-----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, F0qO8mHo77yk4brKySA72aoXENg/coIXeV8CmunIHFzA3tNcqn8foSJ5UCBmzoVA BQotkjX52sm9kQP4N/MDPQ== 0000099106-99-000005.txt : 19990624 0000099106-99-000005.hdr.sgml : 19990624 ACCESSION NUMBER: 0000099106-99-000005 CONFORMED SUBMISSION TYPE: 10-Q PUBLIC DOCUMENT COUNT: 3 CONFORMED PERIOD OF REPORT: 19990331 FILED AS OF DATE: 19990512 FILER: COMPANY DATA: COMPANY CONFORMED NAME: TRANS LUX CORP CENTRAL INDEX KEY: 0000099106 STANDARD INDUSTRIAL CLASSIFICATION: 3990 IRS NUMBER: 131394750 STATE OF INCORPORATION: DE FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 10-Q SEC ACT: SEC FILE NUMBER: 001-02257 FILM NUMBER: 99618575 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 TRANS-LUX CORP FORM 10-Q PERIOD ENDING 03/31/99 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 March 31, 1999 -------------- OR [ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the transition period from__________ to__________ 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) - - - - - - - - - - - - - -------------------------------------------------------------------------- (Former name, former address and former fiscal year, if changed since last report.) Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes X No ----- ----- Indicate the number of shares outstanding of each of the issuer's classes of Common Stock, as of the latest practicable date. Date Class Shares Outstanding 05/10/99 Common Stock - $1.00 Par Value 996,415 05/10/99 Class B Stock - $1.00 Par Value 296,005 (Immediately convertible into a like number of shares of Common Stock.) TRANS-LUX CORPORATION AND SUBSIDIARIES Index Part I - Financial Information Page No. -------- Consolidated Balance Sheets - March 31, 1999 (unaudited) and December 31, 1998 1 Consolidated Statements of Income - Three Months Ended March 31, 1999 and 1998 (unaudited) 2 Consolidated Statements of Cash Flows - Three Months Ended March 31, 1999 and 1998 (unaudited) 3 Notes to Consolidated Financial Statements (unaudited) 4 Management's Discussion and Analysis of Financial Condition and Results of Operations 7 Part II - Other Information Item 6. Exhibits and Reports on Form 8-K 9 Signatures 10 Part I - Financial Information ------------------------------ TRANS-LUX CORPORATION AND SUBSIDIARIES CONSOLIDATED BALANCE SHEETS
In thousands, except share data March 31 December 31 1999 1998 - - - - - - - - - - - - - ------------------------------------------------------------------------------------------------ (unaudited) ASSETS Current assets: Cash and cash equivalents $ 937 $ 1,298 Available-for-sale securities 4,899 4,914 Receivables 7,225 7,287 Unbilled receivables 102 374 Inventories 5,243 5,381 Prepaids and other 554 360 ----------- ----------- Total current assets 18,960 19,614 ----------- ----------- Equipment on rental 72,540 70,654 Less accumulated depreciation 29,852 28,289 ----------- ----------- 42,688 42,365 ----------- ----------- Property, plant and equipment 32,198 30,816 Less accumulated depreciation and amortization 8,904 8,433 ----------- ----------- 23,294 22,383 Prepaids, intangibles and other 5,949 5,986 Maintenance contracts, net 759 798 ----------- ----------- $91,650 $91,146 =========== =========== LIABILITIES AND STOCKHOLDERS' EQUITY - - - - - - - - - - - - - ------------------------------------ Current liabilities: Accounts payable and accruals $7,036 $6,167 Income taxes payable -- 275 Current portion of long-term obligations 692 258 ----------- ----------- Total current liabilities 7,728 6,700 ----------- ----------- Long-term obligations: 7 1/2% convertible subordinated notes due 2006 30,625 31,625 9 1/2% subordinated debentures due 2012 1,057 1,057 Obligations payable 17,987 16,841 ----------- ----------- 49,669 49,523 Deferred revenue, deposits and other 3,906 4,254 Deferred income taxes 4,623 4,818 ----------- ----------- Stockholders' equity: Capital stock Common - $1.00 par value Authorized - 5,500,000 shares Issued - 2,444,400 shares in 1999 and 2,443,119 in 1998 2,444 2,443 Class B - $1.00 par value Authorized - 1,000,000 shares Issued - 296,005 shares in 1999 and 297,286 in 1998 296 297 Additional paid-in-capital 13,901 13,901 Retained earnings 20,815 20,821 Accumulated other comprehensive income (loss) (121) -- ----------- ----------- 37,335 37,462 Less treasury stock - at cost 1,448,016 shares in 1999 and 1998 (excludes additional 296,005 shares in 1999 and 297,286 in 1998 for conversion of Class B stock) 11,611 11,611 ----------- ----------- Total stockholders' equity 25,724 25,851 ----------- ----------- $91,650 $91,146 =========== =========== The accompanying notes are an integral part of these consolidated financial statements.
