-----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, Km6Hz9n5tXPbNfA1tHvD2TXDH+DolU34/HmqyEvvuxMVnTu/VqTpPlRY1e0JhlyP TvV1zB9MtK4aD07bbna0iA== 0000089615-00-000003.txt : 20000202 0000089615-00-000003.hdr.sgml : 20000202 ACCESSION NUMBER: 0000089615-00-000003 CONFORMED SUBMISSION TYPE: 10-Q PUBLIC DOCUMENT COUNT: 2 CONFORMED PERIOD OF REPORT: 19991126 FILED AS OF DATE: 20000111 FILER: COMPANY DATA: COMPANY CONFORMED NAME: SHELDAHL INC CENTRAL INDEX KEY: 0000089615 STANDARD INDUSTRIAL CLASSIFICATION: PRINTED CIRCUIT BOARDS [3672] IRS NUMBER: 410758073 STATE OF INCORPORATION: MN FISCAL YEAR END: 0831 FILING VALUES: FORM TYPE: 10-Q SEC ACT: SEC FILE NUMBER: 001-11861 FILM NUMBER: 504899 BUSINESS ADDRESS: STREET 1: 1150 SHELDAHL RD CITY: NORTHFIELD STATE: MN ZIP: 55057 BUSINESS PHONE: 5076638000 MAIL ADDRESS: STREET 1: 1150 SHELDAHL ROAD CITY: NORTHFIELD STATE: MN ZIP: 55057-0170 FORMER COMPANY: FORMER CONFORMED NAME: SCHJELDAHL G T CO DATE OF NAME CHANGE: 19741017 10-Q 1 SECURITIES AND EXCHANGE COMMISSION Washington, DC 20549 Form 10-Q (X) QUARTERLY REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 OR ( ) TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For Quarter Ended November 26, 1999 Commission File Number: 0-45 SHELDAHL, INC. (Exact name of registrant as specified in its charter) Minnesota 41-0758073 (State or other jurisdiction of (IRS Employer Identification Number) incorporation or organization) Northfield, Minnesota 55057 (Address of principal (Zip Code) executive offices) Registrant's telephone number, including area code: (507) 663-8000 As of January 7, 2000, 11,613,020 shares of the Registrant's common stock were outstanding. Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. YES: X NO: PART I: FINANCIAL INFORMATION SHELDAHL, INC. AND SUBSIDIARY CONSOLIDATED STATEMENTS OF OPERATIONS Unaudited Three Months Ended November 26, November 27, (in thousands, except for per share data) 1999 1998 Net sales $34,811 $28,474 Cost of sales 30,054 25,767 _______ _______ Gross profit 4,757 2,707 _______ _______ Expenses: Sales and marketing 2,091 2,220 General and administrative 2,231 1,926 Research and development 921 575 Interest 916 323 _______ _______ Total expenses 6,159 5,044 _______ _______ Loss before income taxes (1,402) (2,337) Benefit (provision) for income taxes - - _______ _______ Net loss before preferred dividends (1,402) (2,337) Convertible preferred stock dividends (508) (654) _______ _______ Net loss applicable to common shareholders $(1,910) $ (2,991) ======= ======= Net loss per common share - - Basic and Diluted $ (0.16) $ (0.29) ======= ======= Number of shares outstanding - - Basic and Diluted 11,613 10,402 ======= ======= The accompanying notes are an integral part of these statements. SHELDAHL, INC. CONSOLIDATED BALANCE SHEETS ASSETS unaudited (In thousands) November 26, August 27, 1999 1999 Current assets: Cash and cash equivalents $ 2,134 $ 1,043 Accounts receivable, net 23,854 19,908 Inventories 18,561 18,746 Other current assets 964 593 _______ _______ Total current assets 45,513 40,290 _______ _______ Construction in progress 4,121 3,399 Land and buildings 28,560 28,560 Machinery and equipment 126,578 127,377 Less: accumulated depreciation (80,015) (76,491) _______ _______ Net plant and equipment 79,244 82,845 _______ _______ Other assets 924 795 _______ _______ $125,681 $123,930 ======= ======= LIABILITIES AND SHAREHOLDERS INVESTMENT Current liabilities: Current maturities of long-term debt $ 3,468 $ 4,142 Accounts payable 11,122 10,493 Accrued salaries 1,562 1,323 Other accrued liabilities 5,886 4,682 Restructuring reserves 2,055 2,713 _______ _______ Total current liabilities 24,093 23,353 _______ _______ Long-term debt 32,295 29,284 Restructuring reserves 2,386 2,484 Other non-current liabilities 3,464 3,477 _______ _______ Shareholders investment: Convertible preferred stock 40 40 Common stock 2,904 2,903 Additional paid-in capital 109,427 109,407 Retained earnings (48,928) (47,018) _______ _______ Total shareholders' investment 63,443 65,332 _______ _______ $125,681 $123,930 ======= ======= The accompanying notes are an integral part of these statements. SHELDAHL, INC. AND SUBSIDIARY CONSOLIDATED STATEMENTS OF CASH FLOWS Unaudited Three Months Ended (in thousands) November 26, November 27, 1999 1998 Operating activities: Net loss applicable to