FORM 10-Q
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, DC 20549
X QUARTERLY REPORT PURSUANT TO SECTION 13 or 15(d) OF
THE SECURITIES EXCHANGE ACT OF 1934
For the Quarterly Period Ended March 31, 1995
Commission file number: 1-5731
Willcox & Gibbs, Inc.
(Exact name of registrant as
specified in its charter)
New York 13-1474527
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
150 Alhambra Circle, Coral Gables, Florida 33134
(Address of principal executive offices) (Zip Code)
(305) 446-8000
(Registrant's telephone number,
including area code)
Indicate by check mark whether the registrant (1) has filed all
reports required to be filed by Section 13 or 15(d) of the Securities Exchange
Act of 1934 during the preceding 12 months (or for such shorter period that the
registrant was required to file such reports), and (2) has been subject to such
filing requirements for the past 90 days.
Yes X No
Indicate number of shares outstanding of each of the issuer's classes
of common stock, as of the latest practicable date:
[CAPTION]
<TABLE>
Date Class Shares Outstanding
<S> <C> <C>
April 24, 1995 Common Stock 24,114,138
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
WILLCOX & GIBBS, INC.
INDEX
Page Number
<S> <C> <C>
Part I - Financial Information
Condensed Consolidated Balance Sheets (Unaudited)
at March 31, 1995 and December 31, 1994................ 1
Condensed Consolidated Statements of Income
(Unaudited) for the Three Months Ended March 31, 1995
and 1994............................................... 2
Condensed Consolidated Statements of Cash Flows
(Unaudited) for the Three Months Ended March 31, 1995
and 1994............................................... 3
Notes to Unaudited Condensed Consolidated
Financial Statements................................... 4
Report of Independent Accountants........................ 5
Management's Discussion and Analysis of Financial
Condition and Results of Operations.................... 6
Part II - Other Information........................................ 8
</TABLE>
<PAGE>
<TABLE>
WILLCOX & GIBBS, INC.
CONDENSED CONSOLIDATED BALANCE SHEETS
(000's omitted, except for share amounts)
<CAPTION>
March 31, Dec. 31,
1995 1994
--------- ----------
(UNAUDITED)
<S> <C> <C>
ASSETS
Current Assets
Cash and Cash Equivalents $ 17,174 $ 23,843
Accounts and Notes Receivable - Net 146,243 142,997
Inventories of Finished Goods 110,949 111,276
Income Taxes Receivable 210 3,385
Prepaid Expenses and Other Current Assets 7,244 8,930
Deferred Income Taxes 1,888 1,888
-------- --------
Total Current Assets 283,708 292,319
Investments and Noncurrent Receivables 4,627 5,330
Fixed Assets - Net 50,641 51,854
Other Assets 4,174 3,759
Deferred Income Taxes 1,349 1,253
Cost in Excess of Net Assets of Acquired Businesses - Net 59,564 59,972
-------- --------
$404,063 $414,487
======== ========
LIABILITIES AND STOCKHOLDERS' EQUITY
Current Liabilities
Current Installments of Long-Term Debt $ 24,704 $ 24,894
Accounts and Notes Payable - Trade and Other Liabilities 148,070 155,282
Deferred Income Taxes 630 630
-------- --------
Total Current Liabilities 173,404 180,806
Long-Term Debt 87,496 94,761
Other Long-Term Liabilities 4,261 4,440
Deferred Income Taxes 3,220 3,028
Stockholders' Equity
Preferred Stock (Authorized 600,000 Shares, None Issued) 0 0
Preference Stock (Authorized 2,000,000 Shares, None Issued) 0 0
Common Stock (24,705,233 Shares Issued) 24,705 24,705
Capital Surplus 81,354 81,354
Retained Earnings 35,035 30,805
Marketable Equity Security Adjustment (875) (875)
Treasury Stock, at Cost (591,095 Shares) (4,537) (4,537)
-------- --------
135,682 131,452
$404,063 $414,487
======== ========
</TABLE>
See accompanying report of independent accountants and notes
to unaudited condensed consolidated financial statements.
<PAGE>
<TABLE>
WILLCOX & GIBBS, INC.
CONDENSED CONSOLIDATED STATEMENTS OF INCOME
(000's omitted, except for per share amounts)
<CAPTION>
THREE MONTHS
ENDED
MARCH 31,
------------------------
1995 1994
--------- --------
(UNAUDITED)
<S> <C> <C>
Net Sales $278,828 $244,607
Cost of Goods Sold 223,512 194,283
-------- --------
Gross Profit 55,316 50,324
Selling and Administrative Expenses 45,376 45,061
-------- --------
Operating Profit 9,940 5,263
-------- --------
Interest Expense 2,410 2,245
-------- --------
Other Income - Net 23 76
-------- --------
Income from Continuing Operations before Income Taxes 7,553 3,094
Provision for Income Taxes 3,323 1,361
-------- --------
Income from Continuing Operations 4,230 1,733
Discontinued Operations, Net of Income Taxes - 232
-------- --------
Net Income $ 4,230 $ 1,965
======== ========
Income per Common Share:
Primary
Income from Continuing Operations $ 0.18 $ 0.08
Discontinued Operations - 0.01
-------- --------
Net Income $ 0.18 $ 0.09
======== ========
Fully diluted
Income from Continuing Operations $ 0.16 $ 0.08
Discontinued Operations - 0.01
-------- --------
Net Income $ 0.16 $ 0.09
======== ========
Average Number of Common and Common Equivalent Shares
Primary 24,153 22,191
======== ========
Fully diluted 29,378 27,416
======== ========
</TABLE>
See accompanying report of independent accountants and notes
to unaudited condensed consolidated financial statements.
<PAGE>
<TABLE>
WILLCOX & GIBBS, INC.
