<PAGE>
SECURITIES AND EXCHANGE COMMISSION
Washington, D. C.
20549
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FORM 10-Q
(Mark One)
/X/ Quarterly Report Pursuant to Section 13 or 15(d) of the Securities
Exchange Act of 1934
For the quarterly period ended August 31, 1999
/ / Transition Report Pursuant to Section 13 or 15(d) of the Securities
Exchange Act of 1934
For the Transition Period From to
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Commission file number 1-1416
SAMES CORPORATION
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(Exact name of registrant as specified in its charter)
DELAWARE 36-0808480
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(State or other jurisdiction of (I.R.S. Employer Identification No.)
incorporation or organization)
9201 WEST BELMONT AVENUE, FRANKLIN PARK, ILLINOIS 60131
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(Address of principal executive offices)
Registrant's telephone number, including area code 847-737-5970
Indicate by check mark whether the registrant (l) 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
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The number of shares outstanding of each of the issuer's classes of common
stock, as of the close of the period covered by this report:
Class Outstanding August 31, 1999
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Capital Stock, par value $1.00 2,966,837
<PAGE>
PART I - FINANCIAL INFORMATION
Item 1 SUMMARIZED FINANCIAL STATEMENTS
Company or group of companies
for which report is filed:
Sames Corporation and Consolidated Subsidiaries
CONSOLIDATED BALANCE SHEETS
AUGUST 31, 1999 (UNAUDITED) AND NOVEMBER 30, 1998
<TABLE>
<CAPTION>
August 31, Nov 30,
1999 1998
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($000 omitted)
<S> <C> <C>
ASSETS
Current assets:
Cash and cash equivalents $ 7,581 5,204
Receivables, net 39,051 44,795
Inventories 19,796 16,465
Other current assets 4,665 5,227
Net assets of discontinued operations 996 1,569
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Total current assets 72,089 73,260
Other noncurrent assets 4,924 4,547
Property, plant and equipment, at cost 12,449 12,697
Less accumulated depreciation 7,962 7,971
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Net property, plant and equipment 4,487 4,726
TOTAL ASSETS $ 81,500 82,533
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LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Notes payable, bank overdrafts
and current maturities of long-term debt $ 6,861 6,210
Accounts payable 28,913 30,316
Other current liabilities 11,567 16,085
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Total current liabilities 47,341 52,611
Non-current liabilities 10,631 7,451
Long-term debt, less current maturities 4,772 1,238
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Total liabilities 62,744 61,300
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Stockholders' equity:
Capital Stock, $1.00 par value. Authorized 12,000,000 2,967 2,965
shares; issued and outstanding 2,966,837 and
2,964,837, respectively
Additional paid-in capital 19,677 19,652
Accumulated deficit (2,176) (300)
Accumulated other comprehensive income:
Foreign currency translation adjustments (1,712) (1,084)
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Total stockholders' equity 18,756 21,233
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TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY $ 81,500 82,533
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</TABLE>
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Sames Corporation and Consolidated Subsidiaries
CONSOLIDATED STATEMENTS OF OPERATIONS
NINE MONTHS ENDED AUGUST 31, 1999 AND AUGUST 31, 1998
(Unaudited)
<TABLE>
<CAPTION>
For the three For the nine
months ended months ended
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August 31, August 31, August 31, August 31,
1999 1998 1999 1998
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($000 omitted) ($000 omitted)
<S> <C> <C> <C> <C>
Net sales $ 24,522 25,155 65,198 85,519
Cost of goods sold 15,448 16,244 40,163 59,380
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Gross profit 9,074 8,911 25,035 26,139
Selling, general and administrative expenses 6,722 7,159 20,573 20,746
Research and development costs 887 939 2,903 2,819
Litigation settlement costs - - - 9,550
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Operating income (loss) 1,465 813 1,559 (6,976)
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Other expense (income):
Interest expense 424 171 947 483
Other expense (income), net 225 541 (945) 933
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649 712 2 1,416
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Income (loss) from continuing operations
before income taxes 816 101 1,557 (8,392)
Income tax expense (benefit) 251 (137) 61 (3,933)
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Income (loss) from continuing operations,
net of tax 565 238 1,496 (4,459)
Loss from discontinued operations, net of tax (1,710) (1,469) (3,372) (9,360)
----------------- ----------------- ----------------- -----------------
Net loss $ (1,145) (1,231) (1,876) (13,819)
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----------------- ----------------- ----------------- -----------------
Income (loss) per share - basic
Continuing operations $ .19 .08 .50 (1.50)
Discontinued operations (.58) (.50) (1.13) (3.16)
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Net loss $ (.39) (.42) (.63) (4.66)
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Income (loss) per share - diluted
Continuing operations $ .19 .08 .50 (1.50)
Discontinued operations (.57) (.49) (1.13) (3.16)
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Net loss $ (.38) (.41) (.63) (4.66)
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Weighted average shares:
Basic 2,966 2,965 2,965 2,964
Effect of stock options 32 37 15 -
----------------- ----------------- ----------------- -----------------
----------------- ----------------- ----------------- -----------------
Diluted 2,998 3,002 2,980 2,964
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</TABLE>
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Sames Corporation and Consolidated Subsidiaries
CONSOLIDATED STATEMENTS OF CASH FLOWS
Nine months ended August 31, 1999 and August 31, 1998
(Unaudited)
<TABLE>
<CAPTION>
1999 1998
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($000 omitted)
<S> <C> <C>
Cash flows from operating activities:
Continuing operations:
Income (loss) from continuing operations, net of tax $ 1,496 (4,459)
Adjustments to reconcile income (loss) from continuing
operations, net of tax, to net cash provided by
(used in) operating activities:
Depreciation and amortization 725 726
Deferred compensation, net of payments (642) (109)
Other, net (1,974) (82)
Cash provided by (used in) changes in:
Receivables 2,374 (6,891)
Inventories (3,630) 6,466
Other current assets 435 (3,740)
Accounts payable 3,780 (1,213)
Accrued expenses (5,678) 4,718
Income taxes 1,712 86
Other non-current liabilities 3,885 -
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Net cash provided by (used in) operating activities 2,483 (4,498)
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Cash flows from investing activities:
Purchase of property, plant and equipment (768) (340)
Other assets 1,471 713
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Net cash provided by (used in) investing activities 703 373
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Cash flows from financing activities:
Proceeds from long-term borrowings 4,765 7,542
Net increase in short-term borrowings 915 4,037
Principal payments on long-term debt (917) (160)
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Net cash provided by financing activities 4,763 11,419
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Net cash used by discontinued operations (5,607) (11,980)
Effect of exchange rate changes on cash 35 (56)
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Net increase (decrease) in cash and cash equivalents 2,377 (4,742)
Cash and cash equivalents at beginning of period 5,204 5,610
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Cash and cash equivalents at end of period $ 7,581 868
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</TABLE>
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<PAGE>
SAMES CORPORATION AND CONSOLIDATED SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
AUGUST 31, 1999 (UNAUDITED) AND NOVEMBER 30, 1998
NOTE 1
The accompanying consolidated financial statements are unaudited, but in the
opinion of management include all adjustments, consisting only of normal
recurring adjustments except where indicated, necessary for a fair presentation
of the results of operations and financial position for the periods presented.
