-----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, BW78gTMoJn0OdO/vA81IipIfYLw8p8MiC8JvDB6ED9OAnZN3Qf9nCr2G4O7scGg1 uS4CKga1wQOZkWrBc+BbBg== 0000889697-99-000125.txt : 19990812 0000889697-99-000125.hdr.sgml : 19990812 ACCESSION NUMBER: 0000889697-99-000125 CONFORMED SUBMISSION TYPE: 10-Q PUBLIC DOCUMENT COUNT: 4 CONFORMED PERIOD OF REPORT: 19990630 FILED AS OF DATE: 19990811 FILER: COMPANY DATA: COMPANY CONFORMED NAME: SIMPSON INDUSTRIES INC CENTRAL INDEX KEY: 0000090588 STANDARD INDUSTRIAL CLASSIFICATION: MOTOR VEHICLE PARTS & ACCESSORIES [3714] IRS NUMBER: 381225111 STATE OF INCORPORATION: MI FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 10-Q SEC ACT: SEC FILE NUMBER: 000-06611 FILM NUMBER: 99684332 BUSINESS ADDRESS: STREET 1: 47603 HALYARD DR CITY: PLYMOUTH STATE: MI ZIP: 48170 BUSINESS PHONE: 3132076200 MAIL ADDRESS: STREET 1: 47603 HALYARD DR CITY: PLYMOUTH STATE: MI ZIP: 48170 10-Q 1 ============================================================================= SECURITIES AND EXCHANGE COMMISSION WASHINGTON, D.C. 20549 FORM 10-Q Quarterly Report Under Section 13 or 15(d) of the Securities Exchange Act of 1934 For Quarter Ended June 30, 1999 Commission File Number 0-6611 SIMPSON INDUSTRIES, INC. (Exact name of registrant as specified in its charter) Michigan 38-1225111 (State or other jurisdiction of IRS Employer Identification No.) incorporation or organization) 47603 Halyard Drive, Plymouth, Michigan 48170-2429 (Address of principal executive offices) (Zip Code) (734)207-6200 (Registrant's telephone number, including area code) (Former name, former address and former fiscal year, if changed since last report) Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months and (2) has been subject to such filing requirements for the past 90 days. Yes __X__ No At July 31, 1999 there were 18,021,211 outstanding shares of the registrant's common stock, $1.00 par value each. Consolidated Balance Sheets (In thousands) June 30, 1999 and December 31, 1998 June 30 (Unaudited) Dec. 31 ----------- ------- ASSETS Current Assets Cash and cash equivalents $ 3,724 $ 6,145 Accounts receivable 81,394 72,785 Inventories 17,847 22,866 Customer tooling in process 3,936 1,749 Prepaid expenses and other current assets 12,144 10,994 -------- -------- Total Current Assets 119,045 114,539 Property, Plant and Equipment Cost 343,467 328,609 Less Allowance 169,108 158,724 -------- -------- Total Property, Plant and Equipment 174,359 169,885 Intangible Assets - net 48,512 52,192 Other Assets 3,159 3,938 -------- -------- $345,075 $340,554 ======== ======== LIABILITIES AND SHAREHOLDERS' EQUITY Current Liabilities Current installment of long-term debt $ 4,079 $ 4,829 Notes payable 1,300 -- Accounts payable 58,723 52,039 Compensation and amounts withheld 11,438 11,694 Taxes, other than income taxes 4,172 2,483 Other current liabilities 10,958 11,298 -------- -------- Total Current Liabilities 90,670 82,343 Long-term debt, excluding current installment 97,745 105,534 Accrued Retirement Benefits and Other 16,836 17,312 Deferred Income Taxes 11,239 10,797 Shareholders' Equity 128,585 124,568 -------- -------- $345,075 $340,554 ======== ======== See accompanying notes to consolidated financial statements.
