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UNITED STATES SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-K
(Mark One)
[X] ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934
For the fiscal year ended March 31, 2000
OR
[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934
For the transition period from ___________ to ___________
Commission File Number 0-9321
PRINTRONIX, INC.
(EXACT NAME OF REGISTRANT AS SPECIFIED IN ITS CHARTER)
DELAWARE 95-2903992
(State or Other Jurisdiction of (I.R.S. Employer Identification No.)
Incorporation or Organization)
14600 Myford Road 92623
P.O. BOX 19559, IRVINE, CALIFORNIA (Zip Code)
(Address of Principal Executive Offices)
REGISTRANT'S TELEPHONE NUMBER, INCLUDING AREA CODE (714) 368-2300
---------------
SECURITIES REGISTERED PURSUANT TO SECTION 12(b) OF THE ACT:
NONE
SECURITIES REGISTERED PURSUANT TO SECTION 12(g) OF THE ACT:
COMMON STOCK, PAR VALUE $.01,
INCLUDING COMMON SHARE PURCHASE RIGHTS
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 by check mark if disclosure of delinquent filers pursuant to
Item 405 of Regulation S-K is not contained herein, and will not be contained,
to the best of the registrant's knowledge, in definitive proxy or information
statements incorporated by reference in Part III of this Form 10-K or any
amendment to this Form 10-K. [X]
On May 26, 2000 there were 6,241,762 shares of the Registrant's Common
Stock outstanding. The aggregate market value of the Common Stock (based upon
the closing price of $13.50 per share in the over-the-counter market on May 26,
2000) held by non-affiliates of the Registrant was $59,648,846.
DOCUMENTS INCORPORATED BY REFERENCE
Portions of the Registrant's Annual Report to Stockholders for the
fiscal year ended March 31, 2000 are incorporated by reference into Parts I, II,
and IV of this report.
Portions of the Registrant's Proxy Statement for the Annual Meeting of
Stockholders to be held on August 22, 2000 are incorporated by reference into
Part III of this report.
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PART I
ITEM 1. BUSINESS
Certain geographic information for Item 1 is contained in the Company's 2000
Annual Report to Stockholders on page 22, which information is incorporated
herein by reference (and except for that page, the Company's Annual Report to
Stockholders for the fiscal year ended March 31, 2000 is not deemed filed as
part of this report).
GENERAL
Printronix, Inc. designs, manufactures and markets medium and high speed
printers used on a wide range of computer systems and associated networks.
Printronix printers produce "hard copy" output using line matrix, laser and
thermal printing technologies. The Company's products are designed primarily for
business and industrial applications where performance and reliability are
paramount. All of the Company's printers have extensive graphics capabilities
allowing them to support most popular graphics languages while printing most
output types such as text, reports, tabular data, computer graphics, bar codes,
forms, labels, logos, etc.
Printronix, Inc. was incorporated in California in 1974 and was
reincorporated in Delaware in December 1986. Unless the context otherwise
requires, the terms "Company" and "Printronix" refer to Printronix, Inc. and its
consolidated subsidiaries.
ACQUISITION
In January 1998, the Company, through a 91.5% majority-owned subsidiary,
acquired the assets, rights to the bar code verification business and the RJS
Systems International (RJS) name, from Eltron International, Inc. by a cash
payment of $2.9 million in a business combination accounted for as a purchase.
The subsidiary, RJS is primarily engaged in bar code verification products. See
Note 2 of Notes to Consolidated Financial Statements for more detail on the
acquisition. During fiscal 1999, the ownership interest of RJS was reduced to
84.4%, which resulted from the issuance of additional shares of subsidiary
stock.
TECHNOLOGY
Printronix products include line matrix printers, laser printers and thermal
printers. This product line is unified by common printer controller architecture
called Printronix System Architecture (PSA(R)). This architecture permits all
three printing technologies to be application compatible by supporting common
graphics languages and computer host communication protocols. During fiscal 2000
the Company introduced the second generation of the Printronix System
Architecture, PSA2. All of the Company's printers support Printronix
IGP(R)/PGL(R) and IGP/VGL bar code label printing languages.
PRODUCTS
Computer printers are output devices that use electromechanical techniques
to convert digitized information sent from a host computer to printed form. The
printed output produced can then be read by people and/or machines, depending
upon the format of the output. Such devices can print on paper and other
substances, such as card stock or mylar, by means of impact or non-impact
technologies.
Impact printers are generally classified as being either text or graphics
printers and as either serial or line printers. Text printers print a
predetermined set of fully formed characters. Graphics printers print dots
anywhere on the paper and are used for text and graphics applications. Serial
printers print one character at a time and line printers print one line at a
time. Impact printers can print both single-part and multi-part forms.
Graphics printers form characters by printing dots in combinations of
patterns. Such printers are called dot matrix or line matrix printers. Serial
dot matrix printers create characters one at a time in horizontal sweeps across
the page. Printronix manufactures line matrix printers, which print a complete
line of dots, thus combining the flexibility of the matrix printing technique
with the reliability and durability of a line printer.
Non-impact printers print on paper by means of thermal, electrostatic,
inkjet, laser, LED and other techniques that deliver high resolution printed
output for letter quality and graphics applications, but print only single-part
forms.
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Line Matrix Printers
Printing is accomplished as the hammer bank shuttles a small distance back
and forth, enabling the hammers to place dots anywhere along a row across the
paper. Successive dot rows are produced by the paper advancing while the hammer
bank reverses for printing the next dot row. Dots overlap horizontally and
vertically to produce graphics as well as alphanumeric characters.
