-----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, UQAL/bwL3iKeCew03/782DMLD59oni9dIAl+qhK+TqMOk5eE43qvZLRW6rpnWAWO /xklaKcL32BowskXjTuclw== /in/edgar/work/20000628/0000950123-00-006148/0000950123-00-006148.txt : 20000920 0000950123-00-006148.hdr.sgml : 20000920 ACCESSION NUMBER: 0000950123-00-006148 CONFORMED SUBMISSION TYPE: 10-K PUBLIC DOCUMENT COUNT: 7 CONFORMED PERIOD OF REPORT: 20000331 FILED AS OF DATE: 20000628 FILER: COMPANY DATA: COMPANY CONFORMED NAME: TRANSTECHNOLOGY CORP CENTRAL INDEX KEY: 0000099359 STANDARD INDUSTRIAL CLASSIFICATION: [3420 ] IRS NUMBER: 954062211 STATE OF INCORPORATION: DE FISCAL YEAR END: 0331 FILING VALUES: FORM TYPE: 10-K SEC ACT: SEC FILE NUMBER: 001-07872 FILM NUMBER: 663547 BUSINESS ADDRESS: STREET 1: 150 ALLEN RD CITY: LIBERTY CORNER STATE: NJ ZIP: 07938 BUSINESS PHONE: 9089031600 MAIL ADDRESS: STREET 1: 150 ALLEN RD CITY: LIBERTY CORNER STATE: NJ ZIP: 07938 FORMER COMPANY: FORMER CONFORMED NAME: SPACE ORDNANCE SYSTEMS INC DATE OF NAME CHANGE: 19740717 10-K 1 e10-k.txt TRANSTECHNOLOGY CORPORATION 1 SECURITIES AND EXCHANGE COMMISSION WASHINGTON, D.C. 20549 --------------- FORM 10-K (MARK ONE) [ X ] ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 [FEE REQUIRED] For the fiscal year ended March 31, 2000 OR [ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 [NO FEE REQUIRED] For the transition period from ____________ to ____________ Commission file number 1-7872 --------------------- TRANSTECHNOLOGY CORPORATION (Exact name of registrant as specified in its charter) Delaware (State or other jurisdiction of 95-4062211 incorporation or organization) (I.R.S. employer 150 Allen Road identification no.) Liberty Corner, New Jersey 07938 (Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code: (908) 903-1600 Securities registered pursuant to Section 12(b) of the Act: Common Stock, par value $0.01 (Title of class) New York Stock Exchange (Name of exchange on which registered) Securities registered pursuant to Section 12(g) of the Act: NONE 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 if disclosure of delinquent filers pursuant to Item 405 of Regulation S-K is not contained herein, and will not be contained, to the best of registrant's knowledge, in definitive proxy or information statements incorporated by reference in Part III of this Form 10-K or any amendment to this Form 10-K. [ ] As of June 21, 2000, the aggregate market value of voting stock held by non-affiliates of the registrant based on the last sales price as reported by the New York Stock Exchange on such date was $74,121,698. (See Item 12) As of June 21, 2000, the registrant had 6,144,804 shares of Common Stock outstanding. DOCUMENTS INCORPORATED BY REFERENCE The registrant's Annual Report for the fiscal year ended March 31, 2000 is incorporated by reference into Part I and II hereof. The registrant's Proxy Statement for the 2000 Annual Meeting of Shareholders is incorporated by reference into Part III hereof. 2 PART I ITEM 1. BUSINESS. GENERAL TransTechnology Corporation develops, manufactures and sells a wide range of products in two industry segments, as described below. TransTechnology Corporation was originally organized in 1962 as a California corporation and reincorporated in Delaware in 1986. Unless the context otherwise requires, references to the "Company" or the "Registrant" refer to TransTechnology Corporation (including the California corporation prior to the reincorporation) and its consolidated subsidiaries. The Company's fiscal year ends on March 31. Accordingly, all references to years in this report refer to the fiscal year ended March 31 of the indicated year. TransTechnology Corporation's core business areas are specialty fastener products and aerospace products. During 2000, the Company continued its program to improve its position as one of the world's major suppliers of specialty fasteners to the transportation and industrial markets. Key aspects of this program include growth through acquisitions and the consolidation and rationalization of its manufacturing operations. Actions taken during 2000 to accomplish these goals included the acquisition of the Engineered Fasteners Division of Eaton Corporation ("Tinnerman") on August 31, 1999 and the acquisition of Ellison Holdings PLC ("Ellison") on July 19, 1999. For a more detailed description of these transactions, see Note 3 of "Notes to Consolidated Financial Statements" included in the Company's 2000 Annual Report on page 19 which is incorporated herein by reference. The Company has substantially completed consolidation of the manufacturing plants in Great Britain as part of the Ellison acquisition program. This action has further strengthened the Company's position as one of the world's major suppliers of specialty fastener products to the transportation and industrial markets. Breeze-Eastern and NORCO, Inc. ("NORCO") make up the Company's aerospace products segment, and are the world's leading designers and manufacturers of sophisticated helicopter rescue hoists, cargo winches, cargo hook systems, mechanical components such as hold open rods, and application-specific mechanical and linear motion systems. These products are sold primarily to military and civilian agencies and aerospace contractors. The acquisition of all of the outstanding stock of NORCO was accomplished in fiscal 1999. For a more detailed description of this transaction, see Note 3 of "Notes to Consolidated Financial Statements" included in the Company's 2000 Annual Report on page 19 which is incorporated herein by reference. SPECIALTY FASTENER PRODUCTS The Company's specialty fastener products are manufactured by its Engineered Components Group (Palnut and the recently acquired Tinnerman companies), its Engineered Products Group (Breeze Industrial, Pebra, TCR and ARM) and its Engineered Rings Group (Seeger-Orbis, TransTechnology Brasil, Waldes/IRR, TransTechnology (GB)). TransTechnology (GB) represents the consolidation of the Anderton and the recently acquired Ellison plants into a single manufacturing facility in Great Britain. The Engineered Components Group includes single and multi-thread metal fasteners, retaining rings and headlight adjusters for the automotive and industrial markets. These fasteners include: lock nuts for load carrying in light duty assemblies or as a supplement to ordinary nuts to assure tightness; the On-Sert(R) fastener, which is pressed onto hollow plastic bosses to increase torque and minimize stripping; push-nuts used as temporary fasteners that hold pre-inserted bolts in place for final assembly or in ratchet plates which fasten onto a shaft or stud; self-threaders used in the installation of automotive trim; U-nuts that provide one-sided screw assembly and are used to fasten bumpers, fenders and grills to vehicles; various single threaded parts designed 1 3 for insertion into metal or plastic panels; and a variety of automotive headlight adjusters. Within the Engineered Products Group, Breeze Industrial designs and manufactures a diverse line of high-quality stainless steel hose clamps, including worm drive hose clamps, T-Bolt and V-Band clamps, and light duty clamps for use in the heavy truck and industrial equipment industries by original equipment manufacturers and replacement suppliers. Pebra designs and manufactures hose clamps primarily for heavy truck manufacturers in Europe. TCR designs and manufactures sophisticated externally threaded fastening devices and custom industrial components by combining its expertise in cold forging and machining technologies. TCR products are used by industrial customers worldwide, with key market groups, including automotive, hydraulic and recreational product industries. ARM designs and manufactures rivets and externally threaded fasteners primarily for the aerospace industry. Within the Engineered Rings Group, Seeger-Orbis, TransTechnology Brasil, Waldes/IRR and TransTechnology (GB) manufacture a large range of retaining and snap rings used in the automotive, marine, household and computer applications that require retention of parts to shafts and axles. Specialty fasteners are marketed through a combination of a direct sales force, distributors and manufacturing representatives. Such products comprised 80%, 78% and 83% of the Company's consolidated net sales in 2000, 1999 and 1998, respectively. At March 31, 2000, the Company's Specialty Fastener Products segment backlog was $65.4 million, compared to $45.9 million at March 31, 1999. The increase is primarily the result of the Tinnerman and Ellison acquisitions. Substantially all of the March 31, 2000 backlog is scheduled to be shipped during fiscal 2001. AEROSPACE PRODUCTS The Company's aerospace products are designed, developed and manufactured by Breeze-Eastern and NORCO. Breeze-Eastern specializes in the design, development and manufacture of sophisticated lifting and restraining products, principally helicopter rescue hoists, reeling machines and external hook systems. In addition, Breeze-Eastern designs, develops and manufactures winches and hoists for aircraft cargo and weapon-handling systems with applications ranging from cargo handling on fixed-wing aircraft to positioning television cameras on blimps, antenna and gear drives. Management believes that Breeze-Eastern is the industry market share leader in sales of personnel-rescue hoists and cargo hook equipment. As a pioneer of helicopter hoist technology, Breeze-Eastern continues to develop sophisticated helicopter hoist systems, including systems for the current generation of Seahawk, Chinook, Dolphin, Merlin and Super Stallion helicopters. Breeze-Eastern also supplies equipment for the United States, Japanese and European Multiple-Launch Rocket Systems which use two specialized hoists to load and unload rocket pod containers. Breeze-Eastern's external cargo-lift hook systems are original equipment on most helicopters manufactured today. These hook systems range from small 1,000-pound capacity models up to the largest 36,000-pound capacity hooks employed on the Super Stallion helicopter. Breeze-Eastern also manufactures aircraft and cargo tie-downs. NORCO designs, develops and manufactures mechanical components and systems such as hold open rods, quick connect/disconnect locking systems, helicopter blade restraint systems, latch assemblies, safety locks and application-specific mechanical systems. Its power transmission line of products include rollnuts, rollnut longspan assemblies, ball reversers, ball oscillators, FlenNute assemblies and other application-specific linear motion assemblies. Breeze-Eastern and NORCO sell their products through internal marketing representatives and several independent sales representatives and distributors. The Aerospace product lines contributed 20%, 22% and 17% to the Company's consolidated net sales in 2000, 1999 and 1998, respectively. 2 4 The Aerospace Product segment backlog varies substantially from time to time due to the size and timing of orders. At March 31, 2000, the backlog of unfilled orders was $44.2 million, compared to $43.8 million at March 31, 1999. The majority of the March 31, 2000 backlog is expected to be shipped during fiscal 2001. DEFENSE INDUSTRY SALES Approximately 8% of the Company's consolidated net sales in 2000, as compared to 10% and 11% in 1999 and 1998, respectively, were derived from sales to the United States Government, principally the military services of the Department of Defense and its prime contractors. These contracts typically contain precise performance specifications and are subject to customary provisions which give the United States Government the contractual right of termination for convenience. In the event of termination for convenience, however, the Company is typically protected by provisions allowing reimbursement for costs incurred as well as payment of any applicable fees or profits. ENVIRONMENTAL MATTERS Due primarily to Federal and State legislation which imposes liability, regardless of fault, upon commercial product manufacturers for environmental harm caused by chemicals, processes and practices that were commonly and lawfully used prior to the enactment of such legislation, the Company may be liable for all or a portion of the environmental clean-up costs at sites previously owned or leased by the Company (or corporations acquired by the Company). The Company's contingencies associated with environmental matters are described in Note 12 of "Notes to Consolidated Financial Statements" included in the Company's 2000 Annual Report on page 25 which is incorporated herein by reference. COMPETITION The Company's businesses compete in some markets with entities that are larger and have substantially greater financial and technical resources than the Company. Generally, competitive factors include design capabilities, product performance, delivery and price. The Company's ability to compete successfully in such markets will depend on its ability to develop and apply technological innovations and to expand its customer base and product lines. The Company is successfully doing so both internally and through acquisitions. There can be no assurance that the Company will continue to successfully compete in any or all of the businesses discussed above. The failure of the Company to compete in more than one of these businesses could have a materially adverse effect on the Company's profitability. 3 5 RAW MATERIALS The various components and raw materials used by the Company to produce its products are generally available from more than one source. In those instances where only a single source for any material is available, such items can generally be redesigned to accommodate materials made by other suppliers. In some cases, the Company stocks an adequate supply of the single source materials for use until a new supplier can be approved. The Company's business is not dependent upon a single supplier or a few suppliers, the loss of which would have a materially adverse effect on the Company's consolidated financial position. EMPLOYEES As of June 2, 2000, the Company employed 2,581 people. There were 2,277 employees associated with the Specialty Fastener Products segment, 283 with the Aerospace Products segment and 21 with the corporate office. FINANCIAL INFORMATION ABOUT INDUSTRY SEGMENTS Financial information relating to each of the Company's segments has been included in Note 13 of "Notes to Consolidated Financial Statements" included in the Company's 2000 Annual Report on pages 25-27 and is incorporated herein by reference. FOREIGN OPERATIONS AND SALES The Company's foreign-based facilities during fiscal 2000 consisted of the Seeger-Orbis and Pebra facilities located in Konigstein and Frittlingen, Germany, TransTechnology (GB) Limited's facility located in Glusburn, England, sales offices in Paris, France, Barcelona, Spain and Surrey, England, TransTechnology Brasil's facility located in Sao Paulo, Brazil and TransTechnology Canada Corporation's facility located in Hamilton, Ontario. The Company acquired the Seeger-Orbis and TransTechnology Brazil businesses on June 30, 1995. Pebra was acquired on June 18, 1996. TransTechnology (GB) resulted from the consolidation on December 1, 1999, of Anderton International Limited, acquired on June 30, 1995, and Ellison Holdings PLC, was acquired on July 19, 1999. TransTechnology Canada Corporation was incorporated on August 12, 1999 to hold the Canadian based assets of Eaton's Engineered Fasteners Division acquired on August 31, 1999. The Company had foreign sales of $66.2 million, $56.7 million and $57.2 million in fiscal 2000, 1999 and 1998, respectively, representing 22%, 25% and 28% of the Company's consolidated net sales in each of those years, respectively. The Company had export sales of $43.3 million, $31.2 million and $20.3 million in fiscal 2000, 1999 and 1998, respectively, representing 15%, 14% and 10% of the Company's consolidated net sales in each of those years, respectively. The risk and profitability attendant to these sales is generally comparable to similar products sold in the United States. Net sales, profits and identifiable assets attributable to the Company's foreign and domestic operations, and the identification of export sales by geographic area, are set forth in Note 13 of "Notes to Consolidated Financial Statements" in the Company's 2000 Annual Report on pages 25-27 and is incorporated herein by reference. 4 6 ITEM 2. PROPERTIES The following table sets forth certain information concerning the Company's principal facilities for its continuing operations:
Owned or Location Use of Premises Leased Sq. Ft -------- --------------- ------ ------ Liberty Corner, New Jersey Executive Offices Leased 13,000
SPECIALTY FASTENER PRODUCTS SEGMENT - ------------------ Saltsburg, Pennsylvania Breeze Industrial offices and Owned 137,000 manufacturing plant Mountainside, New Jersey Palnut offices and manufacturing Owned 142,000 plant Irvington, New Jersey TransTechnology Engineered Owned 37,000 Rings - Industrial Division manufacturing plant Millburn, New Jersey TransTechnology Engineered Leased 53,100 Rings - Industrial Division offices and distribution center City of Industry, California Aerospace Rivet Manufacturers Leased 60,500 Corporation offices and manufacturing plant Southfield, Michigan Engineered components sales office Leased 6,000 Brunswick, Ohio TT Engineered Components Leased 44,500 group offices and manufacturing plant Massillon, Ohio TT Engineered Components Owned 190,580 offices and manufacturing plant Hamilton, Ontario, Canada TT Engineered Components Owned 127,913 offices and manufacturing plant Konigstein, Germany Seeger Group offices and Owned 149,000 Seeger-Orbis manufacturing Plant Minneapolis, Minnesota TCR Corporation offices Leased 137,000 and plant
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SPECIALTY FASTENER PRODUCTS SEGMENT - ------------------ (Continued) Glusburn, England TransTechnology (GB) offices Owned 263,000 and manufacturing plant Surrey, England TransTechnology Engineered Leased 109 Components sales office Sao Paulo, Brazil TransTechnology Brasil offices Owned 85,000 and manufacturing plant Paris, France TransTechnology Engineered Leased 500 Rings sales office Frittlingen, Germany Pebra offices and Owned 30,000 manufacturing plant Barcelona, Spain TransTechnology Engineered Leased 500 Rings sales office
AEROSPACE PRODUCTS SEGMENT - -------------------------- Union, New Jersey Breeze-Eastern offices Owned 188,000 and manufacturing plant Ridgefield, Connecticut NORCO, Inc.offices and Owned 35,000 manufacturing plant
The Company believes that such facilities are suitable and adequate for the Company's foreseeable needs and that additional space, if necessary, will be available. The Company continues to own or lease property that it no longer needs in its operations. These properties are located in California, Pennsylvania, New York, Illinois and England. In some instances, the properties are leased or subleased and in nearly all instances these properties are for sale. ITEM 3. LEGAL PROCEEDINGS The information required has been included in Note 12 of "Notes to Consolidated Financial Statements" included in the Company's 2000 Annual Report on page 25 and is incorporated herein by reference. ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS No matters were submitted to a vote of the Company's security holders during the three month period ended March 31, 2000. 6 8 PART II ITEM 5. MARKET FOR REGISTRANT'S COMMON EQUITY AND RELATED STOCKHOLDER MATTERS The Company's Common Stock, par value $0.01, is traded on the New York Stock Exchange under the symbol TT. The following table sets forth the range of high and low closing sales prices of shares of the Company's Common Stock for the calendar quarters indicated, as reported by the New York Stock Exchange.
High Low ---- --- Fiscal 1999 First Quarter $ 30-5/8 $ 25-9/16 Second Quarter 27-1/8 20-1/4 Third Quarter 23-11/16 18-9/16 Fourth Quarter 20-3/4 16-1/2 Fiscal 2000 First Quarter $ 20-7/16 $ 16-15/16 Second Quarter 19-3/4 11-5/8 Third Quarter 12-5/16 8-1/8 Fourth Quarter 15-3/16 10-1/2 Fiscal 2001 First Quarter $ 14-11/16 $ 8-7/16 (through June 21, 2000)
As of June 21, 2000, the number of stockholders of record of the Common Stock was 1,824. On June 21, 2000, the closing sales price of the Common Stock was $12.0625 per share. The Company's bank indebtedness permits quarterly dividend payments which cannot exceed 25% of the Company's cumulative net income in each year. The Company paid a regular quarterly dividend of $0.065 per share on June 1, September 1 and December 1, 1998, March 1, June 1, September 1 and December 1, 1999 and March 1, 2000. ITEM 6. SELECTED FINANCIAL DATA The information required has been included in the Company's 2000 Annual Report on page 1 and is incorporated herein by reference. 7 9 ITEM 7. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS The information required has been included in the Company's 2000 Annual Report on pages 28-33 and is incorporated herein by reference. ITEM 7A. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK The information required has been included in the Company's 2000 Annual Report on pages 32-33 and is incorporated herein by reference. ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA Financial Statements: The information required has been included in the Company's 2000 Annual Report on pages 13-33 and is incorporated herein by reference. Quarterly Financial Data: The information required has been included in Note 14 of Notes to Consolidated Financial Statements in the Company's 2000 Annual Report on page 27 and is incorporated herein by reference. Financial Statement Schedules: Schedule II -- Consolidated Valuation and Qualifying Accounts for years ended March 31, 2000, 1999 and 1998. Schedules referenced in Article 5 of Regulation S-X, other than that listed above, are not required and have been omitted. ITEM 9. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL DISCLOSURE None. 8 10 PART III ITEM 10. DIRECTORS AND EXECUTIVE OFFICERS OF THE REGISTRANT The information required by this item is contained in the Registrant's Proxy Statement for the 2000 Annual Meeting of Shareholders and is incorporated herein by reference. ITEM 11. EXECUTIVE COMPENSATION The information required by this item is contained in the Registrant's Proxy Statement for the 2000 Annual Meeting of Shareholders and is incorporated herein by reference. ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT The information required by this item is contained in the Registrant's Proxy Statement for the 2000 Annual Meeting of Shareholders and is incorporated herein by reference. For purposes of the calculation of the aggregate market value of voting stock held by non-affiliates, the Company has assumed that the shares of Common Stock beneficially owned by Dr. Arch C. Scurlock are not held by an affiliate of the Company. ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS The information required by this item is contained in the Registrant's Proxy Statement for the 2000 Annual Meeting of Shareholders and is incorporated herein by reference. 9 11 PART IV ITEM 14. EXHIBITS, FINANCIAL STATEMENT SCHEDULES AND REPORTS ON FORM 8-K (a) List of documents filed as part of the Annual Report: 1. Financial Statements: Consolidated Balance Sheets at March 31, 2000 and 1999 Statements of Consolidated Operations for the years ended March 31, 2000, 1999 and 1998 Statements of Consolidated Cash Flows for the years ended March 31, 2000, 1999 and 1998 Statements of Consolidated Stockholders' Equity for the years ended March 31, 2000, 1999 and 1998 Notes to Consolidated Financial Statements Independent Auditors' Report 2. Financial Statement Schedules: Independent Auditors' Report Schedule II - Consolidated Valuation and Qualifying Accounts for the years ended March 31, 2000, 1999 and 1998 3. Exhibits:
The exhibits listed on the accompanying Index to Exhibits are filed as part of this report. (b) Reports on Form 8-K: No reports on Form 8-K were filed during the three-month period ended March 31, 2000. 10 12 SIGNATURES Pursuant to the requirements of Section 13 or 15(d) 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. Date: June 23, 2000 TRANSTECHNOLOGY CORPORATION By: /s/Michael J. Berthelot --------------------------------------- Michael J. Berthelot, Chairman of the Board, President and Chief Executive Officer 11 13 Pursuant to the requirements of the Securities Exchange Act of 1934, this report has been signed below by the following persons on behalf of the Registrant and in the capacities and on the dates indicated.
