-----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, WDfXhm6xnLcF/vwNyoJewAIv8cyo6oeoJiatQUlcBE6dEIlfg01iQWsA/Fiukrjg t8H8kl+9l6hHk0GonZ9Qow== 0000950124-98-000578.txt : 19980209 0000950124-98-000578.hdr.sgml : 19980209 ACCESSION NUMBER: 0000950124-98-000578 CONFORMED SUBMISSION TYPE: 10-Q PUBLIC DOCUMENT COUNT: 2 CONFORMED PERIOD OF REPORT: 19971231 FILED AS OF DATE: 19980206 SROS: NASD FILER: COMPANY DATA: COMPANY CONFORMED NAME: AUTOCAM CORP/MI CENTRAL INDEX KEY: 0000879235 STANDARD INDUSTRIAL CLASSIFICATION: MOTOR VEHICLE PARTS & ACCESSORIES [3714] IRS NUMBER: 382790152 STATE OF INCORPORATION: MI FISCAL YEAR END: 0630 FILING VALUES: FORM TYPE: 10-Q SEC ACT: SEC FILE NUMBER: 000-19544 FILM NUMBER: 98523978 BUSINESS ADDRESS: STREET 1: 4070 EAST PARIS AVE CITY: KENTWOOD STATE: MI ZIP: 49512 BUSINESS PHONE: 6166980707 MAIL ADDRESS: STREET 1: 4070 EAST PARIS AVENUE SE CITY: KENTWOOD STATE: MI ZIP: 49512 10-Q 1 FORM 10-Q 1 UNITED STATES SECURITIES AND EXCHANGE COMMISSION WASHINGTON, D.C. 20549 FORM 10-Q Quarterly Report Under Section 13 or 15(d) of the Securities Exchange Act of 1934 For The Quarter Ended December 31, 1997 Commission File Number 0-19544 AUTOCAM CORPORATION A Michigan Corporation I.R.S. Employer Identification No. 38-2790152 4070 East Paris Avenue, Kentwood, Michigan 49512 Telephone: (616) 698-0707 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, and (2) has been subject to such filing requirements for the past 90 days. Yes X No ---- ---- The number of Common Shares outstanding at February 2, 1998 was 6,040,257. 2 INDEX
PART I - FINANCIAL INFORMATION PAGE NO. Item 1. Financial Statements Consolidated Balance Sheets as of December 31 and June 30, 1997 3 Consolidated Statements of Operations for the Three and Six Months Ended December 31, 1997 and 1996 4 Consolidated Statements of Cash Flows for the Three and Six Months Ended December 31, 1997 and 1996 5 Notes to Consolidated Financial Statements 6 - 8 Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations 9 - 13 PART II - OTHER INFORMATION Item 1. Legal Proceedings - None. Item 2. Changes in Securities - None. Item 3. Default 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 - The Company filed a Form 8-K Report, dated January 30, 1998 and filed February 6, 1998, to report under Item 2 of the Form 8-K the investment in Qualipart Industria E Comercio Ltda. ("Qualipart"), a precision-machining manufacturer, headquartered in Pinhal-SP, Brazil. The Company purchased a 51% interest in Qualipart, a supplier of gasoline and diesel fuel injector components to leading global automotive and heavy construction original equipment manufacturers and their tier-one suppliers. Qualipart has annual sales of approximately $15 million.
