-----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, TQu3ojgMcJiyc9Ct0i12Xdj++mrypYtXMwxIECpl0ZCB5LiJJYCfv143Wb+M+YbK thWiqBFPr7f5g+/GhTMagA== 0000950135-00-002971.txt : 20000523 0000950135-00-002971.hdr.sgml : 20000523 ACCESSION NUMBER: 0000950135-00-002971 CONFORMED SUBMISSION TYPE: 10-Q PUBLIC DOCUMENT COUNT: 8 CONFORMED PERIOD OF REPORT: 20000429 FILED AS OF DATE: 20000522 FILER: COMPANY DATA: COMPANY CONFORMED NAME: HADCO CORP CENTRAL INDEX KEY: 0000729533 STANDARD INDUSTRIAL CLASSIFICATION: PRINTED CIRCUIT BOARDS [3672] IRS NUMBER: 042393279 STATE OF INCORPORATION: MA FISCAL YEAR END: 1030 FILING VALUES: FORM TYPE: 10-Q SEC ACT: SEC FILE NUMBER: 001-15335 FILM NUMBER: 640767 BUSINESS ADDRESS: STREET 1: 12A MANOR PKWY CITY: SALEM STATE: NH ZIP: 03079 BUSINESS PHONE: 6038988000 MAIL ADDRESS: STREET 1: 12A MONOR PARKWAY CITY: SALEM STATE: NH ZIP: 03079 10-Q 1 HADCO CORPORATION 1 SECURITIES AND EXCHANGE COMMISSION WASHINGTON, D.C. 20549 FORM 10-Q (Mark One) (X) QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the quarterly period ended APRIL 29, 2000 OR ( ) TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 (NO FEE REQUIRED) FOR THE TRANSITION PERIOD FROM _______ TO _______ COMMISSION FILE NUMBER 0-12102 HADCO CORPORATION (EXACT NAME OF REGISTRANT AS SPECIFIED IN ITS CHARTER) MASSACHUSETTS 04-2393279 - ------------- ---------- (State or other jurisdiction (I.R.S. Employer of incorporation or organization) Identification No.) 12A MANOR PARKWAY, SALEM, NEW HAMPSHIRE 03079 - --------------------------------------- ----- (Address of principal executive offices) (Zip Code) REGISTRANT'S TELEPHONE NUMBER, INCLUDING AREA CODE: (603) 898-8000 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 ___ Indicate the number of shares outstanding of each of the issuer's classes of common stock, as of the latest practicable date. Registrant has 13,836,718 shares of Common Stock, $0.05 Par Value, outstanding at May 19, 2000. 2 HADCO CORPORATION AND SUBSIDIARIES INDEX
PART I - FINANCIAL INFORMATION PAGE Item 1. Financial Statements Consolidated Condensed Balance Sheets as of April 29, 2000 (unaudited) and October 30, 1999....................................... 3 Consolidated Condensed Statements of Operations for the Three Months and Six Months ended April 29, 2000 and May 1, 1999 (unaudited)........................................................... 4 Consolidated Condensed Statements of Cash Flows for the Six Months ended April 29, 2000 and May 1, 1999 (unaudited).......................................................... 5 Notes to Consolidated Condensed Financial Statements............................................................................ 6 Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations................................................... 18 Item 3. Quantitative and Qualitative Disclosures about Market Risk............................ 22 PART II - OTHER INFORMATION Item 1. Legal Proceedings..................................................................... 23 Item 2. Changes in Securities................................................................. 23 Item 4. Submission of Matters to a Vote of Security Holders................................... 23 Item 6. Exhibits and Reports on Form 8-K...................................................... 24 SIGNATURE......................................................................................... 25
2 3 PART I - FINANCIAL INFORMATION ITEM 1. FINANCIAL STATEMENTS HADCO CORPORATION AND SUBSIDIARIES CONSOLIDATED CONDENSED BALANCE SHEETS (in thousands, except per share data)
April 29, October 30, 2000 1999 --------- ----------- (unaudited) ASSETS Current Assets: Cash and cash equivalents ........................................... $ 112 $ 9,078 Accounts receivable, net of allowance of $1,467 in 2000 and $1,478 in 1999 ............................................. 139,709 116,580 Inventories ......................................................... 65,823 63,926 Deferred tax asset .................................................. 17,469 11,480 Prepaid expenses and other current assets ........................... 7,734 7,688 --------- --------- Total current assets ........................................... 230,847 208,752 Property, Plant and Equipment, net ........................................ 318,144 328,181 Acquired Intangible Assets, net ........................................... 173,216 179,319 Other Assets .............................................................. 9,027 8,571 --------- --------- $ 731,234 $ 724,823 ========= ========= LIABILITIES AND STOCKHOLDERS' INVESTMENT Current Liabilities: Current portion of long-term debt ................................... $ 2,383 $ 2,515 Accounts payable .................................................... 94,306 100,100 Accrued payroll and other employee benefits ......................... 30,209 36,419 Other accrued expenses .............................................. 23,358 21,937 --------- --------- Total current liabilities ...................................... 150,256 160,971 --------- --------- Long-Term Debt, net of current portion .................................... 267,408 278,309 --------- --------- Deferred Tax Liability .................................................... 61,715 57,342 --------- --------- Other Long-Term Liabilities ............................................... 9,192 9,192 --------- --------- Commitments and Contingencies Stockholders' Investment: Common stock, $.05 par value; Authorized - 50,000 shares Issued and outstanding - 13,835 in 2000 and 13,631 in 1999...... 693 683 Paid-in capital ..................................................... 186,284 179,528 Deferred compensation ............................................... (930) (184) Retained earnings ................................................... 56,616 38,982 --------- --------- Total stockholders' investment ................................. 242,663 219,009 --------- --------- $ 731,234 $ 724,823 ========= =========
The accompanying notes are an integral part of these consolidated condensed financial statements. 3 4 HADCO CORPORATION AND SUBSIDIARIES CONSOLIDATED CONDENSED STATEMENTS OF OPERATIONS (in thousands, except per share data) (unaudited)
Three Months Ended Six Months Ended ----------------------------- ----------------------------- April 29, May 1, April 29, May 1, 2000 1999 2000 1999 --------- ------ --------- ------ Net Sales ............................................ $ 275,422 $ 255,586 $ 520,165 $ 491,565 Cost of Sales ........................................ 225,820 217,209 429,622 420,755 --------- --------- --------- --------- Gross Profit .................................... 49,602 38,377 90,543 70,810 Operating Expenses ................................... 23,280 20,060 44,006 37,978 Amortization of Goodwill and Acquired Intangible Assets ............................... 3,051 3,049 6,103 6,126 --------- --------- --------- --------- Income from Operations .......................... 23,271 15,268 40,434 26,706 Interest and Other Income, net ....................... 511 186 1,431 787 Interest Expense ..................................... (6,739) (7,783) (13,423) (16,479) --------- --------- --------- --------- Income Before Provision for Income Taxes......... 17,043 7,671 28,442 11,014 Provision for Income Taxes ........................... 6,476 3,049 10,808 4,378 --------- --------- --------- --------- Net Income ...................................... $ 10,567 $ 4,622 $ 17,634 $ 6,636 ========= ========= ========= ========= Net Income per Share: Basic ................................. $ 0.77 $ 0.34 $ 1.28 $ 0.49 ========= ========= ========= ========= Diluted ............................... $ 0.75 $ 0.34 $ 1.26 $ 0.49 ========= ========= ========= ========= Weighted Average Shares Outstanding: Basic ................................ 13,800 13,522 13,733 13,470 ========= ========= ========= ========= Diluted .............................. 14,129 13,713 14,038 13,678 ========= ========= ========= =========
The accompanying notes are an integral part of these consolidated condensed financial statements. 4 5 HADCO CORPORATION AND SUBSIDIARIES CONSOLIDATED CONDENSED STATEMENTS OF CASH FLOWS (in thousands) (unaudited)
Six Months Ended --------------------------- April 29, May 1, 2000 1999 --------- ------ Cash Flows from Operating Activities: Net income ................................................................ $ 17,634 $ 6,636 Adjustments to reconcile net income to net cash provided by operating activities - Depreciation and amortization ........................................ 41,573 38,678 Deferred compensation and deferred taxes ............................. (1,400) (322) Director and executive officer stock grants .......................... 60 551 Loss (Gain) on disposal of fixed assets .............................. (283) 29 Changes in assets and liabilities - Increase in accounts receivable ...................................... (23,129) (11,700) Increase in inventories .............................................. (1,897) (1,626) Decrease (Increase) in prepaid expenses and other current assets...... (46) 184 Decrease in refundable taxes ......................................... -- 12,717 Decrease (Increase) in other assets .................................. 736 (2,099) Increase (Decrease) in accounts payable and accrued expenses ......... (10,583) 4,206 -------- -------- Net Cash Provided by Operating Activities ........................ 22,665 47,254 -------- -------- Cash Flows from Investing Activities: Purchases of property, plant and equipment ................................ (26,862) (29,130) Proceeds from sale of property, plant and equipment ....................... 520 -- -------- -------- Net Cash Used in Investing Activities ............................ (26,342) (29,130) -------- -------- Cash Flows from Financing Activities: Principal payments of long-term debt ...................................... (36,033) (46,460) Net proceeds from issuance of long-term debt .............................. 25,000 20,000 Proceeds from exercise of stock options ................................... 2,110 531 Proceeds from employee stock purchase plan ................................ 1,843 1,574 Tax benefit from exercise of nonqualified stock options ................... 1,791 1,045 -------- -------- Net Cash Used in Financing Activities ............................ (5,289) (23,310) -------- -------- Net Decrease in Cash and Cash Equivalents ....................................... (8,966) (5,186) Cash and Cash Equivalents, Beginning of Period .................................. 9,078 7,169 -------- -------- Cash and Cash Equivalents, End of Period ........................................ $ 112 $ 1,983 ======== ======== Supplemental disclosure of cash flow information: Cash paid during the period for: Interest ............................................................. $ 1,698 $ 15,908 ======== ======== Income taxes (net of refunds) ........................................ $ 5,397 $ 421 ======== ========