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(000's omitted)
<CAPTION>
THREE MONTHS ENDED
MARCH 31,
-------------------------
1995 1994
--------- --------
(UNAUDITED)
<S> <C> <C>
Net Cash Provided By Operating Activities $1,697 $3,923
-------- --------
Cash Flows From Investing Activities:
Capital Expenditures (721) (2,341)
Other Investing Activities (11) (1,177)
-------- --------
Net Cash Used In Investing Activities (732) (3,518)
-------- --------
Cash Flows From Financing Activities:
Net Payments under Line of Credit Arrangements 0 (40,390)
Sale of Common Stock to Rexel 0 31,043
Other Debt Payments and Sundry Financing Activities (7,634) (377)
-------- --------
Net Cash Used In Financing Activities (7,634) (9,724)
-------- --------
Net Decrease In Cash (6,669) (9,319)
Cash and Cash Equivalents at Beginning of Period 23,843 19,131
-------- --------
Cash and Cash Equivalents at End of Period $17,174 $9,812
======== ========
</TABLE>
See accompanying report of independent accountants and notes
to unaudited condensed consolidated financial statements.
<PAGE>
WILLCOX & GIBBS, INC.
NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
1. The accompanying financial information should be read in conjunction with
the consolidated financial statements, including the notes thereto, for
the year ended December 31, 1994. The condensed consolidated balance
sheet as of December 31, 1994 has been summarized from the Company's
audited consolidated balance sheet as of that date.
2. Results for interim periods are not necessarily indicative of the results
to be expected for the year. The accompanying financial information
reflects all adjustments which are, in the opinion of Management, of a
normal, recurring nature and necessary for a fair statement of the results
for the periods.
3. Inventories are stated at the lower of LIFO cost or market.
4. Primary income per common share is computed by dividing net income by the
weighted average number of common and common equivalent shares outstanding
during the periods. Fully diluted income per share assumes the conversion
of convertible debentures and the resultant reduction in interest costs,
net of tax.
5. As previously reported in 1994, the Company sold its apparel parts and
supplies distribution business ("Apparel"). Accordingly, this business is
included as discontinued operations in 1994 results of operations.
Summarized results of the discontinued operations are as follows (000's
omitted):
[CAPTION]
<TABLE>
Three Months Ended
March 31, 1994
------------------
<S> <C>
Sales $18,839
=======
Net Income $ 232
=======
</TABLE>
Interest expense of $984 for the three months ended March 31, 1994 has
been allocated to Apparel operating results based upon net assets of the
Apparel operations.
6. First quarter results for 1994 include charges associated primarily with
the resignation of an officer of the Company totaling $2.1 million ($1.2
million net of tax).
<PAGE>
REPORT OF INDEPENDENT ACCOUNTANTS
The Board of Directors of
Willcox & Gibbs, Inc.:
We have reviewed the accompanying condensed consolidated balance sheet of
Willcox & Gibbs, Inc. (the "Company") as of March 31, 1995, and the related
condensed consolidated statements of income and cash flows for the three-month
periods ended March 31, 1995 and 1994. These financial statements are the
responsibility of the Company's management.
We conducted our review in accordance with standards established by the
American Institute of Certified Public Accountants. A review of interim
financial information consists principally of applying analytical procedures to
financial data and making inquiries of persons responsible for financial and
accounting matters. It is substantially less in scope than an audit conducted
in accordance with generally accepted auditing standards, the objective of
which is the expression of an opinion regarding the financial statements taken
as a whole. Accordingly, we do not express such an opinion.
Based on our review, we are not aware of any material modifications that should
be made to the accompanying financial statements for them to be in conformity
with generally accepted accounting principles.
We have previously audited, in accordance with generally accepted auditing
standards, the consolidated balance sheet as of December 31, 1994, and the
related consolidated statements of income, changes in stockholders' equity and
cash flows for the year then ended (not presented herein), and in our report
dated March 15, 1995, except as to the information presented in the Note 5, for
which the date is March 30, 1995, we expressed an unqualified opinion on those
consolidated financial statements. In our opinion, the information set forth
in the accompanying condensed consolidated balance sheet as of December 31,
1994 is fairly stated, in all material respects, in relation to the
consolidated balance sheet from which it has been derived.
Coopers & Lybrand L.L.P.
Miami, Florida
April 14, 1995
<PAGE>
Management's Discussion and Analysis of Financial Condition and Results of
Operations
Results of Operations
Sales for the first quarter ended March 31, 1995 were up 14.0% to
$278.8 million, compared with $244.6 million for the same period a year ago.
Income from continuing operations was $4.2 million, or $.18 per
share, for the first quarter of 1995, compared to $1.7 million, or $.08 per
share, in 1994. Included in the first quarter of 1994 results were charges
associated primarily with the resignation of an officer of the Company totaling
$1.2 million, net of tax, or $.05 per share.
As previously reported, in 1994 the Company sold its apparel parts
and supplies distribution businesses ("Apparel"). Accordingly, results of
Apparel are included as discontinued operations in 1994 results of operations.
The following table sets forth the percentages which certain income
and expense items bear to net sales:
<TABLE>
<CAPTION>
THREE MONTHS ENDED
MARCH 31,
----------------------
1995 1994
------ ------
<S> <C> <C>
Net Sales 100.0% 100.0%
====== ======
Gross Margin 19.8% 20.6%
Selling and Administrative expenses 16.2 18.4
------ ------
Operating Profit 3.6 2.2
Interest Expense .9 .9
Other Income - -
------ ------
Income From Continuing Operations Before Taxes 2.7% 1.3%
====== ======
</TABLE>
The 14.0% sales increase reflects improvement in the commercial
construction and industrial markets and the continuing favorable residential
construction markets which began in the second half of 1994. However, housing
starts have begun to soften in the first quarter of 1995. While volume is up,
margins have declined compared to the prior year. This decline is primarily
attributable to the increased percentage of total sales comprised of sales
shipped direct from the vendor to the customer, which historically have lower
margins than sales from inventory, a decline in our Utility Division margins
due to lower margins under utility supply contracts and adjustment of inventory
LIFO reserves of $0.6 million in the first quarter of 1995, reflecting the
impact of inflation in copper and other products.