Results of operations for any interim period are not necessarily indicative of
results for any other period or for the full year. These interim consolidated
financial statements should be read in conjunction with the consolidated
financial statements contained in the Annual Report on Form 10-K for the year
ended November 30, 1998.
NOTE 2
On March 29, 1999, Sames Corporation (the "Company") announced that it had
received unsolicited inquiries by parties interested in acquiring all or a part
of its operations. The Company had directed its primary external financial
advisor, William Blair & Company, to review these unsolicited inquiries and to
explore various strategic alternatives to enhance shareholder value, including
the possible sale of all or a portion of the Company to a third party. The
Company has decided not to continue pursuing the exploration of strategic
alternatives.
As a sign of confidence in the Company's future and improved cash flows, the
Company has authorized the repurchase of up to 150,000 shares, or approximately
5%, of its common stock. The shares will be repurchased from time to time in the
open market as market conditions warrant. Under the terms of the repurchase
program, the shares may be reissued to employees under the Company's stock
option and proposed employee stock purchase plan. The Company had 2,966,837
shares outstanding as of August 31, 1999.
NOTE 3
The Company has reached agreement with Illinois Tool Works, Inc. ("ITW") to
resolve an outstanding dispute relating to the purchase price adjustment
associated with its sale to ITW, effective September 30, 1998, of certain
assets, operations and subsidiaries that included specific standard, or
non-electrostatic, products that are referred to as the "Binks Business." Under
the terms of the settlement, the Company has agreed to pay ITW approximately
$6.1 million in sixteen quarterly installments, commencing September 30, 1999
and ending June 30, 2003. As a result of the agreement the Company has recorded
a charge of $1.2 million to discontinued operations in the third quarter ended
August 31, 1999, after discounting the settlement and considering the
pre-existing accrual.
As part of the agreement with ITW, the Company assigned and transferred to ITW
all of the accounts receivable related to the "Binks Business". The agreement
required the Company to repurchase such accounts receivable which were not
collected within 180 days. The Company and ITW have resolved disputes which
arose regarding these receivables. The Company has agreed to repurchase certain
receivables for approximately $1.0 million, which was paid to ITW in September,
1999.
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<PAGE>
SAMES CORPORATION AND CONSOLIDATED SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
AUGUST 31, 1999 (UNAUDITED) AND NOVEMBER 30, 1998
NOTE 4
In January 1998, the Company notified the developer and landlord of a site in
Vernon Hills, Illinois, which had been expected to serve as the Company's
headquarters, that the Company wanted to terminate the project. The Company had
previously entered into a 20-year lease agreement for the Vernon Hills site. In
February 1999, the Company entered into a settlement agreement with the
developer relating to litigation associated with the lease cancellation. The
settlement agreement was for $2.4 million, which was paid by the Company in
February 1999. The settlement cost was classified as a component of discontinued
operations in the Company's fiscal 1998 consolidated financial statements.
The Company has certain other contingent liabilities resulting from litigation
and claims incident to the ordinary course of business. Management believes that
the probable resolution of such contingencies will not materially affect the
financial position or results of operations of the Company. For information
relating to other legal matters involving the Company, reference is made to
"Item 3 - Legal Proceedings" in the Company's Annual Report on Form 10-K for the
year ended November 30, 1998.
NOTE 5
Comprehensive (loss) gain for the nine months ended August 31, 1999 and 1998
consisted of the following ($000 omitted):
<TABLE>
<CAPTION>
NINE MONTHS ENDED AUGUST 31,
----------------------------
1999 1998
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<S> <C> <C>
Net loss $(1,876) (13,819)
Other comprehensive (loss) gain:
Foreign currency translation adjustments (628) 482
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Comprehensive loss $(2,504) (13,337)
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</TABLE>
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<PAGE>
SAMES CORPORATION AND CONSOLIDATED SUBSIDIARIES
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
RESULTS OF OPERATIONS
SIGNIFICANT DEVELOPMENTS
On March 29, 1999, Sames Corporation (the "Company") announced that it had
received unsolicited inquiries by parties interested in acquiring all or a part
of its operations. The Company had directed its primary external financial
advisor, William Blair & Company, to review these unsolicited inquiries and to
explore various strategic alternatives to enhance shareholder value, including
the possible sale of all or a portion of the Company to a third party. The
Company has decided not to continue pursuing the exploration of strategic
alternatives. Though the Company received a number of expressions of interest
from both strategic and financial buyers, it believes that the execution of its
business plan will result in greater value to its shareholders as compared to
the results of any immediate sale of the Company from this process.
As a sign of confidence in the Company's future and improved cash flows, the
Company's Board of Directors has authorized the repurchase of up to 150,000
shares, or approximately 5%, of its common stock. The shares will be repurchased
from time to time in the open market as market conditions warrant. Under the
terms of the repurchased program, the shares may be reissued to employees under
the Company's stock option and proposed employee stock purchase plan. The
Company had 2,966,837 shares outstanding as of August 31, 1999.
