-----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, Hb4GeMVCVrjB7FZioow3FfYwbfNvm3eAqOBxcB5D8y0reG3Lt0RLR0VECZrU2C7D bj3Q1tDjbF++kPerGiFTjw== /in/edgar/work/0000950168-00-002446/0000950168-00-002446.txt : 20001116 0000950168-00-002446.hdr.sgml : 20001116 ACCESSION NUMBER: 0000950168-00-002446 CONFORMED SUBMISSION TYPE: 10-Q PUBLIC DOCUMENT COUNT: 3 CONFORMED PERIOD OF REPORT: 20000930 FILED AS OF DATE: 20001114 FILER: COMPANY DATA: COMPANY CONFORMED NAME: ATHEY PRODUCTS CORP CENTRAL INDEX KEY: 0000008109 STANDARD INDUSTRIAL CLASSIFICATION: [3711 ] IRS NUMBER: 360753480 STATE OF INCORPORATION: DE FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 10-Q SEC ACT: SEC FILE NUMBER: 000-12649 FILM NUMBER: 768512 BUSINESS ADDRESS: STREET 1: RTE 1A NORTH STREET 2: P O BOX 669 CITY: RALEIGH STATE: NC ZIP: 27602 BUSINESS PHONE: 9195565171 MAIL ADDRESS: STREET 1: ROUTE 1A NORTH STREET 2: P O BOX 669 CITY: RALEIGH STATE: NC ZIP: 27602 10-Q 1 0001.txt FORM 10-Q UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM 10-Q (Mark One) [X] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15 (d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the Quarterly Period Ended September 30, 2000 OR [ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15 (d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the transition period from _________ to ___________ Commission File Number 1-2723 ATHEY PRODUCTS CORPORATION - -------------------------------------------------------------------------------- (Exact name of registrant as specified in charter) Delaware 36-0753480 --------------------------------- ------------------------------ (State or other jurisdiction of (I.R.S. Employer incorporation or organization) Identification No.) 1839 South Main Street, Wake Forest, North Carolina 27587-9289 - -------------------------------------------------------------------------------- (Address of Principal Executive Offices) (Zip Code) Registrant's Telephone Number, Including Area Code: 919-556-5171 ------------ Not Applicable - ------------------------------------------------------------------------------- Former name, former address and former fiscal year, if changed since last report. Indicate by check mark whether the registrant: (1) has filed all reports required to be filed by Section 13 or 15 (d) of the Securities and Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes X . No ___. ---- Number of Common Shares Outstanding as of September 30, 2000: 3,805,608 ------------------ --------- ATHEY PRODUCTS CORPORATION I N D E X Page Number PART I. FINANCIAL INFORMATION Item 1. Financial Statements Balance Sheets as of September 30, 2000 3 - 4 (unaudited) and December 31, 1999. Statements of Operations for the nine months ended September 30, 2000 (unaudited) 5 and September 30, 1999 (unaudited). Statements of Operations for the three months ended September 30, 2000 (unaudited) 6 and September 30, 1999 (unaudited). Statements of Cash Flows for the nine months ended September 30, 2000 (unaudited) 7 and September 30, 1999 (unaudited). Notes to Financial Statements 8 Item 2. Management's Discussion and Analysis of Financial 9 - 13 Condition and Results of Operations Item 3. Quantitative and Qualitative Disclosures About 13 Market Risk PART II. OTHER INFORMATION Item 1. Legal Proceedings 13 Item 2. Changes in Securities 13 Item 3. Defaults upon Senior Securities 13 Item 4. Submission of Matters to a Vote of Security Holders 13 Item 5. Other Information 13 Item 6. Exhibits and Reports on Form 8-K 13 2 PART I. FINANCIAL INFORMATION Item 1. Financial Statements
ATHEY PRODUCTS CORPORATION BALANCE SHEETS - ------------------------------------------------------------------------------------------------------------------------------- September 30, 2000 December 31, 1999 ------------------- -------------------- (Unaudited) (Audited) ASSETS - ------ CURRENT ASSETS: Cash and cash equivalents $ 587,730 $ 33,211 Certificate of deposit, restricted - 190,408 Accounts receivable (less allowances for doubtful accounts of $168,980 and $157,031 for 2000 and 1999, respectively) 1,954,387 3,376,826 Inventories 16,984,008 17,458,679 Prepaid expenses 182,200 202,506 Deferred income taxes 373,133 373,133 ----------------- -------------------- Total current