-----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, WpX61MqeLVtf6n4FZE6BwZVlz2KRL4BRVBEyT0T+7h93tEoXBWPMucgoUkh+D1KS MSYGLef+DD/cUi/uAa6zBw== 0000950123-98-009670.txt : 19981111 0000950123-98-009670.hdr.sgml : 19981111 ACCESSION NUMBER: 0000950123-98-009670 CONFORMED SUBMISSION TYPE: 10-Q PUBLIC DOCUMENT COUNT: 3 CONFORMED PERIOD OF REPORT: 19980927 FILED AS OF DATE: 19981110 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: SEC FILE NUMBER: 001-07872 FILM NUMBER: 98741495 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 September 27, 1998 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 5, 1998, the total number of outstanding shares of registrant's one class of common stock was 6,318,347. 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 September 27, 1998 and September 28, 1997......................................... 3 Consolidated Balance Sheets-- September 27, 1998 and March 31, 1998.......................... 4 Statements of Consolidated Cash Flows-- Six Month Periods Ended September 27, 1998 and September 28, 1997............................................. 5 Statements of Consolidated Stockholders' Equity-- Six Month Period Ended September 27, 1998...................... 6 Notes to Consolidated Financial Statements..................... 7-9 Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations ...........................10-16 PART II. Other Information Item 4. Submission of Matters to a Vote of Security Holders 17 Item 6. Exhibits and Reports on Form 8-K...............................17 SIGNATURES.................................................................18 EXHIBIT 3.2 ...............................................................19-29 EXHIBIT 27.................................................................30 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 for 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 September 27, 1998 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 Conditions 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, 1998. [THIS SPACE INTENTIONALLY LEFT BLANK] 2 4 STATEMENTS OF CONSOLIDATED OPERATIONS UNAUDITED (In Thousands of Dollars Except Share Data)
THREE MONTHS ENDED SIX MONTHS ENDED -------------------------------------- -------------------------------------- SEPTEMBER 27, 1998 SEPTEMBER 28, 1997 SEPTEMBER 27, 1998 SEPTEMBER 28, 1997 ------------------ ------------------ ------------------ ------------------ Net sales $ 56,368 $ 50,013 $ 107,851 $ 99,936 Cost of sales 38,419 34,080 73,002 68,655 ----------- ----------- ----------- ----------- Gross profit 17,949 15,933 34,849 31,281 ----------- ----------- ----------- ----------- General, administrative and selling expenses 11,341 10,278 21,677 19,849 Interest expense 1,910 2,184 3,261 4,160 Increase in allowance on notes receivable 1,206 -- 1,206 -- Interest income (99) (323) (198) (566) Royalty and other income (120) (217) (190) (220) ----------- ----------- ----------- ----------- Income from continuing operations before income taxes 3,711 4,011 9,093 8,058 Income taxes 1,503 1,624 3,683 3,304 ----------- ----------- ----------- ----------- Income from continuing operations 2,208 2,387 5,410 4,754 Loss from discontinued operations (a) -- (125) -- (227) ----------- ----------- ----------- ----------- Income before extradordinary charge 2,208 2,262 5,410 4,527 Extraordinary charge for refinancing of debt (b) (781) -- (781) -- ----------- ----------- ----------- ----------- Net income $ 1,427 $ 2,262 $ 4,629 $ 4,527 =========== =========== =========== =========== Basic Earnings per Share: (Note 1) Income from continuing operations $ 0.35 $ 0.47 $ 0.86 $ 0.94 Loss from discontinued operations -- (0.02) -- (0.04) Extraordinary charge for refinancing of debt (0.12) -- (0.12) -- ----------- ----------- ----------- ----------- Net income $ 0.23 $ 0.45 $ 0.74 $ 0.90 =========== =========== =========== =========== Diluted Earnings per Share: Income from continuing operations $ 0.34 $ 0.45 $ 0.84 $ 0.91 Loss from discontinued operations -- (0.02) -- (0.04) Extraordinary charge for refinancing of debt (0.12) -- (0.12) -- ----------- ----------- ----------- ----------- Net income $ 0.22 $ 0.43 $ 0.72 $ 0.87 =========== =========== =========== =========== Numbers of shares used in computation of per share information: Basic 6,302,000 5,083,000 6,293,000 5,048,000 Diluted 6,402,000 5,289,000 6,420,000 5,231,000
