-----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, Wr0WOtlJbTwZXzCLkRHnfBsAbjj6AXLIIjHkQN2/Ukgm3EsQFv2zSs6x/yqpSVli CPAVv/WeefNV/1Nh7E0Ukw== 0000099106-02-000011.txt : 20020814 0000099106-02-000011.hdr.sgml : 20020814 20020814162027 ACCESSION NUMBER: 0000099106-02-000011 CONFORMED SUBMISSION TYPE: 10-Q PUBLIC DOCUMENT COUNT: 3 CONFORMED PERIOD OF REPORT: 20020630 FILED AS OF DATE: 20020814 FILER: COMPANY DATA: COMPANY CONFORMED NAME: TRANS LUX CORP CENTRAL INDEX KEY: 0000099106 STANDARD INDUSTRIAL CLASSIFICATION: MISCELLANEOUS MANUFACTURING INDUSTRIES [3990] IRS NUMBER: 131394750 STATE OF INCORPORATION: DE FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 10-Q SEC ACT: 1934 Act SEC FILE NUMBER: 001-02257 FILM NUMBER: 02736871 BUSINESS ADDRESS: STREET 1: 110 RICHARDS AVE CITY: NORWALK STATE: CT ZIP: 06856-5090 BUSINESS PHONE: 2038534321 MAIL ADDRESS: STREET 1: 110 RICHARDS AVENUE CITY: NORWALK STATE: CT ZIP: 06856-5090 10-Q 1 jun0210q.txt 10Q FOR QUARTER ENDED 06/30/2002 UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM 10-Q [X] QUARTERLY REPORT PURSUANT TO SECTION 13 or 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the quarterly period ended June 30, 2002 ------------- Commission file number 1-2257 ------ TRANS-LUX CORPORATION ---------------------------------------------------- (Exact name of registrant as specified in its charter) Delaware 13-1394750 - ------------------------------- ------------------- (State or other jurisdiction of (I.R.S. Employer incorporation or organization) Identification No.) 110 Richards Avenue, Norwalk, CT 06856-5090 - ---------------------------------------- ---------- (Address of principal executive offices) (Zip code) (203) 853-4321 ---------------------------------------------------- (Registrant's telephone number, including area code) 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 --- --- Indicate the number of shares outstanding of each of the issuer's classes of Common Stock, as of the latest practicable date. Date Class Shares Outstanding 8/13/02 Common Stock - $1.00 Par Value 973,243 8/13/02 Class B Stock - $1.00 Par Value 287,505 (Immediately convertible into a like number of shares of Common Stock.) TRANS-LUX CORPORATION AND SUBSIDIARIES Table of Contents Page No. Part I - Financial Information Item 1. Consolidated Balance Sheets -June 30, 2002 and December 31, 2001 (unaudited) 1 Consolidated Statements of Operations - Three and Six Months Ended June 30, 2002 and 2001 (unaudited) 2 Consolidated Statements of Cash Flows - Six Months Ended June 30, 2002 and 2001 (unaudited) 3 Notes to Consolidated Financial Statements (unaudited) 4 Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations 7 Item 3. Quantitative and Qualitative Disclosures about Market Risk 11 Part II - Other Information Item 4. Submission of Matters to a Vote of Stockholders 12 Item 6. Exhibits and Reports on Form 8-K 12 Signatures 13 Part I - Financial Information ------------------------------ TRANS-LUX CORPORATION AND SUBSIDIARIES CONSOLIDATED BALANCE SHEETS (unaudited)
June 30 December 31 In thousands, except share data 2002 2001 - ------------------------------------------------------------------------------------------------------ ASSETS Current assets: Cash and cash equivalents $ 6,614 $ 5,699 Available-for-sale securities 525 530 Receivables, less allowance of $874 in 2002 and $465 in 2001 9,494 9,503 Unbilled receivables 1,437 830 Inventories 7,112 6,837 Prepaids and other 799 762 -------- -------- Total current assets 25,981 24,161 -------- -------- Equipment on rental 88,423 86,147 Less accumulated depreciation 43,063 39,328 -------- -------- 45,360 46,819 -------- -------- Property, plant and equipment 48,287 47,944 Less accumulated depreciation and amortization 11,832 10,729 -------- -------- 36,455 37,215 Intangibles 47 67 Goodwill 1,264 1,264 Other assets 4,113 4,371 -------- -------- $113,220 $113,897 ======== ======== LIABILITIES AND STOCKHOLDERS' EQUITY Current liabilities: Accounts payable $ 3,124 $ 4,614 Accrued liabilities 5,813 6,230 Current portion of long-term debt 4,816 3,331 -------- -------- Total current liabilities 13,753 14,175 -------- -------- Long-term debt: 7 1/2% convertible subordinated notes due 2006 30,177 30,177 9 1/2% subordinated debentures due 2012 1,057 1,057 Notes payable 37,051 38,016 -------- -------- 68,285 69,250 Deferred revenue, deposits and other 2,551 2,930 Deferred income taxes 5,017 3,974 -------- -------- Stockholders' equity: Capital stock Common - $1 par value - 5,500,000 shares authorized 2,452,900 shares issued in 2002 and 2001 2,453 2,453 Class B - $1 par value - 1,000,000 shares authorized 287,505 shares issued in 2002 and 2001 287 287 Additional paid-in-capital 13,901 13,901 Retained earnings 19,383 19,360 Accumulated other comprehensive loss (573) (596) -------- -------- 35,451 35,405 Less treasury stock - at cost - 1,479,688 shares in 2002 and 2001 (excludes additional 287,505 shares held in 2002 and 2001 for conversion of Class B stock) 11,837 11,837 -------- -------- Total stockholders' equity 23,614 23,568 -------- -------- $113,220 $113,897 ======== ======== - ------------------------------------------------------------------------------------------------------- The accompanying notes are an integral part of these consolidated financial statements.
1 TRANS-LUX CORPORATION AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF OPERATIONS (unaudited)
THREE MONTHS ENDED SIX MONTHS ENDED JUNE 30 JUNE 30 ------------------ ------------------ In thousands, except per share data 2002 2001 2002 2001 - ------------------------------------------------------------------------------------------------------- Revenues: Equipment rentals and maintenance $ 5,153 $ 6,064 $10,782 $12,556 Equipment sales 9,894 7,807 18,013 15,753 Theatre receipts and other 3,939 3,205 7,353 6,164 ------ ------ ------ ------ Total revenues 18,986 17,076 36,148 34,473 ------ ------ ------ ------ Operating expenses: Cost of equipment rentals and maintenance 3,405 3,359 6,758 6,714 Cost of equipment sales 7,432 5,348 13,379 11,009 Cost of theatre receipts and other 2,957 2,638 5,485 4,881 ------ ------ ------ ------ Total operating expenses 13,794 11,345 25,622 22,604 ------ ------ ------ ------ Gross profit from operations 5,192 5,731 10,526 11,869 General and administrative expenses 4,243 4,243 8,511 9,061 ------ ------ ------ ------ 949 1,488 2,015 2,808 Interest income 95 31 118 76 Interest expense (1,133) (1,453) (2,305) (2,894) Other income (expense) 43 (36) 58 16 Income from joint venture 164 103 316 173 ------ ------ ------ ------ Income before income taxes 118 133 202 179 Provision for income taxes 53 59 91 80 ------ ------ ------ ------ Net income $ 65 $ 74 $ 111 $ 99 ====== ====== ====== ====== Earnings per share - basic and diluted $ 0.05 $ 0.06 $ 0.09 $ 0.08 Average common shares outstanding - basic and diluted 1,261 1,261 1,261 1,261 Cash dividends per share: Common stock $ 0.035 $ 0.035 $ 0.070 $ 0.070 Class B stock $0.0315 $0.0315 $0.0630 $0.0630 - ------------------------------------------------------------------------------------------------------- The accompanying notes are an integral part of these consolidated financial statements.
