-----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, OJ/jP2hJWYqExzinPwIi81keqaK+shBT288cH85MVuraYuBT77k2wkBAy0Lo4A/y 5lreOWz0yH5bSBNaEBYkZQ== 0000716823-97-000006.txt : 19970505 0000716823-97-000006.hdr.sgml : 19970505 ACCESSION NUMBER: 0000716823-97-000006 CONFORMED SUBMISSION TYPE: 10-Q PUBLIC DOCUMENT COUNT: 4 CONFORMED PERIOD OF REPORT: 19970322 FILED AS OF DATE: 19970502 SROS: NYSE FILER: COMPANY DATA: COMPANY CONFORMED NAME: CINCINNATI MILACRON INC /DE/ CENTRAL INDEX KEY: 0000716823 STANDARD INDUSTRIAL CLASSIFICATION: MACHINE TOOLS, METAL CUTTING TYPES [3541] IRS NUMBER: 311062125 STATE OF INCORPORATION: DE FISCAL YEAR END: 1230 FILING VALUES: FORM TYPE: 10-Q SEC ACT: 1934 Act SEC FILE NUMBER: 001-08485 FILM NUMBER: 97594361 BUSINESS ADDRESS: STREET 1: 4701 MARBURG AVE CITY: CINCINNATI STATE: OH ZIP: 45209 BUSINESS PHONE: 5138418100 MAIL ADDRESS: STREET 1: 4701 MARBURG AVE CITY: CINCINNATI STATE: OH ZIP: 45209 FORMER COMPANY: FORMER CONFORMED NAME: CINCINNATI MILACRON HOLDINGS INC DATE OF NAME CHANGE: 19830503 FORMER COMPANY: FORMER CONFORMED NAME: CINCINNATI MILLING MACHINE CO DATE OF NAME CHANGE: 19600201 10-Q 1 ============================================================ UNITED STATES 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 March 22, 1997 [ ] Transition Report Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934. For the transition period from __________ to __________ Commission file number 1-8485 CINCINNATI MILACRON INC. (Exact name of registrant as specified in its charter) Delaware 31-1062125 (State or other jurisdiction of (I.R.S. Employer incorporation or organization) Identification No.) 4701 Marburg Avenue Cincinnati, Ohio 45209 (Address of principal executive offices) (513)841-8100 (Registrant's telephone number, including area code) Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities 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 [ ] Number of shares of Common Stock, $1.00 par value, outstanding as of April 30, 1997: 39,818,195 ============================================================ CINCINNATI MILACRON INC. AND SUBSIDIARIES INDEX Page No. PART I. FINANCIAL INFORMATION Item 1. Financial Statements Consolidated Condensed Balance Sheet 3 Consolidated Condensed Statement of Earnings 4 Consolidated Condensed Statement of Cash Flows 5 Notes to Consolidated Condensed Financial Statements 6 Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations 12 PART II. OTHER INFORMATION Item 6. (a) Exhibits 18 (b) Reports on Form 8-K 18 Signatures 19 Index to Exhibits 20 PART I. FINANCIAL INFORMATION CINCINNATI MILACRON INC. AND SUBSIDIARIES CONSOLIDATED CONDENSED BALANCE SHEET (UNAUDITED) (In millions) MARCH 22, DEC. 28, 1997 1996 -------- -------- ASSETS Current assets Cash and cash equivalents $ 30.0 $ 27.8 Notes and accounts receivable, less allowances of $13.1 in 1997 and $13.7 in 1996 237.8 267.0 Inventories Raw materials 25.5 27.8 Work-in-process and finished parts 204.5 202.7 Finished products 166.5 159.2 -------- -------- Total inventories 396.5 389.7 Other current assets 51.1 43.4 -------- -------- Total current assets 715.4 727.9 Property, plant and equipment 602.3 618.6 Less accumulated depreciation 294.3 299.5 -------- -------- Property, plant and equipment - net 308.0 319.1 Goodwill 225.8 229.9 Other noncurrent assets 62.1 59.4 -------- -------- TOTAL ASSETS $1,311.3 $1,336.3 ======== ======== LIABILITIES AND SHAREHOLDERS' EQUITY Current liabilities Amounts payable to banks and current portion of long-term debt $ 77.5 $ 70.9 Trade accounts payable 125.1 134.9 Advance billings and deposits 35.6 34.5 Accrued and other current liabilities 165.3 169.3 -------- -------- Total current liabilities 403.5 409.6 Long-term accrued liabilities 178.1 178.6 Long-term debt 296.2 301.9 -------- -------- TOTAL LIABILITIES 877.8 890.1 -------- -------- Commitments and contingencies - - SHAREHOLDERS' EQUITY Preferred shares 6.0 6.0 Common shares (outstanding: 39.8 in 1997 and 1996) 423.3 429.9 Reinvested earnings 29.3 19.9 Cumulative foreign currency translation adjustments (25.1) (9.6) -------- -------- TOTAL SHAREHOLDERS' EQUITY 433.5 446.2 -------- -------- TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY $1,311.3 $1,336.3 ======== ======== See notes to consolidated condensed financial statements. CINCINNATI MILACRON INC. AND SUBSIDIARIES CONSOLIDATED CONDENSED STATEMENT OF EARNINGS (UNAUDITED) (In millions, except share and per-share amounts) 12 WEEKS ENDED ------------------- MARCH 22, MARCH 23, 1997 1996 -------- -------- Sales $ 377.5 $ 353.4 Cost of products sold 283.6 262.9 ------- ------ Manufacturing margins 93.9 90.5 ------- ------ Other costs and expenses Selling and administrative 68.9 66.2 Minority shareholders' interests - .1 Other - net 2.8 1.3 ------- ------ Total other costs and expenses 71.7 67.6 ------- ------ Operating earnings 22.2 22.9 Interest Income .5 1.1 Expense (6.4) (8.3) ------- ------ Interest - net (5.9) (7.2) ------- ------ EARNINGS BEFORE INCOME TAXES 16.3 15.7 Provision for income taxes 3.3 3.1 ------- ------ NET EARNINGS $ 13.0 $ 12.6 ======= ======= EARNINGS PER COMMON SHARE $ .33 $ .36 ======= ======= Dividends per common share $ .09 $ .09 Weighted average number of shares and common share equivalents outstanding (in thousands) 39,897 34,842 See notes to consolidated condensed financial statements. CINCINNATI MILACRON INC. AND SUBSIDIARIES CONSOLIDATED CONDENSED STATEMENT OF CASH FLOWS (UNAUDITED) (In millions) 12 WEEKS ENDED -------------------- MARCH 22, MARCH 23, 1997 1996 -------- -------- INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS OPERATING ACTIVITIES CASH FLOWS Net earnings $ 13.0 $ 12.6 Operating activities providing (using) cash Depreciation and amortization 10.8 9.6 Deferred income taxes (6.3) (.5) Working capital changes Notes and accounts receivable 19.9 26.4 Inventories (18.0) (8.6) Other current assets (5.8) .6 Trade accounts payable and other current liabilities (4.5) (23.1) Decrease (increase) in other noncurrent assets 1.5 (1.2) Increase in long-term accrued liabilities 1.6 6.1 Other - net (1.7) (1.2) ------- ------- Net cash provided by operating activities 10.5 20.7 ------- ------- INVESTING ACTIVITIES CASH FLOWS Capital expenditures (6.6) (8.0) Net disposals of property, plant and equipment .2 .5 Acquisitions - (73.2) ------- ------- Net cash used by investing activities (6.4) (80.7) ------- ------- FINANCING ACTIVITIES CASH FLOWS Dividends paid (3.7) (3.1) Issuance of long-term debt .6 - Repayments of long-term debt (1.7) (.2) Increase in amounts payable to banks 9.5 3.8 Net issuance of common shares .2 .7 Net purchase of