See accompanying notes to unaudited consolidated financial statements. (a) Loss from discontinued operations are net of applicable tax benefits of $93 and $165 for the three and six month periods ended September 28, 1997, respectively. (b) Extraordinary charge for refinancing of debt is net of applicable tax benefits of $532 for the three and six month periods ended September 28, 1998, respectively. 3 5 CONSOLIDATED BALANCE SHEETS (In Thousands of Dollars Except Share Data)
UNAUDITED SEPTEMBER 27, 1998 MARCH 31, 1998 ------------------ -------------- ASSETS Current assets: Cash and cash equivalents $ 266 $ 2,960 Accounts receivable (net of allowance for doubtful accounts of $532 at September 27, 1998 and $556 at March 31, 1998) 36,137 33,244 Notes receivable 1,269 5,086 Inventories 64,469 53,985 Prepaid expenses and other current assets 1,342 1,022 Deferred income taxes 3,471 2,773 Assets held for sale -- 5,442 --------- --------- Total current assets 106,954 104,512 --------- --------- Property, Plant and Equipment 109,922 92,981 Less accumulated depreciation and amortization 33,452 29,295 --------- --------- Property, Plant and Equipment - net 76,470 63,686 --------- --------- Other assets: Notes receivable 3,525 7,181 Costs in excess of net assets of acquired businesses (net of accumulated amortization: September 27, 1998, $5,939; March 31, 1998, $5,115) 82,050 45,094 Other 23,657 15,600 --------- --------- Total other assets 109,232 67,875 --------- --------- Total $ 292,656 $ 236,073 ========= ========= LIABILITIES AND STOCKHOLDERS' EQUITY Current liabilities: Current portion of long-term debt $ 45 $ 12,137 Accounts payable-trade 11,276 14,694 Accrued compensation 5,985 9,764 Accrued income taxes 969 332 Other current liabilities 19,694 11,154 --------- --------- Total current liabilities 37,969 48,081 --------- --------- Long-term debt payable to banks and others 112,983 51,350 --------- --------- Other long-term liabilities 21,999 20,810 --------- --------- Stockholders' equity: Preferred stock-authorized, 300,000 shares; none issued -- -- Common stock-authorized, 14,700,000 shares of $.01 par value; issued 6,634,855 at September 27, 1998, and 6,564,079 at March 31, 1998 66 66 Additional paid-in capital 76,979 75,959 Retained earnings 50,348 46,537 Other stockholders' equity (2,206) (2,731) --------- --------- 125,187 119,831 Less treasury stock, at cost - (356,507 shares at September 27, 1998 and 292,054 at March 31, 1998) (5,482) (3,999) --------- --------- Total stockholders' equity 119,705 115,832 --------- --------- Total $ 292,656 $ 236,073 ========= =========
See accompanying notes to consolidated financial statements. 4 6 STATEMENTS OF CONSOLIDATED CASH FLOWS UNAUDITED (In Thousands of Dollars)
SIX MONTHS ENDED -------------------------------------- SEPTEMBER 27, 1998 SEPTEMBER 28, 1997 ------------------ ------------------ CASH FLOWS FROM OPERATING ACTIVITIES: Net income $ 4,629 $ 4,527 Adjustments to reconcile net income to net cash (used in) provided by operating activities: Extraordinary charge for refinancing of debt 781 -- Depreciation and amortization 5,191 4,359 Provision for losses on notes and accounts receivable 1,283 317 (Gain) loss on sale or disposal of fixed assets (6) 77 Change in assets and liabilities net of acquisitions: Decrease (increase) in accounts receivable 1,933 (837) (Increase) decrease in inventories (1,506) 2,369 Decrease in assets held for sale -- 565 (Increase) decrease in other assets (290) 86 Decrease in accounts payable (5,791) (603) Decrease in accrued compensation (3,823) (1,179) Increase (decrease) in income tax payable 884 (225) Decrease in other