2 TRANS-LUX CORPORATION AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF CASH FLOWS (unaudited)
SIX MONTHS ENDED JUNE 30 ------------------- In thousands 2002 2001 - ------------------------------------------------------------------------------------------------ Cash flows from operating activities Net income $ 111 $ 99 Adjustment to reconcile net income to net cash provided by operating activities: Depreciation and amortization 5,073 4,836 Income from joint venture (316) (173) Deferred income taxes 993 80 Writedown of assets held for sale - 56 Gain on repurchase of Company's 7 1/2% convertible subordinated notes - (5) Changes in operating assets and liabilities: Receivables (598) 156 Inventories (275) (398) Prepaids and other assets (114) 377 Accounts payable and accruals (1,829) (959) Deferred revenue, deposits and other (379) (1,689) ----- ----- Net cash provided by operating activities 2,666 2,380 ----- ----- Cash flows from investing activities Equipment manufactured for rental (2,276) (4,764) Purchases of property, plant and equipment (343) (349) Proceeds from joint venture 436 502 ----- ----- Net cash used in investing activities (2,183) (4,611) ----- ----- Cash flows from financing activities Repayment of long-term debt (1,580) (1,457) Proceeds from long-term debt 2,100 3,680 Repurchase of Company's 7 1/2% convertible subordinated notes - (15) Cash dividends (88) (89) ----- ----- Net cash provided by financing activities 432 2,119 ----- ----- Net increase (decrease) in cash and cash equivalents 915 (112) Cash and cash equivalents at beginning of year 5,699 3,920 ----- ----- Cash and cash equivalents at end of period $6,614 $3,808 ===== ===== - ----------------------------------------------------------------------------------------------- Interest paid $2,190 $2,708 Interest received 116 99 Income taxes paid (refunded) (724) 491 - ----------------------------------------------------------------------------------------------- The accompanying notes are an integral part of these consolidated financial statements.
3 TRANS-LUX CORPORATION AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS June 30, 2002 (unaudited) Note 1 - Basis of Presentation Financial information included herein is unaudited, however, such information reflects all adjustments which are, in the opinion of management, necessary for the fair presentation of the consolidated financial statements for the interim periods. The results for the interim periods are not necessarily indicative of the results to be expected for the full year. It is suggested that the June 30, 2002 consolidated financial statements should be read in conjunction with the consolidated financial statements and notes included in the Company's Annual Report and Form 10-K for the year ended December 31, 2001. Certain reclassifications of prior years' amounts have been made to conform to the current year's presentation. The Company adopted the provisions of Statement of Financial Accounting Standards No. 133, "Accounting for Derivative Instruments and Hedging Activities" (SFAS 133), effective January 1, 2001. The standard requires companies to designate hedging instruments as either fair value, cash flow, or hedges of a net investment in a foreign operation. All derivatives are to be recognized as either assets or liabilities and measured at fair value. Gains or losses resulting from changes in the values of those derivatives are accounted for depending upon its designation and whether it qualifies for hedge accounting. The Company has limited involvement with derivative financial instruments and does not use them for trading purposes; they are only used to manage and fix well-defined interest rate risks. The Company has two interest rate swap agreements effective through August 2002, having a notional value of $4.7 million, to reduce exposure to interest fluctuations on its bank term loans, which are classified as cash flow hedges. The adoption of SFAS 133 at January 1, 2001 resulted in the cumulative effect of an accounting change, net of tax, of approximately $15,000 in other comprehensive loss. At June 30, 2002, the mark-to-market loss for the interest rate swap hedge included in other comprehensive loss totaled $54,000 (net of tax). In June 2001, the Financial Accounting Standards Board (FASB) issued Statements of Financial Accounting Standards No. 141, "Business Combinations," effective July 1, 2001, and No. 142, "Goodwill and Other Intangible Assets" (SFAS 142), effective for fiscal years beginning after December 15, 2001. Under SFAS 142, goodwill and intangible assets deemed to have indefinite lives will no longer be amortized but will be subject to annual impairment tests in accordance with the statements. Goodwill relates primarily to reporting units within the outdoor display segment. Other intangible assets will continue to be amortized over their useful lives. The Company adopted the new rules of accounting for goodwill and other intangible assets beginning in the first quarter of 2002. The Company has performed the required impairment tests related to goodwill and indefinite-lived intangible assets recorded on January 1, 2002 which indicated that there was no transitional impairment loss. Accordingly, the adoption of SFAS 142 did not have an impact on the Company's financial statements. 4 In accordance with SFAS 142, prior period amounts were not restated. Reconciliation of the previously reported net income and earnings per share for the three and six months ended June 30, 2001 to the amounts adjusted for the reduction of amortization expense, net of related income tax effect, is as follows:
Three months ended June 30 Six months ended June 30 In thousands 2002 2001 2002 2001 - ------------------------------------------------------------------------------------------------------ Net income, as reported $ 65 $ 74 $ 111 $ 99 Add back: goodwill amortization, - 13 - 26 net of income taxes ---- ---- ---- ---- Net income, adjusted $ 65 $ 87 $ 111 $ 125 ==== ==== ==== ==== Earnings per share - basic and diluted: Earnings per share, as reported $0.05 $0.06 $0.09 $0.08 Add back: goodwill amortization - 0.01 - 0.02 earnings per share effect ---- ---- ---- ---- Earnings per share, adjusted $0.05 $0.07 $0.09 $0.10 ==== ==== ==== ==== ______________________________________________________________________________________________________
In April 2002, the FASB issued Statement of Financial Accounting Standards No. 145, "Rescission of FASB Statements No. 4, 44 and 64, Amendment of FASB Statement No. 13, and Technical Corrections" (SFAS 145), effective for financial statements issued after June 15, 2002. The adoption of SFAS 145, relating to extinguishment of debt and certain lease transactions, did not have an impact on the Company's financial statements. In July 2002, the FASB issued Statement of Financial Accounting Standards No. 146, "Accounting for Exit or Disposal Activities" (SFAS 146). SFAS 146 will be effective for the Company for disposal activities initiated after December 31, 2002. The Company is in the process of evaluating the effect that adopting SFAS 146 will have on its financial statements. Note 2 - Inventories Inventories consist of the following:
June 30 December 31 In thousands 2002 2001 - ----------------------------------------------------------- Raw materials and spare parts $3,082 $3,785 Work-in-progress 2,949 1,717 Finished goods 1,081 1,335 ----- ----- $7,112 $6,837 ===== ===== ___________________________________________________________