treasury shares (6.8) - ------- ------- Net cash (used) provided by financing activities (1.9) 1.2 ------- ------- INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS 2.2 (58.8) Cash and cash equivalents at beginning of period 27.8 133.1 ------- ------- CASH AND CASH EQUIVALENTS AT END OF PERIOD $ 30.0 $ 74.3 ======= ======= See notes to consolidated condensed financial statements. CINCINNATI MILACRON INC. AND SUBSIDIARIES NOTES TO CONSOLIDATED CONDENSED FINANCIAL STATEMENTS (UNAUDITED) BASIS OF PRESENTATION - --------------------- In the opinion of management, the accompanying unaudited consolidated condensed financial statements contain all adjustments, including only normal recurring adjustments, necessary to present fairly the company's financial position, results of operations and cash flows. The Consolidated Condensed Balance Sheet at December 28, 1996, has been derived from the audited consolidated financial statements at that date. The accounting policies followed by the company are set forth in the "Summary of Significant Accounting Policies" note to the consolidated financial statements included in the company's Annual Report on Form 10-K for the year ended December 28, 1996. ACQUISITION - ----------- On January 26, 1996, the company acquired The Fairchild Corporation's D-M-E business (D-M-E) for approximately $246 million. D-M-E is the largest U.S. producer of mold bases, standard components and supplies for the plastics injection mold-making industry. The company financed the acquisition through the execution of promissory notes to the seller in the amount of $182 million and cash on hand of $64 million. The promissory notes were subsequently repaid using the proceeds from an equity offering (see Shareholders' Equity), available cash and borrowings under the company's existing lines of credit. The D-M-E acquisition was accounted for under the purchase method. The aggregate cost of the acquisition, including professional fees and other related costs, was $248.1 million. The allocation of the acquisition cost to the assets acquired and the liabilities assumed is presented in the table that follows. (In millions) 1996 ------ Cash and cash equivalents $ 1.3 Accounts receivable 25.5 Inventories 29.6 Other current assets 1.2 Property, plant and equipment 43.9 Goodwill 162.5 Other noncurrent assets 7.9 ------ Total assets 271.9 Current accrued liabilities (18.9) Long-term accrued liabilities (4.9) ------ Total liabilities (23.8) ------ Total acquisition cost $248.1 ====== Unaudited pro forma sales and earnings information for the 12 weeks ended March 23, 1996, is presented in the following table. The amounts assume that the acquisition of D-M-E had taken place at the beginning of 1996. (In millions, except per-share amounts) 12 Weeks Ended March 23, 1996 -------- Sales $ 368.9 ======== Net earnings $ 12.7 ======== Per common share $ .36 ======== SEVERANCE EXPENSE - ----------------- In the first quarter of 1997, the company recorded severance expense of approximately $2.0 million before tax ($1.6 million after tax) related to a workforce reduction plan involving approximately 60 employees at the company's German plastics machinery business, Ferromatik. The plan, approved by management and the Works Council in the first quarter of 1997, will result in a total cash cost of about $2.0 million, all of which will be expended in 1997. The company expects to achieve annual cost savings of approximately $3.5 million as a result of the workforce reduction and other actions at Ferromatik, some of which will begin to be realized in the second quarter of 1997. INCOME TAXES - ------------ In both 1997 and 1996, the provision for income taxes consists of U.S. federal and state and local income taxes, non-U.S. income taxes in certain jurisdictions, and the effects of the reversal of U.S. and certain non-U.S. valuation allowances. The company entered 1996 with non-U.S. net operating loss carryforwards totaling $144 million, the deferred tax assets related to which had been partially or substantially fully reserved through valuation allowances at year-end 1995. The company reviews the valuation of all deferred tax assets on an ongoing basis and concluded in 1996 that it is more likely than not that a portion of these assets will be realized in the future. Accordingly, U.S. and certain non-U.S. valuation allowances were reversed, resulting in an effective tax rate less than the U.S. statutory rate. Due in part to the reduction of the aggregate net operating loss carryforward from $144 million to $125 million at year-end 1996, and the expectation of additional loss carryforward utilization in 1997 and 1998, the 1997 provision for income taxes includes the reversal of additional valuation allowances in the U.S. and in certain non-U.S. jurisdictions. As a result, the 1997 effective tax rate is less than the U.S. statutory rate. RECEIVABLES - ----------- In accordance with the company's receivables purchase agreement with an independent party, the company sells on an ongoing basis undivided percentage ownership interests of up to $75 million in designated pools of accounts receivable. The amount of undivided interests that have been sold at various balance sheet dates is as follows: $75 million at March 23, 1997 and December 28, 1996, $64 million at March 23, 1996, and $69 million at December 30, 1995. Any increases or decreases in the amount sold are reported as operating cash flows in the Consolidated Condensed Statement of Cash Flows. Costs related to the sales are included in other costs and expenses - net in the Consolidated Condensed Statement of Earnings. LIABILITIES - ----------- The components of accrued and other current liabilities and long-term accrued liabilities are shown in the following tables. (In millions) Mar. 22, Dec. 28, 1997 1996 ------- ------- ACCRUED AND OTHER CURRENT LIABILITIES Accrued salaries, wages and other compensation $ 52.4 $ 51.9 Accrued and deferred income taxes 17.3 13.6 Other accrued expenses 95.6 103.8 ------ ------ $165.3 $169.3 ====== ====== LONG-TERM ACCRUED LIABILITIES Accrued pension and other compensation $ 66.6 $ 67.1 Accrued postretirement health care benefits 48.2 48.4 Accrued and deferred income taxes 28.1 26.9 Minority shareholders' interests 12.7 12.7 Other 22.5 23.5 ------ ------ $178.1 $178.6 ====== ====== LONG-TERM DEBT - -------------- The components of long-term debt are shown in the following table. (In millions) Mar. 22, Dec. 28, 1997 1996 ------- ------- Long-term debt 7-7/8% Notes due 2000 $ 100.0 $ 100.0 8-3/8% Notes due 2004 115.0 115.0 Revolving credit facility 74.4 80.3 Other 10.5 11.8 ------- ------- Total long-term debt 299.9 307.1 Less current maturities (3.7) (5.2) ------- ------- $ 296.2 $ 301.9 ======= ======= Outstanding borrowings under the company's revolving credit facility of DM 125 million ($74.4 million at March 22, 1997 and $80.3 million at December 28, 1996) are included in long-term debt based on the expectation that these borrowings will remain outstanding for more than one year. LINES OF CREDIT - --------------- In March, 1997, at the company's request, the committed revolving credit facility was reduced from $300 million to $200 million and the term of the agreement was extended to January, 2002. The restriction on total indebtedness in relation to total capital was replaced by a covenant of debt in relation to earnings before interest, income taxes, depreciation and amortization (EBITDA). In addition, the borrowing rate spread was reduced to .425% over LIBOR and the facility fee was reduced to .20% of the total line of credit as of March 22, 1997. The pricing under this amended facility fluctuates with changes to the debt to EBITDA ratios. At March 22, 1997, the company had lines of credit with various U.S. and non-U.S. banks of approximately $419 million, including the $200 million committed revolving credit facility. These credit facilities support letters of credit and leases in addition to providing borrowings under varying terms. Under the provisions of the amended revolving credit facility, the company's additional borrowing capacity totaled approximately $242 million at March 22, 1997. SHAREHOLDERS' EQUITY - -------------------- In the first quarter of 1997, the company repurchased approximately 300,000 common shares on the open market at a total cost of $6.8 million to meet the needs of management incentive, employee benefit and shareholder dividend reinvestment plans. On May 20, 1996, the company completed the issuance of an additional 5.5 million common shares through a public offering, resulting in net proceeds (after deducting issuance costs) of $128.5 million. The proceeds of the offering were used to repay a portion of the promissory notes issued to the seller in connection with the acquisition of D-M-E. CONTINGENCIES - ------------- The company is involved in remedial investigations and actions at various locations, including former plant facilities, and EPA Superfund sites where the company and other companies have been designated as potentially responsible parties. The company accrues remediation costs in accordance with American Institute of Certified Public Accountants Statement of Position No. 96-1 (which became effective in 1997) when it is probable that a liability has been incurred and the amount of the liability can be reasonably estimated. Environmental costs have not been material in the past. Various lawsuits arising during the normal course of business are pending against the company and its consolidated subsidiaries. In the opinion of management, the ultimate liability, if any, resulting from these matters will have no significant effect on the company's consolidated financial position or results of operations. ORGANIZATION - ------------ The company has three business segments: plastics machinery, machine tools, and industrial products. Financial information for each of these segments for the twelve weeks ended March 22, 1997 and March 23, 1996 is presented below. (In millions) 12 Weeks Ended ------------------- Mar. 22, Mar. 23, 1997 1996 ------- ------- Sales Plastics machinery $ 149.2 $ 122.8 Machine tools 89.8 81.1 Industrial products 138.5 149.5 ------- ------- $ 377.5 $ 353.4 ======= ======= Operating earnings Plastics machinery $ 9.2 $ 10.7 Machine tools 1.8 .9 Industrial products 16.6 16.6 Corporate expenses (3.8) (3.4) Other unallocated expenses (a) (1.6) (1.9) ------- ------- $ 22.2 $ 22.9 ======= ======= New orders Plastics machinery $ 151.1 $ 120.2 Machine tools 97.2 97.9 Industrial products 143.7 152.4 ------- ------- $ 392.0 $ 370.5 ======= ======= Ending backlog $ 387.7 $ 365.3 ======= ======= (a)Includes financing costs related to the sale of accounts receivable and minority shareholders' interests in earnings of subsidiaries. EARNINGS PER COMMON SHARE - ------------------------- Earnings per common share are based on the weighted average number of common shares and common share equivalents outstanding. In February, 1997, the Financial Accounting Standards Board issued Statement of Financial Accounting Standards No. 128, "Earnings per Share," which is effective for financial periods ending after December 15, 1997. Earlier application is not permitted. When it becomes effective, the new standard will require the presentation of both "basic earnings per share," which is based on the weighted-average number of common shares outstanding during a period, and "diluted earnings per share," which includes the effects of stock options and other potentially dilutive securities. At year-end 1997, all previously reported earnings per common share amounts must be restated based on the provisions of the new standard. However, the restated amounts for the first quarters of 1997 and 1996, will not vary significantly from the amounts reported herein. CINCINNATI MILACRON INC. AND SUBSIDIARIES MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS (UNAUDITED) RESULTS OF OPERATIONS The company operates in three business segments: plastics machinery, machine tools and industrial products. The plastics machinery and industrial products businesses have benefited from a number of strategic acquisitions since the beginning of 1995. The most recent was the January 26, 1996, acquisition of D-M-E, which is included in the company's plastics machinery segment for seven weeks in the first quarter of 1996, and the entire 12 weeks in 1997. This had the effect of increasing new orders and sales by approximately $16 million in the first quarter of 1997. In recent years, the company's growth outside the U.S. has allowed the company to be less dependent on the U.S. industrial sector. With sales to non-U.S. markets accounting for 30% to 40% of sales, foreign currency exchange rate fluctuations affect the translation of sales and earnings, as well as consolidated shareholders' equity. Throughout much of 1996 the financial statement effects of a weaker German Mark were to some degree offset by the effects of a stronger British Pound. In the first quarter of 1997, the U.S. dollar strengthened against both the British Pound and German Mark resulting in a translation effect of decreasing new orders by $19 million and sales by $9 million. Net earnings were not negatively affected in the first quarter of 1997 primarily because of the favorable translation effect of a $3.5 million operating loss at Ferromatik in Germany, as described below. In addition, in 1997 there was a $16 million decrease in shareholders' equity due to cumulative foreign currency translation adjustments. If the German Mark remains at current levels or weakens further in 1997, the company will experience a negative effect on translating its European new orders, sales and earnings in 1997 when compared with 1996 results. NEW ORDERS AND BACKLOG New orders in the first quarter of 1997 were $392 million, which represented a $21 million, or 6%, increase from the $371 million in the first quarter of 1996. Excluding the effects of the D-M-E acquisition and the stronger U.S. dollar, new orders increased by $25 million, or 7%. Orders for plastics machinery increased $31 million, or 26%, to $151 million from $120 million in the first quarter of 1997 as the D-M-E acquisition and increased orders for U.S.