-----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, KVgJF8e4TZv/dbV422xGEg3I6jX6iqugXt7QLVRgCRGJtDl3zvIJlGBBmRM0Ue/t PtcRQv7GCy3YPXp2u8+m3g== 0000099106-06-000026.txt : 20060814 0000099106-06-000026.hdr.sgml : 20060814 20060814154410 ACCESSION NUMBER: 0000099106-06-000026 CONFORMED SUBMISSION TYPE: 10-Q PUBLIC DOCUMENT COUNT: 7 CONFORMED PERIOD OF REPORT: 20060630 FILED AS OF DATE: 20060814 DATE AS OF CHANGE: 20060814 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: 061030082 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 june0610q.txt JUNE 2006 10Q 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, 2006 ------------- 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 a large accelerated filer, an accelerated filer or a non-accelerated filer. See definition of "accelerated filer and large accelerated filer" in Rule 12b-2 of the Exchange Act. (check one) Large accelerated filer Accelerated filer Non-accelerated filer X --- --- --- Indicate by check mark whether the Registrant is a shell company (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 - -------- ------------------------------ ------------------ 08/11/06 Common Stock - $1.00 Par Value 973,598 08/11/06 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. Condensed Consolidated Balance Sheets - June 30, 2006 and December 31, 2005 (audited) 1 Condensed Consolidated Statements of Operations - Three and Six Months Ended June 30, 2006 and 2005 2 Condensed Consolidated Statements of Cash Flows - Six Months Ended June 30, 2006 and 2005 3 Notes to Condensed Consolidated 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 1A. Risk Factors 16 Item 4. Submission of Matters to a Vote of Security Holders 17 Item 5. Other Information 17 Item 6. Exhibits 18 Signatures 18 Exhibits
Part I - Financial Information ------------------------------ TRANS-LUX CORPORATION AND SUBSIDIARIES CONDENSED CONSOLIDATED BALANCE SHEETS June 30 December 31 In thousands, except share data 2006 2005 - --------------------------------------------------------------------------------------------- (unaudited) (audited) ASSETS Current assets: Cash and cash equivalents $ 4,573 $ 13,610 Available-for-sale securities 176 431 Receivables, less allowance of $1,055 - 2006 and $935 - 2005 6,921 6,321 Unbilled receivables 1,000 842 Inventories 5,911 5,658 Prepaids and other 1,329 1,149 ------- -------- Total current assets 19,910 28,011 ------- -------- Rental equipment 93,787 91,648 Less accumulated depreciation 60,133 56,280 ------- -------- 33,654 35,368 ------- -------- Property, plant and equipment 39,421 39,188 Less accumulated depreciation 10,599 9,850 ------- -------- 28,822 29,338 Goodwill 1,004 1,004 Other assets 6,329 6,829 ------- -------- TOTAL ASSETS $89,719 $100,550 ======= ======== LIABILITIES AND STOCKHOLDERS' EQUITY Current liabilities: Accounts payable $ 2,738 $ 2,821 Accrued liabilities 6,762 6,986 Current portion of long-term debt 2,174 14,145 ------- -------- Total current liabilities 11,674 23,952 ------- -------- Long-term debt: 8 1/4% limited convertible senior subordinated notes due 2012 17,976 17,868 9 1/2% subordinated debentures due 2012 1,057 1,057 Notes payable 33,137 29,440 ------- -------- 52,170 48,365 Deferred credits, deposits and other 2,566 2,859 Deferred income taxes 2,300 2,978 Stockholders' equity: Capital stock Common - $1 par value - 5,500,000 shares authorized, 2,453,591 shares issued in 2006 and 2005 2,453 2,453 Class B - $1 par value - 1,000,000 shares authorized, 286,814 shares issued in 2006 and 2005 287 287 Additional paid-in-capital 13,903 13,901 Retained earnings 17,374 18,883 Accumulated other comprehensive loss (1,167) (1,287) ------- -------- 32,850 34,237 Less treasury stock - at cost - 1,480,045 shares in 2006 and 2005 (excludes additional 286,814 shares held in 2006 and 2005 for conversion of Class B stock) 11,841 11,841 ------- -------- Total stockholders' equity 21,009 22,396 ------- -------- TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY $89,719 $100,550 ======= ======== - --------------------------------------------------------------------------------------------- The accompanying notes are an integral part of these condensed consolidated financial statements.
