<PAGE> 1
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 June 30, 2000.
[ ] Transition Report pursuant to Section 13 or 15(d) of the Securities
Exchange Act of 1934
For the transition period from __________________ to _________________
<TABLE>
<S> <C>
Commission File Number 333-71397
------------------------------------------------------------------------------------------
TransDigm Inc., TransDigm Holding Company, Marathon Power Technologies Company, ZMP, Inc.,
----------------------------------------------------------------------------------------------------------------
Adams Rite Aerospace, Inc., and Christie Electric Corp.
----------------------------------------------------------------------------------------------------------------
(Exact name of co-registrants as specified in their respective charters)
Delaware 13-3733378
----------------------------------------------------------------------------------------------------------------
(State or other Jurisdiction of incorporation or organization) (I.R.S. Employer Identification No.)
26380 Curtiss Wright Parkway, Richmond Heights, Ohio 44143
----------------------------------------------------------------------------------------------------------------
(Address of principal executive offices) (Zip Code)
(216) 289-4939
----------------------------------------------------------------------------------------------------------------
(Registrant's telephone number, including area code)
----------------------------------------------------------------------------------------------------------------
(Former name, former address and former fiscal year, if changed since last report.)
Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or
15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that
the registrant was required to file such reports), and (2) has been subject to such filing requirements for the
past 90 days.
YES X No ___
----
Indicate the number of shares outstanding of each of the issuer's classes of common stock, as of the latest
practicable date.
Common Stock (Voting) of TransDigm Holding Company,
$0.01 Par Value 121,720
---------------------------------------------------------------- --------------------------------------
(Class) (Outstanding at June 30, 2000)
Class A Common Stock (Non-Voting) of
TransDigm Holding Company, $0.01 Par Value -0-
---------------------------------------------------------------- --------------------------------------
(Class) (Outstanding at June 30, 2000)
All of the outstanding capital stock of TransDigm Inc. is held by TransDigm Holding Company.
</TABLE>
<PAGE> 2
INDEX
<TABLE>
<CAPTION>
PAGE
<S> <C>
PART I FINANCIAL INFORMATION
Item 1 Financial Statements
Consolidated Balance Sheets - June 30, 2000 and
September 30, 1999 1
Consolidated Statements of Operations - Thirteen and Thirty-Nine Weeks
Ended June 30, 2000 and July 2, 1999 2
Consolidated Statement of Changes in Stockholders' Equity (Deficiency) -
Thirty-Nine Weeks Ended June 30, 2000 3
Consolidated Statements of Cash Flows - Thirty-Nine Weeks
Ended June 30, 2000 and July 2, 1999 4
Notes to Consolidated Financial Statements 5-8
Item 2 Management's Discussion and Analysis of Financial Condition
and Results of Operations 9-14
Item 3 Quantitative and Qualitative Disclosure About Market Risk 15
PART II: OTHER INFORMATION
Item 6 Exhibits and Reports on Form 8-K 16
SIGNATURES 17-23
EXHIBIT INDEX 24
</TABLE>
<PAGE> 3
PART I: FINANCIAL INFORMATION
ITEM 1
TRANSDIGM HOLDING COMPANY
CONSOLIDATED BALANCE SHEETS
(IN THOUSANDS OF DOLLARS)
--------------------------------------------------------------------------------
<TABLE>
<CAPTION>
<S> <C> <C>
JUNE 30,
2000 SEPTEMBER 30,
ASSETS (UNAUDITED) 1999
CURRENT ASSETS:
Cash and cash equivalents $ 2,796 $ 2,729
Accounts receivable, net 24,754 22,399
Inventories 33,824 29,217
Income taxes refundable 593 2,810
Deferred income taxes and other 9,057 7,012
--------- ---------
Total current assets 71,024 64,167
PROPERTY, PLANT AND EQUIPMENT - Net 25,227 25,422
INTANGIBLE ASSETS - Net 57,933 58,555
DEBT ISSUE COSTS - Net 9,915 10,951
DEFERRED INCOME TAXES AND OTHER 5,443 5,322
--------- ---------
TOTAL $ 169,542 $ 164,417
========= =========
LIABILITIES AND STOCKHOLDERS' EQUITY (DEFICIENCY)
CURRENT LIABILITIES:
Current portion of long-term debt $ 14,075 $ 7,595
Accounts payable 6,073 5,322
Accrued liabilities 12,772 15,719
--------- ---------
Total current liabilities 32,920 28,636
LONG-TERM DEBT - Less current portion 252,687 258,962
NON-CURRENT PORTION OF ACCRUED PENSION
COSTS AND OTHER 3,122 3,118
--------- ---------
Total liabilities 288,729 290,716
--------- ---------
COMMITMENTS AND CONTINGENCIES -- --
--------- ---------
REDEEMABLE COMMON STOCK 670 1,323
--------- ---------
STOCKHOLDERS' EQUITY (DEFICIENCY):
Common stock 102,482 102,097
Retained deficit (221,837) (229,237)
Accumulated other comprehensive loss (502) (482)
--------- ---------
Total stockholders' deficiency (119,857) (127,622)
--------- ---------
TOTAL $ 169,542 $ 164,417
========= =========
</TABLE>
See notes to consolidated financial statements.
- 1 -
<PAGE> 4
TRANSDIGM HOLDING COMPANY
CONSOLIDATED STATEMENTS OF OPERATIONS
FOR THE THIRTEEN AND THIRTY-NINE WEEKS
ENDED JUNE 30, 2000 AND JULY 2, 1999
(IN THOUSANDS OF DOLLARS)
(UNAUDITED)
--------------------------------------------------------------------------------
<TABLE>
<CAPTION>
THIRTEEN WEEKS THIRTY-NINE WEEKS
------------------------ -------------------------
JUNE 30, JULY 2, JUNE 30, JULY 2,
2000 1999 2000 1999
<S> <C> <C> <C> <C>
NET SALES $ 40,233 $ 36,438 $ 110,401 $ 95,761
COST OF SALES 22,054 19,750 60,014 50,680
--------- --------- --------- ---------
GROSS PROFIT 18,179 16,688 50,387 45,081
--------- --------- --------- ---------
OPERATING EXPENSES:
Selling and administrative 4,249 3,993 12,440 9,405
Amortization of intangibles 447 563 1,394 1,462
Research and development 505 631 1,477 1,645
Merger expenses 352 40,063
--------- --------- --------- ---------
Total operating expenses 5,201 5,539 15,311 52,575
--------- --------- --------- ---------
INCOME (LOSS) FROM OPERATIONS 12,978 11,149 35,076 (7,494)
INTEREST EXPENSE - Net 7,292 7,128 21,417 15,951
--------- --------- --------- ---------
INCOME (LOSS) BEFORE
INCOME TAXES 5,686 4,021 13,659 (23,445)
INCOME TAX PROVISON (BENEFIT) 2,257 1,585 5,413 (4,015)
--------- --------- --------- ---------
NET INCOME (LOSS) $ 3,429 $ 2,436 $ 8,246 $ (19,430)
========= ========= ========= =========
</TABLE>
See notes to consolidated financial statements.
