-----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, S9ApytDRGHE1zzlm3gbpJJ/AT3D0uA9aWqqEJMEFWyaT0bQDlYRi69aADbcdiWtC dZc4/9OdTggweoK1YCGNzw== 0000912057-99-001533.txt : 19991020 0000912057-99-001533.hdr.sgml : 19991020 ACCESSION NUMBER: 0000912057-99-001533 CONFORMED SUBMISSION TYPE: 8-K PUBLIC DOCUMENT COUNT: 6 CONFORMED PERIOD OF REPORT: 19990805 ITEM INFORMATION: ITEM INFORMATION: FILED AS OF DATE: 19991019 FILER: COMPANY DATA: COMPANY CONFORMED NAME: DECRANE AIRCRAFT HOLDINGS INC CENTRAL INDEX KEY: 0000880765 STANDARD INDUSTRIAL CLASSIFICATION: AIRCRAFT PART & AUXILIARY EQUIPMENT, NEC [3728] IRS NUMBER: 341645569 STATE OF INCORPORATION: OH FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 8-K SEC ACT: SEC FILE NUMBER: 000-22371 FILM NUMBER: 99730438 BUSINESS ADDRESS: STREET 1: 2361 ROSECRANS AVENUE STREET 2: SUITE 180 CITY: EL SEGUNDO STATE: CA ZIP: 90245-4910 BUSINESS PHONE: 3107259123 MAIL ADDRESS: STREET 1: 2361 ROSECRANS AVENUE STREET 2: SUITE 180 CITY: EL SEGUNDO STATE: CA ZIP: 90245-4910 8-K 1 8-K - ------------------------------------------------------------------------------- - ------------------------------------------------------------------------------- UNITED STATES SECURITIES AND EXCHANGE COMMISSION WASHINGTON, D.C. 20549 -------------- FORM 8-K CURRENT REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 August 5, 1999 Date of Report (Date of earliest event reported) -------------- DECRANE AIRCRAFT HOLDINGS, INC. (Exact name of registrant as specified in its charter) DELAWARE 333-70365 34-1645569 (State or other jurisdiction (Commission File Number) (I.R.S. Employer of incorporation) Identification No.) 2361 ROSECRANS AVENUE, SUITE 180, EL SEGUNDO, CA 90245 (Address, including zip code, of principal executive offices) (310) 725-9123 (Registrant's telephone number, including area code) -------------- NOT APPLICABLE (Former address and telephone number of principal executive offices, if changed since last report) -------------- - ------------------------------------------------------------------------------- - ------------------------------------------------------------------------------- EXPLANATORY NOTE On August 6, 1999, DeCrane Aircraft Holdings, Inc. filed its Form 10-Q for the quarter ended June 30, 1999. In Item 5 of that Form 10-Q, we described our August 5, 1999 acquisition of Custom Woodwork & Plastics, Inc. At the time of filing, the Regulation S-X compliant audited financial statements of Custom Woodwork and the pro forma consolidated financial information required by the Securities Exchange Act of 1934 were not available. The purpose of this Form 8-K is to provide the required financial statements and pro forma financial information. In October 1998, we also acquired PCI NewCo, Inc. and International Custom Interiors, Inc. Item 2 of this Form 8-K includes a description of these acquisitions. The Regulation S-X compliant audited financial statements and pro forma consolidated financial information required in Item 7 are not available at this time and will be filed by amendment to this Form 8-K by no later than December 20, 1999. DOCUMENTS REFERRED TO IN THIS REPORT DeCrane Aircraft has filed documents with the Securities and Exchange Commission that we refer to in this report. The documents we refer to and the information they contain are described below: - - Our Registration Statement No. 333-70365 on Form S-1 effective May 14, 1999, and the prospectus it contains. The prospectus includes our audited 1998 financial statements, descriptions of previously completed acquisitions and the DLJ acquisition, audited financial statements of previously acquired companies and unaudited pro forma consolidated financial information reflecting the previously acquired companies. - - Our Form 10-Q for the quarter ended June 30, 1999. The Form 10-Q includes our historical consolidated financial statements, updated information for previously acquired companies and information on the Custom Woodwork's acquisition. You may read and copy any reports, statements or other information we file at the SEC's reference room in Washington D.C. Please call the SEC at (202) 942-8090 for further information on the operation of the reference rooms. You can also request copies of these documents, upon payment of a duplicating fee, by writing to the SEC, or review our SEC filings on the SEC's EDGAR web site, which can be found at http:\\www.sec.gov. You may also write or call us at our corporate office located at 2361 Rosecrans Avenue, Suite 180, El Segundo, California 90245. Our telephone number is (310) 725-9123. ITEM 2. ACQUISITION OR DISPOSITION OF ASSETS ACQUISITION OF CUSTOM WOODWORK & PLASTICS, INC. On August 5, 1999 we acquired substantially all of the assets, subject to accounts payable and accrued expenses assumed, of Custom Woodwork & Plastics, Inc. Custom Woodwork is a Georgia-based designer and manufacturer of interior furniture components for middle- and high-end corporate aircraft. We intend to continue to use the acquired assets to manufacture products similar to those previously manufactured by Custom Woodwork. The total purchase price was $13.8 million, including an estimated $0.5 million of acquisition related costs. The acquisition will be accounted for as a purchase and the assets acquired and liabilities assumed will be recorded at their estimated fair values. Based on historical values as of June 30, 1999, it is estimated that the historical value of inventory will be increased by $0.5 million and the $11.7 million difference between the purchase price and the fair value of the net assets acquired will be recorded as goodwill and amortized on a straight-line basis over thirty years. The purchase price allocation is preliminary and may change upon the completion of the final valuation of the net assets acquired. Our consolidated financial statement will include Custom Woodwork's financial position and its results of operations for periods subsequent to the acquisition date. The acquisition was funded with borrowings under our senior credit facility. 1 ACQUISITION OF PCI NEWCO, INC. On October 6, 1999 we acquired substantially all of the assets, subject to accounts payable and accrued expenses assumed, of PCI NewCo, Inc. PCI NewCo is a Kansas-based manufacturer of composite material and components for middle- and high-end corporate aircraft. We intend to continue to use the acquired assets to manufacture products similar to those previously manufactured by PCI NewCo. The total purchase price was $8.8 million, plus $1.5 million of contingent consideration payable in 2000 based on future attainment of defined performance criteria. The total purchase price includes an estimated $0.3 million of acquisition related costs. The acquisition will be accounted for as a purchase and the difference between the purchase price and the fair value of the net assets acquired will be recorded as goodwill and amortized on a straight-line basis over thirty years. The amount of contingent consideration paid in the future, if any, will increase goodwill and will be amortized prospectively over the remaining period of the initial thirty-year term. Our consolidated financial statements will include PCI NewCo's financial position and its results of operations for periods subsequent to the acquisition date. The acquisition was funded with borrowings under our senior credit facility. ACQUISITION OF INTERNATIONAL CUSTOM INTERIORS, INC. On October 8, 1999 we acquired all of the common stock of International Custom Interiors, Inc. Custom Interiors is a Florida-based provider of upholstery services and manufacturer of furniture for middle- and high-end corporate aircraft. We intend to continue to use the acquired assets to manufacture products similar to those previously manufactured by Custom Interiors. The total purchase price was $3.2 million, including an estimated $0.4 million of acquisition related costs. The acquisition will be accounted for as a purchase and the difference between the purchase price and the fair value of the net assets acquired will be recorded as goodwill and amortized on a straight-line basis over thirty years. Our consolidated financial statements will include Custom Interiors' financial position and its results of operations for periods subsequent to the acquisition date. The acquisition was funded with borrowings under our senior credit facility. ITEM 7. FINANCIAL STATEMENTS AND EXHIBITS (a) Financial statements of businesses acquired. Audited financial statements of Custom Woodwork & Plastics, Inc., including related notes and independent accountants' report, are attached hereto as follows:
Page ------ Report of Independent Accountants ......................................................................... F-1 Balance Sheets as of December 31, 1997 and 1998 and June 30, 1999 (unaudited) ............................. F-2 Statements of Income for the years ended December 31, 1997 and 1998 and the six months ended June 30, 1998 and 1999 (unaudited) ................................................. F-3 Statements of Stockholders' Equity for years ended December 31, 1997 and 1998 and the six months ended June 30, 1999 (unaudited) .......................................................... F-4 Statements of Cash Flows for the years ended December 31, 1997 and 1998 and the six months ended June 30, 1998 and 1999 (unaudited) ................................................. F-5 Notes to the Financial Statements ......................................................................... F-6
PCI NewCo, Inc. Regulation S-X compliant audited financial statements are not available at this time. The audited financial statements for the appropriate periods will be filed by amendment to this Form 8-K as soon as practicable, but in no event later than December 20, 1999. Because International Custom Interiors, Inc. does not constitute a significant subsidiary, the filing of Regulation S-X compliant audited financial statements is not required. 2 (b) Pro forma financial information. Unaudited pro forma financial information reflecting the Custom Woodwork & Plastics, Inc. acquisition, including related explanatory notes, are attached hereto as follows:
Page ------ Basis of Presentation ..................................................................................... P-1 Unaudited Pro Forma Consolidated Statement of Operations for the year ended December 31, 1998 ............. P-2 Unaudited Pro Forma Consolidated Statement of Operations for the six months ended June 30, 1999 ........... P-3 Unaudited Pro Forma Consolidated Balance Sheet as of June 30, 1999 ........................................ P-4 Notes to Unaudited Pro Forma Consolidated Financial Information ........................................... P-5
Unaudited pro forma financial information reflecting the PCI NewCo, Inc. and International Custom Interiors, Inc. acquisitions is not available at this time. The pro forma financial information will be filed by amendment to this Form 8-K as soon as practicable, but in no event later than December 20, 1999. (c) Exhibits.
