<PAGE> 1
UNITED STATES
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 MARCH 31, 1997
OR
[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934
For the transition period from ....................... to ....................
Commission file number .........0-28040.......................................
....................................BACOU USA, Inc............................
(Exact name of registrant as specified in its charter)
............DELAWARE........... .........05-0470688..................
(State or other jurisdiction of (I.R.S. Employer Identification No.)
incorporation or organization)
............10 THURBER BOULEVARD, SMITHFIELD, RHODE ISLAND 02917-1896.........
(Address of principal executive offices)
(Zip Code)
.........................(401) 233-0333......................................
(Registrant's telephone number, including area code)
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 issuer's Common Stock, $.001 par
value, as of May 15, 1997 was 17,312,200.
<PAGE> 2
BACOU USA, INC.
INDEX
PAGE NO.
Part I. Financial Information --------
---------------------
Item 1. Financial Statements
Consolidated Condensed Balance Sheets
March 31, 1997 and December 31, 1996 3
Consolidated Condensed Statements of Income
Three Months ended March 31, 1997 and 1996 4
Consolidated Condensed Statements of Cash Flows
Three Months Ended March 31, 1997 and 1996 5
Notes to Consolidated Condensed Financial Statements 6 - 7
Item 2. Management's Discussion and Analysis of Financial
Condition and Results of Operations 8 - 11
Part II. Other Information
-----------------
Item 6. Exhibits and Reports on Form 8-K 12
Signatures 13
2
<PAGE> 3
<TABLE>
BACOU USA, INC. AND SUBSIDIARIES
CONSOLIDATED CONDENSED BALANCE SHEETS
<CAPTION>
(Unaudited)
MARCH 31, 1997 DECEMBER 31, 1996
-------------- -----------------
<S> <C> <C>
ASSETS
Current assets:
Cash and cash equivalents $ 2,497,020 $ 21,033,261
Trade accounts receivable, net 13,529,433 10,500,190
Inventories 17,479,322 17,483,418
Prepaid expenses 1,497,768 992,174
Deferred income taxes 762,000 762,000
------------ ------------
Total current assets 35,765,543 50,771,043
------------ ------------
Advance to Bacou S.A. 28,000,000 ---
Property and equipment, net 27,252,211 27,069,129
Intangible assets, net 46,493,688 47,268,964
------------ ------------
Total assets $137,511,442 $125,109,136
============ ============
LIABILITIES AND STOCKHOLDERS'
EQUITY
Current liabilities:
Current installments of long-term debt $ 1,000,000 $ ---
Accounts payable 3,805,166 4,015,904
Accrued compensation and benefits 1,916,338 3,162,699
Other accrued expenses 2,369,339 1,786,473
Income taxes payable 2,697,394 1,652,808
------------ ------------
Total current liabilities 11,788,237 10,617,884
------------ ------------
Long-term debt, excluding current
installments 7,000,000 ---
Deferred income taxes 2,184,000 2,084,000
------------ ------------
Total liabilities 20,972,237 12,701,884
------------ ------------
Stockholders' equity:
Preferred stock, $.001 par value, 5,000,000
shares authorized, no shares issued and
outstanding
Common stock, $.001 par
value, 25,000,000 shares authorized,
17,312,200 shares issued and outstanding 17,312 17,312
Additional paid-in capital 66,514,906 66,514,906
Retained earnings 50,006,987 45,875,034
------------ ------------
Total stockholders' equity 116,539,205 112,407,252
------------ ------------
Total liabilities and stockholders'
equity $137,511,442 $125,109,136
============ ============
</TABLE>
See accompanying notes to consolidated condensed financial statements.
3
<PAGE> 4
<TABLE>
BACOU USA, INC. AND SUBSIDIARIES
CONSOLIDATED CONDENSED STATEMENTS OF INCOME
<CAPTION>
(Unaudited)
THREE MONTHS ENDED MARCH 31,
----------------------------
1997 1996
---- ----
<S> <C> <C>
Net sales $26,380,441 $26,287,840
Cost of sales 12,381,948 11,724,739
----------- -----------
Gross profit 13,998,493 14,563,101
Operating expenses:
Selling 4,547,652 4,115,726
General and administrative 2,200,655 1,956,426
Amortization of intangible assets 887,856 1,061,171
----------- -----------
Total operating expenses 7,636,163 7,133,323
----------- -----------
Operating income 6,362,330 7,429,778
Other expenses (income):
Interest expense 5,944 806,635
Interest income (161,914) (27,724)
Other (132,243) (80,447)
----------- -----------
Total other expenses (income) (288,213) 698,464
----------- -----------
Income before income taxes 6,650,543 6,731,314
Income taxes 2,518,590 2,625,087
----------- -----------
Net income $ 4,131,953 $ 4,106,227
=========== ===========
Net income per common and common
equivalent share $ 0.24 $ 0.30
=========== ===========
Weighted average common and common
equivalent shares 17,322,377 13,860,000
=========== ===========
</TABLE>
See accompanying notes to consolidated condensed financial statements.