Excluding charges associated primarily with the resignation of an
officer in the first quarter of 1994, selling and administrative expenses
increased $2.2 million for the first three months of 1995 compared to the first
<PAGE>
three months of 1994. However, these expenses were 16.2% of sales for the
first quarter of 1995, compared to 17.6% for the same period a year ago,
reflecting the benefits of cost control programs initiated in 1994.
Interest cost increased by $0.2 million in the first quarter of 1995
as compared to the first quarter of the prior year. However, in the first
quarter of 1994, $1.0 million of interest cost was allocated to the
discontinued operations. Including this allocation, interest cost declined by
$0.8 million or 25.4%.
Liquidity; Capital Resources
The Company's working capital requirements continue to be met by
internally generated funds and short-term borrowings. Management believes
sufficient cash resources will be available to support its long-term growth
strategies through internally generated funds, credit arrangements and the
ability of the Company to obtain additional financing. However, no assurance
can be given that financing will continue to be available on attractive terms.
At March 31, 1995 the Company had cash of $17.2 million compared to
cash at December 31, 1994 of $23.8 million, and had $112.2 million of
indebtedness for borrowed money (including current installments and short-term
debt) compared to $119.7 million at December 31, 1994. The decrease in cash is
primarily the result of the $7.1 million installment payment for the 9.78%
Senior Notes paid in March 1995. As of March 31, 1995, there were no
borrowings outstanding under the Company's bank credit agreement and $40
million was available for future borrowings.
During the first quarter of 1995 the Company's operating activities
provided $1.7 million in cash compared to $3.9 million for the first quarter of
1994. Capital expenditures were $0.7 million in 1995 compared to $2.3 million
in 1994.
The Company had a current ratio of 1.6 at both March 31, 1995 and
December 31, 1994. The number of days cost of sales represented by inventory
was 75 days at both March 31, 1995 and December 31, 1994 and the number of days
sales represented by accounts receivable was 49 days at March 31, 1995 compared
to 48 days at December 31, 1994. Trade working capital turnover improved to
7.4 at March 31, 1995 from 7.1 at December 31, 1994. The ratio of borrowings
(debt) to stockholders' equity improved to .8 at March 31, 1995 from .9 at
December 31, 1994.
<PAGE>
PART II - OTHER INFORMATION
[CAPTION]
<TABLE>
Item 6. Exhibits and Reports on Form 8-K
<S> <C> <C>
(a) Exhibits
Exhibit No. Description
10.1 Amendment No. 2 to the Revolving Credit
and Reimbursement Agreement
11.1 Computation of net income per common and
common equivalent shares.
15.1 Awareness letter of independent
accountants.
27.1 Financial Data Schedule (Filed with EDGAR
filing only)
</TABLE>
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934,
the registrant has duly caused this report to be signed on its behalf by
undersigned thereunto duly authorized.
WILLCOX & GIBBS, INC.
Date: May 2, 1995 By:/s/ Allan Gonopolsky
---------------------------------
Allan Gonopolsky
Vice President and
Chief Accounting Officer
<PAGE>
Index to Exhibits
<TABLE>
<CAPTION>
<S> <C> <C>
Exhibit No. Description
10.1 Amendment No. 2 to the Revolving Credit
and Reimbursement Agreement
11.1 Computation of net income per common and
common equivalent shares.
15.1 Awareness letter of independent
accountants.
27.1 Financial Data Schedule (Filed with EDGAR
filing only)
</TABLE>
EXHIBIT 10.1
AMENDMENT AGREEMENT
NO. 2 TO
REVOLVING CREDIT AND REIMBURSEMENT AGREEMENT
THIS AMENDMENT AGREEMENT made and entered into as of the 30th day of
March, 1995, by and among WILLCOX & GIBBS, INC., a New York corporation (the
"Borrower"), NATIONSBANK OF FLORIDA, NATIONAL ASSOCIATION, CREDIT LYONNAIS NEW
YORK BRANCH and CREDIT LYONNAIS CAYMAN ISLAND BRANCH (formerly Credit Lyonnais
New York Branch) (collectively, "Lenders"), and NATIONSBANK OF FLORIDA,
NATIONAL ASSOCIATION, as Agent (the "Agent") and CREDIT LYONNAIS NEW YORK
BRANCH as Co-Agent (the "Co-Agent").
WITNESSETH:
WHEREAS, the Borrower, the Lenders, the Agent and the Co-Agent have
entered into a Revolving Credit and Reimbursement Agreement dated as of
December 17, 1993, as amended by Amendment Agreement No. 1 dated as of August
22, 1994 (the "Agreement") whereby the Lenders agreed to make loans to the
Borrower and to issue Letters of Credit and create Acceptances on behalf of the
Borrower; and
WHEREAS, as a condition to making the loans and issuing Letters of Credit
and creating Acceptances the Lenders required that all Subsidiaries of the
Borrower guarantee payment of all of Borrower's Obligations; and
WHEREAS, the Borrower has requested that the Agent, the Co-Agent and the
Lenders amend the Agreement as hereinafter provided;
NOW, THEREFORE, the Borrower, the Agent, the Co-Agent and the Lenders do
hereby agree as follows:
1. The term "Agreement" as used herein and in Loan Documents shall mean
the Agreement as hereby amended and modified. Unless the context otherwise
requires, all terms used herein without definition shall have the definition
provided therefor in the Agreement.
