-----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, Q47JpWk57amJ+32ChWOc4gocPNQ03OIjTiEuAF8Nc4VbEgOHmxsl7JGuGHKgWga4 1th/JX5cxTRN6A038Zoofw== /in/edgar/work/0000950123-00-010613/0000950123-00-010613.txt : 20001115 0000950123-00-010613.hdr.sgml : 20001115 ACCESSION NUMBER: 0000950123-00-010613 CONFORMED SUBMISSION TYPE: 10-Q PUBLIC DOCUMENT COUNT: 3 CONFORMED PERIOD OF REPORT: 20001001 FILED AS OF DATE: 20001114 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-Q SEC ACT: SEC FILE NUMBER: 001-07872 FILM NUMBER: 767388 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-Q 1 y42660e10-q.txt TRANSTECHNOLOGY CORPORATION 1 FORM 10-Q -------------------- SECURITIES AND EXCHANGE COMMISSION WASHINGTON, D.C. 20549 (Mark One) [ X ] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the quarterly period ended October 1, 2000 OR [ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the transition period from to ---------- ---------- Commission file number 1-7872 ------------------------- TRANSTECHNOLOGY CORPORATION (Exact name of registrant as specified in its charter) Delaware 95-4062211 (State or other jurisdiction of (I.R.S. employer incorporation or organization) identification no.) 150 Allen Road 07938 Liberty Corner, New Jersey (Zip Code) (Address of principal executive offices)
Registrant's telephone number, including area code: (908) 903-1600 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 ----- ----- As of November 9, 2000, the total number of outstanding shares of registrant's one class of common stock was 6,172,186. 2 TRANSTECHNOLOGY CORPORATION INDEX PART I. Financial Information Page No. --------------------- -------- Item 1. Financial Statements............................................................................. 2 ------- Statements of Consolidated Operations-- Three and Six Month Periods Ended October 1, 2000 and September 26, 1999........................................................................... 3 Consolidated Balance Sheets-- October 1, 2000 and March 31, 2000............................................................... 4 Statements of Consolidated Cash Flows-- Six Month Periods Ended October 1, 2000 and September 26, 1999............................................................................... 5 Notes to Consolidated Financial Statements....................................................... 6-13 Item 2. Management's Discussion and Analysis of Financial ------ Condition and Results of Operations.............................................................. 14-17 Item 3. Quantitative and Qualitative Disclosures about Market Risk....................................... 18 ------- PART II. Other Information ----------------- Item 1. Legal Proceedings................................................................................ 19 ------- Item 4. Submission of Matters to a Vote of Security Holders.............................................. 19 ------- Item 6. Exhibits and Reports on Form 8-K................................................................. 19 ------- SIGNATURES......................................................................................................... 20 EXHIBIT 3.2........................................................................................................ 21-30 EXHIBIT 27......................................................................................................... 31
1 3 PART I. FINANCIAL INFORMATION ITEM 1. FINANCIAL STATEMENTS The following unaudited Statements of Consolidated Operations, Consolidated Balance Sheets, and Consolidated Cash Flows are of TransTechnology Corporation and its consolidated subsidiaries (collectively, "the Company"). These reports reflect all adjustments of a normal recurring nature, which are, in the opinion of management, necessary for a fair presentation of the results of operations for the interim periods reflected therein. The results reflected in the unaudited Statement of Consolidated Operations for the period ended October 1, 2000, are not necessarily indicative of the results to be expected for the entire year. The following unaudited Consolidated Financial Statements should be read in conjunction with the notes thereto, and Management's Discussion and Analysis of Financial Condition and Results of Operations set forth in Item 2 of Part I of this report, as well as the audited financial statements and related notes thereto contained in the Company's Annual Report on Form 10-K filed for the fiscal year ended March 31, 2000. This Form 10-Q contains forward-looking statements that are subject to certain risks and uncertainties that could cause actual results to differ materially from those projected in such statements. Such risks and uncertainties include, but are not limited to, unanticipated slowdowns in the Company's major markets, the impact of competition, the effectiveness of operational changes expected to increase efficiency and productivity, and worldwide economic and political conditions and foreign currency fluctuations that may affect worldwide results of operations. [THIS PAGE INTENTIONALLY LEFT BLANK] 2 4 STATEMENTS OF CONSOLIDATED OPERATIONS UNAUDITED (In Thousands of Dollars, Except Share Data)
Three Months Ended ------------------------------------------- October 1, 2000 September 26, 1999 ----------------- ---------------------- Net sales $ 79,136 $ 62,903 Cost of sales 58,913 44,040 Plant consolidation charge 783 -- ----------------- ---------------------- Gross profit 19,440 18,863 ----------------- ---------------------- General, administrative and selling expenses 13,577 11,739 Interest expense (a) 8,852 3,466 Interest income (26) (73) Other income - net (133) (131) Provision for plant consolidation -- 4,490 ----------------- ---------------------- Income (loss) before income taxes and extraordinary charge (2,830) (628) Income taxes (benefit) (1,075) (298) ----------------- ---------------------- Income (loss) before extraordinary charge (1,755) (330) Extraordinary charge for refinancing of debt (b) -- (541) ----------------- ---------------------- Net income (loss) $ (1,755) $ (871) ================= ====================== Basic earnings per share: Income (loss) before extraordinary charge $ (0.28) $ (0.05) Extraordinary charge for refinancing of debt -- (0.09) ----------------- ---------------------- Net income (loss) $ (0.28) $ (0.14) ================= ====================== Diluted earnings per share: Income (loss) before extraordinary charge $ (0.28) $ (0.05) Extraordinary charge for refinancing of debt -- (0.09) ----------------- ---------------------- Net income (loss) $ (0.28) $ (0.14) ================= ====================== Numbers of shares used in computation of per share information: Basic 6,171,000 6,138,000 Diluted 6,171,000 6,138,000
Six Months Ended -------------------------------------------- October 1, 2000 September 26, 1999 ------------------ ---------------------- Net sales $ 163,501 $ 118,271 Cost of sales 120,099 83,291 Plant consolidation charge 2,113 -- ------------------ ---------------------- Gross profit 41,289 34,980 ------------------ ---------------------- General, administrative and selling expenses 28,286 22,924 Interest expense (a) 17,784 5,096 Interest income (79) (136) Other income - net (659) (363) Provision for plant consolidation -- 4,490 ------------------ ---------------------- Income (loss) before income taxes and extraordinary charge (4,043) 2,969 Income taxes (benefit) (1,536) 1,141 ------------------ ---------------------- Income (loss) before extraordinary charge (2,507) 1,828 Extraordinary charge for refinancing of debt (b) -- (541) ------------------ ---------------------- Net income (loss) $ (2,507) $ 1,287 ================== ====================== Basic earnings per share: Income (loss) before extraordinary charge $ (0.41) $ 0.30 Extraordinary charge for refinancing of debt -- (0.09) ------------------ ---------------------- Net income (loss) $ (0.41) $ 0.21 ================== ====================== Diluted earnings per share: Income (loss) before extraordinary charge $ (0.41) $ 0.30 Extraordinary charge for refinancing of debt -- (0.09) ------------------ ---------------------- Net income (loss) $ (0.41) $ 0.21 ================== ====================== Numbers of shares used in computation of per share information: Basic 6,162,000 6,131,000 Diluted 6,162,000 6,154,000
