UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
-------------------------
FORM 10-Q
[X] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
For the Quarterly Period Ended March 31, 2000
[ ] 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 000-22973
CTB INTERNATIONAL CORP.
(Exact name of registrant as specified in the charter)
Indiana 35-1970751
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
State Road 15 North, P.O. Box 2000, Milford, IN 46542-2000
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code: (219)-658-4191
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 [ ]
At March 31, 2000, approximately 10,986,602 shares, par value $.01 per share, of
common stock of the Registrant were outstanding.
<PAGE>
CTB INTERNATIONAL CORP. AND SUBSIDIARIES
INDEX
<TABLE>
<CAPTION>
<S> <C>
Page
Part I
Financial Information
Item 1. Financial Statements
Condensed Consolidated Balance Sheets at March 31, 2000 and
December 31, 1999 1
Condensed Consolidated Income Statements for the Three Months
Ended March 31, 2000 and 1999 2
Condensed Consolidated Statements of Cash Flows for the Three
Months Ended March 31, 2000 and 1999 3
Notes to Condensed Consolidated Financial Statements 4
Item 2. Management's Discussion and Analysis of Financial Condition and
Results of Operations 8
Item 3. Quantitative and Qualitative Disclosures About Market Risk 11
Part II
Other Information
Item 1. II-1
Item 4. II-1
Item 6. II-1
Signature II-3
</TABLE>
<PAGE>
PART I. FINANCIAL INFORMATION
Item 1. Financial Statements
CTB International Corp. and Subsidiaries
Condensed Consolidated Balance Sheets
(In thousands, except share and per share amounts)
(Unaudited)
<TABLE>
<CAPTION>
March 31, December 31,
2000 1999
-------------- --------------
<S> <C> <C>
ASSETS
CURRENT ASSETS:
Cash and cash equivalents $ 2,129 $ 2,439
Accounts receivable - Net 32,599 29,787
Inventories 31,152 29,695
Deferred income taxes 887 900
Prepaid expenses and other current assets 2,849 2,811
-------------- --------------
Total current assets 69,616 65,632
PROPERTY, PLANT AND EQUIPMENT - Net 53,902 55,515
INTANGIBLES - Net 83,747 86,157
OTHER ASSETS 247 258
-------------- --------------
TOTAL ASSETS $ 207,512 $ 207,562
============== ==============
LIABILITIES AND SHAREHOLDERS' EQUITY
CURRENT LIABILITIES:
Accounts payable $ 13,867 $ 13,564
Current portion of long-term debt 747 795
Current portion of accrued Earn-Out - 1,809
Accrued liabilities 16,759 17,076
Deferred revenue 2,195 2,618
-------------- --------------
Total current liabilities 33,568 35,862
LONG-TERM DEBT 82,636 77,060
DEFERRED INCOME TAXES 9,366 9,449
ACCRUED POSTRETIREMENT BENEFIT COST AND OTHER 4,191 4,437
COMMITMENTS AND CONTINGENCIES (See Note 7)
SHAREHOLDERS' EQUITY:
Common stock, $.01 par value; 40,000,000 shares authorized;
12,924,990 shares issued 129 129
Preferred stock - 6% cumulative, $.01 par value; 4,000,000
shares authorized; 0 shares issued and outstanding - -
Treasury stock, at cost; 2000 - 1,938,388 shares,
1999-1,257,113 shares (13,745) (9,251)
Additional paid-in capital 76,716 76,818
Reduction for carryover of predecessor cost basis (26,964) (26,964)
Retained earnings 44,062 41,813
Accumulated other comprehensive income:
Foreign currency translation adjustment (2,447) (1,791)
-------------- --------------
Total shareholders' equity 77,751 80,754
-------------- --------------
TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY $ 207,512 $ 207,562
============== ==============
</TABLE>
See accompanying notes to condensed consolidated financial statements.
<PAGE>
CTB International Corp. and Subsidiaries
Condensed Consolidated Income Statements
(In thousands, except per share amounts)
(Unaudited)
<TABLE>
<CAPTION>
For the Three Months Ended
March 31,
-------------------------------
2000 1999
----- -----
<S> <C> <C>
NET SALES $ 57,752 $ 59,905
COST OF SALES 41,620 45,987
-------------- -------------
Gross profit 16,132 13,918
OTHER OPERATING EXPENSE:
Selling, general, and
administrative expenses 10,692 10,255
Amortization of goodwill 605 647
-------------- -------------
Operating income 4,835 3,016
INTEREST EXPENSE - Net (1,241) (1,460)
OTHER INCOME (EXPENSE) - Net 152 (1,013)
-------------- -------------
INCOME BEFORE INCOME TAXES 3,746 543
INCOME TAXES 1,498 214
-------------- -------------
NET INCOME $ 2,248 $ 329
============== =============
EARNINGS PER SHARE:
Basic: Earnings per share $ 0.20 $ 0.03
============== =============
Weighted average shares 11,263 12,106
============== =============
Diluted: Earnings per share $ 0.20 $ 0.03
============== =============
Weighted average shares 11,479 12,330
============== =============
</TABLE>
See accompanying notes to condensed consolidated financial statements.
<PAGE>
CTB International Corp. and Subsidiaries
Condensed Consolidated Statements of Cash Flows
(In thousands)
(Unaudited)
<TABLE>
<CAPTION>
For the Three Months Ended
March 31,
--------------------------------
2000 1999
----- -----
<S> <C> <C>
CASH FLOWS FROM OPERATING ACTIVITIES:
Net income $ 2,248 $ 329
Adjustments to reconcile net income to net cash flows
from operating activities:
Depreciation 1,860 1,702
Amortization 720 791
Foreign exchange loss 33 -
Equity in joint venture (9) -
Loss on sale of assets 21 -
Deferred income taxes 31 (155)
Changes in operating assets and liabilities:
Accounts receivable (3,215) 586
Construction costs and estimated earnings in excess of billings - 2,698
Inventories (1,789) (1,830)
Prepaid expenses and other assets 164 551
Accounts payable, accruals and other liabilities (1,802) (656)
-------------- --------------
Net cash flows from operating activities (1,738) 4,016
-------------- --------------
CASH FLOWS FROM INVESTING ACTIVITIES:
Acquisition of property, plant and equipment (686) (2,306)
Acquisitions, net of cash acquired - (33,884)
Proceeds from sale of assets 3 10
-------------- --------------
Net cash flows from investing activities (683) (36,180)
-------------- --------------
CASH FLOWS FROM FINANCING ACTIVITIES:
Purchase of treasury stock (4,608) (1,684)
Stock option exercise 12 -
Proceeds from long-term debt 72,285 124,764
Payments on long-term debt (65,169) (87,557)
-------------- --------------
Net cash flows from financing activities 2,520 35,523
-------------- --------------
NET INCREASE IN CASH AND CASH EQUIVALENTS 99 3,359
NET EFFECT OF TRANSLATION ADJUSTMENT (409) (174)
CASH AND CASH EQUIVALENTS, BEGINNING OF PERIOD 2,439 608
-------------- --------------
CASH AND CASH EQUIVALENTS, END OF PERIOD $ 2,129 $ 3,793
============== ==============
</TABLE>
See accompanying notes to condensed consolidated financial statements.