1 TRANS-LUX CORPORATION AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF INCOME (unaudited)
THREE MONTHS ENDED MARCH 31 --------------------------- In thousands, except share data 1999 1998 - - - - - - - - - - - - - ------------------------------------------------------------------------------ Revenues: Equipment rentals and maintenance $ 5,857 $ 5,762 Equipment sales 6,148 8,614 Theatre receipts and other 1,480 1,580 ---------- ---------- Total revenues 13,485 15,956 ---------- ---------- Operating expenses: Cost of equipment rentals and maintenance 3,247 3,158 Cost of equipment sales 4,059 5,654 Cost of theatre receipts and other 1,202 1,282 ---------- ---------- Total operating expenses 8,508 10,094 ---------- ---------- Gross profit from operations 4,977 5,862 General and administrative expenses 4,192 4,476 ---------- ---------- 785 1,386 Interest income 121 174 Interest expense (984) (1,005) Other income 147 72 ---------- ---------- Income before income taxes 69 627 Provision for income taxes 31 282 ---------- ---------- Net income $ 38 $ 345 ========== ========== Earnings per share: Basic $0.03 $0.27 Diluted $0.03 $0.19 Average common shares outstanding: Basic 1,292 1,289 Diluted 1,298 3,581 Cash dividends per share: Common stock $0.035 $0.035 Class B stock $0.0315 $0.0315 The accompanying notes are an integral part of these consolidated financial statements.
2 TRANS-LUX CORPORATION AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF CASH FLOWS (unaudited)
THREE MONTHS ENDED MARCH 31 ----------------------------- In thousands 1999 1998 - - - - - - - - - - - - - -------------------------------------------------------------------------------------------------------- CASH FLOWS FROM OPERATING ACTIVITIES Net income $ 38 $ 345 Adjustment to reconcile net income to net cash provided by operating activities: Depreciation and amortization 2,256 1,997 Net income of joint venture (2) (49) Deferred income taxes (188) (354) Gain on sale of securities -- (23) Gain on purchase of Company's 7 1/2% convertible subordinated notes (145) -- Changes in operating assets and liabilities: Receivables 62 (2,998) Unbilled receivables 272 571 Inventories 138 (869) Prepaids and other (361) (139) Accounts payable and accruals 756 1,188 Income taxes payable (275) 50 Deferred revenue, deposits and other (348) 1,129 ----------- ----------- Net cash provided by operating activities 2,203 848 ----------- ----------- CASH FLOWS FROM INVESTING ACTIVITIES Equipment manufactured for rental (1,886) (2,022) Purchases of property, plant and equipment (1,382) (833) Proceeds from joint venture 23 23 Redemption of available-for-sale securities -- 762 ----------- ----------- Net cash used in investing activities (3,245) (2,070) ----------- ----------- CASH FLOWS FROM FINANCING ACTIVITIES Proceeds from long-term obligations 3,900 1,000 Repayment of long-term obligations (2,320) (946) Purchase of Company's 7 1/2% convertible subordinated notes (855) -- Proceeds from exercise of stock options -- 7 Cash dividends (44) (44) ----------- ----------- Net cash provided by financing activities 681 17 ----------- ----------- Net decrease in cash and cash equivalents (361) (1,205) Cash and cash equivalents at beginning of year 1,298 1,843 ----------- ----------- CASH AND CASH EQUIVALENTS AT END OF PERIOD $937 $638 =========== =========== - - - - - - - - - - - - - -------------------------------------------------------------------------------------------------------- Interest paid $361 $128 Interest received 147 194 Income taxes paid 411 238 - - - - - - - - - - - - - -------------------------------------------------------------------------------------------------------- The accompanying notes are an integral part of these consolidated financial statements.
