-----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, S1OBxuVX4Pt8FoDz+yyLReO8d+PRJQWwRf25AlPpkuomJPqOechbB935/Nek4ACt ZpKTFjZi4nNTxUvnOXfx/A== 0000950123-97-006712.txt : 19970813 0000950123-97-006712.hdr.sgml : 19970813 ACCESSION NUMBER: 0000950123-97-006712 CONFORMED SUBMISSION TYPE: 10-Q PUBLIC DOCUMENT COUNT: 3 CONFORMED PERIOD OF REPORT: 19970629 FILED AS OF DATE: 19970812 SROS: NYSE FILER: COMPANY DATA: COMPANY CONFORMED NAME: TRANSTECHNOLOGY CORP CENTRAL INDEX KEY: 0000099359 STANDARD INDUSTRIAL CLASSIFICATION: CUTLERY, HANDTOOLS & GENERAL HARDWARE [3420] IRS NUMBER: 954062211 STATE OF INCORPORATION: DE FISCAL YEAR END: 0331 FILING VALUES: FORM TYPE: 10-Q SEC ACT: 1934 Act SEC FILE NUMBER: 001-07872 FILM NUMBER: 97656917 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 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 June 29, 1997 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 (State or other jurisdiction of incorporation or organization) 150 Allen Road Liberty Corner, New Jersey (Address of principal executive offices) 95-4062211 (I.R.S. employer identification no.) 07938 (Zip Code) 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 August 5, 1997, the total number of outstanding shares of registrant's one class of common stock was 5,037,089. 2 TRANSTECHNOLOGY CORPORATION INDEX
PART I. Financial Information Page No. Item 1. Financial Statements......................................... 2 ------- Statements of Consolidated Operations-- Three Month Periods Ended June 29, 1997 and June 30, 1996............................................ 3 Consolidated Balance Sheets-- June 29, 1997 and March 31, 1997............................. 4 Statements of Consolidated Cash Flows-- Three Months Ended June 29, 1997 and June 30, 1996................................................ 5 Statements of Consolidated Stockholders' Equity-- Three Months Ended June 29, 1997 ............................ 6 Notes to Consolidated Financial Statements............... 7 - 10 Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations .....................11 - 15 PART II. Other Information Item 6. Exhibits and Reports on Form 8-K............................. 16 ------- SIGNATURES......................................................................... 16 EXHIBIT 11......................................................................... 17 EXHIBIT 27......................................................................... 18
1 3 PART I. FINANCIAL INFORMATION ITEM 1. FINANCIAL STATEMENTS The following unaudited Statements of Consolidated Operations, Consolidated Balance Sheets and Statements of Consolidated Cash Flows are of TransTechnology Corporation and its consolidated subsidiaries. These reports reflect all adjustments of a normal recurring nature, which are, in the opinion of management, necessary to a fair presentation of the results of operations for the interim periods reflected therein. The results reflected in the unaudited Statements of Consolidated Operations for the period ended June 29, 1997 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 Form 10-K filed for the fiscal year ended March 31, 1997. [THIS SPACE INTENTIONALLY LEFT BLANK] 2 4 STATEMENTS OF CONSOLIDATED OPERATIONS UNAUDITED (In Thousands of Dollars Except Share Data)
THREE MONTHS ENDED -------------------------------- JUNE 29, 1997 JUNE 30, 1996 ------------- ------------- Net Sales $ 49,923 $ 44,640 Cost of sales 34,575 30,939 ----------- ----------- Gross profit 15,348 13,701 ----------- ----------- General, administrative and selling expenses 9,571 8,561 Interest expense 1,976 1,810 Interest income (243) (269) Other income (3) (17) ----------- ----------- Income from continuing operations before income taxes 4,047 3,616 Income taxes 1,680 1,519 ----------- ----------- Income from continuing operations 2,367 2,097 Discontinued operations: Loss from disposal (net of applicable tax benefit of $72 and $189 for the three months ended June 29, 1997 and June 30, 1996, respectively) (102) (269) ----------- ----------- Net income $ 2,265 $ 1,828 =========== =========== Earnings per share: (Note 1) Income from continuing operations $ 0.46 $ 0.41 Loss from discontinued operations (0.02) (0.05) ----------- ----------- Net income $ 0.44 $ 0.36 =========== =========== Number of shares used in computation of per share information 5,186,000 5,104,000