<PAGE>
CTB International Corp. and Subsidiaries
Notes To Condensed Consolidated Financial Statements
(Unaudited)
Note 1. Basis of Presentation
The accompanying unaudited condensed consolidated financial statements have
been prepared in accordance with generally accepted accounting principles for
interim financial information and with the instructions to Form 10-Q and Article
10 of Regulation S-X. Accordingly, they do not include all of the information
and footnotes required by generally accepted accounting principles for complete
financial statements. In the opinion of management, all adjustments (consisting
of normal recurring accruals) considered necessary for a fair presentation have
been included. Operating results for the three month period ended March 31,
2000, are not necessarily indicative of the results that may be expected for the
year ending December 31, 2000. For further information, refer to the Company's
Form 10-K for the fiscal year ended December 31, 1999 which includes the
Company's annual audited financial statements.
Note 2. Inventories
Inventories consist of the following (in thousands):
<TABLE>
<CAPTION>
March 31, December 31,
2000 1999
---- ----
<S> <C> <C>
Raw material $ 6,587 $ 7,937
Work in process 1,685 2,025
Finished goods 22,880 19,733
--------------- ---------------
31,152 29,695
LIFO valuation allowance - -
--------------- ---------------
Total $ 31,152 $ 29,695
=============== ===============
</TABLE>
Note 3. Contracts In Process
Construction contracts in process consist of the following (in thousands):
<TABLE>
<CAPTION>
March 31, December 31,
2000 1999
---- ----
<S> <C> <C>
Costs incurred on uncompleted contracts $ - $ 306
Estimated profit (loss) - -
----------------- ---------------
- 306
Less: Billings to date - 470
----------------- ---------------
Billings in excess of costs on uncompleted
contracts $ - $ (164)
================= ===============
</TABLE>
<PAGE>
Note 4. Property, Plant and Equipment
Property, plant and equipment consist of the following (in thousands):
<TABLE>
<CAPTION>
March 31, December 31,
2000 1999
---- ----
<S> <C> <C>
Land and improvements $ 3,625 $ 3,674
Buildings and improvements 22,744 22,958
Machinery and equipment 48,990 48,217
Construction in progress 1,185 1,596
---------------- ---------------
76,544 76,445
Less accumulated depreciation (22,642) (20,930)
---------------- ---------------
Total $ 53,902 $ 55,515
================ ===============
</TABLE>
Note 5. Intangibles
Intangibles consist of the following (in thousands):
<TABLE>
<CAPTION>
March 31, December 31,
2000 1999
---- ----
<S> <C> <C>
Goodwill $ 89,408 $ 91,607
Accumulated amortization (6,576) (6,490)
---------------- ---------------
Goodwill - Net 82,832 85,117
---------------- ---------------
Deferred finance costs 2,821 2,821
Accumulated amortization (1,906) (1,781)
---------------- ---------------
Deferred finance costs - Net 915 1,040
---------------- ---------------
Total $ 83,747 $ 86,157
================ ===============
</TABLE>
Note 6. Business Combinations
On January 12, 1999, the Company acquired substantially all of the assets of
Roxell N.V. (Roxell). Based in Maldegem, Belgium, Roxell is a leading global
manufacturer and marketer of automated feeding and watering systems, as well as
feed storage bins for the poultry and swine production markets. The purchase
price of $33.9 million, net of cash acquired and including expenses, was
financed through German Mark denominated borrowings under the Company's amended
credit facility.
The acquisition was accounted for under the purchase method of accounting.
Accordingly, the purchase price has been allocated to the acquired assets and
liabilities based on their fair market values as of the date of acquisition with
the remainder charged to goodwill which is being amortized on a straight-line
basis over 40 years. The purchase price has been allocated as follows:
(In thousands)
Current assets $ 10,508
Property, plant and equipment 7,175
Intangibles and other assets 27,849
Long-term debt assumed (740)
Liabilities assumed (10,908)
-----------
Total purchase price $ 33,884
===========
<PAGE>
Note 7. Commitments and Contingencies
There are various claims and pending legal proceedings against the Company
involving matters arising out of the ordinary conduct of business. While the
Company is unable to predict with certainty the outcome of current proceedings,
based upon the facts currently known to it, the Company does not believe that
resolution of these proceedings will have a material adverse effect on its
financial statements.
Pursuant to the Stock Purchase Agreement dated November 1995, the Company agreed
to make certain contingent payments to the Predecessor Company shareholders (the
"Earn-Out Amount") based on a calculation of cumulative Earnings Before
Interest, Taxes, Depreciation and Amortization ("EBITDA") calculated in
accordance with the Stock Purchase Agreement. The Earn-Out Amount was determined
based on cumulative EBITDA for the three-year period ended December 31, 1998.
The Earn-Out amount recorded under the terms of the Stock Purchase Agreement as
amended was calculated as $7,040,000.
The Company was obligated to pay the Earn-Out Amount in three installments
beginning on April 5, 1999. Two installments totaling $5,280,000 were made
during 1998. The third and final installment of $1,760,000 was paid on January
3, 2000.
Portions of the Earn-Out Amount were paid to certain current directors and
officers of the Company.
Note 8. Treasury Stock
At March 31, 2000 treasury stock consisted of 1,938,388 shares acquired,
684,600 of which were purchased at a cost of $4,608,000 during the three month
period ending March 31, 2000. To date, 2,261,155 of the 2,500,000 shares
authorized have been repurchased, with 322,767 being reissued. The shares
repurchased are accounted for under the cost method and reported as "Treasury
Stock" and result in a reduction of "Shareholders' Equity." When treasury shares
are reissued, the Company uses a first-in, first-out method and the difference
between repurchase cost and the reissuance price is treated as an adjustment to
"Additional Paid-in Capital."
Note 9. Comprehensive Income
Comprehensive income for the three months ended March 31, 2000 was $1.6 million
compared to a loss of $1.0 million in the corresponding period of 1999. Net
income was adjusted by the change in the cumulative translation adjustment to
arrive at comprehensive income.
Note 10. Segments
Statement of Financial Accounting Standards No. 131, "Disclosures about Segments
of an Enterprise and Related Information" (SFAS 131) requires companies to
provide certain information about their operating segments.
The Company has aggregated its operating segments in accordance with SFAS 131.
Due to the restructuring of the Company's operations, effective January 1, 2000,
it is impracticable to obtain comparable data for prior year segment
information.
