<PAGE> 1
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-Q
(Mark One)
[X] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15 (d)
OF THE SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended December 31, 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
0-27678
TRIDENT INTERNATIONAL, INC.
(Exact name of registrant as specified in its charter)
Delaware 06-6403301
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
1114 Federal Road, Brookfield, Connecticut 06804
(Address of principal executive offices) (Zip Code)
(203) 740-9333
(Registrant's telephone number, including area code)
(not applicable)
(Former name, former address and former fiscal year,
if changed since last report)
Indicate by check mark whether the registrant (1) has filed all reports required
to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during
the preceding 12 months (or for such shorter period that the registrant was
required to file such reports), and (2) has been subject to such filing
requirements for the past 90 days.
Yes [X] No [ ]
The number of shares outstanding of the registrant's Common Stock, par value
$.01 per share, as of January 31, 1999, exclusive of treasury shares was
6,468,532.
1
<PAGE> 2
TRIDENT INTERNATIONAL, INC. AND SUBSIDIARIES
INDEX
<TABLE>
<CAPTION>
Page
PART I. FINANCIAL INFORMATION
<S> <C> <C>
Item 1. Condensed Consolidated Financial Statements
Condensed Consolidated Balance Sheets as of
September 30, 1998 and December 31, 1998................................ 3
Condensed Consolidated Statements of Operations
for the three months ended December 31, 1997
and 1998................................................................ 4
Condensed Consolidated Statements of Cash Flows
for the three months ended December 31, 1997 and
1998.................................................................... 5
Notes to Condensed Consolidated Financial Statements...................... 6
Item 2. Management's Discussion and Analysis of Financial
Condition and Results of Operations..................................... 8
PART II. OTHER INFORMATION
Item 6. Exhibits and Reports on Form 8-K.......................................... 12
Signatures................................................................ 12
</TABLE>
2
<PAGE> 3
PART 1. FINANCIAL INFORMATION
This Form 10-Q contains forward-looking statements within the meaning of Section
27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act
of 1934. The Company's actual results could differ materially from those set
forth in the forward-looking statements. Factors that might cause such a
difference are discussed in the section entitled "Business Environment and
Future Results" on page 9 of this Form 10-Q.
ITEM 1. CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
TRIDENT INTERNATIONAL, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED BALANCE SHEETS
(000's Omitted)
<TABLE>
<CAPTION>
September 30, 1998 December 31, 1998
------------------ -----------------
ASSETS (Unaudited)
<S> <C> <C>
CURRENT ASSETS:
Cash and cash equivalents ........................... $ 5,887 $ 5,868
Marketable securities ............................... 14,541 17,188
Accounts receivable, net ............................ 5,283 5,276
Inventories ......................................... 2,103 2,296
Deferred income taxes ............................... 464 438
Other current assets ................................ 1,076 121
------- -------
Total current assets ....................... 29,354 31,187
LEASEHOLD IMPROVEMENTS AND EQUIPMENT, net ............... 2,538 2,516
DEFERRED INCOME TAXES .................................... 457 482
INTANGIBLE ASSETS, net ................................... 10,991 10,815
------- -------
Total assets ................................ $43,340 $45,000
======= =======
LIABILITIES AND STOCKHOLDERS' EQUITY
CURRENT LIABILITIES:
Accounts payable ................................... $ 1,336 $ 1,388
Accrued expenses ................................... 1,049 956
Income taxes payable ............................... 366 1,182
------- -------
Total current liabilities .................... 2,751 3,526
------- -------
STOCKHOLDERS' EQUITY:
Common stock, $.01 par value; 30,000,000
shares authorized; 7,180,939 and
7,185,492 shares issued at September
30, 1998 and December 31, 1998 ........................ 72 72
Additional paid-in capital .......................... 40,216 40,236
Retained earnings ................................... 10,412 11,881
------- -------
50,700 52,189
Less - Treasury stock at cost, 646,600
and 718,800 shares at September 30,
1998 and December 31, 1998,
respectively .......................................... 10,111 10,715
------- -------
Total stockholders' equity ................... 40,589 41,474
------- -------
Total liabilities and stockholders equity $43,340 $45,000
======= =======
</TABLE>
See accompanying notes
3
<PAGE> 4
TRIDENT INTERNATIONAL, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(000's Omitted, except per share data)
(Unaudited)
<TABLE>
<CAPTION>
Three Months Ended
December 31, 1997 December 31, 1998
----------------- -----------------
<S> <C> <C>
NET SALES ............................... $ 7,757 $ 7,976