It is the Company's intention not to renew the Stockholder Rights Plan, as
amended, which was adopted on February 2, 1990 and expires at the close of
business on February 2, 2000. At the time of adoption, the Company had declared
a dividend distribution of one Right for each outstanding share of Capital Stock
of the Company to the stockholders of record as of February 13, 1990. Under
certain circumstances, each Right, when exercisable, entitles the registered
holder to purchase the Company's common stock at below market value.
The Company has reached agreement with Illinois Tool Works, Inc. ("ITW") to
resolve an outstanding dispute relating to the purchase price adjustment
associated with its sale to ITW, effective September 30, 1998, of certain
assets, operations and subsidiaries that included specific standard, or
non-electrostatic, products that are referred to as the "Binks Business." Under
the terms of the settlement, the Company has agreed to pay ITW approximately
$6.1 million in sixteen quarterly installments, commencing September 30, 1999
and ending June 30, 2003. As a result of the agreement the Company has recorded
a charge of $1.2 million to discontinued operations in the third quarter ended
August 31, 1999, after discounting the settlement and considering the
pre-existing accrual.
As part of the agreement with ITW, the Company assigned and transferred to ITW
all of the accounts receivable related to the "Binks Business". The agreement
required the Company to repurchase such accounts receivable which were not
collected within 180 days. The Company and ITW have resolved disputes which
arose regarding these receivables. The Company has agreed to repurchase certain
receivables for approximately $1.0 million, which was paid to ITW in September,
1999.
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<PAGE>
SAMES CORPORATION AND CONSOLIDATED SUBSIDIARIES
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
RESULTS OF OPERATIONS - (CONTINUED)
SIGNIFICANT DEVELOPMENTS
The Company had been in discussions with specific organizations to form
strategic multi-market alliances to broaden its current global distribution
channels. On April 29, 1999, the Company entered into an Amended and Restated
Product Supply Agreement with one of its main customers for the last fifteen
years, Fanuc Robotics North America, Inc. (FRNA), a world leader in robotic
applications for automotive paint solutions. Under the terms of the agreement,
FRNA has agreed to purchase liquid application products from the Company and the
Company has agreed to purchase robotic paint products from FRNA for a minimum of
three years. The Company designated FRNA as its exclusive distributor for all
liquid application equipment and systems for automotive and tier one customers
in North America and the U.S. "Big Three" automakers in South America. In
addition, there is a strong focus to jointly develop products, and also market
products and systems to customers located outside the North and South American
markets. Both parties have agreed to provide each other with reasonable product
training as well as engineering and technical assistance.
FRNA will operate the Company's North American automotive demonstration
/laboratory facility through June 30, 2000. Recently, FRNA hired thirteen key
technical and service employees formerly employed by the Company. Finally, for
certain monthly royalty considerations and under the protective clauses of a
license agreement, the Company has granted FRNA a limited non-exclusive license
to manufacture, use and sell Bell Machines (liquid) to automotive and tier one
customers in North America and the U.S. "Big Three" automakers in South America
over a term that is co-terminous with the Product Supply Agreement.
On April 27, 1999, the stockholders of the Company approved a name change from
the former Binks Sames Corporation to Sames Corporation.
RESULTS OF OPERATIONS
NET SALES
Net sales for the three months ended August 31, 1999 ("Third Quarter 1999") were
$24.5 million compared to $25.2 million for the three months ended August 31,
1998 ("Third Quarter 1998"), a decrease of $.7 million, or 3%. Net sales for the
nine months ended August 31, 1999 were $65.2 million compared to $85.5 million
for the nine months ended August 31, 1998, a decrease of $20.3 million, or 24%.
Sames, S.A. experienced the majority of the sales decline during the three and
nine month periods. During fiscal 1999, the sales mix of Sames, S.A. has been
more heavily weighted toward lower volume, higher margin standard equipment and
spare part sales. This sales volume decline, relative to the prior year, was
anticipated as the backlog and stages of completion of large automotive
installations resulted in unusually strong revenue recognition primarily in
first quarter fiscal 1998. The remaining sales decline was attributable to lower
sales levels in the Company's other foreign locations, partially offset by
currency translation gains, on a consolidated basis.
GROSS PROFIT
Gross profit of $9.1 million and $25 million for Third Quarter 1999 and the nine
months ended August 31, 1999, respectively, increased $.2 million, or 2%, and
decreased $1.1 million, or 4%, respectively, from the comparable 1998 periods.
Gross profit was 37% and 38% of net sales for Third Quarter 1999 and the nine
months ended August 31, 1999, respectively, compared to 35% and 31%,
respectively, for the comparable 1998 periods. The increase in the Third Quarter
1999 was primarily due to the impact of the Company's cost control programs and
a favorable sales mix as experienced mainly by Sames, S.A. The decrease in gross
profit for the nine months ended August 31, 1999 was due generally to the 24%
lower sales volume recorded in 1999 versus 1998 but offset significantly by
higher margin sales in standard and spare part sales.
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SAMES CORPORATION AND CONSOLIDATED SUBSIDIARIES
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
RESULTS OF OPERATIONS - (CONTINUED)
SELLING, GENERAL AND ADMINISTRATIVE
Selling, general and administrative ("SG&A") expense was $6.7 million and $20.6
million for the Third Quarter 1999 and the nine months ended August 31, 1999,
respectively, compared to $7.2 million and $20.7 million, respectively, for the
comparable 1998 periods. SG&A expense as a percentage of net sales was 27% and
32% for the Third Quarter 1999 and the nine months ended August 31, 1999,
respectively, and 28% and 24%, respectively, for the comparable 1998 periods.
In the second quarter 1999, the Company's subsidiary in France took a one-time
charge for severance costs in the amount of $.4 million. Excluding this charge,
the Company's 1999 expenses for the nine months ended August 31, 1999 decreased
from the comparable period in 1998. These decreases are the result of
management's cost control programs and emphasis on profitability while the
higher percentages of SG&A to net sales in the nine months ended August 31, 1999
are reflective of the sales volume decline as previously discussed.
RESEARCH AND DEVELOPMENT
Research and development ("R&D") expense was $.9 million and $2.9 million for
the Third Quarter 1999 and the nine months ended August 31, 1999, respectively,
compared with $.9 million and $2.8 million, respectively, for the comparable
1998 periods. The Company is continually engaged in experimental work on various
paint and powder coating systems. The R&D costs were incurred solely at Sames,
S.A.
