<PAGE>
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 June 30, 1998
OR
[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934
Commission file number 001-13279
UNOVA, INC.
(Exact name of registrant as specified in its charter)
DELAWARE 95-4647021
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
360 NORTH CRESCENT DRIVE
BEVERLY HILLS, CALIFORNIA 90210-4867
(Address of principal executive offices) (Zip Code)
REGISTRANT'S TELEPHONE NUMBER, INCLUDING AREA CODE: (310) 888-2500
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 [ ]
On July 31, 1998 there were 54,726,511 shares of Common Stock outstanding.
Page 1 of 17
<PAGE>
UNOVA, INC.
INDEX
REPORT ON FORM 10-Q
FOR THE QUARTER ENDED JUNE 30, 1998
PAGE
NUMBER
------
PART I. FINANCIAL INFORMATION
ITEM 1. Financial Statements
Consolidated and Combined Statements of Operations
Six months ended June 30, 1998 (unaudited)
and June 30, 1997 (unaudited) 3
Consolidated and Combined Statements of Operations
Three months ended June 30, 1998 (unaudited)
and June 30, 1997 (unaudited) 4
Consolidated Balance Sheets
June 30, 1998 (unaudited) and December 31, 1997 5
Consolidated and Combined Statements of Cash Flows
Six months ended June 30, 1998 (unaudited)
and June 30, 1997 (unaudited) 6
Notes to Consolidated and Combined Financial Statements
(unaudited) 7
ITEM 2. Management's Discussion and Analysis of
Financial Condition and Results of Operations 10
PART II. OTHER INFORMATION
ITEM 6. Exhibits and Reports on Form 8-K 13
Signatures 14
2
<PAGE>
PART I. FINANCIAL INFORMATION
ITEM 1. FINANCIAL STATEMENTS
UNOVA INC.
CONSOLIDATED AND COMBINED STATEMENTS OF OPERATIONS
(THOUSANDS OF DOLLARS, EXCEPT PER SHARE AMOUNTS)
(UNAUDITED)
<TABLE>
<CAPTION>
SIX MONTHS ENDED
JUNE 30,
1998 1997
---------- ----------
<S> <C> <C>
Sales and Service Revenues $678,627 $ 732,343
---------- ----------
Costs and Expenses
Cost of sales 440,079 512,516
Selling, general and administrative 175,098 152,671
Depreciation and amortization 24,569 17,035
Acquired in-process research and development charge 203,300
Interest, net 9,774 7,099
---------- ----------
Total Costs and Expenses 649,520 892,621
---------- ----------
Earnings (Loss) before Taxes on Income 29,107 (160,278)
Taxes on Income (12,109) (17,208)
---------- ----------
Net Earnings (Loss) $ 16,998 $(177,486)
---------- ----------
---------- ----------
Basic and Diluted Earnings (Loss) per Share $ 0.31 $ (3.29)
---------- ----------
---------- ----------
Shares Used in Computing Basic
Earnings (Loss) per Share 54,511,388 53,891,534
Shares Used in Computing Diluted
Earnings (Loss) per Share 54,672,525 53,891,534
</TABLE>
See accompanying notes to consolidated and combined financial statements.
3
<PAGE>
UNOVA INC.
CONSOLIDATED AND COMBINED STATEMENTS OF OPERATIONS
(THOUSANDS OF DOLLARS, EXCEPT PER SHARE AMOUNTS)
(UNAUDITED)
<TABLE>
<CAPTION>
THREE MONTHS ENDED
JUNE 30, 1998
1998 1997
---------- ----------
<S> <C> <C>
Sales and Service Revenues $345,222 $ 409,277
---------- ----------
Costs and Expenses
Cost of sales 221,780 281,507
Selling, general and administrative 89,352 89,052
Depreciation and amortization 12,929 9,811
Acquired in-process research and development charge 203,300
Interest, net 5,337 5,181
---------- ----------
Total Costs and Expenses 329,398 588,851
---------- ----------
Earnings (Loss) before Taxes on Income 15,824 (179,574)
Taxes on Income (6,583) (9,490)
---------- ----------
Net Earnings (Loss) $ 9,241 $(189,064)
---------- ----------
---------- ----------
Basic and Diluted Earnings (Loss) per Share $ 0.17 $ (3.51)
---------- ----------
---------- ----------
Shares Used in Computing Basic
Earnings (Loss) per Share 54,512,570 53,891,534
Shares Used in Computing Diluted
Earnings (Loss) per Share 54,832,912 53,891,534
</TABLE>
See accompanying notes to consolidated and combined financial statements.