3 TRANS-LUX CORPORATION AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS March 31, 1999 (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 March 31, 1999 consolidated financial statements be read in conjunction with the consolidated financial statements and notes included in the Company's Annual Report and Form 10-K for the year ended December 31, 1998. Certain reclassifications of prior years' amounts have been made to conform to the current year's presentation. Note 2 - Inventories Inventories consist of the following:
March 31 December 31 In thousands 1999 1998 - - - - - - - - - - - - - ------------------------------------------------------------------------------- Raw materials and spare parts $3,032 $3,230 Work-in-progress 1,171 1,218 Finished goods 1,040 933 ----- ----- $5,243 $5,381 ====== ======
Note 3 - Reporting Comprehensive Income The components of comprehensive income for the Company are foreign currency translation adjustments relating to the Company's foreign subsidiaries and unrealized holding gains or losses on the Company's available-for-sale securities. Comprehensive income is a loss of $46,000 and income of $327,000 for the three months ended March 31, 1999 and 1998, respectively. 4 Note 4 - Earnings per Share The following table represents the computation of basic and diluted earnings per common share for the three months ended March 31, 1999 and 1998:
In thousands, except share data 1999 1998 - - - - - - - - - - - - - ------------------------------------------------------------------------------- Basic earnings per share computation: Net income $ 38 $ 345 --- ---- Weighted average common shares outstanding 1,292 1,289 ----- ----- Basic earnings per common share $ 0.03 $ 0.27 ===== ===== Diluted earnings per share computation: Net income $ 38 $ 345 Add: After tax interest expense applicable to convertible debt* - 352 Add: After tax changes to income applicable to assumed conversion* - (26) -- Adjusted net income $ 38 $ 671 ==== ===== Weighted average common shares outstanding 1,292 1,289 Assumes exercise of options reduced by the number of shares which could have been purchased with the proceeds from exercise of such options 6 35 Assumes conversion of 7 1/2% convertible subordinated notes* - 2,257 ----- ----- Total weighted average common shares 1,298 3,581 ===== ===== Diluted earnings per common share $ 0.03 $ 0.19 ====== ====== * The 1999 diluted earnings per share calculation does not include the assumed conversion of the Company's 7 1/2% convertible subordinated notes, as the effect is antidilutive.
Note 5 - Business segment data The Company evaluates segment performance and allocates resources based upon operating income. The Company's operations have been classified into 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 and both are conducted on a global basis, primarily through operations in the U.S. The Company also has operations in Canada and Australia. The indoor display and outdoor display segments are differentiated primarily by the customers they serve. The Entertainment and Real Estate Division owns a chain of motion picture theatres in the southwestern U.S. and owns real estate used for both corporate and income-producing purposes in the U.S. and Canada. 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 items relate to resources and costs which are not directly identifiable with a segment. There are no intersegment sales. 5 Information about the Company's operations in its three business segments for the three months ended March 31, 1999 and 1998 are as follows:
In thousands 1999 1998 - - - - - - - - - - - - - --------------------------------------------------------------------------- Revenues: Indoor display $ 5,207 $ 7,489 Outdoor display 6,798 6,887 Entertainment and real estate 1,480 1,580 ------- ------- Total revenues $13,485 $15,956 ------- ------- Operating income: Indoor display $ 1,437 $ 2,094 Outdoor display 638 768 Entertainment and real estate 73 141 ------- ------- $ 2,148 $ 3,003 Other income 145 23 Corporate general and administrative expenses (1,361) (1,568) Interest expense-net (863) (831) ------- ------- Income before income taxes $ 69 $ 627 ======= =======