Note 3 - Long-Term Debt For the three and six months ended June 30, 2002, long-term debt increased $1.0 million and decreased $1.0 million, respectively, which represented borrowings and payments on the revolving credit facility, scheduled payments of long-term debt and an increase in the current portion of long-term debt. The Company has a bank Credit Agreement that provided for a $15.0 million revolving credit facility available until June 2002, which has been converted into a four-year term loan. The Company will utilize currently available working capital for the first quarterly installment of $937,500 plus interest at LIBOR plus 2.5% (4.36% at June 30, 2002) due October 1, 2002. The Company is in discussions with lenders to arrange additional working capital availability as well as long-term liquidity. The Credit Agreement required an annual facility fee on the unused commitment of .375%, and requires compliance with certain financial covenants, which, at June 30, 2002, included a defined debt service coverage ratio of 1.40 to 1.0, a defined debt to cash flow ratio of 3.75 to 1.0 and an annual limitation of $750,000 on cash dividends. At June 30, 2002, the Company was in compliance with such financial covenants. 5 Note 4 - Reporting Comprehensive Income (Loss) The components of other comprehensive income (loss) are foreign currency translation adjustments relating to the foreign subsidiaries, unrealized holding gains or losses on the available-for-sale securities, the effect of accounting for hedges under SFAS 133 (see Note 1) and a minimum pension liability adjustment relating to the defined benefit pension plan. Total comprehensive income was $94,000 and $65,000 for the three months ended June 30, 2002 and 2001, respectively; and $134,000 and $87,000 for the six months ended June 30, 2002 and 2001, respectively. Note 5 - Earnings per Share The following table presents the computation of basic and diluted earnings per common share:
Three months ended June 30 Six months ended June 30 In thousands, except per share data 2002 2001 2002 2001 - ------------------------------------------------------------------------------------------------------ Basic and diluted earnings per share computation: Net income $ 65 $ 74 $ 111 $ 99 ----- ----- ----- ----- Weighted average common shares outstanding 1,261 1,261 1,261 1,261 ----- ----- ----- ----- Basic and diluted earnings per common share $ 0.05 $ 0.06 $ 0.09 $ 0.08 ----- ----- ----- ----- ______________________________________________________________________________________________________
Note 6 - Business Segment Data The Company evaluates segment performance and allocates resources based upon operating income. The Company's operations are managed in three reportable business segments. The Display Division comprises two operating segments, indoor display and outdoor display. Both design, produce, lease, sell and service large-scale, multi-color, real-time electronic information displays. Both operating segments are conducted on a global basis, primarily through operations in the U.S. The Company also has operations in Canada and Australia. The indoor display and outdoor display segments are differentiated primarily by the customers they serve. The Entertainment/Real Estate Division owns a chain of motion picture theatres in the western Mountain States, a national film booking service and income-producing properties. Segment operating income is shown after general and administrative expenses directly associated with the segment and includes the operating results of the joint venture activities. Corporate general and administrative items relate to costs that are not directly identifiable with a segment. There are no intersegment sales. Information about the Company's operations in its three business segments for the three and six months ended June 30, 2002 and 2001 is as follows:
Three months ended June 30 Six months ended June 30 In thousands 2002 2001 2002 2001 - ------------------------------------------------------------------------------------------------------ Revenues: Indoor display $ 6,028 $ 6,794 $11,715 $13,398 Outdoor display 9,019 7,077 17,080 14,911 Entertainment/real estate 3,939 3,205 7,353 6,164 ------ ------ ------ ------ Total revenues $18,986 $17,076 $36,148 $34,473 ------ ------ ------ ------ Operating income: Indoor display $ 1,242 $ 2,143 $ 2,653 $ 4,389 Outdoor display 23 158 206 557 Entertainment/real estate 955 446 1,789 1,017 ------ ------ ------ ------ Total operating income $ 2,220 $ 2,747 $ 4,648 $ 5,963 Other income (expense) 43 (36) 58 16 Corporate general and administrative expenses (1,107) (1,156) (2,317) (2,982) Interest expense-net (1,038) (1,422) (2,187) (2,818) ------ ------ ------ ------ Income before income taxes $ 118 $ 133 $ 202 $ 179 ====== ====== ====== ====== ______________________________________________________________________________________________________
6 Note 7 - Legal Proceedings and Claims The Company is subject to legal proceedings and claims which arise in the ordinary course of its business. During June 1999, a jury in the state of New Mexico awarded a former employee of the Company $15,000 in damages for lost wages and emotional distress and $393,000 in punitive damages on a retaliatory discharge claim. The Company denied the charges on the basis that the termination was proper and appealed the verdict, which was affirmed. The Company filed a certiorari petition that had been granted. The Company reached a settlement with the plaintiff for an amount less than the amount previously accrued, a portion of which was subject to insurance recovery. In January 2000, a second former employee of the Company commenced a retaliatory discharge action seeking compensatory and punitive damages in an unspecified amount. The Company has denied such allegations and asserted defenses including that the former employee resigned following her failure to timely report to work. The Company reached a settlement with the plaintiff, which was subject to insurance recovery. Management has received certain claims by customers related to contractual matters, which are being discussed, and believes that it has adequate provisions for such matters. Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations Overview Trans-Lux is a full service provider of integrated multimedia systems for today's communications environments. The essential elements of these systems are the real-time, programmable electronic information displays we manufacture, distribute and service. Designed to meet the evolving communications needs of both the indoor and outdoor markets, these displays are used primarily in applications for the financial, banking, gaming, corporate, transportation, entertainment and sports industries. In addition to its display business, the Company owns and operates a chain of motion picture theatres in the western Mountain States, as well as a national film booking service. The Company operates in three reportable segments: Indoor Display, Outdoor Display, and Entertainment/Real Estate. The Indoor Display segment includes worldwide revenues and related expenses from the rental, maintenance and sale of indoor displays. This segment includes the financial, gaming, government and corporate markets. The Outdoor Display segment includes worldwide revenues and related expenses from the rental, maintenance and sale of outdoor displays. Included in this segment are the custom sports, catalog sports, retail and commercial markets. The Entertainment/Real Estate segment includes the operations of the motion picture theatres in the western Mountain States, a national film booking service and income-producing real estate properties. Results of Operations Six Months Ended June 30, 2002 Compared to Six Months Ended June 30, 2001 Total revenues for the six months ended June 30, 2002 increased 4.9% to $36.1 million from $34.5 million for the six months ended June 30, 2001. Indoor display revenues decreased $1.7 million or 12.6%. Of this decrease, indoor display equipment rentals and maintenance revenues decreased $1.2 million or 13.5%, primarily due to disconnects and non-renewals of equipment on rental on existing contracts in the financial services market, and indoor display equipment sales decreased $526,000 or 10.8%, also primarily in the financial services market. The financial services market continues to be negatively impacted due to the consolidation within that industry resulting mainly from the current economic recession. 