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FORM 10-Q
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
------------------------
<TABLE>
<C> <S>
/X/ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES AND EXCHANGE ACT OF 1934
</TABLE>
FOR THE QUARTERLY PERIOD ENDED SEPTEMBER 30, 2000
OR
<TABLE>
<C> <S>
/ / TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
</TABLE>
FOR THE TRANSITION PERIOD FROM ______________ TO ______________
COMMISSION FILE NUMBER 333-75643
------------------------
COMPASS AEROSPACE CORPORATION
(Exact name of registrant as specified in its charter)
<TABLE>
<S> <C>
DELAWARE 95-4659126
(State or other jurisdiction of incorporation or I.R.S. Employer Identification No.
organization)
1501 HUGHES WAY, SUITE 400, LONG BEACH, CALIFORNIA 90810
(Address of principal executive offices) (Zip Code)
</TABLE>
(310) 522-0600
(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 / / No /X/
Indicate the number of shares outstanding of each of the issuer's classes of
common stock, as of the latest practicable date. As of October 31, 2000, there
were outstanding 34,909,335 shares of common stock.
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<PAGE>
COMPASS AEROSPACE CORPORATION
FORM 10-Q
INDEX
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PAGE
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Part I. FINANCIAL INFORMATION
Item 1. FINANCIAL STATEMENTS (UNAUDITED)
Consolidated Balance Sheets at September 30, 2000 and
December 31, 1999........................................... 2
Consolidated Statements of Operations for the Three Months
Ended September 30, 2000 and September 30, 1999 and the Nine
Months Ended September 30, 2000 and September 30, 1999...... 3
Consolidated Statements of Cash Flows for the Nine Months
Ended September 30, 2000 and September 30, 1999............. 4
Notes to Consolidated Financial Statements.................. 5
Item 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION
AND RESULTS OF OPERATIONS................................... 7
Item 3. QUANTITATIVE AND QUALITATIVE DISCLOSURE OF MARKET RISK...... 9
PART II OTHER INFORMATION
Item 1. LEGAL PROCEEDINGS........................................... 10
Item 2. CHANGES IN SECURITIES....................................... 10
Item 3. DEFAULTS UPON SENIOR SECURITIES............................. 10
Item 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS......... 10
Item 5. OTHER INFORMATION........................................... 10
Item 6. EXHIBITS AND REPORTS ON FORM 8-K............................ 10
SIGNATURES.................................................................... 11
</TABLE>
<PAGE>
PART I--FINANCIAL INFORMATION
COMPASS AEROSPACE CORPORATION AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
(DOLLARS IN THOUSANDS EXCEPT SHARE PER SHARE DATA)
<TABLE>
<CAPTION>
SEPTEMBER 30, DECEMBER 31,
2000 1999
------------- ------------
(UNAUDITED) (NOTE 1)
<S> <C> <C>
ASSETS
Current Assets:
Cash and cash equivalents................................. $ 4,537 $ 8,323
Accounts receivable (net of allowance for doubtful
accounts of $919 at September 30, 2000 and $1,040 at
December 31, 1999)...................................... 18,714 23,136
Inventories............................................... 34,955 36,689
Prepaid expenses and other current assets................. 4,701 4,085
-------- --------
Total Current Assets.................................... 62,907 72,233
Property and equipment (net of accumulated depreciation of
$54,965 at September 30, 2000 and $44,202 at December 31,
1999)..................................................... 63,995 73,033
Costs in excess of net assets of businesses acquired (net of
accumulated amortization of $12,210 at September 30,2000
and $6,950 at December 31, 1999).......................... 113,752 142,028
Other assets................................................ 12,535 14,137
-------- --------
Total Assets............................................ $253,189 $301,431
======== ========
LIABILITIES AND STOCKHOLDERS' EQUITY
Current Liabilities:
Accounts payable.......................................... $ 11,925 $ 9,594
Accrued liabilties........................................ 14,368 13,250
Income taxes payable...................................... 988 1,864
Current portion of long-term debt......................... 80,468 8,382
Short term borrowings..................................... 9,000 --
-------- --------
Total Current Liabilities............................... 116,749 33,090
Long-term debt.............................................. 98,594 224,316
Deferred income taxes....................................... 8,745 8,770
-------- --------
Total Liabilities....................................... 224,088 266,176
======== ========
Commitments and Contingencies
Stockholders' Equity:
Common stock--$.01 par value;
Authorized shares
56,000,000 at September 30, 2000 and December 31, 1999
Issued and outstanding
34,909,335 at September 30, 2000 and 34,979,711 at
December 31, 1999..................................... 349 350
Additional paid-in capital................................ 43,513 43,616
Accumulated comprehensive loss............................ (1,949) --
Accumulated deficit....................................... (12,812) (8,711)
-------- --------
Total Stockholders' Equity.............................. 29,101 35,255
-------- --------
Total Liabilities and Stockholders' Equity.............. $253,189 $301,431
======== ========
</TABLE>
See accompanying notes to consolidated financial statements.