assets 20,081,458 21,634,763 ----------------- -------------------- OTHER ASSETS: Other 64,000 98,230 ----------------- -------------------- Total other assets 64,000 98,230 ----------------- -------------------- PROPERTY, PLANT AND EQUIPMENT: Land and land improvements 47,785 47,785 Buildings and building improvements 4,081,658 4,081,658 Machinery and equipment 5,112,499 5,121,620 ----------------- -------------------- 9,241,942 9,251,063 Less accumulated depreciation (5,943,894) (5,691,232) ----------------- -------------------- Total property, plant and equipment, net 3,298,048 3,559,831 ----------------- -------------------- $ 23,443,506 $ 25,292,824 ================= ====================
See notes to financial statements. 3
ATHEY PRODUCTS CORPORATION BALANCE SHEETS - ------------------------------------------------------------------------------------------------------------------------------- September 30, 2000 December 31, 1999 --------------------- --------------------- (Unaudited) (Audited) LIABILITIES AND SHAREHOLDERS' EQUITY - ------------------------------------ CURRENT LIABILITIES: Short-term borrowings 4,815,057 $ 3,938,679 Current portion of obligations under financing agreements 4,130 17,732 Accounts payable 5,780,846 4,231,834 Accrued salaries, wages, and payroll withheld 487,978 398,618 Other accrued expenses 247,781 244,157 Warranty reserve 1,063,385 1,100,000 --------------------- --------------------- Total current liabilities 12,399,177 9,931,020 --------------------- --------------------- NONCURRENT LIABILITIES: Obligations under financing agreements 59,260 59,633 Long-term borrowings - 1,749,383 Deferred income taxes 373,133 373,133 --------------------- --------------------- Total noncurrent liabilities 432,393 2,182,149 --------------------- --------------------- SHAREHOLDERS' EQUITY: Common stock, par value $2 per share: Authorized 10,000,000 shares; Issued 4,020,459 shares 8,040,918 8,040,918 Additional paid-in capital 16,218,394 16,218,394 Accumulated deficit (12,718,818) (10,151,099) Less cost of 214,851 common shares in treasury (928,558) (928,558) --------------------- --------------------- Total shareholders' equity 10,611,936 13,179,655 --------------------- --------------------- $ 23,443,506 $ 25,292,824 ===================== =====================
See notes to financial statements. 4
ATHEY PRODUCTS CORPORATION STATEMENTS OF OPERATIONS - ----------------------------------------------------------------------------------------------------------------------------- Nine Months Ended Nine Months Ended September 30, 2000 September 30, 1999 --------------------- ---------------------- (Unaudited) (Unaudited) NET SALES $ 23,771,215 $ 30,123,280 Cost of goods sold 21,355,210 24,954,185 ------------------ ---------------------- Gross profit 2,416,005 5,169,095 Selling, administrative and engineering expenses 4,195,824 4,816,792 ------------------ ---------------------- Income (loss) from operations (1,779,819) 352,303 Other income 29,785 37,531 Other expenses 817,685 362,655 ------------------ ---------------------- Income (loss) before income taxes (2,567,719) 27,179 Income taxes - ------------------ ---------------------- NET INCOME (LOSS) $ (2,567,719) $ 27,179 ================== ====================== NET INCOME (LOSS) PER SHARE $ (0.67) $ 0.01 ================== ====================== WEIGHTED AVERAGE SHARES OUTSTANDING 3,805,608 3,805,608 ================== ======================
See notes to financial statements 5
ATHEY PRODUCTS CORPORATION STATEMENTS OF OPERATIONS - ------------------------------------------------------------------------------------------------------------------------------ Three Months Ended Three Months Ended September 30, 2000 September 30, 1999 ---------------------- ---------------------- (Unaudited) (Unaudited) NET SALES $ 6,329,434 $ 9,629,306 Cost of goods sold 6,047,376 8,036,283 ---------------------- ---------------------- Gross profit 282,058 1,593,023 Selling, administrative and engineering expenses 1,406,145 1,434,568 ---------------------- ---------------------- Income (loss) from operations (1,124,087) 158,455 Other income 22,455 (1,224) Other expenses 461,885 140,847 ---------------------- ---------------------- Income (loss) before income tax expense (1,563,517) 16,384 Income taxes - - ---------------------- ---------------------- NET INCOME (LOSS) $ (1,563,517) $ 16,384 ====================== ====================== NET INCOME (LOSS) PER SHARE $ (0.41) $ 0.00 ====================== ====================== WEIGHTED AVERAGE SHARES OUTSTANDING 3,805,608 3,805,608 ====================== ======================