The Company's products for the Protein Group Segment consist of complete systems
which deliver feed and water, and provide a comfortable in-house climate for
poultry and hogs, thereby creating an optimum growing environment for efficient
production of meat and eggs. Protein Group Segment sales are primarily in the
U.S. and Canada. The Grain Segment manufactures a wide variety of models of
grain storage bins for on-farm and commercial grain storage. The Grain Segment
also manufactures and markets a line of industrial bulk storage bins and
conveying equipment and markets various related accessory items. Grain Segment
sales are primarily to customers in the U.S. and Canada. The International
Segment manufactures and markets products similar to those of the Protein Group
and Grain Segments. Sales in the International Segment, however, are generally
to customers outside the U.S. and Canada. Inter-segment sales are recorded at
standard cost plus five percent.
Management evaluates performance based upon operating earnings before interest
and income taxes. The Company does not maintain for each of its operating
segments separate stand-alone financial statements prepared in accordance with
generally accepted accounting principles. In accordance with SFAS 131, the
following table contains information related to each operating segment that is
consistent with internal management reports.
<PAGE>
For the Three Months
Ended
March 31, 2000
<TABLE>
<CAPTION>
Protein
Group Grain International Other Total
--------- --------- -------------- ------- --------
<S> <C> <C> <C> <C> <C>
External net sales $ 23,658 $ 13,457 $ 20,637 $ - $ 57,752
Inter-segment sales 2,420 3,594 711 (6,725) -
Operating income 5,285 2,457 2,611 (5,518) 4,835
Total assets $ 35,558 $ 44,650 $ 64,778 $ 62,526 $ 207,512
</TABLE>
"Other" consists primarily of eliminations for Inter-segment sales and
corporate-related assets. Additionally, "Other" includes the costs for shared
services functions, such as Finance, Information Systems and Administration and
for shared manufacturing cost centers for the Milford, Indiana, operations.
Note 11. New Accounting Pronouncement
The Financial Accounting Standards Board issued Statement of Financial
Accounting Standards No. 133, "Accounting for Derivative Instruments and Hedging
Activities" (SFAS 133). This statement establishes accounting and reporting
standards for derivative instruments, including certain derivative instruments
embedded in other contracts (collectively referred to as derivatives), and for
hedging activities. It requires that an entity recognize all derivatives as
either assets or liabilities in the statement of financial position and measure
those instruments at fair value. This statement is effective for the Company's
fiscal year beginning 2001. The Company is evaluating SFAS 133 to determine its
impact on the consolidated financial statements.
Note 12. Restructuring
A corporate restructuring program was announced in late September 1999. The
Company eliminated approximately 12% of the positions in its Milford, Indiana,
operations support, sales and administrative functions. The action resulted in a
pre-tax charge of $0.9 million, of which $0.6 million was recorded in cost of
sales and $0.3 million was charged against selling, general and administrative
expenses. During the fourth quarter of 1999, an additional accrual of $0.2
million was recorded in selling, general and administrative expenses upon the
elimination of positions in the Company's Milford, Indiana, and Brazilian sales
and administrative functions. Payments made for restructuring expenses during
the fourth quarter of 1999 were $0.4 million. Payments made for restructuring
expenses during the first quarter of 2000 were $0.3 million. The $0.4 million
balance at March 31, 2000, to be paid in future periods, is reported in accrued
liabilities.
Item 2.
CTB International Corp. and Subsidiaries
Management's Discussion and Analysis
of Financial Condition and Results of Operations
For a full understanding of the Company's financial condition, results of
operations, and cash flows, this commentary should be read in conjunction with
the Company's Securities and Exchange Commission filings, including, but not
limited to the Company's Form 10-K for the fiscal year ended December 31, 1999.
Results of Operations
CTB International Corp. ("CTB" or the "Company") is a leading designer,
manufacturer and marketer of systems used in the grain industry and in the
production of poultry meat, pork and eggs. It serves the animal agriculture
(poultry and hog), egg, and grain industries. The Company believes that it is
the largest global supplier of poultry and egg production systems and grain
storage bins and one of the largest global providers of hog production systems.
CTB operates from facilities in the U.S.A., Europe and Latin America as well as
through a worldwide distribution network. It markets its agricultural products
on a worldwide basis primarily under the CHORE-TIME(R), BROCK(R), FANCOM(R),
ROXELL(R), SIBLEY(R) and STACO(R) brand names.
<PAGE>
Three Months Ended March 31, 2000 Compared with Three Months Ended March 31,
1999
Net sales decreased 3.6% to $57.8 million in the three months ended March
31, 2000 compared to $59.9 million in the corresponding period of 1999. The
decline in sales is attributed to continued market softness in 2000 and to the
completion of the poultry-building project in 1999, which contributed $3.4
million of revenue from buildings in the first quarter of 1999. These factors
were offset somewhat by a successful early-order program for grain bins,
improvement in some international markets, and strong poultry sector ventilation
system sales in response to industry efforts to upgrade existing production
facilities.
Gross profit increased 15.9% to $16.1 million in the three months ended
March 31, 2000 or 27.9% of net sales compared to $13.9 million in the
corresponding period of 1999 or 23.2% of net sales. The gross profit margin
increase of 4.7 percentage points was attributable to recent operational
improvements in the first quarter of 2000 as well as the completion of the
poultry-building project in 1999, which represented $3.4 million in buildings
sales at essentially no margin and a one-time non-cash purchase accounting
charge of $0.4 million in 1999 related to the Roxell N.V. acquisition.
Selling, general and administrative expenses increased 4.3% or $0.4 million
to $10.7 million in the three months ended March 31, 2000 from $10.3 million in
the corresponding period of 1999. As a percent of net sales, selling, general
and administrative expenses were 18.5% in the three months ended March 31, 2000
and 17.1% in the corresponding period of 1999. The dollar increase is primarily
attributable to increased profit sharing resulting from record earnings which
more than offset reductions through restructuring and cost savings efforts. The
increase in selling, general and administrative costs as a percent of sales was
due primarily to the factors noted above, which increased costs on an overall
basis, and lower sales volumes.
Amortization of goodwill remained at $0.6 million in the three months ended
March 31, 2000 compared to the corresponding period for 1999.
Operating income increased 60.3% or $1.8 million to $4.8 million in the
three months ended March 31, 2000 compared to $3.0 million in the corresponding
period of 1999. Operating income margins increased to 8.4% of net sales in the
three months ended March 31, 2000 from 5.0% of net sales in the corresponding
period of 1999. The improvement in operating income was a result of additional
gross profit, which was somewhat offset by increased selling, general and
administrative expenses. The increase in operating income margins is due to the
improvement in gross profit margins offset somewhat by the increase in selling,
general and administrative expenses as a percent of sales, as discussed above.
Interest expense decreased to $1.2 million in the three months ended March
31, 2000 or 15.0% from $1.5 million in the corresponding period in 1999. The
decrease is due primarily to lower average borrowings in 2000 offset somewhat by
higher average interest rates.