See accompanying notes to unaudited consolidated financial statements. 3 5 CONSOLIDATED BALANCE SHEETS (In Thousands of Dollars Except Share Data)
UNAUDITED JUNE 29, 1997 MARCH 31, 1997 ------------- -------------- ASSETS Current assets: Cash and cash equivalents $ 2,298 $ 3,540 Accounts receivable (net of allowance for doubtful accounts of $548 at June 29, 1997 and $588 at March 31, 1997) 32,372 28,392 Notes receivable 3,749 1,838 Inventories 50,928 50,677 Prepaid expenses and other current assets 1,703 1,028 Deferred income taxes 4,212 4,293 Assets held for sale 7,205 7,617 --------- --------- Total current assets 102,467 97,385 --------- --------- Property, Plant and Equipment 89,658 82,207 Less accumulated depreciation and amortization 25,145 23,594 --------- --------- Property, Plant and Equipment - net 64,513 58,613 --------- --------- Other assets: Notes receivable 8,988 11,125 Costs in excess of net assets of acquired businesses (net of accumulated amortization: June 29, 1997, $4,153; March 31, 1997, $3,869) 46,194 18,878 Other 12,515 13,135 --------- --------- Total other assets 67,697 43,138 --------- --------- Total $ 234,677 $ 199,136 ========= ========= LIABILITIES AND STOCKHOLDERS' EQUITY Current liabilities: Current portion of long-term debt $ 10,004 $ 5,907 Accounts payable-trade 9,832 11,050 Accrued compensation 4,525 6,845 Accrued income taxes 2,333 1,632 Other current liabilities 16,309 12,844 --------- --------- Total current liabilities 43,003 38,278 --------- --------- Long-term debt payable to banks and others 95,378 67,516 --------- --------- Other long-term liabilities 17,156 15,898 --------- --------- Stockholders' equity: Preferred stock-authorized, 300,000 shares; none issued -- -- Common stock-authorized, 14,700,000 shares of $.01 par value; issued 5,319,759 at June 29, 1997, and 5,316,971 at March 31, 1997 54 53 Additional paid-in capital 46,800 46,745 Retained earnings 38,876 36,937 Other stockholders' equity (2,602) (2,352) --------- --------- 83,128 81,383 Less treasury stock, at cost - (291,719 shares at June 29, 1997 and 289,237 at March 31, 1997) (3,988) (3,939) --------- --------- Total stockholders' equity 79,140 77,444 --------- --------- Total $ 234,677 $ 199,136 ========= =========
See accompanying notes to unaudited consolidated financial statements. 4 6 STATEMENTS OF CONSOLIDATED CASH FLOWS UNAUDITED (In Thousands of Dollars)
THREE MONTHS ENDED ----------------------------- JUNE 29, 1997 JUNE 30, 1996 ------------- ------------- CASH FLOWS FROM OPERATING ACTIVITIES: Net income $ 2,265 $ 1,828 Adjustments to reconcile net income to net cash provided by operating activities: Depreciation and amortization 2,152 1,920 Provision for losses on accounts receivable 23 52 Loss on sale or disposal of fixed assets and discontinued businesses 5 38 Change in assets and liabilities net of acquisitions and dispositions: (Increase) decrease in accounts receivable (60) 2,146 Decrease in inventories 1,475 988 Decrease in assets held for sale 412 865 Increase in other assets (325) (3,909) Decrease in accounts payable (3,356) (2,361) Decrease in accrued compensation (2,320) (1,663) Increase in income tax payable 701 770 Increase in other liabilities 1,324 2,645 -------- -------- Net cash provided by operating activities 2,296 3,319 -------- -------- CASH FLOWS FROM INVESTING ACTIVITIES: Business acquisitions net of cash acquired (33,929) (3,344) Capital expenditures (1,748) (1,307) Proceeds from sale of fixed assets and discontinued business 261 1,987 Decrease in notes receivable 226 235 -------- -------- Net cash used in investing activities (35,190) (2,429) -------- -------- CASH