The accompanying notes are an integral part of these consolidated condensed financial statements. 5 6 HADCO CORPORATION AND SUBSIDIARIES NOTES TO CONSOLIDATED CONDENSED FINANCIAL STATEMENTS (unaudited) 1. OPERATIONS AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES --------------------------------------------------------- Hadco Corporation (the "Company" or "Hadco") was incorporated in Massachusetts in 1966. Principal products and services of the Company include: PRINTED CIRCUITS: Printed circuits are the basic platform used to interconnect microprocessors, integrated circuits and other components essential to the functioning of electronic systems. The Company provides customers with printed circuit designs and fabricates the printed circuit for the customer. The design and fabricated printed circuits are sold either separately or as a complete package. The majority of printed circuits fabricated by the Company are based on designs provided by the customer. VALUE ADDED MANUFACTURING: Value Added Manufacturing (VAM) primarily consists of backplane and system assemblies. Backplane assemblies are generally larger and thicker printed circuits on which connectors are mounted to receive and interconnect printed circuits, integrated circuits and other electronic components. System assemblies include the backplane, power supply, fan card, cabling and system chassis. The consolidated condensed financial statements reflect the application of certain accounting policies as described in this note and elsewhere in the accompanying notes to the consolidated condensed financial statements, as well as the Company's Annual Report on Form 10-K for the fiscal year ended October 30, 1999. These financial statements should be read in conjunction with the financial statements and related disclosures included in the above-referenced SEC filings. INTERIM FINANCIAL STATEMENTS ---------------------------- The accompanying consolidated condensed balance sheet as of April 29, 2000, and the consolidated condensed statements of operations for the three months and six months ended April 29, 2000 and May 1, 1999 and the consolidated condensed statements of cash flows for the six month periods ended April 29, 2000 and May 1, 1999 are unaudited, but in the opinion of management, include all adjustments (consisting only of normal, recurring adjustments) necessary for a fair presentation of results for these interim periods. Results of operations for the interim periods are not necessarily indicative of results to be expected for the entire year or any future period. NET INCOME PER SHARE -------------------- A reconciliation of basic and diluted weighted average shares outstanding is as follows:
Three Months Ended Six Months Ended ----------------------- ----------------------- April 29, May 1, April 29, May 1, 2000 1999 2000 1999 --------- ------ --------- ------ (in thousands) Basic weighted average shares outstanding ........ 13,800 13,522 13,733 13,470 Weighted average common equivalent shares ........ 329 191 305 208 ------ ------ ------ ------ Diluted weighted average shares outstanding....... 14,129 13,713 14,038 13,678 ====== ====== ====== ======
6 7 HADCO CORPORATION AND SUBSIDIARIES NOTES TO CONSOLIDATED CONDENSED FINANCIAL STATEMENTS (unaudited) 1. NET INCOME PER SHARE (CONTINUED) -------------------- Diluted weighted average shares outstanding for the three month periods ended April 29, 2000 and May 1, 1999 do not include 445,460 and 1,088,855 common equivalent shares, respectively, as their effect would be anti-dilutive. Diluted weighted average shares outstanding for the six month periods ended April 29, 2000 and May 1, 1999 do not include 475,211 and 878,293 common equivalent shares, respectively, as their effect would be anti-dilutive. 2. PENDING ACQUISITION ------------------- On April 17, 2000, the Company entered into an Agreement and Plan of Merger (the "Agreement") by and among the Company, Sanmina Corporation ("Sanmina"), and SANM Acquisition Subsidiary, Inc., a wholly-owned subsidiary of Sanmina (the "Merger Sub"), providing for the merger of Merger Sub with and into the Company (the "Merger"), after which the separate corporate existence of Merger Sub shall cease and the Company shall continue as the surviving corporation and a wholly-owned subsidiary of Sanmina. In the Merger, all outstanding shares of Common Stock of the Company shall each be converted into the right to receive 1.40 shares of Common Stock of Sanmina (the "Sanmina Common Stock"). In addition, the Company has granted Sanmina an option to purchase 19.9% of the outstanding shares of the Company, which is exercisable only upon certain events. The consummation of the Merger is subject to various conditions precedent, including approval of the stockholders holding two-thirds of the outstanding Common Stock of the Company and various state and Federal regulatory agencies, as well as other customary conditions. Horace H. Irvine, II, the Company's Chairman of the Board of Directors and certain trusts for Mr. Irvine's benefit, collectively holders of approximately 5% of the outstanding Company Common Stock, and all the other Directors of the Company and certain officers of the Company, collectively holders of approximately 1% of the outstanding Company Common Stock, have agreed to vote in favor of the approval of the Merger and the Agreement. 3. INVENTORIES ----------- Inventories are stated at the lower of cost or market on a first-in, first-out (FIFO) basis, and consist of the following (in thousands):
April 29, October 30, 2000 1999 --------- ----------- Raw Materials .................. $27,445 $18,679 Work-in-process................. 38,378 45,247 ------- ------- $65,823 $63,926 ======= =======
7 8 HADCO CORPORATION AND SUBSIDIARIES NOTES TO CONSOLIDATED CONDENSED FINANCIAL STATEMENTS (unaudited) 4. LONG-TERM DEBT -------------- Long-term debt consists of the following (in thousands):
April 29, October 30, 2000 1999 --------- ----------- Variable rate mortgages ................................... $ 672 $ 640 Revolving credit facility ................................. 65,000 75,000 9 1/2% Senior Subordinated Notes due 2008 ................. 199,456 199,422 Obligations under capital leases with interest rates ranging from 7% to 7.75% ................................ 4,663 5,762 --------- --------- 269,791 280,824 Less - Current portion .................................... (2,383) (2,515) --------- --------- $ 267,408 $ 278,309 ========= =========
Based on the amount outstanding on the Company's credit facility as of April 29, 2000, the Company has approximately $133.75 million of borrowings available. 5. BUSINESS SEGMENTS AND GEOGRAPHIC AREAS -------------------------------------- During the fourth quarter of fiscal 1999, the Company adopted Statement of Financial Accounting Standards ("SFAS") No. 131, Disclosure about Segments of an Enterprise and Related Information. The Company's businesses are internally reported as two segments. These segments, which are based on differences in products, technologies, and services, are Printed Circuits and Value Added Manufacturing (VAM). Hadco evaluates performance of these segments based on profit or loss from operations, not including non-recurring charges. Transactions between segments are recorded at fair market value. Costs of centralized sales, marketing and administration are allocated to the segments receiving benefits of the centralized functions. Unallocated general corporate expenses include the elimination of inter-segment profits, the costs of executive management for the Company, plus the amortization of acquired intangibles and goodwill relating to acquisitions. Management does not represent that these segments, if operated separately, would report the operating income and other financial information shown. 8 9 HADCO CORPORATION AND SUBSIDIARIES NOTES TO CONSOLIDATED CONDENSED FINANCIAL STATEMENTS (unaudited) 5. BUSINESS SEGMENTS AND GEOGRAPHIC AREAS (CONTINUED) --------------------------------------------------
Three Months Ended Six Months Ended ---------------------------- ---------------------------- April 29, May 1, April 29, May 1, 2000 1999 2000 1999 --------- ------ --------- ------ Net Sales: Printed Circuits ................... $ 246,246 $ 217,706 $ 465,391 $ 414,077 VAM ................................ 40,825 47,787 73,748 93,079 Elimination ........................ (11,649) (9,907) (18,974) (15,591) --------- --------- --------- --------- $ 275,422 $ 255,586 $ 520,165 $ 491,565 ========= ========= ========= ========= Operating Income: Printed Circuits ................... $ 30,578 $ 21,573 $ 53,047 $ 34,437 VAM ................................ 122 1,927 168 3,236 Unallocated general corporate....... (7,429) (8,232) (12,781) (10,967) --------- --------- --------- --------- $ 23,271 $ 15,268 $ 40,434 $ 26,706 ========= ========= ========= ========= Depreciation and Amortization: Printed Circuits ................... $ 32,688 $ 15,073 $ 48,807 $ 30,035 VAM ................................ 1,784 799 2,664 1,590 Unallocated general corporate....... 7,101 3,400 10,591 7,053 --------- --------- --------- --------- $ 41,573 $ 19,272 $ 62,062 $ 38,678 ========= ========= ========= ========= Capital Expenditures: Printed Circuits ................... $ 13,877 $ 11,163 $ 21,075 $ 27,070 VAM ................................ 1,174 607 2,274 807 Unallocated general corporate....... 2,994 715 3,513 1,253 --------- --------- --------- --------- $ 18,045 $ 12,485 $ 26,862 $ 29,130 ========= ========= ========= =========