Other income/expense improved from expense of $1.0 million in 1999 to $0.2
million of income in 2000. The improvement is due primarily to the 1999 impact
of a non-cash foreign exchange loss from U.S. dollar-denominated intercompany
debt. This charge was primarily a result of the devaluation of the Brazilian
currency versus the U.S. dollar in the three months ended March 31, 1999.
Net income increased 583.3% or $1.9 million to $2.2 million in the three
months ended March 31, 2000 from $0.3 million for the corresponding period of
1999. The increase was due to record first quarter operating income, lower
interest expense, and elimination of foreign currency losses, as discussed
above.
<PAGE>
Financial Position
Changes in the financial position of the Company from December 31, 1999 to
March 31, 2000 were due primarily to operating activities.
Total assets decreased from $207.6 million at December 31, 1999 to $207.5
million at March 31, 2000. Accounts receivable increased by $2.8 million from
December 31, 1999 to March 31, 2000. Inventories increased by $1.5 million from
December 31, 1999. Both accounts receivable and inventories increased due to
seasonal increases in sales volume offset somewhat by improved management of
these items. Net property, plant and equipment decreased $1.6 million from
December 31, 1999 to March 31, 2000, primarily due to depreciation and foreign
exchange changes offset somewhat by low capital outlays relative to depreciation
charges.
Total liabilities increased $3.0 million from $126.8 million at December 31,
1999 to $129.8 at March 31, 2000. Accounts payable and accrued liabilities
remained flat at $30.6 million. Long-term debt increased $5.6 million from $77.1
million at December 31, 1999 to $82.6 million at March 31, 2000 due to
borrowings incurred to finance revolver borrowings to support seasonal
operational changes and the repurchase of treasury stock. Additionally, the
Accrued Earn-Out was paid during the first quarter of 2000.
Total shareholders' equity decreased $3.0 million due to treasury stock
purchases and changes in cumulative translation adjustment partially offset by
net income for the period.
Liquidity and Capital Resources
As of March 31, 2000, the Company had $36.0 million of working capital, an
increase of $6.2 million from working capital of $29.8 million as of December
31, 1999. Net cash used in operating activities for the three months ended March
31, 2000 was $1.7 million. Cash flows used in operations was primarily the
result of increases in working capital offset by net income and non-cash
depreciation and amortization. Cash flows provided from operations in 1999 was
$4.0 million, primarily attributable to reductions in construction costs and
estimated earnings in excess of billings.
For the three months ended March 31, 2000, cash used in investing
activities was $0.7 million, which was used primarily for acquisitions of
assets. For the three months ended March 31, 1999, cash used in investing
activities was $36.2 million, which was used primarily for acquisitions of
assets and the acquisition of Roxell N.V.
For the three months ended March 31, 2000, net cash provided from financing
activities was $2.5 million. During this period there was a net $7.1 million
increase in cash flows from revolver borrowing activity offset by a $4.6 million
use of cash for treasury stock purchases. For the three months ended March 31,
1999, cash provided from financing activities was $35.5 million. During this
period there was a net $37.2 million in cash flows from revolver activity offset
by $1.7 million of cash used for treasury stock repurchases.
The Company believes that existing cash, cash flows from operations and
available borrowings will be sufficient to support its working capital, capital
expenditures and debt service requirements for the foreseeable future.
Seasonality
Sales of agricultural equipment are seasonal, with poultry, swine and egg
producers purchasing equipment during prime construction periods in the late
spring and summer and farmers traditionally purchasing grain storage bins in
late summer and fall in conjunction with the harvesting season. The Company's
net sales and net income have historically been lower during the first and
fourth fiscal quarters as compared to the second and third quarters as
distributors and dealers increase inventory in anticipation of seasonal demand.
The following table presents unaudited interim operating results of the
Company. The Company believes that the following information includes all
adjustments (consisting only of normal, recurring adjustments) that the Company
considers necessary for a fair presentation for the respective periods. The
operating results for any interim period are not necessarily indicative of
results for this or any other interim period or the entire fiscal year.
<PAGE>
<TABLE>
<CAPTION>
(In thousands, except per share amounts) Three Months Ended
- ------------------------------------------------------------------------------------------------------------------
March 31, March 31, June 30, September 30, December 31,
2000 1999 1999 1999 1999
---- ---- ---- ---- ----
<S> <C> <C> <C> <C> <C>
Sales $ 57,752 $ 59,905 $ 76,260 $ 84,088 $ 52,350
Gross profit 16,132 13,918 20,438 22,502 13,211
Gross margin 27.9% 23.2% 26.8% 26.8% 25.2%
Operating income $ 4,835 $ 3,016 $ 8,110 $ 10,533 $ 3,566
Operating income margin 8.4% 5.0% 10.6% 12.5% 6.8%
Net income $ 2,248 $ 329 $ 3,802 $ 4,883 $ 1,202
Basic earnings per share $ 0.20 $ 0.03 $ 0.32 $ 0.41 $ 0.10
Basic weighted average common
shares outstanding 11,263 12,106 12,022 12,022 11,998
Diluted earnings per share $ 0.20 $ 0.03 $ 0.31 $ 0.40 $ 0.10
Diluted weighted average common
shares outstanding 11,479 12,330 12,277 12,282 12,206
</TABLE>
Year 2000 Compliance
The Company is not aware of any significant disruption in its business as a
result of the Year 2000 issue. The Company incurred approximately $300,000 of
cost in implementing its Year 2000 readiness plan.
Forward Looking Statements
Certain statements contained herein including, without limitation, those
regarding (i) ability to support future working capital needs, (ii) seasonality
of the Company's business and (iii) market risk associated with changes in
interest and foreign exchange rates, contain certain forward-looking statements
concerning the Company's operations, economic performance and financial
condition. Because such statements involve risks and uncertainties regarding the
Company's business and operations and the agriculture industry, actual results
may differ materially from those expressed or implied by such forward-looking
statements. Please refer to the Company's Securities and Exchange Commission
filings, including, but not limited to, the Company's Form 10-K filing, where
specific risk factors that could cause actual results to differ materially from
the forward-looking statements made in this document are identified.
Item 3. Quantitative and Qualitative Disclosures About Market Risk
The Company is subject to market risk associated with adverse changes in
interest rates and foreign currency exchange rates, but does not hold any market
risk sensitive instruments for trading purposes. Principal exposed to interest
rate risk at March 31, 2000 is $29.1 million in variable rate debt exclusive of
amounts covered by interest rate swap agreements. The Company measures its
interest rate risk by estimating the net amount by which potential future net
earnings would be impacted by hypothetical changes in market interest rates
related to all interest rate sensitive assets and liabilities. Assuming a
hypothetical 20% increase in interest rates as of March 31, 2000, the estimated
reduction in future earnings, net of tax, is expected to be approximately $0.3
million.