See accompanying notes to unaudited consolidated financial statements. (a) The interest expense for the six month period ended October 1, 2000, includes a $2.3 million charge related to loan fees associated with the refinancing of the Company's bridge debt. Interest expense for the three month period ended October 1, 2000, includes a $1.2 million charge related to this refinancing. (b) Extraordinary charge for refinancing of debt is net of applicable tax benefit of $339 for the three and six month period ended September 26, 1999. 3 5 CONSOLIDATED BALANCE SHEETS (In Thousands of Dollars, Except Share Data)
(Unaudited) October 1, 2000 March 31, 2000 --------------------- ---------------------- ASSETS Current assets: Cash and cash equivalents $ 1,406 $ 3,350 Accounts receivable (net of allowance for doubtful accounts of $1,385 at October 1, 2000 and $1,129 at March 31, 2000) 59,253 61,819 Inventories 64,768 65,744 Prepaid expenses and other current assets 4,004 1,942 Deferred income taxes 625 1,872 --------------------- ---------------------- Total current assets 130,056 134,727 --------------------- ---------------------- Property, plant and equipment 150,766 153,068 Less accumulated depreciation and amortization 51,272 47,048 --------------------- ---------------------- Property, plant and equipment - net 99,494 106,020 --------------------- ---------------------- Other assets: Notes receivable 3,523 3,455 Costs in excess of net assets of acquired businesses (net of accumulated amortization: October 1, 2000, $13,479; March 31, 2000, $10,933) 189,464 192,115 Patents and trademarks (net of accumulated amortization: October 1, 2000, $1,796; March 31, 2000, $1,334) 20,063 20,809 Deferred income taxes 11,120 9,987 Other 16,069 15,642 --------------------- ---------------------- Total other assets 240,239 242,008 --------------------- ---------------------- Total $ 469,789 $ 482,755 ===================== ====================== LIABILITIES AND STOCKHOLDERS' EQUITY Current liabilities: Current portion of long-term debt $ 7,586 $ 82,585 Accounts payable-trade 19,802 25,550 Accrued compensation 8,250 10,359 Accrued income taxes 2,672 5,799 Other current liabilities 9,669 8,672 --------------------- ---------------------- Total current liabilities 47,979 132,965 --------------------- ---------------------- Long-term debt payable to banks and others 273,800 194,759 --------------------- ---------------------- Deferred income taxes 11,628 11,873 --------------------- ---------------------- Other long-term liabilities 11,846 14,275 --------------------- ---------------------- Stockholders' equity: Preferred stock-authorized, 300,000 shares; none issued -- -- Common stock-authorized, 14,700,000 shares of $.01 par value; issued 6,718,614 at October 1, 2000, and 6,691,232 at March 31, 2000 67 67 Additional paid-in capital 78,091 77,587 Retained earnings 59,767 63,722 Accumulated other comprehensive loss (3,999) (3,157) Unearned compensation (320) (267) --------------------- ---------------------- 133,606 137,952 Less treasury stock, at cost - (546,428 shares at October 1, 2000 and 546,394 at March 31, 2000) (9,070) (9,069) --------------------- ---------------------- Total stockholders' equity 124,536 128,883 --------------------- ---------------------- Total $ 469,789 $ 482,755 ===================== ======================
See accompanying notes to consolidated financial statements. 4 6 STATEMENTS OF CONSOLIDATED CASH FLOWS UNAUDITED (In Thousands of Dollars)
Six Months Ended ------------------------------------------------------------- October 1, 2000 September 26, 1999 -------------------------- ---------------------------- CASH FLOWS FROM OPERATING ACTIVITIES: Net income (loss) $ (2,507) $ 1,287 Adjustments to reconcile net (loss) income to net cash (used in) provided by operating activities: Extraordinary charge for refinancing of debt -- 541 Depreciation and amortization 10,858 6,662 Non-cash interest expense 200 -- Provision for losses on notes and accounts receivable 39 90 Loss on sale or disposal of fixed assets 9 5 Gain on sale of marketable securities (7) -- Change in assets and liabilities net of acquisitions: Decrease (increase) in accounts receivable 1,718 (2,450) (Increase) decrease in inventories (619) 981 (Increase) in other assets (4,968) (5,947) (Decrease) in accounts payable (3,170) (1,127) (Decrease) increase in accrued compensation (1,966) 1,730 (Decrease) in income tax payable (3,127) (270) (Decrease) increase in other liabilities (900) 3,378 -------------------------- ---------------------------- Net cash (used in) provided by operating activities (4,440) 4,880 -------------------------- ---------------------------- CASH FLOWS FROM INVESTING ACTIVITIES: Business acquisitions net of cash acquired -- (186,757) Capital expenditures (3,503) (3,578) Proceeds from sale of fixed assets 903 119 Proceeds from sale of marketable securities 11 3 Decrease in notes receivable 100 167 -------------------------- ---------------------------- Net cash used in investing activities (2,489) (190,046) -------------------------- ---------------------------- CASH FLOWS FROM FINANCING ACTIVITIES: Proceeds from long-term borrowings 123,245 307,077 Payments on long-term debt (117,292) (121,982) Proceeds from issuance of stock under stock option plan -- 240 Dividends paid (799) (795) -------------------------- ---------------------------- Net cash provided by financing activities 5,154 184,540 -------------------------- ---------------------------- Effect of exchange rate changes on cash (169) (25) Decrease in cash and cash equivalents (1,944) (651) Cash and cash equivalents at beginning of period 3,350 2,255 -------------------------- ---------------------------- Cash and cash equivalents at end of period $ $ 1,406 $ 1,604 ========================== ============================ Supplemental Information: Interest payments $ 14,359 $ 3,195 Income tax payments $ 1,717 $ 892 Non-cash interest expense $ 200 $ --
See accompanying notes to unaudited consolidated financial statements. 5 7 NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS (In Thousands) NOTE 1. Earnings Per Share Basic earnings per share is computed by dividing net income by the weighted-average number of shares outstanding. Diluted earnings per share is computed by dividing net income by the sum of the weighted-average number of shares outstanding plus the dilutive effect of shares issuable through the exercise of stock options. The components of the denominator for basic earnings per share and diluted earnings per share are reconciled as follows (in thousands):
Three Months Ended Six Months Ended --------------------------------------- -------------------------------------- October 1, September 26, October 1, September 26, 2000 1999 2000 1999 ---------------- ------------------ --------------- ------------------- Basic Earnings per Share: Weighted-average common shares outstanding 6,171 6,138 6,162 6,131 ================ ================== =============== =================== Diluted Earnings per Share: Weighted-average common shares outstanding 6,171 6,138 6,162 6,131 Stock options (a) -- -- -- 23 ---------------- ------------------ --------------- ------------------- Denominator for Diluted Earnings per Share 6,171 6,138 6,162 6,154 ================ ================== =============== ===================
(a) Excludes anti-dilutive stock options which were 537 and 466 for the three and six month periods ended October 1, 2000, and 153 and 116 for the three and six month periods ended September 26, 1999. Also excludes anti-dilutive warrants for the three and six month periods ended October 1, 2000 of 428. 6 8 NOTE 2. Comprehensive Income Comprehensive income for the three and six month periods ended October 1, 2000 is summarized below.