-built injection molding machines offset currency effects. Machine tool orders were $97 million in 1997, about the same as 1996. New orders for U.S.-built machine tools and aerospace products continued to improve while orders for U.K.-built products softened. Orders for industrial products were $144 million, down from $152 million in 1996, due primarily to the weaker German Mark and reduced orders for Widia's industrial magnets in Europe. U.S. export orders approximated $40 million in the first quarter of 1997 compared with $41 million in the first quarter of 1996. The company's backlog of unfilled orders continued to increase from $365 million at March 23, 1996, to $373 million at December 28, 1996, to $388 million at March 22, 1997. These increases are being driven by increased orders for U.S.-built machine tools, including and most importantly, orders for aerospace products. SALES Sales in the first quarter of 1997 of $378 million increased by $24 million over the first quarter of 1996. Excluding the effects of the D-M-E acquisition and currency exchange rate effects, sales increased by $17 million, or 5%. Plastics machinery sales, excluding the D-M-E acquisition effect, increased by $10 million due to increased sales of U.S.-built injection molding machines. Machine tool sales increased $9 million from last year's first quarter as a result of increased sales of U.S.-built standard machine tools. Industrial products sales decreased $11 million from the first quarter of 1996, more than half of which is due to currency exchange rate fluctuations, with the balance being related mostly to reduced sales of industrial magnets in Europe. Export sales increased from $40 million in the first quarter of 1996 to $42 million in the first quarter of 1997, primarily due to the acquisition effect of D-M-E. MARGINS, COSTS AND EXPENSES The consolidated manufacturing margin percent of 24.9% for the first quarter of 1997 decreased from 25.6% in the first quarter of 1996, almost solely due to reduced margins from the company's European injection molding machine business, Ferromatik. Plastics machinery margins were further held back by competitive pricing in a difficult market, a trend that is expected to continue during the second quarter. Manufacturing margins for both machine tools and industrial products improved. Selling and administrative expense in the first quarter of 1997 increased, as expected, with increased sales and the effect of the acquisition. As a percent to sales, however, selling expense declined compared with the first quarter of 1996. Administrative expense increased, primarily due to the D-M-E acquisition. Other-net represented a $2.8 million expense in 1997 versus a $1.3 million expense in the first quarter of 1996. The increase was caused primarily by an expense for severance benefits of approximately $2.0 million relating to approximately 60 employees at Ferromatik. As a result of this and other actions at Ferromatik, the company expects to achieve annualized savings of $3.5 million, which will begin to phase in during the second quarter of 1997. Also included in other- net is $.6 million of income related to the early termination of a technology license agreement which benefited the industrial products group in 1997. Interest expense - net decreased by $1.3 million in the first quarter of 1997 compared to the first quarter of 1996 due to repayment of debt using the proceeds from the May, 1996 equity offering. EARNINGS BEFORE INCOME TAXES In the first quarter of 1997, the company's Ferromatik subsidiary incurred a pretax operating loss of $3.5 million, of which about $2.0 million represents severance expense to implement a workforce reduction plan. Despite this loss, the company's earnings before income taxes of $16.3 million in 1997 represented a 4% improvement over the comparable quarter of 1996. INCOME TAXES The provision for income taxes in 1997 and 1996 includes U.S. federal and state and local income taxes, and income taxes in other jurisdictions outside the U.S. The company entered both years with sizeable net operating loss (NOL) carryforwards, along with valuation allowances in certain jurisdictions against the NOL carryforwards and other deferred tax assets. By the beginning of 1996, the company had fully utilized its U.S. NOL carryforwards, but as of December 28, 1996, its non- U.S. NOL carryforwards totaled $125 million, most of which have no expiration dates. The company's practice is to periodically reevaluate the future realization of all of its deferred tax assets. During 1997 and 1996, the company concluded that it is more likely than not that a portion of these assets will be offset against future taxable income. As a result, the company reversed valuation allowances in certain jurisdictions which caused the provision for income taxes to be less than the statutory rate. The company expects the utilization of these NOL carryforwards and reversal of additional valuation allowances to continue to cause the effective tax rate to be less than the U.S. statutory rate through at least 1997, and most likely through 1998. NET EARNINGS Net earnings were $13.0 million, or $.33 per share, in the first quarter of 1997 compared with $12.6 million, or $.36 per share, in the first quarter of 1996. Even though net earnings increased, earnings per share decreased due to the issuance of additional common shares in May, 1996. Net earnings and earnings per share for the first quarter of 1997 were reduced by $1.6 million after-tax, or $.04 per share, for the Ferromatik severance expense. Excluding the severance expense, 1997 net earnings and earnings per share would have increased by $2.0 