The Company utilizes foreign exchange contracts to minimize its exposure to
currency risk for the payment of its interest obligations on non-U.S. dollar
denominated debt. Foreign currency payments are received periodically from its
foreign subsidiaries to permit repayment of non-U.S. dollar denominated debt
owed by the parent company. Upon receipt, forward contracts are purchased as a
hedge against exchange rate fluctuations that may occur between the receipt date
and the interest payment due date.
<PAGE>
The Company mitigates its foreign currency exchange rate risk principally
by establishing local production facilities in the markets it serves and by
invoicing customers in the same currency as the source of the products. The
Company also monitors its foreign currency exposure in each country and
implements strategies to respond to changing economic and political
environments. The Company's exposure to foreign currency exchange rate risk
relates primarily to U.S. dollar-denominated inter-company loans. The Company's
exposure related to such transactions is not material to cash flows. However,
exposure related to such transactions to the Company's financial position and
results of operations is anticipated to be adversely impacted by approximately
$40,000, net of tax, for every 10% devaluation of the Brazilian Real per U.S.
dollar. Currently there is effectively no exposure due to depreciation of the
Euro and its fixed legacy currencies arising from multiple intercompany loans
among the Company and its European subsidiaries. These amounts are estimates
only and are difficult to accurately project due to factors such as the inherent
fluctuation of intercompany account balances and the existing economic
uncertainty and unpredictable future economic conditions in the international
marketplace.
PART II. OTHER INFORMATION
Item 1. Legal Proceedings
See Note 7 to the financial statements
Item 4. Submission of Matters to a Vote of Security Holders
At the Annual Meeting of Stockholders held on May 5, 2000, the
following proposals were adopted by the margins indicated.
1. To elect a Board of Directors for a term of one (1) year.
<TABLE>
<CAPTION>
Number of Shares
-----------------------------------------
For Percent (of votes cast)
---------- -----------------------
<S> <C> <C>
Gerard van Rooijen 10,361,722 99.727
Caryl M. Chocola 10,365,514 99.763
J. Christopher Chocola 10,362,969 99.739
Michael G. Fisch 10,365,441 99.762
Larry D. Greene 10,364,141 99.750
Frank S. Hermance 10,365,441 99.762
David L. Horing 10,365,441 99.762
Charles D. Klein 10,365,241 99.760
Victor A. Mancinelli 10,351,387 99.627
</TABLE>
2. To ratify the selection by the Board of Directors of Deloitte
& Touche LLP as independent auditors for the Company for the
year ending December 31, 2000.
For 10,269,060
Against 54,328
Abstain 66,741
Item 6. Exhibits and Reports on Form 8-K
a) Exhibits
3.1 Form of Restated Certificate of Incorporation of the Company
filed as Exhibit 3.1 to the Company's Registration Statement
on Form S-1 (Registration No. 333-29873) (the "Company's
Registration Statement") and incorporated herein by
reference.
3.2 Form of By-laws of the Company filed as Exhibit 3.2 to the
Company Registration Statement and incorporated herein by
reference.
4.1 Specimen Certificate of Common Stock of the Company filed as
Exhibit 4.1 to the Company Registration Statement and
incorporated herein by reference.
10.1 Commitment Letter, dated as of March 21, 1997, by and among
CTB, Inc. and KeyBank National association filed as Exhibit
10.1 to the Company Registration Statement and incorporated
herein by reference.
10.2 Asset Purchase Agreement, dated as of March 31, 1997, by and
among Butler Manufacturing Company and CTB, Inc., filed as
Exhibit 10.2 to the Company Registration Statement and
incorporated herein by reference.
10.3 Share Purchase Agreement, dated as of May 1, 1997, by and
among Chore-Time Brock Holding B.V. and Halder Investments
III B.V., Halder Investment III C.V., Stichting Fondshebeer
Fincon, Beldor B.V., V. Berger, A. Faber, J. Paquet, J.H.M.
Cremers and H.W. Gootzen and Fancom Holding B.V. filed as
Exhibit 10.3 to the Company Registration Statement and
incorporated herein by reference.
10.4 Asset Purchase Agreement, dated as of May 29, 1997, between
CTB, Inc., and Royal Crown Limited filed as Exhibit 10.4 to
the Company Registration Statement and incorporated herein
by reference.
10.5 Stock Purchase Agreement, dated as of November 29, 1995, by
and among the Company, CTB Ventures, Inc., CTB, Inc. and the
selling shareholders party thereto filed as Exhibit 10.5 to
the Company Registration Statement and incorporated herein
by reference.
10.6 Shareholders Agreement, dated as of January 4, 1996, by and
among the Company and the Individual Shareholders party
thereto filed as Exhibit 10.6 to the Company Registration
Statement and incorporated herein by reference.
10.7 Board Representation Agreement, dated as of January 4, 1996,
by and among American Securities Capital Partners, L.P., J.
Christopher Chocola, Caryl Chocola and the Company filed as
Exhibit 10.7 to the Company Registration Statement and
incorporated herein by reference.
10.8 Form of Non-Qualified Stock Option Agreement filed as
Exhibit 10.8 to the Company Registration Statement and
incorporated herein by reference.
10.9 Profit Sharing Plan filed as Exhibit 10.9 to the Company
Registration Statement and incorporated herein by reference.
10.10 Management Incentive Compensation Plan filed as Exhibit
10.10 to the Company Registration Statement and incorporated
herein by reference.
10.11 Escrow Agreement, dated as of November 29, 1995, by and
among CTB Ventures, Inc., the shareholders party thereto and
NBD Bank, N.A., filed as Exhibit 10.11 to the Company
Registration Statement and incorporated herein by reference.
10.12 Management Consulting Agreement, dated as of January 4,
1996, by and among CTB, Inc. and American Securities Capital
Partners, L.P., filed as Exhibit 10.12 to the Company
Registration Statement and incorporated herein by reference.
10.13 Agreement for Partial Release of Escrowed Funds, dated as of
March 1, 1997, by and among CTB, Inc. and each of the
shareholders party thereto filed as Exhibit 10.13 to the
Company Registration Statement and incorporated herein by
reference.
10.14 Transaction Consulting Agreement, dated as of April 30,
1997, by and among the Company and American Securities
Capital Partners, L.P., filed as Exhibit 10.14 to the
Company Registration Statement and incorporated herein by
reference.
10.15 Transaction Consulting Agreement, dated as of April 30,
1997, by and among CTB, Inc., and American Securities
Capital Partners, L.P., filed as Exhibit 10.15 to the
Company Registration Statement and incorporated herein by
reference.
10.16 Acquisition Agreement of all shares of Roxell N.V., dated
November 30, 1998, filed as Exhibit 99.2 to the Company's
February 10, 1999 Form 8-K filing.
10.17 Representations and Warranties of Sellers, filed as Exhibit
99.3 to the Company's February 10, 1999 Form 8-K filing.