LITIGATION SETTLEMENT COSTS
The Company recorded litigation settlement costs of $9.6 million in the second
quarter 1998. The amount paid was related to the settlement of patent
infringement litigation, which provided the Company with a non-exclusive,
worldwide, lifetime license to use the patents in question.
INTEREST EXPENSE
Interest expense was $.4 million and $.9 million for the Third Quarter 1999 and
the nine months ended August 31, 1999, respectively, compared with $.2 million
and $.5 million, respectively, for the comparable 1998 periods. Interest expense
increased in the nine months ended August 31, 1999 primarily due to increased
borrowing levels in Sames, S.A. and North America.
OTHER EXPENSE (INCOME) - NET
Other expense was $.2 million for the Third Quarter 1999 and other income
was $.9 million for the nine months ended August 31, 1999 compared with other
expense of $.5 million and $.9 million, respectively, for the comparable 1998
periods. The majority of other income in the nine months ended August 31, 1999
was attributable to foreign currency transaction gains, principally in North
America. An increase in other expense at Sames, S.A. in the Third Quarter 1999
offset the foreign currency transaction gains previously mentioned.
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SAMES CORPORATION AND CONSOLIDATED SUBSIDIARIES
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
RESULTS OF OPERATIONS - (CONTINUED)
INCOME TAXES
The Company recorded an income tax expense of $.3 million and $.1 million for
the Third Quarter 1999 and the nine months ended August 31, 1999, respectively.
An income tax benefit of $0.1 million and $3.9 million was recorded for the
Third Quarter 1998 and the nine months ended August 31, 1998, respectively. The
1998 year-to-date benefit was based on a pretax loss of $8.4 million in the nine
months ended August 31, 1998, which consisted chiefly of the settlement of a
patent infringement litigation discussed above. The consolidated relationship of
income tax benefit and pretax income or loss was a function of the Company's
geographical mix of pretax profitability, and, generally, the utilization of
available domestic net operating loss carryforwards.
NET INCOME (LOSS)
As a result of all of the factors above, the Company recorded income from
continuing operations of $.6 million ($.19 per diluted share) and $1.5 million
($.50 per diluted share) in the Third Quarter 1999 and the nine months ended
August 31, 1999, respectively, compared to net income from continuing operations
of $.2 million ($.08 per diluted share) and a net loss from continuing
operations of $4.5 million (($1.50) per diluted share) for the Third Quarter
1998 and nine months ended August 31, 1998, respectively.
The Company also recorded losses from discontinued operations, net of tax of
$1.7 million (($.57) per diluted share) and $3.4 million (($1.13 per diluted
share) for the Third Quarter 1999 and the nine months ended August 31, 1999,
respectively, compared to losses, net of tax of $1.5 million (($.49) per diluted
share) and $9.4 million (($3.16) per diluted share) for the Third Quarter 1998
and the nine months ended August 31, 1998, respectively. The increase in the
Third Quarter 1999 reflects the $1.2 charge resulting from the ITW settlement
mentioned above.
LIQUIDITY AND CAPITAL RESOURCES
Cash flows from operations are the primary source of the Company's liquidity.
Short-term funds are also provided for current operations through lines of
credit and overdraft facilities. At August 31, 1999, the Company had aggregate
credit facilities of approximately $17.8 million, borrowings under these
facilities of $9.0 million, and amounts available under these facilities of $8.8
million.
In the nine months ended August 31, 1999, the Company generated cash flow of
$2.5 million from operating activities primarily due to a significant reduction
in accounts receivable and, to a lesser degree, an increase of accounts payable
from fiscal 1998 year-end levels. This was partially offset by cash usages
related to increased inventory levels and reductions of accrued liabilities.
During 1999 the Company obtained additional sources of funds of $6.0 million as
a result of $6.9 million of long-term and short-term borrowings, less principal
payments on long-term debt of $.9 million.
In the nine months ended August 31, 1999, cash of $5.6 million was used by
discontinued operations, including $2.4 million disbursed under the settlement
agreement described in note 4 of notes to consolidated financial statements.
QUARTERLY FLUCTUATIONS
The Company has experienced significant quarterly fluctuations in operating
results and anticipates that those fluctuations will continue. The fluctuations
have been caused by periodic changes in the components of the Company's sales
mix. In particular, the Company's sales of large automotive installations can
fluctuate substantially and they generally result in relatively lower gross
profit margins. Sales of standard products and spare parts typically generate
relatively higher gross profit margins. The Company therefore believes that
quarter-to-quarter comparisons of its results are not necessarily meaningful and
should not be relied upon as indications of future performance.
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<PAGE>
SAMES CORPORATION AND CONSOLIDATED SUBSIDIARIES
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
RESULTS OF OPERATIONS - (CONTINUED)
CONVERSION TO THE EURO
On January 1, 1999, eleven European Union member states adopted the euro as
their common national currency. From that date until January 1, 2002 (the
transition period), either the euro or a participating country's present
currency will be accepted as legal tender. Beginning on January 1, 2002,
euro-denominated bills and coins will be issued, and by July 1, 2002, only euro
currency will be used.
The Company will evaluate the strategic, financial, legal, and systems issues
related to the various phases of transition. While the Company does not believe
the ultimate costs of conversion will be material to its results of operations,
cash flow, or financial position, efforts will be made to address customer and
business needs on a timely basis and anticipate and prevent any complications
during the transition period.
YEAR 2000 COMPLIANCE
The "Year 2000 Issue" refers generally to the problems that some software may
have in determining the correct century for the year. For example, software with
date-sensitive functions that are not Year 2000 compliant may not be able to
determine whether "00" means 1900 or 2000, which may result in failures or the
creation of erroneous results.
The Company has developed a phased Year 2000 readiness plan for the current
versions of its products. The plan includes development of corporate awareness,
assessment, implementation, validation testing, and contingency planning. The
Company responds to customer concerns about prior versions of its products on a
case-by-case basis.
The Company has largely completed all phases of the plan with respect to the
current versions of all its products. All products (software and hardware
including micro-processors and micro-controllers) manufactured by Sames have
been verified and modified if necessary. All products sold today comply with
Year 2000 requirements. The Company is currently addressing and assuring its
customers regarding their concerns.
