-----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, UxVz7bKO0pvtD/Pq1RyIJP1Gb0zlAZtcu7+nFTpKLLYajMUaYN7GJfrJzG3OVDla jz5t5fzSpHtGDC39n4R7xw== 0000891020-97-000969.txt : 19970714 0000891020-97-000969.hdr.sgml : 19970714 ACCESSION NUMBER: 0000891020-97-000969 CONFORMED SUBMISSION TYPE: 10-Q PUBLIC DOCUMENT COUNT: 4 CONFORMED PERIOD OF REPORT: 19970531 FILED AS OF DATE: 19970711 SROS: NASD FILER: COMPANY DATA: COMPANY CONFORMED NAME: PENWEST LTD CENTRAL INDEX KEY: 0000739608 STANDARD INDUSTRIAL CLASSIFICATION: GRAIN MILL PRODUCTS [2040] IRS NUMBER: 911221360 STATE OF INCORPORATION: DE FISCAL YEAR END: 0831 FILING VALUES: FORM TYPE: 10-Q SEC ACT: 1934 Act SEC FILE NUMBER: 000-11488 FILM NUMBER: 97639567 BUSINESS ADDRESS: STREET 1: 777 108TH AVE NE STE 2390 CITY: BELLEVUE STATE: WA ZIP: 98004-5193 BUSINESS PHONE: 2064626000 MAIL ADDRESS: STREET 1: PO BOX 1688 CITY: BELLEVUE STATE: WA ZIP: 98009 10-Q 1 FORM 10-Q FOR THE PERIOD ENDED MAY 31, 1997 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 quarterly period ended May 31, 1997 OR [ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the transition period from ___________________ to ______________________ Commission File No. 0-11488 PENWEST, LTD. - ------------------------------------------------------------------------------- (Exact name of registrant as specified in its charter) Washington 91-1221360 - ------------------------------------------------------------------------------- (State of Incorporation) (I.R.S. Employer Identification No.) 777-108th Avenue N.E., Suite 2390, Bellevue, WA 98004-5193 - ------------------------------------------------------------------------------- (Address of principal executive offices) (Zip Code) (425) 462-6000 - ------------------------------------------------------------------------------- (Registrant's telephone number, including area code.) Indicate by a 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 July 3, 1997.
Class Outstanding ----- ----------- Common stock, par value $1.00 7,260,316
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PENWEST, LTD. AND SUBSIDIARIES INDEX ----- Page No. -------- PART I - FINANCIAL INFORMATION Item 1 - Financial Statements Condensed Consolidated Balance Sheets 3 May 31, 1997 and August 31, 1996 Condensed Consolidated Statements of Income 4 Three Months and Nine Months Ended May 31, 1997 and May 31, 1996 Condensed Consolidated Statements of Cash Flow 5 Nine Months Ended May 31, 1997 and May 31, 1996 Notes to Condensed Consolidated Financial Statements 6 Item 2 - Management's Discussion and Analysis of 7-8 Financial Condition and Results of Operations PART II - OTHER INFORMATION Item 6 - Exhibits and Reports on Form 8-K 9 SIGNATURES 10 INDEX TO EXHIBITS 11-12
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PART I - FINANCIAL INFORMATION Item 1 Financial Statements PENWEST, LTD. AND SUBSIDIARIES CONDENSED CONSOLIDATED BALANCE SHEETS (Dollars in Thousands) May 31, 1997 August 31, 1996 ------------ --------------- ASSETS Current assets: Cash and cash equivalents $ 182 Trade accounts receivable 27,134 $ 26,766 Inventories: Raw materials 6,463 6,170 Work in progress 905 685 Finished goods 14,124 13,676 --------- --------- 21,492 20,531 Prepaid expenses and other 5,965 5,354 --------- --------- Total current assets 54,773 52,651 Net property, plant and equipment 130,327 121,173 Deferred income taxes 10,999 9,940 Cash value of life insurance 12,497 11,432 Other assets 7,339 7,322 --------- --------- Total assets $ 215,935 $ 202,518 ========= ========= LIABILITIES AND SHAREHOLDERS' EQUITY Current liabilities: Bank overdraft, net $ 847 Accounts payable $ 12,966 10,344 Accrued liabilities 4,978 7,943 Current portion of long-term debt 6,062 4,127 --------- --------- Total current liabilities 24,006 23,261 Long-term debt 63,661 62,636 Other postretirement benefits 10,298 10,306 Other liabilities 8,383 7,197 Deferred income taxes 22,797 20,980 Shareholders' equity: Common stock 9,091 8,677 Additional paid-in capital 18,171 13,633 Retained earnings 92,066 88,640 Treasury stock (30,637) (30,637) Note receivable from PENWEST Savings and Stock Ownership Plan (986) (1,742) Cumulative translation adjustment (915) (433) --------- --------- Total shareholders' equity 86,790 78,138 --------- --------- Total liabilities and shareholders' equity $ 215,935 $ 202,518 ========= =========