2. Amendments. Subject to the conditions hereof, the Agreement is
hereby amended, effective as of the date hereof, as follows:
(a) The following defined terms are hereby deleted from Section
1.01:
"Applicable Interest Addition"
"Borrowing Base"
"Borrowing Base Certificate"
"Eligible Accounts"
"Eligible Inventory"
"Stated Revolving Credit Termination Date"
<PAGE>
"Swing Line CD Loan"
"Swing Line CD Rate"
(b) The definition of "Applicable Base Rate" appearing in Section
1.01 is hereby amended by deleting the words "Swing Line CD Loan"
appearing in clause (ii) and inserting in lieu thereof the words "Floating
CD Loan" and by deleting the words "Swing Line Loan" in clause (ii) and
inserting in lieu thereof the words "Floating CD Loan;"
(c) The Definition of "Applicable Margin" appearing in Section 1.01
is hereby amended in its entirety so that as amended it shall read as
follows:
"'Applicable Margin' means, in the case of a LIBOR
Loan, Floating CD Loan or Fixed CD Loan, 0.75% per annum
(the 'Interest Addition') and, in the case of the unused
fee required to be paid pursuant to Section 2.13, 0.225%
per annum (the 'Unused Fee'); provided, however, in the
event that as at the end of any fiscal quarter of the
Borrower ending on or after June 30, 1995 (each such date,
a 'Determination Date'), the ratio of Consolidated EBIT to
Consolidated Interest Expense (the 'EBIT Ratio') for the
four fiscal quarters then ended is greater than 2.50 to
1.00 and the ratio of Consolidated Senior Indebtedness to
Consolidated Total Capital (the 'Senior Indebtedness
Ratio') is less than 0.40 to 1.00, then effective on the
fifth Business Day (an 'Addition Adjustment Date')
following the date of delivery (the 'Delivery Date') of the
Compliance Certificate setting forth the computations of
such Ratios for all outstanding Loans and for the Unused
Fee and effective as of the first day of the Interest
Period for each Loan made on or after the Addition
Adjustment Date, in each case to but not including the next
succeeding Additional Adjustment Date, the Interest
Addition and the Unused Fee shall mean the percent per
annum set forth in the applicable column below as to which
both the EBIT Ratio and the Senior Indebtedness Ratio
determined as of the Determination Date are within the
ranges that correspond to such column:
<PAGE>
<TABLE>
<CAPTION>
EBIT Ratio is:
-------------------------------------------------------------------
Greater than 3.00 Greater than
to 1.00 2.50 to 1.00
but equal to but equal to
Greater than or less than or less than
3.50 to 1.00 3.50 to 1.00 3.00 to 1.00
------------------- ------------------ ---------------------
Senior
Indebtedness Interest Unused Interest Unused Interest Unused
Ratio is: Addition Fee Addition Fee Addition Fee
--------------------------- --------- ------ -------- ------ -------- --------
<S> <C> <C> <C> <C> <C> <C>
Less than .25 to 1.00 0.55% 0.15% 0.55% 0.15% 0.65% 0.175%
Less than .30 to 1.00
but equal to or greater
than .25 to 1.00 0.55% 0.15% 0.65% 0.175% 0.65% 0.175%
Less than .40 to 1.00 but
equal to or greater than
.30 to 1.00 0.65% 0.175% 0.65% 0.175% 0.75% 0.225%
Equal to or greater than
.40 to 1.00 0.75% 0.225% 0.75% 0.225% 0.85% 0.25%
</TABLE>
Prior to the delivery of such Compliance Certificate, the
Borrower may deliver to the Agent a certificate of an
Authorized Officer (a "Preliminary Certificate") certifying
as to the level of such Ratios as of the most recent
Determination Date, and the Applicable Margin shall be
determined as provided above based on such Preliminary
Certificate treating the date of delivery thereof as a
Delivery Date until delivery of such Compliance
Certificate; provided that (A) the accuracy of and basis
for computations contained in each Preliminary Certificate
shall be subject to verification by the Agent and (B) the
Applicable Margin shall be readjusted retroactively to the
preceding Addition Adjustment Date in the event that the
Compliance Certificate subsequently delivered in connection
therewith shall demonstrate that any previous adjustment to
the Applicable Margin based on such Preliminary Certificate
is not supported by the computations contained in such
Compliance Certificate;
(d) The definition of "CD Rate" appearing in Section 1.01 is hereby
amended by deleting the word "Fixed" appearing therein;
(e) A new definition "Consolidated EBIT" is hereby added to Section
1.01 immediately following the definition of "Consolidated Interest
Coverage Ratio" which definition shall read as follows:
<PAGE>
"'Consolidated EBIT' means, with respect to the Borrower
and its Subsidiaries for the four fiscal quarters
immediately preceding the date of computation thereof, the
sum of, without duplication, (i) Consolidated Net Income
for such period, plus (ii) Consolidated Interest Expense
during such period, (iii) plus taxes on income during such
period, all determined on a consolidated basis in
accordance with Generally Accepted Accounting Principles
applied on a consistent basis";
(f) The definition of "Floating Rate" appearing in Section 1.01 is
hereby amended in its entirety so that as amended it shall read as
follows:
"'Floating Rate' means in the case of a Reference Loan the
Reference Rate and in the case of a Floating CD Loan the CD
Rate for such Floating CD Loan";
(g) The definition of "Floating Rate Loan" appearing in Section 1.01
is hereby amended in its entirety so that as amended it shall read as
follows:
"'Floating Rate Loan' means a Loan which is either a
Reference Loan or a Floating CD Loan";
(h) A new definition "Floating CD Loan" is hereby added to Section
1.01 immediately following the definition "Fixed Rate Loan" which
definition shall read as follows:
"'Floating CD Loan' means a CD Loan other than a Fixed CD
Loan";
(i) The definition of "Interest Period" appearing in Section 1.01 is
