THIS REPORT HAS BEEN FILED WITH THE SECURITIES
AND EXCHANGE COMMISSION VIA EDGAR
- -----------------------------------------------------------------
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
- -----------------------------------------------------------------
FORM 10-Q
[X] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
For the Quarterly Period Ended June 30, 1995
or
[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF
THE SECURITIES EXCHANGE ACT OF 1934
Commission File No. 1-7695
KUHLMAN CORPORATION
(Exact name of registrant as specified in its charter)
Delaware 58-2058047
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
1 Skidaway Village Walk, Suite 201
Savannah, Georgia 31411
(Address of principal executive offices)(Zip Code)
Registrant's telephone number, including area code--(912) 598-7809
Indicate by check mark whether the registrant (1) has filed all
reports required to be filed by Section 13 or 15(d) of the Securities
Exchange Act of 1934 during the preceding 12 months (or for such
shorter period that the registrant was required to file such reports),
and (2) has been subject to such filing requirements for the past 90
days.
Yes X No
----------- -----------
Indicate the number of shares outstanding of each of the issuer's
classes of common stock, as of the latest practicable date.
Class Outstanding at July 31, 1995
----- ----------------------------
Common Stock, $1.00 Par Value 13,232,444
- ----------------------------------------------------------------------
<PAGE>
PART 1.
ITEM 1. FINANCIAL STATEMENTS
KUHLMAN CORPORATION AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF INCOME
<TABLE>
<CAPTION>
Three Months Ended Six Months Ended
June 30, June 30,
----------------------- -----------------------
1995 1994 1995 1994
---------- ---------- ---------- ----------
(Unaudited)
(In thousands, except per share data)
<S> <C> <C> <C> <C>
Net sales . . . . . . . $ 102,814 $ 95,679 $ 209,740 $ 194,841
Cost of goods sold. . . 83,423 76,554 169,636 156,061
---------- ---------- ---------- ----------
Gross profit . . . . . 19,391 19,125 40,104 38,780
Selling, engineering,
general and
administrative
expenses . . . . . . 13,391 13,121 26,913 26,155
---------- ---------- ---------- ----------
Operating profit. . . . 6,000 6,004 13,191 12,625
---------- ---------- ---------- ----------
Other income(expense):
Interest expense, net (1,827) (1,598) (3,683) (3,506)
Merger expenses. . . (4,510) --- (4,510) ---
Other, net . . . . . 817 (239) 1,376 (130)
---------- ---------- ---------- ----------
Total other
income(expense), net (5,520) (1,837) (6,817) (3,636)
---------- ---------- ---------- ----------
Income before taxes and
extraordinary item 480 4,167 6,374 8,989
Taxes on income . . . . 1,205 1,580 3,551 3,542
---------- ---------- ---------- ----------
Income(loss) before
extraordinary item. . . (725) 2,587 2,823 5,447
Extraordinary item (net of
tax effect of $1,175) (1,861) --- (1,861) ---
---------- ---------- ---------- ----------
Net income(loss). . . . $ (2,586) $ 2,587 $ 962 $ 5,447
========== ========== ========== ==========
Per share amounts:
Income(loss) before
extraordinary item $ (0.06) $ 0.19 $ 0.21 $ 0.40
Extraordinary item . (0.14) --- (0.14) ---
---------- ---------- ---------- ----------
Net income(loss) . . $ (0.20) $ 0.19 $ 0.07 $ 0.40
========== ========== ========== ==========
Average shares
outstanding. . . . . 13,188 13,716 13,158 13,691
========== ========== ========== ==========
</TABLE>
The Notes To Consolidated Financial Statements
should be read in conjunction with these statements.
<PAGE>
KUHLMAN CORPORATION AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
(In thousands)
<TABLE>
<CAPTION>
June 30, December 31,
1995 1994
-------- --------
(Unaudited)
ASSETS
<S> <C> <C>
Current assets:
Cash and cash equivalents . . . . . . . . . . . $ 3,797 $ 3,036
Accounts receivable, less reserves of $1,167
and $990 at June 30, 1995 and December 31, 1994,
respectively 61,118 59,892
Inventories . . . . . . . . . . . . . . . . . . 45,155 43,713
Deferred income taxes. . . . . . . . . . . . . . 4,194 6,071
Prepaid expenses and other current assets . . . 3,258 5,887
-------- --------
Total current assets . . . . . . . . . . . . 117,522 118,599
-------- --------
Plant and equipment, at cost:
Land, buildings and leasehold improvements . . . 36,415 35,977
Machinery and equipment . . . . . . . . . . . . 109,937 107,692
Construction in progress . . . . . . . . . . . . 3,256 2,668
-------- --------
. . . . . . . . . . . . . . . . . . . . . . . 149,608 146,337
Less - accumulated depreciation . . . . . . . . (84,283) (81,587)
-------- --------
. . . . . . . . . . . . . . . . . . . . . . . 65,325 64,750
-------- --------
Intangible assets, net of amortization of $2,045
and $1,496 at June 30, 1995 and December 31, 1994,
respectively 38,553 39,452
Other assets . . . . . . . . . . . . . . . . . . . 3,990 6,384
-------- --------
. . . . . . . . . . . . . . . . . . . . . . . $225,390 $229,185
======== ========
LIABILITIES AND SHAREHOLDERS' EQUITY
Current liabilities:
Notes payable. . . . . . . . . . . . . . . . . . $ --- $ 2,000
Current portion of long-term debt . . . . . . . 8,746 5,878
Accounts payable . . . . . . . . . . . . . . . . 31,543 30,624
Accrued liabilities . . . . . . . . . . . . . . 27,650 30,596
-------- --------
Total current liabilities . . . . . . . . . . 67,939 69,098
-------- --------
Bank debt. . . . . . . . . . . . . . . . . . . . . 71,839 59,253
Other long-term debt . . . . . . . . . . . . . . . 3,339 17,642
-------- --------
Total long-term debt. . . . . . . . . . . . . 75,178 76,895
-------- --------
Accrued postretirement benefits . . . . . . . . . 8,611 8,943
-------- --------
Deferred income taxes. . . . . . . . . . . . . . . 1,133 1,033
-------- --------
Total liabilities . . . . . . . . . . . . . . 152,861 155,969
-------- --------
Shareholders' equity:
Preferred stock, par value $1.00, authorized
2,000 shares, none issued; Junior participating
preferred stock, series A, no par value,
authorized 200 shares, none issued --- ---
Common stock, par value $1.00, authorized
20,000 shares, issued 13,205 shares at
June 30, 1995 and 13,100 at December 31, 1994,
respectively . . . . . . . . . . . . . . . . . 13,205 13,100
Additional paid-in capital . . . . . . . . . . . 26,066 25,300
Retained earnings . . . . . . . . . . . . . . . 34,727 36,672
Cumulative translation adjustment. . . . . . . . (1,426) (1,813)
Minimum pension liability. . . . . . . . . . . . (43) (43)
-------- --------
Total shareholders' equity . . . . . . . . . 72,529 73,216
-------- --------
$225,390 $229,185
======== ========
</TABLE>
The Notes to Consolidated Financial Statements
should be read in conjunction with these statements.
<PAGE>
KUHLMAN CORPORATION AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS
<TABLE>
<CAPTION>
Six Months Ended
June 30,
--------------------
1995 1994
-------- --------
(Unaudited)
(In thousands)
<S> <C> <C>
CASH FLOWS FROM OPERATING ACTIVITIES:
Net income . . . . . . . . . . . . . . . . . . . . $ 962 $ 5,447
Adjustments to reconcile net income to net cash
provided by operating activities:
Extraordinary item, net. . . . . . . . . . . . . 1,861 ---
Merger expenses. . . . . . . . . . . . . . . . . 4,510 ---
Depreciation and amortization . . . . . . . . . 6,060 5,931
Deferred income taxes, net . . . . . . . . . . . 2,351 1,978
Provision for losses on accounts receivable . . 839 107
(Gain) loss on sale of assets. . . . . . . . . . (29) 20
Other, net . . . . . . . . . . . . . . . . . . . 548 (557)
Changes in operating assets and liabilities:
Accounts receivable . . . . . . . . . . . . . (1,221) (588)
Inventories . . . . . . . . . . . . . . . . . (1,289) 2,956
Prepaid expenses and other current assets . . 2,444 (1,062)
Accounts payable. . . . . . . . . . . . . . . 306 4,269
Accrued expenses. . . . . . . . . . . . . . . (3,855) (3,095)
-------- --------
Net cash provided by operating activities . . . . 13,487 15,406
-------- --------
CASH FLOWS FROM INVESTING ACTIVITIES:
Capital expenditures . . . . . . . . . . . . . . (5,776) (4,305)
Proceeds from the sale of equipment . . . . . . 89 100
-------- --------
Net cash used by investing activities . . . . . . (5,687) (4,205)
-------- --------
CASH FLOWS FROM FINANCING ACTIVITIES:
Change in revolver . . . . . . . . . . . . . . . (927) (22,955)
Proceeds from issuance of long-term debt . . . . 24,814 0
Repayments of long-term debt . . . . . . . . . . (25,385) (2,765)
Dividends . . . . . . . . . . . . . . . . . . . (1,848) (1,806)
Stock options exercised . . . . . . . . . . . . 722 541
Payments for merger and related expenses . . . . (4,601) ---
Restricted cash. . . . . . . . . . . . . . . . . --- 1,800
Other. . . . . . . . . . . . . . . . . . . . . . 109 ---
-------- --------
Net cash used by financing activities . . . . . . (7,116) (25,185)
-------- --------
Effect of exchange rate changes on cash and cash
equivalents. . . . . . . . . . . . . . . . . . . 77 38
-------- --------
Net increase(decrease) in cash and cash equivalents 761 (13,946)
Cash and cash equivalents at beginning of period . 3,036 18,994
-------- --------
Cash and cash equivalents at end of period . . . . $ 3,797 $ 5,048
======== ========
Supplemental disclosure of cash flow information:
Cash paid during the period for:
Interest . . . . . . . . . . . . . . . . . . . . $ 3,815 $ 4,272
======== ========
Income taxes, net of refunds . . . . . . . . . . $ 839 $ 1,008
======== ========
</TABLE>
The Notes To Consolidated Financial Statements
should be read in conjunction with these statements.
<PAGE>
KUHLMAN CORPORATION AND SUBSIDIARIES
CONSOLIDATED STATEMENT OF SHAREHOLDERS' EQUITY
For The Six Months Ended June 30, 1995
(Unaudited)
(In thousands)
<TABLE>
<CAPTION>
Additional Cumulative Minimum
Common Paid-in Retained Translation Pension
Stock Capital Earnings Adjustment Liability Total
-------- -------- -------- --------- -------- --------
<S> <C> <C> <C> <C> <C> <C>
Balances at
December 31, 1994 $ 13,100 $ 25,300 $ 36,672 $ (1,813) $ (43) $ 73,216
-------- -------- -------- -------- -------- --------
Net income --- --- 962 --- --- 962
Foreign currency
translation
adjustment --- --- --- 387 --- 387
Cash dividends declared
($0.30 per share) (1) --- --- (2,907) --- --- (2,907)
Issuance of stock 16 176 --- --- --- 192
Stock options exercised 89 633 --- --- --- 722
Other --- (43) --- --- --- (43)
-------- -------- -------- -------- -------- --------
Balances at
June 30, 1995 $ 13,205 $ 26,066 $ 34,727 $ (1,426) $ (43) $ 72,529
======== ======== ======== ======== ======== ========
</TABLE>
(1) Dividends per share prior to May 31, 1995 have not been restated to
reflect the Schwitzer merger.
Notes To Consolidated Financial Statements
should be read in conjunction with these statements.
<PAGE>
KUHLMAN CORPORATION AND SUBSIDIARIES
----------------------------
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
For the Three and Six Months Ended June 30, 1995
(Unaudited)
1. Consolidated Financial Statements
On May 31, 1995, Kuhlman Corporation (the "Company") merged
with Schwitzer, Inc. ("Schwitzer"). The merger was accounted for
as a pooling of interests. The financial information has been
restated to reflect the combined balance sheets and results of
operations of both companies as if the merger had been in effect
for all periods presented. Further information pertaining to the
merger is presented in Note 2 - Merger with Schwitzer, Inc.
The consolidated balance sheet at June 30, 1995 and the
related consolidated statements of income, cash flows and
shareholders' equity for the periods ended June 30, 1995 and
1994, have been prepared by the Company without audit. In the
opinion of management, all adjustments (which include only
normal recurring adjustments) necessary to present fairly the
financial position of the Company at June 30, 1995 and the
results of operations and cash flows for three and six months
ended June 30, 1995 and 1994, have been made.
Certain information and footnote disclosures normally
included in financial statements prepared in accordance with
generally accepted accounting principles have been omitted from
the accompanying financial statements. These consolidated
financial statements should be read in conjunction with the
supplemental consolidated financial statements and notes thereto
contained in the Company's current report on Form 8-K dated July
21, 1995 and the consolidated financial statements and notes
thereto contained in the Company's and Schwitzer's Annual Reports
on Form 10-K for the year ended December 31, 1994 and January 1,
1995, respectively.
The results of operations for the six months ended June 30,
1995 are not necessarily indicative of the results to be expected
for the full year 1995.
Certain amounts in the 1994 consolidated financial statements
have been reclassified to conform with the 1995 presentation.
2. Merger with Schwitzer, Inc.
On May 31, 1995, a wholly-owned subsidiary of the Company
merged with and into Schwitzer, a New York Stock Exchange listed
company, whereby Schwitzer became a wholly-owned subsidiary of
the Company. The merger was accounted for under the pooling of
interests method of accounting. As provided for in the merger
agreement, each share of Schwitzer common stock was converted
into 0.9615 share of the Company's common stock, resulting in the
Company issuing approximately 6,980,000 shares of stock.
In accordance with the pooling of interests method of
accounting, the Company's financial statements have been restated
for all periods presented to include the results of Schwitzer.
Operating results for the Company and Schwitzer for three and six
months ended June 30, 1994, prior to the combination, are
presented in the table below, in thousands.
<TABLE>
<CAPTION>
Three months ended Six months ended
June 30, June 30,
1994 1994
------------------ ----------------
<S> <C> <C>
The Company
Net sales $ 56,990 $119,406
Net income 296 1,432
- ----------------------------------------------------------
Schwitzer
Net sales $ 38,689 $ 75,435
Net income 2,291 4,015
- ----------------------------------------------------------
Combined
Net sales $ 95,679 $194,841
Net income 2,587 5,447
</TABLE>
3. Earnings and Dividends Per Share
Earnings per share in the accompanying consolidated
statements of income for the three and six months ended June 30,
1995 and 1994 have been computed based on the average number
shares of common stock and common stock equivalents, if any,
outstanding throughout the period. The weighted shares
outstanding for the three months and six months ended June 30,
1994 included 716,000 and 725,000 shares, respectively, resulting
from the dilutive effects of common stock equivalents. There was
no dilutive effect of common stock equivalents in 1995.
A cash dividend of $0.15 per share was declared during each
of the first and second quarters of 1995 and 1994. Dividends per
share prior to May 31, 1995 have not been restated to reflect the
Schwitzer merger.
4. Inventories
Inventories consisted of the following, in thousands:
<TABLE>
<CAPTION>
June 30, December 31,
1995 1994
-------- --------
(unaudited)
<S> <C> <C>
FIFO cost:
Raw materials $ 19,343 $ 17,333
Work-in-process 8,295 8,262
Finished goods 20,866 21,677
--------- ---------
Total 48,504 47,272
Excess of FIFO
over LIFO cost (3,349) (3,559)
--------- ---------
Net inventories $ 45,155 $ 43,713
========= =========
</TABLE>
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
CONDITION AND RESULTS OF OPERATIONS
On May 31, 1995, a wholly-owned subsidiary of Kuhlman Corporation
(the "Company") merged with and into Schwitzer, Inc.