4
<PAGE>
UNOVA, INC.
CONSOLIDATED BALANCE SHEETS
(THOUSANDS OF DOLLARS)
<TABLE>
<CAPTION>
JUNE 30, DECEMBER 31,
1998 1997
---------- ------------
(UNAUDITED)
<S> <C> <C>
ASSETS
Current Assets
Cash and cash equivalents $ 21,351 $ 13,685
Accounts receivable, net 478,704 448,079
Inventories, net of progress billings 182,474 150,537
Deferred tax assets 99,976 106,694
Other current assets 21,012 30,072
---------- ----------
Total Current Assets 803,517 749,067
Property, Plant and Equipment, at cost 348,884 339,462
Less Accumulated Depreciation (183,184) (181,782)
---------- ----------
Property, Plant and Equipment, Net 165,700 157,680
Goodwill and Other Intangibles, Net 356,179 366,098
Other Assets 119,806 83,513
---------- ----------
Total Assets $1,445,202 $1,356,358
---------- ----------
---------- ----------
LIABILITIES AND SHAREHOLDERS' INVESTMENT
Current Liabilities
Accounts payable $ 305,488 $ 311,759
Payrolls and related expenses 74,316 72,909
Notes payable and current portion of long-term obligations 154,486 86,645
---------- ----------
Total Current Liabilities 534,290 471,313
---------- ----------
Long-term Obligations 215,951 216,938
---------- ----------
Deferred Tax Liabilities 24,916 22,918
---------- ----------
Other Long-term Liabilities 53,587 55,700
---------- ----------
Commitments and Contingencies
Shareholders' Investment
Common stock 547 545
Additional paid-in capital 611,320 603,743
Retained earnings (deficit) 8,957 (8,041)
Accumulated other comprehensive income -
cumulative currency translation adjustment (4,366) (6,758)
---------- ----------
Total Shareholders' Investment 616,458 589,489
---------- ----------
Total Liabilities and Shareholders' Investment $1,445,202 $1,356,358
---------- ----------
---------- ----------
</TABLE>
See accompanying notes to consolidated and combined financial statements.
5
<PAGE>
UNOVA, INC.
CONSOLIDATED AND COMBINED STATEMENTS OF CASH FLOWS
(THOUSANDS OF DOLLARS)
(UNAUDITED)
<TABLE>
<CAPTION>
SIX MONTHS ENDED
JUNE 30,
1998 1997
--------- ---------
<S> <C> <C>
Cash and Cash Equivalents at Beginning of Period $ 13,685 $ 149,467
--------- ---------
Cash Flows from Operating Activities:
Net earnings (loss) 16,998 (177,486)
Adjustments to reconcile net earnings (loss) to
net cash used in operating activities:
Acquired in-process research and development charge 203,300
Depreciation and amortization 24,569 17,035
Deferred taxes 8,716 536
Change in accounts receivable (30,625) (15,297)
Change in inventories (31,937) (4,224)
Change in other current assets 7,560 4,767
Change in accounts payable (1,947) (28,958)
Change in pensions (7,369) (5,608)
Other operating activities 1,543 (5,022)
--------- ---------
Net Cash Used in Operating Activities (12,492) (10,957)
--------- ---------
Cash Flows from Investing Activities:
Capital expenditures (30,777) (11,011)
Sale of property, plant and equipment 5,180 794
Acquisition of businesses, net of cash acquired (20,100) (377,546)
Other investing activities (3,296) 4,267
--------- ---------
Net Cash Used in Investing Activities (48,993) (383,496)
--------- ---------
Cash Flows from Financing Activities
Proceeds from borrowings 289,507 24,709
Repayment of borrowings (223,611) (72,120)
Net transactions with Western Atlas Inc. 195,566
Increase in due to Western Atlas Inc. 118,670
Other financing activities 3,255
--------- ---------
Net Cash Provided by Financing Activities 69,151 266,825
--------- ---------
Resulting in Increase (Decrease) in Cash and Cash Equivalents 7,666 (127,628)
--------- ---------
Cash and Cash Equivalents at End of Period $ 21,351 $ 21,839
--------- ---------
--------- ---------
Supplemental disclosure of cash flow information:
Interest paid $ 6,900 $ 3,261
Income taxes paid (refunded) $ (6,863) $ 19,891
</TABLE>
See accompanying notes to consolidated and combined financial statements.