6 MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS Results of Operations Three Months Ended March 31, 1999 Compared to Three Months Ended March 31, 1998 The Company's total revenues for the three months ended March 31, 1999 decreased 15.5% to $13.4 million from $16.0 million for the three months ended March 31, 1998. Revenues from equipment rentals and maintenance increased $94,000 or 1.6%. Indoor display rental and maintenance revenues increased 6.0%, which was offset by the 5.0% continued expected decline, although the decline was less than originally planned, from the outdoor lease and maintenance bases previously acquired. Revenues from equipment sales decreased $2.5 million or 28.6% in 1999. This decrease was primarily in the indoor display segment. Last year's quarter included a multi-million dollar order from a major exchange being recognized on a percentage of completion basis, which did not recur this quarter. Revenues from theatre receipts and other decreased $100,000 or 6.3% in 1999, tracking the national theatrical market, which was lower during the quarter compared to last year due to the film product. Gross profit as a percentage of revenues was 36.9% in 1999 compared to 36.7% in 1998. Cost of equipment rentals and maintenance, includes field service expenses, plant repair costs and maintenance and depreciation. The indoor display cost of equipment rental and maintenance increased slightly. The outdoor display cost of equipment rental and maintenance increased 4.2%, principally due to field service expenses. The cost of equipment rentals and maintenance represented 55.4% of related revenues for the three months ended March 31, 1999 compared to 54.8% in 1998. Cost of equipment sales decreased $1.6 million or 28.2%. The indoor display cost of equipment sales decreased 62.4%, primarily due to a large indoor sale in the first quarter of 1998 that did not recur in 1999. The outdoor display cost of equipment sales decreased 6.0%, primarily due to lower volume due to seasonality. The cost of equipment sales represented 66.0% of related revenues for the three months ended March 31, 1999 compared to 65.6% in 1998. Cost of theatre receipts and other, which includes film rental costs, decreased $80,000 or 6.3% in 1999, mainly due to lower volume. The cost of theatre receipts and other represented 81.2% of related revenues for the three months ended March 31, 1999 and 1998. Total general and administrative expenses decreased $284,000 or 6.3%. The indoor display general and administrative expenses decreased 17.1%, primarily due to control of certain administrative costs. The outdoor display general and administrative expenses increased 15.4%, primarily due to expanded sales and marketing efforts relate to the sports sector. The entertainment and real estate general and administrative expenses remained level. Corporate general and administrative expenses decreased 13.2%, primarily due to control of certain administrative costs. Interest income decreased $53,000, primarily attributable to the utilization of investments to acquire rental equipment and construct new theatres. Interest expense decreased $21,000. Other income primarily relates to the gain on the purchase of $1 million principal amount of the Company's 7 1/2% convertible subordinated notes in January 1999 at a discount. The effective tax rate at March 31, 1999 and 1998 was 45.0%. 7 Accounting Standards The Company will adopt the provisions of Statement of Financial Accounting Standards No. 133 "Accounting for Derivative Instruments and Hedging Activities" (SFAS 133) effective January 1, 2000. The standard requires companies to recognize all derivatives as either assets or liabilities and measure those instruments at fair value. Gains or losses resulting from changes in the values of those derivatives would be accounted for depending on the use of the derivative and whether it qualifies for hedge accounting. The Company does not expect the adoption of SFAS 133 to have a material impact on its consolidated financial statements. Liquidity and Capital Resources The regular quarterly cash dividend for the first quarter of 1999 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 March 23, 1999 payable to stockholders of record as of April 5, 1999 and was paid April 16, 1999. The Company has a $15.0 million revolving credit facility with its bank which is available to June 2001, at which time the outstanding balance would convert into a five-year term loan. At March 31, 1999 the Company had $13.2 million borrowing capacity available under such facility. The Company believes that cash generated from operations together with the cash and cash equivalents on hand and the availability under the revolving credit facility will be sufficient to fund its anticipated near term cash requirements. Cash and cash equivalents decreased $361,000 for the three months ended March 31, 1999 compared to a decrease of $1.2 million in 1998. The decrease in 1999 is primarily attributable to a decrease