-2-
<PAGE>
PART I--FINANCIAL INFORMATION (CONTINUED)
COMPASS AEROSPACE CORPORATION AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF OPERATIONS (UNAUDITED)
(DOLLARS IN THOUSANDS)
<TABLE>
<CAPTION>
THREE MONTHS ENDED NINE MONTHS ENDED
SEPTEMBER 30, SEPTEMBER 30,
------------------- -------------------
2000 1999 2000 1999
-------- -------- -------- --------
<S> <C> <C> <C> <C>
Net sales............................................ $ 39,511 $34,327 $115,537 $101,443
Cost of sales........................................ 33,729 24,463 103,386 72,275
-------- ------- -------- --------
Gross profit (loss).................................. 5,782 9,864 12,151 29,168
Selling, general and administrative expenses......... 5,486 4,625 16,388 13,034
Goodwill amortization................................ 1,499 1,788 5,260 4,828
Management fees...................................... -- 170 -- 505
-------- ------- -------- --------
Operating income (loss).............................. (1,203) 3,281 (9,497) 10,801
Interest expense..................................... 4,990 5,740 17,048 15,672
Other expense........................................ 766 687 2,491 1,674
-------- ------- -------- --------
Loss before income taxes and extraordinary gain...... 6,959 (3,146) (29,636) (6,545)
Income tax expense (benefit)......................... (10,684) (950) (18,702) (2,396)
-------- ------- -------- --------
Net Loss before extraordinary gain................... 3,725 (2,196) (10,334) (4,149)
Extraordinary gain on early extinguishment
of debt net of income tax.......................... 14,435 -- 14,435 --
-------- ------- -------- --------
Net Income (Loss).................................... $ 18,160 ($2,196) $ 4,101 $ 4,149
======== ======= ======== ========
</TABLE>
See accompanying notes to consolidated financial statements.
-3-
<PAGE>
PART I--FINANCIAL INFORMATION (CONTINUED)
COMPASS AEROSPACE CORPORATION AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS (UNAUDITED)
(DOLLARS IN THOUSANDS)
<TABLE>
<CAPTION>
NINE MONTHS ENDED
SEPTEMBER 30,
-------------------------
2000 1999
----------- -----------
<S> <C> <C>
Cash Flows from Operating Activities:
Net Loss.................................................... $ (4,101) $ (4,149)
Adjustments to Reconcile Net Loss to Net
Cash provided by (used in) operating activities:
Depreciation and amortization........................... 16,007 14,060
Fees on extinguished debt............................... 1,800 --
Gain on extinguished debt............................... (26,860) --
Deferred income tax provision........................... (25) (321)
Changes in operating assets and liabilities:
Accounts receivable..................................... 4,422 5,993
Inventories............................................. 1,734 3,620
Prepaid expenses and other assets....................... 244 (1,166)
Accounts payable........................................ 2,331 (5,403)
Accrued and other liabilities........................... 242 1,407
Change in other assets.................................. (2,528) (4,826)
-------- --------
Net cash provided by (used in) operating activities..... (6,734) 9,215
-------- --------
Cash Flows from Investing Activities:
Purchase of property and equipment.......................... (785) (5,156)
Payment for acquisitions net of cash acquired............... -- (54,096)
Proceeds from settlement of aquisition purchase price....... 13,017 --
-------- --------
Net cash provided by (used in) investing activities..... 12,232 (59,252)
-------- --------
Cash Flows from financing activities:
Purchase of stock held by former employee................... (104) --
Payments on debt............................................ (15,991) (793)
Proceeds from long-term debt................................ -- 21,884
Proceeds from note offering................................. -- 18,743
Proceeds from sale of stock................................. -- 15,000
Proceeds from increase in short-term borrowings............. 9,000 --
-------- --------
Net cash provided by (used in) financing activities..... (7,095) 54,834
-------- --------
Effect of foreign exchange rate on cash..................... (2,189) --
-------- --------
Net decrease in cash and cash equivalents................... (3,786) 4,797
Cash and cash equivalents, beginning of period.............. 8,323 7,871
-------- --------
Cash and cash equivalents, end of period.................... $ 4,537 $ 12,668
======== ========
Supplemental disclosures of cash flows information:
Interest expense paid....................................... $ 14,512 $ 10,247
Income taxes paid, net of refund............................ $ 818 $ --
</TABLE>
See accompanying notes to consolidated financial statements.