COST OF SALES ........................... 2,824 3,150
----------- -----------
Gross profit ...................... 4,933 4,826
----------- -----------
OPERATING EXPENSES:
Marketing and selling ................ 709 677
Research and development ............. 860 1,027
General and administrative ........... 536 940
Amortization of intangibles .......... 201 175
----------- -----------
Total operating expenses ........... 2,306 2,819
----------- -----------
Operating income ................ 2,627 2,007
OTHER INCOME:
Interest income ...................... (275) (287)
----------- -----------
Income before income taxes ......... 2,902 2,294
PROVISION FOR INCOME TAXES .............. 1,074 826
----------- -----------
NET INCOME .............................. $ 1,828 $ 1,468
=========== ===========
BASIC EARNINGS PER COMMON SHARE ......... $ 0.27 $ 0.23
----------- -----------
WEIGHTED AVERAGE COMMON SHARES
OUTSTANDING FOR BASIC EARNINGS PER
SHARE .............................. 6,736,820 6,475,555
=========== ===========
DILUTED EARNINGS PER COMMON SHARE ....... $ 0.27 $ 0.22
----------- -----------
WEIGHTED AVERAGE COMMON SHARES
OUTSTANDING FOR DILUTED EARNINGS PER
SHARE .............................. 6,828,947 6,546,188
=========== ===========
</TABLE>
See accompanying notes.
4
<PAGE> 5
TRIDENT INTERNATIONAL, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(000's Omitted)
(Unaudited)
<TABLE>
<CAPTION>
Three Months Ended
December 31, 1997 December 31, 1998
----------------- -----------------
<S> <C> <C>
CASH FLOWS FROM OPERATING ACTIVITIES:
Net income ............................................................... $ 1,828 $ 1,468
Adjustments to reconcile net income to net
cash provided by operating activities:
Depreciation and amortization ........................................... 306 308
Deferred income taxes ................................................... 56 1
Changes in operating assets and liabilities:
Accounts receivable, net ............................................. (569) 7
Inventories .......................................................... (254) (193)
Other current assets ................................................. (2) 955
Accounts payable and accrued expenses ................................ (392) (40)
Income taxes payable ................................................. 865 816
-------- -------
Net cash provided by operating activities ......................... 1,838 3,322
-------- -------
CASH FLOWS FROM INVESTING ACTIVITIES:
Purchases of marketable securities, net ............................... (4,506) (2,647)
Purchases of leasehold improvements and
equipment, net ......................................................... (407) (110)
-------- -------
Net cash used in investing activities .............................. (4,913) (2,757)
-------- -------
CASH FLOWS FROM FINANCING ACTIVITIES:
Proceeds from issuance of common stock ................................... 15 20
Proceeds from exercise of warrants and options ........................... 3 --
Purchases of treasury stock .............................................. (2,373) (604)
-------- -------
Net cash used in financing activities .................................... (2,355) (584)
-------- -------
INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS .............................. (5,430) (19)
CASH AND CASH EQUIVALENTS, beginning of period ................................. 7,065 5,887
-------- -------
CASH AND CASH EQUIVALENTS, end of period ....................................... $ 1,635 $ 5,868
-------- -------
SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION:
Cash paid during the period for
Income taxes ........................................................... $ 153 $ 9
======== =======
</TABLE>
See accompanying notes.
5
<PAGE> 6
TRIDENT INTERNATIONAL, INC. AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
1. Business:
Trident International, Inc. (the Company) designs, manufactures and
markets impulse ink jet subsystems, including printheads, inks and other
consumables, and related components for the industrial market. The
Company markets its products worldwide principally to original equipment
manufacturers (OEMs), who integrate the products into systems which are
then sold to end-users directly or via distributors. The largest market
segment currently addressed by the Company's products is that of printing
onto shipping cartons. Other industrial market segments in which the
Company's products are currently being utilized include check coding,
addressing and imprinting business forms, postal bar coding and stamp
cancellation and plotting garment patterns.
The interim financial statements reflect all adjustments (consisting
of normal recurring adjustments) which are, in the opinion of management,
necessary to a fair statement of the results for the interim periods
presented. These interim financial statements should be read in
conjunction with the financial statements and notes included in the
Company's Form 10-K.
The foregoing interim results are not necessarily indicative of the
results of operations for the full fiscal year ending September 30, 1998.