The Company's internal systems include both information technology ("IT") and
non-IT systems. The Company has completed an assessment of its IT systems and
non-IT systems. Outside consultants were contracted to provide assistance and
assurances.
The Company has funded the Year 2000 readiness plan from operating cash flows.
Costs incurred in connection with Year 2000 compliance projects have not been
material. Costs incurred in fiscal 1998 were approximately $200 thousand. Total
additional costs, incurred or to be incurred during fiscal 1999, are estimated
to be approximately $100 thousand.
The Company's suppliers have been contacted requesting Year 2000 information and
have responded they are currently compliant or will be compliant soon. Because
the Company is relying on information provided to it by third parties to assess
the Year 2000 readiness of such vendors, the Company cannot provide assurances
that all of its critical vendors are or will be Year 2000 ready. Also, the
Company is subject to external forces that might generally affect industry and
commerce, such as utility or transportation company Year 2000 compliance
failures and related service interruptions. Due to these external factors, the
Company cannot provide assurances that it will not be adversely affected by the
Year 2000 date change.
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<PAGE>
SAMES CORPORATION AND CONSOLIDATED SUBSIDIARIES
ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK
A substantial portion of the Company's non-U.S. transactions is denominated in
French francs. Although Sames, S.A. is not typically subject to significant
foreign exchange transaction gains or losses, its financial statements are
translated into U.S. dollars as part of the Company's consolidated financial
reporting. Fluctuations in the French franc/U.S. dollar exchange rate therefore
will affect the Company's consolidated balance sheets and statements of
operations. At August 31, 1999, the French franc had depreciated by
approximately 9.0% compared to the prior year-end. However, the average French
franc/U.S. dollar exchange rate was approximately the same in the nine months
ended August 31, 1999 compared to the comparable 1998 period. The Company also
has operations in Japan and Sweden, where transactions are denominated in
Japanese yen and Swedish krona.
In the nine months ended August 31, 1999, the net change in the cumulative
foreign currency translation adjustment account, which is a component of
stockholders' equity, was an unrealized loss of $628 thousand. An unrealized
foreign currency translation gain of $482 thousand was recorded in the nine
months ended August 31, 1998.
Foreign currency exchange transactions have not typically resulted in
significant periodic gains or losses, although Sames North America recorded a
gain of approximately $.5 million during the nine months ended August 31, 1999.
The gain was recorded due to the combination of a relatively high intercompany
payable to Sames, S.A., denominated in French francs, and the depreciation of
the French franc relative to the U.S. dollar during the period. The Company
generally does not use derivative financial instruments to manage currency
exchange risks and no such instruments were outstanding at August 31, 1999.
# # # # #
Statements regarding the Company's future plans, expectations and strategies,
potential and pending strategic alliances, collection of the accounts receivable
repurchased from ITW and the effect of its decision to discontinue the
Stockholder Rights Plan, Year 2000 compliance, and effects of the euro
conversion constitute "forward-looking statements" within the meaning of Section
27A of the Securities Act of 1933, as amended, and Section 21E of the Securities
Exchange Act of 1934, and are subject to the safe harbor created thereby.
Although the Company believes that the expectations reflected in such
forward-looking statements are reasonable, it can give no assurance that such
expectations reflected in such forward-looking statements will prove to be
correct. Important factors that could cause actual results to differ materially
from the Company's expectations include, without limitation, general economic
and market conditions, the ability of the Company to reach and implement
definitive agreements with potential strategic partners, the effectiveness of
the Company's Year 2000 compliance and transition issues related to the euro. No
assurance can be given that the forward-looking statements will prove to be
correct.
-11-
<PAGE>
SAMES CORPORATION AND CONSOLIDATED SUBSIDIARIES
PART II - OTHER INFORMATION
Item 1 See Note 5 to Consolidated Financial Statements for the period ended
August 31, 1999
Items 2, 3
4 and 5 Not applicable
Item 6 (a) Exhibits
- - - Exhibit 10.1 - Settlement Agreement, dated September 23, 1999
between ITW and Sames Corporation
- Exhibit 10.2 - Assignment of Accounts
Receivable, dated September 23, 1999
between ITW and Sames Corporation
- Exhibit 27 - Financial Data Schedule
(b) Reports on Form 8-K - None
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.
SAMES CORPORATION
/s/ RONALD A. KOLTZ
- -------------------
Vice President - Controller Corporate Accounting
Principal Accounting and Financial Officer
/s/ ARNOLD H. DRATT
- -------------------
Arnold H. Dratt - President, Chief Executive Officer and Director
Principal Executive Officer
Date OCTOBER 15, 1999
-----------------
-12-
<PAGE>
EXHIBIT 10.1
SETTLEMENT AGREEMENT
This Settlement Agreement, entered into this 23rd day of September,
1999, is by and between Illinois Tool Works Inc., a Delaware corporation
("ITW"), on the one hand, and Sames Corporation, a Delaware corporation
("Sames"), on the other hand (hereinafter collectively referred to as "the
Parties"), by and through their respective undersigned representatives.
WHEREAS, the Parties entered into an Agreement of Purchase and Sales of
Assets and Stock ("the Purchase Agreement"), dated August 31, 1998, whereby
ITW purchased certain assets of Sames (formerly Binks-Sames) used in the
conduct of its conventional spray coating business. Paragraph 2.3 of the
Purchase Agreement provided for a "Purchase Price Adjustment" under certain
circumstances. Paragraph 9 of the Purchase Agreement, provided for the
indemnification of ITW under certain circumstances with respect to
uncollected "Accounts Receivable" purchased by ITW. Sometime after the
execution of the Purchase Agreement, a dispute arose between the Parties
regarding these two provisions.
WHEREAS, contemporaneously with the Purchase Agreement, on September 30,
1998, the Parties entered into a Supply Agreement which provided for the
purchase of certain specified lines of products to be supplied by each of the
Parties to the other following the closing of the asset purchase under the
Purchase Agreement. A dispute has arisen between the Parties concerning their
respective compliance with the Supply Agreement.
WHEREAS, on March 24, 1999, ITW filed suit seeking a preliminary
injunction against Sames in the lawsuit encaptioned ILLINOIS TOOL WORKS INC.