Exhibit No. Exhibit Description ------- --------------------------------------------------------------------------------------------- 13.19.1 Articles of Incorporation of CWP Acquisition, Inc. * 13.19.2 By Laws of CWP Acquisition, Inc. * 13.20.1 Articles of Incorporation of PCI Acquisition Co., Inc. ** 13.20.2 By Laws of PCI Acquisition Co., Inc. ** 13.21.1 Articles of Incorporation of International Custom Interiors, Inc. ** 13.21.2 By Laws of International Custom Interiors, Inc. ** 20.1 Prospectus of DeCrane Aircraft Holdings, Inc. dated May 14, 1999 (incorporated by reference to the Company's Registration Statement No. 333-70365 on Form S-1 effective May 14, 1999) * 21.1 List of Subsidiaries of Registrant **
- -------------- * Previously filed ** Filed herewith 3 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. DECRANE AIRCRAFT HOLDINGS, INC. (Registrant) October 19, 1999 By: /s/ RICHARD J. KAPLAN ------------------------------------- Name: Richard J. Kaplan Title: Senior Vice President, Chief Financial Officer, Secretary and Treasurer 4 FINANCIAL STATEMENTS OF BUSINESS ACQUIRED REPORT OF INDEPENDENT ACCOUNTANTS To the Board of Directors and Stockholders of Custom Woodwork & Plastics, Inc. In our opinion, the accompanying balance sheets and the related statements of income, of stockholders' equity and of cash flows present fairly, in all material respects, the financial position of Custom Woodwork & Plastics, Inc. at December 31, 1997 and 1998 and the results of its operations and its cash flows for the years then ended, in conformity with generally accepted accounting principles. These financial statements are the responsibility of the Company's management; our responsibility is to express an opinion on these financial statements based on our audits. We conducted our audits of these statements in accordance with generally accepted auditing standards which require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements, assessing the accounting principles used and significant estimates made by management, and evaluating the overall financial statement presentation. We believe that our audits provide a reasonable basis for the opinion expressed above. PRICEWATERHOUSECOOPERS LLP Los Angeles, California October 1, 1999 F-1 CUSTOM WOODWORK & PLASTICS, INC. BALANCE SHEETS (IN THOUSANDS, EXCEPT SHARE DATA)
DECEMBER 31, JUNE 30, ------------------------ ------------ 1997 1998 1999 ----------- ----------- ------------ (UNAUDITED) ASSETS Current assets Cash and cash equivalents ....................................................... $ 452 $ 776 $ 873 Trade accounts receivable ....................................................... 209 269 642 Inventories ..................................................................... 197 434 400 Note receivable ................................................................. 50 - - ----------- ----------- ----------- Total current assets .......................................................... 908 1,479 1,915 Property, plant and equipment, net ................................................. 737 793 731 ----------- ----------- ----------- Total assets ................................................................ $ 1,645 $ 2,272 $ 2,646 ----------- ----------- ----------- ----------- ----------- ----------- LIABILITIES AND STOCKHOLDERS' EQUITY Current liabilities Trade accounts payable .......................................................... $ 15 $ 95 $ 100 Accrued expenses and other liabilities........................................... 10 17 39 ----------- ----------- ----------- Total current liabilities ..................................................... 25 112 139 ----------- ----------- ----------- Commitments and contingencies (Note 8).............................................. - - - ----------- ----------- ----------- Stockholders' equity Common stock, $1 par value, 50,000 shares authorized; 500 shares issued and outstanding at December 31, 1997 and 1998 and June 30, 1999......... 1 1 1 Retained earnings ............................................................... 1,619 2,159 2,506 ----------- ----------- ----------- Total stockholders' equity .................................................... 1,620 2,160 2,507 ----------- ----------- ----------- Total liabilities and stockholders' equity .................................. $ 1,645 $ 2,272 $ 2,646 ----------- ----------- ----------- ----------- ----------- -----------
The accompanying notes are an integral part of the financial statements. F-2 CUSTOM WOODWORK & PLASTICS, INC. STATEMENTS OF INCOME (IN THOUSANDS)
YEAR ENDED SIX MONTHS ENDED DECEMBER 31, JUNE 30, ------------------------ ------------------------ 1997 1998 1998 1999 ----------- ----------- ----------- ----------- (UNAUDITED) Sales ................................................................. $ 3,235 $ 4,480 $ 2,034 $ 4,002 Cost of sales ......................................................... 1,877 2,358 1,104 1,843 ----------- ----------- ----------- ----------- Gross profit .......................................................... 1,358 2,122 930 2,159 Operating expenses Selling, general and administrative ................................ 365 397 169 198 ----------- ----------- ----------- ----------- Income from operations ................................................ 993 1,725 761 1,961 Other income Interest income, net ............................................... 27 35 18 9 Other (expense) income, net ........................................ (5) 2 - - ----------- ----------- ----------- ----------- Net income ............................................................ $ 1,015 $ 1,762 $ 779 $ 1,970 ----------- ----------- ----------- ----------- ----------- ----------- ----------- -----------
The accompanying notes are an integral part of the financial statements. F-3 CUSTOM WOODWORK & PLASTICS, INC. STATEMENTS OF STOCKHOLDERS' EQUITY (IN THOUSANDS, EXCEPT SHARE DATA)
COMMON STOCK ---------------------- NUMBER OF RETAINED SHARES AMOUNT EARNINGS TOTAL --------- ----------- ----------- ----------- Balance, December 31, 1996 ............................................ 500 $ 1 $ 1,268 $ 1,269 Net income ......................................................... - - 1,015 1,015 Distributions to stockholders ...................................... - - (664) (664) --------- ----------- ----------- ----------- Balance, December 31, 1997 ............................................ 500 1 1,619 1,620 Net income ......................................................... - - 1,762 1,762 Distributions to stockholders ...................................... - - (1,222) (1,222) --------- ----------- ----------- ----------- Balance, December 31, 1998 ............................................ 500 1 2,159 2,160 Net income (Unaudited) ............................................. - - 1,970 1,970 Distributions to stockholders (Unaudited) .......................... - - (1,623) (1,623) --------- ----------- ----------- ----------- Balance, June 30, 1999 (Unaudited) .................................... 500 $ 1 $ 2,506 $ 2,507 --------- ----------- ----------- ----------- --------- ----------- ----------- -----------
The accompanying notes are an integral part of the financial statements. F-4 CUSTOM WOODWORK & PLASTICS, INC. STATEMENTS OF CASH FLOWS (IN THOUSANDS)
YEAR ENDED SIX MONTHS ENDED DECEMBER 31, JUNE 30, ------------------------ ------------------------ 1997 1998 1998 1999 ----------- ----------- ----------- ----------- (UNAUDITED) Cash flows from operating activities Net income ......................................................... $ 1,015 $ 1,762 $ 779 $ 1,970 Adjustments to reconcile net income to net cash provided by operating activities Depreciation ................................................... 35 40 22 17 Changes in operating assets and liabilities Trade accounts receivable ........................................ (209) (60) 158 (373) Inventories ...................................................... 2 (237) 14 34 Trade accounts payable ........................................... - 80 33 5 Accrued expenses and other liabilities ........................... - 7 15 22 ----------- ----------- ----------- ----------- Net cash provided by operating activities ...................... 843 1,592 1,021 1,675 ----------- ----------- ----------- ----------- Cash flows from investing activities Purchases of property, plant and equipment ......................... (38) (96) (64) - (Issuance) payment of note receivable .............................. (50) 50 - - ----------- ----------- ----------- ----------- Net cash used for investing activities ......................... (88) (46) (64) - ----------- ----------- ----------- ----------- Cash flows from financing activities Distributions paid to stockholders ................................. (664) (1,222) (322) (1,578) ----------- ----------- ----------- ----------- Net cash used for financing activities ......................... (664) (1,222) (322) (1,578) ----------- ----------- ----------- ----------- Net increase in cash and cash equivalents ............................. 91 324 635 97 Cash and cash equivalents at beginning of period ...................... 361 452 452 776 ----------- ----------- ----------- ----------- Cash and cash equivalents at end of period ............................ $ 452 $ 776 $ 1,087 $ 873 ----------- ----------- ----------- ----------- ----------- ----------- ----------- -----------
The accompanying notes are an integral part of the financial statements. F-5 CUSTOM WOODWORK & PLASTICS, INC. NOTES TO FINANCIAL STATEMENTS NOTE 1 - THE COMPANY Custom Woodwork & Plastics, Inc. (the "Company") designs and manufactures interior furniture components for middle- and high-end corporate aircraft. The Company operates in the U.S. market and 100% and 74% of the Company's sales for fiscal 1998 and 1997 were to Gulfstream Aerospace Corporation, respectively. The Company's customers are principally concentrated in the corporate aircraft industry. NOTE 2 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES CASH AND CASH EQUIVALENTS The Company considers all highly liquid investments with an original maturity of three months or less when purchased to be cash equivalents. It is the policy of the Company to deposit its cash and cash equivalents in federally insured financial institutions. From time to time deposits may exceed Federal Deposit Insurance Corporation ("FDIC") limits. At December 31, 1998, the Company had $476,000 on deposit in excess of the FDIC limits. INVENTORIES Inventories are valued at the lower of cost or market, cost being determined using the first-in, first-out (FIFO) method. PROPERTY, PLANT AND EQUIPMENT Property, plant and equipment are stated at cost less accumulated depreciation. Major renewals and betterments are capitalized and ordinary repairs and maintenance are charged against operations in the year incurred. Depreciation is computed using the straight-line method for buildings and building improvements and the double-declining balance method for machinery and equipment, vehicles and furniture and fixtures. Estimated useful lives are 40 years for buildings and building improvements and 5 to 7 years for machinery and equipment, vehicles and furniture and fixtures. REVENUE RECOGNITION Revenue is recognized when products are shipped. INCOME TAXES The Company elected to have its income taxed as an S corporation under provisions of the Internal Revenue Code; therefore, taxable income or loss is reported to the individual stockholders for inclusion in their tax returns, and no provision for Federal and state income tax is included in these statements. FAIR VALUE OF FINANCIAL INSTRUMENTS The carrying amounts of financial instruments including cash, receivables, accounts payable and accrued expenses and other liabilities do not significantly differ from fair values as of December 31, 1997 and 1998. USE OF ESTIMATES The preparation of financial statements in conformity with generally accepted accounting principles requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates. F-6 CUSTOM WOODWORK & PLASTICS, INC. NOTES TO FINANCIAL STATEMENTS (CONTINUED) NOTE 2 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED) UNAUDITED INTERIM RESULTS The financial information as of June 30, 1999 and for the six months ended June 30, 1998 and 1999 is unaudited. In the opinion of the Company, the unaudited financial information is presented on a basis consistent with the audited financial statements and contains all adjustments, consisting only of normal recurring adjustments, necessary for a fair statement of the results for such interim periods. The results of operations for the interim periods are not necessarily indicative of results of operations for the full year. NOTE 3 - INVENTORIES Inventories consist of the following (amounts in thousands):
DECEMBER 31, JUNE 30, ------------------------ ------------ 1997 1998 1999 ----------- ----------- ------------ (UNAUDITED) Raw material ....................................................................... $ 14 $ 24 $ 47 Work-in-process .................................................................... 183 410 353 ----------- ----------- ------------ Total inventories ............................................................... $ 197 $ 434 $ 400 ----------- ----------- ------------ ----------- ----------- ------------
NOTE 4 - PROPERTY, PLANT AND EQUIPMENT Property, plant and equipment consists of the following (amounts in thousands):
DECEMBER 31, ------------------------ 1997 1998 ----------- ----------- Land ............................................................................................ $ 75 $ 75 Buildings and building improvements ............................................................. 644 644 Machinery and equipment ......................................................................... 113 113 Vehicles ........................................................................................ 90 163 Furniture and fixtures .......................................................................... 16 16 ----------- ----------- Total cost ................................................................................... 938 1,011 Accumulated depreciation and amortization .................................................... (201) (218) ----------- ----------- Net property and equipment ................................................................... $ 737 $ 793 ----------- ----------- ----------- -----------
Depreciation expense for the years ended December 31, 1997 and 1998 was $35,000 and $40,000, respectively. NOTE 5 - LINE OF CREDIT The Company had a $200,000 revolving line of credit with a bank, collaterialized by all of the assets of the Company. Loans under the line of credit bear interest at the rate of 8.75% per annum. All borrowings under the line of credit were used for working capital purposes. The line of credit matured in February 1999 and was not renewed. As of December 31, 1997 and 1998, the Company had no borrowings outstanding under the line of credit. NOTE 6 - RELATED PARTY TRANSACTIONS At December 31, 1997, the Company had a $50,000 note receivable from a related party. The note was repaid in full in 1998. F-7 CUSTOM WOODWORK & PLASTICS, INC. NOTES TO FINANCIAL STATEMENTS (CONTINUED) NOTE 7 - EMPLOYEE BENEFIT PLANS The Company has a savings and retirement plan which qualifies under Section 401(k) of the Internal Revenue Code in which all full-time employees are eligible to participate. In accordance with the terms of the plan, employees may elect to contribute up to 15% of their annual compensation to the plan, subject to certain limitations. The Board of Directors may elect to declare a discretionary matching contribution to the Plan of 50% of all contributions made up to 6% of each employee's salary. The Company did not make any matching contributions for 1997 or 1998. NOTE 8 - COMMITMENT AND CONTINGENCIES The Company is involved in routine legal and administrative proceedings incidental to the normal conduct of business. Management believes the ultimate disposition of these matters will not have a material adverse effect on the Company's financial position, results of operations or cash flows. NOTE 9 - SUBSEQUENT EVENT In August 1999, substantially all of the Company's net assets were acquired by DeCrane Aircraft Holdings, Inc. for a purchase price of $13.3 million. F-8 UNAUDITED PRO FORMA CONSOLIDATED FINANCIAL INFORMATION BASIS OF PRESENTATION The following unaudited pro forma consolidated financial information for DeCrane Aircraft is based on its historical financial statements adjusted to reflect the 1998 Avtech, Dettmers and DLJ acquisitions and the 1999 PATS, PPI and Custom Woodwork acquisitions. For additional information on the 1998 Avtech, Dettmers and DLJ acquisitions, see the notes to DeCrane Aircraft's 1998 consolidated financial statements included in the prospectus. For additional information on the 1999 PATS, PPI and Custom Woodwork acquisitions, see the notes to DeCrane Aircraft's Form 10-Q. Unaudited pro forma consolidated statements of operations are presented for the year ended December 31, 1998 and the six months ended June 30, 1999. The statements reflect the acquisitions as if they had occurred as of January 1, 1998. The unaudited pro forma consolidated balance sheet reflects the Custom Woodwork acquisition as of June 30, 1999; all of the 1998 acquisitions and the 1999 PATS and PPI acquisitions had occurred by that date and are therefore reflected in the historical balance sheet. The pro forma adjustments are based upon available information and assumptions management believes are reasonable under the circumstances. The unaudited pro forma consolidated financial information and accompanying notes should be read in conjunction with the historical financial statements and related notes of: - - DeCrane Aircraft included in the prospectus and Form 10-Q; - - Avtech, PATS and PPI included in the prospectus; and - - Custom Woodwork included in this Form 8-K. The pro forma financial information does not purport to represent what DeCrane Aircraft's actual results of operations or actual financial position would have been if the transactions described above in fact occurred on such dates or to project DeCrane Aircraft's results of operations or financial position for any future period or date. P-1 UNAUDITED PRO FORMA CONSOLIDATED STATEMENT OF OPERATIONS YEAR ENDED DECEMBER 31, 1998
COMPANIES ACQUIRED (2) DECRANE AIRCRAFT ------------------------------------------------- HISTORICAL (1) PREVIOUSLY ----------------------- REPORTED CUSTOM PREDECESSOR SUCCESSOR ACQUISITIONS (3) WOODWORK (4) ADJUSTMENTS PRO FORMA ----------- ----------- ---------------- ------------ ----------------- ----------- (DOLLARS IN THOUSANDS) Revenues ............................. $ 90,077 $ 60,356 $ 94,059 $ 4,480 $ (133) (5) $ 248,839 Cost of sales ........................ 60,101 42,739 63,418 2,358 755 (6) 169,371 ----------- ----------- ------------ ------------ ----------- ----------- Gross profit ......................... 29,976 17,617 30,641 2,122 (888) 79,468 Selling, general and administrative expenses .......................... 15,719 10,274 11,579 397 (1,728) (7) 36,241 Nonrecurring acquisition expenses .... 3,632 - 1,479 - (5,111) (8) - Nonrecurring bonuses and employment contract termination expenses .............. - - 4,072 - (4,072) (9) - ESOP contribution .................... - - 530 - (530) (10) - Amortization of intangible assets .... 1,347 3,148 328 - 7,893 (11) 12,716 ----------- ----------- ------------ ------------ ----------- ----------- Operating income .................... 9,278 4,195 12,653 1,725 2,660 30,511 Interest expense (income) ............ 2,350 6,852 1,345 (35) 20,371 (12) 30,883 Other expenses (income) .............. 847 335 (30) (2) (600) (13) 550 ----------- ----------- ------------ ------------ ----------- ----------- Income (loss) before provision for income taxes and extraordinary item .............................. 6,081 (2,992) 11,338 1,762 (17,111) (922) Provision for income taxes (benefit) . 2,892 (2,668) 691 - 1,098 (14) 2,013 ----------- ----------- ------------ ------------ ----------- ----------- Income (loss) before extraordinary item (15) ......................... $ 3,189 $ (324) $ 10,647 $ 1,762 $ (18,209) $ (2,935) ----------- ----------- ------------ ------------ ----------- ----------- ----------- ----------- ------------ ------------ ----------- ----------- See accompanying notes to the Unaudited Pro Forma Consolidated Financial Information.