Consolidated Statements of Operations (Unaudited) (Dollars in thousands, except per share amounts) Periods Ended June 30, 1999 and 1998 Three Months Six Months ------------------ ------------------ 1999 1998 1999 1998 ---- ---- ---- ---- Net sales $ 139,399 $ 128,704 $ 272,501 $ 254,260 Costs and expenses: Cost of products sold 123,237 113,848 242,000 225,781 Administrative and selling 2,748 3,417 5,524 6,462 Amortization 504 482 1,025 940 ---------- ---------- ---------- ---------- 126,489 117,747 248,549 233,183 ---------- ---------- ---------- ---------- Operating Earnings 12,910 10,957 23,952 21,077 Investment and other income, net (13) (252) (109) (325) Interest expense (2,184) (2,502) (4,316) (4,945) ---------- ---------- ---------- ---------- Earnings Before Income Taxes 10,713 8,203 19,527 15,807 Income taxes 3,750 2,517 6,835 5,216 ---------- ---------- ---------- ---------- Net Earnings $ 6,963 $ 5,686 $ 12,692 $ 10,591 ========== ========== ========== ========== Comprehensive Income - net $ 5,687 $ 4,764 $ 7,305 $ 9,273 ========== ========== ========== ========== Basic Earnings Per Share $ 0.39 $ 0.31 $ 0.70 $ 0.58 Diluted Earnings Per Share $ 0.38 $ 0.31 $ 0.70 $ 0.58 Cash dividends per share $ 0.10 $ 0.10 $ 0.20 $ 0.20 Average number of common equivalent shares: Basic 18,065,871 18,415,792 18,105,252 18,297,418 Diluted 18,098,138 18,549,620 18,129,674 18,418,755 See accompanying notes to consolidated financial statements.
Consolidated Statements of Cash Flows (Unaudited) (In thousands) Six Months Ended June 30, 1999 and 1998 1999 1998 ---- ---- OPERATING ACTIVITIES Net earnings $ 12,692 $ 10,591 Depreciation 13,790 13,072 Provision for deferred income taxes 442 565 Amortization of restricted stock 284 250 (Gain) loss on disposition of assets 57 159 Changes in operating assets and liabilities, net of effects of acquisition of business 488 (11,040) -------- -------- Cash Provided By Operating Activities 27,753 13,597 INVESTING ACTIVITIES Capital expenditures (19,775) (9,291) Proceeds from disposal of property and equipment 112 375 -------- -------- Cash Used In Investing Activities (19,663) (8,916) FINANCING ACTIVITIES Cash dividends paid (3,621) (3,664) Notes Payable, net 1,300 (1,212) Proceeds (repayments) of long-term debt, net (8,539) (2,751) Cash used in stock transactions, net (1,389) (745) -------- -------- Cash Used In Financing Activities (12,249) (8,372) Effect of foreign currency exchange rate changes 1,738 (991) -------- -------- Decrease In Cash and Cash Equivalents (2,421) (4,682) Cash and cash equivalents at beginning of period 6,145 8,235 -------- -------- Cash and Cash Equivalents at End of Period $ 3,724 $ 3,553 ======== ======== Supplemental Disclosures Cash paid during the year for: Interest $ 3,459 $ 4,803 Income Taxes 6,827 5,992 See accompanying notes to consolidated financial statements. ITEM 2: NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS Note 1. Significant Accounting Principles The accompanying unaudited consolidated financial statements have been prepared in accordance with generally accepted accounting principles for interim financial reporting. In the opinion of management, all adjustments (consisting of normal recurring accruals) considered necessary for a fair presentation have been included. The results of operations for the period ended June 30, 1999 are not necessarily indicative of the results to be expected for the year ending December 31, 1999. Note 2. Lines of Credit The Company maintains credit lines that allow for borrowings of up to $25 million under a five-year agreement and up to $50 million under a 364-day agreement. At June 30, 1999, there were no borrowings outstanding under the five-year agreement or the 364-day agreement. In June of 1999, the 364-day agreement was renewed. Borrowings under the five-year agreement are classified as long-term based on management's intent and ability to maintain this level of borrowing for a period in excess of one year. ITEM 2: MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS Net sales for the second quarter of 1999 were a record $139.4 million, an increase of 8.3%, or $10.7 million, over the second quarter of 1998. Year-to-date sales increased 7.2%, or $18.2 million from the first half of 1998. Demand in North America, from both our automotive and heavy-duty customers, continued to be strong. Sales to the "Big Three" (GM, Ford and Daimler/Chrysler) grew 12% this quarter versus the second quarter of 1998. Sales to our heavy-duty and mid-range diesel customers grew 7%. European volumes were also up, although second quarter 1999 U.S. dollar translated sales were less than second quarter 1998 due to a stronger U.S. dollar. Cost of products sold as a percent of sales decreased from 88.5% in the second quarter of 1998 to 88.4% this quarter. Cost of products sold as a percentage of sales for the first six months of 1999 compared to the first half of 1998 remained constant