Signature Title Date --------- ----- ---- /s/Michael J. Berthelot Chairman of the Board, President June 23, 2000 - ----------------------------------- and Chief Executive Officer MICHAEL J. BERTHELOT (Principal Executive Officer) /s/Joseph F. Spanier Vice President, Chief Financial Officer June 23, 2000 - ----------------------------------- and Treasurer JOSEPH F. SPANIER (Principal Financial and Accounting Officer) /s/Walter Belleville Director June 23, 2000 - ----------------------------------- WALTER BELLEVILLE /s/Gideon Argov Director June 23, 2000 - ----------------------------------- GIDEON ARGOV /s/Thomas V. Chema Director June 23, 2000 - ----------------------------------- THOMAS V. CHEMA /s/John H. Dalton Director June 23, 2000 - ----------------------------------- JOHN H. DALTON /s/James A. Lawrence Director June 23, 2000 - ----------------------------------- JAMES A. LAWRENCE /s/Michel Glouchevitch Director June 23, 2000 - ----------------------------------- MICHEL GLOUCHEVITCH /s/William J. Recker Director June 23, 2000 - ----------------------------------- WILLIAM J. RECKER
12 14 INDEPENDENT AUDITORS' REPORT To the Stockholders and the Board of Directors of TransTechnology Corporation: We have audited the consolidated financial statements of TransTechnology Corporation and subsidiaries as of March 31, 2000 and 1999, and for each of the three years in the period ended March 31, 2000, and have issued our report thereon dated May 18, 2000; such consolidated financial statements and report are included in your 2000 Annual Report and are incorporated herein by reference. Our audits also included the financial statement schedule of TransTechnology Corporation, listed in Item 14. This financial statement schedule is the responsibility of the Corporation's management. Our responsibility is to express an opinion based on our audits. In our opinion, such financial statement schedule, when considered in relation to the basic consolidated financial statements taken as a whole, presents fairly in all material respects the information set forth therein. /s/ Deloitte & Touche LLP Parsippany, New Jersey May 18, 2000 13 15 TRANSTECHNOLOGY CORPORATION SCHEDULE II CONSOLIDATED VALUATION AND QUALIFYING ACCOUNTS FOR YEARS ENDED MARCH 31, 2000, 1999 AND 1998 (IN THOUSANDS)
BALANCE AT CHARGED TO CHARGED TO BALANCE BEGINNING OF COSTS AND OTHER AT END DESCRIPTION PERIOD EXPENSES ACCOUNTS DEDUCTIONS OF PERIOD ------------------------- ----------------- --------------- --------------- ----------------- ------------ 2000 ---- Allowances for doubtful accounts and sales returns $ 240 $ 778 $ 488 (A) $ 377 $ 1,129 Inventory reserves $ 4,715 $ 3,305 $ 466 $ 2,705 $ 5,781 Environmental reserves $ 2,140 $ 201 - $ 427 $ 1,914 1999 ---- Allowances for doubtful accounts and sales returns $ 556 $ 230 $ 40 (B) $ 586 $ 240 Inventory reserves $ 6,382 $ 1,432 - $ 3,099 $ 4,715 Environmental reserves $ 3,141 $ 479 - $ 1,480 $ 2,140 1998 ---- Allowances for doubtful accounts and sales returns $ 588 $ 537 $ 20 (C) $ 589 $ 556 Inventory reserves $ 6,363 $ 1,014 - $ 995 $ 6,382 Environmental reserves $ 3,177 $ 642 - $ 678 $ 3,141
(A) Amount represents balance acquired from Tinnerman and Ellison acquisitions. (B) Amount represents balances acquired from ARM and NORCO, Inc. acquisitions. (C) Amount represents balance acquired from TCR Corporation acquisition. 14 16 INDEX TO EXHIBITS
Page Sequentially Numbered ------------ 3.1 Certificate of Incorporation of the Company.(1) -- 3.2 Bylaws of the Company Amended and Restated as of April 15, 1999. (13) -- 10.1 1996 - 1998 Incentive Compensation Plan of the Company.(10) -- 10.2 Amended and Restated 1992 Long Term Incentive Plan of the Company.(2) -- 10.3 Form of Incentive Stock Option Agreement.(2) -- 10.4 Form of Director Stock Option Agreement.(3) -- 10.5 Form of Restricted Stock Award Agreement used under the Company's Amended and Restated 1992 Long Term Incentive Plan.(4) -- 10.6 Indemnification Agreement dated February 11, 1987 between the Company and each of its officers and directors. (5) -- 10.7 Executive Life Insurance Plan.(6) -- 10.8 Amended and Restated Credit Agreement dated as of June 30, 1995 and amended and restated as of July 24, 1998 between the Company and BankBoston, N.A. (13) -- 10.9 Amendment Agreement No. 1 to the Amended and Restated Credit Agreement dated as of August 21, 1998 between the Company and BankBoston, N.A. (13) -- 10.10 Amendment Agreement No. 2 to the Amended and Restated Credit Agreement dated as of November 27, 1998 between the Company and BankBoston, N.A. (13) -- 10.11 Amendment Agreement No. 3 to the Amended and Restated Credit Agreement dated as of December 23, 1998 between the Company and BankBoston, N.A. (13) -- 10.14 Form of Executive Severance Agreement with Officers of the Company.(10) -- 10.15 Form of Executive Severance Agreement with Subsidiary Presidents. (10) -- 10.16 Form of Executive Severance Agreement with Division Presidents.(10) -- 10.17 Form of Executive Severance Agreement with Overseas Subsidiary Managing Directors.(10) -- 10.18 Form of First Amendment to Executive Severance Agreement with Officers of the Company.(11) -- 10.19 Form of First Amendment to Executive Severance Agreement with Subsidiary Presidents.(11) -- 10.20 Form of First Amendment to Executive Severance Agreement with Division Presidents.(11) -- 10.21 Form of First Amendment to Executive Severance Agreement with Overseas Subsidiary Managing Directors.(11) -- 10.22 Consulting Agreement with John Dalton. (13) --
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Page Sequentially Numbered ------------ 10.23 1999-2001 Incentive Compensation Plan of the Company. (13) -- 10.24 1998 Non-Employee Directors' Stock Option Plan of the Company.(12) -- 10.25 Form of Stock Option Agreement used under the Company's 1998 Non-Employee Directors' Stock Option Plan. (13) -- 10.26 1999 Long Term Incentive Plan of the Company. (13) -- 10.27 Form of Stock Option Agreement used under the Company's 1999 Long Term Incentive Plan. -- 10.28 Form of Restricted Stock Award Agreement used under the Company's 1999 Long Term Incentive Plan. -- 10.29 Second Amended and Restated Credit Agreement dated as of June 30, 1995, amended and restated as of July 24, 1998 and further amended and restated as of as of August 31, 1999 among TransTechnology Corporation, TransTechnology Seeger-Orbis GmbH, TransTechnology (GB) Limited, The Lenders referred to therein, BankBoston, N.A., acting through its London Branch, as Sterling Fronting Bank, BHF-Bank Aktiengesellschaft, as DM Fronting Bank, ABN AMRO Bank, N.V., as Syndication Agent, The First National Bank of Chicago, as Documentation Agent and BankBoston, N.A. as Administrative Agent and Issuing Bank. (14) -- 10.30 Senior Subordinated Note Purchase Agreement dated as of August 31, 1999 among TransTechnology Corporation, the Lenders and Holders referred to therein and BankBoston, N.A. as Administrative Agent. (14) -- 10.31 Warrant Agreement as of August 31, 1999 by and between TransTechnology Corporation, and State Street Bank and Trust Company as Warrant Agent. (14) -- 10.32 Warrant Holders' Agreement by and among TransTechnology Corporation, the Purchasers named therein and BankBoston, N.A., as Administrative Agent. (14) -- 10.33 Registration Rights Agreement dated as of August 31, 1999 by and among TransTechnology Corporation, the Guarantors named therein and BankBoston, N.A., as Administrative Agent. (14) -- 10.34 Warrant Escrow Agreement dated as of August 31, 1999 among TransTechnology Corporation, State Street Bank and Trust Company as Warrant Agent and as Escrow Agent, and BankBoston, N.A. as Administrative Agent. (14) -- 10.35 Exchange Escrow Agreement dated as of August 31, 1999 among TransTechnology Corporation, State Street Bank and Trust Company as Trustee and as Escrow Agent, and BankBoston, N.A. as Administrative Agent. (14) -- 10.36 Indemnification Agreement dated January 13, 2000 between the Company and each of its officers and directors. -- 13 The Company's 2000 Annual Report. -- 21 List of Subsidiaries of the Company. -- 27 Financial Data Schedule. --
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Page Sequentially Numbered ------------ (1) Incorporated by reference from the Company's Form 8-A Registration Statement No. 2-85599 dated February 9, 1987. -- (2) Incorporated by reference from the Company's Registration Statement on Form S-8 No. 333-45059 dated January 28, 1998. -- (3) Incorporated by reference from the Company's Annual Report on Form 10-K for the Fiscal Year ended March 31, 1995. -- (4) Incorporated by reference from the Company's Annual Report on Form 10-K for the Fiscal Year ended March 31, 1994. -- (5) Incorporated by reference from the Company's Annual Report on Form 10-K for the Fiscal Year ended March 31, 1987. -- (6) Incorporated by reference from the Company's Annual Report on Form 10-K for the Fiscal Year ended March 31, 1989. -- (7) Incorporated by reference from the Company's Report on Form 8-K filed on July 14, 1995. -- (8) Incorporated by reference from the Company's Annual Report on Form 10-K for the Fiscal Year ended March 31, 1996. -- (9) Incorporated by reference from the Company's Report on Form 8-K filed on April 29, 1997. -- (10) Incorporated by reference from the Company's Annual Report on Form 10-K for the Fiscal Year ended March 31, 1997. -- (11) Incorporated by reference from the Company's Quarterly Report on Form 10-Q for the Quarter ended December 27, 1998. -- (12) Incorporated by reference from the Company's Registration Statement on Form S-8 No. 333-70877 dated January 20, 1999. -- (13) Incorporated by reference from the Company's Annual Report on Form 10-K for the Fiscal Year ended March 31, 1999. -- (14) Incorporated by reference from the Company's Report on Form 8-K filed on November 12, 1999. --
17 EX-10.27 2 ex10-27.txt FORM OF STOCK OPTION AGREEMENT 1 EXHIBIT 10.27 TRANSTECHNOLOGY CORPORATION INCENTIVE STOCK OPTION AGREEMENT Agreement dated as of _________________ between TransTechnology Corporation, a Delaware corporation (the "Company"), and ________________ ("Optionee"), residing at _______________. Whereas, pursuant to the 1999 Long Term Incentive Plan of the Company (the "Plan"), the Incentive & Compensation Committee of the Board of Directors has authorized the granting to Optionee of an incentive stock option to purchase shares of common stock of the Company upon the terms and conditions hereinafter stated. NOW THEREFORE, in consideration of the covenants herein set forth, the parties agree as follows: 1. Shares & Price. The Company grants to Optionee the right to purchase, upon and subject to the terms and conditions herein stated and the terms and conditions of the Plan, all or any part of __________________ shares of common stock ($.01 par value) of the Company (the "Shares"), for cash at the price of $_____________ per share. 2. Term of Option. This option shall expire on _____________. 3. Installments. Subject to the provisions hereof, this option shall become exercisable in one or more installments set forth below. Each installment shall be for the numbers of Shares and exercisable (in whole or in part) upon and after the dates set forth.
Date Number of Shares ---- ---------------- Shares ------------- ------------- Shares ------------- ------------- Shares ------------- -------------
The installments shall be cumulative; i.e., this option may be exercised, as to any or all shares covered by an installment, at any time after an installment becomes exercisable and until expiration or termination of this option. 4. Exercise. This option may only be exercised by delivery to the Company of (i) a written notice of exercise, in form acceptable to the Company, stating the number of Shares then being purchased hereunder, and (ii) a check, or cash, in the amount of the purchase price of such shares (or, at the discretion of the Board of Directors, with Shares of Company with a market value equal to the purchase price at date of exercise). 5. Termination of Employment. If Optionee ceases to be employed by the Company or a subsidiary thereof for any reason other than his death or 2 disability, either Optionee or the person entitled to succeed to his rights hereunder shall have the right, at any time within three months after such termination of employment and prior to the expiration of this option pursuant to Paragraph 2 hereof, to exercise this option to the extent, but only to the extent, that this option was exercisable and had not previously been exercised at the date of such termination of employment; provided, however, that all rights under this option shall expire in any event on the day specified in Paragraph 2 hereof or three months after Optionee terminates employment, whichever first occurs. 6. Death of Optionee & No Assignment. The option shall not be assignable or transferable except by will or by the laws of descent and distribution and shall be exercisable during his lifetime only by the Optionee. If Optionee shall become disabled or die while in the employ of the Company, the Optionee or the person entitled to succeed to his rights hereunder may exercise this option until the first to occur of (i) the date one year from the date of the Optionee's disability or death, or (ii) the date such option expires pursuant to Paragraph 2 hereof to the extent that Optionee was entitled to exercise this Option at the date of his disability or death. 7. Employment of Optionee. In consideration of the granting of this option by the Company, the Optionee agrees to render faithful and efficient services to the Company or a subsidiary thereof, with such duties and responsibilities as the Company or such subsidiary shall from time to time prescribe, for a period of at least one year from the date this option is granted. Nothing in this Agreement or in the Plan shall confer upon the Optionee any right to continue in the employ of the Company or any subsidiary thereof or shall interfere with or restrict in any way the rights of the Company and its subsidiaries, which are hereby expressly reserved, to discharge the Optionee at any time for any reason whatsoever, with or without good cause. 8. No Rights as Stockholders. Optionee shall have no rights as a stockholder with respect to the Shares covered by the option until the date of the issuance of stock certificates to him. No adjustment will be made for dividends or other rights for which the record date is prior to the date such stock certificates are issued pursuant to the exercise of options granted hereunder. 9. Modification and Termination. The rights of Optionee are subject to modification and termination in certain events as provided in the Plan. 2 3 10. Shares Purchased for Investment. Optionee represents and agrees that if he exercises this option in whole or in part, he shall acquire the shares upon such exercise for the purpose of investment and not with a view to their resale or distribution. The Company reserves the right to include a legend on each certificate representing shares subject to this option, stating in effect that such shares have not been registered under the Securities Act of 1933, as amended. 11. This Agreement Subject to Plan. This agreement is made pursuant to all of the provisions of the Plan, and is intended, and shall be interpreted in a manner, to comply therewith. Any provision hereof inconsistent with the Plan shall be superseded and governed by the Plan. 12. Gender. Unless the context otherwise requires, the masculine gender includes the feminine. 13. Notices. Any notices or other communication required or permitted hereunder shall be sufficiently given if delivered personally or sent by registered or certified mail, postage prepaid, to the Company at its corporate headquarters, and to the Optionee at the address above, or to such other address as shall be furnished in writing by either party to the other party, and shall be deemed to have been given as of the date so delivered or deposited in the United States mail, as the case may be. IN WITNESS WHEREOF, the parties hereto have executed this agreement. TRANSTECHNOLOGY CORPORATION ("COMPANY") --------------------------- Name: Title: --------------------------- Participant Name: Grant Number: ---------- 3 4 TRANSTECHNOLOGY CORPORATION NON-QUALIFIED STOCK OPTION AGREEMENT Agreement dated as of ______________ between TransTechnology Corporation, a Delaware corporation (the "Company"), and _______________ ("Optionee"), residing at_______________. Whereas, pursuant to the 1999 Long Term Incentive Plan of the Company (the "Plan"), the Incentive & Compensation Committee of the Board of Directors has authorized the granting to Optionee of a non-qualified stock option to purchase shares of common stock of the Company upon the terms and conditions hereinafter stated. NOW THEREFORE, in consideration of the covenants herein set forth, the parties agree as follows: 1. Shares & Price. The Company grants to Optionee the right to purchase, upon and subject to the terms and conditions herein stated and the terms and conditions of the Plan, all or any part of _________ shares of common stock ($.01 par value) of the Company (the "Shares"), for cash at the price of $ ________ per share. 2. Term of Option. This option shall expire on ____________. 3. Installments. Subject to the provisions hereof, this option shall become exercisable in one or more installments set forth below. Each installment shall be for the numbers of Shares and exercisable (in whole or in part) upon and after the dates set forth.