hereby amended by inserting the words "seven days or" in front of the word
"one" and the words "or one year" following the word "months" in clause
(B) of such definition;
(j) The definition of "Principal Office" appearing in Section 1.01
is hereby amended in its entirety so that as amended it shall read as
follows:
"'Principal Office' means the principal office of the Agent
at One Independence Center, 15th Floor, Charlotte, North
Carolina 28255, Attention: Agency Services, or such other
office and address as the Agent may from time to time
designated";
(k) A new definition "Reference Loan" is hereby added to Section
1.01 immediately following the definition of "Principal Office" which
definition shall read as follows:
<PAGE>
"'Reference Loan' means a Loan which bears interest at the
Reference Rate";
(l) A new definition "Reference Rate" is hereby added to Section
1.01 immediately following the definition of "Reference Loan" which
definition shall read as follows:
"'Reference Rate' with respect to any day means the greater
of (i) the Federal Funds Effective Rate in effect on such
day plus one-half of one percent (1/2%) or (ii) the rate of
interest per annum announced publicly by the Agent as its
prime rate in effect on such day (such prime rate is not
necessarily the lowest or best rate offered by NationsBank
to its customers). Any change in the Reference Rate shall
be effective as of the day of such change";
(m) The definition of "Revolving Credit Termination Date" appearing
in Section 1.01 is amended by deleting the phrase "Stated Revolving Credit
Termination Date" in clause (i) and inserting in lieu thereof the date
"March 30, 2000";
(n) The definition of "Swing Line Rate" appearing in Section 1.01 is
hereby amended in its entirety so that as amended it shall read as
follows:
"'Swing Line Rate' means either the Reference Rate or the
Floating CD Rate as designated by the Borrower as provided
in Section 2.17(i), any change in the Reference Rate or CD
Rate for a Floating CD Loan to be effective as of the date
of any such change";
(o) The definition of "Total Revolving Credit Commitment" appearing
in Section 1.01 is hereby amended in its entirety so that as amended it
shall read as follows:
"'Total Revolving Credit Commitment' means an amount equal
to $40,000,000, as reduced in accordance with section
2.10";
(p) Section 2.01 is hereby amended in its entirety so that as
amended it shall read as follows:
"2.01 Commitment. Subject to the terms and
conditions of this Agreement, each Lender severally agrees
to make Advances to the Borrower from time to time from the
Closing Date until the Revolving Credit Termination Date on
a pro rata basis as to the total borrowing requested by the
Borrower on any day determined by its Applicable Commitment
Percentage up to but not exceeding the Revolving Credit
Commitment of such Lender, provided, however, that the
Lenders will not be required and shall have no obligation
to make any Advance (i) so long as a Default or an
<PAGE>
Event of Default has occurred and is continuing or (ii) if
the Agent has accelerated the maturity of the Notes as a
result of an Event of Default, or (iii) if any other term
or condition set forth in Sections 5.01 or 5.02 hereof, as
the case may be, to the extent applicable, has not been
satisfied or waived; provided further, however, that
immediately after giving effect to each Advance, the
principal amount of outstanding Revolving Loans plus the
amount of all Swing Line Outstandings, Acceptances,
Outstanding Letters of Credit and Reimbursement Obligations
shall not exceed the Total Revolving Credit Commitment.
Within such limits, the Borrower may borrow, repay and
reborrow hereunder, on a Business Day in the case of a
Floating Rate Loan or Fixed CD Loan, and on a LIBOR
Business Day in the case of a LIBOR Loan, from time to time
from the Closing Date until, but (as to borrowings and
reborrowings) not including, the Revolving Credit
Termination Date; provided, however, that (x) no Fixed CD
Loan shall be made less than thirty (30) days before the
Revolving Credit Termination Date and no LIBOR Loan shall
be made less than seven (7) days before the Revolving
Credit Termination Date and (y) each Fixed Rate Loan may,
subject to the provisions of Section 2.06, be repaid only
on the last day of the Interest Period with respect
thereto. The Borrower agrees that if at any time the
Outstandings shall exceed the Total Revolving Credit
Commitment, the Borrower shall immediately reduce the
outstanding principal amount of the Loans such that, as a
result of such reduction, the Total Revolving Credit
Commitment shall equal or exceed the Outstandings."
(q) Section 2.03 is hereby amended by deleting the phrase "six (6)
different Interest Periods" and inserting in lieu thereof the phrase "ten
(10) different Interest Periods."
(r) Section 2.04(c) is hereby amended by deleting the reference to
"Floating Rate Loan" wherever it appears therein and inserting in lieu
thereof the term "Reference Loan";
(s) Section 2.08 is hereby amended by inserting an additional
paragraph thereto reading as follows:
"At the request of Credit Lyonnais, the Borrower will
cause to be executed and delivered to each of its New York
Branch and its Cayman Island Branch, a note in the amount
of the Applicable Commitment Percentage of Credit Lyonnais;
provided that such notes shall provide that the aggregate
outstanding principal amount payable under both such notes
shall not exceed the Applicable Commitment Percentage of
<PAGE>
Credit Lyonnais. Credit Lyonnais agrees that all dealings
hereunder by the Agent shall be with the New York Branch
and that all payments required hereunder, notices of
request for advances and other notices shall be made or
given to Credit Lyonnais New York Branch on behalf of
Credit Lyonnais."