7 Outdoor display revenues increased $2.2 million or 14.5%. Of this increase, outdoor display equipment sales increased $2.8 million or 25.6%, primarily in the custom outdoor sports segment. This increase was offset by the decrease in outdoor display equipment rentals and maintenance revenues of $617,000 or 15.4%, primarily due to the continued expected revenue decline in the outdoor rentals and maintenance bases previously acquired. Entertainment/real estate revenues increased $1.2 million or 19.3%. This increase is primarily from an increase in overall admissions, ticket prices and concessions, predominantly from `same store' sales. Total operating income for the six months ended June 30, 2002 decreased 22.1% to $4.6 million from $6.0 million for the six months ended June 30, 2001. Indoor display operating income decreased $1.7 million or 39.6%, primarily as a result of the decrease in revenues in the financial services market. The cost of indoor displays represented 52.7% of related revenues in 2002 compared to 45.3% in 2001. The cost of indoor displays as a percentage of related revenues increased primarily due to the cost of equipment rentals and maintenance not decreasing in relation to the reduction in revenues and a change in the volume mix. Indoor display cost of equipment sales decreased $16,000 or 0.7%, primarily due to the decrease in volume. Indoor display cost of equipment rentals and maintenance increased $118,000 or 3.2%, largely due to an increase in depreciation expense. Indoor display general and administrative expenses decreased slightly. Outdoor display operating income decreased $351,000 or 63.0%, primarily as a result of a decrease in rental revenues while rental expenses remained level primarily due to fixed depreciation expense. The cost of outdoor displays represented 81.7% of related revenues in 2002 compared to 78.1% in 2001. Outdoor display cost of equipment sales increased $2.4 million or 27.7%, principally due to the increase in volume and the competitive nature of the sports sector of the outdoor division. Outdoor display cost of equipment rentals and maintenance decreased $74,000 or 2.4%, primarily due to reduced field service costs mainly as a result of the expected decline in the outdoor rentals and maintenance bases previously acquired, although not in proportion to the reduction in revenues. Outdoor display general and administrative expenses increased $208,000 or 7.7%, primarily due to increased sales expenses and commissions resulting from an increase in custom sports revenues. Cost of indoor and outdoor equipment rentals and maintenance includes field service expenses, plant repair costs, maintenance and depreciation. Entertainment/real estate operating income increased $772,000 or 75.9%, primarily due to the increase in revenues. The cost of entertainment/real estate represented 74.6% of related revenues in 2002 compared to 79.2% in 2001. Cost of entertainment/real estate, which includes film rental costs and depreciation expense, increased $604,000 or 12.4%, due to the increase in overall admissions. Entertainment/real estate general and administrative expenses decreased slightly. Corporate general and administrative expenses decreased $665,000 or 22.3%, principally due to a $400,000 positive impact of the effect of foreign currency rates in 2002 compared to a $175,000 negative impact in 2001, and the continued reduction of certain overhead costs. Net interest expense decreased $631,000, which is primarily attributable to the decrease in variable interest rates in 2002 vs. 2001 offset by an increase in long-term debt to fund increased operating activities, primarily related to the increase in the backlog of outdoor sports orders. The Company used its revolving credit facility to meet its short-term working capital requirements. Other income primarily relates to the earned income portion of municipal forgivable loans. The income from joint venture relates to the operations of the theatre joint venture, MetroLux Theatre in Loveland, Colorado. The effective tax rate for the six months ended June 30, 2002 and 2001 was 45.0%. 8 Three Months Ended June 30, 2002 Compared to Three Months Ended June 30, 2001 Total revenues for the three months June 30, 2002 increased 11.2% to $19.0 million from $17.1 million for the three months ended June 30, 2001. Indoor display revenues decreased $766,000 or 11.3%. Of this decrease, indoor display equipment rentals and maintenance revenues decreased $696,000 or 16.4%, primarily due to disconnects and non-renewals of equipment on rental on existing contracts in the financial services market, and indoor display equipment sales decreased $70,000 or 2.7%, also primarily in the financial services market. The financial services market continues to be negatively impacted due to the consolidation within that industry resulting mainly from the current economic recession. Outdoor display revenues increased $1.9 million or 27.4%. Of this increase, outdoor display equipment sales increased $2.1 million or 41.1%, primarily in the custom outdoor sports segment. This increase was offset by the decrease in outdoor display equipment rentals and maintenance revenues of $215,000 or 11.8%, primarily due to the continued expected revenue decline in the outdoor rentals and maintenance bases previously acquired. Entertainment/real estate revenues increased $734,000 or 23.0%. This increase is primarily from an increase in overall admissions, ticket prices and concessions, predominantly from `same store' sales. Total operating income for the three months ended June 30, 2002 decreased 19.1% to $2.2 million from $2.7 million for the three months ended June 30, 2001. Indoor display operating income decreased $901,000 or 42.1%, primarily as a result of the decrease in revenues in the financial services market. The cost of indoor displays represented 55.3% of related revenues in 2002 compared to 46.3% in 2001. The cost of indoor displays as a percentage of related revenues increased primarily due to the cost of equipment rentals and maintenance not decreasing in relation to the reduction in revenues and a change in the volume mix. Indoor display cost of equipment sales increased $129,000 or 9.9%, primarily due to the change in volume mix. Indoor display cost of equipment rentals and maintenance increased $60,000 or 3.3%, largely due to increased depreciation expense. Indoor display general and administrative expenses decreased slightly. Outdoor display operating income decreased $135,000 or 84.8%, primarily as a result of a decrease in rentals and maintenance revenues. The cost of outdoor displays represented 83.2% of related revenues in 2002 compared to 78.6% in 2001. Outdoor display cost of equipment sales increased $2.0 million or 48.4%, principally due to the increase in volume and the competitive nature of the sports sector of the outdoor division. Outdoor display cost of equipment rentals and maintenance decreased $14,000 or 0.9%, primarily due to reduced field service costs mainly as a result of the expected decline in the outdoor rentals and maintenance bases previously acquired, although not in proportion to the reduction in revenues. Outdoor display general and administrative expenses increased $135,000 or 10.0%, primarily due to increased sales expenses and commissions resulting from an increase in custom sports revenues. Entertainment/real estate operating income increased $509,000 or 114.3%, primarily due to the increase in revenues. The cost of entertainment/real estate represented 75.1% of related revenues in 2002 compared to 82.3% in 2001. Cost of entertainment/real estate increased $319,000 or 12.1%, due to the increase in overall admissions. Entertainment/real estate general and administrative expenses decreased slightly. Corporate general and administrative expenses decreased $49,000 or 4.2%, principally due to a $240,000 positive impact of the effect of foreign currency rates in 2002 compared to a $168,000 positive impact in 2001. 