-----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, UeGrywWd3EXz77TtYJx+SdoD1drcyVnmFrn6XqjYGUGkdvlKgtUBM4jDG8w9VLr1 lhSvp4IlLpaKTn4mIDCy9Q== 0000099106-05-000029.txt : 20050815 0000099106-05-000029.hdr.sgml : 20050815 20050815153627 ACCESSION NUMBER: 0000099106-05-000029 CONFORMED SUBMISSION TYPE: 10-Q PUBLIC DOCUMENT COUNT: 9 CONFORMED PERIOD OF REPORT: 20050630 FILED AS OF DATE: 20050815 DATE AS OF CHANGE: 20050815 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: 051026335 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 tlx0506q.txt 10-Q FOR PERIOD END 06/30/05 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, 2005 ------------- 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 by check mark whether the registrant is an accelerated filer (as defined in Rule 12b-2 of the Exchange Act). Yes No X --- --- 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 - -------- ------------------------------------ ------------------ 08/12/05 Common Stock - $1.00 Par Value 973,603 08/12/05 Class B Stock - $1.00 Par Value 286,814 (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 (unaudited) Item 1. Consolidated Balance Sheets - June 30, 2005 and December 31, 2004 (audited) 1 Consolidated Statements of Operations - Three and Six Months Ended June 30, 2005 and 2004 2 Consolidated Statements of Cash Flows - Six Months Ended June 30, 2005 and 2004 3 Notes to Consolidated Condensed Financial Statements 4 Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations 10 Item 3. Quantitative and Qualitative Disclosures About Market Risk 15 Item 4. Controls and Procedures 16 Part II - Other Information Item 4. Submission of Matters to a Vote of Security Holders 17 Item 5. Other Information 17 Item 6. Exhibits 17 Signatures 18 Exhibits
PART I - FINANCIAL INFORMATION ------------------------------ TRANS-LUX CORPORATION AND SUBSIDIARIES CONSOLIDATED BALANCE SHEETS (unaudited) June 30 December 31 In thousands, except share data 2005 2004 - --------------------------------------------------------------------------------------------------- ASSETS Current assets: Cash and cash equivalents $11,529 $ 12,398 Available-for-sale securities 453 388 Receivables, less allowance of $845 - 2005 and $711 - 2004 6,190 5,989 Unbilled receivables 915 585 Inventories 6,492 6,565 Prepaids and other 1,004 534 Total current assets ------- -------- 26,583 26,459 ------- -------- Rental equipment 92,819 90,938 Less accumulated depreciation 56,437 52,538 ------- -------- 36,382 38,400 ------- -------- Property, plant and equipment 38,242 37,747 Less accumulated depreciation and amortization 9,550 8,787 ------- -------- 28,692 28,960 Goodwill 1,004 1,004 Other assets 6,136 6,291 ------- -------- TOTAL ASSETS $98,797 $101,114 ======= ======== LIABILITIES AND STOCKHOLDERS' EQUITY Current liabilities: Accounts payable $ 1,856 2,413 Accrued liabilities 8,050 8,536 Current portion of long-term debt 2,126 1,744 ------- -------- Total current liabilities 12,032 12,693 ------- -------- Long-term debt: 7 1/2% convertible subordinated notes due 2006 12,309 12,309 8 1/4% limited convertible senior subordinated notes due 2012 17,868 17,868 9 1/2% subordinated debentures due 2012 1,057 1,057 Notes payable 25,407 25,562 ------- -------- 56,641 56,796 Deferred credits, deposits and other 2,770 2,776 Deferred income taxes 3,712 4,244 Stockholders' equity: Capital stock Common - $1 par value - 5,500,000 shares authorized, 2,453,591 shares issued in 2005 and 2,452,942 shares issued in 2004 2,453 2,453 Class B - $1 par value - 1,000,000 shares authorized, 286,814 shares issued in 2005 and 287,463 shares issued in 2004 287 287 Additional paid-in-capital 13,901 13,901 Retained earnings 19,941 20,852 Accumulated other comprehensive loss (1,100) (1,050) ------- -------- 35,482 36,443 Less treasury stock - at cost - 1,480,045 shares in 2005 and 1,479,714 shares in 2004 (excludes additional 286,814 shares held in 2005 and 287,463 shares held in 2004 for conversion of Class B stock) 11,840 11,838 ------- -------- Total stockholders' equity 23,642 24,605 ------- -------- TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY $98,797 $101,114 ======= ======== - --------------------------------------------------------------------------------------------------- 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 2005 2004 2005 2004 - ----------------------------------------------------------------------------------- ----------------- Revenues: Equipment rentals and maintenance $ 3,830 $ 4,371 $ 7,605 $ 8,619 Equipment sales 6,299 5,242 11,112 10,102 Theatre receipts and other 3,335 3,499 6,396 6,720 ------- ------- ------- ------- Total revenues 13,464 13,112 25,113 25,441 ------- ------- ------- ------- Operating expenses: Cost of equipment rentals and maintenance 3,146 3,393 6,191 6,544 Cost of equipment sales 4,221 3,623 7,488 6,878 Cost of theatre receipts and other 2,447 2,651 4,647 4,949 ------- ------- ------- ------- Total operating expenses 9,814 9,667 18,326 18,371 ------- ------- ------- ------- Gross profit from operations 3,650 3,445 6,787 7,070 General and administrative expenses 3,631 3,972 6,621 6,784 Interest income 155 19 201 52 Interest expense (1,048) (941) (2,040) (1,889) Gain on sale of assets 108 2,536 108 2,536 Other income 27 32 52 44 ------- ------- ------- ------- Income (loss) from continuing operations before income taxes, income from joint venture and discontinued operation (739) 1,119 (1,513) 1,029 Provision (benefit) for income taxes (249) 515 (511) 534 Income from joint venture 89 123 179 255 ------- ------- ------- ------- Income (loss) from continuing operations (401) 727 (823) 750 Income from discontinued operation, net of income taxes - 112 - 127 ------- ------- ------- ------- Net income (loss) $ (401) $ 839 $ (823) $ 877 ======= ======= ======= ======= Earnings (loss) per share continuing operations: Basic $ (0.32) $ 0.58 $ (0.65) $ 0.60 Diluted $ (0.32) $ 0.28 $ (0.65) $ 0.40 Earnings per share discontinued operation: Basic $ - $ 0.09 $ - $ 0.10 Diluted $ - $ 0.03 $ - $ 0.03 Total earnings (loss) per share: Basic $ (0.32) $ 0.67 $ (0.65) $ 0.70 Diluted $ (0.32) $ 0.31 $ (0.65) $ 0.43 Average common shares outstanding: Basic 1,261 1,261 1,261 1,261 Diluted 1,261 4,022 1,261 3,725 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 2005 2004 - ----------------------------------------------------------------------------------------------------- Cash flows from operating activities Net income (loss) $ (823) $ 877 Income from discontinued operation - 127 ------- -------- Income (loss) from continuing operations (823) 750 Adjustment to reconcile net income to net cash provided by operating activities: Depreciation and amortization 4,821 4,845 Income from joint venture (179) (255) Deferred income taxes (524) 780 Gain on sale of assets (108) (2,536) Gain on sale of available-for-sale securities (1) (11) Changes in operating assets and liabilities: Receivables (531) (1,409) Inventories 73 593 Prepaids and other assets (470) (121) Accounts payable and accruals (1,101) 832 Deferred credits, deposits and other (6) 383 ------- -------- Net cash provided by operating activities 1,151 3,851 ------- -------- Cash flows from investing activities Equipment manufactured for rental (1,881) (1,964) Purchases of property, plant and equipment (575) (1,811) Purchases of available-for-sale securities (114) (239) Proceeds from sale of available-for-sale securities 32 100 Proceeds from joint venture 175 150 Proceeds from sale of assets 206 7,112 ------- -------- Net cash provided by (used in) investing activities (2,157) 3,348 ------- -------- Cash flows from financing activities Proceeds from long-term debt 903 19,481 Payments of long-term debt (676) (24,257) Cash dividends (88) (88) Purchase of treasury stock (2) (1) ------- -------- Net cash provided by (used in) financing activities 137 (4,865) ------- -------- Net cash used in discontinued operation - (529) ------- -------- Net increase (decrease) in cash and cash equivalents (869) 1,805 Cash and cash equivalents at beginning of year 12,398 12,022 ------- -------- Cash and cash equivalents at end of period $11,529 $ 13,827 ======= ======== - ----------------------------------------------------------------------------------------------------- Interest paid $ 1,812 $ 1,768 Interest received 201 63 Income taxes paid (refunded) 164 (167) - ----------------------------------------------------------------------------------------------------- The accompanying notes are an integral part of these consolidated financial statements.