liabilities (5,415) (434) --------- --------- Net cash (used in) provided by operating activities (2,130) 9,022 --------- --------- CASH FLOWS FROM INVESTING ACTIVITIES: Business acquisitions net of cash acquired (44,160) (33,929) Capital expenditures (5,114) (3,247) Proceeds from sale of fixed assets 248 283 Decrease in notes receivable 2,901 828 --------- --------- Net cash used in investing activities (46,125) (36,065) --------- --------- CASH FLOWS FROM FINANCING ACTIVITIES: Proceeds from long-term borrowings 133,627 53,033 Payments on long-term debt (86,408) (29,543) Proceeds from forward exchange rate contracts -- 2,036 Proceeds from issuance of stock under stock option plan 466 889 Dividends paid (818) (658) Treasury stock purchases (1,363) -- --------- --------- Net cash provided by (used in) financing activities 45,504 25,757 --------- --------- Effect of exchange rate changes on cash 57 (63) Decrease in cash and cash equivalents (2,694) (1,349) Cash and cash equivalents at beginning of period 2,960 3,540 --------- --------- Cash and cash equivalents at end of period $ 266 $ 2,191 ========= ========= Supplemental Information: Interest payments $ 2,994 $ 3,060 Income tax payments $ 2,501 $ 2,227 Noncash investing activities: Exchange of note receivable for equity interest $ 3,170 $ --
- ---------- 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 SIX MONTHS --------------------- ---------------------- PAID-IN RETAINED STOCKHOLDERS' ENDED SEPTEMBER 27, 1998 SHARES AMOUNT SHARES AMOUNT CAPITAL EARNINGS EQUITY TOTAL - ------------------------- --------- --------- --------- ---------- ---------- --------- ------------- --------- Balance, March 31, 1998 6,564,079 $ 66 (292,054) $ (3,999) $ 75,959 $ 46,537 $ (2,731) $ 115,832 Net Income -- -- -- -- -- 4,629 -- 4,629 Expenses relating to public sale of common stock -- -- -- -- (4) -- -- (4) Cash dividends ($.13 per share) -- -- -- -- -- (818) -- (818) Purchase of Treasury Stock -- -- (60,000) (1,363) -- -- -- (1,363) Unrealized investment holding loss -- -- -- -- -- -- (9) (9) Issuance of stock under stock option plan - net 65,714 -- -- -- 887 -- -- 887 Effects of stock under incentive bonus plan - net 5,062 -- (4,453) (120) 137 -- (59) (42) Foreign translation adjustments -- -- -- -- -- -- 593 593 --------- --------- --------- --------- --------- --------- --------- --------- Balance, September 27, 1998 6,634,855 $ 66 (356,507) $ (5,482) $ 76,979 $ 50,348 $ (2,206) $ 119,705 ========= ========= ========= ========= ========= ========= ========= =========
See accompanying notes to consolidated financial statements. 6 8 NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS (In Thousands of Dollars) 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 -------------------------------------- -------------------------------------- September 27, 1998 September 28, 1997 September 27, 1998 September 28, 1997 ------------------ ------------------ ------------------ ------------------ Basic Earnings per Share: Weighted average common shares outstanding 6,302 5,083 6,293 5,048 ===== ===== ===== ===== Diluted Earnings per Share: Weighted average common shares outstanding 6,302 5,083 6,293 5,048 Stock Options 100 206 127 183 ----- ----- ----- ----- Denominator for Diluted Earnings per Share 6,402 5,289 6,420 5,231 ===== ===== ===== =====
7 9 NOTE 2. Comprehensive Income Effective April 1, 1998, the Company adopted Statement of Financial Accounting Standards (SFAS) No. 130, "Reporting Comprehensive Income." This statement requires that the Company report the change in its net assets during the period from nonowner sources. This statement only requires additional disclosures, and does not impact the Company's consolidated financial position or cash flows. For the three and six month periods ended September 27, 1998 and September 28, 1997, other comprehensive income is comprised of foreign currency translation adjustments and unrealized holding gains/(losses) on marketable securities. Comprehensive income is summarized below.