6
<PAGE>
UNOVA, INC.
NOTES TO CONSOLIDATED AND COMBINED FINANCIAL STATEMENTS
SIX MONTHS ENDED JUNE 30, 1998
(UNAUDITED)
1. UNOVA, Inc. ("UNOVA" or the "Company") became an independent public company
on October 31, 1997 (the "Distribution Date"), when all of the UNOVA common
stock was distributed to holders of common stock of Western Atlas Inc.
("WAI") in the form of a dividend. Every WAI shareholder of record on
October 24, 1997 was entitled to receive one share of UNOVA common stock
for each WAI share of common stock held of record.
The statement of operations and statement of cash flows for the six and
three months ended June 30, 1997 contain the historical accounts and
operations of the former WAI businesses that now comprise the Company. The
amounts included in this report are unaudited; however in the opinion of
management, all adjustments necessary for a fair presentation of results of
operations, financial position and cash flows for the stated periods have
been included. These adjustments are of a normal recurring nature. It is
suggested that these consolidated and combined financial statements be read
in conjunction with the audited financial statements and notes thereto
included in the Company's Annual Report on Form 10-K for the year ended
December 31, 1997. The results of operations for the interim periods
presented are not necessarily indicative of operating results for the
entire year.
2. General and administrative costs include allocated charges from WAI of $9.1
million and $4.0 million for the six and three months ended June 30, 1997,
respectively.
3. Inventories consist of the following:
<TABLE>
<CAPTION>
JUNE 30, DECEMBER 31,
1998 1997
-------- ------------
(THOUSANDS OF DOLLARS)
<S> <C> <C>
Raw materials and work in process $145,188 $124,501
Finished goods 46,428 38,074
Less progress billings (9,142) (12,038)
-------- --------
Net inventories $182,474 $150,537
-------- --------
-------- --------
</TABLE>
4. Net interest expense is composed of the following:
<TABLE>
<CAPTION>
SIX MONTHS ENDED THREE MONTHS ENDED
JUNE 30, JUNE 30,
1998 1997 1998 1997
---------------------- ----------------------
(THOUSANDS OF DOLLARS) (THOUSANDS OF DOLLARS)
<S> <C> <C> <C> <C>
Interest expense $11,022 $ 9,264 $5,905 $5,698
Interest income (1,248) (2,165) (568) (517)
------- ------- ------ ------
Net interest expense $ 9,774 $ 7,099 $5,337 $5,181
------- ------- ------ ------
------- ------- ------ ------
</TABLE>
Interest expense includes allocated charges from WAI of $6.3 million
and $3.9 million for the six and three months ended June 30, 1997,
respectively.
7
<PAGE>
NOTES TO CONSOLIDATED AND COMBINED FINANCIAL STATEMENTS (CONTINUED)
5. For the six and three months ended June 30, 1998, basic earnings per share
is calculated using the weighted average number of common shares
outstanding for the period while diluted earnings per share is computed on
the basis of the weighted average number of common shares outstanding plus
the effect of outstanding stock options using the "treasury stock" method.
Shares used for basic and diluted earnings per share were computed as
follows:
<TABLE>
<CAPTION>
SIX MONTHS THREE MONTHS
ENDED ENDED
JUNE 30, 1998 JUNE 30, 1998
------------- -------------
<S> <C> <C>
Weighted average common shares - Basic 54,511,388 54,512,570
Dilutive effect of stock options 161,137 320,342
---------- ----------
Weighted shares - Diluted 54,672,525 54,832,912
---------- ----------
---------- ----------
</TABLE>
For the six and three months ended June 30, 1997, the Company used the
outstanding shares of WAI common stock at June 30, 1997 to calculate both
basic and diluted earnings per share. At June 30, 1998, Company employees
and directors held options to purchase 113,700 shares of Company common
stock that were antidilutive to the earnings per share computation. These
options could become dilutive in future periods if the average market price
of the Company's common stock exceeds the exercise price of the outstanding
options.
6. In January 1998, the Company adopted Statement of Financial Accounting
Standards No. 130 ("SFAS 130"), Reporting Comprehensive Income. SFAS 130
states that all items that are required to be recognized under accounting
standards as components of comprehensive income be reported in the
financial statements.