9 Net interest expense decreased $384,000, which is primarily attributable to the decrease in variable interest rates in 2002 vs. 2001 offset by an increase in long-term debt to fund increased operating activities, primarily related to the increase in the backlog of outdoor sports orders. The Company used its revolving credit facility to meet its short-term working capital requirements. Other income primarily relates to the earned income portion of municipal forgivable loans. The income from joint venture relates to the operations of the theatre joint venture, MetroLux Theatre in Loveland, Colorado. The effective tax rate for the three months ended June 30, 2002 and 2001 was 45.0%. Liquidity and Capital Resources The regular quarterly cash dividend for the second quarter of 2002 of $0.035 per share on the Company's Common Stock and $0.0315 per share on the Company's Class B Stock was declared by the Board of Directors on May 30, 2002 payable to stockholders of record as of June 28, 2002 and was paid July 24, 2002. The Company had a $15.0 million revolving credit facility available until June 2002, which has been converted into a four-year term loan. The Company will utilize currently available working capital for the first quarterly installment of $937,500 plus interest at LIBOR plus 2.5% (4.36% at June 30, 2002), due October 1, 2002. In order to fund on-going and potential new business, the Company is currently in discussions with lenders to arrange additional near-term working capital availability as well as long-term liquidity. The Company believes it will be successful in arranging additional working capital availability, and in addition, continues to examine measures that will allow for the cash and cash equivalents on hand to be sufficient to fund its requirements. The interest rate on the revolving credit facility was LIBOR plus 2.0% (3.86% at June 30, 2002). The revolving credit facility also required an annual facility fee on the unused commitment of .375%. The Credit Agreement contains certain financial covenants, which at June 30, 2002 included a defined debt service coverage ratio of 1.40 to 1.0, a defined debt to cash flow ratio of 3.75 to 1.0 and an annual limitation of $750,000 on cash dividends. At June 30, 2002 the Company was in compliance with such financial covenants. Payments of long-term debt due, including the $15.0 million revolving credit facility which converted into a four-year term loan June 2002, and the future minimum lease payments due under operating leases for the remainder of 2002 and the next four years are as follows:
Remainder of In thousands 2002 2003 2004 2005 2006 - ------------ ------ ------ ------ ------ ------ Long-Term Debt $1,935 $5,485 $5,533 $8,142 $4,495 Operating Leases 459 892 821 783 684 ----- ----- ----- ----- ----- Total $2,394 $6,377 $6,354 $8,925 $5,179 ===== ===== ===== ===== ===== The above amounts do not include any principal payments related to the 7.5% convertible subordinated notes that mature December 1, 2006.
Cash and cash equivalents increased $915,000 for the six months ended June 30, 2002 compared to a decrease of $112,000 in 2001. The increase in 2002 is primarily attributable to cash flows from operating activities of $2.7 million and from financing activities of $0.4 million offset by the investment in equipment manufactured for rental and other equipment purchases of $2.6 million. Cash flows from financing activities also increased $0.4 million from the MetroLux Theatre joint venture. The decrease in 2001 was primarily attributable to cash flows from operating activities of $2.4 million and from financing activities of $2.1 million offset by the investment in equipment manufactured for rental and other equipment purchases of $5.1 million. Cash flows from financing activities also increased $0.5 million from the MetroLux Theatre joint venture. 10 The $1.0 million reduction in long-term debt for the six months ended June 30, 2002 related to scheduled payments of long-term debt and an increase in the current portion of long-term debt due to the revolving credit facility. Safe Harbor Statement under the Private Securities Litigation Reform Act of 1995 The Company may, from time to time, provide estimates as to future performance. These forward-looking statements will be estimates, and may or may not be realized by the Company. The Company undertakes no duty to update such forward-looking statements. Many factors could cause actual results to differ from these forward-looking statements, including loss of market share through competition, introduction of competing products by others, pressure on prices from competition or purchasers of the Company's products, interest rate and foreign exchange fluctuations, terrorist acts and war. Item 3. Quantitative and Qualitative Disclosures about Market Risk The Company is subject to interest rate risk on its long-term debt. The Company manages its exposure to changes in interest rates by the use of variable and fixed interest rate debt. In addition the Company has hedged its exposure to changes in interest rates on a portion of its variable debt by entering into interest rate swap agreements to lock in fixed interest rates for a portion of these borrowings. In addition, the Company is exposed to foreign currency exchange rate risk mainly as a result of investments in its Australian and Canadian subsidiaries. The Company does not enter into derivatives for trading or speculative purposes. At June 30, 2002, the Company had two interest rate swap agreements effective through August 2002, on a notional amount of $4.7 million. The receive rate is based on a 90 day LIBOR rate. The receive and pay rates related to the interest rate swap were 3.79% and an average of 7.88%, respectively. The fair value of the interest rate swap agreements was approximately ($42,000), net of tax. Interest differentials to be paid or received because of the swap agreements are reflected as an adjustment to interest expense over the related debt period. A one percentage point change in interest rates would result in an annual interest expense fluctuation of approximately $324,000. A 10% change in the Australian and Canadian dollar relative to the U.S. dollar would result in a currency exchange expense fluctuation of approximately $464,000. The fair value is based on dealer quotes, considering current exchange rates. 11 Part II - Other Information --------------------------- Item 4. Submission of Matters to a Vote of Stockholders The Annual Meeting of Stockholders of Trans-Lux Corporation was held on May 30, 2002 for the purpose of electing directors and approving the appointment of auditors as set forth below. All of management's nominees for directors for a three-year term as listed in the proxy statement were elected by the following vote: For Not For --- ------- Matthew Brandt 3,543,530 52,111 Robert B. Greenes 3,545,859 49,782 Howard S. Modlin 3,545,459 50,182 Michael R. Mulcahy 3,544,590 51,051 The following directors are continuing their terms as directors: Steven Baruch, One-Year Remaining Thomas Brandt, One-Year Remaining Howard M. Brenner, One-Year Remaining Richard Brandt, Two-Years Remaining Jean Firstenberg, Two-Years Remaining Gene Jankowski, Two-Years Remaining Victor Liss, Two-Years Remaining The recommendation to retain Deloitte & Touche LLP as the independent auditors for the Corporation was approved by the following vote: For Against Abstain --- ------- ------- Totals 3,539,319 27,746 28,576 Item 6. Exhibits and Reports on Form 8-K (a) Exhibits 10(a) Employment Agreement with Thomas F. Mahoney dated as of June 1, 2002 99.1 Statement Furnished Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 - Michael R. Mulcahy, President and Co-Chief Executive Officer 99.2 Statement Furnished Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 - Thomas Brandt, Executive Vice President and Co-Chief Executive Officer 99.3 Statement Furnished Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 - Angela D. Toppi, Executive Vice President and Chief Financial Officer (b) No reports on Form 8-K were filed during the quarter covered by this report. 12 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. TRANS-LUX CORPORATION --------------------- (Registrant) Date: August 14, 2002 by /s/ Angela D. Toppi ---------------------------- Angela D. Toppi Executive Vice President and Chief Financial Officer by /s/ Robert P. Bosworth ---------------------------- Robert P. Bosworth Vice President and Chief Accounting Officer 13 EX-10 3 jun02ex10.txt EXHIBIT 10 EMPLOYMENT AGREEMENT Exhibit 10(a) AGREEMENT made June 27, 2002, as of the 1st day of June 2002 by and between TRANS-LUX CORPORATION, a Delaware corporation having an office at 110 Richards Avenue, Norwalk, Connecticut 06856-5090 (hereinafter called "Employer"), and THOMAS F. MAHONEY residing at 19 Mine Hill Road, Redding, CT 06896 (hereinafter called, "Employee"). W I T N E S S E T H: - - - - - - - - - - 1. Employer hereby employs Employee, and Employee hereby accepts employment, upon the terms and conditions hereinafter set forth. 