- 2 -
<PAGE> 5
TRANSDIGM HOLDING COMPANY
CONSOLIDATED STATEMENT OF CHANGES IN
STOCKHOLDERS' EQUITY (DEFICIENCY)
FOR THE THIRTY-NINE WEEKS ENDED JUNE 30, 2000
(IN THOUSANDS OF DOLLARS)
(UNAUDITED)
--------------------------------------------------------------------------------
<TABLE>
<CAPTION>
ACCUMULATED
RETAINED OTHER
COMMON EARNINGS COMPREHENSIVE
STOCK (DEFICIT) LOSS TOTAL
<S> <C> <C> <C> <C>
BALANCE, OCTOBER 1, 1999 $ 102,097 $(229,237) $ (482) $(127,622)
NET INCOME 8,246 8,246
PURCHASE OF COMMON STOCK (77) (77)
EXERCISE OF STOCK OPTIONS 162 162
INCOME TAX BENEFIT FROM
EXERCISE OF STOCK OPTIONS
AND PURCHASE OF COMMON
STOCK 300 300
ACCRETION OF REDEEMABLE
COMMON STOCK (846) (846)
OTHER COMPREHENSIVE LOSS (20) (20)
--------- --------- ------- ---------
BALANCE, JUNE 30, 2000 $ 102,482 $(221,837) $ (502) $(119,857)
========= ========= ======= =========
</TABLE>
See notes to consolidated financial statements.
- 3 -
<PAGE> 6
TRANSDIGM HOLDING COMPANY
CONSOLIDATED STATEMENTS OF CASH FLOWS
FOR THE THIRTY-NINE WEEKS ENDED JUNE 30, 2000 AND JULY 2, 1999
(IN THOUSANDS OF DOLLARS)
(UNAUDITED)
--------------------------------------------------------------------------------
<TABLE>
<CAPTION>
THIRTY-NINE WEEKS
--------------------------
JUNE 30, JULY 2,
2000 1999
<S> <C> <C>
OPERATING ACTIVITIES:
Net income (loss) $ 8,246 $ (19,430)
Adjustments to reconcile net income (loss) to net cash
provided by (used in) operating activities:
Depreciation 3,354 3,002
Amortization of intangibles 1,394 1,462
Amortization of debt issue costs 1,036 1,547
Interest deferral on Holdings PIK Notes 1,940 1,400
Changes in assets and liabilities,
net of effects from acquisition of business:
Accounts receivable (1,928) (7,468)
Inventories (3,272) 215
Refundable income taxes 2,526 (4,763)
Prepaid expenses and other assets (203) (178)
Accounts payable 592 33
Accrued liabilities (4,791) (934)
--------- ---------
Net cash provided by (used in) operating activities 8,894 (25,114)
--------- ---------
INVESTING ACTIVITIES:
Capital expenditures (3,038) (2,604)
Acquisition of Christie Electric Corp. (2,500)
Acquisition of ZMP, Inc. (41,556)
--------- ---------
Net cash used in investing activities (5,538) (44,160)
--------- ---------
FINANCING ACTIVITIES:
Proceeds from subordinated notes, net of fees of $6,808 118,192
Proceeds from new credit facility, net of fees of $5,369 118,639
Proceeds from Holdings PIK Notes and common stock,
net of fees of $341 19,659
Payment of consideration in recapitalization -
common stock and warrants (263,875)
Net borrowings under revolving credit loans 4,000 2,250
Repayment of term loans (5,735) (45,000)
Proceeds from issuance of common stock 22 100,677
Purchase of common stock, including redeemable common stock (1,576) (28)
--------- ---------
Net cash provided by (used in) financing activities (3,289) 50,514
--------- ---------
INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS 67 (18,760)
CASH AND CASH EQUIVALENTS, BEGINNING OF PERIOD 2,729 19,486
--------- ---------
CASH AND CASH EQUIVALENTS, END OF PERIOD $ 2,796 $ 726
========= =========
SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION:
Cash paid during the period for interest $ 21,270 $ 13,152
========= =========
Cash paid during the period for income taxes $ 2,889 $ 1,172
========= =========
</TABLE>
See notes to consolidated financial statements.
- 4 -
<PAGE> 7
TRANSDIGM HOLDING COMPANY
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
THIRTEEN AND THIRTY-NINE WEEKS ENDED JUNE 30, 2000 AND JULY 2, 1999
--------------------------------------------------------------------------------
1. DESCRIPTION OF THE BUSINESS AND MERGER
TransDigm Holding Company ("Holdings"), through its wholly-owned
operating subsidiary, TransDigm Inc. ("TransDigm"), is a premier
supplier of proprietary mechanical components servicing predominantly
the aircraft industry. TransDigm, along with its wholly-owned
subsidiaries, Marathon Power Technologies Company ("Marathon"), ZMP,
Inc. ("ZMP"), Adams Rite Aerospace, Inc., ("Adams Rite") and Christie
Electric Corp. ("Christie") (collectively, the "Company"), offers a
broad line of component products including tube connectors, valves,
batteries, static inverters, pumps, quick disconnects, clamps, ball
bearing and sliding controls, mechanical hardware, fluid controls,
lavatory hardware, electromechanical controls, and oxygen systems
related products.
On December 3, 1998, Phase II Acquisition Corp. ("Acquiror"), an entity
formed by affiliates of Odyssey Investment Partners, LP ("Odyssey"),
and Holdings consummated a definitive agreement and plan of merger (the
"Merger Agreement" or the "Merger"). Pursuant to the terms of the
Merger, Acquiror was merged with and into Holdings, with Holdings being
the surviving corporation in the Merger (the "Surviving Corporation").