Line matrix models include the Printronix P5000 series line printer family
with speeds ranging from 500 to 1500 lines per minute. The P5000 series models
were introduced in fiscal 1996, with enhancements in fiscal 1999, and replaced
the Company's previous generation models in the MVP, P3000, P4000, P6000 and
P9000 series. Applications for line matrix printers include reports, multi-part
forms, bar codes, labels and program listings.
The P5000 series line matrix printers operate at 500, 1000 and 1500 lines
per minute as summarized below.
LINE MATRIX SPEED
PRINTER MODEL (LINES PER MINUTE) HAMMERS
------------- ------------------ -------
P5X05 500 LPM 28
P5X10 1000 LPM 60
P5X15 1500 LPM 102
The dot placement of Printronix line matrix printers is very precise,
permitting accurate character alignment. The combination of precise dot
placement anywhere on the page and the use of overlapping dots rather than fully
formed characters enables Printronix printers, under computer control, to
produce graphic output. Another key feature of the line matrix technology is
that hammer energy is optimized to print only dots, resulting in improved print
quality on multi-part forms. These printers are available in either pedestal or
floor cabinet models with local languages, a wide range of computer
capabilities and a power paper stacker for floor model units.
A new bundled option offered for the Printronix P5000 series of line matrix
printers in fiscal 2000 was PrintNet(R) Plus and Printronix Printer Manager
(PPM), which is a combination of hardware and software components that offer an
advanced IS management solution for managing networked P5000s. PrintNet Plus is
a global printing troubleshooting and management system that allows remote
management control of Printronix printers from a networked desktop. The PrintNet
interface card provides the connection to an Ethernet local area network while
PPM is a Java-based software application providing advanced configuration
management tools.
Laser Printers
The Company's fanfold laser printers create images on paper
electrographically like a copier machine. The image is fixed to the paper with
toner in the same manner as copiers. The controllers, designed by the Company,
are integrated with print engines purchased from outside suppliers. All models
are available with optional power stackers.
The LaserLine(R) printers combine print quality and speed with the distinct
advantages of fanfold forms. A straight-through paper path combined with
optional power stacking allows for long, unattended print runs. The L1024 laser
printer operates at up to 24 pages per minute. The L1024 utilizes the more
conventional heat/pressure fusing process, supports form widths up to 10 inches
and offers a 50,000 pages per month duty cycle. The L1024 is primarily used for
medium volume billing and labeling applications.
The LaserLine L5020 and L5035 fanfold laser printers operate at up to 35
pages per minute and have a unique flash fusing process which produces output of
exceptional durability and quality. Unlike other laser printers, the L5020 and
L5035 can print on a wide variety of media including synthetics and plastic
cards. The wide carriage, duty cycle and durability of the output make these
printers particularly well suited for high volume utility type billing and
labeling applications.
All Printronix LaserLine printers support Printronix System Architecture
(PSA2) which provides common software architecture across all of the three
Printronix printing technologies.
<TABLE>
<CAPTION>
SPEED DPI
LASER MODEL PAPER (PAGES PER MINUTE) (DOTS PER INCH)
----------- ----- ------------------ ---------------
<S> <C> <C> <C>
L1024 A-Size Continuous Form 24 PPM 300
L5020 14.6 Print Width Continuous 20 PPM 300
Form
L5035 14.6 Print Width Continuous 35 PPM 300
Form and Cut Sheet
</TABLE>
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Thermal Printers
The ThermaLine(R) printers create images on paper by heating thermal
sensitive media. The image is created either by heating an ink-based ribbon
which transfers its ink to the paper label material (transfer) or by heating
paper label material in which the thermally sensitive ink is already impregnated
(direct). This type of printer is especially useful in "on-demand" label
applications, such as barcode and label printing applications. The ThermaLine
printers range in print width from 4.1 to 8.5 inches and in speed from 5 to 10
inches per second. The T2000, T3000 and T4000 models use print engines purchased
from outside suppliers and are integrated with PSA2.
<TABLE>
<CAPTION>
DIRECT OR SPEED DPI
THERMAL MODEL PRINT WIDTH TRANSFER (INCHES PER SECOND) (DOTS PER INCH)
------------- ---------------- --------- ------------------- ---------------
<S> <C> <C> <C> <C>
T2204 4.1 Inch Label Both 6 IPS 203
T3204 4.1 Inch Label Both 10 IPS 203
T3306 6.4 Inch Label Both 8 IPS 300
T3308 8.5 Inch Label Both 5 IPS 300
T4204 4.1 Inch Label Both 6 IPS 203
</TABLE>
In October, the Company introduced the new T5000 printers. The T5000 thermal
printers are a family of thermal barcode and label printers that are designed,
engineered and manufactured by Printronix and utilize PSA2 and PrintNet Plus.
The T5000 also offers the unique Online Data Validation (ODV(TM)) capability
that ensures all bar codes are scannable. With PrintNet Plus, ODV and PSA2, the
T5000 sets a new standard to meet the demands of today's printing applications.
ThermaLine printers address a wide range of label printing applications in the
manufacturing, distribution, retail and healthcare sectors.
<TABLE>
<CAPTION>
DIRECT OR SPEED DPI
THERMAL MODEL PRINT WIDTH TRANSFER (INCHES PER SECOND) (DOTS PER INCH)
------------- -------------- --------- ------------------- ---------------
<S> <C> <C> <C> <C>
T5206 6.6 Inch Label Both 10 IPS 203
T5208 8.5 Inch Label Both 8 IPS 203
T5306 6.6 Inch Label Both 8 IPS 300
T5308 8.5 Inch Label Both 6 IPS 300
</TABLE>
MARKETING AND CUSTOMERS
The market for the Company's products is related to the market for computer
and bar code systems. Printronix printers are marketed worldwide directly
through major computer systems companies, for whom Printronix is an original
equipment manufacturer (OEM), and a network of full-service system integrators,
distributors and value added resellers (VARs).