Three Months Ended Six Months Ended --------------------------------------- -------------------------------------- October 1, September 26, October 1, September 26, 2000 1999 2000 1999 --------------------------------------- -------------------------------------- Net (loss) income $ (1,755) $ (871) $ (2,507) $1,287 Other comprehensive income (loss), net of tax: Foreign currency translation adjustment (668) (114) (1,486) (372) Unrealized investment holding loss (1) (2) (6) -- --------------- ------------------ --------------- ------------------- Total comprehensive (loss) income $ (2,424) $ (987) $ (3,999) $ 915 =============== ================== =============== ===================
NOTE 3. Inventories Inventories are summarized as follows:
October 1, 2000 March 31, 2000 ------------------------ ----------------------- Finished goods $22,472 $24,012 Work in process 19,473 18,367 Purchased and manufactured parts 22,823 23,365 ------------------- ------------------- Total inventories $64,768 $65,744 =================== ===================
7 9 NOTE 4. Long-term Debt Payable to Banks and Others Long-term debt payable, including current maturities, consisted of the following:
October 1, 2000 March 31, 2000 --------------------- ----------------------- Revolver - 8.67% - $154,723 Revolver - 9.20% $162,565 - Term loan - 8.69% - 46,250 Term loan - 9.88% 42,500 - Bridge loan - 15.44% - 75,000 Senior Subordinated Notes - 16.00% 75,200 - Other 1,331 1,371 --------------------- ----------------------- 281,596 277,344 Less current maturities 7,586 82,585 Less unamortized discount 210 --------------------- ----------------------- Total $273,800 $194,759 ===================== =======================
Credit Facilities On August 30, 2000, the Company completed a private placement of $75 million in senior subordinated notes (the "Notes") and certain warrants to purchase shares of the Company's common stock (the "Warrants") to a group of institutional investors (collectively, the "Purchasers"). The Company used the proceeds of the private placement to retire, in full, a $75 million Bridge Loan held by a group of lenders led by Fleet National Bank. The Notes are due on August 29, 2005 and bear interest at a rate of 16% per annum, consisting of 13% cash interest on principal, payable quarterly, and 3% interest on principal, payable quarterly in "payment-in-kind" promissory notes. Prepayment of the Notes is permitted after August 29, 2001 at a premium initially of 9% declining to 5%, 3%, and 1% annually, respectively, thereafter. The Notes contain customary financial covenants and events of default, including a cross-default provision to the Company's senior credit facility. The Warrants entitle the Purchasers to acquire in the aggregate 427,602 shares, or 6.5%, of the common stock of the Company at an exercise price of $9.93 a share, which represents the average daily closing price of the Company's common stock on the New York Stock Exchange for the thirty (30) days preceding the completion of the private placement, and which may be subject to a price adjustment on the first anniversary of the issuance of the Warrants. The Warrants must be exercised by August 29, 2010. These Warrants have been valued at an appraised amount of $0.2 million and have been recorded in paid in capital. In connection with the transaction, the Company and certain of its subsidiaries signed a Consent and Amendment Agreement with its current lenders (the "Lenders") under the Company's existing $250 million senior credit facility (the "Credit Facility"), in which the Lenders consented to the private placement and amended certain financial covenants associated with the Credit Facility. 8 10 The Credit Facility was previously amended on August 31, 1999, to increase the Revolver from $145 million to $200 million, provide for term debt (the "Term Loan") of $50 million, and provide for the Bridge Loan of $75 million in order to provide the necessary funds for the Tinnerman acquisition on that date. The terms of the Bridge Loan required the net payment of an exit fee of $1.0 million on retirement of the Bridge Loan. The Company has unused borrowing capacity for both domestic and international operations of $37.4 million as of October 1, 2000, including letters of credit of $5.0 million. The Revolver and Term Loan are secured by the Company's assets. As of October 1, 2000, the Company had total borrowings of $280.1 million under the agreements which have a weighted-average interest rate of 11.1%. The Company had $1.3 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 October 1, 2000, were $162.6 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 October 1, 2000, $159.6 million of the Company's outstanding borrowings utilized LIBOR, of which $132.9 million were payable in U.S. Dollars and $6.7 million and $20.0 million were payable in Deutsche marks and Pounds sterling, respectively. Borrowings under the Term Loan as of October 1, 2000, were $42.5 million of which $7.5 million is due within one year, $10.0 million is due in year two, $10.0 million is due in year three, and $15.0 million is due upon maturity in year four. The Credit Facility requires the Company to maintain interest rate protection on a minimum of 50% of its variable rate debt. The Company has, accordingly, provided sufficiently 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 Facility also limits the Company's ability to pay dividends to a maximum of $2.0 million annually 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, including the requirement to maintain certain financial ratios relating to performance, interest expense and debt levels. Due to changes in business conditions, business performance, and economic activity in the domestic and international regions, the Company cannot be certain that such covenant ratios will continue to be maintained in the future. 9 11 NOTE 5. Acquisitions On August 31, 1999, the Company acquired substantially all of the assets and assumed certain liabilities, consisting primarily of trade debts and accrued expenses of the Engineered Fasteners Division and its Tinnerman product line (collectively referred to as "Tinnerman") of Eaton Corporation for a total purchase price of $173.3 million in cash. Tinnerman has 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, Rotettges & 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. As part of the acquisition plan, the Company closed its existing Anderton facility in Bingley, U.K. 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. The charge consisted 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 $0.7 million for severance and related benefit payments to approximately 100 Anderton employees. At October 1, 2000, all cash costs associated with this charge have been incurred. 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. For the quarter ended July 2, 2000, the Company recorded a $1.3 million charge to cost of sales, primarily related to excess overtime to produce parts and premium freight charges. In the quarter ended October 1, 2000, the Company recorded a similar charge of $0.8 million to cost of sales. 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 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. The Company has accounted for the above-mentioned acquisitions under the purchase method of accounting and each acquisition has been consolidated with the Company, beginning on the effective date of each acquisition. The excess of the purchase price over the fair value of the net assets acquired 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. 10 12 The following summarizes the Company's unaudited pro forma information as if the Ellison and Tinnerman acquisitions had occurred on April 1, 1999. The pro forma information is based on historical results of operations, adjusted for acquisition costs, additional interest expense, amortization of goodwill, additional depreciation and income taxes. It is not necessarily indicative of what the results would have been had the Company operated the acquired entities since April 1, 1999.
Six Months Ended September 26, 1999 ------------------------- Net sales $ 156,852 ------------------------- Income before extraordinary charge $ 620 ------------------------- Net income $ 79 ------------------------- Basic earnings per share $ 0.01 ------------------------- Diluted earnings per share $ 0.01 ------------------------- Basic Shares 6,131 Diluted Shares 6,154
NOTE 6. New Accounting Pronouncements Statement of Financial Accounting Standards ("SFAS") No. 133, "Accounting for Derivative Instruments and Hedging Activities," was issued in June 1998 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. Staff Accounting Bulletin ("SAB") No. 101, "Revenue Recognition in Financial Statements" was issued in December 1999. SAB 101b, "Second Amendment: Revenue Recognition in Financial Statements", defers implementation of SAB 101 until no later than the fourth quarter of fiscal 2001. The Company is currently evaluating the impact that the foregoing two pronouncements will have on its consolidated financial statements. 11 13 NOTE 7. Disclosures about Segments and Related Information
Six Months Ended ------------------------------------------------------------ October 1, 2000 September 26, 1999 ------------------------ ------------------------- Sales: Specialty fastener products $ 132,530 $ 91,519 Aerospace products 30,971 26,752 ------------------------ ------------------------- Total $ 163,501 $ 118,271 ======================== ========================= Operating profit Specialty fastener products (a) $ 12,175 $ 5,694 Aerospace products 6,838 6,205 ------------------------ ------------------------- Total $ 19,013 $ 11,899 Corporate expense (5,504) (4,026) Corporate interest and other income 232 192 Interest expense (b) (17,784) (5,096) ------------------------ ------------------------- Income (loss) before income taxes and extraordinary charge $ (4,043) $ 2,969 ======================== =========================
(a) The results of operations of the Specialty Fasteners Products segment for the six month period ended October 1, 2000 and September 26, 1999 includes a charge of $2.1 million and $4.5 million, respectively, related to the consolidation of its two U.K. plants. (b) Interest expense for the six month period ended October 1, 2000 includes a $2.3 million charge related to loan fees associated with the refinancing of the Company's bridge debt. 12 14