at 88.8%. Administrative and selling expenses decreased from $3.4 million, or 2.7% of sales, in the second quarter of 1998 to $2.7 million, or 2.0% of sales, in the second quarter of 1999; administrative and selling expenses for the first six months of 1999 decreased from $6.5 million, or 2.5% of sales, in 1998 to $5.5 million, or 2.0% of sales. Our overall cost structure has benefited from the restructuring initiatives we took in 1997 and 1998. Interest expense decreased from $4.9 million, or 1.9% of sales, in the first six months of 1998 to $4.3 million, or 1.6% of sales in the first six months of 1999. Second quarter interest expense decreased from $2.5 million in 1998, or 1.9% of sales, to $2.2 million in 1999, or 1.6% of sales. The decrease was primarily due to lower levels of outstanding debt. Reflecting the strong sales growth and cost initiatives noted above, second quarter operating earnings increased 17.8%, from $11.0 million in 1998 to $12.9 million in 1999. Operating earnings for the first six months grew from $21.0 million in 1998 to $24.0 million in 1999, an increase of 13.6%. In addition, and despite a higher effective tax rate, net earnings rose 22.5%, from $5.7 million in the second quarter of 1998 to a record $7.0 million in the second quarter of 1999; net earnings rose 19.8% for the first six months of 1999, from $10.6 million to $12.7 million. Cash flow from operations was $27.8 million for the first six months of 1999, an increase of $14.2 million from the first six months of 1998. Net cash used in investing activities totaled $19.7 million for the six months ended June 30, 1999, up $10.8 million from the $8.9 million used in the first half of 1998. Strong earnings and working capital management more than offset a significant increase in expenditures for equipment. These expenditures represent the Company's investment in production capacity for new automotive, light truck and diesel engine programs. Cash flow used in financing activities increased $3.9 million, from $8.4 million through June 1998 to $12.3 million through June 1999. The Company believes that cash flows from operations and available credit facilities will be sufficient to meet its debt service requirements, projected capital expenditures and dividends, and working capital requirements. The Company maintains credit lines that allow for borrowings of up to $25 million under a five-year agreement and up to $50 million under a 364-day agreement. At June 30, 1999, there were no borrowings outstanding under the five-year agreement or the 364-day agreement. In June of 1999, the 364-day agreement was renewed. Many computer systems and software products refer to years in terms of their final two digits only. Such programs may interpret the year 2000 to mean the year 1900 instead. If not corrected, these programs could cause date-related transaction failures. Although we currently believe that our systems are Year 2000 compliant in all material respects, our current systems may contain undetected errors or defects with Year 2000 date functions that may result in material costs. In 1997, we developed a compliance assurance process to address the problem. A project team, headed by the Vice President - Information Technology, has performed a detailed assessment of all internal computer systems, and computing-related equipment in all facilities. Our primary vendors, material suppliers, service suppliers and banks have been asked to verify their Year 2000 readiness. Overall, Simpson has implemented new business systems across the corporation and has installed a new midrange and personal computing infrastructure. There is no computing technology imbedded in our manufactured products. Shop floor machine tool controllers have tested successfully. Although we currently believe that our systems are Year 2000 compliant in all material respects, our current systems may contain undetected errors or defects with Year 2000 date functions that may result in material costs. Simpson's Year 2000 program includes: Global business systems: Year 2000 business computing issues have been minimized in North America by the implementation of a new enterprise system. The new system received Year 2000 certification from the Information Technology Association of America (ITAA) and has been implemented at all North American locations. Implemented modules included finance, purchasing, manufacturing, human resources and payroll. Simpson has modified and successfully tested remaining legacy systems. European operations have implemented new systems that have been certified as Year 2000 ready and have tested accordingly. Global engineering systems: Year 2000 engineering computing issues have been minimized by the implementation of a Year 2000 compliant product data management system. Global computer aided engineering (CAE) software and hardware have been remediated and tested and are compliant. Central computing: Simpson installed