3 TRANS-LUX CORPORATION AND SUBSIDIARIES NOTES TO CONSOLIDATED CONDENSED FINANCIAL STATEMENTS June 30, 2005 (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, 2005 consolidated financial statements should be read in conjunction with the consolidated financial statements and notes included in the Company's Annual Report on Form 10-K for the year ended December 31, 2004. Certain reclassifications of prior years' amounts have been made to conform to the current year's presentation. The Company records compensation expense for its stock-based employee compensation plans in accordance with the intrinsic-value method prescribed by Accounting Principles Board Opinion No. 25, "Accounting for Stock Issued to Employees." Intrinsic value is the amount by which the market price of the underlying stock exceeds the exercise price of the stock option or award on the measurement date, generally the date of grant. The Company's options are issued with a strike price equal to the market price of the underlying stock at date of grant and, accordingly, no compensation cost has been recognized for its stock option plans. In December 2004, the Financial Accounting Standards Board ("FASB") issued Statement of Financial Accounting Standards ("SFAS") No. 123 (revised 2004), "Share-Based Payment" ("SFAS 123 (revised 2004)"). SFAS 123 (revised 2004) establishes standards that require companies to record the cost resulting from all share-based payment transactions using the fair value method. Transition under SFAS 123 (revised 2004) requires using a modified version of prospective application under which compensation costs are recorded for all unvested share-based payments outstanding or a modified retrospective method under which all prior periods impacted by SFAS 123 are restated. SFAS 123 (revised 2004) is effective, for the Company, as of January 1, 2006, with early adoption permitted. 4 The following table illustrates the effect on net income (loss) and earnings (loss) per share for the three and six months ended June 30, 2005 and 2004 if the Company had applied the fair value recognition provisions of SFAS 123 to stock-based employee compensation: Three months Six months ended June 30 ended June 30 In thousands, except per share data 2005 2004 2005 2004 - ------------------------------------------------------------------------------------------- Net income (loss), as reported $ (401) $ 839 $ (823) $ 877 Deduct: Total stock-based employee compensation expense determined under fair value based method for all awards, net of tax 1 4 7 6 ------ ----- ------ ----- Pro forma net income (loss) $ (402) $ 835 $ (830) $ 871 ====== ===== ====== ===== Earnings (loss) per share: As reported: Basic $(0.32) $0.67 $(0.65) $0.70 ------ ----- ------ ----- Diluted $(0.32) $0.31 $(0.65) $0.43 ------ ----- ------ ----- Pro forma: Basic $(0.32) $0.66 $(0.66) $0.69 ------ ----- ------ ----- Diluted $(0.32) $0.31 $(0.66) $0.43 ------ ----- ------ -----
Note 2 - Inventories Inventories consist of the following: June 30 December 31 In thousands 2005 2004 - ------------------------------------------------------------ Raw materials and spare parts $4,466 $4,704 Work-in-progress 1,388 1,357 Finished goods 638 504 ------ ------ $6,492 $6,565 ====== ======
Note 3 - Long-Term Debt During the six months ended June 30, 2005, long-term debt, including current portion, decreased $227,000, due to regular scheduled payments of long-term debt, offset by a $903,000 construction loan to expand the Company's movie theatre in Dillon, Colorado. During the fourth quarter of 2004, the Company completed an amendment of its senior debt, which included a term loan of $10.0 million, a non-revolving line of credit of up to $6.2 million for the purpose of financing 50% of the redemption and/or purchase of its outstanding Old Notes on a matching basis and a revolving loan of up to $5.0 million at variable interest rates ranging from LIBOR plus 2.25% to Prime plus 0.25% (5.37% and 5.61% at June 30, 2005). The term loan, non-revolving line of credit and revolving loan mature on January 1, 2012, January 1, 2007 and January 1, 2008, respectively. Upon maturity of the non-revolving line of credit, it is convertible into a converted term loan maturing January 1, 2012. At June 30, 2005, both the non-revolving line of credit and the revolving loan were fully available as none had been drawn. Subsequent to the second quarter, the Company borrowed $850,000 against its revolving loan facility to fund the purchase of land in Silver City, New Mexico for the construction of a new theatre. The credit agreement requires 5 an annual facility fee on the unused commitment of 0.25%, and requires compliance with certain financial covenants, which include a fixed charge coverage ratio of 1.1 to 1.0, a loan-to-value ratio of not more than 50%, a leverage ratio of 3.0 to 1.0, maintaining a tangible net worth of not less than $20.8 million plus 50% of net income and maintaining accounts with an average monthly compensating balance of not less than $750,000. At June 30, 2005, the Company was in compliance with such financial covenants. On April 14, 2004, the Company successfully completed its offer to exchange $1,000 principal amount of its new 8 1/4% Limited Convertible Senior Subordinated Notes due 2012 (the "New Notes") for each $1,000 principal amount of its 7 1/2% Convertible Subordinated Notes due 2006 (the "Old Notes"). The exchange offer commenced March 2, 2004 and expired on April 14, 2004. A total of $17.9 million principal amount of Old Notes were exchanged, leaving $12.3 million principal amount of Old Notes outstanding. The New Notes provide for a higher interest rate, have a longer term, are convertible into Common Stock at a lower conversion price of $9.00 per share until March 1, 2007 and are senior to the Old Notes and the Company's 9 1/2% Subordinated Debentures due 2012. Note 4 - Discontinued Operation On April 28, 2004, the Company completed an agreement to sell the capital stock of its Australian subsidiary, Trans-Lux Pty Limited ("PTY"), for $1.7 million in cash, and the operating results were assumed by the buyer effective as of February 29, 2004. In accordance with the provisions of SFAS No. 144, "Accounting For the Impairment or Disposal of Long-lived Assets," the Company has accounted for PTY as a discontinued operation. The consolidated financial statements reflect the assets and liabilities of the discontinued operation and the operations for the current and prior periods are reported as a discontinued operation. The following table presents the financial results of the discontinued operation: Three months ended Six months ended In thousands, except per share data June 30, 2004 June 30, 2004 - ---------------------------------------------------------------------------- Revenues $ - $ 135 Operating expenses - 126 ----- ----- Gross profit - 9 General and administrative expenses - (126) Foreign currency gain - 141 Interest income - 3 Gain on sale of assets 112 112 Income tax provision - (12) ----- ----- Income from discontinued operation $ 112 $ 127 ----- ----- Earnings per share: Basic $0.09 $0.10 ----- ----- Diluted $0.03 $0.03 ----- -----
6 Note 5 - Reporting Comprehensive Income (Loss) Total comprehensive income (loss) for the three and six months ended June 30, 2005 and 2004 is as follows: Three months ended June 30 Six months ended June 30 In thousands 2005 2004 2005 2004 - --------------------------------------------------------------------------------------------------------- Net income (loss) $(401) $839 $(823) $877 ----- ---- ----- ---- Other comprehensive income (loss): Unrealized foreign currency translation gain (loss) (24) 90 (40) 106 Unrealized holding gain (loss) on securities 7 (38) (18) (37) Income taxes related to other comprehensive income (loss) items (3) 16 7 16 ----- ---- ----- ---- Total other comprehensive income (loss), net of tax (20) 68 (51) 85 ----- ---- ----- ---- Comprehensive income (loss) $(421) $907 $(874) $962 ===== ==== ===== ====