million, or $.01 per share, over the 1996 net earnings of $12.6 million and earnings per share of $.36. LIQUIDITY AND SOURCES OF CAPITAL - -------------------------------- At March 22, 1997, the company had cash and cash equivalents of $30 million, an increase of $2 million during the first quarter of 1997. Operating activities provided $11 million of cash in 1997, compared with $21 million provided in the first quarter of 1996. This decline was caused primarily by higher inventory levels in the company's machinery businesses related to increased order levels. Operating activities cash flows were reduced by cash costs of $2 million in 1996 for the integration and restructuring of Valenite and Widia which had begun in 1995. Investing activities in 1997 resulted in a $6 million use of cash, mostly due to capital expenditures. Net cash used by investing activities totaled $81 million in 1996, including $73 million for the D-M-E acquisition. Financing activities used $2 million of cash in 1997. In the first quarter of 1997, the company used $7 million of cash to repurchase approximately 300,000 common shares on the open market to meet the needs of management incentive, employee benefit and dividend reinvestment plans. Amounts payable to banks also increased by $10 million, although total debt increased by only $1 million during the quarter due to currency exchange rate effects. As of March 22, 1997, the company's current ratio of 1.8 was unchanged from 1.8 at December 28, 1996, but down from 2.0 at March 23, 1996. At March 22, 1997, the company had lines of credit with various U.S. and non-U.S. banks of approximately $419 million, including a $200 million committed revolving credit facility. In March, 1997, at the company's request, the revolving credit facility was reduced from $300 million to $200 million and the term was extended to January 2002. The restriction on total indebtedness in relation to total capital was removed and a covenant of debt to earnings before interest, income taxes, depreciation and amortization (EBITDA) was substituted. Under the provisions of the facility, the company's additional borrowing capacity totaled approximately $242 million at March 22, 1997. The company had a number of short-term intercompany loans and advances denominated in various currencies totaling $48.3 million at March 22, 1997, that were subject to foreign currency exchange risk. The company also enters into various transactions, in the ordinary course of business, for the purchase and sale of goods and services in various currencies. The company hedges its exposure to currency fluctuations related to short-term intercompany loans and advances and the purchase and sale of goods under firm commitments by entering into foreign currency exchange contracts to minimize the effect of foreign currency exchange rate fluctuations. The company is currently not involved with any additional derivative financial instruments. The interest rates on the lines of credit and the financing fees on the receivables purchase agreement fluctuate based on changes in prevailing interest rates in the countries in which amounts are borrowed or receivables are sold. At March 22, 1997, approximately $227.6 million was subject to the effects of fluctuations in interest rates under these arrangements. Future changes in interest rates will affect the company's interest expense and other financing costs. Total debt was $374 million at March 22, 1997, an increase of $1 million over December 28, 1996. Total shareholders' equity was $434 million at March 22, 1997, a decrease of $13 million from December 28, 1996, primarily due the $16 million effect of the stronger U.S. dollar on the cumulative foreign currency translation adjustment. The ratio of total debt to total capital (debt plus equity) remained at 46% at March 22, 1997, compared with December 28, 1996, but down from 65% at March 23, 1996. Capital expenditures in 1997 are expected to range between $70 million and $83 million, dependent upon the timing of certain projects, and the company expects to expend about $2 million for Ferromatik severance payments. The company believes that its cash flow from operations and available credit lines will be sufficient to meet these and other operating requirements. OUTLOOK - ------- The company's outlook for the North American and Asian markets remains positive, but it is less confident in the European outlook. Assuming Europe picks up in the last half of 1997, the company believes it is positioned to meet its annual targets of 7% to 8% sales growth and 15% or greater increases in earnings per share. If the European rebound is delayed, the company expects to show less significant increases in 1997 over 1996. The above forward-looking statements involve risks and uncertainties that could significantly impact expected results, as described more fully in the Cautionary Statement below. CAUTIONARY STATEMENT The company wishes to caution readers that all its forward- looking statements in the "Outlook" section above and elsewhere, which include all statements which, at the time made, speak about the future, are based upon its interpretation of what it believes are significant factors affecting its businesses. The company believes the following important factors, among others, in some cases have affected, and, in the future, could affect, the company's actual results and could cause the company's actual consolidated results for 1997, and beyond, to differ materially from those expressed in any forward-looking statements made by, or on behalf of, the company: * global economic conditions, consumer spending and industrial production in the United States and Europe, particularly in segments related to the level of automotive production and spending in the aerospace and construction industries; * fluctuations in interest rates currency exchange rates of U.S. and foreign countries, including those of countries in Europe and Asia where the company has several principal manufacturing facilities and where many of the company's competitors and suppliers are based; * production and pricing levels of important raw materials, including plastic resins, which are a key raw material used by purchasers of the company's plastics machinery products, and steel, cobalt, tungsten and industrial grains used in the production of metalworking products; * lower than anticipated levels of plant utilization resulting in production inefficiencies and higher costs, whether related to the delay of new product introductions, improved production processes or equipment, or labor relation issues; * any major disruption in production