FLOWS FROM FINANCING ACTIVITIES: Proceeds from long-term borrowings 45,500 8,431 Payments on long-term debt (13,541) (10,200) Proceeds from issuance of stock under stock option plan 56 179 Dividends paid (326) (332) -------- -------- Net cash provided by (used in) financing activities 31,689 (1,922) -------- -------- Effect of exchange rate changes on cash (37) -- Decrease in cash and cash equivalents (1,242) (1,032) Cash and cash equivalents at beginning of period 3,540 2,362 -------- -------- Cash and cash equivalents at end of period $ 2,298 $ 1,330 ======== ======== Supplemental Information: Interest payments $ 1,145 $ 1,342 Income tax payments $ 115 $ 337 - -------------------------
See accompanying notes to unaudited consolidated financial statements. 5 7 STATEMENTS OF CONSOLIDATED STOCKHOLDERS' EQUITY UNAUDITED (In Thousands of Dollars Except Share Data)
COMMON STOCK TREASURY STOCK ADDITIONAL OTHER FOR THE QUARTER ------------------ --------------------- PAID-IN RETAINED STOCKHOLDERS' ENDED JUNE 29, 1997 SHARES AMOUNT SHARES AMOUNT CAPITAL EARNINGS EQUITY TOTAL - -------------------- --------- ------ -------- ------- ------- -------- ------- -------- Balance, March 31, 1997 5,316,971 $53 (289,237) $(3,939) $46,745 $ 36,937 $(2,352) $ 77,444 Net Income -- -- -- -- -- 2,265 -- 2,265 Cash dividends ($.065 per share) -- -- -- -- -- (326) -- (326) Unrealized investment holding losses -- -- -- -- -- -- (40) (40) Effects of stock under incentive bonus plan - net 2,788 1 (2,482) (49) 55 -- (17) (10) Foreign translation adjustments -- -- -- -- -- -- (193) (193) --------- --- -------- ------- ------- -------- ------- -------- Balance, June 29, 1997 5,319,759 $54 (291,719) $(3,988) $46,800 $ 38,876 $(2,602) $ 79,140 ========= === ======== ======= ======= ======== ======= ========
See accompanying notes to unaudited consolidated financial statements. 6 8 NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS (In Thousands of Dollars) NOTE 1. Earnings Per Share: Earnings per share are based on the weighted average number of common stock and common stock equivalents (stock options) outstanding during each period. In computing earnings per share, common stock equivalents were either anti-dilutive because of the market value of the stock or not material, and, therefore, have been excluded from the calculation. Calculation of earnings per share for the period ended June 29, 1997 includes common stock equivalents of approximately 159,000 shares relating to stock options. NOTE 2. Inventories: Inventories are summarized as follows:
June 29, 1997 March 31, 1997 --------------- ---------------- Finished goods $22,003 $21,897 Work-in-process 10,131 10,335 Purchased and manufactured parts 18,794 18,445 ------- ------- Total inventories $50,928 $50,677 ======= =======
7 9 NOTE 3. Long-Term Debt Payable to Banks and Others Long-term debt payable, including current maturities, at June 29, 1997 and March 31, 1997 consisted of the following:
June 29, 1997 March 31, 1997 ------------- -------------- Credit agreement -- 5.15% $ 2,441 -- Credit agreement -- 7.58% -- $ 22,825 Credit agreement -- 7.8125% 10,000 -- Credit agreement -- 8.72% 5,320 -- Credit agreement -- 9% 2,200 -- Term loan -- 6.57% 7,451 -- Term loan -- 7.5% -- 25,289 Term loan -- 7.6875% 600 -- Term loan -- 7.8125% 45,800 -- Term loan -- 8.72% 6,325 -- Term loan -- 9.0625% 24,000 -- Term loan -- 9.79% 500 24,500 Other 745 809 -------- -------- 105,382 73,423 Less current maturities 10,004 5,907 -------- -------- Total $ 95,378 $ 67,516 ======== ========