("Schwitzer") whereby Schwitzer became a wholly-owned subsidiary
of the Company. In the transaction, each outstanding share of
common stock of Schwitzer was converted into 0.9615 share of the
Company's common stock, resulting in the Company issuing
approximately 6,980,000 shares of stock. The merger was
accounted for as a pooling of interests, with prior-period
financial results restated to reflect the merger. In connection
with the merger, Kuhlman and Schwitzer incurred one-time
transaction costs which totaled $5,600,000 (net of tax) and
included costs associated with the early extinguishment of debt
("Merger Expenses"). The Merger Expenses were recorded in the
Company's financial statements in the second quarter of 1995.
Upon completion of the merger with Schwitzer, the Company's
business units were realigned in recognition of the distinct
markets and customers it services into two product segments:
Electrical and Industrial. The Electrical Products segment
manufactures and sells primarily electrical equipment and wire
and cable products while the Industrial Products segment
manufactures and sells primarily engine components.
LIQUIDITY AND CAPITAL RESOURCES
The Company generated approximately $13,487,000 in cash flow from
operations in the first half of 1995 compared to $15,406,000 for
the same period in 1994. Higher working capital needs, primarily
for accounts receivable required to support the Company's record
sales volume, resulted in lower cash flow generated from
operations in the first half of 1995 when compared to the same
period in 1994. Working capital (net of cash) decreased
nominally by $679,000 (2%) to $45,786,000 at June 30, 1995 from
December 31, 1994. When compared to June 30, 1994, working
capital (net of cash) increased by $4,533,000, primarily due to
an increased investment in accounts receivable. Cash and cash
equivalents were $3,797,000 at June 30, 1995 compared to
$3,036,000 at the end of 1994. Accounts receivable, net
increased $1,226,000 (2%) to $61,118,000 at June 30, 1995 from
the end of 1994 because of the record sales volume in the
Industrial Segment, partially offset by a decline in the
Electrical Segment due to lower shipments of distribution
transformers and the collection of booster cable sales made in
the fourth quarter of 1994 which carried extended payment terms.
Inventory levels increased $1,442,000 (3%) to $45,155,000 at June
30, 1995 primarily because of higher anticipated sales activity
in the Electrical Segment for power transformers. Prepaid
expenses and other current assets and deferred income taxes
declined $4,506,000 (38%) to $7,452,000 at June 30, 1995
primarily due to the receipt of cash on a covenant not to
compete, an income tax refund and changes in deferred income tax
assets.
Accounts payable and accrued expenses declined $2,027,000 (3%) to
$59,193,000 at June 30, 1995 from December 31, 1994. The decline
was primarily due to cash payments made in 1995 for certain 1994
charges related to the Company's Kuhlman Electric unit and the
positive settlement of certain liabilities, partially offset by
an increase in payables to vendors. Total debt outstanding was
$83,924,000 at June 30, 1995, down $849,000 from December 31,
1994. Subsequent to the merger, the Company repaid substantially
all of the domestic debt of Schwitzer with proceeds borrowed
under the Company's current bank loan facility which was
increased by $22,000,000 to accommodate the repayment and to pay
the associated Merger Expenses. The Company refinanced the
domestic debt of Schwitzer in order to lower its overall interest
rate on borrowed funds based on the enhanced financial strength
of the combined company. The cost associated with the early
retirement of Schwitzer's domestic debt was recognized as an
extraordinary item on the Company's Statement of Income.
Capital Expenditures for the first half of 1995 were $5,776,000,
up $1,471,000 from the same period in the prior year. Total
expenditures were split evenly between the Company's two product
segments. Capital expenditures made in the Industrial Products
segment were for additions to machinery and equipment to upgrade
production quality, enhance output capacity and tooling for
application of certain products to specific customer orders,
particularly turbochargers. Expenditures in the Electrical
Products segment were primarily for normal additions and for
final installation of certain jacketing and extrusion lines to
enhance the Company's wire and cable manufacturing capabilities.
As noted above, the Company recorded the Merger Expenses, which
amounted to $5,600,000 (net of tax) and included the cost
associated with the early extinguishment of debt, in the second
quarter of 1995. In addition to the cost associated with the
early extinguishment of debt, the Merger Expenses were for
various legal, accounting and other professional services
utilized to complete the merger. Approximately, $4,601,000 of
the fees were paid in the second quarter of 1995. The balance of
the Merger Expenses is expected to be paid in the third quarter
of 1995.
Management believes that the Company's liquidity, forecasted cash
flows, available borrowing capacity and other financial resources
are adequate to support the anticipated operations, to finance
future capital expenditures as previously planned and to service
all existing debt requirements.
RESULTS OF OPERATIONS
The following table summarizes net sales and operating profit by
segment, in thousands:
<TABLE>
<CAPTION>
Three Months Ended Six Months Ended
June 30, June 30,
--------------------- ---------------------
1995 1994 1995 1994
-------- -------- -------- --------
(unaudited) (unaudited)
<S> <C> <C> <C> <C>
Net sales:
Electrical $ 56,349 $ 54,956 $115,004 $115,442
Industrial 46,465 40,723 94,736 79,399
-------- -------- -------- --------
$102,814 $ 95,679 209,740 194,841
======== ======== ======== ========
Income before taxes and extraordinary item:
Electrical $ 2,831 $ 2,020 $ 5,274 $ 4,956
Industrial 4,620 4,391 10,497 8,807
Corporate (946) (958) (1,828) $ (1,893)
-------- -------- -------- --------
6,505 5,453 13,943 11,870
Interest
expense, net (1,827) (1,598) (3,683) (3,506)
Merger expenses (4,510) --- (4,510) ---
Unallocated 312 312 624 625
-------- -------- -------- --------
$ 480 $ 4,167 $ 6,374 $ 8,989
======== ======== ======== ========
</TABLE>
Three Months Ended June 30, 1995 and 1994
Net sales and net income excluding the Merger Expenses
("Operating Net Income"), increased approximately 7% and 17%,
respectively, in the second quarter of 1995 when compared to the
same period in 1994. The increase in Operating Net Income was
attributable to positive gains reported in each of the Company's
two product segments.
Net sales were $102,814,000 in the second quarter of 1995
compared to $95,679,000 in the same period in 1994. The increase
in net sales occurred primarily in the Industrial Products
segment, as worldwide demand for turbochargers and certain other
products remained strong throughout the period. Net sales for
the Electrical Products segment increased modestly in the second
quarter of 1995 compared to the same period in 1994 primarily
because higher unit sales of wire and cable products and the
impact of higher copper prices were partially offset by lower
unit sales of distribution transformers. Unit sales of
distribution transformers were lower as a consequence of certain
downsizing actions initiated in the fourth quarter of 1994 to
reduce operating costs and to improve the Company's
competitiveness in markets for those products.
In addition to the sales gains noted above, bookings for new
orders in both the Electrical and Industrial Products segments
remained strong throughout the period. In the Electrical
Products segment, bookings for power transformer units in the
second quarter of 1995 were up approximately 70% over those
reported in the year ago period. Bookings for the Industrial
Products segment were approximately 6% higher in the second
quarter of 1995 when compared to the same period in 1994.
Overall, the Company's backlog was $100,825,000 at June 30, 1995.
The Company achieved operating profit of $6,000,000 for the
second quarter of 1995 which was essentially the same when
compared to the second quarter of 1994 on modestly higher
consolidated net sales. Operating profit margins, which were
5.8% and 6.3% of consolidated net sales in the second quarter of
1995 and 1994, respectively, declined in both segments. Margins
in the Industrial Products segment were suppressed somewhat by a
higher mix of OEM versus aftermarket shipments and higher raw
material and production costs. In the Electrical Products
segment margins for certain wire and cable products were impacted
by a softness in the U.S. economy, particularly for retail sales
and new construction, and the impact of higher copper costs.
However, margins for various transformer products improved in the
second quarter of 1995 as the Company realized benefits from
profit improvement programs implemented in 1994. Also, operating
profit margins were benefited in both segments by lower operating
expenses as a percentage of net sales. Operating expenses for
the second quarter were $13,391,000 or 13.0% of net sales
compared to $13,121,000 or 13.7% of net sales recorded in the
same period in 1994. The increased operating expenses of
$270,000 (2%) were due to the higher sales noted above, partially
offset by cost containment programs throughout the Company.
Interest expense, net in the second quarter was $1,827,000
compared to $1,598,000 for the same period in 1994. The increase
in interest expense, net was due primarily to higher interest
rates throughout the second quarter of 1995 and to a lesser
extent higher debt levels caused by greater working capital
needs. Other, net in the second quarter of 1995, excluding
Merger Expenses, was $817,000 compared to a net expense of
$239,000 for the same period in 1994. Other, net, which
consisted primarily of foreign currency adjustments, royalties,
income from a covenant not to compete and miscellaneous expenses
associated with non-operating activities was benefitted in the
second quarter of 1995 by approximately $850,000 for the
settlement of certain liabilities. The impact of foreign
currency fluctuations in the second quarter of 1995 was minimal.
In addition, the covenant not to compete, which paid the Company
approximately $1,250,000 per year, expired in the second quarter
of 1995.
Operating Net Income for the second quarter of 1995 was
$3,014,000 ($0.23 per share) compared to $2,587,000 ($0.19 per
share) for the same period in 1994. The increase in Operating
Net Income was due to the factors noted above. The Company
reported a net loss of $2,586,000 ($0.20 per share) in the second
quarter of 1995 due to the recognition of the Merger Expenses
which totalled $5,600,000, net of tax ($0.43 per share).
Six Months Ended June 30, 1995 and 1994
Net sales, operating profit and Operating Net Income were higher
for the first half of 1995 compared to the similar period in 1994
primarily because of the positive momentum in the Industrial
Products segment.
Net sales for the first half of 1995 were $209,740,000 compared
to $194,841,000 for the same period in 1994, an increase of 8%.
The increase was due primarily to the record sales volume
recorded in the Industrial Products segment, which continued to
experience strong worldwide demand across many of its primary
product lines. Net sales for the first half of 1995 for the
Electrical Products segment were essentially the same when
compared to the first half of 1994 because higher sales of
certain wire and cable products were offset by lower sales of
distribution transformers due to the impact of the downsizing
programs implemented in late 1994.
Operating profit for the first six months of 1995 was $13,191,000
compared to $12,625,000 reported for the same period in 1994, an
increase of $566,000 (4%). The increase in operating profit was
due substantially to the higher sales volume in the Industrial
Products segment, offset somewhat by lower operating profits
earned on sales of certain wire and cable products. Operating
profit for wire and cable products declined mainly because of
lower sales of booster cables in the first quarter of 1995 caused
by the mild winter and lower gross margins earned on various
product lines due to the softness in the U.S. economy in the
first half of 1995, particularly for retail sales and new
construction, and the impact of higher copper costs. As noted in
the second quarter, margins in the Industrial Products segment
were suppressed somewhat by a higher mix of OEM versus
aftermarket shipments and higher raw material costs.
Consolidated operating profit margin, as a percentage of sales,
for the first half of 1995 and 1994 were 6.3% and 6.5%,
respectively. Operating profit margin as a percentage of sales
declined somewhat in the first half of 1995 because of the lower
gross profit margins noted above, partially offset by a lower
percentage of operating expenses required to support the
Company's record sales volume. Operating expenses for the first
six months of 1995 were $26,913,000 or 12.8% of net sales
compared to $26,155,000 or 13.4% of net sales for the same period
in 1994. The increased operating expenses were due to the higher
sales noted above, partially offset by cost containment programs
throughout the Company.
Interest expense, net for the first half of 1995 was $3,683,000
compared to $3,506,000 for the same period in 1994. The increase
in interest expense, net was due primarily to higher interest
rates throughout the period and to a lesser extent higher debt
levels caused by greater working capital needs. Other, net in
the first half of 1995 was $1,376,000 compared to an expense of
$130,000 for the same period in 1994. As noted above, other, net
was benefitted primarily by the positive settlement of certain
liabilities.
Operating Net Income for the first half of 1995 was $6,562,000
($0.50 per share) compared to $5,447,000 ($0.40 per share) for
the same period in 1994. The increase in operating net income
was due to the factors noted above. Net income for the first
half of 1995 was $962,000 ($0.07 per share), which was impacted
by the recognition of the Merger Expenses of $5,600,000, net of
tax ($0.43 per share).
OUTLOOK FOR 1995
With the merger of Schwitzer completed, Management believes the
Company is well positioned both strategically and financially to
grow and prosper in the future. Management intends to build on
the Company's existing base by expanding its presence in those
market segments which it currently serves, both through internal
growth and acquisitions. Management continues to remain
cautiously optimistic about the Company's prospects for both the
balance of the year and over the long term as well.
PART II. OTHER INFORMATION
Item 4. Submission of Matters to a Vote of Security Holders
(a) The Annual Meeting of security holders of the
Registrant was held on May 31, 1995.
(b) Not applicable
(c) At such meeting all of the nominees for election as
directors were elected for the term of office set forth
below. The votes cast with respect to each nominee for
election as a director are as follows:
<TABLE>
<CAPTION>
Year When
Term of Office Votes for Votes
Nominee Expires Nominee Withheld
------- -------------- ------- --------
<S> <C> <C> <C>
Curtis G. Anderson 1998 5,484,623 53,046
William E. Burch 1998 5,480,925 56,744
Alexander W. Dreyfoos 1998 5,483,778 54,167
General H. Norman
Schwarzkopf 1998 5,474,778 62,890
</TABLE>
At such meeting the security holders further voted upon and
approved the following:
(1) a proposal for the issuance of shares of common stock
of the Registrant in the merger of Spinner Acquisition
Corp., a wholly owned subsidiary of the Registrant,
with and into Schwitzer, Inc. 4,546,190 affirmative
votes and 73,267 negative votes were cast, and there
were 102,104 abstentions and 816,107 broker non-votes
with respect to such matter.
(2) a proposal to amend the Certificate of Incorporation
(the "Registrant's" Certificate) of the Registrant to
increase the number of shares that the Registrant has
the authority to issue to 20,000,000 and to amend the
Registrant's Certificate to delete the designation, in
the Registrant's Certificate, of certain shares of
Kuhlman Preferred Stock as Junior Participating
Preferred Stock, Series A. 4,423,631 affirmative votes
and 200,233 negative votes were cast, and there were
97,697 abstentions and 816,107 broker non-votes with
respect to such matter.
(3) the 1994 Stock Option Plan. 3,572,159 affirmative
votes and 955,959 negative votes were cast, and there
were 193,442 abstentions and 816,108 broker non-votes
with respect to such matter.
(4) the ratification of the selection of Arthur Andersen
LLP as the independent auditors for the Registrant.
5,481,952 affirmative votes and 20,627 negative votes
were cast, and there were 35,089 abstentions with
respect to such matter.
ITEM 6 Exhibits and Reports on Form 8-K
(a) Exhibits
2.1 Agreement and Plan of Merger by and between Kuhlman
Corporation, Spinner Acquisition Corp. and Schwitzer,
Inc. (incorporated by reference to Exhibit 2.1 to
Registration Statement No. 33-58133).
3.1 Certificate of Incorporation of the Registrant.
3.2 Amendment to Certificate of Incorporation of the
Registrant.
3.3 Certificate of Designation of the Registrant dated
May 31, 1995.
4.1 Fourth Amendment to Credit Agreement dated June 29,
1995 among the Registrant, NationsBank of Georgia, N.A.
and The Chase Manhattan Bank, N.A.
27.0 Financial Data Schedule for the six month period ended
June 30, 1995.