The Company's 10 largest customers accounted for an aggregate of
approximately 57% of net sales for fiscal 2000 and 59% of net sales during the
fiscal 1999 and 1998. During fiscal 2000 and fiscal 1999, OEM sales and
distribution channel sales were 46% and 54% of net sales, respectively. During
fiscal 1998, OEM sales and distribution channel sales were 49% and 51% of net
sales.
In fiscal 2000, the Company had two customers which individually represented
a significant percentage of consolidated sales. Sales to the largest customer,
IBM, represented 30% of consolidated net sales in fiscal 2000 and 1999 and 28%
of consolidated net sales in fiscal 1998. Sales to the second largest customer
represented 8%, 9% and 10% of consolidated net sales for fiscal 2000, 1999 and
1998, respectively. A significant decline in sales to either customer could have
an adverse effect on the Company's operations.
COMPETITION
The Company has a wide range of printers that compete in the overall market
for medium and high speed computer printers. The overall market includes serial,
line matrix, band, laser and thermal transfer printers. This overall market
includes a large captive market which consists of computer systems manufacturers
that formerly produced their own printers and in the past have not bought from
independent printer manufacturers. Due to the increasingly competitive nature
and the level of investment now required for ongoing line matrix printer
development, all of these companies are now buying from independent
manufacturers. The Company competes on a direct basis with several companies of
varying sizes, including some of the largest businesses in the United States and
Japan, in the non-captive market. Competing products include high end serial
printers, medium and high speed line printers, laser printers, thermal printers
and other non-impact technologies.
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Competitive factors in the Company's markets include reliability,
durability, price, print quality, versatility of special performance features
and after-sales support. The Company believes that its printers are highly
competitive with regard to price/performance and cost of ownership, and that the
Company rates highly in after-sales support.
The Company has periodically evaluated other printing technologies and
intends to continue to do so. Introduction of products with superior performance
or substantially lower prices could adversely affect the Company's business.
ORDER BACKLOG
The Company's order backlog at March 31, 2000 was approximately $3.3
million, compared with $16.5 million at March 26, 1999 and $16.1 million at
March 27, 1998. The decrease in backlog compared with the prior years is due to
the Company's largest customer converting to direct shipments in the US
effective July 1999. As a result of this conversion, the customer no longer
needs to maintain any US inventory. Direct shipment provides quick, just in time
delivery to the end user. Conversion to direct shipment means the customer no
longer needs to place orders for US shipments in advance for the coming quarter.
To date, the majority of the Company's customers have converted to just in time
delivery and direct shipment so the order backlog is no longer an indication of
future sales. The backlog represents orders for which the majority of products
have a delivery date and expected ship date of three months or less.
RAW MATERIALS
The Company purchases basic mechanical and standard electronic components
from numerous outside vendors. Most of those components used in the Company's
impact printers are immediately available from alternate sources. The Company
also purchases certain components from sole sources and has no reason to believe
that it will be unable to obtain those components from other sources. However,
if the Company were to lose any sole source for a component, there could be a
delay in shipment of printers using those components until an alternate source
begins production. The Company's laser and ThermaLine printer products are
designed to use specific print engines and printer assemblies manufactured by
outside vendors. The Company has entered into written purchase agreements for
these printer components and has no reason to believe that it will be unable to
obtain the materials required.
ENGINEERING AND DEVELOPMENT
The Company operates in an industry which is subject to rapid technological
change, and its ability to compete successfully depends upon, among other
things, its ability to react to change. Accordingly, the Company is committed to
the development of new products. The Company's engineering and development
expenditures incurred were approximately $19.3 million in fiscal 2000, compared
with $18.1 million in fiscal 1999 and $15.6 million (excluding a one-time charge
of $0.9 million for in-process engineering related with the acquisition of RJS)
in fiscal 1998. Engineering personnel are located in all three key regions: the
Americas; Europe, Middle East, and Africa (EMEA); and Asia Pacific.
Substantially all expenditures were Company sponsored in fiscal 2000.
Significant engineering and development expenditures were made to expand network
management capabilities to all three printing technologies and to develop and
bring new products to market, including the new Printronix designed and
manufactured T5000 thermal printer and ODV capability that ensures all barcodes
are scannable.
PATENTS AND LICENSES
The Company has been issued 42 United States patents, and related foreign
patents (primarily in Canada, the United Kingdom, France and Germany) associated
with various aspects of its printers. Two of the United States patents expired
in May and June 2000, respectively, and one United States patent will expire in
November 2000. The Company believes that its patented line matrix printing
technology has competitive value and intends to continue its practice of
enforcing its patent rights against potential infringements where it deems
appropriate. Although there can be no assurance that the Company will be
successful in defending its rights to any of its patents, the Company believes
its patents are valid.
The Company has no material licenses from others pertaining to the
manufacture of its products, including those under development, and believes
none are currently required. The Company believes, based on industry practice,
any such licenses as might be required in the future could be obtained on terms
which would not have a material effect on it. However, the Company does have
licenses for the use of IPDS and PCL5 graphic languages. All brand names used
throughout this Form 10-K are trademarks or registered trademarks of their
respective companies.
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EMPLOYEES
The Company had 1,017 employees as of March 31, 2000 including 595 in the
United States, 346 in Asia Pacific and 76 in Europe.