1 TRANS-LUX CORPORATION AND SUBSIDIARIES CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS (unaudited) THREE MONTHS ENDED SIX MONTHS ENDED JUNE 30 JUNE 30 ------------------ ------------------ In thousands, except per share data 2006 2005 2006 2005 - ------------------------------------------------------------------------------------------------ Revenues: Equipment rentals and maintenance $ 3,487 $ 3,830 $ 7,007 $ 7,605 Equipment sales 6,790 6,299 11,790 11,112 Theatre receipts and other 3,432 3,335 6,522 6,396 ------- ------- ------- ------- Total revenues 13,709 13,464 25,319 25,113 ------- ------- ------- ------- Operating expenses: Cost of equipment rentals and maintenance 2,949 3,146 5,908 6,191 Cost of equipment sales 4,958 4,221 8,726 7,488 Cost of theatre receipts and other 2,455 2,447 4,615 4,647 ------- ------- ------- ------- Total operating expenses 10,362 9,814 19,249 18,326 ------- ------- ------- ------- Gross profit from operations 3,347 3,650 6,070 6,787 General and administrative expenses (3,102) (3,631) (6,480) (6,621) Interest income 136 155 201 201 Interest expense (1,160) (1,048) (2,288) (2,040) Gain on sale of assets - 108 - 108 Other income 19 27 18 52 ------- ------- ------- ------- Loss from operations before income from joint venture and income taxes (760) (739) (2,479) (1,513) Income from joint venture 129 89 203 179 Income tax benefit 238 249 810 511 ------- ------- ------- ------- Net loss $ (393) $ (401) $(1,466) $ (823) ======= ======= ======= ======= Loss per share - basic $ (0.31) $ (0.32) $ (1.16) $ (0.65) ======= ======= ======= ======= Average common shares outstanding - basic 1,260 1,261 1,260 1,261 ======= ======= ======= ======= Cash dividends per share: Common stock $ - $ 0.035 $ 0.035 $ 0.070 Class B stock $ - $0.0315 $0.0315 $0.0630 - ------------------------------------------------------------------------------------------------ The accompanying notes are an integral part of these condensed consolidated financial statements.
2 TRANS-LUX CORPORATION AND SUBSIDIARIES CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (unaudited) SIX MONTHS ENDED JUNE 30 ------------------- In thousands 2006 2005 - ----------------------------------------------------------------------------------------------------- Cash flows from operating activities Net loss $ (1,466) $ (823) Adjustment to reconcile net loss to net cash provided by operating activities: Depreciation and amortization 4,770 4,821 Income from joint venture (203) (179) Deferred income taxes (684) (524) Gain on sale of assets - (108) Loss (gain) on sale of available-for-sale securities 15 (1) Changes in operating assets and liabilities: Receivables (758) (531) Inventories (253) 73 Prepaids and other assets (423) (470) Accounts payable and accruals (196) (1,101) Deferred credits, deposits and other (293) (6) -------- ------- Net cash provided by operating activities 509 1,151 -------- ------- Cash flows from investing activities Equipment manufactured for rental (2,139) (1,881) Purchases of property, plant and equipment (233) (575) Purchases of available-for-sale securities - (114) Proceeds from sale of available-for-sale securities 257 32 Proceeds from joint venture, net 778 175 Proceeds from sale of assets - 206 -------- ------- Net cash used in investing activities (1,337) (2,157) -------- ------- Cash flows from financing activities Proceeds from long-term debt 6,250 903 Payments of long-term debt (14,416) (676) Cash dividends (43) (88) Purchase of treasury stock - (2) -------- ------- Net cash (used in) provided by financing activities (8,209) 137 -------- ------- Net decrease in cash and cash equivalents (9,037) (869) Cash and cash equivalents at beginning of year 13,610 12,398 -------- ------- Cash and cash equivalents at end of period $ 4,573 $11,529 ======== ======= - ----------------------------------------------------------------------------------------------------- Interest paid $ 2,282 $ 1,812 Income taxes paid 164 164 - ----------------------------------------------------------------------------------------------------- The accompanying notes are an integral part of these condensed consolidated financial statements.