Three Months Ended Six Months Ended ----------------------------------------- ----------------------------------------- September 27, 1998 September 28, 1997 September 27, 1998 September 28, 1997 ------------------ ------------------ ------------------ ------------------ Net income $ 1,427 $ 2,262 $ 4,629 $ 4,527 Other comprehensive income (loss), net of tax: Foreign currency translation adjustment 495 (173) 593 (366) Unrealized investment holding gain (loss) (44) 90 (9) 50 ------- ------- ------- ------- Total comprehensive income $ 1,878 $ 2,179 $ 5,213 $ 4,211 ======= ======= ======= =======
NOTE 3. Inventories: Inventories are summarized as follows:
September 27, 1998 March 31, 1998 ------------------ -------------- Finished goods $26,219 $22,515 Work-in-process 12,996 11,330 Purchased and manufactured parts 25,254 20,140 ------- ------- Total inventories $64,469 $53,985 ======= =======
NOTE 4. Acquisitions On June 29, 1998, the Company acquired all of the outstanding common stock of Aerospace Rivet Manufacturers Corporation ("ARM") for $27 million in cash, plus direct acquisition costs, and other contingent consideration. ARM, located in Santa Fe Springs, California, produces rivets and externally threaded fasteners for the aerospace industry. 8 10 On July 28, 1998, the Company acquired all of the outstanding common stock of NORCO, Inc. for $18 million in cash, plus direct acquisition costs, and other contingent consideration. NORCO, Inc., located in Ridgefield, Connecticut, produces aircraft parts and motion control components for the aerospace industry. NOTE 5. Long-Term Debt Payable to Banks and Others Long-term debt payable, including current maturities, consisted of the following:
September 27, 1998 March 31, 1998 ------------------ -------------- Credit agreement - 7.20% $ 109,725 - Credit agreement - 8.50% 2,600 $ 2,676 Term loan - 6.85% - 36,099 Term loan - 9.79% - 24,000 Other 703 712 --------- -------- 113,028 63,487 Less current maturities 45 12,137 --------- -------- Total $ 112,983 $ 51,350 ========= ========
Credit Agreement Effective July 24, 1998, the Company's revolving credit line ("the Revolver") was revised and amended to increase the Revolver to $125 million and eliminate Term Loan A and Term Loan B. The new credit agreement is substantially with the same group of lenders and has similar collateral and customary financial covenants, but is no longer asset based, and does not require principal payments until maturity on July 23, 2003. On September 27, 1998 the Company's domestic debt consisted of $90.6 million of borrowings under the Revolver and $0.7 million of other borrowings. Letters of credit outstanding under the line at September 27, 1998 were $0.1 million. Amounts outstanding under International Lines of Credit were $21.7 million at September 27, 1998. 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%. NOTE 6. New Accounting Pronouncements Not Yet Adopted In June 1997, the FASB issued SFAS No. 131, "Disclosures about Segments of an Enterprise and Related Information", which will be effective for the Company's current fiscal year. SFAS No. 131 redefines how operating segments are determined and requires expanded quantitative and qualitative disclosures relating to the Company's operating segments. The Company is currently evaluating which operating segments, if any, it will disclose differently than previously reported. In February 1998, the FASB issued SFAS No. 132, "Employers' Disclosures about Pensions and Other Postretirement Benefits - an amendment of FASB Statements No. 87, 88 and 106." This statement, which will be effective for the Company's current fiscal year, requires revised disclosures about pension and other postretirement benefit plans. The adoption of this statement will not have any impact on the Company's consolidated financial position, results of operations or cash flows. In June 1998, SFAS No. 133, "Accounting for Derivative Instruments and Hedging Activities," was issued and is effective for the Company for its fiscal year ending March 31, 2001. SFAS No. 133 requires that all derivative instruments be measured at fair value and recognized in the balance sheet as either assets or liabilities. The Company is currently evaluating the impact this pronouncement will have on its consolidated financial statements. 9 11 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 September 27, 1998 for fiscal year 1999 and the three and six month periods ended September 28, 1997 for fiscal year 1998. 