(t) Section 2.13 is hereby amended by deleting the phrase "one-
fourth percent (1/4%) per annum" in clause (a) of the first sentence and
inserting in lieu thereof the phrase "the Applicable Margin for Unused
Fee";
(u) Section 2.16 is hereby amended in its entirety so that as
amended it shall read as follows:
"2.16 Use of Proceeds. The proceeds of the Loans
made pursuant to the Revolving Credit Facility and Swing
Line hereunder shall be used by the Borrower for (i)
prepayment of the BTR Indebtedness, (ii) payment of certain
contingent obligations relating to the Summers Group
acquisition, (iii) working capital needs, (iv)
acquisitions, and (v) other general corporate purposes of
the Borrower";
(v) Section 2.17 is hereby amended by (a) deleting the figure
"$5,000,000" appearing in clause (ii) and inserting in lieu thereof the
figure "$10,000,000," (b) deleting the phrase "either the Borrowing Base
or" in clause (iii) of the second sentence of the lead paragraph, (c)
deleting in its entirety the last sentence of the lead paragraph, (d)
deleting the reference to "Floating Rate Loan" in subsection (iv) and
inserting in lieu thereof "Reference Loan," and (e) subsections (i) and
(ii) are hereby amended in their entirety so that as amended they shall
read as follows:
"(i) Borrower may borrower, repay and reborrow under
this Section 2.17. Borrowings under the Swing Line may be
made in amounts which are integral multiples of $100,000
upon telephonic (confirmed in writing) or telefacsimile
request by an authorized officer of the Borrower made to
NationsBank not later than 12:00 noon Charlotte, North
Carolina time on the Business Day of the requested
borrowing. Swing Line Loans shall bear interest, at the
election of the Borrower as designated to NationsBank, at
either the Reference Rate in the case of a Reference Loan
or the CD Rate in the case of a Floating CD Loan. If
Borrower fails to designate the interest rate for a Swing
Line Loan, then such Swing Line Loan shall bear interest at
the Reference Rate. Each repayment of a Swing Line Loan
shall be in a minimum amount of $100,000 and multiples of
$10,000 in excess thereof.
<PAGE>
(ii) If Borrower instructs NationsBank to debit its
demand deposit account in an amount of any payment with
respect to a Swing Line Loan, or NationsBank otherwise
receives repayment after 2:00 P.M. Charlotte, North
Carolina time, on a Business Day, such payment shall be
deemed received on the next Business Day."
(w) Section 2.18 is hereby deleted in its entirety;
(x) Section 3.01 is hereby amended by (i) deleting the word "Stated"
appearing in the second sentence, and (ii) deleting the phrase "either the
Borrowing Base or" in the last sentence thereof;
(y) The parties to this Amendment Agreement hereby agree that
notwithstanding the provisions of Sections 3.02 and 3.03, the Borrower
shall not be entitled to request and NationsBank shall not cause to be
issued Acceptances for the benefit of the Borrower, and the Agreement is
hereby amended to delete all rights of the Borrower to cause Acceptances
to be created;
(z) Section 3.04 is hereby amended by (i) deleting the reference in
the last sentence of subsection (a) to "Floating Rate" and inserting in
lieu thereof the term "Reference Rate," and (ii) changing the reference in
the second sentence of subsection (e) to the 1993 revision of the Uniform
Customs and Practice for Documentary Credits, Publication No. 500;
(aa) Section 3.05 is hereby amended in its entirety so that it shall
read as follows:
"For the period beginning on March 30, 1995 and ending on
the Revolving Credit Termination Date, the Borrower agrees
to pay to the Agent, for the pro rata benefit of the
Lenders based on their Applicable Commitment Percentages, a
fee equal to the Applicable Margin for the Interest
Addition times the stated amount of each Letter of Credit
from the date of issuance of such Letter of Credit. In
addition, the Borrower shall pay to NationsBank a fee equal
to one-eighth percent (1/8%) per annum of the face amount
of each Letter of Credit. Such payment of fees provided
for in this Section 3.05 shall be due quarterly in arrears
on the last Business Day of each March, June, September and
December."
(ab) Section 5.02(f) is hereby amended by deleting the comma
following the word "continuing," and inserting a period in lieu thereof
and deleting the remainder of such subsection (f);
(ac) Section 8.01 is hereby amended by deleting subsection (d) and
relettering subsections (e) and (f) as subsections (d) and (e);
<PAGE>
(ad) Section 9.02 is hereby amended by deleting the figure
"5,000,000" appearing in clause (vi) and inserting in lieu thereof the
figure "$10,000,000";
(ae) Section 9.06 is hereby amended by (i) deleting the word "and" at
the end of clause (xvi), (ii) replacing the period at the end of clause
(xvii) with a comma and adding the following:
"(xviii) tax exempt obligations of any state of the United
States of America or any political subdivision or public
instrumentality thereof which are payable in Dollars and
are rated in one of the two highest rating categories by
Standard & Poor's Corporation or Moody's Investors
Services, Inc. and which have a weighted average life of
not more than 90 days, and (xix) securities of any open-end
investment company registered under the Investment Company
Act of 1940, as amended, which invests primarily in
obligations meeting the requirements set forth in the
clause (xviii)."
(af) Section 9.11 is hereby amended by (i) deleting the word "and" at
the end of clause (v) and correcting the clause reference following the
word "and" to read "(vi)," (ii) replacing the period at the end of clause
(vi) with a comma and the word "and" and adding the following:
"(vii) prepayment of mortgage Indebtedness of
approximately $6,500,000 of WGI Properties, Inc. together
with a prepayment penalty of not to exceed 1% of such
Indebtedness."
(ag) Section 9.12 is hereby amended in its entirety so that as
amended it shall read as follows:
"9.12 Consolidated Senior Indebtedness/Capital.
Permit at any time the ratio of Consolidated Senior
Indebtedness to Consolidated Total Capital to exceed (i)
.55 to 1.00 during Fiscal Year 1995, and (ii) .45 to 1.00
during any Fiscal Year thereafter."