at key customer or supplier facilities; * alterations in trade conditions in and between the U.S. and non-U.S. countries where the company does business, including export duties, import controls, quotas and other trade barriers; and * changes in tax, environmental and other laws and regulations in the U.S. and non-U.S. countries where the company does business. PART II. OTHER INFORMATION CINCINNATI MILACRON INC. AND SUBSIDIARIES ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K - ----------------------------------------- (a) Exhibits Exhibit (3) - Articles of Incorporation and Bylaws Exhibit (4) - Instruments Defining the Rights of Security Holders, Including Indentures Exhibit (10) - Material Contracts Exhibit (11) - Statement Regarding Computation of Per Share Earnings - filed as a part of Part I Exhibit (27) - Financial Data Schedule - filed as part of Part I (b) Reports on Form 8-K There were no reports on Form 8-K filed during the quarter ended March 22, 1997. CINCINNATI MILACRON INC. AND SUBSIDIARIES SIGNATURES Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized. Cincinnati Milacron Inc. Date: May 1, 1997 By:/s/Robert P. Lienesch ----------------- --------------------- Robert P. Lienesch Controller Date: May 1, 1997 By:/s/Ronald D. Brown ----------------- --------------------- Ronald D. Brown Vice President - Finance and Administration and Chief Financial Officer CINCINNATI MILACRON INC. AND SUBSIDIARIES INDEX TO EXHIBITS EXHIBIT NO. PAGE NO. - ----------- -------- 2 Plan of Acquisition, Reorganization, Arrangement, Liquidation or Succession - Not Applicable. 3 Articles of Incorporation and By-laws 3.1 - Incorporated herein by reference to the company's annual report on Form 10-K for the fiscal year ended December 28, 1996. 4 Instruments Defining the Rights of Security Holders, Including Indentures. 4.1 12% Sinking Fund Debentures due July 15, 2010 - Incorporated herein by reference to the company's Registration Statement on Form S-3 (Registration No. 2-98653). 4.2 8-3/8% Notes due 2004 - Incorporated herein by reference to the company's Amendment No. 3 to Form S-4 Registration Statement (Registration No. 33-53009). 4.3 7-7/8% Notes due 2000 - Incorporated herein by reference to the company's Registration Statement on Form S-4 (Registration No. 33-60081). 4.4 Cincinnati Milacron Inc. hereby agrees to furnish to the Securities and Exchange Commission, upon its request, the instruments with respect to the long-term debt for securities authorized thereunder which do not exceed 10% of the registrant's total consolidated assets. 10 Material Contracts 10.1 - Incorporated herein by reference to the company's annual report on Form 10-K for the fiscal year ended December 28, 1996. 10.2 Amendment Number Four, Dated as of March (Bound 14, 1997, to the Amended and Restated Separately) Revolving Credit Agreement dated as of December 31, 1994, among Cincinnati Milacron Inc., Cincinnati Milacron Kunststoffmaschinen Europe GmbH, the lenders listed therein, and Bankers Trust Company, as agent. - Filed Herewith. 11 Statement Regarding Computation of Per Share Earnings 22 15 Letter re: Unaudited Interim Financial Information - Not Applicable. 18 Letter Regarding Change in Accounting Principles - Not Applicable. 19 Report Furnished to Security Holders - Not Applicable. 22 Published Report Regarding Matters Submitted To Vote of Security Holders - Not Applicable. 23 Consents of Experts and Counsel - Not Applicable. 24 Power of Attorney - Not Applicable. 27 Financial Data Schedule 23 99 Additional Exhibits - Not Applicable. EX-11 2 Cincinnati Milacron Inc. and Subsidiaries Computation of Per Share Earnings (Unaudited) (In thousands, except per-share amounts) 12 Weeks Ended -------------------- March 22, March 23, 1997 1996 -------- -------- Net earnings $ 13,047 $ 12,595 Less preferred dividends (60) (60) -------- -------- Net earnings available to common shareholders 12,987 $ 12,535 ======== ======== Primary Average number of common shares outstanding 39,810 34,271 Add dilutive effect of stock options based on treasury stock method 287 571 Deduct antidilutive restricted shares subject to contingent vesting (200) - -------- -------- Total 39,897 34,842 ======== ======== Per share amount $ .33 $ .36 ======== ======== Fully diluted Average number of common shares outstanding 39,810 34,271 Add dilutive effect of stock options based on treasury stock method 287 682 Deduct antidilutive restricted shares subject to contingent vesting (200) - -------- -------- Total 39,897 34,953 ======== ======== Per share amount $ .33 $ .36 ======== ======== Note: This computation is required by Regulation S-K, Item 601, and is filed as an exhibit under Item 6 of Form 10-Q. EX-27 3
5 Other column represents the 12 weeks ended Mar-22-1997 Amounts rounded to tenths of millions, except per share data OTHER DEC-27-1997 DEC-29-1996 MAR-22-1997 30,000,000 0 250,900,000 13,100,000 396,500,000 715,400,000 602,300,000 294,300,000 1,311,300,000 403,500,000 0 423,300,000 0 6,000,000 4,200,000 1,311,300,000 377,500,000 377,500,000 283,600,000 283,600,000 71,700,000 0 5,900,000 16,300,000 3,300,000 13,000,000 0 0 0 13,000,000 .33 .33
EX-10 4 Exhibit 10.2 AMENDMENT NUMBER FOUR, dated as of March 14, 1997 ("Amendment") to the Amended and Restated Revolving Credit Agreement dated as of December 31, 1994, as amended by Amendment Number One, dated as of May 31, 1995, Amendment Number Two, dated as of January 23, 1996, Amendment Number Three, dated as of April 26, 1996 and as amended hereby (the "Credit Agreement"), among CINCINNATI MILACRON INC., a Delaware corporation (the "Borrower" and the "Company"), CINCINNATI MILACRON KUNSTSTOFFMASCHINEN EUROPA GMBH, a German corporation (the "German Borrower" and, collectively, with the Company, the "Borrowers"), the lenders listed on Schedule 2.1 thereto (each a "Lender" and collectively, the "Lenders") and BANKERS TRUST COMPANY, a New York banking corporation ("BTCo"), as a Lender and as agent for the Lenders (in such capacity, including its successors and permitted assigns, the "Agent"). Capitalized terms used and not otherwise defined herein shall have the meanings assigned to them in the Credit Agreement. WHEREAS, the Borrowers have requested that the Agent and the Lenders amend certain provisions of the Credit Agreement; WHEREAS, the Agent and the Lenders have considered and agreed to the Borrowers' requests, upon the terms and conditions set forth in this Amendment; NOW, THEREFORE, in consideration of the foregoing, and for other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the parties hereto hereby agree as follows: SECTION ONE - AMENDMENTS. The Credit Agreement is amended as hereinafter provided in this Section ONE, effective as of March 14, 1997 (the "Amendment Effective Date"). 