P-2 UNAUDITED PRO FORMA CONSOLIDATED STATEMENT OF OPERATIONS SIX MONTHS ENDED JUNE 30, 1999
COMPANIES ACQUIRED (2) DECRANE -------------------------------------------------- AIRCRAFT PREVIOUSLY HISTORICAL REPORTED CUSTOM (SUCCESSOR) (1) ACQUISITIONS (3) WOODWORK (4) ADJUSTMENTS PRO FORMA --------------- ---------------- ------------ ----------- ---------- (DOLLARS IN THOUSANDS) Revenues .......................................... $ 112,598 $ 13,208 $ 4,002 $ - $ 129,808 Cost of sales ..................................... 75,974 9,664 1,843 (1,093) (6) 86,388 ----------- ----------- ---------- --------- --------- Gross profit ...................................... 36,624 3,544 2,159 1,093 43,420 Selling, general and administrative expenses ...... 17,250 1,235 198 - 18,683 Nonrecurring acquisition expenses ................. - 200 - (200) (8) - Nonrecurring bonuses and employment contract termination expenses ........................... - 120 - (120) (9) - Amortization of intangible assets ................. 5,458 124 - 746 (11) 6,328 ----------- ----------- ---------- --------- --------- Operating income ................................. 13,916 1,865 1,961 667 18,409 Interest expense (income) ......................... 12,729 150 (9) 1,588 (12) 14,458 Other income ...................................... (367) (22) - - (389) ----------- ----------- ---------- --------- --------- Income (loss) before provision for income taxes and extraordinary item ............ 1,554 1,737 1,970 (921) 4,340 Provision for income taxes (benefit) .............. 1,737 (1,244) - 2,504 (14) 2,997 ----------- ----------- ---------- --------- --------- Income (loss) before extraordinary item ........... $ (183) $ 2,981 $ 1,970 $ (3,425) $ 1,343 ----------- ----------- ---------- --------- --------- ----------- ----------- ---------- --------- --------- See accompanying notes to the Unaudited Pro Forma Consolidated Financial Information.
P-3 UNAUDITED PRO FORMA CONSOLIDATED BALANCE SHEET JUNE 30, 1999
COMPANY ACQUIRED (18) DECRANE ----------------------------------- AIRCRAFT CUSTOM HISTORICAL WOODWORK (SUCCESSOR) (17) HISTORICAL (19) ADJUSTMENTS PRO FORMA ---------------- --------------- ---------------- ---------- (DOLLARS IN THOUSANDS) ASSETS Current assets Cash and cash equivalents ................................... $ 3,489 $ 873 $ (873) (20) $ 3,489 Accounts receivable, net .................................... 43,786 642 - 44,428 Inventories ................................................. 49,323 400 513 (21) 50,236 Deferred income taxes ....................................... 3,630 - - 3,630 Prepaid expenses and other current assets ................... 3,186 - - 3,186 ----------- ----------- -------- ---------- Total current assets ...................................... 103,414 1,915 (360) 104,969 ----------- ----------- -------- ---------- Property and equipment, net .................................... 35,670 731 - 36,401 ----------- ----------- -------- ---------- Other assets, principally intangibles, net Goodwill and other intangibles .............................. 295,847 - 11,668 (22) 307,515 Deferred financing costs .................................... 11,131 - - 11,131 Other assets ................................................ 713 - - 713 ----------- ----------- -------- ---------- Net other assets, principally intangibles ................. 307,691 - 11,668 319,359 ----------- ----------- -------- ---------- Total assets .......................................... $ 446,775 $ 2,646 $ 11,308 $ 460,729 ----------- ----------- -------- ---------- ----------- ----------- -------- ---------- LIABILITIES AND STOCKHOLDER'S EQUITY Current liabilities Short-term borrowings ....................................... $ 489 $ - $ - $ 489 Current portion of long-term obligations .................... 3,368 - - 3,368 Accounts payable ............................................ 9,308 100 - 9,408 Accrued expenses ............................................ 26,934 39 - 26,973 Income taxes payable ........................................ 5,107 - - 5,107 ----------- ----------- -------- ---------- Total current liabilities ................................. 45,206 139 - 45,345 ----------- ----------- -------- ---------- Long-term obligations Senior revolving credit facility ............................ 3,000 - 13,815 (23) 16,815 Senior term facility ........................................ 166,725 - - 166,725 Senior subordinated notes ................................... 100,000 - - 100,000 Other long-term obligations ................................. 1,783 - - 1,783 ----------- ----------- -------- ---------- Total long-term obligations ............................... 271,508 - 13,815 285,323 Deferred income taxes .......................................... 16,418 - - 16,418 Other long-term liabilities .................................... 4,815 - - 4,815 ----------- ----------- -------- ---------- Total long-term liabilities ............................. 292,741 - 13,815 306,556 ----------- ----------- -------- ---------- Stockholder's equity ........................................... 108,828 2,507 (2,507) (24) 108,828 ----------- ----------- -------- ---------- Total liabilities and stockholder's equity ............ $ 446,775 $ 2,646 $ 11,308 $ 460,729 ----------- ----------- -------- ---------- ----------- ----------- -------- ---------- See accompanying notes to the Unaudited Pro Forma Consolidated Financial Information.
P-4 NOTES TO UNAUDITED PRO FORMA CONSOLIDATED FINANCIAL INFORMATION (1) For the year ended December 31, 1998, reflects DeCrane Aircraft's historical results of operations for the eight months ended August 31, 1998 prior to the DLJ acquisition (predecessor) and the four months ended December 31, 1998 subsequent to the DLJ acquisition (successor). For the six months ended June 30, 1999, reflects DeCrane Aircraft's historical results of operations subsequent to the DLJ acquisition (successor). (2) Reflects the results of operations for companies acquired and DLJ acquisition adjustments for the periods not included in the historical columns. (3) Reflects the results of operations of companies acquired and previously reported in our prospectus as follows (dollars in thousands):
AVTECH (a) DETTMERS (b) PATS (c) PPI (d) TOTAL ----------- ------------ ----------- ----------- ----------- YEAR ENDED DECEMBER 31, 1998 Revenues .......................................... $ 20,984 $ 2,013 $ 33,348 $ 37,714 $ 94,059 Cost of sales ..................................... 13,267 1,454 24,321 24,376 63,418 ----------- ----------- ----------- ----------- ----------- Gross profit ...................................... 7,717 559 9,027 13,338 30,641 Selling, general and administrative expenses ...... 3,695 760 4,906 2,218 11,579 Nonrecurring acquisition expenses ................. 1,229 - 250 - 1,479 Nonrecurring bonuses and employment contract termination expenses ................... 3,592 - 480 - 4,072 ESOP contribution ................................. 300 - 230 - 530 Amortization of intangible assets ................. - - - 328 328 ----------- ----------- ----------- ----------- ----------- Operating income (loss) ........................... (1,099) (201) 3,161 10,792 12,653 Interest expense (income) ......................... (60) 13 296 1,096 1,345 Other expenses (income) ........................... (35) - - 5 (30) ----------- ----------- ----------- ----------- ----------- Income (loss) before provision for income taxes and extraordinary item ............. (1,004) (214) 2,865 9,691 11,338 Provision for income taxes (benefit) .............. (322) - 1,013 - 691 ----------- ----------- ----------- ----------- ----------- Income (loss) before extraordinary item ........... $ (682) $ (214) $ 1,852 $ 9,691 $ 10,647 ----------- ----------- ----------- ----------- ----------- ----------- ----------- ----------- ----------- ----------- SIX MONTHS ENDED JUNE 30, 1999 Revenues .......................................... $ - $ - $ 451 $ 12,757 $ 13,208 Cost of sales ..................................... - - 1,229 8,435 9,664 ----------- ----------- ----------- ----------- ----------- Gross profit (loss) ............................... - - (778) 4,322 3,544 Selling, general and administrative expenses ...... - - 291 944 1,235 Nonrecurring acquisition expenses ................. - - 200 - 200 Nonrecurring bonuses and employment contract termination expenses ................... - - 120 - 120 Amortization of intangible assets ................. - - - 124 124 ----------- ----------- ----------- ----------- ----------- Operating income (loss) ........................... - - (1,389) 3,254 1,865 Interest expense .................................. - - 23 127 150 Other expenses (income) ........................... - - 11 (33) (22) ----------- ----------- ----------- ----------- ----------- Income (loss) before provision for income taxes and extraordinary item ............. - - (1,423) 3,160 1,737 Provision for income taxes (benefit) .............. - - (1,244) - (1,244) ----------- ----------- ----------- ----------- ----------- Income (loss) before extraordinary item ........... $ - $ - $ (179) $ 3,160 $ 2,981 ----------- ----------- ----------- ----------- ----------- ----------- ----------- ----------- ----------- ----------- ----------------- Notes (a) through (d) appear on the next page.
P-5 (a) Avtech - For the year ended December 31, 1998, reflects the period from January 1, 1998 to June 25, 1998; for periods subsequent to June 25, 1998, its results are included in the historical columns. (b) Dettmers - For the year ended December 31, 1998, reflects the period from January 1, 1998 to June 29, 1998; for periods subsequent to June 29, 1998, its results are included in the historical columns. (c) PATS - For the year ended December 31, 1998, reflects the period from January 1, 1998 to December 31, 1998; for the six months ended June 30, 1999, reflects the period from January 1, 1999 to January 21, 1999; subsequent to January 21, 1999, its results are included in the historical column. (d) PPI - For the year ended December 31, 1998, reflects the period from January 1, 1999 to December 31, 1998; for the six months ended June 30, 1999, reflects the period from January 1, 1999 to April 22, 1999; subsequent to April 22, 1999, its results are included in the historical column. (4) Reflects the results of operations of Custom Woodworks for the year ended December 31, 1998 and the six months ended June 30, 1999. (5) Reflects the elimination of intercompany sales. (6) Reflects the net change in cost of sales attributable to the following (dollars in thousands):
YEAR SIX MONTHS ENDED ENDED DECEMBER 31, JUNE 30, 1998 1999 ------------ ----------- Increase (decrease) in cost of goods sold (a) ............................................ $ 1,606 $ (1,093) Decrease in depreciation expense (b) ..................................................... (658) - Elimination of intercompany sales ........................................................ (133) - Work force reductions attributable to merging the companies acquired ..................... (60) - ----------- ----------- Net increase (decrease) in cost of sales ............................................... $ 755 $ (1,093) ----------- ----------- ----------- -----------
--------------- (a) To reflect cost of goods sold based on the fair value of inventory acquired in conjunction with the PPI and Custom Woodwork acquisitions as if they were acquired on January 1, 1998. (b) To reflect a decrease in depreciation expense resulting from the fair value and remaining economic useful lives of depreciable assets acquired in connection with the DLJ acquisition. (7) Reflects the net decrease in selling, general and administrative expenses attributable to the following (dollars in thousands):
YEAR SIX MONTHS ENDED ENDED DECEMBER 31, JUNE 30, 1998 1999 ------------ ----------- Decrease in compensation expense (a) ..................................................... $ (1,775) $ - Decrease in investor relations expenses (b) .............................................. (221) - Other, net (c) ........................................................................... 268 - ----------- ---------- Net decrease in selling, general and administrative expenses ........................... $ (1,728) $ - ----------- ---------- ----------- ----------
--------------- (a) To reflect the resignation of some former employees and changes to employment agreements for remaining employees of the companies acquired. (b) To reflect the decrease in investor relations expenses associated with becoming a privately held company as a result of the DLJ acquisition. (c) To reflect an increase in depreciation expense resulting from the fair value and remaining economic useful lives of depreciable assets acquired in connection with the DLJ acquisition, net of cost savings attributable to employee benefit plans implemented at the companies acquired. P-6 (8) Reflects a reduction for nonrecurring charges incurred by DeCrane Aircraft on behalf of its stockholders related to the DLJ acquisition, and by Avtech and PATS on behalf of their stockholders related to their respective acquisitions by DeCrane Aircraft. (9) Reflects a reduction in expense attributable to employment contract termination expenses and nonrecurring bonuses awarded prior to, and in anticipation of, the acquisitions of Avtech and PATS by DeCrane Aircraft. (10) Reflects a reduction in expense attributable to the termination of the Employee Stock Ownership Plans in conjunction with the acquisitions of Avtech and PATS. (11) Reflects a net increase in amortization expense pertaining to the amortization of goodwill and other intangible assets related to the DLJ, PATS, PPI and Custom Woodwork acquisitions on a straight-line basis as follows (dollars in thousands):
AMORTIZATION EXPENSE ------------------------- YEARS YEAR SIX MONTHS INTANGIBLE ESTIMATED ENDED ENDED ASSET USEFUL DECEMBER 31, JUNE 30, AMOUNT LIFE 1998 1999 ----------- --------- ------------ ------------ Elimination of predecessor basis amortization: DeCrane Aircraft ............................................. $ (1,347) $ - PPI .......................................................... (328) (124) DLJ acquisition amortization (a): Goodwill ..................................................... $ 166,674 30 3,704 - FAA certifications ........................................... 30,391 15 1,351 - Engineering drawings ......................................... 9,138 15 406 - Assembled workforce .......................................... 6,588 7 627 - Tradenames, trademarks and patents ........................... 3,908 5 to 12 269 - Goodwill amortization attributable to 1999 acquisitions (b): PATS (c) ..................................................... 31,759 30 1,059 88 PPI (d) ...................................................... 52,896 30 1,763 588 Custom Woodwork (e) .......................................... 11,668 30 389 194 ----------- --------- Net increase in amortization ............................... $ 7,893 $ 746 ----------- --------- ----------- ---------
--------------- (a) For the year ended December 31, 1998, reflects amortization for the period from January 1, 1998 to August 31, 1998. Subsequent to August 31, 1998, amortization is included in the historical column. (b) Amortization expense may change upon completion of the final valuations of the net assets acquired. (c) For the year ended December 31, 1998, reflects amortization for the period from January 1, 1998 to December 31, 1998. For the six months ended June 30, 1999, reflects amortization for the period from January 1, 1999 to January 21, 1999; subsequent to January 21, 1999, amortization is included in the historical column. (d) For the year ended December 31, 1998, reflects amortization for the period from January 1, 1999 to December 31, 1998. For the six months ended June 30, 1999, reflects amortization for the period from January 1, 1999 to April 22, 1999; subsequent to April 22, 1999, amortization is included in the historical column. (e) Reflects amortization for the year ended December 31, 1998 and the six months ended June 30, 1999. P-7 (12) Reflects the net increase in interest expense, including deferred financing cost amortization and commitment fees, as a result of the 1998 Avtech, Dettmers and DLJ acquisitions and the 1999 PATS, PPI and Customer Woodwork acquisitions as if they all had occurred on January 1, 1998. Pro forma interest expense consists of the following (dollars in thousands):