<PAGE>
10.18 Amendment No. 3 dated as of November 19, 1998 to Credit
Agreement dated as of August 15, 1997.
10.19 1999 CTB International Corp. Stock Incentive Plan.
11. Computation of Earnings Per Share.
27. Financial Data Schedule.
b) Reports on Form 8-K.
No reports on Form 8-K were filed by the Company during the quarter
ended March 31, 2000.
SIGNATURE
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.
CTB International Corp.
Dated: May 15, 2000 By /s/ Don J. Steinhilber
------------------------------
Don J. Steinhilber
Vice President and Chief Financial Officer
1999 CTB INTERNATIONAL CORP.
STOCK INCENTIVE PLAN
1. Purpose of the Plan
The purpose of the Plan is to aid the Company and its Affiliates in recruiting
and retaining key employees, directors or consultants of outstanding ability and
to motivate such employees, directors or consultants to exert their best efforts
on behalf of the Company and its Affiliates by providing incentives through the
granting of Awards. The Company expects that it will benefit from the added
interest which such key employees, directors or consultants will have in the
welfare of the Company as a result of their proprietary interest in the
Company's success.
2. Definitions
The following capitalized terms used in the Plan have the respective
meanings set forth in this Section:
(a) Act: The Securities Exchange Act of 1934, as amended, or any
successor thereto.
(b) Affiliate: With respect to the Company, any entity directly
or indirectly controlling, controlled by, or under common
control with, the Company or any other entity designated
by the Board in which the Company or an Affiliate has an
interest.
(c) Award: An Option or Other Stock-Based Award granted pursuant
to the Plan.
(d) Beneficial Owner: A "beneficial owner", as such term is
defined in Rule 13d-3 under the Act (or any successor rule
thereto).
(e) Board: The Board of Directors of the Company.
(f) Change in Control: The occurrence of any of the following
events:
(i) any Person (other than a Person holding securities
representing 10% or more of the combined voting power
of the Company's outstanding securities as of the
Effective Date, the Company, any trustee or other
fiduciary holding securities under an employee
benefit plan of the Company, or any company owned,
directly or indirectly, by the shareholders of the
Company in substantially the same proportions as
their ownership of stock of the Company), becomes the
Beneficial Owner, directly or indirectly, of
securities of the Company, representing 30% or more
of the combined voting power of the Company's
then-outstanding securities;
(ii) during any period of twenty-four consecutive months
(not including any period prior to the Effective
Date), individuals who at the beginning of such
period constitute the Board, and any new director
(other than (A) a director nominated by a Person who
has entered into an agreement with the Company to
effect a transaction described in Sections 2(e)(i),
(iii) or (iv) of the Plan or (B) a director
nominated by any Person (including the Company) who
publicly announces an intention to take or to
consider taking actions (including, but not limited
to, an actual or threatened proxy contest) which
if consummated would constitute a Change in Control)
whose election by the Board or nomination for
election by the Company's shareholders was approved
in advance by a vote of at least two-thirds (2/3) of
the directors then still in office who either were
directors at the beginning of the period or whose
election or nomination for election was previously
so approved, cease for any reason to constitute at
least a majority thereof;
(iii) the consummation of any transaction or series of
transactions under which the Company is merged or
consolidated with any other company, other than a
merger or consolidation which would result in the
shareholders of the Company immediately prior thereto
continuing to own (either by remaining outstanding or
by being converted into voting securities of the
surviving entity) more than 60% of the combined
voting power of the voting securities of the Company
or such surviving entity outstanding immediately
after such merger or consolidation; or
(iv) the Company undergoes or completes a complete
liquidation of the Company or an agreement for the
sale or disposition by the Company of all or
substantially all of the Company's assets, other than
a liquidation of the Company into a wholly-owned
subsidiary.
(g) Code: The Internal Revenue Code of 1986, as amended, or any
successor thereto.
(h) Committee: The Compensation Committee of the Board.
(i) Company: CTB International Corp., a Delaware corporation.
(j) Effective Date: The date the Board approves the Plan, March
26, 1999.
(k) Fair Market Value: On a given date, the arithmetic mean of
the high and low prices of the Shares as reported on such
date on the Composite Tape of the principal national
securities exchange on which such Shares are listed or
admitted to trading, or, if no Composite Tape exists for
such national securities exchange on such date, then on the
principal national securities exchange on which such Shares
are listed or admitted to trading, or, if the Shares are not
listed or admitted on a national securities exchange, the
arithmetic mean of the per Share closing bid price and per
Share closing asked price on such date as quoted on the
National Association of Securities Dealers Automated
Quotation System (or such market in which such prices are
regularly quoted), or, if there is no market on which the
Shares are regularly quoted, the Fair Market Value shall be
the value established by the Committee in good faith. If no
sale of Shares shall have been reported on such Composite Tape
or such national securities exchange on such date or quoted
on the National Association of Securities Dealer Automated
Quotation System on such date, then the immediately preceding
date on which sales of the Shares have been so reported or
quoted shall be used.
(l) ISO: An Option that is also an incentive stock option granted
pursuant to Section 6(d) of the Plan.
(m) Other Stock-Based Awards: Awards granted pursuant to Section 7
of the Plan.
(n) Option: A stock option granted pursuant to Section 6 of the
Plan.
(o) Option Price: The purchase price per Share of an Option, as
determined pursuant to Section 6(a) of the Plan.
(p) Participant: An employee, director or consultant who is
selected by the Committee to participate in the Plan.
(q) Performance-Based Awards: Certain Other Stock-Based Awards
granted pursuant to Section 7(b) of the Plan.
(r) Person: A "person", as such term is used for purposes of
Section 13(d) or 14(d) of the Act (or any successor section
thereto).
(s) Plan: The 1999 CTB International Corp. Stock Incentive Plan.
(t) Shares: Shares of common stock of the Company.
(u) Subsidiary: A subsidiary corporation, as defined in Section
424(f) of the Code (or any successor section thereto).
3. Shares Subject to the Plan
The total number of Shares which may be issued under the Plan is 500,000. The
maximum number of Shares for which Options may be granted during a calendar year
to any Participant shall be 300,000. The Shares may consist, in whole or in
part, of unissued Shares or treasury Shares. The issuance of Shares or the
payment of cash upon the exercise of an Award shall reduce the total number of
Shares available under the Plan, as applicable. Shares which are subject to
Awards which terminate or lapse may be granted again under the Plan.