See notes to financial statements 6
ATHEY PRODUCTS CORPORATION STATEMENTS OF CASH FLOWS - ----------------------------------------------------------------------------------------------------------------------------------- Nine Months Ended Nine Months Ended September 30, 2000 September 30,1999 -------------------- -------------------- (Unaudited) (Unaudited) OPERATING ACTIVITIES: Net Income (loss) $ (2,567,719) $ 27,179 Adjustments to reconcile net earnings to net cash provided by (used in) operating activities: Depreciation and amortization 252,662 266,562 Provision for doubtful accounts 11,949 320 Changes in operating assets and liabilities: Accounts receivable 1,410,490 (979,932) Inventories 474,671 (324,302) Prepaid expenses 20,306 (327,631) Accounts payable 1,549,012 (751,362) Accrued salaries, wages, and payroll withheld 89,360 (13,881) Other accrued expenses 3,624 (129,661) Warranty reserve (36,615) (87,596) -------------------- -------------------- Net cash provided by (used in) operating activities 1,207,740 (2,320,304) -------------------- -------------------- INVESTING ACTIVITIES: Purchase of plant equipment - (37,354) Certificate of deposit released from restriction 190,408 - Other 43,351 - -------------------- -------------------- Net cash provided by (used in) investing activities 233,759 (37,354) -------------------- -------------------- FINANCING ACTIVITIES: Net proceeds from (payments on) credit facility (873,005) 2,394,323 Principal paid on obligations under financing agreements (13,975) - -------------------- -------------------- Net cash provided by (used in) financing activities (886,980) 2,394,323 -------------------- -------------------- NET INCREASE IN CASH AND CASH EQUIVALENTS 554,519 36,665 CASH AND CASH EQUIVALENTS, BEGINNING OF PERIOD 33,211 143,391 -------------------- -------------------- CASH AND CASH EQUIVALENTS END OF PERIOD $ 587,730 $ 180,056 ==================== ==================== SUPPLEMENTAL CASH FLOW DISCLOSURES: Interest paid $ 503,621 $ 356,485 ==================== ====================
See notes to financial statements 7 ATHEY PRODUCTS CORPORATION NOTES TO FINANCIAL STATEMENTS I. The condensed financial statements included herein have been prepared by Athey Products Corporation (the "Company"), without audit, pursuant to the rules and regulations of the Securities and Exchange Commission. Certain information and footnote disclosures normally included in financial statements prepared in accordance with generally accepted accounting principles have been condensed or omitted pursuant to such rules and regulations; however, the Company believes that the disclosures are adequate to make the information presented not misleading. It is suggested that these financial statements be read in conjunction with the financial statements and the notes thereto included in the Company's latest annual report on Form 10-K for the year ended December 31, 1999. The Company follows an interim closing procedure which utilizes a 13-week quarter rather than a calendar quarter. The end-year closing is not affected by this procedure. II. The accompanying financial information reflects all adjustments, consisting only of normal adjustments, necessary to present fairly the financial position, results of operations, and cash flows for the interim period. The results of operations for the three and nine month periods ended September 30, 2000 should not necessarily be taken as indicative of the results that might be expected for the entire year 2000. III. Income (loss) per share amounts are computed on the basis of the weighted average number of shares outstanding during the period, which were 3,805,608 in 2000 and 1999. Basic and diluted income (loss) per share are the same for both 2000 and 1999. 