in receivables, and cash utilized for investment in rental equipment, construction of theatres and purchases of equipment. The decrease in 1998 is primarily attributable to an increase in receivables which primarily related to a certain significant contract being recorded on the percentage of completion basis and cash utilized for investment in rental equipment. The Company utilizes its revolving credit facility to finance the expansion of its theatre operations until long-term financing is in place. The $3.9 million proceeds from long-term obligations relates to the construction of a new theatre. The Company has limited involvement with derivative financial instruments and does not use them for trading purposes; they are only used to manage and fix well-defined interest rate risks. The Company has two interest rate swap agreements having a notional value of $8.7 million to reduce exposure to interest fluctuations. 8 Year 2000 Considerations Many currently installed computer systems and software products are coded to accept only two-digit entries in the date code field and cannot distinguish 21st century dates from 20th century dates. These date code fields will need to distinguish 21st century dates from 20th century dates and, as a result, many companies' software and computer systems may need to be upgraded or replaced in order to comply with such Year 2000 requirements. For the Company, the Year 2000 process involves modifying or replacing certain hardware and software. The Company has received software updates from its software vendors to make the software licensed to the Company Year 2000 compliant. The Company is utilizing both internal and external resources to reprogram, replace and test all of its software for Year 2000 compliance. The Company expects to complete the project by mid 1999 and believes that its level of preparedness is appropriate. The total cost for this project is estimated to be $350,000, of which $250,000 will be capitalized. This cost is being funded through operating cash flows and are not expected to have a material impact on the Company's cash flows, results of operations or financial condition. In addition, the Company is communicating with others with whom it does significant business to determine their Year 2000 compliance readiness and the extent to which the Company is vulnerable to any third-party Year 2000 issues. Failure by the Company and/or vendors and customers to complete Year 2000 compliance work in a timely manner could have a material adverse effect on certain of the Company's operations. The Company is in the process of developing contingency plans in the event it does not complete all phases of its Year 2000 project. The costs of this project and the expected completion dates are based on management's best estimates. 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, and interest rate and foreign exchange fluctuations. Part II - Other Information --------------------------- Item 6. Exhibits and Reports on Form 8-K - - - - - - - - - - - - - ------- (a) 10 Seventh Amendment Agreement to the Credit Agreement with First Union National Bank dated as of March 31, 1999. 27 Financial Data Schedule, which is submitted electronically to the Securities and Exchange Commission for information only and not filed. (b) No reports on Form 8-K were filed during the quarter covered by this report. 9 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: May 12, 1999 By /s/ Angela D. Toppi ------------------------- Angela D. Toppi Senior Vice President and Chief Financial Officer by /s/ Robert P. Bosworth --------------------------------- Robert P. Bosworth Vice President and Chief Accounting Officer 10 EX-10 2 SEVENTH AMENDMENT AGREEMENT AGREEMENT, made as of March 31, 1999, among TRANS-LUX CORPORATION, a Delaware corporation, TRANS-LUX DISPLAY CORPORATION, a Delaware corporation, TRANS-LUX MONTEZUMA CORPORATION, a New Mexico corporation, INTEGRATED SYSTEMS ENGINEERING, INC., a Utah corporation, and FIRST UNION NATIONAL BANK, a national banking association. Background ---------- A. Capitalized terms not otherwise defined shall have the meanings ascribed to them in the Credit Agreement dated as of August 28, 1995, among Trans-Lux Corporation, Trans-Lux Consulting Corporation, Trans-Lux Sign Corporation, Trans-Lux Montezuma Corporation, Integrated Systems Engineering, Inc., and First Fidelity Bank of Connecticut (predecessor in interest to First Union National Bank) (as amended, modified or supplemented from time to time, the "Credit Agreement"). B. Pursuant to the Merger Agreement dated December 10, 