1.1. Amendments to Section 1 (Definitions) of the Credit Agreement (a) Section 1.1 shall be amended by adding the following new definitions in appropriate alphabetical order: "'Amendment No. 4' shall mean Amendment Number Four dated as of March 14, 1997 to this Agreement." (b) Section 1.1 shall be further amended as follows: "Applicable Borrowing Margin" shall be amended by deleting the definition thereof and replacing it with the following: "'Applicable Borrowing Margin' shall mean: (a) with respect to Eurodollar Loans and Alternate Currency Loans, if the ratio of Consolidated Total Indebtedness to Consolidated EBITDA, as evidenced by the Compliance Certificate of the Company from the preceding quarter and upon receipt of such Compliance Certificate the relevant applicable Borrowing Margin will be given effect, is (x) equal to or less than 3.75 to 1.0 but greater than 3.25 to 1.0, .8250% per annum, (y) equal to or less than 3.25 to 1.OO but greater than 2.50 to 1.O, .6250% per annum, (z) equal to or less than 2.50 to 1.0 but greater than 2.25 to 1.0, .4250% per annum, (xx) equal to or less than 2.25 to 1.0 but greater than 2.00 to 1.0, .3200% per annum, (yy) equal to or less than 2.00 to 1.0 but greater than 1.50 to 1.O, .2250% per annum and (zz) equal to or less than 1.50 to 1.0, .1500% per annum; and (b) with respect to Fixed CD Rate Loans, if the ratio of Consolidated Total Indebtedness to Consolidated EBITDA, as evidenced by the Compliance Certificate of the Company from the preceding quarter and upon receipt of such Compliance Certificate the relevant applicable Borrowing Margin will be given effect, is (x) equal to or less than 3.75 to 1.0 but greater than 3.25 to 1.0, .95% per annum, (y) equal to or less than 3.25 to 1.00 but greater than 2.50 to 1.O, .75% per annum, (z) equal to or less than 2.50 to 1.0 but greater than 2.25 to 1.0, .55% per annum, (xx) equal to or less than 2.25 to 1.0 but greater than 2.00 to 1.0, .445% per annum, (yy) equal to or less than 2.00 to 1.0 but greater than 1.50 to 1.0, .35% per annum and (yy) equal to or less than 1.50 to 1.0, .275% per annum." "Applicable Fee Percentage" shall be amended by deleting the definition thereof and replacing it with the following: "'Applicable Fee Percentage' shall mean, with respect to the Facility Fee as defined in Section 2.13, if the ratio of Consolidated Total Indebtedness to Consolidated EBITDA, as evidenced by the Compliance Certificate of the Company from the preceding quarter and upon receipt of such Compliance Certificate the relevant Applicable Fee Percentage will be given effect, is (x) greater than 2.50 to 1.0, .2500% per annum, (y) equal to or less than 2.50 to 1.0 but greater than 2.25 to 1.O, .2000% per annum, (z) equal to or less than 2.25 to 1.0 but greater than 2.00 to 1.0, .1800% per annum, (xx) equal to or less than 2.00 to 1.0 but greater than 1.50 to 1.0, .1500% per annum and (yy) equal to or less than 1.50 to 1.0, .1250% per annum; and "Final Maturity Date" shall be amended by deleting the definition thereof and replacing it with the following: "'Final Maturity Date' means January 31, 2002; provided, however, that the Company may extend the Final Maturity Date for an additional year by giving the Agent written notice no later than January 15, 2001 of its desire to extend the Final Maturity Date, which extension shall be subject to the consent of each Lender (other than a Defaulting Lender)". 1.2. Amendments to Section 2 (Amount and Terms of Loans) (a) Section 2.1(a) shall be amended by deleting "$300,000,000" immediately following the words "the Total Revolving Loan Commitment is" and substituting "$200,000,000" therefor. (b) Section 2.14(a) shall be amended by deleting "$200,000,000, of which $180,000,000 may be used solely in connection with Authorized Acquisition No. 2" in clause (iii) and substituting "$20,000,000" therefor. (c) Section 2.14(f)(1)(i) shall be amended by deleting it in its entirety and replacing it with the following: "(i) with respect to drawings made under any Letter of Credit, interest, payable on demand, on the amount paid by such Issuing Lender in respect of each such drawing from and including the drawing payment date through the date such amount is reimbursed by the Company (including any such reimbursement out of the proceeds of Revolving Loans pursuant to Section 2.14(d)) at the relevant Eurodollar Rate plus if the ratio of Consolidated Total Indebtedness to Consolidated EBITDA is (x) equal to or less than 3.75 to 1.0 but greater than 3.25 to 1.0, .8250% per annum, (y) equal to or less than 3.25 to 1.00 but greater than 2.50 to 1.0, .6250% per annum, (z) equal to or less than 2.50 to 1.0 but greater than 2.25 to 1.0, .4250% per annum, (xx) equal to or less than 2.25 to 1.0 but greater than 2.00 to 1.0, .3200% per annum, (yy) equal to or less than 2.00 to 1.0 but greater than 1.50 to 1.0, .2250% per annum and (zz) equal to or less than 1.50 to 1.O, .1500% per annum; provided that amounts reimbursed after 1:00 p.m. (New York time) on any date shall be deemed to be reimbursed on the next succeeding Business Day). (d) Section 2.16 shall be amended by deleting the text thereof in its entirety and replacing it with the following: "All interest, fees and other amounts accruing under this Agreement on or prior to, or determined in respect of any day accruing on or prior to, the Amendment Effective Date shall be computed and determined as provided in this Agreement before giving effect to Amendment No. 5." 1.3. Amendment to Section 5 (Affirmative Covenants) to the Credit Agreement (a) Section 5.11 shall be amended by deleting the text thereof in its entirety and replacing it with the following: "5.11 Consolidated Total Indebtedness to Consolidated EBITDA. The Company shall maintain, at all times during the respective periods indicated below, a ratio of Consolidated Total Indebtedness to Consolidated EBITDA not to exceed the respective ratio indicated during such period: Period Ratio 12/29/96 - 12/27/97 3.75 to 1.00 12/28/97 - 12/31/98 3.25 to 1.00 1/1/99 - 12/31/99 2.50 to 1.00 1/1/2000 to 12/31/2000 2.25 to 1.00 1/1/2001 and thereafter 2.00 to 1.00 1.4. Amendments to Section 6 (Negative Covenants) of the Credit Agreement Section 6.2 shall be amended by deleting the parenthetical "(or agree to do any of the foregoing at any future time)." Section 6.3 shall be amended by deleting the text thereof in its entirety. 