Three Months Ended ------------------------------------------------------------ October 1, 2000 September 26, 1999 ------------------------ ------------------------- Sales: Specialty fastener products $ 63,592 $ 50,335 Aerospace products 15,544 12,568 ------------------------ ------------------------- Total $ 79,136 $ 62,903 ======================== ========================= Operating profit Specialty fastener products (a) $ 4,995 $ 1,467 Aerospace products 3,285 2,982 ------------------------ ------------------------- Total $ 8,280 $ 4,449 Corporate expense (2,375) (1,632) Corporate interest and other income 117 21 Interest expense (b) (8,852) (3,466) ------------------------ ------------------------- Loss before income taxes $ (2,830) $ (628) ======================== =========================
(a) The results of operations of the Specialty Fasteners Products segment for the three month period ended October 1, 2000 and September 26, 1999 includes a charge of $0.8 million and $4.5 million, respectively, related to the consolidation of its two U.K. plants. (b) Interest expense for the three month period ended October 1, 2000 includes a $1.2 million charge related to loan fees associated with the refinancing of the Company's bridge debt. 13 15 ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS RESULTS OF OPERATIONS All references to three and six month periods in this Management's Discussion refer to the three and six month periods ended October 1, 2000 for fiscal year 2001 and the three and six month periods ended September 26, 1999 for fiscal year 2000. Also, when referred to herein, operating profit means net sales less operating expenses, without deduction for general corporate expenses, interest and income taxes. Unless otherwise indicated, amounts per share refer to diluted amounts per share. Sales for the six month period in 2001 were $163.5 million, a 38% increase from the comparable period in 2000. For the three month period in 2001, sales were $79.1 million, a 26%, increase from the comparable period in 2000. Gross profit for the six month period in 2001 was $41.3 million, an 18% increase from the comparable period in 2000. For the three month period in 2001 gross profit increased 3%. Operating profit for the six month period in 2001 was $19.0 million, a 60% increase from the comparable period in 2000. Operating profit for the three month period in 2001 was $8.3 million, an increase of 86%, from the comparable period in 2000. Operating profit in the six month period in 2001 and 2000 includes a charge of $2.1 million and $4.5 million, respectively, related to the consolidation of its two U.K. plants. Operating profit for the three month periods in 2001 and 2000 includes a charge of $0.8 million and $4.5 million, respectively, related to the consolidation of its two U.K. plants. Operating profit in the 2000 periods only includes the results of Ellison and Tinnerman from the dates of each respective acquisition. Operating profit for the six month period in 2001, includes a net $0.4 million charge from unrealized mark-to-market valuation on outstanding forward currency hedges of forecasted future currency exposures at its European retaining ring businesses. Operating profit for the three month period in 2001, reflects a $0.1 million mark-to-market unrealized gain on currency hedges. Changes in sales, operating profit and new orders from continuing operations are discussed below by segment. The Company reported a net loss for the six month period in 2001 of $2.5 million, or ($0.41) per share, compared to net income of $1.3 million, or $0.21 per share, for the comparable period in 2000. The Company reported a net loss for the three month period in 2001 of $1.8 million, or ($0.28) per share, compared to a net loss of $0.9 million, or ($0.14) per share, for the comparable period in 2000. Interest expense increased $12.7 million for the six month period in 2001, primarily as a result of additional borrowings to fund the Ellison and Tinnerman acquisitions which occurred in the second fiscal quarter of 2000. Interest expense for the three month period increased $5.4 million on increased borrowings to fund these acquisitions and included a $1.1 million charge related to the refinancing of the Bridge Loan. Interest expense in the three and six month period in 2001 included a charge of $2.3 million related to refinancing of the Bridge Loan. New orders received during the six month period in 2001 totaled $168.7 million, an increase of 34% from the comparable period in 2000. For the three month period, new orders totaled $83.2 million, an increase of 22% from the comparable period in 2000. The increase in orders for both the three and six month periods is primarily the result of the acquisitions of Tinnerman and Ellison which were not included for the full period of 2000. At October 1, 2000, total backlog of unfilled orders was $111.9 million, compared to $109.9 million at September 26, 1999. 14 16 SPECIALTY FASTENER PRODUCTS SEGMENT Sales for the Specialty Fastener Products segment were $132.5 million for the six month period ended October 1, 2000, an increase of 45% from the comparable period in 2000. The predominant reason for this sales increase was due to the acquisitions of Tinnerman, which included only one month of sales in 2000, and Ellison, which included just over one month of sales in the period. Sales at the Germany, Brazil and U.S. retaining ring operations were 23% higher than last year, reflecting strong product demand. The hose clamp business, with significant exposure to heavy-duty truck manufacturing and after-market, has seen sales remain essentially flat from last year. Aerospace Rivet has shown 8% lower sales than in 2000, reflecting a loss of a major customer and an industry-wide slowdown in the aerospace components market. Sales at TCR were down slightly over last year. Sales for the Specialty Fastener Products segment were $63.6 million for the three month period ended October 1, 2000, a 26% increase over the comparable period in 2000. The increase is primarily due to the acquisitions of Tinnerman and Ellison as explained above. Sales were 23% higher at the Company's German, Brazilian and U.S. retaining ring operations over the comparable period in 2000 resulting from higher product demand and volume. Sales in 2001 were down 8% at its hose clamp business over the comparable period in 2000 due to weaker product demand. Sales at TCR were also down slightly over last year. Operating profit for the six month period in 2001 was $12.2 million, an increase of 114% from the comparable period in 2000. Much of this increase is attributable to the acquisition of Tinnerman where only one month of operating profit was reported in 2000. In 2001 operating profit included additional plant consolidation charges for excess overtime, staffing and premium freight of $2.1 million. The six month period of 2000 included a $4.5 million charge to consolidate the Ellison and Anderton retaining ring businesses in the U.K. The physical consolidation of the two U.K. facilities is now complete and the old facility has been sold. Operating profit at the Company's German, Brazilian and U.S. retaining rings businesses is above that of last year. Operating profit at the hose clamp business, ARM, and TCR is below last year. Operating profit for the three month period ended October 1, 2000 was $5.0 million versus $1.5 million for the comparable period in 2000. The three month period in 2000 included only one month of Tinnerman's results. The operating profit in the three month period in 2001 includes a plant consolidation charge for excess overtime, staffing and premium freight of $0.8 million compared to a one-time charge of $4.5 million in the 2000 period to consolidate the Anderton and newly acquired Ellison facilities. Operating profit at the hose clamp business, ARM, and TCR business is below the comparable period in 2000. New orders for the six month period were $134.4 million, versus $94.0 million in 2000, primarily reflecting the incremental bookings resulting from acquisitions of Tinnerman and Ellison for the full six month period in 2001. New orders for the three month period in 2001 were $62.4 million, versus $53.4 million in the comparable period in 2000, reflecting primarily the Tinnerman acquisition which was not included for the full period in 2000. Backlog of unfilled orders at October 1, 2000 was $64.3 million, compared to $61.0 million at September 26, 1999. 15 17 Recent trends in the economy in the United States indicate a softening in automotive and heavy truck manufacturing which are major markets for the Company. This development, coupled with expected losses at the Company's UK facility, could have a negative effect on the Company's operating performance over the next several quarters. AEROSPACE PRODUCTS SEGMENT Sales for the Aerospace Products segment were $31.0 million for the six month period in 2001 compared to $26.8 million for the comparable period in 2000. Sales during 2001 at Breeze-Eastern were 19% ahead of 2000. Sales at Norco were 9% ahead of 2000. Sales for the Aerospace products segment were $15.5 million for the three month period in 2001, an increase of $3.0 million, or 24%, from the comparable period in 2000. For the three month period in 2001, sales at Breeze-Eastern were 36% ahead of 2000 and sales at Norco were 6% ahead of 2000. Operating profit for the six month period in 2001 was $6.8 million, a 10% increase over the six month period in 2000. This increase in operating profit was spread between Breeze-Eastern and Norco and was the direct result of sales volume increases. Operating profit for the three month period in 2001 was $3.3 million, an increase of 10% from the comparable period in 2000. Most of this increase occurred at Breeze-Eastern as a result of its higher sales volume. New orders for the six month period in 2001 were $34.3 million versus $31.6 million in 2000. Bookings at Breeze-Eastern were up $0.1 million from 2000. Bookings at Norco were $2.6 million ahead of 2000. New orders for the three month period in 2001 were $20.8 million, a 39% increase over the comparable period in 2000. Bookings for the quarter ended October 1, 2000 at Breeze-Eastern were $4.2 million higher than the comparable period ended in 2000. Bookings at Norco were $1.6 million higher than 2000. Backlog of unfilled orders at October 1, 2000, was $47.5 million, compared to $48.2 million at September 26, 1999. LIQUIDITY AND CAPITAL RESOURCES The Company's debt-to-capitalization ratio was 69% as of October 1, 2000, compared to 68% as of March 31, 2000. The current ratio at October 1, 2000 was 2.7, compared to 1.0 at March 31, 2000. Working capital was $82.1 million as of October 1, 2000, up $80.3 million from March 31, 2000. Both the increase in the current ratio and the increase in working capital reflect the replacement of the short term Bridge Loan with the Senior Subordinated Notes as discussed in the Notes to Unaudited Consolidated Financial Statements. Capital expenditures were $3.5 million for the six month period and $1.7 million in the three month period ended October 1, 2000. There were approximately $3.0 million of capital expenditure commitments outstanding at October 1, 2000. The Company's cash flow from operations and available credit facilities are considered adequate to fund both the short-term and long-term capital needs of the Company subject to the covenant requirements as discussed in the Notes to Unaudited Consolidated Financial Statements. 