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. The Indoor display and Outdoor display segments are differentiated primarily by the customers they serve. The Entertainment/Real Estate segment owns a chain of motion picture theatres in the western Mountain States. 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, 2005 and 2004 is as follows: Three months ended June 30 Six months ended June 30 In thousands 2005 2004 2005 2004 - ------------------------------------------------------------------------------------------------------- Revenues: Indoor display $ 3,808 $ 4,595 $ 7,242 $ 8,925 Outdoor display 6,321 5,018 11,475 9,796 Entertainment/real estate 3,335 3,499 6,396 6,720 -------- -------- -------- -------- Total revenues 13,464 13,112 25,113 25,441 ======== ======== ======== ======== Operating income: Indoor display 390 645 699 1,536 Outdoor display 416 43 540 157 Entertainment/real estate 806 802 1,618 1,746 -------- -------- -------- -------- Total operating income 1,612 1,490 2,857 3,439 Other income 135 2,568 160 2,580 Corporate general and administrative expenses (1,504) (1,894) (2,512) (2,898) Interest expense-net (893) (922) (1,839) (1,837) Income tax benefit (provision) 249 (515) 511 (534) -------- -------- -------- -------- Income (loss) from continuing operations (401) 727 (823) 750 -------- -------- -------- -------- Income from discontinued operation, net of tax - 112 - 127 -------- -------- -------- -------- Net income (loss) $ (401) $ 839 $ (823) $ 877 ======== ======== ======== ========
7 Note 7 - Components of Net Periodic Pension Cost In December 2003, the FASB issued SFAS No. 132R, "Employers' Disclosures about Pensions and Other Postretirement Benefits" ("SFAS 132R"). SFAS 132R revises the financial statement disclosures required for pension and postretirement obligations, including new interim disclosures. As of December 31, 2003, the benefit service under the pension plan has been frozen and, accordingly, there is no service cost for the periods ended June 30, 2005 and 2004. The following table presents the components of net periodic pension cost: Three months ended June 30 Six months ended June 30 In thousands 2005 2004 2005 2004 - ----------------------------------------------------------------------------------------- Interest cost $ 156 $ 152 $ 312 $ 304 Expected return on plan assets (156) (148) (312) (296) Amortization of prior service cost 4 5 8 10 Amortization of net actuarial loss 67 61 134 122 ----- ----- ----- ----- Net periodic pension cost $ 71 $ 70 $ 142 $ 140 ===== ===== ===== =====
The Company previously disclosed, in its financial statements for the year ended December 31, 2004, that it expected to contribute $56,000 to its pension plan in 2005. The Company has elected to contribute an increased amount of $685,000, which was contributed in July 2005. Note 8 - Legal Proceedings and Claims The Company is subject to legal proceedings and claims, which arise in the ordinary course of its business. The Company is not a party to any pending legal proceedings and claims that it believes will have a material adverse effect on the consolidated financial position or operations of the Company. Note 9 - Joint Venture The Company has a 50% ownership in a joint venture partnership, MetroLux Theatres ("MetroLux"), accounted for by the equity method. 8 The following results of operations summary information relates to MetroLux for the three and six months ended June 30, 2005 and 2004, and summary balance sheet information relates to MetroLux as of June 30, 2005 and December 31, 2004: Three months ended June 30 Six months ended June 30 In thousands 2005 2004 2005 2004 - ----------------------------------------------------------------------------------------------------- Revenues $848 $931 $1,595 $1,888 Gross profit 470 528 923 1,073 Net income 178 246 358 510 Company's share of partnership net income 89 123 179 255 ------------------------------------------------------ June 30 December 31 In thousands 2005 2004 - ----------------------------------------------------------------------- Current assets $ 155 $ 606 Noncurrent assets 4,131 3,897 ------ ------ Total assets 4,286 4,503 ====== ====== Current liabilities 503 608 Noncurrent liabilities 1,516 1,635 ------ ------ Total liabilities 2,019 2,243 ====== ====== Company's equity in partnership net assets $1,154 $1,133 ------ ------
The Company's equity in partnership net assets is reflected in Other assets in the consolidated balance sheets. 9 Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations Overview Trans-Lux is a full service, worldwide provider of integrated electronic display solutions for today's communications environments. Incorporated in 1920, Trans-Lux specializes in the design, manufacture, installation and service of large-scale indoor and outdoor LED electronic display systems for applications in the financial, banking, gaming, corporate, transportation, entertainment and sports industries. Trans-Lux offers unique control systems as well as content through its partnerships with key data suppliers in the markets the Company serves. Trans-Lux has display equipment installed at thousands of locations around the world, including the world's major financial exchanges. In addition to its display business, the Company owns and operates a chain of motion picture theatres in the western Mountain States. 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 catalog sports, retail and commercial markets. In addition, on April 28, 2004, the Company sold its Australian operations, effective as of February 29, 2004. The Company has accounted for the Australian operations as a discontinued operation. Accordingly, the consolidated financial statements reflect the assets and liabilities of the discontinued operation and the operations for the current and prior periods are reported as a discontinued operation (see Note 4). The Entertainment/Real Estate segment includes the operations of the motion picture theatres in the western Mountain States and income-producing real estate properties. Results of Operations Six Months Ended June 30, 2005 Compared to Six Months Ended June 30, 2004 Total revenues for the six months ended June 30, 2005 decreased $328,000 or 1.3% to $25.1 million from $25.4 million for the six months ended June 30, 2004, principally due to decreases in Indoor display revenues offset by an increase in Outdoor display sales revenues. Indoor display revenues decreased $1.7 million or 18.9%. Of this decrease, Indoor display equipment sales decreased $828,000 or 26.0%, primarily due to the timing of recognizing percentage of completion sales, as the June 30, 2005 backlog is approximately $700,000 greater than last year. Indoor display equipment rentals and maintenance revenues decreased $855,000 or 14.9%, primarily due to disconnects and non-renewals of equipment on rental and maintenance on existing contracts in the financial services market. The financial services market continues to be negatively impacted by the current investment climate, resulting in consolidation within that industry. Although the market conditions appear to be improving, installations of new equipment tend to lag any economic turnaround. 