As of --------------------------- April 29, October 30, 2000 1999 --------- ----------- Identifiable Assets: Printed Circuits ....................... $465,419 $462,211 VAM .................................... 54,927 48,608 Unallocated general corporate........... 210,888 214,004 -------- -------- $731,234 $724,823 ======== ========
9 10 HADCO CORPORATION AND SUBSIDIARIES NOTES TO CONSOLIDATED CONDENSED FINANCIAL STATEMENTS (unaudited) 5. BUSINESS SEGMENTS AND GEOGRAPHIC AREAS (CONTINUED) -------------------------------------------------- The following is a reconciliation of segment operating income to consolidated income before provision for income taxes:
Three Months Ended Six Months Ended --------------------------- --------------------------- April 29, May 1, April 29, May 1, 2000 1999 2000 1999 --------- ------ --------- ------ Total operating income for reportable segments...... $ 23,271 $ 15,268 $ 40,434 $ 26,706 Unallocated amounts: Interest and other income, net ................ 511 186 1,431 787 Interest expense .............................. (6,739) (7,783) (13,423) (16,479) -------- -------- -------- -------- Income before provision for income taxes ........... $ 17,043 $ 7,671 $ 28,442 $ 11,014 ======== ======== ======== ========
The following summarizes financial information by geographic areas:
Three Months Ended Six Months Ended -------------------------- -------------------------- April 29, May 1, April 29, May 1, 2000 1999 2000 1999 --------- ------ --------- ------ Net Sales: United States.................... $203,726 $202,627 $376,768 $384,362 Canada .......................... 34,021 22,815 68,847 46,790 Europe .......................... 16,214 17,222 34,033 30,937 Asia ............................ 13,756 10,573 31,962 24,621 Other ........................... 7,705 2,349 8,555 4,855 -------- -------- -------- -------- $275,422 $255,586 $520,165 $491,565 ======== ======== ======== ========
As of ---------------------------- April 29, October 30, 2000 1999 --------- ----------- Long-lived assets: United States..................... $451,826 $466,434 Asia ............................. 48,373 49,420 Europe ........................... 188 217 -------- -------- $500,387 $516,071 ======== ========
10 11 HADCO CORPORATION AND SUBSIDIARIES NOTES TO CONSOLIDATED CONDENSED FINANCIAL STATEMENTS (unaudited) 6. SUPPLEMENTAL GUARANTOR CONSOLIDATING CONDENSED FINANCIAL STATEMENTS ------------------------------------------------------------------- Basis of presentation. The Company sold on May 18, 1998, $200 million aggregate principal amount of 9 1/2% Senior Subordinated Notes due in 2008 (the "Notes"). The Notes are fully and unconditionally guaranteed on a senior subordinated basis, jointly and severally, by certain of the Company's wholly owned domestic subsidiaries (the "Guarantors"). The Guarantors are Hadco Santa Clara, Inc., Hadco Phoenix, Inc., CCIR of Texas Corp., and CCIR of California Corp. The consolidating condensed financial statements of the Guarantors are presented below and should be read in connection with the Consolidated Condensed Financial Statements of the Company. Separate financial statements of the Guarantors are not presented because (i) the Guarantors are wholly-owned and have fully and unconditionally guaranteed the Notes on a joint and several basis and (ii) the Company's management has determined such separate financial statements are not material to investors and believes the consolidating condensed financial statements presented are more meaningful in understanding the financial position of the Guarantors. There are no significant restrictions on the ability of the Guarantors to make distributions to the Company. 11 12 HADCO CORPORATION AND SUBSIDIARIES NOTES TO CONSOLIDATED CONDENSED FINANCIAL STATEMENTS 6. SUPPLEMENTAL GUARANTOR CONSOLIDATING CONDENSED FINANCIAL STATEMENTS ------------------------------------------------------------------- (Continued) CONSOLIDATING CONDENSED BALANCE SHEET (unaudited)
As of April 29, 2000 ------------------------------------------------------------------------------------- Guarantor Non-Guarantor Parent Elimination Consolidated Subsidiaries Subsidiaries Corporation Entries Total ------------ ------------ ----------- ----------- ------------ (in thousands) ASSETS Current Assets: Cash and cash equivalents $ (2,291) $ 231 $ 2,172 $ -- $ 112 Accounts receivable, net 62,113 9,774 67,822 -- 139,709 Inventories 32,517 5,903 27,403 -- 65,823 Deferred tax asset -- -- 17,469 -- 17,469 Prepaid and other current assets 1,377 225 6,132 -- 7,734 --------- --------- --------- --------- --------- Total current assets 93,716 16,133 120,998 -- 230,847 Property, Plant and Equipment, net 136,598 48,562 132,984 -- 318,144 Intercompany Receivable 25,471 5,475 36,664 (67,610) -- Investments in Subsidiaries 11,105 -- 288,909 (300,014) -- Acquired Intangible Assets, net 173,216 -- -- -- 173,216 Other Assets 22 -- 9,005 -- 9,027 --------- --------- --------- --------- --------- $ 440,128 $ 70,170 $ 588,560 $(367,624) $ 731,234 ========= ========= ========= ========= ========= LIABILITIES AND STOCKHOLDERS' INVESTMENT Current Liabilities: Current portion of long-term debt $ 2,155 $ 73 $ 155 $ -- $ 2,383 Accounts payable 37,416 7,767 49,123 -- 94,306 Intercompany payable 23,316 44,294 -- (67,610) -- Accrued payroll and other employee benefits 1,820 362 28,027 -- 30,209 Other accrued expenses 45,939 94 (22,675) -- 23,358 --------- --------- --------- --------- --------- Total current liabilities 110,646 52,590 54,630 (67,610) 150,256 --------- --------- --------- --------- --------- Long-Term Debt, net of current portion 2,366 6 265,036 -- 267,408 --------- --------- --------- --------- --------- Deferred Tax Liability 44,676 -- 17,039 -- 61,715 --------- --------- --------- --------- --------- Other Long-Term Liabilities -- -- 9,192 -- 9,192 --------- --------- --------- --------- --------- Stockholders' Investment: Common stock, $0.05 par value; Authorized - 50,000 shares Issued and outstanding - 13,835 11 29,655 693 (29,666) 693 Paid-in capital 400,616 130 186,284 (400,746) 186,284 Deferred compensation -- -- (930) -- (930) Retained earnings (118,187) (12,211) 56,616 130,398 56,616 --------- --------- --------- --------- --------- Total stockholders' investment 282,440 17,574 242,663 (300,014) 242,663 --------- --------- --------- --------- --------- $ 440,128 $ 70,170 $ 588,560 $(367,624) $ 731,234 ========= ========= ========= ========= =========
12 13 HADCO CORPORATION AND SUBSIDIARIES NOTES TO CONSOLIDATED CONDENSED FINANCIAL STATEMENTS 6. SUPPLEMENTAL GUARANTOR CONSOLIDATING CONDENSED FINANCIAL STATEMENTS ------------------------------------------------------------------- (Continued) CONSOLIDATING CONDENSED BALANCE SHEET
As of October 30, 1999 ------------------------------------------------------------------------------------- Guarantor Non-Guarantor Parent Elimination Consolidated Subsidiaries Subsidiaries Corporation Entries Total ------------ ------------ ----------- ----------- ------------ (in thousands) ASSETS Current Assets: Cash and cash equivalents $ (2,679) $ 1,378 $ 10,379 $ -- $ 9,078 Accounts receivable, net 49,926 7,566 59,088 -- 116,580 Inventories 28,085 6,590 29,251 -- 63,926 Deferred tax asset -- -- 11,480 -- 11,480 Prepaid and other current assets 2,221 244 5,223 -- 7,688 --------- --------- --------- --------- --------- Total current assets 77,553 15,778 115,421 -- 208,752 Property, Plant and Equipment, net 141,510 49,638 137,033 -- 328,181 Intercompany Receivable 24,783 3,122 46,365 (74,270) -- Investments in Subsidiaries 12,162 -- 280,444 (292,606) -- Acquired Intangible Assets, net 179,319 -- -- -- 179,319 Other Assets 29 -- 8,542 -- 8,571 --------- --------- --------- --------- --------- $ 435,356 $ 68,538 $ 587,805 $(366,876) $ 724,823 ========= ========= ========= ========= ========= LIABILITIES AND STOCKHOLDERS' INVESTMENT Current Liabilities: Current portion of long-term debt $ 2,114 $ 73 $ 328 $ -- $ 2,515 Accounts payable 41,842 5,583 52,675 -- 100,100 Intercompany payable 28,089 46,181 -- (74,270) -- Accrued payroll and other employee benefits 1,628 300 34,491 -- 36,419 Other accrued expenses 37,355 97 (15,515) -- 21,937 --------- --------- --------- --------- --------- Total current liabilities 111,028 52,234 71,979 (74,270) 160,971 --------- --------- --------- --------- --------- Long-Term Debt, net of current portion 3,307 43 274,959 -- 278,309 --------- --------- --------- --------- --------- Deferred Tax Liability 44,676 -- 12,666 -- 57,342 --------- --------- --------- --------- --------- Other Long-Term Liabilities -- -- 9,192 -- 9,192 --------- --------- --------- --------- --------- Stockholders' Investment: Common stock, $0.05 par value; Authorized - 50,000 shares Issued and outstanding - 13,631 11 29,655 683 (29,666) 683 Paid-in capital 400,616 -- 179,528 (400,616) 179,528 Deferred compensation -- -- (184) -- (184) Retained earnings (124,282) (13,394) 38,982 137,676 38,982 --------- --------- --------- --------- --------- Total stockholders' investment 276,345 16,261 219,009 (292,606) 219,009 --------- --------- --------- --------- --------- $ 435,356 $ 68,538 $ 587,805 $(366,876) $ 724,823 ========= ========= ========= ========= =========
13 14 HADCO CORPORATION AND SUBSIDIARIES NOTES TO CONSOLIDATED CONDENSED FINANCIAL STATEMENTS 6. SUPPLEMENTAL GUARANTOR CONSOLIDATING CONDENSED FINANCIAL STATEMENTS ------------------------------------------------------------------- (Continued) CONSOLIDATING CONDENSED STATEMENT OF OPERATIONS (unaudited)