4. Administration
The Plan shall be administered by the Committee, which may delegate its duties
and powers in whole or in part to any subcommittee thereof consisting solely of
at least two individuals who are each "non-employee directors" within the
meaning of Rule 16b-3 under the Act (or any successor rule thereto) and "outside
directors" within the meaning of Section 162(m) of the Code (or any successor
section thereto). The Committee is authorized to interpret the Plan, to
establish, amend and rescind any rules and regulations relating to the Plan, and
to make any other determinations that it deems necessary or desirable for the
administration of the Plan. The Committee may correct any defect or supply any
omission or reconcile any inconsistency in the Plan in the manner and to the
extent the Committee deems necessary or desirable. Any decision of the Committee
in the interpretation and administration of the Plan, as described herein, shall
lie within its sole and absolute discretion and shall be final, conclusive and
binding on all parties concerned (including, but not limited to, Participants
and their beneficiaries or successors). The Committee shall require payment of
any amount it may determine to be necessary to withhold for federal, state,
local or other taxes as a result of the exercise of an Award. It shall be a
condition to the obligation of the Company to deliver Shares upon the exercise
of a Stock Option or upon exercise, settlement or payment of any Other
Stock-Based Grant that the Participant pay to the Company such amount as may be
requested by the Company for the purpose of satisfying any liability for such
withholding taxes unless the Committee specifies otherwise. The Participant may
elect to pay a portion or all of such withholding taxes by (a) delivery in
Shares or (b) having Shares withheld by the Company from any Shares that would
have otherwise been received by the Participant.
5. Limitations
No Award may be granted under the Plan after the tenth anniversary of the
Effective Date, but Awards theretofore granted may extend beyond that date.
6. Terms and Conditions of Options
Options granted under the Plan shall be, as determined by the Committee,
non-qualified or incentive stock options for federal income tax purposes, as
evidenced by the related Award agreements, and shall be subject to the foregoing
and the following terms and conditions and to such other terms and conditions,
not inconsistent therewith, as the Committee shall determine:
(a) Option Price. The Option Price per Share shall be determined
by the Committee, but shall not be less than 100% of the
Fair Market Value of the Shares on the date an Option is
granted.
(b) Exercisability. Options granted under the Plan shall be
exercisable at such time and upon such terms and conditions as
may be determined by the Committee, but in no event shall an
Option be exercisable more than ten years after the date it is
granted.
(c) Exercise of Options. Except as otherwise provided in the Plan
or in an Award agreement, an Option may be exercised for all,
or from time to time any part, of the Shares for which it is
then exercisable. For purposes of Section 6 of the Plan, the
exercise date of an Option shall be the later of the date a
notice of exercise is received by the Company and, if
applicable, the date payment is received by the Company
pursuant to clauses (i), (ii) or (iii) in the following
sentence. The purchase price for the Shares as to which an
Option is exercised shall be paid to the Company in full at
the time of exercise at the election of the Participant (i)
in cash or its equivalent (e.g., by check), (ii) in Shares
having a Fair Market Value equal to the aggregate Option Price
for the Shares being purchased and satisfying such other
requirements as may be imposed by the Committee; provided,
that such Shares have been held by the Participant for no less
than six months (or such other period as established from
time to time by the Committee or generally accepted rules of
accounting), (iii) partly in cash and partly in such Shares or
(iv) through the delivery of irrevocable instruments to a
broker to deliver promptly to the Company an amount equal to
the aggregate option price for the shares being purchased.
No Participant shall have any rights to dividends or other
rights of a stockholder with respect to Shares subject to an
Option until the Participant has given written notice of
exercise of the Option, paid in full for such Shares and, if
applicable, has satisfied any other conditions imposed by
the Committee pursuant to the Plan.
(d) ISOs. The Committee may grant Options under the Plan that are
intended to be ISOs. Such ISOs shall comply with the
requirements of Section 422 of the Code (or any successor
section thereto). No ISO may be granted to any Participant
who at the time of such grant, owns more than ten percent of
the total combined voting power of all classes of stock of
the Company or of any Subsidiary, unless (i) the Option Price
for such ISO is at least 110% of the Fair Market Value of a
Share on the date the ISO is granted and (ii) the date on
which such ISO terminates is a date not later than the day
preceding the fifth anniversary of the date on which the
ISO is granted. Any Participant who disposes of Shares
acquired upon the exercise of an ISO either (i) within two
years after the date of grant of such ISO or (ii) within one
year after the transfer of such Shares to the Participant,
shall notify the Company of such disposition and of the amount
realized upon such disposition.
7. Other Stock-Based Awards
(a) Generally. The Committee, in its sole discretion, may grant
Awards of Shares, Awards of restricted Shares and Awards that
are valued in whole or in part by reference to, or are
otherwise based on the Fair Market Value of, Shares ("Other
Stock-Based Awards"). Such Other Stock-Based Awards shall be
in such form, and dependent on such conditions, as the
Committee shall determine, including, without limitation, the
right to receive one or more Shares (or the equivalent cash
value of such Shares) upon the completion of a specified
period of service, the occurrence of an event and/or the
attainment of performance objectives. Other Stock-Based Awards
may be granted alone or in addition to any other Awards
granted under the Plan. Subject to the provisions of the
Plan, the Committee shall determine to whom and when Other
Stock-Based Awards will be made, the number of Shares to be
awarded under (or otherwise related to) such Other Stock-Based
Awards; whether such Other Stock-Based Awards shall be
settled in cash, Shares or a combination of cash and Shares;
and all other terms and conditions of such Awards (including,
without limitation, the vesting provisions thereof and
provisions ensuring that all Shares so awarded and issued
shall be fully paid and non-assessable).
(b) Performance-Based Awards. Notwithstanding anything to the
contrary herein, certain Other Stock-Based Awards granted
under this Section 7 may be granted in a manner which is
deductible by the Company under Section 162(m) of the Code
(or any successor section thereto) ("Performance-Based
Awards"). A Participant's Performance-Based Award shall be
determined based on the attainment of written performance
goals approved by the Committee for a performance period
established by the Committee (i) while the outcome for that
performance period is substantially uncertain and (ii) no
more than 90 days after the commencement of the performance
period to which the performance goal relates or, if less, the
number of days which is equal to 25 percent of the relevant
performance period. The performance goals, which must be
objective, shall be based upon one or more of the following
criteria: (i) consolidated earnings before or after taxes
(including earnings before interest, taxes, depreciation and
amortization); (ii) net income; (iii) operating income; (iv)
earnings per Share; (v) book value per Share; (vi) return on
shareholders' equity; (vii) expense management; (viii) return
on investment; (ix) improvements in capital structure; (x)
profitability of an identifiable business unit or product;
(xi) maintenance or improvement of profit margins; (xii) stock
price; (xiii) market share; (xiv) revenues or sales; (xv)
costs; (xvi) cash flow; (xvii) working capital and (xviii)
return on assets. The foregoing criteria may relate to the
Company, one or more of its Subsidiaries or one or more of
its divisions or units, or any combination of the foregoing,
and may be applied on an absolute basis and/or be relative to
one or more peer group companies or indices, or any
combination thereof, all as the Committee shall determine.