16 18 The Company's credit facility contains customary financial covenants, including requirement to maintain certain financial ratios relating to performance, interest expense and debt levels. For the fiscal quarter ended October 1, 2000, the Company is in compliance with those covenants. Due to several factors, including the changes in business conditions and the Company's performance referenced above in the discussion of the results of operations for the Company's business segments, as well as external economic conditions in the domestic and international markets in which the Company competes, the Company may be unable to maintain some or all of the foregoing financial ratios in the quarterly period ending December 31, 2000 or during future periods. In the event that such ratios are not maintained and the Company does not obtain the agreement of the lenders under the senior credit facility to waive compliance with or modify such covenants, the Company would be in default of such covenants under the senior credit facility. In August 2000, the Company received $1.0 million for the sale of the Anderton facility located in Bingley, England. 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. IMPACT OF INFLATION The Company's primary costs, inventory and labor, increase with inflation. Recovery of the costs has to come from improved operating efficiencies and, to the extent permitted by our competition, through improved gross profit margins. 17 19 ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT 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 and interest rates. The Company does not enter into derivatives or other financial instruments for trading or speculative purposes. The Company enters into financial instruments to manage and reduce the impact of changes in foreign currency exchange rates and interest rates. The counter parties are major financial institutions. The Company uses forward exchange contracts principally to hedge foreign currency intercompany loans made between its corporate headquarters and its foreign subsidiaries and between various foreign subsidiaries. As part of its overall strategy to manage the level of exposure to the risk of foreign currency exchange rate fluctuations, the Company hedges a portion of anticipated net sales that are expected to be denominated in foreign currency. In addition, the Company hedges a portion of exported future intercompany purchases denominated in foreign currency anticipated over the ensuing twelve month period. At October 1, 2000, the Company had contracts for the sale of $14.6 million and the purchase of $6.6 million of foreign currencies at fixed rates. Based on the foreign exchange contracts outstanding at October 1, 2000, each 10% devaluation of the U.S. dollar compared to the level of foreign exchange rates for currencies under contact at October 1, 2000, would result in approximately $1.1 million of unrealized losses on foreign exchange contacts involving foreign currency sales and purchases. Conversely, a 10% appreciation of the U.S. dollar would result in $1.1 million of unrealized gains. Consistent with the nature of the economic hedge provided by such foreign exchange contracts, such unrealized gains and losses would be offset by corresponding decreases and increases, respectively, in the dollar value of future foreign currency underlying transactions. The Company enters into interest rate swap agreements to manage 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 October 1, 2000, the Company had interest rate swap agreements to convert $125.0 million of notional amount of floating interest rate debt to fixed rate. At October 1, 2000, the fair value of these swap agreements was approximately $0.8 million. In the event of a 25 basis point (one-quarter percent) increase in interest rates, the fair value of these swap agreements would have increased by approximately $0.5 million as of October 1, 2000. 18 20 PART II. OTHER INFORMATION ITEM 1. LEGAL PROCEEDINGS The Company is engaged in various legal proceedings incidental to its business. It is the opinion of management that, after taking into consideration information furnished by its counsel, these matters will not have a material effect on the Company's consolidated financial position or the results of the Company's operations in future periods. ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS At the annual meeting of the Company, held on July 13, 2000, all eight directors of the Company nominated for reelection and the one new director of the Company, Daniel Abramowitz, nominated for election, were elected for a term of one year. The results of the voting on the election of directors were as follows:
VOTES VOTES FOR WITHHELD ----------- --------- Daniel Abramowitz 5,120,532 34,940 Gideon Argov 4,797,528 357,944 Walter Belleville 4,794,928 360,544 Michael J. Berthelot 4,685,602 469,870 Thomas V. Chema 4,796,928 358,544 John Dalton 4,797,328 358,144 Michel Glouchevitch 4,797,425 358,047 James A. Lawrence 4,795,420 360,052 William Recker 4,797,401 358,071
ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K (a) Exhibits -------- 3.2 Bylaws of the Company amended and restated as of July 13, 2000 27 Financial Data Schedule (b) A report on Form 8-K was filed on September 14, 2000 to report the August 29, 2000 sale by the Company of subordinated promissory notes due August 29, 2005, in the aggregate principal amount of $75,000,000 and of warrants to purchase an aggregate of 427,602 shares of common stock, $.01 par value per share, to J.H. Whitney Mezzanine Fund L.P.; Albion Alliance Mezzanine Fund I, L.P.; Albion Alliance Mezzanine Fund II, L.P.; The Equitable Life Assurance Society of the United States; Fleet Corporate Finance, Inc. and Citizens Capital, Inc. 19 21 SIGNATURES Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized. TRANSTECHNOLOGY CORPORATION (Registrant) Dated: November 13, 2000 By: /s/Joseph F. Spanier ----------------------------------------- JOSEPH F. SPANIER, Vice President Treasurer and Chief Financial Officer* *On behalf of the Registrant and as Principal Financial and Accounting Officer. 20 EX-3.2 2 y42660ex3-2.txt AMENDED AND RESTATED BYLAWS 1 EXHIBIT 3.2 BYLAWS OF TRANSTECHNOLOGY CORPORATION (A Delaware Corporation) ARTICLE I Offices Section 1.01. REGISTERED OFFICE. The registered office of TransTechnology Corporation (the "Corporation") in the State of Delaware shall be at Corporation Trust Center, 100 West Tenth Street, in the City of Wilmington, County of New Castle, State of Delaware, and the name of the registered agent at that address shall be The Corporation Trust Company. Section 1.02. PRINCIPAL EXECUTIVE OFFICE. Effective as of May 10, 1996 the principal executive address of the corporation shall be located at 150 Allen Road, Liberty Corner, New Jersey 07938. The Board of Directors of the Corporation (the "Board") may change the location of said principal executive office. Section 1.03. OTHER OFFICES. The Corporation may also have an office or offices at such other place or places, either within or without the State of Delaware, as the Board may from time to time determine or as the business of the Corporation may require. ARTICLE II Meetings of Stockholders Section 2.01. ANNUAL MEETINGS. The annual meeting of stockholders of the Corporation shall be held on such date and at such time as the Board shall determine. At each annual meeting of stockholders, directors shall be elected in accordance with the provisions of Section 3.03 and any other proper business may be transacted. Section 2.02. SPECIAL MEETINGS. Special meetings of stockholders for any purpose may be called at any time by a majority of the Board, the Chairman of the Board, the President or the Secretary. Special meetings may not be called by any other person. Each special meeting shall be held at such date and time as is requested by the person or persons calling the meeting, within the limits fixed by law. Section 2.03. PLACE OF MEETINGS. Each annual or special meeting of stockholders shall be held at such location as may be determined by the Board or, if no such determination is made, at such place as may be determined by the Chairman of the Board. If no location is so determined, any annual or special meeting shall be held at the principal executive office of the Corporation. Section 2.04. NOTICE OF MEETINGS. Except as otherwise required by law, notice of each meeting of the stockholders, whether annual or special, shall be given not less than 10 nor more than sixty days before the date of the meeting to each stockholder of record entitled to vote at such meeting by delivering a typewritten or printed notice thereof to him personally, or by depositing such notice in the United States mail, in a postage prepaid envelope, directed to him at his post-office address furnished by him to the Secretary for such purpose or, if he shall not have furnished to the Secretary his address for such purpose, then at his post-office address last known to the Secretary, or by transmitting a notice thereof to him at such address by telegraph, cable or wireless. 