2 3 AUTOCAM CORPORATION & SUBSIDIARIES CONSOLIDATED CONDENSED BALANCE SHEETS
DECEMBER 31, 1997 JUNE 30, 1997 ----------------- ------------- (UNAUDITED) ----------------- ASSETS CURRENT ASSETS: Cash and equivalents $ 266,424 $ 2,510,500 Accounts receivable 10,531,516 8,841,516 Inventories 4,999,843 5,444,420 Prepaid expenses and other 1,170,802 722,020 ----------- ----------- TOTAL CURRENT ASSETS 16,968,585 17,518,456 PROPERTY, PLANT AND EQUIPMENT, NET 54,609,772 53,291,418 RESTRICTED CASH AND EQUIVALENTS 8,921,250 OTHER LONG-TERM ASSETS 15,520,988 12,827,954 ----------- ----------- TOTAL ASSETS $96,020,595 $83,637,828 =========== =========== LIABILITIES AND SHAREHOLDERS' EQUITY CURRENT LIABILITIES: Current maturities of long-term obligations $ 6,361,640 $ 5,905,541 Accounts payable 6,520,865 4,398,050 Accrued liabilities 3,485,869 2,911,939 ----------- ----------- TOTAL CURRENT LIABILITIES 16,368,374 13,215,530 LONG-TERM OBLIGATIONS, NET OF CURRENT MATURITIES 30,753,845 25,191,778 DEFERRED TAXES 8,352,000 7,802,000 DEFERRED CREDITS AND OTHER 642,386 813,550 SHAREHOLDERS' EQUITY: Preferred stock - 200,000 shares authorized; no shares issued or outstanding Common stock - 10,000,000 shares authorized; 6,027,520 and 5,711,587 shares issued and outstanding as of December 31 and June 30, 1997, respectively 30,986,518 26,270,940 Deferred compensation (568,333) (645,833) Retained earnings 9,485,805 10,989,863 ----------- ----------- TOTAL SHAREHOLDERS' EQUITY 39,903,990 36,614,970 ----------- ----------- TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY $96,020,595 $83,637,828 =========== ===========
See notes to consolidated financial statements. 3 4 AUTOCAM CORPORATION & SUBSIDIARIES CONSOLIDATED STATEMENTS OF OPERATIONS (UNAUDITED)
FOR THE THREE MONTHS ENDED FOR THE SIX MONTHS ENDED DECEMBER 31, DECEMBER 31, ---------------------------- -------------------------- 1997 1996 1997 1996 ------------- ------------- ------------ ------------ Sales $21,794,971 $15,269,710 $39,223,953 $29,917,529 Cost of sales 16,479,932 11,643,080 30,499,977 22,960,293 ----------- ----------- ----------- ----------- Gross profit 5,315,039 3,626,630 8,723,976 6,957,236 Selling, general and administrative 1,324,206 894,335 2,320,126 1,690,370 Other operating expenses 51,875 51,875 103,750 103,750 ----------- ----------- ----------- ----------- Income from operations 3,938,958 2,680,420 6,300,100 5,163,116 Interest and other expense, net 647,088 313,774 1,254,908 640,537 ----------- ----------- ----------- ----------- Income before tax provision 3,291,870 2,366,646 5,045,192 4,522,579 Tax provision 1,187,900 825,600 1,805,700 1,577,739 ----------- ----------- ----------- ----------- NET INCOME $ 2,103,970 $ 1,541,046 $ 3,239,492 $ 2,944,840 =========== =========== =========== =========== BASIC NET INCOME PER SHARE $ .35 $ .26 $ .54 $ .49 =========== =========== =========== =========== DILUTED NET INCOME PER SHARE $ .34 $ .25 $ .52 $ .49 =========== =========== =========== =========== Basic weighted average shares 6,023,987 5,986,709 6,013,981 5,986,709 Diluted weighted average shares 6,206,684 6,064,916 6,181,344 6,054,921 Dividends declared per share $ .02 $ .02 $ .04 $ .04
See notes to consolidated financial statements. 4 5 AUTOCAM CORPORATION & SUBSIDIARIES CONSOLIDATED STATEMENTS OF CASH FLOWS (UNAUDITED) FOR THE SIX MONTHS ENDED DECEMBER 31, -------------------------- 1997 1996 ------------ ------------ CASH FLOWS FROM OPERATING ACTIVITIES: Net income $ 3,239,492 $ 2,944,840 Adjustments to reconcile net income to net cash provided by operating activities: Depreciation and amortization 3,538,658 2,632,994 Deferred taxes and other 589,094 500,000 Changes in assets and liabilities that provided (used) cash: Accounts receivable (1,732,632) 890,570 Inventories 444,577 (305,286) Prepaid expenses and other (74,816) (29,750) Other long-term assets 207,029 102,629 Accounts payable 1,242,975 (565,862) Accrued liabilities 1,577,967 465,177 Deferred credits and other (98,128) (55,659) ----------- ----------- NET CASH PROVIDED BY OPERATING ACTIVITIES 8,934,216 6,579,653 ----------- ----------- CASH FLOWS FROM INVESTING ACTIVITIES: Capital expenditures and deposits on equipment (6,797,183) (5,091,289) Proceeds from sale of equipment 226,740 1,350 Investments in subsidiaries (1,221,620) Payment of life insurance premiums and other (274,263) (241,220) ----------- ----------- NET CASH USED IN INVESTING ACTIVITIES (8,066,326) (5,331,159) ----------- ----------- CASH FLOWS FROM FINANCING ACTIVITIES: Repayments on line of credit, net (634,452) Proceeds from issuance of long-term obligations 9,625,000 1,550,000 Increase in restricted cash