In the Merger, owners of Holdings' outstanding common stock received,
in exchange for each outstanding share of common stock (except for
shares held directly or indirectly by Holdings or the Rolled Shares, as
defined below), the "Per Share Merger Consideration," as defined in the
Merger Agreement. The aggregate consideration payable pursuant to the
Merger, including amounts payable to holders of options and warrants,
was approximately $299.7 million.
In connection with the Merger, Kelso Investment Associates IV, LP and
Kelso Equity Partners II, LP (collectively, "Kelso") retained
approximately 15.4 percent of the Surviving Corporation's outstanding
common stock (the "Rolled Shares"). In addition, certain members of
management of Holdings agreed, in connection with and as a condition to
entering into the Merger Agreement, to rollover stock options with an
estimated gross and net value of approximately $17.2 million and $13.7
million, respectively. The Merger was treated as a Recapitalization
(the "Recapitalization") for financial reporting purposes, which had no
impact on the historical basis of Holdings' consolidated assets and
liabilities.
Simultaneously with the Merger, Holdings and TransDigm refinanced all
of their existing debt. The Merger, the refinancing, and payment of
fees and expenses were funded by (i) existing cash balances, (ii)
investments by Odyssey of $100.2 million, (iii) funds from a new $120
million Senior Credit Facility, (iv) funds from $125 million Senior
Subordinated Notes and (v) Holdings PIK Notes of $20 million issued to
certain stockholders. The Senior Credit Facility was subsequently
increased to $154 million in connection with the acquisition of ZMP and
Adams Rite (see Note 3).
In connection with the Merger, the Company incurred a one-time charge
of approximately $40 million during the thirty-nine weeks ended July 2,
1999, consisting primarily of compensation costs recognized as a result
of the cancellation of certain stock options, the costs of terminating
a financial advisory services agreement, the write-off of deferred
financing costs and professional advisory fees.
Separate financial statements of TransDigm are not presented since the
Senior Subordinated Notes are guaranteed by Holdings and all direct and
indirect subsidiaries of TransDigm and since Holdings has no operations
or assets separate from its investment in TransDigm.
- 5 -
<PAGE> 8
2. UNAUDITED FINANCIAL INFORMATION
Except for the September 30, 1999 consolidated balance sheet, which was
derived from the Company's audited financial statements, the financial
information included herein is unaudited; however, the information
reflects all adjustments (consisting solely of normal recurring
adjustments) that are, in the opinion of management, necessary for a
fair presentation of the Company's financial position and results of
operations and cash flows for the interim periods presented. The
results of operations for the thirteen and thirty-nine weeks ended June
30, 2000 are not necessarily indicative of the results to be expected
for the full year.
3. ACQUISITIONS
ZMP AND ADAMS RITE - On April 23, 1999, TransDigm acquired all of the
outstanding common stock of ZMP, Inc., the corporate parent of Adams
Rite, through a merger. Adams Rite manufactures mechanical hardware,
fluid controls, lavatory hardware, electromechanical controls and
oxygen systems related products. The purchase price for the acquisition
was $41 million, subject to adjustment for changes in working capital
and other matters as defined in the merger agreement. The acquisition
was funded through $36 million of additional borrowings under the
Company's credit facility and the use of approximately $5 million of
the Company's cash balances. As a result of the acquisition, ZMP and
Adams Rite became wholly-owned subsidiaries of TransDigm.
The Company accounted for the acquisition as a purchase and included
the results of operations of the acquired companies in the fiscal 1999
consolidated financial statements from the effective date of the
acquisition. The purchase price was allocated based on a preliminary
determination of estimated fair values at the date of the acquisition.
Goodwill representing the excess of the purchase price over assets
acquired of $25.5 million is being amortized on a straight-line basis
over forty years.
The following table summarizes the unaudited, consolidated pro-forma
results of operations, as if the acquisition had occurred at the
beginning of the thirty-nine weeks ended July 2, 1999 (in thousands):
Net sales $ 116,567
Operating loss (9,560)
Net loss (22,070)
The consolidated pro-forma operating loss for the thirty-nine week
period ended July 2, 1999 includes the following charges recognized by
Adams Rite prior to the acquisition: (1) $1.4 million ($.84 million
after tax) for compensation expense recognized in connection with a
common stock warrant granted to its former chief executive officer and
(2) $.8 million ($.8 million after tax) for costs directly related to
the acquisition.
This pro-forma information is not necessarily indicative of the results
that actually would have been obtained if the operations had been
combined as of the beginning of the period presented and is not
intended to be a projection of future results.
CHRISTIE - On March 8, 2000, Marathon acquired all of the issued and
outstanding common shares of Christie Electric Corp. for $2.5 million.
The Company accounted for the acquisition as a purchase and included
the results of operations of Christie in its fiscal 2000 consolidated
financial statements from the effective date of the acquisition.
Goodwill of $1.9 million, which resulted from the acquisition, is being
amortized on a straight-line basis over forty years.
Pro-forma net sales and results of operations for this acquisition, had
the acquisition occurred at the beginning of the thirteen and
thirty-nine weeks ended June 30, 2000 and July 2, 1999, are not
significant, and accordingly, are not provided.
- 6 -
<PAGE> 9
4. INVENTORIES
Inventories are stated at the lower of cost or market. Cost of
inventories is determined by the average cost and the first-in,
first-out (FIFO) methods. Inventories consist of the following (in
thousands):
JUNE 30, SEPTEMBER 30,
2000 1999
Work-in-progress and finished goods $ 31,278 $ 28,846
Raw materials and purchased component parts 9,525 7,481
-------- --------
Total 40,803 36,327
Reserve for excess and obsolete inventory (6,979) (7,110)
-------- --------
Inventories - net $ 33,824 $ 29,217
======== ========
5. INCOME TAXES
Income tax expense (benefit) as a percentage of income (loss) before
income taxes was 39.6 percent for the thirty-nine weeks ended June 30,
2000 compared to (17.1) percent for the thirty-nine weeks ended July 2,
1999. The tax benefit recorded for the thirty-nine weeks ended July 2,
1999 was significantly impacted by the non-deductible expenses incurred
in connection with the Recapitalization.
6. REDEEMABLE COMMON STOCK
The redeemable common stock represents the estimated value of common
stock held by management shareholders that have certain put rights.