4
<PAGE> 5
<TABLE>
BACOU USA, INC. AND SUBSIDIARIES
CONSOLIDATED CONDENSED STATEMENTS OF CASH FLOWS
<CAPTION>
(Unaudited)
THREE MONTHS ENDED MARCH 31,
----------------------------
1997 1996
---- ----
<S> <C> <C>
Cash flows from operating activities:
Net income $ 4,131,953 $ 4,106,227
Adjustments to reconcile net income to
net cash provided by operating activities:
Depreciation and amortization 1,980,643 1,965,621
Deferred income taxes 100,000 282,699
Change in assets and liabilities:
Trade accounts receivable (3,029,243) (2,779,332)
Inventories 4,096 720,135
Prepaid expenses (505,594) (675,385)
Accounts payable (210,738) (739,180)
Accrued expenses (663,495) 965,810
Income taxes 1,044,586 1,997,388
------------ -----------
Net cash provided by operating activities 2,852,208 5,843,983
------------ -----------
Cash flows from investing activities:
Capital expenditures (1,275,869) (853,884)
Acquisition of businesses, including direct costs
of acquisition, net of cash acquired (112,580) (78,281)
Advance to Bacou S.A (28,000,000) ---
------------ -----------
Net cash used in investing activities (29,388,449) (932,165)
------------ -----------
Cash flows from financing activities:
Proceeds from long-term debt 8,000,000 ---
Repayment of long-term debt --- (4,000,000)
------------ -----------
Net cash provided by (used in)
financing activities 8,000,000 (4,000,000)
------------ -----------
Net increase (decrease) in cash and cash
equivalents (18,536,241) 911,818
Cash and cash equivalents at beginning of period 21,033,261 1,210,247
------------ -----------
Cash and cash equivalents at end of period $ 2,497,020 $ 2,122,065
============ ===========
Supplemental disclosures of cash flow information:
Cash paid during the period for interest $ --- $ 122,456
============ ===========
Cash paid during the period for income
taxes $ 1,373,500 $ 345,000
============ ===========
</TABLE>
See accompanying notes to consolidated condensed financial statements.
5
<PAGE> 6
BACOU USA, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED CONDENSED FINANCIAL STATEMENTS
MARCH 31, 1997
(UNAUDITED)
1. BASIS OF PRESENTATION
The accompanying consolidated condensed financial statements ("financial
statements") include the accounts of Bacou USA, Inc. and its wholly-owned
subsidiaries (together the "Company"). The Company designs, manufactures and
sells personal protective equipment, including non-prescription protective
eyewear, frames for prescription eyewear, respirators, vision screening
equipment and laser protective eyewear.
The financial statements have been prepared pursuant to the rules and
regulations of the Securities and Exchange Commission for interim financial
information, including the instructions to Form 10-Q and Rule 10-01 of
Regulation S-X. Accordingly, certain information and footnote disclosures
normally required in complete financial statements prepared in accordance with
generally accepted accounting principles have been condensed or omitted. In the
opinion of management these financial statements include all adjustments
necessary for a fair presentation of the results of operations for the interim
periods presented. Results of operations for interim periods may not be
indicative of results expected for a full year.
2. PENDING ACQUISITION OF SURVIVAIR, INC.
On April 14, 1997, Bacou S.A., the majority shareholder of the Company,
entered into a stock purchase agreement (the "Stock Purchase Agreement"), with
the shareholders of Comasec International S.A. ("Comasec"). Simultaneously,
Bacou S.A. and the Company entered into an Assignment Agreement (the
"Assignment").
The Stock Purchase Agreement provides for the acquisition of all of the capital
stock of Comasec by Bacou S.A., including a French operating company, Fenzy
S.A., a United States operating company, Survivair, Inc., a Connecticut
corporation ("Survivair"), as well as two United States holding companies,
Comasec Holdings, Inc. ("Comasec Holdings") and Interspiro Holdings, Inc. The
Assignment provides for the acquisition of the United States entities by the
Company through the redemption of the interest of Comasec in Comasec Holdings
(the "Acquisition"). The total acquisition price will be approximately
$27.4 million in cash, subject to certain closing adjustments (the "Purchase
Price").
Consummation of the Acquisition is subject to certain conditions including (i)
approval of the Department of Justice and Federal Trade Commission, (ii) the
divestiture by Comasec of certain operating companies and (iii) approval by the
Oversight Committee of the Board of Directors of the Company.
During March 1997, in anticipation of the Acquisition, the Company borrowed
$8.0 million under its existing term facility (the "Existing Facility"). The
proceeds from the Existing Facility, together with cash reserves, were advanced
to Bacou S.A. for its use in closing the transaction with the shareholders of
Comasec. The advance (totaling $28.0 million) is evidenced by promissory notes
which bear interest at the overnight deposit rate available at the Paris branch
of Banque Nationale de Paris (the "Promissory Notes"). The Purchase Price for
the Acquisition will be paid by the assignment of the Promissory Notes to
Comasec, then a wholly-owned subsidiary of Bacou S.A.
The Company anticipates this acquisition will close during the second quarter
of 1997.
3. TRADE ACCOUNTS RECEIVABLE
An allowance for doubtful accounts is deducted from trade accounts receivable in
the accompanying Financial Statements. The allowance for doubtful accounts was
$880,202 at March 31, 1997 and $791,531 at December 31, 1996.
6
<PAGE> 7
4. INVENTORIES
<TABLE>
Inventories consist of the following:
<CAPTION>
MARCH 31, DECEMBER 31,
1997 1996
---- ----
<S> <C> <C>
Raw material and supplies........... $ 5,911,308 $ 6,005,983
Work-in-process..................... 2,499,059 2,092,083
Finished goods...................... 9,068,955 9,385,352
----------- -----------
$17,479,322 $17,483,418
=========== ===========
</TABLE>
5. PROPERTY, EQUIPMENT AND INTANGIBLE ASSETS
Depreciation of property and equipment is provided over the estimated useful
lives of the respective assets using the straight-line method. Leasehold
improvements are amortized over the shorter of the lease term or estimated
useful life of the asset. Accumulated depreciation and amortization totaled
$8,281,788 at March 31, 1997 and $7,195,477 at December 31, 1996.