INTEREST EXPENSE ------------------------ YEAR SIX MONTHS ENDED ENDED DECEMBER 31, JUNE 30, RATE OR TERM AMOUNT 1998 1999 ----------------- ----------- ------------ ----------- Senior credit facility (a): Revolving credit facilities ....................... LIBOR (b) + 2.75% $ (c) $ 1,621 $ 303 Term facilities: Term A .......................................... LIBOR (b) + 2.75% (d) 2,955 1,376 Term B .......................................... LIBOR (b) + 3.00% (e) 5,615 2,613 Term C .......................................... LIBOR (b) + 3.25% (f) 6,220 2,897 Senior subordinated notes ........................... 12.00% 100,000 12,000 6,000 Customer advance .................................... 7.50% (g) 380 146 Other long-term obligations ......................... 4.34% to 18.08% (h) 148 109 Deferred financing cost amortization: Senior revolving credit facilities ................ 6 years (i) 1,277 213 106 Senior term facilities: Term A .......................................... 6 years (j) 894 196 98 Term B .......................................... 7 years (j) 2,043 313 156 Term C .......................................... 7 years (j) 2,168 336 167 Senior subordinated notes ......................... 10 years (j) 5,810 581 290 Commitment fees and expenses ........................ 305 197 ----------- ----------- Pro forma interest expense (k) .................. $ 30,883 $ 14,458 ----------- ----------- ----------- -----------
--------------- (a) Reflects the senior credit facility established in conjunction with the DLJ acquisition, as amended for the PATS, PPI and Custom Woodwork acquisitions, as if all events had occurred January 1, 1998. (b) Calculations based on the historical LIBOR rates charged during the respective periods. The weighted average historical LIBOR rates were as follows:
YEAR SIX MONTHS ENDED ENDED DECEMBER 31, JUNE 30, 1998 1999 ------------ ---------- Revolving credit facilities .......................................................... 5.593% 4.978% Term A facility ...................................................................... 5.694% 5.147% Term B facility ...................................................................... 5.666% 5.124% Term C facility ...................................................................... 5.669% 5.121%
(c) Reflects revolving credit facility borrowings for the DLJ, PATS, PPI and Custom Woodwork acquisitions as of January 1, 1998. The pro forma weighted average borrowings outstanding under the revolving credit facilities were $19.5 million for the twelve months ended December 31, 1998 and $7.9 million for the six months ended June 30, 1999. (d) Reflects Term A facility borrowings of $35.0 million for the DLJ acquisition as of January 1, 1998 reduced by quarterly principal payments of $438,000 commencing March 31, 1999. The pro forma weighted average borrowings outstanding under the Term A facility were $35.0 million for the twelve months ended December 31, 1998 and $34.9 million for the six months ended June 30, 1999. (e) Reflects Term B facility borrowings of $65.0 million for the DLJ and PATS acquisitions as of January 1, 1998 reduced by quarterly principal payments of $163,000 commencing March 31, 1998. The pro forma weighted average borrowings outstanding under the Term B facility were $64.8 million for the twelve months ended December 31, 1998 and $64.3 million for the six months ended June 30, 1999. P-8 (f) Reflects Term C facility borrowings of $70.0 million for the PPI acquisition and to refinance acquisition related revolving credit facility borrowings as of January 1, 1998 reduced by quarterly principal payments of $175,000 commencing March 31, 1998. The pro forma weighted average borrowings outstanding under the Term C facility were $69.7 million for the twelve months ended December 31, 1998 and $69.2 million for the six months ended June 30, 1999. (g) Reflects a $5.0 million customer advance related to the PATS acquisition as of January 1, 1998 reduced by principal payments of $975,000 on November 30, 1998 and $1.2 million on May 31, 1999. The pro forma weighted average advance outstanding was $4.9 million for the twelve months ended December 31, 1998 and $3.8 million for the six months ended June 30, 1999. (h) Reflects historical interest expense related to capital lease obligations and equipment term debt financing. (i) Deferred financing costs are amortized on a straight-line basis over the term of the agreement. (j) Deferred financing costs are amortized using the effective interest method. (k) A 0.125% change in the interest rates charged on variable rate borrowings would change interest expense by $245,000 for the twelve months ended December 31, 1998 and $121,000 for the six months ended June 30, 1999. Income (loss) before extraordinary item would change by $148,000 for the twelve months ended December 31, 1998 and $73,000 for the six months ended June 30, 1999. (13) Reflects adjustment for nonrecurring charges associated with a terminated debt offering in June 1998. Such offering was terminated upon initiation of the DLJ acquisition. (14) Represents an increase in the provision for income taxes as a result of a change in pro forma taxable income, a provision for income taxes on the income of Dettmers, PPI and Custom Woodwork which were taxed as S Corporations prior to their acquisitions, and elimination of the $2.6 million one time benefit caused by reversal of DeCrane Aircraft's deferred tax valuation allowance. The effective tax rate differs from the U.S. federal statutory rate due to goodwill amortization related to acquisitions not deductible for income tax purposes and state income taxes. (15) In conjunction with the DLJ acquisition, deferred financing costs of $347,000, net of income tax benefit, were written off as an extraordinary charge as a result of the termination of DeCrane Aircraft's prior senior credit facility. In conjunction with the sale of the senior subordinated notes described in the prospectus, deferred financing costs of $1.9 million, net of income tax benefit, were written off as an extraordinary charge as a result of the termination of the bridge notes. These amounts have not been reflected in the unaudited pro forma consolidated statement of operations for the year ended December 31, 1998. (16) Supplemental pro forma financial information is as follows (dollars in thousands):
YEAR SIX MONTHS ENDED ENDED DECEMBER 31, JUNE 30, 1998 1999 ------------ ---------- Net cash provided by (used for) Operating activities ................................................................... $ 2,216 $ 12,977 Investing activities ................................................................... (204,031) (6,091) Financing activities ................................................................... 203,492 (8,943) EBITDA (a) ............................................................................... 54,528 27,463 Depreciation and amortization (b) ........................................................ 17,963 9,054 Capital expenditures Paid in cash ........................................................................... 6,789 3,169 Financed with capital lease obligations ................................................ 164 1,323 Cash interest expense .................................................................... 29,244 13,641 Ratio of earnings to fixed charges (c) ................................................... - 1.3x
--------------- Notes (a) through (c) appear on the next page. P-9 (a) EBITDA equals operating income plus depreciation, amortization, parent company management fees and certain non-cash and acquisition related charges. EBITDA is not a measure of performance or financial condition under generally accepted accounting principles. EBITDA is not intended to represent cash flow from operations and should not be considered as an alternative to income from operations or net income computed in accordance with generally accepted accounting principles, as an indicator of our operating performance, as an alternative to cash flow from operating activities or as a measure of liquidity. The funds depicted by EBITDA are not available for our discretionary use due to funding requirements for working capital, capital expenditures, debt service, income taxes and other commitments and contingencies. We believe that EBITDA is a standard measure of liquidity commonly reported and widely used by analysts, investors and other interested parties in the financial markets. However, not all companies calculate EBITDA using the same method and the EBITDA numbers set forth above may not be comparable to EBITDA reported by other companies. (b) Reflects depreciation and amortization of plant and equipment, goodwill and other intangible assets. Excludes amortization of deferred financing costs and debt discounts, which are classified as a component of interest expense. (c) For purposes of calculating the earnings to fixed charges ratio, earnings represent net income before income taxes, minority interest in the income of majority-owned subsidiaries, extraordinary items and fixed charges. Fixed charges consist of: - interest, whether expensed or capitalized; - amortization of debt expense and discount relating to any indebtedness, whether expensed or capitalized; and - one-third of rental expense under operating leases which is considered to be a reasonable approximation of the interest portion of such expense. There was a $792,000 deficiency of earnings to fixed charges for the year ended December 31, 1998. (17) Reflects DeCrane Aircraft's financial position subsequent to the 1998 Avtech, Dettmers and DLJ acquisitions and the 1999 PATS and PPI acquisitions. (18) Reflects DeCrane Aircraft's purchase of substantially all of the assets, subject to accounts payable and accrued liabilities assumed, of Custom Woodwork in August 1999. Sources and uses of funds for the acquisition, had it occurred on June 30, 1999, are as follows (dollars in thousands):
AMOUNT ----------- SOURCES Senior revolving credit facility borrowings ........................................................... $ 13,815 ----------- ----------- USES Purchase of assets, net of accounts payable and accrued liabilities assumed ........................... $ 13,315 Estimated acquisition fees and expenses ............................................................... 500 ----------- Total uses .......................................................................................... $ 13,815 ----------- -----------
(19) Reflects the financial position of Custom Woodworks as of June 30, 1999. (20) Reflects the elimination of Custom Woodwork's cash and cash equivalents not acquired. (21) Reflects the increase in Custom Woodwork's inventory to its estimated fair value as of the acquisition date. (22) Reflects the excess of the Custom Woodwork purchase price over the fair value of the assets acquired. For purposes of this pro forma consolidated financial information, we allocated the excess purchase price to goodwill and amortized it on a straight-line basis over 30 years. Such allocation is preliminary and may change upon the completion of the final valuations of the assets acquired. (23) Reflects the senior credit facility borrowings for the Custom Woodwork acquisition. The terms of the senior credit facility are described in our historical consolidated financial statements included in the prospectus. (24) Reflects the elimination of Custom Woodwork's stockholders' equity upon acquisition. P-10 EX-13.20-1 2 EXHIBIT 13.20.1 EXHIBIT 13.20.1 ARTICLES OF INCORPORATION OF PCI ACQUISITION CO., INC. FIRST. The name of the Corporation is: PCI Acquisition Co., Inc. SECOND. The address of its registered office in the State of Kansas is 515 South Kansas, Topeka, County of Shawnee, Kansas 66603. The name of its resident agent at such address is the Corporation Company, Inc. THIRD. The nature of the business or purposes to be conducted or promoted by the Corporation is to engage in any lawful act or activity for which corporations may be organized under the Kansas general corporation code. In addition to the powers and privileges conferred upon the Corporation by law and those incidental thereto, the Corporation shall possess and may exercise all the powers and privileges which are necessary or convenient to the conduct, promotion or attainment of the business or purposes of the Corporation. FOURTH. (a) The total number of shares of stock which the Corporation shall have authority to issue is One Thousand (1,000) shares of common stock, of the par value of $0.01 per share. The Board of Directors is authorized to provide by resolution or resolutions for the issuance of shares of stock of any class or of any series of any class at any time and from time to time and, by filing a certificate of designations in the manner prescribed under the laws of the State of Kansas, to fix and, if no shares of stock have been issued of a class or series of stock, amend the voting powers, full or limited, or no voting powers, and the designations, preferences and relative, participating, optional or other special rights, if any, and qualifications, limitations or restrictions thereof. Unless otherwise provided in any such resolution or resolutions, the number of shares of stock of any such series to which such resolution or resolutions apply may be increased (but not above the total number of authorized shares of the class or series) or decreased (but not below the number of shares thereof then outstanding) by filing a certificate of designations in the manner prescribed under the laws of the State of Kansas. 1 (b) No holder of any shares of stock of the Corporation of any class shall be entitled as such, as a matter of right, to subscribe for or purchase any shares of stock of the Corporation of any class, whether now or hereafter authorized or whether issued for cash, property or services or as a dividend or otherwise, or to subscribe for or purchase any obligations, bonds, notes, debentures, other securities or stock convertible into shares of stock of the Corporation of any class or carrying or evidencing any right to purchase shares of stock of any class. FIFTH. The name and mailing address of the incorporator are as follows:
NAME ADDRESS Craig L. Evans 1201 Walnut, Suite 2800 Kansas City, Missouri 64106
SIXTH. The number of directors of the Corporation shall be fixed by, or in the manner provided in, the Bylaws, The names and mailing addresses of the persons who are to serve as the initial directors of the Corporation until the first annual meeting of the stockholders, until such director's successor is duly elected and qualified, or until such director's earlier resignation or removal, are as follows:
NAMES ADDRESSES R. Jack DeCrane 2361 Rosecrans Avenue, Suite 180 El Segundo, California 90245 Richard J. Kaplan 2361 Rosecrans Avenue, Suite 180 El Segundo, California 90245