common shareholders $ (1,910) $ (2,991) Adjustments to reconcile net loss to net cash used in operating activities: Depreciation and amortization 4,201 3,888 Preferred stock dividends 508 654 Net change in other operating activities: Accounts receivable (3,946) (831) Inventories 185 (233) Other current assets (248) 120 Other assets (129) 33 Accounts payable and accrued liabilities 1,574 265 Restructuring reserves (750) (1,805) Other non-current liabilities (13) 31 _______ _______ Net cash used in operating activities (528) (869) _______ _______ Capital expenditures, net (722) (2,330) _______ _______ Financing activities: Net borrowings under revolving credit facility 2,625 4,876 Repayments of long-term debt (4,588) (773) Borrowing of long-term debt 4,300 - Redemption of preferred stock, net - (837) Stock options exercised 4 - _______ _______ Net cash provided by financing activities 2,341 3,266 _______ _______ Net increase (decrease) in cash and cash equivalents 1,091 67 Cash and cash equivalents at beginning of period 1,043 1,005 _______ _______ Cash and cash equivalents at end of period $ 2,134 $ 1,072 ======= ======= Supplemental cash flow information: Interest paid $ 916 $ 790 ======= ======= Income taxes paid $ 29 $ 65 ======= ======= The accompanying notes are an integral part of these statements. SHELDAHL, INC. AND SUBSIDIARY NOTES TO CONSOLIDATED FINANCIAL STATEMENTS Unaudited These condensed and unaudited consolidated financial statements have been prepared by the Company pursuant to the rules and regulations of the Securities and Exchange Commission. In the opinion of management, these condensed unaudited consolidated financial statements reflect all adjustments, of a normal and recurring nature, necessary for a fair statement of the interim periods, on a basis consistent with the annual audited financial statements. Certain information, accounting policies and footnote disclosures normally included in financial statements prepared in accordance with generally accepted accounting principles have been condensed or omitted pursuant to such rules and regulations. Although these disclosures should be considered adequate, the Company strongly suggests that these condensed unaudited financial statements be read in conjunction with the financial statements and summary of significant accounting policies and notes thereto included in the Company's latest annual report on Form 10-K. 1) Inventories, which are valued at the lower of first-in first-out cost or market, consists of (in thousands): November 26, 1999 August 27, 1999 Raw materials $ 7,429 $ 6,635 Work-in-process 5,806 7,751 Finished goods 5,326 4,360 _______ _______ $18,561 $18,746 ======= ======= 2) Liquidity and Going Concern Matters During the three-year period ended August 27, 1999, the Company incurred, principally from its Micro Products operations, cumulative net losses totaling approximately $68.7 million, including restructuring and other charges of $27.7 million. During this three-year period, the Company used cash of approximately $59.5 million supporting capital expenditures and approximately $6.8 million for net operating activities. The Company has financed these transactions principally through equity and debt financing. Cash requirements to fund restructuring charges taken during fiscal 1999 and 1998 are expected to be approximately $2.7 million in fiscal 2000 compared to $5.0 million in fiscal 1999. Fiscal 2000 capital expenditures for the Company are planned at approximately $7.0 million, compared with $5.5 million in fiscal 1999. Debt repayments for fiscal 2000, including refinancing of the Longmont facility, will be $3.8 million including $2.5 million on the bank term facility and $1.0 million for various capital lease payments. The impact of anticipated fiscal 2000 operating losses, tighter borrowing levels pursuant to its amended debt agreements and the uncertainty of the timing of sales growth from the Company's Micro Products business places significant pressure on the cash reserves of the Company. Cash flow projections based on the Company's operating plan for fiscal 2000 reflect an increased level of cash flow from operations during the first half of the year with increasing demand for cash later in the fiscal year as working capital expands to support projected sales growth. The Company believes this growth