7. CONTINGENCIES
ENVIRONMENTAL - The soil and groundwater beneath the Company's facility
in Waco, Texas has been impacted by releases of hazardous materials.
The resulting contaminants of concern have been delineated and
characterized. Because the majority of these contaminants are presently
below action levels prescribed by the Texas Natural Resources
Conservation Commission ("TNRCC"), and because an escrow was previously
funded to cover the cost of remediation that TNRCC might require for
those contaminants currently in excess of action limits, the Company
does not believe the condition of the soil and groundwater at the Waco
facility will require incurrence of material expenditures; however,
there can be no assurance that additional contamination will not be
discovered or that the remediation required by TNRCC will not be
material to the financial condition, results of operations, or cash
flows of the Company.
OTHER - During the ordinary course of business, the Company is from
time to time threatened with, or may become a party to, legal actions
and other proceedings. The Company believes that its potential exposure
to such legal actions is adequately covered by its aviation product and
general liability insurance.
- 7 -
<PAGE> 10
8. NEW ACCOUNTING STANDARD
In June 1998, the Financial Accounting Standards Board issued Statement
No. 133, "Accounting for Derivative Instruments and Hedging
Activities." 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. If certain conditions are met, a derivative may be specifically
designated as (a) a hedge of the exposure to changes in the fair value
of a recognized asset or liability or an unrecognized firm commitment;
(b) a hedge of the exposure to variable cash flows of a forecasted
transaction; or (c) a hedge of the foreign currency exposure of a net
investment in a foreign operation, an unrecognized firm commitment, an
available-for-sale security, or a foreign-currency-denominated
forecasted transaction. The Company will adopt this standard during
fiscal 2001.
While management has not completed its analysis of this new accounting
standard, its adoption is not expected to have a material effect on the
Company's financial statements.
* * * * * *
- 8 -
<PAGE> 11
PART I: FINANCIAL INFORMATION
ITEM 2
MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF
OPERATIONS
This Quarterly Statement includes "forward-looking statements" within the
meaning of Section 27A of the Securities Act and Section 21E of the Securities
Exchange Act of 1934, as amended, including, in particular, the statements about
our plans, strategies and prospects under this "Management's Discussion and
Analysis of Financial Condition and Results of Operations" section. Although the
Company believes that its plans, intentions and expectations reflected in or
suggested by such forward-looking statements are reasonable, the Company can
give no assurance that such plans, intentions or expectations will be achieved.
Important factors that could cause actual results to differ materially from the
forward-looking statements made in this Quarterly Statement are set forth herein
as well as under the caption "Risk Factors" in the Registration Statement filed
by the Company on Form S-4 on January 29, 1999, as amended through April 23,
1999. All forward-looking statements attributable to the Company or persons
acting on its behalf are expressly qualified in their entirety by those
cautionary statements.
OVERVIEW
The Company is a leading supplier of highly engineered aircraft components for
use on nearly all commercial and military aircraft. The Company sells its
products to commercial airlines and aircraft maintenance facilities in the
aftermarket, to most original equipment manufacturers ("OEMs") of aircraft and
to various agencies of the United States government. Sales of the Company's
products are made directly to these organizations as well as through U.S. and
international distributors who maintain inventories throughout the world of
products purchased from the Company and others.
In connection with the Recapitalization discussed in Note 1 to the consolidated
financial statements, including the financing and the application of the
proceeds thereof, the Company incurred certain nonrecurring costs and charges,
consisting primarily of compensation costs for management bonuses and stock
options that were canceled in conjunction with the Recapitalization, the cost of
terminating a financial advisory services agreement with an affiliate of one of
the Company's stockholders, the write-off of deferred financing costs, and
professional, advisory and financing fees. A one-time charge of approximately
$40 million ($29 million after tax) was recorded during the thirty-nine weeks
ended July 2, 1999. Because the cash costs included in this charge were funded
principally through the proceeds of the subordinated notes and borrowings under
the new Senior Credit Facility, this cost did not materially impact the
Company's liquidity, ongoing operations or market position. For a discussion of
the consequences of the incurrence of indebtedness in connection with the
Recapitalization, see the heading "Liquidity and Capital Resources" in this
section.
On April 23, 1999, the Company acquired ZMP, Inc. under the terms of an
agreement and plan of reorganization dated March 31, 1999. The purchase price
for the acquisition of ZMP was $41 million, subject to post-closing purchase
price adjustments. The acquisition of ZMP and the related expenses were funded
through $36 million of additional borrowings under the Company's Senior Credit
Facility and the use of $5 million of the Company's cash balances. Adams Rite is
a well established supplier of highly engineered aircraft components that
complements the businesses of AdelWiggins, AeroControlex and Marathon. Through
the acquisition of ZMP, the Company acquired four additional major product lines
of Adams Rite consisting of mechanical hardware, fluid control products,
electromechanical control products and oxygen system related products.
On March 8, 2000, Marathon acquired Christie Electric Corp. for $2.5 million.
Christie is a well established supplier of battery charging and analyzing
equipment, complete battery management systems and power supplies. The product
lines of Christie are a complement to Marathon's business.
The following is management's discussion and analysis of certain significant
factors that have affected the Company's financial position and operating
results during the periods included in the accompanying consolidated financial
statements. The Company's fiscal year ends on September 30.
- 9 -
<PAGE> 12
RESULTS OF OPERATIONS
The following table sets forth, for the periods indicated, certain operating
data of the Company as a percentage of net sales.
<TABLE>
<CAPTION>
THIRTEEN WEEKS ENDED THIRTY-NINE WEEKS ENDED
-------------------- -----------------------
JUNE 30, JULY 2, JUNE 30, JULY 2,
2000 1999 2000 1999
<S> <C> <C> <C> <C>
Net sales 100% 100% 100% 100%
---- ---- ---- ----
Gross profit 45 46 45 47
Selling and administrative 11 11 11 10
Amortization of intangibles 1 2 1 2
Research and development 1 2 1 2
Merger expenses -- 1 -- 41
---- ---- ---- ----
Operating income (loss) 32 30 32 (8)
Interest expense- net 18 20 19 16
Provision (benefit) for income taxes 6 4 5 (4)
---- ---- ---- ----
Net income (loss) 8% 6% 8% (20)%
==== ==== ==== ====
</TABLE>
CHANGES IN RESULTS OF OPERATIONS
THIRTEEN WEEKS ENDED JUNE 30, 2000 COMPARED WITH THIRTEEN WEEKS ENDED JULY 2,
1999.
