-----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, Alw0A8+l1fFQUOzQ1gHb61uPN0N/o8A6HLZ7Up5wjJo+wBAQVJxxqmf/2idvX034 hDb8/coi2cAAy/21jBt0GA== /in/edgar/work/20000814/0000950152-00-006032/0000950152-00-006032.txt : 20000921 0000950152-00-006032.hdr.sgml : 20000921 ACCESSION NUMBER: 0000950152-00-006032 CONFORMED SUBMISSION TYPE: 10-Q PUBLIC DOCUMENT COUNT: 3 CONFORMED PERIOD OF REPORT: 20000630 FILED AS OF DATE: 20000814 FILER: COMPANY DATA: COMPANY CONFORMED NAME: GENESIS WORLDWIDE INC CENTRAL INDEX KEY: 0000067532 STANDARD INDUSTRIAL CLASSIFICATION: [3540 ] IRS NUMBER: 344307810 STATE OF INCORPORATION: OH FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 10-Q SEC ACT: SEC FILE NUMBER: 001-01997 FILM NUMBER: 697828 BUSINESS ADDRESS: STREET 1: 2600 KETTERING TWR STREET 2: PO BOX 668 CITY: DAYTON STATE: OH ZIP: 45423 BUSINESS PHONE: 5134924111 MAIL ADDRESS: STREET 1: 615 N OAK ST STREET 2: PO BOX 668 CITY: SIDNEY STATE: OH ZIP: 45365 FORMER COMPANY: FORMER CONFORMED NAME: MONARCH MACHINE TOOL CO DATE OF NAME CHANGE: 19920703 10-Q 1 e10-q.txt GENESIS WORLDWIDE INC. 10-Q 1 SECURITIES AND EXCHANGE COMMISSION WASHINGTON, D.C. 20549 FORM 10-Q (X) QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the quarter ended June 30, 2000 ------------- 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 No. 1 - 1997 -------- GENESIS WORLDWIDE INC. ---------------------- (Exact name of registrant as specified in its charter) Ohio 34-4307810 - --------------------------- ---------- (State or other jurisdiction (I.R.S. Employer of incorporation or organization) Identification No.) 2600 Kettering Tower, Dayton, Ohio 45423 ---------------------------------------- (Address of principal executive offices, zip code) (937) 910-9300 -------------- (Registrant's telephone number including area code) N.A. ---- (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 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 __ The number of common shares outstanding as of July 31, 2000 was 4,285,696. 2 GENESIS WORLDWIDE INC. AND SUBSIDIARIES INDEX TO FORM 10-Q
PAGE NUMBER ------ PART 1. FINANCIAL INFORMATION: ITEM 1. - Condensed Consolidated Financial Statements: Balance Sheets - June 30, 2000 (unaudited) and December 31, 1999 2 Statements of Operations and Comprehensive Income (unaudited) - Two Quarters and Quarter ended June 30, 2000 and 1999 3 Statements of Cash Flow (unaudited) - Two Quarters ended June 30, 2000 and 1999 4 Notes to Condensed Consolidated Financial Statements 5-9 ITEM 2. - Management's Discussion and Analysis of Financial Condition and Results of Operations 10-12 ITEM 3. - Quantitative and Qualitative Disclosure About Market Risk 13 PART II. OTHER INFORMATION: ITEM 1.-5. Inapplicable 14 ITEM 6. Exhibits and Reports on Form 8-K 14
1 3 PART 1 - FINANCIAL INFORMATION GENESIS WORLDWIDE INC. AND SUBSIDIARIES CONDENSED CONSOLIDATED BALANCE SHEETS (In thousands)
June 30 December 31 2000 1999 ---- ---- (Unaudited) Current assets: Cash $ 105 $ 559 Accounts receivable 23,764 22,107 Costs and estimated earnings in excess of billings on uncompleted contracts 14,002 12,702 Inventories 10,975 10,016 Prepaid and other expenses 1,859 1,783 Deferred income taxes 7,016 6,816 Net current assets of discontinued operations 8,077 --------- --------- Total current assets 57,721 62,060 Property, Plant & Equipment - Net 28,557 27,770 Prepaid pension costs 9,135 19,849 Deferred income taxes 2,297 2,297 Intangible assets 64,414 68,473 Other assets 3,919 5,018 --------- --------- $ 166,043 $ 185,467 ========= ========= LIABILITIES AND SHAREHOLDERS' EQUITY Current Liabilities: Current portion of long-term debt $ 6,040 $ 5,540 Accounts payable 18,058 20,557 Accrued liabilities 9,640 15,126 Billings in excess of costs and estimated earnings on uncompleted contracts 12,771 6,962 Net current liabilities of discontinued operations 384 --------- --------- Total current liabilities 46,893 48,185 Postretirement benefits 3,107 3,054 Long-term debt, less current portion 80,813 94,034 Other long-term liabilities 1,185 1,122 --------- --------- Total liabilities 131,998 146,395 Shareholders' equity: Preferred stock 14 14 Common stock and additional paid in capital 10,160 9,500 Unearned compensation, restricted stock (17) (22) Retained earnings 24,230 29,685 Accumulated other comprehensive income (342) (105) --------- --------- Total Shareholders' equity 34,045 39,072 --------- --------- $ 166,043 $ 185,467 ========= =========
The accompanying notes are an integral part of the condensed consolidated financial statements. 2 4 GENESIS WORLDWIDE INC. AND SUBSIDIARIES CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE INCOME (amounts in thousands, except per share amounts) (Unaudited)
Two Quarters Ended June 30 Quarter Ended June 30 -------------------------- --------------------- 2000 1999 2000 1999 ---- ---- ---- ---- Net sales $ 66,616 $ 38,855 $ 33,233 $ 21,329 Operating costs and expenses: Cost of sales 53,132 30,318 27,075 16,554 Selling, general and administrative 12,002 6,225 5,703 3,042 Amortization of goodwill 1,665 204 833 104 -------- -------- -------- -------- Operating income (loss) (183) 2,108 (378) 1,629 Other income (expense): Interest expense (4,415) (629) (2,114) (302) Interest income 130 80 97 41 Other (expense) income (273) 191 (441) 138 -------- -------- -------- -------- Income (loss) before income taxes (4,741) 1,750 (2,836) 1,506 Income tax (provision) benefit (124) (630) (215) (542) -------- -------- -------- -------- Income (loss) from continuing operations (4,865) 1,120 (3,051) 964 Income (loss) from operations of discontinued segments, net of income tax (provision) benefit of $324 and $306 in 2000 and $(51) and $191 in 1999, respectively (576) 91 (544) (341) -------- -------- -------- -------- Net income (loss) (5,441) 1,211 (3,595) 623 Other comprehensive loss, foreign currency translation adjustments (237) (220) (231) (131) -------- -------- -------- -------- Comprehensive income (loss) $ (5,678) $ 1,431 $ (3,826) $ 492 ======== ======== ======== ======== Average common shares outstanding: Basic 4,284 3,781 4,286 3,787 Diluted 4,284 3,794 4,286 3,809 Earnings(loss) per common share, basic and diluted: Continuing operations $ (1.14) $ .30 $ (.71) $ .25 Discontinued operations (.13) .02 (.13) (.09) -------- -------- -------- -------- $ (1.27) $ .32 $ (.84) $ .16 ======== ======== ======== ======== Dividends per share: Preferred $ .90 $ .90 $ .45 $ .45 Common $ $ .10 $ .05