in working capital can be supported under its current credit agreement, although there will be intervals of time where borrowing capacity under its debt agreements will be severely reduced. The inability of the Company to i) obtain sufficient, substantial production orders and sales for Micro Product's ViaThin in the range of $10 to $12 million; ii) improve operating results in Micro Products for fiscal 2000; iii) achieve operating performance from the Company's Core Business at or above fiscal 1999 levels; iv) achieve other cost or productivity improvements included in the Company's fiscal 2000 budget and v) maintain adequate liquidity to fund normal operations would result in the Company being out of compliance with certain of its debt covenants thereby allowing the Company's lenders to require full repayment of the outstanding borrowings under the Company's credit agreement and/or leave the Company in a cash reserve position that would require additional capital to fund operations. These matters raise substantial doubt about the Company's ability to continue as a going concern. Management has and will continue to implement operational measures designed to assist the Company in achieving its fiscal 2000 budget and cash flow objectives. Should any of the matters discussed above ultimately occur, management believes the Company could obtain the necessary additional new capital, including the issuance of additional new debt or additional new equity financing to fund operations. However, there can be no assurance that the Company will be successful in achieving its projected operating results for fiscal 2000, in meeting its quarterly debt covenants during fiscal 2000 or in its attempt to issue additional debt or to raise additional capital on terms acceptable to the Company. On October 21, 1999, the Board of Directors of the Company established a Special Committee consisting of Kenneth J. Roering (Chairman), Dennis M. Mathisen and Gerald E. Magnuson. The objective of the Special Committee is to evaluate options and to make recommendations to the Board with respect to various strategic alternatives intended to maximize shareholder value. Mr. Mathisen has resigned from the Board of Directors. Messrs. Roering and Magnuson are currently directors of the Company. 3) Restructuring Expenses In February 1999, the Company recorded a charge of $3.1 million for separation costs incurred in reducing its salaried work force. This charge was increased by $0.5 million in August 1999. The restructuring costs provide for approximately $2.0 million for severance and early retirement salary costs and approximately $1.6 million for medical, dental and other benefits being provided to the affected individuals. Approximately 46 people were affected by this action. The fiscal 1999 restructuring costs are in addition to the $8.5 million of similar costs charged to operations in fiscal 1998. As of November 26, 1999, approximately $0.8 million has been charged to the aforementioned restructuring reserve and by November 26, 1999, 43 employees had terminated employment with the Company. In February 1998, a restructuring charge of $4.0 million was recorded related to the culmination of the Company's business re-engineering initiative that began two years ago. Due to significant productivity benefits resulting from the initiative, the Company is reducing the size of its salaried workforce. The resulting workforce reduction involves layoffs, early retirement offerings, reassignments and reclassifications of positions. The restructuring costs provide for approximately $2.5 million for severance and early retirement salary costs, approximately $1.3 million for medical, dental and other benefits being provided to the affected individuals, and approximately $0.2 million for outplacement and other costs. Approximately 73 jobs were affected by this action. In May 1998, an additional restructuring charge of $4.5 million was recorded and subsequently reduced by $0.5 million in May 1999. This restructuring charge relates to the closing of the Company's Aberdeen, South Dakota assembly facility and reducing its Northfield production workforce. The restructuring costs provide for approximately $1.4 million for severance costs, approximately $0.4 million for medical, dental and other benefits being provided to the affected individuals and approximately $2.2 million for equipment disposal, losses related to the closure of the Aberdeen facility, outplacement and other costs. Approximately 196 jobs were affected by this action. Both 1998 aforementioned restructuring charges were related to the Company's efforts to decrease cost and increase throughput. As of November 26, 1999, approximately $5.8 million had been charged to the Company's restructuring reserves and by November 1999, 269 employees had terminated employment with the Company related to the fiscal 1998 restructuring actions. 