2. Inventories:
Inventories consisted of the following:
<TABLE>
<CAPTION>
September 30, December 31,
1998 1998
<S> <C> <C>
Raw materials $1,237 $1,399
Work-in process 502 526
Finished goods 364 371
------ ------
$2,103 $2,296
====== ======
</TABLE>
3. Contingency:
In connection with the prior acquisition (Acquisition), the Company
undertook an environmental compliance audit, which identified certain
environmental deficiencies on properties leased by the Company. The site
of one of the Company's leased facilities was contaminated due to prior
uses by a prior occupant and may require remedial action. Although the
Company obtained an indemnification agreement in connection with the
Acquisition with respect to such prior contamination, if the Company is
found to be liable as a result of any contamination of the site, there
can be no assurance that such indemnification will be available or that,
if available, it will be sufficient. While the ultimate results of future
claims, if any, against the Company with regard to these matters cannot
be determined, management does not anticipate that these matters will
have a material adverse impact on the consolidated results of operations
or financial position of the Company.
4. Comprehensive Income (Loss):
Effective October 1, 1998, the Company adopted SFAS No. 130 "Reporting
Comprehensive Income". This statement establishes standards for reporting
and display of comprehensive income (loss) and its components within
financial statements. There was no significant difference between net
income (loss) and comprehensive income (loss) for the three month periods
ended December 31, 1998 and 1997.
6
<PAGE> 7
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
OF OPERATIONS
OVERVIEW
The Company designs, manufactures and markets impulse ink jet subsystems,
including printheads, inks and other consumables, and related components for the
industrial market. The Company markets its products worldwide principally to
OEMs, who integrate the products into systems which are then sold to end-users
directly or via distributors. The largest market segment currently addressed by
the Company's products is that of printing onto shipping cartons. Other
industrial market segments in which the Company's products are currently being
utilized include check coding, addressing and imprinting business forms, postal
bar coding and stamp cancellation and plotting garment patterns.
Trident, Inc. was founded in 1989. Shortly after its incorporation,
a majority interest in Trident, Inc. was purchased by JWA through JWA's direct
subsidiary, Porelon. At that time, Trident, Inc. also obtained the Dataproducts
License from Dataproducts Corporation, which gave Trident, Inc. exclusive rights
to a series of liquid ink jet technology patents for use in the "industrial
marking field." The technology covered by the Dataproducts License is at the
core of the Company's current line of industrial printing subsystems. In
December 1992, Porelon purchased the remaining minority interests in Trident,
Inc. and Trident, Inc. became a wholly-owned subsidiary of Porelon.
On June 24, 1994, the Company acquired all of the capital stock of
Trident, Inc. (the 1994 Acquisition). The aggregate cash consideration paid by
the Company in the 1994 Acquisition was approximately $19.9 million, including
$1.0 million for a consulting agreement. The 1994 Acquisition has been accounted
for as a purchase and, accordingly, the total consideration has been allocated
to the assets acquired and liabilities assumed based on their estimated fair
value at the date of the 1994 Acquisition. The excess of the purchase price over
the fair value of the net assets acquired ($13.9 million) is being amortized
over 20 years. Periodically, the Company evaluates the realizability of this
asset based upon expectations of undiscounted cash flows and operating income.
Based upon its most recent analysis, the Company believes that no impairment of
the current net book value of this asset exists. The $1.0 million payment made
by the Company under the consulting agreement was being amortized. The services
provided under the consulting agreement largely related to transition services
in connection with the establishment of stand-alone operations and assistance in
preparation for an initial public offering. Other long-term assets acquired in
the 1994 Acquisition are being depreciated over their respective useful lives of
5 years.
In February 1996, the Company completed the initial public offering of its
common stock, which provided proceeds, after underwriting discounts and
commissions, of $28.3 million. The Company used approximately $10.8 million to
repay the outstanding indebtedness under its credit facility and $4.5 million to
retire all of the $5.0 million in principal amount of the zero coupon notes
issued by the Company for $1.9 million in connection with the 1994 Acquisition.
On January 6, 1999, the Company entered into a Merger Agreement with
Illinois Tool Works Inc. ("ITW") pursuant to which a subsidiary of ITW made a
cash tender offer for all of the outstanding shares of the COmpany's Common
Stock at a per share price of $16.50. The tender offer was successfully
completed on February 10, 1999 and on February 11, 1999, ITW's subsidiary
purchased all tendered shares (representing approximately 97% of the
outstanding shares of the Common Stock). The Company and ITW anticipate that
ITW's subsidiary will be merged into the Company on or about February 17, 1999
and the Company will then be a wholly-owned subsidiary of ITW.