(b) Reports on Form 8-K
During the period covered by this report, Registrant has filed
the following reports on Form 8-K.
Form 8-K dated May 31, 1995 reporting a merger under Item 2.
SIGNATURES
------------
Pursuant to the requirements of the Securities Exchange Act of
1934, the Registrant has duly caused this report to be signed on
its behalf by the undersigned thereunto duly authorized.
Kuhlman Corporation
------------------------------------------
(Registrant)
/s/ Robert S. Jepson, Jr.
------------------------------------------
Robert S. Jepson, Jr.
Chairman and Chief Executive Officer
/s/ Vernon J. Nagel
------------------------------------------
Vernon J. Nagel
Executive Vice President of Finance and
Chief Financial Officer
Date: August 11, 1995
----------------------------------
APPENDIX B
CERTIFICATE OF INCORPORATION
OF
KUHLMAN CORPORATION
First: The name of the corporation is Kuhlman Corporation
----- (the "Corporation").
Second: The address of the registered office of the
------ Corporation in the State of Delaware is Corporation
Trust Center, 1209 Orange Street in the City of Wilmington,
County of New Castle. The name of the registered agent of the
Corporation at that address is The Corporation Trust Company.
Third: The purpose of the Corporation is to engage in any
----- lawful act or activity for which corporations may be
organized under the Delaware General Corporation Law.
Fourth : The total number of shares of all classes of stock
------ which the Corporation shall have authority to issue
is as follows:
(A) 2,000,000 shares of Preferred Stock of the par value
of $1.00 per share (the "Preferred Stock"); and
(B) 10,000,000 shares of Common Stock of the par value
of $1.00 per share (the "Common Stock").
The designations, voting powers, preferences and relative,
participating, optional or other special rights, and
qualifications, limitations or restrictions of the above classes
of stock and other general provisions relating thereto shall be
as follows:
PART I
PREFERRED STOCK
1. The Board of Directors is expressly authorized at any
time, and from time to time, to provide for the issuance of
shares of Preferred Stock in one or more series, and for such
consideration or considerations as the Board of Directors may
determine, with such voting powers, full or limited, or without
voting powers, and with such designations, preferences and
relative, participating, optional or other special rights, and
qualifications, limitations or restrictions thereof, as shall be
stated and expressed in the resolution or resolutions providing
for the issue thereof adopted by the Board of Directors, all
except as otherwise required by law or this Certificate of
Incorporation, and including but without limiting the generality
of the foregoing, the following:
(a) The distinctive designation and number of shares
comprising such series, which number may (except where otherwise
provided by the Board of Directors in creating such series) be
increased or decreased (but not below the number of shares then
outstanding) from time to time by action of the Board of
Directors.
(b) The dividend rate or rates on the shares of such
series and the relation which such dividends shall bear to the
dividends payable on any other class of capital stock or on any
other series of Preferred Stock, the terms and conditions upon
which and the periods in respect of which dividends shall be
payable, whether and upon what conditions such dividends shall be
cumulative and, if cumulative, the date or dates from which
dividends shall accumulate.
(c) Whether the shares of such series shall be
redeemable, and, if redeemable, whether redeemable for cash,
property or rights, including securities of any other
corporation, at the option of either the holder or the
Corporation or upon the happening of a specified event, the
limitations and restrictions with respect to such redemption, the
time or times when, the price or prices or rate or rates at
which, the adjustments with which and the manner in which such
shares shall be redeemable, including the manner of selecting
shares of such series for redemption if less than all shares are
to be redeemed.
(d) The rights to which the holders of shares of such
series shall be entitled, and the preferences, if any, over any
other series (or of any other series over such series), upon the
voluntary or involuntary liquidation, dissolution, distribution
or winding up of the Corporation, which rights may vary depending
on whether such liquidation, dissolution, distribution or winding
up is voluntary or involuntary, and, if voluntary, may vary at
different dates.
(e) Whether the shares of such series shall be subject
to the operation of a purchase, retirement or sinking fund, and,
if so, whether and upon what conditions such purchase, retirement
or sinking fund shall be cumulative or noncumulative, the extent
to which and the manner in which such fund shall be applied to
the purchase or redemption of the shares of such series for
retirement or to other corporate purposes and the terms and
provisions relative to the operation thereof.
(f) Whether the shares of such series shall be
convertible into or exchangeable for shares of any other class or
of any other series of any class of capital stock or other
securities of the Corporation, or the securities of any other
corporation or entity, and, if so convertible or exchangeable,
the price or prices or the rate or rates of conversion or
exchange and the method, if any, of adjusting the same, and any
other terms and conditions of such conversion or exchange.
(g) The voting powers, full and/or limited, if any, of
the shares of such series, and whether and under what conditions
the shares of such series (alone or together with the shares of
one or more other series) shall be entitled to vote separately
as a single class, upon any merger or consolidation or other
transaction of the Corporation, or upon any other matter,
including without limitation the election of one or more
additional directors of the Corporation in case of dividend
arrearages or other specified events.
(h) Whether the issuance of any additional shares of
such series, or of any shares of any other series, shall be
subject to restrictions as to issuance, or as to the powers,
preferences or rights of any such other series.
(i) Any other preferences, privileges and powers and
relative, participating, optional or other special rights, and
qualifications, limitations or restrictions of such series, as
the Board of Directors may deem advisable and as shall not be
inconsistent with the provisions of this Certificate of
Incorporation.
2. All shares of Preferred Stock of any one series shall be
of equal rank and identical in all respects, except that shares
of any one series issued at different times may differ as to the
dates from which dividends thereon, if cumulative, shall be
cumulative.
PART II
SERIES A PREFERRED STOCK
1. Designation and Amount. There is hereby established a
----------------------- series of Preferred Stock of
the Corporation designated as "Junior Participating Preferred
Stock, Series A" (the "Series A Preferred") and the number of
shares constituting such series shall be 75,000.
2. Dividends and Distributions.
----------------------------
(A) Subject to the prior and superior rights of the
holders of any series of Preferred Stock ranking prior
and superior to the shares of Series A Preferred with
respect to dividends, the holders of shares of Series A
Preferred, in preference to the holders of Common Stock
of the Corporation and of any other shares ranking
junior as to dividends to the Series A Preferred, shall
be entitled to receive, when, as and if declared by the
Board of Directors out of funds legally available for
the purpose, quarterly dividends payable in cash on the
first day of March, June, September and December in each
year (each such date being referred to herein as a
"Quarterly Dividend Payment Date"), commencing on the
first quarterly Dividend Payment Date after the first
issuance of a share or fraction of a share of Series A
Preferred, in an amount per share (rounded to the
nearest cent) equal to the greater of (a) $10,00 or (b)
subject to the provision for adjustment hereinafter set
forth, 100 times the aggregate per share amount of all
cash dividends, and 100 times the aggregate per share
amount (payable in kind) of all non-cash dividends or
other distributions other than a dividend payable in
shares of Common Stock or a subdivision of the
outstanding shares of Common Stock (by reclassification
or otherwise), declared on the Common Stock since the
immediately preceding Quarterly Dividend Payment Date
or, with respect to the first Quarterly Dividend Payment
Date, since the first issuance of any share or fraction
of a share of Series A Preferred. In the event the
Corporation shall at any time declare or pay any
dividend on Common Stock payable in shares of Common
Stock, or effect a subdivision or combination or
consolidation of the outstanding Common Stock (by
reclassification or otherwise than by payment of a
dividend in shares of Common Stock) into a greater or
lesser number of shares of Common Stock, then in each
such case the amount to which holders of shares of
Series A Preferred were entitled immediately prior to
such event under clause (b) of the preceding sentence
shall be adjusted by multiplying such amount by a
fraction the numerator of which is the number of shares
of Common Stock outstanding immediately after such event
and the denominator of which is the number of shares of
Common Stock that were outstanding immediately prior to
such event.
(B) The Corporation shall declare a dividend or
distribution on the Series A Preferred as provided in
paragraph (A) of this Section immediately after it
declares a dividend or distribution on the Common Stock
(other than a dividend payable in shares of Common
Stock); provided that, in the event no dividend or
distribution shall have been declared on the Common
Stock during the period between any Quarterly Dividend
Payment Date, and the next subsequent Quarterly Dividend
Payment Date, a dividend of $10.00 per share on the
Series A Preferred shall nevertheless be payable on such
subsequent Quarterly Dividend Payment Date.
(C) Dividends shall begin to accrue and be
cumulative on outstanding shares of Series A Preferred
from the Quarterly Dividend Payment Date next preceding
the date of issue of such shares of Series A Preferred,
unless the date of issue of such shares is prior to the
record date for the first Quarterly Dividend Payment
Date, in which case dividends on such shares shall begin
to accrue and be cumulative from the date of issue of
such shares, or unless the date of issue is a Quarterly
Dividend Payment Date or is a date after the record date
for the determination of holders of shares of Series A
Preferred entitled to receive a quarterly dividend and
before such Quarterly Dividend Payment Date, in either
of which events such dividends shall begin to accrue and
be cumulative from such Quarterly Dividend Payment Date,
Accrued but unpaid dividends shall not bear interest.
Dividends paid on the shares of Series A Preferred in an
amount less than the total amount of such dividends at
the time accrued and payable on such shares shall be
allocated pro rata on a share-by-share basis among all
such shares at the time outstanding. The Board of
Directors may fix a record date for the determination of
holders of shares of Series A Preferred entitled to
receive payment of a dividend or distribution declared
thereon, which record date shall not be more than 60
days prior to the date fixed for the payment thereof.
3. Voting Rights. The holders of shares of Series A
-------------- Preferred shall have the following
voting rights:
(A) Each one-hundredth of a share of Series A
Preferred shall entitle the holder thereof to one vote
on all matters submitted to a vote of the stockholders
of the Corporation.
(B) Except as otherwise provided herein or by law,
the Holders of shares of Series A Preferred and the
holders of shares of Common Stock shall vote together as
one class on all matters submitted to a vote of
stockholders of the Corporation.
4. Certain Restrictions.
---------------------
(A) Whenever quarterly dividends or other dividends
or distributions payable on the Series A Preferred as
provided in Section 2 are in arrears, thereafter and
until all accrued and unpaid dividends and
distributions, whether or not declared, on shares of
Series A Preferred outstanding shall have been paid in
full, the Corporation shall not:
(i) declare or pay dividends on, or make any
other distributions on, any shares ranking junior
(either as to dividends or upon liquidation,
dissolution or winding up) to the Series A
Preferred;
(ii) declare or pay dividends on or make any
other distributions On any shares ranking on a
parity (either as to dividends or upon liquidation,
dissolution or winding up) with the Series A
Preferred, except dividends paid ratably on the
Series A Preferred and all such parity stock on
which dividends are payable or in arrears in
proportion to the total amounts to which the holders
of all such shares are then entitled;
(iii) redeem or purchase or otherwise acquire
for consideration shares ranking junior (either as
to dividends or upon liquidation, dissolution or
winding up) to the Series A Preferred, provided that
the Corporation may at any time redeem, purchase or
otherwise acquire any such junior shares in exchange
for any shares of the Corporation ranking junior
(either as to dividends or upon dissolution,
liquidation or winding up) to the Series A
Preferred; or
(iv) purchase or otherwise acquire for
consideration any shares of Series A Preferred, or
any shares ranking on a parity with the Series A
Preferred, except in accordance with a purchase
offer made in writing or by publication (as
determined by the Board of Directors) to all holders
of such shares upon such terms as the Board of
Directors, after consideration of the respective
annual dividend rates and other relative rights and
preferences of the respective series and classes,
shall determine in good faith will result in fair
and equitable treatment among the respective series
or classes.
(B) The Corporation shall not permit any subsidiary
of the Corporation to purchase or otherwise acquire for
consideration any shares of the Corporation unless the
Corporation could, under paragraph (A) of this Section
4, purchase or otherwise acquire such shares at such
time and in such manner.
5. Reacquired Shares. Any shares of Series A Preferred
------------------ purchased or otherwise acquired by the
Corporation in any manner whatsoever shall be retired and
cancelled promptly after the acquisition thereof. All such
shares shall upon their cancellation become authorized but
unissued shares of Preferred Stock and may be reissued as part of
a new series of Preferred Stock to be created by resolution or
resolutions of the Board of Directors, subject to the conditions
and restrictions on issuance set forth herein.
6. Liquidation, Dissolution or Winding Up. Upon any
--------------------------------------- liquidation,
dissolution or winding up of the Corporation, no distribution
shall be made (1) to the holders of shares ranking junior (either
as to dividends or upon liquidation, dissolution or winding up)
to the Series A Preferred unless, prior thereto, the holders of
shares of Series A Preferred shall have received $100.00 per
share, plus an amount equal to accrued and unpaid dividends and
distributions thereon, whether or not declared, to the date of
such payment, provided that the holders of shares of Series A
Preferred shall be entitled to receive an aggregate amount per
share, subject to the provision for adjustment hereinafter set
forth, equal to 100 times the aggregate amount to be distributed
per share to holders of Common Stock, or (2) to the holders of
shares ranking on a parity (either as to dividends or upon
liquidation, dissolution or winding up) with the Series A
Preferred, except distributions made ratably on the Series A
Preferred and all other such parity stock in proportion to the
total amounts to which the holders of all such shares are
entitled upon such liquidation, dissolution or winding up. In
the event the Corporation shall at any time declare or pay any
dividend on Common Stock payable in shares of Common Stock, or
effect a subdivision or combination or consolidation of the
outstanding shares of Common Stock (by reclassification or
otherwise than by payment of a dividend in Common Stock) into a
greater or lesser number of shares of Common Stock, then in each
such case the aggregate amount to which holders of shares of
Series A Preferred were entitled immediately prior to such event
under the proviso in clause (1) of the preceding sentence shall
be adjusted by multiplying such amount by a fraction the
numerator of which is the number of shares of Common Stock
outstanding immediately after such event and the denominator of
which is the number of shares of Common Stock that were
outstanding immediately prior to such event.
7. Consolidation, Merger, etc. In case the Corporation
--------------------------- shall enter into any
consolidation, merger, combination or other transaction in which
the shares of Common Stock are exchanged for or changed into
other shares or securities, cash and/or any other property, then
in any such case the shares of Series A Preferred then
outstanding shall at the same time be similarly exchanged or
changed in an amount per share (subject to the provision for
adjustment hereinafter set forth) equal to 100 times the
aggregate amount of shares, securities, cash and/or any other
property (payable in kind), as the case may be, into which or for
which each share of Common Stock is changed or exchanged. In the
event the Corporation shall at any time declare or pay any
dividend on Common Stock payable in shares of Common Stock, or
effect a subdivision or combination or consolidation of the
outstanding Common Stock (by reclassification or otherwise) into
a greater or lesser number of shares of Common Stock, then in
each such case the amount set forth in the preceding sentence
with respect to the exchange or change of shares of Series A
Preferred shall be adjusted by multiplying such amount by a
fraction the numerator of which is the number of shares of Common
Stock outstanding immediately after such event and the
denominator of which is the number of shares of Common Stock that
were outstanding immediately prior to such event.
8. No Redemption. The shares of Series A Preferred shall
-------------- not be redeemable. However, the
Corporation may acquire shares of Series A Preferred in any
manner permitted by law, the provisions hereof and the
Certificate of Incorporation of the Corporation.
9. Rank. The Series A Preferred shall rank junior to all
----- other series of the Corporation's Preferred Stock
as to the payment of dividends and the distribution of assets,
unless the terms of such other series specify to the contrary,
10. Amendment. The Certificate of Incorporation of the
---------- Corporation shall not be amended in any manner
which would materially alter or change the powers, preferences or
special rights of the Series A Preferred so as to affect them
adversely without the affirmative vote of the holders of two-
thirds of the outstanding shares of Series A Preferred, voting
together as a single class.