The Company's comprehensive income amounts were computed as follows:
<TABLE>
<CAPTION>
SIX MONTHS ENDED THREE MONTHS ENDED
JUNE 30, JUNE 30,
1998 1997 1998 1997
-------------------------- ------------------------
(THOUSANDS OF DOLLARS) (THOUSANDS OF DOLLARS)
<S> <C> <C> <C> <C>
Net earnings (loss) $ 16,998 $(177,486) $ 9,241 $(189,064)
Foreign currency translation
adjustments 2,392 (2,377) 643 343
Income tax benefit (expense)
related to foreign currency
translation adjustments (1,005) 951 (270) (137)
-------- --------- ------- ---------
Comprehensive income (loss) $ 18,385 $(178,912) $ 9,614 $(188,858)
-------- --------- ------- ---------
-------- --------- ------- ---------
</TABLE>
7. In March 1998, the Company sold $200.0 million principal amount of senior
unsecured debt. The sale comprised $100.0 million of 6.875% seven-year
notes, at a price of 99.867 and $100.0 million of 7.00% ten-year notes, at
a price of 99.856. Including underwriting fees, discounts and effects of
forward rate agreements entered into by the Company to hedge the interest
rates on the debt, the effective interest rates on the seven-year and
ten-year notes are 6.982% and 7.217%, respectively. The net proceeds of
approximately $198.0 million were used by the Company to repay outstanding
debt.
8
<PAGE>
NOTES TO CONSOLIDATED AND COMBINED FINANCIAL STATEMENTS (CONTINUED)
8. In June 1998, the Company acquired the radio frequency identification
("RFID") business unit of Amtech Corporation known as the Transportation
Systems Group ("TSG"). TSG is a supplier of wireless data technologies for
electronic toll collection, rail and motor fleet tracking, and access
control to parking and other structures. The Company had previously
purchased $10.0 million of Amtech common stock which was applied towards
the purchase price of TSG.
Subsequent to the close of the second quarter, UNOVA acquired R&B Machine
Tool Company, a specialty machine and retooling company. This acquisition
was funded using short-term uncommitted credit lines.
9
<PAGE>
UNOVA, INC.
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
RESULTS OF OPERATIONS
Sales and service revenues and segment operating profit for the six and three
months ended June 30, 1998 and 1997 are summarized below. The $203.3 million
second quarter charge for acquired in-process research and development has been
excluded from the operating profit of the Automated Data Systems segment in the
1997 six and three month periods presented below:
<TABLE>
<CAPTION>
SIX MONTHS ENDED THREE MONTHS ENDED
JUNE 30, JUNE 30,
1998 1997 1998 1997
------------------------ ------------------------
(THOUSANDS OF DOLLARS) (THOUSANDS OF DOLLARS)
<S> <C> <C> <C> <C>
SALES AND SERVICE REVENUES
Automated Data Systems $381,983 $281,986 $195,117 $170,536
Industrial Automation Systems 296,644 450,357 150,105 238,741
-------- -------- -------- --------
Total Sales and Service Revenues $678,627 $732,343 $345,222 $409,277
-------- -------- -------- --------
-------- -------- -------- --------
SEGMENT OPERATING PROFIT
Automated Data Systems $ 25,539 $ 11,507 $ 13,892 $ 4,079
Industrial Automation Systems 26,103 49,163 14,982 29,509
-------- -------- -------- --------
Total Segment Operating Profit $ 51,642 $ 60,670 $ 28,874 $ 33,588
-------- -------- -------- --------
-------- -------- -------- --------
</TABLE>
Total sales and service revenues decreased $53.7 million or 7% for the six
months ended June 30, 1998 compared with the corresponding prior period. Total
segment operating profit decreased $9.0 million or 15% for the six months ended
June 30, 1998 compared with the corresponding prior period.
Total sales and service revenues decreased $64.1 million or 16% for the three
months ended June 30, 1998 compared with the corresponding prior period. Total
segment operating profit decreased $4.7 million or 14% for the three months
ended June 30, 1998 compared with the corresponding prior period.
Cost of sales as a percentage of sales decreased from 70% to 65% from the six
months ended June 30, 1997 to the six months ended June 30, 1998, while selling,
general and administrative expense as a percentage of sales increased from 21%
to 26% for the comparable periods. For the three months ended June 30, cost of
sales as a percentage of sales decreased from 69% to 64% from 1997 to 1998,
while selling, general and administrative expense as a percentage of sales
increased from 22% to 26% for the comparable periods. These fluctuations are
attributable to the change in the business mix of the Company that resulted from
the acquisitions in the Automated Data Systems ("ADS") segment and a general
increase in the activity of this segment due to market growth, and a decrease
of activity in the Industrial Automation Systems ("IAS") segment. ADS sales
increased as a percentage of total sales from 39% to 56% from the six months
ended June 30, 1997 to the six months ended June 30, 1998, while IAS sales
decreased from 61% to 44% for the comparable periods. For the three months ended
June 30, ADS sales increased as a percentage of total sales from 42% to 57% from
1997 to 1998, while IAS sales decreased from 58% to 43% for the comparable
periods. The ADS businesses typically carry lower cost of sales ratios and
higher selling, general and administrative expense ratios compared to the IAS
businesses.