None of the Company's employees in the United States or Asia Pacific are
subject to a collective bargaining agreement. Printronix Nederland BV is a
member of the Employers Union F.M.E., and some of its employees have elected to
become members of an employee union. This employee union is not government
sponsored and is supported by contributions from its members. The Company
believes that its relationship with its employees is good.
FOREIGN OPERATIONS
The Company has manufacturing facilities in Singapore, wherein line matrix
printer products and some printed circuit board assemblies are produced. Also
provided out of the Singapore facility are product support and customer service
for the Asia Pacific region. In the Netherlands, the Company has a facility that
provides product support, customer service, line matrix, thermal and laser
product distribution and assembly. International sales represented approximately
45% of the Company's total sales in fiscal 2000, and 44% in fiscal 1999 and
1998. The Company has sales offices within Germany, France, the United Kingdom,
Austria, Italy, India, China and Singapore. The Company is not aware of any
significant risks with respect to its foreign business other than those inherent
in the competitive nature of the business and fluctuations in foreign currency
exchange rates. Selected financial information regarding foreign and export
sales by geographic area is set forth in Note 8 of Notes to Consolidated
Financial Statements.
ITEM 2. PROPERTIES
In Fiscal 1998, the Company purchased land in Irvine, California, for $8.1
million to build a new corporate facility. During the third quarter of fiscal
2000, the Company's new 186,000 square foot facility was completed and occupied
with no interruption to business. The new facility consolidated into one
complex, the corporate facility, research and development and US manufacturing
operations, which were previously housed in five separate buildings. Capital
expenditures related to the construction of the building were $11.3 million in
fiscal 2000 and $4.1 million in fiscal 1999. Capital expenditures for equipment
and machinery and furniture and fixtures related to the new facility were $0.4
million and $4.8 million, respectively, during fiscal 2000.
The Company's foreign operations are located in the Netherlands and
Singapore. The Netherlands operations are in leased facilities of approximately
34,000 square feet. The Singapore operations were moved to a new 74,000 square
foot state-of-the-art building purchased in fiscal 1997 for approximately $3.8
million with an additional $3.5 million spent in capital improvements in fiscal
1997 through fiscal 2000. The Company also leases several small offices,
generally on short-term leases, throughout the United States, Asia Pacific and
Europe for sales or service. See Note 9 of Notes to Consolidated Financial
Statements for a summary of the expiration dates and lease or rental
commitments.
The Company opened a distribution and printer configuration facility in
Memphis, Tennessee, during the fourth quarter of fiscal 1999 to provide faster
delivery and support to the Eastern two-thirds of the United States. The leased
facility is approximately 44,000 square feet.
ITEM 3. LEGAL PROCEEDINGS
ENVIRONMENTAL ASSESSMENT
In January 1994, the Company was notified by the California Regional Water
Quality Control Board - Santa Ana Region ("the Board") that groundwater
monitoring reports indicated that the groundwater under one of the Company's
former production plants was contaminated with various chlorinated volatile
organic compounds (VOCs). Evidence adduced from site studies undertaken to
date indicates that compounds containing the VOCs were used by the prior tenant
during its long-term occupancy of the site. The tests also indicate that the
composition of the soil is such that off-site migration of contamination is very
slow and contamination is most likely confined to the site. Investigation
indicates that the prior occupant is a well established business enterprise
which has substantial assets and is affiliated with a publicly traded company.
In March 1996, the Company received a request from the Board for information
regarding chemicals used by the Company or others on property adjacent to the
former production plant site. Although the Company previously occupied a small
portion of this adjacent property, primarily for office space and a machine
shop, initial review indicates that the Company did not use compounds containing
VOCs on this adjacent property.
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There are presently no Board remediation orders outstanding against the
Company. As of March 31, 2000, the Company has reserved $214,000 to cover
further legal fees or any additional expenses related to environmental tests
which could be requested by the Board at the site. To date, the Company has
incurred only minimal expense in its initial response to the Board's request for
information and for environmental testing. However, the Company could be subject
to charges related to remediation of the site. These charges on a preliminary
(and very general) basis, could be estimated as follows:
Remediation involves a two-step procedure. The first step would include the
installation of a soil vapor extraction system. The cost of installation could
range from $50,000 to $100,000. There would also be annual operating costs of up
to $50,000 for a period of several years. The second step would be the
installation of a pump and water treatment system to cleanse the groundwater.
The cost of installation would range from $100,000 to $200,000. The annual
operating costs could be as high as $100,000 for a period which cannot now be
ascertained.
The Company is convinced that it bears no responsibility for any
contamination at the site and intends to vigorously defend any action which
might be brought against it in respect thereto. Furthermore, the Company
believes it has adequately accrued for any future expenditures in connection
with further legal fees or additional environmental tests that could be
requested by the Board at the site, and that such expenditures will not have a
materially adverse effect on its financial condition or results of operations.
However, because of the uncertainty of this matter there is no assurance the
actual costs will not exceed management's estimate.
LEGAL MATTERS
The Company is involved in various claims and legal matters in the ordinary
course of business. The Company does not believe that these matters will have a
material adverse effect on the Company's consolidated financial statements.
ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
The Company did not submit any matter during the fourth quarter of the
fiscal year covered by this report to a vote of security holders, through the
solicitation of proxies or otherwise.