For the Three Months Ended April 29, 2000 ----------------------------------------------------------------------------------- Guarantor Non-Guarantor Parent Elimination Consolidated Subsidiaries Subsidiaries Corporation Entries Total ------------ ------------ ----------- ----------- ------------ (In Thousands) Net Sales $ 121,592 $ 16,511 $ 137,319 $ -- $ 275,422 Cost of Sales 106,444 14,768 104,608 -- 225,820 --------- --------- --------- --------- --------- Gross Profit 15,148 1,743 32,711 -- 49,602 Operating Expenses 2,447 934 19,899 -- 23,280 Amortization of Goodwill and Acquired Intangible Assets 3,051 -- -- -- 3,051 --------- --------- --------- --------- --------- Income (Loss) From Operations 9,650 809 12,812 -- 23,271 Interest and Other Income 386 165 (1,054) 1,014 511 Interest Expense (56) (5) (6,678) -- (6,739) --------- --------- --------- --------- --------- Income Before Provision for Income Taxes 9,980 969 5,080 1,014 17,043 Provision for Income Taxes 4,806 138 1,532 -- 6,476 Equity in Income (Loss) of Subsidiary (183) -- 6,005 (5,822) -- --------- --------- --------- --------- --------- Net Income $ 4,991 $ 831 $ 9,553 $ (4,808) $ 10,567 ========= ========= ========= ========= =========
For the Six Months Ended April 29, 2000 ----------------------------------------------------------------------------------- Guarantor Non-Guarantor Parent Elimination Consolidated Subsidiaries Subsidiaries Corporation Entries Total ------------ ------------ ----------- ----------- ------------ (in thousands) Net Sales $ 225,253 $ 31,571 $ 263,341 $ -- $ 520,165 Cost of Sales 199,916 28,829 200,877 -- 429,622 --------- --------- --------- --------- --------- Gross Profit 25,337 2,742 62,464 -- 90,543 Operating Expenses 4,719 1,842 37,445 -- 44,006 Amortization of Goodwill and Acquired Intangible Assets 6,103 -- -- -- 6,103 --------- --------- --------- --------- --------- Income From Operations 14,515 900 25,019 -- 40,434 Interest and Other Income, net 886 593 (2,288) 2,240 1,431 Interest Expense (124) (11) (13,288) -- (13,423) --------- --------- --------- --------- --------- Income Before Provision for Income Taxes 15,277 1,482 9,443 2,240 28,442 Provision for Income Taxes 8,125 299 2,384 -- 10,808 Equity in Income (Loss) of Subsidiary (1,057) -- 8,335 (7,278) -- --------- --------- --------- --------- --------- Net Income $ 6,095 $ 1,183 $ 15,394 $ (5,038) $ 17,634 ========= ========= ========= ========= =========
14 15 HADCO CORPORATION AND SUBSIDIARIES NOTES TO CONSOLIDATED CONDENSED FINANCIAL STATEMENTS 6. SUPPLEMENTAL GUARANTOR CONSOLIDATING CONDENSED FINANCIAL STATEMENTS ------------------------------------------------------------------- (Continued) CONSOLIDATING CONDENSED STATEMENT OF OPERATIONS (unaudited)
For the Three Months Ended May 1, 1999 ------------------------------------------------------------------------------------ Guarantor Non-Guarantor Parent Elimination Consolidated Subsidiaries Subsidiaries Corporation Entries Total ------------ ------------ ----------- ----------- ------------ (In Thousands) Net Sales $ 115,042 $ 11,716 $ 128,828 $ -- $ 255,586 Cost of Sales 101,206 11,557 104,446 -- 217,209 --------- --------- --------- --------- --------- Gross Profit 13,836 159 24,382 -- 38,377 Operating Expenses 2,256 884 16,920 -- 20,060 Amortization of Goodwill and Acquired Intangible Assets 3,049 -- -- -- 3,049 --------- --------- --------- --------- --------- Income (Loss) From Operations 8,531 (725) 7,462 -- 15,268 Interest and Other Income, net (480) 217 (368) 817 186 Interest Expense (17) 1 (7,767) -- (7,783) --------- --------- --------- --------- --------- Income (Loss) Before Provision for Income Taxes 8,034 (507) (673) 817 7,671 Provision for Income Taxes 4,406 112 (1,469) -- 3,049 Equity in Income (Loss) of Subsidiary (1,436) -- 3,009 (1,573) -- --------- --------- --------- --------- --------- Net Income (Loss) $ 2,192 $ (619) $ 3,805 $ (756) $ 4,622 ========= ========= ========= ========= =========
For the Six Months Ended May 1, 1999 ------------------------------------------------------------------------------------ Guarantor Non-Guarantor Parent Elimination Consolidated Subsidiaries Subsidiaries Corporation Entries Total ------------ ------------- ----------- ----------- ------------ (In Thousands) Net Sales $ 229,996 $ 22,224 $ 239,345 $ -- $ 491,565 Cost of Sales 206,415 22,417 191,923 -- 420,755 --------- --------- --------- --------- --------- Gross Profit 23,581 (193) 47,422 -- 70,810 Operating Expenses 4,426 1,563 31,989 -- 37,978 Amortization of Goodwill and Acquired Intangible Assets 6,126 -- -- -- 6,126 --------- --------- --------- --------- --------- Income (Loss) From Operations 13,029 (1,756) 15,433 -- 26,706 Interest and Other Income, net (630) (408) 1,002 823 787 Interest Expense (215) (5) (16,259) -- (16,479) --------- --------- --------- --------- --------- Income (Loss) Before Provision for Income Taxes 12,184 (2,169) 176 823 11,014 Provision for Income Taxes 7,279 112 (3,013) -- 4,378 Equity in Income (Loss) of Subsidiary (3,104) -- 2,624 480 -- --------- --------- --------- --------- --------- Net Income (Loss) $ 1,801 $ (2,281) $ 5,813 $ 1,303 $ 6,636 ========= ========= ========= ========= =========
15 16 HADCO CORPORATION AND SUBSIDIARIES NOTES TO CONSOLIDATED CONDENSED FINANCIAL STATEMENTS 6. SUPPLEMENTAL GUARANTOR CONSOLIDATING CONDENSED FINANCIAL STATEMENTS ------------------------------------------------------------------- (Continued) CONSOLIDATING CONDENSED STATEMENT OF CASH FLOWS (unaudited)
For the Six Months Ended April 29, 2000 --------------------------------------------------------------------------------- Guarantor Non-Guarantor Parent Elimination Consolidated Subsidiaries Subsidiaries Corporation Entries Total ------------ ------------- ----------- ----------- ------------ (in thousands) Net cash provided by (used in) operating activities $ 11,381 $ 1,382 $ 7,662 $ 2,240 $ 22,665 -------- -------- -------- -------- -------- Cash Flows from Investing Activities: Foreign Sales Corp. dividend -- (2,240) 2,240 -- -- Purchase of property, plant and equipment (10,604) (2,492) (13,766) -- (26,862) Proceeds from sale of property, plant and equipment 511 -- 9 -- 520 Investments in subsidiaries -- 2,240 -- (2,240) -- -------- -------- -------- -------- -------- Net cash used in investing activities (10,093) (2,492) (11,517) (2,240) (26,342) -------- -------- -------- -------- -------- Cash Flows from Financing Activities: Principal payments of long-term debt (900) (37) (35,096) -- (36,033) Proceeds from issuance of long-term debt -- -- 25,000 -- 25,000 Proceeds from exercise of stock options -- -- 2,110 -- 2,110 Proceeds from the employee stock purchase plan -- -- 1,843 -- 1,843 Tax benefit from exercise of stock options -- -- 1,791 -- 1,791 -------- -------- -------- -------- -------- Net cash used in financing activities (900) (37) (4,352) -- (5,289) -------- -------- -------- -------- -------- Net Increase (Decrease) in Cash and Cash Equivalents 388 (1,147) (8,207) -- (8,966) Cash and Cash Equivalents, Beginning of Period (2,679) 1,378 10,379 -- 9,078 -------- -------- -------- -------- -------- Cash and Cash Equivalents, End of Period $ (2,291) $ 231 $ 2,172 $ -- $ 112 ======== ======== ======== ======== ========
16 17 HADCO CORPORATION AND SUBSIDIARIES NOTES TO CONSOLIDATED CONDENSED FINANCIAL STATEMENTS 6. SUPPLEMENTAL GUARANTOR CONSOLIDATING CONDENSED FINANCIAL STATEMENTS ------------------------------------------------------------------- (Continued) CONSOLIDATING CONDENSED STATEMENT OF CASH FLOWS (unaudited)
For the Six Months Ended May 1, 1999 -------------------------------------------------------------------------------- Guarantor Non-Guarantor Parent Elimination Consolidated Subsidiaries Subsidiaries Corporation Entries Total ------------ ------------- ----------- ----------- ------------ (In Thousands) Net cash provided by operating activities $ 9,461 $ 5,752 $ 31,218 $ 823 $ 47,254 -------- -------- -------- -------- -------- Cash Flows from Investing Activities: Foreign Sales Corp. dividend -- (823) 823 -- -- Purchase of property, plant and equipment (9,308) (3,926) (15,896) -- (29,130) Investments in subsidiaries -- 823 -- (823) -- -------- -------- -------- -------- -------- Net cash used in investing activities (9,308) (3,926) (15,073) (823) (29,130) -------- -------- -------- -------- -------- Cash Flows from Financing Activities: Principal payments of long-term debt (932) (225) (45,303) -- (46,460) Proceeds from issuance of long-term debt -- -- 20,000 -- 20,000 Proceeds from exercise of stock options -- -- 531 -- 531 Proceeds from the employee stock purchase plan -- -- 1,574 -- 1,574 Tax benefit from exercise of stock options -- -- 1,045 -- 1,045 -------- -------- -------- -------- -------- Net cash used in financing activities (932) (225) (22,153) -- (23,310) -------- -------- -------- -------- -------- Net Increase (Decrease) in Cash and Cash Equivalents (779) 1,601 (6,008) -- (5,186) Cash and Cash Equivalents, Beginning of Period 836 2 6,331 -- 7,169 -------- -------- -------- -------- -------- Cash and Cash Equivalents, End of Period $ 57 $ 1,603 $ 323 $ -- $ 1,983 ======== ======== ======== ======== ========