The accompanying notes are an integral part of the condensed consolidated financial statements. 3 5 GENESIS WORLDWIDE INC. AND SUBSIDIARIES CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (In thousands)
(Unaudited) Two Quarters Ended June 30 -------------------------- 2000 1999 ---- ---- Cash flow from operating activities: Net income (loss) $ (5,441) $ 1,211 Adjustments to reconcile net income (loss) to net cash provided by (used in) operating activities: (Income) loss from discontinued operations 900 (142) Depreciation and amortization 3,546 833 Equity in loss of affiliates 707 Prepaid pension cost 70 (717) Deferred tax provision (benefit) (200) 681 (Gain) loss on sale of fixed assets 3 (6) Gain from pension plan reversion (3,132) Changes in operating assets and liabilities excluding effect of discontinued operations and acquisition in 1999: Accounts receivable (1,681) 1,162 Inventories (958) 1,390 Cost and estimated earnings in excess of billings on uncompleted contracts (1,300) (1,355) Billings in excess of costs and estimated earnings on uncompleted contracts 5,810 (1,950) Prepaids and other assets (52) (441) Accounts payable (2,499) (1,912) Accrued liabilities (4,609) 3,167 --------- --------- Net cash provided by (used in) operating activities (8,836) 1,921 Cash flows from investing activities: Capital expenditures (2,507) (980) Proceeds from sale of division 8,334 Acquisition of business, net of cash acquired (73,402) Proceeds from pension plan reversion 14,086 Decrease in other assets 1,812 173 Proceeds from sale of fixed assets 30 13 --------- --------- Net cash provided by (used in) investing activities 21,755 (74,196) Cash flows from financing activities: Dividends paid (13) (391) Issuance of stock 19 64 Debt acquisition costs (2,275) Repayment of short-term borrowings (500) Proceeds from long-term borrowings 25,524 101,709 Repayments of long-term borrowings (38,050) (17,529) --------- --------- Net cash provided by (used in) financing activities (12,520) 81,078 Effect of exchange rates on cash (80) (215) --------- --------- Net cash provided by (used in) continuing operations 319 8,588 Net cash provided by (used in) discontinued operations (773) (1,517) Cash, beginning of period 559 1,708 --------- --------- Cash end of period $ 105 $ 8,779 ========= =========
The accompanying notes are an integral part of the condensed consolidated financial statements 4 6 GENESIS WORLDWIDE INC. AND SUBSIDIARIES NOTES TO CONDENSED FINANCIAL STATEMENTS TWO QUARTERS ENDED JUNE 30, 2000 AND 1999 ( all dollar amounts in thousands, except per share amounts) 1. FINANCIAL STATEMENTS -------------------- The balance sheet at December 31, 1999 presents condensed financial information taken from the audited financial statements. The interim financial statements are unaudited. In the first quarter of 2000 the Company recorded a net gain of $315 related to the termination of two of its pension plans, which is included in other income. In the first quarter of 1999 the Company recorded an accrual for $350 as the estimated cost to settle litigation. In the opinion of management, all other adjustments, which consist of normal recurring adjustments necessary to present fairly the financial position and results of operations for the interim periods presented, have been made. The results shown for the first two quarters of 2000 are not necessarily indicative of the results that may be expected for the entire year. Certain information and footnote disclosures normally included in financial statements prepared in accordance with generally accepted accounting principles have been condensed or omitted. It is suggested that these financial statements be read in conjunction with the financial statements and notes thereto included in the Company's December 31, 1999 annual report to shareholders. 2. EARNINGS PER SHARE ------------------ Basic earnings per common share is computed by dividing net income (loss), after adjustment for the preferred stock dividend requirement, by the weighted average number of common shares outstanding during the period. Diluted earnings per share is computed by adding the dilutive effect of common stock equivalents, such as the convertible preferred shares and any stock options outstanding, to the weighted average number of common shares outstanding. 3. INVENTORIES ----------- The Company's inventories consist of the following balances:
June 30 December 31 2000 1999 ---- ---- Finished goods $ 621 $ 889 Work-in process 5,026 3,252 Raw materials 5,328 5,875 ------- -------- Total first-in, first-out cost $10,975 $ 10,016 ======= ========
4. LONG-TERM DEBT -------------- The Company has an outstanding credit facility consisting of a term loan facility in an aggregate principal amount of $48,900 and a revolving credit facility, which provides for loans and letters of credit. The revolving credit facility has $35,000 available through October 31, 2000, after which the amount available is reduced to $30,000. The term loan facility consists of two tranches in principal amounts of $28,050 (the "Term A Loan") and $19,800 (the "Term B Loan"). The Term A Loan and the revolving credit facility mature on June 30, 2006 and the Term B Loan matures on December 31, 2006. Principal payments of the Term A Loan are required on a quarterly basis increasing from $1,250 per quarter on September 30, 2000 to $2,500 per quarter during the last four quarters of the payment term. 5 7 GENESIS WORLDWIDE INC. AND SUBSIDIARIES NOTES TO CONDENSED FINANCIAL STATEMENTS TWO QUARTERS ENDED JUNE 30, 2000 AND 1999 ( all dollar amounts in thousands, except per share amounts) Principal payments of the Term B Loan are in quarterly installments of $50 through June 30, 2005 with $9,300 due on September 30, 2006 and December 31, 2006. Outstanding borrowings under the revolving credit facility and term loans accrue interest based on prime rate or LIBOR plus an additional percentage depending on the leverage ratio. The weighted average interest rate of these loans was 9.86% at June 30, 2000. On June 30, 2000 the Company had $6,160 available under the revolving