EXECUTIVE OFFICERS OF THE REGISTRANT
The executive officers of the Company and their ages as of May 26, 2000 are
as follows:
<TABLE>
<S> <C> <C>
Robert A. Kleist........... 71 President, Chief Executive Officer and Director
Theodore A. Chapman........ 51 Senior Vice President, Engineering and Chief Technical
Officer
C. Victor Fitzsimmons...... 52 Senior Vice President, Worldwide Manufacturing
Ralph Gabai................ 62 Senior Vice President, Marketing
George L. Harwood.......... 55 Senior Vice President, Finance and Information Systems (IS),
Chief Financial Officer and Corporate Secretary
Richard A. Steele.......... 55 Senior Vice President, Sales
</TABLE>
Officers are appointed by and hold office at the pleasure of the Board of
Directors.
Mr. Kleist is one of the founders of the Company and has served as a
director and its President and Chief Executive Officer since its formation in
1974. In addition, Mr. Kleist served as Chief Financial Officer from February
1987 to October 1988, a position he also held from August 1985 until January
1986. Mr. Kleist is a director of Seagate Technology, a manufacturer of computer
disk drives.
Mr. Chapman joined the Company in November 1995 as Vice President, Product
Development. In April 1999, Mr. Chapman was appointed Senior Vice President,
Engineering and Chief Technical Officer. From July 1970 to October 1995, Mr.
Chapman held various engineering and senior management positions with IBM
Corporation.
Mr. Fitzsimmons joined the Company in September 1985 as Director of
Information Systems. In December 1988, he was appointed Vice President,
Information Systems. In May 1990, Mr. Fitzsimmons assumed responsibility for
Printronix B.V., the Company's Netherlands subsidiary. Mr. Fitzsimmons was
appointed to the additional office of Vice President, Irvine Manufacturing in
October 1990. In July 1991, he assumed responsibility for Printronix Schweiz
GmbH (formerly known as Printronix A.G.), the Company's Singapore subsidiary.
From May 1992 to October 1994 Mr. Fitzsimmons was Senior Vice President,
Manufacturing and Information Systems. In October 1994, he was appointed Senior
Vice President, Worldwide Manufacturing. From September 1979 to September 1985,
Mr. Fitzsimmons held various senior IS positions at Magnavox.
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Mr. Gabai joined the Company in August 1998 as Senior Vice President,
Marketing. Prior to that time, Mr. Gabai had served as a director of the Company
since 1988. From April to August 1998, Mr. Gabai was President of Bi-Coastal
Consulting Ltd., a firm specializing in management consulting, a position he
also held from March 1984 to December 1996. From December 1996 to April 1998,
Mr. Gabai was President and Chief Executive Officer of MicroNet Technology,
Inc., a manufacturer and marketer of Storage Systems and RAID Memory Systems.
From June 1981 to March 1984, Mr. Gabai was the Chairman and Chief Executive
Officer of Microperipherals Inc., which engaged in the business of manufacturing
flexible disk drives. From July 1987 until December 1989, Mr. Gabai was Chairman
and Chief Executive Officer of Triplex Corporation, a manufacturer of fault
tolerant programmable controllers. From January to December 1990, Mr. Gabai was
Chairman and Chief Executive Officer of Unistructure, Inc., a firm engaged in
high density electronic packaging.
Mr. Harwood joined the Company in October 1988 as Senior Vice President,
Finance and Chief Financial Officer. Mr. Harwood was appointed to the additional
office of Corporate Secretary in January 1989. In October 1994, Mr. Harwood
assumed responsibility for the Company's Information Systems. From December 1984
to October 1988, Mr. Harwood was Chief Financial Officer and Vice President,
Finance at Qume Corporation. From December 1982 to December 1984, Mr. Harwood
was Group Controller of ITT Automotive Products, Worldwide. In prior years, Mr.
Harwood has held various senior financial positions at ITT in Brussels, London,
and Zambia. Mr. Harwood is a Fellow of the Institute of Chartered Accountants in
England and has had seven years of public accounting experience, primarily at
Price Waterhouse LLP.
Mr. Steele joined the Company in July 1991 as Senior Vice President, Sales
and Marketing. From May 1990 to June 1991, Mr. Steele was Senior Vice President,
Sales and Marketing at DataWare. From May 1989 to May 1990, Mr. Steele was Vice
President, Sales and Marketing at Talaris. From April 1972 to January 1987, Mr.
Steele held various positions including District Sales Manager, National Sales,
and Vice President, Sales and Marketing at Datagraphix. In January 1987,
Datagraphix became Anacomp, Inc. and Mr. Steele was appointed Senior Vice
President, Sales and Marketing, a position he held until October 1988. In prior
years, Mr. Steele held various positions in sales management and systems
engineering at IBM.
PART II
Information for Items 5, 6, a portion of 7 and Item 8 is contained in the
Company's 2000 Annual Report to Stockholders on the following pages, which
information is incorporated herein by reference (and except for these pages, the
Company's Annual Report to Stockholders for the fiscal year ended March 31, 2000
is not deemed filed as part of this report):
<TABLE>
<CAPTION>
ANNUAL REPORT TO
STOCKHOLDERS
ITEM NO. TITLE PAGE REFERENCE
----------- ----- ----------------
<S> <C> <C>
Item 5. Market for Registrant's Common Equity and 24, back cover
Related Stockholder Matters
Item 6. Selected Financial Data inside cover
Item 7. Management's Discussion and Analysis of 9-11
Results of Operations and Financial
Condition
Item 8. Financial Statements and Supplementary Data 12-24
</TABLE>
ITEM 7. MANAGEMENT'S DISCUSSION AND ANALYSIS OF RESULTS OF OPERATION AND
FINANCIAL CONDITION
In addition to the matter contained in the Company's 2000 Annual Report
to Stockholders, the Company reports that sales for the first quarter of fiscal
year 2001 are running at a rate below that of the prior year quarter, as
disclosed in its press release of May 24, 2000. The downturn is across all
channels (distributors and OEMs) and across all geographic territories. The
Company has not yet identified the reasons for the downturn. Accordingly, it
does not classify the downturn as a trend. However, earnings for the first
quarter of fiscal year 2001 will be materially lower than for the prior year
quarter and there may be a materially unfavorable impact in ensuing quarters.