VS. SAMES CORPORATION, in the Circuit Court of Cook County, Illinois,
Chancery Division as Case No. 99CH 04122. This suit was voluntarily dismissed
under Illinois Rule of Civil Procedure Section 5/2-1009(a) on April 28,
1999.
WHEREAS, the Parties have continued to discuss and negotiate with
respect to these disputes in an effort to reach an amicable resolution of
some or all of them.
WHEREAS, the Parties believe that their respective positions have merit,
but recognize
<PAGE>
and acknowledge the risks and uncertainties inherent in prosecuting any
action, and also the expense and length of continued proceedings necessary to
prosecute a civil action through trial and any appeals. Accordingly, it is
now the desire of the Parties to avoid continued or additional expenses and
protracted litigation, and to effect a full and final settlement of
controversies regarding the Purchase Price Adjustment and Accounts Receivable
on the terms and conditions set forth herein.
NOW, THEREFORE, in consideration of the mutual covenants herein, the
Parties agree as follows:
PURCHASE PRICE ADJUSTMENT
1. Sames agrees to pay to ITW and ITW agrees to accept in full
settlement of any claim for a Purchase Price Adjustment under the Purchase
Agreement, six million one hundred sixty-seven thousand three hundred
twenty-six dollars ($6,167,326) (the "Settlement Payment"). The Settlement
Payment shall be paid by Sames in sixteen (16) quarterly installments in the
amounts and on the dates set forth below.
<TABLE>
<CAPTION>
INSTALLMENT DUE AMOUNT DUE
----------------------------- -------------
<S> <C>
1) September 30, 1999 $385,457.88
2) December 31, 1999 $385,457.88
3) March 31, 2000 $385,457.88
4) June 30, 2000 $385,457.88
5) September 30, 2000 $385,457.88
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
INSTALLMENT DUE AMOUNT DUE
---------------------------- --------------
<S> <C>
6) December 31, 2000 $385,457.88
7) March 31, 2001 $385,457.88
8) June 30, 2001 $385,457.88
9) September 30, 2001 $385,457.88
10) December 31, 2001 $385,457.88
11) March 31, 2002 $385,457.88
12) June 30, 2002 $385,457.88
13) September 30, 2002 $385,457.88
14) December 31, 2002 $385,457.88
15) March 31, 2003 $385,457.88
16) June 30, 2003 $385,457.80
</TABLE>
Payment shall be made by wire transfer to an account for the benefit of
Illinois Tool Works Inc. pursuant to instructions provided by ITW or as ITW
otherwise directs in writing. For purposes of this Settlement Agreement, the
Purchase Price Adjustment which is settled hereunder shall
<PAGE>
include all of the issues heretofore raised or asserted by either Party which
are identified on Schedule A attached hereto.
2. Sames agrees that within twenty (20) days after written demand by
ITW, the entire Settlement Payment shall be immediately due and payable in
full by cash, wire transfer or cashier's check made payable to Illinois Tool
Works Inc., if (i) Sames is late in the payment of any installment of the
Settlement Payment, so long as it has been given notice of its nonpayment and
such payment has not been made within twenty (20) days after receipt by Sames
of such notice or (ii) Sames enters into and the closing of the transaction
takes place under an agreement for the sale of fifty-percent (50%) or more of
Sames' assets or stock to an unrelated third party.
ACCOUNTS RECEIVABLE
3. In full settlement of any claim by ITW with respect to the
indemnification for uncollected Accounts Receivable under or with respect to
the Purchase Agreement:
(a) ITW agrees to and does hereby assign to Sames all rights,
title and interest with respect to the Accounts Receivable listed on Schedule
B attached hereto.
(b) Sames agrees to pay to ITW an amount calculated as shown on
page 1 of Schedule B in the sum of nine hundred eighty-one thousand six
hundred forty-two dollars ($981,642) within five (5) days of the execution of
this Agreement.
4. ITW represents and warrants that:
(a) ITW has allocated all cash or other payments with respect to
the said Accounts Receivable as contemporaneously directed by the customer
and, if not otherwise directed by the customer, to the oldest outstanding
invoices in chronological order.
(b) The amount shown on Schedule B as outstanding for each Account
Receivable is accurate to the extent that the information supplied to ITW by
Sames on its books and records, as of September 30, 1998, is accurate, as
adjusted in accordance with GAAP or Paragraph 4(a) above for collections on
such Accounts by ITW. ITW has not forgiven any portion of any of the subject
Accounts Receivable. To the extent that ITW has not properly adjusted any
portion of the Accounts Receivable on Schedule B in accordance with GAAP or
Paragraph 4(a) above
<PAGE>
Sames is entitled to a reimbursement from ITW for such differences within 30
days of providing ITW proof of any such improper adjustment.
5. ITW will promptly report and turn over to Sames any amounts and
provide copies of any communications received with respect to the Accounts
Receivable after the date hereof. ITW agrees to make available and allow
Sames reasonable access during normal business hours upon reasonable notice
to ITW (including former Binks-Sames and Binks-ITW) the appropriate
personnel, correspondence, records, and files related to the Accounts
Receivable, and to provide such other assistance (including making ITW
personnel available to testify in related judicial or other proceedings) as
Sames may reasonably request in furtherance of its collection of said
Accounts Receivable. If ITW replacement parts and/or related service is
reasonably requested by Sames to facilitate collection of any Account
Receivable, ITW will provide such parts and/or service and bill Sames for
ITW's standard affiliate pricing for such parts or service.
SPECIFIC RELEASE AND COVENANT NOT TO SUE
6. ITW, on behalf of itself and its respective successors and assigns,
shall be conclusively deemed to have fully, finally and forever released,
relinquished, remised and discharged Sames, and its parents, subsidiaries,
affiliated companies, partners and joint venturers, and their successors and
assignees, and their past, present and future principals, agents, officers,
directors, employees, attorneys and representatives, and each of them, from
liability on or for any and all claims, actions, causes of action, suits,
covenants, contracts, representations, warranties, agreements, promises,
guarantees, indemnities, accounts, reckonings, bonds, controversies,
liabilities, obligations, damages, debts, sums of money bills, executions,
judgments and demands whatsoever, whether liquidated or unliquidated,
contingent or fixed, known or unknown, foreseen or unforeseen, past, present
or future, or at law or equity, that relate specifically to the Purchase
Price Adjustment and/or specifically to the indemnification of ITW for
uncollected Accounts Receivable as provided in this Agreement and no other
matters.