See accompanying notes to condensed consolidated financial statements. 3 4
PENWEST, LTD. AND SUBSIDIARIES CONDENSED CONSOLIDATED STATEMENTS OF INCOME (Dollars in thousands except share and per share data) Three Months Ended May 31 Nine Months Ended May 31 ------------------------- ------------------------ 1997 1996 1997 1996 ---- ---- ---- ---- Sales $ 49,993 $ 49,106 $ 147,630 $ 141,042 Cost of sales 35,952 37,565 110,490 106,206 ----------- ----------- ----------- ----------- Gross margin 14,041 11,541 37,140 34,836 Operating expenses 9,865 8,793 27,671 25,918 ----------- ----------- ----------- ----------- Income from operations 4,176 2,748 9,469 8,918 Other income 1,200 Interest expense, net (1,431) (1,188) (4,008) (3,496) ----------- ----------- ----------- ----------- Income before income taxes 2,745 1,560 6,661 5,422 Income taxes 933 530 2,186 1,738 ----------- ----------- ----------- ----------- Net income $ 1,812 $ 1,030 $ 4,475 $ 3,684 =========== =========== =========== =========== Weighted average common shares and equivalents outstanding 7,033,535 6,985,805 7,021,230 7,065,365 Earnings per common share $ 0.26 $ 0.15 $ 0.64 $ 0.52 =========== =========== =========== =========== Dividends declared per common share $ 0.05 $ 0.05 $ 0.15 $ 0.15 =========== =========== =========== ===========
See accompanying notes to condensed consolidated financial statements. 4 5
PENWEST, LTD. AND SUBSIDIARIES CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOW (Dollars in Thousands) Nine Months Ended May 31 ------------------------ 1997 1996 ---- ---- Operating Activities: Net income $ 4,475 $ 3,684 Adjustments to reconcile net income to net cash from operating activities: Depreciation and amortization 9,043 8,684 Deferred income taxes 758 1,083 Change in operating assets and liabilities: Trade receivables (423) (2,785) Inventories (961) (3,272) Accounts payable and other 1,196 4,616 -------- -------- Net cash flow from operating activities 14,088 12,010 Investing Activities: Additions to property, plant and equipment (18,074) (14,616) Other 617 (13) -------- -------- Net cash used by investing activities (17,457) (14,629) Financing Activities: Proceeds from unsecured line of credit 68,555 36,627 Payments on unsecured line of credit (66,785) (33,792) Proceeds of long-term debt 5,000 15,250 Payments on long-term debt (3,810) (16,953) Exercise of stock options 3,624 842 Purchase of life insurance for officers' benefit plan (1,158) (2,501) Payment of dividends (1,028) (1,017) -------- -------- Net cash from (used by) financing activities 4,398 (1,544) -------- -------- Net increase (decrease) in cash and equivalents 1,029 (4,163) -------- -------- Cash and cash equivalents (bank overdraft) at beginning of period (847) 5,334 -------- -------- Cash and cash equivalents at end of period $ 182 $ 1,171 ======== ========
See accompanying notes to condensed consolidated financial statements. 5 6 PENWEST, LTD. AND SUBSIDIARIES NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Unaudited) 1. BASIS OF PRESENTATION The accompanying unaudited condensed consolidated financial statements have been prepared in accordance with generally accepted accounting principles for interim financial information and with the instructions to Form 10-Q and Rule 10-01 of Regulation S-X. Accordingly, they do not include all of the information and footnotes required by generally accepted accounting principles for complete financial statements. In the opinion of management, all adjustments (consisting of normal recurring accruals) considered necessary for a fair presentation of the interim periods presented have been included. Operating results for the three and nine month periods ended May 31, 1997 are not necessarily indicative of the results that may be expected for the year ending August 31, 1997. For further information, refer to the consolidated financial statements and footnotes thereto included in PENWEST's annual report on Form 10-K for the fiscal year ended August 31, 1996. Certain prior year amounts have been reclassified to conform with current year presentation. These reclassifications had no effect on previously reported results of operations. 