- NET SALES. Net sales increased by $3.8 million, or 10.4 percent, to $40.2
million for the quarter ended June 30, 2000 from $36.4 million for the
comparable quarter last year, principally due to the acquisition of ZMP in
the prior year.
- GROSS PROFIT. Gross profit (net sales less cost of sales) increased by $1.5
million, or 9.0 percent, to $18.2 million for the quarter ended June 30,
2000 from $16.7 million from the comparable quarter last year. This
increase is attributable to the higher sales discussed above. Gross profit
as a percentage of net sales was 45 percent during the third quarter of
fiscal 2000 and 46 percent during the third quarter of fiscal 1999.
- SELLING AND ADMINISTRATIVE. Selling and administrative expenses increased
by $0.2 million, or 5.0 percent, to $4.2 million for the quarter ended June
30, 2000 from $4.0 million for the quarter ended July 2, 1999. This
increase principally resulted from the acquisition of ZMP and the Company's
increased efforts to develop new business. Selling and administrative
expenses as a percentage of net sales was 11.0 percent for the quarters
ended July 2, 1999 and June 30, 2000.
- AMORTIZATION OF INTANGIBLES. Amortization of intangibles decreased by $0.2
million, or 33.3 percent, to $0.4 million for the quarter ended June 30,
2000 from $0.6 million for the quarter ended July 2, 1999. This decrease is
the result of certain intangibles being fully amortized.
- RESEARCH AND DEVELOPMENT. Research and development expense decreased by
$0.1 million, or 16.7 percent, to $0.5 million for the quarter ended June
30, 2000 from $0.6 million for the quarter ended July 2, 1999. Research and
development expense, as a percentage of net sales, was 1.0 percent for the
quarter ended June 30, 2000 and 2.0 percent for the quarter ended July 2,
1999.
- MERGER EXPENSES. Additional merger costs totaling $.4 million were incurred
during the third quarter of fiscal 1999 in connection with the Merger and
Recapitalization.
- 10 -
<PAGE> 13
- OPERATING INCOME. Operating income increased by $1.9 million, or 17.1
percent, to $13.0 million for the third quarter of fiscal 2000 from $11.1
million for the third quarter of fiscal 1999 due to the factors described
previously.
- INTEREST EXPENSE. Interest expense increased by $0.2 million, or 2.8
percent, to $7.3 million for the third quarter of fiscal 2000 from $7.1
million for the third quarter of fiscal 1999 as a result of an increase in
the average level of outstanding borrowings in connection with the
acquisition of ZMP.
- INCOME TAXES. Income tax expense as a percentage of income before income
taxes was 39.7 percent for the thirteen weeks ended June 30, 2000 compared
to 39.4 percent for the thirteen weeks ended July 2, 1999.
- NET INCOME (LOSS). The Company earned $3.4 million for the third quarter of
fiscal 2000 compared to $2.4 million earned for the third quarter of fiscal
1999 primarily as a result of the factors referred to above.
THIRTY-NINE WEEKS ENDED JUNE 30, 2000 COMPARED WITH THIRTY-NINE WEEKS ENDED JULY
2, 1999.
- NET SALES. Net sales increased by $14.6 million, or 15.2 percent, to $110.4
million for the thirty-nine weeks ended June 30, 2000 from $95.8 million
for the comparable thirty-nine weeks last year, principally due to the
acquisition of ZMP, partially offset by a decline in net sales at other
Company locations as a result of reduced production volumes in commercial
jet transport products as well as inventory reductions at both the OEMs and
in the aftermarket. Revenue passenger miles continue to grow; this leads us
to believe the aftermarket softness is not a long-term phenomenon.
- GROSS PROFIT. Gross profit (net sales less cost of sales) increased by $5.3
million, or 11.7 percent, to $50.4 million for the thirty-nine weeks ended
June 30, 2000 from $45.1 million for the comparable thirty-nine weeks last
year. This increase is attributable to the higher sales discussed above.
Gross profit as a percentage of net sales was 45.0 percent during the
thirty-nine weeks ended June 30, 2000 and 47.0 percent during the
thirty-nine weeks ended July 2, 1999.
- SELLING AND ADMINISTRATIVE. Selling and administrative expenses increased
by $3.0 million, or 31.9 percent, to $12.4 million for the thirty-nine
weeks ended June 30, 2000 from $9.4 million for the thirty-nine weeks ended
July 2, 1999. This increase principally resulted from the acquisition of
ZMP discussed previously as well as the Company's increased efforts to
develop new business. Selling and administrative expenses as a percentage
of net sales increased from 10.0 percent for the thirty-nine weeks ended
July 2, 1999 to 11.0 percent for the thirty-nine weeks ended June 30, 2000.
- AMORTIZATION OF INTANGIBLES. Amortization of intangibles decreased by $.1
million or 6.7 percent to $1.4 million for the thirty-nine weeks ended
June 30, 2000 from $1.5 million for the thirty-nine weeks ended
July 2, 1999.
- RESEARCH AND DEVELOPMENT. Research and development expense decreased by
$0.1 million, or 6.3 percent, to $1.5 million for the thirty-nine weeks
ended June 30, 2000 from $1.6 million for the thirty-nine weeks ended July
2, 1999. Research and development expense, as a percentage of net sales,
decreased from 2.0 percent for the thirty-nine weeks ended July 2, 1999 to
1 percent for the thirty-nine weeks ended June 30, 2000.
- 11 -
<PAGE> 14
- MERGER EXPENSES. Merger costs totaling $40.1 million were incurred during
the thirty-nine weeks ended July 2, 1999 in connection with the Merger and
Recapitalization. The nature of the merger-related charges is detailed
below:
(IN THOUSANDS)
Compensation expense on stock options $19,437
Management bonuses 6,450
Termination of financial advisory services agreement 5,850
Professional fees and expenses 7,201
Write-off of deferred financing costs 552
Other 573
-------
Total $40,063
=======
- OPERATING INCOME (LOSS). Operating income increased from a $7.5 million
loss for the thirty-nine weeks ended July 2, 1999 to income of $35.1
million for the thirty-nine weeks ended June 30, 2000. Operating income,
excluding merger expenses, increased by $2.5 million, or 7.7 percent. This
increase was primarily attributable to the acquisition of ZMP partially
offset by the decline in sales volume at other Company locations.