Credit Agreement On June 29, 1997 the Company's debt consisted of $12.2 million of borrowings under a revolving credit line ("the Revolver"), $7.8 million of borrowings under international lines of credit ("the International Lines of Credit"), a $60.2 million term loan ("Term Loan A"), a $24.5 million term loan ("Term Loan B") and $0.7 million of other borrowings. The Revolver commitment of $30 million will be available to the Company through December 31, 2000 and is subject to a borrowing base formula. The Company's credit agreement with a group of commercial banks provides for borrowings and letters of credit based on collateralized accounts receivable and inventory. In addition, all of the remaining assets of the Company and its subsidiaries are included as collateral. Letters of credit, which are included in the borrowing base formula are limited to $5 million. Letters of credit under the line at June 29, 1997 were $0.1 million. The total commitment under the International Lines of Credit is $10 million and is subject to the same availability and collateral as the revolver, but is not subject to a borrowing base formula. Interest on the Revolver and the International Lines of Credit is tied to the primary lending 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 and financial goals. On March 31,1997, the Company amended its Term Loan A bank debt to increase the availability by $20 million, giving the company a total of $35 million available for acquisitions. On April 17, 1997, $32.6 million of this amount was used by the Company to acquire TCR Corporation. 8 10 The $60.2 million and $24.5 million term loans are with the same lenders as the revolving and international lines of credit, are secured by the same collateral, and are due and payable on March 31, and June 30, 2002, respectively. Quarterly principal payments on Term Loan A are $2.2 million, with escalations to $3 million, $3.2 million and $4 million in June, 1998, 1999 and 2000, respectively. Interest on Term Loan A is tied to the primary lending banks prime rate, or LIBOR, plus a margin that varies depending upon the Company's achievement of certain operating and financial goals. Annual principal payments on Term Loan B of $0.5 million are due through June 30, 2000, with final balloon payments of $7.5 million and $15 million due on June 30, 2001 and June 30, 2002, respectively. Interest on Term Loan B accrues at the primary lending bank's prime rate plus two percentage points. The agreement also gives the Company the option of using LIBOR plus three and one-quarter percentage points. At June 29, 1997, $79.8 million of the Company's outstanding borrowings utilized LIBOR. Additionally, the credit facility limits capital expenditures to $9 million annually and contains other customary financial covenants including a limit on the Company's ability to pay dividends to 25% of net income. Other Other long-term debt is comprised principally of an obligation due under a collateralized borrowing arrangement with a fixed interest rate of 3% due December 2004 and loans on life insurance policies owned by the Company with a fixed interest rate of 5%. Debt Maturities
June 30, -------- 1998 (current) $ 10,004 1999 12,524 2000 13,980 2001 43,859 2002 25,015 -------- Total $105,382 ========
NOTE 4. Discontinued Operations After-tax costs of $0.1 million were recorded in the first quarter of 1998, in connection with previously discontinued and sold businesses. These costs represent adjustments to previous estimates related primarily to environmental and legal matters. 9 11 Assets held for sale at June 29, 1997 and March 31, 1997 were as follows:
June 29, 1997 March 31, 1997 --------------- ---------------- Inventory $ 427 $ 429 Property 6,611 6,577 Other assets 167 611 ------- ------- Assets held for sale $ 7,205 $ 7,617 ======= =======
NOTE 5. Acquisitions On June 18, 1996 the Company acquired the Pebra hose clamp business from Pebra GmbH Paul Braun i.K. for approximately $3 million in cash plus direct acquisition costs. Pebra is located in Frittlingen, Germany, and manufactures heavy duty hose clamps primarily for use in the manufacture of heavy trucks in Europe. On April 17, 1997 the Company acquired all of the outstanding stock of TCR Corporation for $32.6 million in cash plus direct acquisition costs and other contingent consideration. TCR Corporation, located in Minneapolis, Minnesota, produces externally threaded fasteners and related products for the