and equivalents (8,921,250) Principal payments of long-term obligations (2,972,382) (1,946,650) Debt issue costs (180,911) Cash dividends paid (230,654) (109,681) Proceeds from exercise of employee stock options 202,683 30,597 ----------- ----------- NET CASH USED IN FINANCING ACTIVITIES (3,111,966) (475,734) ----------- ----------- Net increase (decrease) in cash (2,244,076) 772,760 Cash and equivalents at beginning of period 2,510,500 1,466,751 ----------- ----------- Cash and equivalents at end of period $ 266,424 $ 2,239,511 =========== =========== SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION: Cash paid during the period for: Interest $ 1,352,040 $ 652,258 Income taxes 130,250 828,000
See notes to consolidated financial statements. 5 6 AUTOCAM CORPORATION & SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS DECEMBER 31, 1997 1. BASIS OF PRESENTATION The accompanying unaudited interim consolidated financial statements (the "Financial Statements") of Autocam Corporation and its wholly-owned subsidiaries (together, the "Company") have been prepared pursuant to the rules and regulations of the Securities and Exchange Commission. Accordingly, the Financial Statements do not include all the information and footnotes normally included in the annual consolidated financial statements prepared in accordance with generally accepted accounting principles. All significant intercompany accounts and transactions have been eliminated in consolidation. In the opinion of management, the Financial Statements reflect all adjustments (consisting only of normal recurring adjustments) necessary to present fairly such information in accordance with generally accepted accounting principles. These Financial Statements should be read in conjunction with the financial statements and footnotes thereto included in the Company's Annual Report on Form 10-K for the fiscal year ended June 30, 1997. Weighted average shares outstanding and earnings per share for the three and six months ended December 31, 1996 have been restated to give effect to a 5% share dividend declared on October 21, 1997 and paid on November 17, 1997 to shareholders of record on November 3, 1997. RECLASSIFICATIONS - Certain reclassifications have been made to the Balance Sheet as of June 30, 1997 in order to conform to the December 31, 1997 presentation. 2. INVENTORIES Inventories are summarized as follows:
DECEMBER 31, 1997 JUNE 30, 1997 ----------------- ------------- (UNAUDITED) ----------- Raw materials $1,186,998 $1,389,735 Production supplies 1,205,090 1,163,588 Work in-process 1,887,855 2,073,987 Finished goods 719,900 817,110 ---------- ---------- TOTAL INVENTORIES $4,999,843 $5,444,420 ========== ==========
6 7 AUTOCAM CORPORATION & SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - CONTINUED DECEMBER 31, 1997 3. PROPERTY, PLANT AND EQUIPMENT, NET Property, plant and equipment is summarized by major classification as follows:
DECEMBER 31, 1997 JUNE 30, 1997 ----------------- ------------- (UNAUDITED) ----------------- Land and improvements $ 1,895,138 $ 1,842,781 Buildings and improvements 7,148,606 6,869,861 Leasehold improvements 417,866 340,014 Machinery and equipment 62,338,724 59,268,918 Furniture and fixtures 2,960,602 2,543,855 Construction in progress 508,304 57,546 ------------ ------------ TOTAL 75,269,240 70,922,975 Accumulated depreciation and amortization (20,659,468) (17,631,557) ------------ ------------ PROPERTY, PLANT AND EQUIPMENT, NET $ 54,609,772 $ 53,291,418 ============ ============
4. LONG-TERM OBLIGATIONS Long-term obligations consist of the following (interest rates are as of December 31, 1997):
DECEMBER 31, 1997 JUNE 30, 1997 ----------------- ------------- (UNAUDITED) ----------------- Term notes with banks, 6.4% to 9.25% $19,994,306 $21,599,739 Industrial Revenue Bonds, 4.1% 9,000,000 Mortgage payable to bank, 9.35% 994,210 1,039,234 Second mortgage payable to bank, 7% 978,568 1,007,829 Revolving credit note with bank, 8% 6,148,401 6,782,853 Capital lease obligation 667,664 ----------- ----------- TOTAL 37,115,485 31,097,319 Less current maturities 6,361,640 5,905,541 ----------- ----------- LONG-TERM $30,753,845 $25,191,778 =========== ===========