10 Outdoor display revenues increased $1.7 million or 17.1%. Of this increase, Outdoor display equipment sales increased $1.8 million or 26.6%, in both the commercial business and catalog scoreboard business. The June 30, 2005 backlog for both the commercial business and catalog scoreboard business is approximately $1.5 million greater than last year. Outdoor display equipment rentals and maintenance revenues decreased $159,000 or 5.5%, primarily due to the continued expected revenue decline in the Outdoor display equipment rentals and maintenance bases previously acquired. Entertainment/Real Estate revenues decreased $324,000 or 4.8% primarily from a decrease in overall admissions which follows the industry-wide trend this year. The Company expanded two of its theatre locations with the opening of two additional screens to it existing five-plex in Durango, Colorado in April 2004 and two additional screens to its existing six-plex in Dillon, Colorado in January 2005. Total operating income for the six months ended June 30, 2005 decreased 16.9% to $2.9 million from $3.4 million for the six months ended June 30, 2004, principally due to the reduction in revenues in the Indoor display segment. Indoor display operating income decreased $837,000 or 54.5%, primarily as a result of the decrease in revenues in the financial services market. The cost of Indoor displays represented 63.8% of related revenues in 2005 compared to 60.3% in 2004. The cost of Indoor displays as a percentage of related revenues increased primarily due to the relationship between field service costs of equipment rentals and maintenance decreasing, and the revenues from Indoor display equipment rentals and maintenance also decreasing but not at the same rate. The Company has been working to restructure its field services operations and has completed the first phase by centralizing the dispatch and help desk functions to its Des Moines, Iowa facility. Field service costs in the first half of 2005 compared to the first half of 2004 were reduced by approximately $98,000. Indoor display cost of equipment sales decreased $652,000 or 41.0%, primarily due to the decrease in revenues and the volume mix. Indoor display cost of equipment rentals and maintenance decreased $109,000 or 2.9%, largely due to the reduction in the rentals and maintenance bases. Cost of Indoor display equipment rentals and maintenance includes field service expenses, plant repair costs, maintenance and depreciation. Indoor display general and administrative expenses decreased $85,000 or 4.2%, due primarily to a decrease in marketing expenses in the financial services industry. Outdoor display operating income increased $383,000 to $540,000, primarily as a result of the increase in equipment sales. The cost of outdoor displays represented 78.9% of related revenues in 2005 compared to 82.1% in 2004. This change is primarily due to the increase in volume of sales in both the commercial business and catalog scoreboard business. Outdoor display cost of equipment sales increased $1.3 million or 23.9%, principally due to the increase in volume. Outdoor display cost of equipment rentals and maintenance decreased $244,000 or 8.9%, primarily due to a decrease in field service costs. Cost of Outdoor display equipment rentals and maintenance includes field service expenses, plant repair costs, maintenance and depreciation. Outdoor display general and administrative expenses increased $278,000 or 17.4%, due to an increase in marketing expense, an increase in commercial outdoor sales payroll and travel and an increase in the allowance for uncollectable accounts. 11 Entertainment/Real Estate operating income decreased $128,000 or 7.3%, primarily due to a decrease in overall admissions. The cost of Entertainment/real estate represented 72.7% of related revenues in 2005 compared to 73.6% in 2004. Cost of Entertainment/real estate, which includes film rental costs and depreciation expense, decreased $302,000 or 6.1%, primarily due to the reduction in revenues. Entertainment/Real Estate general and administrative expenses increased $30,000 due to increased payroll. Corporate general and administrative expenses decreased $386,000 or 13.3%, due to reductions in insurance expense and payroll benefits, despite an increase in the foreign currency loss compared to the prior year. Net interest expense was level, although there was an increase in the interest rates of the variable rate debt but a decrease in long-term debt. The income from joint venture relates to the operations of the theatre joint venture, MetroLux Theatres, in Loveland, Colorado, which decreased $76,000 or 29.8%, due to a decrease in overall admissions following the industry trend and a competitive situation in the area. The effective tax rate for the six months ended June 30, 2005 and 2004 was 38.3% and 41.0%, respectively. Three Months Ended June 30, 2005 Compared to Three Months Ended June 30, 2004 Total revenues for the three months ended June 30, 2005 increased 2.7% to $13.5 million from $13.1 million for the three months ended June 30, 2004, principally due to an increase in Outdoor display sales revenues, offset by decreases in Indoor display revenues. Indoor display revenues decreased $787,000 or 17.1%. Of this decrease, Indoor display equipment sales decreased $206,000 or 13.2%, primarily due to the timing of recognizing percentage of completion sales, as the June 30, 2005 backlog is approximately $700,000 greater than last year. Indoor display equipment rentals and maintenance revenues decreased $581,000 or 19.2%, primarily due to disconnects and non-renewals of equipment on rental and maintenance on existing contracts in the financial services market. The financial services market continues to be negatively impacted by the current investment climate, resulting in consolidation within that industry. Although the market conditions appear to be improving, installations of new equipment tend to lag any economic turnaround. Outdoor display revenues increased $1.3 million or 26.0%. Of this increase, Outdoor display equipment sales increased $1.3 million or 34.4%, in both the commercial business and catalog scoreboard business. The June 30, 2005 backlog for both the commercial business and catalog scoreboard business is approximately $1.5 million greater than last year. Outdoor display equipment rentals and maintenance revenues increased slightly. Entertainment/Real Estate revenues decreased $164,000 or 4.7%, primarily from a decrease in overall admissions which follows the industry-wide trend this year. The Company expanded two of its theatre locations with the opening of two additional screens to its existing five-plex in Durango, 12 Colorado in April 2004 and two additional screens to its existing six-plex in Dillon, Colorado in January 2005. Total operating income for the three months ended June 30, 2005 increased 8.1% to $1.6 million from $1.5 million for the three months ended June 30, 2004, principally due to the increase in revenues in the Outdoor display segment. Indoor display operating income decreased $255,000 or 39.5%, primarily as a result of the decrease in revenues in the financial services market. The cost of Indoor displays represented 64.9% of related revenues in 2005 compared to 60.1% in 2004. The cost of Indoor displays as a percentage of related revenues increased primarily due to the relationship between field service costs of equipment rentals and maintenance decreasing, and the revenues from Indoor display equipment rentals and maintenance also decreasing but not at the same rate. The Company continues to strategically address the field service costs and has completed the first phase by centralizing the dispatch and help desk functions to its Des Moines, Iowa facility. Field service costs in the second quarter of 2005 compared to the second quarter of 2004 were reduced by approximately $49,000. Indoor display cost of equipment sales decreased $250,000 or 30.0%, primarily due to the decrease in revenues and the volume mix. Indoor display cost of equipment rentals and maintenance decreased $43,000 or 2.2%, largely due to the reduction in the rentals and maintenance bases. Cost of Indoor display equipment rentals and maintenance includes field service expenses, plant repair costs, maintenance and depreciation. Indoor display general and administrative expenses decreased $239,000 or 20.1%, due primarily to a decrease in marketing expenses in the financial services industry. Outdoor display operating income increased $373,000 to $416,000, primarily as a result of the increase in equipment sales. The cost of outdoor displays represented 77.5% of related revenues in 2005 compared to 84.7% in 2004. This change is primarily due to the increase in volume of sales in both the commercial business and catalog scoreboard business. Outdoor display cost of equipment sales increased $849,000 or 30.5%, principally due to the increase in volume. Outdoor display cost of equipment rentals