2. OTHER INCOME During the first quarter of fiscal 1997, the Company sold its remaining Southern California air credits related to the operations of Great Western Malting Co., a division of the Company sold in 1989. The sale of the credits resulted in a pretax gain of $1.2 million, which is included in other income for the nine months ended May 31, 1997. 3. INCOME TAXES The effective tax rate for the quarter ended May 31, 1997 was 34%. The effective tax rate for the nine-month period ended May 31, 1997 was 33% compared to the statutory rate of 34%. The effective rate over nine months was lower than the statutory rate due to state tax refunds received by the Company during the second quarter of fiscal 1997. 4. EARNINGS PER SHARE In February 1997, the Financial Accounting Standards Board issued Statement No. 128, Earnings per Share, which is required to be adopted on February 28, 1998. At that time, the Company will be required to change the method currently used to compute earnings per share and to restate all prior periods. Under the new requirements for calculating primary earnings per share, the dilutive effect of stock options will be excluded. The impact is expected to result in no effect to primary earnings per share for the fiscal quarter ending May 31, 1997 and a $0.01 increase to primary earnings per share for the nine months ended May 31, 1997. The impact of Statement 128 on the calculation of fully diluted earnings per share is not expected to be material. 6 7 MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS Liquidity At May 31, 1997, PENWEST had working capital of $30.8 million, a $35.0 million unsecured credit agreement under which there was $20.3 million outstanding, and several uncommitted lines of credit aggregating $15.0 million with two banks that may be used for overnight borrowings under which there was $7.7 million outstanding. Cash flow from operations for the nine month period was $14.1 million compared to $12.0 million in the corresponding period a year ago. The Company used operating cash flow and debt to finance capital expenditures and operating activities during the nine months ended May 31, 1997. The Company paid quarterly dividends of $0.05 per share on December 6, 1996, March 7, 1997, and June 5, 1997. Capital Resources Third quarter and year-to-date additions to property, plant and equipment of $4.5 million and $18.1 million, respectively, were primarily for projects related to capacity expansion at Penwest Foods' facility in Richland, Washington and various ongoing improvements at Penford Products' facility in Cedar Rapids, Iowa. Results of Operations Net income was $1.8 million, or $0.26 per share, for the third quarter compared to net income of $1.0 million, or $0.15 per share, for the corresponding period a year ago. Net income for nine months of the fiscal year was $4.5 million, or $0.64 per share, compared with $3.7 million, or $0.52 per share, in the prior year period. The first quarter of fiscal year 1997 included other income of $1.2 million representing $800,000 after tax, or $0.11 per share, from the sale of Southern California air credits related to the operations of Great Western Malting Co., a division of the Company sold in 1989. Sales increased in the third quarter and the first nine months of fiscal year 1997 to $50.0 million and $147.6 million, respectively, representing increases of 1.8% and 4.7%, respectively, from the corresponding periods a year ago. The third quarter increase is primarily due to higher sales volumes of manufactured products at Penford Products and Penwest Foods. Penford Products, accounting for approximately 75% of all revenues, operated at near capacity levels. The volume increases reflected in total sales were partially offset by lower corn costs, a key component used in pricing the sales of Penford's paper chemical products. The gross margin for the three month period ended May 31, 1997 was 28.1% compared to 23.5% in the corresponding period a year ago and 25.2% and 24.7% for the nine months ended May 31, 1997 and 1996, respectively. The improvement in gross margin is due, in part, to a decline in corn prices compared to last year. The effect of more volume moving through the Penford and Penwest Foods manufacturing facilities and the increase in sales volume of Penford's starch copolymer products also positively affected the gross margin percentage. 