PART III
COMMON STOCK
1. Except as otherwise required by law or by this
Certificate of Incorporation, each holder of Common Stock shall
have one vote for each share of Common Stock held by a holder on
all matters voted upon by the holders of Common Stock.
2. Subject to the preferential dividend rights, if any,
applicable to shares of Preferred Stock and subject to applicable
requirements, if any, with respect to the setting aside of sums
for purchase, retirement or sinking funds for Preferred Stock,
the holders of Common Stock shall be entitled to receive, to the
extent permitted by law, such dividends as may be declared from
time to time by the Board of Directors.
3. In the event of any liquidation, dissolution or winding
up of the Corporation, the holders of Common Stock shall be
entitled, after payment or provision for payment of the debts and
other liabilities of the Corporation and the amounts to which the
holders of any Preferred Stock shall be entitled, to share
ratably in the remaining net assets of the Corporation.
PART IV
GENERAL PROVISIONS
1. Subject to the power of the Board of Directors to
provide to the contrary with respect to any one or more series of
Preferred Stock at any time authorized, no holder of stock of any
class of the Corporation shall be entitled as a matter of right
to purchase or subscribe for any part of any unissued stock of
any class, or of any additional stock of any class of capital
stock of the Corporation, or of the bonds, certificates of
indebtedness debentures, or other securities, whether or not
convertible into other securities, but any such stock or other
securities may be issued and disposed of pursuant to resolution
by the Board of Directors to such persons, firms, corporations or
associations and upon such terms and for such consideration (not
less than the par value or stated value thereof) as the Board of
Directors in the exercise of its discretion may determine and as
may be permitted by law without action by the stockholders. The
Board of Directors may provide for payment therefor to be
received by the Corporation in cash, personal property, real
property (or leases thereof) or services. Any and all shares of
stock so issued for which the consideration so fixed has been
paid or delivered, shall be deemed fully paid and not liable to
any further call or assessment.
2. Shares of any class or series of capital stock redeemed,
converted, exchanged, purchased, retired or surrendered to the
Corporation, or which have been issued and reacquired in any
manner may, upon compliance with any applicable provisions of the
Delaware General Corporation Law, be given the status of
authorized and unissued shares of the same class.
Fifth: The following provisions are inserted for the
----- management of the business and the conduct of the
affairs of the Corporation, and for further definition,
limitation and regulation of the powers of the Corporation and of
its directors and stockholders:
(A) The business and affairs of the Corporation
shall be managed by or under the direction of the Board
of Directors. In addition to the powers and authority
expressly conferred upon them by statute or by this
Certificate of Incorporation or the by-laws of the
Corporation, the directors are hereby empowered to
exercise all such powers and do all such acts and things
as may be exercised or done by the Corporation.
(B) The directors of the Corporation need not be
elected by written ballot unless the by-laws so provide.
(C) Any action required or permitted to be taken by
the stockholders of the Corporation must be effected at
a duly called annual or special meeting of stockholders
of the Corporation and may not be effected by any
consent in writing by such stockholders.
(D) Special meetings of stockholders of the
Corporation may be called only by the Chief Executive
Officer or by the Board of Directors acting pursuant to
a resolution adopted by a majority of the Whole Board.
For purposes of this Certificate of Incorporation, the
term "Whole Board" shall mean the total number of
authorized directors whether or not there exist any
vacancies in previously authorized directorships.
Sixth: The Board of Directors is expressly empowered to
----- adopt, amend or repeal by-laws of the Corporation.
Any adoption, amendment or repeal of the by-laws of the Corporation
by the Board of Directors shall require the approval of a
majority of the Whole Board. The stockholders shall also have
power to adopt, amend or repeal the by-laws of the Corporation;
provided, however, that, in addition to any vote of the holders
of any class or series of stock of the Corporation required by
law or by this Certificate of Incorporation, the affirmative vote
of the holders of at least seventy percent (70%) of the voting
power of all of the outstanding shares of stock of the
Corporation entitled to vote generally in elections of directors,
voting together as a single class, shall be required to adopt,
amend or repeal any provision of the by-laws of the Corporation.
Seventh: A director of the Corporation shall not be
------- personally liable to the Corporation or its
stockholders for monetary damages for breach of fiduciary duty as
a director, except for liability (i) for any breach of the
director's duty of loyalty to the Corporation or its
stockholders, (ii) for acts or omissions not in good faith or
which involve intentional misconduct or a knowing violation of
law, (iii) under Section 174 of the Delaware General Corporation
Law, or (iv) for any transaction from which the director derived
an improper personal benefit. If the Delaware General
Corporation Law is amended to authorize corporate action further
eliminating or limiting the personal liability of directors, then
the liability of a director of the Corporation shall be elimi-
nated or limited to the fullest extent permitted by the Delaware
General Corporation Law, as so amended.
Any repeal or modification of the foregoing paragraph by the
stockholders of the Corporation shall not adversely affect any
right or protection of a director of the Corporation existing at
the time of such repeal or modification.
Eighth: Whenever a compromise or arrangement is proposed
------ between this Corporation and its creditors, or any
class of them and/or between this Corporation and its
stockholders, or any class of them, any court of equitable juris-
diction within the State of Delaware, may, on the application in
a summary way of this Corporation or of any creditor or
stockholder thereof or on the application of any receiver or
receivers appointed for this Corporation under the provisions of
Section 291 of Title 8 of the Delaware Code or on the application
of trustees in dissolution or of any receiver or receivers
appointed for this Corporation under the provisions of Section
279 of Title 8 of the Delaware Code order a meeting of the
creditors or class of creditors, and/or of the stockholders or
class of stockholders of this Corporation, as the case may be, to
be summoned in such manner as the said court directs. If a
majority in number representing three-fourths in value of the
creditors or class of creditors, and/or of the stockholders or
class of stockholders of this Corporation, as the case may be,
agree to any compromise or arrangement and to any reorganization
of this Corporation as consequence of such compromise or
arrangement, the said compromise or arrangement and the said
reorganization shall, if sanctioned by the court to which the
said application has been made, be binding on all the creditors
or class of creditors, and/or on all the stockholders or class of
stockholders of this Corporation, as the case may be, and also on
this Corporation.
Ninth: Subject to the by-laws of the Corporation, the
----- Corporation shall, to the full extent permitted by
Section 145 of the Delaware General Corporation Law, as amended
from time to time, indemnify all persons whom it may indemnify
pursuant thereto.
Tenth: The Corporation reserves the right to amend or
----- repeal any provision contained in this Certificate of
Incorporation in the manner prescribed by the laws of the State
of Delaware and all rights conferred upon stockholders are
granted subject to this reservation.
Eleventh: The incorporator is Kuhlman Corporation, a
-------- Michigan corporation, whose mailing address is
2343 Alexandria Drive, Suite 200, Lexington, Kentucky 40504.
THE UNDERSIGNED incorporator hereby acknowledges that this
Certificate of Incorporation is its act and deed and that the
facts herein stated are true.
KUHLMAN CORPORATION,
a Michigan corporation
Dated: March 1, 1993
By: /s/ ROBERT S. JEPSON, JR.
--------------------------------
Robert S. Jepson, Jr.
President and Chief
Financial Officer
CERTIFICATE OF AMENDMENT
OF
CERTIFICATE OF INCORPORATION
OF
KUHLMAN CORPORATION
The undersigned, being the Chief Executive Officer of KUHLMAN
CORPORATION, a Delaware corporation, acting pursuant to Section 242
of the General Corporation Law of the State of Delaware, does
hereby certify as follows:
FIRST: That Article Fourth of the Certificate of
Incorporation has been amended by deleting Paragraph (B) of Article
Fourth as it now exists and inserting in lieu thereof a new
Paragraph (B) as follows:
"(B) 20,000,000 shares of Common Stock of the par
value of $1.00 per share (the "Common Stock")."
SECOND: That Article Fourth of the Certificate of
Incorporation has been amended by deleting Part II in its entirety
and renumbering Part III and Part IV of Article Fourth as Part II
and Part III, respectively.
THIRD: That such amendments have been duly adopted in
accordance with Section 242 of the General Corporation Law of the
State of Delaware by resolutions of the Board of Directors and the
Stockholders of the corporation.
IN WITNESS WHEREOF, I have signed this Certificate this 31st
day of May, 1995.
-------------------------------
Robert S. Jepson, Jr.,
Chief Executive Officer
CERTIFICATE OF THE VOTING POWERS, DESIGNATIONS, PREFERENCES,
AND RELATIVE, PARTICIPATING, OPTIONAL, OR OTHER SPECIAL RIGHTS,
AND THE QUALIFICATIONS, LIMITATIONS, OR OTHER RESTRICTIONS
THEREOF OF THE
JUNIOR PARTICIPATING PREFERRED STOCK, SERIES A
(PAR VALUE $1.00 PER SHARE)
OF
KUHLMAN CORPORATION
------------------------------------
Pursuant to Section 151 of the
General Corporation Law of the State of Delaware
------------------------------------
The undersigned does hereby certify that the following
resolutions were duly adopted by the Board of Directors of Kuhlman
Corporation, a Delaware corporation ("Corporation"), the
Certificate of Incorporation of which was filed on March 4, 1993,
at a meeting of said Board of Directors duly convened and held on
May 31, 1995, at which a quorum was present and acting throughout:
RESOLUTIONS OF THE BOARD OF DIRECTORS OF
KUHLMAN CORPORATION
WHEREAS, Article Fourth of the Certificate of Incorporation of
the Corporation expressly authorizes the Board of Directors of the
Corporation to provide for the issuance of shares of Preferred
Stock of the Corporation, par value $1.00 per share, in one or more
series, and for such consideration or considerations as the Board
of Directors may determine, with such voting powers, full or
limited, or without voting powers, and with such designations,
preferences and relative, participating, optional or other special
rights, and qualifications, limitations or restrictions thereof;
and
WHEREAS, in the judgment of the Board of Directors, it is
advisable and in the best interests of this Corporation to
establish a series of Preferred Stock designated as "Junior
Participating Preferred Stock, Series A", the number of shares of
which shall be 200,000.
NOW THEREFORE, BE IT RESOLVED, that pursuant to Article Fourth
of the Certificate of Incorporation of the Corporation, the Board
of Directors of the Corporation hereby establishes a series of
Preferred Stock of the Corporation designated as "Junior
Participating Preferred Stock, Series A" (the "Series A Preferred")
and the number of shares constituting such series shall be 200,000,
with the following voting powers, designations, preferences, and
relative, participating, optional, or other special rights, and
qualifications, limitations or restrictions:
1. Dividends and Distributions.
(A) Subject to the prior and superior rights of the
holders of any series of Preferred Stock ranking prior and
superior to the shares of Series A Preferred with respect to
dividends, the holders of shares of Series A Preferred, in
preference to the holders of Common Stock of the Corporation
and of any other shares ranking junior as to dividends to the
Series A Preferred, shall be entitled to receive, when, as and
if declared by the Board of Directors out of funds legally
available for the purpose, quarterly dividends payable in cash
on the first day of March, June, September and December in
each year (each such date being referred to herein as a
"Quarterly Dividend Payment Date"), commencing on the first
Quarterly Dividend Payment Date after the first issuance of a
share or fraction of a share of Series A Preferred, in an
amount per share (rounded to the nearest cent) equal to the
greater of (a) $10.00 or (b) subject to the provision for
adjustment hereinafter set forth, 100 times the aggregate per
share amount of all cash dividends and 100 times the aggregate
per share amount (payable in kind) of all non-cash dividends
or other distributions other than a dividend payable in shares
of Common Stock or a subdivision of the outstanding shares of
Common Stock (by reclassification or otherwise), declared on
the Common Stock since the immediately preceding Quarterly
Dividend Payment Date or, with respect to the first Quarterly
Dividend Payment Date, since the first issuance of any share
or fraction of a share of Series A Preferred. In the event
the Corporation shall at any time declare or pay any dividend
on Common Stock payable in shares of Common Stock, or effect
a subdivision of combination or consolidation of the
outstanding Common Stock (by reclassification or otherwise
than by payment of a dividend in shares of Common Stock) into
a greater or lesser number of shares of Common Stock, then in
each such case the amount to which holders of shares of
Series A Preferred were entitled immediately prior to such
event under clause (b) of the preceding sentence shall be
adjusted by multiplying such amount by a fraction the
numerator of which is the number of shares of Common Stock
outstanding immediately after such event and the denominator
of which is the number of shares of Common Stock that were
outstanding immediately prior to such event.
(B) The Corporation shall declare a dividend or
distribution on the Series A Preferred as provided in
Paragraph (A) of this Section immediately after it declares a
dividend or distribution on the Common Stock (other than a
dividend payable in shares of Common Stock); provided that, in
the event no dividend or distribution shall have been declared
on the Common Stock during the period between any Quarterly
Dividend Payment Date, and the next subsequent Quarterly
Dividend Payment Date, a dividend of $10.00 per share on the
Series A Preferred shall nevertheless be payable on such
subsequent Quarterly Dividend Payment Date.
(C) Dividends shall begin to accrue and be cumulative on
outstanding shares of Series A Preferred from the Quarterly
Dividend Payment Date next preceding the date of issue of such
shares of Series A Preferred, unless the date of issue of such
shares is prior to the record date for the first Quarterly
Dividend Payment Date, in which case dividends on such shares
shall begin to accrue and be cumulative from the date of issue
of such shares, or unless the date of issue is a Quarterly
Dividend Payment Date or is a date after the record date for
the determination of holders of shares of Series A Preferred
entitled to receive a quarterly dividend and before such
Quarterly Dividend Payment Date, in either of which events
such dividends shall begin to accrue and be cumulative from
such Quarterly Dividend Payment Date. Accrued but unpaid
dividends shall not bear interest. Dividends paid on the
shares of Series A Preferred in an amount less than the total
amount of such dividends at the time accrued and payable on
such shares shall be allocated pro rata on a share-by-share
basis among all such shares at the time outstanding. The
Board of Directors may fix a record date for the determination
of holders of shares of Series A Preferred entitled to receive
payment of a dividend or distribution declared thereon, which
record date shall not be more than 60 days prior to the date
fixed for the payment thereof.
2. Voting Rights. The holders of shares of Series A
Preferred shall have the following voting rights:
(A) Each one-hundredth of a share of Series A Preferred
shall entitle the holder thereof to one vote on all matters
submitted to a vote of the stockholders of the Corporation.
(B) Except as otherwise provided herein or by law, the
holders of shares of Series A Preferred and the holders of
shares of Common Stock shall vote together as one class on all
matters submitted to a vote of stockholders of the
Corporation.
3. Certain Restrictions.
(A) Whenever quarterly dividends or other dividends or
distributions payable on the Series A Preferred as provided in
Section 1 are in arrears, thereafter and until all accrued and
unpaid dividends and distributions, whether or not declared,
on shares of Series A Preferred outstanding shall have been
paid in full, the Corporation shall not:
(i) declare or pay dividends on, or make any other
distributions on, any shares ranking junior
(either as to dividends or upon liquidation,
dissolution or winding up) to the Series A
Preferred;
(ii) declare or pay dividends on or make any other
distributions on any shares ranking on a
parity (either as to dividends or upon
liquidation, dissolution or winding up) with
the Series A Preferred, except dividends paid
ratably on the Series A Preferred and all such
parity stock on which dividends are payable or
in arrears in proportion to the total amounts
to which the holders of all such shares are
then entitled;
(iii) redeem or purchase or otherwise acquire for
consideration shares ranking junior (either as
dividends or upon liquidation, dissolution or
winding up) to the Series A Preferred,
provided that the Corporation may at any time
redeem, purchase or otherwise acquire any such
junior shares in exchange for any shares of
the Corporation ranking junior (either as to
dividends or upon dissolution, liquidation or
winding up) to the Series A Preferred; or
(iv) purchase or otherwise acquire for
consideration any shares of Series A
Preferred, or any shares ranking on a parity
with the Series A Preferred, except in
accordance with a purchase offer made in
writing or by publication (as determined by
the Board of Directors) to all holders of such
shares upon such terms as the Board of
Directors, after consideration of the
respective annual dividend rates and other
relative rights and preferences of the
respective series and classes, shall determine
in good faith will result in fair and
equitable treatment among the respective
series or classes.