17 18 ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS Except for the historical information contained in this Quarterly Report on Form 10-Q, the matters discussed below or elsewhere in this Quarterly Report on Form 10-Q are forward-looking statements that involve risks and uncertainties. Hadco Corporation makes such forward-looking statements under the provisions of the "Safe Harbor" section of the Private Securities Litigation Reform Act of 1995. Any forward-looking statements should be considered in light of the factors described below in this Item 2 and under "Year 2000 Readiness Disclosure Statement" and "Factors That May Affect Future Results" below. Actual results may vary materially from those projected, anticipated or indicated in any forward-looking statements. In this Quarterly Report on Form 10-Q, the words "anticipates," "believes," "expects," "intends," "future," "could," "may," and similar words or expressions (as well as other words or expressions referencing future events, conditions or circumstances) identify forward-looking statements. As used herein, the terms "Company" and "Hadco," unless otherwise indicated or the context otherwise requires, refer to Hadco Corporation and its subsidiaries. RESULTS OF OPERATIONS - SECOND QUARTER - -------------------------------------- Net sales for the second quarter of fiscal 2000 increased 7.8%, or $19.8 million, over net sales for the same period in fiscal 1999. Printed circuit net sales increased 12.9%, or $26.8 million, in the second quarter of fiscal 2000 from the comparable period in fiscal 1999 due to higher unit shipments and a shift in mix towards higher priced printed circuits with more layers and greater densities. This increase was partially offset by a 2.1 percentage point decline in average pricing for printed circuits. VAM net sales decreased 14.6%, or $7.0 million, in the second quarter of fiscal 2000 from $47.8 million in the comparable period in fiscal 1999. VAM net sales decreased due to reduced production of low margin assembly products. The gross profit margin increased to 18.0% of net sales for the quarter ended April 29, 2000 from 15.0% in the comparable quarter in fiscal 1999. Better capacity utilization of printed circuit operations caused gross margins to increase 4.7 percentage points. This increase in gross margin was offset by lower pricing on printed circuits, which decreased gross margins by 1.3 percentage points, and by lower capacity utilization of VAM operations, which caused gross margins to decrease by 0.4 percentage points. Operating expenses increased by $3.2 million for the second quarter of fiscal 2000 over the second quarter of fiscal 1999. Operating expenses as a percent of net sales increased to 8.5% in the second quarter of fiscal 2000 compared to 7.8% in the comparable period of fiscal 1999. The increase is due to an increase of $2.6 million in selling expenses from expanded sales coverage and commissions on higher sales, an increase of $0.6 million in general and administrative expenses and slightly higher research and development expenses. Amortization of intangible assets was consistent between years. The Company includes in operating expenses charges for actual expenditures and accruals, based on estimates, for environmental matters. To the extent and in amounts Hadco believes circumstances warrant, it will continue to accrue and charge to operating expenses cost estimates relating to known environmental matters. Interest and other income, net increased by $0.3 million for the quarter ended April 29, 2000 as compared to the comparable prior fiscal year period primarily due to higher gains on the disposal of fixed assets. Interest expense decreased by $1.0 million in the second quarter of fiscal 2000 as compared to the second quarter of fiscal 1999 due to lower average outstanding debt balances during the second quarter of fiscal 2000 as compared to the second quarter of fiscal 1999. 18 19 RESULTS OF OPERATIONS - YEAR TO DATE - ------------------------------------ Net sales for the six months ended April 29, 2000 increased 5.8%, or $28.6 million, over net sales for the same period in fiscal 1999. Printed circuit net sales increased 12.0%, or $47.9 million, in the first six months of fiscal 2000 from the comparable period in fiscal 1999 due to higher unit shipments and a shift in mix towards higher priced printed circuits with more layers and greater densities. This increase was partially offset by a 1.8 percentage point decline in average pricing for printed circuits. VAM net sales decreased 20.8%, or $19.3 million, in the first six months of fiscal 2000 from $93.1 million in the comparable period in fiscal 1999. VAM sales decreased due to reduced production of low margin assembly products. The gross profit margin increased to 17.4% of net sales for the six months ended April 29, 2000 from 14.4% in the comparable period in fiscal 1999. Better capacity utilization from printed circuit operations caused gross margins to increase by 5.1 percentage points. This increase in gross margin was offset by lower pricing on printed circuits, which decreased gross margins by 1.6 percentage points, and by lower capacity utilization of VAM operations, which caused gross margins to decrease by 0.5 percentage points. Operating expenses increased by $6.0 million, from 7.7% of net sales in the first half of fiscal 1999 to 8.5% of net sales in the same period in fiscal 2000. The increase was due to higher selling expenses related to increased bookings and expanded sales coverage, a slight increase in general and administrative expenses and slightly higher research and development expenses. Amortization of intangible assets was consistent between years. Interest and other income, net increased by $0.6 million for the six months ended April 29, 2000 as compared to the six months ended May 1, 1999 due to higher average invested cash balances and higher gains on the disposal of equipment. Interest expense decreased by $3.1 million in the six months ended April 29, 2000 as compared to the six months ended May 1, 1999 due to lower average outstanding debt balances during fiscal 2000. INCOME TAXES - ------------ The Company provides for income taxes on an interim basis using its anticipated effective annual income tax rate. The Company anticipates an effective annual income tax rate for fiscal 2000 of 38%, which is slightly less than the combined federal and state statutory rates. The anticipated effective rate was increased by amortization of goodwill (which is not tax deductible), offset by the benefit of the Company's foreign sales corporation, research and development tax credits and various state investment tax credits. The effective tax rate for fiscal 2000 is based on current tax laws. LIQUIDITY AND CAPITAL RESOURCES - ------------------------------- Net cash provided by operating activities for the first six months of fiscal 2000 was $22.7 million, a reduction of $24.6 million from the comparable prior year period. This reduction resulted primarily from an increase in accounts receivable of $23.1 million, and a reduction of $10.6 million in accounts payable and accrued expenses. The reduction in accounts payable and accrued expenses resulted from higher incentive compensation accrued in fiscal 1999 and paid during the first quarter of fiscal 2000. In addition, the Company incurred a significant amount of capital expenditures during the fourth quarter of fiscal 1999, which were paid during the first quarter of fiscal 2000. Net cash used in investing activities in the first half of fiscal 2000 was $26.3 million, a decrease of $2.8 million from the first half of fiscal 1999, due to lower capital expenditures. Net cash used in financing activities was $5.3 million in the first six months of fiscal 2000 compared to $23.3 million in the comparable prior year period. The Company repaid a net of $10.0 million of its credit facility in the first six months of fiscal 2000, compared to $25.0 million in the comparable prior year period. 19 20 LIQUIDITY AND CAPITAL RESOURCES (CONTINUED) - ------------------------------------------ At April 29, 2000, the Company had working capital of $80.6 million and a current ratio of 1.54, as compared to working capital of $47.8 million and a current ratio of 1.30 at October 30, 1999. The increase in working capital resulted primarily from an increase in accounts receivable, as customer order and shipment rates increased, combined with the reductions in accounts payable noted above. The Company believes its current borrowing capacity, coupled with the funds generated from the Company's operations will be sufficient to fund its anticipated working capital, capital expenditure and debt payment requirements through fiscal year 2000. Because the Company's capital requirements cannot be predicted with certainty, however, there is no assurance that the Company will not require additional financing during this period. There is no assurance that any additional financing will be available on terms satisfactory to the Company or not disadvantageous to the Company's security holders, including the holders of the Notes. The Company believes the ultimate disposition of known environmental matters will not have a material adverse effect upon the liquidity, capital resources, business or consolidated financial position of the Company. However, one or more of such environmental matters could have a significant negative impact on the Company's consolidated financial results for a particular reporting period. YEAR 2000 READINESS DISCLOSURE STATEMENT - ---------------------------------------- As part of the Year 2000 project, the Company completed an internal assessment of its operations to determine the extent to which the Company could be adversely affected by Year 2000 issues. This internal assessment included both Information Technology (IT) systems and non-IT systems. The Company also surveyed all of its active suppliers to determine their Year 2000 compliance status. In Fiscal 1999, the Company developed business continuity/contingency plans for all its facilities. These plans cover Year 2000 issues and potential disruptions. The Company has not to date encountered any date-related processing issues or any business interruption in connection with the Year 2000 roll-over to January 1, 2000. However, we could still experience unanticipated problems and costs caused by undetected errors or defects from the Year 2000 issue. A software or system Year 2000 compliance failure, with respect to the Company's internal systems, software and equipment or that of third party service providers, major customers or suppliers, could prevent the Company from fulfilling customer orders. Any such failure, if not quickly remedied, would have a material adverse effect on the Company's business, results of operations, and financial condition. The