1998, Trans-Lux Sign Corporation merged with and into Trans-Lux Consulting Corporation and, contemporaneously therewith, changed its name to Trans-Lux Display Corporation. C. The Borrowers have requested that the Lender, among other things, (i) increase from $10,000,000 to $15,000,000, the amount of the Lender's commitment under Loan C, (ii) extend from June 30, 2000 to June 30, 2001, the Loan C Commitment Termination Date, and revise the amortization schedule with respect to Loan C, (iii) extend the Loan C Maturity Date to June 30, 2006 and (iv) extend from August 27, 2002 to August 27, 2004, the Term Loan Maturity Date and revise the amortization schedule with respect to Loan A. D. The Lender has agreed to the requests of the Borrowers subject to the terms and conditions of this Agreement. Agreement --------- In consideration of the foregoing Background, which is incorporated by reference, the parties, intending to be legally bound, agree as follows: 1. Modifications to Credit Agreement. All of the terms and provisions of the Credit Agreement and the other Loan Documents shall remain in full force and effect except as follows: (a) The definition of "Loan C" set forth in Annex "A" to the Credit Agreement is deleted and the following is substituted therefor: "Loan C" shall mean the revolving loan facility extended by Lender to TLX in the original principal amount of $15,000,000, evidenced by Note C. (b) The definition of "Loan C Commitment Termination Date" contained in Annex "A" of the Credit Agreement is deleted and the following is substituted therefor: "Loan C Commitment Termination Date" shall mean the earliest of (i) June 30, 2001, (ii) the date of the termination of Loan C pursuant to Section 8.2, and (iii) the date of the termination of Loan C in accordance with the provisions of Section (a)(iii)(E) of Schedule 1.1. (c) The definition of "Loan C Maturity Date" contained in Annex "A" of the Credit Agreement is deleted and the following is substituted therefor: "Loan C Maturity Date" shall mean June 30, 2006. (d) The definition of "Term Loan Maturity Date" contained in Annex "A" of the Credit Agreement is deleted and the following is substituted therefor: "Term Loan Maturity Date" shall mean August 27, 2004. (e) The figure "$10,000,000" contained in subparagraph (a)(iii) of Schedule 1.1 to the Credit Agreement is deleted and the figure "$15,000,000" is substituted therefor (f) Subparagraph (a)(ii) of Schedule 1.2 of the Credit Agreement is deleted and the following is substituted therefor: (ii) The aggregate principal amount of Note A shall be payable in quarterly installments (consisting of principal) as follows: Payment Date Amount of Payment ------------ ----------------- October 1, 1995 - July 1, 2004 $ 133,333 Term Loan Maturity Date $3,200,012 (g) Subparagraph (c)(iii) of Schedule 1.2 of the Credit Agreement is deleted and the following is substituted therefor: (iii) On June 30, 2001, the then outstanding indebtedness under Note C shall be payable in nineteen (19) equal payments each in the amount of one-twentieth (1/20) of the amount then outstanding under Note C, beginning on October 1, 2001, and continuing on the first day of each successive Fiscal Quarter and a final payment on June 30, 2006 of all amounts then outstanding under Note C. 2. Conditions Precedent. The obligation of the Lender under this Agreement is subject to the receipt and review, to the satisfaction of the Lender, of the following: (a) Amendment Agreement. This Agreement duly executed by the parties hereto; (b) Allonge. The Fourth Allonge to Revolving Promissory Note, in the form of Exhibit A hereto, duly drawn to the order of Lender; (c) Amendment Fee. Payment to the Lender of the Amendment Fee in the amount of $5,000 in consideration of the Lender's execution, delivery and performance of this Agreement; and (d) Other. Such other agreements as the Lender shall require. 4. Reaffirmation by the Borrowers. The Borrowers acknowledge that each is legally, validly and enforceably jointly and severally indebted to the Lender under the Notes, without defense, counterclaim or offset, and that each is legally, validly and enforceably liable to the Lender for all costs and expenses of collection and reasonable attorneys' fees related to or in any way arising out of this Agreement, the Notes, the Credit Agreement and the other Loan Documents. The Borrowers hereby restate and agree to be bound by all covenants contained in the Credit Agreement and the other Loan Documents and reaffirm that all of the representations and warranties contained in the Credit Agreement and