-4-
<PAGE>
PART I--FINANCIAL INFORMATION (CONTINUED)
COMPASS AEROSPACE CORPORATION AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)
(DOLLARS IN THOUSANDS)
NOTE 1. BASIS OF PRESENTATION
The consolidated balance sheets and consolidated statements of operations
are unaudited as of and for the three months and nine months periods ended
September 30, 2000 and September 30, 1999. The balance sheet at December 31,
1999 has been derived from the audited financial statements at that date but
these statements do not include all of the footnotes required by generally
accepted accounting principles for complete financial statements. The financial
information included in this quarterly report should be read in conjunction with
the Company's consolidated financial statements and the related notes thereto
included in its Annual Report on Form 10-K for the year ended December 31, 1999.
NOTE 2. FOREIGN CURRENCY TRANSLATION
The functional currency of the Company's foreign subsidiary is the local
currency. Assets and liabilities of the foreign subsidiary are translated into
U.S. dollars at the period end exchange rates, and revenues and expenses are
translated at average rates prevailing during the periods presented. Translated
adjustments are included in accumulated other comprehensive loss, a separate
component of stockholders' equity. Transaction gains or losses arising from
transactions denominated in a currency other than the functional currency of the
entity involved, which have been insignificant, are included in the consolidated
statements of operations.
NOTE 3. COMPREHENSIVE LOSS
The Company has adopted Statement of Financial Accounting Standards
No. 130, "Reporting Comprehensive Income", which establishes standards for the
reporting and display of comprehensive loss and its components in the financial
statements. Comprehensive loss includes cumulative foreign currency translation
adjustments.
NOTE 4. LONG-TERM DEBT
Long-term debt is summarized as follows:
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<CAPTION>
SEPTEMBER 30, DECEMBER 31,
2000 1999
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Term Loan A......................................... $ 24,971 $ 31,500
Term Loan B......................................... 38,332 44,550
Acquisition line of credit.......................... 16,252 20,604
Capital leases and other............................ 6,438 7,093
Senior subordinated notes........................... 93,069 128,951
-------- --------
Sub Total long-term debt.......................... 179,062 232,698
Less current portion................................ (80,468) (8,382)
-------- --------
Total long-term debt.............................. $ 98,594 $224,316
======== ========
</TABLE>
On November 10, 2000, we made the interest payment due on October 15, 2000
on our outstanding 10 1/8% senior subordinated notes due 2005, including
interest that had accrued on the interest payment from October 15, 2000. Our
principal stockholder loaned us the funds for the interest
-5-
<PAGE>
PART I--FINANCIAL INFORMATION (CONTINUED)
COMPASS AEROSPACE CORPORATION AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) (CONTINUED)
(DOLLARS IN THOUSANDS)
NOTE 4. LONG-TERM DEBT (CONTINUED)
payment. The loan, in the principal amount of $4.7 million, bears interest at
the same rate as loans under our existing credit agreement and may be repaid
once outstanding debt under the credit agreement has been reduced by
$46 million from the amount outstanding at September 14, 2000.
At September 30, 2000 the Company failed to meet some of the financial
covenants of its senior credit agreement. Under the terms of this agreement,
noncompliance with the covenants constitutes an event of default, which could
permit the Company's lenders to accelerate the Company's outstanding obligations
under the credit agreement. In accordance with Statement of Financial Accounting
Standards No. 78, "Classification of Obligations that are Callable by the
Creditor," the Company has classified the entire outstanding balance under the
senior credit agreement as a current liability. Effective September 29, 2000,
the senior credit agreement was amended through December 29, 2000. The
amendment, among other things, provides for a waiver of existing covenant
violations, extends the expiration of the Company's revolving credit facility
and defers previously scheduled principal payments until December 29, 2000. The
amendment requires that obligations under the credit agreement be paid in full
by December 29, 2000, with an extension to January 31, 2001 if certain
conditions are met. The Company intends to repay the amounts outstanding under
the credit agreement through the proceeds from an asset sale program and
refinancing, if necessary.