- INTEREST EXPENSE. Interest expense increased by $5.4 million to $21.4
million for the thirty-nine weeks ended June 30, 2000 from $16.0 million
for the thirty-nine weeks ended July 2, 1999 as a result of the increase in
the average level of outstanding borrowings in connection with the
Recapitalization and acquisition of ZMP.
- INCOME TAXES. Income tax expense (benefit) as a percentage of income (loss)
before income taxes was 39.6 percent for the thirty-nine weeks ended June
30, 2000 compared to (17.1) percent for the thirty-nine weeks ended July 2,
1999. The tax benefit recorded for the thirty-nine weeks ended July 2, 1999
was significantly impacted by the non-deductible expenses incurred in
connection with the Recapitalization.
- NET INCOME (LOSS). The Company earned $8.2 million for the thirty-nine
weeks ended June 30, 2000 compared to a net loss of $19.4 million for the
thirty-nine weeks ended July 2, 1999 primarily as a result of the factors
referred to above.
BACKLOG
Management believes that sales order backlog (i.e., orders for products that
have not yet been shipped) is a useful indicator of sales to OEMs. As of June
30, 2000, the Company estimated its sales order backlog at $71.9 million
compared to an estimated $61.6 million as of July 2, 1999. The majority of the
purchase orders outstanding as of June 30, 2000 are scheduled for delivery
within the next twelve months. Purchase orders are generally subject to
cancellation by the customer prior to shipment. The level of unfilled purchase
orders at any given date during the year will be materially affected by the
timing of the Company's receipt of purchase orders and the speed with which
those orders are filled. Accordingly, the Company's backlog as of June 30, 2000
may not necessarily represent the actual amount of shipments or sales for any
future period.
FOREIGN OPERATIONS
The Company manufactures virtually all of its products in the United States.
However, a portion of the Company's current sales is conducted abroad. These
sales are subject to numerous additional risks, including the impact of foreign
government regulations, currency fluctuations, political uncertainties and
differences in business practices. There can be no assurance that foreign
governments will not adopt regulations or take other action that would have a
direct or indirect adverse impact on the business or market opportunities of the
Company within such governments' countries. Furthermore, there can be no
assurance that the political, cultural and economic climate outside the United
States will be favorable to the Company's operations and growth strategy.
- 12 -
<PAGE> 15
INFLATION
Many of the Company's raw materials and operating expenses are sensitive to the
effects of inflation, which could result in higher operating costs. The effects
of inflation on the Company's businesses during the thirteen and thirty-nine
week periods ended June 30, 2000 and July 2, 1999 were not significant.
LIQUIDITY AND CAPITAL RESOURCES
Cash provided by operating activities during the thirty-nine weeks ended June
30, 2000 was approximately $8.9 million compared to approximately $25.1 million
used during the thirty-nine weeks ended July 2, 1999. Such an increase in
operating cash flows is due to the one-time merger expenses incurred during the
thirty-nine weeks ended July 2, 1999, partially offset by an increase in
interest expense as a result of the increase in the average level of outstanding
borrowings in connection with the Recapitalization and acquisition of ZMP.
Cash used in investing activities was approximately $5.5 million during the
thirty-nine weeks ended June 30, 2000 compared to approximately $44.2 million
used during the thirty-nine weeks ended July 2, 1999. The decrease is mainly due
to the acquisition of ZMP, Inc. in the prior year offset by the acquisition of
Christie Electric Corp. in March 2000.
Cash used in financing activities during the thirty-nine weeks ended June 30,
2000 was approximately $3.3 million compared to approximately $50.5 million
provided by financing activities during the thirty-nine weeks ended July 2,
1999. This change in financing cash flows was due to the incurrence and
refinancing of substantial indebtedness as a result of the Recapitalization and
the acquisition of ZMP.
The interest rate for the Company's existing credit facility is, at TransDigm's
option, either (A) a floating rate equal to the Base Rate plus the Applicable
Margin, as defined in the credit facility; or (B) the Eurodollar Rate for fixed
periods of one, two, three, or six months, plus the Applicable Margin. The
"Applicable Margin" means the percentage per year equal to (1) in the case of
Tranche A Facility and Revolving Credit Facility, (A) bearing an interest rate
determined by the Base Rate, plus 2.25 percent, 2.00 percent, 1.75 percent or
1.50 percent depending on Holdings' ability to achieve the respective debt
coverage ratio specified in the credit facility, as amended; and (B) bearing an
interest rate determined by the Eurodollar Rate, plus 3.25 percent, 3.00
percent, 2.75 percent or 2.50 percent depending on Holdings' ability to achieve
the respective debt coverage ratio specified in the credit facility, as amended;
and (2) in the case of Tranche B Facility, (A) bearing an interest rate
determined by the Base Rate, 2.50 percent; and (B) bearing an interest rate
determined by the Eurodollar Rate, 3.50 percent. The credit facility is subject
to mandatory prepayment with a defined percentage of net proceeds from certain
asset sales, insurance proceeds or other awards that are payable in connection
with the loss, destruction or condemnation of any assets, certain new debt and
equity offerings and 50 percent of excess cash flow (as defined in the credit
facility) in excess of a predetermined amount under the credit facility. At June
30, 2000, the Company had $26 million of additional borrowings available under
the credit facility's $30 million revolving credit line.
The subordinated notes bear interest at 10 3/8 percent and do not require
principal payments prior to maturity. The Revolving Credit Facility and the
Tranche A Facility will each mature on the six year anniversary of the initial
borrowing date and the Tranche B Facility will mature on the seven and a half
year anniversary of the initial borrowing date. The credit facility requires
TransDigm to amortize the outstanding indebtedness under each of the Tranche A
and the Tranche B Facilities and contains restrictive covenants that will, among
other things, limit the incurrence of additional indebtedness, the payment of
dividends, transactions with affiliates, asset sales, acquisitions, mergers and
consolidations, liens and encumbrances, and prepayments of other indebtedness.
The Company's primary cash needs will consist of capital expenditures and debt
service. The Company incurs capital expenditures for the purpose of maintaining
and replacing existing equipment and facilities and, from time to time, for
facility expansion. Capital expenditures totaled approximately $3.0 million and
$2.6 million during the thirty-nine weeks ended June 30, 2000 and July 2, 1999,
respectively.