10
<PAGE>
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
RESULTS OF OPERATIONS
Depreciation and amortization increased from $17.0 million to $24.6 million from
the six months ended June 30, 1997 to the six months ended June 30, 1998 and
from $9.8 million to $12.9 million from the three months ended June 30, 1997 to
the three months ended June 30, 1998. This increase is primarily due to a higher
amount of goodwill and other intangibles resulting from the Norand and UBI
acquisitions, as well as additional depreciation from these operations.
Net interest expense was $9.8 million and $7.1 million for the six months ended
June 30, 1998 and 1997, respectively. The increase is attributable to an
increase in outstanding debt due primarily to the 1997 acquisitions of Norand
and UBI.
AUTOMATED DATA SYSTEMS
ADS segment sales increased $100.0 million or 35% while operating profit
increased $14.0 million or 122% for the six months ended June 30, 1998
compared with the corresponding prior period. The sales and operating profit
increases are due primarily to the contribution of a full six months of
operations from the acquisitions of Norand and UBI, as well as internal
growth. For the three months ended June 30, 1998, segment sales increased
$24.6 million or 14% while operating profit increased $9.8 million or 241%
compared with the corresponding prior period. The increases in the current
three-month period are due primarily to acceleration of the internal growth
of the combined activities as the integration and restructuring of the Norand
and UBI acquisitions nears completion.
In June 1998, the Company acquired the radio frequency identification ("RFID")
business unit of Amtech Corporation known as the Transportation Systems Group
("TSG"). TSG is a supplier of wireless data technologies for electronic toll
collection, rail and motor fleet tracking, and access control to parking and
other structures. TSG revenues were approximately $52.0 million in 1997. The
Company had previously purchased $10.0 million of Amtech common stock which was
applied towards the purchase price of TSG. Amtech will be integrated into
Intermec Technologies, the Company's ADS subsidiary.
INDUSTRIAL AUTOMATION SYSTEMS
IAS segment sales decreased $153.7 million or 34% and related operating profit
decreased $23.1 million or 47% for the six months ended June 30, 1998 compared
with the corresponding prior period. For the three months ended June 30, 1998,
segment sales decreased $88.6 million or 37% while operating profit decreased
$14.5 or 49% compared with the corresponding prior period. During the first six
months of 1998, the IAS segment began several new projects that are not expected
to materially affect sales and profits until late in the year. Conversely,
during the first several months of 1997, the integrated manufacturing systems
operations experienced a higher level of sales and profits from contracts in the
final delivery and installation phase. IAS backlog increased from $332.0 million
at December 31, 1997 to $581.4 million at June 30, 1998.
Subsequent to the close of the second quarter, UNOVA acquired R&B Machine
Tool Company, a specialty machine and retooling company with annual revenues
of approximately $60.0 million. The acquisition was funded using short-term
uncommitted credit lines.
LIQUIDITY AND CAPITAL RESOURCES
Cash and marketable securities increased from $13.7 million at December 31, 1997
to $21.4 million at June 30, 1998. Total debt increased from $303.6 million at
December 31, 1997 to $370.4 million at June 30, 1998 due to the acquisition of
TSG and the normal capital expenditures and working capital needs of the
operations.
11
<PAGE>
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
RESULTS OF OPERATIONS
In March 1998, the Company sold $200.0 million principal amount of senior
unsecured debt. The sale comprised $100.0 million of 6.875% seven-year notes, at
a price of 99.867 and $100.0 million of 7.00% ten-year notes, at a price of
99.856. Including underwriting fees, discounts and effects of forward rate
agreements entered into by the Company to hedge the interest rates on the debt,
the effective interest rates on the seven-year and ten-year notes are 6.982% and
7.217%, respectively. The net proceeds of approximately $198.0 million were used
by the Company to repay outstanding debt.
At August 1, 1998, the Company had total additional borrowing capacity of
approximately $425.2 million.