3 TRANS-LUX CORPORATION AND SUBSIDIARIES NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS June 30, 2006 (unaudited) Note 1 - Basis of Presentation Financial information included herein is unaudited, however, such information reflects all adjustments (of a normal and recurring nature) 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. The accompanying unaudited condensed consolidated financial statements have been prepared in accordance with rule 10-01 of Regulation S-X promulgated by the Securities and Exchange Commission and therefore do not include all information and footnote disclosures required under accounting principles generally accepted in the United States of America. It is suggested that the June 30, 2006 condensed 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, 2005. The Company has incurred losses for the three and six months ended June 30, 2006 of $393,000 and $1,466,000, respectively, and $1,793,000 for the year ended December 31, 2005. However, the Company does have positive working capital of $8.2 million as of June 30, 2006 and a positive cash flow from operations for the six months ended June 30, 2006 of $509,000. Management believes that its current cash resources will be sufficient to fund its operations and its current obligations through June 30, 2007. 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(R)"). SFAS 123(R) 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(R) requires using a modified version of prospective application under which compensation costs are recognized over the remaining service period for all unvested share-based payments outstanding or a modified retrospective method under which all prior periods impacted by SFAS 123 are restated. Effective January 1, 2006, the Company adopted SFAS 123(R) using the modified prospective transition method, whereby compensation costs are recognized in the consolidated statements of operations in the period beginning in January 1, 2006. Accordingly, compensation cost amounts for prior periods are presented in the Company's footnotes but the consolidated financial statements have not been restated to reflect, and do not retroactively include, the impact of SFAS 123(R). Stock- based compensation expense related to stock options recognized under SFAS 123(R) for the six months ended June 30, 2006 was approximately $2,000, net of tax. See Note 5 - Stock Option Plans, for additional disclosures. Note 2 - Inventories Inventories consist of the following: June 30 December 31 In thousands 2006 2005 - ------------------------------------------- Raw materials $3,820 $3,740 Work-in-progress 1,437 1,411 Finished goods 654 507 ------ ------ $5,911 $5,658 ====== ======
Note 3 - Long-Term Debt During the six months ended June 30, 2006, long-term debt, including current portion, decreased $8.2 million. On June 15, 2006, the Company redeemed all of its $12.2 million 7 1/2% Convertible Subordinated Notes due December 1, 2006 (the "7 1/2% Notes"). The 7 1/2% Notes were convertible at the option of the holder into shares of Common Stock, $1 par value per share, of the Company at any time prior to the close of business on the June 14, 2006 at the rate of $14.013 per share, which conversion rate was substantially above the current market price of the Common Stock. The Company utilized $6.1 million of its non-revolving line of credit to finance one-half of the redemption of the 7 1/2% Notes and utilized $6.1 million of cash for the remaining one-half. Also during the six months ended June 30, 2006, the Company repaid $1.2 million of it revolving loan facility and made regularly scheduled payments of long-term debt, offset by $150,000 from the State of Iowa and City of Des Moines as a zero percent interest loan for a five year term. The Company has a bank Credit Agreement, which provides for a term loan of $10.0 million, a non-revolving line of credit of up to $6.2 million to finance purchases and/or redemptions of one-half of the 7 1/2% Notes, and a revolving loan of up to $5.0 million at variable interest rates ranging from LIBOR plus 2.25% to Prime (ranging from 6.85% to 8.25% at June 30, 2006). The Credit Agreement matures on January 1, 2008. The non-revolving line of credit is convertible into a four-year amortizing term loan on December 31, 2006 and matures January 1, 2008. At June 30, 2006, $6.1 million of the non-revolving line of credit was outstanding and $3.8 million of the revolving loan was outstanding, leaving $1.2 million available under the revolving loan facility. 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 through June 30, 2006 and 1.2 to 1.0 for quarters ending September 30, 2006 and thereafter, a loan-to-value ratio of not more than 50%, a leverage ratio of 3.0 to 1.0, a cap on capital expenditures and maintaining accounts with an average monthly compensating balance of not less than $750,000. At June 30, 2006, the Company was in compliance with the forgoing financial covenants; but the Company was not in compliance with its minimum tangible net worth of not less than $19.0 million, which its senior lender has waived at June 30, 2006. On March 13, 2006, the Company completed an offer to exchange $1,000 principal amount of its 8 1/4% Limited Convertible Senior Subordinated Notes due 2012 (the "8 1/4% Notes") for each $1,000 principal amount of its 7 1/2% Notes. The exchange offer commenced February 6, 2006 and expired on March 13, 2006. A total of $0.1 million principal amount of 7 1/2% Notes were exchanged, leaving $12.2 million principal amount of 7 1/2% Notes outstanding, which were subsequently redeemed. The 8 1/4% Notes provide for a higher interest rate, which is payable semi-annually, have a longer term, are convertible into Common Stock at a lower conversion price of $9.00 per share until March 1, 2007, may be redeemed by the Company, in whole