7
<PAGE> 8
RESULTS OF OPERATIONS
Net Sales. Net sales increased $219,000 or 3% to $8.0 million for the three
months ended December 31, 1998 from $7.8 million for the three months ended
December 31, 1997. Net sales of printheads decreased by approximately $312,000
or 9% in the three months ended December 31, 1998 as compared to the same
quarter in the prior fiscal year due primarily to a decrease in the average
selling price per printhead. Sales of ink products increased by $384,000 or 11%
in the three months ended December 31, 1998 as compared to the same quarter in
the prior fiscal year due to the expanding installed base of printheads. Net
sales to international customers decreased by $623,000, or 26% for the three
months ended December 31, 1998 as compared to the three months ended December
31, 1997.
Gross Profit. Gross profit decreased $107,000, or 2% to $4.8 million for the
three months ended December 31, 1998 from $4.9 million for the three months
ended December 31, 1997. Gross profit as a percentage of net sales decreased
from 63.6% for the three months ended December 31, 1997 to 60.5% for the three
months ended December 31, 1998. The decrease in gross profit as a percentage of
net sales was due to higher average printhead cost, lower average selling price
per printhead and higher average ink cost.
Marketing and Selling Expenses. Marketing and selling expenses decreased
$32,000, or 5% to $677,000 for the three months ended December 31, 1998 from
$709,000 for the three months ended December 31, 1997 due to reduced travel and
promotion expenses partially offset by higher salaries. As a percentage of net
sales, these expenses decreased to 8.5% for the three months ended December 31,
1998 from 9.1% for the three months ended December 31, 1997.
Research and Development Expenses. Research and development expenses
increased $167,000, or 19% to $1.0 million for the three months ended December
31, 1998 from $860,000 for the three months ended December 31, 1997 due
principally to the addition of engineering personnel as well as increases in
research project materials and supplies. As a percentage of net sales, these
expenses increased to 13% for the three months ended December 31, 1998 from 11%
for the three months ended December 31, 1997.
General and Administrative Expenses. General and administrative expenses
increased $404,000, or 75% to $940,000 for the three months ended December 31,
1998 from $536,000 for the three months ended December 31, 1997. The increase in
expenses is due to additional legal fees associated with the proposed merger
with Illinois Tool Works and higher salary expenses and recruiting and
relocation costs. As a percentage of net sales, these expenses increased to
11.8% for the three months ended December 31, 1998 from 6.9% for the three
months ended December 31, 1997 due to higher expenses.
Amortization of Intangibles. The amortization amounts for the excess of
purchase price over the fair market value of net assets acquired and other
intangibles decreased by $26,000, or 13%, to $175,000 for the three months ended
December 31, 1998 from $201,000 for the three months ended December 31, 1997 due
to certain assets becoming fully amortized.
Interest Income. Interest income was $287,000 for the three months ended
December 31, 1998 as compared to $275,000 for the three months ended December
31, 1997.
Provision for Income Taxes. The provision for income taxes for the three
months ended December 31, 1998 and December 31, 1997 was $826,000 and $1.1
million on income before income taxes of $2.3 million and $2.9 million,
respectively. The effective tax rate for the three months ended December 31,
1998 and December 31, 1997 differed from the statutory rate principally due to
the non-deductibility of amortization costs related to the excess of the
purchase price over fair value of net assets acquired and state income taxes.
8
<PAGE> 9
BUSINESS ENVIRONMENT AND FUTURE RESULTS
The industrial printing industry is highly competitive and the Company
believes it will need to continue to develop new products and applications in
order to remain competitive. Several of the Company's competitors are larger and
have greater financial, research and development, marketing and other resources
than the Company. For example Nu-Kote Holdings, Inc. released a piezoelectric
printhead intended for use in industrial and other applications. No assurance
can be given that the Company will be able to compete successfully against
current or future competitors or that the competitive pressures faced by the
Company will not adversely affect its results of operations. The Company is
aware that manufacturers of certain ink products are claiming that their inks
could be utilized with certain of the Company's impulse ink jet printheads.
Although the use of such other inks will void the Company's warranties on its
printheads, and could, in the Company's judgment, result in inferior performance
and permanent damage to its printheads, there can be no assurance that the
introduction and sale of such other inks will not have a material adverse effect
on the Company's financial condition or results of operations or that end users
will continue to purchase their ink requirements from the Company.