Date Number of Shares ---- ---------------- Shares ------------- ------------ Shares ------------- ------------ Shares ------------- ------------
The installments shall be cumulative; i.e., this option may be exercised, as to any or all shares covered by an installment, at any time after an installment becomes exercisable and until expiration or termination of this option. 4. Exercise. This option may only be exercised by delivery to the Company of (i) a written notice of exercise, in form acceptable to the Company, stating the number of Shares then being purchased hereunder, and (ii) a check, or cash, in the amount of the purchase price of such shares (or, at the discretion of the Board of Directors, with Shares of Company with a market value equal to the purchase price at date of exercise). 4 5 5. Termination of Employment. If Optionee ceases to be employed by the Company or a subsidiary thereof for any reason other than his death or disability, either Optionee or the person entitled to succeed to his rights hereunder shall have the right, at any time within three months after such termination of employment and prior to the expiration of this option pursuant to Paragraph 2 hereof, to exercise this option to the extent, but only to the extent, that this option was exercisable and had not previously been exercised at the date of such termination of employment; provided, however, that all rights under this option shall expire in any event on the day specified in Paragraph 2 hereof or three months after Optionee terminates employment, whichever first occurs. 6. Death of Optionee & No Assignment. The option shall not be assignable or transferable except by will or by the laws of descent and distribution and shall be exercisable during his lifetime only by the Optionee. If Optionee shall become disabled or die while in the employ of the Company, the Optionee or the person entitled to succeed to his rights hereunder may exercise this option until the first to occur of (i) the date one year from the date of the Optionee's disability or death, or (ii) the date such option expires pursuant to Paragraph 2 hereof to the extent that Optionee was entitled to exercise this Option at the date of his disability or death. 7. Employment of Optionee. In consideration of the granting of this option by the Company, the Optionee agrees to render faithful and efficient services to the Company or a subsidiary thereof, with such duties and responsibilities as the Company or such subsidiary shall from time to time prescribe, for a period of at least one year from the date this option is granted. Nothing in this Agreement or in the Plan shall confer upon the Optionee any right to continue in the employ of the Company or any subsidiary thereof or shall interfere with or restrict in any way the rights of the Company and its subsidiaries, which are hereby expressly reserved, to discharge the Optionee at any time for any reason whatsoever, with or without good cause. 8. No Rights as Stockholders. Optionee shall have no rights as a stockholder with respect to the Shares covered by the option until the date of the issuance of stock certificates to him. No adjustment will be made for dividends or other rights for which the record date is prior to the date such stock certificates are issued pursuant to the exercise of options granted hereunder. 9. Modification and Termination. The rights of Optionee are subject to modification and termination in certain events as provided in the Plan. 10. Shares Purchased for Investment. Optionee represents and agrees that if he exercises this option in whole or in part, he shall acquire the shares upon such exercise for the purpose of investment and not with a view to their resale or distribution. The Company reserves the right to include a legend on each certificate representing shares subject to this option, stating in effect that such shares have not been registered under the Securities Act of 1933, as amended. 5 6 11. This Agreement Subject to Plan. This agreement is made pursuant to all of the provisions of the Plan, and is intended, and shall be interpreted in a manner, to comply therewith. Any provision hereof inconsistent with the Plan shall be superseded and governed by the Plan. 12. Gender. Unless the context otherwise requires, the masculine gender includes the feminine. 13. Notices. Any notices or other communication required or permitted hereunder shall be sufficiently given if delivered personally or sent by registered or certified mail, postage prepaid, to the Company at its corporate headquarters, and to the Optionee at the address above, or to such other address as shall be furnished in writing by either party to the other party, and shall be deemed to have been given as of the date so delivered or deposited in the United States mail, as the case may be. IN WITNESS WHEREOF, the parties hereto have executed this agreement. TRANSTECHNOLOGY CORPORATION ("COMPANY") --------------------------- Name: Title: --------------------------- Participant Name: Grant Number: ----------- 6 EX-10.28 3 ex10-28.txt FORM OF RESTRICTED STOCK AWARD 1 EXHIBIT 10.28 Participant: ---------------- No. of Shares: -------- TRANSTECHNOLOGY CORPORATION Restricted Stock Award Agreement This Agreement is entered into as of this ______ day of _____, _____, by and between TransTechnology Corporation, a Delaware corporation (the "Company"), and the undersigned participant in the Company's 1999 Long Term Incentive Plan (the "Participant"). R E C I T A L S A. Pursuant to the Company's 1999 Long Term Incentive Plan (the "Plan"), the Incentives and Compensation Committee of the Company (the "Committee") has authorized an award to Participant of shares of the Company's Common Stock, par value $.01 per share (the "Restricted Stock"). B. Pursuant to the Plan, the Committee has determined that the Restricted Stock to be so awarded shall be issued subject to certain conditions and restrictions, which conditions and restrictions are set forth in this Agreement. THEREFORE, in consideration of the covenants herein set forth, the parties agree as follows: 1. Award; Acceptance of Award. Subject to the terms and conditions contained herein, the Company shall issue to Participant, as an award pursuant to the Plan and without payment by Participant of any consideration therefor, ______ shares of Restricted Stock, and Participant hereby accepts such award. 2. Forfeiture of Restricted Stock Upon Termination of Employment. In the event that Participant ceases to be a full-time employee of the Company or any corporation a majority of the voting stock of which is owned directly or indirectly by the Company (a "Subsidiary") for any reason whatsoever (including without limitation by reason of the termination of such employment by the Company or a Subsidiary with or without cause, by reason of disability, death or retirement or by reason of Participant leaving the employ of the Company or a Subsidiary voluntarily), then a portion (determined as hereinafter set forth) of the shares of Restricted Stock awarded pursuant to this Agreement shall thereupon automatically, and without further notice, demand, period of time or legal or administrative proceeding, be forfeited and canceled, and all right, title and interest therein of Participant shall terminate and expire, without payment by the Company or any Subsidiary of any consideration therefor and without any liability on the part of the Company or any Subsidiary. Such forfeiture provisions shall apply as follows: 2 (a) If the Participant so ceases to be such an employee on or after___________, ______ (the "Award Date") but prior to that date which occurs one year thereafter (the "First Anniversary Date"), 100% of the total number of shares of Restricted Stock awarded pursuant to this Agreement shall be so forfeited and canceled; (b) If the Participant so ceases to be such an employee on or after the First Anniversary Date but prior to that date which occurs two years after the Award Date (the "Second Anniversary Date"), then 66-2/3% of the total number of shares of Restricted Stock awarded pursuant to this Agreement shall be so forfeited and canceled; (c) If the Participant so ceases to be such an employee on or after the Second Anniversary Date but prior to that date which occurs three years after the Award Date (the "Third Anniversary Date"), then 33-1/3% of the total number of shares of Restricted Stock awarded pursuant to this Agreement shall be so forfeited and canceled; and (d) If the Participant remains a continuous full-time employee of the Company or a Subsidiary until the Third Anniversary Date, then none of the shares of Restricted Stock awarded pursuant to this Agreement shall be forfeited or canceled. For purposes of the foregoing, the Participant shall not lose his or her status as a full-time employee of the Company or a Subsidiary by reason of time away from such employment as a result of authorized vacation, authorized leave of absence, and leave by reason of sickness or disability of not longer than three consecutive months (or such longer period as the Committee may specifically permit, in its sole discretion, in any particular instance upon written request by the Participant to do so). Notwithstanding the foregoing, the Participant may elect to extend the period during which shares of Restricted Stock are subject to forfeiture and cancellation (the "Restriction Period") as follows. If the Participant desires to extend the Restriction Period, the Participant shall deliver to the Company a written request that the Restriction Period be extended for a specified period or until a specified event. Such election shall be subject in each case to the Committee's approval and to such terms as are determined by the Committee, all in its sole discretion. The Committee shall notify the Participant of its approval and such terms as have been determined by the Committee, or of its disapproval (as the case may be), within 30 days of its receipt of the Participant's written request to extend the Restriction Period. Subject to any exceptions adopted by the Committee, each request must generally be made at least twelve months prior to the applicable date, set forth above in this Section 2, upon which shares of Restricted Stock may no longer be forfeited or canceled. 3. Forfeiture Procedures. If, pursuant to Sections 2 or 7 of this Agreement, any shares of Restricted Stock are forfeited and canceled, such forfeiture and cancellation shall be documented pursuant to the appropriate one of the following procedures: 2 3 (a) If a certificate or certificates representing the number of shares of Restricted Stock so forfeited and canceled are in the possession of the Company pursuant to Section 4 hereof, then the officer of the Company having custody of such certificate shall, forthwith upon the occurrence of the event resulting in such forfeiture and cancellation, transmit such certificates to the Company's transfer agent and registrar (or, if the Company has no such transfer agent or registrar, then to the appropriate officer of the Company) with information as to the number of shares so forfeited and canceled and, if the certificates evidence a number of shares greater than the amount to be so canceled, with instructions that a certificate representing the shares not so canceled be issued in the name of the Participant; and (b) If, pursuant to the provisions of Sections 2 or 7 of this Agreement, any shares of Restricted Stock are forfeited and canceled and the Company does not have in its possession a certificate or certificates representing the shares so forfeited and canceled, then the Participant shall, upon written demand from the Company, furnish to the Company a certificate duly endorsed and assigned to the Company representing the number of shares of Restricted Stock so forfeited and canceled and, upon its receipt thereof, the Company shall follow the procedures indicated in the preceding paragraph. The Participant agrees to provide the Company, upon its request therefor, with one or more stock assignments separate from certificate, executed by the Participant without completing the information as to share amount transferred or name of transferee, and with such other and further instruments of assignment or other documents which may be reasonably required in order to implement the forfeiture and cancellation provisions of Sections 2 and 7 of this Agreement. 4. Issuance of Restricted Stock; Retention of Certificate by Company. Within a reasonable time after the execution of this Agreement by the Company and the Participant, the Company shall issue, in the name of the Participant as the registered holder thereof, certificates representing, in the aggregate, the number of shares of Restricted Stock awarded pursuant to Section 1 hereof. At the time of such issuance and at all times thereafter, the Company shall deliver to Participant, upon the Participant's request, one or more certificates (in such denominations as the Participant may direct) representing in the aggregate a number of shares of Common Stock which does not at any time exceed the number of shares not subject to forfeiture and cancellation under Section 2 hereof. Certificates representing the remaining shares of Restricted Stock awarded hereunder (which shares are subject to possible forfeiture and cancellation pursuant to Section 2 hereof) shall be retained in the custody of the Secretary or any Assistant Secretary of the Company (or any other officer of the Company designated by the Board of Directors of the Company) for the purpose of implementing the forfeiture and cancellation provisions of this Agreement. 5. Stock Splits, Stock Dividends, Mergers and Reorganizations. If, at any time or from time to time when there are shares of Restricted Stock subject to forfeiture and cancellation under Section 2 hereof: 3 4 (a) There is any stock dividend or liquidating dividend of cash and/or property, stock split or other change in the character or amount of any of the outstanding securities of the Company; or (b) There is any consolidation, merger or sale of all, or substantially all, of the assets of the Company; then, in such event, any and all new, substituted or additional securities or other property to which the Participant is entitled by reason of his or her ownership of the shares of Restricted Stock which are so subject to forfeiture and cancellation shall be immediately and similarly subject to such forfeiture and shall be included in the words and treated as "Restricted Stock" for all purposes of such forfeiture provisions and all other terms and conditions hereof with the same force and effect as the original shares of Restricted Stock subject to such forfeiture provisions. Notwithstanding the above, upon the dissolution or liquidation of the Company or upon any reorganization, merger or consolidation in which the Company does not survive, the forfeiture and cancellation provisions of Section 2 shall terminate as to any shares of Restricted Stock not previously forfeited and canceled pursuant to such provisions. 6. Indemnification of Company. The Participant hereby agrees to indemnify the Company and to hold the Company harmless from and against any loss, liability, cost or expense, including attorneys' fees and expenses, which the Company may incur or to which the Company may be subject by any reason of or based upon the fact that the Company has custody of any certificates representing Restricted Stock retained in accordance with Section 4 hereof and that such stock, or any right, title or interest therein, may become involved in any legal, administrative or arbitration proceeding. 7. Transfer or Hypothecation of Stock. The Participant agrees that he or she will not transfer, sell, pledge, assign or in any other way hypothecate, alienate or dispose of any shares of Restricted Stock awarded under this Agreement so long as such shares are subject to forfeiture and cancellation under Section 2 hereof. It is agreed that if the Participant does, or attempts to do, or suffers any of such prohibited acts or events specified in the immediately preceding sentence, then forthwith upon the occurrence of such act or event such shares shall be automatically forfeited and canceled, without payment by the Company of any consideration therefor and without any notice, demand, period of time or legal or administrative proceeding. 8. Ownership Rights. Subject only to the provisions of this Agreement, the Participant shall have all of the rights, powers and privileges of an owner of shares of Common Stock, including without limitation the right to vote such shares and to receive non-liquidating cash dividends and non-liquidating distributions thereon, with respect to shares of Restricted Stock awarded hereunder notwithstanding that certificates representing any or all of such shares are retained by the Company pursuant to Section 4 hereof; provided, however, that all such rights shall terminate automatically with respect to any shares forfeited and canceled pursuant to Sections 2 or 7 of this Agreement. 4 5 9. Endorsement on Share Certificates. The Participant agrees that the certificates representing any Restricted Stock subject to the forfeiture and cancellation provisions of Section 2 may have endorsed upon them in a conspicuous manner a legend in substantially the following form: "The voluntary or involuntary transfer or encumbrance of the shares represented by this certificate are restricted by, and such shares are subject to, the provisions of a certain agreement between the company and the registered holder hereof (which agreement, among other things, subjects such shares to possible forfeiture and cancellation), a copy of which is on file at the principal office of the company and will be furnished to the holder of this certificate upon request without charge." When the forfeiture and cancellation provisions of Section 2 hereof expire or terminate as to any of such shares, the Company shall, upon the Participant's request and at no charge to the Participant, exchange the certificates representing the shares that contain the endorsement provided for herein for new certificates representing those of the shares as to which such rights have expired or terminated containing no such endorsement and certificates containing such endorsement representing the balance of the shares as to which such rights have not expired or terminated. 10. No Contract of Employment. The Participant acknowledges and agrees that this Agreement shall not be construed to give Participant any right to be retained in the employ of the Company or any Subsidiary, and that the right and power of the Company or any Subsidiary to dismiss or discharge the Participant (with or without cause) is strictly reserved. The Participant recognizes that, in the event of any such discharge, the forfeiture provisions of Section 2 hereof shall be fully applicable. 11. Tax Withholding. Participant acknowledges that the Company is required, and hereby specifically authorizes the Company, to deduct and withhold from the wages, salary or other income payable by the Company to Participant from time to time, the requisite amounts required to be so deducted and withheld for federal, state or local taxes with respect to the award of Restricted Stock hereunder. Participant specifically authorizes the Company to withhold such amounts from time to time, as required by law, in connection with the termination or expiration of the forfeiture provisions of Section 2 hereof. Participant agrees that the Company may, at its election, require Participant to pay to the Company (for such withholding on behalf of Participant) any amounts required to be so withheld if such amounts are not directly withheld from such wages, salary or other income, and in such event Participant shall forthwith make such payments. 12. Governing Law. This Agreement and the rights and obligations of the parties hereto shall be governed by and construed in accordance with the internal substantive laws of the State of Delaware. 13. Notices. Any notice or other communication required or permitted hereunder shall be sufficiently given only if delivered personally or sent by registered or certified mail, postage prepaid, to the Company at its principal place of business, or to the 5 6 Participant at the address below or any address of Participant appearing on the Company's stock records, or to such other address or addresses as shall be furnished in writing in the foregoing manner by either party to the other party, and shall be deemed to have been given as of the date so personally delivered or two days after the date deposited in the United States mail, as the case may be. IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of the date first above written. TRANSTECHNOLOGY CORPORATION -------------------------------- Name: Title: PARTICIPANT -------------------------------- Name: Address: 6 EX-10.36 4 ex10-36.txt INDEMNIFICATION AGREEMENT 1 EXHIBIT 10.36 Date Name Address Address Dear In order to induce you to serve or continue to serve as an officer or director of TransTechnology Corporation (the "Company"), a Delaware corporation, or one of its subsidiaries, and in consideration of your so serving, the Company hereby agrees to indemnify you according to the terms and conditions set forth below: 1. Indemnification. (a) The Company hereby agrees to indemnify you to the fullest extent permitted by the law of the State of Delaware, as amended from time to time ("Delaware Law"), in connection with any threatened, pending or completed action, suit or proceeding, whether civil, criminal, administrative or investigative (other than an action by or in the right of the Company), to which you were or are a party or to which you were or are threatened to be made a party by reason of the fact that you were or are a director, member of any committee of the board of directors, officer, employee or agent of the Company, or were or are serving at the request of the Company as a director, member of any committee of the board of directors, officer, employee or agent of another corporation, partnership, joint venture, trust, employee benefit plan or other enterprise, or by reason of anything done or not done by you in any such capacity, against any and all reasonable expenses (including fees and expenses of counsel), judgments, fines and amounts paid in settlement actually incurred by you in connection with the investigation, defense, appeal or settlement of any such action, suit or proceeding if you acted in good faith and in a manner you reasonably believed to be in or not opposed to the best interests of the Company, and, with respect to any criminal action or proceeding, had no reasonable cause to believe your conduct was unlawful. (b) The Company hereby agrees to indemnify you to the fullest extent permitted by Delaware Law in connection with any threatened, pending or completed 2 Name Date Page 2 judgment in its favor to which you were or are a party or to which you were or are threatened to be made a party by reason of the fact that you were or are a director, officer, employee or agent of the Company, or were or are serving at the request of the Company as a director, member of any committee of the board of directors, officer, employee or agent of another corporation, partnership, joint venture, trust, employee benefit plan or other enterprise, or by reason of anything done or not done by you in any such capacity, against any and all reasonable expenses (including fees and expenses of counsel) and amounts paid in settlement actually incurred by you in connection with the investigation, defense, appeal or settlement of any such action, suit or proceeding if you acted in good faith and in a manner you reasonably believed to be in or not opposed to the best interests of the Company; provided, however, that no such indemnification shall be made in respect of any claim, issue or matter as to which you shall have been adjudged to be liable to the Company unless and only to the extent that the Court of Chancery or the court in which such suit, action or proceeding was brought shall determine upon application that, despite the adjudication of liability but in view of all the circumstances of the case, you are fairly and reasonably entitled to indemnification for such amounts which the Court of Chancery or such other court shall deem proper. (c) Notwithstanding any other provision of this agreement, to the extent that you are, by reason of your status as a director or officer of the Company, a witness in any action, suit or proceeding, whether civil, criminal, administrative or investigative, you shall be indemnified against all expenses actually and reasonably incurred by you or on your behalf in connection therewith. (d) For purposes hereof, the termination of any action, suit or proceeding by judgement, order, settlement, conviction, or upon a plea of nolo contendere or its equivalent, shall not, of itself, create a presumption that you did not act in good faith and in a manner which you reasonably believed to be in or not opposed to the best interests of the Company, and with respect to any criminal action or proceeding, that you had reasonable cause to believe your conduct was unlawful. (e) No indemnity pursuant to Section 1 shall be paid by the Company on account of any suit in which judgment is rendered against you, as an officer or director, for an accounting of profits made from the purchase or sale by you of securities of the Company pursuant to the provisions of Section 16(b) of the Securities and Exchange Act of 1934 and amendments thereto or similar provisions of any applicable federal, state or local law. (f) Notwithstanding any other provision of this agreement, to the extent that you are successful on the merits or otherwise in the defense of any action, suit or proceeding described in (a) or (b) of Section 1, or in the defense of any 3 Name Date Page 3 claim, issue or matter therein, you shall be indemnified against expenses (including fees and expenses of counsel) reasonably incurred by you in connection therewith. If you are entitled to indemnification under this agreement to only a portion of the amounts actually incurred by you in the investigation, defense, appeal or settlement of any action, suit or proceeding but not for the total amount thereof, the Company shall nevertheless indemnify you for the portion thereof to which you are entitled. (g) Notwithstanding anything else contained herein, (i) the Company shall not be obligated to pay the fees and expenses of any counsel or amounts paid in any settlement unless the Company shall have previously approved such counsel or such settlement, which approval shall not be unreasonably withheld, and (ii) the Company shall not be obligated to approve more than one counsel to represent you and all other officers and directors entitled to indemnification under agreements similar to this agreement in any single or similar action, suit or proceeding in the same jurisdiction, unless representation of all such officers or directors by the same counsel would be inappropriate because of actual or potential differing interests among you and such officers and directors. Any determination as to approval of counsel or of any settlement shall be made by the Company within five days following your written request for such approval. In determining whether to approve any counsel, the Company shall consider only the following factors: (i) the reputation of such counsel for performing quality legal work, (ii) the level of education and experience of such counsel, (iii) the level of expertise of such counsel with respect to the type of action, suit or proceeding involved, and (iv) the existence of any conflict of interest that such counsel may have in connection with such action, suit or proceeding. 2. Method of Payment. (a) Except as otherwise provided in (b) below, you shall, upon making a written request to the Company accompanied by supporting documentation as described below, be entitled to receive promptly (but in no event more than 30 days after the Company's receipt of such written request) from the Company, and the Company agrees to pay to you, by check payable in next day funds, the amount you are entitled to receive from the Company pursuant to Section 1 (the "Indemnified Amounts"). In making any such written request, you shall submit to the Company a schedule setting forth in reasonable detail the amount expended (or incurred and expected to be expended) for each Indemnified Amount, accompanied by a copy of the relevant bill, agreement or other documentation. 4 Name Date Page 4 (b) In the event you are unsuccessful on the merits or otherwise in the defense of any action, suit or proceeding referred to in Section 1, you shall be similarly entitled to receive promptly, but in no event more than 30 days after the Company's receipt of such written request from the Company, upon making a written request to the Company accompanied by supporting documentation described above, payment of Indemnified Amounts, unless a determination is made within the 30 day period referred to above by (a) a majority vote of directors of the Company who were not parties to such action, suit or proceeding even though less than a quorum, (b) a committee of such directors of the Company, designated by a majority vote of such directors, even though less than a quorum, or (c) independent legal counsel (being an attorney or firm of attorneys who shall not have otherwise performed services for the Company within the last five years (other than with respect to matters concerning your rights under this agreement or of other indemnitees under similar indemnity agreements) in a written opinion (which counsel shall be appointed if (a) and (b) are not obtainable) that you have not met the relevant standard for indemnification set forth in Section 1. 3. Advancement of Indemnified Amounts. Indemnified Amounts expended by you or reasonably expected to be expended by you within three months next succeeding a request by you as described below shall be paid by the Company in advance of the final resolution of any suit, action or proceeding (an "Advanced Amount") upon your written request, which shall include a schedule setting forth in reasonable detail the amount expended, or reasonably expected to be expended within the next three months, by you for any Indemnified Amount, accompanied by a copy of the relevant bill, agreement or other documentation. You may make as many requests for an Advanced Amount under this Section as you deem reasonably necessary to cover Indemnified Amounts expended or reasonably expected to be expended, provided that each request shall be at least for the sum of $1,000. You hereby agree to repay all Advanced Amounts to the Company by check payable in next day funds promptly following the final resolution of any action, suit or proceeding to which such Advanced Amounts relate if it is determined that you are not entitled to indemnification with respect thereto pursuant to Section 1. In the event that you are entitled to indemnification pursuant to Section 1, you shall have the right to seek payment for the portion of Indemnified Amounts which is in excess of Advanced Amounts received by you (the "Unadvanced Indemnified Amounts") by following the procedures set forth in Section 2; provided that the schedule of Indemnified Amounts shall in addition set forth each and every Advanced Amount received as of the date of such listing in order to calculate the net Unadvanced Indemnified Amounts. Alternatively, if you are entitled to indemnification pursuant to Section 1 and the total of the Advanced Amounts theretofore received by you exceeds the total amount of Indemnified Amounts, you shall pay the amount of the difference to the Company by a check payable in next day funds promptly upon the determination of the amount of such excess. 5 Name Date Page 5 4. Enforcement of Rights Under this Agreement. The rights to indemnification or advances pursuant to this agreement shall be enforceable by you in any court of competent jurisdiction and your expenses incurred in connection with successfully establishing your right to indemnification or advances, in whole or in part, in any such proceedings shall be paid by the Company. In any such proceeding, the Company shall have the burden of proving by the preponderance of the evidence that you are not entitled to indemnification or advances hereunder. Neither the failure of the Company (including its Board of Directors, independent legal counsel or stockholders) to have made a determination that you are entitled to indemnification or advances in the circumstances nor an actual determination by the Company (including its Board of Directors, independent legal counsel or stockholders) that you are not so entitled shall be a defense to an action or create a presumption that you are not so entitled. 5. Rights to Indemnification Not Exclusive; Subrogation Rights, Etc. The indemnification rights hereunder shall not be deemed exclusive of any other rights to which you may be entitled under any law, agreement, provision of the certificate of incorporation or bylaws of the Company, vote of stockholders or disinterested directors or otherwise, both as to action in your official capacity and as to action in another capacity while holding such office, and shall continue as to you after you have ceased to be a director, officer, employee or agent and shall inure to the benefit of your heirs, executors and administrators. In the event you shall receive payment from any insurance carrier or from the plaintiff in any action, suit or proceeding against you in respect of Indemnified Amounts after payments on account of all or part of such Indemnified Amounts have been made by the Company pursuant hereto, you shall reimburse to the Company the amount, if any, by which the sum of such payment by such insurance carrier or such plaintiff and payments by the Company to you exceeds such Indemnified Amounts; provided that such portions, if any, of any such insurance proceeds that are required to be reimbursed to the insurance carrier under the terms of its insurance policy shall not be deemed to be payments to you hereunder. In addition, upon payment of Indemnified Amounts hereunder, the Company shall be subrogated to your rights (to the extent thereof) against any insurance carrier in respect of such Indemnified Amounts (to the extent permitted under such insurance policies). Such right of subrogation shall be terminated upon receipt by the Company of the amount to be reimbursed by you pursuant to the first sentence of this Section. 6. Successors; Binding Agreement. The Company shall require any successor (whether direct or indirect, by purchase, merger, consolidation or otherwise) to all or substantially all of the business and/or assets of the Company, by agreement in form and substance reasonably satisfactory to you, expressly to assume and agree to perform this agreement in the same manner and to the same extent that the Company would be required to perform if no such succession had taken place. 6 Name Date Page 6 This agreement shall inure to the benefit of and be enforceable by your personal or legal representatives, executors, administrators, successors, heirs, distributees, devisees and legatees. If you should die while any amounts would still be payable to you hereunder if you had continued to live, all such amounts, unless otherwise provided herein, shall be paid in accordance with the terms of this agreement to your devisee, legatee, or other designee, or if there be no such designee, to your estate. 7. Notice. For the purposes of this agreement, notices and all other communications provided for in this agreement shall be in writing and shall be deemed to have been duly given when delivered or mailed by United States registered mail, return receipt requested, postage prepaid, as follows: if to you: if to the Company: TransTechnology Corporation 150 Allen Road Liberty Corner, NJ 07938 Attention: Vice President, Secretary and General Counsel or to such other address as either party may have furnished to the other in writing in accordance herewith, except that notices of change of address shall be effective only upon receipt. 8. Miscellaneous. No provision of this agreement may be modified, waived or discharged unless such waiver, modification or discharge is agreed to in writing signed by you and either the Company's Chairman of the Board, President or another officer of the Company specifically designated by the Board of Directors. No waiver by either party hereto at any time of any breach by the other party hereto of, or compliance with, any condition or provision of this agreement to be performed by such other party shall be deemed a waiver of similar or dissimilar provisions or conditions at the same or at any prior or subsequent time. No agreement or representations, verbal or otherwise, express or implied, with respect to the subject matter hereof have been made by either party which are not set forth expressly in this agreement. This agreement shall be governed by and construed in accordance with Delaware Law, without giving effect to the principles of conflicts of laws thereof. 9. Severability. The invalidity or unenforceability of any provision of this agreement shall not affect the validity or enforceability of any other provision of this agreement, which shall remain in full force and effect. 7 Name Date Page 7 10. Counterparts. This agreement may be executed in one or more counterparts, each of which shall be deemed to be an original but all of which together shall constitute one and the same instrument. 11. Modifications. No change in the Company's certificate of incorporation or by laws or in the Delaware General Corporation Law subsequent to the date of this agreement shall have the effect of limiting or eliminating the indemnification available under this agreement as to any act, omission or capacity for which this agreement provides indemnification at the time of such act, omission or capacity. To the extent that a change in the Delaware General Corporation Law (whether by statute or judicial decision) permits greater indemnification by agreement than would be afforded currently under the Company's certificate of incorporation, by laws and this agreement, it is the intent of the parties hereto that you shall enjoy by this agreement the greater benefits so afforded by such change. If any change in the Delaware General Corporation Law diminishes the power of the Company to indemnify you, such change, except to the extent otherwise required by law to be applied to this agreement, shall have no effect on this agreement or the parties' rights and obligations hereunder. If this letter correctly sets forth our agreement on the subject matter hereof, kindly sign and return to the Secretary of the Company the enclosed copy of this letter, which shall then constitute our agreement on this matter. This agreement is entered into and is effective as of the date first written above. TRANSTECHNOLOGY CORPORATION By: --------------------- Name: Title: Agreed to and accepted this day of , 2 - ---- --------------- ---- - -------------------------- Name EX-13 5 ex13.txt ANNUAL REPORT 1 EXHIBIT 13 ANNUAL REPORT Fiscal Year Ended March 31, 2000 [BREEZE-EASTERN LOGO] [ANDERTON LOGO] [SEEGER LOGO] [BREEZE LOGO] [PALNUT LOGO] [NORCO INC. LOGO] [ELLISON LOGO] [TINNERMAN LOGO] [AEROSPACE RIVET LOGO] [TRUARC LOGO] [TCR CORPORATION LOGO] [INDUSTRIAL RETAINING RINGS LOGO] [LOGO] TRANSTECHNOLOGY CORPORATION engineered products for global partners(TM) 2
NET SALES ($ in Millions) 1996 1997 1998 1999 2000 ----- ----- ----- ----- ----- 158.0 178.7 203.9 228.0 299.3
AFTER TAX INCOME FROM CONTINUING OPERATIONS ($ in Millions) 1996 1997 1998 1999* 2000** ---- ---- ---- ---- ---- 8.5 9.7 12.0 12.3 10.6
* Excluding net non-recurring gain of $2.3 million in 1999 ** Excluding plant consolidation charge of $3.4 million in 2000
DILUTED INCOME PER SHARE FROM CONTINUING OPERATIONS (In Dollars) 1996 1997 1998 1999* 2000** ---- ---- ---- ---- ---- 1.66 1.87 2.11 1.94 1.72
* Excluding net non-recurring gain of $.36 per share in 1999 ** Excluding plant consolidation charge of $.56 per share in 2000
CAPITAL EXPENDITURES ($ in Millions) 1996 1997 1998 1999 2000 ---- ---- ---- ---- ---- 6.5 5.5 8.7 14.8 10.0
TABLE OF CONTENTS 1 SELECTED FINANCIAL DATA 2 LETTER TO SHAREHOLDERS 4 AEROSPACE PRODUCTS GROUP 6 INDUSTRIAL PRODUCTS GROUP 12 FINANCIAL INFORMATION 2000 NET SALES ALLOCATION BY MARKET TYPE [PIE CHART] Distribution 26% Automotive 29% Aerospace 18% Consumer/Durables 6% Industrial Machinery 8% Heavy Truck OEM 13%
2000 NET SALES DOMESTIC VS. INTERNATIONAL OPERATIONS [PIE CHART] International 22% Domestic 78%
2000 NET FASTENER SALES ALLOCATION BY MARKET TYPE [PIE CHART]
Distribution 32% Automotive 37% Aerospace 1% Consumer/Durables 5% Industrial Machinery 9% Heavy Truck OEM 16%
3 SELECTED FINANCIAL DATA The following table provides selected financial data with respect to the consolidated statements of operations of the Company for the fiscal five years ended March 31, 2000, and the consolidated balance sheets of the Company at the end of each such year.