8 ATHEY PRODUCTS CORPORATION Item 2. Management's Discussion and Analysis of Financial Condition and ----------------------------------------------------------------- Results of Operations. ---------------------- The forward-looking statements included in the "Management's Discussion and Analysis of Financial Condition and Results of Operations" section, which reflect management's best judgement based on factors currently known, involve risks and uncertainties. Words such as "expect", "anticipates", "believes", "intends", and "hopes", variations of such words and similar expressions are intended to identify such forward-looking statements. Actual results could differ materially from those anticipated in these forward-looking statements as a result of a number of factors, including but not limited to, the factors discussed in such section. Forward-looking information provided by the Company in such section pursuant to the safe harbor established under the Private Securities Litigation Reform Act of 1995 should be evaluated in the context of these factors. 9 RESULTS OF OPERATIONS Nine Months Ended September 30, 2000 as compared to Nine Months Ended September 30, 1999 The Company's net sales for the nine months ended September 30, 2000 were $23,771,215, a 21.1% or $6,352,065 decrease from the $30,123,280 recorded for the same period in 1999. The sales decrease reflects a 27.3% decrease in the number of sweepers shipped during the period as compared to the same period of 1999. Unseasonably bad weather early in the first quarter of 2000 and delays in receiving key parts coupled with inconsistency in orders in the second and third quarters resulted in production delays and the reduction in the number of sweeper units shipped. This volume decrease was partially offset by a 5.0% increase in average realized prices. Replacement parts sales decreased 6.5% from the nine-month period in 1999. In addition, the softening in sales orders, which started in the third quarter of 1999 ("Third Quarter 1999"), continued during the first nine months of 2000. At September 30, 2000, the Company had a backlog of orders it believed to be firm of approximately $6,022,000, as compared with a backlog of $11,572,000 at September 30, 1999. Management expects that the general market softness will continue through the fourth quarter of 2000 and that order input will continue at levels consistent with the past twelve months. Management believes that its markets have been negatively impacted by customer budget constraints relating to interest rate and fuel cost increases. Additionally, environmental regulations have delayed the release of bid documents from customers in certain markets. Cost of goods sold as a percentage of net sales was 89.8% for the nine months ended September 30, 2000 as compared to 82.8% during the same period for 1999. Unabsorbed labor and burden variances, principally resulting from the volume decreases discussed above adversely, impacted cost of goods sold in 2000. The Company's selling, administrative and engineering expenses decreased $620,968 from $4,816,792, or 16% of net sales in 1999, to $4,195,824, or 17.7% of net sales in 2000. Selling, administrative and engineering expenses in 2000 were favorably impacted by cost reduction programs and lower warranty expenses. These expenses increased as a percentage of sales, however , due to the sales decreases noted above. Other expenses for 2000 were $817,685 as compared to $362,655 recorded in 1999. This increase is related principally to $148,000 in increased interest expense associated with higher rates and borrowings on the Company's line of credit , to $314,000 in refinancing and other consultant and professional fees in the third quarter of 2000 ( "Third Quarter 2000"). The net loss after tax for the nine months ended September 30, 2000 was $2,567,719, or $0.67 per share, as compared to a net income of $27,179, or $0.01 per share recorded for the same period in 1999 for the reasons discussed above. 