The Company expects that cash flow from operations, along with available
borrowing capacity, will be adequate to meet working capital requirements. The
Company does not anticipate any material adverse decline in cash flow from
operations nor any significant changes in capital expenditures required to
support ongoing operations.
12
<PAGE>
PART II. OTHER INFORMATION
ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K
(a) Reports on Form 8-K: No reports on Form 8-K have been filed by the
Registrant during the quarter ended June 30, 1998.
(b) See Exhibit Index included herein on page 15.
13
<PAGE>
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.
UNOVA, INC.
(Registrant)
By /s/ Michael E. Keane
--------------------------------
Michael E. Keane
Senior Vice President and
Chief Financial Officer
August 10, 1998
14
<PAGE>
UNOVA, INC.
INDEX TO EXHIBITS
EXHIBIT NO. DESCRIPTION OF EXHIBIT
- ----------- ----------------------
4.1 $400,000,000 Credit Agreement dated September 24, 1997, among
UNOVA, Inc., the Banks listed therein, and Morgan Guaranty Trust
Company of New York, as Agent, filed on October 1, 1997 as
Exhibit 10M to Amendment No. 1 to the Company's Registration
Statement on Form 10 No. 001-13279 and incorporated herein by
reference.
4.2 Rights Agreement dated September 24, 1997, between UNOVA, Inc.
and The Chase Manhattan Bank, as Rights Agent, to which is
annexed the form of Right Certificate as Exhibit A, filed on
October 22, 1997 as Exhibit 3C to Amendment No. 2 to the
Company's Registration Statement on Form 10 No. 001-13279.
4.3 Amendment No. 1 to the $400,000,000 Credit Agreement, dated
January 15, 1998, filed as Exhibit 4.4 to the Company's 1997
Annual Report on Form 10-K, and incorporated herein by
reference.
4.4 Indenture dated as of March 11, 1998 between the Company and The
First National Bank of Chicago, Trustee, providing for the
issuance of securities in series, filed as Exhibit 4.5 to the
Company's 1997 Annual Report on Form 10-K, and incorporated
herein by reference.
4.5 Form of 6.875% Notes due March 15, 2005 issued by the Company
under such indenture, filed as Exhibit 4.6 to the Company's 1997
Annual Report on Form 10-K, and incorporated herein by
reference.
4.6 Form of 7.00% Notes due March 15, 2008 issued by the Company
under such indenture, filed as Exhibit 4.7 to the Company's 1997
Annual Report on Form 10-K, and incorporated herein by
reference.
4.7 Amendment No. 2 to the $400,000,000 Credit Agreement, dated May
15, 1998. *
4.8 Instruments defining the rights of holders of other long-term
debt of the Company are not filed as exhibits because the amount
of debt authorized under any such instrument does not exceed 10%
of the total assets of the Company and its consolidated
subsidiaries. The Company hereby undertakes to furnish a copy of
any such instrument to the Commission upon request.
10.1 Distribution and Indemnity Agreement dated October 31, 1997,
between Western Atlas Inc. and UNOVA, Inc, filed as Exhibit 10.1
to the Company's September 30, 1997 Quarterly Report on Form
10-Q, and incorporated herein by reference.
10.2 Tax Sharing Agreement dated October 31, 1997, between Western
Atlas Inc., and UNOVA, Inc., filed as Exhibit 10.2 to the
Company's September 30, 1997 Quarterly Report on Form 10-Q, and
incorporated herein by reference.
10.3 Employee Benefits Agreement dated October 31, 1997, between
Western Atlas Inc., and UNOVA, Inc., filed as Exhibit 10.3 to
the Company's September 30, 1997 Quarterly Report on Form 10-Q,
and incorporated herein by reference.
15
<PAGE>
INDEX TO EXHIBITS, (Continued)
10.4 Intellectual Property Agreement dated October 31, 1997, between
Western Atlas Inc., and UNOVA, Inc., filed as Exhibit 10.4 to
the Company's September 30, 1997 Quarterly Report on Form 10-Q,
and incorporated herein by reference.
10.5 Change of Control Employment Agreements with Alton J. Brann,
Michael E. Keane, Norman L. Roberts and certain other officers
of the Company, dated as of October 31, 1997, filed as Exhibit
10.5 to the Company's September 30, 1997 Quarterly Report on
Form 10-Q, and incorporated herein by reference.
10.6 Employment Agreement between Intermec Corporation and Michael
Ohanian, dated May 18, 1995, as amended, filed on August 18,
1997 as exhibit 10J to the Company's Registration Statement on
Form 10 No. 001-13279 and incorporated herein by reference.