automotive, heavy vehicle, marine and industrial markets. NOTE 6. New Accounting Standard In February 1997, the Financial Accounting Standards Board adopted Statement of Financial Accounting Standards No. 128, "Earnings Per Share," which establishes standards for computing and presenting earnings per share. This statement is effective for the Company's financial year ending March 31, 1998. The Company believes that the effect of implementing this standard will result in a basic earnings per share amount which will not be materially different from primary earnings per share as currently reported. NOTE 7. Reclassifications Certain reclassifications have been made to the prior year to conform to the 1998 presentation. 10 12 ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS RESULTS OF OPERATIONS All references to three-month periods in this Management's Discussion refer to the three-month period ended June 29, 1997 for fiscal year 1998 and the three-month period ended June 30, 1996 for fiscal year 1997. Also when referred to herein, operating profit means net sales less operating expenses, without deduction for general corporate expenses, interest and income taxes. Sales from continuing operations for the three-month period in 1998 were $49.9 million, a $5.3 million or 12% increase from the comparable period in 1997. Gross profit was $15.3 million for the three-month period in 1998, up $1.6 million or 12% from the comparable period in 1997. Operating profit from continuing operations for the three-month period in 1998 was $8.1 million, an increase of $0.4 million or 6% from the comparable period in 1997. Changes in sales, operating profit and new orders from continuing operations are discussed below by segment. Net income, including discontinued operations, for the three-month period in 1998 was $2.3 million or $.44 per share, compared to $1.8 million or $.36 per share for the comparable period of 1997. As further discussed below, the increased earnings performance in 1998 resulted primarily from the inclusion of TCR Corporation operations in the three-month 1998 period. Interest expense increased $0.2 million for the three-month period in 1998, primarily as a result of increased bank borrowings used for the acquisition of TCR Corporation on April 17, 1997. New orders received during the three-month period in 1998 totaled $51.8 million, an increase of $7 million or 16% from 1997's comparable period. At June 29, 1997, total backlog of unfilled orders was $73.7 million compared to $59.2 million at June 30, 1996. DISCONTINUED OPERATIONS After-tax costs of $0.1 million were recorded in the first quarter of 1998, in connection with previously discontinued and sold businesses. These costs represent adjustments to previous estimates related primarily to environmental and legal matters. 11 13 ACQUISITIONS On April 17, 1997 the Company acquired all of the outstanding stock of TCR Corporation for $32.6 million in cash plus direct acquisition costs and other contingent consideration. TCR Corporation, located in Minneapolis, Minnesota, produces externally threaded fasteners and related products for the automotive, heavy vehicle, marine and industrial markets. NEW ACCOUNTING STANDARD In February 1997, the FASB issued SFAS No. 128, "Earnings Per Share," which establishes standards for computing and presenting earnings per share. This statement is effective for the Company's fiscal year ending March 31, 1998. The Company believes that the effect of implementing this standard will result in a basic earnings per share amount which will not be materially different from primary earnings per share as currently reported. 12 14 FINANCIAL SUMMARY BY PRODUCT SEGMENT (In Thousands of Dollars)