credit facility. The credit facility agreement contains certain covenants, including a maximum senior leverage ratio, minimum interest coverage ratio, minimum fixed charge coverage ratio, a limitation on the amount of capital expenditures and a restriction on paying dividends. Substantially all the assets of the Company are pledged under the above credit facility. In connection with a June 2000 amendment to the credit facility which increased the Company's revolving credit line and modified certain covenants, the Company granted to the lender, ING (U.S.) Capital LLC, a warrant to purchase shares of the Company's common stock. Under the warrant agreement, unless the Company achieves certain conditions by October 31, 2000 including a reduction in its term loans of at least $10,000 and a prescribed maximum senior leverage ratio, ING will receive a warrant to acquire 800,000 shares of the Company's common stock at an exercise price of $.01 per share. The warrant would become exercisable on February 1, 2001. The number of shares under the warrant would reduce if certain events occur prior to January 31, 2001. The fair value of the warrants was estimated at $643, using the Black-Scholes Model and was recorded at the date of grant. The amount is included in these financial statements as a discount to the term loan and will be amortized over the remaining term of the loans. The Company also has outstanding subordinated notes consisting of $15,448 in 12% Senior Subordinated Notes ("Notes") due December 31, 2007 and $840 in 8% Junior Subordinated Notes due June 30, 2002. As a condition to an amendment to the Company's credit facility, interest on the Notes for the quarter ended June 30, 2000 was not paid but was capitalized into the amount outstanding on the Notes. In addition, interest payments for the quarter ended September 30, 2000 will be deferred and capitalized as part of the Note. The Company has also issued warrants to purchase 100,000 common shares in conjunction with the Notes, at a warrant exercise price of $7.75 per share, subject to adjustment, which expire on June 30, 2009. The fair value of the 100,000 warrants issued, estimated at $291 using the Black-Scholes Model, was recorded as a discount to the Notes and is being amortized over the term of the Notes. In addition, the Notes contain provisions that would increase the interest rate to 12.5% if the Notes are not repaid by June 30, 2000. 5. DISCONTINUED OPERATIONS ----------------------- In February 2000, the Company sold substantially all the assets of the machine tool division located in Cortland, New York, including inventory, property, plant and equipment and accounts receivable with a carrying value of $16,900 at December 31, 1999. The buyer paid $7,700 in cash and assumed $3,800 in liabilities. The loss on disposal of $3,968 (net of taxes of $2,232) was recorded at December 31, 1999 and consisted of an estimated loss on disposal of $3,712 and a provision of $256 for anticipated operating losses until the disposal date. 6 8 GENESIS WORLDWIDE INC. AND SUBSIDIARIES NOTES TO CONDENSED FINANCIAL STATEMENTS TWO QUARTERS ENDED JUNE 30, 2000 AND 1999 ( all dollar amounts in thousands, except per share amounts) The machine tool division, along with the Sidney division which was sold in 1997, comprised the Company's machine tool segment. The results of the machine tool segment are reported as discontinued operations in these financial statements. Net sales from the discontinued segment of $961 and $8,387 for the two quarters ended June 30, 2000 and 1999 respectively, and the related cost of sales, general and administrative costs and interest expense have been reclassified from continuing operations and are included in the loss from discontinued operations. In the two quarters ended June 30, 2000 the Company has increased the provision for operating losses by $150 related to certain costs incurred relating to closing this segment. In December 1999, the Company adopted a plan to discontinue the paper coating and laminating segment of its business. The plan of disposal provides for the servicing and installation of two remaining contracts which should be completed by September 2000. Net liabilities of $384 at June 30, 2000 consists of accounts receivable and accounts payable which will be settled or received in cash in 2000, contract reserves for remaining contracts and fixed assets which are carried at net realizable value. Net sales from the discontinued segment of $30 and $1,391 for the two quarters ended June 30, 2000 and 1999, respectively, and the respective cost of sales, general and administrative costs and interest expense have been reclassified from continuing operations and are included in the loss from discontinued operations. During the second quarter of 2000, the Company increased the provision for operating losses by $750 relating to additional estimated contract costs. The following table summarizes the net loss from operations of discontinued segments:
Two Quarters Ended June 30 -------------------------- 2000 1999 ---- ---- Net earnings (loss) from operations: Machine tool segment $(150) $ 569 Paper coating and laminating segment (750) (427) ----- ----- (900) 142 Tax (provision) benefit 324 (51) ----- ----- Earnings (loss) from operations of discontinued segments $(576) $ 91 ===== =====
The provision for operating losses is summarized as follows:
Machine Tool Paper Coating and Segment Laminating Segment Total ------- ------------------ ----- Provision for operating losses at December 31, 1999 $ 400 $ 220 $ 620 Operating losses charged to the provision (435) (551) (986) Additional provision 150 750 900 ----- ----- ----- Provision for operating losses at June 30, 2000 $ 115 $ 419 $ 534 ===== ===== =====
7 9 GENESIS WORLDWIDE INC. AND SUBSIDIARIES NOTES TO CONDENSED FINANCIAL STATEMENTS TWO QUARTERS ENDED JUNE 30, 2000 AND 1999 ( all dollar amounts in thousands, except per share amounts) 6. ACQUISITIONS ------------ On June 30, 1999, the Company acquired Precision Industrial Corporation and Subsidiaries ("Precision"). The following unaudited proforma information presents a summary of consolidated results of operations of the Company as if the acquisition of Precision had occurred at the beginning of each period presented.