SELECTED FINANCIAL DATA YEARS ENDED MARCH 31, (In thousands, except per share amounts) 2000 1999 1998 1997 1996 Net sales $ 299,252 $ 228,006 $ 203,928 $ 178,684 $ 158,024 --------- --------- --------- --------- --------- Income from continuing operations before income taxes 11,508 24,294 20,153 16,620 14,300 Provision for income taxes 4,373 9,704 8,162 6,898 5,792 --------- --------- --------- --------- --------- Income from continuing operations 7,135 14,590 11,991 9,722 8,508 Loss from discontinued operations -- -- (924) (934) (1,134) --------- --------- --------- --------- --------- Income before extraordinary charge 7,135 14,590 11,067 8,788 7,374 Extraordinary charge for refinancing of debt (541) (781) -- -- -- --------- --------- --------- --------- --------- Net income $ 6,594 $ 13,809 $ 11,067 $ 8,788 $ 7,374 --------- --------- --------- --------- --------- Earnings (loss) per share: Basic: Income from continuing operations $ 1.16 $ 2.33 $ 2.17 $ 1.92 $ 1.67 Loss from discontinued operations -- -- (0.17) (0.18) (0.22) Extraordinary charge for refinancing of debt (0.09) (0.12) -- -- -- --------- --------- --------- --------- --------- Net income per share $ 1.07 $ 2.21 $ 2.00 $ 1.74 $ 1.45 --------- --------- --------- --------- --------- Diluted: Income from continuing operations $ 1.16 $ 2.30 $ 2.11 $ 1.87 $ 1.66 Loss from discontinued operations -- -- (0.16) (0.18) (0.22) Extraordinary charge for refinancing of debt (0.09) (0.12) -- -- -- --------- --------- --------- --------- --------- Net income per share $ 1.07 $ 2.18 $ 1.95 $ 1.69 $ 1.44 --------- --------- --------- --------- --------- Dividends declared and paid per share $ 0.26 $ 0.26 $ 0.26 $ 0.26 $ 0.26 --------- --------- --------- --------- --------- Total assets $ 482,755 $ 279,720 $ 236,073 $ 199,136 $ 199,367 Long-term debt $ 194,759 $ 102,463 $ 51,350 $ 67,516 $ 72,565 Stockholders' equity $ 128,883 $ 123,710 $ 115,832 $ 77,444 $ 72,470 Book value per share $ 20.97 $ 20.25 $ 18.47 $ 15.40 $ 14.21 Shares outstanding at year-end 6,145 6,108 6,272 5,028 5,099 --------- --------- --------- --------- ---------
MARKET AND DIVIDEND DATA
MARKET PRICE QUARTER ENDED HIGH LOW DIVIDENDS - -------------------------------------------------------------------------------- June 28, 1998 $ 30-5/8 $ 25-9/16 $ .065 September 26, 1998 27-1/8 20-1/4 .065 December 27, 1998 23-11/16 18-9/16 .065 March 31, 1999 20-3/4 16-1/2 .065 - -------------------------------------------------------------------------------- June 27, 1999 20-7/16 16-15/16 .065 September 26, 1999 19-3/4 11-5/8 .065 December 26, 1999 12-5/16 8-1/8 .065 March 31, 2000 15-3/16 10-1/2 .065 - --------------------------------------------------------------------------------
2000 ANNUAL REPORT 1 4 [PICTURE] During the fiscal year that ended March 31, 2000 our company made two strategic acquisitions that have increased our focus on our niche businesses and laid the foundation for stronger, more rapid growth in shareholder value. The Tinnerman assembly fastener business and the Ellison retaining ring business will further extend our global leadership position in each of those product lines as well as provide us the opportunity to increase their growth and profitability. Primarily as a result of these acquisitions, sales increased 31% in the fiscal year, although after tax income from operations decreased 14% and net income, after the recognition of special charges and an extraordinary item, decreased 52%. Our results for fiscal 2000 were mixed, with both successes and disappointments. Our internal operating results and share price were affected by external conditions in the marketplace and the economy. The dramatic decline in the price of shares in small cap industrial companies over the past two years has been a tremendous financial blow not only to our shareholders, but also to those of our entire peer group. Much has been written about the disconnect in valuations between industrials and high-tech and Internet stocks, but knowing that it is a systemic problem shared by many does not make the effects of that disconnect any easier to live with. Fortunately, some of the excesses in the market seem to be correcting themselves, and we hope to see a more rational investment outlook return soon. Operationally, a surprisingly strong British Pound sterling against the Euro and Deutsche mark reduced sales and profits in the European retaining ring product lines that were already weakened by a slowdown in the distribution and machinery markets. The 20% decline in the Euro over the past fifteen months gave a second wallop as we translated our German results into dollars. Also adding to our challenges were higher interest rates on our non-acquisition related borrowings and the short-term amortization of bank loan fees related to our fiscal 2000 acquisitions and refinancing. The downturn of our aerospace fastener unit in fiscal 2000 was the single largest factor contributing to missing our company-wide internal targets for the first time in eight years. The unit's revenues were cut almost in half from 1999 levels and profits were eliminated completely because of several factors, including the loss of its largest customer; a slowdown in the airframe build rate; Boeing's "push-back" upon the fastener industry of over $400 million in "excess" fastener inventories; work stoppages at Boeing; the consolidation of several major distributors, and severe price cutting as manufacturers suddenly found themselves with excess capacity. Our domestic retaining ring business saw further erosion in its market share in the first half of the year, although it began to recoup some of its lost ground in the second half. The July 1999 acquisition of the Ellison business was dilutive in fiscal 2000, in that no operating earnings were realized from the combined Anderton/Ellison business as the consolidation began, yet interest expense on the purchase price and plant consolidation charges were recognized for eight months. The physical consolidation of the Anderton and Ellison factories in the UK is now complete, with more than $4 million of annual operating costs scheduled for elimination beginning in the first quarter of fiscal 2001. FELLOW SHAREHOLDERS 2 TRANSTECHNOLOGY CORPORATION 5 Our other fastener businesses are also developing in an exciting fashion. German and European distribution and industrial markets for retaining rings have recently become very strong, and our domestic unit has begun to regain the market share it lost over the past four years. Of equal importance, the worldwide retaining ring business has now been consolidated under a single management team, with a focused global marketing organization determined to regain market share and enter new markets. Our assembly fastener business is also poised for growth in both revenues and operating income as the combination of Palnut with Tinnerman hits its stride, building on Tinnerman's contribution of $.08 per share in just seven months of fiscal 2000. The highly skilled engineering sales force of Tinnerman fills a long-missing link in our assembly fastener business, and the broad Palnut product line provides Tinnerman's customers a much wider offering of fastening solutions. Our aerospace products group once again outperformed our expectations and posted another record year of sales and profits. Our Norco, Inc. division, acquired in July 1998, has more than doubled its operating profit since it became part of our company, while Breeze-Eastern set a new record for sales and operating profit. Both divisions have strong backlogs and solid prospects for further growth in fiscal 2001 and beyond. As we enter the new fiscal year, your management team is focused on four basic initiatives. First, we want to maximize the value added of our products by focusing on engineered solutions to solve our customers' problems. Second, we want to produce our products to the highest quality standards at the lowest cost by utilizing lean manufacturing techniques. Third, we want to develop a company with an industry-wide, multi-disciplinary approach to e-commerce. And, fourth, we want to concentrate our efforts to pay-down debt further by reducing working capital, liquidating excess assets, and accelerating cash flows. We believe that these four programs, each under the leadership of a senior manager, will provide the impetus and framework for each of our business units and the company as a whole to achieve their potential in fiscal 2001. As I end this eighth year as your chairman and chief executive officer, I would like to thank each of the more than 2,600 TransTechnology employees around the world who work so hard to make this company the success that it is today. The best part of my job is to meet these people in their offices and factories, and to see the pride and excitement that they put into their work. It is their spirit that drives our company forward. I would also like to thank each of the members of our Board of Directors who have provided our management team with advice, support and guidance as we have seen the world change so rapidly around us. And, most importantly, I thank you, the shareholders, who have placed your trust, confidence, and resources in our hands. We appreciate your support, and look forward to continued growth in the future. /s/ Michael J. Berthelot Michael J. Berthelot Chairman, President and Chief Executive Officer 2000 ANNUAL REPORT 3 6 [GRAPHIC OF JETS] 4 TRANSTECHNOLOGY CORPORATION 7 TransTechnology's BREEZE-EASTERN division is the world's leading designer and manufacturer of sophisticated helicopter rescue hoists, cargo winches and cargo hook systems. These complex, highly engineered systems add significantly to the versatility of an aircraft for a relatively small cost. The equipment is used the world over by military and civilian agencies to save lives, complete missions, and transport cargo. Most helicopter manufacturers today, including Agusta, Bell, Boeing, Eurocopter, MD Helicopters, Sikorsky and GKN-Westland specify Breeze-Eastern's systems as standard equipment on their aircraft because of Breeze-Eastern's record for performance, safety, reliability, durability, and service. Innovation and new product development remain an important focus at Breeze-Eastern, one reason why its products will be found on the new V-22 Osprey tiltrotor vertical take-off and landing aircraft for the U.S. Marine Corps, the Sikorsky UH-60Q Blackhawk MEDEVAC helicopter for the U.S. Army, the EHI Cormorant Search and Rescue helicopter for the Canadian National Defense Forces and the Agusta A-109 (Power) utility helicopter. Breeze-Eastern also designs and manufactures handling systems for weapons' platforms and motion control actuation systems for civilian and military aircraft. NORCO, INC., acquired in 1998, is the global leader in the design and manufacture of mechanical components and systems such as hold open rods, quick connect/disconnect locking systems, helicopter blade restraint systems, latch assemblies, safety locks, and application-specific mechanical systems. Its power transmission line of products include rollnuts, rollnut longspan assemblies, ball reversers, ball oscillators, FlenNut assemblies and other application-specific linear motion assemblies. During the company's successful history of servicing the commercial and defense aviation industry, Norco has forged special relationships with several original equipment manufacturers. These relationships enable Norco to work in collaboration with its customers not only during the early design stage, but also throughout the life-cycle of each manufacturing program. The Company's aircraft building customers include Airbus, Boeing, Lockheed Martin and Northrop Grumman. Norco also sells to aircraft system suppliers such as BF Goodrich Aerospace Structures (cowlings), Short Brothers plc. (nacelles), and GKN-Westland Aerospace Structures (composite doors on the Airbus A-340, CRJ700 and C27J). AEROSPACE PRODUCTS GROUP 2000 ANNUAL REPORT 5 8 [GRAPHIC OF ENGINEERED RINGS] 9 TransTechnology Engineered Rings Under the newly created banner of 'TransTechnology Engineered Rings' ("TTER"), TransTechnology Corporation has brought together the world's leading brand names in rings - TRUARC(R), SEEGER(R), ANDERTON(R), ELLISON(R) and TINNERMAN(R). The world leader in this product, TTER combines know-how and experience based on a 75-year heritage. With five manufacturing sites on three continents, TransTechnology has the enviable position of being the only global manufacturer of this highly engineered product. TTER manufactures the total range of retaining and snap rings conforming to all ANSI, military, and international standards, as well as our customers' own exacting specifications, all of which are QS 9000 or ISO 9000 based. Predominantly used in automotive and off-road applications such as vehicle transmissions, drive trains, steering, brakes and turbochargers, the product is also widely used in general industrial and marine applications, household goods, computers and printers. In fact, TTER rings can be found in any application where axial retention of mechanical parts on shafts or in bores is required. Our ring products are marketed directly to OEM's or through a network of distributors worldwide, as well as through TransTechnology sales offices in Mexico, Paris, France and Barcelona, Spain. The newly created Automotive Division based at the Southfield Sales and Advanced Engineering Office provides full design and engineering support to the US automobile industry. INDUSTRIAL PRODUCTS GROUP 2000 ANNUAL REPORT 7 10 [GRAPHIC OF ENGINEERED PRODUCTS] 8 TRANSTECHNOLOGY CORPORATION 11 TransTechnology Engineered Products TransTechnology, through its BREEZE INDUSTRIAL PRODUCTS and PEBRA divisions, manufactures the most comprehensive line of worm-drive and T-Bolt / V-Band clamps in the world. BREEZE(R) and PEBRA stainless steel clamps are well known for their quality and engineering and are both ISO 9000 certified. BREEZE(R) T-Bolt and Constant-Torque(R) clamp products are used in diesel engine, heavy truck, marine and off-road equipment applications throughout the world. BREEZE(R) is a certified supplier to Caterpillar, Paccar, and many other heavy equipment manufacturers. BREEZE(R) "Aero-Seal(R)", "Euro-Seal(R)" and "Power-Seal(R)" clamps are supplied through major distributors to the industrial, hardware, automotive, marine and retail markets for use in repair, maintenance and overhaul applications, and are used by many manufacturers of industrial and consumer products. PEBRA brand clamps are supplied to both the European heavy truck and equipment markets and to industrial product manufacturers. PEBRA also manufactures quality hose rings used in turbocharger applications, a new product line introduced this year. TCR CORPORATION ("TCR") designs and manufactures sophisticated specialty industrial components. Combining its expertise in cold forging and machining technologies with QS 9000 quality standards, TCR provides its broad customer base with innovative products and takes pride in creating cost effective solutions to complex manufacturing problems. TCR components are used by a wide range of industries worldwide, with key market groups including the automotive, small engine, hydraulic valve and other specialty manufacturers. TransTechnology's AEROSPACE RIVET MANUFACTURERS CORPORATION ("ARM") produces cold-headed premium solid and tubular rivets, spacers, threaded bolts and screws, and specialty engineered fasteners for the aerospace industry. ARM is licensed by Boeing to produce the patented Hi-Kote(TM) coated rivet, which eliminates the need for wet sealant installation. ARM's modern facility includes state-of-the-art manufacturing, heat treat, and chemical processing equipment. All of ARM's products meet quality approvals for ISO-9002, Boeing D1-9000 or MIL-I-45208 specifications. INDUSTRIAL PRODUCTS GROUP 2000 ANNUAL REPORT 9 12 [GRAPHIC OF ENGINEERED COMPONENTS] 13 TransTechnology Engineered Components TransTechnology Engineered Components ("TTEC") supplies metal and plastic fastening components for automotive, commercial, industrial and distribution markets under the trademarks TINNERMAN(R) and PALNUT(R). With four manufacturing plants in the USA and Canada, our primary products include spring steel fasteners, plastic fastening components, headlamp adjusting devices, and customized metal stampings. TransTechnology has integrated the latest tooling and metal forming technologies with state-of-the-art assembly equipment to ensure the manufacture of superior fasteners. Our design knowledge, engineering expertise, prototype development and QS-9000 capabilities assure that customers consistently receive a well-crafted, well-tested component. In December 1999, TTEC relocated its Detroit sales offices to new facilities in Southfield, Michigan which will include on-premise design and prototype capability. The combination of the TINNERMAN(R) and PALNUT(R) product lines brings our customers 90 years of proven experience in fastener design, more than anyone else in the business. With over 15,000 standard and special purpose fasteners, TTEC can provide solutions to the most difficult manufacturing and assembly problems. For unique applications, TTEC has custom design capabilities which provide the added assurance that our customers receive the right part from the start, saving valuable time and money. TTEC is committed to maintaining a world-class, technology-driven operation to meet the needs of all its customers. INDUSTRIAL PRODUCTS GROUP 2000 ANNUAL REPORT 11 14 Independent Auditors' Report To the Stockholders and the Board of Directors of TransTechnology Corporation: We have audited the accompanying consolidated balance sheets of TransTechnology Corporation and subsidiaries as of March 31, 2000 and 1999, and the related statements of consolidated operations, stockholders' equity and cash flows for each of the three years in the period ended March 31, 2000. These financial statements are the responsibility of the Company's management. Our responsibility is to express an opinion on these financial statements based on our audits. We conducted our audits in accordance with auditing standards generally accepted in the United States of America. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audits provide a reasonable basis for our opinion. In our opinion, such consolidated financial statements present fairly, in all material respects, the financial position of TransTechnology Corporation and subsidiaries at March 31, 2000 and 1999, and the results of their operations and their cash flows for each of the three years in the period ended March 31, 2000 in conformity with accounting principles generally accepted in the United States of America. /s/ Deloitte & Touche LLP Parsippany, New Jersey May 18, 2000 12 TRANSTECHNOLOGY CORPORATION 15 CONSOLIDATED BALANCE SHEETS (In thousands, except share data)
MARCH 31, ASSETS 2000 1999 --------- --------- CURRENT ASSETS: Cash and cash equivalents $ 3,350 $ 2,255 Accounts receivable (net of allowance for doubtful accounts of $1,129 and $240 in 2000 and 1999, respectively) 61,819 36,323 Inventories 65,744 58,668 Prepaid expenses and other current assets 1,942 2,360 Deferred income taxes 1,872 1,295 --------- --------- Total current assets 134,727 100,901 --------- --------- PROPERTY: Land 14,320 12,564 Buildings 29,933 21,654 Machinery and equipment 93,725 67,381 Furniture and fixtures 11,587 9,075 Leasehold improvements 3,503 727 --------- --------- Total 153,068 111,401 Less accumulated depreciation and amortization 47,048 35,017 --------- --------- Property - net 106,020 76,384 --------- --------- OTHER ASSETS: Notes receivable 3,455 3,694 Costs in excess of net assets of acquired businesses (net of accumulated amortization of $10,933 and $7,002 in 2000 and 1999, respectively) 192,115 76,731 Patents and trademarks (net of accumulated amortization of $1,334 and $756 in 2000 and 1999, respectively) 20,809 3,696 Deferred income taxes 9,987 6,757 Other 15,642 11,557 --------- --------- Total other assets 242,008 102,435 --------- --------- TOTAL $ 482,755 $ 279,720 ========= ========= LIABILITIES AND STOCKHOLDERS' EQUITY CURRENT LIABILITIES: Current portion of long-term debt $ 82,585 $ 46 Accounts payable - trade 25,550 14,247 Accrued compensation 10,359 6,161 Accrued income taxes 5,799 765 Other current liabilities 8,672 8,588 --------- --------- Total current liabilities 132,965 29,807 --------- --------- LONG-TERM DEBT PAYABLE TO BANKS AND OTHERS 194,759 102,463 --------- --------- DEFERRED INCOME TAXES 11,873 11,949 --------- --------- OTHER LONG-TERM LIABILITIES 14,275 11,791 --------- --------- COMMITMENTS AND CONTINGENCIES (Notes 11 and 12) STOCKHOLDERS' EQUITY: Preferred stock - authorized, 300,000 shares; none issued Common stock - authorized, 14,700,000 shares of $.01 par value; issued, 6,691,232 and 6,653,855 shares in 2000 and 1999, respectively 67 67 Additional paid-in capital 77,587 77,246 Retained earnings 63,722 58,721 Accumulated other comprehensive loss (3,157) (3,021) Unearned compensation (267) (239) --------- --------- 137,952 132,774 Less treasury stock, at cost - 546,394 and 546,213 shares in 2000 and 1999, respectively (9,069) (9,064) --------- --------- Total stockholders' equity 128,883 123,710 --------- --------- TOTAL $ 482,755 $ 279,720 ========= =========
See notes to consolidated financial statements. 2000 ANNUAL REPORT 13 16 STATEMENTS OF CONSOLIDATED OPERATIONS (In thousands, except share data)
YEARS ENDED MARCH 31, 2000 1999 1998 ----------- ----------- ----------- Net sales $ 299,252 $ 228,006 $ 203,928 Cost of sales 209,949 156,090 137,820 Plant consolidation charge 991 -- -- ----------- ----------- ----------- Gross profit 88,312 71,916 66,108 General, administrative and selling expenses 53,447 46,552 40,187 Interest expense 19,945 6,938 7,228 Interest income (518) (412) (1,020) Other income - net (624) (6,362) (440) Allowance on notes receivable -- 906 -- Provision for plant consolidation 4,554 -- -- ----------- ----------- ----------- Income from continuing operations before income taxes 11,508 24,294 20,153 Provision for income taxes 4,373 9,704 8,162 ----------- ----------- ----------- Income from continuing operations 7,135 14,590 11,991 Loss from disposal of discontinued operations (net of applicable tax benefit of $1,301) -- -- (924) ----------- ----------- ----------- Income before extraordinary charge 7,135 14,590 11,067 Extraordinary charge for refinancing of debt (net of applicable tax benefits of $339 and $532 for 2000 and 1999, respectively) (541) (781) -- ----------- ----------- ----------- Net income $ 6,594 $ 13,809 $ 11,067 ----------- ----------- ----------- Earnings (loss) per share: Basic: Income from continuing operations $ 1.16 $ 2.33 $ 2.17 Loss from disposal of discontinued operations -- -- (0.17) Extraordinary charge for refinancing of debt (0.09) (0.12) -- ----------- ----------- ----------- Net income per share $ 1.07 $ 2.21 $ 2.00 ----------- ----------- ----------- Diluted: Income from continuing operations $ 1.16 $ 2.30 $ 2.11 Loss from disposal of discontinued operations -- -- (0.16) Extraordinary charge for refinancing of debt (0.09) (0.12) -- ----------- ----------- ----------- Net income per share $ 1.07 $ 2.18 $ 1.95 ----------- ----------- ----------- Weighted - average basic shares outstanding 6,139,000 6,249,000 5,520,000 Weighted - average diluted shares outstanding 6,150,000 6,341,000 5,689,000
See notes to consolidated financial statements. 14 TRANSTECHNOLOGY CORPORATION 17 STATEMENTS OF CONSOLIDATED CASH FLOWS (In thousands)