In December 1997, the Company issued Industrial Revenue Bonds totaling $9 million through the Michigan Strategic Fund in order to partially fund the construction of a new manufacturing facility in Marshall, Michigan and to purchase certain new equipment for that facility. Principal payments are due annually (amortizing over a 15-year period), with variable interest payments due monthly. The interest rate on the bonds resets weekly and was set at 4.1% per annum as of December 31, 1997. The net proceeds from this bond offering are included in Restricted Cash and Equivalents. 7 8 AUTOCAM CORPORATION & SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - CONCLUDED DECEMBER 31, 1997 5. INCOME TAXES Income taxes were provided at effective rates of 36.1% and 35.8% for the three and six months ended December 31, 1997 versus 34.9% for both respective periods in fiscal 1997. These amounts include provisions for California Unitary and South Carolina State income taxes. 6. SUBSEQUENT EVENT Effective January 1, 1998, the Company purchased a 51% interest in the business of Qualipart Industria E Comercio Ltda. ("Qualipart"), a precision-machining manufacturer, headquartered in Pinhal-SP, Brazil, for $10.2 million. Qualipart is a supplier of gasoline and diesel fuel injector components to leading global automotive and heavy construction original equipment manufacturers and their tier-one suppliers. 8 9 AUTOCAM CORPORATION AND SUBSIDIARIES MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS DECEMBER 31, 1997 Certain matters discussed in the following pages include forward looking statements which include risks and uncertainties including but not limited to economic, competitive, governmental and technological factors affecting Autocam Corporation and its wholly-owned subsidiaries' (together, the "Company") operations, markets, products, services and prices. RESULTS OF OPERATIONS The following table presents, for the periods indicated, the components of the Company's Consolidated Statements of Operations as a percentage of sales:
THREE MONTHS ENDED SIX MONTHS ENDED DECEMBER 31, DECEMBER 31, -------------------- ------------------ 1997 1996 1997 1996 --------- --------- -------- -------- Sales 100.0% 100.0% 100.0% 100.0% Cost of sales 75.6% 76.2% 77.8% 76.7% ----- ----- ----- ----- Gross profit 24.4% 23.8% 22.2% 23.3% Selling, general and administrative 6.1% 5.9% 5.9% 5.7% Other operating expenses .2% .3% .2% .4% ----- ----- ----- ----- Income from operations 18.1% 17.6% 16.1% 17.2% Interest and other expense, net 3.0% 2.1% 3.2% 2.1% ----- ----- ----- ----- Income before tax provision 15.1% 15.5% 12.9% 15.1% Tax provision 5.5% 5.4% 4.6% 5.3% ----- ----- ----- ----- NET INCOME 9.6% 10.1% 8.3% 9.8% ===== ===== ===== =====
9 10 AUTOCAM CORPORATION AND SUBSIDIARIES MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS - CONTINUED DECEMBER 31, 1997 SALES The following table indicates the Company's sales (in thousands) and percentage of total sales by product application for the three and six month periods ended December 31, 1997 and 1996:
FOR THE THREE MONTHS ENDED DECEMBER 31, FOR THE SIX MONTHS ENDED DECEMBER 31, ---------------------------------------------- ---------------------------------------------- 1997 1996 1997 1996 ---------------------- ---------------------- ---------------------- ---------------------- Transportation: Fuel systems $12,610 57.9% $11,165 73.1% $22,781 58.1% $21,866 73.1% Braking systems 4,035 18.5 1,606 10.5 8,078 20.6 3,320 11.1 Other 466 2.1 418 2.7 894 2.3 639 2.1 ------- ------ ------- ----- ------- ------ ------- ----- Total transportation 17,111 78.5 13,189 86.3 31,753 81.0 25,825 86.3 Medical devices 2,453 11.3 1,665 10.9 4,323 11.0 3,293 11.0 Computer electronics 1,950 8.9 416 2.8 2,620 6.7 794 2.7 Other 281 1.3 528 1.3 6
Sales of components for fuel system applications were $12,610,000 and $22,781,000 for the three and six months ended December 31, 1997, respectively, representing increases of 13% and 4% over sales of the same respective periods in the prior year. The Company continues to benefit from increasing demand from its fuel systems customers as their new injector programs expand. Growth in the six month period was hampered slightly by longer than expected model changeover shutdowns and labor work stoppages at certain of the Company's largest customer's facilities during the first quarter of fiscal 1998. Sales of fuel systems components to its two largest customers in this area represented 47% of total Company sales during the three and six months ended December 31, 1997. Sales of braking system components for the three and six months ended December 31, 1997 were $4,035,000 and $8,078,000, respectively. The increases in sales of these components can be attributed almost entirely to sales generated by facilities acquired as part of the Company's purchase of The Hamilton Group ("Hamilton") on June 30, 1997. Sales of medical device components were $2,453,000 and $4,323,000 for the three and six months ended December 31, 1997, respectively, representing increases of 47% and 31% as compared to the same respective periods in