Two Quarters Ended June 30 -------------------------- 2000 1999 ---- ---- (Unaudited) Net sales $ 66,616 $ 65,378 Loss before taxes $ (4,741) $ (1,891) Income tax (provision) benefit $ (124) $ 1,208 Loss from continuing operations $ (4,865) $ (683) Earnings (loss) per share (basic and diluted) from continuing operations $ (1.14) $ (.02)
These unaudited proforma results have been prepared for comparative purposes only and include certain adjustments such as elimination of management costs not expected to be incurred after the acquisition, additional depreciation as a result of the step-up in the basis of fixed assets, additional amortization expense as a result of goodwill and an increase in interest expense as a result of acquisition debt. They do not purport to be indicative of the results of operations which would have resulted had the combination occurred at the beginning of each period presented or of future results of operations of the combined entities. The disproportionate tax provision results from the nondeductibility of goodwill and federal excise tax in 2000. In the second quarter of 2000 the Company resolved a preacquisition contingency upon receipt of an actuarial valuation related to a pension liability recorded by a foreign subsidiary of Precision. The resolution of this contingency resulted in a reduction of the pension liability and a decrease in goodwill of $1,235. 7. PENSION PLAN TERMINATION ------------------------ In the first quarter of 2000 the Company completed the termination of two of its pension plans for certain employees. Plan assets of $15,600 were used to settle plan liabilities and $4,700 was transferred to trusts to fund future employee benefit obligations. The balance of plan assets of $14,000 was distributed to the Company with $10,400 used to repay long-term debt. The Company recorded a net gain on this transaction of $315 consisting of a $3,132 settlement gain and a $2,817 expense for federal excise taxes. Unrecognized prior service costs of $145 from the terminated plans remain to be amortized over the next three years. 8. OTHER MATTERS ------------- Operating losses were incurred in the first half of 2000 primarily as a result of the low volume and inconsistency of orders the Company has received since mid-1999. In addition, collections of accounts receivable have been delayed due to difficulty encountered in completing a number of contracts. Due to the above, the Company was unable to generate adequate cash flow to support its current business operations and service its financing costs and debt payments. As a result, the Company has initiated a number of initiatives to reduce its operating costs and improve its cash flow. These initiatives include personnel reductions and cost containment programs. The Company estimates it has reduced its annual operating costs by over $3.1 million through these 8 10 GENESIS WORLDWIDE INC. AND SUBSIDIARIES NOTES TO CONDENSED FINANCIAL STATEMENTS TWO QUARTERS ENDED JUNE 30, 2000 AND 1999 ( all dollar amounts in thousands, except per share amounts) steps, which began in the second quarter of 2000. In addition to reducing its operating costs, the Company is aggressively pursuing new business and focusing on closing out existing contracts to collect amounts owing from its customers. The Company has also suspended non-essential spending and capital expenditures to future conserve its cash. The Company anticipates that it will have adequate credit available to continue its operations for the foreseeable future, provided that its order volume continues at not less than present levels. Through cost reductions and collections efforts, the Company anticipates improving its cash flows over the level of cash outflow experienced in the first half of 2000. 9 11 GENESIS WORLDWIDE INC. AND SUBSIDIARIES MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS TWO QUARTERS ENDED JUNE 30, 2000 AND 1999 RESULTS OF OPERATIONS --------------------- For the two quarters and quarter ended June 30, 2000 the Company reported a net loss from continuing operations of $4,865,000 and $3,051,000, respectively, compared to net earnings from continuing operations of $1,120,000 and $964,000 for the same periods in 1999. During the first quarter of 2000 the Company recorded a net gain of $315,000 related to the termination of certain of its pension plans. In the first quarter of 1999, the Company recorded $350,000 of expense related to settlement of litigation. Excluding the aforementioned items, the 2000 net earnings were affected by higher interest expense due to increased borrowing related to recent acquisitions. Goodwill amortization related to acquisitions increased by $1,461,000 and $729,000 in the first two quarters and second quarter of 2000 compared to the same periods in 1999. Sales increased to $66.6 million and $33.2 million in the two quarters and second quarter of 2000, compared to $38.9 million and $21.3 million for the same periods of 1999 with the addition of $34.7 million of sales ($18.3 million in the second quarter) from Herr-Voss ("Precision") acquired on June 30, 1999. The Company's businesses excluding Precision experienced a decline in sales of $7 million for the two quarters ended June 30, 2000, of which $6.4 million of that decline occurred in the second quarter of 2000. This decline in revenues was due to a prolonged slowdown in orders for the Company's capital equipment which began in mid-1999. Cost of goods sold as a percentage of sales was 79.8% and 81.5% in the two quarters and second quarter of 2000 compared to 78.0% and 77.6% in the respective 1999 periods. The newly acquired businesses have improved the overall profit margin in the Company, but cost overruns and problems with contract closeouts at the existing businesses, particularly in the second quarter of 2000, contributed to the lower margin in the 2000 periods compared to 1999. An operating loss of $183,000 and $378,000 was incurred in the two quarters and second quarter of 2000 compared to operating earnings of $2.1 million and $1.6 million for the same periods in 1999. The decrease in operating earnings was affected by additional amortization of goodwill in 2000 relating to acquisitions. Selling, general and administrative expense increased by $5.8 million and $2.7 in the two quarters and second quarter of 2000, primarily due to the acquisition of Precision. Also affecting comparability of operating results between 2000 and 1999 was pension income of $717,000 and $376,000 recognized in the two quarters and quarter ended June 30, 1999 related to pension plans that were terminated in January, 2000. Orders received during the first two quarters of 2000 totaled $56.7 million including $45.0 million for Precision, compared to $29.1 million for the same period of 1999. Backlog at June 30, 2000 was $52.5 million compared to $32.8 million at June 30, 1999 and $62.2 million at December 31, 1999. LIQUIDITY AND CAPITAL RESOURCES ------------------------------- During the first two quarters of 2000 the Company's operating activities required $8.8 million of cash with an increase in inventories ($1.0 million) and decreases in accounts payable ($2.5 million) and accrued liabilities ($3.1 million) requiring cash. Advance payments from customers exceeded costs incurred on contracts in process and increases in accounts receivables and provided $2.9 million of cash. Capital expenditures required $2.5 million in the first two quarters of 2000 and the proceeds from the sale of the Machine Tool Division ($8.3 million) and the termination of certain pension plans ($14.1 million) allowed the Company to repay $18.0 million of the Company's Term A long-term debt. 10 12 GENESIS WORLDWIDE INC. AND SUBSIDIARIES MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS TWO QUARTERS ENDED JUNE 30, 2000 AND 1999 The funding of