YEARS ENDED MARCH 31, 2000 1999 1998 --------- --------- --------- Cash flows from operating activities: Net income $ 6,594 $ 13,809 $ 11,067 Adjustments to reconcile net income to net cash provided by operating activities: Extraordinary charge for refinancing of debt 541 781 -- Gain on sale of marketable securities -- (1,082) -- Depreciation and amortization 17,617 10,802 9,054 Write-down of assets - plant consolidation 1,762 -- -- Provision for losses on accounts and notes receivable 199 803 537 Loss (gain) on sale or disposal of fixed assets and discontinued businesses 10 (28) 1,087 Changes in assets and liabilities - excluding the effects of acquisitions: (Increase) decrease in accounts receivable (9,923) 1,073 (2,732) Decrease (increase) in inventories 4,089 2,266 (2,685) (Increase) decrease in other assets (1,472) 1,888 (3,330) Increase (decrease) in accounts payable 7,369 (2,604) 1,770 Increase (decrease) in accrued compensation 2,548 (3,603) 2,989 Increase (decrease) in income taxes payable 3,924 686 (1,300) (Decrease) increase in other liabilities (6,550) (6,115) 2,751 ========= ========= ========= Net cash provided by operating activities 26,708 18,676 19,208 ========= ========= ========= Cash flows from investing activities: Business acquisitions (187,086) (43,901) (34,774) Capital expenditures (10,037) (14,759) (8,745) Proceeds from sale of fixed assets and discontinued businesses 534 502 2,144 Proceeds from sale of marketable securities 3 2,024 -- Decrease in notes and other receivables 782 3,128 1,954 --------- --------- --------- Net cash used in investing activities (195,804) (53,006) (39,421) --------- --------- --------- Cash flows from financing activities: Proceeds from long-term borrowings 344,147 159,089 68,400 Payments on long-term debt (166,904) (119,942) (78,336) Debt issue costs (5,679) -- -- Exercise of stock options and other 310 1,157 2,213 Stock offering proceeds -- -- 26,908 Proceeds from foreign exchange contracts -- -- 2,036 Treasury stock purchases -- (4,926) -- Dividends paid (1,593) (1,625) (1,467) --------- --------- --------- Net cash provided by financing activities 170,281 33,753 19,754 --------- --------- --------- Effect of exchange rate changes on cash (90) (128) (121) Increase (decrease) in cash and cash equivalents 1,095 (705) (580) Cash and cash equivalents at beginning of year 2,255 2,960 3,540 --------- --------- --------- Cash and cash equivalents at end of year $ 3,350 $ 2,255 $ 2,960 ========= ========= ========= Supplemental information: Interest payments $ 17,959 $ 7,130 $ 7,647 Income tax payments $ 2,218 $ 5,177 $ 5,988 ========= ========= =========
See notes to consolidated financial statements. 2000 ANNUAL REPORT 15 18 STATEMENTS OF CONSOLIDATED STOCKHOLDERS' EQUITY (In thousands, except share data)
ACCUMULATED OTHER TOTAL YEARS ENDED ADDITIONAL COMPRE- COMPRE- MARCH 31, 2000, COMMON STOCK TREASURY STOCK PAID-IN RETAINED HENSIVE UNEARNED HENSIVE 1999 AND 1998 SHARES AMOUNT SHARES AMOUNT CAPITAL EARNINGS LOSS COMPENSATION INCOME - ------------------------------------------------------------------------------------------------------------------------------------ BALANCE, MARCH 31, 1997 5,316,971 $ 53 (289,237) $(3,939) $46,745 $ 36,937 $(2,118) $ (234) Net income -- -- -- -- -- 11,067 -- $11,067 Other comprehensive income: Currency translation adjustment (net of taxes of $331) -- -- -- -- -- -- (487) -- (487) Unrealized investment holding gains (net of taxes of $75) -- -- -- -- -- -- 110 -- 110 Cash dividends ($.26 per share) -- -- -- -- -- (1,467) -- -- -- Public sale of common stock, net of expenses 1,063,900 11 -- -- 26,897 -- -- -- -- Issuance of stock under stock option plan 178,416 2 -- -- 2,211 -- -- -- -- Issuance of stock under bonus plan 4,792 -- (2,817) (60) 106 -- -- (2) -- --------- ------- -------- ------- ------- -------- ------- -------- ------- BALANCE, MARCH 31, 1998 6,564,079 66 (292,054) (3,999) 75,959 46,537 (2,495) (236) $10,690 ======= Net income -- -- -- -- -- 13,809 -- -- $13,809 Other comprehensive income: Currency translation adjustment(net of taxes of $467) -- -- -- -- -- -- (701) -- (701) Unrealized investment holding gains (net of taxes of $117) -- -- -- -- -- -- 175 -- 175 Cash dividends ($.26 per share) -- -- -- -- -- (1,625) -- -- -- Purchase of treasury stock (248,700) (4,926) -- -- -- -- -- Issuance of stock under stock option plan 84,714 1 -- -- 1,156 -- -- -- -- Issuance of stock under bonus plan 5,062 -- (5,459) (139) 131 -- -- (3) -- --------- ------- -------- ------- ------- -------- ------- -------- ------- BALANCE, MARCH 31, 1999 6,653,855 67 (546,213) (9,064) 77,246 58,721 (3,021) (239) $13,283 ======= Net income -- -- -- -- -- 6,594 -- -- $ 6,594 Other comprehensive income: Currency translation adjustment (net of taxes of $80) -- -- -- -- -- -- (131) -- (131) Unrealized investment holding losses (net of taxes of $3) -- -- -- -- -- -- (5) -- (5) Cash dividends ($.26 per share) -- -- -- -- -- (1,593) -- -- -- Issuance of stock under stock option plan 29,200 -- -- -- 189 -- -- -- -- Issuance of stock under bonus plan 8,177 -- (181) (5) 152 -- -- (28) -- --------- ------- -------- ------- ------- -------- ------- -------- ------- BALANCE, MARCH 31, 2000 6,691,232 $ 67 (546,394) $(9,069) $77,587 $ 63,722 $(3,157) $ (267) $ 6,458 ========= ======= ======== ======= ======= ======== ======= ======== =======
See notes to consolidated financial statements. 16 TRANSTECHNOLOGY CORPORATION 19 NOTES TO CONSOLIDATED FINANCIAL STATEMENTS 1. SUMMARY OF ACCOUNTING PRINCIPLES BUSINESS - The fiscal year for TransTechnology Corporation (the "Company") ends on March 31. Accordingly, all references to years in the Notes to Consolidated Financial Statements refer to the fiscal year ended March 31 of the indicated year unless otherwise specified. The Company develops, manufactures and sells a wide range of products in two industry segments, Specialty Fastener Products and Aerospace Products. The Company has manufacturing facilities located in the United States, Canada, Germany, the United Kingdom and Brazil. The Specialty Fastener Products Segment produces highly engineered precision metal retaining rings, gear driven band fasteners, circlips, custom cold-formed parts, head light adjusters, rivets and other threaded and non-threaded assembly fasteners primarily for the automotive, heavy truck, industrial, aerospace and consumer/durables markets and accounted for approximately 80% of the Company's consolidated 2000 net sales. Through its Aerospace Products Segment, the Company develops, manufactures, sells and services a complete line of sophisticated lifting and restraining products, principally performance critical helicopter rescue hoist and cargo hook systems, winches and hoists for aircraft and weapons systems and aircraft engine compartment hold open rods, actuators and other motion control devices. This segment accounted for approximately 20% of the Company's consolidated 2000 net sales. USE OF ESTIMATES - The preparation of consolidated financial statements in conformity with generally accepted accounting principles requires management to make estimates and assumptions that affect the amounts reported in its consolidated financial statements and accompanying notes. Actual results could differ from those estimates. PRINCIPLES OF CONSOLIDATION - The accompanying consolidated financial statements include the accounts of the Company and its subsidiaries, all of which, except one subsidiary in Spain, are wholly-owned. Intercompany balances and transactions are eliminated in consolidation. Investments in less than 20% owned companies are accounted for by the cost method. REVENUE RECOGNITION - Sales and cost of sales are recorded when title passes to customers which is generally at the time products are shipped. All of the Company's contracts are firm fixed-price. Accounts receivable from the United States Government represent billed receivables and substantially all amounts are expected to be collected within one year. Losses on contracts are recorded as they are identified. CASH AND CASH EQUIVALENTS - The Company considers all highly liquid investments with a maturity at date of acquisition of three months or less to be cash equivalents. INVENTORIES - Inventories are stated at the lower of cost or market. Cost is determined using the first-in, first-out method. Cost includes material, labor and manufacturing overhead costs. PROPERTY AND RELATED DEPRECIATION AND AMORTIZATION - Property is recorded at cost. Provisions for depreciation are made on a straight-line basis over the estimated useful lives of depreciable assets ranging from three to thirty years. Amortization of leasehold improvements is computed on a straight-line basis over the shorter of the estimated useful lives of the improvements or the terms of the leases. The Company reviews property and equipment and assets held for sale for impairment whenever events or changes in circumstances indicate that the carrying amount of an asset may not be recoverable. It has been determined that no impairment loss needs to be recognized for such assets. COSTS IN EXCESS OF NET ASSETS OF ACQUIRED BUSINESSES - The difference between the purchase price and the fair value of the net assets of acquired businesses is included in the accompanying Consolidated Balance Sheets under the caption "Costs in excess of net assets of acquired businesses" and is being amortized over 40 years. The Company has determined that there is no impairment in value, since projected future cash flows on an undiscounted basis, through the period such costs in excess of net assets of acquired businesses are being amortized, are in excess of the recorded asset amount. PATENTS AND TRADEMARKS - Patents are amortized on a straight-line basis over their remaining lives not to exceed 20 years. Trademarks are amortized on a straight-line basis over 40 years. EARNINGS PER SHARE ("EPS") - The computation of basic earnings per share is based on the weighted-average number of common shares outstanding. The computation of diluted earnings per share assumes the foregoing and, in addition, the exercise of all dilutive stock options using the treasury stock method. The components of the denominator for basic earnings per common share and diluted earnings per common share are reconciled as follows:
2000 1999 1998 Basic earnings per common share: Weighted-average common shares outstanding 6,139,000 6,249,000 5,520,000 --------- --------- --------- Diluted earnings per common share: Weighted-average common shares outstanding 6,139,000 6,249,000 5,520,000 Stock options 11,000 92,000 169,000 --------- --------- --------- Denominator for diluted earnings per common share 6,150,000 6,341,000 5,689,000 --------- --------- ---------
2000 ANNUAL REPORT 17 20 Options to purchase 288,759 shares of common stock at prices between $15.13 and $30.13 were outstanding during 2000 but were not included in the computation of diluted EPS because the options' exercise prices were greater than the average market price of the common shares. Similarly, during 1999 options to purchase 169,774 shares of common stock at prices between $22.94 and $27.88 were outstanding but were not included in the computation of EPS. During 1998, all options to purchase common stock were included in the computation of EPS. RESEARCH, DEVELOPMENT AND ENGINEERING COSTS - Research and development costs and engineering costs, which are charged to expense when incurred, amounted to $2.0 million, $2.4 million and $2.1 million in 2000, 1999 and 1998, respectively. Included in these amounts were expenditures of $1.3 million, $1.2 million and $1.1 million in 2000, 1999 and 1998, respectively, which represent costs related to research and development activities. FOREIGN CURRENCY TRANSLATION - The assets and liabilities of the Company's international operations have been translated into U.S. dollars at year-end exchange rates, with resulting translation gains and losses accumulated as a separate component of Accumulated other comprehensive loss. Income and expense items are converted into U.S. dollars at average rates of exchange prevailing during the year. The Company treated its operation in Brazil as highly inflationary until the end of the third quarter of fiscal 1999. Effective December 28, 1998, the Brazilian operation ceased to be considered highly inflationary by the Company and the functional currency was changed from the U.S. dollar to the Brazilian real. INCOME TAXES - Deferred tax assets and liabilities are recognized for the future tax consequences attributable to differences between the financial statement carrying amounts of assets and liabilities and their respective tax bases. INVESTMENTS - On March 1, 1994, the Company received 465,000 shares of Mace Security International common stock, valued at $3.4 million, as partial consideration for the sale of a division. In March 1997, the Company recorded a $2.6 million pretax charge to continuing operations to write-down the carrying value of these shares to their current market value as the decline in value of these shares was determined to be other than temporary. During fiscal 1999, the Company sold all of these shares for $2.0 million and realized a pretax gain of $1.1 million. FINANCIAL INSTRUMENTS - The Company does not hold or issue financial instruments for trading purposes. Amounts to be paid or received under interest rate swap agreements are recognized as increases or reductions in interest expense in the periods in which they accrue. The Company enters into off-balance-sheet forward foreign exchange instruments in order to hedge certain intercompany financing denominated in foreign currencies, accounts receivable denominated in foreign currencies, a percentage of projected sales denominated in foreign currencies, and projected foreign currency intercompany purchases. Gains and losses on the financing transactions are included in other income - net. Gains and losses on forward foreign exchange instruments that hedge specific third party transactions are included in the cost or carrying value of the underlying transaction. Gains and losses on instruments that are hedges of projected third party transactions are included in current period income. NEW ACCOUNTING STANDARDS - In June 1998, Statement of Financial Accounting Standards ("SFAS") No. 133, Accounting for Derivative Instruments and Hedging Activities was issued and, as amended by SFAS No. 137, Accounting for Derivative Instruments and Hedging Activities - Deferral of the Effective Date of SFAS Statement No. 133 in June 1999, is effective for the Company for its fiscal year ending March 31, 2002. SFAS No. 133 requires that all derivative instruments be measured at fair value and recognized in the balance sheet as either assets or liabilities. The Company is currently evaluating the impact this pronouncement will have on its consolidated financial statements. RECLASSIFICATIONS - Certain reclassifications have been made to prior years' financial statements to conform to the 2000 presentation. 2. DISCONTINUED OPERATIONS During fiscal 1998 the Company recorded after tax costs of $0.9 million for the disposal of previously discontinued and sold operations. These costs represent adjustments to previous estimates related primarily to legal and environmental matters. Included in Other Assets at both March 31, 2000 and 1999 were assets held for sale related to discontinued operations of $5.2 million. 18 TRANSTECHNOLOGY CORPORATION 21 3. ACQUISITIONS On August 31, 1999, the Company acquired all of the assets and assumed certain liabilities, consisting primarily of trade debts and accrued expenses, of the Engineered Fasteners Division of Eaton Corporation and its Tinnerman product line (collectively referred to as "Tinnerman") for a total purchase price of $173.3 million in cash. Tinnerman had 650 employees and manufactures a wide variety of fastening devices for the automotive, business equipment, consumer electronics and home appliance markets. Tinnerman has manufacturing facilities in Brunswick and Massillon, Ohio and Hamilton, Ontario, Canada. On July 19, 1999, the Company acquired all the outstanding capital stock of Ellison Holdings PLC, a privately held company, and its German affiliate Ellison, Roettges & Co. GmbH (collectively referred to as "Ellison") for $13.8 million in cash, a $0.4 million note payable 24 months from the date of acquisition and other contingent consideration. Ellison, headquartered in Glusburn, West Yorkshire, England, manufactures retaining and snap rings as well as lockwashers for the automotive, heavy vehicle and industrial markets. The allocation of purchase price to the assets and liabilities of Ellison is preliminary pending final purchase price adjustments, if any, between the Company and the selling shareholders. As part of the acquisition plan, the Company closed its existing facility in Bingley, UK and consolidated that operation with the Ellison facility. In the quarter ended September 26, 1999, the Company recorded a $4.5 million charge for the consolidation. In the quarter ended March 31, 2000, the Company recorded an additional $0.1 million related to this plant consolidation. The total charge consists of $3.8 million, principally related to the write-down of Anderton's assets no longer being used to estimated realizable values and other costs directly related to the exit of the facility, and approximately $0.8 million for severance and related benefit payments to approximately 100 Anderton employees. At March 31, 2000, the Company had $0.3 million remaining in current liabilities related to these costs. In addition, in the quarter ended March 31, 2000, approximately $1.0 million was charged to cost of sales primarily due to excess overtime incurred to produce parts pending customer approval on first part production lots. On June 29, 1998, the Company acquired all of the outstanding stock of Aerospace Rivet Manufacturers Corporation ("ARM") for $26.2 million in cash, including direct acquisition costs, and other contingent consideration. ARM, located in City of Industry, California, produces rivets and externally threaded fasteners for the aerospace industry. On July 28, 1998, the Company acquired all of the outstanding stock of NORCO, Inc. ("NORCO") for $17.7 million in cash, including direct acquisition costs, and other contingent consideration. NORCO, located in Ridgefield, Connecticut, produces aircraft engine compartment hold open rods, actuators and other motion control devices for the aerospace industry. On April 17, 1997, the Company acquired all of the outstanding stock of TCR Corporation ("TCR") for $32.6 million in cash including direct acquisition costs, and other contingent consideration. TCR, located in Minneapolis, Minnesota, produces cold forged and other externally threaded fasteners and related products for the automotive, heavy vehicle, marine and industrial markets. The following is a summary of the assets acquired and the liabilities assumed (in thousands):
2000 1999 1998 Current assets $ 29,232 $ 12,723 $ 5,862 Long-term assets 174,516 37,944 34,449 Liabilities assumed (16,662) (6,766) (5,537) --------- -------- -------- Cash paid including acquisition costs $ 187,086 $ 43,901 $ 34,774 ========= ======== ========
The following summarizes the Company's pro forma information as if the acquisitions of Tinnerman, Ellison, ARM and NORCO had occurred at the beginning of the periods presented. The pro forma results give effect to the amortization of goodwill and additional depreciation and the effects on interest expense and taxes (in thousands, except per share data):
2000 1999 Net sales $338,747 $345,768 ======== ======== Income from continuing operations $ 7,378 $ 13,064 ======== ======== Net income $ 6,837 $ 12,283 ======== ======== Basic earnings per share $ 1.11 $ 1.97 ======== ======== Diluted earnings per share $ 1.11 $ 1.94 ======== ========
The above pro forma information does not purport to be indicative of the financial results which actually would have occurred had the acquisitions been made at the beginning of the period presented or subsequent to that date. 4. INVENTORIES Inventories at March 31, consisted of the following (in thousands):
2000 1999 Finished goods $24,012 $23,592 Work in process 18,367 11,403 Purchased and manufactured parts 23,365 23,673 ------- ------- Total $65,744 $58,668 ======= =======
2000 ANNUAL REPORT 19 22 5. INCOME TAXES The components of total income (loss) from operations (including continuing and discontinued operations and extraordinary items) before income taxes were (in thousands):
2000 1999 1998 Domestic $ 16,008 $ 23,689 $17,068 Foreign (5,378) (708) 860 -------- -------- ------- Total $ 10,630 $ 22,981 $17,928 -------- -------- -------
The provision for income taxes is summarized below (in thousands):
2000 1999 1998 Currently payable: Federal $ 3,285 $3,771 $4,325 Foreign 1,318 -- 77 State 419 587 808 ------- ------ ------ 5,022 4,358 5,210 Deferred (988) 4,814 1,651 ------- ------ ------ Total $ 4,034 $9,172 $6,861 ======= ====== ======
The provision (benefit) for income taxes is allocated between continuing and discontinued operations and extraordinary items as summarized below (in thousands):
2000 1999 1998 Continuing $ 4,373 $ 9,704 $ 8,162 Discontinued -- -- (1,301) Extraordinary (339) (532) -- ------- ------- ------- Total $ 4,034 $ 9,172 $ 6,861 ======= ======= =======
The consolidated effective tax rates for continuing operations differ from the federal statutory rates as follows (in thousands):
2000 1999 1998 Statutory federal rate 35.0 % 35.0 % 35.0 % State income taxes after federal income tax 5.2 4.9 4.8 Earnings of the foreign sales corporation (9.1) (3.4) (2.4) Amortization of purchase adjustments not deductible for tax purposes 5.2 2.3 1.6 Foreign rate differential 3.2 1.0 -- Other (1.5) 0.2 1.5 ------ ------ ------ Consolidated effective tax rate 38.0% 40.0% 40.5% ====== ====== ======
The following is an analysis of accumulated deferred income taxes (in thousands):
2000 1999 Assets: Current: Employee benefit accruals $ 829 $ 544 Inventory 56 309 Net operating loss carry forward 796 328 Other 191 114 ------- ------- Total current 1,872 1,295 ======= ======= Noncurrent: Employee benefit accruals 666 238 Environmental 583 602 Accrued liabilities 2,046 2,174 Investment -- 617 Net operating loss carryforwards 4,531 1,411 Other 2,161 1,715 ------- ------- Total noncurrent 9,987 6,757 ======= ======= Total assets $11,859 $ 8,052 ======= ======= Liabilities: Property $ 9,858 $11,217 Other 2,015 732 ======= ======= Total liabilities $11,873 $11,949 ======= =======
6. LONG-TERM DEBT PAYABLE TO BANKS AND OTHERS Long-term debt payable to banks and others, including current maturities, at March 31 consisted of the following (in thousands):
2000 1999 Credit agreement - 6.12% $ -- $101,440 Credit agreement - 7.75% -- 400 Credit agreement - 8.67% 154,723 -- Term loan - 8.69% 46,250 -- Bridge loan - 15.44% 75,000 -- Other 1,371 669 -------- -------- 277,344 102,509 Less current maturities 82,585 46 -------- -------- Total $194,759 $102,463 ======== ========