the prior year. During the second half of fiscal 1997, the Company began manufacturing precision-machined metal components for innovative cardiovascular surgical device manufacturers, commonly known as coronary stents. The sale of these components is the primary reason for the sales increase between the periods presented. Sales of components for computer electronic applications were $1,950,000 and $2,620,000 during the three and six months ended December 31, 1997, respectively. The increases in sales of these components are attributable to the production and sale of key components used in computer microprocessor subassemblies during the first two quarters of fiscal 1998. This new program began in July 1997. 10 11 AUTOCAM CORPORATION AND SUBSIDIARIES MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS - CONTINUED DECEMBER 31, 1997 SALES - CONCLUDED Management believes that year-over-year sales growth in fiscal 1998 will approximate 45%. Growth is expected to be generated primarily from increasing sales of fuel and braking system and computer electronics components. The January 1998 acquisition of a controlling interest in Qualipart Industria E. Comercio Ltda. ("Qualipart"), a precision-machining manufacturer, headquartered in Pinhal-SP, Brazil, is expected to generate an additional $7 million, primarily in fuel systems components sales to gasoline and diesel fuel injection customers in Brazil and the United States. Braking system component sales increases are expected to be driven by shipments of components from facilities acquired in the Hamilton acquisition; such sales should approximate $13 million in fiscal 1998. Sales increases to the computer electronics industry are expected to be generated by shipments of computer microprocessor subassembly components. The Company expects sales of these components to grow significantly over the next six months. GROSS PROFIT Gross profit for the three and six months ended December 31, 1997 represented 24.4% and 22.2% of sales, respectively, verses 23.8% and 23.3% for the same respective periods of fiscal 1997. The increase in margins when comparing the three-month periods presented can be attributed to increases in sales of higher margin medical device components and better labor and equipment utilization due to growth in demand for new fuel systems and computer electronics program components. The decline in margins when comparing the six-month periods presented can be attributed to larger than previously experienced declines in orders from the Company's largest automotive customer due to seasonal model changeover shutdowns and labor work stoppages at customer facilities during the first quarter of fiscal 1998. Also during the first quarter of fiscal 1998, the Company was in the midst of several new program start-ups for fuel systems customers. Typically, margins are lower in the early stages of a new program and improve as the Company's continuous improvement methodology streamlines manufacturing processes. Management expects that fiscal 1998 gross profit, as a percentage of sales, will continue to improve slightly over the remainder of the fiscal year, as compared to the second quarter of fiscal 1998. The Company believes that those trends that resulted in profit margin improvement during the second quarter will continue for the balance of the fiscal year. Management also believes that the integration of Hamilton's and Qualipart's operations and the implementation of continuous improvement concepts employed by Autocam are expected to result in improved margins on products manufactured in those facilities. 11 12 AUTOCAM CORPORATION AND SUBSIDIARIES MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS - CONTINUED DECEMBER 31, 1997 SELLING, GENERAL AND ADMINISTRATIVE Selling, general and administrative expenses, as a percentage of sales, were 6.1% and 5.9% during the three and six months ended December 31, 1997, respectively, versus 5.9% and 5.7% for the same respective periods in the prior year. These expenses increased monetarily and as a percentage of sales due to the Hamilton acquisition. Management expects selling, general and administrative expenses, as a percentage of sales, to remain consistent with second quarter of 1998 levels for the balance of fiscal 1998. OTHER OPERATING EXPENSES Other operating expenses represent the straight-line amortization of employment and deferred compensation agreements between the Company and a key employee. INTEREST AND OTHER EXPENSE, NET Net interest and other expense for the three and six months ended December 31, 1997 was 3.0% and 3.2%, respectively, as compared to 2.1% for the fiscal 1997 periods presented. This