7 8 Operating expenses in the third quarter rose $1.1 million, or 12.2%, compared to the same period in the previous year. For the fiscal year, operating expenses have increased $1.8 million, or 6.8%. These increases are primarily due to increased investment in research and development at Penwest Pharmaceuticals as well as higher selling and performance-based incentive expenses. Net interest expense for the third quarter of fiscal 1997 was $1.4 million compared to $1.9 million for the corresponding period a year ago. For the year, net interest expense was $4.0 million compared to $3.5 million a year ago mainly reflecting lower amounts of capitalized interest. Recent Development On June 11, 1997, Penwest Pharmaceuticals and its licensee, Mylan Laboratories Inc., announced that a Paragraph IV Abbreviated New Drug Application (ANDA) had been filed with the U.S. Food and Drug Administration (FDA) for controlled release nifedipine tablets incorporating Penwest Pharmaceuticals' patented TIMERx(R) controlled release delivery system. The filing was made by Mylan and represents the first generic alternative to Procardia XL, a calcium channel blocker for treating hypertension with a U.S. market of approximately $950 million in 1996. Forward-looking Statements The above discussion contains forward-looking statements. There are certain important factors that could cause results to differ materially from those anticipated by the statements made above. These factors include, but are not limited to, the market price of corn and corn by-products, the economic condition of the paper industry, competition, product development risks, patent and intellectual property matters (including the possibility of patent infringement litigation), dependence on collaborative partners, and regulatory and manufacturing issues (including the difficulty of predicting FDA approvals). Additional information on these and other factors which could affect the Company's financial results is included in the Company's 1996 Annual Report to Shareholders, its Form 10-K for the fiscal year ended August 31, 1996, and its Forms 10-Q for the fiscal quarters ended November 30, 1996 and February 28, 1997, on file with the Securities and Exchange Commission. 8 9 PART II - OTHER INFORMATION Item 6 Exhibits and Reports on Form 8-K. (a) Exhibits: 11 Statement re: Computation of Earnings Per Share 27 Financial Data Schedule (b) No reports on Form 8-K were filed during the quarter for which this report is filed. 9 10 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. PENWEST, LTD. ------------------------------------------- (Registrant) July 11, 1997 /s/ Tod R. Hamachek - ------------- ------------------------------------------- Date Tod R. Hamchek President and Chief Executive Officer (Principal Executive Officer) July 11, 1997 /s/ Jeffrey T. Cook - ------------- ------------------------------------------- Date Jeffrey T. Cook Vice President, Finance and Chief Financial Officer (Principal Financial Officer) 10 11 INDEX TO EXHIBITS Exhibits identified in parentheses below, on file with the Securities and Exchange Commission, are incorporated by reference.
Exhibit No. Item - ---------- ----- (3.1) Restated Articles of Incorporation of Registrant (filed as an Exhibit to Registrant's Form 10-K for fiscal year ended August 31, 1995) (3.2) Bylaws of Registrant as amended and restated as of June 27, 1995 (filed as an Exhibit to Registrant's Form 10-K for the fiscal year ended August 31, 1995) (4.1) Amended and Restated Rights Agreement dated as of April 30, 1997 (filed as an Exhibit to Registrant's Amendment to Registration Statement on Form 8-A/A dated May 5, 1997) (10.1) Senior Note Agreement among PENWEST, LTD. as Borrower and Mutual of Omaha and Affiliates as lenders, dated November 1, 1992 (filed as an Exhibit to Registrant's Form 10-Q for the quarter ended February 28, 1993) (10.2) Term Loan Agreement among Penford Products Co., and PENWEST, LTD. as Borrowers, and Wells Fargo Bank (formerly First Interstate Bank of Washington, N.A.) as Lender, dated September 27, 