ITEM 9. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND
FINANCIAL DISCLOSURE
None
PART III
Information required under Item 10 "Directors and Executive Officers of the
Registrant" (except for certain information concerning the Executive Officers
provided in Part I of this report), Item 11 "Executive Compensation," Item 12
"Security Ownership of Certain Beneficial Owners and Management," and Item 13
"Certain Relationships and Related Transactions" has been omitted from this
report. Such information is hereby incorporated by reference from Printronix's
Proxy Statement for its Annual Meeting of Stockholders to be held on August 22,
2000 which the Company intends to file with the Securities and Exchange
Commission not later than July 12, 2000.
8
<PAGE> 9
PART IV
ITEM 14. EXHIBITS, FINANCIAL STATEMENT SCHEDULES AND REPORTS ON FORM 8-K
(a) Index to Financial Statements
1. Financial Statements included in Part II of this report:
<TABLE>
<CAPTION>
*PAGE IN
ANNUAL REPORT
-------------
<S> <C>
Report of Independent Public Accountants 24
Consolidated Balance Sheets as of March 31, 2000 and March 26, 1999 12
Consolidated Statements of Income for each of the three years in the period ended March 31, 2000 13
Consolidated Statements of Stockholders' Equity for each of the three years in the period ended
March 31, 2000 14
Consolidated Statements of Cash Flows for each of the three years in the period ended March 31, 2000 15
Notes to Consolidated Financial Statements 16-23
</TABLE>
* Incorporated by reference from the indicated pages of the Company's Annual
Report to Stockholders for the fiscal year ended March 31, 2000 (and except
for these pages, the Company's Annual Report to Stockholders for the fiscal
year ended March 31, 2000, is not deemed filed as part of this report).
2. Schedules supporting the Consolidated Financial Statements:
<TABLE>
<CAPTION>
PAGE IN THIS REPORT
-------------------
<S> <C>
Report of Independent Public Accountants on Schedules 10
Schedule II - Valuation and Qualifying Accounts 12
</TABLE>
All schedules except Schedule II have been omitted for the reason that the
required information is shown in financial statements or notes thereto, the
amounts involved are not significant or the schedules are not applicable.
(b) Reports on Form 8-K
None
(c) Exhibits
Reference is made to the Index of Exhibits beginning at page 13 of this
report which index is incorporated herein by reference.
(d) Other Financial Statements
There are no financial statements required to be filed by Regulation S-X
which are excluded from the annual report to stockholders by Rule
14a-3(b)(1).
9
<PAGE> 10
REPORT OF INDEPENDENT PUBLIC ACCOUNTANTS
To The Board of Directors and Stockholders of Printronix, Inc.:
We have audited in accordance with auditing standards generally accepted in the
United States, the financial statements included in Printronix, Inc.'s annual
report to stockholders incorporated by reference in this Form 10-K, and have
issued our report thereon dated April 28, 2000. Our audit was made for the
purpose of forming an opinion on those statements taken as a whole. The schedule
listed in the index above is the responsibility of the Company's management and
is presented for purposes of complying with the Securities and Exchange
Commission's rules and is not part of the basic financial statements. This
schedule has been subjected to the auditing procedures applied in the audit of
the basic financial statements and, in our opinion, fairly states in all
material respects the financial data required to be set forth therein in
relation to the basic financial statements taken as a whole.
ARTHUR ANDERSEN LLP
Orange County, California
April 28, 2000
10
<PAGE> 11
SIGNATURES
Pursuant to the requirements of Section 13 or 15(d) 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.
Dated: June 26, 2000
PRINTRONIX, INC.
By: /s/ ROBERT A. KLEIST
--------------------------------------
Robert A. Kleist, President
Pursuant to the requirements of the Securities Exchange Act of 1934, this
report has been signed below by the following persons on behalf of the
Registrant and in the capacities and on the dates indicated.
<TABLE>
<CAPTION>
SIGNATURE TITLE DATE
--------- ----- ----
<S> <C> <C>
/s/ ROBERT A. KLEIST President, Chief Executive Officer and June 26, 2000
---------------------------------- Director (Principal Executive Officer)
Robert A. Kleist
/s/ GEORGE L. HARWOOD Senior Vice President, Finance & IS, Chief June 26, 2000
---------------------------------- Financial Officer and Corporate Secretary
George L. Harwood (Principal Accounting and Financial Officer)
/s/ BRUCE T. COLEMAN Director June 26, 2000
----------------------------------
Bruce T. Coleman
/s/ JOHN R. DOUGERY Director June 26, 2000
----------------------------------
John R. Dougery
/s/ CHRIS WHITNEY HALLIWELL Director June 26, 2000
----------------------------------
Chris Whitney Halliwell
/s/ ERWIN A. KELEN Director June 26, 2000
----------------------------------
Erwin A. Kelen
</TABLE>
11
<PAGE> 12
PRINTRONIX, INC. AND SUBSIDIARIES
---------------
SCHEDULE II - VALUATION AND QUALIFYING ACCOUNTS
FOR EACH OF THE THREE YEARS IN THE PERIOD ENDED MARCH, 2000
<TABLE>
<CAPTION>
ADDITIONS
----------------------
BALANCE AT CHARGED TO CHARGED BALANCE
BEGINNING COST AND TO OTHER AT END
DESCRIPTION OF PERIOD EXPENSES ACCOUNTS DEDUCTIONS OF PERIOD
----------- --------- ---------- -------- ---------- ---------
<S> <C> <C> <C> <C> <C>
YEAR ENDED
MARCH 31, 2000
Allowance for
doubtful accounts $2,302,000 $ 359,000 $ -- $227,000 A $ 2,434,000
========== ========== ========= ======== ===========
YEAR ENDED
MARCH 26, 1999
Allowance for
doubtful accounts $1,920,000 $ 729,000 $ -- $347,000 A $ 2,302,000
========== ========== ========= ======== ===========
YEAR ENDED
MARCH 27, 1998
Allowance for
doubtful accounts $1,010,000 $1,089,000 $ -- $179,000 A $ 1,920,000
========== ========== ========= ======== ===========
</TABLE>
DESCRIPTIONS OF OTHER ADDITIONS AND DEDUCTIONS:
A -- Write-off of bad debt
12
<PAGE> 13
INDEX OF EXHIBITS
<TABLE>
<CAPTION>
EXHIBIT NUMBER DESCRIPTION
-------------- -----------
<S> <C>
3.1 Certificate of Incorporation of Printronix, Inc.
(incorporated by reference to exhibit 3.1 to the Company's
Report on Form 10-K for fiscal year ended March 27, 1998).
3.2 By-laws of Printronix, Inc. currently in effect
(incorporated by reference to the Company's report on Form
10-K for fiscal year ended March 31, 1989), as amended in
Exhibit 3.2a.
3.2a Amendment to By-laws of Printronix, Inc. (incorporated by
reference to the Company's report on Form 10-K for fiscal
year ended March 26, 1999).
4.1 Copies of certain instruments, which in accordance with
paragraph (b)(4)(iii) of Item 601 of Regulation S-K are
not required to be filed as exhibits to Form 10-K, have
not been filed by Printronix. Printronix agrees to furnish
a copy of any such instrument to the Securities and
Exchange Commission upon request.
4.2 Amended and Restated Rights Agreement, dated as of April
4, 1999 between Printronix, Inc. and ChaseMellon
Shareholder Services, L.L.C., including the form of Rights
Certificate and the Summary of Rights attached thereto as
Exhibits A and B, respectively (incorporated by reference
to Exhibit 1 to the Company's Registration Statement on
Form 8-A/A filed on or about May 7, 1999).
10.1 Printronix, Inc. 1980 Employee Stock Purchase Plan, as
amended (incorporated by reference to Exhibits 4.1 and 4.2
to Post-Effective Amendment No. 5 to Registration
Statement No. 2-70035 on Form S-8).
10.2 Printronix, Inc. 1984 Stock Incentive Plan, as amended
(incorporated by reference to Exhibits 4.3 and 4.4 to
Registration Statement No. 33-14288 on Form S-8).
10.3 Form of Indemnification Agreement between Printronix, Inc.
and its directors (incorporated by reference to Exhibit
10.4 to the Company's Report on Form 10-K for the fiscal
year ended March 27, 1987).
10.4 Printronix, Inc. Executive Health Insurance Plan
(incorporated by reference to Exhibit 10.5 to the
Company's Report on Form 10-K for the fiscal year ended
March 29, 1985).
10.5 Printronix, Inc. 1994 Stock Incentive Plan (incorporated
by reference to Exhibit 10.10 to the Company's Report on
Form 10-K for the fiscal year ended March 25, 1994).
10.5a Printronix, Inc. 1994 Stock Incentive Plan, as amended
(incorporated by reference to the Company's 1997 Proxy
Statement dated August 12, 1997).
10.5b Printronix, Inc. 1994 Stock Incentive Plan, as amended
(incorporated by reference to the Company's 1999 Proxy
Statement dated August 17, 1999).
10.6 Restricted Stock Purchase Agreement dated October 8, 1997
between the Company and Robert A. Kleist (incorporated by
reference to Exhibit 10.11 to the Company's Report on Form
10-K for the fiscal year ended March 27, 1998).
10.6a Amendment to Restricted Stock Purchase Agreement dated
March 26, 1999 between the Company and Robert A. Kleist
(incorporated by reference to the Company's report on Form
10-K for fiscal year ended March 26, 1999).
10.7 Restricted Stock Purchase Agreement dated October 8, 1997
between the Company and J. Edward Belt (incorporated by
reference to Exhibit 10.12 to the Company's Report on Form
10-K for the fiscal year ended March 27, 1998).
</TABLE>
13
<PAGE> 14
<TABLE>
<CAPTION>
EXHIBIT NUMBER DESCRIPTION
-------------- -----------
<S> <C>
10.7a Amendment to Restricted Stock Purchase Agreement dated
March 26, 1999 between the Company and J. Edward Belt
(incorporated by reference to the Company's report on Form
10-K for fiscal year ended March 26, 1999).
10.8 Restricted Stock Purchase Agreement dated October 8, 1997
between the Company and George L. Harwood (incorporated by
reference to Exhibit 10.13 to the Company's Report on Form
10-K for the fiscal year ended March 27, 1998).
10.8a Amendment to Restricted Stock Purchase Agreement dated
March 26, 1999 between the Company and George L. Harwood
(incorporated by reference to the Company's report on Form
10-K for fiscal year ended March 26, 1999).
10.9 Restricted Stock Purchase Agreement dated October 8, 1997
between the Company and C. Victor Fitzsimmons
(incorporated by reference to Exhibit 10.14 to the
Company's Report on Form 10-K for the fiscal year ended
March 27, 1998).