a new Year 2000 ready AS/400 computer and operating system in December 1998. Other AS/400 software consists of third party packages under provider maintenance. Third party software readiness has been confirmed with suppliers and all software has been upgraded to Year 2000 ready. Each European location has new Year 2000 ready AS/400 hardware and software. End user computing: In North America, Simpson has replaced desktop/laptop computers and software. The new equipment and software configuration have been thoroughly tested. Simpson's end user computing environment consists mostly of Microsoft products, which are Year 2000 ready. In Europe, Year 2000 compliance personal computer testing has been completed and minor exceptions are being remediated. Environmental operations: Year 2000 impact on environmental operations has been determined. HVAC, building security systems, phone systems, fire alarm systems, uninterruptable power supplies (UPS), and building/plant utilities have been remediated, as required. Manufactured Products: Simpson products have been reviewed for Year 2000 compliance. Manufactured products do not use embedded microprocessor technology nor do they rely on microprocessor technology for operation. Shop floor and Technical Center: In North America, machine tools are stand-alone (vs. integrated in a computing network). Machine tool controllers have been tested and experienced no Year 2000 problems. In Europe and Brazil, PLC vendors have been contacted and, for the most part, report compliance. Simpson suppliers, agents, and service providers: Direct material suppliers were contacted in September 1997 with a follow-up mailing in October 1998. A two-day audit was conducted at five key suppliers. A similar Year 2000 questionnaire was sent to indirect material suppliers in December 1998. Key agents and service providers, including utility companies (gas, electric, and water), banks, telephone and data communications providers, have been contacted. Replies indicate readiness by all key agents and service providers. Additionally, our midrange-computing service provider is Year 2000 compliant. Our European locations have pursued a similar direction with key suppliers and service providers, who have indicated they are Year 2000 compliant. Contingency Plans: Simpson will manage Year 2000 business interruptions as it would any other business interruptions. Simpson has developed contingency plans relating to Year 2000 and those plans will be continuously reviewed and revised as we learn more about the potential environment. These contingency plans would allow Simpson to operate certain critical functions for a short period of time without the intervention of computers. However, the contingency plans are expected to provide relief for only a short period of time, after which interruptions in the Company's normal business activities could have a material adverse effect on the Company's operations. This report contains forward-looking statements within the meaning of the Securities Exchange Act of 1934. These statements, including those relating to future outlook and operating performance, Year 2000 compliance and other statements regarding the belief or current expectations of the company, involve risks and uncertainties. Accordingly, actual results may differ materially as a result of various factors including, but not limited to, general economic conditions in the markets in which the company operates, fluctuation in demand for the company's products, the activities of competitors, and various other factors outside of the company's control. The company does not intend to update these forward-looking statements. Exhibit (10.25) - Second Amendment to Credit Agreement Part II. Other Information ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K (a) The following exhibits are filed as part of this report. Exhibit No. Description ----------- ----------- 10.25 Second Amendment to Credit Agreement (364 Day), dated June 15, 1999, among Simpson Industries, Inc., certain other Borrowers, certain Commercial Lending Institutions, ABN AMRO Bank N.V., and Comerica Bank 11 Computation of Earnings Per Share 27 Financial Data Schedule (b) Reports on Form 8-K No reports on Form 8-K were filed during the quarter ended June 30, 1999. EX-10.25 2 SECOND AMENDMENT TO CREDIT AGREEMENT (364 DAY) THIS SECOND AMENDMENT TO CREDIT AGREEMENT (364 Day), dated as of June 15, 1999 (this "Amendment"), amends the Credit Agreement (364 Day), dated as of June 17, 1997 (the "Credit Agreement"), among SIMPSON INDUSTRIES, INC., a Michigan corporation ("Simpson"), certain subsidiaries of Simpson (together with Simpson, the "Borrowers"), the various financial institutions parties thereto (collectively, the "Lenders") and ABN AMRO BANK N.V, as agent (the "Agent") for the Lenders. Terms defined in the Credit Agreement are, unless otherwise defined herein or the context otherwise requires, used herein as