Intangible assets are amortized using the straight-line method over the
estimated periods benefited. Accumulated amortization totaled $9,488,310 at
March 31, 1997 and $8,600,454 at December 31, 1996.
6. NET INCOME PER COMMON AND COMMON EQUIVALENT SHARE
Net income per common and common equivalent share is calculated using the
weighted average number of common shares outstanding during the period, and the
net additional number of shares which would be issuable upon the exercise of
stock options, assuming the Company used the proceeds received upon exercise of
the options to purchase shares at market value (treasury stock method). Stock
options are assumed to be exercised at the beginning of the period or, if later,
the date of grant.
In April 1996 the Company completed a public offering of its common stock.
Proceeds from the sale of 3,450,000 shares, net of underwriters discount and
expenses of issuance, totaled $47.3 million. Proceeds were used to repay all
outstanding bank indebtedness ($45.0 million at March 31, 1996). Accounting
Principles Board Opinion No. 15 requires presentation of supplementary net
income per common and common equivalent share in the event shares of common
stock are sold for cash and a portion or all of the proceeds are used to retire
debt. Assuming the aforementioned sale of common stock and repayment of debt
occurred effective January 1, 1996, supplementary per share data for the three
months ended March 31, 1996 would have been as follows:
Supplementary net income per common and common equivalent share $0.27
=====
Supplementary weighted average common and common equivalent shares 17,310,000
==========
No dividends were declared or paid during the three months ended March 31, 1997
and 1996.
7
<PAGE> 8
MANAGEMENT'S DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS
FACTORS THAT MAY AFFECT FUTURE PERFORMANCE
Statements contained in this Form 10-Q that are not historical facts are
forward-looking statements that are made pursuant to the safe harbor provisions
of the Private Securities Litigation Reform Act of 1995. The Company cautions
that a number of important factors could cause actual outcomes to differ
materially from those expressed in any forward-looking statements made by, or on
behalf of, the Company. Forward-looking statements involve a number of risks and
uncertainties including, but not limited to, continued demand for current
product lines, the success of new product introductions, continued availability
and favorable pricing of raw materials, the effect of any work stoppages, the
success of the Company's acquisition strategy, competitive pressures, general
economic conditions, and regulatory matters. The Company cannot assure that it
will be able to anticipate or respond timely to changes in any of the factors
listed above, which could adversely affect the operating results in one or more
fiscal quarters. In addition, the Company's acquisition of Survivair would, if
consummated, involve risks and uncertainties including the potential inability
to integrate successfully the operations of the acquired business and the
diversion of management's attention from other business concerns. Results of
operations in any past period should not be considered indicative of the
results to be expected for future periods. Fluctuations in operating results
may also result in fluctuations in the price of the Company's common stock.
RESULTS OF OPERATIONS
<TABLE>
The following table presents certain items from the Company's consolidated
condensed statements of income, and such amounts as percentages of net sales,
for the periods indicated (in thousands, except percentages).
<CAPTION>
THREE MONTHS ENDED MARCH 31
---------------------------
1997 1996
---- ----
<S> <C> <C> <C> <C>
Net sales $26,380 100.0% $26,288 100.0%
Cost of sales 12,382 46.9% 11,725 44.6%
------- ----- ------- -----
Gross profit 13,998 53.1% 14,563 55.4%
------- ----- ------- -----
Operating expenses:
Selling 4,547 17.2% 4,116 15.7%
General and administrative 2,201 8.3% 1,956 7.4%
Amortization of intangible assets 888 3.4% 1,061 4.0%
------- ----- ------- -----
Total operating expenses 7,636 28.9% 7,133 27.1%
------- ----- ------- -----
Operating income 6,362 24.2% 7,430 28.3%
Other expense (income), net (288) (1.1%) 699 2.7%
------- ----- ------- -----
Income before income taxes 6,650 25.3% 6,731 25.6%
Income taxes 2,518 9.6% 2,625 10.0%
------- ----- ------- -----
Net income $ 4,132 15.7% $ 4,106 15.6%
======= ===== ======= =====
</TABLE>
8
<PAGE> 9
Net Sales. Net sales totaled $26.4 million for the three months ended
March 31, 1997 and $26.3 million for the three months ended March 31, 1996.
Sales of non-prescription safety eyewear increased 8.4% from 1996 to 1997 due
entirely to an increase in units shipped. However, such increase was offset by
a decline in sales of frames for prescription eyewear and by the
discontinuation of sales of complete prescription eyewear. Excluding sales of
discontinued products (principally sales of complete prescription eyewear), net
sales increased by 5.4% from $24.9 million in the 1996 period to $26.4 million
in the 1997 period.
Export sales represented 11.4% of net sales in the 1997 period and 7.8% of
net sales in the 1996 period. Export sales increased by 46.8% from 1996 to 1997.
As discussed more fully below, the Company experienced certain production
problems with the operations of Titmus Optical, Inc. (Titmus). Poor production
resulted in an abnormally high level of back-orders at Titmus totaling
approximately $1.2 million at March 31, 1997. The Company believes that it will
be able to improve productivity and eliminate these back-orders during the
second and third quarters of 1997.