10 Three Months Ended September 30, 2000 as compared to Three Months Ended September 30, 1999 The Company's net sales for the Third Quarter 2000 were $6,329,434 representing a 34.3%, or $3,299,872 decrease from net sales of $9,629,306 recorded in the Third Quarter 1999. This sales decrease is attributable to a 43.5% decrease in number of units shipped, and a 6.4% decline in replacement parts sales. Delays in receiving key parts and inconsistency in orders during the quarter resulted in production delays and the reduction in the number of sweeper units shipped in the Third Quarter 2000. This volume decrease was partially offset by a 8.7% increase in average realized prices. The cost of goods sold, as a percentage of net sales, was 95.5% in the Third Quarter 2000 compared with 83.5% in the Third Quarter 1999. Unabsorbed labor and burden variances, principally resulting from the volume decreases discussed above, continue to impact cost of goods sold. The Company's selling, administrative, and engineering expenses decreased $28,423 to $1,406,145 in the Third Quarter 2000 or 22.2% of net sales, from $1,434,568 reported in the Third Quarter 1999 or 14.9% of net sales. The decrease is the result of ongoing cost reduction programs. These expenses increased as a percentage of sales, however, due to the sales decreases noted above. Other expenses for the Third Quarter 2000 were $461,885 as compared to $140,847 recorded in the Third Quarter 1999. This increase in other expenses for the Third Quarter 2000 is related principally to a $15,000 increased interest expense associated with the borrowings on Company's line of credit, to $314,000 in refinancing and other consultant and professional fees. The net loss for the three months ended September 30, 2000 was $1,563,517, or $0.41 per share, as compared to net income of $16,384, or $0.00 per share for the three months ended September 30, 1999 for the reasons discussed above. 11 Effects of Inflation The Company attempts to minimize the impact of inflation on production and operating costs through cost control programs and productivity improvements. Over the past three years, the rate of inflation has not had a significant impact on the Company's operations. Prices paid for raw materials and other manufacturing inputs have remained fairly stable throughout this period. On a longer-term basis, the Company has demonstrated an ability to adjust the selling prices of its products in reaction to changing costs. Liquidity and Capital Resources At September 30, 2000, the Company had working capital of $7,682,281; the ratio of current assets to current liabilities was 1.6 to 1; and the debt to equity ratio was 1.2 to 1. This compares to working capital of $11,703,743; a ratio of current assets to current liabilities of 2.2 to 1; and a debt to equity ratio of .9 to 1 at December 31, 1999. The decrease in working capital is primarily due to an increase in accounts payable and a decrease in accounts receivable, principally resulting from the sales decreases described above. The Company did not authorize any common stock repurchases during 2000 or 1999. To ensure an adequate supply of key inventory materials, the Company has, in the normal course of business, issued purchase order commitments at September 30, 2000 to a major supplier for the purchase of chassis in the amount of $1,782,000. Such commitments represent approximately a six month supply for certain production models. At September 30, 2000, the Company had available a secured line of credit with a financial institution of $9,000,000 of which $4,815,057 had been utilized. At December 31, 1999, the Company had utilized $5,688,062 of the credit line. The credit facility, which was obtained in July 1999, is in the form of a revolving and term loan credit facility and provides an aggregate principal amount of up to $9 million. The availability under the revolving portion of the credit facility is based on the various advance rates on eligible accounts receivable and inventory subject to reserves and sublimits. The facility has an initial maturity date of June 30, 2002 and bears an initial interest rate of 3/4% above the prime rate as quoted in the Wall Street Journal. In connection with the credit facility, the Company has covenants, among others; (i) not to incur a pre-tax cumulative loss of $850,000 for the period from June 30, 1999 through the end of the initial term and (ii) not to permit the ratio of its total liabilities to its net worth to be greater than 2.0 to 1. The Company also has restrictions on the disposal of assets and the payment of dividends. The Company notified its primary lender that, as of the end of July 2000, the Company was in violation of the cumulative net loss covenant in its Loan and Security Agreement. Pursuant to the notice, the Company received a Waiver and Amendment No.1 to its Loan and Security Agreement wherein the lender has waived the violation until November 30, 2000. The Loan and Security Agreement has been amended to increase the rate on the credit facility to 2 3/4 over the prime rate as quoted in the Wall Street Journal. 