defined therein. WHEREAS, the parties hereto have entered into the Credit Agreement, which provides for the Lenders to extend certain credit facilities to the Borrowers from time to time; WHEREAS, the parties amended the Credit Agreement (the "First Amendment")in certain respects on June 16, 1998; and WHEREAS, the parties hereto desire to amend the Credit Agreement again in certain respects as hereinafter set forth; NOW, THEREFORE, in consideration of the premises and for other good and valuable consideration (the receipt and sufficiency of which are hereby acknowledged), the parties hereto agree as follows: SECTION 1. AMENDMENTS. Effective as of June 15, 1999, the Credit Agreement shall be amended in accordance with Sections 1.1 through 1.10 below. SECTION 1.1. Defined Terms. The definition of "Commitment Amount" in Section 1.1 of the Credit Agreement is hereby amended to read in its entirety as follows: "'Commitment Amount' means, on any date, $50,000,000 as such amount may be reduced from time to time pursuant to Section 2.2." SECTION 1.2. Defined Terms. Section 1.1 of the Credit Agreement is hereby amended by the insertion of the following definition in appropriate alphabetical order: "`Commitment Fee Rate' means for any period beginning on (and including) a Margin Determination Date until (but excluding) the next Margin Determination Date, a percentage equal to the Commitment Fee Rate set forth in the table in the definition of "Margin" corresponding to the Funded Debt to EBITDA Ratio as at the end of the Fiscal Quarter immediately preceding such Margin Determination Date." SECTION 1.3. Defined Terms. The definition of "Margin" in Section 1.1 of the Credit Agreement is hereby amended to read in its entirety as follows: "'Margin' means, for any period beginning on (and including) a Margin Determination Date until (but excluding) the next Margin Determination Date, a percentage equal to the Margin set forth in the following table corresponding to the Funded Debt to EBITDA Ratio as at the end of the Fiscal Quarter immediately preceding such Margin Determination Date:
Commitment Fee Margin for Rate for Unused Commercial Margin for Euro- Portion of Loan Standby Letter Letter of Funded Debt to Prime currency Commitment of Credit Face Credit Face Level EBITDA Ratio Rate Loans Loans Availability Amount Fee Amount Fee - ----- -------------- ---------- ---------- --------------- -------------- ----------- I Greater than 3.0:1.0 0.00% 1.000% 0.255% 1.000% 0.30% II Less than or equal to 3.0:1.0, but greater than 2.50:1.0 0.00% 0.90% 0.20% 0.90% 0.27% III Less than or equal to 2.50:1.0, but greater than 2.00:1.0 0.00% 0.75% 0.175% 0.75% 0.225% IV Less than or equal to 2.00:1.0, but greater than 1.50:1.0 0.00% 0.60% 0.15% 0.60% 0.18% V Less than or equal to 1.5:1.0 0.00% 0.50% 0.15% 0.50% 0.15%
Notwithstanding the foregoing, in the event Simpson fails to report the Funded Debt to EBITDA Ratio at the end of any Fiscal Quarter by the Margin Determination Date following such Fiscal Quarter, "Margin" and "Commitment Fee Rate" shall mean the Margin and Commitment Fee Rate set forth in Level I. Nothing in this definition shall constitute a waiver of the financial covenant set forth in Section 8.2.3(b) or limit the right of the Lenders to receive interest at the rates set forth in Section 3.2.2 hereof." SECTION 1.4. Defined Terms. The definition of "Stated Maturity Date" in Section 1.1 of the Credit Agreement is hereby amended by the deletion of the date "June 15, 1999" (amended to read as such by the First Amendment) and the substitution therefor of the date "June 14, 2000." SECTION 1.5. Defined Terms. Section 1.1 of the Credit Agreement is hereby amended by the insertion of the following definition in appropriate alphabetical order: "`Utilization Fee' is defined in Section 3.3.6." SECTION 1.6. Defined Terms. Section 1.1 of the Credit Agreement is hereby amended by the insertion of the following definition in appropriate alphabetical order: "`Year 2000 Problem' means the risk that computer applications used by the Borrower may be unable to recognize and properly perform certain date-sensitive functions involving certain dates prior to, and any date after, December 31, 1999." SECTION 1.7. Commitment Fee. Section 3.3.1(a) of the Credit Agreement is hereby amended to state in its entirety as follows: "SECTION 3.3.1. Commitment Fee. (a) Simpson agrees to pay to the Agent for the account of each Lender, for the period (including any portion thereof when its Commitment is suspended by reason of the Borrowers' inability to satisfy any condition of Article VI) commencing on the Effective Date and continuing through the Commitment Termination Date, a commitment fee on such Lender's Percentage of the average daily Dollar Amount of the unused portion of the Loan Commitment Availability at a rate equal to the applicable Commitment Fee Rate;" SECTION 1.8. Letter of Credit Fronting Fee. Section 3.3.4. of