THREE MONTHS ENDED NET CHANGE ----------------------------- -------------------- June 29, 1997 June 30, 1996 $ % ------------- ------------- ------- ------- Sales: Specialty fastener products $ 41,155 $ 35,499 $ 5,656 16 Rescue hoist and cargo hook products 8,768 9,141 (373) (4) -------- -------- ------- Total $ 49,923 $ 44,640 $ 5,283 12 ======== ======== ======= Operating profit: Specialty fastener products $ 6,092 $ 5,702 $ 390 7 Rescue hoist and cargo hook products 1,979 1,923 56 3 -------- -------- ------- Total $ 8,071 $ 7,625 $ 446 6 Corporate expense (2,255) (2,439) 184 8 Corporate interest and other income 207 240 (33) (14) Interest expense (1,976) (1,810) (166) (9) -------- -------- ------- Income from continuing operations before income taxes $ 4,047 $ 3,616 $ 431 12 ======== ======== =======
13 15 SPECIALTY FASTENER PRODUCTS SEGMENT Sales for the specialty fastener products segment were $41.2 million for the three-month period in 1998, an increase of $5.7 million, or 16% from the same period in 1997. The increase in sales was primarily due to the inclusion of TCR Corporation and Pebra for the 1998 three-month period and increased gear-driven fastener demand to the heavy-duty truck market, offset by a decrease in domestic and European retaining ring sales due to the consolidation of the marketing and customer service operations of the domestic businesses, and the stronger dollar versus Deutsche Mark for the European businesses. Operating profit for the three-month period in 1998 was $6.1 million, an increase of $0.4 million or 7% from the comparable period of 1997. The increase was primarily due to the inclusion of TCR Corporation and Pebra for the 1998 three-month period and increased sales volume of gear-driven fasteners, offset by the decrease in domestic and European retaining ring sales and the stronger dollar versus Deutsche Mark, mentioned above. New orders for the three-month period in 1998 increased $6.4 million or 18% from the comparable period in 1997, primarily due to the inclusion of operations of TCR Corporation and Pebra for the 1998 three-month period. Backlog of unfilled orders at June 29, 1997 was $40.7 million, compared to $28.9 million at June 30, 1996. RESCUE HOIST AND CARGO HOOK PRODUCTS SEGMENT Sales of the rescue hoist and cargo hook products segment were $8.8 million for the three-month period in 1998, down $0.4 million or 4% from the comparable period in 1997. The decrease was primarily due to the timing of customers placing new orders. Operating profit for the three-month period in 1998 was $2.0 million, an increase of $0.1 million or 3% from the comparable period in 1997. The primary factors contributing to the increase in the segment's operating profit in the 1998 three-month period were the product sales mix and a slight decrease in engineering expense during the quarter. New orders increased for the three-month period in 1998 by $0.6 million or 7% from the comparable period in 1997 primarily due to customer timing and placement of new orders. Backlog of unfilled orders at June 29, 1997 was $33 million, compared to $30.4 million at June 30, 1996. LIQUIDITY AND CAPITAL RESOURCES The Company's debt-to-capitalization ratio was 57% as of June 29, 1997, compared to 49% as of March 31, 1997. The current ratio at June 29, 1997, stood at 2.38 compared to 2.54 at March 31, 1997. Working Capital was $59.5 million at June 29, 1997, up $0.4 million from March 31, 1997. 14 16 On June 29, 1997 the Company's debt consisted of $12.2 million of borrowings under a revolving credit line ("the Revolver"), $7.8 million of borrowings under international lines of credit ("the International Lines of Credit"), a $60.2 million term loan ("Term Loan A"), a $24.5 million term loan ("Term Loan B") and $0.7 million of other borrowings. The Revolver commitment of $30 million will be available to the Company through December 31, 2000 and is subject to a borrowing base formula. The Company's credit agreement with a group of commercial banks provides for borrowings and letters of credit based on collateralized accounts receivable and inventory. In addition, all of the remaining assets of the Company and its subsidiaries are included as collateral. Letters of credit, which are included in the borrowing base formula are limited to $5 million. Letters