Cost of Sales. Cost of sales increased 3.9% from $11.7 million for the
three months ended March 31, 1996 to $12.4 million for the three months ended
March 31, 1997 due primarily to increased shipments of non-prescription safety
eyewear.
Gross Profit. Gross profit decreased 4.0% from $14.6 million for the three
months ended March 31, 1996 to $14.0 million for the three months ended March
31, 1997. As a percentage of sales, gross profit was 53.1% in the 1997 period
and 55.4% in the 1996 period.
The Company's gross margin declined from the 1996 period to the 1997 period
primarily due to production problems at Titmus. A relocation of the operations
of Titmus to a new manufacturing facility was completed in December 1996.
Transitional difficulties associated with the relocation resulted in lower
productivity during the 1997 period. In addition, a new plating line acquired in
connection with the construction of the new facility was not fully operational
during substantially all of the 1997 period, further reducing productivity and
increasing manufacturing costs. Finally, these production problems resulted in
an increasing level of back-orders as discussed above. Lower shipments during
the 1997 period also contributed to a decline in the gross margin for that
period.
Selling, General and Administrative Expenses. Selling, general and
administrative expenses increased 11.1% from $6.1 million for the three months
ended March 31, 1996 to $6.7 million for the three months ended March 31, 1997.
This increase was primarily the result of additional advertising and marketing
costs.
Amortization of Intangibles. Amortization of intangibles decreased 16.3%
from $1.1 million for the three months ended March 31, 1996 to $0.9 million for
the three months ended March 31, 1997. This decrease was the result of the
intangible asset for a favorable lease interest becoming fully amortized.
Operating Income. As a result of the foregoing, the Company's operating
income decreased 14.4% from $7.4 million for the three months ended March 31,
1996 to $6.4 million for the three months ended March 31, 1997.
9
<PAGE> 10
Other Expense (Income), Net. Other expense (income), net was $0.7 million
and ($0.3) million for the three months ended March 31, 1996 and 1997,
respectively. Indebtedness of the Company was repaid in full by April 1996,
primarily from proceeds of the Company's initial public offering, and therefore
net interest expense decreased from the 1996 to the 1997 period.
Income Taxes. The Company's effective income tax rate was approximately
38.0% in the 1997 period and 39.0% in the 1996 period. The effective rate was
higher than the federal statutory rate of 35.0% due primarily to state and
local income taxes.
Net Income. As a result of the foregoing, the Company's net income totaled
$4.1 million in both the 1997 and 1996 periods.
LIQUIDITY AND CAPITAL RESOURCES
Gross cash flow (net income plus non-cash items) totaled $6.2 million
during the 1997 period and $6.4 million during the 1996 period.
Trade accounts receivable increased from $10.5 million at December 31, 1996
to $13.5 million at March 31, 1997. This increase resulted primarily from higher
sales volume during the first quarter of 1997.
Cash used in investing activities increased from $0.9 million for the three
months ended March 31, 1996 to $29.4 million for the three months ended March
31, 1997. As discussed below, the 1997 period includes a $28.0 million advance
to Bacou S.A. in connection with a pending acquisition of Survivair, Inc.
To supplement cash flow provided by operating activities, the Company
maintains a $3.0 million revolving credit facility which is available for use by
a wholly-owned subsidiary for its general working capital purposes. The
revolving credit facility is subject to annual renewal and presently expires May
31, 1997; however, the Company believes it will be able to renew this facility
for satisfactory periods after this date. No amounts were outstanding under this
facility as of March 31, 1997. The Company also has an $8.0 million term credit
facility (the "Existing Facility") with a domestic commercial bank. As discussed
below, borrowings totaling $8.0 million were outstanding under the Existing
Facility at March 31, 1997 ($4.0 million at May 15, 1997). Both credit
facilities require the Company to maintain a ratio of tangible net worth to
total liabilities of not less than 1.0 to 1.0.
The Company is currently negotiating a $28.0 million revolving credit
facility (the "New Facility") with a commercial bank which would be available to
fund acquisitions and for general corporate purposes. The Company expects funds
will be available under the New Facility during the second quarter of 1997.
Funds under the New Facility will be used to retire any amounts outstanding
under the Existing Facility and the Existing Facility will be terminated.
The Company believes that its cash flow provided by operating activities
and unused borrowing capacity will be sufficient to fund capital expenditures,
debt service, and to fund the Company's operating needs during 1997. However,
the Company is pursuing a business strategy which includes acquisitions as an
important element. The Company may be required to negotiate additional borrowing
facilities and additional indebtedness may be incurred in order to fund new
investments, if any, resulting from this strategy.
10
<PAGE> 11
PENDING ACQUISITION OF SURVIVAIR, INC.
On April 14, 1997, Bacou S.A., the majority shareholder of the Company,
entered into a stock purchase agreement (the "Stock Purchase Agreement"), with
the shareholders of Comasec Inernational S.A. ("Comasec"). Simultaneously, Bacou
S.A. and the Company entered into an Assignment Agreement (the "Assignment").
The Stock Purchase Agreement provides for the acquisition of all of the
capital stock of Comasec by Bacou S.A., including a French operating company,
Fenzy S.A., a United States operating company, Survivair, Inc., a Connecticut
corporation ("Survivair"), as well as two United States holding companies,
Comasec Holdings, Inc. ("Comasec Holdings") and Interspiro Holdings, Inc. The
Assignment provides for the acquisition of the United States entities by the
Company through the redemption of the interest of Comasec in Comasec Holdings
(the "Acquisition"). The total acquisition price will be approximately
$27.4 million in cash, subject to certain closing adjustments (the "Purchase
Price").