SEVENTH. Elections of directors need not be by ballot unless the Bylaws of the Corporation so provide. EIGHTH. The original Bylaws of the Corporation shall be adopted in any manner provided by law. Thereafter, the Bylaws of the Corporation may from time to time be amended or repealed, or new Bylaws may be adopted, in any of the following ways: (i) by the holders of a majority of the outstanding shares of stock of the Corporation entitled to vote thereon, or (ii) by a majority of the full Board of Directors, and any change so made by the stockholders may thereafter be further changed by a majority of the directors; provided, however, that the power of the Board of Directors to amend or repeal the Bylaws, or to adopt new Bylaws, (A) may be denied as to any Bylaws or portion thereof by the stockholders if at the time of enactment the stockholders shall so expressly provide, and (B) shall not divest the stockholders of their power, nor limit their power, to amend or repeal the Bylaws, or to adopt new Bylaws. 2 NINTH. The Corporation may agree to the terms and conditions upon which any director, officer, employee or agent accepts his office or position and in its Bylaws, by contract or in any other manner may agree to indemnify and protect any director, officer, employee or agent of the Corporation, or any person who serves at the request of the Corporation as a director, officer, employee or agent of another corporation, partnership, joint venture, trust, employee benefit plan or other enterprise, to the fullest extent permitted by the laws of the State of Kansas. Without limiting the generality of the foregoing provisions of this Article NINTH, to the fullest extent permitted or authorized by the laws of the State of Kansas, including, without limitation, the provisions of subsection (b)(8) of K. S.A. 17-6002 as now in effect and as it may from time to time hereafter be amended, no director of the Corporation shall be personally liable to the Corporation or to its stockholders for monetary damages for breach of fiduciary duty as a director. Any repeal or modification of the limitation of liability provided by the immediately preceding sentence shall not adversely affect any right or protection of a director of the Corporation existing hereunder with respect to any act or omission occurring prior to or at the time of such repeal or modification. TENTH. Whenever a compromise or arrangement is proposed between this Corporation and its creditors or any class of them or between this Corporation and its stockholders or any class of them, any court of competent jurisdiction within the State of Kansas, on the application in a summary way of this Corporation or of any creditor or stockholder thereof or on the application of any receiver or receivers appointed for this Corporation under the provisions of K.S.A. 17-6901 and amendments thereto, or on the application of trustees in dissolution or of any receiver or receivers appointed for this Corporation under the provisions of K.S.A. 17-6808 and amendments thereto, may order a meeting of the creditors or class of creditors, or of the stockholders or class of stockholders of this Corporation, as the case may be, to be summoned in such manner as such court directs. If a majority in number representing three-fourths in value of the creditors or class of creditors, or of the stockholders or class of stockholders of this Corporation, as the case may be, agree to any compromise or arrangement and to any reorganization of this Corporation as consequence of such compromise or arrangement and the reorganization, if sanctioned by the court to which the application has been made, shall be binding on all the creditors or class of creditors, or on all the stockholders or class of stockholders, of this Corporation, as the case may be, and also on this Corporation. ELEVENTH. Except as may be otherwise provided by statute, the Corporation shall be entitled to treat the registered holder of any shares of the Corporation as the owner of such shares and of all rights derived from such shares for all purposes, and the Corporation shall not be obligated to recognize any equitable or other claim to or interest in such shares or rights on the part of any other person, including, but without limiting the generality of the term "person" to, a purchaser, pledgee, assignee or transferee of such shares or rights, unless and until such person becomes the registered holder of such shares. The foregoing shall apply whether or not the Corporation shall have either actual or constructive notice of the claim by or the interest in such person. 3 TWELFTH. The books of the Corporation may be kept (subject to any provision contained in the statutes of the State of Kansas) outside the State of Kansas at such place or places as may be designated from time to time by the Board of Directors or in the Bylaws of the Corporation. THIRTEENTH. The Corporation reserves the right to amend, alter, change or repeal any provision contained in these Articles of Incorporation in the manner now or hereafter prescribed by statute, and all rights conferred upon stockholders herein are granted subject to this reservation. The undersigned, for the purpose of forming a corporation under the Kansas general corporation code, does hereby execute these Articles, and does hereby declare and certify that this is his act and deed and the facts herein stated are true, and accordingly has executed these Articles of Incorporation as of September 29, 1999. /s/ Craig L. Evans ---------------------------- Craig L. Evans, Incorporator STATE OF MISSOURI ) ) SS, COUNTY OF JACKSON ) This instrument was acknowledged before me this 29th day of September, 1999, by Craig L. Evans, /s/ Erin Dudley ---------------------------------------- Notary Public in and for said County and State (NOTARIAL SEAL) My commission expires: February 5, 2001 ------------------------------------ 4 EX-13.20-2 3 EXHIBIT 13.20.2 EXHIBIT 13.20.2 BYLAWS OF PCI ACQUISITION CO., INC. ARTICLE 1 Offices Section 1.1 REGISTERED OFFICE. The location of the registered office and the name of the registered agent of the Corporation in the State of Kansas shall be as stated in the Articles of Incorporation or as shall be determined from time to time by resolution of the Board of Directors and on file in the appropriate offices of the State of Kansas pursuant to applicable provisions of law. Section 1.2 OTHER OFFICES. The Corporation may also have offices at such other places both within and without the State of Kansas as the Board of Directors may from time to time determine or the business of the Corporation may require. ARTICLE 2 Meetings of Stockholders Section 2.1 ANNUAL MEETINGS. Annual meetings of stockholders shall be held on a date set by the Board of Directors in each year for the purpose of electing directors and transacting such other proper business as may come before the meeting. Section 2.2 SPECIAL MEETINGS. Special meetings shall by held solely for the purpose or purposes specified in the notice of meeting. Section 2.3 TIME AND PLACE OF MEETINGS. Subject to the provisions of Section 2.1 each meeting of stockholders shall be held on such date, at such hour and at such place, either within or without the State of Kansas, as shall be fixed by the Board of Directors or in the notice of the meeting or, in the case of an adjourned meeting, as announced at the meeting at which the adjournment is taken. Section 2.4 NOTICE OF MEETINGS. A written notice of each meeting of stockholders, stating the place, date and hour of the meeting and, in the case of a special meeting, the purpose or purposes for which the meeting is called, shall be given either personally or by mail to each stockholder entitled to vote at the meeting. Unless otherwise provided by statute, the notice shall be given not less than ten nor more than sixty days before the date of the meeting and, if mailed, shall be deposited in the United States mail, postage prepaid, directed to the stockholder at his address as it appears on the records of the Corporation. No notice need be given to any person with whom communication is unlawful, nor shall there be any duty to apply for any permit or license to give notice to any such person. If the time and place of an adjourned meeting of stockholders are announced at the meeting at which the adjournment is taken, no notice need be given of the adjourned meeting unless that adjournment is for more than thirty days or unless, after the adjournment, a new record date is fixed for the adjourned meeting. Section 2.5 WAIVER OF NOTICE. Anything herein to the contrary notwithstanding, notice of any meeting of stockholders need not be given to any stockholder who in person or by proxy shall have waived in writing notice of the meeting, either before or after such meeting, or who shall attend the meeting in person or by proxy, unless he attends for the express purpose of objecting, at the beginning of the meeting, to the transaction of any business because the meeting is not lawfully called or convened. Section 2.6 QUORUM AND MANNER OF ACTING. Subject to the provisions of these bylaws, the articles of incorporation and statutes as to the vote that is required for a specified action, the presence in person or by proxy of the holders of 50% of the outstanding shares of the Corporation entitled to vote at any meeting of stockholders, plus one share, shall constitute a quorum for the transaction of business, and the vote in person or by proxy of the holders of a majority of the shares constituting such quorum shall be binding on all stockholders of the Corporation. A majority of the shares present in person or by proxy and entitled to vote may, regardless of whether or not they constitute a quorum, adjourn the meeting to another time and place. Any business which might have been transacted at the original meeting may be transacted at any adjourned meeting at which a quorum is present. Section 2.7 VOTING. Stockholders shall be entitled to cumulative voting at all elections of directors to the extent provided in or pursuant to the articles of incorporation. Stockholders may vote by proxy but no proxy shall be voted or acted upon after three years from its date, unless the proxy provides for a longer period. Section 2.8 INSPECTION OF ELECTION. (a) The Board of Directors shall appoint an inspector of election to act at each meeting of stockholders and any adjournment thereof. If an inspector of election is not so appointed, or the person appointed as inspector fails or refuses to act, the chairman of the meeting shall appoint an inspector of election. (b) The inspector of election shall determine the outstanding stock of the Corporation and the voting power of each class and series, the stock represented at the meeting and the existence of a quorum, shall receive votes or ballots, shall count and tabulate all votes and shall determine the result; and in connection therewith, the inspector shall determine the authority, 2 validity and effect of proxies, hear and determine all challenges and questions, and do such other acts as may be proper to conduct the election or vote with fairness to all stockholders. (c) The inspector of election shall make a report in writing of any challenge or question or other matter determined by him and shall execute a certificate of any fact found in connection therewith. Any such report or certificate shall be filed with the record of the meeting. Section 2.9 LIST OF STOCKHOLDERS. A complete list of the stockholders entitled to vote at each meeting of stockholders, arranged in alphabetical order, and showing the address and number of shares registered in the name of each stockholder, shall be prepared and made available for examination during regular business hours by any stockholder for any purpose germane to the meeting. The list shall be available for such examination at the place where the meeting is to be held for a period of not less than ten days prior to the meeting and during the whole time of the meeting. Section 2.10 ACTION WITHOUT A MEETING. Any action required to be taken at any annual or special meeting of stockholders, or any action which may be taken at any annual or special meeting of stockholders, may be taken without a meeting, without prior notice and without a vote, if a consent in writing, setting forth the action so taken, shall be signed by the holders of outstanding stock having not less than the minimum number of votes that would be necessary to authorize or take such action at a meeting at which all shares entitled to vote thereon were present and voted. ARTICLE 3 Board of Directors Section 3.1 NUMBER. The number of directors shall be no less than one and no more than five, and shall be set by the Board of Directors by adoption of a resolution with respect thereto. Section 3.2 ORGANIZATION MEETINGS. As promptly as practicable after each annual meeting of stockholders, an organization meeting of the Board of Directors shall be held for the purpose of organization and the transaction of other business. Section 3.3 REGULAR MEETINGS. Regular meetings of the Board of Directors may be held at such place and time as may be designated by the Board. Section 3.4 SPECIAL MEETINGS. Special meetings of the Board of Directors may be called by the Chairman, the President, any three directors, or, if less than three, the remaining directors. 3 Section 3.5 BUSINESS OF MEETINGS. Except as otherwise expressly provided in these bylaws, any and all business may be transacted at any meeting of the Board of Directors; PROVIDED, that if so stated in the notice of meeting, the business transacted at a special meeting shall be limited to the purpose or purposes specified in the notice. Section 3.6 TIME AND PLACE OF MEETINGS. Subject to the provisions of Section 3.4 each meeting of the Board of Directors shall be held on such date, at such hour and in such place as fixed by the Board or in the notice or waivers of notice of the meeting or, in the case of an adjourned meeting, as announced at the meeting at which the adjournment is taken. Section 3.7 NOTICE OF MEETINGS. No notice need be given of any organization or regular meeting of the Board of Directors for which the date, hour and place have been fixed by the Board. Notice of the date, hour and place of all other organization and regular meetings, and of all special meetings, shall be given to each director personally, by telephone or telegraph or by mail. If by mail, the notice shall be deposited in the United States mail, postage prepaid, directed to the director at his residence or usual place of business as the same appear on the books of the Corporation not later than five days before the meeting. If given by telegraph, the notice shall be directed to the director at his residence or usual place of business as the same appear on the books of the Corporation not later than at any time during the day before the meeting. If given personally or by telephone, the notice shall be given not later than the day before the meeting. Section 3.8 WAIVER OF NOTICE. Anything herein to the contrary notwithstanding, notice of any meeting of the Board of Directors need not be given to any director who shall have waived in writing notice of the meeting, either before or after the meeting, or who shall attend such meeting, unless he attends for the express purpose of objecting, at the beginning of the meeting, to the transaction of any business because the meeting is not lawfully called or convened. Section 3.9 ATTENDANCE BY TELEPHONE. Directors may participate in meetings of the Board of Directors by means of conference telephone or similar communications equipment by means of which all directors participating in the meeting can hear one another, and such participation shall constitute presence in person in the meeting. Section 3.10 QUORUM AND MANNER OF ACTING. A majority of the total number of directors at the time provided for pursuant to Section 3.1 shall constitute a quorum for the transaction of business at any meeting of the Board of Directors and, except as otherwise provided in these bylaws, in the articles of incorporation or by statute, the act of a majority of the directors present at any meeting at which a quorum is present shall be the act of the Board. A majority of the directors present at any meeting, regardless of whether or not they constitute a quorum, may adjourn the meeting to another time or place. Any business which might have been transacted at the original meeting may be transacted at any adjourned meeting at which a quorum is present. 