or in part, at declining premiums beginning March 1, 2006, and are senior to the 7 1/2% Notes and the Company's 9 1/2% Subordinated Debentures (the "Debentures") due 2012. Note 4 - Reporting Comprehensive Loss Total comprehensive loss for the three and six months ended June 30, 2006 and 2005 is as follows: Three months ended June 30 Six months ended June 30 In thousands 2006 2005 2006 2005 - ------------------------------------------------------------------------------------------------------------------ Net loss $(393) $(401) $(1,466) $(823) ----- ----- ------- ----- Other comprehensive income (loss): Unrealized foreign currency translation gain (loss) 124 (24) 110 (40) Unrealized holding gain (loss) on securities 10 7 17 (18) Income taxes related to other comprehensive income (loss) items (4) (3) (7) 7 ----- ----- ------- ----- Total other comprehensive income (loss), net of tax 130 (20) 120 (51) ----- ----- ------- ----- Comprehensive loss $(263) $(421) $(1,346) $(874) ===== ===== ======= =====
Note 5 - Stock Option Plans Effective January 1, 2006, the Company adopted the provisions of SFAS 123(R), which establishes the accounting for stock-based awards exchanged for employee services. SFAS 123(R) requires all share-based payments to employees, including grants of employee stock options, to be measured at fair value and expensed in the consolidated statement of operations over the service period (generally the vesting period). The Company previously accounted for share-based compensation plans under APB 25 and the related interpretations and provided the required SFAS 123 pro forma disclosures for employee stock options. The following summarizes the activity of the Company's stock options for the six months ended June 30, 2006: Weighted Weighted Average Average Remaining Aggregate Exercise Contractual Intrinsic Options Price ($) Term (Yrs) Value - ---------------------------------------------------------------------------- Outstanding at beginning of year 71,300 6.10 Granted - Exercised - Terminated (500) 5.38 ------ Outstanding at end of period 70,800 6.11 4.5 ====== === Vested and expected to vest at end of period 70,800 6.11 4.5 205,000 ====== === ======= Exercisable at end of period 68,800 6.11 4.5 199,000 ====== === =======
As of June 30, 2006, there was $1,000 of total unrecognized compensation cost related to non-vested options granted under the Plans. That cost will be recognized in the third quarter of 2006. Expected volatility is based on historical volatility of the Company's stock and the expected life of options is based on historical data with respect to exercise periods. Prior to the adoption of SFAS 123(R), the Company provided the disclosures required under SFAS 123. The Company did not recognize stock option-based compensation cost in our consolidated statements of operations for the periods prior to the adoption of SFAS 123(R), as all options granted had an exercise price equal to the market price of our common stock on the date of grant. The following table illustrates the effect on net loss and loss per share for the three and six months ended June 30, 2005 as if the Company had applied the fair value recognition provisions of SFAS 123 to stock-based employee compensation: Three months ended Six months ended In thousands, except per share data June 30, 2005 June 30, 2005 - ----------------------------------------------------------------------------------------- Net loss, as reported $ (401) $ (823) Deduct: Total stock-based employee compensation expense determined under fair value based method for all awards, net of tax 1 7 ------ ------ Pro forma net loss $ (402) $ (830) ====== ====== Basic loss per share: As reported $(0.32) $(0.65) Pro forma $(0.32) $(0.66) ------ ------
In accordance with SFAS 123(R), the fair value of each option grant has been estimated as of the date of grant using the binomial options-pricing model with the following weighted average assumptions used: Three and six months ended June 30, 2005 - ---------------------------------------------------- Dividend yield 2.06% Expected volatility 43.00% Risk free interest rate 4.59% Expected life (in years) 4.0
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 and income-producing real estate properties. Segment operating income is shown after general and administrative expenses directly associated with the segment and includes the operating results of the joint venture activities. Corporate general and administrative items relate to costs that are not directly identifiable with a segment. There are no intersegment sales. Of the total goodwill of $1.0 million, $0.9 million relates to the Outdoor display segment and $0.1 million relates to the Indoor display segment. Foreign revenues represent less than 10% of the Company's revenues and therefore are not separately disclosed. The foreign operation does not manufacture their own equipment; the domestic operation provides the equipment that the foreign operation leases or sells. The foreign operation operates similarly to the domestic operation and has similar profit margins. Information about the Company's operations in its three business segments for the three and six months ended June 30, 2006 and 2005 is as follows: Three months ended June 30 Six months ended June 30 In thousands 2006 2005 2006 2005 - ------------------------------------------------------------------------------------------------------------- Revenues: Indoor display $ 3,335 $ 3,808 $ 6,325 $ 7,242 Outdoor display 6,942 6,321 12,472 11,475 Entertainment/real estate 3,432 3,335 6,522 6,396 ------- ------- ------- ------- Total revenues 13,709 13,464 25,319 25,113 ======= ======= ======= ======= Operating income (loss): Indoor display (202) 390 (535) 699 Outdoor display 504 416 527 540 Entertainment/real estate 913 806 1,734 1,618 ------- ------- ------- ------- Total operating income 1,215 1,612 1,726 2,857 Other income 19 135 18 160 Corporate general and administrative expenses (841) (1,504) (1,933) (2,512) Interest expense - net (1,024) (893) (2,087) (1,839) Income tax benefit 238 249 810 511 ------- ------- ------- ------- Net loss $ (393) $ (401) $(1,466) $ (823) ======= ======= ======= =======