10.7 UNOVA, Inc. Director Stock Option and Fee Plan, filed as Exhibit
10.7 to the Company's September 30, 1997 Quarterly Report on
Form 10-Q, and incorporated herein by reference.
10.8 UNOVA, Inc. Restoration Plan, filed on August 18, 1997 as
Exhibit 10I to the Company's Registration Statement on Form 10
No. 001-13279 and incorporated herein by reference.
10.9 UNOVA, Inc. Supplemental Executive Retirement Plan, filed on
October 1, 1997 as Exhibit 10H to Amendment No. 1 to the
Company's Registration Statement on Form 10 No. 001-13279 and
incorporated herein by reference.
10.10 Supplemental Retirement Agreement between UNOVA, Inc. and Alton
J. Brann, filed on October 1, 1997 as Exhibit 10L to Amendment
No. 1 to the Company's Registration Statement on Form 10 No.
001-13279 and incorporated herein by reference.
10.11 Employment Agreement dated August 1997, between UNOVA, Inc., and
Clayton A. Williams, filed on October 1, 1997 as Exhibit 10K to
Amendment No. 1 to the Company's Registration Statement on Form
10 No. 001-13279 and incorporated herein by reference.
10.12 UNOVA, Inc. 1997 Stock Incentive Plan, filed as Exhibit 10.12 to
the Company's September 30, 1997 Quarterly Report on Form 10-Q,
and incorporated herein by reference.
10.13 UNOVA, Inc. Executive Severance Plan, filed as Exhibit 10.13 to
the Company's September 30, 1997 Quarterly Report on Form 10-Q,
and incorporated herein by reference.
10.14 Form of Promissory Notes in favor of the Company given by
certain officers and key employees, filed as Exhibit 10.14 to
the Company's September 30, 1997 Quarterly Report on Form 10-Q,
and incorporated herein by reference.
16
<PAGE>
INDEX TO EXHIBITS, (Continued)
10.15 Board resolution dated September 24, 1997 establishing the
UNOVA, Inc. Incentive Loan Program, filed as Exhibit 10.15 to
the Company's September 30, 1997 Quarterly Report on Form 10-Q,
and incorporated herein by reference.
10.16 UNOVA, Inc. Management Incentive Compensation Plan, filed as
Exhibit 10.16 to the Company's 1997 Annual Report on Form 10-K,
and incorporated herein by reference.
10.17 UNOVA, Inc. Executive Survivor Benefit Plan, filed as Exhibit
10.17 to the Company's 1997 Annual Report on Form 10-K, and
incorporated herein by reference.
10.18 Amendment No. 1 to Employment Agreement between Intermec
Corporation and Michael Ohanian, dated February 28, 1997, filed
as Exhibit 10.18 to the Company's 1997 Annual Report on Form
10-K, and incorporated herein by reference.
10.19 Amendment No. 2 to Employment Agreement between Intermec
Technologies Corporation and Michael Ohanian, dated February 28,
1998, filed as Exhibit 10.19 to the Company's 1997 Annual Report
on Form 10-K, and incorporated herein by reference.
10.20 Amendment to Employment Agreement between UNOVA, Inc. and
Clayton A. Williams, dated March 24, 1998, filed as Exhibit
10.20 to the Company's 1997 Annual Report on Form 10-K, and
incorporated herein by reference.
27 Financial Data Schedule (filed only electronically with the
Securities and Exchange Commission).
* Copies of these documents have been included in this Quarterly
Report on Form 10-Q filed with the Securities and Exchange
Commission.
17
<PAGE>
Exhibit 4.7
(CONFORMED COPY)
AMENDMENT NO. 2 TO CREDIT AGREEMENT
AMENDMENT dated as of May 15, 1998 to the Credit Agreement dated as of
September 24, 1997 (as heretofore amended, the "CREDIT AGREEMENT") among
UNOVA, INC. (the "BORROWER"), the BANKS party thereto (the "BANKS") and
MORGAN GUARANTY TRUST COMPANY OF NEW YORK, as Agent (the "AGENT").
The parties hereto agree as follows:
SECTION 1. DEFINED TERMS; REFERENCES. Unless otherwise specifically
defined herein, each term used herein which is defined in the Credit
Agreement has the meaning assigned to such term in the Credit Agreement. Each
reference to "hereof", "hereunder", "herein" and "hereby" and each other
similar reference and each reference to "this Agreement" and each other
similar reference contained in the Credit Agreement shall, after this
Amendment becomes effective, refer to the Credit Agreement as amended hereby.