4 Section 3.11 ACTION WITHOUT A MEETING. Any action which could be taken at a meeting of the Board of Directors may be taken without a meeting if all of the directors consent to the action in writing and the writing or writings are filed with the minutes of the Board. Section 3.12 RESIGNATION OF DIRECTORS. Any director may resign at any time upon written notice to the Corporation. The resignation shall become effective at the time specified in the notice and, unless otherwise provided in the notice, acceptance of the resignation shall not be necessary to make it effective. Section 3.13 VACANCIES AND REMOVAL. Vacancies in the Board of Directors, except vacancies created by removal of a director by the shareholders, may be filled by a majority of the remaining directors, though less than a quorum, or by a sole remaining director, and each director so elected shall hold office until a successor is elected at an annual or a special meeting of the shareholders in accordance with these Bylaws. The shareholders may elect a director or directors at any time to fill any vacancy or vacancies not filled by the directors. If the Board of Directors accepts the resignation of a director tendered to take effect at a future time, the Board or the shareholders may elect a successor to take office when the resignation is to become effective. No reduction of the authorized number of directors shall have the effect of removing any director prior to the expiration of such director's term of office. A vacancy or vacancies in the Board of Directors shall be deemed to exist in case of the death, resignation or removal of any director, or if the authorized number of directors is increased, or if the shareholders fail at any annual or special meeting of shareholders at which any director or directors are elected to elect the full authorized number of directors to be voted for at that meeting. The Board may declare vacant the office of a director who has been declared of unsound mind by an order of court or convicted of a felony. All the directors, or any individual director or directors, may be removed from office, without cause, by the vote of the shareholders having a majority of the voting power entitling them to elect directors in place of those to be removed. ARTICLE 4 Committees of the Board of Directors Section 4.1 EXECUTIVE COMMITTEE. By resolution adopted by an affirmative vote of the majority of the whole Board of Directors, the Board may appoint an Executive Committee consisting of the chief executive officer of the Corporation, EX OFFICIO, and two or more other directors and, if deemed desirable, one or more directors as alternate members who may replace any absentee or disqualified member at any meeting of the Executive Committee. If so 5 appointed, the Executive Committee shall, when the Board is not in session, have all the power and authority of the Board in the management of the business and affairs of the Corporation not reserved to the Board by Section 4.3 including, but not limited to, the power and authority to declare dividends, to authorize the issuance of stock and to adopt a certificate of ownership and merger. The Executive Committee shall keep a record of its acts and proceedings and shall report the same from time to time to the Board of Directors. Section 4.2 OTHER COMMITTEES. By resolution adopted by an affirmative vote of the majority of the whole Board of Directors, the Board may from time to time appoint such other committees of the Board, consisting of one or more directors and, if deemed desirable, one or more directors who shall act as alternate members and who may replace any absentee or disqualified member at any meeting of the committee, and may delegate to each such committee any of the powers and authority of the Board in the management of the business and affairs of the Corporation not reserved to the Board pursuant to Section 4.3. Each such committee shall keep a record of its acts and proceedings. Section 4.3 POWERS RESERVED TO THE BOARD. No committee of the Board shall take any action to amend the articles of incorporation (except that a committee may, to the extent authorized in the resolution or resolutions providing for the issuance of shares of stock adopted by the Board, fix any of the preferences or rights of such shares relating to dividends, redemption, dissolution, any distribution of assets of the Corporation or the conversion into, or the exchange of such shares for, shares of any other class or classes or any other series of the same or any other class or classes of stock of the Corporation) or these bylaws, adopt any agreement to merge or consolidate the Corporation, or recommend to the stockholders a sale, lease or exchange of all or substantially all of the property and assets of the Corporation, a dissolution of the Corporation or a revocation of a dissolution of the Corporation; nor shall any committee of the Board take any action which is required in these bylaws, in the articles of incorporation or by statute to be taken by a vote of a specified proportion of the whole Board of Directors. Section 4.4 ELECTION OF COMMITTEE MEMBERS; VACANCIES. So far as practicable, members of the committees of the Board and their alternates (if any) shall be appointed at each organization meeting of the Board of Directors and, unless sooner discharged by an affirmative vote of the majority of the whole Board, shall hold office until the next organization meeting of the Board and until their respective successors are appointed. In the absence or disqualification of any member of a committee of the Board, the member or members (including alternates) present at any meeting of the committee and not disqualified from voting, whether or not he or they constitute a quorum, may unanimously appoint another director to act at a meeting in place of any absent or disqualified member. Vacancies in committees of the Board created by death, resignation or removal may be filled by an affirmative vote of a majority of the whole Board of Directors. 6 Section 4.5 MEETINGS. Each committee of the Board may provide for regular meetings of such committee. Special meetings of each committee may be called by any two members of the committee (or, if there is only one member, by that member in concert with the chief executive officer) or by the chief executive officer of the Corporation. The provisions of Section 3 regarding the business, time and place, notice and waivers of notice of meetings, attendance at meetings and action without a meeting shall apply to each committee of the Board, except that the references in such provisions to the directors and the Board of Directors shall be deemed respectively to be references to the members of the committee and to the committee. Section 4.6 QUORUM AND MANNER OF ACTING. A majority of the members of any committee of the Board shall constitute a quorum for the transaction of business at meetings of the committee, and the act of a majority of the members present at any meeting at which a quorum is present shall be the act of the committee. A majority of the members present at any meeting, regardless of whether or not they constitute a quorum, may adjourn the meeting to another time or place. Any business which might have been transacted at the original meeting may be transacted at any adjourned meeting at which a quorum is present. ARTICLE 5 Officers Section 5.1 ELECTION AND APPOINTMENT. The elected officers of the Corporation shall consist of a Chief Executive Officer, one or more Vice Presidents, a Treasurer, a Secretary and such other elected officers as shall from time to time be designated by the Board of Directors. The Board shall designate from among such elected officers a chief executive officer and a chief financial officer of the Corporation, and may from time to time make, or provide for, other designations it deems appropriate. The Board may also appoint, or provide for the appointment of, such other officers and agents as may from time to time appear necessary or advisable in the conduct of the affairs of the Corporation. Any number of offices may be held by the same person, except no person may at the same time be both the Chief Executive Officer and the chief financial officer. Section 5.2 DUTIES OF CHIEF EXECUTIVE OFFICER. The chief executive officer of the Corporation shall preside at all meetings of stockholders and (unless the Board of Directors elects a separate Chairman) at all meetings of the Board of Directors and the Executive Committee and, except to the extent otherwise provided in these bylaws or by the Board, shall have general authority to execute any and all documents in the name of the Corporation and general and active supervision and control of all of the business and affairs of the Corporation. In the absence of the chief executive officer, his duties shall be performed and his powers may be exercised by the chief financial officer or by such other officer as shall be designated either by the chief executive officer in writing or (failing such designation) by the Executive Committee or Board of Directors. 7 Section 5.3 DUTIES OF OTHER OFFICERS. The other officers of the Corporation shall have such powers and duties not inconsistent with these bylaws as may from time to time be conferred upon them in or pursuant to resolutions of the Board of Directors, and shall have such additional powers and duties not inconsistent with such resolutions as may from time to time be assigned to them by any competent superior officer. The Board shall assign to one or more of the officers of the Corporation the duty to record the proceedings of the meetings of the stockholders and the Board of Directors in a book to be kept for that purpose. Section 5.4 TERM OF OFFICE AND VACANCY. So far as practicable, the elected officers shall be elected at each organization meeting of the Board, and shall hold office until the next organization meeting of the Board and until their respective successors are elected and qualified. If a vacancy shall occur in any elected office, the Board of Directors may elect a successor for the remainder of the term. Appointed officers shall hold office at the pleasure of the Board. Any officer may resign by written notice to the Corporation. Section 5.5 REMOVAL OF ELECTED OFFICERS. Elected officers may be removed at any time, either for or without cause, by the affirmative vote of a majority of the whole Board of Directors at a meeting called for that purpose. Section 5.6 COMPENSATION OF ELECTED OFFICERS. The compensation of all elected officers of the Corporation shall be fixed from time to time by the Board of Directors. ARTICLE 6 Shares and Transfer of Shares Section 6.1 CERTIFICATES. Every stockholder shall be entitled to a certificate signed by the Chairman or Vice Chairman of the Board of Directors, or the Chief Executive Officer or the President, and by the Chief Financial Officer or the Treasurer or an Assistant Treasurer, or the Secretary or an Assistant Secretary of the Corporation, certifying the class and number of shares owned by him in the Corporation; PROVIDED that, any and all signatures on a certificate may be a facsimile. In case any officer, transfer agent or registrar who has signed or whose facsimile signature has been placed upon a certificate shall have ceased to be such officer, transfer agent or registrar before such certificate is issued, it may be issued by the Corporation with the same effect as if he or it were such officer, transfer agent or registrar at the date of issue. Section 6.2 TRANSFER AGENTS AND REGISTRARS. The Board of Directors may, in its discretion, appoint one or more responsible banks or trust companies in the City of New York or in such other city or cities (if any) as the Board may deem advisable, from time to time, to act as transfer agents and registrars of shares of the Corporation; and, when such appointments shall have been made, no certificate for shares of the Corporation shall be valid until countersigned by one of such transfer agents and registered by one of such registrars. 8 Section 6.3 TRANSFERS OF SHARES. Shares of the Corporation may be transferred by delivery of the certificates therefor, accompanied either by an assignment in writing on the back of the certificates or by written power of attorney to sell, assign and transfer the same, signed by the record holder thereof; but no transfer shall affect the right of the Corporation to pay any dividend upon the shares to the holder of record thereof, or to treat the holder of record as the holder in fact thereof for all purposes, and no transfer shall be valid, except between the parties thereto, until such transfer shall have been made upon the books of the Corporation. Section 6.4 LOST CERTIFICATES. In case any certificate for shares of the Corporation shall be lost, stolen or destroyed, the Board of Directors, in its discretion, or any transfer agent thereunto duly authorized by the Board, may authorize the issue of a substitute certificate in place of the certificate so lost, stolen or destroyed, and may cause such substitute certificate to be countersigned by the appropriate transfer agent (if any) and registered by the appropriate registrar (if any); PROVIDED that, in each such case, the applicant for a substitute certificate shall furnish to the Corporation and to such of its transfer agents and registrars as may require the same, evidence to their satisfaction, in their discretion, of the loss, theft or destruction of such certificate and of the ownership thereof, and also such security or indemnity as may by them be required. Section 6.5 RECORD DATES. In order that the Corporation may determine the stockholders entitled to notice of or to vote at any meeting of stockholders, or any adjournment thereof, or to express consent to action in writing without a meeting, or entitled to receive payment of any dividend or other distribution or allotment of any rights, or entitled to exercise any rights in respect of any change, conversion or exchange of shares or for the purpose of any other lawful action, the Board of Directors may fix, in advance, a record date which shall be not more than sixty nor less than ten days before the date of any meeting of stockholders, and not more than sixty days prior to any other action. In such case, those stockholders, and only those stockholders, who are stockholders of record on the date fixed by the Board of Directors shall, notwithstanding any subsequent transfer of shares on the books of the Corporation, be entitled to notice of and to vote at such meeting of stockholders, or any adjournment thereof, or to express consent to such corporate action in writing without a meeting, or entitled to receive payment of such dividend or other distribution or allotment of rights, or entitled to exercise rights in respect of any such change, conversion or exchange of shares or to participate in any such other lawful action. ARTICLE 7 Miscellaneous Section 7.1 FISCAL YEAR. The fiscal year of the Corporation shall be fixed by resolution of the Board of Directors. 9 Section 7.2 SIGNATURE ON NEGOTIABLE INSTRUMENTS. All bills, notes, checks or other instruments for the payment of money shall be signed or countersigned in such manner as from time to time may be prescribed by resolution of the Board of Directors. Section 7.3 INDEMNIFICATION OF OFFICERS, DIRECTORS, EMPLOYEES, AGENTS AND FIDUCIARIES; INSURANCE. (a) The Corporation may indemnify, in accordance with and to the full extent permitted by the laws of the State of Kansas, as such laws may be amended from time to time, and shall so indemnify to the full extent permitted by such laws, any person (and the heirs and legal representatives of any such person) made or threatened to be made a party to any threatened, pending, or completed action, suit, or proceeding, whether civil, criminal, administrative, or investigative, by reason of the fact that such person is or was a director, officer, employee, agent, or fiduciary of the Corporation or any constituent corporation absorbed in a consolidation or merger, or serves or served as such with another corporation, partnership, joint venture, trust or other enterprise at the request of the Corporation or any such constituent corporation. (b) By action of the Board of Directors notwithstanding any interest of the directors in such action, the Corporation may purchase and maintain insurance in such amounts as the Board of Directors deems appropriate on behalf of any person who is or was a director, officer, employee, agent or fiduciary of the Corporation, or is or was serving at the request of the Corporation as a director, officer, employee, agent or fiduciary of another corporation, partnership, joint venture, trust or other enterprise against any liability asserted against him and incurred by him in any such capacity, or arising out of his status as such, whether or not the Corporation shall have power to indemnify him against such liability under the provisions of this Section. ARTICLE 8 Bylaw Amendments Section 8.1 BY THE STOCKHOLDERS. These bylaws may be amended by the stockholders at a meeting called for the purpose in any manner not inconsistent with any provision of law or of the articles of incorporation. Section 8.2 BY THE DIRECTORS. These bylaws may be amended by the affirmative vote of a majority of the whole Board of Directors in any manner not inconsistent with any provision of law or of the articles of incorporation. 10 EX-13.21-1 4 EXHIBIT 13.21.1 EXHIBIT 13.21.1 ARTICLES OF INCORPORATION OF INTERNATIONAL CUSTOM INTERIORS, INC. The undersigned incorporator, being a person competent to contract subscribes to these Articles of Incorporation to form a for profit corporation under the laws of the State of Florida. ARTICLE I NAME. The name and mailing address of this corporation is: International Custom Interiors, Inc. 16511 Bayridge Drive Clermont, Florida 34711 ARTICLE II BUSINESS AND ACTIVITIES. This corporation may and is authorized to engage in any activity or business permitted under the laws of the United States and of the State of Florida. ARTICLE III CAPITAL STOCK. The maximum number of shares of stock that this corporation is authorized to have outstanding at any one time is 10,000 shares of common stock having a par value of $1 per share, with the consideration to be paid for each share to be in money, property, or services actually performed as may be fixed by the Board of Directors. ARTICLE IV TERM OF EXISTENCE. This corporation shall commence on date of execution and shall have perpetual existence. ARTICLE V INITIAL REGISTERED OFFICE AND AGENT. The address of the initial registered office of the corporation is 16511 Bayridge Drive, Clermont, Florida 34711 and the name of the initial registered agent of the corporation at that address is Alan Cook. 1 ARTICLE VI NUMBER OF DIRECTORS. This corporation shall have one (1) director initially. The number of directors may be increased from time to time by the Board of Directors or the shareholders in accordance with the By-Laws of this corporation. Directors as such, shall receive such compensation for their services, if any, as may be set by the Board of Directors at an annual or special meeting. ARTICLE VII INITIAL BOARD OF DIRECTORS. The name and street address of the initial director of this corporation is: Alan Cook 16511 Bayridge Drive Clermont, Florida 34711 ARTICLE VIII INCORPORATOR. The name and street address of the incorporator signing these articles is: Alan Cook 16511 Bayridge Drive Clermont, Florida 34711 ARTICLE IX LOST OR DESTROYED CERTIFICATES. Stock certificates to replace lost or destroyed certificates shall be issued on such basis and according to such procedures as are from time-to-time provided for in the by-laws of this corporation. ARTICLE X AMENDMENT TO ARTICLES. These Articles of Incorporation may be amended in the manner provided by law. Every amendment shall be approved by the Board of Directors proposed by them to the shareholders and approved at a shareholders' meeting by a majority of the stock issued and entitled to be voted, unless all of the Directors and all the shareholders sign a written statement manifesting their intention that a certain amendment of these Articles of Incorporation be made. Any rights conferred by these Articles of Incorporation upon the shareholders are subject to this reservation. 