Note 7 - Components of Net Periodic Pension Cost As of December 31, 2003, the benefit service under the pension plan had been frozen and, accordingly, there is no service cost for the periods ended June 30, 2006 and 2005. The following table presents the components of net periodic pension cost: Three months ended June 30 Six months ended June 30 In thousands 2006 2005 2006 2005 - ----------------------------------------------------------------------------------- Interest cost $ 153 $ 156 $ 306 $ 312 Expected return on plan assets (163) (156) (326) (312) Amortization of prior service cost 4 4 8 8 Amortization of net actuarial loss 77 67 154 134 ----- ----- ----- ----- Net periodic pension cost $ 71 $ 71 $ 142 $ 142 ===== ===== ===== =====
The minimum required contribution for 2006 is expected to be zero, but the Company estimates that it will contribute between zero and $200,000 in 2006. 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. The following results of operations summary information relates to MetroLux for the three and six months ended June 30, 2006 and 2005, and summary balance sheet information relates to MetroLux as of June 30, 2006 and December 31, 2005: Three months ended June 30 Six months ended June 30 In thousands 2006 2005 2006 2005 - ----------------------------------------------------------------------------------------------- Revenues $1,308 $848 $2,448 $1,595 Gross profit 757 470 1,427 923 Net income 257 178 406 358 Company's share of partnership net income 129 89 203 179 --------------------------------------------------- June 30 December 31 In thousands 2006 2005 - ---------------------------------------------------------------- Current assets $ 324 $3,623 Noncurrent assets 1,893 2,021 ------ ------ Total assets 2,217 5,644 ====== ====== Current liabilities 484 2,751 Noncurrent liabilities 872 883 ------ ------ Total liabilities 1,356 3,634 ====== ====== Company's equity in partnership net assets $ 513 $1,047 ------ ------
The Company's equity in partnership net assets is reflected in other assets in the consolidated balance sheets. The Company has guaranteed $0.7 million (75%) of a $1.0 million business loan to finance theatre equipment at its new fourteen-plex theatre held by MetroLux, until May 2011, and, accordingly has recognized a liability for $42,000 at June 30, 2006. The unrelated 50% partner of MetroLux also guaranteed $0.7 million (75%) of the $1.0 million business loan. The assets of MetroLux collateralize this business loan. Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations Overview Trans-Lux is a full service provider of integrated multimedia systems for today's communications environments. The essential elements of these systems are the real-time, programmable electronic information displays we manufacture, distribute and service. Designed to meet the evolving communications needs of both the indoor and outdoor markets, these displays are used primarily in applications for the financial, banking, gaming, corporate, retail, transportation, entertainment and sports industries. In addition to its display business, the Company owns and operates a chain of motion picture theatres in the western Mountain States. 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 catalog sports and commercial markets. 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, 2006 Compared to Six Months Ended June 30, 2005 Total revenues for the six months ended June 30, 2006 increased $206,000 or 0.8% to $25.3 million from $25.1 million for the six months ended June 30, 2005, principally due to increases in Outdoor display sales revenues, offset by decreases in Indoor display rentals and maintenance revenues and sales revenues. Indoor display revenues decreased $917,000 or 12.7%. Of this decrease, Indoor display equipment rentals and maintenance revenues decreased $556,000 or 11.4%, primarily due to disconnects and non-renewals of equipment on rental and maintenance on existing contracts in the financial services market. Indoor display equipment sales decreased $361,000 or 15.3%, primarily due to a reduction in sales from 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 slowly improving, installations of new equipment tend to lag any economic turnaround. Outdoor display revenues increased $997,000 or 8.7%. Of this increase, Outdoor display equipment sales increased $1.0 million or 11.9%, primarily in the outdoor catalog sports market. Outdoor display equipment rentals and maintenance revenues decreased $42,000 or 1.5%, primarily due to the continued expected gradual revenue decline in the older Outdoor display equipment rental and maintenance bases acquired in the early 1990s. Entertainment/Real Estate revenues increased $126,000 or 2.0%, primarily due to an increase in concession sales, while box office revenues remained level. Total operating income for the six months ended June 30, 2006 decreased 39.6% to $1.7 million from $2.9 million for the six months ended June 30, 2005, principally due to the reduction in revenues in the Indoor display segment and a decrease in the gross margin of the Indoor display segment due to the product mix. Indoor display operating income decreased $1.2 million, from an operating income of $699,000 to an operating loss of $535,000, primarily as a result of the decrease in revenues in the financial services market and a decrease in the gross margin on sold equipment due to the product mix. The cost of Indoor displays represented 75.0% of related revenues in 2006 compared to 63.8% in 2005. 