SECTION 2. AMENDMENTS. (a) The definition of "Leverage Ratio" in
Section 1.01 of the Credit Agreement is hereby amended by the addition of the
following proviso:
PROVIDED that if there shall have been an acquisition or
disposition of operations during such period. Consolidated EBITDA shall
be calculated on a pro forma basis giving effect thereto as if such
acquisition or disposition had occurred on the first day of such period.
(b) The following new definition is hereby added to Section 1.01 of the
Credit Agreement:
"Foreign Debt" means Debt incurred by a Subsidiary organized under
the laws of a jurisdiction outside the United States (or incurred
through a branch or office outside the United States of a Subsidiary
organized under the laws of a jurisdiction within the United States)
which Debt is incurred with a view to obtaining financial or tax
benefits associated with the foreign operations of such Subsidiary
(including without limitation currency hedging).
<PAGE>
(c) Section 5.07 of the Credit Agreement is hereby amended to read in
its entirety as follows:
SECTION 5.07. LIMITATION ON SUBSIDIARY DEBT. The aggregate
outstanding principal amount of Debt of the Subsidiaries of the Borrower
(exclusive of (i) Debt owing to the Borrower or another Subsidiary and
(ii) Foreign Debt) shall at no time exceed 15% of Consolidated Net
Assets.
SECTION 3. REPRESENTATIONS OF BORROWER. The Borrower represents and
warrants that (i) the representations and warranties of the Borrower set
forth in Article 4 of the Credit Agreement are true on and as of the date
hereof and (ii) no Default has occurred and is continuing on and as of the
date hereof.
SECTION 4. GOVERNING LAW. This Amendment shall be governed by and
construed in accordance with the laws of the State of New York.
SECTION 5. COUNTERPARTS. This Amendment may be signed in any number of
counterparts, each of which shall be an original, with the same effect as if
the signatures thereto and hereto were upon the same instrument.
SECTION 6. EFFECTIVENESS. This Amendment shall become effective as of
the date hereof when the Agent shall have received from each of the Borrower
and Banks comprising the Required Banks a counterpart hereof duly signed by
such party or facsimile or other written confirmation (in form satisfactory
to the Agent) that such party has signed a counterpart hereof.
2
<PAGE>
IN WITNESS WHEREOF, the parties hereto have caused this Amendment to be
duly executed as of the date first above written.
UNOVA, INC.
By: /s/ Lori J. Segale
--------------------------------
Title: Treasurer
MORGAN GUARANTY TRUST
COMPANY OF NEW YORK
By: /s/ Diana H. Imhof
--------------------------------
Title: Vice President
BANK OF AMERICA NATIONAL
TRUST AND SAVINGS
ASSOCIATION
By: /s/ Therese A. Fontaine
--------------------------------
Title: Vice President
THE BANK OF NEW YORK
By: /s/ Rebecca K. Levine
--------------------------------
Title: Vice President
<PAGE>
THE CHASE MANHATTAN BANK
By: /s/ Lenard Weiner
--------------------------------
Title: Managing Director
CIBC INC.
By: /s/ Timothy E. Doyle
--------------------------------
Title: Managing Director
CIBC Oppenheimer Corp.,
as Agent
THE FIRST NATIONAL BANK
OF CHICAGO
By: /s/ Mark A. Isley
--------------------------------
Title: First Vice President
NATIONSBANK OF TEXAS, N.A.
By: /s/ George V. Hausler
--------------------------------
Title: Vice President
CREDIT SUISSE FIRST BOSTON
By: /s/ Robert N. Finney
--------------------------------
Title: Managing Director
By: /s/ Thomas G. Muoio
--------------------------------
Title: Vice President
<PAGE>
DRESDNER BANK, A.G., NEW YORK
BRANCH AND GRAND CAYMAN
BRANCH
By: /s/ John W. Sweeney
--------------------------------
Title: Assistant Vice President
By: /s/ Christopher E. Sarisky
--------------------------------
Title: Assistant Vice President
THE FUJI BANK, LIMITED
By: /s/ Masahito Fukuda
--------------------------------
Title: Joint General Manager
MELLON BANK, N.A.
By: /s/ John S. McCabe
--------------------------------
Title: Senior Vice President
THE NORTHERN TRUST COMPANY
By: /s/ John E. Burda
--------------------------------
Title: Second Vice President
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