2 Except as otherwise expressly required by law, the notice shall state the place, date and hour of the meeting, and, in the case of a special meeting, shall also state the purpose for which the meeting is called. Notice of any meeting of stockholders shall not be required to be given to any stockholder to whom notice may be omitted pursuant to applicable Delaware law or who shall have waived such notice and such notice shall be deemed waived by any stockholder who shall attend such meeting in person or by proxy, except a stockholder who shall attend such meeting for the express purpose of objecting, at the beginning of the meeting, to the transaction of any business because the meeting is not lawfully called or convened. Except as otherwise expressly required by law, notice of any adjourned meeting of the stockholders need not be given if the time and place thereof are announced at the meeting at which the adjournment is taken. Section 2.05. CONDUCT OF MEETINGS. All annual and special meetings of stockholders shall be conducted in accordance with such rules and procedures as the Board may determine subject to the requirements of applicable law and, as to matters not governed by such rules and procedures, as the chairman of such meeting shall determine. The chairman of any annual or special meeting of stockholders shall be the Chairman of the Board if he is willing, and if not, then the President. The Secretary, or in the absence of the Secretary, a person designated by the Chairman of the Board or President, as the case may be, shall act as secretary of the meeting. Section 2.06. QUORUM. At any meeting of stockholders, the presence, in person or by proxy, of the holders of record of a majority of shares then issued and outstanding and entitled to vote at the meeting shall constitute a quorum for the transaction of business; provided, however, that this Section 2.06 shall not affect any different requirement which may exist under statute, pursuant to the rights of any authorized class or series of stock, or under the Certificate of Incorporation of the Corporation (the "Certificate") for the vote necessary for the adoption of any measure governed thereby. In the absence of a quorum, the stockholders present in person or by proxy, by majority vote and without further notice, may adjourn the meeting from time to time until a quorum is attained. At any reconvened meeting following such an adjournment at which a quorum shall be present, any business may be transacted which might have been transacted at the meeting as originally notified. Section 2.07. VOTES REQUIRED. A majority of the votes cast at a duly called meeting of stockholders, at which a quorum is present, shall be sufficient to take or authorize action upon any matter which may properly come before the meeting, unless the vote of a greater or different number thereof is required by statute, by the rights of any authorized class of stock or by the Certificate. Unless the Certificate or a resolution of the Board of Directors adopted in connection with the issuance of shares of any class or series of stock provides for a greater or lesser number of votes per share, or limits or denies voting rights, each outstanding share of stock, regardless of class, shall be entitled to one vote on each matter submitted to a vote at a meeting of stockholders. Section 2.08. PROXIES. A stockholder may vote the shares owned of record by him either in person or by proxy executed in writing (which shall include writings sent by telex, telegraph, cable or facsimile transmission) by the stockholder himself or by his duly authorized attorney-in-fact. No proxy shall be valid after 3 years from its date, unless the proxy provides for a longer period. Each proxy shall be in writing, subscribed by the stockholder or his duly authorized attorney-in-fact, and dated, but it need not be sealed, witnessed or acknowledged. Section 2.09. LIST OF STOCKHOLDERS. The Secretary of the Corporation shall prepare and make (or cause to be prepared and made), at least 10 days before every meeting of stockholders, a complete list of stockholders entitled to vote at the meeting, arranged in alphabetical order and showing the address of, and the number of shares registered in the name of, each stockholder. Such list shall be open to the examination of any stockholder, for any purpose 3 germane to the meeting, during ordinary business hours, for a period of at least 10 days prior to the meeting, either at a place within the city where the meeting is to be held, which place shall be specified in the notice of the meeting, or, if not so specified, at the place where the meeting is to be held. The list shall also be produced and kept at the time and place of the meeting during the duration thereof, and may be inspected by any stockholder who is present. Section 2.10. INSPECTORS OF ELECTION. In advance of any meeting of stockholders, the Board may appoint Inspectors of Election to act at such meeting or at any adjournments thereof. If such Inspectors are not so appointed or fail or refuse to act, the chairman of any such meeting may (and, upon the demand of any stockholder or stockholder's proxy, shall) make such an appointment. The number of Inspectors of Election shall be 1 or 3. If there are 3 Inspectors of Election, the decision, act or certificate of a majority shall be effective and shall represent the decision, act or certificate of all. No such Inspector need be a stockholder of the Corporation. The Inspectors of Election shall determine the number of shares outstanding, the voting power of each, the shares represented at the meeting, the existence of a quorum and the authenticity, validity and effect of proxies; they shall receive votes, ballots or consents, hear and determine all challenges and questions in any way arising in connection with the right to vote, count and tabulate all votes or consents, determine when the polls shall close and determine the result; and finally, they shall do such acts as may be proper to conduct the election or vote with fairness to all stockholders. On request, the Inspectors shall make a report in writing to the secretary of the meeting concerning any challenge, question or other matter as may have been determined by them and shall execute and deliver to such secretary a certificate of any fact found by them. ARTICLE III Directors Section 3.01. GENERAL POWERS. Subject to any requirements in the Certificate or the Bylaws, and of applicable law as to action which must be authorized or approved by the stockholders, any and all corporate powers shall be exercised by or under the authority of, and the business and affairs of the Corporation shall be under the direction of, the Board to the fullest extent permitted by law. Without limiting the generality of the foregoing, it is hereby expressly declared that the directors shall have the following powers, to wit: First - To select and remove all the officers, agents and employees of the Corporation, prescribe such powers and duties for them as may not be inconsistent with law, with the Certificate or the Bylaws and fix their compensation. Second - To conduct, manage and control the affairs and business of the Corporation, and to make such rules and regulations therefor not inconsistent with law, or with the Certificate or the Bylaws, as they may deem best. Third - To change the location of the registered office of the Corporation in Section 1.01; to change the principal executive office for the transaction of the business of the Corporation from one location to another as provided in Section 1.02; to fix and locate, from time to time, one or more subsidiary offices of the Corporation within or without the State of Delaware as provided in Section 1.03; to designate any place within or without the State of Delaware for the holding of any stockholders' meeting; and to adopt, make and use a corporate seal, and to prescribe the forms of certificates of stock, and to alter the form of such seal and of such certificates, from 4 time to time, and in their judgment as they may deem best; provided, however, that such seal and such certificates shall at all times comply with the law. Fourth - To authorize the issuance of shares of stock of the Corporation, from time to time, upon such terms and for such considerations as may be lawful. Fifth - To borrow money and incur indebtedness for the purposes of the Corporation, and to cause to be executed and delivered therefor, in the corporate name, promissory notes, bonds, debentures, deeds of trust and securities therefor. Section 3.02. NUMBER AND TERM OF OFFICE. Effective as of July 13, 2000, the authorized number of directors of the corporation shall be nine (9) until this section is amended by a resolution duly adopted by the Board or by the stockholders, in either case in accordance with the provisions of Article V of the Certificate. Directors need not be stockholders. Each of the directors shall hold office until his successor shall have been duly elected and shall qualify or until he shall resign or shall have been removed in the manner hereinafter provided. Section 3.03. ELECTION OF DIRECTORS. The directors shall be elected by the stockholders of the Corporation, and at each election the persons receiving the greater number of votes, up to the number of directors then to be elected, shall be the persons then elected. The election of directors is subject to any provisions contained in the Certificate relating thereto. Section 3.04. RESIGNATIONS. Any director may resign at any time by giving written notice to the Board or to the Secretary. Any such resignation shall take effect at the time specified therein, or, if the time is not specified, it shall take effect immediately upon receipt; and, unless otherwise specified therein, the acceptance of such resignation shall not be necessary to make it effective. Section 3.05. VACANCIES. Except as otherwise provided in the Certificate, any vacancy in the Board, whether because of death, resignation, disqualification, an increase in the number of directors, or any other cause, may be filled by vote of the majority of the remaining directors, although less than a quorum. Each director so chosen to fill a vacancy shall hold office until his successor shall have been elected and shall qualify or until he shall resign or shall have been removed. No reduction of the authorized number of directors shall have the effect of removing any director prior to the expiration of his term of office. Section 3.06. PLACE OF MEETING, ETC. The Board or any committee thereof may hold any of its meetings at any place, within or without the State of Delaware, as the Board or such committee may, from time to time, by resolution designate or as shall be designated by the person or persons calling the meeting or in the notice or a waiver of notice of any such meeting. Directors may participate in any regular or special meeting of the Board or any committee thereof by means of conference telephone or similar communications equipment pursuant to which all persons participating in the meeting of the Board or such committee can hear each other, and such participation shall constitute presence in person at such meeting. Section 3.07. FIRST MEETING. The Board shall meet as soon as practicable after each annual election of directors and notice of such first meeting shall not be required. Section 3.08. REGULAR MEETING. Regular meetings of the Board may be held at such times as the Board shall, from time to time, by resolution determine. If any date fixed for a regular meeting shall be a legal holiday at the place where the meeting is to be held, then the meeting shall 5 be held at the same hour and place on the next succeeding business day