2. (a) The term ("Term") of the Agreement shall be the three (3) year period commencing on the date hereof and terminating May 3l, 2005. (b) In the event that Employee remains or continues in the employ of Employer after the Term, such employment, in the absence of a further written agreement, shall be on an at-will basis, terminable by either party hereto on thirty (30) days' notice to the other and, upon the 30th day following such notice the employment of Employee shall terminate. (c) Upon expiration of the Term of this Agreement, neither party shall have any further obligations or liabilities to the other except as otherwise specifically provided in this Agreement. 3. Employee shall be employed in an executive sales capacity of Employer (and such of its affiliates, divisions and subsidiaries as Employer shall designate). Employer shall use its best efforts to cause Employee to be elected and continue to be elected a Senior Vice President of Employer during the Term of this Agreement. The precise services of Employee may be designated or assigned from time to time at the direction of the Board of Directors, the Chairman of the Board, President, or other person designated by the President and all of the services to be rendered hereunder by Employee shall at all times be subject to the control, direction and supervision of the Board of Directors of Employer, to which Employee does hereby agree to be bound. Employee shall devote his entire time, attention and energies during usual business hours (subject to Employer's policy with respect to holidays and illnesses for comparable executives of Employer) to the business and affairs of Employer, its affiliates, divisions and subsidiaries as Employer shall from time to time direct. Employee further agrees during the Term of this Agreement to serve as an officer or director of Employer or of any affiliate or subsidiary of Employer as Employer may request, and if Employee serves as such officer or a director he will do so without additional compensation, other than director's fees or honoraria, if any. During the Term of this Agreement and during any subsequent employment of Employee by Employer, Employee shall use his best efforts, skills and abilities in the performance of his services hereunder and to promote the interests of Employer, its affiliates, divisions and subsidiaries. Employee shall not, during the Term and during any subsequent employment of Employee by Employer, be engaged in any other business activity, whether or not such business activity is pursued for gain, profit or other pecuniary advantage. The foregoing shall not be construed as preventing Employee from investing his assets in such form or manner as will not require any services on the part of Employee in the operation of the affairs of the companies in which such investments are made, provided, however, that Employee shall not, either directly or indirectly, be a director of or make any investments in any company or companies which are engaged in businesses competitive with those conducted by Employer or by any of its subsidiaries or affiliates except where such investments are in stock of a company listed on a national securities exchange, and such stock of Employee does not exceed one percent (1%) of the outstanding shares of stock of such listed company. Employee shall not at any time during or after the Term of this Agreement use (except on behalf of Employer) divulge, furnish or make accessible to any third person or organization any confidential information concerning Employer or any of its subsidiaries or affiliates or the businesses of any of the foregoing including, without limitation, inventions, confidential methods of operations and organization, confidential sources of supply, identity of employees, customer lists and confidential financial information. 4. (a) For all services rendered by Employee during the Term of this Agreement, Employer shall pay Employee a salary at the rate of ONE HUNDRED TWENTY TWO THOUSAND FIVE HUNDRED DOLLARS ($122,500) per annum during the period June l, 2002 to May 31,2003; at the rate of ONE HUNDRED THIRTY THOUSAND DOLLARS ($130,000) per annum during the period June 1, 2003 to May 31, 2004; and at the rate of ONE HUNDRED FIFTY THOUSAND DOLLARS ($150,000) during the period June 1, 2004 to May 31, 2005. Such salary shall be payable weekly, or monthly, or in accordance with the payroll practices of Employer for its executives. The Employee shall also be entitled to all rights and benefits for which he shall be eligible under any stock option plan, bonus, participation or extra compensation plans, pensions, group insurance or other benefits which Employer presently provides, or may provide for him and for its employees generally. Such rights and benefits include the sales override commission plan (as currently in place and currently compensated monthly) based on all sales and rentals of Employer's world-wide sales staff who report to Employee. The sales override commission shall not exceed (x) $33,250 for the period June 1, 2002-December 31, 2002, $58,000 for January 1, 2003-December 31, 2003, $50,000 for January 1, 2004-December 31, 2004, or $20,833.33 for the period January 1, 2005-May 31, 2005 plus (y) for any such period in which the bonus sales goal is exceeded, an additional bonus of 110% times the override factor times the excess. For example, if the sales override amount for a given period (year) was $42,000 and if the mutually agreed upon goal for that period was $49,358,826, the factor is ..0008509 (override amount divided by goal) and sales reached is $50,358,826 then there would be an additional override commission of $935.99 ($1,000,000 x ..0008509 x 110%). Notwithstanding the foregoing, in no event shall an additional override be paid for any amount which exceeds twice the mutually agreed goal (e.g. up to $98,717.652 if the goal was $49,358,826). This Agreement shall not be deemed abrogated or terminated if Employer, in its discretion, shall determine to increase the compensation of Employee for any period of time, or if the Employee shall accept such increase. All payments under this Agreement are in United States dollars unless otherwise specified. (b) Employer may make appropriate deductions from the said payments required to be made in this Section 4 to Employee to comply with all governmental withholding requirements. (c) If, during the Term of this Agreement and if the Employee is still in the employ of Employer, Employee shall be prevented from performing or be unable to perform, or fail to perform, his duties by reason of illness or any other incapacity for (4) consecutive months (excluding normal vacation time) during the Term hereof, Employer agrees to pay Employee thereafter during the Term for the duration of such incapacity 35% of the base salary which Employee would otherwise have been entitled to receive if not for the illness or other incapacity. (d) The Board upon the recommendation of the Compensation Committee of the Board shall consider no later than May 31, 2003, 2004, 2005, and 2006, respectively (provided there is no delay in obtaining the financial statements as provided below, but in no event later than 45 days following receipt thereof) the grant of a bonus ("Bonus") to Employee based on Employee's performance for the immediately preceding fiscal year. Notwithstanding the foregoing, Employer shall pay Employee the highest Bonus applicable for any of the fiscal years ending December 31, 2002, 2003, 2004 and 2005 only, in the event Employer's pre-tax consolidated earnings for such year determined in accordance with Section 4(d) exceed the respective amounts hereinafter set forth. The Bonuses shall not exceed $20,000 for 2002, 2003 and 2004, and $8,334.00 for 2005.