- 13 -
<PAGE> 16
The Company intends to pursue additional acquisitions that present opportunities
to realize significant synergies, operating expense economies or overhead cost
savings or to increase the Company's market position. The Company regularly
engages in discussions with respect to potential acquisitions and investments.
However, there are no binding agreements with respect to any material
acquisitions at this time, and there can be no assurance that we will be able to
reach an agreement with respect to any future acquisition. The Company's
acquisition strategy may require substantial capital, and no assurance can be
given that the Company will be able to raise any necessary funds on terms
acceptable to the Company or at all. If the Company incurs additional debt to
finance acquisitions, its total interest expense will increase.
The Company's ability to make scheduled payments of principal of, or to pay the
interest on, or to refinance, its indebtedness, including the subordinated
notes, or to fund planned capital expenditures and research and development,
will depend on its future performance, which, to a certain extent, is subject to
general economic, financial, competitive, legislative, regulatory and other
factors that are beyond its control. Based upon the current level of operations
and anticipated cost savings and revenue growth, management believes that cash
flow from operations and available cash, together with available borrowings
under the credit facility, will be adequate to meet the Company's future
liquidity needs for at least the next few years. The Company may, however, need
to refinance all or a portion of the principal of the subordinated notes on or
prior to maturity. There can be no assurance that the Company's business will
generate sufficient cash flow from operations and that anticipated revenue
growth and operating improvements will be sufficient to enable the Company to
service its indebtedness, including the subordinated notes, or to fund its other
liquidity needs. In addition, there can be no assurance that the Company will be
able to effect any such refinancing on commercially reasonable terms or at all.
In June 1998, the Financial Accounting Standards Board issued SFAS No. 133,
"Accounting for Derivative Instruments and Hedging Activities." This statement
establishes accounting and reporting standards for 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. If certain conditions are met, a derivative may
be specifically designated as (a) a hedge of the exposure to changes in the fair
value of a recognized asset or liability or an unrecognized firm commitment, (b)
a hedge of the exposure to variable cash flows of a forecasted transaction, or
(c) a hedge of the foreign currency exposure of a net investment in a foreign
operation, an unrecognized firm commitment, an available-for-sale security, or a
foreign-currency-denominated forecasted transaction. The Company will adopt this
standard during fiscal 2001.
While management has not completed its analysis of this new accounting standard,
its adoption is not expected to have a material effect on the Company's
financial statements.
IMPACT OF YEAR 2000 ISSUE
The Company has not encountered year 2000 problems with respect to its
information technology systems; however, the Company's accounting and business
information systems are not complex, and manual procedures could be performed
for a period of time to provide the information necessary to continue to operate
the business. In the event that year 2000 problems arise within embedded
systems, the Company intends to employ its existing subcontractor machinists to
manufacture the affected components. The Company will continue to monitor year
2000 issues.
ADDITIONAL DISCLOSURE REQUIRED BY INDENTURE
Separate financial information of TransDigm is not presented since the Senior
Subordinated Notes are guaranteed by Holdings and all direct and indirect
subsidiaries of TransDigm and since Holdings has no operations or assets
separate from its investment in TransDigm. In addition, Holdings' only liability
consists of Holdings PIK Notes of $20 million that bear interest at 12.0 percent
annually. Interest expense recognized on the Holdings PIK Notes during the
thirteen and thirty-nine week periods ended June 30, 2000 was $0.6 million and
$1.9 million, respectively. Interest expense recognized on these notes during
the thirteen and thirty-nine week periods ended July 2, 1999 was $.6 million and
$1.4 million, respectively.
- 14 -
<PAGE> 17
PART I: FINANCIAL INFORMATION
ITEM 3
QUANTITATIVE AND QUALITATIVE DISCLOSURE ABOUT MARKET RISK
At June 30, 2000, the Company is subject to interest rate risk with respect to
borrowings under its credit facility as the interest rates on such borrowings
vary with market conditions and, thus, the amount of outstanding borrowings
approximates the fair value of the indebtedness. On a historical basis, the
weighted average interest rate on the $117.8 million of borrowings outstanding
under the credit facility at June 30, 2000 was 9.4 percent. The effect of a
hypothetical one percentage point increase in interest rates would decrease the
estimated fair value of the borrowings outstanding under the credit facility on
June 30, 2000 by approximately $5.5 million.
Also outstanding at June 30, 2000 was $125 million of Company indebtedness in
the form of subordinated notes and $23.9 million of Holdings PIK Notes. The
interest rates on both of these borrowings are fixed at 10 3/8 percent and 12.0
percent per year, respectively. Although management believes that the fair value
of these debt obligations approximates their outstanding balance, at June 30,
2000, the effect of a hypothetical one percentage point increase in interest
rates would decrease the estimated fair value of the borrowings by $10.6 million
and $1.9 million, respectively.
- 15 -
<PAGE> 18
PART II: OTHER INFORMATION
ITEM 6 Exhibits and Reports on Form 8-K
(a) Exhibits
27 Financial Data Schedule
(b) The Company did not file any reports on Form 8-K during the quarter
ended June 30, 2000.
- 16 -
<PAGE> 19
SIGNATURES
Pursuant to the requirements of Section 13 of the Securities Act of 1934, as
amended, each of the Co-Registrants has duly caused this Report to be signed on
its behalf by the undersigned, thereunto duly authorized, in the City of
Richmond Heights, State of Ohio, on August 11, 2000.
TRANSDIGM HOLDING COMPANY
By: /s/ PETER B. RADEKEVICH
-----------------------------------------
Peter B. Radekevich
Chief Financial Officer
TRANSDIGM INC.
By: /s/ PETER B. RADEKEVICH
-----------------------------------------
Peter B. Radekevich
Chief Financial Officer
MARATHON POWER TECHNOLOGIES COMPANY
By: /s/ PETER B. RADEKEVICH
-----------------------------------------
Peter B. Radekevich
Chief Financial Officer
ZMP, INC.
By: /s/ PETER B. RADEKEVICH
-----------------------------------------
Peter B. Radekevich
Chief Financial Officer
ADAMS RITE AEROSPACE, INC.
By: /s/ PETER B. RADEKEVICH
-----------------------------------------
Peter B. Radekevich
Chief Financial Officer
CHRISTIE ELECTRIC CORP.