the other Loan Documents remain true and correct in all material respects with the exception that the financial statements described therein are deemed true as of the date made. The Borrowers represent that except as set forth in the Credit Agreement and the other Loan Documents, there are no pending, or to each Borrower's knowledge threatened, legal proceedings to which any of the Borrowers or any of the Guarantors is a party which materially and adversely affect the transactions contemplated by this Agreement or the ability of the Borrowers or any of the Guarantors to conduct its business on a consolidated basis. The Borrowers and Guarantors acknowledge and represent that the resolutions of each dated July 27, 1995 (except for resolutions of Trans- Lux Midwest Corporation which are dated February 13, 1997), remain in full force and effect and have not been modified, amended, rescinded or otherwise abrogated. 5. Reaffirmation by the Guarantors. The Guarantors acknowledge that each is legally and validly indebted to the Lender under the Guaranty of each without defense, counterclaim or offset, and affirms that each Guaranty remains in full force and effect and includes, without limitation, the indebtedness, liabilities and obligations arising under or in any way connected with the Loans, this Agreement and the other Loan Documents, whether now existing or hereafter arising. 6. Reaffirmation re: Collateral. The Borrowers and the Guarantors reaffirm the liens, security interests and pledges granted to the Lender pursuant to the Loan Documents to secure the obligations of each thereunder. 7. Other Representations by Borrower and Guarantors. Each of the Borrowers and the Guarantors represents and confirms that (a) no Event of Default has occurred and is continuing and that the Lender has not given its consent to or waived any Default or Event of Default and (b) the Credit Agreement and the other Loan Documents are in full force and effect and enforceable against the Borrowers and the Guarantors in accordance with the terms thereof. Each of the Borrowers and Guarantors represents and confirms that as of the date hereof, each has no claim or defense (and each of the Borrowers and the Guarantors hereby waives every claim and defense as of the date hereof) against the Lender arising out of or relating to the Credit Agreement, this Agreement and the other Loan Documents or the making, administration or enforcement of the Loans and the remedies provided for under the Loan Documents. 8. No Waiver by Lender. Each of the Borrowers and the Guarantors acknowledges that (a) by execution of this Agreement, the Lender is not waiving any Default, whether now existing or hereafter occurring, disclosed or undisclosed, by the Borrower or the Guarantors under the Loan Documents and (b) the Lender reserves all rights and remedies available to it under the Loan Documents and otherwise. 9. Prejudgment Remedy Waiver; Waivers. EACH OF THE BORROWERS AND THE GUARANTORS ACKNOWLEDGES THAT THE LOANS AND THE TRANSACTIONS EVIDENCED BY THE NOTES, THE CREDIT AGREEMENT, THIS AGREEMENT AND THE OTHER LOAN DOCUMENTS ARE COMMERCIAL TRANSACTIONS AND EACH WAIVES ITS RIGHTS TO NOTICE AND HEARING PRIOR TO THE ISSUANCE OF ANY PREJUDGMENT REMEDY, OR AS OTHERWISE ALLOWED BY ANY STATE OR FEDERAL LAW WITH RESPECT TO ANY PREJUDGMENT REMEDY WHICH THE LENDER MAY DESIRE TO USE, AND FURTHER WAIVES DILIGENCE, DEMAND, PRESENTMENT FOR PAYMENT, NOTICE OF NONPAYMENT, PROTEST AND NOTICE OF ANY RENEWALS OR EXTENSIONS. EACH OF THE BORROWERS AND THE GUARANTORS ACKNOWLEDGES THAT IT MAKES THIS WAIVER KNOWINGLY, WILLINGLY, VOLUNTARILY AND WITHOUT DURESS, AND ONLY AFTER CONSIDERATION OF THE RAMIFICATIONS OF THIS WAIVER WITH ITS ATTORNEYS. 10. Jury Trial Waiver. EACH OF THE BORROWERS AND THE GUARANTORS WAIVES TRIAL BY JURY IN ANY COURT IN ANY SUIT, ACTION OR PROCEEDING ON ANY MATTER ARISING IN CONNECTION WITH, OR IN ANY WAY RELATED TO, THE FINANCING TRANSACTIONS OF WHICH THE NOTES, THE CREDIT AGREEMENT, THIS AGREEMENT AND THE OTHER LOAN DOCUMENTS IS A PART OR THE ENFORCEMENT OF ANY OF THE LENDER'S RIGHTS. EACH OF THE BORROWERS AND THE GUARANTORS ACKNOWLEDGES THAT IT MAKES THIS WAIVER KNOWINGLY, WILLINGLY, VOLUNTARILY AND WITHOUT DURESS, AND ONLY AFTER CONSIDERATION OF THE RAMIFICATIONS OF THIS WAIVER WITH ITS ATTORNEYS. 