), the BANKS party thereto (the "BANKS") and MORGAN GUARANTY TRUST COMPANY OF NEW YORK, as Agent (the "AGENT"). The parties hereto agree as follows: SECTION 1. DEFINED TERMS; REFERENCES. Unless otherwise specifically defined herein, each term used herein which is defined in the Credit Agreement has the meaning assigned to such term in the Credit Agreement. Each reference to "hereof", "hereunder", "herein" and "hereby" and each other similar reference and each reference to "this Agreement" and each other similar reference contained in the Credit Agreement shall, after this Amendment becomes effective, refer to the Credit Agreement as amended hereby. SECTION 2. AMENDMENTS. (a) The definition of "Leverage Ratio" in Section 1.01 of the Credit Agreement is hereby amended by the addition of the following proviso: PROVIDED that if there shall have been an acquisition or disposition of operations during such period. Consolidated EBITDA shall be calculated on a pro forma basis giving effect thereto as if such acquisition or disposition had occurred on the first day of such period. (b) The following new definition is hereby added to Section 1.01 of the Credit Agreement: "Foreign Debt" means Debt incurred by a Subsidiary organized under the laws of a jurisdiction outside the United States (or incurred through a branch or office outside the United States of a Subsidiary organized under the laws of a jurisdiction within the United States) which Debt is incurred with a view to obtaining financial or tax benefits associated with the foreign operations of such Subsidiary (including without limitation currency hedging). (c) Section 5.07 of the Credit Agreement is hereby amended to read in its entirety as follows: SECTION 5.07. LIMITATION ON SUBSIDIARY DEBT. The aggregate outstanding principal amount of Debt of the Subsidiaries of the Borrower (exclusive of (i) Debt owing to the Borrower or another Subsidiary and (ii) Foreign Debt) shall at no time exceed 15% of Consolidated Net Assets. SECTION 3. REPRESENTATIONS OF BORROWER. The Borrower represents and warrants that (i) the representations and warranties of the Borrower set forth in Article 4 of the Credit Agreement are true on and as of the date hereof and (ii) no Default has occurred and is continuing on and as of the date hereof. SECTION 4. GOVERNING LAW. This Amendment shall be governed by and construed in accordance with the laws of the State of New York. SECTION 5. COUNTERPARTS. This Amendment may be signed in any number of counterparts, each of which shall be an original, with the same effect as if the signatures thereto and hereto were upon the same instrument. SECTION 6. EFFECTIVENESS. This Amendment shall become effective as of the date hereof when the Agent shall have received from each of the Borrower and Banks comprising the Required Banks a counterpart hereof duly signed by such party or facsimile or other written confirmation (in form satisfactory to the Agent) that such party has signed a counterpart hereof. 2 IN WITNESS WHEREOF, the parties hereto have caused this Amendment to be duly executed as of the date first above written. UNOVA, INC. By: /s/ Lori J. Segale -------------------------------- Title: Treasurer MORGAN GUARANTY TRUST COMPANY OF NEW YORK By: /s/ Diana H. Imhof -------------------------------- Title: Vice President BANK OF AMERICA NATIONAL TRUST AND SAVINGS ASSOCIATION By: /s/ Therese A. Fontaine -------------------------------- Title: Vice President THE BANK OF NEW YORK By: /s/ Rebecca K. Levine -------------------------------- Title: Vice President THE CHASE MANHATTAN BANK By: /s/ Lenard Weiner -------------------------------- Title: Managing Director CIBC INC. By: /s/ Timothy E. Doyle -------------------------------- Title: Managing Director CIBC Oppenheimer Corp., as Agent THE FIRST NATIONAL BANK OF CHICAGO By: /s/ Mark A. Isley -------------------------------- Title: First Vice President NATIONSBANK OF TEXAS, N.A. By: /s/ George V. Hausler -------------------------------- Title: Vice President CREDIT SUISSE FIRST BOSTON By: /s/ Robert N. Finney -------------------------------- Title: Managing Director By: /s/ Thomas G. Muoio -------------------------------- Title: Vice President DRESDNER BANK, A.G., NEW YORK BRANCH AND GRAND CAYMAN BRANCH By: /s/ John W. Sweeney -------------------------------- Title: Assistant Vice President By: /s/ Christopher E. Sarisky -------------------------------- Title: Assistant Vice President THE FUJI BANK, LIMITED By: /s/ Masahito Fukuda -------------------------------- Title: Joint General Manager MELLON BANK, N.A. By: /s/ John S. McCabe -------------------------------- Title: Senior Vice President THE NORTHERN TRUST COMPANY By: /s/ John E. Burda -------------------------------- Title: Second Vice President EX-27 3 EXHIBIT 27
5 1,000 6-MOS DEC-31-1998 JAN-01-1998 JUN-30-1998 21,351 0 478,704 0 182,474 803,517 348,884 183,184 1,445,202 534,290 370,437 0 0 547 615,911 1,445,202 678,627 678,627 440,079 440,079 199,667 0 11,022 29,107 12,109 16,998 0 0 0 16,998 0.31 0.31
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