NOTE 5. COMMITMENTS AND CONTINGENCIES
The Company leases certain machinery and equipment under capital leases
expiring at various dates through 2007. The Company also leases office space
under operating leases with terms expiring at various dates through 2008. During
the ordinary course of business, the Company is involved in various legal
proceedings. Management, in consultation with legal counsel, does not believe
that the outcome of these lawsuits will have a material adverse effect on the
financial position or future operating results of the Company.
NOTE 6. SEGMENTS
The Company has one segment which is the supply of original equipment parts,
sub-assemblies, manufacturing kits, and structural components to aerospace
manufacturers for use in structural frames and other metal aircraft components.
The Company's operations are conducted domestically and internationally. The
Company evaluates performance based on EBITDA, defined as profit before income
taxes, interest, depreciation, goodwill amortization, and management fees paid
to an affiliate.
NOTE 7. LITIGATION SETTLEMENT
On June 22, 2000, the Company entered into a settlement agreement with
Alinabal Holdings Corporation and its principal stockholders to settle the
Company's outstanding lawsuit against Alinabal and its stockholders. The
settlement included the reimbursement of $2.5 million of legal costs incurred in
connection with the litigation, $12.5 million of cash and $36.0 million of the
Company's 10 1/8% Senior Subordinated Notes. The $12.5 million of cash received
was used to reduce Term A, Term B and Acquisition Line senior debt. The
settlement resulted in a $22.2 million reduction of goodwill and a gain of
$26.9 million on the early extinguishment of the debt.
-6-
<PAGE>
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
OF OPERATIONS
RESULTS OF OPERATIONS: THE THREE MONTHS ENDED SEPTEMBER 30, 2000 COMPARED TO THE
THREE MONTHS ENDED SEPTEMBER 30, 1999
RESULTS OF OPERATIONS
REVENUES: Consolidated revenues increased $5.2 million, or 15.1%, to
$39.5 million for the three months ended September 30, 2000 from $34.3 million
for the three months ended September 30, 1999. The increase was due to our
acquisition of Trim Engineering Limited (Trim) in the third quarter of 1999.
Trim, which has headquarters in the United Kingdom and operates six aerospace
precision milling, metal treatments and casting units, had revenues of
$12.3 million in the three months ended September 30, 2000 compared with
$7.5 million in the three months ended September 30, 1999. Revenues from our
domestic operations increased $0.4 million, or 1.5%, for the three months ended
September 30, 2000 to $27.2 million.
COST OF SALES: Cost of sales increased $9.2 million, or 37.6%, to
$33.7 million for the three months ended September 30, 2000 from $24.5 million
for same period of 1999. Cost of sales increased as a result of a number of
factors. In January 2000, we incurred costs of $4.6 million in connection with a
long-term agreement with our major customer. The carrying value associated with
this agreement is amortized at the rate of $0.5 million per quarter through
June 2001. The acquisition of Trim in the third quarter of 1999 increased cost
of sales by $4.9 million. Exclud4ing the amortization of the cost incurred with
our long-term agreement with our major customer and the acquisition of Trim,
cost of sales was $23.5 million, or 86.4% of sales, in the three months ended
September 30, 2000 compared to $19.7 million or 73.5% of sales for the same
period in 1999. This increase in cost of sales in relation to sales was due to
initially high production costs for new contracts and market pressure to reduce
prices.
SELLING, GENERAL AND ADMINISTRATIVE EXPENSES: Selling, general and
administrative expenses increased $0.9 million, or 14.6%, to $5.5 million for
the three months ended September 30, 2000 from $4.6 million for same period of
1999. This increase was attributable to higher legal, consulting, and employee
search and relocation fees in the three months ended September 30, 2000 compared
to the same period in 1999.
NET INTEREST EXPENSE: Interest expense decreased $0.7 million, or 12.3%, to
$5.0 million for the three months ended September 30, 2000 from $5.7 million for
the same period of 1999. The decrease in interest expense was attributable to
the extinguishment and pay down of debt resulting from the settlement of our
suit against Alinabal Holdings Corporation and its principal stockholders,
partly offset by increased interest rates.