__________________________________________________________________ If Pre-Tax Consolidated Earnings Exceed for Annual Non-Cumulative Level of Bonus 2002-2003-2004-2005 Payable - ------------------------------------------------------------------ 2002, 2003, and 2004 2005(41.67%) $ 250,000 $ 1,250.00 $ 520.88 375,000 1,875.00 781.32 500,000 2,500.00 1,041.76 625,000 3,125.00 1,302.18 750,000 3,751.00 1,563.04 875,000 4,375.00 1,823.06 1,000,000 5,000.00 2,083.50 1,125,000 5,625.00 2,343.94 1,250,000 6,250.00 2,604.38 1,375,000 6,875.00 2,864.82 1,500,000 7,500.00 3,125.26 1,625,000 8,175.00 3,385.68 1,750,000 8,750.00 3,646.12 1,875,000 8,375.00 3,906.56 2,000,000 10,000,00 4,167.00 2,125,000 10,625.00 4,427.44 2,250,000 11,250.00 4,687.88 2,375,000 11,875.00 4,948.32 2,500,000 12,500.00 5,208.76 2,625,000 13,125.00 5,469.18 2,750,000 13,750.00 5,729.62 2,875,000 14,375.00 5,990.06 3,000,000* 15,000.00 6,250.50 4,000,000* 20,000.00** 8,334.00** - ------------------------------------------------------------------ * For each incremental level of $l25,000 between $3,000,000 and $4,000,000 not listed, there is an additional Bonus of $625.00 ** Maximum
There shall be excluded from the calculation of pre-tax consolidated earnings during the Term of this Agreement the amount by which (x) any item or items of unusual or extraordinary gain in the aggregate exceeds 20% of the Employer's net book value as at the end of the immediate preceding fiscal year or (y) any item of unusual or extraordinary loss in the aggregate exceeds 20% of the Employer's net book value as at the end of the immediate preceding fiscal year, in each case in (x) and (y) above as determined in accordance with generally accepted accounting principles and items of gain and loss shall not be netted against each other for purpose of the above 20% calculation, or (2) any contractual Bonuses and/or contractual profit participations accrued or paid to Employee and other employees. Provided Employee is not in default of the Agreement, the Board may, in any event, even if any of the aforesaid pre-tax consolidated earnings levels are not exceeded, grant the Employee the aforesaid Bonus or any portion thereof for such year based on his performance. Notwithstanding anything to the contrary contained herein, if Employee is not in the employ of Employer at the end of any aforesaid 2002, 2003 or 2004 fiscal year or on May 31, 2005, no Bonus shall be paid for such fiscal year except 41.67% of the 2002 Bonus has vested in Employee and payable whether or not he is in Employer's employ on December 31, 2002. In the event of Employee's death on or after January 1 of 2003, 2004, or 2005, or June 1, 2005 as to 2005, any Bonus to which he is otherwise entitled for the prior fiscal year shall be paid to his widow if she shall survive him or if she shall predecease him to his surviving issue per stirpes and not per capita. Such pre-tax consolidated earnings shall be fixed and determined by the independent certified public accountants regularly employed by Employer. Such independent certified public accountants, in ascertaining such pre-tax consolidated earnings, shall apply all accounting practices and procedures heretofore applied by Employer's independent certified public accountants in arriving at such annual pre-tax consolidated earnings as disclosed in Employer's annual statement for that year of profit and loss released to its stockholders. The determination by such independent certified public accountants shall be final, absolute and controlling upon the parties. Notwithstanding the foregoing, any interest expense savings resulting from conversion of the Employer's 7-1/2% Convertible Subordinated Notes due 2006 may be included or excluded in such calculation by the Board in its sole discretion. Payment of such amount, if any is due, shall be made for each year by Employer to Employee within sixty (60) days after which such accountant shall have furnished such statement to Employer disclosing Employer's pre-tax consolidated earnings for each of the years 2002, 2003, 2004 and 2005. Employer undertakes to use reasonable efforts to cause said accountants to prepare and furnish such statements within one hundred thirty (130) days from the close of each such fiscal year and to cause said independent certified public accountants, concomitantly with delivery of such statement by accountants to it, to deliver a copy of such statement to Employee. The Employer shall not have any liability to Employee arising out of any delays with respect to the foregoing. (e) In the event Employee dies during the Term of this Agreement while the Employee is still in the Employ of Employer, Employer shall pay to Employee's widow or his surviving issue, as the case may be, for the balance of the Term of the Agreement, or eighteen (18) months, whichever is less, annual death benefits payable weekly or in accordance with Employer's payroll practices in an amount equal to 35% of Employee's then annual base salary rate. (f) So long as Employer's Common Stock is publicly traded, on date of execution of this Agreement Employer shall grant Employee pursuant to Employer's 1995 Stock Option Plan ("Option Plan"), the option ("Option") to purchase 2,500 shares of Common Stock at a price per share equal to the fair market value of Common Stock of Employer on the date thereof in accordance with paragraph 5 of the Option Plan and upon the other terms and conditions set forth in the form of the option agreement annexed hereto as Exhibit A. Such option agreement shall be executed by Employee as of such date. (g) In addition to the group life insurance set forth herein, Employer agrees to provide Employee with term life insurance in the amount of $75,000 during the Term of this Agreement provided Employee is insurable at standard rates. Employer shall transfer such policy to Employee on his retirement or termination of this Agreement at the end of the Term without further extension as provided in paragraph 2(b). 5. During the Term of this Agreement, Employer will reimburse Employee for traveling or other out-of-pocket expenses and disbursements incurred by Employee with Employer's approval in furtherance of the businesses of Employer, its affiliates, divisions or subsidiaries, upon presentation of such supporting information as Employer may from time to time request. 6. During the Term of this Agreement, Employee shall be entitled to a vacation during the usual vacation period of Employer in accordance with such vacation schedules as Employer may prescribe. 7. Both parties recognize that the services to be rendered by Employee pursuant to this Agreement are extraordinary and unique. During the Term of this Agreement, and during any subsequent employment of Employee by Employer, Employee shall not, directly or indirectly, enter into the employ of or render any services to any person, partnership, association or corporation engaged in a business or businesses in anyway, directly or indirectly, competitive to those now or hereafter engaged in by Employer or by any of its subsidiaries during the Term of this Agreement and during any subsequent employment of Employee by Employer and Employee shall not engage in any such business, directly or indirectly on his own account and, except as permitted by paragraph 3 of this Agreement, Employee shall not become interested in any such business, directly or indirectly, as an individual, partner, shareholder, director, officer, principal, agent, employee, trustee, consultant, or in any other relationship or capacity. For a period of two (2) years following termination of employment for any reason, Employee shall not directly or indirectly (i) engage or otherwise be involved in the recruitment or employment of the Employer's employees or any individual who