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 monitor and address the cost of field service to bring it in line with revenues from equipment rentals and maintenance. Indoor display cost of equipment sales increased $229,000 or 24.4%, primarily due to the decrease in the gross margin of Indoor display equipment sales due to the product mix of sales to the transportation market. Indoor display general and administrative expenses increased $197,000 or 10.2%, primarily due to a $70,000 increase in the allowance for doubtful accounts receivable, and an increase in travel costs and commission. Cost of Indoor display equipment rentals and maintenance includes field service expenses, plant repair costs, maintenance and depreciation. Outdoor display operating income decreased $13,000 or 2.4%, primarily as a result of the product mix and a $50,000 non-recurring material cost, offset by a decrease of $187,000 in field service costs. The Company continues to address the cost of field service to bring it in line with revenues from equipment rentals and maintenance. The cost of Outdoor displays represented 79.3% of related revenues in 2006 compared to 78.9% in 2005. Outdoor display cost of equipment sales increased $1.0 million or 15.4%, principally due to the increase in volume from the outdoor catalog sports market. Outdoor display cost of equipment rentals and maintenance decreased $174,000 or 6.9%, primarily due to a decrease in field service costs. Outdoor display general and administrative expenses increased $175,000 or 9.3%, primarily due to an increase in engineering costs, travel costs, salaries and benefits. Cost of Outdoor display equipment rentals and maintenance includes field service expenses, plant repair costs, maintenance and depreciation. Entertainment/Real Estate operating income increased $116,000 or 7.2%, primarily due to an increase in concession sales. The cost of Entertainment/real estate represented 70.8% of related revenues in 2006 compared to 72.7% in 2005. Cost of Entertainment/real estate, which includes film rental costs and depreciation expense, decreased $32,000 or 0.7%, primarily due to the reduction in certain operating expenses. Entertainment/Real Estate general and administrative expenses increased $66,000 primarily due to increased salaries and travel costs. Corporate general and administrative expenses decreased $579,000 or 23.0%, primarily due to reductions in insurance expense, payroll and benefits, and the positive effect of a currency exchange gain in 2006 of $89,000 compared to a currency exchange loss of $58,000 in 2005. Net interest expense increased $248,000 or 13.5%, which is primarily attributable to an increase in variable interest rates. The income from joint venture relates to the operations of the theatre joint venture, MetroLux Theatres, in Loveland, Colorado, which is included in the Entertainment/real estate segment. The effective tax rates for the six months ended June 30, 2006 and 2005 were 35.6% and 38.3%, respectively. Three Months Ended June 30, 2006 Compared to Three Months Ended June 30, 2005 Total revenues for the three months ended June 30, 2006 increased $245,000 or 1.8% to $13.7 million from $13.5 million for the three months ended June 30, 2005, principally due to increases in Outdoor display sales revenues, offset by decreases in Indoor display rentals and maintenance revenues and sales revenues. Indoor display revenues decreased $472,000 or 12.4%. Of this decrease, Indoor display equipment rentals and maintenance revenues decreased $272,000 or 11.1%, primarily due to disconnects and non-renewals of equipment on rental and maintenance on existing contracts in the financial services market. Indoor display equipment sales decreased $200,000 or 14.7%, primarily due to a reduction in sales from 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 slowly improving, installations of new equipment tend to lag any economic turnaround. Outdoor display revenues increased $620,000 or 9.8%. Of this increase, Outdoor display equipment sales increased $690,000 or 14.0%, primarily in the outdoor catalog sports market. Outdoor display equipment rentals and maintenance revenues decreased $70,000 or 5.1%, primarily due to the continued expected gradual revenue decline in the older Outdoor display equipment rental and maintenance bases acquired in the early 1990s. Entertainment/Real Estate revenues increased $97,000 or 2.9%, primarily due to an increase in concession sales, while box office revenues remained level. Total operating income for the three months ended June 30, 2006 decreased $397,000 to $1.2 million from $1.6 million for the three months ended June 30, 2005, principally due to the reduction in revenues in the Indoor display segment and a decrease in the gross margin in the Indoor display segment due to the product mix. Indoor display operating income decreased $591,000, from an operating income of $390,000 to an operating loss of $201,000, primarily as a result of the decrease in revenues in the financial services market and a decrease in the gross margin on sold equipment due to the product mix. The cost of Indoor displays represented 73.4% of related revenues in 2006 compared to 64.9% in 2005. 