and maintenance decreased $204,000 or 13.9%, primarily due to a decrease in field service costs. Cost of Outdoor display equipment rentals and maintenance includes field service expenses, plant repair costs, maintenance and depreciation. Outdoor display general and administrative expenses increased $285,000 or 39.4%, due to an increase in marketing expense, an increase in commercial outdoor sales payroll and travel and an increase in the allowance for uncollectable accounts. Entertainment/Real Estate operating income remained level, with overall admissions decreasing and costs also decreasing. The cost of Entertainment/real estate represented 73.4% of related revenues in 2005 compared to 75.8% in 2004. Cost of Entertainment/real estate, which includes film rental costs and depreciation expense, decreased $205,000 or 7.7%, primarily due to the reduction in revenues. Entertainment/Real Estate general and administrative expenses also remained level. Corporate general and administrative expenses decreased $391,000 or 20.6%, due to reductions in insurance expense, payroll and benefits. Net interest expense decreased $29,000, which is primarily attributable to interest received related to the receivable from the sale/leaseback of a building in 2004, offset by an increase in the interest rates 13 of the variable rate debt. The income from joint venture relates to the operations of the theatre joint venture, MetroLux Theatres, in Loveland, Colorado, which decreased $34,000 or 27.6% due to a decrease in overall admissions following the industry trend and a competitive situation in the area. The effective tax rate for the three months ended June 30, 2005 and 2004 was 38.3% and 41.0%, respectively. Liquidity and Capital Resources The regular quarterly cash dividend for the second quarter of 2005 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 19, 2005, payable to stockholders of record as of June 23, 2005, and was paid July 15, 2005. During the fourth quarter of 2004, the Company completed an amendment of its senior debt, which included a term loan of $10.0 million, a non-revolving line of credit of up to $6.2 million for the purpose of financing 50% of the redemption and/or purchase of its outstanding Old Notes on a matching basis and a revolving loan of up to $5.0 million at variable interest rates ranging from LIBOR plus 2.25% to Prime plus 0.25% (5.37% and 5.61% at June 30, 2005). The term loan, non- revolving line of credit and revolving loan mature on January 1, 2012, January 1, 2007 and January 1, 2008, respectively. Upon maturity of the non-revolving line of credit, it is convertible into a converted term loan maturing January 1, 2012. At June 30, 2005, both the non-revolving line of credit and the revolving loan were fully available as none had been drawn. Subsequent to the second quarter, the Company borrowed $850,000 against its revolving loan facility to fund the purchase of land in Silver City, New Mexico for the construction of a new theatre. The credit agreement requires an annual facility fee on the unused commitment of 0.25%, and requires compliance with certain financial covenants, which include a fixed charge coverage ratio of 1.1 to 1.0, a loan-to-value ratio of not more than 50%, a leverage ratio of 3.0 to 1.0, maintaining a tangible net worth of not less than $20.8 million, plus 50% of net income and maintaining accounts with an average monthly compensating balance of not less than $750,000. At June 30, 2005, the Company was in compliance with such financial covenants. During the second quarter of 2004, the Company successfully completed its offer to exchange $1,000 principal amount of its new 8 1/4% Limited Convertible Senior Subordinated Notes due 2012 for each $1,000 principal amount of its 7 1/2% Convertible Subordinated Notes due 2006. The exchange offer commenced March 2, 2004 and expired on April 14, 2004. A total of $17.9 million principal amount of Old Notes were exchanged, leaving $12.3 million principal amount of Old Notes outstanding. The New Notes provide for a higher interest rate, have a longer term, are convertible into Common Stock at a lower conversion price of $9.00 per share until March 1, 2007 and are senior to the Old Notes and the Company's 9 1/2% Subordinated Debentures due 2012. Under various agreements, the Company is obligated to make future cash payments in fixed amounts. These include payments under the Company's long-term debt agreements, including the 7 1/2% Convertible Subordinated Notes not exchanged in the Exchange Offer that mature December 1, 2006, employment and consulting agreement payments and rent payments required under operating lease agreements. 14 The following table summarizes the Company's fixed cash obligations as of June 30, 2005 for the remainder of 2005 and the next four years: Remainder of In thousands 2005 2006 2007 2008 2009 - ------------ ---- ---- ---- ---- ---- Long-term debt $1,067 $14,458 $2,090 $4,704 $2,258 Employment and consulting agreement obligations 935 1,566 1,588 1,416 1,018 Operating leases 376 711 584 388 252 ------ ------- ------ ------ ------ Total $2,378 $16,735 $4,262 $6,508 $3,528 ====== ======= ====== ====== ======
Cash and cash equivalents decreased $869,000 for the six months ended June 30, 2005 compared to an increase of $1.8 million in 2004. The decrease in 2005 is primarily attributable to investment in equipment for rental, expansion of the Company's movie theatre in Dillon, Colorado, and scheduled payments of long-term debt. This decrease is offset by proceeds received from construction loan borrowings of $903,000 and cash provided by operating activities of $1.2 million, which is $2.7 million less than the cash provided by operating activities of $3.9 million for 2004, largely due to the decrease in accounts payable and accruals. The increase in 2004 is primarily attributable to cash provided by operating activities of $3.9 million and proceeds received from construction loan borrowings, offset by investment in equipment for rental, expansion of the Company's movie theatre in Durango, Colorado and scheduled payments of long-term debt. 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 is exposed to foreign currency exchange rate risk mainly as a result of investment in its Canadian subsidiary and previously its Australian subsidiary. The Company may, from time to time, enter into derivative contracts to manage its interest risk. The Company does not enter into derivatives for trading or speculative purposes. At June 30, 2005, the Company did not hold any derivative financial instruments. A one percentage point change in interest rates would result in an annual interest expense fluctuation of approximately $263,000. A 10% change in the Canadian dollar relative to the U.S. dollar would result in a currency exchange fluctuation of approximately $210,000, based on dealer quotes, considering current exchange rates. 15 Item 4. Controls and Procedures Evaluation of Disclosure Controls and Procedures. The Company's President and Co-Chief Executive Officer, Michael R. Mulcahy, the Company's Executive Vice President and Co-Chief Executive Officer, Thomas Brandt, and the Company's Executive Vice President and Chief Financial Officer, Angela D. Toppi, have evaluated the effectiveness of the design and operation of its disclosure controls and procedures as of the end of the period covered by this quarterly report. Based on this evaluation, our Co-Chief Executive Officers and Chief Financial Officer have concluded that the Company's disclosure controls and procedures are effective to ensure that material information required to be disclosed by the Company in the reports that are filed or submitted under the Securities Exchange Act of 1934 is recorded, processed, summarized and reported within the time periods specified in the Securities and Exchange Commission's rules and forms. The disclosure controls and procedures are designed to provide reasonable assurance that such information is accumulated and communicated to the Co-Chief Executive Officers and Chief Financial Officer. The disclosure controls and procedures include components of our internal controls over financial reporting. The Company's Co-Chief Executive Officers' and Chief Financial Officer's assessment of the effectiveness of the internal controls over financial reporting is expressed at the level of reasonable assurance because a control system, no matter how well designed and operated, can provide only reasonable, but not absolute, assurance that the control system's objectives will be met. Changes in Internal Control over Financial Reporting. There has been no change in the Company's internal control over financial reporting, that occurred in the second fiscal quarter, that has materially affected, or is reasonably likely to materially affect, the Company's internal control over financial reporting. 