NET INCOME: Net income increased $20.4 million to $18.2 million in the
three months ended September 30, 2000 from a net loss of $2.2 million for the
same period of 1999. The increase in net income was due to a gain on the
extinguishment of debt of $26.9 million offset by the increases in the cost of
sales and selling, general and administrative expenses.
RESULTS OF OPERATIONS: THE NINE MONTHS ENDED SEPTEMBER 30, 2000 COMPARED TO THE
NINE MONTHS ENDED SEPTEMBER 30, 1999.
REVENUES: Consolidated revenues increased $14.1 million, or 13.9%, to
$115.5 million for the nine months ended September 30, 2000 from $101.4 million
for the same period in 1999. Excluding the Trim acquisition, revenues from our
domestic operations decreased $13.8 million, or 14.7%, for the nine months ended
September 30, 2000 to $80.1 million. Our decrease in revenues is partly a result
of Boeing's initiative to reduce inventory. Additionally, we believe our lower
revenues are the result of the reductions in production rates of certain Boeing
commercial airplane programs and market pressure to reduce prices.
-7-
<PAGE>
COST OF SALES: Cost of sales increased $31.1 million, or 43.0%, to
$103.4 million for the nine months ended September 30, 2000 from $72.3 million
for same period of 1999. Cost of sales increased as a result of a number of
factors. In January 2000, we incurred $4.6 million of cost in connection with a
long-term agreement with a major customer. As a result of specific events in the
second quarter of 2000, the future benefits originally associated with this
agreement were determined to have diminished and the carrying value associated
with this agreement was reduced by $2.4 million with the remaining balance to be
amortized at the rate of $0.5 million per quarter through the second quarter of
2001. A comprehensive review of inventories and the anticipated future
requirements of our customers resulted in a reduction of $2.5 million in the
carrying value of inventory in the second quarter of 2000. Excluding the above
items and the acquisition of Trim, cost of sales was $70.3 million or 87.8% of
sales in the nine months ended September 30, 2000 compared to $67.5 million or
71.9% for the same period in 1999. This increase in cost of sales in relation to
sales was due to initially high production costs for new contracts, lower sales
volume and market pressure to reduce prices.
SELLING, GENERAL AND ADMINISTRATIVE EXPENSES: Selling, general and
administrative expenses increased $3.4 million, or 21.5%, to $16.4 million for
the nine months ended September 30, 2000 from $13.0 million for same period of
1999. This increase was attributable to the acquisition of Trim, with
approximately $2.2 million of selling, general and administrative expenses in
the nine month period ended September 30, 2000, compared to $1.3 million in the
nine month period ended September 30, 1999 and approximately $2.1 million of
employee recruitment, relocation and severance costs relating to senior
management changes made during the nine months ending September 30, 2000. This
increase was offset by $0.7 million related to the settlement of litigation,
which included a $2.5 million reimbursement of legal costs incurred in
connection with the litigation.
NET INTEREST EXPENSE: Interest expense increased $1.3 million, or 8.3%, to
$17.0 million for the nine months ended September 30, 2000 from $15.7 million
for the same period of 1999. The increase in interest expense was attributable
to the increase in borrowings associated with the acquisition of Trim, higher
interest rates on variable rate debt, and increased borrowings under our
revolving credit facility. The increase is partly offset by the extinguishment
and reduction of debt from the settlement of our suit against Alinabal Holdings
Corporation and the principal stockholders of Alinabal Holding Corporation.
NET LOSS: Net loss was $4.1 million for the nine months ended
September 30, 2000 and 1999.
LIQUIDITY AND CAPITAL RESOURCES
NET CASH FLOW PROVIDED BY (USED IN) OPERATING ACTIVITIES: Net cash used in
operating activities during the nine months ended September 30, 2000 was
$6.7 million compared to cash flows provided by operating activities of
$9.2 million for the nine months ended September 30, 1999. The decrease in cash
flow from operating activities was due to lower operating income.