lost revenues that would result from the Company's inability to operate even one of its major volume manufacturing plants for any significant period of time would have a material adverse effect on the Company. The Company could face an even greater risk of significant damages if the Company were to be found responsible for the shutdown of one of its customers' facilities. This could occur if the Company was unable to supply parts integral to the end products manufactured by the Company's customers. In such circumstances, the legal liability of the Company could have a material adverse effect on the Company's business, results of operations, and financial condition. FACTORS THAT MAY AFFECT FUTURE RESULTS - -------------------------------------- This Quarterly Report on Form 10-Q contains various "forward-looking" statements within the meaning of the Securities Litigation Reform Act of 1995, including, but not limited to, those concerning gross and operating margins, Year 2000 readiness and compliance, the sufficiency of the Company's working capital, and environmental matters. In this Form 10-Q, the words "anticipates," "believes," "expects," "intends," "future," "could," "may," and similar words and expressions (as well as other words or expressions referencing future 20 21 FACTORS THAT MAY AFFECT FUTURE RESULTS (CONTINUED) - -------------------------------------------------- events, conditions or circumstances) identify forward-looking statements. Such forward-looking statements involve risks and uncertainties that could cause actual results to differ materially from those projected, anticipated or indicated in the forward-looking statements. Potential risks and uncertainties include, but are not limited to, such factors as: the Company's dependence on the electronics industry; fluctuations in quarterly operating results; the variability of customer orders; significant portions of released backlog may be subject to cancellation or postponement without penalty; the effect of unforeseen problems in the Company's computer systems and those of third parties with which the Company deals; the effect of acquisitions on the Company; the ability of the Company to compete successfully in the future; the rapid technological change and continuing process development that characterizes the Company's markets; manufacturing process disruptions; the operation of the Company's Malaysia facility; the Company's significant customer concentration; the Company's ability to obtain, integrate, manage and utilize manufacturing capacity; the Company's ability to manage its growth; environmental matters; the availability of raw materials, production services and components, and price fluctuations in such materials, services and components; the Company's dependence on key personnel; the Company's ability to protect its intellectual property; and certain anti-takeover provisions applicable to the Company. Further information on factors that could cause actual results to differ from those anticipated is detailed in various publicly available documents filed by the Company from time to time with the Securities and Exchange Commission. Such information includes, but is not limited to, those factors appearing under the caption "Factors That May Affect Future Results" and elsewhere in the Company's Annual Report on Form 10-K for the year ended October 30, 1999. Any forward-looking statement should be considered in light of these factors. NEW ACCOUNTING STANDARDS - ------------------------ In March 2000, the FASB issued FASB Interpretation No. 44, Accounting for Certain Transactions Involving Stock Compensation - An Interpretation of APB Opinion No. 25 ("Interpretation 44"). Interpretation 44 clarifies the application of APB No. 25 in certain situations, as defined. Interpretation 44 is effective July 1, 2000 but is retroactive for certain events that occurred after December 15, 1998. The Company does not expect that the adoption of Interpretation 44 will materially affect its consolidated results of operations. The Securities and Exchange Commission issued Staff Accounting Bulletin (SAB) No. 101, Revenue Recognition, in December 1999. The Company is required to adopt this new accounting guidance through a cumulative charge to operations, in accordance with Accounting Principles Board Opinion (APB) No. 20 Accounting Changes, no later than the second quarter of fiscal 2000. The Company believes that the adoption of the guidance in SAB No. 101 will not have a material impact on future operating results. 21 22 ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK DERIVATIVE FINANCIAL INSTRUMENTS, OTHER FINANCIAL INSTRUMENTS, AND DERIVATIVE COMMODITY INSTRUMENTS SFAS No. 107 requires disclosure about fair value of financial instruments. Financial instruments consist of cash equivalents, accounts receivable, accounts payable and long-term debt obligations. The fair value of these financial instruments approximates their carrying amount, except for the 9 1/2% Senior Subordinated Notes (the "Notes"), at April 29, 2000. The faIR market value of the Notes was $200 million with a carrying amount of $199.5 million at April 29, 2000. PRIMARY MARKET RISK EXPOSURES The Company's primary market risk exposures are in the areas of interest rate risk and foreign currency exchange rate risk. The Company incurs interest expense on loans made under the Company's credit facility at interest rates, which are fixed, for a maximum of six months. At April 29, 2000, the Company's outstanding borrowings under the credit facility were $65.0 million, which was borrowed under one Eurodollar loan which expires on May 26, 2000 and is at a rate of 6.75%. The Company has the option to fix the interest rates on the Eurodollar rate loan for periods of one, two, three or six months. The Eurodollar Rate is subject to market risks and will fluctuate. Substantially all of the Company's business outside the United States is conducted in U.S. dollar denominated transactions. The Company does operate a volume manufacturing facility in Malaysia. Some of the expenses of this facility are denominated in Malaysian ringgits. Expenses denominated in ringgits include local salaries and wages, utilities and some operating supplies. The Company also funds small sales offices in Ireland and Great Britain, where expenses are paid in British Pounds, Irish Punts and Eurodollars. However, the Company believes that these operating expenses will not have a material adverse effect on the Company's business, results of operations or financial condition. 22 23 PART II - OTHER INFORMATION ITEM 1. - LEGAL PROCEEDINGS In March 2000, the Court approved and entered the Consent Decree in the Auburn Road environmental litigation. Under the terms of the Consent Decree, the Company is a cash-out party and does not have responsibility for performance of ongoing remedial or monitoring work at the site. ITEM 2. - CHANGES IN SECURITIES Under the Company's Outside Directors' Compensation Plan of 2000 (the "Outside Directors' Plan"), non-employee directors of the Company receive payment of an annual fee in the form of restricted Common Stock of the Company. Non-employee directors may elect to defer receipt of any such payment. On March 3, 2000, the non-employee directors received an aggregate of 1,056 shares of Common Stock pursuant to the Outside Directors' Plan. Of such shares, receipt of 352 shares was deferred in accordance with the Outside Directors' Plan. The aggregate value of all such shares issued on March 3, 2000 to non-employee directors was $59,801 (based on a fair market value on that date of $56.63 per share). Each of the shares of Common Stock of the Company referenced above was issued by the Company in reliance on the exemption from registration provided by Section 4(2) of the Securities Act for an offering to a small number of knowledgeable investors. ITEM 4. - SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS (a) The annual meeting of stockholders of Hadco Corporation was held on March 2, 2000. (b) No information provided due to inapplicability of item. (c) A vote was proposed to (1) fix the number of directors at eight (8) and to elect a Board of Directors to serve for the ensuing year or until their respective successors are duly elected and qualified; (2) approve the Hadco Corporation Outside Directors' Compensation Plan of 2000; and (3) ratify the selection of Arthur Andersen LLP as auditors for the fiscal year ending October 28, 2000. The voting results are as follows:
Votes Votes Votes For Against Withheld --------- ------- --------- (1) Horace H. Irvine II 12,784,836 N/A 68,652 Andrew E. Lietz 12,784,836 N/A 68,652 Oliver O. Ward 12,784,836 N/A 68,652 John F. Smith 12,784,836 N/A 68,652 John E. Pomeroy 12,784,836 N/A 68,652 James C. Taylor 12,784,836 N/A 68,652 Mauro J. Walker 12,784,836 N/A 68,652 Gilbert M. Roddy, Jr. 12,784,836 N/A 68,652
23 24 ITEM 4. - SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS (CONTINUED)
Votes Votes Votes For Against Withheld --------- ------- --------- (2) Hadco Corporation Outside Directors' Compensation Plan of 2000 12,135,850 593,393 143,424 (3) Arthur Andersen, LLP Ratification 12,863,258 3,973 5,436