the Credit Agreement is hereby amended to state in its entirety as follows: "Section 3.3.4. Letter of Credit Fronting Fee. The applicable Borrower agrees to pay to the Issuer for its own account a fronting fee for each Letter of Credit issued on the application of such Borrower for the period from and including the date of the issuance of such Letter of Credit to (but not including) the date upon which each Letter of Credit expires, of 0.05% (in the case of a standby Letter of Credit) or 0.05% (in the case of a commercial Letter of Credit) of the face amount of such Letter of Credit (which face amount shall be reduced by any reductions in such Letters of Credit pursuant to Section 4.1(c) hereof). Such fee shall be payable in immediately available funds on the date of issuance of such Letter of Credit." SECTION 1.9. Utilization Fees. Section 3.3.6. of the Credit Agreement is hereby created to state in its entirety as follows: "Section 3.3.6 Utilization Rates. (a) The applicable Borrower agrees to pay to the Agent, for the account of the Lenders, a per annum utilization fee (the "Utilization Fee") on all Outstandings of .075% during any period that the Outstandings exceed 50% of the total Commitment Amount. (b) For purposes of determining the Utilization Fee, the average daily Dollar Amount of all outstanding Loans and the unused portion of the Loan Commitment Availability shall be determined as of each applicable Determination Date; and (c) Such fee shall be payable in Dollars in immediately available funds in arrears on each Quarterly Payment Date." SECTION 1.10. Representations and Warranties. Section 7.16. of the Credit Agreement is hereby created to state in its entirety as follows: "Section 7.16. Year 2000 Problem. The Borrower has reviewed the areas within its business and operations which could be adversely affected by, and has developed or is developing a program to address on a timely basis, the Year 2000 Problem, and has made related appropriate inquiry of its material suppliers and vendors. Based on such review and program, the Borrower believes that the Year 2000 Problem will not have a Material Adverse Effect on the Borrower." SECTION 2. CONDITIONS PRECEDENT. This Amendment shall become effective when each of the conditions precedent set forth in this Section 2 shall have been satisfied, and notice thereof shall have been given by the Agent to Simpson and the Lenders. SECTION 2.1. Receipt of Documents. The Agent shall have received all of the following documents duly executed, dated the date hereof or such other date as shall be acceptable to the Agent, and in form and substance satisfactory to the Agent: (a) Amendment. This Amendment, duly executed by Simpson, the Agent and the Lenders. (b) Secretary's Certificate. A certificate of the secretary or an assistant secretary of Simpson, as to (i) resolutions of the Board of Directors of Simpson then in full force and effect authorizing the execution, delivery and performance of this Amendment and each other document described herein, and (ii) the incumbency and signatures of those officers of Simpson authorized to act with respect to this Amendment and each other document described herein. SECTION 2.2. Compliance with Warranties, No Default, etc. Both before and after giving effect to the effectiveness of this Amendment, the following statements by Simpson shall be true and correct (and Simpson, by its execution of this Amendment, hereby represents and warrants to the Agent and each Lender that such statements are true and correct as at such times): (a) the representations and warranties set forth in Article VII of the Credit Agreement shall be true and correct with the same effect as if then made (unless stated to relate solely to an earlier date, in which case such representations and warranties shall be true and correct as of such earlier date); and (b) no Default shall have then occurred and be continuing. SECTION 2.3. Payment of all fees. Simpson shall have paid an up front fee to each Lender of .05% of the increase (caused by this Amendment) to each Lender's Commitment. SECTION 3. REPRESENTATIONS AND WARRANTIES. To induce the Lenders and the Agent to enter into this Amendment, Simpson hereby represents and warrants to the Agent and each Lender as follows: SECTION 3.1. Due Authorization, Non-Contravention, etc. The execution, delivery and performance by Simpson of this Amendment are within Simpson's corporate powers, have been duly authorized by all necessary corporate action, and do not (a) contravene Simpson's Organic Documents; (b) contravene any contractual restriction, law or governmental regulation or court decree or order binding on or affecting Simpson; or (c) result in, or require the creation or imposition of, any Lien on any of Simpson's properties. SECTION 3.2. Government Approval, Regulation, etc. No authorization or approval or other action by, and no notice to or filing with, any governmental