10.9a Amendment to Restricted Stock Purchase Agreement dated
March 26, 1999 between the Company and C. Victor
Fitzsimmons (incorporated by reference to the Company's
report on Form 10-K for fiscal year ended March 26, 1999).
10.10 Restricted Stock Purchase Agreement dated October 8, 1997
between the Company and Richard A. Steele (incorporated by
reference to Exhibit 10.15 to the Company's Report on Form
10-K for the fiscal year ended March 27, 1998).
10.10a Amendment to Restricted Stock Purchase Agreement dated
March 26, 1999 between the Company and Richard A. Steele
(incorporated by reference to the Company's report on Form
10-K for fiscal year ended March 26, 1999).
10.11 Restricted Stock Purchase Agreement dated October 8, 1997
between the Company and Gordon B. Barrus (incorporated by
reference to Exhibit 10.16 to the Company's Report on Form
10-K for the fiscal year ended March 27, 1998).
10.11a Amendment to Restricted Stock Purchase Agreement dated
March 26, 1999 between the Company and Gordon B. Barrus
(incorporated by reference to the Company's report on Form
10-K for fiscal year ended March 26, 1999).
10.12 Restricted Stock Purchase Agreement dated October 8, 1997
between the Company and Theodore A. Chapman (incorporated
by reference to Exhibit 10.17 to the Company's Report on
Form 10-K for the fiscal year ended March 27, 1998).
10.12a Amendment to Restricted Stock Purchase Agreement dated
March 26, 1999 between the Company and Theodore A. Chapman
(incorporated by reference to the Company's report on Form
10-K for fiscal year ended March 26, 1999).
10.13 Restricted Stock Purchase Agreement dated October 8, 1997
between the Company and Philip Low Fook (incorporated by
reference to Exhibit 10.18 to the Company's Report on Form
10-K for the fiscal year ended March 27, 1998).
10.13a Amendment to Restricted Stock Purchase Agreement dated
March 26, 1999 between the Company and Philip Low Fook
(incorporated by reference to the Company's report on Form
10-K for fiscal year ended March 26, 1999).
10.14 Restricted Stock Purchase Agreement dated October 8, 1997
between the Company and Bruce T. Coleman (incorporated by
reference to Exhibit 10.19 to the Company's Report on Form
10-K for the fiscal year ended March 27, 1998).
10.14a Amendment to Restricted Stock Purchase Agreement dated
March 26, 1999 between the Company and Bruce T. Coleman
(incorporated by reference to the Company's report on Form
10-K for fiscal year ended March 26, 1999).
10.15 Restricted Stock Purchase Agreement dated October 8, 1997
between the Company and John R. Dougery (incorporated by
reference to Exhibit 10.20 to the Company's Report on Form
10-K for the fiscal year ended March 27, 1998).
</TABLE>
14
<PAGE> 15
<TABLE>
<CAPTION>
EXHIBIT NUMBER DESCRIPTION
-------------- -----------
<S> <C>
10.15a Amendment to Restricted Stock Purchase Agreement dated
March 26, 1999 between the Company and John R. Dougery
(incorporated by reference to the Company's report on Form
10-K for fiscal year ended March 26, 1999).
10.16 Restricted Stock Purchase Agreement dated October 8, 1997
between the Company and Ralph Gabai (incorporated by
reference to Exhibit 10.21 to the Company's Report on Form
10-K for the fiscal year ended March 27, 1998).
10.16a Amendment to Restricted Stock Purchase Agreement dated
March 26, 1999 between the Company and Ralph Gabai
(incorporated by reference to the Company's report on Form
10-K for fiscal year ended March 26, 1999).
10.16b Restricted Stock Purchase Agreement, dated August 21, 1998
between the Company and Ralph Gabai (incorporated by
reference to the Company's report on Form 10-K for fiscal
year ended March 26, 1999).
10.16c Amendment to Restricted Stock Purchase Agreement dated
March 26, 1999 between the Company and Ralph Gabai
(incorporated by reference to the Company's report on Form
10-K for fiscal year ended March 26, 1999).
10.17 Restricted Stock Purchase Agreement dated October 8, 1997
between the Company and Erwin A. Kelen (incorporated by
reference to Exhibit 10.22 to the Company's Report on Form
10-K for the fiscal year ended March 27, 1998).
10.17a Amendment to Restricted Stock Purchase Agreement dated
March 26, 1999 between the Company and Erwin A. Kelen
(incorporated by reference to the Company's report on Form
10-K for fiscal year ended March 26, 1999).
10.18 Restricted Stock Purchase Agreement dated August 21, 1998
between the Company and Chris Whitney Halliwell
(incorporated by reference to the Company's report on Form
10-K for fiscal year ended March 26, 1999).
10.18a Amendment to Restricted Stock Purchase Agreement dated
March 26, 1999 between the Company and Chris Whitney
Halliwell (incorporated by reference to the Company's
report on Form 10-K for fiscal year ended March 26, 1999).
13 The Company's Annual Report to Stockholders for the fiscal
year ended March 31, 2000, (with the exception of the
information incorporated by reference into Items 5, 6, 7
and 8 of this report, the Annual Report to Stockholders is
not deemed to be filed as part of this report).
21 List of Printronix's subsidiaries.
23 Consent of Independent Public Accountants, Arthur Andersen
LLP, to the incorporation of their reports herein to
Registration Statement Nos. 2-70035, 33-14288 and
33-83156.
27 Financial Data Schedule (this schedule contains summary
financial information extracted from the Company's Annual
Report for the fiscal year ended March 31, 2000 and is
qualified in its entirety by reference to such financial
statements).
</TABLE>
15