11. Miscellaneous. (a) This Agreement may be executed by one or more of the parties to this Agreement on any number of separate counterparts (including by facsimile transmission), and all of said counterparts taken together shall be deemed to constitute one and the same instrument. (b) This Agreement and the rights and obligations of the parties hereunder shall be governed by and construed in accordance with, the law of the State of Connecticut. (c) This Agreement shall be deemed a Loan Document under the Credit Agreement for all purposes. The parties have executed this Agreement on the date first written above. BORROWERS: --------- TRANS-LUX CORPORATION By /s/ Victor Liss -------------------------------------- Victor Liss Title: President By /s/ Angela Toppi -------------------------------------- Angela Toppi Title: Senior Vice President and Chief Financial Officer TRANS-LUX DISPLAY CORPORATION By /s/ Victor Liss -------------------------------------- Victor Liss Title: President By /s/ Angela Toppi -------------------------------------- Angela Toppi Title: Senior Vice President and Chief Financial Officer TRANS-LUX MONTEZUMA CORPORATION By /s/ Victor Liss -------------------------------------- Victor Liss Title: President By /s/ Angela Toppi -------------------------------------- Angela Toppi Title: Senior Vice President and Chief Financial Officer INTEGRATED SYSTEMS ENGINEERING, INC. By /s/ Victor Liss ------------------------------------- Victor Liss Title: President By /s/ Angela Toppi -------------------------------------- Angela Toppi Title: Senior Vice President and Chief Financial Officer GUARANTORS: TRANS-LUX DISPLAY CORPORATION TRANS-LUX CANADA, LTD. TRANS-LUX COCTEAU CORPORATION TRANS-LUX COLORADO CORPORATION TRANS-LUX DURANGO CORPORATION TRANS-LUX EXPERIENCE CORPORATION TRANS-LUX HIGH FIVE CORPORATION TRANS-LUX INVESTMENT CORPORATION TRANS-LUX LOMA CORPORATION TRANS-LUX LOVELAND CORPORATION TRANS-LUX MIDWEST CORPORATION TRANS-LUX MONTEZUMA CORPORATION TRANS-LUX MULTIMEDIA CORPORATION TRANS-LUX PENNSYLVANIA CORPORATION TRANS-LUX PTY, LTD. TRANS-LUX SEAPORT CORPORATION TRANS-LUX SERVICE CORPORATION TRANS-LUX SOUTHWEST CORPORATION TRANS-LUX STORYTELLER CORPORATION TRANS-LUX SYNDICATED PROGRAMS CORPORATION TRANS-LUX TAOS CORPORATION TRANS-LUX THEATRES CORPORATION INTEGRATED SYSTEMS ENGINEERING, INC. SAUNDERS REALTY CORPORATION By /s/ Victor Liss ------------------------------------- Victor Liss Title: President By /s/ Angela Toppi -------------------------------------- Angela Toppi Title: Senior Vice President and Chief Financial Officer LENDER: FIRST UNION NATIONAL BANK /s/ Richard J. Klouda By______________________________________ Richard J. Klouda Title: Senior Vice President EXHIBIT A TO SEVENTH AMENDMENT AGREEMENT FOURTH ALLONGE TO REVOLVING PROMISSORY NOTE ------------------------------------------- 1. THIS FOURTH ALLONGE TO REVOLVING PROMISSORY NOTE (the "Allonge") is dated as of March 31, 1999, to be attached to, modify, and be a part of the Revolving Promissory Note dated as of August 28, 1995, in the original principal amount of $10,000,000 (as renewed, reissued, exchanged, consolidated, amended, modified, replaced or supplemented from time to time, the "Note") of TRANS-LUX CORPORATION, a Delaware Corporation (the "Maker") in favor of FIRST FIDELITY BANK (now known as First Union National Bank, a national banking association) (the "Lender"). 2. The Maker agrees that all of the terms of the Note remain in full force and effect except as follows: (a) The figure $10,000,000 contained in the upper left corner of the Note is deleted and the figure $15,000,000 is substituted therefor. (b) The phrase "FIRST FIDELITY BANK" contained in the second line of Section 1 of the Note is deleted and the phrase "FIRST UNION NATIONAL BANK" is substituted therefor. (c) The phrase "TEN MILLION DOLLARS ($10,000,000)" contained in the fifth line of Section 1 of the Note is deleted and the phrase "FIFTEEN MILLION DOLLARS ($15,000,000)" is substituted therefor. 3. The Maker has executed and delivered this Allonge as of the date first written above. TRANS-LUX CORPORATION By /s/ Victor Liss -------------------------------------- Victor Liss Title: President By /s/ Angela Toppi -------------------------------------- Angela Toppi Title: Senior Vice President and Chief Financial Officer EX-27 3 FINANCIAL DATA SCHEDULE
5 THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM THE CONSOLIDATED BALANCE SHEET AND THE CONSOLIDATED STATEMENT OF INCOME FILED AS PART OF THE QUARTERLY REPORT ON FORM 10-Q AND IS QUALIFIED IN ITS ENTIRETY BY REFERENCE TO SUCH FINANCIAL STATEMENTS ON FORM 10-Q. 1,000 3-MOS DEC-31-1999 JAN-01-1999 MAR-31-1999 937 4,899 7,327 0 5,243 18,960 104,738 38,756 91,650 7,728 31,682 2,740 0 0 22,984 91,650 6,148 13,485 4,059 8,508 0 0 984 69 31 38 0 0 0 38 0.03 0.03
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