16 Part II - Other Information Item 4. Submission of Matters to a Vote of Security Holders The Annual Meeting of Stockholders of Trans-Lux Corporation was held on May 19, 2005 for the purpose of electing directors and ratifying the retention 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 Withheld --- -------- Matthew Brandt 3,617,806 65,981 Robert B. Greenes 3,617,111 66,676 Howard S. Modlin 3,617,111 66,676 Michael R. Mulcahy 3,617,841 65,946
The following directors are continuing their terms as directors: Steven Baruch, One-Year Remaining Richard Brandt, Two-Years Remaining Thomas Brandt, One-Year Remaining Howard M. Brenner, One-Year Remaining Jean Firstenberg, Two-Years Remaining Gene Jankowski, Two-Years Remaining Victor Liss, Two-Years Remaining The recommendation to ratify the retention of Eisner LLP as the independent auditors for the Company was approved by the following vote: For Against Abstain --- ------- ------- Totals 3,633,912 9,762 40,113
Item 5. Other Information During the quarter for which this report on Form 10-Q is filed, the registrant filed a Form 8-K dated May 13, 2005, containing a press release pertaining to the financial performance for the first quarter of 2005. Item 6. Exhibits 10.1 Employment Agreement with Al Miller dated as of April 1, 2005, filed herewith. 10.2 Employment Agreement with John Long dated as of April 1, 2005, filed herewith. 17 31.1 Certification of Michael R. Mulcahy, President and Co-Chief Executive Officer, pursuant to Rule 13a-14(a) and 15d-14(a), as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002. 31.2 Certification of Thomas Brandt, Executive Vice President and Co-Chief Executive Officer, pursuant to Rule 13a-14(a) and 15d-14(a), as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002. 31.3 Certification of Angela D. Toppi, Executive Vice President and Chief Financial Officer, pursuant to Rule 13a-14(a) and 15d-14(a), as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002. 32.1 Certification of Michael R. Mulcahy, President and Co-Chief Executive Officer, pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002. 32.2 Certification of Thomas Brandt, Executive Vice President and Co-Chief Executive Officer, pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002. 32.3 Certification of Angela D. Toppi, Executive Vice President and Chief Financial Officer, pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002. 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 15, 2005 by /s/ Angela D. Toppi ---------------------------- Angela D. Toppi Executive Vice President and Chief Financial Officer 18 EX-10.1 2 almilleremp.txt EMPLOYMENT CONTRACT AL MILLER Exhibit 10.1 AGREEMENT made as of the lst day of April, 2005 by and between TRANS-LUX CORPORATION, a Delaware corporation having an office at 110 Richards Avenue, Norwalk, Connecticut 06856-5090 (hereinafter called "Employer"), and AL MILLER residing at 22 Deer Run Lane, Shelton, Connecticut 06484 (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 period commencing on April l, 2005 and terminating March 3l, 2008. (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 capacity of Employer (and such of its affiliates, divisions and subsidiaries as Employer shall designate). Employer shall use its reasonable efforts to cause Employee to be elected and continue to be elected an Executive 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, the Vice-Chairman of the Board or President and Co-Chief Executive Officer, 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 President and Co-Chief Executive Officer and 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, except for current real estate ventures disclosed to Employer concurrently with the signing of this Agreement. 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 which 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, 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 FORTY-FIVE THOUSAND DOLLARS ($145,000) per annum during the period April l, 2005 to March 31, 2006; at the rate of ONE HUNDRED FIFTY-ONE THOUSAND DOLLARS ($151,000) per annum during the period April 1, 2006 to March 31, 2007 and at the rate of ONE HUNDRED FIFTY-SEVEN THOUSAND DOLLARS ($157,000) per annum during the period April 1, 2007 to March 31, 2008. 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 his and for its employees generally. Such rights and benefits currently include a performance bonus and sales override plan, the terms of which are subject to revision by the Employer each year during the Term of this Agreement. The performance bonus and sales override target amount of earnings shall be $35,000 for 2005, $37,500 for 2006, and $40,000 for 2007 and $10,000 for the period January 1-March 31, 2008. The maximum earnings under this plan shall not exceed two times the target amount for any of the full calendar years 2005, 2006 and 2007 or $10,000 for January 1-March 31, 2008. 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 four (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 or eighteen (18) months, whichever is less, but in no event less than ninety (90) days, 40% 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, 2006, 2007, 2008 and 2009, 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, based on Employer's annual pre-tax consolidated earnings for the applicable fiscal year, Employer shall pay Employee a Bonus at the rate of one-half of one percent (1/2 of 1%) of the annual pre-tax consolidated earnings for the fiscal years ending December 31, 2005, 2006, 2007 and 2008 (including the period January 1-March 31, 2005 as herewith provided in Section 12) only, in the event Employer's pre-tax consolidated earnings for such year determined in accordance with Section 4(d) exceeds $500,000, provided that this Bonus shall not exceed $40,000 for any year, and the Bonus, if any, for January 1-March 31, 2008 shall be 25% of the amount for the year 2008, not to exceed $10,000. 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. 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 2005, 2006 or 2007 fiscal year or March 31, 2008, no Bonus shall be paid for such fiscal year or part thereof as to 2008. In the event of Employee's death on or after January 1 of 2006, 2007, or 2008 or March 31, 2008 as to 2008, any Bonus to which he is otherwise entitled for the prior fiscal year shall be paid to his surviving spouse 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 and 8 1/4% Limited Convertible Subordinated Notes due 2012 may be included or excluded in such calculation by the Board in its 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 2005, 2006, 2007 and 2008. 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 surviving spouse 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 40% of Employee's then annual base salary rate. 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 any way, 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 any Employer employee or, (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 shall at no time during or after employment 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. In addition to the obligations of the Employee contained in this Agreement, Employee agrees to be bound by the provisions contained in Exhibit A to this Agreement. 