7. Sames, on behalf of itself and its respective successors and
assigns, shall be conclusively deemed to have fully, finally and forever
released, relinquished, remised and
<PAGE>
discharged ITW, and its parents, subsidiaries, affiliated companies, partners
and joint venturers, and their successors and assignees, and their past,
present and future principals, agents, officers, directors, employees,
attorneys and representatives, and each of them, from liability on or for any
and all claims, actions, causes of action, suits, covenants, contracts,
representations, warranties, agreements, promises, guarantees, indemnities,
accounts, reckonings, bonds, controversies, liabilities, obligations,
damages, debts, sums of money bills, executions, judgments and demands
whatsoever, whether liquidated or unliquidated, contingent or fixed, known or
unknown, foreseen or unforeseen, past, present or future, or at law or
equity, that relate specifically to the Purchase Price Adjustment and/or
specifically to the indemnification of ITW for uncollected Accounts
Receivable as provided in this Agreement and no other matters.
8. The Parties, and their respective successors and assigns, covenant
to not, at any time, sue, instigate, institute, cause to institute, assist in
instituting or permit to be instituted, by, through or on their behalf, any
legal, equitable, or administrative proceedings or to otherwise allege or
assert any of the claims or causes of action covered by the specific releases
set forth in Paragraphs 6 and 7, above, against any other Party hereto,
including its parent companies, subsidiary companies, affiliated companies,
partners, joint venturers, and their successors and assigns, and their past,
present and future officers, directors, employees, agents, attorneys and
representatives, and each of them; save and except for the enforcement or the
determination of their respective rights or obligations under or with respect
to this Settlement Agreement.
9. Except for the matters expressly released by the terms thereof, no
release or covenant not to sue contained herein shall be construed as a
waiver, release or covenant relating to any currently pending claim or to any
claim that may arise hereafter in the normal course and pursuant to the
Purchase Agreement, including but not limited to issues relating to the
Supply Agreement.
10. The Parties warrant and represent to each other that as of the date
of execution of this Settlement Agreement, they have no present intention of
instituting any litigation against each other with respect to any matter.
Notwithstanding the foregoing sentence, the Parties
<PAGE>
acknowledge that they have raised certain issues under the Supply Agreement,
which each Party may elect to pursue under the remedies provided by the
Supply Agreement. In addition, the Parties acknowledge that certain claims
other than those resolved by this Settlement Agreement may arise under the
terms of the Purchase Agreement, which claims shall be resolved pursuant to
the Purchase Agreement. Further, this Settlement Agreement shall not preclude
any action by Sames to recover claimed damages (for which ITW denies any
liability), if any, arising out of the commencement of said Case No. 99 CH
04122. If any amounts become due and payable to Sames by ITW as a result of
any arbitration or judicial proceeding relating to such claims by Sames, in
addition to all other remedies available to it, Sames shall have the right,
upon written notice to ITW, to offset all or any portion of such unpaid
amounts against the next ensuing installment(s) of the Purchase Price
Adjustment.
OTHER PROVISIONS
11. This Settlement Agreement (including the specific release and
covenant not to sue) shall bind and inure to the benefit of the parties
hereto, and their past, present and future officers, directors, employees,
predecessors, successors, parents, affiliates, subsidiaries, heirs,
executors, administrators, agents, attorneys, assigns and each of them.
12. Each of the Parties to this Settlement Agreement warrants,
covenants and agrees that the person executing this Settlement Agreement on
their behalf is authorized and has power to enter into and to execute this
Settlement Agreement for and on behalf of the Parties he or she represents.
13. Neither this Settlement Agreement nor any of its provisions nor any
negotiations or proceedings pursuant to the Parties' settlement is an
admission or concession of liability or wrongdoing of any nature on the part
of any Party hereto, or on the part of anyone acting on behalf of any Party
to this Settlement Agreement, and each Party has specifically denied any such
liability or wrongdoing.
14. This Settlement Agreement may be executed in separate counterpart
originals, each of which shall be considered a complete original agreement.
<PAGE>
15. This Settlement Agreement shall be construed in accordance with the
laws of the State of Illinois.
16. This Settlement Agreement has been jointly negotiated and drafted.
The language of this Settlement Agreement shall be construed as a whole
according to its fair meaning and not strictly construed in favor of or
against any party hereto.
17. This Settlement Agreement sets forth the entire, fully-integrated
agreement between the Parties hereto regarding the subjects contained herein,
and supersedes any and all prior agreements or understandings among the
Parties pertaining to the subject matter hereof. No additional agreements or
understandings shall be inferred from any of the terms of this Settlement
Agreement, as all agreements and understandings are solely and expressly set
forth herein. No change, modification, amendment, waiver, termination or
discharge of this Settlement Agreement shall be effective or binding unless
made in writing and executed by each of the Parties hereto. Except as stated
herein, this Settlement Agreement does not modify or amend any provision of
the Purchase Agreement.
18. The Parties acknowledge receipt of consideration which they agree
and represent is good, fair and sufficient for the giving of the releases and
covenant not to sue and their entering into this Settlement Agreement.
19. All notices and other communications hereunder shall be in writing
and shall be deemed given if delivered personally or mailed by registered or
certified mail (return receipt requested) to the parties at the following
addresses (or at such other address for a party as shall be specified by like
notice):
If to Purchaser: Illinois Tool Works Inc.
Attention: Corporate Secretary
Telecopy: (847) 657-4392
3600 West Lake Avenue
Glenview, Illinois 60025
With a copy to: Kirkland & Ellis
Attn: J. Robert Robertson
Telecopy: (312) 861-2200
200 E. Randolph Dr.
<PAGE>
Chicago, IL 60601
If to Seller: Binks Sames Corporation
Attn: President
Telecopy: (847) 671-3062
9201 Belmont Avenue
Franklin Park, Illinois 60131
With a copy to: Vedder, Price, Kaufman & Kammholz
Attn: Guy E. Snyder
Telecopy: (312) 609-5005
222 North LaSalle Street
Chicago, Illinois 60601
20. Each of the Parties agrees to execute and deliver such further
documents and perform such other actions as may be necessary or appropriate
to implement and carry out the intent of this Settlement Agreement and the
transactions contemplated hereunder, including the assignment and delivery to
Sames of assets, if any, that were acquired by ITW and are to be returned to
Sames in connection with the settlement of the Purchase Price Adjustment.