operating losses and debt service during the first half of 2000 required the Company to borrow $7.5 million under its line of credit, including $2.1 million to repay its term debt. At June 30, 2000, the Company had $6.2 million available to borrow or for issuing letters of credit under its revolving credit line of $35 million. The Company's line of credit is $35 million through October 31, 2000, after which it returns to its original amount of $30 million. Operating losses were incurred in the first half of 2000 primarily as a result of the low volume and inconsistency of orders the Company has received since mid-1999. In addition, collections of accounts receivable have been delayed due to difficulty encountered in completing a number of contracts. Due to the above, the Company was unable to generate adequate cash flow to support its current business operations and service its financing costs and debt payments. As a result, the Company has initiated a number of initiatives to reduce its operating costs and improve its cash flow. These initiatives include personnel reductions and cost containment programs. The Company estimates it has reduced its annual operating costs by over $3.1 million through these steps, which began in the second quarter of 2000. In addition to reducing its operating costs, the Company is aggressively pursuing new business and focusing on closing out existing contracts to collect amounts owing from its customers. The Company has also suspended non-essential spending and capital expenditures to future conserve its cash. The Company anticipates that it will have adequate credit available to continue its operations for the foreseeable future, provided that its order volume continues at not less than present levels. Through cost reductions and collections efforts, the Company anticipates improving its cash flows over the level of cash outflow experienced in the first half of 2000. The Company's bank loan covenants become more restrictive beginning September 30, 2000. If a covenant violation would occur in the future, the Company would attempt to negotiate a waiver or covenant amendment with its lender. The Company believes that a valuation allowance against deferred tax assets is not necessary, other than a valuation allowance relating to the net operating loss carryforwards of the Company's subsidiaries in German, which are being liquidated. The Company anticipates that the deferred tax assets will be realized as a result of the reversal of the deferred tax liabilities and the generation of future taxable income. However, a valuation allowance against the deferred tax assets could be required if estimates of future taxable income are reduced. INTEREST RATE RISK ------------------ The Company anticipates incurring higher borrowing costs as a result of increases in prime rate and LIBOR in 2000. At January 1, 2000 prime rate was 8.50% and 90 day LIBOR was 6.00%. At July 30, 2000 these rates increased to 9.50% and 6.72%, respectively. The Company estimates that a .25% change in LIBOR or prime rate would impact annual interest cost by $115,000 based on the amount of variable rate debt outstanding at June 30, 2000, exclusive of the notional amount discussed in the Quantitative and Qualitative Disclosure about Market Risk section below. The Company has an interest rate swap contract for a portion of its bank debt. The notional amount under the contract declines from $23.9 million to $14.5 million at the maturity of the contract on June 30, 2003. The receive rate under the contract is 90 day LIBOR (6.78% for the period July 1, 2000 to September 30, 2000) and the pay rate is fixed at 7.16%. This transaction will have the impact of increasing the Company's borrowing costs by $23 during the quarter ended September 30, 2000. 11 13 GENESIS WORLDWIDE INC. AND SUBSIDIARIES MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS TWO QUARTERS ENDED JUNE 30, 2000 AND 1999 FORWARD LOOKING STATEMENTS -------------------------- In addition to historical information, this document contains various forward-looking statements, which are subject to risks, and uncertainties that could cause actual results to differ materially from these statements. These risks include, but are not limited to, changes in economic conditions, interest rates, price and product offering competition from domestic and foreign entities, customer purchasing patterns, labor costs, product liability issues and other legal claims, and governmental regulatory issues. Words identifying forward-looking statements include "plan", "believe", "expect", "anticipate", "project", "intend", "estimate" and other expressions which are predictions or indications of future events or trends which do not relate to historical matters. Readers are cautioned not to place undue reliance on these forward-looking statements, which speak only as of the date the statement is made. The Company undertakes no obligation to publicly update or revise any forward-looking statements, whether as a result of new information, future events or otherwise. Readers are urged to carefully review and consider the various disclosures made by the Company in this document and other reports filed with the Securities and Exchange Commission that attempt to advise interested parties of the risks and factors that may affect the Company's business. 12 14 GENESIS WORLDWIDE INC. AND SUBSIDIARIES QUANTITATIVE AND QUALITATIVE DISCLOSURE ABOUT MARKET RISK TWO QUARTERS ENDED JUNE 30, 2000 AND 1999 QUANTITATIVE AND QUALITATIVE DISCLOSURE ABOUT MARKET RISKS - ---------------------------------------------------------- Effective April 1, 2000, the Company entered into a three year interest rate swap contract for a portion of its bank debt. The notional amount under the contract declines from an initial amount of $24.5 million to $14.5 million at the maturity of the contract on June 30, 2003. The interest rate swap hedges against potential interest increases by having a fixed pay rate of 7.16% with a variable receive rate of 90 day LIBOR (6.77% at June 30, 2000), which is fixed two days before each quarter. In the second quarter of 2000, the Company's interest rate on this portion of its debt was 6.28%. The effect of this swap was to increase interest expense by $54 in the second quarter of 2000 as the 90 day LIBOR rate was below the fixed pay rate. For the third quarter of 2000 this transaction will have the impact of increasing interest cost by $23 under this swap. At June 30, 2000, a payment of $62,000 would be required to terminate the interest rate swap contract. 13 15 PART II - OTHER INFORMATION Items 1- 3 Inapplicable Item 4 - Submission of Matters to a vote of Security Holders. (a.) The Company's Annual Shareholders meeting was held on May 10, 2000. (b.) The following Directors were elected to serve a three year term:
Votes for Votes Against Abstain --------- ------------- ------- John A. Bertrand 3,601,363 34,401 0 Gerald L. Connelly 3,601,388 34,376 0 Joseph M. Rigot 3,602,088 33,676 0