of credit under the line at June 29, 1997 were $0.1 million. The total commitment under the International Lines of Credit is $10 million and is subject to the same availability and collateral as the revolver, but is not subject to a borrowing base formula. Interest on the Revolver and the International Lines of Credit is tied to the primary lending 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 and financial goals. On March 31,1997, the Company amended its Term Loan A bank debt to increase the availability by $20 million, giving the company a total of $35 million available for acquisitions. On April 17, 1997, $32.6 million of this amount was used by the Company to acquire TCR Corporation. The $60.2 million and $24.5 million term loans are with the same lenders as the revolving and international lines of credit, are secured by the same collateral, and are due and payable on March 31, and June 30, 2002, respectively. Quarterly principal payments on Term Loan A are $2.2 million, with escalations to $3 million, $3.2 million and $4 million in June, 1998, 1999 and 2000, respectively. Interest on Term Loan A is tied to the primary lending banks prime rate, or LIBOR, plus a margin that varies depending upon the Company's achievement of certain operating and financial goals. Annual principal payments on Term Loan B of $0.5 million are due through June 30, 2000, with final balloon payments of $7.5 million and $15 million due on June 30, 2001 and June 30, 2002, respectively. Interest on Term Loan B accrues at the primary lending bank's prime rate plus two percentage points. The agreement also gives the Company the option of using LIBOR plus three and one-quarter percentage points. At June 29, 1997, $79.8 million of the Company's outstanding borrowings utilized LIBOR. Additionally, the credit facility limits capital expenditures to $9 million annually and contains other customary financial covenants including a limit on the Company's ability to pay dividends to 25% of net income. Management believes that the Company's anticipated cash flow from operations, combined with the bank credit described above, will be sufficient to support working capital requirements, capital expenditures and dividend payments at their current or expected levels. Capital expenditures in the three-month period in 1998 were $1.7 million as compared with $1.3 million in the comparable period in 1997. 15 17 PART II. OTHER INFORMATION ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K (a) Exhibits 11 Statement of Computation of Per Share Earnings 27 Financial Data Schedule (b) A report on Form 8-K was filed on April 29, 1997 to report the Company's April 17, 1997 acquisition of all of the outstanding stock of TCR Corporation. This report on Form 8-K was amended by the filing of a report on Form 8-K/A dated June 27, 1997. 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: August 11, 1997 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. 16 EX-11 2 STATEMENT OF COMPUTATION OF PER SHARE EARNINGS 1 EXHIBIT 11 TRANSTECHNOLOGY CORPORATION STATEMENT OF THE COMPUTATION OF PER SHARE EARNINGS IN ACCORDANCE WITH INSTRUCTION 4(g)
THREE MONTHS ENDED ------------------------------ JUNE 29, 1997 JUNE 30, 1997 ------------- ------------- Primary earnings per share: Weighted average number of common shares outstanding 5,027,829 5,103,635 Dilutive effect of stock option plan 158,589 - (a) ---------- ---------- 5,186,418 5,103,635 ========== ========== Net income $2,265,000 $1,828,000 ========== ========== Primary earnings per share $ 0.44 $ 0.36 ========== ==========
(a) The inclusion of stock options in the calculation of primary earnings per share was either anti-dilutive or not material as per APB 15. 17 EX-27 3 FINANCIAL DATA SCHEDULE
5 1,000 3-MOS MAR-31-1998 JUN-29-1997 2,298 0 32,372 548 50,928 102,467 89,658 25,145 234,677 43,003 105,382 0 0 54 (6,590) 234,677 49,923 50,169 34,575 11,547 0 23 1,976 4,042 1,680 2,367 (102) 0 0 2,367 0.44 0.44
-----END PRIVACY-ENHANCED MESSAGE-----