not a legal holiday. Except as provided by law, notice of regular meetings need not be given. Section 3.09. SPECIAL MEETING. Special meetings of the Board for any purpose shall be called at any time by the Chairman of the Board or, if he is absent or unable or refuses to act, by the President or, if he is absent or unable or refuses to act, by any Vice President, Secretary or by any two directors. For any special meeting of the Board of Directors, the Executive Committee, if such a committee has been created pursuant to Section 3.13 hereof, may by resolution change the location of that meeting, provided the Executive Committee resolution to that effect is adopted not later than the later of a) five days before the called date of the meeting, or b) one day after the receipt of the call of the meeting by the Chairman of the Executive Committee. Except as otherwise provided by law or by the Bylaws, written notice of the time and place of special meetings shall be delivered personally to each director, or sent to each director by mail or by other form of written communication, charges prepaid, addressed to him at his address as it is shown upon the records of the Corporation, or if it is not so shown on such records and is not readily ascertainable, at the place in which the meetings of the directors are regularly held. In case such notice is mailed or telegraphed, it shall be deposited in the United States mail or delivered to the telegraph company in the county in which the principal executive office for the transaction of business of the Corporation is located at least forty-eight hours prior to the time of the holding of the meeting. In case such notice is delivered personally as above provided, it shall be so delivered at least 24 hours prior to the time of the holding of the meeting. Such mailing, telegraphing or delivery as above provided shall be due, legal and personal notice to such director. Except where otherwise required by law or by the Bylaws, notice of the purpose of a special meeting need not be given. Notice of any meeting of the Board shall not be required to be given to any director who is present at such meeting, except a director who shall attend such meeting for the express purpose of objecting, at the beginning of the meeting, to the transaction of any business because the meeting is not lawfully called or convened. Section 3.10. QUORUM AND MANNER OF ACTING. Except as otherwise provided in the Bylaws, the Certificate or by applicable law, the presence of a majority of the total number of directors shall be required to constitute a quorum for the transaction of business at any meeting of the Board, and all matters shall be decided at any such meeting, a quorum being present, by the affirmative votes of a majority of the directors present. In the absence of a quorum, a majority of directors present at any meeting may adjourn the same, from time to time, until a quorum shall be present. Notice of any adjourned meeting need not be given. The directors shall act only as a Board, and the individual directors shall have no power as such. Section 3.11. ACTION BY CONSENT. Any action required or permitted to be taken at any meeting of the Board or of any committee thereof may be taken without a meeting if consent in writing is given thereto by all members of the Board or of such committee, as the case may be, and such consent is filed with the minutes of proceedings of the Board or committee. Section 3.12. COMPENSATION. Directors who are not employees of the Corporation or any of its subsidiaries may receive an annual fee for their services as directors in an amount fixed by resolution of the Board, and in addition, a fixed fee, with or without expenses of attendance, may be allowed by resolution of the Board for attendance at each meeting, including each meeting of a committee of the Board. Nothing herein contained shall be construed to preclude any director from serving the Corporation in any other capacity as an officer, agent, employee, or otherwise, and receiving compensation therefor. Section 3.13. COMMITTEES. The Board may, by resolution passed by a majority of the whole Board, designate one or more committees, each committee to consist of one or more of the directors of the Corporation. Any such committee, to the extent provided in the resolution of the Board and subject to any restrictions or limitations on the delegation of power and authority imposed 6 by applicable law, shall have and may exercise all the powers and authority of the Board in the management of the business and affairs of the Corporation, and may authorize the seal of the Corporation to be affixed to all papers which may require it. Any such committee may keep written minutes of its meetings and shall report on its meetings to the Board at the next regular meeting of the Board. Section 3.14 MEETINGS OF COMMITTEES. Each committee of the Board shall fix its own rules of procedure consist with the provisions of applicable law and of any resolutions of the Board governing such committee. Each committee shall meet as provided by such rules or such resolution of the Board. Unless otherwise provided by such rules or by such resolution, the provisions of the Bylaws under Article III entitled "Directors" relating to the place of holding meetings and the notice required for meetings of the Board of Directors shall govern the place of meetings and notice of meetings for committees of the Board. A majority of the members of each committee shall constitute a quorum thereof, except that when a committee consists of 1 member, then the 1 member shall constitute a quorum. In the absence of a quorum, a majority of the members present at the time and place of any meeting may adjourn the meeting from time to time until a quorum shall be present and the meeting may be held as adjourned without further notice or waiver. Except in cases where it is otherwise provided by the rules of such committee or by a resolution of the Board, the vote of a majority of the members present at a duly constituted meeting at which a quorum is present shall be sufficient to pass any measure by the committee. ARTICLE IV Officers Section 4.01 DESIGNATION, ELECTION AND TERM OF OFFICE. The Corporation shall have a Vice-Chairman of the Board, a President, a chief financial officer, such vice presidents as the Board deems appropriate, and a Secretary. These officers shall be elected annually by the Board at the organizational meeting immediately following the annual meeting of stockholders, and each such officer shall hold office until the corresponding meeting of the Board in the next year and until his successor shall have been elected and qualified or until his earlier resignation, death or removal. In its discretion, the Board may leave unfilled for any period it may fix any office to the ext allowed by law. Any vacancy in any of the above offices may be filled for the unexpired portion of the term by the Board at any regular or special meeting. Section 4.02. CHAIRMAN OF THE BOARD. The Chairman of the Board shall preside, if present and willing, at all stockholders and Board of Directors' meetings. In addition, he shall have such other duties as may, from time-to-time, be assigned to him by the Board of Directors. Section 4.03. VICE-CHAIRMAN OF THE BOARD. The Vice-Chairman of the Board shall, in the absence or inability of the Chairman of the Board to perform such duties, assume the duties and responsibilities of the Chairman of the Board as defined in Section 4.02 of these Bylaws; and shall have such other duties as may, from time-to-time, be assigned him by the Board of Directors. Section 4.04. PRESIDENT. Except to the extent that the Bylaws or the Board of Directors assign specific powers and duties to the Chairman of the Board and/or the Vice-Chairman of the Board, the President shall be the Corporation's General Manager and Chief Executive Officer and, subject to the control of the Board of Directors, shall have general charge, supervision and control over the Corporation's assets, businesses, operations and its officers. The managerial powers and duties of the President include, but are not limited to, all of the general powers and duties of management usually vested in the office of a president of a corporation, and the making of reports to the Board of Directors and stockholders. 7 Section 4.05. EXECUTIVE VICE PRESIDENT. The Board may appoint an Executive Vice President, who shall be accountable to the President. He shall perform such duties as may be assigned to him, from time to time, by the Board in its enabling resolution and by the President. Section 4.06. VICE PRESIDENT/CHIEF FINANCIAL OFFICER. The chief financial officer of the Corporation shall be a vice president. He shall report to the President and be responsible for the management and supervision of all financial matters and for the financial growth and stability of the Corporation. In addition, he shall have the duties usually vested in the treasurer's office of a corporation. Section 4.07. VICE PRESIDENTS. Vice Presidents of the Corporation that are elected by the Board shall perform such duties as may be assigned to them, from time to time, by the President. Such vice presidents may be designated as Group Vice Presidents, Senior Vice Presidents or other appropriate designations given by the Board in its enabling resolutions. Section 4.08. SECRETARY. The Secretary shall keep the minutes of the meetings of the stockholders, the Board and all committee meetings. He shall be the custodian of the corporate seal and shall affix it to all documents which he is authorized by law or the Board to sign and seal. He also shall perform such other duties as may be assigned to him, from time to time, by the Chairman of the Board or the Board. Section 4.09. OTHER OFFICERS. The Board may also elect one or more Assistant Vice Presidents, Assistant Secretaries and Assistant Treasurers. Section 4.10. WHEN DUTIES OF AN OFFICER MAY BE DELEGATED. In the case of the absence or disability of an officer or for any other reason that may seem sufficient to the Board, the Board, or any officer designated by it, or the Chairman of the Board may, for the time of the absence or disability, delegate such officer's duties and powers to any other officer of the Corporation. Section 4.11. RESIGNATIONS. Any officer may resign at any time by giving written notice to the Board, to the Chairman of the Board, to the President, or to the Secretary. Any such resignation shall take effect at the time specified therein unless otherwise determined by the Board. The acceptance of a resignation by the Corporation shall not be necessary to make it effective. Section 4.12. REMOVAL. Any officer of the Corporation may be removed, with or without cause, by the affirmative vote of a majority of the entire Board. ARTICLE V Contracts, Checks, Drafts, Bank Accounts, Etc. Section 5.01. EXECUTION OF CONTRACTS. The Board, except as otherwise provided in the Bylaws, may authorize any officer or officers, agent or agents, to enter into any contract or execute any instrument in the name of and on behalf of the Corporation, and such authority may be general or confined to specific instances; and unless so authorized by the Board or by the Bylaws, no officer, agent or employee shall have any power or authority to bind the Corporation by any contract or engagement or to pledge its credit or to render it liable for any purpose or in any amount. Section 5.02. CHECKS, DRAFTS, ETC. All checks, drafts or other orders for payment of money, notes or other evidence of indebtedness, issued in the name of or payable to the Corporation, shall be signed or endorsed by such person or persons and in such manner as, from time to time, shall be determined by resolution of the Board. Each such officer, assistant, agent or attorney shall give such bond, if any, as the Board may require. 