4) Segment Reporting The following is a summary of certain financial information relating to the two segments for the three months ended as follows: November 26, November 27, 1999 1998 Total sales by segment: Core Business $ 33,591 $ 28,329 Micro Products 1,220 145 _______ _______ Total company sales 34,811 28,474 _______ _______ Operating Profit (loss) by segment: Core Business: Before corporate allocation 4,339 4,377 Corporate cost allocation 1,836 1,538 Interest expense 751 258 _______ _______ Total 1,752 2,581 _______ _______ Micro Products: Before corporate allocation (2,583) (4,466) Corporate cost allocation 406 387 Interest expense 165 65 _______ _______ Total (3,154) (4,918) _______ _______ Total segments operating losses (1,402) (2,337) ======= ======= Sales by product line: Laminate material $ 8,638 $ 6,218 ViaThin 1,220 144 Novaflex HD 9,842 7,888 Novaflex VHD 1,514 600 Flexbase interconnects 13,597 13,623 _______ _______ $ 34,811 $ 28,473 ======= ======= SHELDAHL, INC. AND SUBSIDIARY MANAGEMENT'S DISCUSSION AND ANALYSIS OF CONSOLIDATED OPERATING RESULTS AND FINANCIAL CONDITION Three Months Ended November 26, 1999 and November 27, 1998 SALES _______________ The Company's net sales increased $6.3 million, or 22%, to $34.8 million for the three months ended November 26, 1999, as compared to the same period one year ago. Core Business sales increased $5.2 million, or 19%, to $33.6 million while Micro Products sales increased $1.1 million when compared to Quarter one of fiscal 1999. The increased sales were principally realized from the Company's family of Novacladr products - ViaThinr, Novaflexr HD and Novaflexr VHD - for applications serving the Datacom market. Core Business sales for the three months ended November 26, 1999 to the automotive market increased 3.2% to $20.7 million and represents 60% of total Company sales. Datacom sales for the same period increased $5.6 million, or 142%, to $9.5 million. Datacom sales represent 27% of total Company sales of which $8.3 million is from the Core Business segment and $1.2 million is from the Micro Products segment. Sales to the Company's other markets totaled $4.6 million, or 13%, of total Company revenue reflecting a modest increase of $0.1 million, or 3%, from the same period one year ago. The table below summarizes the Company's sales by market. Three Months Ended November 26, November 27, Gross % Market 1999 1998 Change Change Automotive $20,716 $20,081 $ 635 3.2% Datacom 9,487 3,922 5,565 141.9% Aerospace/Defense 1,837 1,591 246 15.5% Industrial 1,785 2,124 (339) (16.0%) Consumer 986 756 230 30.4% _______ _______ _______ _______ $34,811 $28,474 $6,337 22.2% ======= ======= ======= ======= GROSS PROFIT _______________ Gross profit increased $2.0 million to 13.7% of sales for the three months ended November 26, 1999 compared to the same period one year ago. As reflected in the chart below, Micro Products gross loss was reduced nearly in half to $1.9 million compared to $3.7 million for the same period one year ago. Increased sales, reduced direct material usage in relation to sales and reduced fixed costs positively impacted gross loss. The Core Business gross profit increased $0.2 million resulting in a gross profit percent to sales of 19.7% compared to 22.5% for the same period one year ago. This reflected a less profitable sales mix with higher material costs as a percent of sales. Additionally, conversion costs consisting of direct labor and factory cost of sales for the Core Business product lines increased $1.4 million when compared to the same period one year ago with freight costs being a major part of the increase. November 26, 1999 November 27, 1998 Core Micro Total Core Micro Total Business Products Company Business Products Company Sales $33,591 $ 1,220 $34,811 $28,329 $ 145 $28,474 Cost of sales 26,980 3,074 30,054 21,950 3,817 25,767 Gross profit 6,611 (1,854) 4,757 6,379 (3,672) 2,707 % of sales 19.7% N/A 13.7% 22.5% N/A 9.5% OTHER EXPENSES _______________ The Company's expenses excluding interest increased $0.5 million, or 11%, from $4.7 million for the three months ended November 27, 1998 to $5.2 million for the quarter ended November 26, 1999. Increased depreciation expenses for the Company's information technology upgrade fully deployed in the second half of fiscal 1999 and increased expenses for development efforts related to product for the Core Business automotive joint venture - Origin - were the principle areas contributing to this increase. During the quarter, increased borrowing and higher interest rates on the Company's credit and security agreement with its bank group increased gross interest expense $0.2 million. Reflecting reduced capital spending capitalized interest declined nearly $0.4 million for the three months ended November 26, 1999 when compared to the same period one year ago. As a result, net interest expense rose $0.6 million or 182% to $0.9 million compared to the same period one year ago. Interest costs and activities for the noted period are detailed below: Three Months Ended Three Months Ended November 26, 1999 November 27, 1998 Change (in thousands) Gross interest expense $ 985 $ 799 $ 186 Capitalized interest (69) (476) 407 _______ _______ _______ Net interest $ 916 $ 323 $ 593 ======= ======= ======= INCOME TAXES _______________ In May 1998, based upon restructuring charges, write-offs and continued losses at the Company's Longmont, Colorado facility, management provided a valuation allowance for its net deferred tax assets. This resulted in a $3.0 million charge to income during fiscal 1998. Since that time, the Company has not and will not reflect in immediate future periods any tax provision or benefit until such net deferred tax assets are offset by reported pretax profits or that the degree of certainty increases as to the future profit performance of the Company to allow for the reversal of the valuation allowance. FINANCIAL CONDITION _______________ On November 16, 1999, the Company refinanced its outstanding secured real estate loan. The new $4.3 million, ten-year secured real estate mortgage carries an interest rate of 8.53% and requires the Company to meet certain performance and reporting covenants. Annual principal payments and interest under the new secured loan will be $417,000 versus $1.3 million on the existing loan. Concurrent with the closing of this refinancing, the Company fully satisfied the $3.6 million secured real estate loan plus accrued and unpaid interest that was outstanding to the lender. The net effect of this refinancing enhanced fiscal 2000 liquidity by $0.9 million by reducing debt payments by approximately $0.4 million and interest payments by approximately $0.5 million. The Company's 1998 three-year credit agreement with a group of lenders lead by Norwest Bank, N.A., as agent, consists of a working capital revolver of $25 million based on levels of working capital and a term facility of $16 million based on the Company's fixed assets. As of August 27, 1999, the amount available to borrow on the revolver was approximately $6.6 million based on a $18.3 million borrowing base on the revolver. The term facility of $16 million has an outstanding balance as of the end of the fiscal year of $14.4 million with monthly repayments of $205,000 through May 2001. On November 8, 1999, the Company's borrowing available under the working capital portion of its 1998 credit facility was reduced. This change was initiated by the Company's lenders in conjunction with a waiver issued by the lenders related to the Company's failure to achieve certain quarterly financial ratios and the Company's current level of borrowing under the working capital revolver related to its events of non-compliance. Under the $25 million working capital revolver, the Company has the ability to borrow based on the levels of accounts receivable and inventory, which establishes a borrowing base. As of January 4, 2000, the Company's reduced borrowing base was $14.7 million. Actual borrowing under this working capital revolver was $10.7 million as of January 7, 2000 and the amount available to borrow was $4.0 million (see Capital Reserves). The