(ah) Section 9.17 is hereby amended in its entirety so that as
amended it shall read as follows:
"9.17 Fixed Charge Coverage Ratio. Permit at any
time during the periods set forth below the Consolidated
Fixed Charge Coverage Ratio to be less than that set forth
below opposite such period:
<PAGE>
<TABLE>
<CAPTION>
Consolidated Fixed
Period Charge Coverage Ratio
------- ----------------------
<S> <C>
October 1, 1994 through 1.15 to 1.00
June 30, 1995
July 1, 1995 through 1.30 to 1.00
December 31, 1996
January 1, 1997 and 1.40 to 1.00
thereafter"
</TABLE>
(ai) Section 10.01 is hereby amended by adding the "or" at the end of
subsection (j) and adding a new subsection (k) to Section 10.1 which
subsection shall read as follows:
"(k) if Rexel shall cease to own, directly or
indirectly, at least one-third (33 1/3%) of the voting
stock of the Borrower after exercise of all convertible
securities and stock options."
(aj) Exhibit A to the Agreement is amended in its entirety so that as
amended it is in the form attached to this Amendment Agreement.
(ak) Footnote 1 to the Borrowing Notice set forth in Exhibit F-1 is
hereby amended to read as follows:
"1 For any Fixed CD Loan 30, 60, 90 or 180 days and
for any LIBOR Loan, seven days, one, two, three or six
months or one year."
3. Each of the Guarantors joins in executing this Amendment Agreement
for the purpose of consenting hereto and reaffirm their guaranty of Borrower's
Obligations.
4. In order to induce the Lender to enter into this Amendment Agreement,
the Borrower represents and warrants to the Lenders as follows:
(a) The representations and warranties made by Borrower in Article
VII of the Agreement are true on and as of the date hereto except that the
financial statements referred to in Section 7.02(c) shall be those most
recently furnished to the Lender pursuant to Section 8.01;
(b) There has been no material adverse change in the condition,
financial or otherwise, of the Borrower and its Subsidiaries since the
date of the most recent financial reports of the Borrower received by the
Lenders under Section 8.01 thereof, other than changes in the ordinary
course of business, none of which has been a material adverse change;
<PAGE>
(c) The business and properties of the Borrower and its Subsidiaries
are not, and since the date of the most recent financial report of the
Borrower and its Subsidiaries received by the Lenders under Section 8.01
thereof have not been adversely affected in any substantial way as the
result of any fire, explosion, earthquake, accident, strike, lockout,
combination of workers, flood, embargo, riot, activities of armed forces,
war or acts of God or the public enemy, or cancellation or loss of any
major contracts; and
(d) No event has occurred and no condition exists which, upon the
consummation of the transaction contemplated hereby, constituted a Default
or an Event of Default on the part of the Borrower under the Agreement or
the Notes either immediately or with the lapse of time or the giving of
notice, or both.
5. As a condition to the effectiveness of this Amendment Agreement the
Agent shall have received the following:
(a) Executed counterparts of this Amendment Agreement and substitute
Notes (which shall be exchanged for the currently existing Notes) in the
amount of the Applicable commitment percentage of each Lender;
(b) Certificate of the Secretary or Assistant Secretary of the
Borrower as to (i) Certificate of Incorporation, (ii) Bylaws, (iii)
resolutions of the Board of Directors authorizing the transactions
contemplated by this Amendment Agreement and (iv) existence of the
Borrower;
(c) Certificate of the Secretary of each of the Guarantors as to
resolutions of such Guarantor approving the execution of this Amendment
Agreement;
(d) Opinion of counsel for the Borrower and Guarantors in form and
content acceptable to the Lenders; and
(e) Receipt by the Agent and Lenders of all fees and expenses
payable by the Borrower in connection with this Amendment Agreement.
6. All instruments and documents incident to the consummation of the
transactions contemplated hereby shall be satisfactory in form and substance to
the Lenders and their counsel; the Lenders shall have received copies of all
additional agreements, instruments and documents which they may reasonably
request in connection therewith, such documents, when appropriate, to be
certified by appropriate corporate or governmental authorities; and all
proceedings of the Borrower relating to the matters provided for herein shall
be satisfactory to the Agent, the Lenders and their counsel.
7. This Amendment Agreement and the Agreement sets forth the entire
understanding and agreement of the parties hereto in relation to the subject
matter hereof and supersedes any prior negotiations and agreements among the
parties relative to such subject matter. No promise, conditions,
representation or warranty, express or implied, not herein set forth shall bind
any party hereto, and no one of them has relied on any such promise, condition,
<PAGE>
representation or warranty. Each of the parties hereto acknowledges that,
except as in this Amendment Agreement otherwise expressly stated, no
representation, warranties or commitments, express or implied, have been made
by any other party to the other. None of the terms or conditions of this
Amendment Agreement may be changed, modified, waived or canceled orally or
otherwise, except by writing, signed by all the parties hereto, specifying such
change, modification, waiver or cancellation of such terms or conditions, or of
any preceding or succeeding breach thereof.
Except as hereby specifically amended, modified or supplemented, the
Agreement and all of the other Loan Documents are hereby confirmed and ratified
in all respects and shall remain in full force and effect according to their
respective terms.
IN WITNESS WHEREOF, the parties hereto have caused this Amendment
Agreement to by duly executed by their duly authorized officers, all as of the
day and year first above written.
BORROWER:
WILLCOX & GIBBS, INC.
By: /s/ Eric Pierson
-------------------------------------
Name: Eric Pierson
Title: Treasurer
<PAGE>
GUARANTORS:
CALCON ELECTRIC SUPPLY, INC.
C.E.S. INDUSTRIES, INC.
CLARK CONSOLIDATED INDUSTRIES, INC.
CONSOLIDATED ELECTRIC SUPPLY, INC.
DUELLMAN ELECTRIC SUPPLY COMPANY
ELGEE ELECTRIC SUPPLY CO., INC.
ENGINEERED APPAREL CONCEPTS, INC.
ROBIN SERVICE CORP.
THE SACKS ELECTRICAL SUPPLY CO.
SEACO ELECTRICAL SUPPLIES, INC.
SOUTHERN ELECTRIC SUPPLY COMPANY, INC.