Consummation of the Acquisition is subject to certain conditions including
(i) approval of the Department of Justice and Federal Trade Commission, (ii)
the divestiture by Comasec of certain operating companies and (iii) approval
by the Oversight Committee of the Board of Directors of the Company.
During March 1997, in anticipation of the Acquisition, the Company borrowed
$8.0 million under the Existing Facility. The proceeds from the Existing
Facility, together with cash reserves, were advanced to Bacou S.A. for its use
in closing the transaction with the shareholders of Comasec. The advance
(totaling $28.0 million) is evidenced by promissory notes which bear interest
at the overnight deposit rate available at the Paris branch of Banque Nationale
de Paris (the "Promissory Notes"). The purchase price for the Acquisition will
be paid by the assignment of the Promissory Notes to Comasec, then a
wholly-owned subsidiary of Bacou S.A.
The Company anticipates this acquisition will close during the second
quarter of 1997. Survivair has historically had gross margin and operating
margin percentages that are lower than the Company's consolidated margins, due
primarily to higher manufacturing costs and competitive pricing pressure. The
Company anticipates its consolidated margins will decline as a result of this
acquisition.
The Company also anticipates the acquistion of Survivair will result in
one-time charges relating to purchased research and development in the amount
of approximately $1.2 million and inventory step-ups of approximately
$850,000 in 1997. On an annual basis, the Company anticipates intangible
amortization attributable to Survivair of approximately $800,000.
SEASONALITY
The Company's business has been subject to slight seasonal variations which
the Company has attributed to fluctuations in industrial activity and with
annual weather patterns. Historically, net sales from October through December
have been somewhat lower than other periods due to anticipated lower demand in
the more inclement winter months and planned inventory reductions by major
distributors. In addition to seasonality, the Company's business has been
variable period to period due to other factors, including promotional activity
undertaken by the Company in response to competitive pressures, market demand,
production capacity, inventory levels, and other considerations.
NEW ACCOUNTING PRONOUNCEMENTS
Statement of Financial Accounting Standard No. 128, "Earnings Per Share,"
(Statement 128) was issued in February 1997. Statement 128 requires dual
presentation of basic earnings per share and diluted earnings per share, and
supersedes previously issued accounting principles concerning determination and
disclosure of earnings per share. The Company is required to adopt the
provisions of Statement 128 for the year ended December 31, 1997; however, these
provisions may not be adopted for interim financial statements issued prior to
December 31, 1997. The Company does not believe Statement 128 will have a
significant impact on the determination of its 1997 earnings per share when the
related provisions are adopted.
11
<PAGE> 12
Item 6. Exhibits and Reports on Form 8-K
(a) Exhibit Index
Exhibit Number Description Of Exhibit
-------------- ----------------------
Exhibit 2(a) Stock Pruchase Agreement dated as of April 14,
1997 among Bacou S.A. and Francis Berend,
Pierre Alain Berend, Philippe Berend, Pascal
Berend and the other Sellers parties thereto
(Incorporated by Reference to Exhibit 2(a) of
the Company's Form 8-K filed May 12, 1997)
Exhibit 2(b) Agreement dated as of April 14, 1997 between
Bacou S.A. and Bacou USA, Inc. (Incorporated by
Reference to Exhibit 2(b) of the Company's
Form 8-K filed May 12, 1997)
Exhibit 10(a) Promissory Note in the principal amount of
$10,000,000 dated as of March 26, 1997 between
Bacou S.A. and Pro-Tech Respirators, Inc.
Exhibit 10(b) Promissory Note in the principal amount of
$18,000,000 dated as of March 27, 1997 between
Bacou S.A. and Pro-Tech Respirators, Inc.
Exhibit 11 Statement Re: Computation of Per Share Earnings
Exhibit 27 Financial Data Schedule
(b) The registrant filed no reports on Form 8-K during the quarterly
period ended March 31, 1997.
12
<PAGE> 13
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: May 15, 1997
BACOU USA, INC.
(Registrant)
/S/ PHILIP B. BARR, JR. /S/ JEFFREY T. BROWN
------------------------------ ---------------------------
Philip B. Barr, Jr., Jeffrey T. Brown
Executive Vice President and Corporate Controller and
Chief Financial Officer Chief Accounting Officer
13
<PAGE> 1
EXHIBIT 10(a)
PROMISSORY NOTE
---------------
$10,000,000.00 March 26, 1997
FOR VALUE RECEIVED, Bacou S.A., a French societe anonyme ("Maker"),
hereby unconditionally promises to pay to the order of Pro-Tech Respirators,
Inc., a Rhode Island corporation with an office located at 10 Thurber Boulevard,
Smithfield, Rhode Island 02917 ("Holder"), in lawful money of the United States
of America and in immediately available funds, an aggregate principal amount
equal to TEN MILLION AND NO/100 DOLLARS (the "Debt"). This Promissory Note (as
amended or otherwise modified, this "Note") evidences the unpaid principal
amount of the Debt together with all accrued and unpaid interest, if any,
thereon. The Debt shall be repaid on the date and in the amount specified in
this Note.
SECTION 1. THE DEBT.