ITEM 6. - EXHIBITS AND REPORTS ON FORM 8-K (a) Exhibits 3.1 Amendment to Registrant's By-laws. 10.1 Second Amendment dated April, 2000 to Lease between Registrant and Manor Parkway LLC for 12B Manor Parkway, Salem, NH. *10.2 Amendment to Registrant's 1998 Stock Plan. *10.3 Amendment to Registrant's November 29, 1995 Stock Option Plan. *10.4 Amendment to Registrant's September 1990 Stock Option Plan. *10.5 Amendment to Registrant's 1991 Non-Employee Directors' Stock Option Plan. 27. Financial Data Schedule. * Indicates a management contract or any compensatory plan, contract or arrangement required to be filed as an exhibit pursuant to Item 6(a). (b) Reports on Form 8-K Current Report on Form 8-K filed May 16, 2000; Current Report on Form 8-K filed May 3, 2000; Current Report on Form 8-K filed April 18, 2000; Current Report on Form 8-K filed March 30, 2000; and Current Report on Form 8-K filed March 20, 2000. 24 25 SIGNATURE Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized. Hadco Corporation Date: May 22, 2000 By: /s/ F. Gordon Bitter ------------------------------- F. Gordon Bitter Senior Vice President and Chief Financial Officer (principal financial officer and principal accounting officer) 25 EX-3.1 2 AMENDMENT TO BY-LAWS OF HADCO CORPORATION 1 EXHIBIT 3.1 AMENDMENT TO BY-LAWS OF HADCO CORPORATION This Amendment (the "Amendment") to the By-Laws of Hadco Corporation (the "By-Laws") is effective as of April 17, 2000. The By-Laws shall be amended as follows: The following language shall be added as Paragraph 8 to Article VI thereof: 8. 1987 MASSACHUSETTS CONTROL SHARE ACQUISITION ACT. The 1987 Massachusetts Control Share Acquisition Act, Chapter 110D of the Massachusetts General Laws, as it may be amended from time to time, shall not apply to the Corporation. Except as specifically amended hereby, each of the provisions of the By-Laws are hereby ratified and confirmed and shall remain in full force and effect. EX-10.1 3 SECOND AMENDMENT TO LEASE 1 EXHIBIT 10.1 SECOND AMENDMENT TO LEASE THIS SECOND AMENDMENT TO LEASE (the "SECOND AMENDMENT") is made as of April 28, 2000 between MANOR PARKWAY LLC, a Minnesota limited liability company ("LANDLORD"), and HADCO CORPORATION, a Massachusetts corporation ("TENANT"). RECITALS: A. Tenant occupies certain premises in the building (the "BUILDING") located at 12B Manor Parkway, Salem, New Hampshire under that certain Lease dated November 1, 1995 (the "ORIGINAL LEASE") between Equity Property Associates I, a New Hampshire limited partnership ("PRIOR LANDLORD"), as landlord, and Tenant, as Tenant. The original Lease has been amended by that certain Amendment to Lease dated May 29, 1998 (the "FIRST AMENDMENT") between Prior Landlord and Tenant. The Original Lease, as amended by the First Amendment, is the "PRIOR LEASE". All capitalized terms not otherwise defined in this Second Amendment shall have the meanings specified in the Prior Lease. The Prior Lease, as amended by this Second Amendment, is the "LEASE". B. Landlord has purchased the Building and has succeeded to all right, title and interest of Prior Landlord, in, to and under the Prior Lease. C. The premises originally leased under the Original Lease consist of approximately 5,376 rentable square feet of space (the "ORIGINAL PREMISES") in the Building. The First Amendment added to the Original Premises an additional 1,081 square feet of space in the Building (the "FIRST EXPANSION PREMISES"). The Original Premises, together with the First Expansion Premises, are the "PRIOR PREMISES". D. Under the Original Lease, the initial Term (the "INITIAL TERM") was scheduled to expire on October 31, 2000. The First Amendment extended the expiration date of the Initial Term to May 31, 2003, and granted Tenant two options to renew the Term, (the "RENEWAL OPTIONS"). E. Landlord and Tenant have agreed, according to the terms of this Second Amendment, to: (i) add to the Prior Premises that certain additional space in the Building (the "SECOND EXPANSION PREMISES") which contains approximately 4,947 rentable square feet, and which is depicted on the EXHIBIT A attached to this Second Amendment; and (ii) renew the Term for the ten-year "First Renewal Term", as that term is defined below in Section 3 of this Second Amendment. NOW THEREFORE, the parties agree as follows: 1. INTERPRETATION. The Prior Lease, as amended by this Second Amendment, remains in full force and effect. In the event of a conflict between the terms of the Prior Lease and this Second Amendment, this Second Amendment shall control. 2 2. EXPANSION OF PREMISES. Effective May 1, 2000, the Second Expansion Premises shall become part of the premises leased under the Lease for the remainder of the Term, and each reference in the Lease to the "Premises" shall be a collective reference to the Original Premises, the First Expansion Premises, and the Second Expansion Premises. Tenant agrees that on and after May 1, 2000 the Premises shall be conclusively deemed, for all purposes related to the Lease, to contain 11,404 rentable square feet. Tenant acknowledges that, prior to the date of this Second Amendment, it has inspected the Second Expansion Premises and has accepted possession of the Second Expansion Premises in their "As-Is" condition without any objection or claim whatsoever relating to the condition of the Second Expansion Premises. Tenant's occupancy of the Second Expansion Premises prior to the date of this Second Amendment and through April 30, 2000 have been and shall continue to be subject to the terms of the Lease, with the same effect as if the Second Expansion Premises were part of the "Premises" throughout such period, except that Tenant shall not be obligated to pay Annual Fixed Rent or Operating Costs or Tax Expenses with respect to the Second Expansion Premises for the period prior to May 1, 2000. 3. RENEWAL OF TERM. The Prior Lease is hereby amended so that the Initial Term will expire on April 30, 2000, and the Term is hereby renewed for the period (the "FIRST RENEWAL TERM") from May 1, 2000 through April 30, 2010. The renewal of the Term for the First Renewal Term shall be deemed to be Tenant's exercise of both Renewal Options, and Tenant shall have no further right to renew or extend the Term beyond the First Renewal Term, whether under the Exhibit D to the First Amendment, or otherwise. 4. RENT. a. ANNUAL FIXED RENT. Each 12-month period during the Term commencing on May 1 shall be a "FIRST RENEWAL TERM LEASE YEAR". Effective on and after May 1, 2000, Tenant shall pay Annual Fixed Rent in accordance with the following schedule:
- ------------------------------------- ----------------------------------- ----------------------------------- FIRST RENEWAL TERM ANNUAL FIXED RENT MONTHLY INSTALLMENTS OF LEASE YEAR ANNUAL FIXED RENT ============================================================================================================= 1 $ 92,372.40 $7,697.70 - ------------------------------------- ----------------------------------- ----------------------------------- 2 $ 94,219.85 $7,851.65 - ------------------------------------- ----------------------------------- ----------------------------------- 3 $ 96,104.25 $8,008.69 - ------------------------------------- ----------------------------------- ----------------------------------- 4 $ 98,026.33 $8,168.86 - ------------------------------------- ----------------------------------- ----------------------------------- 5 $ 99,986.86 $8,332.24 - ------------------------------------- ----------------------------------- ----------------------------------- 6 $101,986.59 $8,498.88 - ------------------------------------- ----------------------------------- ----------------------------------- 7 $104,026.33 $8,668.86 - ------------------------------------- ----------------------------------- ----------------------------------- 8 $106,106.85 $8,842.24 - ------------------------------------- ----------------------------------- ----------------------------------- 9 $108,228.99 $9,019.08 - ------------------------------------- ----------------------------------- ----------------------------------- 10 $110,393.57 $9,199.46 - ------------------------------------- ----------------------------------- -----------------------------------
3 b. OPERATING COSTS AND TAX EXPENSES. Notwithstanding that, under the Prior Lease, Annual Fixed Rent included a specified "Included Operating Expense Share" and an "Included Tax Expense Share", Annual Fixed Rent on and after May 1, 2000 shall be entirely net of all Operating Expenses and Tax Expenses. Effective on and after May 1, 2000, Tenant shall pay to Landlord, together with each monthly installment of Annual Fixed Rent, one-twelfth of the full amount of Tenant's Share of Landlord's estimate of Operating Costs and Landlord's Tax Expenses for the current calendar year. Effective on and after may 1, 2000, Tenant's Share of Operating Expenses and Landlord's Tax Expenses shall be 38.01%. 5. ALLOWANCE FOR TENANT WORK. Prior to the date of this Second Amendment, Tenant has performed certain tenant improvement work (the "TENANT WORK") in the Second Expansion Premises. Landlord shall reimburse Tenant for all or some portion of the total cost to Tenant of all labor, materials, and services supplied in the construction or installment of the Tenant Work, together with all design costs and other fees and expenses properly allocable to the performance of the Tenant Work (Collectively, the "PROJECTS COSTS") through an allowance (the "ALLOWANCE") in an amount of up to $100,000.00. Provided that no default then exists with respect to Tenant's obligation to pay any rent and Tenant is then lawfully in occupancy of the Second Expansion Premises in the routine conduct of its business, Landlord shall pay to Tenant a sum in the amount of the lower of the $100,000.00 or the actual Project Costs within 10 business days after the last to occur of the following: (i) Landlord's building manager's receipt and approval of a statement from Tenant's architect or general contractor (the "SUBSTANTIAL COMPLETION CERTIFICATE") certifying that substantial completion of the Tenant Work has occurred; (ii) Tenant has delivered to Landlord a certificate of occupancy from TOWN OF SALEM for the Second Expansion Premises; (iii) Landlord has received full lien waivers for all of the Tenant Work; and (iv) Tenant has submitted to Landlord a written request for payment of the Allowance. Tenant shall be solely responsible for all Project Costs for the Second Expansion Premises in excess of the Allowance. Project Costs shall not include, and the Allowance shall not be payable with respect to, any overhead or other "internal" costs or expenses of Tenant, any costs or expenses which are not actually paid to third parties unaffiliated with Tenant, or any costs of purchasing, leasing, and/or installing any equipment or other personal property which will not become part of the Second Expansion Premises and the property of Landlord upon installation in the Second Expansion Premises. 