authority or regulatory body or other Person is required for the due execution, delivery or performance by Simpson of this Amendment. SECTION 3.3. Validity, etc. This Amendment constitutes the legal, valid and binding obligation of Simpson enforceable in accordance with its terms. SECTION 4. MISCELLANEOUS. SECTION 4.1. Continuing Effectiveness, etc. This Amendment shall be deemed to be an amendment to the Credit Agreement, and the Credit Agreement, as amended hereby, shall remain in full force and effect and is hereby ratified, approved and confirmed in each and every respect. After the effectiveness of this Amendment in accordance with its terms, all references to the Credit Agreement in the Loan Documents or in any other document, instrument, agreement or writing shall be deemed to refer to the Credit Agreement as amended hereby. SECTION 4.2. Payment of Costs and Expenses. Simpson agrees to pay on demand all expenses of the Agent (including the fees and out-of-pocket expenses of counsel to the Agent) in connection with the negotiation, preparation, execution and delivery of this Amendment. SECTION 4.3. Severability. Any provision of this Amendment which is prohibited or unenforceable in any jurisdiction shall, as to such provision and such jurisdiction, be ineffective to the extent of such prohibition or unenforceability without invalidating the remaining provisions of this Amendment or affecting the validity or enforceability of such provision in any other jurisdiction. SECTION 4.4. Headings. The various headings of this Amendment are inserted for convenience only and shall not affect the meaning or interpretation of this Amendment or any provisions hereof. SECTION 4.5. Execution in Counterparts. This Amendment may be executed by the parties hereto in several counterparts, each of which shall be deemed to be an original and all of which shall constitute together but one and the same agreement. SECTION 4.6. Governing Law. THIS AMENDMENT SHALL BE DEEMED TO BE A CONTRACT MADE UNDER AND GOVERNED BY THE INTERNAL LAWS OF THE STATE OF ILLINOIS. SECTION 4.7. Successors and Assigns. This Amendment shall be binding upon and shall inure to the benefit of the parties hereto and their respective successors and assigns. IN WITNESS WHEREOF, the parties hereto have caused this Amendment to be executed by their respective officers thereunto duly authorized as of the day and year first above written. SIMPSON INDUSTRIES, INC. By -------------------------------- Title: ------------------------ ABN AMRO BANK N.V., Chicago Branch, individually and as Agent By -------------------------------- Title: ------------------------ By -------------------------------- Title: ------------------------ COMERICA BANK, individually and as Documentation Agent By -------------------------------- Title: ------------------------ HARRIS TRUST AND SAVINGS BANK By -------------------------------- Title: ------------------------ THE BANK OF NEW YORK By -------------------------------- Title: ------------------------ EX-11 3 Exhibit (11) - Computation of Earnings Per Share
Three Months Ended Six Months Ended June 30 June 30 ------------------ ----------------- 1999 1998 1999 1998 ---- ---- ---- ---- Basic: Average shares outstanding 18,065,871 18,415,792 18,105,252 18,297,418 =========== =========== =========== =========== Net earnings applicable to common stock and common stock equivalents $ 6,963,000 $ 5,686,000 $12,692,000 $10,591,000 =========== =========== =========== =========== Basic earnings per share $0.39 $0.31 $0.70 $0.58 ===== ===== ===== ===== Diluted: Average shares outstanding 18,065,871 18,415,792 18,105,252 18,297,418 Net effect of dilutive stock options based on treasury stock method using the average market price to common stock and common stock equivalents 32,267 133,828 24,422 121,337 ----------- ----------- ----------- ----------- Average number of common shares and common equivalent shares 18,098,138 18,549,620 18,129,674 18,418,755 =========== =========== =========== =========== Net earnings applicable to common stock and common stock equivalents $ 6,963,000 $ 5,686,000 $12,692,000 $10,591,000 =========== =========== =========== =========== Diluted earnings per share $0.38 $0.31 $0.70 $0.58 ===== ===== ===== =====
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. SIMPSON INDUSTRIES, INC. Registrant August 11, 1999 /s/Vinod M. Khilnani Vinod M. Khilnani Vice President and Chief Financial Officer EX-27 4
5 THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM THE COMPANY'S UNAUDITED FINANCIAL STATEMENTS AS OF AND FOR THE PERIOD ENDING JUNE 30, 1999, AND IS QUALIFIED IN ITS ENTIRETY BY REFERENCE TO SUCH FINANCIAL STATEMENTS 1,000 DEC-31-1999 JUN-30-1999 6-MOS 3,724 0 81,394 0 17,847 119,045 343,467 169,108 345,075 90,670 0 18,038 0 0 110,547 345,075 272,501 272,392 242,000 6,549 0 0 4,316 19,527 6,835 12,692 0 0 0 12,692 0.70 0.70
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