1990 (Registrant agrees to furnish a copy of this instrument to the Commission on request) (10.3) Loan Agreement among PENWEST, LTD. as Borrower and Seattle-First National Bank as Lender, dated December 1, 1989 (Registrant agrees to furnish a copy of this instrument to the Commission on request) (10.4) PENWEST, LTD. Supplemental Executive Retirement Plan, dated March 19, 1990 (filed as an Exhibit to Registrant's Form 10-K for the fiscal year ended August 31, 1991) (10.5) PENWEST, LTD. Supplemental Survivor Benefit Plan, dated January 15, 1991 (filed as an Exhibit to Registrant's Form 10-K for the fiscal year ended August 31, 1991) (10.6) PENWEST, LTD. Deferred Compensation Plan, dated January 15, 1991 (filed as an Exhibit to Registrant's Form 10-K for the fiscal year ended August 31, 1991) (10.7) Change of Control Agreements with Messrs. Hamachek, Reed, Cook, Widmaier, Talley, Horn, Rydzewski and Belsheim (a representative copy of these agreements is filed as an exhibit to Registrant's Form 10-K for the fiscal year ended August 31, 1995) 11
12 (10.8) PENWEST, LTD. 1993 Non-Employee Director Restricted Stock Plan (filed as an Exhibit to Registrant's Form 10-Q for the quarter ended November 30, 1993) (10.9) Note Agreement dated as of October 1, 1994 among PENWEST, LTD., Principal Mutual Life Insurance Company and TMG Life Insurance Company (filed as an Exhibit to Registrant's Form 10-Q for the quarter ended February 28, 1995) (10.10) PENWEST, LTD. 1994 Stock Option Plan as amended and restated as of January 21, 1997 (filed on Form S-8 dated March 17, 1997) (10.11) Credit Agreement dated as of December 22, 1995 among PENWEST, LTD., and its subsidiaries, Bank of America National Trust and Savings Association, ABN-AMRO Bank, N.V., The Bank of Nova Scotia, and Seattle-First National Bank (filed as an Exhibit to Registrant's Form 10-Q for the quarter ended February 29, 1996) 10.12 Amendment to Credit Agreement dated as of May 7, 1997 among PENWEST, LTD., and its subsidiaries, Bank of America National Trust and Savings Association, ABN-AMRO Bank, N.V., The Bank of Nova Scotia, and Seattle-First National Bank (10.13) PENWEST, LTD. Stock Option Plan for Non-Employee Directors (filed as an Exhibit to the Registrant's Form 10-Q for the quarter ended May 31, 1996) 11 Statement re: Computation of Earnings Per Share 27 Financial Data Schedule
12 EX-10.12 2 FIRST AMENDMENT TO CREDIT AGREEMENT 1 EXHIBIT 10.12 FIRST AMENDMENT TO CREDIT AGREEMENT THIS FIRST AMENDMENT TO CREDIT AGREEMENT (the "Amendment"), dated as of May 7, 1997, is entered into by and among PENWEST, LTD., a Washington corporation ("Penwest"), PENFORD PRODUCTS CO., a Delaware corporation, and EDWARD MENDELL CO., INC., Washington corporation (Penwest, Penford Products Co., and Edward Mendell Co., Inc. are collectively referred to in this Amendment as the "Companies"; and individually, a "Company"), the several financial institutions from time to time party to this Agreement (collectively, the "Banks"; individually, a "Bank"), and Bank of America National Trust and Savings Association, as agent for the Banks. RECITALS A. The Companies, Banks, and Agent are parties to a Credit Agreement dated as of December 22, 1995 (the "Credit Agreement") pursuant to which the Agent and the Banks have extended certain credit facilities to the Companies. B. The Companies have asked that the Banks agree to amendments to the Credit Agreement consisting of (1) an amendment to Section 7.13 and (2) an amendment extending the Termination Date of the Credit Agreement. C. The Banks are willing to amend the Credit Agreement as requested as set forth in, and subject to the terms and conditions of, this Amendment. NOW, THEREFORE, for valuable consideration, the receipt and adequacy of which are hereby acknowledged, the parties hereto hereby agree as follows: 1. Defined Terms. Unless otherwise defined herein, capitalized terms used herein shall have the meanings, if any, assigned to them in the Credit Agreement. 