The following continued as Directors: Richard E. Clemens William R. Graber J. William Uhrig Augustine A. Fornataro Waldemar M. Goulet Item 5 - Inapplicable Item 6 - Exhibits and Reports on Form 8-K (a.) Exhibit 4 - Second Amendment and Waiver to the Credit Agreement dated as of June 28, 2000 between Genesis Worldwide Inc. and ING (U.S.) Capital LLC. (b.) Exhibit 27 - Financial Data Schedule (c.) On June 21, 2000 the Company filed an 8-K to disclose the resignation of two of its Directors. 14 16 SIGNATURE Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this quarterly report to be signed on its behalf by the undersigned thereunto duly authorized. GENESIS WORLDWIDE INC. (Registrant) DATE: August 14, 2000 By s/Karl A. Frydryk ------------------ ----------------- Karl A. Frydryk Vice President & Chief Financial Officer (principal financial officer) 15 EX-4 2 ex4.txt EXHIBIT 4 1 Exhibit 4 SECOND AMENDMENT AND WAIVER SECOND AMENDMENT AND WAIVER, dated as of June 28, 2000 (this "AMENDMENT"), to the Credit Agreement, dated as of June 30, 1999 (as amended, supplemented or otherwise modified prior to the date hereof, the "EXISTING CREDIT AGREEMENT", as amended hereby, the "CREDIT AGREEMENT"), among GENESIS WORLDWIDE, INC., formerly THE MONARCH MACHINE TOOL COMPANY, an Ohio corporation (the "BORROWER"), the several lenders from time to time parties thereto (the "LENDERS") and ING (U.S.) CAPITAL LLC, as Administrative Agent (in such capacity, the "ADMINISTRATIVE AGENT") for the Lenders. RECITALS The Borrower has requested that the Administrative Agent and the Lenders amend and waive certain provisions of the Existing Credit Agreement as set forth in this Amendment to provide for, among other things, a temporary increase in the aggregate Revolving Credit Commitment. The Administrative Agent and the Lenders parties hereto are willing to agree to such amendments and waivers, but only on the terms and subject to the conditions set forth in this Amendment. NOW, THEREFORE, in consideration of the premises and for other good and valuable consideration, the receipt and sufficiency of which is hereby acknowledged, the Borrower, the Administrative Agent and the Lenders hereby agree as follows: 1. DEFINED TERMS. Unless otherwise defined herein, terms defined in the Credit Agreement are used herein as therein defined. 2. AMENDMENTS. The Existing Credit Agreement is hereby amended as follows: (a) The Recitals are hereby amended by deleting the reference to "$30,000,000" from clause (c) thereof and substituting in lieu thereof "$35,000,000". (b) Section 1.1 is hereby amended by deleting the following definitions and substituting the new definitions to read in its entirety as follows: "APPLICABLE MARGIN": (a) for any Tranche A Term Loan or any Revolving Credit Loan of any Type, during the period commencing on the Closing Date and ending on the date which is six months following the Closing Date, the rate per annum set forth under the relevant column heading below:
- ------------------------------- ---------------------------- Base Rate Loans Eurodollar Loans - ------------------------------- ---------------------------- 1.75% 2.75% - ------------------------------- ----------------------------
(b) for any Tranche A Term Loan or Revolving Credit Loan of any Type (other than a Temporary Increase Loan), at any time following the date Exhibit 4 2 which is six months following the Closing Date on which the Leverage Ratio, as most recently determined as of the date the certificate containing such Leverage Ratio is delivered pursuant to Section 8.2(b), is within any of the ranges set forth below, the rate per annum set forth under the relevant column heading opposite the applicable range below:
------------------------- ----------------------------- ---------------------------- Leverage Ratio Base Rate Loans Eurodollar Loans ------------------------- ----------------------------- ---------------------------- Greater than or equal 2.500% 3.500% to 4.5 ------------------------- ----------------------------- ---------------------------- Less than 4.5 but 2.125% 3.125% greater than or equal to 4.0 ------------------------- ----------------------------- ---------------------------- Less than 4.0 but 1.750% 2.750% greater than or equal 3.5 ------------------------- ----------------------------- ---------------------------- Less than 3.5 but 1.375% 2.375% greater than or equal to 3.0 ------------------------- ----------------------------- ---------------------------- Less than 3.0 but 1.000% 2.000% greater than or equal to 2.5 ------------------------- ----------------------------- ---------------------------- Less than 2.5 0.625% 1.625% ------------------------- ----------------------------- ----------------------------
PROVIDED, that in the event that the certificate containing the determination of the Leverage Ratio is not delivered on the date specified and otherwise in accordance with to Section 8.2(b) hereof, the applicable margin shall be the highest rate per annum for such Type of Loan set forth above from the date on which such certificate was required to be delivered in accordance with Section 8.2(b) until such time as such certificate is delivered to the Lenders; (c) for any Revolving Credit Loan that is a Temporary Increase Loan (which shall be made and maintained only as Base Rate Loans), two percent (2%); and (d) for any Tranche B Term Loan of any Type, the rate per annum set forth under the relevant column heading below:
------------------------------- --------------------------- Base Rate Loans Eurodollar Loans ------------------------------- --------------------------- 2.25% 3.50% ------------------------------- ---------------------------
Exhibit 4 -2- 3 "CONSOLIDATED INTEREST EXPENSE": for any period, the amount which, in conformity with GAAP, would be set forth opposite the caption "interest expense" or any like caption (including without limitation, imputed interest included in payments under Financing Leases) on a consolidated income statement of the Borrower and the Subsidiaries for such period excluding (i) the amortization of any original issue discount, (ii) the amount of any interest on the Three Cities Subordinated Debt to the extent the payment of such interest has been deferred and not paid in cash although such interest has become then due and payable, or (iii) any non-cash interest expense attributable to stock warrants. "LOAN DOCUMENTS": this Agreement, the Notes, the Guarantee, the Security Documents, the Fee Letter and the Warrant. "REVOLVING CREDIT COMMITMENT": as to any Lender, the obligation of such Lender to make Revolving Credit Loans to the Borrower pursuant to Section 3.1 and/or to issue or participate in Letters of Credit issued on behalf of the Borrower hereunder in an aggregate principal amount at any one time outstanding not to exceed $30,000,000, as set forth opposite such Lender's name on Schedule 1.1 under the caption "Revolving Credit Commitment" or in an Assignment and Acceptance, as such amount may be reduced from time to time in accordance with the provisions of this Agreement. Notwithstanding the preceding sentence or any other provision of the Existing Credit Agreement to the contrary, during the Temporary Increase Commitment Period, the Revolving Credit Commitment shall be increased to an aggregate principal amount of $35,000,000, as set forth on Schedule 1.1. At the end of the Temporary Increase Commitment Period, the Revolving Credit Commitment shall be reduced to $30,000,000, less the amount of any permanent reductions of the Revolving Credit Commitments that occurred during the Temporary Increase Commitment Period. (c) Section 1.1 is hereby further amended by adding the following definitions: "TEMPORARY INCREASE COMMITMENT PERIOD": the period from June 28, 2000 to and including October 31, 2000. "TEMPORARY INCREASE LOAN": Any Revolving Credit Loans outstanding during the Temporary Increase Commitment Period to the extent that the aggregate principal amount of the Revolving Credit Loans exceeds $30,000,000. "WARRANT": the Warrant, dated as of June 28, 2000, by the Borrower in favor of ING (U.S.) Capital LLC, as the same may be amended, supplemented or otherwise modified from time to time. (d) Section 5.2 is hereby amended by adding the following as the new subsection (c): "(c) Notwithstanding the preceding subsections (a) and (b), Temporary Increase Loans shall be made and maintained only as Base Rate Loans." Exhibit 4 -3- 4 (e) Section 9.1 is hereby amended by deleting such Section in its entirety and substituting in lieu thereof the following new Section 9.1 to read in its entirety as follows: "(a) SENIOR LEVERAGE RATIO. Permit, for any period of four consecutive fiscal quarters ending during a period set forth below, the ratio of (i) Consolidated Senior Indebtedness to (ii) Consolidated EBITDA to be greater than the amount set forth opposite such period below; PROVIDED, that in calculating Consolidated EBITDA for the periods of four fiscal quarters ending September 30, 1999, December 31, 1999 and March 31, 2000, Consolidated EBITDA for the fiscal quarters ending December 31, 1998, March 31, 1999, and June 30, 1999 shall be deemed to be $5,250,000, $5,250,000 and $5,250,000, respectively:
---------------------------------------- ------------------------------ Test Period Ending Ratio ---------------------------------------- ------------------------------ 6/30/00 6.75 ---------------------------------------- ------------------------------ 9/30/00 6.00 ---------------------------------------- ------------------------------ 12/31/00 5.00 ---------------------------------------- ------------------------------ 3/31/01 4.00 ---------------------------------------- ------------------------------ 6/30/01 3.00 ---------------------------------------- ------------------------------ 9/30/01 3.00 ---------------------------------------- ------------------------------ 12/31/01 3.00 ---------------------------------------- ------------------------------ 12/31/02 2.50 ---------------------------------------- ------------------------------ 12/31/03 2.25 ---------------------------------------- ------------------------------ 12/31/04 1.75 ---------------------------------------- ------------------------------ 12/31/05 1.75 ---------------------------------------- ------------------------------ 12/31/06 1.75 ---------------------------------------- ------------------------------
(b) INTEREST COVERAGE. Permit, for any period of four consecutive fiscal quarters ending during any period set forth below, or if less than four consecutive fiscal quarters have elapsed since the Closing Date, such period of one, two or three consecutive fiscal quarters following the Closing Date ending during any period set forth below, the ratio of (i) Consolidated EBITDA for such period to (ii) Consolidated Interest Expense for such period, to be less than the amount set forth opposite such period below: Exhibit 4 -4- 5
---------------------------------------- ------------------------------ Test Period Ending Ratio ---------------------------------------- ------------------------------ 6/30/00 1.20 ---------------------------------------- ------------------------------ 9/30/00 1.35 ---------------------------------------- ------------------------------ 12/31/00 1.60 ---------------------------------------- ------------------------------ 3/31/01 2.00 ---------------------------------------- ------------------------------ 6/30/01 2.50 ---------------------------------------- ------------------------------ 9/30/01 2.50 ---------------------------------------- ------------------------------ 12/31/01 2.50 ---------------------------------------- ------------------------------ 12/31/02 2.75 ---------------------------------------- ------------------------------ 12/31/03 3.00 ---------------------------------------- ------------------------------ 12/31/04 3.50 ---------------------------------------- ------------------------------ 12/31/05 3.75 ---------------------------------------- ------------------------------ 12/31/06 4.00 ---------------------------------------- ------------------------------
(c) Minimum Fixed Charge Coverage. Permit, for any period of four consecutive fiscal quarters ending during any period set forth below, or if less than four consecutive fiscal quarters have elapsed since the Closing Date, such period of one, two or three consecutive fiscal quarters following the Closing Date ending during any period set forth below, the ratio of (i) the sum of (A) Consolidated EBITDA and (B) Consolidated Lease Expense to (ii) Consolidated Fixed Charges to be less than the ratio set forth opposite such period below:
---------------------------------------- ------------------------------ Test Period Ratio ---------------------------------------- ------------------------------ 6/30/00 0.65 ---------------------------------------- ------------------------------ 9/30/00 0.70 ---------------------------------------- ------------------------------ 12/31/00 0.70 ---------------------------------------- ------------------------------ 3/31/01 0.80 ---------------------------------------- ------------------------------ 6/30/01 1.00 ---------------------------------------- ------------------------------ 9/30/01 1.00 ---------------------------------------- ------------------------------ 12/31/01 1.00 ---------------------------------------- ------------------------------ 12/31/02 1.00 ---------------------------------------- ------------------------------ 12/31/03 1.00 ---------------------------------------- ------------------------------ 12/31/04 1.00 ---------------------------------------- ------------------------------ 12/31/05 1.20 ---------------------------------------- ------------------------------ 12/31/06 1.20 ---------------------------------------- ------------------------------
(f) Section 9.7 is hereby amended by deleting such Section in its entirety and substituting in lieu thereof the following: "9.7 LIMITATION ON DIVIDENDS. Declare or pay any dividend (other than dividends payable solely in common stock of the Borrower) on, or make any payment on account of, or set apart assets for a sinking or other analogous fund Exhibit 4 -5- 6 for, the purchase, redemption, defeasance, retirement or other acquisition of, any shares of any class of Capital Stock of the Borrower or any warrants or options to purchase any such Capital Stock or make any prepayment, repurchase, redemption or defeasance in respect of the Three Cities Subordinated Debt or any Special Subordinated Debt (other than with the proceeds of Replacement Subordinated Debt and regularly scheduled payments in accordance with the terms thereof), whether now or hereafter outstanding, or make any other distribution in respect thereof, either directly or indirectly, whether in cash or property or in obligations of the Borrower or any Subsidiary (such declarations, payments, setting apart, purchases, redemptions, defeasances, retirements, acquisitions and distributions being herein called "RESTRICTED PAYMENTS"), except that the Borrower may make Restricted Payments as follows: (a) prepayments, repurchases, redemptions or defeasances of any Subordinated Debt made with the proceeds of Replacement Subordinated Debt; (b) prepayments, repurchases, redemptions or defeasances of any Special Subordinated Debt made no earlier than June 30, 2002 (unless paid from proceeds described in Exhibit 1.2-B(1) of the Precision Acquisition Agreement) in an amount not to exceed $3,000,000; (c) purchases of the Capital Stock of the Borrower in connection with the payment of the option price or taxes in connection with the exercising of options or the grant of restricted shares under compensation plans of the Borrower done in the ordinary course of the Borrower's business and consistent with past practices of the Borrower; and (d) purchases of the Capital Stock of the Borrower in connection with the termination of any pension plans to the extent permitted by Section 5.5(b)." (g) Section 10 is hereby amended by (i) adding the word "or" at the end of clause (m) thereof and (ii) adding a new clause (n) to read in its entirety as follows: "(n) The Warrant shall cease, for any reason, prior to its exercise or surrender by the holder thereof, to be in full force and effect, or any Loan Party or any shareholder of any Loan Party shall so assert in writing." (h) Schedule 1.1 is hereby amended by deleting such Section in its entirety and substituting in lieu thereof the attached Schedule 1.1. 