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, amount per share refers to diluted amounts per share. Sales from continuing operations for the six month period in 1999 were $107.9 million, an increase of $7.9 million or 8% from the comparable period in 1998. For the three month period in 1999 sales were $56.4 million, a $6.4 million or 13% increase from the comparable period in 1998. As further discussed below, the increased sales performance for the six and three month periods in 1999 resulted primarily from the acquisitions of ARM on June 29, 1998 and NORCO, Inc. on July 28, 1998. Gross profit for the six month period in 1999 increased $3.6 million or 11% from the comparable period in 1998. For the three month period in 1999, gross profit increased $2.0 million or 13%. Operating profit from continuing operations for the six month period in 1999 was $18.1 million, an increase of $1.9 million or 12% from the comparable period in 1998. For the three month period in 1999 operating profit from continuing operations was $8.8 million, an increase of $0.7 million or 9% from the comparable period in 1998. Changes in sales, operating profit and new orders from continuing operations are discussed below by segment. Net income, after an extraordinary item for the six month period in 1999 was $4.6 million or $0.72 per share, compared to $4.5 million or $0.87 per share, for the comparable period of 1998. The three month period in 1999 reported net income of $1.4 million or $0.22 per share after the extraordinary item, compared to $2.3 million or $0.43 per share for the year earlier period. Net income for both the six month and three month periods in 1999 includes an extraordinary charge in the amount of $0.8 million or $0.12 per share after tax for the refinancing of debt. Net income for both periods also includes the establishment of a $1.2 million pretax allowance for a possible loss on a note receivable from the sale of a previously discontinued company. The extraordinary charge for the refinancing of debt is discussed in more detail in the discussion of liquidity and capital resources section. Interest expense decreased $0.9 million and $0.3 million for the six month and three month periods in 1999, respectively. The decreases were primarily the result of reduced bank debt following the November 1997 common stock offering. These proceeds were subsequently used for acquisitions during the second quarter of fiscal 1999 as discussed in Note 4. 10 12 New orders received during the six month period in 1999 totaled $112.4 million, an increase of $11.2 million or 11% from 1998's comparable period. For the three month period, new orders totaled $61.9 million, an increase of $12.5 million or 25% from last year's comparable period. The increased new orders for both the six month and three month periods were primarily due to the acquisitions of ARM and NORCO, Inc. as well as increased new orders at Breeze-Eastern and our European operations. At September 27, 1998, total backlog of unfilled orders was $101.6 million compared to $73.2 million at September 28, 1997, primarily due to the acquisition of ARM and NORCO, Inc., as well as increased backlog at Breeze-Eastern, Breeze Industrial, TCR and our European operations. 11 13 FINANCIAL SUMMARY BY PRODUCT SEGMENT (In Thousands of Dollars)
SIX MONTHS ENDED NET CHANGE ---------------------------------------- ------------------- SEPTEMBER 27, 1998 SEPTEMBER 28, 1997 $ % ------------------ ------------------ ---------- --- Sales: Specialty fastener products $ 87,367 $ 82,698 $ 4,669 6 Aerospace products 20,484 17,238 3,246 19 --------- --------- ---------- Total $ 107,851 $ 99,936 $ 7,915 8 ========= ========= ========== Operating profit: Specialty fastener products $ 13,383 $ 12,425 $ 958 8 Aerospace products 4,676 3,745 931 25 --------- --------- ---------- Total $ 18,059 $ 16,170 $ 1,889 12 Corporate expense (a) (5,894) (4,596) (1,298) (28) Corporate interest and other income 189 644 (455) (71) Interest expense (3,261) (4,160) 899 22 --------- --------- ---------- Income from continuing operations before income taxes $ 9,093 $ 8,058 $ 1,035 13 ========= ========= ==========
(a) The corporate expense for the six month period ended September 27, 1998, includes a $1.2 million increase to the allowance to offset a possible loss on notes receivable. 12 14 FINANCIAL SUMMARY BY PRODUCT SEGMENT (In Thousands of Dollars)
THREE MONTHS ENDED NET CHANGE ----------------------------------------- ----------------- SEPTEMBER 27, 1998 SEPTEMBER 28, 1997 $ % ------------------ ------------------ ------- --- Sales: Specialty fastener products $ 45,147 $ 41,543 $ 3,604 9 Aerospace products 11,221 8,470 2,751 32 -------- --------- ------- Total $ 56,368 $ 50,013 $ 6,355 13 ======== ========= ====== Operating profit: Specialty fastener products $ 6,504 $ 6,333 $ 171 3 Aerospace products 2,287 1,766 521 30 -------- --------- ------- Total $ 8,791 $ 8,099 $ 692 9 Corporate expense (a) (3,259) (2,341) (918) (39) Corporate interest and other income 89 437 (348) (80) Interest expense (1,910) (2,184) 274 13 -------- --------- ------- Income from continuing operations before income taxes $ 3,711 $ 4,011 $ (300) (7) ======== ========= ======