8 Section 5.03. DEPOSITS. All funds of the Corporation not otherwise employed shall be deposited, from time to time, to the credit of the Corporation in such banks, trust companies or other depositaries as the Board may select, or as may be selected by any officer or officers, assistant or assistants, agent or agents, or attorney or attorneys of the Corporation to whom such powers shall have been delegated by the Board. For the purpose of deposit and for the purpose of collection for the account of the Corporation, the President, any Vice President or the chief financial officer (or any other officer or officers, assistant or assistants, agent or agents, or attorney or attorneys of the Corporation who shall from time to time be determined by the Board) may endorse, sign and deliver checks, drafts and other orders for the payment of money which are payable to the order of the Corporation. Section 5.04. GENERAL AND SPECIAL BANK ACCOUNTS. The Board may, from time to time, authorize the opening and keeping of general and special bank accounts with such banks, trust companies or other depositaries as the Board may select or as may be selected by any officer, assistant or assistants, agent or agents, or attorney or attorneys of the Corporation to whom such power shall have been delegated by the Board. The Board may make such special rules and regulations with respect to such bank accounts, not inconsistent with the provisions of the Bylaws as it may deem expedient. ARTICLE VI Indemnification Except to the extent prohibited by then applicable law, the Corporation (i) shall indemnify and hold harmless each person who was or is a party to, or is threatened to be made a party to, any threatened, pending or completed action, suit or proceeding, whether or not by or in the right of the Corporation, and whether civil, criminal, administrative, investigative or otherwise (any such action, suit or proceeding being hereafter in this Article referred to as a "proceeding"), by reason of the fact that such person is or was a director or officer of the Corporation, is or was serving at the request of the Corporation as a director or officer of another corporation, partnership, joint venture, trust or other enterprise, or was a director or officer of a foreign or domestic corporation which was a predecessor corporation of the Corporation or of another enterprise at the request of such predecessor corporation; and (ii) may indemnify and hold harmless each person who was or is a party to, or is threatened to be made a party to, any such proceeding by reason of the fact that such person is or was an employee or agent of the Corporation, is or was serving at the request of the Corporation as an employee or agent of another corporation, partnership, joint venture, trust or other enterprise, or was an employee or agent of a foreign or domestic corporation which was a predecessor corporation of the Corporation or of any enterprise at the request of such corporation (any such person being hereafter in the Article referred to as an "indemnifiable party"). Where required by law, the indemnification provided for in this Article shall be made only as authorized in the specific case upon a determination, in the manner provided by law, that the indemnification of the indemnifiable party is proper in the circumstances. The Corporation shall advance to indemnifiable parties expenses incurred in defending any proceeding prior to the final disposition thereof except to the ext prohibited by then applicable law. This Article shall create a right of indemnification for each such indemnifiable party whether or not the proceeding to which the indemnification relates arose in whole or in part prior to adoption of this Article (or the adoption of the comparable provisions of the Bylaws of the Corporation's predecessor corporation) and, in the event of the death of an indemnifiable party, such right shall extend to such indemnifiable party's legal representatives. The right of indemnification hereby given shall not be exclusive of any right such indemnifiable party may have, whether by law or under any agreement, insurance policy, vote of the Board or stockholders, or otherwise. The Corporation shall have power to purchase and maintain insurance on behalf of any indemnifiable party against any liability asserted against or 9 incurred by the indemnifiable party in such capacity or arising out of the indemnifiable party's status as such whether or not the Corporation would have the power to indemnify the indemnifiable party against such liability. ARTICLE VII Stock Section 7.01. CERTIFICATES. Except as otherwise provided by law, each stockholder shall be entitled to a certificate or certificates which shall represent and certify the number and class (and series, if appropriate) of shares of stock owned by him in the Corporation. Each certificate shall be signed in the name of the Corporation by the Chairman of the Board and the President, together with the Secretary. Any or all of the signatures on any certificate may be facsimile. In case any officer, transfer agent or registrar who has signed or whose facsimile signature has been placed upon a certificate shall have ceased to be such officer, transfer agent or registrar before such certificate is issued, it may be issued by the Corporation with the same effect as if such person were an officer, transfer agent or registrar at the date of issue. Section 7.02. TRANSFER OF SHARES. Shares of stock shall be transferable on the books of the Corporation only by the holder thereof, in person or by his duly authorized attorney, upon the surrender of the certificate representing the shares to be transferred, properly endorsed, to the Corporation's registrar if the Corporation has a registrar. The Board shall have power and authority to make such other rules and regulations concerning the issue, transfer and registration of certificates of the Corporation's stock as it may deem expedient. Section 7.03. TRANSFER AGENTS AND REGISTRARS. The Corporation may have one or more transfer agents and one or more registrars of its stock whose respective duties the Board or the Secretary may, from time to time, define. No certificate of stock shall be valid until countersigned by a transfer agent, if the Corporation has a transfer agent, or until registered by a registrar, if the Corporation has a registrar. The duties of transfer agent and registrar may be combined. Section 7.04. STOCK LEDGERS. Original or duplicate stock ledgers, containing the names and addresses of the stockholders of the Corporation and the number of shares of each class of stock held by them, shall be kept at the principal executive office of the Corporation or at the office of its transfer agent or registrar. Section 7.05. RECORD DATES. The Board shall fix, in advance, a date as the record date for the purpose of determining stockholders entitled to notice of, or to vote at, any meeting of stockholders or any adjournment thereof, or stockholders entitled to receive payment of any dividend or other distribution or allotment of any rights, or entitled to exercise any rights in respect of any change, conversion or exchange of stock, or in order to make a determination of stockholders for any other proper purpose. Such date in any case shall be not more than sixty days, and in case of a meeting of stockholders, not less than 10 days, prior to the date on which the particular action requiring such determination of stockholders is to be taken. Only those stockholders of record on the date so fixed shall be entitled to any of the foregoing rights, notwithstanding the transfer of any such stock on the books of the Corporation after any such record date fixed by the Board. Section 7.06. NEW CERTIFICATES. In case any certificate of stock is lost, stolen, mutilated or destroyed, the Board may authorize the issuance of a new certificate in place thereof upon such terms and conditions as it may deem advisable; or the Board may delegate such power to the Secretary; but the Board or Secretary or agents, in their discretion, may refuse to issue such a new certificate unless the Corporation is ordered to do so by a court of competent jurisdiction. 10 ARTICLE VIII General Provisions Section 8.01. DIVIDENDS. Subject to limitations contained in Delaware Law and the Certificate, the Board may declare and pay dividends upon the shares of capital stock of the Corporation, which dividends may be paid either in cash, securities of the Corporation or other property. Section 8.02. VOTING OF STOCK IN OTHER CORPORATIONS. Any shares of stock in other corporations or associations which may, from time to time, be held by the Corporation, may be represented and voted at any of the stockholders' meetings thereof by the Chairman of the Board, the President or the Secretary. The Board, however, may by resolution appoint some other person or persons to vote such shares, in which case such person or persons shall be entitled to vote such shares upon the production of a certified copy of such resolution. Section 8.03. AMENDMENTS. These Bylaws may be adopted, repealed, rescinded, altered or amended only as provided in the Certificate. Restated: July 13, 2000 EX-27 3 y42660ex27.txt FINANCIAL DATA SCHEDULE
5 1,000 6-MOS MAR-31-2001 OCT-01-2000 1,406 0 59,253 1,385 64,768 130,056 150,766 51,272 469,789 47,979 0 0 0 67 (13,389) 469,789 163,501 164,239 120,099 122,212 46,070 0 17,784 (4,043) (1,536) (2,507) 0 0 0 (2,507) (0.41) (0.41)
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