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 and Co-Chief Executive Officer, 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 April 1, 2005 the Agreement between Employer and Employee dated as of April 1, 2002, as amended except any amounts which accrued as of such date and are unpaid, but excluding the Bonus for the period January 1-March 31, 2005 which is covered by Section 4(d) hereof. 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/ Al Miller _____________________________ Al Miller EX-10.2 3 jlongemp.txt EMPLOYMENT CONTRACT JOHN LONG Exhibit 10.2 AGREEMENT made as of the 1st day of April, 2005 by and between TRANS-LUX CORPORATION, a Delaware corporation having an office at 110 Richards Avenue, Norwalk, Connecticut 06856-5090 (hereinafter called "Employer"), and JOHN LONG, residing at 4712 Colt Drive, West Des Moines, IA 50265 (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 period commencing on April l, 2005 and terminating March 31, 2008. (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 capacity of Employer (and such of its affiliates, divisions and subsidiaries) as Employer shall designate including Trans-Lux Midwest Corporation ("Midwest") and Trans-Lux West Corporation ("West"). 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, the Vice-Chairman of the Board, President and Co-Chief Executive Officer, or Executive Vice 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 President and Co-Chief Executive Officer, Executive Vice President and 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. Additionally, 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 1ists 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 FIFTEEN THOUSAND DOLLARS ($115,000) per annum during the period April l, 2005 to March 31, 2006; at the rate of ONE HUNDRED TWENTY THOUSAND DOLLARS ($120,000) per annum during the period April 1, 2006 to March 31, 2007 and at the rate of ONE HUNDRED TWENTY-FIVE THOUSAND DOLLARS ($125,000) per annum during the period April 1, 2007 to March 31, 2008. 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, pension, group insurance or other benefits which Employer presently provides, or may provide for him and for its employees generally. Such rights and benefits include a performance bonus and sales override plan, the terms of which are subject to revision by the Employer each year. The performance bonus and sales override target amount of earnings shall be $40,000 for the period January 1, 2005-December 31, 2005, $42,000 for January 1, 2006-December 31, 2006, and $44,000 for January 1, 2007-December 31, 2007 and $11,000 for the period January 1-March 31, 2008). The maximum earnings under this plan shall not exceed two times the target amount for any of the full calendar years 2005, 2006 and 2007 or $11,000 for the period January 1-March 31, 2008. 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) The Board upon the recommendation of the Compensation Committee of the Board shall consider no later than May 31, 2006, 2007, 2008 and 2009, 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, based on Employer's annual pre-tax consolidated earnings in the applicable fiscal year, Employer shall pay Employee a Bonus at the rate of one-quarter of one percent (.25%) for the fiscal years ending December 31, 2005, 2006 and 2007, and pro rata for 2008. This Bonus shall not exceed $20,000 for any year and the Bonus, if any, for January 1-March 31, 2008 shall be 25% of the amount for the year 2008, not to exceed $5,000. No Bonus shall be payable for any fiscal year in which the annual pre-tax consolidated earnings determined in accordance with Section 4(c) are less than $500,000. There shall be excluded from the calculation of pre-tax consolidated earnings during the Term of this Agreement (1) 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 or other employees. Notwithstanding anything to the contrary contained herein, if Employee is not in the employ of Employer at the end of any aforesaid 2005, 2006 or 2007 fiscal year, or March 31, 2008, no Bonus shall be paid for such fiscal year or part thereof as to 2008. In the event of Employee's death on or after January 1 of 2006, 2007 or 2008 or March 31, 2008 as to 2008, 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. 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. 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 and 8 1/4% Limited Convertible Subordinated Notes due 2012 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 2005, 2006, 2007 and 2008. 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. (d) 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 four (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 or twelve (12) months, whichever is less, 35% of the base salary which Employee would otherwise have been entitled to receive if not for the illness or other incapacity. (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 surviving spouse or his surviving issue, as the case may be, for the balance of the Term of the Agreement, or twelve (12) 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. 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 equal to three (3) weeks per annum or the amount provided by the Employer's policy, whichever is greater, 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 Section 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 any Employer employee or (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 shall at no time during or after employment 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. In addition to the obligations of the Employee contained in this Agreement, Employee agrees to be bound by the provisions contained in Exhibit A to this Agreement. 8. In the event any provision of Section 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 and Co-Chief Executive Officer, 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. 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/ John Long ___________________________ John Long EX-31.1 4 exhibit311.txt CERTIFICATION - M. MULCAHY EXHIBIT 31.1 CERTIFICATION I, Michael R. Mulcahy, President and Co-Chief Executive Officer of Trans-Lux Corporation, certify that: 1. I have reviewed this Report on Form 10-Q (the "Report") of Trans-Lux Corporation; 2. Based on my knowledge, this Report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this Report; 3. Based on my knowledge, the financial statements, and other financial information included in this Report, fairly present in all material respects the financial condition, results of operations and cash flows of the Registrant as of, and for, the periods presented in this Report; 4. The Registrant's other certifying officers and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15 (e) and 15d-15(e)) for the Registrant and have; a) designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the Registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this Report is being prepared; b) evaluated the effectiveness of the Registrant's disclosure controls and procedures and presented in this Report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this Report based on such evaluation; and c) disclosed in this Report any change in the Registrant's internal control over financial reporting that occurred during the Registrant's most recent fiscal quarter that has materially affected, or is reasonably likely to materially affect, the Registrant's internal control over financial reporting. 