(B) The Corporation shall not permit any subsidiary of
the Corporation to purchase or otherwise acquire for
consideration any shares of the Corporation unless the
Corporation could, under Paragraph (A) of this Section 3,
purchase or otherwise acquire such shares at such time and in
such manner.
4. Reacquired Shares. Any shares of Series A Preferred
purchased or otherwise acquired by the Corporation in any manner
whatsoever shall be retired and cancelled promptly after the
acquisition thereof. All such shares shall upon their cancellation
become authorized but unissued shares of Preferred Stock and may be
reissued as part of a new series of Preferred Stock to be created
by resolution or resolutions of the Board of Directors, subject to
the conditions and restrictions on issuance set forth herein.
5. Liquidation, Dissolution or Winding Up. Upon any
liquidation, dissolution or winding up of the Corporation, no
distribution shall be made (1) to the holders of shares ranking
junior (either as to dividends or upon liquidation, dissolution or
winding up) to the Series A Preferred unless, prior thereto, the
holders of shares of Series A Preferred shall have received $100.00
per share, plus an amount equal to accrued and unpaid dividends and
distributions thereon, whether or not declared, to the date of such
payment, provided that the holders of shares of Series A Preferred
shall be entitled to receive an aggregate amount per share, subject
to the provision for adjustment hereinafter set forth, equal to 100
times the aggregate amount to be distributed per share to holders
of Common Stock, or (2) to the holders of shares ranking on a
parity (either as to dividends or upon liquidation, dissolution or
winding up) with the Series A Preferred, except distributions made
ratably on the Series A Preferred and all other such parity stock
in proportion to the total amounts to which the holders of all such
shares are entitled upon such liquidation, dissolution or winding
up. In the event the Corporation shall at any time declare or pay
any dividend on Common Stock payable in shares of Common Stock, or
effect a subdivision or combination or consolidation of the
outstanding shares of Common Stock (by reclassification or
otherwise than by payment of a dividend in Common Stock) into a
greater or lesser number of shares of Common Stock, then in each
such case the aggregate amount to which holders of shares of
Series A Preferred were entitled immediately prior to such event
under the proviso in clause (1) of the preceding sentence shall be
adjusted by multiplying such amount by a fraction the numerator of
which is the number of shares of Common Stock outstanding
immediately after such event and the denominator of which is the
number of shares of Common Stock that were outstanding immediately
prior to such event.
6. Consolidation, Merger, etc. In case the Corporation
shall enter into any consolidation, merger, combination or other
transaction in which the shares of Common Stock are exchanged for
or changed into other shares or securities, cash and/or any other
property, then in any such case the shares of Series A Preferred
then outstanding shall at the same time be similarly exchanged or
changed in an amount per share (subject to the provision for
adjustment hereinafter set forth) equal to 100 times the aggregate
amount of shares, securities, cash and/or any other property
(payable in kind), as the case may be, into which or for which each
share of Common Stock is changed or exchanged. In the event the
Corporation shall at any time declare or pay any dividend on Common
Stock payable in shares of Common Stock, or effect a subdivision or
combination or consolidation of the outstanding Common Stock (by
reclassification or otherwise) into a greater or lesser number of
shares of Common Stock, then in each such case the amount set forth
in the preceding sentence with respect to the exchange or change of
shares of Series A Preferred shall be adjusted by multiplying such
amount by a fraction the numerator of which is the number of shares
of Common Stock outstanding immediately after such event and the
denominator of which is the number of shares of Common Stock that
were outstanding immediately prior to such event.
7. No Redemption. The shares of Series A Preferred shall
not be redeemable. However, the Corporation may acquire shares of
Series A Preferred in any manner permitted by law, the provisions
hereof and the Certificate of Incorporation of the Corporation.
8. Rank. The Series A Preferred shall rank junior to all
other series of the Corporation's Preferred Stock as to the payment
of dividends and the distributions of assets, unless the terms of
such other series specify to the contrary.
9. Amendment. The Certificate of Incorporation of the
Corporation shall not be amended in any manner which would
materially alter or change the powers, preferences or special
rights of the Series A Preferred so as to affect them adversely
without the affirmative vote of the holders of two-thirds of the
outstanding shares of Series A Preferred, voting together as a
single class.
IN WITNESS WHEREOF, Kuhlman Corporation has caused this
Certificate to be signed by its Chairman of the Board of Directors,
Robert S. Jepson, Jr., and attested by its Secretary, Richard A.
Walker, this 31st day of May, 1995.
KUHLMAN CORPORATION
[Corporation Seal] -----------------------------
Robert S. Jepson, Jr.,
Chairman of the Board of
Directors
Attest:
- -------------------------------
Richard A. Walker, Secretary
FOURTH AMENDMENT TO CREDIT AGREEMENT
THIS FOURTH AMENDMENT TO CREDIT AGREEMENT (the "Amendment"),
made as of this 29th day of June, 1995 among Kuhlman Corporation,
a Delaware corporation (the "Borrower"), NationsBank of Georgia,
N.A. and The Chase Manhattan Bank, N.A. as Managing Agents (the
"Managing Agents"), and NationsBank of Georgia, N.A., The Chase
Manhattan Bank, N.A., The First National Bank of Boston, NBD
Bank, Harris Trust and Savings Bank, J.P. Morgan Delaware, and
Trust Company of Georgia Bank of Savannah, N.A. (collectively the
"Lenders"), and NationsBank of Georgia, N.A., as administrative
agent for the Lenders (the "Administrative Agent"),
W I T N E S S E T H:
--------------------
WHEREAS, the Borrower, the Administrative Agent, the
Managing Agents and the Lenders are parties to that certain
Credit Agreement dated as of December 15, 1993, as amended by
that certain First Amendment to Credit Agreement dated as of
March 29, 1994, that certain Second Amendment to Credit Agreement
dated as of March 30, 1994, and that certain Third Amendment to
Credit Agreement dated as of December 31, 1994 (as so amended,
the "Credit Agreement"); and
WHEREAS, the parties to the Credit Agreement wish to amend
the Credit Agreement in certain respects as provided for herein;
NOW, THEREFORE, for and in consideration of the mutual
covenants and agreements contained herein, and for other good and
valuable consideration, the receipt and sufficiency of which is
acknowledged, the parties agree that all capitalized terms used
herein shall have the meanings ascribed thereto in the Credit
Agreement, and further agree as follows:
1. Amendments to Article 1.
(a) Article 1 of the Credit Agreement, Definitions, is
hereby amended by deleting the existing definitions of
"Applicable Margin," "Available Revolving Loan Commitment,"
"Borrowing Base," "Borrowing Base Deficiency," "Capital
Expenditures," "Cash Flow," "Commitment Ratios," "Eligible
Inventory," "Excess Cash Flow," "Fixed Charges," "Lenders,"
"Pricing Ratio," "Request for Advance," "Revolving Loan
Commitment," "Revolving Loan Notes," "Swing Line Commitment,"
"Swing Line Note," "Term Loan," "Term Loan Commitment" and "Term
Loan Notes" in their entireties and by substituting the following
therefor:
"`Applicable Margin' shall mean the respective interest
rate margin or fee percentage applicable to Advances,
Letters of Credit and commitment fees (as set forth in
Section 2.4(a) hereof) as of any date, which shall be
determined as follows. The Applicable Margin with respect
to any Advance, Letter of Credit or commitment fee as of any
date shall be determined based upon the Pricing Ratio, as
calculated by the Administrative Agent as of the end of each
fiscal quarter of the Borrower, in accordance with the
following chart:
<TABLE>
<CAPTION>
Applicable Applicable
Applicable Applicable Margin for Margin for Applicable
For Margin for Margin for Standby Commercial Margin for
Pricing Base Rate LIBOR Letters of Letters of Commitment
Ratios of: Advances Advances Credit Credit Fee
- --------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
Less than 1.00 to 1 0.00% 0.3750% 0.3750% 0.250% 0.1500%
Greater than or equal 0.00% 0.6250% 0.6250% 0.250% 0.2000%
to 1.00 or 1, but
less than 1.50 to 1
Greater than or equal 0.00% 0.8750% 0.8750% 0.500% 0.2500%
to 1.50 to 1, but
less than 2.00 to 1
Greater than or equal 0.25% 1.2500% 1.2500% 0.750% 0.3750%
to 2.00 to 1, but
less than 2.50 to 1
Greater than or equal 0.50% 1.7500% 1.7500% 0.875% 0.3750%
to 2.50 to 1, but
less than 3.00 to 1
Greater than or euqal 0.75% 2.0000% 2.0000% 1.000% 0.3750%
to 3.00 or 1
</TABLE>
Changes in the Applicable Margin resulting from a change in
the Pricing Ratio shall become effective as of the first
Business Day of the second quarter following the quarter for
which the Pricing Ratio is being determined."
"`Available Revolving Loan Commitment' shall mean, as
of any date of determination: (a) so long as the Pricing
Ratio is less than or equal to 2.5 to 1, the Revolving Loan
Commitment, minus Swing Line Advances and Pro Rata Advances
under the Revolving Loan Commitment then outstanding, minus
L/C Obligations then outstanding, or (b) at all other times,
the lesser of (i) the Revolving Loan Commitment, minus Swing
Line Advances and Pro Rata Advances under the Revolving Loan
Commitment then outstanding, minus L/C Obligations then
outstanding, or (ii) the Borrowing Base minus Swing Line
Advances and Pro Rata Advances under the Revolving Loan
Commitment then outstanding, minus L/C Obligations then
outstanding."
"`Borrowing Base' shall mean, at any particular time,
the sum of:
(a) 80% of the Value of the Eligible Accounts; plus
(b) 55% of the Value of the Eligible Coleman Inventory;
plus
(c) 55% of the Value of the Eligible Schwitzer Inventory;
plus
(d) 45% of the Value of the Eligible Kuhlman Inventory;
minus the amount of reserves which the Administrative
Agent shall have established, in the exercise of its reasonable
business judgment, for such purposes as the Administrative Agent
shall have deemed necessary, including, without limitation, for
(i) price adjustments, damages, and unearned discounts;
(ii) shrinkage, spoilage and obsolescence of Inventory;
(iii) special order goods and deferred shipment sales; and
(iv) market value declines; minus, the portion of the Borrowing
Base attributed to any Independent Sales Representative Inventory
in excess of $2,000,000 in the aggregate."
"`Borrowing Base Deficiency' shall mean any condition
wherein the sum of (a) Pro Rata Advances and Swing Line Advances
outstanding under the Revolving Loan Commitment, plus (b) L/C
Obligations then outstanding exceeds the Borrowing Base as set
forth on the most recent Borrowing Base Certificate delivered to
the Administrative Agent or as otherwise determined by the
Administrative Agent; provided, however, that there shall not be
deemed to be a Borrowing Base Deficiency at any time that the
Borrowing Base is not applicable for the purpose of determining
(i) the Available Revolving Loan Commitment, and (ii) the amounts
to be advanced by the Lenders pursuant to Section 2.1(b) hereof."
"`Capital Expenditures' shall mean, for any period, the
aggregate of all expenditures made by the Borrower and its
Subsidiaries during such period which, in conformity with
GAAP, are required to be included or reflected on the
balance sheet as capital assets of such Persons; provided,
however, that expenditures for equipment or other capital
assets made with the proceeds of a trade-in or sale of
existing equipment or other capital assets owned by the
Borrower or any of the Borrower's Subsidiaries in the
ordinary course of business shall not be deemed to be
Capital Expenditures."
"`Cash Flow' shall mean, for the Borrower and its
Subsidiaries on a consolidated basis for any period, the sum
of (a) Operating Income, plus (b) Other Income, plus (c) to
the extent deducted in determining Operating Income,
depreciation, amortization and other non-cash charges, plus
(d) to the extent deducted in determining Operating Income
or Other Income for such period, (i) legal and accounting
expenses in an aggregate amount not to exceed $530,000
relating to the Borrower's proposed acquisition of
Communication Cable, Inc., (ii) cash severance and related
benefit payments in an aggregate amount not to exceed
$915,000 paid to employees of Kuhlman Electric Corporation,
a Delaware corporation, in connection with its down-sizing
during the 1994 calendar year, and (iii) legal, accounting
and other cash expenses incurred in conjunction with the
preparation for and closing of the Borrower's acquisition of
Schwitzer, all as determined in accordance with GAAP."
`Commitment Ratios' shall mean the percentages in which
the Lenders are severally bound to satisfy the Revolving
Loan Commitment or the Term Loan Commitment or the aggregate
of both such Commitments, as the context may require, which
are, as of the date of the Fourth Amendment to this
Agreement, as follows:
<TABLE>
<CAPTION>
Portion of Revolving
Revolving Loan Portion of
Loan Commitment Term Loan
Lender Commitment Ratio Commitment
- --------------------------------------------------------------------------------
<S> <C> <C> <C>
NationsBank $12,141,025.65 22.907595570% $10,717,948.73
of Georgia, N.A.
The Chase $12,141,025.65 22.907595570% $10,717,948.73
Manhattan
Bank, N.A.
The First $6,794,871.79 12.820512810% $6,025,641.02
National Bank
of Boston
NBD Bank $6,794,871.79 12.820512810% $6,025,641.02
Harris Trust $6,794,871.79 12.820512810% $6,025,641.02
and Savings Bank
J. P. Morgan $6,794,871,79 12.820512810% $6,025,641.02
Delaware
Trust Company $1,538,461.54 2.902757620% $1,461,538.46
of Georgia
Bank of Savannah, N.A.
</TABLE>
<TABLE>
<CAPTION>
Term Loan Aggregate
Commitment Commitment
Ratio Ratio
------------ ------------
<S> <C> <C>
NationsBank 22.804146230% 22.858974380%
of Georgia, N.A.
The Chase 22.804146230% 22.858974380%
Manhattan
Bank, N.A.
The First 12.820512810% 12.820512810%
National Bank
of Boston
NBD Bank 12.820512810% 12.820512810%
Harris Trust 12.820512810% 12.820512810%
and Savings Bank
J. P. Morgan 12.820512810% 12.820512810%
Delaware
Trust Company 3.109656300% 3.000000000%
of Georgia
Bank of Savannah, N.A.
</TABLE>
The Commitment Ratios may change upon the sale of
assignments pursuant to Section 11.5 hereof."
"`Eligible Inventory' shall mean, collectively,
Eligible Coleman Inventory, Eligible Schwitzer Inventory and
Eligible Kuhlman Inventory."
"`Excess Cash Flow' shall mean, for the Borrower and
its Subsidiaries on a consolidated basis for any fiscal
year, the positive difference between (a) Cash Flow for such
year, minus, to the extent deducted in determining Operating
Income or Other Income for such period, (i) legal and
accounting expenses in an aggregate amount not to exceed
$530,000 relating to the Borrower's proposed acquisition of
Communication Cable, Inc., (ii) cash severance and related
benefit payments in an aggregate amount not to exceed
$915,000 paid to employees of Kuhlman Electric Corporation,
a Delaware corporation, in connection with its down-sizing
during the 1994 calendar year, and (iii) legal, accounting
and other cash expenses incurred in conjunction with the
preparation for and closing of the Borrower's acquisition of
Schwitzer, minus (b) the sum of (i) the lesser of
(A) Capital Expenditures actually made, or (B) $10,000,000,
plus (ii) interest expense (after giving effect to any
Interest Rate Hedge Agreements then in effect), plus (iii)
cash income taxes paid, plus (iv) mandatory payments of
principal in respect of Indebtedness for Money Borrowed,
plus (v) any optional prepayments of the Term Loan, plus
(vi) the greater of (A) dividends paid in cash by the
Borrower during such fiscal year up to an aggregate amount
of $8,000,000 for any year, or (B) $6,000,000, all as
determined in accordance with GAAP."