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 reduced the cost of field service by $89,000 during the three months ended June 30, 2006 and continues to monitor and address these costs to bring them in line with revenues from equipment rentals and maintenance. Indoor display cost of equipment sales increased $97,000 or 16.6%, primarily due to the decrease in the gross margin of Indoor display equipment sales due to the product mix of sales to the transportation market. Indoor display general and administrative expenses increased $139,000 or 14.6%, primarily due to an increase in travel costs and commission. Cost of Indoor display equipment rentals and maintenance includes field service expenses, plant repair costs, maintenance and depreciation. Outdoor display operating income increased $88,000 or 21.1%, primarily as a result of a decrease of $87,000 in field service costs. The Company continues to monitor and address the cost of field service to bring it in line with revenues from equipment rentals and maintenance. The cost of Outdoor displays represented 78.6% of related revenues in 2006 compared to 77.5% in 2005. Outdoor display cost of equipment sales increased $640,000 or 17.6%, principally due to the increase in volume from the outdoor catalog sports market. Outdoor display cost of equipment rentals and maintenance decreased $80,000 or 6.3%, primarily due to a decrease in field service costs. Outdoor display general and administrative expenses decreased $28,000 or 2.8%, primarily due to a reduction in certain selling expenses. Cost of Outdoor display equipment rentals and maintenance includes field service expenses, plant repair costs, maintenance and depreciation. Entertainment/Real Estate operating income increased $106,000 or 13.1%, primarily due to an increase in concession sales. The cost of Entertainment/real estate represented 71.5% of related revenues in 2006 compared to 73.4% in 2005. Cost of Entertainment/real estate, which includes film rental costs and depreciation expense, remained level. Entertainment/Real Estate general and administrative expenses increased $23,000 or 13.6%, primarily due to increased salaries and travel costs. Corporate general and administrative expenses decreased $663,000 or 44.1%, primarily due to reductions in insurance expense, payroll and benefits, and the positive effect of a currency exchange gain in 2006 of $94,000 compared to a currency exchange loss of $46,000 in 2005. Net interest expense increased $131,000 or 14.7%, which is primarily attributable to an increase in variable interest rates. The income from joint venture relates to the operations of the theatre joint venture, MetroLux Theatres, in Loveland, Colorado, which is included in the Entertainment/real estate segment. The effective tax rates for the three months ended June 30, 2006 and 2005 were 37.7% and 38.3%, respectively. Liquidity and Capital Resources On June 13, 2006, the Board of Directors of the Corporation did not declare a regular quarterly cash dividend for the second quarter of 2006 of $0.035 per share on the Company's Common Stock and $0.0315 per share on the Company's Class B Stock in order to conserve cash and prepay debt. On June 15, 2006, the Company redeemed all of its $12.2 million 7 1/2% Notes. The 7 1/2% Notes were convertible at the option of the holder into shares of Common Stock, $1 par value per share, of the Company at any time prior to the close of business on the June 14, 2006 at the rate of $14.013 per share, which conversion rate was substantially above the current market price of the Common Stock. The Company utilized $6.1 million of its non-revolving line of credit to finance one-half of the redemption of the 7 1/2% Notes and utilized $6.1 million of cash for the remaining one-half. The Company has a bank Credit Agreement, which provides for a term loan of $10.0 million, a non-revolving line of credit of up to $6.2 million to finance purchases and/or redemptions of one-half of the 7 1/2% Convertible Subordinated Notes due December 1, 2006, and a revolving loan of up to $5.0 million at variable interest rates ranging from LIBOR plus 2.25% to Prime (ranging from 6.85% to 8.25% at June 30, 2006). The Credit Agreement matures on January 1, 2008. The non-revolving line of credit is convertible into a four-year amortizing term loan on December 31, 2006 and matures January 1, 2008. At June 30, 2006, $6.1 million of the non-revolving line of credit was outstanding and $3.8 million of the revolving loan was outstanding, leaving $1.2 million available under the revolving loan facility. 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 through June 30, 2006 and 1.2 to 1.0 for quarters ending September 30, 2006 and thereafter, a loan-to-value ratio of not more than 50%, a leverage ratio of 3.0 to 1.0, a cap on capital expenditures and maintaining accounts with an average monthly compensating balance of not less than $750,000. At June 30, 2006, the Company was in compliance with the forgoing financial covenants; but the Company was not in compliance with its minimum tangible net worth of not less than $19.0 million, which its senior lender has waived at June 30, 2006. On March 13, 2006, the Company completed an offer to exchange $1,000 principal amount of its 8 1/4% Notes for each $1,000 principal amount of its 7 1/2% Notes. The exchange offer commenced February 6, 2006 and expired on March 13, 2006. A total of $0.1 million principal amount of 7 1/2% Notes were exchanged, leaving $12.2 million principal amount of 7 1/2% Notes outstanding, and $18.0 million principal amount of the 8 1/4% Notes outstanding. The 7 1/2% Notes were subsequently redeemed. The 8 1/4% Notes provide for a higher interest rate, which is payable semi-annually, have a longer term, are convertible into Common Stock at a lower conversion price of $9.00 per share until March 1, 2007, may be redeemed by the Company, in whole or in part, at declining premiums beginning March 1, 2006, and are senior to the 7 1/2% Notes and the Company's Debentures. Under various agreements, the Company is obligated to make future cash payments in fixed amounts. These consist of payments under the Company's long-term debt agreements, employment and consulting agreement payments and rent payments required under operating lease agreements. The following table summarizes the Company's fixed cash obligations as of June 30, 2006 for the remainder of 2006 and the next four years: Remainder of In thousands 2006 2007 2008 2009 2010 - ------------------------------------------------------------------------------- Long-term debt, including interest $2,544 $7,348 $20,188 $3,869 $3,810 Employment and consulting agreement obligations 831 1,667 1,435 860 482 Operating lease payments 373 533 446 316 293 ------ ------ ------- ------ ------ Total $3,748 $9,548 $22,069 $5,045 $4,585 - -------------------------------------------------------------------------------