NET CASH FLOW PROVIDED BY (USED IN) INVESTING ACTIVITIES: Net cash provided
by investing activities was $12.2 million for the nine months ended
September 30, 2000 and included $13.0 million related to the final settlement of
an acquisition purchase price offset by $0.8 million related to the purchase of
property, plant and equipment. Net cash used in investing activities for the
nine months ended September 30, 1999 was $5.2 million for purchase of property,
plant and equipment and $54.1 million for payment of acquisitions net of cash
acquired.
NET CASH FLOW PROVIDED BY FINANCING ACTIVITIES: Net cash flow provided by
financing activities was $7.1 million for the nine months ended September 30,
2000 as compared to $54.8 million for same period of 1999. The decrease in net
cash flow provided by financing activities was attributable to the proceeds from
long-term debt, note offerings and the sale of stock during the nine months
ended
-8-
<PAGE>
September 30, 1999, partly offset by a $9.0 million borrowing under our
revolving credit facility during the nine months ended September 30, 2000.
At September 30, 2000, we failed to meet some of the financial covenants of
our senior credit agreement. Under the terms of this agreement, noncompliance
with the covenants constitutes an event of default, which could permit our
lenders to accelerate our outstanding obligations under the credit agreement. In
accordance with Statement of Financial Accounting Standards No. 78,
"Classification of Obligations that are Callable by the Creditor," we have
classified the entire outstanding balance under the senior credit agreement as a
current liability.
FORWARD-LOOKING STATEMENTS AND RISK FACTORS
This Quarterly Report on Form 10-Q Report contains forward-looking
statements which involve risks and uncertainties. Our future financial results
could differ materially from our anticipated results due to dependence on
conditions in the airline industry, the level of new commercial aircraft orders,
competitive pricing pressures, technology and product development risks and
uncertainties, product performance, increasing consolidation of customers and
suppliers in the aerospace industry, availability of raw materials and
components from suppliers, and other factors beyond our control. Because of
these uncertainties you should not place undue reliance on these statements.
ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURE OF MARKET RISK:
Our results of operations are affected by numerous external factors such as
general economic conditions, domestic and foreign competition, raw material
availability and production delays by aerospace manufacturers. We are also
exposed to changes in interest rates primarily from our long-term debt issued at
a fixed rate. Under our current policies we do not use interest rate derivative
instruments to manage exposure to interest rate changes. A hypothetical 100
basis point decrease in interest rates along the entire interest rate yield
curve would adversely affect the net fair value of all interest sensitive
financial instruments by $0.7 million for the nine month period ended
September 30, 2000. Based on the current holdings of debt, we do not believe our
exposure to interest rate risk is material. Fixed rate debt obligations
currently issued by us are callable prior to maturity under some circumstances.
-9-
<PAGE>
PART II--OTHER INFORMATION
ITEM 1. LEGAL PROCEEDINGS
Not applicable
ITEM 2. CHANGES IN SECURITIES
Not applicable
ITEM 3. DEFAULTS UPON SENIOR SECURITIES
Not applicable
ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
Not applicable
ITEM 5. OTHER INFORMATION
On November 10, 2000, we made the interest payment due on October 15, 2000
on our outstanding 10 1/8% senior subordinated notes due 2005, including
interest that had accrued on the interest payment from October 15, 2000. Our
principal stockholder loaned us the funds for the interest payment. The loan, in
the principal amount of $4.7 million, bears interest at the same rate as loans
under our existing credit agreement and may be repaid once outstanding debt
under the credit agreement has been reduced by $46 million from the amount
outstanding at September 14, 2000.
Effective November 1, 2000, we appointed Paul Brost, formerly our Chief
Financial Officer and Treasurer, as Chief Administrative Officer. Jerome David,
formerly Vice President, Operations Finance, has been appointed Chief Financial
Officer and Treasurer. James Storie, formerly Vice President, Operations, has
been appointed Chief Operating Officer. In addition, Messrs. Brost, David and
Storie will all remain Vice Presidents.
ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K
(a) EXHIBITS
Exhibit 27. Financial data Schedule
(b) REPORTS ON FORM 8-K
We have not filed any Report on Form 8-K during this reporting period.
-10-
<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 the
undersigned thereunto duly authorized.
<TABLE>
<S> <C> <C>
COMPASS AEROSPACE CORPORATION
(REGISTRANT)
By: /s/ JEROME C. DAVID
-----------------------------------------
Jerome C. David
SENIOR VICE PRESIDENT, CHIEF FINANCIAL
OFFICER AND TREASURER
</TABLE>
Date: November 14, 2000
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