2 ARTICLE XI BY-LAWS. The power to adopt, alter, amend, or repeal By-Laws of this corporation shall be vested in the Board of Directors. ARTICLE XII INDEMNIFICATION. This corporation shall indemnify any officer or director, or any former officer or director to the full extent permitted by the law. ARTICLE XIII RIGHT OF FIRST REFUSAL. No shareholder of this corporation shall have the right to sell or assign stock of this corporation without having first offered to sell such shares first to the corporation and then to other shareholders of the corporation at the same price and at the same terms and conditions pursuant to which the shareholder intends to sell their shares subject only to this right of first refusal in the corporation and the other shareholders. Each stock certificate issued representing shares of this corporation shall bear a restrictive legend as follows: Transfer of this certificate and the shares represented hereby is subject to the right of first refusal of the corporation and the other shareholders contained in the Articles of Incorporation of the corporation to which the holder hereof assents. IN WITNESS WHEREOF, the undersigned does set their hand and seal and has acknowledged and filed the foregoing Articles of Incorporation under the laws of the State of Florida this 14th day of March, 1995. /s/ Allan Cook ---------------------------------- Alan Cook C200-014-56-286-0 ---------------------------------- Florida Driver's License 3 STATE OF FLORIDA COUNTY OF SEMINOLE I HEREBY CERTIFY that on this day, before me, an officer duly authorized in the State and County aforesaid to take acknowledgements, personally appeared Alan Cook, who produced a current driver's license issued by the State of Florida Department of Motor Vehicles as identification, and they executed the foregoing Articles of Incorporation in my presence freely and voluntarily, and for the uses and purposes expressed therein. WIITNESS my hand and official seal in the County and State aforesaid this 14th day of March 1995. /s/ Shawn L. Hartsfield ---------------------------------------- NOTARY PUBLIC, State of Florida Name: Shawn L. Hartsfield ----------------------------------- Commission Number: 257502 ---------------------- My commission expires: 2/7/97 ----------------- (NOTARY SEAL) 4 EX-13.21-2 5 EXHIBIT 13.21.2 EXHIBIT 13.21.2 BY-LAWS OF INTERNATIONAL CUSTOM INTERIORS, INC. ARTICLE I OFFICES The principal office of the corporation in the State of Florida shall be located in the City of Orlando, County of Orange. The corporation may have such other offices, either within or without the State of Florida, as the board of directors may designate or as the business of the corporation may require from time to time. ARTICLE II SHAREHOLDERS Section 1. ANNUAL MEETING. The annual meeting of the shareholders shall be held on the 17th in the month of March in each year, beginning with the year 1995, at the hour of five o'clock P.M., or at such other time on such other day within such months as shall be fixed by the board of directors, for the purpose of electing directors and for the transaction of such other business as may come before the meeting. If the day fixed for the annual meeting shall be a legal holiday in the State of Florida, such meeting shall be held on the next succeeding business day. If the election of directors shall not be held on the day designated herein for any annual meeting of the shareholders, or at any adjournment thereof, the board of directors shall cause the election to be held at a special meeting of the shareholders as soon thereafter as conveniently may be. Section 2. SPECIAL MEETINGS. Special meetings of the shareholders for any purpose or purposes, unless otherwise prescribed by statute, may be called by the president or by the board of directors, and shall be called by the president at the request of the holders of not less than one-tenth of all outstanding shares of the corporation entitled to vote at the meeting. Section 3. PLACE OF MEETING. The board of directors may designate any place, either within or without the State of Florida as the place of meeting for any annual meeting or for any special meeting called by the board of directors. A waiver of notice signed by all shareholders entitled to vote at a meeting may designate any place, either within or without the State of Florida as the place for the holding of such meeting. If no designation is made, or if a special meeting be otherwise called, the place of meeting shall be the principal office of the corporation in the State of Florida. 1 Section 4. NOTICE OF MEETING. Written notice stating the place, day and hour of the meeting and, in case of a special meeting, the purpose or purposes for which the meeting is called shall, unless otherwise prescribed by statute, be delivered not less than ten nor more than sixty days before the date of the meeting, either personally or by first class mail, by or at the direction of the president, or the secretary, or the officer of other persons calling the meeting, to each shareholder or record entitled to vote at such meeting. If mailed, such notice shall be deemed to be delivered when deposited in the United States mail, addressed to the shareholder at his address as it appears on the stock transfer books of the corporation, with postage thereon prepaid. Section 5. CLOSING OF TRANSFER BOOKS OR FIXING OF RECORD DATE. For the purpose of determining shareholders entitled to notice of or to vote at any meeting of shareholders or any adjournment thereof, or shareholders entitled to receive payment of any dividend, or in order to make a determination of shareholders for any other proper purpose, the board of directors of the corporation may provide that the stock transfer books shall be closed for a stated period but not to exceed, in any case, sixty days. If the stock transfer books shall be closed for the purpose of determining shareholders entitled to notice of or to vote at a meeting of shareholders, such books shall be closed for a least ten days immediately preceding such meeting. In lieu of closing the stock transfer books, the board of directors may fix in advance a date as the record date for any such determination of shareholders, such date in any case to be not more than sixty days and, in case of a meeting of shareholders, not less than ten days prior to the date on which the particular action, requiring such determination of shareholders, is to be taken. If the stock transfer books are not closed and no record date is fixed for the determination of shareholders entitled to notice of or to vote at a meeting of shareholders, or shareholders entitled to receive payment of a dividend, the date on which notice of the meeting is mailed or the date on which the resolution of the board of directors such dividend is adopted, as the case may be, shall be the record date for such determination of shareholders. When a determination of shareholders entitled to vote at any meeting of shareholders has been made as provided in this section, such determination shall apply to any adjournment thereof. Section 6. VOTING RECORD. The officer or agent having charge of the stock transfer books for shares of the corporation shall make, at least ten days before each meeting of shareholders, a complete list of the shareholders entitled to vote at such meeting of shareholders or any adjournment thereof, arranged in alphabetical order, with the address of and the number of shares, including classes and series, held by each. Such list, for a period of ten days prior to such meeting, shall be kept on file at the registered office of the corporation, at the principal place of the business of the corporation, or at the office of the transfer agent or registrar of the corporation and shall be subject to inspection by any shareholder at any time during usual business hours. Such list shall also be produced and kept open at the time and place of the meeting and shall be subject to the inspection of any shareholder during the whole time of the meeting for the purposes thereof. Section 7. QUORUM. A majority of the outstanding shares of the corporation entitled to vote, represented in person or by proxy, shall constitute a quorum at a meeting of shareholders. If less than a majority of the outstanding shares are represented at a meeting, a majority of the shares so 2 represented may adjourn the meeting from time to time without further notice. At such adjourned meeting at which quorum shall be present and represented, any business may be transacted which might have been transacted at the meeting as originally noticed. The shareholders present at a duly organized meeting may continue to transact business until adjournment, notwithstanding the withdrawal of enough shareholders to leave less than a quorum. Section 8. PROXIES. At all meetings of shareholders, a shareholder may vote in person or by proxy executed in writing by the shareholder or by his duly authorized attorney-in-fact. Such proxy shall be filed with the secretary of the corporation before eleven months from the date of its execution, unless otherwise provided in the proxy. Section 9. VOTING OF SHARES. Subject to the provisions of Section 12 of this Article II, each outstanding share entitled to vote shall be entitled to one vote upon each matter submitted to a vote at a meeting of shareholders. Section 10. VOTING OF SHARES BY CERTAIN HOLDERS. Shares standing in the name of another corporation may be voted by such officer, agent or proxy as the by-laws of such corporation may prescribe, or, in the absence of such provision, as the board of directors of such other corporation may determine. Shares held by an administrator, executor, guardian or conservator may be voted by him, either in person or by proxy, without a transfer of such shares into his name. Shares standing in the name of a trustee may be voted by him, either in person or by proxy, but no trustee shall be entitled to vote shares hold by him without a transfer of such shares into his name. Shares standing in the name of a receiver may be voted by such receiver, and shares held by or under the control of a receiver may be voted by such receiver without the transfer thereof into his name if authority so to do be contained in the appropriate order of the court by which such receiver was appointed. A shareholder whose shares are pledged shall be entitled to vote such shares until the shares have been transferred into the name of the pledgee, and thereafter the pledgee shall be entitled to vote the shares so transferred. Neither treasury shares of its own stock held by the corporation, nor shares held by another corporation if a majority of the shares entitled to vote for the election of directors of such other corporation are hold by the corporation, shall be voted at any meeting or counted in determining the total number of outstanding shares at any given time for purposes of any meeting. Section 11. INFORMAL ACTION BY SHAREHOLDERS. Any action required or permitted to be taken at a meeting of the shareholders may be taken without a meeting if a consent in writing, setting forth the action so taken, shall be signed by the holders of outstanding stock having not less than the minimum number of votes that would be necessary to authorize or take such action at a meeting at which all shares entitled to vote thereon were present and voted. 3 Section 12. CUMULATIVE VOTING. At each election for directors every shareholder entitled to vote at such election shall have the right to vote, in person or by proxy, the number of shares owned by him for as many persons as there are directors to be elected and for whose election he has a right to vote, or to cumulate his votes by giving one candidate as many votes as the number or such directors multiplied by the number of shares shall equal, or by distributing such votes on the same principle among any number of such candidates. ARTICLE III BOARD OF DIRECTORS Section 1. GENERAL POWERS. The business and affairs of the corporation shall be managed by its board of directors. Section 2. NUMBER, TENURE AND QUALIFICATIONS. The number of directors of the corporation shall be two. Each director shall hold office until the next annual meeting of shareholders and until his successor shall have been elected and qualified. Directors need not be residents of the State of Florida or shareholders of the corporation. Section 3. REGULAR MEETINGS. A regular meeting of the board of directors shall be held without other notice than this by-law immediately after, and at the same place as, the annual meeting of shareholders. The board of directors may provide, by resolution, the time and place, either within or without the State of Florida, for the holding of additional regular meetings without other notice than such resolution. Section 4. SPECIAL MEETINGS. Special meetings of the board of directors may be called by or at the request of the chairman of the board, or the president or any two directors. The person or persons authorized to call special meetings of the board of directors may fix any place, either within or without the state of Florida, as the place for holding any special meeting of the board of directors called by them. Section 5. NOTICE. Notice of any special meeting shall be given at least two days previously thereto by written notice delivered personally or mailed to each director at his business address, or by telegram or cablegram. If mailed, such notice shall be deemed to be delivered when deposited in the United States mail, so addressed, with postage thereon prepaid. If notice be given by telegram or cablegram, such notice shall be deemed to be delivered when the telegram is delivered to the telegraph company. Any director may waive notice of any meeting. The attendance of a director at a meeting shall constitute a waiver of notice of any meeting. The attendance of a director at a meeting shall constitute a waiver of notice of such meeting, except where a director attends a meeting for the express purpose of objecting to the transaction of any business because the meeting is not lawfully called or convened. Neither the business to be transacted at, nor the purpose of, any regular or special meeting of the board of directors need by specified in the notice or waiver of notice of such meeting. 