In addition, to the degree consistent with Section 162(m)
of the Code (or any successor section thereto), the
performance goals may be calculated without regard to
extraordinary items. The maximum amount of a
Performance-Based Award during a calendar year to any
Participant shall be: (x) with respect to Performance-Based
Awards that are Options, 300,000 Shares and (y) with respect
to Performance-Based Awards that are not Options, $200,000.
The Committee shall determine whether, with respect to a
performance period, the applicable performance goals have been
met with respect to a given Participant and, if they have, to
so certify and ascertain the amount of the applicable
Performance-Based Award. No Performance-Based Awards will be
paid for such performance period until such certification is
made by the Committee. The amount of the Performance-Based
Award actually paid to a given Participant may be less than
the amount determined by the applicable performance goal
formula, at the discretion of the Committee. The amount of
the Performance-Based Award determined by the Committee for a
performance period shall be paid to the Participant at such
time as determined by the Committee in its sole discretion
after the end of such performance period; provided, however,
that a Participant may, if and to the extent permitted by the
Committee and consistent with the provisions of Section 162(m)
of the Code, elect to defer payment of a Performance-Based
Award.
8. Adjustments Upon Certain Events
Notwithstanding any other provisions in the Plan to the contrary, the
following provisions shall apply to all Awards granted under the Plan:
(a) Generally. In the event of any change in the outstanding
Shares after the Effective Date by reason of any Share
dividend or split, reorganization, recapitalization, merger,
consolidation, spin-off, combination or exchange of Shares or
any other corporate exchange, combination or transaction, or
any distribution to shareholders of Shares other than regular
cash dividends, the Committee in its sole discretion may make
such substitution or adjustment, if any, as it deems to be
equitable, as to (i) the number or kind of Shares or other
securities issued or reserved for issuance pursuant to the
Plan or pursuant to outstanding Awards, (ii) the Option Price
and/or (iii) any other affected terms of such Awards.
(b) Change in Control. Except as otherwise provided in an Award
agreement, in the event of a Change in Control, the Committee
in its sole discretion and without liability to any person
may take such actions, if any, as it deems necessary or
desirable with respect to any Award (including, without
limitation, (i) the acceleration of an Award, (ii) the payment
of an amount, made in cash or stock, in exchange for the
cancellation of an Award, (iii) the termination of an Award
after a Participant has been afforded a certain period of
time to exercise such Award following the Change in Control,
and/or (iv) the requiring of the issuance of substitute
Awards that will substantially preserve the value, rights and
benefits of any affected Awards previously granted hereunder)
as of the date of the consummation of the Change in Control.
9. No Right to Employment
The granting of an Award under the Plan shall impose no obligation
on the Company or any Subsidiary to continue the employment of a Participant
and shall not lessen or affect the Company's or Subsidiary's right to terminate
the employment of such Participant.
10. Successors and Assigns
The Plan shall be binding on all successors and assigns of the Company
and a Participant, including without limitation, the estate of such Participant
and the executor, administrator or trustee of such estate, or any receiver or
trustee in bankruptcy or representative of the Participant's creditors.
11. Nontransferability of Awards
Unless otherwise determined by the Committee, an Award shall not be
transferable or assignable by the Participant otherwise than by will or by the
laws of descent and distribution. An Award exercisable after the death of a
Participant may be exercised by the legatees, personal representatives or
distributees of the Participant.
12. Amendments or Termination
The Board may amend, alter or discontinue the Plan, but no amendment,
alteration or discontinuation shall be made which, (a) without the approval of
the shareholders of the Company, would (except as is provided in Section 8 of
the Plan), increase the total number of Shares reserved for the purposes of the
Plan or change the maximum number of Shares for which Awards may be granted to
any Participant or (b) without the consent of a Participant, would impair any
of th rights or obligations under any Award theretofore granted to such
Participant under the Plan; provided, however, that the Committee may amend
the Plan in such manner as it deems necessary to permit the granting of Awards
meeting the requirements of the Code or other applicable laws. Notwithstanding
anything to the contrary herein, the Board may not amend, alter or discontinue
the provisions relating to Section 8(b) of the Plan after the occurrence of a
Change in Control.
13. International Participants
With respect to Participants who reside or work outside the United
States of America and who are not (and who are not expected to be) "covered
employees" within the meaning of Section 162(m) of the Code, the Committee
may, in its sole discretion, amend the terms of the Plan or Awards with respect
to such Participants in order to conform such terms with the requirements of
local law.
14. Choice of Law
The Plan shall be governed by and construed in accordance with the
laws of the State of Indiana, without regard to conflicts of laws.
15. Effectiveness of the Plan
The Plan shall be effective as of the Effective Date, subject to the
approval of the shareholders of the Company. No payment of any Awards granted
hereunder shall be made without such shareholders' approval.
CTB International Corp. and Subsidiaries
Diluted Net Income Per Common and Common Equivalent Share
Three Months Ended March 31, 2000 and 1999
(In thousands, except per share amounts)
(Unaudited)
Exhibit 11
Three Months Ended
March 31,
-------------------------
2000 1999
---- ----
ACTUAL
Net Income $ 2,248 $ 329
Average number of common
shares outstanding 11,263 12,106
Common equivalent shares
stock Options 216 224
Total average common and common
equivalent shares outstanding 11,479 12,330
Net income per common and common
equivalent share $ 0.20 $ 0.03
WARNING: THE EDGAR SYSTEM ENCOUNTERED ERROR(S) WHILE PROCESSING THIS SCHEDULE.
<TABLE> <S> <C>
CTB INTERNATIONAL CORP. Exhibit 27
FINANCIAL DATA SCHEDULE
Item Description
<ARTICLE> 5
<MULTIPLIER> 1,000
<S> <C>
<PERIOD-TYPE> 3-MOS
<FISCAL-YEAR-END> Dec-31-2000
<PERIOD-START> Jan-01-2000
<PERIOD-END> Mar-31-2000
<CASH> 2,129
<SECURITIES> 0
<RECEIVABLES> 32,599
<ALLOWANCES> 1,339
<INVENTORY> 31,152
<CURRENT-ASSETS> 69,616
<PP&E> 76,544
<DEPRECIATION> 22,642
<TOTAL-ASSETS> 207,512
<CURRENT-LIABILITIES> 33,568
<BONDS> 0
0
0
<COMMON> 129
<OTHER-SE> 77,622
<TOTAL-LIABILITY-AND-EQUITY> 207,512
<SALES> 57,752
<TOTAL-REVENUES> 57,752
<CGS> 41,620
<TOTAL-COSTS> 41,620
<OTHER-EXPENSES> (152)
<LOSS-PROVISION> 485
<INTEREST-EXPENSE> 1,241
<INCOME-PRETAX> 3,746
<INCOME-TAX> 1,498
<INCOME-CONTINUING> 2,248
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 2,248
<EPS-BASIC> 0.20
<EPS-DILUTED> 0.20
</TABLE>