increase is due primarily to an increase in average borrowings outstanding during the fiscal 1998 periods presented in order to finance the Hamilton acquisition. Management anticipates that interest expense over the next six months will increase monetarily over second quarter levels; however, as a percentage of sales, interest expense should remain consistent with second quarter levels. The Company borrowed $10.2 million on January 30, 1998 to finance the acquisition of Qualipart that will generate interest expense during the last six months of fiscal 1998 of approximately $425,000. As a percentage of sales, however, this increase is expected to be offset by lower interest costs due to planned debt reduction over the next six months. TAX PROVISION Income taxes were provided at effective rates of 36.1% and 35.8% for the three and six months ended December 31, 1997 versus 34.9% for both respective periods in fiscal 1997. These amounts include appropriate provisions for California Unitary and South Carolina State income taxes. Management expects the Company's effective tax rate to approximate 36% for the remainder of fiscal 1998. 12 13 AUTOCAM CORPORATION AND SUBSIDIARIES MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS - CONCLUDED DECEMBER 31, 1997 LIQUIDITY AND CAPITAL RESOURCES New equipment placed into service and deposits paid on future equipment purchases during the six months ended December 31, 1997 totaling $9.6 million were financed through operating cash flows, bank borrowings ($625,000) and operating lease agreements ($2.8 million). In order to meet demand primarily from transportation and computer electronics customers, management will purchase $9.1 million of equipment and invest $1.6 million in facilities over the next six months (on which deposits of $3.3 million had been placed as of December 31, 1997). Management expects to finance these purchases with cash on hand (generated from the issuance of Industrial Revenue Bonds), operating cash flows, operating leases, and/or bank borrowings, including its equipment line of credit ($5,375,000 in availability as of December 31, 1997) which allows the Company to retire borrowings over a period not to exceed six years with either variable or fixed interest rates. On December 23, 1997, the Company issued Industrial Revenue Bonds totaling $9 million through the Michigan Strategic Fund in order to partially fund the construction of a new manufacturing facility in Marshall, Michigan and to purchase new equipment for that facility. Principal payments are due annually (amortizing over a 15-year period), with variable interest payments due monthly. The interest rate on the bonds resets weekly and was set at 4.1% per annum as of December 31, 1997. The January 1998 Qualipart acquisition (now Autocam do Brasil) was financed through bank borrowings and a note to the seller of $5.2 million and $5 million, respectively. The funds used to complete the acquisition were obtained through an acquisition term note with the Company's primary lending institution and will be paid in 60 equal monthly principal installments, plus interest at 7.1% per annum. The note to the seller bears interest at 12% per annum to be paid annually. Annual principal obligations under the note are required to begin in 2003, but may be prepaid through a capital contribution made directly to Autocam do Brasil. Management believes that the Company has adequate credit facilities and cash available to meet its working capital needs through fiscal 1998. As of December 31, 1997, the Company had $4,950,000 in availability under its revolving line of credit. Management anticipates retiring current maturities of long-term obligations with future operating cash flows. As of December 31, 1997, $15.1 million of the Company's long-term debt was subject to variable interest rates. 13 14 SIGNATURES Pursuant to the requirements of the Securities and Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized. Date: February 6, 1998 Autocam Corporation /s/ John C. Kennedy ------------------------ John C. Kennedy Principal Executive Officer /s/ Warren A. Veltman ------------------------ Warren A. Veltman Principal Financial and Accounting Officer 14 15 INDEX TO EXHIBITS EXHIBIT NO. DESCRIPTION - ----------- ----------- 27 Financial Data Schedule EX-27 2 EXHIBIT 27
5 6-MOS JUN-30-1998 JUL-01-1997 DEC-31-1997 266,424 0 10,531,516 0 4,999,843 16,968,585 75,269,240 20,659,468 96,020,595 16,368,374 30,753,845 0 0 30,986,518 8,917,472 96,020,595 39,223,953 39,223,953 30,499,977 30,499,977 0 0 1,215,329 5,045,192 1,805,700 3,239,492 0 0 0 3,239,492 .54 .52
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