(a) Maker shall repay the outstanding principal amount of the Debt in
full on April 1, 1998, (the "Maturity Date") or at any time prior thereto.
(b) The outstanding principal amount of the Debt shall bear interest
until irrevocably paid in full at a per annum rate equal at all times to the
overnight deposit rate available at the Paris branch of Banque Nationale de
Paris.
(c) Accrued and unpaid interest shall be payable in two installments, as
follows: (1) at the closing of the transaction pursuant to which Maker acquires
the shares of Comasec International, S.A. and (2) at the Maturity Date.
(d) The principal amount of this Note may be prepaid, in whole or in
part, at any time, without premium or penalty. Payments (including all
prepayments) received by Holder from Maker on this Note shall be applied first
to the payment of accrued and unpaid interest hereunder and only thereafter to
the outstanding principal balance of this Note.
SECTION 2. EVENTS OF DEFAULT; REMEDIES. If any of the following events shall
occur and be continuing (each such event, an "Event of Default"):
(i) Maker fails to repay the principal amount of the Debt when
due and such failure shall continue unremedied for five (5) days;
(ii) Maker fails to pay any interest hereunder when due and such
failure shall continue unremedied for five (5) days; or
(iii) Maker shall be adjudicated insolvent, or fails to pay, or
admits in writing its inability to pay its debts as they mature, or makes
a general assignment for the benefit of creditors; or Maker shall apply
for or consent to the appointment
<PAGE> 2
of any receiver, custodian, trustee or similar officer for it or for all
or any substantial part of its property, or such receiver, custodian,
trustee or similar officer shall be appointed without the application or
consent of Maker; or Maker shall institute (by petition, application,
answer, consent or otherwise), or take any action to authorize the
institution of, any bankruptcy, insolvency, reorganization, arrangement,
readjustment of debt, dissolution, liquidation or similar proceeding
relating to Maker under the laws of any jurisdiction; or any such
proceeding shall be instituted (by petition, application or otherwise)
against Maker and such proceeding shall not be dismissed within sixty
(60) days after being instituted;
then, (y) upon the occurrence of any Event of Default described in clause (iii)
of this SECTION 2, the unpaid principal amount of, and accrued and unpaid
interest on, the Debt shall automatically become immediately due and payable,
together with all other amounts payable under this Note, without presentment,
demand, protest or further notice of any kind, all of which are hereby expressly
waived by Maker, and (z) upon the occurrence of any other Event of Default,
Holder may, at its option, by written notice to Maker declare the entire unpaid
principal amount of the Debt, all interest accrued and unpaid thereon and all
other amounts payable under this Note to be forthwith due and payable, whereupon
all such amounts shall become and be forthwith due and payable, without
presentment, demand, protest or further notice of any kind, all of which are
hereby expressly waived by Maker.
SECTION 3. MISCELLANEOUS
(a) REMEDIES ON DEFAULT. In the event that one or more Events of Default
shall occur and be continuing, Holder may proceed to protect and enforce its
rights by an action at law, suit in equity or other appropriate proceeding or by
pursuing any other power, privilege or remedy available under applicable law. No
course of dealing or delay on the part of Holder in exercising any such right,
power, privilege or remedy shall operate as a waiver thereof or otherwise
prejudice any right, power, privilege or remedy of Holder and no single or
partial exercise by Holder of any such right, power, privilege or remedy shall
preclude any further exercise thereof. The rights, powers, privileges and
remedies afforded to Holder under this Note are cumulative and shall not
preclude the assertion of any other rights, powers, privileges or remedies now
or hereafter available to Holder under this Note, at law, in equity or
otherwise.
(b) WAIVERS, ETC. No modification or waiver of any provision of this Note
nor consent to any departure by Maker therefrom shall in any event be effective
unless the same shall be in writing and executed by Holder, and then such waiver
or consent shall be effective only in the specific instance and for the specific
purpose for which given. No notice to or demand on Maker in any case shall
entitle Maker to any other or further notice or demand in similar or other
circumstances.
(c) REIMBURSEMENT OF EXPENSES. Maker agrees to reimburse Holder for its
and its agents' and representatives' reasonable out-of-pocket expenses in
connection with the enforcement and collection of this Note. If this Note is
placed in the hands of an attorney for collection, or
2
<PAGE> 3
collected through bankruptcy or other proceedings, or if suit is brought on this
Note, Maker agrees to pay reasonable attorneys' fees, costs and expenses in
addition to all other amounts owing hereunder.
(d) DUE AUTHORIZATION. This Note has been duly authorized, executed and
delivered by Maker and constitutes the legal, valid and binding obligation of
Maker enforceable against Maker in accordance with the terms and provisions
hereof subject to general equity principles and to applicable bankruptcy,
fraudulent transfer, insolvency, reorganization, moratorium and other similar
laws from time to time in effect affecting the enforcement of creditors' rights
generally (regardless of whether such enforcement is considered in a proceeding
in equity or at law).
(e) SUCCESSORS AND ASSIGNS. This Note shall be binding upon, and inure to
the benefit of, Maker and Holder and their respective successors and assigns.
(f) SEVERABILITY. Should any provision of this Note be judicially
declared to be invalid, unenforceable or void, such decision will not have the
effect of invalidating or voiding the remainder of this Note, and the parties
hereto agree that the provision of this Note so held to be invalid,
unenforceable or void will be deemed to have been stricken herefrom and the
remainder will have the same force and effectiveness as if such provision had
never been included herein.