The markets for the Company's products are characterized by changing
technology, evolving industry standards and changing customer needs. The
Company's future success will depend in part on its ability to enhance its
current products and to develop new products on a timely and cost-effective
basis in order to respond to technological developments and changing customer
needs. There can be no assurance that the Company will be successful in
developing new products or enhancing its existing products on a timely or
cost-effective basis.
New products could also have the effect of decreasing customer demand for
the Company's current products. Although the Company historically has not
experienced any material adverse impact on its business attributable to delays
in the introduction of new products, there can be no assurance that delays will
not occur in the future. The Company expects a component of its growth strategy
to be the acquisition of new technologies, whether through entering into
licensing arrangements, acquiring businesses owning desirable technology, or
otherwise. An example of this is the new solid ink jet printing technology.
There can be no assurance that the Company's investments in new technologies,
including solid ink, will lead to the successful development of new products.
The Company's net sales are dependent upon the ability of its OEM customers
to develop and sell products that incorporate the Company's impulse ink jet
products. Factors such as economic conditions, inventory positions, limited
marketing resources and other factors affecting these OEM customers could have a
substantial impact upon the Company's financial results. No assurances can be
given that the Company's OEM customers will not experience financial or other
difficulties that could adversely affect their operations and, in turn, the
results of operations of the Company.
For the three months ended December 31, 1998, approximately 84% of the
Company's net sales were to its top ten OEM customers, while approximately 34%
and 13% of the Company's net sales for this period were to two OEM customers,
VideoJet and Foxjet, Inc., respectively. A significant diminution in the sales
to or loss of any of the Company's major customers would have a material adverse
effect on the Company's results of operations.
For the three months ended December 31, 1998, approximately 67% of the
Company's net sales were derived from carton coding and the Company anticipates
that carton coding will continue to account for a substantial portion of the
Company's total net sales. A reduction in demand for carton coding systems would
have a material adverse effect on the Company's business, results of operations
and financial condition.
The Company's annual and quarterly operating results may fluctuate due to
factors such as the timing of new product announcements and introductions by the
Company and its competitors, market acceptance of new or enhanced versions of
the Company's products, changes in product mix, changes in manufacturing costs
or other expenses, competitive pricing pressures, the gain or loss of
significant customers, increased research and development expenses and general
economic conditions.
The trading price of the Company's Common Stock could be subject to wide
fluctuations in response to quarterly variations in the Company's operating
results, shortfalls in such operating results from levels forecast by securities
analysts and other events or factors. In addition, the stock market has, from
time to time, experienced extreme price and volume fluctuations that have often
been unrelated to the operating performance of the affected companies. Since
the public announcement of the tender offer by ITW for all of the outstanding
shares of the Company's Common Stock, the Common Stock has traded at prices
approaching the $16.50 per share offered by ITW. Adverse events relating to the
merger of ITW's subsidiary into the Company could have an adverse effect on the
trading price of the Common Stock.
9
<PAGE> 10
LIQUIDITY AND CAPITAL RESOURCES
At December 31, 1998 the Company had working capital of $27.7 million
compared to $26.6 million at September 30, 1998. At December 31, 1998, the
Company has cash and marketable securities of $23.1 million.
Cash flows from operations for the three months ended December 31, 1998 was
$3.3 million. This resulted primarily from net income of $1,468,000 plus
depreciation and amortization of $308,000, reduction of other assets of $955,000
and an increase in income taxes payable of $816,000 offset by an increase in
inventory of $193,000. Additionally, $604,000 was used to purchase treasury
stock and $110,000 was used to purchase leasehold improvements and equipment.
The Company also has a line of credit with Fleet Bank, which allows them to
borrow up to $1,000,000. There were no borrowings under this line at December
31, 1998.
The Company's long-term capital requirements will depend on numerous factors
including the rate at which the Company identifies, evaluates and acquires new
technologies, whether through entering into licensing arrangements or acquiring
businesses, the timing of the expansion of the Company's facilities and the
purchase of additional factory automation equipment. The Company believes that
it has sufficient cash resources to meet its anticipated needs for working
capital and capital expenditures through at least the next 12 months.
YEAR 2000 COMPLIANCE
The "Year 2000" (or "Y2K") issue affects computer and information
technology ("IT") systems, as well as non-IT systems which may include embedded
technology such as micro-processors and micro-controllers (or micro-chips) that
have date sensitive programs that may not properly recognize the year 2000.
Systems that do not properly recognize such information could generate
inaccurate data or cause a system to fail, resulting in business interruption.
The Company is developing a plan to provide measured assurances that its
computer and IT-systems, non-IT systems, including instruments and equipment,
and those of third parties with whom the Company has a material relationship
are or will be Y2K compliant.