W&G EXPORT CORPORATION
WILLCOX & GIBBS DN, INC.
WILLCOX & GIBBS DS, INC.
WILLCOX & GIBBS OF ALABAMA, INC.
SUMMER GROUP, INC.
By: /s/ Stephen M. Hitt
-------------------------------------
Name: Steven M. Hitt
Title: Vice President
<PAGE>
NATIONSBANK OF FLORIDA, NATIONAL
ASSOCIATION, as Agent and as Lender
By: /s/ Stephen Hanas
-------------------------------------
Name: Stephen Hanas
Title: Vice President
<PAGE>
1301 Avenue of the Americas CREDIT LYONNAIS NEW YORK BRANCH
New York, New York 10019 Individually and as Co-Agent
ATTN: European Group
By: /s/ Xavier Roux
-------------------------------------
Title: First Vice President
c/o Credit Lyonnais CREDIT LYONNAIS CAYMAN ISLAND BRANCH,
New York Branch as Lender
1301 Avenue of the Americas
New York, New York 10019
ATTN: European Group
By: /s/ Xavier Roux
-------------------------------------
Title: First Vice President
<PAGE>
EXHIBIT A
Applicable Commitment Percentages
----------------------------------
Applicable
Lender Committed Amount Commitment Percentage
- ------ ---------------- ---------------------
NationsBank of Florida $26,000,000 65%
National Association
Credit Lyonnais 14,000,000 35%
----------- -----
$40,000,000 100%
Exhibit 11.1
WILLCOX & GIBBS, INC. AND SUBSIDIARIES
COMPUTATION OF NET INCOME PER COMMON AND COMMON EQUIVALENT SHARE
(000's Omitted, Except Per Share Amounts)
<TABLE>
<CAPTION>
THREE MONTHS
ENDED
MARCH 31,
------------------------
1995 1994
------ ------
<S> <C> <C>
Income Applicable To Primary Common And Common
Equivalent Shares
Income From Continuing Operations $4,230 $1,733
Discontinued Operations - 232
------- -------
Net Income $4,230 $1,965
======= =======
Income Applicable To Fully Diluted
Common And Common Equivalent Shares
Income From Continuing Operations $4,230 $1,733
Interest Reduction, Net of Taxes,
Upon Conversion Of Convertible
Subordinated Debentures 490 490
------- -------
Income From Continuing Operations 4,720 2,223
Discontinued Operations _ 232
------- -------
Net Income $4,720 $2,455
======= =======
Primary Shares:
Weighted Average Number Of Common Shares And
Common Share Equivalents Outstanding During The
Period:
Common (Net Of Treasury Shares) 24,114 22,111
Options 39 80
------- -------
Total 24,153 22,191
======= =======
</TABLE>
<PAGE>
Exhibit 11.1
(continued)
<TABLE>
<CAPTION>
<S> <C> <C>
Fully Diluted Shares:
Weighted Average Number Of Common Shares And
Common Share Equivalents Outstanding During
The Period:
Common (Net Of Treasury Shares) 24,114 22,111
Options 39 80
Conversion Of Subordinated Debentures 5,225 5,225
------- -------
Total 29,378 27,416
======= =======
Primary
Income From Continuing Operations $ 0.18 $ 0.08
Discontinued Operations - 0.01
------- -------
Net Income $ 0.18 $ 0.09
======= =======
Fully Diluted
Income From Continuing Operations $ 0.16 $ 0.08
Discounted Operations - 0.01
------- -------
Net Income $ 0.16 $ 0.09
======= =======
</TABLE>
Exhibit 15.1
Securities and Exchange Commission
450 Fifth Street, N.W.
Washington, D.C. 20549
RE: WILLCOX & GIBBS, INC. REGISTRATION ON FORM S-8
We are aware that our report dated April 14, 1995 on our review of the
condensed consolidated balance sheet of Willcox & Gibbs, Inc. as of March 31,
1995, and the related condensed consolidated statements of income and cash
flows for the three-month periods ended March 31, 1995 and 1994 included in the
Company's Form 10-Q for the quarter ended March 31, 1995 is incorporated by
reference in Registration Nos. 33-4584, 33-14148 and 33-32648 on Form S-8.
Pursuant to Rule 436(e) under the Securities Act of 1933, this report should
not be considered a part of such registration statements within the meaning of
Sections 7 and 11 of the Act.
Coopers & Lybrand L.L.P.
Miami, Florida
April 14, 1995
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
The schedule contains summary financial information extracted from
Willcox & Gibbs, Inc. Form 10-Q for the three months ended March 31,
1995 and is qualified in its entirety by reference to such financial
statements.
</LEGEND>
<MULTIPLIER> 1,000
<S> <C>
<PERIOD-TYPE> 3-MOS
<FISCAL-YEAR-END> DEC-31-1994
<PERIOD-END> MAR-31-1995
<CASH> 17,174
<SECURITIES> 0
<RECEIVABLES> 150,073
<ALLOWANCES> 3,830
<INVENTORY> 110,949
<CURRENT-ASSETS> 283,708
<PP&E> 71,275
<DEPRECIATION> 20,634
<TOTAL-ASSETS> 404,063
<CURRENT-LIABILITIES> 173,404
<BONDS> 87,469
<COMMON> 24,705
0
0
<OTHER-SE> 110,977
<TOTAL-LIABILITY-AND-EQUITY> 404,063
<SALES> 278,828
<TOTAL-REVENUES> 278,828
<CGS> 223,512
<TOTAL-COSTS> 223,512
<OTHER-EXPENSES> 0
<LOSS-PROVISION> 115
<INTEREST-EXPENSE> 2,410
<INCOME-PRETAX> 7,553
<INCOME-TAX> 3,323
<INCOME-CONTINUING> 4,230
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 4,230
<EPS-PRIMARY> .18
<EPS-DILUTED> .16
</TABLE>