20 TRANSTECHNOLOGY CORPORATION 23 CREDIT AGREEMENT - Effective August 31, 1999, the Company's revolving credit facility (the "Revolver") was amended and increased from $145.0 million to $200.0 million, and additional term debt (the "Term Loan") of $50.0 million and senior subordinated debt (the "Bridge Loan") of $75.0 million were obtained in order to provide the necessary funds for the Tinnerman acquisition. Credit was provided by the same group of lending banks plus several new lending banks. The Revolver and Term Loan have a maturity of five years. The Bridge Loan has an initial maturity of one year, after which time the Bridge Loan automatically converts to a term loan subject to, among other things, an early payment premium and the issuance of stock warrants (as more fully described below). The stock warrants would provide for the lenders to obtain up to ten percent of the shares of the Company's stock (on a fully diluted basis) after August 31, 2000. The Company intends to replace the Bridge Loan before August 31, 2000 with alternative long term subordinated debt under terms more favorable to the Company. The Bridge Loan contains a provision for exit fees of approximately $2.1 million which may be applied to certain refinancing fees. An extraordinary charge for the refinancing of debt, net of tax, in the amount of $0.5 million was incurred for the year ended March 31, 2000, to reflect the write-off of the unamortized debt issue costs of the prior credit agreement. The Company has unused borrowing capacity for both domestic and international operations of $45.3 million as of March 31, 2000, and letters of credit of $4.9 million. The Revolver, Bridge Loan and Term Loan are secured by all of the Company's assets. As of March 31, 2000, the Company had total borrowings of $275.9 million under the amended agreements which have a weighted-average interest rate of 10.48%. The Company had $1.4 million of other borrowings consisting of collateralized borrowing arrangements with fixed interest rates of 3% and 3.75%, and loans on life insurance policies owned by the Company with a fixed interest rate of 5%. Borrowings under the Revolver as of March 31, 2000, were $154.7 million. Interest on the Revolver is tied to the primary bank's prime rate, or at the Company's option, the London Interbank Offered Rate ("LIBOR"), plus a margin that varies depending upon the Company's achievement of certain operating results. As of March 31, 2000, $152.5 million of the Company's outstanding borrowings utilized LIBOR, of which $127.0 million were payable in U.S. Dollars and $7.1 million and $18.4 million were payable in Deutsche marks and Pounds sterling, respectively. Borrowings under the Term Loan as of March 31, 2000, were $46.3 million of which $7.5 million is due within one year, $8.8 million is due in year two, $10.0 million is due in year three, $12.5 million is due in year four, and $7.5 million is due upon maturity in year five. Borrowings under the Bridge Loan as of March 31, 2000, were $75.0 million, all of which is considered to be short term. Interest on the Bridge Loan is based on LIBOR plus a margin which is currently 9.5% and increases in quarterly increments subject to an overall maximum interest rate of 18%. The Bridge Loan matures on August 31, 2000, after which time, unless replaced, it converts automatically to senior subordinated term debt with additional provisions. The major additional provisions of the resulting term debt provide for a warrant escrow agreement that stipulates that the Company shall issue stock warrants to the debt holders for 731,197 shares of the Company's stock exercisable at par value (or $.01) per share, representing ten percent of the common equity of the Company on a fully diluted basis after giving effect to the warrants. Other provisions of the resulting term debt include various repayment premiums during the first seven years of the term, an overall maximum interest rate of 18% and the right of the holders of the Bridge Loan to require the Company to exchange this debt for a class of debt securities which the Company would be required to register for public distribution. The Company intends to replace the Bridge Loan prior to its maturity and, therefore, does not expect to be subject to the provisions of the term debt which would become effective after the Bridge Loan maturity date on August 31, 2000. The credit agreements require the Company to maintain interest rate protection on a minimum of $125.0 million of its variable rate debt. The Company has, accordingly, provided for this protection by means of interest rate swap agreements which have fixed the rate of interest on $50.0 million of debt at a base rate of 5.48% through May 4, 2002, and $75.0 million of debt at a base rate of 6.58% through March 3, 2003. Under the agreement, the base interest rate is added to the applicable interest rate margin to determine the total interest rate in effect. The credit agreement also limits the Company's ability to pay dividends to 25% of net income and restricts annual capital expenditures to $12.0 million through 2001, $13.0 million in 2002, and $15.0 million thereafter, and contains other customary financial covenants. Other - Other long-term debt is comprised principally of collateralized borrowing arrangements with fixed interest rates of 3% and 3.75% and loans on life insurance policies owned by the Company with a fixed interest rate of 5%. Debt maturities (in thousands): 2001 $ 82,585 2002 8,838 2003 10,090 2004 12,594 2005 162,303 Thereafter 934 -------- Total $277,344 ========
2000 ANNUAL REPORT 21 24 7. STOCKHOLDERS' EQUITY AND EMPLOYEE/DIRECTOR STOCK OPTIONS The Company maintains the amended and restated 1992 long-term incentive plan (the "1992 Plan"), the 1998 non-employee directors stock option plan (the "1998 Plan") and the 1999 long-term incentive plan (the "1999 Plan"). Under the terms of the 1992 Plan, 800,000 of the Company's common shares may be granted as stock options or awarded as restricted stock to officers, directors and certain employees of the Company through September 2002. Under the terms of the 1999 plan, 300,000 of the Company's common shares may be granted as stock options or awarded as restricted stock to officers, directors and certain employees of the Company through July 2009. Under both plans, option exercise prices equal the fair market value of the common shares at their grant dates. For grants made prior to May 1999, options expire not later than five years after the date of the grant. Options granted beginning in May 1999 expire not later than 10 years after the date of the grant; options granted to officers and employees, awarded as part of a three-year bonus plan, expire not later than 5 years after the date of the grant. Options granted to directors and to officers and employees with the annual yearly cash bonus vest ratably over three years beginning one year after the date of the grant; options granted to officers and employees awarded as part of a three-year long term bonus plan vest at the end of the three-year plan period. Restricted stock is payable in equivalent number of common shares. The shares are distributable in a single installment and, with respect to officers and employees, restrictions lapse ratably over a three year period from the date of the award, and with respect to directors, the restrictions lapse after one year. Under the terms of the 1998 Plan, non-employee directors are entitled to receive matching options for each share of the Company's common stock which they hold at the end of a 60-day period following initial election as a director, but not to exceed 25,000 shares with the strike price of the option being the fair market value of the shares at their grant dates, and thereafter, for each share of the Company's common stock that they purchase on the open market, with the strike price of the option being the purchase price of the share, up to a maximum of 5,000 options in any twelve month period or 15,000 options over a three year period. Options granted under the 1998 Plan vest on the first anniversary of the grant, provided that, exclusive of the options granted to match shares held at the end of the 60-day period, the optionee may not acquire by exercise of the options more than 5,000 shares in any one year. Options expire not later than five years after the date of the grant. The Company continues to apply the accounting standards set forth in APB No. 25. However, disclosures are required of pro forma net income and earnings per share as if the Company had adopted the accounting provisions of SFAS No. 123. Based on Black-Scholes values, pro forma net income for 2000, 1999 and 1998 would be $6.1 million, $14.0 million and $11.0 million, respectively; pro forma earnings per common share for 2000, 1999 and 1998 would be $1.00, $2.24 and $1.93, respectively. The following table summarizes stock option activity over the past three years under the plan:
WEIGHTED- AVERAGE NUMBER EXERCISE OF SHARES PRICE Outstanding at March 31, 1997 464,214 $ 13.54 Granted 96,000 21.07 Exercised (178,416) 12.41 Canceled or expired (8,000) 15.00 -------- Outstanding at March 31, 1998 373,798 15.63 Granted 181,156 26.92 Exercised (84,714) 13.03 Canceled or expired (32,194) 23.81 -------- Outstanding at March 31, 1999 438,046 17.66 Granted 155,715 18.90 Exercised (29,200) 14.53 Canceled or expired (75,521) 15.47 -------- Outstanding at March 31, 2000 489,040 19.56 ======== Options exercisable at March 31, 1998 201,130 13.87 Options exercisable at March 31, 1999 197,417 14.74 Options exercisable at March 31, 2000 183,829 19.13
In 2000, 1999 and 1998 the Company awarded restricted stock totaling 8,177 shares, 5,062 shares and 4,792 shares, respectively. The weighted-average fair value of this restricted stock was $18.60, $25.33 and $22.14 in 2000, 1999 and 1998, respectively. The expense recorded in 2000, 1999 and 1998 for restricted stock was $124,000, $107,000 and $60,000, respectively. The weighted-average Black-Scholes value per option granted in 2000, 1999 and 1998 was $14.40, $21.59 and $19.75, respectively. The following weighted-average assumptions were used in the Black-Scholes option pricing model for options granted in 2000, 1999 and 1998:
2000 1999 1998 Dividend yield 1.3% 1.4% 1.0% Volatility 25.0% 24.0% 25.0% Risk-free interest rate 5.5% 5.5% 6.0% Expected term of options (in years) 4.0 4.0 4.0
For options outstanding and exercisable at March 31, 2000, the exercise price ranges and average remaining lives were:
OPTIONS OUTSTANDING OPTIONS EXERCISABLE ---------------------------------------------------------- -------------------------------------- RANGE OF NUMBER OUTSTANDING WEIGHTED-AVERAGE WEIGHTED-AVERAGE NUMBER EXERCISABLE WEIGHTED-AVERAGE EXERCISE PRICES AT MARCH 31, 2000 REMAINING LIFE EXERCISE PRICE AT MARCH 31, 2000 EXERCISE PRICE $ 11-15 39,989 1 $12.83 38,084 $12.76 16-21 283,123 3 18.85 102,667 18.46 22-28 165,928 3 27.01 43,078 26.77 ------- ------ ------- ------ 489,040 2 $19.56 183,829 $19.13 ======= ====== ======= ======
22 TRANSTECHNOLOGY CORPORATION 25 8. EMPLOYEE BENEFIT PLANS The Company has three defined contribution plans covering substantially all domestic employees. Contributions are based on certain percentages of an employee's eligible compensation. Expenses related to these plans were $3.0 million, $2.5 million and $2.8 million in 2000, 1999 and 1998, respectively. The Company provides postretirement benefits to union employees at two of the Company's divisions. The Company funds these benefits on a pay-as-you-go basis. In addition, the Company maintains several defined benefit retirement plans for certain employees. Funding policies are based upon local statutes. (In thousands)
POSTRETIREMENT PENSION BENEFITS BENEFITS ------------------------------------------------------------------------------------- YEAR ENDED MARCH 31, YEAR ENDED MARCH 31, ------------------------------------------------------------------------------------- 2000 1999 1998 2000 1999 1998 COMPONENTS OF NET PERIODIC BENEFIT COST: Service cost $ 444 $ 402 $ 409 $ 15 $ 2 $ 2 Interest cost 1,211 835 841 119 69 72 Expected return on plan assets (1,611) (573) (439) -- -- -- Amortization of net gain 505 43 43 28 -- -- ------- ------- ------- ------- ------- ------- Net periodic benefit cost $ 549 $ 707 $ 854 $ 162 $ 71 $ 74 ======= ======= ======= ======= ======= ======= WEIGHTED-AVERAGE ASSUMPTIONS AS OF MARCH 31: Discount rate 6.67% 6.00% 6.88% 7.88% 7.00% 7.00% Expected return on plan assets 7.59% 7.00% 8.00% -- -- -- Rate of compensation increase 3.13% 3.25% 3.50% -- -- --
POSTRETIREMENT PENSION BENEFITS BENEFITS --------------------------------------------------------- YEAR ENDED MARCH 31, YEAR ENDED MARCH 31, --------------------------------------------------------- 2000 1999 2000 1999 CHANGE IN BENEFIT OBLIGATION: Benefit obligation at beginning of year $ 13,702 $ 12,191 $ 1,024 $ 1,054 Service cost 444 402 15 2 Interest cost 1,211 835 119 69 Plan participants' contributions 131 136 -- -- Effect of acquisitions 9,108 -- 1,122 -- Amendments -- -- -- -- Actuarial gain (341) 1,169 223 2 Benefits paid (1,402) (792) (138) (103) Effect of foreign exchange (755) (239) -- -- -------- -------- -------- -------- Benefit obligation at end of year $ 22,098 $ 13,702 $ 2,365 $ 1,024 ======== ======== ======== ========
POSTRETIREMENT PENSION BENEFITS BENEFITS --------------------------------------------------------- YEAR ENDED MARCH 31, YEAR ENDED MARCH 31, --------------------------------------------------------- 2000 1999 2000 1999 CHANGE IN PLAN ASSETS: Fair value of plan assets at beginning of year $ 7,565 $ 7,116 $ -- $ -- Effect of aquisitions 11,725 -- -- -- Actual return on plan assets 1,069 591 -- -- Employer contribution 352 313 138 103 Plan participants' contributions 131 136 -- -- Benefits paid (978) (318) (138) (103) Effect of foreign exchange (112) (273) -- -- -------- -------- -------- -------- Fair value of plan assets at end of year $ 19,752 $ 7,565 $ -- $ -- ======== ======== ======== ========
POSTRETIREMENT PENSION BENEFITS BENEFITS ------------------------------------------------------ YEAR ENDED MARCH 31, YEAR ENDED MARCH 31, ------------------------------------------------------ 2000 1999 2000 1999 RECONCILIATION OF FUNDED STATUS: Funded status $(2,349) $(6,137) $(2,365) $(1,024) Unrecognized actuarial (gain) loss (2,440) 502 258 63 Unrecognized prior service cost 516 564 -- -- ------- ------- ------- ------- Accrued liability $(4,273) $(5,071) $(2,107) $ (961) ======= ======= ======= =======
The assumed health care cost trend rates used for measurement purposes were 5.63% and 10.0% for 2000 and 1999, respectively. Under the Plan the actuarially determined effect of a one-percentage point change in the assumed health care cost trend would have the following effects:
ONE ONE PERCENTAGE PERCENTAGE POINT POINT INCREASE DECREASE Effect on total of service and interest cost components $34 $(27) Effect on accumulated postretirement benefit obligation 289 (226)
2000 ANNUAL REPORT 23 26 9. FINANCIAL INSTRUMENTS INTEREST RATE SWAP AGREEMENTS - The Company periodically enters into interest rate swap agreements to effectively convert all or a portion of its floating-rate debt to fixed-rate debt in order to reduce the Company's risk to movements in interest rates. Such agreements involve the exchange of fixed and floating interest rate payments over the life of the agreement without the exchange of the underlying principal amounts. Accordingly, the impact of fluctuations in interest rates on these interest rate swap agreements is fully offset by the opposite impact on the related debt. Swap agreements are only entered into with strong creditworthy counterparties. The swap agreements in effect were as follows:
NOTIONAL AMOUNT RECEIVE PAY (IN THOUSANDS) MATURITIES RATE(1) RATE March 31, 2000 $25,000 5/02 6.13 % 5.48 % 25,000 5/02 6.13 5.48 37,500 3/03 6.13 6.58 37,500 3/03 6.13 6.58
(1) Based on three-month LIBOR FOREIGN CURRENCY EXCHANGE AGREEMENTS - The Company enters into forward foreign currency agreements to hedge foreign currency financing transactions. Realized and unrealized gains and losses arising from forward currency contracts are recognized as adjustments to the gains and losses resulting from the underlying hedged transactions. The Company enters into off-balance-sheet forward foreign exchange instruments in order to hedge certain intercompany financing denominated in foreign currencies, accounts receivable denominated in foreign currencies, a percentage of projected sales denominated in foreign currencies, and projected foreign currency intercompany purchases. Gains and losses on forward foreign exchange instruments that hedge specific third party transactions are included in the cost of carrying value of the underlying transaction. Gains and losses on instruments that are hedges of projected third party transactions are included in current period income. The Company recognized $0.5 million of unrealized gains on forward exchange contracts in 2000. The table below summarizes, by currency, the contractual amounts of the Company's foreign exchange contracts at March 31, 2000 and 1999. The "Buy" amounts represent the U.S. dollar equivalent of commitments to purchase foreign currencies, and the "Sell" amounts represent the U.S. dollar equivalent to sell foreign currencies (in thousands):
2000 1999 ------------------------------------------------- BUY SELL BUY SELL Currency Deutsche mark $ -- $10,589 $ 546 $12,439 Pound sterling 17,501 1,667 -- 2,556 ------- ------- ------- ------- $17,501 $12,256 $ 546 $14,995 ======= ======= ======= =======
FAIR VALUE OF FINANCIAL INSTRUMENTS - The fair values of cash and cash equivalents, receivables and notes receivable approximate their carrying values due to the short-term nature of the instruments. The fair value of the Company's long-term notes receivable and debt approximates their carrying values due to the variable interest-rate feature of the instruments. The fair values of the Company's interest rate swaps and forward foreign exchange agreements are the estimated amounts the Company would receive to terminate the agreements at March 31, 2000 based upon quoted market prices as provided by financial institutions which are counterparties to the agreements and were as follows (in thousands):
2000 1999 RECEIVE RECEIVE Interest rate swap agreements $2,405 $ -- Forward foreign exchange agreements 1,537 626
10. EXTRAORDINARY ITEM In fiscal 2000, the Company refinanced its credit facilities. Due to the termination of the prior credit agreement, the Company recognized an extraordinary charge of $0.5 million, net of tax, to write-off the unamortized portion of the loan origination costs associated with the prior agreement. (See Note 6). In fiscal 1999, the Company recognized an extraordinary charge of $0.8 million, net of tax, to write-off the remaining deferred loan fees associated with the early extinguishment of the Company's indebtedness pursuant to its revised and amended revolving credit facility. 11. COMMITMENTS Rent expense under operating leases for the years ended March 31, 2000, 1999, and 1998 was $2.7 million, $3.2 million and $2.3 million, respectively. The Company and its subsidiaries have minimum rental commitments under noncancelable operating leases, primarily leased buildings, as follows (in thousands): 2001 $ 2,462 2002 2,035 2003 1,374 2004 743 2005 329 Beyond 2005 1,862 ------- Total $ 8,805 =======
24 TRANSTECHNOLOGY CORPORATION 27 12. CONTINGENCIES ENVIRONMENTAL MATTERS -During the fourth quarter of fiscal 2000, the Company presented an environmental cleanup plan for a portion of a site in Pennsylvania which continues to be owned although the related business has been sold. This plan was submitted pursuant to the Consent Order with the Pennsylvania Department of Environmental Protection ("PaDEP") concluded in the fourth quarter of fiscal 1999. Pursuant to the Consent Order, the Company has paid $0.2 million for past costs, future oversight expenses and in full settlement of claims made by PaDEP related to the environmental remediation of the site with an additional $0.2 million to be paid in fiscal 2001, which amount has been provided for by the Company in its accrual for environmental liabilities. A second Consent Order is contemplated by December 1, 2000 for another portion of the site, and a third Consent Order for the remainder of the site is contemplated by October 1, 2002. The Company is also administering an agreed settlement with the Federal government under which the government pays 50% of the environmental response costs associated with a portion of the site. The Company is also in the process of finalizing the documentation of an agreed settlement under which the Federal government will pay 45% of the environmental response costs associated with another portion of the site. At March 31, 2000, the Company's cleanup reserve was $1.6 million based on the net present value of future expected cleanup costs. In fiscal 1999, the Company settled for a recovery of a portion of cleanup costs with its insurance carriers for approximately $5.1 million (net) which is included in Other income-net. The Company expects that remediation at the Pennsylvania site will not be completed for several years. The Company also continues to participate in environmental assessments and remediation work at ten other locations, which include operating facilities, facilities for sale, and previously owned facilities. The Company estimates that its potential cost for implementing corrective action at these sites will not exceed $0.2 million payable over the next several years, and has provided for the estimated costs in its accrual for environmental liabilities. In addition, the Company has been named as a potentially responsible party in seven environmental proceedings pending in several other states in which it is alleged that the Company was a generator of waste that was sent to landfills and other treatment facilities and, as to several sites, it is alleged that the Company was an owner or operator. Such properties generally relate to businesses which have been sold or discontinued. It is not possible to reliably estimate the costs associated with any remedial work to be performed until studies at these sites have been completed, the scope of work defined, a method of remediation selected and approved by the relevant state authorities, and the costs allocated among the potentially responsible parties. LITIGATION - The Company is also engaged in various other legal proceedings incidental to its business. It is the opinion of management that, after taking into consideration information furnished by its counsel, the above matters will have no material effect on the Company's consolidated financial position or the results of the Company's operations in future periods. 13. SEGMENT AND GEOGRAPHIC INFORMATION The Company has two business segments. Each segment has separate management teams that report operating results regularly which are reviewed by the chief operating decision makers of the Company. Certain businesses have been aggregated into the same reportable segment because they have similar products and services, production processes, types of customers and distribution methods and their long-term financial performance is affected by similar economic conditions. The Company develops, manufactures and sells a wide range of products in two industry segments, Specialty Fastener Products and Aerospace Products. The Company has manufacturing facilities located in the United States, Canada, Germany, the United Kingdom and Brazil. The Specialty Fastener Products Segment produces highly engineered precision metal retaining rings, gear driven band fasteners, circlips, custom cold-formed parts, head light adjusters, rivets and other threaded and non-threaded assembly fasteners primarily for the automotive, heavy truck, industrial, aerospace and consumer/durables markets and accounted for approximately 80% of the Company's consolidated 2000 net sales. Through its Aerospace Products Segment, the Company develops, manufactures, sells and services a complete line of sophisticated lifting and restraining products, principally performance critical helicopter rescue hoist and cargo hook systems, winches and hoists for aircraft and weapons systems and aircraft engine compartment hold open rods, actuators and other motion control devices. This segment accounted for approximately 20% of the Company's consolidated 2000 net sales. 2000 ANNUAL REPORT 25 28 The accounting policies of the segments are the same as those described in the summary of significant accounting policies. The Company evaluates performance based on operating profit of the respective segments. Operating profit is net sales less operating expenses. General corporate expenses, interest and income taxes have not been deducted in determining operating profit. Assets, depreciation and amortization and capital expenditures are those identifiable to a particular segment by their use. Approximately 8%, 10% and 11% of sales from continuing operations in 2000, 1999 and 1998, respectively, were derived from sales to the United States Government and its prime contractors which are attributable primarily to Aerospace Products.