was such an employee within one (1) year of any such termination of employment nor (ii) solicit or render any service directly or indirectly to any other person or entity with regard to soliciting any customer of the Employer during the two (2) year period prior to termination of employment with respect to products or services competitive with products or services of Employer. Employee at no time during or after employment shall disclose to any person, other than Employer, or otherwise use any information of or regarding Employer except on behalf of Employer, nor communicate, publish, or otherwise transmit, in any manner whatsoever, untrue information or negative, competitive, personal or other information or comments regarding Employer. In addition, Employee agrees that all lists, materials, books, files, reports, correspondence, records and other documents and information ("Employer Materials") used, prepared or made available to Employee, shall be and shall remain the property of Employer. Upon the termination of employment of Employee or the expiration of this Agreement, whichever is earlier, all Employer Materials shall be immediately returned to Trans-Lux Corporation, and Employee shall not make or retain any copies thereof, nor disclose or otherwise use any information relating to said Employer Materials to any other party. As used herein the term Employer shall include Employer, Employer's subsidiaries and affiliates, and any individuals employed or formerly employed by any of them. Employer shall be entitled, if it so elects, to institute and prosecute proceedings in any court of competent jurisdiction, either in law or in equity, to obtain damages for any breach of this Agreement, or to enjoin Employee from any breach of this Agreement, but nothing herein contained shall be construed to prevent Employer from pursuing such other remedies as Employer may elect to invoke. 8. In the event any provision of paragraph 7 of this Agreement shall be held invalid or unenforceable by reason of the geographic or business scope or the duration thereof, such invalidity or unenforceability shall attach only to such provision and shall not affect or render invalid or unenforceable any other provision of this Agreement, and this Agreement shall be construed as if the geographic or business scope or the duration of such provision had been more narrowly drawn so as not to be invalid or unenforceable. 9. The waiver by Employer of a breach of any provision of this Agreement by Employee shall not operate or be construed as a waiver of any subsequent breach by Employee. 10. Any notice required or permitted to be given under this Agreement shall be sufficient if in writing and served personally or sent by United States certified or registered mail, return receipt requested, or overnight courier such as Federal Express or Airborne to his address as stated on Employer's records, in the case of Employee, or to the office of Trans-Lux Corporation, attention of the President, 110 Richards Avenue, Norwalk, Connecticut 06856-5090, in the case of Employer, or such other address as designated in writing by the parties. 11. This Agreement shall be construed in accordance with the laws of the State of New York. 12. This instrument contains the entire agreement between the parties and supersedes as of June 1, 2002 the Employment Agreement dated June 1, 1998, as amended, between the parties. It may not be changed, modified, extended or renewed orally except by an agreement in writing signed by the party against whom enforcement of any waiver, change, modification, discharge or extension is sought. IN WITNESS WHEREOF, this Agreement has been duly executed on the day and year above written. TRANS-LUX CORPORATION By:/s/ Michael R. Mulcahy ------------------------- President /s/ Thomas F. Mahoney ------------------------- Thomas F. Mahoney EX-99 4 jun02ex99.txt EXHIBIT 99 CERTIFICATIONS Exhibit 99.1 STATEMENT FURNISHED PURSUANT TO SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002 The undersigned, Michael R. Mulcahy, is the President and Co-Chief Executive Officer of Trans-Lux Corporation (the "Company"). This statement is being furnished in connection with the filing by the Company of the Company's Quarterly Report on Form 10-Q for the quarter ended June 30, 2002 (the "Report"). By execution of this statement, I certify that, to the best of my knowledge: A) the Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and B) the information contained in the Report fairly presents, in all materials respects, the financial condition and results of operations of the Company as of the dates and for the periods covered by the Report. This statement is authorized to be attached as an exhibit to the Report so that this statement will accompany the Report at such time as the Report is filed with the Securities and Exchange Commission ("SEC"), pursuant to Section 906 of the Sarbanes-Oxley Act of 2002. Unless specifically required by rule of the SEC, it is not intended that this statement be deemed to be filed for purposes of the Securities Exchange Act of 1934, as amended. Dated: August 14, 2002 /s/ Michael R. Mulcahy ----------------------- Michael R. Mulcahy Exhibit 99.2 STATEMENT FURNISHED PURSUANT TO SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002 The undersigned, Thomas Brandt, is the Executive Vice President and Co-Chief Executive Officer of Trans-Lux Corporation (the "Company"). This statement is being furnished in connection with the filing by the Company of the Company's Quarterly Report on Form 10-Q for the quarter ended June 30, 2002 (the "Report"). By execution of this statement, I certify that, to the best of my knowledge: A) the Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and B) the information contained in the Report fairly presents, in all materials respects, the financial condition and results of operations of the Company as of the dates and for the periods covered by the Report. This statement is authorized to be attached as an exhibit to the Report so that this statement will accompany the Report at such time as the Report is filed with the Securities and Exchange Commission ("SEC"), pursuant to Section 906 of the Sarbanes-Oxley Act of 2002. Unless specifically required by rule of the SEC, it is not intended that this statement be deemed to be filed for purposes of the Securities Exchange Act of 1934, as amended. Dated: August 14, 2002 /s/ Thomas Brandt ----------------- Thomas Brandt Exhibit 99.3 STATEMENT FURNISHED PURSUANT TO SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002 The undersigned, Angela D. Toppi, is the Executive Vice President and Chief Financial Officer of Trans-Lux Corporation (the "Company"). This statement is being furnished in connection with the filing by the Company of the Company's Quarterly Report on Form 10-Q for the quarter ended June 30, 2002 (the "Report"). By execution of this statement, I certify that, to the best of my knowledge: A) the Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and B) the information contained in the Report fairly presents, in all materials respects, the financial condition and results of operations of the Company as of the dates and for the periods covered by the Report. This statement is authorized to be attached as an exhibit to the Report so that this statement will accompany the Report at such time as the Report is filed with the Securities and Exchange Commission ("SEC"), pursuant to Section 906 of the Sarbanes-Oxley Act of 2002. Unless specifically required by rule of the SEC, it is not intended that this statement be deemed to be filed for purposes of the Securities Exchange Act of 1934, as amended. Dated: August 14, 2002 /s/ Angela D. Toppi ------------------- Angela D. Toppi -----END PRIVACY-ENHANCED MESSAGE-----