applicable interest rate on the loan effective October 1, 1999 and November 26, 1999 was 10.25% and 10.50%, respectively. Capital Reserves. Since fiscal 1995, the Company has invested significantly in new plant and equipment providing manufacturing capacity to deliver its patented Novacladr-based line of products to both existing and new customers. This included building and equipping a facility in Longmont, Colorado, to manufacture substrates for integrated circuit (IC) packages. This capital expenditure was funded by a series of equity offerings commencing in June 1994 through March 1999, raising $100.5 million. The longer than expected period of time to achieve full product and market acceptance has resulted in greater losses generated from an under-utilized manufacturing facility and its supporting workforce. At the Longmont facility, the Company manufactures ViaArrayr and ViaThin - both Novaclad-based substrates for IC packages, plus the Company's Novaflex VHD product targeted at the high-end disc drive market. Sheldahl received its initial volume order for the VHD product line in October 1998. The Company's fiscal 1999 sales volume from Novaflex VHD was $5.6 million. Additionally, the base material for the Company's Novaflex HD is also produced in the Longmont facility. For all of fiscal 1999, $41.2 million of Novaclad based product was produced all or in part at the Longmont facility. As of the end of fiscal 1999, the Longmont facility was operating at approximately 20% of stated production capacity with projected breakeven at 40% - 60% of factory utilization or approximately $24 - $26 million of annual revenue of ViaThin and ViaArray products plus related volume of the Novaflex HD and VHD product lines. Breakeven volume at the Longmont facility is not expected until fiscal 2000 at the earliest. Overall, the Longmont manufacturing operation is estimated to have between a $2.5 million to $3.0 million negative impact on operating cash flow in fiscal 2000. During the three-year period ended August 27, 1999, the Company incurred, principally at its Micro Products operations, cumulative net losses totaling approximately $68.7 million, including restructuring and other charges of $27.7 million. During this three-year period, the Company used cash of approximately $59.5 million supporting capital expenditures and approximately $6.8 million for net operating activities. The Company has financed these transactions principally through equity and debt financing. Cash requirements to fund restructuring charges taken during fiscal 1999 and 1998 are expected to be approximately $2.7 million in fiscal 2000 compared to $5.0 million in fiscal 1999. Fiscal 2000 capital expenditures for the Company are planned at approximately $7.0 million, compared with $5.5 million in fiscal 1999. Debt repayments for fiscal 2000, including refinancing of the Longmont facility, will be $3.8 million including $2.5 million on the bank term facility and $1.0 million for various capital lease payments. For the three month period ended November 26, 1999, the Company improved its operating performance with cash flow from operations excluding restructure payment with a positive $0.22 million and met financial covenants established by its bank group. Capital spending for the three months ended November 26, 1999 was $0.7 million or $1.6 million below the same period one year ago. Net working capital increased to $21.4 million over the three months ended November 26, 1999 from $16.9 million as of August 27, 1999. An increase in the Company's accounts receivable increased $4.0 million, reflecting greater sales growth in the first quarter of fiscal 2000. YEAR 2000 DISCLOSURE _______________ As of January 7, 2000, the Company has not experienced any negative material event related to the Y2K issue. NEW ACCOUNTING PRONOUNCEMENTS _______________ In June 1998, the Financial Accounting Standards Board issued SFAS No. 133, "Accounting for Derivative Instruments and Hedging Activities," effective for years beginning after June 15, 2000. SFAS No. 133 establishes accounting and reporting standards requiring that every derivative instrument, including certain derivative instruments embedded in other contracts, be recorded in the balance sheet as either an asset or liability measured at its fair value. SFAS No. 133 requires that changes in