4 Section 6. QUORUM. A majority of the number of directors fixed by Section 2 of this Article III shall constitute a quorum for the transaction of business at any meeting of the board of directors, but if less than such majority is present at the meeting, a majority of the directors present may adjourn the meeting from time to time without further notice. Section 7. MANNER OF ACTING. The act of the majority of the directors present at a meeting at which a quorum is present shall be the act of the board of directors. Section 8. ACTION WITHOUT A MEETING. Any action required or permitted to be taken by the board of directors at a meeting may be taken by the board of directors at a meeting may be taken without a meeting if a consent in writing, setting forth the action so taken, shall be signed by all of the-directors. Section 9. VACANCIES. Any vacancy occurring in the board of directors may be filled by the affirmative vote of a majority of the remaining directors though less than a quorum of the board of directors. A director elected to fill a vacancy shall be elected for the unexpired term of his predecessor in office. Any directorship to be filled by reason of an increase in the number of directors may be filled by election by the board of directors for a term of office continuing only until the next election of directors by the shareholders. Section 10. COMPENSATION. By resolution of the board of directors, each director may be paid his expenses, if any, of attendance at each meeting of the board of directors, and may be paid a stated salary as director of a fixed sum for attendance at each meeting of the board of directors or both. No such payment shall preclude any director from serving the corporation in any other capacity and receiving compensation therefore. Directors may set their own compensation for service as officers as well as for service as directors. Section 11. PRESUMPTION OF ASSENT. A director of the corporation who is present at a meeting of the board of directors at which action on any corporate matter is taken shall be presumed to have assented to the action taken unless he votes against such action or abstains from voting in respect thereto because of an asserted conflict of interest. ARTICLE IV OFFICERS Section 1. NUMBER. The officers of the corporation shall be a president, one or more vice-presidents (the number thereof to be determined by the board of directors), a secretary, and a treasurer, each of whom shall be elected by the board of directors. Such other officers and assistant officers as may be deemed necessary may be elected or appointed by the board of directors. Any two or more offices may be held by the same person. Section 2. ELECTION AND TERM OF OFFICE. The officers of the corporation to be elected by the board of directors shall be elected annually by the board of directors at the first meeting of the board of directors held after each annual meeting of the shareholders. If the election of 5 officers shall not be held at such meeting, such election shall be held as soon thereafter as conveniently may be. Each officer shall hold office until his successor shall have been duly elected and shall have qualified or until his death or until he shall resign or shall have been removed in the manner hereinafter provided. Section 3. REMOVAL. Any officer or agent may be removed by the board of directors whenever in its judgment the best interests of the corporation will be served thereby, but such removal shall be without prejudice to the contract rights, if any, of the person so removed. Election or appointment of an officer or agent shall not of itself create contract rights. Section 4. VACANCIES. A vacancy in any office because of death, resignation, removal, disqualification or otherwise, may be filled by the board of directors for the unexpired portion of the term. Section 5. PRESIDENT. The president shall be the principal executive officer of the corporation and, subject to the control of the board of directors, shall in general supervise and control all of the business and affairs of the corporation. He shall, when present, preside at all meetings of the shareholders and of the board of directors. He may sign, with the secretary or any other proper officer of the corporation thereunto authorized by the board of directors, certificates for shares of the corporation and deeds, mortgages, bonds, contracts, or other instrument which the board of directors has authorized to be executed, except in cases where the signing and execution thereof shall be expressly delegated by the board of directors or by these By-Laws to some other officer or agent of the corporation, or shall be required by law to be otherwise signed or executed; and in general shall perform all duties as may be prescribed by the board of directors from time to time. Section 6. THE VICE-PRESIDENT. In the absence of the president or in the event of his death, inability or refusal to act, the vice-president (or in the event there be more than one vice-president, the vice-presidents in the order designated at the time of their election, or in the absence of any designation, then in the order of their election) shall perform the duties of the president, and when so acting, shall have all the powers of and be subject to all the restrictions upon the president. Any vice-president may sign, with the secretary or an assistant secretary, certificates for shares of the corporation; and shall perform such other duties as from time to time may be assigned to him by the president or by the board of directors. Section 7. THE SECRETARY. The secretary shall: (a) keep the minutes of the proceedings of the shareholders and of the board of directors in one or more books provided for that purpose; (b) see that all notices are duly given in accordance with the provisions of these By-Laws or as required by law; (c) be custodian of the corporate records and of the seal of the corporation and see that the seal of the corporation is affixed to all documents the execution of which on behalf of the corporation under its seal is duly authorized; (d) keep a register of the post office address of each shareholder which shall be furnished to the secretary by such shareholder; (e) sign with the president, or a vice-president, certificates for share of the corporation, the issuance of which shall have been authorized by resolution of the board of directors; (f) have general charge of the stock transfer books of the corporation; and (g) in general perform all duties incident to the office of 6 secretary and such other duties as from time to time may be assigned to him by the president or by the board of directors. Section 8. THE TREASURER. The Treasurer shall: (a) have charge and custody of and be responsible for all funds and securities of the corporation; (b) receive and give receipts for moneys due and payable to the corporation from any source whatsoever, and deposit all such moneys in the name of the corporation in such banks, trust companies or other depositories as shall be selected in accordance the provisions of Article V of these By-Laws, and (c) in general perform all of the duties as from time to time may be assigned to him by the president or by the board of directors. If required by the board of directors, the treasurer shall give a bond for the faithful discharge of his duties in such sum and with such surety or sureties as the board of directors shall determine. Section 9. ASSISTANT SECRETARIES AND ASSISTANT TREASURERS. The assistant secretaries, when authorized by the board of directors, may sign with the president or a vice-president certificates for shares of the corporation the issuance of which shall have been authorized by a resolution of the board of directors. The assistant treasurers shall respectively, if required by the board of directors, give bonds for the faithful discharge of their duties in such sums and with such sureties as the board of directors shall determine. The assistant secretaries and assistant treasurers, in general shall perform such duties as shall be assigned to them by the secretary or the treasurer, respectively, or by the president or the board of directors. Section 10. SALARIES. The salaries of the officers shall be fixed from time to time by the board of directors and no officer shall be prevented from receiving such salary by reason of fact that he is also a director of the corporation. ARTICLE V CONTRACTS, LOANS, CHECKS AND DEPOSITS Section 1. CONTRACTS. The board of directors may authorize any officer or officers, agent or agents, to enter into any contract or execute and deliver any instrument in the name of and on behalf of the corporation, and such authority may be general or confined to specific instances. Section 2. LOANS. No loans shall be contracted on behalf of the corporation and no evidences of indebtedness shall be issued in its name unless authorized by a resolution of the board of directors. Such authority may be general or confined to specific instances. Section 3. CHECKS, DRAFTS, ETC. All checks, drafts or other orders for the payment of money, notes or other evidences of indebtedness issued in the name of the corporation shall be signed by such officer or officers, agent or agents of the corporation and in such manner as shall from time to time be determined by resolution of the board of directors. 7 Section 4. DEPOSITS. All funds of the corporation not otherwise employed shall be deposited from time to time to the credit of the corporation in such banks, trust companies or other depositories as the board of directors may select. ARTICLE VI CERTIFICATES FOR SHARES AND THEIR TRANSFER Section 1. CERTIFICATES FOR SHARES. Certificates representing shares of the corporation shall be in such form as shall be determined by the board of directors. Such certificates shall be signed by the president or a vice-president and by the secretary or an assistant secretary and sealed with the corporate seal or a facsimile thereof. The signatures of such officers upon a certificate may be facsimiles if the certificate is manually signed on behalf of a transfer agent or a registrar, other than the corporation itself or one of its employees. Each certificate for shares shall be consecutively numbered or otherwise identified. The name and address of the person to whom the shares represented thereby are issued, with the number of shares and date of issue, shall be entered on the stock transfer books of the corporation. All certificates surrendered to the corporation for transfer shall be cancelled and no new certificate shall be issued until the former certificate for a like number of shares shall have been surrendered and cancelled, except that in case of a lost, destroyed or mutilated certificate a new one may be issued therefore upon such terms and indemnity to the corporation as the board of directors may prescribe. Section 2. TRANSFER OF SHARES. Transfer of shares of the corporation shall be made only on the stock transfer books of the corporation by the holder of record thereof or by this legal representative, who shall furnish proper evidence of authority to transfer or by his attorney thereunto authorized by power of attorney duly executed and filed with the secretary of the corporation, and on surrender for cancellation of the certificate for such shares. The person in whose name shares stand on the books of the corporation shall be deemed by the corporation to be the owner thereof for all purposes. ARTICLE VII FISCAL YEAR The fiscal year of the corporation shall begin on the first day of January and end on the thirty-first day of December in each year. ARTICLE VIII DIVIDENDS The board of directors may, from time to time, declare and the corporation may pay dividends on its outstanding shares in the manner and upon the terms and conditions provided by law and the Articles of Incorporation. 8 ARTICLE IX CORPORATE SEAL The board of directors shall provide a corporate seal which shall be circular in form and shall have inscribed thereon the name of the corporation and the state of incorporation and the words "Corporate Seal". ARTICLE X AMENDMENTS These By-Laws may be altered, amended or repealed and new By-Laws may be adopted by the board of directors or by the shareholders at any regular or special meeting. ARTICLE XI WAIVER OF NOTICE Whenever any notice is required to be given to any shareholder or director of the corporation under the provisions of these By-Laws or under the provisions of the Articles of Incorporation or under the provisions of the ICI Corporation Law, a waiver thereof in writing signed by the person or persons entitled to such notice whether before or after the time stated therein shall be deemed equivalent lo the giving of such notice. ARTICLE XII EXECUTIVE COMMITTEE Section 1. Appointment. The board of directors by resolution adopted by a majority of the full board, may designate two or more of its members to constitute an executive committee. The designation of such committee and the delegation thereto of authority shall not operate to relieve the board of directors, or any member thereof, of any responsibility imposed by law. Section 2. Authority. The executive committee, when the board of directors is not in session shall have and may exercise all of the authority of the board of directors except to the extent, if any, that such authority shall be limited by the resolution appointing the executive committee and except also that the executive committee shall not have the authority of the board of directors to approve or recommend to shareholders action or proposals required by this act to be approved by shareholders; designate candidate for the office of director, for purposes of proxy solicitation, or otherwise, fill vacancies on the board of directors or any committee thereof; amend by-laws; authorize or approve the reacquisition of shares unless pursuant to a general formula or method specified by the board of directors; or authorize or approve the issuance or sale of, or any contract to issue or sell, shares or designate the terms of a series of a class of shares, except as provided by the State of Florida General Corporation Law. 9 Section 3. Tenure and Qualifications. Each member of the executive committee shall hold office until the, next regular annual meeting of the board of directors following his designation and until his successor is designated as a member of the executive committee and is elected and qualified. Section 4. Meetings. Regular meetings of the executive committee may be held without notice at such times and places as the executive committee may fix from time to time by resolution. Special meetings of the executive committee may be called by any member thereof upon not less than one day's notice stating the place, date and hour of the meeting, which notice may be written or oral, and if mailed, shall be deemed to be delivered when deposited in the United States mail addressed to the member of the executive committee at his business address. Any member of the executive committee may waive notice of any meeting and no notice of any meeting need be given to any member thereof who attends in person. The notice of a meeting of the executive committee need not state the business proposed to be transacted at the meeting. Section 5. Quorum. A majority of the members of the executive committee shall constitute a quorum for the transaction of business at any meeting thereof, and action of the executive committee must be authorized by the affirmative vote of a majority of the members present at a meeting at which a quorum is present. Section 6. Action Without a Meeting. Any action required or permitted to be taken by the executive committee at a meeting may be taken without a meeting if a consent in writing, setting forth the action so taken, shall be signed by all of the Members of the executive committee. Section 7. Vacancies. Any vacancy in the executive committee may be filled by a resolution adopted by a majority of the full board of directors. Section 8. Resignations and Removal. Any member of the executive committee may be removed at any time with or without cause by resolution adopted by a majority of the full board of directors. Any member of the executive committee may resign from the executive committee at any time by giving written notice to the president or secretary of the corporation, and unless otherwise specified therein, the acceptance of such resignation shall not be necessary to make it effective. Section 9. Procedure. The executive committee shall elect a presiding officer from its members and may fix its own rules of procedure which shall not be inconsistent with these By-Laws. It shall keep regular minutes of its proceedings and report the same to the board of directors for its information at the meeting thereof held next after the proceedings shall have been taken. 10 EX-21.1 6 EXHIBIT 21.1 EXHIBIT 21.1 LIST OF SUBSIDIARIES OF REGISTRANT SUBSIDIARIES OF DECRANE AIRCRAFT HOLDINGS, INC. AEROSPACE DISPLAY SYSTEMS, INC., a Delaware corporation. AUDIO INTERNATIONAL SALES, INC., a U. S. Virgin Islands corporation. AUDIO INTERNATIONAL, INC., an Arkansas corporation. AVTECH CORPORATION, a Washington corporation. CORY COMPONENTS, INC., a California corporation. CWP ACQUISITION, INC., a Delaware corporation. DETTMERS INDUSTRIES, INC., a Delaware corporation. ELSINORE AEROSPACE SERVICES, INC., a California corporation. ELSINORE ENGINEERING, INC., a Delaware corporation. FLIGHT REFUELING, INC., a Maryland corporation. HOLLINGSEAD INTERNATIONAL, INC., a California corporation. HOLLINGSEAD INTERNATIONAL, LTD., a UK company. INTERNATIONAL CUSTOM INTERIORS, INC., a Florida corporation. PATRICK AIRCRAFT TANK SYSTEMS, INC., a Maryland corporation. PATS AIRCRAFT AND ENGINEERING CORPORATION, a Maryland corporation. PATS SUPPORT, INC., a Maryland corporation. PATS, INC., a Maryland corporation. PCI ACQUISITION CO., INC., a Delaware Corporation. PPI HOLDINGS, INC., a Kansas corporation. PRECISION PATTERN, INC., a Kansas corporation. TRI-STAR ELECTRONICS EUROPE S.A., a Swiss company. TRI-STAR ELECTRONICS INTERNATIONAL, INC., a California corporation. TRI-STAR TECHNOLOGIES, a California general partnership. -----END PRIVACY-ENHANCED MESSAGE-----