5. The Registrant's other certifying officers and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the Registrant's auditors and the audit committee of the Registrant's board of directors: a) all significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the Registrant's ability to record, process, summarize and report financial information; and b) any fraud, whether or not material, that involves management or other employees who have a significant role in the Registrant's internal control over financial reporting. /s/ Michael R. Mulcahy ---------------------------------------- Date: August 15, 2005 Michael R. Mulcahy President and Co-Chief Executive Officer EX-31.2 5 exhibit312.txt CERTIFICATION - T. BRANDT EXHIBIT 31.2 CERTIFICATION I, Thomas Brandt, Executive Vice President and Co-Chief Executive Officer of Trans-Lux Corporation, certify that: 1. I have reviewed this Report on Form 10-Q (the "Report") of Trans-Lux Corporation; 2. Based on my knowledge, this Report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this Report; 3. Based on my knowledge, the financial statements, and other financial information included in this Report, fairly present in all material respects the financial condition, results of operations and cash flows of the Registrant as of, and for, the periods presented in this Report; 4. The Registrant's other certifying officers and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15 (e) and 15d-15(e)) for the Registrant and have; a) designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the Registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this Report is being prepared; b) evaluated the effectiveness of the Registrant's disclosure controls and procedures and presented in this Report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this Report based on such evaluation; and c) disclosed in this Report any change in the Registrant's internal control over financial reporting that occurred during the Registrant's most recent fiscal quarter that has materially affected, or is reasonably likely to materially affect, the Registrant's internal control over financial reporting. 5. The Registrant's other certifying officers and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the Registrant's auditors and the audit committee of the Registrant's board of directors: a) all significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the Registrant's ability to record, process, summarize and report financial information; and b) any fraud, whether or not material, that involves management or other employees who have a significant role in the Registrant's internal control over financial reporting. /s/ Thomas Brandt --------------------------------- Date: August 15, 2005 Thomas Brandt Executive Vice President and Co-Chief Executive Officer EX-31.3 6 exhibit313.txt CERTIFICATION - A. TOPPI EXHIBIT 31.3 CERTIFICATION I, Angela D. Toppi, Executive Vice President and Chief Financial Officer of Trans-Lux Corporation, certify that: 1. I have reviewed this Report on Form 10-Q (the "Report") of Trans-Lux Corporation; 2. Based on my knowledge, this Report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this Report; 3. Based on my knowledge, the financial statements, and other financial information included in this Report, fairly present in all material respects the financial condition, results of operations and cash flows of the Registrant as of, and for, the periods presented in this Report; 4. The Registrant's other certifying officers and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15 (e) and 15d-15(e)) for the Registrant and have; a) designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the Registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this Report is being prepared; b) evaluated the effectiveness of the Registrant's disclosure controls and procedures and presented in this Report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this Report based on such evaluation; and c) disclosed in this Report any change in the Registrant's internal control over financial reporting that occurred during the Registrant's most recent fiscal quarter that has materially affected, or is reasonably likely to materially affect, the Registrant's internal control over financial reporting. 5. The Registrant's other certifying officers and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the Registrant's auditors and the audit committee of the Registrant's board of directors: a) all significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the Registrant's ability to record, process, summarize and report financial information; and b) any fraud, whether or not material, that involves management or other employees who have a significant role in the Registrant's internal control over financial reporting. /s/ Angela D. Toppi ----------------------------- Date: August 15, 2005 Angela D. Toppi Executive Vice President and Chief Financial Officer EX-32.1 7 exhibit321.txt 906 CERTIFICATION - M. MULCAHY EXHIBIT 32.1 CERTIFICATION OF CO-CHIEF EXECUTIVE OFFICER PURSUANT TO 18 U.S.C. SECTION 1350, AS ADOPTED PURSUANT TO SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002 Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 (subsections (a) and (b) of section 1350, chapter 63 of title 18, United States Code), I, Michael R. Mulcahy, President and Co-Chief Executive Officer of Trans-Lux Corporation, do hereby certify, to the best of my knowledge that: (1) The Registrant's Quarterly Report on Form 10-Q for the quarter ended June 30, 2005 being filed with the Securities and Exchange Commission (the "Report") fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934, as amended; and (2) The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Registrant. This Certification accompanies this Form 10-Q as an exhibit, but shall not be deemed as having been filed for purposes of Section 18 of the Securities Exchange Act of 1934 or as a separate disclosure document of the Registrant or the certifying officer. /s/ Michael R. Mulcahy ---------------------------------------- Date: August 15, 2005 Michael R. Mulcahy President and Co-Chief Executive Officer EX-32.2 8 exhibit322.txt 906 CERTIFICATION - T. BRANDT EXHIBIT 32.2 CERTIFICATION OF CO-CHIEF EXECUTIVE OFFICER PURSUANT TO 18 U.S.C. SECTION 1350, AS ADOPTED PURSUANT TO SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002 Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 (subsections (a) and (b) of section 1350, chapter 63 of title 18, United States Code), I, Thomas Brandt, Executive Vice President and Co- Chief Executive Officer of Trans-Lux Corporation (the "Registrant"), do hereby certify, to the best of my knowledge that: (1) The Registrant's Quarterly Report on Form 10-Q for the quarter ended June 30, 2005 being filed with the Securities and Exchange Commission (the "Report") fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934, as amended; and (2) The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Registrant. This Certification accompanies this Form 10-Q as an exhibit, but shall not be deemed as having been filed for purposes of Section 18 of the Securities Exchange Act of 1934 or as a separate disclosure document of the Registrant or the certifying officer. /s/ Thomas Brandt ---------------------------- Date: August 15, 2005 Thomas Brandt Executive Vice President and Co-Chief Executive Officer EX-32.3 9 exhibit323.txt 906 CERTIFICATION - A. TOPPI EXHIBIT 32.3 CERTIFICATION OF CHIEF FINANCIAL OFFICER PURSUANT TO 18 U.S.C. SECTION 1350, AS ADOPTED PURSUANT TO SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002 Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 (subsections (a) and (b) of section 1350, chapter 63 of title 18, United States Code), I, Angela D. Toppi, Executive Vice President and Chief Financial Officer of Trans-Lux Corporation (the "Registrant"), do hereby certify, to the best of my knowledge that: (1) The Registrant's Quarterly Report on Form 10-Q for the quarter ended June 30, 2005 being filed with the Securities and Exchange Commission (the "Report") fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934, as amended; and (2) The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Registrant. This Certification accompanies this Form 10-Q as an exhibit, but shall not be deemed as having been filed for purposes of Section 18 of the Securities Exchange Act of 1934 or as a separate disclosure document of the Registrant or the certifying officer. /s/ Angela D. Toppi ----------------------------- Date: August 15, 2005 Angela D. Toppi Executive Vice President and Chief Financial Officer -----END PRIVACY-ENHANCED MESSAGE-----