"`Fixed Charges' shall mean, for the Borrower and its
Subsidiaries on a consolidated basis for any period, the sum
of (a) interest expense (after giving effect to any Interest
Rate Hedge Agreements then in effect), plus (b) Capital
Expenditures (minus, for fiscal year 1994 only, $3,000,000),
plus (c) mandatory payments of principal in respect of
Indebtedness for Money Borrowed (minus (i) any prepayments
of Indebtedness for Money Borrowed arising in respect of the
Union County Industrial Facilities and Pollution Control
Financing Authority Industrial Revenue Bonds (Associated
Engineering Company Project), Series 1990, (ii) any
prepayments of Schwitzer Domestic Indebtedness, and (iii)
any prepayments of the Term Loan as required by Sections
2.6(a)(i) or 2.6(a)(ii) hereof), plus (d) Restricted
Payments or Restricted Purchases made in respect of the
capital stock of the Borrower (other than any purchase of
Schwitzer Warrants), all as determined in accordance with
GAAP."
"`Lenders' shall mean NationsBank of Georgia, N.A., The
Chase Manhattan Bank, N.A., The First National Bank of
Boston, NBD Bank, Harris Trust and Savings Bank, J.P. Morgan
Delaware, and Trust Company of Georgia Bank of Savannah,
N.A., together with any assignees thereof pursuant to
Section 11.5(b) hereof; and "Lender" shall mean any of the
foregoing Lenders."
"`Pricing Ratio' shall mean, for the Borrower and its
Subsidiaries on a consolidated basis, as of any date, the
ratio of (a) Indebtedness for Money Borrowed as of the end
of the most recently ended fiscal quarter for which the
Borrower's financial statements are required to have been
delivered to the Administrative Agent and the Lenders
pursuant to Section 6.2 hereof, to (b) Cash Flow for such
quarter and three (3) immediately preceding fiscal
quarters."
"`Request for Advance' shall mean any certificate
signed by an Authorized Signatory of the Borrower requesting
(a) an Advance hereunder which will increase the aggregate
amount of the Loans outstanding, or (b) a Letter of Credit
hereunder, which certificate shall be denominated a "Request
for Advance or Letter of Credit," and shall be in
substantially the form of Exhibit A to the Fourth Amendment
to this Agreement. Each Request for Advance or Letter of
Credit shall, among other things, (i) with respect to an
Advance, specify (A) the Commitment under which the Advance
is to be made, (B) the date of the Advance (which shall be a
Business Day), (C) the amount of the Advance, (D) the type
of Advance, and (E) with respect to LIBOR Advances, the
Interest Period selected by the Borrower; (ii) with respect
to the issuance of a Letter of Credit, specify (A) that the
requested Letter of Credit is either a Commercial Letter of
Credit or a Standby Letter of Credit, (B) the stated amount
of the Letter of Credit (which shall be in United States
Dollars), (C) the effective date (which shall be a Business
Day) for the issuance of such Letter of Credit, (D) the date
on which such Letter of Credit is to expire (which shall be
a Business Day and which shall be subject to Section 2.13(a)
hereof), (E) the Person for whose benefit such Letter of
Credit is to be issued, and (F) other relevant terms of such
Letter of Credit; and (iii) with respect to an Advance or
the issuance of a Letter of Credit, state that there shall
not exist, on the date of the requested Advance or Letter of
Credit and after giving effect thereto, a Default or an
Event of Default."
"`Revolving Loan Commitment' shall mean the several
obligations of the Lenders to advance the aggregate sum of
up to $53,000,000 to the Borrower in accordance with their
respective Commitment Ratios and pursuant to the terms
hereof, as such obligations shall be reduced from time to
time pursuant to Section 2.5 hereof, and as such obligations
may be further reduced from time to time pursuant to the
terms hereof."
"`Revolving Loan Notes' shall mean those certain
amended and restated promissory notes in the aggregate
original principal amount of $53,000,000, one issued to each
of the Lenders by the Borrower, each one substantially in
the form of Exhibit B to the Fourth Amendment to this
Agreement; any other promissory notes issued by the Borrower
to evidence Loans made under the Revolving Loan Commitment;
and any extensions, renewals or amendments to, or
replacements of, the foregoing."
"`Swing Line Commitment' shall mean, as of any date,
the obligation of NationsBank to advance to the Borrower
pursuant to Section 2.1(d) hereof, the aggregate sum equal
to the lesser of (a) $10,000,000, or (b) the Available
Revolving Loan Commitment."
"`Swing Line Note' shall mean that certain amended and
restated promissory note in the original principal amount of
$10,000,000 issued to NationsBank by the Borrower,
substantially in the form of Exhibit C to the Fourth
Amendment to this Agreement; any other promissory notes
issued by the Borrower to evidence the Loans made under the
Swing Line Commitment; and any extensions, renewals or
amendments to, or any replacements of, the foregoing."
"`Term Loan' shall mean the Loans advanced to the
Borrower under the Term Loan Commitment on the Agreement
Date and upon the making of the Supplemental Term Loan to
the Borrower."
"`Term Loan Commitment' shall mean the several
obligations of the Lenders to advance the sum of up to
$47,000,000 to the Borrower in accordance with their
respective Commitment Ratios and pursuant to the terms
hereof, as such obligations may be reduced from time to time
pursuant to the terms hereof."
"`Term Loan Notes' shall mean those certain amended and
restated promissory notes dated as of the date of the Fourth
Amendment to this Agreement in the aggregate original
principal amount of $47,000,000, one issued to each of the
Lenders by the Borrower, each one substantially in the form
of Exhibit D to the Fourth Amendment to this Agreement; any
other promissory notes issued by the Borrower to evidence
Loans made under the Term Loan Commitment; and any
extensions, renewals or amendments to, or any replacements
of, the foregoing."
(b) Article 1 of the Credit Agreement, Definitions, is
hereby further amended by deleting the parenthetical phrase
appearing before clause (a) of the definition of "Eligible
Kuhlman Inventory" in its entirety and inserting the following
parenthetical phrase in lieu thereof:
"(other than Coleman and Schwitzer and their respective
Subsidiaries)"
(c) Article 1 of the Credit Agreement, Definitions, is
hereby further amended by adding the parenthetical phrase
"(without duplication)" immediately before the comma in the
phrase "with respect to any Person," in the first line of the
definition of "Indebtedness for Money Borrowed."
(d) Article 1 of the Credit Agreement, Definitions, is
hereby further amended by deleting existing clause (g)(iv) of the
definition of "Permitted Liens" and inserting the following
clause (g)(iv) in lieu thereof:
"(iv) the aggregate outstanding amount of all
Indebtedness secured by Purchase Money Security
Interests shall not at any time exceed an amount
equal to $3,500,000;"
(e) The definition of "Permitted Liens" contained in
Article 1 of the Credit Agreement is hereby further amended by
(i) deleting the period at the end of clause (h) of the
definition of "Permitted Liens" and inserting a semi-colon in
lieu thereof, and (ii) inserting the following new clauses (i),
(j) and (k) after existing clause (h) thereof:
"(i) Liens on the assets of Schwitzer (Europe) Limited
or Schwitzer (Europe) Holdings Limited located in the United
Kingdom which secure Indebtedness of such Person(s) in an
aggregate outstanding amount not to exceed $5,000,000 at any
time;
(j) Liens on the assets of Lacom Schwitzer
Equipamentos, Ltda. located in Brazil which secure
Indebtedness of such Person in an aggregate outstanding
amount not to exceed $3,000,000 at any time; and
(k) Liens securing Indebtedness permitted under
Section 7.1(j) hereof in an aggregate amount not to exceed
$10,000,000 at any time; provided that, of such $10,000,000
basket, only $2,000,000 of such secured Indebtedness may be
Indebtedness other than Indebtedness secured by Liens which
are attached to property or assets acquired by the Borrower
or any of its Subsidiaries in accordance herewith at the
time of such acquisition, and which attach only to the
property or assets acquired in such transaction and do not
extend to or cover any other assets or properties of the
Borrower or any of its Subsidiaries."
(f) Article 1 of the Credit Agreement, Definitions, is
hereby further amended by adding the following definitions in the
correct alphabetical order:
"`Eligible Schwitzer Inventory' shall mean, at any
particular date, the portion of the Inventory of Schwitzer
and its Subsidiaries which: (a) is, in the option of the
Administrative Agent, not obsolete, slow-moving,
unmerchantable, off-season, out-of-season, or in the case of
raw materials and work-in-process Inventory, unworkable, and
as to finished goods Inventory, is readily salable in its
current form; (b) as to finished goods Inventory is new and
does not constitute any finished goods that were returned to
Schwitzer or any of its Subsidiaries due to defect or
damage; (c) in the case of work-in-process Inventory on such
date, is in the process of being manufactured on current
running lines and in accordance with current manufacturing
techniques and styles and (d) fulfills each and every one of
the Inventory Eligibility Requirements."
"`Schwitzer' shall mean Schwitzer, Inc., a Delaware
corporation."
"`Schwitzer Domestic Indebtedness' shall mean
Indebtedness of Schwitzer outstanding under that certain
$15,000,000 Note Agreement dated as of April 15, 1992, among
Schwitzer, Schwitzer U.S. Inc., and certain affiliates of
Massachusetts Mutual Life Insurance Company, as amended, and
that certain $22,000,000 revolving credit agreement dated as
of April 30, 1992, among Schwitzer, Schwitzer U.S. Inc.,
Harris Trust and Savings Bank and Comerica Bank (formerly
known as Manufacturers Bank, N.A.), as amended."
"`Schwitzer Warrants' shall mean those certain warrants
to purchase shares of Schwitzer Common Stock pursuant to
that certain Note Agreement dated as of April 15, 1992,
among Schwitzer, Schwitzer U.S. Inc. and Massachusetts
Mutual Life Insurance Company, which warrants were converted
into warrants to purchase whole shares of Kuhlman Common
Stock in conjunction with the merger of Spinner Acquisition
Corp., a Delaware corporation and a wholly-owned Subsidiary
of the Borrower, with and into Schwitzer."
"`Shell Corporation' shall mean, as of any date of
determination, a Subsidiary of the Borrower which has assets
with a fair market value of less than $50,000 and no
liabilities."
"`Supplemental Term Loan' shall mean the Loans advanced
to the Borrower under the Term Loan Commitment in accordance
with Section 2.1(a) hereof on or after the date of the
Fourth Amendment to this Agreement, which Loans shall not
exceed $9,000,000 in the aggregate."
"`Value of the Eligible Schwitzer Inventory' shall
mean, at any particular date: (a) the value of the Eligible
Schwitzer Inventory, valued in accordance with the "First-
In, First-Out" method of accounting and otherwise in
accordance with GAAP, minus (b) the amount of any reserve
required by the Administrative Agent in the exercise of its
reasonable judgment."
2. Amendments to Article 2. Article 2 of the Credit
Agreement, Credit Facilities, is hereby amended as follows:
(a) Section 2.1(a). Section 2.1(a) of the Credit
Agreement, Term Loan Facility, is hereby amended by deleting
the existing Section 2.1(a) in its entirety and by inserting
the following in lieu thereof:
"(a) Term Loan Facility. The Lenders agree,
severally in accordance with their respective
Commitment Ratios with respect to the Term Loan
Commitment and not jointly, upon the terms and subject
to the conditions of this Agreement, to advance
$38,000,000 of the Term Loan on the Agreement Date and
to make the Supplemental Term Loan on or after the
effective date of the Fourth Amendment to this
Agreement. The Lenders acknowledge and agree that on
the date of the Fourth Amendment to this Agreement,
NationsBank and The Chase Manhattan Bank, N.A. shall
each purchase a participation from Trust Company of
Georgia Bank of Savannah, N.A. in an amount equal to
one-half of the principal amount necessary to cause
Trust Company of Georgia Bank of Savannah, N.A.,
NationsBank and The Chase Manhattan Bank, N.A. to have
Loans outstanding under the Term Loan Commitment in
accordance with their respective Commitment Ratios as
in effect as of the date of the Fourth Amendment to
this Agreement. Subject to the terms hereof, Advances
of the Term Loan may be repaid and then reborrowed as
provided in Sections 2.2(b)(ii) and 2.2(c)(ii) hereof
so as to change the Interest Rate Basis or Interest
Periods for Advances then outstanding; provided,
however, that there shall be no increase in the
principal amount of the Term Loan outstanding after the
Agreement Date (other than the increase in the
principal amount of the Term Loan pursuant to the
Supplemental Term Loan)."
(b) Section 2.1(b). Section 2.1(b) of the Credit
Agreement, Revolving Loan Facility, is hereby amended by
deleting the existing Section 2.1(b) in its entirety and by
inserting the following in lieu thereof:
"(b) Revolving Loan Facility. The Lenders agree,
severally in accordance with their respective
Commitment Ratios with respect to the Revolving Loan
Commitment and not jointly, upon the terms and subject
to the conditions of this Agreement, to lend and relend
to the Borrower on or prior to the Revolving Loan
Maturity Date amounts which in the aggregate at any one
time outstanding do not exceed: (i) so long as the
Pricing Ratio is less than or equal to 2.5 to 1, the
Revolving Loan Commitment minus L/C Obligations then
outstanding, minus Swing Line Advances then
outstanding, or (ii) at all other times, the lesser of
(A) the Borrowing Base or (B) the Revolving Loan
Commitment, minus L/C Obligations then outstanding,
minus Swing Line Advances then outstanding. If, at any
time, a Borrowing Base Deficiency exists, the Loans or
L/C Obligations in excess of the Borrowing Base shall
nevertheless constitute Obligations secured by the
Collateral and are entitled to all benefits thereof.
At no time shall the sum of (x) all Pro Rata Advances
under the Revolving Loan Commitment, plus (y) all Swing
Line Advances, plus (z) all L/C Obligations then
outstanding exceed (1) so long as the Pricing Ratio is
less than or equal to 2.5 to 1, the Revolving Loan
Commitment, or (2) at all other times, either the
Revolving Loan Commitment or the Borrowing Base then in
effect. The Lenders acknowledge and agree that on the
date of the Fourth Amendment to this Agreement,
NationsBank and The Chase Manhattan Bank, N.A. shall
each purchase a participation from Trust Company of
Georgia Bank of Savannah, N.A. in an amount equal to
one-half of the principal amount necessary to cause
Trust Company of Georgia Bank of Savannah, N.A.,
NationsBank and The Chase Manhattan Bank, N.A. to have
Loans outstanding under the Revolving Loan Commitment
in accordance with their respective Commitment Ratios
as in effect as of the date of the Fourth Amendment to
this Agreement."
(c) Section 2.2(d). Section 2.2(d) of the Credit
Agreement, Swing Line Advances, is hereby amended by
deleting the existing Section 2.2(d) in its entirety and by
inserting the following in lieu thereof:
"(d) Swing Line Advances. The Borrower shall give
NationsBank, in the case of Swing Line Advances,
irrevocable written notice or notice by telephone or
telecopy. NationsBank and the Borrower shall agree
upon the rate of interest for each such Advance. The
rate of interest applicable to a Swing Line Advance
shall be either a floating rate of interest or a fixed
rate of interest, as determined by the agreement of the
Borrower and NationsBank. The Borrower may prepay
Swing Line Advances at any time. The Borrower shall
pay principal and interest in respect of each Swing
Line Advance ON DEMAND by NationsBank.