(g) DESCRIPTIVE HEADINGS. Section headings appearing in this Note have
been inserted for convenience of reference only and shall be given no
substantive meaning or significance whatsoever in construing the terms and
provisions of this Note.
(h) GOVERNING LAW. THIS NOTE SHALL BE INTERPRETED AND GOVERNED BY, AND
THE RIGHTS, OBLIGATIONS AND LIABILITIES OF MAKER AND THE HOLDER HEREOF SHALL BE
DETERMINED IN ACCORDANCE WITH, THE INTERNAL LAWS (AS OPPOSED TO CONFLICT OF LAWS
PROVISIONS) AND JUDICIAL DECISIONS OF THE STATE OF RHODE ISLAND AND APPLICABLE
FEDERAL LAW.
IN WITNESS WHEREOF, Maker has caused this Note to be duly executed and
delivered as of the day and year set forth above.
BACOU S.A.
By: /s/ Philippe Bacou
---------------------------
Name: Philippe Bacou
Title: Chairman
3
<PAGE> 1
EXHIBIT 10(b)
PROMISSORY NOTE
---------------
$18,000,000.00 March 27, 1997
FOR VALUE RECEIVED, Bacou S.A., a French societe anonyme ("Maker"),
hereby unconditionally promises to pay to the order of Pro-Tech Respirators,
Inc., a Rhode Island corporation with an office located at 10 Thurber Boulevard,
Smithfield, Rhode Island 02917 ("Holder"), in lawful money of the United States
of America and in immediately available funds, an aggregate principal amount
equal to EIGHTEEN MILLION AND NO/100 DOLLARS (the "Debt"). This Promissory Note
(as amended or otherwise modified, this "Note") evidences the unpaid principal
amount of the Debt together with all accrued and unpaid interest, if any,
thereon. The Debt shall be repaid on the date and in the amount specified in
this Note.
SECTION 1. THE DEBT.
(a) Maker shall repay the outstanding principal amount of the Debt in
full on April 1, 1998 (the "Maturity Date") or at any time prior thereto.
(b) The outstanding principal amount of the Debt shall bear interest
until irrevocably paid in full at a per annum rate equal at all times to the
overnight deposit rate available at the Paris branch of Banque Nationale de
Paris.
(c) Accrued and unpaid interest shall be payable in two installments, as
follows: (1) at the closing of the transaction pursuant to which Maker acquires
the shares of Comasec International, S.A. and (2) at the Maturity Date.
(d) The principal amount of this Note may be prepaid, in whole or in
part, at any time, without premium or penalty. Payments (including all
prepayments) received by Holder from Maker on this Note shall be applied first
to the payment of accrued and unpaid interest hereunder and only thereafter to
the outstanding principal balance of this Note.
SECTION 2. EVENTS OF DEFAULT; REMEDIES. If any of the following events shall
occur and be continuing (each such event, an "Event of Default"):
(i) Maker fails to repay the principal amount of the Debt when
due and such failure shall continue unremedied for five (5) days;
(ii) Maker fails to pay any interest hereunder when due and such
failure shall continue unremedied for five (5) days; or
(iii) Maker shall be adjudicated insolvent, or fails to pay, or
admits in writing its inability to pay its debts as they mature, or makes
a general assignment for the benefit of creditors; or Maker shall apply
for or consent to the appointment
<PAGE> 2
of any receiver, custodian, trustee or similar officer for it or for all
or any substantial part of its property, or such receiver, custodian,
trustee or similar officer shall be appointed without the application or
consent of Maker; or Maker shall institute (by petition, application,
answer, consent or otherwise), or take any action to authorize the
institution of, any bankruptcy, insolvency, reorganization, arrangement,
readjustment of debt, dissolution, liquidation or similar proceeding
relating to Maker under the laws of any jurisdiction; or any such
proceeding shall be instituted (by petition, application or otherwise)
against Maker and such proceeding shall not be dismissed within sixty
(60) days after being instituted;
then, (y) upon the occurrence of any Event of Default described in clause (iii)
of this SECTION 2, the unpaid principal amount of, and accrued and unpaid
interest on, the Debt shall automatically become immediately due and payable,
together with all other amounts payable under this Note, without presentment,
demand, protest or further notice of any kind, all of which are hereby expressly
waived by Maker, and (z) upon the occurrence of any other Event of Default,
Holder may, at its option, by written notice to Maker declare the entire unpaid
principal amount of the Debt, all interest accrued and unpaid thereon and all
other amounts payable under this Note to be forthwith due and payable, whereupon
all such amounts shall become and be forthwith due and payable, without
presentment, demand, protest or further notice of any kind, all of which are
hereby expressly waived by Maker.
SECTION 3. MISCELLANEOUS
(a) REMEDIES ON DEFAULT. In the event that one or more Events of Default
shall occur and be continuing, Holder may proceed to protect and enforce its
rights by an action at law, suit in equity or other appropriate proceeding or by
pursuing any other power, privilege or remedy available under applicable law. No
course of dealing or delay on the part of Holder in exercising any such right,
power, privilege or remedy shall operate as a waiver thereof or otherwise
prejudice any right, power, privilege or remedy of Holder and no single or
partial exercise by Holder of any such right, power, privilege or remedy shall
preclude any further exercise thereof. The rights, powers, privileges and
remedies afforded to Holder under this Note are cumulative and shall not
preclude the assertion of any other rights, powers, privileges or remedies now
or hereafter available to Holder under this Note, at law, in equity or
otherwise.