By: /s/ PETER B. RADEKEVICH
-----------------------------------------
Peter B. Radekevich
Chief Financial Officer
- 17 -
<PAGE> 20
TRANSDIGM HOLDING COMPANY
Pursuant to the requirements of the Securities Act of 1934, this Report has been
signed below by the following persons on behalf of the Co-Registrant and in the
capacities and as of the dates indicated.
<TABLE>
<CAPTION>
SIGNATURE TITLE DATE
<S> <C> <C>
* Chief Executive Officer (Principal August 11, 2000
----------------------------------- Executive Officer) and Chairman of the Board
Douglas W. Peacock
* President and Chief Operating Officer August 11, 2000
----------------------------------- (Principal Operating Officer) and Director
W. Nicholas Howley
/s/ Peter B. Radekevich Chief Financial Officer (Principal Financial August 11, 2000
----------------------------------- and Accounting Officer)
Peter B. Radekevich
* Director August 11, 2000
-----------------------------------
Stephen Berger
* Director August 11, 2000
-----------------------------------
William Hopkins
* Director August 11, 2000
-----------------------------------
Muzzafar Mirza
* Director August 11, 2000
-----------------------------------
John W. Paxton
* Director August 11, 2000
-----------------------------------
Thomas R. Wall, IV
</TABLE>
- 18 -
<PAGE> 21
TRANSDIGM INC.
Pursuant to the requirements of the Securities Act of 1934, this Report has been
signed below by the following persons on behalf of the Co-Registrant and in the
capacities and as of the dates indicated.
<TABLE>
<CAPTION>
SIGNATURE TITLE DATE
<S> <C> <C>
* Chief Executive Officer (Principal August 11, 2000
----------------------------------- Executive Officer) and Chairman of the Board
Douglas W. Peacock
* President and Chief Operating Officer August 11, 2000
----------------------------------- (Principal Operating Officer) and Director
W. Nicholas Howley
/s/ Peter B. Radekevich Chief Financial Officer (Principal Financial August 11, 2000
----------------------------------- and Accounting Officer)
Peter B. Radekevich
* Director August 11, 2000
-----------------------------------
Stephen Berger
* Director August 11, 2000
-----------------------------------
William Hopkins
* Director August 11, 2000
-----------------------------------
Muzzafar Mirza
* Director August 11, 2000
-----------------------------------
John W. Paxton
* Director August 11, 2000
-----------------------------------
Thomas R. Wall, IV
</TABLE>
- 19 -
<PAGE> 22
MARATHON POWER TECHNOLOGIES COMPANY
Pursuant to the requirements of the Securities Act of 1934, this Report has been
signed below by the following persons on behalf of the Co-Registrant and in the
capacities and as of the dates indicated.
<TABLE>
<CAPTION>
SIGNATURE TITLE DATE
<S> <C> <C>
* Chief Executive Officer (Principal August 11, 2000
----------------------------------- Executive Officer) and Chairman of the Board
Douglas W. Peacock
* President (Principal Operating Officer) August 11, 2000
-----------------------------------
Albert J. Rodriguez
/s/ Peter B. Radekevich Chief Financial Officer (Principal Financial August 11, 2000
----------------------------------- and Accounting Officer)
Peter B. Radekevich
* Director August 11, 2000
-----------------------------------
W. Nicholas Howley
</TABLE>
- 20 -
<PAGE> 23
ZMP, INC.
Pursuant to the requirements of the Securities Act of 1934, this Report has been
signed below by the following persons on behalf of the Co-Registrant and in the
capacities and as of the dates indicated.
<TABLE>
<CAPTION>
SIGNATURE TITLE DATE
<S> <C> <C>
* Chairman of the Board and Executive Vice August 11, 2000
----------------------------------- President (Principal Executive Officer)
Douglas W. Peacock
* President (Principal Operating Officer) August 11, 2000
-----------------------------------
John F. Leary
/s/ Peter B. Radekevich Treasurer and Chief Financial Officer August 11, 2000
----------------------------------- (Principal Financial and Accounting Officer)
Peter B. Radekevich
* Executive Vice President and Director August 11, 2000
-----------------------------------
W. Nicholas Howley
</TABLE>
- 21 -
<PAGE> 24
ADAMS RITE AEROSPACE, INC.
Pursuant to the requirements of the Securities Act of 1934, this Report has been
signed below by the following persons on behalf of the Co-Registrant and in the
capacities and as of the dates indicated.
<TABLE>
<CAPTION>
SIGNATURE TITLE DATE
<S> <C> <C>
* Chairman of the Board and Executive Vice August 11, 2000
----------------------------------- President (Principal Executive Officer)
Douglas W. Peacock
* President (Principal Operating Officer) August 11, 2000
-----------------------------------
John F. Leary
/s/ Peter B. Radekevich Treasurer and Chief Financial Officer August 11, 2000
----------------------------------- (Principal Financial and Accounting Officer)
Peter B. Radekevich
* Executive Vice President and Director August 11, 2000
-----------------------------------
W. Nicholas Howley
</TABLE>
- The undersigned, by signing his name hereto, does sign and execute this
Annual Report on Form 10-Q pursuant to the Power of Attorney executed by
the above-named officers and Directors of the Co-Registrant and filed with
the Securities and Exchange Commission on behalf of such officers and
Directors.
By: /s/ Peter B. Radekevich
---------------------------
Peter B. Radekevich,
ATTORNEY-IN-FACT
- 22 -
<PAGE> 25
CHRISTIE ELECTRIC CORP.
Pursuant to the requirements of the Securities Act of 1934, this Report has been
signed below by the following persons on behalf of the Co-Registrant and in the
capacities and as of the dates indicated.
<TABLE>
<CAPTION>
SIGNATURE TITLE DATE
<S> <C> <C>
* Chief Executive Officer (Principal August 11, 2000
----------------------------------- Executive Officer) and Chairman of the Board
Douglas W. Peacock
* President (Principal Operating Officer) August 11, 2000
-----------------------------------
Albert J. Rodriguez
/s/ Peter B. Radekevich Chief Financial Officer (Principal Financial August 11, 2000
----------------------------------- and Accounting Officer)
Peter B. Radekevich
* Director August 11, 2000
-----------------------------------
W. Nicholas Howley
</TABLE>
- 23 -
<PAGE> 26
EXHIBIT INDEX
TO FORM 10-Q FOR THE QUARTER ENDED JUNE 30, 2000
EXHIBIT NO. DESCRIPTION PAGE
27 Financial Data Schedule 25
- 24 -