12 The Company is in the process of exploring various alternatives and developing a comprehensive business and capital plan to address both its operational issues and its capital and liquidity needs. Among other things in that regard, the Company is discussing its alternatives with its lender and expects to seek, prior to November 30, 2000, an additional waiver of covenant compliance and negotiate other arrangements with its lender to provide for its ongoing liquidity needs. However, there are no assurances that the foregoing arrangements can be made by the Company with its lender. Therefore, as of September 30, 2000, all the borrowings related to the credit facility have been classified as a current liability. Item 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK The Company's market risk exposure at September 30, 2000 is consistent with the types of market risk and amount of exposures presented in its Annual Report on Form 10-K for the year ended December 31, 1999. PART II - OTHER INFORMATION Item 1. Legal Proceedings. None. ----------------- Item 2. Changes in Securities. None. --------------------- Item 3. Defaults upon Senior Securities. None. ------------------------------- Item 4. Submission of Matters to a Vote of Security Holders. None --------------------------------------------------- Item 5. Other Information. None ----------------- Item 6. Exhibits and Reports on Form 8-K. -------------------------------- (a)Exhibits have been filed as part of this report: 10.1 Waiver and Amendment NO. 1 to Loan and Security Agreement dated October 31, 2000 27.1 Financial Data Schedule (b)No reports on Form 8-K have been filed during the quarter for which this report is filed. 13 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. ATHEY PRODUCTS CORPORATION Date: November 14, 2000 /s/ Thomas N. Nelson - -------------------------- ---------------------- Thomas N. Nelson President and Chief Executive Officer Date: November 14, 2000 /s/ William H. Warden - -------------------------- ------------------------ William H. Warden Vice President - Finance, Chief Financial Officer, Treasurer and Corporate Secretary 14 EX-10.1 2 0002.txt WAIVER & AM. #1 TO LOAN AGREEMENT Exhibit 10.1 WAIVER AND AMENDMENT NO. 1 TO LOAN AND SECURITY AGREEMENT THIS WAIVER AND AMENDMENT NO. 1 (this "Amendment") is entered into as of October 31, 2000, by and between ATHEY PRODUCTS CORPORATION ("Borrower") and WELLS FARGO BUSINESS CREDIT, INC., successor by assignment to Banc of America Commercial Finance Corporation (formerly known as NationsCredit Commercial Corporation)("Lender"). BACKGROUND Borrower and Lender are parties to a Loan and Security Agreement dated as of June 30, 1999 (as amended, restated, supplemented or otherwise modified from time to time, the "Loan Agreement") pursuant to which Lender provides Borrower with certain financial accommodations. Borrower has requested that Lender waiver the violation of the Maximum Cumulative Net Loss covenant contained in the Loan Agreement and Lender is willing to do so on the terms and conditions hereafter set forth. NOW, THEREFORE, in consideration of any loan or advance or grant of credit heretofore or hereafter made to or for the account of Borrower by Lender, and for other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the parties hereto hereby agree as follows: 1. Definitions. All capitalized terms not otherwise defined herein shall have the meanings given to them in the Loan Agreement. 