2. Amendment to Credit Agreement. (a) The definition of "Termination Date" in Section 1.01 of the Credit Agreement is hereby amended to provide as follows: "Termination Date" means the earlier to occur of: (a) December 30, 1999 (or the later date provided by an extension pursuant to Section 2.14); and (b) the date on which the Commitments terminate in accordance with the provisions of this Agreement. -1- 2 (b) Section 7.13 of the Credit Agreement is amended in its entirety to provide as follows: 7.13 MINIMUM FIXED CHARGE COVERAGE RATIO. PENWEST SHALL NOT PERMIT AT ANY TIME, ITS RATIO OF (i) THE SUM OF ITS EBITDA PLUS RENTAL EXPENSE TO (ii) THE SUM OF ITS INTEREST EXPENSE PLUS RENTAL EXPENSE, TO BE LESS THAN: (a) 2.50 TO 1.00 DURING THE PERIOD FROM THE DATE THE FIRST AMENDMENT TO THIS AGREEMENT TAKES EFFECT THROUGH PENWEST'S FISCAL QUARTER ENDING ON AUGUST 31, 1997; AND (b) 2.75 TO 1.00 THEREAFTER. ALL COMPUTATIONS UNDER THIS SECTION SHALL BE ON A CONSOLIDATED BASIS AND MEASURED ON A FOUR QUARTER TRAILING BASIS. RENTAL EXPENSE SHALL BE COMPUTED IN ACCORDANCE WITH GAAP AS SET FORTH IN SECTION 1.03. 3. Agreement of the Banks and the Companies. The Banks and the Companies agree that Penwest's previous action in excluding payments due under certain long term leases covering rail cars in computing compliance with Section 7.13 shall not be considered a Default or an Event of Default. 4. Representations and Warranties. Each of the Companies hereby represents and warrants to the Agent and the Banks as follows: (a) No Default or Event of Default has occurred and is continuing. (b) The execution, delivery and performance by the Companies of this Amendment have been duly authorized by all necessary corporate and other action and do not and will not require any registration with, consent or approval of, notice to or action by, any Person (including any Governmental Authority) in order to be effective and enforceable. The Credit Agreement as amended by this Amendment constitutes the legal, valid and binding obligations of the Companies, enforceable against it in accordance with its respective terms, except as enforceability may be limited by applicable bankruptcy, insolvency, or similar laws affecting the enforcement of creditors' rights generally or by equitable principles relating to enforceability. (c) All representations and warranties of the Companies contained in the Credit Agreement are true and correct. (d) Each of the Companies are entering into this Amendment on the basis of its own investigation and for its own reasons, without reliance upon the Agent and the Banks or any other Person. 5. Effective Date. This Amendment will become effective as of May 7, 1997 (the "Effective Date"), provided that each of the following conditions precedent is satisfied on or before such date: -2- 3 (a) The Agent has received from each of the Companies and the Majority Banks a duly executed original (or, if elected by the Agent, an executed facsimile copy) of this Amendment. (b) The Agent has received from each of the Companies a copy of a resolution passed by the board of directors of such corporation, certified by the Secretary or an Assistant Secretary of such corporation as being in full force and effect on the date hereof, authorizing the execution, delivery and performance of this Amendment. (c) All representations and warranties contained herein are true and correct as of the Effective Date. 6. Reservation of Rights. Each Company acknowledges and agrees that execution and delivery by the Agent and the Banks of this Amendment shall not be deemed to create a course of dealing or otherwise obligate the Agent or the Banks to enter into similar amendments under the same or similar circumstances in the future. 7. Miscellaneous. (a) Except as herein expressly amended, all terms, covenants and provisions of the Credit Agreement are and shall remain in full force and effect and all references therein to such Credit Agreement shall henceforth refer to the Credit Agreement as amended by this Amendment. This Amendment shall be deemed incorporated into, and a part of, the Credit Agreement. (b) This Amendment shall be binding upon and inure to the benefit of the parties hereto and thereto and their respective successors and assigns. No third party beneficiaries are intended in connection with this Amendment. (c) This Amendment shall be governed by and construed in accordance with the law of the State of California. (d) This Amendment may be executed in any number of counterparts, each