OPERATING DEPRECIATION/ FISCAL NET PROFIT CAPITAL AMORTIZATION IDENTIFIABLE (IN THOUSANDS) YEAR SALES (LOSS)(1) EXPENDITURES EXPENSE(2) ASSETS - --------------------------------------------------------------------------------------------------------------- Specialty Fastener 2000 $238,416 $ 24,615(3) $ 9,589 $ 14,310 $406,476 Products 1999 177,837 26,284 13,652 8,812 205,206 1998 168,469 26,177 7,935 7,801 178,331 Aerospace Products 2000 60,836 15,377 435 1,062 49,163 1999 50,169 12,080 728 991 51,883 1998 35,459 9,285 469 544 25,540 Total segments 2000 299,252 39,992 10,024 15,372 455,639 1999 228,006 38,364 14,380 9,803 257,089 1998 203,928 35,462 8,404 8,345 203,871 Corporate 2000 -- (9,131) 13 2,245 27,116 1999 -- (13,243)(4) 379 999 22,631 1998 -- (9,119) 341 709 32,202 Corporate interest 2000 -- 592 -- -- -- and other income-net 1999 -- 6,111(5) -- -- -- 1998 -- 1,038 -- -- -- Interest expense 2000 -- (19,945) -- -- -- 1999 -- (6,938) -- -- -- 1998 -- (7,228) -- -- -- Consolidated 2000 299,252 11,508 10,037 17,617 482,755 1999 228,006 24,294 14,759 10,802 279,720 1998 203,928 20,153 8,745 9,054 236,073
(1) Operating profit represents net sales less operating expenses which include all costs and expenses related to the Company's operations in each segment. General corporate expenses and investments and other income earned at the corporate level are included in the corporate section. Interest expense is also separately reported. The amount of the "Consolidated" line represents "Income from continuing operations before income taxes." Loss from discontinued operations is not included. (2) The depreciation/amortization expense from discontinued operations is excluded from the above schedule. (3) Specialty fastener operating income for 2000 includes charges of $5.5 million relating to the consolidation of two manufacturing facilities in England. (4) Corporate expense for 1999 includes a $0.9 million pretax charge to the allowance for notes receivable, and a $1.5 million pretax incentive compensation award. (5) Corporate interest and other income for 1999 includes a pretax net gain of $5.1 million for settlement of litigation claims against its insurance carriers for environmental matters and a $1.1 million gain on sale of marketable securities Export sales are defined as sales to customers in foreign countries by the Company's U.S. based operations. Export sales amounted to the following (in thousands):
LOCATION 2000 1999 1998 Western Europe $18,144 $15,680 $ 7,980 Canada 10,788 9,170 7,095 Pacific and Far East 7,083 3,344 2,296 Mexico, Central and South America 4,348 2,267 2,556 Middle East 1,336 415 194 Other 1,627 275 158 ------- ------- ------- Total $43,326 $31,151 $20,279 ======= ======= =======
26 TRANSTECHNOLOGY CORPORATION 29 Results set forth below for international operations represents sales and operating income of domestic and foreign based subsidiaries based on the location the product was shipped from (in thousands):
2000 1999 1998 Net sales: Domestic operations $ 233,038 $ 171,302 $ 146,682 International operations(1) 66,214 56,704 57,246 --------- --------- --------- Net sales $ 299,252 $ 228,006 $ 203,928 ========= ========= ========= Operating income: Domestic operations $ 42,711 $ 34,621 $ 30,808 International operations(1) (2,719) 3,743 4,654 --------- --------- --------- Operating income 39,992 38,364 35,462 Interest expense (19,945) (6,938) (7,228) Corporate expense and other (8,539) (7,132) (8,081) --------- --------- --------- Income from continuing operations before taxes $ 11,508 $ 24,294 $ 20,153 --------- --------- --------- Identifiable assets: Domestic operations $ 358,218 $ 193,690 $ 136,347 International operations(1) 97,421 63,399 67,524 Corporate 27,116 22,631 32,202 --------- --------- --------- Total assets $ 482,755 $ 279,720 $ 236,073 ========= ========= =========
(1) International operations are primarily located in Europe, Canada and Brazil. 14. UNAUDITED QUARTERLY FINANCIAL DATA (IN THOUSANDS EXCEPT PER SHARE AMOUNTS)
FIRST SECOND THIRD FOURTH QUARTER QUARTER QUARTER QUARTER TOTAL 2000 Net sales $55,368 $62,903 $85,872 $95,109 $299,252 Gross profit 16,117 18,863 25,626 27,706 88,312 Income (loss) before extraordinary charge 2,158 (330)(1) 2,865 2,442(1) 7,135 Extraordinary charge for refinancing of debt -- (541) -- -- (541) ------- ------- ------- ------- -------- Net income (loss) $ 2,158 $ (871) $ 2,865 $ 2,442 $ 6,594 ======= ======= ======= ======= ======== Basic earnings (loss) per share: Income (loss) before extraordinary charge $ 0.35 $ (0.05) $ 0.47 $ 0.40 $ 1.16 Extraordinary charge for refinancing of debt -- (0.09) -- -- (0.09) ------- ------- ------- ------- -------- Net income (loss) $ 0.35 $ (0.14) $ 0.47 $ 0.40 $ 1.07 ======= ======= ======= ======= ======== Diluted earnings (loss) per share: Income (loss) before extraordinary charge $ 0.35 $ (0.05) $ 0.47 $ 0.40 $ 1.16 Extraordinary charge for refinancing of debt -- (0.09) -- -- (0.09) ------- ------- ------- ------- -------- Net income (loss) $ 0.35 $ (0.14) $ 0.47 $ 0.40 $ 1.07 ======= ======= ======= ======= ======== 1999 Net sales $51,483 $56,368 $57,863 $62,292 $228,006 Gross profit 16,900 17,949 18,078 18,989 71,916 Income before extraordinary charge 3,202 2,208 3,643 5,537(2) 14,590 Extraordinary charge for refinancing of debt -- (781) -- -- (781) ------- ------- ------- ------- -------- Net income $ 3,202 $ 1,427 $ 3,643 $ 5,537 $ 13,809 ======= ======= ======= ======= ======== Basic earnings (loss) per share: Income before extraordinary charge $ 0.51 $ 0.35 $ 0.58 $ 0.90 $ 2.33 Extraordinary charge for refinancing of debt -- (0.12) -- -- (0.12) ------- ------- ------- ------- -------- Net income $ 0.51 $ 0.23 $ 0.58 $ 0.90 $ 2.21 ======= ======= ======= ======= ======== Diluted earnings (loss) per share: Income before extraordinary charge $ 0.50 $ 0.34 $ 0.58 $ 0.89 $ 2.30 Extraordinary charge for refinancing of debt -- (0.12) -- -- (0.12) ------- ------- ------- ------- -------- Net income $ 0.50 $ 0.22 $ 0.58 $ 0.89 $ 2.18 ======= ======= ======= ======= ========
(1) The second and fourth quarters of 2000 include charges of $4.5 million and $1.1 million, respectively, relating to the consolidation of two manufacturing facilities in England. (2) Income before extraordinary charge for the quarter ended March 31, 1999 includes a pretax net gain of $5.1 million for an insurance settlement and a $1.1 million pretax gain on sale of marketable securities. 2000 ANNUAL REPORT 27 30 MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS RESULTS OF OPERATIONS The Company's fiscal year ends on March 31. Accordingly, all references to years in this Management's Discussion and Analysis refer to the fiscal year ended March 31 of the indicated year. Also, when referred to herein, operating profit means net sales less operating expenses, without deduction for general corporate expenses, interest and income taxes. Sales in 2000 were $299.3 million, an increase of $71.2 million, or 31% from 1999, compared with a $24.1 million, or a 12% increase, from 1998 to 1999. Gross profit in 2000 increased $16.4 million, or 23%, from 1999, compared with an increase of $5.8 million, or 9%, from 1998 to 1999. Operating profit for 2000 was $40.0 million, an increase of $1.6 million or 4%, from 1999, compared with an increase of $2.9 million or 8%, from 1998 to 1999. Operating profit in 2000 was adversely affected by plant consolidation expenses of $5.5 million as described below in the discussion of acquisitions. In 1999, income before income taxes and extraordinary charge was favorably affected by a $5.1 million gain from the settlement of litigation relative to claims against its insurance carriers for environmental matters and a $1.1 million gain from the sale of marketable securities. Changes in sales, operating profit and new orders are discussed below by segment, and additional information regarding industry segments is contained in Note 13 of the Notes to Consolidated Financial Statements. Net income, including an extraordinary charge in 2000, was $6.6 million, or $1.07 per diluted share, compared to $13.8, million or $2.18 per diluted share, in 1999. Changes in net income were affected both by operating profit, as discussed in the Business Segment sections below, interest expense, plant consolidation expense and an extraordinary charge as discussed in the sections below. During the first half of 2000 the Company completed two acquisitions. On August 31, 1999, the Company acquired all of the assets and assumed certain liabilities of the Engineered Fasteners Division of Eaton Corporation and its Tinnerman product line (collectively referred to as "Tinnerman") for a total purchase price of $173.3 million in cash. On July 19, 1999, the Company acquired all the outstanding capital stock of Ellison Holdings PLC, a privately held company, and its German affiliate Ellison, Roettges & Co. GmbH (collectively referred to as "Ellison") for $13.8 million in cash, a $0.4 million note payable, and other contingent consideration. As part of the Ellison acquisition plan, the Company recorded a plant consolidation provision of $4.5 million to cover the estimated plant closure of the Company's existing facility and consolidation costs. The initial estimate of $4.5 million was recorded during the first half of 2000. During the fourth quarter of 2000 additional expenses of $0.1 million were added to the provision. In addition, approximately $1.0 million of additional costs relating to the plant consolidation was charged to cost of sales in the fourth quarter. During the first quarter of 2000 the Company recorded an extraordinary charge for the early extinguishment of debt in the amount of $0.5 million after tax. The early extinguishment of existing debt was necessary in order to obtain new credit facilities which provided funding for the Tinnerman and Ellison acquisitions. Interest expense increased by $13.0 million in 2000 from 1999 due to the additional bank borrowings required for the Tinnerman and Ellison acquisitions as well as higher interest rates. Interest expense decreased by $0.3 million in 1999 from 1998 primarily due to lower borrowing rates. New orders received during 2000 totaled $305.2 million, an increase of $84.3 million, or 38%, from 1999. This increase was due mainly to the acquisitions of Tinnerman and Ellison during 2000. New orders received during 1999 totaled $220.9 million, an increase of $14.0 million, or 7%, from 1998. At March 31, 2000, total backlog of unfilled orders was $109.6 million, compared to $89.7 million and $75.9 million at March 3l, 1999 and 1998, respectively. New orders and backlog by industry segment are discussed below. SPECIALTY FASTENER PRODUCTS SEGMENT 2000 COMPARED WITH 1999 Sales for the Specialty Fastener Products segment were $238.4 million in 2000, an increase of $60.6 million, or 34%, from 1999. The increase in sales was primarily 28 TransTechnology Corporation 31 due to the acquisition of Ellison on July 19, 1999 and Tinnerman on August 31, 1999. Increases in domestic hose clamps and assembly fasteners and cold-headed parts sales were offset by decreases in European hose clamps and both domestic and international retaining rings. Sales of the rivet division continued to decline due to loss of business from its largest customer and the down cycle of the airframe industry. The Company has filed an arbitration demand against this customer and the former owner seeking damages for fraud and breach of contract, punitive damages and rescission. Operating profit for the Specialty Fastener Products segment was $24.6 million in 2000, a decrease of $1.7 million, or 6%, compared to 1999. Excluding $5.5 million of expenses relating to the consolidation of two retaining ring factories in England as part of the Ellison acquisition program, operating profit increased 15%. This increase was primarily driven by the Tinnerman acquisition. Operating profits at the European operation were lower due to reduced market and economic factors, as well as currency factors, especially the exchange rates between the Pound sterling and the Euro. Domestic retaining ring operating profit was lower due to lower sales volume. Operating profit in assembly fasteners increased in 2000 mainly due to increased sales volume, primarily in the U.S. automotive market. New orders during 2000 for the Specialty Fastener Products segment were $243.4 million, an increase of $71.9 million, or 42%, mainly due to the Tinnerman and Ellison acquisitions. Backlog of unfilled orders as of March 31, 2000 increased to $65.4 million, compared to $45.9 million at March 31, 1999, mainly due to acquisitions. SPECIALTY FASTENER PRODUCTS SEGMENT 1999 COMPARED WITH 1998 Sales for the Specialty Fastener Products segment were $177.8 million in 1999, an increase of $9.4 million, or 6%, from 1998. The increase in sales was primarily due to the acquisition of ARM on June 29, 1998. Domestic Fastener sales were otherwise lower or flat as compared to 1998 sales. Sales of the European hose clamp division were lower reflecting mainly the loss of one major customer, which had been anticipated. Sales from the Brazilian retaining ring operation were also reduced compared to 1998 due to the currency devaluation as well as economic difficulties experienced in Brazil during 1999. Domestic retaining ring sales were also lower compared to 1998 due to a loss in market share suffered during the consolidation of two plants in New Jersey. Operating profit for the Specialty Fastener Products segment was $26.3 million in 1999, an increase of $0.1 million compared to 1998. Increased operating profit generated by the ARM acquisition was essentially offset by the lower sales and resulting lower operating profit as discussed above from the domestic and Brazilian retaining ring divisions as well as the European hose clamp division. Lower operating profit also was experienced at the domestic hose clamp division due to increased price competition and a change in product mix resulting in lower absorption of overhead. In 1999, new orders in the Specialty Fastener Products segment were $171.5 million, virtually the same as 1998. Increased orders stemming from the ARM acquisition were offset as were sales for the period due to the reasons discussed above. Backlog of unfilled orders was $45.9 million at March 31, 1999, compared to $43.5 million at March 31, 1998. AEROSPACE PRODUCTS SEGMENT 2000 COMPARED WITH 1999 Sales for the Aerospace Products segment were $60.8 million in 2000, an increase of $10.7 million, or 21%, from 1999. Approximately 9% of the increase came from increased rescue hoist and engineering development programs and 12% due to the inclusion of twelve months of sales from NORCO this year compared to eight months in 1999. Operating profit for the Aerospace Products segment was $15.4 million, an increase of $3.3 million, or 27%. This increase was due to the inclusion of NORCO for the full year, as well as increased sales of rescue hoists. New orders during 2000 for the Aerospace Products segment were $61.8 million, an increase of $12.4 million, or 25%, mainly due to NORCO. Increased orders also included increased engineering program orders and increased orders for spare parts. Backlog of unfilled orders as of March 31, 2000 was $44.2 million, compared to $43.8 million at March 31, 1999. AEROSPACE PRODUCTS SEGMENT 1999 COMPARED WITH 1998 Sales for the Aerospace Products segment were $50.2 million in 1999, an increase of $14.7 million or 41% 2000 ANNUAL REPORT 29 32 from 1998. The increase was primarily due to the acquisition of NORCO on July 28, 1998. Sales of rescue hoist and cargo hook products were also higher for 1999 due mainly to the timing of program sales such as the Boeing V-22 program, which were developed in prior years from continuing research and development efforts. The Aerospace Products segment reported an operating profit of $12.1 million in 1999, an increase of $2.8 million, or 30%, from 1998. The increase was primarily due to the increased sales and operating profit generated by the NORCO acquisition. In 1999 new orders in the Aerospace Products segment increased by $14.0 million, or 40%, from 1998. This increase was primarily due to the NORCO acquisition. New orders for rescue hoists and cargo hooks also increased slightly. At March 31, 1999, the backlog of unfilled orders was $43.8 million, compared to $32.4 million at March 31, 1998. YEAR 2000 READINESS The Company undertook Year 2000 readiness programs at all of its facilities so that the date change from the calendar year 1999 to 2000 did not cause disruptions to the Company's operations or date sensitive systems. The Company had been addressing this concern for several years and did not anticipate any problems at any of its business units and did not expect any significant vendor or customer related problems based on survey information gathered. Total costs for Year 2000 programs were approximately $0.5 million of which $0.1 million was capitalized. No further costs for Year 2000 programs are expected. EURO CURRENCY Effective January 1, 1999, eleven countries comprising the European Union established fixed foreign currency exchange rates and adopted a common currency unit designated as the "Euro". The Euro has since become publicly traded and is currently used in commerce during the present transition period which is scheduled to end January 1, 2002, at which time a Euro denominated currency is scheduled to be issued and is intended to replace those currencies of the eleven member countries. The transition to the Euro has not resulted in problems for the Company to date, and is not expected to have any material adverse impact on the Company's future operations. NEW ACCOUNTING STANDARDS In June 1998, Statement of Financial Accounting Standards ("SFAS") No. 133, Accounting for Derivative Instruments and Hedging Activities, was issued and, as amended by SFAS No. 137, Accounting for Derivative Instruments and Hedging Activities - Deferral of the Effective Date of SFAS Statement No. 133 in June 1999, is effective for the Company for its fiscal year ending March 31, 2002. SFAS No. 133 requires that all derivative instruments be measured at fair value and recognized in the balance sheet as either assets or liabilities. The Company is currently evaluating the impact this pronouncement will have on its consolidated financial statements. ACQUISITIONS On August 31, 1999, the Company acquired all of the assets and assumed certain liabilities, consisting primarily of trade debts and accrued expenses, of the Engineered Fasteners Division of Eaton Corporation and its Tinnerman product line (collectively referred to as "Tinnerman") for a total purchase price of $173.3 million in cash. Tinnerman had 650 employees and manufactures a wide variety of fastening devices for the automotive, business equipment, consumer electronics and home appliance markets. Tinnerman has manufacturing facilities in Brunswick and Massillon, Ohio and Hamilton, Ontario, Canada. On July 19, 1999, the Company acquired all the outstanding capital stock of Ellison Holdings PLC, a privately held company, and its German affiliate Ellison, Roettges & Co. GmbH (collectively referred to as "Ellison") for $13.8 million in cash, a $0.4 million note payable 24 months from the date of acquisition and other contingent consideration. Ellison, headquartered in Glusburn, West Yorkshire, England, manufactures retaining and snap rings as well as lockwashers for the automotive, heavy vehicle and industrial markets. The allocation of purchase price to the assets and liabilities of Ellison is preliminary pending final purchase price adjustments, if any, between the Company and the selling shareholders. As part of the acquisition plan, the Company closed its existing facility in Bingley, UK and consolidated that operation with the Ellison facility. In the quarter ended September 26, 1999, the Company recorded a $4.5 million charge for the consolidation. In the quarter ended March 31, 2000, the Company recorded an additional $0.1 million related to this plant consol- 30 TRANSTECHNOLOGY CORPORATION 33 idation. The total charge consists of $3.8 million principally related to the write-down of Anderton's assets to estimated realizable values and other costs directly related to the exit of the facility, and approximately $0.8 million for severance and related benefit payments to approximately 100 Anderton employees. At March 31, 2000, the Company had $0.3 million remaining in current liabilities related to these costs. In addition, in the quarter ended March 31, 2000, $1.0 million was charged to cost of sales primarily due to excess overtime incurred to produce parts