4 THIS Second Amendment is executed as of the date recited above. MANOR PARKWAY LLC, a Minnesota limited liability company By: ERP Manor Parkway LLC, a Minnesota limited liability company, its Chief Manager By: /s/ Authorized Signatory -------------------------------------- Its: -------------------------------------- HADCO CORPORATION, a Massachusetts corporation By: /s/ Patricia Randall ------------------------------------------ Its: Vice President and General Counsel ------------------------------------------ EX-10.2 4 AMENDMENT TO HADCO CORP. 1998 STOCK PLAN 1 EXHIBIT 10.2 AMENDMENT TO HADCO CORPORATION 1998 STOCK PLAN This Amendment (the "Amendment") to the Hadco Corporation 1998 Stock Plan (the "Plan") is effective as of April 17, 2000. The Plan shall be amended as follows: Sections 12 (B) and (C) shall be deleted in their entirety and replaced with the following: B. CONSOLIDATIONS OR MERGERS. Upon any sale of all or substantially all of the assets of the Company, or upon any merger, consolidation or tender offer in respect of which the stockholders holding all of the Company's outstanding voting securities immediately prior to the consummation thereof, hold less than 50% of all of the Company's outstanding voting securities immediately after such consummation (each of the foregoing sale, merger, consolidation or tender offer hereinafter called an "Acquisition"), then: (i) the date upon which all then outstanding Stock Rights granted under this Plan become fully vested and exercisable shall be automatically accelerated to occur immediately prior to the consummation of such Acquisition and (ii) the date(s) upon which all then outstanding repurchase, forfeiture or other similar restrictions, if any, (but not any securities law restrictions which may apply to such stock or its disposition) on shares of stock subject to Stock Rights or grant pursuant to an Award shall lapse shall be automatically accelerated to occur immediately prior to the consummation of such Acquisition. Notwithstanding any language in any option or award agreement between the Company and a Participant, in no event shall any outstanding option be subject to forfeiture solely as a result of its non-exercise after the acceleration of vesting pursuant to clause (i) above and prior to the consummation of an Acquisition. C. RECAPITALIZATION OR REORGANIZATION. In the event of a recapitalization or reorganization of the Company pursuant to which securities of the Company or of another corporation are issued with respect to the outstanding shares of Common Stock, a Participant upon exercising a Stock Right shall be entitled to receive for the purchase price paid upon such exercise the securities as determined under the terms of the recapitalization or reorganization he or she would have then received if he or she had exercised such Stock Right prior to such recapitalization or reorganization. Except as specifically amended hereby, each of the terms and conditions of the Plan is hereby ratified and confirmed and shall remain in full force and effect. EX-10.3 5 AMENDMENT TO NON-QUALIFIED STOCK OPTION PLAN 1995 1 EXHIBIT 10.3 AMENDMENT TO HADCO CORPORATION NON-QUALIFIED STOCK OPTION PLAN OF 1995 This Amendment (the "Amendment") to the Hadco Corporation Non-Qualified Stock Option Plan of 1995 (the "Plan") is effective as of April 17, 2000. The Plan shall be amended as follows: Sections 11 (b) and (c) shall be deleted in their entirety and replaced with the following: (b) Upon any sale of all or substantially all of the assets of the Company, or upon any merger, consolidation or tender offer in respect of which the stockholders holding all of the Company's outstanding voting securities immediately prior to the consummation thereof, hold less than 50% of all of the Company's outstanding voting securities immediately after such consummation (each of the foregoing sale, merger, consolidation or tender offer hereinafter called an "Acquisition"), then the date upon which all then outstanding options granted under this Plan become fully vested and exercisable shall be automatically accelerated to occur immediately prior to the consummation of such Acquisition. Notwithstanding any language in any option agreement between the Company and an optionee, in no event shall any outstanding option be subject to forfeiture solely as a result of its non-exercise after the acceleration of vesting described above in this subsection and prior to the consummation of an Acquisition. (c) In the event of a recapitalization or reorganization of the Company pursuant to which securities of the Company or of another corporation are issued with respect to the outstanding shares of Common Stock, an optionee upon exercising an option shall be entitled to receive for the purchase price paid upon such exercise securities he or she would have received if he or she had exercised such option prior to such recapitalization or reorganization. Except as specifically amended hereby, each of the terms and conditions of the Plan is hereby ratified and confirmed and shall remain in full force and effect. EX-10.4 6 AMENDMENT TO NON-QUALIFIED STOCK OPTION PLAN 1990 1 EXHIBIT 10.4 AMENDMENT TO HADCO CORPORATION NON-QUALIFIED STOCK OPTION PLAN OF 1990 This Amendment (the "Amendment") to the Hadco Corporation Non-Qualified Stock Option Plan of 1990 (the "Plan") is effective as of April 17, 2000. The Plan shall be amended as follows: Section 11 (b) shall be deleted in its entirety and replaced with the following: (b) Upon any sale of all or substantially all of the assets of the Company, or upon any merger, consolidation or tender offer in respect of which the stockholders holding all of the Company's outstanding voting securities immediately prior to the consummation thereof, hold less than 50% of all of the Company's outstanding voting securities immediately after such consummation (each of the foregoing sale, merger, consolidation or tender offer hereinafter called an "Acquisition"), then the date upon which all then outstanding options granted under this Plan become fully vested and exercisable shall be automatically accelerated to occur immediately prior to the consummation of such Acquisition. Notwithstanding any language in any option agreement between the Company and an optionee, in no event shall any outstanding option be subject to forfeiture solely as a result of its non-exercise after the acceleration of vesting described above in this subsection and prior to the consummation of an Acquisition. Except as specifically amended hereby, each of the terms and conditions of the Plan is hereby ratified and confirmed and shall remain in full force and effect. EX-10.5 7 AMENDMENT TO NON-QUALIFIED STOCK OPTION PLAN 1991 1 EXHIBIT 10.5 AMENDMENT TO HADCO CORPORATION NON-EMPLOYEE DIRECTOR STOCK OPTION PLAN OF 1991 This Amendment (the "Amendment") to the Hadco Corporation Non-Employee Director Stock Option Plan of 1991 (the "Plan") is effective as of April 17, 2000. The Plan shall be amended as follows: Sections 11 (a) and (b) shall be deleted in their entirety and replaced with the following: (a) Vesting of Options Granted under Section 8(a) of Plan. Options granted under Section 8(a) of this Plan shall vest (i.e., become exercisable) in the Optionee and thus become exercisable in accordance with the following schedule: CUMULATIVE NUMBER OF SHARES FOR WHICH OPTION IS EXERCISABLE DATE OF VESTING 1/5 of total Option Shares At the date of approval of the Plan by the shareholders of the Company (all as described in Section 8). In the event such approval has been received by the date of the grant of the option then at said date of grant of option. 2/5 of total Option Shares 1 year anniversary of the date of the grant of option. 3/5 of total Option Shares 2 year anniversary of the date of the grant of option. 4/5 of total Option Shares 3 year anniversary of the date of the grant of option. 100% of total Option Shares 4 year anniversary of the date of the grant of option. Upon any sale of all or substantially all of the assets of the Company, or upon any merger, consolidation or tender offer in respect of which the stockholders holding all of the Company's outstanding voting securities immediately prior to the consummation thereof hold less than 50% of all of the Company's outstanding voting securities immediately after such consummation 2 (each of the foregoing sale, merger, consolidation or tender offer hereinafter called an "Acquisition"), then the date upon which all then outstanding options granted under this Plan become fully vested and exercisable shall be automatically accelerated to occur immediately prior to the consummation of such Acquisition. Notwithstanding any language in any option agreement between the Company and an Optionee, in no event shall any outstanding option granted under Section 8(a) of this Plan be subject to forfeiture solely as a result of its non-exercise after the acceleration of vesting described above in this subsection and prior to the consummation of an Acquisition. (b) Vesting of Options Granted under Section 8(b) of Plan. Options granted under Section 8(b) of this Plan shall vest (i.e. become exercisable) in the Optionee immediately upon grant. Notwithstanding any language in any option agreement between the Company and an Optionee, in no event shall any outstanding option granted under Section 8(b) of this Plan be subject to forfeiture solely as a result of its non-exercise prior to the consummation of an Acquisition. Except as specifically amended hereby, each of the terms and conditions of the Plan is hereby ratified and confirmed and shall remain in full force and effect. EX-27 8 FINANCIAL DATA SCHEDULE
5 1,000 USD 3-MOS OCT-28-2000 JAN-30-2000 APR-29-2000 1 112 0 141,176 1,467 65,823 230,847 723,902 405,758 731,234 150,256 267,408 0 0 693 241,970 731,234 275,422 275,933 225,820 252,151 0 0 6,739 17,043 6,476 10,567 0 0 0 10,567 0.77 0.75
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