of which shall be deemed an original, but all such counterparts together shall constitute but one and the same instrument. Each of the parties hereto understands and agrees that this document (and any other document required herein) may be delivered by any party thereto either in the form of an executed original or an executed original sent by facsimile transmission to be followed promptly by mailing of a hard copy original, and that receipt by the Agent of a facsimile transmitted document purportedly bearing the signature of a Bank or a Company shall bind such Bank or such Company, respectively, with the same force and effect as the delivery of a hard copy original. Any failure by the Agent to receive the hard copy executed original of such document shall not diminish the binding effect of receipt of the facsimile transmitted executed original of such document of the party whose hard copy page was not received by the Agent. -3- 4 (e) This Amendment supersedes all prior drafts and communications with respect thereto. This Amendment may not be amended except in accordance with the provisions of Section 10.01 of the Credit Agreement. (f) If any term or provision of this Amendment shall be deemed prohibited by or invalid under any applicable law, such provision shall be invalidated without affecting the remaining provisions of this Amendment or the Credit Agreement, respectively. IN WITNESS WHEREOF, the parties hereto have executed and delivered this Amendment as of the date first above written. PENWEST, LTD. By: ______________________________ Name: Title: By: ______________________________ Name: Title: PENFORD PRODUCTS CO. By: ______________________________ Name: Title: By: ______________________________ Name: Title: -4- 5 EDWARD MENDELL CO., INC. By: ______________________________ Name: Title: By: ______________________________ Name: Title: BANK OF AMERICA NATIONAL TRUST AND SAVINGS ASSOCIATION, as Agent and as a Bank By: ______________________________ Name: Title: ABN AMRO BANK N.V., Seattle Branch By: ______________________________ Name: Title: By: ______________________________ Name: Title: THE BANK OF NOVA SCOTIA By: ______________________________ Name: Title: -5- 6 BANK OF AMERICA NATIONAL TRUST AND SAVINGS ASSOCIATION doing business as SEAFIRST BANK By: ______________________________ Name: Title: -6- EX-11 3 COMPUTATION OF EARNINGS PER SHARE 1 Exhibit 11 PENWEST, LTD. AND SUBSIDIARIES COMPUTATION OF EARNINGS PER SHARE
Quarter Ended Nine Months Ended May 31 May 31 ------ ------ 1997 1996 1997 1996 ---------- ---------- ---------- ---------- PRIMARY: Net income $1,812,000 $1,030,000 $4,475,000 $3,684,000 ========== ========== ========== ========== Weighted average number of shares outstanding 7,008,432 6,844,413 6,914,396 6,856,945 Net effect of dilutive stock options 25,103 141,392 106,834 208,420 ---------- ---------- ---------- ---------- Adjusted shares outstanding 7,033,535 6,985,805 7,021,230 7,065,365 ========== ========== ========== ========== Earnings per share $ 0.26 $ 0.15 $ 0.64 $ 0.52 ========== ========== ========== ========== FULLY DILUTED: Net income $1,812,000 $1,030,000 $4,475,000 $3,684,000 ========== ========== ========== ========== Weighted average number of shares outstanding 7,008,432 6,844,413 6,914,396 6,856,945 Net effect of dilutive stock options 25,103 152,208 111,175 234,132 ---------- ---------- ---------- ---------- Adjusted shares outstanding 7,033,535 6,996,621 7,025,571 7,091,077 ========== ========== ========== ========== Earnings per share $ 0.26 $ 0.15 $ 0.64 $ 0.52 ========== ========== ========== ==========
EX-27 4 FINANCIAL DATA SCHEDULE
5 THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM THE CONSOLIDATED BALANCE SHEET AT MAY 31, 1997 (UNAUDITED), THE CONDENSED CONSOLIDATED STATEMENTS OF INCOME AT MAY 31, 1997 (UNAUDITED), AND THE CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOW AT MAY 31, 1997 (UNAUDITED), AND IS QUALIFIED IN ITS ENTIRETY BY REFERENCE TO SUCH FINANCIAL STATEMENTS. 3-MOS AUG-31-1997 MAR-01-1997 MAY-31-1997 0 182 27,134 0 21,492 54,773 130,327 0 215,935 24,006 0 0 0 9,091 77,699 215,935 49,993 49,993 35,952 35,952 9,865 0 1,431 2,745 933 1,812 0 0 0 1,812 0.26 0.26
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