(a) The corporate expense for the three month period ended September 27, 1998, includes a $1.2 million increase to the allowance to offset a possible loss on notes receivable. 13 15 SPECIALTY FASTENER PRODUCTS SEGMENT Sales for the specialty fastener products segment were $87.4 million for the six month period in 1999, an increase of $4.7 million or 6% from the comparable period in 1998. Sales for the three month period in 1999 were up $3.6 million or 9% from the same period in 1998. The six and three month increases in 1999 were primarily due to the inclusion of ARM's operations in the current year periods. The increased sales from the ARM acquisition were partially offset in both periods by lower domestic retaining ring sales relating to the consolidation of our two North American retaining ring factories. International fastener sales for both periods were slightly higher with an increase in European sales partially offset by a decrease in Brazilian sales. Operating profit for the segment was $13.4 million for the six month period in 1999, an increase of $1.0 million or 8% from the comparable period in 1998. The three month period in 1999 reported an operating profit of $6.5 million, an increase of $0.2 million or 3% from the comparable period in 1998. The increased operating profit was mainly due to the ARM acquisition partially offset by decreased operating profit due primarily to overhead absorption issues arising from the consolidation of our North American retaining ring factories. New orders increased by $2.8 million or 3% for the six month period in 1999, as compared to the six month period in 1998. New orders for the three month period in 1999 increased $0.5 million or 1% from the comparable period in 1998. The primary reason for these increases was the acquisition of ARM and increased new orders at our European operations. Backlog of unfilled orders at September 27, 1998 was $52.6 million compared to $41.5 million at September 28, 1997, primarily due to the acquisition of ARM and increased backlog at Breeze Industrial, TCR and our European operations. AEROSPACE PRODUCTS SEGMENT Sales for the aerospace products segment were $20.5 million for the six month period in 1999, an increase of $3.2 million or 19% from the comparable period in 1998. Sales for the three month period in 1999 were $11.2 million, up $2.8 million or 32% from the comparable period in 1998. The increases were primarily due to the acquisition of NORCO, Inc. Operating profit for the six month period in 1999 was $4.7 million, an increase of $0.9 million or 25% from the comparable period in 1998. The three month period had an operating profit of $2.3 million, an increase of $0.5 million or 30% from the comparable period in 1998. The increased operating profit for both periods was primarily due to the acquisition of NORCO, Inc. New orders for the six month period in 1999 increased $8.4 million or 51% from the comparable period in 1998. New orders for the three month period in 1998 increased $12.0 million or 167% from the comparable period in 1998. The increases in both 1999 periods were due to the NORCO, Inc. acquisition as well as a large increase at Breeze-Eastern, primarily due to customer timing and placement of new orders. Backlog of unfilled orders at September 27, 1998 was $49.0 million compared to $31.8 million at September 28, 1997, primarily due to the NORCO, Inc. acquisition and higher backlog at Breeze-Eastern. 14 16 LIQUIDITY AND CAPITAL RESOURCES The Company's debt-to-capitalization ratio was 49% as of September 27, 1998, compared to 35% as of March 31, 1998, primarily due to increased bank borrowings for the acquisitions of ARM and NORCO, Inc. in the second quarter of fiscal 1999. The current ratio at September 27, 1998, stood at 2.82 compared to 2.17 at March 31, 1998. Working Capital was $69.0 million at September 27, 1998, up $12.6 million from March 31, 1998. During the six months ended September 27, 1998 the Company purchased 60,000 shares of treasury stock for $1.4 million. Treasury stock purchases are made in the open market or in negotiated transactions when opportunities arise. Plans to purchase Treasury stock are subject to the terms of the Company's credit agreement and may be discontinued by the Company at any time. On June 28, 1998, the Company reclassified approximately $5.4 million of assets held for sale, primarily land and buildings, to other long term assets due to the termination of sales negotiations. There are no current substantive negotiations which could result in liquidation within the next twelve months, although the Company continues to actively seek to sell the properties. 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 six month period in 1999 were $5.1 million as compared with $3.2 million in the comparable period in 1998. EXTRAORDINARY CHARGE FOR REFINANCING OF DEBT On July 24, 1998 the Company refinanced its long term debt. The new financing agreement increased the Company's revolving credit limit to $125 million and eliminated the Term A loan and the Term B loan. The new agreement is with substantially the same group of lenders and has similar collateral and customary covenants, but is no longer asset based and does not require principal payments until maturity on July 23, 2003. Due to the termination of the old credit agreement, the Company took a charge to earnings in the current period to write off the unamortized portion of the loan origination costs associated with the old agreement in the amount of $1.2 million before tax or $0.8 million after tax. The after tax amount of $0.8 million is classified as an extraordinary charge in the Statement of Consolidated Operations for the three month and six month periods ended September 27, 1998. YEAR 2000 ISSUE The Company has recognized the year 2000 issue which relates to the computer storage of dates with the format of the year as either a two digit or a four digit data field. Computer programs which have only a two digit field for the year must be modified prior to the year 2000 otherwise the year 2000 may be confused with year 1900. 