3. BORROWER'S BOOKS AND RECORDS. The Borrower shall permit, and shall fully cooperate with the conduct of an examination of the Borrower's books and records relating to the balance sheets of the Borrower and its Subsidiaries (including a review of receivables and inventory and percentage of completion contract accounting) by consultants satisfactory to the Administrative Agent, to be conducted at the Borrower's expense. Exhibit 4 -6- 7 4. EFFECTIVENESS. This Amendment shall become effective upon the satisfaction of the following conditions precedent: (a) receipt by the Administrative Agent of evidence satisfactory to the Administrative Agent that this Amendment has been executed and delivered by the Borrower, the Required Lenders and each of the Guarantors; (b) receipt by the Administrative Agreement of a Deferral Agreement and Waiver from the holder of the Three Cities Subordinated Debt, pursuant to which such holder agrees to defer cash interest and waive any applicable covenant defaults on the Three Cities Subordinated Debt until October 31, 2000, in form and substance satisfactory to the Administrative Agent; (c) receipt by the Administrative Agent of the Warrant duly executed and delivered by the Borrower, in form and substance satisfactory to the Administrative Agent; (d) receipt by the Administrative Agent of a legal opinion from counsel to the Borrower, in form and substance satisfactory to the Administrative Agent; (e) after giving effect to this Amendment, the representations and warranties contained in the Credit Agreement and the other Loan Documents will be true and correct in all material respects; and (f) after giving effect to this Amendment, no Default or Event of Default exists under the Credit Agreement and the other Loan Documents. 5. REPRESENTATIONS AND WARRANTIES. To induce the Administrative Agent and the Lenders to enter into this Amendment, the Borrower hereby represents and warrants to the Administrative Agent and the Lenders that, after giving effect to the amendments and waiver provided for herein, the representations and warranties contained in the Credit Agreement and the other Loan Documents will be true and correct in all material respects as if made on and as of the date hereof and that no Default or Event of Default will have occurred and be continuing. 6. NO OTHER AMENDMENTS AND WAIVERS. Except as expressly amended and waived hereby, the Credit Agreement, the Notes and the other Loan Documents shall remain in full force and effect in accordance with their respective terms, without any waiver, amendment or modification of any provision thereof. 7. COUNTERPARTS. This Amendment may be executed by one or more of the parties hereto on any number of separate counterparts and all of said counterparts taken together shall be deemed to constitute one and the same instrument. 8. EXPENSES. The Borrower agrees to pay and reimburse the Administrative Agent for all of the out-of-pocket costs and expenses incurred by the Administrative Agent in connection with the preparation, execution and delivery of this Amendment, including, without limitation, the fees and disbursements of Cadwalader, Wickersham & Taft, counsel to the Administrative Agent. Exhibit 4 -7- 8 9. APPLICABLE LAW. THIS AMENDMENT SHALL BE GOVERNED BY, AND CONSTRUED AND INTERPRETED IN ACCORDANCE WITH, THE LAW OF THE STATE OF NEW YORK. [SIGNATURE PAGES FOLLOW] Exhibit 4 -8- 9 IN WITNESS WHEREOF, the parties hereto have caused this Amendment to be duly executed and delivered as of the day and year first above written. GENESIS WORLDWIDE, INC., formerly THE MONARCH MACHINE TOOL COMPANY, as Borrower By: --------------------------------------- Name: Title: ING (U.S.) CAPITAL LLC, as Administrative Agent and as Lender By: --------------------------------------- Name: Title: Exhibit 4 -9- 10 The undersigned guarantors hereby consent and agree to the foregoing Amendment: PRECISION INDUSTRIAL CORPORATION By: --------------------------------------- Name: ------------------------------------- Title: ------------------------------------ HERR-VOSS INDUSTRIES, INC. By: --------------------------------------- Name: ------------------------------------- Title: ------------------------------------ HERR-VOSS CORPORATION By: --------------------------------------- Name: ------------------------------------- Title: ------------------------------------ H-V TECHNICAL SERVICES, INC. By: --------------------------------------- Name: ------------------------------------- Title: ------------------------------------ H-V ASSET MANAGEMENT, INC. By: --------------------------------------- Name: ------------------------------------- Title: ------------------------------------ Exhibit 4 -10- 11 H-V MILL ROLL SERVICES, INC. By: --------------------------------------- Name: ------------------------------------- Title: ------------------------------------ H-V EQUIPMENT COMPANY By: --------------------------------------- Name: ------------------------------------- Title: ------------------------------------ H-V ROLL CENTER, INC. By: --------------------------------------- Name: ------------------------------------- Title: ------------------------------------ MONARCH OHIO, INC. By: --------------------------------------- Name: ------------------------------------- Title: ------------------------------------ "GENCOAT INC. (formerly GFC Corporation)" By: --------------------------------------- Name: ------------------------------------- Title: ------------------------------------ Exhibit 4 -11- 12 GENSYSTEMS INC. By: --------------------------------------- Name: ------------------------------------- Title: ------------------------------------ SALEM INTERNATIONAL SERVICES, INC. By: --------------------------------------- Name: ------------------------------------- Title: ------------------------------------ GENINTERNATIONAL INC. By: --------------------------------------- Name: ------------------------------------- Title: ------------------------------------ GENSYSTEMS SERVICES INC. By: --------------------------------------- Name: ------------------------------------- Title: ------------------------------------ WLT CORPORATION By: --------------------------------------- Name: ------------------------------------- Title: ------------------------------------ Exhibit 4 -12- 13 SCHEDULE 1.1 LENDERS, COMMITMENTS AND APPLICABLE LENDING OFFICES
--------------------------------------- -------------------- ------------------ -------------------- Tranche A Tranche B Lender and Lending Offices Term Loan Term Loan Revolving Credit Commitment Commitment Commitment --------------------------------------- -------------------- ------------------ -------------------- ING (U.S.) CAPITAL LLC Applicable Lending Offices: Base Rate Loans and Eurodollar Loans: $50,000,000 $20,000,000 $30,000,000 (during the 55 East 52nd Street Temporary Increase New York, New York 10055 Commitment Period Attention: Lisa H. Cummings the amount shall Telephone: 212-409-1676 be $35,000,000). Telecopy: 212-486-6341 --------------------------------------- -------------------- ------------------ -------------------- --------------------------------------- -------------------- ------------------ -------------------- Total: $50,000,000 $20,000,000 $30,000,000 =========== =========== =========== (during the Temporary Increase Commitment Period the total shall be $35,000,000). --------------------------------------- -------------------- ------------------ --------------------
Exhibit 4 -13- EX-27 3 ex27.txt EXHIBIT 27
5 1,000 6-MOS DEC-31-2000 JAN-01-2000 JUN-30-2000 105 0 24,657 893 10,975 57,721 40,036 11,479 166,043 57,721 80,813 0 14 10,160 23,871 166,043 66,616 66,616 53,132 53,132 0 105 4,415 (4,741) 124 (4,865) (576) 0 0 (5,441) (1.27) (1.27)
-----END PRIVACY-ENHANCED MESSAGE-----