2. Amendment to Loan Agreement. Subject to satisfaction of the conditions precedent set forth in Section 4 below, Schedule A to the Loan Agreement is hereby amended by amending Section 3 in its entirety to provide as follows: 3. Interest Rates: (a) Revolving Loans: 2.75% per annum in excess of the Prime Rate (b) Term Loan: 2.75% per annum in excess of the Prime Rate 3. Waiver. Subject to satisfaction of the conditions precedent set forth in Section 4 below, Lender hereby waives the Event of Default which has occurred or may occur as a result of the Maximum Cumulative Net Loss exceeding the amounts permitted under the Loan Agreement but only to the extent that such non-compliance occurred or occurs on or prior to November 30, 2000. 4. Conditions of Effectiveness. This Amendment shall become effective upon satisfaction of the following conditions precedent: (i) Lender shall have received this Amendment in form and substance satisfactory to Lender executed by Borrower and (ii) Lender shall receive a fee in the amount of $5,000 which shall be charged to Borrower loan account on the date of this Amendment. 5. Appraisal. Borrower agrees that Lender will retain an independent appraisal firm to prepare an appraisal of the Inventory and that Borrower will pay all costs and expenses. Additionally, Lender reserves the right to complete appraisals on the Borrower's Equipment and Real Property where Borrower will pay all costs and expenses. 6. Representatives and Warranties. Borrower hereby represents and warrants as follows: (a)This Amendment and the Loan Agreement, as amended hereby, constitute legal, valid and binding obligations of Borrower and are enforceable against Borrower in accordance with their respective terms. (b)Upon the effectiveness of this Amendment, Borrower hereby reaffirms all covenants, representations and warranties made in the Loan Agreement to the extent the same are not amended hereby and agree that all such covenants, representations and warranties shall be deemed to have been remade as of the effective date of this Amendment. (c)No Event of Default or Default has occurred and is continuing or would exist after giving effect to this Amendment. (d)Borrower has no defense, counterclaim or offset with respect to the Loan Agreement. 7. Effect on the Loan Agreement. (a)Upon the effectiveness of Section 2 hereof, each reference in the Loan Agreement to "this Agreement," "hereunder," "hereof," "herein" or words of like import shall mean and be a reference to the Loan Agreement as amended hereby. (b)Except as specifically amended herein, the Loan Agreement, and all other documents, instruments and agreements executed and/or delivered in connection therewith, shall remain in full force and effect, and are hereby ratified and confirmed. (c)The execution, delivery and effectiveness of this Amendment shall not, except as expressly provided in Section 3, operate as a waiver of any right, power or remedy of Lender, nor constitute a waiver of any provision of the Loan Agreement, or any other documents, instruments or agreements executed and/or delivered under or in connection therewith. 8. Governing Law. This Amendment shall be binding upon and inure to the benefit of the parties hereto and their respective successors and assigns and shall be governed by and construed in accordance with the laws of the State of New York. 9. Headings. Section headings in this Amendment are included herein for convenience of reference only and shall not constitute a part of this Amendment for any other purpose. 10. Counterparts; Facsimile. This Amendment may be executed by the parties hereto in one or more counterparts, each of which shall be deemed an original and all of which when taken together shall constitute one and the same agreement. Any signature delivered by a party by facsimile transmission shall be deemed to be an original signature hereto. IN WITNESS WHEREOF, this Amendment has been duly executed as of the day and year first written above. ATHEY PRODUCTS CORPORATION By: /s/ Thomas N. Nelson -------------------------- Name: Thomas N. Nelson Title: President and CEO WELLS FARGO BUSINESS CREDIT, INC. By: /s/ John C. Bambach -------------------------- Name: John C. Bambach Title: Vice President EX-27 3 0003.txt FINANCIAL DATA SCHEDULE
5 9-MOS DEC-31-2000 JAN-01-2000 SEP-30-2000 587,730 0 2,123,367 168,980 16,984,008 20,081,458 9,241,942 5,943,894 23,443,506 12,399,177 0 0 0 8,040,918 2,571,018 23,443,506 23,771,215 0 21,355,210 4,195,824 314,065 0 503,620 (2,567,719) 0 (2,567,719) 0 0 0 (2,567,719) (0.67) 0
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