The Company expects to complete in the near future a comprehensive
inventory and assessment of its existing IT and non-IT systems and those of
third parties, as well as planned and anticipated systems, and third parties'
services which the Company may purchase or use. Assessment will include
identifying critical systems - internal and external (including third parties)
- - in order to formulate a remediation and verification plan. The Company
currently believes that remediation and verification, which includes obtaining
written assurances from key vendors and suppliers, as well as testing, will be
completed by March 31, 1999.
The Company believes, based on preliminary information, that the costs
associated with remediation and verification to become Y2K compliant will not
have a material adverse impact on the Company's financial position, results of
operations, or cash flow. In the event that the Company's Y2K compliance plan
is not successfully implemented, the Company may experience temporary
disruptions of the Company's operations - presuming broad Y2K compliance by
general service providers such as utilities, telephone, data transfer, and
other governmental and private entities. The Company expects to develop
contingency plans for such events by March 31, 1999.
Although the Company has taken steps to address the Y2K problem, there can
be no assurance that the failure of the Company and/or its material third
parties to timely attain Y2K compliance or that the failure and/or the impacts
of broader compliance failures by telephone, mail, data transfer or other
utility or general service providers or governmental or private entities will
not have a material adverse effect on the Company. Further, there can be no
assurance that the costs associated with achieving such compliance or any
failure to become Y2K compliant will not be material to the Company's financial
position, its results of operations, or its cash flows.
The Company's discussion above regarding Y2K compliance contains several
forward-looking statements within the meaning of Section 27A of the Securities
Act of 1933 and Section 21E of the Securities Exchange Act of 1934, including,
without limitation, the Company's expectations as to the approximate time of
completion of (i) the inventory and assessment stage, (ii) the remediation and
verification stage, and (iii) its contingency plan, as well as the Company
estimates of the costs involved in achieving Y2K compliance. The actual results
of the Company's Y2K efforts could differ materially from those projected in
the forward-looking statements. Factors that might cause such a difference
include the availability of Y2K compliant software and hardware as well as
qualified personnel and other information technology resources and the actions
of third parties and governmental agencies with respect to Y2K issues.
ITEM 3: QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK
The Company sells products to customers located in Europe and the Far East.
All of these sales are denominated in U.S. dollars. In addition, the Company
has never entered into any derivative or other transactions for speculative
purposes.
10
<PAGE> 11
PART II. OTHER INFORMATION
ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K
a. Exhibits:
The following exhibits are filed as a part of this report:
Exhibit Number Title
-------------- -----
10.22 Agreement and Plan of Merger dated as of January
6, 1999 among Illinois Tool Works Inc., ITW
Acquisition Inc. and Trident International, Inc.
(incorporated herein by reference to Exhibit 3 to
the Company's Solicitation/Recommendation
Statement on Schedule 14D-9, dated January 13,
1999, as amended (the "Schedule 14D-9")
10.23 Amendment to Executive Employment Agreement
between Trident International, Inc. and Elaine A.
Pullen, dated as of January 6, 1999 (incorporated
herein by reference to Exhibit 6 to the Schedule
14D-9)
10.24 Amendment to Executive Employment Agreement
between Trident International, Inc. and J. Leo
Gagne, dated as of January 6, 1999 (incorporated
herein by reference to Exhibit 9 to the Schedule
14D-9)
10.25 Trident International, Inc. Employee Retention
Plan (incorporated herein by reference to Exhibit
11 to the Schedule 14D-9)
27 Financial Data Schedule
b. Reports on Form 8-K:
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.
Dated: February 16, 1999
Trident International, Inc.
(Registrant)
/S/ Elaine A. Pullen
-------------------------------------
Elaine A. Pullen
President and Chief Executive Officer
/S/ J. Leo Gagne
-------------------------------------
J. Leo Gagne
Vice President and Chief
Financial Officer
12
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM CONDENSED
CONSOLIDATED FINANCIAL STATEMENTS FOR THE PERIOD ENDED DECEMBER 31, 1998 AND IS
QUALIFIED IN ITS ENTIRETY BY REFERENCE TO SUCH FINANCIAL STATEMENTS.
</LEGEND>
<MULTIPLIER> 1,000
<S> <C>
<PERIOD-TYPE> 3-MOS
<FISCAL-YEAR-END> SEP-30-1999
<PERIOD-END> DEC-31-1998
<CASH> 5,868
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0
0
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</TABLE>