1.5. Amendments to the Schedules of the Credit Agreement The Lenders' Revolving Loan Commitments shall be amended to be those set forth on Schedule 2.1 attached hereto and, in this regard, Schedule 2.1 shall be amended by deleting it in its entirety and replacing it with the new schedule attached hereto. SECTION TWO - REPRESENTATIONS AND WARRANTIES. The Company hereby confirms, reaffirms and restates the representations and warranties made by it in Section 8 of the Credit Agreement, as amended hereby, and all such representations and warranties are true and correct in all material respects as of the date hereof except such representations and warranties need not be true and correct to the extent that changes in the facts and conditions on which such representations and warranties are based are required or permitted under the Credit Agreement or such changes arise out of events not prohibited by the covenants set forth in Sections 5 and 6 of the Credit Agreement. The Company further represents and warrants (which representations and warranties shall survive the execution and delivery hereof) to the Agent and each Lender that: (a) The Company and the German Borrower each has the corporate power, authority and legal right to execute, deliver and perform this Amendment and has taken all corporate actions necessary to authorize the execution, delivery and performance of this Amendment; (b) No consent of any person other than all of the Lenders, and no consent, permit, approval or authorization of, exemption by, notice or report to, or registration, filing or declaration with, any governmental authority is required in connection with the execution, delivery, performance, validity or enforceability of this Amendment; (c) This Amendment has been duly executed and delivered on behalf of each of the Company and the German Borrower by a duly authorized officer or attorney-in-fact of the Company and the German Borrower, as the case may be, and constitutes a legal, valid and binding obligation of the Company and the German Borrower, as the case may be, enforceable in accordance with its terms, except as the enforceability thereof may be limited by applicable bankruptcy, reorganization, insolvency, moratorium or similar laws affecting creditor's rights generally or by equitable principles relating to enforceability; and (d) The execution, delivery and performance of this Amendment will not violate (i) any provision of law applicable to the Company or the German Borrower or (ii) contractual obligation of either the Company or the German Borrower, except in the case of clause (i) or (ii), such violations that would not have, singly or in the aggregate, a Material Adverse Effect. SECTION THREE - MISCELLANEOUS. (a) The Applicable Borrowing Margin, as of the Amendment Effective Date until receipt of the Compliance Certificate required by Section 5.01 shall be as follows: (i) with respect to Eurodollar Loans and Alternate Currency Loans, .4250% per annum; (ii) with respect to Fixed CD Rate Loans, .55% per annum; and (iii) with respect to Base Rate Loans, 0% per annum. (b) The Applicable Fee Percentage, as of the Amendment Effective Date until receipt of the Compliance Certificate required by Section 5.01 shall be .20% per annum. (c) The Company agrees to pay pursuant to Section 2.14(f)(1)(i) as of the Amendment Effective Date until receipt of the Compliance Certificate required by Section 5.01 with respect to drawings made under any Letter of Credit, an amount in addition to the relevant Eurodollar Rate equal to .425% per annum. (d) Except as herein expressly amended, the Credit Agreement and all other agreements, documents, instruments and certificates executed in connection therewith, except as otherwise provided herein, are ratified and confirmed in all respects and shall remain in full force and effect in accor dance with their respective terms. (e) All references to the Credit Agreement shall mean the Credit Agreement as amended as of the Amendment Effective Date, and as the same may at any time be amended, amended and restated, supplemented or otherwise modified from time to time and as in effect. (f) This Amendment may be executed by the parties hereto in one or more counterparts, each of which shall be an original and all of which shall constitute one and the same agreement. (g) THIS AMENDMENT SHALL BE GOVERNED BY, CONSTRUED AND ENFORCED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW YORK WITHOUT REGARD TO THE PRINCIPLES OF CONFLICT OF LAWS. (h) This Amendment shall not constitute a consent or waiver to or modification of any other provision, term or condition of the Credit Agreement. All terms, provisions, covenants, representations, warranties, agreements and conditions contained in the Credit Agreement, as amended hereby, shall remain in full force and effect. Schedule 2.1 to Amend. No. 5 Lenders' Revolving Loan Commitment and Pro Rata Share Revolving Lender Loan Commitment Pro Rata Share Bankers Trust Company $23,076,924 11.5384620% Credit Lyonnais 23,076,924 11.5384620 Chicago Branch Midland Bank plc, 23,076,924 11.5384620 New York Branch Morgan Guaranty Trust 23,076,924 11.5384620 Company of New York NationsBank, N.A. 23,076,924 11.5384620 NBD Bank 23,076,924 11.5384620 PNC Bank, Ohio, N.A. 23,076,924 11.5384620 Society National Bank 23,076,924 11.5384620 Star Bank, N.A. 15,384,608 7.692304 $200,000,000 100% IN WITNESS WHEREOF, the parties hereto have caused this Amendment to be duly executed as of the date first above written. CINCINNATI MILACRON INC. By: Kenneth W. Mueller Name: Kenneth W. Mueller Title: Treasurer CINCINNATI MILACRON KUNSTSTOFFMASCHINEN EUROPA GmbH By: Kenneth W. Mueller Name: Kenneth W. Mueller On the basis of power of attorney dated as of December 22, 1994 BANKERS TRUST COMPANY, as a Lender and as Agent By: Dana Klein Name: Dana Klein Title: Vice President CREDIT LYONNAIS CHICAGO BRANCH, as a Lender By: Mary Ann Klemm Name: Mary Ann Klemm Title: Vice President and Group Head MIDLAND BANK PLC, NEW YORK BRANCH, as a Lender By: Jonathan Morris Name: Jonathan Morris Title: Vice President MORGAN GUARANTY TRUST COMPANY OF NEW YORK, as a Lender By: Pat Lunka Name: Pat Lunka Title: Vice President NATIONSBANK N.A., as a Lender By: Philip S. Durand Name: Philip S. Durand Title: Vice President NBD BANK, as a Lender By: Edward Hathaway Name: Edward Hathaway Title: Vice President PNC BANK, OHIO, N.A., as a Lender By: David F. Knuth Name: David F. Knuth Title: Vice President SOCIETY NATIONAL BANK, as a Lender By: Wayne K. Guessford Name: Wayne K. Guessford Title: Vice President STAR BANK, N.A., as a Lender By: Thomas D. Gibbons Name: Thomas D. Gibbons Title: Vice President -----END PRIVACY-ENHANCED MESSAGE-----