Cash and cash equivalents decreased $9.0 million for the six months ended June 30, 2006 compared to a decrease of $0.9 million in 2005. The decrease in 2006 is primarily attributable to the redemption of the outstanding $12.2 million 7 1/2% Notes on June 15, 2006. The Company utilized $6.1 million of its non-revolving line of credit to finance one-half of the redemption of the 7 1/2% Notes and utilized $6.1 million of cash for the remaining one-half. The Company also made a net $1.2 million repayment on the revolving line of credit and $1.1 million of scheduled payments of long-term debt, and made investments in equipment for rental, offset by the proceeds from the joint venture. The decrease in 2005 is primarily attributable to the investment in equipment for rental, expansion of the Company's movie theatre in Dillon, 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 its investment in its Canadian 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, 2006, 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 $334,000. A 10% change in the Canadian dollar relative to the U.S. dollar would result in a currency exchange expense fluctuation of approximately $170,000, based on dealer quotes, considering current exchange rates. 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. The Company's disclosure controls and procedures are designed 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. Our disclosure controls and procedures include components of our internal controls over financial reporting. Management's assessment of the effectiveness of our 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. Based on this evaluation, the Company's Co-Chief Executive Officers and Chief Financial Officer have concluded that these controls and procedures are effective. 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. Part II - Other Information --------------------------- Item 1A. Risk Factors The Company is subject to a number of risks including general business and financial risk factors. Any or all of such factors could have a material adverse effect on the business, financial condition or results of operations of the Company. You should carefully consider the following risk factors, in addition to those identified in our Annual Report on Form 10-K for the year ended December 31, 2005. The Company has incurred losses for the three and six months ended June 30, 2006 of $393,000 and $1,466,000, respectively, and $1,793,000 for the year ended December 31, 2005. However, the Company does have positive working capital of $8.2 million as of June 30, 2006 and a positive cash flow from operations for the six months ended June 30, 2006 of $509,000. Management believes that its current cash resources will be sufficient to fund its operations and its current obligations through June 30, 2007. Item 4. Submission of Matters to a Vote of Security Holders The Annual Meeting of Stockholders of Trans-Lux Corporation was held on June 13, 2006 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 --- -------- Steven Baruch 3,615,676 151,425 Thomas Brandt 3,563,451 203,650 Howard M. Brenner 3,619,371 147,730 The following directors are continuing their terms as directors: Gene Jankowski, One-Year Remaining Richard Brandt, One-Year Remaining Jean Firstenberg, One-Year Remaining Victor Liss, One-Year Remaining Matthew Brandt, Two-Years Remaining Robert B. Greenes, Two-Years Remaining Howard S. Modlin, Two-Years Remaining Michael R. Mulcahy, 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 3,584,849 135,737 46,515
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 June 13, 2006, stating that the Board of Directors of the Corporation did not declare a quarterly dividend in order to conserve cash and pay debt. Item 6. Exhibits 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 14, 2006 by /s/ Angela D. Toppi -------------------- Angela D. Toppi Executive Vice President and Chief Financial Officer EX-31 2 tlxex311.txt CERTIFICATION SECTION 302 - 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 14, 2006 Michael R. Mulcahy President and Co-Chief Executive Officer EX-31 3 tlxex312.txt CERTIFICATION SECTION 302 - 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 14, 2006 Thomas Brandt Executive Vice President and Co-Chief Executive Officer EX-31 4 tlxex313.txt CERTIFICATION SECTION 302 - 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 14, 2006 Angela D. Toppi Executive Vice President and Chief Financial Officer EX-32 5 tlxex321.txt CERTIFICATION SECTION 906 - 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, 2006 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 14, 2006 Michael R. Mulcahy President and Co-Chief Executive Officer EX-32 6 tlxex322.txt CERTIFICATION SECTION 906 - 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, 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, 2006 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 14, 2006 Thomas Brandt Executive Vice President and Co-Chief Executive Officer EX-32 7 tlxex323.txt CERTIFICATION SECTION 906 - 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, 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, 2006 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 14, 2006 Angela D. Toppi Executive Vice President and Chief Financial Officer -----END PRIVACY-ENHANCED MESSAGE-----