(b) WAIVERS, ETC. No modification or waiver of any provision of this Note
nor consent to any departure by Maker therefrom shall in any event be effective
unless the same shall be in writing and executed by Holder, and then such waiver
or consent shall be effective only in the specific instance and for the specific
purpose for which given. No notice to or demand on Maker in any case shall
entitle Maker to any other or further notice or demand in similar or other
circumstances.
(c) REIMBURSEMENT OF EXPENSES. Maker agrees to reimburse Holder for its
and its agents' and representatives' reasonable out-of-pocket expenses in
connection with the enforcement and collection of this Note. If this Note is
placed in the hands of an attorney for collection, or
2
<PAGE> 3
collected through bankruptcy or other proceedings, or if suit is brought on this
Note, Maker agrees to pay reasonable attorneys' fees, costs and expenses in
addition to all other amounts owing hereunder.
(d) DUE AUTHORIZATION. This Note has been duly authorized, executed and
delivered by Maker and constitutes the legal, valid and binding obligation of
Maker enforceable against Maker in accordance with the terms and provisions
hereof subject to general equity principles and to applicable bankruptcy,
fraudulent transfer, insolvency, reorganization, moratorium and other similar
laws from time to time in effect affecting the enforcement of creditors' rights
generally (regardless of whether such enforcement is considered in a proceeding
in equity or at law).
(e) SUCCESSORS AND ASSIGNS. This Note shall be binding upon, and inure to
the benefit of, Maker and Holder and their respective successors and assigns.
(f) SEVERABILITY. Should any provision of this Note be judicially
declared to be invalid, unenforceable or void, such decision will not have the
effect of invalidating or voiding the remainder of this Note, and the parties
hereto agree that the provision of this Note so held to be invalid,
unenforceable or void will be deemed to have been stricken herefrom and the
remainder will have the same force and effectiveness as if such provision had
never been included herein.
(g) DESCRIPTIVE HEADINGS. Section headings appearing in this Note have
been inserted for convenience of reference only and shall be given no
substantive meaning or significance whatsoever in construing the terms and
provisions of this Note.
(h) GOVERNING LAW. THIS NOTE SHALL BE INTERPRETED AND GOVERNED BY, AND
THE RIGHTS, OBLIGATIONS AND LIABILITIES OF MAKER AND THE HOLDER HEREOF SHALL BE
DETERMINED IN ACCORDANCE WITH, THE INTERNAL LAWS (AS OPPOSED TO CONFLICT OF LAWS
PROVISIONS) AND JUDICIAL DECISIONS OF THE STATE OF RHODE ISLAND AND APPLICABLE
FEDERAL LAW.
IN WITNESS WHEREOF, Maker has caused this Note to be duly executed and
delivered as of the day and year set forth above.
BACOU S.A.
By: /s/ Philippe Bacou
----------------------------
Name: Philippe Bacou
Title: Chairman
3
<PAGE> 1
EXHIBIT 11
----------
<TABLE>
Bacou USA, Inc.
Statement Re: Computation Of Per Share Earnings
-----------------------------------------------
(Unaudited)
<CAPTION>
Three Months Ended
------------------
March 31,
---------
1997 1996
---- ----
<S> <C> <C>
Primary:
Weighted average shares
outstanding 17,312,200 13,860,000
Net effect of dilutive stock options
options based on the treasury stock
method using the average market
price 10,177 ---
----------- -----------
Total 17,322,377 13,860,000
=========== ===========
Net income $ 4,131,953 $ 4,106,227
=========== ===========
Per share amount $ 0.24 $ 0.30
=========== ===========
Fully Diluted:
Weighted average shares
outstanding 17,312,200 13,860,000
Net effect of dilutive stock options
based on the treasury stock
method using the greater of
average or period end price 10,177 ---
----------- -----------
Total 17,322,377 13,860,000
=========== ===========
Net income $ 4,131,953 $ 4,106,227
=========== ===========
Per share amount $ 0.24 $ 0.30
=========== ===========
</TABLE>
<TABLE> <S> <C>
<ARTICLE> 5
<MULTIPLIER> 1
<CURRENCY> U.S. DOLLARS
<S> <C>
<PERIOD-TYPE> 3-MOS
<FISCAL-YEAR-END> DEC-31-1997
<PERIOD-START> JAN-01-1997
<PERIOD-END> MAR-31-1997
<EXCHANGE-RATE> 1
<CASH> 2,497,020
<SECURITIES> 0
<RECEIVABLES> 13,529,433
<ALLOWANCES> 880,202
<INVENTORY> 17,479,322
<CURRENT-ASSETS> 35,765,543
<PP&E> 27,252,211
<DEPRECIATION> 8,281,788
<TOTAL-ASSETS> 137,511,442
<CURRENT-LIABILITIES> 11,788,237
<BONDS> 7,000,000
0
0
<COMMON> 17,312
<OTHER-SE> 116,521,893
<TOTAL-LIABILITY-AND-EQUITY> 137,511,442
<SALES> 26,380,441
<TOTAL-REVENUES> 26,380,441
<CGS> 12,381,948
<TOTAL-COSTS> 12,381,948
<OTHER-EXPENSES> 0
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 5,944
<INCOME-PRETAX> 6,650,543
<INCOME-TAX> 2,518,590
<INCOME-CONTINUING> 4,131,953
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 4,131,953
<EPS-PRIMARY> 0.24
<EPS-DILUTED> 0.24
</TABLE>