(d) Section 2.4(a). Section 2.4(a) of the Credit
Agreement, Revolving Loan Commitment Fee, is hereby amended
by deleting the existing Section 2.4(a) in its entirety and
by inserting the following in lieu thereof:
"(a) Revolving Loan Commitment Fee. The Borrower
agrees to pay to the Lenders, in accordance with their
respective Commitment Ratios with respect to the
Revolving Loan Commitment, a commitment fee on the
difference between (i) the Revolving Loan Commitment,
minus (ii) Pro Rata Advances outstanding under the
Revolving Loan Commitment, minus (iii) L/C Obligations
then outstanding, (A) for each day from the Agreement
Date through the effective date of the Fourth Amendment
to this Agreement, at the rate of three-eighths of one
percent (3/8%) per annum, and (B) for each day from the
effective date of the Fourth Amendment to this
Agreement through the Revolving Loan Maturity Date, at
the rate per annum equal to the Applicable Margin with
respect to the commitment fee; provided, however, that
no such fee shall be payable to NationsBank in respect
of the amount of Swing Line Advances outstanding from
time to time. Such commitment fee shall be computed on
the basis of a year of 360 days for the actual number
of days elapsed, shall be payable quarterly in arrears
on the last day of each calendar quarter commencing on
December 31, 1993, and on the Revolving Loan Maturity
Date, and shall be fully earned when due and non-
refundable when paid."
(e) Section 2.4(b). Section 2.4(b) of the Credit
Agreement, Letter of Credit Fees, is hereby amended by
inserting the phrase "with respect to the Revolving Loan
Commitment" immediately following the phrase "Commitment
Ratios" but before the comma appearing in the second line of
the first sentence of such Section.
(f) Section 2.6(a). Section 2.6(a) of the Credit
Agreement, Mandatory Prepayments, is hereby amended as
follows:
(i) Section 2.6(a)(i). Section 2.6(a)(i) of the
Credit Agreement, Excess Cash Flow, is hereby amended
by deleting the existing Section 2.6(a)(i) in its
entirety and by inserting the following in lieu
thereof:
"(i) Excess Cash Flow. For each fiscal year
as to which the Pricing Ratio is greater than 2.5
to 1 (as determined as of the end of such fiscal
year), the Borrower shall, not later than April
15th of the following fiscal year, prepay the
outstanding principal amount of the Term Loan in
an amount equal to fifty percent (50%) of Excess
Cash Flow for the fiscal year most recently
ended."
(ii) Section 2.6(a)(ii). Section 2.6(a)(ii) of
the Credit Agreement, Asset Sales Proceeds, is hereby
amended by deleting the existing Section 2.6(a)(ii) in
its entirety and by inserting the following in lieu
thereof:
"(ii) Asset Sales Proceeds. Except for Net
Proceeds arising from the sale of the properties
described on Schedule 5 hereto or of certain
property located in Rolla, Missouri (which
property shall be deemed to be incorporated into
such Schedule 5 by this reference, and as to which
the Borrower expects a sales price of
approximately $2,250,000), one hundred percent
(100%) of Net Proceeds from the sale, transfer or
other disposition of assets by the Borrower or any
of its Subsidiaries (other than in the ordinary
course of business) in excess of $1,000,000 in the
aggregate during the term of this Agreement shall
be used by the Borrower to prepay the Term Loan
immediately upon the Borrower's or any of its
Subsidiaries' receipt thereof."
(iii) Section 2.6(a)(iii). Section 2.6(a)(iii)
of the Credit Agreement, Equity Offering Proceeds, is
hereby amended by deleting the existing Section
2.6(a)(iii) in its entirety and by inserting the
following in lieu thereof:
"(iii) Equity Offering Proceeds. Other than
Net Proceeds of any sale or issuance of capital
stock of the Borrower in respect of the Schwitzer
Warrants, one hundred percent (100%) of Net
Proceeds in an aggregate amount up to $8,000,000,
and twenty percent (20%) of all additional Net
Proceeds from the issuance by the Borrower of any
equity after the Agreement Date shall be used by
the Borrower to prepay the Term Loan immediately
upon the Borrower's receipt thereof."
(g) Section 2.7. Section 2.7 of the Credit Agreement,
Repayment, is hereby amended by deleting Section 2.7(a),
Term Loan, thereof in its entirety and by inserting the
following in lieu thereof:
"(a) Term Loan. The principal balance of the Term
Loan shall be amortized in consecutive semi-annual
installments in the amounts and on the dates set forth
below:
<TABLE>
<CAPTION>
Dates Amount
------- -------
<S> <C>
June 30, 1994 $2,000,000
December 31, 1994 $2,000,000
June 30, 1995 $2,500,000
December 31, 1995 $3,500,000
June 30, 1996 $4,250,000
December 31, 1996 $4,250,000
June 30, 1997 $4,500,000
December 31, 1997 $4,500,000
June 30, 1998 $4,750,000
December 31, 1998 $4,750,000
June 30, 1999 $5,000,000
December 31, 1999 $5,000,000
</TABLE>
A final payment of all principal amounts outstanding in
respect of the Term Loan shall be due and payable on
the Term Loan Maturity Date."
(h) Section 2.13. Section 2.13 of the Credit
Agreement, Letters of Credit, is hereby amended by deleting
the first sentence of subsection (a) thereof in its entirety
and by inserting the following in lieu thereof:
"(a) Subject to the terms and conditions hereof,
NationsBank hereby agrees to issue Letters of Credit in
an aggregate face amount not to exceed the lesser of
$6,000,000 or the Available Revolving Loan Commitment
at any time outstanding, during the period from and
including the Agreement Date to the Revolving Loan
Maturity Date; provided, however, that NationsBank
shall have no obligation to issue any Letter of Credit
if any Default then exists or would be caused thereby."
3. Amendments to Article 5. Article 5 of the Credit
Agreement, General Covenants, is hereby amended as follows:
(a) Section 5.12. Section 5.12 of the Credit
Agreement, Additional Collateral, is hereby amended by
deleting Section 5.12 in its entirety and by inserting the
following in lieu thereof:
"Section 5.12 Additional Collateral.
(a) At the time of (i) any acquisition of any new
Subsidiary of the Borrower, whether by stock purchase,
merger or otherwise, for total consideration (including
any assumption of Indebtedness for Money Borrowed) in
an aggregate amount of more than $30,000,000, or (ii)
any acquisition, in any single transaction or series of
related transactions, by the Borrower or any of its
Subsidiaries of assets for total consideration
(including any assumption of Indebtedness for Money
Borrowed) of more than $30,000,000, the Borrower shall:
(A) cause any such Subsidiary to provide to the
Administrative Agent a loan certificate substantially
in the form of Exhibit L hereto, together with
appropriate attachments thereto, a Subsidiary Guaranty,
a Security Agreement and, to the extent that such
Subsidiary has any Subsidiaries, a Pledge Agreement,
together with appropriate Uniform Commercial Code
Financing Statements, stock certificates and stock
powers relating thereto, all of which shall be in form
and substance reasonably satisfactory to the
Administrative Agent; (B) cause the capital stock of
any such Subsidiary to be pledged to the Administrative
Agent pursuant to a Pledge Agreement and deliver to the
Administrative Agent appropriate Uniform Commercial
Code Financing Statements, stock certificates and stock
powers relating thereto, all of which shall be in form
and substance reasonably satisfactory to the
Administrative Agent; (C) cause to be filed any
additional Uniform Commercial Code Financing Statements
or amendments thereto in all appropriate jurisdictions
in respect of any acquisition of assets, all of which
shall be in form and substance reasonably satisfactory
to the Administrative Agent; (D) cause to be executed,
delivered and filed of record appropriate deeds of
trust, mortgages or deeds to secure debt with respect
to any real property owned by the Borrower or any of
its Subsidiaries having a fair market value of
$3,000,000 or more, and cause to be delivered to the
Administrative Agent appropriate surveys, title
insurance, Phase I environmental audit reports, and
related documentation in connection therewith, all of
which shall be in form and substance reasonably
satisfactory to the Administrative Agent; and (E)
provide all other documentation, including, without
limitation, opinions of counsel to the Borrower and its
Subsidiaries and to the seller of any such assets or
Subsidiaries, which, in the reasonable opinion of the
Administrative Agent, is appropriate with respect to
the particular transaction.
(b) At the time of any other acquisition or
formation of any new Subsidiary of the Borrower (other
than a Shell Corporation), whether by stock purchase,
merger or otherwise, or at any time when a Subsidiary
which formerly constituted a Shell Corporation no
longer falls within the definition of Shell
Corporation, the Borrower shall cause the capital stock
of any such Subsidiary to be pledged to the
Administrative Agent pursuant to a Pledge Agreement and
deliver to the Administrative Agent appropriate Uniform
Commercial Code Financing Statements, stock
certificates and stock powers relating thereto, all of
which shall be in form and substance reasonably
satisfactory to the Administrative Agent."
(b) Section 5.13. Section 5.13 of the Credit
Agreement, Interest Rate Hedging, is hereby amended by
deleting Section 5.13 in its entirety and by inserting the
following in lieu thereof:
"Section 5.13 [RESERVED]."
4. Amendments to Article 7. Article 7 of the Credit
Agreement, Negative Covenants, is hereby amended as follows:
(a) Section 7.1. Section 7.1 of the Credit Agreement,
Indebtedness, is hereby amended by (i) deleting the "and" at
the end of subsection (f) thereof, (ii) deleting the period
at the end of subsection (g) thereof and inserting a semi-
colon and the word "and" in lieu thereof, and (iii)
inserting the following new subsections (h), (i), (j), (k)
and (l) after existing clause (g) thereof:
"(h) Indebtedness of Schwitzer (Europe) Limited or
Schwitzer (Europe) Holdings Limited in an aggregate
outstanding amount not to exceed $5,000,000 at any
time;
(i) Indebtedness of Lacom Schwitzer Equipamentos,
Ltda. in an aggregate outstanding amount not to exceed
$3,000,000 at any time;
(j) Indebtedness of Schwitzer Pension Trustee
Limited arising in the ordinary course of business to
meet its pension obligations;
(k) Intercompany Indebtedness of the Borrower and
its Subsidiaries incurred in accordance with Section
7.8 and the other provisions of this Agreement; and
(l) Other Indebtedness which does not exceed
$15,000,000 in the aggregate at any one time
outstanding."
(b) Section 7.2. Section 7.2 of the Credit Agreement,
Liquidation; Change in Ownership, Name, or Fiscal Year;
Disposition or Acquisition of Assets, is hereby amended by
deleting subsection (c) thereof in its entirety and by
inserting the following in lieu thereof:
"(c) Merge or consolidate with any other Person
unless (i) in the case of a merger or consolidation of
the Borrower, the Borrower merges with a Subsidiary and
the Borrower is the surviving corporation, or in the
case of a merger or consolidation of any Subsidiary of
the Borrower, the surviving company is a majority-owned
Subsidiary of the Borrower and is controlled by the
Borrower, and (ii) no Default then exists or would be
caused thereby, and provided that any such merger or
consolidation does not in any way impair, void or cause
to be negated or released, in whole or in part, any
Liens the Administrative Agent or any of the Lenders
may have on the assets or capital stock of the Borrower
or any of its Subsidiaries or any Guaranty in favor of
the Administrative Agent or any of the Lenders;"
(c) Section 7.2. Section 7.2 of the Credit Agreement,
Liquidation; Change in Ownership, Name, or Fiscal Year;
Disposition or Acquisition of Assets, is hereby amended by
deleting subsection (i) thereof in its entirety and by
inserting the following in lieu thereof:
"(i) Acquire (A) all or any substantial part of
the assets, property or business of, or (B) any assets
that constitute a division or operating unit of the
business of, any other Person, whether by merger or
otherwise; provided, however, that so long as no
Default then exists or would be caused thereby, and so
long as the consummation thereof cannot reasonably be
expected to have a Materially Adverse Effect or to
expose the Borrower, any of its Subsidiaries, the
Administrative Agent and the Lenders, or any of them,
to materially increased risks as a result thereof, the
Borrower may, or may permit any of its Subsidiaries to,
make acquisitions of assets of other Persons or the
issued and outstanding capital stock of other Persons
for total consideration (including any assumption of
Indebtedness for Money Borrowed) in an aggregate amount
during the term of this Agreement not to exceed the
lesser of (i) the Net Worth of the Borrower and its
Subsidiaries on a consolidated basis as of the date of
the proposed acquisition (before giving effect to the
proposed acquisition but after giving effect to any
additional issuance of equity in connection therewith),
or (ii) $30,000,000; provided that the total
consideration (including any assumption of Indebtedness
for Money Borrowed) given by the Borrower or any of its
Subsidiaries in connection with any acquisition of
assets or capital stock of any Affiliate of the
Borrower (other than of a Subsidiary of the Borrower)
shall not exceed $15,000,000 during the term of this
Agreement; and provided, further, that, so long as
(1) in the case of the acquisition of the capital stock
of another Person, such Person shall thereupon become a
direct or indirect Subsidiary of the Borrower and
become consolidated with the Borrower in accordance
with GAAP, (2) after giving effect to such acquisition,
the Borrower and its Subsidiaries on a consolidated
basis shall have cash, marketable securities or
borrowing availability under the Revolving Loan
Commitment, or any combination thereof, in excess of
$5,000,000, and (3) the Borrower complies with
Section 5.12 hereof and delivers to the Administrative
Agent and the Lenders, the following, prior to or
contemporaneously with the consummation of such
acquisition: (a) a true, complete and correct copy of
the acquisition agreement and all exhibits and
schedules thereto relating to the assets or company
being acquired, (b) historical financial statements for
the Person or properties being acquired, (c) pro forma
financial statements of the Borrower and its
Subsidiaries after giving effect to the proposed
acquisition, and (d) calculations demonstrating the
Borrower's compliance with Sections 7.15 through 7.19
hereof, both before and after giving effect to the
subject acquisition. Notwithstanding the foregoing,
not less than thirty (30) days prior to any merger or
consolidation of the Borrower or any of its
Subsidiaries or any acquisition contemplated by
Section 7.2(i) above, the Borrower shall give the
Administrative Agent and the Lenders notice of such
proposed merger, consolidation or acquisition, and,
within thirty (30) days after the receipt by the
Administrative Agent and the Lenders of such notice and
any information relating to the accounts receivable,
inventory and other assets of the Person or Persons to
be merged, consolidated or acquired (all as may be
reasonably requested by the Administrative Agent), the
Administrative Agent shall advise the Borrower of the
Borrowing Base values and special eligibility
requirements, if any, to be applied to the survivor or
survivors of such merger or consolidation, the Person
making such acquisition following any such asset
acquisition, or the Person being acquired in connection
with any such stock acquisition, as applicable. Such
determination of Borrowing Base values and special
eligibility requirements, if any, shall be made by the
Majority Lenders in the exercise of their reasonable
business judgment. This Agreement shall be amended as
of the effective date of such merger, consolidation or
acquisition pursuant to an amendment mutually
satisfactory to the Borrower and the Majority Lenders
to reflect such adjustments to the Borrowing Base."