15 17 The Company has taken steps to have all of its computer systems in compliance with the year 2000 date requirement before that date is reached. Thus far the Company has reviewed its internal computer systems at all locations for compliance. Identification and testing of all internal systems has been underway for the past year and is in the later stages of completion. Progress is currently being monitored on a monthly basis at all business units. Some surveys of key customers and suppliers have been obtained and are being updated on an on-going basis. Based on the information obtained to date, the Company does not believe there will be any significant interruptions in systems that will adversely affect the company relative to the year 2000 issue. The Company is not able however to identify all external year 2000 issues such as those which may exist at the governmental, supplier and customer levels. The Company's planned expenditure for year 2000 compliance is $0.5 million, most of which has been or is expected to be spent during the current fiscal year. The Company has addressed contingency planning for the year 2000 issue and has outlined various plans for further development based upon additional test results and survey findings. The anticipated completion date for all Year 2000 compliance is September 1999. 16 18 PART II. OTHER INFORMATION ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS At the annual meeting of the Registrant, held on July 23, 1998, all seven directors of the Company nominated for reelection were reelected for a term of one year, and shareholders approved the 1998 Non-Employee Directors' Stock Option Plan. The results of the voting on the election of directors were as follows:
VOTES VOTES FOR WITHHELD --- -------- Gideon Argov 4,332,043 1,222,579 Walter Belleville 4,333,099 1,221,523 Michael J. Berthelot 4,333,099 1,221,523 Thomas V. Chema 4,332,071 1,222,551 Michael Glouchevitch 4,333,071 1,221,551 James A. Lawrence 4,333,099 1,221,523 William Recker 4,332,553 1,222,069
The results of the voting on the proposal to approve the 1998 Non-Employee Directors' Stock Option Plan were as follows: FOR - 4,216,510 AGAINST - 1,278,519 ABSTAIN - 59,592 ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K (a) Exhibits 3.2 Bylaws of the Company amended and restated as of July 23, 1998 27 Financial Data Schedule (b) A report on Form 8-K was filed on July 13, 1998 to report the June 29, 1998 acquisition by the Company of all of the outstanding stock of Aerospace Rivet Manufacturers Corporation. This report on Form 8-K was amended by the filing on August 27, 1998 of a report on Form 8-K/A. 17 19 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 10, 1998 By: /s/ JOSEPH F. SPANIER ------------------------------------- Joseph F. Spanier, Vice President and Chief Financial Officer* * On behalf of the Registrant and as Principal Financial Officer. 18 20 EXHIBIT INDEX Exhibit No. Description ----------- ----------- 3.2 Bylaws of the Company amended and restated as of July 23, 1998 27 Financial Data Schedule EX-3.2 2 BY-LAWS: AMENDED AND RESTATED AS OF JULY 23, 1998 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. BYLAWS - Page 1 19 2 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. 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 BYLAWS - Page 2 20 3 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 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 BYLAWS - Page 3 21 4 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 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 23, 1998, the authorized number of directors of the corporation shall be seven 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 BYLAWS - Page 4 22 5 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 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 BYLAWS - Page 5 23 6 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 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 BYLAWS - Page 6 24 7 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. 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 BYLAWS - Page 7 25 8 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 BYLAWS - Page 8 26 9 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. 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 BYLAWS - Page 9 27 10 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 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. BYLAWS - Page 10 28 11 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. 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 23, 1998 GH:2660 BYLAWS - Page 11 29 EX-27 3 FINANCIAL DATA SCHEDULE
5 1,000 6-MOS MAR-31-1999 SEP-27-1998 266 0 36,137 532 64,469 106,954 109,922 33,452 292,656 37,969 113,028 0 0 66 7,688 292,656 107,851 108,239 73,002 26,144 0 1,283 3,261 9,093 3,683 5,410 0 (781) 0 4,629 0.74 0.72
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