the derivative's fair value be recognized currently in earnings unless specific hedge criteria are met. Special accounting for qualifying hedges allow a derivative's gains or losses to offset related results on the hedged item in the income statement and requires that a company must formally document, designate and assess the effectiveness of transactions that receive hedge accounting. The Company has not yet quantified the impacts of adopting SFAS No. 133 and has not yet determined the timing or method of adoption. CAUTIONARY STATEMENT _______________ Statements included in this management's discussion and analysis of financial condition and results of operations, in the letter to shareholders, elsewhere in this Form 10-K, in the Company's annual report, and in future filings by the Company with the Securities and Exchange Commission, in the Company's press releases, and oral statements made with the approval of an authorized executive officer that are not historical, or current facts are "forward-looking statements" made pursuant to the safe harbor provisions of the Private Securities Litigation Reform Act of 1995. Certain risks and uncertainties could cause actual results to differ materially from historical earnings and those presently anticipated or projected. The Company wishes to caution readers not to place undue reliance on any such forward-looking statements, which speak only as of the date made. The following important factors, among others, in some cases have affected and in the future could affect the Company's actual financial performance and cause it to differ materially from that expressed in any forward-looking statement: (i) the Company's ability to begin full volume production at its Micro Products facility is dependent upon final qualification by the Company's customers and, in some cases, their customers, of ViaThin as well as the ability of its production equipment to produce sufficient quantities of product at acceptable quality levels; (ii) delays in achieving full volume production at the Micro Products facility will have a material adverse impact on the Company's results of operations and liquidity position; (iii) a general downturn in the automotive market, the Company's principal market, could have a material adverse effect on the demand for the electronic components supplied by the Company to its customers; (iv) the company's ability to continue to make significant capital expenditures for equipment, expansion of operations, and research and development is dependent upon funds generated from operations and the availability of capital from other sources; (v) the extremely competitive conditions that currently exist in the automotive and datacommunications markets are expected to continue, including development of new technologies, the introduction of new products, and the reduction of prices; (vi) the Company fails to achieve levels of sales growth and operational performance that sustains sufficient cash flow to operate the business and satisfy existing covenants with the Company's lenders; and (vii) interruptions in the Company's operations or those of any of its suppliers or major customers as such may be caused by problems arising from the Year 2000. The foregoing list should not be construed as exhaustive and the Company disclaims any obligation subsequently to revise any forward-looking statements to reflect the events or circumstances after the date of such statements or to reflect the occurrence of anticipated or unanticipated events. PART II - OTHER INFORMATION SHELDAHL, INC. AND SUBSIDIARY FORM 10-Q Item 6. Exhibits and Reports on Form 8-K A) Exhibits 27 Financial data schedule B) Reports on Form 8-K None. 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. SHELDAHL, INC. (Registrant) Dated: January 10, 2000 By: /s/ Edward L. Lundstrom President and Chief Executive Officer Dated: January 10, 2000 By: /s/ Jill D. Burchill Vice President and Chief Financial Officer EX-27 2
5 THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM THE NOVEMBER 26, 1999 FINANCIAL STATEMENTS AND IS QUALIFIED IN ITS ENTIRETY BY REFERENCE TO SUCH FINANCIAL STATEMENTS. 3-MOS SEP-01-2000 NOV-26-1999 2134 0 24184 330 18561 45513 159259 80015 125681 24093 0 0 40 2904 60499 125681 34811 34811 30054 6159 0 0 916 1402 0 1402 0 0 0 1910 .16 .16
-----END PRIVACY-ENHANCED MESSAGE-----