(d) Section 7.6. Section 7.6 of the Credit Agreement,
Guaranties, is hereby amended by deleting Section 7.6 in its
entirety and by inserting the following in lieu thereof:
"Section 7.6 Guaranties. Neither the Borrower
nor any of its Subsidiaries will at any time enter into
or guarantee, or assume, be obligated with respect to,
or permit to be outstanding, any Guaranty, other than
(a) Guaranties by endorsement of negotiable instruments
for collection in the ordinary course of business,
(b) obligations under agreements entered into in
connection with the acquisition of services, supplies,
and equipment in the ordinary course of business of
such Person, (c) obligations of Coleman or any of its
Subsidiaries in respect of that certain guarantee
issued by Hitachi Cable, Limited described in the notes
to the consolidated audited financial statements of
Coleman and its Subsidiaries for the fiscal year ended
June 30, 1993 delivered to the Administrative Agent and
the Lenders, which obligations shall not exceed at any
time $2,000,000 in the aggregate, (d) obligations of
Schwitzer in respect of that certain comfort letter
dated as of March 1, 1990 (the "Comfort Letter"),
addressed to National Westminster Bank, PLC (or its
successor), which obligations shall not exceed the
lesser of (i) the aggregate amount of obligations of
Schwitzer (Europe) Limited outstanding from time to
time under that certain credit facility referred to in
the Comfort Letter, or (ii) $5,000,000, and (e) the
Guaranties described on Schedule 9 hereto or any
similar Guaranties entered into in the ordinary course
of business of any such Person, which Guaranties relate
to Indebtedness not to exceed $3,000,000 in the
aggregate at any time outstanding."
(e) Section 7.8. Section 7.8 of the Credit Agreement,
Investments, is hereby amended by (i) deleting the word
"and" at the end of subsection (d) thereof, (ii) deleting
the period at the end of subsection (e) thereof and
inserting a comma and the word "and" in lieu thereof, and
(iii) inserting the following new subsection (f) after
existing subsection (e) thereof:
"(f) the Borrower or any of its Subsidiaries, so
long as Investments in Schwitzer (Europe) Limited,
Schwitzer (Europe) Holdings Limited or Lacom Schwitzer
Equipamentos, Ltda. do not exceed $5,000,000 in the
aggregate at any time outstanding during the term of
this Agreement."
(f) Section 7.9. Section 7.9 of the Credit Agreement,
Leases, is hereby amended by deleting Section 7.9 in its
entirety and by inserting the following in lieu thereof:
"Section 7.9 Leases. Neither the Borrower nor
any of its Subsidiaries will create, incur, assume, or
suffer to exist, any obligation for the payment of rent
or hire for property or assets of any kind whatsoever,
whether real or personal, including, without
limitation, Capitalized Lease Obligations, under leases
or lease agreements which would cause the aggregate
amount of all payments made by such Persons pursuant to
such leases or lease agreements to exceed $5,000,000
during any fiscal year during the term of this
Agreement."
(g) Section 7.10. Section 7.10 of the Credit
Agreement, Capital Expenditures, is hereby amended by
deleting Section 7.10 in its entirety and by inserting the
following in lieu thereof:
"Section 7.10 [RESERVED]."
(h) Section 7.15. Section 7.15 of the Credit
Agreement, Fixed Charge Coverage Ratio, is hereby amended by
deleting Section 7.15 in its entirety and by inserting the
following in lieu thereof:
"Section 7.15 Fixed Charge Coverage Ratio. The
Borrower shall not permit the ratio of (a) Cash Flow
for the four (4) most recently completed calendar
quarters to (b) Fixed Charges for such period, to be
less than the following as of the end of each calendar
quarter during the periods set forth below:
<TABLE>
<CAPTION>
Minimum
Period Ratio
-------- ---------
<S> <C>
Calendar Year 1994 1.00 to 1
Quarters Ending
March 31, 1995,
June 30, 1995 and
September 30, 1995 1.00 to 1
Quarter Ending
December 31, 1995 1.20 to 1
Quarters Ending
March 31, 1996 and
June 30, 1996 1.25 to 1
Quarters Ending
September 30, 1996 and
December 31, 1996 1.30 to 1
Calendar Year 1997 1.45 to 1
Calendar Year 1998 1.60 to 1
At all times thereafter 1.75 to 1"
</TABLE>
(i) Section 7.17. Section 7.17 of the Credit
Agreement, Indebtedness to Total Capital Ratio, is hereby
amended by deleting the table appearing therein in its
entirety and by inserting the following in lieu thereof:
<TABLE>
<CAPTION>
"Maximum
Period Ratio
------ --------
<S> <C>
From the Agreement Date through December 31, 1994 70%
From January 1, 1995 through December 31, 1995 57%
From January 1, 1996 through December 31, 1996 57%
From January 1, 1997 through December 31, 1997 55%
At all times thereafter 50%"
</TABLE>
(j) Section 7.18. Section 7.18 of the Credit
Agreement, Minimum Net Worth, is hereby amended by deleting
the table appearing therein in its entirety and by inserting
the following in lieu thereof:
<TABLE>
<CAPTION>
"Minimum
Period Amount
------ --------
<S> <C>
From the Agreement Date through December 31, 1994 $43 million
From January 1, 1995 through December 31, 1995 $65 million
From January 1, 1996 through December 31, 1996 $72 million
From January 1, 1997 through December 31, 1997 $80 million
From January 1, 1998 through December 31, 1998 $87 million
At all times thereafter $100 million"
</TABLE>
5. Amendment to Schedules. Schedules 1, 4 and 6 to the
Credit Agreement are hereby amended by deleting such Schedules in
their entireties and by substituting the revised Schedules 1, 4
and 6 attached hereto in lieu thereof. Schedules 8, 10, 11, 12
and 15 to the Credit Agreement are hereby amended by adding to
such Schedules the information regarding Schwitzer and its
Subsidiaries provided on Schedules 8S, 10S, 11S, 12S and 15S
attached hereto.
6. No Other Amendment or Waiver. Except for the
amendments and waivers set forth herein, the text of the Credit
Agreement shall remain unchanged and in full force and effect.
The amendments and waivers agreed to herein shall not constitute
a modification of the Credit Agreement or a course of dealing
with the Administrative Agent, the Managing Agents and the
Lenders, or any of them, at variance with the Credit Agreement
such as to require further notice by the Administrative Agent,
the Managing Agents, the Lenders, the Majority Lenders, or any of
them, to require strict compliance with the terms of the Credit
Agreement, as amended by this Amendment, in the future.
7. Representations and Warranties. The Borrower hereby
represents and warrants in favor of the Administrative Agent, the
Managing Agents and the Lenders as follows:
(a) Each representation and warranty set forth in Article 4
of the Credit Agreement is hereby restated and affirmed as true
and correct in all material respects as of the date hereof,
except to the extent the Borrower has previously updated the
Lenders with respect thereto;
(b) The Borrower has the corporate power and authority (i)
to enter into this Amendment and to execute and deliver the
Amended and Restated Revolving Loan Notes, the Amended and
Restated Term Loan Notes and the Amended and Restated Swing Line
Note referred to herein (collectively, the "New Notes"), and (ii)
to do all acts and things as are required or contemplated
hereunder to be done, observed and performed by it;
(c) This Amendment and the New Notes have been duly
authorized, validly executed and delivered by one or more
Authorized Signatories of the Borrower, and constitute the legal,
valid and binding obligation of the Borrower, enforceable against
the Borrower in accordance with their respective terms; and
(d) The execution and delivery of this Amendment and the
New Notes and the performance by the Borrower under the Credit
Agreement, as amended hereby, do not and will not require the
consent or approval of any regulatory authority or governmental
authority or agency having jurisdiction over the Borrower which
has not already been obtained, nor be in contravention of or in
conflict with the Articles of Incorporation or By-Laws of the
Borrower, or the provision of any statute, judgment, order,
indenture, instrument, agreement, or undertaking, to which the
Borrower is party or by which the Borrower's assets or properties
are or may become bound.
8. Conditions Precedent to Effectiveness of Amendment.
The effectiveness of this Amendment is subject to (i) the truth
and accuracy of the representations and warranties contained in
Section 7 hereof; (ii) the execution and delivery by the Borrower
of Amended and Restated Revolving Loan Notes and Amended and
Restated Term Loan Notes, one such Amended and Restated Revolving
Loan Note and one such Amended and Restated Term Loan Note
payable to each Lender; (iii) the execution and delivery by the
Borrower of an Amended and Restated Swing Line Note, payable to
NationsBank; (iv) the execution and delivery of an opinion of
Rudnick & Wolfe, special Illinois counsel to the Borrower and its
Subsidiaries, in the form of Exhibit E attached hereto; (v) the
execution and delivery by the Borrower of Agreements Regarding
Amendment Fees, one such Agreement addressed to each Lender; (vi)
the execution and delivery by the Borrower of a revised Schedule
1 to the Stock Pledge Agreement dated as of December 15, 1993
between the Borrower and the Administrative Agent, evidencing the
pledge to the Administrative Agent and the Lenders of the capital
stock of Schwitzer, together with stock certificates and stock
powers relating thereto, and the execution and delivery by the
Borrower of an officer's certificate with respect to such
Schedule 1; and (vii) receipt of any other documents that the
Administrative Agent, the Managing Agents, the Lenders, or any of
them, may reasonably request, certified by an officer of the
Borrower if so requested.
9. Covenants. The Borrower agrees, in connection with the
merger of Spinner Acquisition Corp., a Delaware corporation and a
wholly-owned Subsidiary of the Borrower, with and into Schwitzer,
Inc., a Delaware corporation (the "Merger"), to (i) prepay the
Schwitzer Domestic Indebtedness (as defined in this Amendment),
(ii) provide the Administrative Agent and the Lenders with the
collateral documents listed on Schedule 1 to this Amendment on or
before July 31, 1995 and the collateral documents listed on
Schedule 2 to this Amendment on or before August 31, 1995, and
(iii) provide the Administrative Agent and the Lenders with an
opinion of Rudnick & Wolfe, special Illinois counsel to the
Borrower and its Subsidiaries with respect to such collateral
documents on or before August 31, 1995, all of which shall be in
form and substance reasonably satisfactory to the Administrative
Agent.
10. Waivers. In conjunction with the Merger and subject to
the Borrower's compliance with Section 9 above, to the extent
that such items were not delivered to the Administrative Agent
and the Lenders in accordance with the terms and provisions of
the Credit Agreement and the Waiver Letter referred to below, the
Administrative Agent, the Managing Agents and the Lenders hereby
waive the requirements contained in: (i) Section 5.12 of the
Credit Agreement (as in effect immediately prior to giving effect
to this Amendment); (ii) Section 7.2(i) of the Credit Agreement
(as in effect immediately prior to giving effect to this
Amendment) with respect to the delivery to the Administrative
Agent and the Lenders of the items described in clauses (b)(i),
(ii), (iv), (vi), (vii), (viii), (ix), (x), and (xi) thereof; and
(iii) Section 4(b) of that certain Waiver Letter dated as of May
31, 1995, by and among the Borrower, the Administrative Agent and
the Lenders.
11. Counterparts. This Amendment may be executed in
multiple counterparts, each of which shall be deemed to be an
original and all of which, taken together, shall constitute one
and the same agreement.
12. Law of Contract. This Amendment shall be deemed to be
made pursuant to the laws of the State of Georgia with respect to
agreements made and to be performed wholly in the State of
Georgia and shall be construed, interpreted, performed and
enforced in accordance therewith.
13. Loan Document. This Amendment shall constitute a Loan
Document.
14. Effective Date. Upon satisfaction of the conditions
precedent referred to in Section 8 above, the amendments
contained herein, solely as related to the calculation and
application of the Applicable Margin to the Loans outstanding
under the Credit Agreement and the fees payable thereunder, shall
be effective as of June 1, 1995. All other amendments and
waivers contained herein shall be effective as of June 29, 1995.
IN WITNESS WHEREOF, the parties hereto have caused their
respective duly authorized officers or representatives to
execute, deliver and seal this Amendment as of the day and year
first above written, to be effective as set forth in Section 13
hereof.
BORROWER: KUHLMAN CORPORATION
By: /s/ Vernon J. Nagel
-------------------------------
Its: Executive Vice President
-------------------------
[CORPORATE SEAL] Attest: /s/ Richard A. Walker
---------------------------
Its: Secretary
-------------------------
ADMINISTRATIVE AGENT: NATIONSBANK OF GEORGIA, N.A.
By: /s/ Jan J. Serafen
-------------------------------
Its: Senior Vice President
-------------------------
LENDERS: NATIONSBANK OF GEORGIA, N.A.
By: /s/ Jan J. Serafen
-------------------------------
Its: Senior Vice President
-------------------------
THE CHASE MANHATTAN BANK, N.A.
By: /s/ Bruce S. Borden
-------------------------------
Its: Vice President
-------------------------
THE FIRST NATIONAL BANK OF BOSTON
By: /s/ Rod Guinn
-------------------------------
Its: Director
-------------------------
NBD BANK
By: /s/ John C. Otteson
-------------------------------
Its: Vice President
-------------------------
HARRIS TRUST AND SAVINGS BANK
By: /s/ Susan M. Kaminski
-------------------------------
Its: Vice President
-------------------------
J. P. MORGAN DELAWARE
By: /s/ Richard A. Burke
-------------------------------
Its: Associate
-------------------------
TRUST COMPANY OF GEORGIA BANK OF
SAVANNAH, N.A.
By: /s/ William B. Haile
-------------------------------
Its: Executive Vice President
-------------------------
EXHIBITS TO FOURTH AMENDMENT TO CREDIT AGREEMENT
Exhibit A - Form of Request for Advance or Letter of Credit
Exhibit B - Form of Revolving Loan Note
Exhibit C - Form of Swing Line Note
Exhibit D - Form of Term Loan Note
Exhibit E - Form of Opinion of Rudnick & Wolfe
SCHEDULES TO FOURTH AMENDMENT TO CREDIT AGREEMENT
Schedule 1 - Collateral Documents to be provided by July 31,
1995
Schedule 2 - Collateral Documents to be provided by August 31,
1995
REVISED SCHEDULES TO CREDIT AGREEMENT
Schedule 1 - Inactive Subsidiaries
Schedule 4 - Multi-Employer Plans
Schedule 6 - Subsidiaries and Capital Stock
Schedule 8S - Collective Bargaining Agreements
Schedule 10S - Litigation
Schedule 11S - Patents and Trademarks
Schedule 12S - Names
Schedule 15S - Indebtedness to be Prepaid
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM THE KUHLMAN
JUNE 30, 1995 CONSOLIDATED BALANCE SHEET AND THE STATEMENT OF INCOME FOR THE
SIX MONTHS ENDED JUNE 30, 1995 AND IS QUALIFIED IN ITS ENTIRETY BY REFERENCE
TO SUCH
STATEMENTS.
</LEGEND>
<S> <C>
<PERIOD-TYPE> 6-MOS
<FISCAL-YEAR-END> DEC-31-1994
<PERIOD-END> JUN-30-1995
<CASH> 3,797
<SECURITIES> 0
<RECEIVABLES> 62,285
<ALLOWANCES> 1,167
<INVENTORY> 45,155
<CURRENT-ASSETS> 117,522
<PP&E> 149,608
<DEPRECIATION> 84,283
<TOTAL-ASSETS> 225,390
<CURRENT-LIABILITIES> 67,939
<BONDS> 75,178
<COMMON> 13,205
0
0
<OTHER-SE> 59,324
<TOTAL-LIABILITY-AND-EQUITY> 225,390
<SALES> 209,740
<TOTAL-REVENUES> 209,740
<CGS> 169,636
<TOTAL-COSTS> 169,636
<OTHER-EXPENSES> 0
<LOSS-PROVISION> 839
<INTEREST-EXPENSE> 3,817
<INCOME-PRETAX> 6,374
<INCOME-TAX> 3,551
<INCOME-CONTINUING> 2,823
<DISCONTINUED> 0
<EXTRAORDINARY> 1,861
<CHANGES> 0
<NET-INCOME> 962
<EPS-PRIMARY> 0.07
<EPS-DILUTED> 0.07
</TABLE>