pending customer approval on first part production lots. On June 29, 1998, the Company acquired all of the outstanding stock of Aerospace Rivet Manufacturers Corporation ("ARM") for $26.2 million in cash, including direct acquisition costs, and other contingent consideration. ARM, located in City of Industry, California, produces rivets and externally threaded fasteners for the aerospace industry. On July 28, 1998, the Company acquired all of the outstanding stock of NORCO, Inc. ("NORCO") for $17.7 million in cash, including direct acquisition costs, and other contingent consideration. NORCO, located in Ridgefield, Connecticut, produces aircraft engine compartment hold open rods, actuators and other motion control devices for the aerospace industry. On April 17, 1997, the Company acquired all of the outstanding stock of TCR Corporation ("TCR") for $32.6 million in cash including direct acquisition costs, and other contingent consideration. TCR, located in Minneapolis, Minnesota, produces cold forged and other externally threaded fasteners and related products for the automotive, heavy vehicle, marine and industrial markets. DISCONTINUED OPERATIONS During fiscal 1998 the Company recorded after tax costs of $0.9 million for the disposal of previously discontinued and sold operations. These costs represent adjustments to previous estimates related primarily to legal and environmental matters. Included in Other Assets at March 31, 2000 and 1999, were assets held for sale related to discontinued operations of $5.2 million in both years. LIQUIDITY AND CAPITAL RESOURCES The Company's debt-to-capitalization ratio was 68%, 45%, and 35% as of March 31, 2000, 1999 and 1998, respectively. The higher debt ratios for 2000 and 1999 reflect the additional bank borrowings necessary for the Tinnerman and Ellison acquisitions in 2000, and the ARM and NORCO acquisitions in 1999. The current ratio at March 31, 2000, was 1.01, compared to 3.39, and 2.06 at March 31, 1999 and 1998, respectively. Working capital was $1.8 million at March 31, 2000, down $69.3 million from 1999 and down $49.2 million from 1998. The reduction in working capital in 2000 was caused primarily by the Bridge Loan payable of $75.0 million, all of which is classified as a current liability, reflecting its initial maturity date of August 31, 2000. Effective August 31, 1999, the Company's revolving credit facility (the "Revolver") was amended and increased from $145.0 million to $200.0 million, and additional term debt (the "Term Loan") of $50.0 million and senior subordinated debt (the "Bridge Loan") of $75.0 million were obtained in order to provide the necessary funds for the Tinnerman acquisition. Credit was provided by the same group of lending banks plus several new lending banks. The Revolver and Term Loan have a maturity of five years. The Bridge Loan has an initial maturity of one year, after which time the Bridge Loan automatically converts to a term loan subject to, among other things, an early payment premium and the issuance of stock warrants. The stock warrants would provide for the lenders to obtain up to ten percent of the shares of the Company's stock after August 31, 2000. The Company intends to replace the Bridge Loan before August 31, 2000 with alternative long term subordinated debt under terms more favorable to the Company. The Bridge Loan contains a provision for exit fees of approximately $2.1 million which may be applied to certain refinancing fees. An extraordinary charge for the refinancing of debt, net of tax, in the amount of $0.5 million was incurred for the year ended March 31, 2000, to reflect the write-off of the unamortized debt issue costs of the prior credit agreement. The Company's credit agreements provide it with unused borrowing capacity for both domestic and international operations of $45.3 million as of March 31, 2000, and letters of credit of up to $4.9 million. The 2000 ANNUAL REPORT 31 34 Revolver, Bridge Loan and Term Loan are secured by all of the Company's assets. As of March 31, 2000, the Company had total borrowings of $275.9 million under the amended agreements which have a weighted average interest rate of 10.4%. The Company had $1.4 million of other borrowings consisting of collateralized borrowing arrangements with fixed interest rates of 3% and 3.75%, and loans on life insurance policies owned by the Company with a fixed interest rate of 5%. Borrowings under the Revolver as of March 31, 2000, were $154.7 million. Interest on the Revolver is tied to the primary bank's prime rate, or at the Company's option, the London Interbank Offered Rate ("LIBOR"), plus a margin that varies depending upon the Company's achievement of certain operating results. As of March 31, 2000, $152.5 million of the Company's outstanding borrowings utilized LIBOR, of which $127.0 million were payable in U.S. Dollars and $7.1 million and $18.4 million were payable in Deutsche marks and Pounds sterling, respectively. Borrowings under the Term Loan as of March 31, 2000, were $46.3 million of which $7.5 million is due within one year, $8.8 million is due in year two, $10.0 million is due in year three, $12.5 million is due in year four, and $7.5 million is due upon maturity in year five. Borrowings under the Bridge Loan as of March 31, 2000, were $75.0 million, all of which is considered to be short term. Interest on the Bridge Loan is based on LIBOR plus a margin which is currently 9.5% and increases in quarterly increments subject to an overall maximum interest rate of 18%. The Bridge Loan matures on August 31, 2000, after which time, unless replaced, it converts automatically to senior subordinated term debt with additional provisions. The major additional provisions of the resulting term debt provide for a warrant escrow agreement that stipulates that the Company shall issue stock warrants to the debt holders for 731,197 shares of the Company's stock exercisable at par value (or $.01) per share, representing ten percent of the common equity of the Company on a fully diluted basis after giving effect to the warrants. Other provisions of the resulting term debt include various repayment premiums during the first seven years of the term, an overall maximum interest rate of 18% and the right of the holders of the Bridge Loan to require the Company to exchange this debt for a class of debt securities which the Company would be required to register for public distribution. The Company intends to replace the Bridge Loan prior to its maturity and, therefore, does not expect to be subject to the provisions of the term debt which would become effective after the Bridge Loan maturity date on August 31, 2000. The credit agreements require the Company to maintain interest rate protection on a minimum of $125.0 million of its variable rate debt. The Company has accordingly provided for this protection by means of interest rate swap agreements which have fixed the rate of interest on $50.0 million of debt at a base rate of 5.48% through May 4, 2002, and $75.0 million of debt at a base rate of 6.58% through March 3, 2003. Under the agreement, the base interest rate is added to the applicable interest rate margin to determine the total interest rate in effect. The credit agreement also limits the Company's ability to pay dividends to 25% of net income and restricts annual capital expenditures to $12.0 million through 2001, $13.0 million in 2002, and $15.0 million thereafter, and contains other customary financial covenants. The Company did not purchase any treasury stock in 2000 in contrast to 1999 during which the Company purchased 249,000 shares for $4.9 million. Treasury stock purchases are made in the open market or in negotiated transactions when opportunities are deemed to arise. Purchases of treasury stock are limited by the terms of the Company's credit agreement. Management believes that the Company's anticipated cash flow from operations, combined with the bank credit agreement described above, will be sufficient to support working capital requirements, capital expenditures and dividend payments at their current or expected levels. Capital expenditures in 2000 were $10.0 million compared with $14.8 million in 1999 and $8.7 million in 1998, with capital expenditures for the Fastener Segment being much larger than those required by the Aerospace Products Segment. The Company expects capital expenditures in 2001 to be below the 2000 level. MARKET RISK The Company is exposed to various market risks, including changes in foreign currency exchange rates and interest rates. Market risk is the potential loss arising from adverse changes in market rates and prices, such as foreign currency exchange rates and interest rates. The Company enters into off-balance-sheet forward foreign exchange instruments in order to hedge certain intercompany financing denominated in foreign currencies, accounts receivable denominated in foreign currencies, a percentage of projected sales denominated 32 TRANSTECHNOLOGY CORPORATION 35 in foreign currencies, and projected foreign currency intercompany purchases. Gains and losses on forward foreign exchange instruments that hedge specific third party transactions are included in the cost of carrying value of the underlying transaction. Gains and losses on instruments that are hedges of projected third party transactions are included in current period income. The Company recognized $0.5 million of unrealized gains on forward exchange contracts in 2000. At March 31, 2000, the Company had outstanding forward foreign exchange contracts to purchase and sell $29.8 million of various currencies (principally Deutsche marks and Pounds sterling). At March 31, 2000, if all forward contracts were closed out, the Company would receive approximately $1.5 million (the fair value of all outstanding contracts). A 10% fluctuation in the exchange rates for the currencies hedged would have an immaterial effect on fair values of these instruments. The Company enters into interest rate swap agreements to manage a portion of its exposure to interest rate changes. The swaps involve the exchange of fixed and variable interest rate payments without exchanging the notional principal amount. Payments or receipts on the swap agreements are recorded as adjustments to interest expense. At March 31, 2000 the Company had outstanding interest rate swap agreements to convert $125 million of floating rate debt to fixed rate debt. The fair value of these swaps was approximately $2.4 million at March 31, 2000. CONTINGENCIES ENVIRONMENTAL MATTERS - During the fourth quarter of fiscal 2000 the Company presented an environmental cleanup plan for a portion of a site in Pennsylvania which continues to be owned although the related business has been sold. This plan was submitted pursuant to the Consent Order and Agreement with the Pennsylvania Department of Environmental Protection ("PaDEP") concluded in the fourth quarter of fiscal 1999. Pursuant to the Consent Order, the Company has paid $0.2 million for past costs, future oversight expenses and in full settlement of claims made by PaDEP related to the environmental remediation of the site with an additional $0.2 million to be paid in fiscal 2001, which amount has been provided for by the Company in its accrual for environmental liabilities. A second Consent Order is contemplated by December 1, 2000 for another portion of the site, and a third Consent Order for the remainder of the site is contemplated by October 1, 2002. The Company is also administering an agreed settlement with the Federal government under which the government pays 50% of the environmental response costs associated with a portion of the site. The Company is also in the process of finalizing the documentation of an agreed settlement under which the Federal government will pay 45% of the environmental response costs associated with another portion of the site. At March 31, 2000, the Company's cleanup reserve was $1.6 million based on the net present value of future expected cleanup costs. In 1999, the Company settled for a recovery of a portion of cleanup costs with its insurance carriers for approximately $5.1 million (net) which is included in Other income-net. The Company expects that remediation at the Pennsylvania site will not be completed for several years. The Company also continues to participate in environmental assessments and remediation work at ten other locations, which include operating facilities, facilities for sale, and previously owned facilities. The Company estimates that its potential cost for implementing corrective action at these sites will not exceed $0.2 million payable over the next several years, and has provided for the estimated costs in its accrual for environmental liabilities. In addition, the Company has been named as a potentially responsible party in seven environmental proceedings pending in several other states in which it is alleged that the Company was a generator of waste that was sent to landfills and other treatment facilities and, as to several sites, it is alleged that the Company was an owner or operator. Such properties generally relate to businesses which have been sold or discontinued. It is not possible to estimate reliably the costs associated with any remedial work to be performed until studies at these sites have been completed, the scope of work defined, a method of remediation selected and approved by the relevant state authorities, and the costs allocated among the potentially responsible parties. LITIGATION - The Company is also engaged in various other legal proceedings incidental to its business. It is the opinion of management that, after taking into consideration information furnished by its counsel, the above matters will have no material effect on the Company's consolidated financial position or the results of the Company's operations in future periods. 2000 ANNUAL REPORT 33 36 DIRECTORS * GIDEON ARGOV CHAIRMAN OF THE BOARD, PRESIDENT AND CHIEF EXECUTIVE OFFICER KOLLMORGEN CORPORATION *+ WALTER BELLEVILLE CHAIRMAN OF THE BOARD ATI MACHINERY, INC. - - MICHAEL J. BERTHELOT CHAIRMAN OF THE BOARD, PRESIDENT AND CHIEF EXECUTIVE OFFICER TRANSTECHNOLOGY CORPORATION - -+ THOMAS V. CHEMA PARTNER, ARTER & HADDEN, LLP PRESIDENT, GATEWAY CONSULTANTS GROUP, INC. - - JOHN H. DALTON FORMER SECRETARY OF THE NAVY CHAIRMAN AND CHIEF EXECUTIVE OFFICER EPCAD SYSTEMS, LLC - - MICHEL GLOUCHEVITCH PRIVATE EQUITY INVESTOR *+ JAMES A. LAWRENCE EXECUTIVE VICE PRESIDENT AND CHIEF FINANCIAL OFFICER GENERAL MILLS, INC. WILLIAM J. RECKER CHAIRMAN OF THE BOARD GRETAG IMAGING HOLDING AG - ---------- * AUDIT COMMITTEE - - NOMINATING COMMITTEE + INCENTIVES & COMPENSATION COMMITTEE CORPORATE OFFICERS MICHAEL J. BERTHELOT CHAIRMAN OF THE BOARD, PRESIDENT AND CHIEF EXECUTIVE OFFICER JOSEPH F. SPANIER VICE PRESIDENT, CHIEF FINANCIAL OFFICER AND TREASURER GERALD C. HARVEY VICE PRESIDENT, SECRETARY AND GENERAL COUNSEL ROBERT L. G. WHITE PRESIDENT AEROSPACE PRODUCTS GROUP ROBERT TUNNO PRESIDENT INDUSTRIAL PRODUCTS GROUP MONICA AGUIRRE ASSISTANT TO THE CHAIRMAN AND ASSISTANT SECRETARY COUNSEL HAHN LOESER & PARKS LLP CLEVELAND, OHIO AUDITORS DELOITTE & TOUCHE LLP PARSIPPANY, NEW JERSEY TRANSFER AGENT AND REGISTRAR EQUISERVE BOSTON EQUISERVE DIVISION CANTON, MASSACHUSETTS INVESTOR RELATIONS CONTACT Michael J. Berthelot Chairman of the Board, President and Chief Executive Officer TransTechnology Corporation 150 Allen Road Liberty Corner, New Jersey 07938 908/903-1600 908/903-1616 Fax www.transtechnology.com ANNUAL MEETING The annual shareholders' meeting will be held on Thursday, July 13, 2000 at the Somerset Hills Hotel, 200 Liberty Corner Road, Warren, New Jersey 07059 FORM 10-K AND ADDITIONAL INFORMATION The Company, upon request to the Investor Relations department, will provide to any shareholder a copy of the Form 10-K required to be filed with the Securities and Exchange Commission and any other available information. 34 TRANSTECHNOLOGY CORPORATION Design: Simon Design 37 AEROSPACE PRODUCTS GROUP ROBERT L. G. WHITE - PRESIDENT BREEZE-EASTERN Lifting and restraint products 700 Liberty Avenue Union, NJ 07083-8198 908/686-4000 908/686-9292 Fax Robert L.G. White - President NORCO, INC. Hold open rods and mechanical systems 139 Ethan Allen Highway Ridgefield, CT 06877-6294 203/544-8301 203/544-7121 Fax Surin M. Malhotra - President INDUSTRIAL PRODUCTS GROUP ROBERT TUNNO - PRESIDENT TRANSTECHNOLOGY ENGINEERED RINGS Retaining and snap rings, circlips, washers and shims Ulf Jemsby - President SEEGER-ORBIS GmbH Wiesbadener Strasse 243 D-61462 Konigstein/Taunus Germany 49/6174 2050 49/6174 205 100 Fax Sven-Uwe Wolber - Vice President of Operations TRANSTECHNOLOGY (GB) LTD. 'Hayfield', Colne Road Glusburn, Keighley West Yorkshire BD16 2PL England 44/1535 633 333 44/1535 630 918 Fax Ulf Jemsby - Acting Vice President of Operations SALES OFFICES TRANSTECHNOLOGY ESPANA S. A. Barcelona, Spain 34/934 743 020 34/934 745 675 Fax TRANSTECHNOLOGY FRANCE Paris, France 33/130 132 069 33/130 131 710 Fax INDUSTRIAL RETAINING RING COMPANY (IRR) 70 East Willow Street Millburn, NJ 07041-9998 800/526-7055 973/926-4699 Fax Peter Lowe - Vice President of Operations Irvington Plant, New Jersey 973/926-5000 973/926-4292 Fax TRANSTECHNOLOGY BRASIL LTDA. Av. Prestes Maia, 230 Diadema, Sao Paulo Brasil 09930-270 55/11 713 3133 55/11 713 4412 Fax Edson Pardini - Vice President of Operations TRANSTECHNOLOGY ENGINEERED PRODUCTS Hose clamps, aerospace fasteners and cold headed parts Robert Tunno - Acting President BREEZE INDUSTRIAL PRODUCTS 100 Aero-Seal Drive Saltsburg, PA 15681-9594 724/639-3571 724/639-3020 Fax Thomas G. Watson - General Manager SEEGER-ORBIS GmbH & CO. OHG. PEBRA PRODUCTS DIVISION Werk 4, Hauptstrasse 2/1 78665 Frittlingen, Germany 49/7426 949 15 49/7426 949 224 Fax Bernd Hohn - Operations Manager AEROSPACE RIVET MANUFACTURERS CORPORATION 17425 Railroad Street City of Industry, CA 91748-1026 626/646-2150 626/646-2166 Fax Michael Rott - General Manager TCR CORPORATION 1600 67th Avenue North Minneapolis, MN 55430-1755 612/560-2200 612/561-0949 Fax John Funk - General Manager TRANSTECHNOLOGY ENGINEERED COMPONENTS Single and multi-thread assembly fasteners including push-nuts and u-nuts Stanley E. Erman - President 1060 West 130th Street Brunswick, Ohio 44212-2316 330/220-5361 330/220-5785 Fax TRANSTECHNOLOGY ENGINEERED COMPONENTS LLC Mountainside Plant, New Jersey 908/233-3300 908/233-3310 Fax Dennis Mulrane -Vice President of Operations Brunswick Plant, Ohio 330/220-5361 330/220-5797 Fax Anderson L. Dobbins -Vice President of Operations Massillon Plant, Ohio 330/832-1511 330/830-7571 Fax Eric Claggett -Vice President of Operations TransTechnology Canada Corporation, Hamilton, Canada 905/549-4661 905/549-9960 Fax Michael Sheehy - Vice President of Operations SALES OFFICES SOUTHFIELD, MICHIGAN 248/226-6900 248/226-5950 Fax SURREY, ENGLAND 44/134 484 6704 44/134 484 6709 Fax OPERATIONAL GROUPS 2000 ANNUAL REPORT 35 38 150 Allen Road Liberty Corner, New Jersey 07938 Phone 908.903.1600 Fax 908.903.1616 www.transtechnology.com [TRANSTECHNOLOGY CORPORATION LOGO] engineered products for global partners(TM) EX-21 6 ex21.txt LIST OF SUBSIDIARIES 1 EXHIBIT 21 SUBSIDIARIES OF THE COMPANY LISTED BELOW ARE THE WHOLLY OWNED SUBSIDIARIES OF TRANSTECHNOLOGY CORPORATION Jurisdiction of Incorporation --------------- Aerospace Rivet Manufacturers Corporation California Anderton (Predecessors) Limited England Electronic Connections and Assemblies, Inc. Delaware Industrial Retaining Ring Company New Jersey NORCO, Inc. Connecticut Palnut Fasteners, Inc. Delaware Rancho TransTechnology Corporation California Retainers, Inc. New Jersey Seeger Inc. Delaware Seeger-Orbis Beteiligungsgesellschaft GmbH Germany Seeger-Orbis GmbH & Co. OHG Germany TransTechnology Brasil Ltda Brazil SSP Industries California SSP International Sales, Inc. California TCR Corporation Minnesota TransTechnology (GB) Limited England TransTechnology Acquisition Corporation Delaware TransTechnology Aerospace, Inc. California TransTechnology Australasia Pty. Ltd. Australia TransTechnology (Europe) Ltd. England TransTechnology International Corporation Virgin Islands TransTechnology Seeger Inc. Delaware TransTechnology Seeger-Orbis GmbH Germany TransTechnology Systems & Services, Inc. Michigan TransTechnology Canada Corporation Ontario, Canada TransTechnology Engineered Components, LLC Delaware EX-27 7 ex27.txt FINANCIAL DATA SCHEDULE
5 1,000 12-MOS MAR-31-2000 MAR-31-2000 3,350 0 62,948 1,129 85,744 134,727 153,068 47,048 482,755 132,965 0 0 0 67 128,816 482,755 299,252 300,394 209,949 78,937 5,545 0 19,945 11,508 4,373 7,135 0 541 0 5,594 1.07 1.07
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