(SIGNATURES FOLLOW)
<PAGE>
IN WITNESS WHEREOF, the Parties have caused this Settlement Agreement to be
executed (where applicable, by their duly authorized officers) as of the date
and year first above written.
ILLINOIS TOOL WORKS INC., SAMES CORPORATION,
a Delaware corporation a Delaware corporation
By: /s/ David Speer By: /s/ Arnold H. Dratt
Its: Executive Vice President Its: President
<PAGE>
EXHIBIT 10.2
ASSIGNMENT OF ACCOUNTS RECEIVABLE
THIS ASSIGNMENT OF ACCOUNTS RECEIVABLE ("Assignment"), is made as of
September 23, 1999, by and between Illinois Tool Works Inc., a Delaware
corporation ("ITW" or "Assignor"), and Binks Sames Corporation, a Delaware
corporation ("Binks Sames" or "Assignee").
RECITALS
WHEREAS, Assignor and Assignee entered into an Agreement of Purchase and
Sale of Assets and Stock dated August 31, 1998 ("Purchase Agreement")
pursuant to which ITW agreed to purchase substantially all of the assets of
Binks Sames' conventional coating application business ("Binks Business") and
all of the issued and outstanding shares of capital stock of Binks Sames UK
Ltd., a United Kingdom corporation; Binks Sames Deutschland GmbH; a German
limited liability company; and Binks Sames International S.A., a Belgium
corporation (collectively the "Stock"). Unless otherwise provided herein,
all capitalized items used herein and not defined shall have the same
meanings given to them in the Purchase Agreement.
WHEREAS, pursuant to the Purchase Agreement, Binks Sames assigned,
transferred and conveyed to ITW all right, title and interest of Binks Sames
in and to the Accounts Receivable related to the Binks Business (the
"Accounts Receivable").
WHEREAS, Paragraph 9 of the Purchase Agreement provided for the
indemnification of ITW under certain circumstances with respect to
uncollected Accounts Receivable.
WHEREAS, a dispute arose between the Parties concerning the
indemnification of ITW with respect to uncollected Accounts Receivable which
was resolved by the terms of the Settlement Agreement between them dated
September 23, 1999 (the "Settlement Agreement").
NOW THEREFORE, in consideration of the Recitals and the mutual covenants
herein contained, the parties hereto hereby agree as follows:
1. INCORPORATION OF THE SETTLEMENT AGREEMENT. This Assignment is
subject to the
<PAGE>
terms and conditions of the Settlement Agreement and the respective
representations, warranties, covenants, agreements and obligations of
Assignor and Assignee contained in the Settlement Agreement are incorporated
herein by reference, and shall survive the execution and delivery of this
Assignment to the extent provided in the Settlement Agreement. The Parties
agree that ITW has no obligation or responsibility to collect any of the
uncollected Accounts Receivable. The only obligations that ITW has with
regard to the uncollected Accounts Receivable are those expressly set forth
in the Settlement Agreement.
2. PAYMENT. Pursuant to the Settlement Agreement, Assignee shall
within 5 days of the execution of the Settlement Agreement pay to the
Assignor the sum of $981,642.
3. ASSIGNMENT. Pursuant to the Settlement Agreement, Assignor hereby
assigns and transfers to Assignee all of its rights, title and interest of
Assignor in and to each of the Accounts Receivable listed on Exhibit A
attached hereto and all proceeds thereof.
4. MODIFICATION. No provision of this Assignment, including the
provisions of this section, may be modified, deleted or amended in any manner
except by agreement in writing executed by the parties hereto.
5. CONFLICT. If there is any conflict between the terms of this
Assignment Agreement and the terms of the Settlement Agreement, the terms of
the Settlement Agreement shall prevail.
6. NO THIRD PARTY RIGHTS. Nothing herein expressed or implied is
intended to confer upon any person, other than the parties hereto, any
rights, remedies, obligations or liabilities.
<PAGE>
7. BINDING EFFECT. This Agreement shall be binding upon and shall
inure to the benefits of the parties hereto and their respective successors
and assigns.
8. COUNTERPARTS. This Agreement may be executed in one or more
counterparts, all of which together shall constitute the same instrument.
Assignor and Assignee have each caused this Assignment to be duly executed
and delivered by its proper and duly authorized representative as of the date
first above written.
ILLINOIS TOOL WORKS INC.
By: /s/ David Speer
Its: Executive Vice President
BINKS SAMES CORPORATION
By: /s/ Arnold H. Dratt
Its: President
<TABLE> <S> <C>
<PAGE>
<ARTICLE> 5
<MULTIPLIER> 1,000
<S> <C>
<PERIOD-TYPE> 9-MOS
<FISCAL-YEAR-END> NOV-30-1999
<PERIOD-START> DEC-01-1998
<PERIOD-END> AUG-31-1999
<CASH> 7,581
<SECURITIES> 0
<RECEIVABLES> 39,051
<ALLOWANCES> 0
<INVENTORY> 19,796
<CURRENT-ASSETS> 72,089
<PP&E> 12,449
<DEPRECIATION> 7,962
<TOTAL-ASSETS> 81,500
<CURRENT-LIABILITIES> 47,341
<BONDS> 4,772
0
0
<COMMON> 2,967
<OTHER-SE> 15,789
<TOTAL-LIABILITY-AND-EQUITY> 81,500
<SALES> 65,198
<TOTAL-REVENUES> 65,198
<CGS> 40,163
<TOTAL-COSTS> 40,163
<OTHER-EXPENSES> 22,531
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 947
<INCOME-PRETAX> 1,557
<INCOME-TAX> 61
<INCOME-CONTINUING> 1,496
<DISCONTINUED> (3,372)
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> (1,876)
<EPS-BASIC> (0.63)
<EPS-DILUTED> (0.63)
</TABLE>
